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MODUSLINK GLOBAL SOLUTIONS, INC Reports Operating Results (10-K)

October 14, 2009 | About:

10qk

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MODUSLINK GLOBAL SOLUTIONS, INC (MLNK) filed Annual Report for the period ended 2009-07-31.

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 $330.83 million; its shares were traded at around $7.83 with and P/S ratio of 0.33.

Highlight of Business Operations:

A limited number of clients account for a significant percentage of the Companys consolidated net revenue. For the fiscal year ended July 31, 2009, ModusLinks 10 largest customers accounted for approximately 71% of consolidated net revenue. This compares to the Companys largest 10 customers accounting for approximately 69% of consolidated net revenues for the fiscal year ended July 31, 2008. Sales to three clients, Hewlett-Packard, Advanced Micro Devices and SanDisk Corporation, accounted for approximately 27%, 10%, and 11%, respectively, of the Companys consolidated net revenue for the fiscal year ended July 31, 2009 and approximately 24%, 11% and 10%, respectively, of the Companys consolidated net revenue for the fiscal year ended July 31, 2008. In general, ModusLink does not have any agreements which obligate any client to buy a minimum amount of services from ModusLink, or to designate ModusLink as its sole supplier of any particular services. The loss of a significant amount of business with any key client could have a material adverse effect on ModusLink. The Company believes that it will continue to derive the vast majority of its consolidated operating revenue from sales to a small number of clients. There can be no assurance that revenue from key clients will not decline in future periods.

In addition, the loss of any one or more of our key clients would cause our revenues to decline. For the year ended July 31, 2009, sales to one client, Hewlett-Packard, accounted for approximately 27% of our consolidated net revenue. During the year ended July 31, 2009, ten clients accounted for approximately 70.9% of our consolidated net revenue. We expect to continue to derive the vast majority of our operating revenue from sales to a small number of key clients. In general, we do not have any agreements which obligate any client to buy a minimum amount of services from us, or to designate us as its sole supplier of any particular services. The loss of business with any key clients, or a decision by any one of our key clients to significantly change or reduce the services we provide, could have a material adverse effect on our business. We cannot assure you that our revenue from key clients will not decline in future periods.

Read the The complete ReportMLNK is in the portfolios of Arnold Schneider of Schneider Capital Management.

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