Circuit City 2001 Annual Report Download - page 8

competition from manufacturers' own sales representatives, who sell industrial equipment directly to customers, and from regional or local
distributors. Many high volume purchasers, however, utilize catalog distributors as their first source of product specifications. In the industrial
products market, customer purchasing decisions are primarily based on price, product selection, product availability, level of service and
convenience. The Company believes that direct mail is an effective and convenient distribution method to reach mid-sized facilities that place
many small orders and require a wide selection of products. In addition, because the industrial products market is highly fragmented and
generally less brand oriented, it is well suited to private label products. A large portion of the Company's industrial products are high gross
profit margin, private label products.
The Company sells a minor amount of industrial products in Europe.
There can be no assurance that the Company will be able to maintain or improve its current competitive position with respect to any of these or
other competitive factors.
EMPLOYEES
As of December 31, 2001, the Company employed a total of 3,778 employees, including 3,640 full-time and 138 part-time employees, of
whom 2,382 were in North America and 1,396 were in Europe.
None of the Company's employees is represented by a labor union, except for approximately 23 warehouse employees in New York who are
covered by an "open-shop" agreement with the Company, which expires at the end of 2004, and certain employees in several locations in
Europe. Employees are not required to join the union.
The Company considers its relationships with employees to be good and has not experienced a work stoppage in 27 years.
ENVIRONMENTAL MATTERS
Under various national, state and local environmental laws and regulations in North America and Europe, a current or previous owner or
operator (including the lessee) of real property may become liable for the costs of removal or remediation of hazardous substances at such real
property. Such laws and regulations often impose liability without regard to fault. The Company leases most of its facilities. In connection with
such leases, the Company could be held liable for the costs of removal or remedial actions with respect to hazardous substances. Although the
Company has not been notified of, and is not otherwise aware of, any material environmental liability, claim or non-compliance, there can be
no assurance that the Company will not be required to incur remediation or other costs in connection with environmental matters in the future.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
The Company conducts its business in North America (the United States and Canada) and Europe. The following sets forth the Company's
operations in its two geographic markets (in thousands):
ITEM 2. PROPERTIES.
The Company's primary facilities, which are leased except where otherwise indicated, are as follows:
2001 EUROPE NORTH AMERICA TOTAL
---- -------------------- ---------------------- --------------
NET SALES.............................. $564,360 $982,615 $1,546,975
INCOME (LOSS) FROM OPERATIONS.......... $18,229 $(15,699) $2,530
IDENTIFIABLE ASSETS.................... $121,717 $332,730 $454,447
2000 EUROPE NORTH AMERICA TOTAL
---- -------------------- ---------------------- --------------
Net sales.............................. $548,097 $1,138,006 $1,686,103
Income (loss) from operations.......... $17,294 $(78,302) $(61,008)
Identifiable assets.................... $107,800 $430,218 $538,018
1999 EUROPE NORTH AMERICA TOTAL
---- -------------------- ---------------------- -----------
Net sales.............................. $491,071 $1,263,401 $1,754,472
Income from operations................. $10,541 $49,294 $59,835
Identifiable assets.................... $93,900 $457,912 $551,812
APPROX EXPIRATION
FACILITY LOCATION SQ. FT. OF LEASE
-------- -------- ------- ----------
Headquarters, Sales and
Distribution Center (1)...................Port Washington, NY 178,000 2007
Sales and Distribution Center (2)...........Suwanee, GA 360,675 owned
Sales and Distribution Center...............Compton, CA 140,000 2007