Armstrong World Industries (AWI) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $30.40 million, or $ 0.56 a share in the quarter, against a net loss of $9.90 million, or $0.18 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $30 million, or $0.55 a share compared with $28 million or $0.50 a share, a year ago.
Revenue during the quarter grew 9.74 percent to $315.40 million from $287.40 million in the previous year period. Gross margin for the quarter expanded 215 basis points over the previous year period to 31.48 percent. Total expenses were 80.03 percent of quarterly revenues, down from 92.48 percent for the same period last year. This has led to an improvement of 1246 basis points in operating margin to 19.97 percent.
Operating income for the quarter was $63 million, compared with $21.60 million in the previous year period.
However, the adjusted operating income for the quarter stood at $57 million compared to $52 million in the prior year period. At the same time, adjusted operating margin contracted 2 basis points in the quarter to 18.07 percent from 18.09 percent in the last year period.
"We remain focused on changing the growth trajectory of our business over the long term through our product innovation, best-in-class service and new platforms in the Architectural Specialties category," said Vic Grizzle, chief executive officer. "Our double digit sales growth this quarter reflects the initial success of those strategic initiatives, as well as improved market activity."
Armstrong World Industries forecasts revenue to grow in the range of 5 percent to 7 percent for the fiscal year 2017.
Operating cash flow turns positive Armstrong World Industries has generated cash of $10.60 million from operating activities during the quarter as against cash outgo of $65 million in the last year period.
The company has spent $37.50 million cash to meet investing activities during the quarter as against cash outgo of $10.30 million in the last year period.
The company has spent $36.10 million cash to carry out financing activities during the quarter as against cash outgo of $20.10 million in the last year period.
Cash and cash equivalents stood at $81 million as on Mar. 31, 2017, down 45.93 percent or $68.80 million from $149.80 million on Mar. 31, 2016.
Working capital drops significantly
Armstrong World Industries has witnessed a decline in the working capital over the last year. It stood at $132.40 million as at Mar. 31, 2017, down 67.72 percent or $277.80 million from $410.20 million on Mar. 31, 2016. Current ratio was at 1.60 as on Mar. 31, 2017, down from 2.01 on Mar. 31, 2016.
Days sales outstanding went down to 28 days for the quarter compared with 66 days for the same period last year.
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