Company Quick10K Filing
Systemax
Price22.16 EPS1
Shares38 P/E23
MCap842 P/FCF13
Net Debt-98 EBIT50
TEV744 TEV/EBIT15
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-05-05
10-K 2019-12-31 Filed 2020-03-13
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-07
10-K 2018-12-31 Filed 2019-03-14
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-07
10-Q 2018-03-31 Filed 2018-05-08
10-K 2017-12-31 Filed 2018-03-15
10-Q 2017-09-30 Filed 2017-11-07
10-Q 2017-06-30 Filed 2017-08-08
10-Q 2017-03-31 Filed 2017-05-11
10-K 2016-12-31 Filed 2017-03-16
10-Q 2016-09-30 Filed 2016-11-07
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-10
10-K 2015-12-31 Filed 2016-03-17
10-Q 2015-09-30 Filed 2015-11-05
10-Q 2015-06-30 Filed 2015-08-06
10-Q 2015-03-31 Filed 2015-05-07
10-K 2014-12-31 Filed 2015-03-13
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-05
10-Q 2014-03-31 Filed 2014-05-06
10-K 2013-12-31 Filed 2014-03-12
10-Q 2013-09-30 Filed 2013-11-05
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-05-07
10-K 2012-12-31 Filed 2013-03-14
10-Q 2012-09-30 Filed 2012-11-06
10-Q 2012-06-30 Filed 2012-08-07
10-Q 2012-03-31 Filed 2012-05-08
10-K 2011-12-31 Filed 2012-03-08
10-Q 2011-09-30 Filed 2011-11-10
10-Q 2011-06-30 Filed 2011-08-11
10-Q 2011-03-31 Filed 2011-05-12
10-K 2010-12-31 Filed 2011-03-17
10-Q 2010-09-30 Filed 2010-11-12
10-Q 2010-06-30 Filed 2010-08-12
10-Q 2010-03-31 Filed 2010-05-13
10-K 2009-12-31 Filed 2010-03-18
8-K 2020-07-28 Earnings, Other Events, Exhibits
8-K 2020-06-01
8-K 2020-04-28
8-K 2020-02-25
8-K 2019-10-29
8-K 2019-07-30
8-K 2019-06-03
8-K 2019-04-30
8-K 2019-02-26
8-K 2019-01-07
8-K 2018-12-17
8-K 2018-12-10
8-K 2018-10-30
8-K 2018-10-05
8-K 2018-08-31
8-K 2018-07-31
8-K 2018-07-30
8-K 2018-07-11
8-K 2018-06-14
8-K 2018-06-04
8-K 2018-05-01
8-K 2018-02-27

SYX 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 5. Issuer Purchases of Equity Securities
Item 6. Exhibits
EX-10.1 exhibit101.htm
EX-10.2 exhibit102.htm
EX-31.1 ex-311q22020.htm
EX-31.2 ex-312q22020.htm
EX-32.1 ex-321q22020.htm
EX-32.2 ex-322q22020.htm

Systemax Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
1.00.80.60.40.20.02012201420172020
Assets, Equity
1.00.80.60.30.1-0.12012201420172020
Rev, G Profit, Net Income
0.30.20.1-0.1-0.2-0.32012201420172020
Ops, Inv, Fin

syx-20200630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to

COMMISSION FILE NUMBER 1-13792
Systemax Inc.
(Exact name of registrant as specified in its charter)
Delaware 11-3262067
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
11 Harbor Park Drive
Port Washington, New York 11050
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (516) 608-7000

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($.01 par value)SYXNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒   No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”  “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ 
Accelerated filer
Non-accelerated filer ☐ 
Smaller reporting company
  
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)   Yes    No ☒

The number of shares outstanding of the registrant’s Common Stock as of July 29, 2020 was 37,484,968.



TABLE OF CONTENTS
Available Information 
  
Part IFinancial Information 
Item 1.
Item 2.
Item 3.
Item 4.
   
Part IIOther Information 
Item 1.
Item 5.
Item 6.
   
 
2

Table of Contents
Available Information

We maintain an internet web site at www.systemax.com.  We file reports with the Securities and Exchange Commission (“SEC”) and make available free of charge on or through this website our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including all amendments to those reports.  These are available as soon as is reasonably practicable after they are filed with the SEC.  All reports mentioned above are also available from the SEC’s website (www.sec.gov).  The information on our website is not part of this or any other report we file with, or furnish to, the SEC.

