Form 10-Q for the 1st Quarter Ended 01/20/12
Income tax (benefit) expense for the twelve weeks ended January 20, 2012 and January 21, 2011 was as follows:
The Company expects its effective tax rate for the 2012 fiscal year to be different from the federal statutory rate due to the state tax minimum liability, a net operating loss carryback and retroactive tax law changes as described below. We recorded a provision for income taxes in the amount of zero for the twelve week period ended January 20, 2012 related to federal and state taxes based on the Company’s expected annual effective tax rate. During the first quarter of fiscal 2011, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 was enacted into law, which allowed the Company to retroactively take additional bonus depreciation on qualified fixed asset purchases in the fourth quarter of fiscal 2010. During preparation of the 2010 tax returns, management elected to take the additional bonus depreciation, which resulted in reduction of the estimated fiscal 2010 income tax liability.
In addition, management expects fixed asset additions made in fiscal 2011 would also provide additional bonus depreciation that would result in a taxable loss for fiscal 2011. Management expects this tax loss will provide additional benefit through carry-back opportunity.
The net loss of $278 in the twelve weeks ended January 20, 2012 includes a non-taxable gain on life insurance policies in the amount of $56. The net income of $1,166 in the twelve weeks ended January 21, 2011 includes a non-taxable gain on life insurance policies in the amount of $396. Gains and losses on life insurance policies are dependent upon the performance of the underlying equities and future results may vary considerably.
Cash flows from operating activities for the twelve weeks ended:
Significant changes in working capital for the twelve weeks ended:
January 20, 2012 – Operating cash flow for the period ended January 20, 2012 was increased by a reduction in inventory of $1,148 and a reduction of accounts receivable of $687. Operating cash flow was reduced by an increase in prepaid expenses and other current assets of $665 and an increase in accrued payroll, advertising and other expenses of $653. During the twelve week period we funded $274 towards our defined benefit pension plan.
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