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 February 28, 2017, regarding financial results for the fourth quarter and full year ended December 31, 2016.
|
SYSTEMAX INC.
|
|
By: /s/ Eric Lerner
|
|
Name: Eric Lerner
|
|
Title: Senior Vice President
|
99.1 |
Press Release of Systemax Inc., dated February 28, 2017, regarding financial results for the fourth quarter and full year ended December 31, 2016.
|
Performance Summary*
(U.S. dollars in millions, except per share data)
|
||||||||||||||||
Highlights
|
Quarter Ended
December 31,
|
Year Ended
December 31,
|
||||||||||||||
GAAP Results**
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Net sales
|
$
|
414.7
|
$
|
465.3
|
$
|
1,680.1
|
$
|
1,854.7
|
||||||||
Gross profit
|
$
|
81.7
|
$
|
86.9
|
$
|
324.7
|
$
|
342.7
|
||||||||
Gross margin
|
19.7
|
%
|
18.7
|
%
|
19.3
|
%
|
18.5
|
%
|
||||||||
Operating income (loss)
|
$
|
7.0
|
$
|
1.2
|
$
|
4.1
|
$
|
(24.1
|
)
|
|||||||
Operating margin
|
1.7
|
%
|
0.3
|
%
|
0.2
|
%
|
(1.3
|
)%
|
||||||||
Net income (loss) from continuing operations
|
$
|
0.7
|
$
|
(11.6
|
)
|
$
|
(7.9
|
)
|
$
|
(48.3
|
)
|
|||||
Net income (loss) per share from continuing operations
|
$
|
0.02
|
$
|
(0.31
|
)
|
$
|
(0.21
|
)
|
$
|
(1.30
|
)
|
|||||
Net income (loss) from discontinued operations
|
$
|
(2.8
|
)
|
$
|
(20.9
|
)
|
$
|
(24.7
|
)
|
$
|
(51.5
|
)
|
||||
Net income (loss) per share from discontinued operations
|
$
|
(0.08
|
)
|
$
|
(0.56
|
)
|
$
|
(0.66
|
)
|
$
|
(1.39
|
)
|
||||
Non-GAAP Results**
|
||||||||||||||||
Net sales
|
$
|
413.8
|
$
|
446.7
|
$
|
1,642.6
|
$
|
1,692.5
|
||||||||
Gross profit
|
$
|
81.1
|
$
|
84.5
|
$
|
319.8
|
$
|
324.2
|
||||||||
Gross margin
|
19.6
|
%
|
18.9
|
%
|
19.5
|
%
|
19.2
|
%
|
||||||||
Operating income
|
$
|
6.5
|
$
|
3.6
|
$
|
14.5
|
$
|
19.9
|
||||||||
Operating margin
|
1.6
|
%
|
0.8
|
%
|
0.9
|
%
|
1.2
|
%
|
||||||||
Net income from continuing operations
|
$
|
3.0
|
$
|
1.3
|
$
|
8.2
|
$
|
9.3
|
||||||||
Net income per share from continuing operations
|
$
|
0.08
|
$
|
0.04
|
$
|
0.22
|
$
|
0.25
|
||||||||
Net income (loss) from discontinued operations
|
$
|
0.6
|
$
|
(24.9
|
)
|
$ |
(30.4
|
)
|
$
|
(84.8
|
)
|
|||||
Net income (loss) per share from discontinued operations
|
$
|
0.02
|
$
|
(0.67
|
)
|
$
|
(0.82
|
)
|
$
|
(2.29
|
)
|
· |
Consolidated sales decreased 10.9% to $414.7 million in U.S. dollars. On a constant currency basis, average daily sales increased 0.2%.
|
· |
Industrial Products Group sales declined 1.7% to $175.7 million in U.S. dollars. On a constant currency basis, average daily sales increased 4.7%.
|
· |
European Technology Products Group sales decreased 16.5% to $238.1 million in U.S. dollars. On a constant currency basis, average daily sales decreased 5.5%.
