ModusLink Global Solutions, Inc. (MLNK) Reports Q2 Loss of $0.21; Aims to Reduce Costs

ModusLink Global Solutions, Inc. (NASDAQ: MLNK) reported Q2 EPS of ($0.21), versus ($0.58) reported last year. Revenue for the quarter came in at $198.8 million, versus $228.1 million reported last year.

ModusLink today announced cost reduction plans that are expected to result in annualized cost savings of between $30 and $40 million. The Company estimates approximately $15 to $20 million of benefit for the 2012 fiscal year. ModusLink intends to reinvest most of the savings realized in fiscal 2012 in sales and marketing, and other important initiatives to better penetrate its markets and create a more competitive platform.

Key components of the Company’s investing and cost reduction plan include:

• investments in sales and marketing, implementing price optimization strategies and refining sales processes to drive future sales growth;
  
  
• cost alignment initiatives, including executing strategic sourcing initiatives, reducing labor costs and restructuring of facilities to better align capacity with product volumes from clients;
  
  
• working capital improvements such as strengthening inventory management and other financial processes to improve cash flow; and
  
  
• strengthening the Company’s leadership team.

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