CHS Electronics has achieved a gross margin of 7.4 per cent in its second quarter results thanks to higher vendor rebates after the firm completed its share offering.
In its Q2 ended 30 June, CHS reported sales of $947 million and net profit of $6.4 million. This compares with turnover of $316.5 million and net profit of $1.7 million for the same period last year. CHS? traditional business ? prior to the purchase of Merisel in September 1996 ? showed that its turnover had jumped by 49 per cent.
According to Claudio Osorio, chairman and chief executive at CHS, the firm?s gross profit and operating profit were significantly higher in this second quarter than in the same period last year. He said: ?As CHS grows, it becomes eligible for increasingly attractive rebates, which have a positive impact on both gross margins and operating income.
?The results show that we are maintaining good margins in the midst of dramatic growth. They also show that, important as acquisitions are in the growth of CHS Electronics, they are far from being the whole story. Sales from continuing operations are increasing strongly.?
The Q2 results showed the distributor had $12.8 million cash-in-hand, and a long-term debt totalling $60.2 million.
Two weeks ago, CHS completed its public offering of 13 million shares of common stock at the price of $31.75 per share, raising $394 million.
The distributor had originally planned to issue 10 million shares, and the final price was 20 per cent higher than the maximum aggregate price per share proposed on 23 June.
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