Delaware
|
1-13792
|
11-3262067
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CRF 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit
Number
|
Description
|
|
99.1
|
Press Release of Systemax Inc., dated August 4, 2015, regarding financial results for the second quarter ended June 30, 2015.
|
SYSTEMAX INC.
|
|
By: /s/ Eric Lerner
|
|
Name: Eric Lerner
|
|
Title: Senior Vice President
|
|
Dated: August 4, 2015
|
99.1 | Press Release of Systemax Inc., dated August 4, 2015, regarding financial results for the second quarter ended June 30, 2015. |
Performance Summary
(U.S. dollars in millions, except per share data)
|
||||||||||||||||
Highlights
|
Quarter Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
GAAP Results
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Net sales
|
$
|
740.0
|
$
|
831.1
|
$
|
1,525.8
|
$
|
1,704.5
|
||||||||
Gross profit
|
$
|
111.5
|
$
|
123.3
|
$
|
219.3
|
$
|
251.2
|
||||||||
Gross margin
|
15.1
|
%
|
14.8
|
%
|
14.4
|
%
|
14.7
|
%
|
||||||||
Operating income (loss)
|
$
|
(28.5
|
)
|
$
|
(5.4
|
)
|
$
|
(48.0
|
)
|
$
|
(6.7
|
)
|
||||
Operating margin
|
(3.9
|
)%
|
(0.6
|
)%
|
(3.1
|
)%
|
(0.4
|
)%
|
||||||||
Net income (loss)
|
$
|
(28.4
|
)
|
$
|
(6.2
|
)
|
$
|
(57.0
|
)
|
$
|
(9.2
|
)
|
||||
Diluted net income (loss) per share
|
$
|
(0.77
|
)
|
$
|
(0.17
|
)
|
$
|
(1.54
|
)
|
$
|
(0.25
|
)
|
||||
Non-GAAP Results*
|
||||||||||||||||
Net same store sales
|
$
|
734.7
|
$
|
769.1
|
$
|
1,448.1
|
$
|
1,552.9
|
||||||||
Adjusted operating income (loss)
|
$
|
2.2
|
$
|
1.7
|
$
|
(6.0
|
)
|
$
|
4.2
|
|||||||
Adjusted operating margin
|
0.3
|
%
|
0.2
|
%
|
(0.4
|
)%
|
0.3
|
%
|
● | Consolidated sales declined 11.0% to $740.0 million in U.S. dollars. On a constant currency basis, excluding both the June 2014 acquisition of SCC Services BV in the Netherlands (renamed Misco Solutions) and the January 2015 acquisition of the Plant Equipment Group (P.E.G.) in North America, and excluding the sales of closed retail stores, sales declined 2.9%. |
● | Industrial Product Group sales grew 27.3% to $180.9 million in U.S. dollars. On a constant currency basis and excluding P.E.G., sales grew 10.0%. |
● | EMEA Technology Group sales declined 8.8% to $252.6 million in U.S. dollars. On a constant currency basis and excluding Misco Solutions, sales increased 0.6%. |
● | North America Technology Group (NATG) sales declined 25.7% to $305.1 million in U.S. dollars. On a constant currency basis and excluding the sales of closed retail stores, sales declined 11.5%. |
● | Non-GAAP adjusted operating income was $2.2 million compared to income of $1.7 million last year. Excluding Misco Solutions and P.E.G., non-GAAP operating results would have been income of $1.8 million. GAAP operating loss was $28.5 million compared to a loss of $5.4 million last year. |
● | Non-GAAP diluted net income per share was $0.06. GAAP diluted net loss per share was $(0.77). |
● | Consolidated sales declined 10.5% to $1.5 billion in U.S. dollars. On a constant currency basis, excluding both the June 2014 acquisition of Misco Solutions and the January 2015 acquisition of P.E.G., and excluding the sales of closed retail stores, sales declined 6.3%. |
● | Industrial Product Group sales grew 25.3% to $339.8 million in U.S. dollars. On a constant currency basis and excluding P.E.G., sales grew 10.4%. |
● | EMEA Technology Group sales declined 12.5% to $525.2 million in U.S. dollars. On a constant currency basis and excluding Misco Solutions, sales declined 5.0%. |
● | NATG sales declined 20.8% to $657.9 million in U.S. dollars. On a constant currency basis and excluding the sales of closed retail stores, sales declined 14.4%. |
● | Non-GAAP operating loss was $6.0 million compared to income of $4.2 million last year. Excluding Misco Solutions and P.E.G., non-GAAP operating results would have been a loss of $6.7 million. GAAP operating loss was $48.0 million compared to a loss of $6.7 million last year. |
● | Non-GAAP diluted net loss per share was $(0.21). GAAP diluted net loss per share was $(1.54). |
Investor/Media Contacts:
|
|
Mike Smargiassi / Nancy Zakhary
|
|
Brainerd Communicators, Inc.
