Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2018 | Apr. 27, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Sally Beauty Holdings, Inc. | |
Entity Central Index Key | 1,368,458 | |
Document Type | 10-Q | |
Trading Symbol | SBH | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 122,093,187 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 68,056 | $ 63,759 |
Trade accounts receivable, net | 48,991 | 46,986 |
Accounts receivable, other | 49,764 | 45,255 |
Inventory | 935,037 | 930,855 |
Other current assets | 52,313 | 55,223 |
Total current assets | 1,154,161 | 1,142,078 |
Property and equipment, net of accumulated depreciation of $580,054 at March 31, 2018 and $546,061 at September 30, 2017 | 300,132 | 313,717 |
Goodwill | 546,035 | 537,791 |
Intangible assets, excluding goodwill, net of accumulated amortization of $128,186 at March 31, 2018 and $121,550 at September 30, 2017 | 75,943 | 80,305 |
Other assets | 23,879 | 25,116 |
Total assets | 2,100,150 | 2,099,007 |
Current liabilities: | ||
Current maturities of long-term debt | 86,208 | 96,082 |
Accounts payable | 289,969 | 307,752 |
Accrued liabilities | 168,074 | 166,527 |
Income taxes payable | 1,577 | 2,233 |
Total current liabilities | 545,828 | 572,594 |
Long-term debt | 1,769,841 | 1,771,853 |
Other liabilities | 33,346 | 20,140 |
Deferred income tax liabilities, net | 66,164 | 98,036 |
Total liabilities | 2,415,179 | 2,462,623 |
Stockholders’ deficit: | ||
Common stock, $0.01 par value. Authorized 500,000 shares; 123,344 and 129,710 shares issued and 123,002 and 129,585 shares outstanding at March 31, 2018 and September 30, 2017, respectively | 1,230 | 1,296 |
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued | ||
Accumulated deficit | (246,112) | (283,076) |
Accumulated other comprehensive loss, net of tax | (70,147) | (81,836) |
Total stockholders’ deficit | (315,029) | (363,616) |
Total liabilities and stockholders’ deficit | $ 2,100,150 | $ 2,099,007 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
Statement Of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation (in dollars) | $ 580,054 | $ 546,061 |
Intangible assets, excluding goodwill, accumulated amortization (in dollars) | $ 128,186 | $ 121,550 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 500,000,000 | 500,000,000 |
Common stock, shares issued | 123,344,000 | 129,710,000 |
Common stock, shares outstanding | 123,002,000 | 129,585,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 975,321 | $ 966,470 | $ 1,970,286 | $ 1,966,080 |
Cost of goods sold | 488,999 | 478,364 | 997,335 | 986,266 |
Gross profit | 486,322 | 488,106 | 972,951 | 979,814 |
Selling, general and administrative expenses | 368,461 | 359,857 | 739,748 | 734,108 |
Restructuring charges | 6,759 | 9,211 | 11,969 | 9,211 |
Operating earnings | 111,102 | 119,038 | 221,234 | 236,495 |
Interest expense | 25,262 | 26,848 | 49,277 | 53,646 |
Earnings before provision for income taxes | 85,840 | 92,190 | 171,957 | 182,849 |
Provision for income taxes | 24,469 | 35,198 | 27,322 | 70,031 |
Net earnings | $ 61,371 | $ 56,992 | $ 144,635 | $ 112,818 |
Earnings per share: | ||||
Basic | $ 0.49 | $ 0.41 | $ 1.15 | $ 0.79 |
Diluted | $ 0.49 | $ 0.40 | $ 1.14 | $ 0.79 |
Weighted average shares: | ||||
Basic | 124,270 | 140,549 | 126,046 | 142,107 |
Diluted | 125,057 | 141,325 | 126,834 | 143,047 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net earnings | $ 61,371 | $ 56,992 | $ 144,635 | $ 112,818 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax | 10,437 | 8,026 | 10,182 | (10,642) |
Interest rate caps: | ||||
Changes in fair value | 3,251 | 2,121 | ||
Income taxes related to changes in fair value | (941) | (614) | ||
Other comprehensive income (loss), net of tax | 12,747 | 8,026 | 11,689 | (10,642) |
Total comprehensive income | $ 74,118 | $ 65,018 | $ 156,324 | $ 102,176 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows from Operating Activities: | ||
Net earnings | $ 144,635 | $ 112,818 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 54,009 | 54,716 |
Share-based compensation expense | 5,850 | 6,212 |
Amortization of deferred financing costs | 1,851 | 1,577 |
Loss on extinguishment of debt | 876 | |
Deferred income taxes | (29,379) | 4,321 |
Changes in (exclusive of effects of acquisitions): | ||
Trade accounts receivable | (1,506) | 1,376 |
Accounts receivable, other | (3,990) | 2,898 |
Inventory | 3,266 | (14,805) |
Other current assets | 3,508 | 13,262 |
Other assets | 185 | (427) |
Accounts payable and accrued liabilities | (12,175) | (21,392) |
Income taxes payable | (762) | 2,503 |
Other liabilities | 13,082 | (3,652) |
Net cash provided by operating activities | 179,450 | 159,407 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (38,679) | (49,320) |
Acquisitions, net of cash acquired | (9,175) | |
Net cash used by investing activities | (47,854) | (49,320) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 246,819 | 136,000 |
Repayments of long-term debt | (260,142) | (130,844) |
Debt issuance costs | (1,151) | |
Payments for common stock repurchased | (114,699) | (169,144) |
Proceeds from exercises of stock options | 1,112 | 16,683 |
Net cash used by financing activities | (128,061) | (147,305) |
Effect of foreign exchange rate changes on cash and cash equivalents | 762 | (285) |
Net increase (decrease) in cash and cash equivalents | 4,297 | (37,503) |
Cash and cash equivalents, beginning of period | 63,759 | 86,622 |
Cash and cash equivalents, end of period | 68,056 | 49,119 |
Supplemental Cash Flow Information: | ||
Interest paid | 46,574 | 51,987 |
Income taxes paid | 45,089 | 50,495 |
Capital expenditures incurred but not paid | $ 1,426 | $ 1,301 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business Sally Beauty Holdings, Inc. and its consolidated subsidiaries (“Sally Beauty” or “the Company” or “we”) sell professional beauty supplies through its Sally Beauty Supply (“SBS”) retail stores located in the U.S., Puerto Rico, Canada, Mexico, the United Kingdom, Ireland, Belgium, France, Germany, the Netherlands, Spain, Chile and Peru. Additionally, we distribute professional beauty products to salons and licensed salon professionals through our Beauty Systems Group (“BSG”) store operations and a commissioned direct sales force that calls on salons primarily in the U.S. and Canada, and to franchises in the southern and southwestern regions of the U.S. and in Mexico through the operations of our subsidiary Armstrong McCall. A significant number of our products are also available through a number of SBS and BSG-operated websites. Certain beauty products sold by BSG and Armstrong McCall are sold under exclusive territory agreements with the third-party manufacturers. Basis of Presentation The condensed consolidated interim financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures made are adequate to make the information not misleading. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, these condensed consolidated interim financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly our consolidated financial position as of March 31, 2018 and September 30, 2017, our consolidated results of operations and consolidated comprehensive income for the three and six months ended March 31, 2018 and 2017, and our consolidated cash flows for the six months ended March 31, 2018 and 2017. The condensed consolidated interim financial statements included herein have been prepared on a going concern basis of accounting. Each quarter, management evaluates, based on relevant conditions and events, our ability to continue as a going concern for at least one year from the date our financial statements are issued. Based on management’s assessment, we have concluded that substantial doubt about our ability to continue as a going concern does not exist as of the date the condensed consolidated interim financial statements included herein were issued. Certain amounts for the prior fiscal periods have been reclassified to conform to the current fiscal period presentation, in connection with the retroactive adoption of two new accounting pronouncements in the current fiscal year. See Note 3 below for additional information. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies We adhere to the same accounting policies in the preparation of our condensed consolidated interim financial statements as we do in the preparation of our full-year consolidated financial statements. As permitted under GAAP, interim accounting for certain expenses, including income taxes, is based on full-year assumptions. For interim financial reporting purposes, income taxes are recorded based upon estimated annual effective income tax rates. |
Accounting Changes and Recent A
Accounting Changes and Recent Accounting Pronouncements | 6 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes and Recent Accounting Pronouncements | 3. Accounting Changes and Recent Accounting Pronouncements Accounting Changes In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Income Taxes In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements Our financial instruments consist of cash equivalents, if any, trade and other accounts receivable, accounts payable, derivative instruments, including foreign exchange contracts and interest rate caps, and debt. The carrying amounts of cash equivalents, if any, trade and other accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. We measure on a recurring basis and disclose the fair value of our financial instruments under the provisions of ASC Topic 820, Fair Value Measurement Consistent with this hierarchy, we categorize our financial assets and liabilities as follows (in thousands): As of March 31, 2018 Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts $ 340 $ — $ 340 $ — Interest rate caps 7,299 — 7,299 — Total assets $ 7,639 $ — $ 7,639 $ — Liabilities Long-term debt $ 1,866,277 $ 942,600 $ 923,677 $ — Total liabilities $ 1,866,277 $ 942,600 $ 923,677 $ — As of September 30, 2017 Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts $ 779 $ — $ 779 $ — Interest rate caps 5,178 — 5,178 — Total assets $ 5,957 $ — $ 5,957 $ — Liabilities Long-term debt $ 1,919,930 $ 973,750 $ 946,180 $ — Foreign exchange contracts 207 — 207 — Total liabilities $ 1,920,137 $ 973,750 $ 946,387 $ — Long-term debt, including current maturities and borrowings under the asset-based senior secured loan facility (the “ABL facility”), if any, is carried in our consolidated financial statements at amortized cost of $1,874.7 million at March 31, 2018 and $1,887.4 million at September 30, 2017, before unamortized debt issuance costs of $18.7 million at March 31, 2018 and $19.4 million at September 30, 2017. Our senior notes are valued for purposes of this disclosure above using unadjusted quoted market prices for such debt securities. Our term loan B is generally valued for purposes of this disclosure above using quoted market prices for similar debt securities in active markets. Other long-term debt (consisting primarily of borrowings under the ABL facility, if any, and capital lease obligations) is generally valued for purposes of this disclosure above using widely accepted valuation techniques, such as discounted cash flow analyses, using observable inputs, such as market interest rates. |
