Restoration Hardware 2012 Annual Report Download - page 139
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Based on research and analysis, the Company believes the straight-line method of accounting for stock-based
compensation expense for service-only awards is the predominant method used in its industry. In order for the
Company’s results of operations to be comparable to its peers, it has concluded that the straight-line method of
accounting for stock-based compensation is a preferable accounting method in accordance with ASC 250-10-45.
The following table presents the comparative effect of the change in accounting method and its impact on
key components of the Company’s consolidated statements of operations (dollar amounts in thousands):
Year Ended
January 28,
2012
January 29,
2011
As
Reported
As
Revised
As
Reported
As
Revised
Net revenues $958,084 $958,084 $772,752 $772,752
Cost of goods sold 601,735 601,735 501,132 501,132
Gross profit 356,349 356,349 271,620 271,620
Selling, general and administrative expense 329,753 329,506 275,859 274,836
Income (loss) from operations 26,596 26,843 (4,239) (3,216)
Interest expense (5,134) (5,134) (3,150) (3,150)
Income (loss) before income taxes 21,462 21,709 (7,389) (6,366)
Income tax expense 1,121 1,121 685 685
Net income (loss) $ 20,341 $ 20,588 $ (8,074) $ (7,051)
Shares used in computing basic and diluted net
income (loss) per share 468 468 100 100
Basic and diluted net income (loss) per share $ 43,464 $ 43,991 $ (80,740) $ (70,510)
The following table presents the comparative effect of the change in accounting method and its impact on
key components of the Company’s consolidated balance sheets (in thousands):
January 28, 2012
As
Reported
As
Revised
Stockholders’ equity:
Common stock, zero par value, 1,000 shares
authorized, 1,000 shares issued and outstanding $ — $ —
Additional paid-in capital 293,281 292,011
Accumulated other comprehensive income 1,150 1,150
Accumulated deficit (43,968) (42,698)
Total stockholders’ equity $250,463 $250,463
The change did not impact cash flows from total operating, investing or financing activities.
NOTE 4—SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These consolidated financial statements are prepared in conformity with accounting principles generally
accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. Accordingly, all intercompany balances and transactions have been
eliminated through the consolidation process.
83
Form 10-K