Table of
Contents
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period
ended March 31, 2010
or
o
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period
from
to
COMMISSION
FILE NUMBER 1-13792
Systemax
Inc.
(Exact name of registrant as specified in its charter)
Delaware
|
|
11-3262067
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
11 Harbor Park Drive
Port Washington, New York 11050
(Address of principal executive offices, including zip code)
Registrants telephone number, including area code:
(516)
608-7000
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes
x
No
o
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post
such files). Yes
o
No
o
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, non-accelerated filer or a smaller reporting company.
See the definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
|
|
Accelerated filer
x
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act)
Yes
o
No
x
The number of shares outstanding of the registrants Common Stock as of
May 6, 2010 was 36,667,537.
Table
of Contents
Available Information
We
maintain an internet web site at www.systemax.com. We file reports with the
Securities and Exchange Commission (SEC) and make available free of charge on
or through this website our annual reports on Form 10-K, quarterly reports
on Form 10-Q and current reports on Form 8-K, including all
amendments to those reports. These are
available as soon as is reasonably practicable after they are filed with the
SEC. All reports mentioned above are
also available from the SECs website (www.sec.gov). The information on our
website is not part of this or any other report we file with, or furnish to,
the SEC.
Our
Board of Directors has adopted the following corporate governance documents
with respect to the Company (the Corporate Governance Documents):
·
Corporate Ethics Policy for officers, directors and employees
·
Charter for the Audit Committee of the Board of Directors
·
Charter for the Compensation Committee of the Board of Directors
·
Charter for the Nominating/Corporate Governance Committee of the Board
of Directors
·
Corporate Governance Guidelines and Principles
In
accordance with the corporate governance rules of the New York Stock
Exchange, each of the Corporate Governance Documents is available on our
Company web site, www.systemax.com.
3
Table of
Contents
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
Systemax Inc.
Condensed Consolidated
Balance Sheets
(In thousands)
|
|
March 31,
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS:
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash
|
|
$
|
37,571
|
|
$
|
58,309
|
|
Accounts receivable, net
|
|
241,398
|
|
241,860
|
|
Inventories
|
|
366,967
|
|
365,725
|
|
Prepaid expenses and other
current assets
|
|
14,842
|
|
20,066
|
|
Deferred income taxes
|
|
9,039
|
|
6,626
|
|
Total current assets
|
|
669,817
|
|
692,586
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
64,772
|
|
65,598
|
|
Deferred income taxes
|
|
6,067
|
|
8,564
|
|
Goodwill and intangibles
|
|
47,516
|
|
48,127
|
|
Other assets
|
|
2,085
|
|
2,026
|
|
Total assets
|
|
$
|
790,257
|
|
$
|
816,901
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS EQUITY:
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
315,391
|
|
$
|
346,362
|
|
Accrued expenses and other
current liabilities
|
|
73,071
|
|
80,945
|
|
Short term debt
|
|
15,677
|
|
14,168
|
|
Current portion of
capitalized lease obligations
|
|
960
|
|
1,029
|
|
Total current liabilities
|
|
405,099
|
|
442,504
|
|
|
|
|
|
|
|
Capitalized lease
obligations, net of current portion
|
|
991
|
|
1,194
|
|
Other liabilities
|
|
8,999
|
|
8,518
|
|
Total liabilities
|
|
415,089
|
|
452,216
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity:
|
|
|
|
|
|
Preferred stock
|
|
|
|
|
|
Common stock
|
|
389
|
|
389
|
|
Additional paid-in capital
|
|
180,078
|
|
180,508
|
|
Treasury stock
|
|
(26,266
|
)
|
(28,545
|
)
|
Retained earnings
|
|
222,726
|
|
210,975
|
|
Accumulated other
comprehensive (loss) income
|
|
(1,759
|
)
|
1,358
|
|
Total shareholders equity
|
|
375,168
|
|
364,685
|
|
|
|
|
|
|
|
Total liabilities and
shareholders equity
|
|
$
|
790,257
|
|
$
|
816,901
|
|
See Notes to Condensed Consolidated Financial Statements.
4
Table of
Contents
Systemax Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
|
|
Three Months Ended
|
|
|
|
March 31
|
|
|
|
2010
|
|
2009
|
|
Net sales
|
|
$
|
915,237
|
|
$
|
752,268
|
|
Cost of sales
|
|
788,996
|
|
644,718
|
|
Gross profit
|
|
126,241
|
|
107,550
|
|
Selling, general &
administrative expenses
|
|
105,865
|
|
92,530
|
|
Operating income
|
|
20,376
|
|
15,020
|
|
Foreign currency exchange
loss
|
|
1,543
|
|
781
|
|
Interest and other income,
net
|
|
(181
|
)
|
(285
|
)
|
Interest expense
|
|
217
|
|
158
|
|
Income before income taxes
|
|
18,797
|
|
14,366
|
|
Provision for income taxes
|
|
7,046
|
|
5,668
|
|
Net income
|
|
$
|
11,751
|
|
$
|
8,698
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
Basic
|
|
$
|
.32
|
|
$
|
.24
|
|
Diluted
|
|
$
|
.31
|
|
$
|
.23
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
Basic
|
|
36,785
|
|
36,621
|
|
Diluted
|
|
37,471
|
|
37,273
|
|
See Notes to Condensed Consolidated Financial Statements.
