Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Nov. 09, 2016 | Mar. 31, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Sally Beauty Holdings, Inc. | ||
Entity Central Index Key | 1,368,458 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 4,716,726,000 | ||
Entity Common Stock, Shares Outstanding | 144,109,429 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 86,622 | $ 140,038 |
Trade accounts receivable, net | 46,942 | 48,602 |
Accounts receivable, other | 37,041 | 42,490 |
Inventory | 907,337 | 885,214 |
Other current assets | 54,861 | 37,049 |
Deferred income tax assets | 40,024 | 33,709 |
Total current assets | 1,172,827 | 1,187,102 |
Property and equipment, net | 319,558 | 270,847 |
Goodwill | 532,714 | 524,369 |
Intangible assets, excluding goodwill, net | 92,963 | 98,848 |
Other assets | 14,001 | 13,185 |
Total assets | 2,132,063 | 2,094,351 |
Current liabilities: | ||
Current maturities of long-term debt | 716 | 755 |
Accounts payable | 271,376 | 275,917 |
Accrued liabilities | 214,584 | 208,717 |
Income taxes payable | 1,989 | 6,310 |
Total current liabilities | 488,665 | 491,699 |
Long-term debt | 1,783,294 | 1,786,839 |
Other liabilities | 21,614 | 27,734 |
Deferred income tax liabilities | 114,656 | 85,900 |
Total liabilities | 2,408,229 | 2,392,172 |
Stockholders' deficit: | ||
Common stock, $0.01 par value. Authorized 500,000 shares;144,842 and 151,898 shares issued and 144,571 and 151,452 shares outstanding at September 30, 2016 and 2015, respectively | 1,446 | 1,515 |
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued | ||
Accumulated deficit | (177,561) | (218,670) |
Treasury Stock, 121 shares, at cost | (2,961) | |
Accumulated other comprehensive loss, net of tax | (100,051) | (77,705) |
Total stockholders' deficit | (276,166) | (297,821) |
Total liabilities and stockholders' deficit | $ 2,132,063 | $ 2,094,351 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 500,000 | 500,000 |
Common stock, shares issued | 144,842 | 151,898 |
Common stock, shares outstanding | 144,571 | 151,452 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 50,000 | 50,000 |
Preferred stock, shares issued | 0 | 0 |
Treasury stock shares, at cost | 121 | 121 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Earnings | |||||||||||
Net sales | $ 976,358 | $ 998,161 | $ 980,067 | $ 998,032 | $ 964,230 | $ 967,890 | $ 937,755 | $ 964,468 | $ 3,952,618 | $ 3,834,343 | $ 3,753,498 |
Cost of products sold and distribution expenses | 1,988,678 | 1,936,492 | 1,893,326 | ||||||||
Gross profit | 483,441 | 498,976 | 487,474 | 494,049 | 475,311 | 481,319 | 467,452 | 473,769 | 1,963,940 | 1,897,851 | 1,860,172 |
Selling, general and administrative expenses | 1,365,986 | 1,313,134 | 1,273,513 | ||||||||
Depreciation and amortization | 99,657 | 89,391 | 79,663 | ||||||||
Operating earnings | 498,297 | 495,326 | 506,996 | ||||||||
Interest expense | 144,237 | 116,842 | 116,317 | ||||||||
Earnings before provision for income taxes | 354,060 | 378,484 | 390,679 | ||||||||
Provision for income taxes | 131,118 | 143,397 | 144,686 | ||||||||
Net earnings | $ 52,621 | $ 67,919 | $ 60,159 | $ 42,243 | $ 56,180 | $ 62,463 | $ 61,535 | $ 54,909 | $ 222,942 | $ 235,087 | $ 245,993 |
Basic earnings per share (in dollars per share) | $ 0.36 | $ 0.47 | $ 0.41 | $ 0.28 | $ 0.36 | $ 0.40 | $ 0.39 | $ 0.35 | $ 1.51 | $ 1.50 | $ 1.54 |
Diluted earnings per share (in dollars per share) | $ 0.36 | $ 0.46 | $ 0.41 | $ 0.28 | $ 0.36 | $ 0.39 | $ 0.39 | $ 0.35 | $ 1.50 | $ 1.49 | $ 1.51 |
Weighted average shares: | |||||||||||
Basic (in shares) | 147,179 | 156,353 | 159,933 | ||||||||
Diluted (in shares) | 148,803 | 158,226 | 163,419 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Comprehensive Income | |||
Net earnings | $ 222,942 | $ 235,087 | $ 245,993 |
Other comprehensive loss | |||
Foreign currency translation adjustments | (22,346) | (49,157) | (19,308) |
Income taxes related to other comprehensive income | 578 | ||
Other comprehensive loss, net of tax | (22,346) | (49,157) | (18,730) |
Total comprehensive income | $ 200,596 | $ 185,930 | $ 227,263 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cash Flows from Operating Activities: | |||
Net earnings | $ 222,942 | $ 235,087 | $ 245,993 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 99,657 | 89,391 | 79,663 |
Share-based compensation expense | 12,580 | 16,778 | 22,107 |
Amortization of deferred financing costs | 3,255 | 3,789 | 3,759 |
Excess tax benefit from share-based compensation | (1,347) | (22,084) | (14,646) |
Net loss on disposal of property and equipment | 495 | 2,570 | 354 |
Net loss on extinguishment of debt | 33,296 | ||
Deferred income taxes | 21,460 | 7,121 | (815) |
Changes in (exclusive of effects of acquisitions): | |||
Trade accounts receivable | 936 | 774 | 4,020 |
Accounts receivable, other | 4,697 | 3,255 | (7,715) |
Inventory | (31,397) | (80,321) | (27,533) |
Other current assets | (17,194) | 2,516 | 7,180 |
Other assets | (1,964) | (744) | (1,203) |
Accounts payable and accrued liabilities | 13,621 | 19,575 | 2,726 |
Income taxes payable | (4,331) | 22,924 | (1,529) |
Other liabilities | (5,701) | 156 | 3,611 |
Net cash provided by operating activities | 351,005 | 300,787 | 315,972 |
Cash Flows from Investing Activities: | |||
Capital expenditures | (151,220) | (106,532) | (76,814) |
Proceeds from sales of property and equipment | 2,531 | 182 | 258 |
Acquisitions, net of cash acquired | (26,141) | (6,468) | (5,198) |
Net cash used by investing activities | (174,830) | (112,818) | (81,754) |
Cash Flows from Financing Activities: | |||
Proceeds from issuances of long-term debt | 912,000 | 983 | 356,247 |
Repayments of long-term debt | (938,537) | (1,814) | (234,103) |
Repurchases of common stock | (207,312) | (227,559) | (333,291) |
Debt issuance costs | (12,748) | (3,896) | |
Proceeds from exercises of stock options | 16,220 | 54,351 | 26,663 |
Excess tax benefit from share-based compensation | 1,347 | 22,084 | 14,646 |
Net cash used by financing activities | (229,030) | (151,955) | (173,734) |
Effect of foreign exchange rate changes on cash and cash equivalents | (561) | (2,551) | (1,024) |
Net increase (decrease) in cash and cash equivalents | (53,416) | 33,463 | 59,460 |
Cash and cash equivalents, beginning of year | 140,038 | 106,575 | 47,115 |
Cash and cash equivalents, end of year | 86,622 | 140,038 | 106,575 |
Supplemental Cash Flow Information: | |||
Interest paid | 138,956 | 113,041 | 107,882 |
Income taxes paid | $ 123,738 | $ 107,589 | $ 138,852 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) $ in Millions | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Senior notes due Nov. 2019 | |
Consolidated Statements of Cash Flows (Parenthetical) | |
Call premiums paid upon the redemption of certain notes | $ 25.8 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Loss | Total |
Balance at Sep. 30, 2013 | $ 1,644 | $ 91,022 | $ (385,090) | $ (1,237) | $ (9,818) | $ (303,479) |
Balance (in shares) at Sep. 30, 2013 | 164,425 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 245,993 | 245,993 | ||||
Other comprehensive loss | (18,730) | (18,730) | ||||
Repurchases and cancellations of common stock | $ (126) | (153,447) | (180,955) | 1,237 | (333,291) | |
Repurchase and cancellations of common stock (in shares) | (12,633) | |||||
Share-based compensation | $ 2 | 22,105 | 22,107 | |||
Share-based compensation (in shares) | 149 | |||||
Stock issued for stock options | $ 27 | 40,320 | 40,347 | |||
Stock issued for stock options (in shares) | 2,727 | |||||
Balance at Sep. 30, 2014 | $ 1,547 | (320,052) | (28,548) | (347,053) | ||
Balance (in shares) at Sep. 30, 2014 | 154,668 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 235,087 | 235,087 | ||||
Other comprehensive loss | (49,157) | (49,157) | ||||
Repurchases and cancellations of common stock | $ (80) | (90,813) | (133,705) | (2,961) | (227,559) | |
Repurchase and cancellations of common stock (in shares) | (7,977) | |||||
Share-based compensation | $ 2 | 16,776 | 16,778 | |||
Share-based compensation (in shares) | 184 | |||||
Stock issued for stock options | $ 46 | 74,037 | 74,083 | |||
Stock issued for stock options (in shares) | 4,577 | |||||
Balance at Sep. 30, 2015 | $ 1,515 | (218,670) | (2,961) | (77,705) | $ (297,821) | |
Balance (in shares) at Sep. 30, 2015 | 151,452 | 151,452 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 222,942 | $ 222,942 | ||||
Other comprehensive loss | (22,346) | (22,346) | ||||
Repurchases and cancellations of common stock | $ (79) | (28,361) | (181,833) | $ 2,961 | (207,312) | |
Repurchase and cancellations of common stock (in shares) | (7,950) | |||||
Share-based compensation | $ 1 | 12,579 | 12,580 | |||
Share-based compensation (in shares) | 131 | |||||
Stock issued for stock options | $ 9 | $ 15,782 | 15,791 | |||
Stock issued for stock options (in shares) | 938 | |||||
Balance at Sep. 30, 2016 | $ 1,446 | $ (177,561) | $ (100,051) | $ (276,166) | ||
Balance (in shares) at Sep. 30, 2016 | 144,571 | 144,571 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Sep. 30, 2016 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business Sally Beauty Holdings, Inc. and its consolidated subsidiaries ("Sally Beauty" or "the Company") sell professional beauty supplies through its Sally Beauty Supply retail stores located in the U.S., Puerto Rico, Canada, Mexico, Chile, Colombia, Peru, the United Kingdom, Ireland, Belgium, France, Germany, the Netherlands and Spain. Additionally, the Company distributes professional beauty products to salons and salon professionals through its Beauty Systems Group ("BSG") store operations and a commissioned direct sales force that calls on salons primarily in the U.S., Canada, the United Kingdom and certain other countries in Europe, and to franchises in the southern and southwestern regions of the U.S. and in Mexico through the operations of its subsidiary Armstrong McCall. A significant number of the Company's products are also available through a number of Sally Beauty Supply and BSG-operated websites. Certain beauty products sold by BSG and Armstrong McCall are sold under exclusive territory agreements with the manufacturers of the products. Sally Beauty Supply began operations with a single store in New Orleans in 1964 and was acquired in 1969 by our former parent company, The Alberto-Culver Company, which we refer to as Alberto-Culver. BSG became a subsidiary of Sally Beauty in 1995. In 2006, the Company separated from Alberto-Culver and became an independent company listed on the New York Stock Exchange. Basis of Presentation The consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts for prior fiscal years have been reclassified to conform to the current fiscal year's presentation. All references in these notes to "management" are to the management of Sally Beauty. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2016 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies The preparation of financial statements in conformity with GAAP requires us to interpret and apply accounting standards and to develop and follow accounting policies consistent with such standards. The following is a summary of the significant accounting policies used in preparing the Company's consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures of contingent liabilities in the financial statements. Our most significant estimates relate to: the valuation of inventory, vendor rebates and concessions, retention of risk, income taxes, the assessment of long-lived assets and intangible assets for impairment, loss contingencies and share-based payments. The level of uncertainty in estimates and assumptions generally increases with the length of time until the underlying transactions are completed. Actual results may differ from these estimates in amounts that may be material to the financial statements. Management believes that the estimates and assumptions used in the preparation of the Company's consolidated financial statements are reasonable. Cash and Cash Equivalents Cash equivalents generally represent highly liquid investments purchased by the Company from time to time which have an original maturity of three months or less. These investments are stated at cost, which approximates fair value. In addition, cash equivalents include proceeds due from customer credit and debit cards and PayPal transactions, which generally settle within one to three days, and were $15.1 million and $13.3 million at September 30, 2016 and 2015, respectively. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of investments in cash equivalents, accounts receivable and derivative instruments. The Company invests from time to time in securities of financial institutions it deems to be of high creditworthiness. Accounts receivable are deemed by the Company to be highly diversified due to the large number of individual customers comprising the Company's customer base and their dispersion across diverse geographical regions. The counterparties to our derivative instruments are deemed by the Company to be of substantial resources and strong creditworthiness. The Company believes that no significant concentration of credit risk exists with respect to its investments in cash equivalents, its accounts receivable and its derivative instruments at September 30, 2016 and 2015. Trade Accounts Receivable and Accounts Receivable, Other Trade accounts receivable are recorded at the values invoiced to customers and do not accrue interest. Trade accounts receivable are stated net of the allowance for doubtful accounts. The allowance for doubtful accounts requires management to estimate the future collectability of amounts receivable at the balance sheet date. The Company records allowances for doubtful accounts on the basis of its historical collection data and current customer information. Customer account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. In the Company's consolidated statements of earnings, bad debt expense is included in selling, general and administrative expenses. The Company's exposure to credit risk with respect to trade receivables is mitigated by the Company's broad customer base and their dispersion across diverse geographical regions. Accounts receivable, other, consist primarily of amounts earned from vendors under various contractual agreements and are recorded at the amounts management estimates will be collected. Inventory Inventory consists primarily of beauty supplies and related accessories, and salon equipment for sale in the normal course of our business. Inventory is stated at the lower of cost, determined using the first-in, first-out ("FIFO") method, or net realizable value. Inventory cost reflects actual product costs, the cost of transportation to the Company's distribution centers and certain shipping and handling costs, such as freight from the distribution centers to the stores and handling costs incurred at the distribution centers. When necessary, the Company adjusts the carrying value of inventory to the lower of cost or net realizable value, including anticipated disposal costs and for estimated inventory shrinkage. When assessing the net realizable value of inventory, management considers several factors including estimates of future demand for the Company's products, historical turn-over rates, the age and sales history of the inventory, and historic as well as anticipated changes in stock keeping units ("SKUs"). The Company estimates inventory shrinkage between physical counts based on its historical experience. Physical inventory counts are performed at substantially all stores and significant distribution centers at least annually, and sooner when management has reason to believe that the risk of inventory shrinkage at a particular location is heightened. Upon completion of physical inventory counts, the Company's consolidated financial statements are adjusted to reflect actual quantities on hand. The Company has policies and processes in place that are intended to minimize inventory shrinkage. Inventory shrinkage expense has averaged approximately 1.0% of our consolidated net sales during each of the past three fiscal years. Lease Accounting The majority of the Company's lease agreements for office space, company-operated stores and warehouse/distribution facilities are accounted for as operating leases, consistent with Accounting Standards Codification ("ASC") Topic 840, Leases . Please see Note 3, Recent Accounting Pronouncements, below for information about a new lease accounting standard released in February 2016 which is effective for fiscal years beginning after December 15, 2018. Rent expense (including any rent abatements or escalation charges) is recognized on a straight-line basis from the date the Company takes possession of the property to begin preparation of the site for occupancy to the end of the lease term, including renewal options determined to be reasonably assured. Certain lease agreements to which the Company is a party provide for contingent rents that are determined as a percentage of revenues in excess of specified levels. The Company records a contingent rent liability, along with the corresponding rent expense, when the specified levels of revenue have been achieved or when management determines that achieving the specified levels of revenue during the fiscal year is probable. Certain lease agreements to which the Company is a party provide for tenant improvement allowances. Such allowances are recorded as deferred lease credits, included in accrued liabilities and other liabilities, as appropriate, on our consolidated balance sheets, and amortized on a straight-line basis over the lease term (including renewal options determined to be reasonably assured) as a reduction of rent expense. The amortization period used for deferred lease credits is generally consistent with the amortization period used for the constructed leasehold improvement asset for a given office, store or warehouse facility. Valuation of Long-Lived Assets and Intangible Assets with Definite Lives Long-lived assets, such as property and equipment, including store equipment, and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The recoverability of long-lived assets and intangible assets subject to amortization is assessed by comparing the net carrying amount of each asset to its total estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. There were no significant impairment losses recognized in our consolidated financial statements in the current or prior fiscal years presented in connection with long-lived assets and intangible assets subject to amortization. The Company's intangible assets subject to amortization include customer relationships, certain distribution rights and non-competition agreements, and are amortized, on a straight-line basis, over periods of two to thirteen years. Such amortization periods are based on the estimated useful lives of the assets and take into account the terms of any underlying agreements, but do not generally reflect all renewal terms contractually available to the Company. Goodwill and Intangible Assets with Indefinite Lives Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Our intangible assets with indefinite lives consist of trade names acquired in business combinations. Goodwill and intangible assets with indefinite lives are reviewed for impairment at least annually, during our second fiscal quarter, and whenever events or changes in circumstances indicate it is more-likely-than-not that the value of the asset may be impaired. When assessing goodwill and intangible assets with indefinite lives for potential impairment, management considers whether the value of the asset has been impaired by evaluating if various factors (including current operating results, anticipated future results and cash flows, and relevant market and economic conditions) indicate a possible impairment and, if appropriate, compares the carrying amount of the asset to its fair value. Based on management's assessments, after taking into account potential triggering events, including the recent decline in the average daily trading prices for shares of our common stock, there was no material impairment of goodwill or intangible assets with indefinite lives recognized in our financial statements in the current or prior fiscal years presented. Deferred Financing Costs Certain costs incurred in connection with the issuance of debt are capitalized when incurred and are amortized over the estimated term of the related debt instruments or agreements generally using the effective interest method. Unamortized deferred financing costs are expensed proportionally when certain debt is prepaid or notes are redeemed. At September 30, 2016 and 2015, unamortized debt issuance costs of $23.7 million and $21.8 million, respectively, related to our senior notes are reported as a deduction from the related long-term debt obligations (in long-term debt) on the Company's consolidated balance sheets. In addition, unamortized debt issuance costs related to the Company's five-year asset-based senior secured loan facility (the "ABL facility") of $1.6 million and $2.4 million, at September 30, 2016 and 2015, respectively, are reported in other assets in our consolidated balance sheets. Self-Insurance Programs The Company retains a substantial portion of the risk related to certain of its workers' compensation, general and auto liability, and property damage insurable loss exposure. Predetermined loss limits have been arranged with insurance companies to limit the Company's exposure per occurrence and aggregate cash outlay. In addition, certain of our employees and their dependents are covered by a self-insurance program for healthcare benefit purposes (the "healthcare plan"). Currently these self-insurance costs (less amounts recovered through payroll deductions) and certain out-of-pocket amounts incurred in connection with the employee healthcare program are funded by the Company. The Company maintains an annual stop-loss insurance policy for the healthcare plan. The Company records an estimated liability for the ultimate cost of claims incurred and unpaid as of the balance sheet date, which includes claims filed and estimated losses incurred but not yet reported. The Company estimates the ultimate cost based on an analysis of its historical data and actuarial estimates. Workers' compensation, general and auto liability and property damage insurable loss liabilities are recorded at the estimate of their net present value, while healthcare plan liabilities are not discounted. These estimates are reviewed on a regular basis to ensure that the recorded liability is adequate. During the fiscal year ended September 30, 2016, the Company recorded a favorable expense adjustment of $6.3 million resulting from a decrease in estimated future payments in connection with certain of its self-insurance programs. The Company believes the amounts accrued at September 30, 2016 and 2015, are adequate. Revenue Recognition The Company recognizes sales revenue when a customer consummates a point-of-sale transaction at a store. The cost of sales incentive programs, including customer and consumer coupons, is recognized as a reduction of revenue at the time of sale. