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ModusLink Global Solutions, Inc. (MLNK) announced its financial results on Tuesday for its fourth quarter and fiscal year ended July 31, 2009.
Net revenue in the fourth quarter was $225.2 million, a decrease of 18.5% from the fourth quarter of fiscal 2008. Net loss for the fourth quarter of 2009 was $4.1 million, or ($0.09) per share, compared to net loss of $24.7 million, or ($0.53) per share, for the same period in fiscal 2008.
Net revenue for fiscal 2009 was $1,009 million, compared to net revenue of $1,068 million in fiscal 2008. Net loss for fiscal 2009 was $193.5 million, or ($4.26) per share, compared to net income of $9.1 million, or $0.19 per share, for the prior year.
Joseph Lawler, Chairman, President and CEO of ModusLink, commented in a conference call, "We continued to see lower unit volumes in Q4 moving through the the supply chain that were driven by lower consumer demand. While this dynamic continues to have an impact on our overall revenues, we have responded to these change. The progress that we are making is reflected in our Q4 results."
He continued, "Gross margins improved 280 basis points over Q4 of 2008. SG&A expenses were reduced by 25%, and operating income improved significantly. Importantly, we generated $12.8 million in free cash flow from operations during the quarter, a $35 million improvement over last year."
Mr. Lawler noted, "We expect annualized savings of $40 million from our cost reduction initiatives."
He explained, "We continue to operate in a difficult economic environment. Because our revenues are closely tied with consumer spending, the economy continues to have an impact on our top line. Our clients are primarily large Fortune 500 companies, so we expect a recovery in our base business volumes when the economy eventually recovers."
Mr. Lawler added, "We are cautiously optimistic because our base business revenues are similar sequentially to Q3, so we are encouraged that our base business may be beginning to stabilize. We also mitigated the effects of lower unit volumes in Q4 by strong revenues from new engagements during the quarter. Our pipeline of new opportunities continues to be robust as we move into FY10."
Steven Crane, CFO of ModusLink , said, "We expect to continue to generate significant free cash flow from operations during FY10."
Mr. Lawler concluded, "More than 70% of our volumes come from Fortune 500 companies, so we have a strong customer base for the long term. It is important to note that 11 of the top 15 high tech supply chain companies are customers of ours. We have a strong value proposition, balance sheet and a highly-differentiated competitive position."
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