Total sales climb as industrial products sold through GlobalIndustrial.com and offline account for 64% of all revenue for the MRO products distributor.

Systemax Inc. wrapped up a third consecutive quarter of double-digit growth, including a 9.1% increase in its Industrial Products Group sales. Industrial Products, which include sales on its flagship e-commerce site, GlobalIndustrial.com, accounted for 64%—$204.4 million—of total sales in the third quarter.

“Sales were strong across product categories and customer end-markets,” president and CEO Larry Reinhold told analysts last week on the company’s Q3 earnings call. “Industrial once again delivered improved operating leverage versus last year, as we continue to benefit from improved product and freight margins as well as continued discipline within our selling, distribution, and administrative spending.”

We expect to make additional investments in our sales organization and in technical expertise to support our broad product offering, improve service levels and enhance the value we bring to our customers.
Larry Reinhold, CEO
Systemax Inc.

The Industrial Products Group’s operating margin “more than doubled from the third quarter of 2016 and we surpassed $20 million in segment operating income,” Reinhold said on the call, according to a transcript from Seeking Alpha. “We expect to make additional investments in our sales organization and in technical expertise to support our broad product offering, improve service levels and enhance the value we bring to our customers.”

Systemax—which sells maintenance, repair and operations, or MRO, products that companies use to manage their equipment and facilities—sold its European Technology Products Group, excluding its I.T. services business in France, in March. That move enabled the distributor to refocus on its profitable Industrial Products Group in North America and France, the company said earlier this year.

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 site 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 third quarter of fiscal 2017 ended Sept. 30, Systemax, No. 100 in the B2B E-Commerce 300, reported:

  • Total sales of $319.3 million, up 10.0% from $290.2 million.
  • Gross profit of $89.6 million, up 18.4% from $75.7 million, resulting in a gross profit margin of 28.1%, up from 26.1%.
  • Industrial Products Group sales of $204.4 million, up 9.1% from $187.4 million.
  • European Technology Products Group sales including France and the divested Germany operations, of $114.9 million, up 21.7% from $94.4 million.
  • Net income of $11.3 million, compared with a net loss of $5.8 million in Q3 of last year.

Industrial Product Group sales increased 11.5% in both the first and second quarters, Systemax reported.

For the first nine months of fiscal 2017 Systemax reported:

  • Total sales of $934.8 million, up 6.9% from $874.7 million.
  • Gross profit of $262.9 million, up 14.5% from $229.6 million, resulting in a gross profit margin of 28.1%, up from 26.2%.
  • Industrial Products Group sales of $597.3 million, up 10.7% from $539.8 million.
  • Europe Technology Products Group sales, including France and the divested Germany operations, of $337.5 million, up 13.2% from $298.2 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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