Wayside Technology Group, Inc. reports 31.8% EBITDA decline in 2020 and 2.0 pp EBITDA Margin decline from 4.5% to 2.6%
03/01/2021 • About Wayside Technology Group, Inc. (
$WSTG) • By InTwits
Wayside Technology Group, 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: 2.6% in 2020, 4.5% in 2019, 2.6% in 2018, 5.2% in 2017, 2.1% in 2016
- Wayside Technology Group, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- The company has business model with average profitability: ROIC is 11.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Wayside Technology Group, Inc.'s Revenue surged on 20.5%. Revenue growth showed slowdown in 20Q4 - it was 17.4% YoY. During the last 5 years Revenue growth bottomed in 2017 at -61.6% and was accelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 2.0 pp from 4.5% to 2.6% in 2020.
Gross Margin decreased slightly on 1.2 pp from 14.4% to 13.1% in 2020. During 2016-2020 Gross Margin topped in 2017 at 16.9% and was declining since that time. SG&A as a % of Revenue decreased slightly on 0.74 pp from 10.3% to 9.5% in 2020. During 2016-2020 SG&A as a % of Revenue topped in 2017 at 12.0% and was declining since that time.
Net Income margin decreased slightly on 1.5 pp from 3.3% to 1.8% in 2020.
Investments (CAPEX, working capital and M&A)
Wayside Technology Group, Inc.'s CAPEX/Revenue was 0.0091% in 2020. Wayside Technology Group, Inc.'s CAPEX/Revenue showed almost no change from 2017 to 2020. For the last three years the average CAPEX/Revenue was 0.069%. CAPEX as a % of Revenue was relatively stable in 2016-2020.
Return on investment
The company operates at low ROIC (11.1%) and ROE (9.9%). ROIC decreased on 7.9 pp from 19.0% to 11.1% in 2020. ROE decreased on 5.9 pp from 15.8% to 9.9% in 2020.
Leverage (Debt)
Debt level is -4.1x Net Debt / EBITDA and 0.4x Debt / EBITDA. Debt increased on 3.3% while cash surged on 95.9%.
Wayside Technology Group, Inc. has no short term refinancing risk: cash is higher than short term debt (5,989.4%).
Valuation and dividends
Wayside Technology Group, Inc.'s trades at EV/EBITDA 11.6x and P/E 22.6x.
Management team
Dale Richard Foster is a the company's CEO. Dale Richard Foster has spent 1 year with the company. Michael Vesey "Mike" is a Wayside Technology Group, Inc.'s CFO. Michael Vesey "Mike" has spent 4 years at the company.
Financial and operational results
FY ended 12/31/2020
Wayside Technology Group, Inc. ($WSTG) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 418.1 | 160.6 | 181.4 | 208.8 | 251.6 | 20.5% |
| Gross Profit | 27.3 | 27.1 | 26.9 | 30.0 | 33.0 | 10.3% |
| SG&A | 17.0 | 19.3 | 20.3 | 21.4 | 23.9 | 11.8% |
| EBITDA | 8.9 | 8.3 | 4.6 | 9.4 | 6.4 | -31.8% |
| Net Income | 5.9 | 5.1 | 3.5 | 6.8 | 4.5 | -34.1% |
Balance Sheet
|
|---|
| Cash | 13.5 | 5.5 | 14.9 | 15.0 | 29.3 | 95.9% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.4 | 0.5 | 27.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 2.2 | 2.2 | -1.0% |
Cash flow
|
|---|
| Capex | 1.0 | 0.4 | 0.3 | 0.1 | 0.0 | -78.3% |
Ratios
|
|---|
| Revenue growth | 9.4% | -61.6% | 13.0% | 15.1% | 20.5% | |
| EBITDA growth | 1.7% | -7.0% | -44.1% | 103.5% | -31.8% | |
|
|---|
| Gross Margin | 6.5% | 16.9% | 14.8% | 14.4% | 13.1% | -1.2% |
| EBITDA Margin | 2.1% | 5.2% | 2.6% | 4.5% | 2.6% | -2.0% |
| SG&A, % of revenue | 4.1% | 12.0% | 11.2% | 10.3% | 9.5% | -0.7% |
| Net Income Margin | 1.4% | 3.2% | 1.9% | 3.3% | 1.8% | -1.5% |
| CAPEX, % of revenue | 0.2% | 0.2% | 0.1% | 0.1% | 0.0% | -0.0% |
|
|---|
| ROIC | 21.5% | 19.7% | 10.3% | 19.0% | 11.1% | -7.9% |
| ROE | 15.5% | 13.3% | 8.9% | 15.8% | 9.9% | -5.9% |
| Net Debt/EBITDA | -1.5x | -0.7x | -3.2x | -1.3x | -4.1x | -2.8x |
Wayside Technology Group, Inc. ($WSTG) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 63 | 57 | 61 | 71 | | 39.6% | 11.7% | 16.3% | 17.4% |
| EBITDA | 1 | 1 | 1 | 3 | | -44.2% | -62.0% | -53.0% | 17.3% |
| Net Income | 1 | 1 | 1 | 3 | | -42.9% | -68.7% | -63.3% | 25.0% |
