MYR Group (MYRG) has reported a 39.61 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $1.20 million, or $0.07 a share in the quarter, compared with $1.99 million, or $0.10 a share for the same period last year.
Revenue during the quarter grew 18.33 percent to $300.13 million from $253.63 million in the previous year period. Gross margin for the quarter contracted 218 basis points over the previous year period to 8.58 percent. Total expenses were 99.84 percent of quarterly revenues, up from 98.70 percent for the same period last year. That has resulted in a contraction of 114 basis points in operating margin to 0.16 percent.
Operating income for the quarter was $0.48 million, compared with $3.31 million in the previous year period.
Rick Swartz, MYR's president and chief executive officer, said, "The first quarter represents a challenging start to 2017 for MYR. Revenues came in strong at $300.1 million; however, our gross profit and net income were down compared to the same quarter last year. In a number of geographic areas equipment utilization and productivity were negatively impacted by inclement weather and the timing and sequencing of small to medium size projects. While we are not satisfied with first quarter returns we expect to improve performance throughout the remainder of 2017 due to our healthy backlog and a steady bidding climate in both our market segments, and we believe our continued investment in expanding our footprint through organic expansion and strategic acquisitions will deliver strong results in the long term."
Operating cash flow declines
MYR Group has generated cash of $13.06 million from operating activities during the quarter, down 9.47 percent or $ 1.37 million, when compared with the last year period.
The company has spent $9.06 million cash to meet investing activities during the quarter as against cash outgo of $2.74 million in the last year period. It has incurred capital expenditure of $9.07 million on net basis during the quarter, up 231.20 percent or $6.33 million from year ago period.
The company has spent $21.06 million cash to carry out financing activities during the quarter as against cash outgo of $25.45 million in the last year period.
Cash and cash equivalents stood at $6.94 million as on Mar. 31, 2017, down 73.35 percent or $19.10 million from $26.04 million on Mar. 31, 2016.
Working capital increases marginally
MYR Group has recorded an increase in the working capital over the last year. It stood at $107.98 million as at Mar. 31, 2017, up 1.60 percent or $1.70 million from $106.28 million on Mar. 31, 2016. Current ratio was at 1.48 as on Mar. 31, 2017, down from 1.58 on Mar. 31, 2016.
Days sales outstanding went down to 67 days for the quarter compared with 68 days for the same period last year.
At the same time, days payable outstanding went down to 27 days for the quarter from 31 for the same period last year.
Debt increases substantially
MYR Group has witnessed an increase in total debt over the last one year. It stood at $44.23 million as on Mar. 31, 2017, up 5,836.78 percent or $43.48 million from $0.74 million on Mar. 31, 2016. Total debt was 8.06 percent of total assets as on Mar. 31, 2017, compared with 0.15 percent on Mar. 31, 2016. Interest coverage ratio deteriorated to 0.93 for the quarter from 18.07 for the same period last year.
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