PROSPECTUS
Filed pursuant to Rule 424(b)(2)
Registration No. 333-5043
2,594,534 Shares
SOUTHERN ELECTRONICS CORPORATION
Common Stock
The 2,594,534 shares (the "Shares") of common stock, par
value $.01 per share (the "Common Stock"), of Southern
Electronics Corporation (the "Company") offered hereby are being
offered for the account of certain selling stockholders (the
"Selling Stockholders"). The Company will not receive any
proceeds from the sale of the Shares. See "Selling
Stockholders."
The Selling Stockholders may sell the Shares offered hereby
from time to time, with such sales to consist of transactions
effected through registered broker dealers on the Nasdaq National
Market or such other national securities exchange or automated
interdealer quotation system on which shares of the Company's
Common Stock are then listed at market prices prevailing at the
time of the sale. Such brokers or dealers may receive
compensation in the form of commissions or otherwise in such
amounts as may be negotiated by them. As of the date of this
Prospectus, no agreements have been reached for the sale of the
Shares or the amount of any compensation to be paid to brokers or
dealers in connection therewith. The Company will bear the
expenses in connection with the registration of the Shares being
offered hereby, including the fees of counsel to the Company, and
the Selling Stockholders will bear the expenses in connection
with the sale of the Shares, including commissions, concessions
or discounts to brokers or dealers and fees and expenses of
counsel or other advisors to the Selling Stockholders. See
"Plan of Distribution." To the extent that any of the Shares
offered hereby remain unsold upon the termination of this
offering, it is anticipated that the Selling Stockholders will be
eligible to resell such Shares pursuant to Rule 144 ("Rule 144")
promulgated under the Securities Act of 1933, as amended (the
"1933 Act").
The Common Stock of the Company is listed on the Nasdaq
National Market under the trading symbol "SECX." On May 28,
1996, the last reported sale price of the Company's Common Stock
on the Nasdaq National Market was $6.00 per share.
The Common Stock offered hereby involves a high degree of
risk. See "Risk Factors" at page 2.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is June 11, 1996.
<PAGE>2
No person has been authorized in connection with this
offering to give any information or to make any representation
not contained or incorporated by reference in this Prospectus,
and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company.
Neither the delivery of this Prospectus nor any sales hereunder
shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent
to the date hereof or the dates as of which information is
otherwise set forth or incorporated by reference herein. This
Prospectus does not constitute an offer to sell or a solicitation
of an offer to purchase any securities other than those to which
it relates or an offer to any person in any jurisdiction where
such offer or solicitation would be unlawful.
RISK FACTORS
Vendor Relations. Although the Company purchases goods from
more than 140 vendors, it has negotiated favorable terms from
certain manufacturers by purchasing a substantial portion of its
products from them. During fiscal 1995, the Company purchased
approximately 23% of its inventory from two vendors. The
Company's loss of either of these vendors could materially
adversely affect the Company. No other vendor accounted for more
than 10% of the Company's purchases in fiscal 1995. There can be
no assurance that the Company will be able to maintain its
existing vendor relationships or secure additional vendors as
needed.
Competition. The microcomputer and cellular telephone
distribution industries are intensely competitive and are
characterized by pricing pressures and, in some cases, short
product cycles. Distributors that compete with the Company
include national distributors, other regional distributors and
manufacturers' direct sales organizations, many of which have
substantially greater technical, financial and other resources
than the Company. The Company's ability to compete favorably is,
in large part, dependent upon its availability to control
inventory and other operating costs, react timely and
appropriately to short- and long- term trends and competitively
price its products while preventing erosion of its margins.
There is no assurance that the Company will be able to continue
to do so.
Control by Current Stockholders. The principal stockholders,
directors and officers of the Company beneficially own 3,009,046
shares of Common Stock, inclusive of stock options for 613,416
shares of Common Stock exercisable within 60 days of the date
hereof, which represent 37.9% of the issued and outstanding
shares of Common Stock of the Company.
