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<SEC-DOCUMENT>0000899681-05-000307.txt : 20050414
<SEC-HEADER>0000899681-05-000307.hdr.sgml : 20050414
<ACCEPTANCE-DATETIME>20050414112657
ACCESSION NUMBER:		0000899681-05-000307
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050330
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050414
DATE AS OF CHANGE:		20050414

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SYSTEMAX INC
		CENTRAL INDEX KEY:			0000945114
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-CATALOG & MAIL-ORDER HOUSES [5961]
		IRS NUMBER:				113262067
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13792
		FILM NUMBER:		05749803

	BUSINESS ADDRESS:	
		STREET 1:		22 HARBOR PARK DR
		CITY:			PORT WASHINGTON
		STATE:			NY
		ZIP:			11050
		BUSINESS PHONE:		5166087000

	MAIL ADDRESS:	
		STREET 1:		22 HARBOR PARK DRIVE
		CITY:			PORT WASHINGTON
		STATE:			NY
		ZIP:			11050

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GLOBAL DIRECTMAIL CORP
		DATE OF NAME CHANGE:	19950509
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>systemax-8k_041305.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>8-K</TITLE>
</HEAD>
<BODY>


<P ALIGN=CENTER><FONT SIZE=3>SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</FONT></P>

<HR SIZE=1 WIDTH=35% ALIGN=CENTER>

<P ALIGN=CENTER><FONT SIZE=3><B>FORM 8-K</B><BR>
<BR>
CURRENT REPORT<BR>
PURSUANT TO SECTION 13 OR 15(D) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934<BR>
<BR>
Date of Report (Date of earliest event reported): March 30, 2005<BR>
<BR>
<B>Systemax Inc.</B><BR>
(Exact Name of Registrant as Specified in Charter)</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=33% ALIGN=CENTER>
<B>Delaware</B><BR>
(State or Other Jurisdiction<BR>
of Incorporation)</TD>
<TD WIDTH=33% ALIGN=CENTER>
<B>1-13792</B><BR>
(Commission<BR>
File Number)</TD>
<TD WIDTH=34% ALIGN=CENTER>
<B>11-3262067</B><BR>
(IRS Employer<BR>
Identification No.)</TD>
</TR>
</TABLE>
<BR>

<P ALIGN=CENTER><FONT SIZE=3><B>11 Harbor Park Drive<BR>
Port Washington, New York 11050</B><BR>
(Address of Principal Executive offices, including Zip Code)</FONT></P>

<P ALIGN=CENTER><FONT SIZE=3>Registrant's telephone number, including area code: <B>(516) 608-7000</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=3><B>N.A.</B><BR>
(Former Name or Former Address, if Changed Since Last Report)</FONT></P>

<P><FONT SIZE=3>Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligations of the registrant
under any of the following provisions (<I>see</I> General Instruction A.2
below): </FONT></P>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN=LEFT>|__|</TD>
<TD WIDTH=95%>Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN=LEFT>|__|</TD>
<TD WIDTH=95%>Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14-12)</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN=LEFT>|__|</TD>
<TD WIDTH=95%>Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240-14d-2(b))</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN=LEFT>|__|</TD>
<TD WIDTH=95%>Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CRF 240.13e-4(c))</TD>
</TR>
</TABLE>
<BR>

<P ALIGN=CENTER><FONT SIZE=3>Page 1 of 13</FONT></P>

<PAGE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=LEFT><B><U>ITEM 2.02</U></B></TD>
<TD WIDTH=90%><B><U>Results of Operations and Financial Condition</U></B></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A press release regarding fourth quarter and 2004 year-end financial results was
issued by the Company on April 13, 2005, a copy of which is filed as an exhibit.
</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=LEFT><B><U>ITEM 9.01</U></B></TD>
<TD WIDTH=90%><B><U>Financial Statements and Exhibits</U></B></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=3><I>(a) Financial Statements of Business Acquired </I> - not
applicable</FONT></P>

