ADDvantage Technologies Group, Inc. reports 292% EBITDA decline in 2018 and 2.7% Revenue decline
12/28/2018 • About ADDvantage Technologies Group, Inc. (
$AEY) • By InTwits
ADDvantage Technologies Group, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: -7.5% in FY2018 vs. 3.8% in FY2017 vs. 5.4% in FY2014
- EBITDA Margin is quite volatile: -7.5% in FY2018, 3.8% in FY2017, 4.1% in FY2016, 8.7% in FY2015, 5.4% in FY2014
- ADDvantage Technologies Group, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's a lot of higher than industry average of 0.6%.
- CAPEX is quite volatile: $0m in FY2018, $0m in FY2017, $0m in FY2016, $0m in FY2015, $10m in FY2014
- The company has unprofitable business model: ROIC is -12.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 2.7%. Revenue decline showed acceleration in FY18Q4 - it was 11.6% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 11.3 pp from 3.8% to -7.5% in FY2018. During the last 5 years EBITDA Margin topped in FY2015 at 8.7% and was declining since that time.
Gross Margin decreased on 6.7 pp from 30.4% to 23.7% in FY2018. During the last 5 years Gross Margin topped in FY2015 at 35.0% and was declining since that time. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin dropped on 15.2 pp from -0.20% to -15.4% in FY2018. During FY2014-FY2018 Net Income margin topped in FY2015 at 3.4% and was declining since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.27% in FY2018. ADDvantage Technologies Group, Inc.'s CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average CAPEX/Revenue for the last three years was 0.49%.
Return on investment
The company operates at negative ROIC (-12.4%) and ROE (-19.2%). ROIC dropped on 12.7 pp from 0.32% to -12.4% in FY2018. ROE dropped on 19.0 pp from -0.24% to -19.2% in FY2018. During FY2014-FY2018 ROIC topped in FY2015 at 5.6% and was declining since that time. During FY2014-FY2018 ROE topped in FY2015 at 3.7% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.4x and Debt / EBITDA is . Debt dropped on 58.7% while cash dropped on 21.2%.
ADDvantage Technologies Group, Inc. has no short term refinancing risk: cash is higher than short term debt (120.6%).
Financial and operational results
FY ended 09/30/2018
ADDvantage Technologies Group, Inc. ($AEY) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 35.889 | 43.734 | 38.663 | 48.714 | 47.414 | -2.7% |
| Gross Profit | 11.605 | 15.299 | 12.441 | 14.811 | 11.223 | -24.2% |
| SG&A | 10.508 | 12.723 | 12.097 | 14.665 | 14.325 | -2.3% |
| EBITDA | 1.939 | 3.811 | 1.592 | 1.860 | -3.562 | -291.5% |
| Net Income | -0.007 | 1.498 | 0.294 | -0.098 | -7.320 | |
Balance Sheet
|
|---|
| Cash | 5.286 | 6.111 | 4.508 | 3.973 | 3.129 | -21.2% |
| Short Term Debt | 0.846 | 0.874 | 0.900 | 4.190 | 2.594 | -38.1% |
| Long Term Debt | 5.240 | 4.366 | 3.466 | 2.094 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 9.675 | 0.173 | 0.318 | 0.190 | 0.127 | -33.1% |
Ratios
|
|---|
| Revenue growth | 25.1% | 21.9% | -11.6% | 26.0% | -2.7% | |
| EBITDA growth | -38.9% | 96.5% | -58.2% | 16.8% | -291.5% | |
|
|---|
| Gross Margin | 32.3% | 35.0% | 32.2% | 30.4% | 23.7% | -6.7% |
| EBITDA Margin | 5.4% | 8.7% | 4.1% | 3.8% | -7.5% | -11.3% |
| SG&A, % of revenue | 29.3% | 29.1% | 31.3% | 30.1% | 30.2% | 0.1% |
| Net Income Margin | -0.0% | 3.4% | 0.8% | -0.2% | -15.4% | -15.2% |
| CAPEX, % of revenue | 27.0% | 0.4% | 0.8% | 0.4% | 0.3% | -0.1% |
|
|---|
| ROIC | 2.5% | 5.6% | 0.8% | 0.3% | -12.4% | -12.7% |
| ROE | -0.0% | 3.7% | 0.7% | -0.2% | -19.2% | -19.0% |
| Net Debt/EBITDA | 0.4x | -0.2x | -0.1x | 1.2x | |
ADDvantage Technologies Group, Inc. ($AEY) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 12 | 12 | 8 | 11 | | 1.6% | 3.1% | -40.9% | -11.6% |
| EBITDA | 0 | 0 | -0 | -3 | | -82.7% | -38.0% | -207.8% | -4,346.7% |
| Net Income | -1 | -0 | -2 | -5 | | -425.5% | -2,533.7% | | |