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and are excluded from revenue. The Company also recognizes revenue on merchandise shipped to customers when title and risk of loss pass to the customer (generally upon shipment). Appropriate provisions for sales returns and cash discounts are made at the time the sales are recognized. Sales returns and allowances averaged approximately 2.0% of net sales during each of the past three fiscal years. Please see Note 3, Recent Accounting Pronouncements, below for more information about a new revenue accounting standard released in May 2014, which is effective for fiscal years beginning after December 15, 2017. Cost of Products Sold and Distribution Expenses Cost of products sold and distribution expenses include actual product costs, the cost of transportation to the Company's distribution centers, vendor rebates and allowances, inventory shrinkage and certain shipping and handling costs, such as freight from the distribution centers to the stores and handling costs incurred at the distribution centers. All other shipping and handling costs are included in selling, general and administrative expenses when incurred. Shipping and Handling Shipping and handling costs (including freight and distribution expenses) related to delivery to customers are included in selling, general and administrative expenses in our consolidated statements of earnings when incurred and amounted to $56.2 million, $53.1 million and $52.2 million for the fiscal years 2016, 2015 and 2014, respectively. Advertising Costs Advertising costs relate mainly to print advertisements, digital marketing, trade shows and product education for salon professionals. Advertising costs incurred in connection with print advertisements are expensed the first time the advertisement is run. Other advertising costs are expensed when incurred. Advertising costs were $93.0 million, $95.3 million and $90.2 million for the fiscal years 2016, 2015 and 2014, respectively, and are included in selling, general and administrative expenses in our consolidated statements of earnings. Vendor Rebates and Concessions The Company deems a cash consideration received from a supplier to be a reduction of the cost of products sold unless it is in exchange for an asset or service or a reimbursement of a specific, incremental, identifiable cost incurred by the Company in selling the vendor's products. The majority of cash consideration received by the Company is considered to be a reduction of the cost of the related products and is reflected in cost of products sold and distribution expenses in our consolidated statements of earnings as the related products are sold. Any portion of such cash consideration received that is attributable to inventory on hand is reflected as a reduction of inventory. Income Taxes The Company recognizes deferred income taxes for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are estimated to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of earnings in the period of enactment. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount expected to be realized unless it is more-likely-than-not that such assets will be realized in full. The estimated tax benefit of an uncertain tax position is recorded in our financial statements only after determining a more-likely-than-not probability that the uncertain tax position will withstand challenge, if any, from applicable taxing authorities. Foreign Currency The functional currency of each of the Company's foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (the Company's reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individually material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in our consolidated balance sheets. Foreign currency transaction gains or losses, including changes in the fair value (i.e., marked-to-market adjustments) of certain foreign exchange contracts held by the Company, are included in selling, general and administrative expenses in our consolidated statements of earnings when incurred and were not significant in any of the periods presented in the accompanying financial statements. Please see Note 14 below for more information about the Company's foreign exchange contracts. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2016 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 3. Recent Accounting Pronouncements The Company has not yet adopted and is currently assessing the potential effect of the following pronouncements on its consolidated financial statements: In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Income Taxes ("ASU 2015-17") which aims to simplify the classification of deferred taxes on the balance sheet. More specifically, ASU 2015-17 will require that all deferred tax assets and liabilities, and any related valuation allowance, be reported as noncurrent in a classified balance sheet. The new guidance will replace the existing practice of reporting deferred taxes for each tax jurisdiction (or taxing component of a jurisdiction) as (a) a net current asset or liability and (b) a net noncurrent asset or liability. The new guidance does not change the existing requirement that only permits offsetting assets and liabilities within the same jurisdiction. For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. In February 2016, the FASB issued ASU No. 2016-02, Leases , which will require lessees to report on their balance sheets a right-of-use asset and a lease liability in connection with most lease agreements classified as operating leases under the current guidance. The lease liability will be measured based on the present value of future lease payments, subject to certain conditions. The right-of-use asset will be measured based on the initial amount of the liability, plus certain initial direct costs. The new guidance will further require that leases be classified at inception as either (a) operating leases or (b) finance leases. For operating leases, periodic expense will generally be flat (straight-line) throughout the life of the lease. For finance leases, periodic expense will decline (similar to capital leases under current rules) over the life of the lease. The new standard must be adopted using a modified retrospective transition method. For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , intended to simplify various aspects of how share-based payments are recorded and presented on the financial statements. For example, the new guidance will require that all the income tax effect related to share-based payments be recorded in income tax expense. The new guidance further removes the current requirement to delay recognition of a windfall tax benefit until it reduces current taxes payable. In addition, the new standard will require that excess tax benefits and shortfalls from share-based compensation awards be reported as operating activities in the statement of cash flows. For public companies, these amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. In addition, the Company has not yet adopted the following recent accounting pronouncements and does not believe their adoption will have a material effect on its consolidated financial statements: In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers which will supersede ASC Topic 605, Revenue Recognition . In August 2015, the FASB deferred the effective date of this new standard by one year. A core principle of the new guidance is that an entity should measure revenue in connection with its sale of goods and services to a customer based on an amount that depicts the consideration to which the entity expects to be entitled in exchange for each of those goods and services. For a contract that involves more than one performance obligation, the entity must (a) determine or, if necessary, estimate the standalone selling price at inception of the contract for the distinct goods or services underlying each performance obligation and (b) allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices. In addition, under the new guidance, an entity should recognize revenue when (or as) it satisfies each performance obligation under the contract by transferring the promised good or service to the customer. A good or service is deemed transferred when (or as) the customer obtains control of that good or service. The new standard permits the use of either the retrospective or cumulative effect transition method. For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted, but no earlier than December 16, 2016. The Company has not yet selected a transition method. In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in Cloud Computing Arrangement . This pronouncement provides guidance to determine whether a cloud-based computing arrangement includes a software license. If a cloud-based computing arrangement includes a software license, the customer must account for the software element of the arrangement consistent with the acquisition of other software licenses. Otherwise, the customer must account for the arrangement as a service contract. The new standard permits the use of either the prospective or retrospective transition method. For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16") which will eliminate the current requirement to recognize measurement-period adjustments to provisional amounts retrospectively. Instead, ASU 2015-16 requires the acquirer to recognize measurement-period adjustments, as well as the impact on earnings of changes in depreciation, amortization and similar items (if any) resulting from the change to the provisional amounts, in the period when the amount of each measurement-period adjustment is determined. For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements The Company's financial instruments consist of cash equivalents, trade and other accounts receivable, accounts payable, foreign currency derivative instruments and debt. The carrying amounts of cash equivalents, trade and other accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. The Company measures on a recurring basis and discloses the fair value of its financial instruments under the provisions of ASC Topic 820, Fair Value Measurement , as amended ("ASC 820"). The Company defines "fair value" as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for measuring fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels of that hierarchy are defined as follows: Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2— Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data; and Level 3— Unobservable inputs for the asset or liability. Consistent with this hierarchy, the Company categorized certain of its financial assets and liabilities as follows at September 30, 2016 and 2015 (in thousands): As of September 30, 2016 Total Level 1 Level 2 Level 3 Assets Cash equivalents(a) $ — $ — $ — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ — $ — $ — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Long-term debt(c) $ $ $ — Foreign exchange contracts(b) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2015 Total Level 1 Level 2 Level 3 Assets Cash equivalents(a) $ $ $ — — Foreign exchange contracts(b) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Long-term debt(c) $ $ $ — Foreign exchange contracts(b) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Cash equivalents at September 30, 2015 consist of highly liquid investments which have no maturity and are valued using unadjusted quoted market prices for such securities. The Company may from time to time invest in securities with maturities of three months or less (consisting primarily of investment-grade corporate and government bonds), with the primary investment objective of minimizing the potential risk of loss of principal. (b) Foreign exchange contracts (including foreign currency forwards and options) are valued for purposes of this disclosure using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market foreign currency exchange rates. Please see Note 14 for more information about the Company's foreign exchange contracts. (c) At September 30, 2016 and 2015, long-term debt (including current maturities and borrowings under the ABL facility, if any) is reported in the Company's consolidated financial statements at amortized cost of $1,807.7 million and $1,809.4 million, respectively, less unamortized debt issuance costs of $23.7 million and $21.8 million, respectively. The Company's senior notes are valued for purposes of this disclosure using unadjusted quoted market prices for such debt securities. Other long-term debt (consisting primarily of borrowings under the ABL facility, if any, and capital lease obligations) is generally valued for purposes of this disclosure using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market interest rates. Please see Note 13 for more information about the Company's debt. |
