CSW INDUSTRIALS, INC. (CSWI) has reported 79.73 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $0.40 million, or $0.03 a share in the quarter, compared with $2 million, or $0.13 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $4.19 million, or $0.26 a share compared with $3.81 million or $0.24 a share, a year ago. 

Revenue during the quarter grew 6.46 percent to $75.50 million from $70.92 million in the previous year period. Gross margin for the quarter contracted 706 basis points over the previous year period to 38.28 percent. Total expenses were 95.52 percent of quarterly revenues, up from 92.07 percent for the same period last year. That has resulted in a contraction of 345 basis points in operating margin to 4.48 percent.

Operating income for the quarter was $3.38 million, compared with $5.62 million in the previous year period.

However, the adjusted operating income for the quarter stood at $6.56 million compared to $6.65 million in the prior year period. At the same time, adjusted operating margin contracted 68 basis points in the quarter to 8.69 percent from 9.37 percent in the last year period.

Joseph B. Armes, CSW Industrials' chief executive officer, commented, "We were pleased to see strong growth in our architecturally specified building products resulting from market penetration of smoke curtains and growth in our HVAC and plumbing markets. While our Specialty Chemicals and Coatings, Sealants and Adhesives segments continue to work through challenging end markets, we remain focused on revenue diversification initiatives to broaden end market penetration. Additionally, we continue to make good progress optimizing those businesses to increase profitability through our restructuring and realignment initiatives, and when combined with our global procurement initiatives, we expect these efforts to yield significant annualized savings."

Cash flow from investing activities was $4.77 million for the nine month period as against cash outgo of $97.93 million in the last year period. It has incurred net capital expenditure of $6.68 million on net basis during the nine month period, up 11.18 percent or $0.67 million from year ago period.

The company has spent $41.64 million cash to carry out financing activities during the nine month period as against cash inflow of $91.25 million in the last year period.

Cash and cash equivalents stood at $20.41 million as on Dec. 31, 2016, down 60.01 percent or $30.64 million from $51.05 million on Dec. 31, 2015.

Working capital drops significantly
CSW INDUSTRIALS has witnessed a decline in the working capital over the last year. It stood at $101.30 million as at Dec. 31, 2016, down 26.50 percent or $36.53 million from $137.83 million on Dec. 31, 2015. Current ratio was at 3.75 as on Dec. 31, 2016, down from 5.67 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 93 days for the quarter from 171 days for the last year period. Days sales outstanding went down to 65 days for the quarter compared with 67 days for the same period last year.

Days inventory outstanding has decreased to 52 days for the quarter compared with 130 days for the previous year period. At the same time, days payable outstanding went down to 24 days for the quarter from 26 for the same period last year.