|
· |
Consolidated operating income was $7.0 million compared to operating income of $1.2 million last year.
|
· |
Diluted net income per share from continuing operations was $0.02.
|
· |
Consolidated sales (excluding NATG, Misco Germany and Afligo) decreased 7.4% to $413.8 million in U.S. dollars. On a constant currency basis, average daily sales increased 3.1%.
|
· |
Industrial Products Group sales declined 1.7% to $175.7 million in U.S. dollars. On a constant currency basis, average daily sales increased 4.7%.
|
· |
European Technology Products Group sales (excluding Misco Germany) decreased 11.2% to $238.1 million in U.S. dollars. On a constant currency basis (excluding Misco Germany), average daily sales increased 0.9%.
|
· |
Consolidated operating income was $6.5 million compared to $3.6 million last year.
|
· |
Diluted net income per share from continuing operations was $0.08.
|
· |
Consolidated sales decreased 9.4% to $1,680.1 million in U.S. dollars. On a constant currency basis and excluding the January 2015 acquisition of the Plant Equipment Group (P.E.G.) in North America, average daily sales decreased 0.1%.
|
· |
Industrial Products Group sales grew 2.4% to $715.6 million in U.S. dollars. On a constant currency basis and excluding the January 2015 acquisition of P.E.G., average daily sales grew 2.8%.
|
· |
European Technology Products Group sales decreased 8.7% to $960.9 million in U.S. dollars. On a constant currency basis, average daily sales decreased 4.3%.
|
· |
Consolidated operating income was $4.1 million compared to a loss of $24.1 million last year.
|
· |
Diluted net loss per share was $0.21.
|
· |
Consolidated sales (excluding NATG, Misco Germany and Afligo) decreased 2.9% to $1,642.6 million in U.S. dollars. On a constant currency basis and excluding the January 2015 acquisition of P.E.G., average daily sales increased 1.0%.
|
· |
Industrial Products Group sales grew 2.4% to $715.6 million in U.S. dollars. On a constant currency basis and excluding P.E.G., sales grew 1.6%, average daily sales increased 2.8%.
|
· |
European Technology Products Group sales (excluding Misco Germany) decreased 6.7% to $927.0 million in U.S. dollars. On a constant currency basis, average daily sales decreased 2.1%.
|
· |
Consolidated operating income was $14.5 million compared to $19.9 million last year.
|
· |
Diluted net income per share from continuing operations was $0.22.
|
Quarter Ended
December 31, |
Year Ended
December 31, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Net sales
|
$
|
414.7
|
$
|
465.3
|
$
|
1,680.1
|
$
|
1,854.7
|
||||||||
Cost of sales
|
333.0
|
378.4
|
1,355.4
|
1,512.0
|
||||||||||||
Gross profit
|
$
|
81.7
|
$
|
86.9
|
$
