Digi International (DGII) has reported 28.78 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $3.84 million, or $0.14 a share in the quarter, compared with $2.98 million, or $0.12 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $3.79 million, or $0.14 a share compared with $3.69 million or $0.14 a share, a year ago. Revenue during the quarter dropped 6.87 percent to $50.45 million from $54.17 million in the previous year period. Gross margin for the quarter expanded 21 basis points over the previous year period to 48.77 percent. Total expenses were 90.01 percent of quarterly revenues, down from 90.19 percent for the same period last year. This has led to an improvement of 18 basis points in operating margin to 9.99 percent.
Operating income for the quarter was $5.04 million, compared with $5.31 million in the previous year period.
"Were pleased with our fiscal 2016 results, particularly with our strong profit and cash generation. One of our goals is to improve our consistency of performance," said Ron Konezny, president and chief executive officer. "We are working hard to simplify and scale the business which helped us achieve our double digit EBITDA goal. We will continue to focus on our three key priorities, which include maintaining a consistently profitable business model, generating top line revenue growth, and building a hardware-enabled solutions business," continued Mr. Konezny.
For the first-quarter, Digi International expects revenue to be in the range of $45 million to $48 million. Digi International expects revenue to be in the range of $200 million to $210 million for financial year 2017. The company projects diluted earnings per share to be in the range of $0.06 to $0.08 for the first-quarter. For financial year 2017, the company projects diluted earnings per share to be in the range of $0.38 to $0.46.
Operating cash flow improves significantlyDigi International has generated cash of $27.09 million from operating activities during the year, up 92.48 percent or $13.01 million, when compared with the last year. The company has spent $3.78 million cash to meet investing activities during the year as against cash outgo of $19.45 million in the last year.
Cash flow from financing activities was $7.75 million for the year, up 50.61 percent or $2.60 million, when compared with the last year.
Cash and cash equivalents stood at $75.73 million as on Sep. 30, 2016, up 68.21 percent or $30.71 million from $45.02 million on Sep. 30, 2015.
Working capital increases sharply
Digi International has recorded an increase in the working capital over the last year. It stood at $171.84 million as at Sep. 30, 2016, up 25.43 percent or $34.84 million from $137 million on Sep. 30, 2015. Current ratio was at 8.22 as on Sep. 30, 2016, up from 6.91 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 58 days for the quarter from 65 days for the last year period. Days sales outstanding went up to 26 days for the quarter compared with 24 days for the same period last year.
Days inventory outstanding has decreased to 47 days for the quarter compared with 53 days for the previous year period. At the same time, days payable outstanding went up to 15 days for the quarter from 11 for the same period last year.
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