Nutrisystem 2003 Annual Report Download - page 41

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39
Company purchased 220,100 shares of common stock for an aggregate cost of $123 (an average price of $0.56 per share).
To date, all treasury stock has been retired. Management has been authorized to repurchase up to 5,000,000 shares of
common stock, and through December 31, 2003 a total of 2,760,291 shares have been repurchased.
Preferred Stock
The Company has authorized 5,000,000 shares of preferred stock issuable in series upon resolution of the Board of
Directors. Unless otherwise required by law, the Board of Directors can, without stockholder approval, issue preferred
stock in the future with voting and conversion rights that could adversely affect the voting power of the common stock.
The issuance of preferred stock may have the effect of delaying, averting or preventing a change in control of the
Company.
8. INCOME TAXES
Income taxes consist of the following:
Year Ended December 31
2003 2002 2001
Current $
$
$
Deferred (1,173) 966 501
Change in deferred valuation
allowance
(2,224)
(966)
(501)
$ (3,397) $
$
A reconciliation of the statutory federal income tax rate to the Companys effective tax rate is as follows:
Year Ended December 31
2003
2002 2001
Statutory federal income tax rate
(34.0)%
34.0%
34.0%
State income taxes, net of federal
benefit
(6.0)
6.0
6.0
Basis difference in loss in disposal of
discontinued operation
Change in deferred tax valuation
allowance
131.4
(40.0)
(40.0)
91.4%
%
%
The significant items comprising the Companys deferred income tax assets and liabilities are as follows:
December 31
-------------------------------------------------
2003 2002
Deferred tax asset-
Reserves and accruals $ 364 $ 508
Goodwill
472
383
Net operating loss carryforward 3,279 2,014
Other 377 422
4,492 3,327
Deferred tax liability-
Property and equipment (23) (23)
Net deferred tax asset 4,469 3,304
Valuation allowance (3,304)
$ 4,469 $