Stein Mart 2009 Annual Report Download - page 33

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):
2009 2008 2007
Numerator:
Net income (loss) $23,553 $(71,301) $(4,530)
Income allocated to participating securities 511 - -
Net income (loss) available to common stockholders $23,042 $(71,301) $(4,530)
Denominator:
Basic weighted-average shares outstanding 41,822 41,366 42,123
Incremental shares from share-based compensation plans 1,260 - -
Diluted weighted-average shares outstanding 43,082 41,366 42,123
Net income (loss) per share:
Basic $0.55 $(1.72) $(0.11)
Diluted $0.54 $(1.72) $(0.11)
Options to purchase approximately 1.2 million, 2.0 million and 1.6 million shares of common stock that were outstanding during 2009, 2008
and 2007, 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. Common stock equivalents totaling 39,108 and 413,414, respectively,
would have been included in the diluted net income per share calculation had we reported net income for fiscal 2008 and 2007.
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.
Reclassifications. Certain reclassifications have been made in prior years’ Notes to Consolidated Financial Statements to conform to
classifications used in the current year.
Recent Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board (“FASB”) issued guidance which establishes the FASB Accounting Standards
Codification (“ASC”) as the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and
interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. This guidance, which was incorporated into ASC Topic 105, Generally Accepted Accounting
Principles, is effective for interim and annual periods ending after September 15, 2009. The adoption of the guidance during our third
quarter of 2009 changed certain disclosure references to U.S. GAAP, but did not have any other impact on our consolidated financial
statements.
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. As discussed in Note 1, we use this
guidance to account for our Co-brand Credit Card Consumer Program Agreement. We do not anticipate that adoption of this guidance in
2010 will have a material effect on our consolidated financial statements.
Effective February 1, 2009, we adopted the fair value measurement guidance as required by ASC Topic 820, Fair Value Measurements
and Disclosures, as it relates to nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements