MiMedx Group, Inc. (MDXG) has reported a 49.31 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $3.32 million, or $0.03 a share in the quarter, compared with $6.55 million, or $0.06 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $6.21 million, or $0.06 a share compared with $6.56 million or $0.06 a share, a year ago.

Revenue during the quarter surged 31.45 percent to $64.43 million from $49.02 million in the previous year period. Gross margin for the quarter contracted 225 basis points over the previous year period to 87.59 percent. Total expenses were 92.70 percent of quarterly revenues, up from 86.30 percent for the same period last year. That has resulted in a contraction of 640 basis points in operating margin to 7.30 percent.

Operating income for the quarter was $4.70 million, compared with $6.71 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $11.36 million compared with $11.80 million in the prior year period. At the same time, adjusted EBITDA margin contracted 644 basis points in the quarter to 17.63 percent from 24.07 percent in the last year period.

Parker H. “Pete” Petit, chairman and chief executive officer stated, "We are very pleased with our third quarter results on both the top as well as bottom line. It is always gratifying to exceed our revenue guidance, and continue to add to our record of 20 consecutive quarters of sequential revenue growth. Equally as impressive is our record of meeting or exceeding our revenue guidance in 19 of the last 20 quarters. Our core advanced Wound Care revenue was the driver of our revenue performance, especially revenue from commercial accounts. Third quarter revenue is typically impacted by vacations of medical professionals, and we are pleased with our third quarter results in spite of that fact. We are very satisfied with the revenue trend we have seen in the last two quarters and are enthusiastic about the fourth quarter and beyond. With the trend we are experiencing, the robust growth we anticipate from AmnioFill™ and OrthoFlo Lyophilized, the two new product lines we launched during the third quarter, and the fact that many year-end patient deductibles are met during or before the fourth quarter, we are optimistic about our fourth quarter revenue."

For financial year 2016, MiMedx Group, Inc.  projects revenue to be in the range of $244.50 million to $248 million. The company forecasts diluted earnings per share to be in the range of $0.21 to $0.23 on adjusted basis.

For the fourth-quarter 2016, MiMedx Group, Inc. projects revenue to be in the range of $69.40 million to $72.90 million.

Operating cash flow drops significantly
MiMedx Group, Inc. has generated cash of $9.15 million from operating activities during the nine month period, down 36.70 percent or $5.30 million, when compared with the last year period.

The company has spent $10.45 million cash to meet investing activities during the nine month period as against cash outgo of $2.27 million in the last year period.

The company has spent $8.85 million cash to carry out financing activities during the nine month period as against cash outgo of $17.69 million in the last year period.

Cash and cash equivalents stood at $18.34 million as on Sep. 30, 2016, down 55.35 percent or $22.74 million from $41.07 million on Sep. 30, 2015.

Working capital declines
MiMedx Group, Inc.has witnessed a decline in the working capital over the last year. It stood at $64.71 million as at Sep. 30, 2016, down 17.45 percent or $13.68 million from $78.39 million on Sep. 30, 2015. Current ratio was at 2.56 as on Sep. 30, 2016, down from 4.22 on Sep. 30, 2015.

Cash conversion cycle (CCC) has increased to 82 days for the quarter from 50 days for the last year period. Days sales outstanding went down to 73 days for the quarter compared with 81 days for the same period last year.

Days inventory outstanding has increased to 105 days for the quarter compared with 88 days for the previous year period. At the same time, days payable outstanding went down to 96 days for the quarter from 119 for the same period last year.