Balance Sheet
|
|---|
| Cash | 0 | 1 | 2 | 3 | | -89.9% | -77.2% | -42.8% | -21.2% |
| Short Term Debt | 2 | 3 | 3 | 3 | | -30.2% | 30.1% | -56.4% | -38.1% |
| Long Term Debt | 2 | 0 | 0 | 0 | | -70.2% | -100.0% | | -100.0% |
Ratios
|
|---|
| Gross Margin | 27.5% | 28.7% | 26.0% | 13.0% | | -5.7% | -4.6% | -2.9% | -13.5% |
| EBITDA Margin | 1.2% | 2.8% | -5.9% | -25.1% | | -5.8% | -1.9% | -9.2% | -25.6% |
| Net Income Margin | -5.8% | -2.2% | -19.6% | -44.4% | | -7.5% | -2.3% | -19.1% | -42.3% |
Peers in Technology Distributors
Below we provide ADDvantage Technologies Group, Inc. benchmarking against other companies in Technology Distributors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tech Data Corporation ($TECD) | | 3.2% | -4.7% | -8.3% | 38.9% |
| EACO Corp ($EACO) | | 4.1% | 5.9% | 5.7% | 23.1% |
| Richardson Electronics, Ltd. ($RELL) | | -0.7% | 3.7% | -3.6% | 19.2% |
| Synnex Corporation ($SNX) | | -3.6% | 5.4% | 21.2% | 17.6% |
| Wayside Technology Group, Inc. ($WSTG) | | 12.1% | 9.4% | -61.6% | 13.0% |
| |
|---|
| Median (16 companies) | | 4.1% | 5.3% | 4.2% | 8.9% |
|---|
| ADDvantage Technologies Group, Inc. ($AEY) | | 21.9% | -11.6% | 26.0% | -2.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Taitron Components Incorporated ($TAIT) | 25.4% | 31.1% | -10.8% | 39.4% | 44.0% |
| Richardson Electronics, Ltd. ($RELL) | 29.7% | 30.0% | 31.6% | 32.1% | 33.7% |
| EACO Corp ($EACO) | 27.5% | 29.3% | 29.3% | 28.5% | 28.5% |
| Surge Components Inc ($SPRS) | 24.5% | 25.0% | 25.2% | 25.2% | 25.6% |
| ePlus inc. ($PLUS) | 21.7% | 21.4% | 21.8% | 22.5% | 22.8% |
| |
|---|
| Median (16 companies) | 14.2% | 13.5% | 13.8% | 16.5% | 15.6% |
|---|
| ADDvantage Technologies Group, Inc. ($AEY) | 32.3% | 35.0% | 32.2% | 30.4% | 23.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Taitron Components Incorporated ($TAIT) | -8.6% | -3.2% | -39.0% | 13.0% | 19.2% |
| CDW Corporation ($CDW) | 7.3% | 7.5% | 7.7% | 7.6% | 7.7% |
| ePlus inc. ($PLUS) | 7.3% | 7.5% | 7.6% | 7.3% | 7.1% |
| EACO Corp ($EACO) | 4.0% | 4.5% | 4.7% | 4.5% | 5.9% |
| Surge Components Inc ($SPRS) | 2.8% | 3.8% | -1.5% | 1.2% | 4.8% |
| |
|---|
| Median (16 companies) | 3.2% | 3.5% | 3.4% | 3.5% | 4.1% |
|---|
| ADDvantage Technologies Group, Inc. ($AEY) | 5.4% | 8.7% | 4.1% | 3.8% | -7.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Richardson Electronics, Ltd. ($RELL) | 2.0% | 3.5% | 3.4% | 3.8% | 3.2% |
| ePlus inc. ($PLUS) | 0.9% | 1.0% | 2.1% | 1.5% | 1.0% |
| EACO Corp ($EACO) | 0.6% | 0.4% | 0.3% | 5.5% | 0.8% |
| Avnet, Inc. ($AVT) | 0.4% | 0.6% | 0.8% | 0.7% | 0.8% |
| PC Connection, Inc. ($CNXN) | 0.3% | 0.5% | 0.4% | 0.4% | 0.8% |
| |
|---|
| Median (16 companies) | 0.4% | 0.6% | 0.4% | 0.5% | 0.5% |
|---|
| ADDvantage Technologies Group, Inc. ($AEY) | 27.0% | 0.4% | 0.8% | 0.4% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Surge Components Inc ($SPRS) | 6.7% | 9.5% | -4.0% | 3.9% | 24.6% |
| CDW Corporation ($CDW) | 16.5% | 17.3% | 18.8% | 20.1% | 23.1% |
| EACO Corp ($EACO) | 19.6% | 21.8% | 22.2% | 16.1% | 21.2% |
| ePlus inc. ($PLUS) | 20.1% | 21.0% | 21.5% | 22.8% | 20.8% |
| Insight Enterprises, Inc. ($NSIT) | 17.0% | 17.4% | 20.7% | 19.3% | 20.0% |
| |
|---|
| Median (17 companies) | 13.6% | 12.1% | 12.5% | 11.5% | 11.8% |
|---|
| ADDvantage Technologies Group, Inc. ($AEY) | 2.5% | 5.6% | 0.8% | 0.3% | -12.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Synnex Corporation ($SNX) | 2.0x | 0.9x | 1.2x | 2.1x | 3.9x |
| Anixter International Inc. ($AXE) | 3.2x | 4.7x | 3.6x | 3.0x | 3.1x |
| ScanSource, Inc. ($SCSC) | -1.4x | -0.9x | 0.2x | 0.6x | 2.5x |
| CDW Corporation ($CDW) | 3.2x | 3.3x | 2.8x | 2.7x | 2.4x |
| Arrow Electronics, Inc. ($ARW) | 1.8x | 2.2x | 2.2x | 2.3x | 2.2x |
| |
|---|
| Median (16 companies) | -0.2x | -0.4x | 0.7x | 0.9x | 0.9x |
|---|
