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Systemax Reports Second Quarter 2012 Financial Results

Stocks in this article: SYX

Systemax Inc. (NYSE: SYX) today announced financial results for the second quarter and six months ended June 30, 2012.

Performance Summary (U.S. dollars in millions, except per share data)
Highlights   Quarter Ended June 30,   Six Months Ended

June 30,

  2012   2011 2012   2011
Sales $849.5 $872.2 $1,763.1 $1,802.0
Gross profit $118.0 $128.9 $248.7 $259.4
Gross margin 13.9% 14.8% 14.1% 14.4%
Operating income (loss) from continuing operations $(2.0) $21.9 $8.8 $40.5
Operating margin from continuing operations (0.2)% 2.5% 0.5% 2.2%
Diluted earnings (loss) per share $(0.06) $0.42 $0.13 $0.78
Special charges (gains), net $2.2 $(7.1) $4.1 $(6.6)
Special charges (gains), net, per diluted share, after tax $0.04 $(0.13) $0.08 $(0.12)

Second Quarter 2012 Financial Highlights:

  • Consolidated sales declined 2.6% to $849.5 million in U.S. dollars. On a constant currency basis, sales increased 0.2%.
  • Business to business channel sales grew 7.7% to $519.6 million in U.S. dollars. On a constant currency basis, sales grew 11.9%. On a “same store” and constant currency basis, sales grew 11.3%.
  • Consumer channel sales declined 15.3% to $329.9 million in U.S. dollars. On a constant currency basis, sales declined 14.4%. On a “same store” and constant currency basis, sales declined 15.1%.
  • Special charges incurred were approximately $2.2 million on a pre-tax basis, or $0.04 per diluted share after tax, consisting primarily of costs related to the closing and relocation of one of our smaller distribution centers to a new, significantly larger distribution and call center for our Industrial Products business, and legal and professional fees related to the previously disclosed investigation and settlement with a former officer and director.
  • Operating loss from continuing operations, which excludes results of the Company’s discontinued Software Solutions segment, was $2.0 million, compared to operating income from continuing operations of $21.9 million in the second quarter of 2011. The decline was primarily a result of the performance of the Company’s North America technology consumer business.
  • Diluted loss per share (EPS) was $0.06.

Six Months 2012 Financial Highlights:

  • Consolidated sales declined 2.2% to $1.8 billion in U.S. dollars. On a constant currency basis, sales declined 0.3%.
  • Business to business channel sales grew 7.2% to $1.0 billion in U.S. dollars. On a constant currency basis, sales grew 10.0%.
  • Consumer channel sales declined 12.9% to $730.8 million in U.S. dollars. On a constant currency basis, sales declined 12.3%.
  • Special charges incurred were approximately $4.1 million on a pre-tax basis, or $0.08 per diluted share after tax, consisting of costs associated with senior staffing changes in our North America technology business, legal and professional fees related to the previously disclosed investigation and settlement with a former officer and director, and costs related to the closing and relocation of one of our smaller distribution centers to a new, significantly larger distribution and call center for our Industrial Products business.
  • Operating income from continuing operations, which excludes results of the Company’s discontinued Software Solutions segment, was $8.8 million, compared to operating income from continuing operations of $40.5 million in the first six months of 2011. The decline was primarily a result of the performance of the Company’s North America technology consumer business.
  • Diluted earnings per share (EPS) was $0.13.

Richard Leeds, Chairman and Chief Executive Officer, commented, “Results reflect a continuation of the trends we saw in the first quarter, with our B2B operations delivering outstanding performance that was more than offset by disappointing results from our North American technology consumer business. Within B2B, industrial products exceeded the market and delivered a 31% revenue increase, as we gained share and for the first time surpassed the $100 million revenue mark for a quarter. In technology B2B, Europe continues to significantly outperform the region, generating 12% top line growth on a constant currency basis led by the UK, France and the Netherlands, while North America delivered modest growth in a soft market environment.

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