BASIS OF PRESENTATION

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

Systemax Inc., through its operating subsidiaries, is primarily a direct marketer of brand name and private label industrial and business equipment and supplies in North America going to market through a system of branded e-commerce websites and relationship marketers. As previously disclosed, in August 2018 the Company sold its France-based IT business. With the completion of the sale, Systemax operates and is internally managed in one reportable business segment. The Company sells a wide array of industrial and general business hard goods and supplies and to a lesser extent products that would fall into the generally recognizable category of maintenance, repair and operations ("MRO"), markets the Company has served since 1949. Because of the large number of products and product categories the Company offers, providing information on the amount of revenue derived from transactions with external customers for each product or groupings of products is impractical.

Included in discontinued operations is the Company's former France-based IT value added reseller business sold in August 2018, the SARL Businesses sold in March 2017 and the Company's former North American Products Group ("NATG) business sold in December 2015. The France business and SARL Businesses were reported within the Company's former European Technology Products Group ("ETG") segment and the NATG business was reported within the Company's former NATG segment.

The sale of these businesses met the “strategic shift with major impact” criteria as defined under Accounting Standards Update ("ASU") 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which requires disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation.   Under ASU 2014-08, in order for a disposal to qualify for discontinued operations presentation in the financial statements, the disposal must be a “strategic shift” with a major impact for the reporting entity. If the entity meets this threshold, and other requirements, only the components that were in operation at the time of disposal are presented as discontinued operations. Therefore, the prior year results of the France business, SARL Businesses and NATG are included in discontinued operations in the accompanying consolidated financial statements.

The Company sold its France business, in 2018, and recorded a pre-tax book gain of approximately $178.9 million. Net sales of the France business, included within discontinued operations, totaled $352.0 million in 2018. Net gain from the sale of the France business and eight months of operating activity, included within discontinued operations, totaled $175.8 million in 2018.

For the year ended December 31, 2018, net income included in discontinued operation from the discontinued SARL Businesses totaled $0.2 million.

For the year ended December 31, 2020, net income from the discontinued NATG business totaled $1.3 million and for the years ended December 31, 2019 and 2018, net losses from the discontinued NATG business totaled $1.5 million and $0.8 million, respectively.

During 2018 the Company's recorded a net gain of $3.1 million, in continuing operations, related to the settlement of state audits previously disclosed in its 2013 Form 10-K filing offset by an impairment charge resulting from the decision to impair the trade and domain names of C&H Distributors, which was recorded within selling, distribution and administrative expenses.

Related Party Transactions

During 2020, the Company made inventory purchases of approximately $3.2 million from an entity owned by immediate family members of the Company's Executive Chairman. Amounts outstanding at December 31, 2020 were de minimis and are recorded in Accounts payable in the accompanying Consolidated Balance Sheets. These transactions were carried out on an arm's length basis and with prior approval of the Company's Nominating and Corporate Governance Committee.