Segment Information

6 Months Ended

Jun. 30, 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 (“IPG”), EMEA Technology Products Group (“EMEA”) and North America Technology Products Group (“NATG”).

IPG 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.  Substantially all 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.  Substantially all 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 IPG, EMEA and NATG segments sell dissimilar products.  IPG 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 as compared to IPG.  This results in higher operating margin for the IPG segment.  Each segment incurs specifically identifiable selling, general and administrative expenses, with the selling, general and administrative expenses for the IPG segment being higher as a percentage of sales than those of the EMEA and NATG segments as a result of the IPG 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 IPG segment’s vendors generally do not provide 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 June 30						Six Months Ended June 30
	2015			2014			2015			2014
Net sales:
IPG	$	180.9		$	142.1		$	339.8		$	271.2
EMEA		252.6			277.1			525.2			600.1
NATG		305.1			410.5			657.9			830.3
Corporate and other		1.4			1.4			2.9			2.9
Consolidated	$	740.0		$	831.1		$	1,525.8		$	1,704.5
Operating income (loss):
IPG	$	14.0		$	12.4		$	23.7		$	22.1
EMEA		(1.6	)		(7.8	)		(6.4	)		(6.2	)
NATG		(35.6	)		(5.4	)		(55.3	)		(13.6	)
Corporate and other expenses		(5.3	)		(4.6	)		(10.0	)		(9.0	)
Consolidated	$	(28.5	)	$	(5.4	)	$	(48.0	)	$	(6.7	)

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

	Three Months Ended June 30				Six Months Ended June 30
	2015		2014		2015		2014
Net sales:
United States	$	455.9	$	508.9	$	928.8	$	1,009.7
United Kingdom		81.3		108.9		180.7		257.7
France		90.6		95.1		182.0		191.5
Other Europe		80.7		73.1		162.5		150.9
Other North America		31.5		45.1		71.8		94.7
Consolidated	$	740.0	$	831.1	$	1,525.8	$	1,704.5

Revenue is attributed to countries based on the location of the selling subsidiary.