UTStarcom Holdings Corp EBITDA dropped on 171% and Revenue dropped on 43.4%
03/27/2020 • About UTStarcom Holdings Corp (
$UTSI) • By InTwits
UTStarcom Holdings Corp reported 2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- UTStarcom Holdings Corp is a company in decline: 2019 revenue growth was -43.4%, 5 years revenue CAGR was -12.7%
- The company operates at negative EBITDA Margin: -5.5%
- EBITDA Margin is quite volatile: -5.5% in 2019, 4.4% in 2018, 7.3% in 2017, 3.4% in 2016, -2.4% in 2015
- UTStarcom Holdings Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has unprofitable business model: ROIC is -5.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.0x 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 dropped on 43.4%. Annual revenue decline showed slowdown in 19Q4 - revenue jumped on 10.0%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 9.8 pp from 4.4% to -5.5% in 2019. During 2015-2019 EBITDA Margin topped in 2017 at 7.3% and was declining since that time.
Gross Margin increased on 9.0 pp from 27.8% to 36.8% in 2019. SG&A as a % of Revenue surged on 11.0 pp from 13.1% to 24.1% in 2019.
Net Income margin dropped on 10.1 pp from 4.2% to -6.0% in 2019. During 2015-2019 Net Income margin topped in 2017 at 7.1% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In 2019 the company had CAPEX/Revenue of 0.77%. CAPEX/Revenue decreased slightly on 0.99 pp from 1.8% in 2016 to 0.77% in 2019. Average CAPEX/Revenue for the last three years was 0.57%.
Return on investment
The company operates at negative ROIC (-5.3%) and ROE (-3.9%). ROIC decreased on 9.4 pp from 4.1% to -5.3% in 2019. ROE decreased on 8.9 pp from 5.0% to -3.9% in 2019. During 2015-2019 ROIC topped in 2017 at 6.7% and was declining since that time. During the last 5 years ROE topped in 2017 at 8.0% and was declining since that time.
Leverage (Debt)
Debt level is 0.0x Net Debt / EBITDA and Debt / EBITDA. Debt surged while cash dropped on 38.7%.
UTStarcom Holdings Corp has no short term refinancing risk: cash is higher than short term debt (2,192.2%).
Management team
At the end of financial year the company had 478 employees. Average revenue per employee in 2019 was
$137,287.
Financial and operational results
FY ended 12/31/2019
UTStarcom Holdings Corp ($UTSI) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 117.1 | 86.5 | 98.3 | 115.9 | 65.6 | -43.4% |
| Gross Profit | 27.9 | 28.4 | 33.1 | 32.3 | 24.2 | -25.1% |
| SG&A | 21.5 | 18.1 | 16.8 | 15.2 | 15.8 | 4.4% |
| EBITDA | -2.8 | 2.9 | 7.1 | 5.1 | -3.6 | -170.9% |
| EBIT | | | | | -4.2 | |
| Net Income | -27.2 | 0.3 | 7.0 | 4.8 | -3.9 | -181.2% |
| Stock Based Compensation | | | | | 1.4 | |
Balance Sheet
|
|---|
| Cash | 77.1 | 83.9 | 79.7 | 57.0 | 35.0 | -38.7% |
| Accounts Receivable | | | | | 77.8 | |
| Inventory | | | | | 6.1 | |
| Accounts Payable | | | | | 30.9 | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 1.6 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 1.4 | |
Cash flow
|
|---|
| Capex | 0.9 | 1.5 | 0.7 | 0.2 | 0.5 | 125.3% |
Ratios
|
|---|
| Revenue growth | -9.5% | -26.1% | 13.6% | 18.0% | -43.4% | |
| EBITDA growth | -75.6% | -204.6% | 145.0% | -29.0% | -170.9% | |
