Cleantech Solutions International (CLNT) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $0.36 million, or $ 0.07 a share in the quarter, against a net profit of $0.90 million, or $0.23 a share in the last year period. Revenue during the quarter plunged 66.92 percent to $3.98 million from $12.03 million in the previous year period. Gross margin for the quarter contracted 389 basis points over the previous year period to 12.75 percent. Operating margin for the quarter stood at negative 7.72 percent as compared to a positive 10.64 percent for the previous year period.
Operating loss for the quarter was $0.31 million, compared with an operating income of $1.28 million in the previous year period.
"In the third quarter of 2016, China continued to face economic headwinds along with limited availability of credit. This, combined with government actions requiring textile manufacturers in Zhejiang province to temporarily cease operations in order to improve air quality ahead of the G20 Summit held in Hangzhou this September of 2016, further suppressed demand in our core dyeing equipment segment resulting in fewer orders for the quarter. Furthermore, our forged rolled rings and related components saw another period of declining revenue and operating losses and we generated no revenue in the quarter from the petroleum and chemical equipment segment. In view of their performance thus far in 2016, we are evaluating the viability of both segments on an ongoing basis," said Mr. Jianhua Wu, chairman and chief executive officer of Cleantech Solutions. "During the quarter, we reached a settlement over a contract dispute with a former customer in the petroleum and chemical segment and made a payment of approximately $5.6 million to resolve this matter. With this issue behind us, we can now focus our attention on our core dyeing machine business and pursuing other strategic opportunities to help improve the long-term prospects of the Company."
Operating cash flow turns negativeCleantech Solutions International has spent $4.61 million cash to meet operating activities during the nine month period as against cash inflow of $11.30 million in the last year period. The company has spent $2.45 million cash to meet investing activities during the nine month period as against cash outgo of $0.01 million in the last year period.
Cash flow from financing activities was $0.61 million for the nine month period, up 275.18 percent or $0.45 million, when compared with the last year period.
Cash and cash equivalents stood at $11.91 million as on Sep. 30, 2016, down 36.20 percent or $6.76 million from $18.67 million on Sep. 30, 2015.
Working capital declines
Cleantech Solutions International has witnessed a decline in the working capital over the last year. It stood at $25.93 million as at Sep. 30, 2016, down 19.92 percent or $6.45 million from $32.38 million on Sep. 30, 2015. Current ratio was at 4.62 as on Sep. 30, 2016, up from 4.48 on Sep. 30, 2015.
Cash conversion cycle (CCC) has increased to 326 days for the quarter from 134 days for the last year period. Days sales outstanding went up to 398 days for the quarter compared with 138 days for the same period last year.
Days inventory outstanding was almost stable at 39 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 112 days for the quarter from 43 for the same period last year.
Debt comes down
Cleantech Solutions International has recorded a decline in total debt over the last one year. It stood at $3.12 million as on Sep. 30, 2016, down 16.39 percent or $0.61 million from $3.73 million on Sep. 30, 2015. Cleantech Solutions International has recorded a decline in short-term debt over the last one year. Total debt was 3.68 percent of total assets as on Sep. 30, 2016, compared with 3.49 percent on Sep. 30, 2015. Debt to equity ratio was almost stable at 0.04 as on Sep. 30, 2016, when compared with the 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