Accumulated Stockholders' Defic
Accumulated Stockholders' Deficit | 6 Months Ended |
Mar. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Accumulated Stockholders' Deficit | 5. Accumulated Stockholders’ Deficit In August 2017, we announced that our Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $1.0 billion of its common stock over an approximate four-year period expiring on September 30, 2021 (the “2017 Share Repurchase Program”) and terminated our similar share repurchase program approved by our Board in 2014 (the “2014 Share Repurchase Program”). During the six months ended March 31, 2018 and 2017, we repurchased and subsequently retired approximately 6.7 million and 6.9 million shares of our common stock at an aggregate cost of $114.5 million and $168.9 million, excluding common stock surrendered by grantees to satisfy tax withholding obligations, under the 2017 Share Repurchase Program and the 2014 Share Repurchase Program, respectively. We reduced common stock and additional paid-in capital, in the aggregate, by these amounts. However, as required by GAAP, to the extent that share repurchase amounts exceeded the balance of additional paid-in capital prior to our recording of such repurchases, we recorded the excess in accumulated deficit. We funded these share repurchases with cash from operations and borrowings under the ABL facility. The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Caps Total Balance at September 30, 2017 $ (80,752 ) $ (1,084 ) $ (81,836 ) Other comprehensive income before reclassification, net of tax 10,182 1,507 11,689 Balance at March 31, 2018 $ (70,570 ) $ 423 $ (70,147 ) |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 6. Earnings Per Share The following table sets forth the computations of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 Net earnings $ 61,371 $ 56,992 $ 144,635 $ 112,818 Weighted average basic shares 124,270 140,549 126,046 142,107 Dilutive securities: Stock option and stock award programs 787 776 788 940 Weighted average diluted shares 125,057 141,325 126,834 143,047 Earnings per share: Basic $ 0.49 $ 0.41 $ 1.15 $ 0.79 Diluted $ 0.49 $ 0.40 $ 1.14 $ 0.79 For the three and six months ended March 31, 2018, options to purchase 5.4 million shares of our common stock were outstanding but not included in our computations of diluted earnings per share, since these options were anti-dilutive. For the three and six months ended March 31, 2017 and, options to purchase 5.1 million shares and 3.3 million shares, respectively, of our common stock were outstanding but not included in the computations of diluted earnings per share, since these options were anti-dilutive. An anti-dilutive option is an option that is: (a) out-of-the-money (an option with an exercise price which is greater than the average price per share of our common stock during the period), and (b) in-the-money (an option with an exercise price which is less than the average price per share of our common stock during the period) for which the sum of assumed proceeds, including any unrecognized compensation expense related to such option, exceeds the average price per share for the period. |
Share-Based Payments
Share-Based Payments | 6 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Payments | 7. Share-Based Payments Performance-Based Awards The following table presents a summary of the activity for our performance unit awards assuming 100% payout: Performance Unit Awards Number of Shares (in Weighted Average Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 197 $ 24.50 1.5 Granted 215 17.42 Vested — — Forfeited (37 ) 22.01 Unvested at March 31, 2018 375 $ 20.70 1.8 Service-Based Awards The following table presents a summary of the activity for our stock option awards: Number of Outstanding Options (in Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Outstanding at September 30, 2017 5,211 $ 24.12 5.6 $ 3,867 Granted 1,122 17.42 Exercised (123 ) 9.02 Forfeited or expired (549 ) 24.21 Outstanding at March 31, 2018 5,661 $ 23.11 5.9 $ 1,635 Exercisable at March 31, 2018 3,298 $ 23.97 4.4 $ 1,635 The following table presents a summary of the activity for our Restricted Stock Awards: Restricted Stock Awards Number of Shares (in Thousands) Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 125 $ 26.00 1.3 Granted 264 17.42 Vested (29 ) 23.78 Forfeited (18 ) 19.71 Unvested at March 31, 2018 342 $ 19.93 2.4 The following table presents a summary of the activity for our Restricted Stock Units: Restricted Stock Units Number of Shares (in Thousands) Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 — $ — — Granted 72 17.42 Vested — — Forfeited (7 ) 17.42 Unvested at March 31, 2018 65 $ 17.42 0.5 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 8. Goodwill and Intangible Assets During the three months ended March 31, 2018, the Company completed its annual assessment for impairment of goodwill and other intangible assets. No material impairment losses were recognized in the current or prior periods presented in connection with the Company’s goodwill and other intangible assets. For the three months ended March 31, 2018 and 2017, amortization expense related to other intangible assets was $2.7 million and $3.2 million, respectively, and, for the six months ended March 31, 2018 and 2017, amortization expense was $5.6 million and $6.8 million, respectively. |
Short-term Borrowings and Long-
Short-term Borrowings and Long-term Debt | 6 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Short-term Borrowings and Long-term Debt | 9. Short-term Borrowings and Long-term Debt At March 31, 2018, we had $399.7 million available for borrowing under the ABL facility, including the Canadian sub-facility. At March 31, 2018, we were in compliance with the agreements and instruments governing our debt, including our financial covenants. On March 27, 2018, we entered into an Amendment No. 1 with respect to our term loan B pursuant to which the interest rate spread on the variable-rate tranche of approximately $548.6 million was reduced by 25 basis points to 2.25%. In connection with this amendment, we incurred and capitalized financing costs of approximately $1.0 million. This amount is reported as a deduction from the term loan B and is being amortized over the term of the term loan B using the effective interest method. Additionally, we recorded a loss on extinguishment of debt in the amount of approximately $0.9 million, including as a result of certain creditors exiting the loan syndication. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 10. Derivative Instruments and Hedging Activities During the six months ended March 31, 2018, we did not purchase or hold any derivative instruments for trading or speculative purposes. Designated Cash Flow Hedges In July 2017, we purchased two interest rate caps with an initial aggregate notional amount of $550 million (the “interest rate caps”) to mitigate the exposure to higher interest rates in connection with our term loan B. The interest rate caps expire on June 30, 2023 and are designated as cash flow hedges. Non-designated Cash Flow Hedges At March 31, 2018, we held foreign currency forward contracts with an aggregate notional amount of $71.0 million based upon exchange rates at March 31, 2018. These derivative instruments expire at various dates though September 30, 2018. The table below presents the fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets (in thousands): Asset Derivatives Liability Derivatives Classification March 31, 2018 September 30, 2017 Classification March 31, 2018 September 30, 2017 Derivatives designated as hedging instruments: Interest rate caps Other assets $ 7,299 $ 5,178 N/A $ — $ — Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets 340 779 Accrued liabilities — 207 $ 7,639 $ 5,957 $ — $ 207 The effects of our derivative financial instruments on our consolidated statements of earnings were not material for the three and six months ended March 31, 2018 and 2017. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes On December 22, 2017, the U.S. enacted comprehensive amendments to the Internal Revenue Code of 1986 (“U.S. Tax Reform”). Among other things, U.S. Tax Reform (a) reduces the federal statutory tax rate for corporate taxpayers, (b) provides for a deemed repatriation of undistributed foreign earnings by U.S. taxpayers and makes other fundamental changes on how foreign earnings will be taxed by the U.S. and (c) otherwise modifies corporate tax rules in significant ways. In accordance with ASC Topic No. 740, Income Taxes In December 2017, the SEC provided guidance allowing registrants to record provisional amounts, during a specified measurement period, when the necessary information is not available, prepared or analyzed in reasonable detail to account for the impact of U.S. Tax Reform. Accordingly, we have reported the revaluation of deferred income taxes and the impact of the deemed repatriation on our consolidated interim financial statements based on provisional amounts. Specifically, in the six months ended March 31, 2018, we recognized a provisional income tax benefit of $33.6 million in connection with the revaluation of our deferred income tax assets and liabilities, and a provisional income tax charge of $11.4 million for federal and state income taxes, including $10.4 million payable beyond one year, related to accumulated but undistributed earnings of our foreign operations. In the three months ended March 31, 2018, no material changes to the provisional amounts occurred. For the fiscal year ending September 30, 2018, our U.S. federal statutory tax rate is 24.5% and, for fiscal years after that, 21.0%. Among the factors that could affect the accuracy of our provisional amounts is uncertainty about the statutory tax rate applicable to our deferred income tax assets and liabilities, since the actual rate will be dependent on the timing of realization or settlement of such assets and liabilities. At March 31, 2018, we estimated the dates when such realization or settlement would occur. The actual dates when such realization or settlement