##### 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, 2009

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).     ̈  Yes     ̈  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 October 23, 2009, 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



|           |  |                                                                                                           |  |   
|---------- |  | --------------------------------------------------------------------------------------------------------- |  | --
|           |  | Page                                                                                                     
|           |  | PART I  FINANCIAL INFORMATION                                                                            |  |   
|           |  |                                                                                                          
|Item 1.    |  | Financial Statements.                                                                                     |  |   
|           |  |                                                                                                          
|           |  | Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008                      |  | 3 
|           |  |                                                                                                          
|           |  | Condensed Consolidated Statements of Operations  Three and nine months ended September 30, 2009 and 2008 |  | 4 
|           |  |                                                                                                          
|           |  | Condensed Consolidated Statements of Cash Flows  Nine months ended September 30, 2009 and 2008           |  | 5 
|           |  |                                                                                                          
|           |  | Notes to Condensed Consolidated Financial Statements                                                      |  | 6 
|           |  |                                                                                                          
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations.                    |  | 28
|           |  |                                                                                                          
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk.                                               |  | 41
|           |  |                                                                                                          
|Item 4T.   |  | Controls and Procedures.                                                                                  |  | 41
|           |  |                                                                                                          
|           |  | PART II  OTHER INFORMATION                                                                               |  |   
|           |  |                                                                                                          
|Item 1.    |  | Legal Proceedings.                                                                                        |  | 41
|           |  |                                                                                                          
|Item 1A.   |  | Risk Factors.                                                                                             |  | 41
|           |  |                                                                                                          
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds.                                              |  | 41
|           |  |                                                                                                          
|Item 3.    |  | Defaults Upon Senior Securities.                                                                          |  | 41
|           |  |                                                                                                          
|Item 4.    |  | Submission of Matters to a Vote of Security Holders.                                                      |  | 41
|           |  |                                                                                                          
|Item 5.    |  | Other Information.                                                                                        |  | 41
|           |  |                                                                                                          
|Item 6.    |  | Exhibits.                                                                                                 |  | 42
|           | 
|Signatures |  | 42                                                                                                       



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 30,2009 |         |   | December 31,2008 |  
|                                                                                                                                                  |  | (Unaudited)       |         |   |                  |  
|Assets                                                                                                                                            |  |                   |         |   |                  |   |         |  
|Current assets                                                                                                                                    |  |                   |         |   |                  |   |         |  
|Cash and cash equivalents (includes restricted cash of $400 at December 31, 2008)                                                                 |  | $                 | 23,324  |   |                  | $ | 22,344  |  
|Trade accounts receivable (net of allowance for doubtful accounts of $6,076 and $5,202 at September 30, 2009 and
December 31, 2008, respectively) |  |                   | 87,656  |   |                  |   | 91,085  |  
|Inventories                                                                                                                                       |  |                   | 100,667 |   |                  |   | 90,858  |  
|Prepaid expenses, notes receivable and other                                                                                                      |  |                   | 34,262  |   |                  |   | 31,414  |  
|Due from related parties                                                                                                                          |  |                   | 297     |   |                  |   | 278     |  
|                                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total current assets                                                                                                                              |  |                   | 246,206 |   |                  |   | 235,979 |  
|Property and equipment, net                                                                                                                       |  |                   | 16,731  |   |                  |   | 17,678  |  
|Goodwill                                                                                                                                          |  |                   | 13,594  |   |                  |   | 13,548  |  
|Identifiable intangible assets, net                                                                                                               |  |                   | 1,689   |   |                  |   | 1,938   |  
|Notes receivable and other                                                                                                                        |  |                   | 14,974  |   |                  |   | 14,925  |  
|                                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total assets                                                                                                                                      |  | $                 | 293,194 |   |                  | $ | 284,068 |  
|                                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Liabilities and Shareholders Equity                                                                                                              |  |                   |         |   |                  |   |         |  
|                                                                                                                                                  |  |                  
|Liabilities                                                                                                                                       |  |                   |         |   |                  |   |         |  
|Current liabilities                                                                                                                               |  |                   |         |   |                  |   |         |  
|Lines of credit                                                                                                                                   |  | $                 | 35,744  |   |                  | $ | 31,041  |  
|Current maturities of long-term debt                                                                                                              |  |                   | 566     |   |                  |   | 617     |  
|Accounts payable                                                                                                                                  |  |                   | 119,012 |   |                  |   | 108,754 |  
|Accrued expenses and other                                                                                                                        |  |                   | 15,890  |   |                  |   | 19,792  |  
|Due to related parties                                                                                                                            |  |                   | 50      |   |                  |   | 49      |  
|                                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total current liabilities                                                                                                                         |  |                   | 171,262 |   |                  |   | 160,253 |  
|Long-term debt, net of current maturities                                                                                                         |  |                   | 97,921  |   |                  |   | 105,248 |  
|Other long-term liabilities                                                                                                                       |  |                   | 4,350   |   |                  |   | 4,017   |  
|                                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total liabilities                                                                                                                                 |  |                   | 273,533 |   |                  |   | 269,518 |  
|                                                                                                                                                  |  |                  
|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                                                                                                                        |  |                   | 21,323  |   |                  |   | 21,138  |  
|Retained earnings (deficit)                                                                                                                       |  |                   | 2,726   |   |                  |   | (2,040  | )
|Accumulated other comprehensive loss                                                                                                              |  |                   | (4,389  | ) |                  |   | (4,549  | )
|                                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total shareholders equity                                                                                                                        |  |                   | 19,661  |   |                  |   | 14,550  |  
|                                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                                                                        |  | $                 | 293,194 |   |                  | $ | 284,068 |  
|                                                                                                                                                  |  |                   |         |   |                  |   |         |  



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, |  
|                                                                                                                                                   | 2009 |                                 |         | 2008 |                                |   | 2009    |   |  | 2008 |        
|Revenue                                                                                                                                            |      | $                               | 231,283 |      |                                | $ | 273,884 |   |  | $    | 661,233 |   |  | $ | 855,204 |  
|                                                                                                                                                   |      |                                 |         |     
|Cost of revenue                                                                                                                                    |      |                                 | 207,950 |      |                                |   | 248,331 |   |  |      | 596,110 |   |  |   | 775,833 |  
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Gross profit                                                                                                                                       |      |                                 | 23,333  |      |                                |   | 25,553  |   |  |      | 65,123  |   |  |   | 79,371  |  
|                                                                                                                                                   |      |                                 |         |     
|Operating expenses                                                                                                                                 |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Selling, general and administrative                                                                                                                |      |                                 | 15,780  |      |                                |   | 20,069  |   |  |      | 49,802  |   |  |   | 59,090  |  
|Depreciation and amortization                                                                                                                      |      |                                 | 1,078   |      |                                |   | 1,004   |   |  |      | 3,193   |   |  |   | 2,878   |  
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Total operating expenses                                                                                                                           |      |                                 | 16,858  |      |                                |   | 21,073  |   |  |      | 52,995  |   |  |   | 61,968  |  
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Operating income                                                                                                                                   |      |                                 | 6,475   |      |                                |   | 4,480   |   |  |      | 12,128  |   |  |   | 17,403  |  
|                                                                                                                                                   |      |                                 |         |     
|Other expense (income), net                                                                                                                        |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Interest expense                                                                                                                                   |      |                                 | 3,802   |      |                                |   | 4,421   |   |  |      | 11,491  |   |  |   | 12,863  |  
|Interest income                                                                                                                                    |      |                                 | (112    | )    |                                |   | (282    | ) |  |      | (397    | ) |  |   | (795    | )
|Other expense, net                                                                                                                                 |      |                                 | 482     |      |                                |   | (24     | ) |  |      | (3,825  | ) |  |   |        |  
|Foreign exchange loss (gain)                                                                                                                       |      |                                 | (460    | )    |                                |   | 4,416   |   |  |      | (1,576  | ) |  |   | 6,616   |  
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Total other expense                                                                                                                                |      |                                 | 3,712   |      |                                |   | 8,531   |   |  |      | 5,693   |   |  |   | 18,684  |  
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Income (loss) before provision (benefit) for income taxes                                                                                          |      |                                 | 2,763   |      |                                |   | (4,051  | ) |  |      | 6,435   |   |  |   | (1,281  | )
|                                                                                                                                                   |      |                                 |         |     
|Provision (benefit) for income taxes                                                                                                               |      |                                 | 908     |      |                                |   | (605    | ) |  |      | 1,669   |   |  |   | (238    | )
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Net income (loss)                                                                                                                                  |      | $                               | 1,855   |      |                                | $ | (3,446  | ) |  | $    | 4,766   |   |  | $ | (1,043  | )
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Net income (loss) per weighted average share of common stock, voting and Class B common stock, non-voting:                                         |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Basic                                                                                                                                              |      | $                               | 18.15   |      |                                | $ | (33.72  | ) |  | $    | 46.64   |   |  | $ | (10.20  | )
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|Diluted                                                                                                                                            |      | $                               | 18.15   |      |                                | $ | (33.72  | ) |  | $    | 46.64   |   |  | $ | (10.20  | )
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  
|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 |  
|                                                                                                                                                   |      |                                 |         |      |                                |   |         |   |  |      |         |   |  |   |         |  



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INTCOMEX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in 000s)

(Unaudited)



|                                                                                                   |      |                                |         |      |  |   |         |  
|-------------------------------------------------------------------------------------------------- | ---- | ------------------------------ | ------- | ---- |  | - | ------- | -
|                                                                                                   |      | Nine Months EndedSeptember 30, |        
|                                                                                                   | 2009 |                                |         | 2008 | 
|Cash flows from operating activities                                                               |      |                                |         |      |  |   |         |  
|Net income (loss)                                                                                  |      | $                              | 4,766   |      |  | $ | (1,043  | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |      |                                |         |      |  |   |         |  
|Non-cash stock-based compensation expense                                                          |      |                                | 185     |      |  |   | 229     |  
|Depreciation expense                                                                               |      |                                | 2,840   |      |  |   | 2,423   |  
|Amortization expense                                                                               |      |                                | 1,431   |      |  |   | 1,625   |  
|Bad debt expense                                                                                   |      |                                | 1,772   |      |  |   | 2,609   |  
|Inventory obsolescence expense                                                                     |      |                                | 287     |      |  |   | 794     |  
|Deferred income tax benefit                                                                        |      |                                | (619    | )    |  |   | (4,409  | )
|Gain on extinguishment of long-term debt                                                           |      |                                | (4,411  | )    |  |   | (290    | )
|Gain on disposal of property and equipment and other                                               |      |                                | (212    | )    |  |   | (31     | )
|Change in operating assets and liabilities:                                                        |      |                                |         |      |  |   |         |  
|Decrease (increase) in:                                                                            |      |                                |         |      |  |   |         |  
|Trade accounts receivables                                                                         |      |                                | 1,657   |      |  |   | 2,600   |  
|Inventories                                                                                        |      |                                | (10,096 | )    |  |   | (19,071 | )
|Prepaid expenses, notes receivable and other                                                       |      |                                | (2,858  | )    |  |   | (4,227  | )
|Due from related parties                                                                           |      |                                | (19     | )    |  |   | 766     |  
|Increase (decrease) in:                                                                            |      |                                |         |      |  |   |         |  
|Accounts payable                                                                                   |      |                                | 10,258  |      |  |   | 13,163  |  
|Accrued expenses and other                                                                         |      |                                | (3,610  | )    |  |   | (2,699  | )
|Due to related parties                                                                             |      |                                | 1       |      |  |   | (2      | )
|                                                                                                   |      |                                |         |      |  |   |         |  
|Net cash provided by (used in) operating activities                                                |      |                                | 1,372   |      |  |   | (7,563  | )
|                                                                                                   |      |                               
|Cash flows from investing activities                                                               |      |                                |         |      |  |   |         |  
|Purchases of property and equipment                                                                |      |                                | (2,015  | )    |  |   | (4,876  | )
|Proceeds from disposition of assets                                                                |      |                                | 66      |      |  |   | 49      |  
|Notes receivable and other                                                                         |      |                                | (190    | )    |  |   | 109     |  
|                                                                                                   |      |                                |         |      |  |   |         |  
|Net cash used in investing activities                                                              |      |                                | (2,139  | )    |  |   | (4,718  | )
|                                                                                                   |      |                               
|Cash flows from financing activities                                                               |      |                                |         |      |  |   |         |  
|Borrowings under lines of credit, net                                                              |      |                                | 4,703   |      |  |   | 9,450   |  
|Borrowings under long-term debt                                                                    |      |                                | 79      |      |  |   | 36      |  
|Payments of long-term debt                                                                         |      |                                | (3,046  | )    |  |   | (5,021  | )
|                                                                                                   |      |                                |         |      |  |   |         |  
|Net cash provided by financing activities                                                          |      |                                | 1,736   |      |  |   | 4,465   |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents                      |      |                                | 11      |      |  |   | 586     |  
|                                                                                                   |      |                                |         |      |  |   |         |  
|Net increase (decrease) in cash and cash equivalents                                               |      |                                | 980     |      |  |   | (7,230  | )
|Cash and cash equivalents, beginning of period                                                     |      | $                              | 22,344  |      |  | $ | 29,399  |  
|                                                                                                   |      |                                |         |      |  |   |         |  
|Cash and cash equivalents, end of period                                                           |      | $                              | 23,324  |      |  | $ | 22,169  |  
|                                                                                                   |      |                                |         |      |  |   |         |  
|Supplemental disclosure of non-cash flow information                                               |      |                                |         |      |  |   |         |  
|Property and equipment acquired through financing                                                  |      | $                              |        |      |  | $ | 14      |  



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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 (U.S.) 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 (Holdings) (parent company of Software Brokers of America, Inc. (SBA), a Florida corporation), IXLA Holdings, Ltd. (IXLA), IFC International, LLC, a Delaware limited liability
company (IFC) and Intcomex International Holdings Cooperatief U.A., a Netherlands cooperative (Coop). IXLA is the Cayman Islands limited time duration 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 (Intcomex SPC-1) (parent company of Centel, S.A. de C.V. (Centel), a dually formed company in the U.S. and Mexico).

The Companys operations 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 subsidiary operations conduct business with sales and distribution centers in the following countries: Argentina, Chile,
Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Jamaica, Mexico, Panama, Peru, and Uruguay and a sales office in Brazil (collectively, our In-country Operations).

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

The accompanying unaudited condensed
consolidated 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, 2008, included in the Companys Form 10-K filed with the SEC on March 30, 2009 (Annual
Report). The results of operations for the three and nine months ended September 30, 2009 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, 2009, and its results of operations and its statements of cash flows for the three and nine months ended
September 30, 2009 and 2008, 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.



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INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



Reclassifications

Certain reclassifications have been made to prior period balances in order to conform to the current periods
presentation. In particular, the 2008 gains from the Companys repurchase of its 113/4% Second Priority Senior Secured Notes (the 113/4% Senior Notes) have been reclassified to operating activities from financing activities in the unaudited condensed consolidated statements of cash flows.

Computation of Net Income (Loss) per Share

The Company reports both basic and diluted net income (loss) per share. Basic net income (loss) per share excludes dilution and is computed
by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) 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.

Employee equity share options, non-vested shares and similar equity instruments granted by the Company are treated as potential common
shares outstanding in computing diluted net income (loss) 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 herein referred to 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 (loss) per share. Basic and diluted net income (loss) per share of Common Stock are the same.

