Systemax, Inc. (SYX) Misses Q2 EPS by 9c

Systemax, Inc. (NYSE: SYX) reported Q2 EPS from cont ops of $0.02, $0.09 worse than the analyst estimate of $0.11. Revenue for the quarter came in at $420.8 million versus the consensus estimate of $441.93 million.

Larry Reinhold, Chief Executive Officer, said, "In the quarter we continued to streamline our business, optimize our operations and took additional steps to improve our long-term profitability. Industrial extended its revenue growth streak to 26 consecutive quarters despite a soft North American MRO market, improved efficiencies in its distribution network, and implemented a cost reduction initiative which will lower its annual cost structure by approximately $4 million. Quarterly results include approximately $2.9 million in one-time costs associated with the cost reduction initiative and an inventory adjustment the Company gained visibility into during an IT system conversion."

"In Europe, our largest market France delivered its 10th consecutive quarter of double digit growth despite a soft IT market, and our Netherlands Solutions business generated double digit growth for the second consecutive quarter, which were offset by declines in other markets. In the U.K., turnaround efforts are moving forward and we successfully established a new sales office in north London, which included the recruitment of several senior sales executives. In Netherlands we completed the consolidation of our offices to a new shared facility in Amstelveen which houses our employees from both the Solutions as well as the reseller business. During the quarter we also initiated a strategic review of our German business which concluded successfully with the recently announced sale."

"During the quarter, we made additional progress in winding down the former North American Technology Group business which included vacating the Miami office. Remaining shut down activities relate primarily to collecting accounts receivable and settling leases and other contingencies."

"As a result of the strategic initiatives we have accomplished in the past year, the Company has significantly simplified its structure, reported non-gaap operating profits and maintained a strong balance sheet. Accordingly, our board of directors has declared a cash dividend of $0.05 per share of common stock to shareholders of record at the close of August 19, 2016, payable on August 29, 2016. We anticipate continuing a regular quarterly dividend in the future. With a strong balance sheet we have the flexibility to return capital to shareholders, execute on our business plans and continue investing in our growth opportunities."

"At June 30, 2016, the Company had total working capital of $199.3 million, cash and cash equivalents of $165.2 million and excess availability under its credit facility of approximately $39.0 million," Reinhold concluded.

For earnings history and earnings-related data on Systemax, Inc. (SYX) click here.

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