5
Table of
Contents
Systemax Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
|
|
Three Months Ended
|
|
|
|
March 31
|
|
|
|
2010
|
|
2009
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
Net income
|
|
$
|
11,751
|
|
$
|
8,698
|
|
Adjustments to reconcile net
income to net cash used in operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
3,981
|
|
2,676
|
|
(Benefit) provision for
deferred income taxes
|
|
(20
|
)
|
461
|
|
Provision for returns and
doubtful accounts
|
|
946
|
|
960
|
|
Compensation expense related
to equity compensation plans
|
|
600
|
|
670
|
|
Excess tax benefit from
exercises of stock options
|
|
(657
|
)
|
(6
|
)
|
Loss on dispositions and
abandonment
|
|
9
|
|
10
|
|
Changes in operating assets
and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
(8,524
|
)
|
8,523
|
|
Inventories
|
|
(3,281
|
)
|
(19,920
|
)
|
Prepaid expenses and other
current assets
|
|
4,932
|
|
(1,603
|
)
|
Accounts payable, accrued
expenses and other current liabilities
|
|
(30,196
|
)
|
(32,489
|
)
|
Net cash used in operating
activities
|
|
(20,459
|
)
|
(32,020
|
)
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
Purchases of property, plant
and equipment
|
|
(3,989
|
)
|
(2,818
|
)
|
Proceeds from disposals of
property, plant and equipment
|
|
|
|
30
|
|
Net cash used in investing
activities
|
|
(3,989
|
)
|
(2,788
|
)
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings from
revolving credit facilities
|
|
2,308
|
|
|
|
Repayments from capital
lease obligations
|
|
(319
|
)
|
(256
|
)
|
Proceeds from issuance of
common stock
|
|
612
|
|
3
|
|
Repurchase of treasury stock
|
|
|
|
(377
|
)
|
Excess tax benefit from
exercises of stock options
|
|
657
|
|
6
|
|
Net cash provided by (used
in) financing activities
|
|
3,258
|
|
(624
|
)
|
|
|
|
|
|
|
Effects of exchange rates on
cash
|
|
452
|
|
92
|
|
|
|
|
|
|
|
Net decrease in cash and
cash equivalents
|
|
(20,738
|
)
|
(35,340
|
)
|
Cash beginning of period
|
|
58,309
|
|
115,967
|
|
Cash end of period
|
|
$
|
37,571
|
|
$
|
80,627
|
|
Supplemental disclosures of
non-cash investing and financing activities:
|
|
|
|
|
|
Acquisitions of equipment
through capital leases
|
|
$
|
47
|
|
$
|
36
|
|
See Notes to Condensed Consolidated Financial Statements.
6
Table
of Contents
Systemax Inc.
Condensed Consolidated Statement of Shareholders Equity (Unaudited)
(In thousands)
|
|
Common
Stock
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
Number
of
|
|
|
|
Additional
|
|
Treasury
|
|
|
|
Other
|
|
|
|
|
|
Shares
|
|
|
|
Paid-in
|
|
Stock,
|
|
Retained
|
|
Comprehensive
|
|
Comprehensive
|
|
|
|
Outstanding
|
|
Amount
|
|
Capital
|
|
At Cost
|
|
Earnings
|
|
Income
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
January 1, 2010
|
|
36,451
|
|
$
|
389
|
|
$
|
180,508
|
|
$
|
(28,545
|
)
|
$
|
210,975
|
|
$
|
1,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
|
|
|
|
600
|
|
|
|
|
|
|
|
|
|
Issuance
of restricted stock
|
|
100
|
|
|
|
(465
|
)
|
1,184
|
|
|
|
|
|
|
|
Restricted
stock withheld for employee taxes
|
|
(36
|
)
|
|
|
(367
|
)
|
(432
|
)
|
|
|
|
|
|
|
Exercise
of stock options
|
|
129
|
|
|
|
(915
|
)
|
1,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax benefit on stock-based compensation
|
|
|
|
|
|
717
|
|
|
|
|
|
|
|
|
|
Change
in cumulative translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
(3,117
|
)
|
$
|
(3,117
|
)
|
Net
income
|
|
|
|
|
|
|
|
|
|
11,751
|
|
|
|
11,751
|
|
Total
comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
March 31, 2010
|
|
36,644
|
|
$
|
389
|
|
$
|
180,078
|
|
$
|
(26,266
|
)
|
$
|
222,726
|
|
$
|
(1,759
|
)
|
|
|
See Notes to Condensed
Consolidated Financial Statements.
7
Table of
Contents
Systemax
Inc.
Notes to Condensed Consolidated Financial
Statements (Unaudited)
1.
Basis
of Presentation
The
accompanying condensed consolidated financial statements of the Company and its
wholly-owned subsidiaries are unaudited and have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and the rules and regulations of the
Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America are not required in these interim
financial statements and have been condensed or omitted. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Certain prior year amounts have been reclassified to conform to current year
presentation.
In the opinion of
management, the accompanying condensed consolidated financial statements
contain all normal and recurring adjustments necessary to present fairly the
financial position of the Company as of March 31, 2010 and the results of
operations for the three month periods ended March 31, 2010 and 2009, cash
flows for the three month periods ended March 31, 2010 and 2009 and
changes in shareholders equity for the three month period ended March 31,
2010. The December 31, 2009
condensed consolidated balance sheet has been derived from the audited
consolidated financial statements included in the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 2009.
These condensed consolidated
financial statements should be read in conjunction with the Companys audited
consolidated financial statements as of December 31, 2009 and for the year
then ended included in the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2009.
The results for the three months ended March 31, 2010 are not
necessarily indicative of the results for an entire year.
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 herein,
fiscal years and quarters are referred to as if they ended on the traditional
calendar month. The actual fiscal first
quarter ended on April 3, 2010. The
first quarters of both 2010 and 2009 included 13 weeks.
2.
