☒ | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
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11-3262067
|
|
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $ .01 per share
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New York Stock Exchange
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Large Accelerated Filer ☐
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Accelerated Filer ☒
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|
Non-Accelerated Filer ☐
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Smaller reporting company ☐
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Part I
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||
Item 1.
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4
|
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4
|
||
5
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||
5
|
||
6
|
||
6
|
||
7
|
||
7
|
||
8
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||
8
|
||
8
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||
Item 1A.
|
9
|
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Item 1B.
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17
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Item 2.
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18
|
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Item 3.
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18
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Item 4.
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19
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Part II
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||
Item 5.
|
20
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Item 6.
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21
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Item 7.
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21
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Item 7A.
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37
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Item 8.
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37
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Item 9.
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37
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Item 9A.
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37
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Item 9B.
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38
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Part III
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||
Item 10.
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39
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Item 11.
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39
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Item 12.
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39
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Item 13.
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39
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Item 14.
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39
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Part IV
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||
Item 15.
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39
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43
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·
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risks involved with e-commerce, including possible loss of business and customer dissatisfaction if outages or other computer-related problems should preclude customer access to our products and services
|
·
|
our ability to timely and efficiently exit the retail store consumer electronics business and to invest in and expand our North American Technology Products B2B electronics business
|
·
|
our ability to timely and efficiently integrate acquired businesses, such as our recent acquisitions of SCC/Misco Solutions in the Netherlands and of Plant Equipment Group in the US
|
·
|
the Company’s management information systems and other technology platforms supporting our sales, procurement and other operations are critical to our operations and disruptions or delays, particularly as we continue to transition certain functions from our existing platforms to a new platform specifically developed for our needs, have occurred and could occur in the future, and if not timely addressed would have a material adverse effect on us
|
·
|
general economic conditions, such as decreased consumer confidence and spending and reductions in manufacturing capacity have contributed to our recent failure to achieve our historical sales growth rates and profit levels and could continue to impact our business
|
·
|
technological change, such as the integration of formerly separate products (for instance, cameras and GPS devices into cellular phones) and the effect of increased tablet sales on sales of PCs and laptop computers, have had and can continue to have a material effect on our product mix and results of operations
|
·
|
the markets for our products and services are extremely competitive and if we are unable to successfully respond to our competitors’ strategies our sales and gross margins will be adversely affected
|
·
|
our ecommerce operations must compete with large, expanding ecommerce retailers
|
·
|
sales tax laws or government enforcement priorities may be changed which could result in ecommerce and direct mail retailers having to collect sales taxes in states where the current laws and interpretations do not require us to do so
|
·
|
our substantial international operations are subject to risks such as fluctuations in currency rates, foreign regulatory requirements, political uncertainty and the management of our expanding international operations infrastructure, including our ability to timely and effectively continue to transition certain support operations to our shared services center in Hungary and effectively implement distribution logistics initiatives in Europe
|
·
|
managing various inventory risks, such as being unable to profitably resell excess or obsolete inventory and/or the loss of product return rights and price protection from our vendors
|
·
|
meeting credit card industry compliance standards in order to maintain our ability to accept credit cards
|
·
|
significant changes in the computer products retail industry, especially relating to the distribution and sale of such products
|
·
|
timely availability of existing and new products
|
·
|
risks associated with delivery of merchandise to customers by utilizing common delivery services
|
·
|
borrowing costs or availability, including our ability to renew credit facilities
|
·
|
pending or threatened litigation and investigations
|
·
|
the availability of key personnel
|
·
|
the continuation of key vendor relationships
|
·
|
the ability to maintain satisfactory credit arrangements
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North America
|
Europe
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http://biz.tigerdirect.com
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www.misco.co.uk
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www.tigerdirect.com
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www.misco.de
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www.tigerdirect.ca
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www.misco.fr
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www.tigerdirect.pr
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www.misco.nl
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www.infotelusa.com
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www.misco.it
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www.globalcomputer.com
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www.misco.es
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www.globalgoved.com
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www.misco.se
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www.globalindustrial.com
|
www.misco.at
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www.globalindustrial.ca
|
www.misco.ch
|
www.globalindustrial.mx
|
www.misco.be
|
www.nexelwire.com
|
www.misco.ie
|
www.inmac-wstore.com
|
|
www.miscosolutions.nl
|
|
North
America |
Europe and Asia
|
Total
|
|||||||||
2014
|
||||||||||||
Net sales
|
$
|
2,252.9
|
$
|
1,189.9
|
$
|
3,442.8
|
||||||
Operating (loss)
|
$
|
(2.8
|
)
|
$
|
(23.1
|
)
|
$
|
(25.9
|
)
|
|||
Identifiable assets
|
$
|
580.0
|
$
|
314.9
|
$
|
894.9
|
||||||
|
||||||||||||
2013
|
||||||||||||
Net sales
|
$
|
2,256.9
|
$
|
1,095.4
|
$
|
3,352.3
|
||||||
Operating (loss)
|
$
|
(14.9
|
)
|
$
|
(5.7
|
)
|
$
|
(20.6
|
)
|
|||
Identifiable assets
|
$
|
610.2
|
$
|
332.0
|
$
|
942.2
|
||||||
|
||||||||||||
2012
|
||||||||||||
Net sales
|
$
|
2,417.6
|
$
|
1,126.7
|
$
|
3,544.3
|
||||||
Operating (loss)
|
$
|
(63.6
|
)
|
$
|
23.7
|
$
|
(39.9
|
)
|
||||
Identifiable assets
|
$
|
642.9
|
$
|
319.4
|
$
|
962.3
|
·
|
Corporate Ethics Policy for officers, directors and employees
|
·
|
Charter for the Audit Committee of the Board of Directors
|
·
|
Charter for the Compensation Committee of the Board of Directors
|
·
|
Charter for the Nominating/Corporate Governance Committee of the Board of Directors
|
·
|
Corporate Governance Guidelines and Principles
|
·
|
General economic conditions, such as decreased consumer confidence and spending and reductions in manufacturing capacity have and could continue to result in our failure to achieve our historical sales growth rates and profit levels.
|
·
|
The markets for our products and services are extremely competitive and if we are unable to successfully respond to our competitors’ strategies our sales and gross margins will be adversely affected.
|
·
|
Sales tax laws may be changed or interpreted differently which could result in ecommerce and direct mail retailers having to collect sales taxes in states where the current laws do not require us to do so. This could reduce demand for our products in such states and could result in us having substantial tax liabilities for past sales.
|
·
|
Events such as acts of war or terrorism, natural disasters, changes in law, or large losses could adversely affect our insurance coverage and insurance expense, resulting in an adverse affect on our profitability and financial condition.
|
·
|
We rely to a great extent on our information and telecommunications systems, and significant system failures or outages, or our failure to properly evaluate, upgrade or replace our systems, or the failure of our security/safety measures to protect our systems and websites, could have an adverse affect on our results of operations.
|
·
|
We are accelerating our focus on our B2B technology business and exiting the retail store consumer electronics business; the success of our North America Technology Products segment is dependent on our ability to grow our B2B business.
|
·
|
We have recently completed two acquisitions; our operations will be impacted by our ability to timely and efficiently transition and integrate those acquisitions with the rest of our business in the US and EMEA.
|
·
|
The establishment and integration of our shared service center in Hungary exposes us to various technology, regulatory and economic risks.
|
·
|
We rely on third party suppliers for most of our products and services. The loss or interruption of these relationships could impact our sales volumes, the levels of inventory we must carry, and/or result in sales delays and/or higher inventory costs from new suppliers. Co-operative advertising and other sales incentives provided by our suppliers have decreased and could decrease further in the future thereby increasing our expenses and adversely affecting our results of operations and cash flows.
|
·
|
Goodwill and intangible assets may become impaired resulting in a charge to earnings.
|
·
|
Our substantial international operations are subject to risks such as fluctuations in currency rates (which can adversely impact foreign revenues and profits when translated to US Dollars), foreign regulatory requirements, political uncertainty and the management of our growing international operations.
|
·
|
Changes in a country’s economic or political conditions
|
·
|
Changes in foreign currency exchange rates
|
·
|
Difficulties with staffing and managing international operations
|
·
|
Unexpected changes in regulatory requirements
|
·
|
Changes in transportation and shipping costs
|
·
|
Enforcement of intellectual property rights
|
·
|
We are exposed to various inventory risks, such as being unable to profitably resell excess or obsolete inventory and/or the loss of product return rights and price protection from our vendors; such events could lower our gross margins or result in inventory write-downs that would reduce reported future earnings.
|
·
|
We depend on bank credit facilities to address our working capital and cash flow needs from time to time, and if we are unable to renew or replace these facilities, or borrowing capacity were to be reduced our liquidity and capital resources may be adversely affected.
|
·
|
If we fail to observe certain restrictions and covenants under our credit facilities the lenders could refuse to waive such default, terminate the credit facility and demand immediate repayment, which would adversely affect our cash position and materially adversely affect our operations.
|
·
|
incur additional debt
|
·
|
create or permit liens on assets
|
·
|
make capital expenditures or investments
|
·
|
pay dividends
|
·
|
Our European employees are represented by unions or workers’ councils or are employed subject to local laws that are less favorable to employers than the laws of the U.S.
|
·
|
We will operate three remaining retail stores in North America and Puerto Rico, and will continue to operate our online consumer electronics business; we must effectively manage our cost structure, such as inventory needs, point of sales systems and personnel as we accelerate our B2B business and seek to convert retail store customers to our online websites.
|
·
|
The failure to timely and satisfactorily process manufacturers’ and our own rebate programs could negatively impact our customer satisfaction levels.
|
·
|
We may be unable to reduce prices in reaction to competitive pressures, or implement cost reductions or new product line expansion to address gross profit and operating margin pressures; failure to mitigate these pressures could adversely affect our operating results and financial condition.
|
·
|
We would be exposed to liability, including substantial fines and penalties and, in extreme cases, loss of our ability to accept credit cards, in the event our privacy and data security policies and procedures are inadequate to prevent security breaches of our consumer personal information and credit card information records.
|
·
|
Failure to protect the integrity, security and use of our customers’ information could expose us to litigation and materially damage our standing with our customers.
|
·
|
Sales to individual customers expose us to credit card fraud, which impacts our operations. If we fail to adequately protect ourselves from credit card fraud, our operations could be adversely impacted.
|
·
|
Our business is dependent on certain key personnel.
|
·
|
We are subject to litigation risk due to the nature of our business, which may have a material adverse effect on our results of operations and business.
|
·
|
Our profitability can be adversely affected by changes in our income tax exposure due to changes in tax rates or laws, changes in our effective tax rate due to changes in the mix of earnings among different countries, restrictions on utilization of tax benefits and changes in valuation of our deferred tax assets and liabilities.
|
·
|
Changes in accounting standards or practices, as well as new accounting pronouncements or interpretations, may require us to account for and report our financial results in a different manner in the future, which may be less favorable than the manner used historically.
|
·
|
Concentration of Ownership and Control Limits Stockholders Ability to Influence Corporate Actions
|
·
|
Risk of Thin Trading and Volatility of our Common Stock Could Impact Stockholder Value
|
Location
|
Stores Open – 12/31/13
|
Store Openings/
(Store Closings)
|
Stores Open – 12/31/14
|
||||
Delaware
|
1
|
-
|
1
|
||||
Florida
|
17
|
(2)
|
15
|
||||
Georgia
|
1
|
-
|
1
|
||||
Illinois
|
4
|
-
|
4
|
||||
North Carolina
|
1
|
-
|
1
|
||||
Puerto Rico
|
2
|
-
|
2
|
||||
Texas
|
4
|
-
|
4
|
||||
Ontario, Canada
|
6
|
-
|
6
|
||||
36
|
(2)
|
34
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
High
|
Low
|
|||||||
2014
|
||||||||
First Quarter
|
$ |
15.28
|
$ |
10.86
|
||||
Second Quarter
|
18.25
|
14.12
|
||||||
Third Quarter
|
16.41
|
12.30
|
||||||
Fourth Quarter
|
16.21
|
12.28
|
||||||
2013
|
||||||||
First Quarter
|
$ |
11.20
|
$ |
9.38
|
||||
Second Quarter
|
9.97
|
8.50
|
||||||
Third Quarter
|
9.87
|
9.04
|
||||||
Fourth Quarter
|
11.66
|
9.12
|
Years Ended December 31,
|
||||||||||||||||||||
(In millions, except per share data)
|
||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
Statement of Operations Data:
|
||||||||||||||||||||
Net sales
|
$
|
3,442.8
|
$
|
3,352.3
|
$
|
3,544.3
|
$
|
3,680.6
|
$
|
3,589.0
|
||||||||||
Gross profit
|
$
|
493.2
|
$
|
482.9
|
$
|
485.8
|
$
|
527.6
|
$
|
488.0
|
||||||||||
Operating income (loss) from continuing operations
|
$
|
(25.9
|
)
|
$
|
(20.6
|
)
|
$
|
(39.9
|
)
|
$
|
80.8
|
$
|
68.8
|
|||||||
Net income (loss) from continuing operations
|
$
|
(37.5
|
)
|
$
|
(43.8
|
)
|
$
|
(8.0
|
)
|
$
|
54.6
|
$
|
42.6
|
|||||||
Per Share Amounts:
|
||||||||||||||||||||
Net income (loss) — diluted
|
$
|
(1.01
|
)
|
$
|
(1.18
|
)
|
$
|
(0.22
|
)
|
$
|
1.47
|
$
|
1.13
|
|||||||
Weighted average common shares — diluted
|
37.1
|
37.0
|
36.9
|
37.1
|
37.6
|
|||||||||||||||
Cash dividends declared per common share
|
$
|
-
|
$
|
-
|
$
|
0.25
|
$
|
-
|
$
|
-
|
||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Working capital
|
$
|
312.1
|
$
|
345.8
|
$
|
360.8
|
$
|
354.8
|
$
|
300.9
|
||||||||||
Total assets
|
$
|
894.9
|
$
|
942.2
|
$
|
962.3
|
$
|
889.7
|
$
|
894.1
|
||||||||||
Long-term debt, excluding current portion
|
$
|
0.9
|
$
|
2.9
|
$
|
5.4
|
$
|
7.1
|
$
|
7.4
|
||||||||||
Shareholders’ equity
|
$
|
359.6
|
$
|
406.2
|
$
|
446.3
|
$
|
454.3
|
$
|
409.3
|
Accounting policy
|
Assumptions and uncertainties
|
Quantification and analysis of effect on actual results if estimates differ materially
|
||
Revenue Recognition. We recognize product sales when persuasive evidence of an order arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. Generally, these criteria are met at the time of receipt by customers when title and risk of loss both are transferred, except in our Industrial Products segment where title and risk pass at time of shipment. Sales are presented net of returns and allowances, rebates and sales incentives. Reserves for estimated returns and allowances are provided when sales are recorded, based on historical experience and current trends.
|
Our revenue recognition policy contains assumptions and judgments made by management related to the timing and amounts of future sales returns. Sales returns are estimated based upon historical experience and current known trends.
|
We have not made any material changes to our sales return reserve policy in the past three years and we do not anticipate making any material changes to this policy in the future. However if our estimates are materially different than our actual experience we could have a material gain or loss adjustment.
|
||
Allowance for Doubtful Accounts Receivable. We record an allowance for doubtful accounts to reflect our estimate of the collectibility of our trade accounts receivable. While bad debt allowances have been within expectations and the provisions established, there can be no guarantee that we will continue to experience the same allowance rate we have in the past.
|
Our allowance for doubtful accounts policy contains assumptions and judgments made by management related to collectibility of aged accounts receivable and chargebacks from credit card sales. We evaluate the collectibility of accounts receivable based on a combination of factors, including an analysis of the age of customer accounts and our historical experience with accounts receivable write-offs. The analysis also includes the financial condition of a specific customer or industry, and general economic conditions. In circumstances where we are aware of customer credit card charge-backs or a specific customer’s inability to meet its financial obligations, a specific reserve for bad debts applicable to amounts due to reduce the net recognized receivable to the amount management reasonably believes will be collected is recorded. In those situations with ongoing discussions, the amount of bad debt recognized is based on the status of the discussions.
|
We have not made any material changes to our allowance for doubtful accounts receivable reserve policy in the past three years and we do not anticipate making any material changes to this policy in the future. However if our estimates are materially different than our actual experience we could have a material gain or loss adjustment.
