Supercuts 2009 Annual Report Download - page 67

Table of Contents
Fiscal Year 2008
During fiscal year 2008, we refinanced our $350.0 million revolving credit facility. Among other changes, this amendment extended the
credit facility's expiration date to July 2012, reduced the interest rate on borrowings under the credit facility and modified certain financial
covenants. Additionally, we borrowed $125.0 million, and amended the fixed charge coverage ratio under our Private Shelf Agreement.
Under the terms of the July 12, 2007 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 1.50 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.
Other Financing Arrangements
Private Shelf Agreement
At June 30, 2009 and 2008, we had $239.6 and $255.2 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 November 2009 through December 2017.
The interest rates on the notes range from 4.65 to 8.39 percent as of June 30, 2009 and 2008. 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.
On July 3, 2009, the Company amended the Restated Private Shelf Agreement. The amendments included increasing the Company's
minimum net worth covenant from $675 million to $800 million, lowering the fixed charge coverage ratio requirement from 1.5x to 1.3x,
amending certain definitions, including EBITDA and Fixed Charges, limiting the Company's Restricted Payments to $20 million if the
Company's Leverage Ratio is greater than 2.0x and the addition of a risk based capital fee calculated on the daily average outstanding principal
amount equal to an annual rate of 1.0 percent that commences one year after the amendment date.
As a result of the fair value hedging activities discussed in Note 9 of Part II, Item 8 of this Form 10-K, an adjustment of approximately $0.0
and $0.3 million was made to increase the carrying value of the Company's long-term fixed rate debt at June 30, 2009 and 2008, respectively.
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