Systemax Inc. (NYSE:SYX) today announced financial
results for the fourth quarter and full year ended December 31,
2010.
Performance
Summary
(U.S. dollars in millions, except per
share data)
Highlights Quarter
EndedDecember 31, Year EndedDecember
31, 2010 2009
2010 2009 Sales
$1,006.2 $938.2 $3,590.0 $3,166.0 Gross Profit
$137.8 $132.9 $495.9
$460.2 Gross Margin 13.7% 14.2%
13.8% 14.5% Operating Income $20.4
$30.6 $68.7 $73.6 Operating Margin
2.0% 3.3% 1.9% 2.3% Diluted
earnings per share $0.34 $0.49
$1.13 $1.24 One-time charges, after tax, per diluted share
$0.02 $0.01 $0.07 $0.13
Fourth Quarter 2010 Financial Highlights:
- Consolidated sales grew 7% to a record
$1.0 billion in U.S. dollars. On a constant currency basis, sales
grew 8%.
- Business to business channel sales grew
12% to $472.3 million in U.S. dollars. On a constant currency
basis, sales grew 15%.
- Consumer channel sales grew 3% to
$533.9 million in U.S. dollars. On a constant currency basis, sales
also grew 3%.
- “Same store” business to business
channel sales grew 15%, while same store consumer channel sales
declined 1%.
- One-time charges were $1.1 million, or
approximately $0.02 per diluted share after tax, for costs related
primarily to the WStore integration.
- Diluted earnings per share (EPS) was
$0.34.
Full Year 2010 Financial Highlights:
- Consolidated sales grew 13% to a record
$3.6 billion in U.S. dollars. On a constant currency basis and
excluding WStore, sales grew 9%.
- Business to business channel sales grew
26% to $1.8 billion in U.S. dollars. On a constant currency basis
and excluding WStore, sales grew 18%.
- Consumer channel sales grew 3% to $1.8
billion in U.S. dollars. On a constant currency basis and excluding
WStore, sales grew 2%.
- One-time charges were $4.3 million or
approximately $0.07 per diluted share after tax, for costs related
primarily to the WStore integration.
- Diluted EPS was $1.13.
Richard Leeds, Chairman and Chief Executive Officer said,
“Overall we are pleased with our top line performance as we
continue to benefit from our diversified multi-channel strategy. We
generated very strong sales within our business-to-business
operations, with double digit increases for both the quarter and
the full year. Consumer channel sales, while up modestly on a
consolidated basis, remain challenged but should improve as the
economy continues to recover and new products are introduced by our
vendors. We are not content with our bottom line performance and it
remains a key focus area for our management team. We are committed
to taking steps to improve margins by driving efficiencies across
our operations. The ramp-up of our new distribution center in
Georgia as well as the completion of the WStore integration should
both contribute in that regard in 2011.”
Gilbert Fiorentino, Chief Executive of Systemax’s Technology
Products Group said, “Our technology products business continues to
benefit from the broad based recovery in the IT cycle. We recorded
solid top line growth across our geographic footprint with double
digit increases in our computer category, led by sales of full
feature laptop computers. We are optimistic that the introduction
of a broader offering of tablet computers and the launch of
expanded wireless offerings in our brick and mortar stores will
drive additional traffic to our websites and stores. We are
executing on a number of initiatives across our distribution
channels and will continue to prudently expand our businesses.”
Supplemental Channel Sales Summary(1) (in
millions) Channel Quarter
Ended
December 31,
Full Year Ended
December 31,
2010 2009
2010 2009 Consumer1,2
$533.9 $517.7 $1,819.8 $1,764.5 Business to
business1,3 $472.3 $420.5
$1,770.2 $1,401.5
Consolidated Sales
$1,006.2 $938.2 $3,590.0 $3,166.0
1 Certain prior year
amounts have been reclassified to conform to current year
presentation 2 Includes sales from retail stores, consumer
websites, inbound call centers and television shopping 3 Includes
sales from managed business relationships, including outbound call
centers and extranets, and the entire Industrial Products and
Corporate segments
Supplemental “Same Store” Channel
Growth1 – Q4 2010 vs Q4 2009 Channel
Change Consumer -1% Business to
business 15%
Consolidated Sales
6%
1
Comprised of revenue at retail stores,
websites and call centers operating for at least 14 full months as
of the beginning of the current comparison period and computed on a
constant currency basis. 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.
