Xcel Brands, Inc. (XELB) has reported a 293.33 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $0.12 million in the quarter, compared with $0.03 million for the same period last year. On the other hand, adjusted net income for the quarter stood at $1.28 million, or $0.07 a share compared with $1.42 million or $0.08 a share, a year ago.
Revenue during the quarter grew 13.56 percent to $8.33 million from $7.34 million in the previous year period. Gross margin for the quarter expanded 20 basis points over the previous year period to 99.51 percent. Total expenses were 89.97 percent of quarterly revenues, down from 92.82 percent for the same period last year. This has led to an improvement of 285 basis points in operating margin to 10.03 percent.
Operating income for the quarter was $0.84 million, compared with $0.53 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $2.34 million compared with $2.22 million in the prior year period. At the same time, adjusted EBITDA margin contracted 218 basis points in the quarter to 28.06 percent from 30.25 percent in the last year period.
"We are pleased to report double-digit top-line growth for the quarter and year-to-date," said Robert W. D'Loren, Xcel's chairman and chief executive officer. "Despite lower than expected growth in the interactive television channel during the quarter, we believe that the strength of our brands and our unique business model, including our design, marketing, and Quick Time Response (QTR) production platforms, will continue to drive growth despite a challenging retail environment. To that end, we are excited by the early results of our Quick Time Response design and production platform and our partnership with Hudson's Bay Company, and we expect to announce new retail partnerships in the QTR department store business for Spring 2017."
Operating cash flow improves significantly
Xcel Brands, Inc. has generated cash of $6.77 million from operating activities during the nine month period, up 386.63 percent or $5.38 million, when compared with the last year period.
The company has spent $2.34 million cash to meet investing activities during the nine month period as against cash outgo of $4.81 million in the last year period.
The company has spent $6.13 million cash to carry out financing activities during the nine month period as against cash inflow of $11.09 million in the last year period.
Cash and cash equivalents stood at $15.16 million as on Sep. 30, 2016, down 6.46 percent or $1.05 million from $16.20 million on Sep. 30, 2015.
Debt comes down
Xcel Brands, Inc. has recorded a decline in total debt over the last one year. It stood at $36.40 million as on Sep. 30, 2016, down 14.23 percent or $6.04 million from $42.43 million on Sep. 30, 2015. Total debt was 23.86 percent of total assets as on Sep. 30, 2016, compared with 27.84 percent on Sep. 30, 2015. Debt to equity ratio was at 0.35 as on Sep. 30, 2016, down from 0.43 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 2.46 for the quarter from 1.73 for the same period last year.
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