Accumulated Stockholders' Defic
Accumulated Stockholders' Deficit | 12 Months Ended |
Sep. 30, 2016 | |
Accumulated Stockholders' Deficit | |
Accumulated Stockholders' Deficit | 5. Accumulated Stockholders' Deficit The Company is authorized to issue up to 500.0 million shares of common stock with a par value of $0.01 per share and up to 50.0 million shares of preferred stock with a par value of $0.01 per share. As of September 30, 2016, the Company had approximately 144.8 million shares issued of its common stock and approximately 144.6 million shares outstanding. There have been no shares of the Company's preferred stock issued. In August 2014, the Company announced that its Board of Directors (the "Board") approved a share repurchase program authorizing the Company to repurchase up to $1.0 billion of its common stock over an approximate three-year period expiring on September 30, 2017 (the "2014 Share Repurchase Program"). During the fiscal years ended September 30, 2016 and 2015, the Company repurchased and subsequently retired approximately 7.8 million and 8.1 million shares of its common stock, respectively, under the 2014 Share Repurchase Program at a cost of $207.3 million and $227.6 million, respectively. In addition, during the fiscal year ended September 30, 2014, the Company repurchased and retired approximately 12.6 million shares of its common stock under the 2013 Share Repurchase Program (a share repurchase program approved by the Board in March 2013 and terminated in connection with the authorization of the 2014 Share Repurchase Program) at a cost of $333.3 million. We reduced common stock and additional paid-in capital, in the aggregate, by these amounts. However, as required by GAAP, to the extent that share repurchase amounts exceeded the balance of additional paid-in capital prior to us recording such repurchases, we recorded the excess in accumulated deficit. The Company funded these share repurchases with cash from operations, borrowings under the ABL facility and a portion of the cash proceeds from our October 2013 debt issuance. At September 30, 2016 and 2015, accumulated other comprehensive loss consists of cumulative foreign currency translation adjustments of $100.1 million and $77.7 million, respectively, and is net of income taxes of $2.3 million at both dates. Comprehensive income reflects changes in accumulated stockholders' deficit from sources other than transactions with stockholders and, as such, includes net earnings and certain other specified components. Currently, the Company's only component of comprehensive income, other than net earnings, is foreign currency translation adjustments, net of income tax. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share | |
Earnings Per Share | 6. Earnings Per Share Basic earnings per share, is calculated by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share, is calculated similarly but includes the potential dilution from the exercise of all outstanding stock options and stock awards, except when the effect would be anti-dilutive. The following table sets forth the computations of basic and diluted earnings per share (in thousands, except per share data): Year ended September 30, 2016 2015 2014 Net earnings $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total weighted average basic shares Dilutive securities: Stock options and stock award programs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total weighted average diluted shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share: Basic $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At September 30, 2016, 2015 and 2014, options to purchase 1,061,068, 1,090,459 and 130,952 shares, respectively, of the Company's common stock were outstanding but not included in the computation of diluted earnings per share, since these options were anti-dilutive. An anti-dilutive option is an option that is: (a) out-of-the-money (an option the exercise price of which is greater than the average price per share of the Company's common stock during the period), and (b) in-the-money (an option the exercise price of which is less than the average price per share of the Company's common stock during the period) for which the sum of assumed proceeds, including any unrecognized compensation expense related to such option, exceeds the average price per share for the period. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Sep. 30, 2016 | |
Share-Based Payments | |
Share-Based Payments | 7. Share-Based Payments The Company from time to time may grant performance-based awards and service-based awards to its employees under the Sally Beauty Holdings, Inc. Amended and Restated 2010 Omnibus Incentive Plan (the "2010 Plan"), a stockholder-approved share-based compensation plan which allows for the issuance of up to 29.8 million shares of the Company's common stock. As such, during the fiscal years ended September 30, 2016, 2015 and 2014, the Company granted approximately 1.5 million, 1.2 million and 1.6 million service-based stock options, respectively, and approximately 40,000, 222,000 and 247,000 service-based restricted stock awards, respectively, to its employees under the 2010 Plan. In addition, during the fiscal year ended September 30, 2016, the Company granted approximately 152,000 performance-based restricted stock units ("Performance Units") to its employees under the 2010 Plan. Furthermore, during the fiscal years ended September 30, 2016, 2015 and 2014, the Company granted approximately 28,000, 20,000 and 27,000 service-based restricted stock units, respectively, to its non-employee directors under the 2010 Plan. The Company measures the cost of services received from employees and directors in exchange for an award of equity instruments based on the fair value of the award on the date of grant, and recognizes compensation expense on a straight-line basis over the vesting period or, in connection with service-based awards, over the period ending on the date a participant becomes eligible for retirement, if earlier. For the fiscal years 2016, 2015 and 2014, total compensation cost charged against income and included in selling, general and administrative expenses in the Company's consolidated statements of earnings for all share-based compensation arrangements was $12.6 million, $16.8 million and $22.1 million, respectively, and resulted in an increase in additional paid-in capital by the same amounts. These amounts include, for the fiscal years 2016, 2015 and 2014, $1.3 million, $4.8 million and $8.8 million, respectively, of accelerated expense related to certain retirement eligible employees who continue vesting in service-based awards upon retirement, pursuant to provisions contained in the 2010 Plan, including, for the fiscal year 2014, expense of $3.5 million in connection with the executive management transition plan announced in May 2014. For fiscal years 2016, 2015 and 2014, the total income tax benefit recognized in our consolidated statements of earnings in connection with all share-based compensation awards was $4.8 million, $6.3 million and $8.2 million, respectively. Performance-Based Awards The Company from time to time may grant Performance Units under the 2010 Plan. Performance Units represent unsecured obligations of the Company to issue shares of its common stock. The number of shares, if any, which will be issued in connection with these awards, is contingent upon both (a) employee service conditions and (b) the Company's level of achievement with respect to specified performance targets. The Company measures the cost of services received from employees in exchange for an award of Performance Units based on the fair value of the award on the date of grant and it recognizes expense over the requisite service period (generally three years). The fair value of a Performance Unit is determined based on the closing market price of the Company's common stock on the date of grant. During the fiscal year ended September 30, 2016, the Company granted approximately 152,000 Performance Units ("target units") to its employees. Under the terms of these awards, a grantee may earn from 0% to 200% of his or her target units, with the ultimate number of units earned upon settlement (and expense recognized) dependent on the Company's level of achievement with respect to certain specified cumulative performance targets during the three-year period ending on September 30, 2018 (the "Performance Period") and satisfaction of the employee service condition. Periodic expense for Performance Unit awards, which is estimated quarterly, is based on the Company's projected performance during the Performance Period compared to the performance targets contained in the award. As such, for the fiscal year ended September 30, 2016, the Company has estimated and recognized compensation expense at 100% of the performance targets since it believes achievement of that percentage of the performance targets is probable. To date, the Company has only granted Performance Units subject to the Company's level of achievement with respect to specified performance targets related to: consolidated sales growth and return on invested capital, in addition to service conditions. The awards issued during the fiscal year ended September 30, 2016 contain a performance matrix for each of the two performance metrics (consolidated sales growth and return on invested capital), which matrices provide for achievement of 0% to 100% of the applicable performance targets. The performance multiplier to be applied to the number of target units awarded will be calculated by adding together the percentage of the target award earned under each of the two performance matrices. The following table presents a summary of the activity for the Company's Performance Unit awards for the fiscal year ended September 30, 2016: Performance Unit Awards Number of Weighted Weighted Unvested at September 30, 2015 — $ — — Granted Vested — — Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested at September 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At September 30, 2016, unrecognized compensation costs related to unvested performance unit awards are approximately $2.0 million and are expected to be recognized over the weighted average period of 2.0 years. Service-Based Awards Stock Option Awards The Company from time to time may grant service-based stock option awards to employees under the 2010 Plan. Each option has an exercise price equal to the closing market price of the Company's common stock on the date of grant and generally has a maximum term of 10 years. Options generally vest ratably over a three or four-year period and are generally subject to forfeiture until the vesting period is complete, subject to certain retirement provisions contained in the 2010 Plan. The following table presents a summary of the activity for the Company's service-based stock option awards for the fiscal year ended September 30, 2016: Number of Weighted Weighted Aggregate Outstanding at September 30, 2015 $ $ Granted Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes additional information about service-based stock options outstanding at September 30, 2016 under the Company's share-based compensation plans: Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted Weighted Number of Weighted $5.24 - 19.99 $ $ $20.00 - 31.58 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company uses the Black-Scholes option pricing model to value the Company's stock options for each stock option award. Using this option pricing model, the fair value of each stock option award is estimated on the date of grant. The fair value of the Company's stock option awards is expensed on a straight-line basis over the vesting period (generally three or four years) of the stock options or to the date a participant becomes eligible for retirement, if earlier. The weighted average assumptions relating to the valuation of the Company's stock options are as follows: Year Ended 2016 2015 2014 Expected life (in years) Expected volatility for the Company's stock % % % Risk-free interest rate % % % Dividend yield % % % The expected life of options awarded represents the period of time that such options are expected to be outstanding and is based on the Company's historical experience. The risk-free interest rate is based on the zero-coupon U.S. Treasury notes with a term comparable to the expected life of an award at the date of the grant. Since the Company does not currently expect to pay dividends, the dividend yield used for this purpose is 0%. The weighted average fair value per share at the date of grant of the stock options awarded by the Company during the fiscal years 2016, 2015 and 2014 was $6.32, $8.78 and $11.08, respectively. The aggregate fair value of stock options that vested during the fiscal years 2016, 2015 and 2014 was $16.5 million, $10.0 million and $19.5 million, respectively. The aggregate intrinsic value of options exercised by the Company's grantees during the fiscal years 2016, 2015 and 2014 was $11.0 million, $86.7 million and $50.3 million, respectively. The total cash received by the Company during the fiscal years 2016, 2015 and 2014 from these option exercises was $16.2 million, $54.4 million and $26.7 million, respectively, and the tax benefit realized for the tax deductions from these option exercises was $3.7 million, $31.7 million and $18.3 million, respectively. At September 30, 2016, approximately $8.5 million of total unrecognized compensation costs related to unvested stock option awards are expected to be recognized over the weighted average period of 1.8 years. Restricted Stock Awards The Company from time to time may grant service-based restricted stock awards to employees under the 2010 Plan. A restricted stock award is an award of shares of the Company's common stock which have full voting and dividend rights but are restricted with regard to sale or transfer. These restrictions lapse ratably over a specified period of time (generally three to five years). Restricted stock awards are independent of stock option grants and are generally subject to forfeiture if employment terminates prior to these restrictions lapsing, subject to certain retirement provisions contained in the 2010 Plan. The fair value of the Company's restricted stock awards is expensed on a straight-line basis over the period (generally three to five years) over which the restrictions on these stock awards lapse ("vesting") or over the period ending on the date a participant becomes eligible for retirement, if earlier. For these purposes, the fair value of the restricted stock award is determined based on the closing market price of the Company's common stock on the date of grant. During the fiscal year 2014, the Company granted 210,820 service-based restricted stock awards with restrictions that lapse ratably over terms ranging from three to four years, in connection with the executive management transition plan announced in May 2014. The following table presents a summary of the activity for the Company's service-based restricted stock awards for the fiscal year ended September 30, 2016: Restricted Stock Awards Number of Weighted Weighted Unvested at September 30, 2015 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested at September 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At September 30, 2016, approximately $3.0 million of total unrecognized compensation costs related to unvested restricted stock awards are expected to be recognized over the weighted average period of 1.9 years. Restricted Stock Units The Company currently grants service-based restricted stock unit ("RSU" or "RSUs") awards, which generally vest within one year from the date of grant, pursuant to the 2010 Plan. As of September 30, 2016, the Company has only granted service-based RSU awards to its non-employee directors. RSUs represent an unsecured promise of the Company to issue shares of its common stock. Unless forfeited prior to the vesting date, RSUs are converted into shares of the Company's common stock generally on the vesting date. An independent director who receives an RSU award may elect, upon receipt of such award, to defer until a later date delivery of the shares of the Company's common stock that would otherwise be issued on the vesting date. RSUs granted prior to the fiscal year 2012, are generally retained by the Company as deferred stock units that are not distributed until six months after the independent director's service as a director terminates. RSUs are independent of stock option grants and are generally subject to forfeiture if service terminates prior to the vesting of the units. Participants have no voting rights with respect to unvested RSUs. Under the 2010 Plan, the Company may settle the vested deferred stock units with shares of the Company's common stock or in cash. The Company expenses the cost of service-based RSUs, which is determined to be the fair value of the RSUs at the date of grant, on a straight-line basis over the vesting period (generally one year). For these purposes, the fair value of an RSU is determined based on the closing market price of the Company's common stock on the date of grant. The following table presents a summary of the activity for the Company's service-based RSUs for the fiscal year ended September 30, 2016: Restricted Stock Units Number of Weighted Weighted Unvested at September 30, 2015 — $ — — Granted Vested ) Forfeited — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested at September 30, 2016 — $ — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At September 30, 2016, all RSUs previously awarded have vested and there are no unrecognized compensation costs in connection therewith. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Sep. 30, 2016 | |
Allowance for Doubtful Accounts | |
Allowance for Doubtful Accounts | 8. Allowance for Doubtful Accounts The change in the allowance for doubtful accounts was as follows (in thousands): Year Ended September 30, 2016 2015 2014 Balance at beginning of period $ $ $ Bad debt expense Uncollected accounts written off, net of recoveries ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of period $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 30, 2016 | |
Property and Equipment | |
Property and Equipment | 9. Property and Equipment Property and equipment, net consists of the following (in thousands): September 30, 2016 2015 Land $ $ Buildings and building improvements Leasehold improvements Furniture, fixtures and equipment ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, gross Less accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation expense for the fiscal years 2016, 2015 and 2014 was $86.3 million, $75.1 million and $65.1 million, respectively. Depreciation of property and equipment is calculated using the straight-line method based on the estimated useful lives of the respective classes of assets and is reflected in depreciation and amortization expense in our consolidated statements of earnings. Buildings and building improvements are depreciated over periods ranging from five to 40 years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the term of the related lease, including renewals determined to be reasonably assured. Furniture, fixtures and equipment are depreciated over periods ranging from two to ten years. Expenditures for maintenance and repairs are expensed when incurred, while expenditures for major renewals and improvements are capitalized. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 10. Goodwill and Intangible Assets The changes in the carrying amounts of goodwill by operating segment during the fiscal years 2015 and 2016 are as follows (in thousands): Sally Beauty Beauty Systems Total Balance at September 30, 2014 $ $ $ Acquisitions — Foreign currency translation ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2015 $ $ $ Acquisitions — Foreign currency translation ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2016 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company completed its annual assessment of goodwill for impairment during the fiscal quarter ended March 31, 2016. No impairment losses were recognized in the current or prior periods presented in connection with the Company's goodwill and each of the Company's reporting units passed by a significant margin in each period presented. The Company also completed its annual assessment of intangible assets, other than goodwill and including indefinite-lived intangible assets, for impairment during the fiscal quarter ended March 31, 2016. No material impairment losses were recognized in the current or prior periods presented in connection with the Company's intangible assets. The following table provides the carrying value for intangible assets with indefinite lives, excluding goodwill, and the gross carrying value and accumulated amortization for intangible assets subject to amortization by operating segment at September 30, 2016 and 2015 (in thousands): September 30, 2016 September 30, 2015 Sally Beauty Beauty Systems Total Sally Beauty Beauty Systems Total Intangible assets with indefinite lives: Trade names $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets subject to amortization: Gross carrying amount Accumulated amortization ) ) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net book value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets, excluding goodwill, net $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As described in Note 17, during the fiscal year ended September 30, 2016, intangible assets subject to amortization in the amount of $10.1 million were recorded by BSG in connection with several individually immaterial acquisitions. Amortization expense totaled $13.3 million, $14.3 million and $14.5 million for the fiscal years ended September 30, 2016, 2015 and 2014, respectively. As of September 30, 2016, future amortization expense related to intangible assets subject to amortization is estimated to be as follows (in thousands): Fiscal Year: 2017 $ 2018 2019 2020 2021 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The weighted average remaining amortization period for intangible assets subject to amortization is approximately 4.6 years. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Sep. 30, 2016 | |
