TIER REIT INC (TIER) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $98.17 million, or $ 2.04 a share in the quarter, against a net loss of $12.71 million, or $0.27 a share in the last year period.
Revenue during the quarter dropped 17.69 percent to $56.36 million from $68.48 million in the previous year period.
Cost of revenue dropped 26.77 percent or $8.52 million during the quarter to $23.31 million. Gross margin for the quarter expanded 513 basis points over the previous year period to 58.64 percent.
Total expenses were $53.55 million for the quarter, down 28.80 percent or $21.66 million from year-ago period. Operating margin for the quarter period stood at positive 5 percent as compared to a negative 9.83 percent for the previous year period.
Operating income for the quarter was $2.82 million, compared with an operating loss of $6.73 million in the previous year period.
For financial year 2017, the company projects diluted earnings per share to be in the range of $2.06 to $2.16.
"Year to date, we have disposed of over $300 million in properties located outside of our target growth markets," stated Scott Fordham, chief executive officer and president of TIER REIT. "We've also commenced development of Third + Shoal in downtown Austin and increased our investment activities in the highly sought-after submarket of The Domain in northwest Austin, including the acquisition of our partner’s interest in Domain 2 and Domain 7 earlier this year. As a result of these recycling efforts, we are pleased to announce that over 85% of our net operating income is now derived from our target growth markets."
Net receivables were at $61 million as on Mar. 31, 2017, down 22.36 percent or $17.57 million from year-ago. Accounts payable surged 6,112.59 percent or $50.98 million to $51.81 million on Mar. 31, 2017.
Real estate investments stood at $40.42 million as on Mar. 31, 2017, down 55.09 percent or $49.58 million from year-ago.
Total assets declined 12.64 percent or $225.88 million to $1,561.42 million on Mar. 31, 2017. On the other hand, total liabilities were at $849.70 million as on Mar. 31, 2017, down 25.66 percent or $293.25 million from year-ago.
Return on assets was at 0.13 percent in the quarter against a negative 0.35 percent in the last year period. Return on equity was at 13.79 percent in the quarter against a negative 1.97 percent in the last year period.
Debt comes down significantly
Total debt was at $773.90 million as on Mar. 31, 2017, down 25.08 percent or $259.07 million from year-ago. Shareholders equity stood at $711.72 million as on Mar. 31, 2017, up 10.45 percent or $67.37 million from year-ago. As a result, debt to equity ratio went down 52 basis points to 1.09 percent in the quarter.
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