administrative costs for fiscal 2011 and 2010 was $3.0 million and $2.9 million, respectively, of stock-based compensation expense. The increase in general and administrative costs was primarily
due to planned higher field supervision and support personnel, coupled with higher levels of recruiting and training costs related to our managers in training program, additional travel and lodging costs to support our new restaurant openings and
the impact of the 53rd week. As a percentage of revenues,
general and administrative expenses decreased to 6.4% for fiscal 2011 from 6.7% for the prior fiscal year. This percentage decrease was due to our ability to leverage the fixed component of these expenses over a higher revenue base.
Depreciation and Amortization. Depreciation and amortization increased by $5.2 million, or 18.0%, to $34.1 million during fiscal 2011 compared to
$28.9 million during fiscal 2010. Depreciation and amortization increased as a result of our construction costs for new restaurants and depreciation on our new operating toolsets, restaurant remodels and initiatives. As a percentage of revenues,
depreciation and amortization slightly decreased to 5.5% for fiscal 2011 from 5.6% for the prior fiscal year. This percentage decrease was principally a result of our ability to leverage the fixed component of these expenses as a result of higher
Restaurant Opening. Restaurant opening expenses increased by $1.8 million, or 34.8%, to $7.0 million during fiscal
2011 compared to $5.2 million during fiscal 2010. We opened 13 and 10 new restaurants during fiscal 2011 and 2010, respectively. Our opening costs will fluctuate from period to period, depending upon, but not limited to, the number of restaurant
openings, the size and concept of the restaurants being opened, the location of the restaurants and the complexity of the staff hiring and training process. See Business Restaurant Opening Expenses in Part I, Item 1 of this
Annual Report on Form 10-K.
Loss on Disposal of Assets. Loss on disposal of assets decreased by $0.1 million, or 10.7%, to $1.0
million during fiscal 2011 compared to $1.2 million during fiscal 2010. These costs were primarily related to the disposal of certain unproductive restaurant assets in connection with our ongoing productivity/efficiency initiatives and facility
image enhancement activities.
Legal Settlements. Legal settlements of approximately $2.0 million or 0.3% of revenues, during fiscal
2011 were primarily related to the proposed settlements of certain California employment practices lawsuits. We agreed to these settlements, which are subject to court approval, in order to avoid the costs, risks and uncertainties inherent in
litigation and to eliminate the further diversion of Company managements time and attention, and without admitting any liability on the part of the Company. See Part I Item 3 Legal Proceedings of this Form 10-K for
additional information regarding pending and recently settled legal proceedings.
Interest Income. Interest income increased by $0.1
million, or 87.9%, to $0.2 million during fiscal 2011 compared to $0.1 million during fiscal 2010. This increase was primarily due to slightly higher interest rates and investment balances compared to last year.
Interest Expense. Interest expense increased by $0.05 million, or 60.0%, to $0.1 million during fiscal 2011 compared to $0.09 million during
fiscal 2010. This increase was primarily due to higher fees related to our letters of credit as compared to last year.
Gain (Loss) on
Investment Settlement. Gain (loss) on investment settlement of approximately $0.6 million during fiscal 2011 relates to the settlement agreement reached in December 2009 with our former broker-dealer for the full liquidation of our auction rate
securities investment portfolio. Under the terms of the settlement agreement, we are entitled to potential future recoveries of our loss on that portfolio based on the performance of those auction rate securities through December 2012. In connection
with this settlement, during fiscal 2011 certain of these aforementioned securities were redeemed at par, resulting in additional cash recoveries.
Other Income, Net. Net other income consists primarily of gift card breakage income and remained stable at $0.6 million during fiscal 2011 compared to $0.6 million during fiscal 2010. Based on an
analysis of our gift card program since its inception, we determined that 24 months after issuance date, the likelihood of gift card redemption is remote.