<P><FONT SIZE=3><I>(b) Pro Forma Financial Information</I> - not
applicable</FONT></P>

<P><FONT SIZE=3><I>(c)  Exhibits</I></FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%></TD>
<TD WIDTH=5%>99.1</TD>
<TD WIDTH=90%>Press release, issued April 13, 2005, regarding financial results
for the fiscal year and fourth quarter of 2004</TD>
</TR>
</TABLE>
<BR>

<PAGE>

<P ALIGN=CENTER><FONT SIZE=3><B>SIGNATURES</B></FONT></P>

<P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized. </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50%></TD>
<TD WIDTH=50%>SYSTEMAX INC.<BR>
<BR>
By: <U>/s/ Steven Goldschein&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Steven Goldschein<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Senior Vice President and CFO</TD>
</TR>
</TABLE>
<BR>

<P ALIGN=LEFT><FONT SIZE=3>Dated:  April 13, 2005</FONT></P>

<PAGE>

<P ALIGN=CENTER><FONT SIZE=3>EXHIBIT INDEX</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%></TD>
<TD WIDTH=5%>99.1</TD>
<TD WIDTH=90%>Press release, issued April 13, 2005, regarding financial results
for the fiscal year and fourth quarter of 2004</TD>
</TR>
</TABLE>

</BODY>
</HTML>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>systemax-ex991_041305.htm
<DESCRIPTION>EX-99.1
<TEXT>
<HTML>
<HEAD>
<TITLE>EXHIBIT 99.1</TITLE>
</HEAD>
<BODY>

<P ALIGN=RIGHT><FONT SIZE=3>EXHIBIT 99.1</FONT></P>

<P ALIGN=LEFT><FONT SIZE=3><B>SYSTEMAX</B></FONT></P>

<P ALIGN=LEFT><FONT SIZE=3><B><U>FOR IMMEDIATE RELEASE</U><BR>
<BR>
INVESTOR CONTACT:<BR>
Steven M. Goldschein<BR>
516-608-7000</B></FONT></P>

<HR SIZE=1 NOSHADE>

<P ALIGN=CENTER><FONT SIZE=3><B>SYSTEMAX REPORTS RECORD QUARTERLY AND FULL YEAR
SALES AND SHARPLY INCREASED EARNINGS</B></FONT></P>

<P ALIGN=LEFT><FONT SIZE=3><B>Fourth Quarter 2004 highlights:<BR>
&nbsp;&nbsp;-&nbsp; Record quarterly sales of $551 million, 26% increase over last year <BR>
&nbsp;&nbsp;-&nbsp; North American sales up 36% <BR>
&nbsp;&nbsp;-&nbsp; North American operating income increases from $2.6 million to $20.7 million <BR>
&nbsp;&nbsp;-&nbsp; Sharply increased earnings <BR>
&nbsp;&nbsp;-&nbsp; E-commerce sales increase 45% year over year <BR>
&nbsp;&nbsp;-&nbsp; Consolidation of North American computer businesses complete</B> </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3><B>Full Year 2004 highlights:<BR>
&nbsp;&nbsp;-&nbsp; Record annual sales total $1.93 billion<BR>
&nbsp;&nbsp;-&nbsp; Earnings per diluted share of $.35, up 250%<BR>
&nbsp;&nbsp;-&nbsp; E-commerce sales increase 34% over last year</B></FONT></P>

