Attached files
| file | filename |
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| 8-K - CURRENT REPORT - GLOBAL INDUSTRIAL Co | kl03010.htm |
Exhibit
99.1
[
SYSTEMAX
REPORTS ALL-TIME RECORD SALES FOR FOURTH QUARTER AND
FULL
YEAR 2009
--
Sales Up 15% for the Quarter; Up 24% on an Equivalent Weeks Basis
--
--
Earnings Per Share $0.49; Up 81% --
PORT WASHINGTON, NY, March 8,
2010 – Systemax Inc. (NYSE:SYX)
today announced financial results for the fourth quarter and full year
ended December 31, 2009. The Company’s fourth quarter and full year 2009
included 13 and 52 weeks, respectively, compared to 14 and 53 weeks during
2008.
Fourth
Quarter 2009 Financial Highlights:
|
·
|
Consolidated
sales grew 15% to $938.2 million in U.S. dollars, an all-time
record. Adjusting for the impact of the number of weeks, sales
grew 24%. On a constant currency basis, sales grew
14%.
|
|
·
|
Consumer
channel sales grew 9% to $537.6 million in U.S.
dollars. Adjusting for the impact of the number of weeks, sales
grew 18%. On a constant currency basis, sales grew
8%.
|
|
·
|
Business
to business channel sales grew 25% to $400.6 million in U.S.
dollars. Adjusting for the impact of the number of weeks, sales
grew 34%. On a constant currency basis, sales grew
22%.
|
|
·
|
“Same
store” (as defined below) consumer channel sales grew 12%; same store
business to business channel sales grew
11%.
|
|
·
|
Diluted
earnings per share (EPS) grew 81% to $0.49. This included a
gain of $1.8 million or $0.03 per diluted share, after tax, related to a
favorable lawsuit settlement.
|
Full
Year 2009 Financial Highlights:
|
·
|
Consolidated
sales grew 4% to $3.2 billion in U.S. dollars, an all-time
record. Adjusting for the impact of the number of weeks, sales
grew 6%. On a constant currency basis, sales grew
8%.
|
|
·
|
Consumer
channel sales grew 12% to $1.8 billion in U.S.
dollars. Adjusting for the impact of the number of weeks, sales
grew 15%. On a constant currency basis, sales grew
14%.
|
|
·
|
Business
to business channel sales were $1.3 billion in U.S. dollars, a 5%
decline. Adjusting for the impact of the number of weeks, sales
declined 3%. On a constant currency basis, sales increased
1%.
|
|
·
|
Diluted
EPS was $1.24 compared to $1.40.
|
|
Performance
Summary
(U.S
dollars in millions, except per share data)
|
||||||||||||||||
|
Highlights
|
Quarter
Ended Dec 31,
|
Full
Year Ended Dec 31,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
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|||||||||||||
|
Sales
|
$ | 938.2 | $ | 812.7 | $ | 3,166.0 | $ | 3,033.0 | ||||||||
|
Gross
profit
|
$ | 132.9 | $ | 114.6 | $ | 460.2 | $ | 458.6 | ||||||||
|
Gross
margin
|
14.2 | % | 14.1 | % | 14.5 | % | 15.1 | % | ||||||||
|
Operating
income
|
$ | 30.3 | $ | 15.8 | $ | 73.4 | $ | 83.4 | ||||||||
|
Operating
margin
|
3.2 | % | 1.9 | % | 2.3 | % | 2.7 | % | ||||||||
|
Diluted
earnings per share
|
$ | 0.49 | $ | 0.27 | $ | 1.24 | $ | 1.40 | ||||||||
Richard
Leeds, Chairman and Chief Executive Officer, said, “Systemax posted all-time
record sales, with over 24% growth in the fourth quarter on an equivalent weeks
basis. Our business to business sales growth was the highest, driven by the
impact of the WStore acquisition which was completed in September 2009 and
modestly improving economic conditions in certain of the geographies in which we
sell. Our consumer channel sales benefited from a robust holiday
season that saw consumers shopping for lower priced products such as netbook
computers, digital cameras and smaller flat screen televisions both online and
at our retail stores, as well as the Circuit City asset purchase which was
completed in May 2009. The market share growth strategy we have
followed since the beginning of the economic downturn is beginning to pay off
for us. Our diligent cost controls, coupled with the strong top-line
sales growth, resulted in our growing operating income by 92% and diluted EPS by
81%. Looking ahead, we believe our capacity to capture value and deliver it to
customers through our recognized brands, including TigerDirect, CompUSA, Circuit
City, Misco, WStore and Global Industrial, positions us well for
2010.”
