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NOW Inc. (DNOW) saw its loss narrow to $23 million, or $0.21 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $63 million, or $0.59 a share. On the other hand, adjusted net loss for the quarter narrowed to $16 million, or $0.15 a share from a loss of $38 million or $0.35 a share, a year ago.
Revenue during the quarter grew 15.15 percent to $631 million from $548 million in the previous year period. Gross margin for the quarter expanded 219 basis points over the previous year period to 18.07 percent. Operating margin for the quarter stood at negative 3.33 percent as compared to a negative 11.86 percent for the previous year period.
Operating loss for the quarter was $21 million, compared with an operating loss of $65 million in the previous year period.
EBITDA for the quarter stood at negative $9 million compared to negative $51 million in the prior year second quarter. At the same time, EBITDA margin stood at negative 1.43 percent for the quarter compared to negative 9.31 percent in the last year period.
Robert Workman, president and chief executive officer of NOW Inc., remarked, "We are excited that rig count improvements from late last year materialized into tank battery facility construction in the quarter, driving our largest sequential revenue gains since before the downturn. We anticipate continuing momentum from North America rig count additions, offset slightly by normal seasonal Canadian break-up in the second quarter."
Working capital drops significantly
NOW Inc. has witnessed a decline in the working capital over the last year. It stood at $626 million as at Mar. 31, 2017, down 30.37 percent or $273 million from $899 million on Mar. 31, 2016. Current ratio was at 2.57 as on Mar. 31, 2017, down from 3.98 on Mar. 31, 2016. Cash conversion cycle (CCC) has decreased to 62 days for the quarter from 164 days for the last year period. Days sales outstanding went down to 64 days for the quarter compared with 75 days for the same period last year.
Days inventory outstanding has decreased to 43 days for the quarter compared with 131 days for the previous year period. At the same time, days payable outstanding went up to 45 days for the quarter from 41 for the same period last year.
Debt increases substantially
NOW Inc. has witnessed an increase in total debt over the last one year. It stood at $82 million as on Mar. 31, 2017, up 49.09 percent or $27 million from $55 million on Mar. 31, 2016. Now Inc has witnessed an increase in long-term debt over the last one year. It stood at $82 million as on Mar. 31, 2017, up 49.09 percent or $27 million from $55 million on Mar. 31, 2016. Total debt was 4.93 percent of total assets as on Mar. 31, 2017, compared with 3.16 percent on Mar. 31, 2016. Debt to equity ratio was at 0.07 as on Mar. 31, 2017, up from 0.04 as on Mar. 31, 2016.
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