CECO Environmental Corp. (CECE) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $5.80 million, or $ 0.17 a share in the quarter, against a net loss of $4.82 million, or $0.17 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $8.20 million, or $0.24 a share compared with $7.80 million or $0.27 a share, a year ago.
Revenue during the quarter grew 3.43 percent to $101.60 million from $98.23 million in the previous year period. Gross margin for the quarter expanded 180 basis points over the previous year period to 33.15 percent. Operating margin for the quarter period stood at positive 10.33 percent as compared to a negative 2.23 percent for the previous year period.
Operating income for the quarter was $10.50 million, compared with an operating loss of $2.19 million in the previous year period.
However, the adjusted operating income for the quarter stood at $14.40 million compared to $13 million in the prior year period. At the same time, adjusted operating margin improved 94 basis points in the quarter to 14.17 percent from 13.23 percent in the last year period.
CECO's chief executive officer Jeff Lang stated, "I am pleased with our operational progress, especially our gross and operating margin expansion as well as our working capital improvements, both year-over-year and sequentially. This allowed us to significantly pay down debt ahead of schedule. Our continued focus on sales, aftermarket recurring revenue growth, and working capital initiatives have enabled reduction in our overall leverage ratios. We were expecting better revenues and bookings in the quarter, but were affected by the softer markets globally. However, despite these headwinds, we delivered strong earnings and significant cash flow generation in the quarter and year-to-date".
Working capital drops significantly
CECO Environmental Corp. has witnessed a decline in the working capital over the last year. It stood at $68.67 million as at Sep. 30, 2016, down 28.52 percent or $27.40 million from $96.07 million on Sep. 30, 2015. Current ratio was at 1.47 as on Sep. 30, 2016, down from 1.65 on Sep. 30, 2015.
Days sales outstanding went down to 68 days for the quarter compared with 78 days for the same period last year.
Days inventory outstanding has decreased to 16 days for the quarter compared with 36 days for the previous year period.
Debt comes down significantly
CECO Environmental Corp. has recorded a decline in total debt over the last one year. It stood at $138.75 million as on Sep. 30, 2016, down 28.59 percent or $55.54 million from $194.28 million on Sep. 30, 2015. Total debt was 24.69 percent of total assets as on Sep. 30, 2016, compared with 30.04 percent on Sep. 30, 2015. Debt to equity ratio was at 0.57 as on Sep. 30, 2016, down from 0.78 as on Sep. 30, 2015.
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