Sterling Construction Company, Inc (STRL) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $2.42 million, or $ 0.10 a share in the quarter, against a net loss of $2.89 million, or $0.12 a share in the last year period. Revenue during the quarter plunged 60.59 percent to $205.63 million from $521.78 million in the previous year period. Gross margin for the quarter expanded 120 basis points over the previous year period to 8.28 percent. Total expenses were 98.21 percent of quarterly revenues, down from 99.89 percent for the same period last year. This has led to an improvement of 167 basis points in operating margin to 1.79 percent.
Operating income for the quarter was $3.67 million, compared with $0.59 million in the previous year period.
Paul J. Varello, Sterling’s Chief executive officer, commented, “We generated revenues in the third quarter that were in-line with our expectations heading into the period, and meaningfully stronger than in the third quarter of 2015. Net income, however, was below our expectations as our Texas subsidiary (TSC) continued to lag in profitability. While TSC has been making headway in burning off its low margin legacy backlog and beginning to execute more of its higher margin contracts, both have occurred at a slower pace than we’d previously forecast as a result of challenging weather conditions in the first half of the year and slower ramp up of new work driven by owner delays. Fortunately, this drag was partially offset by strong performances by our other business units, which enabled us to deliver year-over-year improvement on our bottom line. We are also very pleased with our increasing average margin in backlog, which reflects our selective and more disciplined bidding process and improved project execution.”
For the fourth-quarter, Sterling Construction CompanyInc expects revenue to be in the range of $150 million to $170 million.
Working capital decreases marginally
Sterling Construction Company, Inc has witnessed a decline in the working capital over the last year. It stood at $40.63 million as at Sep. 30, 2016, down 2.23 percent or $0.93 million from $41.56 million on Sep. 30, 2015. Current ratio was at 1.25 as on Sep. 30, 2016, down from 1.36 on Sep. 30, 2015. Cash conversion cycle (CCC) has increased to 14 days for the quarter from 8 days for the last year period. Days sales outstanding went up to 51 days for the quarter compared with 20 days for the same period last year.
Days inventory outstanding was almost stable at 1 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 37 days for the quarter from 13 for the same period last year.
Debt comes down significantly
Sterling Construction Company, Inc has recorded a decline in total debt over the last one year. It stood at $11.60 million as on Sep. 30, 2016, down 67.47 percent or $24.08 million from $35.68 million on Sep. 30, 2015. Total debt was 3.54 percent of total assets as on Sep. 30, 2016, compared with 12.27 percent on Sep. 30, 2015. Debt to equity ratio was at 0.10 as on Sep. 30, 2016, down from 0.29 as on Sep. 30, 2015. Interest coverage ratio improved to 7.48 for the quarter from 0.27 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
