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Cash provided by financing activities for the year ended June 30, 2007 totaled $79.0 million, including advances of $59.8 million under the Company’s credit facility,
$12.8 million in additional long-term debt, a $3.3 million increase in short-term borrowings, $2.0 million in excess tax benefits from share-based payment arrangements,
and $1.1 million in proceeds from stock option exercises. Cash used in financing activities for the year ended June 30, 2006 totaled $7.1 million, including $6.5 million in
payments on short-term and long-term debt and $4.3 million in repayments under the Company’s credit facility, offset in part by $2.7 million in proceeds from stock
option exercises and $1 million of excess tax benefits from share-based payment arrangements.
Payments due by period for the Company’s contractual obligations at June 30, 2007 are as follows:
Total
Fiscal Year
2008
Payments Due by Period
Fiscal Years
2009 – 2011
Fiscal Years
2012 –2013 Thereafter
( in thousands)
Long-term debt obligations $17,416 $ 200 $17,216 $ — $ —
Operating lease obligations 23,620 2,962 8,750 4,215 7,693
Purchase obligations 3,717 3,717 — — —
Total obligations $44,515 $6,874 $25,968 $4,215 $7,693
On April 27, 2007, the Company entered into an agreement to lease approximately 600,000 square feet for distribution, warehousing and storage purposes in a
building located in Southaven, Mississippi. The lease also provides for a right of first refusal on an additional 147,000 square feet of expansion space. The lease provides
for market rental rates and commences upon substantial completion of construction, which is expected to be October 1, 2007, with a term of 120 months, and 2
consecutive 5-year extension options.
The Company anticipates capital expenditures of approximately $5.4 million in fiscal year 2008 for facility renovations, the purchase of software and equipment, and
for various other improvements and purchases. Contractual obligations, primarily related to the warehouse relocation project, amounted to approximately $3.7 million at
June 30, 2007.
On October 22, 2004, The American Jobs Creation Act of 2004 was enacted. This legislation provides a tax deduction of 85% of certain foreign dividends that are
repatriated by the Company. The Company did not distribute earnings from its foreign subsidiaries under this legislation.
At June 30, 2007, the Company has: (i) gross net operating loss carryforwards of approximately $278,000 for U.S. Federal income tax purposes that begin expiring in
2020; (ii) state income tax credit carryforwards of approximately $263,000 that begin expiring in 2019; (iii) net foreign operating loss carryforwards of approximately
$155,000 that begin expiring in 2008.
The Company believes that it has sufficient liquidity to meet its forecasted cash requirements for at least the next year.
Backlog
The Company does not consider backlogs to be material to its business. Nearly all orders are filled within 24 hours of receipt.
Accounting Standards Recently Issued
In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Corrections, which replaces APB Opinion No. 20, Accounting Changes and SFAS No. 3,
Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle.
SFAS No. 154 also provides guidance on the accounting for and reporting of error corrections. This statement is applicable for accounting changes and corrections of
errors made in fiscal years beginning after December 15, 2005 and was adopted by the Company in the first quarter of fiscal year 2007. Such adoption did not have a
material impact on the Company’s consolidated financial position, results of operations or cash flows.
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