A change of 10% in our allowance for doubtful accounts reserve at December 31, 2014 would impact net income by approximately $0.6 million.
|
Inventory valuation. We value our inventories at the lower of cost or market, cost being determined on the first-in, first-out method except in certain locations in Europe and retail locations where an average cost is used. Excess and obsolete or unmarketable merchandise are written down based on historical experience, assumptions about future product demand and market conditions. If market conditions are less favorable than projected or if technological developments result in accelerated obsolescence, additional write-downs may be required. While obsolescence and resultant markdowns have been within expectations, there can be no guarantee that we will continue to experience the same level of markdowns we have in the past.
|
Our inventory reserve policy contains assumptions and judgments made by management related to inventory aging, obsolescence, credits that we may obtain for returned merchandise, shrink and consumer demand.
|
We have not made any material changes to our inventory reserve policy in the past three years and we do not anticipate making any material changes to this policy in the future. However if our estimates are materially different than our actual experience we could have a material loss adjustment.
A change of 10% in our inventory reserves at December 31, 2014 would impact net income by approximately $0.8 million.
|
||
Goodwill and Intangible Assets. We apply the provisions of relevant accounting guidance in our valuation of goodwill, trademarks, domain names, client lists and other intangible assets. Relevant accounting guidance requires that goodwill and indefinite lived intangibles be reviewed at least annually for impairment or more frequently if indicators of impairment exist. The amount of an impairment loss would be recognized as the excess of the asset’s carrying value over its fair value.
|
Our impairment testing involves judgments and uncertainties, quantitative and qualitative, related to the use of discounted cash flow models and forecasts of future results, both of which involve significant judgment and may not be reliable. Significant management judgment is necessary to evaluate the operating environment and economic conditions that exist to develop a forecast for a reporting unit. Assumptions related to the discounted cash flow models we use include the inputs used to determine the Company’s weighted average cost of capital including a market risk premium, the beta of a reporting unit, reporting unit specific risk premiums and terminal growth values. Critical assumptions related to the forecast inputs used in our discounted cash flow models include projected sales growth, same store sales growth, gross margin percentages, new business opportunities, working capital requirements, capital expenditures and growth in selling, general and administrative expense. We also use our Company's market capitalization and comparable company market data to validate our reporting unit valuations.
|
We have not made any material changes to our goodwill policy in the past three years and we do not anticipate making any material changes to this policy in the future.
We recorded goodwill and intangible assets related to the June 2014 SCC acquisition of approximately $2.7 million and in the fourth quarter of 2014, we recorded intangible asset impairment charges related to our retail operations in the United States and Canada (see below). We have approximately $7.4 million in goodwill and intangible assets at December 31, 2014. We do not believe it is reasonably likely that the estimates or assumptions used to determine whether any of our remaining goodwill or intangible assets are impaired will change materially in the future. However if the inputs used in our discounted cash flow models or our forecasts are materially different than actual experience we could incur impairment charges that are material.
As a result of negative cash flows in its operations in the United States and Canada and a forecast for continued cash use, the Company conducted an evaluation of the intangible assets of its Technology Products segment in North America and concluded that intangible assets were impaired and recorded an impairment charge of $0.5 million, pre-tax, in the fourth quarter of 2014.
In 2013 we sold CompUSA intellectual property assets and accordingly the Company discontinued using the CompUSA brand in Puerto Rico and rebranded its operations there as TigerDirect. The Company wrote off the remaining carrying value of approximately $2.9 million, pre-tax, related to the intangible assets of the CompUSA brand in Puerto Rico.
|
Long-lived Assets. Management exercises judgment in evaluating our long-lived assets for impairment and in their depreciation and amortization methods and lives including evaluating undiscounted cash flows.
|
The impairment analysis for long lived assets requires management to make judgments about useful lives and to estimate fair values of long lived assets. It may also require us to estimate future cash flows of related assets using discounted cash flow model. Our estimates of future cash flows involve assumptions concerning future operating performance and economic conditions. While we believe that our estimates of future cash flows are reasonable, different assumptions regarding such cash flows could materially affect our evaluations.
|
We have not made any material changes to our long lived assets policy in the past three years and we do not anticipate making any material changes to this policy in the future.
In 2014 the Company conducted an evaluation of the long-lived assets in its North America Technology Products segment and concluded that an impairment charge of $9.5 million, pre-tax, be recorded.
We do not believe it is reasonably likely that the estimates and assumptions used to determine long lived asset impairment will vary materially in the future. However if our estimates are materially different than our actual experience we could have a material gain or loss adjustment.
A change of 10% in the carrying value of our long lived assets would impact net income by approximately $4.1 million.
|
||
Vendor Accruals. Our contractual agreements with certain suppliers provide us with funding or allowances for costs such as price protection, markdowns and advertising as well as funds or allowances for purchasing volumes.
Generally, allowances received as a reimbursement of identifiable costs are recorded as an expense reduction when the cost is incurred. Sales related allowances are generally determined by our level of purchases of product and are deferred and recorded as a reduction of inventory carrying value and are ultimately included as a reduction of cost of goods when inventory is sold.
|
Management makes assumptions and exercises judgment in estimating period end funding and allowances earned under our various agreements. Estimates are developed based on the terms of our vendor agreements and using existing expenditures for which funding is available, determining products whose market price would indicate coverage for markdown or price protection is available and estimating the level of our performance under agreements that provide funds or allowances for purchasing volumes. Estimates of funding or allowances for purchasing volume will include projections of annual purchases which are developed using current actual purchase data and historical purchase trends. Accruals in interim periods could be materially different if actual purchase volumes differ from projections.
|
We have not made any material changes to our vendor accrual policy in the past three years nor do we anticipate making any material changes to this policy in the future.
If actual results are different from the projections used we could have a material gain or loss adjustment. A change of 10% in our vendor accruals at December 31, 2014 would impact net income by approximately $1.4 million. |
Income Taxes. We are subject to taxation from federal, state and foreign jurisdictions and the determination of our tax provision is complex and requires significant management judgment.
We conduct operations in numerous U.S. states and foreign locations. Our effective tax rate depends upon the geographic distribution of our pre-tax income or losses among locations with varying tax rates and rules. As the geographic mix of our pre-tax results among various tax jurisdictions changes, the effective tax rate may vary from period to period. We are also subject to periodic examination from domestic and foreign tax authorities regarding the amount of taxes due. These examinations include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. We establish as needed, and periodically reevaluate, an estimated income tax reserve on our consolidated balance sheet to provide for the possibility of adverse outcomes in income tax proceedings. While management believes that we have identified all reasonably identifiable exposures and whether or not a reserve is appropriate, it is possible that additional exposures exist and/or that exposures may be settled at amounts different than the amounts reserved.
|
The determination of deferred tax assets and liabilities and any valuation allowances that might be necessary requires management to make significant judgments concerning the ability to realize net deferred tax assets. The realization of net deferred tax assets is dependent upon the generation of future taxable income. In estimating future taxable income there are judgments and uncertainties related to the development of forecasts of future results that may not be reliable. Significant management judgment is also necessary to evaluate the operating environment and economic conditions that exist to develop a forecast for a reporting unit. Where management has determined that it is more likely than not that some portion or the entire deferred tax asset will not be realized, we have provided a valuation allowance. If the realization of those deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net income in the period such determination is made.
|
We have not made any material changes to our income tax policy in the past three years and we do not anticipate making any material changes to this policy in the future.
We do not believe it is reasonably likely that the estimates or assumptions used to determine our deferred tax assets and liabilities and related valuation allowances will change materially in the future. However if our estimates are materially different than our actual experience we could have a material gain or loss adjustment.
During the fourth quarter of 2014 the Company recorded a non-cash valuation allowance against its deferred assets in the U.K. of approximately $1.7 million.
A change of 5% in our effective tax rate at December 31, 2014, excluding the non-cash valuation allowance, would impact net income by approximately $0.2 million.
|
||
Special charges. We have recorded reorganization, restructuring and other charges in the past and could in the future commence further reorganization, restructuring and other activities which result in recognition in charges to income.
|
The recording of reorganization, restructuring and other charges may involve assumptions and judgments about future costs and timing for amounts related to personnel terminations, stay bonuses, lease termination costs, lease sublet revenues, outplacement services, contract termination costs, asset impairments and other exit costs. Management may estimate these costs using existing contractual and other data or may rely on third party expert data.
|
When we incur a liability related to these actions, we estimate and record all appropriate expenses. We do not believe it is reasonably likely that the estimates or assumptions used to determine our reorganization, restructuring and other charges will change materially in the future. However if our estimates are materially different than our actual experience we could have a material gain or loss adjustment.
For the year ended December 31, 2014 the Company recorded special charges of $24.4 million for reorganization, restructuring and asset impairment and other charges.
|
·
|
Consolidated sales increased 2.7% to $3.4 billion; on a constant currency basis and excluding SCC Services, sales increased 0.6%.
|
·
|
B2B channel sales increased 8.9% to $2.6 billion; on a constant currency basis and excluding SCC Services, sales increased 5.6%.
|
·
|
B2C channel sales declined 11.7% to $0.9 billion; on a constant currency basis, sales declined 11.0%.
|
·
|
Movements in exchange rates positively impacted European sales by approximately $24.0 million and negatively impacted Canadian sales by approximately $13.8 million.
|
·
|
$11.7 million in estimated workforce reductions related to the restructuring of our European operations were recorded.
|
·
|
Impairment charges related to long-lived and other intangible assets of $10.0 million, pre-tax, were incurred.
|
Years Ended December 31,
|
||||||||||||||||||||||||
2014
|
2013
|
%
Change
|
2013
|
2012
|
%
Change
|
|||||||||||||||||||
Net sales by segment:
|
||||||||||||||||||||||||
Technology Products
|
$
|
2,880.9
|
$
|
2,873.3
|
0.3
|
%
|
$
|
2,873.3
|
$
|
3,137.6
|
(8.4
|
)%
|
||||||||||||
Industrial Products
|
556.0
|
473.8
|
17.3
|
%
|
473.8
|
401.9
|
17.9
|
%
|
||||||||||||||||
Corporate and other
|
5.9
|
5.2
|
13.5
|
%
|
5.2
|
4.8
|
8.3
|
%
|
||||||||||||||||
Consolidated net sales
|
$
|
3,442.8
|
$
|
3,352.3
|
2.7
|
%
|
$
|
3,352.3
|
$
|
3,544.3
|
(5.4
|
)%
|
||||||||||||
Net sales by channel:
|
||||||||||||||||||||||||
Technology Products - EMEA
|
$
|
1,189.9
|
$
|
1,095.4
|
8.6
|
%
|
$
|
1,095.4
|
$
|
1,126.7
|
(2.8
|
)%
|
||||||||||||
Technology Products – NA (B2B)
|
800.0
|
769.3
|
4.0
|
%
|
769.3
|
797.3
|
(3.5
|
)%
|
||||||||||||||||
Industrial Products
|
556.0
|
473.8
|
17.3
|
%
|
473.8
|
401.9
|
17.9
|
%
|
||||||||||||||||
Corporate and other
|
5.9
|
5.2
|
13.5
|
%
|
5.2
|
4.8
|
8.3
|
%
|
||||||||||||||||
Total B2B
|
$
|
2,551.8
|
$
|
2,343.7
|
8.9
|
%
|
$
|
2,343.7
|
$
|
2,330.7
|
0.6
|
%
|
||||||||||||
Technology Products – NA (Consumer)
|
891.0
|
1,008.6
|
(11.7
|
)%
|
1,008.6
|
1,213.6
|
(16.9
|
)%
|
||||||||||||||||
Consolidated net sales
|
$
|
3,442.8
|
$
|
3,352.3
|
2.7
|
%
|
$
|
3,352.3
|
$
|
3,544.3
|
(5.4
|
)%
|
||||||||||||
Consolidated gross margin
|
14.3
|
% |
14.4
|
%
|
(0.1
|
)%
|
14.4
|
%
|
13.7
|
%
|
0.7
|
%
|
||||||||||||
Consolidated SG&A costs**
|
$
|
519.1
|
$
|
503.5
|
3.1
|
%
|
$
|
503.5
|
$
|
525.7
|
(4.2
|
)%
|
||||||||||||
Consolidated SG&A costs** as % of sales
|
15.1
|
%
|
15.0
|
%
|
0.1
|
%
|
15.0
|
%
|
14.8
|
%
|
0.2
|
%
|
||||||||||||
Operating (loss) from continuing operations by segment:**
|
||||||||||||||||||||||||
Technology Products
|
$
|
(51.3
|
)
|
$
|
(40.6
|
)
|
26.4
|
%
|
$
|
(40.6
|
)
|
$
|
(46.9
|
)
|
(13.4
|
)%
|
||||||||
Industrial Products
|
41.0
|
40.0
|
2.5
|
%
|
40.0
|
29.9
|
33.8
|
%
|
||||||||||||||||
Corporate and other
|
(15.6
|
)
|
(20.0
|
)
|
(22.0
|
)%
|
(20.0
|
)
|
(22.9
|
)
|
(12.7
|
)%
|
||||||||||||
Consolidated operating (loss)
|
$
|
(25.9
|
)
|
$
|
(20.6
|
)
|
(25.7
|
)%
|
$
|
(20.6
|
)
|
$
|
(39.9
|
)
|
(48.4
|
)%
|
||||||||
Operating margin from continuing operations by segment:**
|
||||||||||||||||||||||||
Technology Products
|
(1.8
|
)%
|
(1.4
|
)%
|
(0.4
|
)%
|
(1.4
|
)%
|
(1.5
|
)%
|
0.1
|
%
|
||||||||||||
Industrial Products
|
7.4
|
%
|
8.4
|
%
|
(1.0
|
)%
|
8.4
|
%
|
7.4
|
%
|
1.0
|
%
|
||||||||||||
Consolidated operating margin from continuing operations
|
(0.8
|
)%
|
(0.6
|
)%
|
(0.2
|
)%
|
(0.6
|
)%
|
(1.1
|
)%
|
0.5
|
%
|
||||||||||||
Effective income tax rate
|
15.0
|
%
|
100.9
|
%
|
(85.9
|
)%
|
100.9
|
%
|
80.8
|
%
|
20.1
|
%
|
||||||||||||
Net (loss) from continuing operations
|
$
|
(37.5
|
)
|
$
|
(43.8
|
)
|
(14.4
|
)%
|
$
|
(43.8
|
)
|
$
|
(8.0
|
)
|
447.5
|
%
|
||||||||
Net margin from continuing operations
|
(1.1
|
)%
|
(1.3
|
)%
|
0.2
|
%
|
(1.3
|
)%
|
(0.2
|
)%
|
(1.1
|
)%
|
Quarter Ended
|
||||||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||||||
2014
|
||||||||||||||||
Net sales
|
$
|
873.4
|
$
|
831.1
|
$
|
825.4
|
$
|
912.9
|
||||||||
Percentage of year’s net sales
|
25.4
|
%
|
24.1
|
%
|
24.0
|
%
|
26.5
|
%
|
||||||||
2013
|
||||||||||||||||
Net sales
|
$
|
880.6
|
$
|
805.7
|
$
|
791.8
|
$
|
874.2
|
||||||||
Percentage of year’s net sales
|
26.3
|
%
|
24.0
|
%
|
23.6
|
%
|
26.1
|
%
|
||||||||
2012
|
||||||||||||||||
Net sales
|
$
|
913.1
|
$
|
849.1
|
$
|
847.0
|
$
|
935.1
|
||||||||
Percentage of year’s net sales
|
25.8
|
%
|
24.0
|
%
|
23.9
|
%
|
26.3
|
%
|
December 31,
|
||||||||||||
2014
|
2013
|
$ Change
|
||||||||||
Cash
|
$
|
165.0
|
$
|
181.4
|
$
|
(16.4
|
)
|
|||||
Accounts receivable, net
|
$
|
355.5
|
$
|
333.3
|
$
|
22.2
|
||||||
Inventories
|
$
|
289.9
|
$
|
321.8
|
$
|
(31.9
|
)
|
|||||
Assets available for sale
|
$
|
-
|
$
|
1.1
|
$
|
(1.1
|
)
|
|||||
Prepaid expenses and other current assets
|
$
|
15.9
|
$
|
16.4
|
$
|
(0.5
|
)
|
|||||
Accounts payable
|
$
|
420.2
|
$
|
418.8
|
$
|
1.4
|
||||||
Accrued expenses and other current liabilities
|
$
|
93.0
|
$
|
89.2
|
$
|
3.8
|
||||||
Current portion of long term debt
|
$
|
2.7
|
$
|
2.5
|
$
|
0.2
|
||||||
Working capital
|
$
|
312.1
|
$
|
345.8
|
$
|
(33.7
|
)
|
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
More than
5 years
|
||||||||||||||||
Contractual Obligations:
|
||||||||||||||||||||
Capital lease obligations
|
$
|
3.7
|
2.8
|
0.9
|
-
|
-
|
||||||||||||||
Non-cancelable operating leases, net of subleases
|
204.0
|
27.8
|
72.4
|
45.2
|
58.6
|
|||||||||||||||
Purchase & other obligations
|
66.3
|
49.9
|
8.2
|
8.2
|
-
|
|||||||||||||||
Total contractual obligations
|
$
|
274.0
|
80.5
|
81.5
|
53.4
|
58.6
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
(a)
|
1.
