- Consolidated net sales of $998.0
million, up 3.5%
- 1Q16 same store sales growth of 3.9%
versus 2.3% in 1Q15
- Consolidated gross margin expansion of
40 basis points
- 1Q16 GAAP net earnings of $42.2 million
with diluted earnings per share of $0.28
- 1Q16 Adjusted net earnings of $65.1
million with diluted earnings per share of $0.43
- Repurchased $62.4 million, or 2.4
million shares, of common stock
Sally Beauty Holdings, Inc. (NYSE: SBH) (the “Company”) today
announced financial results for the fiscal 2016 first quarter. The
Company will hold a conference call today at 10:00 a.m. (Central)
to discuss these results and its business.
“We are off to a solid start for fiscal year 2016,” stated Chris
Brickman, President and CEO. “We drove same store sales improvement
in our Sally business, and our BSG business continued to grow sales
and gain channel share. In addition, implementation of our pricing
and margin improvement initiatives resulted in gross profit margin
expansion consistent with our previously stated guidance.
“Looking forward, we are confident that we can deliver on our
full year guidance. However, we anticipate the business may
confront modest headwinds in Q2 as we launch our hair care
solutions center in almost 3,000 Sally U.S. stores, invest in a
significant TV campaign to re-engage retail consumers at Sally and
ramp up new business development programs globally. Despite these
short term challenges, we are excited about the upcoming
initiatives and believe that they will help us accelerate growth in
our Sally business and deliver on our full-year earnings
objectives."
FISCAL 2016 FIRST QUARTER FINANCIAL HIGHLIGHTS
Net Sales: For the fiscal 2016 first quarter,
consolidated net sales were $998.0 million, an increase of 3.5%
from the fiscal 2015 first quarter. The sales increase in our
fiscal 2016 first quarter is attributable to same store sales
growth and incremental sales from our new stores. The unfavorable
impact from changes in foreign currency exchange rates in the
fiscal 2016 first quarter was $22.1 million, or 2.3% of sales.
Consolidated same store sales growth in the fiscal 2016 first
quarter was 3.9%.
Gross Profit: Consolidated gross profit for the fiscal
2016 first quarter was $494.0 million, an increase of 4.3% over
gross profit of $473.8 million for the fiscal 2015 first quarter.
Gross profit as a percentage of sales was 49.5%, a 40 basis point
improvement from the fiscal 2015 first quarter.
GAAP and Adjusted Selling, General and Administrative
Expenses: For the fiscal 2016 first quarter, consolidated GAAP
selling, general and administrative (SG&A) expenses, including
unallocated corporate expenses and share-based compensation, were
$339.7 million, or 34.0% of sales, a 90 basis point improvement
from the fiscal 2015 first quarter metric of 34.9% of sales and
total SG&A expenses of $337.0 million. Excluding expenses
associated with the previously disclosed data security incidents of
$0.5 million and management transition expenses of $0.9 million,
pre-tax, adjusted SG&A expenses in the fiscal 2016 first
quarter were $338.4 million, or 33.9% of sales.
Note: SG&A expenses include unallocated corporate expenses,
as detailed in the Company’s segment information on schedule B.
GAAP Interest Expense: GAAP interest expense for the
fiscal 2016 first quarter was $63.9 million, up $34.7 million from
the fiscal 2015 first quarter. This increase is due to the loss on
the extinguishment of debt of $33.3 million, pre-tax, in connection
with the Company’s December 2015 redemption in full of its $750
million of 6.875% senior notes due 2019 and overlapping interest
expense on such senior notes of $2.1 million, pre-tax. On December
3, 2015, the Company completed the issuance and sale of $750
million of 5.625% senior notes due 2025.
Provision for GAAP Income Taxes: GAAP income taxes were
$24.7 million for the fiscal 2016 first quarter versus $32.1
million in the fiscal 2015 first quarter. The Company’s effective
tax rate in the fiscal 2016 first quarter was 36.9%, flat when
compared to the effective tax rate in the fiscal 2015 first
quarter.
In fiscal year 2016, the Company’s effective tax rate is
expected to be in the previously stated range of 37.5% to
38.5%.
GAAP and Adjusted Net Earnings and Diluted Net Earnings Per
Share (EPS) (1): GAAP net earnings were $42.2
million in the fiscal 2016 first quarter, compared to fiscal 2015
first quarter GAAP net earnings of $54.9 million, down 23.1%.
