Q: Ignoring the the stock based compensation issue, it seems this company is caught with increasing administration costs , negative net cash flow generation , decreased ( slightly ) margins , This is countered with continuing growth in sales and backlog and and a forthcoming product price increase. I am interested to see if financially they are able to handle these dynamics. Their products seem good and they are in the big themed industries
( data centres, EV charging , infrastructure etc ) but could you dig into their financial capabilities for us. Thanks . Derek
( data centres, EV charging , infrastructure etc ) but could you dig into their financial capabilities for us. Thanks . Derek
5i Research Answer:
EIBT margins declined in the most recent quarter, and some of this is due to an increase in G&A, but mostly due to a significant rise in SBC. Its free cash flow has dipped negative in the first quarter of most years in the past, likely due to large seasonal disbursements for bonuses and customer rebates.
Overall, we feel the underlying factors of rising sales, long-term healthy margins, and a growing backlog should be viewed as most important here, while seasonal factors and high SBC are likely to be more lumpy and impact the company on an inconsistent basis.