Insight Enterprises Inc. reported a 9% increase in third-quarter net sales to $798.4 million. But that improvement was overshadowed by an 88% hike in the firm’s net earnings to $19.9 million, compared with the same period last year.
That figure was calculated using the GAAP accounting standards prevailing in the United States. The earnings total drops to $14.6 million, representing a 38% increase, when non-GAAP standards are used. However, the firm was also pleased with that number.
“The third quarter was an exciting quarter as we continued to focus our efforts on growing net sales, maximizing gross margin and controlling expenses,” said Timothy A. Crown, CEO of the Tempe, AZ-based computer and peripherals direct marketer, in a statement.
Insight North America generated $664 million in revenue, a 9% increase over the prior year. GAAP earnings rose by 36% to $14 million., and non-GAAP earnings by 54% to $16 million.
“We posted increases in net sales from each of our customer divisions although sales growth continues to be stronger to our large corporate customers than our small-to-medium-size business customers,” said Crown of the North American results.
CFO Stanley Laybourne said in a statement that a slight increase in gross profit as a percentage of net sales was mostly due to “an increase in supplier reimbursements, a reduction in the reserve for vendor receivables and an increase in fright margin. These increases were partially offset by decreases in product margin due primarily to increased pricing pressures and the increase in the percentage of sales to large corporate and public sector customers, which are generally at lower product margins.”
The North American unit paid $2 million in severance and restructuring during the quarter, which ended on Sept. 30. That included Insight North America’s share of the $1.6 million in retirement money awarded to P. Robert Moya, executive vice president.
Insight UK hit the $115 million mark, a 20% hike. GAAP earnings reached $2.3 million, a 90% improvement. The British division paid $337,000 in severance and restructuring costs.
The only unit to post flat sales was Insight’s Direct Alliance Corp. !quarterly revenue totaled $19.1 million, slightly less than last year. The unit’s share of the severance and restructuring costs was $83,000.
The company completed an initial public offering of 13.9 million shares of PlusNet stock on the London stock exchange, resulting in net proceeds of $17.4 million.
