Global Industrial (GIC) 10-Q 8 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	SYSTEMAX INC
Entity Central Index Key	945,114
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		37,174,265
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash	$ 141	$ 184.5
Accounts receivable, net	186.3	174.3
Inventories	130.9	131.5
Prepaid expenses and other current assets	5.5	3.8
Total current assets	463.7	494.1
Property, plant and equipment, net	14.7	15.1
Deferred income taxes	26.2	26.2
Goodwill and intangibles	14.2	14.5
Other assets	1.5	1.5
Total assets	520.3	551.4
Current liabilities:
Accounts payable	202.8	196.1
Dividend payable	0	55.7
Accrued expenses and other current liabilities	70.6	64
Total current liabilities	273.4	315.8
Deferred income tax liability	0.1	0.1
Other liabilities	22.8	23.7
Total liabilities	296.3	339.6
Commitments and contingencies
Shareholders’ equity:
Preferred stock	0	0
Common stock	0.4	0.4
Additional paid-in capital	185.8	186.5
Treasury stock	(20.8)	(21.8)
Retained earnings	55.3	44.8
Accumulated other comprehensive income	3.3	1.9
Total shareholders’ equity	224	211.8
Total liabilities and shareholders’ equity	$ 520.3	$ 551.4

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Net sales	$ 355.2	$ 302.5
Cost of sales	258.5	220.7
Gross profit	96.7	81.8
Selling, distribution & administrative expenses	76.6	69.4
Operating income from continuing operations	20.1	12.4
Interest and other (income) expense, net	0.1	(0.2)
Income from continuing operations before income taxes	20	12.6
Provision for income taxes	5.8	2.3
Net income from continuing operations	14.2	10.3
Income (loss) from discontinued operations, net of tax	0.4	(28.8)
Net income (loss)	$ 14.6	$ (18.5)
Net income per common share from continuing operations:
Basic (in dollars per share)	$ 0.38	$ 0.28
Diluted (in dollars per share)	0.37	0.28
Net income (loss) per common share from discontinued operations:
Basic (in dollars per share)	0.01	(0.78)
Diluted (in dollars per share)	0.01	(0.78)
Net income (loss) per common share:
Basic (in dollars per share)	0.39	(0.50)
Diluted (in dollars per share)	$ 0.38	$ (0.50)
Weighted average common and common equivalent shares:
Basic (in shares)	37.2	37.2
Diluted (in shares)	37.9	37.2
Dividends declared (in dollars per share)	$ 0.11	$ 0.05

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 14.6	$ (18.5)
Other comprehensive income:
Foreign currency translation	1.4	0.7
Total comprehensive income (loss)	$ 16	$ (17.8)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Income from continuing operations	$ 14.2	$ 10.3
Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities:
Depreciation and amortization	1.2	1.4
Provision for returns and doubtful accounts	(0.2)	0.1
Compensation expense related to equity compensation plans	0.4	0.4
Provision for deferred taxes	0.2	0
Changes in operating assets and liabilities:
Accounts receivable	(9.9)	(2)
Inventories	1.6	(0.3)
Prepaid expenses and other current assets	(2.3)	(0.8)
Income taxes payable	5.2	1.6
Accounts payable	4.4	(13.2)
Accrued expenses, other current liabilities and other liabilities	0.4	2.1
Net cash provided by (used in) operating activities from continuing operations	15.2	(0.4)
Net cash used in operating activities from discontinued operations	1.2	(1.5)
Net cash provided by (used in) operating activities	16.4	(1.9)
Cash flows from investing activities:
Purchases of property, plant and equipment	(0.5)	(1)
Net cash used in investing activities from continuing operations	(0.5)	(1)
Net cash used in investing activities from discontinued operations	0	(0.1)
Net cash used in investing activities	(0.5)	(1.1)
Cash flows from financing activities:
Dividends paid	(59.8)	(1.8)
Proceeds from issuance of common stock	0.8	0
Payment of payroll taxes on stock-based compensation through shares withheld	(0.9)	0
Repayments of capital lease obligations	0	(0.1)
Net cash used in financing activities	(59.9)	(1.9)
Effects of exchange rates on cash	0.5	(0.3)
Net decrease in cash	(43.5)	(5.2)
Cash – beginning of period	184.5	149.7
Cash – end of period	$ 141	$ 144.5

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions	Total	Common Stock	Additional Paid-in Capital	Treasury Stock, At Cost	Retained Earnings	Accumulated Other Comprehensive Income
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Change in cumulative translation adjustment	$ 1.4					$ 1.4
Beginning Balance (in shares) at Dec. 31, 2017		37,094
Beginning Balance at Dec. 31, 2017	211.8	$ 0.4	$ 186.5	$ (21.8)	$ 44.8	1.9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	0.4		0.4
Issuance of restricted stock (in shares)		38
Issuance of restricted stock	0		(0.5)	0.5
Stock withheld for employee taxes (in shares)		(31)
Stock withheld for employee taxes	(0.9)		(0.5)	(0.4)
Proceeds from issuance of common stock (in shares)		72
Proceeds from issuance of common stock	0.8		(0.1)	0.9
Dividends declared	(4.1)				(4.1)
Net income	14.6				14.6
Ending Balance (in shares) at Mar. 31, 2018		37,173
Ending Balance at Mar. 31, 2018	$ 224	$ 0.4	$ 185.8	$ (20.8)	$ 55.3	$ 3.3

