The 10 Worst-Performing VARBusiness 500 Stocks Of 2008

2008 was a trying year for all sorts of solution providers. No matter what vertical, what technology or what segment a client catered to, a vast majority of the publicly held VARBusiness 500's stocks went down in value. Overall, the stock prices went down an average 48.5 percent. Following are companies that fell even further -- despite, in some cases, having balance sheets that were not down in the dumps.

Stock prices of Pinnacle Data Systems, 2008 VARBusiness 500 rank No. 329, sank 82.9 percent, from $2.57 to $.44 during 2008. The $73 million company provides specialized embedded computing products to OEMs, including standard and custom-designed products for the telecom, defense/aerospace, medical, semiconductor, industrial automation and IT markets. Its capabilities range from board-level designs to fully integrated systems. PDSi also offers engineering and manufacturing services, including custom product design, system integration, repair programs, warranty management and specialized production capabilities. Last month, it added Sun veteran Jeffrey I. Guerrero to its sales and marketing team as director of product management.

2008 VARBusiness 500 company No. 369, Rolta, suffered an 83.6 percent crash in stock price, tumbling from $736.35 per share to $121 per share. Its current share price is down significantly, but it is still well above many competitors. Headquartered in Mumbai, India, the $61 million company last month announced its acquisition of business intelligence software developer Piocon Technologies of Chicago. Its last quarter saw revenue and profit grow both year-over-year and quarter- over-quarter.

The shares of TMNG, 2008 VARBusiness 500 No. 403, sank 84.7 percent, shrinking from an already-low $2.61 share price to $.40. The VAR provides professional services to the converging communications media and entertainment industries. Revenue in the third quarter of 2008 was down to $17.5 million, compared with revenue of $20.8 million in the prior-year period. TMNG executives said that the figures reflected continued strong performance from both the management consulting and software solutions segments. However, scope reductions and protraction in project, well as unfavorable foreign exchange impact, offset those gains. During the quarter, TMNG Global's gross margin was 43.5 percent, compared with 49.5 percent in the third quarter of 2007.

Ranked No. 224 on the VARBusiness 500, Incentra Solutions is also a member of the CRN Fast Growth list, moving up to No. 11 on the 2008 list from No. 18 in 2007. In fact, the company experienced 284.27 percent growth last year. However, those figures have not translated into stock price growth. Last Jan. 2, price per share was 90 cents; by the end of the year the price was down to 13 cents, a difference of 84.7 percent. The VAR provides IT and storage management solutions to enterprises and managed service providers, including professional services, hardware and software products with first-call support, IT outsourcing solutions and financing options.

TROY's stock dipped from $4.20 to .55 in 2008, a decline of 86.9 percent. The VAR provides on-demand printing solutions that manage, secure and simplify end-to-end enterprise printing environments. TROY, 2008 VARBusiness 500 rank No. 408, offers application software, security printing hardware and specialized consumables for securely printing checks, money orders, transcripts, prescriptions and other documents for its small and midsize customers.

Although its stock tumbled $5.78 to .73 or 87.4 percent last year, PFSweb reported revenue up from last year. Revenue for the first nine months of 2008 was $339.1 million, compared with $324.8 million for the nine months ended Sept. 30, 2007. The $433 million VAR develops and deploys integrated business infrastructure solutions and fulfillment services for Fortune 1000, Global 2000 and brand-name companies, including third party logistics, call center support and e-commerce services. The solution provider, No. 109 on the 2008 VARBusiness 500, serves diverse industries and company types, including such clients as LEGO, Discovery Commerce, Riverbed, Hewlett-Packard, IBM and Xerox.

Butler International, VARBusiness 500 No. 129, endured an 88.1 percent drop in stock price, from 67 cents per share to 8 cents. The $342 million VAR provides TechOutsourcing services, helping customers worldwide increase performance and savings. Butler's global services model provides customized on-site, off-site, or offshore service-delivery options. The 61-year-old company has customers in the aircraft, aerospace, defense, telecommunications, financial services, heavy equipment and manufacturing sectors.

The stock price of 2008 VARBusiness 500 company No. 446 Teltronics, dipped from 30 cents to 3 cents by the end of 2008, an 89.3 percent drop. The $42.3 million VAR provides communications solutions aimed at helping customers increase revenue, decrease costs and improve productivity. The company designs, develops and manufactures electronic equipment and applications software systems that enhance the performance of communications networks.

NaviSite's stock plummeted 91.8 percent -" from a share price of $4.89 one year ago to 40 cents on Dec. 31. The $126 million solution provider, No. 241 on the 2008 VARBusiness 500, offers managed hosting solutions and application services. In its latest earnings report, it was positive: The company's total revenue for the most recent quarter was $39.9 million, representing a year-over-year increase of 10 percent, but a sequential decrease of 1 percent due to an anticipated decrease in the professional services revenue in the quarter. In addition, income from operations for the first quarter was $0.4 million, representing a 48 percent year-over-year increase.

MTM Technologies' stock price fell dramatically during the past 12 months. The $275 million solution provider's stock price was $7.80 last Jan. 2, but the company, No. 152 on the 2008 VARBusiness 500, finished out the year at $.28. Its financials have taken a beating as well: MTM's net revenue was $50.1 million for the quarter ended Sept. 30, 2008. That represents an increase of 4.2 percent over the prior quarter, but a substantial decline of 19.6 percent over the comparable prior year period.