Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2018 | Jan. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Sally Beauty Holdings, Inc. | |
Entity Central Index Key | 1,368,458 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2018 | |
Trading Symbol | SBH | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 120,550,819 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 102,771 | $ 77,295 |
Trade accounts receivable, net | 43,649 | 48,417 |
Accounts receivable, other | 48,127 | 42,073 |
Inventory | 982,497 | 944,338 |
Other current assets | 40,819 | 42,960 |
Total current assets | 1,217,863 | 1,155,083 |
Property and equipment, net of accumulated depreciation of $624,012 at December 31, 2018 and $611,021 at September 30, 2018 | 303,157 | 308,357 |
Goodwill | 532,601 | 535,925 |
Intangible assets, excluding goodwill, net of accumulated amortization of $135,049 at December 31, 2018 and $132,724 at September 30, 2018 | 69,601 | 72,698 |
Other assets | 21,392 | 25,351 |
Total assets | 2,144,614 | 2,097,414 |
Current liabilities: | ||
Current maturities of long-term debt | 5,500 | 5,501 |
Accounts payable | 307,487 | 303,241 |
Accrued liabilities | 157,144 | 180,287 |
Income taxes payable | 14,580 | 2,144 |
Total current liabilities | 484,711 | 491,173 |
Long-term debt | 1,768,306 | 1,768,808 |
Other liabilities | 26,969 | 30,022 |
Deferred income tax liabilities, net | 79,359 | 75,967 |
Total liabilities | 2,359,345 | 2,365,970 |
Stockholders’ deficit: | ||
Common stock, $0.01 par value. Authorized 500,000 shares; 120,541 and 120,145 shares issued and 120,041 and 119,926 shares outstanding at December 31, 2018 and September 30, 2018, respectively | 1,200 | 1,199 |
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued | ||
Additional paid-in capital | 4,802 | |
Accumulated deficit | (114,037) | (179,764) |
Accumulated other comprehensive loss, net of tax | (106,696) | (89,991) |
Total stockholders’ deficit | (214,731) | (268,556) |
Total liabilities and stockholders’ (deficit) equity | $ 2,144,614 | $ 2,097,414 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Statement Of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation (in dollars) | $ 624,012 | $ 611,021 |
Intangible assets, excluding goodwill, accumulated amortization (in dollars) | $ 135,049 | $ 132,724 |
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 | 120,541,000 | 120,145,000 |
Common stock, shares outstanding | 120,041,000 | 119,926,000 |
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 | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 989,453 | $ 994,964 |
Cost of goods sold | 508,748 | 508,335 |
Gross profit | 480,705 | 486,629 |
Selling, general and administrative expenses | 366,987 | 371,286 |
Restructuring charges | 3,980 | 5,210 |
Operating earnings | 109,738 | 110,133 |
Interest expense | 24,489 | 24,016 |
Earnings before provision for income taxes | 85,249 | 86,117 |
Provision for income taxes | 19,522 | 2,853 |
Net earnings | $ 65,727 | $ 83,264 |
Earnings per share: | ||
Basic | $ 0.55 | $ 0.65 |
Diluted | $ 0.54 | $ 0.65 |
Weighted average shares: | ||
Basic | 119,989 | 127,784 |
Diluted | 120,979 | 128,645 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net earnings | $ 65,727 | $ 83,264 |
Other comprehensive loss: | ||
Foreign currency translation adjustments | (13,463) | (255) |
Interest rate caps, net of tax | (2,830) | (803) |
Foreign exchange contracts, net of tax | (412) | |
Other comprehensive loss, net of tax | (16,705) | (1,058) |
Total comprehensive income | $ 49,022 | $ 82,206 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows from Operating Activities: | ||
Net earnings | $ 65,727 | $ 83,264 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 26,506 | 27,090 |
Share-based compensation expense | 3,354 | 3,111 |
Amortization of deferred financing costs | 990 | 921 |
Deferred income taxes | 4,597 | (31,350) |
Changes in (exclusive of effects of acquisitions): | ||
Trade accounts receivable | 4,203 | (2,427) |
Accounts receivable, other | (6,379) | (2,008) |
Inventory | (45,924) | (8,055) |
Other current assets | 1,745 | 9,105 |
Other assets | (187) | (290) |
Accounts payable and accrued liabilities | (13,855) | 3,764 |
Income taxes payable | 12,406 | 10,069 |
Other liabilities | (2,927) | 11,010 |
Net cash provided by operating activities | 50,256 | 104,204 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (23,710) | (22,499) |
Acquisitions, net of cash acquired | (451) | (9,175) |
Net cash used by investing activities | (24,161) | (31,674) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 126,500 | 126,505 |
Repayments of long-term debt | (127,876) | (119,067) |
Payments for common stock repurchased | (64,612) | |
Proceeds from exercises of stock options | 1,449 | 275 |
Net cash used by financing activities | 73 | (56,899) |
Effect of foreign exchange rate changes on cash and cash equivalents | (692) | (78) |
Net increase (decrease) in cash and cash equivalents | 25,476 | 15,553 |
Cash and cash equivalents, beginning of period | 77,295 | 63,759 |
Cash and cash equivalents, end of period | 102,771 | 79,312 |
Supplemental Cash Flow Information: | ||
Interest paid | 40,630 | 36,331 |
Income taxes paid | 3,770 | 3,607 |
Capital expenditures incurred but not paid | $ 4,000 | $ 2,486 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance at Sep. 30, 2017 | $ (363,616) | $ 1,296 | $ (283,076) | $ (81,836) | |
Balance (in shares) at Sep. 30, 2017 | 129,585 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | 83,264 | 83,264 | |||
Other comprehensive loss | (1,058) | (1,058) | |||
Repurchases and cancellations of common stock | (64,612) | $ (39) | $ (3,386) | (61,187) | |
Repurchase and cancellations of common stock (in shares) | (3,848) | ||||
Share-based compensation | 3,111 | 3,111 | |||
Stock issued for stock options | 276 | $ 1 | 275 | ||
Stock issued for stock options (in shares) | 62 | ||||
Balance at Dec. 31, 2017 | (342,635) | $ 1,258 | (260,999) | (82,894) | |
Balance (in shares) at Dec. 31, 2017 | 125,799 | ||||
Balance at Sep. 30, 2018 | $ (268,556) | $ 1,199 | (179,764) | (89,991) | |
Balance (in shares) at Sep. 30, 2018 | 119,926 | 119,926 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | $ 65,727 | 65,727 | |||
Other comprehensive loss | (16,705) | (16,705) | |||
Share-based compensation | 3,354 | 3,354 | |||
Stock issued for stock options | 1,449 | $ 1 | 1,448 | ||
Stock issued for stock options (in shares) | 115 | ||||
Balance at Dec. 31, 2018 | $ (214,731) | $ 1,200 | $ 4,802 | $ (114,037) | $ (106,696) |
Balance (in shares) at Dec. 31, 2018 | 120,041 | 120,041 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. 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. Accordingly, 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 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, 2018. 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 December 31, 2018 and September 30, 2018, our consolidated results of operations, consolidated comprehensive income and our consolidated cash flows for the three months ended December 31, 2018 and 2017. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Dec. 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 | 3 Months Ended |
Dec. 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 May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In connection with the adoption of ASU No. 2014-09, we now present our sales returns allowance on a gross basis rather than a net liability basis. As such, we recognize a return asset from the right to recover merchandise from customers (included in other current assets) and a return liability from the amount to be returned to the customer (included in accrued liabilities) within our consolidated balance sheets. Additionally, we now recognize revenue for our gift cards not expected to be redeemed (“gift card breakage”) within revenue in our consolidated statements of earnings. The following tables set forth the impact of adopting this standard on our condensed consolidated balance sheets and consolidated statements of earnings as of and for the three months ended December 31, 2018 (in thousands): Effect of ASU No. 2014-09 Adoption on Condensed Consolidated Balance Sheet Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Other current assets $ 40,819 $ 38,180 $ 2,639 Accrued liabilities $ 157,144 $ 154,505 $ 2,639 Effect of ASU No. 2014-09 Adoption on Condensed Consolidated Statement of Earnings Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Net Sales $ 989,453 $ 989,378 $ 75 Gross Profit 480,705 480,630 75 Selling, general and administrative expenses $ 366,987 $ 366,912 $ 75 See note 4, Revenue Recognition Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | 4. Revenue Recognition Substantially all of our revenue is derived through the sale of merchandise. Revenue is recognized net of estimated sales returns and sales taxes. We estimate sales returns based on historical data. Additionally, we have assessed all revenue streams for principal versus agent considerations and have concluded we are the principal for all transactions. See Note 12, Business Segments Merchandise Revenues The majority of our revenue comes from the sale of products in our company-operated stores. These sales generally have one single performance obligation and the revenue is recognized at the point of sale. Discounts and incentives issued at the point of sale to entice a customer to a future purchase are treated as a separate performance obligation. As such, we allocate