Systemax Inc., which sells personal computers and electronics through a variety of direct and retail channels as well as through the CompUSA retail chain, generated $752.3 million during first-quarter 2009, up from $724.7 million in first-quarter 2008.
But the company’s cost of sales rose even faster than its revenue, rising from $611 million to $644.7 million, and its selling and administrative expenses rose from $87.7 million to $92.5 million. Between quarters, the company aggressively priced its products, offered freight discount incentives and saw sales within its higher-margin Industrial Products operations drop.
For the quarter, Systemax reported net income of $8.7 million, down from $18.1 million in first-quarter 2008.
“Market conditions are challenging, but we are growing share and attracting customers,” Gilbert Fiorentino, chief executive of Systemax’s Technology Products Group said in a statement.
Fiorentino continued, “We are price-competitive and that’s a necessary ingredient of success in our business. In addition to building our online presence, we also continue to make investments in the brick and mortar side of our business. We are continuing to remodel our CompUSA stores in the United States with our innovative new retail shopping system, Retail 2.0, to bring the best of the Web to our retail stores. The results of the Retail 2.0 initiative have been very positive, with improvements in close rate and overall customer satisfaction.”
“In the first quarter our Industrial Products revenue was down 20% from the prior year,” chairman and CEO Richard Leeds said in a statement. “The significant slowdown in purchasing by our U.S. business customers that started midway through the fourth quarter of 2008 is continuing in 2009.”
