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STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-9
The following table presents the calculation of basic and diluted income (loss) per common share (shares in thousands):
2010 2009 2008
Numerator:
Net income (loss) $48,753 $23,553 $(71,301)
Income allocated to participating securities 1,492 511 -
Net income (loss) available to common stockholders $47,261 $23,042 $(71,301)
Denominator:
Basic weighted-average shares outstanding 42,780 41,822 41,366
Incremental shares from share-based compensation plans 812 1,260 -
Diluted weighted-average shares outstanding 43,592 43,082 41,366
Net income (loss) per share:
Basic $1.10 $0.55 $(1.72)
Diluted $1.08 $0.54 $(1.72)
Options to purchase approximately 1.2 million, 1.2 million and 2.0 million shares of common stock that were outstanding during 2010, 2009
and 2008, respectively, were not included in the computation of diluted net income (loss) per share as the exercise prices of these options
were greater than the average market price of the common shares. Had we reported net income for fiscal 2008, common stock equivalents
totaling 39,108 would have been included in the diluted net income per share calculation.
Consolidated Statements of Operations Classifications. Cost of merchandise sold includes merchandise costs, net of vendor discounts
and allowances; freight; inventory shrinkage; store occupancy costs (including rent, common area maintenance, real estate taxes, utilities
and maintenance); payroll, benefits and travel costs directly associated with buying inventory; and costs related to the consolidation centers
and distribution warehouses.
SG&A expenses include store operating expenses, such as payroll and benefit costs, advertising, store supplies, depreciation and other
direct selling costs, and costs associated with our corporate functions.
Recent Accounting Pronouncements
In October 2009, the FASB issued guidance impacting the determination of when individual deliverables included in an arrangement with
multiple deliverables may be treated as separate units of accounting. The guidance, which was incorporated into ASC Topic 605, Revenue
Recognition, eliminates the residual method of allocation for multiple-deliverable revenue arrangements, and requires that arrangement
consideration be allocated at the inception of an arrangement to all deliverables using the relative selling price method. This guidance is
effective for fiscal years beginning on or after June 15, 2010, however early adoption is permitted. We will use this new guidance to
account for our Co-Brand Credit Card Consumer Program Agreement. We plan to adopt this guidance in the first quarter of 2011 and do
not anticipate it will have a material effect on our consolidated financial statements.