Itron, Inc. reports 59.7% EBITDA decline in 2020 and 13.2% Revenue decline
02/24/2021 • About Itron, Inc. (
$ITRI) • By InTwits
Itron, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 5.0% in 2020, 10.8% in 2019, 3.1% in 2018, 10.8% in 2017, 8.2% in 2016
- Itron, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: $82m in FY2020, $76m in FY2019, $39m in FY2018, $45m in FY2017, $47m in FY2016
- The company has unprofitable business model: ROIC is -0.4%
- It operates with high leverage: Net Debt/EBITDA is 7.3x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Itron, Inc.'s Revenue dropped on 13.2%. Revenue decline showed acceleration in 20Q4 - it was 16.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.8 pp from 10.8% to 5.0% in 2020.
Gross Margin decreased on 2.4 pp from 30.1% to 27.7% in 2020. Gross Margin declined at -1.4 pp per annum in 2016-2020.
Net Income margin decreased on 4.6 pp from 2.0% to -2.7% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 2.1%. Itron, Inc.'s CAPEX/Revenue showed almost no change from 2017 to 2020. Average CAPEX/Revenue for the last three years was 2.4%. During the last 5 years CAPEX as a % of Revenue topped in 2018 at 2.5% and was declining since that time.
Return on investment
The company operates at negative ROIC (-0.4%) and ROE (-7.3%). ROIC decreased on 8.2 pp from 7.8% to -0.37% in 2020. ROE dropped on 13.9 pp from 6.6% to -7.3% in 2020.
Leverage (Debt)
Debt level is 7.3x Net Debt / EBITDA and 9.2x Debt / EBITDA. Net Debt / EBITDA surged on 4.1x from 3.2x to 7.3x in 2020. Debt decreased slightly on 1.4% while cash jumped on 38.0%.
Itron, Inc. has no short term refinancing risk: cash is higher than short term debt (598.0%).
Management team
Itron, Inc.'s CEO Thomas L Deitrich "Tom" has spent 1 year with the company. Joan S Hooper is a Itron, Inc.'s CFO. Joan S Hooper has spent 3 years at the company.
Financial and operational results
FY ended 12/31/2020
Itron, Inc. ($ITRI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 2,013 | 2,018 | 2,376 | 2,502 | 2,173 | -13.2% |
| Gross Profit | 660 | 677 | 730 | 752 | 602 | -20.0% |
| SG&A | 322 | | | | | |
| EBITDA | 165 | 218 | 73 | 270 | 109 | -59.7% |
| EBIT | 96 | 155 | -50 | | | |
| Interest expence | | 14 | 58 | | | |
| Tax | 50 | 74 | -13 | | | |
| Net Income | 32 | 57 | -99 | 49 | -58 | -218.3% |
| Stock Based Compensation | 18 | 21 | 31 | | | |
Balance Sheet
|
|---|
| Cash | 134 | 176 | 120 | 150 | 207 | 38.0% |
| Accounts Receivable | 352 | 398 | 437 | | | |
| Inventory | 163 | 194 | 221 | | | |
| Accounts Payable | 173 | 262 | 310 | | | |
| Short Term Debt | 14 | 20 | 28 | 17 | 35 | 103.0% |
| Long Term Debt | 290 | 594 | 988 | 1,001 | 969 | -3.2% |
Cash flow
|
|---|
| Capex | 44 | 49 | 60 | 61 | 46 | -23.9% |
| Acquisitions | 1 | 99 | 803 | | | |
Ratios
|
|---|
| Revenue growth | 6.9% | 0.2% | 17.7% | 5.3% | -13.2% | |
| EBITDA growth | 27.7% | 32.6% | -66.6% | 271.3% | -59.7% | |
|
|---|
| Gross Margin | 32.8% | 33.5% | 30.7% | 30.1% | 27.7% | -2.4% |
| EBITDA Margin | 8.2% | 10.8% | 3.1% | 10.8% | 5.0% | -5.8% |
| EBIT Margin | 4.8% | 7.7% | -2.1% | | |