occurs may be significantly different from our estimates, which could result in the ultimate revaluation of our deferred income taxes to be different from our provisional amounts. In addition, there is uncertainty about the impact of expected Internal Revenue Service (“IRS”) guidance intended to interpret the most complex provisions of U.S. Tax Reform. Our liability for federal and state income taxes applicable to undistributed earnings of our foreign operations may be materially different from our provisional amount as a result of such future IRS guidance and interpretation and in connection with estimates related to the amount of undistributed foreign earnings and cash balances. Effective for fiscal years beginning after December 31, 2017, U.S. Tax Reform subjects taxpayers to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. In January 2018, FASB Staff provided guidance that an entity can make an accounting policy election to either recognize deferred taxes related to items giving rise to GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. Given the uncertainty about the impact of expected IRS guidance related to the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. We are currently assessing the potential additional impact of U.S. Tax Reform on our business and consolidated financial statements, and expect to complete such assessment on or before September 30, 2018. The difference between our U.S. federal statutory income tax rate and our effective income tax rate is summarized below: Three Months Ended March 31, 2018 Six Months Ended March 31, 2018 U.S. federal statutory income tax rate 24.5 % 24.5 % State income taxes, net of federal tax benefit 3.0 3.1 Effect of foreign operations 1.0 0.9 Deferred tax revaluation — (19.6) Deemed repatriation tax — 6.7 Other, net — 0.3 Effective tax rate 28.5 % 15.9 % |
Business Segments
Business Segments | 6 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segments | 12. Business Segments Our business is organized into two operating and reporting segments: (i) SBS, a domestic and international chain of retail stores and a consumer-facing e-commerce website that offers professional beauty supplies to both salon professionals and retail customers in North America, Puerto Rico, and parts of Europe and South America and (ii) BSG, including its franchise-based business Armstrong McCall, a full service distributor of beauty products and supplies that offers professional beauty products directly to salons and salon professionals through its professional-only stores, e-commerce websites and its own sales force in partially exclusive geographical territories in North America. The accounting policies of both of our reportable segments are the same as described in the summary of significant accounting policies contained in Note 2 of the “Notes to Consolidated Financial Statements” in “Item 8 - Financial Statements and Supplementary Data” contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017. Sales between segments, which are eliminated in consolidation, were not material during the three and six months ended March 31, 2018 and 2017. Segment data for the three and six months ended March 31, 2018 and 2017 is as follows (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 Net sales: SBS $ 580,114 $ 575,994 $ 1,165,689 $ 1,165,853 BSG 395,207 390,476 804,597 800,227 Total $ 975,321 $ 966,470 $ 1,970,286 $ 1,966,080 Earnings before provision for income taxes: Segment operating earnings: SBS $ 90,328 $ 96,839 $ 176,922 $ 189,365 BSG 59,949 62,703 124,514 126,303 Segment operating earnings 150,277 159,542 301,436 315,668 Unallocated expenses (32,416 ) (31,293 ) (68,233 ) (69,962 ) Restructuring charges (6,759 ) (9,211 ) (11,969 ) (9,211 ) Consolidated operating earnings 111,102 119,038 221,234 236,495 Interest expense (25,262 ) (26,848 ) (49,277 ) (53,646 ) Earnings before provision for income taxes $ 85,840 $ 92,190 $ 171,957 $ 182,849 |
Parent, Issuers, Guarantor and
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements | 6 Months Ended |
Mar. 31, 2018 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements | 13. Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidating Financial Statements The following consolidating financial information presents the condensed consolidating balance sheets as of March 31, 2018 and September 30, 2017, the related condensed consolidating statements of earnings and comprehensive income for the three and six months ended March 31, 2018 and 2017, and the condensed consolidating statements of cash flows for the six months ended March 31, 2018 and 2017 of: (i) Sally Beauty Holdings, Inc., or the “Parent;” (ii) Sally Holdings and Sally Capital Inc. (iii) the guarantor subsidiaries; (iv) the non-guarantor subsidiaries; (v) elimination entries necessary for consolidation purposes; and (vi) Sally Beauty on a condensed consolidated basis. Investments in subsidiaries are accounted for using the equity method for purposes of the consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. Separate financial statements and other disclosures with respect to the subsidiary guarantors have not been provided because we believe the following information is sufficient since the guarantor subsidiaries are 100% indirectly owned by the Parent and all guarantees are full and unconditional. Condensed Consolidating Balance Sheet March 31, 2018 (In thousands) Parent Sally Holdings and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 28,211 $ 39,835 $ — $ 68,056 Trade and other accounts receivable, net — — 63,931 34,824 — 98,755 Due from affiliates — — 2,448,961 — (2,448,961 ) — Inventory — — 697,786 237,251 — 935,037 Other current assets 7,750 505 26,711 17,347 — 52,313 Property and equipment, net 10 — 219,104 81,018 — 300,132 Investment in subsidiaries 1,271,522 3,912,786 386,703 — (5,571,011 ) — Goodwill and other intangible assets, net — — 463,587 158,391 — 621,978 Other assets 1,050 10,335 (7,859 ) 20,353 — 23,879 Total assets $ 1,280,332 $ 3,923,636 $ 4,327,135 $ 589,019 $ (8,019,972 ) $ 2,100,150 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 59 $ 1 $ 223,727 $ 66,182 $ — $ 289,969 Due to affiliates 1,584,758 775,062 — 89,141 (2,448,961 ) — Accrued liabilities 279 19,431 112,026 36,338 — 168,074 Income taxes payable — 1,764 — (187 ) — 1,577 Long-term debt — 1,854,904 4 1,141 — 1,856,049 Other liabilities 10,371 — 18,571 4,404 — 33,346 Deferred income tax liabilities, net (106 ) 952 60,021 5,297 — 66,164 Total liabilities 1,595,361 2,652,114 414,349 202,316 (2,448,961 ) 2,415,179 Total stockholders’ (deficit) equity (315,029 ) 1,271,522 3,912,786 386,703 (5,571,011 ) (315,029 ) Total liabilities and stockholders’ (deficit) equity $ 1,280,332 $ 3,923,636 $ 4,327,135 $ 589,019 $ (8,019,972 ) $ 2,100,150 Condensed Consolidating Balance Sheet September 30, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 22,090 $ 41,659 $ — $ 63,759 Trade and other accounts receivable, net 200 — 59,992 32,049 — 92,241 Due from affiliates — — 2,289,371 — (2,289,371 ) — Inventory — — 709,890 220,965 — 930,855 Other current assets 11,763 813 26,144 16,503 — 55,223 Property and equipment, net 12 — 230,069 83,636 — 313,717 Investment in subsidiaries 1,110,891 3,717,999 386,681 — (5,215,571 ) — Goodwill and other intangible assets, net — — 468,118 149,978 — 618,096 Other assets 1,538 8,116 (7,837 ) 23,299 — 25,116 Total assets $ 1,124,404 $ 3,726,938 $ 4,184,518 $ 568,089 $ (7,504,942 ) $ 2,099,007 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 251 $ 4 $ 243,818 $ 63,679 $ — $ 307,752 Due to affiliates 1,487,484 727,856 — 74,031 (2,289,371 ) — Accrued liabilities 285 20,108 113,628 32,506 — 166,527 Income taxes payable — 1,624 — 609 — 2,233 Long-term debt — 1,866,455 1 1,479 — 1,867,935 Other liabilities — — 16,008 4,132 — 20,140 Deferred income tax liabilities, net — — 93,064 4,972 — 98,036 Total liabilities 1,488,020 2,616,047 466,519 181,408 (2,289,371 ) 2,462,623 Total stockholders’ (deficit) equity (363,616 ) 1,110,891 3,717,999 386,681 (5,215,571 ) (363,616 ) Total liabilities and stockholders’ (deficit) equity $ 1,124,404 $ 3,726,938 $ 4,184,518 $ 568,089 $ (7,504,942 ) $ 2,099,007 Condensed Consolidating Statement of Earnings and Comprehensive Income Three Months Ended March 31, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 786,743 $ 188,578 $ — $ 975,321 Related party sales — — 631 — (631 ) — Cost of products sold and distribution expenses — — 390,891 98,739 (631 ) 488,999 Gross profit — — 396,483 89,839 — 486,322 Selling, general and administrative expenses 2,859 602 279,435 85,565 — 368,461 Restructuring charges — — 6,759 — — 6,759 Operating earnings (loss) (2,859 ) (602 ) 110,289 4,274 — 111,102 Interest expense (income) — 25,293 (3 ) (28 ) — 25,262 Earnings (loss) before provision for income taxes (2,859 ) (25,895 ) 110,292 4,302 — 85,840 Provision (benefit) for income taxes (828 ) (7,499 ) 30,758 2,038 — 24,469 Equity in earnings of subsidiaries, net of tax 63,402 81,798 2,264 — (147,464 ) — Net earnings 61,371 63,402 81,798 2,264 (147,464 ) 61,371 Other comprehensive income, net of tax — 2,310 — 10,437 — 12,747 Total comprehensive income $ 61,371 $ 65,712 $ 81,798 $ 12,701 $ (147,464 ) $ 74,118 Condensed Consolidating Statement of Earnings and Comprehensive Income Three Months Ended March 31, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 798,631 $ 167,839 $ — $ 966,470 Related party sales — — 595 — (595 ) — Cost of products sold and distribution expenses — — 391,398 87,561 (595 ) 478,364 Gross profit — — 407,828 80,278 — 488,106 Selling, general and administrative expenses 2,823 194 277,634 79,206 — 359,857 Restructuring charges — — 9,211 — — 9,211 Operating earnings (loss) (2,823 ) (194 ) 120,983 1,072 — 119,038 Interest expense (income) — 26,859 — (11 ) — 26,848 Earnings (loss) before provision for income taxes (2,823 ) (27,053 ) 120,983 1,083 — 92,190 Provision (benefit) for income taxes (1,097 ) (10,507 ) 45,799 1,003 — 35,198 Equity in earnings of subsidiaries, net of tax 58,718 75,264 80 — (134,062 ) — Net earnings 56,992 58,718 75,264 80 (134,062 ) 56,992 Other comprehensive income, net of tax — — — 8,026 — 8,026 Total comprehensive income $ 56,992 $ 58,718 $ 75,264 $ 8,106 $ (134,062 ) $ 65,018 Condensed Consolidating Statement of Earnings and Comprehensive Income Six Months Ended March 31, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 1,583,275 $ 387,011 $ — $ 1,970,286 Related party sales — — 1,077 — (1,077 ) — Cost of products sold and distribution expenses — — 794,701 203,711 (1,077 ) 997,335 Gross profit — — 789,651 183,300 — 972,951 Selling, general and administrative expenses 5,465 781 563,902 169,600 — 739,748 Restructuring charges — — 11,969 — — 11,969 Operating earnings (loss) (5,465 ) (781 ) 213,780 13,700 — 221,234 Interest expense (income) — 49,307 (3 ) (27 ) — 49,277 Earnings (loss) before provision for income taxes (5,465 ) (50,088 ) 213,783 13,727 — 171,957 Provision (benefit) for income taxes (1,079 ) (14,424 ) 22,843 19,982 — 27,322 Equity in earnings of subsidiaries, net of tax 149,021 184,685 (6,255 ) — (327,451 ) — Net earnings 144,635 149,021 184,685 (6,255 ) (327,451 ) 144,635 Other comprehensive income, net of tax — 1,507 — 10,182 — 11,689 Total comprehensive income $ 144,635 $ 150,528 $ 184,685 $ 3,927 $ (327,451 ) $ 156,324 Condensed Consolidating Statement of Earnings and Comprehensive Income Six Months Ended March 31, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 1,614,682 $ 351,398 $ — $ 1,966,080 Related party sales — — 1,343 — (1,343 ) — Cost of products sold and distribution expenses — — 802,721 184,888 (1,343 ) 986,266 Gross profit — — 813,304 166,510 — 979,814 Selling, general and administrative expenses 5,372 331 574,358 154,047 — 734,108 Restructuring charges — — 9,211 — — 9,211 Operating earnings (loss) (5,372 ) (331 ) 229,735 12,463 — 236,495 Interest expense (income) — 53,608 (1 ) 39 — 53,646 Earnings (loss) before provision for income taxes (5,372 ) (53,939 ) 229,736 12,424 — 182,849 Provision (benefit) for income taxes (2,087 ) (20,950 ) 87,798 5,270 — 70,031 Equity in earnings of subsidiaries, net of tax 116,103 149,092 7,154 — (272,349 ) — Net earnings 112,818 116,103 149,092 7,154 (272,349 ) 112,818 Other comprehensive loss, net of tax — — — (10,642 ) — (10,642 ) Total comprehensive income (loss) $ 112,818 $ 116,103 $ 149,092 $ (3,488 ) $ (272,349 ) $ 102,176 Condensed Consolidating Statement of Cash Flows Six Months Ended March 31, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 16,313 $ (33,119 ) $ 197,800 $ (1,544 ) $ — $ 179,450 Cash Flows from Investing Activities: Payments for property and equipment, net — — (32,092 ) (6,587 ) — (38,679 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (159,590 ) — 159,590 — Net cash used by investing activities — — (191,682 ) (15,762 ) 159,590 (47,854 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 246,814 5 — — 246,819 Repayments of long-term debt — (259,750 ) (2 ) (390 ) — (260,142 ) Debt issuance costs — (1,151 ) — — — (1,151 ) Repurchases of common stock (114,699 ) — — — — (114,699 ) Proceeds from exercises of stock options 1,112 — — — — 1,112 Due to affiliates 97,274 47,206 — 15,110 (159,590 ) — Net cash (used) provided by financing activities (16,313 ) 33,119 3 14,720 (159,590 ) (128,061 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — 762 — 762 Net increase in cash and cash equivalents — — 6,121 (1,824 ) — 4,297 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 28,211 $ 39,835 $ — $ 68,056 Condensed Consolidating Statement of Cash Flows Six Months Ended March 31, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 15,974 $ (28,849 ) $ 171,472 $ 810 $ — $ 159,407 Cash Flows from Investing Activities: Payments for property and equipment, net (8 ) — (37,174 ) (12,138 ) — (49,320 ) Due from affiliates — — (143,226 ) — 143,226 — Net cash used by investing activities (8 ) — (180,400 ) (12,138 ) 143,226 (49,320 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 136,000 — — — 136,000 Repayments of long-term debt — (130,500 ) (9 ) (335 ) — (130,844 ) Repurchases of common stock (169,144 ) — — — — (169,144 ) Proceeds from exercises of stock options 16,683 — — — — 16,683 Due to affiliates 136,495 (5,013 ) — 11,744 (143,226 ) — Net cash (used) provided by financing activities (15,966 ) 487 (9 ) 11,409 (143,226 ) (147,305 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (285 ) — (285 ) Net decrease in cash and cash equivalents — (28,362 ) (8,937 ) (204 ) — (37,503 ) Cash and cash equivalents, beginning of period — 28,372 22,368 35,882 — 86,622 Cash and cash equivalents, end of period $ — $ 10 $ 13,431 $ 35,678 $ — $ 49,119 |
Restructuring Plans
Restructuring Plans | 6 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Plans | 14. Restructuring Plans 2017 Restructuring Plan In January 2017, our Board of Directors approved a comprehensive restructuring plan (the “2017 Restructuring Plan”) for our businesses that included a number of organizational efficiency initiatives and other cost reduction opportunities. The 2017 Restructuring Plan comprised the closure of four administrative offices in the U.S. and Canada, reductions in both salaried and hourly workforce and certain other cost reduction activities. At September 30, 2017, the initiatives contemplated by the 2017 Restructuring Plan were substantially completed. The liability related to the 2017 Restructuring Plan, which is included in accrued liabilities in our consolidated balance sheets, is as follows (in thousands): Restructuring Activity Liability at September 30, 2017 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at March 31, 2018 Workforce reductions $ 1,860 $ — $ 1,221 $ 312 $ 327 Facility closures 1,747 — 844 — 903 Other 235 — 235 — — Total $ 3,842 $ — $ 2,300 $ 312 $ 1,230 2018 Restructuring Plan In November 2017, our Board approved a restructuring plan (the “2018 Restructuring Plan”) focused primarily on significantly improving the profitability of our international businesses, with particular focus on our European operations. The liability related to the 2018 Restructuring Plan, which is included in accrued liabilities in our consolidated balance sheets, is as follows (in thousands): Restructuring Activity Liability at September 30, 2017 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at March 31, 2018 Workforce reductions $ — $ 6,272 $ 6,143 $ — $ 129 Consulting — 2,891 2,761 — 130 Other — 2,806 2,752 — 54 Total $ — $ 11,969 $ 11,656 $ — $ 313 Expenses incurred in the six months ended March 31, 2018 represent costs incurred by SBS ($8.1 million) and corporate ($3.8 million). In April 2018, we announced an expansion of the 2018 Restructuring Plan that contains cost reduction initiatives designed to help fund important long-term growth initiatives. The expansion to the 2018 Restructuring Plan includes headcount reductions primarily at our corporate headquarters in Denton, Texas. We estimate that we will incur total charges in connection with the expanded 2018 Restructuring Plan of approximately $28 million to $30 million related primarily to employee separation costs and third-party consulting. We anticipate the remaining costs to be incurred in the second half of 2018 and substantially completing the 2018 Restructuring Plan in fiscal year 2018. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies During the fiscal year 2014 and 2015, we disclosed that we had experienced data security incidents (together, the “data security incidents”). The costs that we have incurred to date in connection with these data security incidents include assessments by payment card networks, professional advisory fees and legal fees relating to investigating and remediating the data security incidents. In the fiscal year 2017, we entered into agreements pursuant to which all existing claims and assessments by certain payment card networks were settled. We cannot provide any assurances regarding whether assessments by other payment card networks with which we conduct business will be received. We expect to incur additional costs and expenses related to the data security incidents in the future. These costs and expenses may result from potential additional liabilities to other payment card networks, governmental or third party investigations, proceedings or litigation, and legal and other fees necessary to defend against any potential liabilities or claims, and further investigatory and remediation costs. While we do not anticipate these additional costs and expenses or liabilities would have a material adverse impact on our business, financial condition and operating results, these additional costs and expenses could be significant. |
Accounting Changes and Recent22
Accounting Changes and Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes | Accounting Changes In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Income Taxes In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities by fair value hierarchy | Consistent with this hierarchy, we categorize our financial assets and liabilities as follows (in thousands): As of March 31, 2018 Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts $ 340 $ — $ 340 $ — Interest rate caps 7,299 — 7,299 — Total assets $ 7,639 $ — $ 7,639 $ — Liabilities Long-term debt $ 1,866,277 $ 942,600 $ 923,677 $ — Total liabilities $ 1,866,277 $ 942,600 $ 923,677 $ — As of September 30, 2017 Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts $ 779 $ — $ 779 $ — Interest rate caps 5,178 — 5,178 — Total assets $ 5,957 $ — $ 5,957 $ — Liabilities Long-term debt $ 1,919,930 $ 973,750 $ 946,180 $ — Foreign exchange contracts 207 — 207 — Total liabilities $ 1,920,137 $ 973,750 $ 946,387 $ — |
Accumulated Stockholders' Def24
Accumulated Stockholders' Deficit (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Schedule of changes in accumulated other comprehensive loss | The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Caps Total Balance at September 30, 2017 $ (80,752 ) $ (1,084 ) $ (81,836 ) Other comprehensive income before reclassification, net of tax 10,182 1,507 11,689 Balance at March 31, 2018 $ (70,570 ) $ 423 $ (70,147 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted earnings per share | The following table sets forth the computations of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 Net earnings $ 61,371 $ 56,992 $ 144,635 $ 112,818 Weighted average basic shares 124,270 140,549 126,046 142,107 Dilutive securities: Stock option and stock award programs 787 776 788 940 Weighted average diluted shares 125,057 141,325 126,834 143,047 Earnings per share: Basic $ 0.49 $ 0.41 $ 1.15 $ 0.79 Diluted $ 0.49 $ 0.40 $ 1.14 $ 0.79 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Share-Based Payments | |
Summary of activity for performance based unit awards assuming 100% payout | Performance Unit Awards Number of Shares (in Weighted Average Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 197 $ 24.50 1.5 Granted 215 17.42 Vested — — Forfeited (37 ) 22.01 Unvested at March 31, 2018 375 $ 20.70 1.8 |
Summary of activity for stock option awards | Number of Outstanding Options (in Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Outstanding at September 30, 2017 5,211 $ 24.12 5.6 $ 3,867 Granted 1,122 17.42 Exercised (123 ) 9.02 Forfeited or expired (549 ) 24.21 Outstanding at March 31, 2018 5,661 $ 23.11 5.9 $ 1,635 Exercisable at March 31, 2018 3,298 $ 23.97 4.4 $ 1,635 |