|
Consolidated Financial Statements of Systemax Inc.
|
Reference
|
Reports of Ernst & Young LLP Independent Registered Public Accounting Firm
|
44
|
||
Consolidated Balance Sheets as of December 31, 2014 and 2013
|
46
|
||
Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012
|
47
|
||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012
|
48
|
||
Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012
|
49
|
||
Consolidated Statements of Shareholders’ Equity for the Years ended December 31, 2014, 2013 and 2012
|
50
|
||
Notes to Consolidated Financial Statements
|
51
|
||
2.
|
Financial Statement Schedules:
|
||
The following financial statement schedule is filed as part of this report and should be read together with our consolidated financial statements:
|
|||
Schedule II — Valuation and Qualifying Accounts
|
66
|
||
Schedules not included with this additional financial data have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
3.
|
Exhibits.
|
Exhibit
No.
|
Description
|
|
3.1
|
Composite Certificate of Incorporation of Registrant, as amended (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2001).
|
|
3.2
|
Amended and Restated By-laws of Registrant (effective as of December 29, 2007, incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2007).
|
|
3.3
|
Amendment to the Bylaws of the Registrant (incorporated by reference to the Company’s report on Form 8-K dated March 3, 2008).
|
|
4.1
|
Stockholders Agreement (incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 1995).
|
|
10.1*
|
Form of 1995 Long-Term Stock Incentive Plan (incorporated by reference to the Company’s registration statement on Form S-1) (Registration No. 333-1852).
|
|
10.2*
|
Form of 1995 Stock Plan for Non-Employee Directors (incorporated by reference to the Company’s registration statement on Form S-1) (Registration No. 333-1852).
|
|
10.3*
|
Form of 1999 Long-Term Stock Incentive Plan as amended (incorporated by reference to the Company’s report on Form 8-K dated May 20, 2003).
|
|
10.4*
|
Form of 2006 Stock Incentive Plan for Non-Employee Directors (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2006).
|
|
10.5*
|
Form of 2005 Employee Stock Purchase Plan (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2006).
|
|
10.6
|
Lease Agreement dated September 20, 1988 between the Company and Addwin Realty Associates (Port Washington facility) (incorporated by reference to the Company’s registration statement on Form S-1) (Registration No. 33-92052).
|
|
10.7
|
First Amendment to Lease Agreement dated September 20, 1998 between the Company and Addwin Realty Associates (Port Washington facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 1998).
|
|
10.8
|
Second Amendment to Lease Agreement dated September 20, 1988 between the Company and Addwin Realty Associates (Port Washington facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2007).
|
|
10.9
|
Build-to-Suit Lease Agreement dated April, 1995 among the Company, American National Bank and Trust Company of Chicago (Trustee for the original landlord) and Walsh, Higgins & Company (Contractor) (“Naperville Illinois Facility Lease”) (incorporated by reference to the Company’s registration statement on Form S-1) (Registration No. 33-92052).
|
|
10.10
|
First Amendment, dated as of February 1, 2006, to the Naperville Illinois Facility Lease between the Company and Ambassador Drive LLC (current landlord) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2005).
|
|
10.11
|
Lease Agreement dated September 17, 1998 between Tiger Direct, Inc. and Keystone Miami Property Holding Corp. (Miami facility) (incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 1998).
|
|
10.12
|
First Amendment, dated as of September 5, 2003, to the Lease Agreement between Tiger Direct, Inc. and Keystone Miami Property Holding Corp. (Miami facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2010).
|
|
10.13
|
Second Amendment, dated March 22, 2007, to the Lease Agreement between Tiger Direct, Inc. and Keystone Miami Property Holding Corp. (Miami facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2010).
|
|
10.14
|
Third Amendment, dated as of June 26, 2009, to the Lease Agreement between Tiger Direct, Inc. and Mota Associates Limited Partnership (successor in interest to landlord Keystone Miami Property Holding Corp.) (Miami facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2010).
|
|
10.15
|
Lease Agreement, dated December 8, 2005, between the Company and Hamilton Business Center, LLC (Buford, Georgia facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2005).
|
|
10.16
|
First Amendment, dated as of June 12, 2006, to the Lease Agreement between the Company and Hamilton Business Center, LLC (Buford, Georgia facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2005).
|
10.17*
|
Executive Director’s Service Agreement, dated as of December 15, 2011, between Misco UK Limited, Systemax Inc. and Perminder Dale (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2011).
|
|
10.18*
|
Employment Agreement, dated as of January 17, 2007, between the Company and Lawrence P. Reinhold (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2006).
|
|
10.19*
|
Amendment No. 1, dated December 30, 2009, to the Employment Agreement between the Company and Lawrence P. Reinhold (incorporated by reference to the Company’s report on Form 8-K dated December 30, 2009).
|
|
10.20
|
Second Amended and Restated Credit Agreement, dated as of October 27, 2010, by and among Systemax Inc. and certain affiliates thereof and JPMorgan Chase Bank, N.A., as U.S. Administrative Agent, J.P. Morgan Europe Limited, as UK Administrative Agent, J.P. Morgan Securities, Inc. as Sole Bookrunner and Sole Lead Arranger, and the lenders from time to time party thereto (incorporated by reference to the Company’s report on Form 8-K dated November 2, 2010).
|
|
10.21
|
Amendment No. 1 and Waiver, dated as of December 15, 2011, to the Second Amended and Restated Credit Agreement by and among Systemax Inc. and certain affiliates thereof and JPMorgan Chase Bank, N.A., as U.S. Administrative Agent, J.P. Morgan Europe Limited, as UK Administrative Agent and the lenders from time to time party thereto (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2011).
|
|
10.22
|
Lease Agreement, dated as of September 1, 2010, among Development Authority of Jefferson, Georgia, GE Government Finance Inc. and SYX Distribution Inc. (incorporated by reference to the Company’s report on Form 8-K dated September 24, 2010).
|
|
10.23
|
Corporate Guaranty and Negative Pledge Agreement, dated as of September 1, 2010, among Systemax Inc., Development Authority of Jefferson, Georgia and GE Government Finance Inc. (incorporated by reference to the Company’s report on Form 8-K dated September 24, 2010).
|
|
10.24
|
Escrow Agreement, dated as of September 1, 2010, among Marshall & Ilsley Trust Company, N.A. (as escrow agent), GE Government Finance Inc., Development Authority of Jefferson, Georgia and SYX Distribution Inc. (incorporated by reference to the Company’s report on Form 8-K dated September 24, 2010).
|
|
10.25
|
Lease Agreement, dated April 16, 2010, between Jefferson Project I LLC as Landlord and SYX Distribution Inc. as Tenant (incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarterly period ended March 31, 2012).
|
|
10.26
|
First Amendment, dated August 24, 2010, to the Lease Agreement, dated April 2010, between Jefferson Project I LLC as Landlord and SYX Distribution Inc. as Tenant (Jefferson, GA facility) (incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarterly period ended March 31, 2012).
|
|
10.27
|
Lease Agreement, dated February 27, 2012 between PR I Washington Township NJ, LLC as Landlord and Global Equipment Company Inc. as Tenant (Robbinsville, NJ facility) (incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarterly period ended March 31, 2012).
|
|
10.28*
|
Form of 2010 Long Term Incentive Plan (incorporated by reference to the Company’s Definitive Proxy Statement filed April 29, 2010).
|
|
10.29*
|
Bonus Agreement, dated as of March 10, 2014, among Global Industrial Services, Inc., Systemax Inc. and Robert Dooley (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2013).
|
|
10.30*
|
Employment Agreement, dated April 12, 2012, between Systemax Inc. and Eric Lerner (incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarterly period ended March 31, 2012).
|
|
10.31
|
Amendment No. 2 and Waiver, dated as of August 7, 2013, to the Second Amended and Restated Credit Agreement by and among Systemax Inc. and certain affiliates thereof and JPMorgan Chase Bank, N.A., as U.S. Administrative Agent and the lenders from time to time party thereto (incorporated by reference to the Company’s quarterly report on Form 10Q for the quarter ended September 30, 2013).
|
|
10.32
|
Amendment No. 3 and Waiver, dated as of October 31, 2013 with an effective date of September 28, 2013, to the Second Amendment and Restated Credit Agreement by and among Systemax Inc. and certain affiliates thereof and JPMorgan Chase Bank, N.A., as U.S. Administrative Agent and the lenders from time to time party thereto (incorporated by reference to the Company’s quarterly report on Form 10Q for the quarter ended September 30, 2013).
|
10.33
|
Amendment No. 4, dated as of August 28, 2014, to the Second Amendment and Restated Credit Agreement by and among Systemax Inc. and certain affiliates thereof and JPMorgan Chase Bank, N.A., as U.S. Administrative Agent and the lenders from time to time party thereto (incorporated by reference to the Company’s report on Form 8-K dated August 28, 2014).
|
|
Lease Agreement, dated December 10, 2014, between Prologis, L.P., as Landlord and Global Industrial Distribution Inc, as Tenant (Las Vegas, NV facility) (filed herewith).
|
||
Purchase Agreement dated December 31, 2014, by and among TAKKT America Holding, LLC, Global Industrial Holdings LLC and Global Industrial Mexico Holdings LLC (filed herewith).
|
||
Amendment No. 1 to Purchase Agreement dated January 30, 2015, by and among TAKKT America Holding, LLC, Global Industrial Holdings LLC and Global Industrial Mexico Holdings LLC (filed herewith).
|
||
14
|
Corporate Ethics Policy for Officers, Directors and Employees (revised as of January 2014) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2013).
|
|
Subsidiaries of the Registrant (filed herewith).
|
||
Consent of Independent Registered Public Accounting Firm (filed herewith).
|
||
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
SYSTEMAX INC.
