Trimble Inc. Net Income jumped on 139% and Revenue surged on 17.5%
02/06/2019 • About Trimble Inc. (
$TRMB) • By InTwits
Trimble Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Trimble Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 5.2%.
- CAPEX is quite volatile: $53m in FY2018, $39m in FY2017, $63m in FY2016, $60m in FY2015, $23m in FY2014
- In the last 5 years the company invested considerably less than D&A: $229m vs. $977m. In FY2018 this situation was still the same: CAPEX was 68 while D&A was 215
- The company has business model with low profitability: ROIC is 7.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.4x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Trimble Inc.'s Revenue surged on 17.5%. Revenue growth showed slowdown in FY18Q4 - it was 12.2% YoY. During FY2014-FY2018 Revenue growth bottomed in FY2015 at -4.4% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.5 pp from 21.4% to 16.8% in 2018. During the last 5 years EBITDA Margin bottomed in FY2015 at 15.4% and was growing since that time.
Gross Margin increased on 2.0 pp from 52.1% to 54.1% in FY2018. During the last 5 years Gross Margin bottomed in FY2017 at 52.1%. SG&A as a % of Revenue showed almost no change in FY2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018. SBC as a % of Revenue followed a growing trend in the last 5 years.
Net Income margin increased on 4.6 pp from 4.5% to 9.1% in FY2018.
Investments (CAPEX, working capital and M&A)
Trimble Inc.'s CAPEX/Revenue was 2.2% in FY2018. Trimble Inc. showed almost no change in CAPEX/Revenue from FY2015 to FY2018. It's average CAPEX/Revenue for the last three years was 1.6%. During FY2014-FY2018 CAPEX as a % of Revenue bottomed in FY2016 at 1.1% and was growing since that time.
Accounts receivable as a % of Revenue showed almost no change in FY2018. Inventories as a % of Revenue showed almost no change at 9.6% in FY2018. Accounts payable as a % of Revenue decreased slightly on 1.2 pp from 11.5% to 10.3% in FY2018.
Trimble Inc. has spent
$1,764m on M&A in FY2018 which accounts for 56.7% of revenue.
Return on investment
The company operates at low ROIC (7.9%) and ROE (11.1%). ROIC showed almost no change in FY2018. ROE increased on 6.1 pp from 5.0% to 11.1% in FY2018. During the last 5 years ROIC bottomed in FY2015 at 5.0% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.4x and Debt / EBITDA is 3.7x. Net Debt / EBITDA jumped on 2.0x from 1.3x to 3.4x in FY2018. Debt surged on 115% while cash dropped on 51.9%.
Trimble Inc. has short term refinancing risk: cash is only 67.3% of short term debt.
Valuation and dividends
Trimble Inc.'s trades at EV/EBITDA 21.6x and P/E 34.6x.
Management team
The company's CEO Steven W Berglund is a founder and has spent 2 years with the company. CEO total compensation was
$11,177,172 in FY2018 which included
$961,400 salary. Trimble Inc.'s CFO is Robert G Painter "Rob". Robert G Painter "Rob" has 2 years tenure at the company.
The company has 0.47% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 11,287 employees. The number of employees didn't change in 2018. Average revenue per employee in FY2018 was
$275,396 and it jumped on 17.5%.