a portion of the revenue generated from the point of sale to each of the additional performance obligations separately using explicitly stated amounts or our best estimate using historical data. We also sell merchandise on our online platforms, to our franchisees and by using distributor sales consultants. These sales generally have one single performance obligation and revenue is recognized upon the shipment of the merchandise. Any shipping and handling fees charged to the customer are recognized as revenue, while any shipping and handling costs to get the merchandise shipped is recognized in cost of goods sold. We do extend credit to certain customers, primarily salon professionals, which generally have 30 day payment terms. Based on the nature of theses receivables, no significant financing component exists. Gift Cards The revenue from the sale of our gift cards is recognized at the time the gift card is used to purchase merchandise, which is generally within a year. Our gift cards do not carry expiration dates or impose post-sale fees. Based on historical experience, a certain amount of our gift cards will not be redeemed, also referred to as “gift card breakage.” We recognize revenue related to gift card breakage within revenue in our consolidated statements of earnings over time proportionately to historical redemption patterns. The gift cards are issued and represent liabilities of either of our operating entities, Sally Beauty Supply LLC or Beauty Systems Group LLC, which are both limited liability companies formed in the state of Virginia. Customer Loyalty Rewards We recently launched our new Sally Beauty Rewards Loyalty Program nationwide during the first quarter of fiscal year 2019 to the U.S. and Canada, which enables customers to earn points based on their status for every dollar spent on merchandise purchased in our Sally Beauty Supply (“SBS”) stores and through our sallybeauty.com sallybeauty.com The following table shows the amount of our gift card and rewards loyalty program liabilities included in accrued liabilities within our condensed consolidated balance sheets as of December 31, 2018 and September 30, 2018 (in thousands): December 31, 2018 September 30, 2018 Gift cards $ 5,766 $ 4,144 Rewards loyalty program 7,246 1,165 Total liability $ 13,012 $ 5,309 As of December 31, 2018 and 2017, we did not have any contract assets. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements Fair value on recurring basis Consistent with the three-level hierarchy defined in ASC Topic 820, Fair Value Measurement As of December 31, 2018 As of September 30, 2018 Assets Foreign exchange contracts Level 2 $ 24 $ — Interest rate caps Level 2 4,551 8,367 Total assets $ 4,575 $ 8,367 Liabilities Foreign exchange contracts Level 2 $ 583 $ — Other fair value disclosures As of December 31, 2018 As of September 30, 2018 Carrying Value Fair Value Carrying Value Fair Value Long-term debt Senior notes Level 1 $ 950,000 $ 882,240 $ 950,000 $ 911,490 Other long-term debt Level 2 843,995 794,054 845,383 824,951 Total debt $ 1,793,995 $ 1,676,294 $ 1,795,383 $ 1,736,441 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Dec. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Accumulated Other Comprehensive Loss | 6. Accumulated Other Comprehensive Loss The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Caps Foreign Exchange Contracts Total Balance at September 30, 2018 $ (91,356 ) $ 1,365 $ — $ (89,991 ) Other comprehensive loss before reclassification, net of tax (13,463 ) (2,839 ) (412 ) (16,714 ) Reclassification to net earnings, net of tax — 9 — 9 Balance at December 31, 2018 $ (104,819 ) $ (1,465 ) $ (412 ) $ (106,696 ) The tax impact for the changes in other comprehensive loss and the reclassifications to net earnings were not material. |
Weighted Average Shares
Weighted Average Shares | 3 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Weighted Average Shares | 7. Weighted Average Shares The following table sets forth the computations of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended December 31, 2018 2017 Weighted average basic shares 119,989 127,784 Dilutive securities: Stock option and stock award programs 990 861 Weighted average diluted shares 120,979 128,645 For the three months ended December 31, 2018, options to purchase 5.7 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 months ended December 31, 2017, options to purchase 5.8 million shares of our common stock were outstanding but not included in the computations of diluted earnings per share, since these options were anti-dilutive. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Payments | 8. 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, 2018 349 $ 20.88 1.3 Granted — — Vested (23 ) 23.45 Forfeited (66 ) 23.10 Unvested at December 31, 2018 260 $ 20.10 1.4 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, 2018 5,405 $ 23.04 5.4 $ 3,161 Granted 948 18.14 Exercised (98 ) 15.90 Forfeited or expired (350 ) 25.24 Outstanding at December 31, 2018 5,905 $ 22.24 6.3 $ 1,527 Exercisable at December 31, 2018 3,870 $ 23.93 4.8 $ 1,336 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, 2018 219 $ 16.98 2.1 Granted 287 18.14 Vested — — Forfeited (6 ) 17.63 Unvested at December 31, 2018 500 $ 17.66 2.3 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, 2018 — $ — — Granted 88 18.14 Vested — — Forfeited — — Unvested at December 31, 2018 88 $ 18.14 0.7 |
Short-term Borrowings and Long-
Short-term Borrowings and Long-term Debt | 3 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Short-term Borrowings and Long-term Debt | 9. Short-term Borrowings and Long-term Debt At December 31, 2018, we had $481.4 million available for borrowing under the ABL facility, including the Canadian sub-facility. At December 31, 2018, we were in compliance with the agreements and instruments governing our debt, including our financial covenants. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 10. Derivative Instruments and Hedging Activities During the three months ended December 31, 2018, we did not purchase or hold any derivative instruments for trading or speculative purposes. Designated Cash Flow Hedges Foreign Currency Forwards In December 2018, we entered into foreign currency forwards to mitigate the exposure to exchange rate changes on inventory purchases in USD by our foreign subsidiaries. At December 31, 2018, the notional amount we held through these forwards, based upon exchange rates at December 31, 2018, was as follows (in thousands): Notional Currency Notional Amount EUR $ 16,085 MXP 14,342 GBP 6,642 CAD 3,748 Total $ 40,817 We record quarterly, net of income tax, the changes in fair value related to the foreign currency forwards into AOCL. As the forwards are exercised, the realized value will be recognized into cost of goods sold based on inventory turns. Based on December 31, 2018 valuations and exchange rates, we expect to reclassify approximately $0.5 million into cost of goods sold over the next 12 months. Interest Rate Caps 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 are comprised of individual caplets that expire ratably through June 30, 2023 and are designated as cash flow hedges. Accordingly, changes in fair value of the interest rate caps are recorded quarterly, net of income tax, and are included in AOCL. Over the next 12 months, we expect to reclassify approximately $0.3 million into interest expense, which represents the original value of the expiring caplets. The table below presents the fair value of our derivative financial instruments (in thousands): Asset Derivatives Liability Derivatives Classification December 31, 2018 September 30, 2018 Classification December 31, 2018 September 30, 2018 Derivatives designated as hedging instruments: Interest rate caps Other assets $ 4,551 $ 8,367 N/A $ — $ — Foreign exchange contracts Other current assets 24 — Accrued liabilities 583 — $ 4,575 $ 8,367 $ 583 $ — The effects of our derivative financial instruments on our condensed consolidated statements of earnings were not material for the three months ended December 31, 2018 and 2017. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes Our effective tax rate for the three months ended December 31, 2018 and 2017 was 22.9% and 3.3%, respectively. For the three months ended December 31, 2018, our effective tax rate was favorably impacted by lower federal statutory rates when compared to the prior year and a $3.0 million adjustment to our previously recorded transition tax on unrepatriated foreign earnings recorded as a result of the Tax Cut and Jobs Act (“U.S. Tax Reform”). For the three months ended December 31, 2017, our effective tax rate was favorably impacted by a net benefit of $22.2 million recorded as a result of the U.S. Tax Reform. For the fiscal year 2019, our U.S. federal statutory tax rate will be 21.0% compared to 24.5% for the prior fiscal year. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) which 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. As of December 31, 2018, we have completed our analysis on our provisional calculations within the measurement period provided by SAB 118. As a result, during the three months ended December 31, 2018, we identified certain immaterial adjustments to our provisional calculations, including a benefit of $3.0 million related to the In addition, the U.S. Treasury Department has recently released proposed regulations covering the one-time transition tax on unrepatriated foreign earnings, which was enacted as part of the U.S. Tax Reform. Included within the proposed regulations, certain guidance is inconsistent with our interpretation of the enacted tax law. This proposed regulation is not authoritative and is subject to change in the regulatory review process. However, if the proposed regulation is included in the final regulations as drafted, we may be required to reverse $2.5 million of benefit in the quarter the regulations become final. Beginning in our first quarter of fiscal year 2019, we are subject to taxation on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. We have made the policy election to record this tax as a period cost at the time it is incurred. The impact from GILTI was immaterial for the three months ended December 31, 2018 and is expected to be immaterial for the full fiscal year 2019. |
