- Consolidated Same Store Sales
Increased by 0.3%
- Sally Beauty Supply Delivers
Positive Same Store Sales - Increased by 0.7%; Beauty Systems Group
Same Store Sales Trend Improves - Decreased by 0.6%
- Global E-Commerce Sales Increased by
34.4% versus Prior Year
- GAAP Diluted EPS of $0.54; Decreased
by 16.9% versus Prior Year (Due to One-Time U.S. Tax Reform
Benefits)
- Adjusted Diluted EPS of $0.57;
Growth of 11.8% versus Prior Year
- FY19 Guidance Maintained;
Multi-Quarter Transformation Plan on Track
- Company Announces First Phase of
Supply Chain Modernization Effort
Sally Beauty Holdings, Inc. (NYSE: SBH) (“the Company”) today
announced financial results for its first quarter ended December
31, 2018. The Company will hold a conference call today at 7:30
a.m. Central Time to discuss these results.
Fiscal 2019 First Quarter Overview
Consolidated same store sales increased 0.3% in the quarter.
Consolidated net sales were $989.5 million in the first quarter, a
decrease of 0.6% compared to the prior year. Foreign currency
translation had an unfavorable impact of approximately 70 basis
points on reported sales.
GAAP diluted earnings per share in the first quarter were $0.54
compared to $0.65 in the prior year, a decrease of 16.9%, driven
primarily by the one-time net benefits from U.S. tax reform in the
prior year of approximately $0.17 per share. Adjusted diluted
earnings per share, excluding charges related to the Company’s
transformation efforts in both years and the prior year’s one-time
tax benefits, were $0.57 in the first quarter compared to $0.51 in
the prior year, reflecting growth of 11.8%.
“We are making steady progress against our transformation plan
and remain on track with our plans for the remainder of the fiscal
year,” said Chris Brickman, president and chief executive
officer.
“Our North American retail business, within Sally Beauty Supply,
has been leading the charge with respect to our refocus on color
and care, our pricing and promotional changes, our new loyalty
program and other elements of our owned brand, new product and
store execution change agenda. As a result, that business had
improved holiday performance on both the top and bottom line. At
the same time, our Beauty Systems Group team made solid progress
improving our in-stock position on key brands while launching
differentiated new products. These efforts, which are already
underway, combined with ongoing changes to our marketing and
promotional approach, will contribute to improved sales and margin
performance over time,” Brickman concluded.
Sally Beauty Holdings Announces Supply Chain Modernization
Effort
The Company has been assessing its supply chain in an effort to
improve out-of-stocks, optimize inventory levels, reduce cost and
explore new replenishment and fulfillment options. As the first
step in its supply chain modernization plans, Sally Beauty Holdings
will close distribution facilities in Denton, Texas, and Anchorage,
Alaska, by the end of the second quarter and will close its
distribution center in Lincoln, Nebraska, by the end of third
quarter. The Company is also announcing the search for a 500,000
square foot location within Texas for construction of a new
automated and concentrated distribution center which will service
Sally Beauty Supply stores and e-commerce sales as well as Beauty
Systems Group stores, full service sales and e-commerce sales. The
Company will also be upgrading its e-commerce capabilities at its
distribution facility in Columbus, Ohio.
Reflecting the breadth of the Company’s physical footprint, in
coming quarters, the Company will be further upgrading and
integrating its enterprise technology capabilities to allow
in-store inventory to be accessed by digital clients as part of
testing buy online/pick-up in store, buy online/deliver from store
and ship from store initiatives.
