PORT WASHINGTON, N.Y.,
Feb. 27, 2018 /PRNewswire/
-- Systemax Inc. (NYSE: SYX) today announced financial
results for the fourth quarter ended December 31, 2017.
Performance
Summary*
(U.S. dollars in
millions, except per share data)
|
Highlights
|
Quarter Ended
December 31,
|
Year
Ended
December
31,
|
GAAP
Results**
|
2017
|
2016
|
2017
|
2016
|
Net sales
|
$
|
330.6
|
|
$
|
295.6
|
|
$
|
1,265.4
|
|
$
|
1,170.3
|
|
Gross
profit
|
$
|
88.5
|
|
$
|
78.3
|
|
$
|
351.4
|
|
$
|
307.9
|
|
Gross
margin***
|
26.8
|
%
|
26.5
|
%
|
27.8
|
%
|
26.3
|
%
|
Operating
income
|
$
|
19.2
|
|
$
|
16.1
|
|
$
|
71.3
|
|
$
|
27.7
|
|
Operating
margin
|
5.8
|
%
|
5.4
|
%
|
5.6
|
%
|
2.4
|
%
|
Net income from
continuing operations
|
$
|
32.4
|
|
$
|
11.5
|
|
$
|
76.1
|
|
$
|
16.9
|
|
Net income per
diluted share from continuing operations
|
$
|
0.85
|
|
$
|
0.31
|
|
$
|
2.02
|
|
$
|
0.45
|
|
Net income (loss)
from discontinued operations
|
$
|
1.4
|
|
$
|
(13.6)
|
|
$
|
(35.7)
|
|
$
|
(49.5)
|
|
Net income (loss) per
diluted share from discontinued operations
|
$
|
0.04
|
|
$
|
(0.37)
|
|
$
|
(0.96)
|
|
$
|
(1.33)
|
|
Non-GAAP
Results**
|
|
|
|
|
Net sales
|
$
|
330.6
|
|
$
|
294.8
|
|
$
|
1,265.4
|
|
$
|
1,132.8
|
|
Gross
profit
|
$
|
88.5
|
|
$
|
77.7
|
|
$
|
351.4
|
|
$
|
303.0
|
|
Gross
margin***
|
26.8
|
%
|
26.4
|
%
|
27.8
|
%
|
26.7
|
%
|
Operating
income
|
$
|
20.0
|
|
$
|
13.7
|
|
$
|
75.1
|
|
$
|
35.9
|
|
Operating
margin
|
6.0
|
%
|
4.6
|
%
|
5.9
|
%
|
3.2
|
%
|
Net income from
continuing operations
|
$
|
12.9
|
|
$
|
8.7
|
|
$
|
48.7
|
|
$
|
22.4
|
|
Net income per
diluted share from continuing operations
|
$
|
0.34
|
|
$
|
0.23
|
|
$
|
1.30
|
|
$
|
0.60
|
|
Net income (loss)
from discontinued operations
|
$
|
2.2
|
|
$
|
(10.8)
|
|
$
|
(35.9)
|
|
$
|
(55.7)
|
|
Net income (loss) per
diluted share from discontinued operations
|
$
|
0.06
|
|
$
|
(0.29)
|
|
$
|
(0.95)
|
|
$
|
(1.50)
|
|
GAAP Fourth Quarter 2017 Financial Summary:
- Consolidated sales increased 11.8% to $330.6 million in U.S. dollars. On a constant
currency basis, average daily sales increased 8.7%.
- Industrial Products Group ("IPG") sales grew 10.6% to
$194.5 million in U.S. dollars. On a
constant currency basis, average daily sales increased 10.4%.
- European Technology Products Group ("ETG"), comprising
France and the divested German
business, sales increased 14.4% to $136.1
million in U.S. dollars. On a constant currency basis,
average daily sales increased 6.0%.
- Consolidated operating income grew 19.3% to $19.2 million.
- Net income per diluted share from continuing operations grew to
$0.85. The net tax benefit from
continuing operations for the quarter includes tax expense on
pretax income, provisional repatriation tax under U.S. tax reform
and tax expense related to the remeasurement of U.S. deferred tax
assets resulting from the rate change under U.S. tax reform.
These expenses were offset primarily by the utilization of net
operating losses and the reversal in the U.S. of valuation
allowances against the Company's federal and certain state deferred
tax assets.
Non-GAAP Fourth Quarter 2017 Continuing Operations Financial
Summary:
- Consolidated sales (comprising IPG and France) increased 12.1% to $330.6 million in U.S. dollars. On a constant
currency basis, average daily sales increased 8.7%.
- IPG sales increased 10.6% to $194.5
million in U.S. dollars. On a constant currency basis,
average daily sales increased 10.4%.
