XML 27 R16.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Subsequent Events | 6 Months Ended
--- | ---
Jun. 30, 2018
Subsequent Events [Abstract] |
Subsequent Events | Subsequent Events On August 1, 2018 the Company entered into a termination agreement for the lease on its Jefferson, Georgia warehouse for approximately $8 million, which has been fully accrued at June 30, 2018, and is recorded in Accrued expenses and other current liabilities and Other Liabilities (long term) in the accompanying Condensed Consolidated Balance Sheets. On July 11, 2018, the Company announced it had received an irrevocable binding offer from Bechtle AG, Germany's largest independent IT systems integrator, for the sale of Inmac Wstore, the Company's France-based IT value added reseller business. On July 30, 2018, the Company entered into its Definitive Share Purchase Agreement with Bechtle AG upon the conclusion of its successful consultation with the Inmac Wstore Work's Council. The agreement to sell our France business is denominated on a cash-free, debt free basis, and it will include normalized working capital adjustments. On a pro forma basis, assuming the sale had closed on June 30, 2018 and using current exchange rates of 1.17 USD to EUR, the enterprise value of the France business would have been $246 million and its equity value, inclusive of cash on hand and other adjustments, would have been approximately $270 million. Transaction and exit expenses associated with the sale are expected to be between $6 to $7 million, including approximately $1.2 million related to the acceleration of the vesting of certain employee restricted stock awards. Tax expense associated with the transaction is expected to be between $18 and $24 million on a pre-NOL utilization basis. The Company anticipates recognizing a pretax book gain of between $182 and $188 million on the sale, and after funding transaction expenses, the total cash available to U.S. shareholders on a tax-effected basis resulting from this transaction would have been between $238 and $245 million. The sale is subject to customary regulatory approvals and is expected to close later in 2018. The following unaudited pro forma condensed consolidated financial information is presented to show how the Company's results may have appeared if the sale had occurred on June 30, 2018 (in the case of the Condensed Consolidated Balance Sheet and Condensed Statement of Operations) or on January 1, 2017 (in the case of the Condensed Consolidated Statements of Operations). As the sale will not be completed until later in 2018, this unaudited pro forma condensed consolidated financial information will change to reflect exchange rates and financial operations and conditions at the time of the sale. The pro forma condensed consolidated financial statements do not necessarily reflect what the Company's financial conditions or results of operations would have been had the sale occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the Company. Systemax Inc. Pro Forma Condensed Consolidated Balance Sheets (Unaudited) (In millions)
| As reported June 30, |  | Pro Forma adjustments (a) |  | Other Pro Forma adjustments |  | Pro Forma June 30,
| 2018 |  |  |  |  |  | 2018
ASSETS: |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |
Cash | $ | 96.9 |  |  | $ | 0.0 |  |  | 220.1 |  | (b) | 317.0 |
Accounts receivable, net | 189.5 |  |  | (106.9 | ) |  |  |  | 82.6 |
Inventories | 126.4 |  |  | (37.0 | ) |  |  |  | 89.4 |
Prepaid expenses and other current assets | 5.7 |  |  | (0.8 | ) |  |  |  | 4.9 |
Total current assets | 418.5 |  |  | (144.7 | ) |  | 220.1 |  |  | 493.9 |
Property, plant and equipment, net | 14.6 |  |  | (1.2 | ) |  |  |  | 13.4 |
Deferred income taxes | 25.8 |  |  | (5.9 | ) |  |  |  | 19.9 |
Goodwill and intangibles | 14.0 |  |  | (3.8 | ) |  |  |  | 10.2 |
Other assets | 1.5 |  |  | (0.3 | ) |  |  |  | 1.2 |
Total assets | $ | 474.4 |  |  | $ | (155.9 | ) |  | 220.1 |  |  | 538.6 |
LIABILITIES AND SHAREHOLDERS’ EQUITY: |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |
Accounts payable | $ | 187.7 |  |  | $ | (76.6 | ) |  |  |  | 111.1 |
Accrued expenses and other current liabilities | 67.6 |  |  | (24.3 | ) |  | (0.7 | ) | (c) | 42.6 |
Total current liabilities | 255.3 |  |  | (100.9 | ) |  | (0.7 | ) |  | 153.7 |
Deferred income tax liability | 0.1 |  |  |  |  |  |  |  | 0.1 |
Other liabilities | 21.7 |  |  | (3.8 | ) |  |  |  | 17.9 |
Total liabilities | 277.1 |  |  | (104.7 | ) |  | (0.7 | ) |  | 171.7 |
Commitments and contingencies |  |  |  |  |  |  |
Shareholders’ equity: |  |  |  |  |  |  |
Preferred stock | 0.0 |  |  |  |  |  |  |  | 0.0 |
Common stock | 0.4 |  |  |  |  |  |  |  | 0.4 |
Additional paid-in capital | 185.7 |  |  |  |  |  | 1.2 |  | (d) | 186.9 |
Treasury stock | (20.6 | ) |  |  |  |  |  |  | (20.6 | )
Retained earnings | 32.2 |  |  | (51.2 | ) |  | 216.0 |  | (e) | 197.0 |
