NOW Inc. (DNOW) saw its loss narrow to $71 million, or $0.66 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $249 million, or $2.33 a share. On the other hand, adjusted net loss excluding other costs for the quarter widened to $31 million, or $0.29 a share from a loss of $27 million or $0.25 a share, a year ago.
Revenue during the quarter dropped 16.46 percent to $538 million from $644 million in the previous year period. Gross margin for the quarter contracted 10 basis points over the previous year period to 16.36 percent. Operating margin for the quarter stood at negative 8.74 percent as compared to a negative 28.57 percent for the previous year period.
Operating loss for the quarter was $47 million, compared with an operating loss of $184 million in the previous year period.
However, the adjusted EBITDA excluding other costs for the quarter stood at negative $31 million compared to negative $32 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 5.76 percent for the quarter compared to negative 4.97 percent in the last year period.
Robert Workman, president and chief executive officer of NOW Inc., added, "As expected, Canadian and International revenues grew sequentially in the fourth quarter. Simultaneously, the average daily billings in the quarter grew ten percent sequentially, allowing the U.S. to beat our expectations of flat revenues for the fourth quarter. I am pleased that we finished the quarter with a $9 million sequential improvement in EBITDA excluding other costs. Operating losses narrowed by $6 million, resulting in 33 percent sequential flow-throughs. Finally, it is evident that third quarter rig count additions are beginning to translate into production facility construction. Assuming this trend continues into 2017, paired with a new supply chain services award in recent weeks from a large upstream oil and gas operator in the U.S., we are encouraged about 2017."
Working capital drops significantly
NOW Inc. has witnessed a decline in the working capital over the last year. It stood at $612 million as at Dec. 31, 2016, down 37.87 percent or $373 million from $985 million on Dec. 31, 2015. Current ratio was at 2.76 as on Dec. 31, 2016, down from 4.21 on Dec. 31, 2015.
Debt comes down significantly
NOW Inc. has recorded a decline in total debt over the last one year. It stood at $65 million as on Dec. 31, 2016, down 39.81 percent or $43 million from $108 million on Dec. 31, 2015. Now Inc has recorded a decline in long-term debt over the last one year. It stood at $65 million as on Dec. 31, 2016, down 39.81 percent or $43 million from $108 million on Dec. 31, 2015. Total debt was 4.05 percent of total assets as on Dec. 31, 2016, compared with 5.90 percent on Dec. 31, 2015. Debt to equity ratio was at 0.05 as on Dec. 31, 2016, down from 0.08 as on Dec. 31, 2015.
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