The Channel logo

News

By | Paul Kunert 2nd November 2011 11:21

Systemax blows £250k on ex-CEO legal probe bills

Misco parent turns profit despite retail meltdown

Rising biz sales fuelled Systemax's third quarter even though the consumer spending freeze showed no signs of thawing.

The parent of the Tiger Direct, CompUSA, Misco and WStore recorded a 4 per cent rise in turnover for the period ended 30 September, raking in $901m (£562.5m). The firm's operating income climbed 58 per cent to $19.1m (£11.9m), earning it $10.6m (£6.6m) in net profits – a 23 per cent spike.

But it was a tale of two segments as B2B sales grew 12 per cent on a constant currency basis to $508m while retail sales slumped 9 per cent to $393m.

"Our retail stores delivered another solid quarterly performance; however, our consumer related sales remain challenging, particularly on the web," said CEO Richard Leeds.

Gross margin improved 120 basis points to 14.6 per cent on the back of efforts to drive efficiency including inventory turns and stockholding, IT investments and getting better use from its distribution centres.

The firm recorded special pre-tax charges in the quarter of $400,000 (£249.672) for legal and professional fees related to its "investigation and settlement" with disgraced former exec Gilbert Fiorentino, who resigned in May and is the subject of an SEC probe.

During its calendar Q2, the reseller-come-retailer recorded a net gain of $6.2m after legal fees as Fiorentino paid back some $11m in salary and bonuses following his exit.

For the past nine months to date, Systemax sales were up 2 per cent to $2.7bn on a content currency basis, including a 10 per cent rise in B2B revenues to $1.5bn and a 4 per cent decline in consumer to $1.2bn. Operating income is up 23 per cent to $59.6m. ®

alert Send corrections

Opinion

Andrew Cobley

If only lawyers could make money rather than costing money
Memristor_wafer

Chris Mellor

Execution warrant close to being signed for Fink's folly
Woman cuddles 'sly-looking' Fennec fox. Photo by Shutterstock
Cartoon of employee asking wky boss makes hium wear suspenders (while pincer through open trapdoor remains poised above his head) illustration by Cartoon resource for Shutterstock

Frank Jennings

It's not like my boss painstakingly nurtured the contacts, right?

Features

Wind turbine, image via Shutterstock
Girl and computer, photo via Shutterstock
Middle-class terror of engineering also part of problem
Nerd fail photo via Shutterstock