IEH Corp reports 50.4% Net Income decline in 2020 while 13.2% Revenue growth
10/08/2020 • About IEH Corp (
$IEHC) • By InTwits
IEH Corp reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- IEH Corp is a growth stock: FY2020 revenue growth was 13.2%, 5 year revenue CAGR was 14.4% at FY2020 ROIC 12.8%
- IEH Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 19.3%
- CAPEX is quite volatile: $1m in FY2020, $1m in FY2019, $0m in FY2018, $1m in FY2017, $1m in FY2016
- The company has highly profitable business model: ROIC is 12.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 13.2%. Revenue growth showed acceleration in FY20Q4 - it increased 26.9% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 10.7% to 9.4% in FY2020.
Gross Margin dropped on 10.5 pp from 42.3% to 31.9% in FY2020. During the last 5 years Gross Margin topped in FY2019 at 42.3%. SG&A as a % of Revenue increased on 4.6 pp from 14.1% to 18.7% in FY2020.
Net Income margin dropped on 10.2 pp from 18.2% to 8.0% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 IEH Corp had CAPEX/Revenue of 3.0%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 2.5%.
Return on investment
The company operates at good ROIC (12.8%) while ROE is low (10.5%). ROIC dropped on 23.8 pp from 36.6% to 12.8% in FY2020. ROE dropped on 15.8 pp from 26.2% to 10.5% in FY2020.
Leverage (Debt)
Debt level is -1.7x Net Debt / EBITDA and 0.0x Debt / EBITDA. Debt surged while cash increased on 9.6%.
IEH Corp has no short term refinancing risk: cash is higher than short term debt (6,486.8%).
Valuation and dividends
IEH Corp's trades at EV/EBITDA 5.0x and P/E 11.7x.
Financial and operational results
FY ended 03/31/2020
IEH Corp ($IEHC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 19.358 | 20.128 | 23.473 | 28.407 | 32.155 | 13.2% |
| Gross Profit | 6.526 | 7.031 | 8.738 | 12.030 | 10.248 | -14.8% |
| SG&A | 3.048 | 3.755 | 4.007 | 4.007 | 6.007 | 49.9% |
| EBITDA | 3.479 | 3.276 | 4.731 | 8.022 | 4.435 | -44.7% |
| Net Income | 1.690 | 1.474 | 2.566 | 5.161 | 2.557 | -50.4% |
Balance Sheet
|
|---|
| Cash | 1.754 | 1.211 | 1.407 | 7.080 | 7.760 | 9.6% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.120 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.507 | 0.595 | 0.377 | 0.840 | 0.969 | 15.4% |
Ratios
|
|---|
| Revenue growth | 18.1% | 4.0% | 16.6% | 21.0% | 13.2% | |
| EBITDA growth | 0.2% | -5.8% | 44.4% | 69.6% | -44.7% | |
|
|---|
| Gross Margin | 33.7% | 34.9% | 37.2% | 42.3% | 31.9% | -10.5% |
| EBITDA Margin | 18.0% | 16.3% | 20.2% | 28.2% | 13.8% | -14.4% |
| SG&A, % of revenue | 15.7% | 18.7% | 17.1% | 14.1% | 18.7% | 4.6% |
| Net Income Margin | 8.7% | 7.3% | 10.9% | 18.2% | 8.0% | -10.2% |
| CAPEX, % of revenue | 2.6% | 3.0% | 1.6% | 3.0% | 3.0% | 0.1% |
|
|---|
| ROIC | 24.2% | 19.2% | 26.1% | 36.6% | 12.8% | -23.8% |
| ROE | 13.3% | 10.3% | 16.0% | 26.2% | 10.5% | -15.8% |
| Net Debt/EBITDA | -0.5x | -0.4x | -0.3x | -0.9x | -1.7x | -0.8x |
IEH Corp ($IEHC) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 8 | 8 | 8 | 9 | | -16.3% | 14.5% | 40.9% | 26.9% |
| EBITDA | 2 | 2 | 2 | -1 | | -52.3% | 49.7% | 40.1% | -171.3% |
| Net Income | 1 | 1 | 1 | -1 | | -59.7% | 40.4% | 7.5% | -145.4% |
Balance Sheet
|
|---|
| Cash | 6 | 7 | 8 | 8 | | 177.4% | 60.6% | 15.6% | 9.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | - | - | - | - |
| Long Term Debt | 0 | 0 | 0 | 0 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 36.3% | 46.3% | 37.4% | 9.9% | | -11.1% | 7.6% | 0.8% | -34.3% |
