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 November 3, 2015, regarding financial results for the third quarter ended September 30, 2015.
|
SYSTEMAX INC.
|
|
By: /s/ Eric Lerner
|
|
Name: Eric Lerner
|
|
Title: Senior Vice President
|
99.1 | Press Release of Systemax Inc., dated November 3, 2015, regarding financial results for the third quarter ended September 30, 2015. |
Performance Summary
(U.S. dollars in millions, except per share data)
|
||||||||||||||||
Highlights
|
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
GAAP Results
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Net sales
|
$
|
699.3
|
$
|
825.4
|
$
|
2,225.1
|
$
|
2,529.9
|
||||||||
Gross profit
|
$
|
100.6
|
$
|
117.5
|
$
|
319.9
|
$
|
368.7
|
||||||||
Gross margin
|
14.4
|
%
|
14.2
|
%
|
14.4
|
%
|
14.6
|
%
|
||||||||
Operating income (loss)
|
$
|
(8.2
|
)
|
$
|
(2.7
|
)
|
$
|
(56.2
|
)
|
$
|
(9.4
|
)
|
||||
Operating margin
|
(1.2
|
)%
|
(0.3
|
)%
|
(2.5
|
)%
|
(0.4
|
)%
|
||||||||
Net income (loss)
|
$
|
(10.3
|
)
|
$
|
(2.8
|
)
|
$
|
(67.3
|
)
|
$
|
(12.0
|
)
|
||||
Diluted net income (loss) per share
|
$
|
(0.28
|
)
|
$
|
(0.08
|
)
|
$
|
(1.81
|
)
|
$
|
(0.32
|
)
|
||||
Non-GAAP Results*
|
||||||||||||||||
Net same store sales
|
$
|
717.5
|
$
|
743.4
|
$
|
2,150.6
|
$
|
2,271.3
|
||||||||
Adjusted operating income (loss)
|
$
|
(5.4
|
)
|
$
|
(0.1
|
)
|
$
|
(11.4
|
)
|
$
|
4.1
|
|||||
Adjusted operating margin
|
(0.8
|
)%
|
0.0
|
%
|
(0.5
|
)%
|
0.2
|
%
|
· | Consolidated sales declined 15.3% to $699.3 million in U.S. dollars. On a constant currency basis, excluding 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 3.5%. |
· | Industrial Product Group sales grew 26.2% to $180.1 million in U.S. dollars. On a constant currency basis and excluding P.E.G., sales grew 10.2%. |
· | EMEA Technology Group sales declined 13.4% to $241.8 million in U.S. dollars. On a constant currency basis, sales were flat. |
· | North America Technology Group (NATG) sales declined 31.3% to $276.1 million in U.S. dollars. On a constant currency basis and excluding the sales of closed retail stores, sales declined 12.6%. |
· | Non-GAAP adjusted operating loss was $5.4 million compared to a loss of $0.1 million last year. Excluding P.E.G., non-GAAP operating results would have been a loss of $5.9 million. GAAP operating loss was $8.2 million compared to a loss of $2.7 million last year. |
· | Non-GAAP diluted net loss per share was $(0.12). GAAP diluted net loss per share was $(0.28). |
· | Consolidated sales declined 12.1% to $2.2 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 5.3%. |
