Insight Loses $78.1M In 4Q

Insight lost $78.1 million, or $1.70 per share, in the fourth quarter ended Dec. 31, 2002, due to an $88.4 million non-cash goodwill impairment charge related to its United Kingdom operations. The results compare with earnings of $255,000, or 1 cent per share, for the year-ago quarter.

Excluding the charge, the Tempe-based direct marketer earned $10.3 million, or 22 cents per share, which matched Thomson Financial/First Call's estimate.

Insight reported $772 million in revenue in the fourth quarter, compared with $529.9 million for the same period in the previous year. The increase was largely due to its acquisition of Comark in April, said Timothy Crown, CEO of Insight.

For the 2002 fiscal year, Insight lost $42.8 million, or 96 cents per share, compared with net income of $33.9 million, or 80 cents per share, in fiscal 2001.

Insight's fourth-quarter sales in North America totaled $660.3 million, a 69 percent increase from sales of $391.7 million in the fourth quarter of 2001. The increase was primarily attributable to its Comark acquisition, Crown said.

"We continue to see sluggish demand for computing products, particularly for the small- to medium-sized customer, as companies further tighten their capital spending budgets," Crown said in a statement.

Insight expects first-quarter earnings of between 20 cents and 26 cents per share, excluding a charge of between 6 cents and 9 cents per share related to the depreciation of software not utilized after an IT system conversion and expenses related to the closing of a warehouse in Indianapolis.

Thomson Financial/First Call projects earnings of 25 cents per share.

Most Insight executives were not paid bonuses in the fourth quarter, which would have resulted in an additional expense charge of $900,000, the company said.

"While the top line for the fourth quarter of 2002 was lower than we had expected, our bottom line was within our expectations. We are cautious in our short-term guidance due to economic uncertainties and will provide guidance for diluted earnings per share only," Crown said in a statement.

Shares of Insight closed at $7.58 on Thursday, down 16 cents, or 2 percent.