- France sales increased 14.4%
to $136.1 million in U.S. dollars. On
a constant currency basis, average daily sales increased 6.0%.
- Consolidated operating income grew 46.0% to $20.0 million.
- Net income per diluted share from continuing operations grew to
$0.34.
GAAP Full Year 2017 Financial Summary:
- Consolidated sales increased 8.1% to $1,265.4 million in U.S. dollars. On a constant
currency basis, average daily sales increased 8.2%.
- IPG sales increased 10.6% to $791.8
million in U.S. dollars. On a constant currency basis,
average daily sales increased 11.0%.
- ETG sales increased 5.0% to $473.6
million in U.S. dollars. On a constant currency basis,
average daily sales increased 3.8%.
- Consolidated operating income grew 157.4% to $71.3 million.
- Net income per diluted share from continuing operations grew to
$2.02. The Company recorded tax
benefits from continuing operations in the fourth quarter and full
year of 2017 of $13.7 million and
$5.3 million, respectively. The net
tax benefit from continuing operations for the full year includes
tax expense on pretax income of approximately $30.5 million, provisional repatriation tax
under U.S. tax reform of $5.2 million
and tax expense related to the remeasurement of U.S. deferred tax
assets resulting from the rate change under U.S. tax reform of
$10.3 million. These expenses were
offset primarily by the utilization of net operating losses and the
reversal in the U.S. of valuation allowances against the Company's
federal and certain state deferred tax assets. These offsets
totaled approximately $51.3 million.
Non-GAAP Full Year 2017 Continuing Operations Financial
Summary:
- Consolidated sales (comprising IPG and France) increased 11.7% to $1,265.4 million in U.S. dollars. On a constant
currency basis, average daily sales increased 11.4%.
- IPG sales increased 10.6% to $791.8
million in U.S. dollars. On a constant currency basis,
average daily sales increased 11.0%.
- France sales increased 13.5%
to $473.6 million in U.S. dollars. On
a constant currency basis, average daily sales increased
12.2%.
- Consolidated operating income grew 109.2% to $75.1 million.
- Net income per diluted share from continuing operations grew to
$1.30.
Larry Reinhold, Chief Executive
Officer, said, "2017 was an exceptional year for Systemax as we
streamlined our operations, executed on our growth and optimization
initiatives, and delivered strong financial performance. Our
continuing operations generated more than $1.2 billion in combined revenue, representing
organic growth of 12%, and more than doubled operating income to
$75 million, on a Non-GAAP
basis. Industrial had a record year with almost $800 million in revenue, an increase of 11% on a
constant currency average daily sales basis. Industrial also
made significant margin improvement as we delivered operating
leverage across the business, which resulted in a 101% increase in
operating income for the full year. Within the quarter, IPG also
grew its revenue nearly 11% while improving operating margin 200
basis points compared to last year's fourth quarter. In
France, 2017 revenue increased 12%
on a constant currency average daily sales basis, marking the
fourth consecutive year of double digit organic top line
improvement, and we continued to show strong profitability.
In the fourth quarter, France grew
its revenue 6% on a constant currency average daily sales basis,
and delivered its highest gross and operating margin performance of
the year at 17% and nearly 6% respectively."
"As we enter the new year our Industrial and France businesses remain well positioned for
top and bottom line growth. Our efforts to broaden customer
relationships, enhance the value we provide, and improve
productivity are ongoing. With a solid balance sheet and
growing cash flow generation we continue to return capital to
shareholders through dividend distributions, while maintaining a
healthy cash position to explore strategic acquisitions that can
enhance our organic growth."
At December 31, 2017, the Company
had total working capital of $178.3
million, cash and cash equivalents of $184.5 million and excess availability under its
credit facility of approximately $70.0
million. The cash balance at year end does not reflect
the payment of the $1.50 Special
Dividend, declared in December 2017,
but paid in January 2018. The Company has significant
flexibility to return capital to shareholders, execute on its
business plans, invest in strategic M&A, and continue investing
in growth opportunities. The Company recorded tax benefits from
continuing operations in the fourth quarter and full year of
2017 of $13.7 million and
$5.3 million, respectively. The net
tax benefit from continuing operations for the full year includes
tax expense on pretax income of approximately $30.5 million, provisional
repatriation tax under U.S. tax reform of $5.2 million and tax expense related to the
remeasurement of U.S. deferred tax assets resulting from the rate
change under U.S. tax reform of $10.3
million. These expenses were offset primarily by the
utilization of net operating losses and the reversal in the U.S. of
valuation allowances against the Company's federal and certain
state deferred tax assets. These offsets totaled approximately
$51.3 million.
The Company's board of directors has declared a cash dividend of
$0.11 per share to common stock
shareholders of record at the close of business on March 9, 2018, payable on March 16, 2018. The Company anticipates
continuing a regular quarterly dividend in the future.
