Pinnacle Foods Inc. (PF) has reported 8.85 percent rise in profit for the quarter ended Sep. 25, 2016. The company has earned $52.35 million, or $0.44 a share in the quarter, compared with $48.10 million, or $0.41 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $62.80 million, or $0.53 a share compared with $54.60 million or $0.46 a share, a year ago.

Revenue during the quarter grew 19.26 percent to $758.82 million from $636.29 million in the previous year period. Gross margin for the quarter expanded 234 basis points over the previous year period to 30.14 percent. Total expenses were 84.41 percent of quarterly revenues, down from 84.63 percent for the same period last year. This has led to an improvement of 22 basis points in operating margin to 15.59 percent.

Operating income for the quarter was $118.27 million, compared with $97.79 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $161.64 million compared with $131.13 million in the prior year period. At the same time, adjusted EBITDA margin improved 69 basis points in the quarter to 21.30 percent from 20.61 percent in the last year period.

Pinnacle Foods chief executive officer Mark Clouse stated, "The third quarter was another good one for us, particularly given the strong year-ago performance we were lapping. We maintained our momentum in North America Retail, fueled by the continued strength of our Frozen segment, while Boulder Brands also delivered another strong quarter. Our focus on improving gross margin continued to be evident in our results, with our Q3 adjusted margin again advancing significantly. We believe our fourth quarter plans position us well as we approach year-end and, as a result, we have increased our Adjusted diluted EPS for 2016 to the high end of our previous range."
 

For financial year 2016, the company forecasts diluted earnings per share to be in the range of $2.13 to $2.15 on adjusted basis.

The company has spent $1,061.99 million cash to meet investing activities during the nine month period as against cash outgo of $82.90 million in the last year period.

Cash flow from financing activities was $806.17 million for the nine month period as against cash outgo of $92.64 million in the last year period.

Cash and cash equivalents stood at $164.93 million as on Sep. 25, 2016, up 125.86 percent or $91.91 million from $73.02 million on Sep. 27, 2015.
 

Working capital increases sharply
Pinnacle Foods Inc. has recorded an increase in the working capital over the last year. It stood at $515.64 million as at Sep. 25, 2016, up 33.28 percent or $128.76 million from $386.89 million on Sep. 27, 2015. Current ratio was at 2 as on Sep. 25, 2016, up from 1.93 on Sep. 27, 2015.

Cash conversion cycle (CCC) has decreased to 36 days for the quarter from 70 days for the last year period. Days sales outstanding were almost stable at 30 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 43 days for the quarter compared with 80 days for the previous year period. At the same time, days payable outstanding went down to 37 days for the quarter from 39 for the same period last year.