BK Technologies, Inc. revenue surged on 25.3% and EBITDA Margin jumped on 17.1 pp from -10.4% to 6.8%
02/27/2019 • About BK Technologies, Inc. (
$BKTI) • By InTwits
BK Technologies, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- BK Technologies, Inc. is a growth stock: 2018 revenue growth was 25.3%, 5 year revenue CAGR was 12.8% at 2018 ROIC 8.1%
- EBITDA Margin is quite volatile: 6.8% in 2018, -10.4% in 2017, 10.3% in 2016, 7.9% in 2015, 12.0% in 2014
- BK Technologies, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $1m in 2018, $1m in 2017, $1m in 2016, $1m in 2015, $1m in 2014
- The company has business model with low profitability: ROIC is 8.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 25.3%. Revenue growth showed slowdown in 18Q4 - it was 13.3% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 56.3 pp from -57.2% to -0.89% in FY2018.
Gross Margin jumped on 16.2 pp from 24.2% to 40.5% in 2018. During 2014-2018 Gross Margin bottomed in 2017 at 24.2%. SG&A as a % of Revenue decreased slightly on 1.5 pp from 37.0% to 35.5% in 2018. SG&A as a % of Revenue grew at 3.9 pp per annum in the last 5 years.
Net Income margin increased on 8.8 pp from -9.2% to -0.39% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 BK Technologies, Inc. had CAPEX/Revenue of 2.8%. The company's CAPEX/Revenue decreased slightly on 0.84 pp from 3.7% in 2015 to 2.8% in 2018. For the last three years the average CAPEX/Revenue was 2.4%.
Return on investment
The company operates at low but positive ROIC (8.1%) and negative ROE (-0.7%). ROIC jumped on 24.5 pp from -16.4% to 8.1% in 2018. ROE surged on 10.0 pp from -10.7% to -0.65% in 2018.
Leverage (Debt)
The company has no debt. Cash jumped on 57.7%.
Financial and operational results
FY ended 12/31/2018
BK Technologies, Inc. ($BKTI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 30.971 | 29.722 | 50.689 | 39.395 | 49.380 | 25.3% |
| Gross Profit | 13.187 | 12.282 | 17.077 | 9.550 | 19.977 | 109.2% |
| SG&A | 6.959 | 7.252 | 12.792 | 14.577 | 17.552 | 20.4% |
| EBITDA | 3.713 | 2.344 | 5.227 | -4.085 | 3.346 | |
| Net Income | 1.623 | 1.041 | 2.689 | -3.626 | -0.195 | |
Balance Sheet
|
|---|
| Cash | 11.363 | 4.669 | 10.910 | 7.147 | 11.268 | 57.7% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.697 | 1.089 | 1.394 | 0.628 | 1.396 | 122.3% |
Ratios
|
|---|
| Revenue growth | 14.6% | -4.0% | 70.5% | -22.3% | 25.3% | |
| EBITDA growth | 19.2% | -36.9% | 123.0% | -178.2% | -181.9% | |
|
|---|
| Gross Margin | 42.6% | 41.3% | 33.7% | 24.2% | 40.5% | 16.2% |
| EBITDA Margin | 12.0% | 7.9% | 10.3% | -10.4% | 6.8% | 17.1% |
| SG&A, % of revenue | 22.5% | 24.4% | 25.2% | 37.0% | 35.5% | -1.5% |
| Net Income Margin | 5.2% | 3.5% | 5.3% | -9.2% | -0.4% | 8.8% |
| CAPEX, % of revenue | 2.3% | 3.7% | 2.8% | 1.6% | 2.8% | 1.2% |
|
|---|
| ROIC | 9.1% | 5.0% | 13.9% | -16.4% | 8.1% | 24.5% |
| ROE | 5.0% | 3.1% | 7.6% | -10.7% | -0.7% | 10.0% |
| Net Debt/EBITDA | -3.1x | -2.0x | -2.1x | | -3.4x |
BK Technologies, Inc. ($BKTI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 12 | 14 | 13 | 11 | | 59.2% | 26.9% | 12.4% | 13.3% |
| EBITDA | 1 | 2 | 1 | -0 | | | 28.3% | 176.3% | |
| Net Income | -0 | 1 | 1 | -1 | | | -28.1% | 8.3% | |
Balance Sheet
|
|---|
| Cash | 8 | 11 | 11 | 11 | | -3.2% | 43.2% | 27.0% | 57.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 41.2% | 43.1% | 41.1% | 35.5% | | 10.9% | 1.3% | 8.8% | 46.1% |
