VSE Corporation (VSEC) has reported a 9.48 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $7.09 million, or $0.65 a share in the quarter, compared with $6.47 million, or $0.60 a share for the same period last year.
Revenue during the quarter grew 25.75 percent to $172.78 million from $137.40 million in the previous year period. Gross margin for the quarter contracted 234 basis points over the previous year period to 10.59 percent. Total expenses were 92.12 percent of quarterly revenues, up from 90.36 percent for the same period last year. That has resulted in a contraction of 175 basis points in operating margin to 7.88 percent.
Operating income for the quarter was $13.62 million, compared with $13.24 million in the previous year period.
However, the adjusted EBITDA for the quarter was almost stable at $20.20 million, when compared with the prior year period. At the same time, adjusted EBITDA margin contracted 305 basis points in the quarter to 11.69 percent from 14.75 percent in the last year period.
“Our contracted services in support of the DoD and other federal government clients have been the largest contributor to our revenue increases for the third quarter and year to date,” said Maurice “Mo” Gauthier, VSE chief executive officer and president. “Recent awards in our Federal Services Group position us well for steady improvement in our federal markets based on a strong booking quarter. We also are pleased to report increases in both revenue and operating income for our Aviation Group for the third quarter.”
Operating cash flow improves significantly
VSE Corporation has generated cash of $28.39 million from operating activities during the nine month period, up 53.45 percent or $9.89 million, when compared with the last year period.
The company has spent $5.43 million cash to meet investing activities during the nine month period as against cash outgo of $198.73 million in the last year period. It has incurred net capital expenditure of $5.36 million on net basis during the nine month period, down 28.92 percent or $2.18 million from year ago period.
The company has spent $23.15 million cash to carry out financing activities during the nine month period as against cash inflow of $180.16 million in the last year period.
Cash and cash equivalents stood at $0.55 million as on Sep. 30, 2016, up 185.05 percent or $0.36 million from $0.19 million on Sep. 30, 2015.
Working capital decreases marginally
VSE Corporation has witnessed a decline in the working capital over the last year. It stood at $114.11 million as at Sep. 30, 2016, down 2.29 percent or $2.67 million from $116.78 million on Sep. 30, 2015. Current ratio was at 1.98 as on Sep. 30, 2016, down from 2.32 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 53 days for the quarter from 110 days for the last year period. Days sales outstanding went down to 43 days for the quarter compared with 51 days for the same period last year.
Days inventory outstanding has decreased to 38 days for the quarter compared with 87 days for the previous year period. At the same time, days payable outstanding was almost stable at 28 days for the quarter, when compared with the previous year period.
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