Franklin Wireless Corp revenue surged on 21.3% and EBITDA Margin increased on 2.6 pp from -6.9% to -4.4%
09/30/2019 • About Franklin Wireless Corp (
$FKWL) • By InTwits
Franklin Wireless Corp reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -4.4%
- EBITDA Margin is quite volatile: -4.4% in FY2019, -6.9% in FY2018, 3.1% in FY2017, 5.2% in FY2016, 4.3% in FY2015
- Franklin Wireless Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.2%.
- The company has unprofitable business model: ROIC is -13.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.9x while industry average is -0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 21.3%. During the last 5 years Revenue growth bottomed in FY2018 at -38.1%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.6 pp from -6.9% to -4.4% in FY2019.
Gross Margin decreased slightly on 1.5 pp from 17.3% to 15.7% in FY2019. SG&A as a % of Revenue decreased slightly on 1.6 pp from 15.0% to 13.4% in FY2019.
Net Income margin increased on 3.5 pp from -7.0% to -3.5% in FY2019.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.28% in FY2019. CAPEX/Revenue showed almost no change from FY2016 to FY2019. It's average CAPEX/Revenue for the last three years was 0.15%.
Return on investment
The company operates at negative ROIC (-13.0%) and ROE (-8.3%). ROIC increased slightly on 1.8 pp from -14.9% to -13.0% in FY2019. ROE increased on 4.0 pp from -12.2% to -8.3% in FY2019.
Leverage (Debt)
The company has no debt. Cash dropped on 46.2%.
Financial and operational results
FY ended 06/30/2019
Franklin Wireless Corp ($FKWL) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 46.344 | 59.805 | 48.566 | 30.066 | 36.469 | 21.3% |
| Gross Profit | 8.400 | 9.925 | 9.218 | 5.192 | 5.739 | 10.6% |
| SG&A | 4.973 | 4.816 | 4.899 | 4.512 | 4.891 | 8.4% |
| EBITDA | 1.972 | 3.087 | 1.489 | -2.084 | -1.592 | |
| Net Income | 0.760 | 1.611 | 0.874 | -2.092 | -1.276 | |
Balance Sheet
|
|---|
| Cash | 11.823 | 13.157 | 14.285 | 11.976 | 6.448 | -46.2% |
| Short Term Debt | 0.148 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.053 | 0.173 | 0.045 | 0.024 | 0.101 | 321.6% |
Ratios
|
|---|
| Revenue growth | 49.7% | 29.0% | -18.8% | -38.1% | 21.3% | |
| EBITDA growth | -244.4% | 56.5% | -51.8% | -240.0% | -23.6% | |
|
|---|
| Gross Margin | 18.1% | 16.6% | 19.0% | 17.3% | 15.7% | -1.5% |
| EBITDA Margin | 4.3% | 5.2% | 3.1% | -6.9% | -4.4% | 2.6% |
| SG&A, % of revenue | 10.7% | 8.1% | 10.1% | 15.0% | 13.4% | -1.6% |
| Net Income Margin | 1.6% | 2.7% | 1.8% | -7.0% | -3.5% | 3.5% |
| CAPEX, % of revenue | 0.1% | 0.3% | 0.1% | 0.1% | 0.3% | 0.2% |
|
|---|
| ROIC | 3.2% | 12.2% | 4.7% | -14.9% | -13.0% | 1.8% |
| ROE | 4.9% | 9.8% | 5.0% | -12.2% | -8.3% | 4.0% |
| Net Debt/EBITDA | -5.9x | -4.3x | -9.6x | | |
Peers in Communications Equipment
Below you can find Franklin Wireless Corp benchmarking vs. other companies in Communications Equipment 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ribbon Communications Inc. ($RBBN) | | | 30.6% | 75.2% | |
