Pioneer Power Solutions, Inc. (PPSI) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $0.32 million, or $ 0.04 a share in the quarter, against a net loss of $3.55 million, or $0.48 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $0.86 million, or $0.10 a share compared with $0.20 million or $0.03 a share, a year ago.
Revenue during the quarter grew 17.91 percent to $29.39 million from $24.92 million in the previous year period. Gross margin for the quarter expanded 202 basis points over the previous year period to 22.24 percent. Operating margin for the quarter period stood at positive 4.12 percent as compared to a negative 13.37 percent for the previous year period.
Operating income for the quarter was $1.21 million, compared with an operating loss of $3.33 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $2.08 million compared with $1.06 million in the prior year period. At the same time, adjusted EBITDA margin improved 284 basis points in the quarter to 7.08 percent from 4.24 percent in the last year period.
Nathan Mazurek, Pioneer's chairman and chief executive officer, said, "The operational improvements we made in recent quarters to expand the profitability of our business drove a $4.5 million improvement in operating income, and a $2.1 million in Adjusted EBITDA. We are focused on further improving the profitability of the company and have identified additional efficiencies to deliver on this initiative. We are relocating our remaining dry type transformer manufacturing business operation in Canada to our lower-cost facility in Mexico, which will improve both gross and operating margin and expand our opportunities to drive revenue growth in this product line as well. Simultaneously, we are focusing on higher margin opportunities, and working to further improve efficiency, capacity utilization and overall operations in our other divisions, to drive further profit enhancement. We expect to recognize the benefits of these initiatives in 2017 and beyond."
For financial year 2016, Pioneer Power Solutions, Inc. expects revenue to be in the range of $117 million to $127 million. It projects diluted earnings per share to be in the range of $0.55 to $0.66 on adjusted basis for the same period.
Working capital turns positive
Working capital of Pioneer Power Solutions, Inc. has turned positive to $6.44 million on Sep. 30, 2016 from negative $1.28 million on Sep. 30, 2015. Current ratio was at 1.15 as on Sep. 30, 2016, up from 0.96 on Sep. 30, 2015.
Days sales outstanding went down to 53 days for the quarter compared with 57 days for the same period last year.
Days inventory outstanding has decreased to 54 days for the quarter compared with 73 days for the previous year period.
Debt increases substantially
Pioneer Power Solutions, Inc. has witnessed an increase in total debt over the last one year. It stood at $27.69 million as on Sep. 30, 2016, up 60.85 percent or $10.48 million from $17.22 million on Sep. 30, 2015. Total debt was 34.65 percent of total assets as on Sep. 30, 2016, compared with 23.72 percent on Sep. 30, 2015. Debt to equity ratio was at 0.96 as on Sep. 30, 2016, up from 0.62 as on Sep. 30, 2015.
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