Circuit City 2001 Annual Report Download

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SYSTEMAX INC
FORM 10-K
(Annual Report)
Filed 04/01/02 for the Period Ending 12/31/01
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
    ... 12/31/01 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://www.edgar-online.com © Copyright 2008, EDGAR Online, Inc. All...

  • Page 2
    ...13792 SYSTEMAX INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) 22 HARBOR PARK DRIVE PORT WASHINGTON, NEW YORK (Address of principal executive offices) 11-3262067 (I.R.S. Employer Identification No.) 11050 (Zip Code...

  • Page 3
    ... Item 1. Business...1 General...1 Recent Developments...1 Products...2 Sales and Marketing...2 Distribution Centers...4 Suppliers...4 Management Information Systems...5 Research and Development...5 Competition and Other Market Factors...5 Employees...7 Environmental Matters...7 Financial Information...

  • Page 4
    ... customer service and prompt order fulfillment. Computers and computer related products accounted for 89% of the Company's net sales in 2001. Systemax markets its products through an integrated system of distinctively branded, full-color direct mail catalogs, proprietary "e-commerce" Internet sites...

  • Page 5
    ... and obtain specific information relating to customer-specific purchasing habits and product needs. INTERNET MARKETING AND SALES In the past several years, the Company has greatly expanded and upgraded its Internet presence. The Company currently has twenty-four ecommerce sites, including WWW...

  • Page 6
    .... EUROPE The Company has sales and/or distribution facilities in eight European countries and a central office near London, England to direct their activities. The central office is responsible for marketing support, catalog production, financial reporting, logistics and computer programming support...

  • Page 7
    ... direct-mail distribution companies and Internet-based resellers. As with PCs, the slowing global economy has led to a highly competitive environment resulting in the overall reduction in retail prices for computer related products which may adversely affect the Company's future revenues and profits...

  • Page 8
    ... future. FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS The Company conducts its business in North America (the United States and Canada) and Europe. The following sets forth the Company's operations in its two geographic markets (in thousands): 2001 EUROPE NET SALES...$564,360 INCOME...

  • Page 9
    ... II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The Company's Common Stock is traded on the New York Stock Exchange under the symbol "SYX". The following table sets forth the high and low closing sales price of the Company's Common Stock as reported on the New York...

  • Page 10
    ...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 to products or services of the Company...

  • Page 11
    ...taxes on direct marketing and e-commerce companies, (v) timely availability of existing and new products, (vi) risks involved with e-commerce, including possible loss of business and customer dissatisfaction if outages or other computer-related problems should preclude customer access to the Company...

  • Page 12
    ...absence of inventory liquidation costs in the PC assembly business which adversely affected 2000. The Company closed one of its computer products distribution warehouses in the fourth quarter of 2001, with the full effect of the cost reduction to be realized in future years. Gross profit in 2001 was...

  • Page 13
    ... advertising costs associated with catalog mailings as the Company's focus continues to shift to relationship sales and decreases in staffing levels in areas other than relationship marketing during the year to adjust to the lower level of incoming business. INCOME (LOSS) FROM OPERATIONS The Company...

  • Page 14
    ... June 2001, the Company entered into a $70,000,000 revolving credit agreement with a group of financial institutions to provide for borrowings in the United States. The borrowings are secured by all of the domestic accounts receivable and inventories of the Company and the Company's shares of stock...

  • Page 15
    ...the years presented. REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE. The Company recognizes sales upon shipment of products to customers since title passes upon shipment. Reserves for estimated returns and allowances are provided when sales are recorded based on historical experience and current trends...

  • Page 16
    ... 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 incorporated herein by reference to the Consolidated Financial Statements filed with this report; see Item 14 of Part IV. ITEM 9. CHANGES...

  • Page 17
    ... between Tiger Direct, Inc. and Keystone Miami Property Holding Corp. (Miami facility) 5 Royalty Agreement dated June 30, 1986 between the Company and Richard Leeds, Bruce Leeds and Robert Leeds, and Addendum thereto 1 Form of 1995 Stock Plan for Non-Employee Directors 3* Consulting Agreement dated...

  • Page 18
    ... Micro Corp. and the Company 6 Employment Agreement dated as of December 12, 1997 between the Company and Steven M. Goldschein 4* Loan and Security Agreement, dated June 13, 2001, between The Chase Manhattan Bank (as Lender and Agent) and TransAmerica Business Capital Corporation (as Lender and Co...

  • Page 19
    ... caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized in Port Washington, New York on the 27th day of March, 2002. SYSTEMAX INC. By: /s/ RICHARD LEEDS ...Richard Leeds Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange...

  • Page 20
    ... and 2000 and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these...

  • Page 21
    SYSTEMAX INC. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2001 AND 2000 (IN THOUSANDS, EXCEPT FOR SHARE DATA) 2001 ---ASSETS CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other current assets Income taxes receivable Deferred income tax benefit Total...

  • Page 22
    ... INTEREST AND OTHER INCOME INTEREST EXPENSE INCOME (LOSS) BEFORE INCOME TAXES PROVISION (BENEFIT) FOR INCOME TAXES NET INCOME (LOSS) NET INCOME (LOSS) PER COMMON SHARE: BASIC DILUTED $ .02 02 =========== $ (1.19 1.19 $ 1.01 1.01 =========== See notes to consolidated financial statements.

  • Page 23
    ... YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (IN THOUSANDS) Accumulated Common Stock Other Additional Comprehensive Treasury Number of Paid-in Retained Loss Stock Comprehensive Shares Amount Capital Earnings Net of Tax At Cost Income (Loss 36,128 $ 382 $176,743 $138,456 $ (91) $(28,604) BALANCES...

