Wireless Telecom Group, Inc. revenue surged on 14.6% and EBITDA Margin increased on 8.4 pp from -2.5% to 6.0%
03/12/2019 • About Wireless Telecom Group, Inc. (
$WTT) • By InTwits
Wireless Telecom Group, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 6.0% in 2018, -2.5% in 2017, -6.5% in 2016, 3.6% in 2015, 12.5% in 2014
- Wireless Telecom Group, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 8.7%
- CAPEX is quite volatile: $1m in 2018, $1m in 2017, $1m in 2016, $0m in 2015, $0m in 2014
- The company has potentially unprofitable business model: ROIC is 2.2%
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 14.6%. Revenue growth showed slowdown in 18Q4 - it was 0.5% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 11.4 pp from -2.3% to 9.1% in 2018. During the last 5 years EBITDA Margin bottomed in 2016 at -6.5% and was growing since that time.
Gross Margin increased on 4.0 pp from 41.8% to 45.8% in 2018. During 2014-2018 Gross Margin bottomed in 2017 at 41.8%. SG&A as a % of Revenue decreased on 5.3 pp from 39.2% to 33.9% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2017 at 39.2%.
Net Income margin increased on 9.8 pp from -9.8% to 0.066% in 2018. During 2014-2018 Net Income margin bottomed in 2017 at -9.8%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.6% in 2018. CAPEX/Revenue showed almost no change from 2015 to 2018. It's average level of CAPEX/Revenue for the last three years was 2.1%. During the last 5 years CAPEX as a % of Revenue topped in 2016 at 2.6% and was declining since that time.
Return on investment
The company operates at low ROIC (2.2%) and ROE (0.1%). ROIC surged on 10.8 pp from -8.6% to 2.2% in 2018. ROE surged on 13.6 pp from -13.5% to 0.10% in 2018. During 2014-2018 ROIC bottomed in 2017 at -8.6%. During 2014-2018 ROE bottomed in 2017 at -13.5%.
Leverage (Debt)
Debt level is -0.9x Net Debt / EBITDA and 0.6x Debt / EBITDA. Debt surged on 10.2% while cash jumped on 104%.
Wireless Telecom Group, Inc. has no short term refinancing risk: cash is higher than short term debt (248.8%).
Valuation and dividends
The company's trades at EV/EBITDA 9.3x and P/E 924.0x.
Management team
Wireless Telecom Group, Inc.'s CEO Timothy Whelan "Tim" is a founder and has spent 3 years with the company. Wireless Telecom Group, Inc.'s CFO Michael Kandell has spent 2 years with the company.
Financial and operational results
FY ended 12/31/2018
Wireless Telecom Group, Inc. ($WTT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 40.337 | 33.109 | 31.327 | 46.078 | 52.788 | 14.6% |
| Gross Profit | 19.044 | 14.828 | 13.162 | 19.261 | 24.167 | 25.5% |
| SG&A | 10.985 | 10.124 | 11.664 | 18.064 | 17.901 | -0.9% |
| EBITDA | 5.049 | 1.206 | -2.045 | -1.130 | 3.162 | |
| Net Income | 2.424 | 0.377 | -1.832 | -4.493 | 0.035 | |
Balance Sheet
|
|---|
| Cash | 10.724 | 9.726 | 9.351 | 2.458 | 5.015 | 104.0% |
| Short Term Debt | 0.134 | 0.074 | 0.000 | 1.335 | 2.016 | 51.0% |
| Long Term Debt | 0.032 | 0.000 | 0.000 | 0.494 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 0.301 | 0.463 | 0.819 | 0.927 | 0.853 | -8.0% |
Ratios
|
|---|
| Revenue growth | 19.3% | -17.9% | -5.4% | 47.1% | 14.6% | |
| EBITDA growth | 98.8% | -76.1% | -269.6% | -44.7% | -379.8% | |
|
|---|
| Gross Margin | 47.2% | 44.8% | 42.0% | 41.8% | 45.8% | 4.0% |
| EBITDA Margin | 12.5% | 3.6% | -6.5% | -2.5% | 6.0% | 8.4% |
| SG&A, % of revenue | 27.2% | 30.6% | 37.2% | 39.2% | 33.9% | -5.3% |
| Net Income Margin | 6.0% | 1.1% | -5.8% | -9.8% | 0.1% | 9.8% |
| CAPEX, % of revenue | 0.7% | 1.4% | 2.6% | 2.0% | 1.6% | -0.4% |
|
|---|
| ROIC | 12.6% | 2.2% | -7.9% | -8.6% | 2.2% | 10.8% |
| ROE | 6.6% | 1.1% | -5.7% | -13.5% | 0.1% | 13.6% |
| Net Debt/EBITDA | -2.1x | -8.0x | | | -0.9x |
Wireless Telecom Group, Inc. ($WTT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 13 | 13 | 14 | 12 | | 38.9% | 12.4% | 11.6% | 0.5% |
| EBITDA | 1 | 1 | 2 | -0 | | | | 35.6% | -128.0% |
| Net Income | 0 | -0 | 1 | -1 | | | | -14.6% | |
Balance Sheet
|
|---|
| Cash | 2 | 3 | 4 | 5 | | 3.0% | -6.4% | 66.5% | 104.0% |
| Short Term Debt | 3 | 3 | 3 | 2 | | 33.6% | 54.3% | 89.6% | 51.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | | -25.0% | -26.7% | -28.6% | -100.0% |
Ratios
|
|---|
| Gross Margin | 47.3% | 46.0% | 46.1% | 43.5% | | 1.9% | 18.0% | -2.6% | -1.9% |
| EBITDA Margin | 8.6% | 4.8% | 10.8% | -1.6% | | 22.3% | 18.4% | 1.9% | -7.2% |
| Net Income Margin | 2.8% | -1.3% | 4.0% | -5.9% | | 15.7% | 10.1% | -1.2% | 15.2% |
Peers in Electronic Equipment & Instrum
Below you can find Wireless Telecom Group, Inc. benchmarking vs. other companies in Electronic Equipment & Instrum 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 |
|---|
| Hickok Inc ($HICKA) | | -7.2% | 13.5% | 258.4% | 178.7% |
| Electro Scientific Industries, Inc. ($ESIO) | | -12.2% | 15.9% | -12.7% | 128.5% |
| Microvision, Inc. ($MVIS) | | 163.6% | 60.7% | -34.7% | 82.8% |
| Ipsidy Inc ($IDTY) | | | | | 66.2% |
| Magal Security Systems Ltd. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (61 companies) | -78.5% | 4.5% | 1.2% | 3.6% | 9.1% |
|---|
| Wireless Telecom Group, Inc. ($WTT) | | -17.9% | -5.4% | 47.1% | 14.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intellicheck, Inc. ($IDN) | 58.2% | 57.1% | 80.0% | 85.5% | 91.3% |
| Image Sensing Systems, Inc. ($ISNS) | 74.7% | 77.1% | 71.0% | 79.9% | 80.9% |
| National Instruments Corporation ($NATI) | 74.4% | 74.1% | 74.5% | 74.5% | 75.4% |
| Cognex Corporation ($CGNX) | 77.9% | 77.2% | 75.2% | 75.6% | 74.4% |
| Applied DNA Sciences Inc ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (60 companies) | 41.7% | 41.8% | 40.1% | 41.5% | 40.9% |
|---|
| Wireless Telecom Group, Inc. ($WTT) | 47.2% | 44.8% | 42.0% | 41.8% | 45.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cognex Corporation ($CGNX) | 32.9% | 30.1% | 31.9% | 36.0% | 30.1% |
| Coherent, Inc. ($COHR) | 14.2% | 16.7% | 18.9% | 24.9% | 26.6% |
| Hollysys Automation Technologies, Ltd. ($HOLI) | 21.3% | 26.9% | 23.5% | 16.1% | 23.9% |
| Electro Scientific Industries, Inc. ($ESIO) | -10.1% | -19.1% | -2.0% | -17.8% | 23.1% |
| FLIR Systems, Inc. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (60 companies) | 5.3% | 5.2% | 3.4% | 5.1% | 3.3% |
|---|
| Wireless Telecom Group, Inc. ($WTT) | 12.5% | 3.6% | -6.5% | -2.5% | 6.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Wrap Technologies Inc ($WRTC) | | | | | 61.4% |
| ClearSign Combustion Corporation ($CLIR) | | 80.3% | 22.1% | 17.4% | 17.7% |
| LightPath Technologies, Inc. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (60 companies) | 1.9% | 2.0% | 2.1% | 1.6% | 2.3% |
|---|
| Wireless Telecom Group, Inc. ($WTT) | 0.7% | 1.4% | 2.6% | 2.0% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evans & Sutherland Computer Corp ($ESCC) | | | 83.3% | 39.6% | 55.3% |
| Electro Scientific Industries, Inc. ($ESIO) | -11.7% | -19.7% | -7.1% | -22.9% | 31.5% |
| Coherent, Inc. ($COHR) | 9.9% | 13.1% | 15.6% | 24.0% | 21.5% |
| Zebra Technologies Corporation ($ZBRA) | 3.3% | 0.9% | 2.2% | 10.2% | 20.8% |
| Cognex Corporation ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (72 companies) | 3.3% | 1.9% | 2.2% | 3.3% | 0.9% |
|---|
| Wireless Telecom Group, Inc. ($WTT) | 12.6% | 2.2% | -7.9% | -8.6% | 2.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Itron, Inc. ($ITRI) | 2.1x | 1.9x | 1.0x | 2.0x | 12.3x |
| Track Group Inc ($TRCK) | | | | | 12.2x |
| Mesa Laboratories, Inc. ($MLAB) | 0.7x | 1.1x | 1.7x | 2.0x | 3.5x |
| Trimble Inc. ($TRMB) | 1.3x | 1.7x | 1.1x | 1.3x | 3.4x |
| MTS Systems Corporation ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| |
|---|
| Median (35 companies) | -0.7x | -0.7x | -0.8x | -0.7x | -0.8x |
|---|
| Wireless Telecom Group, Inc. ($WTT) | -2.1x | -8.0x | | | -0.9x |