Accrued Liabilities. | |
Accrued Liabilities | 11. Accrued Liabilities Accrued liabilities consist of the following (in thousands): September 30, 2016 2015 Compensation and benefits $ $ Interest payable Deferred revenue Loss contingency obligation Rental obligations Property and other taxes Insurance reserves Operating accruals and other ​ ​ ​ ​ ​ ​ ​ ​ Total accrued liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Lease Commitments The Company's principal leases relate to retail stores and warehousing properties. At September 30, 2016, future minimum payments under non-cancelable operating leases, net of sublease income, are as follows (in thousands): Fiscal Year: 2017 $ 2018 2019 2020 2021 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certain of the Company's leases require the Company to pay a portion of real estate taxes, insurance, maintenance and special assessments assessed by the lessor. Also, certain of the Company's leases include renewal options and escalation clauses. Aggregate rental expense for all operating leases amounted to $231.0 million, $223.2 million and $218.0 million for the fiscal years 2016, 2015 and 2014, respectively, and is included in selling, general and administrative expenses in our consolidated statements of earnings. Contingencies Legal Proceedings The Company is, from time to time, involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. The Company does not believe that the ultimate resolution of these matters will have a material adverse impact on its consolidated financial position, results of operations or cash flows. Other Contingencies During the fiscal year 2014, the Company disclosed that it had experienced a data security incident (the "2014 data security incident"). During the fiscal year 2015, the Company disclosed that it had experienced a second data security incident (the "2015 data security incident" and, together with the 2014 data security incident, 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, we believe may have placed at risk certain payment card data for some transactions. The costs that the Company has incurred to date in connection with the data security incidents include assessments by payment card networks, professional advisory fees and legal costs and expenses relating to investigating and remediating the data security incidents. For the fiscal years ended September 30, 2016, 2015 and 2014, selling, general and administrative expenses reflect expenses of $14.6 million, $5.6 million (net of related insurance recovery of $0.6 million) and $2.5 million, respectively, consisting of costs related to the data security incidents, inclusive of an accrued liability of approximately $2.9 million related to loss contingencies associated with the 2014 data security incident recorded during the fiscal year ended September 30, 2015 and an accrued liability of approximately $12.8 million related to loss contingencies associated with the 2015 data security incident recorded during the fiscal year ended September 30, 2016. As of September 30, 2016 and 2015, the Company had an aggregate accrued liability relating to the data security incidents of $15.6 million and $2.9 million, respectively. The Company's estimated probable losses related to the claims made by the payment card networks in connection with the data security incidents are based on currently available information. The Company disputes the validity of these claims and intends to contest them. Estimates related to these claims may change as new information becomes available or circumstances change. The Company expects to incur additional costs and expenses related to the data security incidents in the future. These costs may result from potential additional liabilities to payment card networks, governmental or third party investigations, proceedings or litigation and legal and other fees necessary to defend against any potential liabilities or claims, and further investigatory and remediation costs. As of September 30, 2016, the scope of these additional costs, or a range thereof, cannot be reasonably estimated and, while we do not anticipate these additional costs or liabilities would have a material adverse impact on our business, financial condition and operating results, these additional costs could be significant. The Company provides healthcare benefits to most of its full-time employees. The Company is largely self-funded for the cost of the healthcare plan (including healthcare claims) primarily in the U.S., other than certain fees and out-of-pocket expenses paid by the employees. In addition, the Company retains a substantial portion of the risk related to certain workers' compensation, general liability, and automobile and property insurance. The Company records an estimated liability for the ultimate cost of claims incurred and unpaid as of the balance sheet date. The estimated liability is included in accrued liabilities (current portion) and other liabilities (long-term portion) in our consolidated balance sheets. The Company carries insurance coverage in such amounts in excess of its self-insured retention which management believes to be reasonable. Liabilities for loss contingencies, arising from claims, assessments, litigation, fines, penalties, the data security incidents and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. The Company has no significant liabilities for loss contingencies at September 30, 2016 and 2015, except as disclosed above. |
Short-term Borrowings and Long-
Short-term Borrowings and Long-Term Debt | 12 Months Ended |
Sep. 30, 2016 | |
Short-term Borrowings and Long-Term Debt | |
Short-term Borrowings and Long-Term Debt | 13. Short-term Borrowings and Long-Term Debt Details of long-term debt (which is reported at amortized cost) are as follows at September 30, 2016 and 2015 (dollars in thousands): As of September 30, 2016 2015 Interest Rates(a) ABL facility(b) $ — $ — (i) Prime plus (0.50% to 0.75%) or; (ii) LIBOR(b) plus (1.50% to 1.75%) Senior notes due Nov. 2019 — 6.875% Senior notes due Jun. 2022 5.750% Senior notes due Nov. 2023 5.500% Senior notes due Dec. 2025 — 5.625% ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net(c) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt $ $ Less: current maturities ​ ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Interest rates shown represent the coupon or contractual rate or rates related to each debt instrument listed. (b) When used in this Annual Report, LIBOR means the London Interbank Offered Rate. At September 30, 2016 and 2015, unamortized debt issuance costs of $1.6 million and $2.4 million, respectively, related to the ABL facility are reported in other assets in the Company's consolidated balance sheets. (c) Amounts are net of unamortized premium of $5.6 million and $6.5 million as of September 30, 2016 and 2015, respectively, related to certain notes with an aggregate principal amount of $150.0 million. In 2006, the Company, through its subsidiaries (Sally Investment Holdings LLC and Sally Holdings LLC, which we refer to as "Sally Investment" and "Sally Holdings," respectively) incurred $1,850.0 million of indebtedness in connection with the Company's separation from its former parent, Alberto-Culver. In the fiscal year 2011, Sally Holdings entered into a $400 million, five-year asset-based senior secured loan facility (the "ABL facility"). The availability of funds under the ABL facility, as amended in June 2012, is subject to a customary borrowing base comprised of: (i) a specified percentage of our eligible credit card and trade accounts receivable (as defined therein) and (ii) a specified percentage of our eligible inventory (as defined therein), and reduced by (iii) certain customary reserves and adjustments and by certain outstanding letters of credit. The ABL facility includes a $25.0 million Canadian sub-facility for our Canadian operations. In the fiscal year 2013, the Company, Sally Holdings and other parties to the ABL facility entered into a second amendment to the ABL facility which, among other things, increased the maximum availability under the ABL Facility to $500.0 million (subject to borrowing base limitations), reduced pricing, relaxed the restrictions regarding the making of Restricted Payments, extended the maturity to July 2018 and improved certain other covenant terms. At September 30, 2016, there were no borrowings outstanding under the ABL facility and the Company had $478.4 million available for borrowing under the ABL facility, including the Canadian sub-facility. Borrowings under the ABL facility are secured by the accounts, inventory and credit card receivables (and related general intangibles and other property) of our domestic subsidiaries (and, in the case of borrowings under the Canadian sub-facility, such assets of our Canadian subsidiaries and, solely with respect to borrowings by SBH Finance B.V., intercompany notes owed to SBH Finance B.V. by our foreign subsidiaries). In addition, the terms of the ABL facility contain a commitment fee of 0.25% on the unused portion of the facility. In the fiscal year 2012, Sally Holdings and Sally Capital Inc. (collectively, the "Issuers"), both indirectly wholly-owned subsidiaries of the Company, issued $750.0 million aggregate principal amount of their 6.875% Senior Notes due 2019 (the "senior notes due 2019") and $850.0 million aggregate principal amount of their 5.75% Senior Notes due 2022 (the "senior notes due 2022"), including $150.0 million of the aggregate principal amount of the senior notes due 2022 issued at par plus a premium. Such premium is being amortized over the term of the notes using the effective interest method. The net proceeds from these debt issuances were used to retire outstanding indebtedness in the aggregate principal amount of approximately $1,391.9 million (substantially all of which was incurred in 2006 in connection with our separation from Alberto-Culver) and for general corporate purposes. In December 2015, the Company redeemed in full the senior notes due 2019 at a redemption premium equal to 103.438% primarily with the net proceeds from the issuance of the 5.625% Senior Notes due 2025 (the "senior notes due 2025"), as further discussed below. In the fiscal year 2014, the Issuers issued $200.0 million aggregate principal amount of their 5.5% Senior Notes due 2023 (the "senior notes due 2023") at par. The Company used the net proceeds from this debt issuance, approximately $196.3 million, to repay borrowings outstanding under the ABL facility of $88.5 million (which borrowings were primarily used to fund share repurchases) and for general