Qualstar Corporation reports 132% Net Income growth in 2018 and 14.9% Revenue growth
03/07/2019 • About Qualstar Corporation (
$QBAK) • By InTwits
Qualstar Corporation reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Qualstar Corporation 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 -9.6%
- Qualstar Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 0.6%.
- CAPEX is quite volatile: $0m in 2018, $0m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has highly profitable business model: ROIC is 22.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 14.9%. Revenue growth showed slowdown in 18Q4 - it was -8.5% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 28.0 pp from -25.3% to -53.3% in 2018. EBITDA Margin followed a growing trend at 14.5 pp per annum in 2014-2018.
Gross Margin increased slightly on 1.3 pp from 39.9% to 41.3% in 2018. SG&A as a % of Revenue decreased on 3.8 pp from 28.7% to 25.0% in 2018. SG&A as a % of Revenue followed a declining trend at -6.6 pp per annum in the last 5 years.
Net Income margin increased on 6.1 pp from 6.0% to 12.2% in 2018. Net Income margin stuck to a growing trend at 14.3 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
In 2018 Qualstar Corporation had CAPEX/Revenue of 0.21%. The company showed small CAPEX/Revenue decline of 1.5 pp from 1.7% in 2015 to 0.21% in 2018. It's average level of CAPEX/Revenue for the last three years was 0.37%. CAPEX as a % of Revenue stuck to a declining trend at -0.63 pp per annum in 2014-2018.
Return on investment
The company operates at high and attractive ROIC (22.3%) and ROE (22.5%). ROIC jumped on 10.2 pp from 12.1% to 22.3% in 2018. ROE surged on 10.6 pp from 11.9% to 22.5% in 2018. ROIC stuck to a growing trend at 16.9 pp per annum in the last 5 years. ROE grew at 16.6 pp per annum in 2014-2018.
Leverage (Debt)
The company has no debt. Cash increased slightly on 1.8%.
Valuation and dividends
The company's trades at EV/EBITDA 0.4x and P/E 3.7x.
Financial and operational results
FY ended 12/31/2018
Qualstar Corporation ($QBAK) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 10.941 | 12.902 | 9.417 | 10.641 | 12.229 | 14.9% |
| Gross Profit | 2.591 | 4.372 | 2.593 | 4.249 | 5.045 | 18.7% |
| SG&A | 5.980 | 4.555 | 2.816 | 3.057 | 3.053 | -0.1% |
| EBITDA | -5.667 | -1.069 | -1.031 | 0.811 | 1.576 | 94.3% |
| Net Income | -5.624 | -1.308 | -1.210 | 0.640 | 1.486 | 132.2% |
Balance Sheet
|
|---|
| Cash | 5.462 | 4.696 | 3.691 | 4.698 | 4.781 | 1.8% |
| 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 | 0.299 | 0.217 | 0.045 | 0.044 | 0.026 | -40.9% |
Ratios
|
|---|
| Revenue growth | -13.5% | 17.9% | -27.0% | 13.0% | 14.9% | |
| EBITDA growth | -25.1% | -81.1% | -3.6% | -178.7% | 94.3% | |
|
|---|
| Gross Margin | 23.7% | 33.9% | 27.5% | 39.9% | 41.3% | 1.3% |
| EBITDA Margin | -51.8% | -8.3% | -10.9% | 7.6% | 12.9% | 5.3% |
| SG&A, % of revenue | 54.7% | 35.3% | 29.9% | 28.7% | 25.0% | -3.8% |
| Net Income Margin | -51.4% | -10.1% | -12.8% | 6.0% | 12.2% | 6.1% |
| CAPEX, % of revenue | 2.7% | 1.7% | 0.5% | 0.4% | 0.2% | -0.2% |
|
|---|
| ROIC | -48.7% | -15.0% | -18.9% | 12.1% | 22.3% | 10.2% |
| ROE | -47.1% | -15.4% | -19.0% | 11.9% | 22.5% | 10.6% |
| Net Debt/EBITDA | | | | -5.8x | -3.0x | 2.8x |
Qualstar Corporation ($QBAK) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 3 | 3 | | 20.3% | 42.5% | 14.5% | -8.5% |
| EBITDA | 1 | 0 | 0 | 0 | | 507.8% | 406.1% | | -94.7% |
| Net Income | 1 | 0 | 0 | 0 | | 917.2% | 703.4% | | -97.5% |
Balance Sheet
|
|---|