Excluding expenses from the loss on extinguishment of debt and
overlapping interest expense of $22.0 million, net of tax, and
expenses from the data security incident and management transition
expenses of $0.8 million, net of tax, adjusted net earnings for the
fiscal 2016 first quarter were $65.1 million, up 18.2% from
adjusted net earnings of $55.1 million in the fiscal 2015 first
quarter.
GAAP and adjusted diluted earnings per share for the fiscal 2016
first quarter were $0.28 and $0.43, respectively, compared to GAAP
and adjusted fiscal 2015 first quarter diluted earnings per share
of $0.35.
Adjusted EBITDA(1): Adjusted EBITDA for the
fiscal 2016 first quarter was $159.9 million, an increase of 10.4%
from $144.8 million for the fiscal 2015 first quarter.
Financial Position, Capital Expenditures and Working
Capital: Cash and cash equivalents as of December 31, 2015,
were $67.4 million. The Company’s asset-based loan (ABL) revolving
credit facility ended the fiscal 2016 first quarter with no
outstanding borrowings. The Company’s debt, excluding capital
leases, totaled $1.8 billion as of December 31, 2015.
For the fiscal 2016 first quarter, the Company’s capital
expenditures totaled $32.4 million. Capital expenditures for the
fiscal year 2016 are projected to be in the previously stated range
of $125 million to $135 million, excluding acquisitions.
Working capital (current assets less current liabilities)
decreased $20.5 million to $674.9 million at December 31, 2015
compared to $695.4 million at September 30, 2015. Borrowing
capacity on the ABL facility was approximately $478.5 million at
the end of fiscal 2016 fist quarter. The ratio of current assets to
current liabilities was 2.48 to 1.00 at December 31, 2015 compared
to 2.41 to 1.00 at September 30, 2015.
Inventory as of December 31, 2015 was $912.4 million, an
increase of $74.6 million or growth of 8.9% from December 31, 2014
inventory. This increase is primarily due to sales growth from
existing stores, additional inventory from new store openings and
the introduction of new brands in the BSG and Sally businesses.
During the period of October 1, 2015 through December 31, 2015,
the Company repurchased (and subsequently retired) 2.4 million
shares of its common stock at an aggregate cost of $62.4 million
and had approximately $710 million of additional share repurchase
authorization remaining under its $1 billion share repurchase
authorization.
Business Segment Results:
Sally Beauty Supply
Fiscal 2016 First Quarter Results for Sally Beauty
Supply
- Sales of $596.0 million, up 1.6% from
$586.5 million in the fiscal 2015 first quarter. Sales growth was
driven by same store sales growth and net new store openings. The
unfavorable impact of foreign currency exchange on sales was $16.9
million, or 2.9%.
- Same store sales growth of 2.4% versus
growth of 1.6% in the fiscal 2015 first quarter. Same store sales
growth rate was positively impacted by selective price increases in
certain geographical areas of the U.S.
- Gross margin of 55.0%, a 60 basis point
increase from 54.4% in the fiscal 2015 first quarter.
- Segment operating earnings of $106.1
million, up 4.8% from $101.2 million in the fiscal 2015 first
quarter.
- Segment operating margins increased 50
basis points to 17.8% of sales from 17.3% in the fiscal 2015 first
quarter.
- Net store count increased by 106 over
the fiscal 2015 first quarter for total store count of 3,711.
Sales growth in the fiscal 2016 first quarter was driven by same
store sales growth and new store openings; this growth was
partially offset by the unfavorable impact of foreign currency
exchange. Gross profit margin improvement of 60 basis points was
primarily the result of selective price increases in certain
geographical areas of the U.S. and fewer promotions in the quarter
versus the prior year quarter. Segment operating earnings and
margin were positively impacted by gross margin improvement and
SG&A leverage.
Beauty Systems Group
Fiscal 2016 First Quarter Results for Beauty Systems
Group
- Sales of $402.1 million, up 6.4% from
$377.9 million in the fiscal 2015 first quarter. The unfavorable
impact of foreign currency exchange on sales was $5.2 million, or
1.4%.
- Same store sales growth of 7.2% versus
3.9% in the fiscal 2015 first quarter.
