GLOBAL INDUSTRIAL Co - FORM 8-K/A - EX-99.1 - EXHIBIT 99.1 - December 7, 2015

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8-K/A - SYSTEMAX INC. 8-K/A 12-1-2015 - GLOBAL INDUSTRIAL Coform8ka.htm
Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On December 1, 2015,  Systemax Inc. (the “Company”) closed the previously announced transaction to divest certain Business to Business assets of its North American Technology Group (“NATG”), including the TigerDirect brand, to PCM, Inc. (“PCM”) for $14 million in cash.
 
The following unaudited pro forma condensed consolidated financial information is presented to show how the Company’s results may have appeared if the asset sale and subsequent wind down of NATG had occurred on September 30, 2015 (in the case of the condensed consolidated balance sheet and condensed consolidated statement of operations) or on January 1, 2014 (in the case of the condensed consolidated statement of operations).
 
The pro forma condensed consolidated financial statements do not necessarily reflect what the Company’s financial condition or results of operations would have been had the disposition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the Company.
 
1
Systemax Inc.
Pro Forma Condensed Consolidated Balance Sheet
(In millions)

   
As reported
September 30,
2015
    
Pro Forma
Adjustments
      
Pro Forma
Adjustments
      
Pro Forma
September 30,
2015
  
   
(Unaudited)
                
(Unaudited)
  
ASSETS:
                    
Current assets:
                    
Cash
  
$
136.1
    
$
12.7
  
a
  
$
-
      
$
148.8
  
Accounts receivable, net
    
305.5
      
(84.9
)
b
              
220.6
  
Inventories
    
217.7
      
(84.2
)
c
              
133.5
  
Prepaid expenses and other current assets
    
19.7
      
(5.9
)
d
              
13.8
  
Deferred income taxes
    
1.8
      
(0.3
)
e
              
1.5
  
Current assets of discontinued operations
    
-
      
175.3
  
f
    
(23.0
)
s
    
152.3
  
Total current assets
    
680.8
      
12.7
        
(23.0
)
      
670.5
  
                                     
Property, plant and equipment, net
    
38.0
      
(1.2
)
g
              
36.8
  
Deferred income taxes
    
6.2
      
(0.9
)
h
              
5.3
  
Goodwill and intangibles
    
20.1
      
-
                  
20.1
  
Other assets
    
4.0
      
(0.3
)
i
              
3.7
  
Assets of discontinued operations
    
-
      
2.4
  
j
              
2.4
  
Total assets
  
$
749.1
    
$
12.7
      
$
(23.0
)
    
$
738.8
  
                                     
                                     
LIABILITIES AND SHAREHOLDERS’ EQUITY:
                                    
Current liabilities:
                                    
Accounts payable
  
$
347.0
    
$
(140.4
)
k
  
$
-
      
$
206.6
  
Accrued expenses and other current liabilities
    
83.0
      
(19.6
)
l
              
63.4
  
Current portion of long-term debt
    
1.2
      
(0.9
)
m
              
0.3
  
Current liabilities of discontinued  operations
     -      
160.9
  
n
    
32.0
  
t
    
192.9
  
Total current liabilities
    
431.2
      
-
        
32.0
        
463.2
  
                                     
Long-term debt
    
0.5
      
(0.3
)
o
              
0.2
  
Other liabilities
    
28.7
      
(16.3
)
p
              
12.4
  
Liabilities of discontinued operations
     -      
16.6
  
q
              
16.6
  
Total liabilities
    
460.4
      
-
        
32.0
        
492.4
  
                                     
Commitments and contingencies
                                    
                                     
Shareholders’ equity:
                                    
Preferred stock
    
-
                          
-
  
Common stock
    
0.4
                          
0.4
  
Additional paid-in capital
    
184.1
                          
184.1
  
Treasury stock
    
(24.7
)
                        
(24.7
)
Retained earnings
    
141.9
      
12.7
  
r
    
(55.0
)
u
    
99.6
  
Accumulated other comprehensive loss
    
(13.0
)
                        
(13.0
)
Total shareholders’ equity
    
288.7
      
12.7
        
(55.0
)
      
246.4
  
                                     
Total liabilities and shareholders’ equity
  
$
749.1
    
$
12.7
      
$
(23.0
)
    
$
738.8
  

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
 
2
Systemax Inc.
Pro Forma Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except per share amounts)
 
   
As reported
 Nine Months
Ended
September 30,
2015
    
Pro Forma
Adjustments
    
Pro Forma Nine
Months Ended
September 30,
2015
  
Net sales
  
$
2,225.1
    
$
(933.9
)
a
$
1,291.2
  
Cost of sales
    
1,905.2
      
(859.3
)
a
  
1,045.9
  
Gross profit
    
319.9
      
(74.7
)
    
