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STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-11
5. Leases and Commitments
We lease all our retail stores, support facilities and certain equipment under operating leases. Annual store rent is generally comprised of a
fixed minimum amount plus a contingent amount based on a percentage of sales in excess of specified levels. Most store leases also
require additional payments covering real estate taxes, common area costs and insurance.
Rent expense is as follows:
2009 2008 2007
Minimum rentals $80,724 $82,146 $77,774
Contingent rentals 430 275 332
$81,154 $82,421 $78,106
Our shoe department inventory is provided by a single supplier under a supply agreement. Our percentage of net revenue per the supply
agreement was $11.9 million in 2009, $12.4 million in 2008 and $13.5 million in 2007 and is included in other income, net in the
Consolidated Statements of Operations.
At January 30, 2010, we were committed under non-cancelable operating leases with remaining terms of up to 15 years. Future minimum
payments under non-cancelable leases are:
2010 $ 76,598
2011 67,092
2012 55,082
2013 45,762
2014 35,231
Thereafter 76,691
Total $356,456
6. Income Taxes
Temporary differences, which give rise to deferred tax assets and liabilities, are as follows:
January 30,
2010
January 31,
2009
Gross deferred tax assets:
Unredeemed gift and return card liabilities $ 4,694 $ 4,271
Deferred rent liability 3,175 3,409
Deferred compensation liability 1,382 2,719
Insurance reserves 3,170 3,146
Share-based compensation 6,209 4,962
Store closing reserves 1,682 1,955
Other accrued liabilities 3,399 2,234
NOL and credit carryforwards 1,084 3,132
Other 636 1,261
25,431 27,089
Valuation allowance (16,686) (18,958)
Gross deferred tax assets, net of valuation allowance 8,745 8,131
Gross deferred tax liabilities:
Inventory 3,678 3,618
Property and equipment 3,370 2,147
Prepaid items 1,381 1,349
Other assets 316 731
Gross deferred tax liabilities 8,745 7,845
Net deferred tax asset $ - $ 286