Zones Inc., parent company of online Mac reseller MacZone, turned in its third quarter results for the three month period ending September 30. The company reported a net loss of US$257,000, or $0.02 per share.
The company reported a net loss of $137,000 for the same period a year ago, but the news isn’t all bad, depending on how you look at it — Zones Inc. said that it has improved its net loss for the nine month period ending September 30th to $62,000, compared to a $451,000 year to date net loss this time in 2000.
Total revenue for Zones Inc. was $120.7 million, a $49 million drop from year to year. Net revenue for the nine month period was $427.1 million, a $40 million drop from last year’s numbers.
Zones CEO and President Firoz Lalji blames the low numbers on continued soft spending in the information technology sector, compounded by the events of September 11. “We have appropriately sized our organization to current revenues and will continue to monitor and improve all facets of our operation. This will position Zones to efficiently scale operations as demand dictates,” said Lalji.
Zones reported a modest year-over-year increase in outbound sales of about 4.1 percent to 78 percent of total revenue. The company attributes the rise to increased activity in the small to medium sized business (SMB) and enterprise markets. Sales of desktops, notebooks and servers were about 39.1 percent of total net revenue for the quarter; hardware and software represented about 47.9 and 13.0 percent respectively. The company also saw modest gains in the percentage of server sales, licensing and networking equipment.
Gross margins rose slightly for the quarter — 10.1 percent, up .3 percent sequentially from the second quarter. Zones Inc. said this increase, which has risen .9 percent since the third quarter of 2000, is attributed to the sales of higher margin products.
Total operating costs decreased 18 percent year-over-year. Zones Inc. attributes this change to “substantially curtailing the hiring of new account executives” and focusing on improving efficiency.
Zones Inc. ended the quarter with $7.3 million in cash, $19.2 million in working capital, and EBITDA of $4.8 million, prompting Zones Senior Vice President and CFO Ronald McFadden to say that he’s extremely proud of the company’s continued accomplishments. “The tough economic conditions have prompted organizational changes that have increased efficiencies and prepared us to respond quickly to market fluctuations,” said McFadden.
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