Systemax Inc. (NYSE: SYX) today announced financial
results for the second quarter and six months ended June 30,
2011.
Performance
Summary
(U.S. dollars in millions, except per
share data)
Highlights Quarter EndedJune 30,
Six Months Ended
June 30,
2011 2010 2011
2010 Sales $872.2 $805.9
$1,802.1 $1,721.1 Gross Profit $128.9 $113.4
$259.4 $238.0 Gross Margin 14.8% 14.1%
14.4% 13.8% Operating Income $21.8
$16.1 $40.5 $36.5 Operating Margin 2.5%
2.0% 2.2% 2.1% Diluted earnings per share
$0.42 $0.25 $0.78 $0.56 Special (gains)
charges, net $(7.1) $0.3 $(6.6) $0.3
Special (gains) charges, net, per diluted share, after tax
$(0.13) $0.01 $(0.12) $0.01
Second Quarter 2011 Financial Highlights:
- Consolidated sales grew 8% to a record
$872.2 million in U.S. dollars. On a constant currency basis, sales
grew 4%.
- Business to business channel sales grew
16% to $482.5 million in U.S. dollars. On a constant currency
basis, sales grew 10%.
- Consumer channel sales were flat at
$389.7 million in U.S. dollars. On a constant currency basis, sales
declined 1%.
- “Same store” business to business sales
grew 7% and same store consumer sales declined 4% on a constant
currency basis.
- The Company recorded special gains, net
of legal and professional fees, of $7.1 million on a pre-tax basis,
or approximately $0.13 per diluted share, after tax, related to the
previously disclosed investigation and settlement with a former
officer and director.
- Diluted earnings per share (EPS) were
$0.42.
Six Months 2011 Financial Highlights:
- Consolidated sales grew 5% to a record
$1.8 billion in U.S. dollars. On a constant currency basis, sales
grew 3%.
- Business to business channel sales grew
12% to $963.0 million in U.S. dollars. On a constant currency
basis, sales grew 8%.
- Consumer channel sales declined 2% to
$839.1 million in U.S. dollars. On a constant currency basis, sales
declined 3%.
- The Company recorded special gains, net
of legal and professional fees, of $6.6 million on a pre-tax basis,
or approximately $0.12 per diluted share after tax, related to the
previously disclosed investigation and settlement with a former
officer and director.
- Diluted earnings per share (EPS) were
$0.78.
Richard Leeds, Chairman and Chief Executive Officer, said, “We
delivered solid top line growth in the quarter. Our business to
business operations continue to perform well and once again led our
performance as customers update their IT infrastructure. In
addition, the Industrial Products group had another outstanding
quarter, delivering 27% revenue growth as we continue to execute on
our growth initiatives in this segment. Consumer channel sales were
flat, reflecting a very competitive consumer technology market,
particularly on the web. However, our retail stores once again
showed solid growth.”
“Our bottom-line remains a key area of focus as we work to
improve our gross and operating margins. Our European Technology
businesses are showing improved margin performance, particularly in
France, as we deliver on the benefits of a fully integrated
operating platform. Our Industrial Products business continues to
demonstrate its ability to leverage its business model. In our
North American technology business our efforts to drive additional
efficiencies from our Georgia distribution center and mitigate the
impact of discounted freight are showing progress but overall
margins in this business remain disappointing. Our senior
management team recently completed an extensive review of our North
American technology business and is implementing a number of
operating changes and best management practices, which we believe
will improve its operating performance. It will be a number of
quarters before the full impact of these efforts are evident but we
are confident that these steps will allow us to better capitalize
on the scale of our technology business. Finally, we recorded
special gains in the quarter related to an investigation and
settlement with a former officer and director of the company.”