· | Industrial Product Group sales grew 25.6% to $519.9 million in U.S. dollars. On a constant currency basis and excluding P.E.G., sales grew 10.3%. |
· | EMEA Technology Group sales declined 12.8% to $767.0 million in U.S. dollars. On a constant currency basis and excluding Misco Solutions, sales declined 3.4%. |
· | NATG sales declined 24.2% to $934.0 million in U.S. dollars. On a constant currency basis and excluding the sales of closed retail stores, sales declined 13.6%. |
· | Non-GAAP adjusted operating loss was $11.4 million compared to income of $4.1 million last year. Excluding Misco Solutions and P.E.G., non-GAAP operating results would have been a loss of $13.1 million. GAAP operating loss was $56.2 million compared to a loss of $9.4 million last year. |
· | Non-GAAP diluted net loss per share was $(0.33). GAAP diluted net loss per share was $(1.81). |
Supplemental Channel Sales Summary
(in millions)
|
||||||||||||||||||||||||||||||||||||||||
Channel
|
Quarter Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||||||||||
2015
|
% of
Sales
|
Change
y/y
|
2014
|
% of
Sales
|
2015
|
% of
Sales
|
Change
y/y
|
2014
|
% of
Sales
|
|||||||||||||||||||||||||||||||
Industrial Products
|
$
|
180.1
|
25.8
|
%
|
26.2
|
%
|
$
|
142.7
|
17.3
|
%
|
$
|
519.9
|
23.4
|
%
|
25.6
|
%
|
$
|
413.9
|
16.4
|
%
|
||||||||||||||||||||
Technology Products – EMEA
|
$
|
241.8
|
34.6
|
%
|
(13.4
|
)%
|
$
|
279.2
|
33.8
|
%
|
$
|
767.0
|
34.5
|
%
|
(12.8
|
)%
|
$
|
879.3
|
34.8
|
%
|
||||||||||||||||||||
Technology Products – NA
|
$
|
276.1
|
39.5
|
%
|
(31.3
|
)%
|
$
|
402.0
|
48.7
|
%
|
$
|
934.0
|
42.0
|
%
|
(24.2
|
)%
|
$
|
1,232.3
|
48.7
|
%
|
||||||||||||||||||||
Corporate and Other
|
$
|
1.3
|
0.1
|
%
|
(13.3
|
)%
|
$
|
1.5
|
0.2
|
%
|
$
|
4.2
|
0.1
|
%
|
(4.5
|
)%
|
$
|
4.4
|
0.1
|
%
|
||||||||||||||||||||
Consolidated Sales
|
$
|
699.3
|
100.0
|
%
|
(15.3
|
)%
|
$
|
825.4
|
100.0
|
%
|
$
|
2,225.1
|
100.0
|
%
|
(12.0
|
)%
|
$
|
2,529.9
|
100.0
|
%
|
Supplemental Business Unit Operating Results Summary
(in millions)
|
||||||||||||||||||||||||||||||||
GAAP Operating Income (Loss)
|
||||||||||||||||||||||||||||||||
Business Unit
|
Quarter Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||
2015
|
Margin
|
2014
|
Margin
|
2015
|
Margin
|
2014
|
Margin
|
|||||||||||||||||||||||||
Industrial Products
|
$
|
10.3
|
5.7
|
%
|
$
|
10.6
|
7.4
|
%
|
$
|
34.0
|
6.5
|
%
|
$
|
32.7
|
7.9
|
%
|
||||||||||||||||
Technology Products – EMEA
|
$
|
(1.8
|
)
|
(0.7
|
)%
|
$
|
(7.9
|
)
|
(2.8
|
)%
|
$
|
(8.2
|
)
|
