CompUSA 2013 Annual Report Download - page 36

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Net cash used in financing activities from continuing operations was $2.6 million in 2013, $11.1 million in 2012 and $0.5 million in 2011. In
2013, we repaid approximately $2.8 million of capital lease obligations and net proceeds and excess tax benefit from stock option exercises
provided $0.2 million. In 2012, we paid a special dividend of $9.1 million and repaid approximately $2.8 million of capital lease obligations. Net
proceeds and excess tax benefits from stock option exercises provided $0.8 million. In 2011, we borrowed and repaid approximately $10.9
million from revolving credit and short term debt facilities. We repaid approximately $2.5 million in capital lease obligations. Net proceeds and
excess tax benefits from stock option exercises provided $0.5 million and we received proceeds of approximately $1.5 million from the
Recovery Zone Facility Bond. Net cash used in financing activities from discontinued operations was zero for 2013 and 2012 and $0.2 million
for 2011.
The Company maintains a $125.0 million (which may be increased to $200.0 million, subject to certain conditions) secured revolving credit
agreement with a group of financial institutions which provides for borrowings in the United States. The credit facility has a five year term and
expires in October 2015. Borrowings are secured by substantially all of the Company’
s assets, including accounts receivable, inventory and
certain other assets, subject to limited exceptions. The credit agreement contains certain operating, financial and other covenants, including
limits on annual levels of capital expenditures, availability tests related to payments of dividends and stock repurchases and fixed charge
coverage tests related to acquisitions. The revolving credit agreement requires that a minimum level of availability be maintained. If such
availability is not maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The borrowings under the
agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and up to 40% of qualified inventories. The
interest rate under this facility is computed at applicable market rates based on LIBOR or the Prime Rate, plus an applicable margin. The
applicable margin varies based on borrowing base availability. As of December 31, 2013, eligible collateral under this agreement was $110.4
million, total availability was $105.5 million, total outstanding letters of credit were $4.9 million and there were no outstanding advances. The
Company was in compliance with all of the covenants under this facility as of December 31, 2013.
The Company’
s WStore subsidiary maintained a revolving credit agreement with a financial institution in France which was secured by WStore
accounts receivable balances. This credit facility was terminated by the Company in June 2012. Available amounts for borrowing under this
facility included all accounts receivable balances not over 60 days past due reduced by the greater of €
4.0 million or 10% of the eligible accounts
receivable.
The Company (through a subsidiary) has an outstanding Bond financing with the Development Authority of Jefferson, Georgia (the
“Authority”).
The Bonds were issued by the Authority and initially purchased by GE Government Finance Inc., and mature on October 1, 2018.
The proceeds from the Bonds were used to finance capital equipment purchased for the Company’
s distribution facility located in Jefferson,
Georgia. The purchase and installation of the equipment for the facility was completed by December 31, 2011. Pursuant to the transaction, the
Company transferred to the Authority, for consideration consisting of the Bonds proceeds, ownership of the equipment and the Authority leased
the equipment to the Company’
s subsidiary pursuant to a capital equipment lease expiring October 1, 2018. Under the capital equipment lease
the Company has the right to acquire ownership of the equipment at any time for a purchase price sufficient to pay off all principal and interest
on the Bonds, plus $1.00. As a result of the capital lease treatment for this transaction, the leased equipment is included in property, plant and
equipment in the Company’s consolidated balance sheet
. As of December 31, 2013, the Company had $4.1 million outstanding against this
financing facility.
Our earnings and cash flows are seasonal in nature, with the fourth quarter of the fiscal year historically generating higher earnings and cash
flows than the other quarters. Levels of earnings and cash flows are dependent on factors such as consolidated gross margin and selling, general
and administrative costs as a percentage of sales, product mix and relative levels of domestic and foreign sales. Unusual gains or expense items,
such as special (gains) charges and settlements, may impact earnings and are separately disclosed. We expect that past performance may not be
indicative of future performance due to the competitive nature of our Technology Products segment where the need to adjust prices to gain or
hold market share is prevalent.
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