TRACK GROUP, INC. (TRCK) saw its loss widen to $2.61 million, or $0.25 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $2.13 million, or $0.21 a share. On the other hand, adjusted net income for the quarter stood at $0.41 million, or $0.04 a share compared with $0.34 million or $0.03 a share, a year ago.
Revenue during the quarter grew 21.43 percent to $7.67 million from $6.32 million in the previous year period. Gross margin for the quarter contracted 657 basis points over the previous year period to 54.98 percent. Operating margin for the quarter stood at negative 24.12 percent as compared to a negative 22.01 percent for the previous year period.
Operating loss for the quarter was $1.85 million, compared with an operating loss of $1.39 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $0.41 million compared with $0.34 million in the prior year period. At the same time, adjusted EBITDA margin contracted 4 basis points in the quarter to 5.29 percent from 5.33 percent in the last year period.
"I'm very pleased with the progress we've made on our restructuring commitments as part of the ongoing transformation process to accelerate future growth," said Guy Dubois, chairman and chief executive officer of Track Group. "Through the restructuring, Track Group will reduce expenses, streamline the organization, and reallocate resources to drive shareholder value and align more closely with customer needs going forward."
TRACK GROUP, INC. projects adjusted revenue to be in the range of $33 million to $35 million for financial year 2017.
Operating cash flow turns positive
TRACK GROUP, INC. has generated cash of $2.14 million from operating activities during the quarter as against cash outgo of $0.46 million in the last year period.
The company has spent $1.40 million cash to meet investing activities during the quarter as against cash outgo of $1.39 million in the last year period.
The company has spent $0.02 million cash to carry out financing activities during the quarter as against cash outgo of $0.59 million in the last year period.
Cash and cash equivalents stood at $2.49 million as on Dec. 31, 2016, up 0.54 percent or $0.01 million from $2.47 million on Dec. 31, 2015.
Working capital turns negative
Working capital of TRACK GROUP, INC. has turned negative to $2.43 million on Dec. 31, 2016 from positive $5.52 million on Dec. 31, 2015. Current ratio was at 0.80 as on Dec. 31, 2016, down from 1.92 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 14 days for the quarter from 31 days for the last year period. Days sales outstanding went down to 81 days for the quarter compared with 97 days for the same period last year.
Days inventory outstanding has decreased to 13 days for the quarter compared with 26 days for the previous year period. At the same time, days payable outstanding went down to 80 days for the quarter from 92 for the same period last year.
Debt moves up
TRACK GROUP, INC. has witnessed an increase in total debt over the last one year. It stood at $33.63 million as on Dec. 31, 2016, up 10.44 percent or $3.18 million from $30.45 million on Dec. 31, 2015. Total debt was 65.26 percent of total assets as on Dec. 31, 2016, compared with 58.15 percent on Dec. 31, 2015. Debt to equity ratio was at 5.89 as on Dec. 31, 2016, up from 2.41 as on Dec. 31, 2015.
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