Our Board of Directors has adopted the following corporate governance documents with respect to the Company (the “Corporate Governance Documents”):

Corporate Ethics Policy for officers, directors and employees
Charter for the Audit Committee of the Board of Directors
Charter for the Compensation Committee of the Board of Directors
Charter for the Nominating/Corporate Governance Committee of the Board of Directors
Corporate Governance Guidelines and Principles

In accordance with the corporate governance rules of the New York Stock Exchange, each of the Corporate Governance Documents is available on our Company web site, www.systemax.com.
3

Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Systemax Inc.
Condensed Consolidated Balance Sheets
(In millions)
 June 30,
2020
December 31,
2019
(Unaudited)
ASSETS: 
Current assets:  
Cash and cash equivalents$58.1  $97.2  
Accounts receivable, net110.2  88.2  
Inventories132.4  112.5  
Prepaid expenses and other current assets6.5  6.4  
Total current assets307.2  304.3  
Property, plant and equipment, net16.1  17.8  
Operating lease right-of-use assets57.7  59.3  
Deferred income taxes7.4  7.3  
Goodwill and intangibles7.2  7.2  
Other assets1.1  1.0  
Total assets$396.7  $396.9  
LIABILITIES AND SHAREHOLDERS’ EQUITY:  
Current liabilities:  
Accounts payable$130.6  $115.9  
Accrued expenses and other current liabilities45.8  34.0  
Operating lease liabilities10.1  9.9  
Total current liabilities186.5  159.8  
Deferred income tax liability0.1  0.1  
Other liabilities4.1  2.8  
Operating lease liabilities57.3  58.7  
Total liabilities248.0  221.4  
Commitments and contingencies
Shareholders’ equity:  
Preferred stock0.0  0.0  
Common stock0.4  0.4  
Additional paid-in capital191.0  189.7  
Treasury stock(24.3) (20.4) 
Retained (deficit) earnings(21.2) 2.8  
Accumulated other comprehensive income 2.8  3.0  
Total shareholders’ equity148.7  175.5  
Total liabilities and shareholders’ equity$396.7  $396.9  

See Notes to Condensed Consolidated Financial Statements.
4

Table of Contents
Systemax Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except per share amounts)
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2020201920202019
Net sales$242.1  $248.6  $469.4  $480.8  
Cost of sales157.3  162.6  307.9  314.5  
Gross profit84.8  86.0  161.5  166.3  
Selling, distribution & administrative expenses64.7  66.0  129.9  133.1  
Operating income from continuing operations20.1  20.0  31.6  33.2  
Interest and other (income) expense, net0.0  (0.1) 0.2  (0.1) 
Income from continuing operations before income taxes20.1  20.1  31.4  33.3  
Provision for income taxes4.8  5.2  7.8  8.4  
Net income from continuing operations15.3  14.9  23.6  24.9  
Net income (loss) from discontinued operations1.1  (0.3) 1.0  (0.6) 
Net income $16.4  $14.6  $24.6  $24.3  
Net income per common share from continuing operations:   
Basic$0.41  $0.40  $0.62  $0.66  
Diluted$0.40  $0.39  $0.62  $0.66  
Net income (loss) per common share from discontinued operations:
Basic$0.03  $(0.01) $0.03  $(0.02) 
Diluted$0.03  $(0.01) $0.03  $(0.02) 
Net income per common share:
Basic$0.44  $0.39  $0.65  $0.64  
Diluted$0.43  $0.38  $0.65  $0.64  
Weighted average common and common equivalent shares:   
Basic37.5  37.5  37.6  37.4  
Diluted37.6  37.9  37.8  37.9  
Dividends declared$0.14  $0.12  $1.28  $0.24  
 
See Notes to Condensed Consolidated Financial Statements.
5

Table of Contents
Systemax Inc.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In millions)
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2020201920202019
Net income $16.4  $14.6  $24.6  $24.3  
Other comprehensive (loss) income:
Foreign currency translation0.0  0.1  (0.2) 0.1  
Total comprehensive income $16.4  $14.7  $24.4  $24.4  
 
