Systemax Inc., an online distributor of maintenance, repair and operations (MRO) products, reported higher sales but lower profits for the first quarter.

Systemax, based in Port Washington, New York, also revealed plans to open another distribution center later this year near Dallas but didn’t provide further details. “We will be expanding our distribution footprint in the second half of the year with a new facility in the greater Dallas area,” CEO Barry Litwin told Wall Street analysts on the company’s earnings call, based on a transcript from The Motley Fool.  “This distribution center will allow us to be closer to our customers, improve shipping performance and increase overall service levels—it will also provide additional capacity to efficiently support our future growth.”

For its industrial products group, Systemax already operates six distribution centers, totaling about 2 million square feet, according to the company’s latest annual report on file with the U.S. Securities and Exchange Commission.

The addition of a new distribution center comes at a time Systemax is focusing the company entirely on the sales of industrial products and B2B ecommerce.

Litwin 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.

The company says the opening of another distribution center will streamline its shipping and delivery capability. “This additional distribution center (DC) will benefit labor efficiency in other DCs, lower our freight cost as we move closer to certain of our customers and provide the capacity needed to continue to drive above market growth,” chief financial officer Tex Clark told analysts on the earnings call. “We are currently targeting commencement of shipping in the fall of this year.”

For the quarter ended March 31, Systemax reported:

• Sales of $232.2 million, an increase of 9.4% from sales in the first quarter of 2018 of $212.2 million.
• Net income was $9.7 million compared with net income of $14.7 million in the first quarter of 2018.

“Our customers’ experience is starting to improve as we enhance service levels in our distribution network and call center operations,” Litwin told analysts. “We are providing customers with greater visibility on product shipping status and driving improved same-day shipment performance in coordination with our logistics partners.”

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