Span America Medical Systems, Inc. (SPAN) has reported a 15.74 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $0.96 million, or $0.35 a share in the quarter, compared with $1.14 million, or $0.42 a share for the same period last year.
Revenue during the quarter dropped 29.04 percent to $15.22 million from $21.45 million in the previous year period. Gross margin for the quarter expanded 1101 basis points over the previous year period to 36.57 percent. Total expenses were 90.86 percent of quarterly revenues, down from 92.74 percent for the same period last year. This has led to an improvement of 188 basis points in operating margin to 9.14 percent.
Operating income for the quarter was $1.39 million, compared with $1.56 million in the previous year period.
"We had excellent performance from our medical business in the first quarter of fiscal 2017. Our medical segment reported strong sales growth in the first quarter, with sales rising 10% to $12.5 million and making up 82% of total first quarter sales," stated Jim Ferguson, president and chief executive officer of Span-America. "Sales in the custom products segment were down in the first quarter as we expected because of a non-recurring seasonal promotion in the first quarter of fiscal 2016. However, our overall profit margins improved from the first quarter last fiscal year due to a more profitable sales mix. We also made solid progress in adding new customers for our consumer products since last year."
Working capital increases
Span America Medical Systems, Inc. has recorded an increase in the working capital over the last year. It stood at $14.85 million as at Dec. 31, 2016, up 15.69 percent or $2.01 million from $12.84 million on Jan. 02, 2016. Current ratio was at 3.79 as on Dec. 31, 2016, up from 3.15 on Jan. 02, 2016.
Cash conversion cycle (CCC) has decreased to 50 days for the quarter from 62 days for the last year period. Days sales outstanding went up to 45 days for the quarter compared with 36 days for the same period last year.
Days inventory outstanding has decreased to 34 days for the quarter compared with 45 days for the previous year period. At the same time, days payable outstanding went up to 28 days for the quarter from 19 for the same period last year.
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