TEMPE, Ariz. — Insight Enterprises Inc. might have had a healthy first quarter of the year, chalking up preliminary net earnings of $17.3 million (all figures in U.S. dollars), a 21 per cent increase over the same period a year ago.
The company said early figures showed its nets sales increased 53 per cent to $1.12 billion and gross profit grew 58 per cent to $153.2 million for the period ending March 31.
But the figures are preliminary because of an ongoing stock option review and there may need to be adjustments, the company said in a news release. It also said there will “likely” be a restatement of its retained earnings balance, so only the statement of earnings and selected cash flow and debt information for this quarter were being released.
In March it was warned by Nasdaq officials that it was in non-compliance with the stock exchange for not filing its 2006 annual report on time because of the stock options review.
Insight is one of the world’s largest online hardware, software and solutions seller, with divisions around the world, including Canada.
Its North America’s net sales for the quarter increased 27 per cent to $777.2 million, compared to net sales of $612.9 million for the same three months in 2006, due primarily to the acquisition of Software Spectrum in September.
“Our North America segment achieved record first quarter net sales, though the highlight of the quarter was the very strong gross profit performance, with growth of 41 per cent over prior year,” said president and CEO Rich Fennessy. “We also grew our services business net sales by 72 per cent in the quarter compared to the first quarter of 2006.”
For the quarter North American gross profit was $111.9 million, compared to $79.5 million for the three months ended March 31, 2006. North America’s gross profit as a percentage of net sales was 14.4 per cent, compared to 13.0 per cent for the same period a year ago.
“The increase in gross profit as a percentage of net sales from the first quarter of 2006 was due primarily to increases in agency fees for Microsoft enterprise software agreement renewals, increases in the sales of services and decreases in inventory write-downs due to improvements in the aging of inventories, said chief financial officer Stanley Laybourne. “These increases were offset partially by decreases in product margins, which includes vendor funding, and decreases in freight margins.”
