Georgia
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0-16345
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22-2715444
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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3505 Newpoint Place, #450 Lawrenceville, Georgia
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30043
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(Address Of Principal Executive Office)
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(Zip Code)
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Exhibit
No.
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Description
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99.1
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Press release, dated September 14, 2011, announcing financial results for fiscal year ended June 30, 2011.
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SED International Holdings, Inc.
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Dated: September 14, 2011 | By: /s/ Lyle Dickler |
Lyle Dickler,
Vice President of Finance
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FOR MORE INFORMATION, PLEASE CONTACT
The Piacente Group, Inc.
Brandi Floberg or Kathy Price
212-481-2050 or sed@tpg-ir.com (Twitter: TPGir)
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·
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Net sales increased 12.1% to $607.0 million.
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o
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Microcomputer product sales, including handling revenue, increased 16.1% to $537.7 million.
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o
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Consumer electronics product sales declined 11.7% to $69.3 million.
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o
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Domestic sales, including exports and after eliminations, increased 10.2% to $467.9 million.
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-
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Our U.S. export business sales for the period, net of eliminations, grew by 5.5% to $89.8 million from $85.1 million in fiscal year 2010.
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o
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Latin America sales increased 19.7% to $139.1 million after translation into U.S. dollars. When measured in local currencies, Latin American sales increased 15.4%.
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·
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Gross margin was 5.2%, compared with 5.3% in fiscal 2010. When accounting for the impact of foreign currency translation, gross margin decreased by 3 basis points year-over-year. The decrease in gross margin was due primarily to product mix in the U.S., including increased sales of lower margin hard drives and software products, as well as lower gross margins on export sales from the U.S. Gross margins in Latin America net of foreign currency transactions increased by approximately 50 basis points in fiscal 2011 compared with fiscal 2010.
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·
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Operating income improved to $4.9 million, compared with $2.0 million in fiscal year 2010. The fiscal 2010 period includes a $1.6 million provision for a contract settlement. Excluding the fiscal 2010 provision for a contract settlement, operating income increased 36% year-over-year.
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·
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Net income grew to $3.1 million, or $0.63 per diluted share, compared with $302,000, or $0.06 per diluted share in fiscal year 2010. Excluding the aforementioned $1.6 million provision in the fourth quarter of fiscal 2010, net income increased 64% year-over-year.
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·
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SED’s Return on Invested Capital, or ROIC, for the 2011 fiscal year was 6.6%, compared with 6.1% in the 2010 fiscal year.* SED’s ROIC metric is calculated on an annualized basis using operating income divided by an average of quarter-end stockholders’ equity and debt, net of cash.
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·
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As of June 30, 2011 cash and cash equivalents were $4.8 million. Net trade receivables were $64.3 million, net inventories were $63.4 million, working capital was $20.8 million, and total shareholder’s value was $22.7 million.
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·
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At June 30, 2011, available borrowings under SED’s credit facilities with Wells Fargo and Helm Bank were approximately $18.2 million, after deducting $5.7 million in reserves for outstanding letters of credit.
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Net sales increased 14.6% to $152.6 million.
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Gross margin decreased by 64 basis points year-over-year to 4.7%, primarily due to a higher percentage of sales from lower margin hard drives and software products. When accounting for the impact of foreign currency transaction gains and/or losses, gross margin decreased by 31 basis points year-over-year.
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Operating income declined 6.0% to $933,000 due primarily to lower gross margins and a 9.7% increase in SG&A expense associated primarily with higher selling costs related to increased sales.
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Net income was $443,000, or $0.09 per diluted share, compared with $663,000, or $0.14 per diluted share in the fourth quarter of fiscal 2010.
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Began trading on the NYSE Amex under the ticker symbol “SED” on March 1, 2011.
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Expanded and relocated Atlanta, GA area distribution center and corporate headquarters to meet capacity demands of growing business.
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Approved an additional $1.3 million for purchases under its stock repurchase program under which 410,307 shares of SED were repurchased in fiscal year 2011. This authorization brings the aggregate dollar amount authorized by SED’s Board of Directors to more than $1.5 million since the inception of the repurchase plan in August 2009, under which SED has repurchased a total of 461,915 shares at an average cost of $3.74 as of June 30, 2011.
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Acquired certain assets of ArchBrook Laguna LLC and subsidiary Lehrhoff & Co., Inc. to expand higher margin small appliances business, add a Northeast U.S. distribution center for both Lehrhoff and SED products, and enhance business in other areas of its operations.
