Sierra Monitor Corporation (SRMC) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $0.04 million in the quarter, against a net profit of $0.24 million in the last year period. On the other hand, adjusted net income for the quarter stood at $0.05 million, or $0.01 a share compared with $0.36 million or $0.04 a share, a year ago. Revenue during the quarter dropped 4.41 percent to $4.76 million from $4.98 million in the previous year period. Gross margin for the quarter contracted 253 basis points over the previous year period to 57.28 percent. Operating margin for the quarter stood at negative 0.74 percent as compared to a positive 7.51 percent for the previous year period.
Operating loss for the quarter was $0.04 million, compared with an operating income of $0.37 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $0.04 million compared with $0.47 million in the prior year period. At the same time, adjusted EBITDA margin contracted 850 basis points in the quarter to 0.93 percent from 9.42 percent in the last year period.
"2016 was a challenging year as we executed on our North American-centric, product development-driven pivot to take advantage of the Industrial Internet of Things (IIoT) trend. R&D spending grew as planned by nearly half a million dollars in 2016 relative to 2015 as we increased our efforts on IIoT-specific initiatives such as the FieldPoP™ device cloud portal and new FieldServer wireless gateways that we believe will assist in driving wins in 2017 and beyond. Our overall revenue in 2016 fell by 6% relative to 2015, with our international business, where we faced increased pricing pressure, declining by 12%. In North America, our traditional facility safety business declined by 8% as the level of activity in the alternative fuel segment was depressed due to low oil prices. However, our IIoT-focused facility automation business in North America, which is the main focus of our pivot, was stable, and now accounts for approximately 54% of our revenue relative to 53% in 2015. We also met our target of initiating 20 or more beta trials for the FieldPoP device cloud in 2016. In 2016, the facility automation business gained more than 20 new revenue-producing “design-in” customers to add to our more than 200 existing Original Equipment Manufacturer (OEM) customers, but we were also designed out by a large legacy customer, resulting in aggregate flat revenues in this segment," said Varun Nagaraj, president and chief executive officer.
Working capital remains almost stable
Working capital of Sierra Monitor Corporation remained almost stable for the quarter at $9.08 million, when compared with the previous year period. Current ratio was at 7.24 as on Dec. 31, 2016, up from 6.09 on Dec. 31, 2015.
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