Spectrum Brands Holdings, Inc. (SPB) has reported an 11.41 percent fall in profit for the quarter ended Jan. 01, 2017. The company has earned $65.20 million, or $1.10 a share in the quarter, compared with $73.60 million, or $1.24 a share for the same period last year. On an adjusted basis, earnings per share were at $1.21 for the quarter compared with $1.01 in the same period last year. Revenue during the quarter went down marginally by 0.57 percent to $1,211.80 million from $1,218.80 million in the previous year period. Gross margin for the quarter expanded 98 basis points over the previous year period to 37.13 percent. Total expenses were 87.54 percent of quarterly revenues, down from 88.31 percent for the same period last year. This has led to an improvement of 77 basis points in operating margin to 12.46 percent.
Operating income for the quarter was $151 million, compared with $142.50 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $214.20 million compared with $207.10 million in the prior year period. At the same time, adjusted EBITDA margin improved 68 basis points in the quarter to 17.68 percent from 16.99 percent in the last year period.
"We delivered solid first quarter adjusted EBITDA and adjusted earnings per share growth with strong margin expansion despite a continuation of foreign currency headwinds," said Andreas Rouvé, chief executive officer of Spectrum Brands Holdings. “These results maintain the momentum from our record fiscal 2016 and provide a good start to achieving an 8th consecutive year of record financial performance in fiscal 2017. “Hardware and Home Improvement delivered record results, the performance of global batteries and small appliances was excellent and, regionally, Europe, Latin America, Canada and Asia-Pacific reported solid organic adjusted EBITDA growth," Mr. Rouvé said.
Operating cash flow turns positive
Spectrum Brands Holdings, Inc. has generated cash of $5.80 million from operating activities during the quarter as against cash outgo of $223.50 million in the last year period. The company has spent $28.70 million cash to meet investing activities during the quarter as against cash outgo of $17.30 million in the last year period. It has incurred capital expenditure of $27.90 million on net basis during the quarter, up 61.27 percent or $10.60 million from year ago period.
The company has spent $102.70 million cash to carry out financing activities during the quarter as against cash inflow of $158 million in the last year period.
Cash and cash equivalents stood at $143.30 million as on Jan. 01, 2017, down 11.54 percent or $18.70 million from $162 million on Jan. 03, 2016.
Working capital drops significantly
Spectrum Brands Holdings, Inc. has witnessed a decline in the working capital over the last year. It stood at $681.80 million as at Jan. 01, 2017, down 25.63 percent or $235 million from $916.80 million on Jan. 03, 2016. Current ratio was at 1.79 as on Jan. 01, 2017, down from 2.16 on Jan. 03, 2016.
Cash conversion cycle (CCC) has decreased to 21 days for the quarter from 83 days for the last year period. Days sales outstanding went down to 43 days for the quarter compared with 46 days for the same period last year.
Days inventory outstanding has decreased to 48 days for the quarter compared with 101 days for the previous year period. At the same time, days payable outstanding went up to 70 days for the quarter from 64 for the same period last year.
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