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Bell Microproducts Q4 sales and profits rebound

Microscope contributor

The light at the end of the tunnel is shining more brightly for Bell Microproducts after it turned in a vastly improved set of Q4 financials.

Things had looked a little bleak for the enterprise distributor which faced an expensive accountancy investigation that cost it a place on NASDAQ, while enduring the toughest economic recession in decades.

However a 9% rise in calendar Q4 sales to $837m and profits of $12.9m compared a loss of $33.5m a year earlier represented the second consecutive quarter of growth for Bell.

"It seems like it's been an eternity but only one year ago the economy and the IT industry were in a downward spiral that had not yet bottomed out," said Don Bell, CEO at the distributor.

"Since that time not only has the market recovered but Bell Micro has put our restatement issues behind us, we are in a much better place going forward," he said.

The operation in Europe filed sales of $351.7m, up 14% year-on-year while in North and Latin America turnover rose 1% and 19% respectively to $354m and $130.8m.

The Components and Peripherals division, which accounts for 46% of group sales ramped 27% year-on-year due to stabilised pricing and a higher margin product mix.

Conversely the Solutions unit declined 3% on Q4 2008 but climbed 5% sequentially.

The balance sheet was also starting to look comparatively more robust; working capital grew 30% to $152m and total debt fell 8% to $350m.

Despite the turnaround in fortunes by the end of 2009, there was no masking the impact the recession had on full year financials; sales dropped 16% to $3bn and profits were $7.5m compared to a loss of $82.5bn.

CEO Bell said 2010 had started promisingly as its stock had been re-listed on NASDAQ and the SEC investigation was behind it with "no enforcement action being recommended."

No doubt vendor partners will take comfort in Bell's turnaround, but with the resolution of internal issues that usurped management's time, it can again focus on recruiting suppliers and winning reseller customers.


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