Sally Beauty Holdings, Inc. Announces Fiscal 2013 Third Quarter Results
-- Consolidated net sales of $912.1 million, up 2.8%
-- Same store sales growth of 0.7% vs. growth of 5.2% in 3Q12
-- Consolidated gross margin of 50.1%
-- 3Q13 net earnings of $72.5 million with earnings per share of $0.42,
growth of 13.5%
-- Repurchased $93.8 million, or 3.1 million shares of stock in 3Q13
DENTON, Texas--(BUSINESS WIRE)--
Sally Beauty Holdings, Inc. (NYSE: SBH) (the "Company") today announced
financial results for the fiscal 2013 third quarter. The Company will
hold a conference call today at 10:00 a.m. (Central) to discuss these
results and its business.
"Our fundamental business drivers are solid and we remain confident in
the long term health of our business," stated Gary Winterhalter,
Chairman, President and Chief Executive Officer. "During the third
quarter, customer traffic at our BSG and Sally International businesses
was healthy; however, store traffic from the non-Beauty Club Card
customer in the Sally U.S. business was soft. We've launched several
initiatives specifically to address this customer and remain optimistic
that traffic will recover over the next few months. On a consolidated
basis, we improved SG&A leverage by 50 basis points and grew earnings
per share by 13.5%. During the third quarter, we purchased $94 million
or 3.1 million shares of our stock. As of the end of June we had $559
million remaining on our current authorization."
FISCAL 2013 THIRD QUARTER FINANCIAL HIGHLIGHTS
Net Sales: For the fiscal 2013 third quarter, consolidated net
sales were $912.1 million, an increase of 2.8% from the fiscal 2012
third quarter. The fiscal 2013 third quarter sales increase is primarily
attributed to the addition of new stores, which contributed 150 bps of
sales growth. The impact from changes in foreign currency exchange rates
in the fiscal 2013 third quarter was not material. Consolidated same
store sales in the fiscal 2013 third quarter grew by 0.7% compared to
growth of 5.2% in the fiscal 2012 third quarter. Same store sales growth
was negatively impacted by lower non-Beauty Club Card traffic in the
Sally U.S. stores and difficult comparisons against strong growth in
certain product categories in the Sally U.S. business.
Gross Profit: Consolidated gross profit for the fiscal 2013 third
quarter was $457.1 million, an increase of 2.9% over gross profit of
$444.4 million for the fiscal 2012 third quarter. Gross profit as a
percentage of sales was 50.1%, flat when compared to the fiscal 2012
third quarter.
Selling, General and Administrative Expenses: For the fiscal 2013
third quarter, consolidated selling, general and administrative (SG&A)
expenses, including unallocated corporate expenses and share-based
compensation, were $295.7 million, or 32.4% of sales, a 50 basis point
improvement from the fiscal 2012 third quarter metric of 32.9% of sales
and total SG&A expenses of $291.5 million. Fiscal 2013 third quarter
SG&A expenses increased 1.4% or $4.2 million. This increase is primarily
due to expenses associated with the opening of new stores, the Sally
Beauty Supply point-of-sale system conversion and the implementation of
our International ERP system.
Note: SG&A expenses include unallocated corporate expenses, as detailed
in the Company's segment information on schedule B.
Interest Expense: Interest expense for the fiscal 2013 third
quarter was $27.0 million compared to the fiscal 2012 third quarter of
$26.9 million.
Provision for Income Taxes: Income taxes were $43.1 million for
the fiscal 2013 third quarter versus $40.1 million in the fiscal 2012
third quarter. The Company's effective tax rate in the fiscal 2013 third
quarter was 37.3% versus 36.6% in the fiscal 2012 third quarter.
Net Earnings and Diluted Net Earnings per Share (EPS): In the
fiscal 2013 third quarter, net earnings were $72.5 million, an increase
of 4.3% over fiscal 2012 third quarter GAAP net earnings of $69.5
million. Diluted earnings per share in the fiscal 2013 third quarter
were $0.42, growth of 13.5% when compared to GAAP diluted earnings per
share of $0.37 in the fiscal 2012 third quarter.
