INC Research Holdings, Inc (INCR) has reported a 21.73 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $21.19 million, or $0.38 a share in the quarter, compared with $17.40 million, or $0.31 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $33.06 million, or $0.60 a share compared with $32.48 million or $0.58 a share, a year ago. Revenue during the quarter dropped 7.55 percent to $381.92 million from $413.09 million in the previous year period. Gross margin for the quarter expanded 199 basis points over the previous year period to 25.46 percent. Total expenses were 90.90 percent of quarterly revenues, down from 92.13 percent for the same period last year. This has led to an improvement of 123 basis points in operating margin to 9.10 percent.
Operating income for the quarter was $34.75 million, compared with $32.51 million in the previous year period.
However, the adjusted operating income for the quarter was almost stable at $51.96 million when compared with the prior year period. At the same time, adjusted operating margin improved 97 basis points in the quarter to 13.61 percent from 12.63 percent in the last year period.
“INC Research is off to a strong start in 2017, with record gross awards and continued expansion of capabilities in key areas of importance to our customers,” said chief executive officer Alistair Macdonald. “INC’s ability to work in a variety of flexible outsourcing models - full service, functional service, or a hybrid of both - is resonating increasingly with our customers, as demonstrated by our robust awards and strategic partnership opportunities secured during the quarter.”
INC Research Holdings, Inc forecasts revenue to be in the range of $1,040 million to $1,070 million for fiscal year 2017. For financial year 2017, INC Research Holdings, Inc projects net income to be in the range of $113 million to $119.50 million. For the financial year 2017, INC Research Holdings, Inc expects adjusted net income to be in the range of $147.50 million to $152 million. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $2.04 to $2.15. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $2.66 to $2.74 on adjusted basis.
Operating cash flow turns positive
INC Research Holdings, Inc has generated cash of $75.70 million from operating activities during the quarter as against cash outgo of $0.65 million in the last year period. The company has spent $10.57 million cash to meet investing activities during the quarter as against cash outgo of $4.77 million in the last year period.
The company has spent $6.02 million cash to carry out financing activities during the quarter as against cash outgo of $26.45 million in the last year period.
Cash and cash equivalents stood at $164.40 million as on Mar. 31, 2017, up 209.14 percent or $111.22 million from $53.18 million on Mar. 31, 2016.
Working capital turns positive
Working capital of INC Research Holdings, Inc has turned positive to $80.90 million on Mar. 31, 2017 from negative $22.81 million on Mar. 31, 2016. Current ratio was at 1.18 as on Mar. 31, 2017, up from 0.95 on Mar. 31, 2016.
Days sales outstanding went up to 76 days for the quarter compared with 73 days for the same period last year.
At the same time, days payable outstanding went down to 7 days for the quarter from 9 for the same period last year.
Debt moves up marginally
INC Research Holdings, Inc has witnessed an increase in total debt over the last one year. It stood at $487.87 million as on Mar. 31, 2017, up 3.31 percent or $15.63 million from $472.23 million on Mar. 31, 2016. Total debt was 37.77 percent of total assets as on Mar. 31, 2017, compared with 38.44 percent on Mar. 31, 2016. Debt to equity ratio was at 1.45 as on Mar. 31, 2017, down from 1.87 as on Mar. 31, 2016. Interest coverage ratio improved to 11.21 for the quarter from 10.82 for the same period last year.
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