<P ALIGN=LEFT><FONT SIZE=3><B>PORT WASHINGTON, NY, April 13, 2005 - </B>Systemax
Inc. (NYSE:SYX), a leading distributor and manufacturer of PC hardware, related
computer products and industrial products in North America and Europe, today
announced results for the fourth quarter and year ended December 31, 2004 and
restated results for the year ended December 31, 2003. </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>Net sales for the fourth
quarter increased $113.3 million or 25.9% to a record $550.8 million from $437.5
million in the same quarter last year. Fourth quarter 2004 e-commerce sales
increased $48.4 million or 44.8% to $156.4 million, representing 28.4% of total
sales in the period. North American net sales increased 35.6% to $359.6 million
compared to $265.1 million in the same quarter a year ago. European net sales
increased 11% over last year with foreign exchange translation accounting for
substantially all of the increase. North American operating income increased to
$20.7 million from $2.6 million a year ago. This increase resulted from the
combination of increased sales and the maintenance of spending on selling,
general and administrative expenses at year-ago levels. Operating losses in
Europe increased to $9.4 million from $2.5 million compared to the fourth
quarter of 2003. European results were adversely affected by lower gross margins
and non-recurring restructuring costs. During the first quarter of 2005
additional steps were taken in Europe to reduce operating expenses including a
workforce reduction of approximately 185 people with an expected annual savings
of approximately $8 million. First quarter results of 2005 will include
severance costs of approximately $2.5 million relating to the workforce
reduction. Net income for the fourth quarter was $8.25 million or $.23 per
diluted share compared to a loss of $137,000 ($.00 per diluted share) for the
same period last year. Fourth quarter results include pretax restructuring and
other charges of $1.3 million (2004) and $2.9 million (2003). Excluding the
effects of the restructuring and other charges, net income for the quarter would
have been $9.2 million ($.25 per diluted share) in 2004 compared to $1.8 million
($.05 per diluted share) last year. </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>Systemax achieved record
annual net sales for 2004, as sales increased 16.3% to $1.93 billion from $1.66
billion in 2003. North American sales increased 20% to $1.23 billion from last
year&#146;s $1.03 billion principally due to strong consumer sales at
TigerDirect and growth in industrial product sales. European net sales increased
10.2% to $696.2 million from $631.5 million in 2003. With foreign exchange
translation accounting for a $70.0 million increase in 2004 net sales, those
sales decreased approximately 1% when measured in local currencies. The
Company&#146;s gross profit percentage fell to 15.1% in 2004 from 16.0% in the
prior year due to continued pricing pressure resulting from weak market demand,
competition and changes in the mix of products sold. Selling, general and
administrative expenses fell to 13.5% of net sales from 15.2% a year ago. The
Company&#146;s restructuring activities reduced the workforce, lowering salary
and benefit costs. These savings were partially offset by increased credit card
processing fees resulting from higher sales levels and higher costs in Europe
due to the effects of changes in foreign exchange rates. Net income for 2004
increased to $12.6 million or $.35 per diluted share compared to $3.35 million
or $.10 per diluted share in the prior year. Results for the years ending
December 31, 2004 and 2003 include pretax restructuring and other charges of
$7.4 million (2004) and $1.7 million (2003). Excluding the effects of the
restructuring and other charges, net income for the year would have been $17.6
million ($.50 per diluted share) in 2004 compared to $7.2 million ($.21 per
diluted share) last year. </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>As discussed above, during
2004 and 2003 the Company incurred certain restructuring and other charges in
connection with the streamlining and reorganization of its back office and
distribution facilities in both North America and Europe. A reconciliation
between income from operations, as reported in accordance with generally
accepted accounting principles, and pro forma net income, excluding these
adjustments has been provided. </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>Richard Leeds, Chairman and
Chief Executive Officer, stated &#147;We are extremely pleased by our strong
fourth quarter performance. Our sales growth was led by a sharp increase at
TigerDirect, where approximately half of its sales are to the consumer market.
Another highlight of both the fourth quarter and the full year is the continued
growth of our e-commerce business which reached 28.4% of consolidated fourth
quarter net sales and totaled $514.8 million for 2004 or 26.7% of net sales.
E-commerce sales help us to leverage selling, general and administrative
expenses, enabling more profit to drop to the bottom line. The actions we have
taken over the last two years in restructuring and reorganizing our business,
both in North America and Europe, have begun to pay dividends.&#148; </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>Led by Tiger Direct&#146;s
Chief Executive Officer, Gilbert Fiorentino, our now completed US computer
business reorganization, saw seven divisions combined into one. Mr. Fiorentino
commented, &#147;Not only are we more profitable, we are a more able competitor
in the marketplace. Our plan is to replicate this model in the United Kingdom
during 2005 and return Europe to profitability.&#148; </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>Steven M. Goldschein,
Senior Vice President and Chief Financial Officer, noted that the Company&#146;s
financial position remains strong. Days sales outstanding improved to 25.1 from
31.4 last year. This mirrors the growth in credit card business where the sales
to cash cycle is 2 &#150; 3 days rather than the normal 30-45 days. The Company
recently extended its domestic credit facility for eighteen months under
substantially the same terms and conditions. The Company expects to finalize a
new worldwide credit agreement in the next two months. </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>Richard Leeds added
&#147;We believe we are well positioned to serve our customers in both North
America and Europe under current economic conditions. The steps we have taken in
restructuring our European businesses are aimed at returning us to operating
profitably during 2005. I am encouraged by the progress we are making with our
ProfitCenter suite of web-based software. Following our successful internal
installation and use of the software, we now expect initial third party customer
installations in the first half of 2005.&#148; </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3><B>Restatement of
Financial Statements</B></FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>The Company previously
announced a delay in reporting its results for the year ended December 31, 2004
pending restatement of its financial statements for the year ended December 31,
2003 and the first three quarters of 2004, to correct errors in accounting for
inventory at its United Kingdom subsidiary. </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>Results for the first three quarters of 2004 have
been restated from those previously released as follows: </FONT></P>

