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SED International Announces Third Quarter 2012 Financial Results

Stocks in this article: SED

SED International Holdings, Inc. (Amex: SED), a multinational supply chain management provider and distributor of leading computer technology, consumer electronics, small appliances, housewares and personal care products, today announced financial results for the Company’s third quarter and the first nine months of fiscal year 2012, the periods ended March 31, 2012.

Third Fiscal Quarter 2012 Financial Highlights

  • Quarterly net revenue was $138.7 million versus $155.7 million in last year's comparable period due primarily to an industry-wide disk drive shortage related to flooding in Thailand
  • Gross margin increased 100 basis points to 6.2%, or $8.6 million compared to 5.2% or $8.1 million in the comparable period last year due primarily to higher than normal sales prices on hard drives due to inventory supply constraints and higher margins earned on small appliances
  • Operating income was $0.8 million compared to operating income of $1.6 million in the comparable period last year. This decrease was primarily attributable to operating and startup expenses for the New Jersey location which opened in fiscal 2012
  • Net income was $0.4 million, or $0.09 per diluted share. This compared to net income of $1.1 million, or $0.21 per diluted share, in the comparable period last year
  • EBITDA* was $1.1 million compared to $1.8 million in the same period last year
  • As of March 31, 2012 cash and cash equivalents were $7.3 million, net trade receivables were $61.0 million, net inventories were $64.4 million and working capital was $22.5 million
  • SED’s Return on Invested Capital, or ROIC, for the third quarter of fiscal 2012 was 5.1%
  • Shareholders’ equity at the end of the quarter was $26.3 million, or $5.27 per diluted share

“We maintained our profitability despite a challenging economic environment in which we experienced a softer than anticipated top-line and continued to invest in strategic growth initiatives,” said Jonathan Elster, president and chief executive officer of SED International. “The residual effects of the hard drive shortage due to the flooding in Thailand continued to affect availability of certain hard drives, accounting for nearly all of the decline in our revenues and resulting in higher overall gross margins. Also during the quarter, the housewares, small appliances, and personal care product categories, strengthened through our recent acquisition, delivered double digit revenue growth and represent an important opportunity for us to increase our profit margins over time.”

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