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19
Results of Operations
Key Performance Indicators (in thousands):
Years Ended December 31,
2010 2009
%
Change 2009 2008
%
Change
Net sales by segment:
Technology products $ 3,337,635 $ 2,966,657 12.5% $ 2,966,657 $ 2,794,948 6.1%
Industrial products 250,036 196,129 27.5%
196,129
237,027 (17.3)%
Corporate and other 2,318 3,209 (27.8)%
3,209
986 225.5%
Consolidated net sales $ 3,589,989 $ 3,165,995 13.4% $ 3,165,995 $ 3,032,961 4.4%
Net sales by geography:
North America
$ 2,543,014 $ 2,317,475 9.7% $ 2,317,475 $ 2,092,372 10.8%
Europe 1,046,975 848,520 23.4%
848,520
940,589 (9.8)%
Consolidated net sales $ 3,589,989 $ 3,165,995 13.4% $ 3,165,995 $ 3,032,961 4.4%
Net sales by
channel:
Consumer $ 1,819,803 $ 1,764,514 3.1% $ 1,764,514 $ 1,645,021 7.3%
Business to business 1,770,186 1,401,481 26.3% 1,401,481 1.387.940 1.0%
Consolidated net sales $ 3,589,989 $ 3,165,995 13.4% $ 3,165,995 3,032,961 4.4%
Consolidated gross margin 13.8% 14.5% (0.7)% 14.5
%
15.1% (0.6)%.
Consolidated SG&A costs $ 427,202 $ 386,619 10.5% $ 386,619 $ 374,947 3.1%
Consolidated SG&A costs as % of
sales 11.9% 12.2% (0.3)% 12.2
%
12.4% (0.2)%
Operating income (loss) by
segment:
Technology products $ 64,443 $ 88,173 (26.9)% $ 88,173 $ 97,747 (9.8)%
Industrial products 23,814 15,415 54.5%
15,415
24,621 (37.4)%
Corporate and other (19,512) (29,959) (34.9)% (29,959
)
(38,756) (22.7)%
Consolidated operating income $ 68,745 $ 73,629 (6.6)% $ 73,629 $ 83,612 (11.9)%
Operating margin by segment:
Technology products 1.9% 3.0% (1.1)% 3.0
%
3.5% (0.5)%
Industrial products
9.5% 7.9% 1.6% 7.9
%
10.4% (2.5)%
Consolidated operating margin 1.9% 2.3% (0.4)% 2.3
%
2.8% (0.5)%
Effective income tax rate 35.6% 36.8% (1.2)% 36.8
%
36.9% (0.1)%
Net income
$ 42,551 $ 46,185 (7.9)% $ 46,185 $ 52,843 (12.6)%
Net
margin 1.2% 1.5% (0.3)% 1.5
%
1.7% (0.2)%
NET SALES
SEGMENTS:
The Technology Products net sales increase is attributable to increased business to business and consumer channel sales worldwide as
a result of improved global economic conditions, the expansion of the number of retail stores in the United States and Canada and the
continuing sales contribution from our Circuit City and WStore Europe SA (“WStore”) acquisitions in 2009. On a constant currency
basis, translating 2010 foreign results at 2009 exchange rates, and excluding the impact of the WStore acquisition on results, sales
would have grown 7.9% or $230.6 million.
Industrial Products sales, primarily business to business, increased 27.5% as compared to last year. The sales increase, the majority of
which was driven by web sales, is attributable to improved economic conditions in North America in 2010 resulting in increased
demand for the segment’ s various products as well as an increase in the number of products offered on its websites and in its catalogs.
The Company announced plans to exit its Software solutions segment during the second quarter of 2009. Substantially all of the third
party business activities of ProfitCenter Software have ended. Current and prior year results for this segment are now included in
Corporate and other.