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SED International Holdings Announces Plans to Restructure U.S. Operations to Strengthen Long-term Competitive Position

SED International Holdings, Inc. (NYSE MKT: SED), announced today that the Company plans to strengthen its long-term competitive position through a restructuring of its United States operations. The restructuring initiatives will improve productivity and strengthen SED’s commercial operations.

“The initiatives announced today are designed to accelerate SED’s path to sustainable profitability,” said Bob O’Malley, SED Chief Executive Officer. “In addition to addressing the expense side of our business, SED is focusing its U.S. business on its three core competencies: IT storage systems, small business IT solutions and merchandized e-commerce fulfillment.”

“Since I began with SED two quarters ago, I have spoken about the need to improve our commercial services offerings by embracing cloud computing service models, by pursuing applications capitalizing on converged data, voice and video, and by leveraging the potential of mobile computing platforms,” continued Mr. O’Malley. “In addition to our IT related businesses, we are increasing our focus on fulfillment services for our retail clients. The initiatives we are undertaking now will allow us to invest in these strategic areas of growth and also improve our relationship with our strategic vendor and customer partners.”

Key elements of the plan include:

  • Focus the Company’s line card consistent with strategic opportunities in both our Commercial and Consumer businesses.
  • Reduce U.S. headcount and SG&A by over 25%.
  • Consolidate SED’s 5 U.S. distribution centers into 3 distribution centers.

It is expected that this restructuring plan will result in gross profit dollars remaining consistent with the historical run rates while SG&A will decline by approximately 25%. This plan will not impact the recently adopted strategic growth plan in Latin America and will not affect the profitability of the Latin American business unit.

“The bold, decisive restructuring actions announced today are consistent with the long-term goals for SED’s business,” said Samuel A. Kidston, SED’s Chairman of the Board. “The Board fully supports these actions and believes that they are a very important step in returning the company to profitable growth, improving gross margins and driving improved Return On Invested Capital and shareholder value.”

More specific financial measures associated with the restructuring will be reviewed with the investor community at the SED Q3 Conference Call in May.

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; New Jersey; 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.

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