|
|
212-986-6667
|
|
smarg@braincomm.com
|
|
nancy@braincomm.com
|
Supplemental Channel Sales Summary
(in millions)
|
||||||||||||||||||||||||||||||||||||||||
Channel
|
Quarter Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||||||||||
2015
|
% of Sales
|
Change y/y
|
2014
|
% of Sales
|
2015
|
% of Sales
|
Change y/y
|
2014
|
% of Sales
|
|||||||||||||||||||||||||||||||
Industrial Products
|
$
|
180.9
|
24.5
|
%
|
27.3
|
%
|
$
|
142.1
|
17.1
|
%
|
$
|
339.8
|
22.3
|
%
|
25.3
|
%
|
$
|
271.2
|
15.9
|
%
|
||||||||||||||||||||
Technology Products – EMEA
|
$
|
252.6
|
34.1
|
%
|
(8.8
|
)%
|
$
|
277.1
|
33.3
|
%
|
$
|
525.2
|
34.4
|
%
|
(12.5
|
)%
|
$
|
600.1
|
35.2
|
%
|
||||||||||||||||||||
Technology Products – NA
|
$
|
305.1
|
41.2
|
%
|
(25.7
|
)%
|
$
|
410.5
|
49.4
|
%
|
$
|
657.9
|
43.1
|
%
|
(20.8
|
)%
|
$
|
830.3
|
48.7
|
%
|
||||||||||||||||||||
Corporate and Other
|
$
|
1.4
|
0.2
|
%
|
0.0
|
%
|
$
|
1.4
|
0.2
|
%
|
$
|
2.9
|
0.2
|
%
|
0.0
|
%
|
$
|
2.9
|
0.2
|
%
|
||||||||||||||||||||
Consolidated Sales
|
$
|
740.0
|
100.0
|
%
|
(11.0
|
)%
|
$
|
831.1
|
100.0
|
%
|
$
|
1,525.8
|
100.0
|
%
|
(10.5
|
)%
|
$
|
1,704.5
|
100.0
|
%
|
Supplemental Business Unit Operating Results Summary
(in millions)
|
||||||||||||||||||||||||||||||||
GAAP Operating Income (Loss)
|
||||||||||||||||||||||||||||||||
Business Unit
|
Quarter Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||
2015
|
Margin
|
2014
|
Margin
|
2015
|
Margin
|
2014
|
Margin
|
|||||||||||||||||||||||||
Industrial Products
|
$
|
14.0
|
7.7
|
%
|
$
|
12.4
|
8.7
|
%
|
$
|
23.7
|
7.0
|
%
|
$
|
22.1
|
8.1
|
%
|
||||||||||||||||
Technology Products – EMEA
|
$
|
(1.6
|
)
|
(0.6
|
)%
|
$
|
(7.8
|
)
|
(2.8
|
)%
|
$
|
(6.4
|
)
|
(1.2
|
)%
|
$
|
(6.2
|
)
|
(1.0
|
)%
|
||||||||||||
Technology Products – NA
|
$
|
(35.6
|
)
|
(11.7
|
)%
|
$
|
(5.4
|
)
|
(1.3
|
)%
|
$
|
(55.3
|
)
|
(8.4
|
)%
|
$
|
(13.6
|
)
|
(1.6
|
)%
|
||||||||||||
Corporate and Other
|
$
|
(5.3
|
)
|
NM
|
$
|
(4.6
|
)
|
NM
|
$
|
(10.0
|
)
|
NM
|
$
|
(9.0
|
)
|
NM
|
||||||||||||||||
Consolidated Operating Income (Loss)
|
$
|
(28.5
|
)
|
(3.9
|
)%
|
$
|
(5.4
|
)
|
(0.6
|
)%
|
$
|
(48.0
|
)
|
(3.1
|
)%
|
$
|
(6.7
|
)
|
(0.4
|
)%
|
||||||||||||
Non-GAAP* Operating Income (Loss)
|
||||||||||||||||||||||||||||||||
Industrial Products
|
$
|
13.3
|
7.4
|
%
|
$
|
12.9
|
9.1
|
%
|
$
|
23.7
|
7.0
|
%
|
$
|
23.2
|
8.6
|
%
|
||||||||||||||||
Technology Products – EMEA
|
$
|
(0.8
|
)
|
(0.3
