Supercuts 2009 Annual Report Download - page 49

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Table of Contents
General and Administrative
General and administrative (G&A) includes costs associated with our field supervision, salon training and promotions, product distribution
centers and corporate offices (such as salaries and professional fees), including costs incurred to support franchise and hair restoration center
operations. G&A expenses were as follows:
(1)
Increase (Decrease) Over
Prior Fiscal Year
Years Ended June 30,
G&A
Expense as %
of Consolidated
Revenues
Dollar
Percentage
Basis Point(1)
(Dollars in thousands)
2009
$
291,661
12.0
%
$
(29,902
)
(9.3
)%
(100
)
2008
321,563
13.0
3,840
1.2
(40
)
2007
317,723
13.4
32,729
11.5
30
Represents the basis point change in G&A as a percent of consolidated revenues as compared to the corresponding period of the prior
fiscal year.
The basis point improvement in G&A costs as a percentage of consolidated revenues during fiscal year 2009 was primarily due to cost
savings initiatives implemented by the Company during the first half of fiscal year 2009 including the reduction of field supervisory staff and the
reduction of the fiscal year 2009 marketing budget. The basis point improvement was also related to the deconsolidation of the European
franchise salon operations.
The basis point improvement in G&A costs as a percentage of consolidated revenues during fiscal year 2008 was primarily due to the
deconsolidation of the European franchise salon operations and accredited cosmetology schools.
The planned basis point increase in G&A costs as a percent of consolidated revenues during fiscal year 2007 was primarily due to increases
in salon supervisor salaries, benefits, travel expenses, professional fees and the timing of promotional salon and hair restoration advertising.
Rent
Rent expense, which includes base and percentage rent, common area maintenance and real estate taxes, was as follows:
(1)
Increase (Decrease) Over
Prior Fiscal Year
Years Ended June 30,
Rent
Expense as %
of Consolidated
Revenues
Dollar
Percentage
Basis Point(1)
(Dollars in thousands)
2009
$
347,792
14.3
%
$
(13,684
)
(3.8
)%
(30
)
2008
361,476
14.6
19,654
5.7
20
2007
341,822
14.4
31,048
10.0
10
Represents the basis point change in rent expense as a percent of consolidated revenues as compared to the corresponding period of the
prior fiscal year.
The basis point improvement in rent expense as a percent of consolidated revenues during fiscal year 2009 was primarily due to the
reclassification of rubbish removal and utilities that we pay our landlords as part of our operating lease agreements to site operating expense
from rent expense. Partially offsetting the basis point improvement was negative leverage in this fixed cost category due to negative same-store
sales.
47