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements of the Company and its wholly-owned subsidiaries are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America are not required in these interim financial statements and have been condensed or omitted. All significant intercompany accounts and transactions have been eliminated in consolidation. As previously disclosed in the second quarter of 2017 and for all periods presented, the Company modified the presentation of certain costs associated with operating our distribution centers as well as with our Purchasing and Product Development personnel. Historically these costs had been included as a component of cost of sales and are now included within Selling, Distribution, and Administrative expenses (“SD&A”). For the first quarter ended March 31, 2017 , the costs reclassified from cost of sales to SD&A, included within continuing operations, was $11.0 million . On March 24, 2017, certain wholly owned subsidiaries of the Company executed a definitive securities purchase agreement (the “Purchase Agreement”) with certain special purpose companies formed by Hilco Capital Limited (“Hilco” and together with its management team partners, “Purchaser”). Pursuant to the Purchase Agreement, Purchaser acquired all of the Company’s interests in Systemax Europe SARL, which includes its subsidiaries, Systemax Business Services K.F.T., Misco UK Limited, Systemax Italy S.R.L., Misco Iberia Computer Supplies S.L., Misco AB, Global Directmail B.V. and Misco Solutions B.V. (collectively, the “SARL Businesses”). The SARL businesses were reported within the Company's European Technology Products Group ("ETG") segment. The transaction closed immediately upon execution of the Purchase Agreement. The Company retained its France technology value added reseller business, which is conducted through its subsidiary, Inmac Wstore S.A.S., which was not part of the sale transaction. The SARL Businesses were sold on a cash-free, debt-free basis; proceeds were nominal. As part of the transaction, the Company retained a 5% residual equity position in the Purchaser’s acquiring entity, HUK 77 Limited, which was accounted for on the cost method, to which no value was ascribed, a $3.3 million note receivable ( $2.2 million balance at December 31, 2017 which was paid in full in January 2018) and provided limited transition services to Purchaser through December 19, 2017 under a transition services agreement. The note receivable was included in accounts receivable, net in the Condensed Consolidated Balance Sheet at December 31, 2017. The sale of the SARL Businesses met the “strategic shift with major impact” criteria as defined under Accounting Standards Update (“ASU”) 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity , which requires disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. Under ASU 2014-08 in order for a disposal to qualify for discontinued operations presentation in the financial statements, the disposal must be a “strategic shift” with a major impact for the reporting entity. If the entity meets this threshold, and other requirements, only the components that were in operation at the time of disposal are presented as discontinued operations. Therefore, the prior year results of the SARL Businesses are included in discontinued operations in the accompanying condensed consolidated financial statements. On September 2, 2016, the Company sold certain assets of its Misco Germany operations which had been reported as part of its ETG segment. As this disposition was not a strategic shift with a major impact as defined under ASU 2014-8, any prior and current year results of the German operations are presented within continuing operations in the condensed consolidated financial statements. On December 1, 2015, the Company sold its NATG operating businesses and began the wind-down of its remaining NATG operations. The sale of the NATG business had a major impact on the Company and therefore met the strategic shift criteria as defined under ASU 2014-08. The NATG components in operation at the time of the sale were the B2B and Ecommerce businesses and three retail stores. Accordingly, these components and any related results of operations will be reflected in discontinued operations. The Company has financial obligations related to leased facilities of its former NATG business of approximately $ 46.0 million . Some of these leased facilities have been sublet and others are being marketed for sublet. The Company has engaged nationally recognized real estate firms to market these facilities and to assist in establishing the reserves the Company carries for these lease obligations. As of March 31, 2018 , the Company has a reserve of $ 13.7 million for these lease obligations. The reserves established consider the total lease obligations of $ 46.0 million , current sublet income streams and projected sublet income streams. On a quarterly basis these reserves are re-evaluated particularly related to the projected sublease income streams. In the first quarter of 2018 , the Company reversed lease reserves of approximately $ 0.2 million for these leased facilities, all of which was recorded in discontinued operations. The Company expects that further adjustment may be needed in the future for facilities that are not yet sublet if current assumptions do not materialize for the real estate markets these facilities are in. In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of the Company as of March 31, 2018 and the results of operations for the three month periods ended March 31, 2018 and 2017 , statements of comprehensive income (loss) for the three month periods ended March 31, 2018 and 2017 , cash flows for the three month periods ended March 31, 2018 and 2017 and changes in shareholders’ equity for the three month period