Current Report
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): June 28, 2006
Systemax Inc.
(Exact Name of Registrant as Specified in Charter)
|
Delaware
(State or Other Jurisdiction of Incorporation) |
1-13792
(Commission File Number) |
11-3262067
(IRS Employer Identification No.) |
11 Harbor Park Drive
Port Washington, New York 11050
(Address of Principal Executive Offices, including Zip Code)
Registrant’s Telephone Number, Including Area Code: (516) 608-7000
N.A.
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below):
| |_| | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |_| | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14-12) |
| |_| | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)) |
| |_| | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CRF 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition |
A press release regarding Fourth Quarter and Year-End 2005 financial results was issued by the Company on June 28, 2006, a copy of which is filed as an exhibit.
| Item 9.01 | Financial Statements and Exhibits |
(a) Financial Statements of Business Acquired — not applicable
(b) Pro Forma Financial Information — not applicable
(c) Exhibits
| 99.1 | Press Release of Systemax Inc., dated June 28, 2006 regarding financial results for the Fourth Quarter and Year-End of 2005 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
SYSTEMAX INC.
By: /s/ Steven Goldschein Name: Steven Goldschein Title: Senior Vice President and CFO |
Dated: June 28, 2006
Exhibit Index
| 99.1 | Press Release of Systemax Inc., dated June 28, 2006 regarding financial results for the Fourth Quarter and Year-End of 2005 |
Exhibit 99.1
FOR IMMEDIATE RELEASE
INVESTOR CONTACT:
Steven M. Goldschein
516 608-7000
SYSTEMAX REPORTS 2005 RESULTS
RECORD SALES
PORT WASHINGTON, NY , June 28, 2006 — Systemax Inc. (NYSE:SYX), a leading distributor and manufacturer of PC hardware, related computer products and industrial products in North America and Europe, today announced results for the fourth quarter and year ended December 31, 2005.
Net sales for the fourth quarter increased 5.5% to a record $583.0 million compared to $552.4 million in the year-ago quarter. Income from operations increased more than three-fold to $18.5 million from $5.9 million during the fourth quarter of 2004. Richard Leeds, Chairman and Chief Executive Officer said, “I am pleased to report this sharp increase in operating income, which resulted from a combination of increased sales and the positive effects of the cost cutting, streamlining and restructuring actions that we have taken during the last two years.” Net income was $3.4 million or $.09 per diluted share compared to $5.1 million or $.14 per diluted share in the prior year period. Fourth quarter net income in 2005 was adversely affected by an unusually high tax rate which resulted from the write-off of approximately $10 million, or $.27 per diluted share, of deferred tax assets related to carryforward losses and other timing differences in the United Kingdom.
For the year ended December 31, 2005, net sales increased 9.7% to a record $2.116 billion compared to $1.928 billion in the prior year. Income from operations increased to $34.8 million from $19.0 million last year. Net income for 2005 increased 12.3% to $11.4 million or $.31 per diluted share from $10.2 million or $.29 per diluted share last year. Net income in 2005 was adversely affected by an unusually high tax rate which resulted from the write-off in the fourth quarter of a reserve of approximately $10 million, or $.27 per diluted share, of deferred tax assets related to carryforward losses and other timing differences in the United Kingdom.
Gilbert Fiorentino, CEO of Tiger Direct, commented that the Company remains focused on controlling its costs and completing the streamlining that began two years ago. “We believe that we have taken the correct steps in Europe and have begun to see improved performance in all the markets we serve. Sales in North America climbed 15.3% this year and our sharply increased operating income was enhanced by Tiger Direct’s continued strong growth in internet sales, principally to the consumer sector,” added Mr. Fiorentino.
Steven Goldschein, Chief Financial Officer, commented that the Company’s balance sheet continued to be very strong. Cash and short-term investments increased to $70.9 million at the end of the year compared to $36.3 million a year ago. He added,” We have concentrated on managing inventory levels and have successfully been able to increase sales without increasing inventory.”
Mr. Goldschein noted that the Company’s reporting of its 2005 results was delayed as a result of a change at year end of its independent registered public accounting firm and delays caused by last year’s restatements. He added, “We are now working diligently to prepare our financial statements for the first and second quarters of 2006. We currently anticipate first quarter results will be released on or about August 7, 2006.
Systemax Inc. ( www.systemax.com ) utilizes an integrated system of branded e-commerce web sites, direct mail catalogs and relationship marketers to sell PC hardware, related computer products and industrial products in North America and Europe. Systemax is a Fortune 1000 company.
SYSTEMAX INC.
