10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to

COMMISSION FILE NUMBER 1-13792

Systemax Inc.

(Exact name of registrant as specified in its charter)

Delaware	11-3262067
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

11 Harbor Park Drive

Port Washington, New York 11050

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (516) 608-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒   No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)   Yes ☐   No ☒

The number of shares outstanding of the registrant’s Common Stock as of April 29, 2015 was 36,818,158.

TABLE OF CONTENTS

Available Information		3
Part I	Financial Information
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	22
Part II	Other Information
Item 1.	Legal Proceedings	23
Item 6.	Exhibits	24
	Signatures	25

2

Available Information

We maintain an internet web site at www.systemax.com.  We file reports with the Securities and Exchange Commission (“SEC”) and make available free of charge on or through this website our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including all amendments to those reports.  These are available as soon as is reasonably practicable after they are filed with the SEC.  All reports mentioned above are also available from the SEC’s website (www.sec.gov).  The information on our website is not part of this or any other report we file with, or furnish to, the SEC.

Our Board of Directors has adopted the following corporate governance documents with respect to the Company (the “Corporate Governance Documents”):

· 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

In accordance with the corporate governance rules of the New York Stock Exchange, each of the Corporate Governance Documents is available on our Company web site, www.systemax.com.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Systemax Inc.

Condensed Consolidated Balance Sheets

(In millions)

	March 31, 2015			December 31, 2014
	(Unaudited)
ASSETS:
Current assets:
Cash	$	132.9		$	165.0
Accounts receivable, net		322.1			355.5
Inventories		272.7			289.9
Prepaid expenses and other current assets		15.5			15.9
Deferred income taxes		1.7			1.7
Total current assets		744.9			828.0
Property, plant and equipment, net		40.5			41.2
Deferred income taxes		10.5			13.5
Goodwill and intangibles		20.0			7.4
Other assets		4.2			4.8
Total assets	$	820.1		$	894.9
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	392.7		$	420.2
Accrued expenses and other current liabilities		82.2			93.0
Current portion of long-term debt		2.3			2.7
Total current liabilities		477.2			515.9
Long-term debt		0.8			0.9
Other liabilities		15.7			18.5
Total liabilities		493.7			535.3
Commitments and contingencies
Shareholders’ equity:
Preferred stock
Common stock		0.4			0.4
Additional paid-in capital		184.6			184.3
Treasury stock		(25.3	)		(25.4	)
Retained earnings		180.6			209.2
Accumulated other comprehensive loss		(13.9	)		(8.9	)
Total shareholders’ equity		326.4			359.6
Total liabilities and shareholders’ equity	$	820.1		$	894.9

See Notes to Condensed Consolidated Financial Statements.

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Systemax Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(In millions, except per share amounts)

	Three Months Ended March 31,
	2015			2014
Net sales	$	785.8		$	873.4
Cost of sales		678.0			745.5
Gross profit		107.8			127.9
Selling, general & administrative expenses		122.0			126.8
Special charges		5.3			2.4
Operating income (loss)		(19.5	)		(1.3	)
Foreign currency exchange loss		7.2			0.5
Interest and other income, net		(0.1	)		-
Interest expense		0.3			0.3
Income (loss) before income taxes		(26.9	)		(2.1	)
Provision for income taxes		1.7			0.9
Net income (loss)	$	(28.6	)	$	($3.0	)
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

See Notes to Condensed Consolidated Financial Statements.

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Systemax Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In millions)

	Three Months Ended March 31,
	2015			2014
Net income (loss)	$	(28.6	)	$	(3.0	)
Other comprehensive income (loss):
Foreign currency translation		(5.0	)		0.4
Total comprehensive loss	$	(33.6	)	$	(2.6	)

See Notes to Condensed Consolidated Financial Statements.

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Systemax Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)

	Three Months Ended March 31,
	2015			2014
Cash flows from operating activities:
Net income (loss)	$	(28.6	)	$	(3.0	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		3.8			4.2
Asset impairment charges		0.6			-
Provision (benefit) for deferred income taxes		0.5			(0.4	)
Provision for returns and doubtful accounts		0.9			2.6
Compensation expense related to equity compensation plans		0.4			0.5
Changes in operating assets and liabilities:
Accounts receivable		23.0			(42.1	)
Inventories		22.1			(4.5	)
Prepaid expenses and other current assets		3.0			0.2
Income taxes payable (receivable)		0.1			7.7
Accounts payable		(17.9	)		22.5
Accrued expenses and other liabilities		(13.6	)		(7.6	)
Net cash used in operating activities		(5.7	)		(19.9	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(3.8	)		(1.7	)
Purchase of P.E.G., net of cash acquired		(24.9	)		-
Net cash used in investing activities		(28.7	)		(1.7	)
Cash flows from financing activities:
Repayments of capital lease obligations		(0.5	)		(0.6	)
Net cash used in financing activities		(0.5	)		(0.6	)
Effects of exchange rates on cash		2.8			0.5
Net decrease in cash		(32.1	)		(21.7	)
Cash – beginning of period		165.0			181.4
Cash – end of period	$	132.9		$	159.7

See Notes to Condensed Consolidated Financial Statements.

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Systemax Inc.

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)

(In millions)

	Common Stock															Accumulated
	Number of Shares Outstanding		Amount		Additional Paid-in Capital			Treasury Stock, At Cost				Retained Earnings				Other Comprehensive Loss				Total Equity
Balances, January 1, 2015		36,808	$	0.4	$	184.3			$	(25.4	)		$	209.2			$	(8.9	)	$	359.6
Stock-based compensation expense						0.4															0.4
Issuance of restricted stock		10				(0.1	)			0.1											-
Change in cumulative translation adjustment																		(5.0	)		(5.0	)
Net income (loss)														(28.6	)						(28.6	)
Balances, March 31, 2015		36,818	$	0.4	$	184.6			$	(25.3	)		$	180.6			$	(13.9	)	$	326.4

See Notes to Condensed Consolidated Financial Statements.

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Systemax Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

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

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of the Company as of March 31, 2015 and the results of operations for the three month periods ended March 31, 2015 and 2014, statements of comprehensive income (loss) for the three month periods ended March 31, 2015 and 2014, cash flows for the three month periods ended March 31, 2015 and 2014 and changes in shareholders’ equity for the three month period ended March 31, 2015.  The December 31, 2014 condensed consolidated balance sheet has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2014 and for the year then ended included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.  The results for the three month periods ended March 31, 2015 are not necessarily indicative of the results for the entire year.

Systemax manages its business and reports using a 52-53 week fiscal year that ends at midnight on the Saturday closest to December 31.  For clarity of presentation herein, fiscal years and quarters are referred to as if they ended on the traditional calendar month.  The actual fiscal first quarter ended on March 28, 2015 and the prior year ended March 29, 2014.  The first quarters of both 2015 and 2014 included 13 weeks.

2. Acquisition

On January 30, 2015, the Company’s Industrial Products group (“Industrial”) acquired all of the outstanding equity interests of the Plant Equipment Group (“P.E.G.”) from TAKKT America, a business-to-business direct marketer of maintenance, repair and operations (“MRO”) products with operations in North America for approximately $25.9 million in cash, $1.9 million of which was placed into an escrow account for one year to secure the sellers’ indemnification obligations under the purchase agreement. This acquisition expands the Industrial Products segment presence in the MRO market in North America.  A preliminary allocation of the purchase price was done as of the acquisition date, subject to revision in the future.  The Company acquired approximately $13.2 million in net assets, including approximately $10.0 million in receivables, $11.2 million in inventories, $11.0 million in payables and recorded approximately $12.7 million of goodwill and other intangibles related to this acquisition.  The P.E.G. accounts are included in the accompanying condensed consolidated statement of operations from the date of acquisition.

3. Net Income (Loss) per Common Share

Net income (loss) per common share - basic was calculated based upon the weighted average number of common shares outstanding during the respective periods presented using the two class method of computing earnings per share.  The two class method was used as the Company has outstanding restricted stock with rights to dividend participation for unvested shares.   Net income (loss) per common share - diluted was calculated based upon the weighted average number of common shares outstanding and included the equivalent shares for dilutive options and restricted stock awards outstanding during the respective periods, including unvested options.  The dilutive effect of outstanding options and restricted stock issued by the Company is reflected in net income (loss) per share - diluted using the treasury stock method.  Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options. In periods when we recognize a net loss, we exclude the impact of outstanding stock awards from the diluted loss per share calculation as their inclusion would have an antidilutive effect. The weighted average number of stock options outstanding included in the computation of diluted earnings per share was zero shares for the three months ended March 31, 2015 and 2014, respectively.  The weighted average number of restricted stock awards included in the computation of diluted earnings per share was zero shares for the three months ended March 31, 2015 and 2014, respectively.  The weighted average number of stock options outstanding excluded from the computation of diluted earnings per share was 0.9 million shares and 1.1 million shares for the three months ended March 31, 2015 and 2014, respectively, due to their antidilutive effect. The weighted average number of restricted awards outstanding excluded from the computation of diluted earnings per share was zero shares and a de minimis number of shares for the three months ended March 31, 2015 and 2014, respectively, due to their antidilutive effect.

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4. Credit Facilities and Long Term Debt

The Company maintains a $125.0 million (which may be increased to $200.0 million, subject to certain conditions) secured revolving credit agreement with a group of financial institutions which provides for borrowings in the United States. The credit facility has a five year term and expires on October 26, 2015 and the Company expects to renew or extend the facility on or before that date in 2015. Availability is subject to a borrowing base formula that takes into account eligible receivables and eligible inventory. Borrowings are secured by substantially all of the Company’s assets, including accounts receivable, inventory and certain other assets, subject to limited exceptions. The credit agreement contains certain operating, financial and other covenants, including limits on annual levels of capital expenditures, availability tests related to payments of dividends and stock repurchases and fixed charge coverage tests related to acquisitions. The revolving credit agreement requires that a minimum level of availability be maintained. If such availability is not maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and up to 40% of qualified inventories. The interest rate under this facility is computed at applicable market rates based on LIBOR or the Prime Rate, plus an applicable margin. The applicable margin varies based on borrowing base availability. As of March 31, 2015, eligible collateral under this agreement was $104.4 million, total availability was $98.3 million, total outstanding letters of credit were $6.1 million and there were no outstanding advances. The Company was in compliance with all of the covenants under this facility as of March 31, 2015.

