##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number: 333-134090





LOGO

Intcomex, Inc.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 65-0893400                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

3505 NW 107thAvenue, Miami, FL 33178

(Address of principal executive
offices) (Zip Code)

(305) 477-6230

(Registrants telephone number, including area code)





Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.     ̈  Yes    x  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  | x |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).     ̈  Yes    x  No

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.

As of November 13, 2008, the Registrant had 100,000 shares of common stock, voting, $0.01 par value, and 2,182 shares of Class B common stock, non-voting, $0.01 par value, outstanding. There is no public
trading market for the common stock.









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##### Table of Contents

INTCOMEX, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q



|                               |  |                                                                                                           |  |   
|------------------------------ |  | --------------------------------------------------------------------------------------------------------- |  | --
|PART I  FINANCIAL INFORMATION |  |                                                                                                          
|                               |  | Page                                                                                                     
|Item 1.                        |  | Financial Statements.                                                                                     |  | 3 
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007                      |  | 3 
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Statements of Operations - Three and nine months ended September 30, 2008 and 2007 |  | 4 
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Statements of Cash Flows - Nine months ended September 30, 2008 and 2007           |  | 5 
|                               |  |                                                                                                          
|                               |  | Notes to Unaudited Condensed Consolidated Financial Statements                                            |  | 6 
|                               |  |                                                                                                          
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations.                    |  | 26
|                               |  |                                                                                                          
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk.                                               |  | 38
|                               |  |                                                                                                          
|Item 4.                        |  | Controls and Procedures.                                                                                  |  | 38
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                          
|                               |  |                                                                                                          
|Item 1.                        |  | Legal Proceedings.                                                                                        |  | 39
|                               |  |                                                                                                          
|Item 1A.                       |  | Risk Factors.                                                                                             |  | 39
|                               |  |                                                                                                          
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds.                                              |  | 40
|                               |  |                                                                                                          
|Item 3.                        |  | Defaults Upon Senior Securities.                                                                          |  | 40
|                               |  |                                                                                                          
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders.                                                      |  | 40
|                               |  |                                                                                                          
|Item 5.                        |  | Other Information.                                                                                        |  | 40
|                               |  |                                                                                                          
|Item 6.                        |  | Exhibits.                                                                                                 |  | 40
|                               | 
|Signatures                     |  | 40                                                                                                       



2



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##### Table of Contents

Part I  FINANCIAL INFORMATION



|Item 1. | Financial Statements.
|------- | ---------------------

INTCOMEX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in 000s, except share data)



|                                                                                                                                                  |  |                   |         |                  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ---------------- | - | ------- | -
|                                                                                                                                                  |  | September 30,2008 |         | December 31,2007 |  
|                                                                                                                                                  |  | (Unaudited)       |         |                  |  
|Assets                                                                                                                                            |  |                   |         |                  |   |         |  
|Current assets                                                                                                                                    |  |                   |         |                  |   |         |  
|Cash and cash equivalents (includes restricted cash of $400 at September 30, 2008)                                                                |  | $                 | 22,169  |                  | $ | 29,399  |  
|Trade accounts receivable (net of allowance for doubtful accounts of $6,316 and $4,651 at September 30, 2008 and December 31, 2007,
respectively) |  |                   | 111,535 |                  |   | 116,744 |  
|Inventories                                                                                                                                       |  |                   | 135,238 |                  |   | 116,961 |  
|Notes and other receivables                                                                                                                       |  |                   | 21,547  |                  |   | 19,704  |  
|Prepaid expenses and other                                                                                                                        |  |                   | 13,281  |                  |   | 12,423  |  
|                                                                                                                                                  |  |                   |         |                  |   |         |  
|Total current assets                                                                                                                              |  |                   | 303,770 |                  |   | 295,231 |  
|Property and equipment, net                                                                                                                       |  |                   | 17,506  |                  |   | 15,059  |  
|Goodwill                                                                                                                                          |  |                   | 34,106  |                  |   | 34,257  |  
|Identifiable intangible assets, net                                                                                                               |  |                   | 2,556   |                  |   | 3,056   |  
|Other assets                                                                                                                                      |  |                   | 19,133  |                  |   | 15,405  |  
|                                                                                                                                                  |  |                   |         |                  |   |         |  
|Total assets                                                                                                                                      |  | $                 | 377,071 |                  | $ | 363,008 |  
|                                                                                                                                                  |  |                   |         |                  |   |         |  
|Liabilities and Shareholders Equity                                                                                                              |  |                   |         |                  |   |         |  
|                                                                                                                                                  |  |                  
|Liabilities                                                                                                                                       |  |                   |         |                  |   |         |  
|Current liabilities                                                                                                                               |  |                   |         |                  |   |         |  
|Lines of credit                                                                                                                                   |  | $                 | 35,816  |                  | $ | 26,366  |  
|Current maturities of long-term debt                                                                                                              |  |                   | 5,616   |                  |   | 5,624   |  
|Accounts payable                                                                                                                                  |  |                   | 155,074 |                  |   | 141,911 |  
|Accrued expenses and other liabilities                                                                                                            |  |                   | 16,797  |                  |   | 19,650  |  
|Due to related parties                                                                                                                            |  |                   | 49      |                  |   | 51      |  
|                                                                                                                                                  |  |                   |         |                  |   |         |  
|Total current liabilities                                                                                                                         |  |                   | 213,352 |                  |   | 193,602 |  
|Long-term debt, net of current portion                                                                                                            |  |                   | 106,333 |                  |   | 111,600 |  
|Other long-term liabilities                                                                                                                       |  |                   | 3,709   |                  |   | 3,705   |  
|                                                                                                                                                  |  |                   |         |                  |   |         |  
|Total liabilities                                                                                                                                 |  |                   | 323,394 |                  |   | 308,907 |  
|Commitments and contingencies                                                                                                                     |  |                   |         |                  |   |         |  
|                                                                                                                                                  |  |                  
|Shareholders Equity                                                                                                                              |  |                   |         |                  |   |         |  
|Common stock, voting $0.01 par value, 140,000 shares authorized; 100,000 shares issued and outstanding                                            |  |                   | 1       |                  |   | 1       |  
|Class B common stock, non-voting $0.01 par value, 10,000 shares authorized; 2,182 shares issued and outstanding                                   |  |                   |        |                  |   |        |  
|Additional paid in capital                                                                                                                        |  |                   | 21,054  |                  |   | 20,825  |  
|Retained earnings                                                                                                                                 |  |                   | 32,235  |                  |   | 33,278  |  
|Accumulated other comprehensive income (loss)                                                                                                     |  |                   | 387     |                  |   | (3      | )
|                                                                                                                                                  |  |                   |         |                  |   |         |  
|Total shareholders equity                                                                                                                        |  |                   | 53,677  |                  |   | 54,101  |  
|                                                                                                                                                  |  |                   |         |                  |   |         |  
|Total liabilities and shareholders equity                                                                                                        |  | $                 | 377,071 |                  | $ | 363,008 |  
|                                                                                                                                                  |  |                   |         |                  |   |         |  

See accompanying notes to condensed consolidated financial statements.



3



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INTCOMEX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in 000s,
except share data)

(Unaudited)



|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                                                                                   |  | Three Months EndedSeptember 30, |         |   | Nine Months EndedSeptember 30, |  
|                                                                                                                                                   |  | 2008                            |         |   | 2007                           |   |         | 2008 |  |   | 2007    |  
|Revenue                                                                                                                                            |  | $                               | 273,884 |   |                                | $ | 267,975 |      |  | $ | 855,204 |   |  | $ | 766,122 |  
|Cost of revenue                                                                                                                                    |  |                                 | 248,331 |   |                                |   | 241,270 |      |  |   | 775,833 |   |  |   | 689,315 |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Gross profit                                                                                                                                       |  |                                 | 25,553  |   |                                |   | 26,705  |      |  |   | 79,371  |   |  |   | 76,807  |  
|Operating expenses                                                                                                                                 |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Selling, general and administrative                                                                                                                |  |                                 | 20,069  |   |                                |   | 16,533  |      |  |   | 59,090  |   |  |   | 51,787  |  
|Depreciation and amortization                                                                                                                      |  |                                 | 1,004   |   |                                |   | 868     |      |  |   | 2,878   |   |  |   | 2,545   |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Total operating expenses                                                                                                                           |  |                                 | 21,073  |   |                                |   | 17,401  |      |  |   | 61,968  |   |  |   | 54,332  |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Operating income                                                                                                                                   |  |                                 | 4,480   |   |                                |   | 9,304   |      |  |   | 17,403  |   |  |   | 22,475  |  
|Other expense (income)                                                                                                                             |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Interest expense                                                                                                                                   |  |                                 | 4,421   |   |                                |   | 4,883   |      |  |   | 12,863  |   |  |   | 13,328  |  
|Interest income                                                                                                                                    |  |                                 | (282    | ) |                                |   | (187    | )    |  |   | (795    | ) |  |   | (470    | )
|Other expense, net                                                                                                                                 |  |                                 | (24     | ) |                                |   | (316    | )    |  |   |        |   |  |   | (289    | )
|Foreign exchange loss (gain)                                                                                                                       |  |                                 | 4,416   |   |                                |   | 132     |      |  |   | 6,616   |   |  |   | (836    | )
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Total other expense                                                                                                                                |  |                                 | 8,531   |   |                                |   | 4,512   |      |  |   | 18,684  |   |  |   | 11,733  |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|(Loss) income before provision for income taxes                                                                                                    |  |                                 | (4,051  | ) |                                |   | 4,792   |      |  |   | (1,281  | ) |  |   | 10,742  |  
|(Benefit) provision for income taxes                                                                                                               |  |                                 | (605    | ) |                                |   | 562     |      |  |   | (238    | ) |  |   | 2,459   |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Net (loss) income                                                                                                                                  |  | $                               | (3,446  | ) |                                | $ | 4,230   |      |  | $ | (1,043  | ) |  | $ | 8,283   |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Net (loss) income per weighted average share of common stock, voting and Class B common stock, non-voting:                                         |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                                                                                                              |  | $                               | (33.72  | ) |                                | $ | 41.40   |      |  | $ | (10.20  | ) |  | $ | 81.06   |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                                                                                                            |  | $                               | (33.72  | ) |                                | $ | 41.40   |      |  | $ | (10.20  | ) |  | $ | 81.06   |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Weighted average number of common shares, voting and Class B common stock, non-voting, and common share equivalents used in per share
calculation: |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                                                                                                              |  |                                 | 102,182 |   |                                |   | 102,182 |      |  |   | 102,182 |   |  |   | 102,182 |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                                                                                                            |  |                                 | 102,182 |   |                                |   | 102,182 |      |  |   | 102,182 |   |  |   | 102,182 |  
|                                                                                                                                                   |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  

See accompanying notes to condensed consolidated financial statements.



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INTCOMEX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in 000s)

(Unaudited)



|                                                                                     |  |                                |         |   |      |   |         |  
|------------------------------------------------------------------------------------ |  | ------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                     |  | Nine Months EndedSeptember 30, |        
|                                                                                     |  | 2008                           |         |   | 2007 |  
|Cash flows from operating activities                                                 |  |                                |         |   |      |   |         |  
|Net (loss) income                                                                    |  | $                              | (1,043  | ) |      | $ | 8,283   |  
|Adjustments to reconcile net (loss) income to net cash used in operating activities: |  |                                |         |   |      |   |         |  
|Non-cash stock-based compensation expense                                            |  |                                | 229     |   |      |   | 119     |  
|Depreciation expense                                                                 |  |                                | 2,423   |   |      |   | 1,897   |  
|Amortization of deferred loan costs                                                  |  |                                | 1,170   |   |      |   | 1,383   |  
|Amortization of intangible assets                                                    |  |                                | 455     |   |      |   | 648     |  
|Bad debt expense                                                                     |  |                                | 2,609   |   |      |   | 1,371   |  
|Inventory obsolescence expense                                                       |  |                                | 794     |   |      |   | 1,008   |  
|Deferred income tax benefit                                                          |  |                                | (4,409  | ) |      |   | (2,595  | )
|(Gain) loss on sale of property and equipment, net                                   |  |                                | (31     | ) |      |   | 26      |  
|Change in operating assets and liabilities, net of assets acquired:                  |  |                                |         |   |      |   |         |  
|Decrease (increase) in:                                                              |  |                                |         |   |      |   |         |  
|Trade accounts receivable                                                            |  |                                | 2,600   |   |      |   | (30,990 | )
|Inventories                                                                          |  |                                | (19,071 | ) |      |   | (12,773 | )
|Prepaid expenses and other assets                                                    |  |                                | (4,227  | ) |      |   | (4,578  | )
|Due from related parties                                                             |  |                                | 766     |   |      |   |        |  
|Increase (decrease) in:                                                              |  |                                |         |   |      |   |         |  
|Accounts payable                                                                     |  |                                | 13,163  |   |      |   | 20,714  |  
|Accrued expenses and other liabilities                                               |  |                                | (2,701  | ) |      |   | 938     |  
|                                                                                     |  |                                |         |   |      |   |         |  
|Net cash used in operating activities                                                |  |                                | (7,273  | ) |      |   | (14,549 | )
|                                                                                     |  |                               
|Cash flows from investing activities                                                 |  |                                |         |   |      |   |         |  
|Purchases of property and equipment                                                  |  |                                | (4,876  | ) |      |   | (5,632  | )
|Proceeds from disposition of assets                                                  |  |                                | 49      |   |      |   | 26      |  
|Notes receivable and other                                                           |  |                                | 109     |   |      |   | 525     |  
|                                                                                     |  |                                |         |   |      |   |         |  
|Net cash used in investing activities                                                |  |                                | (4,718  | ) |      |   | (5,081  | )
|                                                                                     |  |                               
|Cash flows from financing activities                                                 |  |                                |         |   |      |   |         |  
|Borrowings (payments) under lines of credit, net                                     |  |                                | 9,450   |   |      |   | 15,471  |  
|Borrowings under long-term debt                                                      |  |                                | 36      |   |      |   | 2,301   |  
|Payments of long-term debt                                                           |  |                                | (5,311  | ) |      |   | (5,345  | )
|                                                                                     |  |                                |         |   |      |   |         |  
|Net cash provided by financing activities                                            |  |                                | 4,175   |   |      |   | 12,427  |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents        |  |                                | 586     |   |      |   | (51     | )
|                                                                                     |  |                                |         |   |      |   |         |  
|Net decrease in cash and cash equivalents                                            |  |                                | (7,230  | ) |      |   | (7,254  | )
|Cash and cash equivalents, beginning of period                                       |  | $                              | 29,399  |   |      | $ | 20,574  |  
|                                                                                     |  |                                |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                             |  | $                              | 22,169  |   |      | $ | 13,320  |  
|                                                                                     |  |                                |         |   |      |   |         |  
|Supplemental disclosure of non-cash flow information                                 |  |                                |         |   |      |   |         |  
|Property and equipment acquired through financing                                    |  | $                              | 14      |   |      | $ | 1,875   |  

See accompanying notes to condensed consolidated financial statements.



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INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s,
except per share data)

(Unaudited)

Note 1. Organization and Basis of Presentation

Nature of Operations

Intcomex, Inc. (Intcomex) is a United States-based value-added international distributor of computer information technology (IT)
products to Latin America and the Caribbean. Intcomex distributes computer equipment, components, peripherals, software, computer systems, accessories, networking products and digital consumer electronics. Intcomex offers single source purchasing to
customers by providing an in-stock selection of products from vendors, including the worlds leading IT product manufacturers.

Organization

The accompanying unaudited condensed consolidated financial statements include the accounts of Intcomex and its subsidiaries (collectively
referred to herein as the Company) including the accounts of Intcomex Holdings, LLC (parent company of Software Brokers of America, Inc. (SBA), IXLA Holdings, Ltd. (IXLA)), IFC International, LLC (IFC)
and Intcomex International Holdings Cooperatief U.A. (Coop), a Dutch company. IXLA is the holding company of 14 separate subsidiaries located in Central America, South America, and the Caribbean. IFC and Coop are the parent companies of
Intcomex Holdings SPC-1, LLC (parent company of Centel, S.A. de C.V. (Centel), a dually formed company in the United States and Mexico).

Use of Accounting Estimates

We prepare our unaudited condensed consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America (U.S. GAAP). The principles require us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses, cash flows and the related footnote disclosures during the period. On an on-going basis, we review and evaluate our estimates
and assumptions, including, but not limited to, those that relate to the realizable value of accounts receivable, inventories, identifiable intangible assets, goodwill and other long-lived assets, income taxes and contingencies. Actual results could
differ from these estimates.

Principles of Consolidation

These interim financial statements have been prepared in conformity with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X, pursuant to the rules and regulations of the
United States Securities and Exchange Commission (SEC). Accordingly, they do not include certain information and disclosures normally required for comprehensive annual consolidated financial statements. Therefore, the condensed
consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2007, included in the Companys Annual Report on Form 10-K filed with
the SEC on March 31, 2008 (Annual Report). The results of operations for the three and nine months ended September 30, 2008, may not be indicative of the results of operations that can be expected for the full year.

In managements opinion, the accompanying unaudited condensed consolidated financial statements reflect all material adjustments, consisting only
of normal recurring adjustments, necessary to fairly state the financial position of the Company as of September 30, 2008, and its results of operations and its statements of cash flows for the three and nine months ended September 30,
2008 and 2007, as applicable. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements reflect the Company as the reporting entity for all periods presented.

Reclassifications

Certain reclassifications have
been made to prior period balances in order to conform to the current period presentation.

Computation of Net Income per Share

The Company reports both basic net income per share and diluted net income per share. Basic net income per share excludes dilution and is computed by
dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding during
the period. Dilutive potential common shares primarily reflect the potential dilution that could occur if stock options and other commitments to issue common stock were exercised using the treasury stock method.



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INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per
Share requires that employee equity share options, non-vested shares, and similar equity instruments granted by the Company be treated as potential common shares outstanding in computing diluted net income per share. Diluted shares outstanding
include the dilutive effect of in-the-money options which is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock
options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid in capital when the award becomes deductible are assumed to be used to
repurchase shares.

The Company has two classes of common stock: voting and Class B, non-voting (collectively referred to herein as the
Common Stock). Common stock, voting and Class B common stock, non-voting have substantially identical rights with respect to any dividends or distributions of cash or property declared on shares of common stock and rank equally as to the
right to receive proceeds on liquidation or dissolution of the Company after the payment of the Companys indebtedness. The Company uses the two-class method for calculating net income per share. Basic net (loss) income per share and diluted
net (loss) income per share of Common Stock are the same.

The following table sets forth the computation of basic and diluted net (loss)
income per weighted average share of Common Stock:



|                                                                                                       |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|------------------------------------------------------------------------------------------------------ |  | ------------------------------- | ------- | ------------------------------ | ---- | - | ------- |  | - | ------- | - |  | - | -------
|                                                                                                       |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30,
|                                                                                                       |  | 2008                            |         |                                | 2007 |   | 2008    |  |   | 2007   
|Numerator for basic and diluted net income per share of Common Stock:                                  |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Net (loss) income                                                                                      |  | $                               | (3,446  | )                              |      | $ | 4,230   |  | $ | (1,043  | ) |  | $ | 8,283  
|                                                                                                       |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Denominator:                                                                                           |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Denominator for basic net (loss) income per share of Common Stock  weighted average shares            |  |                                 | 102,182 |                                |      |   | 102,182 |  |   | 102,182 |   |  |   | 102,182
|                                                                                                       |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Effect of dilutive securities:                                                                         |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Stock options and unvested restricted stock(1)                                                         |  |                                 |        |                                |      |   |        |  |   |        |   |  |   |       
|                                                                                                       |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Denominator for diluted net (loss) income per share of Common Stock  adjusted weighted average shares |  |                                 | 102,182 |                                |      |   | 102,182 |  |   | 102,182 |   |  |   | 102,182
|                                                                                                       |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Net (loss) income per share of Common Stock:                                                           |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Basic                                                                                                  |  | $                               | (33.72  | )                              |      | $ | 41.40   |  | $ | (10.20  | ) |  | $ | 81.06  
|                                                                                                       |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        
|Diluted                                                                                                |  | $                               | (33.72  | )                              |      | $ | 41.40   |  | $ | (10.20  | ) |  | $ | 81.06  
|                                                                                                       |  |                                 |         |                                |      |   |         |  |   |         |   |  |   |        



|(1) | The stock options were antidilutive during the three and nine months ended September 30, 2008 and 2007, as the fair
value was below the exercise price. The shares of restricted common stock, non-voting were antidilutive during the three and nine months ended September 30, 2008. There were no shares of restricted common stock, non-voting outstanding during
the three and nine months ended September 30, 2007.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Comprehensive Income

SFAS No. 130, Reporting Comprehensive Income establishes standards for reporting and displaying comprehensive income and its components in the
Companys consolidated financial statements. Comprehensive income is the change in equity during a period from transactions and other events and circumstances from non-owner sources, comprised of net (loss) income and other comprehensive (loss)
income. Comprehensive (loss) income consisted of the following for the periods presented:



|                                         |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|---------------------------------------- |  | ------------------------------- | ------ | - | ------------------------------ | - | ----- | ---- |  | - | ------ | - |  | - | ----- | -
|                                         |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                         |  | 2008                            |        |   | 2007                           |   |       | 2008 |  |   | 2007   |  
|Comprehensive (loss) income              |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|Net (loss) income                        |  | $                               | (3,446 | ) |                                | $ | 4,230 |      |  | $ | (1,043 | ) |  | $ | 8,283 |  
|Foreign currency translation adjustments |  |                                 | (1,364 | ) |                                |   | (211  | )    |  |   | 390    |   |  |   | (51   | )
|                                         |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|Total comprehensive (loss) income        |  | $                               | (4,810 | ) |                                | $ | 4,019 |      |  | $ | (653   | ) |  | $ | 8,232 |  
|                                         |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  



7



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



The comprehensive loss was driven primarily by operating losses and foreign currency translation
adjustments related to our operations in Mexico for the three months ended September 30, 2008, and operating losses for the nine months ended September 30, 2008. As of September 30, 2008 and December 31, 2007, accumulated other
comprehensive income (loss) included in stockholders equity totaled $387 and $(3), respectively, and consisted of cumulative foreign currency gains and losses, respectively.

