Symbol Reports 3Q Profit; Looks to Drive More Sales Through Channel

Richard Bravman, CEO of Symbol, told investors on a conference call late Tuesday that third-quarter results show operational improvements are working and that the company is on track.

"Symbol's financial performance has improved over the last several quarters," Bravman told investors. "We believe that Symbol is on a sound business foundation in the short term with the ability to scale for future growth."

Symbol is looking to achieve that growth, in large part, through the channel. Bravman cited the significance of a recent deal with Westcon Group to carry Symbol's entire product line in North America and Europe. Symbol's goal in that relationship is to increase the volume of mobility products sold through the channel. Westcon Group is charged with helping integrate Symbol's mobile, WLAN and automatic data-capture products into converged solutions through solution providers.

Symbol also launched its own PartnerSelect channel program in June 2003, aimed at offering existing partners the opportunity to sell professional services for Symbol enterprise mobility solutions. Symbol is looking to boost sales through the channel from about 42 percent to 75 percent.

For its third quarter ended Sept. 30, 2003, Symbol reported net earnings of $12 million, or 5 cents per share, on sales of $382 million. That's up slightly when compared with restated sales of $380 million for the same quarter last year, according to Symbol, Holtsville, N.Y.

Wall Street analysts had predicted earnings, before charges, of 6 cents per share, according to Thomson Financial/First Call.

Bravman singled out the underlying improvements on the income statement as particularly significant considering that expenses related to restatement activities and an accounting charge related to stock options caused a drag of about 6 cents per share during the quarter.

In early October, Symbol restated financial results from 1998 through 2002, reducing its revenue for the period by $223 million. The restatement was a necessary, big step in helping to move beyond channel-stuffing allegations related to a securities fraud scandal.

Over the past several months, Symbol has restructured its executive leadership, fired several employees and instituted corrective financial reporting and the new channel strategy and program.

These moves were implemented to help remedy issues related to a scandal in which former chief accounting officer Robert Korkuc and former sales finance executive Robert Asti pleaded guilty to charges they schemed to inflate Symbol's earnings from 1998 to 2002.

Write-downs during the third-quarter include $8 million accounting charge, related to a change in the company's stock option plans, resulting from its late filings with the Securities and Exchange Commission. Also included during the third quarter was $11 million in costs related to restatement activities, primarily fees for professional services, according to Symbol.

Bravman said work continues to complete and file Symbol's 2002 annual report, but declined to provide a timetable. The SEC and U.S. Attorney's office continue their investigations of the company. A Symbol spokesperson previously told CRN the company expects the SEC to eventually issue some sort of censure and fine after all of the restatements are filed.