|
)%
|
$
|
(2.3
|
)
|
(0.8
|
)%
|
$
|
(5.2
|
)
|
(1.0
|
)%
|
$
|
1.3
|
0.2
|
%
|
|||||||||||||
Technology Products – NA
|
$
|
(5.1
|
)
|
(1.7
|
)%
|
$
|
(4.5
|
)
|
(1.1
|
)%
|
$
|
(14.9
|
)
|
(2.3
|
)%
|
$
|
(11.8
|
)
|
(1.4
|
)%
|
||||||||||||
Corporate and Other
|
$
|
(5.2
|
)
|
NM
|
$
|
(4.4
|
)
|
NM
|
$
|
(9.6
|
)
|
NM
|
$
|
(8.5
|
)
|
NM
|
||||||||||||||||
Consolidated Operating Income (Loss)
|
$
|
2.2
|
0.3
|
%
|
$
|
1.7
|
0.2
|
%
|
$
|
(6.0
|
)
|
(0.4
|
)%
|
$
|
4.2
|
0.2
|
%
|
Quarter Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net sales
|
$
|
740.0
|
$
|
831.1
|
$
|
1,525.8
|
$
|
1,704.5
|
||||||||
Cost of sales
|
628.5
|
707.8
|
1,306.5
|
1,453.3
|
||||||||||||
Gross profit
|
111.5
|
123.3
|
219.3
|
251.2
|
||||||||||||
Gross margin
|
15.1
|
%
|
14.8
|
%
|
14.4
|
%
|
14.7
|
%
|
||||||||
Selling, general and administrative expenses
|
111.5
|
122.7
|
233.5
|
249.5
|
||||||||||||
Special charges
|
28.5
|
6.0
|
33.8
|
8.4
|
||||||||||||
Operating income (loss)
|
(28.5
|
)
|
(5.4
|
)
|
(48.0
|
)
|
(6.7
|
)
|
||||||||
Operating margin
|
(3.9
|
)%
|
(0.6
|
)%
|
(3.1
|
)%
|
(0.4
|
)%
|
||||||||
Interest and other expense, net
|
(1.2
|
)
|
1.3
|
6.2
|
2.1
|
|||||||||||
Income (loss) before income taxes
|
(27.3
|
)
|
(6.7
|
)
|
(54.2
|
)
|
(8.8
|
)
|
||||||||
Provision for (benefit from) income taxes
|
1.1
|
(0.5
|
)
|
2.8
|
0.4
|
|||||||||||
Net income (loss)
|
$
|
(28.4
|
)
|
$
|
(6.2
|
)
|
$
|
(57.0
|
)
|
$
|
(9.2
|
)
|
||||
Net margin
|
(3.8
|
)%
|
(0.7
|
)%
|
(3.7
|
)%
|
(0.5
|
)%
|
||||||||
Net income (loss) per common share:
|
||||||||||||||||
Basic
|
$
|
(0.77
|
)
|
$
|
(0.17
|
)
|
$
|
(1.54
|
)
|
$
|
(0.25
|
)
|
||||
Diluted
|
$
|
(0.77
|
)
|
$
|
(0.17
|
)
|
$
|
(1.54
|
)
|
$
|
(0.25
|
)
|
||||
Weighted average common and common equivalent shares:
|
||||||||||||||||
Basic
|
37.1
|
37.1
|
37.1
|
37.0
|
||||||||||||
Diluted
|
37.1
|
37.1
|
37.1
|
37.0
|
June 30,
|
December 31,
|
|||||||
2015
(Unaudited)
|
2014
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
144.0
|
$
|
165.0
|
||||
Accounts receivable, net
|
320.4
|
355.5
|
||||||
Inventories
|
250.2
|
289.9
|
||||||
Prepaid expenses and other current assets
|
19.0
|
17.6
|
||||||
Total current assets
|
733.6
|
828.0
|
||||||
Property, plant and equipment, net
|
39.7
|
41.2
|
||||||
Goodwill, intangibles and other assets
|
32.0
|
25.7
|
||||||
Total assets
|
$
|
805.3
|
$
|
894.9
|
||||
Current liabilities:
|
||||||||
Short-term debt