Fair Value of Financial Instruments

SFAS No. 157, Fair Value Measurements(SFAS
No. 157) establishes a framework for measuring fair value and expands disclosures about fair value measurements. The carrying amounts of cash and cash equivalents, trade accounts receivable, notes and other receivables, accounts payable,
accrued expenses and other payables approximate fair value because of the short-term nature of these items. The carrying amounts of outstanding short and long-term debt approximate fair value because interest rates over the term of these financial
instruments approximate current market interest rates available to the Company.

There were no changes to our valuation methodology for
assets and liabilities measured at fair value during the three and nine months ended September 30, 2008, from our initial adoption of SFAS No. 157 on January 1, 2008. There are no assets or liabilities measured at fair value on a
recurring basis using significant observable or unobservable inputs as defined in SFAS No. 157 as of September 30, 2008. The Company will measure material non-financial assets and liabilities for which to consider for assets and
liabilities measured at fair value on a non-recurring basis as of March 31, 2009.

Note 2. Summary of Significant Accounting Policies

Our significant accounting policies are described in Note 1 to our audited consolidated financial statements included in our Annual
Report. These accounting policies have not significantly changed.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In May 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS No. 162). SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the accounting principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United
States. This statement will be effective 60 days following the SECs approval of the Public Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with GAAP. The Company is currently
evaluating the effect SFAS No. 162 will have on its consolidated results of operations, cash flows or financial condition.

In April
2008, the FASB issued FASB Staff Position FASB Statement (FSP FAS) No. 142-3, Determination of the Useful Life of Intangible Assets (FSP FAS No. 142-3). FSP FAS No. 142-3 amends the factors that should
be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. FSP FAS No. 142-3 also requires expanded
disclosure related to the determination of intangible asset useful lives, effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company is currently
evaluating the impact that the adoption of FSP FAS No. 142-3 will have on its consolidated results of operation, cash flows or financial condition.



8



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations(SFAS No. 141R). SFAS No. 141R supersedes SFAS No. 141, Business Combinations, and establishes principles and requirements as to how an acquiring entity in a business combination recognizes and measures the
identifiable assets and goodwill acquired, liabilities assumed, any controlling interest or gain from a bargain purchase in its financial statements, effective for the Company beginning the first quarter of 2009. The Company is currently evaluating
the effect SFAS No. 141R will have on its consolidated results of operations and financial condition.

In December 2007, the
FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51 (SFAS No. 160). SFAS No. 160 establishes new accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary, effective for the Company beginning the first quarter of 2009. The Company is currently evaluating the effect SFAS No. 160 will have on its consolidated
results of operations and financial condition.

Recently Adopted Accounting Pronouncements

In May 2007, the FASB published FASB Staff Position No. FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 (FIN
48-1). FIN 48-1 is an amendment to FIN 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109 (FIN 48). FIN 48-1 clarifies how an enterprise should determine whether a tax
position is effectively settled for the purpose of recognizing previously unrecognized tax benefits effective upon the initial adoption of FIN 48. This interpretation requires companies to determine whether it is more likely than not that a tax
position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. The Company adopted FIN 48 effective January 1, 2007, reviewed its tax positions taken
in accordance with FIN 48 and assessed the effect of FIN 48 on the consolidated results of operations and financial condition. In June 2008, the Company recorded a previously unrecognized income tax liability for the potential denial of deductions
taken related to one of the Companys foreign operations in the amount estimated approximately to be $0.3 million, all of which would affect the Companys income tax expense and effective tax rate. The Company did not record any income tax
penalties. The Company files tax returns in the United States (U.S.), the state of Florida and in various foreign jurisdictions in which the Company conducts business. The Internal Revenue Service (IRS) examined the 2004 and
2005 tax returns and concluded with no change to the returns. Tax year 2006 remains open for examination by the IRS. Tax years 2004, 2005 and 2006 remain open for examination by the Florida Department of Revenue.

In September 2006, the FASB issued SFAS No. 157 which defines fair value, establishes a framework for measuring fair value and expands disclosures
about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position (FSP) 157-1, Application of FASB
Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 (FSP 157-1) and FSP 157-2,
Effective Date of FASB Statement No. 157 (FSP 157-2). FSP 157-1 amends SFAS No. 157 to remove certain leasing transactions from its scope and delays the effective date of SFAS No. 157 until the
beginning of the first quarter of 2009 for all non-financial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company adopted the provisions of SFAS
No. 157 as of January 1, 2008, for financial instruments and items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Although the adoption of SFAS No. 157 did not materially impact the
consolidated results of operations and financial condition, the Company has provided the additional disclosures required in its condensed consolidated financial statements.



9



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



Note 3. Property and Equipment, Net

Property and equipment, net consisted of the following for the periods presented:



|                                         |  |                         |         |   |                        |   |        |  
|---------------------------------------- |  | ----------------------- | ------- | - | ---------------------- | - | ------ | -
|                                         |  | As ofSeptember 30, 2008 |         |   | As ofDecember 31, 2007 |  
|Property and equipment, net              |  |                         |         |   |                        |   |        |  
|Land                                     |  | $                       | 735     |   |                        | $ | 405    |  
|Building and leasehold improvements      |  |                         | 7,797   |   |                        |   | 7,147  |  
|Office furniture, vehicles and equipment |  |                         | 10,624  |   |                        |   | 8,911  |  
|Warehouse equipment                      |  |                         | 2,445   |   |                        |   | 2,487  |  
|Software                                 |  |                         | 6,628   |   |                        |   | 4,937  |  
|                                         |  |                         |         |   |                        |   |        |  
|Total property and equipment             |  |                         | 28,229  |   |                        |   | 23,887 |  
|Less accumulated depreciation            |  |                         | (10,723 | ) |                        |   | (8,828 | )
|                                         |  |                         |         |   |                        |   |        |  
|Total property and equipment, net        |  | $                       | 17,506  |   |                        | $ | 15,059 |  
|                                         |  |                         |         |   |                        |   |        |  

Property and equipment, net included $3,152 and $3,863 of capitalized leases at September 30,
2008 and December 31, 2007, respectively. There was no interest expense capitalized to property and equipment during the three and nine months ended September 30, 2008 and 2007.

Note 4. Identifiable Intangible Assets, Net and Goodwill

Identifiable Intangible Assets, Net

Identifiable intangible assets, net consisted of the following for the periods
presented:



|                                          |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     
|----------------------------------------- |  | -------------------- | ----- | ----------------------- | - | ------ | -------------------------------------------- |  | - | ------------------ | - | --------------------- | - | ----- |  | ----
|As of September 30, 2008                  |  | Gross CarryingAmount |       | AccumulatedAmortization |   |        | CumulativeForeign CurrencyTranslation Effect |  |   | Net CarryingAmount |   | Useful Life(in years)
|Identifiable intangible assets, net       |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     
|Customer relationships                    |  | $                    | 3,630 |                         | $ | (1,210 | )                                            |  | $ | (42                | ) |                       | $ | 2,378 |  | 10.0
|Tradenames                                |  |                      | 1,080 |                         |   | (900   | )                                            |  |   | (3                 | ) |                       |   | 177   |  | 3.5 
|Non-compete agreements                    |  |                      | 730   |                         |   | (730   | )                                            |  |   |                   |   |                       |   |      |  | 3.0 
|Patents  T.G.M. S.A.  Uruguay           |  |                      | 5     |                         |   | (4     | )                                            |  |   |                   |   |                       |   | 1     |  |     
|                                          |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     
|Total identifiable intangible assets, net |  | $                    | 5,445 |                         | $ | (2,844 | )                                            |  | $ | (45                | ) |                       | $ | 2,556 |  |     
|                                          |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     



|                                          |  |                      |       |                         |   |        |                                              |  |                    |  |                       |       |  |     
|----------------------------------------- |  | -------------------- | ----- | ----------------------- | - | ------ | -------------------------------------------- |  | ------------------ |  | --------------------- | ----- |  | ----
|As of December 31, 2007                   |  | Gross CarryingAmount |       | AccumulatedAmortization |   |        | CumulativeForeign CurrencyTranslation Effect |  | Net CarryingAmount |  | Useful Life(in years)
|Identifiable intangible assets, net       |  |                      |       |                         |   |        |                                              |  |                    |  |                       |       |  |     
|Customer relationships                    |  | $                    | 3,630 |                         | $ | (938   | )                                            |  |                   |  | $                     | 2,692 |  | 10.0
|Tradenames                                |  |                      | 1,080 |                         |   | (820   | )                                            |  |                   |  |                       | 260   |  | 3.5 
|Non-compete agreements                    |  |                      | 730   |                         |   | (628   | )                                            |  |                   |  |                       | 102   |  | 3.0 
|Patents TGM S.A.  Uruguay               |  |                      | 5     |                         |   | (3     | )                                            |  |                   |  |                       | 2     |  |     
|                                          |  |                      |       |                         |   |        |                                              |  |                    |  |                       |       |  |     
|Total identifiable intangible assets, net |  | $                    | 5,445 |                         | $ | (2,389 | )                                            |  |                   |  | $                     | 3,056 |  |     
|                                          |  |                      |       |                         |   |        |                                              |  |                    |  |                       |       |  |     

On June 23, 2005, the Company acquired $5,440 in identifiable intangible assets of Centel,
including $3,630 for acquired customer relationships with a 10 year useful life, $1,080 for tradenames with a 3.5 year weighted average useful life and $730 for non-compete agreements with a three year useful life.



10



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets. The goodwill balance was $34,106 and $34,257 as of September 30, 2008 and December 31, 2007, respectively. The carrying amount of the
goodwill decreased by $528 and $151, respectively, for the three and nine months ended September 30, 2008, due to the foreign currency translation impact of the Mexican Peso. There were no changes in the carrying amount of the goodwill as of
December 31, 2007.

Note 5. Lines of Credit

The Company has lines of credit, short-term overdraft and credit facilities with various financial institutions in the countries in which the Company conducts business. Many of the in-country operations also have
limited credit facilities. These credit facilities fall into three categories: asset-based financing facilities, letter of credit and performance bond facilities, and unsecured revolving credit facilities and lines of credit. The lines of credit are
available sources of short-term liquidity for the Company.

Lines of credits consisted of the following for the periods presented:



|                                  |  |                         |        |                        |   |       
|--------------------------------- |  | ----------------------- | ------ | ---------------------- | - | ------
|                                  |  | As ofSeptember 30, 2008 |        | As ofDecember 31, 2007
|Lines of credit                   |  |                         |        |                        |   |       
|SBA  Miami                       |  | $                       | 26,789 |                        | $ | 20,518
|Intcomex Peru S.A.C               |  |                         | 2,339  |                        |   | 1,179 
|TGM S.A.  Uruguay                |  |                         | 2,098  |                        |   | 3,464 
|Intcomex de Guatemala, S.A.       |  |                         | 1,700  |                        |   |      
|Intcomex Colombia, LTDA           |  |                         | 1,168  |                        |   | 309   
|Intcomex de Ecuador, S.A.         |  |                         | 1,000  |                        |   | 700   
|Computación Monrenca Panama, S.A. |  |                         | 656    |                        |   |      
|Other                             |  |                         | 66     |                        |   | 196   
|                                  |  |                         |        |                        |   |       
|Total lines of credit             |  | $                       | 35,816 |                        | $ | 26,366
|                                  |  |                         |        |                        |   |       

As of September 30, 2008 and December 31, 2007, the total amounts available under the
credit facilities were $10,757 and $19,495, respectively. As of September 30, 2008 and December 31, 2007, the total amounts outstanding under the credit facilities were $35,816 and $26,366, respectively, of which $26,789 and $20,518,
respectively, were outstanding under the Miami credit facility and $9,027 and $5,848, respectively, were outstanding under the in-country credit facilities. The increase in the outstanding balance during the nine months ended September 30,
2008, is primarily attributed to the increased borrowing by our subsidiaries to meet local working capital requirements, particularly borrowings related to our operations in Peru, Colombia and Guatemala, partially offset by a reduction in the
borrowing requirements related to our operations in Uruguay.

SBA  Miami

SBA has a $30,000 revolving credit facility with Comerica Bank including $1,400 of letter of credit commitments, and a capital expenditures limit of
$1,000. Borrowings against the facility bear interest at the U.S. prime lending rate (5.00% at September 30, 2008) or Eurodollar rate plus 1.9% and are secured on a first priority basis with all the assets of SBA. Interest is due monthly and
the facility has a maturity date of August 25, 2010. Amounts borrowed under the facility may be repaid and re-borrowed at any time during the term of the agreement. Borrowing capacity is established monthly based on certain parameters
established under the agreement. Advances under the facility are provided based on 85.0% of eligible domestic accounts receivable and 67.5% of eligible foreign accounts receivable plus 60.0% of eligible domestic inventory, less any credit facility
reserves. The credit facility contains certain financial and non-financial covenants, including but not limited to, maintenance of a minimum level of tangible effective net worth, as defined and annual limitations on capital expenditures.

As of September 30, 2008 and December 31, 2007, SBAs outstanding draws against the revolving credit facility were $24,333
and $14,511, respectively, and outstanding checks issued in excess of bank balances were $2,456 and $6,007, respectively. Based on collateral limitations, the remaining amounts available under the revolving credit facility were $5,667 and $15,489,
respectively, as of September 30, 2008 and December 31, 2007.



11



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



On November 13, 2008, SBA obtained a waiver to its credit agreement for the minimum tangible
effective net worth and senior debt to tangible effective net worth ratio under its credit agreement with Comerica Bank, as a result of SBAs default of its minimum tangible effective net worth and senior debt to tangible effective net worth
ratio under its credit agreement as of September 30, 2008. SBA also obtained an amendment to its credit agreement increasing the cap of the inventory portion on the borrowing base from $12,500 to $14,000, amending the borrowing rate to the
Eurodollar rate plus 3.5% and the maturity date to January 1, 2010, and requiring increased financial reporting disclosures made to Comerica Bank on a continual basis.

As of September 30, 2008, SBA was in compliance with all other financial covenants.

On August 14, 2008, SBA obtained a waiver to its credit agreement for the minimum tangible effective net worth and senior debt to tangible effective
net worth ratio under its credit agreement with Comerica Bank as a result of SBAs default of its minimum tangible effective net worth and senior debt to tangible effective net worth ratio under its credit agreement as of June 30, 2008.
Under the agreement, SBA is required to maintain a minimum tangible effective net worth of $25,000 and a senior debt to tangible effective net worth ratio of not more than 6.0 to 1.0.

On May 14, 2008, SBA obtained a waiver to its credit agreement with Comerica Bank for the minimum tangible effective net worth and the senior debt
to tangible effective net worth ratio as of March 31, 2008. SBA also obtained an amendment to its credit agreement decreasing the minimum tangible effective net worth of $25,000 to $20,000, effective for the quarters ended September 30,
2008 and March 31, 2009, requiring SBA to maintain a senior debt to tangible effective net worth ratio of not more than 2.5 to 1.0, and requiring SBA to maintain a minimum tangible effective net worth of $25,000 for the quarters ended
June 30, 2008, December 31, 2008, June 30, 2009, and for each quarter end thereafter. The amendment required SBAs senior debt to tangible effective net worth ratio to be not more than 5.0 to 1.0, effective as of
December 31, 2008, and December 31 of each year thereafter. The amendment increased SBAs senior debt to tangible effective net worth ratio to not more than 6.0 to 1.0, effective as of June 30, 2008, September 30, 2008,
March 31, 2009, and June 30, September 30 and March 31 of each year thereafter. Under the amendment, borrowings against the facility bore interest at the U.S. prime lending rate (5.00% at June 30, 2008) or Eurodollar
rate plus 2.4%.

On March 28, 2008, SBA obtained from Comerica Bank an amendment to its credit agreement for the definition of the
tangible effective net worth and to increase the senior debt to tangible effective net worth ratio to not more than 3.5 to 1.0, effective for the quarters ended March 31, 2008 and June 30, 2008, and not more than 3.0 to 1.0 thereafter. In
addition, SBA obtained a waiver to its credit agreement for the senior debt to tangible effective net worth ratio as of December 31, 2007.

Intcomex Peru S.A.C.

Intcomex Peru S.A.C. (Intcomex Peru) has four lines of credit with two financial
institutions totaling $3,180 and $1,480 as of September 30, 2008 and December 31, 2007, respectively. The lines are collateralized with a guarantee from Intcomex Holdings, LLC, and carry interest rates ranging from 5.0% to 11.0%. As of
September 30, 2008 and December 31, 2007, Intcomex Peru had outstanding balances under the lines of credit of $2,339 and $1,179, respectively.

TGM S.A.  Uruguay

TGM S.A. Uruguay (Intcomex Uruguay) has three lines of credit with local
financial institutions totaling $3,150 and $3,550 as of September 30, 2008 and December 31, 2007, respectively. The lines are collateralized with a guarantee from Intcomex Holdings, LLC. As of September 30, 2008 and December 31,
2007, Intcomex Uruguay had outstanding balances under the lines of credit of $2,098 and $3,464, respectively. The lines of credit carry interest rates ranging from 7.0% to 8.0% and expire on April 30, 2009.

Intcomex de Guatemala, S.A.

Intcomex de Guatemala,
S.A. (Intcomex Guatemala) has one line of credit with a local financial institution in the amount of $5,700 and $2,000 as of September 30, 2008 and December 31, 2007, respectively. The line carries an interest rate of 7.3% and
matures on January 10, 2009. As of September 30, 2008, Intcomex Guatemala had outstanding balances under the line of credit of $1,700. As of December 31, 2007, Intcomex Guatemala did not have an outstanding balance under the line of
credit.

Intcomex Colombia, LTDA

Intcomex Colombia, LTDA (Intcomex Colombia) has three lines of credit with local financial institutions carrying interest rates ranging from 13.5% to 28.0% and an unsecured revolving line of credit for cash overdrafts with a
local financial institution carrying an interest rate of 24.0%. As of September 30, 2008 and December 31, 2007, Intcomex Colombia had outstanding balances under the lines of credit of $1,168 and $205, respectively, and a cash overdraft
balance of $104 at December 31, 2007. As of September 30, 2008, Intcomex Colombia did not have an outstanding cash overdraft balance.



12



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



Intcomex de Ecuador, S.A.

Intcomex de Ecuador, S.A. (Intcomex Ecuador) has two lines of credit with local financial institutions carrying interest rates of 9.3% and 9.4%, respectively. The lines of credit have expiration dates of
November 4, 2008 and October 24, 2008, respectively. As of September 30, 2008 and December 31, 2007, Intcomex Ecuador had an outstanding balance under these lines of credit of $1,000 and $700, respectively.

Computación Monrenca Panama, S.A.

