Good day, ladies and gentlemen, and welcome to the Systemax Inc. Third Quarter 2013 Financial Results Conference Call. [Operator Instructions] As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Mr. Mike Smargiassi. Please go ahead, sir.

Thank you. Welcome to the Systemax Third Quarter 2013 Earnings Conference Call. I'm here today with Richard Leeds, Chairman and Chief Executive Officer of Systemax; and Larry Reinhold, Executive Vice President and Chief Financial Officer. This discussion may include certain forward-looking statements. It should be understood that actual results could differ materially from those projected due to a number of factors, including those described under the caption Forward-looking Statements in the company's annual report on Form 10-K and quarterly reports on Form 10-Q. I would like to highlight the non-GAAP metrics that are included in today's press release. The company believes that by excluding certain reoccurring and non-reoccurring adjustments from comparable GAAP measures investors have an additional meaningful measurement of the company's performance. As a result, this call will include a discussion of certain non-GAAP financial measures. The company has provided a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in today's press release. The press release is available on the company's website and will be filed with the SEC in a Form 8-K. This call is a property of and is copyrighted by Systemax Inc. I will now turn the call over to Mr. Richard Leeds.

Good afternoon, and thank you for joining us today. The quarter was once again led by strong results from our Industrial Products Group, which delivered double-digit improvement on the top line and significant improvement on the bottom line. The performance of our technology business, both in Europe and North America, remain a key area of focus for our management team. While overall results remain disappointing, there are a number of bright spots in the quarter as we continue to make progress in our initiatives to improve our profitability and strengthen our long-term performance. On a consolidated basis, we further expanded gross margins, driven by gains in both our Industrial Products and Technology Products segment. The Industrial Products Group delivered 14% revenue growth, a 160-basis-point expansion in adjusted operating margin and a 40% increase in adjusted operating income in the quarter. Top line growth remains broad-based as we continue to expand our product and category offerings, as well as our private label selection. Our New Jersey distribution center, which opened last year, delivered the operational efficiencies we planned. The launch of Industrial's branded e-commerce marketplace is on track, and we're pleased with its initial success. We have a number of sellers up and running and have a solid pipeline of new sellers. Feedback has been very positive, with sellers highlighting the unique value we provide given our B2B market focus. In our EMEA technology business, our results mirrored the second quarter as revenue declined 6% on a constant-currency basis. France delivered modest improvement in revenue and solid gross profit gains, and our Netherlands operation outperformed its local market. That said, all our other markets underperformed. We have continued the conversion to a Pan-European operating structure with centralized leadership and a shared service center for our back-office functions, which will facilitate deeper…

Thank you, Richard. Turning first to our consolidated revenue. Third quarter 2013 total sales were $791.8 million, a decline of 6.5% and off 6.8% on a constant-currency basis compared to the third quarter of 2012. Sales for the quarter were led by continued growth in our Industrial Products Group, which was more than offset by weakness in our technology businesses. Looking at our revenue by channel. Third quarter B2B channel sales were $528.3 million, an increase of 0.2% or a decline of 0.5% on a constant-currency and same-store basis. Our consumer sales were $263.5 million, a decrease of 17.5% or 15.6% on a constant-currency and same-store basis. Turning to our reporting segments. The Industrial Products Group had another strong quarter as revenue increased 13.9% year-over-year to $125.7 million, with growth across both core and new product categories. Gross profit increased in the quarter, and we delivered gross margin gains as we benefited from improving freight and warehouse efficiencies, driven by the distribution center we opened last year. These gains affirm our decision to invest in the expansion of our distribution infrastructure. We gained efficiencies as we stocked additional SKUs, improved inventory turns and expanded our private label offering. This resulted in a significant improvement in operating leverage, with non-GAAP operating income growing 40% to $10.9 million. At the end of the quarter, Global industrial SKUs totaled $835,000, up 6.5% sequentially and up 36% compared to a year ago. Sales for our Technology Products segment, which includes our European and North American operations, declined 9.6% to $665 million and 10.0% on a constant-currency basis. While non-GAAP operating loss was $3.5 million. Within our Technology Group, we've closed a number of underperforming retail stores and continued the expansion of our European shared services center. As such, during the third quarter, we incurred…

[Operator Instructions] And our first question comes from the line of Anthony Lebiedzinski from Sidoti & Company. Anthony C. Lebiedzinski - Sidoti & Company, LLC: So first, on the e-commerce marketplace, just wondering if you could just say how much did that launch contribute to your results in the quarter. I'm not sure if you can share exact numbers, but if you could kind of give some high-level commentary on your expectations going forward for that, that would be great.

Anthony, it's Richard. The -- I'm assuming you're talking about the industrial marketplace. Anthony C. Lebiedzinski - Sidoti & Company, LLC: Correct.

