SCI Engineered Materials Inc reports 392% Net Income growth in 2020 and 3.3 pp EBITDA Margin growth from 7.3% to 10.6%
01/29/2021 • About SCI Engineered Materials Inc (
$SCIA) • By InTwits
SCI Engineered Materials Inc reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 10.6% in 2020, 7.3% in 2019, 12.2% in 2018, 7.6% in 2017, -3.8% in 2016
- SCI Engineered Materials Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 7.7%
- CAPEX is quite volatile: $0m in 2020, $0m in 2019, $0m in 2018, $0m in 2017, $0m in 2016
- The company has business model with low profitability: ROIC is 9.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 15.9%. Annual revenue decline showed slowdown in 20Q4 - revenue surged on 14.2%. During the last 5 years Revenue growth topped in 2018 at 67.0% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.3 pp from 7.3% to 10.6% in 2020.
Gross Margin increased on 3.1 pp from 17.1% to 20.2% in 2020. SG&A as a % of Revenue increased slightly on 0.67 pp from 11.7% to 12.3% in 2020. SG&A as a % of Revenue declined at -3.3 pp per annum in the last 5 years.
Net Income margin surged on 11.4 pp from 2.4% to 13.8% in 2020. Net Income margin followed a growing trend at 5.6 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 0.72%. CAPEX/Revenue decreased slightly on 0.81 pp from 1.5% in 2017 to 0.72% in 2020. It's average CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at good ROE (34.9%) while ROIC is low (9.4%). ROIC increased slightly on 1.3 pp from 8.1% to 9.4% in 2020. ROE surged on 26.2 pp from 8.7% to 34.9% in 2020.
Leverage (Debt)
Debt level is -1.6x Net Debt / EBITDA and 1.0x Debt / EBITDA. Debt surged on 37.9% while cash surged on 59.6%.
SCI Engineered Materials Inc has no short term refinancing risk: cash is higher than short term debt (583.7%).
Valuation and dividends
The company's trades at EV/EBITDA 5.7x and P/E 5.6x.
Financial and operational results
FY ended 12/31/2020
SCI Engineered Materials Inc ($SCIA) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 5.466 | 6.801 | 11.362 | 12.950 | 10.896 | -15.9% |
| Gross Profit | 1.084 | 1.578 | 2.905 | 2.209 | 2.198 | -0.5% |
| SG&A | 1.426 | 1.198 | 1.618 | 1.511 | 1.344 | -11.1% |
| EBITDA | -0.206 | 0.519 | 1.388 | 0.950 | 1.157 | 21.8% |
| Net Income | -0.706 | 0.006 | 0.908 | 0.305 | 1.502 | 391.8% |
Balance Sheet
|
|---|
| Cash | 0.730 | 0.921 | 1.803 | 1.828 | 2.918 | 59.6% |
| Short Term Debt | 0.294 | 0.351 | 0.326 | 0.296 | 0.500 | 68.9% |
| Long Term Debt | 0.447 | 0.182 | 0.148 | 0.517 | 0.621 | 20.1% |
Cash flow
|
|---|
| Capex | 0.090 | 0.104 | 0.381 | 0.381 | 0.079 | -79.3% |
Ratios
|
|---|
| Revenue growth | -32.1% | 24.4% | 67.0% | 14.0% | -15.9% | |
| EBITDA growth | -157.9% | -352.5% | 167.3% | -31.6% | 21.8% | |
|
|---|
| Gross Margin | 19.8% | 23.2% | 25.6% | 17.1% | 20.2% | 3.1% |
| EBITDA Margin | -3.8% | 7.6% | 12.2% | 7.3% | 10.6% | 3.3% |
| SG&A, % of revenue | 26.1% | 17.6% | 14.2% | 11.7% | 12.3% | 0.7% |
| Net Income Margin | -12.9% | 0.1% | 8.0% | 2.4% | 13.8% | 11.4% |
| CAPEX, % of revenue | 1.6% | 1.5% | 3.4% | 2.9% | 0.7% | -2.2% |
