CompUSA 2008 Annual Report Download - page 89

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54
At December 31, 2008, the future minimum annual lease payments for capital leases and related and third-party operating
leases were as follows (in thousands):
Capital
Leases
Operating
Leases Total
2009 $905 $19,131 $20,036
2010 746 17,176 17,922
2011 508 15,960 16,468
2012 167 14,769 14,936
2013 125 13,066 13,191
2014-2018 38,602 38,602
2019-2023 13,476 13,476
Thereafter 3,552 3,552
Total minimum lease payments 2,451 135,732 138,183
Less: sublease rental income 122 122
Lease obligation net of subleases 2,451 $135,610 $138,061
Less amount representing interest 267
Present value of minimum capital lease
payments (including current portion of $773) $2,184
Annual rent expense aggregated approximately $24,993,000, $14,760,000 and $13,198,000 in 2008, 2007 and 2008,
respectively. Included in rent expense was $860,000, $612,000, and $612, 000 in 2008, 2007 and 2006, respectively, to
related parties.Rent expense is net of sublease income of $355,000, $853,000 and $937,000 for 2008, 2007 and 2006,
respectively.
Litigation –
Kevin Vukson v. TigerDirect, Inc., OnRebate.com Inc. and Systemax Inc.
On October 18, 2007, Kevin Vukson filed a class action complaint in U.S. District Court (E.D.N.Y.) against TigerDirect,
Inc., OnRebate.com Inc. and Systemax Inc. on behalf of himself and all OnRebate customers whose rebates were denied or
delayed . (OnRebate.com Inc. is a rebate processing company owned by Systemax.) Vukson’ s Complaint alleges that since
2004 Systemax, TigerDirect and OnRebate have conducted a deceptive and unlawful enterprise by failing to pay rebates that
should have been paid and delaying unnecessarily the payment of other rebates that were paid. Vukson alleges claims
arising under Florida’ s Unfair, Deceptive Trade Practice Act, the federal RICO statute, along with claims for breach of
contract, conspiracy to commit fraud and unjust enrichment. On February 11, 2009 the Court dismissed Vukson’ s complaint
with leave to file an amended complaint by February 19, 2009 but ordered that any amended complaint not include a request
for punitive damages. On February 19, 2009 Vukson filed an amended complaint with no request for punitive damages, as
ordered by the Court. The Company intends to vigorously defend this case.
State of Florida, Office of the Attorney General Subpoena
On January 2, 2008 the Company received a subpoena for documents from the Florida Attorney General’ s Office relating to
the payment and processing of rebates by the Company. The Company received subpoenas for additional documents on
January 30, 2008 and on August 25, 2008. The Company is cooperating with the Florida Attorney General’ s investigation
and has provided a substantial number of documents in response to the subpoenas.
Other matters
The Company has also been named as a defendant in other lawsuits in the normal course of its business, including those
involving commercial, tax, employment and intellectual property related claims. Based on discussions with legal counsel,
management believes the ultimate resolution of these lawsuits will not have a material effect on the Company’ s
consolidated financial statements.
10. SEGMENT AND RELATED INFORMATION
The Company operates and is internally managed in three operating segments, Technology Products, Industrial Products
and Software Solutions. The Company’ s chief operating decision-maker is the Company’ s Chief Executive Officer. The
Company evaluates segment performance based on income from operations before net interest, foreign exchange gains and
losses, restructuring and other charges and income taxes. Corporate costs not identified with the disclosed segments and
restructuring and other charges are grouped as “Corporate and other expenses.” The chief operating decision-maker reviews
assets and makes significant capital expenditure decisions for the Company on a consolidated basis only. The accounting