Net
Income per Common Share
Net income per common share
- basic was calculated based upon the weighted average number of common shares
outstanding during the respective periods presented using the two class method
of computing earnings per share. Net income per common share - diluted was
calculated based upon the weighted average number of common shares outstanding
and included the equivalent shares for dilutive options outstanding during the
respective periods, including unvested options. The dilutive effect of
outstanding options issued by the Company is reflected in net income per share -
diluted using the treasury stock method. Under the treasury stock method,
options will only have a dilutive effect when the average market price of
common stock during the period exceeds the exercise price of the options. The
weighted average number of stock options outstanding excluded from the
computation of diluted earnings per share was 0.5 million and 0.7 million
shares for the three months ended March 31, 2010 and 2009, respectively,
due to their antidilutive effect.
3.
Comprehensive
Income
Comprehensive income
consists of net income and foreign currency translation adjustments and is
included in the condensed consolidated statement of shareholders equity. For
the three month periods ended March 31, 2010 and 2009, comprehensive
income was $8.6 million and $8.1 million, respectively.
4.
Credit
Facilities
The Company maintains a $120.0 million (which
may be increased by up to $30.0 million, subject to certain conditions) secured
revolving credit agreement with a group of financial institutions which provides
for borrowings in the United States and United Kingdom. The borrowings are
secured by all of the Companys domestic and United Kingdom accounts
receivable, all domestic inventories, the United Kingdom headquarters building
and the Companys shares of stock in its domestic and United Kingdom subsidiaries. The credit
facility expires and the outstanding borrowings thereunder are due on October 26,
2010. The Company expects to renew this facility in 2010. The revolving credit
agreement contains certain financial and other covenants, including maintaining
a minimum level of availability and restrictions on capital expenditures,
acquisitions and payments of dividends. The Company was in compliance with all
of the covenants as of March 31, 2010. As of March 31, 2010, eligible
collateral under the agreement was $120.0 million, total availability was
$105.3 million, total outstanding letters of credit was $12.4 million and total
outstanding advances were $2.3 million.
8
Table of
Contents
The Companys Inmac-WStore subsidiary
maintains a secured revolving credit agreement with a financial institution in
France which is secured by Inmac-WStore accounts receivable balances. Available
amounts for borrowing under this facility includes all accounts receivable
balances not over 60 days past due reduced by the greater of 4.0 million or
10% of the eligible accounts receivable. As of March 31, 2010 there was
availability under this credit facility of approximately 4.7 million ($6.3
million) and there was 9.9 million ($13.4 million) of outstanding borrowings.
The Companys WStore UK subsidiary maintains
a £2 million secured revolving credit agreement with a financial institution in
the United Kingdom which is secured by WStore UKs accounts receivable
balances. Available amounts for borrowing under this facility includes accounts
receivable balances less 30% retention. As of March 31, 2010 there was
availability under this credit facility of approximately £0.5 million ($0.8
million).
5.
Business
Exit Costs
The Company
announced plans to exit its Software Solutions segment, in
the second quarter of 2009, as the result of economic conditions and
difficulties in marketing the segments products successfully.
The following table
reconciles movement in the associated liabilities incurred from the inception
of the plan (in thousands):
|
|
Severance
and
Personnel
Costs
|
|
Contract
Termination
Costs
|
|
Other Exit Costs
|
|
Total
|
|
Balance January 1, 2009
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Charged to expense
|
|
1,208
|
|
1,644
|
|
80
|
|
2,932
|
|
Paid or otherwise settled
|
|
(1,208
|
)
|
(697
|
)
|
(80
|
)
|
(1,985
|
)
|
Balance December 31, 2009
|
|
|
|
947
|
|
|
|
947
|
|
Charged to expense
|
|
|
|
36
|
|
|
|
36
|
|
Paid or otherwise settled
|
|
|
|
(65
|
)
|
|
|
(65
|
)
|
Balance March 31, 2010
|
|
$
|
|
|
$
|
918
|
|
$
|
|
|
$
|
918
|
|
6.
Segment
Information
Systemax
is primarily a direct marketer of brand name and private label products. Our
operations are organized into two reportable business segments Technology
Products and Industrial Products. Our Software Solutions segment, which was
exited in the second quarter of 2009, is no longer a reportable segment for
reporting purposes.. Our Technology Products segment sells computers, computer
supplies and consumer electronics which are marketed in North America and
Europe. Except for certain personal
computer (PC) products that we assemble ourselves and sell under the
trademarks
Systemax
and
Ultra,
substantially
all of our products are manufactured by other companies. We also sell certain computer-related
products manufactured for us to our own design under the trademark
Systemax and Ultra
.
Our Industrial Products
segment sells a wide array of material handling equipment, storage equipment
and consumable industrial items which are marketed in North America.
Substantially all of these products are manufactured by other companies. Some products are manufactured for us to our
own design and marketed under the trademarks
Global
,
GlobalIndustrial.com
and
Nexel.
The Company announced plans to exit its Software Solutions segment
during the second quarter of 2009. Substantially all of the third party
business activities of the Software Solutions segment have ended. Current and
prior year results for Software Solutions are now included in Corporate and
other
below.
The Companys chief operating decision-maker
is the Companys Chief Executive Officer. The Company evaluates segment
performance based on operating income, before net interest, foreign exchange
gains and losses, internal management fees and income taxes. Corporate costs
not identified with the disclosed segments are grouped as Corporate and other
below.
The chief operating
decision-maker reviews assets and makes 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.
The Companys Industrial
Products and Technology Products segments sell dissimilar products. Industrial
products are generally higher in price, lower in volume and higher in product
margin. Technology products are generally higher in volume, lower in price and
lower in product margin. This results in higher operating margin for the
Industrial Products segment. Each segment carries specifically identifiable
selling, general and administrative expenses, with the selling, general and
administrative expenses
9
Table of Contents
for the Industrial
Products segment being higher as a percentage of sales than those of the
Technology Products segment as a result of the Industrial Products segment
having a longer selling cycle than the Technology Products segment.