The Company (through a subsidiary) has an outstanding Bond financing with the Development Authority of Jefferson, Georgia (the “Authority”).  The Bonds were issued by the Authority and purchased by GE Government Finance Inc., and mature on October 1, 2018.  The proceeds from the Bond were used to finance capital equipment purchased for the Company’s distribution facility located in Jefferson, Georgia.  The purchase and installation of the equipment for the facility was completed by December 31, 2011. Pursuant to the transaction, the Company transferred to the Authority, for consideration consisting of the Bond proceeds, ownership of the equipment and the Authority leased the equipment to the Company’s subsidiary pursuant to a capital equipment lease expiring October 1, 2018.  Under the capital equipment lease, the Company has the right to acquire ownership of the equipment at any time for a purchase price sufficient to pay off all principal and interest on the Bonds, plus $1.00.  As of March 31, 2015 there was approximately $1.7 million outstanding against this financing facility.

5. Special Charges

The Company’s North America Technology Products Group (“NATG”) segment incurred special charges of approximately $4.6 million in the first quarter of 2015 relating to the previously announced exit from the retail store business in order to accelerate its focus on its business to business (“B2B”) operations, as well as, asset impairments and professional costs. This exit plan includes the closing of substantially all of its retail stores, closing a distribution center, and implementing a general workforce reduction to align available resources with a B2B focus as well as transitioning retail customers to online consumer sales.  Charges related to this action included approximately $2.0 million in workforce reductions and $0.7 million in consulting expenses. NATG also incurred asset impairment charges of $0.3 million.

Additionally NATG incurred $1.6 million of professional 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.

The balance of the workforce reductions from the European restructuring, disclosed in previous filings, and the NATG restructuring plan are included in the Condensed Consolidated Balance Sheet within accrued expenses.

The following table details the associated liabilities related to the Technology Products segments special charges (in millions):

	EMEA - Workforce reductions and Personnel Costs			NATG - Workforce reductions		Total
Balance January 1, 2015	$	4.7		$	-	$	4.7
Charged to expense		-			2.0		2.0
Paid or otherwise settled		(2.3	)		-		(2.3	)
Balance March 31, 2015	$	2.4		$	2.0	$	4.4

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The Company conducted an evaluation of its long-lived assets in its Germany operations and as a result of negative cash flows in 2015 and a forecast for continued cash use, concluded that those assets were impaired.  As a result, the Company recorded an impairment charge of approximately $0.3 million, pre-tax, in the first quarter of 2015.

Industrial incurred special charges of approximately $0.4 million in severance costs associated with the integration of P.E.G. completed in first quarter of 2015. This severance cost is included in the Condensed Consolidated Balance Sheet within accrued expenses and will be settled within the year.

6. Segment Information

Systemax is primarily a direct marketer of brand name and private label products.  Our operations are organized into three reportable business segments – Industrial Products Group (“Industrial”), EMEA Technology Products Group (“EMEA”) and North America Technology Products Group (“NATG”).

Industrial sells a wide array of MRO industrial products and supplies which are marketed in North America and Mexico.  Most of these products are manufactured by other companies; however, the Company does offer a selection of products that are manufactured for our own design and marketed on a private label basis.

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

NATG sells ICT and CE which are marketed in North America and Puerto Rico.  Most of these products are manufactured by other companies; however, the Company does offer a selection of products that are manufactured for our own design and marketed on a private label basis.

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

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

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

	Three Months Ended
	March 31,
	2015			2014
Net sales:
Industrial	$	158.9		$	129.1
EMEA		272.6			323.0
NATG		352.8			419.8
Corporate and other		1.5			1.5
Consolidated	$	785.8		$	873.4
Operating income (loss):
Industrial	$	9.7		$	9.7
EMEA		(4.8	)		1.6
NATG		(19.7	)		(8.2	)
Corporate and other expenses		(4.7	)		(4.4	)
Consolidated	$	(19.5	)	$	(1.3	)

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

	Three Months Ended March 31,
	2015		2014
Net sales:
United States	$	472.9	$	500.8
United Kingdom		99.4		148.8
France		91.4		96.4
Other Europe		81.8		77.8
Other North America		40.3		49.6
Consolidated	$	785.8	$	873.4

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

7. Fair Value Measurements

Financial instruments consist primarily of investments in cash, trade accounts receivable, debt and accounts payable.  The Company estimates the fair value of financial instruments based on interest rates available to the Company.  At March 31, 2015 and 2014, the carrying amounts of cash, accounts receivable and accounts payable are considered to be representative of their respective fair values due to their short-term nature. The Company’s debt is considered to be representative of its fair value because of its variable interest rate.

The fair value of our reporting units with respect to goodwill, non-amortizing intangibles and long lived assets is measured in connection with the Company’s annual impairment testing. The Company performs a qualitative assessment of goodwill and non-amortizing intangibles to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.  If the qualitative assessment shows that the fair value of the reporting unit exceeds its carrying amount, the company is not required to complete the annual two step goodwill impairment test.  If a quantitative analysis is required to be performed for goodwill, the fair value of the reporting unit to which the goodwill has been assigned is determined using a discounted cash flow model.  A discounted cash flow model is also used to determine fair value of indefinite-lived intangibles using projected cash flows of the intangible. Unobservable inputs related to these 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. Long lived assets are assets used in the Company’s operations and include leasehold improvements, warehouse and retail store fixtures and similar property used to generate sales and cash flows.  Long lived assets are tested for impairment utilizing a recoverability test. The recoverability test compares the carrying value of an asset group to the undiscounted cash flows directly attributable to the asset group over the life of the primary asset.  If the undiscounted cash flows of an asset group is less than the carrying value of the asset group, the fair value of the asset group is then measured.  If the fair value is also determined to be less than the carrying value of the asset group, the asset group is impaired.  In 2015 the Company’s evaluation of certain long lived assets in the EMEA and NATG segments, concluded that certain long lived assets were impaired and aggregated impairment charges of approximately $0.6 million, pre-tax, were recorded in the first quarter of 2015.

8. Legal Proceedings

The Company and its subsidiaries are involved in various lawsuits, claims, investigations and  proceedings including commercial, employment, consumer, personal injury and health and safety law matters, which are being handled and defended in the ordinary course of business.  In addition, the Company is subject to various assertions, claims, proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that are incorporated in a broad spectrum of products the Company sells.  The Company is also audited by (or has initiated voluntary disclosure agreements with) numerous governmental agencies in various countries, including U.S. Federal and state authorities, concerning potential income tax, sales tax and unclaimed property liabilities.  These matters are in various stages of investigation, negotiation and/or litigation, and are being vigorously defended.  The Company intends to vigorously defend these matters and believes it has strong defenses.  The Company is also being audited by an entity representing 45 states seeking recovery of “unclaimed property”.  The Company is complying with the audit and is providing requested information.

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Although the Company does not expect, based on currently available information, that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial position or results of operations, the ultimate outcome is inherently unpredictable.  Therefore, judgments could be rendered or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period.  The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable and estimable.  In this regard, the Company establishes accrual estimates for its various lawsuits, claims, investigations and proceedings when it is probable that an asset has been impaired or a liability incurred at the date of the financial statements and the loss can be reasonably estimated. At March 31, 2015 the Company has established accruals for certain of its various lawsuits, claims, investigations and proceedings based upon estimates of the most likely outcome in a range of loss or the minimum amounts in a range of loss if no amount within a range is a more likely estimate.  The Company does not believe that at March 31, 2015 any reasonably possible losses in excess of the amounts accrued would be material to the financial statements.

Following the previously reported independent investigation of Gilbert Fiorentino and Carl Fiorentino by our Audit Committee in 2011 (in response to a whistleblower report) for a variety of improper acts, the subsequent termination of their employment and the entering into by Gilbert Fiorentino of a settlement agreement with the Securities and Exchange Commission, on November 20, 2014 the United States Attorney’s Office (“USAO”) for the Southern District of Florida announced that Gilbert Fiorentino and Carl Fiorentino had been charged with mail fraud, wire fraud and money laundering in connection with a scheme to defraud TigerDirect and Systemax.  Specifically, the charges set forth a scheme to obtain kickbacks and other benefits, and to conceal this illicit income from the IRS, all while Gilbert Fiorentino and Carl Fiorentino were employed as senior executives at the Company’s NATG business.  On December 2, 2014, the United States Attorney’s Office announced that Gilbert Fiorentino and Carl Fiorentino had pled guilty to various charges, and on March 3, 2015, Gilbert Fiorentino and Carl Fiorentino were sentenced to sixty and eighty months’ imprisonment, respectively.  The Court held a preliminary restitution hearing on April 29, 2015 to determine the amount of restitution Gilbert Fiorentino and Carl Fiorentino are obligated to pay the Company, and assigned consideration of certain elements of the Company’s claims to a magistrate.  The Company cannot predict the outcome of its restitution claims.

