Liberty Tax (TAX) has reported 9.16 percent fall in profit for the quarter ended Apr. 30, 2017. The company has earned $29.33 million, or $2.10 a share in the quarter, compared with $32.29 million, or $2.31 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $31.07 million, or $2.23 a share compared with $32.45 million or $2.32 a share, a year ago.
Revenue during the quarter grew 6.48 percent to $111.18 million from $104.41 million in the previous year period. Total expenses were 56.67 percent of quarterly revenues, up from 50.73 percent for the same period last year. That has resulted in a contraction of 593 basis points in operating margin to 43.33 percent.
Operating income for the quarter was $48.18 million, compared with $51.44 million in the previous year period.
However, the adjusted operating income for the quarter stood at $51.01 million compared to $51.69 million in the prior year period.
"This season’s results were clearly disappointing," said John Hewitt, chief executive officer. "In addition to the reduction in overall store and return counts, we saw significant underperformance in our company-owned locations. We are carefully evaluating changes to our operations to enable us to return to our past pattern of growth in market share, revenue and earnings."
Operating cash flow improvesLiberty Tax has generated cash of $32.45 million from operating activities during the year, up 8.82 percent or $2.63 million, when compared with the last year. The company has spent $13.25 million cash to meet investing activities during the year as against cash outgo of $29.31 million in the last year. It has incurred net capital expenditure of $13.73 million on net basis during the year, up 9.46 percent or $1.19 million from year ago.
The company has spent $12.37 million cash to carry out financing activities during the year as against cash outgo of $11.81 million in the last year period.
Cash and cash equivalents stood at $16.43 million as on Apr. 30, 2017, up 65.83 percent or $6.52 million from $9.91 million on Apr. 30, 2016.
Debt moves up
Liberty Tax has witnessed an increase in total debt over the last one year. It stood at $26.20 million as on Apr. 30, 2017, up 11.77 percent or $2.76 million from $23.44 million on Apr. 30, 2016. Interest coverage ratio deteriorated to 95.40 for the quarter from 115.08 for the same period last year.
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