-- Sales Up 15% for the Quarter; Up 24% on an Equivalent Weeks Basis
--
-- Earnings Per Share $0.49; Up 81% --
PORT WASHINGTON, N.Y.--(BUSINESS WIRE)--
Systemax Inc. (NYSE:SYX) today announced financial results for
the fourth quarter and full year ended December 31, 2009. The Company's
fourth quarter and full year 2009 included 13 and 52 weeks,
respectively, compared to 14 and 53 weeks during 2008.
Fourth Quarter 2009 Financial Highlights:
-- Consolidated sales grew 15% to $938.2 million in U.S. dollars, an
all-time record. Adjusting for the impact of the number of weeks, sales
grew 24%. On a constant currency basis, sales grew 14%.
-- Consumer channel sales grew 9% to $537.6 million in U.S. dollars.
Adjusting for the impact of the number of weeks, sales grew 18%. On a
constant currency basis, sales grew 8%.
-- Business to business channel sales grew 25% to $400.6 million in U.S.
dollars. Adjusting for the impact of the number of weeks, sales grew
34%. On a constant currency basis, sales grew 22%.
-- "Same store" (as defined below) consumer channel sales grew 12%; same
store business to business channel sales grew 11%.
-- Diluted earnings per share (EPS) grew 81% to $0.49. This included a gain
of $1.8 million or $0.03 per diluted share, after tax, related to a
favorable lawsuit settlement.
Full Year 2009 Financial Highlights:
-- Consolidated sales grew 4% to $3.2 billion in U.S. dollars, an all-time
record. Adjusting for the impact of the number of weeks, sales grew 6%.
On a constant currency basis, sales grew 8%.
-- Consumer channel sales grew 12% to $1.8 billion in U.S. dollars.
Adjusting for the impact of the number of weeks, sales grew 15%. On a
constant currency basis, sales grew 14%.
-- Business to business channel sales were $1.3 billion in U.S. dollars, a
5% decline. Adjusting for the impact of the number of weeks, sales
declined 3%. On a constant currency basis, sales increased 1%.
-- Diluted EPS was $1.24 compared to $1.40.
Performance Summary
(U.S dollars in millions, except per share data)
Highlights Quarter Ended Dec 31, Full Year Ended Dec 31,
2009 2008 2009 2008
Sales $ 938.2 $ 812.7 $ 3,166.0 $ 3,033.0
Gross profit $ 132.9 $ 114.6 $ 460.2 $ 458.6
Gross margin 14.2 % 14.1 % 14.5 % 15.1 %
Operating income $ 30.3 $ 15.8 $ 73.4 $ 83.4
Operating margin 3.2 % 1.9 % 2.3 % 2.7 %
Diluted earnings per share $ 0.49 $ 0.27 $ 1.24 $ 1.40
Richard Leeds, Chairman and Chief Executive Officer, said, "Systemax
posted all-time record sales, with over 24% growth in the fourth quarter
on an equivalent weeks basis. Our business to business sales growth was
the highest, driven by the impact of the WStore acquisition which was
completed in September 2009 and modestly improving economic conditions
in certain of the geographies in which we sell. Our consumer channel
sales benefited from a robust holiday season that saw consumers shopping
for lower priced products such as netbook computers, digital cameras and
smaller flat screen televisions both online and at our retail stores, as
well as the Circuit City asset purchase which was completed in May 2009.
The market share growth strategy we have followed since the beginning of
the economic downturn is beginning to pay off for us. Our diligent cost
controls, coupled with the strong top-line sales growth, resulted in our
growing operating income by 92% and diluted EPS by 81%. Looking ahead,
we believe our capacity to capture value and deliver it to customers
through our recognized brands, including TigerDirect, CompUSA, Circuit
City, MISCO, WStore and Global Industrial, positions us well for 2010."
Supplemental Channel Sales Summary
(in millions)
Quarter Ended Dec 31, Full Year Ended Dec 31,
Channel
2009 2008 2009 2008
Consumer1 $ 537.6 $ 491.3 $ 1,845.6 $ 1,645.1
Business to business2 $ 400.6 $ 321.4 $ 1,320.4 $ 1,387.9
Consolidated sales $ 938.2 $ 812.7 $ 3,166.0 $ 3,033.0
1Includes sales from retail stores, consumer websites,
inbound call centers and television shopping
2Includes sales from managed business relationships,
including outbound call centers and extranets, and the entire Industrial
Products segment
Supplemental "Same Store" channel growth3- Q4 2009 vs Q4 2008
Channel Change
Consumer 12%
Business to business 11%
3Comprised of revenue at retail stores, websites and call
centers operating for at least 14 full months and adjusting for the
impact of the number of weeks in the quarter. The calculation of the
comparable store sales percentage change excludes the effect of
fluctuations in foreign currency exchange rates. The method of
calculating comparable store and channel sales varies across the retail
and direct marketing industry. As a result, Systemax's method of
calculating comparable sales may not be the same as other companies'
methods.
Supplemental Product Category Sales Summary
(in millions)
Quarter Ended Dec 31, Full Year Ended Dec 31,
Product Category
2009 2008 2009 2008
Computers $ 208.4 $ 155.4 $ 730.8 $ 525.0
Consumer electronics $ 251.7 $ 217.7 $ 779.5 $ 727.1
Computer components $ 145.9 $ 140.2 $ 538.2 $ 552.0
Computer accessories & software $ 257.0 $ 228.8 $ 852.1 $ 925.1
Industrial products $ 49.6 $ 54.8 $ 196.1 $ 237.0
Other $ 25.6 $ 15.8 $ 69.3 $ 66.8
Consolidated sales $ 938.2 $ 812.7 $ 3,166.0 $ 3,033.0
Supplemental Business Unit Sales Summary
(in millions)
Quarter Ended Dec 31, Full Year Ended Dec 31,
Business Unit
2009 2008 2009 2008
Technology Products - North $ 618.7 $ 540.8 $ 2,119.4 $ 1,854.9
America
Technology Products - Europe $ 269.2 $ 216.9 $ 848.5 $ 940.6
Industrial Products $ 49.6 $ 54.8 $ 196.1 $ 237.0
Software Solutions $ 0.7 $ 0.2 $ 2.0 $ 0.5
Consolidated Sales $ 938.2 $ 812.7 $ 3,166.0 $ 3,033.0
Working capital as of December 31, 2009 was $252.5 million, including
cash and cash equivalents of $58.3 million. Cash for the year was
impacted by the Circuit City asset purchase, the WStore acquisition, the
payment of the 2009 special dividend, higher inventory levels to support
a growing retail store base and increasing sales volume from the
Company's e-commerce consumer business, and higher accounts receivable
from growth in open account business to business sales. As of December
31, 2009, the Company had an undrawn credit facility of $120.0 million
and total cash and available liquidity of over $150.0 million. Short
term debt totaled approximately $15.2 million at December 31, 2009 and
included approximately $14.2 million in revolving debt assumed as part
of the WStore acquisition as well as capitalized lease obligations. The
Company's effective tax rate for the full year 2009 was 36.8%,
essentially flat with last year. Included in the 2009 rate is a reversal
of tax reserves of approximately $1.2 million as the result of statute
expirations. Excluding this reserve reversal, the Company's 2009
effective tax rate would have been 38.4%.
Earnings Conference Call Details
Systemax Inc. will host a teleconference to discuss its fourth quarter
and full year 2009 results today, March 8, 2010 at 5:00 p.m. Eastern
Time. To access the teleconference, please dial 877-881-2609 (U.S.
callers) or 970-315-0463 (Int'l callers) and reference passcode 58388671
ten minutes prior to the start time. The teleconferencing will also be
available via live webcast on the Company's Web site at www.systemax.com.
A replay of the conference call will be available through March 15,
2010. It can be accessed by dialing 800-642-1687 (U.S. callers) or
706-645-9291 (Int'l callers), passcode 58388671. The webcast will also
be archived on www.systemax.com
for approximately 90 days.
About Systemax Inc.
