Revenue during the quarter grew 5.25 percent to $127.12 million from $120.78 million in the previous year period. Gross margin for the quarter contracted 44 basis points over the previous year period to 44.04 percent. Total expenses were 88.54 percent of quarterly revenues, down from 88.59 percent for the same period last year. This has led to an improvement of 5 basis points in operating margin to 11.46 percent.

Operating income for the quarter was $14.56 million, compared with $13.78 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $35.11 million compared with $33.86 million in the prior year period. At the same time, adjusted EBITDA margin contracted 41 basis points in the quarter to 27.62 percent from 28.04 percent in the last year period.

“Consistent with expectations we outlined on our Q2 earnings call, the third quarter reflects growth, both sequentially and year-over-year, across all of the business segments including Radiology, Oncology and Interventional. Sales, business development and operational improvements our teams have made, enhance the value proposition we provide to our customers leading to an improved competitive position and resulting strong performance in retaining existing customers and securing new customers,” stated Tom Tomlinson, Chief Executive Officer and President of Alliance HealthCare Services. “Our Radiology business delivered another consecutive quarter of strong same-store growth for MRI and PET/CT as well as improved performance in customer retention and contract wins. This marks the tenth consecutive quarter of same-store volume growth for MRI and seventh consecutive quarter of growth for PET/CT. Alliance Oncology didn’t complete any new projects in the quarter, but we expect to be in a position to announce another significant joint venture before the end of the year.”

Alliance Healthcare Services projects revenue to be in the range of $505 million to $535 million for financial year 2016.

The company has spent $66.10 million cash to meet investing activities during the nine month period as against cash outgo of $74.20 million in the last year period. It has incurred net capital expenditure of $51.31 million on net basis during the nine month period, up 33.23 percent or $12.80 million from year ago period.

The company has spent $34.46 million cash to carry out financing activities during the nine month period as against cash inflow of $21.32 million in the last year period.

Cash and cash equivalents stood at $19.61 million as on Sep. 30, 2016, down 56.28 percent or $25.24 million from $44.85 million on Sep. 30, 2015.

Working capital drops significantly
Alliance HealthCare Services, Inc has witnessed a decline in the working capital over the last year. It stood at $4.15 million as at Sep. 30, 2016, down 91.93 percent or $47.26 million from $51.41 million on Sep. 30, 2015. Current ratio was at 1.04 as on Sep. 30, 2016, down from 1.54 on Sep. 30, 2015.

Days sales outstanding were almost stable at 51 days for the quarter, when compared with the last year period.

At the same time, days payable outstanding went up to 29 days for the quarter from 21 for the same period last year.