Sierra Monitor Corporation (SRMC) has reported an 82.76 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $0.05 million in the quarter, compared with $0.26 million for the same period last year. On the other hand, adjusted net income for the quarter stood at $0.23 million, or $0.02 a share compared with $0.44 million or $0.04 a share, a year ago.
Revenue during the quarter dropped 6.20 percent to $5.06 million from $5.40 million in the previous year period. Gross margin for the quarter contracted 301 basis points over the previous year period to 56.88 percent. Total expenses were 97.30 percent of quarterly revenues, up from 90.79 percent for the same period last year. That has resulted in a contraction of 651 basis points in operating margin to 2.70 percent.
Operating income for the quarter was $0.14 million, compared with $0.50 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $0.22 million compared with $0.59 million in the prior year period. At the same time, adjusted EBITDA margin contracted 667 basis points in the quarter to 4.34 percent from 11.01 percent in the last year period.
"Q3 2016 revenue increased approximately 5% over Q2 2016, but a technology refresh and upgrade program contributed to a slight reduction in gross margins for the quarter," said Varun Nagaraj, president and chief executive officer. "In the gas business, we are seeing encouraging movement for new large projects in the United States such as the start of an upgrade cycle at LA Metro, but our Middle East business continues to underperform relative to previous quarters and years."
Working capital increases
Sierra Monitor Corporation has recorded an increase in the working capital over the last year. It stood at $9.21 million as at Sep. 30, 2016, up 5.08 percent or $0.45 million from $8.76 million on Sep. 30, 2015. Current ratio was at 6.97 as on Sep. 30, 2016, up from 6.09 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 66 days for the quarter from 123 days for the last year period. Days sales outstanding went up to 47 days for the quarter compared with 43 days for the same period last year.
Days inventory outstanding has decreased to 53 days for the quarter compared with 116 days for the previous year period. At the same time, days payable outstanding went down to 35 days for the quarter from 36 for the same period last year.
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