SED International Holdings, Inc. (Amex: SED), a multinational supply chain management provider and distributor of leading computer technology, consumer electronics and small appliances, today announced the launch of its SED Lehrhoff business segment, which includes small appliances, housewares, and personal care products. SED Lehrhoff considerably expands these segments of SED’s business, and over time is expected to increase SED’s sales and profitability. For approximately $5 million, a discount to the fair value of these assets, SED acquired inventory, intellectual property including customer and vendor records, and a lease option to a distribution center in New Jersey. Lehrhoff & Co., Inc. was an established distributor of small appliances, housewares and personal care that has been in business for over 90 years. The Lehrhoff business has historically generated annual revenues of more than $40 million. SED has hired key Lehrhoff personnel and is working to restore the highly regarded Lehrhoff enterprise to historical run rates and bolster overall SED profitability. The SED Lehrhoff business segment is expected to contribute modestly to revenue beginning immediately. In association with the SED Lehrhoff business segment, SED expects to incur one-time transaction fees and start-up costs in the first half of fiscal 2012, with meaningful addition to profitability in fiscal 2013. “The launch of the SED Lehrhoff business segment significantly enhances our small appliances, housewares and personal care business, broadens the scope of our product offering, and is in line with our strategic initiatives to improve our product mix and margins over time,” said Jonathan Elster, President and Chief Executive Officer of SED International. “Moreover, a distribution facility in New Jersey will enable SED to reduce shipping costs and delivery times for clients in the Northeast and Mid-Atlantic regions, providing us with the opportunity to expand our business with existing and prospective clients. “Since these business segments have historically produced more than double SED’s historical margins, it is an area we have been looking to expand in for some time. SED Lehrhoff serves as the base from which we can establish our Company as a competitive player in the small appliances, housewares and personal care distribution industries based on an established, 93 year-old organization that is well respected by manufacturers and customers alike,” Elster concluded.
The Company established SED Lehrhoff following its August 2011 acquisition of certain Lehrhoff assets formerly owned by ArchBrook Laguna LLC, which filed for bankruptcy in July 2011.The Lehrhoff organization provided distribution for more than 50 leading manufacturers of small appliances, housewares, and personal care products to major national and regional retail and e-commerce customers throughout the United States. Since its formation of SED Lehrhoff, SED has successfully taken ownership of many of the these relationships and has signed new contracts with manufacturers including Bissell, Black & Decker, Brother, DeLonghi, Hamilton Beach, Hoover, and Philips. ABOUT SED INTERNATIONAL HOLDINGS, INC. Founded in 1980, SED International Holdings, Inc. is a multinational, preferred distributor of leading computer technology, consumer electronics, small appliances, housewares, and personal care products. The company also offers custom-tailored supply chain management services ideally suited to meet the priorities and distribution requirements of the e-commerce, Business-to-Business and Business-to-Consumer markets. Headquartered near Atlanta, Georgia with business operations in California; Florida; Georgia; Texas; Bogota, Colombia and Buenos Aires, Argentina, SED serves a customer base of over 10,000 channel partners and retailers in the US and Latin America. To learn more, please visit www.SEDonline.com; or follow us on Twitter @SEDIntl. Statements made in this Press Release that are not historical or current facts are "forward-looking statements.” These statements often can be identified by the use of terms such as "may," "will," "expect," "believes," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond the control of the Company that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. These factors include adverse economic conditions, entry of new and stronger competitors, inadequate capital, unexpected costs, failure to gain product approval in foreign countries and failure to capitalize upon access to new markets. The Company disclaims any obligation to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. These factors and others are discussed in the “Management's Discussion and Analysis" section of the Company's Reports on Forms 10-K and 10-Q available at www.sec.gov .