US handset distributor Brightpoint saw revenues tumble 40 per cent to $723 million (£432m) in the quarter to June 30, compared with the same period last year, as sales fell away and the average selling price decreased.
Sequentially, revenue was up two per cent due to an increase in distribution revenue from Europe and Singapore, it said.
But Brightpoint has wiped almost $150 million off its net debt in the 12 months, down by more than 60 per cent on last year, and profitability (EBITDA) was up to $12.4 million for the second quarter of 2009, from $11.1 million a year ago.
Brightpoint continues its Europe action plan to centralise back-office functions on the continent. Six operations will run out of a ‘shared services centre’ by the end of the year; the rest will be migrated to it by the next Summer. It is also to create ‘centres of excellence’ logistics hubs to serve multiple close-knit European markets.
Brightpoint will look to exit certain under-performing markets in Europe, failing to hit a 15 per cent return on capital investment, in the second half of the year consequently; the UK will not be among the casualties. It is still to axe 20 positions from its global workforce, also, having stated it will reduce numbers by seven per cent (220) in February and having removied 200 roles in the year to date.
Brightpoint sold 19.2 million units in the quarter, compared with 19.7 million in the period a year ago and 18.7 million first quarter.
Income from continuing operations was $2.8 million, compared with $4.6 million in the 2008 quarter and a loss of $3.1 million last term. Adjusted income from continuing operations was $9.1 million, down from $11.6 million a year ago.
Brightpoint’s debt was $96.3 million at June 30, 2009, down from $138.3 million at the end of the first quarter and $243.8 million at the end of the year-ago quarter.
The business has $420.6 million cash at its disposal in capital and unused borrowing.
Gross margin was 8.5 per cent, up from 7.4 per cent in the quarter in 2008.
Brightpoint aims to reduce spending for the year by approximately $40-$45 million, from $12-$14 million in cost avoidance and $28-$31 million in spending reductions
Brightpoint chairman and chief executive Robert J. Laikin said: “I am pleased with our operational performance. Our emphasis on executing the operating plan is reflected in our quarter end results. We will continue to focus on investing in Europe and executing our Europe strategy which revolves around building ‘centres of excellence’ and creating a ‘shared services center.’
“Our business development pipeline remains strong on a global basis, and I am confident that with our strategy in Europe fully implemented, we will emerge as an even stronger company at the other end of this economic downturn.”