Orbcomm (ORBC) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $14.04 million, or $ 0.20 a share in the quarter, against a net profit of $1.59 million, or $0.02 a share in the last year period. Revenue during the quarter went up marginally by 0.44 percent to $46.29 million from $46.08 million in the previous year period. Gross margin for the quarter expanded 278 basis points over the previous year period to 50.29 percent. Operating margin for the quarter stood at negative 26.04 percent as compared to a positive 6.93 percent for the previous year period.
Operating loss for the quarter was $12.05 million, compared with an operating income of $3.19 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $11.96 million compared with $11.03 million in the prior year period. At the same time, adjusted EBITDA margin improved 191 basis points in the quarter to 25.84 percent from 23.93 percent in the last year period.
"In the third quarter, we had mixed results. Service Revenues grew about 4% sequentially marking our largest organic increase to date, while Product Sales came in lower than anticipated due to logistical and timing issues," said Marc Eisenberg, ORBCOMMs chief executive officer. "We expect to catch-up over the next couple of quarters and add to multiple new projects to the mix."
Orbcomm forecasts revenue to be in the range of $188 million to $191 million for fiscal year 2016.
Operating cash flow improves significantly
Orbcomm has generated cash of $19.19 million from operating activities during the nine month period, up 71.54 percent or $8 million, when compared with the last year period. The company has spent $25.17 million cash to meet investing activities during the nine month period as against cash outgo of $42.18 million in the last year period.
The company has spent $0.34 million cash to carry out financing activities during the nine month period as against cash outgo of $1.78 million in the last year period.
Cash and cash equivalents stood at $21.27 million as on Sep. 30, 2016, down 63.63 percent or $37.22 million from $58.49 million on Sep. 30, 2015.
Working capital drops significantly
Orbcomm has witnessed a decline in the working capital over the last year. It stood at $36.73 million as at Sep. 30, 2016, down 55.06 percent or $44.99 million from $81.72 million on Sep. 30, 2015. Current ratio was at 1.81 as on Sep. 30, 2016, down from 3.24 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 67 days for the quarter from 94 days for the last year period. Days sales outstanding were almost stable at 64 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 43 days for the quarter compared with 65 days for the previous year period. At the same time, days payable outstanding went up to 41 days for the quarter from 35 for the same period last year.
Debt remains stable
Total debt remained stable at $150 million as on Sep. 30, 2016, when compared with the last year. Long-term debt remained stable at $150 million as on Sep. 30, 2016, when compared with the last year. Total debt was 29.53 percent of total assets as on Sep. 30, 2016, compared with 29.10 percent on Sep. 30, 2015. Debt to equity ratio was at 0.53 as on Sep. 30, 2016, up from 0.50 as on Sep. 30, 2015.
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