AVAILABLE INFORMATION
Additional information regarding the Company and the Shares
offered hereby is contained in the Registration Statement on Form
S-3 (of which this Prospectus forms a part) and the exhibits
relating thereto (the "Form S-3 Registration Statement") filed by
the Company with the Securities and Exchange Commission (the
"Commission") under the 1933 Act. The Company is subject to the
informational requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements, information statements and other
information with the Commission. Such reports, proxy statements,
information statements and other information can be inspected and
copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511
and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports, proxy
statements and other information also may be inspected at the
offices of The Nasdaq Stock Market, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006-1500.
<PAGE>3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with
the Commission pursuant to the 1934 Act hereby are incorporated
by reference into this Prospectus as of their respective dates:
(1) The Company's Annual Report on Form 10-K for the year
ended June 30, 1995;
(2) The Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995;
(3) The Company's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1995;
(4) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996;
(5) The Company's Current Report on Form 8-K dated December
15, 1995 and Amendment No. 1 to Form 8-K/A dated
February 26, 1996 amending the Company's Current Report
on Form 8-K dated December 15, 1995; and
(6) The description of the Common Stock as contained in the
Company's Registration Statement on Form 8-A
(Registration No. 0-16345) as filed with the Commission
on October 28, 1991.
In addition, all reports and documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act
subsequent to the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by
reference herein and made a part hereof from the date of the
filing of such documents.
The Company will provide without charge to each person to
whom this Prospectus is delivered, at the request of such person,
a copy of any or all of the foregoing documents incorporated
herein by reference, other than exhibits to such documents
(unless such exhibits are specifically incorporated by reference
into the foregoing documents). The Company also will provide
without charge upon request a copy of the Company's latest Annual
Report to Stockholders. Requests should be directed to Larry G.
Ayers, Vice President-Finance, Chief Financial Officer, Secretary
and Treasurer, Southern Electronics Corporation, 4916 North Royal
Atlanta Drive, Tucker, Georgia 30085; Telephone No. (770)
491-8962.
<PAGE>4
THE COMPANY
General
The Company, through its wholly-owned operating subsidiary,
SED, is a distributor of microcomputers, computer peripheral
products and cellular telephone products. These products are
sold through a centralized telemarketing sales force to an
active, nonexclusive, nationwide customer base of over 9,000
value-added resellers ("VARs") and dealers of microcomputer
products located primarily in the Southeastern United States,
dealers and resellers located in Latin America and resellers of
cellular telephones located primarily in Southeastern and
South-Central United States. The Company's principal executive
offices are located at 4916 North Royal Atlanta Drive,
Tucker, Georgia 30085, and its telephone number is (770)
491-8962.
The Company distributes from its distribution facilities in
Tucker, Georgia and Miami, Florida computer-related products of
nationally recognized manufacturers such as AOC International
(USA) Ltd., Cyrix Corporation, Epson America, Inc.,
Hewlett-Packard Company, Maxtor Corporation, Panasonic
Communications & Systems Company and Seagate Technology, Inc.
The Company also distributes cellular telephone products from
these facilities and is a direct distributor of NEC America, Inc.
and an indirect distributor of other nationally recognized
cellular telephone product manufacturers such as Motorola
Cellular Subscriber Group, Nokia Mobile Phones and Toshiba
America Consumer Products, Inc.
The Company and SED were organized in June 1986 and acquired
substantially all of the assets of Southern Electronics
Distributors, Inc., a Georgia corporation (the "Predecessor"), on
July 2, 1986. The Company, through SED, is conducting the
business formerly operated by the Predecessor. The Predecessor
originally was engaged in the business of wholesale distribution
of consumer electronics products primarily to independent
retailers in small-to-medium-sized markets in the Southeastern
United States. In response to a perceived consolidation in the
retail consumer electronics market resulting from increased
competition, the Company began shifting its product mix by the
end of fiscal 1987 toward microcomputers and computer peripheral
products. The Company added sales of cellular telephone products
during fiscal 1988. The Company substantially completed its
strategic refocusing by the end of fiscal 1988.