Business Segments
Business Segments | 3 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segments | 12. Business Segments Segment data for the three months ended December 31, 2018 and 2017 is as follows (in thousands): Three Months Ended December 31, 2018 2017 Net sales: SBS $ 580,608 $ 585,574 Beauty Systems Group ("BSG") 408,845 409,390 Total $ 989,453 $ 994,964 Earnings before provision for income taxes: Segment operating earnings: SBS $ 89,991 $ 86,594 BSG 62,330 64,565 Segment operating earnings 152,321 151,159 Unallocated expenses (38,603 ) (35,816 ) Restructuring charges (3,980 ) (5,210 ) Consolidated operating earnings 109,738 110,133 Interest expense (24,489 ) (24,016 ) Earnings before provision for income taxes $ 85,249 $ 86,117 Sales between segments, which are eliminated in consolidation, were not material during the three months ended December 31, 2018 and 2017. Disaggregation of net sales by segment SBS Three Months Ended December 31, 2018 2017 Hair color 27.5 % 26.4 % Hair care 19.9 % 20.6 % Styling tools 15.7 % 15.3 % Skin and nail care 15.1 % 14.9 % Salon supplies and accessories 7.1 % 7.1 % Multicultural products 6.5 % 6.7 % Other Beauty items 8.2 % 9.0 % Total 100.0 % 100.0 % BSG Three Months Ended December 31, 2018 2017 Hair color 38.0 % 36.8 % Hair care 33.4 % 33.6 % Skin and nail care 8.1 % 8.9 % Styling tools 3.9 % 4.7 % Other beauty items 5.8 % 5.8 % Promotional items 10.8 % 10.2 % Total 100.0 % 100.0 % |
Parent, Issuers, Guarantor and
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidating Financial Statements | 3 Months Ended |
Dec. 31, 2018 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidating Financial Statements | 13. Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidating Financial Statements Condensed Consolidating Balance Sheet December 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 $ 51,880 $ 50,881 $ — $ 102,771 Trade and other accounts receivable, net — — 60,558 31,218 — 91,776 Due from affiliates — — 2,625,695 — (2,625,695 ) — Inventory — — 751,010 231,487 — 982,497 Other current assets 699 329 27,967 11,824 — 40,819 Property and equipment, net 7 — 233,513 69,637 — 303,157 Investment in subsidiaries 1,420,037 4,117,044 374,477 — (5,911,558 ) — Goodwill and other intangible assets, net — — 457,236 144,966 — 602,202 Other assets 1,325 6,321 (4,630 ) 18,376 — 21,392 Total assets $ 1,422,068 $ 4,123,704 $ 4,577,706 $ 558,389 $ (8,537,253 ) $ 2,144,614 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 46 $ — $ 251,245 $ 56,196 $ — $ 307,487 Due to affiliates 1,615,667 924,250 — 85,778 (2,625,695 ) — Accrued liabilities 301 6,044 118,244 32,555 — 157,144 Income taxes payable 13,230 1,519 — (169 ) — 14,580 Long-term debt — 1,772,936 — 870 — 1,773,806 Other liabilities 7,629 — 15,355 3,985 — 26,969 Deferred income tax liabilities, net (74 ) (1,082 ) 75,818 4,697 — 79,359 Total liabilities 1,636,799 2,703,667 460,662 183,912 (2,625,695 ) 2,359,345 Total stockholders’ (deficit) equity (214,731 ) 1,420,037 4,117,044 374,477 (5,911,558 ) (214,731 ) Total liabilities and stockholders’ (deficit) equity $ 1,422,068 $ 4,123,704 $ 4,577,706 $ 558,389 $ (8,537,253 ) $ 2,144,614 Condensed Consolidating Balance Sheet September 30, 2018 (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 $ 29,050 $ 48,235 $ — $ 77,295 Trade and other accounts receivable, net 4 — 53,295 37,191 — 90,490 Due from affiliates — — 2,598,681 — (2,598,681 ) — Inventory — — 714,000 230,338 — 944,338 Other current assets 2,010 111 27,422 13,417 — 42,960 Property and equipment, net 8 — 232,941 75,408 — 308,357 Investment in subsidiaries 1,368,927 4,044,669 380,166 — (5,793,762 ) — Goodwill and other intangible assets, net — — 459,348 149,275 — 608,623 Other assets 1,325 10,242 (4,797 ) 18,581 — 25,351 Total assets $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 38 $ - $ 233,936 $ 69,267 $ — $ 303,241 Due to affiliates 1,629,411 888,141 — 81,129 (2,598,681 ) — Accrued liabilities 234 23,019 125,179 31,855 — 180,287 Income taxes payable 585 1,519 — 40 — 2,144 Long-term debt — 1,773,426 1 882 — 1,774,309 Other liabilities 10,562 — 15,250 4,210 — 30,022 Deferred income tax liabilities, net — — 71,071 4,896 — 75,967 Total liabilities 1,640,830 2,686,105 445,437 192,279 (2,598,681 ) 2,365,970 Total stockholders’ (deficit) equity (268,556 ) 1,368,927 4,044,669 380,166 (5,793,762 ) (268,556 ) Total liabilities and stockholders’ (deficit) equity $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Condensed Consolidating Statement of Earnings and Comprehensive Income Three Months Ended December 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 $ — $ — $ 793,530 $ 195,923 $ — $ 989,453 Related party sales — — 669 — (669 ) — Cost of products sold and distribution expenses — — 404,040 105,377 (669 ) 508,748 Gross profit — — 390,159 90,546 — 480,705 Selling, general and administrative expenses 2,809 168 286,216 77,794 — 366,987 Restructuring charges — — 3,980 — — 3,980 Operating earnings (loss) (2,809 ) (168 ) 99,963 12,752 — 109,738 Interest expense (income) — 24,552 (1 ) (62 ) — 24,489 Earnings (loss) before provision for income taxes (2,809 ) (24,720 ) 99,964 12,814 — 85,249 Provision (benefit) for income taxes (721 ) (6,345 ) 25,683 905 — 19,522 Equity in earnings of subsidiaries, net of tax 67,815 86,190 11,909 — (165,914 ) — Net earnings 65,727 67,815 86,190 11,909 (165,914 ) 65,727 Other comprehensive loss, net of tax — (2,830 ) — (13,875 ) — (16,705 ) Total comprehensive income (loss) $ 65,727 $ 64,985 $ 86,190 $ (1,966 ) $ (165,914 ) $ 49,022 Condensed Consolidating Statement of Earnings and Comprehensive Income Three Months Ended December 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 $ — $ — $ 796,532 $ 198,432 $ — $ 994,964 Related party sales — — 446 — (446 ) — Cost of products sold and distribution expenses — — 403,810 104,971 (446 ) 508,335 Gross profit — — 393,168 93,461 — 486,629 Selling, general and administrative expenses 2,606 179 284,467 84,034 — 371,286 Restructuring charges — — 5,210 — — 5,210 Operating earnings (loss) (2,606 ) (179 ) 103,491 9,427 — 110,133 Interest expense (income) — 24,014 — 2 — 24,016 Earnings (loss) before provision for income taxes (2,606 ) (24,193 ) 103,491 9,425 — 86,117 Provision (benefit) for income taxes (251 ) (6,925 ) (7,915 ) 17,944 2,853 Equity in earnings of subsidiaries, net of tax 85,619 102,887 (8,519 ) — (179,987 ) — Net earnings (loss) 83,264 85,619 102,887 (8,519 ) (179,987 ) 83,264 Other comprehensive loss, net of tax — (803 ) — (255 ) (1,058 ) Total comprehensive income (loss) $ 83,264 $ 84,816 $ 102,887 $ (8,774 ) $ (179,987 ) $ 82,206 Condensed Consolidating Statement of Cash Flows Three Months Ended December 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 $ 12,295 $ (34,734 ) $ 71,284 $ 1,411 $ — $ 50,256 Cash Flows from Investing Activities: Payments for property and equipment, net — — (21,439 ) (2,271 ) — (23,710 ) Acquisitions, net of cash acquired — — — (451 ) — (451 ) Due from affiliates — — (27,014 ) — 27,014 — Net cash used by investing activities — — (48,453 ) (2,722 ) 27,014 (24,161 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 126,500 — — — 126,500 Repayments of long-term debt — (127,875 ) (1 ) — — (127,876 ) Repurchases of common stock — — — — — — Proceeds from exercises of stock options 1,449 — — — — 1,449 Due to affiliates (13,744 ) 36,109 — 4,649 (27,014 ) — Net cash provided (used) by financing activities (12,295 ) 34,734 (1 ) 4,649 (27,014 ) 73 Effect of foreign exchange rate changes on cash and cash equivalents — — — (692 ) — (692 ) Net increase in cash and cash equivalents — — 22,830 2,646 — 25,476 Cash and cash equivalents, beginning of period — 10 29,050 48,235 — 77,295 Cash and cash equivalents, end of period $ — $ 10 $ 51,880 $ 50,881 $ — $ 102,771 Condensed Consolidating Statement of Cash Flows Three Months Ended December 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 $ 32,788 $ (30,211 ) $ 100,319 $ 1,308 $ — $ 104,204 Cash Flows from Investing Activities: Payments for property and equipment, net — — (19,664 ) (2,835 ) — (22,499 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (70,909 ) — 70,909 — Net cash used by investing activities — — (90,573 ) (12,010 ) 70,909 (31,674 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 126,500 5 — — 126,505 Repayments of long-term debt — (118,875 ) (2 ) (190 ) — (119,067 ) Repurchases of common stock (64,612 ) — — — — (64,612 ) Proceeds from exercises of stock options 275 — — — — 275 Due to affiliates 31,549 22,586 — 16,774 (70,909 ) — Net cash provided (used) by financing activities (32,788 ) 30,211 3 16,584 (70,909 ) (56,899 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (78 ) — (78 ) Net increase in cash and cash equivalents — — 9,749 5,804 — 15,553 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 31,839 $ 47,463 $ — $ 79,312 |
