-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UP4cFfzbltzC17tZwH231qhSJBOlqaOimzwj7nz24tvvKTfXQv4omQlXK6dN5LH+ E4iLONwuOWVlr7lUhoNaUg== 0000003327-96-000017.txt : 19960216 0000003327-96-000017.hdr.sgml : 19960216 ACCESSION NUMBER: 0000003327-96-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960213 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALBERTO CULVER CO CENTRAL INDEX KEY: 0000003327 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 362257936 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05050 FILM NUMBER: 96517188 BUSINESS ADDRESS: STREET 1: 2525 ARMITAGE AVE CITY: MELROSE PARK STATE: IL ZIP: 60160 BUSINESS PHONE: 7084503039 MAIL ADDRESS: STREET 1: 2525 ARMITAGE AVENUE CITY: MELROSE PARK STATE: IL ZIP: 60160 10-Q 1 ALBERTO-CULVER COMPANY SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: December 31, 1995 -OR- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-5050 ALBERTO-CULVER COMPANY (Exact name of registrant as specified in its charter) Delaware 36-2257936 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2525 Armitage Avenue Melrose Park, Illinois 60160 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (708) 450-3000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES X NO At December 31, 1995, there were 11,012,995 shares of Class A common stock outstanding and 16,766,240 shares of Class B common stock outstanding. - 1 - PART I ITEM 1. FINANCIAL STATEMENTS
ALBERTO-CULVER COMPANY AND SUBSIDIARIES Consolidated Statements of Earnings Three Months Ended December 31, 1995 and 1994 (dollar amounts in thousands, except per share figures) (Unaudited) 1995 1994 Net sales ................................................ $347,638 311,474 Costs and expenses: Cost of products sold ............................... 178,343 155,548 Advertising, promotion, selling and administrative .. 146,675 136,840 Interest expense, net of interest income of $1,629 in 1995 and $466 in 1994 ........................ 2,102 1,174 Total costs and expenses ............................ 327,120 293,562 Earnings before provision for income taxes ............... 20,518 17,912 Provision for income taxes ............................... 7,643 6,717 Net earnings ............................................. $ 12,875 11,195 Net earnings per share of common stock: Primary ............................................. $ .46 .40 Fully-diluted ....................................... $ .44 .40 Cash dividends paid per share ............................ $ .08 .07 See notes to consolidated financial statements.
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ALBERTO-CULVER COMPANY AND SUBSIDIARIES Consolidated Balance Sheets December 31, 1995 and September 30, 1995 (dollar amounts in thousands, except per share figures) (Unaudited) December 31, September 30, ASSETS 1995 1995 Current assets: Cash and cash equivalents ....................................... $ 129,748 142,585 Short-term investments .......................................... 6,000 4,400 Receivables, less allowance for doubtful accounts ($6,055 at 12/31/95 and $5,663 at 9/30/95) .......... 122,270 128,482 Inventories (Note 3) ............................................ 264,344 248,529 Other current assets ............................................ 12,655 12,549 Total current assets ......................................... 535,017 536,545 Property, plant and equipment at cost, less accumulated depreciation ($134,597 at 12/31/95 and $128,243 at 9/30/95) ..... 164,545 157,791 Goodwill, net ...................................................... 55,303 55,225 Trade names and other intangible assets, net ....................... 34,942 34,198 Other assets ....................................................... 34,834 31,327 Total assets .................................................... $ 824,641 815,086 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and short-term borrowings .. $ 3,186 1,389 Accounts payable ................................................ 138,395 144,253 Accrued expenses ................................................ 73,395 76,141 Income taxes .................................................... 17,933 13,056 Total current liabilities .................................... 232,909 234,839 Long-term debt ..................................................... 84,408 83,094 Convertible subordinated debentures ................................ 100,000 100,000 Deferred income taxes .............................................. 15,198 15,365 Other liabilities .................................................. 11,312 10,885 Stockholders' equity: Common stock, par value $.22 per share: Class A authorized 25,000,000 shares; issued 13,262,624 shares 2,918 2,918 Class B authorized 25,000,000 shares; issued 20,944,424 shares 4,608 4,608 Additional paid-in capital ...................................... 88,614 87,896 Retained earnings ............................................... 348,163 337,506 Foreign currency translation .................................... (14,684) (12,966) 429,619 419,962 Less treasury stock at cost (Class A common shares: 2,249,629 at 12/31/95 and 2,299,618 at 9/30/95; Class B common shares: 4,178,184 at 12/31/95 and at 9/30/95) ........................ 48,805 49,059 Total stockholders' equity ................................ 380,814 370,903 Total liabilities and stockholders' equity ................ $ 824,641 815,086 See notes to consolidated financial statements.
