UBNT (Ubiquiti Networks)
In Thousands
Revenue
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214
79167 87817 91665 94868 61535 74901 83155 101232 129687 138439
Net Income
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214
21493 24691 27920 28485 13179 17803 20667 28841 40528 41792
Eps
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214
(1.30) .16 .30 .30 .14 .20 .23 .32 .45 .47
Free Cashflow
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214
15514 3346 31226 28392 21346 25712 34218 45252 51420 77542
Cash
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214
52576 64844 68528 122060 132486 148301 181689 227826 279729 305553
Debt
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214
6976 6964 6966 6968 5008 5009 5011 5013 5015 5642
Subject: Ubiquiti Networks (UBTN)
Author: Buynholdisdead
Date: 03/01/2014
Sector: Technology
Industry: Communication Equipment
Ubiquiti Networks (UBTN) Closing Price $49.41
Price: $49.41
Dow:16,321.71
Nasdaq:4,308.12
SP500:1,859.45
Oil: $102.59
Nat Gas: $4.61
Gold: $1321.60
Silver: $21.24
Copper: $3.19
Corn: $463.50
Lean Hogs: $106.85
Feeder Cattle: $173.70
Coffee: $180.30
Cotton: $86.39
Lumber: $352.20
Today the Price is $49.41: The P/E ratio is 33.49
**November 10th,2011 1q:2012 earnings highlights:
**Revenues were $79.2 million
**Cost of Revenues 46.2 million
**1Q Earnings per share were ($.1.30)
**Diluted share count were 62,717,000
**Cash Flow for the quarter was $15.5 million
**Cash $52.6 million
**Debt $7 million
** Gross Profit were $33 million
** Gross Profit Margin 41%
**Inventory for the quarter was 8,374,000 million
**IPO’d
**January 31st, 2012 2Q:2012 earnings highlights:
**Revenues were $87.8 million
**Cost of Revenues $50.5 million
**2Q Earnings per share were $.16
**Diluted share count were 90,056,000 up 44% from 62,717,000 Quarter over Quarter
**Cash Flow for the quarter was $3.3 million
**Cash $64.8 million
**Debt $7 million
** Gross Profit were $37.3 million
** Gross Profit Margin 42%
**Inventory for the quarter was 8,980,000 up 7% from 8,374,000 QoQ.
**Trading range between $17.33 to $25.30
** P/E range NA
** P/S range na
**May 1st, 2012 3Q:2012 earnings highlights:
**Revenues were $91.7 million
**Cost of Revenues $52 million
**3Q Earnings per share were $.30
**Diluted share count were 94,177,000 up 5% from 90,056,000 QoQ
**Cash Flow for the quarter was $31.2 million
**Cash $94.2 million
**Debt $7 million
** Gross Profit were $39.7 million
** Gross Profit Margin 43%
** Net Income were $27.9 million
**Inventory for the quarter was 9,111,000 up 1% from 8,980,000 QoQ
**Trading range between $22.60 to $35.99
** P/E range NA
**August 9th, 2012 4Q:2012 earnings highlights:
**Revenues were $94.9 million
**TTM Revenues were $353.5 million
**Cost of Revenues $53.8 million
**4Q Earnings per share were $.30
**Diluted share count were 94,168,000 down from 94,177,00 QoQ
**Cash Flow for the quarter was $28.4 million
**TTM cash flow was $78.5 million
**Cash $122.1 million
**Debt $7 million
** Gross Profit were $41 million
** Gross Profit Margin 43%
** Net Income were $28.5 million
**Inventory for the quarter was 7,734,000 down 15% from 9,111,000 QoQ
**Trading range between $9.37 to $27.90
** P/E range NA
** P/S range 2.50 to 7.43
**Gross Profit to asset ratio = 19%
**YOY Inventory turnover ratio = 23.82
**Inventory Holding Period = 2.18 weeks
**Ceo states Counterfeit problem will impact revenue growth going forward
**November 8th, 2012 1Q:2013 earnings highlights:
**Revenues were $61.5 million
**TTM Revenues were 335.8 million
**Cost of Revenues $36.5
**1Q Earnings per share were $.14 up from $(1.30)
**TTM Earnings per share $.90
**Diluted share count were 92,925,000 down 1% from 94,168,000 Quarter over Quarter
**Cash Flow for the quarter was $21.3 million
**TTM cash flow was $84.2 million
**Cash $132.5 million
**Debt $5 million
** Gross Profit were $25 million
** Gross Profit Margin 41%
** Net Income were $13.2 million
**Inventory for the quarter was 7,632,000 up 1% from 7,734,000
**Trading range between $7.80 to $13.39
** P/E range 8.6 to 14.88
** P/S range 2.16 to 3.71
**Gross Profit to asset ratio = 12%
**YOY Inventory turnover ratio = 23.05
**Inventory Holding Period = 2.26 weeks
**Counterfeit problem impacting Revenue growth which they have taken significant legal action against.
