ModusLink Global Solutions (MLNK) saw its loss narrow to $8.54 million, or $0.16 a share for the quarter ended Oct. 31, 2016. In the previous year period, the company reported a loss of $14.77 million, or $0.29 a share. Revenue during the quarter dropped 14.01 percent to $121.33 million from $141.09 million in the previous year period. Gross margin for the quarter contracted 113 basis points over the previous year period to 7.69 percent. Operating margin for the quarter stood at negative 4.65 percent as compared to a negative 1.11 percent for the previous year period.
Operating loss for the quarter was $5.64 million, compared with an operating loss of $1.57 million in the previous year period.
Adjusted EBITDA for the quarter stood at negative $1.58 million compared to negative $5.91 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 1.31 percent for the quarter compared to negative 4.19 percent in the last year period.
Commenting on the Company’s performance and turnaround reforms, Jim Henderson, Chief Executive Officer of ModusLink stated, “Our fiscal first quarter results are beginning to demonstrate the improvements in our business, though we believe the bigger impact of cost reduction and realignment initiatives will be seen in this upcoming quarter. We have made significant progress since we last reported and operationally, we’re performing more efficiently and with a lower cost structure. We have successfully de-centralized corporate functions, transitioned to a Business Unit model driven by investments at each of our global sites, and concurrently, launched several new initiatives focused on providing better client support and driving growth back into our business. The sequential improvements in revenue, gross margin and operating expenses have led to smaller losses, but our goal remains to get the Company back to profitability.”
Working capital drops significantly
ModusLink Global Solutions has witnessed a decline in the working capital over the last year. It stood at $116.05 million as at Oct. 31, 2016, down 38.68 percent or $73.21 million from $189.26 million on Oct. 31, 2015. Current ratio was at 1.58 as on Oct. 31, 2016, down from 1.69 on Oct. 31, 2015. Cash conversion cycle (CCC) has increased to 23 days for the quarter from 10 days for the last year period. Days sales outstanding went down to 49 days for the quarter compared with 55 days for the same period last year.
Days inventory outstanding has decreased to 19 days for the quarter compared with 21 days for the previous year period. At the same time, days payable outstanding went down to 45 days for the quarter from 66 for the same period last year.
Debt comes down significantly
ModusLink Global Solutions has recorded a decline in total debt over the last one year. It stood at $58.19 million as on Oct. 31, 2016, down 26.41 percent or $20.89 million from $79.08 million on Oct. 31, 2015. Moduslink Global Solutions has recorded a decline in long-term debt over the last one year. It stood at $58.19 million as on Oct. 31, 2016, down 26.41 percent or $20.89 million from $79.08 million on Oct. 31, 2015. Total debt was 16.86 percent of total assets as on Oct. 31, 2016, compared with 15.89 percent on Oct. 31, 2015. Debt to equity ratio was at 0.76 as on Oct. 31, 2016, up from 0.61 as on Oct. 31, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