Restricted Stock | |
Share-Based Payments | |
Summary of the activity for restricted stock awards/units | Restricted Stock Awards Number of Shares (in Thousands) Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 125 $ 26.00 1.3 Granted 264 17.42 Vested (29 ) 23.78 Forfeited (18 ) 19.71 Unvested at March 31, 2018 342 $ 19.93 2.4 |
Restricted Stock Units | |
Share-Based Payments | |
Summary of the activity for restricted stock awards/units | Restricted Stock Units Number of Shares (in Thousands) Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 — $ — — Granted 72 17.42 Vested — — Forfeited (7 ) 17.42 Unvested at March 31, 2018 65 $ 17.42 0.5 |
Derivative Instruments and He27
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivative financial instruments and their classification on consolidated balance sheets | The table below presents the fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets (in thousands): Asset Derivatives Liability Derivatives Classification March 31, 2018 September 30, 2017 Classification March 31, 2018 September 30, 2017 Derivatives designated as hedging instruments: Interest rate caps Other assets $ 7,299 $ 5,178 N/A $ — $ — Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets 340 779 Accrued liabilities — 207 $ 7,639 $ 5,957 $ — $ 207 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Difference Between US Federal Statutory Income Tax Rate and Effective Income Tax Rate | The difference between our U.S. federal statutory income tax rate and our effective income tax rate is summarized below: Three Months Ended March 31, 2018 Six Months Ended March 31, 2018 U.S. federal statutory income tax rate 24.5 % 24.5 % State income taxes, net of federal tax benefit 3.0 3.1 Effect of foreign operations 1.0 0.9 Deferred tax revaluation — (19.6) Deemed repatriation tax — 6.7 Other, net — 0.3 Effective tax rate 28.5 % 15.9 % |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment data | Segment data for the three and six months ended March 31, 2018 and 2017 is as follows (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 Net sales: SBS $ 580,114 $ 575,994 $ 1,165,689 $ 1,165,853 BSG 395,207 390,476 804,597 800,227 Total $ 975,321 $ 966,470 $ 1,970,286 $ 1,966,080 Earnings before provision for income taxes: Segment operating earnings: SBS $ 90,328 $ 96,839 $ 176,922 $ 189,365 BSG 59,949 62,703 124,514 126,303 Segment operating earnings 150,277 159,542 301,436 315,668 Unallocated expenses (32,416 ) (31,293 ) (68,233 ) (69,962 ) Restructuring charges (6,759 ) (9,211 ) (11,969 ) (9,211 ) Consolidated operating earnings 111,102 119,038 221,234 236,495 Interest expense (25,262 ) (26,848 ) (49,277 ) (53,646 ) Earnings before provision for income taxes $ 85,840 $ 92,190 $ 171,957 $ 182,849 |
Parent, Issuers, Guarantor an30
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet March 31, 2018 (In thousands) Parent Sally Holdings and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 28,211 $ 39,835 $ — $ 68,056 Trade and other accounts receivable, net — — 63,931 34,824 — 98,755 Due from affiliates — — 2,448,961 — (2,448,961 ) — Inventory — — 697,786 237,251 — 935,037 Other current assets 7,750 505 26,711 17,347 — 52,313 Property and equipment, net 10 — 219,104 81,018 — 300,132 Investment in subsidiaries 1,271,522 3,912,786 386,703 — (5,571,011 ) — Goodwill and other intangible assets, net — — 463,587 158,391 — 621,978 Other assets 1,050 10,335 (7,859 ) 20,353 — 23,879 Total assets $ 1,280,332 $ 3,923,636 $ 4,327,135 $ 589,019 $ (8,019,972 ) $ 2,100,150 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 59 $ 1 $ 223,727 $ 66,182 $ — $ 289,969 Due to affiliates 1,584,758 775,062 — 89,141 (2,448,961 ) — Accrued liabilities 279 19,431 112,026 36,338 — 168,074 Income taxes payable — 1,764 — (187 ) — 1,577 Long-term debt — 1,854,904 4 1,141 — 1,856,049 Other liabilities 10,371 — 18,571 4,404 — 33,346 Deferred income tax liabilities, net (106 ) 952 60,021 5,297 — 66,164 Total liabilities 1,595,361 2,652,114 414,349 202,316 (2,448,961 ) 2,415,179 Total stockholders’ (deficit) equity (315,029 ) 1,271,522 3,912,786 386,703 (5,571,011 ) (315,029 ) Total liabilities and stockholders’ (deficit) equity $ 1,280,332 $ 3,923,636 $ 4,327,135 $ 589,019 $ (8,019,972 ) $ 2,100,150 Condensed Consolidating Balance Sheet September 30, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 22,090 $ 41,659 $ — $ 63,759 Trade and other accounts receivable, net 200 — 59,992 32,049 — 92,241 Due from affiliates — — 2,289,371 — (2,289,371 ) — Inventory — — 709,890 220,965 — 930,855 Other current assets 11,763 813 26,144 16,503 — 55,223 Property and equipment, net 12 — 230,069 83,636 — 313,717 Investment in subsidiaries 1,110,891 3,717,999 386,681 — (5,215,571 ) — Goodwill and other intangible assets, net — — 468,118 149,978 — 618,096 Other assets 1,538 8,116 (7,837 ) 23,299 — 25,116 Total assets $ 1,124,404 $ 3,726,938 $ 4,184,518 $ 568,089 $ (7,504,942 ) $ 2,099,007 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 251 $ 4 $ 243,818 $ 63,679 $ — $ 307,752 Due to affiliates 1,487,484 727,856 — 74,031 (2,289,371 ) — Accrued liabilities 285 20,108 113,628 32,506 — 166,527 Income taxes payable — 1,624 — 609 — 2,233 Long-term debt — 1,866,455 1 1,479 — 1,867,935 Other liabilities — — 16,008 4,132 — 20,140 Deferred income tax liabilities, net — — 93,064 4,972 — 98,036 Total liabilities 1,488,020 2,616,047 466,519 181,408 (2,289,371 ) 2,462,623 Total stockholders’ (deficit) equity (363,616 ) 1,110,891 3,717,999 386,681 (5,215,571 ) (363,616 ) Total liabilities and stockholders’ (deficit) equity $ 1,124,404 $ 3,726,938 $ 4,184,518 $ 568,089 $ (7,504,942 ) $ 2,099,007 |
Schedule of Condensed Consolidating Statement of Earnings and Comprehensive Income | Condensed Consolidating Statement of Earnings and Comprehensive Income Three Months Ended March 31, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 786,743 $ 188,578 $ — $ 975,321 Related party sales — — 631 — (631 ) — Cost of products sold and distribution expenses — — 390,891 98,739 (631 ) 488,999 Gross profit — — 396,483 89,839 — 486,322 Selling, general and administrative expenses 2,859 602 279,435 85,565 — 368,461 Restructuring charges — — 6,759 — — 6,759 Operating earnings (loss) (2,859 ) (602 ) 110,289 4,274 — 111,102 Interest expense (income) — 25,293 (3 ) (28 ) — 25,262 Earnings (loss) before provision for income taxes (2,859 ) (25,895 ) 110,292 4,302 — 85,840 Provision (benefit) for income taxes (828 ) (7,499 ) 30,758 2,038 — 24,469 Equity in earnings of subsidiaries, net of tax 63,402 81,798 2,264 — (147,464 ) — Net earnings 61,371 63,402 81,798 2,264 (147,464 ) 61,371 Other comprehensive income, net of tax — 2,310 — 10,437 — 12,747 Total comprehensive income $ 61,371 $ 65,712 $ 81,798 $ 12,701 $ (147,464 ) $ 74,118 Condensed Consolidating Statement of Earnings and Comprehensive Income Three Months Ended March 31, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 798,631 $ 167,839 $ — $ 966,470 Related party sales — — 595 — (595 ) — Cost of products sold and distribution expenses — — 391,398 87,561 (595 ) 478,364 Gross profit — — 407,828 80,278 — 488,106 Selling, general and administrative expenses 2,823 194 277,634 79,206 — 359,857 Restructuring charges — — 9,211 — — 9,211 Operating earnings (loss) (2,823 ) (194 ) 120,983 1,072 — 119,038 Interest expense (income) — 26,859 — (11 ) — 26,848 Earnings (loss) before provision for income taxes (2,823 ) (27,053 ) 120,983 1,083 — 92,190 Provision (benefit) for income taxes (1,097 ) (10,507 ) 45,799 1,003 — 35,198 Equity in earnings of subsidiaries, net of tax 58,718 75,264 80 — (134,062 ) — Net earnings 56,992 58,718 75,264 80 (134,062 ) 56,992 Other comprehensive income, net of tax — — — 8,026 — 8,026 Total comprehensive income $ 56,992 $ 58,718 $ 75,264 $ 8,106 $ (134,062 ) $ 65,018 Condensed Consolidating Statement of Earnings and Comprehensive Income Six Months Ended March 31, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 1,583,275 $ 387,011 $ — $ 1,970,286 Related party sales — — 1,077 — (1,077 ) — Cost of products sold and distribution expenses — — 794,701 203,711 (1,077 ) 997,335 Gross profit — — 789,651 183,300 — 972,951 Selling, general and administrative expenses 5,465 781 563,902 169,600 — 739,748 Restructuring charges — — 11,969 — — 11,969 Operating earnings (loss) (5,465 ) (781 ) 213,780 13,700 — 221,234 Interest expense (income) — 49,307 (3 ) (27 ) — 49,277 Earnings (loss) before provision for income taxes (5,465 ) (50,088 ) 213,783 13,727 — 171,957 Provision (benefit) for income taxes (1,079 ) (14,424 ) 22,843 19,982 — 27,322 Equity in earnings of subsidiaries, net of tax 149,021 184,685 (6,255 ) — (327,451 ) — Net earnings 144,635 149,021 184,685 (6,255 ) (327,451 ) 144,635 Other comprehensive income, net of tax — 1,507 — 10,182 — 11,689 Total comprehensive income $ 144,635 $ 150,528 $ 184,685 $ 3,927 $ (327,451 ) $ 156,324 Condensed Consolidating Statement of Earnings and Comprehensive Income Six Months Ended March 31, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 1,614,682 $ 351,398 $ — $ 1,966,080 Related party sales — — 1,343 — (1,343 ) — Cost of products sold and distribution expenses — — 802,721 184,888 (1,343 ) 986,266 Gross profit — — 813,304 166,510 — 979,814 Selling, general and administrative expenses 5,372 331 574,358 154,047 — 734,108 Restructuring charges — — 9,211 — — 9,211 Operating earnings (loss) (5,372 ) (331 ) 229,735 12,463 — 236,495 Interest expense (income) — 53,608 (1 ) 39 — 53,646 Earnings (loss) before provision for income taxes (5,372 ) (53,939 ) 229,736 12,424 — 182,849 Provision (benefit) for income taxes (2,087 ) (20,950 ) 87,798 5,270 — 70,031 Equity in earnings of subsidiaries, net of tax 116,103 149,092 7,154 — (272,349 ) — Net earnings 112,818 116,103 149,092 7,154 (272,349 ) 112,818 Other comprehensive loss, net of tax — — — (10,642 ) — (10,642 ) Total comprehensive income (loss) $ 112,818 $ 116,103 $ 149,092 $ (3,488 ) $ (272,349 ) $ 102,176 |
