Delaware
(State or Other Jurisdiction
of Incorporation)
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1-13792
(Commission
File Number)
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11-3262067
(IRS Employer
Identification No.)
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CRF 240.13e-4(c)) |
Exhibit
Number
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Description
|
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99.1
|
Press Release of Systemax Inc., dated May 5, 2015, regarding financial results for the first quarter ended March 31, 2015.
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SYSTEMAX INC.
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By: /s/ Eric Lerner
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Name: Eric Lerner
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Title: Senior Vice President
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99.1 | Press Release of Systemax Inc., dated May 5, 2015, regarding financial results the first quarter ended March 31, 2015. |
Performance Summary
(U.S. dollars in millions, except per share data)
|
||||||||
Highlights
|
Quarter Ended
March 31,
|
|||||||
GAAP Results
|
2015
|
2014
|
||||||
Net sales
|
$
|
785.8
|
$
|
873.4
|
||||
Gross profit
|
$
|
107.8
|
$
|
127.9
|
||||
Gross margin
|
13.7
|
%
|
14.6
|
%
|
||||
Operating income (loss)
|
$
|
(19.5
|
)
|
$
|
(1.3
|
)
|
||
Operating margin
|
(2.5
|
)%
|
(0.1
|
)%
|
||||
Net income (loss)
|
$
|
(28.6
|
)
|
$
|
(3.0
|
)
|
||
Diluted net income (loss) per share
|
$
|
(0.77
|
)
|
$
|
(0.08
|
)
|
||
Non-GAAP Results*
|
||||||||
Adjusted operating income (loss)
|
$
|
(8.2
|
)
|
$
|
2.6
|
|||
Adjusted operating margin
|
(1.0
|
)%
|
0.3
|
%
|
· | Consolidated sales declined 10.0% to $785.8 million in U.S. dollars. On a constant currency basis and excluding both the June 2014 acquisition of SCC Services BV in the Netherlands (renamed Misco Solutions) and the January 2015 acquisition of the Plant Equipment Group (P.E.G.) in North America, sales declined 9.2%. |
· | Industrial Product Group sales grew 23.1% to $158.9 million in U.S. dollars. On a constant currency basis and excluding P.E.G., sales grew 10.8%. |
· | EMEA Technology Group sales declined 15.6% to $272.6 million in U.S. dollars. On a constant currency basis and excluding Misco Solutions, sales declined 9.8%. |
· | North America Technology Group (NATG) sales declined 16.0% to $352.8 million in U.S. dollars. On a constant currency basis sales declined 15.0%. |
· | Non-GAAP operating loss was $8.2 million compared to income of $2.6 million last year. Excluding Misco Solutions and P.E.G., non-GAAP operating results would have been a loss of $9.0 million. GAAP operating loss was $19.5 million compared to a loss of $1.3 million last year. |
· | Non-GAAP diluted net loss per share was $(0.27). GAAP diluted net loss per share was $(0.77). |
Supplemental Business Unit Sales Summary
(in millions)
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||||||||||||||||||||
Business Unit
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Quarter Ended March 31,
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|||||||||||||||||||
2015
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% of Sales
|
Change y/y
|
2014
|
% of Sales
|
||||||||||||||||
Industrial Products
|
$
|
158.9
|
20.2
|
%
|
23.1
|
%
|
$
|
129.1
|
14.8
|
%
|
||||||||||
Technology Products- EMEA
|
$
|
272.6
|
34.7
|
%
|
