Pool Corporation (POOL) has reported a 5.19 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $2.62 million, or $0.06 a share in the quarter, compared with $2.49 million, or $0.06 a share for the same period last year.
Revenue during the quarter grew 7.27 percent to $445.24 million from $415.08 million in the previous year period. Gross margin for the quarter expanded 20 basis points over the previous year period to 28.70 percent. Total expenses were 97.81 percent of quarterly revenues, down from 98.56 percent for the same period last year. This has led to an improvement of 75 basis points in operating margin to 2.19 percent.
Operating income for the quarter was $9.74 million, compared with $5.98 million in the previous year period.
"2016 proved to be a year of excellent results. We are pleased with the solid sales growth and even stronger profit growth, which we attribute to a combination of favorable weather and strong execution. We yet again increased our operating margin, achieving 10.0% in 2016, by leveraging infrastructure and process improvements. This is what can be achieved with a focused team of professionals who effectively grow our business while adding exceptional value to our customers' and vendors' businesses," commented Manuel Perez de la Mesa, president and chief executive officer.
For financial year 2017, the company forecasts diluted earnings per share to be in the range of $3.80 to $4.00.
Operating cash flow improves
Pool Corporation has generated cash of $165.38 million from operating activities during the year, up 13.23 percent or $19.33 million, when compared with the last year.
The company has spent $55.64 million cash to meet investing activities during the year as against cash outgo of $37.79 million in the last year.
The company has spent $99.67 million cash to carry out financing activities during the year as against cash outgo of $107.80 million in the last year period.
Cash and cash equivalents stood at $21.96 million as on Dec. 31, 2016, up 65.87 percent or $8.72 million from $13.24 million on Dec. 31, 2015.
Working capital increases
Pool Corporation has recorded an increase in the working capital over the last year. It stood at $399.34 million as at Dec. 31, 2016, up 11.89 percent or $42.44 million from $356.90 million on Dec. 31, 2015. Current ratio was at 2.35 as on Dec. 31, 2016, up from 2.17 on Dec. 31, 2015.
Cash conversion cycle (CCC) has increased to 54 days for the quarter from 53 days for the last year period. Days sales outstanding were almost stable at 17 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 70 days for the quarter compared with 74 days for the previous year period. At the same time, days payable outstanding went down to 33 days for the quarter from 38 for the same period last year.
Debt increases substantially
Pool Corporation has witnessed an increase in total debt over the last one year. It stood at $438.04 million as on Dec. 31, 2016, up 33.53 percent or $110 million from $328.04 million on Dec. 31, 2015. Total debt was 44.06 percent of total assets as on Dec. 31, 2016, compared with 35.05 percent on Dec. 31, 2015. Debt to equity ratio was at 2.13 as on Dec. 31, 2016, up from 1.28 as on Dec. 31, 2015.
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