Adjusted (Non-GAAP) EBITDA(1): Adjusted
EBITDA for the fiscal 2013 third quarter was $164.6 million, an increase
of 5.7% from $155.7 million in the fiscal 2012 third quarter.
Financial Position, Capital Expenditures and Working Capital:
Cash and cash equivalents as of June 30, 2013, were $53.4 million. The
Company ended the fiscal 2013 third quarter with $75.5 million of loans
outstanding on its asset-based loan (ABL) revolving credit facility. The
Company's debt, excluding capital leases, totaled $1.69 billion as of
June 30, 2013.
On July 26, 2013, the Company, Sally Holdings and other parties to the
ABL facility entered into the Second Amendment to the ABL facility
which, among other things, increased the maximum availability to $500.0
million (subject to borrowing base limitations), reduced pricing,
relaxed the restrictions regarding the making of Restricted Payments,
extended the maturity to July 26, 2018 and improved certain other
covenant terms. The remaining terms of the amended ABL facility are
substantially the same as those of the ABL facility prior to the Second
Amendment.
For the first nine months of fiscal 2013, the Company's capital
expenditures totaled $64.6 million. Capital expenditures for the fiscal
year 2013 are projected to be in the range of $85 million to $90
million, excluding acquisitions.
Working capital (current assets less current liabilities) decreased
$183.1 million to $503.5 million at June 30, 2013 compared to $686.5
million at September 30, 2012. The ratio of current assets to current
liabilities was 1.99 to 1.00 at June 30, 2013 compared to 2.44 to 1.00
at September 30, 2012.
Inventory as of June 30, 2013 was $780.2 million, an increase of $61.2
million or growth of 8.5% from June 30, 2012 inventory. This increase is
primarily due to additional inventory from net new store openings and
new product offerings.
During the three months ended June 30, 2013, the Company repurchased
(and subsequently retired) a total of 3.1 million shares of its common
stock at an aggregate cost of $93.8 million. As of June 30, 2013, the
Company has approximately $559.2 million remaining under its $700
million authorization announced on March 5, 2013.
Business Segment Results:
Sally Beauty Supply
Fiscal 2013 Third Quarter Results for Sally Beauty Supply
-- Sales of $559.2 million, up 1.0% from $553.4 million in the fiscal 2012
third quarter. Sales growth is attributed to net new store openings and
strong performance in the international businesses and was partially
offset by a decline in same store sales in the U.S. business.
-- Same store sales declined by 0.8% compared to growth of 5.2% in the
fiscal 2012 third quarter. Same store sales performance in the fiscal
2013 third quarter was negatively impacted by lower traffic from the
U.S. non-Beauty Club Card customers compared to fiscal 2012 third
quarter and difficult comparisons against growth in certain categories
in the prior year.
-- Gross margin of 55.6% improved 20 basis points from 55.4% in the fiscal
2012 third quarter.
-- SG&A as a percent of sales was 32.7% compared to 32.7% in the year ago
quarter.
-- Segment earnings of $117.7 million, flat when compared to $117.6 million
in the fiscal 2012 third quarter.
-- Segment operating margins were 21.0% of sales, a decline of 30 basis
points from 21.3% in the fiscal 2012 third quarter.
-- Net store base increased by 121 over the fiscal 2012 third quarter for a
total store count of 3,379.
Sales growth in the fiscal 2013 third quarter is attributed to net new
store openings and strong sales growth in the international businesses
but was partially offset by a decline in U.S. same store sales. Same
store sales growth for the three months ended June 30, 2013 was
adversely impacted by lower non-Beauty Club Card traffic in the U.S. and
a difficult comparison against strong growth in certain product
categories (such as nail care and hair extensions) in the third quarter
of fiscal 2012. Gross profit margin expansion of 20 basis points
resulted from improvement in the international businesses and a shift in
product mix and low-cost sourcing initiatives. Segment operating
earnings and margin were negatively impacted by softer sales growth than
in the prior year quarter.