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



|                                                                                                       |      |                                 |         |  |                                |         |   |      |   |         |  |   |         |  
|------------------------------------------------------------------------------------------------------ | ---- | ------------------------------- | ------- |  | ------------------------------ | ------- | - | ---- | - | ------- |  | - | ------- | -
|                                                                                                       |      | Three Months EndedSeptember 30, |         |  | Nine Months EndedSeptember 30, |        
|                                                                                                       | 2009 |                                 | 2008    |  |                                | 2009    |   | 2008 |  
|Numerator for basic and diluted net income (loss) per share of Common Stock:                           |      |                                 |         |  |                                |         |   |      |   |         |  |   |         |  
|Net income (loss)                                                                                      |      | $                               | 1,855   |  | $                              | (3,446  | ) |      | $ | 4,766   |  | $ | (1,043  | )
|                                                                                                       |      |                                 |         |  |                                |         |   |      |   |         |  |   |         |  
|Denominator:                                                                                           |      |                                 |         |  |                                |         |   |      |   |         |  |   |         |  
|Denominator for basic net income (loss) 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 income (loss) per share of Common Stock  adjusted weighted average shares |      |                                 | 102,182 |  |                                | 102,182 |   |      |   | 102,182 |  |   | 102,182 |  
|                                                                                                       |      |                                 |         |  |                                |         |   |      |   |         |  |   |         |  
|Net income (loss) per share of Common Stock:                                                           |      |                                 |         |  |                                |         |   |      |   |         |  |   |         |  
|Basic                                                                                                  |      | $                               | 18.15   |  | $                              | (33.72  | ) |      | $ | 46.64   |  | $ | (10.20  | )
|                                                                                                       |      |                                 |         |  |                                |         |   |      |   |         |  |   |         |  
|Diluted                                                                                                |      | $                               | 18.15   |  | $                              | (33.72  | ) |      | $ | 46.64   |  | $ | (10.20  | )
|                                                                                                       |      |                                 |         |  |                                |         |   |      |   |         |  |   |         |  



|(1) | The stock options were antidilutive during the three and nine months ended September 30, 2009 and 2008, as the fair value was below the exercise price. The shares
of restricted Class B common stock, non-voting were antidilutive during the three and nine months ended September 30, 2009 and 2008.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



Fair Value of Financial Instruments

Assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

Level 1Quoted market prices for identical assets or liabilities in active markets or observable inputs;

Level 2Significant other observable inputs that can be corroborated by observable market data; and

Level 3Significant unobservable inputs that cannot be corroborated by observable market data.

The carrying amounts of cash and cash equivalents, trade accounts receivable, notes and other receivables, accounts
payable, accrued expenses and other approximate fair value because of the short-term nature of these items. The carrying amounts of outstanding short-term debt approximate fair value because interest rates over the term of these financial
instruments approximate current market interest rates available to the Company. The current market price of outstanding long-term debt approximates fair value because the Companys 113/4% Senior Notes are freely traded in the open market.

The amount required to enter into similar offsetting contracts with similar remaining maturities based on quoted
market prices approximates the fair value of derivative financial instruments. The Company did not have any foreign currency forward contracts outstanding as of September 30, 2009. The Companys foreign currency forward contract with a
notional amount of $11,800 as of December 31, 2008, had a fair value of $(31).

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, 2009.

Comprehensive Income (Loss)

Comprehensive income (loss) is the change in equity during a period from
transactions and other events and circumstances from non-owner sources, comprised of net income (loss) and other comprehensive income (loss). Comprehensive income (loss) consisted of the following for the periods presented:



|                                         |      |                                         |       |      |                                        |   |        |   |      |   |       |  |   |        |  
|---------------------------------------- | ---- | --------------------------------------- | ----- | ---- | -------------------------------------- | - | ------ | - | ---- | - | ----- |  | - | ------ | -
|                                         |      | For the Three Months EndedSeptember 30, |       |      | For the Nine Months EndedSeptember 30, |  
|                                         | 2009 |                                         |       | 2008 |                                        |   | 2009   |   | 2008 |  
|Comprehensive income (loss)              |      |                                         |       |      |                                        |   |        |   |      |   |       |  |   |        |  
|Net income (loss)                        |      | $                                       | 1,855 |      |                                        | $ | (3,446 | ) |      | $ | 4,766 |  | $ | (1,043 | )
|Foreign currency translation adjustments |      |                                         | (506  | )    |                                        |   | (1,364 | ) |      |   | 160   |  |   | 390    |  
|                                         |      |                                         |       |      |                                        |   |        |   |      |   |       |  |   |        |  
|Total comprehensive income (loss)        |      | $                                       | 1,349 |      |                                        | $ | (4,810 | ) |      | $ | 4,926 |  | $ | (653   | )
|                                         |      |                                         |       |      |                                        |   |        |   |      |   |       |  |   |        |  

Total comprehensive income (loss) was driven primarily by operating gains and foreign
currency translation adjustments related to our operations in Mexico of $(506) and $(1,364) for the three months ended September 30, 2009 and 2008, respectively, and $160 and $390 for the nine months ended September 30, 2009 and 2008,
respectively. Accumulated other comprehensive (loss), consisting of cumulative foreign currency losses, included in shareholders equity, totaled $(4,389) and $(4,549), respectively, as of September 30, 2009 and December 31, 2008.

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.



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



Recently Adopted and Issued Accounting Guidance

Recently Issued Accounting Guidance

In June 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 810,
Consolidation,(formerly SFAS No. 167, Amendments to FASB Interpretation No. 46(R)) regarding the consolidation of variable interest entities. ASC 810 is intendedto improve financial reporting by providing additional guidance
to companies involved with variable interest entities and by requiring additional disclosures about a companys involvement in variable interest entities. This standard is effective for interim and annual periods ending after November 15, 2009,
which will not have a material impact on our financial statements.

In June 2009, the FASB issued ASC 860, Transfers and
Servicing (formerly SFAS No. 166, Accounting for Transfers of Financial Assets). ASC 860 requires more information about transfers of financial assets and where companies have continuing exposure to the risk related to transferred
financial assets. ASC 860 eliminates the concept of a qualifying special purpose entity, changes the requirements for derecognizing financial assets and requires additional disclosure. This standard is effective for interim and annual periods ending
after November 15, 2009, which will not have a material impact on our financial statements.

Recently Adopted Accounting
Guidance

In June 2009, the FASB issued ASC 105, Generally Accepted Accounting Principles
(formerly SFAS No. 168, The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162). ASC 105 establishes the FASB ASC as the single source of authoritative nongovernmental U.S. GAAP, except for SEC rules and interpretive
releases, which are sources of authoritative GAAP for SEC registrants. The standard is effective for interim and annual periods ending after September 15, 2009. The Company adopted the provisions of the standard on September 30, 2009, which did not
have a material impact on its unaudited condensed consolidated financial statements.

In May 2009, the FASB issued ASC 855,
Subsequent Events(formerly SFAS No. 165, Subsequent Events). ASC 855 establishes general accounting standards and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available
to be issued. ASC 855 sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the
circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the
balance sheet date. ASC 855 is effective for fiscal years and interim periods ended after June 15, 2009. The Company adopted the provisions of the standard, which had no effect on the unaudited condensed consolidated financial statements and
subsequent events through the date of this filing. The Company evaluated subsequent events from October 1, 2009 to October 26, 2009, the date the Company issued its unaudited condensed consolidated financial statements.

In April 2009, the FASB issued ASC 825, Financial Instruments(formerly Financial Staff Position (FSP) No. 107-1 and
Accounting Principles Board (APB) 28-1 (FSP No. 107-1 and APB 28-1), Interim Disclosures about Fair Value of Financial Instruments). ASC 825 requires disclosures of fair value for any financial instruments not currently reflected
at fair value on the balance sheet for all interim periods. ASC 825 enhances consistency in financial reporting by increasing the frequency of fair value disclosures and is effective for interim and annual periods ending after June 15, 2009, and is
to be applied prospectively. The Company adopted the provisions of the standard, which did not have an effect on its unaudited condensed consolidated financial statements.

In March 2008, the FASB issued ASC 815, Derivatives and Hedging(formerly SFAS No. 161, Disclosures about Derivative Instruments
and Hedging Activities, an amendment of FASB Statement No. 133). ASC815 requires enhanced disclosures about an entitys derivative and hedging activities including how and why an entity uses, how an entity accounts for derivative
instruments; and related hedged items and how derivative instruments and related hedged items affect an entitys financial position, financial performance and cash flows. ASC 805 is effective beginning January 1, 2009. The Company adopted the
provisions of the standard and included its effect in its unaudited condensed consolidated financial statements.

In February
2008, the FASB issued ASC 820, Fair Value Measurements and Disclosures (formerly FSP Financial Accounting Standard (FAS) No. 157-2, Effective Date of FASB Statement No. 157)which delayed the effective date for
nonfinancial assets and nonfinancial liabilities until January 1, 2009. The Company adopted the provisions of the standard as of January 1, 2009, which did not have an effect on its unaudited condensed consolidated financial statements.



9



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(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, 2009 |         |   | As ofDecember 31, 2008 |  
|Property and equipment, net              |  |                         |         |   |                        |   |         |  
|Land                                     |  | $                       | 735     |   |                        | $ | 735     |  
|Building and leasehold improvements      |  |                         | 8,373   |   |                        |   | 8,039   |  
|Office furniture, vehicles and equipment |  |                         | 10,855  |   |                        |   | 10,672  |  
|Warehouse equipment                      |  |                         | 2,415   |   |                        |   | 2,445   |  
|Software                                 |  |                         | 8,029   |   |                        |   | 7,104   |  
|                                         |  |                         |         |   |                        |   |         |  
|Total property and equipment             |  |                         | 30,407  |   |                        |   | 28,995  |  
|Less accumulated depreciation            |  |                         | (13,676 | ) |                        |   | (11,317 | )
|                                         |  |                         |         |   |                        |   |         |  
|Total property and equipment, net        |  | $                       | 16,731  |   |                        | $ | 17,678  |  
|                                         |  |                         |         |   |                        |   |         |  

Property and equipment, net included $2,819 and $3,528 of capitalized leases at
September 30, 2009 and December 31, 2008, respectively. There was no interest expense capitalized to property and equipment for the three and nine months ended September 30, 2009 and 2008.

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, 2009                  |  | Gross CarryingAmount |       | AccumulatedAmortization |   |        | CumulativeForeign CurrencyTranslation Effect |  |   | Net CarryingAmount |   | Useful Life(in years)
|Identifiable intangible assets, net       |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     
|Customer relationships                    |  | $                    | 3,630 |                         | $ | (1,573 | )                                            |  | $ | (415               | ) |                       | $ | 1,642 |  | 10.0
|Tradenames                                |  |                      | 1,080 |                         |   | (1,005 | )                                            |  |   | (28                | ) |                       |   | 47    |  | 3.5 
|Non-compete agreements                    |  |                      | 730   |                         |   | (730   | )                                            |  |   |                   |   |                       |   |      |  | 3.0 
|Patents  TGM S.A.                        |  |                      | 5     |                         |   | (5     | )                                            |  |   |                   |   |                       |   |      |  |     
|                                          |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     
|Total identifiable intangible assets, net |  | $                    | 5,445 |                         | $ | (3,313 | )                                            |  | $ | (443               | ) |                       | $ | 1,689 |  |     
|                                          |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     
|                                          |  |                      |       |                         |  
|As of December 31, 2008                   |  | Gross CarryingAmount |       | AccumulatedAmortization |   |        | CumulativeForeign
CurrencyTranslation Effect |  |   | Net CarryingAmount |   | Useful Life(in years)
|Identifiable intangible assets, net       |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     
|Customer relationships                    |  | $                    | 3,630 |                         | $ | (1,299 | )                                            |  | $ | (512               | ) |                       | $ | 1,819 |  | 10.0
|Tradenames                                |  |                      | 1,080 |                         |   | (927   | )                                            |  |   | (34                | ) |                       |   | 119   |  | 3.5 
|Non-compete agreements                    |  |                      | 730   |                         |   | (730   | )                                            |  |   |                   |   |                       |   |      |  | 3.0 
|Patents TGM S.A.                         |  |                      | 5     |                         |   | (5     | )                                            |  |   |                   |   |                       |   |      |  |     
|                                          |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     
|Total identifiable intangible assets, net |  | $                    | 5,445 |                         | $ | (2,961 | )                                            |  | $ | (546               | ) |                       | $ | 1,938 |  |     
|                                          |  |                      |       |                         |   |        |                                              |  |   |                    |   |                       |   |       |  |     



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(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. In connection with the annual impairment test
conducted in the fourth quarter of 2008, we used current market capitalization, control premiums, discounted cash flows and other factors as the best evidence of fair value and determined that our goodwill was impaired. The impairment test resulted
in a substantially lower value attributable to our goodwill. The impairment charge represents the extent to which the carrying values exceed the fair value attributable to the goodwill. Fair values were determined based upon market conditions, the
income approach which utilized cash flow projections and other factors.

As of September 30, 2009 and December 31,
2008, the balance of goodwill was $13,594 and $13,548, respectively. As of September 30, 2009, the carrying amount of goodwill increased by $46, as compared to the carrying amount of goodwill as of December 31, 2008, due to the cumulative
foreign currency translation effect of the revaluation of the Mexican Peso on the goodwill related to our 2005 Centel acquisition. As of December 31, 2008, the carrying amount of goodwill decreased by $20,709 from December 31, 2007, of
which $1,932 related to the cumulative foreign currency translation effect of the Mexican Peso and $18,777 related to the goodwill impairment charge. There were no impairment charges against goodwill for the three and nine months ended
September 30, 2009 and 2008.

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.

The outstanding balance of lines of credit consisted of the following for the periods presented:



|                                  |  |                         |        |                        |   |       
|--------------------------------- |  | ----------------------- | ------ | ---------------------- | - | ------
|                                  |  | As ofSeptember 30, 2009 |        | As ofDecember 31, 2008
|Lines of credit                   |  |                         |        |                        |   |       
|SBA  Miami                       |  | $                       | 24,067 |                        | $ | 23,643
|Intcomex S.A.  Chile             |  |                         | 4,612  |                        |   |      
|Intcomex Peru S.A.C               |  |                         | 3,275  |                        |   | 3,942 
|Intcomex de Guatemala, S.A.       |  |                         | 1,964  |                        |   | 300   
|TGM S.A.  Uruguay                |  |                         | 807    |                        |   | 1,617 
|Intcomex de Ecuador, S.A.         |  |                         | 669    |                        |   | 522   
|Computacion Monrenca Panama, S.A. |  |                         | 350    |                        |   |      
|Intcomex Colombia, LTDA           |  |                         |       |                        |   | 1,017 
|                                  |  |                         |        |                        |   |       
|Total lines of credit             |  | $                       | 35,744 |                        | $ | 31,041
|                                  |  |                         |        |                        |   |       

As of September 30, 2009 and December 31, 2008, the total amounts available
under the credit facilities were $12,615 and $14,447, respectively. The change in the outstanding balance is primarily attributed to borrowing by our subsidiaries to meet local working capital requirements, particularly borrowings related to our
operations in Guatemala, partially offset by a reduction in the borrowing requirements related to our operations in Colombia and Uruguay.

SBA has a $30,000 revolving credit facility with Comerica Bank, including $200 of letter of credit commitments and a capital expenditures limit of $1,000. Borrowings against the facility bear interest at
the Eurodollar rate plus 3.5% 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 January 1, 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 85.0% 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.

On October 22, 2009, SBA and Comerica Bank signed a commitment letter, pursuant to which Comerica Bank may replace
the existing revolving credit facility with a new three-year revolving credit facility. The replacement is contingent upon the Companys refinancing of its 113/4% Senior Notes due 2011 and other conditions, subject to final
documentation. The new revolving credit facility will be for an aggregate principal amount of up to $20,000, with a possible increase of an additional $10,000.



11



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



On March 20, 2009, SBA obtained a waiver to its credit agreement from Comerica Bank
for its senior debt to tangible effective net worth ratio, minimum tangible effective net worth and net income, as of December 31, 2008. SBA also obtained an amendment to its credit agreement for the definitions of the borrowing base, revolving
credit note and SBAs permitted investments. The amendment allows SBA to issue commercial letters of credit and standby letters of credit, not to exceed $2,000 at any one time outstanding. Borrowings against the facility bear interest at the
daily adjustable LIBOR rate (at no time less than 2.0%) plus the applicable margin of 4.0%. SBA is required to provide accounts payable aging, insurance and borrowing base certificates on a bi-weekly basis. SBA is also required to maintain monthly
stated levels of EBITDA and SBA and its guarantor shall maintain quarterly stated levels of net income, effective March 31, 2009 to December 31, 2009. For a detailed discussion of the revolving credit facility with Comerica Bank, see
Part I, Item 8. Financial Statements and Supplementary Data, Notes to Audited Consolidated Financial Statements, Note 6. Lines of Credit in our Annual Report.

