CUI Global, Inc. reports 16.2% revenue growth in 2018 and 0.93 pp EBITDA Margin decline from -13.3% to -14.2%
03/18/2019 • About CUI Global, Inc. (
$CUI) • By InTwits
CUI Global, Inc. 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: -14.2%
- CUI Global, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -6.9% for the sames years
- CUI Global, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $1m in 2018, $1m in 2017, $1m in 2016, $5m in 2015, $1m in 2014
- The company has unprofitable business model: ROIC is -29.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
CUI Global, Inc.'s Revenue surged on 16.2%. Revenue growth showed acceleration in 18Q4 - it increased 27.5% YoY. During the last 5 years Revenue growth bottomed in 2017 at -3.7%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.93 pp from -13.3% to -14.2% in 2018. EBITDA Margin stuck to a declining trend at -4.3 pp per annum in the last 5 years.
Gross Margin decreased on 3.6 pp from 33.5% to 29.9% in 2018. Gross Margin declined at -1.9 pp per annum in 2014-2018. SG&A as a % of Revenue decreased on 3.2 pp from 40.7% to 37.5% in 2018. During the last 5 years SG&A as a % of Revenue topped in 2017 at 40.7%.
Net Income margin decreased on 2.8 pp from -15.1% to -17.9% in 2018. Net Income margin declined at -3.7 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
CUI Global, Inc.'s CAPEX/Revenue was 1.1% in 2018. The company's CAPEX/Revenue decreased on 4.8 pp from 5.8% in 2015 to 1.1% in 2018. It's average CAPEX/Revenue for the last three years was 1.0%.
Return on investment
The company operates at negative ROIC (-29.4%) and ROE (-35.0%). ROIC decreased on 6.9 pp from -22.5% to -29.4% in 2018. ROE dropped on 11.3 pp from -23.7% to -35.0% in 2018. ROIC stuck to a declining trend at -6.6 pp per annum in 2014-2018. ROE declined at -7.6 pp per annum in 2014-2018.
Leverage (Debt)
Debt level is -0.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2018. Debt dropped on 27.5% while cash dropped on 68.5%.
CUI Global, Inc. has no short term refinancing risk: cash is higher than short term debt (406.4%).
Management team
CUI Global, Inc.'s CEO William J Clough is a founder and has spent 11 years with the company. Daniel N Ford is a CUI Global, Inc.'s CFO. Daniel N Ford has spent 8 years at the company.
Financial and operational results
FY ended 12/31/2018
CUI Global, Inc. ($CUI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 76.045 | 86.240 | 86.461 | 83.275 | 96.789 | 16.2% |
| Gross Profit | 28.551 | 32.292 | 32.261 | 27.869 | 28.910 | 3.7% |
| SG&A | 26.062 | 33.023 | 34.239 | 33.921 | 36.341 | 7.1% |
| EBITDA | 1.546 | -2.485 | -3.662 | -11.079 | -13.773 | |
| Net Income | -2.801 | -5.987 | -7.266 | -12.589 | -17.325 | |
Balance Sheet
|
|---|
| Cash | 11.704 | 7.267 | 4.617 | 12.646 | 3.979 | -68.5% |
| Short Term Debt | 0.114 | 0.126 | 0.117 | 0.098 | 0.979 | 899.0% |
| Long Term Debt | 8.901 | 8.772 | 8.666 | 8.569 | 5.304 | -38.1% |
Cash flow
|
|---|
| Capex | 1.004 | 5.045 | 0.824 | 0.893 | 1.042 | 16.7% |
Ratios
|
|---|
| Revenue growth | 25.4% | 13.4% | 0.3% | -3.7% | 16.2% | |
| EBITDA growth | -51.1% | -260.8% | 47.4% | 202.5% | 24.3% | |
|
|---|
| Gross Margin | 37.5% | 37.4% | 37.3% | 33.5% | 29.9% | -3.6% |
| EBITDA Margin | 2.0% | -2.9% | -4.2% | -13.3% | -14.2% | -0.9% |
| SG&A, % of revenue | 34.3% | 38.3% | 39.6% | 40.7% | 37.5% | -3.2% |
| Net Income Margin | -3.7% | -6.9% | -8.4% | -15.1% | -17.9% | -2.8% |
| CAPEX, % of revenue | 1.3% | 5.8% | 1.0% | 1.1% | 1.1% | 0.0% |
|
|---|
| ROIC | -3.8% | -7.9% | -10.3% | -22.5% | -29.4% | -6.9% |
| ROE | -4.2% | -9.5% | -13.4% | -23.7% | -35.0% | -11.3% |
| Net Debt/EBITDA | -1.7x | | | | |
CUI Global, Inc. ($CUI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 22 | 23 | 25 | 27 | | 23.1% | 2.8% | 13.5% | 27.5% |
| EBITDA | -3 | -3 | -1 | -7 | | | | | |
| Net Income | -3 | -5 | -2 | -8 | | | | | |
Balance Sheet
|
|---|
| Cash | 10 | 7 | 3 | 4 | | 225.4% | 309.2% | 254.9% | -68.5% |
| Short Term Debt | 0 | 0 | 1 | 1 | | -18.1% | -91.7% | 685.4% | 899.0% |
| Long Term Debt | 9 | 9 | 8 | 5 | | -1.2% | -1.2% | -1.3% | -38.1% |
Ratios
|
|---|
| Gross Margin | 29.9% | 33.0% | 33.4% | 23.9% | | -1.9% | -3.5% | -0.7% | -7.0% |
| EBITDA Margin | -13.9% | -14.7% | -3.0% | -24.4% | | 4.7% | -10.6% | 3.0% | 1.7% |
| Net Income Margin | -14.8% | -20.6% | -6.2% | -28.8% | | 6.8% | -13.6% | 2.5% | -3.9% |
Peers in Electronic Equipment & Instrum
Below you can find CUI Global, 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. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (61 companies) | -78.5% | 3.5% | 1.2% | 4.6% | 9.1% |
|---|
| CUI Global, Inc. ($CUI) | | 13.4% | 0.3% | -3.7% | 16.2% |
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 ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (60 companies) | 42.7% | 42.3% | 41.2% | 41.8% | 42.0% |
|---|
| CUI Global, Inc. ($CUI) | 37.5% | 37.4% | 37.3% | 33.5% | 29.9% |
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. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (60 companies) | 5.5% | 5.2% | 3.4% | 5.1% | 4.2% |
|---|
| CUI Global, Inc. ($CUI) | 2.0% | -2.9% | -4.2% | -13.3% | -14.2% |
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 ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (60 companies) | 1.9% | 1.9% | 2.1% | 1.7% | 2.3% |
|---|
| CUI Global, Inc. ($CUI) | 1.3% | 5.8% | 1.0% | 1.1% | 1.1% |
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 ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (72 companies) | 3.3% | 2.3% | 2.2% | 3.3% | 1.3% |
|---|
| CUI Global, Inc. ($CUI) | -3.8% | -7.9% | -10.3% | -22.5% | -29.4% |
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 (36 companies) | -0.7x | -0.9x | -0.8x | -0.7x | -0.9x |
|---|
