CompUSA 2012 Annual Report Download - page 9

Current economic conditions in the United States, including eroding consumer demand, as well as ongoing difficulties in the various European
countries where we operate, raise additional concerns as we believe the loss of consumer confidence in the Company’
s markets together with the
effects of the fiscal cliff and budget discussions in the U.S. has resulted in a decrease of spending in the categories of products we sell. It is also
possible that as manufacturers react to the marketplace they may reduce manufacturing capacity and create shortages of product.
Industrial Products
The market for the sale of industrial products in North America is highly fragmented and is characterized by multiple distribution channels such
as small dealerships, direct mail distribution, internet-based resellers, large warehouse stores and retail outlets. We also face 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. In the industrial products market, customer
purchasing decisions are primarily based on price, product selection, product availability, level of service and convenience. We believe that
direct marketing via sales representatives, catalog and the Internet are effective and convenient distribution methods 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.
Employees
As of December 31, 2012, we employed a total of approximately 5,300 employees, of whom 3,800 were in North America and 1,500 were in
Europe and Asia.
Seasonality
As the Company has a significant portion of its sales in the North America consumer business market, the fourth quarter has represented the
greatest portion of annual sales. Net sales have historically been modestly weaker during the second and third quarters as a result of lower
business activity during those months. See Item 7, “Management’s Discussions and Analysis of Financial Condition and Results of Operations;
Seasonality”.
Environmental Matters
Under various national, state and local environmental laws and regulations in North America and Western 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. We lease most of our facilities. In connection with such
leases, we could be held liable for the costs of removal or remedial actions with respect to hazardous substances. Although we have not been
notified of, and are not otherwise aware of, any material real property environmental liability, claim or non-compliance, there can be no
assurance that we will not be required to incur remediation or other costs in connection with real property environmental matters in the future.
Financial Information About Foreign and Domestic Operations
We currently sell our products in North America (the United States, Puerto Rico and Canada) and Europe. Approximately 37.8%, 36.0%, and
35.1% of our net sales during 2012, 2011 and 2010, respectively were made by subsidiaries located outside of the United States. For
information pertaining to our international operations, see Note 12, “Segment and Related Information,” to the Consolidated Financial
Statements included in Item 15 of this Form 10-K. The following sets forth selected information with respect to our operations, excluding
discontinued operations, in those two geographic markets (in millions):
Table of Contents
North
America
Europe
Total
2012
Net sales
$
2,417.9
$
1,126.7
$
3,544.6
Operating (loss) income
$
(63.6
)
$
23.7
$
(39.9
)
Identifiable assets
$
642.9
$
319.4
$
962.3
2011
Net sales
$
2,580.8
$
1,099.8
$
3,680.6
Operating income
$
45.0
$
35.8
$
80.8
Identifiable assets
$
643.9
$
245.8
$
889.7
2010
Net sales
$
2,542.1
$
1,047.0
$
3,589.1
Operating income
$
47.8
$
21.0
$
68.8
Identifiable assets
$
665.7
$
228.4
$
894.1
7