Sales Up 22%; EPS Up 35% to $0.31
PORT WASHINGTON, N.Y.--(BUSINESS WIRE)--
Systemax Inc. (NYSE:SYX) today announced financial results for
the first quarter ended March 31, 2010.
First Quarter 2010 Financial Highlights:
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Consolidated sales grew 22% to $915.2 million in U.S. dollars. On a
constant currency basis and excluding WStore results, sales grew 12%.
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Diluted earnings per share (EPS) grew 35% to $0.31.
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Consumer channel sales grew 9% to $470.0 million in U.S. dollars. On a
constant currency basis and excluding WStore results, sales grew 1%.
-
Business to business channel sales grew 38% to $445.2 million in U.S.
dollars. On a constant currency basis and excluding WStore results,
sales grew 27%.
-
“Same store” business to business channel sales grew 20% while
consumer channel sales declined 1%. A moderate same store consumer
channel sales increase in North America was offset by a decline in
Europe.
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Performance Summary
(U.S dollars in millions, except per share data)
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Highlights
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Quarter Ended March 31,
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2010
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2009
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Sales
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$
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915.2
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|
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$
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752.3
|
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Gross profit
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$
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126.2
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$
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107.6
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Gross margin
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13.8
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%
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14.3
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%
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Operating income
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$
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20.4
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$
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15.0
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Operating margin
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2.2
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%
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|
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2.0
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%
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Diluted earnings per share
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$
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0.31
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$
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0.23
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“Systemax’s strong first quarter consolidated performance is a testament
to the diversification we have built in our business, which is a key
component of our long-term growth strategy, and the moderately improving
economic climate. The 22 percent sales growth we reported this quarter
was primarily driven by success in our business to business sales
channels, specifically our European Technology Products Group and
Industrial Products Group in North America. We also delivered a strong
bottom line performance with operating income increasing 36 percent and
diluted earnings per share up 35 percent, as we continue to benefit from
our focus on cost controls. We remain confident in Systemax’s growth
potential and in our ability to build value for our shareholders,” said
Richard Leeds, Chairman and Chief Executive Officer.
Gilbert Fiorentino, Chief Executive of Systemax’s Technology Products
Group said, “This quarter highlights the benefit of having a
multi-channel strategy, with diversified revenue streams, strong brands,
and expanded product categories. Our Technology Products Group delivered
an outstanding quarter with sales growth of 22 percent in U.S. dollars.
Our business to business operations were the highlight of the quarter
with strong sales growth in both North America and Europe. In North
America we focus our B2B efforts primarily on small business, and we
were pleased with the growth in this market. In our consumer channels we
had moderate sales growth in North America, which was offset by a
decline in Europe. We believe our European consumer sales channels
represent a significant growth opportunity as our experience, strong
customer service and establish brands uniquely position us in this
segment.”
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Supplemental Channel Sales Summary
(in millions)
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Channel
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Quarter Ended March 31,
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2010
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2009
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Consumer1
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$
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470.0
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$
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429.8
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Business to business2
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$
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445.2
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$
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322.5
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Consolidated sales
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$
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915.2
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$
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752.3
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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
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Supplemental “Same Store” Channel Growth3
– Q1 2010 vs Q1 2009
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Channel
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Change
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Consumer
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-1%
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Business to business
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20%
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Consolidated sales
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10%
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3Comprised of revenue at retail stores, websites and call
centers operating for at least 14 full months as of the beginning of the
period and computed on a constant currency basis. 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.
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Supplemental Product Category Sales Summary
(in millions)
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Product Category
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Quarter Ended March 31,
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2010
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2009
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Computers
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$
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227.6
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$
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132.5
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Consumer electronics
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$
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205.7
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$
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198.5
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Computer components
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$
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147.2
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$
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145.8
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Computer accessories & software
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$
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256.8
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$
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214.7
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Industrial products
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$
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54.5
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$
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45.7
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Other
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$
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23.4
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$
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15.1
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Consolidated sales
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$
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915.2
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$
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752.3
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|
|
|
|
|
|
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Supplemental Business Unit Sales Summary
(in millions)
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Business Unit
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Quarter Ended March 31,
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2010
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2009
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Technology Products – North America
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$
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581.6
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$
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502.4
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Technology Products – Europe
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$
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279.0
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$
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203.9
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Industrial Products
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$
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54.5
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$
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45.6
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Software Solutions
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$
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0.1
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$
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0.4
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Consolidated sales
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$
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915.2
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$
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752.3
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|
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|
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|
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Working capital as of March 31, 2010 was $264.7 million, including cash
and cash equivalents of $37.6 million. As of March 31, 2010, the Company
had availability under its credit facility of approximately $105.0
million and total cash and available liquidity of over $140 million.
