-- Sales Grow to a First Quarter Record $930 million, Led by B2B
Channels --
PORT WASHINGTON, N.Y.--(BUSINESS WIRE)--
Systemax Inc. (NYSE:SYX) today announced financial results for
the first quarter ended March 31, 2011.
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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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|
|
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2011
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2010
|
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Sales
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$929.9
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$915.2
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Gross Profit
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$130.5
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$124.6
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Gross Margin
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14.0%
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13.6%
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Operating Income
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$18.6
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$20.4
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Operating Margin
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2.0%
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2.2%
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Diluted earnings per share
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$0.36
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$0.31
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One-time charges, after tax, per diluted share
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$0.01
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$-
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First Quarter 2011 Financial Highlights:
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Consolidated sales grew 2% to $929.9 million in U.S. dollars. On a
constant currency basis, sales grew 1%.
-
Business to business channel sales grew 8% to $480.5 million in U.S.
dollars. On a constant currency basis, sales grew 7%.
-
Consumer channel sales declined 4% to $449.4 million in U.S. dollars.
On a constant currency basis, sales declined 5%.
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“Same store” business to business channel sales grew 7%, while same
store consumer channel sales declined 8%.
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One-time charges were $0.5 million or approximately $0.01 per diluted
share after tax, for costs primarily related to an internal
whistleblower investigation.
-
Diluted earnings per share (EPS) was $0.36.
Richard Leeds, Chairman and Chief Executive Officer, said, “We had a
solid start to 2011 that underscores the channel, product and geographic
diversity that define Systemax. Our Technology Products business to
business operations continue to perform well, particularly in Europe as
the business climates in most of our locations appear to have
stabilized. In addition, the Industrial Products group had another
outstanding quarter, delivering strong double digit growth from product
expansion and other growth initiatives. Consumer channel results were
soft, reflecting the choppy economic environment; however, we did see
improvement in our performance as we moved through the quarter. We are
also beginning to see encouraging signs from the strategic initiatives
we have underway to improve our margins performance. In fact, gross
margins for the first quarter improved on both a year ago and sequential
basis. Operating margins declined due to investments in business to
business operations, including the addition of sales heads and costs
related to new stores and the new distribution center for the Technology
Products segment. Overall we are well positioned with a solid balance
sheet, which provides us tremendous financial flexibility and a deep
management team that is committed to building long-term value for our
shareholders.”
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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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2011
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2010
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Business to business1
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$480.5
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$445.2
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Consumer2
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$449.4
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$470.0
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Consolidated Sales
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$929.9
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$915.2
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1
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Includes sales from managed business relationships, including
outbound call centers and extranets, and the entire Industrial
Products and Corporate segments
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2
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Includes sales from retail stores, consumer websites, inbound call
centers and television shopping
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Supplemental “Same Store” Channel Growth1
– Q1 2011 vs Q1 2010
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Channel
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Change
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Business to business
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7%
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Consumer
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-8%
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Consolidated Sales
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-0.4%
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1
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Comprised of revenue at retail stores, websites and call centers
operating for at least 14 full months as of the beginning of the
current comparison 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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2011
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2010
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Computer accessories & software
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$270.6
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$256.8
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Computers
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$218.7
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$227.6
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Consumer electronics
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$205.6
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$205.7
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Computer components
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$142.5
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$147.2
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Industrial products
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$70.8
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$54.5
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Other
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$21.7
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$23.4
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Consolidated sales
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$929.9
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$915.2
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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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2011
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2010
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Technology Products
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$858.3
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$860.1
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Industrial Products
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$70.8
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$54.5
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Corporate and Other
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$0.8
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$0.6
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Consolidated sales
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$929.9
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$915.2
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Working capital grew during the quarter by $19.2 million to $320.1
million as of March 31, 2011, primarily due to net income for the
quarter. Cash and cash equivalents grew during the quarter by $20.2
million to $112.3 million and as of March 31, 2011 the Company had
availability under its credit facility of approximately $115.8 million
and total cash and available liquidity of approximately $228.0 million.
Short and long-term debt totaled approximately $24.0 million at March
31, 2011.
The Company’s effective tax rate for the quarter was 30.8%, compared to
37.5% last year. The lower quarterly effective tax rate was primarily
due to a higher mix of taxable income in countries with lower tax rates.
Earnings Conference Call Details
Systemax Inc. will host a teleconference to discuss its first quarter
2011 results today, May 10, 2011 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 64478513 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 17, 2011.
It can be accessed by dialing 800-642-1687 (U.S. callers) or
706-645-9291 (Int’l callers), passcode 64478513. 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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2011
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2010
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Net sales
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$929,867
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$915,237
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Cost of sales
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799,369
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790,636
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Gross profit
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130,498
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124,601
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Gross margin
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14.0%
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13.6%
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Selling, general and administrative expenses
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111,369
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104,188
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Reorganization and other charges
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504
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|
-
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Operating income
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18,625
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20,413
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Operating margin
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2.0%
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2.2%
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Interest and other (income) expense
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(979)
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1,616
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Income before income taxes
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19,604
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18,797
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Provision for income taxes
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6,038
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7,046
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Effective tax rate
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30.8%
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37.5%
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Net income
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$13,566
|
|
$11,751
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Net margin
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1.5%
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1.3%
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Net income per common share:
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Basic
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$0.37
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$0.32
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Diluted
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$0.36
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$0.31
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Weighted average shares:
|
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Basic
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37,157
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36,785
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Diluted
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37,708
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37,471
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SYSTEMAX INC.
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Condensed Consolidated Balance Sheets
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(In thousands)
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(Unaudited)
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March 31
|
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December 31
|
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2011
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2010
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Current assets:
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Cash and cash equivalents
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$112,284
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$92,077
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Accounts receivable, net
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282,809
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276,344
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Inventories
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373,874
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370,375
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Prepaid expenses and other current assets
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22,628
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26,441
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Total current assets
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791,595
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765,237
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Property, plant and equipment, net
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74,412
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|
73,765
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Goodwill, intangibles and other assets
|
55,135
|
|
55,098
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Total assets
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$921,142
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$894,100
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Current liabilities:
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Short-term debt
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$17,220
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$2,655
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Accounts payable and accrued expenses
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454,311
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461,710
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Total current liabilities
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471,531
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464,365
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Long-term debt
|
6,777
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7,386
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Other liabilities
|
14,273
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13,081
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Shareholders’ equity
|
428,561
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409,268
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Total liabilities and shareholders’ equity
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$921,142
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$894,100
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* 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 quarter ended on
April 2, 2011. The first quarters of both 2011 and 2010 included
13 weeks.
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Source: Systemax Inc.
Contact:
Investor/Media:
Brainerd Communicators, Inc.
Dianne
Pascarella / Nancy Zakhary
212-986-6667
[email protected]
[email protected]