Intermolecular, Inc. revenue decreased on 9.5% while EBITDA Margin jumped on 11.3 pp from -10.2% to 1.1%
02/12/2019 • About Intermolecular, Inc. (
$IMI) • By InTwits
Intermolecular, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Intermolecular, Inc. is a company in decline: 2018 revenue growth was -9.5%, 5 years revenue CAGR was -13.0%
- EBITDA Margin is expanding: 1.1% in 2018 vs. -10.2% in 2017 vs. -21.2% in 2014
- Intermolecular, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 0.0%. Average EBITDA Margin for the same period was -14.1%
- Intermolecular, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $1m in 2018, $1m in 2017, $2m in 2016, $1m in 2015, $3m in 2014
- The company has unprofitable business model: ROIC is -12.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Intermolecular, Inc.'s Revenue decreased on 9.5%. Revenue decline showed acceleration in 18Q4 - it was 40.1% YoY. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 11.3 pp from -10.2% to 1.1% in 2018. EBITDA Margin followed a growing trend at 5.6 pp per annum in the last 5 years.
Gross Margin increased on 2.8 pp from 67.5% to 70.3% in 2018. Gross Margin followed a growing trend at 5.4 pp per annum in 2014-2018. SG&A as a % of Revenue decreased on 3.5 pp from 35.5% to 32.0% in 2018. SG&A as a % of Revenue stuck to a declining trend at -1.8 pp per annum in 2014-2018.
Net Income margin jumped on 17.8 pp from -28.0% to -10.1% in 2018. Net Income margin grew at 8.9 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
Intermolecular, Inc.'s CAPEX/Revenue was 3.8% in 2018. Intermolecular, Inc. showed small growth in CAPEX/Revenue of 0.62 pp from 3.2% in 2015 to 3.8% in 2018. For the last three years the average CAPEX/Revenue was 3.6%. Battling declining revenue the company made large investments to CAPEX (349% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-12.3%) and ROE (-9.7%). ROIC surged on 14.8 pp from -27.1% to -12.3% in 2018. ROE surged on 16.0 pp from -25.7% to -9.7% in 2018. During 2014-2018 ROIC bottomed in 2016 at -31.4% and was growing since that time. During the last 5 years ROE bottomed in 2015 at -33.3% and was growing since that time.
Leverage (Debt)
The company has no debt. Cash surged on 37.1%.
Management team
Intermolecular, Inc.'s CEO is Christian F Kramer. Christian F Kramer is a founder and has 3 years tenure with the company. C Richard Neely Jr "Rick" is a Intermolecular, Inc.'s CFO. C Richard Neely Jr "Rick" has spent 2 years at the company.
Financial and operational results
FY ended 12/31/2018
Intermolecular, Inc. ($IMI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 47.695 | 45.322 | 47.298 | 37.203 | 33.660 | -9.5% |
| Gross Profit | 23.044 | 26.018 | 31.468 | 25.098 | 23.652 | -5.8% |
| SG&A | 18.406 | 18.168 | 18.096 | 13.217 | 10.772 | -18.5% |
| EBITDA | -10.095 | -9.998 | -6.331 | -3.811 | 0.369 | |
| Net Income | -21.761 | -21.013 | -15.437 | -10.403 | -3.411 | |
Balance Sheet
|
|---|
| Cash | 21.765 | 11.676 | 5.759 | 6.090 | 8.351 | 37.1% |
| Short Term Debt | 2.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 21.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 2.815 | 1.452 | 2.381 | 0.777 | 1.287 | 65.6% |
Ratios
|
|---|
| Revenue growth | -29.2% | -5.0% | 4.4% | -21.3% | -9.5% | |
| EBITDA growth | -838.5% | -1.0% | -36.7% | -39.8% | -109.7% | |
|
|---|
| Gross Margin | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% | 2.8% |
| EBITDA Margin | -21.2% | -22.1% | -13.4% | -10.2% | 1.1% | 11.3% |
| SG&A, % of revenue | 38.6% | 40.1% | 38.3% | 35.5% | 32.0% | -3.5% |
| Net Income Margin | -45.6% | -46.4% | -32.6% | -28.0% | -10.1% | 17.8% |
| CAPEX, % of revenue | 5.9% | 3.2% | 5.0% | 2.1% | 3.8% | 1.7% |
|
|---|
| ROIC | -20.7% | -27.8% | -31.4% | -27.1% | -12.3% | 14.8% |
| ROE | -28.1% | -33.3% | -30.5% | -25.7% | -9.7% | 16.0% |
| Net Debt/EBITDA | | | | | -22.6x |
Intermolecular, Inc. ($IMI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 10 | 10 | 8 | 6 | | -2.7% | 21.2% | -8.8% | -40.1% |
| EBITDA | 1 | 2 | -0 | -2 | | | | | -195.2% |
| Net Income | -1 | 0 | -1 | -3 | | | | | -2,338.8% |
Balance Sheet
|
|---|
| Cash | 4 | 4 | 7 | 8 | | -42.1% | -33.1% | -30.3% | 37.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 65.1% | 70.8% | 73.8% | 72.9% | | -4.9% | 2.3% | 7.2% | 7.9% |
| EBITDA Margin | 6.3% | 15.8% | -1.4% | -26.5% | | 46.6% | 32.8% | 0.8% | -43.3% |
| Net Income Margin | -6.4% | 5.1% | -8.7% | -41.1% | | 52.2% | 40.3% | 12.5% | -42.2% |
Peers in Semiconductors
Below we provide Intermolecular, Inc. benchmarking against other companies in Semiconductors 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 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 5.2% | 11.0% | 5.0% |
|---|
| Intermolecular, Inc. ($IMI) | | -5.0% | 4.4% | -21.3% | -9.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Xilinx, Inc. ($XLNX) | 68.8% | 70.2% | 69.7% | 69.9% | 69.9% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 47.2% | 48.6% | 50.4% |
|---|
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.9% | 11.5% | 9.2% | 10.7% | 10.0% |
|---|
| Intermolecular, Inc. ($IMI) | -21.2% | -22.1% | -13.4% | -10.2% | 1.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.6% |
|---|
| Intermolecular, Inc. ($IMI) | 5.9% | 3.2% | 5.0% | 2.1% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.7% | 3.2% | 5.2% |
|---|
| Intermolecular, Inc. ($IMI) | -20.7% | -27.8% | -31.4% | -27.1% | -12.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | 0.2x | 0.4x | 0.3x |
|---|
| Intermolecular, Inc. ($IMI) | | | | | -22.6x |