The Company's Audit Committee, with the assistance of independent outside counsel, is cooperating with a current investigation by the USAO into allegations arising from the Fiorentino investigation regarding possible executive officer conflicts of interest and conduct related to internal controls and books and records.  The Company does not currently believe these matters have had or will have a material effect on the Company's previously reported consolidated financial statements. However, it is not possible at this time to predict when the current investigation will be completed; what subject(s) will be investigated; what actions, if any, may be taken by the government as a result of its investigation; or whether any of these matters will have a material adverse impact on the Company.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This report contains forward looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934).  Additional written or oral forward looking statements may be made by the Company from time to time, in filings with the Securities and Exchange Commission or otherwise.  Statements contained in this report that are not historical facts are forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward looking statements may include, but are not limited to, projections or estimates of revenue, income or loss, exit costs, cash flow needs and capital expenditures, statements regarding future operations, expansion or restructuring plans, including our exit from the managing of retail stores and the focusing of our NATG operations on B2B customers, financing needs, compliance with financial covenants in loan agreements, the timely implementation of technology systems, including transitioning certain sales, procurement and other management information systems functions from our existing information technology platforms to a new platform specifically developed for our needs, plans for acquisition or sale of assets or businesses and consolidation of operations of newly acquired businesses, including our recent acquisition of P.E.G. in the US and Misco Solutions in the Netherlands, and plans relating to products or services of the Company, assessments of materiality, predictions of future events and the effects of pending and possible litigation, as well as assumptions relating to the foregoing.  In addition, when used in this discussion, the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans” and variations thereof and similar expressions are intended to identify forward looking statements.

Forward-looking statements in this report are based on the Company’s beliefs and expectations as of the date of this report and are subject to risks and uncertainties which may have a significant impact on the Company’s business, operating results or financial condition.  Investors are cautioned that these forward-looking statements are inherently uncertain.  Should one or more of the risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein.  Statements in this report, particularly in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Notes to Condensed Consolidated Financial Statements, describe certain factors, among others, that could contribute to or cause such differences.

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Readers are cautioned not to place undue reliance on any forward looking statements contained in this report, which speak only as of the date of this report. We undertake no obligation to publicly release the result of any revisions to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected events.

Overview

Systemax is primarily a direct marketer of brand name and private label products.  Our sales operations are organized in three reportable business segments – Industrial Products Group (“Industrial”), EMEA Technology Products Group (“EMEA”) and North America Technology Products Group (”NATG”).

Our Industrial, EMEA and NATG segments sell dissimilar products.  Industrial products are generally higher in price, lower in volume and higher in product margin.  EMEA and NATG products are generally higher in volume, lower in price and lower in product margin.  This results in higher operating margin for the Industrial segment.  Each segment incurs specifically identifiable selling, general and administrative expenses, with the selling, general and administrative expenses for the Industrial segment being higher as a percentage of sales than those of the EMEA and NATG segments as a result of the Industrial segment having a longer selling cycle for its business customers than the EMEA and NATG segments. Additionally, the Industrial segment’s vendors generally do not provide significant funding to offset its marketing expenses. Within these product groups, we offer our customers a broad selection of products, prompt order fulfillment and extensive customer service.

Recent Developments:

On March 10, 2015 the Company announced that its NATG segment would be exiting the retail store business in order to accelerate its focus on its business to business (“B2B”) operations. This exit plan included the closing of substantially all of its retail stores, closing a distribution center, and implementing a general workforce reduction to align available resources with a B2B focus as well as transitioning retail customers to online consumer sales.  The Company engaged outside firms to assist with the retail store liquidation, as well as the workforce reduction, and anticipates that the liquidation and workforce reductions will be completed by the end of the second quarter of 2015.  After completion of these actions the Company will see a substantial decline in retail revenues. The Company anticipates that one time exit charges relating to the exit from the retail store business will aggregate between $50 and $55 million (including approximately $4 million of severance expenses, and $39 million in lease exit costs) substantially all of which will require cash expenditures.  The payment of these costs began in the first quarter of 2015 and the Company expects payments in respect of lease exit activities to continue through the end of 2017.  The Company expects to realize improved annual profitability of between $18 and $22 million, pre-tax, as a result of these actions.

On January 30, 2015, the Company’s Industrial segment acquired the Plant Equipment Group (“P.E.G.”) from TAKKT America, a business-to-business direct marketer of maintenance, repair and operations (“MRO”) products with operations in North America for approximately $25.9 million in cash, $1.9 million of which was placed into an escrow account for one year to secure the sellers’ indemnification obligations under the purchase agreement.  This acquisition expands the Industrial Products segment presence in the MRO market in North America.  A preliminary allocation of the purchase price was done as of the acquisition date, subject to revision in the future. The Company acquired approximately $13.2 million in net assets, including approximately $10.0 million in receivables, $11.2 million in inventories, $11.0 million in payables and recorded approximately $12.7 million of goodwill and other intangibles related to this acquisition. The P.E.G. accounts are included in the accompanying condensed consolidated statement of operations from the date of acquisition.

Industrial Products

Industrial segment sells a wide array of MRO products which are marketed in North and Central America.  Most of these products are manufactured by other companies.  Some products are manufactured for us to our own design and marketed under the trademarksGlobal™, GlobalIndustrial.com™ and Nexel™, Relius™, Relius Elite™ and Hercules™.  Industrial accounted for 20% and 15% of our net sales for the three month periods ended March 31, 2015 and 2014, respectively.  

Technology Products – EMEA

EMEA sells ICT and CE products.  These products are marketed in Europe.  Most of these products are manufactured by other companies.  Some products are manufactured for us to our own design and marketed on a private label basis.  For the three month periods ended March 31, 2015 and 2014, EMEA accounted for 35% and 37% of our net sales, respectively.

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Technology Products – NATG

NATG sells ICT and CE products.  These products are marketed in North America and Puerto Rico.  Most of these products are manufactured by other companies.  Some products are manufactured for us to our own design and marketed on a private label basis.  For the three month periods ended March 31, 2015 and 2014, NATG accounted for 45% and 48% of our net sales, respectively.

Operating Conditions

The market for computer products and consumer electronics is subject to intense price competition and is characterized by narrow gross profit margins.  The North American industrial products market is highly fragmented and we compete against multiple distribution channels.  Distribution is working capital intensive, requiring us to incur significant costs associated with the warehousing of many products, including the costs of maintaining inventory, leasing warehouse space, inventory management systems, and employing personnel to perform the associated tasks.  We supplement our on-hand product availability by maintaining relationships with major distributors and manufacturers, utilizing a combination of stock and drop-shipment fulfillment.

The primary component of our operating expenses historically has been employee related costs, which includes items such as wages, commissions, bonuses, employee benefits and stock option expenses.  We continually assess our operations to ensure that they are efficient, aligned with market conditions and responsive to customer needs.

In the discussion of our results of operations, constant currency refers to the adjustment of the results of our foreign operations to exclude the effects of period to period fluctuations in currency exchange rates.

The discussion of our results of operations and financial condition that follows will provide information that will assist in understanding our financial statements, the factors that we believe may affect our future results and financial condition as well as information about how certain accounting principles and estimates affect the consolidated financial statements.  This discussion should be read in conjunction with the condensed consolidated financial statements included herein and in conjunction with the audited financial statements as of December 31, 2014 and the other information provided in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and revenues and expenses during the period.  Significant accounting policies employed by the Company, including the use of estimates, were presented in the Notes to Consolidated Financial Statements of the Company’s 2014 Annual Report on Form 10-K.

Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations, require management’s most difficult, subjective and complex judgments, and involve uncertainties.  The accounting policies that have been identified as critical to our business operations and understanding the results of operations pertain to revenue recognition; accounts receivable and allowance for doubtful accounts; inventories; goodwill and intangible assets; long-lived assets; accruals; income taxes; and special charges.  The application of each of these critical accounting policies and estimates was discussed in Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.  There have been no significant changes in the application of critical accounting policies or estimates during 2015.  Management believes that full consideration has been given to all relevant circumstances that we may be subject to, and the condensed consolidated financial statements of the Company accurately reflect management’s best estimate of the consolidated results of operations, financial position and cash flows of the Company for the periods presented.  Because of the uncertainty in these estimates, actual results could differ from estimates used in applying the critical accounting policies.  We are not aware of any reasonably likely events or circumstances which would result in different amounts being reported that would materially affect the Company’s financial condition or results of operations.

Recent Accounting Pronouncements

Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”).  These authorities issue numerous pronouncements, most of which are not applicable to the Company’s current or reasonably foreseeable operating structure.

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In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”.  This ASU provides new guidance related to how an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  In addition, this ASU specifies new accounting for costs associated with obtaining or fulfilling contracts with customers and expands the required disclosures related to revenue and cash flows from contracts with customers.  This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of the adoption, with early application not permitted.  The Company is currently determining its implementation approach and assessing the impact, if any, on the condensed consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”.  This ASU eliminates the concept of reporting extraordinary items, but retains the presentation and disclosure guidance for items that are unusual in nature or occur infrequently and expands to include items that are both unusual in nature and infrequently occurring.  This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015.   The Company will apply this new guidance, as applicable, beginning in 2016.

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Results of Operations

 Three Months Ended March 31, 2015 compared to the Three Months Ended March 31, 2014

Key Performance Indicators* (in millions):

	Three Months Ended March 31,
	2015			2014			% Change
Net sales by segment:
Industrial	$	158.9		$	129.1			23.1	%
EMEA	$	272.6		$	323.0			(15.6	)%
NATG	$	352.8		$	419.8			(16.0	)%
Corporate and other	$	1.5		$	1.5			-	%
Consolidated net sales	$	785.8		$	873.4			(10.0	)%
Consolidated gross margin		13.7	%		14.6	%		(0.9	)%
Consolidated SG&A costs*	$	127.3		$	129.2			(1.5	)%
Consolidated SG&A costs* as a % of sales		16.2	%		14.8	%		1.4	%
Operating income (loss) by segment:*
Industrial	$	9.7		$	9.7			-	%
EMEA	$	(4.8	)	$	1.6			(400.0	)%
NATG	$	(19.7	)	$	(8.2	)		140.2	%
Corporate and other	$	(4.7	)	$	(4.4	)		6.8	%
Consolidated operating loss	$	(19.5	)	$	(1.3	)		1,400.0	%
Operating margin by segment*
Industrial		6.1	%		7.5	%		(1.4	)%
EMEA		(1.8	)%		0.5	%		(2.3	)%
NATG		(5.6	)%		(2.0	)%		(3.6	)%
Consolidated operating margin		(2.5	)%		(0.1	)%		(2.4	)%
Effective income tax rate		6.3	%		42.9	%		(36.6	)%
Net income (loss)	$	(28.6	)	$	(3.0	)		853.3	%
Net margin		(3.6	)%		(0.3	)%		(3.3	)%

*includes special charges. See Note 5 of Notes to Condensed Consolidated Financial Statements.

