Schweitzer-Mauduit International Inc (SWM) has reported a 21.66 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $17 million, or $0.55 a share in the quarter, compared with $21.70 million, or $0.72 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $24.20 million, or $0.80 a share compared with $27.70 million or $0.91 a share, a year ago.
Revenue during the quarter dropped 5.29 percent to $198.70 million from $209.80 million in the previous year period. Gross margin for the quarter expanded 44 basis points over the previous year period to 31.81 percent. Total expenses were 96.88 percent of quarterly revenues, up from 88.23 percent for the same period last year. That has resulted in a contraction of 865 basis points in operating margin to 3.12 percent.
Operating income for the quarter was $6.20 million, compared with $24.70 million in the previous year period.
However, the adjusted operating income for the quarter stood at $30.90 million compared to $32.70 million in the prior year period. At the same time, adjusted operating margin contracted 4 basis points in the quarter to 15.55 percent from 15.59 percent in the last year period.
Frederic Villoutreix, chairman of the board and chief executive officer, commented, "We closed 2016 on a very positive note regarding our financial performance and the announced acquisition of Conwed. Despite lower sales and earnings compared to a very strong fourth quarter last year, our results were better than expected due to continued strong execution within Engineered Papers. As a result, full year Adjusted EPS was $3.26, exceeding our guidance of $3.15. For the full year, EP performed significantly better than we anticipated, Argotec hit our accretion target, and currency translation was less impactful than originally assumed, while DelStar and our Chinese JVs performed below our expectations. In 2016, we generated approximately $100 million of free cash flow and announced another 5% dividend increase, building our track record for dividend growth and demonstrating our commitment to a balanced capital allocation strategy."
Operating cash flow declines
Schweitzer-Mauduit International Inc has generated cash of $129.70 million from operating activities during the year, down 10.37 percent or $15 million, when compared with the last year.
The company has spent $22.40 million cash to meet investing activities during the year as against cash outgo of $313.70 million in the last year.
The company has spent $185.70 million cash to carry out financing activities during the year as against cash inflow of $92.40 million in the last year period.
Cash and cash equivalents stood at $107.40 million as on Dec. 31, 2016, down 42.41 percent or $79.10 million from $186.50 million on Dec. 31, 2015.
Debt comes down
Schweitzer-Mauduit International Inc has recorded a decline in total debt over the last one year. It stood at $440.40 million as on Dec. 31, 2016, down 22.94 percent or $131.10 million from $571.50 million on Dec. 31, 2015. Total debt was 37.52 percent of total assets as on Dec. 31, 2016, compared with 44.30 percent on Dec. 31, 2015. Debt to equity ratio was at 0.87 as on Dec. 31, 2016, down from 1.22 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 1.55 for the quarter from 5.61 for the same period last year.
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