Halyard Health, Inc. (HYH) has reported a 9.86 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $12.80 million, or $0.27 a share in the quarter, compared with $14.20 million, or $0.30 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $22.60 million, or $0.48 a share compared with $25 million or $0.53 a share, a year ago.
Revenue during the quarter went up marginally by 2.81 percent to $395.60 million from $384.80 million in the previous year period. Gross margin for the quarter expanded 65 basis points over the previous year period to 36.12 percent. Total expenses were 93.35 percent of quarterly revenues, up from 91.40 percent for the same period last year. That has resulted in a contraction of 195 basis points in operating margin to 6.65 percent.
Operating income for the quarter was $26.30 million, compared with $33.10 million in the previous year period.
However, the adjusted operating income for the quarter stood at $42.10 million compared to $44.60 million in the prior year period. At the same time, adjusted operating margin contracted 95 basis points in the quarter to 10.64 percent from 11.59 percent in the last year period.
"I'm pleased with our start to the year, as we delivered solid earnings and are on track to achieve our 2017 goals," said Robert Abernathy, Halyard chairman and chief executive officer. "Our balance sheet remains strong and we are well-positioned to continue executing our transformation into a leading Medical Devices company by generating organic growth and pursuing M&A opportunities."
For financial year 2017, the company projects diluted earnings per share to be in the range of $1.01 to $1.45. The company projects diluted earnings per share to be in the range of $1.70 to $2 on adjusted basis.
Operating cash flow declines
Halyard Health, Inc. has generated cash of $37 million from operating activities during the quarter, down 12.94 percent or $ 5.50 million, when compared with the last year period.
The company has spent $10.20 million cash to meet investing activities during the quarter as against cash outgo of $8 million in the last year period.
Cash flow from financing activities was almost stable for the quarter at $0.50 million, when compared with the previous year period.
Cash and cash equivalents stood at $143.10 million as on Mar. 31, 2017, down 13.33 percent or $22 million from $165.10 million on Mar. 31, 2016.
Working capital declines
Halyard Health, Inc. has witnessed a decline in the working capital over the last year. It stood at $304.40 million as at Mar. 31, 2017, down 23.38 percent or $92.90 million from $397.30 million on Mar. 31, 2016. Current ratio was at 1.98 as on Mar. 31, 2017, down from 2.28 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 34 days for the quarter from 100 days for the last year period. Days sales outstanding went down to 46 days for the quarter compared with 51 days for the same period last year.
Days inventory outstanding has decreased to 49 days for the quarter compared with 112 days for the previous year period. At the same time, days payable outstanding went down to 61 days for the quarter from 63 for the same period last year.
Debt remains almost stable
Total debt of Halyard Health, Inc. remained almost stable for the quarter at $579.40 million, when compared with the last year period. Long-term debt of Halyard Health remained almost stable for the quarter at $579.40 million, when compared with the last year period. Total debt was 27.77 percent of total assets as on Mar. 31, 2017, compared with 28.64 percent on Mar. 31, 2016. Debt to equity ratio was at 0.51 as on Mar. 31, 2017, down from 0.54 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 3.46 for the quarter from 4.14 for the same period last year.
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