**February 7th, 2013 2Q:2013 earnings highlights:
**Revenues were $74.9 million
**TTM Revenues were 323 million
**Cost of Revenues $44.4 million
** Gross Profit were $30.5 million
** Gross Profit Margin 41%
** Net Income were $17.8 million
**2Q Earnings per share were $.20 up from $.16
**TTM Earnings per share $.94
**Diluted share count were 90,056,000 down 3% from 92,925,000 Quarter over Quarter
**Cash Flow for the quarter was $25.7 million
**TTM cash flow was $106.6 million
**Cash $148.3 million
**Debt $5 million
**Inventory for the quarter was 14,623,000 up 92% from 7,632,000
**Trading range between $9.97 to $15.28
** P/E range 10.61 to 16.26
** P/S range 2.96 to 4.26
**Gross Profit to asset ratio = 13%
**YOY Inventory turnover ratio = 12.77
**Inventory Holding Period = 4.07 weeks
**Paid an $.18 dividend on Dec 20th 2012
**Set up a third party logistics hub in China which caused an increase in inventory
**As of December 31st they have repurchased 5.2 million shares for approximately $54.4 million dollars
**May 9th, 2013 3Q:2013 earnings highlights:
**Revenues were $83.2 million
**TTM Revenues were 314.5 million
**Cost of Revenues $47.7 million
** Gross Profit were $35.5 million
** Gross Profit Margin 43%
** Net Income were $20.7 million
**3Q Earnings per share were $.23 down from $.30
**TTM Earnings per share $.87
**Diluted share count were 88,953,000 down 1% from 90,056,000 Quarter over Quarter
**Cash Flow for the quarter was $34.2 million
**TTM cash flow was $109.6 million
**Cash $181.7 million
**Debt $5 million
**Inventory for the quarter was 19,381,000 up 33% from 14,623,000
**Trading range between $12.76 to $16.72
** P/E range 14.67 to 19.22
** P/S range 3.61 to 4.73
**Gross Profit to asset ratio = 14%
**YOY Inventory turnover ratio = 9.4
**Inventory Holding Period = 5.53 weeks
**Implemented sophisticated anti-theft technology
**Craig Foster new CFO
**August 8th, 2013 4Q:2013 earnings highlights:
**Revenues were $101.2 million
**TTM Revenues were 320.8 million
**Cost of Revenues $56.9 million
** Gross Profit were $44.4 million
** Gross Profit Margin 44%
** Net Income were $28.8 million
**4Q Earnings per share were $.32 up from $.30
**TTM Earnings per share $.89
**Diluted share count were 89,064,000 up from 88,953,000 Quarter over Quarter
**Cash Flow for the quarter was $45.3 million
**TTM cash flow was $237.5 million up from
**Cash $227.8 million
**Debt $5 million
**Inventory for the quarter was 15,880,000 down 18% from 19,382,000
**Trading range between $15.01 to $21.96
** P/E range 16.87 to 24.67
** P/S range 4.68 to 7.00
**Gross Profit to asset ratio = 15%
**YOY Inventory turnover ratio = 12.90
**Inventory Holding Period = 4.03 weeks
**They believe they will be the #1 volume enterprise managed AP shipment vendor by fourth quarter. Currently they are the fourth.
**CEO Robert J. Pera says the counterfeit issues are behind them and that he is taking back control of the company. He also stated that he is going to kick butt and he is out for growth.
** CEO says DSO’s are at a record low of 32 DSO’s, they have legally confined the counterfeiters.
**The CEO states that when they go into a market they have never had to drop prices. That prices have continually stayed the same.
