W. R. Grace & Company (GRA) has reported an 186.96 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $39.60 million, or $0.56 a share in the quarter, compared with $13.80 million, or $0.19 a share for the same period last year. On an adjusted basis, earnings per share were at $0.80 for the quarter compared with $0.54 in the same period last year. Revenue during the quarter went up marginally by 1.33 percent to $404.50 million from $399.20 million in the previous year period. Gross margin for the quarter contracted 3 basis points over the previous year period to 41.58 percent. Total expenses were 79.38 percent of quarterly revenues, down from 80.31 percent for the same period last year. This has led to an improvement of 93 basis points in operating margin to 20.62 percent.
Operating income for the quarter was $83.40 million, compared with $78.60 million in the previous year period.
"We again achieved overall margin improvement and strong cash flow," said Fred Festa, Grace’s chairman and chief executive officer. "We are also pleased to see positive trends in our top line performance. Integration of our polyolefin catalysts acquisition and productivity improvements are on pace with our plans."
For financial year 2016, the company forecasts diluted earnings per share to be in the range of $3.05 to $3.10 on adjusted basis.
Operating cash flow turns positive
W. R. Grace & Company has generated cash of $231.50 million from operating activities during the nine month period as against cash outgo of $81.10 million in the last year period. The company has spent $334.10 million cash to meet investing activities during the nine month period as against cash outgo of $114.10 million in the last year period.
Cash flow from financing activities was $118.80 million for the nine month period, up 369.57 percent or $93.50 million, when compared with the last year period.
Cash and cash equivalents stood at $204.40 million as on Sep. 30, 2016, down 38.27 percent or $126.70 million from $331.10 million on Sep. 30, 2015.
Working capital drops significantly
W. R. Grace & Company has witnessed a decline in the working capital over the last year. It stood at $275.10 million as at Sep. 30, 2016, down 61.32 percent or $436.10 million from $711.20 million on Sep. 30, 2015. Current ratio was at 1.58 as on Sep. 30, 2016, down from 1.99 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 45 days for the quarter from 130 days for the last year period. Days sales outstanding went down to 83 days for the quarter compared with 108 days for the same period last year.
Days inventory outstanding has decreased to 46 days for the quarter compared with 127 days for the previous year period. At the same time, days payable outstanding went down to 85 days for the quarter from 106 for the same period last year.
Debt comes down significantly
W. R. Grace & Company has recorded a decline in total debt over the last one year. It stood at $1,590.20 million as on Sep. 30, 2016, down 28.23 percent or $625.60 million from $2,215.80 million on Sep. 30, 2015. Total debt was 52.90 percent of total assets as on Sep. 30, 2016, compared with 59.77 percent on Sep. 30, 2015. Debt to equity ratio was at 3.22 as on Sep. 30, 2016, down from 8.61 as on Sep. 30, 2015.
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