Yes. So there -- that model is we book the commission. Okay, we're not booking the entire sale. So the numbers would be very, very small because of that. It's just the commission that gets booked. Anthony C. Lebiedzinski - Sidoti & Company, LLC: Okay, okay. And then, how do you see that segment going forward? I mean, I know it's just off -- you just started that, but I mean, kind of your expectations for that for 2014 and beyond.

Yes. I mean, it's -- we're off to a slow start on purpose because we want to make sure that we get the service level right for both our sellers and for our customers. And so we're doing this very carefully, very planned. But I mean, I think it's a great business model as you could see from a number of people out there that are in the consumer business. And nobody has it, really, in the B2B place -- B2B marketplace yet. So I think it's going to work out really well for us over the long term. Anthony C. Lebiedzinski - Sidoti & Company, LLC: Okay. And then switching gears to the technology segment. You mentioned in your press release that you're moving aggressively to improve results. You also mentioned private label. So could you first talk about the steps that you're actually taking. I know you also mentioned store closings, but other than that, what should we expect? And also, if you could just give a number for private label SKU penetration now.

Okay. So we're -- hopefully, somebody's looking up for the number on that. But the -- I mean, the strategy going forward is we want to concentrate on making money. And it's a -- we're in the business of doing many, many things right at the same time. I don't think -- there's not 1 magic bullet that's -- to fix our business. We have to do -- like I said, do many things right, and we have a long, long list of things that we need to correct and check them off as we do them. It's anywhere from expanding our product offering to making sure that we're buying the right quantity, to making sure that we're buying at the right price. And that's just a few items on a very long list.

Anthony, it's Larry. I will -- I'll have to follow up with you on -- because I don't have it in the room with me, the number of private label products. But just recall, in all of our businesses, we sell products that we never touch, that we drop ship. We sell products that we source from domestic vendors, and then we have private label products that we bring ourselves from the manufacturing location. We -- in the -- particularly, in our tech business, the private label business, about 2 years ago, had a severe impact. I'm sure you recall. So it's come back from the depths of 2 years ago. We're solidly making our way back, adding products that we think are the right products to carry, and we have a solid pipeline of new products that we're working on bringing in, and we expect the business will continue to grow. Anthony C. Lebiedzinski - Sidoti & Company, LLC: Okay. That's helpful. And I know you've mentioned, in regards to your store base, that you expect to have 36 stores by the end of 2013. However, as you think about the business from a longer-term perspective, let's say, 2, 3 years from now, where would you see the number of stores that you would have?

I mean, that's a moving target. I mean, we're constantly reviewing the stores. So I don't really know if I have -- feel comfortable putting a number out there because times are changing, we're improving our operations in the stores daily. So I wouldn't really like to be out there with a number.

Anthony, I think that the store count will depend on the store results. So we look at these things. We have a consumer business here in North America. A lot of it that's -- a lot of it's in retail. Certainly, we're in Q4, so we're aggressively promoting products in our stores, and we expect to do that on a go-forward basis. And if -- but if stores don't perform and we don't think they're going to perform in the long term, we'll do what that -- what it takes. Conversely, if we think we want to expand, we will look at expanding as well. Anthony C. Lebiedzinski - Sidoti & Company, LLC: Okay. That makes sense. And lastly, a question for you, Larry. As far as the -- and I may have missed this, but the source of the tax rate. I mean, you had a large tax provision in the quarter even with having a operating loss. So can you just explain that? And also, what should we expect for the fourth quarter and 2014?

Okay. Well let's see. I don't know if we have enough time tonight to fully discuss it, but I'll... Anthony C. Lebiedzinski - Sidoti & Company, LLC: Maybe like the Reader's Digest version.

Yes. So in a nutshell, what happens -- we're a multinational, and so we have operations in a lot of countries around the world. Some of those operations are profitable like, the most noted, our largest outside of the U.S. is in France. And in those areas that we have -- are profitable, we pay taxes. We've got other locations, other countries that we are not as profitable or we're losing money currently. And in some of those locations, we have a tax loss. But we -- because we've had losses for a couple of years that we are not permitted under GAAP to record a tax benefit. So when you consolidate it all together, you add up the tax provisions in these sort of profitable and taxpaying jurisdictions with no tax benefit in some of the -- not all of the, some of the tax jurisdictions where we're losing money, and therefore, you get a very messy effective tax rate. I can't give you exactly -- I'm not -- we don't give any forward guidance, but I will tell you that our Q4 tax provision, which is, at that point, it's for the full year and you kind of know the full year numbers. In the quarters throughout the year, you're making estimates of what you think will happen in the year and then sort of truing up year-to-date. So in Q4, I'm pretty sure that the tax rate will be very complicated and difficult to understand and probably relate very directly to our pretax income. But again, I think it will be a combination of what we just -- what I just tried to articulate. It wasn't very clear. Tax provisions in jurisdictions where we are profitable, tax losses in other ones and with no tax benefit.

[Operator Instructions] And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to management for any further remarks.

Thank you, and we look forward to speaking to you next quarter.