The MRO products distributor rides an 11.5% sales increase in its Industrial Products Group, which includes its flagship e-commerce site, GlobalIndustrial.com.

Systemax Inc., an online and catalog-based distributor of business and industrial products, tallied double-digit growth for the second consecutive quarter in its Industrial Products Group.

Divestitures in recent years brightened the profit picture for Systemax—which sells maintenance, repair and operations, or MRO, products that companies use to manage their equipment and facilities—as it recorded net income of $13.8 million in the second quarter of its fiscal year compared with a loss of $7.4 million last year, the company says.

Systemax sold its European Technology Products Group, excluding its I.T. services business in France, in March. That move enabled a refocus on its profitable Industrial Products Group in North America and France, the company said earlier this year.

The Industrial Products Group and its flagship e-commerce site GlobalIndustrial.com helped drive 11.5% year-over-year growth in Q2. The group’s gross profit climbed 24.2% to $73.3 million from $59 million last year, chief financial officer Tex Clark told analysts on the company’s quarterly earnings call yesterday. Growth reflected “a favorable sales mix, which included a larger percentage of total sales from our stocked products, which traditionally have a higher margin than our drop-ship offering, improved freight margin performance as we more effectively utilized our nationwide distribution network and capitalized on our new warehouse management system, and strategic pricing optimization,” Clark told analysts, according to a transcript from Seeking Alpha.

The company’s move away from retail sales of computers and electronics—led by the sale of its TigerDirect.com business to PCM Inc. in 2015—accelerated in 2016 with the sale of its Germany-based operations of electronics supplier Misco, including e-commerce sited Misco.de. It retained several Misco e-commerce sites in the United Kingdom, France and other European countries.

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Systemax doesn’t break out e-commerce sales but has noted in the past that self-service online sales account for a large share of total revenue. It also stated that nearly all sales, including those placed directly with sales reps, are supported in one way or another by e-commerce, such as when sales reps use the company’s websites to help customers research and place orders.

For the second quarter of fiscal 2017 ended June 30, Systemax, No. 110 in the B2B E-Commerce 300, reported:

  • Total sales of $313.0 million, up 5.1% from $297.7 million.
  • Gross profit of $91.5 million, up 17.3% from $78.0 million, resulting in a gross profit margin of 29.2%, up from 26.2%;
  • Industrial Products Group sales of $202.7 million, up 11.5% from $181.8 million.
  • Europe Technology Products Group sales including France and the divested Germany operations, of $110.3 million, down 4.1% from $115.0 million.
  • Net income of $13.8 million, compared with a net loss of $7.4 million in the same period last year. The shift in net income was related partly to a year-earlier net loss of $9.7 million in discontinued operations.

Industrial Product Group sales increased 11.5% in the first quarter, Systemax reported.

For the first six months of fiscal 2017 Systemax reported:

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  • Total sales of $615.5 million, up 5.3% from $584.5 million.
  • Gross profit of $173.3 million, up 12.6% from $153.9 million, resulting in a gross profit margin of 28.2%, up from 26.3%;
  • Industrial Products Group sales of $392.9 million, up 11.5% from $352.4 million.
  • Europe Technology Products Group sales, including France and the divested Germany operations, of $222.6 million, down 3.3% from $230.1 million.
  • Net loss of $4.7 million, compared with a net loss of $24.7 million in the same period last year.

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