Financials: Notes to Consolidated Financial Statements
Goodwill
The Company amortizes goodwill on a straight-line basis over 40 years. As of
January 29, 2000 and January 30, 1999, accumulated amortization of goodwill was
$252,000 and $210,000, respectively. The Company continually evaluates whether
events or circumstances have occurred that indicate the remaining estimated
useful life of goodwill may warrant revision or that the remaining balance of
goodwill may not be recoverable. When factors indicate that goodwill should be
evaluated for possible impairment, the Company uses an estimate of the related
operating profits over the remaining life of the goodwill in measuring
recoverability.
Store Opening Costs
Non-capital expenditures incurred in preparation for opening new retail stores
are expensed as incurred.
Insurance Accruals
The Company is subject to large deductibles under its workers' compensation
policy. Insurance coverage is maintained for cumulative losses in amounts
management considers adequate. Amounts are accrued currently for the estimated
cost of claims incurred, both reported and unreported.
Income Taxes
The Company recognizes deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax assets and liabilities
are determined based on the differences between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse.
Statements of Cash Flows
For purposes of the consolidated statements of cash flows, the Company considers
all short-term, highly liquid investments with original maturities of 90 days or
less to be cash equivalents.
Earnings Per Share
Basic net income per share ("EPS") excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock are
exercised, converted into common stock, or resulted in the issuance of common
stock that then shared in the earnings of the Company. Diluted EPS has been
computed based on the average number of shares outstanding including the effect
of outstanding stock options, if dilutive, in each respective year. A
reconciliation of the weighted average shares for basic and diluted EPS is as
follows:
Options outstanding of 464,000, 619,000 and 1,557,000 for the years ended January 29, 2000, January 30, 1999 and January 31, 1998, respectively, were not included in the table above as they were anti-dilutive.