IMAGE SENSING SYSTEMS INC (ISNS) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $0.47 million, or $ 0.09 a share in the quarter, against a net loss of $0.92 million, or $0.18 a share in the last year period. Revenue during the quarter dropped 16.72 percent to $3.38 million from $4.06 million in the previous year period. Gross margin for the quarter contracted 90 basis points over the previous year period to 75.93 percent. Total expenses were 85.33 percent of quarterly revenues, down from 92.91 percent for the same period last year. This has led to an improvement of 757 basis points in operating margin to 14.67 percent.
Operating income for the quarter was $0.50 million, compared with $0.29 million in the previous year period.
However, the adjusted operating income for the quarter stood at $0.57 million compared to $0.48 million in the prior year period. At the same time, adjusted operating margin improved 496 basis points in the quarter to 16.85 percent from 11.89 percent in the last year period.
"In spite of the decreased third quarter revenue results, we remain optimistic that our recent product development investments and operational changes will result in improved financial performance," said Chad Stelzig, Interim chief executive officer for ISS. "While we will continue to experience quarter over quarter revenue variability, we believe that our strategic investments, product offering diversification and improved business processes are moving the company in the right direction. These initiatives will create more stability and profitability over the longer term.
Operating cash flow turns positiveIMAGE SENSING SYSTEMS has generated cash of $0.43 million from operating activities during the nine month period as against cash outgo of $2.40 million in the last year period. The company has spent $1.32 million cash to meet investing activities during the nine month period as against cash inflow of $2.51 million in the last year period.
Cash and cash equivalents stood at $1.68 million as on Sep. 30, 2016, down 37.45 percent or $1 million from $2.68 million on Sep. 30, 2015.
Working capital declines
IMAGE SENSING SYSTEMS has witnessed a decline in the working capital over the last year. It stood at $3.60 million as at Sep. 30, 2016, down 9.94 percent or $0.40 million from $4 million on Sep. 30, 2015. Current ratio was at 3.02 as on Sep. 30, 2016, up from 2.30 on Sep. 30, 2015.
Cash conversion cycle (CCC) has increased to 78 days for the quarter from 4 days for the last year period. Days sales outstanding went up to 112 days for the quarter compared with 96 days for the same period last year.
Days inventory outstanding has decreased to 9 days for the quarter compared with 135 days for the previous year period. At the same time, days payable outstanding went down to 199 days for the quarter from 227 for the same period last year.
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