SELLING STOCKHOLDERS
The Selling Stockholders are SED Associates, a Georgia
general partnership ("SED Associates"), ZS SED L.P., a Delaware
limited partnership ("ZS SED"), ZS Southern L.P., a Delaware
limited partnership ("ZS Southern"), David Steiner, Enrique
Dillon, Norberto Roman and Jorge E. Stein. Of the 2,594,534
Shares offered hereby (35.4% of the presently outstanding shares
of Common Stock as of May 15, 1996), 733,101 Shares, 843,623
Shares and 742,810 Shares beneficially are owned by and offered
for the accounts of SED Associates, ZS SED and ZS Southern,
respectively. In addition, 175,000 Shares beneficially are owned
by and offered for the account of David Steiner, 50,000 Shares
beneficially are owned by and offered for the account of Enrique
Dillon and 25,000 Shares each beneficially are owned by and
offered for the respective accounts of Messrs. Roman and Stein.
Prior to this offering, SED Associates, ZS SED and ZS Southern
owned of record 733,101, 843,623 and 742,810 shares of
Common Stock, respectively, and Messrs. Steiner, Dillon, Roman
and Stein owned of record 175,000, 50,000, 25,000 and 25,000
shares of Common Stock, respectively. If all of the Shares
offered by the Selling Stockholders are sold, none of the
preceding persons or entities will have beneficial ownership of
any shares of the Company's Common Stock.
SED Associates is a general partnership whose general
partners are Gerald Diamond, Mark Diamond, Trust FBO Julie
Diamond Paterson, and ZS Partners, a New York general partnership
of which Messrs. Michel Zaleski and Ned L. Sherwood are its
general partners. Messrs. Zaleski and Sherwood also serve as
general partners of ZS SED and ZS Southern. Gerald Diamond
serves as Chairman of the Board and Chief Executive Officer of
the Company and formerly served as the Company's President; Mr.
Zaleski serves as a director of the
<PAGE>5
Company and SED and formerly served as Vice President of the
Company and of SED; Mark Diamond serves as Executive Vice
President of the Company and of SED; and Mr. Sherwood formerly
served as a director of the Company and SED. Mark Diamond and
Julie Diamond Paterson are the son and daughter, respectively, of
Gerald Diamond.
SED Associates, ZS SED and ZS Southern purchased their
respective shares from the Company pursuant to a Subscription and
Stockholders Agreement dated July 2, 1986 (the "Stockholders
Agreement"). Pursuant to the terms of the SED Associates
Partnership Agreement, ZS Partners is entitled to 20% of the
income and gain recognized by SED Associates from the sale of
the Company's Common Stock owned of record by the partnership,
with the remaining 80% of the income and gain allocated to the
other partners of the partnership in proportion to the
number of shares of Common Stock deemed sold on that partner's
behalf. Gerald Diamond is the Managing Partner of SED Associates
and, as such, has sole voting and investment power with respect
to the Common Stock owned by SED Associates.
Mr. Steiner acquired his shares following the acquisition on
December 14, 1995 of substantially all of the assets of U.S.
Computer of North America, Inc., a Florida corporation (US
Computer"), of which Mr. Steiner was sole shareholder, by USC
Acquisition Corporation, a Delaware corporation and wholly-owned
subsidiary of the Company ("USC"). Pursuant to an Employment
Agreement executed December 14, 1995, between Steiner and USC,
Steiner joined USC as its Vice President-Hewlett-Packard Company
Exports, with responsibility for sales and marketing of
Hewlett-Packard Company products in Latin America. Steiner and
USC also executed a Non-Competition Agreement, dated December 14,
1995, under which Steiner agreed not to compete with USC, the
Company or their respective affiliates for a specified period
following the closing, other than as an employee of USC.
