Stein Mart 2014 Annual Report Download - page 44

STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-20
Share-Based Compensation Expense
For the years ended January 31, 2015, February 1, 2014 and February 2, 2013, share-based compensation expense was recorded as
follows:
2014 2013 2012
Cost of merchandise sold 2,765$ 2,548$ 3,275$
Selling, general and administrative expenses 4,831 4,743 2,928
Total share-based compensation expense 7,596$ 7,291$ 6,203$
The total tax benefit recognized in the Consolidated Statements of Income related to share-based compensation expense was $2.9 million,
$2.8 million and $2.4 million for 2014, 2013 and 2012, respectively. As a result of the special cash dividend payments to holders of
unvested restricted stock in December 2012, we recognized $0.6 million of additional share-based compensation expense in fiscal 2012.
9. Commitments and Contingencies
On July 24, 2013, the Securities and Exchange Commission (the SEC) informed us that it was conducting an investigation of the
Company and made a request for voluntary production of documents and information. The request is focused on our restatement of 2012
and prior financial statements and our 2013 change in auditors. We are cooperating fully with the SEC in this matter. We have recognized
$4.1 million and $1.9 million of expenses related to the SEC investigation during 2014 and 2013, net of expected insurance recoveries,
respectively. A protracted investigation could impose substantial costs and distractions, regardless of its outcome. There can be no
assurance that any final resolution of this investigation will not have a material and adverse effect on the Companys financial condition and
results of operations.
We are involved in various routine legal proceedings incidental to the conduct of our business. Management, based upon the advice of
outside legal counsel, does not believe that any of these legal proceedings will have a material adverse effect on our financial condition,
results of operations or cash flows.
10. Store Closing Charges
We close under-performing stores in the normal course of business. We closed three stores in 2014 and 2013 and five stores in 2012
incurring lease termination and severance costs. Lease termination costs are net of estimated sublease income that could reasonably be
obtained for the properties. During 2014, 2013 and 2012, we recorded net charges of $1.0 million, $0.1 million and $1.0 million,
respectively, for store closing charges, including adjustments to previously recorded store closing reserves for changes in estimated
sublease income. Store closing charges are included in SG&A in the Consolidated Statements of Income.
The following tables show the activity in the store closing reserve:
Lease- Severance
R
e
l
a
t
e
d
an
dOth
er
T
o
t
a
l
Balance at January 28, 2012 3,092$-$3,092$
Charges 782 271 1,053
Payments (1,781) (233) (2,014)
Balance at February 2, 2013 2,093 38 2,131
Charges (56) 161 105
Payments (2,002) (130) (2,132)
Balance at February 1, 2014 35 69 104
Charges 1,385 47 1,432
Payments (1,365) (64) (1,429)
Balance at January 31, 2015 55$52$107$
The store closing reserve at January 31, 2015, February 1, 2014 and February 2, 2013 includes a current portion (in accrued expenses
and other current liabilities) of $0.1 million, $0.1 million and $1.2 million, respectively, and a long-term portion (in other liabilities) of $0, $0
and $0.9 million, respectively.