Merisel is unlikely to return to profit by the end of this year, as it had previously forecast.
After reporting a $117.1 million net loss in its third quarter, the company said it still planned to be back in the black within six months - in other words, by the end of its first 1997 quarter, which ends on 31 March 1997.
Much of the loss came as a result of Merisel's ongoing reorganisation, including charges for selling its European and Latin American operations, although many analysts believe turnaround will be given a real boost if the company can sell its Computerland subsidiary. Although Merisel would only say that it is "exploring all the options" for Computerland, there are widespread reports that it is already talking to potential buyers.
The third quarter loss compared with a loss of $253,000 last year, and sales fell 10 per cent to $1.39 billion, partly because of the sale of the international subsidiaries to CHS Electronics, which also incurred a $33.5 million charge. Other significant charges came from customer disputes, which cost $13.4 million, $2.8 million in severance payments, and $40 million in adjustment to asset impairment valuation at Computerland and Datago.
"Merisel's 1996 business plan assumed that the company would not return to profitability until the fourth quarter. As the company's focus changes from conserving cash to managing for profitable growth, management continues to expect that Merisel will return to profitability, if not by year's end, within the next six months," said Merisel's statement.
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