Endurance International Group Holdings, Inc. (EIGI) saw its loss widen to $31.74 million, or $0.24 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $15.35 million, or $0.12 a share. Revenue during the quarter surged 54.46 percent to $291.19 million from $188.52 million in the previous year period. Gross margin for the quarter expanded 744 basis points over the previous year period to 48.68 percent. Total expenses were 96.95 percent of quarterly revenues, up from 95.17 percent for the same period last year. That has resulted in a contraction of 178 basis points in operating margin to 3.05 percent.
Operating income for the quarter was $8.88 million, compared with $9.11 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $85.21 million compared with $53.84 million in the prior year period. At the same time, adjusted EBITDA margin improved 70 basis points in the quarter to 29.26 percent from 28.56 percent in the last year period.
"We are pleased by the strong financial performance of our business in the third quarter. We generated strong free cash flow, even as we continued the process of rebalancing our marketing spend across the portfolio and focusing on our strongest brands," commented Hari Ravichandran, chief executive officer and founder of Endurance International Group. "We continue to execute toward our long-term vision of providing a fully integrated suite of solutions for small businesses. Our near-term efforts across the business continue, and we remain focused on our previously set targets for fiscal 2016."
Operating cash flow declines
Endurance International Group Holdings, Inc. has generated cash of $101.80 million from operating activities during the nine month period, down 23.92 percent or $32.01 million, when compared with the last year period. The company has spent $925.07 million cash to meet investing activities during the nine month period as against cash outgo of $100.14 million in the last year period. It has incurred net capital expenditure of $29.10 million on net basis during the nine month period, up 26.38 percent or $6.07 million from year ago period.
Cash flow from financing activities was $851.54 million for the nine month period as against cash outgo of $30.69 million in the last year period.
Cash and cash equivalents stood at $63.15 million as on Sep. 30, 2016, up 84.85 percent or $28.99 million from $34.16 million on Sep. 30, 2015.
Working capital remains negative
Working capital of Endurance International Group Holdings, Inc. was negative $379.96 million on Sep. 30, 2016 compared with negative $344.93 million on Sep. 30, 2015. Current ratio was at 0.30 as on Sep. 30, 2016, up from 0.28 on Sep. 30, 2015.
Days sales outstanding went down to 3 days for the quarter compared with 5 days for the same period last year.
At the same time, days payable outstanding went down to 8 days for the quarter from 10 for the same period last year.
Debt increases substantially
Endurance International Group Holdings, Inc. has witnessed an increase in total debt over the last one year. It stood at $2,039.90 million as on Sep. 30, 2016, up 84.73 percent or $935.63 million from $1,104.27 million on Sep. 30, 2015. Total debt was 72.50 percent of total assets as on Sep. 30, 2016, compared with 61.27 percent on Sep. 30, 2015. Debt to equity ratio was at 13.57 as on Sep. 30, 2016, up from 6.20 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 0.22 for the quarter from 0.62 for the same period last year.
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