Systemax Q4 Profits Soar 85%

By Alan Wolf -- TWICE, 3/22/2010

PORT WASHINGTON, N.Y. — Fourth-quarter profits nearly doubled for IT supplier and reseller Systemax thanks to stringent cost controls and strong holiday demand.

Net income rose 85 percent to $18.4 million for the three months, ended Dec. 31, 2009, which also included a one-time after-tax gain of $1.8 million from a favorable lawsuit settlement.

Net sales grew 15 percent to $938.2 million, a company record, while revenue from Systemax’s retail and direct- sale operations, including CompUSA, TigerDirect and CircuitCity. com, rose 9 percent to $537.6 million. Same-store sales increased 12 percent year over year.

“The market share growth strategy we have followed since the beginning of the economic downturn is beginning to pay off for us,” noted chairman/ CEO Richard Leeds “Our consumer channel sales benefited from a robust holiday season that saw consumers shopping for lower-priced products such as netbook computers, digital cameras and smaller flat-screen televisions both online and at our retail stores, as well as the Circuit City asset purchase which was completed in May 2009.

“Looking ahead,” he continued, “we believe our capacity to capture value and deliver it to customers through our recognized brands … positions us well for 2010.”

For the full calendar year, net income fell 12.6 percent to $46.2 million and net sales rose 4 percent to $3.2 billion, another company record. Revenue from retail and direct-sale operations increased 12 percent to $1.8 billion.