Park-Ohio Holdings Corp. (PKOH) has reported 2.27 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $13.50 million, or $1.10 a share in the quarter, compared with $13.20 million, or $1.06 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $13.90 million, or $1.13 a share compared with $13.70 million or $1.10 a share, a year ago.
Revenue during the quarter dropped 14.19 percent to $312.70 million from $364.40 million in the previous year period. Gross margin for the quarter expanded 27 basis points over the previous year period to 17.36 percent. Total expenses were 93.32 percent of quarterly revenues, up from 92.48 percent for the same period last year. That has resulted in a contraction of 84 basis points in operating margin to 6.68 percent.
Operating income for the quarter was $20.90 million, compared with $27.40 million in the previous year period.
Edward F. Crawford, chairman and chief executive officer, stated, "Improving profitability continued in the third quarter of 2016. We are expecting revenues in some of our key end markets to begin expansion in early 2017."
For fiscal year 2016, Park-Ohio Holdings Corp. expects diluted earnings per share to be in the range of $2.75 to $2.95. The company expects diluted earnings per share to be in the range of $3.10 to $3.30 on adjusted basis.
Operating cash flow improves significantly
Park-Ohio Holdings Corp. has generated cash of $40.80 million from operating activities during the nine month period, up 248.72 percent or $29.10 million, when compared with the last year period.
The company has spent $20.30 million cash to meet investing activities during the nine month period as against cash outgo of $31.10 million in the last year period.
The company has spent $24.40 million cash to carry out financing activities during the nine month period as against cash inflow of $27 million in the last year period.
Cash and cash equivalents stood at $57.70 million as on Sep. 30, 2016, down 7.97 percent or $5 million from $62.70 million on Sep. 30, 2015.
Working capital declines
Park-Ohio Holdings Corp. has witnessed a decline in the working capital over the last year. It stood at $326.70 million as at Sep. 30, 2016, down 12.37 percent or $46.10 million from $372.80 million on Sep. 30, 2015. Current ratio was at 2.43 as on Sep. 30, 2016, down from 2.54 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 62 days for the quarter from 96 days for the last year period. Days sales outstanding went up to 66 days for the quarter compared with 63 days for the same period last year.
Days inventory outstanding has decreased to 45 days for the quarter compared with 76 days for the previous year period. At the same time, days payable outstanding went up to 49 days for the quarter from 43 for the same period last year.
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