ended March 31, 2018 . The December 31, 2017 condensed consolidated balance sheet has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2017 and for the year then ended included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . The results for the three month period ended March 31, 2018 are not necessarily indicative of the results for the entire year. Systemax manages its business and reports using a 52-53 week fiscal year that ends at midnight on the Saturday closest to December 31. For clarity of presentation herein, fiscal years and quarters are referred to as if they ended on the traditional calendar month. The actual fiscal first quarter ended on March 31, 2018 and April 1, 2017. The first quarters of both 2018 and 2017 included 13 weeks. Recent Accounting Pronouncements Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”). These authorities issue numerous pronouncements, most of which are not applicable to the Company’s current or reasonably foreseeable operating structure. In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The new revenue recognition standard is effective for interim and annual periods beginning on January 1, 2018. The new standard is required to be adopted using either a full-retrospective or a modified-retrospective approach. The Company adopted the new standard using the modified-retrospective approach beginning on January 1, 2018. There was no material impact to total revenues in our consolidated statements of income, accounting policies, business processes, internal controls or disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 related to leases that outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company starting in the first quarter of fiscal 2019. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on the consolidated financial statements. In March 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment. which eliminates the second step from the goodwill impairment test. An entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss cannot exceed the total amount of goodwill allocated to the reporting unit. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the effect of adopting this pronouncement.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2018
Revenue From Contract With Customer [Abstract]
Revenue	Revenue The Company’s revenue is primarily comprised of sales of maintenance, repair and operational (“MRO”) products that are sold by IPG and information and communications technology (“ICT”) products that are sold by ETG. Additionally, both IPG and ETG have revenues from related activities, such as freight and, to a lesser extent, services. The Company recognizes revenue when a sales arrangement with a customer exists through the Company’s invoicing or a contract, the performance obligations have been identified, the transaction price is fixed or determinable and the Company has satisfied its performance obligations. The Company’s standard terms, provided on its invoices as well as on its websites, are included in communications with the customer and have standard payment terms of 30 days. Certain customers may have extended payment terms that have been pre-approved by the Company’s credit department, but none extend longer than 90 days. The Company’s performance obligation is primarily a single obligation to deliver products. The Company’s performance obligations are satisfied when products are transferred to a customer in accordance with agreed upon shipping terms. Certain sales may include product and/or services that are distinct and accounted for as separate performance obligations. The Company’s performance obligations for services are satisfied when the services are rendered. The Company’s total service revenue is immaterial as it accounted for less than 1% of total revenue for the first quarter of 2018. The Company’s revenue is shown as “Net sales” in the accompanying Condensed Statements of Operations and is measured as the determined transaction price, net of any variable consideration primarily rights to return product. The Company has elected to treat shipping and handling revenues as activities to fulfill its performance obligation. Billings for freight and shipping and handling are recorded in net sales and costs of freight and shipping and handling are recorded in cost of sales in the accompanying Condensed Consolidated Statements of Operations. The Company records a contract liability in cases where customers pay in advance of the Company satisfying its performance obligation. The Company did not have any material unsatisfied performance obligations or liabilities as of March 31, 2018. The Company offers customers rights to return product within a certain time, usually 30 days. The Company estimates is sales returns liability quarterly based upon its historical returns rates as a percentage of historical sales for the trailing twelve-month period. The total accrued sales returns liability was approximately $1.9 million at March 31, 2018 and was recorded as a refund liability in Accrued expenses in the accompanying Condensed Consolidated Balance Sheet. Disaggregation of Revenues IPG and ETG serve customers in diverse geographies, which are subject to different economic and industry factors. The Company's presentation of revenue by geography most reasonably depicts how the nature, amount, timing and uncertainty of Company revenue and cash flows are affected by economic and industry factors. The following table presents the Company's revenue by reportable segment and by geography for the three months ended March 31, 2018: Three Months Ended 2018 Net sales: IPG MRO products and industrial supplies-United States $ 202.0 IPG MRO products and industrial supplies-Canada 10.2 ETG Technology products-France 136.9 ETG Technology products-Other Europe 6.1 Consolidated $ 355.2