Restructuring Plans
Restructuring Plans | 3 Months Ended |
Dec. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Plans | 14. Restructuring Plan 2018 Restructuring Plan In November 2017, our Board of Directors 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. In April 2018, we announced an expansion of the 2018 Restructuring Plan that contained cost reduction initiatives designed to help fund important long-term growth initiatives. The expansion to the 2018 Restructuring Plan included 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. As of December 31, 2018, we do not anticipate any additional material costs for the 2018 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, 2018 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at December 31, 2018 Workforce reductions $ 3,444 $ 643 $ 4,087 $ — Consulting 3,087 2,502 3,384 2,205 Other 2,266 835 2,917 184 Total $ 8,797 $ 3,980 $ 10,388 $ — $ 2,389 Expenses incurred in the three months ended December 31, 2018 represent costs incurred by SBS ($1.1 million) and corporate ($2.8 million). |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies We are involved, from time to time, in various claims and lawsuits incidental to the conduct of our business in the ordinary course. We carry insurance coverage in such amounts in excess of our self-insured retention as we believe to be reasonable under the circumstances and that may or may not cover any or all of our liabilities in respect of these matters. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, cash flows or results of operations. Data Security Incidents As previously disclosed, we experienced data security incidents during the fiscal years 2014 and 2015 (together, the “data security incidents”). The data security incidents involved the unauthorized installation of malicious software (“malware”) on our information technology systems, including our point-of-sale systems that may have placed at risk certain payment card data for some transactions. The costs that we have incurred to date in connection with the data security incidents include assessments by payment card networks, professional advisory fees and legal fees relating to investigating and remediating the data security incidents. During the fiscal year ended September 30, 2018, we received an assessment from a payment card network in connection with the data security incidents. The assessment is based on the network’s claims against the Company’s acquiring banks for costs that it asserts its issuing banks incurred in connection with the data security incidents, including incremental counterfeit fraud losses and non-ordinary course operating expenses, such as card reissuance costs. Our estimated probable loss related to the claims made by payment card networks in connection with the data security incidents is based on currently available information. We dispute the validity of the payment card network’s claims and intend to contest them vigorously. We may incur additional costs and expenses related to the data security incidents in future periods. These costs and expenses may result from liabilities related to (i) claims by payment card networks, (ii) governmental or third party investigations, proceedings or litigation, (iii) legal and other fees necessary to defend against any potential liabilities or claims, and (iv) further investigation and remediation costs. As of December 31, 2018, the scope of these additional costs and expenses, or a range thereof, beyond amounts management has determined to be probable, cannot be reasonably estimated and, while we do not anticipate that 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. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | 16. Subsequent Event On February 5, 2019, we announced that we will be closing distribution facilities in Denton, Texas, and Anchorage, Alaska, by the end of the second quarter and will be closing the distribution center in Lincoln, Nebraska, by the end of third quarter. Simultaneously, we announced that we are searching for a 500,000 square foot location within Oklahoma, Louisiana or Texas for construction of a new automated and concentrated distribution center which will service SBS stores and e-commerce sales as well as BSG stores, full service sales and e-commerce sales. Additionally, we will also be upgrading our European distribution operations in Ghent, Belgium. |
Accounting Changes and Recent_2
Accounting Changes and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Dec. 31, 2018 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes | Accounting Changes In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In connection with the adoption of ASU No. 2014-09, we now present our sales returns allowance on a gross basis rather than a net liability basis. As such, we recognize a return asset from the right to recover merchandise from customers (included in other current assets) and a return liability from the amount to be returned to the customer (included in accrued liabilities) within our consolidated balance sheets. Additionally, we now recognize revenue for our gift cards not expected to be redeemed (“gift card breakage”) within revenue in our consolidated statements of earnings. The following tables set forth the impact of adopting this standard on our condensed consolidated balance sheets and consolidated statements of earnings as of and for the three months ended December 31, 2018 (in thousands): Effect of ASU No. 2014-09 Adoption on Condensed Consolidated Balance Sheet Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Other current assets $ 40,819 $ 38,180 $ 2,639 Accrued liabilities $ 157,144 $ 154,505 $ 2,639 Effect of ASU No. 2014-09 Adoption on Condensed Consolidated Statement of Earnings Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Net Sales $ 989,453 $ 989,378 $ 75 Gross Profit 480,705 480,630 75 Selling, general and administrative expenses $ 366,987 $ 366,912 $ 75 See note 4, Revenue Recognition |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases |
Accounting Changes and Recent_3
Accounting Changes and Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
ASU 2014-09 | |
Recent Accounting Pronouncements | |
Schedule of Impact of Adopting ASU No. 2014-09 on Condensed Consolidated Balance Sheets and Consolidated Statements of Earnings | The following tables set forth the impact of adopting this standard on our condensed consolidated balance sheets and consolidated statements of earnings as of and for the three months ended December 31, 2018 (in thousands): Effect of ASU No. 2014-09 Adoption on Condensed Consolidated Balance Sheet Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Other current assets $ 40,819 $ 38,180 $ 2,639 Accrued liabilities $ 157,144 $ 154,505 $ 2,639 Effect of ASU No. 2014-09 Adoption on Condensed Consolidated Statement of Earnings Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Net Sales $ 989,453 $ 989,378 $ 75 Gross Profit 480,705 480,630 75 Selling, general and administrative expenses $ 366,987 $ 366,912 $ 75 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Gift Card and Rewards Loyalty Program Liabilities | The following table shows the amount of our gift card and rewards loyalty program liabilities included in accrued liabilities within our condensed consolidated balance sheets as of December 31, 2018 and September 30, 2018 (in thousands): December 31, 2018 September 30, 2018 Gift cards $ 5,766 $ 4,144 Rewards loyalty program 7,246 1,165 Total liability $ 13,012 $ 5,309 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities by fair value hierarchy | Fair value on recurring basis Consistent with the three-level hierarchy defined in ASC Topic 820, Fair Value Measurement As of December 31, 2018 As of September 30, 2018 Assets Foreign exchange contracts Level 2 $ 24 $ — Interest rate caps Level 2 4,551 8,367 Total assets $ 4,575 $ 8,367 Liabilities Foreign exchange contracts Level 2 $ 583 $ — Other fair value disclosures As of December 31, 2018 As of September 30, 2018 Carrying Value Fair Value Carrying Value Fair Value Long-term debt Senior notes Level 1 $ 950,000 $ 882,240 $ 950,000 $ 911,490 Other long-term debt Level 2 843,995 794,054 845,383 824,951 Total debt $ 1,793,995 $ 1,676,294 $ 1,795,383 $ 1,736,441 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Dec. 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 Foreign Exchange Contracts Total Balance at September 30, 2018 $ (91,356 ) $ 1,365 $ — $ (89,991 ) Other comprehensive loss before reclassification, net of tax (13,463 ) (2,839 ) (412 ) (16,714 ) Reclassification to net earnings, net of tax — 9 — 9 Balance at December 31, 2018 $ (104,819 ) $ (1,465 ) $ (412 ) $ (106,696 ) |
Weighted Average Shares (Tables
Weighted Average Shares (Tables) | 3 Months Ended |
Dec. 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 December 31, 2018 2017 Weighted average basic shares 119,989 127,784 Dilutive securities: Stock option and stock award programs 990 861 Weighted average diluted shares 120,979 128,645 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 3 Months Ended |
Dec. 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, 2018 349 $ 20.88 1.3 Granted — — Vested (23 ) 23.45 Forfeited (66 ) 23.10 Unvested at December 31, 2018 260 $ 20.10 1.4 |
