Papa Murphy's Holdings, Inc. (FRSH) swung to a net loss for the quarter ended Sep. 26, 2016. The company has made a net loss of $0.42 million, or $ 0.03 a share in the quarter, against a net profit of $1.12 million, or $0.07 a share in the last year period. Revenue during the quarter went up marginally by 1.38 percent to $28.52 million from $28.13 million in the previous year period. Gross margin for the quarter contracted 366 basis points over the previous year period to 61.93 percent. Total expenses were 97.58 percent of quarterly revenues, up from 89.18 percent for the same period last year. That has resulted in a contraction of 840 basis points in operating margin to 2.42 percent.
Operating income for the quarter was $0.69 million, compared with $3.04 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $4.81 million compared with $6.14 million in the prior year period. At the same time, adjusted EBITDA margin contracted 497 basis points in the quarter to 16.87 percent from 21.84 percent in the last year period.
Ken Calwell, president and chief executive officer of Papa Murphy’s Holdings, Inc., stated, "We had a disappointing quarter, as the increasingly competitive environment, both in the pizza category and more broadly, magnified the effects of lower absolute media levels in this Presidential election year. In spite of the near-term challenges, we believe our long-term strategies, including appropriate new store openings, continue to be on point and will drive top line growth and profitability going forward, for both our franchisees and shareholders".
Working capital remains negative
Working capital of Papa Murphy's Holdings, Inc. was negative $9.24 million on Sep. 26, 2016 compared with negative $8.65 million on Sep. 28, 2015. Current ratio was at 0.53 as on Sep. 26, 2016, down from 0.63 on Sep. 28, 2015. Days sales outstanding went down to 8 days for the quarter compared with 13 days for the same period last year.
Debt comes down marginally
Papa Murphy's Holdings, Inc. has recorded a decline in total debt over the last one year. It stood at $106.98 million as on Sep. 26, 2016, down 4.19 percent or $4.68 million from $111.66 million on Sep. 28, 2015. Total debt was 39.06 percent of total assets as on Sep. 26, 2016, compared with 41.21 percent on Sep. 28, 2015. Debt to equity ratio was at 1.07 as on Sep. 26, 2016, down from 1.18 as on Sep. 28, 2015. Interest coverage ratio deteriorated to 0.58 for the quarter from 2.69 for the same period last year. 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