Financial and operational results
FY ended 12/30/2018
Trimble Inc. ($TRMB) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 2,396 | 2,290 | 2,362 | 2,647 | 3,108 | 17.5% |
| Gross Profit | 1,291 | 1,202 | 1,238 | 1,378 | 1,681 | 22.0% |
| SG&A | 635 | 630 | 634 | 702 | 830 | 18.2% |
| EBITDA | 452 | 354 | 369 | 419 | 536 | 27.9% |
| EBIT | 261 | 154 | 181 | 236 | 321 | 36.1% |
| Tax | 52 | 31 | 45 | 130 | -5 | -104.1% |
| Net Income | 214 | 121 | 132 | 118 | 283 | 138.9% |
| Stock Based Compensation | 29 | 50 | 53 | 65 | 77 | 18.7% |
Balance Sheet
|
|---|
| Cash | 148 | 116 | 216 | 359 | 173 | -51.9% |
| Accounts Receivable | 362 | 362 | 355 | 428 | 513 | 19.9% |
| Inventory | 278 | 261 | 219 | 265 | 298 | 12.6% |
| Accounts Payable | 104 | 100 | 110 | 146 | 148 | 1.1% |
| Short Term Debt | 64 | 118 | 130 | 128 | 256 | 99.5% |
| Long Term Debt | 671 | 611 | 490 | 786 | 1,712 | 118.0% |
Cash flow
|
|---|
| Capex | 47 | 44 | 26 | 44 | 68 | 54.7% |
| Acquisitions | 308 | 156 | 39 | 280 | 1,764 | 529.4% |
Ratios
|
|---|
| Revenue growth | 4.7% | -4.4% | 3.1% | 12.0% | 17.5% | |
| EBITDA growth | 2.5% | -21.9% | 4.3% | 13.6% | 27.9% | |
|
|---|
| Gross Margin | 53.9% | 52.5% | 52.4% | 52.1% | 54.1% | 2.0% |
| EBITDA Margin | 18.9% | 15.4% | 15.6% | 15.8% | 17.2% | 1.4% |
| EBIT Margin | 10.9% | 6.7% | 7.7% | 8.9% | 10.3% | 1.4% |
| SG&A, % of revenue | 26.5% | 27.5% | 26.8% | 26.5% | 26.7% | 0.2% |
| SBC, % of revenue | 1.2% | 2.2% | 2.2% | 2.4% | 2.5% | 0.0% |
| Net Income Margin | 8.9% | 5.3% | 5.6% | 4.5% | 9.1% | 4.6% |
| CAPEX, % of revenue | 2.0% | 1.9% | 1.1% | 1.7% | 2.2% | 0.5% |
|
|---|
| ROIC | 8.4% | 5.0% | 6.1% | 7.5% | 7.9% | 0.5% |
| ROE | 9.4% | 5.3% | 5.9% | 5.0% | 11.1% | 6.1% |
| Net Debt/EBITDA | 1.3x | 1.7x | 1.1x | 1.3x | 3.4x | 2.0x |
People
|
|---|
| Insider ownership | 0.5% | 0.5% | 0.5% | 0.5% | 0.5% | 0.0% |
| Employees | 8,217 | 8,451 | 8,388 | 11,287 | 11,287 | 0.0% |
| Revenue/Employee, th. $ | 292 | 271 | 282 | 234 | 275 | 17.5% |
Trimble Inc. ($TRMB) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 742 | 786 | 795 | 786 | | 21.6% | 19.0% | 17.6% | 12.2% |
| EBITDA | 113 | 141 | 136 | 146 | | 16.8% | 35.9% | 18.4% | 40.6% |
| Net Income | 59 | 64 | 74 | 87 | | 17.5% | 35.5% | 28.8% | |
Balance Sheet
|
|---|
| Cash | 275 | 571 | 205 | 173 | | -2.2% | 48.4% | -19.5% | -51.9% |
| Short Term Debt | 431 | 0 | 226 | 256 | | 211.3% | -99.7% | 67.0% | 99.5% |
| Long Term Debt | 692 | 1,286 | 1,787 | 1,712 | | 35.7% | 176.6% | 218.8% | 118.0% |
Ratios
|
|---|
| Gross Margin | 53.4% | 53.8% | 53.7% | 55.4% | | 0.3% | 1.9% | 1.7% | 4.0% |
| EBITDA Margin | 15.3% | 17.9% | 17.1% | 18.5% | | -0.6% | 2.2% | 0.1% | 3.7% |
| Net Income Margin | 7.9% | 8.2% | 9.3% | 11.0% | | -0.3% | 1.0% | 0.8% | 16.1% |
Peers in Electronic Equipment & Instrum
Below we provide Trimble Inc. benchmarking against other companies in Electronic Equipment & Instrum 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 |
|---|
