Foster L B Co (FSTR) saw its loss narrow to $5.98 million, or $0.58 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $57.42 million, or $5.60 a share. On an adjusted basis, net loss for the quarter was $0.04 million, when compared with net profit $6.46 million in the last year period.
Revenue during the quarter plunged 34.88 percent to $114.64 million from $176.06 million in the previous year period. Gross margin for the quarter contracted 320 basis points over the previous year period to 17.27 percent. Operating margin for the quarter stood at negative 7.60 percent as compared to a negative 39.33 percent for the previous year period.
Operating loss for the quarter was $8.71 million, compared with an operating loss of $69.24 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $4.11 million compared with $18.49 million in the prior year period. At the same time, adjusted EBITDA margin contracted 691 basis points in the quarter to 3.59 percent from 10.50 percent in the last year period.
Bob Bauer, president and chief executive officer, commented, "Our third quarter results reflect the continued weakness in the freight rail and energy markets that make up the majority of our served markets. In addition, lower steel prices continue to have an unfavorable impact on our distribution businesses, which have been losing revenue from declining prices and market weakness. We continue to position our business under the assumption that current market conditions persist, and we remain focused on executing our comprehensive cost management and efficiency initiatives. We have made great progress in aligning our costs with current and expected volumes. Since the first quarter of 2016, we have increased our target for expense reductions and have taken action on over $12.0 million of annual expense reductions."
Working capital drops significantly
Foster L B Co has witnessed a decline in the working capital over the last year. It stood at $95.53 million as at Sep. 30, 2016, down 40.74 percent or $65.67 million from $161.20 million on Sep. 30, 2015. Current ratio was at 2.22 as on Sep. 30, 2016, down from 2.68 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 64 days for the quarter from 87 days for the last year period. Days sales outstanding went up to 67 days for the quarter compared with 56 days for the same period last year.
Days inventory outstanding has decreased to 44 days for the quarter compared with 67 days for the previous year period. At the same time, days payable outstanding went up to 47 days for the quarter from 36 for the same period last year.
Debt comes down significantly
Foster L B Co has recorded a decline in total debt over the last one year. It stood at $135.62 million as on Sep. 30, 2016, down 34.64 percent or $71.87 million from $207.50 million on Sep. 30, 2015. Total debt was 32.98 percent of total assets as on Sep. 30, 2016, compared with 33.93 percent on Sep. 30, 2015. Debt to equity ratio was at 0.77 as on Sep. 30, 2016, up from 0.74 as on Sep. 30, 2015.
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