Haynes International (HAYN) has reported 83.53 percent plunge in profit for the year ended Sep. 30, 2016. The company has earned $5.02 million, or $0.40 a share in the year, compared with $30.49 million, or $2.45 a share for the last year.     

Revenue during the year dropped 16.67 percent to $406.36 million from $487.64 million in the previous year. Gross margin for the year contracted 750 basis points over the previous year to 11.71 percent. Total expenses were 98.97 percent of annual revenues, up from 90.26 percent for the last year. That has resulted in a contraction of 871 basis points in operating margin to 1.03 percent.

Operating income for the year was $4.20 million, compared with $47.49 million in the previous year.

"In our fourth quarter of fiscal 2016, we achieved improved sequential revenue in our aerospace, chemical processing and other markets and stable revenue in our industrial gas turbine market compared to our third quarter of fiscal 2016. However, our gross profit margin percentage was lower due to a less profitable mix shipped during the quarter as compared to last quarter, and our transactional business during the quarter was weaker," said Mark Comerford, president and chief executive officer. "In addition, fixed cost absorption was impacted by our reduction of inventory over the quarter. Business conditions became more challenging in the fourth quarter as our order entry and backlog levels declined over the quarter. As a result, we are reducing production rates, inventory levels and costs in response to the slow base-business conditions as we see customers in cash conservation mode managing their inventories as the end of the calendar year approaches."

The company has spent $31.63 million cash to meet investing activities during the year as against cash outgo of $33.15 million in the last year.

The company has spent $11.50 million cash to carry out financing activities during the year as against cash outgo of $11.43 million in the last year period.

Cash and cash equivalents stood at $59.30 million as on Sep. 30, 2016, up 20.90 percent or $10.25 million from $49.04 million on Sep. 30, 2015.

Working capital declines
Haynes International has witnessed a decline in the working capital over the last year. It stood at $310.87 million as at Sep. 30, 2016, down 6.37 percent or $21.14 million from $332.02 million on Sep. 30, 2015. Current ratio was at 6.61 as on Sep. 30, 2016, down from 7.21 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 147 days for the year from 261 days for the last year. Days sales outstanding went up to 63 days for the year compared with 58 days for the same period last year.

Days inventory outstanding has decreased to 121 days for the year compared with 236 days for the previous year period. At the same time, days payable outstanding went up to 36 days for the year from 33 for the same period last year.