Bell Microproducts has taken a few more small steps on the road to recovery after returning to profit in the third quarter and re-applying to get back on the Nasdaq.
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The distributor this year came through an intensive investigation into accounting errors which cost it nearly $70m in professional fees as well as its listing on Nasdaq, and only recently became current with SEC filings.
Sales for the three months ended 30 September were $765.2m, up 9% sequentially - the first time since the economic downturn - but down 13% year-on-year. Profits were $1.7m compared to a loss of $3m last quarter and $28m twelve months ago.
"The company is executing well in a challenging market," said Don Bell, CEO of the distributor, in a conference call with analysts last night.
He confirmed getting back of the US tech exchange was "a priority for the management team" and while it had got through the first round review with the regulators, the share price needs to hit $4, up from its current price of $2.85.
"We are hopeful Nasdaq will approve our re-listing application once we satisfy the $4 bid price," said Bell.
If the company is not re-listed in the short term it will "evaluate" the situation and seek an alternative, with the New York Stock Exchange holding a minimum bid requirement of $2.
Sales in North America in Q3 fell 7% year-on-year but went up 19% sequentially to $342m (45% of total revenues), driven by storage component and system distribution and by its system integration unit.
The picture is Europe was somewhat different with sales rising sequentially more modestly by 2% to $300m (39% of total revenues), down 13% on last year.
Graeme Watt, president of global distribution, said Europe had been "a little bit more challenged than we'd anticipated" as enterprise customer "pushed out" projects until Q4.
"What we are seeing on the enterprise side is plenty of demand and a good pipeline," he said.
However he warned the UK, which is up to 55% of revenues in the region, is "recovering slower than some of the other major markets in Europe."
The global Components and Peripherals category increased 7% sequentially and accounted for 43% of sales with the remainder made up by Enterprise Solutions, which grew 10% on last quarter.
Total operating expenses fell 34% on last year to $62m and professional fees for audit, legal, tax and outside accounting advisory services declined 72% on the prior quarter to $3m.
Working capital increased 15% from the 31 December 2008 to $134m, also in that time the firm paid $29m off its debts and owes $354m.
The distributor is forecasting sequential revenue growth in Q4 of 4% to 7% as the market upturn gradually continues
Bell has made progress in this last quarter but it is worth noting that for full three quarters of 2009, sales are $2.2bn, down from $2.8bn in the same period a year earlier while losses stand at $5.4m.