magicJack VocalTec Ltd. (CALL) swung to a net loss for the quarter ended Mar. 31, 2017. The company has made a net loss of $23.10 million, or $ 1.44 a share in the quarter, against a net profit of $0.73 million, or $0.05 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $3.38 million, or $0.21 a share compared with $5.36 million or $0.34 a share, a year ago. Revenue during the quarter went down marginally by 2.12 percent to $23.20 million from $23.70 million in the previous year period. Gross margin for the quarter contracted 610 basis points over the previous year period to 59.26 percent.
Operating loss for the quarter was $34.51 million, compared with an operating income of $4.23 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $4.18 million compared with $7.42 million in the prior year period. At the same time, adjusted EBITDA margin contracted 1333 basis points in the quarter to 18 percent from 31.33 percent in the last year period.
"During the first quarter, we took decisive action to advance our dual track strategy," said Don C. Bell, chief executive officer of magicJack VocalTec. "We recruited a new executive management team, launched a strategic alternatives process, added two new board members, concluded two proxy contests, cut costs and underperforming initiatives and renewed our strategic focus on our core market and expanding our addressable market with our mobile-first, web-first strategy. By taking the actions we did in this quarter, which resulted in some one-time costs, I believe we’ve cut off unproductive future expenditures. I continue to be very excited about our opportunity to leverage our brand, installed subscriber base, CLEC network and recent R&D investments."
Operating cash flow turns negative
magicJack VocalTec Ltd. has spent $3.81 million cash to meet operating activities during the quarter as against cash inflow of $6.93 million in the last year period. The company has spent $0.27 million cash to meet investing activities during the quarter as against cash outgo of $40.02 million in the last year period.
Cash and cash equivalents stood at $48.31 million as on Mar. 31, 2017, up 6.18 percent or $2.81 million from $45.50 million on Mar. 31, 2016.
Working capital turns positive
Working capital of magicJack VocalTec Ltd. has turned positive to $6 million on Mar. 31, 2017 from negative $1.97 million on Mar. 31, 2016. Current ratio was at 1.10 as on Mar. 31, 2017, up from 0.97 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 9 days for the quarter from 45 days for the last year period. Days sales outstanding were almost stable at 11 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 16 days for the quarter compared with 61 days for the previous year period. At the same time, days payable outstanding went down to 17 days for the quarter from 26 for the same period last year.
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