(1.1
|
)%
|
$
|
(14.1
|
)
|
(1.6
|
)%
|
||||||||||||
Technology Products – NA
|
$
|
(12.9
|
)
|
(4.7
|
)%
|
$
|
(1.8
|
)
|
(0.4
|
)%
|
$
|
(68.2
|
)
|
(7.3
|
)%
|
$
|
(15.4
|
)
|
(1.2
|
)%
|
||||||||||||
Corporate and Other
|
$
|
(3.8
|
)
|
NM
|
$
|
(3.6
|
)
|
NM
|
$
|
(13.8
|
)
|
NM
|
$
|
(12.6
|
)
|
NM
|
||||||||||||||||
Consolidated Operating Income (Loss)
|
$
|
(8.2
|
)
|
(1.2
|
)%
|
$
|
(2.7
|
)
|
(0.3
|
)%
|
$
|
(56.2
|
)
|
(2.5
|
)%
|
$
|
(9.4
|
)
|
(0.4
|
)%
|
||||||||||||
Non-GAAP* Operating Income (Loss)
|
||||||||||||||||||||||||||||||||
Industrial Products
|
$
|
10.4
|
5.8
|
%
|
$
|
11.1
|
7.8
|
%
|
$
|
34.1
|
6.6
|
%
|
$
|
34.3
|
8.3
|
%
|
||||||||||||||||
Technology Products – EMEA
|
$
|
(1.7
|
)
|
(0.7
|
)%
|
$
|
(5.6
|
)
|
(2.0
|
)%
|
$
|
(6.9
|
)
|
(0.9
|
)%
|
$
|
(4.3
|
)
|
(0.5
|
)%
|
||||||||||||
Technology Products – NA
|
$
|
(10.4
|
)
|
(3.8
|
)%
|
$
|
(2.2
|
)
|
(0.5
|
)%
|
$
|
(25.3
|
)
|
(2.7
|
)%
|
$
|
(14.0
|
)
|
(1.1
|
)%
|
||||||||||||
Corporate and Other
|
$
|
(3.7
|
)
|
NM
|
$
|
(3.4
|
)
|
NM
|
$
|
(13.3
|
)
|
NM
|
$
|
(11.9
|
)
|
NM
|
||||||||||||||||
Consolidated Operating Income (Loss)
|
$
|
(5.4
|
)
|
(0.8
|
)%
|
$
|
(0.1
|
)
|
0.0
|
%
|
$
|
(11.4
|
)
|
(0.5
|
)%
|
$
|
4.1
|
0.2
|
%
|
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net sales
|
$
|
699.3
|
$
|
825.4
|
$
|
2,225.1
|
$
|
2,529.9
|
||||||||
Cost of sales
|
598.7
|
707.9
|
1,905.2
|
2,161.2
|
||||||||||||
Gross profit
|
100.6
|
117.5
|
319.9
|
368.7
|
||||||||||||
Gross margin
|
14.4
|
%
|
14.2
|
%
|
14.4
|
%
|
14.6
|
%
|
||||||||
Selling, general and administrative expenses
|
106.2
|
118.5
|
339.7
|
368.0
|
||||||||||||
Special charges
|
2.6
|
1.7
|
36.4
|
10.1
|
||||||||||||
Operating income (loss)
|
(8.2
|
)
|
(2.7
|
)
|
(56.2
|
)
|
(9.4
|
)
|
||||||||
Operating margin
|
(1.2
|
)%
|
(0.3
|
)%
|
(2.5
|
)%
|
(0.4
|
)%
|
||||||||
Interest and other expense, net
|
1.3
|
3.7
|
7.5
|
5.8
|
||||||||||||
Income (loss) before income taxes
|
(9.5
|
)
|
(6.4
|
)
|
(63.7
|
)
|
(15.2
|
)
|
||||||||
Provision for (benefit from) income taxes
|
0.8
|
(3.6
|
)
|
3.6
|
(3.2
|
)
|
||||||||||
Net income (loss)
|
$
|
(10.3
|
)
|
$
|
(2.8
|
)
|
$
|
(67.3
|
)
|
$
|
(12.0
|
)
|
||||
Net margin
|
(1.5
|
)%
|
(0.3
|
)%
|
(3.0
|
)%
|
(0.5
|
)%
|
||||||||
Net income (loss) per common share:
|
||||||||||||||||
Basic
|
$
|
(0.28
|
)
|
$
|
(0.08
|
)
|
$
|
(1.81
|
)
|
$
|
(0.32
|
)
|
||||
Diluted
|
$
|
(0.28
|
)
|
$
|
(0.08
|
)
|
$
|
(1.81
|
)
|
$
|
(0.32
|
)
|
||||
Weighted average common and common equivalent shares:
|
||||||||||||||||
Basic
|
37.1
|
