Connecture, Inc (CNRX) saw its loss widen to $3.07 million, or $0.18 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $2.31 million, or $0.11 a share.
Revenue during the quarter grew 9.10 percent to $24.73 million from $22.67 million in the previous year period. Gross margin for the quarter contracted 868 basis points over the previous year period to 35.74 percent. Operating margin for the quarter stood at negative 10.15 percent as compared to a negative 3.94 percent for the previous year period.
Operating loss for the quarter was $2.51 million, compared with an operating loss of $0.89 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $0.63 million compared with $1.78 million in the prior year period. At the same time, adjusted EBITDA margin stood at negative 2.56 percent for the quarter compared to 7.87 percent in the last year period.
“Our third quarter results were marked by great progress towards meeting our clients’ objectives for a successful 2017 AEP and OEP enrollment season. We are particularly encouraged by a number of new marketplace launches for significant clients. We remain focused on efforts to add more new clients, as well as successfully renewing our core base of customers. To that end, during the third quarter, we signed several new broker and provider sponsored health plan customers and achieved a 100% renewal rate for customers with contracts up for renewal during the quarter,” remarked Jeff Surges, president and chief executive officer of Connecture. “While our third quarter revenue was better than expected, our profitability was impacted by greater than expected resources required to assist recently implemented customers. In light of these results, we are continuing our focus on cost management and productivity initiatives to lower expenses while ensuring that we continue to meet our clients’ expectations. We are confident that these efforts will improve our results as we close out the last quarter and head into 2017.”
Connecture, Inc projects revenue to be in the range of $85 million to $88 million for financial year 2016.
Operating cash flow remains negative
Connecture, Inc has spent $17.16 million cash to meet operating activities during the nine month period as against cash outgo of $14.81 million in the last year period.
The company has spent $5.35 million cash to meet investing activities during the nine month period as against cash outgo of $1.18 million in the last year period.
Cash flow from financing activities was $33.79 million for the nine month period as against cash outgo of $4.85 million in the last year period.
Cash and cash equivalents stood at $16.69 million as on Sep. 30, 2016, up 125.09 percent or $9.28 million from $7.42 million on Sep. 30, 2015.
Working capital remains negative
Working capital of Connecture, Inc was negative $21.77 million on Sep. 30, 2016 compared with negative $34.31 million on Sep. 30, 2015. Current ratio was at 0.57 as on Sep. 30, 2016, up from 0.40 on Sep. 30, 2015.
Days sales outstanding went down to 38 days for the quarter compared with 48 days for the same period last year.
At the same time, days payable outstanding went down to 42 days for the quarter from 48 for the same period last year.
Debt comes down significantly
Connecture, Inc has recorded a decline in total debt over the last one year. It stood at $35.52 million as on Sep. 30, 2016, down 27.98 percent or $13.80 million from $49.32 million on Sep. 30, 2015. Total debt was 36.93 percent of total assets as on Sep. 30, 2016, compared with 54.14 percent on Sep. 30, 2015.
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