Essendant Inc. (ESND) saw its loss narrow to $2.35 million, or $0.06 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $95.84 million, or $2.61 a share. On an adjusted basis, net loss for the quarter stood at $0.88 million, or $0.02 a share compared with a net profit of $30.04 million, or $0.81 a share in the last year period.
Revenue during the quarter dropped 3.29 percent to $1,254.70 million from $1,297.33 million in the previous year period. Gross margin for the quarter contracted 232 basis points over the previous year period to 13.16 percent. Operating margin for the quarter stood at negative 0.13 percent as compared to a negative 6.11 percent for the previous year period.
Operating loss for the quarter was $1.66 million, compared with an operating loss of $79.22 million in the previous year period.
However, the adjusted operating income for the quarter stood at $3.33 million compared to $54.07 million in the prior year period. At the same time, adjusted operating margin contracted 390 basis points in the quarter to 0.27 percent from 4.17 percent in the last year period.
"We continued to move aggressively in the fourth quarter to advance our transformation program and strengthen our balance sheet as we reposition Essendant to drive earnings growth," said Robert B. Aiken, Jr., president and chief executive officer of Essendant.
Outlook for 2017: Net sales expected to be flat to down 4%.
Operating cash flow declines
Essendant Inc. has generated cash of $130.94 million from operating activities during the year, down 19.54 percent or $31.79 million, when compared with the last year.
The company has spent $3.77 million cash to meet investing activities during the year as against cash outgo of $67.93 million in the last year. It has incurred net capital expenditure of $3.77 million on net basis during the year, down 86.62 percent or $24.40 million from year ago.
The company has spent $135.96 million cash to carry out financing activities during the year as against cash outgo of $84.99 million in the last year period.
Cash and cash equivalents stood at $21.33 million as on Dec. 31, 2016, down 28.86 percent or $8.65 million from $29.98 million on Dec. 31, 2015.
Working capital declines
Essendant Inc. has witnessed a decline in the working capital over the last year. It stood at $926.02 million as at Dec. 31, 2016, down 6.13 percent or $60.50 million from $986.52 million on Dec. 31, 2015. Current ratio was at 2.36 as on Dec. 31, 2016, down from 2.39 on Dec. 31, 2015.
Debt comes down
Essendant Inc. has recorded a decline in total debt over the last one year. It stood at $608.97 million as on Dec. 31, 2016, down 14.99 percent or $107.35 million from $716.32 million on Dec. 31, 2015. Total debt was 28.15 percent of total assets as on Dec. 31, 2016, compared with 31.66 percent on Dec. 31, 2015. Debt to equity ratio was at 0.78 as on Dec. 31, 2016, down from 0.99 as on Dec. 31, 2015.
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