NET SALES

SEGMENTS

Our consolidated net sales performance was led by solid growth in our Industrial segment which was more than offset by declines in our EMEA and NATG segments. On a constant currency basis and excluding both the January 2015 acquisition of P.E.G. and June 2014 acquisition of Misco Solutions BV, sales declined 9.2%.

Industrial net sales benefited from the P.E.G. acquisition, which contributed $16.5 million in sales from the date of acquisition, and solid growth across most product lines, as well as investment in hiring sales personnel and subject matter experts, who bring significant technical knowledge in specific categories, thus enhancing our sales efforts with information important to our customers.  On a constant currency basis and excluding P.E.G., net sales increased 10.8%.

EMEA net sales decrease is attributable to unfavorable currency exchange, poor performance in the United Kingdom, more than offsetting the strong performance in France which continued its strong performance benefiting from a number of large customer contracts and continued growth in its core businesses.  On a constant currency basis and excluding Misco Solutions, EMEA net sales decreased 9.8%.

NATG net sales decrease reflects the challenging sales environment which led the Company to take the strategic actions announced in March 2015: the exit of substantially all of its retail store operations in order to accelerate its focus on its B2B operations.  Soft market conditions and business disruptions from the strategic actions implemented contributed to the sales decline. On a constant currency basis, NATG net sales decreased 15.0%.

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GROSS MARGIN

The consolidated gross margin decline is related to the reduced selling margins in EMEA operations, particularly in the United Kingdom, driven by a customer shift from commercial to public sector accounts, and NATG recording approximately $3.9 million of inventory reserves related to the liquidation pricing strategy necessitated by the exit of substantially all of its retail business.  Slight gross margin decline in Industrial segment was driven by product mix as sales of lower margin domestically sourced products outpaced sales of higher margin imported private label products, as well as inefficiencies in its logistics as a result of insufficient warehouse space for the product that it stocks. Gross margin is dependent on variables such as product mix, vendor price protection and other sales incentives, competition, pricing strategy, cooperative advertising funds classified as a reduction to cost of sales, freight discounting and other variables, any or all of which may result in fluctuations in gross margin.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”), EXCLUDING SPECIAL CHARGES

SG&A expense decreases for the quarter are primarily attributable to the EMEA and NATG segments.  As a result of the previously announced exit from the retail store business, our NATG segment incurred lower internet advertising spend of approximately $2.4 million and reduced salary and related costs of approximately $1.5 million.  In the EMEA segment, we incurred lower salary and related costs of approximately $4.5 million due to the consolidation of positions from country locations to the Hungary shared services center.   The Industrial segment incurred approximately $5.7 million of increased costs compared to the prior year including costs incurred by P.E.G. since date of acquisition.  Significant expense increases include approximately $3.1 million of increased salary and related costs of additional sales headcount, $2.1 million of which related to P.E.G. costs, and increased internet advertising spending of approximately $1.8 million, $0.6 million of which related to P.E.G. costs, as it continues to expand its online product offerings and increase its ecommerce presence.

SPECIAL CHARGES

The Company’s NATG segment incurred special charges of approximately $4.6 million in the first quarter of 2015 relating to the previously announced exit from the retail store business, as well as, asset impairments and professional costs. This exit plan includes the closing of substantially all of its retail stores, closing a distribution center, and implementing a general workforce reduction to align available resources with a B2B focus as well as transitioning retail customers to online consumer sales.The Company engaged outside firms to assist with the retail store liquidation, as well as the workforce reduction, and anticipates that the liquidation and workforce reductions will be completed by the end of the second quarter of 2015.  After completion of these actions the Company will see a substantial decline in retail revenues. Charges related to the exit plan included approximately $2.0 million in workforce reductions and $0.7 million in consulting expenses. The NATG segment also incurred asset impairment charges of $0.3 million. Other special charges included $1.6 million of professional 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.

The Company anticipates that one time exit charges relating to the previously announced exit from the retail store business will aggregate between $50 and $55 million (including approximately $4 million of severance expenses, and $39 million in lease exit costs) substantially all of which will require cash expenditures.  The payment of these costs began in the first quarter of 2015 and the Company expects payments in respect of lease exit activities to continue through the end of 2017.The Company expects to realize improved annual profitability of between $18 and $22 million, pre-tax, as a result of these actions.

The Company conducted an evaluation of its long-lived assets in its Germany operations and as a result of negative cash flows in 2015 and a forecast for continued cash use, concluded that those assets were impaired.  As a result, the Company’s EMEA segment recorded an impairment charge of approximately $0.3 million, pre-tax, in the first quarter of 2015.

The Company’s Industrial segment incurred special charges of approximately $0.4 million in severance costs associated with the integration of P.E.G. completed in first quarter of 2015.

In 2014 the Company’s EMEA segment recorded approximately $1.5 million in workforce reductions related to the implementation of the shared services center in Hungary and $0.2 million in recruitment costs for the shared services center.  The NATG segment recorded approximately $0.3 million for changes in the estimate of lease valuation accruals and $0.2 million in other costs related to the retail stores that were closed, and $0.2 million of additional legal and professional fees related to the Fiorentino matters.

OPERATING MARGIN

The decrease in Industrial’s operating margin reflects a decline in gross product margin driven by product mix as we continue to stock more domestically sourced products, increased internet advertising spending to drive traffic, hiring of subject matter experts to bring additional value to our customers and special charges of $0.4 million in severance costs associated with the P.E.G. acquisition.

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The decline in EMEA’s operating margin relates primarily to reduced selling margins in the United Kingdom, and $0.3 million of asset impairment charges, offset by SG&A expense savings due to consolidation of positions from country locations to our European shared services center in Hungary.

The decline in NATG operating margin reflects the challenging sales environment which led the Company to take the strategic actions to exit substantially all of its retail store operations and to record approximately $3.9 million of inventory reserve adjustments and $3.0 million of special charges related to the previously announced exit from the retail store business.

The increase in Corporate and other expenses primarily resulted from higher IT expenditures.

Consolidated operating margin was impacted by special charges of $5.3 million and $2.4 million for the three months period ended March 31, 2015 and 2014, respectively.

INTEREST EXPENSE

The interest expense charges for 2015 and 2014 are attributable to decreasing balances owed on the Recovery Zone Bond facility and outstanding capital lease obligations.

INCOME TAXES

In the first quarter of 2015 the Company recorded income tax expense for certain U.S. states, certain European locations and Puerto Rico. Other locations currently have full valuation allowances and no benefit for loss is recorded. Tax expense in the first quarter of 2015 included approximately $0.6 million in valuation allowances recorded against the deferred tax assets of the Company’s subsidiaries in the Netherlands. This valuation allowance was recorded as the result of losses recorded in those operations and management’s belief that it is not more likely than not that those assets will be utilized in the near future.

Financial Condition, Liquidity and Capital Resources

Our primary liquidity needs are to support working capital requirements in our business, including working capital for integrating P.E.G. and Misco Solutions with our business, exiting of the consumer and retail business and related workforce reductions previously announced, funding cash requirements of certain European businesses for workforce reduction and transition costs, implementing new inventory and warehousing functions in North America, funding capital expenditures, continued investment in upgrading and expanding our technological capabilities and information technology infrastructure (including upgrading and transitioning of P.E.G. and Misco Solution’s technology infrastructure), repaying outstanding debt, and funding acquisitions.  We rely principally upon operating cash flow to meet these needs.  We believe that cash flow available from these sources and our availability under credit facilities will be sufficient to fund our working capital and other cash requirements for at least the next twelve months. We believe our current capital structure and cash resources are adequate for our internal growth initiatives.  To the extent our growth initiatives expand, including major acquisitions, we may seek to raise additional capital.  We believe that, if needed, we can access public or private funding alternatives to raise additional capital.

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Selected liquidity data (in millions):

	March 31, 2015		December 31, 2014		$ Change
Cash	$	132.9	$	165.0	$	(32.1	)
Accounts receivable, net	$	322.1	$	355.5	$	(33.4	)
Inventories	$	272.7	$	289.9	$	(17.2	)
Prepaid expenses and other current assets	$	15.5	$	15.9	$	(0.4	)
Accounts payable	$	392.7	$	420.2	$	(27.5	)
Accrued expenses and other current liabilities	$	82.2	$	93.0	$	(10.8	)
Current portion of long term debt	$	2.3	$	2.7	$	(0.4	)
Working capital	$	267.7	$	312.1	$	(44.4	)

Our working capital decreased due to cash used for the P.E.G. acquisition and the net loss incurred in 2015.  Accounts receivable days outstanding were 37.2 in 2015 up from 34.6 in 2014.  This trend reflects slower receivables collection in Europe and a higher proportion of our sales coming from business customers doing business with us on open account, and a lower proportion of our sales being from consumer customers purchasing from us using credit cards. Inventory turns were 9.7 in 2015 and 9.3 in 2014.  We expect that future accounts receivable, inventory and accounts payable balances will fluctuate with net sales and the mix of our net sales between consumer and business customers.

