Net sales at Systemax Inc.—an operator of five industrial products ecommerce sites—increased more than 13% last year to a record of nearly $900 billion.
But much faster growth came in the fourth quarter in the company’s business in Canada, where revenue surged 29% year over year in local currency, Tex Clark, chief financial officer, said this week in a conference call with stock analysts. “Canada delivered its eighth consecutive quarter of strong double-digit gains,” he said, according to a transcript of the call from Seeking Alpha.
Systemax sells a broad range of industrial products in Canada through GlobalIndustrial.ca, one of five ecommerce sites in its Industrial Products Group. The four others are its U.S.-based flagship GlobalIndustrial.com, IndustrialSupplies.com, Nexelwire.com and CHdistgov.com.
Barry Litwin, CEO, says the Industrial Products Group—the company’s main operation since Systemax sold its France IT business last year for about $270 million—is positioned for continued growth with its combination of offering a “personalized digital end-to-end and high-touch sales and customer experience,” along with the staff expertise it provides of helping customers find the right industrial and maintenance, repair and operations (MRO) products that businesses use to operate their facilities.
Investing in the customer experience
Litwin, who took over as the chief executive in January, adds that Systemax is continuing to invest in its ecommerce technology platform as well as its sales force and product assortment to “engage customers more intimately through deployment of online and offline personalization capabilities to increase convenience in the customer buying experience.”
The U.S. and Canada-based versions of the Global Industrial ecommerce sites each sell products in 21 categories, ranging from electrical and hardware products to medical and laboratory equipment, office supplies and vehicle maintenance. IndustrialSupplies.com focuses on a narrower selection of categories, including warehouse supplies, material-handling equipment, office furniture, shipping supplies and ground maintenance equipment.
Nexel Industries, the Systemax unit that operates Nexelwire.com, sells wire shelving products used in industrial, commercial, healthcare and food service facilities. CHdist.gov, operated by Systemax unit C&H Distributors, sells industrial and office products to government agencies.
Although Systemax doesn’t break out ecommerce numbers, it has noted that self-service e-commerce sales account for a large share of total revenue. It adds that nearly all sales, including those from orders that customers place directly with sales reps or through catalogs, are supported in one way or another by ecommerce, such as when sales reps use the company’s websites to help customers research and place orders.
For the fourth quarter ended Dec. 31, Systemax reported:
- Net sales increased 11.9% from the year-earlier quarter to $217.7 billion;
- Gross profit increased 11.8% year over year to $73.0 million, resulting in a gross profit margin of 33.5%, down from 33.6%;
- Net income from continuing operations fell 62.3% to $12.3 million; the drop was related to $21.8 million in tax benefits in the prior-year quarter.
For the full year ended Dec. 31, Systemax reported:
- Net sales increased 13.3% from the year-earlier quarter to $896.9 million;
- Gross profit increased 12.6% to $307.7 million, resulting in a gross profit margin of 34.3%, down from 34.5%;
- Net income from continuing operations dropped 24.4% to $49.5 million; the decline was related to a $20.0 million tax benefit in the year prior.
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