Segment Information

6 Months Ended

Jun. 30, 2014

Segment Information [Abstract]

Segment Information

6. Segment Information

Systemax is primarily a direct marketer of brand name and private label products.  Our operations are organized into two reportable business segments – Technology Products and Industrial Products.

The Technology Products segment sells products categorized as Information and Communications Technology ("ICT") and Consumer Electronics ("CE").  These products include computers, computer supplies and consumer electronics which are marketed in North America, Puerto Rico and Europe.  Most of these products are manufactured by other companies; however, the Company does offer a selection of products that are manufactured for our own design and marketed on a private label basis.

Our Industrial Products segment sells a wide array of industrial products and supplies categorized as Maintenance, Repairs and Operations ("MRO") which are marketed in North and Central America.  Most of these products are manufactured by other companies; however, the Company does offer a selection of products that are manufactured for our own design and marketed on a private label basis.

The Company's chief operating decision-maker is the Company's Chief Executive Officer ("CEO").  The CEO, in his role as Chief Operating Decision Maker ("CODM"), evaluates segment performance based on operating income (loss).  The CODM reviews assets and makes significant capital expenditure decisions for the Company on a consolidated basis only.  The accounting policies of the segments are the same as those of the Company.  Corporate costs not identified with the disclosed segments are grouped as "Corporate and other expenses".

The Company's Industrial Products and Technology Products segments sell dissimilar products.  Industrial products are generally higher in price, lower in volume and higher in product margin.  Technology products are generally higher in volume, lower in price and lower in product margin.  This results in higher operating margin for the Industrial Products segment.  Each segment incurs specifically identifiable selling, general and administrative expenses, with the selling, general and administrative expenses for the Industrial Products segment being higher as a percentage of sales than those of the Technology Products segment as a result of the Industrial Products segment having a longer selling cycle for its business customers and a business model requiring greater advertising expenditures than the Technology Products segment. Additionally, the Industrial Products segment's vendors generally do not provide funding to offset its marketing expenses.

Financial information relating to the Company's operations by reportable segment was as follows (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net sales:
Technology Products	$	687.6		$	685.8		$	1,430.4		$	1,459.3
Industrial Products		142.1			118.6			271.2			224.2
Corporate and Other		1.4			1.3			2.9			2.8
Consolidated	$	831.1		$	805.7		$	1,704.5		$	1,686.3
Operating income (loss):
Technology Products	$	(13.2	)	$	(12.1	)	$	(19.8	)	$	(23.3	)
Industrial Products		12.4			11.1			22.1			19.6
Corporate and Other		(4.6	)		(5.8	)		(9.0	)		(11.8	)
Consolidated	$	(5.4	)	$	(6.8	)	$	(6.7	)	$	(15.5	)

Financial information relating to the Company's operations by geographic area was as follows (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Net sales:
United States	$	508.9	$	502.9	$	1,009.7	$	1,037.1
United Kingdom		108.9		105.7		257.7		237.7
France		95.1		79.5		191.5		162.0
Other Europe		73.1		68.9		150.9		148.5
Other North America		45.1		48.7		94.7		101.0
Consolidated	$	831.1	$	805.7	$	1,704.5	$	1,686.3

Net sales are attributed to countries based on the location of the selling subsidiary.