Papa Murphy's Holdings, Inc. (FRSH) has reported a 43.92 percent plunge in profit for the quarter ended Jan. 02, 2017. The company has earned $1.48 million, or $0.09 a share in the quarter, compared with $2.63 million, or $0.16 a share for the same period last year.
Revenue during the quarter grew 5.02 percent to $35.48 million from $33.79 million in the previous year period. Gross margin for the quarter contracted 131 basis points over the previous year period to 65.60 percent. Total expenses were 89.23 percent of quarterly revenues, up from 86.23 percent for the same period last year. That has resulted in a contraction of 301 basis points in operating margin to 10.77 percent.
Operating income for the quarter was $3.82 million, compared with $4.65 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $7.78 million compared with $7.53 million in the prior year period. At the same time, adjusted EBITDA margin contracted 34 basis points in the quarter to 21.94 percent from 22.28 percent in the last year period.
Jean Birch, Board chair and interim chief executive officer of Papa Murphy's Holdings, Inc., stated, "While top-line results continued to be challenged, we are pleased that we were able to maintain profitability in the quarter by focusing on cost controls and company-store margins. As we look ahead, we believe we have made progress in 2017 and are on the right track to return this system to growth. So far, we have tested national cable television advertising, generating brand awareness in many markets that have never benefited from television. We announced our first strategic refranchising transaction with an experienced operator committed to grow the business. We right-sized SG&A expenses while better focusing resources on our asset-light franchise business. And, just this week, we launched a delivery test with Amazon’s Restaurant Delivery Service, Prime Now. We have a long way to go in an increasingly competitive environment, but believe we are on the right track to ultimately reward all of our franchise owners, employees, and shareholders."
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