Rosetta Stone (RST) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $0.45 million, or $ 0.02 a share in the quarter, against a net loss of $7.51 million, or $0.34 a share in the last year period.
Revenue during the quarter went down marginally by 0.64 percent to $47.69 million from $48 million in the previous year period. Gross margin for the quarter contracted 30 basis points over the previous year period to 82.93 percent. Operating margin for the quarter period stood at positive 1.98 percent as compared to a negative 17.06 percent for the previous year period.
Operating income for the quarter was $0.94 million, compared with an operating loss of $8.19 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $5.16 million compared to negative $1.56 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at 10.81 percent for the quarter compared to negative 3.26 percent in the last year period.
"Consolidated revenue was essentially flat year-over-year, reflecting another strong quarter at Lexia that offset expected declines in our Consumer and Enterprise & Education Language segments following the significant restructuring of those businesses over the last two years," said John Hass, chairman, president and chief executive officer. “I am also excited to begin our strategic partnership with SOURCENEXT in Japan, which is progressing as planned starting with the receipt of $9.0 million of an expected $13.0 million of initial payments. We also recently entered into an agreement to sell our Japanese entity to SOURCENEXT and we expect to close that transaction in the near term."
Operating cash flow turns positiveRosetta Stone has generated cash of $5.77 million from operating activities during the quarter as against cash outgo of $2.55 million in the last year period. The company has spent $2.31 million cash to meet investing activities during the quarter as against cash outgo of $2.59 million in the last year period.
The company has spent $0.17 million cash to carry out financing activities during the quarter as against cash outgo of $0.32 million in the last year period.
Cash and cash equivalents stood at $39.71 million as on Mar. 31, 2017, down 7.63 percent or $3.28 million from $43 million on Mar. 31, 2016.
Working capital remains negative
Working capital of Rosetta Stone was negative $58.13 million on Mar. 31, 2017 compared with negative $52.19 million on Mar. 31, 2016. Current ratio was at 0.59 as on Mar. 31, 2017, down from 0.65 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 9 days for the quarter from 30 days for the last year period. Days sales outstanding went down to 65 days for the quarter compared with 73 days for the same period last year.
Days inventory outstanding has decreased to 35 days for the quarter compared with 82 days for the previous year period. At the same time, days payable outstanding went down to 109 days for the quarter from 125 for the same period last year.
Debt comes downRosetta Stone has recorded a decline in total debt over the last one year. It stood at $2.36 million as on Mar. 31, 2017, down 22.22 percent or $0.67 million from $3.03 million on Mar. 31, 2016. Total debt was 1.27 percent of total assets as on Mar. 31, 2017, compared with 1.47 percent on Mar. 31, 2016. 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