Dispositions and Special Charge

Dispositions and Special Charges	3 Months Ended
	Mar. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]
Dispositions and Special Charges	Dispositions and Special Charges The Company’s discontinued operations include the results of the SARL Businesses sold in March 2017 and the NATG business sold in December 2015 (See Note 1). In the first quarter of 2018 the Company recorded discontinued operations special charges related to the wind down of the SARL Businesses of $0.1 million for legal and professional fees. These charges required or will require the use of cash. The Company expects that total additional charges related to the wind down of the SARL businesses will be less than $1.0 million . The Company's NATG discontinued operations received $0.7 million in restitution receipts from a former executive of NATG in the first quarter of 2018, reversed lease reserves of approximately $0.2 million related to their leased facilities and recorded legal and professional fees, related to the ongoing restitution proceedings, of $0.1 million . The Company expects that total additional charges related to the sale of the NATG business after this quarter will be between $1.0 million and $2.0 million and that these charges will be presented in discontinued operations. Additional costs may be incurred in NATG for outstanding leased facilities as they are settled or sublet (see Note 1). Most of these anticipated costs will require the use of cash. Amounts that are unpaid at March 31, 2018 are recorded in Accrued expenses and other current liabilities and Other liabilities (long term) in the accompanying condensed consolidated balance sheets. Below is a summary of the impact on net sales, net income (loss) and net income (loss) per share from discontinued operations for the three month periods ended March 31, 2018 and 2017 . A reconciliation of pretax income (loss) of Discontinued operations to the Net Income (loss) of discontinued operations is as follows (in millions): Three Months Ended 2018 2017 Net sales $ 0.0 $ 117.0 Cost of sales 0.0 102.9 Gross profit 0.0 14.1 Selling, distribution & administrative expenses 0.4 18.6 Special charges (0.7 ) 23.9 Operating income (loss) from discontinued operations 0.3 (28.4 ) Interest and other (income) expenses, net (0.2 ) 0.3 Income (loss) from discontinued operations before income taxes 0.5 (28.7 ) Provision for income taxes 0.1 0.1 Net income (loss) from discontinued operations $ 0.4 $ (28.8 ) Net income (loss) per share – basic and diluted $ 0.01 $ (0.78 ) Total special charges incurred in the first quarter of 2017, totaled approximately $23.9 million . The combined loss on the sale of the SARL Businesses totaled $ 23.3 million , which included an $8.2 million loss on the sale of net assets, $14.4 million of translation adjustments, and $ 0.7 million of legal, professional and other costs. In addition, NATG discontinued operations incurred approximately $ 0.3 million of special charges primarily related to updating our future lease cash flows and $0.3 million related to the ongoing restitution proceedings against certain former NATG executives. The following table details liabilities related to the sold NATG segment’s leases and other costs and liabilities that remain from the sold Misco Germany business as of March 31, 2018 (in millions): ETG – Lease liabilities and other costs NATG – Lease liabilities and other exit costs Total Balance January 1, 2018 $ 1.2 $ 19.0 $ 20.2 Charged to expense (income) 0.0 (0.2 ) (0.2 ) Paid or otherwise settled 0.0 (5.1 ) (5.1 ) Balance March 31, 2018 $ 1.2 $ 13.7 $ 14.9 .

Net Income (Loss) per Common Sh

Net Income (Loss) per Common Share	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Net Income (Loss) per Common Share	Net Income (Loss) per Common Share Net income per common share - basic was calculated based upon the weighted average number of common shares outstanding during the respective periods presented using the two class method of computing earnings per share. The two class method was used as the Company has outstanding restricted stock with rights to dividend participation for unvested shares. Net income per common share - diluted was calculated based upon the weighted average number of common shares outstanding and included the equivalent shares for dilutive options outstanding during the respective periods, including unvested options. The dilutive effect of outstanding options and restricted stock issued by the Company is reflected in net income per share - diluted using the treasury stock method. Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options. The weighted average number of stock options outstanding included in the computation of diluted earnings per share was 0.5 million and the weighted average number of restricted stock awards included in the computation of diluted earnings per share was 0.2 million for the three months ended March 31, 2018 and a de minimis number for the three months ended March 31, 2017. The weighted average number of stock options outstanding excluded from the computation of diluted earnings per share was de minimis for the three months ended March 31, 2018 and for the three months ended March 31, 2017 , the weighted average number of stock options and restricted awards outstanding excluded from the computation of diluted earnings (loss) per share due to their antidilutive effect was 1.3 million .

Credit Facilities

Credit Facilities	3 Months Ended
	Mar. 31, 2018
Line of Credit Facility [Abstract]
Credit Facilities	Credit Facilities The Company maintains a $75 million secured revolving credit agreement with one financial institution, which has a five year term, maturing on October 28, 2021 and provides for borrowings in the United States. The credit agreement contains certain operating, financial and other covenants, including limits on annual levels of capital expenditures, availability tests related to payments of dividends and stock repurchases and fixed charge coverage tests related to acquisitions. The revolving credit agreement requires that a minimum level of availability be maintained. If such availability is not maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and the inventory advance rate computed as the lesser of 60% or 85% of the net orderly liquidation value (“NOLV”). Borrowings are secured by substantially all of the Borrower’s assets, as defined, including all accounts, accounts receivable, inventory and certain other assets, subject to limited exceptions, including the exclusion of certain foreign assets from the collateral. The interest rate under the amended and restated facility is computed at applicable market rates based on the London interbank offered rate (“LIBOR”), the Federal Reserve Bank of New York (“NYFRB”) or the Prime Rate, plus an applicable margin. The applicable margin varies based on borrowing base availability. As of March 31, 2018 , eligible collateral under the credit agreement was $84.2 million , total availability was $73.5 million , total outstanding letters of credit were $2.4 million , total excess availability was $71.1 million and there were no outstanding borrowings. The Company was in compliance with all of the covenants of the credit agreement in place as of March 31, 2018 .

