"2010 was an extremely busy year in our corporate retail network," added Mr. Spilman. "The fact that we acquired 11 licensee stores, closed two existing locations, and opened two new facilities while operating our existing stores presented a tremendous challenge for our team. We were pleased with the 49% loss reduction in our comparable stores during the quarter. Performance at this level for the entire fleet is our goal and the fact that our 35 comparable stores achieved it during the quarter is encouraging and significant. 2011 will also be a challenge as we are currently closing four existing corporate stores and will certainly acquire additional stores over the course of the year. We are also seeking to expand our network with new stores in certain markets where we currently operate. Despite the upheaval that store acquisitions and closings have produced, our comp store operating performance improved again in 2010, giving us the confidence that our corporate store network will continue to contribute to the Company's improving operating performance."
Balance Sheet and Cash Flow
The Company generated $6.1 million of cash from operating activities during the fourth quarter of 2010, primarily due to improved collections from wholesale customers as order backlogs were reduced, tighter working capital management, and the receipt of a $1.7 million Federal income tax refund associated with a one-time carryback of net operating losses due to a change in tax law; the benefit from which was recognized in earnings during the fourth quarter of 2009. In addition to the $11.1 million of cash on-hand, the Company has investments of $15.1 million, primarily consisting of $14.3 million in cash, money market accounts, bond funds, and individual treasuries, and $0.8 million in a hedge fund. Although the $14.3 million is primarily cash and other liquid assets, the Company presents these as long-term assets as they are pledged as collateral for the revolving debt agreement.