Stein Mart 2008 Annual Report Download - page 35

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STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-11
5. Leased Facilities and Commitments
The Company leases all of its retail and support facilities. Annual store rent is generally comprised of a fixed minimum amount plus a
contingent amount based on a percentage of sales exceeding a stipulated amount. Most leases also require additional payments covering
real estate taxes, common area costs and insurance. Rent expense is as follows:
2008 2007 2006
Minimum rentals $76,330 $72,247 $67,764
Contingent rentals 275 332 542
$76,605 $72,579 $68,306
During 2008 and 2007, the Company’s shoe department inventory was provided by a single supplier under a supply agreement. In 2006,
we used a second supplier that operated the shoe department under a sublease agreement. The Company’s percentage of net revenue
per the supply agreement was $12.4 million in 2008, $13.5 million in 2007 and $8.2 million in 2006, and sublease rental income per the
sublease agreement was $5.5 million in 2006. All amounts are included in other income, net in the Consolidated Statements of Operations.
At January 31, 2009, the Company was committed under non-cancelable leases with remaining terms of up to 15 years. Future minimum
payments under non-cancelable leases are:
2009 $ 74,971
2010 67,878
2011 58,724
2012 47,864
2013 39,860
Thereafter 92,565
Total $381,862
6. Income Taxes
Temporary differences, which give rise to deferred tax assets and liabilities, are as follows:
January 31,
2009
February 2,
2008
Gross deferred tax assets:
Unredeemed gift and return card liabilities $ 4,271 $ 3,861
Deferred rent liability 3,409 3,586
Deferred compensation liability 2,719 3,684
Insurance reserves 3,146 3,266
Share-based compensation 4,962 3,771
Store closing reserves 1,955 1,246
Other accrued liabilities 2,234 1,913
NOL and credit carryforwards 3,132 647
Other 1,261 1,552
27,089 23,526
Valuation allowance (18,958) -
Gross deferred tax assets, net of valuation allowance 8,131 23,526
Gross deferred tax liabilities:
Property and equipment 2,147 7,528
Inventory 3,618 3,793
Prepaid items 1,349 1,581
Other assets 731 1,721
Gross deferred tax liabilities 7,845 14,623
Net deferred tax asset $ 286 $ 8,903