MicroVision, Inc. :MVIS-US: Earnings Analysis: 2015 By the Numbers

MicroVision, Inc. reports financial results for the year ended December 31, 2015.

We analyze the earnings along side the following peers of MicroVision, Inc. – Texas Instruments Incorporated, Qorvo, Inc., Himax Technologies, Inc. Sponsored ADR, Vicor Corporation and Kopin Corporation (TXN-US, QRVO-US, HIMX-US, VICR-US and KOPN-US) that have also reported for this period.

Highlights

  • Gross margins narrowed from 70.04% to 21.85% compared to the same period last year, operating (EBITDA) margins now -158.37% from -375.47%.
  • Earnings decline largely a result of non-operational activity, pretax margins improved from -519.94% to -158.27%.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2011 2012 2013 2014 2015
Relevant Numbers (Annual)
Revenues 5.62 8.37 5.85 3.49 9.19
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings -35.81 -22.69 -13.18 -18.12 -14.54
Earnings Growth (YOY) 24.55 36.63 41.93 -37.5 19.75
Net Margin -637.49 -271.29 -225.19 -519.94 -158.27
EPS -2.57 -1.05 -0.47 -0.44 -0.31
Return on Equity -219.45 -286.24 -784.87 -700.15 -432.86
Return on Assets -121.17 -123.3 -123.25 -177.72 -111.92

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Earnings Growth Analysis

The company’s gross margins showed no year-on-year improvement. In spite of this, the company’s earnings rose, influenced primarily by the improvement in operating margins (EBITDA margins) from -375.47% to -158.37%. For comparison, gross margins were 70.04% and EBITDA margins were -375.47% in the last period.

Gross Margin Versus EBITDA Margin

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

MVIS-US‘s decline in gross margins has not produced any significant offsetting improvement in its working capital . This leads Capital Cube to conclude that the decline in gross margins are likely from operating issues and not trade-offs with the balance sheet. Working capital days are currently 167.07 days, compared to last year’s level of 60.85 days.

Gross Margin Versus Working Capital Days

Margins

The company’s earnings decline is largely a result of non-operational activity. As a matter of fact, the company showed increases in operating (EBIT) and pretax margins. EBIT margins improved from -391.13% to -158.37% and pretax margins widened from -519.94% to -158.27%.

EBIT Margin Versus PreTax Margin
EBIT Margin History
PreTax Margin History

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Company Profile

MicroVision is the creator of PicoP display technology, an ultra-miniature laser projection solution for mobile consumer electronics, automotive head-up displays and other applications. MicroVision’s patented display technology helps OEMs break down display boundaries and offer enhanced visibility to mobile experiences. MicroVision’s laser beam scanning technology platform is also well suited to imaging and sensing applications. Extensive research has led MicroVision to become an independently recognized leader in the development of intellectual property. MicroVision’s IP portfolio has been recognized by the Patent Board as a top 50 IP portfolio among global industrial companies and has been included in the Ocean Tomo 300 Patent Index. The company was founded in May 1993 and is headquartered in Redmond, WA.

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