37.1
|
37.1
|
37.1
|
||||||||||||
Diluted
|
37.1
|
37.1
|
37.1
|
37.1
|
September 30,
|
December 31,
|
|||||||
2015
(Unaudited)
|
2014
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
136.1
|
$
|
165.0
|
||||
Accounts receivable, net
|
305.5
|
355.5
|
||||||
Inventories
|
217.7
|
290.2
|
||||||
Prepaid expenses and other current assets
|
21.5
|
17.6
|
||||||
Total current assets
|
680.8
|
828.3
|
||||||
Property, plant and equipment, net
|
38.0
|
41.2
|
||||||
Goodwill, intangibles and other assets
|
30.3
|
25.7
|
||||||
Total assets
|
$
|
749.1
|
$
|
895.2
|
||||
Current liabilities:
|
||||||||
Short-term debt
|
$
|
1.2
|
$
|
2.8
|
||||
Accounts payable and accrued expenses
|
430.0
|
513.2
|
||||||
Total current liabilities
|
431.2
|
516.0
|
||||||
Long-term debt
|
0.5
|
1.1
|
||||||
Other liabilities
|
28.7
|
18.5
|
||||||
Shareholders’ equity
|
288.7
|
359.6
|
||||||
Total liabilities and shareholders’ equity
|
$
|
749.1
|
$
|
895.2
|
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Industrial Products
|
$
|
10.3
|
$
|
10.6
|
$
|
34.0
|
$
|
32.7
|
||||||||
Technology Products - EMEA
|
(1.8
|
)
|
(7.9
|
)
|
(8.2
|
)
|
(14.1
|
)
|
||||||||
Technology Products - NA
|
(12.9
|
)
|
(1.8
|
)
|
(68.2
|
)
|
(15.4
|
)
|
||||||||
Corporate and Other
|
(3.8
|
)
|
(3.6
|
)
|
(13.8
|
)
|
(12.6
|
)
|
||||||||
GAAP operating income (loss)
|
(8.2
|
)
|
(2.7
|
)
|
(56.2
|
)
|
(9.4
|
)
|
||||||||
Non-GAAP adjustments:
|
||||||||||||||||
Industrial Products:
|
||||||||||||||||
Integration costs
|
0.0
|
0.0
|
0.4
|
0.0
|
||||||||||||
Intangible asset amortization
|
0.1
|
0.0
|
0.2
|
0.0
|
||||||||||||
Stock-based and other special compensation
|
0.0
|
0.5
|
(0.5
|
)
|
1.6
|
|||||||||||
Total Non-GAAP Adjustments – Industrial Products
|
0.1
|
0.5
|
0.1
|
1.6
|
||||||||||||
Technology Products - EMEA:
|
||||||||||||||||
Severance and other reorganization related charges
|
0.0
|
1.9
|
0.7
|
8.9
|
||||||||||||
Asset impairment Charges
|
0.0
|
0.0
|
0.3
|
0.0
|
||||||||||||
Stock based compensation
|
0.0
|
0.1
|
0.0
|
0.2
|
||||||||||||
Intangible asset amortization
|
0.1
|
0.3
|
0.3
|
0.7
|
||||||||||||
Total Non-GAAP Adjustments: Technology Products EMEA
|
0.1
|
2.3
|
1.3
|
9.8
|
||||||||||||
Technology Products - NA:
|
||||||||||||||||
Severance and other reorganization related charges (1)
|
2.3
|
(0.4
|
)
|
39.1
|
0.4
|
|||||||||||
Asset impairment charges, net
|
(0.2
|
)
|
0.0
|
0.7
|
0.0
|
|||||||||||
Investigation costs(2)
|
0.4
|
0.1
|
3.1
|
0.7
|
||||||||||||
Stock-based compensation
|
0.0
|
(0.1
|
)
|
0.0
|
0.0
|
|||||||||||
