Spark Energy, Inc. (SPKE) has reported 86.07 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $0.18 million in the quarter, compared with $1.31 million for the same period last year.
Revenue during the quarter surged 73.22 percent to $158.09 million from $91.27 million in the previous year period. Gross margin for the quarter contracted 1089 basis points over the previous year period to 22.31 percent. Total expenses were 94.33 percent of quarterly revenues, up from 92.06 percent for the same period last year. That has resulted in a contraction of 228 basis points in operating margin to 5.67 percent.
Operating income for the quarter was $8.96 million, compared with $7.25 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $20.32 million compared with $5.60 million in the prior year period. At the same time, adjusted EBITDA margin improved 671 basis points in the quarter to 12.85 percent from 6.14 percent in the last year period.
"We are extremely pleased with our third quarter results," said Nathan Kroeker, Spark Energy's president and chief executive officer. "Not only did we close two significant acquisitions, but we accomplished record third quarter Adjusted EBITDA and Retail Gross Margin, and also lowered our attrition rate by approximately 24% year-over-year. In addition, we saw strong organic growth of approximately 10,000 RCEs across our legacy businesses."
Operating cash flow improves significantly
Spark Energy, Inc. has generated cash of $61.64 million from operating activities during the nine month period, up 55.37 percent or $21.97 million, when compared with the last year period.
The company has spent $34.18 million cash to meet investing activities during the nine month period as against cash outgo of $42.82 million in the last year period.
The company has spent $15.04 million cash to carry out financing activities during the nine month period as against cash inflow of $6.14 million in the last year period.
Cash and cash equivalents stood at $16.91 million as on Sep. 30, 2016, up 129.87 percent or $9.55 million from $7.36 million on Sep. 30, 2015.
Working capital turns negative
Working capital of Spark Energy, Inc. has turned negative to $1.02 million on Sep. 30, 2016 from positive $20.34 million on Sep. 30, 2015. Current ratio was at 0.99 as on Sep. 30, 2016, down from 1.26 on Sep. 30, 2015.
Cash conversion cycle (CCC) has increased to 14 days for the quarter from 11 days for the last year period. Days sales outstanding went down to 36 days for the quarter compared with 47 days for the same period last year.
Days inventory outstanding has decreased to 1 days for the quarter compared with 6 days for the previous year period. At the same time, days payable outstanding went down to 23 days for the quarter from 42 for the same period last year.
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