Circuit City 1999 Annual Report Download

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SYSTEMAX INC
FORM 10-K
(Annual Report)
Filed 03/30/00 for the Period Ending 12/31/99
Address 11 HARBOR PARK DR
PORT WASHINGTON, NY 11050
Telephone 5166087000
CIK 0000945114
Symbol SYX
SIC Code 5961 - Catalog and Mail-Order Houses
Industry Retail (Catalog & Mail Order)
Sector Services
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2008, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    ... FORM 10-K (Annual Report) Filed 03/30/00 for the Period Ending 12/31/99 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 11 HARBOR PARK DR PORT WASHINGTON, NY 11050 5166087000 0000945114 SYX 5961 - Catalog and Mail-Order Houses Retail (Catalog & Mail Order) Services 12/31 http...

  • Page 2
    ...Address of principal executive offices) 11-3262067 (I.R.S. Employer Identification No.) 11050 (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (516) 608-7000 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NAME OF EACH EXCHANGE ON WHICH REGISTERED New York Stock Exchange...

  • Page 3
    ... OF CONTENTS Part I Item 1. Business...1 General...1 Recent Developments...2 Products...2 Sales and Marketing...2 Distribution Centers...5 Suppliers...5 Management Information Systems...5 Research and Development...6 Competition...6 Employees...7 Environmental Matters...8 Financial Information About...

  • Page 4
    ... and computer related products accounted for 87% of the Company's net sales in 1999. Systemax markets its products through an integrated system of distinctively branded, full-color direct mail catalogs, proprietary "e-commerce" Internet sites and personalized "relationship marketing" to business...

  • Page 5
    ... ("EDI") ordering and customized billing services, customer savings reports and stocking of specialty items specifically requested by customers. The goal of the relationship marketing sales force is to increase the purchasing productivity of current customers and to actively solicit newly targeted...

  • Page 6
    ...office is responsible for marketing support, catalog production, financial reporting, logistics and computer programming support. In addition, each European branch has a full service sales and distribution center to process orders and reports to the respective country manager who has ultimate profit...

  • Page 7
    ... Company operates information systems that allow centralized management of key functions. These include communication links between distribution centers, inventory and accounts receivable management, purchasing, pricing, sales and distribution, and the preparation of daily operating control reports...

  • Page 8
    ..., including 4,140 full-time and 171 part-time employees, of whom 3,175 were in North America and 1,136 were in Europe. None of the Company's employees is represented by a labor union, except for approximately 50 warehouse employees in New York who are covered by an "open-shop" agreement with the...

  • Page 9
    ... LOCATION Headquarters, Sales and Distribution Center, Catalog Operations(1)...Port Washington, NY Sales and Distribution Center(1)...Suwanee, GA Sales and Distribution Center...Compton, CA Sales and Distribution Center...Naperville, IL Sales Center...Holmdel, NJ Sales and Distribution Center...

  • Page 10
    ...anticipate paying dividends on its Common Stock in the foreseeable future. See "Certain Relationships and Related Transactions" for a description of the Company's historical distributions. ITEM 6. SELECTED FINANCIAL DATA. The following selected financial information is qualified by reference to, and...

  • Page 11
    ... for PCs, improved productivity in relationship marketing and the full year effect of the inclusion of sales from Midwest Micro Corp., acquired at the end of the third quarter of 1997. The Company also began to benefit from orders received through its various Internet web-sites. Sales attributable...

  • Page 12
    ... and its lines of credit. These capital expenditures are primarily for the purchase of a new distribution center in Georgia and the acquisition of information technology systems and other fixed assets. YEAR 2000 COMPLIANCE Based on current information, management believes that the Company is now...

  • Page 13
    ...of revenue, income or loss and capital expenditures, statements regarding future operations, financing needs, compliance with financial covenants in loan agreements, plans for acquisition or sale of assets or businesses and consolidation of operations of newly acquired businesses, and plans relating...

  • Page 14
    ...the U.S. dollar, the Company's sales or costs could still be adversely affected by changes in those exchange rates. As of December 31,1999, the Company had no outstanding forward exchange contracts. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The information required by Item 8 of Part II is...

  • Page 15
    ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K. (a) 1. The Consolidated Financial Statements of Systemax Inc. Reference Independent Auditors' Report Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Shareholders' Equity ...

  • Page 16
    ... on Form 8-K dated May 18, 1999. 8 Incorporated herein by reference to the Company's annual report on Form 10-K for the year ended December 31, 1998. 9 Incorporated herein by reference to the Company's report on Form 10-Q for the quarterly period ended September 30, 1999. * Management contract or...

  • Page 17
    ... D. ROSENTHAL Robert D. Rosenthal /s/ STACY DICK Stacy Dick Worldwide Computer Sales and Marketing Senior Vice President and Chief Financial Officer (Principal Financial Officer) Vice President and Controller (Principal Accounting Officer) March 27, 2000 March 27, 2000 Director March 27...

  • Page 18
    ... balance sheets of Systemax Inc. and its subsidiaries, (the "Company"), as of December 31, 1999 and 1998 and the related consolidated statements of net income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1999. These financial statements...