Financial information relating to the Companys
operations by reportable segment was as follows (in thousands):
|
|
Three Months Ended
|
|
|
|
March 31
|
|
|
|
2010
|
|
2009
|
|
Net sales:
|
|
|
|
|
|
Technology Products
|
|
$
|
860,139
|
|
$
|
705,994
|
|
Industrial Products
|
|
54,531
|
|
45,656
|
|
Corporate and other
|
|
567
|
|
618
|
|
Consolidated
|
|
$
|
915,237
|
|
$
|
752,268
|
|
|
|
|
|
|
|
Operating income (loss):
|
|
|
|
|
|
Technology Products
|
|
$
|
21,755
|
|
$
|
22,301
|
|
Industrial Products
|
|
3,579
|
|
2,262
|
|
Corporate and other
|
|
(4,958
|
)
|
(9,543
|
)
|
Consolidated
|
|
$
|
20,376
|
|
$
|
15,020
|
|
Financial information relating to the Companys operations by
geographic area was as follows (in thousands):
|
|
Three
Months Ended
|
|
|
|
March 31
|
|
|
|
2010
|
|
2009
|
|
Net sales:
|
|
|
|
|
|
United States:
|
|
|
|
|
|
Technology Products
|
|
$
|
527,149
|
|
$
|
|
$461,830
|
|
Industrial Products
|
|
54,531
|
|
45,656
|
|
Corporate and other
|
|
567
|
|
618
|
|
United States total
|
|
582,247
|
|
508,104
|
|
Other North America (Technology Products)
|
|
53,977
|
|
40,288
|
|
North America total
|
|
636,224
|
|
548,392
|
|
Europe (Technology Products)
|
|
279,013
|
|
203,876
|
|
Consolidated
|
|
$
|
915,237
|
|
$
|
752,268
|
|
Revenues are attributed to
countries based on the location of the selling subsidiary.
7.
Legal
Proceedings
State of Florida, Office of
the Attorney General
On September 4, 2009 the Office of the Attorney General, Department of
Legal Affairs for the State of Florida filed a lawsuit against OnRebate.com
Inc., TigerDirect Inc. and Systemax Inc. in the Circuit Court of the Eleventh
Judicial Court for Miami-Dade County, Florida alleging deceptive and unfair trade
practices under Florida law relating to the offering and processing of customer
rebates. The lawsuit seeks injunctive
relief, damages, civil penalties and other equitable relief. The Company denies the allegations in the
lawsuit and intends to vigorously defend the case.
Other Matters
Systemax is a party to various pending legal proceedings and disputes
arising in the normal course of business, including those involving commercial,
employment, tax and intellectual property related claims, none of which, in
managements opinion, is anticipated to have a material adverse effect on our
condensed consolidated financial statements.
10
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Item 2.
Managements Discussion and Analysis of
Financial Condition and Results of Operations.
Forward Looking Statements
This
report contains forward looking statements within the meaning of that term in
the Private Securities Litigation Reform Act of 1995 (Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934). Additional written or oral
forward looking statements may be made by the Company from time to time, in
filings with the Securities and Exchange Commission or otherwise. Statements contained in this report that are
not historical facts are forward looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements may include, but
are not limited to, projections of revenue, income or loss and capital
expenditures, statements regarding future operations, financing needs,
compliance with financial covenants in loan agreements, plans for acquisition
or sale of assets or businesses and consolidation of operations of newly
acquired businesses, and plans relating to products or services of the Company,
assessments of materiality, predictions of future events and the effects of
pending and possible litigation, as well as assumptions relating to the
foregoing. In addition, when used in
this discussion, the words anticipates, believes, estimates, expects, intends,
plans and variations thereof and similar expressions are intended to identify
forward looking statements.
Forward-looking
statements in this report are based on the Companys beliefs and expectations
as of the date of this report and are subject to risks and uncertainties which
may have a significant impact on the Companys business, operating results or
financial condition. Investors are cautioned that these forward-looking
statements are inherently uncertain. Should one or more of the risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results or outcomes may vary materially from those described herein.
Statements in this report, particularly in Item 2. Managements Discussion and
Analysis of Financial Condition and Results of Operations and the Notes to
Condensed Consolidated Financial Statements, describe certain factors, among
others, that could contribute to or cause such differences.
Readers
are cautioned not to place undue reliance on any forward looking statements
contained in this report, which speak only as of the date of this report. We undertake no obligation to publicly
release the result of any revisions to these forward looking statements that
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unexpected events.
Overview
Systemax
is primarily a direct marketer of brand name and private label products. Our
operations are organized in two reportable business segments Technology
Products and Industrial Products. Our
Software Solutions segment, which was exited in the second quarter of 2009, is
no longer a reportable segment for reporting purposes. Our Technology Products
segment sells computers, computer supplies and consumer electronics which are
marketed in North America and Europe.
Except for certain personal computer (PC) products that we assemble
ourselves and sell under the trademarks
Systemax
and
Ultra,
substantially all of our products are manufactured
by other companies. We also sell certain
computer-related products manufactured for us to our own design under the
trademark
Systemax and Ultra
. For the three
months ended March 31, 2010, Technology products accounted for 94% of our
net sales.
Our
Industrial Products segment sells a wide array of material handling equipment,
storage equipment and consumable industrial items which are marketed in North
America. Substantially all of these
products are manufactured by other companies.
Some products are manufactured for us to our own design and marketed under
the trademarks
Global
,
GlobalIndustrial.com
and
Nexel
. Industrial products accounted
for 6% of our net sales for the three months ended March 31, 2010. In both of our Technology Products and
Industrial Products segments, we offer our customers a broad selection of
products, prompt order fulfillment and extensive customer service. In our
Industrial Products segment, we recently deployed an entirely new ecommerce
website (www.globalindustrial.com) that we believe is generationally more
advanced than the sites of many other companies in the sector.