Systemax Inc. (http://www.systemax.com),
a Fortune 1000 company, sells personal computers, computer components
and supplies, consumer electronics and industrial products through a
system of branded e-Commerce web sites, retail stores, relationship
marketers and direct mail catalogs in North America and Europe. The
primary brands are TigerDirect, CompUSA, Circuit City, MISCO, WStore and
Global Industrial.
Forward-Looking Statements
This press release contains forward-looking statements about the
Company's performance. These statements are based on management's
estimates, assumptions and projections and are not guarantees of future
performance. The Company assumes no obligation to update these
statements. Actual results may differ materially from results expressed
or implied in these statements as the result of risks, uncertainties and
other factors including, but not limited to: (a) unanticipated
variations in sales volume, (b) economic conditions and exchange rates,
(c) actions by competitors, (d) the continuation of key vendor
relationships, (e) the ability to maintain satisfactory loan agreements
with lenders, (f) risks associated with the delivery of merchandise to
customers utilizing common carriers, (g) the operation of the Company's
management information systems, and (h) unanticipated legal and
administrative proceedings. Please refer to "Risk Factors" and the
Forward Looking Statements sections contained in the Company's Form 10-K
for a more detailed explanation of the inherent limitations in such
forward-looking statements.
SYSTEMAX INC.
Condensed Consolidated Statements of Operations - Unaudited
(In thousands, except per share amounts)
Quarter Ended Year Ended
December 31* December 31*
2009 2008 2009 2008
Net sales $ 938,248 $ 812,710 $ 3,165,995 $ 3,032,961
Cost of sales 805,367 698,073 2,705,747 2,574,402
Gross profit 132,881 114,637 460,248 458,559
Gross margin 14.2 % 14.1 % 14.5 % 15.1 %
Selling, general and 102,548 98,843 386,857 375,192
administrative expenses
Operating income 30,333 15,794 73,391 83,367
Operating margin 3.2 % 1.9 % 2.3 % 2.7 %
Interest and other 895 467 306 (376 )
expense (income), net
Income before income 29,438 15,327 73,085 83,743
taxes
Provision for income 11,040 5,359 26,900 30,900
taxes
Effective tax rate 37.5 % 35.0 % 36.8 % 36.9 %
Net income $ 18,398 $ 9,968 $ 46,185 $ 52,843
Net margin 2.0 % 1.2 % 1.5 % 1.7 %
Net income per common
share:
Basic $ 0.50 $ 0.27 $ 1.26 1.43
Diluted $ 0.49 $ 0.27 $ 1.24 1.40
Weighted average common and
common equivalent shares:
Basic 36,817 36,893 36,706 36,950
Diluted 37,432 37,497 37,343 37,705
SYSTEMAX INC.
Condensed Consolidated Balance Sheets - Unaudited
(In thousands)
December 31*
2009 2008
Current assets:
Cash and cash equivalents $58,309 $115,967
Accounts receivable, net 241,860 182,841
Inventories 365,725 290,594
Prepaid expenses and other current assets 29,154 22,225
Total current assets 695,048 611,627
Property, plant and equipment, net 65,598 48,465
Goodwill, intangibles and other assets 56,255 42,361
Total assets $816,901 $702,453
Current liabilities:
Short-term debt $15,197 $773
Accounts payable and accrued expenses 427,307 357,762
Total current liabilities 442,504 358,535
Long-term debt 1,194 1,411
Other liabilities 8,518 8,552
Shareholders' equity 364,685 333,955
Total liabilities and shareholders' equity $816,901 $702,453
* Systemax manages its business and reports using a 52-53 week fiscal
year that ends at midnight on the Saturday closest to December 31. For
clarity of presentation, fiscal years and quarters are described as if
they ended on the last day of the respective calendar month. The
actual fiscal year and quarter ended on January 2, 2010. The fourth
quarter of 2009 and 2008 included 13 and 14 weeks, respectively, and the
fiscal year 2009 and 2008 included 52 and 53 weeks, respectively.
Source: Systemax Inc.
Contact: INVESTOR/ MEDIA CONTACTS:
Brainerd Communicators, Inc.
Denise Roche / Nancy Zachary
212-986-6667
[email protected]
[email protected]