ZAGG Inc (ZAGG) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $4.14 million, or $ 0.15 a share in the quarter, against a net profit of $4.96 million, or $0.18 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $2.14 million, or $0.08 a share compared with $4.96 million or $0.18 a share, a year ago.
Revenue during the quarter surged 46.16 percent to $114.93 million from $78.63 million in the previous year period. Gross margin for the quarter contracted 1078 basis points over the previous year period to 25.98 percent. Operating margin for the quarter stood at negative 3.13 percent as compared to a positive 10.10 percent for the previous year period.
Operating loss for the quarter was $3.59 million, compared with an operating income of $7.94 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $3.77 million compared with $12.68 million in the prior year period. At the same time, adjusted EBITDA margin contracted 1285 basis points in the quarter to 3.28 percent from 16.13 percent in the last year period.
"Our 2016 results reflect solid growth of our ZAGG business unit offset by actions taken in the fourth quarter to position the mophie business for profitable growth beginning in 2017," commented Randy Hales, president and chief executive officer. "Our ZAGG business unit's performance was highlighted by record InvisibleShield sales which, along with enhanced operational efficiencies, helped drive increases in unit level gross margin and Adjusted EBITDA despite device constraints. 2016 was a transition year for mophie as we executed a number of initiatives to strengthen the business.
For financial year 2017, Zagg projects revenue to be in the range of $470 million to $500 million.
Working capital drops significantly
ZAGG Inc has witnessed a decline in the working capital over the last year. It stood at $13.64 million as at Dec. 31, 2016, down 83.50 percent or $69.04 million from $82.68 million on Dec. 31, 2015. Current ratio was at 1.07 as on Dec. 31, 2016, down from 2.69 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 28 days for the quarter from 46 days for the last year period. Days sales outstanding were almost stable at 35 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 39 days for the quarter compared with 42 days for the previous year period. At the same time, days payable outstanding went up to 46 days for the quarter from 31 for the same period last year.
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