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Moduslink Global Solutions Concludes Restatement Process

Financial Summary – Fourth Quarter Fiscal 2012

  • Net revenue of $177.1 million, compared to $198.7 million in the fourth quarter of fiscal 2011
  • Gross margin, as a percentage of revenue, of 4.3%, compared to 8.9% in the fourth quarter of fiscal 2011. Inventory write-downs negatively impacted gross margin by 400 basis points or 4.0% of revenue.
  • Operating loss of $23.4 million, compared to operating loss of $4.4 million in the fourth quarter of fiscal 2011
  • Non-GAAP operating loss of $17.5 million, compared to non-GAAP operating income of $1.5 million in the fourth quarter of fiscal 2011

“Revenue in the fourth fiscal quarter was primarily affected by lower unit volumes, including those from a significant client with programs related to notebook computers, and the previously disclosed discontinuation of certain client programs,” said Crane. “During fiscal 2012, our cash position was primarily impacted by operating losses, which include expenses related to restructuring, the restatement and other corporate actions, as well as significant working capital needs for two new client programs. We expect to reverse these trends by reducing operating expenses and working capital needs,” concluded Crane.

Consolidated Financial Results – Fourth Quarter Fiscal 2012

ModusLink reported net revenue of $177.1 million for the fourth quarter of fiscal 2012, a decrease of 10.9% compared to net revenue of $198.7 million reported in the fourth quarter of fiscal 2011. The decline was primarily due to lower unit volumes including those from a significant client with programs related to notebook computers as well as lower volumes from certain discontinued client programs.

Revenue generated from new programs for the fourth quarter of fiscal 2012 was $22.8 million, an increase of 47.5% compared to $15.4 million in the fourth quarter of fiscal 2011 (1). Driving the increase was a large new client supply chain program in Europe and a significant new client program for aftermarket services, both of which commenced in the third quarter of fiscal 2012.

Gross profit for the fourth quarter of fiscal 2012 was $7.6 million, or 4.3% of revenue, compared to $17.6 million, or 8.9% of revenue, in the fourth quarter of fiscal 2011. Negatively impacting gross margin was unfavorable revenue mix as well as a $3.4 million write-down of inventory in the Company’s Tech for Less operations, and $3.6 million inventory write-off related to a canceled client program. Combined, the inventory adjustments negatively impacted gross margin by 400 basis points or 4.0% of revenue.

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