A. Schulman, Inc. (SHLM) has reported a 58.51 percent plunge in profit for the quarter ended Nov. 30, 2016. The company has earned $2.94 million, or $0.04 a share in the quarter, compared with $7.09 million, or $0.18 a share for the same period last year. On an adjusted basis, earnings per share were at $0.49 for the quarter compared with $0.50 in the same period last year.

Revenue during the quarter dropped 7.58 percent to $600 million from $649.22 million in the previous year period. Gross margin for the quarter expanded 67 basis points over the previous year period to 16.84 percent. Total expenses were 96.82 percent of quarterly revenues, up from 95.97 percent for the same period last year. That has resulted in a contraction of 84 basis points in operating margin to 3.18 percent.

Operating income for the quarter was $19.10 million, compared with $26.15 million in the previous year period.

However, the adjusted operating income for the quarter stood at $35.01 million compared to $37.84 million in the prior year period. At the same time, adjusted operating margin improved 1 basis points in the quarter to 5.83 percent from 5.83 percent in the last year period.

"Clearly, a lot of hard work remains to be done as we restore the Company's operational and financial performance worldwide. While we were able to grow sales and gross margins in Asia-Pacific and in our Engineered Composites segment, we experienced continued weakness in the United States and Europe. Our recently implemented global actions to strengthen our sales organization and optimize our footprint are designed to address this weakness," said Joseph M. Gingo, chairman, president and chief executive officer. "As we move forward in fiscal 2017, we must continue to execute as we reset the business and rejuvenate our growth plan."

The company has spent $12.58 million cash to meet investing activities during the quarter as against cash outgo of $7.04 million in the last year period. It has incurred capital expenditure of $12.60 million on net basis during the quarter, up 78.91 percent or $5.56 million from year ago period.

The company has spent $8.88 million cash to carry out financing activities during the quarter as against cash outgo of $30.83 million in the last year period.

Cash and cash equivalents stood at $39.28 million as on Nov. 30, 2016, down 58.89 percent or $56.28 million from $95.56 million on Nov. 30, 2015.

Working capital drops significantly

A. Schulman, Inc. has witnessed a decline in the working capital over the last year. It stood at $278.81 million as at Nov. 30, 2016, down 31.20 percent or $126.46 million from $405.26 million on Nov. 30, 2015. Current ratio was at 1.60 as on Nov. 30, 2016, down from 1.87 on Nov. 30, 2015.

Cash conversion cycle (CCC) has decreased to 32 days for the quarter from 59 days for the last year period. Days sales outstanding went up to 60 days for the quarter compared with 57 days for the same period last year.

Days inventory outstanding has decreased to 25 days for the quarter compared with 53 days for the previous year period. At the same time, days payable outstanding went up to 53 days for the quarter from 51 for the same period last year.