Stamps.com 2005 Annual Report Download - page 56

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STAMPS.COM INC.
NOTES TO FINANCIAL STATEMENTS (continued)
5. Accounts Payable and Accrued Expenses
The following table summarizes the Company’
s accounts payable and accrued expenses as of December 31, 2005 and 2004 (in thousands):
6.
2005
2004
Payroll and related accrual
$
1,728
$
1,425
Legal and related accrual
488
167
Deferred rent accrual
227
140
Sales and Marketing related accrual
3,227
2,051
Sales tax accrual
556
454
Other accrual
2,288
1,304
Accrued expenses
$
8,514
$
5,541
Allowance for Doubtful Accounts
As of December 31, 2005, and 2004, the allowance for doubtful accounts totaled $8,713 and $6,305, respectively. Increases in the
allowance for doubtful accounts totaled $2,408 and $5,020 for the years ended December 31, 2005 and 2004, respectively. Write-offs against
the allowance for doubtful accounts totaled $0 for the years ended December 31, 2005 and 2004.
7. Property and Equipment
Property and equipment is summarized as follows (in thousands):
During 2005, 2004 and 2003, depreciation expense was approximately $1.8 million, $2.0 million and $2.7 million, respectively.
8.
2005
2004
Furniture and equipment
$
1,713
$
1,713
Computers and software
13,127
10,361
Leasehold improvements
1,283
1,193
16,123
13,267
Less accumulated depreciation and amortization
(11,631
)
(9,794
)
Property and equipment, net
$
4,492
$
3,473
Income Taxes
The provision for income taxes consists solely of alternative minimum state and federal taxes. The Company’s effective tax rate differs
from the statutory federal income tax rate primarily as a result of the establishment of a valuation allowance for the future benefits to be
received from the deferred tax assets including net operating loss carryforwards and research tax credit carryforwards. The tax effect of
temporary differences that give rise to a significant portion of the deferred tax assets and liabilities at December 31, 2005 and 2004 are
presented below (in thousands):
F-15
2005
2004
Deferred tax assets (liabilities):
Net operating loss carryforward
$
105,221
$
109,588
Tax credits
983
747
Depreciation
(285
)
(835
)
Capitalized start-up costs
208
(260
)
Accruals
1,570
1,322
Total deferred tax assets
107,697
110,562
Valuation allowance
(107,697
)
(110,562
)
Net deferred tax assets
$
—
$
—