As of September 30, 2009 and December 31, 2008, SBAs outstanding draws against the revolving credit facility were $20,828
and $21,476, respectively, and outstanding checks issued in excess of bank balances were $3,239 and $2,167, respectively. Based on collateral limitations, the remaining amounts available under the revolving credit facility were $5,933 and $4,957 as
of September 30, 2009 and December 31, 2008, respectively. As of September 30, 2009, the Company was in compliance with all of the covenants under its credit facility.

Outstanding stand-by undrawn letters of credit totaled approximately $17,900 and $11,150 as of September 30, 2009 and December 31,
2008, respectively.

Intcomex S.A.

Intcomex S.A. (Intcomex Chile) has a line of credit with a local financial institution for factoring of trade receivables with recourse. The line of credit has an interest rate of 2% and
matures on November 16, 2009.

Intcomex Peru S.A.C.

Intcomex Peru S.A.C. (Intcomex Peru) has four lines of credit with two financial institutions as of September 30, 2009. The
lines are collateralized with a guarantee from Holdings. The lines of credit carry interest rates ranging from 3.0% to 11.0%, two of which matured on September 30, 2009 and the remaining two mature on November 30, 2009.

Intcomex de Guatemala, S.A.

Intcomex de Guatemala, S.A. (Intcomex Guatemala) has three lines of credit with a local financial institution. The lines of credit have an interest rate of 9.0%, one of which matured on
October 22, 2009 and the remaining two mature on October 29, 2009 and December 8, 2009.

T.G.M. S.A.

TGM S.A. Uruguay (Intcomex Uruguay) has two lines of credit with local financial
institutions. Each line of credit carries an interest rate of 8.0% and matures on November 30, 2009.

Intcomex de
Ecuador, S.A.

Intcomex de Ecuador, S.A. (Intcomex Ecuador) has a line of credit with a local financial
institution. The line of credit has an interest rate of 9.8% and matures on November 30, 2009.

Intcomex Colombia,
LTDA

Intcomex Colombia, LTDA (Intcomex Colombia) had three lines of credit with local financial
institutions carrying interest rates ranging from 13.5% to 28.0%.



12



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



Note 6. Long-Term Debt

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



|                                             |  |                         |        |   |                        |   |         |  
|-------------------------------------------- |  | ----------------------- | ------ | - | ---------------------- | - | ------- | -
|                                             |  | As ofSeptember 30, 2009 |        |   | As ofDecember 31, 2008 |  
|Long-term debt, net of current portion       |  |                         |        |   |                        |   |         |  
|Intcomex, Inc.  113/4% Senior Notes         |  | $                       | 96,705 |   |                        | $ | 103,630 |  
|SBA  Capital lease                          |  |                         | 921    |   |                        |   | 1,135   |  
|Intcomex Peru  Collateralized notes         |  |                         | 616    |   |                        |   | 721     |  
|Other, including various capital leases      |  |                         | 245    |   |                        |   | 379     |  
|                                             |  |                         |        |   |                        |   |         |  
|Total long-term debt                         |  |                         | 98,487 |   |                        |   | 105,865 |  
|Current maturities of long-term debt         |  |                         | (566   | ) |                        |   | (617    | )
|                                             |  |                         |        |   |                        |   |         |  
|Total long-term debt, net of current portion |  | $                       | 97,921 |   |                        | $ | 105,248 |  
|                                             |  |                         |        |   |                        |   |         |  

On August 25, 2005, the Company consummated a high yield
debt offering of $120,000 in aggregate principal amount of 113/4% Senior Notes, due January 15, 2011. 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. 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 April 30, 2007, SBA entered into a lease agreement with Comerica Bank in the principal
amount of $1,505 for the lease of the Miami office and warehouse equipment. Interest is due monthly at 6.84% of the total equipment costs and all outstanding amounts are due April 30, 2012. As of September 30, 2009 and December 31,
2008, $921 and $1,135, respectively, remained outstanding under the lease agreement.

On November 11,
2008, the Company purchased $5,000 of its 113/4%
Senior Notes in an arms length transaction, at 49.00 of face value plus accrued interest, in advance of its mandatory August 15, 2009 sinking fund redemption requirement.

On January 13 and 14, 2009, the Company repurchased $1,000 of its 113/4% Senior Notes in arms length transactions, at 40.00 of face
value plus accrued interest. On February 11 and 23, 2009, the Company repurchased $1,500 and $1,560, respectively, of its 113/4% Senior Notes in arms length transactions, at 36.00 of face value plus accrued interest. On March 26, 2009, the Company repurchased $1,025 of its 113/4% Senior Notes in arms length transactions, at
36.00 of face value plus accrued interest. On June 23, 2009, the Company repurchased $1,000 of its 113/4% Senior Notes in arms length transactions, at 40.38 of face value plus accrued interest. On July 15, 2009, the Company made a mandatory interest payment of $5,754 on its 113/4% Senior Notes.

The Company recognized a gain on the redemption of its 113/4% Senior Notes of $4,411 and $290, respectively, for the nine months
ended September 30, 2009 and 2008, which is included in other expense (income), net in the consolidated statements of operations. The Company did not repurchase any of its outstanding 113/4% Senior Notes during the three months ended September 30, 2009
and 2008. As of September 30, 2009 and December 31, 2008, $96,705 and $103,630, respectively, of the 113/4% Senior Notes remained outstanding.



13



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(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, |  
|                                     | 2009 |                                 |       | 2008 |                                |   | 2009   |   |  | 2008 |      
|Income tax provision                 |      |                                 |       |      |                                |   |        |   |  |      |       |   |  |   |        |  
|Current expense (benefit)            |      |                                 |       |      |                                |   |        |   |  |      |       |   |  |   |        |  
|Federal and state                    |      | $                               | 22    |      |                                | $ | 42     |   |  | $    | 61    |   |  | $ | 63     |  
|Foreign                              |      |                                 | 1,259 |      |                                |   | 1,174  |   |  |      | 2,227 |   |  |   | 4,108  |  
|                                     |      |                                 |       |      |                                |   |        |   |  |      |       |   |  |   |        |  
|Total current expense                |      |                                 | 1,281 |      |                                |   | 1,216  |   |  |      | 2,288 |   |  |   | 4,171  |  
|                                     |      |                                 |       |      |                                |   |        |   |  |      |       |   |  |   |        |  
|Deferred (benefit) expense           |      |                                 |       |      |                                |   |        |   |  |      |       |   |  |   |        |  
|Federal and state                    |      |                                 | (22   | )    |                                |   | (1,123 | ) |  |      | (61   | ) |  |   | (3,370 | )
|Foreign                              |      |                                 | (351  | )    |                                |   | (698   | ) |  |      | (558  | ) |  |   | (1,039 | )
|                                     |      |                                 |       |      |                                |   |        |   |  |      |       |   |  |   |        |  
|Total deferred benefit               |      |                                 | (373  | )    |                                |   | (1,821 | ) |  |      | (619  | ) |  |   | (4,409 | )
|                                     |      |                                 |       |      |                                |   |        |   |  |      |       |   |  |   |        |  
|Total income tax (benefit) provision |      | $                               | 908   |      |                                | $ | (605   | ) |  | $    | 1,669 |   |  | $ | (238   | )
|                                     |      |                                 |       |      |                                |   |        |   |  |      |       |   |  |   |        |  

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, |    
|                                                           | 2009 |                                 |        | % |                                |     | 2008 |  |   | %      |   |  | 2009 |   |  | % |        |   | 2008 |     |   | % |  
|Effective tax rate                                         |      |                                 |        |   |                                |     |      |  |   |        |   |  |      |   |  |   |        |   |      |     |   |   |   |        |   |  |     |  
|Income (loss) before (benefit) provision for income taxes: |      |                                 |        |   |                                |     |      |  |   |        |   |  |      |   |  |   |        |   |      |     |   |   |   |        |   |  |     |  
|U.S.                                                       |      | $                               | (331   | ) |                                |     |      |  | $ | (3,676 | ) |  |      |   |  | $ | (2,868 | ) |      |     |   |   | $ | (9,943 | ) |  |     |  
|Foreign                                                    |      |                                 | 3,094  |   |                                |     |      |  |   | (375   | ) |  |      |   |  |   | 9,303  |   |      |     |   |   |   | 8,662  |   |  |     |  
|                                                           |      |                                 |        |   |                                |     |      |  |   |        |   |  |      |   |  |   |        |   |      |     |   |   |   |        |   |  |     |  
|Income (loss) before (benefit) provision for income taxes  |      | $                               | 2,763  |   |                                |     |      |  | $ | (4,051 | ) |  |      |   |  | $ | 6,435  |   |      |     |   |   | $ | (1,281 | ) |  |     |  
|                                                           |      |                                 |        |   |                                |     |      |  |   |        |   |  |      |   |  |   |        |   |      |     |   |   |   |        |   |  |     |  
|Tax at statutory rate                                      |      | $                               | 939    |   |                                | 34  |      |  | $ | (1,376 | ) |  | (34  | ) |  | $ | 2,188  |   |      | 34  |   |   | $ | (436   | ) |  | (34 | )
|                                                           |      |                                 |        |   |                                |     |      | 
|State income taxes, net of federal income tax benefit      |      |                                 | 5      |   |                                |    |      |  |   | (172   | ) |  | (4   | ) |  |   | (8     | ) |      |    |   |   |   | (567   | ) |  | (44 | )
|Effect of tax rates on non-U.S. operations                 |      |                                 | 47     |   |                                | 2   |      |  |   | 901    |   |  | 22   |   |  |   | (1,492 | ) |      | (23 | ) |   |   | 702    |   |  | 55  |  
|Effect of tax rates on subpart F income                    |      |                                 | 1,104  |   |                                | 40  |      |  |   |       |   |  |     |   |  |   | 1,104  |   |      | 17  |   |   |   |       |   |  |    |  
|Change in valuation allowance                              |      |                                 | (1,187 | ) |                                | (43 | )    |  |   | 42     |   |  | 1    |   |  |   | (123   | ) |      | (2  | ) |   |   | 63     |   |  | 5   |  
|                                                           |      |                                 |        |   |                                |     |      |  |   |        |   |  |      |   |  |   |        |   |      |     |   |   |   |        |   |  |     |  
|Effective tax (benefit) provision                          |      | $                               | 908    |   |                                | 33  |      |  | $ | (605   | ) |  | (15  | ) |  | $ | 1,669  |   |      | 26  |   |   | $ | (238   | ) |  | (18 | )
|                                                           |      |                                 |        |   |                                |     |      |  |   |        |   |  |      |   |  |   |        |   |      |     |   |   |   |        |   |  |     |  

Our effective tax rate was 33% and 26% for the three and nine months ended
September 30, 2009, respectively, as compared to (15%) and (18)% for the three and nine months ended September 30, 2008, respectively. The increase in the effective tax rate for the nine months ended September 30, 2009, as
compared to the nine months ended September 30, 2008, was primarily due to the existence of taxable earnings in several of our foreign operations and the recognition of subpart F income, offset slightly by the absence of non-taxable income in
our U.S. operations.



14



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



The Companys deferred tax assets were attributable to the following for the
periods presented:



|                                |  |                         |        |   |                        |   |        |  
|------------------------------- |  | ----------------------- | ------ | - | ---------------------- | - | ------ | -
|                                |  | As ofSeptember 30, 2009 |        |   | As ofDecember 31, 2008 |  
|Deferred tax assets             |  |                         |        |   |                        |   |        |  
|Current assets:                 |  |                         |        |   |                        |   |        |  
|Allowance for doubtful accounts |  | $                       | 1,104  |   |                        | $ | 960    |  
|Inventories                     |  |                         | 841    |   |                        |   | 725    |  
|Accrued expenses                |  |                         | 643    |   |                        |   | 621    |  
|Other                           |  |                         | 346    |   |                        |   | 296    |  
|                                |  |                         |        |   |                        |   |        |  
|Total current assets            |  |                         | 2,934  |   |                        |   | 2,602  |  
|Non-current assets:             |  |                         |        |   |                        |   |        |  
|Tax goodwill                    |  |                         | 679    |   |                        |   | 864    |  
|Net operating losses            |  |                         | 13,692 |   |                        |   | 13,225 |  
|Other                           |  |                         | 1,143  |   |                        |   | 974    |  
|Valuation allowances            |  |                         | (4,925 | ) |                        |   | (4,802 | )
|                                |  |                         |        |   |                        |   |        |  
|Total non-current assets        |  |                         | 10,589 |   |                        |   | 10,261 |  
|                                |  |                         |        |   |                        |   |        |  
|Total deferred tax assets       |  | $                       | 13,523 |   |                        | $ | 12,863 |  
|                                |  |                         |        |   |                        |   |        |  
|Deferred tax liabilities        |  |                         |        |   |                        |   |        |  
|Current liabilities:            |  |                         |        |   |                        |   |        |  
|Inventories                     |  |                         | (83    | ) |                        |   | (328   | )
|                                |  |                         |        |   |                        |   |        |  
|Total current liabilities       |  | $                       | (83    | ) |                        | $ | (328   | )
|Non-current liabilities:        |  |                         |        |   |                        |   |        |  
|Fixed assets                    |  |                         | (1,755 | ) |                        |   | (1,467 | )
|Amortizable intangible assets   |  |                         | (647   | ) |                        |   | (746   | )
|Inventories                     |  |                         | (229   | ) |                        |   | (132   | )
|                                |  |                         |        |   |                        |   |        |  
|Total non-current liabilities   |  |                         | (2,631 | ) |                        |   | (2,345 | )
|                                |  |                         |        |   |                        |   |        |  
|Total deferred tax liabilities  |  | $                       | (2,714 | ) |                        | $ | (2,673 | )
|                                |  |                         |        |   |                        |   |        |  
|Net deferred tax assets         |  | $                       | 10,809 |   |                        | $ | 10,190 |  
|                                |  |                         |        |   |                        |   |        |  

As of September 30, 2009 and December 31, 2008, the balance of SBAs
tax goodwill was $2,461 and 2,953, respectively. SBA recorded tax goodwill of approximately $9,843 in July 1998, which is being amortized for tax purposes over 15 years. SBA established $262 of deferred tax assets for foreign withholding taxes paid
in El Salvador during 2005.

As of September 30, 2009, the Companys U.S. federal and state of Florida net operating
losses (NOLs) resulted in $11,478 of deferred tax assets, which will begin to expire in 2026. The Company analyzed the available evidence related to the realization of the deferred tax assets, considered the current downturn in the
global economic environment and determined it is now more likely than not that the Company will not recognize a portion of its deferred tax assets associated with the NOL carryforwards. Factors in managements determination include the
performance of the business and the feasibility of ongoing tax planning strategies.

As of September 30, 2009 and
December 31, 2008, the Company recorded, against the respective NOLs, a valuation allowance of $4,925 and $4,802, respectively, of which $2,987 and $2,723 related to the U.S. and $1,938 and $2,079 related to our In-country Operations,
respectively, as management did not believe that it would fully realize their benefit at this time.

As of September 30,
2009, Intcomex Argentina S.R.L. (Intcomex Argentina) had $3,946 in NOLs resulting in a deferred tax asset of $1,381, which will begin to expire in 2011. A $1,381 valuation allowance has been recorded against this NOL as management does
not believe that it will realize its full benefit at this time.

As of September 30, 2009, Intcomex SPC-1 had $1,096 in
NOLs resulting in a deferred tax asset of $307, which will expire in 2018. A $307 valuation allowance has been recorded against this NOL, as management does not believe that it will realize its full benefit at this time.



15



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



As of September 30, 2009, Intcomex Colombia had $830 in NOLs resulting in a
deferred tax asset of $275 related to a NOL carryforward. Management established a $250 valuation allowance against the deferred tax assets pending Intcomex Colombias further growth in taxable income. Colombia allows for an eight year
carryforward on NOLs, which expires in 2013.

The Company recognized $3,248 in subpart F income related to intercompany loans
from its foreign affiliates in 2009. The Company considers this a one-time event and therefore, did not provide additional tax provisions for future realization of subpart F income.

