VASCO Data Security International, Inc. (VDSI) has reported a 95.73 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $0.48 million, or $0.01 a share in the quarter, compared with $11.18 million, or $0.28 a share for the same period last year. On the other hand, adjusted net income from continuing operations for the quarter stood at $3.51 million, or $0.09 a share compared with $13.30 million or $0.34 a share, a year ago.
Revenue during the quarter dropped 27.29 percent to $43.65 million from $60.03 million in the previous year period. Gross margin for the quarter expanded 1312 basis points over the previous year period to 73.55 percent. Total expenses were 97.91 percent of quarterly revenues, up from 77.59 percent for the same period last year. That has resulted in a contraction of 2033 basis points in operating margin to 2.09 percent.
Operating income for the quarter was $0.91 million, compared with $13.46 million in the previous year period.
"Our third quarter results were primarily impacted by the extension of sales cycles as some of our large, European banking customers made adjustments in their ordering patterns in response to economic pressures and the need for digital transformation." said T. Kendall Hunt, VASCO chairman & chief executive officer. "We are pleased to make additional gains in our gross margins as we continue to derive more of our revenue from software. We remain optimistic about market demand for our solutions, including our hardware products, DIGIPASS for Apps mobile security suite, and eSignLive electronic signature solutions. We remain confident in our long term strategy and in the strength of our future growth opportunities as all types of businesses in every region expand their use of online and mobile channels to conduct business."
Working capital drops significantly
VASCO Data Security International, Inc. has witnessed a decline in the working capital over the last year. It stood at $136.91 million as at Sep. 30, 2016, down 33.15 percent or $67.88 million from $204.80 million on Sep. 30, 2015. Current ratio was at 3.36 as on Sep. 30, 2016, down from 5.88 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 94 days for the quarter from 140 days for the last year period. Days sales outstanding went up to 71 days for the quarter compared with 59 days for the same period last year.
Days inventory outstanding has decreased to 73 days for the quarter compared with 101 days for the previous year period. At the same time, days payable outstanding went up to 51 days for the quarter from 20 for the same period last year.
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