245.3
  
Selling, general & administrative expenses
    
339.7
      
(107.8
)
a
  
231.9
  
Special charges
    
36.4
      
(35.0
)
a
  
1.4
  
Operating income (loss) from continuing operations
    
(56.2
)
    
68.2
      
12.0
  
Foreign currency exchange (income) loss
    
7.0
      
(0.3
)
a
  
6.7
  
Interest and other (income) expense, net
    
0.5
      
0.1
   a   
0.6
  
Income (loss) before income taxes
    
(63.7
)
    
68.4
      
4.7
  
Provision for income taxes
    
3.6
      
(0.1
)
b
  
3.5
  
Net income (loss) from continuing operations
  
$
(67.3
)
  
$
68.5
    
$
1.2
  
Net income (loss) per common share from continuing operations:
                        
Basic
  
$
(1.81
)
          
$
0.03
  
Diluted
  
$
(1.81
)
          
$
0.03
  
                         
Weighted average common and common equivalent shares:
                        
Basic
    
37.1
              
37.1
  
Diluted
    
37.1
              
37.1
  
 
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
 
3
Systemax Inc.
Pro Forma Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except per share amounts)
 
 
  
As reported
Year Ended
December 31, 2014
    
Pro Forma
Adjustments
    
Pro Forma
Year Ended
December 31, 2014
  
Net sales
  
$
3,442.8
    
$
(1,691.0
)
a
$
1,751.8
  
Cost of sales
    
2,949.6
      
(1,518.9
)
a
  
1,430.7
  
Gross profit
    
493.2
      
(172.1
)
    
321.1
  
Selling, general & administrative expenses
    
494.7
      
(190.1
)
a
  
304.6
  
Special charges
    
24.4
      
(12.1
)
a
  
12.3
  
Operating income (loss) from continuing operations
    
(25.9
)
    
30.1
      
4.2
  
Foreign currency exchange (income) loss
    
5.4
      
(0.2
)
a
  
5.2
  
Interest and other (income) expense, net
    
1.3
      
(0.2
)
a
  
1.1
  
Income (loss) before income taxes
    
(32.6
)
    
30.5
      
(2.1
)
Provision for income taxes
    
4.9
      
(0.7
)
b
  
4.2
  
Net income (loss) from continuing operations
  
$
(37.5
)
  
$
31.2
    
$
(6.3
)
Net income (loss) per common share from continuing operations:
                        
Basic
    
(1.01
)
            
(0.17
)
Diluted
    
(1.01
)
            
(0.17
)
 
                        
Weighted average common and common equivalent shares:
                        
Basic
    
37.1
              
37.1
  
Diluted
    
37.1
              
37.1
  
 
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
 
4
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

Pro Forma adjustments to the Condensed Consolidated Balance Sheet as of September 30, 2015

(a) To record cash proceeds of $14.0 million, net of transaction costs of $1.3 million.
(b) To reclassify net accounts receivable balances of NATG to current assets of discontinued operations.
(c) To reclassify net inventory balances of NATG to current assets of discontinued operations.
(d) To reclassify prepaid expenses and other current assets balances of NATG to current assets of discontinued operations.
(e) To reclassify deferred income taxes balances of NATG to current assets of discontinued operations.
(f) Represents current assets, excluding cash, of discontinued NATG operations.
(g) To reclassify property, plant and equipment, net balances of NATG to assets of discontinued operations.
(h) To reclassify deferred income taxes of NATG to assets of discontinued operations.
(i) To reclassify other assets of NATG to assets of discontinued operations.
(j) Represents long term assets of discontinued NATG operations.
(k) To reclassify accounts payable balances of NATG to current liabilities of discontinued operations.
(l) To reclassify accrued expenses and other current liabilities balances of NATG to current liabilities of discontinued operations.
(m) To reclassify current portion of long-term debt balances of NATG to current liabilities of discontinued operations.
(n) Represents current liabilities of discontinued NATG operations.
(o) To reclassify long-term debt balances of NATG to liabilities of discontinued operations.
(p) To reclassify other liabilities balances of NATG to liabilities of discontinued operations.
(q) Represents liabilities of discontinued NATG operations.
(r) To record retained earnings impact of cash proceeds of $14.0 million, net of transaction costs of $1.3 million.
(s) To record estimated write downs of inventory and accounts receivable balances during the wind down of discontinued operations.
(t) To accrue for estimated severances, professional and other fees and lease exit costs to be incurred during the wind down of discontinued operations.
(u) Retained earnings impact of charges related to the wind down of discontinued operations.
 
Pro Forma adjustments to the Condensed Consolidated Statements of Operations as of September 30, 2015 and December 31, 2014

(a) To eliminate the revenues and directly attributable expenses of discontinued operations.
(b) To adjust the provision for income taxes related to discontinued operations.
 
 
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