Update on Transformation Plan
In terms of transformation activities so far this fiscal
year:
- The national launch of the Sally Beauty
Rewards Loyalty Program is performing well, having reached over 14
million active members as of the end of the quarter with new
enrollments occurring at approximately twice the rate as the
previous Beauty Club Card program;
- Owned and exclusive brand penetration
was approximately 46% of total sales at Sally Beauty Supply and
approximately 53% of total sales at Beauty Systems Group during the
first quarter. The national launch of owned brand electricals in
Beauty Systems Group performed well and will be expanded;
- Product innovation continued, with the
launch of Pravana hair color and hair care, the expansion of Guy
Tang’s #mydentity brand into hair care and the launch of the
re-formulated Wella Koleston Perfect hair color in Beauty Systems
Group. Sally Beauty Supply also launched a new color line, Good Dye
Young, nationwide on sallybeauty.com and in select stores;
- After a successful test in August,
Sally Beauty Supply implemented a more focused “Fewer, Bigger,
Deeper” approach to our promotional strategy in December, which
demonstrated successful results. This same approach is expected to
be implemented in Beauty Systems Group in the latter half of the
fiscal year;
- Phase I of the Company’s system-wide
JDA implementation was completed successfully;
- In-store testing began for the
Company’s new Oracle based point-of-sale system, which is expected
to be installed in at least 1,400 stores by the end of fiscal year
2019;
- Beauty Systems Group executed on two
small territory acquisitions to further expand the territorial
scope of its brand distribution rights and strengthen its position
in the professional channel; and
- The integration of our operations in
Mexico and South America into one Latin American team was
completed.
As we move through the remainder of the second quarter of
fiscal year 2019 and into the third quarter, we expect to:
- Fully deploy our updated e-commerce and
mobile app commerce capabilities for Sally Beauty Supply, in
partnership with IBM and Blue Wolf;
- Complete the testing of the new Oracle
based point-of-sale systems in both Sally Beauty Supply and Beauty
Systems Group;
- Pilot additional modules of the JDA
merchandising and supply chain platform;
- Complete the build-out of our ‘concept
market’ in Las Vegas, with the Sally Beauty Supply and CosmoProf
stores in that market remodeled to reflect our new customer
experience and approach to retail fundamentals;
- Execute on further territory
acquisitions to expand the territorial scope of Beauty Systems
Group’s brand distribution rights;
- Continue to drive assortment
differentiation with the launch of further exclusive brands, like
Maria Nila, and develop additional influencer-partner brands such
as moknowshair;
- Expand our innovation efforts within
our owned brand portfolio, in both businesses simultaneously;
and
- Transform merchandising execution
through the launch of a new vendor negotiation process, holding
vendors accountable and refining vendor promotional funding
processes.
As we move further into the remainder of fiscal year 2019, we
will continue our transformation efforts by:
- Starting the rapid rollout of the new
Oracle based point-of-sale systems in both Sally Beauty Supply and
Beauty Systems Group;
- Going live with additional modules of
the JDA merchandising and supply chain platform in both Sally
Beauty Supply and Beauty Systems Group;
- Launching updated e-commerce and mobile
commerce capabilities for Beauty Systems Group;
- Building awareness of our new product
launches across both business segments;
- Expanding distribution rights for
existing and new brands within the Beauty Systems Group; and
- Seeking to achieve additional selling,
general and administrative expense savings to fund our
investments.
Fiscal 2019 First Quarter Financial Detail
Gross margin for the first quarter was 48.6%, a decrease of 30
basis points compared to the prior year, with increases in the
North American business of Sally Beauty Supply offset by challenges
in Europe and within Beauty Systems Group. Selling, general and
administrative expenses, as a percentage of sales, declined to
37.1%, with the decrease of 20 basis points coming from cost
savings efforts across the enterprise.
GAAP operating earnings and operating margin in the first
quarter were $109.7 million and 11.1%, respectively, compared to
$110.1 million and 11.1%, respectively, in the prior year. Adjusted
operating earnings and operating margin (excluding charges related
to the Company’s transformation efforts in both years) were $113.7
million and 11.5%, respectively, compared to $115.3 million and
11.6%, respectively, in the prior year.
