KEMET Corporation (KEM) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $5 million, or $ 0.11 a share in the quarter, against a net profit of $7.19 million, or $0.14 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $6.96 million, or $0.13 a share compared with $4.27 million or $0.09 a share, a year ago.
Revenue during the quarter went up marginally by 0.64 percent to $187.31 million from $186.12 million in the previous year period. Gross margin for the quarter expanded 178 basis points over the previous year period to 24.78 percent. Total expenses were 98.37 percent of quarterly revenues, up from 92.49 percent for the same period last year. That has resulted in a contraction of 589 basis points in operating margin to 1.63 percent.
Operating income for the quarter was $3.05 million, compared with $13.99 million in the previous year period.
However, the adjusted operating income for the quarter stood at $17.29 million compared to $16.23 million in the prior year period. At the same time, adjusted operating margin improved 51 basis points in the quarter to 9.23 percent from 8.72 percent in the last year period.
"We continue to meet or exceed our forecast, improve operating margins, and build our cash balance," stated Per Loof, KEMET's chief executive officer. "We announced further gross margin improvement actions this quarter that we expect will help us to maintain our gross margins at this level or higher. We have created significant operating leverage and are positioned well in our market segments and regions."
Operating cash flow turns positive
KEMET Corporation has generated cash of $23.04 million from operating activities during the first half as against cash outgo of $10.93 million in the last year period.
The company has spent $10.34 million cash to meet investing activities during the first six months as against cash outgo of $11.91 million in the last year period.
The company has spent $2.50 million cash to carry out financing activities during the first six months as against cash inflow of $3.44 million in the last year period.
Cash and cash equivalents stood at $74.75 million as on Sep. 30, 2016, up 100.33 percent or $37.44 million from $37.32 million on Sep. 30, 2015.
Working capital increases marginally
KEMET Corporation has recorded an increase in the working capital over the last year. It stood at $236.45 million as at Sep. 30, 2016, up 1.41 percent or $3.29 million from $233.16 million on Sep. 30, 2015. Current ratio was at 2.93 as on Sep. 30, 2016, up from 2.76 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 53 days for the quarter from 117 days for the last year period. Days sales outstanding went down to 45 days for the quarter compared with 47 days for the same period last year.
Days inventory outstanding has decreased to 54 days for the quarter compared with 118 days for the previous year period. At the same time, days payable outstanding went down to 46 days for the quarter from 47 for the same period last year.
Debt comes down marginally
KEMET Corporation has recorded a decline in total debt over the last one year. It stood at $386.10 million as on Sep. 30, 2016, down 2.27 percent or $8.98 million from $395.08 million on Sep. 30, 2015. Total debt was 57.03 percent of total assets as on Sep. 30, 2016, compared with 53.47 percent on Sep. 30, 2015. Debt to equity ratio was at 4.66 as on Sep. 30, 2016, up from 3.03 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 0.31 for the quarter from 1.43 for the same period last year.
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