Supercuts 2008 Annual Report Download - page 59

includes rent and interest expenses) may not drop below 1.50 on a rolling four quarter basis. We were in compliance with all covenants and other
requirements of our credit agreement and senior notes as of June 30, 2008. Additionally, the credit agreements do not include rating triggers or
subjective clauses that would accelerate maturity dates.
Fiscal Year 2007
During fiscal year 2007, we neither entered into new borrowing arrangements, nor were any significant amendments made to existing
agreements. Under the terms of the April 7, 2005 amended and restated revolving credit agreement, our ratio of earnings before interest, taxes,
depreciation, amortization and rent expense (EBITDAR) to fixed charges (which includes rent and interest expenses) may not drop below 1.65
on a rolling four quarter basis. We were in compliance with all covenants and other requirements of our credit agreements and senior notes
during fiscal year 2007.
Fiscal Year 2006
During fiscal year 2006, we neither entered into new borrowing arrangements, nor were any significant amendments made to existing
agreements. Under the terms of the April 7, 2005 amended and restated revolving credit agreement, our ratio of earnings before interest, taxes,
depreciation, amortization and rent expense (EBITDAR) to fixed charges (which includes rent and interest expense) may not drop below 1.65 on
a rolling four quarter basis. We were in compliance with all covenants and other requirements of our credit agreements and senior notes during
fiscal year 2006.
Other Financing Arrangements
Private Shelf Agreement
At June 30, 2008 and 2007, we had $255.2 and $189.7 million, respectively, in unsecured, fixed rate, senior term notes outstanding under a
Private Shelf Agreement. The notes require quarterly payments, and final maturity dates range from July 2008 through December 2017. The
interest rates on the notes range from 4.65 to 8.39 percent as of June 30, 2008 and 2007. In fiscal 2008, we borrowed $125.0 million, and
amended the fixed charge coverage ratio under Private Shelf Agreement.
The Private Shelf Agreement includes financial covenants including debt to earnings before interest, taxes, depreciation and amortization
(EBITDA) ratios, fixed charge coverage ratios and minimum net equity tests (as defined within the Private Shelf Agreement), as well as other
customary terms and conditions. The maturity date for the debt may be accelerated upon the occurrence of various Events of Default, including
breaches of the agreement, certain cross-default situations, certain bankruptcy related situations, and other customary events of default.
As a result of the fair value hedging activities discussed in Note 5 of Part II, Item 8 of this Form 10-K, an adjustment of approximately $0.3
and $0.9 million was made to increase the carrying value of the Company's long-term fixed rate debt at June 30, 2008 and 2007, respectively.
Acquisitions
Acquisitions are discussed throughout Management's Discussion and Analysis in this Item 7, as well as in Note 3 to the Consolidated
Financial Statements in Part II, Item 8 of this Form 10-K. The most significant of these acquisitions relates to the purchase of the hair restoration
centers; refer to Note 3 of the Consolidated Financial Statements for related pro forma information. The remainder of the acquisitions,
individually and in the aggregate, was not material to our operations. The acquisitions were funded primarily from operating cash flow, debt and
the issuance of common stock.
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