Supercuts 2006 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2006 Supercuts annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

self-insurance program and Department of Education requirements surrounding Title IV funding. Therefore, $60.6 million of our committed
line of credit under our revolving credit facility is restricted.
We are in compliance with all covenants and other requirements of our credit agreements and senior notes. Additionally, the credit
agreements do not include rating triggers or subjective clauses that would accelerate maturity dates.
As a part of our salon development program, we continue to negotiate and enter into leases and commitments for the acquisition of
equipment and leasehold improvements related to future salon locations, and continue to enter into transactions to acquire established hair care
salons and businesses.
We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured
finance or special purpose entities (SPEs), which would have been established for the purpose of facilitating off-balance sheet financial
arrangements or other contractually narrow or limited purposes at June 30, 2006. As such, we are not materially exposed to any financing,
liquidity, market or credit risk that could arise if we had engaged in such relationships.
Financing
Financing activities are discussed on pages 49-50 and in Note 4 to the Consolidated Financial Statements, and derivative activities are
discussed in Note 5 to the Consolidated Financial Statements and Item 7A, “Quantitative and Qualitative Disclosures about Market Risk.”
Management believes that cash generated from operations and amounts available under existing debt facilities will be sufficient to fund its
anticipated capital expenditures, acquisitions and required debt repayments for the foreseeable future. As of June 30, 2006, we have available
an unused committed line of credit amount of $226.4 million under our existing revolving credit facility. This amount excludes $60.6 million
related to standby letters of credit stemming from our self-insurance program and Department of Education requirements surrounding Title IV
funding.
Dividends
We paid dividends of $0.16 per share during fiscal years 2006 and 2005, and $0.14 per share during fiscal year 2004. On August 23, 2006,
the Board of Directors of the Company declared a $0.04 per share quarterly dividend payable September 20, 2006 to shareholders of record on
September 6, 2006.
Share Repurchase Program
In May 2000, our 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 our outstanding common 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, 2006, 2005 and 2004, a total
accumulated 3.0, 2.4 and 1.8 million shares have been repurchased for $96.8, $76.5 and $53.4 million, respectively. All repurchased shares are
immediately retired. This repurchase program has no stated expiration date and at June 30, 2006, $103.2 million remains to be repurchased
under this program.
57