Taitron Components Incorporated reports 96.6% Net Income growth in 2018 and 6.2 pp EBITDA Margin growth from 13.0% to 19.2%
04/01/2019 • About Taitron Components Incorporated (
$TAIT) • By InTwits
Taitron Components Incorporated reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Taitron Components Incorporated spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 0.0%. Average EBITDA Margin for the same period was -2.4%
- Taitron Components Incorporated has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has business model with average profitability: ROIC is 11.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 7.9%. Revenue growth showed acceleration in 18Q4 - it increased 25.6% YoY. During the last 5 years Revenue growth topped in 2016 at 21.9% and was decelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 6.2 pp from 13.0% to 19.2% in 2018.
Gross Margin increased on 4.6 pp from 39.4% to 44.0% in 2018. SG&A as a % of Revenue decreased on 2.2 pp from 29.0% to 26.7% in 2018. SG&A as a % of Revenue declined at -2.8 pp per annum in the last 5 years.
Net Income margin increased on 7.6 pp from 9.2% to 16.8% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 0.061%. Taitron Components Incorporated's CAPEX/Revenue decreased slightly on 0.59 pp from 0.65% in 2015 to 0.061% in 2018. It's average CAPEX/Revenue for the last three years was 0.20%.
Return on investment
The company operates at low ROIC (11.3%) and ROE (11.3%). ROIC increased on 5.0 pp from 6.3% to 11.3% in 2018. ROE increased on 5.3 pp from 6.0% to 11.3% in 2018.
Leverage (Debt)
The company paid down all the debt in 2018. Cash surged on 38.3%.
Valuation and dividends
Taitron Components Incorporated's trades at EV/EBITDA 4.6x and P/E 8.6x.
Financial and operational results
FY ended 12/31/2018
Taitron Components Incorporated ($TAIT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 5.824 | 5.674 | 6.915 | 7.622 | 8.222 | 7.9% |
| Gross Profit | 1.478 | 1.762 | -0.748 | 3.000 | 3.618 | 20.6% |
| SG&A | 2.136 | 2.101 | 2.124 | 2.209 | 2.199 | -0.5% |
| EBITDA | -0.503 | -0.184 | -2.697 | 0.994 | 1.580 | 59.0% |
| Net Income | -1.127 | -0.587 | -3.111 | 0.701 | 1.378 | 96.6% |
Balance Sheet
|
|---|
| Cash | 3.470 | 3.692 | 4.018 | 3.250 | 4.494 | 38.3% |
| Short Term Debt | 0.500 | 0.500 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 1.000 | 1.000 | 1.000 | 0.500 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 0.014 | 0.037 | 0.004 | 0.037 | 0.005 | -86.5% |
Ratios
|
|---|
| Revenue growth | -7.1% | -2.6% | 21.9% | 10.2% | 7.9% | |
| EBITDA growth | -31.7% | -63.4% | 1,365.8% | -136.9% | 59.0% | |
|
|---|
| Gross Margin | 25.4% | 31.1% | -10.8% | 39.4% | 44.0% | 4.6% |
| EBITDA Margin | -8.6% | -3.2% | -39.0% | 13.0% | 19.2% | 6.2% |
| SG&A, % of revenue | 36.7% | 37.0% | 30.7% | 29.0% | 26.7% | -2.2% |
| Net Income Margin | -19.4% | -10.3% | -45.0% | 9.2% | 16.8% | 7.6% |
| CAPEX, % of revenue | 0.2% | 0.7% | 0.1% | 0.5% | 0.1% | -0.4% |
|
|---|
| ROIC | -3.7% | -2.0% | -19.5% | 6.3% | 11.3% | 5.0% |
| ROE | -6.9% | -3.8% | -23.3% | 6.0% | 11.3% | 5.3% |
| Net Debt/EBITDA | | | | -2.8x | -2.8x | -0.1x |
Taitron Components Incorporated ($TAIT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 2 | 2 | 2 | 3 | | -23.6% | 21.3% | 13.3% | 25.6% |
| EBITDA | 0 | 0 | 0 | 1 | | -63.3% | 69.9% | 27.1% | 1,052.7% |
| Net Income | 0 | 0 | 0 | 1 | | -79.7% | 84.8% | 30.7% | |
Balance Sheet
|
|---|
| Cash | 4 | 3 | 4 | 4 | | 3.5% | -11.6% | 2.7% | 38.3% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | -100.0% | -100.0% | |
| Long Term Debt | 1 | 0 | 0 | 0 | | -50.0% | -100.0% | -100.0% | -100.0% |
Ratios