Beauty Systems Group
Fiscal 2013 Third Quarter Results for Beauty Systems Group
-- Sales of $353.0 million, up 5.8% from $333.6 million in the fiscal 2012
third quarter.
-- Same store sales growth of 4.6% versus growth of 5.3% in the fiscal 2012
third quarter.
-- Gross margin of 41.5%, a 10 basis point improvement from 41.4% in the
fiscal 2012 third quarter.
-- SG&A as a percent of sales was 24.8% compared to 25.4% in the prior year
quarter.
-- Segment earnings of $52.7 million, up 13.0% from $46.7 million in the
fiscal 2012 third quarter.
-- Segment operating margins increased by 90 basis points to 14.9% of sales
from 14.0% in the fiscal 2012 third quarter.
-- Net store count was 1,223, an increase of 47 stores over the fiscal 2012
third quarter.
-- Total BSG distributor sales consultants at the end of the fiscal 2013
third quarter were 995 versus 1,110 at the end of the fiscal 2012 third
quarter.
Sales growth in the fiscal 2013 third quarter was driven by same store
sales growth and net new stores. Segment operating earnings and margin
growth was primarily due to improvement in gross margin and SG&A
leverage.
On May 31, 2013, Beauty Systems Group purchased certain assets of
Essential Salon Products, Inc. for $15.7 million. This transaction
included the acquisition of twelve Essential Salon stores and store team
members, the addition of several direct sales consultants and exclusive
distribution rights to prominent professional hair care brands.
Essential Salon stores are located in Massachusetts, Rhode Island, Maine
and New Hampshire.
(1)A detailed table reconciling 2013 and 2012 GAAP net
earnings to adjusted net earnings, adjusted EPS and adjusted EBITDA is
included in Supplemental Schedule C.
Conference Call and Where You Can Find Additional Information
As previously announced, at approximately 10:00 a.m. (Central) today the
Company will hold a conference call and audio webcast to discuss its
financial results and its business. During the conference call, the
Company may discuss and answer one or more questions concerning business
and financial matters and trends affecting the Company. The Company's
responses to these questions, as well as other matters discussed during
the conference call, may contain or constitute material information that
has not been previously disclosed. Simultaneous to the conference call,
an audio webcast of the call will be available via a link on the
Company's website, investor.sallybeautyholdings.com.
The conference call can be accessed by dialing 800-288-8960
(International: 612-332-0107). The teleconference will be held in a
"listen-only" mode for all participants other than the Company's current
sell-side and buy-side investment professionals. If you are unable to
listen in this conference call, the replay will be available at about
12:00 p.m. (Central) August 1, 2013 through August 8, 2013 by dialing
1-800-475-6701 or if international dial 320-365-3844 and reference the
conference ID number 298475. Also, a website replay will be available on investor.sallybeautyholdings.com.
About Sally Beauty Holdings, Inc.
Sally Beauty Holdings, Inc. (NYSE: SBH) is an international specialty
retailer and distributor of professional beauty supplies with revenues
of $3.5 billion annually. Through the Sally Beauty Supply and Beauty
Systems Group businesses, the Company sells and distributes through
4,500 stores, including approximately 200 franchised units, throughout
the United States, the United Kingdom, Belgium, Chile, France, the
Netherlands, Canada, Puerto Rico, Mexico, Ireland, Spain and Germany.
Sally Beauty Supply stores offer more than 6,000 products for hair,
skin, and nails through professional lines such as Clairol, L'Oreal,
Wella and Conair, as well as an extensive selection of proprietary
merchandise. Beauty Systems Group stores, branded as CosmoProf or
Armstrong McCall stores, along with its outside sales consultants, sell
up to 9,800 professionally branded products including Paul Mitchell,
Wella, Sebastian, Goldwell, Joico, and Aquage which are targeted
exclusively for professional and salon use and resale to their
customers. For more information about Sally Beauty Holdings, Inc.,
please visit sallybeautyholdings.com.
