Innospec Inc. (IOSP) has reported a 29.84 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $22.10 million, or $0.90 a share in the quarter, compared with $31.50 million, or $1.28 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $27 million, or $1.09 a share compared with $30.50 million or $1.24 a share, a year ago.
Revenue during the quarter dropped 3.33 percent to $237.80 million from $246 million in the previous year period. Gross margin for the quarter expanded 335 basis points over the previous year period to 38.44 percent. Total expenses were 86.42 percent of quarterly revenues, up from 86.06 percent for the same period last year. That has resulted in a contraction of 36 basis points in operating margin to 13.58 percent.
Operating income for the quarter was $32.30 million, compared with $34.30 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $36.30 million compared with $39.80 million in the prior year period. At the same time, adjusted EBITDA margin contracted 91 basis points in the quarter to 15.26 percent from 16.18 percent in the last year period.
Commenting on the results, Patrick S. Williams, president and chief executive officer, said, "Innospec has ended the year as we expected with a strong quarter, with all of our strategic businesses delivering at or above expectations. Excluding Octane Additives, sales were up 4 percent on the same quarter last year. Margins remain strong with good cost control, helping us deliver an excellent underlying adjusted EPS of $1.09 for the quarter."
Operating cash flow declines
Innospec Inc. has generated cash of $104.50 million from operating activities during the year, down 11.21 percent or $13.20 million, when compared with the last year.
The company has spent $209.10 million cash to meet investing activities during the year as against cash inflow of $15 million in the last year.
Cash flow from financing activities was $70.50 million for the year as against cash outgo of $36.30 million in the last year period.
Cash and cash equivalents stood at $101.90 million as on Dec. 31, 2016, down 25.57 percent or $35 million from $136.90 million on Dec. 31, 2015.
Working capital increases marginally
Innospec Inc. has recorded an increase in the working capital over the last year. It stood at $258 million as at Dec. 31, 2016, up 2.14 percent or $5.40 million from $252.60 million on Dec. 31, 2015. Current ratio was at 2.41 as on Dec. 31, 2016, up from 2.23 on Dec. 31, 2015.
Debt increases substantially
Innospec Inc. has witnessed an increase in total debt over the last one year. It stood at $273.30 million as on Dec. 31, 2016, up 102.90 percent or $138.60 million from $134.70 million on Dec. 31, 2015. Total debt was 23.13 percent of total assets as on Dec. 31, 2016, compared with 13.08 percent on Dec. 31, 2015. Debt to equity ratio was at 0.42 as on Dec. 31, 2016, up from 0.22 as on Dec. 31, 2015. Interest coverage ratio improved to 32.30 for the quarter from 31.18 for the same period last year.
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