(15.6
|
)%
|
$
|
323.0
|
37.0
|
%
|
||||||||||
Technology Products- NA
|
$
|
352.8
|
44.9
|
%
|
(16.0
|
)%
|
$
|
419.8
|
48.0
|
%
|
||||||||||
Corporate and Other
|
$
|
1.5
|
0.2
|
%
|
-
|
%
|
$
|
1.5
|
0.2
|
%
|
||||||||||
Consolidated Sales
|
$
|
785.8
|
100.0
|
%
|
(10.0
|
)%
|
$
|
873.4
|
100.0
|
%
|
Supplemental Business Unit Operating Results Summary
(in millions)
|
||||||||||||||||
GAAP Operating Income (Loss)
|
||||||||||||||||
Business Unit
|
Quarter Ended March 31,
|
|||||||||||||||
2015
|
Margin
|
2014
|
Margin
|
|||||||||||||
Industrial Products
|
$
|
9.7
|
6.1
|
%
|
$
|
9.7
|
7.5
|
%
|
||||||||
Technology Products- EMEA
|
$
|
(4.8
|
)
|
(1.8
|
)%
|
$
|
1.6
|
0.5
|
%
|
|||||||
Technology Products- NA
|
$
|
(19.7
|
)
|
(5.6
|
)%
|
$
|
(8.2
|
)
|
(2.0
|
)%
|
||||||
Corporate and Other
|
$
|
(4.7
|
)
|
NM
|
$
|
(4.4
|
)
|
NM
|
||||||||
Consolidated Operating Income (Loss)
|
$
|
(19.5
|
)
|
(2.5
|
)%
|
$
|
(1.3
|
)
|
(0.1
|
)%
|
||||||
Non-GAAP* Operating Income (Loss)
|
||||||||||||||||
Industrial Products
|
$
|
10.4
|
6.5
|
%
|
$
|
10.3
|
8.0
|
%
|
||||||||
Technology Products- EMEA
|
$
|
(4.4
|
)
|
(1.6
|
)%
|
$
|
3.6
|
1.1
|
%
|
|||||||
Technology Products- NA
|
$
|
(9.8
|
)
|
(2.8
|
)%
|
$
|
(7.2
|
)
|
(1.7
|
)%
|
||||||
Corporate and Other
|
$
|
(4.4
|
)
|
NM
|
$
|
(4.1
|
)
|
NM
|
||||||||
Consolidated Operating Income (Loss)
|
$
|
(8.2
|
)
|
(1.0
|
)%
|
$
|
2.6
|
0.3
|
%
|
Quarter Ended
March 31, |
||||||||
(unaudited)
|
||||||||
2015
|
2014
|
|||||||
Net sales
|
$
|
785.8
|
$
|
873.4
|
||||
Cost of sales
|
678.0
|
745.5
|
||||||
Gross profit
|
107.8
|
127.9
|
||||||
Gross margin
|
13.7
|
%
|
14.6
|
%
|
||||
Selling, general and administrative expenses
|
122.0
|
126.8
|
||||||
Special charges
|
5.3
|
2.4
|
||||||
Operating income (loss)
|
(19.5
|
)
|
(1.3
|
)
|
||||
Operating margin
|
(2.5
|
)%
|
(0.1
|
)%
|
||||
Interest and other expense, net
|
7.4
|
0.8
|
||||||
Income (loss) before income taxes
|
(26.9
|
)
|
(2.1
|
)
|
||||
Provision for (benefit from) income taxes
|
1.7
|
0.9
|
||||||
Net income (loss)
|
$
|
(28.6
|
)
|
$
|
(3.0
|
)
|
||
Net margin
|
(3.6
|
)%
|
(0.3
|
)%
|
||||
Net income (loss) per common share:
|
||||||||
Basic
|
$
|
(0.77
|
)
|
$
|
(0.08
|
)
|
||
Diluted
|
$
|
(0.77
|
)
|
$
|
(0.08
|
)
|
||
Weighted average common and common equivalent shares:
|
||||||||
Basic
|
37.1
|
37.0
|
||||||
Diluted
|
37.1
|
37.0
|
March 31,
2015 |
December 31,
2014 |
|||||||
(Unaudited)
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
132.9
|
$
|
165.0
|
||||
Accounts receivable, net
|
322.1
|
355.5
|
||||||
Inventories
|
272.7
|
289.9
|
||||||
Prepaid expenses and other current assets
|
17.2
|
17.6
|
||||||
Total current assets
|
744.9
|
828.0
|
||||||
Property, plant and equipment, net
|
40.5
|
41.2
|
||||||
Goodwill, intangibles and other assets
|
34.7
|
25.7
|
||||||
Total assets
|
$
|
820.1
|
$
|
894.9
|
||||
Current liabilities:
|
||||||||
Short-term debt
|
$
|
2.3
|
$
|
2.7
|
||||
Accounts payable and accrued expenses
|
474.9
|
513.2
|
||||||
Total current liabilities
|
477.2
|
515.9
|
||||||
Long-term debt
|
0.8
|
0.9
|
||||||
Other liabilities
|
15.8
|
18.5
|
||||||
Shareholders’ equity
|
326.3
|
359.6
|
||||||
Total liabilities and shareholders’ equity
|
$
|
820.1
|
$
|
894.9
|
Quarter Ended
March 31 |
||||||||
2015
|
2014
|
|||||||
Industrial Products
|
$
|
9.7
|
$
|
9.7
|
||||
Technology Products- EMEA
|
(4.8
|
)
|
1.6
|
|||||
Technology Products- NA
|
(19.7