Segment Information

Segment Information	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Segment Information	Segment Information The Company operates and is internally managed in two reportable business segments— Industrial Products Group (“IPG”) and Europe Technology Products Group (“ETG”), the Company's France operations. Smaller business operations and corporate functions are aggregated and reported as the additional segment – Corporate and Other (“Corporate”). On March 24, 2017, the Company sold its SARL Businesses and its continuing ETG operations only include those in France. IPG sells a wide array of maintenance, repair and operational (“MRO”) products, as well as other industrial and general business supplies, which are marketed in North America. Many 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. ETG sells information and communications technology (“ICT”) products. These products are marketed primarily in France and to a much lesser extent Belgium. Substantially all of these products are manufactured by other companies. The Company’s chief operating decision-maker is the Company’s Chief Executive Officer (“CEO”). The CEO, in his role as Chief Operating Decision Maker (“CODM”), evaluates segment performance based on operating income (loss) from continuing operations. The CODM reviews assets and makes significant capital expenditure decisions for the Company on a consolidated basis only. The accounting policies of the segments are the same as those of the Company. Corporate costs not identified with the disclosed segments are grouped as “Corporate and other expenses”. The IPG and ETG segments sell dissimilar products. IPG products are generally higher in price, lower in volume and higher in product margin. ETG products are generally higher in volume, lower in price and lower in product margin as compared to IPG. This results in higher operating margin for the IPG segment. Each segment incurs specifically identifiable selling, distribution and administrative expenses, with the selling, distribution and administrative expenses for the IPG segment being higher as a percentage of sales than those of the ETG segment as a result of the IPG segment having a business model requiring greater advertising expenditures than the ETG segment, as well as having increased distribution expenses related to the nature of the larger products that are often shipped Less than Truckload (“LTL”). Additionally, the IPG segment’s vendors generally provide less funding to offset its marketing expenses. Financial information relating to the Company’s continuing operations by reportable segment was as follows (in millions): Three Months Ended 2018 2017 Net sales: IPG $ 212.2 $ 190.2 ETG 143.0 112.3 Consolidated $ 355.2 $ 302.5 Operating income (loss): IPG $ 16.3 $ 12.5 ETG 9.3 5.8 Corporate and other expenses (5.5 ) (5.9 ) Consolidated $ 20.1 $ 12.4 Financial information relating to the Company’s continuing operations by geographic area was as follows (in millions): Three Months Ended 2018 2017 Net sales: United States $ 202.0 $ 182.6 France 143.0 112.3 Canada 10.2 7.6 Consolidated $ 355.2 $ 302.5 Revenue is attributed to countries based on the location of the selling subsidiary.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements Financial instruments consist primarily of investments in cash, trade accounts receivable, debt and accounts payable. The Company estimates the fair value of financial instruments based on interest rates available to the Company. At March 31, 2018 and 2017 , the carrying amounts of cash, accounts receivable and accounts payable are considered to be representative of their respective fair values due to their short-term nature. Cash is classified as Level 1 within the fair value hierarchy. The Company’s debt is considered to be representative of its fair value because of its variable interest rate. The fair value of our reporting units with respect to goodwill, non-amortizing intangibles and long-lived assets is measured in connection with the Company’s annual impairment testing. The Company performs a qualitative assessment of goodwill and non-amortizing intangibles to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment shows that the fair value of the reporting unit exceeds its carrying amount, the company is not required to complete the annual two step goodwill impairment test. If a quantitative analysis is required to be performed for goodwill, the fair value of the reporting unit to which the goodwill has been assigned is determined using a discounted cash flow model. A discounted cash flow model is also used to determine fair value of indefinite-lived intangibles using projected cash flows of the intangible. Unobservable inputs related to these discounted cash flow models include projected sales growth, gross margin percentages, new business opportunities, working capital requirements, capital expenditures and growth in selling, distribution and administrative expense. Any excess of a reporting unit's carrying amount over fair value would be charged to impairment expense. Long-lived assets are assets used in the Company’s operations and include definite-lived intangible assets, leasehold improvements, warehouse and similar property used to generate sales and cash flows. Long-lived assets are tested for impairment utilizing a recoverability test. The recoverability test compares the carrying value of an asset group to the undiscounted cash flows directly attributable to the asset group over the life of the primary asset. If the undiscounted cash flows of an asset group is less than the carrying value of the asset group, the fair value of the asset group is then measured. If the fair value is also determined to be less than the carrying value of the asset group, the asset group is impaired.

Income taxes

Income taxes	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income taxes	Income taxes On December 22, 2017, the Tax Cut and Jobs Act ("TCJA") was enacted in the United States. The TCJA significantly changed U.S. corporate tax impacts by, among other things, lowering the corporate tax rate to 21% from 35% effective January 1, 2018, implementing a territorial tax system and imposing a one-time repatriation tax on previously untaxed, accumulated earnings of foreign subsidiaries. As a result of the new tax law, the Securities and Exchange Commission ("SEC") staff issued Staff Accounting Bulletin No. 118 ("SAB 118"). SAB 118 allows companies to record the tax impacts of the new law as provisional amounts during a measurement period of up to one year from the enactment date of the new law. The Company applied SAB118 when accounting for the enactment-date effects of the TCJA for the year ended December 31, 2017 and recorded provisional amounts related to the one-time transition tax for the repatriation of foreign earnings and the revaluation of deferred tax balances. The Company expects to complete its analysis of the historical earnings and profits of all of its foreign subsidiaries and record any adjustment to the provisional amounts within the one year measurement period. As of March 31, 2018, the Company has not completed the analysis for all of the tax effects of the TCJA and has not recorded any adjustments to the amounts recorded at year-end.

