| Year to date ended | ||||||||
| July 1, | July 2, | |||||||
| 2007 | 2006 | |||||||
Operating activities: |
||||||||
Net income |
$ | 6,944 | $ | 5,487 | ||||
Adjustments to reconcile net income to net cash
used in operating activities: |
||||||||
Depreciation and amortization |
776 | 952 | ||||||
(Gain) loss on disposal of fixed assets |
(6 | ) | 2 | |||||
Stock-based compensation |
2,723 | 1,859 | ||||||
Deferred income taxes |
(563 | ) | 2,009 | |||||
Tax benefit from exercise of stock options |
2,974 | 592 | ||||||
Excess tax benefit from exercise of stock options |
(320 | ) | (34 | ) | ||||
Changes in assets and liabilities: |
||||||||
Receivables, net |
62 | 1,056 | ||||||
Inventories |
(53 | ) | 553 | |||||
Prepaid federal income taxes |
(1,596 | ) | — | |||||
Other prepaid expenses and assets |
(246 | ) | 57 | |||||
Accounts payable |
(24,124 | ) | (22,475 | ) | ||||
Accrued liabilities |
(3,134 | ) | (1,919 | ) | ||||
Deferred rent |
(95 | ) | (118 | ) | ||||
Net cash used in operating activities |
(16,658 | ) | (11,979 | ) | ||||
Investing activities: |
||||||||
Purchases of property and equipment |
(2,066 | ) | (1,182 | ) | ||||
Proceeds from the sale of property and equipment |
8 | 1 | ||||||
Purchases of marketable securities |
(20,230 | ) | (25,195 | ) | ||||
Proceeds from the maturity of marketable securities |
40,000 | 53,000 | ||||||
Transfers of restricted cash |
120 | — | ||||||
Net cash provided by investing activities |
17,832 | 26,624 | ||||||
Financing activities: |
||||||||
Repurchase of common stock |
(13,532 | ) | (46,370 | ) | ||||
Proceeds from stock option exercises |
2,668 | 1,087 | ||||||
Excess tax benefit from exercise of stock options |
320 | 34 | ||||||
Net cash used in financing activities |
(10,544 | ) | (45,249 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents |
(5 | ) | — | |||||
Net decrease in cash and cash equivalents |
(9,375 | ) | (30,604 | ) | ||||
Cash and cash equivalents, beginning of period |
78,540 | 71,921 | ||||||
Cash and cash equivalents, end of period |
$ | 69,165 | $ | 41,317 | ||||