Exhibit 99.1
FOR IMMEDIATE RELEASE
INVESTOR CONTACT:
Steven M. Goldschein
516 608-7000
SYSTEMAX REPORTS RESTATED 2004 RESULTS
PORT WASHINGTON, NY, September 9, 2005 - Systemax Inc. (NYSE:SYX), a leading distributor and manufacturer of PC hardware, related computer products and industrial products in North America and Europe, today announced its restated results for the year ended December 31, 2004, including each of the four quarters of 2004, and the restatement of opening retained earnings. Net income for the year ended December 31, 2004 decreased by $2.0 million from $12.6 million ($.36 per diluted share) as originally reported to $10.6 million ($.30 per diluted share).
On May 11, 2005 the Company reported the discovery of errors in accounting for inventory at its Tiger Direct, Inc. subsidiary which affected the Company’s previously issued consolidated financial statements for the year ended December 31, 2004. The Company immediately commenced and has now completed an internal review of its accounting for the year ended December 31, 2004, resulting in the restatement. The Company also determined during its internal review of its 2004 results that, in addition to the corrections for errors in accounting for inventory, revenue that had been recognized at time of shipment based upon FOB shipping point terms should have been recognized at time of receipt by customers, when title and risk of loss both transferred. The effect of this correction is included in the restated results.
The Company is currently in the process of preparing an amended Form 10-K to reflect the restated results. Following issuance of the amended Form 10-K, the Company will commence preparation of its Forms 10-Q for the first and second quarters of 2005.
The tables below set forth the restated and the applicable original results for each of the periods and balance sheet as of December 31, 2004.
Consolidated Statements of Operations
(In thousands, except per common share Year Ended Quarter 1 Quarter 2 Quarter 3 Quarter 4
amounts) Dec. 31, 2004 2004 2004 2004 2004
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As restated:
Net sales $1,926,523 $482,883 $433,267 $457,984 $552,389
Cost of sales 1,639,439 405,825 365,740 386,735 481,139
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Gross profit 287,084 77,058 67,527 71,249 71,250
Selling, general 267,467 69,617 65,074 67,442 65,334
& administrative expenses
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Income from operations 19,617 7,441 2,453 3,807 5,916
Interest and other expense, net 2,443 647 426 715 655
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Income before provision for income taxes 17,174 6,794 2,027 3,092 5,261
Provision for income taxes 6,601 2,719 1,965 1,759 158
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Net income $10,573 $4,075 $62 $1,333 $5,103
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Net income per common share - diluted
$.30 $.12 $.00 $.04 $.14
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As originally reported:
Net sales $1,927,835 $485,736 $430,990 $460,271 $550,838
Cost of sales 1,637,452 411,597 363,854 387,786 474,215
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Gross profit 290,383 74,139 67,136 72,485 76,623
Selling, general 267,467 69,617 65,074 67,442 65,334
& administrative expenses
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Income from operations 22,916 4,522 2,062 5,043 11,289
Interest and other expense, net 2,443 647 426 715 655
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Income before provision for income taxes 20,473 3,875 1,636 4,328 10,634
Provision for income taxes 7,923 1,940 1,441 2,155 2,387
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Net income $12,550 $1,935 $195 $ 2,173 $8,247
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Net income per common share - diluted $.35 $.05 $.01 $.06 $.23
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Consolidated Balance Sheet - December 31, 2004
(In thousands)
ASSETS As originally reported As restated
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CURRENT ASSETS
Cash, and cash equivalents $ 36,257 $ 36,257
Accounts receivable, net 153,724 137,706
Inventories, net 176,227 188,006
Prepaid expenses and other current assets 24,888 24,888
Deferred tax assets - current 8,812 9,590
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Total Current Assets 399,908 396,447
PROPERTY AND EQUIPMENT , net 65,563 65,563
DEFERRED TAX ASSETS - NON CURRENT 18,268 18,645
OTHER ASSETS 561 561
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TOTAL ASSETS $ 484,300 $ 481,216
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES:
Current portion of long-term debt and notes payable $ 16,560 $ 16,560
to bank Accounts payable
161,864 163,786
Accrued expenses and other current liabilities
53,242 53,242
Accrued taxes payable
7,514 6,397
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Total Current Liabilities 239,180 239,985
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LONG-TERM DEBT 17,099 17,099
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OTHER NON-CURRENT LIABILITIES 1,505 1,505
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SHAREHOLDERS' EQUITY:
Common stock 382 382
Treasury stock (44,630) (44,630)
Additional paid-in capital 180,530 180,640
Retained earnings (1) 91,307 87,479
Accumulated other comprehensive income, net of tax 4,093 3,922
Unearned restricted stock compensation (5,166) (5,166)
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Total Shareholders' Equity 226,516 222,627
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 484,300 $ 481,216
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NOTE: (1) Includes the impact of the restatement for the correction related to the timing of revenue recognition which decreased opening retained earnings in 2002 by $1.8 million.
| Forward-Looking Statements |
| This press release contains forward-looking statements about the Company’s performance. These statements are based on management’s estimates, assumptions and projections and are not guarantees of future performance. The Company assumes no obligation to update these statements. Actual results may differ materially from results expressed or implied in these statements as the result of risks, uncertainties and other factors including, but not limited to: (a) unanticipated variations in sales volume, (b) economic conditions and exchange rates, (c) actions by competitors, (d) the continuation of key vendor relationships, (e) the ability to maintain satisfactory loan agreements with lenders, (f) risks associated with the delivery of merchandise to customers utilizing common carriers, (g) the operation of the Company’s management information systems, and (h) unanticipated legal and administrative proceedings. Please refer to the Forward Looking Statements section contained in Item 7 of the Company’s Form 10-K for a more detailed explanation of the inherent limitations in such forward-looking statements. |
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