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The discontinued operations of Software Solutions incurred a loss of approximately $0.3 million, $0.2 million and $0.0 million, net of tax, for
the years ended December 31, 2012, 2011 and 2010, respectively.
INTEREST EXPENSE
Interest expense was $1.7 million, $2.2 million, and $1.8 million for 2012, 2011 and 2010, respectively. The interest expense decrease is
attributable to decreasing balances owed on the Recovery Zone Bond facility and outstanding capital lease obligations. The increase in 2011
compared to 2010 is primarily the result of a full year of interest on the Recovery Zone Bond entered into to finance the equipment for the
second Technology Products distribution center opened in 2010.
INCOME TAXES
The Company’s effective tax rate was an 80.8% benefit in 2012 as compared to a 30.9% provision in 2011. The tax benefit in 2012 is primarily
due to the reversal of approximately $15.1 million of valuation allowances against deferred tax assets of the Company’s French subsidiary as a
result of the subsidiary no longer being in a cumulative loss position and operating losses in the United States, including impacts of the asset
impairment charges recorded.
The effective tax rate in 2011 was 30.9% compared to 35.6% in 2010. The lower tax rate in 2011 is primarily the result of the company’s France
operations having sufficient income to partially utilize net operating loss carryforwards that had a full valuation allowance applied.
Seasonality
The Company’s 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, excluding discontinued operations, for each of the quarters since January 1, 2010 (amounts in millions) .
Financial Condition, Liquidity and Capital Resources
Selected liquidity data (in millions):
Table of Contents
Quarter Ended
March 31
June 30
September 30
December 31
2012
Net sales
$
913.6
$
849.5
$
846.3
$
935.2
Percentage of year
’
s net sales
25.8
%
24.0
%
23.9
%
26.3
%
2011
Net sales
$
929.8
$
872.2
$
900.2
$
978.4
Percentage of year
’
s net sales
25.3
%
23.7
%
24.4
%
26.6
%
2010
Net sales
$
914.9
$
806.0
$
862.6
$
1,005.6
Percentage of year
’
s net sales
25.5
%
22.5
%
24.0
%
28.0
%
December 31,
2012
2011
$ Change
Cash
$
150.7
$
97.3
$
53.4
Accounts receivable, net
$
297.4
$
269.0
$
28.4
Inventories
$
367.2
$
372.2
$
(5.0
)
Assets available for sale
$
2.3
$
-
$
2.3
Prepaid expenses and other current assets
$
21.2
$
18.2
$
3.0
Accounts payable
$
405.3
$
336.5
$
68.8
Accrued expenses and other current liabilities
$
83.5
$
72.4
$
11.1
Current portion of long term debt
$
2.8
$
2.6
$
0.2
Working capital
$
360.8
$
354.8
$
6.0
27