Thermon Group's FY13 Earnings Lag Est.
Thermon Group Holdings, Inc. (THR) reported its financial results for the fourth quarter and the fiscal year 2013 (ended Mar 31, 2013) on Jun 5, 2013. The results were weak in the quarter as adjusted earnings per share came in at 18 cents, down from 21 cents reported in the year-ago quarter and the Zacks Consensus Estimate of 25 cents.
For the fiscal year 2013, adjusted earnings per share increased 7.1% year over year to 91 cents but lagged the Zacks Consensus Estimate of 98 cents.
Revenue
Thermon Group reported a 3.0% year-over-year increase in revenues that settled at $71.7 million. For the fiscal year 2013, revenues were $284.0 million, up 4.3% year over year. The results were adversely impacted by a negative foreign currency translation amounting to $7.1 million.
Margins
Cost of sales in the fourth quarter soared 13.3% year over year and represented 55.5% of total revenue; up from 50.4% in the year-ago quarter. Marketing, general and administrative and engineering expenses of Thermon group, as a percentage of total revenue, stood at 23.4%. Operating margin in the quarter was 16.5%, down from 21.6% in the year-ago quarter.
Balance Sheet
Exiting the fiscal fourth quarter, cash and cash equivalents of Thermon Group were approximately $43.8 million, up 54.2% sequentially. On the other hand, long-term debt, net of current portion was stable at $118.1 million.
In May 2013, Thermon Group completed redemption of 9.5% senior notes by using a new loan with lower interest rates. This new adjustment is likely to reduce interest expense by $7.5 million or 23 cents per share on an annual basis, resulting in nearly $30 million savings in the next four years.
Cash Flow
Cash flow from operating activities in the fourth quarter was $15.4 million, up from $9.6 million in the year-ago quarter while capital expenditure by Thermon Group was at $1.0 million versus $2.7 million in the year-ago quarter.
For fiscal year 2013, cash flow from operating activities grew significantly from $3.1 million in 2012 to $41.3 million in 2013. Capital spending plummeted 29.5% to $6.3 million.
Thermon Group currently has a $614 million market capitalization and carries a Zacks Rank #3 (Hold). Other stocks to watch out for are Roper Industries Inc. (ROP), Nanometrics Incorporated (NANO) and Sensata Technologies Holding NV (ST).
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