Item 2.05
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Costs Associated with Exit or Disposal Activities
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On April 3, 2018, the Board of Directors of
Sally Beauty Holdings, Inc. (the Company) approved a cost reduction plan designed to help fund important long-term growth initiatives. This program will entail strategic cost savings initiatives, including headcount reductions, primarily
at the Companys corporate headquarters in Denton, Texas, which represent an expansion of the restructuring plan announced this past November (2018 Restructuring Plan) and reflects the Companys continued focus on streamlining
operations and improving efficiencies in order to drive long-term profitable growth.
The new organizational efficiency actions are expected to generate
annualized benefits in the range of $14 million to $15 million, with benefits in fiscal year 2018 in the range of $6 million to $7 million. The Company intends to reinvest these benefits to support long-term growth initiatives.
It is expected that the other cost savings initiatives will generate further substantial benefits as the strategies are finalized and implemented over the balance of the current fiscal year and beyond. The charges to be incurred in connection with
this plan in fiscal 2018, consisting primarily of employee separation costs and the cost of third party consultants, are expected to be in the range of $15 million to $16 million.
The restructuring actions disclosed earlier this fiscal year (focused primarily on the Companys international operations) are still expected to generate
annualized benefits in the range of $12 million to $14 million, with approximately $8 million realized in fiscal year 2018. Total restructuring charges related to the 2018 Restructuring Plan, including the international restructuring
initiatives previously disclosed, are now expected in the range of $28 million to $30 million, the majority of which are expected to be recorded in the current fiscal year, including approximately $6 million that was recorded in the
Companys fiscal first quarter ended December 31, 2017.
The Companys cost reduction plan and long-term growth strategy are described in
the news release attached hereto as Exhibit 99.1.
Cautionary Notice Regarding Forward-Looking Statements
Statements in this report 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: our ability to implement and achieve benefits from the cost reduction initiatives and reinvestment plans in multiple jurisdictions; our ability to manage the effects of our cost reduction plans
including headcount reductions; possible changes in the size and components of the expected costs and charges associated with the restructuring plan; our ability to realize organizational efficiencies and expected cost savings within the anticipated
time frame, if at all; our ability to successfully implement our long-term strategic and growth initiatives; and diversion of our managements time and attention from the operation of out businesses.
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, 2017, 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.