ModusLink Global Solutions Q1 2017 net revenue $121.3 million
Staff Writer |
ModusLink Global Solutions announced its financial results for its first quarter of fiscal year 2017 ended October 31, 2016.
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The company reported net revenue of $121.3 million for the first quarter of fiscal year 2017 as compared to $141.1 million for the same period in the prior year.
The year-over-year decline in net revenue is primarily related to lower revenues from two clients in the consumer electronics industry. When comparing the first quarter of fiscal year 2017 with the fourth quarter of fiscal year 2016, net revenue increased by $19.8 million or 19.5%.
Gross margin for the period ended October 31, 2016 was 7.7% as compared to 8.8% for the same period in the prior year, a decrease of 110 basis points.
The overall decline in gross margin was primarily related to lower volumes from two clients in the consumer electronics market and revenue mix.
On a sequential basis, when comparing the company’s first quarter of fiscal year 2017 and the fourth quarter of fiscal year 2016, gross margins increased by 130 basis points, reflecting higher volumes, as well as a lower overall cost structure.
Total operating expenses for the first quarter of fiscal year 2017 were $15.0 million, as compared to $14.0 million in the same period in the prior year. Selling, general and administrative (SG&A) expenses increased by approximately $0.6 million.
Included in SG&A in the prior year period was a gain related to the sale of a building in Europe of $1.2 million, without which the SG&A expenses would have decreased by $0.6 million. This decrease was primarily due to ongoing restructuring efforts and lower costs associated with outsourced services, consulting and professional fees
Restructuring expenses for the first quarter of fiscal year 2017 were $1.4 million as compared to $1.0 million reported in the fiscal 2016 first quarter. When compared sequentially to the fourth quarter of fiscal 2016, total operating expenses declined by $6.3 million or 29.8%.
The decline in total operating expenses compared to the fiscal 2016 fourth quarter is a direct result of lower restructuring-related expenses as well as the company’s process improvement and turnaround plan. This has resulted in lower employee-related expenses and significantly reduced SG&A expenses for the comparable periods.
The company reported an operating loss of $5.6 million for the first quarter of fiscal year 2017, as compared to an operating loss of $1.6 million for the same period in the prior year. The company reported an operating loss improvement of $9.2 million when compared sequentially to the fourth quarter of fiscal year 2016.
The company reported a net loss of $8.5 million or a net loss per basic and diluted share of $0.16 for the first quarter of fiscal year 2017.
This compares to a net loss of $14.8 million or a loss per basic and diluted share of $0.29 for the same period in the prior year. The company reported a net loss improvement of $11.2 million when compared sequentially to the fourth quarter of fiscal year 2016.
The sequential improvement in operating and net loss was primarily driven by higher revenues, improved gross margin and lower overall operating expenses.
The company reported negative Adjusted EBITDA of $(1.6) million for the first quarter of fiscal year 2017, as compared to Adjusted EBITDA of $1.9 million in the same period in the prior year.
On a sequential basis, when comparing against the company’s fourth quarter of fiscal year 2016, Adjusted EBITDA improved by $4.3 million, reflecting initial results from the company’s turnaround initiatives. ■