1.	Basis of Presentation

The accompanying condensed consolidated financial statements of the Company and its wholly-owned subsidiaries are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America are not required in these interim financial statements and have been condensed or omitted. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to current year presentation.

We announced plans to exit the Software Solutions segment during the second quarter of 2009. As a result of the third party business activities of Software Solutions ending during the second quarter of 2012, all current and prior period results for this segment are now included in discontinued operations. Balance sheet amounts reflecting this change are not shown due to their immateriality.

In the third quarter of 2012, the Company reversed valuation allowances of approximately $15.1 million related to the deferred tax assets of the Company's subsidiary in France. Demonstrated and projected profitable results in the subsidiary's operations caused the valuation allowances to be deemed no longer necessary. The reversal of the valuation allowances positively impacted diluted earnings per share by $0.41.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of the Company as of September 30, 2012 and the results of operations for the three and nine month periods ended September 30, 2012 and 2011, statements of comprehensive income for the three and nine month periods ended September 30, 2012 and 2011, cash flows for the nine month periods ended September 30, 2012 and 2011 and changes in shareholders' equity for the nine month period ended September 30, 2012. The December 31, 2011 condensed consolidated balance sheet has been derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of December 31, 2011 and for the year then ended included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011. The results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results for the entire year.

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 herein, fiscal years and quarters are referred to as if they ended on the traditional calendar month. The actual fiscal third quarter ended on September 29, 2012. The third quarters of both 2012 and 2011 included 13 weeks and the first nine months of both 2012 and 2011 included 39 weeks.