Computer Task Group (CTG) has reported 56.34 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $1.14 million, or $0.07 a share in the quarter, compared with $2.62 million, or $0.16 a share for the same period last year. Revenue during the quarter dropped 7.97 percent to $77.49 million from $84.20 million in the previous year period. Gross margin for the quarter contracted 77 basis points over the previous year period to 19.17 percent. Total expenses were 97.79 percent of quarterly revenues, up from 95.56 percent for the same period last year. That has resulted in a contraction of 223 basis points in operating margin to 2.21 percent.
Operating income for the quarter was $1.71 million, compared with $3.74 million in the previous year period.
CTG chief executive officer Bud Crumlish commented, "Fourth quarter financial results were above the high-end of our guidance, with Staffing declining less than previously expected and our Solutions business growing modestly over the prior quarter. Notably, we were able to retain more business with our largest Staffing client than we had anticipated during the quarter, which when combined with the cost reductions implemented in the fourth quarter, enabled us to end 2016 with better than expected results."
For the first-quarter, Computer Task Group expects revenue to be in the range of $76 million to $78 million. Computer Task Group expects revenue to be in the range of $312 million to $332 million for financial year 2017. Computer Task Group expects adjusted revenue to be in the range of $333 million to $353 million for financial year 2017. The company projects diluted earnings per share to be in the range of $0.04 to $0.06 for the first-quarter. For financial year 2017, the company projects diluted earnings per share to be in the range of $0.19 to $0.29.
Operating cash flow turns positiveComputer Task Group has generated cash of $2.06 million from operating activities during the year as against cash outgo of $4.03 million in the last year. The company has spent $2.59 million cash to meet investing activities during the year as against cash outgo of $2.02 million in the last year.
The company has spent $0.50 million cash to carry out financing activities during the year as against cash outgo of $22.97 million in the last year period.
Cash and cash equivalents stood at $9.41 million as on Dec. 31, 2016, down 12.91 percent or $1.39 million from $10.80 million on Dec. 31, 2015.
Working capital increases marginally
Computer Task Group has recorded an increase in the working capital over the last year. It stood at $53.73 million as at Dec. 31, 2016, up 1.43 percent or $0.76 million from $52.97 million on Dec. 31, 2015. Current ratio was at 2.80 as on Dec. 31, 2016, up from 2.67 on Dec. 31, 2015.
Days sales outstanding went up to 42 days for the quarter compared with 38 days for the same period last year.
At the same time, days payable outstanding was almost stable at 5 days for the quarter, when compared with the previous year period.
Debt increases substantially
Computer Task Group has witnessed an increase in total debt over the last one year. It stood at $4.72 million as on Dec. 31, 2016, up 285.71 percent or $3.50 million from $1.22 million on Dec. 31, 2015. Computer Task Group has witnessed an increase in long-term debt over the last one year. Total debt was 3.72 percent of total assets as on Dec. 31, 2016, compared with 0.75 percent on Dec. 31, 2015. Debt to equity ratio was at 0.06 as on Dec. 31, 2016, up from 0.01 as on Dec. 31, 2015. 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: editor@irisindia.net
