After posting six consecutive quarterly net losses, distributor Reptron Electronics Inc. has pulled itself out of the red with its bond repurchase program.
Reptron, Tampa, Fla., earned $5.3 million on net sales of $81 million for the second quarter, compared with a net loss of $1.5 million and sales of $73.6 million a year earlier.
The company recorded a net loss for the quarter from operations of $2.9 million, before the extraordinary net gain of $8.2 million from a bond repurchase program. During the quarter, Reptron strengthened its balance sheet by repurchasing $25 million of the company's convertible bonds, which lowered overall debt and generated the extraordinary gain.
"The repurchase program is nice to have, but you can't get an extraordinary gain every quarter," said analyst Stuart Bogard, with Stephens Inc., Little Rock, Ark.
However, based on recovering market conditions and Reptron's current book-to-bill ratio for both its distribution and contract manufacturing business, Bogard said he's optimistic about the company's future.
Additionally, Reptron has spent a lot of money over the last year strengthening its sales and marketing structure, which is beginning to pay off, he said. The company recently landed eight new customers, Bogard added.
Indeed, Reptron is beginning to see signs of recovery within the industry and its business, according to Paul J. Plante, chief operating officer. "I am encouraged by the solid sales growth in the Reptron Distribution Division and the strong book-to-bill ratio for both the Reptron Distribution Division and the K-Byte Manufacturing Division," he said. "The company has been using this very difficult period to rebuild our sales channel, establish new distribution agreements and product lines, and improve our operations. We expect to realize a return on these investments as we proceed through the balance of this year."
Net sales for the six months ended June 30 was $158.4 million, up from $144.5 the year before. Net income for the first half was $2.5 million, compared with a net loss of $2 million a year earlier.
Reptron Electronics provides both value-added distribution of electronic components and targeted contract manufacturing services through its two divisions, Reptron Distribution and K-Byte Manufacturing.