Engility Holdings, Inc. (EGL) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $16.76 million, or $ 0.46 a share in the quarter, against a net profit of $3.65 million, or $0.10 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $19.42 million, or $0.52 a share compared with $22.72 million or $0.61 a share, a year ago.
Revenue during the quarter dropped 10.28 percent to $511.80 million from $570.46 million in the previous year period. Gross margin for the quarter expanded 15 basis points over the previous year period to 14.89 percent. Total expenses were 92.80 percent of quarterly revenues, down from 93.95 percent for the same period last year. This has led to an improvement of 116 basis points in operating margin to 7.20 percent.
Operating income for the quarter was $36.87 million, compared with $34.50 million in the previous year period.
However, the adjusted operating income for the quarter stood at $44.13 million compared to $52.06 million in the prior year period. At the same time, adjusted operating margin contracted 50 basis points in the quarter to 8.62 percent from 9.13 percent in the last year period.
"In the third quarter, we reported solid results and generated record contract awards that drove our year-to-date book-to-bill ratio to 1.4x," said Lynn Dugle, chief executive officer of Engility. "We made significant progress on our other strategic objectives as we successfully refinanced our debt, which will enhance future cash flow and profitability, and strengthened our senior leadership team."
For financial year 2016, Engility Holdings, Inc. projects revenue to be in the range of $2,050 million to $2,100 million. The company forecasts diluted loss per share to be in the range of $0.12 to $0.02. The company forecasts diluted earnings per share to be in the range of $1.56 to $1.66 on adjusted basis.
Operating cash flow improves significantly
Engility Holdings, Inc. has generated cash of $84.74 million from operating activities during the nine month period, up 39.99 percent or $24.21 million, when compared with the last year period.
The company has spent $17.94 million cash to meet investing activities during the nine month period as against cash inflow of $12.88 million in the last year period
The company has spent $36.14 million cash to carry out financing activities during the nine month period as against cash outgo of $4.64 million in the last year period.
Cash and cash equivalents stood at $60.69 million as on Sep. 30, 2016, down 20.04 percent or $15.21 million from $75.90 million on Sep. 30, 2015.
Working capital drops significantly
Engility Holdings, Inc. has witnessed a decline in the working capital over the last year. It stood at $109.18 million as at Sep. 30, 2016, down 29.20 percent or $45.02 million from $154.19 million on Sep. 30, 2015. Current ratio was at 1.32 as on Sep. 30, 2016, down from 1.42 on Sep. 30, 2015.
Days sales outstanding went up to 70 days for the quarter compared with 65 days for the same period last year.
At the same time, days payable outstanding was almost stable at 13 days for the quarter, when compared with the previous year period.
Debt comes down
Engility Holdings, Inc. has recorded a decline in total debt over the last one year. It stood at $1,081.54 million as on Sep. 30, 2016, down 5.87 percent or $67.48 million from $1,149.02 million on Sep. 30, 2015. Total debt was 48.41 percent of total assets as on Sep. 30, 2016, compared with 44.39 percent on Sep. 30, 2015. Debt to equity ratio was at 1.55 as on Sep. 30, 2016, up from 1.22 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 0.72 for the quarter from 1.10 for the same period last year.
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