Circuit City 2009 Annual Report Download - page 6

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Table of Contents
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”) and related products that we assemble ourselves and sell on a private label basis,
substantially all of our products are manufactured by other companies. Technology Products accounted for 94%, 92% and 92% of our net sales
in 2009, 2008, and 2007, respectively.
Our Industrial Products segment sells a wide array of material handling equipment, storage equipment and consumable industrial items 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 6%, 8% and 8% of our net sales in 2009, 2008, and
2007, respectively.
In June, 2009, the Company announced plans to exit the Software Solutions segment as the result of economic conditions and difficulties in
marketing the segment’s products successfully (See Note 7 to the Consolidated Financial Statements included in Item 15 of this Form 10-K. ).
Our Software Solutions segment participated in the emerging market for on-demand, web-based business software applications through the
marketing of our PCS ProfitCenter Software ™ application. As of December 31, 2009, substantially all of the third party business activities of
the Software Solutions segment had been ended.
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 1949. Our headquarters office is located at 11 Harbor Park Drive, Port Washington, New York.
Recent Developments
On September 18, 2009, the Company acquired WStore Europe SA and its subsidiaries, (“WStore”),
a European supplier of business IT products
and software solutions with operations in France and the United Kingdom. The purchase price (after giving effect to the conversion of Euros to
U.S. dollars) was approximately $4.4 million in cash, $2.2 million of which was placed into an escrow account for one year to secure the sellers’
indemnification obligations under the purchase agreement. This acquisition expands the Company’s business in France and, to a lesser extent,
the United Kingdom.
On April 5, 2009, the Company acquired certain intellectual property and ecommerce assets owned Circuit City Stores, Inc. and Circuit City
Stores West Coast, Inc. (‘the Sellers”) for $14.0 million in cash. In addition, the Company will pay the Sellers a royalty based on a percentage of
sales over a thirty month period dependent upon levels of sales achieved from the acquired assets, with a minimum payment of $3.0 million.
This acquisition expands the Company’s ecommerce market.
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.
4