Quad/Graphics, Inc. (QUAD) swung to a net profit for the quarter ended Dec. 31, 2016. The company has made a net profit of $37.50 million, or $ 0.73 a share in the quarter, against a net loss of $9.40 million, or $0.20 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $37.30 million, or $0.73 a share compared with $31.60 million or $0.68 a share, a year ago. Revenue during the quarter dropped 8.78 percent to $1,198.30 million from $1,313.60 million in the previous year period. Gross margin for the quarter expanded 10 basis points over the previous year period to 21.14 percent. Operating margin for the quarter period stood at positive 5.20 percent as compared to a negative 1.55 percent for the previous year period.
Operating income for the quarter was $62.30 million, compared with an operating loss of $20.30 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $140.20 million compared with $154.30 million in the prior year period. At the same time, adjusted EBITDA margin contracted 5 basis points in the quarter to 11.70 percent from 11.75 percent in the last year period.
“We are pleased with our fourth quarter and full-year 2016 results, which exceeded our expectations and show that we more than accomplished what we set out to achieve at the start of the year,” said Joel Quadracci, Quad/Graphics chairman, president and chief ecxecutive officer. “Throughout 2016, we continued to transform both our business and the industry through strategic investment in our assets and through the creation of new and innovative solutions designed to drive greater value for our clients. We also continued to implement sustainable cost reductions and productivity improvements while maintaining our focus on revenue to drive EBITDA enhancement.”
Quad/Graphics, Inc expects revenue to be in the range of $4,100 million to $4,300 million for financial year 2017.
Operating cash flow improves marginally
Quad/Graphics, Inc has generated cash of $352.50 million from operating activities during the year, up 1.26 percent or $4.40 million, when compared with the last year. The company has spent $84.40 million cash to meet investing activities during the year as against cash outgo of $216.70 million in the last year. It has incurred net capital expenditure of $80.20 million on net basis during the year, down 22.74 percent or $23.60 million from year ago.
The company has spent $269.30 million cash to carry out financing activities during the year as against cash outgo of $127.90 million in the last year period.
Cash and cash equivalents stood at $9 million as on Dec. 31, 2016, down 16.67 percent or $1.80 million from $10.80 million on Dec. 31, 2015.
Working capital drops significantly
Quad/Graphics, Inc has witnessed a decline in the working capital over the last year. It stood at $128 million as at Dec. 31, 2016, down 30.40 percent or $55.90 million from $183.90 million on Dec. 31, 2015. Current ratio was at 1.17 as on Dec. 31, 2016, down from 1.23 on Dec. 31, 2015.
Cash conversion cycle (CCC) was almost stable at 19 days for the quarter, when compared with the last year period. Days sales outstanding went down to 22 days for the quarter compared with 23 days for the same period last year.
Days inventory outstanding was almost stable at 13 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 16 days for the quarter, when compared with the previous year period.
Debt comes down
Quad/Graphics, Inc has recorded a decline in total debt over the last one year. It stood at $1,136.20 million as on Dec. 31, 2016, down 16.23 percent or $220.20 million from $1,356.40 million on Dec. 31, 2015. Total debt was 44.21 percent of total assets as on Dec. 31, 2016, compared with 47.63 percent on Dec. 31, 2015. Debt to equity ratio was at 2.57 as on Dec. 31, 2016, down from 3.20 as on Dec. 31, 2015.
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