G K Services (GK) has reported 38.20 percent plunge in profit for the quarter ended Oct. 01, 2016. The company has earned $10.05 million, or $0.50 a share in the quarter, compared with $16.26 million, or $0.80 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $17.73 million, or $0.89 a share compared with $16.26 million or $0.80 a share, a year ago. Revenue during the quarter went up marginally by 1.62 percent to $241.02 million from $237.17 million in the previous year period. Gross margin for the quarter expanded 52 basis points over the previous year period to 34.71 percent. Total expenses were 92.28 percent of quarterly revenues, up from 88.25 percent for the same period last year. That has resulted in a contraction of 404 basis points in operating margin to 7.72 percent.
Operating income for the quarter was $18.60 million, compared with $27.88 million in the previous year period.
However, the adjusted operating income for the quarter stood at $30.67 million compared to $27.79 million in the prior year period. At the same time, adjusted operating margin improved 101 basis points in the quarter to 12.72 percent from 11.72 percent in the last year period.
"Our first quarter results demonstrate the underlying strength of our business, as our team continued to deliver solid profitability improvements and adjusted earnings growth," said Douglas A. Milroy, chairman and chief executive officer. "We remain confident that our pending merger with Cintas will be completed and look forward to closing the transaction later this fiscal year."
Operating cash flow improves significantlyG K Services has generated cash of $31.23 million from operating activities during the quarter, up 60.60 percent or $11.78 million, when compared with the last year period. The company has spent $8.87 million cash to meet investing activities during the quarter as against cash outgo of $15.73 million in the last year period.
The company has spent $19.34 million cash to carry out financing activities during the quarter as against cash outgo of $0.74 million in the last year period.
Cash and cash equivalents stood at $27.13 million as on Oct. 01, 2016, up 46.65 percent or $8.63 million from $18.50 million on Sep. 26, 2015.
Working capital remains almost stable
G K Services has recorded an increase in the working capital over the last year. It stood at $174.64 million as at Oct. 01, 2016, up 0.59 percent or $1.03 million from $173.62 million on Sep. 26, 2015. Current ratio was at 2.27 as on Oct. 01, 2016, up from 2.17 on Sep. 26, 2015.
Cash conversion cycle (CCC) has decreased to 19 days for the quarter from 109 days for the last year period. Days sales outstanding were almost stable at 38 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 10 days for the quarter compared with 101 days for the previous year period. At the same time, days payable outstanding was almost stable at 30 days for the quarter, when compared with the previous year period.
Debt comes down
G K Services has recorded a decline in total debt over the last one year. It stood at $220.55 million as on Oct. 01, 2016, down 14.20 percent or $36.51 million from $257.06 million on Sep. 26, 2015. Total debt was 23.98 percent of total assets as on Oct. 01, 2016, compared with 27.71 percent on Sep. 26, 2015. Debt to equity ratio was at 0.55 as on Oct. 01, 2016, down from 0.66 as on Sep. 26, 2015. Interest coverage ratio deteriorated to 9.49 for the quarter from 17.13 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
