Clean Harbors, Inc. (CLH) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $10.26 million, or $ 0.18 a share in the quarter, against a net profit of $40.23 million, or $0.69 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $9.25 million, or $0.16 a share compared with $40.23 million or $0.69 a share, a year ago.
Revenue during the quarter dropped 18.34 percent to $729.52 million from $893.37 million in the previous year period. Gross margin for the quarter expanded 361 basis points over the previous year period to 32.57 percent. Total expenses were 97.70 percent of quarterly revenues, up from 89.48 percent for the same period last year. That has resulted in a contraction of 822 basis points in operating margin to 2.30 percent.
Operating income for the quarter was $16.80 million, compared with $93.97 million in the previous year period.
However, the adjusted operating income for the quarter stood at $50.82 million compared to $93.97 million in the prior year period. At the same time, adjusted operating margin contracted 355 basis points in the quarter to 6.97 percent from 10.52 percent in the last year period.
"Despite strong contributions from our Safety-Kleen segments, our third-quarter results were below expectations due to weak industrial and energy market conditions, as well as significant severance and integration costs that further dampened our profitability," said Alan S. McKim, Chairman, President and Chief Executive Officer. "SK Environmental Services delivered its ninth consecutive quarter of increased profitability, with Adjusted EBITDA growth of 18%. At the same time, Kleen Performance Products more than doubled its profitability from that of the second quarter and was up 88% from the prior year’s third quarter as we continued to effectively manage our spread.
For financial year 2016, Clean Harbors, Inc. projects net loss to be in the range of $51 million to $38 million.
Working capital increases
Clean Harbors, Inc. has recorded an increase in the working capital over the last year. It stood at $510.84 million as at Sep. 30, 2016, up 14.14 percent or $63.30 million from $447.54 million on Sep. 30, 2015. Current ratio was at 1.95 as on Sep. 30, 2016, up from 1.72 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 42 days for the quarter from 44 days for the last year period. Days sales outstanding went up to 80 days for the quarter compared with 70 days for the same period last year.
Days inventory outstanding has decreased to 17 days for the quarter compared with 22 days for the previous year period. At the same time, days payable outstanding went up to 55 days for the quarter from 48 for the same period last year.
Debt moves up
Clean Harbors, Inc. has witnessed an increase in total debt over the last one year. It stood at $1,632.58 million as on Sep. 30, 2016, up 17.03 percent or $237.57 million from $1,395.01 million on Sep. 30, 2015. Total debt was 43.97 percent of total assets as on Sep. 30, 2016, compared with 38.75 percent on Sep. 30, 2015. Debt to equity ratio was at 1.48 as on Sep. 30, 2016, up from 1.24 as on Sep. 30, 2015.
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