CPS Technologies Corp. reports 48.0% revenue growth in FY2018 and 8.0 pp EBITDA Margin growth from -9.5% to -1.5%
03/05/2019 • About CPS Technologies Corp. (
$CPSH) • By InTwits
CPS Technologies Corp. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -1.5%
- CPS Technologies Corp. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's a lot of higher than industry average of 30.9%.
- CAPEX is quite volatile: $0m in 2018, $0m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has unprofitable business model: ROIC is -11.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
CPS Technologies Corp.'s Revenue surged on 48.0%. Revenue growth showed acceleration in FY18Q4 - it increased 60.2% YoY. During FY2014-FY2018 Revenue growth bottomed in FY2016 at -29.5% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.4 pp from -33.6% to -44.9% in 2018. During FY2014-FY2018 EBITDA Margin bottomed in FY2017 at -9.5%.
Gross Margin increased on 2.1 pp from 11.4% to 13.5% in FY2018. Gross Margin declined at -3.0 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased on 7.1 pp from 24.8% to 17.7% in FY2018.
Net Income margin decreased on 5.4 pp from -11.8% to -17.2% in FY2018. Net Income margin stuck to a declining trend at -5.7 pp per annum in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.6%. CAPEX/Revenue decreased slightly on 0.56 pp from 2.2% in FY2015 to 1.6% in FY2018. It's average level of CAPEX/Revenue for the last three years was 2.6%. During the last 5 years CAPEX as a % of Revenue topped in FY2016 at 4.2% and was declining since that time.
Return on investment
The company operates at negative ROIC (-11.9%) and ROE (-48.9%). ROIC increased on 7.6 pp from -19.4% to -11.9% in FY2018. ROE dropped on 31.8 pp from -17.1% to -48.9% in FY2018. ROIC stuck to a declining trend at -7.4 pp per annum in FY2014-FY2018. ROE declined at -14.0 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash dropped on 53.1%.
Management team
The company's CEO is Grant C Bennett. Grant C Bennett is a founder and has 26 years tenure with the company.
Financial and operational results
FY ended 12/29/2018
CPS Technologies Corp. ($CPSH) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 23.138 | 21.762 | 15.351 | 14.577 | 21.581 | 48.0% |
| Gross Profit | 5.471 | 4.665 | 2.156 | 1.658 | 2.913 | 75.7% |
| SG&A | 4.099 | 4.046 | | 3.609 | 3.813 | 5.7% |
| EBITDA | 1.793 | 1.165 | -0.630 | -1.384 | -0.332 | |
| Net Income | 1.003 | 0.451 | -0.454 | -1.718 | -3.706 | |
Balance Sheet
|
|---|
| Cash | 2.306 | 3.413 | 3.408 | 1.340 | 0.629 | -53.1% |
| 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 | 0.502 | 0.477 | 0.646 | 0.274 | 0.351 | 28.2% |
Ratios
|
|---|
| Revenue growth | 8.1% | -5.9% | -29.5% | -5.0% | 48.0% | |
| EBITDA growth | -13.6% | -35.0% | -154.1% | 119.6% | -76.0% | |
|
|---|
| Gross Margin | 23.6% | 21.4% | 14.0% | 11.4% | 13.5% | 2.1% |
| EBITDA Margin | 7.7% | 5.4% | -4.1% | -9.5% | -1.5% | 8.0% |
| SG&A, % of revenue | 17.7% | 18.6% | | 24.8% | 17.7% | -7.1% |
| Net Income Margin | 4.3% | 2.1% | -3.0% | -11.8% | -17.2% | -5.4% |
| CAPEX, % of revenue | 2.2% | 2.2% | 4.2% | 1.9% | 1.6% | -0.3% |
|
|---|
| ROIC | 12.7% | 5.8% | -10.8% | -19.4% | -11.9% | 7.6% |
| ROE | 10.5% | 4.2% | -4.2% | -17.1% | -48.9% | -31.8% |
| Net Debt/EBITDA | -1.3x | -2.9x | | | |
CPS Technologies Corp. ($CPSH) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 4 | 5 | 6 | 6 | | 46.0% | 40.4% | 45.2% | 60.2% |
| EBITDA | -1 | -0 | 0 | 0 | | | | -24.3% | |
| Net Income | -1 | -0 | -0 | -3 | | | | -205.5% | |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 1 | | -95.5% | -78.5% | -94.8% | -53.1% |
