Kadant Inc (KAI) has reported a 30.18 percent jump in profit for the quarter ended Apr. 01, 2017. The company has earned $8.95 million, or $0.80 a share in the quarter, compared with $6.88 million, or $0.62 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $8.95 million, or $0.80 a share compared with $7.97 million or $0.72 a share, a year ago. Revenue during the quarter grew 6.55 percent to $102.86 million from $96.54 million in the previous year period. Gross margin for the quarter expanded 208 basis points over the previous year period to 47.63 percent. Total expenses were 88.29 percent of quarterly revenues, down from 89.55 percent for the same period last year. This has led to an improvement of 126 basis points in operating margin to 11.71 percent.
Operating income for the quarter was $12.05 million, compared with $10.09 million in the previous year period.
“We had a strong start to 2017 with better-than-expected revenue and excellent EPS performance in the first quarter,” said Jonathan Painter, president and chief executive officer. “Our EPS performance was driven by a strong gross margin, which benefited from record parts and consumables revenue. Our parts and consumables aftermarket business has been a long-standing strategic focus of ours and I am pleased to see these positive results.
For the second-quarter, Kadant expects revenue to be in the range of $107 million to $110 million. Kadant expects revenue to be in the range of $427 million to $437 million for financial year 2017. The company projects diluted earnings per share to be in the range of $0.87 to $0.97 for the second-quarter. For financial year 2017, the company projects diluted earnings per share to be in the range of $3.27 to $3.37.
Working capital declines
Kadant Inc has witnessed a decline in the working capital over the last year. It stood at $131.31 million as at Apr. 01, 2017, down 18.14 percent or $29.10 million from $160.41 million on Apr. 02, 2016. Current ratio was at 2.45 as on Apr. 01, 2017, down from 2.91 on Apr. 02, 2016. Cash conversion cycle (CCC) has decreased to 74 days for the quarter from 122 days for the last year period. Days sales outstanding went up to 65 days for the quarter compared with 64 days for the same period last year.
Days inventory outstanding has decreased to 51 days for the quarter compared with 100 days for the previous year period. At the same time, days payable outstanding was almost stable at 42 days for the quarter, when compared with the previous year period.
Debt comes down marginally
Kadant Inc has recorded a decline in total debt over the last one year. It stood at $70.55 million as on Apr. 01, 2017, down 2.25 percent or $1.62 million from $72.17 million on Apr. 02, 2016. Total debt was 14.43 percent of total assets as on Apr. 01, 2017, compared with 15.77 percent on Apr. 02, 2016. Debt to equity ratio was at 0.24 as on Apr. 01, 2017, down from 0.26 as on Apr. 02, 2016. Interest coverage ratio deteriorated to 34.61 for the quarter from 37.52 for the same period last year.
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