Cautionary Notice Regarding Forward-Looking Statements
Statements in this news release and the schedules hereto which are not
purely historical facts or which depend upon future events may be
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Words such as "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "project," "target," "can,"
"could," "may," "should," "will," "would," or similar expressions may
also identify such forward-looking statements.
Readers are cautioned not to place undue reliance on forward-looking
statements as such statements speak only as of the date they were made.
Any forward-looking statements involve risks and uncertainties that
could cause actual events or results to differ materially from the
events or results described in the forward-looking statements,
including, but not limited to, risks and uncertainties related to: the
highly competitive nature of, and the increasing consolidation of, the
beauty products distribution industry; anticipating changes in consumer
preferences and buying trends and managing our product lines and
inventory; potential fluctuation in our same store sales and quarterly
financial performance; our dependence upon manufacturers who may be
unwilling or unable to continue to supply products to us; the
possibility of material interruptions in the supply of products by our
manufacturers; products sold by us being found to be defective in
labeling or content; compliance with laws and regulations or becoming
subject to additional or more stringent laws and regulations; product
diversion to mass retailers or other unauthorized resellers; the
operational and financial performance of our franchise-based business;
the success of our internet and catalogue-based businesses; successfully
identifying acquisition candidates and successfully completing desirable
acquisitions; integrating acquired businesses in the future; opening and
operating new stores profitably; the impact of the health of the economy
upon our business; the success of our cost control plans; protecting our
intellectual property rights, particularly our trademarks; conducting
business outside the United States; disruption in our information
technology systems; severe weather, natural disasters or acts of
violence or terrorism; the preparedness of our accounting and other
management systems to meet financial reporting and other requirements
and the upgrade of our financial reporting system; being a holding
company, with no operations of our own, and depending on our
subsidiaries for cash; our substantial indebtedness; the possibility
that we may incur substantial additional debt in the future;
restrictions and limitations in the agreements and instruments governing
our debt; generating the significant amount of cash needed to service
our debt and refinancing all or a portion of our indebtedness or
obtaining additional financing on favorable terms, if at all; changes in
interest rates increasing the cost of servicing our debt; the potential
impact on us if the financial institutions we deal with become impaired
and the costs and effects of litigation.
Additional factors that could cause actual events or results to differ
materially from the events or results described in the forward-looking
statements can be found in our most recent Annual Report on Form 10-K
for the year ended September 30, 2012, as filed with the Securities and
Exchange Commission. Consequently, all forward-looking statements in
this release are qualified by the factors, risks and uncertainties
contained therein. We assume no obligation to publicly update or revise
any forward-looking statements.
Note Concerning Non-GAAP Measurement Tools
We have provided detailed explanations of our non-GAAP financial
measures in our Form 8-K filed this morning, which is available on our
website.