Net cash used in operating activities was $5.7 million resulting from changes in our working capital accounts, which provided $16.7 million in cash compared to $23.8 million used in 2014, primarily the result of the fluctuation in our accounts receivable, inventory, accounts payable, accrued expenses and other current liabilities balances.  Cash generated from net income (loss) adjusted by other non-cash items used $22.4 million compared to $3.9 million provided in 2014, primarily related to net loss from operations and depreciation and amortization expense.

Net cash used in investing activities totaled $28.7 million of which $24.9 million was used for the P.E.G. acquisition, which is net of cash acquired of $1.0 million (see Note 2).  Other investing activities include leasehold improvements for the new office space for our France operations, racking and equipment for additional warehouse space for the Industrial segment, expenditures for our inventory and warehousing functions in EMEA and information and communications systems hardware and software.  Net cash used in investing activities in 2014 totaled $1.7 million for expenditures for the European shared services center, computer and office equipment expenditures for the sales and administrative offices in the United Kingdom, expenditures for our inventory and warehousing functions in Europe, information and  communications systems hardware and software, and office expansion related to our Industrial segment.

Net cash used in financing activities during 2015 was $0.5 million used to repay capital lease obligations.  In 2014, we repaid approximately $0.6 million of capital lease obligations.

The Company maintains a $125.0 million (which may be increased to $200.0 million, subject to certain conditions) secured revolving credit agreement with a group of financial institutions which provides for borrowings in the United States. The credit facility has a five year term and expires in October 26, 2015 and the Company expects to renew or extend the facility on or before that date in 2015. Availability is subject to a borrowing base formula that takes into account eligible receivables and eligible inventory. Borrowings are secured by substantially all of the Company’s assets, including accounts receivable, inventory and certain other assets, subject to limited exceptions. The credit agreement contains certain operating, financial and other covenants, including limits on annual levels of capital expenditures, availability tests related to payments of dividends and stock repurchases and fixed charge coverage tests related to acquisitions. The revolving credit agreement requires that a minimum level of availability be maintained. If such availability is not maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and up to 40% of qualified inventories. The interest rate under this facility is computed at applicable market rates based on LIBOR or the Prime Rate, plus an applicable margin. The applicable margin varies based on borrowing base availability. As of March 31, 2015, eligible collateral under this agreement was $104.4 million, total availability was $98.3 million, total outstanding letters of credit were $6.1 million and there were no outstanding advances. The Company was in compliance with all of the covenants under this facility as of March 31, 2015.

The Company (through a subsidiary) has an outstanding Bond financing with the Development Authority of Jefferson, Georgia (the “Authority”).  The Bonds were issued by the Authority and mature on October 1, 2018.  The proceeds from the Bond were used to finance capital equipment purchased for the Company’s distribution facility located in Jefferson, Georgia.  The purchase and installation of the equipment for the facility was completed by December 31, 2011. Pursuant to the transaction, the Company transferred to the Authority, for consideration consisting of the Bond proceeds, ownership of the equipment and the Authority leased the equipment to the Company’s subsidiary pursuant to a capital equipment lease expiring October 1, 2018.  Under the capital equipment lease, the Company has the right to acquire ownership of the equipment at any time for a purchase price sufficient to pay off all principal and interest on the Bonds, plus $1.00.  As of March 31, 2015 there was approximately $1.7 million outstanding against this financing facility.

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We also have certain obligations with various parties that include commitments to make future payments.  Our principal commitments at March 31, 2015 consisted of payments under operating leases for certain of our real property and equipment, payments under capital leases for equipment, and payments under employment and other service agreements.

Levels of earnings and cash flows are dependent on factors such as consolidated gross margin and selling, general and administrative costs as a percentage of sales, product mix and relative levels of domestic and foreign sales.  Unusual gains or expense items, such as special (gains) charges and settlements, may impact earnings and are separately disclosed.  We expect that past performance may not be indicative of future performance due to the competitive nature of our business segments where the need to adjust prices to gain or hold market share is prevalent.

Macroeconomic conditions, such as business and consumer sentiment, may affect our revenues, cash flows or financial condition.  However, we do not believe that there is a direct correlation between any specific macroeconomic indicator and our revenues, cash flows or financial condition.  We are not currently interest rate sensitive, as we have minimal debt.

We anticipate cash needs to support our working capital requirements in our business, integrating P.E.G. and Misco Solutions with our business, exiting of the consumer and retail business and related workforce reductions, reorganizing our European operations, including funding cash requirements of certain European businesses, European workforce reduction costs and transition costs, implementing new inventory and warehouse functions in Europe, funding capital expenditures, continuing investment in upgrading and expanding our technological capabilities and information technology infrastructure (including upgrading and transitioning of P.E.G. and Misco Solutions technology infrastructure), repaying outstanding debt, and funding acquisitions.  We rely principally upon operating cash flows to meet these needs. We believe that cash flows from operations and our availability under credit facilities will be sufficient to fund our working capital and other cash requirements for the next twelve months.  We believe our current capital structure and cash resources are adequate for our internal growth initiatives.  To the extent our growth initiatives expand, including major acquisitions, we would seek to raise capital. We believe that, if needed, we can access public or private funding alternatives to raise additional capital.

These expenses and capital expenditures described above will require significant levels of liquidity, which we believe can be adequately funded from our currently available cash resources.  In 2015, we anticipate capital expenditures of approximately $15.2 million, though at this time we are not contractually committed to incur these expenditures.  Over the past several years we have engaged in opportunistic acquisitions, choosing to pay the purchase price in cash, and may do so in the future as favorable situations arise.  However, a deep and prolonged period of reduced consumer and/or business to business spending could adversely impact our cash resources and force us to either forego future acquisition opportunities or to pay the purchase price in shares of our common stock, which could have a dilutive effect on our earnings per share.

We maintain our cash primarily in money market funds or their equivalent.  As of March 31, 2015, all of our investments had maturities of less than three months. Accordingly, we do not believe that our investments have significant exposure to interest rate risk.  At March 31, 2015 cash balances held in foreign subsidiaries totaled approximately $61.0 million. These balances are held in local country banks and are not readily available to the U.S. parent company on a tax efficient basis.  The Company would need to accrue and pay income taxes on any cash repatriated to the U.S. parent company.  The Company has made the decision to indefinitely reinvest earnings in its foreign tax jurisdictions.  The Company had in excess of $230 million of liquidity (cash and undrawn line of credit) in the U.S. as of March 31, 2015, which is sufficient to fund its U.S. operations and capital needs, including dividend payments, for the foreseeable future.

Off-balance Sheet Arrangements.

The Company has not created, and is not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating the Company’s business.  The Company does not have any arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to materially affect the Company’s liquidity or the availability of capital resources.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks, which include changes in U.S. and international interest rates as well as changes in currency exchange rates (principally British Pounds Sterling, European Union Euros and Canadian dollars) as measured against the U.S. dollar and each other.

The translation of the financial statements of our operations outside of the United States is impacted by movements in foreign currency exchange rates.  Changes in currency exchange rates as measured against the U.S. dollar may positively or negatively affect income statement, balance sheet and cash flows as expressed in U.S. dollars.  We have no derivative financial instruments and do not use them for trading purposes at this time.  We may enter into foreign currency options or forward exchange contracts aimed at limiting in part the impact of certain currency fluctuations, but as of March 31, 2015 we had no outstanding option or forward exchange contracts.

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Our exposure to market risk for changes in interest rates relates primarily to our variable rate debt.  Our variable rate debt includes short-term borrowings under our credit facilities.  As of March 31, 2015, there were no outstanding balances under our variable rate credit facility.  A hypothetical change in average interest rates of one percentage point is not expected to have a material effect on our financial position, results of operations or cash flows.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2015.  Based upon this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective.

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud.  A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.  Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during the quarterly period ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are involved in various lawsuits, claims, investigations and  proceedings including commercial, employment, consumer, personal injury and health and safety law matters, which are being handled and defended in the ordinary course of business.  In addition, the Company is subject to various assertions, claims, proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that are incorporated in a broad spectrum of products the Company sells.  The Company is also audited by (or has initiated voluntary disclosure agreements with) numerous governmental agencies in various countries, including U.S. Federal and state authorities, concerning potential income tax, sales tax and unclaimed property liabilities.  These matters are in various stages of investigation, negotiation and/or litigation, and are being vigorously defended.  The Company intends to vigorously defend these matters and believes it has strong defenses.  The Company is also being audited by an entity representing 45 states seeking recovery of “unclaimed property”.  The Company is complying with the audit and is providing requested information.

Although the Company does not expect, based on currently available information, that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition or results of operations, the ultimate outcome is inherently unpredictable.  Therefore, judgments could be rendered or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period.  The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable and estimable.  In this regard, the Company establishes accrual estimates for its various lawsuits, claims, investigations and proceedings when it is probable that an asset has been impaired or a liability incurred at the date of the financial statements and the loss can be reasonably estimated. At March 31, 2015 the Company has established accruals for certain of its various lawsuits, claims, investigations and proceedings based upon estimates of the most likely outcome in a range of loss or the minimum amounts in a range of loss if no amount within a range is a more likely estimate.  The Company does not believe that at March 31, 2015 any reasonably possible losses in excess of the amounts accrued would be material to the financial statements.

