Mike Smargiassi - Investor Relations, Brainerd Communicators Larry Reinhold - President and Chief Executive Officer

Good afternoon, ladies and gentlemen and welcome to Systemax Inc.’s First Quarter 2016 Earnings Call. At this time, I would like to turn the call over to Mike Smargiassi of Brainerd Communicators. Please go ahead.

Thank you and welcome to the Systemax first quarter 2016 earnings call. Today’s call has been pre-recorded and will include formal remarks from Larry Reinhold, President and Chief Executive Officer. We will not be hosting a live Q&A session at the end of today’s call. If you should have any questions on first quarter results, please contact Brainerd Communicators or Systemax. Contact details can be found in the press release issued today and at www.systemax.com. Today’s 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 forward-looking statements caption and 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 presenting the entire North American Technology Products Group as a discontinued operation and excluding certain recurring and nonrecurring 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 those 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. As a reminder and as previously noted on the company’s fourth quarter conference call in November 2015, Systemax announced the decision to sell most of its North American Technology business and to wind down the remaining operations to fully exit the business. A substantial portion of NA Tech was its retail operations, which peaked at 42 stores in 2011. From 2012 through the first half of 2015, 39…

Thanks, Mike and good afternoon and thank all of you for joining us today. During the first quarter, we continue to focus on optimizing the performance in our Industrial Products Group, progressing on the turnaround in our EMEA Technology Group and winding our discontinued North America Technology Group activities. Industrial had another successful quarter as we grew revenues for the 25th consecutive quarter. And in EMEA, we improved our bottom line performance significantly. In NA Tech, we fully exited business operations as we sold all remaining inventory, closed all remaining retail stores and the warehouse. We expect remaining wind down activities will be substantially completed by the end of the second quarter. In looking at our first quarter consolidated non-GAAP performance, it’s clear that we have significantly improved the financial health of Systemax with the NA Tech exit, which has also made the performance and underlying value of our other businesses more visible to investors. Consolidated revenue reflects continued top line growth in industrial offset by a modest decline in EMEA, which was due primarily to currency. We delivered consolidated gross margin improvement of 130 basis points, which was driven by improved margins in EMEA as well as a larger contribution from the higher margin industrial business. Consolidated SG&A increased modestly on an absolute basis, primarily as a result of the inclusion of PEG in the first quarter for industrial. Consolidated operating margin was 0.4%, flat to last year. Turning first to industrial, in the quarter, we marked the first anniversary of the PEG acquisition, made initial progress on our efforts to optimize our distribution network and delivered modest organic top line growth despite published surveys reporting that the North America MRO market is flat to modestly contracting. However, this businesses overall performance was somewhat disappointing as its operating margin…

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.