During the quarter, the company divested the majority of its North American cleanroom operation, and one flat linen business. As a result of these divestitures and other asset sales, the company recorded a gain of $0.08 per diluted share and generated net cash from investing activities of $9.1 million.
Financial Strength
The company's balance sheet remains strong. As of December 26, 2009, the company had total borrowings of $197.9 million and a debt to capitalization ratio of 30.1 percent. Total shareholder's equity at the end of the second quarter was $459.2 million.
The company continued to generate strong cash flow from operations and has reduced its debt, net of cash, by $87.2 million from the second quarter of fiscal 2009. Cash provided by operating activities for the six months ended December 26, 2009 was $37.3 million, driven by strong working capital management. For the six month period, free cash flow, defined as cash flow from operations less capital expenditures, was $30.6 million, compared to $23.7 million in the prior-year period.
Outlook
The company expects third quarter revenue and operating margin to be generally consistent with the second quarter, after adjusting for divestitures and the annual reset of payroll taxes.
As previously disclosed, the company does not provide a specific quarterly range for anticipated revenue or earnings due primarily to prolonged difficult economic and employment conditions and numerous operating changes currently being executed as part of the company's new game plan.
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