We
announced plans to exit the Software Solutions segment during the second
quarter of 2009. See Note 6 to the condensed consolidated financial statements
included in Item 1 of this Form 10-Q for additional financial information
about our business segments as well as information about our geographic
operations.
Our Industrial Products and Technology Products
segments sell dissimilar products. Industrial products are generally higher in
price, lower in volume and higher in product margin. Technology products are
generally higher in volume, lower in price and lower in product margin. This
results in higher operating margin for the Industrial Products segment. Each
segment carries specifically identifiable selling, general and administrative
expenses, with the selling, general and administrative expenses for the
Industrial Products segment being higher as a percentage of sales than those of
the Technology Products segment as a result of the Industrial Products segment
having a longer selling cycle than the Technology Products segment.
The
market for computer products and consumer electronics is subject to intense
price competition and is characterized by narrow gross profit margins. The
North American industrial products market is highly fragmented and we compete
against multiple
11
Table of
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distribution
channels. Distribution is working capital intensive, requiring us to incur
significant costs associated with the warehousing of many products, including
the costs of maintaining inventory, leasing warehouse space, inventory
management systems, and employing personnel to perform the associated tasks. We
supplement our on-hand product availability by maintaining relationships with
major distributors and manufacturers, utilizing a combination of stock and
drop-shipment fulfillment.
The
primary component of our operating expenses historically has been employee
related costs, which includes items such as wages, commissions, bonuses,
employee benefits and stock option expenses.
We continually assess our operations to ensure that they are efficient,
aligned with market conditions and responsive to customer needs.
The
discussion of our results of operations and financial condition that follows
will provide information that will assist in understanding our financial
statements, the factors that we believe may affect our future results and
financial condition as well as information about how certain accounting principles
and estimates affect the consolidated financial statements. This discussion
should be read in conjunction with the condensed consolidated financial
statements included herein and in conjunction with the audited financial
statements as of December 31, 2009 and the other information provided in
our Annual Report on Form 10-K for the fiscal year ended December 31,
2009.
In the discussion of our
results of operations we refer to business to business sales, consumer channel
sales and period to period constant currency comparisons. Business to business
sales are sales made direct to other businesses through managed business
relationships, outbound call centers and extranets. Sales in the Industrial
Products segment are considered to be business to business sales. Consumer
channel sales are sales from retail stores, consumer websites, inbound call
centers and television shopping channels. Constant currency refers to the
adjustment of the results of our foreign operations to exclude the effects of
period to period fluctuations in currency exchange rates.
Critical Accounting Policies and Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, and revenues and expenses
during the period. Significant accounting policies employed by the Company,
including the use of estimates, were presented in the Notes to Consolidated
Financial Statements of the Companys 2009 Annual Report on Form 10-K.
Critical
accounting policies are those that are most important to the presentation of
our financial condition and results of operations, require managements most
difficult, subjective and complex judgments, and involve uncertainties. The
accounting policies that have been identified as critical to our business
operations and understanding the results of operations pertain to revenue
recognition, accounts receivable and allowance for doubtful accounts,
inventories, goodwill and intangible assets, long-lived assets, accruals,
income taxes and restructuring charges. The application of each of these
critical accounting policies and estimates was discussed in Item 7 of the
Companys Annual Report on Form 10-K for the year ended December 31,
2009. There have been no significant changes in the application of critical
accounting policies or estimates during 2010. Management believes that full
consideration has been given to all relevant circumstances that we may be
subject to, and the condensed consolidated financial statements of the Company
accurately reflect managements best estimate of the consolidated results of
operations, financial position and cash flows of the Company for the periods
presented. Because of the uncertainty in these estimates, actual results could
differ from estimates used in applying the critical accounting policies. We are
not aware of any reasonably likely events or circumstances which would result
in different amounts being reported that would materially affect the Companys
financial condition or results of operations.
Recent Accounting Pronouncements
Public companies in the United States are subject to the accounting and
reporting requirements of various authorities, including the Financial
Accounting Standards Board (FASB) and the Securities and Exchange Commission
(SEC). These authorities issue numerous pronouncements, most of which are not
applicable to the Companys current or reasonably foreseeable operating
structure. Below are the new authoritative pronouncements that management
believes are relevant to the Companys current operations.
In
October 2009, the FASB issued revised guidance related to multiple-element
arrangements which requires an entity to allocate arrangement consideration at
the inception of an arrangement to all deliverables based on relative selling
prices. This update eliminates the use of the residual method of allocation and
requires the relative-selling-price method in all circumstances. This guidance
is effective for fiscal years beginning on or after June 15, 2010.
Companies may use either prospective application for revenue arrangements
entered into, or materially modified, after the effective date or through
retrospective application to all revenue arrangements for all periods
presented. The Company does not believe this amended guidance will have a
material impact on its consolidated financial statements.
12
Table
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In
October 2009, the FASB issued amended guidance that affects how entities
account for revenue arrangements that contain both hardware and software
elements. Products that rely on software
will be accounted for under the revised multiple-element arrangement revenue
recognition guidance mentioned above rather than software revenue recognition
guidance. The revised guidance must be adopted no later than fiscal years
beginning on or after June 15, 2010. The transition method and period for
the adoption of this guidance and the revisions to the multiple-element
arrangements guidance noted above must be the same. The Company does not
believe that this guidance will have a material impact on its consolidated
financial statements.
