IT Distribution Industry Downturn Levels Off in U.S.

ST. PETERSBURG, FL--(Marketwire - May 12, 2009) - The "worst" may be over in relation to the sharp downward IT industry sales that occurred over the past year, according to the industry association that represents the world's leading IT distributors. The Global Technology Distribution Council (GTDC), whose members generate more than $100 billion in global revenue, cited recent trends revealed by The NPD Group's Distributor Track®, which captures GTDC members' actual U.S. sales. Today's announcement is the first in a series of quarterly business trend reports that the GTDC is releasing to help industry analysts and observers better understand U.S. IT market conditions.

"The recession that has hurt industries across the world is still a challenging reality, but it appears that the downturn has leveled off in the U.S. market for IT distributors," commented Tim Curran, the GTDC's chief executive officer, who shared the news with investors attending the organization's annual Investor Relations Conference today at the Millennium Broadway Hotel in New York City. "Our members are encouraged and look forward to driving growth again as market conditions further improve."

NPD's Distributor Track, which has been available by subscription since 2002, aggregates GTDC member sales by product and industry segment in addition to corresponding reseller channel and pricing trends. Strong growth categories this year include netbooks, wireless products and "network attached storage" solutions, which small and midsize businesses are increasingly using to manage, share and store their data.

THE NEW 'ATTITUDE' TOWARD IT DISTRIBUTORS

A growing number of IT manufacturers and software publishers are relying on distributors to continually improve efficiency and market reach, Curran said, pointing out that over the past two years more than 100 additional vendors began doing business with GTDC members in the U.S. Even some of the world's largest manufacturers that have never sold their products through distributors have embraced the "two-tier" indirect model in which distributors deliver products and services to multiple reseller and retail channels.

"We've seen a significant change in attitude toward distributors in recent years," Curran explained. "During the last industry downturn, certain vendors started to rethink their supply-chain strategies in favor of more direct sales. Over time, however, they realized that it makes far better sense to leverage distributors to cost-effectively sell their products through diverse reseller channels with specialized needs that are very difficult to directly address."

Distributors provide the distinct advantage of fast access to multivendor solutions and a full range of related services while being able to more quickly adjust their operations as business conditions change and reseller channel requirements evolve. Market research also shows that IT distributors have the highest productivity levels and best inventory management performance compared to all other wholesale industries. IT distributors provide their services with very low selling, general and administrative (SG&A) costs as a percentage of sales -- with stable industry SG&A averages of below 6% in each of the past three years.

ABOUT THE GLOBAL TECHNOLOGY DISTRIBUTION COUNCIL

The Global Technology Distribution Council (GTDC) is a worldwide industry association dedicated to defining and promoting the role of wholesale distribution in a successful and healthy information technology channel. The Council is comprised of the computer industry's top wholesale distributors dedicated to serving "the channel," a network of skilled value-added resellers and retail stores focused on providing hardware, software, and services to businesses and consumers around the globe. GTDC members include GTDC members include ABC Data, Actebis, Arrow Electronics (NYSE: ARW), Avnet (NYSE: AVT), Bell Micro (PINKSHEETS: BELM), DCC SerCom, D&H, Esprinet, Ingram Micro (NYSE: IM), Intcomex, Magirus AG, Redington, ScanSource (NASDAQ: SCSC), Synnex (NYSE: SNX), Tech Data (NASDAQ: TECD), Westcoast LTD and Westcon. Visit the GTDC at www.gtdc.org.

ABOUT THE NPD GROUP, INC.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,700 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit http://www.npd.com/ and http://www.npdgroupblog.com.

Contact Information: GTDC MEDIA CONTACT: Chuck Miller (727) 939-1562