RF Industries, Ltd. Net Income dropped on 102% and Revenue dropped on 22.2%
12/17/2020 • About RF Industries, Ltd. (
$RFIL) • By InTwits
RF Industries, Ltd. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 3.7% in FY2020, 9.1% in FY2019, 15.9% in FY2018, 3.1% in FY2017, -12.1% in FY2016
- RF Industries, Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has unprofitable business model: ROIC is -1.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
RF Industries, Ltd.'s Revenue dropped on 22.2%. Revenue decline showed acceleration in FY20Q4 - it was 31.2% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.3 pp from 9.1% to 3.7% in FY2020. During the last 5 years EBITDA Margin topped in FY2018 at 15.9% and was declining since that time.
Gross Margin decreased slightly on 1.4 pp from 28.3% to 26.9% in FY2020. During the last 5 years Gross Margin topped in FY2018 at 34.1% and was declining since that time. SG&A as a % of Revenue increased on 5.6 pp from 17.6% to 23.2% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue bottomed in FY2018 at 16.3% and was growing since that time.
Net Income margin decreased on 6.6 pp from 6.4% to -0.19% in FY2020. During the last 5 years Net Income margin topped in FY2018 at 11.6% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 0.55%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 0.68%.
Return on investment
The company operates at negative ROIC (-1.0%) and ROE (-0.3%). ROIC dropped on 15.9 pp from 14.8% to -1.0% in FY2020. ROE dropped on 12.1 pp from 11.9% to -0.25% in FY2020. During FY2016-FY2020 ROIC topped in FY2018 at 29.2% and was declining since that time. During the last 5 years ROE topped in FY2018 at 23.8% and was declining since that time.
Leverage (Debt)
Debt level is -7.1x Net Debt / EBITDA and 2.7x Debt / EBITDA. Debt surged while cash jumped on 26.0%.
RF Industries, Ltd. has no short term refinancing risk: cash is higher than short term debt (614.0%).
Management team
The company's CEO is Robert D Dawson. Robert D Dawson has 3 years tenure with the company.
Financial and operational results
FY ended 10/31/2020
RF Industries, Ltd. ($RFIL) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 30.241 | 22.983 | 50.196 | 55.325 | 43.044 | -22.2% |
| Gross Profit | 8.463 | 6.987 | 17.100 | 15.637 | 11.566 | -26.0% |
| SG&A | 9.560 | 5.960 | 8.173 | 9.710 | 9.980 | 2.8% |
| EBITDA | -3.652 | 0.709 | 7.960 | 5.022 | 1.612 | -67.9% |
| Net Income | -4.089 | 0.382 | 5.846 | 3.521 | -0.081 | -102.3% |
Balance Sheet
|
|---|
| Cash | 5.258 | 5.208 | 16.334 | 12.540 | 15.797 | 26.0% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 2.573 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 1.724 | |
Cash flow
|
|---|
| Capex | 0.384 | 0.171 | 0.266 | 0.538 | 0.235 | -56.3% |
Ratios
|
|---|
| Revenue growth | -7.8% | -24.0% | 118.4% | 10.2% | -22.2% | |
| EBITDA growth | -265.0% | -119.4% | 1,022.7% | -36.9% | -67.9% | |
|
|---|
| Gross Margin | 28.0% | 30.4% | 34.1% | 28.3% | 26.9% | -1.4% |
| EBITDA Margin | -12.1% | 3.1% | 15.9% | 9.1% | 3.7% | -5.3% |
| SG&A, % of revenue | 31.6% | 25.9% | 16.3% | 17.6% | 23.2% | 5.6% |
| Net Income Margin | -13.5% | 1.7% | 11.6% | 6.4% | -0.2% | -6.6% |
| CAPEX, % of revenue | 1.3% | 0.7% | 0.5% | 1.0% | 0.5% | -0.4% |
|
|---|
| ROIC | -18.7% | 0.9% | 29.2% | 14.8% | -1.0% | -15.9% |
| ROE | -17.1% | 1.8% | 23.8% | 11.9% | -0.3% | -12.1% |
| Net Debt/EBITDA | | -7.3x | -2.1x | -2.5x | -7.1x | -4.6x |
RF Industries, Ltd. ($RFIL) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 12 | 10 | 10 | 11 | | 16.6% | -23.7% | -38.5% | -31.2% |
| EBITDA | 1 | 0 | 0 | 1 | | -44.7% | -79.0% | -80.2% | -57.0% |
| Net Income | 0 | -0 | -0 | 0 | | -95.9% | -117.3% | -107.9% | -79.7% |
Balance Sheet
|