Computación Monrenca Panama, S.A. (Intcomex Panama) had a line of credit with a local financial institution carrying an interest rate ranging from 7% to 9%. The line of credit matures on September 30, 2009. As of
September 30, 2008, the Company had an outstanding balance of $656. As of December 31, 2007, the Company did not have an outstanding balance under this line of credit.

Note 6. Long-Term Debt, Net

Long-term debt consisted of the following for the periods presented:



|                                                           |  |                         |         |   |                        |   |         |  
|---------------------------------------------------------- |  | ----------------------- | ------- | - | ---------------------- | - | ------- | -
|                                                           |  | As ofSeptember 30, 2008 |         |   | As ofDecember 31, 2007 |  
|Long-term debt, net of current portion                     |  |                         |         |   |                        |   |         |  
|Intcomex, Inc. 113/4%
Second Priority Senior Secured Notes |  | $                       | 109,613 |   |                        | $ | 114,481 |  
|SBA  Miami capital lease                                  |  |                         | 1,204   |   |                        |   | 1,378   |  
|Intcomex Peru collateralized notes                         |  |                         | 757     |   |                        |   | 817     |  
|Other, including various capital leases                    |  |                         | 375     |   |                        |   | 548     |  
|                                                           |  |                         |         |   |                        |   |         |  
|Total long-term debt                                       |  |                         | 111,949 |   |                        |   | 117,224 |  
|Current maturities of long-term debt                       |  |                         | (5,616  | ) |                        |   | (5,624  | )
|                                                           |  |                         |         |   |                        |   |         |  
|Total long-term debt, net of current portion               |  | $                       | 106,333 |   |                        | $ | 111,600 |  
|                                                           |  |                         |         |   |                        |   |         |  

On August 25, 2005, the Company
consummated a high yield debt offering of $120,000 in aggregate principal amount of 113/4% Second Priority Senior Secured Notes,
due January 15, 2011 (the 113/4% Senior Notes). The 113/4% Senior Notes are secured with 100.0% of the common shares of Holdings and SPC-I, 65.0% of the common shares of IXLA, with a second priority lien on the assets of SBA. In August
2005, the Board of Directors declared and approved the payment of a $20,000 dividend to shareholders of record on August 25, 2005, using a portion of the proceeds from our $120,000 113/4% Senior Notes offering.

On December 14, 2006, the Company completed the exchange of 100.0% of the outstanding
principal of the 113/4% Senior Notes for SEC registered publicly tradable notes that have substantially identical terms and
conditions as the initial Notes. On or after January 15, 2007, the Company was eligible to redeem a portion or all of the 113/4% Senior Notes. On August 14, and 15, 2007, the Company repurchased a total of $5,000 of its 113/4% Senior Notes
in connection with its mandatory sinking fund redemption requirement and subsequently retired the repurchased 113/4% Senior
Notes. As of September 30, 2008 and December 31, 2007, $109,613 and $114,481, respectively, of the 113/4% Senior Notes
remained outstanding.

On April 30, 2007, SBA entered into a lease agreement with Comerica Bank in
the principal amount of $1,505 for the acquisition of the Miami office and warehouse equipment. Interest is due monthly at 1.96% of the total equipment costs and all outstanding amounts are due April 30, 2012. As of September 30, 2008 and
December 31, 2007, $1,204 and $1,378, respectively, remained outstanding under the lease agreement.

On March 13, 2008, the Company purchased $1,000 of its 113/4% Senior Notes in an arms
length transaction, at 98.25% of face value plus accrued interest in connection with its mandatory sinking fund redemption requirement. On April 9, 2008, the Company purchased $1,000 of its 113/4% Senior Notes at 96.25% of face value plus accrued interest and an additional $1,000 on April 25, 2008, at 96.5% of face value plus accrued interest in arms
length transactions in connection with its mandatory sinking fund redemption requirement. On June 24, 2008, the Company purchased $2,000 of its 113/4% Senior Notes in arms length transactions at 90.00% of face value plus accrued interest in connection with its mandatory sinking fund redemption requirement. The Company recognized a gain of $290 on the
redemption of the 113/4% Senior Notes for the nine months ended September 30, 2008, which is included as a reduction to
interest expense in the condensed consolidated statement of operations.



13



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



Note 7. Income Taxes

Income tax provision consisted of the following for the periods presented:



|                                     |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |        |  
|------------------------------------ |  | ------------------------------- | ------ | - | ------------------------------ | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                     |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                     |  | 2008                            |        |   | 2007                           |   |       | 2008 |  |   | 2007   |  
|Income tax provision                 |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |        |  
|Current expense                      |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |        |  
|Federal and state                    |  | $                               | 42     |   |                                | $ | 5     |      |  | $ | 63     |   |  | $ | 23     |  
|Foreign                              |  |                                 | 1,174  |   |                                |   | 1,495 |      |  |   | 4,108  |   |  |   | 5,031  |  
|                                     |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |        |  
|Total current expense                |  |                                 | 1,216  |   |                                |   | 1,500 |      |  |   | 4,171  |   |  |   | 5,054  |  
|Deferred benefit                     |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |        |  
|Federal and state                    |  |                                 | (1,123 | ) |                                |   | (572  | )    |  |   | (3,370 | ) |  |   | (1,734 | )
|Foreign                              |  |                                 | (698   | ) |                                |   | (366  | )    |  |   | (1,039 | ) |  |   | (861   | )
|                                     |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |        |  
|Total deferred benefit               |  |                                 | (1,821 | ) |                                |   | (938  | )    |  |   | (4,409 | ) |  |   | (2,595 | )
|                                     |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |        |  
|Total income tax (benefit) provision |  | $                               | (605   | ) |                                | $ | 562   |      |  | $ | (238   | ) |  | $ | 2,459  |  
|                                     |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |        |  

A reconciliation of the statutory federal income tax rate and effective rate as a percentage of
income before provision for income taxes consisted of the following for the periods presented:



|                                                       |  |                                 |        |   |                                |     |   |      |   |        |   |  |     |      |  |   |        |   |  |      |   |  |   |        |   |  |    |  
|------------------------------------------------------ |  | ------------------------------- | ------ | - | ------------------------------ | --- | - | ---- | - | ------ | - |  | --- | ---- |  | - | ------ | - |  | ---- | - |  | - | ------ | - |  | -- | -
|                                                       |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |    
|                                                       |  | 2008                            |        |   | %                              |     |   | 2007 |   |        | % |  |     | 2008 |  |   | %      |   |  | 2007 |   |  | % |       
|Effective tax rate                                     |  |                                 |        |   |                                |     |   |      |   |        |   |  |     |      |  |   |        |   |  |      |   |  |   |        |   |  |    |  
|(Loss) income before provision for income taxes:       |  |                                 |        |   |                                |     |   |      |   |        |   |  |     |      |  |   |        |   |  |      |   |  |   |        |   |  |    |  
|U.S.                                                   |  | $                               | (3,676 | ) |                                |     |   |      | $ | (1,032 | ) |  |     |      |  | $ | (9,943 | ) |  |      |   |  | $ | (8,178 | ) |  |    |  
|Foreign                                                |  |                                 | (375   | ) |                                |     |   |      |   | 5,824  |   |  |     |      |  |   | 8,662  |   |  |      |   |  |   | 18,920 |   |  |    |  
|                                                       |  |                                 |        |   |                                |     |   |      |   |        |   |  |     |      |  |   |        |   |  |      |   |  |   |        |   |  |    |  
|Income before tax (benefit) provision for income taxes |  | $                               | (4,051 | ) |                                |     |   |      | $ | 4,792  |   |  |     |      |  | $ | (1,281 | ) |  |      |   |  | $ | 10,742 |   |  |    |  
|                                                       |  |                                 |        |   |                                |     |   |      |   |        |   |  |     |      |  |   |        |   |  |      |   |  |   |        |   |  |    |  
|Tax at statutory rate                                  |  | $                               | (1,376 | ) |                                | (34 | ) |      | $ | 1,630  |   |  | 34  |      |  | $ | (436   | ) |  | (34  | ) |  | $ | 3,652  |   |  | 34 |  
|State income taxes, net of federal income tax benefit  |  |                                 | (172   | ) |                                | (4  | ) |      |   | (97    | ) |  | (2  | )    |  |   | (567   | ) |  | (44  | ) |  |   | (266   | ) |  | (2 | )
|Effect of tax rates on non-U.S. operations             |  |                                 | 901    |   |                                | 22  |   |      |   | (965   | ) |  | (20 | )    |  |   | 702    |   |  | 55   |   |  |   | (904   | ) |  | (8 | )
|Change in valuation allowance                          |  |                                 | 42     |   |                                | 1   |   |      |   | (6     | ) |  |    |      |  |   | 63     |   |  | 5    |   |  |   | (23    | ) |  |   |  
|                                                       |  |                                 |        |   |                                |     |   |      |   |        |   |  |     |      |  |   |        |   |  |      |   |  |   |        |   |  |    |  
|Effective tax rate                                     |  | $                               | (605   | ) |                                | (15 | ) |      | $ | 562    |   |  | 12  |      |  | $ | (238   | ) |  | (18  | ) |  | $ | 2,459  |   |  | 23 |  
|                                                       |  |                                 |        |   |                                |     |   |      |   |        |   |  |     |      |  |   |        |   |  |      |   |  |   |        |   |  |    |  

The effective tax rate for the three and nine months ended September 30, 2008 was
(15%) and (18%), respectively, as compared to 12% and 23% for the three and nine months ended September 30, 2007, respectively. The decline in the effective tax rate was primarily due to lower taxable earnings primarily in Argentina,
Chile, Colombia and Mexico.



14



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



The Companys net deferred tax asset was attributable to the following for the periods
presented:



|                                |  |                         |        |   |                        |   |        |  
|------------------------------- |  | ----------------------- | ------ | - | ---------------------- | - | ------ | -
|                                |  | As ofSeptember 30, 2008 |        |   | As ofDecember 31, 2007 |  
|Deferred tax asset              |  |                         |        |   |                        |   |        |  
|Current asset                   |  |                         |        |   |                        |   |        |  
|Allowance for doubtful accounts |  | $                       | 961    |   |                        | $ | 495    |  
|Inventories                     |  |                         | 861    |   |                        |   | 774    |  
|Accrued expense                 |  |                         | 235    |   |                        |   | 338    |  
|Tax goodwill                    |  |                         | 298    |   |                        |   | 295    |  
|                                |  |                         |        |   |                        |   |        |  
|Total current asset             |  |                         | 2,355  |   |                        |   | 1,902  |  
|Non-current asset               |  |                         |        |   |                        |   |        |  
|Tax goodwill                    |  |                         | 926    |   |                        |   | 1,111  |  
|Net operating loss              |  |                         | 10,166 |   |                        |   | 6,657  |  
|Taxes                           |  |                         | 888    |   |                        |   | 343    |  
|Valuation allowance             |  |                         | (632   | ) |                        |   | (569   | )
|                                |  |                         |        |   |                        |   |        |  
|Total non-current asset         |  |                         | 11,348 |   |                        |   | 7,542  |  
|                                |  |                         |        |   |                        |   |        |  
|Total deferred tax asset        |  | $                       | 13,703 |   |                        | $ | 9,444  |  
|                                |  |                         |        |   |                        |   |        |  
|Deferred tax liability          |  |                         |        |   |                        |   |        |  
|Current liability               |  |                         |        |   |                        |   |        |  
|Inventories                     |  | $                       | (427   | ) |                        | $ | (414   | )
|                                |  |                         |        |   |                        |   |        |  
|Total current liability         |  |                         | (427   | ) |                        |   | (414   | )
|Non-current liability           |  |                         |        |   |                        |   |        |  
|Fixed assets                    |  |                         | (947   | ) |                        |   | (649   | )
|Amortizable intangible assets   |  |                         | (781   | ) |                        |   | (872   | )
|Inventories                     |  |                         | (291   | ) |                        |   | (661   | )
|                                |  |                         |        |   |                        |   |        |  
|Total non-current liability     |  |                         | (2,019 | ) |                        |   | (2,182 | )
|                                |  |                         |        |   |                        |   |        |  
|Total deferred tax liability    |  |                         | (2,446 | ) |                        |   | (2,596 | )
|                                |  |                         |        |   |                        |   |        |  
|Net deferred tax asset          |  | $                       | 11,257 |   |                        | $ | 6,848  |  
|                                |  |                         |        |   |                        |   |        |  

As of September 30, 2008, the balance of SBAs tax goodwill was $3,117. SBA recorded tax
goodwill of approximately $9,800 in July 1998, which is being amortized for tax purposes over 15 years. SBA established a deferred tax asset of $262 for foreign withholding taxes paid in El Salvador during 2005. Intcomex Colombia has a $274 deferred
tax asset related to a net operating loss (NOL) carry forward. Management established a $250 valuation allowance against this deferred tax asset pending Intcomex Colombias further growth in taxable income. Colombia allows for an
eight year carry forward on NOLs, which expires in 2013.

As of September 30, 2008, the Companys U.S. and state of Florida NOLs
resulted in a deferred tax asset of $8,786, which will begin to expire in 2026. No valuation allowance has been recorded against this NOL, as management believes it will be fully realized.

The undistributed earnings in foreign subsidiaries are permanently invested abroad and will not be repatriated to the U.S. in the foreseeable future. In
accordance with Accounting Principles Board Opinion No. 23, Accounting for Income TaxesSpecial Areas,because those earnings are considered to be indefinitely reinvested, no U.S. federal or state deferred income taxes have been
provided thereon. Upon distribution of those earnings, in the form of dividends or otherwise, we would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign
countries in which we operate. Because of the availability of U.S. foreign tax credits, it is not practicable to determine the U.S. foreign income tax liability that would be payable if such earnings were not reinvested indefinitely.

Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation No. (FIN) 48-1, Definition of Settlement in FASB
Interpretation No. 48 (FIN 48-1), an amendment to FIN 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109 (FIN 48), which prescribes a comprehensive model for
the financial statement, recognition, measurement, classification and disclosure of uncertain tax positions.



15



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



The Company files tax returns in the U.S., the state of Florida and in various foreign jurisdictions
in which the Company conducts business throughout Latin American and the Caribbean. The IRS examined the 2004 and 2005 tax returns and concluded with no change to the returns. Tax year 2006 remains open for examination by the IRS. Tax years 2004,
2005 and 2006 remain open for examination by the Florida Department of Revenue.

The Company is subject to periodic audits by foreign,
domestic and state tax authorities. By statute, the Companys U.S. federal returns are subject to examination by the IRS for fiscal years 2005 through 2007. With few exceptions, federal returns for fiscal years 2004 through 2007 remain open to
examination by state tax authorities. We believe the Companys accruals for tax liabilities are adequate for all open fiscal years based upon an assessment of factors, including but not limited to, historical experience and related tax law
interpretations. We do not anticipate that the total amount of unrecognized tax benefits related to any particular tax position will change significantly within the next 12 months.

In June 2008, the Company recorded a previously unrecognized income tax liability for the potential denial of deductions taken related to one of the
Companys foreign operations in the amount estimated to be approximately $300, all of which would affect the Companys income tax expense and effective tax rate. The Company classifies tax liabilities that are expected to be paid within
the current year, if any, as current income tax liabilities and all other uncertain tax positions as non-current income tax liabilities. The Companys continuing practice is to recognize interest and penalties related to income tax matters in
income tax expense. In addition, the Company recorded a liability in the amount of $100 for accrued interest related to income taxes. The Company did not record any income tax penalties.

Note 8. Stock-Based Compensation

The Company recognizes stock-based compensation expense under the
provisions of SFAS No. 123R, Share-Based Payment (revised 2004) (SFAS No. 123R) for the stock-based compensation plan utilizing the modified prospective method. Under SFAS No. 123R, compensation cost is recognized
for any awards issued, modified, repurchased, or canceled after January 1, 2006. All stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense in earnings over the requisite
service period.

On June 30, 2008, our shareholders approved the issuance of 73 restricted shares of common stock, non-voting, with a
three year cliff vesting period, to Mr. Henriques, as the initial equity consideration for his election to the Board of Directors and 41 restricted shares of common stock, non-voting, to each of our board members, Mr. Madden and
Ms. Miltner, as their annual equity consideration for board membership, (collectively the 2008 Restricted Stock Issuances.)

In November 2007, our Board of Directors authorized the issuance at the time of an initial public offering of 32 restricted shares of common stock, non-voting, at the initial public offering price, with a three year vesting period of
one-third per year on the annual anniversary date, to each of our board members Mr. Madden and Ms. Miltner.

On February 27,
2007, options to acquire an aggregate of approximately 1,540 shares of Class B common stock, non-voting were granted under 2007 Founders Grant Stock Option Plan (the 2007 Founders Option Plan) to certain management employees
and independent, non-employee directors. The options were granted at an exercise price of $1,077 per share, which was equal to the fair value of our common stock on the date of grant. The weighted-average grant date fair value of options granted
during the three and six months ended June 30, 2007 was $566 per share. The shares vest ratably over a three year vesting period of one-third per year on the annual anniversary date and expire 10 years from the date of grant. There were no
stock options granted during the three and nine months ended September 30, 2008. The number of options vested was 497 as of three and nine months ended September 30, 2008. The options were antidilutive during the three and nine months
ended September 30, 2008, as the fair value of the options is below the exercise price of the options. There were 155 restricted shares of common stock, non-voting granted under the 2008 Restricted Stock Issuances to certain independent,
non-employee directors on June 30, 2008. The restricted shares of common stock, non-voting were antidilutive during the three and nine months ended September 30, 2008. There were no restricted shares of common stock, non-voting outstanding
during the three and nine months ended September 30, 2007.

The compensation costs for stock-based compensation are recorded in
salaries, wages and benefits in the consolidated statements of operations as part of selling, general and administrative expenses. Total compensation costs for stock-based compensation arrangements charged against income during the three and nine
months ended September 30, 2008 were $85 and $229, respectively, of which $69 and $213, respectively, relate to the options. During the three and nine months ended September 30, 2008, $16 was charged against income related to the
restricted shares of common stock, non-voting.



16



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



Total compensation costs for stock-based compensation arrangements charged against income during the
three and nine months ended September 30, 2007 were $65 and $119, respectively, all of which related to the options. There were no compensation costs recorded for the authorization of the issuance of restricted shares of common stock,
non-voting to our Board of Directors during the three and nine months ended September 30, 2007.

As of September 30, 2008 and
December 31, 2007, there were $431 and $672, respectively, of total unrecognized compensation costs for unvested stock-based compensation arrangements related to the options issued pursuant to the 2007 Founders Option Plan. As of
September 30, 2008, there was $174 of total unrecognized compensation costs for unvested stock-based compensation arrangements related to the restricted shares of common stock, non-voting, issued pursuant to the 2008 Restricted Stock Issuances.
The unrecognized compensation costs are expected to be recognized over a weighted average period of approximately 3.0 years.

A summary of
the stock option activity under the 2007 Founders Option Plan as of September 30, 2008, and changes during the nine months ended September 30, 2008, consisted of the following:



|                              |  |                               |   |  |                                                      |       |                               |     |  
|----------------------------- |  | ----------------------------- | - |  | ---------------------------------------------------- | ----- | ----------------------------- | --- | -
|                              |  | OutstandingOptions(in
shares) |   |  | Weighted-AverageExercise Priceper Option(in dollars) |       | ExercisableOptions(in
shares) |    
|Balance at January 1, 2008    |  | 1,540                         |   |  | $                                                    | 1,077 |                               | 513 |  
|Granted                       |  |                              |   |  |                                                      |      |                               |    |  
|Exercised                     |  |                              |   |  |                                                      |      |                               |    |  
|Forfeited or expired          |  | (50                           | ) |  | $                                                    | 1,077 |                               | (16 | )
|                              |  |                               |   |  |                                                      |       |                               |     |  
|Balance at September 30, 2008 |  | 1,490                         |   |  | $                                                    | 1,077 |                               | 497 |  
|                              |  |                               |   |  |                                                      |       |                               |     |  

The fair value for the options was determined using the Black-Scholes option pricing model as of
the measurement date, April 23, 2007, the date the Company received unanimous approval of the shareholders for the 2007 Founders Option Plan. The Black-Scholes option pricing model, a permitted valuation approach under SFAS No. 123R,
was developed for use in estimating the fair value of traded options. This model requires the input of subjective assumptions, including expected price volatility and term. Changes in these subjective assumptions can materially affect the fair value
of the estimate, and therefore, existing valuation models do not provide a precise measure of the fair value of the Companys employee stock options. Projected data related to the expected volatility and expected life of stock options is
typically based upon historical and other information. The fair value of the options was estimated at the date of grant using the following assumptions:



|                          |  |         |  
|------------------------- |  | ------- | -
|Expected term             |  | 6 years |  
|Expected volatility       |  | 37.00   | %
|Dividend yield            |  | 0.00    | %
|Risk-free investment rate |  | 4.58    | %

The expected term of the options granted under the 2007 Founders Option Plan is based on the
simplified method for estimating the expected life of the options, as historical data related to the expected life of the options is not available. The Company used the historical volatility of the industry sector index, as it is not practicable to
estimate the expected volatility of the Companys share price. The risk-free investment rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve of the same maturity in effect at the time of grant.
SFAS No. 123R requires the Company to estimate forfeitures in calculating the expense relating to stock-based compensation. At the grant date, the Company estimated the number of shares expected to vest and will subsequently adjust compensation
costs for the estimated rate of forfeitures on an annual basis. The Company will use historical data to estimate option exercise and employee termination in determining the estimated forfeiture rate. The estimated forfeiture rate applied as of the
most recent option grant date in 2007 was 0% because it was the Companys initial grant date.



