Navistar International Corp (NAV) swung to a net loss for the quarter ended Apr. 30, 2017. The company has made a net loss of $80 million, or $ 0.86 a share in the quarter, against a net profit of $4 million, or $0.05 a share in the last year period. Revenue during the quarter dropped 4.60 percent to $2,096 million from $2,197 million in the previous year period. Gross margin for the quarter contracted 75 basis points over the previous year period to 15.27 percent. Total expenses were 99.14 percent of quarterly revenues, up from 95.08 percent for the same period last year. That has resulted in a contraction of 406 basis points in operating margin to 0.86 percent.
Operating income for the quarter was $18 million, compared with $108 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $65 million compared with $187 million in the prior year period. At the same time, adjusted EBITDA margin contracted 541 basis points in the quarter to 3.10 percent from 8.51 percent in the last year period.
"We are on track to improve on last year's results, but still have quite a bit of work to do in the second half," said Troy A. Clarke, Navistar chairman, president and chief executive officer. "However, the work we've done in the first six months growing share, building our backlog, and managing costs, combined with improving industry conditions, positions us to deliver a stronger second half."
Operating cash flow remains negative
Navistar International Corp has spent $107 million cash to meet operating activities during the first half as against cash outgo of $104 million in the last year period. The company has spent $271 million cash to meet investing activities during the first six months as against cash outgo of $166 million in the last year period. It has incurred net capital expenditure of $89 million on net basis during the first six months, down 21.93 percent or $25 million from year ago period.
Cash flow from financing activities was $344 million for the first six months as against cash outgo of $71 million in the last year period.
Cash and cash equivalents stood at $771 million as on Apr. 30, 2017, up 30.90 percent or $182 million from $589 million on Apr. 30, 2016.
Working capital increases sharply
Navistar International Corp has recorded an increase in the working capital over the last year. It stood at $825 million as at Apr. 30, 2017, up 61.76 percent or $315 million from $510 million on Apr. 30, 2016. Current ratio was at 1.26 as on Apr. 30, 2017, up from 1.14 on Apr. 30, 2016.
Cash conversion cycle (CCC) has decreased to 42 days for the quarter from 83 days for the last year period. Days sales outstanding were almost stable at 75 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 24 days for the quarter compared with 61 days for the previous year period. At the same time, days payable outstanding went up to 57 days for the quarter from 53 for the same period last year.
Debt comes down marginally
Navistar International Corp has recorded a decline in total debt over the last one year. It stood at $5,065 million as on Apr. 30, 2017, down 3.06 percent or $160 million from $5,225 million on Apr. 30, 2016. Total debt was 85.10 percent of total assets as on Apr. 30, 2017, compared with 84.44 percent on Apr. 30, 2016. Interest coverage ratio deteriorated to 0.20 for the quarter from 1.33 for the same period last year.
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