Systemax reports second quarter financial results
Port washington, n.y.--(business wire)--systemax inc. (nyse: syx) today announced financial results for the second quarter and six months ended june 30, 2011. performance summary (u.s. dollars in millions, except per share data) june 30, second quarter 2011 financial highlights: consolidated sales grew 8% to a record $872.2 million in u.s. dollars. on a constant currency basis, sales grew 4%. business to business channel sales grew 16% to $482.5 million in u.s. dollars. on a constant currency basis, sales grew 10%. consumer channel sales were flat at $389.7 million in u.s. dollars. on a constant currency basis, sales declined 1%. “same store” business to business sales grew 7% and same store consumer sales declined 4% on a constant currency basis. the company recorded special gains, net of legal and professional fees, of $7.1 million on a pre-tax basis, or approximately $0.13 per diluted share, after tax, related to the previously disclosed investigation and settlement with a former officer and director. diluted earnings per share (eps) were $0.42. six months 2011 financial highlights: consolidated sales grew 5% to a record $1.8 billion in u.s. dollars. on a constant currency basis, sales grew 3%. business to business channel sales grew 12% to $963.0 million in u.s. dollars. on a constant currency basis, sales grew 8%. consumer channel sales declined 2% to $839.1 million in u.s. dollars. on a constant currency basis, sales declined 3%. the company recorded special gains, net of legal and professional fees, of $6.6 million on a pre-tax basis, or approximately $0.12 per diluted share after tax, related to the previously disclosed investigation and settlement with a former officer and director. diluted earnings per share (eps) were $0.78. richard leeds, chairman and chief executive officer, said, “we delivered solid top line growth in the quarter. our business to business operations continue to perform well and once again led our performance as customers update their it infrastructure. in addition, the industrial products group had another outstanding quarter, delivering 27% revenue growth as we continue to execute on our growth initiatives in this segment. consumer channel sales were flat, reflecting a very competitive consumer technology market, particularly on the web. however, our retail stores once again showed solid growth.” “our bottom-line remains a key area of focus as we work to improve our gross and operating margins. our european technology businesses are showing improved margin performance, particularly in france, as we deliver on the benefits of a fully integrated operating platform. our industrial products business continues to demonstrate its ability to leverage its business model. in our north american technology business our efforts to drive additional efficiencies from our georgia distribution center and mitigate the impact of discounted freight are showing progress but overall margins in this business remain disappointing. our senior management team recently completed an extensive review of our north american technology business and is implementing a number of operating changes and best management practices, which we believe will improve its operating performance. it will be a number of quarters before the full impact of these efforts are evident but we are confident that these steps will allow us to better capitalize on the scale of our technology business. finally, we recorded special gains in the quarter related to an investigation and settlement with a former officer and director of the company.” (in millions) june 30, june 30, business to business1 consumer2 1 2 1 (in millions) quarter endedjune 30, six months endedjune 30, (in millions) june 30, june 30, working capital grew by $28.8 million to $329.7 million and cash and cash equivalents grew by $7.7 million to $99.8 million as of june 30, 2011. the company had availability under its credit facility of approximately $115.8 million and total cash and available liquidity of approximately $215.6 million as of june 30, 2011. short and long-term debt totaled approximately $12.1 million at june 30, 2011. the company’s effective tax rate for the first six months of 2011 was 30.5%, compared to 37.3% last year. the lower effective tax rate was primarily due to a higher mix of taxable income in countries with lower tax rates. earnings conference call details systemax inc. will host a teleconference to discuss its second quarter 2011 results today, august 3, 2011 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 86420105 ten minutes prior to the start time. the teleconferencing will also be available via live webcast on the company’s website at www.systemax.com. a replay of the conference call will be available through august 10, 2011. it can be accessed by dialing 855-859-2056 (u.s. callers) or 404-537-3406 (int’l callers), passcode 86420105. 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. selling, general and administrativeexpenses weighted average common andcommon equivalent shares: systemax inc.
