MRC Global (MRC) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $40 million, or $ 0.48 a share in the quarter, against a net profit of $16 million, or $0.10 a share in the last year period.
Revenue during the quarter dropped 25.96 percent to $793 million from $1,071 million in the previous year period. Gross margin for the quarter contracted 618 basis points over the previous year period to 11.10 percent. Operating margin for the quarter stood at negative 4.54 percent as compared to a positive 4.01 percent for the previous year period.
Operating loss for the quarter was $36 million, compared with an operating income of $43 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $24 million compared with $51 million in the prior year period. At the same time, adjusted EBITDA margin contracted 174 basis points in the quarter to 3.03 percent from 4.76 percent in the last year period.
Andrew R. Lane, MRC Global’s president and chief executive officer stated, "This quarter’s revenue was improved over the previous quarter, which is the first quarter of sequential revenue growth since 2014. I am encouraged by the 15% sequential growth in our U.S. upstream business. MRC Global generated $82 million in cash from operations this quarter for a total of $230 million in cash from operations generated so far this year, exceeding our initial expectation."
Operating cash flow drops significantlyMRC Global has generated cash of $230 million from operating activities during the nine month period, down 52.18 percent or $251 million, when compared with the last year period. Cash flow from investing activities was $25 million for the nine month period as against cash outgo of $27 million in the last year period.
The company has spent $112 million cash to carry out financing activities during the nine month period as against cash outgo of $441 million in the last year period.
Cash and cash equivalents stood at $213 million as on Sep. 30, 2016, up 546.55 percent or $180.06 million from $32.94 million on Sep. 30, 2015.
Working capital declines
MRC Global has witnessed a decline in the working capital over the last year. It stood at $817 million as at Sep. 30, 2016, down 22.25 percent or $233.85 million from $1,050.85 million on Sep. 30, 2015. Current ratio was at 2.81 as on Sep. 30, 2016, down from 2.82 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 57 days for the quarter from 119 days for the last year period. Days sales outstanding went up to 70 days for the quarter compared with 61 days for the same period last year.
Days inventory outstanding has decreased to 38 days for the quarter compared with 100 days for the previous year period. At the same time, days payable outstanding went up to 50 days for the quarter from 42 for the same period last year.
Debt comes downMRC Global has recorded a decline in total debt over the last one year. It stood at $515 million as on Sep. 30, 2016, down 22.42 percent or $148.79 million from $663.79 million on Sep. 30, 2015. Total debt was 22.06 percent of total assets as on Sep. 30, 2016, compared with 20.75 percent on Sep. 30, 2015. Debt to equity ratio was at 0.44 as on Sep. 30, 2016, up from 0.38 as on Sep. 30, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
