CompUSA 2007 Annual Report Download - page 1

Proxy Statement and
2007 Annual Report to Stockholders
Dear Fellow Stockholders,
It is with great pleasure that I present to you our Annual Report to Stockholders for 2007.
We experienced record growth during 2007 in all of our business segments. Consolidated net sales grew by 18.5% to $2.8
billion; gross margin improved to 15.3% and operating income increased 54.3% to $95.5 million. Operating margin
improved to 3.4% and net income increased 54.1% to $69.5 million, or $1.84 per diluted share. The sales, operating income
and net income amounts were all-time records for the Company.
In our Technology Products segment (computers, computer supplies and accessories and consumer electronics), sales grew
by 18.9% to $2.6 billion and operating income grew to $87 million. The growth was driven by increased internet and retail
store sales, private label product sales and expanded product offerings. Our European sales were driven by strong business-
to-business gains and by the effect of a weaker U.S. dollar.
In our Industrial Products segment (material handling equipment, storage equipment and consumable industrial items), sales
grew by 14.7% to $226 million and operating income grew to $20.6 million. The growth was driven by increased market
share through competitive pricing advantages and increased internet sales.
In our Hosted Software segment, our ProfitCenter Software business continues its product development and is poised to
bring several household name customers live in the coming months. We are very excited by the prospects for this business
as it enables multi-channel marketing companies to more effectively manage their businesses.
Our balance sheet continues to be very strong, with total working capital at December 31, 2007 of $273 million, cash and
equivalents of $128 million and operating cash flow of $93 million during 2007. This strong cash generation enabled our
first $1.00 per share special dividend for our stockholders during 2007 and our second special dividend of $1.00 per share
during 2008.
I am also pleased to report that we have invested heavily in improving our business operations and control environment and
we had no material weaknesses in our internal accounting controls as of December 31, 2007.
On the strategic front, we completed the CompUSA acquisition during the first quarter of 2008. We acquired the
CompUSA.com and related websites, the CompUSA trademarks and tradenames, and 16 former CompUSA retail outlets
in Florida, Texas and Puerto Rico. We are excited by the three strong brands that we now primarily operate under in our
Technology Products business – TigerDirect and CompUSA in North America and Misco in Europe – and by the strong
performance across our multiple sales channels – business to business, business to consumer, retail and television shopping.
Look for us to re-brand our existing TigerDirect retail outlets in the United States under the CompUSA name later this year.
I appreciate the support of our stockholders, the confidence of our customers and vendors, and the efforts of our employees
in helping to continually improve our business. As we enter 2008 we are well positioned in each of our business segments
to continue growing profitably.
Sincerely,
Richard Leeds
Chairman and Chief Executive Officer
April 29, 2008