MTS Systems Corporation (MTSC) has reported an 140.13 percent jump in profit for the quarter ended Apr. 01, 2017. The company has earned $7.20 million, or $0.38 a share in the quarter, compared with $3 million, or $0.20 a share for the same period last year. On an adjusted basis, the company has earned $12.88 million, or $0.67 a share for the quarter.
Revenue during the quarter surged 41.08 percent to $193.42 million from $137.10 million in the previous year period. Gross margin for the quarter expanded 784 basis points over the previous year period to 40.77 percent. Total expenses were 92.03 percent of quarterly revenues, down from 96.81 percent for the same period last year. This has led to an improvement of 478 basis points in operating margin to 7.97 percent.
Operating income for the quarter was $15.41 million, compared with $4.37 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $33.26 million.
"The second quarter of fiscal year 2017 was the third quarter in a row where we saw double-digit organic revenue growth and very strong overall growth with the additional revenue from the PCB acquisition. We continue to improve our Test backlog conversion rates, increase Test gross margin rates and drive solid top and bottom line growth throughout the business. The integration of PCB continues to progress as anticipated, which is translating into additional revenue and earnings in our Sensors segment. Test orders remained a challenge in the second quarter, however we believe the low point is now behind us and anticipate consistent and meaningful improvements in Test order rates throughout the second half of the year and into fiscal year 2018," said Dr. Jeffrey A. Graves, president and chief executive officer of MTS Systems.
For financial year 2017, MTS Systems Corporation forecasts revenue to be in the range of $760 million to $790 million. The company projects net income to be in the range of $15.40 million to $23 million. It expects diluted earnings per share to be in the range of $0.80 to $1.20.
Working capital increases sharply
MTS Systems Corporation has recorded an increase in the working capital over the last year. It stood at $222.26 million as at Apr. 01, 2017, up 52.90 percent or $76.89 million from $145.36 million on Apr. 02, 2016. Current ratio was at 2.05 as on Apr. 01, 2017, up from 1.67 on Apr. 02, 2016.
Cash conversion cycle (CCC) has decreased to 105 days for the quarter from 171 days for the last year period. Days sales outstanding went down to 85 days for the quarter compared with 114 days for the same period last year.
Days inventory outstanding has decreased to 50 days for the quarter compared with 92 days for the previous year period. At the same time, days payable outstanding went down to 30 days for the quarter from 35 for the same period last year.
Debt increases substantially
MTS Systems Corporation has witnessed an increase in total debt over the last one year. It stood at $460.02 million as on Apr. 01, 2017, up 2,050.91 percent or $438.63 million from $21.39 million on Apr. 02, 2016. Long-term debt stood at $449.80 million as on Apr. 01, 2017. Total debt was 39.25 percent of total assets as on Apr. 01, 2017, compared with 4.29 percent on Apr. 02, 2016. Debt to equity ratio was at 1.14 as on Apr. 01, 2017, up from 0.08 as on Apr. 02, 2016.
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