Revenue during the quarter went down marginally by 1.94 percent to $468.90 million from $478.20 million in the previous year period. Gross margin for the quarter contracted 4 basis points over the previous year period to 46.43 percent. Total expenses were 76.60 percent of quarterly revenues, down from 92.22 percent for the same period last year. This has led to an improvement of 1562 basis points in operating margin to 23.40 percent.

Operating income for the quarter was $109.70 million, compared with $37.20 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $158.40 million compared with $170.10 million in the prior year period. At the same time, adjusted EBITDA margin contracted 179 basis points in the quarter to 33.78 percent from 35.57 percent in the last year period.

Lawrence E. Dewey, chairman and chief executive officer of Allison Transmission commented, "Allison's fourth quarter 2016 results exceeded the full year guidance ranges we provided to the market on October 24 principally due to stronger than anticipated demand conditions in North America Off-Highway service parts and Global On-Highway products. Allison demonstrated solid operating margins and free cash flow while executing its well-defined approach to capital structure and allocation. During the fourth quarter, we settled $87 million of share repurchases and paid a dividend of $0.15 per share."

For the financial year 2017, Allison Transmission Holdings Inc. projects revenue to grow in the range of 1.50 percent to 4.50 percent.

The company has spent $71.40 million cash to meet investing activities during the year as against cash outgo of $59.70 million in the last year.

The company has spent $564.70 million cash to carry out financing activities during the year as against cash outgo of $528.70 million in the last year period.

Cash and cash equivalents stood at $204.70 million as on Dec. 31, 2016, down 18.64 percent or $46.90 million from $251.60 million on Dec. 31, 2015.

Working capital drops significantly
Allison Transmission Holdings Inc. has witnessed a decline in the working capital over the last year. It stood at $205.40 million as at Dec. 31, 2016, down 34.21 percent or $106.80 million from $312.20 million on Dec. 31, 2015. Current ratio was at 1.60 as on Dec. 31, 2016, down from 2.02 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 19 days for the quarter from 21 days for the last year period. Days sales outstanding were almost stable at 19 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 23 days for the quarter compared with 25 days for the previous year period. At the same time, days payable outstanding was almost stable at 23 days for the quarter, when compared with the previous year period.