Messrs. Dillon, Roman and Stein (the "Dinorall
Stockholders") received their shares pursuant to an Assignment
Agreement dated as of December 14, 1995 (the "Option Agreement")
whereby the Dinorall Stockholders assigned to the Company, in
exchange, in part, for an aggregate of 100,000 shares of the
Company's Common Stock, an outstanding option to purchase all of
the issued and outstanding capital stock of US Computer from its
sole shareholder, David Steiner.
Pursuant to the Stockholders Agreement and the Option
Agreement and in connection with the offering of the Shares
hereunder, the Company has separately agreed to indemnify and
hold harmless SED Associates, ZS SED and ZS Southern and each of
their respective officers, directors and each person, if any, who
controls such entity within the meaning of the 1933 Act and the
Dinorall Stockholders (each an "Indemnified Party") against any
and all losses, claims, damages or liabilities (or actions in
respect thereof), joint or several, and certain expenses
(collectively, a "Loss" or "Losses") to which such Indemnified
Party may become subject, insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement
of a material fact made, or omission or alleged omission to state
a material fact required to be stated, or necessary to make the
statements in light of the circumstances in which made, not
misleading in the Form S-3 Registration Statement to which this
Prospectus forms a part, other than any untrue statement or
alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information
furnished by such Indemnified Party specifically for inclusion
herein and any distribution of the Shares in violation of the
plan of distribution as set forth below in the section captioned
"Plan of Distribution." Each of SED Associates, ZS SED, ZS
Southern and the Dinorall Stockholders have agreed to
indemnify and hold harmless the Company and its directors,
officers, agents and control persons to the same extent as
the foregoing indemnity by the Company but only with reference to
written information relating to them furnished specifically for
inclusion herein.
<PAGE>6
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling
Stockholders, the partners of ZS SED, SED Associates and ZS
Southern, or by any pledgees or donees of the foregoing, with
such sales to consist of transactions effected through registered
broker dealers on the Nasdaq National Market or such other
national securities exchange or automated interdealer quotation
system on which shares of Common Stock are then listed, at market
prices then prevailing. Brokers or dealers will receive
commissions, concessions or discounts from the Selling
Stockholders and/or the purchasers of the Shares in amounts to be
negotiated prior to the sale. In addition, any Shares covered by
this Prospectus that qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus. To
the extent that any of the Shares offered hereby remain unsold
upon the termination of this offering, it is anticipated that the
Selling Stockholders will be eligible to resell such shares
pursuant to Rule 144.
The Selling Stockholders will bear all expenses in
connection with the sale of the Shares, including commissions,
concessions or discounts to brokers or dealers and fees and
expenses of counsel or other advisors to the Selling
Stockholders. The Company will bear the expenses in connection
with the registration of the Shares, including the fees of
counsel to the Company.
The Selling Stockholders and any broker or dealer who acts
in connection with the sale of the Shares hereunder may be deemed
to be "underwriters" within the meaning of Section 2(11) of the
1933 Act, and any compensation received by them and any profit on
any resale of the Shares as principals might be deemed to be
underwriting discounts and commissions under the 1933 Act.
LEGAL MATTERS
The legality of the Shares offered hereby has been passed
upon for the Company by Long, Aldridge & Norman, LLP, Atlanta,
Georgia, special counsel to the Company.
EXPERTS
The Company's consolidated financial statements and the
financial statement schedule incorporated in this prospectus by
reference from the Company's Annual Report on Form 10-K for the
year ended June 30, 1995 and the financial statements of U.S.
Computer of North America, Inc. as of December 13, 1995 and for
the period January 1, 1995 through December 13, 1995,
incorporated in this prospectus by reference from the Company's
Current Report on Form 8-K, as amended on Form 8-K/A dated
February 26, 1996, have been audited by Deloitte & Touche, LLP,
independent auditors, as stated in their reports which are
incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
