Weak Sales Drops Electro-Rent Profits in Q3

Weak equipment leases and sales contributed to a 60 percent drop in third quarter net income at Electro Rent Corp. when compared to a year ago. The Van Nuys-based provider of general purpose electronic test equipment, personal computers and servers reduced its rental pricing due to the global recession and competitive pressures. For the quarter ending Feb. 28, Electro-Rent had net income of $1.9 million, or $0.08 per diluted share, on revenues of $30.1 million. For the same period in 2008, the company had net income of $4.8 million, or $0.19 per diluted share, on revenues of $35.7 million. Electro-Rent will look for new sources of revenue and reduce costs by purchasing less rental inventory to moderate depreciation, said Chairman and CEO Daniel Greenberg. “Additionally, while we have been reducing our overall labor costs and making changes in compensation and related benefits, we must try to do this without compromising our most important asset: the knowledge, experience and loyalty of Electro Rent’s employees,” Greenberg said. Mark R. Madler