Ignite Restaurant Group Inc (IRG) saw its loss widen to $15.16 million, or $0.59 a share for the quarter ended Sep. 26, 2016. In the previous year period, the company reported a loss of $3.90 million, or $0.15 a share. On the other hand, adjusted net income for the quarter stood at $0.83 million, or $0.03 a share compared with $1.88 million or $0.07 a share, a year ago.
Revenue during the quarter dropped 10.06 percent to $119.94 million from $133.36 million in the previous year period. Gross margin for the quarter contracted 227 basis points over the previous year period to 66.86 percent. Operating margin for the quarter stood at negative 9.89 percent as compared to a positive 0.39 percent for the previous year period.
Operating loss for the quarter was $11.86 million, compared with an operating income of $0.51 million in the previous year period.
Robert S. Merritt, chief executive officer of Ignite Restaurant Group, stated, “We experienced downward pressure on our comparable restaurant sales during the current quarter, most significantly in the Texas market, which was a reflection of an overall challenging environment for casual dining. Consumers have continued to be prudent with discretionary spending and remain extremely value conscious. We remain sensitive to this consumer sentiment and are currently testing some menu items that we believe increase the overall value perception of our guest. We were successful in improving certain areas of our operating margin during the quarter, but the negative impacts from commodity price inflation prevented us from seeing an overall improvement from last year. We also continued our focus on improving our balance sheet as we used excess cash flow to pay down almost $7 million of additional debt since last quarter.”
Working capital turns negative
Working capital of Ignite Restaurant Group Inc has turned negative to $112.58 million on Sep. 26, 2016 from positive $21.96 million on Sep. 28, 2015. Current ratio was at 0.01 as on Sep. 26, 2016, down from 1.49 on Sep. 28, 2015.
Days sales outstanding were almost stable at 3 days for the quarter, when compared with the last year period.
Debt comes down significantly
Ignite Restaurant Group Inc has recorded a decline in total debt over the last one year. It stood at $113.31 million as on Sep. 26, 2016, down 29.98 percent or $48.52 million from $161.83 million on Sep. 28, 2015. Total debt was 71.14 percent of total assets as on Sep. 26, 2016, compared with 63.17 percent on Sep. 28, 2015.
Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
