Merisel tried to sweeten the pill of a $117.1 million Q3 loss with a statement of confidence that this quarter will see a turnround.
The third quarter saw Merisel taking $100 million in charges, which contributed significantly to the $117.1 million loss, a deficit almost five times greater than last year's $253,000.
The charges, which Merisel warned investors about two weeks ago, related largely to the sale of the company's European, Latin American and Mexican operations.
This sale also brought in $50 million in cash, which the firm has added to its reserves.
Third quarter sales fell seven per cent to $1.4 billion, mainly because this quarter last year saw the boost from the launch of Windows 95.
Chief executive Dwight Steffensen told analysts: 'I have a high degree of confidence that we can deliver something in the black this quarter.'
He repeated the statement he made two weeks ago that Merisel's priority in 1997 will be to regain profitable growth, cotrasting with this year's concentration on building a cash mountain.
Steffensen admitted Merisel lost market share while it focused heavily on internal reorganisation. He believes market share will continue to decline until it is clear to customers that Merisel is stable again. 'The customers will come back when we do,' he said.
The return to profit will be a gradual one. Steffensen said Merisel would make only small steps in the current fourth quarter and the early part of fiscal 1997. But he said if recent trends in volumes and margins continue or accelerate, profit should follow. Growth will be in single-digit steps for some time to come.
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