Sequential Brands Group, Inc. (SQBG) has reported a 52.35 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $1.30 million, or $0.02 a share in the quarter, compared with $2.73 million, or $0.06 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $7.48 million, or $0.12 a share compared with $4.99 million or $0.12 a share, a year ago.

Revenue during the quarter surged 82.55 percent to $41.95 million from $22.98 million in the previous year period. Total expenses were 48.10 percent of quarterly revenues, up from 43.34 percent for the same period last year. That has resulted in a contraction of 476 basis points in operating margin to 51.90 percent.

Operating income for the quarter was $21.77 million, compared with $13.02 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $24.92 million compared with $15.67 million in the prior year period. At the same time, adjusted EBITDA margin contracted 880 basis points in the quarter to 59.39 percent from 68.19 percent in the last year period.

Yehuda Shmidman, Sequential's chief executive officer, commented, "Our business activation team is executing and our portfolio brand health is solid, driven by strong contributions from our core brands Jessica Simpson, William Rast and Heelys, as well as from recently acquired brands including Joe's Jeans, Martha Stewart, Chef Emeril and Gaiam."

For fiscal year 2016, Sequential Brands Group, Inc. expects revenue to be in the range of $155 million to $160 million. The Company forecasts net income to be in the range of $7.70 million to $11 million.

For the year ending December 31, 2017, Sequential expects $175 million to $180 million in revenue, GAAP net income of $22.1 million to $25.4 million and $100 million to $105 million of Adjusted EBITDA. Additionally, the Company expects to end 2017 with approximately $600 million of net debt.

Operating cash flow improves significantly

Sequential Brands Group, Inc. has generated cash of $31.40 million from operating activities during the nine month period, up 117.84 percent or $16.98 million, when compared with the last year period.

The company has spent $151.07 million cash to meet investing activities during the nine month period as against cash outgo of $203.55 million in the last year period.

Cash flow from financing activities was $98.02 million for the nine month period, down 49.71 percent or $96.88 million, when compared with the last year period.

Cash and cash equivalents stood at stood at $19.91 million as at Sep. 30, 2016.