Systemax Inc. (NYSE: SYX) today announced
financial results for the fourth quarter and full year ended
December 31, 2011.
Performance
Summary(U.S. dollars in millions, except per share
data)
Highlights
Quarter EndedDecember
31,
Year Ended
December 31,
2011 2010
2011 2010 Sales $978.8 $1,006.2
$3,682.0 $3,590.0 Gross profit $139.9
$136.3 $530.7 $489.6 Gross margin
14.3% 13.6% 14.4% 13.6%
Operating income $21.0 $20.1 $80.5
$68.7 Operating margin 2.1% 2.0%
2.2% 1.9% Diluted earnings per share $0.40
$0.34 $1.47 $1.13 Special (gains) charges, net
$0.6 $1.1 ($5.6) $4.3 Special
(gains) charges, net, per diluted share, after tax $0.01
$0.02 ($0.10) $0.07
Fourth Quarter 2011 Financial Highlights:
- Consolidated sales declined 3% to
$978.8 million in U.S. dollars. On a constant currency basis, sales
declined 2%.
- Business to business channel sales grew
9% to $514.0 million in U.S. dollars. On a constant currency basis,
sales grew 10%.
- Consumer channel sales declined 13% to
$464.8 million in U.S. dollars. On a constant currency basis, sales
declined 13%.
- “Same store” business to business sales
grew 7% and same store consumer sales declined 14% on a constant
currency basis.
- Special charges incurred were
approximately $0.6 million on a pre-tax basis, or $0.01 per diluted
share after tax, consisting of legal and professional fees, related
to the previously disclosed investigation and settlement with a
former officer and director.
- Operating income increased 4% to $21.0
million.
- Diluted earnings per share (EPS) grew
18% to $0.40.
Full Year 2011 Financial Highlights:
- Consolidated sales grew 3% to a record
$3.7 billion in U.S. dollars. On a constant currency basis, sales
grew 1%.
- Business to business channel sales grew
12% to $2.0 billion in U.S. dollars. On a constant currency basis,
sales grew 10%.
- Consumer channel sales declined 7% to
$1.7 billion in U.S. dollars. On a constant currency basis, sales
declined 7%.
- The Company recorded special gains, net
of legal and professional fees, of $5.6 million on a pre-tax basis,
or approximately $0.10 per diluted share after tax, related to the
previously disclosed investigation and settlement with a former
officer and director.
- Operating income grew 17% to $80.5
million.
- Diluted EPS grew 30% to $1.47.
Richard Leeds, Chairman and Chief Executive Officer, said, “We
delivered improved margins for the quarter and the full year as we
continue to see some of the initial benefits of our strategic
initiatives. Our business-to-business channels had another
outstanding quarter and full year, particularly our Industrial
Products Group, which grew over 27% in the quarter. In addition,
Europe had strong margin gains led by our operations in the U.K.
and France. Sales of products through television shopping networks
were the largest factor contributing to the consumer sales decline
during the quarter. Consumer channel sales were also impacted by
our decision to deliver higher profitability and not fully engage
in free freight and promotional pricing throughout the holiday
selling season. Despite these short-term challenges, we remain
optimistic about the long-term prospects of our consumer business
as we work to improve performance under the leadership of David
Sprosty, our recently appointed Chief Executive of the North
American Technology Products Group.
“In the second half of the year we launched a number of
initiatives to strengthen our operations and improve our results.
There is additional work to be done and this is a key focus area
for our management team in the year ahead. To help facilitate these
efforts we recently announced changes to our organizational
structure with the appointment of Pim Dale as Chief Executive of
the European Technology Products Group and the promotion of Bob
Dooley to President of Global Industrial. With Pim and Bob joining
David, Systemax has experienced and dedicated executives guiding
our three largest business units. We believe this is the right
management structure to meet the unique needs of each business and
execute on our future growth initiatives. Combined with our solid
core business model, web-centric focus and integrated multi-channel
platform, we are well-positioned to create additional value for our
shareholders.”
