Systemax, Inc. (SYX) Misses Q1 EPS by 18c

Systemax, Inc. (NYSE: SYX) reported Q1 EPS of $0.14, $0.18 worse than the analyst estimate of $0.32. Revenue for the quarter came in at $251.1 million versus the consensus estimate of $250.7 million.

First Quarter 2021 Financial Summary:

Consolidated sales increased 10.5% to $251.1 million compared to $227.3 million last year.
Consolidated operating income from continuing operations declined 42.6% to $6.6 million compared to $11.5 million last year.
Net income per diluted share from continuing operations decreased 33.3% to $0.14 compared to $0.21 last year.

Barry Litwin, Chief Executive Officer, said, "We had another strong top line performance as first quarter revenue increased 10.5% to $251 million, our third consecutive quarter of double-digit growth. Sales reflect a continued recovery in core categories, which finished the quarter with a strong March, and solid demand for our Global Industrial branded products. We are pleased with core category performance, and given the signs of an improving economy, we remain optimistic about the demand environment. However, we were disappointed with our freight margin and resulting overall profitability which reflects the impact of the February winter storms, increased costs related to the transition to a new third party logistics provider, inflationary freight pressures, and a write down of personal protective equipment inventory. These events were partially offset by improved product margins, as well as selling, distribution and administrative leverage. We believe that many of the negative drivers of first quarter margin performance are temporary and will ease as we move through the summer."

"We continued to execute on our Accelerating the Customer Experience ("ACE") strategy and make strategic investments in our growth. These efforts are improving our ability to deliver an exceptional customer experience. As part of these investments, we made a strategic decision to enhance our fulfillment capabilities by transitioning to a new third party logistics provider. We anticipate, this relationship will allow for better long-term cost management and drive continuous improvement of our customer's experience. In addition, we are advancing our digital transformation to further capitalize on the huge shift in business to business e-commerce adoption, and our leading e-commerce capabilities and functionality continue to improve. We have several initiatives underway that highlight the product knowledge, expertise, and solutions we provide, and we continue to expand our line of Global Industrial branded products, which are a significant point of differentiation in the marketplace. With a strong platform and powerful customer growth model we believe we are well positioned to enhance our position as an indispensable business partner to our customers."

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

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