Memorex 2012 Annual Report Download - page 96

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We are subject to several pending or threatened legal actions by the individual European national levy collecting
societies in relation to private copyright levies under the European Copyright Directive. Those actions generally seek payment
of the commercial and consumer optical levies withheld by Imation. Imation has corresponding claims in those actions
seeking reimbursement of levies improperly collected by those collecting societies. Although these actions are subject to the
uncertainties inherent in the litigation process, based on the information presently available to us, management does not
expect that the ultimate resolution of these actions will have a material adverse effect on our financial condition, results of
operations or cash flows. We anticipate that court decisions may be rendered in 2013 that may directly or indirectly impact our
levy exposure in specific European countries which could trigger a review of our levy exposure in those countries.
Note 16 — Related Party Transactions
As a result of the arrangement to acquire the rights to the TDK Life on Record brand under an exclusive long-term
license from TDK Corporation (TDK), TDK became our largest shareholder and owned approximately 18 percent and 20
percent of our shares as of December 31, 2012 and 2011. In connection with this arrangement we entered into a Supply
Agreement with TDK.
In 2012, 2011 and 2010 we purchased products and services under the Supply Agreement which allows us to purchase
a limited number of LTO Tape media and Blu-ray removable recording media products and accessory products for resale in
the aggregate amounts of approximately $38 million, $50 million and $28 million, respectively, from TDK or its affiliates. We
did not sell products nor provide services to TDK or its affiliates in 2012, 2011 or 2010. Trade payables to TDK or its affiliates
were $9.1 million and $9.8 million at December 31, 2012 and 2011, respectively. No trade receivables from TDK or its
affiliates were outstanding as of December 31, 2012 or December 31, 2011.
On January 13, 2011, the Board of Directors approved a restructuring plan to discontinue our tape coating operations at
our Weatherford, Oklahoma facility by April 2011 and subsequently close the facility. We signed a strategic agreement with
TDK to jointly develop and manufacture magnetic tape technologies. Under the agreement, we will collaborate on the
research and development of future tape formats in both companies’ research centers in the U.S. and Japan, while
consolidating tape coating operations to the TDK Yamanashi manufacturing facility.
Note 17 — Quarterly Data (Unaudited)
First Second Third Fourth Total(1)
(In millions, except per share amounts)
2011
Net revenue ...................................... $316.5 $323.0 $308.6 $ 342.3 $1,290.4
Gross profit ....................................... 54.0 54.0 57.2 51.5 216.7
Operating loss ..................................... (3.4) (9.3) (8.3) (12.1) (33.1)
Net loss .......................................... (7.2) (12.5) (14.1) (12.9) (46.7)
Loss per common share, net loss:
Basic ......................................... $(0.19) $ (0.33) $ (0.38) $ (0.34) $ (1.24)
Diluted ........................................ (0.19) (0.33) (0.38) (0.34) (1.24)
2012
Net revenue ...................................... $281.7 $270.6 $248.2 $ 299.1 $1,099.6
Gross profit ....................................... 56.1 52.4 45.7 48.1 202.3
Operating loss ..................................... (8.9) (10.3) (6.5) (310.4) (336.1)
Net loss .......................................... (12.2) (12.0) (6.3) (310.2) (340.7)
Loss per common share, net loss:
Basic ......................................... $(0.33) $ (0.32) $ (0.17) $ (8.34) $ (9.09)
Diluted ........................................ (0.33) (0.32) (0.17) (8.34) (9.09)
(1) The sum of the quarterly loss per share may not equal the annual loss per share due to changes in average shares
outstanding.
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