Niche Distributors Show Resilience In Tough Economy

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Financial results from Daisytek International and Pioneer-Standard Electronics show that niche distributors continue to persevere in a tough business climate.

For its fourth quarter ended March 31, Daisytek posted $3.9 million in net income, or 20 cents per diluted share, compared with $3.1 million, or 21 cents per diluted share, in the year-ago quarter. Revenue rose 23 percent to $324 million, compared with $264.1 million a year earlier.

"Daisytek has again delivered earnings and revenue to meet expectations despite the uncertain global economic climate," said Jim Powell, president and CEO of the Plano, Texas, accessories and supplies distributor.

>> The supplies business provides a bright spot in an otherwise uncertain economy.


"Capital expenses are still tight with many companies, but no one is stopping them from buying supplies," said Bicky Singh, CEO of Yorba Linda, Calif.-based Future Computing Solutions.

Daisytek also made an offer last week to acquire full control of ISA International, a $510 million European distributor that indirectly owns 47 percent of Kingfield Heath, a U.K.-based wholesaler of office products.

Meanwhile, Pioneer-Standard reported a loss of $6.3 million, or 23 cents per share, for its fourth quarter ended March 31. This compares with earnings of $66,000, or break-even, in the year-ago quarter. The most recent results included $12.4 million in special charges that the distributor previously disclosed.

Without the charges, the Cleveland-based distributor earned $1.1 million, or 4 cents per share, compared with precharge earnings of $8.7 million, or 28 cents per share, for the year-ago quarter. Thomson Financial/First Call expected earnings of 2 cents per share, excluding special charges. The distributor posted sales of $505.4 million, a 30 percent decline from $724.8 million in the year-ago quarter.

"We have been very focused on effectively managing our business in an extremely difficult environment," said Arthur Rhein, Pioneer-Standard's president and CEO, in a statement. Fiscal 2002 revenue was $2.3 billion, off 20 percent from the previous year.

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