US export sales for the period net of eliminations grew by 11.7% to $25.2 million compared with $22.7 million in fiscal year 2010. The increase in 2011 was attributed mainly to growth from sales of computer products, specifically hard drives, branded PCs and peripheral devices, including printers and consumable printer products.

Our Latin American sales after translation into US dollars increased 11.3% to $34.5 million. When measured in local currencies, Latin American sales rose approximately 10% with this increase driven by higher sales of computer products, printers and consumable products.

Gross margin for the fourth quarter decreased by 64 basis points year-over-year to 4.7% primarily due to a higher percentage of lower margin hard drives and software sales. When accounting for the impact of foreign currency on our gross margins, including the translation gains and losses, gross margin decreased not by 64 but by 31 basis points compared to the fourth quarter a year ago.

Selling, general and administrative expenses, excluding depreciation and amortization expense and foreign currency translation gains and losses, were $6.5 million or 9.7% increase compared with the $5.9 million in fiscal 2010. The main driver of the increase year-over-year was selling expenses, including commissions, which helped drive the 14.6% sales increase.

As a percent of revenues, SG&A was 4.2% of net sales in fiscal 2011 compared with 4.6% in fiscal 2010.

Operating income for the fourth quarter declined 6% to $933,000 due primarily to the lower gross margins and the 9.7% increase in SG&A associated with the higher selling cost but helping to drive growth.

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