|
|---|
| Gross Margin | 23.8% | 32.8% | 33.7% | 27.8% | 36.8% | 9.0% |
| EBITDA Margin | -2.4% | 3.4% | 7.3% | 4.4% | -5.5% | -9.8% |
| EBIT Margin | | | | | -6.5% |
| SG&A, % of revenue | 18.4% | 21.0% | 17.1% | 13.1% | 24.1% | 11.0% |
| SBC, % of revenue | | | | | 2.1% |
| Net Income Margin | -23.2% | 0.3% | 7.1% | 4.2% | -6.0% | -10.1% |
| CAPEX, % of revenue | 0.8% | 1.8% | 0.7% | 0.2% | 0.8% | 0.6% |
|
|---|
| ROIC | -4.2% | 1.7% | 6.7% | 4.1% | -5.3% | -9.4% |
| ROE | -27.3% | 0.3% | 8.0% | 5.0% | -3.9% | -8.9% |
| Net Debt/EBITDA | | -28.8x | -11.2x | -11.3x | |
People
|
|---|
| Employees | | | | | 478 | |
| Revenue/Employee, th. $ | | | | | 137 | |
UTStarcom Holdings Corp ($UTSI) key quoterly financial indicators
| mln. $ | 19Q1 | 19Q2 | 19Q3 | 19Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 25 | 14 | 13 | 14 | | 10.7% | -50.9% | -75.0% | 10.0% |
| EBITDA | 0 | -2 | -2 | -1 | | -100.0% | -395.9% | -147.1% | |
| Net Income | 0 | 2 | -2 | -4 | | -100.0% | | -193.2% | |
Balance Sheet
|
|---|
| Cash | 48 | 40 | 33 | 35 | | -36.1% | -37.8% | -34.8% | -38.6% |
| Short Term Debt | 1 | 1 | 6 | 2 | | | | | |
| Long Term Debt | 2 | 1 | 1 | 1 | | | | | |
Ratios
|
|---|
| Gross Margin | 28.0% | 36.0% | 55.0% | 35.0% | | -12.5% | 9.8% | 36.0% | -10.3% |
| EBITDA Margin | 0.0% | -14.3% | -15.4% | -7.1% | | -11.0% | -16.7% | -23.5% | 11.3% |
| Net Income Margin | 0.0% | 14.3% | -15.4% | -28.6% | | -17.8% | 14.6% | -19.5% | -18.6% |
Peers in Communications Equipment
Below we provide UTStarcom Holdings Corp benchmarking against other companies in Communications Equipment 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 | 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. ($NTIP) | 34.6% | 292.9% | -74.7% | 34.4% | |
| |
|---|
| Median (66 companies) | 1.8% | 7.6% | 5.1% | 2.8% | -0.1% |
|---|
| UTStarcom Holdings Corp ($UTSI) | | -26.1% | 13.6% | 18.0% | -43.4% |
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. ($NTCT) | 79.2% | 65.6% | 70.2% | 72.4% | |
| |
|---|
| Median (67 companies) | 44.0% | 43.9% | 41.7% | 41.2% | 45.0% |
|---|
| UTStarcom Holdings Corp ($UTSI) | 23.8% | 32.8% | 33.7% | 27.8% | 36.8% |
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. ($ITRN) | 30.5% | 29.9% | 29.9% | 30.4% | |
| |
|---|
| Median (65 companies) | 7.6% | 5.9% | 6.0% | 5.4% | -2.2% |
|---|
| UTStarcom Holdings Corp ($UTSI) | -2.4% | 3.4% | 7.3% | 4.4% | -5.5% |
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 ($FNSR) | 11.9% | 9.4% | 9.7% | 16.8% | |
| |
|---|
| Median (65 companies) | 2.5% | 2.0% | 1.9% | 1.7% | 2.0% |
|---|
| UTStarcom Holdings Corp ($UTSI) | 0.8% | 1.8% | 0.7% | 0.2% | 0.8% |
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. ($CASA) | | 43.2% | 39.7% | 21.9% | |
| |
|---|
| Median (70 companies) | 2.3% | 2.4% | 2.1% | 0.3% | -5.6% |
|---|
| UTStarcom Holdings Corp ($UTSI) | -4.2% | 1.7% | 6.7% | 4.1% | -5.3% |
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 ($FNSR) | 0.2x | -0.5x | 1.6x | 3.8x | |
| |
|---|
| Median (45 companies) | -0.6x | -0.8x | -0.6x | 0.2x | 0.0x |
|---|
| UTStarcom Holdings Corp ($UTSI) | | -28.8x | -11.2x | -11.3x | |