Supplemental
Channel Sales
(in millions)
Channel Quarter Ended
December 31,
Year Ended
December 31,
2011 % 2010
% 2011 %
2010 % Business to business1 $514.0
53% $472.3 47% $1,985.2
54% $1,770.2 49% Consumer2 $464.8 47%
$533.9 53% $1,696.8 46%
$1,819.8 51%
Consolidated Sales $978.8
100% $1,006.2 100%
$3,682.0 100% $3,590.0
100%
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 –
Q4 2011 vs. Q4 2010 Channel Change
Business to business 7% Consumer -14%
Consolidated Sales -4%
1
Excludes revenue at retail stores,
websites and call centers operating for less than 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,
Year Ended
December 31,
2011 % 2010
% 2011 %
2010 % Computers $306.6 31%
$228.5 23% $1,048.9 29%
$879.2 25% Computer accessories & software $255.9
26% $263.6 26% $1,025.0
28% $982.8 27% Consumer electronics $203.1
21% $282.5 28% $746.5 20%
$856.3 24% Computer components $105.3
11% $148.5 15% $453.8 12%
$551.0 15% Industrial products $83.3 9%
$ 65.4 6% $319.9 9% $250.0
7% Other $24.6 2% $ 17.7 2%
$87.9 2% $70.7 2%
Consolidated Sales $978.8 100%
$1,006.2 100%
$3,682.0 100% $3,590.0
100%
Supplemental
Business Unit Sales Summary
(in millions)
Business Unit Quarter Ended
December 31,
Year Ended
December 31,
2011 % 2010
% 2011 %
2010 % Technology Products $894.5
91% $940.2 94% $3,358.7
91% $3,337.7 93% Industrial Products $83.3
9% $65.4 6% $319.9 9%
$250.0 7% Corporate and Other $1.0 -%
$0.6 -% $3.4 -% $2.3
-%
Consolidated Sales $978.8
100% $1,006.2 100%
$3,682.0 100% $3,590.0
100%
In 2011 working capital grew by $53.8 million to $354.7 million,
and cash and cash equivalents increased by $5.2 million to $97.3
million at December 31, 2011. The Company had availability under
its credit facility of approximately $113.1 million and total cash
and available liquidity of approximately $210.4 million at December
31, 2011. Short and long-term debt totaled approximately $9.7
million at December 31, 2011.
The Company’s effective tax rate for the fourth quarter was
25.4% compared to 31.1% in the fourth quarter of 2010. The
effective tax rate for the year ended December 31, 2011 was 30.9%
compared to 35.6% for the same period last year. The lower
effective tax rate in 2011 is primarily the result of the company
having a higher pre-tax income in France compared to the same
period in 2010. The pre-tax income in France is partially offset by
the use of net operating loss carryforwards that have a full
valuation allowance applied.
Earnings Conference Call Details
Systemax Inc. will host a teleconference to discuss its fourth
quarter and full year 2011 results today, February 28, 2012 at 5:00
p.m. Eastern Time. A live webcast of the teleconference 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. (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 Year Ended December 31*
December 31* 2011 2010 2011
2010 Net sales $978,770 $1,006,172 $3,682,039
$3,589,989 Cost of sales 838,873 869,825 3,151,363 3,100,385 Gross
profit 139,897 136,347 530,676 489,604 Gross margin 14.3% 13.6%
14.4% 13.6% Selling, general and administrative expenses 118,330
115,112 455,747 416,570 Special (gains) charges, net 605 1,091
(5,598) 4,289 Operating income 20,962 20,144 80,527 68,745
Operating margin 2.1% 2.0% 2.2% 1.9% Interest and other (income)
expense, net 1,325 1,672 1,844 2,712 Income before income taxes
19,637 18,472 78,683 66,033 Provision for income taxes 4,983 5,744
24,275 23,482 Effective tax rate 25.4% 31.1% 30.9% 35.6% Net income
$14,654 $12,728 $54,408 $42,551 Net margin 1.5% 1.3% 1.5% 1.2%
Net income per common share: Basic $0.40 $0.34 $1.48 $1.15
Diluted $0.40 $0.34 $1.47 $1.13
Weighted average common and common
equivalent shares:
Basic 36,700 37,178 36,805 36,996 Diluted 36,880 37,699 37,096
37,601
SYSTEMAX INC.
Condensed Consolidated Balance Sheets (In thousands)
December 31* December 31* 2011
2010 Current assets: Cash and cash equivalents $97,254
$92,077 Accounts receivable, net 268,980 276,344 Inventories
372,244 370,375 Prepaid expenses and other current assets 27,738
26,441 Total current assets 766,216 765,237 Property, plant and
equipment, net 70,699 73,765 Goodwill, intangibles and other assets
52,747 55,098 Total assets $889,662 $894,100
Current liabilities: Short-term debt $2,552 $2,655 Accounts payable
and accrued expenses 408,960 461,710 Total current liabilities
411,512 464,365 Long-term debt 7,133 7,386 Other liabilities 16,725
13,081 Shareholders’ equity 454,292 409,268 Total liabilities and
shareholders’ equity $889,662 $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 December 31,
2011. The fourth quarters of both 2011 and 2010 included 13 weeks.
The full years of both 2011 and 2010 included 52 weeks.
Systemax (NYSE:SYX)
Historical Stock Chart
From May 2024 to Jun 2024
Systemax (NYSE:SYX)
Historical Stock Chart
From Jun 2023 to Jun 2024