|
324.7
|
$
|
342.7
|
||||||||
Gross margin
|
19.7
|
%
|
18.7
|
%
|
19.3
|
%
|
18.5
|
%
|
||||||||
Selling, general and administrative expenses
|
72.4
|
84.2
|
314.7
|
|
338.9
|
|||||||||||
Special charges
|
2.3
|
1.5
|
5.9
|
|
27.9
|
|||||||||||
Operating income (loss) from continuing operations
|
$
|
7.0
|
$
|
1.2
|
$
|
4.1
|
$
|
(24.1
|
)
|
|||||||
Operating margin
|
1.7
|
%
|
0.3
|
%
|
0.2
|
%
|
(1.3
|
)%
|
||||||||
Interest and other (income) expense, net
|
1.9
|
2.5
|
2.0
|
|
10.7
|
|||||||||||
Income (loss) from continuing operations before income taxes
|
$
|
5.1
|
$
|
(1.3
|
)
|
$
|
2.1
|
$
|
(34.8
|
)
|
||||||
Provision for income taxes
|
4.4
|
10.3
|
10.0
|
|
13.5
|
|||||||||||
Net income (loss) from continuing operations
|
$
|
0.7
|
$
|
(11.6
|
)
|
$
|
(7.9
|
)
|
$
|
(48.3
|
)
|
|||||
Net income (loss) from discontinued operations
|
$
|
(2.8
|
)
|
$
|
(20.9
|
)
|
$
|
(24.7
|
)
|
$
|
(51.5
|
)
|
||||
Net income (loss)
|
$
|
(2.1
|
)
|
$
|
(32.5
|
)
|
$
|
(32.6
|
)
|
$
|
(99.8
|
)
|
||||
Net income (loss) per common share from continuing operations:
|
||||||||||||||||
Basic
|
$
|
0.02
|
$
|
(0.31
|
)
|
$
|
(0.21
|
)
|
$
|
(1.30
|
)
|
|||||
Diluted
|
$
|
0.02
|
$
|
(0.31
|
)
|
$
|
(0.21
|
)
|
$
|
(1.30
|
)
|
|||||
Net income (loss) per common share from discontinued operations:
|
||||||||||||||||
Basic
|
$
|
(0.08
|
)
|
$
|
(0.56
|
)
|
$
|
(0.66
|
)
|
$
|
(1.39
|
)
|
||||
Diluted
|
$
|
(0.08
|
)
|
$
|
(0.56
|
)
|
$
|
(0.66
|
)
|
$
|
(1.39
|
)
|
||||
Weighted average common and common equivalent shares:
|
||||||||||||||||
Basic
|
37.2
|
37.1
|
37.2
|
37.1
|
||||||||||||
Diluted
|
37.2
|
37.1
|
37.2
|
37.1
|
December 31,
|
December 31,
|
|||||||
|
2016
|
2015
|
||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
149.7
|
$
|
215.1
|
||||
Accounts receivable, net
|
214.5
|
266.3
|
||||||
Inventories
|
140.7
|
144.4
|
||||||
Prepaid expenses and other current assets
|
6.3
|
14.5
|
||||||
Total current assets
|
511.2
|
640.3
|
||||||
Property, plant and equipment, net
|
29.5
|
38.3
|
||||||
Goodwill, intangibles and other assets
|
25.4
|
31.5
|
||||||
Total assets
|
$
|
566.1
|
$
|
710.1
|
||||
Current liabilities:
|
||||||||
Short-term debt
|
$
|
0.1
|
$
|
0.6
|
||||
Accounts payable and accrued expenses
|
324.9
|
425.5
|
||||||
Total current liabilities
|
325.0
|
426.1
|
||||||
Long-term debt
|
0.1
|
0.4
|
||||||
Other liabilities
|
26.6
|
29.7
|
||||||
Shareholders’ equity
|
214.4
|
253.9
|
||||||
Total liabilities and shareholders’ equity
|
$
|
566.1
|
$
|
710.1
|
Supplemental Non-GAAP Continuing Operation Business Unit Summary Results - Unaudited
|
||||||||||||||||||||||||
Industrial Products Group
|
||||||||||||||||||||||||
