Delaware
(State or Other Jurisdiction
of Incorporation)
|
1-13792
(Commission
File Number)
|
11-3262067
(IRS Employer
Identification No.)
|
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CRF 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 2.05. | Costs Associated with Exit or Disposal Activities. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit
Number
|
Description
|
|
99.1
|
Press Release of Systemax Inc., dated March 10, 2015, regarding financial results for the fourth quarter ended December 31, 2014.
|
SYSTEMAX INC.
|
|
By: /s/ Eric Lerner
|
|
Name: Eric Lerner
|
|
Title: Senior Vice President
|
99.1 | Press Release of Systemax Inc., dated March 10, 2015, regarding financial results for the fourth quarter ended December 31, 2014. |
Performance Summary
(U.S. dollars in millions, except per share data) |
||||
Highlights
|
Quarter Ended
December 31, |
Year Ended
December 31,
|
||
GAAP Results
|
2014
|
2013
|
2014
|
2013
|
Net sales
|
$912.9
|
$874.2
|
$3,442.8
|
$3,352.3
|
Gross profit
|
$124.5
|
$128.2
|
$493.2
|
$482.9
|
Gross margin
|
13.6%
|
14.7%
|
14.3%
|
14.4%
|
Operating income (loss)
|
$(16.5)
|
$(1.3)
|
$(25.9)
|
$(20.6)
|
Operating margin
|
(1.8)%
|
(0.1)%
|
(0.8)%
|
(0.6)%
|
Net income (loss)
|
$(25.5)
|
$(19.8)
|
$(37.5)
|
$(43.8)
|
Diluted net income (loss) per share
|
$(0.69)
|
$(0.54)
|
$(1.01)
|
$(1.18)
|
Non-GAAP Results*
|
||||
Adjusted operating income (loss)
|
$(1.4)
|
$5.9
|
$2.7
|
$5.9
|
Adjusted operating margin
|
(0.2)%
|
0.7%
|
0.1%
|
0.2%
|
· | Consolidated sales increased 4.4% to $912.9 million in U.S. dollars. On a constant currency basis and excluding the June 2014 acquisition of SCC Services BV in the Netherlands (renamed Misco Solutions), sales increased 3.2%. |
· | Business to business channel sales grew 7.0% to $652.5 million in U.S. dollars. On a constant currency basis and excluding Misco Solutions, sales increased 4.9%. |
· | Consumer channel sales declined 1.6% to $260.4 million in U.S. dollars. On a constant currency basis, sales declined 0.7%. |
· | Non-GAAP operating loss was $1.4 million compared to income of $5.9 million last year. GAAP operating loss was $16.5 million compared to a loss of $1.3 million last year. Excluding Misco Solutions, non-GAAP operating results would have been a loss of $0.6 million of income and GAAP operating loss would have been $15.7 million. |
· | Non-GAAP diluted net loss per share was $(0.04). GAAP diluted net loss per share was $(0.69). |
· | Consolidated sales increased 2.7% to $3.4 billion in U.S. dollars. On a constant currency basis and excluding Misco Solutions, sales increased 0.6%. |
· | Business to business channel sales grew 8.9% to $2.6 billion in U.S. dollars. On a constant currency basis and excluding Misco Solutions, sales increased 5.6%. |
· | Consumer channel sales declined 11.7% to $0.9 billion in U.S. dollars. On a constant currency basis, sales declined 11.0%. |
· | Non-GAAP operating income was $2.7 million compared to $5.9 million last year. GAAP operating loss was $25.9 million compared to a loss of $20.6 million last year. Excluding Misco Solutions, non-GAAP operating income would have been $1.1 million and GAAP operating loss would have been $24.3 million. |
