CARROLLTON, Texas-Value-added wireless logistics services provider CellStar Corp. reported that its operating company, CellStar Ltd., entered into a master distributor agreement with the Latin America Group of Motorola Inc.’s Personal Communications Sector.
CellStar said the agreement is expected to provide rapid and flexible product distribution logistics for Motorola’s products through comprehensive services including programming and kitting, key distributor support and both virtual and bonded warehousing.
In addition, the agreement will enable CellStar to expand its existing capabilities and serve direct and indirect distribution channels throughout the Latin America region.
CellStar also released financial results for the second quarter, and noted it took a special charge of $40.9 million as it intends to divest its interest in its Brazil joint venture, phase out a major portion of its redistributor business and substantially reduce international trading operations conducted by its United Kingdom subsidiary.
“Our management team has spent the last six months assessing CellStar’s operations, market position and opportunities in the dynamic wireless communications industry,” said Chairman Alan Goldfield. “As a result, our second quarter reflects a number of decisive actions we have taken, aimed at improving future operating results. These include the decisions we’ve made regarding our Brazil redistributor and U.K. operations.”
Goldfield went on to say that CellStar intends to focus on the areas that show the most promise for long-term profitable growth.
For the second quarter ended May 31, CellStar reported revenues, excluding special charges, of $563.4 million compared with revenue of $570.3 million excluding special charges for the second quarter of 1999.
Net income was down from $11.3 million in 1999 to $1.1 million during second-quarter 2000.
