http://www.businesswire.com/news/home/20091110006568/en
PORT WASHINGTON, N.Y.--(Business Wire)--
Systemax Inc. (NYSE:SYX) today announced financial results for the third quarter
and nine months ended September 30, 2009.
Financial highlights for the quarter ended September 30, 2009:
* Consolidated sales grew 2% to $753.9 million in U.S. dollars. On a constant
currency basis, sales grew 6%.
* Consumer sales grew 10% to $426.2 million in U.S. dollars. On a constant
currency basis, sales grew 12%.
* "Same store" consumer sales grew 6%.
* Business to business sales were $327.7 million in U.S. dollars, a 7% decline.
On a constant currency basis, sales declined 1%.
* One-time pre-tax charges were $1.0 million, or approximately $0.02 per diluted
share after tax, for costs related to the WStore acquisition and exiting the
Hosted Software business.
* Diluted earnings per share grew 13% to $0.34.
Performance Summary
(U.S. dollars in millions, except per share data)
Highlights Quarter Ended Sept 30, Nine Months Ended Sept 30,
2009 2008 2009 2008
Sales $753.9 $739.5 $2,227.7 $2,220.3
Gross profit $112.8 $115.4 $327.4 $343.9
Gross margin 15.0% 15.6% 14.7% 15.5%
Operating income $19.4 $20.4 $43.1 $67.6
Operating margin 2.6% 2.8% 1.9% 3.0%
Diluted earnings per share $0.34 $0.30 $0.74 $1.14
One time charges, pre-tax $1.0 - $7.3 $0.8
One-time charges, after tax, per diluted share $0.02 - $0.12 $0.01
Richard Leeds, Chairman and Chief Executive Officer, said, "Systemax posted
solid overall third quarter results, growing top line sales on a U.S. dollar
basis as well as on a constant currency basis. We did see some erosion in
overall gross margin, resulting from the continued impact of discounted shipping
and product mix changes; however gross margin for the quarter was up
sequentially. We carefully controlled our operating costs, despite headcount
growth for new retail stores and one-time charges, which resulted in strong
bottom line earnings growth."
Channel sales for the three and nine months ended September 30, 2009:
Channel Sales Summary
(in millions)
Channel Quarter Ended Sept 30, Nine Months Ended Sept 30
2009 2008 2009 2008
Consumer1 $426.2 $389.2 $1,310.3 $1,154.4
Business to business2 $327.7 $350.3 $917.4 $1,065.9
Consolidated sales $753.9 $739.5 $2,227.7 $2,220.3
1Includes sales from retail stores, consumer websites, printed catalogs and
television shopping
2Includes sales from managed business relationships, including outbound call
centers and extranets
Comparable "same store" channel sales growth for the three months ended
September 30, 2009 versus the three months ended September 30, 2008:
Channel3 Change
Consumer 6.0%
Business to business -4.0%
3Comprised of revenue at retail stores, websites and call centers operating for
at least 14 full months. The calculation of the comparable store sales
percentage change excludes the effect of fluctuations in foreign currency
exchange rates. The method of calculating comparable store and channel sales
varies across the retail and direct marketing industry. As a result, Systemax`s
method of calculating comparable sales may not be the same as other companies`
methods.
Richard Leeds continued, "Our consumer channels in North America reported our
strongest results. We are broadening our reach in the consumer electronics
market, both through our retail stores and our e-Commerce websites. CompUSA
recently opened two new brick and mortar stores, with another planned to open
later this month. We have also signed leases for stores in several new markets
that will open in the coming months, and we are continuing the conversion of our
existing stores to our proprietary Retail 2.0 format. Circuit City has
successfully reactivated many of its former customers, and sales from
CircuitCity.com contributed to our overall sales growth. We remain very
optimistic about the long-term possibilities for this valuable asset. As in the
past, TigerDirect continues to be a market leader in the online retailing of
computer and consumer electronics."
"Our business to business channel operations - including MISCO in Western Europe
and Global Industrial in the U.S. - are still generally impacted by the
worldwide economic slowdown; however, we are now cautiously optimistic that we
have seen the bottom. We continue making prudent investments to improve our
positioning while carefully controlling our costs. During the quarter we
completed the acquisition of WStore Europe, a B2B supplier of IT products with
operations in France and in the United Kingdom, significantly strengthening our
presence in those markets. In our Industrial business, we recently deployed an
entirely new ecommerce website (www.globalindustrial.com) that we believe is
generationally more advanced than the sites of any other company in the sector."
Supplemental product category sales for the three and nine months ended
September 30, 2009:
Product Category Sales Summary
(in millions)
Product Category Quarter Ended Sept 30, Nine Months Ended Sept 30,
2009 2008 2009 2008
Computers $183.5 $141.5 $559.1 $369.6
Consumer electronics $172.6 $161.5 $521.2 $509.4
Computer components $130.1 $132.1 $363.7 $411.8
Computer accessories & software $200.2 $225.6 $431.1 $696.3
Industrial products $52.0 $63.2 $146.5 $182.2
Other $15.5 $15.6 $206.1 $51.0
Consolidated sales $753.9 $739.5 $2,227.7 $2,220.3
Business unit sales for the three and nine months ended September 30, 2009:
Business Unit Sales Summary
(in millions)
Business Unit Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
2009 2008 2009 2008
Technology Products - North America $500.0 $448.9 $1,500.7 $1,314.1
Technology Products - Europe $201.8 $227.2 $579.3 $723.7
Industrial Products $52.0 $63.2 $146.5 $182.2
Software Solutions $0.1 $0.2 $1.2 $0.3
Consolidated Sales $753.9 $739.5 $2,227.7 $2,220.3
Working capital as of September 30, 2009 was $256.8 million, including cash and
cash equivalents of $102.1 million. The Company has an undrawn credit facility
of $120.0 million and total cash and available liquidity of approximately $199.0
million. Short term debt totaled approximately $18.8 million at September 30,
2009 and included approximately $17.1 million in revolving debt assumed as part
of the WStore acquisition as well as capitalized lease obligations. Cash flow
provided by operations for the first nine months of 2009 was approximately $14.2
million and capital expenditures were $13.7 million. The Company`s effective tax
rate for the first nine months of 2009 was 36.3%, down from 37.3% last year.