· | Non-GAAP diluted net loss per share was $(0.07). GAAP diluted net loss per share was $(1.01). |
Supplemental Channel Sales Summary*
(in millions)
|
||||||||||
Channel
|
Quarter Ended December 31,
|
Year Ended December, 31
|
||||||||
2014
$
|
% of
Sales
|
Change
y/y %
|
2013
$
|
% of
Sales
|
2014
$
|
% of
Sales
|
Change
y/y %
|
2013
$
|
% of
Sales
|
|
Technology Products – EMEA
|
310.6
|
34.0
|
5.5
|
294.5
|
33.6
|
1,189.9
|
34.6
|
8.6
|
1,095.4
|
32.7
|
Technology Products – NA (B2B)
|
198.3
|
21.7
|
4.4
|
189.9
|
21.7
|
800.0
|
23.2
|
4.0
|
769.3
|
22.9
|
Industrial Products
|
142.1
|
15.6
|
14.7
|
123.9
|
14.2
|
556.0
|
16.1
|
17.3
|
473.8
|
14.1
|
Corporate and Other
|
1.5
|
0.2
|
15.4
|
1.3
|
0.2
|
5.9
|
0.2
|
13.5
|
5.2
|
0.2
|
Total B2B1
|
652.5
|
71.5
|
7.0
|
609.6
|
69.7
|
2,551.8
|
74.1
|
8.9
|
2,343.7
|
69.9
|
Technology Products – NA (Consumer)2
|
260.4
|
28.5
|
(1.6)
|
264.6
|
30.3
|
891.0
|
25.9
|
(11.7)
|
1,008.6
|
30.1
|
Consolidated Sales
|
912.9
|
100.0
|
4.4
|
874.2
|
100.0
|
3,442.8
|
100.0
|
2.7
|
3,352.3
|
100.0
|
1 | Includes all sales from the Industrial Products Group and EMEA Technology Group as well as sales from managed business relationships and our B2B e-commerce sites within our NA Technology Group. |
2 | Includes sales from retail stores (non-managed), consumer websites, inbound call centers and television shopping within our NA Technology Group. |
Supplemental Business Unit Sales Summary
(in millions)
|
||||||||||
Business Unit
|
Quarter Ended December 31,
|
Year Ended December 31,
|
||||||||
2014
$
|
% of
Sales
|
Change
y/y %
|
2013
$
|
% of
Sales
|
2014
$
|
% of
Sales
|
Change
y/y %
|
2013
$
|
% of
Sales
|
|
Technology Products
|
769.3
|
84.2
|
2.7
|
749.0
|
85.6
|
2,880.9
|
83.7
|
0.3
|
2,873.3
|
85.7
|
Industrial Products
|
142.1
|
15.6
|
14.7
|
123.9
|
14.2
|
556.0
|
16.1
|
17.3
|
473.8
|
14.1
|
Corporate and Other
|
1.5
|
0.2
|
15.4
|
1.3
|
0.2
|
5.9
|
0.2
|
13.5
|
5.2
|
0.2
|
Consolidated Sales
|
912.9
|
100.0
|
4.4
|
874.2
|
100.0
|
3,442.8
|
100.0
|
2.7
|
3,352.3
|
100.0
|
Supplemental Business Unit Operating Results Summary
(in millions)
|
||||||||
GAAP Operating Income (Loss)
|
||||||||
Business Unit
|
Quarter Ended December 31,
|
Year Ended December 31,
|
||||||
2014
$
|
Margin
%
|
2013
$
|
Margin
%
|
2014
$
|
Margin
%
|
2013
$
|
Margin
%
|
|
Technology Products
|
(21.8)
|
(2.8)
|
(7.4)
|
(1.0)
|
(51.3)
|
(1.8)
|
(40.6)
|
(1.4)
|
Industrial Products
|
8.3
|
5.8
|
9.6
|
7.7
|
41.0
|
7.4
|
40.0
|
8.4
|
Corporate and Other
|
(3.0)
|
NM
|
(3.5)
|
NM
|
(15.6)
|
NM
|
(20.0)
|
NM
|
Consolidated Operating Income (Loss)
|
(16.5)
|
(1.8)
|
(1.3)
|
(0.1)
|
(25.9)
|
(0.8)
|
(20.6)
|
(0.6)
|
Non-GAAP* Operating Income (Loss)
|
||||||||
Technology Products
|
(7.3)
|
(0.9)
|
(0.4)
|
0.0
|
(25.6)
|
(0.9)
|
(15.7)
|
(0.5)
|
Industrial Products
|
8.7
|
6.1
|
9.5
|
7.7
|
43.0
|
7.7
|
40.4
|
8.5
|
Corporate and Other
|
(2.8)
|
NM
|
(3.2)
|
NM
|
(14.7)
|
NM
|
(18.8)
|
NM
|
Consolidated Operating Income (Loss)
|
(1.4)
|
(0.2)
|
5.9
|
0.7
|
2.7
|
0.1
|
5.9
|
0.2
|
Quarter Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
Unaudited
|
||||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net sales
|
$
|
912.9
|
$
|
874.2
|
$
|
3,442.8
|
$
|
3,352.3
|
||||||||
Cost of sales
|
