Federal Signal Corporation (FSS) has reported a 46.32 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $7.30 million, or $0.12 a share in the quarter, compared with $13.60 million, or $0.22 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $8.50 million, or $0.14 a share compared with $11.70 million or $0.19 a share, a year ago.
Revenue during the quarter went up marginally by 2.89 percent to $177.80 million from $172.80 million in the previous year period. Gross margin for the quarter contracted 291 basis points over the previous year period to 24.52 percent. Total expenses were 93.64 percent of quarterly revenues, up from 90.68 percent for the same period last year. That has resulted in a contraction of 296 basis points in operating margin to 6.36 percent.
Operating income for the quarter was $11.30 million, compared with $16.10 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $18.90 million compared with $20.80 million in the prior year period. At the same time, adjusted EBITDA margin contracted 141 basis points in the quarter to 10.63 percent from 12.04 percent in the last year period.
"We were expecting a soft first quarter, but were pleased to report results that exceeded both revenue and earnings expectations," commented Jennifer L. Sherman, president and chief executive officer. "We were encouraged by the significant sequential and year-over-year increase in orders, particularly within our legacy businesses. We also saw a sequential increase in orders for the distribution of new product lines acquired in connection with the JJE transaction. We are starting to see signs of some momentum on the industrial side and are making good progress with our initiative to expand into the utility market, while our municipal markets continue to be steady overall."
For financial year 2017, the company projects diluted earnings per share to be in the range of $0.70 to $0.78 on adjusted basis.
Operating cash flow turns positive Federal Signal Corp has generated cash of $13.70 million from operating activities during the quarter as against cash outgo of $5.40 million in the last year period.
The company has spent $2.20 million cash to meet investing activities during the quarter as against cash inflow of $73.60 million in the last year period.
The company has spent $5.60 million cash to carry out financing activities during the quarter as against cash outgo of $67 million in the last year period.
Cash and cash equivalents stood at $56.80 million as on Mar. 31, 2017, down 26.52 percent or $20.50 million from $77.30 million on Mar. 31, 2016.
Working capital decreases marginally
Federal Signal Corp has witnessed a decline in the working capital over the last year. It stood at $182.50 million as at Mar. 31, 2017, down 2.30 percent or $4.30 million from $186.80 million on Mar. 31, 2016. Current ratio was at 3.01 as on Mar. 31, 2017, down from 3.08 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 55 days for the quarter from 81 days for the last year period. Days sales outstanding went down to 39 days for the quarter compared with 42 days for the same period last year.
Days inventory outstanding has decreased to 43 days for the quarter compared with 66 days for the previous year period. At the same time, days payable outstanding was almost stable at 27 days for the quarter, when compared with the previous year period.
Debt increases substantially Federal Signal Corp has witnessed an increase in total debt over the last one year. It stood at $64.50 million as on Mar. 31, 2017, up 10,650 percent or $63.90 million from $0.60 million on Mar. 31, 2016. Total debt was 9.89 percent of total assets as on Mar. 31, 2017, compared with 0.10 percent on Mar. 31, 2016. Interest coverage ratio deteriorated to 18.83 for the quarter from 40.25 for the same period 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
