MODUSLINK GLOBAL SOLUTIONS INC. is a leader in global supply chain business process management. They provide organizations in the high technology communications and medical industries with a broad and integrated portfolio of business process outsourcing and technology solutions delivered across four core competencies: Supply Chain e-Business Aftermarket and Entitlement Management. MODUSLINK GLOBAL SOLUTIONS, INC has a market cap of $190.1 million; its shares were traded at around $4.16 with and P/S ratio of 0.2.
Highlight of Business Operations:During the third fiscal quarter ended April 30, 2009, the Company continued to see a weakening in the business environment and global economy. Management believes that the declines in revenue compared with the third quarter of fiscal 2008 are in large part due to the ongoing global economic crisis. In the third quarter of fiscal 2009, ModusLink continued the restructuring efforts that it began in the first fiscal quarter of 2009 to better position the Company for the long-term, given the ongoing challenging economic environment. In October 2008 the management of the Company approved a plan and in December 2008 the Company announced that it was taking certain cost cutting actions as a result of the general economic decline. These actions included the elimination of approximately 500 jobs and may include the closing of certain facilities. For the three and nine months ended April 30, 2009, the Company recorded restructuring charges of $6.4 million and $13.5 million, respectively, for severance and facility closure related expenses. The Company expects to take additional restructuring actions in the remainder of fiscal year 2009 which may result in future restructuring charges in the range of approximately $3.6 million to $5.6 million.
For the three months ended April 30, 2009, the Company reported net revenue of $231.5 million, operating income of $2.7 million, income from continuing operations before income taxes of $1.3 million, a net loss of $1.9 million and a gross margin percentage of 14.0%. For the nine months ended April 30, 2009, the Company reported net revenue of $783.3 million, an operating loss of $168.6 million, loss from continuing operations before income taxes of $178.8 million, a net loss of $189.4 million and a gross margin percentage of 11.8%. Operating results for the nine months ended April 30, 2009 reflect the impact of a non-cash goodwill impairment charge of $164.7 million in the second fiscal quarter ended January 31, 2009. Net income for the three months ended April 30, 2009 reflect a non-cash impairment charge of $0.5 million recorded on a certain investment included in the @Ventures investment portfolio. Net income for the nine months ended April 30, 2009 reflect, in addition to the $164.7 million non-cash goodwill impairment charge, a non-cash impairment charge of $13.9 million recorded on certain investments included in the @Ventures investment portfolio. We currently conduct business in The Netherlands, Hungary, France, Ireland, Czech Republic, Singapore, Taiwan, China, Malaysia, Japan, Australia and Mexico in addition to our United States operations. At April 30, 2009, we had cash and cash equivalents, available-for-sale securities and short-term investments of $167.8 million, and working capital of $236.7 million.
During the three months ended April 30, 2009, net revenue in the Americas region increased by approximately $7.7 million. This increase resulted primarily from a $2.0 million increase in net revenue from OCS and the inclusion of approximately $12.8 million of net revenue from PTS. These increases in the Americas region were partially offset by a $7.6 million decrease due to declines in client order volumes of the base business and loss of client accounts. Within the Asia region, the net revenue increase of approximately $5.9 million resulted primarily from an increase in client order volumes. Within the Europe region, revenue decreased by approximately $21.3 million primarily due to the negative impact of foreign currency translation and declines in client order volumes and loss of business.
Read the The complete ReportMLNK is in the portfolios of Arnold Schneider of Schneider Capital Management.