ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2013

ACCOUNTING POLICIES

Schedule of fair value of financial instruments using levels of inputs

The fair value of these financial instruments was determined using the following levels of inputs as of March 31, 2013 (in thousands):

	Fair Value Measurements at March 31, 2013:
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - Money market mutual funds	$	56,070	$	56,070	$	—	$	—
Trading securities held in a “rabbi trust” (1)	200		200		—		—
Total assets	$	56,270	$	56,270	$	—	$	—
Liabilities:
Deferred compensation accrual “rabbi trust” (2)	$	255	$	255	$	—	$	—
Restructuring (3)	620		—		—		620
Total liabilities	$	875	$	255	$	—	$	620

The fair value of these financial instruments was determined using the following levels of inputs as of December 31, 2012 (in thousands):

	Fair Value Measurements at December 31, 2012:
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - Money market mutual funds	$	76,248	$	76,248	$	—	$	—
Trading securities held in a “rabbi trust” (1)	264		264		—		—
Total assets	$	76,512	$	76,512	$	—	$	—
Liabilities:
Deferred compensation accrual “rabbi trust” (2)	$	266	$	266	$	—	$	—
Restructuring (3)	65		—		—		65
Total liabilities	$	331	$	266	$	—	$	65

(1) — Trading securities held in a rabbi trust are included in Other current and long-term assets in the consolidated balance sheets

(2) — Non qualified deferred compensation in a rabbi trust is included in Accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

(3) — The fair value was determined based on the income approach, in which we used internal cash flow projections over the life of the underlying lease agreements discounted based on a credit adjusted risk-free rate of return. See the roll forward related to the restructuring accrual at Note 3—Restructuring Expense.

Schedule of estimated useful lives of the fixed assets

	Life (years)
Computer software	2-4
Computer hardware	3-4
Furniture and equipment	3-5

Schedule of depreciation and amortization expense which is classified within the corresponding operating expense categories on the consolidated statements of income

Depreciation and amortization expense is classified within the corresponding operating expense categories on the consolidated statements of income as follows (in thousands):

	Three months ended
	March 31,
	2013		2012
Cost of goods sold - direct	$	104	$	108
Technology	3,416		3,598
General and administrative	343		328
Total depreciation and amortization, including internal-use software and website development	$	3,863	$	4,034

Schedule of cost of goods sold, including product cost and other costs and fulfillment and related costs

Cost of goods sold, including product cost and other costs and fulfillment and related costs are as follows (in thousands):

	Three months ended  March 31,
	2013				2012
Total revenue, net	$	311,994	100	%	$	262,367	100	%
Cost of goods sold
Product costs and other cost of goods sold	239,197		77	%	201,793		77	%
Fulfillment and related costs	13,861		4	%	13,066		5	%
Total cost of goods sold	253,058		81	%	214,859		82	%
Gross profit	$	58,936	19	%	$	47,508	18	%

Schedule of computation of basic and diluted net income per common share

The following table sets forth the computation of basic and diluted net income per common share for the periods indicated (in thousands, except per share data):

	Three months ended  March 31,
	2013		2012
Net income attributable to common shares	$	7,697	$	2,719
Net income per common share—basic:
Net income attributable to common shares—basic	$	0.33	$	0.12
Weighted average common shares outstanding—basic	23,594		23,392
Effect of dilutive securities:
Stock options and restricted stock awards	422		22
Weighted average common shares outstanding—diluted	24,016		23,414
Net income attributable to common shares—diluted	$	0.32	$	0.12

Schedule of anti-dilutive securities excluded from the calculation of diluted shares outstanding

The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands):

	Three months ended March 31,
	2013	2012
Stock options and restricted stock units	575	1,375