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Systemax Reports Higher Q1 Sales, Lower Net

5/13/2009 02:08:00 PM Eastern

Port Washington, N.Y. — Systemax, which operates the TigerDirect and CompUSA retail operations, reported that that sales were up but net profits were down for the quarter, and confirmed its winning bid for the rights to the Circuit City brand.

Consolidated net sales grew 4 percent to $752.3 million in the first quarter, ended March 31. On a constant currency basis, Systemax said sales would have grown 12 percent. North American technology product sales grew 21 percent to $502.4 million.

Net income was $8.7 million, down from the prior year’s $18.1 million.

Richard Leeds, chairman/CEO, said in a statement: "Systemax's solid first-quarter performance was made possible by sticking to a simple objective — delivering value to our customers. Despite the prolonged economic downturn, Systemax has successfully grown market share across our businesses, including TigerDirect, CompUSA and Misco. On a constant currency basis, top line revenue grew 12 percent and, most noteworthy, our North American technology products group revenues grew 24 percent. Our North American operations continue to benefit from the successful addition of the CompUSA business.”

And Systemax confirmed it won the bid to add the Circuit City brand to its lineup. “Last month Systemax entered into a ‘stalking horse’ agreement related to the acquisition of Circuit City's ecommerce business. An auction commenced last night and concluded early [Tuesday] morning. Systemax's revised bid was selected as the highest or otherwise best bid, subject to court approval," Leeds said.

Gilbert Fiorentino, chief executive of Systemax's technology products group, said, "Market conditions are challenging, but we are growing share and attracting customers. We are price-competitive and that's a necessary ingredient of success in our business. This strategy enables us to build a long-term and loyal customer base. In addition to building our online presence, we also continue to make investments in the brick and mortar side of our business. We are continuing to remodel our CompUSA stores in the United States with our innovative new retail shopping system, Retail 2.0, to bring the best of the Web to our retail stores. The results of the Retail 2.0 initiative have been very positive, with improvements in close rate and overall customer satisfaction."