Systemax Tops $1B in Sales for First Time

A renewed Global Industrial brand and customer initiatives throughout the pandemic led to considerable sales growth in 2020.

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Systemax, which does business primarily through its Global Industrial subsidiary, reported its 2020 fourth quarter and full-year financial results on Tuesday, showing that the company's considerable growth throughout last year led to a major company milestone: $1 billion in annual sales.

Port Washington, NY-based Systemax reported total 2020 sales of $1.03 billion — the company's first time crossing the $1 billion mark — and up 8.7 percent over 2019. Gross profit grew 9.6 percent as margin improved 30 basis points to 34.7 percent. Operating profit of $84 million grew 27.2 percent as margin grew 120 basis points and total 2020 profit of $64 million jumped 28.2 percent.

In the fourth quarter, Systemax's total sales of $274 million increased 23.2 percent year-over-year. Gross profit increased 24.1 percent as margin ticked up 20 basis points to 34.0 percent. Operating profit of $21 million improved 4.7 percent as margin jumped 120 basis points to 7.7 percent. Total Q4 profit of $16 million jumped 43.9 percent 

Sequentially, Q4 sales were down 4.2 percent from Q3, while net profit trailed Q3's $24.6 million.

Systemax's 2020 full-year and Q4 results benefitted from having an extra four-day sales week compared to 2019. But its strong growth was still exemplified in average daily sales, which increased 7.0 percent for the full year over 2019.

In its Q4 earnings call with analysts, Systemax said that pandemic-related consumable products (i.e. PPE and sanitizing product) comprised about 9 percent of Q4 sales, dwarfing the 2 percent they comprised in Q4 2019. Meanwhile, e-commerce was responsible for 55 percent of Systemax's Q4 transaction count, the same figure it had in Q3.

"This industry-leading growth reflects the continued execution of our ACE (Accelerating the Customer Experience) strategy and the deliberate and swift actions we took in an unprecedented business environment," said Barry LItwin, Systemax CEO. "We will continue to invest in our growth and believe our strategy has tremendous relevance in the marketplace today. With rapid improvements made to our end-to-end customer experience and the further evolution of our e-commerce platform, we are strengthening our competitive position and see accelerated customer acquisition and retention. As a result, we believe we are well-positioned to continue to capitalize on the growth of B2B e-commerce and to capture additional market share in a highly fragmented industrial distribution marketplace."

WATCH: 5 Minutes With ID: Systemax CEO Barry Litwin (published Nov. 18)

Systemax was No. 19 on Industrial Distribution's 2020 Big 50 List.

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