|
|---|
| ROIC | -19.5% | 1.6% | 26.6% | 8.1% | 9.4% | 1.3% |
| ROE | -35.5% | -1.0% | 35.5% | 8.7% | 34.9% | 26.2% |
| Net Debt/EBITDA | | -0.7x | -1.0x | -1.1x | -1.6x | -0.5x |
SCI Engineered Materials Inc ($SCIA) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 1 | 3 | | -14.4% | -4.9% | -54.1% | 14.2% |
| EBITDA | 0 | 0 | 0 | 1 | | -26.9% | -45.9% | -1.5% | 575.4% |
| Net Income | 0 | 0 | 0 | 1 | | -47.5% | -87.7% | -6.1% | - |
Balance Sheet
|
|---|
| Cash | 2 | 2 | 3 | 3 | | 21.3% | 7.0% | 47.7% | 59.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | 7.2% | 113.3% | 156.7% | 68.9% |
| Long Term Debt | 0 | 1 | 1 | 1 | | -19.1% | 11.5% | 30.5% | 20.1% |
Ratios
|
|---|
| Gross Margin | 14.8% | 16.8% | 30.7% | 23.6% | | -2.5% | -8.5% | 16.6% | 11.4% |
| EBITDA Margin | 6.6% | 7.0% | 13.7% | 17.2% | | -1.1% | -5.3% | 7.3% | 14.3% |
| Net Income Margin | 2.4% | 0.8% | 3.9% | 40.0% | | -1.5% | -5.3% | 2.0% | 42.6% |
Peers in Semiconductor Equipment
Below we provide SCI Engineered Materials Inc 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. ($ACMR) | - | 33.4% | 104.5% | 44.1% | 45.7% |
| |
|---|
| Median (27 companies) | 5.0% | 24.5% | 14.0% | -2.8% | 16.9% |
|---|
| SCI Engineered Materials Inc ($SCIA) | - | 24.4% | 67.0% | 14.0% | -15.9% |
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. ($KLIC) | 45.7% | 47.2% | 46.1% | 47.1% | 47.8% |
| |
|---|
| Median (27 companies) | 40.0% | 44.0% | 41.2% | 40.5% | 42.7% |
|---|
| SCI Engineered Materials Inc ($SCIA) | 19.8% | 23.2% | 25.6% | 17.1% | 20.2% |
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. ($TER) | 3.4% | 29.6% | 27.9% | 30.3% | 33.8% |
| Cabot Microelectronics Corporation ($CCMP) | 23.4% | 27.2% | 31.5% | 20.1% | 31.6% |
| Entegris, Inc. ($ENTG) | 21.7% | 25.6% | 27.1% | 24.7% | 29.3% |
| |
|---|
| Median (25 companies) | 12.1% | 16.2% | 16.6% | 12.9% | 15.9% |
|---|
| SCI Engineered Materials Inc ($SCIA) | -3.8% | 7.6% | 12.2% | 7.3% | 10.6% |
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% |
| Cabot Microelectronics Corporation ($CCMP) | 4.1% | 4.2% | 3.6% | 5.4% | 11.3% |
| Amkor Technology, Inc. ($AMKR) | 16.5% | 13.1% | 12.7% | 11.7% | 10.9% |
| ACM Research, Inc. ($ACMR) | 2.9% | 1.8% | 2.5% | 0.9% | 9.5% |
| |
|---|
| Median (24 companies) | 2.6% | 3.2% | 2.9% | 3.4% | 3.9% |
|---|
| SCI Engineered Materials Inc ($SCIA) | 1.6% | 1.5% | 3.4% | 2.9% | 0.7% |
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. ($UCTT) | 7.8% | 27.5% | 10.5% | 4.1% | 14.8% |
| |
|---|
| Median (27 companies) | 7.6% | 13.1% | 11.2% | 5.5% | 10.5% |
|---|
| SCI Engineered Materials Inc ($SCIA) | -19.5% | 1.6% | 26.6% | 8.1% | 9.4% |
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 ($XPER) | 4.2x | 5.0x | 2.6x | 6.1x | 2.1x |
| Cabot Microelectronics Corporation ($CCMP) | -1.3x | -1.8x | -1.9x | 3.6x | 2.0x |
| Entegris, Inc. ($ENTG) | 0.7x | 0.1x | 1.1x | 1.6x | 1.0x |
| |
|---|
| Median (23 companies) | -1.3x | -0.7x | -1.0x | -0.4x | -0.3x |
|---|
| SCI Engineered Materials Inc ($SCIA) | - | -0.7x | -1.0x | -1.1x | -1.6x |