The Companys NOLs consisted of the following for the periods presented:



|                            |                    |       |                       |  |                    |        |          |   |                       |  |                    |        |  |   |        |  |   |      
|--------------------------- | ------------------ | ----- | --------------------- |  | ------------------ | ------ | -------- | - | --------------------- |  | ------------------ | ------ |  | - | ------ |  | - | -----
|                            |                    | As of
|                            | September 30, 2009 |       | December 31, 2008    
|                            | GrossNOL           |       | NOL-DeferredTax Asset |  | ValuationAllowance |        | GrossNOL |   | NOL-DeferredTax Asset |  | ValuationAllowance
|U.S. federal and state      |                    | $     | 28,573                |  | $                  | 11,478 |          | $ | 2,987                 |  | $                  | 29,918 |  | $ | 10,881 |  | $ | 2,723
|Foreign                     |                    |       |                       |  |                    |        |          |   |                       |  |                    |        |  |   |        |  |   |      
|Intcomex Argentina , S.R.L. |                    |       | 3,946                 |  |                    | 1,381  |          |   | 1,381                 |  |                    | 4,348  |  |   | 1,522  |  |   | 1,522
|Intcomex Colombia           |                    |       | 830                   |  |                    | 275    |          |   | 250                   |  |                    | 830    |  |   | 275    |  |   | 250  
|Intcomex Jamaica Ltd.       |                    |       | 720                   |  |                    | 251    |          |   |                      |  |                    | 720    |  |   | 240    |  |   |     
|Centel (Mexico)             |                    |       | 1,096                 |  |                    | 307    |          |   | 307                   |  |                    | 1,096  |  |   | 307    |  |   | 307  
|                            |                    |       |                       |  |                    |        |          |   |                       |  |                    |        |  |   |        |  |   |      
|Total foreign               |                    |       | 6,592                 |  |                    | 2,214  |          |   | 1,938                 |  |                    | 6,994  |  |   | 2,344  |  |   | 2,079
|                            |                    |       |                       |  |                    |        |          |   |                       |  |                    |        |  |   |        |  |   |      
|Total                       |                    | $     | 35,165                |  | $                  | 13,692 |          | $ | 4,925                 |  | $                  | 36,912 |  | $ | 13,225 |  | $ | 4,802
|                            |                    |       |                       |  |                    |        |          |   |                       |  |                    |        |  |   |        |  |   |      

The undistributed earnings in foreign subsidiaries are permanently invested abroad
and will not be repatriated to the U.S. in the foreseeable future. Because they are considered to be indefinitely reinvested, no U.S. federal or state deferred income taxes have been provided on these earnings. 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.

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 America and the Caribbean. The IRS examined the 2004 and 2005 tax returns and concluded that there was 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. 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.

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 recognizes interest and penalties related to income tax matters in income tax expense.



16



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



Note 8. Fair Value of Derivative Instruments

The Company provides enhanced disclosures of its derivative instruments including how and why it uses derivative instruments, how
it accounts for derivative instruments and related hedged items and how derivative instruments and related hedged items affect the Companys financial position, financial performance, and cash flows.

The Company is exposed to certain risks related to its ongoing business operations. By using derivative instruments, the Company manages its
primary risks including foreign currency price risk. The Company enters into forward contracts on various foreign currencies to manage the price risk associated with forecasted purchases of inventory used in the Companys normal business
activities.

All derivatives are recorded in the Companys consolidated balance sheet at fair value. The fair value of
derivative financial instruments represents the amount required to enter into similar offsetting contracts with similar remaining maturities based on quoted market prices. The notional amount of forward exchange contracts is the amount of foreign
currency bought or sold at maturity. The notional amount is indicative of the extent of the Companys involvement in the various types and uses of derivative financial instruments, but not a measure of the Companys exposure to credit or
market risks through its use of derivatives.

As of December 31, 2008, the total notional amount of the foreign currency
forward contracts was $11,800, relating to derivative instruments in two of our In-country Operations. There were no derivatives designated as hedging instruments as of September 30, 2009 and 2008. A summary of the location and amounts of the
fair value in the consolidated balance sheets and derivative losses in the statements of operations related to the Companys derivatives designated as hedging instruments during the periods presented, consisted of the following:

Effect of Derivative Instruments on the Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008:



|                         |  |                   |  |                  |   |  |   |   
|------------------------ |  | ----------------- |  | ---------------- | - |  | - | --
|Derivatives instruments: |  | Location          |  | As of           
|                         |  | September 30,2009 |  | December 31,2008
|                         |  | Fair Value(1)     |  | Fair Value(1)   
|Foreign currency forward |  | Accounts payable  |  | $                |  |  | $ | 31
|                         |  |                   |  |                  |   |  |   |   
|Total                    |  |                   |  | $                |  |  | $ | 31
|                         |  |                   |  |                  |   |  |   |   



|(1) |  Other observable inputs (Level 2).
|--- | ------------------------------------

There was no effect of derivative instruments on the consolidated statements of operations for the three and nine months ended September 30, 2009 and 2008.

Note 9. Share-Based Compensation

The Company recognizes compensation expense for its share-based compensation plans utilizing the modified prospective method for awards issued, modified, repurchased or canceled. Share-based compensation expense is based on the fair value
of the award and measured at grant date, recognized as an expense in earnings over the requisite service period and is recorded in salaries, wages and benefits in the consolidated statements of operations as part of selling, general and
administrative expenses.

Total compensation expense for share-based compensation arrangements charged against income were $64
and $85 for the three months ended September 30, 2009 and 2008, respectively and $185 and $229 for the nine months ended September 30, 2009 and 2008, respectively. Compensation expense of $45 and $69, respectively, related to the stock
options issued pursuant to the 2007 Founders Option Plan was charged against income during the three months ended September 30, 2009 and 2008, and $19 and $16 respectively, related to the restricted shares of Class B common stock,
non-voting, issued pursuant to the 2008 Restricted Stock Issuances was charged against income during the three months ended September 30, 2009 and 2008. Compensation expense of $143



17



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



and $213 related to the stock options issued pursuant to the 2007 Founders Option Plan, was charged against income during the nine months ended September 30, 2009 and 2008,
respectively, and $42 and $16 related to the restricted shares of Class B common stock, non-voting, issued pursuant to the 2008 Restricted Stock Issuances, was charged against income during the nine months ended September 30, 2009 and 2008,
respectively.

As of September 30, 2009 and December 31, 2008, there were $266 and $521, respectively, of total
outstanding compensation costs for unvested share-based compensation arrangements, of which $101 and $363, respectively, related to the stock options and $166 and $158, respectively, related to the restricted shares of Class B common stock,
non-voting. These compensation costs will be recognized over a weighted average period of 2.0 years.

Stock Options

In February 2007, options to acquire an aggregate of approximately 1,540 shares of Class B common stock, non-voting
were granted under the 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 the options granted 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, 2009 and 2008. As of September 30, 2009 and December 31, 2008, the
number of options vested was 853 and 497, respectively. The options were antidilutive as of September 30, 2009 and December 31, 2008, as the fair value of the options was below the exercise price of the options.

A summary of the stock option activity under the 2007 Founders Option Plan and changes during the periods presented, consisted of the
following:



|                              |  |                   |   |  |                                         |       |                   |     |  
|----------------------------- |  | ----------------- | - |  | --------------------------------------- | ----- | ----------------- | --- | -
|                              |  | OutstandingShares |   |  | Weighted-AverageExercise
Priceper Share |       | ExercisableShares |    
|Balance at January 1, 2008    |  | 1,540             |   |  | $                                       | 1,077 |                   |    |  
|Granted                       |  |                  |   |  |                                         |      |                   | 513 |  
|Exercised                     |  |                  |   |  |                                         |      |                   |    |  
|Forfeited or expired          |  | (50               | ) |  |                                         |      |                   | (16 | )
|                              |  |                   |   |  |                                         |       |                   |     |  
|Balance at September 30, 2008 |  | 1,490             |   |  | $                                       | 1,077 |                   | 497 |  
|                              |  |                   |  
|Granted                       |  |                  |   |  |                                         |      |                   |    |  
|Exercised                     |  |                  |   |  |                                         |      |                   |    |  
|Forfeited or expired          |  |                  |   |  |                                         |      |                   |    |  
|                              |  |                   |   |  |                                         |       |                   |     |  
|Balance at December 31, 2008  |  | 1,490             |   |  | $                                       | 1,077 |                   | 497 |  
|                              |  |                   |  
|Granted                       |  |                  |   |  |                                         |      |                   | 426 |  
|Exercised                     |  |                  |   |  |                                         |      |                   |    |  
|Forfeited or expired          |  | (210              | ) |  | $                                       | 1,077 |                   | (70 | )
|                              |  |                   |   |  |                                         |       |                   |     |  
|Balance at September 30, 2009 |  | 1,280             |   |  | $                                       | 1,077 |                   | 853 |  
|                              |  |                   |   |  |                                         |       |                   |     |  



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



The fair value of the options was determined using the Black-Scholes option pricing
model as of April 23, 2007, the measurement date or the date the Company received unanimous approval from shareholders for the Plan. The Black-Scholes option pricing model 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 granted in 2007 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. The Company estimates 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 option grant
date was 1%.

Restricted Shares of Common Stock

In February 2008, our Board of Directors authorized, and in June 2008, our shareholders approved, the issuance of 73 restricted shares of
Class B common stock, non-voting, with a three year cliff vesting period to our director Mr. Henriques, as the initial equity consideration for his election to the Board of Directors and 41 restricted shares of Class B common stock, non-voting,
with a three year cliff vesting period to our director Mr. Madden and our former director Ms. Miltner, as their annual equity consideration for board membership, (collectively the 2008 Restricted Stock Issuances). In January
2009, Ms. Miltner surrendered her right to the restricted shares of common stock, in accordance with the terms of her resignation agreement with the Company.

In May 2009, our Board of Directors authorized and our shareholders approved the issuance of 96 restricted shares of Class B common stock, non-voting, with a three year cliff vesting period to our
director Mr. Madden and 96 restricted shares of Class B common stock, non-voting, with a three year cliff vesting period to our director Mr. Henriques, as their annual equity consideration for board membership, (collectively the 2009
Restricted Stock Issuance).

In September 2009, our Board of Directors approved, subject to shareholder approval, the
designation of an additional 1,000 shares of Class B common stock, non-voting, to be reserved for the grant of restricted stock to our Board of Directors.

There were 192 restricted shares of Class B common stock, non-voting, granted under the 2009 Restricted Stock Issuance and 155 restricted shares of Class B common stock, non-voting, granted under the 2008
Restricted Stock Issuances to certain independent, non-employee directors during the nine months ended September 30, 2009 and 2008, respectively. The restricted shares of Class B common stock, non-voting were antidilutive. The Company did not
grant any restricted shares of Class B common stock, non-voting, during the three months ended September 30, 2009 and 2008.



19



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



A summary of the unvested restricted shares of Class B common stock, non-voting award
activity under the 2008 Restricted Stock Issuances and 2009 Restricted Stock Issuance and changes during periods presented, consisted of the following:



|                                       |  |                                              |   |  |                                 |       |    
|-------------------------------------- |  | -------------------------------------------- | - |  | ------------------------------- | ----- | ---
|                                       |  | RestrictedCommon Stock,Non-voting(in shares) |   |  | Fair Valueper
Share(in dollars) |      
|Unvested Balance at January 1, 2008    |  |                                             |   |  |                                 |      |    
|Granted                                |  | 155                                          |   |  | $                               | 1,225 | (1)
|Vested                                 |  |                                             |   |  |                                 |      |    
|Forfeited                              |  |                                             |   |  |                                 |      |    
|                                       |  |                                              |   |  |                                 |       |    
|Unvested Balance at December 31, 2008  |  | 155                                          |   |  | $                               | 1,225 |    
|                                       |  |                                              |   |  |                                 |       |    
|Granted                                |  | 192                                          |   |  | $                               | 521   | (2)
|Vested                                 |  |                                             |   |  |                                 |      |    
|Forfeited                              |  | (41                                          | ) |  | $                               | 1,225 |    
|                                       |  |                                              |   |  |                                 |       |    
|Unvested Balance at September 30, 2009 |  | 306                                          |   |  | $                               | 1,063 | (3)
|                                       |  |                                              |   |  |                                 |       |    



|(1) | The fair value was estimated by the Company on the date the Company received unanimous shareholder approval of the grant.
|--- | -------------------------------------------------------------------------------------------------------------------------

|(2) | The fair value was determined by independent valuation experts as of the date the Company received unanimous shareholder approval of the grant.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The fair value was determined using the weighted-average fair value per share to reflect the portion of the period during which shares were
outstanding.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

Note 10. 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 consolidated financial statements.

Contingent Liability

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.

In the second quarter of 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 to be $0.4 million, all of which affected the Companys operating expenses. In addition, the Company
recorded a provision of $0.1 million 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.

Note 11. Additional Paid in Capital

As of September 30, 2009 and December 31, 2008, additional paid in capital was $21,323 and $21,138, respectively. The Company recognized compensation expense for its share-based compensation awards of $64 and $85 for the three
months ended September 30, 2009 and 2008, respectively, and $185 and $229 for the nine months ended September 30, 2009 and 2008, respectively.

For a detailed discussion of the stock-based compensation, see Note 9. Share-Based Compensation in these Notes to Condensed Consolidated Financial Statements.



20



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



Note 12. Related Party Transaction

Consulting Agreement with Related Parties

In November 2008, the Company entered into a 14 month consulting agreement in the amount of $546 with two of the Companys shareholders, who were former managers of our operation in Mexico, to
provide advice and operating guidance to the new management of the Companys Mexican operations. The expense was included in the Companys restructuring plan provision as of December 31, 2008. As of September 30, 2009 and
December 31, 2008, the amounts paid to the related parties to the agreements were $429 and $78, respectively.

Note 13. 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 operates 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 subsidiary operations conduct business with sales and distribution centers in the following countries: Argentina, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Jamaica, Mexico,
Panama, Peru, and Uruguay and a sales office in Brazil, collectively, our In-country Operations.

The In-country Operations
have been aggregated as one segment due to similar products and economic characteristics. The Company sells and distributes one type of product line, 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. Intercompany revenue between the related companies is eliminated in consolidation. The measure for the Companys segment profit is operating income. Financial information by geographic operating segment is as follows for the periods
presented:



|                                     |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|------------------------------------ | ---- | --------------------------------------- | ------- | ---- | -------------------------------------- | - | ------- | - |  | ---- | -------- | - |  | - | -------- | -
|                                     |      | For the Three Months EndedSeptember 30, |         |      | For the Nine Months EndedSeptember 30, |  
|                                     | 2009 |                                         |         | 2008 |                                        |   | 2009    |   |  | 2008 |         
|Statements of Operations Data:       |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|Revenue                              |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|Miami Operations                     |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|Revenue to unaffiliated customers(1) |      | $                                       | 61,304  |      |                                        | $ | 70,030  |   |  | $    | 173,482  |   |  | $ | 232,796  |  
|Intersegment                         |      |                                         | 58,053  |      |                                        |   | 63,352  |   |  |      | 169,549  |   |  |   | 208,019  |  
|                                     |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|Total Miami Operations               |      |                                         | 119,357 |      |                                        |   | 133,382 |   |  |      | 343,031  |   |  |   | 440,815  |  
|In-country Operations                |      |                                         | 169,979 |      |                                        |   | 203,854 |   |  |      | 487,751  |   |  |   | 622,408  |  
|Eliminations of inter-segment        |      |                                         | (58,053 | )    |                                        |   | (63,352 | ) |  |      | (169,549 | ) |  |   | (208,019 | )
|                                     |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|Total revenue                        |      | $                                       | 231,283 |      |                                        | $ | 273,884 |   |  | $    | 661,233  |   |  | $ | 855,204  |  
|                                     |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|Operating income                     |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|Miami Operations                     |      | $                                       | 1,526   |      |                                        | $ | 248     |   |  | $    | 1,733    |   |  | $ | 1,834    |  
|In-country Operations                |      |                                         | 4,949   |      |                                        |   | 4,232   |   |  |      | 10,395   |   |  |   | 15,569   |  
|                                     |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  
|Total operating income               |      | $                                       | 6,475   |      |                                        | $ | 4,480   |   |  | $    | 12,128   |   |  | $ | 17,403   |  
|                                     |      |                                         |         |      |                                        |   |         |   |  |      |          |   |  |   |          |  



