ABM Industries (ABM) swung to a net loss for the quarter ended Jan. 31, 2017. The company has made a net loss of $56.80 million, or $ 1 a share in the quarter, against a net profit of $14 million, or $0.24 a share in the last year period. On an adjusted basis, net profit for the quarter was almost stable at $21.50 million, or $0.38 a share, when compared with the last year period.
Revenue during the quarter grew 4.60 percent to $1,326.70 million from $1,268.40 million in the previous year period. Gross margin for the quarter contracted 10 basis points over the previous year period to 9.92 percent. Total expenses were 98.21 percent of quarterly revenues, down from 98.93 percent for the same period last year. This has led to an improvement of 72 basis points in operating margin to 1.79 percent.
Operating income for the quarter was $23.80 million, compared with $13.60 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $48.10 million compared with $43.70 million in the prior year period. At the same time, adjusted EBITDA margin improved 18 basis points in the quarter to 3.63 percent from 3.45 percent in the last year period.
Scott Salmirs, President and Chief Executive Officer of ABM Industries, commented, "Our strong performance during the first quarter is yet another proof point of our organization's continuous execution despite the many transformative changes we have experienced over the past year. We believe our new 2020 Vision operating structure has now set a foundation upon which we can build as we navigate the next phase of our strategy. We continue to believe that the many changes associated with our strategic transformation will lead to steady margin progression throughout this fiscal year and beyond."
For financial year 2017, the company forecasts diluted earnings per share to be in the range of $1.40 to $1.50. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $1.80 to $1.90 on adjusted basis.
Operating cash flow remains negative
ABM Industries has spent $11.10 million cash to meet operating activities during the quarter as against cash outgo of $29.80 million in the last year period.
The company has spent $29.10 million cash to meet investing activities during the quarter as against cash outgo of $87.60 million in the last year period.
Cash flow from financing activities was $27 million for the quarter, down 77.39 percent or $92.40 million, when compared with the last year period.
Cash and cash equivalents stood at $42.60 million as on Jan. 31, 2017, down 23.79 percent or $13.30 million from $55.90 million on Jan. 31, 2016.
Working capital declines
ABM Industries has witnessed a decline in the working capital over the last year. It stood at $318.20 million as at Jan. 31, 2017, down 17.95 percent or $69.60 million from $387.80 million on Jan. 31, 2016. Current ratio was at 1.43 as on Jan. 31, 2017, down from 1.69 on Jan. 31, 2016.
Days sales outstanding were almost stable at 55 days for the quarter, when compared with the last year period.
At the same time, days payable outstanding was almost stable at 14 days for the quarter, when compared with the previous year period.
Debt moves up
ABM Industries has witnessed an increase in total debt over the last one year. It stood at $306 million as on Jan. 31, 2017, up 6.73 percent or $19.30 million from $286.70 million on Jan. 31, 2016. Abm Industries has witnessed an increase in long-term debt over the last one year. It stood at $306 million as on Jan. 31, 2017, up 6.73 percent or $19.30 million from $286.70 million on Jan. 31, 2016. Total debt was 12.69 percent of total assets as on Jan. 31, 2017, compared with 12.71 percent on Jan. 31, 2016. Debt to equity ratio was at 0.34 as on Jan. 31, 2017, up from 0.29 as on Jan. 31, 2016. Interest coverage ratio improved to 7.44 for the quarter from 5.04 for the same period last year.
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