Supercuts 2002 Annual Report Download - page 170

The Company has a survivor benefit plan for the Chief Executive Officer's spouse, payable upon his death, at a rate of one half of his deferred
compensation benefit, adjusted for inflation, for the remaining life of his spouse. The Company has funded its future obligations under this plan
through company-owned life insurance policies on the Chief Executive Officer.
9. SHAREHOLDERS' EQUITY:
In addition to the shareholders' equity activity described in Note 8, the following activity has taken place:
Authorized Shares and Designation of Preferred Class:
The Company has 100 million shares of capital stock authorized, par value $.05, of which all outstanding shares, and shares available under the
Stock Option Plans, have been designated as common.
In addition, 250,000 shares of authorized capital stock have been designated as Series A Junior Participating Preferred Stock (preferred stock).
None of the preferred stock has been issued.
Shareholders' Rights Plan:
The Company has a shareholders' rights plan pursuant to which one preferred share purchase right is held by shareholders for each outstanding
share of common stock. The rights become exercisable only following the acquisition by a person or group, without the prior consent of the
Board of Directors, of 20 percent or more of the Company's voting stock, or following the announcement of a tender offer or exchange offer to
acquire an interest of 20 percent or more. If the rights become exercisable, they entitle all holders, except the takeover bidder, to purchase one
one-hundredth of a share of preferred stock at an exercise price of $120, subject to adjustment, or in lieu of purchasing the preferred stock, to
purchase for the same exercise price common stock of the Company (or in certain cases common stock of an acquiring company) having a
market value of twice the exercise price of a right.
Stock Repurchase Plan:
In May 2000, the Company's Board of Directors approved a stock repurchase program under which up to $50 million can be expended for the
repurchase of the Company's common stock. The timing and amounts of any repurchases will depend on many factors, including the market
price of the common stock and overall market conditions. During the years ended June 30, 2002 and 2000, 278,700 and 115,000 shares were
repurchased for $7.7 million and $1.4 million, respectively. No shares were repurchased during the fiscal year ended June 30, 2001. All
repurchased shares are immediately retired. This repurchase program has no stated expiration date.
10. SEGMENT INFORMATION:
The Company operates or franchises 6,618 domestic salons and 2,066 international salons. The Company executes its domestic operations
through five primary concepts: Regis Salons, MasterCuts, Trade Secret, SmartStyle and Strip Center (primarily Supercuts and Cost Cutters)
salons. Each of the concepts offers similar products and services, concentrates on the mass-market consumer marketplace and have consistent
distribution channels. All of the salons within the North American concepts are located within high traffic retail (destination) shopping
locations and the individual salons generally display similar economic characteristics. The Company's international operations, which are
primarily in Europe, are located in salons operating in malls, leading department stores, mass merchants and high-
street locations. Based on the
way in which the Company manages its business, it has presented its domestic and international operations as two reportable operating
segments, domestic and international.
The accounting policies of the reportable operating segments are the same as those described in Note 1 to the Consolidated Financial
Statements. The Company evaluates the performance of its concepts based on direct salon contribution, before supervision and corporate
overhead expenses. Intersegment sales and transfers are not significant.
Summarized financial information concerning the Company's reportable operating segments is shown in the following table as of June 30,
2002, 2001 and 2000:
*Includes franchise revenue less franchise direct costs.
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(Dollars in thousands) 2002 2001 2000
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Total revenues:
Domestic ........................... $1,335,111 $1,210,669 $1,034,425
International ...................... 119,080 100,952 108,568
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Total ............................ $1,454,191 $1,311,621 $1,142,993
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Salon contribution*:
Domestic ........................... $ 267,523 $ 244,171 $ 215,519
International ...................... 16,701 13,102 16,688
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Total ............................ $ 284,224 $ 257,273 $ 232,207
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