Bell Micro makes a loss

Abnormally slow month

Bell Microproducts, storage distie in the Americas and Europe, has issued a profits warning, following an "abnormally slow" September.

The company, which trades in the UK as Ideal Hardware, said that sales for Q3, ended September 30, 2001, will be approx. $490m, while operating losses will be $3.3m. It is taking a one-off hit of $10m to cover redundancy payments, inventory write-offs and bad debt.

Q3 Sales are up 7 per cent sequentially on Q2's $456m, a victory of sorts in Bell Micro's eyes, considering the worsening slump in the technology markets. But ths slump means more competition and lower average selling prices (ASPs) and margins - gross margins were 8 per cent in Q3 v. 9 per cent in Q2.

Don Bell, Bell Micro president and CEO, notes that Q3 is "normally a back-end loaded quarter with
expectations of strong sales and profits in September. This year, September was an abnormally slow month".

The company also notes a changing sales mix with semiconductor product sales down (the company is an AMD distie) while disk drive sales are up. Bell reckons that its focus on storage-systems will give it an advantage when the economic recovery begins.

we believe that this segment of the IT market will lead the way as the economic downturn passes and
as capital budgets are restored," says Bell. "Further impetus should arise from an expected groundswell of disaster recovery requirements." ®

Bell Micro press release