CompUSA 2008 Annual Report Download - page 39

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Item 1. Business.
General
Systemax is primarily a direct marketer of brand name and private label products. Our operations are
organized in three reportable business segments – Technology Products, Industrial Products and Software
Solutions. Our Technology Products segment sells computers, computer supplies and consumer
electronics which are marketed in North America and Europe. Except for certain personal computer
(“PC”) products that we assemble ourselves and sell under the trademarks Systemax™and Ultra™,
substantially all of our products are manufactured by other companies. We also sell certain computer-
related products manufactured for us to our own design under the trademark Systemax™and Ultra™.
Technology Products accounted for 92% of our net sales in 2008.
Our Industrial Products segment sells a wide array of material handling equipment, storage equipment
and consumable industrial items which are marketed in North America. Substantially all of these products
are manufactured by other companies. Some products are manufactured for us to our own design and
marketed under the trademarks Global™,GlobalIndustrial.com™and Nexel™.Industrial products
accounted for 8% of our net sales in 2008.
Our Software Solutions segment participates in the emerging market for on-demand, web-based business
software applications through the marketing of our PCS ProfitCenter Software™application. See Note 10
to the Consolidated Financial Statements included in Item 15 of this Form 10-K for additional financial
information about our business segments as well as information about our geographic operations.
The Company was incorporated in Delaware in 1995. Certain predecessor businesses which now
constitute part of the Company have been in business since 1955. Our headquarter office is located at 11
Harbor Park Drive, Port Washington, New York.
Recent Developments
On January 5, 2008 the Company entered into an asset purchase agreement with CompUSA Inc. Under
the agreement the Company acquired CompUSA’ s e-commerce business and 16 of its retail leases and
related fixtures for consideration of approximately $30.6 million. This acquisition accelerated the
Company’ s planned expansion into the retail market place in North America and Puerto Rico.
Products
We offer more than 100,000 brand name and private label products. We endeavor to expand and keep
current the breadth of our product offerings in order to fulfill the increasingly wide range of product needs
of our customers.
Our computer sales include desktops, laptops and notebooks and are primarily offerings of brand name
original equipment manufacturers, as well as our own Systemax and Ultra brands. Computer supplies and
consumer electronics related products include supplies such as laser printer toner cartridges and ink jet
printer cartridges; media such as flash memory, recordable disks and magnetic tape cartridges; peripherals
such as hard disks, CD-ROM and DVD drives, printers and scanners; memory upgrades; data
communication and networking equipment; monitors; digital cameras; plasma and LCD TVs; MP3 and
DVD players; PDAs; and packaged software.
We assemble our Systemax and Ultra brand PCs in our 297,000 square foot, ISO-9001:2000 certified
facility in Fletcher, Ohio. We purchase components and subassemblies from suppliers in the United
States as well as overseas. Certain parts and components for our PCs are obtained from a limited group of
suppliers. We also utilize licensed technology and computer software in the assembly of our PCs. For a
discussion of risks associated with these licenses and suppliers, see Item 1A, Risk Factors.