Supplemental Channel Sales Summary
(in millions)
Channel Quarter Ended
June 30,
Six Months Ended
June 30,
2011 2010 2011
2010
Business to business1
$482.5 $417.4 $963.0 $862.6
Consumer2
$389.7 $388.5 $839.1 $858.5
Consolidated Sales $872.2 $805.9
$1,802.1 $1,721.1
1
Includes sales from managed business relationships,
including outbound call centers and extranets, and the entire
Industrial Products and Corporate segments
2
Includes sales from retail stores, consumer websites, inbound call
centers and television shopping
Supplemental “Same Store”
Channel Growth1 – Q2 2011 vs. Q2 2010
Channel Change Business to business 7% Consumer -4%
Consolidated Sales 2%
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 EndedJune 30,
Six Months EndedJune 30,
2011 2010 2011 2010
Computer accessories & software $251.0 $224.6
$521.6 $481.3 Computers $243.0 $201.3 $461.7 $428.9
Consumer electronics $170.8 $179.0 $376.4 $384.7
Computer components $106.5 $123.2 $249.0 $270.4
Industrial products $78.8 $62.2 $149.6 $116.8 Other
$22.1 $15.6 $43.8 $39.0
Consolidated sales
$872.2 $805.9 $1,802.1
$1,721.1 Supplemental Business Unit Sales Summary
(in millions)
Business Unit Quarter Ended
June 30,
Six Months Ended
June 30,
2011 2010 2011
2010 Technology Products $792.7 $743.1
$1,651.1 $1,603.2 Industrial Products $78.8
$62.2 $149.6 $116.8 Corporate and Other $0.7
$0.6 $1.4 $1.1
Consolidated sales
$872.2 $805.9 $1,802.1
$1,721.1
Working capital grew by $28.8 million to $329.7 million and cash
and cash equivalents grew by $7.7 million to $99.8 million as of
June 30, 2011. The Company had availability under its credit
facility of approximately $115.8 million and total cash and
available liquidity of approximately $215.6 million as of June 30,
2011. Short and long-term debt totaled approximately $12.1 million
at June 30, 2011.
The Company’s effective tax rate for the first six months of
2011 was 30.5%, compared to 37.3% last year. The lower 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 second
quarter 2011 results today, August 3, 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
86420105 ten minutes prior to the start time. The teleconferencing
will also be available via live webcast on the Company’s website at
www.systemax.com. A replay of the conference call will be available
through August 10, 2011. It can be accessed by dialing 855-859-2056
(U.S. callers) or 404-537-3406 (Int’l callers), passcode 86420105.
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 websites, 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 Six Months Ended June 30*
June 30* 2011 2010 2011 2010 Net
sales $872,222 $805,875 $1,802,089 $1,721,112 Cost of sales 743,279
692,474 1,542,648 1,483,110 Gross profit 128,943 113,401 259,441
238,002 Gross margin 14.8% 14.1% 14.4% 13.8%
Selling, general and
administrativeexpenses
114,265 96,966 225,634 201,154 Special (gains) charges, net (7,150)
343 (6,646) 343 Operating income 21,828 16,092 40,453 36,505
Operating margin 2.5% 2.0% 2.2% 2.1% Interest and other (income)
expense, net (475) 1,074 (1,454) 2,690 Income before income taxes
22,303 15,018 41,907 33,815 Provision for income taxes 6,744 5,568
12,782 12,614 Effective tax rate 30.2% 37.1% 30.5% 37.3% Net income
15,559 $9,450 29,125 $21,201 Net margin 1.8% 1.2% 1.6% 1.2%
Net income per common share: Basic $0.42 $0.26 $0.79 $0.57 Diluted
$0.42 $0.25 $0.78 $0.56
Weighted average common andcommon
equivalent shares:
Basic 36,833 36,967 36,996 36,876 Diluted 37,101 37,726 37,405
37,570
SYSTEMAX INC.
Condensed Consolidated Balance Sheets (In thousands)
(Unaudited) June 30 December 31
2011
2010 Current assets: Cash and cash equivalents $99,792
$92,077 Accounts receivable, net 265,915 276,344 Inventories
358,469 370,375 Prepaid expenses and other current assets 20,702
26,441 Total current assets 744,878 765,237 Property, plant and
equipment, net 73,352 73,765 Goodwill, intangibles and other assets
54,359 55,098 Total assets $872,589 $894,100
Current liabilities: Short-term debt $5,265 $2,655 Accounts payable
and accrued expenses 409,885 461,710 Total current liabilities
415,150 464,365 Long-term debt 6,818 7,386 Other liabilities 14,480
13,081 Shareholders’ equity 436,141 409,268 Total liabilities and
shareholders’ equity $872,589 $894,100 * 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 quarter ended on July 2, 2011. The second quarters of both
2011 and 2010 included 13 weeks. The first six months of both 2011
and 2010 included 26 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