|
|
By: /s/ RICHARD LEEDS
|
|
Richard Leeds
|
|
Chairman and Chief Executive Officer
|
|
Date: March 12, 2015
|
Signature
|
Title
|
Date
|
||
/s/ RICHARD LEEDS
|
Chairman and Chief Executive Officer
|
March 12, 2015
|
||
Richard Leeds
|
(Principal Executive Officer)
|
|||
/s/ BRUCE LEEDS
|
Vice Chairman and Director
|
March 12, 2015
|
||
Bruce Leeds
|
||||
/s/ ROBERT LEEDS
|
Vice Chairman and Director
|
March 12, 2015
|
||
Robert Leeds
|
||||
/s/ LAWRENCE REINHOLD
|
Executive Vice President, Chief Financial Officer
|
March 12, 2015
|
||
Lawrence Reinhold
|
and Director
|
|||
(Principal Financial Officer)
|
||||
/s/ THOMAS AXMACHER
|
Vice President and Controller
|
March 12, 2015
|
||
Thomas Axmacher
|
(Principal Accounting Officer)
|
|||
/s/ ROBERT ROSENTHAL
|
Director
|
March 12, 2015
|
||
Robert Rosenthal
|
||||
/s/ STACY DICK
|
Director
|
March 12, 2015
|
||
Stacy Dick
|
||||
/s/ MARIE ADLER-KRAVECAS
|
Director
|
March 12, 2015
|
||
Marie Adler-Kravecas
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
ASSETS:
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
165.0
|
$
|
181.4
|
||||
Accounts receivable, net of allowances of $15.8 and $16.7
|
355.5
|
333.3
|
||||||
Inventories
|
289.9
|
321.8
|
||||||
Assets available for sale
|
-
|
1.1
|
||||||
Prepaid expenses and other current assets
|
15.9
|
16.3
|
||||||
Deferred income taxes
|
1.7
|
2.3
|
||||||
Total current assets
|
828.0
|
856.2
|
||||||
Property, plant and equipment, net
|
41.2
|
59.4
|
||||||
Deferred income taxes
|
13.5
|
15.3
|
||||||
Goodwill and intangibles
|
7.4
|
6.1
|
||||||
Other assets
|
4.8
|
5.2
|
||||||
Total assets
|
$
|
894.9
|
$
|
942.2
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
420.2
|
$
|
418.7
|
||||
Accrued expenses and other current liabilities
|
93.0
|
89.2
|
||||||
Current portion of long term debt
|
2.7
|
2.5
|
||||||
Total current liabilities
|
515.9
|
510.4
|
||||||
Long-term debt
|
0.9
|
2.9
|
||||||
Other liabilities
|
18.5
|
22.7
|
||||||
Total liabilities
|
535.3
|
536.0
|
||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, par value $.01 per share, authorized 25 million shares; issued none
|
||||||||
Common stock, par value $.01 per share, authorized 150 million shares; issued 38,861,992 and 38,861,992 shares; outstanding 36,808,158 and 36,729,295 shares
|
0.4
|
0.4
|
||||||
Additional paid-in capital
|
184.3
|
183.3
|
||||||
Treasury stock at cost —2,053,834 and 2,132,697 shares
|
(25.4
|
)
|
(26.4
|
)
|
||||
Retained earnings
|
209.2
|
246.7
|
||||||
Accumulated other comprehensive income (loss)
|
(8.9
|
)
|
2.2
|
|||||
Total shareholders’ equity
|
359.6
|
406.2
|
||||||
Total liabilities and shareholders’ equity
|
$
|
894.9
|
$
|
942.2
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Net sales
|
$
|
3,442.8
|
$
|
3,352.3
|
$
|
3,544.3
|
||||||
Cost of sales
|
2,949.6
|
2,869.4
|
3,058.5
|
|||||||||
Gross profit
|
493.2
|
482.9
|
485.8
|
|||||||||
Selling, general and administrative expenses
|
494.7
|
481.3
|
479.4
|
|||||||||
Special charges, net
|
24.4
|
22.2
|
46.3
|
|||||||||
Operating loss from continuing operations
|
(25.9
|
)
|
(20.6
|
)
|
(39.9
|
)
|
||||||
Foreign currency exchange loss
|
5.4
|
0.1
|
0.3
|
|||||||||
Interest and other income, net
|
-
|
(0.4
|
)
|
(0.3
|
)
|
|||||||
Interest expense
|
1.3
|
1.5
|
1.7
|
|||||||||
Loss from continuing operations before income taxes
|
(32.6
|
)
|
(21.8
|
)
|
(41.6
|
)
|
||||||
Provision for (benefit from) income taxes
|
4.9
|
22.0
|
(33.6
|
)
|
||||||||
Loss from continuing operations
|
(37.5
|
)
|
(43.8
|
)
|
(8.0
|
)
|
||||||
Loss from discontinued operations, net of tax
|
-
|
-
|
(0.3
|
)
|
||||||||
Net loss
|
$
|
(37.5
|
)
|
$
|
(43.8
|
)
|
$
|
(8.3
|
)
|
|||
Loss from continuing operations and net loss per common share:
|
||||||||||||
Basic
|
$
|
(1.01
|
)
|
$
|
(1.18
|
)
|
$
|
(0.22
|
)
|
|||
Diluted
|
$
|
(1.01
|
)
|
$
|
(1.18
|
)
|
$
|
(0.22
|
)
|
|||
Weighted average common and common equivalent shares:
|
||||||||||||
Basic
|
37.1
|
37.0
|
36.9
|
|||||||||
Diluted
|
37.1
|
37.0
|
36.9
|
|||||||||
Dividends declared
|
$
|
-
|
$ |
-
|
$ |
0.25
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Net loss
|
$
|
(37.5
|
)
|
$
|
(43.8
|
)
|
$
|
(8.3
|
)
|
|||
Other comprehensive income (loss):
|
||||||||||||
Foreign currency translation
|
(11.1
|
)
|
1.2
|
5.0
|
||||||||
Total comprehensive loss
|
$
|
(48.6
|
)
|
$
|
(42.6
|
)
|
$
|
(3.3
|
)
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Loss from continuing operations
|
$
|
(37.5
|
)
|
$
|
(43.8
|
)
|
$
|
(8.0
|
)
|
|||
Adjustments to reconcile loss from continuing operations to net cash (used in) provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
16.3
|
19.3
|
18.0
|
|||||||||
Asset impairment
|
10.2
|
4.1
|
39.9
|
|||||||||
Provision (benefit) for deferred income taxes
|
0.5
|
26.4
|
(36.6
|
)
|
||||||||
Provision for returns and doubtful accounts
|
8.9
|
4.0
|
5.0
|
|||||||||
Compensation expense related to equity compensation plans
|
1.5
|
2.9
|
4.1
|
|||||||||
Excess tax benefit from exercises of stock options
|
-
|
(0.1
|
)
|
(0.5
|
)
|
|||||||
Loss on dispositions and abandonment
|
0.1
|
0.1
|
0.3
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
(55.0
|
)
|
(23.4
|
)
|
(25.4
|
)
|
||||||
Inventories
|
26.8
|
46.1
|
5.0
|
|||||||||
Prepaid expenses and other current assets
|
(1.0
|
)
|
(1.4
|
)
|
3.0
|
|||||||
Income taxes payable (receivable)
|
14.4
|
(8.7
|
)
|
(8.8
|
)
|
|||||||
Accounts payable
|
10.8
|
12.2
|
64.9
|
|||||||||
Accrued expenses and other current liabilities
|
3.9
|
9.1
|
14.5
|
|||||||||
Net cash (used in) provided by operating activities from continuing operations
|
(0.1
|
)
|
46.8
|
75.4
|
||||||||
Net cash used in operating activities from discontinued operations
|
-
|
-
|
(0.4
|
)
|
||||||||
Net cash (used in) provided by operating activities
|
(0.1
|
)
|
46.8
|
75.0
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchases of property, plant and equipment
|
(7.1
|
)
|
(13.7
|
)
|
(12.1
|
)
|
||||||
Proceeds from disposals of property, plant and equipment
|
1.0
|
0.3
|
0.1
|
|||||||||
Purchase of SCC Services BV, net of cash acquired
|
(6.4
|
)
|
-
|
-
|
||||||||
Net cash used in investing activities
|
(12.5
|
)
|
(13.4
|
)
|
(12.0
|
)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Repayments of capital lease obligations
|
(2.6
|
)
|
(2.8
|
)
|
(2.8
|
)
|
||||||
Dividends paid
|
-
|
-
|
(9.1
|
)
|
||||||||
Proceeds from issuance of common stock
|
0.3
|
0.1
|
0.3
|
|||||||||
Excess tax benefit from exercises of stock options
|
-
|
0.1
|
0.5
|
|||||||||
Net cash used in financing activities
|
(2.3
|
)
|
(2.6
|
)
|
(11.1
|
)
|
||||||
EFFECTS OF EXCHANGE RATES ON CASH
|
(1.5
|
)
|
(0.1
|
)
|
1.5
|
|||||||
NET (DECREASE) INCREASE IN CASH
|
(16.4
|
)
|
30.7
|
53.4
|
||||||||
CASH – BEGINNING OF YEAR
|
181.4
|
150.7
|
97.3
|
|||||||||
CASH – END OF YEAR
|
$
|
165.0
|
$
|
181.4
|
$
|
150.7
|
||||||
Supplemental disclosures:
|
||||||||||||
Interest paid
|
$
|
1.1
|
$
|
1.2
|
$
|
1.4
|
||||||
Income taxes paid
|
$
|
5.2
|
$
|
8.1
|
$
|
11.4
|
||||||
Supplemental disclosures of non-cash investing and financing activities:
|
||||||||||||
Acquisitions of equipment through capital leases
|
$
|
0.8
|
$
|
-
|
$
|
1.3
|
Common Stock
|
||||||||||||||||||||||||||||
Number
of Shares
Outstanding
|
Amount
|
Additional
Paid-in
Capital
|
Treasury
Stock,
At Cost
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total Equity
|
||||||||||||||||||||||
Balances, December 31, 2011
|
36,399
|
$
|
0.4
|
$
|
180.5
|
$
|
(30.5
|
)
|
$
|
307.9
|
$
|
(4.0
|
)
|
$
|
454.3
|
|||||||||||||
Stock-based compensation expense
|
4.1
|
4.1
|
||||||||||||||||||||||||||
Issuance of restricted stock
|
47
|
(0.5
|
)
|
0.6
|
0.1
|
|||||||||||||||||||||||
Exercise of stock options
|
109
|
(1.0
|
)
|
1.3
|
0.3
|
|||||||||||||||||||||||
Surrender of fully vested options
|
(0.7
|
)
|
(0.7
|
)
|
||||||||||||||||||||||||
Income tax benefit on stock-based compensation
|
0.6
|
0.6
|
||||||||||||||||||||||||||
Change in cumulative translation adjustment
|
5.0
|
5.0
|
||||||||||||||||||||||||||
Dividends paid
|
(9.1
|
)
|
(9.1
|
)
|
||||||||||||||||||||||||
Net loss
|
(8.3
|
)
|
(8.3
|
)
|
||||||||||||||||||||||||
Balances, December 31, 2012
|
36,555
|
$
|
0.4
|
$
|
183.0
|
$
|
(28.6
|
)
|
$
|
290.5
|
$
|
1.0
|
446.3
|
|||||||||||||||
Stock-based compensation expense
|
2.9
|
2.9
|
||||||||||||||||||||||||||
Issuance of restricted stock
|
140
|
(1.9
|
)
|
1.8
|
(0.1
|
)
|
||||||||||||||||||||||
Exercise of stock options
|
34
|
(0.3
|
)
|
0.4
|
0.1
|
|||||||||||||||||||||||
Surrender of fully vested options and restricted stock
|
(0.4
|
)
|
(0.4
|
)
|
||||||||||||||||||||||||
Change in cumulative translation adjustment
|
1.2
|
1.2
|
||||||||||||||||||||||||||
Net loss
|
(43.8
|
)
|
(43.8
|
)
|
||||||||||||||||||||||||
Balances, December 31, 2013
|
36,729
|
$
|
0.4
|
$
|
183.3
|
$
|
(26.4
|
)
|
$
|
246.7
|
$
|
2.2
|
406.2
|
|||||||||||||||
Stock-based compensation expense
|
1.5
|
1.5
|
||||||||||||||||||||||||||
Issuance of restricted stock
|
45
|
(0.3
|
)
|
0.6
|
0.3
|
|||||||||||||||||||||||
Exercise of stock options
|
34
|
(0.1
|
)
|
0.4
|
0.3
|
|||||||||||||||||||||||
Surrender of fully vested options
|
(0.1
|
)
|
(0.1
|
)
|
||||||||||||||||||||||||
Change in cumulative translation adjustment
|
(11.1
|
)
|
(11.1
|
)
|
||||||||||||||||||||||||
Net loss
|
(37.5
|
)
|
(37.5
|
)
|
||||||||||||||||||||||||
Balances, December 31, 2014
|
36,808
|
$
|
0.4
|
$
|
184.3
|
$
|
(25.4
|
)
|
$
|
209.2
|
$
|
(8.9
|
)
|
$
|
359.6
|
December 31,
|
||||||||
2014
|
||||||||
Gross Carrying
Amount
|
Accumulated
Amortization
|
|||||||
Client lists
|
$
|
1.0
|
$
|
0.1
|
||||
Total
|
$
|
1.0
|
0.1
|
December 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Balance January 1
|
$
|
2.4
|
$
|
2.4
|
||||
Adjustments to purchase price allocation
|
1.2
|
-
|
||||||
Deferred tax adjustment
|
0.3
|
-
|
||||||
Balance December 31
|
$
|
3.9
|
$
|
2.4
|
December 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Balance January 1
|
$
|
2.3
|
$
|
5.4
|
||||
Adjustments to purchase price allocation
|
0.2
|
-
|
||||||
Intangible write offs
|
-
|
(2.9
|
)
|
|||||
Sale proceeds
|
-
|
(0.2
|
)
|
|||||
Balance December 31
|
$
|
2.5
|
$
|
2.3
|
December 31,
|
December 31,
|
|||||||||||||||
2014
|
2013
|
|||||||||||||||
Gross Carrying
Amount
|
Accumulated
Amortization
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||
Retail store leases
|
$
|
3.4
|
3.4
|
$
|
3.4
|
$
|
2.5
|
|||||||||
Client lists
|
3.6
|
2.6
|
2.6
|
2.2
|
||||||||||||
Technology
|
1.0
|
1.0
|
1.0
|
0.9
|
||||||||||||
Total
|
$
|
8.0
|
7.0
|
$
|
7.0
|
$
|
5.6
|
2015
|
$
|
0.2
|
||
2016
|
0.2
|
|||
2017
|
0.2
|
|||
2018 and after
|
0.4
|
|||
Total
|
1.0
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Land and buildings
|
$
|
18.6
|
$
|
19.7
|
||||
Furniture and fixtures, office, computer and other equipment and software
|
127.6
|
129.2
|
||||||
Leasehold improvements
|
26.8
|
30.8
|
||||||
173.0
|
179.7
|
|||||||
Less accumulated depreciation and amortization
|
131.8
|
120.3
|
||||||
Property, plant and equipment, net
|
$
|
41.2
|
$
|
59.4
|
2014
|
2013
|
|||||||
Office, computer and other equipment
|
$
|
17.4
|
$
|
