Track Group Inc reports 36.3% EBITDA growth in 2020 and almost no change in Revenue of 33.9
12/23/2020 • About Track Group Inc (
$TRCK) • By InTwits
Track Group Inc reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 21.0% in FY2020 vs. 15.4% in FY2019 vs. -3.5% in FY2016
- EBITDA Margin is quite volatile: 21.0% in FY2020, 15.4% in FY2019, 7.6% in FY2018, -1.4% in FY2017, -3.5% in FY2016
- Track Group Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 7.7%
- CAPEX is quite volatile: $2m in FY2020, $0m in FY2019, $1m in FY2018, $1m in FY2017, $0m in FY2016
- The company has business model with low profitability: ROIC is 8.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.5x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Track Group Inc's Revenue showed almost no change in FY2020. Annual revenue decline showed slowdown in FY20Q4 - revenue increased slightly on 0.89%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.7 pp from 15.4% to 21.0% in FY2020. EBITDA Margin followed a growing trend at 6.6 pp per annum in the last 5 years.
Gross Margin decreased slightly on 0.86 pp from 55.9% to 55.0% in FY2020. SG&A as a % of Revenue decreased on 5.3 pp from 42.6% to 37.3% in FY2020. SG&A as a % of Revenue stuck to a declining trend at -5.7 pp per annum in FY2016-FY2020.
Net Income margin increased on 7.2 pp from -7.5% to -0.35% in FY2020. Net Income margin stuck to a growing trend at 7.0 pp per annum in FY2016-FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Track Group Inc had CAPEX/Revenue of 4.2%. CAPEX/Revenue decreased on 2.3 pp from 6.5% in FY2017 to 4.2% in FY2020. It's average level of CAPEX/Revenue for the last three years was 5.1%.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.5x and Debt / EBITDA is 4.5x. Net Debt / EBITDA dropped on 1.7x from 5.2x to 3.5x in FY2020. Debt decreased on 6.3% while cash decreased slightly on 2.0%.
Track Group Inc has short term refinancing risk: cash is only 21.7% of short term debt.
Financial and operational results
FY ended 09/30/2020
Track Group Inc ($TRCK) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 27.194 | 29.727 | 30.570 | 34.019 | 33.875 | -0.4% |
| Gross Profit | 16.661 | 15.601 | 17.202 | 19.017 | 18.646 | -2.0% |
| SG&A | 16.982 | 14.528 | 15.879 | 14.501 | 12.640 | -12.8% |
| EBITDA | -0.939 | -0.411 | 2.326 | 5.226 | 7.122 | 36.3% |
| Net Income | -8.496 | -4.726 | -5.428 | -2.564 | -0.119 | |
Balance Sheet
|
|---|
| Cash | 1.770 | 2.027 | 5.447 | 6.897 | 6.762 | -2.0% |
| Short Term Debt | 3.246 | 30.271 | 30.438 | 33.828 | 31.126 | -8.0% |
| Long Term Debt | 30.346 | 3.481 | 3.429 | 0.000 | 0.583 | |
Cash flow
|
|---|
| Capex | 2.966 | 1.924 | 1.460 | 2.098 | 1.428 | -31.9% |
Ratios
|
|---|
| Revenue growth | 30.8% | 9.3% | 2.8% | 11.3% | -0.4% | |
| EBITDA growth | -75.5% | -56.2% | -665.3% | 124.7% | 36.3% | |
|
|---|
| Gross Margin | 61.3% | 52.5% | 56.3% | 55.9% | 55.0% | -0.9% |
| EBITDA Margin | -3.5% | -1.4% | 7.6% | 15.4% | 21.0% | 5.7% |
| SG&A, % of revenue | 62.4% | 48.9% | 51.9% | 42.6% | 37.3% | -5.3% |
| Net Income Margin | -31.2% | -15.9% | -17.8% | -7.5% | -0.4% | 7.2% |
| CAPEX, % of revenue | 10.9% | 6.5% | 4.8% | 6.2% | 4.2% | -2.0% |
|
|---|
| ROIC | -12.0% | -11.1% | -4.0% | 3.1% | 8.1% | 5.0% |
| ROE | -73.7% | -64.4% | -142.6% | | | |
| Net Debt/EBITDA | | | 12.2x | 5.2x | 3.5x | -1.7x |
Track Group Inc ($TRCK) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 8 | 8 | 8 | 9 | | 2.5% | 0.5% | -5.3% | 0.9% |
| EBITDA | 1 | 1 | 2 | 2 | | 39.3% | 59.5% | 46.1% | 18.7% |
| Net Income | -0 | -2 | 0 | 1 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 8 | 8 | 9 | 7 | | 44.8% | 35.7% | 31.3% | -2.0% |
| Short Term Debt | 34 | 3 | 4 | 31 | | 11.1% | 8,914.6% | -87.0% | -8.0% |
| Long Term Debt | 0 | 30 | 31 | 1 | | -90.4% | -10.1% | 817.5% | - |
Ratios
|
|---|
| Gross Margin | 55.4% | 54.6% | 54.5% | 55.7% | | -1.0% | -1.0% | 0.9% | -2.5% |
| EBITDA Margin | 15.5% | 15.3% | 28.6% | 24.9% | | 4.1% | 5.6% | 10.1% | 3.7% |
| Net Income Margin | -2.8% | -21.2% | 4.9% | 16.1% | | 18.4% | -17.9% | 5.7% | 21.7% |
Peers in Electronic Equipment & Instruments
Below we provide Track Group Inc 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 ($CGNX) | - | 44.7% | 5.3% | -10.0% | 11.8% |
| |
|---|
| Median (26 companies) | -3.8% | 4.1% | 11.6% | 4.4% | -3.5% |
|---|
| Track Group Inc ($TRCK) | - | 9.3% | 2.8% | 11.3% | -0.4% |
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 ($APDN) | 82.2% | 77.3% | 69.1% | 83.7% | 62.7% |
| |
|---|
| Median (26 companies) | 39.4% | 41.0% | 40.4% | 42.2% | 42.9% |
|---|
| Track Group Inc ($TRCK) | 61.3% | 52.5% | 56.3% | 55.9% | 55.0% |
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. ($BMI) | 18.6% | 20.1% | 18.7% | 21.1% | 21.2% |
| |
|---|
| Median (26 companies) | 3.2% | 5.2% | 3.3% | 12.0% | 8.7% |
|---|
| Track Group Inc ($TRCK) | -3.5% | -1.4% | 7.6% | 15.4% | 21.0% |
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. ($LPTH) | 6.5% | 7.8% | 7.7% | 5.7% | 7.0% |
| |
|---|
| Median (25 companies) | 2.0% | 1.6% | 2.2% | 1.9% | 2.1% |
|---|
| Track Group Inc ($TRCK) | 10.9% | 6.5% | 4.8% | 6.2% | 4.2% |
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 ($CGNX) | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% |
| |
|---|
| Median (26 companies) | 2.2% | 3.7% | 1.3% | 7.9% | 3.4% |
|---|
| Track Group Inc ($TRCK) | -12.0% | -11.1% | -4.0% | 3.1% | 8.1% |
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 |
| 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 |
| Zebra Technologies Corporation ($ZBRA) | 6.5x | 3.7x | 2.0x | 1.5x | 1.5x |
| |
|---|
| Median (16 companies) | -0.9x | -0.8x | -1.0x | 0.2x | 0.3x |
|---|
| Track Group Inc ($TRCK) | - | - | 12.2x | 5.2x | 3.5x |
