CompUSA 2015 Annual Report Download - page 34
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SpecialchargesincludedinNATGdiscontinuedoperationstotaledapproximately$1.6million.
IPGrecordedspecialchargesofapproximately$1.0millionduringtheyearrelatedtoseverancecostsassociatedwiththeintegrationofP.E.G.of$0.4millionand
$0.6millionforleaseterminationcostsrelatedtooneoftheirleasedfacilities.
EMEAincurredspecialchargesofapproximately$1.3millionduringtheyear.Thesechargesincluded$0.7millionrelatedtothepreviouslydisclosedexitofthe
Chief Executive of the EMEA Technology operations and an impairment charge of $0.7 million related to the long-lived assets in Germany, Italy, Spain and
Swedenoperations.Theimpairmentchargeresultedfromnegativecashflowsin2015andaforecastforcontinuedcashuseintheseentities.Afavorableseverance
accrualadjustmentof$0.1millionwasalsorecordedduringtheyear.
TheCompanyincurredspecialchargesofapproximately$15.9millionincontinuingoperationsin2014.TheNATGsegmentchargesincludedapproximately$3.5
millionrelatedtothefinalsaleoftheexitedPCmanufacturingbusiness,changesintheestimateofleasevaluationaccrualsandthebuyoutofthetworetailstore
leasesthatwereexitedin2013priortoleaseexpiration(otherexitcosts)andchargesforadditionallegalandprofessionalfeesrelatedtothepreviouslydisclosed
investigationandsettlementwithformerofficersandemployees.Inaddition,asaresultofnegativecashflowsinitsoperationsintheUnitedStatesandCanadain
2014andaforecastforcontinuedcashuse,theCompanyconductedanevaluationofthelong-livedandintangibleassetsinthoseoperationsandconcludedthat
thoseassetswereimpaired.Consequentlyanimpairmentchargewasrecorded.
InEMEA,theCompanyincurredspecialchargesin2014relatedtotherestructureofcertainsmallmarketoperationsin2014.Thesecharges,estimatesofwhich
werepreviously disclosed,included approximately $11.7million in estimated workforce reductions related to the restructuring of our European operations and
$0.5millionincontinuedrecruitmentcoststostafftheEuropeansharedservicescenter.
Corporateandothersegmentincurred$0.1millionofspecialchargesrelatedtoseverancecostsin2014.
SpecialchargesincludedinNATGdiscontinuedoperationstotaledapproximately$8.5millionin2014.
TheCompanyincurredspecialchargesofapproximately$16.2millionincontinuingoperationsin2013.TheNATGsegmentchargesincludedapproximately$8.2
millionrelatedtoleaseterminationcosts(calculatedusingthenetpresentvalueofcontractualgrossleasepaymentsnetofestimatedsubleaserentalincome,orin
thecaseofnegotiatedsettlements,thebuyoutamount),fixedassetwriteoffsrelatedtotheclosingofunderperformingretailstores,one-timeimpairmentcharges
relatedtointangibleassetsoftheCompUSAbrandinPuertoRico,workforcereductionchargesforseniormanagementchangesintheNorthAmericanoperations,
reserveadjustmentsrelatedtothefacilityclosingandexitfromthePCmanufacturingbusinessandadditionallegalandprofessionalfeesrelatedtothepreviously
disclosedcompletedinvestigationandsettlementwithaformerofficeranddirector.
In EMEA, the Company incurred special charges in 2013 related to the European shared services center implementation and European workforce reductions.
These charges included approximately $5.9 million in workforce reductions and other exit costs, $1.8 million related to start up costs of the European shared
servicescenterand$0.5millionincontinuedrecruitmentcostsfortheEuropeansharedservicescenter.
The Company’s IPG segment incurred special charges in 2013 of approximately $0.1 million for personnel costs and benefited from an adjustment to lease
terminationcostsofapproximately$0.3millionrelatedtotheplannedclosingandrelocationofoneofitssmallerdistributioncenterstoanew,significantlylarger
distributionandcallcenterinthesecondquarterof2012.
SpecialchargesincludedinNATGdiscontinuedoperationstotaledapproximately$6.0millionin2013.
OPERATING MARGIN
ThedeclineinIPGoperatingmarginin2015wasprimarilyattributabletoreducedfreightmarginsandincreaseddistributioncostsassociatedwiththeopeningofa
newdistributioncenterinthethirdquarterof2015.TheCompanyanticipatesthatthisnewfacilitywillresultinimprovedprofitabilityfromfreightcostreductions
towestcoastcustomersandimprovedefficiencyattheotherdistributioncenters.
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