Exar Corporation (EXAR) swung to a net profit for the quarter ended Oct. 02, 2016. The company has made a net profit of $1.01 million, or $ 0.02 a share in the quarter, against a net loss of $4.20 million, or $0.08 a share in the last year period. On an adjusted basis, net profit for the quarter was $6.60 million, when compared with $0.27 million in the last year period.
Revenue during the quarter grew 21.30 percent to $27.60 million from $22.76 million in the previous year period. Gross margin for the quarter expanded 1021 basis points over the previous year period to 47.80 percent. Operating margin for the quarter period stood at positive 0.29 percent as compared to a negative 23.87 percent for the previous year period.
Operating income for the quarter was $0.08 million, compared with an operating loss of $5.43 million in the previous year period.
However, the adjusted operating profit for the quarter stood at $3.73 million compared to operating loss of $3.14 million in prior year period.
Ryan Benton, Exar's Chief Executive Officer, commented, "Exar again delivered solid financial results, with second quarter revenue, Non-GAAP gross margin and EPS from continuing operations all within our guidance range. Revenue increased 2% sequentially, despite going from 14 weeks in the first quarter to the usual 13 weeks in the second quarter. Revenue per week was up 10% sequentially. We had strong execution from Exar’s core business, as non-GAAP EPS from continuing operations came in at $0.08 for the second quarter in a row, despite the one less work week."
For the third-quarter, Exar Corp expects revenue to be $27.10 million. The company projects revenue to be in the range of $26.60 million to $27.60 million. On an adjusted basis, the company forecasts diluted earnings per share to be in the range of $0.06 to $0.08.
Working capital increases sharply
Exar Corp has recorded an increase in the working capital over the last year. It stood at $194.66 million as at Oct. 02, 2016, up 148.80 percent or $116.42 million from $78.24 million on Sep. 27, 2015. Current ratio was at 6.47 as on Oct. 02, 2016, up from 2.85 on Sep. 27, 2015.
Cash conversion cycle (CCC) has decreased to 73 days for the quarter from 221 days for the last year period. Days sales outstanding went down to 74 days for the quarter compared with 116 days for the same period last year.
Days inventory outstanding has decreased to 73 days for the quarter compared with 211 days for the previous year period. At the same time, days payable outstanding went down to 75 days for the quarter from 106 for the same period last year.
Debt comes down significantly
Exar Corp has recorded a decline in total debt over the last one year. It stood at $0.43 million as on Oct. 02, 2016, down 89.78 percent or $3.76 million from $4.19 million on Sep. 27, 2015. Exar Corp has recorded a decline in long-term debt over the last one year. It stood at $0.43 million as on Oct. 02, 2016, down 89.78 percent or $3.76 million from $4.19 million on Sep. 27, 2015. Total debt was 0.15 percent of total assets as on Oct. 02, 2016, compared with 1.56 percent on Sep. 27, 2015.
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