788.4
|
746.0
|
2,949.6
|
2,869.4
|
||||||||||||
Gross profit
|
124.5
|
128.2
|
493.2
|
482.9
|
||||||||||||
Gross margin
|
13.6
|
%
|
14.7
|
%
|
14.3
|
%
|
14.4
|
%
|
||||||||
Selling, general and administrative expenses
|
126.7
|
123.8
|
494.7
|
481.3
|
||||||||||||
Special charges
|
14.3
|
5.7
|
24.4
|
22.2
|
||||||||||||
Operating income (loss)
|
(16.5
|
)
|
(1.3
|
)
|
(25.9
|
)
|
(20.6
|
)
|
||||||||
Operating margin
|
(1.8
|
)%
|
(0.1
|
)%
|
(0.8
|
)%
|
(0.6
|
)%
|
||||||||
Interest and other expense, net
|
0.9
|
1.0
|
6.7
|
1.2
|
||||||||||||
Income (loss) before income taxes
|
(17.4
|
)
|
(2.3
|
)
|
(32.6
|
)
|
(21.8
|
)
|
||||||||
Provision for (benefit from) income taxes
|
8.1
|
17.5
|
4.9
|
22.0
|
||||||||||||
Net income (loss)
|
$
|
(25.5
|
)
|
$
|
(19.8
|
)
|
$
|
(37.5
|
)
|
$
|
(43.8
|
)
|
||||
Net margin
|
(2.8
|
)%
|
(2.3
|
)%
|
(1.1
|
)%
|
(1.3
|
)%
|
||||||||
Net income (loss) per common share:
|
||||||||||||||||
Basic
|
$
|
(0.69
|
)
|
$
|
(0.54
|
)
|
$
|
(1.01
|
)
|
$
|
(1.18
|
)
|
||||
Diluted
|
$
|
(0.69
|
)
|
$
|
(0.54
|
)
|
$
|
(1.01
|
)
|
$
|
(1.18
|
)
|
||||
Weighted average common and common equivalent shares:
|
||||||||||||||||
Basic
|
37.1
|
37.0
|
37.1
|
37.0
|
||||||||||||
Diluted
|
37.1
|
37.0
|
37.1
|
37.0
|
||||||||||||
December 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
165.0
|
$
|
181.4
|
||||
Accounts receivable, net
|
355.5
|
333.3
|
||||||
Inventories
|
289.9
|
321.8
|
||||||
Prepaid expenses and other current assets
|
17.6
|
19.7
|
||||||
Total current assets
|
828.0
|
856.2
|
||||||
Property, plant and equipment, net
|
41.2
|
59.4
|
||||||
Goodwill, intangibles and other assets
|
25.7
|
26.6
|
||||||
Total assets
|
$
|
894.9
|
$
|
942.2
|
||||
Current liabilities:
|
||||||||
Short-term debt
|
$
|
2.7
|
$
|
2.5
|
||||
Accounts payable and accrued expenses
|
513.2
|
507.9
|
||||||
Total current liabilities
|
515.9
|
510.4
|
||||||
Long-term debt
|
0.9
|
2.9
|
||||||
Other liabilities
|
18.5
|
22.7
|
||||||
Shareholders’ equity
|
359.6
|
406.2
|
||||||
Total liabilities and shareholders’ equity
|
$
|
894.9
|
$
|
942.2
|
Quarter Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Technology Products
|
$
|
(21.8
|
)
|
$
|
(7.4
|
)
|
$
|
(51.3
|
)
|
$
|
(40.6
|
)
|
||||
Industrial Products
|
8.3
|
9.6
|
41.0
|
40.0
|
||||||||||||
Corporate and Other
|
(3.0
|
)
|
(3.5
|
)
|
(15.6
|
)
|
(20.0
|
)
|
||||||||
GAAP operating income (loss)
|
(16.5
|
)
|
(1.3
|
)
|
(25.9
|
)
|
(20.6
|
)
|
||||||||
Non-GAAP adjustments:
|
||||||||||||||||
Technology Products:
|
||||||||||||||||
Severance and other reorganization related charges(1)
|
3.5
|
2.9
|
12.7
|
17.7
|
||||||||||||
Asset Impairment charges(2)
|
10.0
|
2.9
|
10.1
|
4.1
|
||||||||||||
Litigation costs(3)
|
0.8
|
0.1
|
1.5
|
0.6
|
||||||||||||
Stock based compensation
|
0.1
|
0.1
|
0.3
|
0.5
|
||||||||||||
Intangible asset amortization
|
0.1
|
1.0
|
1.1
|
2.0
|
||||||||||||
Total Non-GAAP Adjustments – Technology Products
|
14.5
|
7.0
|
25.7
|
24.9
|
||||||||||||
Industrial Products:
|
||||||||||||||||
New facility Start Up
|
0.0
|
(0.2
|
)
|
0.0
|
(0.2
|
)
|
||||||||||
Acquisition Transaction Costs(4)
|
0.4
|
0.0
|
0.4
|
0.0
|
||||||||||||
Stock based and other special compensation(5)
|
0.0
|
0.1
|