13
Table of
Contents
Results of Operations
Three Months Ended March 31, 2010 compared to the Three Months
Ended March 31, 2009
Key Performance Indicators (in thousands):
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
%
|
|
|
|
2010
|
|
2009
|
|
Change
|
|
Net sales by segment:
|
|
|
|
|
|
|
|
Technology products
|
|
$
|
860,139
|
|
$
|
705,994
|
|
21.8
|
%
|
Industrial products
|
|
54,531
|
|
45,656
|
|
19.4
|
%
|
Corporate and other
|
|
567
|
|
618
|
|
(8.3
|
)%
|
Consolidated net sales
|
|
$
|
915,237
|
|
752,268
|
|
21.7
|
%
|
Net sales by geography:
|
|
|
|
|
|
|
|
North America
|
|
$
|
636,224
|
|
$
|
548,392
|
|
16.0
|
%
|
Europe
|
|
279,013
|
|
203,876
|
|
36.9
|
%
|
Consolidated net sales
|
|
$
|
915,237
|
|
$
|
752,286
|
|
21.7
|
%
|
Consolidated g
ross margin
|
|
13.8
|
%
|
14.3
|
%
|
(0.5
|
)%
|
Consolidated selling, general and
administrative costs
|
|
$
|
105,865
|
|
$
|
92,530
|
|
14.4
|
%
|
Consolidated selling, general and
administrative costs as a % of net sales
|
|
11.6
|
%
|
12.3
|
%
|
(0.7
|
)%
|
Operating income (loss) by
segment
:
|
|
|
|
|
|
|
|
Technology products
|
|
$
|
21,755
|
|
22,301
|
|
(2.4
|
)%
|
Industrial products
|
|
3,579
|
|
2,262
|
|
58.2
|
%
|
Corporate and other
|
|
(4,958
|
)
|
(9,543
|
)
|
(48.0
|
)%
|
Consolidated operating income
|
|
20,376
|
|
15,020
|
|
35.7
|
%
|
Operating margin by segment:
|
|
|
|
|
|
|
|
Technology products
|
|
2.5
|
%
|
3.2
|
%
|
(0.7
|
)%
|
Industrial products
|
|
6.6
|
%
|
5.0
|
%
|
1.6
|
%
|
Consolidated operating margin
|
|
2.2
|
%
|
2.0
|
%
|
0.2
|
%
|
Effective income tax rate
|
|
37.5
|
%
|
39.5
|
%
|
(2.0
|
)%
|
Net income
|
|
$
|
11,751
|
|
$
|
8,698
|
|
35.1
|
%
|
Net margin
|
|
1.3
|
%
|
1.2
|
%
|
0.1
|
%
|
NET SALES
SEGMENTS
The Technology Products
net sales increase is attributable to increased business to business sales
worldwide as a result of improved global economic conditions, the purchase of
Circuit City assets and the subsequent re-launch of the Circuit City website in
mid 2009 and the acquisition of WStore Europe SA (WStore) in September 2009.
On a constant currency basis and excluding the impact of the WStore acquisition
on first quarter 2010 results, Technology Products net sales would have grown
11.6%.
Industrial Products
sales, primarily business to business, increased in the first quarter of 2010
as compared to the same period in 2009. The sales increase is attributed to
accelerated demand seen for the segments products as the result of improved
economic conditions in the first quarter 2010. Industrial Products sales also
benefited from implemented strategies such as adding additional products to
catalogs and websites.
The Company announced plans
to exit its Software solutions segment during the second quarter of 2009.
Substantially all of the third party business activities of ProfitCenter
Software have ended. Current and prior year results for this segment are now
included in corporate and other.
GEOGRAPHIES
North American sales
benefited from a marked increase in business to business activity during the
first quarter of 2010 and a modest increase in consumer channel sales which
include results related to the re-launch of the Circuit City website in the
second quarter of 2009. On a constant currency basis North American sales would
have increased 14.4%.
14
Table of
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The trend of declining
sales in Europe during 2009 reversed in the first quarter of 2010 as compared
to the first quarter of 2009 as global economic conditions improved. As in North America, European sales benefited
from an improvement in business to business sales. On a constant currency basis
and excluding the impact of the WStore acquisition on first quarter 2010
results, European sales would have increased 5.7%.
Worldwide consumer-channel revenues were $470.0
million in the first quarter of 2010 compared to $429.8 million in the same
period in 2009, an increase of 9.4%. On a constant currency basis and excluding
the results of the WStore acquisition on first quarter results, worldwide
consumer channel sales grew 1.0%. Worldwide business to business channel sales
were $445.2 million in the first quarter of 2010 compared to $322.5 million in
the same period in 2009, a 38.0% increase. On a constant currency basis and
excluding the results of the WStore acquisition on first quarter results,
worldwide consumer channel sales grew 27.2%.
Worldwide business to business sales increased as the result of improved
global economic conditions in the first quarter of 2010 and the contribution to
results of WStore which was acquired in September 2009. Growth was driven
primarily by volume increases in computers, including laptops and netbooks,
consumer electronics, including televisions and computer accessories and
software.
GROSS MARGIN
The decline in
consolidated gross margin resulted primarily from lower prices on certain
products and freight incentives in order to both maintain and grow market share
and to respond to competitive pricing pressures. The Company expects to continue
offering such selective incentives to maintain and grow market share in
anticipation of future gross margin expansion.
Gross margin is dependent on variables such as product mix, price
protection and other sales incentives offered by the Companys vendors,
competition, pricing strategy, cooperative advertising funds required to be
classified as a reduction to cost of sales, freight discounting and other
variables, any or all of which may result in fluctuations in gross margin.
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
The
increase in selling, general and administrative expenses was primarily the
result of $9.3 million of increased salary and other related expenses, of which
$5.3 million related to the WStore acquisition, $1.4 million of increased rent
and related expenses, of which $0.4 million related to the WStore acquisition,
$1.3 million of increased depreciation expenses, and $0.9 million of increased
credit card fees of which $0.4 million related to WStore and Circuit City
acquisitions.
