Systemax Exiting PCS Hosted Software Business
June 01 2009 - 5:11PM
Business Wire
Systemax Inc. (NYSE: SYX) today announced that it is exiting the
ProfitCenter Software (�PCS�) hosted software business. The Company
is working on transition plans with its customers who are currently
live, and the Company will not undertake any new hosting
arrangements. As part of the consolidation, a majority of the PCS
workforce will be leaving the Company and the remaining PCS
workforce has been consolidated into the Company�s Port Washington,
NY location.
These and other PCS-related actions are anticipated to result in
incremental one-time pre-tax charges to earnings during the
remainder of 2009 of approximately $4 to $5 million. Excluding
these charges, the Company expects the consolidation will result in
a reduction of its cost structure exceeding $10 million annually.
During 2008, revenues from the PCS segment generated less than
$500,000 of the Company�s total revenues of $3.0 billion.
Richard Leeds, Chairman and Chief Executive Officer of Systemax,
commented, �While we had significantly narrowed the focus of our
PCS business segment over the last several quarters in an effort to
establish a sustainable business model, after careful evaluation we
have concluded it is in the best interests of the Company and its
shareholders to reduce our investment in the software business in
order to improve our profitability, strengthen our balance sheet,
improve our operating cash flows and deploy capital in areas which
are closer to the core of our direct marketing and retail
businesses. We believe the PCS product is the best in class java,
web-based order management and ecommerce system available, and it
has been instrumental in helping us to manage our internal needs.
However, we have been unable to profitably market, sell and
implement the software on a hosted platform model. The current
economic environment is very difficult to sell the product into,
and we do not anticipate that changing in the near future. We will
continue to use the proprietary software in-house and are currently
evaluating our options to maximize value of the software and other
assets that have been developed.�
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 ecommerce web
sites, direct mail catalogs, relationship marketers and retail
stores in North America and Europe. The primary brands are
TigerDirect, CompUSA, Circuit City, Misco and Global Industrial. It
also manufactures and sells computers and accessories under the
Systemax and Ultra brands.
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.
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