Broadline distributor Bell Microproducts has been forced to take "corrective actions" to prevent its Ideal/Europe subsidiaries losing more money.
Following the release of the firm's second-quarter 2003 results last week, Don Bell, its chief executive, revealed in a statement that all the firm's divisions had been profitable during Q2, with the exception of Ideal/Europe, which suffered "a significant loss".
However, Bell added that the firm is taking corrective actions, and he is optimistic that Ideal/Europe will return to profitability in Q4.
Bell's turnover for Q2 2003 was $502.6m, up one per cent compared with turnover of $497.7m in the same quarter the previous year. Net loss for the quarter stood at $2.4m.
Speaking exclusively to CRN, Bell said: "We have expanded Ideal Hardware and Bell Micro Europe rapidly over the past two years in a difficult market."
He claimed that Bell had increased Ideal's funding, adding more than $30m to its finances in the past two months.
Ideal's lucrative licensing division has been the subject of sale speculation recently, but this has been ruled out in the short term.
Bell confirmed this by adding: "We will offer up to $35m in new securities to the market soon to grow business in our strategic initiatives, of which Ideal and our enterprise solutions initiatives are key. We are totally committed to them."
A source close to the company said the results reflected the level of competition in the crowded UK market.
"However, it will be interesting to watch what happens to Ideal in the future, especially when all of the other divisions were profitable. It is unusual for a chief executive to admit to a significant loss," the source said.
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