NEW YORK ( TheStreet) -- TOR Minerals International (Nasdaq: TORM) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- The gross profit margin for TOR MINERALS INTL INC is currently lower than what is desirable, coming in at 27.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.00% trails that of the industry average.
- Net operating cash flow has significantly decreased to $0.46 million or 55.21% when compared to the same quarter last year. Despite a decrease in cash flow of 55.21%, TOR MINERALS INTL INC is in line with the industry average cash flow growth rate of -56.52%.
- TOR MINERALS INTL INC's earnings per share declined by 15.4% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TOR MINERALS INTL INC turned its bottom line around by earning $0.88 versus -$0.05 in the prior year.
- TORM's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.24, which illustrates the ability to avoid short-term cash problems.
- The revenue growth came in higher than the industry average of 22.7%. Since the same quarter one year prior, revenues rose by 39.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.