Legal Proceedings

Legal Proceedings	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Legal Proceedings	Legal Proceedings The Company and its subsidiaries are from time to time involved in various lawsuits, claims, investigations and proceedings which may include commercial, employment, customer, personal injury, creditors rights and health and safety law matters, as well as VAT tax disputes in European jurisdictions in which it has done business, and which are handled and defended in the ordinary course of business. In addition, the Company is from time to time subjected to various assertions, claims, proceedings and requests for damages and/or indemnification concerning sales channel practices and intellectual property matters, including patent infringement suits involving technologies that are incorporated in a broad spectrum of products the Company sells or that are incorporated in the Company’s e-commerce sales channels, as well as trademark/copyright infringement claims. The Company is also audited by (or has initiated voluntary disclosure agreements with) numerous governmental agencies in various countries, including U.S. Federal and state authorities, concerning potential income tax, sales tax and unclaimed property liabilities. These matters are in various stages of investigation, negotiation and/or litigation. The Company is also being audited by an entity representing 21 states seeking recovery of “unclaimed property”. The Company is complying with the unclaimed property audit and is providing requested information. The Company intends to vigorously defend these matters and believes it has strong defenses. In September 2017 the Company and certain subsidiaries comprising its former NATG “Tiger” consumer electronics business were sued in United States District Court, Northern District of California by a software publisher alleging that the NATG subsidiaries violated certain contractual sales channel restrictions resulting in claims of breach of contract and trademark/copyright infringement. The matter is at a very early stage and the Company is assessing the claims and its defenses; the Company cannot predict the outcome of this matter and believes the potential damages, if any, cannot be estimated at this time. Although the Company does not expect, based on currently available information, that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial position or results of operations, the ultimate outcome is inherently unpredictable. Therefore, judgments could be rendered or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period. The Company regularly assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable and estimable. In this regard, the Company establishes accrual estimates for its various lawsuits, claims, investigations and proceedings when it is probable that an asset has been impaired or a liability incurred at the date of the financial statements and the loss can be reasonably estimated. At March 31, 2018 the Company has established accruals for certain of its various lawsuits, claims, investigations and proceedings based upon estimates of the most likely outcome in a range of loss or the minimum amounts in a range of loss if no amount within a range is a more likely estimate. The Company does not believe that at March 31, 2018 any reasonably possible losses in excess of the amounts accrued would be material to the financial statements.

Basis of Presentation Basis of

Basis of Presentation Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Accounting	The accompanying condensed consolidated financial statements of the Company and its wholly-owned subsidiaries are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America are not required in these interim financial statements and have been condensed or omitted. All significant intercompany accounts and transactions have been eliminated in consolidation.
New Accounting Pronouncements	Recent Accounting Pronouncements Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”). These authorities issue numerous pronouncements, most of which are not applicable to the Company’s current or reasonably foreseeable operating structure. In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The new revenue recognition standard is effective for interim and annual periods beginning on January 1, 2018. The new standard is required to be adopted using either a full-retrospective or a modified-retrospective approach. The Company adopted the new standard using the modified-retrospective approach beginning on January 1, 2018. There was no material impact to total revenues in our consolidated statements of income, accounting policies, business processes, internal controls or disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 related to leases that outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company starting in the first quarter of fiscal 2019. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on the consolidated financial statements. In March 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment. which eliminates the second step from the goodwill impairment test. An entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss cannot exceed the total amount of goodwill allocated to the reporting unit. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the effect of adopting this pronouncement.
Revenue	The Company’s revenue is primarily comprised of sales of maintenance, repair and operational (“MRO”) products that are sold by IPG and information and communications technology (“ICT”) products that are sold by ETG. Additionally, both IPG and ETG have revenues from related activities, such as freight and, to a lesser extent, services. The Company recognizes revenue when a sales arrangement with a customer exists through the Company’s invoicing or a contract, the performance obligations have been identified, the transaction price is fixed or determinable and the Company has satisfied its performance obligations. The Company’s standard terms, provided on its invoices as well as on its websites, are included in communications with the customer and have standard payment terms of 30 days. Certain customers may have extended payment terms that have been pre-approved by the Company’s credit department, but none extend longer than 90 days. The Company’s performance obligation is primarily a single obligation to deliver products. The Company’s performance obligations are satisfied when products are transferred to a customer in accordance with agreed upon shipping terms. Certain sales may include product and/or services that are distinct and accounted for as separate performance obligations. The Company’s performance obligations for services are satisfied when the services are rendered. The Company’s total service revenue is immaterial as it accounted for less than 1% of total revenue for the first quarter of 2018. The Company’s revenue is shown as “Net sales” in the accompanying Condensed Statements of Operations and is measured as the determined transaction price, net of any variable consideration primarily rights to return product. The Company has elected to treat shipping and handling revenues as activities to fulfill its performance obligation. Billings for freight and shipping and handling are recorded in net sales and costs of freight and shipping and handling are recorded in cost of sales in the accompanying Condensed Consolidated Statements of Operations. The Company records a contract liability in cases where customers pay in advance of the Company satisfying its performance obligation. The Company did not have any material unsatisfied performance obligations or liabilities as of March 31, 2018. The Company offers customers rights to return product within a certain time, usually 30 days. The Company estimates is sales returns liability quarterly based upon its historical returns rates as a percentage of historical sales for the trailing twelve-month period.

