Supercuts 2005 Annual Report Download - page 46

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Total assets at June 30, 2005 and 2004 were as follows:
Acquisitions, including the acquisition of Hair Club for Men and Women in December 2004, were primarily funded by a combination of
operating cash flows, debt and the assumption of acquired liabilities.
Total shareholders’ equity at June 30, 2005 and 2004 was as follows:
During fiscal year 2005 and 2004, equity increased as a result of net income, increased accumulated other comprehensive income due to
foreign currency translation adjustments as the result of the strengthening of foreign currencies that underlie our investments in those markets,
and additional paid-in capital recorded in connection with the exercise of stock options and stock issued for business acquisitions, partially
offset by share repurchases under our stock repurchase program.
Cash Flows
Operating Activities
Cash flows from operating activities were a result of the following:
During fiscal year 2005, accounts payable and accrued expenses increased primarily due to an increase in inventory, as well as the timing
of advertising expenses and income tax payments. Inventories increased due to growth in the number of salons, as well as lower than expected
same-store product sales. The goodwill impairment charge resulted from a write-off related to the international salon segment. During fiscal
year 2004, deferred income taxes increased primarily due to differences in the book and tax treatment of depreciation and amortization
methodologies associated with property and equipment and goodwill.
45
Total
$ Increase Over
% Increase Over
June 30,
Assets
Prior Year
Prior Year
(Dollars in thousands)
2005
$
1,725,976
$
454,117
35.7
%
2004
1,271,859
158,904
14.3
Shareholders
’
$
Increase Over
% Increase Over
June 30,
Equity
Prior Year
Prior Year
(Dollars in thousands)
2005
$
754,712
$
72,692
10.7
%
2004
682,020
123,494
22.1
Operating Cash Flows
For the Years Ended June 30,
2005
2004
2003
(Dollars in thousands)
Net income
$
64,631
$
104,218
$
85,555
Depreciation and amortization
91,753
75,547
67,399
Goodwill impairment
38,319
—
—
Accounts payable and accrued expenses
31,626
(3,844
)
18,378
Tax benefit from employee stock plans
9,088
8,314
4,090
Inventories
(17,974
)
(462
)
(31,145
)
Deferred income taxes
(9,257
)
15,340
2,781
Other
7,545
6,551
4,061
$215,731
$
205,664
$
151,119