Accumulated other comprehensive income(loss) | (0.4 | ) |  |  |  |  | 3.6 |  | (f) | 3.2 |
Total shareholders’ equity | 197.3 |  |  | (51.2 | ) |  | 220.8 |  |  | 366.9 |
Total liabilities and shareholders’ equity | $ | 474.4 |  |  | $ | (155.9 | ) |  | $ | 220.1 |  |  | $ | 538.6 |
Pro Forma adjustments to the Unaudited Condensed Consolidated Balance Sheet as of June 30, 2018 (a) Reverse the June 30, 2018 balance sheet of the Company's France business, excluding cash the Company retains. (b) Record the proceeds from sale ($246.0 million) less deal transaction costs ($4.9 million) and estimated tax on sale ($21.0 million). (c) Record payment of deal related accrued professional fees. (d) Record charge related to the acceleration of certain restricted stock awards ("RSU's") granted to sold entities employees. (e) Record retained earnings impact from net sale proceeds ($246.0 million), accelerated amortization expense of RSU's ($1.2 million), cumulative translation adjustments ($3.6 million), deal transaction costs ($4.2 million) and estimated tax on sale ($21.0 million). (f) Record write off of cumulative translation adjustments. Systemax Inc. Pro Forma Condensed Consolidated Statements of Operations (Unaudited) (In millions, except per share amounts)
| As reported Six Months Ended June 30, |  | Pro Forma adjustments (a) |  | Pro Forma Six Months Ended June 30,
| 2018 |  |  |  | 2018
Net sales | $ | 718.3 |  |  | $ | (274.9 | ) |  | $ | 443.4 |
Cost of sales | 520.5 |  |  | (229.6 | ) |  | 290.9 |
Gross profit | 197.8 |  |  | (45.3 | ) |  | 152.5 |
Selling, distribution & administrative expenses | 152.4 |  |  | (29.0 | ) | (b) | 123.4 |
Operating income from continuing operations | 45.4 |  |  | (16.3 | ) | (b) | 29.1 |
Interest and other (income) expense, net | 0.1 |  |  | 0.0 |  |  | 0.1 |
Income from continuing operations before income taxes | 45.3 |  |  | (16.3 | ) | (b) | 29.0 |
Provision for income taxes | 13.3 |  |  | (6.1 | ) | (c) | 7.2 |
Net income (loss) from continuing operations | 32.0 |  |  | (10.2 | ) |  | 21.8 |
Net income per common share from continuing operations: |  |  |  |  |
Basic | $ | 0.86 |  |  |  |  | $ | 0.59 |
Diluted | $ | 0.84 |  |  |  |  | $ | 0.58 |
Weighted average common and common equivalent shares: |  |  |  |  |
Basic | 37.2 |  |  |  |  | 37.2 |
Diluted | 37.9 |  |  |  |  | 37.9 |
Pro Forma adjustments to the Unaudited Condensed Consolidated Statements of Operations for the six months ended June 30, 2018 (a) To eliminate the revenues and directly attributable expenses of our sold France business. (b) Included within SD&A expenses is $0.5 million of corporate overhead charges formerly charged to our France business and $0.7 million of deal related accrued professional fees recharged to the sold France business. (c) Included within the provision for income taxes is $0.1 million of estimated tax impacts of the above corporate overhead charges and deal related professional fees. Systemax Inc. Pro Forma Condensed Consolidated Statements of Operations (Unaudited) (In millions, except per share amounts)
| As reported Year Ended December 31, |  | Pro Forma adjustments (a) |  | Pro Forma Year Ended December 31,
| 2017 |  |  |  | 2017
Net sales | $ | 1,265.4 |  |  | $ | (473.6 | ) |  | $ | 791.8 |
Cost of sales | 914.0 |  |  | (395.4 | ) |  | 518.6 |
Gross profit | 351.4 |  |  | (78.2 | ) |  | 273.2 |
Selling, distribution & administrative expenses | 279.8 |  |  | (52.2 | ) | (b) | 227.6 |
Special charges | 0.3 |  |  | 0.0 |  |  | 0.3 |
Operating income from continuing operations | 71.3 |  |  | (26.0 | ) | (b) | 45.3 |
Interest and other (income) expense, net | 0.5 |  |  | (0.3 | ) |  | 0.2 |
Income from continuing operations before income taxes | 70.8 |  |  | (25.7 | ) | (b) | 45.1 |
Provision for income taxes | (5.3 | ) |  | (9.0 | ) | (c) | (14.3 | )
Net income from continuing operations | 76.1 |  |  | (16.7 | ) |  | 59.4 |
Net income per common share from continuing operations: |  |  |  |  |
Basic | $ | 2.06 |  |  |  |  | $ | 1.61 |
Diluted | $ | 2.02 |  |  |  |  | $ | 1.58 |
Weighted average common and common equivalent shares: |  |  |  |  |
Basic | 37.0 |  |  |  |  | 37.0 |
Diluted | 37.6 |  |  |  |  | 37.6 |
Pro Forma adjustments to the Unaudited Condensed Consolidated Statements of Operations for the year ended December 31, 2017 (a) To eliminate the revenues and directly attributable expenses of our sold France business. (b) Included within SD&A expenses is $0.9 million of corporate overhead charges formerly charged to our France business. (c) Included within the provision for income taxes is $0.3 million of estimated tax benefits of the above corporate overhead charges returning to the U.S.

X
- References No definition available. + Details
Name: | us-gaap_SubsequentEventsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 + Details
Name: | us-gaap_SubsequentEventsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration