On Track Innovations Ltd revenue increased on 4.8% and EBITDA Margin increased slightly on 1.9 pp from -4.8% to -2.9%
03/13/2019 • About On Track Innovations Ltd (
$OTIV) • By InTwits
On Track Innovations Ltd reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -2.9%
- On Track Innovations Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -13.9% for the sames years
- On Track Innovations Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 5.2%
- CAPEX is quite volatile: $1m in 2018, $0m in 2017, $0m in 2016, $2m in 2015, $2m in 2014
- The company has unprofitable business model: ROIC is -12.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 4.8%. Revenue growth showed slowdown in 18Q4 - it was -28.4% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.9 pp from -4.8% to -2.9% in 2018.
Gross Margin increased slightly on 1.1 pp from 49.9% to 51.0% in 2018. SG&A as a % of Revenue increased slightly on 0.97 pp from 44.3% to 45.3% in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2016 at 44.0% and was growing since that time.
Net Income margin increased slightly on 1.7 pp from -2.9% to -1.2% in 2018. Net Income margin grew at 12.0 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In 2018 On Track Innovations Ltd had CAPEX/Revenue of 2.9%. On Track Innovations Ltd's CAPEX/Revenue decreased on 5.3 pp from 8.2% in 2015 to 2.9% in 2018. For the last three years the average CAPEX/Revenue was 1.9%.
Return on investment
The company operates at negative ROIC (-12.3%) and ROE (-2.1%). ROIC decreased slightly on 0.57 pp from -11.7% to -12.3% in 2018. ROE increased on 2.7 pp from -4.9% to -2.1% in 2018. During the last 5 years ROIC topped in 2016 at -9.7% and was declining since that time. ROE followed a growing trend at 13.3 pp per annum in 2014-2018.
Leverage (Debt)
Debt level is -1.8x Net Debt / EBITDA and Debt / EBITDA. Debt dropped on 94.0% while cash dropped on 28.4%.
On Track Innovations Ltd has no short term refinancing risk: cash is higher than short term debt (1,856.5%).
Financial and operational results
FY ended 12/31/2018
On Track Innovations Ltd ($OTIV) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 23.062 | 18.472 | 20.564 | 20.873 | 21.878 | 4.8% |
| Gross Profit | 11.056 | 9.258 | 10.203 | 10.417 | 11.168 | 7.2% |
| SG&A | 14.372 | 10.865 | 9.045 | 9.253 | 9.911 | 7.1% |
| EBITDA | -6.660 | -5.563 | -0.719 | -1.010 | -0.633 | |
| Net Income | -9.924 | -7.151 | -0.828 | -0.598 | -0.263 | |
Balance Sheet
|
|---|
| Cash | 5.351 | 5.450 | 5.952 | 6.742 | 4.827 | -28.4% |
| Short Term Debt | 3.617 | 3.815 | 4.369 | 4.181 | 0.260 | -93.8% |
| Long Term Debt | 2.161 | 2.359 | 1.215 | 0.814 | 0.039 | -95.2% |
Cash flow
|
|---|
| Capex | 1.573 | 1.515 | 0.311 | 0.293 | 0.636 | 117.1% |
Ratios
|
|---|
| Revenue growth | 16.1% | -19.9% | 11.3% | 1.5% | 4.8% | |
| EBITDA growth | 76.1% | -16.5% | -87.1% | 40.5% | -37.3% | |
|
|---|
| Gross Margin | 47.9% | 50.1% | 49.6% | 49.9% | 51.0% | 1.1% |
| EBITDA Margin | -28.9% | -30.1% | -3.5% | -4.8% | -2.9% | 1.9% |
| SG&A, % of revenue | 62.3% | 58.8% | 44.0% | 44.3% | 45.3% | 1.0% |
| Net Income Margin | -43.0% | -38.7% | -4.0% | -2.9% | -1.2% | 1.7% |
| CAPEX, % of revenue | 6.8% | 8.2% | 1.5% | 1.4% | 2.9% | 1.5% |
|
|---|
| ROIC | -30.1% | -29.1% | -9.7% | -11.7% | -12.3% | -0.6% |
| ROE | -50.5% | -40.8% | -6.2% | -4.9% | -2.1% | 2.7% |
On Track Innovations Ltd ($OTIV) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 6 | 6 | 6 | 5 | | 37.1% | -11.4% | 38.6% | -28.4% |
| EBITDA | -0 | 0 | 0 | -0 | | | -59.5% | | |
| Net Income | -0 | -0 | -0 | 1 | | | -401.1% | -121.2% | |
Balance Sheet
|
|---|
| Cash | 8 | 7 | 5 | 5 | | 21.3% | 5.6% | -24.8% | -28.4% |
| Short Term Debt | 4 | 4 | 1 | 0 | | -5.3% | -14.8% | -88.5% | -93.8% |
| Long Term Debt | 1 | 0 | 0 | 0 | | -38.8% | -54.2% | -99.1% | -95.2% |
Ratios
|
|---|
| Gross Margin | 52.2% | 51.7% | 52.9% | 47.9% | | -3.0% | 1.7% | -0.2% | 1.5% |
| EBITDA Margin | -2.8% | 3.0% | 3.9% | -9.9% | | 7.1% | -3.5% | 6.9% | -5.5% |
| Net Income Margin | -6.0% | -4.5% | -2.8% | 11.8% | | 15.5% | -5.9% | -21.4% | 22.7% |
Peers in Technology Hardware, Storage &
Below you can find On Track Innovations Ltd 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. ($PSTG) | | 308.2% | 152.4% | 67.9% | 38.6% |
| |
|---|
| Median (30 companies) | -16.9% | -3.2% | -5.0% | 2.1% | 5.1% |
|---|
| On Track Innovations Ltd ($OTIV) | | -19.9% | 11.3% | 1.5% | 4.8% |
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 ($DTSS) | | | | 39.3% | 54.4% |
| |
|---|
| Median (29 companies) | 35.6% | 35.0% | 38.5% | 38.9% | 38.3% |
|---|
| On Track Innovations Ltd ($OTIV) | 47.9% | 50.1% | 49.6% | 49.9% | 51.0% |
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 ($STX) | 19.3% | 21.1% | 11.3% | 16.7% | 20.0% |
| |
|---|
| Median (29 companies) | 8.6% | 7.4% | 4.9% | 4.5% | 7.9% |
|---|
| On Track Innovations Ltd ($OTIV) | -28.9% | -30.1% | -3.5% | -4.8% | -2.9% |
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 ($WDC) | 4.2% | 4.2% | 4.5% | 3.0% | 4.0% |
| |
|---|
| Median (29 companies) | 2.6% | 2.9% | 2.0% | 1.9% | 2.2% |
|---|
| On Track Innovations Ltd ($OTIV) | 6.8% | 8.2% | 1.5% | 1.4% | 2.9% |
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. ($NTAP) | 12.5% | 14.8% | 7.3% | 14.0% | 28.1% |
| |
|---|
| Median (37 companies) | 6.0% | 5.7% | 1.8% | 1.6% | 3.6% |
|---|
| On Track Innovations Ltd ($OTIV) | -30.1% | -29.1% | -9.7% | -11.7% | -12.3% |
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 (20 companies) | -0.2x | 0.5x | 0.2x | 0.3x | 0.6x |
|---|
