Systemax(US:GIC)2022-08-01 16:00Financial Performance - Consolidated sales increased 16.8% to $318.5 million for Q2 2022 compared to $272.6 million last year[58] - Consolidated gross margin declined to 35.5% for Q2 2022 compared to 36.0% last year[66] - Consolidated operating income from continuing operations increased 23.5% to $30.5 million for Q2 2022 compared to $24.7 million last year[66] - Net income per diluted share from continuing operations increased 7.3% to $0.59 for Q2 2022 compared to $0.55 last year[66] - Consolidated sales increased 15.9% to $607.1 million for the six months ended June 30, 2022 compared to $523.7 million last year[66] - Consolidated gross margin increased to 36.4% for the six months ended June 30, 2022 compared to 33.5% last year[66] - Consolidated operating income from continuing operations increased 91.7% to $60.0 million for the six months ended June 30, 2022 compared to $31.3 million last year[66] - Net income per diluted share from continuing operations increased 65.7% to $1.16 for the six months ended June 30, 2022 compared to $0.70 last year[66] - Consolidated net sales increased by 16.8% to $318.5 million for the three months ended June 30, 2022, and by 15.9% to $607.1 million for the six months ended June 30, 2022, compared to the same periods in 2021[73] - Consolidated gross profit rose by 15.3% to $113.0 million for the second quarter and by 26.0% to $220.8 million for the first half of 2022[73] - Operating income from continuing operations increased by 23.5% to $30.5 million for the three months and by 91.7% to $60.0 million for the six months ended June 30, 2022[73] - Net income from continuing operations was $22.6 million for the second quarter, a 7.1% increase, and $44.4 million for the first half, a 66.2% increase compared to 2021[73] - Average daily sales increased by 16.9% during the second quarter and by 15.9% for the six months ended June 30, 2022[73] Cost and Expenses - Selling, distribution, and administrative (SD&A) costs as a percentage of net sales decreased by 100 basis points for both the three and six months ended June 30, 2022, compared to the same periods in 2021[77] - The effective income tax rate for the three months ended June 30, 2022, was 25.2%, an increase of 11.0 percentage points compared to the same period in 2021[73] Cash Flow and Liquidity - Cash and cash equivalents increased by $8.1 million to $23.5 million as of June 30, 2022, compared to $15.4 million at the end of 2021[84] - Working capital increased by $31.2 million, primarily due to increased inventory balances and accounts receivable[86] - Net cash used in operating activities from continuing operations was $2.1 million in 2022, a decrease from $20.5 million provided in 2021, primarily due to a $51.4 million cash usage in working capital compared to $7.9 million in 2021[87] - Cash generated from net income adjusted by other non-cash items provided $49.3 million in 2022, up from $28.4 million in 2021, attributed to higher net income for the six months ended June 30, 2022[87] - Net cash used in investing activities totaled $2.1 million in 2022, consistent with 2021, primarily for warehouse machinery and equipment related to the new Canadian distribution center[88] - Net cash provided by financing activities was $12.5 million in 2022, mainly from short-term borrowings of $25.5 million, with dividends paid totaling approximately $13.9 million[89][90] - The company maintains a $75.0 million secured revolving credit facility, with total outstanding borrowings of $30.0 million and total excess availability of $41.3 million as of June 30, 2022[91] - As of June 30, 2022, the company had over $59 million in liquidity (cash and undrawn line of credit) in the U.S.[96] Capital Expenditures and Obligations - Anticipated capital expenditures for 2022 are in the range of $7.0 to $9.0 million, with no contractual commitments at this time[94] - The company is obligated for approximately $107.8 million under non-cancelable operating leases, with remaining cash expenditures anticipated at $7.8 million for 2022[97] Strategic Initiatives - The company continues to pursue acquisitions and strategic transactions to expand or complement its business[51] - The company is experiencing strong customer demand across all product categories, particularly in managed sales channels[58] Risk Management - The company had no outstanding foreign currency options or forward exchange contracts as of June 30, 2022, to limit currency fluctuations[100] - A hypothetical one percentage point change in average interest rates is not expected to materially affect the company's financial position or cash flows[101]