ShoreTel (SHOR) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $2.92 million, or $ 0.04 a share in the quarter, against a net profit of $2.54 million, or $0.04 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $1.99 million, or $0.03 a share compared with $6.65 million or $0.10 a share, a year ago. Revenue during the quarter went down marginally by 2.65 percent to $88.03 million from $90.43 million in the previous year period. Gross margin for the quarter contracted 96 basis points over the previous year period to 63.05 percent. Operating margin for the quarter stood at negative 2.70 percent as compared to a positive 3.96 percent for the previous year period.
Operating loss for the quarter was $2.38 million, compared with an operating income of $3.58 million in the previous year period.
However, the adjusted operating income for the quarter stood at $2.45 million compared to $7.96 million in the prior year period. At the same time, adjusted operating margin contracted 602 basis points in the quarter to 2.78 percent from 8.80 percent in the last year period.
"Our second quarter financial results reflect the execution of our strategic plan. Hosted revenues continue to represent the largest percentage of total revenues and product revenues were sequentially up," said Don Joos, president and CEO of ShoreTel. "The cost actions taken earlier this fiscal year drove sequentially improved financial results and cash flow from operations. We remain focused on product innovation as we introduced a number of technology advancements including video collaboration for Connect CLOUD, the expansion of multi-tenanted Connect CLOUD in the UK and our new Teamwork application, a team collaboration tool which leverages the ShoreTel Summit technology stack. At the same time, the board's Strategic Advisory Committee continues to be actively engaged in the evaluation of our alternatives."
For the third-quarter, ShoreTel forecasts revenue to be in the range of $82 million to $87 million.
Working capital declines
ShoreTel has witnessed a decline in the working capital over the last year. It stood at $52.55 million as at Dec. 31, 2016, down 10.33 percent or $6.06 million from $58.61 million on Dec. 31, 2015. Current ratio was at 1.51 as on Dec. 31, 2016, down from 1.56 on Dec. 31, 2015. Cash conversion cycle (CCC) has decreased to 10 days for the quarter from 30 days for the last year period. Days sales outstanding were almost stable at 28 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 22 days for the quarter compared with 39 days for the previous year period. At the same time, days payable outstanding went up to 41 days for the quarter from 39 for the same period last year.
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