17



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



A summary of the unvested restricted shares of common stock, non-voting award activity under the 2008
Restricted Stock Issuances as of September 30, 2008, and changes during the nine months ended September 30, 2008, consisted of the following:



|                                       |  |                                              |  |                                                            |      
|-------------------------------------- |  | -------------------------------------------- |  | ---------------------------------------------------------- | -----
|                                       |  | RestrictedCommon Stock,Non-voting(in shares) |  | Weighted-AverageGrant-Date FairValue per Share(in dollars)
|Unvested Balance at January 1, 2008    |  |                                             |  |                                                            |     
|Granted                                |  | 155                                          |  | $                                                          | 1,225
|Vested                                 |  |                                             |  |                                                            |     
|Forfeited                              |  |                                             |  |                                                            |     
|                                       |  |                                              |  |                                                            |      
|Unvested Balance at September 30, 2008 |  | 155                                          |  | $                                                          | 1,225
|                                       |  |                                              |  |                                                            |      

The fair value of the restricted shares of common stock, non-voting was estimated by the Company
on June 30, 2008, the date the Company received unanimous shareholder approval.

Note 9. Commitments and Contingencies and Other

Litigation

In the normal course of business, the
Company is subject to litigation. In the opinion of management, the ultimate resolution of these litigations will not have a material adverse impact on the condensed consolidated financial statements.

Contingent Liability

In June 2008, the Company
recorded a provision for potential payroll tax and value added tax (VAT) exposure related to its operations in a foreign jurisdiction in which the Company conducts business, in the amount estimated to be approximately $400, all of which
affects the Companys operating expenses. In addition, the Company recorded a provision of $100 for the professional audit and legal fees incurred to determine the amount of unrecognized potential payroll tax and VAT exposure. The Company is
subject to VAT for products sold at the time a product is resold at an applicable VAT rate. The Company recognized certain VAT deductions that could be disallowed and believes it is subject to a tax assessment with respect to the VAT filings for the
years ended December 31, 2003 through 2007. The Company is obligated to comply with withholding and social security tax rules in foreign jurisdictions where persons perform fees for services work for the Company. The Company is
obligated to remit withholding and social security taxes on behalf of these service providers for performing functions in the ordinary course of business for the Company as opposed to delivering specialized professional services in the foreign
jurisdiction.

The Company is subject to inspection by the tax authorities in the foreign jurisdictions in which the Company conducts
business for various statutes of limitations under the applicable law. The respective provision for the potential payroll tax and VAT contingency is based upon the Companys determination that a high probability exists that an unfavorable
outcome is likely to be realized upon ultimate settlement with a tax authority that has full knowledge of all relevant information. The Company believes the provision for the payroll tax and VAT contingency is sufficient to cover any losses that may
occur as a result of related judicial actions.

Tax Settlement

In 2007, the Company incurred a net pre-tax charge of $3,800, (approximately $2,700 after tax) including legal and accounting fees, included in operating expenses in our consolidated statements of operations, as a
result of settlements with Uruguayan regulatory authorities. On June 29, 2007, our Uruguayan subsidiary, T.G.M., S.A., reached a settlement agreement with the Uruguayan tax agency Dirección General Impositiva (DGI) following
a tax audit of the period 2001 through 2005. During the audit, the DGI raised questions about the alleged failure of two local suppliers operating through several legal entities to pay VAT and other taxes in connection with the sale of certain IT
products to our Uruguayan subsidiary. Our Uruguayan subsidiary cooperated fully with the audit and has complied with its tax payment obligations, properly recorded, reported and paid all taxes. Due to the possibility of significant potential fines
and related legal expenses, our Uruguayan subsidiary approached the DGI seeking a resolution at that same time, and after negotiation, agreed to pay UYP 53,000 or approximately $2,200, and forfeit $500 in previously recognized tax credits in
connection with the settlement agreement. Our Uruguayan subsidiary was engaged in a parallel negotiation process with the Uruguayan customs authorities relating to the same time periods and facts, and entered into a similar settlement agreement with
the customs authorities providing for the payment of UYP 26,200, or approximately $1,100, for which the Company received a credit from the customs authorities of approximately $3,000.



18



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



We believe that payment of the settlement amounts was the best course of action for both our
Uruguayan subsidiary and the Company, particularly because Uruguayan tax law may, in certain cases, impose a joint and several financial liability on the Company for acts committed by third parties, such as the two suppliers described above that
result in the loss of tax revenue. In addition, the settlement payments avoid the risk connected with, and the commitment of potentially significant financial and managerial resources to, potential regulatory claims.

Anthony Shalom and Michael Shalom and the other individuals (the Pledging Noteholders)
(all of whom are affiliated with but not including Anthony Shalom and Michael Shalom) who sold shares to CVC International, our principal shareholder, in connection with the acquisition of control in our Company in 2004, entered into an indemnity
agreement dated as of June 29, 2007 (the Indemnity Agreement). The Indemnity Agreement provided for the payment of approximately $3,000 by Anthony Shalom and Michael Shalom to the Company by August 14, 2007, in order to
indemnify CVC International for the outflow of funds related to that portion of the settlement payments and certain expenses corresponding to the tax audit period from 2002 through August 31, 2004 (i.e., the closing date under the stock
purchase agreement) and certain related legal, accounting and other expenses, as required by the stock purchase agreement dated as of August 27, 2004. To secure the payment obligation, the indemnity agreement required Anthony Shalom and Michael
Shalom to arrange for a pledge of the 113/4% Senior Notes owned by the Pledging Noteholders in the same principal amount as the
indemnity payment. The pledge was executed as of June 29, 2007, in the same principal amount as the indemnity payment made prior to August 14, 2007.

As a result of a privately negotiated arms length transaction arranged by Anthony Shalom and
Michael Shalom on August 15, 2007, the Company repurchased approximately $2,200 of the 113/4% Senior Notes held by the
Pledging Noteholders at the same market price as $2,800 of the 113/4% Senior Notes we purchased in the open market at the end of
business on the prior day. We delivered all $5,000 in aggregate principal amount of the 113/4% Senior Notes purchased on such
dates to the trustee, under the indenture governing the 113/4% Senior Notes, for cancellation in satisfaction of our mandatory
sinking fund redemption that we were required to make by August 15, 2007 under the indenture.

Note 10. Related Party
Transaction

In November 2008, the Company entered into a 14 month consulting agreement in the amount of approximately $546, with
two of the Companys shareholders, and former managers of our operations in Mexico, to provide advice and operating guidance to the new management of the Companys Mexican operations.

Note 11. Additional Paid in Capital

On
June 30, 2008, our shareholders approved the issuance of 73 restricted shares of common stock, non-voting, with a three year cliff vesting period, to Mr. Henriques, as the initial equity consideration for his election to the Board of
Directors and 41 restricted shares of common stock, non-voting, to each of our board members, Mr. Madden and Ms. Miltner, as equity consideration for their annual board membership.

In November 2007, our Board of Directors authorized the issuance at the time of an initial public offering of 32 restricted shares of common stock,
non-voting, at the initial public offering price, with a three year vesting period of one-third per year on the annual anniversary date, to each of our board members Mr. Madden and Ms. Miltner. There were no compensation costs recorded
related to the authorization of the issuance of shares of common stock during the three and nine months ended September 30, 2008 and 2007. There were no issuances of shares of common stock during the three and nine months ended
September 30, 2008 and 2007.

In June 2007, the Company recorded $3,029 of additional paid in capital and a related party receivable
to record the indemnifying shareholders obligation to CVC International as required by the stock purchase agreement, for the outflow of funds in connection with the settlement reached with the Uruguayan tax agency. For a detailed discussion of the
Uruguayan tax settlement, see Part IFinancial Information, Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsUruguay Tax Audit.

In February 2007, the Board of Directors of our Company authorized a one-time issuance of options to acquire an aggregate of 1,540 shares of Class B
common stock, non-voting under the 2007 Founders Option Plan to certain of the Companys management employees and independent, non-employee directors. The shares vest ratably over a three year vesting period of one-third per year on the
annual anniversary date and expire 10 years from the date of grant. There were no options issued during the three and nine months



19



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INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



ended September 30, 2008. Total compensation costs related to stock-based compensation charged against income with an offsetting increase to additional
paid in capital was $85 and $229, respectively, for the three and nine months ended September 30, 2008 and $65 and $119, respectively, for the three and nine months ended September 30, 2007.

Note 12. Segment Information

The Company operates in
a single industry segment, that being a distributor of IT products. The Companys operating segments are based on geographic location. Geographic areas in which the Company operated during the three and nine months ended September 30, 2008
and 2007, include sales generated from and invoiced by the Miami, Florida operations (the Miami operations) and sales generated from and invoiced by all of the Latin American and Caribbean subsidiary operations (the in-country
operations). The in-country operations conduct business in the following countries: Argentina, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Jamaica, Mexico, Panama, Peru, and Uruguay.

All in-country operations have been aggregated as one segment due to similar products and economic characteristics. The Company sells one type of product
line, IT products. The Company is a distributor of IT products and does not provide any separately billable services. It is impracticable for the Company to report the revenues from external customers for the group of similar products within the
product line because the general ledger used to prepare the Companys financial statements does not track sales by product.

Inter-segment revenue primarily represents intercompany revenue between the Miami operations and the in-country operations at established prices between the related companies and are eliminated in consolidation. The measure for the
Companys segment profit is operating income. Financial information by geographic operating segment is as follows:



|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|------------------------------------ |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ----------------------- |  | - | ---------------------- | - |  | - | -------- | -
|                                     |  | Three Months EndedSeptember 30, |         |   | Nine Months EndedSeptember 30, |  
|                                     |  | (Unaudited)                     |         |   | (Unaudited)                    |  
|                                     |  | 2008                            |         |   | 2007                           |   |         | 2008                    |  |   | 2007                   |  
|Statement of Operations Data:        |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Revenue                              |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Miami operations                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Revenue to unaffiliated customers(1) |  | $                               | 70,030  |   |                                | $ | 70,712  |                         |  | $ | 232,796                |   |  | $ | 217,289  |  
|Inter-segment                        |  |                                 | 63,352  |   |                                |   | 67,798  |                         |  |   | 208,019                |   |  |   | 216,460  |  
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Total Miami operations               |  |                                 | 133,382 |   |                                |   | 138,510 |                         |  |   | 440,815                |   |  |   | 433,749  |  
|In-country operations                |  |                                 | 203,854 |   |                                |   | 197,263 |                         |  |   | 622,408                |   |  |   | 548,833  |  
|Eliminations of inter-segment        |  |                                 | (63,352 | ) |                                |   | (67,798 | )                       |  |   | (208,019               | ) |  |   | (216,460 | )
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Total revenue                        |  | $                               | 273,884 |   |                                | $ | 267,975 |                         |  | $ | 855,204                |   |  | $ | 766,122  |  
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Operating income (loss)              |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Miami operations                     |  | $                               | 248     |   |                                | $ | 3,827   |                         |  | $ | 1,834                  |   |  | $ | 5,451    |  
|In-country operations                |  |                                 | 4,232   |   |                                |   | 5,477   |                         |  |   | 15,569                 |   |  |   | 17,024   |  
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Total operating income               |  | $                               | 4,480   |   |                                | $ | 9,304   |                         |  | $ | 17,403                 |   |  | $ | 22,475   |  
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|                                     |  |                                 |         |  
|                                     |  |                                 |         |   |                                |   |         | As ofSeptember 30, 2008 |  |   | As ofDecember 31, 2007 |  
|Balance Sheet Data:                  |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Assets                               |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Miami operations                     |  |                                 |         |   |                                |   |         |                         |  | $ | 205,705                |   |  | $ | 185,623  |  
|In-country operations                |  |                                 |         |   |                                |   |         |                         |  |   | 171,509                |   |  |   | 177,385  |  
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Total assets                         |  |                                 |         |   |                                |   |         |                         |  | $ | 377,214                |   |  | $ | 363,008  |  
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Property and equipment, net          |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Miami operations                     |  |                                 |         |   |                                |   |         |                         |  | $ | 7,843                  |   |  | $ | 6,686    |  
|In-country operations                |  |                                 |         |   |                                |   |         |                         |  |   | 9,663                  |   |  |   | 8,373    |  
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  
|Total property and equipment, net    |  |                                 |         |   |                                |   |         |                         |  | $ | 17,506                 |   |  | $ | 15,059   |  
|                                     |  |                                 |         |   |                                |   |         |                         |  |   |                        |   |  |   |          |  



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INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



|                      |  |                                |        |      |   |       
|--------------------- |  | ------------------------------ | ------ | ---- | - | ------
|                      |  | Nine Months EndedSeptember 30,
|                      |  | (Unaudited)                   
|                      |  | 2008                           |        | 2007
|Goodwill              |  |                                |        |      |   |       
|Miami operations      |  | $                              | 21,253 |      | $ | 21,253
|In-country operations |  |                                | 12,853 |      |   | 13,004
|                      |  |                                |        |      |   |       
|Total goodwill        |  | $                              | 34,106 |      | $ | 34,257
|                      |  |                                |        |      |   |       



|(1) | For purposes of geographic disclosure, revenue is attributable to the country in which the Companys individual
business resides.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

Note 13. Guarantor Condensed Consolidating Financial Statements

At September 30, 2008 and December 31, 2007, $109,613 and $114,481, respectively, of the
113/4% Senior Notes remained outstanding. The 113/4% Senior Notes are unconditionally guaranteed by each of the Companys subsidiaries (collectively, the Subsidiary Guarantors), with the exception of 35.0% of the common shares of IXLA
(collectively, the Non-Guarantor Subsidiaries). Each of the note guarantees covers the full amount of the 113/4%
Senior Notes and each of the Subsidiary Guarantors is 100% owned by the Company. Pursuant to Rule 3-10(f) of Regulation S-X, supplemental financial unaudited information for the Company, its combined Subsidiary Guarantors and its combined
Non-Guarantor Subsidiaries is presented below:

CONDENSED CONSOLIDATING BALANCE SHEET

As of September 30, 2008

(Unaudited)



|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|------------------------------------------ |  | ------------- | ------- | ---------------------------- | - | --------------------------------- |  | ------------ | ------- |  | ------------------------- | -------- | - |  | - | -------
|                                           |  | Intcomex,Inc. |         | CombinedSubsidiaryGuarantors |   | CombinedNon-GuarantorSubsidiaries |  | Eliminations |         |  | Intcomex,Inc.Consolidated
|Assets                                     |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Current assets                             |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Cash and cash equivalents                  |  | $             |        |                              | $ | 250                               |  | $            | 21,919  |  | $                         |         |   |  | $ | 22,169 
|Trade accounts receivable, net             |  |               |        |                              |   | 84,071                            |  |              | 78,316  |  |                           | (50,852  | ) |  |   | 111,535
|Inventories                                |  |               |        |                              |   | 42,903                            |  |              | 93,504  |  |                           | (1,169   | ) |  |   | 135,238
|Other current assets                       |  |               | 39,881  |                              |   | 44,033                            |  |              | 41,475  |  |                           | (90,561  | ) |  |   | 34,828 
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Total current assets                       |  |               | 39,881  |                              |   | 171,257                           |  |              | 235,214 |  |                           | (142,582 | ) |  |   | 303,770
|Property and equipment, net                |  |               | 3,587   |                              |   | 4,256                             |  |              | 9,663   |  |                           |         |   |  |   | 17,506 
|Investments in subsidiaries                |  |               | 132,280 |                              |   | 180,131                           |  |              |        |  |                           | (312,411 | ) |  |   |       
|Goodwill                                   |  |               |        |                              |   | 21,253                            |  |              | 12,853  |  |                           |         |   |  |   | 34,106 
|Other assets                               |  |               | 13,419  |                              |   | 1,001                             |  |              | 7,269   |  |                           |         |   |  |   | 21,689 
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Total assets                               |  | $             | 189,167 |                              | $ | 377,898                           |  | $            | 264,999 |  | $                         | (454,993 | ) |  | $ | 377,071
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|                                           |  |               |         |                              |  
|Liabilities and Shareholders Equity       |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Current liabilities                        |  | $             | 30,562  |                              | $ | 177,670                           |  | $            | 146,488 |  | $                         | (141,368 | ) |  | $ | 213,352
|Long-term debt, net of current portion     |  |               | 104,569 |                              |   | 1,106                             |  |              | 658     |  |                           |         |   |  |   | 106,333
|Deferred tax liabilities                   |  |               | 359     |                              |   | 546                               |  |              | 1,114   |  |                           |         |   |  |   | 2,019  
|Other long-term liabilities                |  |               |        |                              |   | 1,156                             |  |              | 534     |  |                           |         |   |  |   | 1,690  
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Total liabilities                          |  |               | 135,490 |                              |   | 180,478                           |  |              | 148,794 |  |                           | (141,368 | ) |  |   | 323,394
|Total shareholders equity                 |  |               | 53,677  |                              |   | 197,420                           |  |              | 116,205 |  |                           | (313,625 | ) |  |   | 53,677 
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Total liabilities and shareholders equity |  | $             | 189,167 |                              | $ | 377,898                           |  | $            | 264,999 |  | $                         | (454,993 | ) |  | $ | 377,071
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        



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INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2007



|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|------------------------------------------ |  | ------------- | ------- | ---------------------------- | - | --------------------------------- |  | ------------ | ------- |  | ------------------------- | -------- | - |  | - | -------
|                                           |  | Intcomex,Inc. |         | CombinedSubsidiaryGuarantors |   | CombinedNon-GuarantorSubsidiaries |  | Eliminations |         |  | Intcomex,Inc.Consolidated
|Assets                                     |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Current assets                             |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Cash and cash equivalents                  |  | $             |        |                              | $ | 81                                |  | $            | 29,318  |  | $                         |         |   |  | $ | 29,399 
|Trade accounts receivable, net             |  |               |        |                              |   | 111,544                           |  |              | 87,328  |  |                           | (82,128  | ) |  |   | 116,744
|Inventories                                |  |               |        |                              |   | 37,842                            |  |              | 80,356  |  |                           | (1,237   | ) |  |   | 116,961
|Other current assets                       |  |               | 42,519  |                              |   | 5,589                             |  |              | 26,258  |  |                           | (42,239  | ) |  |   | 32,127 
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Total current assets                       |  |               | 42,519  |                              |   | 155,056                           |  |              | 223,260 |  |                           | (125,604 | ) |  |   | 295,231
|Property and equipment, net                |  |               | 2,504   |                              |   | 4,182                             |  |              | 8,373   |  |                           |         |   |  |   | 15,059 
|Investments in subsidiaries                |  |               | 121,374 |                              |   | 169,018                           |  |              |        |  |                           | (290,392 | ) |  |   |       
|Goodwill                                   |  |               |        |                              |   | 21,253                            |  |              | 13,004  |  |                           |         |   |  |   | 34,257 
|Other assets                               |  |               | 10,665  |                              |   | 946                               |  |              | 6,885   |  |                           | (35      | ) |  |   | 18,461 
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Total assets                               |  | $             | 177,062 |                              | $ | 350,455                           |  | $            | 251,522 |  | $                         | (416,031 | ) |  | $ | 363,008
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|                                           |  |               |         |                              |  
|Liabilities and Shareholders Equity       |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Current liabilities                        |  | $             | 13,390  |                              | $ | 166,007                           |  | $            | 138,571 |  | $                         | (124,366 | ) |  | $ | 193,602
|Long-term debt, net of current portion     |  |               | 109,436 |                              |   | 1,448                             |  |              | 716     |  |                           |         |   |  |   | 111,600
|Deferred tax liabilities                   |  |               | 135     |                              |   | 364                               |  |              | 1,683   |  |                           |         |   |  |   | 2,182  
|Other long-term liabilities                |  |               |        |                              |   | 1,035                             |  |              | 488     |  |                           |         |   |  |   | 1,523  
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Total liabilities                          |  |               | 122,961 |                              |   | 168,854                           |  |              | 141,458 |  |                           | (124,366 | ) |  |   | 308,907
|Total shareholders equity                 |  |               | 54,101  |                              |   | 181,601                           |  |              | 110,064 |  |                           | (291,665 | ) |  |   | 54,101 
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        
|Total liabilities and shareholders equity |  | $             | 177,062 |                              | $ | 350,455                           |  | $            | 251,522 |  | $                         | (416,031 | ) |  | $ | 363,008
|                                           |  |               |         |                              |   |                                   |  |              |         |  |                           |          |   |  |   |        