| Hickok Inc ($HICKA) | | -7.2% | 13.5% | 258.4% | 178.7% |
| Electro Scientific Industries, Inc. ($ESIO) | | -12.2% | 15.9% | -12.7% | 128.5% |
| Microvision, Inc. ($MVIS) | | 163.6% | 60.7% | -34.7% | 82.8% |
| Ipsidy Inc ($IDTY) | | | | | 66.2% |
| Magal Security Systems Ltd. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (61 companies) | -78.5% | 4.5% | 0.3% | 3.6% | 9.1% |
|---|
| Trimble Inc. ($TRMB) | | -4.4% | 3.1% | 12.0% | 17.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intellicheck, Inc. ($IDN) | 58.2% | 57.1% | 80.0% | 85.5% | 91.3% |
| Image Sensing Systems, Inc. ($ISNS) | 74.7% | 77.1% | 71.0% | 79.9% | 80.9% |
| National Instruments Corporation ($NATI) | 74.4% | 74.1% | 74.5% | 74.5% | 75.4% |
| Cognex Corporation ($CGNX) | 77.9% | 77.2% | 75.2% | 75.6% | 74.4% |
| Applied DNA Sciences Inc ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (60 companies) | 41.7% | 41.8% | 40.1% | 41.5% | 40.9% |
|---|
| Trimble Inc. ($TRMB) | 53.9% | 52.5% | 52.4% | 52.1% | 54.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cognex Corporation ($CGNX) | 32.9% | 30.1% | 31.9% | 36.0% | 30.1% |
| Coherent, Inc. ($COHR) | 14.2% | 16.7% | 18.9% | 24.9% | 26.6% |
| Hollysys Automation Technologies, Ltd. ($HOLI) | 21.3% | 26.9% | 23.5% | 16.1% | 23.9% |
| Electro Scientific Industries, Inc. ($ESIO) | -10.1% | -19.1% | -2.0% | -17.8% | 23.1% |
| FLIR Systems, Inc. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (60 companies) | 5.3% | 3.9% | 3.0% | 3.0% | 3.3% |
|---|
| Trimble Inc. ($TRMB) | 18.9% | 15.4% | 15.6% | 15.8% | 17.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Wrap Technologies Inc ($WRTC) | | | | | 61.4% |
| ClearSign Combustion Corporation ($CLIR) | | 80.3% | 22.1% | 17.4% | 17.7% |
| LightPath Technologies, Inc. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (60 companies) | 1.8% | 2.0% | 2.1% | 1.6% | 2.3% |
|---|
| Trimble Inc. ($TRMB) | 2.0% | 1.9% | 1.1% | 1.7% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evans & Sutherland Computer Corp ($ESCC) | | | 83.3% | 39.6% | 55.3% |
| Electro Scientific Industries, Inc. ($ESIO) | -11.7% | -19.7% | -7.1% | -22.9% | 31.5% |
| Coherent, Inc. ($COHR) | 9.9% | 13.1% | 15.6% | 24.0% | 21.5% |
| Zebra Technologies Corporation ($ZBRA) | 3.3% | 0.9% | 2.2% | 10.2% | 20.8% |
| Cognex Corporation ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (72 companies) | 3.3% | 1.8% | 1.8% | 1.8% | 0.9% |
|---|
| Trimble Inc. ($TRMB) | 8.4% | 5.0% | 6.1% | 7.5% | 7.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Itron, Inc. ($ITRI) | 2.1x | 1.9x | 1.0x | 2.0x | 12.3x |
| Track Group Inc ($TRCK) | | | | | 12.2x |
| Mesa Laboratories, Inc. ($MLAB) | 0.7x | 1.1x | 1.7x | 2.0x | 3.5x |
| MTS Systems Corporation ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| OSI Systems, Inc. ($OSIS) | -0.0x | -0.2x | 0.3x | 1.7x | 2.2x |
| |
|---|
| Median (35 companies) | -0.8x | -0.9x | -0.9x | -0.8x | -0.9x |
|---|
| Trimble Inc. ($TRMB) | 1.3x | 1.7x | 1.1x | 1.3x | 3.4x |
