Memorex 2012 Annual Report Download - page 36

The South Asia segment revenue comprised 10.3 percent, 10.8 percent and 9.8 percent of our total consolidated
revenue in 2012, 2011 and 2010, respectively. The South Asia segment revenue decreased in 2012 compared with 2011
driven primarily by declines in our maturing traditional storage products. From a product perspective, the decrease in revenue
was composed primarily of lower revenue from traditional data storage products of $18.6 million, primarily consisting of
declines in optical media of $10.7 million and audio video tape of $4.7 million. Secure and scalable products, principally
commodity flash products, declined $5.2 million. Revenue was not impacted by foreign currency.
Operating income decreased in 2012 compared with 2011 driven by lower gross profit due to lower revenues from all
major product categories and lower gross margins from traditional storage products.
The South Asia segment revenue decreased in 2011 compared with 2010 driven primarily by decreases in revenue from
optical products of $4.6 million and other traditional storage products of $2.8 million, partially offset by higher revenue from
audio and video information of $4.4 million. Operating income remained unchanged in 2011 compared with 2010, impacted by
higher gross margins on audio and video information products offset by higher SG&A costs. Revenue was benefited by
foreign currency impacts of approximately six percent.
Corporate and Unallocated
Years Ended December 31, Percent Change
2012 2011 2010 2012 vs. 2011 2011 vs. 2010
(In millions)
Operating loss ..................................... $(341.6) $(68.3) $(124.8) NM (45.3)%
NM - Not meaningful
The corporate and unallocated operating loss includes costs which are not allocated to the business segments in
management’s evaluation of segment performance such as litigation settlement expense, intangible asset impairments,
goodwill impairment, research and development expense, corporate expense, stock-based compensation expense and
restructuring and other expense. The 2012 operating loss in Corporate and Unallocated included intangible asset impairment
losses of $260.5 million and a goodwill impairment loss of $23.3 million as discussed above.
The operating loss decreased in 2011 compared with 2010 driven primarily by an asset impairment charge during 2010
of $31.2 million and a goodwill impairment charge during 2010 of $23.5 million, offset partially by increased restructuring and
other expense related to our previously announced programs and the $7.0 million charge relating to the demolition of our
Camarillo, California facility during 2011.
Financial Position
Our cash and cash equivalents balance as of December 31, 2012 was $108.7 million, a decrease of $114.4 million from
$223.1 million as of December 31, 2011. The decrease was primarily attributable to $103.8 million of cash paid in the
acquisition of Nexsan, net of cash acquired, capital expenditures of $10.2 million, restructuring payments of $8.0 million,
pension contributions of $5.1 million, share repurchases of $6.5 million, litigation settlement payments of $18.5 million,
contingent consideration payments related to acquisitions of $1.2 million and other changes in working capital, partially offset
by net borrowings on our credit facility of $20.0 million and proceeds of $1.4 million from the sale of some of our assets held
for sale.
Our accounts receivable balance as of December 31, 2012 was $220.8 million, a decrease of $14.1 million from $234.9
million as of December 31, 2011 as a result of lower sales during the period. Days sales outstanding was 59 days as of
December 31, 2012, up 1 day from December 31, 2011. Days sales outstanding is calculated using the count-back method,
which calculates the number of days of most recent revenue that is reflected in the net accounts receivable balance.
Our inventory balance as of December 31, 2012 was $166.0 million, a decrease of $42.8 million from $208.8 million as
of December 31, 2011. Days of inventory supply was 89 days as of December 31, 2012, up 4 days from December 31, 2011.
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