- Gross margin of 41.3%, up 40 basis
points when compared to the fiscal 2015 first quarter of
40.9%.
- Segment earnings of $65.9 million, up
16.4% from $56.6 million in the fiscal 2015 first quarter.
- Segment operating margins increased by
140 basis points to 16.4% of sales from 15.0% in the fiscal 2015
first quarter.
- Net store count was 1,303, an increase
of 28 stores over the fiscal 2015 first quarter.
- Total BSG distributor sales consultants
at the end of the fiscal 2016 first quarter were 951 versus 967 at
the end of the fiscal 2015 first quarter.
Sales growth for the Beauty Systems Group was primarily driven
by growth in same store sales, sales growth in the full service
business and net new store openings; this growth was partially
offset by the unfavorable impact of foreign currency exchange.
Growth in segment operating earnings was primarily due to gross
margin expansion and SG&A leverage improvement.
(1)A detailed table reconciling 2016 and 2015 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 800-230-1074 (International: 612-288-0337).
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 to
this conference call, the replay will be available at about 12:00
p.m. (Central) February 4, 2016 through February 18, 2016 by
dialing 1-800-475-6701 or if international dial 320-365-3844 and
reference the conference ID number 384524. 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 $3.8 billion annually. Through the Sally Beauty
Supply and Beauty Systems Group businesses, the Company sells and
distributes through over 5,000 stores, including approximately 175
franchised units, throughout the United States, the United Kingdom,
Belgium, Chile, Peru, Colombia, France, the Netherlands, Canada,
Puerto Rico, Mexico, Ireland, Spain and Germany. Sally Beauty
Supply stores offer up to 10,000 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 10,000 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 and effectively responding to changes in
consumer preferences and buying trends in a timely manner;
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 third-party manufacturers or distributors or increases in the
prices of products we purchase from our third-party manufacturers
or distributors; products sold by us being found to be defective in
labeling or content; compliance with current laws and regulations
or becoming subject to additional or more stringent laws and
regulations; the success of our strategic initiatives including our
store refresh program and increased marketing efforts, to enhance
the customer experience, attract new customers, drive brand
awareness and improve customer loyalty; the success of our
e-commerce businesses; product diversion to mass retailers or other
unauthorized resellers; the operational and financial performance
of our franchise-based business; successfully identifying
acquisition candidates and successfully completing desirable
acquisitions; integrating acquired businesses; the success of our
existing stores, and our ability to increase sales at existing
stores; opening and operating new stores profitably; the volume of
traffic to our stores; the impact of the health of the economy upon
our business; the success of our cost control plans; rising labor
and rental costs; protecting our intellectual property rights,
particularly our trademarks; the risk that our products may
infringe on the intellectual property of others or that we may be
required to defend our intellectual property rights; conducting
business outside the United States; successfully updating and
integrating our information technology systems; disruption in our
information technology systems; a significant data security breach,
including misappropriation of our customers’, or employees’ or
suppliers’ confidential information, and the potential costs
related thereto; the negative impact on our reputation and loss of
confidence of our customers, suppliers and others arising from a
significant data security breach; the costs and diversion of
management’s attention required to investigate and remediate a data
security breach and to continuously upgrade our information
technology security systems to address evolving cyber security
threats; the ultimate determination of the extent or scope of the
potential liabilities relating to our past data security incidents;
our ability to attract or retain highly skilled management and
other personnel; 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 existing financial reporting
system; being a holding company, with no operations of our own, and
depending on our subsidiaries for cash; our ability to execute and
implement our common stock repurchase program; our substantial
indebtedness; the possibility that we may incur substantial
additional debt, including secured debt, in the future;
restrictions and limitations in the agreements and instruments
governing our debt; generating the significant amount of cash
needed to service all of our debt and refinancing all or a portion
of our indebtedness or obtaining additional financing; 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 filings with the
Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K for the year ended September 30, 2015,
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.
Use of Non-GAAP Financial Measures
This news release and the schedules hereto include the following
financial measures that have not been calculated in accordance with
accounting principles generally accepted in the U.S., or GAAP, and
are therefore referred to as non-GAAP financial measures: (1)
Adjusted EBITDA; (2) Adjusted net earnings, earnings per share and
diluted earnings per share; and (3) Adjusted SG&A expenses. We
have provided definitions below for these non-GAAP financial
measures and have provided tables in the schedules hereto to
reconcile these non-GAAP financial measures to the comparable GAAP
financial measures.