| EBITDA Margin | 8.2% | 11.4% | 8.6% | -2.9% | | 21.4% | 0.1% | 5.1% | 47.3% |
| Net Income Margin | -3.8% | 6.9% | 4.9% | -12.6% | | 13.4% | -5.3% | -0.2% | 32.7% |
Peers in Communications Equipment
Below you can find BK Technologies, Inc. benchmarking vs. other companies in Communications Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ribbon Communications Inc. ($RBBN) | | | | 30.6% | 75.2% |
| Extreme Networks, Inc. ($EXTR) | | 6.4% | -4.4% | 13.2% | 64.4% |
| Optical Cable Corporation ($OCC) | | -11.3% | -12.2% | -0.8% | 37.0% |
| ParkerVision Inc ($PRKR) | | | 37,601.2% | -97.5% | 35.0% |
| Network-1 Technologies, Inc. ($NTIP) | | 34.6% | 292.9% | -74.7% | 34.4% |
| |
|---|
| Median (66 companies) | | 0.7% | 7.3% | 5.6% | 2.8% |
|---|
| BK Technologies, Inc. ($BKTI) | | -4.0% | 70.5% | -22.3% | 25.3% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 82.1% | 82.7% | 83.1% | 83.1% | 83.3% |
| Radware Ltd. ($RDWR) | 82.1% | 82.4% | 81.8% | 81.3% | 82.2% |
| Radcom Ltd. ($RDCM) | 63.2% | 76.8% | 69.6% | 71.8% | 74.0% |
| Casa Systems, Inc. ($CASA) | | 70.8% | 69.1% | 73.4% | 73.4% |
| NetScout Systems, Inc. ($NTCT) | 78.7% | 79.2% | 65.6% | 70.2% | 72.4% |
| |
|---|
| Median (67 companies) | 41.4% | 44.0% | 43.9% | 41.7% | 41.2% |
|---|
| BK Technologies, Inc. ($BKTI) | 42.6% | 41.3% | 33.7% | 24.2% | 40.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 35.5% | 33.7% | 50.6% | 37.8% | 42.8% |
| InterDigital, Inc. ($IDCC) | 50.8% | 58.1% | 73.6% | 67.3% | 41.9% |
| EchoStar Corporation ($SATS) | 25.7% | 39.7% | 40.3% | 38.1% | 37.4% |
| Ubiquiti Networks, Inc. ($UBNT) | 34.7% | 25.5% | 37.3% | 34.3% | 32.8% |
| Ituran Location and Control Ltd. ($ITRN) | 32.4% | 30.5% | 29.9% | 29.9% | 30.4% |
| |
|---|
| Median (65 companies) | 5.3% | 4.7% | 5.5% | 6.5% | 4.6% |
|---|
| BK Technologies, Inc. ($BKTI) | 12.0% | 7.9% | 10.3% | -10.4% | 6.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Resonant Inc. ($RESN) | | | 132.5% | 124.8% | 245.2% |
| ViaSat, Inc. ($VSAT) | 22.8% | 26.5% | 26.7% | 33.0% | 32.1% |
| Applied Optoelectronics, Inc. ($AAOI) | 31.5% | 30.1% | 19.0% | 17.5% | 26.9% |
| EchoStar Corporation ($SATS) | 19.7% | 43.8% | 39.9% | 30.9% | 26.5% |
| Finisar Corporation ($FNSR) | 11.3% | 11.9% | 9.4% | 9.7% | 16.8% |
| |
|---|
| Median (65 companies) | 2.3% | 2.2% | 1.9% | 1.9% | 1.6% |
|---|
| BK Technologies, Inc. ($BKTI) | 2.3% | 3.7% | 2.8% | 1.6% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 33.9% | 40.8% | 43.1% | 46.9% | 47.9% |
| Ubiquiti Networks, Inc. ($UBNT) | 61.4% | 31.5% | 41.5% | 38.5% | 39.1% |
| Motorola Solutions, Inc. ($MSI) | -16.1% | 18.9% | 26.4% | 39.5% | 35.3% |
| Ituran Location and Control Ltd. ($ITRN) | 50.9% | 46.8% | 50.1% | 48.5% | 35.1% |
| Casa Systems, Inc. ($CASA) | | | 43.2% | 39.7% | 21.9% |
| |
|---|
| Median (70 companies) | 1.2% | 2.0% | 2.2% | 2.2% | 0.3% |
|---|
| BK Technologies, Inc. ($BKTI) | 9.1% | 5.0% | 13.9% | -16.4% | 8.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Extreme Networks, Inc. ($EXTR) | | | -2.2x | -1.5x | 7.1x |
| ViaSat, Inc. ($VSAT) | 3.4x | 2.5x | 3.2x | 2.5x | 5.8x |
| CommScope Holding Company, Inc. ($COMM) | 2.3x | 9.6x | 4.3x | 4.6x | 4.4x |
| Inseego Corp. ($INSG) | | | | | 3.9x |
| Finisar Corporation ($FNSR) | -0.3x | 0.2x | -0.5x | 1.6x | 3.8x |
| |
|---|
| Median (45 companies) | -0.7x | -0.6x | -0.8x | -0.7x | 0.2x |
|---|
| BK Technologies, Inc. ($BKTI) | -3.1x | -2.0x | -2.1x | | -3.4x |