Schedule of Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows Six Months Ended March 31, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 16,313 $ (33,119 ) $ 197,800 $ (1,544 ) $ — $ 179,450 Cash Flows from Investing Activities: Payments for property and equipment, net — — (32,092 ) (6,587 ) — (38,679 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (159,590 ) — 159,590 — Net cash used by investing activities — — (191,682 ) (15,762 ) 159,590 (47,854 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 246,814 5 — — 246,819 Repayments of long-term debt — (259,750 ) (2 ) (390 ) — (260,142 ) Debt issuance costs — (1,151 ) — — — (1,151 ) Repurchases of common stock (114,699 ) — — — — (114,699 ) Proceeds from exercises of stock options 1,112 — — — — 1,112 Due to affiliates 97,274 47,206 — 15,110 (159,590 ) — Net cash (used) provided by financing activities (16,313 ) 33,119 3 14,720 (159,590 ) (128,061 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — 762 — 762 Net increase in cash and cash equivalents — — 6,121 (1,824 ) — 4,297 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 28,211 $ 39,835 $ — $ 68,056 Condensed Consolidating Statement of Cash Flows Six Months Ended March 31, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 15,974 $ (28,849 ) $ 171,472 $ 810 $ — $ 159,407 Cash Flows from Investing Activities: Payments for property and equipment, net (8 ) — (37,174 ) (12,138 ) — (49,320 ) Due from affiliates — — (143,226 ) — 143,226 — Net cash used by investing activities (8 ) — (180,400 ) (12,138 ) 143,226 (49,320 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 136,000 — — — 136,000 Repayments of long-term debt — (130,500 ) (9 ) (335 ) — (130,844 ) Repurchases of common stock (169,144 ) — — — — (169,144 ) Proceeds from exercises of stock options 16,683 — — — — 16,683 Due to affiliates 136,495 (5,013 ) — 11,744 (143,226 ) — Net cash (used) provided by financing activities (15,966 ) 487 (9 ) 11,409 (143,226 ) (147,305 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (285 ) — (285 ) Net decrease in cash and cash equivalents — (28,362 ) (8,937 ) (204 ) — (37,503 ) Cash and cash equivalents, beginning of period — 28,372 22,368 35,882 — 86,622 Cash and cash equivalents, end of period $ — $ 10 $ 13,431 $ 35,678 $ — $ 49,119 |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
2017 Restructuring Plan | |
Schedule of restructuring plan | The liability related to the 2017 Restructuring Plan, which is included in accrued liabilities in our consolidated balance sheets, is as follows (in thousands): Restructuring Activity Liability at September 30, 2017 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at March 31, 2018 Workforce reductions $ 1,860 $ — $ 1,221 $ 312 $ 327 Facility closures 1,747 — 844 — 903 Other 235 — 235 — — Total $ 3,842 $ — $ 2,300 $ 312 $ 1,230 |
2018 Restructuring Plan | |
Schedule of restructuring plan | The liability related to the 2018 Restructuring Plan, which is included in accrued liabilities in our consolidated balance sheets, is as follows (in thousands): Restructuring Activity Liability at September 30, 2017 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at March 31, 2018 Workforce reductions $ — $ 6,272 $ 6,143 $ — $ 129 Consulting — 2,891 2,761 — 130 Other — 2,806 2,752 — 54 Total $ — $ 11,969 $ 11,656 $ — $ 313 |
Accounting Changes and Recent32
Accounting Changes and Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Net decrease in noncurrent deferred income tax liabilities | $ (66,164) | $ (98,036) |
ASU 2015-17 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Decrease in current deferred income tax assets | (28,400) | |
Net decrease in noncurrent deferred income tax liabilities | (22,100) | |
ASU 2015-17 | Other Assets | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Net increase in noncurrent deferred income tax assets | 4,300 | |
ASU 2015-17 | Accrued Liabilities | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Decrease in current deferred income tax liabilities | $ (2,000) | |
ASU 16-02 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Estimated amount of Right of use asset | 600,000 | |
Lease liability | $ 600,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
ABL facility | ||
Liabilities | ||
Long term debt carrying amount | $ 1,874,700 | $ 1,887,400 |
Unamortized debt issuance costs | 18,700 | 19,400 |
Fair value measurement on recurring basis | ||
Assets | ||
Foreign exchange contracts | 340 | 779 |
Interest rate caps | 7,299 | 5,178 |
Total assets | 7,639 | 5,957 |
Liabilities | ||
Long-term debt | 1,866,277 | 1,919,930 |
Foreign exchange contracts | 207 | |
Total liabilities | 1,866,277 | 1,920,137 |
Fair value measurement on recurring basis | Level 1 | ||
Liabilities | ||
Long-term debt | 942,600 | 973,750 |
Total liabilities | 942,600 | 973,750 |
Fair value measurement on recurring basis | Level 2 | ||
Assets | ||
Foreign exchange contracts | 340 | 779 |
Interest rate caps | 7,299 | 5,178 |
Total assets | 7,639 | 5,957 |
Liabilities | ||
Long-term debt | 923,677 | 946,180 |
Foreign exchange contracts | 207 | |
Total liabilities | $ 923,677 | $ 946,387 |
Accumulated Stockholders' Def34
Accumulated Stockholders' Deficit - Share Repurchase Program (Details) - USD ($) shares in Millions | 1 Months Ended | 6 Months Ended | |
Aug. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
2017 Share Repurchase program | |||
Share Repurchase Program | |||
Amount of shares authorized to be repurchased | $ 1,000,000,000 | ||
Term of share repurchase program | 4 years | ||
Common stock shares repurchased and retired (in shares) | 6.7 | ||
Cost of repurchase and retirement of common stock | $ 114,500,000 | ||
2014 Share Repurchase Program | |||
Share Repurchase Program | |||
Common stock shares repurchased and retired (in shares) | 6.9 | ||
Cost of repurchase and retirement of common stock | $ 168,900,000 |
Accumulated stock holders' Defi
Accumulated stock holders' Deficit - Change in AOCL (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2018USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Accumulated other comprehensive loss, Beginning Balance | $ (363,616) |
Accumulated other comprehensive loss, Ending Balance | (315,029) |
Interest rate caps | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Accumulated other comprehensive loss, Beginning Balance | (1,084) |
Other comprehensive income before reclassification, net of tax | 1,507 |
Accumulated other comprehensive loss, Ending Balance | 423 |
Foreign currency translation adjustments | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Accumulated other comprehensive loss, Beginning Balance | (80,752) |
Other comprehensive income before reclassification, net of tax | 10,182 |
Accumulated other comprehensive loss, Ending Balance | (70,570) |
AOCI attributable to parent | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Accumulated other comprehensive loss, Beginning Balance | (81,836) |
Other comprehensive income before reclassification, net of tax | 11,689 |
Accumulated other comprehensive loss, Ending Balance | $ (70,147) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share Reconciliation: | ||||
Net earnings | $ 61,371 | $ 56,992 | $ 144,635 | $ 112,818 |
Weighted average basic shares | 124,270 | 140,549 | 126,046 | 142,107 |
Dilutive securities: | ||||
Stock option and stock award programs (in shares) | 787 | 776 | 788 | 940 |
Weighted average diluted shares | 125,057 | 141,325 | 126,834 | 143,047 |
Earnings per share: | ||||
Basic | $ 0.49 | $ 0.41 | $ 1.15 | $ 0.79 |
Diluted | $ 0.49 | $ 0.40 | $ 1.14 | $ 0.79 |
Common stock potentially outstanding but not included in the computation of diluted earnings per share | ||||
Options to purchase shares not included in the computation of diluted earnings per share since the options were anti-dilutive (in shares) | 5,400 | 5,100 | 5,400 | 3,300 |
Share-Based Payments - Performa
Share-Based Payments - Performance-Based Awards (Details) - Performance Unit Awards - $ / shares shares in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Sep. 30, 2017 | |
Share-Based Payments | ||
Payout percentage (in percentage) | 100.00% | |
Performance Unit Awards (in shares) | ||
Unvested at the beginning of the period (in shares) | 197 | |
Granted (in shares) | 215 | |
Forfeited (in shares) | (37) | |
Unvested at the end of the period (in shares) | 375 | 197 |
Performance Unit Awards (in dollars per share) | ||
Unvested at the beginning of the period (in dollars per share) | $ 24.50 | |
Granted (in dollars per share) | 17.42 | |
Forfeited (in dollars per share) | 22.01 | |
Unvested at the end of the period (in dollars per share) | $ 20.70 | $ 24.50 |
Performance Unit Awards (in years) | ||
Weighted Average Remaining Vesting Term (in Years) | 1 year 9 months 18 days | 1 year 6 months |
Share-Based Payments - Service-
Share-Based Payments - Service-Based Awards and Stock Option Awards (Details) - Stock Option Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Sep. 30, 2017 | |
Stock Options, Number of Outstanding Options | ||
Outstanding at the beginning of the period (in shares) | 5,211 | |
Granted (in shares) | 1,122 | |
Exercised (in shares) | (123) | |
Forfeited or expired (in shares) | (549) | |
Outstanding at the end of the period (in shares) | 5,661 | 5,211 |
Exercisable at the end of the period (in shares) | 3,298 | |
Stock Options, Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 24.12 | |
Granted (in dollars per share) | 17.42 | |
Exercised (in dollars per share) | 9.02 | |
Forfeited or expired (in dollars per share) | 24.21 | |
Outstanding at the end of the period (in dollars per share) | 23.11 | $ 24.12 |
Exercisable at the end of the period (in dollars per share) | $ 23.97 | |
Stock Options, Weighted Average Remaining Contractual Term | ||
Weighted average remaining contractual term (in years) | 5 years 10 months 24 days | 5 years 7 months 6 days |
Exercisable at March 31, 2018 | 4 years 4 months 24 days | |
Stock Options, Aggregate Intrinsic Value | ||
Outstanding balance at period end (in dollars) | $ 1,635 | $ 3,867 |
Exercisable at the end of the period (in dollars) | $ 1,635 |
Share-Based Payments - Restrict
Share-Based Payments - Restricted Stock Awards (Details) - Restricted Stock Awards - $ / shares | 6 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Sep. 30, 2017 | |
Restricted stock (in shares) | ||
Unvested at the beginning of the period (in shares) | 125,000 | |
Granted (in shares) | 264,000 | |
Vested (in shares) | (29,000) | |
Forfeited (in shares) | (18,000) | |
Unvested at the end of the period (in shares) | 342,000 | 125,000 |
Restricted Stock (in dollars per share) | ||
Unvested at the beginning of the period (in dollars per share) | $ 26 | |
Granted (in dollars per share) | 17.42 | |
Vested (in dollar per share) | 23.78 | |
Forfeited (in dollars per share) | 19.71 | |
Unvested at the end of the period (in dollars per share) | $ 19.93 | $ 26 |
Restricted stock (in years) | ||
Weighted Average Remaining Vesting Term (in Years) | 2 years 4 months 24 days | 1 year 3 months 18 days |
Share-Based Payments - Restri40
Share-Based Payments - Restricted Stock Units (Details) - Restricted Stock Units - $ / shares | 6 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Sep. 30, 2017 | |
Restricted stock (in shares) | ||
Granted (in shares) | 72,000 | |
Forfeited (in shares) | (7,000) | |
Unvested at the end of the period (in shares) | 65,000 | |
Restricted Stock (in dollars per share) | ||
Granted (in dollars per share) | $ 17.42 | |
Forfeited (in dollars per share) | 17.42 | |
Unvested at the end of the period (in dollars per share) | $ 17.42 | |
Restricted stock (in years) | ||
Weighted Average Remaining Vesting Term (in Years) | 6 months | 0 years |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Impairment losses in connection with the goodwill | $ 0 | |||
Impairment losses in connection with the intangible assets | 0 | |||
Amortization expense related to other intangible assets | $ 2,700,000 | $ 3,200,000 | $ 5,600,000 | $ 6,800,000 |
Short-term Borrowings and Lon42
Short-term Borrowings and Long-term Debt - ABL Facility and Canadian sub-facility (Details) - USD ($) $ in Thousands | Mar. 27, 2018 | Mar. 31, 2018 |
Debt Instruments | ||
Revolving credit facility | $ 399,700 | |
Loss on extinguishment of debt | $ (876) | |
Term Loan B | ||
Debt Instruments | ||
Interest rate spread on variable-rate tranche | $ 548,600 | |
Basis points | 0.25% | |
Variable Interest rate | 2.25% | |
Capitalized financing costs | $ 1,000 | |
Loss on extinguishment of debt | $ (900) |
Derivative Instruments and He43
Derivative Instruments and Hedging Activities - (Details) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2018USD ($)instrument | Mar. 31, 2018USD ($)instrument | Jul. 31, 2017USD ($)derivative | |
Derivative Instruments | |||
Number of derivative instruments held | instrument | 0 | 0 | |
Foreign exchange contracts | |||
Derivative Instruments | |||
Notional Amount | $ 71,000,000 | $ 71,000,000 | |
Foreign exchange contracts | Maximum | |||
Derivative Instruments | |||
Derivative instruments, expiration date | Sep. 30, 2018 | ||
Variable-rate tranche | Interest rate caps | Sally Holdings, LLC | |||
Derivative Instruments | |||
Notional Amount | $ 550,000,000 | ||
Derivative instruments, expiration date | Jun. 30, 2023 | ||
Designated Cash Flow Hedges | |||
Number of interest rate caps | derivative | 2 |
Derivative Instruments and He44
Derivative Instruments and Hedging Activities - Non-designated Cash Flow Hedges (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 |
Derivatives Not Designated as Hedging Instruments | ||
Total derivatives not designated as hedging instruments, Asset | $ 7,639 | $ 5,957 |
Total derivatives not designated as hedging instruments, Liability | 207 | |
Other Assets | ||
Derivatives Not Designated as Hedging Instruments | ||
Interest rate caps | 7,299 | 5,178 |
Other current assets | ||
Derivatives Not Designated as Hedging Instruments | ||
Foreign exchange contracts | $ 340 | 779 |
Accrued Liabilities | ||
Credit-risk-related Contingent Features | ||
Foreign exchange contracts | $ 207 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2018USD ($) | Mar. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | ||
Provisional income tax benefit recognized related to revaluation of deferred income tax assets and liabilities | $ 33.6 | |
Provisional income tax charge recognized for federal and state income taxes | 11.4 | |
Undistributed earnings of foreign operations | $ 10.4 | $ 10.4 |
Federal statutory tax rate for fiscal year September 30, 2018 | 24.50% | 24.50% |
Federal statutory tax rate thereafter | 21.00% |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference Between US Federal Statutory Income Tax Rate and Effective Income Tax Rate (Details) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2018 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory income tax rate | 24.50% | 24.50% |
State income taxes, net of federal tax benefit | 3.00% | 3.10% |
Effect of foreign operations | 1.00% | 0.90% |
Deferred tax revaluation | (19.60%) | |
Deemed repatriation tax | 6.70% | |
Other, net | 0.30% | |
Effective tax rate | 28.50% | 15.90% |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segments | ||||
Number of reportable segments | segment | 2 | |||
Net sales: | ||||
Total net sales | $ 975,321 | $ 966,470 | $ 1,970,286 | $ 1,966,080 |
Segment operating earnings: | ||||
Segment operating earnings | 111,102 | 119,038 | 221,234 | 236,495 |
Restructuring charges | (6,759) | (9,211) | (11,969) | (9,211) |
Interest expense | (25,262) | (26,848) | (49,277) | (53,646) |
Earnings before provision for income taxes | 85,840 | 92,190 | 171,957 | 182,849 |
Operating segments | ||||
Segment operating earnings: | ||||
Segment operating earnings | 150,277 | 159,542 | 301,436 | 315,668 |
Corporate | ||||
Segment operating earnings: | ||||
Unallocated expenses | (32,416) | (31,293) | (68,233) | (69,962) |
Restructuring charges | (3,800) | |||
Sally Beauty Supply | ||||
Net sales: | ||||
Total net sales | 580,114 | 575,994 | 1,165,689 | 1,165,853 |
Segment operating earnings: | ||||
Restructuring charges | (8,100) | |||
Sally Beauty Supply | Operating segments | ||||
Segment operating earnings: | ||||
Segment operating earnings | 90,328 | 96,839 | 176,922 | 189,365 |
Beauty Systems Group | ||||
Net sales: | ||||
Total net sales | 395,207 | 390,476 | 804,597 | 800,227 |
Beauty Systems Group | Operating segments | ||||
Segment operating earnings: | ||||
Segment operating earnings | $ 59,949 | $ 62,703 | $ 124,514 | $ 126,303 |
Parent, Issuers, Guarantor an48
Parent, Issuers, Guarantor and Non Guarantor Condensed Consolidated Financial Statements - (Details) | Mar. 31, 2018 |
Guarantor Subsidiaries | |
Condensed Balance Sheet Statements Captions [Line Items] | |
Percentage of guarantor subsidiaries owned by parent | 100.00% |
Parent, Issuers, Guarantor an49
Parent, Issuers, Guarantor and Non Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 |
Assets | ||||
Cash and cash equivalents | $ 68,056 | $ 63,759 | $ 49,119 | $ 86,622 |
Trade and other accounts receivable, net | 98,755 | 92,241 | ||
Inventory | 935,037 | 930,855 | ||
Other current assets | 52,313 | 55,223 | ||
Property and equipment, net | 300,132 | 313,717 | ||
Goodwill and other intangible assets, net | 621,978 | 618,096 | ||
Other assets | 23,879 | 25,116 | ||
Total assets | 2,100,150 | 2,099,007 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 289,969 | 307,752 | ||
Accrued liabilities | 168,074 | 166,527 | ||
Income taxes payable | 1,577 | 2,233 | ||
Long-term debt | 1,856,049 | 1,867,935 | ||
Other liabilities | 33,346 | 20,140 | ||
Deferred income tax liabilities, net | 66,164 | 98,036 | ||
Total liabilities | 2,415,179 | 2,462,623 | ||
Total stockholders’ (deficit) equity | (315,029) | (363,616) | ||
Total liabilities and stockholders’ deficit | 2,100,150 | 2,099,007 | ||
Parent | ||||
Assets | ||||
Trade and other accounts receivable, net | 200 | |||
Other current assets | 7,750 | 11,763 | ||
Property and equipment, net | 10 | 12 | ||
Investment in subsidiaries | 1,271,522 | 1,110,891 | ||
Other assets | 1,050 | 1,538 | ||
Total assets | 1,280,332 | 1,124,404 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 59 | 251 | ||
Due to affiliates | 1,584,758 | 1,487,484 | ||
Accrued liabilities | 279 | 285 | ||
Other liabilities | 10,371 | |||
Deferred income tax liabilities, net | (106) | |||
Total liabilities | 1,595,361 | 1,488,020 | ||
Total stockholders’ (deficit) equity | (315,029) | (363,616) | ||
Total liabilities and stockholders’ deficit | 1,280,332 | 1,124,404 | ||
Sally Holdings And Sally Capital | ||||
Assets | ||||
Cash and cash equivalents | 10 | 10 | 10 | 28,372 |
Other current assets | 505 | 813 | ||
Investment in subsidiaries | 3,912,786 | 3,717,999 | ||
Other assets | 10,335 | 8,116 | ||
Total assets | 3,923,636 | 3,726,938 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 1 | 4 | ||
Due to affiliates | 775,062 | 727,856 | ||
Accrued liabilities | 19,431 | 20,108 | ||
Income taxes payable | 1,764 | 1,624 | ||
Long-term debt | 1,854,904 | 1,866,455 | ||
Deferred income tax liabilities, net | 952 | |||
Total liabilities | 2,652,114 | 2,616,047 | ||
Total stockholders’ (deficit) equity | 1,271,522 | 1,110,891 | ||
Total liabilities and stockholders’ deficit | 3,923,636 | 3,726,938 | ||
Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 28,211 | 22,090 | 13,431 | 22,368 |
Trade and other accounts receivable, net | 63,931 | 59,992 | ||
Due from affiliates | 2,448,961 | 2,289,371 | ||
Inventory | 697,786 | 709,890 | ||
Other current assets | 26,711 | 26,144 | ||
Property and equipment, net | 219,104 | 230,069 | ||
Investment in subsidiaries | 386,703 | 386,681 | ||
Goodwill and other intangible assets, net | 463,587 | 468,118 | ||
Other assets | (7,859) | (7,837) | ||
Total assets | 4,327,135 | 4,184,518 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 223,727 | 243,818 | ||
Accrued liabilities | 112,026 | 113,628 | ||
Long-term debt | 4 | 1 | ||
Other liabilities | 18,571 | 16,008 | ||
Deferred income tax liabilities, net | 60,021 | 93,064 | ||
Total liabilities | 414,349 | 466,519 | ||
Total stockholders’ (deficit) equity | 3,912,786 | 3,717,999 | ||
Total liabilities and stockholders’ deficit | 4,327,135 | 4,184,518 | ||
Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 39,835 | 41,659 | $ 35,678 | $ 35,882 |
Trade and other accounts receivable, net | 34,824 | 32,049 | ||
Inventory | 237,251 | 220,965 | ||
Other current assets | 17,347 | 16,503 | ||
Property and equipment, net | 81,018 | 83,636 | ||
Goodwill and other intangible assets, net | 158,391 | 149,978 | ||
Other assets | 20,353 | 23,299 | ||
Total assets | 589,019 | 568,089 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 66,182 | 63,679 | ||
Due to affiliates | 89,141 | 74,031 | ||
Accrued liabilities | 36,338 | 32,506 | ||
Income taxes payable | (187) | 609 | ||
Long-term debt | 1,141 | 1,479 | ||
Other liabilities | 4,404 | 4,132 | ||
Deferred income tax liabilities, net | 5,297 | 4,972 | ||
Total liabilities | 202,316 | 181,408 | ||
Total stockholders’ (deficit) equity | 386,703 | 386,681 | ||
Total liabilities and stockholders’ deficit | 589,019 | 568,089 | ||
Consolidating Eliminations | ||||
Assets | ||||
Due from affiliates | (2,448,961) | (2,289,371) | ||
Investment in subsidiaries | (5,571,011) | (5,215,571) | ||
Total assets | (8,019,972) | (7,504,942) | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Due to affiliates | (2,448,961) | (2,289,371) | ||
Total liabilities | (2,448,961) | (2,289,371) | ||
Total stockholders’ (deficit) equity | (5,571,011) | (5,215,571) | ||
Total liabilities and stockholders’ deficit | $ (8,019,972) | $ (7,504,942) |
Parent, Issuers, Guarantor an50
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Statement of Earnings and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Income Statements Captions [Line Items] | ||||
Net sales | $ 975,321 | $ 966,470 | $ 1,970,286 | $ 1,966,080 |
Cost of products sold and distribution expenses | 488,999 | 478,364 | 997,335 | 986,266 |
