Neff Corporation (NEFF) has reported a 9.38 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $2.90 million, or $0.31 a share in the quarter, compared with $3.20 million, or $0.27 a share for the same period last year. On an adjusted basis, earnings per share were at $0.41 for the quarter compared with $0.51 in the same period last year.
Revenue during the quarter grew 6.14 percent to $105.50 million from $99.40 million in the previous year period. Gross margin for the quarter contracted 32 basis points over the previous year period to 51.18 percent. Total expenses were 74.50 percent of quarterly revenues, up from 74.14 percent for the same period last year. That has resulted in a contraction of 36 basis points in operating margin to 25.50 percent.
Operating income for the quarter was $26.90 million, compared with $25.70 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $51.90 million compared with $50.80 million in the prior year period. At the same time, adjusted EBITDA margin contracted 191 basis points in the quarter to 49.19 percent from 51.11 percent in the last year period.
Graham Hood, Chief Executive Officer of Neff Corporation, commented, “The third quarter of 2016 was another solid quarter for Neff’s rental business as we generated record third quarter results for rental revenues, which increased by 5.8% year-over-year. This performance reflects our ability to execute our strategy and take advantage of the ongoing strength in the construction markets we serve. We expect this strength to continue for the remainder of 2016 and into 2017.”
Neff Corporation forecasts revenue to be in the range of $390 million to $400 million for fiscal year 2016.
Operating cash flow improves
Neff Corporation has generated cash of $111 million from operating activities during the nine month period, up 11.33 percent or $11.30 million, when compared with the last year period.
The company has spent $101.30 million cash to meet investing activities during the nine month period as against cash outgo of $132.20 million in the last year period. It has incurred net capital expenditure of $101.30 million on net basis during the nine month period, down 23.37 percent or $30.90 million from year ago period.
The company has spent $9.10 million cash to carry out financing activities during the nine month period as against cash inflow of $32.50 million in the last year period.
Cash and cash equivalents stood at $0.80 million as on Sep. 30, 2016, up 244.83 percent or $0.57 million from $0.23 million on Sep. 30, 2015.
Debt comes down marginally
Neff Corporation has recorded a decline in total debt over the last one year. It stood at $733.80 million as on Sep. 30, 2016, down 2.79 percent or $21.10 million from $754.90 million on Sep. 30, 2015. Short-term debt stood at $733.80 million as on Sep. 30, 2016. Total debt was 109 percent of total assets as on Sep. 30, 2016, compared with 115.02 percent on Sep. 30, 2015. Interest coverage ratio improved to 2.54 for the quarter from 2.36 for the same period last year.
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