eMagin Corporation CAPEX surged on 69.4% and Revenue jumped on 19.1%
03/28/2019 • About eMagin Corporation (
$EMAN) • By InTwits
eMagin Corporation 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: -36.9%
- eMagin Corporation spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 0.0%. Average EBITDA Margin for the same period was -24.6%
- eMagin Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $1m in FY2018, $1m in FY2017, $1m in FY2016, $2m in FY2015, $2m in FY2014
- The company has unprofitable business model: ROIC is -59.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 19.1%. Revenue growth showed slowdown in 18Q4 - it was -15.4% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 6.6 pp from -30.2% to -36.9% in 2018. EBITDA Margin followed a declining trend at -6.2 pp per annum in the last 5 years.
Gross Margin decreased on 8.0 pp from 23.3% to 15.2% in 2018. SG&A as a % of Revenue decreased on 5.2 pp from 39.4% to 34.2% in 2018.
Net Income margin decreased slightly on 1.0 pp from -35.3% to -36.4% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 8.8% in 2018. CAPEX/Revenue increased on 4.0 pp from 4.7% in 2015 to 8.8% in 2018. It's average CAPEX/Revenue for the last three years was 7.2%.
Return on investment
The company operates at negative ROIC (-59.0%) and ROE (-79.0%). ROIC dropped on 19.1 pp from -40.0% to -59.0% in 2018. ROE dropped on 20.6 pp from -58.4% to -79.0% in 2018. ROIC declined at -9.4 pp per annum in 2014-2018. ROE stuck to a declining trend at -12.9 pp per annum in the last 5 years.
Leverage (Debt)
The company paid down all the debt in 2018. Cash decreased on 4.7%.
Management team
Andrew G Sculley is a eMagin Corporation's CEO. Andrew G Sculley is a founder and has spent 0 years with the company. Jeffrey P Lucas is a eMagin Corporation's CFO. Jeffrey P Lucas has spent 0 years at the company.
Financial and operational results
FY ended 12/31/2018
eMagin Corporation ($EMAN) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 25.715 | 25.142 | 21.397 | 22.031 | 26.235 | 19.1% |
| Gross Profit | 7.385 | 6.978 | 6.442 | 5.124 | 3.994 | -22.1% |
| SG&A | 8.125 | 6.963 | 8.411 | 8.682 | 8.967 | 3.3% |
| EBITDA | -4.070 | -2.532 | -6.690 | -6.663 | -9.678 | |
| Net Income | -5.257 | -4.105 | -8.049 | -7.783 | -9.542 | |
Balance Sheet
|
|---|
| Cash | 5.290 | 9.273 | 5.241 | 3.526 | 3.359 | -4.7% |
| Short Term Debt | 0.000 | 0.000 | 1.689 | 3.808 | 0.000 | -100.0% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 1.479 | 1.189 | 1.437 | 1.355 | 2.296 | 69.4% |
Ratios
|
|---|
| Revenue growth | -8.1% | -2.2% | -14.9% | 3.0% | 19.1% | |
| EBITDA growth | -5.3% | -37.8% | 164.2% | -0.4% | 45.2% | |
|
|---|
| Gross Margin | 28.7% | 27.8% | 30.1% | 23.3% | 15.2% | -8.0% |
| EBITDA Margin | -15.8% | -10.1% | -31.3% | -30.2% | -36.9% | -6.6% |
| SG&A, % of revenue | 31.6% | 27.7% | 39.3% | 39.4% | 34.2% | -5.2% |
| Net Income Margin | -20.4% | -16.3% | -37.6% | -35.3% | -36.4% | -1.0% |
| CAPEX, % of revenue | 5.8% | 4.7% | 6.7% | 6.2% | 8.8% | 2.6% |
|
|---|
| ROIC | -22.9% | -17.9% | -36.4% | -40.0% | -59.0% | -19.1% |
| ROE | -31.1% | -24.8% | -49.5% | -58.4% | -79.0% | -20.6% |
eMagin Corporation ($EMAN) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 7 | 7 | 7 | 5 | | 13.1% | 34.3% | 60.4% | -15.4% |
| EBITDA | -2 | -3 | -1 | -4 | | | | | |
| Net Income | -2 | -5 | 0 | -2 | | | | | |
Balance Sheet
|
|---|
| Cash | 10 | 9 | 6 | 3 | | 161.4% | 77.9% | 215.2% | -4.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | | -100.0% | | -100.0% | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 28.8% | 1.5% | 34.6% | -8.7% | | -1.1% | -22.2% | 28.1% | -36.4% |