Quarter Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2016
|
2015
|
Change
|
2016
|
2015
|
Change
|
|||||||||||||||||||
Sales
|
$
|
175.7
|
$
|
178.7
|
(1.7
|
)%
|
$
|
715.6
|
$
|
698.6
|
2.4
|
%
|
||||||||||||
Average daily sales*
|
$
|
2.8
|
$
|
2.7
|
4.7
|
%
|
$
|
2.8
|
$
|
2.7
|
2.8
|
%
|
||||||||||||
Gross profit
|
$
|
48.9
|
$
|
51.8
|
(5.6
|
)%
|
$
|
198.3
|
$
|
198.7
|
(0.2
|
)%
|
||||||||||||
Gross margin
|
27.8
|
%
|
29.0
|
%
|
27.7
|
%
|
28.4
|
%
|
||||||||||||||||
Operating income
|
$
|
9.8
|
$
|
9.9
|
(1.0
|
)%
|
$
|
35.2
|
$
|
44.0
|
(20.0
|
)%
|
||||||||||||
Operating margin
|
5.6
|
%
|
5.5
|
%
|
4.9
|
%
|
6.3
|
%
|
||||||||||||||||
European Technology Products Group
|
||||||||||||||||||||||||
Quarter Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2016
|
2015
|
Change
|
2016
|
2015
|
Change
|
|||||||||||||||||||
Sales
|
$
|
238.1
|
$
|
268.0
|
(11.2
|
)%
|
$
|
927.0
|
$
|
993.9
|
(6.7
|
)%
|
||||||||||||
Average daily sales**
|
$
|
4.0
|
$
|
4.0
|
0.9
|
%
|
$
|
3.8
|
$
|
3.9
|
(2.1
|
)%
|
||||||||||||
Gross profit
|
$
|
32.2
|
$
|
32.7
|
(1.5
|
)%
|
$
|
121.5
|
$
|
125.5
|
(3.2
|
)%
|
||||||||||||
Gross margin
|
13.5
|
%
|
12.2
|
%
|
13.1
|
%
|
12.6
|
%
|
||||||||||||||||
Operating loss
|
$
|
0.0
|
$
|
(1.6
|
)
|
100.0
|
%
|
$
|
(5.2
|
)
|
$
|
(6.0
|
)
|
13.3
|
%
|
|||||||||
Operating margin
|
0.0
|
%
|
(0.6
|
)%
|
(0.6
|
)%
|
(0.6
|
)%
|
||||||||||||||||
Corporate & Other
|
||||||||||||||||||||||||
Quarter Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2016
|
2015
|
Change
|
2016
|
2015
|
Change
|
|||||||||||||||||||
Operating loss
|
$
|
(3.3
|
)
|
$
|
(4.7
|
)
|
29.8
|
%
|
$
|
(15.5
|
)
|
$
|
(18.1
|
)
|
14.4
|
%
|
||||||||
Consolidated
|
||||||||||||||||||||||||
Quarter Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2016
|
2015
|
Change
|
2016
|
2015
|
Change
|
|||||||||||||||||||
Sales
|
$
|
413.8
|
$
|
446.7
|
(7.4
|
)%
|
$
|
1,642.6
|
$
|
1,692.5
|
(2.9
|
)%
|
||||||||||||
Gross profit
|
$
|
81.1
|
$
|
84.5
|
(4.0
|
)%
|
$
|
319.8
|
$
|
324.2
|
(1.4
|
)%
|
||||||||||||
Gross margin
|
19.6
|
%
|
18.9
|
%
|
19.5
|
%
|
19.2
|
%
|
||||||||||||||||
Operating income
|
$
|
6.5
|
$
|
3.6
|
80.6
|
%
|
$
|
14.5
|
$
|
19.9
|
(27.1
|
)%
|
||||||||||||
Operating margin
|
1.6
|
%
|
0.8
|
%
|
0.9
|
%
|
1.2
|
%
|
Quarter Ended
December 31, |
Year Ended
December 31, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Industrial Products
|
$
|
9.5
|
$
|
9.7
|
$
|
34.3
|
$
|
43.7
|
||||||||
Technology Products - Europe
|
(1.9
|
)
|
(2.6
|
)
|
(12.5
|
)
|
(10.8
|
)
|
||||||||
Technology Products - NA
|
(0.4
|
)
|
(0.9
|
)
|
(2.8
|
)
|
(38.2
|
)
|
||||||||
Corporate and Other
|
(0.2
|
)
|
(5.0
|
)
|
(14.9
|
)
|
(18.8
|
)
|
||||||||
GAAP operating income (loss)
