ImageWare Systems Inc CAPEX surged on 4,700% and Revenue increased on 2.6%
03/28/2019 • About ImageWare Systems Inc (
$IWSY) • By InTwits
ImageWare Systems Inc reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -265.2%
- ImageWare Systems Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -216.1% for the sames years
- ImageWare Systems Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $0m in 2018, $0m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has unprofitable business model: ROIC is -368.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.1x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 2.6%. Revenue growth showed slowdown in 18Q4 - it was -12.6% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 10.9 pp from -15.1% to -4.2% in FY2018.
Gross Margin increased on 3.2 pp from 76.9% to 80.1% in 2018. During 2014-2018 Gross Margin bottomed in 2015 at 59.2% and was growing since that time. SG&A as a % of Revenue surged on 15.1 pp from 163% to 178% in 2018.
Net Income margin dropped on 50.4 pp from -235% to -285% in 2018. Net Income margin followed a declining trend at -24.4 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 5.4%. The company's CAPEX/Revenue increased on 3.6 pp from 1.8% in 2015 to 5.4% in 2018. It's average level of CAPEX/Revenue for the last three years was 2.3%. During the last 5 years CAPEX as a % of Revenue bottomed in 2017 at 0.12%.
Leverage (Debt)
The company has no debt. Cash dropped on 22.2%.
Management team
ImageWare Systems Inc's CEO S James Miller Jr "Jim" is a founder and has spent 16 years with the company. Wayne G Wetherell is a ImageWare Systems Inc's CFO. Wayne G Wetherell has spent 13 years at the company.
Financial and operational results
FY ended 12/31/2018
ImageWare Systems Inc ($IWSY) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 4.159 | 4.769 | 3.812 | 4.293 | 4.404 | 2.6% |
| Gross Profit | 3.167 | 2.825 | 2.742 | 3.302 | 3.528 | 6.8% |
| SG&A | 6.289 | 6.228 | 6.743 | 7.008 | 7.856 | 12.1% |
| EBITDA | -7.617 | -8.046 | -9.333 | -9.659 | -11.679 | |
| Net Income | -7.940 | -8.534 | -9.527 | -10.069 | -12.550 | |
Balance Sheet
|
|---|
| Cash | 0.218 | 3.352 | 1.586 | 7.317 | 5.694 | -22.2% |
| 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 | 0.117 | 0.087 | 0.049 | 0.005 | 0.240 | 4,700.0% |
Ratios
|
|---|
| Revenue growth | -21.6% | 14.7% | -20.1% | 12.6% | 2.6% | |
| EBITDA growth | 47.6% | 5.6% | 16.0% | 3.5% | 20.9% | |
|
|---|
| Gross Margin | 76.1% | 59.2% | 71.9% | 76.9% | 80.1% | 3.2% |
| EBITDA Margin | -183.1% | -168.7% | -244.8% | -225.0% | -265.2% | -40.2% |
| SG&A, % of revenue | 151.2% | 130.6% | 176.9% | 163.2% | 178.4% | 15.1% |
| Net Income Margin | -190.9% | -178.9% | -249.9% | -234.5% | -285.0% | -50.4% |
| CAPEX, % of revenue | 2.8% | 1.8% | 1.3% | 0.1% | 5.4% | 5.3% |
|
|---|
| ROIC | -661.2% | -616.4% | -776.8% | | -368.2% | |
ImageWare Systems Inc ($IWSY) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1 | 2 | 1 | 1 | | -22.8% | 77.8% | -32.1% | -12.6% |
| EBITDA | -3 | -2 | -3 | -3 | | | | | |
| Net Income | -4 | -2 | -3 | -3 | | | | | |
Balance Sheet
|
|---|
| Cash | 5 | 2 | 9 | 6 | | 859.6% | 2,027.9% | -8.2% | -22.2% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | -100.0% | -100.0% | |
Ratios
|
|---|
| Gross Margin | 65.4% | 83.8% | 78.3% | 84.8% | | -6.4% | 7.4% | -0.4% | 5.0% |
| EBITDA Margin | -474.6% | -110.8% | -427.3% | -285.7% | | -194.1% | 116.9% | -218.2% | -91.2% |
| Net Income Margin | -500.4% | -121.2% | -473.1% | -300.0% | | -206.6% | 119.1% | -252.6% | -103.2% |
Peers in Application Software
Below we provide ImageWare Systems Inc benchmarking against other companies in Application Software 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 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 13.5% | 14.3% | 15.7% | 15.2% |
|---|
| ImageWare Systems Inc ($IWSY) | | 14.7% | -20.1% | 12.6% | 2.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 62.8% | 61.9% | 63.8% | 64.4% | 65.7% |
|---|
| ImageWare Systems Inc ($IWSY) | 76.1% | 59.2% | 71.9% | 76.9% | 80.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.2% |
|---|
| ImageWare Systems Inc ($IWSY) | -183.1% | -168.7% | -244.8% | -225.0% | -265.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| ImageWare Systems Inc ($IWSY) | 2.8% | 1.8% | 1.3% | 0.1% | 5.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.2% | -11.2% | -9.2% | -11.0% | -9.3% |
|---|
| ImageWare Systems Inc ($IWSY) | -661.2% | -616.4% | -776.8% | | -368.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (70 companies) | -1.4x | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