17.4
|
||||
Less: Accumulated amortization
|
14.5
|
12.0
|
||||||
$
|
2.9
|
$
|
5.4
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Payroll and employee benefits
|
$
|
34.6
|
$
|
33.0
|
||||
Advertising
|
11.9
|
10.0
|
||||||
Sales and VAT tax payable
|
9.3
|
9.0
|
||||||
Freight
|
8.0
|
6.7
|
||||||
Reorganization costs
|
4.7
|
8.0
|
||||||
Other
|
24.5
|
22.5
|
||||||
$
|
93.0
|
$
|
89.2
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Warehouse capitalized equipment lease
|
$
|
2.2
|
$
|
4.1
|
||||
Other capitalized equipment lease
|
1.4
|
1.3
|
||||||
Subtotal
|
3.6
|
5.4
|
||||||
Less: current portion
|
2.7
|
2.5
|
||||||
$
|
0.9
|
$
|
2.9
|
2015
|
2016
|
2017
|
2018
|
2019
|
||||||||||||||||
Maturities
|
$
|
2.7
|
$
|
0.6
|
$
|
0.3
|
$
|
-
|
$
|
-
|
Workforce
Reductions and
Personnel Costs
|
Other Exit
Costs
|
Total
|
||||||||||
Balance January 1, 2014
|
$
|
7.0
|
$
|
5.1
|
$
|
12.1
|
||||||
Charged to expense
|
11.7
|
0.1
|
11.8
|
|||||||||
Paid or otherwise settled
|
(14.0
|
)
|
(5.2
|
)
|
(19.2
|
)
|
||||||
Balance December 31, 2014
|
$
|
4.7
|
$
|
-
|
$
|
4.7
|
2014
|
2013
|
2012
|
||||||||||
Expected annual dividend yield
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||
Risk-free interest rate
|
2.02
|
%
|
1.66
|
%
|
1.10
|
%
|
||||||
Expected volatility
|
47.1
|
%
|
41.1
|
%
|
57.3
|
%
|
||||||
Expected life in years
|
6.2
|
7.9
|
6.3
|
Weighted Average
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Shares
|
Exercise
Price
|
Shares
|
Exercise
Price
|
Shares
|
Exercise
Price
|
|||||||||||||||||||
Outstanding at beginning of year
|
1,175,499
|
$
|
16.11
|
1,353,059
|
$
|
15.88
|
1,285,115
|
$
|
13.39
|
|||||||||||||||
Granted
|
65,000
|
$
|
12.39
|
60,000
|
$
|
9.54
|
772,500
|
$
|
15.00
|
|||||||||||||||
Exercised
|
(33,749
|
)
|
$
|
9.78
|
(34,310
|
)
|
$
|
3.04
|
(109,466
|
)
|
$
|
3.12
|
||||||||||||
Cancelled or expired
|
(104,500
|
)
|
$
|
15.83
|
(203,250
|
)
|
$
|
14.84
|
(595,090
|
)
|
$
|
11.71
|
||||||||||||
Outstanding at end of year
|
1,102,250
|
$
|
16.11
|
1,175,499
|
$
|
16.11
|
1,353,059
|
$
|
15.88
|
|||||||||||||||
Options exercisable at year end
|
839,500
|
772,749
|
682,809
|
|||||||||||||||||||||
Weighted average fair value per option granted during the year
|
$
|
5.92
|
$
|
4.44
|
$
|
7.90
|
Range of Exercise Prices
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
Weighted Average
Remaining
Contractual Life
|
Aggregate
Intrinsic
Value (in
millions)
|
||||||||||||||||||
$ |
5.00
|
to
|
$
|
10.00
|
51,202
|
$
|
9.26
|
7.91
|
$
|
0.2
|
||||||||||||
$ |
10.01
|
to
|
$
|
15.00
|
384,237
|
$
|
13.08
|
5.57
|
0.3
|
|||||||||||||
$ |
15.01
|
to
|
$
|
20.00
|
529,774
|
$
|
18.31
|
4.77
|
-
|
|||||||||||||
$ |
20.01
|
to
|
$
|
20.15
|
100,000
|
$
|
20.15
|
2.06
|
-
|
|||||||||||||
$ |
5.00
|
to
|
$
|
20.15
|
1,065,213
|
$
|
16.16
|
4.95
|
$
|
0.5
|
Shares
|
Weighted
Average Grant-
Date Fair Value
|
|||||||
Unvested at January 1, 2014
|
402,750
|
$
|
8.58
|
|||||
Granted
|
65,000
|
$
|
5.92
|
|||||
Vested
|
(134,000
|
)
|
$
|
8.77
|
||||
Forfeited
|
(71,000
|
)
|
$
|
7.02
|
||||
Unvested at December 31, 2014
|
262,750
|
$
|
8.25
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
United States
|
$
|
(9.3
|
)
|
$
|
(18.8
|
)
|
$
|
(66.5
|
)
|
|||
Foreign
|
(23.3
|
)
|
(3.0
|
)
|
24.9
|
|||||||
Total
|
$
|
(32.6
|
)
|
$
|
(21.8
|
)
|
$
|
(41.6
|
)
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
(0.3
|
)
|
$
|
(8.2
|
)
|
$
|
(5.4
|
)
|
|||
State
|
0.6
|
0.6
|
0.3
|
|||||||||
Foreign
|
4.1
|
3.2
|
8.1
|
|||||||||
Total current
|
4.4
|
(4.4
|
)
|
3.0
|
||||||||
Deferred:
|
||||||||||||
Federal
|
-
|
20.5
|
(16.5
|
)
|
||||||||
State
|
(0.5
|
)
|
4.8
|
(3.3
|
)
|
|||||||
Foreign
|
1.0
|
1.1
|
(16.8
|
)
|
||||||||
Total deferred
|
0.5
|
26.4
|
(36.6
|
)
|
||||||||
TOTAL
|
$
|
4.9
|
$
|
22.0
|
$
|
(33.6
|
)
|
Year Ended December 31, | ||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Income tax at Federal statutory rate
|
$
|
(11.4
|
)
|
(35.0
|
)%
|
$
|
(7.6
|
)
|
(35.0
|
)%
|
$
|
(14.5
|
)
|
(35.0
|
)%
|
|||||||||
Foreign taxes at rates different from the U.S. rate
|
6.1
|
18.7
|
2.3
|
10.6
|
(3.7
|
)
|
(8.9
|
)
|
||||||||||||||||
State and local income taxes, net of federal tax benefit
|
1.3
|
|
4.0
|
|
(0.3
|
)
|
(1.4
|
)
|
(2.1
|
)
|
(5.0
|
)
|
||||||||||||
Changes in valuation allowances
|
9.1
|
27.9
|
28.9
|
132.6
|
(13.3
|
)
|
(31.9
|
)
|
||||||||||||||||
Change in deferred tax liability
|
-
|
-
|
(1.2
|
)
|
(5.5
|
)
|
-
|
-
|
||||||||||||||||
Non-deductible items
|
-
|
-
|
0.1
|
0.5
|
0.1
|
0.2
|
||||||||||||||||||
Other items, net
|
(0.2
|
)
|
(0.6
|
)
|
(0.2
|
)
|
(0.9
|
)
|
(0.1
|
)
|
(0.2
|
)
|
||||||||||||
Income tax
|
$
|
4.9
|
15.0
|
%
|
$
|
22.0
|
100.9
|
%
|
$
|
(33.6
|
)
|
(80.8
|
)%
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Assets:
|
||||||||
Current:
|
||||||||
Accrued expenses and other liabilities
|
$
|
10.5
|
$
|
10.8
|
||||
Inventory
|
4.2
|
4.6
|
||||||
Valuation allowances
|
(10.5
|
)
|
(11.2
|
)
|
||||
Total current assets
|
$
|
4.2
|
$
|
4.2
|
||||
Non-current:
|
||||||||
Net operating loss and credit carryforwards
|
$
|
35.0
|
$
|
30.1
|
||||
Depreciation
|
2.5
|
2.0
|
||||||
Intangible & other
|
16.2
|
15.2
|
||||||
Valuation allowances
|
(38.3
|
)
|
(28.5
|
)
|
||||
Total non-current assets
|
$
|
15.4
|
$
|
18.8
|
||||
Liabilities :
|
||||||||
Current :
|
||||||||
Deductible assets
|
$
|
1.5
|
$
|
0.7
|
||||
Other
|
1.0
|
1.2
|
||||||
Total current liabilities
|
$
|
2.5
|
$
|
1.9
|
||||
Non-current:
|
||||||||
Amortization
|
$
|
1.2
|
$
|
1.1
|
||||
Depreciation
|
0.1
|
1.8
|
||||||
Other
|
0.6
|
0.6
|
||||||
Total non-current liabilities
|
$
|
1.9
|
$
|
3.5
|
Capital
Leases
|
Operating
Leases
|
Total
|
||||||||||
2015
|
2.8
|
$
|
28.3
|
$
|
31.1
|
|||||||
2016
|
0.6
|
26.4
|
27.0
|
|||||||||
2017
|
0.3
|
26.0
|
26.3
|
|||||||||
2018
|
-
|
21.4
|
21.4
|
|||||||||
2019
|
-
|
19.1
|
19.1
|
|||||||||
2020-2024
|
-
|
51.7
|
51.7
|
|||||||||
2025-2029
|
-
|
25.6
|
25.6
|
|||||||||
Thereafter
|
-
|
8.0
|
8.0
|
|||||||||
Total minimum lease payments
|
3.7
|
206.5
|
210.2
|
|||||||||
Less: sublease rental income
|
-
|
2.5
|
2.5
|
|||||||||
Lease obligation net of subleases
|
3.7
|
$
|
204.0
|
207.7
|
||||||||
Less: amount representing interest
|
0.1
|
|||||||||||
Present value of minimum capital lease payments (including current portion of $2.7)
|
$
|
3.6
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Net Sales:
|
||||||||||||
Technology Products
|
$
|
2,880.9
|
$
|
2,873.3
|
$
|
3,137.6
|
||||||
Industrial Products
|
556.0
|
473.8
|
401.9
|
|||||||||
Corporate and other
|
5.9
|
5.2
|
4.8
|
|||||||||
Consolidated
|
$
|
3,442.8
|
$
|
3,352.3
|
$
|
3,544.3
|
||||||
Depreciation and Amortization Expense:
|
||||||||||||
Technology Products
|
$
|
12.9
|
$
|
16.1
|
$
|
15.1
|
||||||
Industrial Products
|
2.1
|
2.2
|
1.9
|
|||||||||
Corporate and other
|
1.3
|
1.0
|
1.0
|
|||||||||
Consolidated
|
$
|
16.3
|
$
|
19.3
|
$
|
18.0
|
||||||
Operating Income (Loss):
|
||||||||||||
Technology Products
|
$
|
(51.3
|
)
|
$
|
(40.6
|
)
|
$
|
(47.2
|
)
|
|||
Industrial Products
|
41.0
|
40.0
|
29.9
|
|||||||||
Corporate and other expenses
|
(15.6
|
)
|
(20.0
|
)
|
(22.6
|
)
|
||||||
Consolidated
|
$
|
(25.9
|
)
|
$
|
(20.6
|
)
|
$
|
(39.9
|
)
|
|||
Total Assets
|
||||||||||||
Technology Products
|
$
|
501.9
|
$
|
598.3
|
$
|
564.4
|
||||||
Industrial Products
|
136.4
|
110.0
|
157.7
|
|||||||||
Corporate and other
|
256.6
|
233.9
|
240.2
|
|||||||||
Consolidated
|
$
|
894.9
|
$
|
942.2
|
$
|
962.3
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Net Sales:
|
||||||||||||
United States
|
$
|
2,061.8
|
$
|
2,051.1
|
2.203.2
|
|||||||
United Kingdom
|
471.9
|
468.5
|
491.7
|
|||||||||
France
|
383.2
|
335.4
|
312.7
|
|||||||||
Other Europe
|
334.8
|
291.5
|
322.3
|
|||||||||
Other North America
|
191.1
|
205.8
|
214.4
|
|||||||||
Consolidated
|
$
|
3,442.8
|
$
|
3,352.3
|
3,544.3
|
|||||||
Long-lived Assets:
|
||||||||||||
United States
|
$
|
16.7
|
$
|
32.3
|
$
|
42.0
|
||||||
United Kingdom
|
17.5
|
18.7
|
16.6
|
|||||||||
France
|
0.8
|
0.9
|
0.1
|
|||||||||
Other Europe and Asia
|
5.5
|
6.4
|
2.7
|
|||||||||
Other North America
|
0.7
|
1.1
|
1.6
|
|||||||||
Consolidated
|
$
|
41.2
|
$
|
59.4
|
$
|
63.0
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
|||||||||||||
2014:
|
||||||||||||||||
Net sales
|
$
|
873.4
|
$
|
831.1
|
$
|
825.4
|
$
|
912.9
|
||||||||
Gross profit
|
$
|
127.9
|
$
|
123.3
|
$
|
117.5
|
$
|
124.5
|
||||||||
Net loss
|
$
|
(3.0
|
)
|
$
|
(6.2
|
)
|
$
|
(2.8
|
)
|
$
|
(25.5
|
)
|
||||
Net loss per common share:
|
||||||||||||||||
Basic
|
$
|
(0.08
|
)
|
$
|
(0.17
|
)
|
$
|
(0.08
|
)
|
$
|
(0.69
|
)
|
||||
Diluted
|
$
|
(0.08
|
)
|
$
|
(0.17
|
)
|
$
|
(0.08
|
)
|
$
|
(0.69
|
)
|
||||
2013:
|
||||||||||||||||
Net sales
|
$
|
880.6
|
$
|
805.7
|
$
|
791.8
|
$
|
874.2
|
||||||||
Gross profit
|
$
|
121.6
|
$
|
116.3
|
$
|
116.8
|
$
|
128.2
|
||||||||
Net loss
|
$
|
(6.3
|
)
|
$
|
(6.1
|
)
|
$
|
(11.6
|
)
|
$
|
(19.8
|
)
|
||||
Net loss per common share:
|
||||||||||||||||
Basic
|
$
|
(0.17
|
)
|
$
|
(0.16
|
)
|
$
|
(0.31
|
)
|
$
|
(0.54
|
)
|
||||
Diluted
|
$
|
(0.17
|
)
|
$
|
(0.16
|
)
|
$
|
(0.31
|
)
|
$
|
(0.54
|
)
|
Description
|
Balance at
Beginning of
Period
|
Charged to
Expenses
|
Write-offs
|
Other
|
Balance at
End of Period
|
|||||||||||||||
Allowance for doubtful accounts
|
||||||||||||||||||||
2014
|
$
|
5.8
|
$
|
8.9
|
$
|
(8.3
|
)
|
$
|
0.1
|
(1)
|
$
|
6.5
|
||||||||
2013
|
$
|
6.3
|
$
|
4.0
|
$
|
(4.5
|
)
|
$
|
-
|
$
|
5.8
|
|||||||||
2012
|
$
|
5.4
|
$
|
5.0
|
$
|
(4.1
|
)
|
$
|
-
|
$
|
6.3
|
|||||||||
Allowance for sales returns
|
||||||||||||||||||||
2014
|
$
|
10.9
|
$
|
9.3
|
$
|
-
|
$
|
(10.9
|
) (2)
|
$
|
9.3
|
|||||||||
2013
|
$
|
9.2
|
$
|
10.9
|
$
|
-
|
$
|
(9.2
|
) (2)
|
$
|
10.9
|
|||||||||
2012
|
$
|
9.3
|
$
|
9.2
|
$
|
-
|
$
|
(9.3
|
) (2)
|
$
|
9.2
|
|||||||||
Allowance for inventory returns
|
||||||||||||||||||||
2014
|
$
|
(9.2
|
)
|
$
|
(7.8
|
)
|
-
|
$
|
9.2
|
(2)
|
$
|
(7.8
|
)
|
|||||||
2013
|
$
|
(8.0
|
)
|
$
|
(9.2
|
)
|
-
|
$
|
8.0
|
(2)
|
$
|
(9.2
|
)
|
|||||||
2012
|
$
|
(7.9
|
)
|
$
|
(8.0
|
)
|
-
|
$
|
7.9
|
(2)
|
$
|
(8.0
|
)
|
|||||||
Allowance for deferred tax assets
|
||||||||||||||||||||
2014
|
||||||||||||||||||||
Current
|
$
|
11.2
|
$
|
(0.7
|
)
|
$
|
-
|
$
|
-
|
$
|
10.5
|
|||||||||
Noncurrent
|
$
|
28.5
|
$
|
9.8
|
$
|
-
|
$
|
-
|
$
|
38.3
|
||||||||||
2013
|
||||||||||||||||||||
Current
|
$
|
2.2
|
$
|
9.0
|
$
|
-
|
$
|
-
|
$
|
11.2
|
||||||||||
Noncurrent
|
$
|
8.9
|
$
|
19.6
|
$
|
-
|
$
|
-
|
$
|
28.5
|
||||||||||
2012
|
||||||||||||||||||||
Current
|
$
|
1.5
|
$
|
0.7
|
$
|
-
|
$
|
-
|
$
|
2.2
|
||||||||||
Noncurrent
|
$
|
28.4
|
$
|
(19.5
|
)
|
$
|
-
|
$
|
-
|
$
|
8.9
|
Tenant:
|
Global Industrial Distribution Inc., a Delaware corporation
|
|
Tenant’s Representative,
|
Global Industrial Distribution, Inc.
|
|
Address, and Telephone:
|
11 Harbor Park Dr.
Port Washington, NY 11050
Attn: Alan Schaeffer
|
|
Premises:
|
The interior portion of the Building, containing approximately 464,203 rentable square feet, as determined by Landlord, as shown on Exhibit A and more commonly known as 3700 Bay Lake Trail, North Las Vegas, Nevada 89030.
