CRN Channel Benchmarks, Week of August 14

CRN compared financial measures from the week of August 14 with those from the week of July 17 to develop the most recent data on four-week trends. This was another period of weakening financial health for many of the 11 categories CRN covers. Six categories showed deterioration in financial strength while only one category showed stronger financial results.

IT direct marketers was the standout category in terms of financial performance. The companies in this category, for example, saw revenue growth (on an annualized basis) rise to 12.2 percent compared to 11.2 percent in the preceding four-week period. Gross margins rose to 12.9 percent from 12.7 percent. Profits also rose, as measured by EBITDA (defined as earnings before interest, taxes, depreciation and amortization), which edged up to 2.5 percent from 2.4 percent.

Finally, the debt-to-asset ratio (defined as total debt divided by total assets, converted to percentage terms) declined to 5.6 percent from 5.9 percent. A decline in this percentage implies that IT direct marketers as a group are becoming less financially leveraged and less vulnerable to creditors. Continued below chart...

As mentioned above, a number of sectors saw their financial health weaken over the period. IT management software continued to see weakness in both revenue growth and gross margins, as was the case in the preceding four week period. Gross margins also declined for the financial IT services, government professional IT services, business software and enterprise applications categories, and EBITDA declined as well for several of these categories. Distributors saw revenue growth drop to 9.3 percent from 9.6 percent, and the debt-to-asset ration increased slightly.