|
|---|
| Gross Margin | 39.5% | 45.5% | 44.5% | 45.3% | | -0.8% | 2.8% | -1.3% | 15.2% |
| EBITDA Margin | 8.9% | 21.0% | 18.2% | 25.2% | | -9.6% | 6.0% | 2.0% | 22.5% |
| Net Income Margin | 3.7% | 18.7% | 14.8% | 25.2% | | -10.2% | 6.4% | 2.0% | 26.8% |
Peers in Technology Distributors
Below we provide Taitron Components Incorporated benchmarking against other companies in Technology Distributors 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 |
|---|
| Tech Data Corporation ($TECD) | | 3.2% | -4.7% | -8.3% | 38.9% |
| EACO Corp ($EACO) | | 4.1% | 5.9% | 5.7% | 23.1% |
| Richardson Electronics, Ltd. ($RELL) | | -0.7% | 3.7% | -3.6% | 19.2% |
| Synnex Corporation ($SNX) | | -3.6% | 5.4% | 21.2% | 17.6% |
| Wayside Technology Group, Inc. ($WSTG) | | 12.1% | 9.4% | -61.6% | 13.0% |
| |
|---|
| Median (16 companies) | | 4.5% | 4.6% | 4.2% | 8.9% |
|---|
| Taitron Components Incorporated ($TAIT) | | -2.6% | 21.9% | 10.2% | 7.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Richardson Electronics, Ltd. ($RELL) | 29.7% | 30.0% | 31.6% | 32.1% | 33.7% |
| EACO Corp ($EACO) | 27.5% | 29.3% | 29.3% | 28.5% | 28.5% |
| Surge Components Inc ($SPRS) | 24.5% | 25.0% | 25.2% | 25.2% | 25.6% |
| ADDvantage Technologies Group, Inc. ($AEY) | 32.3% | 35.0% | 32.2% | 30.4% | 23.7% |
| ePlus inc. ($PLUS) | 21.7% | 21.4% | 21.8% | 22.5% | 22.8% |
| |
|---|
| Median (16 companies) | 14.2% | 13.5% | 14.2% | 16.5% | 15.6% |
|---|
| Taitron Components Incorporated ($TAIT) | 25.4% | 31.1% | -10.8% | 39.4% | 44.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CDW Corporation ($CDW) | 7.3% | 7.5% | 7.7% | 7.6% | 7.7% |
| ePlus inc. ($PLUS) | 7.3% | 7.5% | 7.6% | 7.3% | 7.1% |
| EACO Corp ($EACO) | 4.0% | 4.5% | 4.7% | 4.5% | 5.9% |
| Surge Components Inc ($SPRS) | 2.8% | 3.8% | -1.5% | 1.2% | 4.8% |
| Anixter International Inc. ($AXE) | 6.3% | 5.1% | 4.6% | 4.8% | 4.5% |
| |
|---|
| Median (16 companies) | 3.2% | 3.5% | 3.6% | 3.5% | 4.0% |
|---|
| Taitron Components Incorporated ($TAIT) | -8.6% | -3.2% | -39.0% | 13.0% | 19.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Richardson Electronics, Ltd. ($RELL) | 2.0% | 3.5% | 3.4% | 3.8% | 3.2% |
| ePlus inc. ($PLUS) | 0.9% | 1.0% | 2.1% | 1.5% | 1.0% |
| EACO Corp ($EACO) | 0.6% | 0.4% | 0.3% | 5.5% | 0.8% |
| Avnet, Inc. ($AVT) | 0.4% | 0.6% | 0.8% | 0.7% | 0.8% |
| PC Connection, Inc. ($CNXN) | 0.3% | 0.5% | 0.4% | 0.4% | 0.8% |
| |
|---|
| Median (16 companies) | 0.5% | 0.5% | 0.4% | 0.5% | 0.5% |
|---|
| Taitron Components Incorporated ($TAIT) | 0.2% | 0.7% | 0.1% | 0.5% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Surge Components Inc ($SPRS) | 6.7% | 9.5% | -4.0% | 3.9% | 24.6% |
| CDW Corporation ($CDW) | 16.5% | 17.3% | 18.8% | 20.1% | 23.1% |
| EACO Corp ($EACO) | 19.6% | 21.8% | 22.2% | 16.1% | 21.2% |
| ePlus inc. ($PLUS) | 20.1% | 21.0% | 21.5% | 22.8% | 20.8% |
| Insight Enterprises, Inc. ($NSIT) | 17.0% | 17.4% | 20.7% | 19.3% | 20.0% |
| |
|---|
| Median (17 companies) | 13.6% | 12.1% | 12.5% | 11.5% | 11.7% |
|---|
| Taitron Components Incorporated ($TAIT) | -3.7% | -2.0% | -19.5% | 6.3% | 11.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Synnex Corporation ($SNX) | 2.0x | 0.9x | 1.2x | 2.1x | 3.9x |
| Anixter International Inc. ($AXE) | 3.2x | 4.7x | 3.6x | 3.0x | 3.1x |
| ScanSource, Inc. ($SCSC) | -1.4x | -0.9x | 0.2x | 0.6x | 2.5x |
| CDW Corporation ($CDW) | 3.2x | 3.3x | 2.8x | 2.7x | 2.4x |
| Arrow Electronics, Inc. ($ARW) | 1.8x | 2.2x | 2.2x | 2.3x | 2.2x |
| |
|---|
| Median (15 companies) | -0.1x | -0.2x | 0.2x | 1.2x | 1.2x |
|---|
| Taitron Components Incorporated ($TAIT) | | | | -2.8x | -2.8x |
