Systemax 2Q Profit Falls On Charge And Lower Sales

PORT WASHINGTON, N.Y. (AP) — Online retailer Systemax Inc. said its profit fell by more than half in the second quarter as the company took a one-time charge to end its ProfitCenter Software business, and sales decreased.

Systemax said Tuesday it earned $6.5 million, or 17 cents per share, down 52 percent from $13.5 million, or 36 cents per share, a year earlier. The result included a one-time charge of 12 cents per share after it exited the ProfitCenter business, accounting for severance payments, contract termination, legal settlements and other costs.

Revenue shrank 5 percent, to $721.6 million from $756 million. Sales of computers improved, but sales of computer accessories and software, industrial products, and other items fell. Consumer electronics revenue was essentially unchanged and computer component sales were slightly lower.

While business-to-business revenue fell 24 percent, to $309.1 million from $406.4 million, retail revenue grew 18 percent to $387.4 million from $327.6 million. Systemax said its total sales grew 1 percent excluding the effects of foreign currency exchange.

Systemax bought Circuit City's brand name, trademarks and e-commerce business in May, after Circuit City filed for bankruptcy. It relaunched the CircuitCity.com Web site the same month, but said sales from the site "were not material" during the quarter.

In afternoon trading Wednesday, Systemax shares shed 44 cents, or 3.1 percent, to $13.85.

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