Aramark (ARMK) has reported 34.28 percent jump in profit for the quarter ended Dec. 30, 2016. The company has earned $125.34 million, or $0.50 a share in the quarter, compared with $93.34 million, or $0.38 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $138.48 million, or $0.55 a share compared with $122.59 million or $0.50 a share, a year ago. Revenue during the quarter went up marginally by 0.68 percent to $3,735.38 million from $3,710.28 million in the previous year period. Gross margin for the quarter expanded 47 basis points over the previous year period to 11.67 percent. Total expenses were 93.47 percent of quarterly revenues, down from 94.23 percent for the same period last year. This has led to an improvement of 76 basis points in operating margin to 6.53 percent.
Operating income for the quarter was $244.06 million, compared with $214.09 million in the previous year period.
However, the adjusted operating income for the quarter stood at $265.55 million compared to $262.45 million in the prior year period. At the same time, adjusted operating margin improved 4 basis points in the quarter to 7.11 percent from 7.07 percent in the last year period.
“We are pleased to report another quarter of solid operating results in line with our expectations, reflecting the strong execution of our focused strategy,” said Eric J. Foss, Chairman, President and Chief executive officer. "I am particularly encouraged by our recent levels of new business wins, high retention rates and full pipeline of new opportunities across a number of key sectors."
For fiscal year 2017, the company expects diluted earnings per share to be in the range of $1.85 to $1.95 on adjusted basis.
Operating cash flow remains negative
Aramark has spent $26.03 million cash to meet operating activities during the quarter as against cash outgo of $168.99 million in the last year period. The company has spent $106.13 million cash to meet investing activities during the quarter as against cash outgo of $86.13 million in the last year period.
Cash flow from financing activities was $126.53 million for the quarter, down 49 percent or $121.54 million, when compared with the last year period.
Cash and cash equivalents stood at $146.95 million as on Dec. 30, 2016, up 27.39 percent or $31.59 million from $115.36 million on Jan. 01, 2016.
Working capital declines
Aramark has witnessed a decline in the working capital over the last year. It stood at $594.35 million as at Dec. 30, 2016, down 9.72 percent or $64 million from $658.35 million on Jan. 01, 2016. Current ratio was at 1.33 as on Dec. 30, 2016, down from 1.38 on Jan. 01, 2016.
Cash conversion cycle (CCC) has decreased to 22 days for the quarter from 31 days for the last year period. Days sales outstanding were almost stable at 36 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 8 days for the quarter compared with 16 days for the previous year period. At the same time, days payable outstanding was almost stable at 21 days for the quarter, when compared with the previous year period.
Debt comes down marginally
Aramark has recorded a decline in total debt over the last one year. It stood at $5,412.46 million as on Dec. 30, 2016, down 2.30 percent or $127.69 million from $5,540.15 million on Jan. 01, 2016. Total debt was 52.12 percent of total assets as on Dec. 30, 2016, compared with 54.58 percent on Jan. 01, 2016. Debt to equity ratio was at 2.42 as on Dec. 30, 2016, down from 2.81 as on Jan. 01, 2016. Interest coverage ratio improved to 3.72 for the quarter from 3 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