| Extreme Networks, Inc. ($EXTR) | 6.4% | -4.4% | 13.2% | 64.4% | |
| Optical Cable Corporation ($OCC) | -11.3% | -12.2% | -0.8% | 37.0% | |
| ParkerVision Inc ($PRKR) | | 37,601.2% | -97.5% | 35.0% | |
| Network-1 Technologies, Inc. ($NTIP) | 34.6% | 292.9% | -74.7% | 34.4% | |
| |
|---|
| Median (66 companies) | 1.8% | 7.5% | 5.6% | 3.5% | -10.0% |
|---|
| Franklin Wireless Corp ($FKWL) | | | -18.8% | -38.1% | 21.3% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| F5 Networks, Inc. ($FFIV) | 82.7% | 83.1% | 83.1% | 83.3% | |
| Radware Ltd. ($RDWR) | 82.4% | 81.8% | 81.3% | 82.2% | |
| Radcom Ltd. ($RDCM) | 76.8% | 69.6% | 71.8% | 74.0% | 70.0% |
| Casa Systems, Inc. ($CASA) | 70.8% | 69.1% | 73.4% | 73.4% | |
| NetScout Systems, Inc. ($NTCT) | 79.2% | 65.6% | 70.2% | 72.4% | |
| |
|---|
| Median (67 companies) | 42.7% | 43.9% | 41.7% | 41.2% | 46.4% |
|---|
| Franklin Wireless Corp ($FKWL) | | 16.6% | 19.0% | 17.3% | 15.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 33.7% | 50.6% | 37.8% | 42.8% | |
| InterDigital, Inc. ($IDCC) | 58.1% | 73.6% | 67.3% | 41.9% | |
| EchoStar Corporation ($SATS) | 39.7% | 40.3% | 38.1% | 37.4% | |
| Ubiquiti Networks, Inc. ($UBNT) | 25.5% | 37.3% | 34.3% | 32.8% | |
| Ituran Location and Control Ltd. ($ITRN) | 30.5% | 29.9% | 29.9% | 30.4% | |
| |
|---|
| Median (65 companies) | 7.3% | 5.9% | 6.5% | 5.4% | -2.8% |
|---|
| Franklin Wireless Corp ($FKWL) | | 5.2% | 3.1% | -6.9% | -4.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Resonant Inc. ($RESN) | | 132.5% | 124.8% | 245.2% | |
| ViaSat, Inc. ($VSAT) | 26.5% | 26.7% | 33.0% | 32.1% | |
| Applied Optoelectronics, Inc. ($AAOI) | 30.1% | 19.0% | 17.5% | 26.9% | |
| EchoStar Corporation ($SATS) | 43.8% | 39.9% | 30.9% | 26.5% | |
| Finisar Corporation ($FNSR) | 11.9% | 9.4% | 9.7% | 16.8% | |
| |
|---|
| Median (65 companies) | 2.4% | 2.0% | 1.9% | 1.7% | 2.0% |
|---|
| Franklin Wireless Corp ($FKWL) | | 0.3% | 0.1% | 0.1% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| F5 Networks, Inc. ($FFIV) | 40.8% | 43.1% | 46.9% | 47.9% | |
| Ubiquiti Networks, Inc. ($UBNT) | 31.5% | 41.5% | 38.5% | 39.1% | |
| Motorola Solutions, Inc. ($MSI) | 18.9% | 26.4% | 39.5% | 35.3% | |
| Ituran Location and Control Ltd. ($ITRN) | 46.8% | 50.1% | 48.5% | 35.1% | |
| Casa Systems, Inc. ($CASA) | | 43.2% | 39.7% | 21.9% | |
| |
|---|
| Median (70 companies) | 2.1% | 2.2% | 2.1% | 0.7% | -3.4% |
|---|
| Franklin Wireless Corp ($FKWL) | | 12.2% | 4.7% | -14.9% | -13.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Extreme Networks, Inc. ($EXTR) | | -2.2x | -1.5x | 7.1x | |
| ViaSat, Inc. ($VSAT) | 2.5x | 3.2x | 2.5x | 5.8x | |
| CommScope Holding Company, Inc. ($COMM) | 9.6x | 4.3x | 4.6x | 4.4x | |
| Inseego Corp. ($INSG) | | | | 3.9x | |
| Finisar Corporation ($FNSR) | 0.2x | -0.5x | 1.6x | 3.8x | |
| |
|---|
| Median (46 companies) | -0.6x | -0.8x | -0.6x | -0.1x | 0.0x |
|---|