|
7.0
|
1.2
|
4.1
|
(24.1
|
)
|
|||||||||||
Non-GAAP adjustments:
|
||||||||||||||||
Industrial Products:
|
||||||||||||||||
Integration Costs
|
0.0
|
0.6
|
0.0
|
1.0
|
||||||||||||
Intangible asset amortization
|
0.2
|
0.1
|
0.5
|
0.3
|
||||||||||||
Stock based and other special compensation
|
0.1
|
(0.5
|
)
|
0.4
|
(1.0
|
)
|
||||||||||
Total Non-GAAP Adjustments – Industrial Products
|
0.3
|
0.2
|
0.9
|
0.3
|
||||||||||||
Technology Products - Europe:
|
||||||||||||||||
Reverse results of Germany Operations
|
(0.1
|
)
|
0.5
|
4.7
|
3.0
|
|||||||||||
Severance and other reorganization charges
|
0.0
|
0.0
|
0.0
|
0.7
|
||||||||||||
Asset Impairment Charges
|
2.0
|
0.4
|
2.0
|
0.7
|
||||||||||||
Intangible asset amortization
|
0.1
|
0.0
|
0.5
|
0.3
|
||||||||||||
Stock based compensation
|
(0.1
|
)
|
0.1
|
0.1
|
0.1
|
|||||||||||
Total Non-GAAP Adjustments – Technology Products Europe
|
1.9
|
1.0
|
7.3
|
4.8
|
||||||||||||
Technology Products - NA:
|
||||||||||||||||
Reverse results of NATG included in GAAP continuing operations
|
0.4
|
0.9
|
2.8
|
38.2
|
||||||||||||
Total Non-GAAP Adjustments – Technology Products NA
|
0.4
|
0.9
|
2.8
|
38.2
|
||||||||||||
Corporate and Other:
|
||||||||||||||||
Gain on sale of Afligo
|
(3.9
|
)
|
0.0
|
(3.9
|
)
|
0.0
|
||||||||||
Reverse results of Afligo included in GAAP continuing operations
|
0.5
|
0.2
|
2.2
|
0.1
|
||||||||||||
Stock based compensation
|
0.3
|
0.1
|
1.1
|
0.6
|
||||||||||||
Total Non-GAAP Adjustments – Corporate and Other
|
(3.1
|
)
|
0.3
|
(0.6
|
)
|
0.7
|
||||||||||
Industrial Products
|
9.8
|
9.9
|
35.2
|
44.0
|
||||||||||||
Technology Products- Europe
|
0.0
|
(1.6
|
)
|
(5.2
|
)
|
(6.0
|
)
|
|||||||||
Technology Products- NA
|
0.0
|
0.0
|
0.0
|
0.0
|
||||||||||||
Corporate and Other
|
(3.3
|
)
|
(4.7
|
)
|
(15.5
|
)
|
(18.1
|
)
|
||||||||
Non-GAAP operating income (loss)
|
$
|
6.5
|
$
|
3.6
|
$
|
14.5
|
$
|
19.9
|
Quarter Ended
December 31, |
Year Ended
December 31, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
GAAP
|
||||||||||||||||
Net income (loss) from continuing operations
|
$
|
0.7
|
$
|
(11.6
|
)
|
$
|
(7.9
|
)
|
$
|
(48.3
|
)
|
|||||
Provision for (benefit from) income taxes from continuing operations
|
4.4
|
10.3
|
10.0
|
13.5
|
||||||||||||
Income (loss) from continuing operations before income taxes
|
5.1
|
(1.3
|
)
|
2.1
|
(34.8
|
)
|
||||||||||
Interest and other (income) expense from continuing operations, net
|
1.9
|
2.5
|
2.0
|
10.7
|
||||||||||||
Operating income (loss) from continuing operations
|
7.0
|
1.2
|
4.1
|
(24.1
|
)
|
|||||||||||
Non-GAAP
|
||||||||||||||||
Reverse results of NATG and Germany included in GAAP operating income from continuing operations
|