  • Page 19
    SYSTEMAX INC. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1999 AND 1998 (IN THOUSANDS, EXCEPT FOR SHARE DATA) 1999 ---ASSETS CURRENT ASSETS: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Deferred income tax benefit Total ...

  • Page 20
    ... INCOME FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (IN THOUSANDS, EXCEPT PER COMMON SHARE AMOUNTS) 1999 ---$ 1,754,472 1,439,947 ---------314,525 1998 ---$ 1,435,654 1,147,098 ----------288,556 1997 ---1,145,388 NET SALES COST OF SALES $ 879,846 265,542 GROSS PROFIT SELLING, GENERAL...

  • Page 21
    ... STATEMENTS OF SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (IN THOUSANDS) COMMON STOCK NUMBER OF SHARES AMOUNT BALANCES, JANUARY 1, 1997 Change in cumulative translation adjustment Issuance of shares as partial consideration for the acquisition of the net assets...

  • Page 22
    ..., net Charges associated with the impairment of certain long lived assets Provision for deferred income taxes Provision for returns and doubtful accounts Changes in certain assets and liabilities: Accounts receivable Inventories Prepaid expenses and other current assets Accounts payable and...

  • Page 23
    ... The financial statements of the foreign entities are translated into U.S. dollars, the reporting currency, using year-end exchange rates for consolidated balance sheet items and average exchange rates for the consolidated statements of net income items. The translation differences are made directly...

  • Page 24
    ... was earned in 1998 (paid in 1999) and were recorded as increases to the purchase price. During 1998 the estimated fair values of the net assets recorded at the date of acquisition for Infotel, Inc. were further evaluated by the Company and, in accordance with Statement of Financial Accounting...

  • Page 25
    ... employees of the Company or its affiliates. All options granted under this plan will have a ten year term from grant date and are immediately exercisable. A maximum of 100,000 shares may be granted for awards under this plan. This plan will terminate the day following the tenth annual stockholders...

  • Page 26
    ... plan. No award shall be granted under this plan after December 31, 2009. A total of 424,700 options were outstanding under this plan as of December 31, 1999. The Company accounts for these plans in accordance with Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees...

  • Page 27
    ...50, which represented the market price of the common stock at such date. All other terms of these options remained unchanged. 7. INCOME TAXES The provision for income taxes consists of the following (in thousands): YEAR ENDED DECEMBER 31 Current: Federal State Foreign Deferred Total 1999 ------1998...

  • Page 28
    ...MATTERS LEASES - The Company is obligated under operating lease agreements for the rental of certain office and warehouse facilities and equipment which expire at various dates through December 2013. At December 31, 1999 future minimum annual lease payments for related and third-party leases were as...

  • Page 29
    ... are marketed through an integrated system of direct mail catalogs, a network of major account sales representatives and proprietary ecommerce Internet web-sites. Financial information relating to the Company's operations by geographic area was as follows (in thousands): NET SALES 1999 ---$1,263...

  • Page 30
    Net sales...Gross profit...Net income...Net income per common share: Basic and diluted... $358,358 $ 75,369 $ 12,865 $.34 $330,452 $ 67,056 $ 7,619 $.20 $359,771 $ 71,604 $ 9,561 $.26 $387,073 $ 74,527 $ 11,207 $.31 *******

  • Page 31
    ...report on Form 8-K dated May 18, 1999. 8 Incorporated herein by reference to the Company's annual report on Form 10-K for the year ended December 31, 1998. 9 Incorporated herein by reference to the Company's report on Form 10-Q for the quarterly period ended September 30, 1999. * Management contract...

  • Page 32
    .... WITNESS THE SEAL OF THE CORPORATION AND THE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS. [NAME CHANGED TO SYSTEMAX INC.] DATED VICE CHAIRMAN, PRESIDENT OF DOMESTIC OPERATIONS CHAIRMAN, CHIEF EXECUTIVE OFFICER COUNTERSIGNED AND REGISTERED: THE BANK OF NEW YORK TRANSFER AGENT AND REGISTRAR BY...

  • Page 33
    ... above list. FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE _____ SHARES OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN...

  • Page 34
    ...SUBSIDIARIES OF SYSTEMAX INC. A. DOMESTIC SUBSIDIARIES 1. Global Computer Supplies Inc. (a New York corporation) 2. Continental Dynamics Corp. (a New York corporation) d/b/a Global Computer Supplies (NY) d/b/a Global Industrial Equipment (NY, GA) d/b/a Global Business Furniture (NY, GA) d/b/a Global...

  • Page 35
    ... by reference in Registration Statement No.'s 333-21489 and 333-21491 of Systemax Inc. on Form S-8 of our report dated February 21, 2000 appearing in this Annual Report on Form 10-K of Systemax Inc. for the year ended December 31, 1999. /s/ Deloitte & Touche LLP New York, New York March 23, 2000

  • Page 36
    ... SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000 PERIOD TYPE FISCAL YEAR END PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES...