ModusLink Global Solutions Q2 net revenue $117.6 million
The company reported net revenue of $117.6 million for the second quarter of fiscal year 2017, as compared to $120.0 million for the same period in the prior year.
The year-over-year decline of 2.0% is primarily related to decreases with select clients in the consumer electronics industry, offset by higher volumes and revenue associated with several new and existing clients.
On a geographic basis, net revenue in Europe increased by $6.3 million or 16.2%, which partially offset lower net revenue in the Americas and Asia, and in the company’s e-Business segment.
The company reported net revenue of $238.9 million for the six months ended January 31, 2017, as compared to $261.1 million for the same period last year.
Net revenue in Europe increased by $6.7 million or 8.0%, which offset declines in the Americas, Asia and in the e-Business segment. This was primarily due to two clients in the consumer electronics industry which adversely impacted net revenues due to lower volumes.
Furthermore, as the company has focused on generating new programs with existing clients and adding new logos throughout its global footprint, the rate of the revenue decline on a consolidated basis has lessened when comparing against the year-over-year declines in the first quarter of fiscal year 2017.
Gross margin for the period ended January 31, 2017 was 9.5%, as compared to 3.0% for the same period in the prior year, an improvement of 650 basis points.
The improvement in gross margin was driven primarily by enhancements in the company’s supply chain operations, as well as lower labor costs in Asia and the Americas, which are a direct result of various turnaround initiatives.
For the six months ended January 31, 2017, gross margin was 8.6% as compared to 6.2% for the six months ended January 31, 2016, an improvement of 240 basis points.
This was driven primarily by a reduction in labor costs, improved client mix and process enhancements, partially offset by lower revenues.
Gross margin for the comparable fiscal year 2017 and 2016 six-month periods also improved in each of the company’s reportable operating segments – Americas, Asia, Europe, and e-Business.
Total operating expenses for the second quarter of fiscal year 2017 were $12.7 million, as compared to $15.3 million in the same period in the prior year, a reduction of $2.6 million or 17.1%.
Selling, general and administrative (SG&A) expenses for the second quarter of fiscal year 2017 were $11.9 million, a reduction of $2.8 million or 19.3%, as compared to the comparable prior year period.
Driving the reduction in SG&A were lower employee related costs associated with the company’s ongoing turnaround initiatives, as well as lower professional fees.
SG&A expenses also declined for all reportable business segments when comparing the fiscal year 2017 and fiscal year 2016 second quarters. ■
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