Sally Beauty Supply 2011 Annual Report Download - page 119

Download and view the complete annual report

Please find page 119 of the 2011 Sally Beauty Supply annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

Sally Beauty Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
Fiscal Years ended September 30, 2011, 2010 and 2009
The following table presents a summary of the activity for the Company’s stock option plans for the fiscal
year ended September 30, 2011:
Weighted
Average
Number of Weighted Remaining Aggregate
Outstanding Average Contractual Intrinsic
Options (in Exercise Term (in Value (in
Thousands) Price Years) Thousands)
Outstanding at September 30, 2010 ............. 12,738 $ 7.53 7.3 $ 46,789
Granted ............................... 3,009 11.39
Exercised .............................. (1,731) 6.32
Forfeited or expired ....................... (238) 8.68
Outstanding at September 30, 2011 ............. 13,778 $ 8.50 6.8 $111,571
Exercisable at September 30, 2011 .............. 6,999 $ 8.17 5.5 $ 59,026
The following table summarizes information about stock options under the Company’s option plans at
September 30, 2011:
Options Outstanding Options Exercisable
Weighted
Number Average Number
Outstanding at Remaining Weighted Exercisable at Weighted
September 30, Contractual Average September 30, Average
2011 (in Term (in Exercise 2011 (in Exercise
Range of Exercise Prices Thousands) Years) Price Thousands) Price
$2.00 - $5.24 ................ 2,623 6.2 $4.70 1,381 $4.22
$7.42 - $11.39 ............... 11,155 6.9 9.40 5,618 9.14
Total .................... 13,778 6.8 $8.50 6,999 $8.17
The Company uses the Black-Scholes option pricing model to value the Company’s stock options for each
stock option award. Using this option pricing model, the fair value of each stock option award is estimated
on the date of grant. The fair value of the Company’s stock option awards is expensed on a straight-line
basis over the vesting period (generally four years) of the stock options or to the date a participant
becomes eligible for retirement, if earlier.
The weighted average assumptions relating to the valuation of the Company’s stock options are as follows:
Year Ended
September 30,
2011 2010 2009
Expected lives (in years) ......................... 5.0 5.0 5.0
Expected volatility .............................. 59.0% 64.4% 47.9%
Risk-free interest rate ........................... 1.1% 2.4% 2.6%
Dividend yield ................................ 0.0% 0.0% 0.0%
The expected life of options represents the period of time that the options granted are expected to be
outstanding and is based on historical experience of employees of the Company who have been granted
F-19