The Company evaluates the recoverability of its long-lived assets whenever changes in circumstances or events may indicate that the carrying amounts may not be recoverable. An impairment loss is recognized in the event the net book value of the assets exceeds the future undiscounted cash flows attributable to such assets. Stock-Based Compensation — As permitted by SFAS No. 148, ‘‘Accounting for Stock-Based Compensa- tion — Transition and Disclosure,’’ the Company continues to measure compensation expense for its stock-based employee compensation plans using the intrinsic value method prescribed in Accounting Principles Board (‘‘APB’’) Opinion No. 25, ‘‘Accounting for Stock Issued to Employees,’’ whereby the options are granted at market price, and therefore no compensation costs are recognized, and the options are not recognized in the financial state- ments until they are exercised. However, the Company provides pro forma disclosures of net income (loss) and net income (loss) per share as if the fair-value method had been applied. The pro forma amounts that are disclosed in the table below reflect the portion of the estimated fair value of awards that was earned for the years ended March 31, 2003, 2002 and 2001. Because the pro forma expense determined under the fair value method relates only to stock options that were granted as of March 31, 2003, 2002 and 2001, the impact of applying the fair value method is not indicative of future amounts. Additional grants in future years are anticipated, which will increase the pro forma compensation expense and thus reduce and increase future pro forma net income (loss), respectively. Earnings Per Share — Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of Common Shares outstanding. Diluted earnings (loss) per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period. Securities or other contracts to issue common shares are included in the per share calculations where the effect of their inclusion would be dilutive. Comprehensive Income (Loss) — Comprehensive income (loss) is defined as Net Income (Loss) plus the aggregate change in Shareholders’ Equity, excluding changes in ownership interests, referred to as accumulated other comprehensive income (loss). At March 31, 2003 and 2002, ‘‘Accumulated other comprehensive loss,’’ included in Shareholders’ Equity, consisted of foreign currency translation losses of $4.2 million and $4.1 million, respectively, and unrealized gains on securities of zero and $0.9 million, respectively. Segment Reporting — Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and in assessing performance. The Company is a distributor and reseller of enterprise computer systems and related products, such as storage and software, and accordingly operates in one segment. Recent Accounting Standards — In October 2001, the Financial Accounting Standards Board (‘‘FASB’’) issued SFAS No. 144, ‘‘Accounting for the Impairment or Disposal of Long-Lived Assets.’’ This Statement supersedes SFAS No. 121, ‘‘Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of’’ and the accounting and reporting provisions of APB Opinion No. 30, ‘‘Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions’’ for the disposal of a segment of a business, as previously defined in that Opinion. Many of the provisions of SFAS No. 121 are retained, however, SFAS No. 144 clarifies 34 (In Thousands, Except Per Share Data) 2003 2002 2001 Net income (loss), as reported $(42,078) $ (7,047) $34,576 Compensation expense as determined under SFAS 123, net of related tax effects (3,365) (4,030) (3,994) Pro forma net income (loss) $(45,443) $(11,077) $30,582 Basic and Diluted, as reported $ (1.54) $ (0.26) $ 1.29 Basic and Diluted, pro forma $ (1.67) $ (0.41) $ 1.14 2003 2002 2001 Dividend yield 1.0% 1.0% 1.0% Expected volatility 48.4% 48.6% 45.7% Risk-free interest rate 3.81% 5.28% 4.80% Expected life 6 years 8 years 8 years Weighted average fair value of options granted $6.94 $7.04 $7.12 The fair market value of stock option grants is estimated using the Black-Scholes option-pricing model with the following assumptions: