CompUSA 2010 Annual Report Download - page 93

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42
5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
December 31,
2010 2009
Payroll and employee benefits
$
30,166
$
27,715
Freight 17,142 9,171
Advertising 8,033 8,030
Sales and VAT tax payable 8,613 7,989
Other 20,726 25,936
$
84,680
$
78,841
6. LONG-TERM DEBT
On September 23, 2010, the Company (through a subsidiary) completed tax exempt Recovery Zone Facility Bond (the “Bonds”)
financing for up to $15 million with the Development Authority of Jefferson, Georgia (the “Authority”). The Bonds were issued
by the Authority and initially purchased by GE Government Finance Inc., and mature on October 1, 2018. Interest on the Bonds
is calculated at the rate of 4.15% per annum and principal and interest payments are due monthly. The proceeds of the Bonds are
used to finance or repay the costs of capital equipment purchased for the Company’ s distribution facility located in Jefferson,
Georgia. The purchase and installation of all the equipment for the facility is expected to be completed by December 31, 2011.
Pursuant to the transaction, the Company will transfer to the Authority for consideration consisting of the Bond proceeds
ownership of the equipment to be used at the distribution facility and the Authority in turn will lease the equipment to the
Company’ s subsidiary pursuant to a capital equipment lease expiring October 1, 2018. Under the capital equipment lease the
Company has the right to acquire ownership of the equipment at any time for a purchase price sufficient to pay off all principal
and interest on the Bonds, plus $1.00. As a result of the capital lease treatment for this transaction, the leased equipment is
included in property, plant and equipment in the Company’ s consolidated balance sheet. As of December 31, 2010 the Company
had $7.9 million outstanding against this facility.
Long-term debt consists of (in thousands):
December 31,
2010 2009
Capitalized equipment lease obligations
$
10,041
$
2,223
Less: current portion 2,655 1,029
$
7,386
$
1,194
The aggregate maturities of long-term debt outstanding at December 31, 2010 are as follows (in thousands):
2011 2012 2013 2014 2015
Maturities $ 2,655 $ 2,329 $ 2,
249
$ 1,
967
$ 841
7. BUSINESS EXIT AND REORGANIZATION COSTS
The Company announced plans to exit its Software Solutions segment, in the second quarter of 2009, as the result of economic
conditions and difficulties in marketing the segment’ s products successfully. Total charges incurred for the years ended December
31, 2010 and December 31, 2009 were $0.3 million and $2.9 million, respectively. These costs were recorded in selling,
general and administrative expenses within the Corporate and Other segment in the accompanying condensed consolidated
statement of operations.
The following table reconciles the associated liabilities incurred (in thousands):
Severance
and
Personnel
Costs
Contract
Termination
Costs Other Exit Costs Total
Balance January 1, 2009................ $ - $ - $ - $ -
Charged to expense........................ 1,208 1,644 80 2,932
Paid or otherwise settled................ (1,208) (697) (80) (1,985)
Balance December 31, 2009.......... - 947 - 947
Charged to expense........................ - 284 - 284
Paid or otherwise settled................ - (918) - (918)
Balance December 31, 2010 $ - $ 313 $ - $ 313