| Cash | 5 | 6 | 5 | 5 | | 39.9% | 24.5% | 3.6% | 1.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 48.7% | 44.0% | 39.7% | 32.4% | | 12.2% | 4.4% | 1.3% | -11.8% |
| EBITDA Margin | 21.1% | 15.4% | 13.4% | 1.3% | | 16.9% | 11.0% | 17.4% | -21.4% |
| Net Income Margin | 20.1% | 14.7% | 12.8% | 0.6% | | 17.7% | 12.1% | 18.2% | -20.5% |
Peers in Technology Hardware, Storage &
Below you can find Qualstar Corporation benchmarking vs. other companies in Technology Hardware, Storage & 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 |
|---|
| Crossroads Systems Inc ($CRSS) | | -90.6% | -35.5% | -89.5% | 39,959.5% |
| Immersion Corporation ($IMMR) | | 19.8% | -9.9% | -38.7% | 217.0% |
| Veritec Inc ($VRTC) | | -42.2% | -28.0% | -52.2% | 53.1% |
| Boxlight Corporation ($BOXL) | | -88.5% | 503.2% | 26.4% | 47.0% |
| Pure Storage, Inc. ($PSTG) | | 308.2% | 152.4% | 67.9% | 38.6% |
| |
|---|
| Median (30 companies) | -16.9% | -3.3% | -4.3% | 1.5% | 4.3% |
|---|
| Qualstar Corporation ($QBAK) | | 17.9% | -27.0% | 13.0% | 14.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 99.1% | 99.3% | 99.7% | 99.4% | 99.8% |
| Pure Storage, Inc. ($PSTG) | 43.5% | 55.5% | 61.9% | 65.9% | 65.5% |
| NetApp, Inc. ($NTAP) | 62.0% | 62.6% | 60.8% | 61.3% | 62.7% |
| Avid Technology, Inc. ($AVID) | 61.4% | 60.9% | 65.0% | 57.8% | 57.9% |
| Datasea Inc ($DTSS) | | | | 39.3% | 54.4% |
| |
|---|
| Median (29 companies) | 38.6% | 36.3% | 39.3% | 38.9% | 38.3% |
|---|
| Qualstar Corporation ($QBAK) | 23.7% | 33.9% | 27.5% | 39.9% | 41.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 12.3% | 9.0% | -25.1% | -127.0% | 48.6% |
| Apple Inc. ($AAPL) | 33.1% | 35.3% | 32.7% | 31.2% | 30.8% |
| Western Digital Corporation ($WDC) | 20.1% | 18.7% | 12.5% | 21.4% | 27.5% |
| NetApp, Inc. ($NTAP) | 16.9% | 16.7% | 11.3% | 15.4% | 22.9% |
| Seagate Technology PLC ($STX) | 19.3% | 21.1% | 11.3% | 16.7% | 20.0% |
| |
|---|
| Median (29 companies) | 8.6% | 7.4% | 4.9% | 3.5% | 7.9% |
|---|
| Qualstar Corporation ($QBAK) | -51.8% | -8.3% | -10.9% | 7.6% | 12.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hewlett Packard Enterprise Company ($HPE) | 6.6% | 6.4% | 10.8% | 10.9% | 9.6% |
| Pure Storage, Inc. ($PSTG) | 28.7% | 24.2% | 8.9% | 10.4% | 6.3% |
| 3D Systems Corporation ($DDD) | 3.5% | 3.4% | 2.6% | 4.8% | 5.9% |
| Apple Inc. ($AAPL) | 5.2% | 4.8% | 5.9% | 5.4% | 5.0% |
| Western Digital Corporation ($WDC) | 4.2% | 4.2% | 4.5% | 3.0% | 4.0% |
| |
|---|
| Median (29 companies) | 2.6% | 3.0% | 2.0% | 1.9% | 2.4% |
|---|
| Qualstar Corporation ($QBAK) | 2.7% | 1.7% | 0.5% | 0.4% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Avid Technology, Inc. ($AVID) | | | | | 252.4% |
| Ionix Technology Inc ($IINX) | | | | 23.9% | 204.5% |
| Immersion Corporation ($IMMR) | 7.6% | 5.8% | -21.5% | -138.9% | 96.8% |
| HP Inc. ($HPQ) | 8.0% | 8.7% | 15.8% | 60.8% | 72.9% |
| NetApp, Inc. ($NTAP) | 12.5% | 14.8% | 7.3% | 14.0% | 28.1% |
| |
|---|
| Median (37 companies) | 6.0% | 5.7% | 1.8% | 0.2% | 2.2% |
|---|
| Qualstar Corporation ($QBAK) | -48.7% | -15.0% | -18.9% | 12.1% | 22.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CPI Card Group Inc. ($PMTS) | 3.4x | 3.5x | 5.8x | | 12.4x |
| NCR Corporation ($NCR) | 4.9x | 6.6x | 2.7x | 2.3x | 5.2x |
| Avid Technology, Inc. ($AVID) | -0.7x | 3.1x | 1.7x | 5.6x | 4.8x |
| Xerox Corporation ($XRX) | 3.5x | 3.5x | 3.1x | 3.0x | 3.0x |
| Electronics for Imaging, Inc. ($EFII) | -0.2x | 1.4x | 1.3x | 1.6x | 1.7x |
| |
|---|
| Median (19 companies) | -0.2x | 0.5x | 0.2x | 0.5x | 1.1x |
|---|
| Qualstar Corporation ($QBAK) | | | | -5.8x | -3.0x |
