NOW Inc. (DNOW) saw its loss narrow to $56 million, or $0.53 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $224 million, or $2.09 a share.
Revenue during the quarter plunged 30.94 percent to $520 million from $753 million in the previous year period. Gross margin for the quarter expanded 119 basis points over the previous year period to 16.73 percent. Operating margin for the quarter stood at negative 10.19 percent as compared to a negative 38.65 percent for the previous year period.
Operating loss for the quarter was $53 million, compared with an operating loss of $291 million in the previous year period.
Robert Workman, president and chief executive officer of NOW Inc., added "Emerging from what we hope was the bottom of this cycle in the second quarter, North American rig count grew in the third quarter. We posted improved performance as warehousing, selling and administrative costs and capital expenditures were lower than forecast while working capital efficiency gains are still proving fruitful and enabling us to produce free cash flow. International offshore softness and seasonal holiday implications suggest a choppy recovery. Our focus remains on deepening customer and supplier relationships, calibrating our business to the market and further leveraging legacy and acquired businesses to strengthen and expand our competitive position in the market."
Working capital drops significantly
NOW Inc.has witnessed a decline in the working capital over the last year. It stood at $732 million as at Sep. 30, 2016, down 35.96 percent or $411 million from $1,143 million on Sep. 30, 2015. Current ratio was at 3.51 as on Sep. 30, 2016, down from 3.94 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 89 days for the quarter from 150 days for the last year period. Days sales outstanding went up to 89 days for the quarter compared with 75 days for the same period last year.
Days inventory outstanding has decreased to 57 days for the quarter compared with 120 days for the previous year period. At the same time, days payable outstanding went up to 56 days for the quarter from 45 for the same period last year.
Debt moves up
NOW Inc. has witnessed an increase in total debt over the last one year. It stood at $145 million as on Sep. 30, 2016, up 20.83 percent or $25 million from $120 million on Sep. 30, 2015. Now Inc has witnessed an increase in long-term debt over the last one year. It stood at $145 million as on Sep. 30, 2016, up 20.83 percent or $25 million from $120 million on Sep. 30, 2015. Total debt was 8.47 percent of total assets as on Sep. 30, 2016, compared with 5.49 percent on Sep. 30, 2015. Debt to equity ratio was at 0.11 as on Sep. 30, 2016, up from 0.07 as on Sep. 30, 2015.
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