|
|
Project:
|
The project commonly known as Prologis Las Vegas Corporate Center
|
|
Building:
|
Prologis Las Vegas Corporate Center 19
|
|
3700 Bay Lake Trail
|
||
North Las Vegas, Nevada 89030
|
||
Tenant's Proportionate Share of Project:
|
100.00 % of the 464,203 square foot Project
|
|
Tenant's Proportionate Share of Building:
|
100.00 % of the 464,203 square foot Building
|
|
Lease Term:
|
Beginning on the Commencement Date and ending on the last day of the 123rd full month following the Commencement Date.
|
|
Commencement Date:
|
The date the Final Scope is Substantially Completed, as defined in Addendum 4.
|
|
Initial Monthly Base Rent:
|
See Addendum 1
|
|
Initial Estimated Monthly Operating Expense Payments:
(estimates only and subject to adjustment to actual costs and expenses according to the provisions of this Lease)
|
1. Utilities: $4,363.51
2. Common Area Charges: $5,059.81
3. Taxes: $18,196.75
4. Insurance: $2,692.37
5. Others (Property Mgmt. Fee): $4,689.97
|
|
Initial Estimated Monthly Operating Expense Payments:
|
$30,312.45
|
|
Initial Monthly Base Rent, and Estimated Operating Expense
|
$196,265.02
|
|
Final Month Gross Rent Deposit:
|
One month’s gross rent.
|
|
Brokers:
|
Landlord: Voit Real Estate Service
Tenant: Cushman & Wakefield and Commerce Real Estate Solutions
|
|
Addenda:
|
1. Base Rent Adjustments 2. HVAC Maintenance Contract 3. Move Out Conditions 4. Construction 5. Two Renewal Options (Baseball Arbitration)
|
|
Exhibits:
|
A. Site Plan
B. Project Rules and Regulations
C. Commencement Date Certificate
D. Initial Improvements
E. Form of Lease Guaranty
|
TENANT:
|
LANDLORD:
|
GLOBAL INDUSTRIAL DISTRIBUTION INC.
|
PROLOGIS, L.P.
|
a Delaware corporation
|
a Delaware limited partnership
|
By: Prologis, Inc., a Maryland corporation, its General Partner
|
By:
|
/s/ Lawrence P. Reinhold
|
By:
|
/s/ Fritz Wyler
|
|
Name:
|
Lawrence P. Reinhold
|
Name:
|
Fritz Wyler
|
|
Title:
|
Vice President
|
Title:
|
SVP
|
Period
|
Monthly Base Rent
|
||
Month 1
|
through
|
Month 3
|
$0.00*
|
Month 4
|
through
|
Month 15
|
$165,952.57
|
Month 16
|
through
|
Month 27
|
$169,271.63
|
Month 28
|
through
|
Month 39
|
$172,657.06
|
Month 40
|
through
|
Month 51
|
$176,110.20
|
Month 52
|
through
|
Month 63
|
$179,632.40
|
Month 64
|
through
|
Month 75
|
$183,225.05
|
Month 76
|
through
|
Month 87
|
$186,889.55
|
Month 88
|
through
|
Month 99
|
$190,627,34
|
Month 100
|
through
|
Month 111
|
$194,439.89
|
Month 112
|
through
|
Month 123
|
$198,328,69
|
1. Adjust belt tension; |
2. Lubricate all moving parts, as necessary; |
3. Inspect and adjust all temperature and safety controls; |
4. Check refrigeration system for leaks and operation; |
5. Check refrigeration system for moisture; |
6. Inspect compressor oil level and crank case heaters; |
7. Check head pressure, suction pressure and oil pressure; |
8. Inspect air filters and replace when necessary; |
9. Check space conditions; |
10. Check condensate drains and drain pans and clean, if necessary; |
11. Inspect and adjust all valves; |
12. Check and adjust dampers; |
13. Run machine through complete cycle. |
1. Adjust belt tension; |
2. Lubricate all moving parts, as necessary; |
3. Service floats and pumps; |
4. Service water distribution system; |
5. Check condition of pads-replace semi-annually; |
6. Clean pans, coat bottoms as necessary; |
7. Check electrical connections and motors; |
8. Run coolers to test equipment; |
9. Service system to prevent water from draining or leaking on roof; |
10. November-winterize the system and turn water off; |
11. April-Spring start up and turn water on. |
1.
|
Lights:
|
Office, warehouse, emergency and exit lights will be fully operational with all bulbs and ballasts functioning.
|
2.
|
Dock Levelers, Service Doors
|
|
and Roll Up Doors:
|
All truck doors, service doors, roll up doors and dock levelers shall be serviced and placed in good operating order. This would include the necessary replacement of any dented truck door panels and adjustment of door tension to insure property operation. All door panels which are replaced need to be painted to match the building standard.
|
|
3.
|
Dock Seals/Dock Bumpers:
|
Free of tears and broken backboards repaired. All dock bumpers must be left in place and well secured.
|
4.
|
Structural Columns
|
All structural steel columns in the warehouse and office shall be inspected for damage. Repairs of this nature should be pre-approved by Landlord prior to implementation.
|
5.
|
Warehouse Floor:
|
Free of stains and swept with no racking bolts and other protrusions left in floor. Cracks should be repaired with an epoxy or polymer to match concrete color. Landlord hereby acknowledges that some immaterial cracks may occur that do not necessarily indicate a structural failure of the floor slab. All floor striping in the Premises shall be removed with no residual staining or other indication that such striping existed.
|
6.
|
Tenant-Installed
|
|
Equipment and Wiring:
|
Removed and space turned to original condition when originally leased. (Remove air lines, junction boxes, conduit, etc.)
|
|
7.
|
Walls:
|
Sheetrock (drywall) damage should be patched and fire-taped so that there are no holes in either office or warehouse.
|
8.
|
Carpet and Tile
|
The carpet and vinyl tiles should be in a clean condition and should not have any holes or chips in them. Landlord will accept normal wear on these items provided they appear to be in a maintained condition.
|
9.
|
Roof:
|
Any Tenant-installed equipment must be removed and roof penetrations properly repaired by licensed roofing contractor. Active leaks must be fixed and latest Landlord maintenance and repairs recommendation must have been followed. Tenant must check with Landlord's property manager to determine if specific roofing contractor is required to perform work.
|
10.
|
Signs:
|
All exterior signs must be removed and holes patched and paint touched-up as necessary. All window signs should likewise be removed.
|
11.
|
Heating and Air
|
|
Conditioning System:
|
Heating/air conditioning systems should be placed in good working order, including the necessary replacement of any parts to return the unit to a well maintained condition. This includes warehouse heaters and exhaust fans. Upon move out, Landlord will have an exit inspection performed by a certified mechanical contractor to determine the condition.
|
|
12.
|
Electrical & Plumbing:
|
All electrical and plumbing equipment to be returned in good condition and repair and conforming to code.
|
14.
|
Overall Cleanliness:
|
Clean windows, sanitize bathroom(s), vacuum carpet, and remove any and all debris from office and warehouse. Remove all pallets and debris from exterior of Premises. All trade fixtures, dumpsters, racking, trash, vending machines and other personal property to be removed.
|
15.
|
Upon Completion:
|
Contact Landlord's property manager to coordinate turning in of keys, utility changeover and obtaining of final Landlord inspection of Premises.
|
· | Landlord’s Tenant Improvement Work outlined in those certain construction plans and drawings prepared by HPA Architectures as outlined on Exhibit D attached hereto and in reference incorporated herein; and |
· | Shell Building Specifications as outlined on Exhibit D attached hereto and by reference incorporated herein. |
1. | The sidewalk, entries, and driveways of the Project shall not be obstructed by Tenant, or its agents, or used by them for any purpose other than ingress and egress to and from the Premises. |
2. | Tenant shall not place any objects, including antennas, outdoor furniture, etc., in the parking areas, landscaped areas or other areas outside of its Premises, or on the roof of the Project. |
3. | Except for seeing-eye dogs, no animals shall be allowed in the offices, halls, or corridors in the Project. |
4. | Tenant shall not disturb the occupants of the Project or adjoining buildings by the use of any radio or musical instrument or by the making of loud or improper noises. |
5. | If Tenant desires telegraphic, telephonic or other electric connections in the Premises, Landlord or its agent will direct the electrician as to where and how the wires may be introduced; and, without such direction, no boring or cutting of wires will be permitted. Any such installation or connection shall be made at Tenant's expense. |
6. | Tenant shall not install or operate any steam or gas engine or boiler, or other mechanical apparatus in the Premises, except as specifically approved in the Lease. The use of oil, gas or inflammable liquids for heating, lighting or any other purpose is expressly prohibited. Explosives or other articles deemed extra hazardous shall not be brought into the Project. |
7. | Parking any type of recreational vehicles is specifically prohibited on or about the Project. Further, parking any type of trucks, trailers or other vehicles in the Building is specifically prohibited. In the event that a vehicle is disabled, it shall be removed within 48 hours. There shall be no "For Sale" or other advertising signs on or about any parked vehicle. All vehicles shall be parked in the designated parking areas in conformity with all signs and other markings. All parking will be open parking, and no reserved parking, numbering or lettering of individual spaces will be permitted except as specified by Landlord or in the Lease. |
8. | Tenant shall maintain the Premises free from rodents, insects and other pests. |
9. | Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs or who shall in any manner do any act in violation of the Rules and Regulations of the Project. |
10. | Tenant shall not cause any unnecessary labor by reason of Tenant's carelessness or indifference in the preservation of good order and cleanliness. Landlord shall not be responsible to Tenant for any loss of property on the Premises, however occurring, or for any damage done to the effects of Tenant by the janitors or any other employee or person. |
11. | Tenant shall give Landlord prompt notice of any defects in the water, lawn sprinkler, sewage, gas pipes, electrical lights and fixtures, heating apparatus, or any other service equipment affecting the Premises. |
12. | Tenant shall not permit storage outside the Premises, or dumping of waste or refuse or permit any harmful materials to be placed in any drainage system or sanitary system in or about the Premises. |
13. | All moveable trash receptacles provided by the trash disposal firm for the Premises must be kept in the trash enclosure areas, if any, provided for that purpose. |
14. | No auction, public or private, will be permitted on the Premises or the Project. |
15. | No awnings shall be placed over the windows in the Premises except with the prior written consent of Landlord. |
16. | The Premises shall not be used for lodging, sleeping or cooking or for any immoral or illegal purposes or for any purpose other than that specified in the Lease. No gaming devices shall be operated in the Premises. |
17. | Tenant shall ascertain from Landlord the maximum amount of electrical current which can safely be used in the Premises, taking into account the capacity of the electrical wiring in the Project and the Premises and the needs of other tenants, and shall not use more than such safe capacity. Landlord's consent to the installation of electric equipment shall not relieve Tenant from the obligation not to use more electricity than such safe capacity. |
18. | Tenant assumes full responsibility for protecting the Premises from theft, robbery and pilferage. |
19. | Tenant shall not install or operate on the Premises any machinery or mechanical devices of a nature not directly related to Tenant's ordinary use of the Premises and shall keep all such machinery free of vibration, noise and air waves which may be transmitted beyond the Premises. |
20. | Tenant shall not permit smoking in the office areas of the Premises. |
Lease Commencement Date:
|
||
Lease Expiration Date:
|
||
Rental Commencement Date:
|
Accepted by:
|
Global Industrial Distribution Inc.
|
Date:
|
||
By:
|
||||
Printed:
|
||||
Title:
|
· | 464,203 SF cross dock building (408’ deep) |
· | 112 dock doors (9’X10’) to be installed. Tenant requires 56 Truck Door Packages to be on eastern (receiving) side of building and 33 Truck Door Packages on western side per Scheme 21 |
· | 2 of the dock door positions to be provided on western side for trash compactor |
· | 4 grade level doors (12’X14’) |
· | Approximately 316 car parking stalls are able to be striped. 60 trailer parking positions. |
o | Note – Subject to City approval, Car parking count shall be reduced to add additional truck stalls around northern perimeter of building in general conformance with Scheme 22. |
· | Reinforced concrete tilt-up construction |
· | Concrete truck courts and concrete car parking stalls |
· | 36’ clear height beginning 6” after first row of columns |
· | 56’X60’ typical column spacing |
· | 8” thick concrete floor slab, 4,500 psi, welded wire mats at floor joints, FF35/FL25 floor flatness, vapor barrier at office area, lapidolith floor sealer or equal |
· | Panelized wood hybrid roof deck, 4 ply built-up roof system with screwed metal fastening at building corners and perimeter of roof as recommended by FM Global; 10 year roof warranty |
· | R-19 batt roof insulation with white scrim sheet |
· | Warehouse interior walls painted white-one coat |
· | 2% skylights and smoke hatches with 360 degree fusible links per FM Global recommendation |
· | ESFR sprinkler system with K-25 heads, 2,500 gpm fire pump; seismic branch line bracing and seismic gas shut-off per FM Global recommendation |
· | 2,000 amp panel, 277/480v.; expandable to 4,000 amps |
Codes:
|
All work shall be designed in accordance with The National Electric Code (2012 NEC) and Construction as defined by 2012 IBC code. All work shall be completed within the requirements of all local, state national codes or agencies having governing jurisdiction, and will be completed in a manner satisfactory to the appropriate building department(s) including but not limited to the current application of the Americans with Disabilities Act.
|
Drawings & Specs:
|
Complete working drawings and specifications shall be furnished to Global for approval prior to the start of construction. All design fees shall be the responsibility of the builder/developer/Landlord. “As Built” drawings shall be provided for architectural structural, civil, electrical, plumbing, mechanical H.V.A.C., fire protection and landscaping shall be completed and full sets given to Global.
|
Clear Height:
|
36’ minimum clear height as measured 6” inside the first interior column line.
|
Exterior Walls:
|
Concrete tilt up construction.
|
Exterior Shell Finish:
|
Painted concrete panels with architectural reveals. Walls at office to have a minimum 9’ floor to ceiling store front glass (50 LF minimum). All glass to be high strength for sufficient weather protection.
|
Interior Shell Finish:
|
All interior warehouse walls (concrete, steel and drywall) painted white from floor to roof deck.
|
Truck Court:
|
Sixty feet (60) in front of every dock (and drive in) door to have an 8” reinforced concrete apron. Truck court shall be 135’-185’ truck court depth as per previously attached site plan Scheme 21.
|
Security Fencing:
|
Receiving truck (56 docks) court(s) to be fenced in (6’ high) with two automatic electronic sliding gates (Entrance/Exit). Prepare gate area for tenant supplied modular guard booth (~4’x6’) with electric (2-20 amp circuits), telephone, CCTV capabilities (conduits from guard booth location to building), and dual head pole mounted light. Eight (8) inch concrete filled pipe bollards (60” high) shall be supplied to protect both gates and four corners of guard booth (8 minimum). Gates also to be controlled from warehouse receiving office. Provide two sets of gates if truck courts need to be separated. Car parking will not be permitted within the truck court(s).
|
Warehouse Floor:
|
Warehouse slab shall be a minimum of 8” 4500 psi with vapor barrier supplied only under office areas at 4 corners of the Building. Warehouse slab shall be designed to handle a maximum load of 18,000 lbs (36’clear) per rack frame (each frame has two foot plates, 42” c-c, 6” X 6” X 3/8” footplate). The slab shall be sealed with two (2) coats of Lapidolith surface hardener or approved equal. Warehouse slab shall be finished to a FF35/FL25 specification (minimum).
|
Roof:
|
Premises B: 4-ply built up roof system included with R-19 white scrim sheet included in place of roof deck being painted white.
|
Truck Door Packages:
|
Provide truck/trailer dock locks for all dock doors, Kelley Truck Stop (Star 2 or Global approved equal). Docks to be 48” above grade, complete with manual 9’ x 10’ overhead door (30,000 lbs. capacity hydraulic levelers with electric activations and full range toe guards (Kelly aFX or Global approved equal), dock lights (LED lamps), protective bollards (or track guards) and dock bumpers (24” high).