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, 2018 5,405 $ 23.04 5.4 $ 3,161 Granted 948 18.14 Exercised (98 ) 15.90 Forfeited or expired (350 ) 25.24 Outstanding at December 31, 2018 5,905 $ 22.24 6.3 $ 1,527 Exercisable at December 31, 2018 3,870 $ 23.93 4.8 $ 1,336 |
Restricted Stock Awards | |
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, 2018 219 $ 16.98 2.1 Granted 287 18.14 Vested — — Forfeited (6 ) 17.63 Unvested at December 31, 2018 500 $ 17.66 2.3 |
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, 2018 — $ — — Granted 88 18.14 Vested — — Forfeited — — Unvested at December 31, 2018 88 $ 18.14 0.7 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Schedule of fair value of derivative financial instruments | The table below presents the fair value of our derivative financial instruments (in thousands): Asset Derivatives Liability Derivatives Classification December 31, 2018 September 30, 2018 Classification December 31, 2018 September 30, 2018 Derivatives designated as hedging instruments: Interest rate caps Other assets $ 4,551 $ 8,367 N/A $ — $ — Foreign exchange contracts Other current assets 24 — Accrued liabilities 583 — $ 4,575 $ 8,367 $ 583 $ — |
Foreign Currency Forwards | |
Schedule of notional amount held through foreign currency forwards, based upon exchange rates | At December 31, 2018, the notional amount we held through these forwards, based upon exchange rates at December 31, 2018, was as follows (in thousands): Notional Currency Notional Amount EUR $ 16,085 MXP 14,342 GBP 6,642 CAD 3,748 Total $ 40,817 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment data | Segment data for the three months ended December 31, 2018 and 2017 is as follows (in thousands): Three Months Ended December 31, 2018 2017 Net sales: SBS $ 580,608 $ 585,574 Beauty Systems Group ("BSG") 408,845 409,390 Total $ 989,453 $ 994,964 Earnings before provision for income taxes: Segment operating earnings: SBS $ 89,991 $ 86,594 BSG 62,330 64,565 Segment operating earnings 152,321 151,159 Unallocated expenses (38,603 ) (35,816 ) Restructuring charges (3,980 ) (5,210 ) Consolidated operating earnings 109,738 110,133 Interest expense (24,489 ) (24,016 ) Earnings before provision for income taxes $ 85,249 $ 86,117 |
Schedule of disaggregation of net sales by segment | Disaggregation of net sales by segment SBS Three Months Ended December 31, 2018 2017 Hair color 27.5 % 26.4 % Hair care 19.9 % 20.6 % Styling tools 15.7 % 15.3 % Skin and nail care 15.1 % 14.9 % Salon supplies and accessories 7.1 % 7.1 % Multicultural products 6.5 % 6.7 % Other Beauty items 8.2 % 9.0 % Total 100.0 % 100.0 % BSG Three Months Ended December 31, 2018 2017 Hair color 38.0 % 36.8 % Hair care 33.4 % 33.6 % Skin and nail care 8.1 % 8.9 % Styling tools 3.9 % 4.7 % Other beauty items 5.8 % 5.8 % Promotional items 10.8 % 10.2 % Total 100.0 % 100.0 % |
Parent, Issuers, Guarantor an_2
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidating Financial Statements (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet December 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 $ 51,880 $ 50,881 $ — $ 102,771 Trade and other accounts receivable, net — — 60,558 31,218 — 91,776 Due from affiliates — — 2,625,695 — (2,625,695 ) — Inventory — — 751,010 231,487 — 982,497 Other current assets 699 329 27,967 11,824 — 40,819 Property and equipment, net 7 — 233,513 69,637 — 303,157 Investment in subsidiaries 1,420,037 4,117,044 374,477 — (5,911,558 ) — Goodwill and other intangible assets, net — — 457,236 144,966 — 602,202 Other assets 1,325 6,321 (4,630 ) 18,376 — 21,392 Total assets $ 1,422,068 $ 4,123,704 $ 4,577,706 $ 558,389 $ (8,537,253 ) $ 2,144,614 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 46 $ — $ 251,245 $ 56,196 $ — $ 307,487 Due to affiliates 1,615,667 924,250 — 85,778 (2,625,695 ) — Accrued liabilities 301 6,044 118,244 32,555 — 157,144 Income taxes payable 13,230 1,519 — (169 ) — 14,580 Long-term debt — 1,772,936 — 870 — 1,773,806 Other liabilities 7,629 — 15,355 3,985 — 26,969 Deferred income tax liabilities, net (74 ) (1,082 ) 75,818 4,697 — 79,359 Total liabilities 1,636,799 2,703,667 460,662 183,912 (2,625,695 ) 2,359,345 Total stockholders’ (deficit) equity (214,731 ) 1,420,037 4,117,044 374,477 (5,911,558 ) (214,731 ) Total liabilities and stockholders’ (deficit) equity $ 1,422,068 $ 4,123,704 $ 4,577,706 $ 558,389 $ (8,537,253 ) $ 2,144,614 Condensed Consolidating Balance Sheet September 30, 2018 (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 $ 29,050 $ 48,235 $ — $ 77,295 Trade and other accounts receivable, net 4 — 53,295 37,191 — 90,490 Due from affiliates — — 2,598,681 — (2,598,681 ) — Inventory — — 714,000 230,338 — 944,338 Other current assets 2,010 111 27,422 13,417 — 42,960 Property and equipment, net 8 — 232,941 75,408 — 308,357 Investment in subsidiaries 1,368,927 4,044,669 380,166 — (5,793,762 ) — Goodwill and other intangible assets, net — — 459,348 149,275 — 608,623 Other assets 1,325 10,242 (4,797 ) 18,581 — 25,351 Total assets $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 38 $ - $ 233,936 $ 69,267 $ — $ 303,241 Due to affiliates 1,629,411 888,141 — 81,129 (2,598,681 ) — Accrued liabilities 234 23,019 125,179 31,855 — 180,287 Income taxes payable 585 1,519 — 40 — 2,144 Long-term debt — 1,773,426 1 882 — 1,774,309 Other liabilities 10,562 — 15,250 4,210 — 30,022 Deferred income tax liabilities, net — — 71,071 4,896 — 75,967 Total liabilities 1,640,830 2,686,105 445,437 192,279 (2,598,681 ) 2,365,970 Total stockholders’ (deficit) equity (268,556 ) 1,368,927 4,044,669 380,166 (5,793,762 ) (268,556 ) Total liabilities and stockholders’ (deficit) equity $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 |
Schedule of Condensed Consolidating Statement of Earnings and Comprehensive Income | Condensed Consolidating Statement of Earnings and Comprehensive Income Three Months Ended December 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 $ — $ — $ 793,530 $ 195,923 $ — $ 989,453 Related party sales — — 669 — (669 ) — Cost of products sold and distribution expenses — — 404,040 105,377 (669 ) 508,748 Gross profit — — 390,159 90,546 — 480,705 Selling, general and administrative expenses 2,809 168 286,216 77,794 — 366,987 Restructuring charges — — 3,980 — — 3,980 Operating earnings (loss) (2,809 ) (168 ) 99,963 12,752 — 109,738 Interest expense (income) — 24,552 (1 ) (62 ) — 24,489 Earnings (loss) before provision for income taxes (2,809 ) (24,720 ) 99,964 12,814 — 85,249 Provision (benefit) for income taxes (721 ) (6,345 ) 25,683 905 — 19,522 Equity in earnings of subsidiaries, net of tax 67,815 86,190 11,909 — (165,914 ) — Net earnings 65,727 67,815 86,190 11,909 (165,914 ) 65,727 Other comprehensive loss, net of tax — (2,830 ) — (13,875 ) — (16,705 ) Total comprehensive income (loss) $ 65,727 $ 64,985 $ 86,190 $ (1,966 ) $ (165,914 ) $ 49,022 Condensed Consolidating Statement of Earnings and Comprehensive Income Three Months Ended December 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 $ — $ — $ 796,532 $ 198,432 $ — $ 994,964 Related party sales — — 446 — (446 ) — Cost of products sold and distribution expenses — — 403,810 104,971 (446 ) 508,335 Gross profit — — 393,168 93,461 — 486,629 Selling, general and administrative expenses 2,606 179 284,467 84,034 — 371,286 Restructuring charges — — 5,210 — — 5,210 Operating earnings (loss) (2,606 ) (179 ) 103,491 9,427 — 110,133 Interest expense (income) — 24,014 — 2 — 24,016 Earnings (loss) before provision for income taxes (2,606 ) (24,193 ) 103,491 9,425 — 86,117 Provision (benefit) for income taxes (251 ) (6,925 ) (7,915 ) 17,944 2,853 Equity in earnings of subsidiaries, net of tax 85,619 102,887 (8,519 ) — (179,987 ) — Net earnings (loss) 83,264 85,619 102,887 (8,519 ) (179,987 ) 83,264 Other comprehensive loss, net of tax — (803 ) — (255 ) (1,058 ) Total comprehensive income (loss) $ 83,264 $ 84,816 $ 102,887 $ (8,774 ) $ (179,987 ) $ 82,206 |
Schedule of Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows Three Months Ended December 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 $ 12,295 $ (34,734 ) $ 71,284 $ 1,411 $ — $ 50,256 Cash Flows from Investing Activities: Payments for property and equipment, net — — (21,439 ) (2,271 ) — (23,710 ) Acquisitions, net of cash acquired — — — (451 ) — (451 ) Due from affiliates — — (27,014 ) — 27,014 — Net cash used by investing activities — — (48,453 ) (2,722 ) 27,014 (24,161 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 126,500 — — — 126,500 Repayments of long-term debt — (127,875 ) (1 ) — — (127,876 ) Repurchases of common stock — — — — — — Proceeds from exercises of stock options 1,449 — — — — 1,449 Due to affiliates (13,744 ) 36,109 — 4,649 (27,014 ) — Net cash provided (used) by financing activities (12,295 ) 34,734 (1 ) 4,649 (27,014 ) 73 Effect of foreign exchange rate changes on cash and cash equivalents — — — (692 ) — (692 ) Net increase in cash and cash equivalents — — 22,830 2,646 — 25,476 Cash and cash equivalents, beginning of period — 10 29,050 48,235 — 77,295 Cash and cash equivalents, end of period $ — $ 10 $ 51,880 $ 50,881 $ — $ 102,771 Condensed Consolidating Statement of Cash Flows Three Months Ended December 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 $ 32,788 $ (30,211 ) $ 100,319 $ 1,308 $ — $ 104,204 Cash Flows from Investing Activities: Payments for property and equipment, net — — (19,664 ) (2,835 ) — (22,499 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (70,909 ) — 70,909 — Net cash used by investing activities — — (90,573 ) (12,010 ) 70,909 (31,674 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 126,500 5 — — 126,505 Repayments of long-term debt — (118,875 ) (2 ) (190 ) — (119,067 ) Repurchases of common stock (64,612 ) — — — — (64,612 ) Proceeds from exercises of stock options 275 — — — — 275 Due to affiliates 31,549 22,586 — 16,774 (70,909 ) — Net cash provided (used) by financing activities (32,788 ) 30,211 3 16,584 (70,909 ) (56,899 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (78 ) — (78 ) Net increase in cash and cash equivalents — — 9,749 5,804 — 15,553 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 31,839 $ 47,463 $ — $ 79,312 |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