Earnings Conference Call Details
Systemax Inc.
will provide pre-recorded remarks on its fourth quarter 2017
results today, February 27, 2018 at
5:00 p.m. Eastern Time. A live
webcast of the remarks will be available on the Company's website
at www.systemax.com in the investor relations section. The
webcast will also be archived on www.systemax.com for
approximately 90 days.
About Systemax Inc.
Systemax Inc.
(www.systemax.com), through its operating subsidiaries, is a
provider of industrial products in North
America and technology products in France, going to market through a system of
branded e-Commerce websites and relationship
marketers. The primary brands are Global Industrial and
Inmac Wstore.
Forward-Looking Statements
This press
release 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 press release 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, and 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. Forward looking statements may include,
but are not limited to, projections or estimates of revenue, income
or loss, exit costs, cash flow needs and capital expenditures,
statements regarding future operations, expansion or restructuring
plans, including our exit from and winding down of our NATG and
European operations, financing needs, compliance with financial
covenants in loan agreements, 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 release, the words "anticipates," "believes,"
"estimates," "expects," "intends," and "plans" and variations
thereof and similar expressions are intended to identify forward
looking statements.
Other factors that may affect our future results of
operations and financial condition include, but are not limited to,
unanticipated developments in any one or more of the following
areas, as well as other factors which may be detailed from time to
time in our Securities and Exchange Commission filings: risks
involved with e-commerce, including possible loss of business and
customer dissatisfaction if outages or other computer-related
problems should preclude customer access to our products and
services; the Company's management information systems and other
technology platforms supporting our sales, procurement and other
operations are critical to our operations and disruptions or delays
have occurred and could occur in the future, and if not timely
addressed would have a material adverse effect on us; we could
suffer a data security breach due to our e-commerce and data
storage systems being hacked by those seeking to steal Company
information and customer personal information, or due to employee
error, resulting in disruption to our operations, loss of
information and privacy, legal claims and adverse material impact
on our business; general economic conditions, will continue to
impact our business; extreme weather conditions could disrupt our
product supply chain and our ability to ship or receive products,
which would adversely impact sales; our international operations
are subject to risks such as fluctuations in currency rates,
foreign regulatory requirements, and political uncertainty; and
managing various inventory risks, such as being unable to
profitably resell excess or obsolete inventory and/or the loss of
product return rights and price protection from our
vendors.
Investor/Media Contacts:
Mike
Smargiassi
The Plunkett Group
212-739-6740
mike@theplunkettgroup.com
* 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 quarters ended
on December 30, 2017 and December 31, 2016. The fourth quarters of 2017
and 2016 included 13 weeks and the twelve months of 2017 and 2016
included 52 weeks.
** On December 1, 2015 the
Company closed on the sale of certain assets of its North American
Technology Group ("NATG"). Pursuant to this transaction, the
Company continues to wind down the remaining operations of NATG
during 2017. In the GAAP presentation, the retail
operations which were discontinued by the Company prior to the
transaction, along with allocations of common distribution and back
office costs, are presented as part of the Company's continuing
operations for all periods; other NATG operations that were sold
(as well as the remaining retail operations that existed at the
time of the transaction (and were subsequently discontinued by the
Company) are presented as discontinued operations for all
periods. The non-GAAP results reflect the entire NATG segment
as a discontinued operation for all periods presented as well as
adjustments for non-recurring items, intangible amortization,
equity compensation and a normalized effective tax rate in
recurring operations. On September 2,
2016, the Company closed on the sale of certain assets of
its Misco Germany operation which has been reported as part of its
European Technology Products Group. Prior and current year results
of Germany have been eliminated in
the non-GAAP presentation. On December
31, 2016, the Company closed on the sale of its Afligo
rebate processing business. Prior and current year results of
the rebate processing business have been eliminated in the non-GAAP
presentation. On March 24,
2017, the Company closed on the sale of its European
Technology Group businesses, other than its operations in
France. The Company recorded tax benefits from continuing
operations in the fourth quarter and full year of 2017 of
$13.7 million and $5.3 million, respectively. The net tax benefit
from continuing operations for the full year includes tax expense
on pretax income of approximately $30.5 million, provisional repatriation tax
under U.S. tax reform of $5.2 million
and tax expense related to the remeasurement of U.S. deferred tax
assets resulting from the rate change under U.S. tax reform of
$10.3 million. These expenses were
offset primarily by the utilization of net operating losses and the
reversal in the U.S. of valuation allowances against the Company's
federal and certain state deferred tax assets. These offsets
totaled approximately $51.3
million. Prior and current year results of these divested
businesses, along with the associated loss on the sale, have been
classified as discontinued operations in both the GAAP and non-GAAP
presentation. The Company believes that the non-GAAP presentation
conveys additional more meaningful information to investors. See
accompanying GAAP reconciliation tables.