Adjusted EBITDA - We define the measure Adjusted EBITDA as GAAP
net earnings before depreciation and amortization, interest
expense, income taxes, share-based compensation, costs related to
the Company’s previously disclosed data security incidents,
management transition plan and expenses from the loss on
extinguishment of debt and overlapping interest expense.
Adjusted Net Earnings, Earnings Per Share, Diluted Earnings Per
Share and SG&A Expenses – Adjusted net earnings, earnings per
share, diluted earnings per share and SG&A expenses are GAAP
net earnings, earnings per share, diluted earnings per share and
SG&A expenses that exclude costs related to the Company’s
previously disclosed management transition plan, data security
incidents and the loss on extinguishment of debt and overlapping
interest expense for the relevant time periods as indicated in the
accompanying non-GAAP reconciliations to the comparable GAAP
financial measures.
We have provided these non-GAAP financial measures as
supplemental information to our GAAP financial measures and believe
these non-GAAP measures provide investors with additional
meaningful financial information regarding our operating
performance. Our management and Board of Directors also use these
non-GAAP measures as supplemental measures in the evaluation of our
businesses and believe that these non-GAAP measures provide a
meaningful measure to evaluate our historical and prospective
financial performance. These non-GAAP measures should not be
considered a substitute for or superior to GAAP results.
Furthermore, the non-GAAP measures presented by us may not be
comparable to similarly titled measures of other companies.
Supplemental Schedules Consolidated Statements of
Earnings A Segment Information B
Non-GAAP Financial Measures Reconciliations (Adjusted EBITDA) C
Non-GAAP Financial Measures Reconciliations (Continued) D Store
Count and Same Store Sales E Selected Financial Data and Debt F
Supplemental Schedule A
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Consolidated
Statements of Earnings (In thousands, except per share data)
(Unaudited) Three Months Ended December 31,
2015 2014 % CHG Net sales
$ 998,032 $ 964,468 3.5 % Cost of products sold and distribution
expenses 503,983 490,699
2.7 % Gross profit 494,049 473,769 4.3 % Selling,
general and administrative expenses (1) 339,728 336,954 0.8 %
Depreciation and amortization 23,386
20,579 13.6 % Operating earnings
130,935 116,236 12.6 % Interest expense (2)
63,943 29,241 118.7 % Earnings
before provision for income taxes 66,992 86,995 -23.0 % Provision
for income taxes 24,749
32,086 -22.9 % Net earnings $ 42,243
$ 54,909 -23.1 % Earnings per
share: Basic $ 0.28 $ 0.35 -20.0 % Diluted $ 0.28 $ 0.35 -20.0 %
Weighted average shares: Basic 150,786 156,104 Diluted
152,426 158,545
Basis Pt Chg
Comparison as a % of
Net sales
Sally Beauty Supply Segment Gross Profit Margin 55.0 % 54.4 % 60
BSG Segment Gross Profit Margin 41.3 % 40.9 % 40 Consolidated Gross
Profit Margin 49.5 % 49.1 % 40 Selling, general and administrative
expenses 34.0 % 34.9 % (90 ) Consolidated Operating Profit Margin
13.1 % 12.1 % 100 Net Earnings Margin 4.2 % 5.7 % (150 )
Effective Tax
Rate
36.9 % 36.9 % 0 (1) For the three months ended December 31,
2015 and 2014, selling, general and administrative expenses include
share-based compensation expenses of $4.2 million and $7.8 million,
respectively, and pre-tax expenses incurred in connection with the
data security incidents disclosed earlier of $0.5 million and $0.2
million, respectively; and, for the three months ended December 31,
2015, $0.9 million of pre-tax expenses in connection with the
management transition plan disclosed earlier. (2) For the
three months ended December 31, 2015, interest expense includes
loss on extinguishment of debt of $33.3 million in connection with
the Company's December 2015 redemption of its senior notes due
2019. Supplemental Schedule B
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Segment
Information (In thousands) (Unaudited) Three Months Ended
December 31, 2015 2014
% CHG Net sales: Sally Beauty Supply $ 595,966 $ 586,519 1.6
% Beauty Systems Group 402,066
377,949 6.4 % Total net sales $
998,032 $ 964,468 3.5 %
Operating earnings: Sally Beauty Supply $ 106,077 $ 101,179 4.8 %
Beauty Systems Group 65,880
56,589 16.4 % Segment operating earnings
171,957 157,768
9.0 % Unallocated expenses (1) (36,834 ) (33,772 )
9.1 % Share-based compensation (4,188 ) (7,760 ) -46.0 % Interest
expense (2) (63,943 ) (29,241 )
118.7 % Earnings before provision for income taxes
$ 66,992 $ 86,995 -23.0 %
Segment operating profit margin:
Basis Pt Chg Sally Beauty
Supply 17.8 % 17.3 % 50 Beauty Systems Group 16.4 % 15.0 % 140
Consolidated operating profit margin 13.1 %
12.1 % 100
(1)
For the three months ended December 31, 2015 and 2014, selling,
general and administrative expenses include $0.5 million and $0.2
million, respectively, in pre-tax expenses incurred in connection
with the data security incidents disclosed earlier and, for the
three months ended December 31, 2015, $0.9 million of pre-tax
expenses in connection with the management transition plan
disclosed earlier.