<PRE>
<FONT SIZE=1>

                           First                  Second                Third       Third
                           Quarter     First      Quarter    Second     Quarter     Quarter
                           2004, as    Quarter    2004, as   Quarter    2004, as    2004,     Fourth
 (In thousands)            previously  2004, as   previously 2004, as   previously  as        Quarter     Fiscal
                           reported    restated   reported   restated   reported    restated   2004         2004
                           ---------   --------   ---------  --------   ---------   --------  -------     ------

 Net Sales                  $485,736   $485,736   $430,990   $430,990   $460,271  $460,271   $550,838  $1,927,835
 Gross Profit                $74,820    $74,139    $67,818    $67,136    $73,224   $72,485    $76,623    $290,383
 Income from operations       $5,203     $4,522     $2,744     $2,062     $5,782    $5,043    $11,289     $22,916
 Income before provision      $4,556     $3,875     $2,318     $1,636     $5,067    $4,328    $10,634     $20,473
    for income taxes
 Provision for income         $2,144     $1,940     $1,647     $1,441     $2,375    $2,155     $2,387      $7,923
    taxes
 Net income                   $2,412     $1,935       $671       $195     $2,692    $2,173     $8,247     $12,550
 Net income per common
    share:
  Basic                         $.07       $.06       $.02       $.01       $.08      $.06       $.24        $.37
  Diluted                       $.07       $.05       $.02       $.01       $.08      $.06       $.23        $.35

</FONT>
</PRE>


<PAGE>

<PRE>
<FONT SIZE=1>

                                                            <I>SYSTEMAX INC.</I>
                                                    Consolidated Statements of Operations
                                           (In thousands, except per share and share amounts)

                                              <B>Three Months Ended                                    Year Ended
                                                 December 31,                                      December 31,
                                    ------------------------------------------  ---------------------------------------------------
                                     2004           2003            2003              2004               2003             2003
                                    ------------------------------------------  ---------------------------------------------------</B>
                                                (As restated)    (As originally                     (As restated)    (As originally
                                                                   reported)                                           reported)

