Revenue during the quarter dropped 3.03 percent to $97.85 million from $100.90 million in the previous year period. Gross margin for the quarter contracted 218 basis points over the previous year period to 57.18 percent. Total expenses were 96.22 percent of quarterly revenues, up from 95.84 percent for the same period last year. That has resulted in a contraction of 37 basis points in operating margin to 3.78 percent.

Operating income for the quarter was $3.70 million, compared with $4.20 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $28.57 million compared with $31.25 million in the prior year period. At the same time, adjusted EBITDA margin contracted 178 basis points in the quarter to 29.19 percent from 30.97 percent in the last year period.

"I am proud of what Hawaiian Telcom and its employees have been able to achieve over the last six years as a public company," said Scott Barber, Hawaiian Telcom’s president and chief executive officer. "Six years ago we anticipated the coming industry-wide decline in traditional legacy revenues and made the strategic decision to invest in upgrading our network with fiber that would enable us to provide advanced high-bandwidth services to Hawai‘i’s consumers and businesses. As a result of executing this decision, strategic revenues now represent almost half of our consumer revenue and 40 percent of our business revenue. We have successfully transformed the Company into Hawai‘i’s Technology Leader, a strategic partner for businesses and a next-generation communications and entertainment provider for Hawai‘i consumers."

The company has spent $78.33 million cash to meet investing activities during the nine month period as against cash outgo of $76.33 million in the last year period.

The company has spent $4.27 million cash to carry out financing activities during the nine month period as against cash outgo of $0.30 million in the last year period.

Cash and cash equivalents stood at $20.65 million as on Sep. 30, 2016, down 28.41 percent or $8.20 million from $28.84 million on Sep. 30, 2015.

Working capital turns negative
Working capital of Hawaiian Telcom Holdco, Inc. has turned negative to $25.53 million on Sep. 30, 2016 from positive $0.54 million on Sep. 30, 2015. Current ratio was at 0.72 as on Sep. 30, 2016, down from 1.01 on Sep. 30, 2015.

Cash conversion cycle (CCC) has increased to 68 days for the quarter from 49 days for the last year period. Days sales outstanding went down to 29 days for the quarter compared with 31 days for the same period last year.

Days inventory outstanding has decreased to 9 days for the quarter compared with 21 days for the previous year period. At the same time, days payable outstanding went up to 106 days for the quarter from 102 for the same period last year.