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Consumer-sales dip dents Systemax results

Systemax offices in Port Washington. (April 10, 2002)

Systemax offices in Port Washington. (April 10, 2002) Credit: Newsday, 2002 / Kathy Kmonicek

Systemax Inc., a Port Washington-based electronics retailer, reported Tuesday that first-quarter earnings plunged 48 percent from one year earlier as its consumer sales slipped.

The firm is Long Island's 15th largest publicly traded company by stock market value, and it sells computers, consumer electronics and industrial products in North America and Europe. During the first three months of the year, its sales fell 2 percent to $914 million.

"I am disappointed in our results for the quarter," said Richard Leeds, the company's chairman and chief executive.

During a conference call with investors late Tuesday, Leeds pointed to a handful of bright spots. The firm's computer sales rose 20 percent, to $262 million. Its sales of products to businesses rose 7 percent, to $513 million. And its industrial sales increased 28 percent, to $90 million.

But those gains were eclipsed by an 11 percent drop in consumer sales, particularly computer components, televisions and other electronics. Overall, consumer sales fell to $401 million. Leeds said the slump was part of a marketwide drop in sales of consumer electronics.

Systemax shares fell 3.49 percent to $16.57 in regular trading hours Tuesday. The company released its earnings report after the market closed. Shares were unchanged in after-hours trading.

The company also had to pay $1.9 million in one-time charges during the first quarter, including legal fees stemming from the firing of a former top executive. The official, Gilbert Fiorentino, left Systemax in May 2011 and agreed to repay the company $11 million, following an internal investigation prompted by an anonymous whistle-blower. The company said in June the matter was under investigation by the U.S. Securities and Exchange Commission.


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