Net sales                             $550,838        $437,508       $437,508         $1,927,835       $1,657,778       $1,657,778
Cost of sales                          474,215         373,309        372,353          1,637,452        1,392,745        1,389,509
                                    ------------------------------------------  ---------------------------------------------------
Gross profit                            76,623          64,199         65,155            290,383          265,033          268,269
Selling, general &amp; administrative       64,019          61,155         61,155            260,111          251,460          251,460
expenses
Restructuring and other charges          1,315           2,886          2,886              7,356            1,726            1,726
Goodwill Impairment                                                                                         2,560            2,560
                                    ------------------------------------------  ---------------------------------------------------
Income from operations                  11,289             158          1,114             22,916            9,287           12,523
Interest and other expense, net            655             514            514              2,443            1,589            1,589
                                    ------------------------------------------  ---------------------------------------------------
Income (loss) before income taxes       10,634           (356)            600             20,473            7,698           10,934
Provision (benefit) for income taxes     2,387           (219)             67              7,923            4,352            5,323
                                    ------------------------------------------  ---------------------------------------------------
Net income (loss)                       $8,247          $(137)           $533            $12,550           $3,346           $5,611
                                    ==========================================  ===================================================
Net income (loss) per
common share:

Basic                                     $.24            $.00           $.01               $.37             $.10             $.16
                                    ==========================================  ===================================================
Diluted                                   $.23            $.00           $.01               $.35             $.10             $.16
                                    ==========================================  ===================================================

Weighted Average Common And Common
Equivalent Shares:
Basic                                 34,416,256      34,283,270     34,283,270         34,372,943       34,164,093       34,164,093
                                     ==========================================  ===================================================
Diluted                               36,233,146      35,260,031     35,260,031         35,489,283       34,879,546       34,879,546
                                     ==========================================  ===================================================

</FONT>
</PRE>

<PRE>
<FONT SIZE=1>

Operations by geographic area (in millions):

                                                       Three months ended
                                                           December 31,                   Year ended December 31,
                                                       2004            2003               2004               2003
                                                       ----            ----               ----               ----
North America:
Net sales                                             $359.6           $265.1            $1,231.6          $1,026.2
                                                      ======           ======            ========          ========
Income from operations                                 $20.7             $2.6               $35.4             $14.5
                                                      ======           ======            ========          ========
Europe:
Net sales                                             $191.2           $172.4              $696.2            $631.5
                                                      ======           ======            ========          ========
Loss from operations                                  $(9.4)           $(2.5)             $(12.5)            $(5.2)
                                                      ======           ======            ========          ========
</FONT>
</PRE>

<PRE>
<FONT SIZE=1>

                                                <B>SYSTEMAX INC.</B>
                                    Condensed Consolidated Balance Sheets
                                                (in thousands)
                                                         December 31,   December 31,    December 31,
                                                            2004            2003           2003
                                                         -----------    ------------    ------------
CURRENT ASSETS:                                                         (As restated)   (As previously
                                                                                         reported)

Cash and cash equivalents                                  $36,257        $38,702         $38,702
Accounts receivable, net                                   153,724        152,435         152,435
Inventories                                                176,227        133,905         133,905
Prepaid expenses and other current assets                   33,700         36,981          36,981
                                                   -----------------------------------------------
Total Current Assets                                       399,908        362,023         362,023
Property, plant and equipment, net                          65,563         68,647          68,647
Other assets                                                18,829         16,049          14,982
                                                   -----------------------------------------------
TOTAL                                                     $484,300       $446,719        $445,652
                                                   ===============================================

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portions of long-term debt and
notes payable to banks                                     $16,560        $20,814         $20,814
Accounts payable, accrued expenses and
other current                                              222,620        195,699         192,143
liabilities
                                                   -----------------------------------------------
Total Current Liabilities                                  239,180        216,513         212,957
Long-term debt                                              17,099         18,353          18,353
Other liabilities                                            1,505          1,768           1,768

Shareholders' equity                                       226,516        210,085         212,574
                                                   -----------------------------------------------
TOTAL                                                     $484,300       $446,719        $445,652
                                                   ===============================================

