Otter Tail Corporation (OTTR) has reported 5.04 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $14.62 million, or $0.37 a share in the quarter, compared with $15.39 million, or $0.41 a share for the same period last year.
Revenue during the quarter went down marginally by 1.42 percent to $197.18 million from $200.02 million in the previous year period. Gross margin for the quarter expanded 97 basis points over the previous year period to 61.76 percent. Total expenses were 86.16 percent of quarterly revenues, up from 85.19 percent for the same period last year. That has resulted in a contraction of 97 basis points in operating margin to 13.84 percent.
Operating income for the quarter was $27.28 million, compared with $29.63 million in the previous year period.
"Otter Tail's employees worked hard to overcome a number of challenges this quarter, and we remain confident in our plans and in our full year expectations," said Otter Tail Corporation president and chief executive officer Chuck MacFarlane.
For financial year 2016, the company forecasts diluted earnings per share to be in the range of $1.50 to $1.65.
Operating cash flow improves significantly
Otter Tail Corporation has generated cash of $114.74 million from operating activities during the nine month period, up 63.39 percent or $44.52 million, when compared with the last year period.
The company has spent $123.41 million cash to meet investing activities during the nine month period as against cash outgo of $119.47 million in the last year period. It has incurred net capital expenditure of $121.75 million on net basis during the nine month period, up 8.35 percent or $9.38 million from year ago period.
Cash flow from financing activities was $8.66 million for the nine month period, down 82.60 percent or $41.14 million, when compared with the last year period.
Working capital turns negative
Working capital of Otter Tail Corporation has turned negative to $42.54 million on Sep. 30, 2016 from positive $36.84 million on Sep. 30, 2015. Current ratio was at 0.83 as on Sep. 30, 2016, down from 1.16 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 15 days for the quarter from 29 days for the last year period. Days sales outstanding went down to 45 days for the quarter compared with 48 days for the same period last year.
Days inventory outstanding has decreased to 49 days for the quarter compared with 97 days for the previous year period. At the same time, days payable outstanding went down to 109 days for the quarter from 116 for the same period last year.
Debt remains almost stable
Total debt of Otter Tail Corporation remained almost stable for the quarter at $583.42 million, when compared with the last year period. Total debt was 31.22 percent of total assets as on Sep. 30, 2016, compared with 31.54 percent on Sep. 30, 2015. Debt to equity ratio was at 0.89 as on Sep. 30, 2016, down from 0.98 as on Sep. 30, 2015.
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