Supplemental Product Category Sales Summary (in
millions) Product Category
Quarter Ended
December 31,
Full Year Ended
December 31,
2010
2009(1)
2010
2009(1)
Computers $ 228.5 $ 194.4 $
879.2 $ 721.2 Consumer electronics $
282.5 $ 266.2 $ 856.3 $ 791.8 Computer
components $ 148.5 $ 159.2 $
551.0 $ 550.4 Computer accessories & software
$ 263.6 $ 249.2 $ 982.8 $ 846.9
Industrial products $ 65.4 $ 49.6
$ 250.0 $ 196.1 Other $ 17.7
$ 19.6 $ 70.7 $ 59.6
Consolidated sales
$ 1,006.2 $
938.2 $ 3,590.0 $
3,166.0
1
Certain prior year amounts have been reclassified to conform
to current year presentation
Supplemental Business Unit
Sales Summary (in millions) Business Unit
Quarter Ended
December 31,
Full Year Ended
December 31,
2010 2009
2010 2009 Technology Products
$940.2 $887.5 $3,337.7 $2,966.7
Industrial Products $65.4 $49.6
$ 250.0 $196.1 Corporate and Other $0.6
$1.1 $ 2.3 $3.2
Consolidated sales
$1,006.2 $938.2
$3,590.0 $3,166.0
Working capital grew during the quarter by $21.3 million to
$300.9 million as of December 31, 2010, primarily due to earnings
and proceeds from the issuance of long-term debt associated with
the new distribution center. Cash and cash equivalents grew during
the quarter by $61.6 million to $92.1 million as of December 31,
2010, due to decreased inventory levels, increased days accounts
payable outstanding and other working capital management actions.
As of December 31, 2010, the Company had availability under its
credit facility of approximately $115.9 million and total cash and
available liquidity of approximately $208.0 million. Short and
long-term debt totaled approximately $10.0 million at December 31,
2010.
The Company’s effective tax rate for the quarter was 31.1%,
compared to 37.5% last year. The 2010 effective tax rate was
favorably impacted by the reversal of valuation allowances of
approximately $0.5 million. Excluding this reversal, the effective
tax rate would have been 33.8%. The lower quarterly effective tax
rate was primarily due to a higher mix of taxable income in
countries with lower tax rates. The Company’s effective tax rate
for the full year of 2010 was 35.6% compared to 36.8% last year.
The 2010 and 2009 effective tax rates were favorably impacted by
the reversal of valuation allowances of approximately $0.5 million
and $0.9 million, respectively. Excluding these reversals, the
effective tax rate for 2010 and 2009 would have been 36.3% and
38.0%, respectively. This lower annual effective tax rate was
primarily due to a higher mix of taxable income in countries with
lower tax rates.
Earnings Conference Call Details
Systemax Inc. will host a teleconference to discuss its fourth
quarter and full year 2010 results today, March 15, 2011 at 5:00
p.m. Eastern Time. To access the teleconference, please dial
877-881-2609 (U.S. callers) or 970-315-0463 (Int’l callers) and
reference passcode 45529982 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 March 22, 2011. It can be accessed
by dialing 800-642-1687 (U.S. callers) or 706-645-9291 (Int’l
callers), passcode 45529982. 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 components and 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 Year Ended December
31* December 31* 2010
2009 2010
2009 Net sales $ 1,006,172 $ 938,248 $ 3,589,989 $
3,165,995 Cost of sales 868,380 805,367
3,094,042 2,705,747 Gross profit
137,792 132,881 495,947 460,248 Gross margin 13.7 % 14.2 % 13.8 %
14.5 % Selling, general and administrative expenses 116,312 101,824
422,913 378,869 Reorganization and other charges 1,091
486 4,289 7,750
Operating income 20,389 30,571 68,745 73,629 Operating margin
2.0 % 3.3 % 1.9 % 2.3 % Interest and
other (income) expense, net 1,917 1,133
2,712 544 Income before income taxes
18,472 29,438 66,033 73,085 Provision for income taxes 5,744 11,040
23,482 26,900 Effective tax rate 31.1 % 37.5 %
35.6 % 36.8 % Net income $ 12,728 $ 18,398 $
42,551 $ 46,185 Net margin 1.3 % 2.0 % 1.2 % 1.5 %
Net income per common share: Basic $ 0.34 $ 0.50 $ 1.15 $
1.26 Diluted $ 0.34 $ 0.49 $ 1.13 $ 1.24 Weighted average
common and
common equivalent shares:
Basic 37,178 36,817 36,996 36,706 Diluted 37,699 37,432 37,601
37,343
SYSTEMAX INC.
Condensed Consolidated Balance Sheets (In thousands)
(Unaudited)
December 31*
2010 2009 Current assets: Cash and cash
equivalents $ 92,077 $ 58,309 Accounts receivable, net 276,344
241,860 Inventories 370,375 365,725 Prepaid expenses and other
current assets 26,441 26,692 Total current assets
765,237 692,586 Property, plant and equipment, net 73,765 65,598
Goodwill, intangibles and other assets 55,098 58,717
Total assets $ 894,100 $ 816,901
Current liabilities: Short-term debt $ 2,655 $ 15,197 Accounts
payable and accrued expenses 461,710 426,870 Total
current liabilities 464,365 442,067 Long-term debt 7,386 1,194
Other liabilities 13,081 8,955 Shareholders’ equity 409,268
364,685 Total liabilities and shareholders’ equity $ 894,100
$ 816,901
* 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 year and quarter ended on January
1, 2011. The fourth quarters of both 2010 and 2009 included 13
weeks and the fiscal years both included 52 weeks.
Systemax (NYSE:SYX)
Historical Stock Chart
From Apr 2024 to May 2024
Systemax (NYSE:SYX)
Historical Stock Chart
From May 2023 to May 2024