Delaware
(State or Other Jurisdiction
of Incorporation)
|
1-13792
(Commission
File Number)
|
11-3262067
(IRS Employer
Identification No.)
|
Exhibit Number | Description |
99.1 | Press Release of Systemax Inc., dated April 30, 2013, regarding financial results for the first quarter ended March 31, 2013. |
99.1
|
Press Release of Systemax Inc., dated April 30, 2013, regarding financial results for the first quarter ended March 31, 2013.
|
Performance Summary
(U.S. dollars in millions, except per share data)
|
||||||||
Highlights
|
Quarter Ended
March 31,
|
|||||||
GAAP Results
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2013
|
2012
|
||||||
Sales
|
$ | 880.7 | $ | 913.2 | ||||
Gross profit
|
$ | 122.6 | $ | 130.7 | ||||
Gross margin
|
13.9 | % | 14.3 | % | ||||
Operating income (loss) from continuing operations
|
$ | (8.7 | ) | $ | 10.8 | |||
Operating margin from continuing operations
|
(1.0 | )% | 1.2 | % | ||||
Net income (loss)
|
$ | (6.3 | ) | $ | 7.1 | |||
Diluted net income (loss) per share
|
$ | (0.17 | ) | $ | 0.19 | |||
Non-GAAP Results*
|
||||||||
Non-recurring and recurring adjustments, net
|
$ | 8.0 | $ | 3.2 | ||||
Adjusted operating income (loss)
|
$ | (0.7 | ) | $ | 14.0 | |||
Adjusted operating margin
|
(0.1 | )% | 1.5 | % | ||||
Adjusted net income (loss)
|
$ | (0.8 | ) | $ | 9.3 | |||
Adjusted diluted net income (loss) per share
|
$ | (0.02 | ) | $ | 0.25 |
●
|
Consolidated sales declined 3.6% to $880.7 million in U.S. dollars. On a constant currency basis, sales declined 3.4%.
|
●
|
Business to business channel sales grew 1.6% to $543.8 million in U.S. dollars. On a constant currency basis, sales grew 2.0%.
|
●
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Consumer channel sales declined 10.9% to $336.9 million in U.S. dollars. On a constant currency basis, sales declined 10.9%.
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●
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“Same store” business to business sales grew 2.0% and same store consumer sales declined 10.7% on a constant currency basis.
|
●
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GAAP operating income declined to a loss of $8.7 million compared to income of $10.8 million last year. Non-GAAP operating income was a loss of $0.7 million compared to income of $14.0 million last year.
|
●
|
GAAP diluted net income per share declined to a loss of $0.17. Non-GAAP diluted income per share declined to a loss of $0.02.
|
Supplemental Channel Sales Summary*
(in millions)
|
||||||||||||||||||||
Channel
|
Quarter Ended March 31,
|
|||||||||||||||||||
2013
|
% of Sales
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Change y/y
|
2012
|
% of Sales
|
||||||||||||||||
Business to Business1
|
$ | 543.8 | 61.7 | % | 1.6 | % | $ | 535.0 | 58.6 | % | ||||||||||
Consumer 2
|
$ | 336.9 | 38.3 | % | (10.9 | )% | $ | 378.2 | 41.4 | % | ||||||||||
Consolidated Sales
|
$ | 880.7 | 100.0 | % | (3.6 | )% | $ | 913.2 | 100.0 | % |
Supplemental “Same Store” Channel Growth1 – Q1 2013 vs. Q1 2012
|
||||
Channel
|
Change
|
|||
Business to Business
|
2.0 | % | ||
Consumer
|
(10.7 | )% | ||
Consolidated Sales
|
(3.3 | )% |
Supplemental Product Category Sales Summary
(in millions)
|
||||||||||||||||||||
Product Category
|
Quarter Ended March 31,
|
|||||||||||||||||||
2013
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% of Sales
|
Change y/y
|
2012
|
% of Sales
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||||||||||||||||
Computers
|
$ | 275.1 | 31.2 | % | 5.2 | % | $ | 261.4 | 28.6 | % | ||||||||||
Computer Accessories & Software
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$ | 239.0 | 27.1 | % | (7.9 | )% | $ | 259.4 | 28.4 | % | ||||||||||
Consumer Electronics
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$ | 135.4 | 15.4 | % | (18.7 | )% | $ | 166.5 | 18.2 | % | ||||||||||
Industrial Products
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$ | 105.6 | 12.0 | % | 16.8 | % | $ | 90.4 | 9.9 | % | ||||||||||
Computer Components
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$ | 103.0 | 11.7 | % | (4.9 | )% | $ | 108.3 | 11.9 | % | ||||||||||
Other
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$ | 22.6 | 2.6 | % | (16.9 | )% | $ | 27.2 | 3.0 | % | ||||||||||
Consolidated Sales
|
$ | 880.7 | 100.0 | % | (3.6 | )% | $ | 913.2 | 100.0 | % |
Supplemental Business Unit Sales Summary
(in millions)
|
|||||||||||||||||||||
Business Unit
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Quarter Ended March 31,