Intangible asset amortization
|
0.0
|
0.0
|
0.0
|
0.3
|
||||||||||||
Total Non-GAAP Adjustments : Technology Products NA
|
2.5
|
(0.4
|
)
|
42.9
|
1.4
|
|||||||||||
Corporate and Other:
|
||||||||||||||||
Severance and other reorganization related charges
|
0.0
|
0.1
|
0.0
|
0.1
|
||||||||||||
Stock based compensation
|
0.1
|
0.1
|
0.5
|
0.6
|
||||||||||||
Total Non-GAAP Adjustments: Corporate and Other
|
0.1
|
0.2
|
0.5
|
0.7
|
||||||||||||
Industrial Products
|
10.4
|
11.1
|
34.1
|
34.3
|
||||||||||||
Technology Products- EMEA
|
(1.7
|
)
|
(5.6
|
)
|
(6.9
|
)
|
(4.3
|
)
|
||||||||
Technology Products- NA
|
(10.4
|
)
|
(2.2
|
)
|
(25.3
|
)
|
(14.0
|
)
|
||||||||
Corporate and Other
|
(3.7
|
)
|
(3.4
|
)
|
(13.3
|
)
|
(11.9
|
)
|
||||||||
Non-GAAP operating income (loss)
|
$
|
(5.4
|
)
|
$
|
(0.1
|
)
|
$
|
(11.4
|
)
|
$
|
4.1
|
(1) | Third quarter 2015 includes charges related to updating our future lease cash flows of our exited Distribution Facility and Retail stores of $2.2M and $0.1M in consulting and severance expenses. |
(2) | 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
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
GAAP
|
||||||||||||||||
Net income (loss)
|
$
|
(10.3
|
)
|
$
|
(2.8
|
)
|
$
|
(67.3
|
)
|
$
|
(12.0
|
)
|
||||
Provision for (benefit from) income taxes
|
0.8
|
(3.6
|
)
|
3.6
|
(3.2
|
)
|
||||||||||
Income (loss) before income taxes
|
(9.5
|
)
|
(6.4
|
)
|
(63.7
|
)
|
(15.2
|
)
|
||||||||
Interest and other expense, net
|
1.3
|
3.7
|
7.5
|
5.8
|
||||||||||||
Operating income (loss)
|
(8.2
|
)
|
(2.7
|
)
|
(56.2
|
)
|
(9.4
|
)
|
||||||||
Non-GAAP
|
||||||||||||||||
Non-recurring adjustments
|
2.5
|
1.7
|
44.3
|
10.1
|
||||||||||||
Recurring adjustments
|
0.3
|
0.9
|
0.5
|
3.4
|
||||||||||||
Adjusted operating income (loss)
|
(5.4
|
)
|
(0.1
|
)
|
(11.4
|
)
|
4.1
|
|||||||||
Interest and other expense, net
|
1.3
|
3.7
|
7.5
|
5.8
|
||||||||||||
Income (loss) before income taxes
|
(6.7
|
)
|
(3.8
|
)
|
(18.9
|
)
|
(1.7
|
)
|
||||||||
Normalized provision for (benefit from) income taxes
|
(2.3
|
)
|
(1.3
|
)
|
(6.6
|
)
|
(0.6
|
)
|
||||||||
Normalized effective tax rate(1)
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||||||
Non-GAAP net income (loss)
|
$
|
(4.4
|
)
|
$
|
(2.5
|
)
|
$
|
(12.3
|
)
|
$
|
(1.1
|
)
|
||||
GAAP diluted net income (loss) per share
|
$
|
(0.28
|
)
|
$
|
(0.08
|
)
|
$
|
(1.81
|
)
|
$
|
(0.32
|
)
|
||||
Non-GAAP diluted net income (loss) per share
|
$
|
(0.12
|
)
|
$
|
(0.07
|
)
|
$
|
(0.33
|
)
|
$
|
(0.03
|
)
|
(1) | Effective tax rate of 35% used in all periods. |