Included in the 2009 rate is a reversal of tax reserves of approximately $1.0
million as the result of statute expirations. Excluding this reserve reversal,
the Company`s effective tax rate in 2009 was 38.7%. This higher effective tax
rate this year is primarily the result of a higher percentage of taxable income
in the U.S. where corporate tax rates for the Company are typically highest.
Earnings Conference Call Details
Systemax Inc. will host a teleconference to discuss its third quarter and the
first nine months of 2009 results today, Tuesday, November 10, 2009 at 5:00 p.m.
Eastern Time. To access the teleconference, please dial 877-604-9673 (U.S.
callers) or 719-325-4790 (Int`l callers) and reference passcode 7435037 ten
minutes prior to the start time. The teleconferencing will also be available via
live webcast on the Company`s Web site at www.systemax.com. A replay of the
conference call will be available through Tuesday, November 17, 2009. It can be
accessed by dialing 888-203-1112 (U.S. callers) or 719-457-0820 (Int`l callers),
passcode 7435037. The webcast will also be archived on www.systemax.com for
approximately 90 days.
About Systemax Inc.
Systemax Inc. (http://www.systemax.com), a Fortune 1000 company, sells personal
computers, computer supplies, consumer electronics and industrial products
through a system of branded e-Commerce web sites, retail stores, relationship
marketers and direct mail catalogs in North America and Europe. The primary
brands are TigerDirect, CompUSA, Circuit City, MISCO, WStore and Global
Industrial.
Forward-Looking Statements
This press release contains forward-looking statements about the Company`s
performance. These statements are based on management`s estimates, assumptions
and projections and are not guarantees of future performance. The Company
assumes no obligation to update these statements. Actual results may differ
materially from results expressed or implied in these statements as the result
of risks, uncertainties and other factors including, but not limited to: (a)
unanticipated variations in sales volume, (b) economic conditions and exchange
rates, (c) actions by competitors, (d) the continuation of key vendor
relationships, (e) the ability to maintain satisfactory loan agreements with
lenders, (f) risks associated with the delivery of merchandise to customers
utilizing common carriers, (g) the operation of the Company`s management
information systems, and (h) unanticipated legal and administrative proceedings.
Please refer to "Risk Factors" and the Forward Looking Statements sections
contained in the Company`s Form 10-K for a more detailed explanation of the
inherent limitations in such forward-looking statements.
SYSTEMAX INC.
Condensed Consolidated Statements of Operations - Unaudited
(In thousands, except per share amounts)
Quarter Ended Nine Months Ended
September 30* September 30*
2009 2008 2009 2008
Net sales $753,880 $739,479 $2,227,747 $2,220,251
Cost of sales 641,117 624,060 1,900,380 1,876,329
Gross profit 112,763 115,419 327,367 343,922
Gross margin 15.0% 15.6% 14.7% 15.5%
Selling, general and administrative expenses 93,394 94,997 284,309 276,349
Operating income 19,369 20,422 43,058 67,573
Operating margin 2.6% 2.8% 1.9% 3.0%
Interest and other (income) expense, net (952) 1,782 (589) (843)
Income before income taxes 20,321 18,640 43,647 68,416
Provision for income taxes 7,723 7,367 15,860 25,541
Effective tax rate 38.0% 39.5% 36.3% 37.3%
Net income $12,598 $11,273 $27,787 $42,875
Net margin 1.7% 1.5% 1.3% 1.9%
Net income per common share:
Basic $.34 $0.30 $.76 $1.16
Diluted $.34 $0.30 $.74 $1.14
Weighted average common and
common equivalent shares:
Basic 36,703 37,079 36,669 36,972
Diluted 37,319 37,801 37,310 37,774
SYSTEMAX INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30* December 31
2009 2008
Current assets:
Cash and cash equivalents $102,117 $115,967
Accounts receivable, net 213,170 182,532
Inventories 315,977 290,594
Prepaid expenses and other current assets 28,574 22,225
Total current assets 659,838 611,318
Property, plant and equipment, net 63,046 48,465
Goodwill, intangibles and other assets 60,660 42,361
Total assets $783,544 $702,144
Current liabilities:
Short-term debt $18,770 $773
Accounts payable and accrued expenses 384,222 357,453
Total current liabilities 402,992 358,226
Long-term debt 1,233 1,411
Other liabilities 7,986 8,552
Shareholders` equity 371,333 333,955
Total liabilities and shareholders` equity $783,544 $702,144
* 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, fiscal years and quarters are described as if they ended on the
last day of the respective calendar month.The actual fiscal nine month period
and quarter ended on October 3, 2009. The third quarters of both 2009 and 2008
included 13 weeks and the nine month periods both included 39 weeks.
Investors / Media:
Brainerd Communicators, Inc.
Denise Roche / Bill Douglass
212-986-6667
roche@braincomm.com
douglass@braincomm.com
Copyright Business Wire 2009
