Ferro Corporation (FOE) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $20.94 million, or $ 0.25 a share in the quarter, against a net profit of $50.59 million, or $0.58 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $22.67 million, or $0.27 a share compared with $16.21 million or $0.19 a share, a year ago.
Revenue during the quarter grew 6.17 percent to $281.34 million from $264.99 million in the previous year period. Gross margin for the quarter contracted 52 basis points over the previous year period to 28.31 percent. Operating margin for the quarter stood at negative 3.62 percent as compared to a positive 2.21 percent for the previous year period.
Operating loss for the quarter was $10.18 million, compared with an operating income of $5.86 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $45.22 million compared with $34.23 million in the prior year period. At the same time, adjusted EBITDA margin improved 316 basis points in the quarter to 16.07 percent from 12.92 percent in the last year period.
Peter Thomas, Ferro's chairman, president and chief executive officer, said, "Ferro delivered another strong quarter, capping a year that illustrates the success of our strategy to transform Ferro into a focused functional coatings and color solutions company that provides high-value products, technical solutions and services to our customers. "Looking ahead, we are excited about the opportunities for Ferro in 2017. We have additional opportunities for organic growth and a robust pipeline of potential acquisition targets. In February, we closed a very successful refinancing, which positions us to execute our growth strategy with greater capacity and flexibility. We intend to continue strengthening our product and technology portfolios, enhancing our market positions, and expanding our global reach to drive shareholder value."
For financial year 2017, Ferro Corporation projects revenue to grow in the range of 7 percent to 8 percent. The company forecasts diluted earnings per share to be in the range of $1.12 to $1.17 on adjusted basis.
Operating cash flow improves
Ferro Corporation has generated cash of $62.63 million from operating activities during the year, up 22.32 percent or $11.43 million, when compared with the last year. The company has spent $150.82 million cash to meet investing activities during the year as against cash outgo of $244.60 million in the last year. It has incurred net capital expenditure of $21.31 million on net basis during the year, down 49.79 percent or $21.13 million from year ago.
Cash flow from financing activities was $82 million for the year, down 31.51 percent or $37.73 million, when compared with the last year.
Cash and cash equivalents stood at $45.58 million as on Dec. 31, 2016, down 21.92 percent or $12.80 million from $58.38 million on Dec. 31, 2015.
Working capital remains almost stable
Working capital of Ferro Corporation remained almost stable for the quarter at $335.99 million, when compared with the previous year period. Current ratio was at 2.37 as on Dec. 31, 2016, down from 2.54 on Dec. 31, 2015.
Cash conversion cycle (CCC) has increased to 72 days for the quarter from 62 days for the last year period. Days sales outstanding went up to 49 days for the quarter compared with 46 days for the same period last year.
Days inventory outstanding has increased to 52 days for the quarter compared with 45 days for the previous year period. At the same time, days payable outstanding was almost stable at 29 days for the quarter, when compared with the previous year period.
Debt moves up
Ferro Corporation has witnessed an increase in total debt over the last one year. It stood at $574.48 million as on Dec. 31, 2016, up 21.31 percent or $100.93 million from $473.55 million on Dec. 31, 2015. Total debt was 44.75 percent of total assets as on Dec. 31, 2016, compared with 38.65 percent on Dec. 31, 2015. Debt to equity ratio was at 2.25 as on Dec. 31, 2016, up from 1.46 as on Dec. 31, 2015.
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