XML 33 R10.htm IDEA: XBRL DOCUMENT

Income Taxes

12 Months Ended

Jan. 28, 2012

Income Taxes [Abstract]

Note 4 — Income Taxes

The Company’s income tax expense is computed based on the federal statutory rates and the state statutory rates, net of related federal benefit. Income tax expense consists of the following (in thousands):


		52 Weeks Ended
		January 28, 2012				January 29, 2011				January 30, 2010
Current
Federal		$	7,249			$	10,413			$	13,203
State			2,003				2,345				2,330
Deferred
Federal			2,772				2,547				2,227
State			(569	)			432				92
Change in valuation allowance			—				—				(5,437	)

		$	11,455			$	15,737			$	12,415

Income tax expense differs from the amount computed by applying the statutory federal income tax rate to pre-tax income. A reconciliation of income tax expense at the statutory federal income tax rate to the amount provided is as follows (in thousands):


		52 Weeks Ended
		January 28, 2012				January 29, 2011				January 30, 2010
Tax at federal statutory rate		$	10,699			$	14,760			$	16,445
State income taxes (net of federal benefit)			773				2,042				1,782
Change in valuation allowance			—				—				(5,437	)
Adjustment to prior year income tax provision			—				(1,025	)			—
Other			(17	)			(40	)			(375	)

Income tax expense		$	11,455			$	15,737			$	12,415

Income tax expense in fiscal 2010 included a benefit of $1.0 million related to an adjustment to the Company’s prior year income tax provision. This benefit was slightly offset by an adjustment of approximately $200,000 to the state tax rate applied to the Company’s deferred tax assets.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):


		January 28, 2012				January 29, 2011
Deferred tax assets:
Accruals		$	2,355			$	4,068
Inventory valuation			246				241
Deferred rent and other			6,664				5,666

Total deferred tax assets			9,265				9,975
Deferred tax liabilities:
Depreciation			(5,986	)			(4,636	)
Prepaid assets			(514	)			(371	)

Total deferred tax liabilities			(6,500	)			(5,007	)

Net deferred tax assets		$	2,765			$	4,968

Future utilization of the deferred tax assets is evaluated by the Company and any valuation allowance is adjusted accordingly. The Company had previously recorded a valuation allowance against its deferred tax assets associated with net operating losses in past fiscal years. As a result of an improvement in the Company’s operating performance, the Company was able to reverse $5.4 million of the valuation allowance during fiscal 2009. At January 29, 2011, there was no remaining valuation allowance against the Company’s deferred tax assets.

The Company and one or more of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by authorities for years prior to 2007. With few exceptions, the Company is no longer subject to state and local income tax examinations for years prior to 2005. The Company has no ongoing U.S. federal, state or local income tax examinations.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


		52 Weeks Ended
		January 28, 2012				January 29, 2011
		(In thousands)
Balance at the beginning of the year		$	712			$	639
Additions based on tax positions related to the current year			—				144
Additions for tax positions of prior years			—				—
Reductions for tax positions of prior years			—				—
Reductions due to settlements			—				—
Reductions due to lapse of the statute of limitations			—				(71	)

Balance at the end of the year		$	712			$	712

Included in the January 28, 2012 balance and January 29, 2011 balance is $538,000 of unrecognized tax benefits that, if recognized, would decrease the Company’s effective tax rate.

The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Company had $247,000 and $186,000 accrued for the payment of interest and penalties associated with unrecognized tax benefits at January 28, 2012 and January 29, 2011, respectively.