|
||||||||||||||||||||
2013
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% of Sales
|
Change y/y
|
2012
|
% of Sales
|
|||||||||||||||||
Technology Products
|
$ | 773.5 | 87.8 | % | (5.8 | )% | $ | 821.5 | 90.0 | % | |||||||||||
Industrial Products
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$ | 105.6 | 12.0 | % | 16.8 | % | $ | 90.4 | 9.9 | % | |||||||||||
Corporate and Other
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$ | 1.6 | 0.2 | % | 23.1 | % | $ | 1.3 | 0.1 | % | |||||||||||
Consolidated Sales
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$ | 880.7 | 100.0 | % | (3.6 | )% | $ | 913.2 | 100.0 | % |
Supplemental Business Unit GAAP Operating Income (Loss) Summary
(in millions)
|
||||||||||||||||
Business Unit
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Quarter Ended March 31,
|
|||||||||||||||
2013
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Margin
|
2012
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Margin
|
|||||||||||||
Technology Products
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$ | (11.3 | ) | (1.5 | )% | $ | 8.8 | 1.1 | % | |||||||
Industrial Products
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$ | 8.5 | 8.0 | % | $ | 8.3 | 9.2 | % | ||||||||
Corporate and Other
|
$ | (5.9 | ) |
NM
|
$ | (6.3 | ) |
NM
|
||||||||
Consolidated Operating Income (Loss)
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$ | (8.7 | ) | (1.0 | )% | $ | 10.8 | 1.2 | % | |||||||
Non-GAAP Operating Income (Loss)*
|
||||||||||||||||
Technology Products
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$ | (4.1 | ) | (0.5 | )% | $ | 11.1 | 1.4 | % | |||||||
Industrial Products
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$ | 8.9 | 8.4 | % | $ | 8.7 | 9.6 | % | ||||||||
Corporate and Other
|
$ | (5.5 | ) |
NM
|
$ | (5.8 | ) |
NM
|
||||||||
Consolidated Operating Income (Loss)
|
$ | (0.7 | ) | (0.1 | )% | $ | 14.0 | 1.5 | % |
SYSTEMAX INC.
|
|||||||||
Condensed Consolidated Statements of Operations – Unaudited
|
|||||||||
(In millions, except per share amounts)
|
|||||||||
Quarter Ended
|
|||||||||
March 31*
|
|||||||||
2013
|
2012
|
||||||||
Net sales
|
$ | 880.7 | $ | 913.2 | |||||
Cost of sales
|
758.1 | 782.5 | |||||||
Gross profit
|
122.6 | 130.7 | |||||||
Gross margin
|
13.9 | % | 14.3 | % | |||||
Selling, general and administrative expenses
|
125.2 | 118.0 | |||||||
Special charges (gains), net
|
6.1 | 1.9 | |||||||
Operating income (loss) from continuing operations
|
(8.7 | ) | 10.8 | ||||||
Operating margin
|
(1.0 | )% | 1.2 | % | |||||
Interest and other (income) expense, net
|
0.5 | - | |||||||
Income (loss) from continuing operations before income taxes
|
(9.2 | ) | 10.8 | ||||||
(Benefit from) provision for income taxes
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(2.9 | ) | 3.5 | ||||||
Effective tax rate
|
31.5 | % | 32.4 | % | |||||
Income (loss) from continuing operations
|
(6.3 | ) | 7.3 | ||||||
Discontinued operations
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- | (0.2 | ) | ||||||
Net income (loss)
|
$ | (6.3 | ) | $ | 7.1 | ||||
Net margin
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(0.7 | )% | 0.8 | % | |||||
Net income per common share:
|
|||||||||
Basic
|
$ | (0.17 | ) | $ | 0.19 | ||||
Diluted
|
$ | (0.17 | ) | $ | 0.19 | ||||
Weighted average common and common equivalent shares:
|
|||||||||
Basic
|
37.0 | 36.8 | |||||||
Diluted
|
37.0 | 37.1 | |||||||
SYSTEMAX INC.
|
||||||||
Condensed Consolidated Balance Sheets - Unaudited
|
||||||||
(In millions)
|
||||||||
March 31*
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December 31*
|
|||||||
2013
|
2012
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 134.7 | $ | 150.7 | ||||
Accounts receivable, net
|
295.4 | 297.4 | ||||||
Inventories
|
324.8 | 367.2 | ||||||
Prepaid expenses and other current assets
|
39.2 | 37.1 | ||||||
Total current assets
|
794.1 | 852.4 | ||||||
Property, plant and equipment, net
|
60.7 | 63.0 | ||||||
Goodwill, intangibles and other assets
|
46.0 | 46.9 | ||||||
Total assets
|
$ | 900.8 | $ | 962.3 | ||||
Current liabilities:
|
||||||||
Short-term debt
|
$ | 2.6 | $ | 2.8 | ||||
Accounts payable and accrued expenses
|
439.9 | 488.8 | ||||||
Total current liabilities
|
442.5 | 491.6 | ||||||
Long-term debt
|
4.8 | 5.3 | ||||||
Other liabilities
|
19.7 | 19.1 | ||||||
Shareholders’ equity
|
433.8 | 446.3 | ||||||
Total liabilities and shareholders’ equity
|
$ | 900.8 | $ | 962.3 | ||||
SYSTEMAX INC.
