inTest Corporation reports 30.8% EBITDA growth in 2018 and 0.91 pp EBITDA Margin growth from 8.1% to 9.0%
03/07/2019 • About inTest Corporation (
$INTT) • By InTwits
inTest Corporation reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- inTest Corporation is a growth stock: 2018 revenue growth was 17.6%, 5 year revenue CAGR was 14.8% at 2018 ROIC 12.3%
- inTest Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $2m in 2018, $1m in 2017, $0m in 2016, $1m in 2015, $1m in 2014
- The company has highly profitable business model: ROIC is 12.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 17.6%. Revenue growth showed slowdown in 18Q4 - it was -4.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 10.9 pp from -15.1% to -4.2% in FY2018.
Gross Margin decreased slightly on 1.8 pp from 51.9% to 50.2% in 2018. SG&A as a % of Revenue decreased slightly on 1.1 pp from 29.6% to 28.5% in 2018. During the last 5 years SG&A as a % of Revenue topped in 2015 at 31.4% and was declining since that time.
Net Income margin increased on 2.4 pp from 1.5% to 3.9% in 2018.
Investments (CAPEX, working capital and M&A)
inTest Corporation's CAPEX/Revenue was 2.8% in 2018. The company showed small growth in CAPEX/Revenue of 1.3 pp from 1.5% in 2015 to 2.8% in 2018. Average CAPEX/Revenue for the last three years was 1.6%. During the last 5 years CAPEX as a % of Revenue bottomed in 2016 at 0.84% and was growing since that time.
Return on investment
The company operates at good ROIC (12.3%) while ROE is low (7.4%). ROIC increased on 3.1 pp from 9.1% to 12.3% in 2018. ROE increased on 4.9 pp from 2.5% to 7.4% in 2018.
Leverage (Debt)
The company has no debt. Cash surged on 34.4%.
Valuation and dividends
inTest Corporation's trades at EV/EBITDA 7.6x and P/E 23.6x.
Management team
inTest Corporation's CEO James Pelrin is a founder and has spent 1 year with the company. inTest Corporation's CFO is Hugh T Regan Jr. Hugh T Regan Jr has 19 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
inTest Corporation ($INTT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 41.796 | 38.889 | 40.227 | 66.801 | 78.563 | 17.6% |
| Gross Profit | 20.462 | 18.698 | 20.378 | 34.690 | 39.401 | 13.6% |
| SG&A | 11.966 | 12.201 | 12.572 | 19.802 | 22.412 | 13.2% |
| EBITDA | 5.795 | 3.316 | 4.745 | 5.390 | 7.051 | 30.8% |
| Net Income | 3.439 | 1.861 | 2.658 | 0.975 | 3.037 | 211.5% |
Balance Sheet
|
|---|
| Cash | 23.126 | 25.710 | 28.611 | 13.290 | 17.861 | 34.4% |
| 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 | 0.831 | 0.599 | 0.339 | 0.745 | 2.212 | 196.9% |
Ratios
|
|---|
| Revenue growth | 6.0% | -7.0% | 3.4% | 66.1% | 17.6% | |
| EBITDA growth | 20.5% | -42.8% | 43.1% | 13.6% | 30.8% | |
|
|---|
| Gross Margin | 49.0% | 48.1% | 50.7% | 51.9% | 50.2% | -1.8% |
| EBITDA Margin | 13.9% | 8.5% | 11.8% | 8.1% | 9.0% | 0.9% |
| SG&A, % of revenue | 28.6% | 31.4% | 31.3% | 29.6% | 28.5% | -1.1% |
| Net Income Margin | 8.2% | 4.8% | 6.6% | 1.5% | 3.9% | 2.4% |
| CAPEX, % of revenue | 2.0% | 1.5% | 0.8% | 1.1% | 2.8% | 1.7% |
|
|---|
| ROIC | 14.9% | 7.3% | 11.1% | 9.1% | 12.3% | 3.1% |
| ROE | 10.5% | 5.3% | 7.2% | 2.5% | 7.4% | 4.9% |
| Net Debt/EBITDA | -4.0x | -7.8x | -6.0x | -2.5x | -2.5x | -0.1x |
inTest Corporation ($INTT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 19 | 21 | 20 | 18 | | 33.1% | 32.8% | 16.2% | -4.9% |
| EBITDA | 1 | 5 | 1 | 0 | | -60.0% | 86.5% | -78.8% | |
| Net Income | 0 | 4 | -1 | -1 | | -81.7% | 177.8% | -128.0% | |
Balance Sheet
|
|---|
| Cash | 14 | 11 | 14 | 18 | | -47.4% | 41.0% | 23.5% | 34.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 49.8% | 51.7% | 50.1% | 48.8% | | -4.7% | -1.3% | -0.6% | -1.4% |
| EBITDA Margin | 7.0% | 23.5% | 3.7% | 0.2% | | -16.2% | 6.8% | -16.7% | 21.3% |
| Net Income Margin | 2.0% | 19.0% | -2.8% | -4.3% | | -12.6% | 9.9% | -14.4% | 19.3% |
Peers in Semiconductor Equipment
Below we provide inTest Corporation benchmarking against other companies in Semiconductor 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 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -0.5% | 7.8% | 24.2% | 14.0% |
|---|
| inTest Corporation ($INTT) | | -7.0% | 3.4% | 66.1% | 17.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.4% | 38.3% | 37.3% | 43.2% | 40.2% |
|---|
| inTest Corporation ($INTT) | 49.0% | 48.1% | 50.7% | 51.9% | 50.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 6.8% | 10.3% | 11.7% | 16.2% | 16.6% |
|---|
| inTest Corporation ($INTT) | 13.9% | 8.5% | 11.8% | 8.1% | 9.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.3% | 2.9% | 2.6% | 3.2% | 3.0% |
|---|
| inTest Corporation ($INTT) | 2.0% | 1.5% | 0.8% | 1.1% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.4% | 5.2% | 6.9% | 13.1% | 11.2% |
|---|
| inTest Corporation ($INTT) | 14.9% | 7.3% | 11.1% | 9.1% | 12.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (31 companies) | -1.2x | -1.0x | -1.2x | -0.7x | -1.0x |
|---|
| inTest Corporation ($INTT) | -4.0x | -7.8x | -6.0x | -2.5x | -2.5x |
