MTS Systems Corporation reports 271% EBITDA decline in 2020 and 7.2% Revenue decline
12/15/2020 • About MTS Systems Corporation (
$MTSC) • By InTwits
MTS Systems Corporation reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: -24.2% in FY2020, 13.2% in FY2019, 12.8% in FY2018, 11.5% in FY2017, 10.1% in FY2016
- MTS Systems Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $12m in FY2020, $12m in FY2019, $20m in FY2018, $26m in FY2017, $6m in FY2016
- The company has unprofitable business model: ROIC is -26.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 7.2%. Annual revenue decline showed slowdown in FY20Q4 - revenue decreased on 4.0%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 37.4 pp from 13.2% to -24.2% in FY2020. During the last 5 years EBITDA Margin topped in FY2019 at 13.2%.
Gross Margin decreased on 2.0 pp from 36.9% to 34.8% in FY2020. During FY2016-FY2020 Gross Margin topped in FY2018 at 39.3% and was declining since that time. SG&A as a % of Revenue increased slightly on 1.7 pp from 24.5% to 26.1% in FY2020.
Net Income margin dropped on 37.7 pp from 4.8% to -32.8% in FY2020.
Investments (CAPEX, working capital and M&A)
MTS Systems Corporation's CAPEX/Revenue was 2.9% in FY2020. MTS Systems Corporation's CAPEX/Revenue increased slightly on 0.62 pp from 2.3% in FY2017 to 2.9% in FY2020. Average CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at negative ROIC (-26.2%) and ROE (-77.2%). ROIC dropped on 34.3 pp from 8.1% to -26.2% in FY2020. ROE dropped on 86.1 pp from 9.0% to -77.2% in FY2020.
Leverage (Debt)
Debt level is -1.9x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 3.9x from 3.9x to in FY2020. Debt jumped on 14.0% while cash surged on 53.5%.
MTS Systems Corporation has no short term refinancing risk: cash is higher than short term debt (207.5%).
Management team
Brian T Ross is a the company's CFO. Brian T Ross has spent 3 years at the company.
Financial and operational results
FY ended 10/03/2020
MTS Systems Corporation ($MTSC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 650.1 | 788.0 | 778.0 | 892.5 | 828.6 | -7.2% |
| Gross Profit | 231.4 | 302.3 | 305.5 | 328.9 | 288.4 | -12.3% |
| SG&A | 164.3 | 212.5 | 205.6 | 218.3 | 216.4 | -0.9% |
| EBITDA | 65.8 | 90.4 | 99.7 | 117.7 | -200.8 | -270.6% |
| Net Income | 27.5 | 25.1 | 61.3 | 43.1 | -272.1 | -731.7% |
Balance Sheet
|
|---|
| Cash | 84.8 | 108.7 | 71.8 | 57.9 | 88.9 | 53.5% |
| Short Term Debt | 9.9 | 39.1 | 32.7 | 28.0 | 42.8 | 53.2% |
| Long Term Debt | 455.0 | 418.5 | 355.6 | 484.6 | 541.7 | 11.8% |
Cash flow
|
|---|
| Capex | 20.8 | 17.8 | 12.3 | 30.5 | 23.9 | -21.7% |
Ratios
|
|---|
| Revenue growth | 15.3% | 21.2% | -1.3% | 14.7% | -7.2% | |
| EBITDA growth | -20.3% | 37.2% | 10.3% | 18.1% | -270.6% | |
|
|---|
| Gross Margin | 35.6% | 38.4% | 39.3% | 36.9% | 34.8% | -2.0% |
| EBITDA Margin | 10.1% | 11.5% | 12.8% | 13.2% | -24.2% | -37.4% |
| SG&A, % of revenue | 25.3% | 27.0% | 26.4% | 24.5% | 26.1% | 1.7% |
| Net Income Margin | 4.2% | 3.2% | 7.9% | 4.8% | -32.8% | -37.7% |
| CAPEX, % of revenue | 3.2% | 2.3% | 1.6% | 3.4% | 2.9% | -0.5% |
|
|---|
| ROIC | 6.7% | 5.7% | 6.9% | 8.1% | -26.2% | -34.3% |
| ROE | 8.3% | 6.0% | 13.5% | 9.0% | -77.2% | -86.1% |
| Net Debt/EBITDA | 5.8x | 3.9x | 3.2x | 3.9x | |
MTS Systems Corporation ($MTSC) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 206 | 211 | 196 | 215 | | 1.3% | -9.3% | -15.5% | -4.0% |
| EBITDA | 26 | 21 | 24 | -271 | | -4.9% | -38.7% | -26.1% | -1,212.1% |
| Net Income | 5 | -1 | 4 | -281 | | -49.5% | -107.6% | -67.7% | -5,921.9% |
Balance Sheet
|
|---|
| Cash | 64 | 67 | 65 | 89 | | -9.0% | -10.2% | -14.1% | 53.5% |
| Short Term Debt | 57 | 35 | 30 | 43 | | 88.7% | 24.0% | 5.3% | 53.2% |