</FONT>
</PRE>


<P ALIGN=LEFT><FONT SIZE=3><B>Systemax Inc.</B><BR>
Reconciliation of GAAP<BR>
income to earnings excluding certain charges (In thousands, except per share<BR>
data) (Unaudited) <BR></FONT></P>
<PRE>
<FONT SIZE=1>

                                                            Year ended                    Three months ended
                                                           December 31,                      December 31,
                                                          2004           2003               2004            2003
                                                         ---------    ------------         ----------   -------------
                                                                     (As restated)                      (As restated)

Income from operations                                   $22,916            $9,287          $11,289            $158
Adjustments:
Restructuring and other charges (1)                        7,356             1,726            1,315           2,886
Goodwill Impairment (2)                                                      2,560
                                                         -------            ------          -------           -----
Earnings excluding certain charges before
    interest and other expense, net and income
    taxes                                                 30,272            13,573           12,604           3,044
Interest and other expense, net                            2,443             1,589              655             514
                                                         -------            ------          -------           -----
Earnings excluding certain charges before
    income taxes                                          27,829            11,984           11,949           2,530
Provision for income taxes                                10,244             4,823            2,731             701
                                                         -------            ------          -------           -----
Earnings excluding certain charges                       $17,585            $7,161           $9,218          $1,829
                                                         =======            ======          =======           =====

Earnings excluding certain charges per diluted
    share                                                   $.50              $.21             $.25            $.05
                                                         =======            ======          =======           =====
Diluted weighted average shares outstanding
                                                          35,489            34,880           36,233          35,260
                                                         =======            ======          =======           =====

</FONT>
</PRE>

<P ALIGN=LEFT><FONT SIZE=3>(1) The $1.3 million restructuring charge in the
fourth quarter of 2004 represents costs incurred in reorganizing our European
business. The restructuring charges for the year ended December 31, 2004
includes $3.7 million of costs incurred in streamlining the US computer business
and $3 million of costs for streamlining our European operations. The $2.9
million restructuring charge in the fourth quarter of 2003 is comprised of
excess facilities costs in the United States and the United Kingdom. The
restructuring and other charges for the year ended December 31, 2003 includes
the reversal of a $1.3 million liability no longer needed as a result of a
litigation settlement.</FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>(2) The $2.6 million goodwill impairment charge
occurred during the second quarter of 2003. The Company purchased the minority
shares in its Netherlands subsidiary pursuant to the terms of the original
purchase agreement. The entire purchase price was attributable to goodwill and
as a result of an impairment analysis, was written off.</FONT></P>

<P ALIGN=LEFT><FONT SIZE=3>NOTE - The above reconciliation is intended to
present Systemax's operating results, excluding certain charges and providing
income taxes (benefits) at local effective tax rates. This reconciliation is not
in accordance with, or an alternative method for, generally accepted accounting
principles in the United States, and may be different from similar measures
presented by other companies. The presentation of this financial measure
facilitates meaningful comparison with prior periods. </FONT></P>

<P ALIGN=LEFT><FONT SIZE=3> Forward-Looking Statements</FONT></P>

<P ALIGN=LEFT><FONT SIZE=3> This press release contains
forward-looking statements about the Company&#146;s performance. These
statements are based on management&#146;s estimates, assumptions and projections
and are not guarantees of future performance. The Company assumes no obligation
to update these statements. Actual results may differ materially from results
expressed or implied in these statements as the result of risks, uncertainties
and other factors including, but not limited to: (a) unanticipated variations in
sales volume, (b) economic conditions and exchange rates, (c) actions by
competitors, (d) the continuation of key vendor relationships, (e) the ability
to maintain satisfactory loan agreements with lenders, (f) risks associated with
the delivery of merchandise to customers utilizing common carriers, (g) the
operation of the Company&#146;s management information systems, and (h)
unanticipated legal and administrative proceedings. Please refer to the Forward
Looking Statements section contained in Item 7 of the Company&#146;s Form 10-K
for a more detailed explanation of the inherent limitations in such
forward-looking statements. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=3><B>-- End --</B></FONT></P>

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