Supplemental Schedules
-------------------------------------------------
Consolidated Statement of Earnings A
Segment Information B
Non-GAAP Financial Measures Reconciliations C
Store Count and Same Store Sales D
Selected Financial Data and Debt E
Supplemental Schedule A
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
---------------------------------- ---------------------------------------
2013 2012 % CHG 2013 2012 % CHG
- - - - - - - - ----------- - ----------- - ------ - ------------- - ------------- - -------
Net
sales $ 912,101$ 886,991 2.8 % $ 2,715,781$ 2,641,087 2.8 %
Cost of
products sold
and
distribution
expenses 455,018 442,612 2.8 % 1,369,876 1,338,065 2.4 %
------------- - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Gross profit 457,083 444,379 2.9 % 1,345,905 1,303,022 3.3 %
Selling,
general and
administrative
expenses (1) 295,719 291,533 1.4 % 900,778 873,736 3.1 %
Depreciation
and
amortization 18,798 16,299 15.3 % 52,853 47,792 10.6 %
------------- - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Operating
earnings 142,566 136,547 4.4 % 392,274 381,494 2.8 %
Interest
expense (2) 27,006 26,925 0.3 % 80,510 113,240 -28.9 %
------------- - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Earnings
before
provision for
income taxes 115,560 109,622 5.4 % 311,764 268,254 16.2 %
Provision for
income taxes 43,094 40,135 7.4 % 115,426 100,820 14.5 %
------------- - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Net earnings $ 72,466$ 69,487 4.3 % $ 196,338$ 167,434 17.3 %
------------- - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Earnings per
share:
Basic $ 0.43$ 0.38 13.2 % $ 1.13$ 0.91 24.2 %
Diluted $ 0.42$ 0.37 13.5 % $ 1.10$ 0.88 25.0 %
Weighted
average
shares:
Basic 168,725 182,756 173,528 184,598
Diluted 173,762 188,496 178,278 189,901
------------- - - ------- - - - ------- - - ------ - - --------- - - - --------- - - -------
Basis Basis
Pt Pt
Chg Chg
Comparison as
a % of Net
sales
Sally Beauty
Supply
Segment Gross
Profit Margin 55.6 % 55.4 % 20 54.8 % 54.5 % 30
BSG Segment
Gross Profit
Margin 41.5 % 41.4 % 10 41.1 % 40.9 % 20
Consolidated
Gross Profit
Margin 50.1 % 50.1 % 0 49.6 % 49.3 % 30
Selling,
general and
administrative
expenses 32.4 % 32.9 % (50 ) 33.2 % 33.1 % 10
Consolidated
Operating
Profit Margin 15.6 % 15.4 % 20 14.4 % 14.4 % 0
Net Earnings
Margin 7.9 % 7.8 % 10 7.2 % 6.3 % 90
Effective Tax
Rate 37.3 % 36.6 % 70 37.0 % 37.6 % (60 )
- - - - - - - - ----------- - ----------- - ------ - ------------- - ------------- - -------
(1) Selling, general and administrative expenses include share-based
compensation of $3.2 million and $2.8 million for the three months ended
June 30, 2013 and 2012; and $15.5 million and $13.8 million for the nine
months ended June 30, 2013 and 2012, respectively.
(2) For the three and nine months ended June 30, 2012, interest expense
includes $3.2 million in unamortized deferred financing costs expensed in
connection with the Company's repayment in full of a senior term loan. For
the nine months ended June 30, 2012, interest expense also includes a loss
on extinguishment of debt of $34.6 million in connection with the
Company's redemption of outstanding notes with the proceeds of the
Company's senior notes due 2019.
Supplemental Schedule B
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
---------------------------------- ---------------------------------------
2013 2012 % CHG 2013 2012 % CHG
------------------------------------------ - ----------- - ----------- - ------ - ------------- - ------------- - -------
Net sales:
Sally Beauty Supply $ 559,150$ 553,419 1.0 % $ 1,673,942$ 1,643,749 1.8 %
Beauty Systems Group 352,951 333,572 5.8 % 1,041,839 997,338 4.5 %
------------------------------------------ - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Total net sales $ 912,101$ 886,991 2.8 % $ 2,715,781$ 2,641,087 2.8 %
------------------------------------------ - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Operating earnings:
Sally Beauty Supply $ 117,672$ 117,622 0.0 % $ 329,715$ 330,023 -0.1 %
Beauty Systems Group 52,734 46,667 13.0 % 151,307 135,590 11.6 %
------------------------------------------ - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Segment operating earnings $ 170,406$ 164,289 3.7 % $ 481,022$ 465,613 3.3 %
------------------------------------------ - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Unallocated corporate expenses (1) (24,650 ) (24,917 ) -1.1 % (73,245 ) (70,318 ) 4.2 %
Share-based compensation (3,190 ) (2,825 ) 12.9 % (15,503 ) (13,801 ) 12.3 %
Interest expense(2) (27,006 ) (26,925 ) 0.3 % (80,510 ) (113,240 ) -28.9 %
------------------------------------------ - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Earnings before provision for income taxes $ 115,560$ 109,622 5.4 % $ 311,764$ 268,254 16.2 %
------------------------------------------ - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
Segment operating profit margin: Basis Basis
Pt Chg Pt Chg
Sally Beauty Supply 21.0 % 21.3 % (30 ) 19.7 % 20.1 % (40 )
Beauty Systems Group 14.9 % 14.0 % 90 14.5 % 13.6 % 90
Consolidated operating profit margin 15.6 % 15.4 % 20 14.4 % 14.4 % 0
------------------------------------------ - - ------- - - - ------- - - ---- - - - --------- - - - --------- - - ----- -
(1) Unallocated expenses consist of corporate and shared costs.
