Merisel Sees Bottom-Line Benefits From Licensing-Only Focus
Merisel executives said the company's strategy of 100 percent of revenue coming from software licensing is having a clear impact on the bottom line. Sales from software licensing were up 350 percent for the fourth quarter of 2001 over the year-ago quarter and up 28 percent from the third quarter.
With more than $55 million in cash and no debt, Merisel is looking for expansion opportunities and is signing on more partners, including Network Associates, Borland Software and antivirus vendor Panda Software.
"The results are encouraging. We've achieved rapid growth for our software licensing business, which continues to be successful, thanks to its unique value in the marketplace with its personalized service and exclusive dedication to licensing," said Merisel CEO Tim Jenson in a statement.
Merisel reported net income of $8.8 million, or $1.11 per share on sales of $14.5 million for the fiscal fourth quarter ended Dec. 31, vs. a net loss of $22 million, or $2.74 per share, on sales of $159.6 million for the year-earlier period.
For the fiscal year ended Dec. 31, Merisel reported net income of $11.5 million, or $1.44 per share, on sales of $336.1 million. Results were impacted by a $36.3 million gain from the sale of its MOCA operation to Arrow Electronics and a $28.1 million loss from the sale of its Canadian hardware distribution business to Synnex Information Technologies.
Solution providers were pleased that Synnex is joining Ingram Micro and Tech Data in the Canadian market. "It's good for Canada. We need three [large distribution partners, not two. It keeps everyone honest," said Rick Jordan, director of sales at solution provider EASI2000, Woodbridge, Ontario.
Merisel also discontinued its Optisel logistics outsourcing business earlier this year. Optisel offered manufacturers and retailers a cafeteria-style pick, pack and ship solution that included Web development, call center, RMA services and technical support. Optisel also had interests in other markets including housewares, clothing, cosmetics and consumer electronics.
Although Optisel shipped more than $11.6 billion in orders in the past three years, Ingram Micro and Tech Data said they didn't view Optisel as a direct competitor, since Optisel had a different focus and strategy.