Thermon Group Holdings, Inc.
) reported its financial results for the first quarter of fiscal
year 2014 (ended Jun 30, 2013) on Aug 8, 2013. Adjusted earnings
per share in the quarter came in at 23 cents, in line with the
year-ago quarter earnings but below the Zacks Consensus Estimate
of 27 cents.
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Thermon Group's revenues in the quarter fell 3% year over year to
$65.6 million primarily due to lower revenue generation in
Cost of sales in the first quarter of 2014 increased 0.7% year
over year and represented 52.7% of the total revenue; up from
50.7% in the year-ago quarter. Marketing, general and
administrative and engineering expenses of Thermon group, as a
percentage of the total revenue, stood at 24.1%. Operating margin
in the quarter was 18.4%, down from 21.5% in the year-ago
Exiting the fiscal first quarter of 2014, cash and cash
equivalents of Thermon Group were approximately $45.4 million, up
3.7% from $43.8 million in the previous quarter. On the other
hand, long-term debt, net of current maturities was stable at
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 from operating activities in the first quarter was $6.2
million, up from $0.4 million in the year-ago quarter while
capital expenditure by Thermon Group was $0.6 million versus $1.3
million in the year-ago quarter.
Increase in cash flow from operating activities and fall in
capital spending led to drastic increase in free cash flow that
came in at $5.5 million.
For fiscal year 2014, Thermon Group's management expects
mid-single digit revenue growth.
Thermon Group currently has a $611.8 million market
capitalization and carries a Zacks Rank #3 (Hold). Other stocks
to watch out for in the industry are
Lennox International, Inc.
). While Lennox carries a Zacks Rank #1 (Strong Buy),
Nordson and Cummins hold a Zacks Rank #2 (Buy).