  • Page 24
    ... net Charges associated with the impairment of certain long lived assets Provision for deferred income taxes Provision for returns and doubtful accounts Loss on abandonment Changes in certain assets and liabilities: Accounts receivable Inventories Prepaid expenses and other current assets Income tax...

  • Page 25
    ...value. Unrealized holding gains and losses are not significant for any of the years presented. REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE - The Company recognizes sales of products, including shipping revenue, at the time of shipment. Accounts receivable are shown in the consolidated balance sheets...

  • Page 26
    ... goodwill associated with a number of small acquisitions made during the previous few years. NET INCOME (LOSS) PER COMMON SHARE - The Company calculates net income (loss) per share in accordance with Statement of Financial Accounting Standard ("SFAS") 128, "Earnings Per Share". Net income (loss) per...

  • Page 27
    ...a $70,000,000 revolving credit agreement with a group of financial institutions which provides for borrowings in the United States. The borrowings are secured by all of the domestic accounts receivable and inventories of the Company and the Company's shares of stock in its domestic subsidiaries. The...

  • Page 28
    ... to directors of the company who are not 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...

  • Page 29
    ... income tax expense (benefit) and the computed income tax expense based on the Federal statutory corporate rate is as follows (in thousands): Year Ended December 31 2001 Income tax at Federal statutory rate $ 365 State and local income taxes, net of federal tax benefit 145 Foreign operating losses...

  • Page 30
    ... warehouse facilities and equipment which expire at various dates through September 2013. The Company currently leases two facilities in New York from entities owned by the Company's three principal stockholders/senior executives. At December 31, 2001 future minimum annual lease payments for related...

  • Page 31
    ... monitored for sales trends and profitability in these subcategories. Products are marketed through an integrated system of direct mail catalogs, a network of major account sales representatives and proprietary e-commerce Internet web-sites. Financial information relating to the Company's operations...

  • Page 32
    ...State of Delaware ("SMI"), GLOBAL COMPUTER SUPPLIES INC. (successor by merger to Continental Dynamics Corp.), a corporation organized under the laws of the State of New York ("GCS"), GLOBAL EQUIPMENT COMPANY, INC., a corporation organized under the laws of the State of New York ("GEC"), TIGER DIRECT...

  • Page 33
    ... WHEREOF, this Amendment No. 2 and Consent has been duly executed as of the day and year first written above. SYSTEMAX INC. By: /S/ STEVEN M. GOLDSCHEIM Name: Steven M. Goldschein Title: Senior Vice President SYSTEMAX MANUFACTURING INC. GLOBAL COMPUTER SUPPLIES INC. GLOBAL EQUIPMENT COMPANY, INC.

  • Page 34
    TIGER DIRECT, INC. DARTEK CORPORATION NEXEL INDUSTRIES, INC. MISCO AMERICA INC. SYSTEMAX RETAIL SALES INC. PAPIER CATALOGUES, INC. CATALOG DATA SYSTEMS, INC. MILLENNIUM FALCON CORP. TEK SERV INC. B.T.S.A., INC. KEYBOARDMALL.COM INC. By: /S/ STEVEN M. GOLDSCHEIM Name: Steven M. Goldschein Title: ...

  • Page 35
    ...State of Delaware ("SMI"), GLOBAL COMPUTER SUPPLIES INC. (successor by merger to Continental Dynamics Corp.), a corporation organized under the laws of the State of New York ("GCS"), GLOBAL EQUIPMENT COMPANY, INC., a corporation organized under the laws of the State of New York ("GEC"), TIGER DIRECT...

  • Page 36
    ... day and year first written above. SYSTEMAX INC. By: /S/ STEVEN M. GOLDSCHEIN Name: Steven M. Goldschein Title: Senior Vice President SYSTEMAX MANUFACTURING INC. GLOBAL COMPUTER SUPPLIES INC. GLOBAL EQUIPMENT COMPANY, INC. TIGER DIRECT, INC. DARTEK CORPORATION NEXEL INDUSTRIES, INC. MISCO AMERICA...

  • Page 37
    Its: ------------------------------SENIOR VICE PRESIDENT ----------------------------- GMAC COMMERCIAL CREDIT LLC, as Lender /S/ BURT Rubenstein ------------------------------Its: SR. VICE PRESIDENT ----------------------------By:

  • Page 38
    .... WITNESS THE SEAL OF THE CORPORATION AND THE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS. DATED SYSTEMAX INC. CORPORATE SEAL 1995 DELAWARE VICE CHAIRMAN, PRESIDENT OF DOMESTIC OPERATIONS COUNTERSIGNED AND REGISTERED AMERICAN STOCK TRANSFER & TRUST COMPANY TRANSFER AGENT AND REGISTRAR CHAIRMAN...

  • Page 39
    ... 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 40
    ... Misco America Inc. (a Delaware corporation) 5. Tiger Direct Inc. (a Florida corporation) 6. Systemax Manufacturing Company Inc. (a Delaware corporation) 7. Systemax Retail Sales Inc. (a Delaware corporation) FOREIGN SUBSIDIARIES 1. Misco Germany Inc. (a New York corporation) 2. Misco Italy Computer...

  • Page 41
    ... ACCOUNTS We hereby consent to the incorporation by reference in Registration Nos. 333-21489 and 333-21491 on Forms S-8 of our report dated March 5, 2002 appearing in this Annual Report on Form 10-K of Systemax Inc. for the year ended December 31, 2001. /s/ Deloitte & Touche LLP New York, New York...