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, 2018 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at December 31, 2018 Workforce reductions $ 3,444 $ 643 $ 4,087 $ — Consulting 3,087 2,502 3,384 2,205 Other 2,266 835 2,917 184 Total $ 8,797 $ 3,980 $ 10,388 $ — $ 2,389 |
Accounting Changes and Recent_4
Accounting Changes and Recent Accounting Pronouncements - Schedule of Effect of ASU No. 2014-09 Adoption on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Recent Accounting Pronouncements | ||
Other current assets | $ 40,819 | $ 42,960 |
Accrued liabilities | 157,144 | $ 180,287 |
ASU 2014-09 | Excluding ASU No. 2014-09 Effect | ||
Recent Accounting Pronouncements | ||
Other current assets | 38,180 | |
Accrued liabilities | 154,505 | |
ASU 2014-09 | ASU No. 2014-09 Effect | ||
Recent Accounting Pronouncements | ||
Other current assets | 2,639 | |
Accrued liabilities | $ 2,639 |
Accounting Changes and Recent_5
Accounting Changes and Recent Accounting Pronouncements - Effect of ASU No. 2014-09 Adoption on Condensed Consolidated Statement of Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Recent Accounting Pronouncements | ||
Net sales | $ 989,453 | $ 994,964 |
Gross Profit | 480,705 | 486,629 |
Selling, general and administrative expenses | 366,987 | $ 371,286 |
ASU 2014-09 | Excluding ASU No. 2014-09 Effect | ||
Recent Accounting Pronouncements | ||
Net sales | 989,378 | |
Gross Profit | 480,630 | |
Selling, general and administrative expenses | 366,912 | |
ASU 2014-09 | ASU No. 2014-09 Effect | ||
Recent Accounting Pronouncements | ||
Net sales | 75 | |
Gross Profit | 75 | |
Selling, general and administrative expenses | $ 75 |
Accounting Changes and Recent_6
Accounting Changes and Recent Accounting Pronouncements (Details) - ASU 16-02 $ in Millions | Dec. 31, 2018USD ($) |
Recent Accounting Pronouncements | |
Estimated amount of Right of use asset | $ 525 |
Lease liability | $ 525 |
Revenue Recognition - (Details)
Revenue Recognition - (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue From Contract With Customer [Abstract] | ||
Revenue recognition payment terms | 30 days | |
Contract assets | $ 0 | $ 0 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Gift Card and Rewards Loyalty Program Liabilities (Details) - Accrued Liabilities - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Contract With Customer Liability [Line Items] | ||
Total liability | $ 13,012 | $ 5,309 |
Gift Cards | ||
Contract With Customer Liability [Line Items] | ||
Total liability | 5,766 | 4,144 |
Rewards Loyalty Program | ||
Contract With Customer Liability [Line Items] | ||
Total liability | $ 7,246 | $ 1,165 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Long-term debt | ||
Long-term debt, Carrying Value | $ 1,793,995 | $ 1,795,383 |
Long-term debt, Fair Value | 1,676,294 | 1,736,441 |
Level 2 | Other Long-Term Debt | ||
Long-term debt | ||
Long-term debt, Carrying Value | 843,995 | 845,383 |
Long-term debt, Fair Value | 794,054 | 824,951 |
Level 1 | Senior notes | ||
Long-term debt | ||
Long-term debt, Carrying Value | 950,000 | 950,000 |
Long-term debt, Fair Value | 882,240 | 911,490 |
Fair value measurement on recurring basis | ||
Assets | ||
Total assets | 4,575 | 8,367 |
Fair value measurement on recurring basis | Level 2 | ||
Assets | ||
Foreign exchange contracts | 24 | |
Interest rate caps | 4,551 | $ 8,367 |
Liabilities | ||
Foreign exchange contracts | $ 583 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Change in AOCL (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2018USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | $ (268,556) |
Balance | (214,731) |
Interest rate caps | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | 1,365 |
Other comprehensive loss before reclassification, net of tax | (2,839) |
Reclassification to net earnings, net of tax | 9 |
Balance | (1,465) |
Foreign exchange contracts | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Other comprehensive loss before reclassification, net of tax | (412) |
Balance | (412) |
Foreign currency translation adjustments | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (91,356) |
Other comprehensive loss before reclassification, net of tax | (13,463) |
Balance | (104,819) |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (89,991) |
Other comprehensive loss before reclassification, net of tax | (16,714) |
Reclassification to net earnings, net of tax | 9 |
Balance | $ (106,696) |
Weighted Average Shares (Detail
Weighted Average Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share Reconciliation: | ||
Weighted average basic shares | 119,989 | 127,784 |
Dilutive securities: | ||
Stock option and stock award programs | 990 | 861 |
Weighted average diluted shares | 120,979 | 128,645 |
Weighted Average Shares - Addit
Weighted Average Shares - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
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) | 5.7 | 5.8 |
Share-Based Payments - Performa
Share-Based Payments - Performance-Based Awards (Details) - Performance Unit Awards - $ / shares shares in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | |
Share-Based Payments | ||
Payout percentage (in percentage) | 100.00% | |
Performance Unit Awards (in shares) | ||
Unvested at the beginning of the period (in shares) | 349 | |
Vested (in shares) | (23) | |
Forfeited (in shares) | (66) | |
Unvested at the end of the period (in shares) | 260 | 349 |
Performance Unit Awards (in dollars per share) | ||
Unvested at the beginning of the period (in dollars per share) | $ 20.88 | |
Vested (in dollar per share) | 23.45 | |
Forfeited (in dollars per share) | 23.10 | |
Unvested at the end of the period (in dollars per share) | $ 20.10 | $ 20.88 |
Performance Unit Awards (in years) | ||
Weighted Average Remaining Vesting Term (in Years) | 1 year 4 months 24 days | 1 year 3 months 18 days |
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 | 3 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | |
Stock Options, Number of Outstanding Options | ||
Outstanding at the beginning of the period (in shares) | 5,405 | |
Granted (in shares) | 948 | |
Exercised (in shares) | (98) | |
Forfeited or expired (in shares) | (350) | |
Outstanding at the end of the period (in shares) | 5,905 | 5,405 |
Exercisable at the end of the period (in shares) | 3,870 | |
Stock Options, Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 23.04 | |
Granted (in dollars per share) | 18.14 | |
Exercised (in dollars per share) | 15.90 | |
Forfeited or expired (in dollars per share) | 25.24 | |
Outstanding at the end of the period (in dollars per share) | 22.24 | $ 23.04 |
Exercisable at the end of the period (in dollars per share) | $ 23.93 | |
Stock Options, Weighted Average Remaining Contractual Term | ||
Weighted average remaining contractual term (in years) | 6 years 3 months 18 days | 5 years 4 months 24 days |
Exercisable at December 31, 2018 | 4 years 9 months 18 days | |
Stock Options, Aggregate Intrinsic Value | ||
Outstanding balance at period end (in dollars) | $ 1,527 | $ 3,161 |
Exercisable at the end of the period (in dollars) | $ 1,336 |
Share-Based Payments - Restrict
Share-Based Payments - Restricted Stock Awards (Details) - Restricted Stock Awards - $ / shares | 3 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | |
Restricted stock (in shares) | ||
Unvested at the beginning of the period (in shares) | 219,000 | |
Granted (in shares) | 287,000 | |
Forfeited (in shares) | (6,000) | |
Unvested at the end of the period (in shares) | 500,000 | 219,000 |
Restricted Stock (in dollars per share) | ||
Unvested at the beginning of the period (in dollars per share) | $ 16.98 | |
Granted (in dollars per share) | 18.14 | |
Forfeited (in dollars per share) | 17.63 | |
Unvested at the end of the period (in dollars per share) | $ 17.66 | $ 16.98 |
Restricted stock (in years) | ||
Weighted Average Remaining Vesting Term (in Years) | 2 years 3 months 18 days | 2 years 1 month 6 days |
Share-Based Payments - Restri_2
Share-Based Payments - Restricted Stock Units (Details) - Restricted Stock Units | 3 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Restricted stock (in shares) | |
Granted (in shares) | shares | 88,000 |
Unvested at the end of the period (in shares) | shares | 88,000 |
Restricted Stock (in dollars per share) | |
Granted (in dollars per share) | $ / shares | $ 18.14 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 18.14 |
Restricted stock (in years) | |
Weighted Average Remaining Vesting Term (in Years) | 8 months 12 days |
Short-term Borrowings and Lon_2
Short-term Borrowings and Long-term Debt - ABL Facility and Canadian sub-facility (Details) $ in Millions | Dec. 31, 2018USD ($) |
Sally Holdings, LLC | |
Debt Instruments | |
Revolving credit facility | $ 481.4 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - (Details) | 3 Months Ended | |
Dec. 31, 2018USD ($)instrument | Jul. 31, 2017USD ($)derivative | |
Derivative Instruments | ||
Number of derivative instruments held | instrument | 0 | |
Foreign Currency Forwards | ||
Derivative Instruments | ||
Notional Amount | $ 40,817,000 | |
Interest rate caps | Variable-rate tranche | Sally Holdings, LLC | ||
Derivative Instruments | ||
Notional Amount | $ 550,000,000 | |
Derivative instruments, expiration date | Jun. 30, 2023 | |
Number of interest rate caps | derivative | 2 | |
Interest rate caps designated as cash flow hedges to be reclassified in to interest expense over next 12 months | $ 300,000 | |
Reclassification from AOCL | Foreign Currency Forwards | ||
Derivative Instruments | ||
Foreign currency forwards designated as cash flow hedges to be reclassified in to cost of goods sold over next 12 months | $ 500,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Schedule of Notional Amount Held Through Foreign Currency Forwards, Based Upon Exchange Rates (Details) - Foreign Currency Forwards $ in Thousands | Dec. 31, 2018USD ($) |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | $ 40,817 |
EUR | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 16,085 |
MXP | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 14,342 |
GBP | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 6,642 |
CAD | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | $ 3,748 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Derivatives Designated as Hedging Instruments | ||
Total derivatives designated as hedging instruments, Asset | $ 4,575 | $ 8,367 |
Credit-risk-related Contingent Features | ||
Total derivatives designated as hedging instruments, Liability | 583 | |
Other Assets | ||
Derivatives Designated as Hedging Instruments | ||
Interest rate caps | 4,551 | $ 8,367 |
Other current assets | ||
Derivatives Designated as Hedging Instruments | ||
Foreign exchange contracts | 24 | |
Accrued Liabilities | ||
Credit-risk-related Contingent Features | ||
Foreign exchange contracts | $ 583 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 22.90% | 3.30% | |
Amount of income tax expense from transition tax on unrepatriated foreign earnings recorded as a result of the Tax Cut and Jobs Act | $ 3 | ||
Net benefit recorded as a result of the U.S. tax reform | $ 22.2 | ||
Federal statutory tax rate | 21.00% | 24.50% | |
Unremitted earnings of foreign operations | $ 3 | ||
Reversal amount of tax benefit as a result of change in the regulations | $ 2.5 |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales: | ||
Total net sales | $ 989,453 | $ 994,964 |
Segment operating earnings: | ||
Segment operating earnings | 109,738 | 110,133 |
Restructuring charges | (3,980) | (5,210) |
Interest expense | (24,489) | (24,016) |
Earnings before provision for income taxes | 85,249 | 86,117 |
Operating segments | ||
Segment operating earnings: | ||
Segment operating earnings | 152,321 | 151,159 |
Corporate | ||
Segment operating earnings: | ||
Unallocated expenses | (38,603) | (35,816) |
Restructuring charges | (2,800) | |
Sally Beauty Supply | ||
Net sales: | ||
Total net sales | 580,608 | 585,574 |
Segment operating earnings: | ||
Restructuring charges | (1,100) | |
Sally Beauty Supply | Operating segments | ||
Segment operating earnings: | ||
Segment operating earnings | 89,991 | 86,594 |
Beauty Systems Group | ||
Net sales: | ||
Total net sales | 408,845 | 409,390 |
Beauty Systems Group | Operating segments | ||
Segment operating earnings: | ||
Segment operating earnings | $ 62,330 | $ 64,565 |
Business Segments - Schedule of
Business Segments - Schedule of Disaggregation of Net Sales by Segment (Details) - Sales Revenue, Net - Product Concentration Risk | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Sally Beauty Supply | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 100.00% | 100.00% |
Sally Beauty Supply | Hair color | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 27.50% | 26.40% |
Sally Beauty Supply | Hair care | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 19.90% | 20.60% |
Sally Beauty Supply | Styling tools | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 15.70% | 15.30% |
Sally Beauty Supply | Skin and nail care | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 15.10% | 14.90% |
Sally Beauty Supply | Salon supplies and accessories | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 7.10% | 7.10% |
Sally Beauty Supply | Multicultural products | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 6.50% | 6.70% |
Sally Beauty Supply | Other Beauty items | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 8.20% | 9.00% |
Beauty Systems Group | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 100.00% | 100.00% |
Beauty Systems Group | Hair color | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 38.00% | 36.80% |
Beauty Systems Group | Hair care | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 33.40% | 33.60% |
Beauty Systems Group | Styling tools | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 3.90% | 4.70% |
Beauty Systems Group | Skin and nail care | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 8.10% | 8.90% |
Beauty Systems Group | Other Beauty items | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 5.80% | 5.80% |
Beauty Systems Group | Promotional items | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 10.80% | 10.20% |
Parent, Issuers, Guarantor an_3
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidating Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Assets | ||||
Cash and cash equivalents | $ 102,771 | $ 77,295 | $ 79,312 | $ 63,759 |
Trade and other accounts receivable, net | 91,776 | 90,490 | ||
Inventory | 982,497 | 944,338 | ||
Other current assets | 40,819 | 42,960 | ||
Property and equipment, net | 303,157 | 308,357 | ||
Goodwill and other intangible assets, net | 602,202 | 608,623 | ||
Other assets | 21,392 | 25,351 | ||
Total assets | 2,144,614 | 2,097,414 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 307,487 | 303,241 | ||
Accrued liabilities | 157,144 | 180,287 | ||
Income taxes payable | 14,580 | 2,144 | ||
Long-term debt | 1,773,806 | 1,774,309 | ||
Other liabilities | 26,969 | 30,022 | ||
Deferred income tax liabilities, net | 79,359 | 75,967 | ||
Total liabilities | 2,359,345 | 2,365,970 | ||
Total stockholders’ (deficit) equity | (214,731) | (268,556) | (342,635) | (363,616) |
Total liabilities and stockholders’ (deficit) equity | 2,144,614 | 2,097,414 | ||
Parent | ||||
Assets | ||||
Trade and other accounts receivable, net | 4 | |||
Other current assets | 699 | 2,010 | ||
Property and equipment, net | 7 | 8 | ||
Investment in subsidiaries | 1,420,037 | 1,368,927 | ||
Other assets | 1,325 | 1,325 | ||
Total assets | 1,422,068 | 1,372,274 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 46 | 38 | ||
Due to affiliates | 1,615,667 | 1,629,411 | ||
Accrued liabilities | 301 | 234 | ||
Income taxes payable | 13,230 | 585 | ||
Other liabilities | 7,629 | 10,562 | ||
Deferred income tax liabilities, net | (74) | |||
Total liabilities | 1,636,799 | 1,640,830 | ||
Total stockholders’ (deficit) equity | (214,731) | (268,556) | ||
Total liabilities and stockholders’ (deficit) equity | 1,422,068 | 1,372,274 | ||
Sally Holdings and Sally Capital | ||||
Assets | ||||
Cash and cash equivalents | 10 | 10 | 10 | 10 |
Other current assets | 329 | 111 | ||
Investment in subsidiaries | 4,117,044 | 4,044,669 | ||
Other assets | 6,321 | 10,242 | ||
Total assets | 4,123,704 | 4,055,032 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Due to affiliates | 924,250 | 888,141 | ||
Accrued liabilities | 6,044 | 23,019 | ||
Income taxes payable | 1,519 | 1,519 | ||
Long-term debt | 1,772,936 | 1,773,426 | ||
Deferred income tax liabilities, net | (1,082) | |||
Total liabilities | 2,703,667 | 2,686,105 | ||
Total stockholders’ (deficit) equity | 1,420,037 | 1,368,927 | ||
Total liabilities and stockholders’ (deficit) equity | 4,123,704 | 4,055,032 | ||
Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 51,880 | 29,050 | 31,839 | 22,090 |
Trade and other accounts receivable, net | 60,558 | 53,295 | ||
Due from affiliates | 2,625,695 | 2,598,681 | ||
Inventory | 751,010 | 714,000 | ||
Other current assets | 27,967 | 27,422 | ||
Property and equipment, net | 233,513 | 232,941 | ||
Investment in subsidiaries | 374,477 | 380,166 | ||
Goodwill and other intangible assets, net | 457,236 | 459,348 | ||
Other assets | (4,630) | (4,797) | ||
Total assets | 4,577,706 | 4,490,106 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 251,245 | 233,936 | ||
Accrued liabilities | 118,244 | 125,179 | ||
Long-term debt | 1 | |||
Other liabilities | 15,355 | 15,250 | ||
Deferred income tax liabilities, net | 75,818 | 71,071 | ||
Total liabilities | 460,662 | 445,437 | ||
Total stockholders’ (deficit) equity | 4,117,044 | 4,044,669 | ||
Total liabilities and stockholders’ (deficit) equity | 4,577,706 | 4,490,106 | ||
Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 50,881 | 48,235 | $ 47,463 | $ 41,659 |
Trade and other accounts receivable, net | 31,218 | 37,191 | ||
Inventory | 231,487 | 230,338 | ||
Other current assets | 11,824 | 13,417 | ||
Property and equipment, net | 69,637 | 75,408 | ||
Goodwill and other intangible assets, net | 144,966 | 149,275 | ||
Other assets | 18,376 | 18,581 | ||
Total assets | 558,389 | 572,445 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 56,196 | 69,267 | ||
Due to affiliates | 85,778 | 81,129 | ||
Accrued liabilities | 32,555 | 31,855 | ||
Income taxes payable | (169) | 40 | ||
Long-term debt | 870 | 882 | ||
Other liabilities | 3,985 | 4,210 | ||
Deferred income tax liabilities, net | 4,697 | 4,896 | ||
Total liabilities | 183,912 | 192,279 | ||
Total stockholders’ (deficit) equity | 374,477 | 380,166 | ||
Total liabilities and stockholders’ (deficit) equity | 558,389 | 572,445 | ||
Consolidating Eliminations | ||||
Assets | ||||
Due from affiliates | (2,625,695) | (2,598,681) | ||
Investment in subsidiaries | (5,911,558) | (5,793,762) | ||
Total assets | (8,537,253) | (8,392,443) | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Due to affiliates | (2,625,695) | (2,598,681) | ||
Total liabilities | (2,625,695) | (2,598,681) | ||
Total stockholders’ (deficit) equity | (5,911,558) | (5,793,762) | ||
Total liabilities and stockholders’ (deficit) equity | $ (8,537,253) | $ (8,392,443) |
Parent, Issuers, Guarantor an_4
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidating Financial Statements - Condensed Consolidating Statement of Earnings and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Income Statements Captions [Line Items] | ||
Net sales | $ 989,453 | $ 994,964 |
Cost of products sold and distribution expenses | 508,748 | 508,335 |
Gross profit | 480,705 | 486,629 |
Selling, general and administrative expenses | 366,987 | 371,286 |
Restructuring charges | 3,980 | 5,210 |
Operating earnings | 109,738 | 110,133 |
Interest expense (income) | 24,489 | 24,016 |
Earnings before provision for income taxes | 85,249 | 86,117 |
Provision (benefit) for income taxes | 19,522 | 2,853 |
Net earnings | 65,727 | 83,264 |
Other comprehensive loss, net of tax | (16,705) | (1,058) |
Total comprehensive income | 49,022 | 82,206 |
Parent | ||
Condensed Income Statements Captions [Line Items] | ||
Selling, general and administrative expenses | 2,809 | 2,606 |
Operating earnings | (2,809) | (2,606) |
Earnings before provision for income taxes | (2,809) | (2,606) |
Provision (benefit) for income taxes | (721) | (251) |
Equity in earnings of subsidiaries, net of tax | 67,815 | 85,619 |
Net earnings | 65,727 | 83,264 |
Total comprehensive income | 65,727 | 83,264 |
Sally Holdings and Sally Capital | ||
Condensed Income Statements Captions [Line Items] | ||
Selling, general and administrative expenses | 168 | 179 |
Operating earnings | (168) | (179) |
Interest expense (income) | 24,552 | 24,014 |
Earnings before provision for income taxes | (24,720) | (24,193) |
Provision (benefit) for income taxes | (6,345) | (6,925) |
Equity in earnings of subsidiaries, net of tax | 86,190 | 102,887 |
Net earnings | 67,815 | 85,619 |
Other comprehensive loss, net of tax | (2,830) | (803) |
Total comprehensive income | 64,985 | 84,816 |
Guarantor Subsidiaries | ||
Condensed Income Statements Captions [Line Items] | ||
Net sales | 793,530 | 796,532 |
Related party sales | 669 | 446 |
Cost of products sold and distribution expenses | 404,040 | 403,810 |
Gross profit | 390,159 | 393,168 |
Selling, general and administrative expenses | 286,216 | 284,467 |
Restructuring charges | 3,980 | 5,210 |
Operating earnings | 99,963 | 103,491 |
Interest expense (income) | (1) | |
Earnings before provision for income taxes | 99,964 | 103,491 |
Provision (benefit) for income taxes | 25,683 | (7,915) |
Equity in earnings of subsidiaries, net of tax | 11,909 | (8,519) |
Net earnings | 86,190 | 102,887 |
Total comprehensive income | 86,190 | 102,887 |
Non-Guarantor Subsidiaries | ||
Condensed Income Statements Captions [Line Items] | ||
Net sales | 195,923 | 198,432 |
Cost of products sold and distribution expenses | 105,377 | 104,971 |
Gross profit | 90,546 | 93,461 |
Selling, general and administrative expenses | 77,794 | 84,034 |
Operating earnings | 12,752 | 9,427 |
Interest expense (income) | (62) | 2 |
Earnings before provision for income taxes | 12,814 | 9,425 |
Provision (benefit) for income taxes | 905 | 17,944 |
Net earnings | 11,909 | (8,519) |
Other comprehensive loss, net of tax | (13,875) | (255) |
Total comprehensive income | (1,966) | (8,774) |
Consolidating Eliminations | ||
Condensed Income Statements Captions [Line Items] | ||
Related party sales | (669) | (446) |
Cost of products sold and distribution expenses | (669) | (446) |
Equity in earnings of subsidiaries, net of tax | (165,914) | (179,987) |
Net earnings | (165,914) | (179,987) |
Total comprehensive income | $ (165,914) | $ (179,987) |
Parent, Issuers, Guarantor an_5
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidating Financial Statements - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | $ 50,256 | $ 104,204 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (23,710) | (22,499) |
Acquisitions, net of cash acquired | (451) | (9,175) |
Net cash used by investing activities | (24,161) | (31,674) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 126,500 | 126,505 |
Repayments of long-term debt | (127,876) | (119,067) |
Repurchases of common stock | (64,612) | |
Proceeds from exercises of stock options | 1,449 | 275 |
Net cash used by financing activities | 73 | (56,899) |
Effect of foreign exchange rate changes on cash and cash equivalents | (692) | (78) |
Net increase (decrease) in cash and cash equivalents | 25,476 | 15,553 |
Cash and cash equivalents, beginning of period | 77,295 | 63,759 |
Cash and cash equivalents, end of period | 102,771 | 79,312 |
Parent | ||
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | 12,295 | 32,788 |
Cash Flows from Financing Activities: | ||
Repurchases of common stock | (64,612) | |
Proceeds from exercises of stock options | 1,449 | 275 |
Due to affiliates | (13,744) | 31,549 |
Net cash used by financing activities | (12,295) | (32,788) |
Sally Holdings and Sally Capital | ||
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | (34,734) | (30,211) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 126,500 | 126,500 |
Repayments of long-term debt | (127,875) | (118,875) |
Due to affiliates | 36,109 | 22,586 |
Net cash used by financing activities | 34,734 | 30,211 |
Cash and cash equivalents, beginning of period | 10 | 10 |
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 | 71,284 | 100,319 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (21,439) | (19,664) |
Due from affiliates | (27,014) | (70,909) |
Net cash used by investing activities | (48,453) | (90,573) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 5 | |
Repayments of long-term debt | (1) | (2) |
Net cash used by financing activities | (1) | 3 |
Net increase (decrease) in cash and cash equivalents | 22,830 | 9,749 |
Cash and cash equivalents, beginning of period | 29,050 | 22,090 |
Cash and cash equivalents, end of period | 51,880 | 31,839 |
Non-Guarantor Subsidiaries | ||
Condensed Cash Flow Statements Captions [Line Items] | ||
Net cash provided (used) by operating activities | 1,411 | 1,308 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net | (2,271) | (2,835) |
Acquisitions, net of cash acquired | (451) | (9,175) |
Net cash used by investing activities | (2,722) | (12,010) |
Cash Flows from Financing Activities: | ||
Repayments of long-term debt | (190) | |
Due to affiliates | 4,649 | 16,774 |
Net cash used by financing activities | 4,649 | 16,584 |
Effect of foreign exchange rate changes on cash and cash equivalents | (692) | (78) |
Net increase (decrease) in cash and cash equivalents | 2,646 | 5,804 |
Cash and cash equivalents, beginning of period | 48,235 | 41,659 |
Cash and cash equivalents, end of period | 50,881 | 47,463 |
Consolidating Eliminations | ||
Cash Flows from Investing Activities: | ||
Due from affiliates | 27,014 | 70,909 |
Net cash used by investing activities | 27,014 | 70,909 |
Cash Flows from Financing Activities: | ||
Due to affiliates | (27,014) | (70,909) |
Net cash used by financing activities | $ (27,014) | $ (70,909) |
Restructuring Plans (Details)
Restructuring Plans (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Apr. 30, 2018 | |
Changes in restructuring reserve | |||
Restructuring charges | $ 3,980,000 | $ 5,210,000 | |
Corporate | |||
Changes in restructuring reserve | |||
Restructuring charges | 2,800,000 | ||
Sally Beauty Supply | |||
Changes in restructuring reserve | |||
Restructuring charges | 1,100,000 | ||
2018 Restructuring Plan | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 8,797,000 | ||
Restructuring charges | 3,980,000 | ||
Expenses Paid or Otherwise Settled | 10,388,000 | ||
Restructuring reserve, ending balance | 2,389,000 | ||
2018 Restructuring Plan | Workforce reductions | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 3,444,000 | ||
Restructuring charges | 643,000 | ||
Expenses Paid or Otherwise Settled | 4,087,000 | ||
2018 Restructuring Plan | Consulting | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 3,087,000 | ||
Restructuring charges | 2,502,000 | ||
Expenses Paid or Otherwise Settled | 3,384,000 | ||
Restructuring reserve, ending balance | 2,205,000 | ||
2018 Restructuring Plan | Other | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 2,266,000 | ||
Restructuring charges | 835,000 | ||
Expenses Paid or Otherwise Settled | 2,917,000 | ||
Restructuring reserve, ending balance | $ 184,000 | ||
Minimum | 2018 Restructuring Plan | |||
Changes in restructuring reserve | |||
Total estimated aggregate charges | $ 28,000,000 | ||
Maximum | 2018 Restructuring Plan | |||
Changes in restructuring reserve | |||
Total estimated aggregate charges | $ 30,000,000 |
Subsequent Event (Details)
Subsequent Event (Details) | Feb. 05, 2019ft² |
Subsequent Event | Oklahoma, Louisiana or Texas | |
Subsequent Event [Line Items] | |
Area of warehouse | 500,000 |