Segment Information

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

5.	Segment Information

Systemax is primarily a direct marketer of brand name and private label products. Our operations are organized into two reportable business segments – Technology Products and Industrial Products.

Our Technology Products segment sells computers, computer supplies and consumer electronics which are marketed in North America, Puerto Rico and Europe. Most of these products are manufactured by other companies; however, we do offer a selection of products that are manufactured for us to our own design and marketed on a private label basis.

Our Industrial Products segment sells a wide array of industrial products and supplies which are marketed in North America. Most of these products are manufactured by other companies. Some products are manufactured for us to our own design and marketed on a private label basis.

The Company’s chief operating decision-maker is the Company’s Chief Executive Officer. The Company evaluates segment performance based on operating income, before net interest, foreign exchange gains and losses, special charges, internal management fees and income taxes. Corporate costs not identified with the disclosed segments are grouped as “Corporate and other expenses”.

The chief operating decision-maker reviews assets and makes significant capital expenditure decisions for the Company on a consolidated basis only. The accounting policies of the segments are the same as those of the Company.

The Company’s Industrial Products and Technology Products segments sell dissimilar products. Industrial products are generally higher in price, lower in volume and higher in product margin. Technology products are generally higher in volume, lower in price and lower in product margin. This results in higher operating margin for the Industrial Products segment. Each segment incurs specifically identifiable selling, general and administrative expenses, with the selling, general and administrative expenses for the Industrial Products segment being higher as a percentage of sales than those of the Technology Products segment as a result of the Industrial Products segment having a longer selling cycle than the Technology Products segment.

Financial information relating to the Company’s operations by reportable segment was as follows (in thousands):

	Three Months Ended
	March 31,
	2012			2011
Net sales:
Technology Products	$	821,889		$	858,263
Industrial Products	90,378			70,835
Corporate and other	1,311			769
Consolidated	$	913,578		$	929,867

Operating income (loss):
Technology Products	$	8,799		$	17,740
Industrial Products	8,248			6,857
Corporate and other expenses	(6,483		)	(5,972		)
Consolidated	$	10,564		$	18,625

Financial information relating to the Company’s operations by geographic area was as follows (in thousands):

	Three Months Ended
	March 31,
	2012		2011
Net sales:
United States	$	562,182	$	584,081
United Kingdom	132,416		117,999
Other Europe	166,097		167,545
Other North America	52,883		60,242
Consolidated	$	913,578	$	929,867

Revenues are attributed to countries based on the location of the selling subsidiary.

Financial information relating to the Company’s entity-wide product category sales was as follows (in millions):

	Three Months Ended
	March 31,
	2012		%	2011		%
Product Category:
Computers	$	262.2	29%	$	218.7	24%
Computer accessories & software	259.6		28%	270.6		29%
Consumer electronics	167.0		18%	205.6		22%
Computer components	108.5		12%	142.5		15%
Industrial products	90.4		10%	70.8		8%
Other	25.9		3%	21.7		2%
Consolidated	$	913.6	100.0%	$	929.9	100.0%