**November 7th, 2013 1Q:2014 earnings highlights:
**Revenues were $129.7 million up from 61.5 million
**TTM Revenues were 389 million up from $335.8 million
**Cost of Revenues $71.7 million up from $36.5 million
** Gross Profit were $58 million up from $25 million
** Gross Profit Margin 45%
** Net Income were $40.5 million up from 13.2 million
**1Q Earnings per share were $.45 up from $.14
**TTM Earnings per share $.1.20
**Diluted share count were 89,473,000 up from 89,064,000 Quarter over Quarter
**Cash Flow for the quarter was $51.4 million up from $21.3 million
**TTM cash flow was $126.5 million up from $84.2 million
**Cash $279.7 million up from 227.8 million QoQ
**Debt $5 million
**Inventory for the quarter was 16,375,000 up 3% from 15,880,000
**Trading range between $25.06 to $43.99
** P/E range 20.9 to 36.7
** P/S range 5.76 to 9.91
**Gross Profit to asset ratio = 17%
**YOY Inventory turnover ratio = 13.44
**Inventory Holding Period = 3.87 weeks
**They are now using wifi 802.11n for AirMax but they are going to start producing 802.11ac sometime next year which will give approximately 30% boost in speed.
** Announced the industry first 802.11ac outdoor AP.
**February 6th, 2014 2Q:2014 earnings highlights:
**Revenues were $138.4 million up from 74.9 million
**TTM Revenues were 452.5 million up from $323 million
**Cost of Revenues $77.5 million up from $44.4 million
** Gross Profit were $61 million up from $30.5 million
** Gross Profit Margin 44%
** Net Income were $41.8 million up from 17.8 million
**2Q Earnings per share were $.47 up from $.20
**TTM Earnings per share $.1.47 up from $.94
**Diluted share count were 89,653,000 up from 89,473,000 Quarter over Quarter
**Cash Flow for the quarter was $77.5 million up from $25.7 million
**TTM cash flow was $178.3 million up from $106.6 million
**Cash $305.6 million up from 279.7 million QoQ
**Debt $5.6 million
**Inventory for the quarter was 32,323,000 up 97% from 16,375,000
**Trading range between $36.30 to $48.00
** P/E range 24.70 to 32.65
** P/S range 7.19 to 9.51
**Gross Profit to asset ratio = 16%
**YOY Inventory turnover ratio = 7.85
**Inventory Holding Period = 6.62 weeks
**They are now using wifi 802.11n for AirMax but they are going to start producing 802.11ac sometime next year which will give approximately 30% boost in speed.
** Announced the industry first 802.11ac outdoor AP.
**AirPRISM new technology improves the selectivity of base station radios and perform significantly better in high noise environment.
Ubiquiti is a unique company that is built upon its customers. Their CEO believes that the easiest and best way to supply tech support is through emails. This is a very disruptive service that does not have a sales team… Everything is built on word of mouth and it seems to be working. Although recently they have started advertising in regular channels. They had a problem in the last quarter of 2012 and the first quarter of 2013 with some counterfeiters. They had a distributor in South America that decided to take their product and start producing it himself. So he was able to induce a chinese manufacture to help him make the product. Ubiquiti decided to take legal action against both of these parties and now the Chinese manufacture is sitting in jail and the South American distributor has been legally put out of business. The Revenue has had a small decrease in the 1st quarter of 2013 but has climbed substantially since then.
This quarter has been the highest growth that UBTN has ever seen. It is hard to compare this quarter with the troubled 1st quarter of 2013. But as you can see Revenue has grown substantially and so has Gross Profits, Net Income, and EPS. This companies main sauce seems to be that they do not have a sales team to pay so all of that money goes back into the companies coffers. The CEO claims that they are completely transparent and they provide a website for technicians to talk about their product and help each other out. This is a great way for technicians to confer and discuss the product. What I have found, after looking over their financials. Is their inventory holding period. It is amazing for a company in the Telecommunications field to have holding periods like this company does. When I first started tracking this in the 1q of 2013 it was at 2.13 weeks it has fluctuated up and down but is now sitting at 6.62 weeks. That is incredible. The product is flying off the shelves. The CFO has almost doubled the inventory for this quarter. Now if this was any other company I would be alarmed but I think this was a smart move. How much revenue were they leaving on the table with such short inventory holding periods? I think that they are filling, not stuffing, the channels and next quarter we should see a meaningful rise in Revenue. I can’t wait to see if I am right. Their Cash Flow is up 67% this quarter and their cash is up 9 percent while debt is up 14%. But that is really not alarming on the cash to debt ratio because to keep it in perspective they have 305.6 million in cash which is going up every quarter while their debt went up from 5 million to 5.6 million, the first increase of debt in 5 quarters. Still they have a very rock solid balance sheet. Ubnt is a very exciting company in the Wireless sector of the Telecommunications field that everyone should be looking at.
Any questions or thoughts on this company would be greatly appreciated.
Analyst Estimates
Mar. 2014 $.49
Jun. 2014 $.50
Cur year $1.92
Next year Jun 15 $2.17
Andy