Supercuts 2011 Annual Report Download - page 33

Table of Contents
by $1.7, $9.9, $6.9, and $10.0 million in fiscal years 2011, 2010, 2009, 2008, and 2007, respectively, as a result in the change in
estimate.
•
Expenses of $6.7, $6.4, $10.2, $6.1, and $5.1 million related to the impairment of property and equipment at underperforming
locations were recorded during fiscal years 2011, 2010, 2009, 2008, and 2007, respectively.
• Charges of $2.1 and $5.7 million were recorded in fiscal years 2010 and 2009, respectively associated with disposal charges and
lease termination fees related to the closure of salons other than in the normal course of business.
• During fiscal year 2011, the Company settled a legal claim with the former owner of Hair Club for $1.7 million. Fiscal year 2010
included a $5.2 million charge related to the settlement of two legal claims regarding certain customer and employee matters.
•
Operating loss from the 51 accredited cosmetology schools contributed to Empire Education Group, Inc. on August 1, 2007 was
$0.3 and $18.6 million in fiscal years 2008 and 2007, respectively. Operating income from the deconsolidated European franchise
salon operations was $5.1 and $7.5 million in fiscal years 2008 and 2007, respectively.
(c)
The following significant items affected (loss) income from continuing operations and (loss) income from continuing operations per
diluted share:
•
Upon the March 2011 acquisition of the approximately 17 percent additional ownership interest in Provalliance, the Company
recognized a net gain of approximately $2.4 million representing the settlement of a portion of the company's equity put liability
and additional ownership of the Frank Provost Group in Provalliance.
•
During fiscal year 2011, the Company recorded an $9.2 million other than temporary impairment on its investment in preferred
shares of Yamano and premium paid at the time of it initial investment in MY Style. Impairment charges of $25.7 and
$7.8 million associated with the Company's investment in Provalliance and for the full carrying value of our investment in and
loans to Intelligent Nutrients, LLC were recorded in fiscal year 2009.
•
Fiscal year 2010 includes interest expense of $18.0 million related to make
-
whole payments and other fees associated with the
repayment of private placement debt.
•
An income tax charge of approximately $3.8 million was recorded during fiscal year 2009 associated with an adjustment to
correct our prior year deferred income tax balances. An income tax charge of approximately $3.0 million of which $1.3 million
was recorded through income tax expense and $1.7 million was recorded through other comprehensive income during fiscal year
2008 was associated with repatriating approximately $30.0 million of cash previously considered to be indefinitely reinvested
outside of the United States.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of our
financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and
certain other factors that may affect our future results. Our MD&A is presented in five sections:
• Management's Overview
• Critical Accounting Policies
•
Overview of Fiscal Year 2011 Results
•
Results of Operations
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