CompUSA 2013 Annual Report Download - page 37

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Macroeconomic conditions, such as business and consumer sentiment, may affect our revenues, cash flows or financial condition. However, we
do not believe that there is a direct correlation between any specific macroeconomic indicator and our revenues, cash flows or financial
condition. We are not currently interest rate sensitive, as we have significant cash balances and minimal debt.
The expenses and capital expenditures described above will require significant levels of liquidity, which we believe can be adequately funded
from our currently available cash resources. In 2014 we anticipate capital expenditures of approximately $14.0 million, though at this time we
are not contractually committed to incur these expenditures. Over the past several years we have engaged in opportunistic acquisitions, choosing
to pay the purchase price in cash, and may do so in the future as favorable situations arise. However, a deep and prolonged period of reduced
consumer and/ or business to business spending could adversely impact our cash resources and force us to either forego future acquisition
opportunities or to pay the purchase price in shares of our common stock, which could have a dilutive effect on our earnings per share. In
addition we anticipate cash needs for implementation of the financial systems. We believe that our cash balances, future cash flows from
operations and our availability under credit facilities will be sufficient to fund our working capital and other cash requirements for at least the
next twelve months.
We
maintain our cash and cash equivalents primarily in money market funds or their equivalent. As of December 31, 2013, all of our
investments had maturities of less than three months. Accordingly, we do not believe that our investments have significant exposure to interest
rate risk. At December 31, 2013 cash balances held in foreign subsidiaries totaled approximately $89.4 million. These balances are held in local
country banks and are not readily available to the U.S. parent company on a tax efficient basis. The Company would need to accrue and pay
income taxes on any cash repatriated to the U.S. parent company. The Company has made the decision to indefinitely reinvest earnings in its
foreign tax jurisdictions. The Company had in excess of $200 million of liquidity (cash and undrawn line of credit) in the U.S. as of December
31, 2013, which is sufficient to fund its U.S. operations and capital needs, including any dividend payments, for the foreseeable future.
We are obligated under non-
cancelable operating leases for the rental of most of our facilities and certain of our equipment which expire at
various dates through 2032. We have sublease agreements for unused space we lease in the United States. In the event the sub lessee is unable to
fulfill its obligations, we would be responsible for rents due under the leases.
Following is a summary of our contractual obligations for future principal payments on our debt, minimum rental payments on our non-
cancelable operating leases and minimum payments on our other purchase obligations as of December 31, 2013 (in millions):
Our purchase and other obligations consist primarily of product purchase commitments, certain employment agreements and service agreements.
In addition to the contractual obligations noted above, we had $4.9 million of standby letters of credit outstanding as of December 2013.
We are party to certain litigation, the outcome of which we believe, based on discussions with legal counsel, will not have a material adverse
effect on our consolidated financial statements.
Tax contingencies are related to uncertain tax positions taken on income tax returns that may result in additional tax, interest and penalties being
paid to taxing authorities. As of December 31, 2013, the Company had no material uncertain tax positions.
33
Table of Contents
Total
Less than 1
year
1
-
3 years
3
-
5 years
More than 5
years
Contractual Obligations:
Capital lease obligations
$
6.5
2.9
3.6
-
-
Non
-cancelable operating leases, net of
subleases
211.2
27.2
74.2
51.0
58.8
Purchase & other obligations
62.3
43.3
9.5
9.5
-
Total contractual obligations
$
280.0
73.4
87.3
60.5
58.8