21



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INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



|                                |  |                         |         |                        |   |        
|------------------------------- |  | ----------------------- | ------- | ---------------------- | - | -------
|                                |  | As ofSeptember 30, 2009 |         | As ofDecember 31, 2008
|Balance Sheet Data:             |  |                         |         |                        |   |        
|Assets                          |  |                         |         |                        |   |        
|Miami Operations                |  | $                       | 161,104 |                        | $ | 143,993
|In-country Operations           |  |                         | 132,090 |                        |   | 140,075
|                                |  |                         |         |                        |   |        
|Total assets                    |  | $                       | 293,194 |                        | $ | 284,068
|                                |  |                         |         |                        |   |        
|Property & equipment, net       |  |                         |         |                        |   |        
|Miami Operations                |  | $                       | 7,758   |                        | $ | 8,168  
|In-country Operations           |  |                         | 8,973   |                        |   | 9,510  
|                                |  |                         |         |                        |   |        
|Total property & equipment, net |  | $                       | 16,731  |                        | $ | 17,678 
|                                |  |                         |         |                        |   |        
|Goodwill                        |  |                         |         |                        |   |        
|Miami Operations                |  | $                       |        |                        | $ |       
|In-country Operations           |  |                         | 13,594  |                        |   | 13,548 
|                                |  |                         |         |                        |   |        
|Total goodwill                  |  | $                       | 13,594  |                        | $ | 13,548 
|                                |  |                         |         |                        |   |        



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



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INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



Note 14. Guarantor Condensed Consolidating Financial Statements

At September 30, 2009 and December 31, 2008, $96,705 and $103,630, respectively, of the 113/4% Senior Notes remained outstanding. The 113/4% Senior Notes are guaranteed by each of the Companys domestic
subsidiaries (collectively, the Subsidiary Guarantors) and with 65.0% 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, 2009



|                                           |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|------------------------------------------ |  | --------------------- | ------- | ---------- | - | -------------- |  | - | ------------ | - |  | ------------------------- | -------- | - |  | - | -------
|                                           |  | INTCOMEX,INC.(PARENT) |         | GUARANTORS |   | NON-GUARANTORS |  |   | ELIMINATIONS |   |  | INTCOMEX INC.CONSOLIDATED
|Current assets                             |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|Cash and equivalents                       |  | $                     | 3       |            | $ | 204            |  | $ | 23,117       |   |  | $                         |         |   |  | $ | 23,324 
|Trade accounts receivable, net             |  |                       |        |            |   | 64,333         |  |   | 62,681       |   |  |                           | (39,358  | ) |  |   | 87,656 
|Inventories                                |  |                       |        |            |   | 29,441         |  |   | 71,226       |   |  |                           |         |   |  |   | 100,667
|Other                                      |  |                       | 41,702  |            |   | 3,471          |  |   | 73,788       |   |  |                           | (84,402  | ) |  |   | 34,559 
|                                           |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|Total current assets                       |  |                       | 41,705  |            |   | 97,449         |  |   | 230,812      |   |  |                           | (123,760 | ) |  |   | 246,206
|                                           |  |                       |         |            |  
|Long-term assets                           |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|Property and equipment, net                |  |                       | 3,992   |            |   | 3,766          |  |   | 8,973        |   |  |                           |         |   |  |   | 16,731 
|Investments in subsidiaries                |  |                       | 111,758 |            |   | 187,231        |  |   | (394         | ) |  |                           | (298,595 | ) |  |   |       
|Goodwill                                   |  |                       |        |            |   | 7,418          |  |   | 6,176        |   |  |                           |         |   |  |   | 13,594 
|Other                                      |  |                       | 10,489  |            |   | 58,700         |  |   | 5,346        |   |  |                           | (57,872  | ) |  |   | 16,663 
|                                           |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|Total assets                               |  | $                     | 167,944 |            | $ | 354,564        |  | $ | 250,913      |   |  | $                         | (480,227 | ) |  | $ | 293,194
|                                           |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|Liabilities and shareholders equity       |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|Current liabilities                        |  | $                     | 10,396  |            | $ | 165,750        |  | $ | 118,909      |   |  | $                         | (123,793 | ) |  | $ | 171,262
|Long-term debt, net of current maturities  |  |                       | 96,705  |            |   | 722            |  |   | 494          |   |  |                           |         |   |  |   | 97,921 
|Other long-term liabilities                |  |                       | 41,182  |            |   | 18,352         |  |   | 2,623        |   |  |                           | (57,807  | ) |  |   | 4,350  
|                                           |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|Total liabilities                          |  |                       | 148,283 |            |   | 184,824        |  |   | 122,026      |   |  |                           | (181,600 | ) |  |   | 273,533
|Total shareholders equity                 |  |                       | 19,661  |            |   | 169,740        |  |   | 128,887      |   |  |                           | (298,627 | ) |  |   | 19,661 
|                                           |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        
|Total liabilities and shareholders equity |  | $                     | 167,944 |            | $ | 354,564        |  | $ | 250,913      |   |  | $                         | (480,227 | ) |  | $ | 293,194
|                                           |  |                       |         |            |   |                |  |   |              |   |  |                           |          |   |  |   |        



23



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2008



|                                           |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|------------------------------------------ |  | --------------------- | ------- | ---------- | - | -------------- |  | ------------ | ------- |  | ------------------------- | -------- | - |  | - | -------
|                                           |  | INTCOMEX,INC.(PARENT) |         | GUARANTORS |   | NON-GUARANTORS |  | ELIMINATIONS |         |  | INTCOMEX INC.CONSOLIDATED
|Current assets                             |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|Cash and equivalents                       |  | $                     |        |            | $ | 26             |  | $            | 22,318  |  | $                         |         |   |  | $ | 22,344 
|Trade accounts receivable, net             |  |                       |        |            |   | 65,034         |  |              | 70,750  |  |                           | (44,699  | ) |  |   | 91,085 
|Inventories                                |  |                       |        |            |   | 21,763         |  |              | 69,095  |  |                           |         |   |  |   | 90,858 
|Other                                      |  |                       | 40,280  |            |   | 3,872          |  |              | 68,960  |  |                           | (81,420  | ) |  |   | 31,692 
|                                           |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|Total current assets                       |  |                       | 40,280  |            |   | 90,695         |  |              | 231,123 |  |                           | (126,119 | ) |  |   | 235,979
|                                           |  |                       |         |            |  
|Long-term assets                           |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|Property and equipment, net                |  |                       | 3,876   |            |   | 4,292          |  |              | 9,510   |  |                           |         |   |  |   | 17,678 
|Investments in subsidiaries                |  |                       | 98,878  |            |   | 170,941        |  |              |        |  |                           | (269,819 | ) |  |   |       
|Goodwill                                   |  |                       |        |            |   | 7,418          |  |              | 6,130   |  |                           |         |   |  |   | 13,548 
|Other                                      |  |                       | 10,916  |            |   | 40,904         |  |              | 4,972   |  |                           | (39,929  | ) |  |   | 16,863 
|                                           |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|Total assets                               |  | $                     | 153,950 |            | $ | 314,250        |  | $            | 251,735 |  | $                         | (435,867 | ) |  | $ | 284,068
|                                           |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|Liabilities and shareholders equity       |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|Current liabilities                        |  | $                     | 12,191  |            | $ | 143,629        |  | $            | 131,530 |  | $                         | (127,097 | ) |  | $ | 160,253
|Long-term debt, net of current maturities  |  |                       | 103,630 |            |   | 1,009          |  |              | 609     |  |                           |         |   |  |   | 105,248
|Other long-term liabilities                |  |                       | 23,579  |            |   | 18,270         |  |              | 2,097   |  |                           | (39,929  | ) |  |   | 4,017  
|                                           |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|Total liabilities                          |  |                       | 139,400 |            |   | 162,908        |  |              | 134,236 |  |                           | (167,026 | ) |  |   | 269,518
|                                           |  |                       |         |            |  
|Total shareholders equity                 |  |                       | 14,550  |            |   | 151,342        |  |              | 117,499 |  |                           | (268,841 | ) |  |   | 14,550 
|                                           |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        
|Total liabilities and shareholders equity |  | $                     | 153,950 |            | $ | 314,250        |  | $            | 251,735 |  | $                         | (435,867 | ) |  | $ | 284,068
|                                           |  |                       |         |            |   |                |  |              |         |  |                           |          |   |  |   |        



24



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three Months Ended September 30, 2009



|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |        
|----------------------------------------------- |  | ------------- | ------ | - | ---------------------------- | - | ------- | --------------------------------- |  | - | ------------ | - |  | ------------------------- | ------- | - |  | - | -------
|                                                |  | Intcomex,Inc. |        |   | CombinedSubsidiaryGuarantors |   |         | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   |  | Intcomex,Inc.Consolidated
|Revenue                                         |  | $             |       |   |                              | $ | 119,355 |                                   |  | $ | 170,129      |   |  | $                         | (58,201 | ) |  | $ | 231,283
|Cost of revenue                                 |  |               |       |   |                              |   | 112,139 |                                   |  |   | 153,974      |   |  |                           | (58,163 | ) |  |   | 207,950
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |        
|Gross profit                                    |  |               |       |   |                              |   | 7,216   |                                   |  |   | 16,155       |   |  |                           | (38     | ) |  |   | 23,333 
|Operating expenses                              |  |               | 1,803  |   |                              |   | 3,847   |                                   |  |   | 11,208       |   |  |                           |        |   |  |   | 16,858 
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |        
|Operating (loss) income                         |  |               | (1,803 | ) |                              |   | 3,369   |                                   |  |   | 4,947        |   |  |                           | (38     | ) |  |   | 6,475  
|Other expense (income)                          |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |        
|Interest expense (income), net                  |  |               | 3,752  |   |                              |   | 342     |                                   |  |   | (404         | ) |  |                           |        |   |  |   | 3,690  
|Other, net                                      |  |               | (4,535 | ) |                              |   | (6,431  | )                                 |  |   | (194         | ) |  |                           | 11,182  |   |  |   | 22     
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |        
|Total other (income) expense                    |  |               | (783   | ) |                              |   | (6,089  | )                                 |  |   | (598         | ) |  |                           | 11,182  |   |  |   | 3,712  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |        
|(Loss) income before provision for income taxes |  |               | (1,020 | ) |                              |   | 9,458   |                                   |  |   | 5,545        |   |  |                           | (11,220 | ) |  |   | 2,763  
|(Benefit) provision for income taxes            |  |               | (2,875 | ) |                              |   | 2,700   |                                   |  |   | 1,083        |   |  |                           |        |   |  |   | 908    
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |        
|Net income (loss)                               |  | $             | 1,855  |   |                              | $ | 6,758   |                                   |  | $ | 4,462        |   |  | $                         | (11,220 | ) |  | $ | 1,855  
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |        

Three Months Ended September 30, 2008



|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  
|----------------------------------------------- |  | ------------- | ------ | - | ---------------------------- | - | ------- | --------------------------------- |  | - | ------------ | - |  | ------------------------- | ------- | - |  | - | ------- | -
|                                                |  | 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 expense (income)                    |  |               | 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  | )
|                                                |  |               |        |   |                              |   |         |                                   |  |   |              |   |  |                           |         |   |  |   |         |  



25



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2009



|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|----------------------------------------------- |  | ------------- | ------- | - | ---------------------------- | - | ------- | --------------------------------- |  | - | ------------ | - |  | ------------------------- | -------- | - |  | - | ------- | -
|                                                |  | Intcomex,Inc. |         |   | CombinedSubsidiaryGuarantors |   |         | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   |  | Intcomex,Inc.Consolidated |         
|Revenue                                         |  | $             |        |   |                              | $ | 343,030 |                                   |  | $ | 487,900      |   |  | $                         | (169,697 | ) |  | $ | 661,233 |  
|Cost of revenue                                 |  |               |        |   |                              |   | 322,728 |                                   |  |   | 443,079      |   |  |                           | (169,697 | ) |  |   | 596,110 |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Gross profit                                    |  |               |        |   |                              |   | 20,302  |                                   |  |   | 44,821       |   |  |                           |         |   |  |   | 65,123  |  
|Operating expenses                              |  |               | 6,010   |   |                              |   | 12,503  |                                   |  |   | 34,482       |   |  |                           |         |   |  |   | 52,995  |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Operating (loss) income                         |  |               | (6,010  | ) |                              |   | 7,799   |                                   |  |   | 10,339       |   |  |                           |         |   |  |   | 12,128  |  
|Other expense (income)                          |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Interest expense (income), net                  |  |               | 11,018  |   |                              |   | 1,276   |                                   |  |   | (1,200       | ) |  |                           |         |   |  |   | 11,094  |  
|Other, net                                      |  |               | (17,114 | ) |                              |   | (15,674 | )                                 |  |   | (1,762       | ) |  |                           | 29,149   |   |  |   | (5,401  | )
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Total other (income) expense                    |  |               | (6,096  | ) |                              |   | (14,398 | )                                 |  |   | (2,962       | ) |  |                           | 29,149   |   |  |   | 5,693   |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Income (loss) before provision for income taxes |  |               | 86      |   |                              |   | 22,197  |                                   |  |   | 13,301       |   |  |                           | (29,149  | ) |  |   | 6,435   |  
|(Benefit) provision for income taxes            |  |               | (4,680  | ) |                              |   | 4,117   |                                   |  |   | 2,232        |   |  |                           |         |   |  |   | 1,669   |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  
|Net income (loss)                               |  | $             | 4,766   |   |                              | $ | 18,080  |                                   |  | $ | 11,069       |   |  | $                         | (29,149  | ) |  | $ | 4,766   |  
|                                                |  |               |         |   |                              |   |         |                                   |  |   |              |   |  |                           |          |   |  |   |         |  

Nine Months Ended September 30, 2008



|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  
|----------------------------------------------- |  | ------------- | ------- | - | ---------------------------- | - | ------- | --------------------------------- |  | ------------ | ------- |  | ------------------------- | -------- | - |  | - | ------- | -
|                                                |  | 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  | )
|                                                |  |               |         |   |                              |   |         |                                   |  |              |         |  |                           |          |   |  |   |         |  



26



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##### Table of Contents

INTCOMEX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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

(Unaudited)



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2009



|                                               |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|---------------------------------------------- |  | ------------- | ------- | - | ---------------------------- | - | ------- | --------------------------------- |  | - | ------------ | - | ------------------------- | - | - |  | - | ------ | -
|                                               |  | Intcomex,Inc. |         |   | CombinedSubsidiaryGuarantors |   |         | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   | Intcomex,Inc.Consolidated |  
|Cash flows from operating activities           |  | $             | (14,698 | ) |                              | $ | 18,217  |                                   |  | $ | (2,147       | ) |                           | $ |  |  | $ | 1,372  |  
|                                               |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash flows from investing activities           |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Purchases of property and equipment, net       |  |               | (945    | ) |                              |   | (223    | )                                 |  |   | (847         | ) |                           |   |  |  |   | (2,015 | )
|Other                                          |  |               | 18,202  |   |                              |   | (17,952 | )                                 |  |   | (374         | ) |                           |   |  |  |   | (124   | )
|                                               |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash used in investing activities              |  |               | 17,257  |   |                              |   | (18,175 | )                                 |  |   | (1,221       | ) |                           |   |  |  |   | (2,139 | )
|                                               |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash flows from financing activities           |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Borrowings under lines of credit, net          |  |               |        |   |                              |   | 425     |                                   |  |   | 4,278        |   |                           |   |  |  |   | 4,703  |  
|Borrowings under long-term debt                |  |               |        |   |                              |   |        |                                   |  |   | 79           |   |                           |   |  |  |   | 79     |  
|Payments of long-term debt                     |  |               | (2,556  | ) |                              |   | (289    | )                                 |  |   | (201         | ) |                           |   |  |  |   | (3,046 | )
|                                               |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash flows from financing activities           |  |               | (2,556  | ) |                              |   | 136     |                                   |  |   | 4,156        |   |                           |   |  |  |   | 1,736  |  
|Effects of exchange rate changes on cash       |  |               |        |   |                              |   |        |                                   |  |   | 11           |   |                           |   |  |  |   | 11     |  
|                                               |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Net increase in cash and cash equivalents      |  |               | 3       |   |                              |   | 178     |                                   |  |   | 799          |   |                           |   |  |  |   | 980    |  
|Cash and cash equivalents, beginning of period |  | $             |        |   |                              | $ | 26      |                                   |  | $ | 22,318       |   |                           | $ |  |  | $ | 22,344 |  
|                                               |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash and cash equivalents, end of period       |  | $             | 3       |   |                              | $ | 204     |                                   |  | $ | 23,117       |   |                           | $ |  |  | $ | 23,324 |  
|                                               |  |               |         |   |                              |   |         |                                   |  |   |              |   |                           |   |   |  |   |        |  

Nine Months Ended September 30, 2008



|                                                     |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|---------------------------------------------------- |  | ------------- | ------ | - | ---------------------------- | - | ------ | --------------------------------- |  | - | ------------ | - | ------------------------- | - | - |  | - | ------ | -
|                                                     |  | Intcomex,Inc. |        |   | CombinedSubsidiaryGuarantors |   |        | CombinedNon-GuarantorSubsidiaries |  |   | Eliminations |   | Intcomex,Inc.Consolidated |  
|Cash flows from operating activities                 |  | $             | 6,210  |   |                              | $ | (5,138 | )                                 |  | $ | (8,635       | ) |                           | $ |  |  | $ | (7,563 | )
|                                                     |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash flows from investing activities                 |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Purchases of property and equipment                  |  |               | (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                           |  |               | (4,578 | ) |                              |   | (244   | )                                 |  |   | (199         | ) |                           |   |  |  |   | (5,021 | )
|                                                     |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Cash flows from financing activities                 |  |               | (4,578 | ) |                              |   | 6,027  |                                   |  |   | 3,016        |   |                           |   |  |  |   | 4,465  |  
|                                                     |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  
|Effects of exchange rate changes                     |  |               |       |   |                              |   |       |                                   |  |   | 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 |  
|                                                     |  |               |        |   |                              |   |        |                                   |  |   |              |   |                           |   |   |  |   |        |  



27



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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, contains 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, projections and managements 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, and 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,
elsewhere herein and under Part II  Other Information, Item 1A. Risk Factors in our Annual Report on Form 10-K filed with the SEC on March 30, 2009 (Annual Report). These risks and uncertainties include, but
are not limited to, the following:



| |  |  | adverse affects on our business and results of operations due to the global economic downturn;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | 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 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 statement because of certain factors discussed below or elsewhere in this Quarterly Report or 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 and year to date period ended September 30, 2009, which are included in this Quarterly Report.



