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Interlink Electronics, Inc. reports 8.1 pp EBITDA Margin growth from -2.3% to 5.9% in 2020 in 2020 while 5.7% Revenue decline

03/16/2021 • About Interlink Electronics, Inc. ($LINK) • By InTwits

Interlink Electronics, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Interlink Electronics, Inc. is a company in decline: FY2020 revenue growth was -5.7%, 5 years revenue CAGR was -8.1%
  • EBITDA Margin is expanding: 5.9% in FY2020 vs. -2.3% in FY2019 vs. in FY2016
  • The company has potentially unprofitable business model: ROIC is 1.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Interlink Electronics, Inc.'s Revenue decreased on 5.7%. Annual revenue decline showed slowdown in FY20Q4 - revenue jumped on 15.1%. During FY2016-FY2020 Revenue growth bottomed in FY2018 at -20.2% and was accelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 8.1 pp from -2.3% to 5.9% in FY2020.

Gross Margin surged on 11.3 pp from 45.3% to 56.6% in FY2020. SG&A as a % of Revenue increased on 6.0 pp from 35.7% to 41.7% in FY2020.

Net Income margin increased on 7.9 pp from -6.3% to 1.6% in FY2020. Net Income margin followed a declining trend at -6.3 pp per annum in FY2016-FY2020.

Return on investment

The company operates at low ROIC (1.3%) and ROE (1.3%).

Leverage (Debt)

Debt level is -13.8x Net Debt / EBITDA and 1.4x Debt / EBITDA. Debt jumped on 148% while cash increased on 5.3%.

Interlink Electronics, Inc. has no short term refinancing risk: cash is higher than short term debt (1,511.1%).

Valuation and dividends

Interlink Electronics, Inc.'s trades at EV/EBITDA 210.3x and P/E 799.4x.

Financial and operational results

Interlink Electronics, Inc. ($LINK) key annual financial indicators

mln. $201620172018201920202020/2019
Gross Profit7.0066.8563.3103.90217.9%
Net Income2.8931.2600.622-0.4570.113
Balance Sheet
Short Term Debt0.0000.0000.1540.405163.0%
Long Term Debt0.0000.0000.0660.140112.1%
Cash flow
Revenue growth13.0%-6.2%-20.2%-18.0%-5.7%
EBITDA growth-342.8%

Gross Margin58.9%61.5%45.3%56.6%11.3%
EBITDA Margin-2.3%5.9%8.1%
SG&A, % of revenue29.7%34.9%35.7%41.7%6.0%
Net Income Margin24.3%11.3%7.0%-6.3%1.6%7.9%
CAPEX, % of revenue1.9%

Net Debt/EBITDA-13.8x

Peers in Electronic Equipment & Instruments

Below we provide Interlink Electronics, 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 ($CGNX)-44.7%5.3%-10.0%11.8%
Median (26 companies)-3.8%5.0%11.6%5.2%-2.7%
Interlink Electronics, Inc. ($LINK)--6.2%-20.2%-18.0%-5.7%

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 ($APDN)82.2%77.3%69.1%83.7%62.7%
Median (26 companies)39.4%41.0%40.5%42.2%42.9%
Interlink Electronics, Inc. ($LINK)58.9%61.5%-45.3%56.6%

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. ($BMI)18.6%20.1%18.7%21.1%21.2%
Median (26 companies)3.0%5.1%3.5%13.6%12.0%
Interlink Electronics, Inc. ($LINK)----2.3%5.9%

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 (26 companies)2.1%1.6%2.3%2.0%2.5%

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 ($CGNX)17.7%25.6%20.1%11.9%13.9%
Median (26 companies)2.1%2.6%1.1%7.9%5.7%
Interlink Electronics, Inc. ($LINK)34.8%20.4%--1.3%

Top companies by Net Debt / EBITDA

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Identiv, Inc. ($INVE)--2.1x1.9x9.0x
Itron, Inc. ($ITRI)1.0x2.0x12.3x3.2x7.3x
Track Group Inc ($TRCK)--12.2x5.2x3.5x
Trimble Inc. ($TRMB)1.1x1.3x3.4x2.9x2.2x
Luna Innovations Incorporated ($LUNA)-6.9x-108.1x-19.9x-2.9x1.8x
Median (16 companies)-0.9x-0.8x-0.9x0.3x0.7x
Interlink Electronics, Inc. ($LINK)-----13.8x