See Notes to Condensed Consolidated Financial Statements.
6

Table of Contents
Systemax Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
 Six Months Ended
June 30,
 20202019
Cash flows from operating activities:  
Net income from continuing operations$23.6  $24.9  
Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities:  
Depreciation and amortization2.1  2.0  
Provision for doubtful accounts0.9  0.3  
Stock-based compensation1.8  2.8  
Provision for deferred taxes(0.1) (0.2) 
Loss on disposition and abandonment0.0  0.1  
Changes in operating assets and liabilities:
Accounts receivable(23.2) (12.8) 
Inventories(20.1) 6.0  
Prepaid expenses and other assets(2.4) (1.2) 
Income taxes payable8.1  5.9  
Accounts payable14.9  15.4  
Accrued expenses, other current liabilities and other liabilities7.8  6.9  
Net cash provided by operating activities from continuing operations13.4  50.1  
Net cash provided by operating activities from discontinued operations1.0  0.1  
Net cash provided by operating activities14.4  50.2  
Cash flows from investing activities: 
Purchases of property, plant and equipment(0.4) (2.4) 
Net cash used in investing activities(0.4) (2.4) 
Cash flows from financing activities: 
Dividends paid(48.6) (252.5) 
Proceeds from issuance of common stock0.3  0.6  
Payment of payroll taxes on stock-based compensation through shares withheld(0.3) (0.8) 
Proceeds from the issuance of common stock from employee stock purchase plan0.4  0.4  
Repurchase of treasury shares(4.8) 0.0  
Net cash used in financing activities(53.0) (252.3) 
Effects of exchange rates on cash(0.1) (0.1) 
Net decrease in cash(39.1) (204.6) 
Cash and cash equivalents – beginning of period97.2  295.4  
Cash and cash equivalents – end of period$58.1  $90.8  
Supplemental disclosures of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$4.1  $14.7  

See Notes to Condensed Consolidated Financial Statements.
7

Table of Contents
Systemax Inc.
Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)
(In millions)
 Common Stock    
 Number of
Shares
Outstanding
AmountAdditional
Paid-in
Capital
Treasury
Stock
Retained
(Deficit) Earnings
Accumulated Other
Comprehensive Income (Loss)
Total
Equity
Balances, January 1, 202037,679  $0.4  $189.7  $(20.4) $2.8  $3.0  $175.5  
Stock-based compensation expense  1.0   1.0  
Issuance of restricted stock36  (0.6) 0.6   0.0  
Stock withheld for employee taxes(15) (0.3) (0.3) 
Proceeds from issuance of common stock30  (0.2) 0.5  0.3  
Issuance of shares under employee stock purchase plan23  0.4  0.4  
Dividends (43.3) (43.3) 
Repurchase of treasury shares(233) (3.9) (3.9) 
Change in cumulative translation adjustment(0.2) (0.2) 
Net income    8.2  8.2  
Balances, March 31, 202037,520  $0.4  $190.3  $(23.5) $(32.3) $2.8  $137.7  
Stock-based compensation expense0.8  $0.8  
Issuance of restricted stock5  (0.1) 0.1  0.0  
Dividends(5.3) (5.3) 
Repurchase of treasury shares(50) (0.9) (0.9) 
Net income$16.4  16.4  
Balances, June 30, 202037,475  $0.4  $191.0  $(24.3) $(21.2) $2.8  $148.7  

See Notes to Condensed Consolidated Financial Statements.
8

Table of Contents
 Common Stock    
 Number of
Shares
Outstanding
AmountAdditional
Paid-in
Capital
Treasury
Stock
Retained
(Deficit) Earnings
Accumulated Other
Comprehensive Income
Total
Equity
Balances, January 1, 201937,335  $0.4  $187.0  $(25.1) $(27.6) $3.0  $137.7  
Stock-based compensation expense  1.5   1.5  
Issuance of restricted stock103  (1.8) 1.8   0.0  
Stock withheld for employee taxes(34) (0.8) (0.8) 
Proceeds from issuance of common stock3  0.0  
Issuance of shares under employee stock purchase plan21  0.4  0.4  
Dividends(4.5) (4.5) 
Net income    9.7  9.7  
Balances, March 31, 201937,428  $0.4  $187.1  $(24.1) $(22.4) $3.0  $144.0  
Stock-based compensation expense1.3  1.3  
Issuance of restricted stock6  0.0  
Stock withheld for employee taxes(1) 0.0  
Proceeds from issuance of common stock53  (0.3) 0.9  0.6  
Dividends(4.5) (4.5) 
Change in cumulative translation adjustment0.1  0.1  
Net income14.6  14.6  
Balances, June 30, 201937,486  $0.4  $188.1  $(23.2) $(12.3) $3.1  $156.1  

See Notes to Condensed Consolidated Financial Statements.
9

Table of Contents
Systemax Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

1.Basis of Presentation

The accompanying condensed consolidated financial statements of Systemax Inc., with its subsidiaries, (the "Company") are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America are not required in these interim financial statements and have been condensed or omitted.  All significant intercompany accounts and transactions have been eliminated in consolidation.

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. Systemax operates and is internally managed in one reportable business segment. The Company sells a wide array of industrial and general 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 product is impractical.

