CompUSA 2015 Annual Report Download - page 35

Table of Contents
ThedeclineinoperatingmargininEMEATechnologyProductssegmentfor2015wasprimarilyrelatedtoreducedsellingmarginsinEurope,particularlyinthe
UnitedKingdom,increasedexpensesinEuroperesultingfromatemporaryduplicationoflocalfunctionsandotherredundanciesaswecompletedthetransitionof
functionsfromeachcountrytotheEuropeansharedservicescenterandspecialchargesrelatedtotheexitfromtheconsumerandretailbusinesspartiallyoffsetby
lowerSG&AexpensesinNorthAmerica.
ThedecreaseinoperatingmargininIndustrialProductssegmentfor2014reflecttheincreasedinternetadvertisingspendingcomparedto2013todrivetraffic,
hiringofsubjectmatterexpertstobringadditionalvaluetoourcustomersandaslightdeclineingrossproductmargindrivenbyproductmixaswehavebegun
stockingmoredomesticallysourcedproducts.
Thedecline in NATGoperatingmarginfromcontinuingoperationsreflectsthereduced selling prices in connection withtheliquidationpricingstrategyinthe
retailstoresexited.
Consolidatedoperatingmarginwasimpactedbyspecialchargesof$27.9million,$15.9millionand$16.2millionin2015,2014and2013,respectively.
INTEREST EXPENSE
Interestexpensewas$1.0million,$1.0million,and$1.5millionfor2015,2014and2013,respectively.Theinterestexpenseisattributabletodecreasingbalances
owedontheRecoveryZoneBondfacilityandoutstandingcapitalleaseobligations.
INCOME TAXES
TheCompany’staxexpenseispresentedinbothcontinuinganddiscontinuedoperationsin2015and2014.Taxexpenseincludedincontinuingoperationswas
approximately$13.5millionin2015versus$11.9millionin2014.Taxexpensein2015wasdrivenprimarilybytaxexpenseinEMEA,Canada,PuertoRicoand
certainU.S.statesinboth2015and2014.Theincreaseintaxexpensein2015isprimarilyattributabletohighertaxableincomeinEMEAin2015.
TheCompany’seffectivetaxratewas15.0%in2014ascomparedtoa100.9%benefitin2013.Thehigheffectiveincometaxratein2015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.
Financial Condition, Liquidity and Capital Resources
Selectedliquiditydata(inmillions):
  December 31,   
  2015   2014   $ Change 
Cash  $ 215.1  $ 165.0  $ 50.1
Accountsreceivable,net  $ 266.3  $ 354.5  $ (88.2)
Inventories  $ 144.4  $ 292.9  $ (148.5)
Prepaidexpensesandothercurrentassets  $ 14.5  $ 15.9  $ (1.4)
Accountspayable  $ 346.5  $ 419.5  $ (73.0)
Accruedexpensesandothercurrentliabilities  $ 79.0  $ 95.4  $ (16.4)
Currentportionoflongtermdebt  $ 0.6  $ 2.8  $ (2.2)
Workingcapital  $ 214.2  $ 310.6  $ (96.4)
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