Wayside Technology Group, Inc. EBITDA dropped on 44.1% and EBITDA Margin decreased on 2.6 pp from 5.2% to 2.6%
02/25/2019 • About Wayside Technology Group, Inc. (
$WSTG) • By InTwits
Wayside Technology Group, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 2.6% in 2018, 5.2% in 2017, 2.1% in 2016, 2.3% in 2015, 2.5% in 2014
- Wayside Technology Group, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.2%.
- The company has business model with average profitability: ROIC is 10.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 13.0%. Revenue growth showed slowdown in 18Q4 - it was 10.4% YoY. During 2014-2018 Revenue growth bottomed in 2017 at -61.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 56.3 pp from -57.2% to -0.89% in FY2018.
Gross Margin decreased on 2.0 pp from 16.9% to 14.8% in 2018. SG&A as a % of Revenue decreased slightly on 0.80 pp from 12.0% to 11.2% in 2018.
Net Income margin decreased slightly on 1.2 pp from 3.2% to 1.9% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.15% in 2018. The company showed almost no change in CAPEX/Revenue from 2015 to 2018. It's average CAPEX/Revenue for the last three years was 0.21%.
Return on investment
The company operates at low ROIC (10.3%) and ROE (8.9%). ROIC decreased on 9.4 pp from 19.7% to 10.3% in 2018. ROE decreased on 4.3 pp from 13.3% to 8.9% in 2018.
Leverage (Debt)
The company has no debt. Cash surged on 169%.
Valuation and dividends
The company's trades at EV/EBITDA 7.3x and P/E 13.7x.
Management team
The company's CEO Michael Vesey "Mike" is a founder and has spent 0 years with the company. Wayside Technology Group, Inc.'s CFO Michael Vesey "Mike" has spent 2 years with the company.
Financial and operational results
FY ended 12/31/2018
Wayside Technology Group, Inc. ($WSTG) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 340.8 | 382.1 | 418.1 | 160.6 | 181.4 | 13.0% |
| Gross Profit | 24.8 | 26.6 | 27.3 | 27.1 | 26.9 | -0.6% |
| SG&A | 16.5 | 16.9 | 17.0 | 19.3 | 20.3 | 5.5% |
| EBITDA | 8.5 | 8.8 | 8.9 | 8.3 | 4.6 | -44.1% |
| Net Income | 5.8 | 5.8 | 5.9 | 5.1 | 3.5 | -30.1% |
Balance Sheet
|
|---|
| Cash | 23.1 | 23.8 | 13.5 | 5.5 | 14.9 | 169.1% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.3 | 0.2 | 1.0 | 0.4 | 0.3 | -25.9% |
Ratios
|
|---|
| Revenue growth | 13.4% | 12.1% | 9.4% | -61.6% | 13.0% | |
| EBITDA growth | -6.6% | 2.8% | 1.7% | -7.0% | -44.1% | |
|
|---|
| Gross Margin | 7.3% | 7.0% | 6.5% | 16.9% | 14.8% | -2.0% |
| EBITDA Margin | 2.5% | 2.3% | 2.1% | 5.2% | 2.6% | -2.6% |
| SG&A, % of revenue | 4.8% | 4.4% | 4.1% | 12.0% | 11.2% | -0.8% |
| Net Income Margin | 1.7% | 1.5% | 1.4% | 3.2% | 1.9% | -1.2% |
| CAPEX, % of revenue | 0.1% | 0.1% | 0.2% | 0.2% | 0.1% | -0.1% |
|
|---|
| ROIC | 21.4% | 20.8% | 21.5% | 19.7% | 10.3% | -9.4% |
| ROE | 15.5% | 14.9% | 15.5% | 13.3% | 8.9% | -4.3% |
| Net Debt/EBITDA | -2.7x | -2.7x | -1.5x | -0.7x | -3.2x | -2.5x |
Wayside Technology Group, Inc. ($WSTG) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 41 | 44 | 48 | 49 | | 6.5% | -57.4% | 22.8% | 10.4% |
| EBITDA | 2 | -1 | 2 | 2 | | 2.9% | -160.8% | -20.6% | -13.0% |
| Net Income | 2 | -1 | 1 | 2 | | 21.2% | -187.6% | -1.7% | 54.2% |
Balance Sheet
|
|---|
| Cash | 7 | 10 | 6 | 15 | | -36.9% | 7.0% | 59.0% | 169.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | -100.0% | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 17.0% | 14.8% | 13.2% | 14.7% | | -0.7% | 8.4% | -2.8% | -2.2% |
| EBITDA Margin | 4.8% | -2.6% | 3.2% | 4.6% | | -0.2% | -4.4% | -1.7% | -1.2% |
| Net Income Margin | 3.9% | -2.5% | 2.8% | 3.5% | | 0.5% | -3.8% | -0.7% | 1.0% |
Peers in Technology Distributors
Below we provide Wayside Technology 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% |
| Arrow Electronics, Inc. ($ARW) | | 2.3% | 0.9% | 13.1% | 11.8% |
| |
|---|
| Median (16 companies) | | 4.1% | 4.6% | 5.7% | 8.3% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | | 12.1% | 9.4% | -61.6% | 13.0% |
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% |
| ADDvantage Technologies Group, Inc. ($AEY) | 32.3% | 35.0% | 32.2% | 30.4% | 23.7% |
| |
|---|
| Median (16 companies) | 15.9% | 16.3% | 14.2% | 16.5% | 16.3% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | 7.3% | 7.0% | 6.5% | 16.9% | 14.8% |
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 ($SPRS) | 2.8% | 3.8% | -1.5% | 1.2% | 4.8% |
| |
|---|
| Median (16 companies) | 3.2% | 3.5% | 3.6% | 3.5% | 4.1% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | 2.5% | 2.3% | 2.1% | 5.2% | 2.6% |
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. ($CNXN) | 0.3% | 0.5% | 0.4% | 0.4% | 0.8% |
| |
|---|
| Median (16 companies) | 0.5% | 0.6% | 0.4% | 0.5% | 0.5% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | 0.1% | 0.1% | 0.2% | 0.2% | 0.1% |
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. ($NSIT) | 17.0% | 17.4% | 20.7% | 19.3% | 20.0% |
| |
|---|
| Median (17 companies) | 11.9% | 11.9% | 12.1% | 9.9% | 11.8% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | 21.4% | 20.8% | 21.5% | 19.7% | 10.3% |
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. ($ARW) | 1.8x | 2.2x | 2.2x | 2.3x | 2.2x |
| |
|---|
| Median (15 companies) | 0.1x | -0.2x | 0.7x | 1.2x | 1.2x |
|---|
| Wayside Technology Group, Inc. ($WSTG) | -2.7x | -2.7x | -1.5x | -0.7x | -3.2x |