|
$
|
1.7
|
$
|
2.7
|
||||
Accounts payable and accrued expenses
|
471.1
|
513.2
|
||||||
Total current liabilities
|
472.8
|
515.9
|
||||||
Long-term debt
|
0.7
|
0.9
|
||||||
Other liabilities
|
30.1
|
18.5
|
||||||
Shareholders’ equity
|
301.7
|
359.6
|
||||||
Total liabilities and shareholders’ equity
|
$
|
805.3
|
$
|
894.9
|
Quarter Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Industrial Products
|
$
|
14.0
|
$
|
12.4
|
$
|
23.7
|
$
|
22.1
|
||||||||
Technology Products - EMEA
|
(1.6
|
)
|
(7.8
|
)
|
(6.4
|
)
|
(6.2
|
)
|
||||||||
Technology Products - NA
|
(35.6
|
)
|
(5.4
|
)
|
(55.3
|
)
|
(13.6
|
)
|
||||||||
Corporate and Other
|
(5.3
|
)
|
(4.6
|
)
|
(10.0
|
)
|
(9.0
|
)
|
||||||||
GAAP operating income (loss)
|
(28.5
|
)
|
(5.4
|
)
|
(48.0
|
)
|
(6.7
|
)
|
||||||||
Non-GAAP adjustments:
|
||||||||||||||||
Industrial Products:
|
||||||||||||||||
Integration Costs
|
0.0
|
0.0
|
0.4
|
0.0
|
||||||||||||
Intangible asset amortization
|
0.1
|
0.0
|
0.1
|
0.0
|
||||||||||||
Stock based and other special compensation(1)
|
(0.8
|
)
|
0.5
|
(0.5
|
)
|
1.1
|
||||||||||
Total Non-GAAP Adjustments – Industrial Products
|
(0.7
|
)
|
0.5
|
(0.0
|
)
|
1.1
|
||||||||||
Technology Products - EMEA:
|
||||||||||||||||
Severance and other reorganization related charges(2)
|
0.7
|
5.3
|
0.7
|
7.0
|
||||||||||||
Asset Impairment Charges
|
0.0
|
0.0
|
0.3
|
0.0
|
||||||||||||
Stock based compensation
|
0.0
|
0.0
|
0.0
|
0.1
|
||||||||||||
Intangible asset amortization
|
0.1
|
0.2
|
0.2
|
0.4
|
||||||||||||
Total Non-GAAP Adjustments: Technology Products EMEA
|
0.8
|
5.5
|
1.2
|
7.5
|
||||||||||||
Technology Products - NA:
|
||||||||||||||||
Severance and other reorganization related charges (3)
|
28.8
|
0.4
|
36.8
|
0.8
|
||||||||||||
Asset Impairment Charges
|
0.6
|
0.0
|
0.9
|
0.0
|
||||||||||||
Investigation Costs(4)
|
1.1
|
0.4
|
2.7
|
0.6
|
||||||||||||
Stock Based Compensation
|
0.0
|
0.1
|
0.0
|
0.1
|
||||||||||||
Intangible asset amortization
|
0.0
|
0.0
|
0.0
|
0.3
|
||||||||||||
Total Non-GAAP Adjustments : Technology Products NA
|
30.5
|
0.9
|
40.4
|
1.8
|
||||||||||||
Corporate and Other:
|
||||||||||||||||
Stock based compensation
|
0.1
|
0.2
|
0.4
|
0.5
|
||||||||||||
Total Non-GAAP Adjustments: Corporate and Other
|
0.1
|
0.2
|
0.4
|
0.5
|
||||||||||||
Industrial Products
|
13.3
|
12.9
|
23.7
|
23.2
|
||||||||||||
Technology Products- EMEA
|
(0.8
|
)
|
(2.3
|
)
|
(5.2
|
)
|
1.3
|