|---|
| Cash | 14 | 14 | 16 | 16 | | 2.7% | 1.6% | 17.4% | 26.0% |
| Short Term Debt | 0 | 0 | 1 | 3 | | - | - | - | - |
| Long Term Debt | 1 | 1 | 2 | 2 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 26.2% | 24.9% | 28.6% | 28.0% | | -3.3% | -5.2% | 1.1% | 1.4% |
| EBITDA Margin | 4.1% | 3.0% | 2.9% | 4.7% | | -4.6% | -8.0% | -6.2% | -2.9% |
| Net Income Margin | 0.2% | -1.8% | -0.9% | 1.5% | | -5.8% | -9.6% | -7.6% | -3.5% |
Peers in Electronic Manufacturing Services
Below you can find RF Industries, Ltd. benchmarking vs. other companies in Electronic Manufacturing Services 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Netlist Inc ($NLST) | - | 95.0% | -12.5% | -22.1% | 81.0% |
| IEC Electronics Corp. ($IEC) | - | -24.1% | 21.2% | 34.3% | 16.4% |
| eMagin Corporation ($EMAN) | - | 3.0% | 19.1% | 1.9% | 10.1% |
| Jabil Inc. ($JBL) | - | 3.9% | 15.9% | 14.4% | 7.8% |
| Plexus Corp. ($PLXS) | - | -1.1% | 13.7% | 10.1% | 7.1% |
| |
|---|
| Median (13 companies) | 4.6% | 3.0% | 7.1% | 1.9% | -1.3% |
|---|
| RF Industries, Ltd. ($RFIL) | - | -24.0% | 118.4% | 10.2% | -22.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Neonode Inc. ($NEON) | 86.9% | 77.1% | 89.2% | 89.7% | 82.0% |
| IPG Photonics Corporation ($IPGP) | 54.9% | 56.6% | 54.8% | 46.1% | 44.9% |
| CTS Corporation ($CTS) | 35.4% | 33.2% | 35.1% | 33.6% | 32.8% |
| TE Connectivity Ltd. ($TEL) | 33.7% | 34.3% | 33.9% | 32.7% | 30.7% |
| eMagin Corporation ($EMAN) | 30.1% | 23.3% | 15.2% | 25.2% | 21.6% |
| |
|---|
| Median (13 companies) | 16.7% | 13.8% | 12.1% | 13.8% | 14.3% |
|---|
| RF Industries, Ltd. ($RFIL) | 28.0% | 30.4% | 34.1% | 28.3% | 26.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.8% | 44.7% | 40.9% | 26.8% | 24.0% |
| CTS Corporation ($CTS) | 20.7% | 14.0% | 17.8% | 17.6% | 18.1% |
| TE Connectivity Ltd. ($TEL) | 20.9% | 20.4% | 21.4% | 19.8% | 11.1% |
| TTM Technologies, Inc. ($TTMI) | 14.0% | 14.6% | 13.5% | 15.8% | 9.7% |
| IEC Electronics Corp. ($IEC) | 7.4% | 3.8% | 4.3% | 6.6% | 7.5% |
| |
|---|
| Median (12 companies) | 5.4% | 5.0% | 4.7% | 5.8% | 5.9% |
|---|
| RF Industries, Ltd. ($RFIL) | -12.1% | 3.1% | 15.9% | 9.1% | 3.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| eMagin Corporation ($EMAN) | 6.7% | 6.2% | 8.8% | 4.2% | 8.5% |
| IPG Photonics Corporation ($IPGP) | 12.6% | 9.0% | 11.0% | 10.2% | 7.3% |
| TTM Technologies, Inc. ($TTMI) | 3.4% | 5.7% | 5.3% | 6.7% | 4.9% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 5.6% | 6.7% | 5.6% | 4.6% |
| Jabil Inc. ($JBL) | 5.0% | 3.8% | 4.7% | 4.0% | 3.6% |
| |
|---|
| Median (12 companies) | 2.8% | 3.4% | 2.5% | 1.6% | 3.5% |
|---|
| RF Industries, Ltd. ($RFIL) | 1.3% | 0.7% | 0.5% | 1.0% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IEC Electronics Corp. ($IEC) | 16.9% | 3.1% | 6.4% | 12.7% | 14.8% |
| Sanmina Corporation ($SANM) | 14.2% | 13.9% | 7.0% | 16.2% | 13.0% |
| Plexus Corp. ($PLXS) | 8.7% | 10.3% | 9.6% | 12.6% | 12.4% |
| Jabil Inc. ($JBL) | 12.3% | 9.3% | 12.5% | 16.1% | 10.8% |
| CTS Corporation ($CTS) | 18.1% | 9.8% | 14.8% | 11.8% | 9.2% |
| |
|---|
| Median (13 companies) | 6.7% | 5.7% | 6.4% | 10.2% | 7.3% |
|---|
| RF Industries, Ltd. ($RFIL) | -18.7% | 0.9% | 29.2% | 14.8% | -1.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SMTC Corporation ($SMTX) | 1.0x | - | 11.3x | 3.8x | 4.2x |
| TE Connectivity Ltd. ($TEL) | 1.4x | 1.3x | 1.1x | 1.1x | 2.7x |
| IEC Electronics Corp. ($IEC) | 2.0x | 5.6x | 4.9x | 3.6x | 2.1x |
| TTM Technologies, Inc. ($TTMI) | 2.2x | 1.5x | 3.2x | 3.3x | 2.0x |
| Jabil Inc. ($JBL) | 1.0x | 0.8x | 1.0x | 0.9x | 1.4x |
| |
|---|
| Median (10 companies) | 0.2x | 0.5x | 0.5x | 0.3x | 0.7x |
|---|
| RF Industries, Ltd. ($RFIL) | - | -7.3x | -2.1x | -2.5x | -7.1x |