0.3
|
1.4
|
7.5
|
41.2
|
||||||||||||
Non-recurring adjustments
|
0.0
|
0.6
|
0.0
|
1.7
|
||||||||||||
Asset impairment charge
|
2.0
|
0.4
|
2.0
|
0.7
|
||||||||||||
Gain on Sale of Afligo
|
(3.9
|
)
|
0.0
|
(3.9
|
)
|
0.0
|
||||||||||
Reverse results of Afligo included in GAAP continuing operations
|
0.5
|
0.2
|
2.2
|
0.1
|
||||||||||||
Recurring adjustments
|
0.6
|
(0.2
|
)
|
2.6
|
0.3
|
|||||||||||
Adjusted operating income (loss)
|
6.5
|
3.6
|
14.5
|
19.9
|
||||||||||||
Interest and other expense (income), net
|
1.9
|
2.5
|
2.0
|
10.7
|
||||||||||||
Reverse results of NATG and Germany included in GAAP interest and other expense (income), net
|
0.0
|
(0.9
|
)
|
(0.1
|
)
|
(5.1
|
)
|
|||||||||
Income before income taxes
|
4.6
|
2.0
|
12.6
|
14.3
|
||||||||||||
Normalized provision for (benefit from) income taxes
|
1.6
|
0.7
|
4.4
|
5.0
|
||||||||||||
Normalized effective tax rate(1)
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||||||
Non-GAAP net income from continuing operations
|
$
|
3.0
|
$
|
1.3
|
$
|
8.2
|
$
|
9.3
|
||||||||
GAAP net income (loss) per diluted share from continuing operations
|
$
|
0.02
|
$
|
(0.31
|
)
|
$
|
(0.21
|
)
|
$
|
(1.30
|
)
|
|||||
Non-GAAP net income (loss) per diluted share from continuing operations
|
$
|
0.08
|
$
|
0.04
|
$
|
0.22
|
$
|
0.25
|
(1) |
Effective tax rate of 35% used in all periods.
|
Quarter Ended
December 31, |
Year Ended
December 31, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
GAAP
|
||||||||||||||||
Net income (loss) from discontinued operations
|
$
|
(2.8
|
)
|
$
|
(20.9
|
)
|
$
|
(24.7
|
)
|
$
|
(51.5
|
)
|
||||
Non-GAAP additions to discontinued operations
|
||||||||||||||||
Results of NATG and Germany included in GAAP operating income from continuing operations
|
(0.3
|
)
|
(1.4
|
)
|
(7.5
|
)
|
(41.2
|
)
|
||||||||
Results of Afligo included in GAAP operating income from continuing operations
|
(0.5
|
)
|
(0.2
|
)
|
(2.2
|
)
|
(0.1
|
)
|
||||||||
NATG net tax adjustments
|
0.3
|
(3.3
|
)
|
0.0
|
2.9
|
|||||||||||
Gain on sale of Afligo
|
3.9
|
0.0
|
3.9
|
0.0
|
||||||||||||
NATG, Germany, and Afligo interest and other (expense) income, net included in GAAP continuing operations
|
0.0
|
0.9
|
0.1
|
5.1
|
||||||||||||
Total Non-GAAP adjustments
|
3.4
|
(4.0
|
)
|
(5.7
|
)
|
(33.3
|
)
|
|||||||||
Non-GAAP net income (loss) from discontinued operations
|
$
|
0.6
|
$
|
(24.9
|
)
|
$
|
(30.4
|
)
|
$
|
(84.8
|
)
|
|||||
GAAP net income (loss) per diluted share from discontinued operations
|
$
|
(0.08
|
)
|
$
|
(0.56
|
)
|
$
|
(0.66
|
)
|
$
|
(1.39
|
)
|
||||
Non-GAAP net income (loss) per diluted share from discontinued operations
|
$
|
0.02
|
$
|
(0.67
|
)
|
$
|
(0.82
|
)
|
$
|
(2.29
|
)
|