*** During Q2 2017, the Company decided to amend its
presentation of certain costs associated with operating our
Distribution Centers as well as costs associated with our
Purchasing and Product Development Teams. Historically these
costs have been included as a component of costs of goods
sold. We are now including those costs as a component
of Selling, Distribution, and Administrative Expenses.
This change is reflected in current and prior year periods and is
not a restatement of any amounts, rather, an amendment to the
presentation of these costs to better align with the Company's
MRO-oriented peer group in North
America.
Condensed
Consolidated Statements of Operations - Unaudited
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
Quarter
Ended
December
31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
$
|
330.6
|
|
|
$
|
295.6
|
|
|
$
|
1,265.4
|
|
|
$
|
1,170.3
|
|
Cost of
sales
|
242.1
|
|
|
217.3
|
|
|
914.0
|
|
|
862.4
|
|
Gross
profit
|
88.5
|
|
|
78.3
|
|
|
351.4
|
|
|
307.9
|
|
Gross
margin
|
26.8
|
%
|
|
26.5
|
%
|
|
27.8
|
%
|
|
26.3
|
%
|
Selling, distribution
and administrative expenses
|
69.3
|
|
|
61.9
|
|
|
279.8
|
|
|
276.3
|
|
Special
charges
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
3.9
|
|
Operating income from
continuing operations
|
19.2
|
|
|
16.1
|
|
|
71.3
|
|
|
27.7
|
|
Operating
margin
|
5.8
|
%
|
|
5.4
|
%
|
|
5.6
|
%
|
|
2.4
|
%
|
Interest and other
(income) expense, net
|
0.5
|
|
|
0.3
|
|
|
0.5
|
|
|
1.6
|
|
Income from
continuing operations before income taxes
|
18.7
|
|
|
15.8
|
|
|
70.8
|
|
|
26.1
|
|
(Benefit) provision
for income taxes
|
(13.7)
|
|
|
4.3
|
|
|
(5.3)
|
|
|
9.2
|
|
Net income from
continuing operations
|
32.4
|
|
|
11.5
|
|
|
76.1
|
|
|
16.9
|
|
Net income (loss)
from discontinued operations
|
1.4
|
|
|
(13.6)
|
|
|
(35.7)
|
|
|
(49.5)
|
|
Net income
(loss)
|
$
|
33.8
|
|
|
$
|
(2.1)
|
|
|
$
|
40.4
|
|
|
$
|
(32.6)
|
|
Net income per common
share from continuing operations:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.87
|
|
|
$
|
0.31
|
|
|
$
|
2.06
|
|
|
$
|
0.45
|
|
Diluted
|
$
|
0.85
|
|
|
$
|
0.31
|
|
|
$
|
2.02
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share from discontinued
operations:
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
0.04
|
|
|
$
|
(0.37)
|
|
|
$
|
(0.96)
|
|
|
$
|
(1.33)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common and common equivalent shares:
|
|
|
|
|
|
|
|
Basic
|
37.1
|
|
|
37.2
|
|
|
37.0
|
|
|
37.2
|
|
Diluted
|
37.9
|
|
|
37.2
|
|
|
37.6
|
|
|
37.2
|
|
SYSTEMAX
INC.
|
Condensed
Consolidated Balance Sheets - Unaudited
|
(In
millions)
|
|
|
December
31,
|
|
December
31,
|
|
2017*
|
|
2016*
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
184.5
|
|
|
$
|
149.7
|
|
Accounts receivable,
net
|
174.3
|
|
|
148.6
|
|
Inventories
|
131.5
|
|
|
116.7
|
|
Prepaid expenses and
other current assets
|
3.8
|
|
|
3.9
|
|
Current assets of
discontinued operations
|
—
|
|
|
92.3
|
|
Total current
assets
|
494.1
|
|
|
511.2
|
|
Property, plant and
equipment, net
|
15.1
|
|
|
16.4
|
|
Goodwill, intangibles
and other assets
|
42.2
|
|
|
21.4
|
|
Long term assets of
discontinued operations
|
—
|
|
|
17.1
|
|
Total
assets
|
$
|
551.4
|
|
|
$
|
566.1
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
260.1
|
|
|
230.5
|
|
Dividend
payable
|
55.7
|
|
|
—
|
|
Current liabilities
of discontinued operations
|
—
|
|
|
94.5
|
|
Total current
liabilities
|
315.8
|
|
|
325.0
|
|
Deferred tax
liability
|
0.1
|
|
|
0.3
|
|
Other
liabilities
|
23.7
|
|
|
24.3
|
|
Long term liabilities
of discontinued operations
|
—
|
|
|
2.1
|
|
Shareholders'
equity
|
211.8
|
|
|
214.4
|
|
Total liabilities and
shareholders' equity
|
$
|
551.4
|
|
|
$
|
566.1
|
|
|
* 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
December 30, 2017 and December 31, 2016.
