Cabot Microelectronics Corporation reports 264% Net Income growth in 2020 and 11.4 pp EBITDA Margin growth from 20.1% to 31.6%
11/11/2020 • About Cabot Microelectronics Corporation (
$CCMP) • By InTwits
Cabot Microelectronics Corporation reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Cabot Microelectronics Corporation is a fast growth stock: FY2020 revenue growth was 7.6%, 5 year revenue CAGR was 21.9% at FY2020 ROIC 10.3%
- Cabot Microelectronics Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.7%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $126m in FY2020, $56m in FY2019, $21m in FY2018, $21m in FY2017, $18m in FY2016
- The company has business model with average profitability: ROIC is 10.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.0x while industry average is -1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 7.6%. Revenue growth showed slowdown in FY20Q4 - it was -1.6% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 11.4 pp from 20.1% to 31.6% in FY2020.
Gross Margin increased slightly on 1.1 pp from 42.7% to 43.8% in FY2020. SG&A as a % of Revenue decreased slightly on 1.1 pp from 20.5% to 19.4% in FY2020.
Net Income margin increased on 9.0 pp from 3.8% to 12.8% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 11.3% in FY2020. The company showed CAPEX/Revenue growth of 7.1 pp from 4.2% in FY2017 to 11.3% in FY2020. For the last three years the average CAPEX/Revenue was 6.8%.
Return on investment
The company operates at good ROE (13.9%) while ROIC is low (10.3%). ROIC increased on 2.3 pp from 8.0% to 10.3% in FY2020. ROE increased on 9.1 pp from 4.8% to 13.9% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 2.8x. Net Debt / EBITDA dropped on 1.6x from 3.6x to 2.0x in FY2020. Debt increased slightly on 1.9% while cash jumped on 36.5%.
Cabot Microelectronics Corporation has no short term refinancing risk: cash is higher than short term debt (786.2%).
Valuation and dividends
Cabot Microelectronics Corporation's trades at EV/EBITDA 13.7x and P/E 28.8x.
Management team
H Li "David" is a the company's CEO. H Li "David" has spent 6 years with the company. Scott D Beamer is a Cabot Microelectronics Corporation's CFO. Scott D Beamer has spent 3 years at the company.
Financial and operational results
FY ended 09/30/2020
Cabot Microelectronics Corporation ($CCMP) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 430 | 507 | 590 | 1,038 | 1,116 | 7.6% |
| Gross Profit | 210 | 254 | 314 | 443 | 489 | 10.4% |
| SG&A | 77 | 86 | 102 | 213 | 217 | 1.9% |
| EBITDA | 101 | 138 | 186 | 209 | 353 | 68.6% |
| EBIT | 75 | 112 | 160 | | | |
| Interest expence | 5 | | | | | |
| Tax | 11 | 22 | 52 | | | |
| Net Income | 60 | 87 | 110 | 39 | 143 | 264.2% |
| Stock Based Compensation | 14 | 13 | 19 | | | |
Balance Sheet
|
|---|