OPERATING
MARGIN
The decline in Technology
Products operating margin is primarily attributable to the price promotions and
freight discounts offered in the quarter and costs related to the WStore
integration
The increase in
Industrial Products operating margin is attributable to increased sales,
resulting from improved economic conditions and the segments new product
offerings, as well as cost reduction programs originally implemented during
2009.
Corporate and other
expenses declined in the quarter primarily as the result of lower payroll and
related costs in our corporate overhead departments and lower payroll and
operating costs for the Software Solutions business.
INTEREST AND OTHER INCOME AND
INTEREST EXPENSE
The interest expense increase in 2010 is primarily
attributable to the short term debt assumed in the WStore acquisition and
interest on capital lease obligations.
INCOME TAXES
The
Companys effective tax rate for the first quarter of 2010 was 37.5% compared
to 39.5% in the first quarter of 2009. The lower effective tax rate in 2010 is
the result of the Company having a higher percentage of its pretax income in
countries with lower tax rates as compared to 2009.
Financial Condition, Liquidity and Capital Resources
Our
primary liquidity needs are to support working capital requirements in our
business, fund capital expenditures, repurchase Company stock, fund special
dividends declared by our Board of Directors and fund acquisitions. We rely
principally upon operating cash flow to meet these needs. We believe that cash
flow available from these sources and our availability under credit facilities
will be sufficient to fund our working capital and other cash requirements for
the next twelve months.
15
Table of Contents
Selected
liquidity data (in thousands):
|
|
March 31, 2010
|
|
December 31,
2009
|
|
$ Change
|
|
Cash
|
|
$
|
37,571
|
|
$
|
58,309
|
|
$
|
(20,738
|
)
|
Accounts receivable, net
|
|
$
|
241,398
|
|
$
|
241,860
|
|
$
|
(462
|
)
|
Inventories, net
|
|
$
|
366,967
|
|
$
|
365,725
|
|
$
|
1,242
|
|
Prepaid expenses and other current assets
|
|
$
|
14,842
|
|
$
|
20,066
|
|
$
|
(5,224
|
)
|
Accounts payable
|
|
$
|
315,391
|
|
$
|
346,362
|
|
$
|
(30,971
|
)
|
Accrued expenses and other current liabilities
|
|
$
|
73,071
|
|
$
|
80,945
|
|
$
|
(7,874
|
)
|
Current portion of capitalized lease obligations
|
|
$
|
960
|
|
$
|
1,029
|
|
$
|
(69
|
)
|
Short term debt
|
|
$
|
15,677
|
|
$
|
14,168
|
|
$
|
1,509
|
|
Working capital
|
|
$
|
264,718
|
|
$
|
250,082
|
|
$
|
14,636
|
|
Our
working capital increased primarily as the result of the cash generated from
net income for the period adjusted for non cash charges of approximately $16.6
million, the decreases in accounts receivable and prepaid and other current
assets offset by payments in accounts payable and accrued expenses. The
reduction in accounts payable balances in the quarter was primarily the result
of the Company taking advantage of early pay discounts related to inventory
purchases. Our inventory turnover remained relatively consistent at 8.4 times
on an annual basis. Future accounts receivable and inventory balances will
continue to fluctuate with changes in sales volume and the mix of our net sales
between consumer and business customers.
The
decrease in cash used in operations during 2010 resulted from changes in our
working capital accounts, which used $37.1 million in cash compared to $45.5
million used in 2009, primarily the result of lower inventory purchases in 2010
as compared to last year. Cash generated from net income adjusted by other
non-cash items provided $16.6 million during 2010 compared to $13.5 million
provided by these items during 2009, primarily as a result of a higher net
income in 2010.
Cash
flows used in investing activities during 2010 and 2009 were for capital
expenditures relating to our retail stores and information technology. Net cash
of $3.3 million was provided by financing activities during 2010. We had borrowings, net of repayments, of
approximately $2.0 million and proceeds and excess tax benefits from stock
option exercises were approximately $1.3 million. During 2009 net cash of $0.6
million was used in financing activities primarily related to the repayment of
capital lease obligations and the repurchase of Company stock.
Under our $120.0 million (which may be increased up to $150.0 million, subject to certain conditions) secured revolving credit agreement for borrowings in the United States and United Kingdom, as of March 31, 2010, eligible collateral was $120.0 million and total availability was $105.3 million. There were outstanding letters of credit of $12.4 million and there were $2.3 million of outstanding advances as of March 31, 2010. Borrowings are secured by all of the domestic and United Kingdom accounts receivable, the domestic inventories of the Company, the Companys shares of stock in its domestic and United Kingdom subsidiaries and the Companys United Kingdom headquarters building. The credit facility expires and the outstanding borrowings thereunder are due on October 26, 2010. We expect
to renew this facility in 2010.
The revolving credit agreement contains certain financial and other covenants, including maintaining a minimum level of availability and restrictions on capital expenditures and payments of dividends. We were in compliance with all of the covenants under this facility as of March 31, 2010.
The
Companys WStore subsidiary (See Note 2) maintains a revolving credit agreement
with a financial institution in France which is secured by WStore accounts
receivable balances. Available amounts for borrowing under this facility
includes all accounts receivable balances not over 60 days past due reduced by
the greater of 4.0 million or 10% of the eligible accounts receivable. As of March 31,
2010 there was availability under this credit facility of approximately 4.7
million ($6.3 million) and there was 9.9 million ($13.4 million) of
outstanding borrowings.
The Companys WStore UK subsidiary (See Note 2) maintains a £2 million
secured revolving credit agreement with a financial institution in the United
Kingdom which is secured by WStore UKs accounts receivable balances. Available
amounts for borrowing under this facility includes accounts receivable balances
less 30% retention. As of March 31, 2010 there was availability under this
credit facility of approximately £0.5 million ($0.8 million).
We
also have certain obligations with various parties that include commitments to
make future payments. Our principal commitments at March 31, 2010
consisted of payments under operating leases for certain of our real property
and equipment, payments under capital leases for equipment, and payments under
employment and other service agreements.
