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EMEA restructuring costs hit Insight Q1 numbers

Insight saw its EMEA operations slip into the red as a result of restructuring costs that came in during Q1

Restructuring costs to the tune of $3.2m took the shine off the latest set of EMEA numbers reported by Insight and dragged the channel player into the red in that region.

The firm ended up racking up the costs as part of attempts to improve the efficiency of its EMEA operations and warned investors it will be dealing with the issues for a while to come.

Overall the numbers for the first quarter across EMEA showed that Insight delivered a 9% climb in sales to $330m but a loss with income dipping by $1.1m compared to a positive position of $2.7m in the same period last year.

Speaking to analysts  the Insight CEO Ken Lamneck acknowledged the blot on the balance sheet that had come from the restructuring costs but otherwise the firm had enjoyed a fairly decent performance in the region.

"The sales growth obviously is pretty 20% constant currency growth, so really solid there. A few big deals are brought down the gross margin related to some large software enterprise agreements and some hardware deals, lower than margin there for -- but certainly good growth on a top-line and obviously growth year-over-year on the earnings line as well," he said.

"But we looked and we said, hey, there is a couple of markets where there is some inefficiency. So we've taken that very specific action," he added.

The CFO Glynis Bryan said that when it took a charge in Europe it did not always see a recovery in the first year and it expected the benefit of the cost cutting to filter in about $2m a year with most of that starting to come through to the balance sheet in 2018.

For the firm as a whole sales were up 26% to $1.48bn for the three months ended 31 March. Gross profit was $208m for the first quarter, up 29% year-over-year.

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