Amplify Snack Brands Inc (BETR) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $1.64 million, or $ 0.02 a share in the quarter, against a net loss of $2.99 million, or $0.04 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $9.01 million, or $0.12 a share compared with $9.15 million or $0.12 a share, a year ago.
Revenue during the quarter surged 48.06 percent to $67.98 million from $45.91 million in the previous year period. Gross margin for the quarter contracted 831 basis points over the previous year period to 47.57 percent. Total expenses were 88.28 percent of quarterly revenues, down from 90.33 percent for the same period last year. This has led to an improvement of 205 basis points in operating margin to 11.72 percent.
Operating income for the quarter was $7.97 million, compared with $4.44 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $20.11 million compared with $18.11 million in the prior year period. At the same time, adjusted EBITDA margin contracted 987 basis points in the quarter to 29.58 percent from 39.44 percent in the last year period.
“We are very pleased to have completed the Tyrrells acquisition in the third quarter. Through this transaction, we diversified our better-for-you snack food offerings, expanded our geographic presence, and gained a highly-talented international team as well as in-house manufacturing capabilities,” commented Tom Ennis, Amplify’s president and chief executive officer. “Strong brand sales gains continued in the quarter, despite a more challenging market backdrop, and we experienced certain transitory operational execution issues that impacted our results. Amplify is now a much stronger and more diversified company, and we’ve proactively taken steps to sharpen execution going forward. We remain very excited about the significant potential we have to leverage our newly expanded portfolio of terrific better-for-you brands to drive continued sales growth, profitability and value for our shareholders.”
Amplify Snack Brands projects revenue to be in the range of $268 million to $272 million for financial year 2016. For financial year 2016, the company forecasts diluted earnings per share to be in the range of $0.49 to $0.51 on adjusted basis.
Working capital turns positive
Working capital of Amplify Snack Brands Inc has turned positive to $17.17 million on Sep. 30, 2016 from negative $17.28 million on Sep. 30, 2015. Current ratio was at 1.26 as on Sep. 30, 2016, up from 0.63 on Sep. 30, 2015.
Days sales outstanding went up to 27 days for the quarter compared with 12 days for the same period last year.
Days inventory outstanding has increased to 24 days for the quarter compared with 13 days for the previous year period.
Debt increases substantially
Amplify Snack Brands Inc has witnessed an increase in total debt over the last one year. It stood at $590.05 million as on Sep. 30, 2016, up 187.67 percent or $384.94 million from $205.12 million on Sep. 30, 2015. Total debt was 67.70 percent of total assets as on Sep. 30, 2016, compared with 58.17 percent on Sep. 30, 2015. Debt to equity ratio was at 9.26 as on Sep. 30, 2016, down from 19.84 as on Sep. 30, 2015. Interest coverage ratio improved to 3.17 for the quarter from 1.34 for the same period last year.
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