The fourth quarters of 2017 and 2016 included 13 weeks
and the twelve months of 2017 and
2016 included 52 weeks.
|
Supplemental
Non-GAAP Continuing Operations
Business Unit
Summary Results - Unaudited (In millions)
|
Industrial
Products Group
|
|
Quarter Ended
December 31,
|
Year Ended
December 31,
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
Sales
|
$
|
194.5
|
|
$
|
175.8
|
|
10.6
|
%
|
$
|
791.8
|
|
$
|
715.6
|
|
10.6
|
%
|
Average daily
sales*
|
$
|
3.1
|
|
$
|
2.8
|
|
10.6
|
%
|
$
|
3.1
|
|
$
|
2.8
|
|
11.1
|
%
|
Gross
profit
|
$
|
65.3
|
|
$
|
57.6
|
|
13.4
|
%
|
$
|
273.2
|
|
$
|
233.3
|
|
17.1
|
%
|
Gross
margin
|
33.6
|
%
|
32.8
|
%
|
|
34.5
|
%
|
32.6
|
%
|
|
Operating
income
|
$
|
14.7
|
|
$
|
9.8
|
|
50.0
|
%
|
$
|
70.9
|
|
$
|
35.2
|
|
101.4
|
%
|
Operating
margin
|
7.6
|
%
|
5.6
|
%
|
|
9.0
|
%
|
4.9
|
%
|
|
European
Technology Products Group (France)
|
|
Quarter Ended
December 31,
|
Year Ended
December 31,
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
Sales
|
$
|
136.1
|
|
$
|
119.0
|
|
14.4
|
%
|
$
|
473.6
|
|
$
|
417.2
|
|
13.5
|
%
|
Average daily
sales*
|
$
|
2.2
|
|
$
|
1.9
|
|
14.4
|
%
|
$
|
1.9
|
|
$
|
1.6
|
|
14.4
|
%
|
Gross
profit
|
$
|
23.2
|
|
$
|
20.1
|
|
15.4
|
%
|
$
|
78.2
|
|
$
|
69.7
|
|
12.2
|
%
|
Gross
margin
|
17.0
|
%
|
16.9
|
%
|
|
16.5
|
%
|
16.7
|
%
|
|
Operating
income
|
$
|
7.9
|
|
$
|
7.8
|
|
1.3
|
%
|
$
|
25.1
|
|
$
|
19.6
|
|
28.1
|
%
|
Operating
margin
|
5.8
|
%
|
6.6
|
%
|
|
5.3
|
%
|
4.7
|
%
|
|
Corporate &
Other
|
|
Quarter Ended
December 31,
|
Year Ended
December 31,
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
Operating
expenses
|
$
|
(2.6)
|
|
$
|
(3.9)
|
|
33.3
|
%
|
$
|
(20.9)
|
|
$
|
(18.9)
|
|
(10.6)%
|
|
Consolidated
(1,2)
|
|
Quarter Ended
December 31,
|
Year Ended
December 31,
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
Sales
|
$
|
330.6
|
|
$
|
294.8
|
|
12.1
|
%
|
$
|
1,265.4
|
|
$
|
1,132.8
|
|
11.7
|
%
|
Gross
profit
|
$
|
88.5
|
|
$
|
77.7
|
|
13.9
|
%
|
$
|
351.4
|
|
$
|
303.0
|
|
16.0
|
%
|
Gross
margin
|
26.8
|
%
|
26.4
|
%
|
|
27.8
|
%
|
26.7
|
%
|
|
Operating
income
|
$
|
20.0
|
|
$
|
13.7
|
|
46.0
|
%
|
$
|
75.1
|
|
$
|
35.9
|
|
109.2
|
%
|
Operating
margin
|
6.0
|
%
|
4.6
|
%
|
|
5.9
|
%
|
3.2
|
%
|
|
|
|
* Percentages are calculated using sales data in
hundreds of thousands. In Q4 2017 IPG and France had 62 and
63 selling days respectively,
and for the twelve months of 2017 IPG and
France had 253 and 251 selling days, respectively. In Q4
2016, IPG and France had 62 and 63
selling days respectively, and for the
twelve months of 2016 IPG and France had 254 and 253 selling
days, respectively.
