|(U.S. dollars in millions, except per share data)|
|Highlights||Quarter Ended||Nine Months Ended|
|September 30,||September 30,|
|Special charges (gains), net||$2.0||$0.4||$6.1||$(6.1)|
|Operating income (loss) from continuing operations||$(1.9)||$19.3||$6.9||$59.8|
|Operating margin from continuing operations||(0.2)%||2.1%||0.3%||2.2%|
|Diluted earnings per share||$0.38||$0.29||$0.51||$1.07|
|Special charges (gains), net, per diluted share, after tax||$0.03*||$0.01||$0.13*||$(0.11)|
|* Excludes the tax impact of valuation allowance reversals.|
- United States Technology Brands: In early Q4, the Company conducted an evaluation of its multi-brand United States consumer strategy and the intangible assets used in that strategy and on October 31, 2012 its Board of Directors concluded that the Company’s future North American consumer business would be optimized by consolidating its United States consumer operations under TigerDirect, its leading and largest brand. Accordingly, the Company will record one-time, non-cash impairment charges related to the intangible assets of CompUSA and Circuit City of approximately $34 million, pre-tax, in the fourth quarter of 2012.
- PC Manufacturing Business: In early Q4, the Company conducted an evaluation of its PC manufacturing operations and on October 31, 2012 its Board of Directors concluded that the Company’s future North American technology results will be enhanced by exiting the computer manufacturing business. The Company will continue service and support for its previously sold PCs. As a result of exiting this business, the Company expects to incur aggregate one-time charges of approximately $6 to $8 million, pre tax, in the fourth quarter of 2012 and during 2013 for asset impairment, exit and severance expenses. The Company anticipates that the opportunity benefit of strengthening its strategic relationships with vendor partners within the desktop PC category should provide improved profitability of between $1 and $2 million, pre tax, on an annual basis.
- European Shared Services Center: To facilitate the continued growth of its European Technology business, the Company intends to open a shared services center in Eastern Europe in 2013. This new facility, approved by the Company’s Board of Directors on October 31, 2012, will provide certain administrative and back office services and will help drive operational efficiencies and better serve the Company’s pan-European operating strategy. The Company expects that one-time exit, severance and startup costs in order to implement the shared services center, as well as other cost reduction initiatives in Europe anticipated to occur in the fourth quarter of 2012 and the first quarter of 2013, will aggregate between $14 and $16 million, pre tax, during the fourth quarter of 2012 and during 2013 and that it will realize a reduction in its cost structure between $9 and $11 million, pre tax, on an annual basis after implementation of the shared services center.