(2)
For the three months ended December 31, 2015, interest expense
includes loss on extinguishment of debt of $33.3 million in
connection with the Company's December 2015 redemption of its
senior notes due 2019.
Supplemental Schedule C
SALLY BEAUTY HOLDINGS, INC. AND
SUBSIDIARIES Non-GAAP Financial Measures Reconciliations (In
thousands) (Unaudited) Three Months Ended December 31,
2015 2014 %
CHG Adjusted EBITDA: Net earnings (per GAAP) $ 42,243 $ 54,909
-23.1 % Add: Depreciation and amortization 23,386 20,579 13.6 %
Share-based compensation (1) 4,188 7,760 -46.0 % Loss from data
security incidents (2) 478 241 98.3 % Management transition
expenses (2) 879 - 100.0 % Interest expense (3) 63,943 29,241 118.7
% Provision for income taxes 24,749
32,086 -22.9 % Adjusted EBITDA (Non-GAAP) $ 159,866
$ 144,816 10.4 %
(1)
For the three months ended December 31, 2015 and 2014, share-based
compensation includes $1.3 million and $4.8 million, respectively,
of accelerated expense related to certain retirement-eligible
employees who are eligible to continue vesting awards upon
retirement.
(2)
For the three months ended December 31, 2015 and 2014, selling,
general and administrative expenses include $0.5 million and $0.2
million, respectively, in pre-tax expenses incurred in connection
with the data security incidents disclosed earlier and, for the
three months ended December 31, 2015, $0.9 million of pre-tax
expenses in connection with the management transition plan
disclosed earlier.
(3)
For the three months ended December 31, 2015, interest expense
includes loss on extinguishment of debt of $33.3 million in
connection with the Company's December 2015 redemption of its
senior notes due 2019.
Supplemental Schedule D
SALLY BEAUTY
HOLDINGS, INC. AND SUBSIDIARIES Non-GAAP Financial Measures
Reconciliations, Continued (In thousands) (Unaudited)
Three Months Ended December 31, 2015
As Reported
Loss onExtinguishmentof Debt (1)
Overlapping InterestExpense (1)
ManagementTransitionExpenses (2)
Charges fromData SecurityIncidents (2)
As Adjusted(Non-GAAP)
Selling, general and administrative expenses $ 339,728 $
(879 ) $ (478 ) $ 338,371 SG&A expenses, as a percentage of
sales 34.0 % 33.9 % Operating earnings 130,935 879 478 132,292
Operating Profit Margin 13.1 % 13.3 % Earnings before provision for
income taxes 66,992 $ 33,296 $ 2,148 879 478 103,793 Provision for
income taxes (3) 24,749
12,652 816 334 182
38,733 Net earnings $
42,243 $ 20,644 $ 1,332 $ 545
$ 296 $ 65,060 Earnings per
share: Basic $ 0.28 $ 0.14 $ 0.01 $ 0.00 $ 0.00 $ 0.43 Diluted $
0.28 $ 0.14 $ 0.01 $ 0.00 $ 0.00 $ 0.43
Three Months Ended December 31, 2014 As
Reported
Charges fromData SecurityIncidents (2)
As Adjusted(Non-GAAP)
Selling, general and administrative expenses $ 336,954 $
(241 ) $ 336,713 SG&A expenses, as a percentage of sales 34.9 %
34.9 % Operating earnings 116,236 241 116,477 Operating Profit
Margin 12.1 % 12.1 % Earnings before provision for income taxes
86,995 241 87,236 Provision for income taxes (3)
32,086
89 32,175 Net earnings
$ 54,909
$ 152 $ 55,061 Earnings
per share: Basic $ 0.35 $ 0.00 $ 0.35 Diluted $ 0.35 $ 0.00 $ 0.35
(1)
For the three months ended December 31, 2015, interest expense
includes loss on extinguishment of debt of $33.3 million in
connection with the Company's December 2015 redemption of its
senior notes due 2019 and interest on such senior notes of $2.1
million after December 3, 2015 and until their redemption, as well
as interest on the Company's new senior notes due 2025 issued on
December 3. This pro-forma adjustment assumes the senior notes due
2019 were redeemed on December 3, 2015.
