KLX Inc. (KLX) swung to a net profit for the quarter ended Jan. 31, 2017. The company has made a net profit of $19 million, or $ 0.36 a share in the quarter, against a net loss of $10.30 million, or $0.20 a share in the last year period. On an adjusted basis, net profit for the quarter stood at $27.60 million, or $0.53 a share compared with a net loss of $4.60 million, or $0.09 a share in the last year period.
Revenue during the quarter grew 6.64 percent to $382 million from $358.20 million in the previous year period. Gross margin for the quarter expanded 350 basis points over the previous year period to 24.19 percent. Total expenses were 90.45 percent of quarterly revenues, down from 99.39 percent for the same period last year. This has led to an improvement of 894 basis points in operating margin to 9.55 percent.
Operating income for the quarter was $36.50 million, compared with $2.20 million in the previous year period.
However, the adjusted operating income for the quarter stood at $36.50 million compared to $2.20 million in the prior year period. At the same time, adjusted operating margin improved 894 basis points in the quarter to 9.55 percent from 0.61 percent in the last year period.
Amin J. Khoury, KLX's chairman and chief executive officer, stated, "We are pleased to report our fourth quarter results and the progress we continue to make in each of our businesses. As we announced in January, ASG won new programs, which together with other awards won earlier in the year are valued at approximately $500 million, all of which represent significant market share gains. These recently won programs are expected to support ASG’s growth trajectory beginning, particularly, in the second half of 2017."
For the financial year 2017, KLX Inc. projects revenue to grow at 10 percent. The company forecasts adjusted net income to grow at 40 percent. It forecasts operating income to grow at 45 percent.
Operating cash flow drops significantly
KLX Inc. has generated cash of $152.90 million from operating activities during the year, down 29.60 percent or $64.30 million, when compared with the last year.
The company has spent $258.30 million cash to meet investing activities during the year as against cash outgo of $134.80 million in the last year.
The company has spent $43.40 million cash to carry out financing activities during the year as against cash outgo of $99.10 million in the last year period.
Cash and cash equivalents stood at $277.30 million as on Jan. 31, 2017, down 35.18 percent or $150.50 million from $427.80 million on Jan. 31, 2016.
Working capital decreases marginally
KLX Inc. has witnessed a decline in the working capital over the last year. It stood at $1,712.40 million as at Jan. 31, 2017, down 2.79 percent or $49.20 million from $1,761.60 million on Jan. 31, 2016. Current ratio was at 7.66 as on Jan. 31, 2017, down from 7.74 on Jan. 31, 2016.
Days sales outstanding went up to 36 days for the quarter compared with 33 days for the same period last year.
Days inventory outstanding has increased to 215 days for the quarter compared with 210 days for the previous year period.
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