| Cash | 287 | 398 | 353 | 188 | 257 | 36.5% |
| Accounts Receivable | 63 | 65 | 76 | | | |
| Inventory | 72 | 72 | 72 | | | |
| Accounts Payable | 17 | 18 | 18 | | | |
| Short Term Debt | 8 | 11 | 0 | 23 | 33 | 42.4% |
| Long Term Debt | 147 | 133 | 0 | 928 | 937 | 0.9% |
Cash flow
|
|---|
| Capex | 18 | 21 | 21 | 56 | 126 | 124.8% |
| Dividends | 9 | 19 | 31 | | | |
| Acquisitions | 127 | | | | | |
Ratios
|
|---|
| Revenue growth | 3.9% | 17.8% | 16.4% | 75.8% | 7.6% | |
| EBITDA growth | 7.2% | 37.2% | 34.9% | 12.4% | 68.6% | |
|
|---|
| Gross Margin | 48.8% | 50.1% | 53.2% | 42.7% | 43.8% | 1.1% |
| EBITDA Margin | 23.4% | 27.2% | 31.5% | 20.1% | 31.6% | 11.4% |
| EBIT Margin | 17.3% | 22.1% | 27.1% | | |
| SG&A, % of revenue | 17.9% | 17.1% | 17.3% | 20.5% | 19.4% | -1.1% |
| SBC, % of revenue | 3.2% | 2.6% | 3.1% | | |
| Net Income Margin | 13.9% | 17.1% | 18.6% | 3.8% | 12.8% | 9.0% |
| CAPEX, % of revenue | 4.1% | 4.2% | 3.6% | 5.4% | 11.3% | 5.9% |
|
|---|
| ROIC | 12.1% | 16.3% | 22.7% | 8.0% | 10.3% | 2.3% |
| ROE | 12.8% | 15.9% | 17.4% | 4.8% | 13.9% | 9.1% |
| Net Debt/EBITDA | -1.3x | -1.8x | -1.9x | 3.6x | 2.0x | -1.6x |
| Interest expence / Average debt | 3.1% | | | | | |
People
|
|---|
| Insider ownership | 1.3% | 1.3% | 1.3% | | | |
| Employees | 1,145 | 1,150 | 1,150 | | | |
| Revenue/Employee, th. $ | 376 | 441 | 513 | | | |
Cabot Microelectronics Corporation ($CCMP) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 283 | 284 | 275 | 274 | | 27.7% | 7.1% | 1.0% | -1.6% |
| EBITDA | 95 | 86 | 89 | 80 | | 133.5% | 8.9% | 13.0% | 666.3% |
| Net Income | 39 | 33 | 35 | 37 | | 186.8% | 21.2% | 82.9% | - |
Balance Sheet
|
|---|
| Cash | 194 | 341 | 355 | 257 | | -7.0% | 77.2% | 110.3% | 36.5% |
| Short Term Debt | 32 | 183 | 181 | 33 | | 201.7% | 1,272.7% | 1,260.9% | 42.4% |
| Long Term Debt | 952 | 940 | 913 | 937 | | -8.0% | -4.8% | -1.9% | 0.9% |
Ratios
|
|---|
| Gross Margin | 45.4% | 42.6% | 44.3% | 42.7% | | 0.7% | -0.7% | 1.9% | 2.1% |
| EBITDA Margin | 33.6% | 30.3% | 32.4% | 29.3% | | 15.2% | 0.5% | 3.4% | 25.6% |
| Net Income Margin | 13.6% | 11.6% | 12.6% | 13.4% | | 7.6% | 1.4% | 5.6% | 20.7% |
Peers in Semiconductor Equipment
Below we provide Cabot Microelectronics Corporation benchmarking against other companies in Semiconductor 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | - | 44.0% | 8.7% | -31.0% | 218.5% |
| DAQO New Energy Corp. ($DQ) | - | 41.1% | -6.7% | 16.0% | 93.0% |
| Advanced Energy Industries, Inc. ($AEIS) | - | 38.7% | 7.1% | 9.7% | 79.5% |
| Ichor Holdings ($ICHR) | - | 61.7% | 25.6% | -24.6% | 47.3% |
| ACM Research, Inc. ($ACMR) | - | 33.4% | 104.5% | 44.1% | 45.7% |
| |
|---|
| Median (27 companies) | 5.0% | 24.7% | 14.0% | -2.8% | 16.9% |
|---|