1.6
|
0.6
|
||||||||||||
Total Non-GAAP Adjustments – Industrial Products
|
0.4
|
(0.1
|
)
|
2.0
|
0.4
|
|||||||||||
Corporate and Other:
|
||||||||||||||||
Severance and Other Reorganization
|
0.0
|
0.0
|
0.1
|
0.0
|
||||||||||||
Stock based compensation
|
0.2
|
0.3
|
0.8
|
1.2
|
||||||||||||
Total Non-GAAP Adjustments – Corporate and Other
|
0.2
|
0.3
|
0.9
|
1.2
|
||||||||||||
Technology Products
|
(7.3
|
)
|
(0.4
|
)
|
(25.6
|
)
|
(15.7
|
)
|
||||||||
Industrial Products
|
8.7
|
9.5
|
43.0
|
40.4
|
||||||||||||
Corporate and Other
|
(2.8
|
)
|
(3.2
|
)
|
(14.7
|
)
|
(18.8
|
)
|
||||||||
Non-GAAP operating income (loss)
|
$
|
(1.4
|
)
|
$
|
5.9
|
$
|
2.7
|
$
|
5.9
|
|||||||
(1) | Fourth quarter 2014 includes $3.4M in costs associated with the restructuring of our European operations and the continued recruitment costs to staff our shared services center for our European Technology business. Fourth quarter 2013 charges included $0.8M in charges related to the exit of retail leases, $1.7M in costs related to the restructuring of our European operations, and other charges. |
(2) | Fourth quarter 2014 includes $10.0M in non-cash charges related to the impairment of long lived and intangible assets within our North American Technology business. Fourth quarter 2013 included approximately $2.9M in asset impairment charges primarily related to the disposition of our remaining CompUSA asset. |
(3) | Includes legal costs related to the investigations of and settlement with former officers and employees, net. |
(4) | Includes costs related to the acquisition of PEG Group from TAKKT America. |
(5) | Includes expense from stock options, restricted stock grants and special compensation arrangement for a business unit leader. |
Quarter Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
GAAP
|
||||||||||||||||
Net income (loss)
|
$
|
(25.5
|
)
|
$
|
(19.8
|
)
|
$
|
(37.5
|
)
|
$
|
(43.8
|
)
|
||||
Provision for (benefit from) income taxes
|
8.1
|
17.5
|
4.9
|
22.0
|
||||||||||||
Income (loss) before income taxes
|
(17.4
|
)
|
(2.3
|
)
|
(32.6
|
)
|
(21.8
|
)
|
||||||||
Interest and other(income) expense, net
|
0.9
|
1.0
|
6.7
|
1.2
|
||||||||||||
Operating income (loss)
|
(16.5
|
)
|
(1.3
|
)
|
(25.9
|
)
|
(20.6
|
)
|
||||||||
Non-GAAP
|
||||||||||||||||
Non-recurring adjustments
|
14.7
|
5.7
|
24.8
|
22.2
|
||||||||||||
Recurring adjustments
|
0.4
|
1.5
|
3.8
|
4.3
|
||||||||||||
Adjusted operating income (loss)
|
(1.4
|
)
|
5.9
|
2.7
|
5.9
|
|||||||||||
Interest and other (income) expense, net
|
0.9
|
1.0
|
6.7
|
1.2
|
||||||||||||
Income (loss) before income taxes
|
(2.3
|
)
|
4.9
|
(4.0
|
)
|
4.7
|
||||||||||
Normalized provision for (benefit from) income taxes
|
(0.8
|
)
|
1.7
|
(1.4
|
)
|
1.6
|
||||||||||
Normalized effective tax rate(1)
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||||||
Non-GAAP net income (loss)
|
$
|
(1.5
|
)
|
$
|
3.2
|
$
|
(2.6
|
)
|
$
|
3.1
|
||||||
GAAP diluted net income (loss) per share
|
$
|
(0.69
|
)
|
$
|
(0.54
|
)
|
$
|
(1.01
|
)
|
$
|
(1.18
|
)
|
||||
Non-GAAP diluted net income (loss) per share
|
$
|
(0.04
|
)
|
$
|
0.09
|
$
|
(0.07
|
)
|
$
|
0.08
|
(1) | Effective tax rate of 35% used in all periods. |
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