Despite impressive gains by its Industrial Products Group – including the group’s 27th consecutive quarter posting revenue growth and a nearly 10 percent increase in its sales force –Systemax Inc. swung to a third-quarter loss.
Reporting Monday on its FY2016 third quarter, the Port Washington-based supplier of brand-name and private-label computers and other consumer electronics – largely through e-commerce platforms – reported net sales of $414.8 million, a 2 percent drop from the $423.3 million reported for 3Q FY2015.
The consolidated sales loss came despite a 4.1 percent sales increase by Systemax’s Industrial Product Group. Undoing the IPG’s solid performance was a 6.3 percent decline in sales among the company’s European Technology Products Group.
That European slip, in part, led to an operating loss of $3.5 million for the quarter ended Sept. 30 – a significant swing from the $3.4 million in operating income the company reported in 3Q FY2015 – and a diluted net loss of 15 cents per share, down from the 5 cents per share earned in the year-ago quarter.
Systemax CEO Larry Reinhold accentuated the positive Monday, noting the Industrial Products Group’s revenue-growth streak continued “despite a somewhat soft market,” and pointing out the group has “more than doubled [its] size and scope of operations” in just five years.
Even the European Technology Products Group’s performance wasn’t as bad as the numbers suggest, according to the CEO, who noted that France – the ETPG’s largest market – recorded its 11th consecutive quarter of double-digit sales growth, while the company’s Netherlands Solutions business has generated double-digit growth in every quarter of FY2016.
“Efforts to improve [ETPG] business included adding nearly 20 new sales representatives and expanding our solutions team and offerings,” Reinhold said. “During the quarter, we further sharpened our focus on key markets.”
Systemax also announced Monday the appointment of Thomas Clark as the company’s new chief financial officer, a position previously filled on an interim basis by Reinhold. Clark has served the company in a number of senior financial positions over the past decade, including director of finance and, most recently, as controller of the IPG.
Clark is “a proven leader who possesses extensive knowledge of our business,” Reinhold noted.
“He has been an invaluable member of our team with direct responsibility for financial reporting, budgeting, mergers and acquisitions and strategic planning,” the CEO said. “I look forward to his continued contributions as we execute on our strategic plan for the company.”
The Clark promotion, along with the strong performance by the company’s IPG and in certain European sectors, show Systemax is “strategically well positioned,” according to Reinhold.
“We are making additional investments that will enhance our ability to capitalize on our growth,” he said. “These include improvements to logistics and internal systems, expansion of customer service and sales capabilities and deeper supplier partnerships.
“While these investments will continue to impact our near-term performance, we believe we are on the right path to efficiently support future growth and improve long-term profitability.”