| EBITDA Margin | 21.6% | 30.0% | 20.0% | -15.6% | | -16.3% | 7.1% | -0.1% | -43.3% |
| Net Income Margin | 12.0% | 17.6% | 10.1% | -6.1% | | -13.0% | 3.3% | -3.1% | -23.3% |
Peers in Electronic Components
Below we provide IEH Corp benchmarking against other companies in Electronic Components 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cavitation Technologies Inc ($CVAT) | - | -40.9% | 22.6% | -16.3% | 52.6% |
| Amphenol Corporation ($APH) | - | 11.5% | 17.0% | 0.3% | 4.5% |
| Corning Incorporated ($GLW) | - | 7.7% | 11.6% | 1.9% | -1.7% |
| CPS Technologies Corp. ($CPSH) | - | -5.0% | 48.0% | -0.5% | -2.8% |
| Littelfuse, Inc. ($LFUS) | - | 15.7% | 40.7% | -12.5% | -3.9% |
| |
|---|
| Median (12 companies) | -10.4% | 8.3% | 14.1% | -4.3% | -5.8% |
|---|
| IEH Corp ($IEHC) | - | 4.0% | 16.6% | 21.0% | 13.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cavitation Technologies Inc ($CVAT) | 93.2% | 93.5% | 90.6% | 93.7% | 97.6% |
| Dolby Laboratories ($DLB) | 89.4% | 89.1% | 87.9% | 87.0% | 87.4% |
| Airgain, Inc. ($AIRG) | 44.4% | 47.1% | 43.7% | 45.4% | 46.6% |
| Rogers Corporation ($ROG) | 38.0% | 38.8% | 35.4% | 35.0% | 36.4% |
| Belden Inc ($BDC) | 41.6% | 39.1% | 39.0% | 37.2% | 35.6% |
| |
|---|
| Median (12 companies) | 33.7% | 38.3% | 36.7% | 35.5% | 35.1% |
|---|
| IEH Corp ($IEHC) | 33.7% | 34.9% | 37.2% | 42.3% | 31.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dolby Laboratories ($DLB) | 30.9% | 30.8% | 25.1% | 27.6% | 28.7% |
| Amphenol Corporation ($APH) | 22.6% | 23.6% | 24.2% | 24.7% | 22.6% |
| Littelfuse, Inc. ($LFUS) | 17.4% | 23.0% | 19.1% | 19.5% | 18.5% |
| Corning Incorporated ($GLW) | 27.9% | 27.3% | 25.4% | 25.7% | 18.0% |
| Rogers Corporation ($ROG) | 18.5% | 21.3% | 18.5% | 18.1% | 17.7% |
| |
|---|
| Median (12 companies) | 13.6% | 8.7% | 9.3% | 16.9% | 15.4% |
|---|
| IEH Corp ($IEHC) | 18.0% | 16.3% | 20.2% | 28.2% | 13.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Corning Incorporated ($GLW) | 12.0% | 17.8% | 19.9% | 17.2% | 12.2% |
| Dolby Laboratories ($DLB) | 9.8% | 9.2% | 6.9% | 7.8% | 5.7% |
| Rogers Corporation ($ROG) | 2.8% | 3.3% | 5.4% | 5.7% | 5.0% |
| Vishay Intertechnology, Inc. ($VSH) | 5.8% | 6.6% | 7.6% | 5.9% | 4.9% |
| Belden Inc ($BDC) | 2.3% | 2.7% | 3.8% | 5.2% | 4.8% |
| |
|---|
| Median (12 companies) | 3.4% | 5.1% | 4.1% | 5.0% | 4.0% |
|---|
| IEH Corp ($IEHC) | 2.6% | 3.0% | 1.6% | 3.0% | 3.0% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Amphenol Corporation ($APH) | 18.3% | 19.2% | 21.1% | 19.4% | 18.0% |
| CPS Technologies Corp. ($CPSH) | -10.8% | -19.4% | -11.9% | -9.3% | 13.8% |
| Vishay Intertechnology, Inc. ($VSH) | 9.8% | 18.4% | 27.8% | 13.2% | 9.9% |
| Dolby Laboratories ($DLB) | 12.2% | 12.0% | 8.4% | 11.4% | 9.6% |
| Littelfuse, Inc. ($LFUS) | 11.7% | 15.8% | 12.1% | 8.5% | 6.9% |
| |
|---|
| Median (12 companies) | 4.7% | 6.0% | 7.8% | 7.9% | 6.4% |
|---|
| IEH Corp ($IEHC) | 24.2% | 19.2% | 26.1% | 36.6% | 12.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Belden Inc ($BDC) | 2.1x | 2.6x | 2.3x | 3.1x | 4.6x |
| Corning Incorporated ($GLW) | -0.5x | 0.3x | 1.3x | 2.1x | 2.6x |
| Amphenol Corporation ($APH) | 1.4x | 1.1x | 1.2x | 1.4x | 1.1x |
| Bel Fuse Inc. ($BELFA) | - | 1.4x | 1.3x | 3.7x | 1.1x |
| Knowles Corporation ($KN) | 2.0x | 1.0x | 0.7x | 0.9x | 0.6x |
| |
|---|
| Median (11 companies) | -0.4x | -0.0x | 0.7x | 0.9x | 0.1x |
|---|
| IEH Corp ($IEHC) | -0.5x | -0.4x | -0.3x | -0.9x | -1.7x |