(2)
For the three months ended December 31, 2015 and 2014, selling,
general and administrative expenses include $0.5 million and $0.2
million, respectively, in pre-tax expenses incurred in connection
with the data security incidents disclosed earlier and, for the
three months ended December 31, 2015, $0.9 million of expenses in
connection with the management transition plan disclosed earlier.
(3)
The tax provision for the adjustments to net earnings was
calculated using an effective tax rate of 38.0% and 37.0% for the
three months ended December 31, 2015 and 2014, respectively.
Supplemental Schedule E
SALLY
BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Store Count and Same
Store Sales (Unaudited) As of December 31,
2015 2014 CHG Number of stores (at end
of period): Sally Beauty Supply: Company-operated stores 3,693
3,586 107 Franchise stores 18 19 (1 ) Total Sally
Beauty Supply 3,711 3,605 106 Beauty Systems Group:
Company-operated stores 1,141 1,109 32 Franchise stores 162
166 (4 ) Total Beauty System Group 1,303 1,275
28 Total 5,014 4,880 134 BSG
distributor sales consultants (end of period) (1) 951 967 (16 )
2015
2014 First quarter company-operated same store sales growth (2)
Basis Pt
Chg
Sally Beauty Supply 2.4 % 1.6 % 80 Beauty Systems Group 7.2 % 3.9 %
330 Consolidated 3.9 % 2.3 % 160 (1) Includes 316 and 333
distributor sales consultants as reported by our franchisees at
December 31, 2015 and 2014, 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 F
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Selected
Financial Data and Debt (In thousands) (Unaudited)
As of December 31,2015
As of September 30,2015
Financial condition information (at period end): Working capital $
674,945 $ 695,403 Cash and cash equivalents 67,447 140,038 Property
and equipment, net 281,278 270,847 Total assets 2,043,126 2,094,351
Total debt, including capital leases (1) 1,782,832 1,787,594 Total
stockholders' (deficit) equity ($321,666 ) ($297,821 )
As of December 31,2015
Interest Rates(2)
Debt position, excluding capital leases: Revolving ABL facility $ -
(i) Prime + 0.50-0.75% or(ii) LIBOR +
1.50-1.75%
Senior notes due 2022 850,000 5.750 % Senior notes due 2023 200,000
5.500 % Senior notes due 2025 750,000 5.625 % Total debt,
excluding capital leases (3) $ 1,800,000
Debt maturities, excluding
capital leases: Twelve months ending December 31, 2016-2020 $ -
Thereafter 1,800,000 Total debt, excluding capital
leases (3) $ 1,800,000 (1) Total debt, including
capital leases, is net of unamortized debt issuance costs of $26.1
million at December 31, 2015 and $21.8 million at September 30,
2015. (2) Interest rates shown represent the coupon or
contractual rates related to each indebtedness. (3) Amounts
do not include capital lease obligations of $2.6 million,
unamortized premium of $6.3 million related to senior notes due
2022 in an aggregate principal amount of $150.0 million, or
unamortized debt issuance costs in the aggregate amount of $26.1
million in connection with the senior notes due 2022, 2023 and
2025.
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Sally Beauty Holdings, Inc.Karen Fugate, 940-297-3877Investor
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