Systemax reports first quarter 2011 financial results
Port washington, n.y.--(business wire)--systemax inc. (nyse:syx) today announced financial results for the first quarter ended march 31, 2011. performance summary(u.s. dollars in millions, except per share data) first quarter 2011 financial highlights: consolidated sales grew 2% to $929.9 million in u.s. dollars. on a constant currency basis, sales grew 1%. business to business channel sales grew 8% to $480.5 million in u.s. dollars. on a constant currency basis, sales grew 7%. consumer channel sales declined 4% to $449.4 million in u.s. dollars. on a constant currency basis, sales declined 5%. “same store” business to business channel sales grew 7%, while same store consumer channel sales declined 8%. one-time charges were $0.5 million or approximately $0.01 per diluted share after tax, for costs primarily related to an internal whistleblower investigation. diluted earnings per share (eps) was $0.36. richard leeds, chairman and chief executive officer, said, “we had a solid start to 2011 that underscores the channel, product and geographic diversity that define systemax. our technology products business to business operations continue to perform well, particularly in europe as the business climates in most of our locations appear to have stabilized. in addition, the industrial products group had another outstanding quarter, delivering strong double digit growth from product expansion and other growth initiatives. consumer channel results were soft, reflecting the choppy economic environment; however, we did see improvement in our performance as we moved through the quarter. we are also beginning to see encouraging signs from the strategic initiatives we have underway to improve our margins performance. in fact, gross margins for the first quarter improved on both a year ago and sequential basis. operating margins declined due to investments in business to business operations, including the addition of sales heads and costs related to new stores and the new distribution center for the technology products segment. overall we are well positioned with a solid balance sheet, which provides us tremendous financial flexibility and a deep management team that is committed to building long-term value for our shareholders.” (in millions) march 31, business to business1 consumer2 1 2 1 (in millions) march 31, (in millions) march 31, working capital grew during the quarter by $19.2 million to $320.1 million as of march 31, 2011, primarily due to net income for the quarter. cash and cash equivalents grew during the quarter by $20.2 million to $112.3 million and as of march 31, 2011 the company had availability under its credit facility of approximately $115.8 million and total cash and available liquidity of approximately $228.0 million. short and long-term debt totaled approximately $24.0 million at march 31, 2011. the company’s effective tax rate for the quarter was 30.8%, compared to 37.5% last year. the lower quarterly 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 first quarter 2011 results today, may 10, 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 64478513 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 may 17, 2011. it can be accessed by dialing 800-642-1687 (u.s. callers) or 706-645-9291 (int’l callers), passcode 64478513. 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. 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) systemax inc. * 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 april 2, 2011. the first quarters of both 2011 and 2010 included 13 weeks.