| Long Term Debt | 483 | 566 | 565 | 542 | | 10.9% | 29.7% | 30.2% | 11.8% |
Ratios
|
|---|
| Gross Margin | 37.2% | 33.7% | 33.4% | 34.9% | | -1.3% | -3.8% | -3.3% | 0.0% |
| EBITDA Margin | 12.4% | 9.8% | 12.3% | -126.1% | | -0.8% | -4.7% | -1.8% | -137.0% |
| Net Income Margin | 2.6% | -0.5% | 2.2% | -130.5% | | -2.6% | -6.6% | -3.6% | -132.7% |
Peers in Electronic Equipment & Instruments
Below we provide MTS Systems Corporation benchmarking against other companies in Electronic Equipment & Instruments 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 |
|---|
| Intellicheck, Inc. ($IDN) | - | -6.3% | 23.2% | 72.9% | 40.1% |
| nLIGHT, Inc. ($LASR) | - | 36.8% | 38.1% | -7.7% | 26.1% |
| Luna Innovations Incorporated ($LUNA) | - | -21.0% | 29.7% | 64.3% | 17.3% |
| PAR Technology Corporation ($PAR) | - | 1.3% | -13.5% | -7.0% | 14.2% |
| Cognex Corporation ($CGNX) | - | 44.7% | 5.3% | -10.0% | 11.8% |
| |
|---|
| Median (26 companies) | -3.8% | 4.1% | 11.6% | 4.4% | -2.7% |
|---|
| MTS Systems Corporation ($MTSC) | - | 21.2% | -1.3% | 14.7% | -7.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | 80.0% | 85.5% | 91.3% | 87.0% | 86.7% |
| Cognex Corporation ($CGNX) | 75.2% | 75.6% | 74.4% | 73.8% | 74.5% |
| National Instruments Corporation ($NATI) | 74.5% | 74.5% | 75.4% | 75.1% | 71.2% |
| Coda Octopus Group, Inc. ($CODA) | - | 66.4% | - | 65.6% | 63.5% |
| Applied DNA Sciences Inc ($APDN) | 82.2% | 77.3% | 69.1% | 83.7% | 62.7% |
| |
|---|
| Median (26 companies) | 40.7% | 41.7% | 40.9% | 43.2% | 44.0% |
|---|
| MTS Systems Corporation ($MTSC) | 35.6% | 38.4% | 39.3% | 36.9% | 34.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Keysight Technologies Inc. ($KEYS) | 18.5% | 14.6% | -0.9% | 23.7% | 27.0% |
| Cognex Corporation ($CGNX) | 31.9% | 36.0% | 30.1% | 24.0% | 25.3% |
| National Instruments Corporation ($NATI) | 15.7% | 16.9% | 17.9% | 20.0% | 22.3% |
| FLIR Systems, Inc. ($FLIR) | 21.3% | 20.0% | 21.7% | 20.6% | 22.0% |
| Badger Meter, Inc. ($BMI) | 18.6% | 20.1% | 18.7% | 21.1% | 21.2% |
| |
|---|
| Median (26 companies) | 2.9% | 4.1% | 3.3% | 12.4% | 12.0% |
|---|
| MTS Systems Corporation ($MTSC) | 10.1% | 11.5% | 12.8% | 13.2% | -24.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Know Labs Inc ($KNWN) | 0.4% | 0.0% | 2.3% | 4.4% | 57.5% |
| Applied DNA Sciences Inc ($APDN) | 16.1% | 3.1% | 6.8% | 1.3% | 55.1% |
| nLIGHT, Inc. ($LASR) | 4.0% | 4.0% | 6.1% | 7.7% | 10.9% |
| Vishay Precision Group, Inc. ($VPG) | 4.6% | 2.7% | 4.8% | 3.9% | 8.5% |
| LightPath Technologies, Inc. ($LPTH) | 6.5% | 7.8% | 7.7% | 5.7% | 7.0% |
| |
|---|
| Median (25 companies) | 2.0% | 1.6% | 2.3% | 1.9% | 2.1% |
|---|
| MTS Systems Corporation ($MTSC) | 3.2% | 2.3% | 1.6% | 3.4% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zebra Technologies Corporation ($ZBRA) | 2.2% | 10.2% | 20.8% | 23.2% | 20.0% |
| Badger Meter, Inc. ($BMI) | 16.9% | 18.2% | 17.6% | 18.7% | 18.5% |
| Keysight Technologies Inc. ($KEYS) | 16.9% | 6.8% | -8.0% | 15.6% | 15.1% |
| National Instruments Corporation ($NATI) | 10.3% | 12.5% | 14.2% | 13.9% | 14.8% |
| Cognex Corporation ($CGNX) | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% |
| |
|---|
| Median (26 companies) | 2.1% | 2.6% | 0.9% | 7.8% | 5.7% |
|---|
| MTS Systems Corporation ($MTSC) | 6.7% | 5.7% | 6.9% | 8.1% | -26.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Identiv, Inc. ($INVE) | - | - | 2.1x | 1.9x | 9.0x |
| Itron, Inc. ($ITRI) | 1.0x | 2.0x | 12.3x | 3.2x | 7.3x |
| Track Group Inc ($TRCK) | - | - | 12.2x | 5.2x | 3.5x |
| Trimble Inc. ($TRMB) | 1.1x | 1.3x | 3.4x | 2.9x | 2.2x |
| Luna Innovations Incorporated ($LUNA) | -6.9x | -108.1x | -19.9x | -2.9x | 1.8x |
| |
|---|
| Median (17 companies) | -0.9x | -0.9x | -1.0x | 0.2x | 0.4x |
|---|
