CDK Global, Inc (CDK) has reported a 43.68 percent jump in profit for the quarter ended Mar. 31, 2017. The company has earned $77.30 million, or $0.53 a share in the quarter, compared with $53.80 million, or $0.34 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $95.10 million, or $0.65 a share compared with $66.40 million or $0.42 a share, a year ago. Revenue during the quarter grew 3.46 percent to $556.30 million from $537.70 million in the previous year period. Gross margin for the quarter expanded 342 basis points over the previous year period to 44.69 percent. Total expenses were 77.66 percent of quarterly revenues, down from 83.41 percent for the same period last year. This has led to an improvement of 575 basis points in operating margin to 22.34 percent.
Operating income for the quarter was $124.30 million, compared with $89.20 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $180.70 million compared with $137.80 million in the prior year period. At the same time, adjusted EBITDA margin improved 685 basis points in the quarter to 32.48 percent from 25.63 percent in the last year period.
"The benefits of our on-going transformation continue to generate positive outcomes for CDK and our customers as we complete another strong quarter. Adjusted EBITDA margin expansion of 690 basis points versus last year’s third quarter demonstrates the financial impact of the plan's progress," said Brian MacDonald, chief executive officer. "Our top priority is ensuring a better customer experience, and we saw record results in our customer service metrics through the critical calendar year-end period for dealers. CDK's transformation is solidly on track to generate both financial and operational improvements for CDK employees, our shareholders and our customers."
For the financial year 2017, CDK Global, Inc projects revenue to grow at 4.50 percent. The company expects adjusted revenue to grow at 4.50 percent. It company projects net income to grow in the range of $24 percent to $26 percent and expects adjusted net income to grow in the range of $29 percent to $32 percent. The company expects diluted earnings per share to be in the range of $1.99 to $2.04. It company expects diluted earnings per share to be in the range of $2.40 to $2.44 on adjusted basis.
Operating cash flow improves significantly
CDK Global, Inc has generated cash of $287.20 million from operating activities during the nine month period, up 38.81 percent or $80.30 million, when compared with the last year period. The company has spent $67.50 million cash to meet investing activities during the nine month period as against cash outgo of $60.60 million in the last year period.
The company has spent $48.40 million cash to carry out financing activities during the nine month period as against cash outgo of $86.50 million in the last year period.
Cash and cash equivalents stood at $385.20 million as on Mar. 31, 2017, down 17 percent or $78.90 million from $464.10 million on Mar. 31, 2016.
Working capital declines
CDK Global, Inc has witnessed a decline in the working capital over the last year. It stood at $415.30 million as at Mar. 31, 2017, down 14.74 percent or $71.80 million from $487.10 million on Mar. 31, 2016. Current ratio was at 1.76 as on Mar. 31, 2017, down from 1.91 on Mar. 31, 2016.
Days sales outstanding were almost stable at 63 days for the quarter, when compared with the last year period.
At the same time, days payable outstanding was almost stable at 7 days for the quarter, when compared with the previous year period.
Debt increases substantially
CDK Global, Inc has witnessed an increase in total debt over the last one year. It stood at $1,591.30 million as on Mar. 31, 2017, up 30.17 percent or $368.80 million from $1,222.50 million on Mar. 31, 2016. Total debt was 62.23 percent of total assets as on Mar. 31, 2017, compared with 45.74 percent on Mar. 31, 2016. Debt to equity ratio was at 7.65 as on Mar. 31, 2017, up from 1.88 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 8.23 for the quarter from 8.34 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