GAAP net earnings in the first quarter were $65.7 million, a
decrease of $17.5 million, or 21.1%, from the prior year. Adjusted
EBITDA in the first quarter was $143.6 million, a decrease of $2.0
million, or 1.4%, from the prior year, and Adjusted EBITDA margin
was 14.5%, a decline of approximately 10 basis points from the
prior year.
At the end of the quarter, inventory was $982.5 million, up 4.4%
from the prior year. The increase was driven by the impact of new
product launches within Sally Beauty Supply and the expansion of
distribution rights for Beauty Systems Group, partially offset by a
stronger U.S. dollar on reported inventory levels.
Capital expenditures in the quarter totaled $23.7 million,
primarily for information technology projects related to the new
Oracle based point-of-sale system and the JDA merchandising and
supply chain platform as well as store remodels and
maintenance.
The outstanding balance on our asset-based revolving line of
credit remained at zero at the end of the first quarter.
Fiscal 2019 First Quarter Segment Results
Sally Beauty Supply
- Net sales were $580.6 million in the
quarter, a decrease of 0.8% compared to the prior year, with
increasing sales in the North American retail business offset by
significant declines in Europe on the uncertainty surrounding
Brexit and civil protests in continental Europe. Foreign currency
translation had an unfavorable impact on the segment’s revenue
growth in the quarter by approximately 90 basis points. Same
store sales increased by 0.7% for the quarter, with increases in
the U.S. and Canada partially offset by meaningful declines in
Europe.
- At the end of the quarter, net store
count was 3,739, a decrease of 48 from the prior year.
- Gross margin was flat at 54.6% in the
quarter, with improvements in the U.S. and Canada offset by
weakness in Europe.
- GAAP operating earnings were $90.0
million in the quarter, an increase of 3.9% versus the prior year.
GAAP operating margin was 15.5% versus 14.8% in the year
prior.
Beauty Systems Group
- Net sales were $408.8 million in the
quarter, a decrease of 0.1% compared to the prior year. Foreign
currency translation decreased the segment’s revenue growth in the
quarter by approximately 40 basis points. Same store sales declined
0.6%.
- At the end of the quarter, net store
count was 1,390, flat to the prior year.
- Gross margin decreased 80 basis points
to 40.0% in the quarter, driven primarily by a category mix shift,
increased promotional activity and timing of vendor funding.
- GAAP operating earnings were $62.3
million in the quarter, a decrease of 3.5% versus the prior year.
GAAP operating margin in the quarter was 15.2%, a 60 basis point
decrease from the prior year.
- At the end of the quarter, total
distributor sales consultants were 822 compared to 875 in the prior
year.
Fiscal Year 2019 Guidance
The Company is maintaining its full-year guidance as previously
reported on November 8, 2018, and repeated below.
- The Company expects full year
consolidated same store sales to be approximately flat.
- Full year gross margin is expected to
be approximately flat compared to the prior year.
- Full year selling, general and
administrative expenses (including depreciation and amortization
expense) as a percentage of sales are expected to be down slightly
due to lower restructuring charges as compared to the prior
year.
- Full year adjusted selling, general and
administrative expenses (including depreciation and amortization
expense) as a percentage of sales are expected to be up slightly
versus the prior year, as a result of timing of investments being
made in the business, partially offset as operating efficiencies
start to reach full run rate status toward the second half of
fiscal year 2019.
- Full year GAAP operating earnings and
operating margin are expected to increase by mid-single digits,
primarily due to an improvement in sales and lower restructuring
costs as compared to the prior year.
- Full year adjusted operating earnings
and operating margin are expected to decline slightly as compared
to the prior year, driven primarily by an improvement in same store
sales offset by the slightly higher adjusted selling, general and
administrative expenses referred to above.
- The Company expects the consolidated
effective tax rate for the year to be approximately 27%.
- Lower average share count and lower
interest expense from reduced indebtedness should result in
mid-single digit growth in both full year GAAP diluted earnings per
share and full year adjusted diluted earnings per share.
- Capital expenditures for the full year
are expected to be approximately $120 million, which already
includes those elements of the supply chain transformation plan
which will occur in 2019.
- Cash flow from operations for the full
year is expected to be approximately $340 million, reflecting an
effort to speed payments to vendors to achieve cost of good
savings. Operating free cash flow is expected to be approximately
$220 million.
Conference Call and Where You Can Find Additional
Information
The Company will hold a conference call and audio webcast today
to discuss its financial results and its business at approximately
7:30 a.m. Central Time. During the conference call, the Company may
discuss and answer one or more questions concerning business and
financial matters and trends affecting the Company. The Company’s
responses to these questions, as well as other matters discussed
during the conference call, may contain or constitute material
information that has not been previously disclosed. Simultaneous to
the conference call, an audio webcast of the call will be available
via a link on the Company’s website,
investor.sallybeautyholdings.com. The conference call can be
accessed by dialing (800) 230-1085 (International: (612) 288-0329).
The teleconference will be held in a “listen-only” mode for all
participants other than the Company’s current sell-side and
buy-side investment professionals. A replay of the earnings
conference call will be available starting at 9:30 a.m. Central
Time, February 5, 2019, through February 12, 2019, by dialing (800)
475-6701 or if international, dial (320) 365-3844 and reference the
conference ID number 461464. Also, a website replay will be
available on investor.sallybeautyholdings.com.
About Sally Beauty Holdings, Inc.
Sally Beauty Holdings, Inc. (NYSE: SBH) is an international
specialty retailer and distributor of professional beauty supplies
with revenues of approximately $3.9 billion annually. Through the
Sally Beauty Supply and Beauty Systems Group businesses, the
Company sells and distributes through 5,129 stores, including 180
franchised units, and has operations throughout the United States,
Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom,
Ireland, Belgium, France, the Netherlands, Spain and Germany. Sally
Beauty Supply stores offer up to 8,000 products for hair color,
hair care, skin care, and nails through proprietary brands such as
Ion®, Generic Value Products®, Beyond the Zone® and Silk Elements®
as well as professional lines such as Wella®, Clairol®, OPI®,
Conair® and Hot Shot Tools®. Beauty Systems Group stores, branded
as CosmoProf or Armstrong McCall stores, along with its outside
sales consultants, sell up to 10,500 professionally branded
products including Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®,
Kenra®, Goldwell®, Joico® and CHI®, intended for use in salons and
for resale by salons to retail consumers. For more information
about Sally Beauty Holdings, Inc., please visit
sallybeautyholdings.com.
Cautionary Notice Regarding Forward-Looking
Statements
Statements in this news release and the schedules hereto which
are not purely historical facts or which depend upon future events
may be forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995, can be identified by the use of
forward-looking terminology such as “believes,” “projects,”
“expects,” “can,” “may,” “estimates,” “should,” “plans,” “targets,”
“intends,” “could,” “will,” “would,” “anticipates,” “potential,”
“confident,” “optimistic,” or the negative thereof, or other
variations thereon, or comparable terminology, or by discussions of
strategy, objectives, estimates, guidance, expectations and future
plans. Forward-looking statements can also be identified by the
fact these statements do not relate strictly to historical or
current matters.
Readers are cautioned not to place undue reliance on
forward-looking statements as such statements speak only as of the
date they were made. Any forward-looking statements involve risks
and uncertainties that could cause actual events or results to
differ materially from the events or results described in the
forward-looking statements, including, but not limited to, the
risks and uncertainties described in our filings with the
Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K for the year ended September 30, 2018,
as filed with the Securities and Exchange Commission. Consequently,
all forward-looking statements in this release are qualified by the
factors, risks and uncertainties contained therein. We assume no
obligation to publicly update or revise any forward-looking
statements.