Following the previously reported independent investigation of Gilbert Fiorentino and Carl Fiorentino by our Audit Committee in 2011 (in response to a whistleblower report) for a variety of improper acts, the subsequent termination of their employment and the entering into by Gilbert Fiorentino of a settlement agreement with the Securities and Exchange Commission, on November 20, 2014 the United States Attorney’s Office (“USAO”) for the Southern District of Florida announced that Gilbert Fiorentino and Carl Fiorentino had been charged with mail fraud, wire fraud and money laundering in connection with a scheme to defraud TigerDirect and Systemax.  Specifically, the charges set forth a scheme to obtain kickbacks and other benefits, and to conceal this illicit income from the IRS, all while Gilbert Fiorentino and Carl Fiorentino were employed as senior executives at the Company’s North American Technology Products business.  On December 2, 2014, the United States Attorney’s Office announced that Gilbert Fiorentino and Carl Fiorentino had pled guilty to various charges, and on March 3, 2015, Gilbert Fiorentino and Carl Fiorentino were sentenced to sixty and eighty  months’ imprisonment, respectively.  Following completion of their sentences, each is to be placed on supervised release for a period of thirty-six months.  The Court held a restitution hearing on April 29, 2015 to determine the amount of restitution Gilbert Fiorentino and Carl Fiorentino are obligated to pay the Company, and assigned consideration of certain elements of the Company’s claims to a magistrate.  The Company cannot predict the outcome of its restitution claims.

The Company's Audit Committee, with the assistance of independent outside counsel, is cooperating with a current investigation by the USAO into allegations arising from the Fiorentino investigation regarding possible executive officer conflicts of interest and conduct related to internal controls and books and records.  The Company does not currently believe these matters have had or will have a material effect on the Company's previously reported consolidated financial statements. However, it is not possible at this time to predict when the current investigation will be completed; what subject(s) will be investigated; what actions, if any, may be taken by the government as a result of its investigation; or whether any of these matters will have a material adverse impact on the Company.

23

Item 6. Exhibits

31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SYSTEMAX INC.
Date: May 7, 2015	By:	/s/ Richard Leeds
	Richard Leeds
	Chairman and Chief Executive Officer
	By:	/s/ Lawrence Reinhold
	Lawrence Reinhold
	Executive Vice President and Chief Financial Officer

25

EX-31.1

CERTIFICATION UNDER SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Richard Leeds, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Systemax Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:  May 7, 2015

/s/ Richard Leeds

Richard Leeds, Chief Executive Officer

EX-31.2

CERTIFICATION UNDER SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Lawrence P. Reinhold, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Systemax Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 7, 2015

/s/ Lawrence P. Reinhold

Lawrence P. Reinhold, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

The undersigned, the Chief Executive Officer of Systemax Inc., hereby certifies that Systemax Inc.’s Form 10-Q for the period ended March 31, 2015 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o (d)), and that the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Systemax Inc.

Dated:May 7, 2015

/s/Richard Leeds

Richard Leeds, Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF CHIEF FINANCIAL OFFICER

The undersigned, the Chief Financial Officer of Systemax Inc., hereby certifies that Systemax Inc.’s Form 10-Q for the period ended March 31, 2015 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78 o (d)), and that the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Systemax Inc.

Dated:May 7, 2015

/s/Lawrence P. Reinhold

Lawrence P. Reinhold, Chief Financial Officer

XML

Legal Proceedings (Details)	0 Months Ended
	Mar. 03, 2015	Mar. 31, 2015 State
Legal Proceedings [Abstract]
Number Of States Seeking Recovery Of Unclaimed Property		45
Duration of sentence to Gilbert Fiorentino for whistleblower report	60 months
Duration of sentence to Carl Fiorentino for whistleblower report	80 months

XML

Net Income (Loss) per Common Share

3 Months Ended

Mar. 31, 2015

Net Income (Loss) per Common Share [Abstract]

Net Income (Loss) per Common Share

3. Net Income (Loss) per Common Share

Net income (loss) per common share - basic was calculated based upon the weighted average number of common shares outstanding during the respective periods presented using the two class method of computing earnings per share.  The two class method was used as the Company has outstanding restricted stock with rights to dividend participation for unvested shares.   Net income (loss) per common share - diluted was calculated based upon the weighted average number of common shares outstanding and included the equivalent shares for dilutive options and restricted stock awards outstanding during the respective periods, including unvested options.  The dilutive effect of outstanding options and restricted stock issued by the Company is reflected in net income (loss) per share - diluted using the treasury stock method.  Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options. In periods when we recognize a net loss, we exclude the impact of outstanding stock awards from the diluted loss per share calculation as their inclusion would have an antidilutive effect. The weighted average number of stock options outstanding included in the computation of diluted earnings per share was zero shares for the three months ended March 31, 2015 and 2014, respectively.  The weighted average number of restricted stock awards included in the computation of diluted earnings per share was zero shares for the three months ended March 31, 2015 and 2014, respectively.  The weighted average number of stock options outstanding excluded from the computation of diluted earnings per share was 0.9 million shares and 1.1 million shares for the three months ended March 31, 2015 and 2014, respectively, due to their antidilutive effect. The weighted average number of restricted awards outstanding excluded from the computation of diluted earnings per share was zero shares and a de minimis number of shares for the three months ended March 31, 2015 and 2014, respectively, due to their antidilutive effect.

XML

Acquisition

3 Months Ended

Mar. 31, 2015

Acquisition [Abstract]

Acquisition

2. Acquisition

On January 30, 2015, the Company’s Industrial Products group (“Industrial”) acquired all of the outstanding equity interests of the Plant Equipment Group (“P.E.G.”) from TAKKT America, a business-to-business direct marketer of maintenance, repair and operations (“MRO”) products with operations in North America for approximately $25.9 million in cash, $1.9 million of which was placed into an escrow account for one year to secure the sellers’ indemnification obligations under the purchase agreement. This acquisition expands the Industrial Products segment presence in the MRO market in North America.  A preliminary allocation of the purchase price was done as of the acquisition date, subject to revision in the future.  The Company acquired approximately $13.2 million in net assets, including approximately $10.0 million in receivables, $11.2 million in inventories, $11.0 million in payables and recorded approximately $12.7 million of goodwill and other intangibles related to this acquisition.  The P.E.G. accounts are included in the accompanying condensed consolidated statement of operations from the date of acquisition.

XML

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash	$ 132.9	$ 165.0
Accounts receivable, net	322.1	355.5
Inventories	272.7	289.9
Prepaid expenses and other current assets	15.5	15.9
Deferred income taxes	1.7	1.7
Total current assets	744.9	828.0
Property, plant and equipment, net	40.5	41.2
Deferred income taxes	10.5	13.5
Goodwill and intangibles	20.0	7.4
Other assets	4.2	4.8
Total assets	820.1	894.9
Current liabilities:
Accounts payable	392.7	420.2
Accrued expenses and other current liabilities	82.2	93.0
Current portion of long term debt	2.3	2.7
Total current liabilities	477.2	515.9
Long-term debt	0.8	0.9
Other liabilities	15.7	18.5
Total liabilities	493.7	535.3
Commitments and contingencies
Shareholders' equity:
Preferred stock	0	0
Common stock	0.4	0.4
Additional paid-in capital	184.6	184.3
Treasury stock	(25.3)	(25.4)
Retained earnings	180.6	209.2
Accumulated other comprehensive loss	(13.9)	(8.9)
Total shareholders' equity	326.4	359.6
Total liabilities and shareholders' equity	$ 820.1	$ 894.9

XML

Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (USD $) In Millions, unless otherwise specified	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock, At Cost [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss)[Member]	Total
Balances at Dec. 31, 2014	$ 0.4	$ 184.3	$ (25.4)	$ 209.2	$ (8.9)	$ 359.6
Balances (in shares) at Dec. 31, 2014	36,808
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense		0.4				0.4
Issuance of restricted stock		(0.1)	0.1			0
Issuance of restricted stock (in shares)	10
Change in cumulative translation adjustment					(5.0)	(5.0)
Net income (loss)				(28.6)		(28.6)
Balances at Mar. 31, 2015	$ 0.4	$ 184.6	$ (25.3)	$ 180.6	$ (13.9)	$ 326.4
Balances (in shares) at Mar. 31, 2015	36,818

XML

Segment Information, by Reportable Segments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Segment	Mar. 31, 2014
Segment Information [Abstract]
Number of reportable segments	3
Net sales [Abstract]
Net sales	$ 785.8	$ 873.4
Operating income (loss) [Abstract]
Operating income (loss)	(19.5)	(1.3)
Reportable Segments [Member] | Industrial Products Group [Member]
Net sales [Abstract]
Net sales	158.9	129.1
Operating income (loss) [Abstract]
Operating income (loss)	9.7	9.7
Reportable Segments [Member] | EMEA Technology Products Group [Member]
Net sales [Abstract]
Net sales	272.6	323.0
Operating income (loss) [Abstract]
Operating income (loss)	(4.8)	1.6
Reportable Segments [Member] | North America Technology Products Group [Member]
Net sales [Abstract]
Net sales	352.8	419.8
Operating income (loss) [Abstract]
Operating income (loss)	(19.7)	(8.2)
Corporate and Other [Member]
Net sales [Abstract]
Net sales	1.5	1.5
Operating income (loss) [Abstract]
Operating income (loss)	$ (4.7)	$ (4.4)

XML

Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Fair Value Measurements [Abstract]
Impairment Charge	$ 0.6

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2015

Basis of Presentation [Abstract]

Basis of Presentation

1. Basis of Presentation

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

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of the Company as of March 31, 2015 and the results of operations for the three month periods ended March 31, 2015 and 2014, statements of comprehensive income (loss) for the three month periods ended March 31, 2015 and 2014, cash flows for the three month periods ended March 31, 2015 and 2014 and changes in shareholders’ equity for the three month period ended March 31, 2015.  The December 31, 2014 condensed consolidated balance sheet has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2014 and for the year then ended included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.  The results for the three month periods ended March 31, 2015 are not necessarily indicative of the results for the entire year.

Systemax manages its business and reports using a 52-53 week fiscal year that ends at midnight on the Saturday closest to December 31.  For clarity of presentation herein, fiscal years and quarters are referred to as if they ended on the traditional calendar month.  The actual fiscal first quarter ended on March 28, 2015 and the prior year ended March 29, 2014.  The first quarters of both 2015 and 2014 included 13 weeks.

