Earnings Cheat Sheet: Systemax Sales Soar to Record Highs

Another economic retail recovery story is here. Last month, Systemax (SYX) announced it would create 400 new jobs in Georgia. Kudos to a small-cap company providing jobs domestically. Systemax is an electronics retailer, best known for its online property TigerDirect.com, its acquisition of Circuit City and its CompUSA retail stores. Systemax was once a Wall St. Cheat Sheet Premium Profitable Pick. We continue to like the strong family management team with the Leeds Brothers at the helm. Again today, Systemax issued record quarterly sales. Here’s the earnings breakdown:

Earnings: Earnings decreased to $.23 a share from $.34 a share in the same quarter last year, due to higher costs and charges.

Revenue: Revenue increased 14% $862.7 million from $753.9 million last year.

Actual versus Wall Street Expectations: Systemax earnings per share of $.23 per share was below the estimates of $.34 per share. Revenue beat at $862.7 million over $835.89 million expected.

Notable Stats: Business-to-business channel sales grew 24% to $435.2 million

Consumer channel sales increased 6% to $427.5 million

Total short and long term debt totaled approximately $32.4 million at the end of the quarter, an increase of approximately $18.6 million from the previous quarter, as SYX made investments for equipping and stocking the new Georgia facility.

“Same store” business to business channel sales grew 18%, while same store consumer channel sales grew 4%.

Did You Hear That? Richard Leeds, Chairman and CEO said, “During the third quarter, we experienced strong top-line results with consolidated revenue up 14% from the prior year, benefiting once again from solid performances in our business-to-business technology and industrial operations. Additionally, we saw some improvement within the consumer channel, with sales increasing 6% from the prior year. However, the consumer environment and competitive landscape is still challenging and both gross and operating margins remain under pressure…We remain focused on improving our bottom line performance, as we look to control costs and increase the efficiency of our operations.”

Commentary: Systemax has more available credit than ever before to invest in the expansion of its operations. The new Georgia facility is the perfect example of its strategic growth efforts. On a technical basis, SYX shares recovered above the 50-day moving price average in October, yet still remains well below its 200-day moving price average

Disclosure: No positions in SYX