Use of Non-GAAP Financial Measures
This news release and the schedules hereto include the following
financial measures that have not been calculated in accordance with
accounting principles generally accepted in the United States, or
GAAP, and are therefore referred to as non-GAAP financial measures:
(1) Adjusted EBITDA and EBITDA Margin; (2) Adjusted Operating
Earnings and Operating Margin; (3) Adjusted Diluted Net Earnings
Per Share; (4) Adjusted Selling, General and Administrative
Expenses and (5) Operating Free Cash Flow. We have provided
definitions below for these non-GAAP financial measures and have
provided tables in the schedules hereto to reconcile these non-GAAP
financial measures to the comparable GAAP financial measures.
Adjusted EBITDA and EBITDA Margin - We define the measure
Adjusted EBITDA as GAAP net earnings before depreciation and
amortization, interest expense, income taxes, share-based
compensation and costs related to the Company’s previously
announced restructuring plans for the relevant time periods as
indicated in the accompanying non-GAAP reconciliations to the
comparable GAAP financial measures. Adjusted EBITDA Margin is
Adjusted EBITDA as a percentage of net sales.
Adjusted Operating Earnings and Operating Margin – Adjusted
operating earnings are GAAP operating earnings that exclude costs
related to the Company’s previously announced restructuring plans
for the relevant time periods as indicated in the accompanying
non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted Operating Margin is Adjusted Operating Earnings as a
percentage of net sales.
Adjusted Diluted Net Earnings Per Share – Adjusted diluted net
earnings per share is GAAP diluted earnings per share that exclude
tax-effected costs related to the Company’s previously announced
restructuring plans and the net benefits of the revaluation of
deferred income taxes and a deemed repatriation on previously
undistributed foreign earnings as a result of U.S. tax reform for
the relevant time periods as indicated in the accompanying non-GAAP
reconciliations to the comparable GAAP financial measures.
Adjusted Selling, General and Administrative Expenses – We
define the measure Adjusted Selling, General and Administrative
Expenses as GAAP selling, general and administrative expenses less
costs related to the Company’s previously announced restructuring
plans for the relevant time periods.
Operating Free Cash Flow – We define the measure Operating Free
Cash Flow as GAAP net cash provided by operating activities less
capital expenditures. We believe Operating Free Cash Flow is an
important liquidity measure that provides useful information to
investors about the amount of cash generated from operations after
taking into account capital expenditures.
We believe that these non-GAAP financial measures provide
valuable information regarding our earnings and business trends by
excluding specific items that we believe are not indicative of the
ongoing operating results of our businesses; providing a useful way
for investors to make a comparison of our performance over time and
against other companies in our industry.
We have provided these non-GAAP financial measures as
supplemental information to our GAAP financial measures and believe
these non-GAAP measures provide investors with additional
meaningful financial information regarding our operating
performance and cash flows. Our management and Board of Directors
also use these non-GAAP measures as supplemental measures to
evaluate our businesses and the performance of management,
including the determination of performance-based compensation, to
make operating and strategic decisions, and to allocate financial
resources. We believe that these non-GAAP measures also provide
meaningful information for investors and securities analysts to
evaluate our historical and prospective financial performance.
These non-GAAP measures should not be considered a substitute for
or superior to GAAP results. Furthermore, the non-GAAP measures
presented by us may not be comparable to similarly titled measures
of other companies.
Supplemental Schedules Segment Information
1 Non-GAAP Financial Measures Reconciliations 2
Non-GAAP Financial Measures
Reconciliations; Adjusted EBITDA and Operating Free Cash Flow
3 Store Count and Same Store Sales 4
SALLY BEAUTY
HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of
Earnings (In thousands, except per share data) (Unaudited)
Three Months Ended December
31, Percentage 2018
2017 Change Net
sales $ 989,453 $ 994,964 -0.6 % Cost of products sold
508,748 508,335
0.1 % Gross profit 480,705 486,629 -1.2 %
Selling, general and administrative
expenses
366,987 371,286 -1.2 % Restructuring charges 3,980
5,210 -23.6 % Operating
earnings 109,738 110,133 -0.4 % Interest expense 24,489
24,016 2.0 %
Earnings before provision for income taxes 85,249 86,117 -1.0 %
Provision for income taxes 19,522
2,853 584.3 % Net earnings $ 65,727
$ 83,264 -21.1 %
Earnings per share: Basic $ 0.55 $ 0.65 -15.4 % Diluted $ 0.54
$ 0.65 -16.9 %
Weighted average shares: Basic 119,989 127,784 Diluted
120,979 128,645
Basis Point Change
Comparison as a
percentage of net sales
Consolidated gross margin 48.6 % 48.9 % (30 ) Selling, general and
administrative expenses 37.1 % 37.3 % (20 ) Consolidated operating
margin 11.1 % 11.1 % —
Effective tax
rate
22.9 % 3.3 % 1,960
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (In thousands) (Unaudited)
December 31, September
30, 2018 2018
Cash and cash equivalents $ 102,771 $ 77,295 Trade
and other accounts receivable 91,776 90,490 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 303,157 308,357 Goodwill and other
intangible assets 602,202 608,623 Other assets 21,392
25,351 Total assets $ 2,144,614
$ 2,097,414 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, including capital
leases 1,768,306 1,768,808 Other liabilities 26,969 30,022 Deferred
income tax liabilities 79,359
75,967 Total liabilities 2,359,345 2,365,970 Total
stockholders' deficit (214,731 )
(268,556 ) Total liabilities and stockholders' deficit $ 2,144,614
$ 2,097,414 Supplemental
Schedule 1
SALLY BEAUTY HOLDINGS, INC. AND
SUBSIDIARIES Segment Information (In thousands) (Unaudited)
Three Months Ended
December 31, Percentage 2018
2017 Change Net
sales: Sally Beauty Supply ("SBS") $ 580,608 $ 585,574 -0.8 %
Beauty Systems Group ("BSG") 408,845
409,390 -0.1 % Total net sales $
989,453 $ 994,964 -0.6 %
Operating earnings: SBS $ 89,991 $ 86,594 3.9 % BSG
62,330 64,565 -3.5
% Segment operating earnings 152,321 151,159 0.8 %
Unallocated expenses (1) (38,603 ) (35,816 ) 7.8 % Restructuring
charges (3,980 ) (5,210 ) -23.6 % Interest expense (24,489 )
(24,016 ) 2.0 % Earnings before
provision for income taxes $ 85,249 $ 86,117
-1.0 % Segment gross margin:
Basis Point 2018
2017 Change SBS 54.6 % 54.6 % —
BSG 40.0 % 40.8 % (80 ) Segment operating margin: SBS 15.5 %
14.8 % 70 BSG 15.2 % 15.8 % (60 ) Consolidated operating margin
11.1 % 11.1 % —
(1) Unallocated expenses, including share-based compensation
expense, consist of corporate and shared costs and are included in
selling, general and administrative expenses.