|||||||||
Technology Products- NA
|
(5.1
|
)
|
(4.5
|
)
|
(14.9
|
)
|
(11.8
|
)
|
||||||||
Corporate and Other
|
(5.2
|
)
|
(4.4
|
)
|
(9.6
|
)
|
(8.5
|
)
|
||||||||
Non-GAAP operating income (loss)
|
$
|
2.2
|
$
|
1.7
|
$
|
(6.0
|
)
|
$
|
4.2
|
(1) | Includes expense from stock options, restricted stock grants and a benefit recorded in the quarter related to special compensation arrangement for a business unit leader. |
(2) | Includes 0.$7M in costs associated with the previously disclosed exit of the CEO of EMEA Tech Operations |
(3) | Second quarter 2015 includes $24.2M in lease related exit costs, $2.0M in foregone profit during the inventory liquidation process, $1.8M in consulting expense, and $0.8M in severance expense. |
(4) | Includes legal costs related to the investigation, settlement, prosecution, and restitution proceedings related to the Fiorentinos; and professional costs related to the investigation being conducted at the request of the US Attorney for the Southern District of Florida. |
Quarter Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
GAAP
|
||||||||||||||||
Net income (loss)
|
$
|
(28.4
|
)
|
$
|
(6.2
|
)
|
$
|
(57.0
|
)
|
$
|
(9.2
|
)
|
||||
Provision for (benefit from) income taxes
|
1.1
|
(0.5
|
)
|
2.8
|
0.4
|
|||||||||||
Income (loss) before income taxes
|
(27.3
|
)
|
(6.7
|
)
|
(54.2
|
)
|
(8.8
|
)
|
||||||||
Interest and other expense, net
|
(1.2
|
)
|
1.3
|
6.2
|
2.1
|
|||||||||||
Operating income (loss)
|
(28.5
|
)
|
(5.4
|
)
|
(48.0
|
)
|
(6.7
|
)
|
||||||||
Non-GAAP
|
||||||||||||||||
Non-recurring adjustments
|
31.2
|
6.1
|
41.8
|
8.4
|
||||||||||||
Recurring adjustments
|
(0.5
|
)
|
1.0
|
0.2
|
2.5
|
|||||||||||
Adjusted operating income (loss)
|
2.2
|
1.7
|
(6.0
|
)
|
4.2
|
|||||||||||
Interest and other expense, net
|
(1.2
|
)
|
1.3
|
6.2
|
2.1
|
|||||||||||
Income (loss) before income taxes
|
3.4
|
0.4
|
(12.2
|
)
|
2.1
|
|||||||||||
Normalized provision for (benefit from) income taxes
|
1.2
|
0.1
|
(4.3
|
)
|
0.7
|
|||||||||||
Normalized effective tax rate(1)
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||||||
Non-GAAP net income (loss)
|
$
|
2.2
|
$
|
0.3
|
$
|
(7.9
|
)
|
$
|
1.4
|
|||||||
GAAP diluted net income (loss) per share
|
$
|
(0.77
|
)
|
$
|
(0.17
|
)
|
$
|
(1.54
|
)
|
$
|
(0.25
|
)
|
||||
Non-GAAP diluted net income (loss) per share
|
$
|
0.06
|
$
|
0.01
|
$
|
(0.21
|
)
|
$
|
0.04
|
(1) | Effective tax rate of 35% used in all periods. |