ShoreTel, Inc (SHOR) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $5.63 million, or $ 0.08 a share in the quarter, against a net profit of $2.11 million, or $0.03 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $0.57 million, or $0.01 a share compared with $6.18 million or $0.09 a share, a year ago.
Revenue during the quarter dropped 4.17 percent to $86.27 million from $90.02 million in the previous year period. Gross margin for the quarter contracted 147 basis points over the previous year period to 62.97 percent. Operating margin for the quarter stood at negative 6.09 percent as compared to a positive 3.57 percent for the previous year period.
Operating loss for the quarter was $5.26 million, compared with an operating income of $3.22 million in the previous year period.
However, the adjusted operating income for the quarter stood at $0.94 million compared to $7.64 million in the prior year period. At the same time, adjusted operating margin contracted 741 basis points in the quarter to 1.08 percent from 8.49 percent in the last year period.
"In the quarter, our hosted revenue continued to grow as expected and is now the largest of our three revenue lines. Although the product revenue decline was greater than we anticipated, we have and will make the necessary cost adjustments to our financial model as our business transforms to a recurring revenue model," said Don Joos, president and chief executive officer of ShoreTel. "We executed our five catalysts for growth, with global strength in the mid-market and our premises-to-cloud migration program providing solid contributions to our cloud bookings."
Working capital increases marginally
ShoreTel, Inc has recorded an increase in the working capital over the last year. It stood at $51.41 million as at Sep. 30, 2016, up 2.50 percent or $1.25 million from $50.16 million on Sep. 30, 2015. Current ratio was at 1.48 as on Sep. 30, 2016, up from 1.46 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 8 days for the quarter from 30 days for the last year period. Days sales outstanding were almost stable at 32 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 22 days for the quarter compared with 41 days for the previous year period. At the same time, days payable outstanding went up to 47 days for the quarter from 44 for the same period last year.
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