By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Lawrenceville, Ga. — SED International Holdings reported a net loss in its fiscal fourth quarter and lower net earnings for its fiscal year, ended June 30.
SED reported a net loss in the quarter of $2 million, compared with net income year on year of $400,000.
Net sales for the quarter were $131.8 million, compared with $152.6 million in the prior-year fourth quarter. An industrywide decline in technology and consumer electronics demand, coupled with lingering effects from hard-drive shortages, negatively impacted net sales in the fourth quarter compared with the prior year, the distributor said.
There was an operating loss of $1.7 million in the fourth quarter, compared with operating income of $900,000 in the prior-year fourth quarter.
For the fiscal year net income was $1.4 million, compared with net income of $3.1 million for the prior year.
Net sales for the fiscal year was $577.3 million, compared with $607 million for the fiscal year ending June 30, 2011. The decrease was due in large part to weakened technology and consumer electronics demand and an industrywide disk drive shortage related to flooding in Thailand, SED said.
Operating income was $1.8 million compared with $4.8 million for the prior year period.
“We are disappointed in our bottom-line results for the 2012 fiscal year and are undertaking several initiatives, including a transformation of certain elements of our business model, to deliver stronger results in 2013 and beyond,” said Jonathan Elster, president and CEO of SED International. “In the past year, our PC and consumer electronics business was challenged by weakened demand, while long-term investments in our business and devaluation of the peso in Latin America had additional negative impact on earnings.”
“Initiatives underway to address the current state of our business include a reorganization of our U.S. sales, purchasing and marketing functions into business units to better focus within specific customer segments, and evaluation of outsourcing options that will result in increased efficiencies and speed of execution. We are also aggressively working to size our business for the current environment, and have recently implemented workforce reductions and temporary reductions in work hours in different parts of our business,” he added.
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