eMagin Corporation CAPEX surged on 125% and Revenue jumped on 10.1%
03/18/2021 • About eMagin Corporation (
$EMAN) • By InTwits
eMagin Corporation reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -10.7%
- eMagin Corporation spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 0.0%. Average EBITDA Margin for the same period was -22.8%
- eMagin Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.9%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: $3m in 2020, $1m in 2019, $2m in 2018, $1m in 2017, $1m in 2016
- The company has unprofitable business model: ROIC is -23.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
EMagin Corporation's Revenue jumped on 10.1%. Revenue growth showed slowdown in 20Q4 - it was 4.7% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from -25.7% to -27.4% in FY2020.
Gross Margin decreased on 3.5 pp from 25.2% to 21.6% in 2020. SG&A as a % of Revenue decreased slightly on 1.4 pp from 27.1% to 25.7% in 2020. SG&A as a % of Revenue declined at -3.9 pp per annum in 2016-2020.
Net Income margin dropped on 22.8 pp from -16.1% to -38.9% in 2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 8.5% in 2020. CAPEX/Revenue increased on 2.3 pp from 6.2% in 2017 to 8.5% in 2020. For the last three years the average CAPEX/Revenue was 7.1%.
Return on investment
The company operates at negative ROIC (-23.8%) and ROE (-101.2%). ROIC showed almost no change in 2020. ROE dropped on 65.9 pp from -35.3% to -101% in 2020. During 2016-2020 ROIC bottomed in 2018 at -59.0% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.2x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2020. Debt surged on 119% while cash jumped on 137%.
eMagin Corporation has no short term refinancing risk: cash is higher than short term debt (281.6%).
Management team
Andrew G Sculley is a eMagin Corporation's CEO. Andrew G Sculley has spent 12 years with the company.
Financial and operational results
FY ended 12/31/2020
eMagin Corporation ($EMAN) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 21.397 | 22.031 | 26.235 | 26.726 | 29.424 | 10.1% |
| Gross Profit | 6.442 | 5.124 | 3.994 | 6.728 | 6.365 | -5.4% |
| SG&A | 8.411 | 8.682 | 8.967 | 7.251 | 7.567 | 4.4% |
| EBITDA | -6.690 | -6.663 | -9.678 | -2.539 | -3.142 | |
| Net Income | -8.049 | -7.783 | -9.542 | -4.298 | -11.448 | |
Balance Sheet
|
|---|
| Cash | 5.241 | 3.526 | 3.359 | 3.515 | 8.315 | 136.6% |
| Short Term Debt | 1.689 | 3.808 | 0.000 | 3.666 | 2.953 | -19.4% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 3.091 | 11.834 | 282.9% |
Cash flow
|
|---|
| Capex | 1.437 | 1.355 | 2.296 | 1.110 | 2.500 | 125.2% |
Ratios
|
|---|
| Revenue growth | -14.9% | 3.0% | 19.1% | 1.9% | 10.1% | |
| EBITDA growth | 164.2% | -0.4% | 45.2% | -73.8% | 23.7% | |
|
|---|
| Gross Margin | 30.1% | 23.3% | 15.2% | 25.2% | 21.6% | -3.5% |
| EBITDA Margin | -31.3% | -30.2% | -36.9% | -9.5% | -10.7% | -1.2% |
| SG&A, % of revenue | 39.3% | 39.4% | 34.2% | 27.1% | 25.7% | -1.4% |
| Net Income Margin | -37.6% | -35.3% | -36.4% | -16.1% | -38.9% | -22.8% |
| CAPEX, % of revenue | 6.7% | 6.2% | 8.8% | 4.2% | 8.5% | 4.3% |
|
|---|
| ROIC | -36.4% | -40.0% | -59.0% | -24.0% | -23.8% | 0.1% |
| ROE | -49.5% | -58.4% | -79.0% | -35.3% | -101.2% | -65.9% |
eMagin Corporation ($EMAN) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 7 | 8 | 7 | 8 | | 10.1% | 43.6% | -7.7% | 4.7% |
| EBITDA | -1 | -1 | -1 | -1 | | - | - | -366.0% | -233.9% |
| Net Income | -1 | -3 | -4 | -4 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 3 | 5 | 10 | 8 | | -9.2% | 47.0% | 301.2% | 136.6% |
| Short Term Debt | 3 | 1 | 1 | 3 | | -7.1% | -25.5% | -51.7% | -19.4% |
