ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2013 (in thousands):

	Fair Value Measurements at June 30, 2013:
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - Money market mutual funds	$	51,074	$	51,074	$	—	$	—
Trading securities held in a “rabbi trust” (1)	221		221		—		—
Total assets	$	51,295	$	51,295	$	—	$	—
Liabilities:
Deferred compensation accrual “rabbi trust” (2)	$	285	$	285	$	—	$	—
Restructuring (3)	581		—		—		581
Total liabilities	$	866	$	285	$	—	$	581

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				Six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Cost of goods sold - direct	$	101	$	120	$	205	$	228
Technology	3,242		3,600		6,658		7,199
General and administrative	320		342		663		669
Total depreciation and amortization, including internal-use software and website development	$	3,663	$	4,062	$	7,526	$	8,096

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  June 30,								Six months ended  June 30,
	2013				2012				2013				2012
Total revenue, net	$	293,204	100	%	$	239,536	100	%	$	605,198	100	%	$	501,903	100	%
Cost of goods sold
Product costs and other cost of goods sold	222,403		76	%	184,121		77	%	461,600		76	%	385,914		77	%
Fulfillment and related costs	12,962		4	%	12,246		5	%	26,823		4	%	25,312		5	%
Total cost of goods sold	235,365		80	%	196,367		82	%	488,423		81	%	411,226		82	%
Gross profit	$	57,839	20	%	$	43,169	18	%	$	116,775	19	%	$	90,677	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 June 30,				Six months ended June 30,
	2013		2012		2013		2012
Net income attributable to common shares	$	3,698	$	470	$	11,395	$	3,189
Net income per common share—basic:
Net income attributable to common shares—basic	$	0.16	$	0.02	$	0.48	$	0.14
Weighted average common shares outstanding—basic	23,714		23,437		23,654		23,382
Effect of dilutive securities:
Stock options and restricted stock awards	569		27		504		17
Weighted average common shares outstanding—diluted	24,283		23,464		24,158		23,399
Net income attributable to common shares—diluted	$	0.15	$	0.02	$	0.47	$	0.14

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 June 30,		Six months ended June 30,
	2013	2012	2013	2012
Stock options and restricted stock units	36	709	53	892