Circuit City 1999 Annual Report Download - page 29

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agreements in effect in the respective country, were not material.
FOREIGN EXCHANGE RISK MANAGEMENT - The Company has limited involvement with derivative financial instruments and does not
use them for trading purposes. The Company may enter into foreign currency options or forward exchange contracts to hedge certain foreign
currency transactions. The intent of this practice is to minimize the impact of foreign exchange rate movements on the Company's operating
results. As of December 31,1999, the Company had no outstanding forward exchange contracts.
FAIR VALUE OF FINANCIAL INSTRUMENTS - Financial instruments consist primarily of investments in cash, trade account receivables,
accounts payable and debt obligations. The Company estimates the fair value of financial instruments based on interest rates available to the
Company and by comparison to quoted market prices. At December 31, 1999 and 1998, the fair value of the Company's financial instruments
approximated their carrying values.
CONCENTRATION OF CREDIT RISK - Concentrations of credit risk with respect to trade account receivables are limited due to the large
number of customers comprising the Company's customer base.
9. SEGMENT AND RELATED INFORMATION
In 1998 the Company adopted Statement of Financial Accounting Standard 131 "Disclosure About Segments of an Enterprise and Related
Information". The Company evaluated its business in accordance with the statement and determined that it is engaged in a single reportable
segment which markets and sells various business products. The Company's product offerings include personal computers (PC's), computer
related products, industrial products and office products and are monitored for sales trends and profitability in these sub-categories. Products
are marketed through an integrated system of direct mail catalogs, a network of major account sales representatives and proprietary e-
commerce Internet web-sites.
Financial information relating to the Company's operations by geographic area was as follows (in thousands):
NET SALES
Revenues are attributed to countries based on location of selling subsidiary.
LONG-LIVED ASSETS
10. QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data is as follows (in thousands, except for per share amounts):
1999 1998 1997
---- ---- ----
North America $1,263,401 $1,121,250 $875,152
Europe 491,071 314,404 270,236
------- ------- -------
Consolidated $1,754,472 $1,435,654 $1,145,388
========== ========== ==========
1999 1998 1997
---- ---- ----
North America $ 91,590 $ 79,254 $77,135
Europe 28,933 11,346 5,524
------ ------ -----
Consolidated $ 120,523 $ 90,600 $82,659
======== ======== =======
FIRST SECOND THIRD FOURTH
1999 QUARTER QUARTER QUARTER QUARTER
---- ------- ------- ------- -------
Net sales................................. $421,651 $413,800 $440,659 $478,362
Gross profit.............................. $ 79,312 $ 76,222 $ 77,697 $ 81,294
Net income................................ $ 10,763 $ 5,230 $ 9,314 $ 10,705
Net income per common share:
Basic and diluted................ $.30 $.15 $.26 $.30
FIRST SECOND THIRD FOURTH
1998 QUARTER QUARTER QUARTER QUARTER
---- ------- ------- ------- -------