CompUSA 2014 Annual Report Download - page 37

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INCOME TAXES
The Company’
s effective tax rate was 15.0% in 2014 as compared to a 100.9% in 2013. The effective income tax rate in 2014 was primarily due
to tax expense in certain states in the U.S., foreign locations with taxable income and the establishment of a valuation allowance for the deferred
tax assets of a U.K. subsidiary of approximately $1.7 million.
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 2014 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.
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. With the exiting of the retail store business and
the closing of substantially all retail stores in 2015, the Company expects to experience less seasonality of its business in future periods. The
following table sets forth the net sales seasonality, excluding discontinued operations, for each of the quarters since January 1, 2012
(amounts in
millions) .
Financial Condition, Liquidity and Capital Resources
Selected liquidity data (in millions):
33
Table of Contents
Quarter Ended
March 31
June 30
September
30
December 31
2014
Net sales
$
873.4
$
831.1
$
825.4
$
912.9
Percentage of year
’
s net sales
25.4
%
24.1
%
24.0
%
26.5
%
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
%
December 31,
2014
2013
$ Change
Cash
$
165.0
$
181.4
$
(16.4
)
Accounts receivable, net
$
355.5
$
333.3
$
22.2
Inventories
$
289.9
$
321.8
$
(31.9
)
Assets available for sale
$
-
$
1.1
$
(1.1
)
Prepaid expenses and other current assets
$
15.9
$
16.4
$
(0.5
)
Accounts payable
$
420.2
$
418.8
$
1.4
Accrued expenses and other current liabilities
$
93.0
$
89.2
$
3.8
Current portion of long term debt
$
2.7
$
2.5
$
0.2
Working capital
$
312.1
$
345.8
$
(33.7
)