Repaid $20 Million of Term Loan Facilities
DENTON, Texas--(BUSINESS WIRE)--Oct. 2, 2009--
Sally Beauty Holdings, Inc. (NYSE: SBH) is pleased to announce the
acquisition of Schoeneman Beauty Supply, Inc. (“Schoeneman”), a leading
full-service distributor of professional beauty products, by its
subsidiary Beauty Systems Group LLC (BSG). The addition of Schoeneman,
with its best in class sales force, store base, and distribution
operations is expected to provide BSG with a greater presence in the
Northeast region of the U.S.
“The Beauty Systems Group segment was built through a series of
strategic acquisitions such as Schoeneman,” said Gary Winterhalter, CEO
of Sally Beauty Holdings. “We believe Schoeneman is a natural addition
to our BSG business and supports our long-term objective to grow the
Company. We utilized some of our available cash to fund the acquisition,
but still have ample liquidity to grow organically and pay down debt. In
fact, during the fiscal 2009 fourth quarter, we made an optional
repayment of $20 million on our term loan facilities.”
Schoeneman is headquartered in Pottsville, Pennsylvania and employs over
500 people, including over 100 direct sales consultants. Sales revenue
in fiscal 2009 is projected to be in the range of $86 million to $89
million. The Company owns 43 professional-only beauty supply stores
located in Pennsylvania, Southern New Jersey, Northern Delaware and West
Virginia. The direct sales consultants further extend its distribution
reach to Maryland, Washington D.C., and Northern Virginia. Schoeneman
carries approximately 10,000 SKU’s with a focus on the mid-to-high end
of beauty professional products.
“This acquisition directly supports BSG’s strategy of extending our
distribution reach in important geographic regions of the U.S.," said
John Golliher, president of the Beauty Systems Group. "We expect this
combination to provide us with a greater opportunity to compete in
Pennsylvania, Southern New Jersey, Delaware, and West Virginia.
Schoeneman brings its highly skilled employees, strong customer
relationships and proven distribution channels to BSG. By combining our
two companies, we believe we can create additional value for our
customers, suppliers, and our stockholders.”
Dale Schoeneman, Chief Executive Officer of Schoeneman Beauty Supply,
Inc. stated, “We are excited about Sally’s Beauty System Group LLC
acquisition. Not only do the two companies share similar cultures, but
the added scale and financial resources of the BSG organization bring
enormous benefits to our customers, employees, suppliers and community.
The Schoeneman family looks forward to BSG’s management team bringing
new opportunities to the business.”
Sally Beauty Holdings paid cash of approximately $61 million, net of the
present value of the future incremental tax benefit expected to be
realized by the Company from the transaction. The acquisition is
expected to be slightly accretive, post integration costs, to Sally
Beauty Holdings’ earnings per share in 2010. Cost synergies are expected
to be realized upon full integration of Schoeneman, and the Company
projects additional accretion to Sally Beauty Holdings earnings per
share in 2011.
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 more than $2.6 billion annually. Through the Sally Beauty Supply and
Beauty Systems Group businesses, the Company sells and distributes
through over 3,700 stores, including approximately 200 franchised units,
throughout the United States, the United Kingdom, Belgium, France,
Canada, Puerto Rico, Mexico, Japan, Ireland, Spain and Germany. Sally
Beauty Supply stores offer more than 6,000 products for hair, skin, and
nails through professional lines such as Clairol, L’Oreal, Wella and
Conair, as well as an extensive selection of proprietary merchandise.
Beauty Systems Group stores, branded as CosmoProf or Armstrong McCall
stores, along with its outside sales consultants, sell up to 9,800
professionally branded products including Paul Mitchell, Wella,
Sebastian, Goldwell, and TIGI which are targeted exclusively for
professional and salon use and resale to their customers. For more
information about Sally Beauty Holdings, Inc., please visit
sallybeauty.com
Cautionary Notice Regarding Forward-Looking Statements
Statements in this news release and the schedules hereto which are not
purely historical facts or which depend upon future events may be
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,”
“could,” “may,” “should,” “will,” “would,” or similar expressions may
also identify such forward-looking statements.
Readers are cautioned not to place undue reliance on forward-looking
statements as such statements speak only as of the date they were made.
Any forward-looking statements involve risks and uncertainties that
could cause actual events or results to differ materially from the
events or results described in the forward-looking statements,
including, but not limited to, risks and uncertainties related to: the
highly competitive nature of, and the increasing consolidation of, the
beauty products distribution industry; anticipating changes in consumer
preferences and buying trends or and managing our product lines and
inventory; potential fluctuation in our same store sales and quarterly
financial performance; our dependence upon manufacturers who may be
unwilling or unable to continue to supply products to us; the
possibility of material interruptions in the supply of beauty supply
products by our manufacturers; products sold by us being found to be
defective in labeling or content; compliance with laws and regulations
or becoming subject to additional or more stringent laws and
regulations; product diversion to mass retailers; the operational and
financial performance of our Armstrong McCall, L.P. business; the
success of our new Internet-based business; successfully identifying
acquisition candidates or successfully completing desirable
acquisitions; integrating businesses acquired in the future; the
possibility that we may not recognize the expected tax benefits of our
acquisition of Schoeneman Beauty Supply, Inc.; opening and operating new
stores profitably; the impact of a continued downturn in the economy
upon our business; the success of our cost control plans; protecting our
intellectual property rights, specifically our trademarks; conducting
business outside the United States; disruption in our information
technology systems; natural disasters or acts of terrorism; the
preparedness of our accounting and other management systems to meet
financial reporting and other requirements and the upgrade of our
existing financial reporting system; being a holding company, with no
operations of our own, and depending on our subsidiaries for cash; our
substantial indebtedness; the possibility that we may incur substantial
additional debt; restrictions and limitations in the agreements and
instruments governing our debt; generating the significant amount of
cash needed to service all of our debt and refinancing all or a portion
of our indebtedness or obtaining additional financing; changes in
interest rates increasing the cost of servicing our debt or increasing
our interest expense due to our interest rate swap agreements; the
potential impact on us if the financial institutions we deal with become
impaired; the representativeness of our historical consolidated
financial information with respect to our future financial position,
results of operations or cash flows; our reliance upon Alberto-Culver
for the accuracy of certain historical services and information; the
share distribution of Alberto-Culver common stock in our separation from
Alberto-Culver not constituting a tax-free distribution; actions taken
by certain large shareholders adversely affecting the tax-free nature of
the share distribution of Alberto-Culver common stock; the voting power
of our largest stockholder discouraging third party acquisitions of us
at a premium; and the interests of our largest stockholder differing
from the interests of other holders of our common stock.
Additional factors that could cause actual events or results to differ
materially from the events or results described in the forward-looking
statements can be found in our most recent Annual Report on Form 10-K
for the year ended September 30, 2008, 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.
Source: Sally Beauty Holdings, Inc.
Sally Beauty Holdings, Inc.
Karen Fugate, 940-297-3877
Investor
Relations
http://investor.sallybeautyholdings.com
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