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24 November, 2017 03:40 IST
hhgregg third-quarter loss widens on a YOY basis
Source: IRIS | 21 Mar, 2017, 02.24AM

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hhgregg, Inc (HGG) saw its loss widen to $58.27 million, or $2.10 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $26.91 million, or $0.97 a share. On the other hand, adjusted net loss for the quarter widened to $47.34 million, or $1.70 a share from a loss of $4.29 million or $0.15 a share, a year ago.  

Revenue during the quarter dropped 23.67 percent to $452.79 million from $593.22 million in the previous year period. Gross margin for the quarter contracted 410 basis points over the previous year period to 22.04 percent. Operating margin for the quarter stood at negative 12.63 percent as compared to a negative 4.20 percent for the previous year period.

Operating loss for the quarter was $57.16 million, compared with an operating loss of $24.94 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at negative $39.23 million compared with $4.79 million in the prior year period. At the same time, adjusted EBITDA margin stood at negative 8.66 percent for the quarter compared to 0.81 percent in the last year period.

Robert Riesbeck, president and chief executive officer, commented, “During the quarter, we were challenged by the competitive pressures in the market, specifically in consumer electronics as it is a larger mix of our business during the holidays. Additionally, the consolidation of two existing distribution centers into one new distribution center had a temporary negative impact on our sales for the quarter, in the range of $20 to $25 million. Although we are disappointed with our overall performance during the quarter, we are pleased with our investments made to shift our focus to appliances and furniture, through resetting store layouts, adding Fine Lines departments and promotions focused on our successful appliance business. Going forward, we will continue our focus on our appliance and home products categories and will continue to reposition our consumer electronics business to focus on the premium models."

Operating cash flow remains negative
hhgregg, Inc has spent $0.70 million cash to meet operating activities during the nine month period as against cash outgo of $12.20 million in the last year period.

The company has spent $18.67 million cash to meet investing activities during the nine month period as against cash outgo of $10.49 million in the last year period. It has incurred net capital expenditure of $18.46 million on net basis during the nine month period, up 78.81 percent or $8.14 million from year ago period.

Cash flow from financing activities was $17.62 million for the nine month period as against cash outgo of $0.68 million in the last year period.

Cash and cash equivalents stood at $1.95 million as on Dec. 31, 2016, down 72.24 percent or $5.08 million from $7.04 million on Dec. 31, 2015.

Working capital drops significantly
hhgregg, Inc has witnessed a decline in the working capital over the last year. It stood at $24.78 million as at Dec. 31, 2016, down 76.81 percent or $82.09 million from $106.87 million on Dec. 31, 2015. Current ratio was at 1.11 as on Dec. 31, 2016, down from 1.38 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 3 days for the quarter from 37 days for the last year period. Days sales outstanding went up to 7 days for the quarter compared with 5 days for the same period last year.

Days inventory outstanding has decreased to 27 days for the quarter compared with 66 days for the previous year period. At the same time, days payable outstanding went down to 32 days for the quarter from 33 for the same period last year.

Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net



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