| Long Term Debt | 3 | 3 | 2 | 12 | | -19.1% | -21.8% | -24.1% | 282.9% |
Ratios
|
|---|
| Gross Margin | 21.3% | 25.7% | 23.1% | 16.4% | | -0.6% | 21.5% | -8.3% | -20.0% |
| EBITDA Margin | -9.2% | -7.9% | -14.8% | -10.9% | | 14.5% | 31.8% | -19.9% | -19.4% |
| Net Income Margin | -20.3% | -36.8% | -48.3% | -48.4% | | 3.2% | 6.8% | -44.3% | -45.6% |
Peers in Electronic Manufacturing Services
Below we provide eMagin Corporation benchmarking against other companies in Electronic Manufacturing Services 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 |
|---|
| Netlist Inc ($NLST) | - | 95.0% | -12.5% | -22.1% | 81.0% |
| IEC Electronics Corp. ($IEC) | - | -24.1% | 21.2% | 34.3% | 16.4% |
| Jabil Inc. ($JBL) | - | 3.9% | 15.9% | 14.4% | 7.8% |
| Plexus Corp. ($PLXS) | - | -1.1% | 13.7% | 10.1% | 7.1% |
| SMTC Corporation ($SMTX) | - | -17.1% | 55.2% | 72.4% | 3.7% |
| |
|---|
| Median (13 companies) | 4.6% | 2.0% | 7.1% | 9.7% | -8.7% |
|---|
| eMagin Corporation ($EMAN) | - | 3.0% | 19.1% | 1.9% | 10.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Neonode Inc. ($NEON) | 86.9% | 77.1% | 89.2% | 89.7% | 82.0% |
| IPG Photonics Corporation ($IPGP) | 54.9% | 56.6% | 54.8% | 46.1% | 44.9% |
| CTS Corporation ($CTS) | 35.4% | 33.2% | 35.1% | 33.6% | 32.8% |
| TE Connectivity Ltd. ($TEL) | 33.7% | 34.3% | 33.9% | 32.7% | 30.7% |
| RF Industries, Ltd. ($RFIL) | 28.0% | 30.4% | 34.1% | 28.3% | 26.9% |
| |
|---|
| Median (13 companies) | 16.7% | 13.8% | 12.1% | 13.8% | 14.3% |
|---|
| eMagin Corporation ($EMAN) | 30.1% | 23.3% | 15.2% | 25.2% | 21.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.8% | 44.7% | 40.9% | 26.8% | 24.0% |
| CTS Corporation ($CTS) | 20.7% | 14.0% | 17.8% | 17.6% | 18.1% |
| TE Connectivity Ltd. ($TEL) | 20.9% | 20.4% | 21.4% | 19.8% | 11.1% |
| TTM Technologies, Inc. ($TTMI) | 14.0% | 14.6% | 13.5% | 15.8% | 9.7% |
| IEC Electronics Corp. ($IEC) | 7.4% | 3.8% | 4.3% | 6.6% | 7.5% |
| |
|---|
| Median (12 companies) | 5.4% | 5.0% | 4.8% | 6.1% | 5.9% |
|---|
| eMagin Corporation ($EMAN) | -31.3% | -30.2% | -36.9% | -9.5% | -10.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IPG Photonics Corporation ($IPGP) | 12.6% | 9.0% | 11.0% | 10.2% | 7.3% |
| TTM Technologies, Inc. ($TTMI) | 3.4% | 5.7% | 5.3% | 6.7% | 4.9% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 5.6% | 6.7% | 5.6% | 4.6% |
| Jabil Inc. ($JBL) | 5.0% | 3.8% | 4.7% | 4.0% | 3.6% |
| CTS Corporation ($CTS) | 5.2% | 4.3% | 6.1% | 4.6% | 3.5% |
| |
|---|
| Median (12 companies) | 2.8% | 2.7% | 2.4% | 1.4% | 2.6% |
|---|
| eMagin Corporation ($EMAN) | 6.7% | 6.2% | 8.8% | 4.2% | 8.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IEC Electronics Corp. ($IEC) | 16.9% | 3.1% | 6.4% | 12.7% | 14.8% |
| Sanmina Corporation ($SANM) | 14.2% | 13.9% | 7.0% | 16.2% | 13.0% |
| Plexus Corp. ($PLXS) | 8.7% | 10.3% | 9.6% | 12.6% | 12.4% |
| Jabil Inc. ($JBL) | 12.3% | 9.3% | 12.5% | 16.1% | 10.8% |
| CTS Corporation ($CTS) | 18.1% | 9.8% | 14.8% | 11.8% | 9.2% |
| |
|---|
| Median (13 companies) | 6.7% | 5.7% | 6.7% | 11.8% | 7.3% |
|---|
| eMagin Corporation ($EMAN) | -36.4% | -40.0% | -59.0% | -24.0% | -23.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SMTC Corporation ($SMTX) | 1.0x | - | 11.3x | 3.8x | 4.2x |
| TE Connectivity Ltd. ($TEL) | 1.4x | 1.3x | 1.1x | 1.1x | 2.7x |
| IEC Electronics Corp. ($IEC) | 2.0x | 5.6x | 4.9x | 3.6x | 2.1x |
| TTM Technologies, Inc. ($TTMI) | 2.2x | 1.5x | 3.2x | 3.3x | 2.0x |
| Jabil Inc. ($JBL) | 1.0x | 0.8x | 1.0x | 0.9x | 1.4x |
| |
|---|
| Median (11 companies) | 0.2x | 0.2x | 0.2x | 0.3x | -0.0x |
|---|
