Zayo Group Holdings, Inc. (ZAYO) swung to a net profit for the quarter ended Dec. 31, 2016. The company has made a net profit of $19.80 million, or $ 0.08 a share in the quarter, against a net loss of $10.80 million, or $0.04 a share in the last year period.
Revenue during the quarter surged 37.09 percent to $506.70 million from $369.60 million in the previous year period. Gross margin for the quarter contracted 515 basis points over the previous year period to 64.50 percent. Total expenses were 82.10 percent of quarterly revenues, down from 84.12 percent for the same period last year. This has led to an improvement of 202 basis points in operating margin to 17.90 percent.
Operating income for the quarter was $90.70 million, compared with $58.70 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $263.40 million compared with $218.90 million in the prior year period. At the same time, adjusted EBITDA margin contracted 724 basis points in the quarter to 51.98 percent from 59.23 percent in the last year period.
Operating cash flow improves
Zayo Group Holdings, Inc. has generated cash of $402.50 million from operating activities during the first half, up 17.90 percent or $61.10 million, when compared with the last year period.
The company has spent $421.70 million cash to meet investing activities during the first six months as against cash outgo of $449.60 million in the last year period.
The company has spent $2.70 million cash to carry out financing activities during the first six months as against cash outgo of $20.90 million in the last year period.
Cash and cash equivalents stood at $144 million as on Dec. 31, 2016, down 18.27 percent or $32.20 million from $176.20 million on Dec. 31, 2015.
Working capital turns negative
Working capital of Zayo Group Holdings, Inc. has turned negative to $95.40 million on Dec. 31, 2016 from positive $11.50 million on Dec. 31, 2015. Current ratio was at 0.79 as on Dec. 31, 2016, down from 1.03 on Dec. 31, 2015.
Days sales outstanding went up to 22 days for the quarter compared with 21 days for the same period last year.
At the same time, days payable outstanding went down to 20 days for the quarter from 42 for the same period last year.
Debt moves up
Zayo Group Holdings, Inc. has witnessed an increase in total debt over the last one year. It stood at $4,175.70 million as on Dec. 31, 2016, up 12.79 percent or $473.50 million from $3,702.20 million on Dec. 31, 2015. Total debt was 60.80 percent of total assets as on Dec. 31, 2016, compared with 59.01 percent on Dec. 31, 2015. Debt to equity ratio was at 3.24 as on Dec. 31, 2016, up from 2.97 as on Dec. 31, 2015. Interest coverage ratio improved to 1.69 for the quarter from 1.15 for the same period last year.
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