Truck dock door seals (side pads with header curtain) shall be provided at 30 docks (chosen by Global).
Two additional O.H. doors setup for trash compactors.
|
Drive In Door:
|
Four (4) drive-in doors (two per cross-dock side) complete with motorized 12’ x 14’ overhead door & protective bollards shall be provided.
|
Overhead Doors:
|
Flush sectional insulated steel overhead doors with 24 gauge (minimum), hot dipped galvanized steel face panel (baked enamel finish coat). Panel thickness shall be a nominal 2”. Doors to have reinforcing ribs on each panel with reinforcing angle at bottom of door. Tracks shall be 3” minimum with full bearing angle connecting track to jamb. Provide interior lift handles and lock bar.
|
Warehouse:
|
Provide a complete ESFR fire protection system (per NFPA 2013 code) that will meet or exceed all factory mutual specifications for similar items currently stored (classified by FM Global as “unexpanded plastic non-carton”) in Global Equipment Company’s warehouse facility in Buford, GA. FM Global to approve fire protection system with all related cost to meet requirements to be at builder/ landlord expense (including but not limited to a fire pump and upgraded sprinkler heads). FM Global specs have been included per FM’s recommendation which including:
(a) 360 fusable links on smoke hatches,
(b) upgrade to K-25 heads,
(c) 2,500 gpm fire pump,
(d) seismic branch line bracing
(e) seismic gas shut-off,
(f) screwed metal fastening at building corners and perimeter of roof,
(g) upgrading of underground water line to 10”
(h) Fire System is being built on a design-build basis with information provided to FM Global
All FM Global specifications and requirements pre-approved by FM Global in its 10/29/14 and the still pending 11/17/14 correspondence to Landlord which will be the responsibility of the Landlord to conform with at its expense. Notwithstanding anything to the contrary herein, while Landlord is designing and constructing the Initial Improvements to meet FM Global’s standards as detailed in the above referenced letters, Tenant acknowledges and agrees that the Building is not meant to be a fully FM Global compliant building.
Extinguishers and hose stations included as required by code (based on Global rack layout 10/8/14 drawing).
|
Office Areas:
|
Semi-recessed chrome sprinkler head to provide 100% coverage of office space. In wall mounted extinguishers as required.
Include a FM200 fire suppression system for I.T. room (10’x18’x9’ high).
|
Fire Alarm:
|
Included if required by local, state or county code or any other agency having jurisdiction.
|
Warehouse Electrical Distribution:
|
In addition to warehouse lighting panels (480/277 volt) and low voltage distribution panels (208/120 volt for dock levelers, general use convenience outlets, quad outlets between docks for dock lights, etc.) the following panels shall be provided exclusively for Global’s warehouse operation use (no lighting or HVAC units):
· Two (2) - 200 amp 480/277 volt/ 3 phase panel with 200 amp-208/120 volt/ 3 phase sub panel (42 circuit) shall be provided in separate locations anywhere in the building as indicated by Global.
These panels will be provided for Global’s use.
· One (1) - 400 amp 480/277 volt / 3 phase panel with 200 amp sub panel 208/120 volt/ 3 phase (84 circuit each) shall be provided by the warehouse office. HVAC and lighting for warehouse office may be powered from this panel.
· All additional panels provided by electrical contractor to include a minimum of 30% “spare” capacity.
Electrical contractor will include the following distribution from above panels (labor and materials):
· 30 - Convenience quad outlets 120volt/ 20amp dedicated and located in the warehouse by Global.
· 100 amp/480V/3 PH fused disconnect for a tenant provided conveyor panel (located in 60’ from dock of building x 200 ft from shipping office).
· 1 - 30 amp/480V/3 PH fused disconnect for a tenant provided air compressors (located in 60’ from dock of building x 100 ft from building side wall).
· 20 – Global supplied fork lift battery chargers (480 volt). These chargers to be mounted on Global supplied and installed racks (fed from 400 amp panel listed above).
· 2 - Electric power hook up shall be provided (480 volt/3 phase) for tenant supplied trash compactors.
Note: Each interior dock light shall be 120 volt and use a quad outlet for power located next to each dock door for maintenance use.
|
Warehouse Lighting:
|
High performance high bay 277 volt fluorescent fixtures with (T-5 lamps) and electronic instant start ballasts (program ready) with optically efficient reflectors and individual motion sensors (aisle occupancy). Fixtures wired with relock and controlled by contactors (switches by warehouse entrance) to provide 30 FC minimum @ 60” AFF. All fixtures to be mounted between roof joists to avoid contact with racking systems and pallet placement and retrieval (this applies to all areas throughout the warehouse (racked and staging). Fixtures to be @ 36’ A.F.F. for 36’ clear height building. One lighting contactor switch to turn on/off lighting shall be provided by warehouse office entrance.
· Fixtures to be on a 18’8”centers (three rows per 56’bay) going the entire length of the building x the dimension required to obtain 30 FC (@60” AFF) in a 120” pallet rack aisle (for racked areas – see attached plan for pallet rack layout)
· 18’8” x the dimension required to obtain 30 FC (@60” AFF) in an open staging area (60 feet from docks X length of building X both sides).
If emergency lighting is required by code at each pallet rack aisle entry, builder/landlord/ GC shall include at no additional cost based on rack layout supplied by Global dated 10/8/14.
|
Shipping Office Electrical Distribution:
|
· 20 - duplex wall outlets for general use
· 20 - Dedicated 20 amp duplex outlets (lunchroom vending machines, copiers, Gym Equipment, etc.).
|
I.T. Room Electrical:
|
An independently derived 100 amp 208/120 volt / 3 phase (42 circuit) panel to be located in the I.T. room. The use of this panel will be exclusively for Global’s computer system and telephone system. A 100 amp / 1 phase / 208 volt fused disconnect shall be included for tenant supplied UPS and by pass switch located in the I.T. room (hook up included). In addition to general use duplex outlets located on 4 walls there shall be two dedicated 120 volt quad outlet mounted on a 4’x8’ fire treated sheet of painted plywood (location by Global). There shall be two (2) 4” conduits diversified from different street data carrier access points with pull string installed from building data entry point to this plywood as well as two (2) 4” conduits from this plywood to the open ceiling plenum outside of the I.T. room and two (2) 4” conduits from this plywood to warehouse (ceiling) for Global Equipment Company’s network wiring points terminating in the warehouse. A 6 gauge copper ground cable shall be installed from building ground to a ground lug located on the above plywood. Conduits for building fiber and other data/telephone connectivity to be provided from the suppliers’ street connection point to data room (IT room) within the warehouse shipping office.
|
WH Office Lighting:
|
Office lighting to be 2x2 LED (2x4 warehouse offices) (3500K) recessed lay in troffer basket style with white perforated diffuser supplied by Juno Lighting Group (S2X2BP-45-35-U-WH) or approved equal. Fixtures in conference rooms to be on dimmable switches. Break room controlled by PIR’s. Light fixtures grid shall start a maximum of 2’ from any wall. Office lighting shall have a 50 foot candle minimum throughout the office area. One lighting contactor switch to turn on/off lighting shall be provided by office entrance.
|
WH Office HVAC:
|
Builder/Developer will furnish and install roof top HVAC units with a standard system of distribution ducts. Supply registers and diffuses, return grills and associated fixtures servicing the warehouse shipping office area (4800 sq. ft.) and receiving office area (637 sq. ft.). The design criteria shall be as to handle the heat load of the conditions of the building and 1 person per 60 sq. ft. All units shall be designed with a (7) day programmable stat. Two separate 3 ton A/C cool only split ductless units (Mitsubishi or approved equal) shall be provided for the I.T. room, supplied with a low ambient control module with auto restart.
|
Warehouse Heat:
|
Reznor gas (natural) fired unit heaters provided throughout the warehouse to maintain building at 60 degrees (F) minimum @ 60” A.F.F. These units shall not be located in pallet racking areas as per plan dated 10/8/14.
|
Warehouse Ventilation:
|
Warehouse roof top evaporative coolers to provide three (3) air rotations per hour (minimum) controlled by 7 day (24 hr.) timers.
|
Warehouse Cooling:
|
One (1) evaporative cooling unit (swamp cooler) shall be provided for every 10,000 S.F. of warehouse space or as recommended by the design/build mechanical contractor.
|
Warehouse Forklift Charging Ventilation:
|
If required by code, an exhaust system shall be provided over the forklift battery charging area for a minimum of 20 pieces of equipment (spaced ~5’ on center) located by the warehouse office.
|
Warehouse Office:
|
4,800 SF @ 9’0” ceiling height including lunchroom and restroom to support forty (40) employees at a time. Balance of space to be general offices and meeting rooms as
|
Shipping Office:
|
637 SF including two (2) small restrooms (middle of shipping docks).
|
Ceilings:
|
Ceilings shall be 9’0” A.F.F. All acoustical ceilings in 5400 SF WH (and remote shipping office) shall use standard commercial grade grid and ceiling tiles. All ceilings shall be insulated with a minimum of R-19 fiber glass batting for sound and thermal protection. ALL facility bathroom ceilings shall be painted drywall.
|
Floor Coverings:
|
Gym plus 5 offices to have carpet tile (@$30/ S.Y.) and vinyl base, all other warehouse rooms shall be VCT with 4” vinyl base. Restrooms to have ceramic tile floors.
|
Wall Finishes:
|
Remote receiving (647 S.F.) WH office areas to be painted concrete block perimeter walls to 10’0” nominal height) and drywall (interior walls) with two (2) coats of latex paint with semi-gloss or egg finish.
Shipping office (4800 S.F.) shall have a full height (slab to roof) drywall (5/8” drywall full height on warehouse side) demising wall (painted white) and insulated slab to roof for dust and noise protection. All interior walls to be drywall with two (2) coats of latex paint with semi-gloss or egg finish.
All private offices, conference walls to extend 6” above acoustical ceilings. All private offices and bath rooms to be insulated for sound retention.
|
Interior Doors and
Windows:
|
All office doors shall be 7’0” high solid core with birch veneer finished with stain and clear satin polyurethane (factory finish). All frames to be painted metal. Private offices shall have full height (7’) side lites (nominal 16” wide) built into metal door jambs. All door hardware shall be stainless steel. Locksets shall be ADA approved stainless steel lever type as manufactured by Sargent (series 10) or approved equal with IC cores. All private offices shall have keyed lock entry. Master keying shall be included for all building locks and keying schedule approved by Global. All interior exit and entrance doors, opening into common areas shall include 5” X 20” glass windows mounted in door and include commercial grade door closers. All warehouse egress doors will be provided with “delay exit” panic hardware with alarm if permitted by code. All exterior office windows and interior sales office door side lites to include Levelor blinds or approved equal.
Per Scheme 21 and Global plan dated 10/8/14
|
WASHROOMS Warehouse Offices:
|
All fixtures shall be American Standard or equal. Fixture count for men’s rooms is 3T, 3U, 3S plus 2 showers (including H.C.). Fixture count for women’s rooms is 5T, 3S plus 2 showers (including H.C.). Three (3) receiving area bath room shall be located docks as per Global’s plan dated 10/8/14. (Two (2) Men’s room to have 1T,1U,1S; Women’s room to have 1T,1S). One (1) electric water cooler shall be provided on common restroom wall for each men/women combo and one for warehouse office lunchroom (2 total). All interior walls to be drywall floor to ceiling grid. Washroom plumbing “wet” walls and floors shall be commercial grade ceramic tile with floor drains. A janitors closet (2 total) shall be provided with slop sink and floor drain. Washrooms partitions shall be floor mounted. Provide three (3) hose bibs (cold water) at shipping and receiving docks and battery charging station (outside of warehouse office). Break rooms (2) to include 12’ “solid surface” counter (base and wall cabinets), sink and cold water provisions for ice maker, coffee machine and refrigerator (equipment by Global).
|
Utilities:
|
All utilities (electric, gas & water/sewer) shall be delivered to the premises and separately metered as necessary. Tenant shall be responsible for supplier phone/data connectivity contracts. (See I.T. Room Electrical subheading) Landlord shall provide required conduits and path to Global’s I.T. room as shown on plan dated 10/8/14.
|
Gas Service: |
Natural gas supplied to all HVAC units.
|
Electric Service:
|
Nevada Energy & Power is provider with electric main service on south side of Building.
|
Exterior Lighting:
|
Wall packs, pole lights and building soffit lights included and to provide a minimum of 2 FC @ office entry and a minimum of 1 FC @ all paved areas and building exits. These lights to be LED technology. Electrical provisions shall be included for building mounted signage (2) and monument sign (provided by builder/landlord) with exterior lighting. Building mounted signage by tenant with electric hookup by builder / developer.
|
Paving:
|
Full concrete aprons, curbs, gutters as well as truck and auto areas is included.
|
Signage:
|
Tenant requests that Landlord, at its cost and expense, provide the following signage:
· Building face sign ($15,000 allowance).
· Dock Door decals (to be included within the $15,000 allowance).
Note: all signage is subject to the terms of the Prologis Lease Agreement and all applicable city, county and state regulations and codes.
|
Notes:
|
Tenant shall have the right to observe, review and audit all aspects of the construction process but shall not materially impact or delay the construction process. All final design and construction decisions shall be mutually agreed upon between Landlord and Tenant. Tenant shall be provided access for Early Access for racking and equipment setup, installation of its material handling equipment and IT cabling April 1, 2015.
