DSW 2008 Annual Report Download - page 39

d
ecrease
i
n accrue
db
onuses, part
i
a
ll
yo
ff
set
b
y
i
ncreases
i
n accounts paya
bl
ean
d
cas
h
rece
i
ve
df
rom tenant an
d
c
onstruction allowances related to new stores.
We operate a
ll
our stores, our pr
i
mary
di
str
ib
ut
i
on center, our
f
u
lfill
ment center an
d
our corporate o
ffi
ce spac
e
from leased facilities. All lease obli
g
ations are accounted for as operatin
g
leases. We disclose the minimum
p
a
y
ments due under operatin
g
leases in the notes to the financial statements included elsewhere in this Annual
Report on Form 10-K
.
Althou
g
h our plan of continued expansion could place increased demands on our financial, mana
g
erial,
operat
i
ona
l
an
d
a
d
m
i
n
i
strat
i
ve resources an
d
resu
l
t
i
n
i
ncrease
dd
eman
d
s on management, we
d
o not
b
e
li
eve t
h
a
t
our ant
i
c
i
pate
d
growt
h
p
l
an w
ill h
ave an un
f
avora
bl
e
i
mpact on our operat
i
ons or
li
qu
idi
ty. T
h
e current s
l
ow
d
own
i
n
t
he United States econom
y
has adversel
y
affected consumer confidence and consumer spendin
g
habits, which ma
y
r
esu
l
t
i
n
f
urt
h
er re
d
uct
i
ons
i
n customer tra
ffi
can
d
compara
bl
e store sa
l
es
i
n our ex
i
st
i
ng stores w
i
t
h
t
h
e resu
l
tant
i
ncrease
i
n
i
nventory
l
eve
l
san
d
mar
kd
owns. Re
d
uce
d
sa
l
es may resu
l
t
i
nre
d
uce
d
operat
i
ng cas
hfl
ows
if
we are not
able to appropriatel
y
mana
g
e inventor
y
levels or levera
g
e expenses. These ne
g
ative economic conditions ma
y
als
o
affect future profitability and may cause us to reduce the number of future store openings, impair goodwill or impai
r
l
ong-
li
ve
d
assets.
I
nvesting Activities
For fiscal 2008, cash used in investin
g
activities amounted to $104.1 million compared to $82.8 million fo
r
fiscal 2007. During the year ended January 31, 2009,
$
207.6 million of cash was used to purchase available-for-sal
e
and held-to-maturit
y
securities while
$
185.6 million of cash was
g
enerated b
y
the sale of available-for-sale an
d
held-to-maturit
y
securities. Durin
g
fiscal 2008, we had capital expenditures of $81.0 million, of which $82.2 millio
n
was paid during fiscal 2008. Of this amount, we incurred
$
53.8 million for new stores and remodels of existing
s
tores
,$
12.1 million related to the warehouses
,$
5.0 million related to dsw.com and
$
10.1 million related t
o
i
n
f
ormat
i
on tec
h
no
l
o
gy
equ
i
pment up
g
ra
d
es an
d
new s
y
stems, exc
l
u
di
n
gd
sw.com.
For fiscal 2007, cash used in investing activities amounted to
$
82.8 million compared to
$
140.5 million fo
r
fiscal 2006. Durin
g
the
y
ear ended Februar
y
2, 2008, $209.9 million of cash was used to purchase available-for-sal
e
s
ecurities while
$
226.0 million of cash was generated by the sale of available-for-sale securities. During fiscal 2007
,
we had capital expenditures of
$
102.5 million, of which
$
99.0 million was paid during fiscal 2007. Of this amount,
we incurred
$
45.7 million for new stores and remodels of existin
g
stores,
$
15.1 million related to the corporate
office ex
p
ansion and warehouses, $26.3 million related to the start u
p
of dsw.com and $15.4 million related t
o
i
n
f
ormat
i
on tec
h
no
l
ogy equ
i
pment upgra
d
es an
d
new systems, exc
l
u
di
ng
d
sw.com. Cas
h
use
df
or cap
i
ta
l
expen-
ditures was
$
41.9 million for fiscal 2006. In fiscal 2006, costs were primarily related to new stores, our additiona
l
home office s
p
ace, store remodels and fixtures for the additional Stein Mart locations.
We expect to spend approximatel
y$
35 million for capital expenditures in fiscal 2009. Our future investment
s
w
ill d
epen
dh
eav
ily
on t
h
e num
b
er o
f
stores we open an
d
remo
d
e
l
,
i
n
f
rastructure an
di
n
f
ormat
i
on tec
h
no
l
o
gy
p
rograms that we undertake and the timing of these expenditures. In fiscal 2008, we opened 41 new DSW stores. We
pl
an to open approx
i
mate
l
y 10 stores
i
n
fi
sca
l
2009. Dur
i
ng
fi
sca
l
2008, t
h
e average
i
nvestment requ
i
re
d
to open a
ty
pical new DSW store was approximatel
y
$1.6 million, prior to construction and tenant allowances. Of this
amount,
g
ross inventor
y
t
y
picall
y
accounted for $0.5 million, fixtures and leasehold improvements t
y
picall
y
accounted for
$
1.0 million and pre-opening advertising and other pre-opening expenses typically accounted for
$0.1 million
.
Fi
nanc
i
n
g
Act
i
v
i
t
i
es
For fiscal 2008, net cash provided by financing activities was less than
$
0.1 million compared to
$
0.6 millio
n
for fiscal 2007
,
and
$
0.8 million in fiscal 2006
.
C
ontractual
O
bl
ig
at
i
on
s
We have the followin
g
minimum commitments under contractual obli
g
ations, as defined b
y
the SEC. A
“
purc
h
ase o
bli
gat
i
on”
i
s
d
e
fi
ne
d
as an agreement to purc
h
ase goo
d
s or serv
i
ces t
h
at
i
sen
f
orcea
bl
ean
dl
ega
lly
3
5