Despite a challenging holiday season for retailers and ongoing economic volatility worldwide, SED has managed to withstand these difficulties by remaining focused on serving the evolving distribution needs of our customers and vendors.
Jean Diamond, Chairman and CEO, SED

SED reported an operating loss of $108,000 compared to operating income of $274,000 in Q4 2007. The decrease was primarily the result of non-recurring professional service and legal costs of $370,000 related to certain lawsuits and settlements for the three months ended December 31, 2008, as well as a foreign currency transaction loss of $390,000 caused by the devaluation of Latin American currencies versus the U.S. Dollar compared to a foreign currency transaction gain of $13,000.

Jean Diamond, Chairman and CEO of SED, stated, "Despite a challenging holiday season for retailers and ongoing economic volatility worldwide, SED has managed to withstand these difficulties by remaining focused on serving the evolving distribution needs of our customers and vendors. In the second quarter, we were pleased to see continued growth in our Consumer Electronics division, which was fueled by strong sales to independent dealers and through our major ecommerce channel partners. Overall, we believe we are well positioned in the marketplace today and remain enthusiastic about planned sales initiatives and strategic expansion opportunities we are pursuing."

As of December 31, 2008, the Company had cash and cash equivalents of $5.9 million, net trade receivables of $38.0 million, net inventories of $36.8 million, and working capital of $17.0 million. Net cash provided by SED's operating activities for the first fiscal six months was $4.0 million. Total shareholder's equity at the end of the reporting period was $17.9 million. In addition, SED has remained in compliance with all covenants relating to its revolving credit facility with Wells Fargo (formerly Wachovia Bank). Net borrowings under the facility decreased 9.0% to $17.1 million at December 31, 2008, down from $18.8 million at June 30, 2008. Available borrowings under the revolving credit facility were $15.8 million as of December 31, 2008.

SED will also host a teleconference today beginning at 4:15 PM Eastern via webcast accessible on www.SEDonline.com.