SYX Systemax Inc

Systemax Reports 8.8% Sales Increase PORT WASHINGTON, N.Y., Nov. 11 /PRNewswire-FirstCall/ -- Systemax Inc. , a leading manufacturer and distributor of PC hardware, related computer products and industrial products in North America and Europe, today announced results for the third quarter and nine months ended September 30, 2003. (Logo: http://www.newscom.com/cgi-bin/prnh/20030509/SYXLOGO ) Net sales for the third quarter increased 8.8% to $405.0 million compared to $372.1 million in the year ago quarter. Sales in North America grew 14% as a result of increased sales in the consumer sector. Sales in Europe increased marginally over the prior year. Excluding the impact of a weaker US dollar, European sales for the third quarter decreased 7.8% from the same period a year ago. Operating income increased from $1.6 million last year to $3.6 million (including a $1.3 million reversal in the third quarter of liabilities no longer required as a result of the settlement of litigation). For the quarter, the Company achieved net income of $1.9 million or $.05 per diluted share compared to a net loss of $727,000 or $.02 per diluted share reported in last year's third quarter. For the nine months ended September 30, 2003, net sales increased 6.3% to $1.22 billion compared to $1.15 billion in the year-ago period. Net income for the nine months was $5.1 million or $.15 per diluted share compared to a net loss of $59.9 million or $1.76 per diluted share a year ago. Nine-month results include after tax charges for goodwill impairment of $51 million last year and $2.6 million this year. Richard Leeds, Chairman and Chief Executive Officer, said, "I am encouraged by the growth of our e-commerce business. It is a result of the wealth of information available on our websites, ease of ordering, prompt fulfillment and great prices offered. We will continue to focus on becoming more efficient by reducing our costs and monitoring conditions in all our markets and their sectors." Systemax Inc. (http://www.systemax.com/) has developed an integrated system of branded e-commerce web sites, direct mail catalogs, infomercials and relationship marketers to sell PC hardware, related computer products and industrial products in North America and Europe. Systemax is a Fortune 1000 company. SYSTEMAX INC. Condensed Consolidated Statements of Operations (In thousands, except per share and share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2002 2003 2002 2003 Net Sales $405,011 $372,139 $1,220,270 $1,148,170 Cost of Sales 337,900 309,413 1,017,156 949,657 Gross Profit 67,111 62,726 203,114 198,513 Selling, General and Administrative Expenses 64,822 60,032 190,305 194,440 Restructuring and Other Charges (1,272) 1,110 (1,160) 15,846 Goodwill Impairment 2,560 Income (Loss) From Operations 3,561 1,584 11,409 (11,773) Interest And Other Expense, Net 542 681 1,075 921 Income (Loss) Before Income Taxes 3,019 903 10,334 (12,694) Provision (Benefit) For Income Taxes 1,112 1,630 5,256 (3,725) Income (Loss) Before Cumulative Effect of Change in Accounting Principle, net of tax 1,907 (727) 5,078 (8,969) Cumulative Effect of Change in Accounting Principle, net of tax (50,971) Net Income (Loss) $1,907 $(727) $5,078 $(59,940) Net Income (Loss) Per Common Share, Basic: Income (Loss) Before Cumulative Effect of Change in Accounting Principle, net of tax $.06 $(.02) $.15 $(.26) Cumulative Effect of Change in Accounting Principle, net of tax (1.50) Net Income (Loss) $.06 $(.02) $.15 $(1.76) Net Income (Loss) Per Common Share, Diluted: Income (Loss) Before Cumulative Effect of Change in Accounting Principle, net of tax $.05 $(.02) $.15 $(.26) Cumulative Effect of Change in Accounting Principle, net of tax (1.50) Net Income (Loss) $.05 $(.02) $.15 $(1.76) Weighted Average Common And Common Equivalent Shares: Basic 34,158,754 34,104,290 34,123,931 34,104,290 Diluted 35,127,597 34,104,290 34,671,742 34,104,290 SYSTEMAX INC. Condensed Consolidated Balance Sheet (In thousands) As of September 30, 2003 ASSETS Current Assets: Cash and cash equivalents $45,481 Accounts receivable, net 150,515 Inventories 111,154 Prepaid expenses and other current assets 40,139 Total Current Assets 347,289 Property, plant and equipment, net 68,729 Other assets 15,712 TOTAL $431,730 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Amounts due banks $15,730 Accounts payable and accrued expenses 184,425 Total Current Liabilities 200,155 Long-term debt 17,899 Other liabilities 2,125 Shareholders' equity 211,551 TOTAL $431,730 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 the Forward Looking Statements section contained in Item 7 of the Company's Form 10-K for a more detailed explanation of the inherent limitations in such forward-looking statements. http://www.newscom.com/cgi-bin/prnh/20030509/SYXLOGODATASOURCE: Systemax Inc. CONTACT: Steven M. Goldschein, +1-516-608-7000, for Systemax Web site: http://www.systemax.com/

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