Systemax(US:GIC)2023-05-01 16:00Financial Performance - Consolidated net sales decreased by 5.1% to $273.8 million compared to $288.6 million in the previous year[58] - Consolidated gross margin declined to 35.9% for Q1 2023, down from 37.4% in Q1 2022[58] - Consolidated operating income from continuing operations decreased by 39.7% to $17.8 million compared to $29.5 million last year[58] - Net income per diluted share from continuing operations decreased by 38.6% to $0.35 compared to $0.57 last year[58] - Average daily sales declined by 3.7% in the first quarter, reflecting a soft demand environment[51] - Sales in the United States were down 3.7%, while sales in Canada decreased by 17.3% in local currency[51] - Net sales decreased by 5.1% in Q1 2023 compared to Q1 2022, with U.S. sales down 3.7% and Canada sales down 17.3% in local currency[62] - Gross margin declined by 150 basis points in Q1 2023 compared to Q1 2022, influenced by lower price realization and inventory costs[65] - Operating margin declined by 370 basis points in Q1 2023 compared to Q1 2022, driven by decreased sales and lower gross margin[67] Expenses and Costs - Consolidated selling, distribution, and administrative costs increased by 2.9% to $80.6 million[59] - Selling, distribution, and administrative expenses (SD&A) as a percentage of sales increased by 230 basis points in Q1 2023 compared to Q1 2022, reflecting increased marketing efforts and salary costs[66] Cash Flow and Liquidity - Net cash provided by operating activities from continuing operations was $28.5 million in Q1 2023, a significant increase from a cash outflow of $14.0 million in Q1 2022[71] - Cash and cash equivalents increased to $48.2 million as of March 31, 2023, up from $28.5 million at the end of 2022[70] - The company had over $160 million of liquidity (cash and undrawn line of credit) in the U.S. as of March 31, 2023[82] - The company maintains a $125.0 million secured revolving credit facility, with total availability of $118.0 million as of March 31, 2023[76] - Accounts receivable days outstanding were 38.3 in 2023 compared to 37.8 in 2022, indicating a slight increase in collection time[72] Management and Internal Controls - The Company's management, including the CEO and CFO, concluded that the disclosure controls and procedures are effective as of March 31, 2023[88] - The internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting in accordance with generally accepted accounting principles[89] - There have been no changes in the Company's internal controls over financial reporting during the quarterly period ended March 31, 2023, that materially affected the internal control[91] Future Outlook - The company expects continued margin variability due to the current economic environment and inflationary pressures[51] - The company anticipates capital expenditures in the range of $6.0 to $8.0 million for 2023, focusing on technological upgrades and distribution facilities[80] Customer Metrics - Customer retention remained healthy, reflecting the value of the company's managed sales organization[51]