Preformed Line Products Company (PLPC) has reported a 42.89 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $1.52 million, or $0.30 a share in the quarter, compared with $2.66 million, or $0.51 a share for the same period last year.
Revenue during the quarter grew 7.48 percent to $84.57 million from $78.68 million in the previous year period. Gross margin for the quarter contracted 170 basis points over the previous year period to 29.17 percent. Total expenses were 97.33 percent of quarterly revenues, up from 95.31 percent for the same period last year. That has resulted in a contraction of 202 basis points in operating margin to 2.67 percent.
Operating income for the quarter was $2.26 million, compared with $3.69 million in the previous year period.
Rob Ruhlman, chairman and chief executive officer, said, "Despite intense competitive pricing pressure, sales increased seven percent. Gross profit increased less than two percent due to sales mix and the impact of inflation on input costs. Additionally, we had lower foreign currency transaction gains in 2017 compared to 2016, which negatively affected net income year over year. We are cautiously optimistic that investing in infrastructure will increase during 2017. Our technology and unique access to our markets provide superior value to our customers."
Working capital increases
Preformed Line Products Company has recorded an increase in the working capital over the last year. It stood at $140.12 million as at Mar. 31, 2017, up 6.36 percent or $8.37 million from $131.74 million on Mar. 31, 2016. Current ratio was at 3.51 as on Mar. 31, 2017, down from 3.61 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 96 days for the quarter from 158 days for the last year period. Days sales outstanding went down to 71 days for the quarter compared with 76 days for the same period last year.
Days inventory outstanding has decreased to 58 days for the quarter compared with 117 days for the previous year period. At the same time, days payable outstanding went down to 33 days for the quarter from 35 for the same period last year.
Debt increases substantially
Preformed Line Products Company has witnessed an increase in total debt over the last one year. It stood at $47.43 million as on Mar. 31, 2017, up 28.93 percent or $10.64 million from $36.79 million on Mar. 31, 2016. Total debt was 13.53 percent of total assets as on Mar. 31, 2017, compared with 11.12 percent on Mar. 31, 2016. Debt to equity ratio was at 0.21 as on Mar. 31, 2017, up from 0.16 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 7.55 for the quarter from 23.34 for the same period last year.
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