Hooper Holmes, Inc. (HH) saw its loss narrow to $2.05 million, or $0.22 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $2.12 million, or $0.41 a share.
Revenue during the quarter grew 5.16 percent to $9.75 million from $9.27 million in the previous year period. Gross margin for the quarter expanded 235 basis points over the previous year period to 25.31 percent. Operating margin for the quarter stood at negative 11.98 percent as compared to a negative 17.99 percent for the previous year period.
Operating loss for the quarter was $1.17 million, compared with an operating loss of $1.67 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $0.08 million compared to negative $0.41 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 0.83 percent for the quarter compared to negative 4.47 percent in the last year period.
Henry Dubois, president and chief executive officer of Hooper Holmes commented, "Gross profit and adjusted EBITDA improved for the third consecutive quarter. While we have experienced a longer than usual lead time in ramping up revenue from new contracts, revenues have increased 8.9% on a year-to-date basis, compared to 2015. As top line revenue increases, along with better gross and operating margins, we expect to be generating cash flows from operations." "As a result of these trends our business in the fourth quarter 2016 is off to a good start and should compare favorably to the fourth quarter 2015. We believe this gives us a solid base on which to grow as we continue to execute our plans to improve financial performance. As 2017 begins we expect to see continued year-over-year improvements."
Working capital remains negative
Working capital of Hooper Holmes, Inc. was negative $7.46 million on Sep. 30, 2016 compared with negative $4.81 million on Sep. 30, 2015. Current ratio was at 0.58 as on Sep. 30, 2016, down from 0.68 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 19 days for the quarter from 29 days for the last year period. Days sales outstanding went down to 62 days for the quarter compared with 66 days for the same period last year.
Days inventory outstanding was almost stable at 9 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 52 days for the quarter from 47 for the same period last year.
Debt increases substantially
Hooper Holmes, Inc. has witnessed an increase in total debt over the last one year. It stood at $6.92 million as on Sep. 30, 2016, up 31.63 percent or $1.66 million from $5.26 million on Sep. 30, 2015. Total debt was 39.65 percent of total assets as on Sep. 30, 2016, compared with 25.85 percent on Sep. 30, 2015.
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