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Our
earnings and cash flows are seasonal in nature, with the first and fourth
quarters of the fiscal year generating somewhat higher earnings and cash flows
than the second and third quarters. Levels of earnings and cash flows are
dependent on factors such as consolidated gross margin and selling, general and
administrative costs as a percentage of sales, product mix and relative levels
of domestic and foreign sales. Unusual expense items, such as one time charges
and settlements, may impact earnings and are separately disclosed. We expect
that past performance may not be indicative of future performance due to the
competitive nature of our Technology Products segment where the need to adjust
prices to gain or hold market share is prevalent.
Macroeconomic conditions,
such as business and consumer sentiment, may affect our revenues, cash flows or
financial condition. However, we do not
believe that there is a direct correlation between any specific macroeconomic
indicator and our revenues, cash flows or financial condition. We are not currently interest rate sensitive,
as we have significant cash balances and minimal debt.
We
anticipate cash needs to support our growth and expansion plans, continued
investment in upgrading and expanding our technological capabilities and
information technology infrastructure, opening of new retail stores, opening of
a new distribution center in 2010 and in building out and expanding our existing
distribution center facilities and inventory systems. These expenses and capital expenditures will
require significant levels of liquidity, which we believe can be adequately
funded from our currently available cash resources. We have recently engaged in
several opportunistic acquisitions, choosing to pay the purchase price in cash,
and may do so in the future as favorable situations arise. However, a deep and prolonged period of
reduced consumer spending could adversely impact our cash resources and force
us to either forego future acquisition opportunities or to pay the purchase
price in shares of our common stock, which could have a dilutive effect on the
our earnings per share. In addition we anticipate cash needs for implementation
of financial and retail point of sale systems. We believe that our cash
balances and our availability under credit facilities will be sufficient to
fund our working capital and other cash requirements for the next twelve
months.
We
maintain our cash primarily in money market funds or their equivalent. As of March 31,
2010, all of our investments had maturities of less than three months. Accordingly, we do not believe that our
investments have significant exposure to interest rate risk.
Off-balance Sheet Arrangements
The
Company has not created, and is not party to, any special-purpose or off-balance
sheet entities for the purpose of raising capital, incurring debt or operating
the Companys business. The Company does not have any arrangements or
relationships with entities that are not consolidated into the financial
statements that are reasonably likely to materially affect the Companys
liquidity or the availability of capital resources.
Item 3.
Quantitative and Qualitative Disclosures
About Market Risk.
We are exposed to market risks, which include changes in U.S. and
international interest rates as well as changes in currency exchange rates
(principally Pounds, Euros and Canadian dollars) as measured against the U.S.
dollar and each other.
The translation of the financial statements of our operations outside
of the United States is impacted by movements in foreign currency exchange
rates. Changes in currency exchange rates as measured against the U.S. dollar
may positively or negatively affect sales, gross margins, operating expenses
and retained earnings as expressed in U.S. dollars. We have limited involvement
with derivative financial instruments and do not use them for trading
purposes. We may enter into foreign
currency options or forward exchange contracts aimed at limiting in part the
impact of certain currency fluctuations, but as of March 31, 2010 we had
no outstanding option or forward exchange contracts.
Our exposure to market risk for changes in interest rates relates
primarily to our variable rate debt. Our variable rate debt includes short-term
borrowings under our credit facilities. As of March 31, 2010, there were
no outstanding balances under our variable rate credit facility. A hypothetical
change in average interest rates of one percentage point is not expected to
have a material effect on our financial position, results of operations or cash
flows.
Item 4.
Controls and Procedures
Under
the supervision and with the participation of the Companys management,
including the Companys Chief Executive Officer and Chief Financial Officer,
the Company carried out an evaluation of the effectiveness of the design and
operation of the Companys disclosure controls and procedures as of March 31,
2010. Based upon this evaluation, the Companys Chief Executive Officer and
Chief Financial Officer have concluded that the Companys disclosure controls
and procedures are effective.
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Changes in Internal Control Over Financial Reporting
There
have been no changes in the Companys internal controls over financial
reporting during the quarterly period ended March 31, 2010 that have
materially affected, or are reasonably likely to materially affect, the Companys
internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings
State of Florida, Office of the Attorney General
On September 4, 2009 the Office of the Attorney
General, Department of Legal Affairs for the State of Florida filed a lawsuit
against OnRebate.com Inc, TigerDirect Inc. and Systemax Inc. in the Circuit
Court of the Eleventh Judicial Court for Miami-Dade County, Florida alleging
deceptive and unfair trade practices under Florida law relating to the offering
and processing of customer rebates. The
lawsuit seeks injunctive relief, damages, civil penalties and other equitable
relief. The Company denies the
allegations in the lawsuit and intends to vigorously defend the case.
Other Matters
Systemax is a party to various pending legal proceedings
and disputes arising in the normal course of business, including those
involving commercial, employment, tax and intellectual property related claims,
none of which, in managements opinion, is anticipated to have a material
adverse effect on our condensed consolidated financial statements.
Item 6.
Exhibits
31.1
|
Certification of the Chief
Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
|
31.2
|
Certification of the Chief
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
|
32.1
|
Certification of the Chief
Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
32.2
|
Certification of the Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
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Table of Contents
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
SYSTEMAX INC.
|
|
|
|
|
Date:
May 13, 2010
|
By:
|
/s/
Richard Leeds
|
|
|
|
Richard
Leeds
|
|
Chairman
and Chief Executive Officer
|
|
|
|
|
|
By:
|
/s/
Lawrence P. Reinhold
|
|
|
|
Lawrence P. Reinhold
|
|
Executive
Vice President and Chief Financial Officer
|
19
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