Catalent, Inc. (CTLT) has reported A 43.32 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $17.40 million, or $0.14 a share in the quarter, compared with $30.70 million, or $0.24 a share for the same period last year. On an adjusted basis, net profit for the quarter was $34.70 million, when compared with $38.90 million in the last year period. Revenue during the quarter grew 6.33 percent to $483.70 million from $454.90 million in the previous year period. Gross margin for the quarter contracted 286 basis points over the previous year period to 30.58 percent. Total expenses were 90.10 percent of quarterly revenues, up from 87.12 percent for the same period last year. That has resulted in a contraction of 298 basis points in operating margin to 9.90 percent.
Operating income for the quarter was $47.90 million, compared with $58.60 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $98.10 million compared with $101.10 million in the prior year period. At the same time, adjusted EBITDA margin contracted 194 basis points in the quarter to 20.28 percent from 22.22 percent in the last year period.
"We're pleased with our performance during the second quarter, where we recorded double-digit revenue growth on a constant currency basis and announced our second strategic acquisition of the fiscal year," said John Chiminski, president and chief executive officer of Catalent, Inc. "Once closed later this year, the acquisition of Accucaps will add extensive softgel development and manufacturing capabilities in North America, as we continue to build on our market-leading position in the softgel space. Additionally, the integration of the Pharmatek acquisition announced during the first quarter is progressing according to our expectations and is already creating value for the company and our shareholders."
For the financial year 2017, Catalent, Inc. forecasts revenue to be in the range of $1,940 million to $1,980 million. It expects adjusted net income to be in the range of $168 million to $183 million for the same period.
Operating cash flow improves significantly
Catalent, Inc. has generated cash of $96 million from operating activities during the first half, up 34.27 percent or $24.50 million, when compared with the last year period. The company has spent $138.50 million cash to meet investing activities during the first six months as against cash outgo of $82.50 million in the last year period.
Cash flow from financing activities was $175.70 million for the first six months as against cash outgo of $20.90 million in the last year period.
Cash and cash equivalents stood at $255.80 million as on Dec. 31, 2016, up 121.47 percent or $140.30 million from $115.50 million on Dec. 31, 2015.
Working capital increases sharply
Catalent, Inc. has recorded an increase in the working capital over the last year. It stood at $547.80 million as at Dec. 31, 2016, up 61.45 percent or $208.50 million from $339.30 million on Dec. 31, 2015. Current ratio was at 2.64 as on Dec. 31, 2016, up from 2 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 52 days for the quarter from 73 days for the last year period. Days sales outstanding were almost stable at 64 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 23 days for the quarter compared with 47 days for the previous year period. At the same time, days payable outstanding went down to 35 days for the quarter from 39 for the same period last year.
Debt moves up
Catalent, Inc. has witnessed an increase in total debt over the last one year. It stood at $2,024.40 million as on Dec. 31, 2016, up 8.10 percent or $151.70 million from $1,872.70 million on Dec. 31, 2015. Total debt was 64.18 percent of total assets as on Dec. 31, 2016, compared with 61.70 percent on Dec. 31, 2015. Debt to equity ratio was at 3.44 as on Dec. 31, 2016, up from 3.08 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 2.10 for the quarter from 2.63 for the same period last year.
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