Supplemental Channel Sales Summary
(in millions)
|
Channel
|
Quarter
Ended Dec 31,
|
Full
Year Ended Dec 31,
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||||||||||||||
|
2009
|
2008
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2009
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2008
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|||||||||||||
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Consumer1
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$ | 537.6 | $ | 491.3 | $ | 1,845.6 | $ | 1,645.1 | ||||||||
|
Business
to business2
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$ | 400.6 | $ | 321.4 | $ | 1,320.4 | $ | 1,387.9 | ||||||||
|
Consolidated
sales
|
$ | 938.2 | $ | 812.7 | $ | 3,166.0 | $ | 3,033.0 | ||||||||
1Includes
sales from retail stores, consumer websites, inbound call centers and television
shopping
2Includes
sales from managed business relationships, including outbound call centers and
extranets, and the entire Industrial Products segment
| Supplemental "Same Store" channel growth3 – Q4 2009 vs Q4 2008 | |
|
Channel
|
Change
|
|
Consumer
|
12%
|
|
Business
to business
|
11%
|
3Comprised
of revenue at retail stores, websites and call centers operating for at least 14
full months and adjusting for the impact of the number of weeks in the
quarter. The calculation of the comparable store sales percentage
change excludes the effect of fluctuations in foreign currency exchange
rates. 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 Dec 31,
|
Full
Year Ended Dec 31,
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||||||||||||||
|
2009
|
2008
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2009
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2008
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|||||||||||||
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Computers
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$ | 208.4 | $ | 155.4 | $ | 730.8 | $ | 525.0 | ||||||||
|
Consumer
electronics
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$ | 251.7 | $ | 217.7 | $ | 779.5 | $ | 727.1 | ||||||||
|
Computer
components
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$ | 145.9 | $ | 140.2 | $ | 538.2 | $ | 552.0 | ||||||||
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Computer
accessories & software
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$ | 257.0 | $ | 228.8 | $ | 852.1 | $ | 925.1 | ||||||||
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Industrial
products
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$ | 49.6 | $ | 54.8 | $ | 196.1 | $ | 237.0 | ||||||||
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Other
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$ | 25.6 | $ | 15.8 | $ | 69.3 | $ | 66.8 | ||||||||
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Consolidated
sales
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$ | 938.2 | $ | 812.7 | $ | 3,166.0 | $ | 3,033.0 | ||||||||
Supplemental Business Unit Sales Summary
(in millions)
|
Business
Unit
|
Quarter
Ended Dec 31,
|
Full
Year Ended Dec 31,
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2009
|
2008
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2009
|
2008
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|||||||||||||
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Technology
Products – North America
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$ | 618.7 | $ | 540.8 | $ | 2,119.4 | $ | 1,854.9 | ||||||||
|
Technology
Products – Europe
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$ | 269.2 | $ | 216.9 | $ | 848.5 | $ | 940.6 | ||||||||
|
Industrial
Products
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$ | 49.6 | $ | 54.8 | $ | 196.1 | $ | 237.0 | ||||||||
|
Software
Solutions
|
$ | 0.7 | $ | 0.2 | $ | 2.0 | $ | 0.5 | ||||||||
|
Consolidated
Sales
|
$ | 938.2 | $ | 812.7 | $ | 3,166.0 | $ | 3,033.0 | ||||||||
Working
capital as of December 31, 2009 was $252.5 million, including cash and cash
equivalents of $58.3 million. Cash for the year was impacted by the
Circuit City asset purchase, the WStore acquisition, the payment of the 2009
special dividend, higher inventory levels to support a growing retail store base
and increasing sales volume from the Company’s e-commerce consumer business, and
higher accounts receivable from growth in open account business to business
sales. As of December 31, 2009, the Company had an undrawn credit
facility of $120.0 million and total cash and available liquidity of over $150.0
million. Short term debt totaled approximately $15.2 million at December 31,
2009 and included approximately $14.2 million in revolving debt assumed as part
of the WStore acquisition as well as capitalized lease obligations. The
Company’s effective tax rate for the full year 2009 was 36.8%, essentially flat
with last year. Included in the 2009 rate is a reversal of tax
reserves of approximately $1.2 million as the result of statute expirations.
Excluding this reserve reversal, the Company’s 2009 effective tax rate would
have been 38.4%.
Earnings
Conference Call Details
Systemax
Inc. will host a teleconference to discuss its fourth quarter and full year 2009
results today, March 8, 2010 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 58388671 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 15, 2010. It can
be accessed by dialing 800-642-1687 (U.S. callers) or 706-645-9291 (Int’l
callers), passcode 58388671. 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.
|
I.