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In total in fiscal 2011, SED broadened its vendor scope with the addition of new vendors in key line-card categories including:
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o
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Significant expansion of computer product lines with Lenovo PC, ASUS motherboard, and several new tablet lines;
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o
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Boosted consumer electronics business with addition of new strategic partnership agreements to distribute Polaroid, Pinnacle Speakers, and additional Canon products; and
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o
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Enhanced Latin American offerings, highlighted by the additions of Acer Latin America and LG monitors, projectors and optical drives; and higher margin accessory lines, such as Intec batteries, Eaton electrical components, and Level One electronics products.
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Appointed new Chief Financial Officer Stan Baumgartner, a seasoned financial executive with an extensive Fortune 500 background.
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Strengthened executive team with key industry veteran appointments to support strategic growth initiatives in the U.S. and Latin America: Eddie Lageyre to Senior Vice President, U.S. Purchasing, Ronell Rivera to Senior Vice President for Latin America, and Mauricio Arcila to General Manager of SED Colombia.
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June 30,
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2011
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2010
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 4,751,000 | $ | 7,445,000 | ||||
Trade accounts receivable, less allowance for doubtful accounts of $783,000 (2011) and $542,000 (2010)
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64,335,000 | 53,893,000 | ||||||
Inventories
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63,359,000 | 47,948,000 | ||||||
Deferred tax assets, net
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443,000 | 313,000 | ||||||
Other current assets
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6,617,000 | 3,897,000 | ||||||
Total current assets
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139,505,000 | 113,496,000 | ||||||
Property and equipment, net
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1,928,000 | 926,000 | ||||||
Total assets
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$ | 141,433,000 | $ | 114,422,000 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current liabilities:
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Trade accounts payable
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$ | 70,681,000 | $ | 61,955,000 | ||||
Accrued and other current liabilities
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9,581,000 | 10,129,000 | ||||||
Revolving credit facilities
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38,430,000 | 22,297,000 | ||||||
Total liabilities
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118,692,000 | 94,381,000 | ||||||
Commitments and contingencies
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Shareholders’ equity:
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Preferred stock, $1.00 par value; 129,500 shares authorized, none issued
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– | – | ||||||
Common stock, $.01 par value; 100,000,000 shares authorized,
6,979,161 (2011) and 6,739,031 (2010) shares issued, 4,867,697 (2011)
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and 5,044,540 (2010) shares outstanding
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70,000 | 68,000 | ||||||
Additional paid-in capital
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70,648,000 | 69,957,000 | ||||||
Accumulated deficit
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(30,112,000 | ) | (33,229,000 | ) | ||||
Accumulated other comprehensive loss
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(3,171,000 | ) | (3,668,000 | ) | ||||
Treasury stock, 2,111,464 shares, at cost
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(14,694,000 | ) | (13,087,000 | ) | ||||
Total shareholders’ equity
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22,741,000 | 20,041,000 | ||||||
Total liabilities and shareholders’ equity
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$ | 141,433,000 | $ | 114,422,000 |
Three Months Ended June 30,
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Year Ended June 30,
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2011
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2010
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2011
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2010
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Net sales
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$ | 152,623,000 | $ | 133,148,000 | $ | 606,983,000 | $ | 541,663,000 | ||||||||
Cost of sales
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145,384,000 | 126,032,000 | 575,330,000 | 513,210,000 | ||||||||||||
Gross profit
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7,239,000 | 7,116,000 | 31,653,000 | 28,453,000 | ||||||||||||
Selling, general and administrative expenses, excluding employment contract settlement expense and depreciation and amortization expense
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6,513,000 | 5,939,000 | 26,624,000 | 24,674,000 | ||||||||||||
Employment contract settlement expense
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— | — | — | 1,600,000 | ||||||||||||
Depreciation and amortization expense
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111,000 | 89,000 | 440,000 | 380,000 | ||||||||||||
Foreign currency transactions loss (gain)
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(318,000 | ) | 95,000 | (285,000 | ) | (201,000 | ) | |||||||||
Operating income
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933,000 | 993,000 | 4,874,000 | 2,000,000 | ||||||||||||
Interest income
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(16,000 | ) | (20,000 | ) | (53,000 | ) | (93,000 | ) | ||||||||
Interest expense
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252,000 | 227,000 | 979,000 | 1,341,000 | ||||||||||||
Income before income taxes
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696,000 | 786,000 | 3,948,000 | 752,000 | ||||||||||||
Income tax expense
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254,000 | 123,000 | 831,000 | 450,000 | ||||||||||||
Net income
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$ | 443,000 | $ | 663,000 | $ | 3,117,000 | $ | 302,000 | ||||||||
Basic income per common share
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$ | 0.10 | $ | 0.15 | $ | 0.68 | $ | 0.07 | ||||||||
Diluted income per common share
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$ | 0.09 | $ | 0.14 | $ | 0.63 | $ | 0.06 |
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