McGrath RentCorp (MGRC) has reported a 15.49 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $9.73 million, or $0.40 a share in the quarter, compared with $11.52 million, or $0.48 a share for the same period last year. Gross margin for the quarter expanded 244 basis points over the previous year period to 46.85 percent. Total expenses were 78.44 percent of quarterly revenues, down from 79.61 percent for the same period last year. This has led to an improvement of 117 basis points in operating margin to 21.56 percent.
Operating income for the quarter was $22.70 million, compared with $21.47 million in the previous year period.
However, the adjusted EBITDA for the quarter was almost stable at $42.93 million, when compared with the prior year period. At the same time, adjusted EBITDA margin contracted 1 basis points in the quarter to 40.78 percent from 40.79 percent in the last year period.
For financial year 2017, McGrath RentCorp forecasts operating income to grow in the range of 3 percent to 5 percent.
Operating cash flow falls marginally
McGrath RentCorp has generated cash of $141.76 million from operating activities during the year, down 1.93 percent or $2.79 million, when compared with the last year. The company has spent $60.18 million cash to meet investing activities during the year as against cash outgo of $114.14 million in the last year. It has incurred net capital expenditure of $60.18 million on net basis during the year, down 47.28 percent or $53.96 million from year ago.
The company has spent $81.83 million cash to carry out financing activities during the year as against cash outgo of $30.47 million in the last year period.
Cash and cash equivalents stood at $0.85 million as on Dec. 31, 2016, down 22.76 percent or $0.25 million from $1.10 million on Dec. 31, 2015.
Debt comes down
McGrath RentCorp has recorded a decline in total debt over the last one year. It stood at $326.27 million as on Dec. 31, 2016, down 14.43 percent or $55.01 million from $381.28 million on Dec. 31, 2015. Total debt was 28.92 percent of total assets as on Dec. 31, 2016, compared with 33.08 percent on Dec. 31, 2015. Debt to equity ratio was at 0.83 as on Dec. 31, 2016, down from 1 as on Dec. 31, 2015. Interest coverage ratio improved to 8.34 for the quarter from 7.38 for the same period last year.
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