| EBITDA Margin | -30.2% | -44.5% | -11.1% | -68.1% | | -5.8% | -18.3% | 49.2% | -50.9% |
| Net Income Margin | -30.3% | -71.7% | 0.9% | -45.2% | | 2.6% | -28.5% | 70.8% | -31.6% |
Peers in Electronic Manufacturing Servi
Below we provide eMagin Corporation benchmarking against other companies in Electronic Manufacturing Servi 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 |
|---|
| RF Industries, Ltd. ($RFIL) | | 41.9% | -7.8% | -24.0% | 118.4% |
| Alpine 4 Technologies Ltd ($ALPP) | | | 35,893.8% | 5.8% | 71.5% |
| Kemet Corporation ($KEM) | | -1.3% | -10.7% | 3.1% | 58.4% |
| SMTC Corporation ($SMTX) | | -3.5% | -23.9% | -17.1% | 55.2% |
| Deswell Industries, Inc. ($DSWL) | | -7.0% | 17.1% | -0.1% | 36.3% |
| |
|---|
| Median (27 companies) | | 2.8% | 1.7% | 2.0% | 7.1% |
|---|
| eMagin Corporation ($EMAN) | | -2.2% | -14.9% | 3.0% | 19.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Neonode Inc. ($NEON) | 68.2% | 66.0% | 86.9% | 77.1% | 89.2% |
| Andrea Electronics Corp ($ANDR) | 83.8% | 99.1% | 88.5% | 96.2% | 70.4% |
| Data I/O Corporation ($DAIO) | 53.9% | 52.4% | 55.0% | 58.9% | 59.4% |
| IPG Photonics Corporation ($IPGP) | 54.1% | 54.6% | 54.9% | 56.6% | 54.8% |
| CTS Corporation ($CTS) | 32.2% | 33.2% | 35.4% | 33.2% | 35.1% |
| |
|---|
| Median (27 companies) | 14.5% | 14.8% | 16.7% | 13.8% | 12.1% |
|---|
| eMagin Corporation ($EMAN) | 28.7% | 27.8% | 30.1% | 23.3% | 15.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.5% | 42.4% | 41.8% | 44.7% | 40.9% |
| TE Connectivity Ltd. ($TEL) | 19.7% | 19.3% | 20.9% | 20.4% | 21.4% |
| CTS Corporation ($CTS) | 14.7% | 9.0% | 20.7% | 14.0% | 17.8% |
| Methode Electronics, Inc. ($MEI) | 12.6% | 15.4% | 16.5% | 16.5% | 16.1% |
| RF Industries, Ltd. ($RFIL) | 12.4% | 6.7% | -12.1% | 3.1% | 15.9% |
| |
|---|
| Median (27 companies) | 4.8% | 5.8% | 5.4% | 5.0% | 4.8% |
|---|
| eMagin Corporation ($EMAN) | -15.8% | -10.1% | -31.3% | -30.2% | -36.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Maxwell Technologies, Inc. ($MXWL) | 3.7% | 2.5% | 4.9% | 6.6% | 11.3% |
| IPG Photonics Corporation ($IPGP) | 11.5% | 7.8% | 12.6% | 9.0% | 11.0% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 4.9% | 5.3% | 5.6% | 6.7% |
| CTS Corporation ($CTS) | 3.2% | 2.5% | 5.2% | 4.3% | 6.1% |
| Kemet Corporation ($KEM) | 3.9% | 2.7% | 2.8% | 3.4% | 5.4% |
| |
|---|
| Median (27 companies) | 2.5% | 2.4% | 2.8% | 2.7% | 2.4% |
|---|
| eMagin Corporation ($EMAN) | 5.8% | 4.7% | 6.7% | 6.2% | 8.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | 8.5% | 4.6% | -18.7% | 0.9% | 29.2% |
| IPG Photonics Corporation ($IPGP) | 27.0% | 27.8% | 25.1% | 29.9% | 22.9% |
| Methode Electronics, Inc. ($MEI) | 19.7% | 26.1% | 22.7% | 20.8% | 19.2% |
| TE Connectivity Ltd. ($TEL) | 17.3% | 15.1% | 15.9% | 16.2% | 18.4% |
| Kemet Corporation ($KEM) | -2.8% | 3.8% | 6.2% | 6.9% | 16.9% |
| |
|---|
| Median (29 companies) | 5.0% | 5.3% | 6.7% | 5.7% | 6.7% |
|---|
| eMagin Corporation ($EMAN) | -22.9% | -17.9% | -36.4% | -40.0% | -59.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpine 4 Technologies Ltd ($ALPP) | | | | 34.1x | 65.7x |
| SigmaTron International, Inc. ($SGMA) | 2.7x | 4.1x | 2.4x | 3.4x | 16.0x |
| SMTC Corporation ($SMTX) | 3.5x | 1.8x | 1.0x | | 11.3x |
| IEC Electronics Corp. ($IEC) | 7.1x | 14.0x | 2.0x | 5.6x | 4.9x |
| Key Tronic Corporation ($KTCC) | 0.2x | 3.4x | 2.6x | 2.5x | 3.9x |
| |
|---|
| Median (23 companies) | -0.2x | -0.6x | 0.2x | 0.2x | 0.2x |
|---|
