Essendant Inc. (ESND) swung to a net loss for the quarter ended Mar. 31, 2017. The company has made a net loss of $188.59 million, or $ 5.15 a share in the quarter, against a net profit of $16.53 million, or $0.45 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $9.18 million, or $0.25 a share compared with $16.68 million or $0.45 a share, a year ago.
Revenue during the quarter dropped 6.13 percent to $1,269.38 million from $1,352.30 million in the previous year period. Gross margin for the quarter contracted 17 basis points over the previous year period to 14.63 percent. Operating margin for the quarter stood at negative 14.67 percent as compared to a positive 2.40 percent for the previous year period.
Operating loss for the quarter was $186.18 million, compared with an operating income of $32.40 million in the previous year period.
However, the adjusted operating income for the quarter stood at $21.60 million compared to $32.66 million in the prior year period. At the same time, adjusted operating margin contracted 71 basis points in the quarter to 1.70 percent from 2.42 percent in the last year period.
"Our first quarter operating results reflect the impact of our transformation initiatives which enabled us to deliver sequential earnings growth," said Robert B. Aiken, Jr., president and chief executive officer of Essendant. "We are pleased to be building momentum behind our initiatives, including improvement in our industrial supplies category, and we are on track to enhance Essendant's long-term earnings power, while recognizing we still have work to do to improve our top line. Our transformation actions are centered upon driving merchandising excellence through better sourcing and assortment and stronger alignment between our pricing and our cost to serve."
For financial year 2017, Net sales are expected to be flat to down 4%.
Operating cash flow turns positive
Essendant Inc. has generated cash of $53.02 million from operating activities during the quarter as against cash outgo of $10.82 million in the last year period.
The company has spent $8.31 million cash to meet investing activities during the quarter as against cash outgo of $9.60 million in the last year period.
The company has spent $43.44 million cash to carry out financing activities during the quarter as against cash inflow of $25.60 million in the last year period.
Cash and cash equivalents stood at $22.64 million as on Mar. 31, 2017, down 36.11 percent or $12.79 million from $35.43 million on Mar. 31, 2016.
Working capital declines
Essendant Inc. has witnessed a decline in the working capital over the last year. It stood at $889.02 million as at Mar. 31, 2017, down 11.67 percent or $117.50 million from $1,006.52 million on Mar. 31, 2016. Current ratio was at 2.31 as on Mar. 31, 2017, down from 2.44 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 41 days for the quarter from 79 days for the last year period. Days sales outstanding were almost stable at 49 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 34 days for the quarter compared with 72 days for the previous year period. At the same time, days payable outstanding was almost stable at 42 days for the quarter, when compared with the previous year period.
Debt comes down
Essendant Inc. has recorded a decline in total debt over the last one year. It stood at $571.47 million as on Mar. 31, 2017, down 24.20 percent or $182.43 million from $753.90 million on Mar. 31, 2016. Total debt was 29.76 percent of total assets as on Mar. 31, 2017, compared with 32.98 percent on Mar. 31, 2016. Debt to equity ratio was at 0.97 as on Mar. 31, 2017, down from 1.03 as on Mar. 31, 2016.
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
