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In March 2005, the SEC issued Staff Accounting Bulletin (SAB) No.107 to provide supplemental guidance in adopting SFAS No.123 (revised 2004). The bulletin provides guidance in accounting for share-based transactions with non-employees, valuation methods, the classification of compensation expense, accounting for the income tax effects of share-based payments, and disclosures in Management’s Discussion and Analysis subsequent to the adoption of SFAS No. 123 (revised 2004). The company is evaluating this guidance in conjunction with the adoption of SFAS No. 123 (revised 2004) and does not expect the bulletin will have a material impact on the company’s results of operations or financial position.
SFAS No. 151, “Inventory Costs”
In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, “Inventory Costs”. The Statement requires abnormal amounts of inventory costs related to amounts of idle freight, handling costs and spoilage be recognized as current period expenses. The standard is effective for fiscal years beginning after June 15, 2005 with early application permitted. The Company’s policy has always been to handle inventory costs in a manner consistent with the provisions of this statement.
SFAS No. 154, “Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and FASB Statement No. 3”
In May 2005, the FASB issued Statement of Financial Accounting Standards No 154, “Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and FASB Statement No.3.” The pronouncement requires that all voluntary changes in accounting principle be reported by retrospectively applying the principle to all prior periods that are presented in the financial statements. The statement is effective for fiscal years beginning after December 15, 2005.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Company did not have significant overall currency exposure at October 28, 2005. The Company’s financial instruments consist of cash and cash equivalents and life insurance policies at October 28, 2005 and the carrying value of the Company’s financial instruments approximated their fair market values based on current market prices and rates. It is not the Company’s policy to enter into derivative financial instruments. The Company does not currently have any significant foreign currency exposure. The Company does not engage in buying or selling spot or futures commodity contracts. The Company’s investment portfolio is not subject to significant market risk or interest rate fluctuations.
Item 8. Consolidated Financial Statements and Supplementary Data
Unaudited Interim Financial Information (in thousands, except per share amounts)
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|
2005
|
|
|
|
| |
|
January 21
|
April 15
|
July 8
|
October 28
|
|
|
|
|
|
|
|
| |
|
(12 weeks) |
(12 weeks) |
(12 weeks) |
(16 weeks) |
| |
Net sales |
$ 33,591 |
$ 27,714 |
$ 27,656 |
$ 41,884 |
| |
Income (loss) before taxes |
(316) |
(1,049) |
66 |
(955) |
| |
Net income (loss) |
(196) |
(650) |
243 |
(340) |
| |
Basic earnings (loss) per share |
$ (0.02 ) |
$ (0.07) |
$ 0.03 |
$ (0.03) |
| |
|
|
| |
|
2004
|
|
|
|
| |
|
January 23
|
April 16
|
July 9
|
October 29
|
|
|
|
|
|
|
|
| |
|
(12 weeks) |
(12 weeks) |
(12 weeks) |
(16 weeks) |
| |
Net sales |
$ 35,322 |
$ 30,541 |
$ 29,756 |
$ 42,246 |
| |
Income (loss) before taxes |
(222 ) |
(336 ) |
(1,005 ) |
1,602 |
| |
Net income (loss) |
(138 ) |
(209 ) |
(623 ) |
994 |
| |
Basic earnings (loss) per share |
$ (0.01 ) |
$ (0.02 ) |
$ (0.06 ) |
$ 0.10 |
See Item 15(a) below and the index therein for a listing of the consolidated financial statements and supplementary data filed as a part of this report.
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