|
|
|
1 On December 1, 2015 the Company closed on the sale
of certain assets of its North American Technology Group
("NATG"). Pursuant to this
transaction, the Company continues
to wind down the remaining operations of NATG during 2017. In
the GAAP presentation, the retail
operations which were discontinued
by the Company prior to the transaction, along with allocations of
common distribution and back office
costs, are presented as part of the
Company's continuing operations for all periods; other NATG
operations that were sold (as well as the
remaining retail operations that
existed at the time of the transaction (and were subsequently
discontinued by the Company) are presented as
discontinued operations for all
periods. The non-GAAP results reflect the entire NATG segment
as a discontinued operation for all periods
presented as well as adjustments for
non-recurring items, intangible amortization, equity compensation
and a normalized effective tax rate in
recurring operations. On
September 2, 2016, the Company closed on the sale of certain assets
of its Misco Germany operation which has been
reported as part of its European
Technology Products Group. Prior and current year results of
Germany have been eliminated in the non-GAAP
presentation. On December 31,
2016, the Company closed on the sale of its Afligo rebate
processing business. Prior and current year results of
the rebate processing business have
been eliminated in the non-GAAP presentation. The Company
believes that the non-GAAP presentation
conveys additional more meaningful
information to investors. On March 24, 2017, the Company
closed on the sale of its European Technology
Group businesses, other than its
operations in France. Prior and current year results of these
divested businesses, along with the associated loss
on the sale, have been classified as
discontinued operations in both the GAAP and non-GAAP presentation.
See accompanying GAAP
reconciliation tables. The Company
recorded tax benefits from continuing operations in the fourth
quarter and full year of 2017 of $13.7 million and
$5.3 million, respectively. The net
tax benefit from continuing operations for the full year includes
tax expense on pretax income of approximately
$30.5 million, provisional repatriation tax
under U.S. tax reform of $5.2 million and tax expense related to
the remeasurement of U.S. deferred tax
assets resulting from the rate
change under U.S. tax reform of $10.3 million. These expenses were
offset primarily by the utilization of net operating
losses and the reversal in the U.S.
of valuation allowances against the Company's federal and certain
state deferred tax assets. These offsets
totaled approximately $51.3
million.
|
|
|
2 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 December 30,
2017 and December 31, 2016. The fourth quarters of 2017 and 2016
included 13 weeks and the twelve months of
2017 and 2016 included 52
weeks.
|
SYSTEMAX
INC.
|
Reconciliation of
Segment and Consolidated GAAP Net Sales from Continuing Operations
to Segment and Consolidated Non-GAAP Net Sales from Continuing
Operations – Unaudited
|
(In
millions)
|
|
|
Quarter
Ended
December
31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Industrial
Products
|
$
|
194.5
|
|
|
$
|
175.8
|
|
|
$
|
791.8
|
|
|
$
|
715.6
|
|
Technology Products -
Europe
|
136.1
|
|
|
119.0
|
|
|
473.6
|
|
|
451.1
|
|
Corporate and
Other
|
—
|
|
|
0.8
|
|
|
—
|
|
|
3.6
|
|
GAAP Net
Sales
|
330.6
|
|
|
295.6
|
|
|
1,265.4
|
|
|
1,170.3
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Technology
Products - Europe:
|
|
|
|
|
|
|
|
Reverse results of
Germany included in GAAP Net Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.9)
|
|
Total Non-GAAP
Adjustments: Technology Products Europe
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.9)
|
|
|
|
|
|
|
|
|
|
Corporate and
Other:
|
|
|
|
|
|
|
|
Reverse results of
Afligo included in GAAP Net Sales
|
—
|
|
|
(0.8)
|
|
|
—
|
|
|
(3.6)
|
|
Total Non-GAAP
Adjustments: Corporate and Other
|
—
|
|
|
(0.8)
|
|
|
—
|
|
|
(3.6)
|
|
|
|
|
|
|
|
|
|
Industrial
Products
|
194.5
|
|
|
175.8
|
|
|
791.8
|
|
|
715.6
|
|
Technology Products-
France
|
136.1
|
|
|
119.0
|
|
|
473.6
|
|
|
417.2
|
|
Corporate and
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-GAAP Net
Sales
|
$
|
330.6
|
|
|
$
|
294.8
|
|
|
$
|
1,265.4
|
|
|
$
|
1,132.8
|
|
SYSTEMAX
INC.