Included in discontinued operations is the Company’s former North American Technology Group ("NATG") business, which was sold in December 2015 and has been winding down its operations since then. The sale of the NATG business had a major impact on the Company and therefore certain components met the "strategic shift with major impact" criteria as defined under Accounting Standard Update ("ASU") 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". Accordingly, these components and any related results of operations are reflected in discontinued operations. For the three and six month periods ended June 30, 2020, net income from the NATG business totaled $1.1 million and $1.0 million, respectively, and for the three and six month periods ended June 30, 2019, net loss from the NATG business totaled $0.3 million and $0.6 million, respectively.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of the Company as of June 30, 2020 and the results of operations for the three and six month periods ended June 30, 2020 and 2019, statements of comprehensive income (loss) for the three and six month periods ended June 30, 2020 and 2019, cash flows for the six month periods ended June 30, 2020 and 2019 and changes in shareholders’ equity for the three and six month periods ended June 30, 2020 and 2019.  The December 31, 2019 Condensed Consolidated Balance Sheet has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2019 and for the year then ended included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.  The results for the six month period ended June 30, 2020 are not necessarily indicative of the results for the entire year.

Systemax manages its business and reports using a 52-53 week fiscal year that ends at midnight on the Saturday closest to December 31.  For clarity of presentation herein, fiscal years and quarters are referred to as if they ended on the traditional calendar month.  The actual fiscal second quarter ended on June 27, 2020 and June 29, 2019.  The second quarters of both 2020 and 2019 included 13 weeks and the first six months of both 2020 and 2019 included 26 weeks.

Related Party Transactions

During 2020 the Company made inventory purchases of approximately $1.8 million from an entity owned by an immediate family member of the Company's Executive Chairman. There were no outstanding payables to this entity at June 30, 2020. During 2020, the Company recorded approximately $0.5 million in legal fee expense from a law firm which employs an immediate family member of one of the Company's Vice Chairman. Amounts that are payable to this entity at June 30, 2020 totaled approximately $0.1 million and are recorded in Accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheet. Also during 2020 the Company had sales of approximately $0.3 million to an entity that has on its board one of the Company's Board members.
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Recent Accounting Pronouncements

Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”).  These authorities issue numerous pronouncements, most of which are not applicable to the Company’s current or reasonably foreseeable operating structure.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU clarifies and simplifies accounting for income taxes by eliminating certain exceptions for intraperiod tax allocation principles and the methodology for calculating income tax rates in an interim period, among other updates. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company will adopt this ASU effective January 1, 2021. The Company believes the adoption of this pronouncement will not have a material impact on the Company's financial position or results of operations.


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2.Revenue

The Company’s revenue is shown as “Net sales” in the accompanying Condensed Consolidated Statements of Operations and is measured as the determined transaction price, net of any variable consideration consisting primarily of rights to return product. The Company has elected to treat freight and shipping and handling revenues as activities to fulfill its performance obligation. Billings for freight and shipping and handling are recorded in net sales and costs of freight and shipping and handling are recorded in cost of sales in the accompanying Condensed Consolidated Statements of Operations.

The Company will record a contract liability in cases where customers pay in advance of the Company satisfying its performance obligation. The Company did not have any material unsatisfied performance obligations or liabilities as of June 30, 2020.

The Company offers customers rights to return product within a certain time, usually 30 days. The Company estimates its sales returns liability quarterly, based upon its historical returns rates, as a percentage of historical sales for the trailing twelve-month period. The total accrued sales returns liability was approximately $2.4 million and $1.9 million at June 30, 2020 and December 31, 2019, respectively, and was recorded as a refund liability in Accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets.

Disaggregation of Revenues

The Company believes its presentation of revenue by geography most reasonably depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic and industry factors, including fluctuations in exchange rates between the U.S. and Canada. The following table presents the Company's revenue, from continuing operations, by geography for the three and six months ended June 30, 2020 and June 30, 2019, respectively (in millions):

 Three Months Ended
June 30,
Six Months Ended
June 30,
 2020201920202019
Net sales: 
United States$226.0  $236.7  $441.3  $457.5  
Canada16.1  11.9  28.1  23.3  
Consolidated$242.1  $248.6  $469.4  $480.8  


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3.Credit Losses

On January 1, 2020 the Company adopted ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The Company's trade accounts receivable are subject to this standard. The adoption of this ASU did not have a material impact on the Company's financial position or results of operations.

