Echelon Corporation (ELON) saw its loss widen to $1.30 million, or $0.29 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $1.05 million, or $0.24 a share. On the other hand, adjusted net loss for the quarter widened to $1.11 million, or $0.25 a share from a loss of $0.89 million or $0.20 a share, a year ago.
Revenue during the quarter dropped 18.07 percent to $8.18 million from $9.98 million in the previous year period. Gross margin for the quarter contracted 148 basis points over the previous year period to 54.75 percent. Operating margin for the quarter stood at negative 14.94 percent as compared to a negative 12.38 percent for the previous year period.
Operating loss for the quarter was $1.22 million, compared with an operating loss of $1.24 million in the previous year period.
“Revenue from our connected lighting business increased for the third consecutive quarter while we maintained our operating expenses at historical lows,” said Ron Sege, chairman and chief executive officer of Echelon. “This quarter we introduced exciting new products that offer a wider range of sustainability, security and livability applications for making cities and enterprises smart. According to an independent study released in October by the Northeast Group, LLC, Echelon now sits among the top three market leaders in terms of deployed smart streetlight systems worldwide.”
For the fourth-quarter, Echelon Corp forecasts revenue to be in the range of $7.80 million to $8.20 million. The company expects diluted earnings per share to be in the range of $0.27 to $0.39 for the fourth-quarter. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.18 to $0.30 for the fourth-quarter.
Operating cash flow remains negative
Echelon Corporation has spent $2.18 million cash to meet operating activities during the nine month period as against cash outgo of $4.19 million in the last year period.
Cash flow from investing activities was $5.04 million for the nine month period, down 58.01 percent or $6.96 million, when compared with the last year period.
The company has spent $0.04 million cash to carry out financing activities during the nine month period as against cash outgo of $11.30 million in the last year period.
Cash and cash equivalents stood at $10.49 million as on Sep. 30, 2016, up 13.93 percent or $1.28 million from $9.20 million on Sep. 30, 2015.
Working capital declines
Echelon Corporation has witnessed a decline in the working capital over the last year. It stood at $24.16 million as at Sep. 30, 2016, down 8.78 percent or $2.33 million from $26.49 million on Sep. 30, 2015. Current ratio was at 4.14 as on Sep. 30, 2016, up from 3.68 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 21 days for the quarter from 50 days for the last year period. Days sales outstanding went up to 42 days for the quarter compared with 36 days for the same period last year.
Days inventory outstanding has decreased to 32 days for the quarter compared with 59 days for the previous year period. At the same time, days payable outstanding went up to 54 days for the quarter from 45 for the same period last year.
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