|
Reconciliation of
Segment and Consolidated GAAP Gross Profit from Continuing
Operations to Segment and Consolidated Non-GAAP Gross Profit from
Continuing Operations – Unaudited
|
(In
millions)
|
|
|
Quarter
Ended
December
31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Industrial
Products
|
$
|
65.3
|
|
|
$
|
57.6
|
|
|
$
|
273.2
|
|
|
$
|
233.3
|
|
Technology Products -
Europe
|
23.2
|
|
|
20.5
|
|
|
78.2
|
|
|
73.0
|
|
Corporate and
Other
|
—
|
|
|
0.2
|
|
|
—
|
|
|
1.6
|
|
GAAP Gross
Profit
|
88.5
|
|
|
78.3
|
|
|
351.4
|
|
|
307.9
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Technology
Products - Europe:
|
|
|
|
|
|
|
|
Reverse results of
Germany included in GAAP Gross Profit
|
—
|
|
|
(0.4)
|
|
|
—
|
|
|
(3.3)
|
|
Total Non-GAAP
Adjustments: Technology Products Europe
|
—
|
|
|
(0.4)
|
|
|
—
|
|
|
(3.3)
|
|
|
|
|
|
|
|
|
|
Corporate and
Other:
|
|
|
|
|
|
|
|
Reverse results of
Afligo included in GAAP Gross Profit
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
(1.6)
|
|
Total Non-GAAP
Adjustments: Corporate and Other
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
(1.6)
|
|
|
|
|
|
|
|
|
|
Industrial
Products
|
65.3
|
|
|
57.6
|
|
|
273.2
|
|
|
233.3
|
|
Technology Products-
France
|
23.2
|
|
|
20.1
|
|
|
78.2
|
|
|
69.7
|
|
Corporate and
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-GAAP Gross
Profit
|
$
|
88.5
|
|
|
$
|
77.7
|
|
|
$
|
351.4
|
|
|
$
|
303.0
|
|
SYSTEMAX
INC.
|
Reconciliation of
Segment and Consolidated GAAP Operating Income (Loss) from
Continuing Operations to Segment and Consolidated Non-GAAP
Operating Income (Loss) from Continuing Operations –
Unaudited
|
(In
millions)
|
|
|
Quarter
Ended
December
31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Industrial
Products
|
$
|
14.4
|
|
|
$
|
9.5
|
|
|
$
|
69.6
|
|
|
$
|
34.3
|
|
Technology Products -
Europe
|
7.7
|
|
|
7.8
|
|
|
24.5
|
|
|
14.5
|
|
Technology Products -
NA
|
0.1
|
|
|
(0.4)
|
|
|
(0.6)
|
|
|
(2.8)
|
|
Corporate and
Other
|
(3.0)
|
|
|
(0.8)
|
|
|
(22.2)
|
|
|
(18.3)
|
|
GAAP operating
income
|
19.2
|
|
|
16.1
|
|
|
71.3
|
|
|
27.7
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Industrial
Products:
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
0.2
|
|
|
0.2
|
|
|
1.0
|
|
|
0.5
|
|
Stock based and other
special compensation
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
0.4
|
|
Total Non-GAAP
Adjustments – Industrial Products
|
0.3
|
|
|
0.3
|
|
|
1.3
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
Technology
Products - Europe:
|
|
|
|
|
|
|
|
Reverse results of
Germany included in GAAP continuing operations
|
0.2
|
|
|
(0.1)
|
|
|
0.5
|
|
|
4.7
|
|
Intangible asset
amortization
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
0.4
|
|
Total Non-GAAP
Adjustments: Technology Products Europe
|
0.2
|
|
|
—
|
|
|
0.6
|
|
|
5.1
|
|
|
|
|
|
|
|
|
|
Technology
Products - NA:
|
|
|
|
|
|
|
|
Reverse results of
NATG included in GAAP continuing
operations
|
(0.1)
|
|
|
0.4
|
|
|
0.6
|
|
|
2.8
|
|
Total Non-GAAP
Adjustments: Technology Products NA
|
(0.1)
|
|
|
0.4
|
|
|
0.6
|
|
|
2.8
|
|
|
|
|
|
|
|
|
|
Corporate and
Other:
|
|
|
|
|
|
|
|
Reverse results of
Afligo included in GAAP continuing operations
|
—
|
|
|
0.5
|
|
|
—
|
|
|
2.2
|
|
Gain on sale of
Afligo
|
—
|
|
|
(3.9)
|
|
|
—
|
|
|
(3.9)
|
|
Stock based
compensation
|
0.4
|
|
|
0.3
|
|
|
1.3
|
|
|
1.1
|
|
Total Non-GAAP
Adjustments: Corporate and Other
|
0.4
|
|
|
(3.1)
|
|
|
1.3
|
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
Industrial
Products
|
14.7
|
|
|
9.8
|
|
|
70.9
|
|
|
35.2
|
|
Technology Products-
France
|
7.9
|
|
|
7.8
|
|
|
25.1
|
|
|
19.6
|
|
Technology Products-
NA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Corporate and
Other
|
(2.6)
|
|
|
(3.9)
|
|
|
(20.9)
|
|
|
(18.9)
|
|
Non-GAAP operating
income
|
$
|
20.0
|
|
|
$
|
13.7
|
|
|
$
|
75.1
|
|
|
$
|
35.9
|
|
SYSTEMAX
INC.
