SED International Holdings, Inc. (NYSE MKT: SED), a multinational supply chain management provider and distributor of leading computer technology, computer products, consumer electronics, small appliances, housewares and personal care products, today announced financial results for the six months and fiscal 2013 second quarter ended December 31, 2012.
Net sales of $156.3 for fiscal 2013 second quarter, represented a 23.7% increase over net sales of $126.4 million reported in the fiscal 2013 first quarter. Net sales for the quarter were up 3.5% for the second quarter compared to $150.9 million in the second quarter last year. The increase was driven by strong sales in the consumer product categories which include tablets, notebooks, and television products.
Gross margin decreased to 5.1% during the quarter compared to 9% for the same period last year. Our current quarter margin was closer to historical levels. Last year’s gross margin was unnaturally high due to increased margins on hard drives, driven by industry supply constraints.
Including restructuring costs, the company reported a net loss of $1.6 million for the second quarter, compared to net income of $3.8 million in the second quarter last year. Basic and diluted loss per share was $0.32 for the current quarter compared to earnings of $0.79 per basic share and $0.78 per diluted share for the second quarter last year. Other items include:
- The company incurred restructuring costs of $0.8 million during the second quarter which were attributable to the organizational restructuring of the management team including severance payments, change in the organizational alignment of sales, product management, and marketing, and information technology outsourcing. These organizational changes were made to provide a leaner internal services organization and improved support for our sales and marketing organization. Benefits from these restructuring actions are expected in future periods.
- Normalized adjusted net loss for the current quarter was $0.7 million, after deducting restructuring related costs and stock-based compensation expense, compared to a Generally Accepted Accounting Principles (“GAAP”) net loss of $1.6 million.
- Non-GAAP adjusted EBITDA, which also excludes restructuring related costs and stock-based compensation expense, was $3,000 for the current quarter and a loss of $1 million for the six months ended December 31, 2012, compared to non-GAAP adjusted EBITDA of $4.6 million for the same quarter last year and $3.3 million for the six months ended December 31, 2011.
- Inventory turns improved to 10.3 for the fiscal 2013 second quarter compared to 8.8 turns for the same period a year ago and from 8.1 turns for the fiscal 2013 first quarter.
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