Numerex Corp (NMRX) saw its loss widen to $4.02 million, or $0.21 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $2.33 million, or $0.12 a share.
Revenue during the quarter dropped 9.22 percent to $16.38 million from $18.05 million in the previous year period. Gross margin for the quarter contracted 299 basis points over the previous year period to 48.15 percent. Operating margin for the quarter stood at negative 14.41 percent as compared to a negative 9.68 percent for the previous year period.
Operating loss for the quarter was $2.36 million, compared with an operating loss of $1.75 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $0.54 million compared with $0.86 million in the prior year period. At the same time, adjusted EBITDA margin contracted 148 basis points in the quarter to 3.27 percent from 4.75 percent in the last year period.
"Numerex made strong progress in improving our business model in the first quarter of 2017 resulting in a sequential improvement in operating cash flow and Adjusted EBITDA. Our more focused strategy resulted in significant advancement of product roadmap and development timelines in our key verticals, while, at the same time, reducing expenses by $4.6 million on an annualized basis versus the first quarter of 2016. Additionally, we experienced stabilization in our subscriber base as customer churn decreased with the completion of the AT&T 2G sunset. Our sales pipeline continues to remain healthy and with new product releases planned this year, Numerex is poised for growth and margin expansion in the second half of 2017," commented Ken Gayron Interim chief executive officer and chief financial officer.
Working capital drops significantly
Numerex Corp has witnessed a decline in the working capital over the last year. It stood at $3.64 million as at Mar. 31, 2017, down 78.63 percent or $13.38 million from $17.02 million on Mar. 31, 2016. Current ratio was at 1.14 as on Mar. 31, 2017, down from 2.06 on Mar. 31, 2016.
Cash conversion cycle (CCC) has increased to 44 days for the quarter from 21 days for the last year period. Days sales outstanding went up to 59 days for the quarter compared with 55 days for the same period last year.
Days inventory outstanding has decreased to 44 days for the quarter compared with 81 days for the previous year period. At the same time, days payable outstanding went up to 147 days for the quarter from 114 for the same period last year.
Debt moves up
Numerex Corp has witnessed an increase in total debt over the last one year. It stood at $16.90 million as on Mar. 31, 2017, up 5.91 percent or $0.94 million from $15.96 million on Mar. 31, 2016. Short-term debt stood at $4.22 million as on Mar. 31, 2017. Total debt was 19.18 percent of total assets as on Mar. 31, 2017, compared with 14.94 percent on Mar. 31, 2016. Debt to equity ratio was at 0.35 as on Mar. 31, 2017, up from 0.22 as on Mar. 31, 2016.
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