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Mar. 31, 2018
Revenue From Contract With Customer [Abstract]
Disaggregation of Revenue	The following table presents the Company's revenue by reportable segment and by geography for the three months ended March 31, 2018: Three Months Ended 2018 Net sales: IPG MRO products and industrial supplies-United States $ 202.0 IPG MRO products and industrial supplies-Canada 10.2 ETG Technology products-France 136.9 ETG Technology products-Other Europe 6.1 Consolidated $ 355.2

Dispositions and Special Char18

Dispositions and Special Charges (Tables)	3 Months Ended
	Mar. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]
Reconciliation of Pretax Loss of Discontinued Operations to Loss of Discontinued Operations	Below is a summary of the impact on net sales, net income (loss) and net income (loss) per share from discontinued operations for the three month periods ended March 31, 2018 and 2017 . A reconciliation of pretax income (loss) of Discontinued operations to the Net Income (loss) of discontinued operations is as follows (in millions): Three Months Ended 2018 2017 Net sales $ 0.0 $ 117.0 Cost of sales 0.0 102.9 Gross profit 0.0 14.1 Selling, distribution & administrative expenses 0.4 18.6 Special charges (0.7 ) 23.9 Operating income (loss) from discontinued operations 0.3 (28.4 ) Interest and other (income) expenses, net (0.2 ) 0.3 Income (loss) from discontinued operations before income taxes 0.5 (28.7 ) Provision for income taxes 0.1 0.1 Net income (loss) from discontinued operations $ 0.4 $ (28.8 ) Net income (loss) per share – basic and diluted $ 0.01 $ (0.78 )
Special Charge Liabilities	The following table details liabilities related to the sold NATG segment’s leases and other costs and liabilities that remain from the sold Misco Germany business as of March 31, 2018 (in millions): ETG – Lease liabilities and other costs NATG – Lease liabilities and other exit costs Total Balance January 1, 2018 $ 1.2 $ 19.0 $ 20.2 Charged to expense (income) 0.0 (0.2 ) (0.2 ) Paid or otherwise settled 0.0 (5.1 ) (5.1 ) Balance March 31, 2018 $ 1.2 $ 13.7 $ 14.9

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Financial Information by Reportable Segment	Financial information relating to the Company’s continuing operations by reportable segment was as follows (in millions): Three Months Ended 2018 2017 Net sales: IPG $ 212.2 $ 190.2 ETG 143.0 112.3 Consolidated $ 355.2 $ 302.5 Operating income (loss): IPG $ 16.3 $ 12.5 ETG 9.3 5.8 Corporate and other expenses (5.5 ) (5.9 ) Consolidated $ 20.1 $ 12.4
Financial Information by Geographic Area	Financial information relating to the Company’s continuing operations by geographic area was as follows (in millions): Three Months Ended 2018 2017 Net sales: United States $ 202.0 $ 182.6 France 143.0 112.3 Canada 10.2 7.6 Consolidated $ 355.2 $ 302.5

Basis of Presentation (Details)

Basis of Presentation (Details) $ in Millions	Mar. 24, 2017USD ($)	Dec. 01, 2015store	Mar. 31, 2018USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2017USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net sales			$ 355.2	$ 302.5
SARL Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Note receivable from disposition of SARL business	$ 3.3				$ 2.2
NATG
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of remaining stores | store		3
Financial obligations related to leased facilities, carrying value			46
Reserve for lease obligations			13.7
Lease obligations, fair value			46
Reversed lease reserves for leased facilities			$ 0.2
SARL Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Percentage of residual equity position retained	5.00%
Continuing Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Reclassification of component of cost of sales to selling, distribution and administrative expenses				$ 11

Revenue (Details)

Revenue (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)
Disaggregation Of Revenue [Line Items]
Revenue from contracts with customers	$ 355.2
Performance obligation	0
Accrued sales returns	1.9
Service Revenue
Disaggregation Of Revenue [Line Items]
Revenue from contracts with customers	0
United States | MRO Products and Industrial Supplies
Disaggregation Of Revenue [Line Items]
Revenue from contracts with customers	202
Canada | MRO Products and Industrial Supplies
Disaggregation Of Revenue [Line Items]
Revenue from contracts with customers	10.2
France | Technology Products
Disaggregation Of Revenue [Line Items]
Revenue from contracts with customers	136.9
Other Europe | Technology Products
Disaggregation Of Revenue [Line Items]
Revenue from contracts with customers	$ 6.1
Sales Revenue, Net | Product Concentration Risk | Service Revenue
Disaggregation Of Revenue [Line Items]
Service revenue, percentage of revenue	1.00%

