ACETO Corporation (ACET) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $0.56 million, or $ 0.02 a share in the quarter, against a net profit of $8.27 million, or $0.28 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $7.26 million, or $0.24 a share compared with $10.67 million or $0.36 a share, a year ago.
Revenue during the quarter dropped 4.65 percent to $125.55 million from $131.67 million in the previous year period. Gross margin for the quarter contracted 270 basis points over the previous year period to 24.54 percent. Total expenses were 98.89 percent of quarterly revenues, up from 89.30 percent for the same period last year. That has resulted in a contraction of 959 basis points in operating margin to 1.11 percent.
Operating income for the quarter was $1.39 million, compared with $14.09 million in the previous year period.
"The second quarter of Fiscal 2017 was an important quarter for ACETO. I am very pleased that we continued to move ACETO toward Human Health as we closed on the significant product line acquisitions from Citron and Lucid Pharma. We are in the early phases of integrating the products into our Rising Pharmaceuticals business, with new leadership in place, and look forward to significant contributions from those products in the future," said Sal Guccione, chief executive officer of ACETO.
Working capital increases
ACETO Corporation has recorded an increase in the working capital over the last year. It stood at $251.59 million as at Dec. 31, 2016, up 11.04 percent or $25.01 million from $226.58 million on Dec. 31, 2015. Current ratio was at 2.21 as on Dec. 31, 2016, down from 3.21 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 155 days for the quarter from 161 days for the last year period. Days sales outstanding went up to 152 days for the quarter compared with 119 days for the same period last year.
Days inventory outstanding has decreased to 70 days for the quarter compared with 94 days for the previous year period. At the same time, days payable outstanding went up to 68 days for the quarter from 51 for the same period last year.
Debt increases substantially
ACETO Corporation has witnessed an increase in total debt over the last one year. It stood at $382.94 million as on Dec. 31, 2016, up 229.88 percent or $266.85 million from $116.08 million on Dec. 31, 2015. Total debt was 36.65 percent of total assets as on Dec. 31, 2016, compared with 22.14 percent on Dec. 31, 2015. Debt to equity ratio was at 0.97 as on Dec. 31, 2016, up from 0.41 as on Dec. 31, 2015.
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