|
||||||
Reconciliation of Segment GAAP Operating Income (loss) to Non-GAAP Operating Income (loss) - Unaudited
|
||||||
(In millions)
|
||||||
Quarter Ended
|
||||||
March 31*
|
||||||
2013 | 2012 | |||||
Technology Products
|
$ | (11.3 | ) | $ | 8.8 | |
Industrial Products
|
8.5 | 8.3 | ||||
Corporate And Other
|
(5.9 | ) | (6.3 | ) | ||
GAAP Operating income (loss)
|
(8.7 | ) | 10.8 | |||
Non-GAAP adjustments:
|
||||||
Technology Products:
|
||||||
Severance and other reorganization related charges
|
5.9 | 1.1 | ||||
Litigation costs (1)
|
0.1 | 0.5 | ||||
New facility startup costs (2)
|
0.7 | - | ||||
Stock based compensation
|
0.3 | 0.4 | ||||
Intangible asset amortization
|
0.2 | 0.3 | ||||
Total Non-GAAP Adj. Technology Products
|
7.2 | 2.3 | ||||
Industrial Products:
|
||||||
New facility startup costs (3)
|
0.1 | 0.3 | ||||
Stock based compensation
|
0.3 | 0.1 | ||||
Total Non-GAAP Adj. Industrial Products
|
0.4 | 0.4 | ||||
Corporate and Other:
|
||||||
Stock based compensation
|
0.4 | 0.5 | ||||
Total Non-GAAP Adj. Technology Products
|
0.4 | 0.5 | ||||
Technology Products
|
(4.1 | ) | 11.1 | |||
Industrial Products
|
8.9 | 8.7 | ||||
Corporate And Other
|
(5.5 | ) | (5.8 | ) | ||
Non-GAAP Operating income (loss)*
|
$ | (0.7 | ) | $ | 14.0 | |
* Management believes that by excluding the adjustments above from GAAP Operating Income, investors have an additional meaningful measurement of the Company’s operating results.
|
||||||
(1) Includes legal costs related to the investigations of former officers and employees, net.
|
||||||
(2) Includes start up costs related to the opening of a shared services center for our European Technology business.
|
||||||
(3) Includes the costs related to the closing and relocation of one of our smaller distribution centers to a new, significantly larger distribution center and call center for our Industrial Products business.
|
SYSTEMAX INC.
|
||||||||
Reconciliation of GAAP Net Income (loss) to Non-GAAP Net Income (loss) - Unaudited
|
||||||||
(In millions)
|
||||||||
Quarter Ended
|
||||||||
March 31*
|
||||||||
2013
|
2012
|
|||||||
Net income (loss)
|
$ | (6.3 | ) | $ | 7.1 | |||
Non-GAAP adjustments:
|
||||||||
Non-recurring
|
||||||||
Severance and other reorganization related charges(1)
|
5.9 | 1.1 | ||||||
New facility start up costs (2)
|
0.8 | 0.3 | ||||||
Litigation costs (3)
|
0.1 | 0.5 | ||||||
Income tax effect (4)
|
(2.1 | ) | (0.6 | ) | ||||
Total non- recurring adjustments, net of tax
|
4.7 | 1.3 | ||||||
Recurring
|
||||||||
Stock based compensation
|
1.0 | 1.0 | ||||||
Intangible asset amortization
|
0.2 | 0.3 | ||||||
Income tax effect(4)
|
(0.4 | ) | (0.4 | ) | ||||
Total recurring adjustments
|
0.8 | 0.9 | ||||||
Non-GAAP net income*
|
$ | (0.8 | ) | $ | 9.3 | |||
Diluted earnings per share
|
$ | (0.17 | ) | $ | 0.19 | |||
Non-GAAP Diluted earnings per share*
|
$ | (0.02 | ) | $ | 0.25 | |||
* Management believes that by excluding the adjustments above from GAAP net income investors have an additional meaningful measurement of the Company’s net income.
|
||||||||
(1) Includes $2.0M in charges related severance and reorganization in our North America Technology business related to our previously announced leadership changes as well as $4M in charges for ongoing restructuring within our European Technology business related to the opening of a shared services center.
|
||||||||
(2) Q1 2013 charges include costs associated with the opening of a shared services center for our European Technology business while Q1 2012 charges includes costs related to the closing and relocation of one of our smaller distribution centers to a new, significantly larger distribution and call center for our Industrial Products business.
|
||||||||
(3) Includes legal costs related to the investigations of former officers and employees, net.
|
||||||||
(4) Effective Tax Rate of 31.5% and 32.4% used in Q1 2013 and Q1 2012 respectively.
|
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