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14. Change in Working Capital Items:
13 Weeks Ended 26 Weeks Ended -------------------------------------------------------- December 29, December 24, December 29, December 24, 2012 2011 2012 2011 --------------------------------------------------------Decrease (increase) in: Accounts receivable $ (496) $ (593) $ (834) $ (1,301) Inventories 3,088 2,986 (7,170) (7,825) Prepaid expenses 320 341 405 441Increase (decrease) in: Payables and accruals 9,046 4,650 8,523 4,986 Deferred revenue 448 679 404 646 Sales return provision 1,587 1,325 1,592 1,404 -------------------------------------------------------- $ 13,993 $ 9,388 $ 2,920 $ (1,649) -------------------------------------------------------- --------------------------------------------------------
15. Contingencies and Guarantees:
(a) Legal proceedings
In the course of its business, the Company from time to time becomes involved in various claims and legal proceedings. In the opinion of management, all such claims and suits are adequately covered by insurance, or if not so covered, the results are not expected to materially affect the Company's financial position.
(b) Guarantees
The Company has provided the following guarantees to third parties and no amounts have been accrued in the consolidated financial statements for these guarantees:
(i) In the ordinary course of business, the Company has agreed to indemnify its lenders under its credit facilities against certain costs or losses resulting from changes in laws and regulations or from a default in repaying a borrowing. These indemnifications extend for the term of the credit facilities and do not provide any limit on the maximum potential liability. Historically, the Company has not made any indemnification payments under such agreements. (ii) In the ordinary course of business, the Company has provided indemnification commitments to certain counterparties in matters such as real estate leasing transactions, director and officer indemnification agreements and certain purchases of non-inventory assets and services. These indemnification agreements generally require the Company to compensate the counterparties for costs or losses resulting from legal action brought against the counterparties related to the actions of the Company. The terms of these indemnification agreements will vary based on the contract and generally do not provide any limit on the maximum potential liability. (iii) The Company sublet one location during the first quarter of fiscal 2011 and provided the landlord with a guarantee in the event the sub-tenant defaults on its obligations under the lease. The guarantee terminates at the time of lease expiry, which is March 31, 2013, and the Company's maximum exposure is approximately $35.
16. Commitments:
(a) Operating leases:
The Company leases various store locations, a distribution warehouse and certain equipment under non-cancellable operating lease agreements. The leases are classified as operating leases since there is no transfer of risks and rewards inherent to ownership.