|
Reconciliation of
GAAP Net Income (Loss) from Continuing Operations to
Non-GAAP
|
Net Income (Loss)
from Continuing Operations – Unaudited
|
(In
millions)
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
$
|
32.4
|
|
|
$
|
11.5
|
|
|
$
|
76.1
|
|
|
$
|
16.9
|
|
Provision for income
taxes from continuing operations
|
(13.7)
|
|
|
4.3
|
|
|
(5.3)
|
|
|
9.2
|
|
Income from
continuing operations before income taxes
|
18.7
|
|
|
15.8
|
|
|
70.8
|
|
|
26.1
|
|
Interest and other
(income) expense from continuing operations,
net
|
0.5
|
|
|
0.3
|
|
|
0.5
|
|
|
1.6
|
|
Operating income from
continuing operations
|
19.2
|
|
|
16.1
|
|
|
71.3
|
|
|
27.7
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Reverse results of
NATG, Germany and Afligo included in GAAP
operating income from continuing operations
|
0.1
|
|
|
0.8
|
|
|
1.1
|
|
|
9.7
|
|
Gain on sale of
Afligo
|
—
|
|
|
(3.9)
|
|
|
—
|
|
|
(3.9)
|
|
Recurring
adjustments
|
0.7
|
|
|
0.7
|
|
|
2.7
|
|
|
2.4
|
|
Adjusted operating
income
|
20.0
|
|
|
13.7
|
|
|
75.1
|
|
|
35.9
|
|
Interest and other
expense (income), net
|
0.5
|
|
|
0.3
|
|
|
0.5
|
|
|
1.6
|
|
Reverse results of
NATG, Germany and Afligo included in GAAP interest and other
expenses (income), net
|
(0.3)
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.1)
|
|
Income before income
taxes
|
19.8
|
|
|
13.4
|
|
|
74.9
|
|
|
34.4
|
|
Normalized provision
for income taxes
|
6.9
|
|
|
4.7
|
|
|
26.2
|
|
|
12.0
|
|
Normalized effective
tax rate (1)
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Non-GAAP net income
from continuing operations
|
$
|
12.9
|
|
|
$
|
8.7
|
|
|
$
|
48.7
|
|
|
$
|
22.4
|
|
|
|
|
|
|
|
|
|
GAAP net income
per diluted share from continuing operations
|
$
|
0.85
|
|
|
$
|
0.31
|
|
|
$
|
2.02
|
|
|
$
|
0.45
|
|
Non-GAAP net
income per diluted share from continuing operations
|
$
|
0.34
|
|
|
$
|
0.23
|
|
|
$
|
1.30
|
|
|
$
|
0.60
|
|
|
(1) Effective tax rate of 35%
used in all periods.
|
SYSTEMAX
INC.
|
Reconciliation of
GAAP Net Income (Loss) from Discontinued Operations to
Non-
|
GAAP Net Income
(Loss) from Discontinued Operations – Unaudited
|
(In
millions)
|
|
|
Quarter
Ended
December
31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP
|
|
|
|
|
|
|
|
Net income (loss)
from discontinued operations
|
$
|
1.4
|
|
|
$
|
(13.6)
|
|
|
$
|
(35.7)
|
|
|
$
|
(49.5)
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Results of NATG,
Afligo and Germany included in GAAP operating income from
continuing operations
|
(0.1)
|
|
|
(0.8)
|
|
|
(1.1)
|
|
|
(9.7)
|
|
Gain on sale of
Afligo
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse results of
NATG, Afligo and Germany included in GAAP interest and other
expenses (income), net
|
(0.3)
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATG,Afligo and
Germany net tax adjustments
|
1.2
|
|
|
(0.3)
|
|
|
1.2
|
|
|
(0.3)
|
|
Total Non-GAAP
adjustments
|
0.8
|
|
|
2.8
|
|
|
(0.2)
|
|
|
(6.2)
|
|
Non-GAAP net income
(loss) from discontinued operations
|
$
|
2.2
|
|
|
$
|
(10.8)
|
|
|
$
|
(35.9)
|
|
|
$
|
(55.7)
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss) per diluted share from discontinued
operations
|
$
|
0.04
|
|
|
$
|
(0.37)
|
|
|
$
|
(0.96)
|
|
|
$
|
(1.33)
|
|
Non-GAAP net
income (loss) per diluted share from discontinued
operations
|
$
|
0.06
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.95)
|
|
|
$
|
(1.50)
|
|
View original
content:http://www.prnewswire.com/news-releases/systemax-reports-fourth-quarter-2017-financial-results-300605307.html
SOURCE Systemax Inc.