Tessco Technologies Incorporated (TESS) has reported a 63.82 percent plunge in profit for the quarter ended Sep. 25, 2016. The company has earned $0.99 million, or $0.12 a share in the quarter, compared with $2.75 million, or $0.33 a share for the same period last year.
Revenue during the quarter dropped 5.42 percent to $134.63 million from $142.35 million in the previous year period. Gross margin for the quarter contracted 8 basis points over the previous year period to 21.36 percent. Total expenses were 98.48 percent of quarterly revenues, up from 96.74 percent for the same period last year. That has resulted in a contraction of 174 basis points in operating margin to 1.52 percent.
Operating income for the quarter was $2.05 million, compared with $4.65 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $3.22 million compared with $6.12 million in the prior year period. At the same time, adjusted EBITDA margin contracted 191 basis points in the quarter to 2.39 percent from 4.30 percent in the last year period.
"Going forward, we are excited to be building on a solid foundation at TESSCO," said Murray Wright, President and Chief Executive Officer. "Many key investments in intellectual capital and technology have already been made. These investments should enable us to pursue our existing transformation strategy without significant outlays of additional capital. From an operational perspective, we are increasing our intensity and focus on execution, particularly in achieving top-line growth. Working from this foundation, we see opportunities to improve our productivity, agility, customer focus and speed. TESSCO is in a terrific position to capitalize on the growth of the wireless industry during the next several years, and I am excited to lead that process."
Working capital declines
Tessco Technologies Incorporated has witnessed a decline in the working capital over the last year. It stood at $79.39 million as at Sep. 25, 2016, down 9.52 percent or $8.36 million from $87.74 million on Sep. 27, 2015. Current ratio was at 1.99 as on Sep. 25, 2016, down from 2.25 on Sep. 27, 2015.
Cash conversion cycle (CCC) has decreased to 21 days for the quarter from 56 days for the last year period. Days sales outstanding went up to 45 days for the quarter compared with 41 days for the same period last year.
Days inventory outstanding has decreased to 31 days for the quarter compared with 62 days for the previous year period. At the same time, days payable outstanding went up to 56 days for the quarter from 47 for the same period last year.
Debt comes down significantly
Tessco Technologies Incorporated has recorded a decline in total debt over the last one year. It stood at $0.07 million as on Sep. 25, 2016, down 96.66 percent or $2.01 million from $2.08 million on Sep. 27, 2015. Total debt was 0.04 percent of total assets as on Sep. 25, 2016, compared with 1.08 percent on Sep. 27, 2015.
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