Koppers Holdings, Inc. (KOP) has reported a 19.80 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $12.10 million, or $0.58 a share in the quarter, compared with $10.10 million, or $0.49 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $20.90 million, or $0.99 a share compared with $13.80 million or $0.67 a share, a year ago.
Revenue during the quarter dropped 14.45 percent to $371.10 million from $433.80 million in the previous year period. Gross margin for the quarter expanded 353 basis points over the previous year period to 20.75 percent. Total expenses were 92.54 percent of quarterly revenues, down from 93.78 percent for the same period last year. This has led to an improvement of 124 basis points in operating margin to 7.46 percent.
Operating income for the quarter was $27.70 million, compared with $27 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $50.80 million compared with $48.50 million in the prior year period. At the same time, adjusted EBITDA margin improved 251 basis points in the quarter to 13.69 percent from 11.18 percent in the last year period.
Commenting on the quarter, President and CEO Leroy Ball said, "Our strong operating performance in the third quarter demonstrates that our strategy continues to build momentum. Our systematic approach of reducing our dependence on highly cyclical industries tied to oil and aluminum while becoming an enterprise focused on wood preservation and wood protection is gaining traction. The PC business continued to strengthen its market-leading position and benefited from near-peak consumer trends for high-retention treated wood products.
For fiscal year 2016, Koppers Holdings, Inc. projects revenue to be $1,400 million. The company expects diluted earnings per share to be in the range of $2.40 to $2.54 on adjusted basis.
Operating cash flow declines
Koppers Holdings, Inc. has generated cash of $82.50 million from operating activities during the nine month period, down 13.25 percent or $12.60 million, when compared with the last year period.
The company has spent $36.70 million cash to meet investing activities during the nine month period as against cash outgo of $27 million in the last year period.
The company has spent $44.60 million cash to carry out financing activities during the nine month period as against cash outgo of $96.30 million in the last year period.
Cash and cash equivalents stood at $17.70 million as on Sep. 30, 2016, down 46.36 percent or $15.30 million from $33 million on Sep. 30, 2015.
Working capital declines
Koppers Holdings, Inc. has witnessed a decline in the working capital over the last year. It stood at $161.20 million as at Sep. 30, 2016, down 22.46 percent or $46.70 million from $207.90 million on Sep. 30, 2015. Current ratio was at 1.57 as on Sep. 30, 2016, down from 1.71 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 34 days for the quarter from 59 days for the last year period. Days sales outstanding went up to 49 days for the quarter compared with 45 days for the same period last year.
Days inventory outstanding has decreased to 34 days for the quarter compared with 55 days for the previous year period. At the same time, days payable outstanding went up to 49 days for the quarter from 41 for the same period last year.
Debt comes down
Koppers Holdings, Inc. has recorded a decline in total debt over the last one year. It stood at $681.50 million as on Sep. 30, 2016, down 10.69 percent or $81.60 million from $763.10 million on Sep. 30, 2015. Total debt was 61.91 percent of total assets as on Sep. 30, 2016, compared with 61.67 percent on Sep. 30, 2015. Debt to equity ratio was at 27.59 as on Sep. 30, 2016, up from 10.13 as on Sep. 30, 2015. Interest coverage ratio improved to 2.37 for the quarter from 2.14 for the same period last year.
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