Dispositions and Special Char22

Dispositions and Special Charges - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Special charges		$ 23.9
SARL Business | Maximum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Additional charges	$ 1
Total Discontinued Operations | SARL Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Legal, professional and other costs	0.1	0.7
Loss on the sale of business		23.3
Loss on sale of net assets		8.2
Translation adjustments		14.4
Total Discontinued Operations | NATG
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Restitution receipts	0.7
Lease reserve adjustment	(0.2)
Professional costs related to ongoing restitution proceedings	0.1	0.3
Charges for updating future lease cash flows		$ 0.3
Total Discontinued Operations | NATG | Minimum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Additional charges	1
Total Discontinued Operations | NATG | Maximum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Additional charges	$ 2

Dispositions and Special Char23

Dispositions and Special Charges - Reconciliation of Pretax Loss on Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Discontinued Operations and Disposal Groups [Abstract]
Net sales	$ 0	$ 117
Cost of sales	0	102.9
Gross profit	0	14.1
Selling, distribution & administrative expenses	0.4	18.6
Special charges	(0.7)	23.9
Operating income (loss) from discontinued operations	0.3	(28.4)
Interest and other (income) expenses, net	(0.2)	0.3
Income (loss) from discontinued operations before income taxes	0.5	(28.7)
Provision for income taxes	0.1	0.1
Net income (loss) from discontinued operations	$ 0.4	$ (28.8)
Net income (loss) per share – basic and diluted (in dollars per share)	$ 0.01	$ (0.78)

Dispositions and Special Char24

Dispositions and Special Charges - Special Charges Liabilities (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)
ETG – Lease liabilities and other costs | Lease Liabilities And Other Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 1.2
Charged to expense (income)	0
Paid or otherwise settled	0
Ending Balance	1.2
NATG – Lease liabilities and other exit costs | Lease Liabilities and Other Exit Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	19
Charged to expense (income)	(0.2)
Paid or otherwise settled	(5.1)
Ending Balance	13.7
Total
Restructuring Reserve [Roll Forward]
Beginning Balance	20.2
Charged to expense (income)	(0.2)
Paid or otherwise settled	(5.1)
Ending Balance	$ 14.9

Net Income (Loss) per Common 25

Net Income (Loss) per Common Share (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Securities Included and Excluded from the Computation of Earnings Per Share
Weighted average shares excluded from computation of diluted earnings per share (in shares)	0	1,300,000
Employee Stock Option
Securities Included and Excluded from the Computation of Earnings Per Share
Weighted average number of shares included in computation of diluted earnings per share (in shares)	500,000	0
Restricted Stock
Securities Included and Excluded from the Computation of Earnings Per Share
Weighted average number of shares included in computation of diluted earnings per share (in shares)	200,000	0

Credit Facilities (Details)

Credit Facilities (Details) - Revolving Credit Facility	3 Months Ended
	Mar. 31, 2018USD ($)
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 75,000,000
Revolving credit facility, term	5 years
Percentage of inventory advance rate computed	60.00%
Percentage of inventory advance rate of net orderly liquidation value	85.00%
Eligible collateral under the credit facility	$ 84,200,000
Availability under line of credit	73,500,000
Total outstanding letters of credit	2,400,000
Total excess availability	71,100,000
Outstanding borrowings	$ 0
Maximum
Line of Credit Facility [Line Items]
Percentage of eligible accounts receivable for borrowings	85.00%

Segment Information - By Report

Segment Information - By Reportable Segment (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)segment	Mar. 31, 2017USD ($)
Segment Reporting [Abstract]
Number of reportable segments | segment	2
Segment Reporting Information [Line Items]
Net sales	$ 355.2	$ 302.5
Operating income (loss)	20.1	12.4
Reportable Segments | IPG
Segment Reporting Information [Line Items]
Net sales	212.2	190.2
Operating income (loss)	16.3	12.5
Reportable Segments | ETG
Segment Reporting Information [Line Items]
Net sales	143	112.3
Operating income (loss)	9.3	5.8
Corporate and Other
Segment Reporting Information [Line Items]
Operating income (loss)	$ (5.5)	$ (5.9)

Segment Information - By Geogra

Segment Information - By Geographic Area (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Sales Revenue, Goods, Net [Abstract]
Net sales	$ 355.2	$ 302.5
Reportable Geographical Components | United States
Sales Revenue, Goods, Net [Abstract]
Net sales	202	182.6
Reportable Geographical Components | France
Sales Revenue, Goods, Net [Abstract]
Net sales	143	112.3
Reportable Geographical Components | Canada
Sales Revenue, Goods, Net [Abstract]
Net sales	$ 10.2	$ 7.6

Legal Proceedings (Details)

Legal Proceedings (Details)	Mar. 31, 2018state
Commitments and Contingencies Disclosure [Abstract]
Number of states seeking recovery of unclaimed property	21