Gross profit | 486,322 | 488,106 | 972,951 | 979,814 |
Selling, general and administrative expenses | 368,461 | 359,857 | 739,748 | 734,108 |
Restructuring charges | 6,759 | 9,211 | 11,969 | 9,211 |
Operating earnings | 111,102 | 119,038 | 221,234 | 236,495 |
Interest expense (income) | 25,262 | 26,848 | 49,277 | 53,646 |
Earnings before provision for income taxes | 85,840 | 92,190 | 171,957 | 182,849 |
Provision (benefit) for income taxes | 24,469 | 35,198 | 27,322 | 70,031 |
Net earnings | 61,371 | 56,992 | 144,635 | 112,818 |
Other comprehensive income, net of tax | 12,747 | 8,026 | 11,689 | (10,642) |
Total comprehensive income | 74,118 | 65,018 | 156,324 | 102,176 |
Parent | ||||
Condensed Income Statements Captions [Line Items] | ||||
Selling, general and administrative expenses | 2,859 | 2,823 | 5,465 | 5,372 |
Operating earnings | (2,859) | (2,823) | (5,465) | (5,372) |
Earnings before provision for income taxes | (2,859) | (2,823) | (5,465) | (5,372) |
Provision (benefit) for income taxes | (828) | (1,097) | (1,079) | (2,087) |
Equity in earnings of subsidiaries, net of tax | 63,402 | 58,718 | 149,021 | 116,103 |
Net earnings | 61,371 | 56,992 | 144,635 | 112,818 |
Total comprehensive income | 61,371 | 56,992 | 144,635 | 112,818 |
Sally Holdings And Sally Capital | ||||
Condensed Income Statements Captions [Line Items] | ||||
Selling, general and administrative expenses | 602 | 194 | 781 | 331 |
Operating earnings | (602) | (194) | (781) | (331) |
Interest expense (income) | 25,293 | 26,859 | 49,307 | 53,608 |
Earnings before provision for income taxes | (25,895) | (27,053) | (50,088) | (53,939) |
Provision (benefit) for income taxes | (7,499) | (10,507) | (14,424) | (20,950) |
Equity in earnings of subsidiaries, net of tax | 81,798 | 75,264 | 184,685 | 149,092 |
Net earnings | 63,402 | 58,718 | 149,021 | 116,103 |
Other comprehensive income, net of tax | 2,310 | 1,507 | ||
Total comprehensive income | 65,712 | 58,718 | 150,528 | 116,103 |
Guarantor Subsidiaries | ||||
Condensed Income Statements Captions [Line Items] | ||||
Net sales | 786,743 | 798,631 | 1,583,275 | 1,614,682 |
Related party sales | 631 | 595 | 1,077 | 1,343 |
Cost of products sold and distribution expenses | 390,891 | 391,398 | 794,701 | 802,721 |
Gross profit | 396,483 | 407,828 | 789,651 | 813,304 |
Selling, general and administrative expenses | 279,435 | 277,634 | 563,902 | 574,358 |
Restructuring charges | 6,759 | 9,211 | 11,969 | 9,211 |
Operating earnings | 110,289 | 120,983 | 213,780 | 229,735 |
Interest expense (income) | (3) | (3) | (1) | |
Earnings before provision for income taxes | 110,292 | 120,983 | 213,783 | 229,736 |
Provision (benefit) for income taxes | 30,758 | 45,799 | 22,843 | 87,798 |
Equity in earnings of subsidiaries, net of tax | 2,264 | 80 | (6,255) | 7,154 |
Net earnings | 81,798 | 75,264 | 184,685 | 149,092 |
Total comprehensive income | 81,798 | 75,264 | 184,685 | 149,092 |
Non-Guarantor Subsidiaries | ||||
Condensed Income Statements Captions [Line Items] | ||||
Net sales | 188,578 | 167,839 | 387,011 | 351,398 |
Cost of products sold and distribution expenses | 98,739 | 87,561 | 203,711 | 184,888 |
Gross profit | 89,839 | 80,278 | 183,300 | 166,510 |
Selling, general and administrative expenses | 85,565 | 79,206 | 169,600 | 154,047 |
Operating earnings | 4,274 | 1,072 | 13,700 | 12,463 |
Interest expense (income) | (28) | (11) | (27) | 39 |
Earnings before provision for income taxes | 4,302 | 1,083 | 13,727 | 12,424 |
Provision (benefit) for income taxes | 2,038 | 1,003 | 19,982 | 5,270 |
Net earnings | 2,264 | 80 | (6,255) | 7,154 |
Other comprehensive income, net of tax | 10,437 | 8,026 | 10,182 | (10,642) |
Total comprehensive income | 12,701 | 8,106 | 3,927 | (3,488) |
Consolidating Eliminations | ||||
Condensed Income Statements Captions [Line Items] | ||||
Related party sales | (631) | (595) | (1,077) | (1,343) |
Cost of products sold and distribution expenses | (631) | (595) | (1,077) | (1,343) |
Equity in earnings of subsidiaries, net of tax | (147,464) | (134,062) | (327,451) | (272,349) |
Net earnings | (147,464) | (134,062) | (327,451) | (272,349) |
Total comprehensive income | $ (147,464) | $ (134,062) | $ (327,451) | $ (272,349) |
Parent, Issuers, Guarantor an51
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | $ 179,450 | $ 159,407 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (38,679) | (49,320) |
Acquisitions, net of cash acquired | (9,175) | |
Net cash used by investing activities | (47,854) | (49,320) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 246,819 | 136,000 |
Repayments of long-term debt | (260,142) | (130,844) |
Debt issuance costs | (1,151) | |
Repurchases of common stock | (114,699) | (169,144) |
Proceeds from exercises of stock options | 1,112 | 16,683 |
Net cash used by financing activities | (128,061) | (147,305) |
Effect of foreign exchange rate changes on cash and cash equivalents | 762 | (285) |
Net increase (decrease) in cash and cash equivalents | 4,297 | (37,503) |
Cash and cash equivalents, beginning of period | 63,759 | 86,622 |
Cash and cash equivalents, end of period | 68,056 | 49,119 |
Parent | ||
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | 16,313 | 15,974 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (8) | |
Net cash used by investing activities | (8) | |
Cash Flows from Financing Activities: | ||
Repurchases of common stock | (114,699) | (169,144) |
Proceeds from exercises of stock options | 1,112 | 16,683 |
Due to affiliates | 97,274 | 136,495 |
Net cash used by financing activities | (16,313) | (15,966) |
Sally Holdings And Sally Capital | ||
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | (33,119) | (28,849) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 246,814 | 136,000 |
Repayments of long-term debt | (259,750) | (130,500) |
Debt issuance costs | (1,151) | |
Due to affiliates | 47,206 | (5,013) |
Net cash used by financing activities | 33,119 | 487 |
Net increase (decrease) in cash and cash equivalents | (28,362) | |
Cash and cash equivalents, beginning of period | 10 | 28,372 |
Cash and cash equivalents, end of period | 10 | 10 |
Guarantor Subsidiaries | ||
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | 197,800 | 171,472 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (32,092) | (37,174) |
Due from affiliates | (159,590) | (143,226) |
Net cash used by investing activities | (191,682) | (180,400) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 5 | |
Repayments of long-term debt | (2) | (9) |
Net cash used by financing activities | 3 | (9) |
Net increase (decrease) in cash and cash equivalents | 6,121 | (8,937) |
Cash and cash equivalents, beginning of period | 22,090 | 22,368 |
Cash and cash equivalents, end of period | 28,211 | 13,431 |
Non-Guarantor Subsidiaries | ||
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | (1,544) | 810 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (6,587) | (12,138) |
Acquisitions, net of cash acquired | (9,175) | |
Net cash used by investing activities | (15,762) | (12,138) |
Cash Flows from Financing Activities: | ||
Repayments of long-term debt | (390) | (335) |
Due to affiliates | 15,110 | 11,744 |
Net cash used by financing activities | 14,720 | 11,409 |
Effect of foreign exchange rate changes on cash and cash equivalents | 762 | (285) |
Net increase (decrease) in cash and cash equivalents | (1,824) | (204) |
Cash and cash equivalents, beginning of period | 41,659 | 35,882 |
Cash and cash equivalents, end of period | 39,835 | 35,678 |
Consolidating Eliminations | ||
Cash Flows from Investing Activities: | ||
Due from affiliates | 159,590 | 143,226 |
Net cash used by investing activities | 159,590 | 143,226 |
Cash Flows from Financing Activities: | ||
Due to affiliates | (159,590) | (143,226) |
Net cash used by financing activities | $ (159,590) | $ (143,226) |
Restructuring Plans (Details)
Restructuring Plans (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2017Office | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Apr. 30, 2018USD ($) | |
Changes in restructuring reserve | ||||||
Restructuring charges | $ 6,759 | $ 9,211 | $ 11,969 | $ 9,211 | ||
Corporate | ||||||
Changes in restructuring reserve | ||||||
Restructuring charges | 3,800 | |||||
Sally Beauty Supply | ||||||
Changes in restructuring reserve | ||||||
Restructuring charges | 8,100 | |||||
2017 Restructuring Plan | ||||||
Restructuring Plan | ||||||
Number of administrative offices closed | Office | 4 | |||||
Changes in restructuring reserve | ||||||
Restructuring reserve, beginning balance | 3,842 | |||||
Expenses Paid or Otherwise Settled | 2,300 | |||||
Adjustments | 312 | |||||
Restructuring reserve, ending balance | 1,230 | 1,230 | ||||
2017 Restructuring Plan | Workforce reductions | ||||||
Changes in restructuring reserve | ||||||
Restructuring reserve, beginning balance | 1,860 | |||||
Expenses Paid or Otherwise Settled | 1,221 | |||||
Adjustments | 312 | |||||
Restructuring reserve, ending balance | 327 | 327 | ||||
2017 Restructuring Plan | Facility closures | ||||||
Changes in restructuring reserve | ||||||
Restructuring reserve, beginning balance | 1,747 | |||||
Expenses Paid or Otherwise Settled | 844 | |||||
Restructuring reserve, ending balance | 903 | 903 | ||||
2017 Restructuring Plan | Other | ||||||
Changes in restructuring reserve | ||||||
Restructuring reserve, beginning balance | 235 | |||||
Expenses Paid or Otherwise Settled | 235 | |||||
2018 Restructuring Plan | ||||||
Changes in restructuring reserve | ||||||
Restructuring charges | 11,969 | |||||
Expenses Paid or Otherwise Settled | 11,656 | |||||
Restructuring reserve, ending balance | 313 | 313 | ||||
2018 Restructuring Plan | Minimum | Subsequent Event | ||||||
Changes in restructuring reserve | ||||||
Total estimated aggregate charges | $ 28,000 | |||||
2018 Restructuring Plan | Maximum | Subsequent Event | ||||||
Changes in restructuring reserve | ||||||
Total estimated aggregate charges | $ 30,000 | |||||
2018 Restructuring Plan | Workforce reductions | ||||||
Changes in restructuring reserve | ||||||
Restructuring charges | 6,272 | |||||
Expenses Paid or Otherwise Settled | 6,143 | |||||
Restructuring reserve, ending balance | 129 | 129 | ||||
2018 Restructuring Plan | Other | ||||||
Changes in restructuring reserve | ||||||
Restructuring charges | 2,806 | |||||
Expenses Paid or Otherwise Settled | 2,752 | |||||
Restructuring reserve, ending balance | 54 | 54 | ||||
2018 Restructuring Plan | Consulting | ||||||
Changes in restructuring reserve | ||||||
Restructuring charges | 2,891 | |||||
Expenses Paid or Otherwise Settled | 2,761 | |||||
Restructuring reserve, ending balance | $ 130 | $ 130 |