Business Segments and Geographic Area Information

12 Months Ended

Sep. 30, 2014

Business Segments and Geographic Area Information

Business Segments and Geographic Area Information

18. Business Segments and Geographic Area Information

The Company's business is organized into two separate segments: (i) Sally Beauty Supply, a domestic and international chain of cash and carry retail stores which offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of South America and Europe and (ii) BSG, including its franchise-based business Armstrong McCall, a full service beauty supply distributor which offers professional brands of beauty products directly to salons and salon professionals through its own sales force and professional-only stores (including franchise stores) in partially exclusive geographical territories in North America, Puerto Rico and parts of Europe.

The accounting policies of both of our business segments are the same as described in the summary of significant accounting policies contained in Note 2. Sales between segments, which were eliminated in consolidation, were not material for the fiscal years ended September 30, 2014, 2013 and 2012.

Business Segments Information

Segment data for the fiscal years ended September 30, 2014, 2013 and 2012 is as follows (in thousands):

		Year Ended September 30,
		2014			2013			2012
Net sales:
Sally Beauty Supply		$	2,308,743		$	2,230,028		$	2,198,468
BSG			1,444,755			1,392,188			1,325,176
Total		$	3,753,498		$	3,622,216		$	3,523,644
Earnings before provision for income taxes:
Segment operating profit:
Sally Beauty Supply(a)		$	431,655		$	437,018		$	429,520
BSG			216,971			200,492			182,699
Segment operating profit			648,626			637,510			612,219
Unallocated expenses(b)			(119,523	)		(97,947	)		(96,012	)
Share-based compensation expense(c)			(22,107	)		(19,201	)		(16,852	)
Interest expense(d)			(116,317	)		(107,695	)		(138,412	)
Total		$	390,679		$	412,667		$	360,943
Identifiable assets:
Sally Beauty Supply		$	986,210		$	913,395		$	864,598
BSG			969,674			973,764			959,784
Sub-total			1,955,884			1,887,159			1,824,382
Corporate			74,089			62,927			241,418
Total		$	2,029,973		$	1,950,086		$	2,065,800
Depreciation and amortization:
Sally Beauty Supply		$	41,019		$	37,077		$	31,397
BSG			26,782			24,964			25,984
Corporate			11,862			10,151			7,317
Total		$	79,663		$	72,192		$	64,698
Capital expenditures:
Sally Beauty Supply		$	43,114		$	60,565		$	42,158
BSG			19,179			15,744			11,977
Corporate			14,521			8,570			14,951
Total		$	76,814		$	84,879		$	69,086
(a)	For the fiscal year 2012, Sally Beauty Supply's operating profit reflects a $10.2 million charge resulting from a loss contingency.
(b)	Unallocated expenses consist of corporate and shared costs. For the fiscal year 2014, unallocated expenses reflect a charge of $2.5 million in connection with the data security incident disclosed in March 2014. Unallocated expenses are included in selling, general and administrative expenses in our consolidated statements of earnings.
(c)	For the fiscal year 2014, share-based compensation expenses reflect a charge of $3.5 million in connection with the executive management transition plan. Share-based compensation expenses are included in selling, general and administrative expenses in our consolidated statements of earnings.
(d)	For the fiscal year 2012, interest expense includes losses on extinguishment of debt in the aggregate amount of $37.8 million in connection with the Company's redemption of outstanding notes and repayment of a term loan.

Geographic Area Information

Geographic data for the fiscal years ended September 30, 2014, 2013 and 2012 is as follows (in thousands):

		Year Ended September 30,
		2014		2013		2012
Net sales:(a)
United States		$	3,031,000	$	2,943,959	$	2,885,958
Other Countries			722,498		678,257		637,686
Total		$	3,753,498	$	3,622,216	$	3,523,644
Identifiable assets:
United States		$	1,432,671	$	1,356,969	$	1,325,787
Other Countries			523,213		530,190		498,595
Corporate			74,089		62,927		241,418
Total		$	2,029,973	$	1,950,086	$	2,065,800
(a)	Net sales are attributable to individual countries based on the location of the customer.