|
)
|
(8.2
|
)
|
||||
Corporate and Other
|
(4.7
|
)
|
(4.4
|
)
|
||||
GAAP operating income (loss)
|
(19.5
|
)
|
(1.3
|
)
|
||||
Non-GAAP adjustments:
|
||||||||
Industrial Products:
|
||||||||
Integration Costs (1)
|
0.4
|
-
|
||||||
Stock based and other special compensation(2)
|
0.3
|
0.6
|
||||||
Total Non-GAAP Adjustments: Industrial Products
|
0.7
|
0.6
|
||||||
Technology Products- EMEA
|
||||||||
Severance and other reorganization related charges
|
-
|
1.7
|
||||||
Asset impairment charges(3)
|
0.3
|
-
|
||||||
Stock based compensation
|
-
|
0.1
|
||||||
Intangible asset amortization
|
0.1
|
0.2
|
||||||
Total Non-GAAP Adjustments: Technology Products EMEA
|
0.4
|
2.0
|
||||||
Technology Products-NA:
|
||||||||
Severance and other reorganization related charges (4)
|
8.0
|
-
|
||||||
Asset impairment charges (5)
|
0.3
|
-
|
||||||
Investigation costs(6)
|
1.6
|
0.6
|
||||||
Stock based compensation
|
-
|
0.1
|
||||||
Intangible asset amortization
|
-
|
0.3
|
||||||
Total Non-GAAP Adjustments: Technology Products NA
|
9.9
|
1.0
|
||||||
Corporate and Other:
|
||||||||
Stock based compensation
|
0.3
|
0.3
|
||||||
Total Non-GAAP Adjustments: Corporate and Other
|
0.3
|
0.3
|
||||||
Industrial Products
|
10.4
|
10.3
|
||||||
Technology Products- EMEA
|
(4.4
|
)
|
3.6
|
|||||
Technology Products- NA
|
(9.8
|
)
|
(7.2
|
)
|
||||
Corporate and Other
|
(4.4
|
)
|
(4.1
|
)
|
||||
Non-GAAP operating income (loss)
|
$
|
(8.2
|
)
|
$
|
2.6
|
(1) | First quarter 2015 includes $0.4M in severance costs associated with the integration of P.E.G. |
(2) | Includes expense from stock options, restricted stock grants and special compensation arrangement for a business unit leader. |
(3) | Includes impairment of long lived assets in our Misco Germany business. |
(4) | First quarter 2015 includes $5.3M of retail inventory reserves and foregone gross profit related to our exit of substantially all of our retail business, $2.0M related to severance, and $0.7M in consulting expenses. |
(5) | Includes impairment of long lived assets within Technology Products-NA. |
(6) | Includes legal costs related to the investigation, settlement, prosecution, and restitution proceedings related to the Fiorentinos; and professional costs related to the investigation being conducted at the request of the US Attorney for the Southern District of Florida. |
Quarter Ended
March 31 |
||||||||
2015
|
2014
|
|||||||
GAAP
|
||||||||
Net income (loss)
|
$
|
(28.6
|
)
|
$
|
(3.0
|
)
|
||
Provision for (benefit from) income taxes
|
1.7
|
0.9
|
||||||
Income (loss) before income taxes
|
(26.9
|
)
|
(2.1
|
)
|
||||
Interest and other expense, net
|
7.4
|
0.8
|
||||||
Operating income (loss)
|
(19.5
|
)
|
(1.3
|
)
|
||||
Non-GAAP
|
||||||||
Non-recurring adjustments
|
10.6
|
2.3
|
||||||
Recurring adjustments
|
0.7
|
1.6
|
||||||
Adjusted operating income (loss)
|
(8.2
|
)
|
2.6
|
|||||
Interest and other expense, net
|
7.4
|
0.8
|
||||||
Income (loss) before income taxes
|
(15.6
|
)
|
1.8
|
|||||
Normalized provision for (benefit from) income taxes
|
(5.5
|
)
|
0.6
|
|||||
Normalized effective tax rate1
|
35.0
|
%
|
35.0
|
%
|
||||
Non-GAAP net income (loss)
|
$
|
(10.1
|
)
|
$
|
1.2
|
|||
GAAP diluted net income (loss) per share
|
$
|
(0.77
|
)
|
$
|
(0.08
|
)
|
||
Non-GAAP diluted net income (loss) per share
|
$
|
(0.27
|
)
|
$
|
0.03
|
(1)
|
Effective tax rate of 35% used in both the first quarter 2015 and the first quarter 2014.
|