Talon International, Inc. (TALN) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $0.02 million in the quarter, against a net loss of $0.09 million in the last year period.
Revenue during the quarter grew 8.65 percent to $10.86 million from $9.99 million in the previous year period. Gross margin for the quarter expanded 125 basis points over the previous year period to 35.01 percent. Total expenses were 97.89 percent of quarterly revenues, down from 98.37 percent for the same period last year. This has led to an improvement of 47 basis points in operating margin to 2.11 percent.
Operating income for the quarter was $0.23 million, compared with $0.16 million in the previous year period.
"Talon continued to produce higher margins, due to a more favorable product mix and operational cost containments," stated Larry Dyne, Talon's Chief Executive Officer. "As our sales focus has become more geared to specialty retail branded customers, we’re able to offer customers wider product selections with increased margins. We continue to focus on product innovation, in both the Zipper and Trim segments, and plan to introduce new Fit for Purpose products for specific market segments over the next few quarters. Using proprietary and unique materials, we are focused on providing innovative products to meet our customers’ needs."
Working capital turns positive
Working capital of Talon International, Inc. has turned positive to $1.72 million on Sep. 30, 2016 from negative $3.10 million on Sep. 30, 2015. Current ratio was at 1.20 as on Sep. 30, 2016, up from 0.72 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 53 days for the quarter from 57 days for the last year period. Days sales outstanding went down to 40 days for the quarter compared with 41 days for the same period last year.
Days inventory outstanding has decreased to 4 days for the quarter compared with 8 days for the previous year period. At the same time, days payable outstanding went down to 97 days for the quarter from 106 for the same period last year.
Debt increases substantially
Talon International has witnessed an increase in total debt over the last one year. It stood at $4 million as on Sep. 30, 2016, up 136.81 percent or $2.31 million from $1.69 million on Sep. 30, 2015. Total debt was 19.74 percent of total assets as on Sep. 30, 2016, compared with 8.99 percent on Sep. 30, 2015. Debt to equity ratio was at 0.54 as on Sep. 30, 2016, up from 0.30 as on Sep. 30, 2015.
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