Synalloy Corporation (SYNL) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $0.74 million, or $ 0.08 a share in the quarter, against a net loss of $1.37 million, or $0.16 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $0.22 million, or $0.03 a share compared with $0.21 million or $0.02 a share, a year ago.
Revenue during the quarter grew 16.23 percent to $42.20 million from $36.31 million in the previous year period. Total expenses were 7.04 percent of quarterly revenues, up from 1.21 percent for the same period last year. That has resulted in a contraction of 583 basis points in operating margin to 92.96 percent.
However, the adjusted EBITDA for the quarter stood at $2.16 million compared with $2.62 million in the prior year period. At the same time, adjusted EBITDA margin contracted 211 basis points in the quarter to 5.11 percent from 7.22 percent in the last year period.
"We are very encouraged by the company's financial performance in the first quarter", said Craig Bram, president and chief executive officer. "Both of our operating segments posted year over year sales increases, as well as improved operating income. Our first month operating our new Brismet-Munhall facility, acquired from Marcegaglia, exceeded expectations, with operating income just shy of $200,000. Bookings in the first quarter for stainless steel pipe were very strong, bringing the backlog to approximately $28 million. By comparison, the average backlog in 2016 was $10 million. As for the Specialty Chemicals Segment, we had forecasted improved year over year results starting in the second quarter. We are pleased that the favorable comparison occurred one quarter early."
Working capital increases sharply
Synalloy Corporation has recorded an increase in the working capital over the last year. It stood at $78.17 million as at Mar. 31, 2017, up 25.57 percent or $15.92 million from $62.25 million on Mar. 31, 2016. Current ratio was at 3.31 as on Mar. 31, 2017, down from 3.64 on Mar. 31, 2016. Days sales outstanding went down to 47 days for the quarter compared with 48 days for the same period last year.
Debt comes down marginally
Synalloy Corporation has recorded a decline in total debt over the last one year. It stood at $29.97 million as on Mar. 31, 2017, down 3.14 percent or $0.97 million from $30.95 million on Mar. 31, 2016. Total debt was 18.18 percent of total assets as on Mar. 31, 2017, compared with 20.79 percent on Mar. 31, 2016. Debt to equity ratio was almost stable at 0.34 as on Mar. 31, 2017, when compared with the last year. Interest coverage ratio improved to 217.96 for the quarter from 127.66 for the same period last year.
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