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Overview

We believe we are the largest pure play value-added distributor of 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 45,000 customers in 40 countries, for the trailing 12 month period ended September 30, 2009.
We offer single source purchasing to our customers by providing an in-stock selection of more than 6,100 products from over 181 vendors, including the worlds leading IT product manufacturers. From our headquarters and main distribution center
in Miami, Florida, we support a network of 22 sales and distribution operations in 12 Latin American and Caribbean countries, and a sales office in Brazil.

Our results for the three and nine months ended September 30, 2009 reflect a decline in revenue across most of our product lines and our customer markets, as compared to the corresponding periods in
2008. Revenue decreased $42.6 million, or 15.6%, to $231.3 million for the three months ended September 30, 2009, from $273.9 million for the three months ended September 30, 2008. Revenue decreased $194.0 million, or 22.7%, to $661.2
million for the nine months ended September 30, 2009, from $855.2 million for the nine months ended September 30, 2008. Our revenues were impacted by the severe decline in the global capital markets and the unprecedented levels of
volatility and disruption of the capital and credit markets resulting in reduced demand for our products. Gross profit decreased $2.2 million, or 8.7%, to $23.3 million for the three months ended September 30, 2009, from $25.6 million for the
three months ended September 30, 2008. Gross profit decreased $14.3 million, or 18.0%, to $65.1 million for the nine months ended September 30, 2009, from $79.4 million for the nine months ended September 30, 2008. The decline in
gross profit in both periods was the result of the declining sales volume of our products and a reduction in average sale prices for some of the products.

Total operating expenses decreased 20.0% and 14.5%, respectively, for the three and nine months ended September 30, 2009, as compared to the corresponding periods in 2008, as a result of the
restructuring efforts we undertook in the fourth quarter of 2008 and the first and second quarters of 2009 in several of our In-country Operations and in Miami. Net income was $1.9 million for the three months ended September 30, 2009, as
compared to net loss of $3.4 million for the three months ended September 30, 2008. Net income was $4.8 million for the nine months ended September 30, 2009, as compared to net loss of $1.0 million for the nine months ended
September 30, 2008. While the global economic downturn and the disruptions in the credit markets have caused a slowdown in our revenue growth, we did experience an increase in our net income due to lower operating expenses, reduced interest
costs, foreign exchange gains and gains from the repurchase of our debt at prices significantly below face value.

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, vendor terms and conditions, and the current downturn in the global economy on margin. Historically,
our gross profit margins have been impacted by price competition, 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. The current downturn in the global economy has also increasingly
become a factor impacting our gross profit margins. We expect a softening in demand for IT products in Latin America and the Caribbean due to the continuing global economic downturn.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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. Gross margins from our Miami Operations are generally lower than gross margins from our In-country Operations because the Miami export market is
more competitive due to the high concentration of other Miami-based IT distributors who compete for the export business of resellers and retailers located in Latin America or the Caribbean. In addition, these resellers and retailers generally have
larger average order quantities than customers of our In-country Operations segment and, as a result, benefit from lower prices. Revenue from our In-country Operations grew by an average of 23.4% annually between 2001 and 2008, as compared to growth
in revenue from our Miami Operations of an average of 10.0% annually over the same period. Revenue from our In-country Operations accounted for 73.5% and 74.4% of consolidated revenue for the three months ended September 30, 2009 and 2008,
respectively. Revenue from our In-country Operations accounted for 73.8% and 72.8% of consolidated revenue for the nine months ended September 30, 2009 and 2008, respectively.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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 operating expenses from our In-country Operations are denominated in currencies other than the U.S. dollar. In markets where we invoice in local currency, including Argentina, Chile,
Colombia, Costa Rica, Guatemala, Jamaica, Mexico, Peru and Uruguay, the appreciation of the 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
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 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 unaudited condensed consolidated
statements of operations, a foreign exchange (gain) loss of $(0.5) million and $4.4 million, respectively, was included for the three months ended September 30, 2009 and 2008 and a foreign exchange (gain) loss of $(1.6) million and $6.6
million, respectively, was included for the nine months ended September 30, 2009 and 2008. We periodically engage in foreign currency forward contracts when available and when doing so is not cost prohibitive. In periods when we do not, foreign
currency fluctuations may adversely affect our results of operations, including our gross margins and operating margins.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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. Conversely, we purchase credit insurance from Euler Hermes ACI to support trade credit lines extended to our customers which has
been restricted recently due to the global economic downturn and the disruptions in the credit markets. Given the recent economic downturn, credit insurers have tightened the requirements for extending credit insurance coverage thereby limiting our
capacity to extend trade credit to our customers and the growth of our business throughout the region.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Increased levels of indebtedness.In connection with the investment by CVC International in our Company in August 2004 and our
re-acquisition of Centel in August 2005, we borrowed under our former senior secured credit facility with Wells Fargo Foothill and Morgan Stanley, (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% Second Priority Senior Secured Notes (the 113/4% Senior Notes) and used the proceeds to repay the outstanding principal balances on our Former Senior Secured Credit Facility and subordinated seller
notes and pay a $20.0 million dividend to our then shareholders of record. For the three months ended September 30, 2009 and 2008, interest expense was $3.8 million and $4.4 million, respectively. For the nine months ended September 30,
2009 and 2008, interest expense was $11.5 million and $12.9 million, respectively.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Deferred tax assets.Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and
liabilities. Deferred tax assets, which also include net operating loss (NOL) carryforwards for entities that have generated or continue to generate operating losses, are assessed periodically by management to determine if their future
benefit will be fully realized. If it is more likely than not that the deferred income tax asset will not be realized, then a valuation allowance must be established with a corresponding charge to net (loss) income. Such charges could have a
material adverse effect on our results of operations or financial condition. As a result of our evaluation, we established a $4.8 million valuation allowance against the carrying value of our long-term deferred tax assets as of December 31,
2008.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of September 30, 2009, the Companys U.S. and state of Florida NOLs resulted in $11.5
million of deferred tax assets, which will begin to expire in 2026. As of September 30, 2009, Intcomex Argentina had $3.9 million in NOLs resulting in a deferred tax asset of $1.4 million, which will begin to expire in 2011. As of
September 30, 2009, Intcomex SPC-1 had $1.1 million in NOLs resulting in a deferred tax asset of $0.3 million, which will begin to expire in 2018. As of September 30, 2009, Intcomex Colombia had $0.8 million in NOLs resulting in a deferred
tax asset of $0.3 million, with an eight year carryforward, which expires in 2013. The Company analyzed the available evidence related to the realization of the deferred tax assets, considered the current negative economic environment and determined
it is now more likely than not that we will not recognize a portion of our deferred tax assets associated with the NOL carryforwards. Factors in managements determination include the performance of the business and the feasibility of ongoing
tax planning strategies. As of September 30, 2009, the Company recorded a valuation allowance of $3.0 million in the U.S., $1.4 million in Argentina, $0.3 million in Mexico and $0.3 million in Colombia against the respective NOLs, as management
did not believe that it would realize the full benefit of these NOLs. The Company slightly increased the valuation allowance against its NOLs to $4.9 million as of September 30, 2009, as compared to $4.8 million as of December 31, 2008, as
management believed that a portion of its NOLs would not be fully realized at a future time. Our future results of operations may be impacted by the prolonged weakness in the current economic environment, which may result in further valuation
allowances on our deferred tax assets and adversely affect our results of operations or financial condition.



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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: Miami Operations and
In-country Operations. Miami Operations segment includes revenue from our Miami, Florida headquarters, including sales from Miami to our In-country Operations 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. In-country Operations segment includes revenue from our in-country sales and distribution centers,
which have been aggregated because of their similar economic characteristics. Most of our vendor rebates, incentives and allowances are reflected in the results of our Miami Operations 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 Operations segment discussed below reflect these eliminations.

Comparison of the three months ended September 30, 2009 versus the three months ended September 30, 2008

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



|                                              |        |                                      |                      |  |                                      |        |  |   |                      |   |  |       |   
|--------------------------------------------- | ------ | ------------------------------------ | -------------------- |  | ------------------------------------ | ------ |  | - | -------------------- | - |  | ----- | --
|                                              |        | Three Months EndedSeptember 30, 2009 |                      |  | Three Months EndedSeptember 30, 2008 |       
|                                              | Amount |                                      | Percentageof Revenue |  |                                      | Amount |  |   | Percentageof Revenue |  
|Revenue                                       |        | $                                    | 231,283              |  | 100.0                                | %      |  | $ | 273,884              |   |  | 100.0 | % 
|Cost of revenue                               |        |                                      | 207,950              |  | 89.9                                 | %      |  |   | 248,331              |   |  | 90.7  | % 
|                                              |        |                                      |                      |  |                                      |        |  |   |                      |   |  |       |   
|Gross profit                                  |        |                                      | 23,333               |  | 10.1                                 | %      |  |   | 25,553               |   |  | 9.3   | % 
|Selling, general and administrative           |        |                                      | 15,780               |  | 6.8                                  | %      |  |   | 20,069               |   |  | 7.3   | % 
|Depreciation and amortization                 |        |                                      | 1,078                |  | 0.5                                  | %      |  |   | 1,004                |   |  | 0.4   | % 
|                                              |        |                                      |                      |  |                                      |        |  |   |                      |   |  |       |   
|Total operating expenses                      |        |                                      | 16,858               |  | 7.3                                  | %      |  |   | 21,073               |   |  | 7.7   | % 
|                                              |        |                                      |                      |  |                                      |        |  |   |                      |   |  |       |   
|Operating income                              |        |                                      | 6,475                |  | 2.8                                  | %      |  |   | 4,480                |   |  | 1.6   | % 
|Other expense                                 |        |                                      | 3,712                |  | 1.6                                  | %      |  |   | 8,531                |   |  | 3.1   | % 
|                                              |        |                                      |                      |  |                                      |        |  |   |                      |   |  |       |   
|Income (loss) before benefit for income taxes |        |                                      | 2,763                |  | 1.2                                  | %      |  |   | (4,051               | ) |  | (1.5  | )%
|Provision (benefit) for income taxes          |        |                                      | 908                  |  | 0.4                                  | %      |  |   | (605                 | ) |  | (0.2  | )%
|                                              |        |                                      |                      |  |                                      |        |  |   |                      |   |  |       |   
|Net income (loss)                             |        | $                                    | 1,855                |  | 0.8                                  | %      |  | $ | (3,446               | ) |  | (1.3  | )%
|                                              |        |                                      |                      |  |                                      |        |  |   |                      |   |  |       |   

Revenue. Revenue decreased $42.6 million, or 15.6%, to $231.3 million
for the three months ended September 30, 2009, from $273.9 million for the three months ended September 30, 2008. Our revenue was impacted by the severe decline in the global capital markets and the unprecedented levels of volatility and
disruption of the capital and credit markets resulting in reduced demand for our products. The decline resulted in a decrease in the sales of our core products, such as monitors of $14.2 million, CPUs of $8.5 million, printers of $5.8 million,
memory products of $3.3 million and basic white-box systems of $2.2 million in our Miami Operations and In-country Operations, particularly in Argentina, Colombia, Costa Rica, Ecuador, Guatemala, Jamaica, Mexico, Peru and Uruguay. We
experienced a 14.3% decline in unit shipments across our core product lines for the three months ended September 30, 2009, as compared to the three months ended September 30, 2008, due to the declining demand for IT products, coupled with
a 1.2% decline in average sales prices across the same core products. Revenue from our In-country Operations decreased $33.9 million, or 16.6%, to $170.0 million for the three months ended September 30, 2009, from $203.9 million for the three
months ended September 30, 2008. Revenue from our In-country Operations accounted for 73.5% of our total revenue for the three months ended September 30, 2009, as compared to 74.4% of our total revenue for the three months ended
September 30, 2008. The decline in revenue from our In-country Operations was mainly due to the overall decrease in sales in Argentina, Colombia and Uruguay, and to a lesser extent, in Panama, Mexico, Jamaica and Peru, and the decreased sales
volume and price of monitors, printers, software and basic white-box systems. Revenue from our Miami Operations decreased $8.7 million, or 12.5%, to $61.3 million for the three months ended September 30, 2009 (net of $58.1 million
of revenue derived from sales to our In-country Operations) from $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). The decline in revenue from our
Miami Operations reflected the decrease in sales volume and price of memory products, CPUs, notebook computers and monitors, slightly offset by the increase in sales volume of motherboards and sales volume and price of hard disk drives and software.

Gross profit.Gross profit decreased $2.2 million, or 8.7%, to $23.3 million for the three months ended
September 30, 2009, from $25.6 million for the three months ended September 30, 2008. The decrease was primarily driven by lower sales volume in our Miami Operations and In-country Operations. Gross profit from our In-country Operations
decreased $2.2 million, or 12.1%, to $15.9 million for the three months ended September 30, 2009, from $18.1 million for the three months ended September 30, 2008. The decrease in gross profit from our In-country Operations was primarily
attributable to the decreased sales volumes of CPUs, printers and monitors in Argentina, Colombia, Guatemala and Peru. Gross profit from our In-country Operations accounted for 68.1% of our



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consolidated gross profit for the three months ended September 30, 2009, as compared to 70.7% of our consolidated gross profit for the three months ended September 30, 2008. Gross
profit from our Miami Operations remained at $7.5 million for the three months ended September 30, 2009, as compared to $7.5 million for the three months ended September 30, 2008. As a percentage of revenue, gross margin increased to 10.1%
for the three months ended September 30, 2009, as compared to 9.3% for the three months ended September 30, 2008, due to the increased mix of higher margin products and the reduced dependency on high volume, low margin integrator export
business.

