Park Ohio Holdings Corporation (PKOH) has reported a 44.44 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $6.50 million, or $0.53 a share in the quarter, compared with $11.70 million, or $0.95 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $8.10 million, or $0.66 a share compared with $14.20 million or $1.15 a share, a year ago.
Revenue during the quarter dropped 11.69 percent to $306.80 million from $347.40 million in the previous year period. Gross margin for the quarter contracted 38 basis points over the previous year period to 15.19 percent. Total expenses were 94.56 percent of quarterly revenues, up from 94.07 percent for the same period last year. That has resulted in a contraction of 49 basis points in operating margin to 5.44 percent.
Operating income for the quarter was $16.70 million, compared with $20.60 million in the previous year period.
Edward F. Crawford, Chairman and Chief Executive Officer, stated, "Most economic indicators suggest modest organic growth in the industrial sector for 2017. ParkOhio looks forward to increasing their revenue through strategic acquisitions."
For fiscal year 2017, the company expects diluted earnings per share to be in the range of $3.15 to $3.35.
Operating cash flow improves significantly
Park Ohio Holdings Corp has generated cash of $72.90 million from operating activities during the year, up 63.09 percent or $28.20 million, when compared with the last year.
The company has spent $51.90 million cash to meet investing activities during the year as against cash outgo of $36.50 million in the last year.
The company has spent $17.20 million cash to carry out financing activities during the year as against cash inflow of $0.70 million in the last year period.
Cash and cash equivalents stood at $64.30 million as on Dec. 31, 2016, up 3.71 percent or $2.30 million from $62 million on Dec. 31, 2015.
Working capital decreases marginally
Park Ohio Holdings Corp has witnessed a decline in the working capital over the last year. It stood at $310.80 million as at Dec. 31, 2016, down 4.19 percent or $13.60 million from $324.40 million on Dec. 31, 2015. Current ratio was at 2.28 as on Dec. 31, 2016, down from 2.44 on Dec. 31, 2015.
Cash conversion cycle (CCC) has increased to 48 days for the quarter from 45 days for the last year period. Days sales outstanding went up to 29 days for the quarter compared with 26 days for the same period last year.
Days inventory outstanding has increased to 43 days for the quarter compared with 39 days for the previous year period. At the same time, days payable outstanding went up to 24 days for the quarter from 20 for the same period last year.
Debt moves up marginally
Park Ohio Holdings Corp has witnessed an increase in total debt over the last one year. It stood at $469.80 million as on Dec. 31, 2016, up 1.34 percent or $6.20 million from $463.60 million on Dec. 31, 2015. Total debt was 48.22 percent of total assets as on Dec. 31, 2016, compared with 48.98 percent on Dec. 31, 2015. Debt to equity ratio was at 1.99 as on Dec. 31, 2016, down from 2.18 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 2.42 for the quarter from 2.86 for the same period last year.
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