| Cabot Microelectronics Corporation ($CCMP) | - | 17.8% | 16.4% | 75.8% | 7.6% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 99.8% | 98.3% | 96.7% | 97.0% | 91.2% |
| PDF Solutions, Inc. ($PDFS) | 58.6% | 53.4% | 50.1% | 60.9% | 58.2% |
| Teradyne, Inc. ($TER) | 54.7% | 57.2% | 58.1% | 58.4% | 57.2% |
| Nova Measuring Instruments Ltd. ($NVMI) | 45.9% | 59.1% | 57.8% | 54.2% | 56.8% |
| Kulicke and Soffa Industries, Inc. ($KLIC) | 45.7% | 47.2% | 46.1% | 47.1% | 47.8% |
| |
|---|
| Median (27 companies) | 37.3% | 43.2% | 40.2% | 40.3% | 42.4% |
|---|
| Cabot Microelectronics Corporation ($CCMP) | 48.8% | 50.1% | 53.2% | 42.7% | 43.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 47.6% | 23.4% | 34.3% | 16.4% | 40.8% |
| DAQO New Energy Corp. ($DQ) | 43.3% | 49.1% | 36.1% | 27.1% | 38.0% |
| Teradyne, Inc. ($TER) | 3.4% | 29.6% | 27.9% | 30.3% | 33.8% |
| Entegris, Inc. ($ENTG) | 21.7% | 25.6% | 27.1% | 24.7% | 29.3% |
| Nova Measuring Instruments Ltd. ($NVMI) | 10.2% | 28.8% | 27.1% | 22.1% | 25.9% |
| |
|---|
| Median (25 companies) | 11.4% | 16.0% | 16.2% | 11.9% | 15.4% |
|---|
| Cabot Microelectronics Corporation ($CCMP) | 23.4% | 27.2% | 31.5% | 20.1% | 31.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| DAQO New Energy Corp. ($DQ) | 29.5% | 19.8% | 47.4% | 79.7% | 17.5% |
| Photronics, Inc. ($PLAB) | 10.4% | 20.4% | 17.3% | 32.4% | 11.6% |
| Amkor Technology, Inc. ($AMKR) | 16.5% | 13.1% | 12.7% | 11.7% | 10.9% |
| ACM Research, Inc. ($ACMR) | 2.9% | 1.8% | 2.5% | 0.9% | 9.5% |
| SolarEdge Technologies, Inc. ($SEDG) | 4.3% | 3.5% | 4.1% | 5.1% | 8.7% |
| |
|---|
| Median (24 companies) | 2.2% | 2.8% | 2.9% | 3.2% | 3.3% |
|---|
| Cabot Microelectronics Corporation ($CCMP) | 4.1% | 4.2% | 3.6% | 5.4% | 11.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Teradyne, Inc. ($TER) | -2.9% | 23.8% | 22.6% | 29.2% | 40.3% |
| DAQO New Energy Corp. ($DQ) | 12.7% | 23.2% | 12.2% | 5.6% | 18.5% |
| Entegris, Inc. ($ENTG) | 10.3% | 14.7% | 15.4% | 11.3% | 16.4% |
| Advanced Energy Industries, Inc. ($AEIS) | 41.2% | 45.7% | 31.3% | 6.9% | 15.5% |
| Ultra Clean Holdings, Inc. ($UCTT) | 7.8% | 27.5% | 10.5% | 4.1% | 14.8% |
| |
|---|
| Median (27 companies) | 6.9% | 12.2% | 11.2% | 5.5% | 10.4% |
|---|
| Cabot Microelectronics Corporation ($CCMP) | 12.1% | 16.3% | 22.7% | 8.0% | 10.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Veeco Instruments Inc. ($VECO) | - | - | - | 577.2x | 3.4x |
| Cohu, Inc. ($COHU) | -6.0x | -2.7x | - | 10.1x | 2.9x |
| Xperi Corporation ($XPER) | 4.2x | 5.0x | 2.6x | 6.1x | 2.1x |
| Entegris, Inc. ($ENTG) | 0.7x | 0.1x | 1.1x | 1.6x | 1.0x |
| MKS Instruments, Inc. ($MKSI) | 1.7x | 0.1x | -0.5x | 1.5x | 0.8x |
| |
|---|
| Median (23 companies) | -1.2x | -0.7x | -1.0x | -0.4x | -0.4x |
|---|
| Cabot Microelectronics Corporation ($CCMP) | -1.3x | -1.8x | -1.9x | 3.6x | 2.0x |