XML

Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Condensed Consolidated Statements of Operations (Unaudited)
Net sales	$ 785.8	$ 873.4
Cost of sales	678.0	745.5
Gross profit	107.8	127.9
Selling, general & administrative expenses	122.0	126.8
Special charges	5.3	2.4
Operating income (loss)	(19.5)	(1.3)
Foreign currency exchange loss	7.2	0.5
Interest and other income, net	(0.1)	0
Interest expense	0.3	0.3
Income (loss) before income taxes	(26.9)	(2.1)
Provision for income taxes	1.7	0.9
Net income (loss)	$ (28.6)	$ (3.0)
Net income (loss) per common share:
Basic (in dollars per share)	$ (0.77)	$ (0.08)
Diluted (in dollars per share)	$ (0.77)	$ (0.08)
Weighted average common and common equivalent shares:
Basic (in shares)	37.1	37.0
Diluted (in shares)	37.1	37.0

XML

Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Schedule of Weeks in Period [Line Items]
Number of weeks	13	13
Minimum [Member]
Schedule of Weeks in Period [Line Items]
Number of weeks	52
Maximum [Member]
Schedule of Weeks in Period [Line Items]
Number of weeks	53

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2014	Apr. 29, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	SYSTEMAX INC
Entity Central Index Key	0000945114
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		36,818,158
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015

XML

Acquisition (Details) (Plant Equipment Group [Member], USD $) In Millions, unless otherwise specified	0 Months Ended
	Jan. 30, 2015	Jan. 30, 2015
Plant Equipment Group [Member]
Acquisition [Line Items]
Payments to Acquire Businesses, Gross	$ 25.9
Escrow deposit to secure sellers' indemnification obligations	1.9	1.9
Net assets acquired	13.2	13.2
Receivables acquired	10.0	10.0
Inventories acquired	11.2	11.2
Payables acquired	11.0	11.0
Goodwill and other intangibles recorded	$ 12.7	$ 12.7

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) [Abstract]
Net income (loss)	$ (28.6)	$ (3.0)
Other comprehensive income (loss):
Foreign currency translation	(5.0)	0.4
Total comprehensive loss	$ (33.6)	$ (2.6)

XML

Segment Information

3 Months Ended

Mar. 31, 2015

Segment Information [Abstract]

Segment Information

6. Segment Information

Systemax is primarily a direct marketer of brand name and private label products.  Our operations are organized into three reportable business segments – Industrial Products Group (“Industrial”), EMEA Technology Products Group (“EMEA”) and North America Technology Products Group (“NATG”).

Industrial sells a wide array of MRO industrial products and supplies which are marketed in North America and Mexico.  Most of these products are manufactured by other companies; however, the Company does offer a selection of products that are manufactured for our own design and marketed on a private label basis.

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

NATG sells ICT and CE which are marketed in North America and Puerto Rico.  Most of these products are manufactured by other companies; however, the Company does offer a selection of products that are manufactured for our own design and marketed on a private label basis.

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

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

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

	Three Months Ended
	March 31,
	2015			2014
Net sales:
Industrial	$	158.9		$	129.1
EMEA		272.6			323.0
NATG		352.8			419.8
Corporate and other		1.5			1.5
Consolidated	$	785.8		$	873.4
Operating income (loss):
Industrial	$	9.7		$	9.7
EMEA		(4.8	)		1.6
NATG		(19.7	)		(8.2	)
Corporate and other expenses		(4.7	)		(4.4	)
Consolidated	$	(19.5	)	$	(1.3	)

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

	Three Months Ended March 31,
	2015		2014
Net sales:
United States	$	472.9	$	500.8
United Kingdom		99.4		148.8
France		91.4		96.4
Other Europe		81.8		77.8
Other North America		40.3		49.6
Consolidated	$	785.8	$	873.4

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

XML

Special Charges

3 Months Ended

Mar. 31, 2015

Special Charges [Abstract]

Special Charges

5. Special Charges

The Company’s North America Technology Products Group (“NATG”) segment incurred special charges of approximately $4.6 million in the first quarter of 2015 relating to the previously announced exit from the retail store business in order to accelerate its focus on its business to business (“B2B”) operations, as well as, asset impairments and professional costs. This exit plan includes the closing of substantially all of its retail stores, closing a distribution center, and implementing a general workforce reduction to align available resources with a B2B focus as well as transitioning retail customers to online consumer sales.  Charges related to this action included approximately $2.0 million in workforce reductions and $0.7 million in consulting expenses. NATG also incurred asset impairment charges of $0.3 million.

Additionally NATG incurred $1.6 million of professional 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.

The balance of the workforce reductions from the European restructuring, disclosed in previous filings, and the NATG restructuring plan are included in the Condensed Consolidated Balance Sheet within accrued expenses.

The following table details the associated liabilities related to the Technology Products segments special charges (in millions):

	EMEA - Workforce reductions and Personnel Costs			NATG - Workforce reductions		Total
Balance January 1, 2015	$	4.7		$	-	$	4.7
Charged to expense		-			2.0		2.0
Paid or otherwise settled		(2.3	)		-		(2.3	)
Balance March 31, 2015	$	2.4		$	2.0	$	4.4

The Company conducted an evaluation of its long-lived assets in its Germany operations and as a result of negative cash flows in 2015 and a forecast for continued cash use, concluded that those assets were impaired.  As a result, the Company recorded an impairment charge of approximately $0.3 million, pre-tax, in the first quarter of 2015.

Industrial incurred special charges of approximately $0.4 million in severance costs associated with the integration of P.E.G. completed in first quarter of 2015. This severance cost is included in the Condensed Consolidated Balance Sheet within accrued expenses and will be settled within the year.

XML

Segment Information by Geographic Area (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net sales [Abstract]
Consolidated net sales	$ 785.8	$ 873.4
United States [Member]
Net sales [Abstract]
Consolidated net sales	472.9	500.8
United Kingdom [Member]
Net sales [Abstract]
Consolidated net sales	99.4	148.8
France
Net sales [Abstract]
Consolidated net sales	91.4	96.4
Other Europe [Member]
Net sales [Abstract]
Consolidated net sales	81.8	77.8
Other North America [Member]
Net sales [Abstract]
Consolidated net sales	$ 40.3	$ 49.6

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Net Income (Loss) per Common Share (Details) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Restricted Stock [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Weighted average number of awards outstanding for computation of diluted earnings per share (in shares)	0	0
Weighted average number of awards outstanding excluded from the computation of diluted earnings per share (in shares)	0	0
Stock Option [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Weighted average number of awards outstanding for computation of diluted earnings per share (in shares)	0	0
Weighted average number of awards outstanding excluded from the computation of diluted earnings per share (in shares)	0.9	1.1

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Special Charges (Tables)

3 Months Ended

Mar. 31, 2015

Special Charges [Abstract]

Special Charge Liabilities

The following table details the associated liabilities related to the Technology Products segments special charges (in millions):

	EMEA - Workforce reductions and Personnel Costs			NATG - Workforce reductions		Total
Balance January 1, 2015	$	4.7		$	-	$	4.7
Charged to expense		-			2.0		2.0
Paid or otherwise settled		(2.3	)		-		(2.3	)
Balance March 31, 2015	$	2.4		$	2.0	$	4.4

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Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Measurements [Abstract]

Fair Value Measurements

7. Fair Value Measurements

Financial instruments consist primarily of investments in cash, trade accounts receivable, debt and accounts payable.  The Company estimates the fair value of financial instruments based on interest rates available to the Company.  At March 31, 2015 and 2014, the carrying amounts of cash, accounts receivable and accounts payable are considered to be representative of their respective fair values due to their short-term nature. The Company’s debt is considered to be representative of its fair value because of its variable interest rate.

The fair value of our reporting units with respect to goodwill, non-amortizing intangibles and long lived assets is measured in connection with the Company’s annual impairment testing. The Company performs a qualitative assessment of goodwill and non-amortizing intangibles to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.  If the qualitative assessment shows that the fair value of the reporting unit exceeds its carrying amount, the company is not required to complete the annual two step goodwill impairment test.  If a quantitative analysis is required to be performed for goodwill, the fair value of the reporting unit to which the goodwill has been assigned is determined using a discounted cash flow model.  A discounted cash flow model is also used to determine fair value of indefinite-lived intangibles using projected cash flows of the intangible. Unobservable inputs related to these 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. Long lived assets are assets used in the Company’s operations and include leasehold improvements, warehouse and retail store fixtures and similar property used to generate sales and cash flows.  Long lived assets are tested for impairment utilizing a recoverability test. The recoverability test compares the carrying value of an asset group to the undiscounted cash flows directly attributable to the asset group over the life of the primary asset.  If the undiscounted cash flows of an asset group is less than the carrying value of the asset group, the fair value of the asset group is then measured.  If the fair value is also determined to be less than the carrying value of the asset group, the asset group is impaired.  In 2015 the Company’s evaluation of certain long lived assets in the EMEA and NATG segments, concluded that certain long lived assets were impaired and aggregated impairment charges of approximately $0.6 million, pre-tax, were recorded in the first quarter of 2015.

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Legal Proceedings

3 Months Ended

Mar. 31, 2015

Legal Proceedings [Abstract]

Legal Proceedings

8. Legal Proceedings

The Company and its subsidiaries are involved in various lawsuits, claims, investigations and  proceedings including commercial, employment, consumer, personal injury and health and safety law matters, which are being handled and defended in the ordinary course of business.  In addition, the Company is subject to various assertions, claims, proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that are incorporated in a broad spectrum of products the Company sells.  The Company is also audited by (or has initiated voluntary disclosure agreements with) numerous governmental agencies in various countries, including U.S. Federal and state authorities, concerning potential income tax, sales tax and unclaimed property liabilities.  These matters are in various stages of investigation, negotiation and/or litigation, and are being vigorously defended.  The Company intends to vigorously defend these matters and believes it has strong defenses.  The Company is also being audited by an entity representing 45 states seeking recovery of “unclaimed property”.  The Company is complying with the audit and is providing requested information.