Operating expenses.Total operating expenses decreased $4.2 million, or 20.0%, to $16.9 million for
the three months ended September 30, 2009, from $21.1 million for the three months ended September 30, 2008. As a percentage of revenue, operating expenses decreased to 7.3% of revenue for the three months ended September 30, 2009, as
compared to 7.7% of revenue for the three months ended September 30, 2008. The decrease in operating expenses resulted from the Companys restructuring actions implemented in the fourth quarter of 2008 and the first and second quarters of
2009, which were designed to improve the Companys efficiencies and profitability, primarily in Miami, Argentina, Chile, Mexico and Peru. The decrease was driven in part by reduced salaries and payroll-related expenses of $2.4 million,
professional fees of $0.5 million and office, warehouse, building and occupancy expenses of $0.7 million for the three months ended September 30, 2009. As a percentage of total operating expenses, salaries and payroll-related expenses increased
to 53.6% of total operating expenses for the three months ended September 30, 2009, as compared to 51.6% for the three months ended September 30, 2008. Operating expenses from our In-country Operations decreased $3.1 million, or 22.0%, to
$10.9 million for the three months ended September 30, 2009, as compared to $14.0 million for the three months ended September 30, 2008, due to the lower salaries and payroll-related expenses, professional fees, commission expenses,
office, warehouse, building and occupancy expenses and bad debt expense, particularly in Argentina, Chile and Mexico. The decline salaries, payroll-related and professional fees from our In-country Operations resulted from the restructuring efforts,
which included workforce reductions. The decrease in commission expenses resulted from the lower sales volumes. Operating expenses from our Miami Operations decreased $1.1 million, or 15.5%, to $6.0 million for the three months ended
September 30, 2009, as compared to $7.1 million for the three months ended September 30, 2008, due to the reduced level of salaries and payroll-related expenses, professional fees, office, warehouse, building and occupancy expenses and bad
debt expense.

Operating income. Operating income increased $2.0 million, or 44.5%, to $6.5 million for the
three months ended September 30, 2009, from $4.5 million for the three months ended September 30, 2008. The increase was primarily driven by lower operating expenses and improved gross margins. Operating income from our In-country
Operations increased $0.7 million, or 16.9%, to $4.9 million for the three months ended September 30, 2009, from $4.2 million for the three months ended September 30, 2008, primarily from the reduced level of salaries and payroll-related
expenses, professional fees, office, warehouse, building and occupancy expenses and bad debt expense, partially offset by the lower sales volumes. Operating income from our Miami Operations increased $1.3 million, to $1.5 million for the three
months ended September 30, 2009, from $0.2 million for the three months ended September 30, 2008. The increase in operating income from our Miami Operations resulted primarily from the reduced level of salaries and payroll-related
expenses, professional fees, office, warehouse, building and occupancy expenses and bad debt expense, partially offset by the lower sales volumes.

Other expense.Other expense decreased $4.8 million, or 56.5%, to $3.7 million for the three months ended September 30, 2009, from $8.5 million for the three months ended
September 30, 2008. The decrease was primarily attributable to the realization of foreign currency exchange gains during the period, mainly the revaluation of the Colombian Peso. The foreign exchange (gain) loss increased by $4.9 million to a
gain of $0.5 million for the three months ended September 30, 2009, from a loss of $4.4 million for the three months ended September 30, 2008. The Colombian Peso experienced a revaluation of 11.0%, strengthening to 1,938.5 pesos per U.S.
dollar as of September 30, 2009, from 2,179.3 pesos per U.S. dollar as of June 30, 2009.

Provision (benefit)
for income taxes.The provision (benefit) for income taxes increased $1.5 million, to $0.9 million for the three months ended September 30, 2009, from $(0.6) million for the three months ended September 30, 2008. The increase was
due to provisioning of realization reserves against U.S. NOLs beginning in the fourth quarter of 2008. Our effective tax rate was 33% for the three months ended September 30, 2009, as compared to (15)% for the three months ended
September 30, 2008, resulting from the taxable earnings in several of our In-country Operations and our operations in the U.S., as compared to the three months ended September 30, 2008.

Net income (loss).Net income (loss) increased $5.3 million, to $1.9 million for the three months ended
September 30, 2009, as compared to $(3.4) million for the three months ended September 30, 2008. The increase resulted from the foreign currency exchange gains due to the effects of the strengthening valuations relative to the U.S. dollar,
particularly the Colombian Peso and the Peruvian Nuevo Sol, the decline in operating expenses related to our Miami Operations, In-country Operations and, to a lesser extent, the decline in the interest expense related to our 113/4% Senior Notes.



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Comparison of the nine months ended September 30, 2009 versus the nine months ended
September 30, 2008

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



|                                                |        |                                     |                      |  |                                     |        |  |   |                      |   |  |       |   
|----------------------------------------------- | ------ | ----------------------------------- | -------------------- |  | ----------------------------------- | ------ |  | - | -------------------- | - |  | ----- | --
|                                                |        | Nine Months EndedSeptember 30, 2009 |                      |  | Nine Months EndedSeptember 30, 2008 |       
|                                                | Amount |                                     | Percentageof Revenue |  |                                     | Amount |  |   | Percentageof Revenue |  
|Revenue                                         |        | $                                   | 661,233              |  | 100.0                               | %      |  | $ | 855,204              |   |  | 100.0 | % 
|Cost of revenue                                 |        |                                     | 596,110              |  | 90.2                                | %      |  |   | 775,833              |   |  | 90.7  | % 
|                                                |        |                                     |                      |  |                                     |        |  |   |                      |   |  |       |   
|Gross profit                                    |        |                                     | 65,123               |  | 9.8                                 | %      |  |   | 79,371               |   |  | 9.3   | % 
|Selling, general and administrative             |        |                                     | 49,802               |  | 8.0                                 | %      |  |   | 59,090               |   |  | 6.9   | % 
|Depreciation and amortization                   |        |                                     | 3,193                |  | 0.5                                 | %      |  |   | 2,878                |   |  | 0.3   | % 
|                                                |        |                                     |                      |  |                                     |        |  |   |                      |   |  |       |   
|Total operating expenses                        |        |                                     | 52,995               |  | 8.0                                 | %      |  |   | 61,968               |   |  | 7.3   | % 
|                                                |        |                                     |                      |  |                                     |        |  |   |                      |   |  |       |   
|Operating income                                |        |                                     | 12,128               |  | 1.8                                 | %      |  |   | 17,403               |   |  | 2.0   | % 
|Other expense                                   |        |                                     | 5,693                |  | 0.9                                 | %      |  |   | 18,684               |   |  | 2.2   | % 
|                                                |        |                                     |                      |  |                                     |        |  |   |                      |   |  |       |   
|Income (loss) before provision for income taxes |        |                                     | 6,435                |  | 1.0                                 | %      |  |   | (1,281               | ) |  | (0.2  | )%
|Provision (benefit) for income taxes            |        |                                     | 1,669                |  | 0.3                                 | %      |  |   | (238                 | ) |  |      |   
|                                                |        |                                     |                      |  |                                     |        |  |   |                      |   |  |       |   
|Net income (loss)                               |        | $                                   | 4,766                |  | 0.7                                 | %      |  | $ | (1,043               | ) |  | (0.2  | )%
|                                                |        |                                     |                      |  |                                     |        |  |   |                      |   |  |       |   

Revenue. Revenue decreased $194.0 million, or 22.7%, to $661.2 million
for the nine months ended September 30, 2009, from $855.2 million for the nine months ended September 30, 2008. Our revenue was impacted by the severe decline in the global capital markets and the unprecedented levels of volatility and
disruption of the capital and credit markets resulting in reduced demand for our products. The decline resulted in a decrease in the sales of our core products, such as monitors of $40.3 million, CPUs of $30.5 million, hard drives of $18.7 million,
printers of $18.6 million, memory products of $14.8 million, software of $12.9 million and notebook computers of $7.3 million in our Miami Operations and In-country Operations, particularly in Argentina, Chile, Colombia, Mexico, Peru and Uruguay. We
experienced a 17.8% decline in unit shipments across our core product lines for the nine months ended September 30, 2009, as compared to the nine months ended September 30, 2008, due to the declining demand for IT products, coupled with a
7.4% decline in average sales prices across the same core products. Revenue derived from our In-country Operations decreased $134.7 million, or 21.6%, to $487.8 million for the nine months ended September 30, 2009, from $622.4 million for the
nine months ended September 30, 2008. Revenue derived from our In-country Operations accounted for 73.8% of our total revenue for the nine months ended September 30, 2009, as compared to 72.8% of our total revenue for the nine months ended
September 30, 2008. The decline in revenue from our In-country Operations was mainly due to the overall decrease in sales in Argentina, Chile, Colombia, Jamaica, Mexico, Panama, Peru and Uruguay, and to a lesser extent, in Costa Rica, and
Guatemala, and the decreased sales volume and price of monitors, hard disk drives, printers, memory products, software and basic white-box systems, the decrease in sales volume of CPUs and the decrease in price of motherboards. Revenue
derived from our Miami Operations decreased $59.3 million, or 25.5%, to $173.4 million for the nine months ended September 30, 2009 (net of $169.6 million of revenue derived from sales to our In-country Operations) from $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). The decline in revenue derived from our Miami Operations reflected the decrease in sales volume of CPUs and memory products
and the decrease in sales volume and price of hard disk drives, memory products, notebook computers, monitors, printers and software, slightly offset by the increase in sales volume of motherboards and increase in price of CPUs.

Gross profit.Gross profit decreased $14.2 million, or 18.0%, to $65.1 million for the nine months ended September 30,
2009, from $79.4 million for the nine months ended September 30, 2008. The decrease was primarily driven by lower sales volume in our Miami Operations and In-country Operations. Gross profit from our In-country Operations decreased $12.0
million, or 21.2%, to $44.7 million for the nine months ended September 30, 2009, from $56.7 million for the nine months ended September 30, 2008. The decrease in gross profit from our In-country Operations was primarily attributable to
the reduced sales volumes of monitors, basic white-box systems, printers, software, CPUs and hard disk drives in Argentina, Chile, Colombia, Mexico, Peru and Uruguay, and to a lesser extent, in Costa Rica, Panama and Jamaica. Gross
profit from our In-country Operations accounted for 68.7% of our consolidated gross profit for the nine months ended September 30, 2009, as compared to 71.4% of our consolidated gross profit for the nine months ended September 30, 2008.
Gross profit from our Miami Operations decreased $2.2 million, or 9.9%, to $20.4 million for the nine months ended September 30, 2009, as compared to $22.6 million for the nine months ended September 30, 2008. The decrease in Miamis
gross profit was largely the result of lower sales volumes of CPUs and memory products and the decline in sales volume and price of hard disk drives, notebook computers, monitors, printers and software, slightly offset by an increase in sales volume
of motherboards and prices of CPUs. As a percentage of revenue, gross margin increased to 9.8% for the nine months ended September 30, 2009, as compared to 9.3% for the nine months ended September 30, 2008, due to the increased mix of
higher margin products and the reduced dependency on high volume, low margin products.



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Operating expenses.Total operating expenses decreased $9.0 million, or 14.5%,
to $53.0 million for the nine months ended September 30, 2009, from $62.0 million for the nine months ended September 30, 2008. As a percentage of revenue, operating expenses increased to 8.0% of revenue for the nine months ended
September 30, 2009, as compared to 7.2% of revenue for the nine months ended September 30, 2008. The decrease in operating expenses resulted from the Companys restructuring actions implemented in the fourth quarter of 2008 and the
first and second quarters of 2009, which were designed to improve the Companys efficiencies and profitability, primarily in Miami, Argentina, Chile, Mexico and Peru. The decrease was driven in part by reduced salaries and payroll-related
expenses of $3.4 million, office, warehouse, building and occupancy expenses of $1.3 million, professional fees of $1.0 million and bad debt expense of $0.8 million for the nine months ended September 30, 2009. As a percentage of total
operating expenses, salaries and payroll-related expenses increased to 53.2% of total operating expenses for the nine months ended September 30, 2009, as compared to 52.1% for the nine months ended September 30, 2008. Operating expenses
from our In-country Operations decreased $7.0 million, or 17.0%, to $34.3 million for the nine months ended September 30, 2009, as compared to $41.4 million for the nine months ended September 30, 2008, due to the lower salaries and
payroll-related expenses, professional fees, commission expense, office and warehouse expenses, particularly in Argentina, Chile and Mexico. The decrease in commission expenses resulted from the lower sales volumes. Operating expenses from our Miami
Operations decreased $2.6 million, or 12.6%, to $18.0 million for the nine months ended September 30, 2009, as compared to $20.6 million for the nine months ended September 30, 2008, due to a reduced level of salaries and payroll-related
expenses, professional fees, office, warehouse, building and occupancy expenses and bad debt expense.

Operating
income. Operating income decreased $5.3 million, or 30.3%, to $12.1 million for the nine months ended September 30, 2009, from $17.4 million for the nine months ended September 30, 2008. The decrease was primarily driven by lower
sales volume, partially offset by reduction in operating expenses. Operating income from our In-country Operations decreased $5.2 million, or 33.2%, to $10.4 million for the nine months ended September 30, 2009, from $15.6 million for the nine
months ended September 30, 2008, primarily from the reduced level of salaries and payroll-related expenses, professional fees, office, warehouse, building and occupancy expenses, partially offset by the lower sales volumes. Operating income
from our Miami Operations decreased $0.1 million, or 5.5%, to $1.7 million for the nine months ended September 30, 2009, from $1.8 million for the nine months ended September 30, 2008. The decrease in operating income from our Miami
Operations resulted primarily from the lower sales volumes, partly offset by a reduction in operating expenses.

Other expense.Other expense decreased $13.0 million, or 69.5%, to $5.7 million for the nine months ended September 30, 2009, from $18.7 million for the nine months ended September 30, 2008. The decrease was
primarily attributable to the foreign currency exchange gains during the period, due to the revaluation of the Chilean, Colombian and Uruguayan Pesos. The foreign exchange (gain) loss decreased by $8.2 million to a gain of $1.6 million for the nine
months ended September 30, 2009, from a loss of $6.6 million for the nine months ended September 30, 2008. The Chilean Peso experienced a revaluation of 14.3%, strengthening to 555.3 pesos per U.S. dollar as of September 30, 2009,
from 648 pesos per U.S. dollar as of December 31, 2008. The Colombian Peso experienced a revaluation of 13.9%, strengthening to 1,938.5 pesos per U.S. dollar as of September 30, 2009, from 2,251.7 pesos per U.S. dollar as of
December 31, 2008. Other expense also decreased due to the $4.4 million gain from the repurchase, in arms length transactions, of $7.1 million of our 113/4% Senior Notes at substantial discounts to their face amount.

Provision (benefit) for income taxes.Provision (benefit) for income taxes increased
$1.9 million, to $1.7 million for the nine months ended September 30, 2009, from $(0.2) million for the nine months ended September 30, 2008. The increase was due to provisioning of realization reserves against U.S. NOLs beginning in the
fourth quarter of 2008. Our effective tax rate was 26% for the nine months ended September 30, 2009, as compared to 18% for the nine months ended September 30, 2008, resulting primarily from the taxable gains on the repurchase of our
113/4% Senior Notes, and the taxable earnings in
several of our In-country Operations, as compared to the nine months ended September 30, 2008.

Net income (loss).Net income (loss) increased $5.8 million, to $4.8 million for the nine months ended September 30, 2009, as compared to $(1.0) million for the nine months ended September 30, 2008. The increase
resulted from the foreign currency exchange gains due to the effects of the strengthening valuations against the U.S. dollar, particularly the Chilean and Colombian Pesos. In addition, the increase was attributable to the decline in operating
expenses related to our In-country Operations and the favorable gains in other income from the repurchase of $7.1 million of our 113/4% Senior Notes at substantial discounts to their face amount.

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 the issuance of letters of credit), asset-based financing arrangements that we have established in certain Latin American markets and the issuance of our 113/4% Senior Notes.



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Our working capital as of September 30, 2009 decreased by $0.8
million, or 1.0%, to $74.9 million, as compared to $75.7 million as of December 31, 2008. This decrease was due primarily to increased trade accounts payable, partly offset by an increase in trade accounts receivable and inventories. Our cash
and cash equivalents amounted to $23.3 million as of September 30, 2009, as compared to $22.3 million as of December 31, 2008. The increase was primarily attributable to the increase in trade accounts payable, offset by the repurchase of
$7.1 million of our 113/4% Senior Notes at
substantial discounts to their face amount during the nine months ended September 30, 2009.