(2) For the three and nine months ended June 30, 2012, interest expense
includes $3.2 million in unamortized deferred financing costs expensed in
connection with the Company's repayment in full of a senior term loan. For
the nine months ended June 30, 2012, interest expense also includes a loss
on extinguishment of debt of $34.6 million in connection with the
Company's redemption of outstanding notes with the proceeds of the
Company's senior notes due 2019.
Supplemental Schedule C
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures Reconciliations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------------------- ---------------------------------
2013 2012 % CHG 2013 2012 % CHG
--------------------------------------------------------------- - --------- - ----------- - ------ - --------- - ----------- - -------
Adjusted EBITDA:
Net earnings (per GAAP) $ 72,466$ 69,487 4.3 % $ 196,338$ 167,434 17.3 %
Add:
Depreciation and amortization 18,798 16,299 15.3 % 52,853 47,792 10.6 %
Share-based compensation (1) 3,190 2,825 12.9 % 15,503 13,801 12.3 %
Interest expense (2)(3) 27,006 26,925 0.3 % 80,510 113,240 -28.9 %
Provision for income taxes 43,094 40,135 7.4 % 115,426 100,820 14.5 %
--------------------------------------------------------------- - - ------- - - ------- - - ---- - - - ------- - - ------- - - ----- -
Adjusted EBITDA (Non-GAAP) $ 164,554$ 155,671 5.7 % $ 460,630$ 443,087 4.0 %
--------------------------------------------------------------- - - ------- - - ------- - - ---- - - - ------- - - ------- - - ----- -
Net earnings (per GAAP) $ 72,466$ 69,487$ 196,338$ 167,434
Add (Less):
Loss on extinguishment of debt (2) - 3,231 - 37,789
Interest expense on redeemed debt (3) - - - 5,149
Amortization of deferred financing costs - - - 229
Tax provision for the adjustments to net earnings (4) - (1,163 ) - (15,540 )
--------------------------------------------------------------- - - ------- - - ------- - - ------ - - ------- - - ------- - - -------
Adjusted net earnings, excluding non-recurring items (Non-GAAP) $ 72,466$ 71,555 1.3 % $ 196,338$ 195,061 0.7 %
--------------------------------------------------------------- - - ------- - - ------- - - ---- - - - ------- - - ------- - - ----- -
Adjusted earnings per share (Non-GAAP):
Basic $ 0.43$ 0.39 10.3 % $ 1.13$ 1.06 6.6 %
Diluted $ 0.42$ 0.38 10.5 % $ 1.10$ 1.03 6.8 %
Weighted average shares:
Basic 168,725 182,756 173,528 184,598
Diluted 173,762 188,496 178,278 189,901
(1) Share-based compensation for the nine months ended June 30, 2013 and 2012
includes $5.9 million and $5.3 million, respectively, of accelerated
expense related to certain retirement-eligible employees who are eligible
to continue vesting awards upon retirement.
(2) For the three and nine months ended June 30, 2012, interest expense
includes $3.2 million in unamortized deferred financing costs expensed in
connection with the Company's repayment in full of a senior term loan. For
the nine months ended June 30, 2012, interest expense also includes a loss
on extinguishment of debt of $34.6 million in connection with the
Company's redemption of outstanding notes with the proceeds of the
Company's senior notes due 2019.
