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Readers are cautioned not to place undue reliance on any forward looking statements contained in this report, which speak only as of the date of
this report. We undertake no obligation to publicly release the result of any revisions to these forward looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected events.
Item 1. Business.
General
Systemax is primarily a direct marketer of brand name and private label products. Our sales operations are organized in two reportable business
segments — Technology Products and Industrial Products.
Our Technology Products segment sells products categorized as Information and Communications Technology (“ICT”)
and Consumer
Electronics (“CE”).
These products include computers, computer supplies and consumer electronics which are marketed in North America,
Puerto Rico and Europe. Most of these products are manufactured by other companies; however, we do offer a selection of products that are
manufactured for us to our own design and marketed on a private label basis. Technology Products accounted for 86%, 89% and 91% of our net
sales in 2013, 2012 and 2011, respectively.
Our Industrial Products segment sells a wide array of industrial products and supplies categorized as Maintenance, Repair and Operations
(“MRO”)
which are marketed in North America. Most of these products are manufactured by other companies. Some products are manufactured
for us to our own design and marketed on a private label basis .
Industrial products accounted for 14%, 11%, and 9% of our net sales in 2013,
2012 and 2011, respectively.
Recent developments
The Company’
s Board of Directors, in August 2013, approved the expansion of the administrative and back office services that the new
European shared services center would offer to certain of the Company’
s operating subsidiaries in Europe. As a result of this expansion, the
Company incurred exit, severance and start up costs together with other cost reduction initiatives of approximately $8.2 million in 2013. The
Company anticipates incurring workforce reduction and exit costs and recruitment costs of approximately $8.5 million through the end of 2014.
This amount includes approximately $8.0 million for workforce reduction costs and approximately $0.5 million in other tax, legal and recruiting
fees. The Company anticipates that all of these costs will result in future cash expenditures which will be incurred through the end of 2014. Also
during 2013, the Company closed five of its retail stores resulting in charges for lease costs and severances of approximately $7.5 million.
See Note 12 to the Consolidated Financial Statements included in Item 15 of this Form 10-
K for additional financial information about our
business s 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 1949. Our headquarters office is located at 11 Harbor Park Drive, Port Washington, New York.
Products
We offer hundreds of thousands of 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.
ICT products offered by our Technology Products segment include: computing products such as laptops, desktops and tablets; computer
components and accessories; commercial and home networking; and software. CE products include TV and video; audio; cameras and
surveillance; GPS; cell phones; video games and toys; home and electronics accessories.
MRO products offered by our Industrial Products segment include material handling; storage and shelving; workbench and shop desks;
packaging and supplies; furniture and office; foodservice and appliances; janitorial and maintenance; tools and instruments; fasteners and
hardware; motors and power transmission; HVAC/R and fans; electrical and bulbs; plumbing supplies; and safety and medical items.
4
Table of Contents
• risks associated with delivery of merchandise to customers by utilizing common delivery services
• borrowing costs or availability
• pending or threatened litigation and investigations
• the availability of key personnel
• the continuation of key vendor relationships
• the ability to maintain satisfactory credit arrangements