McGrath RentCorp (MGRC) has reported a 5.46 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $12.87 million, or $0.54 a share in the quarter, compared with $13.62 million, or $0.54 a share for the same period last year.
Revenue during the quarter grew 7.91 percent to $121.99 million from $113.05 million in the previous year period. Gross margin for the quarter contracted 302 basis points over the previous year period to 41.34 percent. Total expenses were 80.14 percent of quarterly revenues, up from 77.75 percent for the same period last year. That has resulted in a contraction of 238 basis points in operating margin to 19.86 percent.
Operating income for the quarter was $24.23 million, compared with $25.15 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $45.07 million compared with $46.99 million in the prior year period. At the same time, adjusted EBITDA margin contracted 462 basis points in the quarter to 36.94 percent from 41.57 percent in the last year period.
Operating cash flow improves
McGrath RentCorp has generated cash of $106.23 million from operating activities during the nine month period, up 5.59 percent or $5.63 million, when compared with the last year period.
The company has spent $50.34 million cash to meet investing activities during the nine month period as against cash outgo of $93.25 million in the last year period.
The company has spent $55.89 million cash to carry out financing activities during the nine month period as against cash outgo of $7.76 million in the last year period.
Cash and cash equivalents stood at $1.09 million as on Sep. 30, 2016, up 44.25 percent or $0.34 million from $0.76 million on Sep. 30, 2015.
Working capital turns positive
Working capital of McGrath RentCorp has turned positive to $1.09 million on Sep. 30, 2016 from negative $313.97 million on Sep. 30, 2015.
Days sales outstanding went down to 35 days for the quarter compared with 82 days for the same period last year.
Debt comes down
Mcgrath Rentcorp has recorded a decline in total debt over the last one year. It stood at $345.29 million as on Sep. 30, 2016, down 9.64 percent or $36.83 million from $382.11 million on Sep. 30, 2015. Total debt was 31,619.60 percent of total assets as on Sep. 30, 2016, compared with 33.25 percent on Sep. 30, 2015. Interest coverage ratio deteriorated to 8.24 for the quarter from 10.29 for the same period last year.
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