Bell posts 'modest' third quarter results

Turnover increases four per cent in Q3

Distributor Bell Microproducts posted a modest four per cent year on year rise in turnover for the third quarter of 2006, from $759m last year to $792m in 2006.

Net profit based on Generally Accepted Accounting Principles stood at $2.5m, compared to $2.3m in Q3 2005.

Europe accounted for 43 per cent of the firm's global turnover, with North America taking a 41 per cent slice and Latin America worth 16 per cent.

Donald Bell, president of Bell Microproducts, said: "We achieved a new third quarter revenue record this year, and at the same time we made progress in improving profitability. We had strong sales performance in our enterprise business units and in the industrial sales channel. Additionally, we generated strong gross margins in these units, along with improved gross margins in all of our major product categories. As a result, we achieved a gross margin of 8.3 per cent in the quarter, up significantly from the 7.6 per cent in last year's third quarter and the highest level in the past 18 quarters."

"Furthermore, with higher gross margins and control over expenses, our pro forma operating margin for the third quarter of 2006 increased to 1.5 per cent from 1.3 per cent in the same quarter last year, which excludes the impact of non-cash stock-based compensation expense. Our North American and European operations generated improved operating margins as compared to the third quarter of 2005, with the most significant improvement coming from our European operations. Our higher margin enterprise business units, Rorke Data, Total Tec Systems, and OpenPSL combined generated double digit sales growth and improved profitability, driven by strength in capital goods spending and IT infrastructure projects," added Bell.