Supercuts 2005 Annual Report Download - page 52

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Share Repurchase Program
In May 2000, the Company’s Board of Directors (BOD) approved a stock repurchase program. Originally, the program allowed up to
$50.0 million to be expended for the Repurchase of the Company’s Stock. The BOD elected to increase this maximum to $100.0 million in
August 2003, and then to $200.0 million on May 3, 2005. The timing and amounts of any repurchases will depend on many factors, including
the market price of the common stock and overall market conditions. The repurchases to date have been made primarily to eliminate the
dilutive effect of shares issued in conjunction with acquisitions and stock option exercises. As of June 30, 2005, 2004 and 2003, a total
accumulated 2.4, 1.8 and 1.3 million shares have been repurchased for $76.5, $53.4 and $30.9 million, respectively. All repurchased shares are
immediately retired. This repurchase program has no stated expiration date and at June 30, 2005, $123.5 million remain to be repurchased
under this program.
Risk Factors
Impact of Acquisition and Real Estate Availablity
The key driver of our revenue and earnings growth is the number of salons we acquire or construct. While we believe that substantial
future acquisition and organic growth opportunities exist, any material decrease in the number of such opportunities would have an impact on
our revenue and earnings growth.
Impact of the Economic Environment
Changes to the United States, Canadian, United Kingdom and other European economies have an impact on our business. Visitation
patterns to our salons can be adversely impacted by changes in unemployment rates and discretionary income levels.
Impact of Key Relationships
We maintain key relationships with certain companies, including Wal-Mart. Termination of these relationships could have an adverse
impact on our ability to grow or future operating results.
Impact of Fashion
Changes in consumer tastes and fashion trends can have an impact on our financial performance.
Impact of Changes in Regulatory and Statutory Laws
With more than 10,000 locations and 55,000 employees world-wide, our financial results can be adversely impacted by regulatory or
statutory changes in laws.
Impact of Competition
Competition on a market-by-market basis remains strong. Therefore, our ability to raise prices in certain markets can be adversely
impacted by this competition.
Impact of Changes in Manufacturers
’ Choice of Distribution Channels
The retail products that we sell are licensed to be carried exclusively by professional salons. Should the various product manufacturers
decide to utilize other distribution channels, such as large discount retailers, it could negatively impact the revenue earned from product sales.
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