Supercuts 2010 Annual Report Download - page 52

Table of Contents
Goodwill Impairment
Goodwill impairment was as follows:
The Company recorded a $35.3 million goodwill impairment charge related to the Regis salon concept during fiscal year 2010. Due to the
current economic conditions, the estimated fair value of the Regis salon operations was less than the carrying value of this concept's net assets,
including goodwill. The $35.3 million impairment charge was the excess of the carrying value of goodwill over the implied fair value of
goodwill for the Regis salon operations.
The Company recorded a $41.7 million goodwill impairment charge related to the salon concepts in the United Kingdom during fiscal
year 2009. The recent performance challenges of the international salon operations indicated that the estimated fair value of the international
salon operations was less than the current carrying value of the reporting unit's net assets, including goodwill. There is no remaining goodwill
recorded within the salon concepts in the United Kingdom.
No impairment charges were recorded during fiscal years 2008.
Lease Termination Costs
Lease termination costs were as follows:
The fiscal year 2010 lease termination costs are associated with the Company's June 2009 plan to close underperforming United Kingdom
company-owned salons in fiscal year 2010. During fiscal year 2010 we closed 29 salons under the June 2009 plan.
The fiscal year 2009 lease termination costs are primarily associated with the Company's July 2008 plan to close underperforming
company-owned salons in fiscal year 2009. The planned closures in fiscal year 2009 included salons in North America and the United
Kingdom. During fiscal year 2009 we closed 64 salons under the July 2008 plan.
See further discussion within Note 11 of the Consolidated Financial Statements.
50
(Decrease) Increase Over
Prior Fiscal Year
Years Ended June 30, Goodwill
Impairment
Expense as %
of Consolidated
Revenues Dollar Percentage Basis Point(1)
(Dollars in thousands)
2010
$
35,277
1.5
%
$
(6,384
)
15.3
%
(20
)
2009
41,661
1.7
41,661
100.0
170
2008
—
—
(
23,000
)
(100.0
)
(100
)
(1) Represents the basis point change in goodwill impairment as a percent of consolidated revenues as compared to the
corresponding period of the prior fiscal year.
(Decrease) Increase Over
Prior Fiscal Year
Years Ended June 30,
Lease
Termination
Costs
Expense as %
of Consolidated
Revenues Dollar Percentage Basis Point(1)
(Dollars in thousands)
2010
$
2,145
0.1
%
$
(3,587
)
(62.6
)%
(10
)
2009
5,732
0.2
5,732
100.0
20
2008
—
—
—
—
—
(1) Represents the basis point change in lease termination costs as a percent of consolidated revenues as compared to the
corresponding periods of the prior fiscal year.