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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.
INVESTOR/
MEDIA CONTACTS:
Denise
Roche / Nancy Zachary
Brainerd
Communicators, Inc.
212-986-6667
roche@braincomm.com
nancy@braincomm.com
-
### -
|
SYSTEMAX
INC.
|
||||||||||||||||
|
II. Condensed
Consolidated Statements of Operations – Unaudited
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(In
thousands, except per share amounts)
|
||||||||||||||||
|
Quarter
Ended
|
Year
Ended
|
|||||||||||||||
|
December
31*
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December
31*
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2009
|
2008
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2009
|
2008
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|||||||||||||
|
Net
sales
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$ | 938,248 | $ | 812,710 | $ | 3,165,995 | $ | 3,032,961 | ||||||||
|
Cost
of sales
|
805,367 | 698,073 | 2,705,747 | 2,574,402 | ||||||||||||
|
Gross
profit
|
132,881 | 114,637 | 460,248 | 458,559 | ||||||||||||
|
Gross
margin
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14.2 | % | 14.1 | % | 14.5 | % | 15.1 | % | ||||||||
|
Selling,
general and administrative expenses
|
102,548 | 98,843 | 386,857 | 375,192 | ||||||||||||
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Operating
income
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30,333 | 15,794 | 73,391 | 83,367 | ||||||||||||
|
Operating
margin
|
3.2 | % | 1.9 | % | 2.3 | % | 2.7 | % | ||||||||
|
Interest
and other expense (income), net
|
895 | 467 | 306 | (376 | ) | |||||||||||
|
Income
before income taxes
|
29,438 | 15,327 | 73,085 | 83,743 | ||||||||||||
|
Provision
for income taxes
|
11,040 | 5,359 | 26,900 | 30,900 | ||||||||||||
|
Effective
tax rate
|
37.5 | % | 35.0 | % | 36.8 | % | 36.9 | % | ||||||||
|
Net
income
|
$ | 18,398 | $ | 9,968 | $ | 46,185 | $ | 52,843 | ||||||||
|
Net
margin
|
2.0 | % | 1.2 | % | 1.5 | % | 1.7 | % | ||||||||
|
Net
income per common share:
|
||||||||||||||||
|
Basic
|
$ | 0.50 | $ | 0.27 | $ | 1.26 | 1.43 | |||||||||
|
Diluted
|
$ | 0.49 | $ | 0.27 | $ | 1.24 | 1.40 | |||||||||
|
Weighted
average common and
common
equivalent shares:
|
||||||||||||||||
|
Basic
|
36,817 | 36,893 | 36,706 | 36,950 | ||||||||||||
|
Diluted
|
37,432 | 37,497 | 37,343 | 37,705 | ||||||||||||
|
SYSTEMAX
INC.
|
||||||||
|
III. Condensed
Consolidated Balance Sheets - Unaudited
|
||||||||
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(In
thousands)
|
||||||||
|
December
31*
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||||||||
|
2009
|
2008
|
|||||||
|
Current
assets:
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||||||||
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Cash
and cash equivalents
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$ | 58,309 | $ | 115,967 | ||||
|
Accounts
receivable, net
|
241,860 | 182,841 | ||||||
|
Inventories
|
365,725 | 290,594 | ||||||
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Prepaid
expenses and other current assets
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29,154 | 22,225 | ||||||
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Total
current assets
|
695,048 | 611,627 | ||||||
|
Property,
plant and equipment, net
|
65,598 | 48,465 | ||||||
|
Goodwill,
intangibles and other assets
|
56,255 | 42,361 | ||||||
|
Total
assets
|
$ | 816,901 | $ | 702,453 | ||||
|
Current
liabilities:
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||||||||
|
Short-term
debt
|
$ | 15,197 | $ | 773 | ||||
|
Accounts
payable and accrued expenses
|
427,307 | 357,762 | ||||||
|
Total
current liabilities
|
442,504 | 358,535 | ||||||
|
Long-term
debt
|
1,194 | 1,411 | ||||||
|
Other
liabilities
|
8,518 | 8,552 | ||||||
|
Shareholders’
equity
|
364,685 | 333,955 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 816,901 | $ | 702,453 | ||||
*
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 2, 2010. The fourth quarter of 2009 and 2008 included
13 and 14 weeks, respectively, and the fiscal year 2009 and 2008 included 52 and
53 weeks, respectively.