CompUSA 2013 Annual Report Download - page 34

Download and view the complete annual report

Please find page 34 of the 2013 CompUSA annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

The decrease in Corporate and other expenses primarily resulted from lower personnel related costs and lower professional fees incurred in 2013
as compared to 2012. The increase in Corporate and other expenses for 2012 compared to 2011 primarily resulted from increased overhead
expenses.
The discontinued operations of Software Solutions incurred a loss of approximately zero, $0.3 million and $0.2 million, net of tax, for 2013,
2012 and 2011, respectively.
Consolidated operating margin was impacted by special charges (gains) of $22.2 million, $46.3 million and $(5.6) million 2013, 2012 and 2011,
respectively.
INTEREST EXPENSE
Interest expense was $1.5 million, $1.7 million, and $2.2 million for 2013, 2012 and 2011, respectively. The interest expense decrease for the
years 2013 compared to 2012 and 2012 compared to 2011 is attributable to decreasing balances owed on the Recovery Zone Bond facility and
outstanding capital lease obligations.
INCOME TAXES
The Company’
s effective tax rate was 100.9% in 2013 as compared to an 80.8% benefit in 2012. The high effective income tax rate in 2013 was
primarily due to the establishment of a valuation allowance for U.S. federal deferred tax assets of approximately $20.5 million and for state
deferred tax assets of approximately $3.9 million. These valuation allowances were recorded primarily as a result of the three year cumulative
loss recorded in the U.S. Additionally full valuation allowances of approximately $2.5 million were recorded against the deferred tax assets of
the Company’s subsidiaries in Sweden and Italy in 2013.
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.
Seasonality
The Company’
s fourth quarter has historically represented a greater 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. The following table sets forth the net sales
seasonality, excluding discontinued operations, for each of the quarters since January 1, 2011 (amounts in millions) .
30
Table of Contents
Quarter Ended
March 31
June 30
September 30
December 31
2013
Net sales
$
880.6
$
805.7
$
791.8
$
874.2
Percentage of year
’
s net sales
26.3
%
24.0
%
23.6
%
26.1
%
2012
Net sales
$
913.1
$
849.1
$
847.0
$
935.1
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
%