ZAGG Inc (ZAGG) saw its loss widen to $6.14 million, or $0.22 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $3.29 million, or $0.12 a share. On the other hand, adjusted net loss for the quarter widened to $3.31 million, or $0.12 a share from a loss of $0.82 million or $0.03 a share, a year ago.
Revenue during the quarter surged 48.88 percent to $92.95 million from $62.43 million in the previous year period. Gross margin for the quarter contracted 723 basis points over the previous year period to 30.78 percent. Operating margin for the quarter stood at negative 7.15 percent as compared to a negative 5.93 percent for the previous year period.
Operating loss for the quarter was $6.65 million, compared with an operating loss of $3.70 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $2.69 million compared with $5.07 million in the prior year period. At the same time, adjusted EBITDA margin contracted 523 basis points in the quarter to 2.89 percent from 8.12 percent in the last year period.
"Our first quarter performance represents a solid start to 2017. We exceeded our Adjusted EBITDA target driven by meaningful operating expense leverage on higher than planned revenue," commented Randy Hales, president and chief executive officer. "In addition to continued growth of our ZAGG business unit, the mophie turnaround is progressing as planned, highlighted by a new president, operational improvements, cost management disciplines, and a significant increase in market share during the first quarter."
For fiscal year 2017, Zagg forecasts revenue to be in the range of $470 million to $500 million.
Working capital turns negative
Working capital of ZAGG Inc has turned negative to $11.03 million on Mar. 31, 2017 from positive $46.74 million on Mar. 31, 2016. Current ratio was at 0.93 as on Mar. 31, 2017, down from 1.32 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 52 days for the quarter from 139 days for the last year period. Days sales outstanding went down to 59 days for the quarter compared with 90 days for the same period last year.
Days inventory outstanding has decreased to 53 days for the quarter compared with 152 days for the previous year period. At the same time, days payable outstanding went down to 60 days for the quarter from 104 for the same period last year.
Debt comes down
ZAGG Inc has recorded a decline in total debt over the last one year. It stood at $59.19 million as on Mar. 31, 2017, down 21.39 percent or $16.10 million from $75.29 million on Mar. 31, 2016. Total debt was 21.40 percent of total assets as on Mar. 31, 2017, compared with 25.29 percent on Mar. 31, 2016. Debt to equity ratio was at 0.54 as on Mar. 31, 2017, down from 0.58 as on Mar. 31, 2016.
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