Condensed Consolidated Statements of
Operations
(In thousands, except per
common share amounts)
|
Year Ended
Dec. 31, 2005 |
Year Ended
Dec. 31, 2004 |
Quarter Ended
Dec. 31, 2005 |
Quarter Ended
Dec. 31, 2004 |
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|---|---|---|---|---|---|---|---|---|---|
| Net sales | $2,115,518 | $1,928,147 | $582,966 | $552,389 | |||||
| Cost of sales | 1,808,231 | 1,641,681 | 497,299 | 481,139 | |||||
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| Gross profit | 307,287 | 286,466 | 85,667 | 71,250 | |||||
| Selling, general | |||||||||
| & administrative expenses | 268,327 | 260,111 | 66,521 | 64,019 | |||||
| Restructuring and other charges | 4,151 | 7,356 | 657 | 1,315 | |||||
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| Income from operations | 34,809 | 18,999 | 18,489 | 5,916 | |||||
| Interest and other expense, net | 1,935 | 2,443 | (417 | ) | 655 | ||||
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| Income before provision for income taxes | 32,874 | 16,556 | 18,906 | 5,261 | |||||
| Provision for income taxes | 21,433 | 6,368 | 15,500 | 158 | |||||
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| Net income | $11,441 | $10,188 | $3,406 | $5,103 | |||||
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| Net income per common share: | |||||||||
| Basic | $.33 | $.30 | $.10 | $.15 | |||||
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| Diluted | $.31 | $.29 | $.09 | $.14 | |||||
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Quarter 1*
2005 |
Quarter 2*
2005 |
Quarter 3*
2005 |
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|---|---|---|---|---|---|---|---|---|---|
| Net sales | $537,908 | $506,142 | $488,502 | ||||||
| Cost of sales | 458,133 | 434,777 | 418,022 | ||||||
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| Gross profit | 79,775 | 71,365 | 70,480 | ||||||
| Selling, general | |||||||||
| & administrative expenses | 72,643 | 67,138 | 62,025 | ||||||
| Restructuring and other charges | 1,975 | 1,077 | 442 | ||||||
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| Income from operations | 5,157 | 3,150 | 8,013 | ||||||
| Interest and other (income) expense, net | 571 | 505 | 1,276 | ||||||
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| Income before provision for income taxes | 4,586 | 2,645 | 6,737 | ||||||
| Provision for income taxes | 1,948 | 1,123 | 2,862 | ||||||
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| Net income | $2,638 | $1,522 | $3,875 | ||||||
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| Net income per common share: | |||||||||
| Basic | $.08 | $.04 | $.11 | ||||||
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| Diluted | $.07 | $.04 | $.11 | ||||||
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| * | Reflects certain changes from results previously disclosed. |
SYSTEMAX INC.
Condensed Consolidated Balance Sheet
(In thousands)
|
ASSETS |
December 31,
2005 |
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|---|---|---|---|
| CURRENT ASSETS: | |||
| Cash, and cash equivalents | $70,925 | ||
| Accounts receivable, net | 143,001 | ||
| Inventories, net | 189,502 | ||
| Prepaid expenses and other current assets | 18,477 | ||
| Deferred tax assets - current | 9,227 | ||
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| Total current assets | 431,132 | ||
| PROPERT, PLANT AND EQUIPMENT, net | 57,259 | ||
| DEFERRED TAX ASSETS - NON CURRENT | 14,100 | ||
| OTHER ASSETS | 2,053 | ||
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| TOTAL ASSETS | $504,544 | ||
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| LIABILITIES AND SHAREHOLDERS' EQUITY : | |||
| CURRENT LIABILITIES: | |||
| Current portion of long-term debt and notes payable to bank | $ 26,773 | ||
| Accounts payable | 171,667 | ||
| Accrued expenses and other current liabilities | 62,888 | ||
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| Total current liabilities | 261,328 | ||
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| LONG-TERM DEBT | 8,028 | ||
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| OTHER NON-CURRENT LIABILITIES | 2,346 | ||
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| SHAREHOLDERS' EQUITY: | |||
| Common stock | 382 | ||
| Treasury stock | (40,772 | ) | |
| Additional paid-in capital | 177,574 | ||
| Retained earnings | 98,927 | ||
| Accumulated other comprehensive income | 893 | ||
| Unearned restricted stock compensation | (4,162 | ) | |
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| Total shareholders' equity | 232,842 | ||
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| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $504,544 | ||
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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 the Forward Looking Statements section contained in Item 7 of the Company’s Form 10-K for a more detailed explanation of the inherent limitations in such forward-looking statements.
– End –