Changes in
Financial Condition

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



|                                                                              |  |                           |        |   |                   |   |        |  
|----------------------------------------------------------------------------- |  | ------------------------- | ------ | - | ----------------- | - | ------ | -
|                                                                              |  | For the Nine Months Ended |       
|                                                                              |  | September 30,2009         |        |   | September 30,2008 |  
|                                                                              |  | (Dollars in thousands)    |       
|Cash flows provided by (used in) operating activities                         |  | $                         | 1,372  |   |                   | $ | (7,563 | )
|Cash flows used in investing activities                                       |  |                           | (2,139 | ) |                   |   | (4,718 | )
|Cash flows provided by financing activities                                   |  |                           | 1,736  |   |                   |   | 4,465  |  
|Effect of foreign currency exchange rate changes on cash and cash equivalents |  |                           | 11     |   |                   |   | 586    |  
|                                                                              |  |                           |        |   |                   |   |        |  
|Net increase (decrease) in cash and cash equivalents                          |  | $                         | 980    |   |                   | $ | (7,230 | )
|                                                                              |  |                           |        |   |                   |   |        |  

Cash flows from operating activities. Our cash flows from operating
activities resulted in cash provided by operations of $1.4 million for the nine months ended September 30, 2009, as compared to a requirement of $7.6 million for the nine months ended September 30, 2008. This generation was primarily
driven by the increase in accounts payable as a result of managements actions to purchase and replenish inventory levels in anticipation of higher future unit costs.

Cash flows from investing activities. Our cash flows from investing activities resulted in a requirement of $2.1 million for
the nine months ended September 30, 2009, as compared to a requirement of $4.7 million for the nine months ended September 30, 2008. This improvement was due primarily to the absence of capital expenditures associated with the new
facilities in Peru and, to a lesser extent, Costa Rica.

Cash flows from financing activities. Our cash flows
from financing activities resulted in a generation of $1.7 million for the nine months ended September 30, 2009, as compared to $4.5 million for the nine months ended September 30, 2008. This decrease was driven by lower net borrowings
under our lines of credit, particularly in Uruguay and Peru.

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, 2009 |         |   | As ofSeptember 30, 2008 |  
|                                            |  | (Dollars in thousands)  |        
|Balance sheet data:                         |  |                         |         |   |                         |   |         |  
|Trade accounts receivable, net of allowance |  | $                       | 87,656  |   |                         | $ | 111,535 |  
|Inventories                                 |  |                         | 100,667 |   |                         |   | 135,238 |  
|Accounts payable                            |  |                         | 119,012 |   |                         |   | 155,074 |  
|                                            | 
|                                            |  | (Data in days)          |        
|Other data:                                 |  |                         |         |   |                         |   |         |  
|Trade accounts receivable days(1)           |  |                         | 36.2    |   |                         |   | 35.6    |  
|Inventory days(2)                           |  |                         | 46.1    |   |                         |   | 47.6    |  
|Accounts payable days(3)                    |  |                         | (54.5   | ) |                         |   | (54.6   | )
|                                            |  |                         |         |   |                         |   |         |  
|Cash conversion cycle(4)                    |  |                         | 27.8    |   |                         |   | 28.6    |  
|                                            |  |                         |         |   |                         |   |         |  



|(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. 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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

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

|(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 cash conversion cycle, which
measures the number of days to convert trade accounts receivable and inventory, net of accounts payable, into cash. Our cash conversion cycle decreased to 27.8 days as of September 30, 2009, from 28.6 days as of September 30, 2008. This
improvement was primarily driven by the decrease in our inventory days, partially offset by the increase in our trade accounts receivable days and the slight decrease in our accounts payable days. Trade accounts receivable days increased to 36.2
days as of September 30, 2009, from 35.6 days as of September 30, 2008, resulting from retailers in Chile and Ecuador taking longer to pay and extended term special projects in Guatemala. Inventory days decreased to 46.1 days as of
September 30, 2009, as compared to 47.6 days as of September 30, 2008, due to improved inventory management efforts, mainly in our Miami Operations. Accounts payable days decreased slightly to 54.5 days as of September 30, 2009, from
54.6 days as of September 30, 2008, as management continued to align vendor payments to collection activity.

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, 2009 and 2008. 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 American 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.

We believe the global economic downturn and the associated credit crisis has
had a negative impact on us and our creditors. The global recession has adversely affected our vendors and customers ability to obtain financing for operations. The current tightening of credit in financial markets has affected our
suppliers, who have already tightened trade credit, and, in turn, we have tightened trade credit to our customers.

Prior to
extending credit to a customer, we analyze the customers financial history and obtain personal guarantees, where appropriate. Our Miami Operations 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. In
September 2009, the Company renewed the policy with Euler Hermes ACI for the 2009-2010 policy period. The policys aggregate limit is $20.0 million with an aggregate deductible of $1.5 million with expiration dated August 31, 2010. 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.

Inventory. 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 Operations 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 each of our 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 Operations 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.



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Capital Expenditures and Investments

Capital expenditures decreased to $2.0 million for the nine months ended September 30, 2009, as compared to $4.9 million for the nine
months ended September 30, 2008. The decrease was primarily driven by the absence of capital expenditures related to the new facilities in Peru and, to a lesser extent, Costa Rica.

Our future capital requirements will depend on many factors, including the timing and amount of our revenues and our investment decisions,
which will affect our ability to generate additional cash. We believe that our existing cash and cash equivalents will be sufficient to meet our anticipated cash requirements for working capital and capital expenditures for the foreseeable future.
Thereafter, if cash generated from operating and financing activities is insufficient to satisfy our working capital requirements, we may seek additional funding through bank borrowings or other means. There can be no assurance that we will be able
to raise any such capital on terms acceptable to us or at all. The current global economic downturn and the tightening of the credit markets further heightens the risk that we may not be able to borrow additional funds under our existing credit
facilities and our ability to obtain alternative sources of financing will be limited, if participating banks become insolvent or their liquidity becomes impaired. We anticipate that capital expenditures will be approximately $3.0 million per year
over the next few years, as we have no further facility expansion needs and have completed a substantial portion of our ERP system implementation and integration.

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 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 that 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 countries in which
the Companys individual business reside. Many of our In-country Operations also have limited credit facilities. These credit facilities fall into three categories: asset-based financing facilities, letters of credit and performance bond
facilities, and unsecured revolving credit facilities and lines of credit. As of September 30, 2009 and December 31, 2008, the total amounts available under the credit facilities were $12.6 million and $14.4 million, respectively. As of
September 30, 2009 and December 31, 2008, the total amounts outstanding under the credit facilities were $35.7 million and $31.0 million, respectively, of which $24.1 million and $23.6 million, respectively, were outstanding under the
Miami credit facility and $11.6 million and $7.4 million, respectively, were outstanding under the in-country credit facilities. The outstanding balance is primarily attributed to the increased borrowing by our subsidiaries to meet local working
capital requirements, particularly borrowings related to our operations in Peru and Guatemala, partially offset by a reduction in the borrowing requirements related to our operations in Colombia and Uruguay.

On August 25, 2005, the Company consummated a $120.0 million high yield notes offering in aggregate principal
amount of 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 Holdings and SPC-1, LLC, and 65.0% of the shares of IXLA 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, 2009, SBA has a $30.0 million revolving credit facility with Comerica Bank, including $0.2 million of letter of credit commitments and a capital expenditures limit of $1.0 million. Borrowings against the facility bear
interest at the Eurodollar rate plus 3.5% 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 January 1, 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 defined minimum level of tangible effective net worth and annual limitations on capital expenditures.



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On October 22, 2009, SBA and Comerica Bank signed a commitment
letter, pursuant to which Comerica Bank may replace the existing revolving credit facility with a new three-year revolving credit facility. The replacement is contingent upon the Companys refinancing of its 113/4% Senior Notes due 2011 and other conditions, subject to final
documentation. The new revolving credit facility will be for an aggregate principal amount of up to $20.0 million, with a possible increase of an additional $10.0 million.

On March 20, 2009, SBA obtained a waiver to its credit agreement from Comerica Bank for its senior debt to tangible effective net worth
ratio, minimum tangible effective net worth and net income, as of December 31, 2008. SBA also obtained an amendment to its credit agreement for the definitions of the borrowing base, revolving credit note and SBAs permitted investments.
The amendment allows SBA to issue commercial letters of credit and standby letters of credit, not to exceed $2.0 million at any one time outstanding. Borrowings against the facility bear interest at the daily adjustable LIBOR rate (at no time less
than 2.0%) plus the applicable margin of 4.0%. SBA is required to provide accounts payable aging, insurance and borrowing base certificates on a bi-weekly basis. The Company is also required to maintain monthly stated levels of EBITDA and SBA and
its guarantor shall maintain quarterly stated levels of net income, effective March 31, 2009 to December 31, 2009. As of September 30, 2009, SBA was in compliance with all of the covenants under its credit facility. For a detailed
discussion of the revolving credit facility with Comerica Bank, see Part I, Item 8. Financial Statements and Supplementary Data, Notes to Audited Consolidated Financial Statements, Note 6. Lines of Credit in our Annual Report.

On January 13 and 14, 2009, the Company repurchased $1.0 million of its 113/4% Senior Notes in arms length transactions, at 40.00 of face
value plus accrued interest. On February 11 and 23, 2009, the Company repurchased $1.5 million and $1.6 million, respectively, of its 113/4% Senior Notes in arms length transactions, at 36.00 of face
value plus accrued interest. On March 26, 2009, the Company repurchased $1.0 million of its 113/4% Senior Notes in arms length transactions, at 36.00 of face value plus accrued interest. On June 23, 2009, the Company repurchased $1.0 million of its 113/4% Senior Notes in arms length transactions, at
40.38 of face value plus accrued interest. On July 15, 2009, the Company made a mandatory interest payment of $5.8 million on its 113/4% Senior Notes.

On November 11, 2008, the Company purchased $5.0 million of its 113/4% Senior Notes in an arms length transaction, at 49.00 of face value plus accrued interest, in advance of its mandatory August 15, 2009 sinking fund redemption
requirement.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP. The preparation of these financial
statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and judgments related to assets, liabilities, contingent assets and liabilities, revenue and expenses. 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 apparent
from other sources. Although we believe our estimates, judgments and assumptions are appropriate and reasonable based upon available information, these assessments are subject to various other factors. Actual results may differ from these estimates
under different assumptions and conditions.

We believe the following critical accounting policies are affected by our
significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements.

Revenue Recognition.Revenue is recognized when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collection of the related receivable is reasonably assured and delivery has occurred.
Delivery to customers has occurred at the point of shipment, provided that title and risk of loss have transferred and no significant obligations remain. 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 management. A return is recorded in the period of the return because, based
on past experience, these returns are infrequent and immaterial.

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

The Companys revenues are reported net of any
sales, gross receipts or value added taxes.

The Company extends a warranty for products to customers with the same terms as
the OEMs warranty to the Company. All product-related warranty costs incurred by the Company are reimbursed by the OEMs.



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Accounts Receivable. We provide allowances for doubtful accounts on our
accounts receivable for estimated losses resulting from our customers inability to make required payments due to changes in our customers financial condition or other unanticipated events, which could result in charges for additional
allowances exceeding our expectations. These estimates require judgment and are influenced by factors including, but not limited to the following: 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; the continual credit evaluation of our customers financial condition; the aging of our customers receivables, individually and in the aggregate; the value and adequacy of credit
insurance coverage; the value and adequacy of collateral received from our customers (in certain circumstances); our historical loss experience; and, increases in credit risk due to an economic downturn resulting in our customers inability to
obtain capital. Uncollectible accounts are written-off against the allowance on an annual basis.

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 collectability.

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 revenue.

Goodwill, Identifiable Intangible and Other Long-Lived Assets.The Company reviews goodwill at least annually
for potential impairment or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our annual impairment review requires extensive use of
accounting judgment and financial estimates, including projections about our business, our financial performance and the performance of the market and overall economy. Application of alternative assumptions and definitions could produce
significantly different results. Because of the significance of the judgments and estimates used in the processes, it is likely that materially different amounts could result if different assumptions were made or if the underlying circumstances were
changed.

Our goodwill represents the excess of the purchase price over the fair value of the net assets of acquired
businesses. 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 an impairment loss is recognized 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.

Our intangible assets are presented at cost, net of accumulated amortization. Intangible assets are
amortized on a straight line basis over their estimated useful lives and assessed for impairment. The Company recognizes an impairment of long-lived assets if the net book value of such assets exceeds the estimated future undiscounted cash flows
attributable to such assets. If the carrying value of a long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset for assets to be held and used, or
the amount by which the carrying value exceeds the fair value less cost to dispose for assets to be disposed. Fair value is determined using the anticipated cash flows discounted at a rate commensurate with the risk involved. The Company tests
intangible assets for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.



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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.

There are numerous uncertainties and inherent risks in conducting business,
such as but not limited to general economic conditions, actions of competitors, ability to manage growth, actions of regulatory authorities, pending investigations and/or litigation, customer demand and risk relating to international operations.
Adverse effects from these risks may result in adjustments to the carrying value of the Companys assets and liabilities in the future including, but not necessarily limited to, goodwill.

Income taxes. The Company accounts for the effects of income taxes resulting from activities during the current and preceding
years. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases as measured by
the enacted tax rates which will be in effect when these differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date under
the law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized, unless it is more likely than not that such assets will be realized.

We are subject to income and other related taxes in areas in which we operate. When recording income tax expense, certain estimates are
required by management due to timing and the impact of future events on when income tax expenses and benefits are recognized by us. We periodically evaluate our net operating losses and other carryforwards to determine whether gross deferred tax
assets and related valuation allowances should be adjusted for future realization in our consolidated financial statements.

Highly certain tax positions are determined based upon the likelihood of the positions sustained upon examination by the taxing authorities. The benefit of a tax position is recognized in the financial statements in the period during
which management believes it is more likely than not that the position will be sustained.

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. We are currently under ongoing 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 unaudited condensed consolidated financial statements.

Commitments and Contingencies.We accrue 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. 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 of 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.



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|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 7A. Quantitative and Qualitative Disclosures About Market Risk in our Companys Annual Report.



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

Evaluation of Disclosure Controls and Procedures.Under the supervision and with the participation of management, including the Companys principal executive officer and principal financial officer, the Company has
evaluated the effectiveness of its disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act for the end of the period covered by this Quarterly Report. Based on that evaluation, the Companys
principal executive officer and principal financial officer have concluded as of September 30, 2009, that these controls and procedures were effective to ensure that information required to be disclosed in reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to management, including the principal executive officer and the principal
financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Changes in Internal
Control over Financial Reporting. There were no changes in our internal control over financial reporting that occurred during the quarterly period ended September 30, 2009, that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

Part II  OTHER INFORMATION



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

As of
September 30, 2009, 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 or results of operations.



|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. 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.



|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.
|------- | ------------------

Subsequent events.We are in the process of evaluating refinancing alternatives that would provide us with additional sources of liquidity and address our intermediate-term
debt maturities, including the 113/4% Senior Notes
(approximately 19.5% of which, as of September 30, 2009, is held by some of our affiliates), meet our long-term financing needs and support our continued growth objectives. These discussions are continuously evolving and subject to change.

On October 23, 2009, SBA and Comerica Bank signed a commitment letter, pursuant to which Comerica
Bank may replace the existing revolving credit facility with a new three-year revolving credit facility. The replacement is contingent upon the Companys refinancing of its 113/4% Senior Notes due 2011 and other conditions, subject to final
documentation. The new revolving credit facility will be for an aggregate principal amount of up to $20.0 million, with a possible increase of an additional $10.0 million.



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



|            |  |                                                                                                                                                     
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                         
|            | 
|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.
|- | ---------------

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 |  | October 26, 2009
|Anthony Shalom           |  | Chief Executive Officer            |  |                 
|                         |  |                                   
|/S/    MICHAEL F. SHALOM |  | President                          |  | October 26, 2009
|Michael F. Shalom        |  |                                    |  |                 
|                         |  |                                   
|/S/    RUSSELL A. OLSON  |  | Chief Financial Officer            |  | October 26, 2009
|Russell A. Olson         |  |                                    |  |                 



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Exhibit Index



|           |  |                                                                                                                                                    
|---------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNo. |  | Description                                                                                                                                        
|           | 
|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.



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