Lumber Liquidators 2007 Annual Report Download - page 68

The tax effects of temporary differences that result in significant portions of the deferred tax accounts are as
follows:
December 31,
2007 2006
Deferred Tax Liabilities:
Prepaid Expenses .......................................................... $ 393 $ 290
Depreciation and Amortization ............................................... 333 241
Total Deferred Tax Liabilities .................................................... 726 531
Deferred Tax Assets:
Stock Compensation Expense ................................................ 2,565 3,797
Reserves ................................................................ 919 677
Employee Benefits ........................................................ 605 —
Other ................................................................... 384 181
Total Deferred Tax Assets ....................................................... 4,473 4,655
Net Deferred Tax Asset ......................................................... $3,747 $4,124
The Company made income tax payments of $7,383, $6,989 and $10,381 in 2007, 2006 and 2005,
respectively.
NOTE 8. PROFIT SHARING PLAN
The Company maintains a profit-sharing plan, qualified under Section 401(k) of the Internal Revenue Code,
for all eligible employees. Employees are eligible to participate following the completion of one year of service
and attainment of age 21. The Company matches 50% of employee contributions up to 6% of eligible
compensation. The Company’s matching contributions, included in SG&A, totaled $231, $160 and $124 in 2007,
2006 and 2005, respectively.
NOTE 9. NET INCOME PER COMMON SHARE
The following table sets forth the computation of basic and diluted net income per common share:
Year Ended December 31,
2007 2006 2005
Net Income ............................................. $ 11,326 $ 12,898 $ 10,713
Weighted Average Common Shares Outstanding—Basic ......... 16,646,674 15,000,100 15,000,100
Effect of Dilutive Securities:
Common Stock Equivalents ............................ 150,460 — —
Redeemable Preferred Stock ............................ 6,837,861 7,952,018 7,952,018
Warrants ........................................... — 37,285 111,056
Weighted Average Common Shares Outstanding—Diluted ........ 23,634,995 22,989,403 23,063,174
Net Income per Common Share—Basic ....................... $ 0.68 $ 0.86 $ 0.71
Net Income per Common Share—Diluted ..................... $ 0.48 $ 0.56 $ 0.46
The Company’s calculation of diluted net income per common share in 2006 and 2005 included the dilutive
impact of Common Stock warrants under the Warrant Plan. For 2007, options to purchase 170,000 shares of
Common Stock and 81,300 restricted stock awards were not included in the computation of Weighted Average
Common Shares Outstanding—Diluted because the effect would be antidilutive. For 2006, options to purchase
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