Short term debt totaled approximately $16.6 million at March 31, 2010
and included approximately $13.4 million in revolving debt assumed as
part of the WStore acquisition. The Company’s effective tax rate was
37.5%, compared to 39.5% last year. The lower rate in 2010 is the result
of the Company having a higher percentage of its pretax income in
countries with lower tax rates.
Earnings Conference Call Details
Systemax Inc. will host a teleconference to discuss its first quarter
2010 results today, May 11, 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 72711364 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 May 18, 2010.
It can be accessed by dialing 800-642-1687 (U.S. callers) or
706-645-9291 (Int’l callers), passcode 72711364. 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.
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SYSTEMAX INC.
Condensed Consolidated Statements of Operations – Unaudited
(In thousands, except per share amounts)
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Quarter Ended
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March 31*
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2010
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2009
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Net sales
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$
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915,237
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$
|
752,268
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Cost of sales
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788,996
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644,718
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Gross profit
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126,241
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|
|
|
107,550
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|
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Gross margin
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|
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13.8
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%
|
|
|
14.3
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%
|
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Selling, general and administrative expenses
|
|
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105,865
|
|
|
|
92,530
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Operating income
|
|
|
20,376
|
|
|
|
15,020
|
|
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Operating margin
|
|
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2.2
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%
|
|
|
2.0
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%
|
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Interest and other expense
|
|
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1,579
|
|
|
|
654
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Income before income taxes
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|
|
18,797
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|
|
|
14,366
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|
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Provision for income taxes
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|
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7,046
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|
|
|
5,668
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Effective tax rate
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37.5
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%
|
|
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39.5
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%
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Net income
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|
$
|
11,751
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|
|
$
|
8,698
|
|
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Net margin
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|
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1.3
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%
|
|
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1.2
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%
|
|
|
|
|
|
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Net income per common share:
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|
|
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Basic
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$
|
0.32
|
|
|
$
|
0.24
|
|
|
Diluted
|
|
$
|
0.31
|
|
|
$
|
0.23
|
|
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Basic
|
|
|
36,785
|
|
|
|
36,621
|
|
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Diluted
|
|
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37,471
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|
|
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37,273
|
|
|
|
|
|
|
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SYSTEMAX INC.
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Condensed Consolidated Balance Sheets - Unaudited
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(In thousands)
|
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|
|
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March 31*
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December 31*
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2010
|
|
2009
|
|
Current assets:
|
|
|
|
|
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Cash and cash equivalents
|
|
$
|
37,571
|
|
$
|
58,309
|
|
Accounts receivable, net
|
|
|
241,398
|
|
|
241,860
|
|
Inventories
|
|
|
366,967
|
|
|
365,725
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Prepaid expenses and other current assets
|
|
|
23,881
|
|
|
26,692
|
|
Total current assets
|
|
|
669,817
|
|
|
692,586
|
|
Property, plant and equipment, net
|
|
|
64,772
|
|
|
65,598
|
|
Goodwill, intangibles and other assets
|
|
|
55,668
|
|
|
58,717
|
|
Total assets
|
|
$
|
790,257
|
|
$
|
816,901
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Short-term debt
|
|
$
|
16,637
|
|
$
|
15,197
|
|
Accounts payable and accrued expenses
|
|
|
388,462
|
|
|
427,307
|
|
Total current liabilities
|
|
|
405,099
|
|
|
442,504
|
|
Capitalized lease obligations
|
|
|
991
|
|
|
1,194
|
|
Other liabilities
|
|
|
8,999
|
|
|
8,518
|
|
Shareholders’ equity
|
|
|
375,168
|
|
|
364,685
|
|
Total liabilities and shareholders’ equity
|
|
$
|
790,257
|
|
$
|
816,901
|
* 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 first quarter ended on April 3, 2010. The first quarter of
2010 and 2009 included 13 weeks.
Source: Systemax Inc.
Contact:
INVESTOR/ MEDIA:
Brainerd Communicators, Inc.
Denise
Roche / Nancy Zachary, 212-986-6667
[email protected]
[email protected]