Balance Sheet
|
|---|
| Cash | 12 | 45 | 40 | 29 | | -17.6% | 380.4% | 296.7% | 95.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | | -9.8% | 10.9% | 7.8% | 27.9% |
| Long Term Debt | 2 | 2 | 2 | 2 | | -15.1% | -13.8% | -14.4% | -1.0% |
Ratios
|
|---|
| Gross Margin | 13.0% | 12.6% | 11.9% | 14.7% | | -3.1% | -2.9% | -1.6% | 1.8% |
| EBITDA Margin | 1.7% | 1.6% | 1.6% | 4.3% | | -2.5% | -3.1% | -2.4% | -0.0% |
| Net Income Margin | 1.3% | 1.0% | 0.9% | 3.5% | | -1.9% | -2.6% | -1.9% | 0.2% |
Peers in Technology Distributors
Below we provide Wayside Technology Group, Inc. benchmarking against other companies in Technology Distributors 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 |
|---|
| Galaxy Next Generation Inc ($GAXY) | - | 3.7% | - | - | 23.3% |
| Insight Enterprises, Inc. ($NSIT) | - | 22.2% | 5.6% | 9.2% | 7.9% |
| Synnex Corporation ($SNX) | - | 21.2% | 17.6% | 18.5% | 3.9% |
| CDW Corporation ($CDW) | - | 6.1% | 9.5% | 11.0% | 2.4% |
| EACO Corp ($EACO) | - | 5.7% | 23.1% | 14.5% | 1.8% |
| |
|---|
| Median (8 companies) | 5.3% | 5.7% | 8.3% | 11.0% | 2.1% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | - | -61.6% | 13.0% | 15.1% | 20.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Galaxy Next Generation Inc ($GAXY) | 70.0% | 61.4% | - | 6.1% | 51.0% |
| EACO Corp ($EACO) | 29.3% | 28.5% | 28.5% | 27.7% | 27.2% |
| ADDvantage Technologies Group, Inc. ($AEY) | 32.2% | 30.4% | 23.7% | 16.5% | 23.3% |
| CDW Corporation ($CDW) | 16.6% | 16.5% | 16.7% | 16.9% | 17.4% |
| PC Connection, Inc. ($CNXN) | 13.8% | 13.1% | 15.2% | 16.0% | 16.2% |
| |
|---|
| Median (8 companies) | 14.2% | 16.5% | 16.3% | 15.4% | 16.8% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | 6.5% | 16.9% | 14.8% | 14.4% | 13.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CDW Corporation ($CDW) | 7.7% | 7.6% | 7.7% | 8.3% | 9.0% |
| EACO Corp ($EACO) | 4.7% | 4.5% | 5.9% | 6.4% | 6.6% |
| Synnex Corporation ($SNX) | 3.6% | 3.9% | 3.9% | 5.0% | 5.7% |
| Insight Enterprises, Inc. ($NSIT) | 3.4% | 3.3% | 4.1% | 4.0% | 4.4% |
| Arrow Electronics, Inc. ($ARW) | 4.4% | 4.1% | 4.5% | 1.4% | 4.1% |
| |
|---|
| Median (8 companies) | 3.6% | 3.5% | 4.1% | 4.3% | 4.2% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | 2.1% | 5.2% | 2.6% | 4.5% | 2.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| EACO Corp ($EACO) | 0.3% | 5.5% | 0.8% | 0.8% | 3.0% |
| ADDvantage Technologies Group, Inc. ($AEY) | 0.8% | 0.4% | 0.3% | 1.1% | 1.2% |
| CDW Corporation ($CDW) | 0.5% | 0.5% | 0.5% | 1.3% | 0.9% |
| Synnex Corporation ($SNX) | 0.9% | 0.6% | 0.6% | 0.6% | 0.8% |
| Galaxy Next Generation Inc ($GAXY) | 0.0% | 15.1% | - | 0.0% | 0.8% |
| |
|---|
| Median (8 companies) | 0.4% | 0.5% | 0.5% | 0.8% | 0.8% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | 0.2% | 0.2% | 0.1% | 0.1% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CDW Corporation ($CDW) | 18.8% | 20.1% | 23.1% | 26.0% | 23.5% |
| EACO Corp ($EACO) | 22.2% | 16.1% | 21.2% | 23.0% | 14.6% |
| Insight Enterprises, Inc. ($NSIT) | 20.7% | 19.3% | 20.0% | 14.7% | 13.7% |
| Synnex Corporation ($SNX) | 13.5% | 13.7% | 9.6% | 11.6% | 11.7% |
| Arrow Electronics, Inc. ($ARW) | 12.5% | 12.1% | 13.3% | 1.4% | 11.3% |
| |
|---|
| Median (8 companies) | 12.1% | 9.9% | 11.8% | 14.7% | 11.7% |
|---|
| Wayside Technology Group, Inc. ($WSTG) | 21.5% | 19.7% | 10.3% | 19.0% | 11.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Arrow Electronics, Inc. ($ARW) | 2.2x | 2.3x | 2.2x | 7.5x | 1.9x |
| CDW Corporation ($CDW) | 2.8x | 2.7x | 2.4x | 2.2x | 1.6x |
| Synnex Corporation ($SNX) | 1.2x | 2.1x | 3.9x | 2.4x | 1.3x |
| Insight Enterprises, Inc. ($NSIT) | -0.9x | 0.9x | 0.2x | 2.7x | 1.1x |
| EACO Corp ($EACO) | -0.7x | 1.2x | 0.5x | 0.5x | 1.0x |
| |
|---|
| Median (6 companies) | 0.7x | 1.2x | 1.2x | 2.3x | 1.2x |
|---|
| Wayside Technology Group, Inc. ($WSTG) | -1.5x | -0.7x | -3.2x | -1.3x | -4.1x |
