CompUSA 2015 Annual Report Download - page 54

Table of Contents
SYSTEMAX INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Systemax Inc. is primarily a direct marketer of brand name and private label products. During 2015, the Company’s  operations were organized in three
reportable business segments — Industrial Products Group (“IPG”), EMEA Technology Products Group (“EMEA”) and what was the largest business in
termsofrevenue,NorthAmericaTechnologyProductsGroup(“NATG”).EMEAandNATGwereaggregatedinprioryears.Smallerbusinessoperations
andcorporatefunctionsareaggregatedandreportedasanadditionalsegment–CorporateandOther(“Corporate”).
On December 1, 2015, the Company sold the business operations and certain assets and liabilities of the NATG business to PCM, Inc. (“PCM”) for
approximately $14 million (See Note 2). As a result, the operations of NATG are now reported both within continuing operations and as discontinued
operationsinthisForm10-K.TheCompanyfollowstheguidanceunderAccountingStandardsUpdate(“ASU”)2014-08,Reporting Discontinued Operations
and Disclosures of Disposals of Components of an Entity, whichrequiresdisclosuresofbothdiscontinuedoperationsandcertainotherdisposalsthatdonot
meetthedefinitionofadiscontinuedoperation.UnderASU2014-08inorderforadisposaltoqualifyfordiscontinuedoperationspresentationinthefinancial
statementsthedisposalmustbea“strategicshift”withamajorimpactforthereportingenity.Iftheentitymeetsthisthreshold,onlythecomponentsthat
wereinoperationatthetimeofdisposalarepresentedasdiscontinuedoperations.ThesaleoftheNATGbusinessinDecember2015hadamajorimpacton
theCompanyandthereforemetthestrategicshiftcriteria.TheNATGcomponentsinoperatonatthetimeofthesaleweretheB2BandEcommercebusinesses
andthethreeremainingretailstores.Accordingly,thesecomponentsandtheresultsofoperationshavebeenadjustedintheaccompanyingfinancialstatements
toreflectthepresentationofthediscontinuedoperations.
AspartoftheMarch31,2015announcementofrestructuringthebusinesstheCompanyclosed31retailstoresandawarehouseduringthesecondquarterof
fiscal2015.TheCompanyassessedthedisposalgroupunderASU2014-08andconcludedtheclosureofthedisposalgrouptobea"strategicshift".However,
thisstrategicshiftwasnotdeterminedtobea"major"strategicshiftbasedon theportionoftheconsolidatedbusinessthatthedisposalgrouprepresented.
Accordingly this disposal group, which includes all the operations that were ceased prior to the December 2015 sale to PCM is not presented in the
accompanyingfinancialstatementsasdiscontinuedoperationsandremainsincontinuingoperationsforthetwelvemonthsendedDecember31,2015andprior
periods.Pretaxlossesforthisdisposalgroupwere$39.0million,$17.9millionand$26.8millionfortheyearended December 31, 2015, 2014and2013,
respectively.
Principles of Consolidation —TheaccompanyingconsolidatedfinancialstatementsincludetheaccountsofSystemaxInc.anditswholly-ownedsubsidiaries
(collectively,the“Company”or“Systemax”).Allsignificantintercompanyaccountsandtransactionshavebeeneliminatedinconsolidation.
Reclassifications —Certainprioryearamountswerereclassifiedtoconformtocurrentyearpresentation.
Fiscal Year —TheCompany’sfiscalyearendsatmidnightontheSaturdayclosesttoDecember31.Forclarityofpresentationherein,allfiscalyearsare
referredtoasiftheyendedonDecember31.ThefiscalyearisdividedintofourfiscalquartersthateachendatmidnightonaSaturday.Fiscalquarterswill
typicallyinclude13weeks,butthefourthquarterwillinclude14weeksina53weekfiscalyear.Forclarityofpresentationherein,allfiscalquartersare
referredtoasiftheyendedonthetraditionalcalendarmonth. Thefullyearof2015included53weekscomparedto2014and2013whichincluded52weeks.
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Use of Estimates In Financial Statements —ThepreparationoffinancialstatementsinconformitywithGAAPrequiresmanagementtomakeestimatesand
assumptionsthataffecttheamountsreportedintheconsolidatedfinancialstatementsandaccompanyingnotes.TheCompanybasesitsestimatesonhistorical
experience,currentbusinessfactors,andvariousotherassumptionsthattheCompanybelievesarenecessarytoconsider,toformabasisformakingjudgments
aboutthecarryingvaluesofassetsandliabilities,therecordedamountsofrevenueandexpenses,andthedisclosureofcontingentassetsandliabilities.The
Companyissubjecttouncertaintiessuchastheimpactoffutureevents,economicandpoliticalfactors,andchangesintheCompany’sbusinessenvironment;
therefore,actualresultscoulddifferfromtheseestimates.
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