Neff Corp (NEFF) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $1.70 million, or $ 0.18 a share in the quarter, against a net loss of $0.20 million, or $0.01 a share in the last year period. On an adjusted basis, earnings per share were at $0.18 for the quarter compared with $0.14 in the same period last year. Revenue during the quarter grew 7.03 percent to $95.90 million from $89.60 million in the previous year period. Gross margin for the quarter contracted 93 basis points over the previous year period to 46.61 percent. Total expenses were 81.23 percent of quarterly revenues, down from 82.92 percent for the same period last year. This has led to an improvement of 169 basis points in operating margin to 18.77 percent.
Operating income for the quarter was $18 million, compared with $15.30 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $43.60 million compared with $41.40 million in the prior year period. At the same time, adjusted EBITDA margin contracted 74 basis points in the quarter to 45.46 percent from 46.21 percent in the last year period.
Graham Hood, chief executive officer of Neff Corporation, commented, "The first quarter of 2017 was another very good quarter for Neff's rental business as we generated record first quarter results for rental revenues and EBITDA, each of which increased by 5.3% year-over-year. This performance reflects our ability to execute our strategy and take advantage of the ongoing strength in the construction markets we serve. This also provides confirmation to our belief that the cycle remains strong and intact. We expect this strength to continue for the remainder of 2017."
For fiscal year 2017, Neff Corp forecasts revenue to be in the range of $400 million to $420 million.
Operating cash flow declines
Neff Corp has generated cash of $29.20 million from operating activities during the quarter, down 12.57 percent or $ 4.20 million, when compared with the last year period. The company has spent $15 million cash to meet investing activities during the quarter as against cash outgo of $36 million in the last year period. It has incurred net capital expenditure of $15 million on net basis during the quarter, down 58.33 percent or $21 million from year ago period.
The company has spent $14.20 million cash to carry out financing activities during the quarter as against cash inflow of $4.50 million in the last year period.
Cash and cash equivalents stood at $0.80 million as on Mar. 31, 2017, down 63.64 percent or $1.40 million from $2.20 million on Mar. 31, 2016.
Debt comes down
Neff Corp has recorded a decline in total debt over the last one year. It stood at $677.70 million as on Mar. 31, 2017, down 8.64 percent or $64.09 million from $741.79 million on Mar. 31, 2016. Short-term debt stood at $677.70 million as on Mar. 31, 2017. Total debt was 103.83 percent of total assets as on Mar. 31, 2017, compared with 110.34 percent on Mar. 31, 2016. Interest coverage ratio improved to 1.61 for the quarter from 1.39 for the same period last year.
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