| SG&A, % of revenue | 16.0% | | | | | |
| SBC, % of revenue | 0.9% | 1.1% | 1.3% | | |
| Net Income Margin | 1.6% | 2.8% | -4.2% | 2.0% | -2.7% | -4.6% |
| CAPEX, % of revenue | 2.2% | 2.5% | 2.5% | 2.4% | 2.1% | -0.3% |
|
|---|
| ROIC | 10.8% | 13.7% | -3.2% | 7.8% | -0.4% | -8.2% |
| ROE | 5.1% | 8.1% | -13.2% | 6.6% | -7.3% | -13.9% |
| Net Debt/EBITDA | 1.0x | 2.0x | 12.3x | 3.2x | 7.3x | 4.1x |
| Interest expence / Average debt | | 3.0% | 7.1% | | | |
People
|
|---|
| Insider ownership | 1.2% | 1.2% | 1.2% | | | |
| Employees | 7,300 | 7,800 | 8,000 | | | |
| Revenue/Employee, th. $ | 276 | 259 | 297 | | | |
Itron, Inc. ($ITRI) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 598 | 510 | 540 | 525 | | -2.6% | -19.8% | -13.5% | -16.4% |
| EBITDA | 50 | -21 | 0 | 58 | | -16.1% | -129.1% | -99.9% | -9.7% |
| Net Income | 9 | -63 | -25 | 22 | | - | -423.0% | -250.5% | 47.2% |
Balance Sheet
|
|---|
| Cash | 555 | 545 | 586 | 207 | | 400.3% | 301.4% | 315.9% | 38.0% |
| Short Term Debt | 7 | 14 | 21 | 35 | | -81.8% | -66.5% | -61.0% | 103.0% |
| Long Term Debt | 1,393 | 1,389 | 1,382 | 969 | | 32.9% | 33.8% | 38.6% | -3.2% |
Ratios
|
|---|
| Gross Margin | 28.7% | 27.2% | 26.5% | 28.3% | | -1.8% | -2.9% | -4.9% | 0.1% |
| EBITDA Margin | 8.4% | -4.2% | 0.0% | 11.0% | | -1.4% | -15.6% | -11.8% | 0.8% |
| Net Income Margin | 1.5% | -12.3% | -4.7% | 4.1% | | 1.8% | -15.4% | -7.4% | 1.8% |
Peers in Electronic Equipment & Instruments
Below we provide Itron, 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 ($CGNX) | - | 44.7% | 5.3% | -10.0% | 11.8% |
| |
|---|
| Median (26 companies) | -3.8% | 5.0% | 10.4% | 4.4% | -2.7% |
|---|
| Itron, Inc. ($ITRI) | - | 0.2% | 17.7% | 5.3% | -13.2% |
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 ($APDN) | 82.2% | 77.3% | 69.1% | 83.7% | 62.7% |
| |
|---|
| Median (26 companies) | 40.7% | 41.7% | 40.9% | 43.2% | 44.0% |
|---|
| Itron, Inc. ($ITRI) | 32.8% | 33.5% | 30.7% | 30.1% | 27.7% |
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. ($BMI) | 18.6% | 20.1% | 18.7% | 21.1% | 21.2% |
| |
|---|
| Median (26 companies) | 2.9% | 4.1% | 4.2% | 13.6% | 12.0% |
|---|
| Itron, Inc. ($ITRI) | 8.2% | 10.8% | 3.1% | 10.8% | 5.0% |
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. ($LPTH) | 6.5% | 7.8% | 7.7% | 5.7% | 7.0% |
| |
|---|
| Median (25 companies) | 2.0% | 1.6% | 2.2% | 1.9% | 2.8% |
|---|
| Itron, Inc. ($ITRI) | 2.2% | 2.5% | 2.5% | 2.4% | 2.1% |
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 ($CGNX) | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% |
| |
|---|
| Median (26 companies) | 2.1% | 2.6% | 1.3% | 7.9% | 5.7% |
|---|
| Itron, Inc. ($ITRI) | 10.8% | 13.7% | -3.2% | 7.8% | -0.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Identiv, Inc. ($INVE) | - | - | 2.1x | 1.9x | 9.0x |
| Track Group Inc ($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 |
| Zebra Technologies Corporation ($ZBRA) | 6.5x | 3.7x | 2.0x | 1.5x | 1.5x |
| |
|---|
| Median (16 companies) | -0.9x | -0.9x | -1.0x | 0.2x | 0.3x |
|---|
| Itron, Inc. ($ITRI) | 1.0x | 2.0x | 12.3x | 3.2x | 7.3x |