Supplemental Schedule 2
SALLY BEAUTY HOLDINGS, INC. AND
SUBSIDIARIES Non-GAAP Financial Measures Reconciliations,
Continued (In thousands, except per share data) (Unaudited)
Three Months
Ended December 31, 2018 As Reported Restructuring As Adjusted
(GAAP)
Charges (1)
(Non-GAAP) Operating
earnings $ 109,738 $ 3,980 $ 113,718 Operating margin 11.1 % 11.5 %
Earnings before provision for income taxes 85,249 3,980 89,229
Provision for income taxes (3) 19,522
728 20,250
Net earnings $ 65,727 $ 3,252
$ 68,979 Earnings per share:
Basic $ 0.55 $ 0.03 $ 0.57 Diluted $ 0.54 $
0.03 $ 0.57
Three Months Ended December 31, 2017 As Reported
Restructuring U.S. Tax Reform As Adjusted (GAAP)
Charges (1)
(2)
(Non-GAAP) Operating earnings $ 110,133 $
5,210 $ - $ 115,343 Operating margin 11.1 % 11.6 % Earnings before
provision for income taxes 86,117 5,210 - 91,327 Provision for
income taxes (3) 2,853 781
22,202 25,836
Net earnings $ 83,264 $ 4,429
$ (22,202 ) $ 65,491 Earnings
per share: Basic $ 0.65 $ 0.03 $ (0.17 ) $ 0.51 Diluted $ 0.65
$ 0.03 $ (0.17 ) $
0.51 (1) Restructuring charges represent costs and expenses
incurred in connection with the 2018 Restructuring Plan, disclosed
in November 2017 and expanded in April 2018. (2) U.S. tax
reform represents the revaluation of deferred income taxes and a
deemed repatriation tax on previously undistributed foreign
earnings resulting from changes to U.S. federal tax law in December
2017. (3) The income tax provision associated with
restructuring charges for the fiscal years 2019 and 2018 was
calculated using a 18.3% and 15.0% tax rate, respectively, since
realization of a tax benefit for portions of these expenses are
currently not deemed probable. Supplemental Schedule
3
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures Reconciliations, Continued (In
thousands) (Unaudited)
Three
Months Ended December 31, Adjusted EBITDA:
Percentage 2018
2017 Change Net earnings $
65,727 $ 83,264 -21.1 % Add: Depreciation and amortization 26,506
27,090 -2.2 % Interest expense 24,489 24,016 2.0 % Provision for
income taxes 19,522 2,853
584.3 % EBITDA (non-GAAP) 136,244 137,223 -0.7 % Share-based
compensation 3,354 3,111 7.8 % Restructuring charges 3,980
5,210 -23.6 % Adjusted
EBITDA (non-GAAP) $ 143,578 $ 145,544
-1.4 %
Basis Point Change
Adjusted EBITDA as a
percentage of net sales
Adjusted EBITDA margin 14.5 % 14.6 %
(10 )
Operating Free Cash Flow:
Percentage 2018
2017 Change Net cash provided by
operating activities $ 50,256 $ 104,204 -51.8 % Less: Payments for
property and equipment, net (23,710 )
(22,499 ) 5.4 % Operating free cash flow (non-GAAP) $ 26,546
$ 81,705 -67.5 %
Supplemental Schedule 4
SALLY BEAUTY HOLDINGS, INC. AND
SUBSIDIARIES Store Count and Same Store Sales (Unaudited)
As of December 31,
2018 2017 Change
Number of stores: SBS: Company-operated stores 3,723 3,770
(47 ) Franchise stores 16 17 (1 ) Total SBS 3,739
3,787 (48 ) BSG: Company-operated stores 1,226 1,223 3 Franchise
stores 164 167 (3 ) Total BSG 1,390 1,390
- Total consolidated 5,129 5,177 (48 )
Number of BSG distributor sales consultants 822 875
(53 ) BSG distributor sales consultants (DSC) include
266 and 261 sales consultants employed by our franchisees at
December 31, 2018 and 2017, respectively.
Three
Months Ended December 31, Basis Point 2018
2017 Change Same store sales
growth (decline): SBS 0.7 % -2.6 % 330 BSG -0.6 % -1.3 % 70
Consolidated 0.3 % -2.2 % 250 For the purpose of calculating our
same store sales metrics, we compare the current period sales for
stores open for 14 months or longer as of the last day of a month
with the sales for these stores for the comparable period in the
prior fiscal year. Our same store sales are calculated in constant
U.S. dollars and include e-commerce sales, but do not generally
include the sales from stores relocated until 14 months after the
relocation. The sales from stores acquired are excluded from our
same store sales calculation until 14 months after the acquisition.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190205005076/en/
Jeff HarkinsInvestor Relations940-297-3877
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