22



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three Months Ended September 30, 2008

(Unaudited)



|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|----------------------------------------------- |  | ------------- | ------ | - | ---------------------------- | - | ------- | --------------------------------- |  | - | ------------ | - |  | ------------------------- | ------- | - |  | - | ------- | -
|                                                |  | Intcomex,Inc. |        |   | CombinedSubsidiaryGuarantors |   |         | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   |  | Intcomex,Inc.Consolidated |        
|Revenue                                         |  | $             |       |   |                              | $ | 133,382 |                                   |  | $ | 203,853      |   |  | $                         | (63,351 | ) |  | $ | 273,884 |  
|Cost of revenue                                 |  |               | 132    |   |                              |   | 125,912 |                                   |  |   | 185,668      |   |  |                           | (63,381 | ) |  |   | 248,331 |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Gross profit                                    |  |               | (132   | ) |                              |   | 7,470   |                                   |  |   | 18,185       |   |  |                           | 30      |   |  |   | 25,553  |  
|Operating expenses                              |  |               | 3,092  |   |                              |   | 4,262   |                                   |  |   | 13,719       |   |  |                           |        |   |  |   | 21,073  |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Operating (loss) income                         |  |               | (3,224 | ) |                              |   | 3,208   |                                   |  |   | 4,466        |   |  |                           | 30      |   |  |   | 4,480   |  
|Other expense (income)                          |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Interest expense, net                           |  |               | 3,562  |   |                              |   | 374     |                                   |  |   | 203          |   |  |                           |        |   |  |   | 4,139   |  
|Other, net                                      |  |               | (989   | ) |                              |   | (1,014  | )                                 |  |   | 4,515        |   |  |                           | 1,880   |   |  |   | 4,392   |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Total other (income) expense                    |  |               | 2,573  |   |                              |   | (640    | )                                 |  |   | 4,718        |   |  |                           | 1,880   |   |  |   | 8,531   |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|(Loss) income before provision for income taxes |  |               | (5,797 | ) |                              |   | 3,848   |                                   |  |   | (252         | ) |  |                           | (1,850  | ) |  |   | (4,051  | )
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|(Benefit) provision for income taxes            |  |               | (2,351 | ) |                              |   | 1,223   |                                   |  |   | 523          |   |  |                           |        |   |  |   | (605    | )
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Net (loss) income                               |  | $             | (3,446 | ) |                              | $ | 2,625   |                                   |  | $ | (775         | ) |  | $                         | (1,850  | ) |  | $ | (3,446  | )
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three Months Ended September 30, 2007

(Unaudited)



|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|----------------------------------------------- |  | ------------- | ------ | - | ---------------------------- | - | ------- | --------------------------------- |  | - | ------------ | - |  | ------------------------- | ------- | - |  | - | ------- | -
|                                                |  | Intcomex,Inc. |        |   | CombinedSubsidiaryGuarantors |   |         | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   |  | Intcomex,Inc.Consolidated |        
|Revenue                                         |  | $             |       |   |                              | $ | 138,510 |                                   |  | $ | 197,263      |   |  | $                         | (67,798 | ) |  | $ | 267,975 |  
|Cost of revenue                                 |  |               |       |   |                              |   | 129,984 |                                   |  |   | 179,526      |   |  |                           | (68,240 | ) |  |   | 241,270 |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Gross profit                                    |  |               |       |   |                              |   | 8,526   |                                   |  |   | 17,737       |   |  |                           | 442     |   |  |   | 26,705  |  
|Operating expenses                              |  |               | 611    |   |                              |   | 4,697   |                                   |  |   | 12,093       |   |  |                           |        |   |  |   | 17,401  |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Operating (loss) income                         |  |               | (611   | ) |                              |   | 3,829   |                                   |  |   | 5,644        |   |  |                           | 442     |   |  |   | 9,304   |  
|Other expense (income)                          |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Interest expense, net                           |  |               | 4,174  |   |                              |   | 403     |                                   |  |   | 119          |   |  |                           |        |   |  |   | 4,696   |  
|Other, net                                      |  |               | (7,198 | ) |                              |   | (6,821  | )                                 |  |   | (174         | ) |  |                           | 14,009  |   |  |   | (184    | )
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Total other (income) expense                    |  |               | (3,024 | ) |                              |   | (6,418  | )                                 |  |   | (55          | ) |  |                           | 14,009  |   |  |   | 4,512   |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Income (loss) before provision for income taxes |  |               | 2,413  |   |                              |   | 10,247  |                                   |  |   | 5,699        |   |  |                           | (13,567 | ) |  |   | 4,792   |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|(Benefit) provision for income taxes            |  |               | (1,817 | ) |                              |   | 1,251   |                                   |  |   | 1,128        |   |  |                           |        |   |  |   | 562     |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|Net income (loss)                               |  | $             | 4,230  |   |                              | $ | 8,996   |                                   |  | $ | 4,571        |   |  | $                         | (13,567 | ) |  | $ | 4,230   |  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  



23



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2008

(Unaudited)



|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|----------------------------------------------- |  | ------------- | ------- | - | ---------------------------- | - | ------- | --------------------------------- |  | ------------ | ------- |  | ------------------------- | -------- | - |  | - | ------- | -
|                                                |  | Intcomex,Inc. |         |   | CombinedSubsidiaryGuarantors |   |         | CombinedNon-GuarantorSubsidiaries |  | Eliminations |         |  | Intcomex,Inc.Consolidated |         
|Revenue                                         |  | $             |        |   |                              | $ | 440,815 |                                   |  | $            | 622,408 |  | $                         | (208,019 | ) |  | $ | 855,204 |  
|Cost of revenue                                 |  |               | 132     |   |                              |   | 418,257 |                                   |  |              | 565,531 |  |                           | (208,087 | ) |  |   | 775,833 |  
|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|Gross profit                                    |  |               | (132    | ) |                              |   | 22,558  |                                   |  |              | 56,877  |  |                           | 68       |   |  |   | 79,371  |  
|Operating expenses                              |  |               | 6,610   |   |                              |   | 14,246  |                                   |  |              | 41,112  |  |                           |         |   |  |   | 61,968  |  
|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|Operating (loss) income                         |  |               | (6,742  | ) |                              |   | 8,312   |                                   |  |              | 15,765  |  |                           | 68       |   |  |   | 17,403  |  
|Other expense (income)                          |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|Interest expense, net                           |  |               | 10,754  |   |                              |   | 1,064   |                                   |  |              | 250     |  |                           |         |   |  |   | 12,068  |  
|Other, net                                      |  |               | (10,516 | ) |                              |   | (10,753 | )                                 |  |              | 6,657   |  |                           | 21,228   |   |  |   | 6,616   |  
|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|Total other expense (income)                    |  |               | 238     |   |                              |   | (9,689  | )                                 |  |              | 6,907   |  |                           | 21,228   |   |  |   | 18,684  |  
|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|(Loss) income before provision for income taxes |  |               | (6,980  | ) |                              |   | 18,001  |                                   |  |              | 8,858   |  |                           | (21,160  | ) |  |   | (1,281  | )
|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|(Benefit) provision for income taxes            |  |               | (5,937  | ) |                              |   | 2,583   |                                   |  |              | 3,116   |  |                           |         |   |  |   | (238    | )
|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|Net (loss) income                               |  | $             | (1,043  | ) |                              | $ | 15,418  |                                   |  | $            | 5,742   |  | $                         | (21,160  | ) |  | $ | (1,043  | )
|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2007

(Unaudited)



|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|----------------------------------------------- |  | ------------- | ------- | - | ---------------------------- | - | ------- | --------------------------------- |  | - | ------------ | - |  | ------------------------- | -------- | - |  | - | ------- | -
|                                                |  | Intcomex,Inc. |         |   | CombinedSubsidiaryGuarantors |   |         | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   |  | Intcomex,Inc.Consolidated |         
|Revenue                                         |  | $             |        |   |                              | $ | 433,749 |                                   |  | $ | 548,833      |   |  | $                         | (216,460 | ) |  | $ | 766,122 |  
|Cost of revenue                                 |  |               |        |   |                              |   | 408,345 |                                   |  |   | 497,435      |   |  |                           | (216,465 | ) |  |   | 689,315 |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Gross profit                                    |  |               |        |   |                              |   | 25,404  |                                   |  |   | 51,398       |   |  |                           | 5        |   |  |   | 76,807  |  
|Operating expenses                              |  |               | 5,601   |   |                              |   | 14,524  |                                   |  |   | 34,207       |   |  |                           |         |   |  |   | 54,332  |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Operating (loss) income                         |  |               | (5,601  | ) |                              |   | 10,880  |                                   |  |   | 17,191       |   |  |                           | 5        |   |  |   | 22,475  |  
|Other expense (income)                          |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Interest expense, net                           |  |               | 11,965  |   |                              |   | 833     |                                   |  |   | 60           |   |  |                           |         |   |  |   | 12,858  |  
|Other, net                                      |  |               | (20,382 | ) |                              |   | (20,360 | )                                 |  |   | (1,141       | ) |  |                           | 40,758   |   |  |   | (1,125  | )
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Total other (income) expense                    |  |               | (8,417  | ) |                              |   | (19,527 | )                                 |  |   | (1,081       | ) |  |                           | 40,758   |   |  |   | 11,733  |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Income (loss) before provision for income taxes |  |               | 2,816   |   |                              |   | 30,407  |                                   |  |   | 18,272       |   |  |                           | (40,753  | ) |  |   | 10,742  |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|(Benefit) provision for income taxes            |  |               | (5,467  | ) |                              |   | 3,756   |                                   |  |   | 4,170        |   |  |                           |         |   |  |   | 2,459   |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Net income (loss)                               |  | $             | 8,283   |   |                              | $ | 26,651  |                                   |  | $ | 14,102       |   |  | $                         | (40,753  | ) |  | $ | 8,283   |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  



24



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in 000s, except per share
data)

(Unaudited)



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2008

(Unaudited)



|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|------------------------------------------------------------- |  | ------------- | ------ | - | ---------------------------- | - | ------ | --------------------------------- |  | - | ------------ | - | ------------------------- | - | - |  | - | ------ | -
|                                                              |  | Intcomex,Inc. |        |   | CombinedSubsidiaryGuarantors |   |        | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   | Intcomex,Inc.Consolidated |  
|Cash flows provided by (used in) operating activities         |  | $             | 6,500  |   |                              | $ | (5,138 | )                                 |  | $ | (8,635       | ) |                           | $ |  |  | $ | (7,273 | )
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash flows from investing activities                          |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Purchases of property and equipment, net                      |  |               | (1,632 | ) |                              |   | (720   | )                                 |  |   | (2,524       | ) |                           |   |  |  |   | (4,876 | )
|Other                                                         |  |               |       |   |                              |   |       |                                   |  |   | 158          |   |                           |   |  |  |   | 158    |  
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash used in investing activities                             |  |               | (1,632 | ) |                              |   | (720   | )                                 |  |   | (2,366       | ) |                           |   |  |  |   | (4,718 | )
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash flows from financing activities                          |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Borrowings under lines of credit, net                         |  |               |       |   |                              |   | 6,271  |                                   |  |   | 3,179        |   |                           |   |  |  |   | 9,450  |  
|Borrowings under long-term debt                               |  |               |       |   |                              |   |       |                                   |  |   | 36           |   |                           |   |  |  |   | 36     |  
|Payments of long-term debt                                    |  |               | (4,868 | ) |                              |   | (244   | )                                 |  |   | (199         | ) |                           |   |  |  |   | (5,311 | )
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash flows (used in) provided by financing activities         |  |               | (4,868 | ) |                              |   | 6,027  |                                   |  |   | 3,016        |   |                           |   |  |  |   | 4,175  |  
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Effects of exchange rate changes on cash and cash equivalents |  |               |       |   |                              |   |       |                                   |  |   | 586          |   |                           |   |   |  |   | 586    |  
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Net increase (decrease) in cash and cash equivalents          |  |               |       |   |                              |   | 169    |                                   |  |   | (7,399       | ) |                           |   |  |  |   | (7,230 | )
|Cash and cash equivalents, beginning of period                |  | $             |       |   |                              | $ | 81     |                                   |  | $ | 29,318       |   |                           | $ |  |  | $ | 29,399 |  
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash and cash equivalents, end of period                      |  | $             |       |   |                              | $ | 250    |                                   |  | $ | 21,919       |   |                           | $ |  |  | $ | 22,169 |  
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2007

(Unaudited)



|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |         |  
|------------------------------------------------------------- |  | ------------- | ------ | - | ---------------------------- | - | ------ | --------------------------------- |  | - | ------------ | - | ------------------------- | - | - |  | - | ------- | -
|                                                              |  | Intcomex,Inc. |        |   | CombinedSubsidiaryGuarantors |   |        | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   | Intcomex,Inc.Consolidated |  
|Cash flows (used in) provided by operating activities         |  | $             | 6,062  |   |                              | $ | (9,077 | )                                 |  | $ | (11,534      | ) |                           | $ |  |  | $ | (14,549 | )
|Cash flows used in investing activities                       |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |         |  
|Purchases of property and equipment, net                      |  |               | (1,361 | ) |                              |   | (2,616 | )                                 |  |   | (1,655       | ) |                           |   |  |  |   | (5,632  | )
|Other                                                         |  |               |       |   |                              |   | (88    | )                                 |  |   | 639          |   |                           |   |  |  |   | 551     |  
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |         |  
|Cash used in investing activities                             |  |               | (1,361 | ) |                              |   | (2,704 | )                                 |  |   | (1,016       | ) |                           |   |  |  |   | (5,081  | )
|Cash flows (used in) provided by financing activities         |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |         |  
|Borrowings under lines of credit, net                         |  |               |       |   |                              |   | 10,521 |                                   |  |   | 4,950        |   |                           |   |  |  |   | 15,471  |  
|Borrowings under long-term debt                               |  |               | 355    |   |                              |   | 1,505  |                                   |  |   | 441          |   |                           |   |  |  |   | 2,301   |  
|Payments of long-term debt                                    |  |               | (5,057 | ) |                              |   | (149   | )                                 |  |   | (139         | ) |                           |   |  |  |   | (5,345  | )
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |         |  
|Cash flows (used in) provided by financing activities         |  |               | (4,702 | ) |                              |   | 11,877 |                                   |  |   | 5,252        |   |                           |   |  |  |   | 12,427  |  
|Effects of exchange rate changes on cash and cash equivalents |  |               |       |   |                              |   |       |                                   |  |   | (51          | ) |                           |   |  |  |   | (51     | )
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |         |  
|Net (decrease) increase in cash and cash equivalents          |  |               | (1     | ) |                              |   | 96     |                                   |  |   | (7,349       | ) |                           |   |  |  |   | (7,254  | )
|Cash and cash equivalents, beginning of period                |  |               | 2      |   |                              |   | 131    |                                   |  |   | 20,441       |   |                           |   |  |  |   | 20,574  |  
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |         |  
|Cash and cash equivalents, end of period                      |  | $             | 1      |   |                              | $ | 227    |                                   |  | $ | 13,092       |   |                           | $ |  |  | $ | 13,320  |  
|                                                              |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |         |  



25



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Forward-Looking Statements

This Quarterly Report on Form 10-Q (Quarterly Report),
including this Managements Discussion and Analysis of Financial Condition and Results of Operations, contain forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the
Securities Act of 1933 (the Securities Act) and the Securities Exchange Act of 1934 (the Exchange Act). All statements other than statements of historical facts are statements that could be deemed forward-looking statements.
These statements are based on current expectations, beliefs, estimates, forecasts, and projections and management assumptions about our Company, our future performance, our liquidity and the IT products distribution industry in which we operate.
Words such as may, intend, expect, anticipate, believe, target, goal, project, plan, seek, estimate,
continue, variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and
trends in our businesses, and other characterizations of future events or circumstances including but not limited to, managements expectations for competition, revenues, margin, expenses and other operating results; capital expenditures;
liquidity; capital requirements, acquisitions and exchange rate fluctuations, each of which involves numerous risks and uncertainties are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions
and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified below, under Part IIOther Information, Item 1A. Risk Factors in our Annual Report on Form 10-K filed with the
SEC on March 31, 2008 (Annual Report) and elsewhere herein. These risks and uncertainties include, but are not limited to, the following:



| |  |  | an increase in competition in the markets in which we operate or plan to operate;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | difficulties in maintaining and enhancing internal controls and management and financial reporting systems;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | adverse changes in general, regional and country-specific economic and political conditions in Latin America and the Caribbean;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | fluctuations of other currencies relative to the United States (U.S.) dollar;
| | - |  | -------------------------------------------------------------------------------



| |  |  | difficulties in staffing and managing our foreign operations;
| | - |  | -------------------------------------------------------------



| |  |  | departures of our key executive officers;
| | - |  | -----------------------------------------



| |  |  | increases in credit exposure to our customers;
| | - |  | ----------------------------------------------



| |  |  | adverse changes in our relationships with vendors and customers; or
| | - |  | -------------------------------------------------------------------



| |  |  | declines in our inventory values.
| | - |  | ---------------------------------

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative but not exhaustive. In addition, new risks and uncertainties may arise from time to time. Accordingly, all
forward-looking statements should be evaluated with an understanding of their inherent uncertainty. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake
any obligation to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their
entirety by this cautionary statement.

Therefore, actual results may differ materially and adversely from those expressed in any
forward-looking statements because of certain factors discussed below or elsewhere in this Quarterly Report and included in the Companys Annual Report. The following discussion and analysis of our financial condition and results of operations
should be read together with the audited consolidated financial statements and notes thereto, which are included in the Companys Annual Report and our unaudited condensed consolidated financial statements for the fiscal quarter ended
September 30, 2008, which are included in this Quarterly Report.

Overview

We believe we are the largest pure play value-added distributor of information technology (IT) products focused solely on serving Latin
America and the Caribbean. We distribute computer components, peripherals, software, computer systems, accessories, networking products and digital consumer electronics to more than 40,000 customers in 40 countries. We offer single source purchasing
to our customers by providing an in-stock selection of more than 5,700 products from over 197 vendors, including many of the worlds leading IT product manufacturers. From our headquarters and main distribution center in Miami, Florida, we
support a network of 25 sales and distribution operations in 12 Latin American and Caribbean countries and a sales office in Brazil.

The
results of operations for the three and nine month periods ended September 30, 2008 reflect an increase in revenue from the corresponding periods in 2007, as we have achieved a positive year-over-year revenue growth from our significant product
lines and our customer markets. We believe this growth is attributable, in part, to the successful implementation of our sales strategies. Revenue increased by $5.9 million, or 2.2%, and gross profit decreased by $1.2 million, or 4.3%, for the three
months ended September 30, 2008, as compared to the three months ended September 30, 2007. Revenue increased by $89.1 million, or 11.6%, and gross profit increased by $2.6 million, or 3.3%, for the nine months ended September 30,
2008, as compared to the nine months ended September 30, 2007.