(Note - The only allowance provided is for $15,000 signage allowance which tenant will control for its signage needs)
|
GUARANTOR:
|
||
Global Industrial Holdings LLC,
|
||
A Delaware limited liability company
|
||
By:
|
||
Name:
|
||
Title:
|
Page
|
||
ARTICLE I
|
DEFINITIONS
|
1
|
1.1
|
Defined Terms
|
1
|
ARTICLE II
|
PURCHASE AND SALE; CLOSING; PURCHASE PRICE
|
12
|
2.1
|
Purchase and Sale
|
12
|
2.2
|
The Closing
|
12
|
2.3
|
Consideration
|
12
|
2.4
|
Purchase Price Adjustment
|
13
|
2.5
|
Effective Time of Purchase
|
16
|
2.6
|
Tax Treatment
|
16
|
2.7
|
Allocation
|
16
|
ARTICLE III
|
REPRESENTATIONS AND WARRANTIES OF THE SELLER
|
17
|
3.1
|
Seller Organization and Power
|
17
|
3.2
|
Purchased Equity
|
17
|
3.3
|
Seller Litigation
|
17
|
3.4
|
Enforceability
|
17
|
3.5
|
No Violation
|
17
|
3.6
|
No Acquisitions
|
17
|
3.7
|
Organizational Matters; Equity
|
17
|
3.8
|
Third Party Consents
|
20
|
3.9
|
Financial Statements
|
20
|
3.10
|
Tax Matters
|
20
|
3.11
|
Absence of Certain Changes
|
23
|
3.12
|
Assets
|
24
|
3.13
|
Bank Accounts
|
25
|
3.14
|
Litigation
|
25
|
3.15
|
Compliance With Laws
|
26
|
3.16
|
Insurance
|
27
|
3.17
|
Material Contracts
|
27
|
3.18
|
Employee Matters
|
29
|
Page
|
||
3.19
|
Employee Benefit Plans
|
31
|
3.20
|
Environmental Matters
|
32
|
3.21
|
Proprietary Rights
|
34
|
3.22
|
Brokerage
|
35
|
3.23
|
Seller Contracts and Services; Related Party Transactions; Intercompany Indebtedness
|
35 |
3.24
|
Inventory
|
36
|
3.25
|
Accounts Receivable
|
36
|
3.26.
|
Customers and Suppliers
|
36
|
3.27
|
No Subsidiaries
|
36
|
3.28
|
Books and Records
|
36
|
3.29
|
Customer Lists
|
37
|
3.30
|
No Other Representations and Warranties
|
37
|
ARTICLE IV
|
REPRESENTATIONS AND WARRANTIES OF THE BUYER |
37
|
4.1
|
Organization
|
37
|
4.2
|
No Violation
|
37
|
4.3
|
Authority; Validity
|
37
|
4.4
|
Third Party Consents
|
38
|
4.5
|
Investment/Operational Intent
|
38
|
4.6
|
Knowledge
|
38
|
4.7
|
Financing
|
38
|
4.8
|
Legal Proceedings
|
38
|
ARTICLE V
|
COVENANTS | 39 |
5.1
|
Access to Information and Records
|
39
|
5.2
|
Conduct of Business Pending the Closing
|
39
|
5.3
|
Efforts to Close
|
40
|
5.4
|
Exclusivity
|
40
|
5.5
|
Publicity
|
41
|
5.6
|
Notice of Certain Events
|
41
|
Page
|
||
5.7
|
Disclosure Schedule
|
41
|
5.8
|
Indemnification of Directors, Officers and Others
|
42
|
5.9
|
Retention of Records
|
43
|
5.10
|
Benefits
|
43
|
5.11
|
Employee Benefit Plans
|
44
|
5.12
|
Tax Matters
|
46
|
5.13
|
Escheatment Cooperation
|
49
|
5.14
|
Indebtedness
|
49
|
5.15
|
Insurance
|
49
|
5.16
|
Conflicts and Privilege
|
49
|
5.17
|
Non-competition; Non-solicitation
|
50
|
5.18
|
Transfer of Milwaukee Property
|
51
|
5.19
|
Closing Conditions
|
51
|
5.20
|
Management Reports
|
51
|
5.21
|
Related Party Transactions
|
52
|
5.22
|
Intercompany Indebtedness
|
52
|
5.23
|
Release of Guarantees
|
52
|
5.24
|
Quad Agreement
|
52
|
5.25
|
Current Employees
|
52
|
5.26
|
Employment Records
|
53
|
5.27
|
Merchants
|
53
|
ARTICLE VI
|
CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATIONS |
53
|
6.1
|
Representations and Warranties True on the Closing Date
|
53
|
6.2
|
Compliance With Agreement
|
53
|
6.3
|
Absence of Litigation
|
53
|
6.4
|
Consents and Approvals
|
53
|
6.5
|
Employment of Executives
|
53
|
6.6
|
Material Adverse Effect
|
54
|
6.7
|
Related Party Transactions
|
54
|
Page
|
||
6.8
|
Documents to be Delivered by the Seller
|
54
|
6.9
|
Cybersource
|
55
|
6.10
|
Corporate Minute Books and Stock Records
|
55
|
6.11
|
Bank Accounts
|
55
|
6.12
|
Seller Employees
|
55
|
ARTICLE VII
|
CONDITIONS PRECEDENT TO THE SELLER’S OBLIGATIONS |
56
|
7.1
|
Representations and Warranties True on the Closing Date
|
56
|
7.2
|
Compliance With Agreement
|
56
|
7.3
|
Absence of Litigation
|
56
|
7.4
|
Documents to be Delivered by the Buyer
|
56
|
ARTICLE VIII
|
SURVIVAL; INDEMNIFICATION |
57
|
8.1
|
Survival
|
57
|
8.2
|
General Indemnification by the Seller
|
57
|
8.3
|
Indemnification by the Buyer
|
59
|
8.4
|
Procedures for Indemnification
|
59
|
8.5
|
Procedures for Third-Party Claims
|
60
|
8.6
|
Right to Cure; Mitigation
|
60
|
8.7
|
Tax Treatment of Indemnification
|
61
|
8.8
|
Exclusive Remedy
|
61
|
8.9
|
limitation of liability
|
61
|
ARTICLE IX
|
TERMINATION OF AGREEMENT |
61
|
9.1
|
Causes
|
61
|
9.2
|
Effect of Termination
|
62
|
9.3
|
Right to Proceed
|
62
|
ARTICLE X
|
DISPUTE RESOLUTION
|
62
|
10.1
|
Dispute
|
62
|
10.2
|
Process
|
63
|
10.3
|
Negotiations
|
63
|
10.4
|
Mediation
|
63
|
Page
|
||
10.5
|
Submission to Adjudication
|
63
|
10.6
|
General
|
64
|
ARTICLE XI
|
MISCELLANEOUS |
65
|
11.1
|
Further Assurance
|
65
|
11.2
|
Assignment
|
65
|
11.3
|
Law Governing Agreement; Jurisdiction
|
65
|
11.4
|
Amendment and Modification
|
65
|
11.5
|
Notice
|
65
|
11.6
|
Expenses
|
66
|
11.7
|
Entire Agreement; Binding Effect
|
66
|
11.8
|
Counterparts
|
67
|
11.9
|
Headings
|
67
|
11.10
|
No Strict Construction
|
67
|
11.11
|
No Reliance
|
67
|
11.12
|
Severability
|
67
|
11.13
|
Other Definitional Provisions
|
67
|
11.14
|
Specific Performance
|
68
|
11.15
|
Acknowledgment by the Buyer
|
68
|
Exhibit A:
|
Form of Transition Services Agreement
|
Exhibit B:
|
Sample Calculation of Working Capital
|
Exhibit C:
|
Allocation
|
Exhibit D:
|
Form of Milwaukee Office Lease
|
Schedule 3.5:
|
No Violation
|
|
Schedule 3.6:
|
No Acquisitions
|
|
Schedule 3.7(a):
|
Foreign Qualifications
|
|
Schedule 3.8
|
Third Party Consents
|
|
Schedule 3.9:
|
Financial Statements
|
|
Schedule 3.10:
|
Tax Matters
|
|
Schedule 3.11:
|
Absence of Certain Changes
|
|
Schedule 3.12(a)(i)
|
Liens
|
|
Schedule 3.12(a)(ii)
|
Exceptions to Owned Property
|
|
Schedule 3.12(c):
|
Real Property
|
|
Schedule 3.12(d):
|
Location of Personal Property
|
|
Schedule 3.12(e):
|
Condition of Personal Property
|
|
Schedule 3.12(f)
|
Subleases
|
|
Schedule 3.13:
|
Bank Accounts
|
|
Schedule 3.14:
|
Litigation
|
|
Schedule 3.15(a):
|
Compliance with Laws
|
|
Schedule 3.15(b):
|
Licenses and Permits
|
|
Schedule 3.16:
|
Insurance
|
|
Schedule 3.17(a):
|
Material Contracts
|
|
Schedule 3.17(b):
|
Exceptions to Material Contracts
|
|
Schedule 3.18(a):
|
Labor Disputes
|
|
Schedule 3.18(b):
|
Employment Compliance
|
|
Schedule 3.18(c):
|
Government Contract Matters
|
|
Schedule 3.18(e):
|
Employees
|
|
Schedule 3.18(f):
|
Compensation
|
|
Schedule 3.18(g):
|
Employment Litigation
|
|
Schedule 3.19(a):
|
Employee Benefit Plans
|
|
Schedule 3.19(b):
|
Prohibited Transactions
|
|
Schedule 3.19(c):
|
Benefits Compliance
|
|
Schedule 3.19(d):
|
Additional Payments due to Transaction
|
|
Schedule 3.19(e):
|
Benefits to Former Employees
|
|
Schedule 3.20(a):
|
Environmental Claims
|
|
Schedule 3.20(b):
|
Hazardous Substances
|
|
Schedule 3.20(d):
|
Environmental Orders
|
|
Schedule 3.21(a):
|
Intellectual Property
|
|
Schedule 3.21(b)(i):
|
Intellectual Property Agreements
|
|
Schedule 3.21(b)(ii):
|
Software Agreements
|
Schedule 3.21(c):
|
Intellectual Property Ownership
|
|
Schedule 3.21(g):
|
Intellectual Property Actions
|
|
Schedule 3.21(h):
|
Social Media Accounts
|
|
Schedule 3.22:
|
Brokerage
|
|
Schedule 3.23(a):
|
Seller Contracts and Services
|
|
Schedule 3.23(b):
|
Related Party Transactions
|
|
Schedule 3.23(c):
|
Intercompany Indebtedness
|
|
Schedule 3.26(a):
|
Material Customers
|
|
Schedule 3.26(b):
|
Material Suppliers
|
|
Schedule 3.27:
|
Subsidiaries
|
|
Schedule 5.21:
|
Related Party Transactions
|
|
Schedule 5.23:
|
Release of Guarantees
|
|
Schedule 5.26:
|
TAKKT and Avenue Employees
|
|
Schedule 6.12:
|
Seller Employees
|
By: /s/ Dr. Felix Zimmerman
|
/s/ Dr. Claude Tomaszewski
|
Name: Dr. Felix Zimmerman
|
Name: Dr. Claude Tomaszewski
|
Its: Chairman
|
Its: CFO
|
THE SELLER:
|
|
TAKKT AMERICA HOLDING, INC.
|
|
By: /s/ Dr. Felix Zimmerman
|
|
Name: Dr. Felix Zimmerman
|
|
Its: Chairman
|
|
THE BUYER:
|
|
GLOBAL INDUSTRIAL HOLDINGS LLC
|
|
By: /s/ Lawrence Reinhold
|
|
Name: Lawrence Reinhold
|
|
Its: Vice President
|
|
THE MEXICAN BUYER:
|
|
GLOBAL INDUSTRIAL MEXICO HOLDINGS INC.
|
|
By: /s/ Robert Dooley
|
|
Name:Robert Dooley
|
|
Its: President
|
SUBSIDIARIES OF SYSTEMAX INC.
as of March 12, 2015
|
|
Company Name
|
Jurisdiction
|
Afligo Marketing Services Inc.
|
USA (Florida)
|
Avenue Industrial Supply Co. Ltd
|
Canada
|
C&H Distributors, LLC
|
USA (Delaware)
|
C&H Productos Industriales, S. de R.L. de C.V.
|
Mexico
|
C&H Service, LLC
|
USA (Delaware)
|
CircuitCity.com Inc.
|
USA (Delaware)
|
Distribución Industrial Globales, S. de R.L. de C.V.
|
Mexico
|
Global Computer Supplies Inc.
|
USA (New York)
|
Global Directmail B.V.
|
Netherlands
|
Global Equipment Company Inc.
|
USA (New York)
|
Global Gov/Ed Solutions Inc.
|
USA (Delaware)
|
Global Industrial Canada Inc.
|
Canada
|
Global Industrial Distribution Inc.
|
USA (Delaware)
|
Global Industrial Government Solutions Inc.
|
USA (Delaware)
|
Global Industrial Holdings LLC
|
USA (Delaware)
|
Global Industrial Marketplace Inc.
|
USA (Delaware)
|
Global Industrial Mexico Holdings II Inc.
|
USA (Delaware)
|
Global Industrial Mexico Holdings Inc.
|
USA (Delaware)
|
Global Industrial Services Inc.
|
USA (Delaware)
|
I-Com Software Eurl
|
France
|
Industrial Supplies.Com, LLC
|
USA (Delaware)
|
Infotel Distributors Inc.
|
USA (Delaware)
|
Inmac Wstore S.A.S.
|
France
|
Misco AB
|
Sweden
|
Misco America Inc.
|
USA (Florida)
|
Misco Computer Supplies Limited (dormant)
|
United Kingdom
|
Misco European Services Limited (dormant)
|
United Kingdom
|
Misco Germany Inc.
|
USA (New York)
|
Misco Iberia Computer Supplies S.L.
|
Spain
|
Misco Ireland Limited
|
Ireland
|
Misco Nederland B.V.
|
Netherlands
|
Misco Solutions B.V.
|
Netherlands
|
Misco UK Limited
|
United Kingdom
|
New SAH Corp.
|
USA (Delaware)
|
Nexel Industries Inc.
|
USA (New York)
|
OnRebate.com Inc.
|
USA (Delaware)
|
Papier Catalogues Inc.
|
USA (New York)
|
Products for Industry LLC
|
USA (Delaware)
|
Rebate Holdings LLC
|
USA (Delaware)
|
Simply Computers Limited (dormant)
|
United Kingdom
|
Software Licensing Center Inc.
|
USA (Florida)
|
Streak Products Inc.
|
USA (Delaware)
|
Systemax Business Services K.F.T.
|
Hungary
|
Systemax EMEA Technology Group Limited
|
United Kingdom
|
Systemax Europe Sarl
|
Luxembourg
|
Systemax Global Solutions Inc.
|
USA (Delaware)
|
Systemax Italy S.R.L.
|
Italy
|
Systemax OY
|
Finland
|
Systemax Polska Sp. Z.o.o.
|
Poland
|
Systemax Puerto Rico Inc.
|
USA (Puerto Rico)
|
SYX Distribution Inc.
|
USA (Delaware)
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SYX North American Tech Holdings LLC
|
USA (Delaware)
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SYX S.A. Holdings II Inc.
|
USA (Delaware)
|
SYX S.A. Holdings Inc.
|
USA (Delaware)
|
SYX Services Inc.
|
USA (Delaware)
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SYX Services Private Limited
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India
|
Target Advertising Inc.
|
USA (Delaware)
|
Tek Serv Inc.
|
USA (Delaware)
|
TigerDirect Inc.
|
USA (Florida)
|
TigerDirect Retail Services Inc.
|
USA (Delaware)
|
TigerDirect.ca Inc.
|
Canada
|
Wstore Europe S.A.S.
|
France
|
Wstore UK (dormant)
|
United Kingdom
|
|
(1)
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Registration Statement (Form S-8 No. 333-21489), pertaining to the 1995 Stock Plan for Non-Employee Directors,
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(2)
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Registration Statement (Form S-8 No. 333-12491), pertaining to the 1995 Long-Term Stock Incentive Plan,
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(3)
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Registration Statement (Form S-8 No. 333-111618), pertaining to the 1999 Long-Term Stock Incentive Plan, and
|
|
(4)
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Registration Statement (Form S-8 No. 333-176264), pertaining to the 2010 Long-Term Incentive Plan;
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/s/ Ernst & Young LLP
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New York, New York
|
March 12, 2015
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Date: March 12, 2015
|
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/s/ RICHARD LEEDS
|
|
Richard Leeds, Chief Executive Officer
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Date: March 12, 2015
|
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/s/ LAWRENCE P. REINHOLD
|
|
Lawrence P. Reinhold, Chief Financial Officer
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Dated: March 12, 2015
|
|
/s/ RICHARD LEEDS
|
|
Richard Leeds, Chief Executive Officer
|
Dated: March 12, 2015
|
|
/s/ LAWRENCE P. REINHOLD
|
|
Lawrence P. Reinhold, Chief Financial Officer
|
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