Payment Data Systems (PYDS) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $0.24 million, or $ 0.03 a share in the quarter, against a net profit of $0.16 million, or $0.01 a share in the last year period.
Revenue during the quarter dropped 21.09 percent to $2.89 million from $3.66 million in the previous year period. Gross margin for the quarter contracted 510 basis points over the previous year period to 30.72 percent. Operating margin for the quarter stood at negative 9.83 percent as compared to a positive 3.74 percent for the previous year period.
Operating loss for the quarter was $0.28 million, compared with an operating income of $0.14 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $0.20 million compared with $0.67 million in the prior year period. At the same time, adjusted EBITDA margin contracted 1122 basis points in the quarter to 7.09 percent from 18.31 percent in the last year period.
"In 2016 we took strong actions to increase revenues and drive future growth, and we expect these efforts to yield favorable results this year," said president and chief executive officer Louis Hoch. "Despite lower than anticipated revenues last year, we produced positive operating cash flow and adjusted EBITDA, and we were pleased to achieve the third highest annual levels of dollars processed since our Company's inception. Throughout 2016, our unwavering focus on long-term value creation delivered standout innovations for our ACH, credit card, and prepaid platforms. These included a new client facing web application that allows customers to more easily manage their payments, an Apple iOS software development kit that enables developers to easily integrate payment acceptance into their apps, real-time provisioning to mobile wallets, and instantaneous issuance and delivery of digital gift and incentive cards. Diversification of our customer verticals was another top priority, and during the third quarter we completed the integration of our payments gateway into various debit networks to enable our new PIN-less debit services. We believe we have a significant runway ahead for this new product as we expand our coverage nationwide and cultivate a rich sales pipeline that is larger than ever before."
Operating cash flow drops significantly
Payment Data Systems has generated cash of $0.85 million from operating activities during the year, down 59.40 percent or $1.24 million, when compared with the last year.
The company has spent $0.36 million cash to meet investing activities during the year as against cash outgo of $0.79 million in the last year.
The company has spent $0.43 million cash to carry out financing activities during the year as against cash outgo of $0.05 million in the last year period.
Cash and cash equivalents stood at $4.12 million as on Dec. 31, 2016, up 1.51 percent or $0.06 million from $4.06 million on Dec. 31, 2015.
Working capital increases
Payment Data Systems has recorded an increase in the working capital over the last year. It stood at $4.52 million as at Dec. 31, 2016, up 16.79 percent or $0.65 million from $3.87 million on Dec. 31, 2015. Current ratio was at 1.07 as on Dec. 31, 2016, up from 1.07 on Dec. 31, 2015.
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