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Factors Affecting Our Results of Operations

The following events and developments have in the past, or are expected in the future to have a significant impact on our financial condition and results
of operations:



| |  | Impact of price competition and vendor terms and conditions on margin. Historically, our gross profit margins have been impacted by price
competition, as well as changes to vendor terms and conditions, including, but not limited to, reductions in product rebates and incentives, our ability to return inventory to manufacturers, and time periods during which vendors provide price
protection. We expect these competitive pricing pressures and modifications to vendor terms and conditions to continue into the foreseeable future. We continuously refine our pricing strategy, inventory management processes and systems and
manufacturer programs to attempt to mitigate the adverse impact of these competitive pressures.
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| |  | Macroeconomic trends and increased penetration of IT products. Since 2003, the Latin American and Caribbean economies have benefited from
relatively high levels of economic growth, which we believe have had a positive impact on overall demand for IT products. In particular, we have continued to benefit from rapid growth in PC penetration rates and Internet penetration rates. From 1996
to 2006, spending on IT products (including hardware, packaged software and services) in Latin America and the Caribbean grew an average of 5.9% per year, from $21.8 billion to $38.5 billion, and, according to IDC, is projected to grow an
average of 11.5% per year from 2006 to 2010, to $59.4 billion.
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| |  | Shift in revenue to in-country operations.One of our growth strategies is to expand the geographic presence of our in-country operations into
areas in which we believe we can achieve higher gross margins than our Miami operations. Miami gross margins are generally lower than in-country gross margins because Miami is a more competitive market and Miamis customers, who are primarily
other Miami-based IT distributors or large IT distributors, resellers and retailers located in Latin America or the Caribbean, have larger average order quantities than customers of our in-country segment and as a result benefit from lower average
prices. In-country revenue grew by an average of 26.6% annually between 2001 and 2007, as compared to growth in Miami revenue of an average of 12.6% annually over the same period. In-country revenue accounted for 74.4% and 73.6% of consolidated
revenue for the three months ended September 30, 2008 and 2007, respectively, and 72.8% and 71.6% of consolidated revenue for the nine months ended September 30, 2008 and 2007, respectively. This growth in our in-country operations
reflects in part the growth in local market share achieved by four of our distribution centers (El Salvador, Ecuador, Costa Rica and Jamaica) that were opened in 2000, the Argentina operation opened in September 2003 and our Colombia operation
opened in January 2004. Our in-country presence was further expanded by our re-acquisition of Centel in Mexico in June 2005 discussed below.
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| |  | Exposure to fluctuations in foreign currency.A significant portion of our revenues from in-country operations is invoiced in currencies other than
the U.S. dollar and a significant amount of our in-country operating expenses are denominated in currencies other than U.S. dollars. In markets where we invoice in local currency, including Argentina, Chile, Colombia, Costa Rica, Guatemala, Jamaica,
Mexico, Peru and Uruguay, the appreciation of a local currency will reduce our gross profit and gross margins in U.S. dollar terms. In markets where our books and records are prepared in currencies other than the U.S. dollar, the appreciation of a
local currency will increase our operating expenses and decrease our operating margins in U.S. dollar terms. In our consolidated statement of operations, a foreign exchange loss of $4.4 million and $0.1 million were included for the three months
ended September 30, 2008 and 2007, respectively and a foreign exchange loss of $6.6 million and a foreign exchange gain of $0.8 million were included for the nine months ended September 30, 2008 and 2007, respectively. We generally do not
engage in foreign currency hedging arrangements, and, consequently, foreign currency fluctuations may adversely affect our results of operations, including our gross margins and operating margins.
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| |  | Trade Credit.All of our key vendors and many of our other vendors provide us with trade credit. Historically, trade credit has been an
important source of liquidity to finance our growth. Although our overall available trade credit has increased significantly over time, from time to time the trade credit available from certain vendors has not kept pace with the growth of our
business with them. When we purchase goods from these vendors, we need to increase our use of available cash or borrowings under our credit facility (in each case to the extent available) to pay the purchase price upon delivery of the products,
which adversely affects our liquidity and can adversely affect our results of operations and opportunities for growth.
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| |  | Increased levels of indebtedness.In connection with the investment by CVC International in our Company in
August 2004 and our re-acquisition of Centel, we borrowed under our former senior secured credit facility with Wells Fargo Foothill and Morgan Stanley, which we refer to as our former senior secured credit facility, and issued
subordinated seller notes to the sellers, which increased our leverage and our interest expense. In August 2005, we issued $120.0 million of 113/4% Senior Notes and used the proceeds to repay the outstanding principal balances on our former senior secured credit facility and subordinated seller
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| | notes as well as to pay a $20.0 million dividend to our stockholders. For the three months ended September 30, 2008 and 2007, interest expense was $4.4
million and $4.9 million, respectively. For the nine months ended September 30, 2008 and 2007, interest expense was $12.9 million and $13.3 million, respectively.
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| |  | Centel re-acquisition.On June 23, 2005, we re-acquired all of the outstanding shares of our former subsidiary Centel (which we originally
sold in 2001) for $14.0 million in cash, $3.0 million in Class B common shares, non-voting and $2.8 million in subordinated seller notes, representing an aggregate consideration of $19.8 million. For the three months ended September 30, 2008
and 2007, Centel had revenue of $24.9 million and $30.8 million, respectively, and net income of $0.1 million and $1.2 million, respectively. For the nine months ended September 30, 2008 and 2007, Centel had revenue of $81.0 million and $86.0
million, respectively, and net income of $1.0 million and $3.0 million, respectively.
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Uruguay Tax Audit

In 2007, the Company incurred a net pre-tax charge of $3.8 million, (approximately $2.7 million after tax) including legal and accounting fees, included
in operating expenses in our consolidated statements of operations, as a result of settlements with Uruguayan regulatory authorities. On June 29, 2007, our Uruguayan subsidiary, T.G.M., S.A., reached a settlement agreement with the Uruguayan
tax agency Dirección General Impositiva (DGI) following a tax audit of the period 2001 through 2005. During the audit, the DGI raised questions about the alleged failure of two local suppliers operating through several legal
entities to pay value added taxes and other taxes in connection with the sale of certain IT products to our Uruguayan subsidiary. Our Uruguayan subsidiary cooperated fully with the audit and has complied with its tax payment obligations, properly
recorded, reported and paid all taxes. Due to the possibility of significant potential fines and related legal expenses, our Uruguayan subsidiary approached the DGI seeking a resolution at that same time, and after negotiation, agreed to pay UYP
53.0 million, or approximately $2.2 million, and forfeit approximately $0.5 million in previously recognized tax credits in connection with the settlement agreement. Our Uruguayan subsidiary was engaged in a parallel negotiation process with
the Uruguayan customs authorities relating to the same time periods and facts, and entered into a similar settlement agreement with the customs authorities providing for the payment of UYP 26.2 million, or approximately $1.1 million, for which
the Company received a credit from the customs authorities of approximately $3.0 million.

We believe that payment of the settlement
amounts was the best course of action for both our Uruguayan subsidiary and the Company, particularly because Uruguayan tax law may, in certain cases, impose a joint and several financial liability on the Company for acts committed by third parties,
such as the two suppliers described above that result in the loss of tax revenue. In addition, the settlement payments avoid the risk connected with, and the commitment of potentially significant financial and managerial resources to, potential
regulatory claims.

In connection with our internal investigation overseen by our audit committee, we examined our third-party purchasing
controls and implemented additional measures including centralized corporate oversight of all purchases by local operations from non-OEM third parties and enhanced IT systems to strengthen purchasing controls, in particular in the areas of treasury,
accounting and purchasing. The general manager of our Uruguayan subsidiary resigned following completion of our investigation.

Anthony Shalom and Michael Shalom and the other individuals (the Pledging Noteholders)
(all of whom are affiliated with but not including Anthony Shalom and Michael Shalom) who sold shares to CVC International, our principal shareholder, in connection with the acquisition of control in our Company in 2004, entered into an indemnity
agreement dated as of June 29, 2007 (the Indemnity Agreement). The Indemnity Agreement provided for the payment of approximately $3.0 million by Anthony Shalom and Michael Shalom to the Company by August 14, 2007, in order to
indemnify CVC International for the outflow of funds related to that portion of the settlement payments and certain expenses corresponding to the tax audit period from 2002 through August 31, 2004 (i.e., the closing date under the stock
purchase agreement) and certain related legal, accounting and other expenses, as required by the stock purchase agreement dated as of August 27, 2004. To secure the payment obligation, the indemnity agreement required Anthony Shalom and Michael
Shalom to arrange for a pledge of the 113/4% Senior Notes owned by the Pledging Noteholders in the same principal amount as the
indemnity payment. The pledge was executed as of June 29, 2007, in the same principal amount as the indemnity payment made prior to August 14, 2007.

As a result of a privately negotiated arms length transaction arranged by Anthony Shalom and
Michael Shalom on August 15, 2007, the Company repurchased $2.2 million of the 113/4% Senior Notes held by the Pledging
Noteholders at the same market price as $2.8 million of the 113/4% Senior Notes we purchased in the open market at the end of
business on the prior day. We delivered all $5.0 million aggregate principal amount of the 113/4% Senior Notes purchased on such
dates to the trustee, under the indenture governing the 113/4% Senior Notes, for cancellation in satisfaction of our mandatory
sinking fund redemption that we were required to make by August 15, 2007 under the indenture.



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Results of Operations

We report our business in two operating segments, based upon the geographic location of where we originate the sale: In-country and Miami. In-country segment includes revenue from our in-country sales and distribution
centers, which have been aggregated because of their similar economic characteristics. Miami segment includes revenue from our Miami, Florida headquarters, including sales from Miami to our in-country sales and distribution centers and sales
directly to resellers, retailers and distributors that are located in countries in which we have in-country sales and distribution operations or in which we do not have any in-country operations. Most of our vendor rebates, incentives and allowances
are reflected in the results of our Miami segment. When we consolidate our results, we eliminate revenue and cost of revenue attributable to inter-segment sales, and the financial results of our Miami segment discussed below reflect these
eliminations.

Comparison of the three months ended September 30, 2008 versus the three months ended September 30, 2007

The following table sets forth selected financial data and percentages of revenue for the periods presented (in thousands):



|                                                |  |                                      |         |   |                                      |       |    |        |   |                      |  |       |  
|----------------------------------------------- |  | ------------------------------------ | ------- | - | ------------------------------------ | ----- | -- | ------ | - | -------------------- |  | ----- | -
|                                                |  | Three Months EndedSeptember 30, 2008 |         |   | Three Months EndedSeptember 30, 2007 |      
|                                                |  | Amount                               |         |   | Percentageof Revenue                 |       |    | Amount |   | Percentageof Revenue | 
|Revenue                                         |  | $                                    | 273,884 |   |                                      | 100.0 | %  |        | $ | 267,975              |  | 100.0 | %
|Cost of revenue                                 |  |                                      | 248,331 |   |                                      | 90.7  | %  |        |   | 241,270              |  | 90.0  | %
|                                                |  |                                      |         |   |                                      |       |    |        |   |                      |  |       |  
|Gross profit                                    |  |                                      | 25,553  |   |                                      | 9.3   | %  |        |   | 26,705               |  | 10.0  | %
|Selling, general and administrative             |  |                                      | 20,069  |   |                                      | 7.3   | %  |        |   | 16,533               |  | 6.2   | %
|Depreciation and amortization                   |  |                                      | 1,004   |   |                                      | 0.4   | %  |        |   | 868                  |  | 0.3   | %
|                                                |  |                                      |         |   |                                      |       |    |        |   |                      |  |       |  
|Total operating expenses                        |  |                                      | 21,073  |   |                                      | 7.7   | %  |        |   | 17,401               |  | 6.5   | %
|                                                |  |                                      |         |   |                                      |       |    |        |   |                      |  |       |  
|Operating income                                |  |                                      | 4,480   |   |                                      | 1.6   | %  |        |   | 9,304                |  | 3.5   | %
|Other expense, net                              |  |                                      | 8,531   |   |                                      | 3.1   | %  |        |   | 4,512                |  | 1.7   | %
|                                                |  |                                      |         |   |                                      |       |    |        |   |                      |  |       |  
|(Loss) income before provision for income taxes |  |                                      | (4,051  | ) |                                      | (1.5  | )% |        |   | 4,792                |  | 1.8   | %
|(Benefit) provision for income taxes            |  |                                      | (605    | ) |                                      | (0.2  | )% |        |   | 562                  |  | 0.2   | %
|                                                |  |                                      |         |   |                                      |       |    |        |   |                      |  |       |  
|Net (loss) income                               |  | $                                    | (3,446  | ) |                                      | (1.3  | )% |        | $ | 4,230                |  | 1.6   | %
|                                                |  |                                      |         |   |                                      |       |    |        |   |                      |  |       |  

Revenue. Revenue increased $5.9 million, or 2.2%, to $273.9 million for the three
months ended September 30, 2008, from $268.0 million for the three months ended September 30, 2007. Revenue growth was largely attributable to the continued increase in demand for our IT products throughout Latin America and the Caribbean.
In particular, the growth in revenue was driven primarily by the increased sales of notebook computers of $13.8 million, monitors of $4.5 million, memory products of $2.0 million and printers of $1.6 million, partially offset by the reduced sales of
hard disk drives of $7.4 million, CPU devices of $4.3 million and motherboards of $1.6 million. In addition, our revenue growth was tempered by a decline in the average selling price of memory products and notebook computers in our Miami and
in-country operations. We experienced a 23.8% growth in unit shipments across our core product lines for the three months ended September 30, 2008, as compared to the three months ended September 30, 2007, partially offset by a 16.0%
decline in the average selling prices across the same core products. In-country revenue increased $6.6 million, or 3.3%, to $203.9 million for the three months ended September 30, 2008, from $197.3 million for the three months ended
September 30, 2007. In-country revenue accounted for 74.4% of our total revenue for the three months ended September 30, 2008, as compared to 73.6% for the three months ended September 30, 2007. The growth in sales derived from our
in-country operations reflects the increased sales of notebook computers, monitors and printers, partially offset by the decreased sales of software and motherboards. Miami revenue decreased $0.7 million, or 1.0%, to $70.0 million for the three
months ended September 30, 2008 (net of $63.4 million of revenue derived from sales to our in-country operations) from $70.7 million for the three months ended September 30, 2007 (net of $67.8 million of revenue derived from sales to our
in-country operations). The decline in sales derived from our Miami operations reflects the decreased sales of hard disk drives, CPUs, motherboards and software, partially offset by the increased sales of memory products, monitors, printers and
notebook computers.

Gross profit.Gross profit decreased $1.2 million, or 4.3%, to $25.6 million for the three months ended
September 30, 2008, from $26.7 million for the three months ended September 30, 2007. The decrease was primarily driven by lower sales in our Miami operations. In-country gross profit increased $0.3 million, or 1.4%, to $18.1 million for
three months ended September 30, 2008, from $17.8 million for the three months ended September 30, 2007, and accounted for 70.7% of our consolidated gross profit for the three months ended September 30, 2008, as compared to 66.7% for
the three months ended September 30, 2007. The increase in in-country gross profit was primarily attributable to the increased sales of notebook computers in Chile, Colombia, Costa Rica, Jamaica, Panama, Peru and Uruguay, despite the decline in
the average selling price of notebook computers. Also contributing to the higher in-country gross profit was the increased sales and average selling prices of monitors in Chile, Ecuador and Uruguay. This increase was partially



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offset by the effect of weakening currencies relative to the U.S. dollar in certain countries, most notably Chile, Colombia, Costa Rica, Mexico and Uruguay.
Miami gross profit decreased $1.5 million, or 15.8%, to $7.5 million for the three months ended September 30, 2008, as compared to $8.9 million for the three months ended September 30, 2007. The decrease in Miamis gross profit was
largely the result of the decline in sales of hard disk drives and CPUs coupled with a decline in the average selling price of memory products, motherboards, monitors, software, and to a lesser extent, a decline in the average selling price of
notebook computers. This decrease was slightly offset by the increased sales of memory products, monitors and printers. As a percentage of revenue, gross margin declined to 9.3% for the three months ended September 30, 2008, as compared to
10.0% for the three months ended September 30, 2007, due to a more competitive pricing environment in Miami and the effects of fluctuation in foreign currencies in several of our in-country operations.

Operating expenses.Total operating expenses increased $3.7 million, or 21.1%, to $21.1 million for the three months ended
September 30, 2008, from $17.4 million for the three months ended September 30, 2007. As a percentage of revenue, operating expenses increased to 7.7% of revenue for the three months ended September 30, 2008, as compared to 6.5% for
the three months ended September 30, 2007. In-country operating expenses increased $1.9 million, or 15.4%, to $14.0 million for the three months ended September 30, 2008, as compared to $12.1 million for the three months ended
September 30, 2007. In-country operating expenses increased due to higher salaries and payroll-related expenses including commissions, the growth of our in-country operations in Argentina, Chile and Colombia and the increased office and
warehouse expenses and marketing costs related to our operations in Chile. Salaries and payroll-related expenses in our in-country operations increased to 51.6% of total in-country operating expenses for the three months ended September 30,
2008, as compared to 49.1% for the three months ended September 30, 2007. Miami operating expenses increased $1.8 million, or 34.4%, to $7.1 million for the three months ended September 30, 2008, as compared to $5.2 million for the three
months ended September 30, 2007, primarily due to an increase in salaries and payroll-related expenses.

Operating
income. Operating income decreased $4.8 million, or 51.8%, to $4.5 million for the three months ended September 30, 2008, from $9.3 million in our in-country and Miami operations for the three months ended September 30, 2007. The
decrease was driven primarily by the decline in gross profit coupled with increased operating expenses during the three months ended September 30, 2008, as compared to the same period in 2007. In-country operating income decreased $1.3 million,
or 22.7%, to $4.2 million for the three months ended September 30, 2008, from $5.5 million for the three months ended September 30, 2007 due to the increase in operating expenses. Miami operating income decreased $3.6 million to $0.2
million for the three months ended September 30, 2008, from $3.8 million for the three months ended September 30, 2007. The decline in operating income resulted from the lower gross profit and the increase in the operating expenses during
the three months ended September 30, 2007.

Other expense.Other expense increased $4.0 million, to $8.5 million for the
three months ended September 30, 2008, from $4.5 million for the three months ended September 30, 2007. The increase was primarily attributable to the significant foreign exchange loss incurred during the three months ended
September 30, 2008, primarily due to the fluctuations in the Chilean Peso and the Colombian Peso. The foreign exchange loss increased by $4.3 million to $4.4 million for the three months ended September 30, 2008, as compared to $0.1
million for the three months ended September 30, 2007. The Chilean Peso experienced a devaluation of 7.3%, weakening to 550.6 pesos per U.S. dollar as of September 30, 2008, from 513.2 pesos per U.S. dollar as of the prior quarter end. The
Colombian Peso experienced a devaluation of 13.1%, weakening to 2,153.7 pesos per U.S. dollar as of September 30, 2008, from 1,903.4 pesos per U.S. dollar as of the prior quarter end.

Provision for income taxes.The provision for income taxes decreased $1.2 million, to a benefit of $0.6 million for the three months ended
September 30, 2008, from a provision for income taxes of $0.6 million for the three months ended September 30, 2007. The decrease resulted from lower taxable earnings for the three months ended September 30, 2008. Our effective tax
rate for the three months ended September 30, 2008, was (15)%, as compared to 12% for the three months ended September 30, 2007, resulting primarily from foreign exchange losses in our local in-country jurisdictions, particularly in Chile
and Colombia.

Net (loss) income.Net (loss) income decreased $7.7 million to a net loss of $3.4 million for the three months
ended September 30, 2008, as compared to net income of $4.2 million for the three months ended September 30, 2007. The decrease resulted from the significant foreign currency translation losses due to the effects of the weakening currency
valuations against the U.S. dollar, particularly the Chilean Peso and the Colombian Peso.