Although the Company does not expect, based on currently available information, that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial position or results of operations, the ultimate outcome is inherently unpredictable.  Therefore, judgments could be rendered or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period.  The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable and estimable.  In this regard, the Company establishes accrual estimates for its various lawsuits, claims, investigations and proceedings when it is probable that an asset has been impaired or a liability incurred at the date of the financial statements and the loss can be reasonably estimated. At March 31, 2015 the Company has established accruals for certain of its various lawsuits, claims, investigations and proceedings based upon estimates of the most likely outcome in a range of loss or the minimum amounts in a range of loss if no amount within a range is a more likely estimate.  The Company does not believe that at March 31, 2015 any reasonably possible losses in excess of the amounts accrued would be material to the financial statements.

Following the previously reported independent investigation of Gilbert Fiorentino and Carl Fiorentino by our Audit Committee in 2011 (in response to a whistleblower report) for a variety of improper acts, the subsequent termination of their employment and the entering into by Gilbert Fiorentino of a settlement agreement with the Securities and Exchange Commission, on November 20, 2014 the United States Attorney’s Office (“USAO”) for the Southern District of Florida announced that Gilbert Fiorentino and Carl Fiorentino had been charged with mail fraud, wire fraud and money laundering in connection with a scheme to defraud TigerDirect and Systemax.  Specifically, the charges set forth a scheme to obtain kickbacks and other benefits, and to conceal this illicit income from the IRS, all while Gilbert Fiorentino and Carl Fiorentino were employed as senior executives at the Company’s NATG business.  On December 2, 2014, the United States Attorney’s Office announced that Gilbert Fiorentino and Carl Fiorentino had pled guilty to various charges, and on March 3, 2015, Gilbert Fiorentino and Carl Fiorentino were sentenced to sixty and eighty months’ imprisonment, respectively.  The Court held a preliminary restitution hearing on April 29, 2015 to determine the amount of restitution Gilbert Fiorentino and Carl Fiorentino are obligated to pay the Company, and assigned consideration of certain elements of the Company’s claims to a magistrate.  The Company cannot predict the outcome of its restitution claims.

The Company's Audit Committee, with the assistance of independent outside counsel, is cooperating with a current investigation by the USAO into allegations arising from the Fiorentino investigation regarding possible executive officer conflicts of interest and conduct related to internal controls and books and records.  The Company does not currently believe these matters have had or will have a material effect on the Company's previously reported consolidated financial statements. However, it is not possible at this time to predict when the current investigation will be completed; what subject(s) will be investigated; what actions, if any, may be taken by the government as a result of its investigation; or whether any of these matters will have a material adverse impact on the Company.

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

Segment Information [Abstract]

Financial Information by Reportable Segment

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

	Three Months Ended
	March 31,
	2015			2014
Net sales:
Industrial	$	158.9		$	129.1
EMEA		272.6			323.0
NATG		352.8			419.8
Corporate and other		1.5			1.5
Consolidated	$	785.8		$	873.4
Operating income (loss):
Industrial	$	9.7		$	9.7
EMEA		(4.8	)		1.6
NATG		(19.7	)		(8.2	)
Corporate and other expenses		(4.7	)		(4.4	)
Consolidated	$	(19.5	)	$	(1.3	)

Financial Information by Geographic Area

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

	Three Months Ended March 31,
	2015		2014
Net sales:
United States	$	472.9	$	500.8
United Kingdom		99.4		148.8
France		91.4		96.4
Other Europe		81.8		77.8
Other North America		40.3		49.6
Consolidated	$	785.8	$	873.4

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Special Charges (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Special Charges [Abstract]
Special Charges	$ 5.3	$ 2.4
Asset Impairment Charges	0.6	0
EMEA Technology Products Group [Member] | Workforce Reductions and Personnel Costs [Member]
Special Charges [Abstract]
Balance beginning of period	4.7
Charged to expense	0
Paid or otherwise settled	(2.3)
Balance end of period	2.4
North America Technology Products Group [Member]
Special Charges [Abstract]
Special Charges	4.6
Asset Impairment Charges	0.3
North America Technology Products Group [Member] | Workforce Reductions [Member]
Special Charges [Abstract]
Balance beginning of period	0
Charged to expense	2.0
Paid or otherwise settled	0
Balance end of period	2.0
Special Charges	2.0
North America Technology Products Group [Member] | Consulting Expenses [Member]
Special Charges [Abstract]
Special Charges	0.7
North America Technology Products Group [Member] | Professional Costs [Member]
Special Charges [Abstract]
Special Charges	1.6
Technology Products [Member]
Special Charges [Abstract]
Balance beginning of period	4.7
Charged to expense	2.0
Paid or otherwise settled	(2.3)
Balance end of period	4.4
Technology Products [Member] | Germany [Member]
Special Charges [Abstract]
Asset Impairment Charges	0.3
Industrial Products Group [Member] | Severance [Member]
Special Charges [Abstract]
Special Charges	$ 0.4

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net income (loss)	$ (28.6)	$ (3.0)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	3.8	4.2
Asset impairment charges	0.6	0
Provision (benefit) for deferred income taxes	0.5	(0.4)
Provision for returns and doubtful accounts	0.9	2.6
Compensation expense related to equity compensation plans	0.4	0.5
Changes in operating assets and liabilities:
Accounts receivable	23.0	(42.1)
Inventories	22.1	(4.5)
Prepaid expenses and other current assets	3.0	0.2
Income taxes payable (receivable)	0.1	7.7
Accounts payable	(17.9)	22.5
Accrued expenses and other liabilities	(13.6)	(7.6)
Net cash used in operating activities	(5.7)	(19.9)
Cash flows from investing activities:
Purchases of property, plant and equipment	(3.8)	(1.7)
Purchase of P.E.G., net of cash acquired	(24.9)	0
Net cash used in investing activities	(28.7)	(1.7)
Cash flows from financing activities:
Repayments of capital lease obligations	(0.5)	(0.6)
Net cash used in financing activities	(0.5)	(0.6)
Effects of exchange rates on cash	2.8	0.5
Net decrease in cash	(32.1)	(21.7)
Cash - beginning of period	165.0	181.4
Cash - end of period	$ 132.9	$ 159.7

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Credit Facilities and Long Term Debt

3 Months Ended

Mar. 31, 2015

Credit Facilities and Long Term Debt [Abstract]

Credit Facilities and Long Term Debt

4. Credit Facilities and Long Term Debt

The Company maintains a $125.0 million (which may be increased to $200.0 million, subject to certain conditions) secured revolving credit agreement with a group of financial institutions which provides for borrowings in the United States. The credit facility has a five year term and expires on October 26, 2015 and the Company expects to renew or extend the facility on or before that date in 2015. Availability is subject to a borrowing base formula that takes into account eligible receivables and eligible inventory. Borrowings are secured by substantially all of the Company’s assets, including accounts receivable, inventory and certain other assets, subject to limited exceptions. The credit agreement contains certain operating, financial and other covenants, including limits on annual levels of capital expenditures, availability tests related to payments of dividends and stock repurchases and fixed charge coverage tests related to acquisitions. The revolving credit agreement requires that a minimum level of availability be maintained. If such availability is not maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and up to 40% of qualified inventories. The interest rate under this facility is computed at applicable market rates based on LIBOR or the Prime Rate, plus an applicable margin. The applicable margin varies based on borrowing base availability. As of March 31, 2015, eligible collateral under this agreement was $104.4 million, total availability was $98.3 million, total outstanding letters of credit were $6.1 million and there were no outstanding advances. The Company was in compliance with all of the covenants under this facility as of March 31, 2015.

The Company (through a subsidiary) has an outstanding Bond financing with the Development Authority of Jefferson, Georgia (the “Authority”).  The Bonds were issued by the Authority and purchased by GE Government Finance Inc., and mature on October 1, 2018.  The proceeds from the Bond were used to finance capital equipment purchased for the Company’s distribution facility located in Jefferson, Georgia.  The purchase and installation of the equipment for the facility was completed by December 31, 2011. Pursuant to the transaction, the Company transferred to the Authority, for consideration consisting of the Bond proceeds, ownership of the equipment and the Authority leased the equipment to the Company’s subsidiary pursuant to a capital equipment lease expiring October 1, 2018.  Under the capital equipment lease, the Company has the right to acquire ownership of the equipment at any time for a purchase price sufficient to pay off all principal and interest on the Bonds, plus $1.00.  As of March 31, 2015 there was approximately $1.7 million outstanding against this financing facility.

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Credit Facilities and Long Term Debt (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Line of Credit Facility [Line Items]
Recovery zone facility bond, maturity date	Oct. 01, 2018
Capital equipment lease maturity date	Oct. 01, 2018
Additional amount to be paid over principal and interest to acquire ownership	$ 1.00
Long-term debt, outstanding amount	1,700,000
Systemax Inc. [Member]
Line of Credit Facility [Line Items]
Secured revolving credit agreement, current borrowing capacity	125,000,000
Secured revolving credit agreement, maximum borrowing capacity	200,000,000
Term of credit facility	5 years
Credit facility, maturing date	Oct. 26, 2015
Percentage of eligible accounts receivable for borrowings, maximum (in hundredths)	85.00%
Percentage of qualified inventories for borrowings, maximum (in hundredths)	40.00%
Eligible collateral letters of credit	104,400,000
Availability under line of credit	98,300,000
Total outstanding letters of credit	6,100,000
Outstanding borrowings	$ 0