| Short Term Debt | 0 | 1 | 1 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 3.5% | 11.6% | 15.8% | 19.7% | | 6.3% | 0.5% | -2.3% | 4.9% |
| EBITDA Margin | -15.0% | -3.5% | 1.8% | 6.0% | | 17.1% | 6.5% | -1.6% | 12.4% |
| Net Income Margin | -13.8% | -4.9% | -0.2% | -47.0% | | 7.4% | 4.0% | -0.5% | -26.1% |
Peers in Electronic Components
Below we provide CPS Technologies Corp. benchmarking against other companies in Electronic Components 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 |
|---|
| Superconductor Technologies Inc. ($SCON) | | -61.4% | -46.3% | 240.5% | 248.9% |
| Akoustis Technologies, Inc. ($AKTS) | | | | | 148.3% |
| Littelfuse, Inc. ($LFUS) | | 1.9% | 21.7% | 15.7% | 40.7% |
| Cavitation Technologies Inc ($CVAT) | | -73.6% | 267.5% | -40.9% | 22.6% |
| Airgain, Inc. ($AIRG) | | 9.0% | 56.3% | 14.0% | 22.4% |
| |
|---|
| Median (22 companies) | | 0.0% | 2.1% | 8.3% | 14.1% |
|---|
| CPS Technologies Corp. ($CPSH) | | -5.9% | -29.5% | -5.0% | 48.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cavitation Technologies Inc ($CVAT) | 93.5% | 85.0% | 93.2% | 93.5% | 90.6% |
| Dolby Laboratories ($DLB) | 92.7% | 90.2% | 89.4% | 89.1% | 87.9% |
| Flexpoint Sensor Systems Inc ($FLXT) | 96.7% | 95.2% | 92.7% | 87.9% | 86.1% |
| Airgain, Inc. ($AIRG) | 44.6% | 41.9% | 44.4% | 47.1% | 43.7% |
| II-VI Incorporated ($IIVI) | 33.2% | 36.6% | 37.8% | 40.0% | 39.8% |
| |
|---|
| Median (22 companies) | 33.2% | 36.7% | 33.7% | 38.3% | 37.6% |
|---|
| CPS Technologies Corp. ($CPSH) | 23.6% | 21.4% | 14.0% | 11.4% | 13.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Corning Incorporated ($GLW) | 32.2% | 27.5% | 27.9% | 27.3% | 25.4% |
| Dolby Laboratories ($DLB) | 34.1% | 29.1% | 30.9% | 30.8% | 25.1% |
| Amphenol Corporation ($APH) | 22.5% | 22.9% | 22.6% | 23.6% | 24.2% |
| Vishay Intertechnology, Inc. ($VSH) | 14.8% | 11.9% | 15.4% | 18.7% | 21.3% |
| IEH Corp ($IEHC) | 18.4% | 21.2% | 18.0% | 16.3% | 20.2% |
| |
|---|
| Median (22 companies) | 9.4% | 12.2% | 14.1% | 11.4% | 12.7% |
|---|
| CPS Technologies Corp. ($CPSH) | 7.7% | 5.4% | -4.1% | -9.5% | -1.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akoustis Technologies, Inc. ($AKTS) | | | | 334.0% | 574.7% |
| CBAK Energy Technology, Inc. ($CBAK) | 8.0% | 92.4% | 57.2% | 20.6% | 30.1% |
| Corning Incorporated ($GLW) | 11.1% | 13.7% | 12.0% | 17.8% | 19.9% |
| II-VI Incorporated ($IIVI) | 4.3% | 7.1% | 7.0% | 14.3% | 13.2% |
| Superconductor Technologies Inc. ($SCON) | 586.1% | 57.8% | 0.0% | 34.1% | 12.1% |
| |
|---|
| Median (22 companies) | 4.2% | 3.1% | 3.0% | 5.1% | 4.1% |
|---|
| CPS Technologies Corp. ($CPSH) | 2.2% | 2.2% | 4.2% | 1.9% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vishay Intertechnology, Inc. ($VSH) | 8.3% | 4.5% | 9.8% | 18.4% | 27.8% |
| IEH Corp ($IEHC) | 27.7% | 28.2% | 24.2% | 19.2% | 26.1% |
| Amphenol Corporation ($APH) | 19.1% | 18.5% | 18.3% | 19.2% | 21.1% |
| Inrad Optics Inc ($INRD) | -26.7% | -5.2% | -9.2% | -10.4% | 17.7% |
| Littelfuse, Inc. ($LFUS) | 14.3% | 11.1% | 11.7% | 15.8% | 12.1% |
| |
|---|
| Median (22 companies) | 6.8% | 6.1% | 6.4% | 7.0% | 8.4% |
|---|
| CPS Technologies Corp. ($CPSH) | 12.7% | 5.8% | -10.8% | -19.4% | -11.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Belden Inc ($BDC) | 3.9x | 5.2x | 2.1x | 2.6x | 2.3x |
| Inrad Optics Inc ($INRD) | | 9.9x | | | 1.4x |
| Corning Incorporated ($GLW) | -0.7x | -0.0x | -0.5x | 0.3x | 1.3x |
| Bel Fuse Inc. ($BELFA) | 4.6x | 2.0x | | 1.4x | 1.3x |
| Amphenol Corporation ($APH) | 1.4x | 0.8x | 1.4x | 1.1x | 1.2x |
| |
|---|
| Median (15 companies) | -0.6x | -0.1x | -0.5x | -0.3x | 0.6x |
|---|