(3) For the nine months ended June 30, 2012, interest expense includes
interest on certain notes after November 8, 2011 and until their December
2011 redemption of $5.1 million, as well as interest on the Company's
senior notes due 2019 issued on that date. This pro-forma adjustment
assumes that the redemption of such notes occurred on November 8, 2011.
(4) The tax provision for the adjustments to net earnings were calculated
using an estimated effective tax rate of 36.0%.
Supplemental
Schedule D
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Store Count and Same Store Sales
(Unaudited)
As of June
30,
------------- - ------------
2013 2012 CHG
----- - ----- - ------------
Number of retail stores (end of period):
Sally Beauty Supply:
Company-operated stores 3,358 3,234 124
Franchise stores 21 24 (3)
----- ----- ------------
Total Sally Beauty Supply 3,379 3,258 121
Beauty Systems Group:
Company-operated stores 1,063 1,017 46
Franchise stores 160 159 1
----- ----- ------------
Total Beauty System Group 1,223 1,176 47
----- ----- ------------
Total 4,602 4,434 168
----- ----- ------------
BSG distributor sales consultants (end of period) (1) 995 1,110 (115)
-------------------------------------------------------------------------------- - ----- - ----- - ------------
2013 2012
----- - -----
Third quarter company-operated same store sales growth (decline) (2) Basis Pt Chg
Sally Beauty Supply -0.8% 5.2% (600)
Beauty Systems Group 4.6% 5.3% (70)
Consolidated 0.7% 5.2% (450)
Nine months ended June 30 company-operated same store sales growth (decline) (2) Basis Pt Chg
Sally Beauty Supply -0.3% 7.5% (780)
Beauty Systems Group 3.8% 6.3% (250)
Consolidated 0.9% 7.1% (620)
(1) Includes 329 and 403 distributor sales consultants as reported by our
franchisees at June 30, 2013 and 2012, respectively.
(2) For the purpose of calculating our same store sales metrics, we compare
the current period sales for stores open for 14 months or longer as of the
last day of a month with the sales for these stores for the comparable
period in the prior fiscal year. Our same store sales are calculated in
constant U.S. dollars and include internet-based sales and the effect of
store expansions, if applicable, but do not generally include the sales of
stores relocated until 14 months after the relocation. The sales of stores
acquired are excluded from our same store sales calculation until 14
months after the acquisition.
Supplemental Schedule E
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Selected Financial Data and Debt
(In thousands)
(Unaudited)
June 30, 2013 September 30,
2012
------------- -------------
Financial condition information (at period end):
Working capital $ 503,455$ 686,519
Cash and cash equivalents 53,444 240,220
Property and equipment, net 222,355 202,661
Total assets 1,925,847 2,065,800
Total debt, including capital leases 1,690,761 1,617,230
Total stockholders' (deficit) equity ($294,383 ) ($115,085 )
------------------------------------------------------- - ------------- - -------------
As of
June 30, 2013 Interest
Rates
------------- -------------
Debt position excluding capital leases (at period end):
(i) Prime +
1.25-1.75% or
(ii) LIBOR +
Revolving ABL facility $ 75,500 2.25-2.75%
Senior notes due 2019 750,000 6.875%
Senior notes due 2022 (1) 858,613 5.750%
Other (2) 4.93% to
1,627 5.79%
- --------- -
Total debt $ 1,685,740
- --------- -
------------------------------------------------------- - ------------- - -------------
Debt maturities, excluding capital leases
Twelve months ending June 30,
2014 $ 76,734
2015 393
2016-2019 -
Thereafter (1) 1,608,613
- --------- -
Total debt $ 1,685,740
- --------- -
(1) Amount, at June 30, 2013, includes unamortized premium of $8.6 million
related to notes in an aggregate principal amount of $150.0 million issued
in September 2012. The 5.75% interest rate relates to notes in an
aggregate principal amount of $850.0 million.
(2) Represents pre-acquisition debt of businesses acquired.
Source: Sally Beauty Holdings, Inc.
