Supercuts 2011 Annual Report Download - page 63

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Table of Contents
ended June 30, 2009. The decrease in organic Hair Restoration Centers revenues during fiscal year 2009 was due to the decrease in same-store
sales of 0.8 percent.
Hair Restoration Center Operating Income. Operating income for our Hair Restoration Centers was as follows:
The basis point decrease in Hair Restoration Centers operating income as a percent of Hair Restoration Centers revenues during the twelve
months ended June 30, 2011 was primarily due to an increase in the cost of hair systems and expenses associated with a legal claim. Partially
offsetting the basis point decrease was a benefit related to a favorable ruling on a state sales tax issue.
The basis point decrease in Hair Restoration Centers operating income as a percent of Hair Restoration Centers revenues during the twelve
months ended June 30, 2010 was primarily due to an increase in advertising spend and the settlement of a vendor dispute totaling $0.6 million.
The basis point decrease in Hair Restoration Centers operating income as a percent of Hair Restoration Centers revenues during fiscal year
2009 was primarily due to lower operating margins on newly constructed and acquired centers and negative leverage in fixed cost categories due
to negative same-store sales.
Unallocated Corporate
Unallocated Corporate Operating Loss. Unallocated corporate operating expenses include salaries, stock-based compensation,
professional fees, rent, depreciation and other expenses that are not allocated. Unallocated corporate operating losses were as follows:
The increase in unallocated corporate operating loss during the twelve months ended June 30, 2011 as compared to the twelve months
ended June 30, 2010 was primarily due to the $31.2 million valuation reserve on the note receivable with the purchaser of Trade Secret,
incremental costs associated with the Company's senior management restructure, professional fees incurred related to the exploration of strategic
alternatives and information technology projects and legal claims expense.
The increase in unallocated corporate operating loss during the twelve months ended June 30, 2010 as compared to the twelve months
ended June 30, 2009 was primarily due to an increase in professional fees and distribution costs from an agreement with the purchaser of Trade
Secret.
61
Decrease Over Prior Fiscal Year
Years Ended June 30, Operating
Income
Operating Income
as % of
Total Revenues Dollar Percentage Basis Point(1)
(Dollars in thousands)
2011
$
18,230
12.5
%
$
(2,107
)
(10.4
)%
(180
)
2010
20,337
14.3
(3,534
)
(14.8
)
(270
)
2009
23,871
17.0
(4,310
)
(15.3
)
(380
)
(1) Represents the basis point change in Hair Restoration Centers operating income as a percent of total Hair Restoration
Centers revenues as compared to the corresponding period of the prior fiscal year.
Increase (Decrease)
Over Prior Fiscal Year
Operating
Loss
Years Ended June 30, Dollar Percentage
(Dollars in thousands)
2011
$
(187,703
)
$
37,950
25.3
%
2010
(149,753
)
4,808
3.3
2009
(144,945
)
(7,402
)
(4.9
)