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Comparison of the nine months ended September 30, 2008 versus the nine months ended September 30, 2007

The following table sets forth selected financial data and percentages of revenue for the periods presented (in thousands):



|                                                |  |                                     |         |   |                                     |       |    |        |   |                      |  |       |  
|----------------------------------------------- |  | ----------------------------------- | ------- | - | ----------------------------------- | ----- | -- | ------ | - | -------------------- |  | ----- | -
|                                                |  | Nine Months EndedSeptember 30, 2008 |         |   | Nine Months EndedSeptember 30, 2007 |      
|                                                |  | Amount                              |         |   | Percentageof Revenue                |       |    | Amount |   | Percentageof Revenue | 
|Revenue                                         |  | $                                   | 855,204 |   |                                     | 100.0 | %  |        | $ | 766,122              |  | 100.0 | %
|Cost of revenue                                 |  |                                     | 775,833 |   |                                     | 90.7  | %  |        |   | 689,315              |  | 90.0  | %
|                                                |  |                                     |         |   |                                     |       |    |        |   |                      |  |       |  
|Gross profit                                    |  |                                     | 79,371  |   |                                     | 9.3   | %  |        |   | 76,807               |  | 10.0  | %
|Selling, general and administrative             |  |                                     | 59,090  |   |                                     | 6.9   | %  |        |   | 51,787               |  | 6.8   | %
|Depreciation and amortization                   |  |                                     | 2,878   |   |                                     | 0.3   | %  |        |   | 2,545                |  | 0.3   | %
|                                                |  |                                     |         |   |                                     |       |    |        |   |                      |  |       |  
|Total operating expenses                        |  |                                     | 61,968  |   |                                     | 7.3   | %  |        |   | 54,332               |  | 7.1   | %
|                                                |  |                                     |         |   |                                     |       |    |        |   |                      |  |       |  
|Operating income                                |  |                                     | 17,403  |   |                                     | 2.0   | %  |        |   | 22,475               |  | 2.9   | %
|Other expense, net                              |  |                                     | 18,684  |   |                                     | 2.2   | %  |        |   | 11,733               |  | 1.5   | %
|                                                |  |                                     |         |   |                                     |       |    |        |   |                      |  |       |  
|(Loss) income before provision for income taxes |  |                                     | (1,281  | ) |                                     | (0.2  | )% |        |   | 10,742               |  | 1.4   | %
|Provision for income taxes                      |  |                                     | (238    | ) |                                     |      |    |        |   | 2,459                |  | 0.3   | %
|                                                |  |                                     |         |   |                                     |       |    |        |   |                      |  |       |  
|Net (loss) income                               |  | $                                   | (1,043  | ) |                                     | (0.2  | )% |        | $ | 8,283                |  | 1.1   | %
|                                                |  |                                     |         |   |                                     |       |    |        |   |                      |  |       |  

Revenue. Revenue increased $89.1 million, or 11.6%, to $855.2 million for the nine
months ended September 30, 2008, from $766.1 million for the nine months ended September 30, 2007. Revenue growth was largely attributable to the continued increase in demand for our IT products throughout Latin America and the Caribbean.
In particular, the growth in revenue was driven primarily by the increased sales of notebook computers of $58.1 million, monitors of $12.6 million, printers of $8.4 million, memory products of $5.9 million and software of $4.4 million, partially
offset by a slight decline in sales of hard disk drives, CPU devices and motherboards. Also contributing to our revenue growth was the increased average selling price of monitors and software in our in-country operations, partially offset by the
decreased average selling price of memory products, motherboards and notebook computers in our Miami and in-country operations. We experienced a 31.0% growth in unit shipments across our core product lines for the nine months ended
September 30, 2008, as compared to the nine months ended September 30, 2007, partially offset by a 10.6% decline in average selling prices across the same core products. In-country revenue increased $73.6 million, or 13.4%, to $622.4
million for the nine months ended September 30, 2008, from $548.8 million for the nine months ended September 30, 2007. In-country revenue accounted for 72.8% of our total revenue for the nine months ended September 30, 2008, as
compared to 71.6% of our total revenue for the nine months ended September 30, 2007. The growth in sales derived from our in-country operations reflects the increased sales of notebook computers, monitors, printers, memory products and
software, partially offset by the decline in sales of motherboard and CPUs. Miami revenue increased $15.5 million, or 7.1%, to $232.8 million for the nine months ended September 30, 2008 (net of $208.0 million of revenue derived from sales to
our in-country operations) from $217.3 million for the nine months ended September 30, 2007 (net of $216.5 million of revenue derived from sales to our in-country operations). The growth in sales derived from our Miami operations reflects the
increased sales of memory products, notebook computers, printers, software, and to a lesser extent, monitors, partially offset by the decreased sales of hard disk drives and motherboards.

Gross profit.Gross profit increased $2.6 million, or 3.3%, to $79.4 million for the nine months ended September 30, 2008, from $76.8
million for the nine months ended September 30, 2007. The increase was primarily driven by higher sales in our in-country and Miami operations. In-country gross profit increased $5.3 million, or 10.4%, to $56.7 million for nine months ended
September 30, 2008, from $51.4 million for the nine months ended September 30, 2007. In-country gross profit accounted for 71.4% of our consolidated gross profit for the nine months ended September 30, 2008, as compared to 66.9% of
our consolidated gross profit for the same period in the prior year. The increase in in-country gross profit was primarily attributable to the increased sales of notebook computers in Chile, Colombia, Costa Rica, Panama and Peru, despite the decline
in the average selling prices of these products. The increase was also a result of the increased sales and average selling price of monitors in Argentina, Chile, Ecuador and Uruguay. This increase was partially offset by the effect of weakening
currencies relative to the U.S. dollar in certain countries, most notably Chile, Costa Rica and Colombia. Miami gross profit decreased $2.8 million, or 10.9%, to $22.6 million for the nine months ended September 30, 2008, as compared to $25.4
million for the nine months ended September 30, 2007. The decrease in Miamis gross profit was largely the result of the decreased sales of hard drives, the decline in sales and price of motherboards and, to a lesser extent, the decline in
the average selling price of notebook computers. As a percentage of revenue, gross margin declined slightly to 9.3% for the nine months ended September 30, 2008, as compared to 10.0% for the nine months ended September 30, 2007, due to the
more competitive pricing environment in Miami and the effects of fluctuation in foreign currencies in several of our in-country operations.

Operating expenses.Total operating expenses increased $7.6 million, or 14.1%, to $62.0 million for the nine months ended September 30, 2008, from $54.3 million for the nine months ended September 30, 2007. As a
percentage of revenue, operating



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expenses increased slightly to 7.2% of revenue for the nine months ended September 30, 2008, as compared to 7.1% for the nine months ended
September 30, 2007. The increase in operating expenses was driven in part by higher salaries and payroll-related expenses of $6.2 million, or 23.6%, to $32.3 million for the nine months ended September 30, 2008, from $26.1 million for the
nine months ended September 30, 2007. In-country operating expenses increased $7.2 million, or 21.0%, to $41.4 million for the nine months ended September 30, 2008, as compared to $34.2 million for the nine months ended September 30,
2007. In-country operating expenses increased due to the higher salaries and payroll-related expenses related to the growth of our in-country operations in Argentina, Chile and Colombia, and the increased marketing costs related to our operations in
Chile. The increase also resulted from the provision for the potential payroll tax and VAT exposure related to the Companys operations in a foreign jurisdiction that the Company recorded during the second quarter of 2008. Salaries and
payroll-related expenses in our in-country operations remained steady at 51.0% of total in-country operating expenses for the nine months ended September 30, 2008, as compared to 50.7% for the same period in the prior year. Miami operating
expenses increased $0.5 million, or 2.3%, to $20.6 million for the nine months ended September 30, 2008, as compared to $20.1 million for the nine months ended September 30, 2007, primarily due to an increase in salary and payroll-related
expenses.

Operating income. Operating income decreased $5.1 million, or 22.6%, to $17.4 million for the nine months ended
September 30, 2008, from $22.5 million for the nine months ended September 30, 2007. The decrease was driven primarily by the decline in gross profit combined with the higher operating expenses. In-country operating income decreased $1.4
million, or 8.5%, to $15.6 million for the nine months ended September 30, 2008, from $17.0 million for the nine months ended September 30, 2007, due mainly to the increase in operating expenses. Miami operating income decreased $3.6
million to $1.8 million for the nine months ended September 30, 2008, from $5.5 million for the nine months ended September 30, 2007, due mainly to the decline in gross profit.

Other expense.Other expense increased $7.0 million, or 59.2%, to $18.7 million for the nine months ended September 30, 2008, from
$11.7 million for the nine months ended September 30, 2007. The increase was primarily attributable to the significant foreign exchange losses incurred during the nine months ended September 30, 2008, particularly resulting from the
fluctuations in the Costa Rican Colon, the Chilean Peso and the Colombian Peso. The foreign exchange gain decreased by $7.5 million to a foreign exchange loss of $6.6 million for the nine months ended September 30, 2008, from a foreign exchange
gain of $0.8 million for the nine months ended September 30, 2007. The Costa Rican Colon experienced a devaluation of 11.3%, weakening to 564.4 colon per U.S. dollar as of September 30, 2008, from 507.2 colon per U.S. dollar as of
December 31, 2007. The Chilean Peso experienced a devaluation of 10.6%, weakening, to 550.6 pesos per U.S. dollar as of September 30, 2008, from 497.7 pesos per U.S. dollar as of December 31, 2007. The Colombian Peso experienced a
devaluation of 5.4%, weakening, to 2,153.7 pesos per U.S. dollar as of September 30, 2008, from 2,044.2 pesos per U.S. dollar as of December 31, 2007.

Provision for income taxes.The provision for income taxes decreased $2.7 million, to a benefit of $0.2 million for the nine months ended September 30, 2008, from a provision of $2.5 million for the
nine months ended September 30, 2007. The decrease resulted from lower taxable earnings and a provision for the potential denial of deductions taken related to the Companys operations in a foreign jurisdiction during the nine months ended
September 30, 2008. Our effective tax rate for the nine months ended September 30, 2008, was (18)%, as compared to the 23% rate for the nine months ended September 30, 2007, resulting primarily from the foreign exchange losses in our
local in-country jurisdictions, particularly in Costa Rica, Chile and Colombia.

Net income.Net income decreased $9.3
million, to a loss of $1.0 million for the nine months ended September 30, 2008, as compared to income of $8.3 million for the nine months ended September 30, 2007. The decrease resulted from the significant loss in foreign exchange due to
the effects of the weakening of foreign currencies relative to the U.S. dollar, particularly the Costa Rican Colon, the Chilean Peso and the Colombian Peso.

Liquidity and Capital Resources

The IT products distribution
business is working-capital intensive. Historically, we have financed our working capital needs through a combination of cash generated from operations, trade credit from manufacturers, borrowings under revolving bank lines of credit (including
issuance of letters of credit) and asset-based financing arrangements that we have established in certain Latin American markets and the issuance of our 113/4% Senior Notes.

Our working capital at
September 30, 2008 decreased to $90.4 million, as compared to $101.6 million at December 31, 2007. The decrease was primarily attributable to the reduction in accounts receivable, an increase in accounts payable, partially offset by the
growth in inventories. Our cash and cash equivalents amounted to $22.2 million at September 30, 2008, as compared to $29.4 million at December 31, 2007. The decrease was primarily attributable to the redemption of our 113/4% Senior Notes for cancellation in satisfaction of our mandatory sinking fund requirement, partially offset by the increase in our
accounts payable and lines of credit borrowings.



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Changes in Financial Condition

The following table summarizes our cash flows for the periods presented:



|                                                                              |  |                                        |        |   |      |   |         |  
|----------------------------------------------------------------------------- |  | -------------------------------------- | ------ | - | ---- | - | ------- | -
|                                                                              |  | For the Nine Months EndedSeptember 30, |       
|                                                                              |  | 2008                                   |        |   | 2007 |  
|                                                                              |  | (Dollars in thousands)                 |       
|Cash flows used in operating activities                                       |  | $                                      | (7,273 | ) |      | $ | (14,549 | )
|Cash flows used in investing activities                                       |  |                                        | (4,718 | ) |      |   | (5,081  | )
|Cash flows provided by financing activities                                   |  |                                        | 4,175  |   |      |   | 12,427  |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents |  |                                        | 586    |   |      |   | (51     | )
|                                                                              |  |                                        |        |   |      |   |         |  
|Net decrease in cash and cash equivalents                                     |  | $                                      | (7,230 | ) |      | $ | (7,254  | )
|                                                                              |  |                                        |        |   |      |   |         |  

Cash flows from operating activities. Our cash flows from operating activities
resulted in a cash requirement of $7.3 million for the nine months ended September 30, 2008, as compared to $14.5 million for the nine months ended September 30, 2007. The decrease in our cash used in operating activities was primarily
driven by an improvement in our trade accounts receivable days, partially offset by higher inventory days.

Cash flows from investing
activities. Our cash flows from investing activities resulted in a cash requirement of $4.7 million for the nine months ended September 30, 2008, as compared to $5.1 million for the nine months ended September 30, 2007. The
decreased cash requirement was due primarily to the absence of capital expenditures associated with the opening of our headquarters facility in Miami, Florida and the purchase of additional warehouse space in Chile during 2007, partially offset by
the increase in capital expenditures associated with the new facilities in Costa Rica and Peru.

Cash flows from financing
activities. Our cash flows from financing activities resulted in a cash generation of $4.2 million for the nine months ended September 30, 2008, as compared to $12.4 million for the nine months ended September 30, 2007. This
decline was driven by the decrease in our lines of credit borrowings.

Working Capital Management

The successful management of our working capital needs is a key driver of our growth and cash flow generation. The following table sets forth certain
information about the largest components of our working capital: our trade accounts receivable, inventories and accounts payable:



|                                  |  |                         |         |   |                        |   |         |  
|--------------------------------- |  | ----------------------- | ------- | - | ---------------------- | - | ------- | -
|                                  |  | As ofSeptember 30, 2008 |         |   | As ofDecember 31, 2007 |  
|                                  |  | (Dollars in thousands)  |        
|Balance sheet data:               |  |                         |         |   |                        |   |         |  
|Trade accounts receivable, net    |  | $                       | 111,535 |   |                        | $ | 116,744 |  
|Inventories                       |  |                         | 135,238 |   |                        |   | 116,961 |  
|Accounts payable                  |  |                         | 155,074 |   |                        |   | 141,911 |  
|                                  | 
|                                  |  | (Data in days)          |        
|Other data:                       |  |                         |         |   |                        |   |         |  
|Trade accounts receivable days(1) |  |                         | 35.6    |   |                        |   | 41.0    |  
|Inventory days(2)                 |  |                         | 47.6    |   |                        |   | 45.5    |  
|Accounts payable days(3)          |  |                         | (54.6   | ) |                        |   | (55.3   | )
|                                  |  |                         |         |   |                        |   |         |  
|Cash conversion cycle days(4)     |  |                         | 28.6    |   |                        |   | 31.2    |  
|                                  |  |                         |         |   |                        |   |         |  



|(1) | Trade accounts receivable days is defined as our consolidated trade accounts receivable (net of allowance for doubtful accounts) as of the last day of the period divided by
our consolidated revenue for such period times 273 days as of the current period end date and 365 days as of the prior year end date. Our consolidated trade accounts receivable for our in-country operations include value added tax at a rate
of between 5% and 27% (depending on the country). The exclusion of such value added tax would result in lower trade accounts receivable days.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Inventory days is defined as our consolidated inventory as of the last day of the quarter divided by our consolidated cost of goods sold for such period times 273 days
as of the current period end date and 365 days as of the prior year end date.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(3) | Accounts payable days is defined as our consolidated accounts payable as of the last day of the quarter divided by our consolidated cost of goods sold for such period
times 273 days as of the current period end date and 365 days as of the prior year end date.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Cash conversion cycle is defined as our trade accounts receivable days plus inventory days less accounts payable days.
|--- | ----------------------------------------------------------------------------------------------------------------------

Cash conversion cycle days. One measurement we use to monitor working capital is the concept of cash conversion cycle, which measures the
number of days we take to convert trade accounts receivable and inventory, net of accounts payable, into cash. Our cash conversion cycle decreased to 28.6 days as of September 30, 2008 from 31.2 days as of December 31, 2007. This
improvement was primarily driven by the decrease in our accounts receivable days, partially offset by the decrease in our trade accounts payable days and a slight increase in our inventory days. Trade accounts receivable days decreased to 35.6 days
as of September 30, 2008 from 41.0 days as of December 31, 2007, due to improved collections in Miamis export business. Inventory days increased to 47.6 days as of September 30, 2008 from 45.5 days as of December 31, 2007,
due to our increased levels of inventory and inventory-in-transit, which was offset by our improved inventory management efforts.

Trade accounts receivable. We principally sell products to a large base of third-party distributors, resellers and retailers throughout Latin America and the Caribbean and to other Miami-based exporters of IT products to Latin
America and the Caribbean. Credit risk on trade receivables is diversified over several geographic areas and a large number of customers. No one customer accounted for more than 2.0% of sales as of September 30, 2008 and 2007. We provide trade
credit to our customers in the normal course of business. The collection of a substantial portion of our receivables is susceptible to changes in Latin America and Caribbean economies and political climates. We monitor our exposure for credit losses
and maintain allowances for anticipated losses after giving consideration to delinquency data, historical loss experience, and economic conditions impacting our industry. The financial condition of our customers and the related allowance for
doubtful accounts is continually reviewed by management.

Prior to extending credit to a customer, we analyze the customers financial
history and obtain personal guarantees, where appropriate. Our Miami and in-country operations in Chile use credit insurance and make provisions for estimated credit losses. Our other in-country operations make provisions for estimated credit losses
but generally do not use credit insurance. Our Miami operations has a credit insurance policy covering trade sales to non-affiliated buyers with Euler Hermes ACI. The policys aggregate limit is $20.0 million with an aggregate deductible of
$0.3 million with expiration dated July 31, 2009. In addition, 10% or 20% buyer coinsurance provisions and sub-limits in coverage on a per-buyer and per-country basis apply.

Our large customer base and our credit policies allow us to limit and diversify our exposure to credit risk on our trade accounts receivable.

Inventories. We seek to minimize our inventory levels and inventory obsolescence rates through frequent product shipments, close and
ongoing monitoring of inventory levels and customer demand patterns, optimal use of carriers and shippers and the negotiation of clauses in some vendor supply agreements protecting against loss of value of inventory in certain circumstances. The
Miami distribution center ships products to each of our In-country operations approximately twice per week by air and once per week by sea. These frequent shipments result in efficient inventory management and increased inventory turnover. We do not
have long-term contracts with logistics providers, except in Mexico and Chile. Where we do not have long-term contracts, we seek to obtain the best rates and fastest delivery times on a shipment-by-shipment basis. Our Miami operations also
coordinates direct shipments to third-party customers and In-country operations from vendors in Asia.

Accounts payable. We
seek to maximize our accounts payable days through centralized purchasing and management of our vendor back-end rebates, promotions and incentives. This centralization of the purchasing function allows our in-country operations to focus their
attention on more country-specific issues such as sales, local marketing, credit control and collections. The centralization of purchasing also allows our Miami operation to control the records and receipts of all vendor back-end rebates, promotions
and incentives to ensure their collection and to adjust pricing of products according to such incentives.

Capital Expenditures and Investments

Capital expenditures decreased to $4.9 million for the nine months ended September 30, 2008, as compared to $5.6 million for the nine
months ended September 30, 2007. The decrease was primarily driven by absence of capital expenditures related to the opening of our headquarters facility in Miami, Florida and the purchase of additional warehouse space in Chile in 2007,
partially offset by capital expenditures associated with the new facilities in Costa Rica and Peru.

We anticipate that capital
expenditures will be approximately $3.5 million per year over the next few years as we continue to implement our core ERP system and upgrade our facilities in connection with the growth in our business.

Capital Resources

We currently believe that our cash
on hand, anticipated cash provided by operations, available and anticipated trade credit and borrowings under our existing credit facility and lines of credit, will provide sufficient resources to meet our anticipated debt service



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requirements, capital expenditures and working capital needs for the next 12 months. If our results of operations are not as favorable as we anticipate
(including as a result of increased competition), our funding requirements are greater than we expect (including as a result of growth in our business), or our liquidity sources are not at anticipated levels (including levels of available trade
credit), our resources may not be sufficient and we may have to raise additional financing or capital to support our business. In addition, we may not be able to accurately predict future operating results or changes in our industry which may change
these needs. We continually assess our capital needs and may seek additional financing as needed to fund working capital requirements, capital expenditures and potential acquisitions. We cannot assure you that we will be able to generate anticipated
levels of cash from operations or to obtain additional debt or equity financing in a timely manner, if at all, or on terms that are acceptable to us. Our inability to generate sufficient cash or obtain financing could hurt our results of operations
and financial condition and prevent us from growing our business as anticipated.

The Company has lines of credit, short-term overdraft and
credit facilities with various financial institutions in the country in which the Companys individual business resides. Many of our in-country operations also have limited credit facilities. These credit facilities fall into three categories:
asset-based financing facilities, letter of credit and performance bond facilities, and unsecured revolving credit facilities and lines of credit. As of September 30, 2008 and December 31, 2007, the total amounts available under our credit
facilities were $10.8 million and $19.5 million, respectively, and the total amounts outstanding under these facilities were $35.8 million and $26.4 million, respectively. As of September 30, 2008 and December 31, 2007, the outstanding
balances of our Miami credit facility were $26.8 million and $20.6 million, respectively, and the outstanding balances of our in-country credit facilities were $9.0 million and $5.8 million, respectively. The growth in the outstanding balance is
primarily attributed to the increased borrowings by our subsidiaries to meet increased local working capital requirements, mainly related to operations in Peru, Guatemala and Colombia.

