Including discontinued operations, the company reported a net loss of $43.73 million, or $.54 per share, for the quarter. These results include an asset impairment charge of $9.86 million related to the U.S. distribution business, a restructuring charge of $10.96 million related to workforce reductions and lease termination fees, and an extraordinary gain of $10.51 million related to the early extinguishment of a portion of the company’s 12.5 percent senior notes. For the same period last year, the company reported a net loss of $11.72 million, or $.15 per share.
For the nine months ended September 30, 2000, including discontinued operations, Merisel reported a net loss of $74.08 million, or $.92 per share. For the same period last year, the company reported a net loss of $35.21 million, or $.44 per share.
On October 27, 2000, the company completed the sale of its Merisel Open Computing Alliance (MOCA) business unit, which provides enterprise-class solutions for Sun Microsystems servers and the Solaris operating system to authorized resellers, to Arrow Electronics, Inc. For the nine months ended September 30, 2000, MOCA generated $740.30 million in revenue.
Excluding the discontinued MOCA operations, the company reported a net loss of $46.96 million, or $.58 per share, for the quarter, and a net loss of $94.21 million, or $1.17 per share, for the nine-month period. For the prior year, excluding discontinued operations, the company reported a net loss for the third quarter of $17.64 million, or $.22 per share, and a net loss for the nine-month period of $51.87 million, or $.65 per share.
Sales for third quarter 2000 declined 64 percent to $399.48 million from $1.10 billion in third quarter 1999. Third-quarter 2000 gross margin decreased to 0.10 percent from 4.28 percent for third quarter 1999. This significant decrease is primarily related to adjustments to inventory, accounts receivable and accounts payable reserves to reflect current realizable values given the rapid decline in sales and the wind-down of certain vendor relationships and also reflects a decrease in vendor rebates.
Throughout the quarter, we engaged in significant restructuring activities aimed at returning our U.S. and Canadian Distribution businesses to profitability, said David G. Sadler, chief executive officer of Merisel. With the significant decrease in the size of our U.S. Distribution business, along with our recent acquisition of the electronic services assets of Value America, Inc., we are seeking new opportunities to leverage our expertise in distribution, logistics and now e-services to establish a profitable services-driven business model in the U.S.