The Company’s trade accounts receivable is one portfolio comprised of commercial businesses operating in the U.S. and to a much lesser extent, Canada. The Company develops its allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of its receivables, considering customer financial condition, historical loss experience with its customers, current market economic conditions and forecasts of future economic conditions when appropriate. When the Company becomes aware of a customer's inability to meet its financial obligation, a specific reserve is recorded to reduce the receivable to the expected amount to be collected. For the balance of its trade receivables, the Company uses a loss rate method to estimate its credit loss reserve. Historical loss experience rates are calculated using receivable write offs over a trailing twelve-month period and comparing that to the average receivable balances over the same period. That rate is applied to the current accounts receivable portfolio, excluding accounts that have been specifically reserved. Any write offs incurred are recorded against the established reserves.

The Company grants credit to commercial business customers using an electronic application process that evaluates the customer's detailed credit report, reference responses, availability under credit facilities, existing liens, tenure of management and business history, among other factors. Credit terms are typically net 30 days payment required with larger businesses eligible for up to net 90 day terms, if qualified.

The following is a rollforward of the allowances for credit losses related to trade accounts receivable for the six months ended June 30, 2020:
June 30, 2020
Balance at beginning of period (1)
$1.2  
Current period provision0.9  
Write-offs(0.2) 
Balance at end of period (1)
$1.9  
1 Excludes approximately $3.9 million related to full reserves against notes receivable. This balance was written off in the second quarter of 2020.



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4.Discontinued Operations and Special (Gains) Charges

The Company’s discontinued operations include the results of the NATG business sold in December 2015 (See Note 1). 

In the second quarter ended June 30, 2020, the Company received approximately $1.9 million in restitution receipts and $0.1 million in vendor settlements offset by approximately $0.4 million of professional fees. For the six months ended June 30, 2020, the Company received approximately $1.9 million in restitution receipts and $0.1 million in vendor settlements offset by approximately $0.5 million of professional fees. The Company expects that total additional exit charges related to discontinued operations after this quarter may aggregate up to $0.5 million.

The following table details liabilities related to the exit costs of the sold businesses that remain as of June 30, 2020 (in millions):
 Accrued exit costs
Balance January 1, 2020$2.8  
Charged to expense 0.2  
Paid or otherwise settled(0.2) 
Balance June 30, 2020$2.8  

The following table details liabilities related to the exit costs of the sold businesses that remained for 2019 (in millions):
 Accrued exit costs
Balance January 1, 2019$2.8  
Charged to expense 0.7  
Paid or otherwise settled(0.7) 
Balance December 31, 2019$2.8  
 
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5.Net Income (Loss) per Common Share

Net income per common share - basic was calculated based upon the weighted average number of common shares outstanding during the respective periods presented using the two-class method of computing earnings per share.  The two-class method was used as the Company has outstanding restricted stock with rights to dividend participation for unvested shares. Undistributed net income is allocated between common shares outstanding and participating securities to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. Undistributed net losses are not allocated to our participating securities as these participating securities do not have a contractual obligation to share in losses. Net income per common share - diluted was calculated based upon the weighted average number of common shares outstanding and included the equivalent shares for dilutive options outstanding during the respective periods, including unvested options.  The dilutive effect of outstanding options and restricted stock issued by the Company is reflected in net income per share - diluted using the treasury stock method.  Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options.

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The following table presents the computation of basic and diluted net income (loss) per share under the two-class method for the three and six months ended June 30, 2020 and 2019 (in millions, except for per share amounts):
Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
Net income from continuing operations$15.3  $14.9  $23.6  $24.9  
Less: Distributed net income available to participating securities0.0  0.0  (0.3) 0.0  
Less: Undistributed net income available to participating securities(0.1) (0.1) 0.0  (0.1) 
Numerator for basic net income per share:
Undistributed and distributed net income available to common shareholders$15.2  $14.8  $23.3  $24.8  
Add: Undistributed net income allocated to participating securities0.1  0.1  0.0  0.1  
Less: Undistributed net income reallocated to participating securities(0.1) (0.1) 0.0  0.0  
Numerator for diluted net income per share:
Undistributed and distributed net income available to common shareholders$15.2  $14.8  $23.3  $24.9  
Denominator:
Weighted average shares outstanding for basic net income per share37.5  37.5  37.6  37.4  
Effect of dilutive securities0.1  0.4  0.2  0.5  
Weighted average shares outstanding for diluted net income per share37.6  37.9  37.8  37.9  
Net income per share from continuing operations:
Basic$0.41  $0.40  $0.62  $0.66  
Diluted$0.40  $0.39  $0.62  $0.66  
Net income (loss) from discontinued operations$1.1  $(0.3) $1.0  $(0.6) 
Net income (loss) per share from discontinued operations:
Basic$0.03  $(0.01) $0.03  $(0.02) 
Diluted$0.03  $(0.01)