- 3 - ALBERTO-CULVER COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows Three months Ended December 31, 1995 and 1994 (dollar amounts in thousands)
(Unaudited) 1995 1994 Cash Flows from Operating Activities: Net earnings ..................................................... $ 12,875 11,195 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization ............................... 7,057 5,451 Other, net .................................................. (250) (1,218) Cash effects of changes in: Receivables, net .......................................... 5,553 3,805 Inventories ............................................... (16,225) (1,938) Other current assets ...................................... (290) (1,905) Accounts payable and accrued expenses ..................... (1,010) (2,463) Income taxes .............................................. 5,039 5,616 Net cash provided by operating activities ................... 12,749 18,543 Cash Flows from Investing Activities: Short-term investments ........................................... (1,600) (1,840) Capital expenditures ............................................. (12,390) (4,925) Payments for purchased businesses, net of acquired companies' cash (10,576) (283) Other, net ....................................................... (589) (1,305) Net cash used by investing activities ......................... (25,155) (8,353) Cash Flows from Financing Activities: Short-term borrowings ............................................ 1,799 (910) Proceeds from long-term debt ..................................... -- 677 Repayments of long-term debt ..................................... (303) (231) Cash dividends paid .............................................. (2,218) (1,938) Cash proceeds from exercise of stock options ..................... 860 124 Stock purchased for treasury ..................................... (578) -- Net cash used by financing activities ......................... (440) (2,278) Effect of foreign exchange rate changes on cash .................. 9 (156) Net increase (decrease) in cash and cash equivalents ............. (12,837) 7,756 Cash and cash equivalents at beginning of period ................. 142,585 41,833 Cash and cash equivalents at end of period ....................... $ 129,748 $49,589 See notes to consolidated financial statements.
- 4 - ALBERTO-CULVER COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (l) The consolidated financial statements contained in this report have not been examined by independent public accountants, except for balance sheet information presented at September 30, 1995. However, in the opinion of the company, the consolidated financial statements reflect all adjustments, which include only normal adjustments, necessary to present fairly the data contained therein. The results of operations for the periods covered are not necessarily indicative of results for a full year. (2) Primary earnings per share are based on the weighted average shares outstanding, including common stock equivalents, of 27,998,000 and 27,772,000 for the three months ended December 31,1995 and 1994, respectively. Fully diluted earnings per share are determined by dividing net earnings before interest expense on the convertible subordinated debentures (net of tax benefit) by the weighted average shares outstanding after giving effect to common shares to be issued assuming conversion of the convertible subordinated debentures to Class A common stock. Fully- diluted weighted average shares outstanding were 31,191,000 and 27,789,000 for the three months ended December 31, 1995 and 1994, respectively. (3) Inventories consist of the following: (in thousands) December 31, September 30, 1995 1995 Finished goods $231,426 211,224 Work-in-process 5,214 4,897 Raw materials 27,704 32,408 -------- ------- $264,344 248,529 (4) On February 6, 1996, the company completed its acquisition of St. Ives Laboratories, Inc., a hair and skin care products company, through a cash merger valued at approximately $120 million. The merger will be accounted for as a purchase. (5) In prior years, the Consumer Products Division of Alberto-Culver USA recorded certain promotional allowances that were shown as a deduction from the list price reported on customer invoices as promotion expenses. Beginning with the quarter ended December 31, 1995, the company changed the method of reporting sales to a net sales basis thereby reducing sales and promotion expense by $2,843,000. This change had no effect on net income and prior periods have not been restated due to immateriality. The change is in conformity with industry practice and also provides management with financial information that is consistent across other divisions of Alberto-Culver USA. - 5 - ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS FIRST QUARTER ENDED DECEMBER 31, 1995 VS. FIRST QUARTER ENDED DECEMBER 31, 1994 The company achieved record first quarter net sales of $347.6 million in fiscal year 1996, up $36.1 million or 11.6% over the comparable period of fiscal year 1995. Net earnings for the three months ended December 31, 1995 were also a record for the first quarter at $12.9 million or 15.0% higher than the same period of the prior year. Primary earnings per share of 46 cents were 6 cents or 15.0% higher than the same period last year. Fully-diluted earnings per share were 44 cents, up 4 cents or 10.0% from the prior year. The following table presents net sales information by business segment for the first quarter of fiscal years 1996 and 1995: FIRST QUARTER (dollars in millions) Fiscal Year Dollar Percent Net sales: 1996 1995 Change Change Consumer products: Alberto-Culver USA $66.4 71.4 (5.0) (7.0%) Alberto-Culver International 101.8 74.1 27.7 37.4 ----- ----- ----- ----- Total consumer products 168.2 145.5 22.7 15.6 Specialty distribution - Sally 181.4 168.3 13.1 7.8 Eliminations (2.0) (2.3) 0.3 13.0 ------ ----- ----- ----- $347.6 311.5 36.1 11.6% Compared to the same period of the prior year, sales of Alberto-Culver USA "consumer products" decreased $5.0 million or 7.0% for the first quarter of 1996. Sales in the current quarter were lower by $2.8 million due to the change in classification of certain off-invoice promotional allowances discussed in Note 5. Excluding the reclassification, sales were $2.2 million lower for the current quarter, a decrease of 3.0% compared to last year. Sales were lower this year for such brands as Static Guard anti-static spray, Molly McButter dairy sprinkles, Mrs. Dash seasoning products and Consort hair care products. These decreases were partially offset by higher sales of Alberto VO5 shampoo and conditioner, TCB hair care products, Alberto VO5 Hot Oil and FDS feminine deodorant spray. Sales of Alberto-Culver International "consumer products" were $101.8 million for the current quarter, an increase of 37.4% compared to last year. The fiscal 1996 increase primarily resulted from the acquisition of the Toiletries Division of Molnlycke AB in April, 1995. The "specialty distribution-Sally" business segment experienced a sales increase of $13.1 million or 7.8%, reaching $181.4 million for the quarter ended December 31, 1995. The gain was attributable to Sally Beauty Company's sales growth for established stores and the addition of 150 new stores since December 31, 1994. Sally Beauty Company operates 1,536 beauty supply stores offering a full range of salon care products. Cost of products sold as a percent of net sales for the three month period ended December 31, 1995 increased 1.4% compared to the first quarter of the prior year. Higher raw material costs, the disposal of inventories related to discontinued SKUs, and higher sales of close-out merchandise, along with the reclassification discussed in Note 5, contributed to the increase in the cost of products sold percentage. - 6 - Advertising, promotion, selling and administrative expenses rose 7.2% or $9.8 million for the December 31, 1995 quarter versus the comparable period of the prior year. The increase resulted from the acquisition of Molnlycke Toiletries in April, 1995 along with higher selling and administrative costs associated with the increase in the number of Sally Beauty Company stores, partially offset by lower advertising and promotional expenditures for Alberto-Culver USA "consumer products." Advertising, promotion and market research expenditures totaled $43.1 million for the current period versus $41.7 million for the comparable period of the prior year. Interest expense was $3.7 million for the first quarter of fiscal year 1996 versus $1.6 million for the comparable prior period. The increase was primarily attributable to the $100 million of 5.5% convertible subordinated debentures issued in July, 1995 and borrowings related to the Molnlycke Toiletries acquisition in April, 1995. Interest income of $1.6 million for the quarter ended December 31, 1995 was $1.2 million higher than last year mainly due to investing the net proceeds from the convertible subordinated debentures. The provision for income taxes as a percentage of earnings before income taxes was 37.25% and 37.5% for the first quarter of fiscal years 1996 and 1995, respectively. FINANCIAL CONDITION DECEMBER 31, 1995 VS. SEPTEMBER 30, 1995 The ratio of current assets to current liabilities was 2.30 to 1.00 at the end of the first quarter of fiscal year 1996 compared to 2.28 to 1.00 at September 30, 1995. Working capital of $302.1 million remained relatively unchanged from the September 30, 1995 balance of $301.7 million. Total borrowings increased $3.1 million during the first three months of fiscal year 1996. At December 31, 1995, the company had unused lines of credit with various banks of approximately $69 million. For the twelfth consecutive year, the company announced an increase in the quarterly cash dividend on both Class A and Class B common stock, raising it 12.5% to 9 cents per share or 36 cents annually. The dividend is payable February 20, 1996 to stockholders of record on February 5, 1996. - 7 - PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 27 Financial Data Schedule (b) Reports on Form 8-K: No report on Form 8-K was filed by the registrant during the quarter ended December 31, 1995. - 8 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALBERTO-CULVER COMPANY (Registrant) By:/s/William J. Cernugel William J. Cernugel Senior Vice President, Finance & Controller (Principal Financial Officer) February 12, 1996 - 9 - EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the consolidated balance sheet as of December 31, 1995 and the consolidated statement of earnings for the three months ended December 31, 1995 and is qualified in its entirety by reference to such financial statements. 0000003327 ALBERTO-CULVER COMPANY AND SUBSIDIARIES 1,000 US DOLLARS 1.00 3-MOS SEP-30-1996 OCT-01-1995 DEC-31-1995 129,748 6,000 128,325 6,055 264,344 535,017 299,142 134,597 824,641 232,909 184,408 0 0 7,526 373,288 824,641 347,638 347,638 178,343 178,343 146,675 1,357 3,731 20,518 7,643 12,875 0 0 0 12,875 0.46 0.44
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