CompUSA 2009 Annual Report Download - page 1

Proxy Statement and
2009 Annual Report to Stockholders
Dear Fellow Stockholders,
In 2009 Systemax delivered all-time record revenues and solid bottom line results despite a business environment that was the
most challenging in several generations. We did this by executing on sales growth opportunities that were available to Systemax
as a financially strong company, while rationalizing our expenses with focused cost reduction initiatives that will not impact our
future growth. Throughout the year we strategically invested in areas that support our long-term growth strategy, including
investing in our sales force and B2B operations, improving our e-Commerce sites, enhancing our in-store consumer experience
and expanding our retail store footprint.
History has proven that challenging markets present unprecedented growth opportunities – and that was certainly the case for
Systemax in 2009. In May we acquired one of the most iconic brands in U.S. electronics retailing – the Circuit City brand and
select assets (certain trademarks, trade names, internet domain names including www.CircuitCity.com, customer lists and
information, and other intangible assets of Circuit City's e-Commerce business). This acquisition, coupled with our expanding
CompUSA store footprint, our innovative Retail 2.0 initiative and our industry leading TigerDirect e-Commerce business,
cemented our position as a leader in the consumer electronics retail market. Additionally, in September we acquired WStore
Europe, a supplier of business IT products, which significantly strengthened our France and U.K. operations. We believe these
strategic steps further strengthen our business and ability to drive future growth.
Below I outline our 2009 financial results as well as the progress we made on a number of key initiatives in our business segments.
Consolidated Result For Fiscal 2009
• Grew revenues by 4% to over $3.2 billion, an all time record;
• Delivered operating income of $73 million, and net income of $46 million, or $1.24 per diluted share;
• Paid a special dividend of $0.75 per share;
• Maintained high working capital of more than $252 million as of December 31, 2009;
• Increased short-term debt by approximately $15 million primarily revolving debt assumed as part of the WStore
acquisition;
• Maintained high availability of liquidity with an undrawn credit facility of $120 million and total cash and available
liquidity of over $150 million; and
• Grew total stockholders’ equity to a record $365 million.
While these results would be characterized as very good in a normalized economy, they are most impressive given the prevailing
economic environment. Systemax continues to prove itself to be a strong company, with highly recognized and valuable brands
and a loyal customer base.
Consumer Channels
On the consumer front, our operations performed well, with channel sales up over 12% compared to 2008. This growth was aided
by our expanding retail store footprint, one of our key growth initiatives. At the end of the year, we had 34 retail stores open and
operating in North America. During 2009 we opened five new CompUSA stores and entered several important markets, including
Delaware and Houston, Texas. Our strategy is to expand in the large metropolitan areas where we already maintain a presence and
in new markets that can support standalone destination stores. Our philosophy has been and will continue to be about opening
stores at a pace and in markets that will add to our long-term growth and profitability. We also continued to innovate and rollout
the Retail 2.0 platform – our pioneering concept, which empowers customers and revolutionizes how they shop for consumer
electronics – to the majority of our stores. Customer response to Retail 2.0 has been very positive, as this shopping format enhances
the in-store experience with interactive data and media previously only available online.