Electronic Systems Technology Inc revenue decreased on 2.1% while EBITDA Margin increased on 4.9 pp from -13.7% to -8.8%
03/01/2019 • About Electronic Systems Technology Inc (
$ELST) • By InTwits
Electronic Systems Technology Inc reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Electronic Systems Technology Inc is a company in decline: 2018 revenue growth was -2.1%, 5 years revenue CAGR was -8.6%
- The company operates at negative EBITDA Margin: -8.8%
- Electronic Systems Technology Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -12.6% for the sames years
- Electronic Systems Technology Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $0m in 2018, $0m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has unprofitable business model: ROIC is -6.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 2.1%. Revenue decline was slowing down on average by 3.8 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.9 pp from -13.7% to -8.8% in 2018.
Gross Margin decreased on 3.3 pp from 54.9% to 51.6% in 2018. SG&A as a % of Revenue showed almost no change in 2018.
Net Income margin jumped on 23.1 pp from -31.4% to -8.3% in 2018.
Return on investment
The company operates at negative ROIC (-6.7%) and ROE (-5.8%). ROIC increased on 2.7 pp from -9.3% to -6.7% in 2018. ROE jumped on 13.6 pp from -19.4% to -5.8% in 2018.
Leverage (Debt)
The company has no debt. Cash jumped on 655%.
Financial and operational results
FY ended 12/31/2018
Electronic Systems Technology Inc ($ELST) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1.867 | 1.551 | 1.490 | 1.425 | 1.395 | -2.1% |
| Gross Profit | 1.017 | 0.849 | 0.813 | 0.782 | 0.719 | -8.0% |
| SG&A | | 0.031 | 0.029 | 0.018 | 0.017 | -6.7% |
| EBITDA | -0.147 | -0.309 | -0.202 | -0.195 | -0.123 | |
| Net Income | -0.102 | -0.238 | -0.141 | -0.448 | -0.116 | |
Balance Sheet
|
|---|
| Cash | 0.045 | 0.245 | 0.116 | 0.043 | 0.324 | 654.9% |
| 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 | 0.078 | 0.014 | 0.000 | 0.000 | 0.000 | |
Ratios
|
|---|
| Revenue growth | -14.7% | -17.0% | -3.9% | -4.3% | -2.1% | |
| EBITDA growth | -229.1% | 111.0% | -34.7% | -3.4% | -36.9% | |
|
|---|
| Gross Margin | 54.4% | 54.7% | 54.5% | 54.9% | 51.6% | -3.3% |
| EBITDA Margin | -7.9% | -20.0% | -13.6% | -13.7% | -8.8% | 4.9% |
| SG&A, % of revenue | | 2.0% | 2.0% | 1.3% | 1.2% | -0.1% |
| Net Income Margin | -5.5% | -15.4% | -9.4% | -31.4% | -8.3% | 23.1% |
| CAPEX, % of revenue | 4.2% | 0.9% | 0.0% | 0.0% | 0.0% | |
|
|---|
| ROIC | -5.5% | -11.9% | -8.7% | -9.3% | -6.7% | 2.7% |
| ROE | -3.4% | -8.4% | -5.3% | -19.4% | -5.8% | 13.6% |
Peers in Communications Equipment
Below we provide Electronic Systems Technology Inc benchmarking against other companies in Communications Equipment 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 |
|---|
| 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. ($NTIP) | | 34.6% | 292.9% | -74.7% | 34.4% |
| |
|---|
| Median (66 companies) | | 0.7% | 7.6% | 5.6% | 3.5% |
|---|
| Electronic Systems Technology Inc ($ELST) | | -17.0% | -3.9% | -4.3% | -2.1% |
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. ($NTCT) | 78.7% | 79.2% | 65.6% | 70.2% | 72.4% |
| |
|---|
| Median (67 companies) | 41.4% | 41.3% | 43.7% | 41.0% | 40.5% |
|---|
| Electronic Systems Technology Inc ($ELST) | 54.4% | 54.7% | 54.5% | 54.9% | 51.6% |
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. ($ITRN) | 32.4% | 30.5% | 29.9% | 29.9% | 30.4% |
| |
|---|
| Median (65 companies) | 5.6% | 6.1% | 5.9% | 6.5% | 5.4% |
|---|
| Electronic Systems Technology Inc ($ELST) | -7.9% | -20.0% | -13.6% | -13.7% | -8.8% |
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 ($FNSR) | 11.3% | 11.9% | 9.4% | 9.7% | 16.8% |
| |
|---|
| Median (65 companies) | 2.2% | 2.3% | 2.0% | 1.9% | 1.7% |
|---|
| Electronic Systems Technology Inc ($ELST) | 4.2% | 0.9% | 0.0% | 0.0% | 0.0% |
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. ($CASA) | | | 43.2% | 39.7% | 21.9% |
| |
|---|
| Median (70 companies) | 2.1% | 2.3% | 2.4% | 2.2% | 0.7% |
|---|
| Electronic Systems Technology Inc ($ELST) | -5.5% | -11.9% | -8.7% | -9.3% | -6.7% |
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 (46 companies) | -0.7x | -0.7x | -0.9x | -0.7x | -0.1x |
|---|
