CompUSA 2010 Annual Report Download - page 73

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22
Seasonality
As the Company’ s consumer channel sales have grown significantly in the past few years, the fourth quarter has represented a greater
portion of annual sales than historically. Net sales have historically been modestly weaker during the second and third quarters as a
result of lower business activity during those months. The following table sets forth the net sales seasonality for each of the quarters
since January 1, 2008 (amounts in millions).
Quarter Ended
March 31 June 30 September 30 December 31
2010
Net sales
$
915
$
806
$
863
$ 1,006
Percentage of year’ s net sales 25.5% 22.5% 24.0% 28.0%
2009
Net sales
$
752
$
722
$
754
$ 938
Percentage of year’ s net sales 23.8% 22.8% 23.8% 29.6%
2008
Net sales
$
725
$
756
$
739
$ 813
Percentage of year’ s net sales 23.9% 24.9% 24.4% 26.8%
Financial Condition, Liquidity and Capital Resources
Selected liquidity data (in thousands):
December 31,
2010 2009 $ Change
Cash $ 92,077 $ 58,309 $ 33,768
Accounts receivable, net $ 276,344 $ 241,860 $ 34,484
Inventories $ 370,375 $ 365,725 $ 4,650
Prepaid expenses and other current assets $ 19,308 $ 20,066 $ (758)
Accounts payable $ 377,030 $ 348,029 $ 29,001
Accrued expenses and other current liabilities $ 84,680 $ 78,841 $ 5,839
Current portion of long term debt $ 2,655 $ 1,029 $ 1,626
Short term debt $ - 14,168 $ (14,168)
Long term debt $ 7,386 $ 1,194 $ 6,192
Working capital $ 300,872 $ 250,519 $ 50,353
Our primary liquidity needs are to support working capital requirements in our business, including working capital for new retail
stores, to fund capital expenditures, including the second North American distribution center for the Technology Products segment, to
fund the payment of interest on outstanding debt, to fund special dividends declared by our Board of Directors and for acquisitions.
We rely principally upon operating cash flows to meet these needs. We believe that cash flows from operations and our availability
under credit facilities will be sufficient to fund our working capital and other cash requirements for the next twelve months.
Our working capital increased in 2010 as the result of increased cash, accounts receivable and inventory balances as a result of growth
in the business offset partially by an increase in accounts payable, accrued expenses and the current portion of long term debt. The
increase in inventory is the result of increased retail store inventory in 2010 and the opening of a new distribution facility for
Technology Products in the third quarter of 2010. Accounts receivable balances increased as the result of growth in open account
business to business customers, the WStore acquisition and slight growth in accounts receivable days outstanding. Accounts payable
and accrued expense balances increased due to inventory growth and the WStore acquisition. Accounts receivable days outstanding
were at 25 in 2010 up from 23 in 2009. We expect that future accounts receivable and inventory balances will fluctuate with growth in
net sales and the mix of our net sales between consumer and business customers.
Net cash provided by operating activities was $64.9 million, $4.8 million, and $82.4 million during 2010, 2009, and 2008. The
increase in cash provided by operating activities in 2010 over 2009 resulted from a $5.0 million decrease in net income adjusted by
other non-cash items, such as depreciation expense, and an increase of $65.1 million in cash used for changes in our working capital
accounts. The decrease in cash provided by operating activities in 2009 compared to 2008 resulted from a $3.0 million decrease in net
income adjusted by other non-cash items, such as depreciation expense, and a decrease of $74.6 million in cash used for changes in
working capital accounts.
Net cash used in investing activities was $24.7 million during 2010, primarily for capital expenditures including expenditures for the
second North American distribution center for the Technology Products segment.. Cash flows used in investing activities during 2009