On August 25, 2005, the Company consummated a $120.0 million high yield notes offering in
aggregate principal amount of 113/4% Second Priority Senior Secured Notes (the 113/4% Senior Notes). The 113/4% Senior Notes were sold at 99.057% of face value and carry a coupon rate of 113/4% and are a
second priority senior secured obligation of the Company due January 15, 2011. The proceeds of the offering were used to repay existing indebtedness, pay a dividend to shareholders, and pay fees and expenses associated with the debt offering
with the remaining balance to be used for general corporate purposes. The 113/4% Senior Notes are secured on a second priority
basis with 100.0% of the common shares of Intcomex Holdings, LLC and Intcomex Holdings SPC-1, LLC, and 65.0% of the shares of IXLA Holdings, LTD plus a second priority lien on the assets of SBA.

Concurrent with the high yield debt offering, SBA entered into a revolving credit facility with Comerica Bank. As of September 30, 2008, SBA has
$30.0 million available under its revolving credit facility with Comerica Bank including $1.4 million of letter of credit commitments, and a capital expenditures limit of $1.0 million. Borrowings against the facility bear interest at the U.S. prime
lending rate (5.00% at September 30, 2008) or Eurodollar rate plus 1.9% and are secured on a first priority basis with all the assets of SBA. Interest is due monthly and the facility has a maturity date of August 25, 2010. Amounts borrowed
under the facility may be repaid and re-borrowed at any time during the term of the agreement. Borrowing capacity is established monthly based on certain parameters established under the agreement. Advances under the facility are provided based on
85.0% of eligible domestic accounts receivable and 67.5% of eligible foreign accounts receivable plus 60.0% of eligible domestic inventory, less any credit facility reserves. The credit facility contains certain financial and non-financial
covenants, including but not limited to, maintenance of a minimum level of tangible effective net worth, as defined and annual limitations on capital expenditures.

On March 28, 2008, SBA obtained an amendment to its credit agreement with Comerica Bank for the definition of the tangible effective net worth and to increase the senior debt to tangible effective net worth ratio
to not more than 3.5 to 1.0, effective for the quarters ended March 31, 2008 and June 30, 2008, and not more than 3.0 to 1.0 thereafter. In addition, SBA obtained a waiver to its credit agreement for the senior debt to tangible effective
net worth ratio as of December 31, 2007.

On May 14, 2008, SBA obtained a waiver to its credit agreement with Comerica Bank for
the minimum tangible effective net worth and the senior debt to tangible effective net worth ratio as of March 31, 2008. SBA also obtained an amendment to its credit agreement decreasing the minimum tangible effective net worth of $25.0 million
to $20.0 million, effective for the quarters ended September 30, 2008 and March 31, 2009, requiring SBA to maintain a senior debt to tangible effective net worth ratio of not more than 2.5 to 1.0, and requiring SBA to maintain a minimum
tangible effective net worth of $25 million for the quarters ended June 30, 2008, December 31, 2008, June 30, 2009, and for each quarter end thereafter. The amendment required SBAs senior debt to tangible effective net worth
ratio to be not more than 5.0 to 1.0, effective as of December 31, 2008, and December 31 of each year thereafter. The amendment increased SBAs senior debt to tangible effective net worth ratio to not more than 6.0 to 1.0, effective
as of June 30, 2008, September 30, 2008, March 31, 2009, and June 30, September 30 and March 31 of each year thereafter. Under the amendment, borrowings against the facility bore interest at the U.S. prime lending
rate (5.00% at June 30, 2008) or Eurodollar rate plus 2.4%.

On August 14, 2008, SBA obtained a waiver to its credit agreement
for the minimum tangible effective net worth and senior debt to tangible effective net worth ratio under its credit agreement with Comerica Bank as a result of SBAs default of its minimum tangible effective net worth and senior debt to
tangible effective net worth ratio under its credit agreement as of June 30, 2008. Under the agreement, SBA is required to maintain a minimum tangible effective net worth of $25.0 million and a senior debt to tangible effective net worth ratio
of not more than 6.0 to 1.0.



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On November 13, 2008, SBA obtained a waiver to its credit agreement for the minimum tangible
effective net worth and senior debt to tangible effective net worth ratio under its credit agreement with Comerica Bank, as a result of SBAs default of its minimum tangible effective net worth and senior debt to tangible effective net worth
ratio under its credit agreement as of September 30, 2008. SBA also obtained an amendment to its credit agreement increasing the cap of the inventory portion on the borrowing base from $12.5 million to $14.0 million, amending the borrowing rate
to the Eurodollar rate plus 3.5% and the maturity date to January 1, 2010, and requiring increased financial reporting disclosures made to Comerica Bank on a continual basis.

As of September 30, 2008, SBA was in compliance with all other financial covenants.

As a result of a privately negotiated arms length transaction arranged by Anthony Shalom and
Michael Shalom, on August 15, 2007, we repurchased $2.2 million of the 113/4% Senior Notes held by the Pledging
Noteholders, at the same market price as $2.8 million of the 113/4% Senior Notes we purchased in the open market at the end of
business on the prior day. We delivered to the trustee under the indenture governing the 113/4% Senior Notes, all $5.0 million
aggregate principal amount of the 113/4% Senior Notes purchased on such dates for cancellation in satisfaction of our mandatory
sinking fund redemption that we were required to make by August 15, 2007 under the indenture. On December 14, 2006, the Company completed the exchange of 100.0% of the outstanding principal of the 113/4% Senior Notes for SEC registered publicly tradable notes that have substantially identical terms and conditions as the initial
Notes.

On March 13, 2008, the Company
repurchased $1.0 million of the 113/4% Senior Notes in an arms length transaction, at 98.25% of face value plus accrued
interest. As of September 30, 2008 and December 31, 2007, $109.6 million and $114.5 million, respectively, of the 113/4% Senior Notes remained outstanding.

On April 9, 2008,
the Company purchased $1.0 million of its 113/4% Senior Notes at 96.25% of face value plus accrued interest and an additional
$1.0 million on April 25, 2008, at 96.5% of face value plus accrued interest in arms length transactions in connection with its mandatory sinking fund redemption requirement. On June 24, 2008, the Company purchased $2.0 million of
its 113/4% Senior Notes in arms length transactions at 90.00% of face value plus accrued interest in connection with its
mandatory sinking fund redemption requirement.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in conformity with U.S. GAAP. The preparation of these financial statements requires us to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of material contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting
period. On an ongoing basis, we review and evaluate our estimates and assumptions, including, but not limited to, those that relate to revenue recognition, accounts receivable and vendor programs; inventories; goodwill and other long-lived assets;
and income taxes. Our estimates are based on our historical experience and a variety of other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making our estimates about the carrying
values of assets and liabilities that are not readily available from other sources. Although we believe our estimates, judgments and assumptions are appropriate and reasonable based upon available information, these assessments are subject to a wide
range of factors; therefore, actual results could differ from these estimates.

We believe the following critical accounting policies are
impacted by our judgment or by estimates used in the preparation of our consolidated financial statements.

Revenue recognition and
accounts receivable. Revenue is recognized once the following criteria are met: we have persuasive evidence that an arrangement exists; delivery to our customer has occurred, which happens at the point of shipment (this includes the
transfer of both title and risk of loss, provided that no significant obligations remain); the price is fixed and determinable; and collectibility is reasonably assured. We allow our customers to return defective products for exchange or credit
within 30 days of delivery based on the warranty of the OEM. An exception is infrequently made for long-standing customers with current accounts, on a case-by-case basis and upon approval by our management. A return is recorded in the period of the
return because, based on our past experience, these returns are infrequent and immaterial.

Shipping and handling costs billed to customers
are included in revenue and related costs are included in the cost of sales.

We provide allowances for doubtful accounts on our accounts
receivable for estimated losses resulting from the inability of our customers to make required payments. Changes in the financial condition of our customers or other unanticipated events, which may affect their ability to make payments, could result
in charges for additional allowances exceeding our expectations. These estimates require judgment and are influenced by the following considerations: the large number of customers and their dispersion across wide geographic areas; the fact that no
single customer accounted for 2.0% or more of our revenue during the three months ended September 30, 2008 and 2007; a dedicated credit department at our Miami headquarters and at each of our in-country subsidiaries; aging of receivables,
individually and in the aggregate; credit insurance coverage; and the value and adequacy of collateral received from our customers in certain circumstances. Uncollectible accounts are written-off annually against the allowance.



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In accordance with EITF Issue No. 06-03, How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross Versus Net Presentation), our revenues are reported net of any sales, gross receipts or value added taxes.

We extend a warranty for products to customers with the same terms as the OEMs warranty to use. All product-related warranty costs incurred by us
are reimbursed by OEMs.

Vendor Programs. We receive funds from vendors for price protection, product rebates, marketing and
promotions and competitive programs, which are recorded as adjustments to product costs or selling, general and administrative expenses according to the nature of the program. Some of these programs may extend over one or more quarterly reporting
periods. We recognize rebates or other vendor incentives as earned based on sales of qualifying products or as services are provided in accordance with the terms of the related program. We provide reserves for receivables on vendor programs for
estimated losses resulting from vendors inability to pay or rejections of claims by vendors. These reserves require judgment and are based upon aging and managements estimate of collectibility.

Inventories. Our inventory levels are based on our projections of future demand and market conditions. Any unanticipated decline in demand
or technological changes could cause us to have excess or obsolete inventories. On an ongoing basis, we review for estimated excess or obsolete inventories and make provisions for our inventories to reflect their estimated net realizable value based
upon our forecasts of future demand and market conditions. These forecasts require judgment as to future demand and market conditions. If actual market conditions are less favorable than our forecasts, additional inventory obsolescence provisions
may be required. Our estimates are influenced by the following considerations: the availability of protection from loss in value of inventory under certain vendor agreements, the extent of our right to return to vendors a percentage of our
purchases, the aging of inventories, variability of demand due to economic downturn and other factors, and the frequency of product improvements and technological changes. Rebates earned on products sold are recognized when the product is shipped to
a third party customer and are recorded as a reduction to cost of sales in accordance with EITF Issue No. 02-16, Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor.

Goodwill and other long-lived assets.Our goodwill represents the excess of the purchase price over the fair value of the net assets
of acquired businesses. We assess goodwill for impairment on an annual basis, or sooner, if events indicate such a review is necessary. Potential impairment exists if the fair value of a reporting unit to which goodwill has been allocated is less
than the carrying value of the reporting unit. The amount of the impairment to recognize, if any, is calculated as the amount by which the carrying value of the goodwill exceeds its implied value. Future changes in the estimates used to conduct the
impairment review, including revenue projections, market values and changes in the discount rate used could cause the analysis to indicate that our goodwill is impaired in subsequent periods and result in a write-off of a portion or all of the
goodwill. The discount rate used is based on our capital structure and, if required, an additional premium on the reporting unit based upon its geographic market and operating environment. The assumptions used in estimating revenue projections are
consistent with internal planning.

In addition, we review other long-lived assets (principally property, plant and equipment) for
impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying amount of an asset exceeds the assets fair value, we measure and record an impairment loss for the
excess. We assess an assets fair value by determining the expected future undiscounted cash flows of the asset. There are numerous uncertainties and inherent risks in conducting business, such as general economic conditions, actions of
competitors, ability to manage growth, actions of regulatory authorities, pending investigations or litigation, customer demand and risk relating to international operations. Adverse effects from these or other risks may result in adjustments to the
carrying value of our other long-lived assets.

Income taxes. As part of the process of preparing our consolidated financial
statements, we calculate our income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. This process involves calculating our actual current tax expense together with assessing any
temporary differences resulting from the different treatment of certain items, such as the timing for recognizing revenues and expenses, for tax and financial reporting purposes. These differences may result in deferred tax assets and liabilities,
which are included in our consolidated balance sheet. We are required to assess the likelihood that our deferred tax assets, which include temporary differences that are expected to be deductible in future years, will be recoverable from future
taxable income or other tax planning strategies. The Company is in the process of implementing tax strategies in order to utilize its deferred tax assets. If recovery is not likely, we must provide a valuation allowance based on our estimates of
future taxable income in the various taxing jurisdictions, and the amount of deferred taxes that are ultimately realizable. The provision for tax liabilities involves evaluations and judgments of uncertainties in the interpretation of complex tax
regulations by various taxing authorities.

Tax positions are measured under the provisions of Financial Accounting Standards Board
(FASB) Interpretation No. (FIN) 48-1, Definition of Settlement in FASB Interpretation No. 48 (FIN 48-1), an amendment to FIN 48, Accounting for Uncertainty in Income Taxesan interpretation of
FASB Statement No. 109 (FIN 48). FIN 48-1 clarifies how an enterprise should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits effective upon the



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initial adoption of FIN 48. This interpretation requires companies to determine whether it is more likely than not that a tax position will be sustained upon
examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. The portion of the benefits associated with tax positions taken that exceeds the amount measured is reflected as a
liability for unrecognized tax benefits in the accompanying consolidated balance sheets. Interest associated with unrecognized tax benefits is classified as interest expense and penalties that would be payable to the taxing authorities upon
examination are classified in selling, general and administrative expenses, if any, in the consolidated statements of operations.

In the
event of a distribution of the earnings of certain international subsidiaries, we would be subject to withholding taxes payable on those distributions to the relevant foreign taxing authorities. Since we currently intend to reinvest undistributed
earnings of these international subsidiaries indefinitely, we have made no provision for income taxes that might be payable upon the remittance of these earnings. We have also not determined the amount of tax liability associated with an unplanned
distribution of these permanently reinvested earnings. In the event that in the future we consider that there is a reasonable likelihood of the distribution of the earnings of these international subsidiaries (for example, if we intend to use those
distributions to meet our liquidity needs), we will be required to make a provision for the estimated resulting tax liability, which will be subject to the evaluations and judgments of uncertainties described above.

We conduct business globally and, as a result, one or more of our subsidiaries, file income tax returns in U.S. federal, state and foreign jurisdictions.
In the normal course of business, we are subject to examination by taxing authorities in the countries in which we operate. Currently, we are under on going tax examinations in several countries. While such examinations are subject to inherent
uncertainties, we do not currently anticipate that any such examination would have a material adverse impact on our consolidated financial statements.

Commitments and Contingencies.The Company accrues for contingent obligations when the obligation is probable and the amount is reasonably estimable. As facts concerning contingencies become known, we
reassess our position and make appropriate adjustments to the financial statements, if any. Estimates that require judgment and are particularly sensitive to future changes include those related to taxes, legal matters, the imposition of
international governmental monetary, fiscal or other controls, changes in the interpretation and enforcement of international laws (in particular related to items such as duty and taxation), and the impact of local economic conditions and practices,
which are all subject to change as events evolve and as additional information becomes available.

As part or our normal course of
business, we are involved in certain claims, regulatory and tax matters. In the opinion of our management, the final disposition of such matters will not have a material adverse impact on our results of operations and financial condition.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

There have been no material changes in our quantitative and qualitative disclosures about market risk during the fiscal quarter covered by this Quarterly Report from those disclosed in our Annual Report. For a detailed discussion of the
quantitative and qualitative disclosures about market risk, see Part II. Item 7. Quantitative and Qualitative Disclosures About Market Risk in our Companys Annual Report.



|Item 4. | Controls and Procedures.
|------- | ------------------------

There have been no
changes in the Companys internal control over financial reporting that have occurred during the fiscal quarter covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, the Companys
internal control over financial reporting.

As of the end of the period covered by this Quarterly Report, we carried out an evaluation,
under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in
Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)).

Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2008, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports that we file under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.



Following local managements identification of a material weakness in one of the Companys foreign operations control environment during the
second quarter of 2008, the Companys management has undertaken corrective actions to remediate the failed controls surrounding the foreign operating entitys purchase and receipt of products. The Company instituted enhanced controls
surrounding the three-way matching process, which compares the original purchase order, invoice and receipt records of the purchased products to support the approval and payment for services rendered or products purchased. The Company enhanced the
controls surrounding the process to ensure the accuracy and completeness of the filing of payroll tax and VAT returns to the local jurisdiction tax authorities. The Company replaced individuals in financial positions including the local Controller
in order to strengthen the control environment in the affected foreign operating entity. The Company implemented an enhanced training program to communicate to local foreign management the impact a failure related to this process could potentially
have on the Companys financial statements. The Company conducted additional compliance and risk assessment training at all foreign operating entities and expanded executive managements oversight and ongoing communications regarding the
importance of adherence to internal controls and established policies and procedures.



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##### Table of Contents

Part II  OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

As of September 30, 2008,
the Company had no material legal proceedings pending. From time to time, we are the subject of legal proceedings arising in the ordinary course of business. We do not believe that any proceedings currently pending or threatened will have a material
adverse affect on our business, consolidated results of operations and financial condition.



|Item 1A. | Risk Factors.
|-------- | -------------

In addition to the other information
set forth in this Quarterly Report, factors discussed in Part IFinancial Information, 1A. Risk Factors in the Companys Annual Report, which could materially affect our business, future results of operations and financial
condition should be carefully considered together with the additional risks set forth below. The risk factors described in the Companys Annual Report may not be the only risk factors facing our Company. Additional risks and uncertainties that
we currently deem to be immaterial or are not currently known to us may also materially and adversely affect our business, consolidated results of operations and financial condition.

Disruptions in the credit markets and difficult conditions in the global economy in general have created uncertainty, which could adversely affect our business.

As widely reported, global financial markets have been experiencing extreme disruption in recent months, including, among other things, volatility in
securities prices, severely diminished liquidity and credit availability, and rating downgrades of certain investments. The current tightening of credit in financial markets could adversely affect our vendors or our customers ability to
obtain financing for operations and could result in a decrease in the demand for IT products, which could hurt our sales, margins, and profitability. In particular, a prolonged worldwide economic downturn may further intensify competition,
regionally and internationally, which may lead to lower sales or reduced sales growth, loss of market share, reduced prices, lower gross margins, loss of vendor rebates, extended payment terms with customers, increased bad debt risks, shorter
payment terms with vendors, increased capital investment and interest costs, increased inventory losses related to obsolescence and/or excess quantities, all of which could adversely affect our results of operations and financial condition.

Our business requires significant levels of capital to finance accounts receivable and product inventory that is not financed by trade
creditors. This is especially true when our business is expanding, including through acquisitions. We believe that our existing sources of liquidity, including cash resources and cash provided by operating activities, supplemented as necessary with
funds available under our credit arrangements, will provide sufficient resources to meet our present and future working capital and cash requirements for at least the next twelve months. However, the capital and credit markets have been experiencing
unprecedented levels of volatility and disruption. Such market conditions may affect our ability to access the capital markets or the capital we require may not be available on terms acceptable to us, or at all, due to inability of our finance
partners to meet their commitments to us. We are unable to predict the likely duration and severity of the current disruption in financial markets and adverse economic conditions in the United States and other countries and the impact these events
may have on our operations and the industry in general.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------

Not
applicable.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

Not applicable.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

Not
applicable.



|Item 5. | Other Information.
|------- | ------------------

Not applicable.



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##### Table of Contents

|Item 6. | Exhibits.
|------- | ---------



|            |  |                                                                                                                                                     
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                         
|10.1        |  | Amendment No. 6 to Credit Agreement, dated as of November 13, 2008, by and among Software Brokers of America, Inc. and Comerica Bank. *             
|            | 
|31.1        |  | Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                               
|            | 
|31.2        |  | Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                               
|            | 
|32.1        |  | Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|            | 
|32.2        |  | Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*



|* | Filed herewith.
|- | ---------------



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                      |  |                                    |  |                  
|--------------------- |  | ---------------------------------- |  | -----------------
|Signature             |  | Title                              |  | Date             
|                      |  |                                   
|/s/ Anthony Shalom    |  | Chairman of the Board of Directors |  | November 14, 2008
|Anthony Shalom        |  | Chief Executive Officer            |  |                  
|                      |  |                                   
|/s/ Michael F. Shalom |  |                                    |  |                  
|Michael F. Shalom     |  | President                          |  | November 14, 2008
|                      |  |                                   
|/s/ Russell A. Olson  |  |                                    |  |                  
|Russell A. Olson      |  | Chief Financial Officer            |  | November 14, 2008



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##### Table of Contents

Exhibit Index



|            |  |                                                                                                                                                    
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                        
|10.1        |  | Amendment No. 6 to Credit Agreement, dated as of November 13, 2008, by and among Software Brokers of America, Inc. and Comerica Bank.              
|            | 
|31.1        |  | Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|            | 
|31.2        |  | Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|            | 
|32.1        |  | Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|            | 
|32.2        |  | Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



42