Rexnord (RXN) has reported 86.89 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $3.20 million, or $0.02 a share in the quarter, compared with $24.40 million, or $0.24 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $25.90 million, or $0.25 a share compared with $43 million or $0.42 a share, a year ago. 

Revenue during the quarter went down marginally by 1.83 percent to $451.80 million from $460.20 million in the previous year period. Gross margin for the quarter contracted 53 basis points over the previous year period to 33.86 percent. Total expenses were 92.74 percent of quarterly revenues, up from 89.46 percent for the same period last year. That has resulted in a contraction of 328 basis points in operating margin to 7.26 percent.

Operating income for the quarter was $32.80 million, compared with $48.50 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $79.20 million compared with $92.10 million in the prior year period. At the same time, adjusted EBITDA margin contracted 248 basis points in the quarter to 17.53 percent from 20.01 percent in the last year period.  

Todd Adams, president and chief executive officer, commented, "Our third-quarter earnings were in line with our guidance, with solid operating execution offsetting a modestly greater-than-expected revenue impact from currency translation. On our bottom line, the one-penny impact on earnings per share from the accrual of the preferred dividend in the quarter was offset by a penny benefit on the tax line. We made good progress with our strategic initiatives during the quarter, and we are nearing completion of our Supply Chain Optimization and Footprint Repositioning program that remains on track to deliver $30 million of annual savings. Leveraging RBS continues to be at the core of what is driving the transition of our business toward our goals of better organic growth and improved profitability and cash flow."

For fiscal year 2017, the company expects diluted earnings per share to be in the range of $0.60 to $0.66, the company expects diluted earnings per share to be in the range of $1.27 to $1.33 on adjusted basis.

The company has spent $255.80 million cash to meet investing activities during the nine month period as against cash outgo of $20.50 million in the last year period. It has incurred net capital expenditure of $42.10 million on net basis during the nine month period, up 94.91 percent or $20.50 million from year ago period.

Cash flow from financing activities was $88.60 million for the nine month period as against cash outgo of $58.40 million in the last year period.

Cash and cash equivalents stood at $429.30 million as on Dec. 31, 2016, down 1.63 percent or $7.10 million from $436.40 million on Dec. 31, 2015.

Working capital remains almost stable
Working capital of Rexnord remained almost stable for the quarter at $738.80 million, when compared with the previous year period. Current ratio was at 3.01 as on Dec. 31, 2016, up from 2.92 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 57 days for the quarter from 112 days for the last year period. Days sales outstanding went up to 62 days for the quarter compared with 58 days for the same period last year.

Days inventory outstanding has decreased to 52 days for the quarter compared with 111 days for the previous year period. At the same time, days payable outstanding was almost stable at 57 days for the quarter, when compared with the previous year period.