corporate purposes, including share repurchases. On December 3, 2015, the Issuers issued $750.0 million aggregate principal amount of their senior notes due 2025 at par. The Company used the net proceeds from this debt issuance (approximately $737.3 million) as well as cash from operations and borrowings under the ABL facility, to redeem in full the senior notes due 2019 at a total redemption cost of $775.8 million, including the redemption premium but excluding accrued interest paid upon redemption of such notes. In connection with our redemption of the senior notes due 2019, we recorded a loss on extinguishment of debt in the amount of approximately $33.3 million, including a redemption premium in the amount of approximately $25.8 million and unamortized deferred financing costs of approximately $7.5 million. In connection with the issuance of the senior notes due 2025, the Company incurred and capitalized financing costs of approximately $12.7 million. This amount is reported as a deduction from the senior notes due 2025 on the Company's consolidated balance sheets and is being amortized over the term of the senior notes due 2025 using the effective interest method. The senior notes due 2022, the senior notes due 2023 and the senior notes due 2025, which we refer to collectively as "the Notes" or "the senior notes due 2022, 2023 and 2025," are unsecured obligations of the Issuers and are jointly and severally guaranteed by the Company and Sally Investment, and by each material domestic subsidiary of the Company. Interest on the senior notes due 2022, 2023 and 2025 is payable semi-annually, during the Company's first and third fiscal quarters. Please see Note 19 for certain condensed financial statement data pertaining to Sally Beauty, the Issuers, the guarantor subsidiaries and the non-guarantor subsidiaries. The senior notes due 2022 carry optional redemption features whereby the Company has the option to redeem the notes, in whole or in part, on or after June 1, 2020 at par, plus accrued and unpaid interest, if any, and on or after June 1, 2017 at par plus a premium declining ratably to par, plus accrued and unpaid interest, if any. Prior to June 1, 2017, the notes may be redeemed, in whole or in part, at a redemption price equal to par plus a make-whole premium as provided in the indenture, plus accrued and unpaid interest, if any. The senior notes due 2023 carry optional redemption features whereby the Company has the option to redeem the notes, in whole or in part, on or after November 1, 2021 at par, plus accrued and unpaid interest, if any, and on or after November 1, 2018 at par plus a premium declining ratably to par, plus accrued and unpaid interest, if any. Prior to November 1, 2018, the notes may be redeemed, in whole or in part, at a redemption price equal to par plus a make-whole premium as provided in the indenture, plus accrued and unpaid interest, if any. The senior notes due 2025 carry optional redemption features whereby the Company has the option to redeem the notes, in whole or in part, on or after December 1, 2023 at par, plus accrued and unpaid interest, if any, and on or after December 1, 2020 at par plus a premium declining ratably to par, plus accrued and unpaid interest, if any. Prior to December 1, 2020, the notes may be redeemed, in whole or in part, at a redemption price equal to par plus a make-whole premium as provided in the indenture, plus accrued and unpaid interest, if any. In addition, on or prior to December 1, 2018, the Company has the right to redeem at par plus a specified premium, plus accrued and unpaid interest, if any, up to 35% of the aggregate principal amount of notes originally issued, subject to certain limitations, with the proceeds from certain kinds of equity offerings, as defined in the indenture. Maturities of the Company's long-term debt are as follows at September 30, 2016 (in thousands): Twelve months ending September 30: 2017-2021 $ — Thereafter ​ ​ ​ ​ ​ $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net Less: current portion ​ ​ ​ ​ ​ Total long-term debt $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We are a holding company and do not have any material assets or operations other than ownership of equity interests of our subsidiaries. The agreements and instruments governing the debt of Sally Holdings and its subsidiaries contain material limitations on their ability to pay dividends and other restricted payments to us which, in turn, constitute material limitations on our ability to pay dividends and other payments to our stockholders. The ABL facility does not contain any restriction against the incurrence of unsecured indebtedness. However, the ABL facility restricts the incurrence of secured indebtedness if, after giving effect to the incurrence of such secured indebtedness, the Company's Secured Leverage Ratio exceeds 4.0 to 1.0. At September 30, 2016, the Company's Secured Leverage Ratio was less than 0.1 to 1.0. Secured Leverage Ratio is defined as the ratio of (i) Secured Funded Indebtedness (as defined in the ABL facility) to (ii) Consolidated EBITDA (as defined in the ABL facility) for the most recently completed twelve fiscal months. The ABL facility is pre-payable, and the commitments thereunder may be terminated, in whole or in part at any time without penalty or premium. The indentures governing the senior notes due 2022, 2023 and 2025 contain terms which restrict the ability of Sally Beauty's subsidiaries to incur additional indebtedness. However, in addition to certain other material exceptions, the Company may incur additional indebtedness under the indentures if its Consolidated Coverage Ratio, after giving pro forma effect to the incurrence of such indebtedness, exceeds 2.0 to 1.0 ("Incurrence Test"). At September 30, 2016, the Company's Consolidated Coverage Ratio was approximately 6.1 to 1.0. Consolidated Coverage Ratio is defined as the ratio of (i) Consolidated EBITDA (as defined in the indentures) for the period containing the most recent four consecutive fiscal quarters, to (ii) Consolidated Interest Expense (as defined in the indentures) for such period. The indentures governing the senior notes due 2022, 2023 and 2025 restrict Sally Holdings and its subsidiaries from making certain dividends and distributions to equity holders and certain other restricted payments (hereafter, a "Restricted Payment" or "Restricted Payments") to us. However, the indentures permit the making of such Restricted Payments if, at the time of the making of such Restricted Payment, the Company satisfies the Incurrence Test as described above and the cumulative amount of all Restricted Payments made since the issue date of the applicable senior notes does not exceed the sum of: (i) 50% of Sally Holdings' and its subsidiaries' cumulative consolidated net earnings since July 1, 2006 (for the senior notes due 2022 and the senior notes due 2023) or since October 1, 2015 (for the senior notes due 2025), plus (ii) the proceeds from the issuance of certain equity securities or conversions of indebtedness to equity, in each case, since the issue date of the applicable senior notes plus (iii) the net reduction in investments in unrestricted subsidiaries since the issue date of the applicable senior notes plus (iv) the return of capital with respect to any sales or dispositions of certain minority investments since the issue date of the applicable senior notes plus (v) $350 million (for the senior notes due 2025). Further, in addition to certain other baskets, the indentures permit the Company to make additional Restricted Payments in an unlimited amount if, after giving pro forma effect to the incurrence of any indebtedness to make such Restricted Payment, the Company's Consolidated Total Leverage Ratio (as defined in the indentures) is less than 3.25 to 1.00. At September 30, 2016, the Company's Consolidated Total Leverage Ratio was approximately 2.7 to 1.0. Consolidated Total Leverage Ratio is defined as the ratio of (i) Consolidated Total Indebtedness (as defined in the indentures) minus cash and cash equivalents on-hand up to $100.0 million, in each case, as of the end of the most recently-ended fiscal quarter to (ii) Consolidated EBITDA (as defined in the indentures) for the period containing the most recent four consecutive fiscal quarters. The ABL facility also restricts the making of Restricted Payments. More specifically, under the ABL facility, Sally Holdings may make Restricted Payments if availability under the ABL facility equals or exceeds certain thresholds, and no default then exists under the facility. For Restricted Payments up to $30.0 million during each fiscal year, borrowing availability must equal or exceed the lesser of $75.0 million or 15% of the borrowing base for 45 days prior to such Restricted Payment. For Restricted Payments in excess of that amount, borrowing availability must equal or exceed the lesser of $100.0 million or 20% of the borrowing base for 45 days prior to such Restricted Payment and the Consolidated Fixed Charge Coverage Ratio (as defined below) must equal or exceed 1.1 to 1.0. Further, if borrowing availability equals or exceeds the lesser of $150.0 million or 30% of the borrowing base, Restricted Payments are not limited by the Consolidated Fixed Charge Coverage Ratio test. The Consolidated Fixed Charge Coverage Ratio is defined as the ratio of (i) Consolidated EBITDA (as defined in the ABL facility) during the trailing twelve-month period preceding such proposed Restricted Payment minus certain unfinanced capital expenditures made during such period and income tax payments paid in cash during such period to (ii) fixed charges (as defined in the ABL facility). In addition, during any period that borrowing availability under the ABL facility is less than the greater of $40.0 million or 10% of the borrowing base, the level of the Consolidated Fixed Charge Coverage Ratio that the Company must satisfy is 1.0 to 1.0. As of September 30, 2016, the Consolidated Fixed Charge Coverage Ratio was approximately 3.1 to 1.0. When used in this Annual Report, the phrase "Consolidated EBITDA" is intended to have the meaning ascribed to such phrase in the ABL facility or the indentures governing the senior notes due 2022, 2023 and 2025, as appropriate. EBITDA is not a recognized measurement under GAAP and should not be considered a substitute for financial performance and liquidity measures determined in accordance with GAAP, such as net earnings, operating earnings and operating cash flows. The ABL facility and the indentures governing the senior notes due 2022, 2023 and 2025 contain other covenants regarding restrictions on the disposition of assets, the granting of liens and security interests, the prepayment of certain indebtedness, and other matters and customary events of default, including customary cross-default and/or cross-acceleration provisions. As of September 30, 2016, all the net assets of our consolidated subsidiaries were unrestricted from transfer under our credit arrangements. At September 30, 2016 and 2015, the Company had no off-balance sheet financing arrangements other than obligations under operating leases, as disclosed in Note 12, and letters of credit (related to inventory purchases and self-insurance programs) in the aggregate amount of $21.6 million and $23.1 million, respectively. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | 14. Derivative Instruments and Hedging Activities Risk Management Objectives of Using Derivative Instruments The Company is exposed to a wide variety of risks, including risks arising from changing economic conditions. The Company manages its exposure to certain economic risks (including liquidity, credit risk, and changes in foreign currency exchange rates and in interest rates) primarily: (a) by closely managing its cash flows from operating and investing activities and the amounts and sources of its debt obligations; (b) by assessing periodically the creditworthiness of its business partners; and (c) through the use of derivative instruments from time to time (including, foreign exchange contracts and interest rate swaps) by Sally Holdings and its subsidiaries. The Company from time to time uses foreign exchange contracts (including foreign currency forwards and options), as part of its overall economic risk management strategy, to fix the amount of certain foreign assets and obligations relative to its functional and reporting currency (the U.S. dollar) or relative to the functional currency of certain of its consolidated subsidiaries, or to add stability to cash flows resulting from its net investments (including intercompany notes not permanently invested) and earnings denominated in foreign currencies. The Company's foreign currency exposures at times offset each other, sometimes providing a natural hedge against its foreign currency risk. In connection with the remaining foreign currency risk, the Company uses foreign exchange contracts to effectively fix the foreign currency exchange rate applicable to specific anticipated foreign currency-denominated cash flows thus limiting the potential fluctuations in such cash flows as a result of foreign currency market movements. The Company from time to time has used interest rate swaps, as part of its overall economic risk management strategy, to add stability to the interest payments due in connection with its debt obligations. At September 30, 2016, our exposure to interest rate fluctuations relates to interest payments under the ABL facility, if any, and the Company held no derivatives instruments in connection therewith. As of September 30, 2016, the Company did not purchase or hold any derivative instruments for trading or speculative purposes. Designated Cash Flow Hedges The Company may use from time to time derivative instruments designated as hedges to manage its exposure to interest rate or foreign currency exchange rate movements, as appropriate. However, at September 30, 2016, the Company did not purchase or hold any such derivatives. Non-designated Cash Flow Hedges The Company may use from time to time derivative instruments (such as foreign exchange contracts and interest rate swaps) not designated as hedges or that do not meet the requirements for hedge accounting, to manage its exposure to foreign currency exchange rate or interest rate movements, as appropriate. The Company uses foreign exchange contracts to manage the exposure to the U.S. dollar resulting from certain of its Sinelco Group subsidiaries' purchases of merchandise from third-party suppliers. Sinelco's functional currency is the Euro. As such, at September 30, 2016, we hold foreign currency forwards which enable us to sell approximately €16.0 million ($18.0 million, at the September 30, 2016 exchange rate) at the weighted average contractual exchange rate of 1.1219. The foreign currency forwards discussed in this paragraph are with a single counterparty and expire ratably through September 15, 2017. The Company also uses foreign exchange contracts to mitigate its exposure to changes in foreign currency exchange rates in connection with certain intercompany balances not permanently invested. As such, at September 30, 2016, we hold: (a) a foreign currency forward which enables us to sell approximately €22.4 million ($25.1 million, at the September 30, 2016 exchange rate) at the contractual exchange rate of 1.1267, (b) a foreign currency forward which enables us to sell approximately $4.1 million Canadian dollars ($3.1 million, at the September 30, 2016 exchange rate) at the contractual exchange rate of 1.3121, (c) foreign currency forwards which enable us to buy approximately $15.5 million Canadian dollars ($11.8 million, at the September 30, 2016 exchange rate) at the weighted average contractual exchange rate of 1.3078, (d) a foreign currency forward which enables us to sell approximately 17.9 million Mexican pesos ($0.9 million, at the September 30, 2016 exchange rate) at the contractual exchange rate of 19.4605 and (e) a foreign currency forward which enables us to buy approximately £7.2 million ($9.3 million, at the September 30, 2016 exchange rate) at the contractual exchange rate of 1.3030. All the foreign currency forwards discussed in this paragraph are with a single counterparty (not the same counterparty as that on the forwards discussed in the preceding paragraph) and expire on or before December 30, 2016. The Company's foreign exchange contracts are not designated as hedges and do not currently meet the requirements for hedge accounting. Accordingly, the changes in the fair value (i.e., marked-to-market adjustments) of these derivative instruments, which are adjusted quarterly, are recorded in selling, general and administrative expenses in our consolidated statements of earnings. Selling, general and administrative expenses reflect a net loss of $1.1 million in the fiscal year ended September 30, 2016, and net gains of $2.7 million and $1.9 million in the fiscal years ended September 30, 2015 and 2014, respectively, in connection with all of the Company's foreign currency derivative instruments, including marked-to-market adjustments. The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the Company's consolidated balance sheets as of September 30, 2016 and 2015 (in thousands): Asset Derivatives Liability Derivatives As of As of Classification 2016 2015 Classification 2016 2015 Derivatives designated as hedging instruments: None Derivatives not designated as hedging instruments: Foreign Exchange Contracts Other current assets $ — $ Accrued liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The table below presents the effect of the Company's derivative financial instruments on the Company's consolidated statements of earnings for the fiscal years ended September 30, 2016, 2015 and 2014 (in thousands): Derivatives Designated as Hedging Instruments Amount of Gain Amount of Gain None Amount of Gain or Fiscal Year Ended Classification of Gain or (Loss) Derivatives Not Designated as 2016 2015 2014 Foreign Exchange Contracts Selling, general and administrative expenses $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives not designated as hedging instruments $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit-risk-related Contingent Features At September 30, 2016, the aggregate fair value of all foreign exchange contracts held which consisted of derivative instruments in a liability position was approximately 0.3 million. The Company was under no obligation to post and had not posted any collateral related to the derivative instruments in a liability position. The counterparties to our derivative instruments are deemed by the Company to be of substantial resources and strong creditworthiness. However, these transactions result in exposure to credit risk in the event of default by a counterparty. For example, the financial crisis that has affected the global banking systems and certain financial markets in recent years has resulted in many well-known financial institutions becoming less creditworthy or having diminished liquidity which could expose us to an increased level of counterparty credit risk. In the event that a counterparty defaults in its obligation under our derivative instruments, we could incur substantial financial losses. However, at the present time, no such losses are deemed probable. |
401(k) and Profit Sharing Plan
401(k) and Profit Sharing Plan | 12 Months Ended |
Sep. 30, 2016 | |
401(k) and Profit Sharing Plan | |
401(k) and Profit Sharing Plan | 15. 401(k) and Profit Sharing Plan The Company sponsors the Sally Beauty 401(k) and Profit Sharing Plan (the "401k Plan"), which is a qualified defined contribution plan. The 401k Plan covers employees of the Company who meet certain eligibility requirements and who are not members of a collective bargaining unit. Under the terms of the 401k Plan, employees may contribute a percentage of their annual compensation to the 401k Plan up to certain maximums, as defined by the 401k Plan and by the U.S. Internal Revenue Code. The Company currently matches a portion of employee contributions to the plan. The Company recognized expense of $7.1 million, $6.8 million and $6.4 million in the fiscal years ended September 30, 2016, 2015 and 2014, respectively, related to such employer matching contributions and these amounts are included in selling, general and administrative expenses in our consolidated statements of earnings. In addition, pursuant to the 401k Plan, the Company may make profit sharing contributions to the accounts of employees who meet certain eligibility requirements and who are not members of a collective bargaining unit. The Company's profit sharing contributions to the 401k Plan are determined by the Compensation Committee of the Board. The Company recognized expense of $2.6 million, $3.3 million and $3.2 million in the fiscal years ended September 30, 2016, 2015 and 2014, respectively, related to such profit sharing contributions and these amounts are included in selling, general and administrative expenses in our consolidated statements of earnings. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2016 | |
Income Taxes | |
Income Taxes | 16. Income Taxes The provision for income taxes for the fiscal years 2016, 2015 and 2014 consists of the following (in thousands): Fiscal Year Ended 2016 2015 2014 Current: Federal $ $ $ Foreign State ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current portion ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: Federal ) Foreign ) ) ) State ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred portion ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The difference between the U.S. statutory federal income tax rate and the effective income tax rate is summarized below: Fiscal Year Ended 2016 2015 2014 Statutory tax rate % % % State income taxes, net of federal tax benefit Effect of foreign operations ) ) ) Other, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The tax effects of temporary differences that give rise to the Company's deferred tax assets and liabilities are as follows (in thousands): At September 30, 2016 2015 Deferred tax assets attributable to: Share-based compensation expense $ $ Accrued liabilities Inventory adjustments Foreign loss carryforwards Unrecognized tax benefits Other ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets, net ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities attributable to: Depreciation and amortization ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liability $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Management believes that it is more-likely-than-not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets, net of the valuation allowance. The Company has recorded a valuation allowance to account for uncertainties regarding recoverability of certain deferred tax assets, primarily foreign loss carryforwards. Domestic earnings before provision for income taxes were $327.1 million, $362.1 million and $361.8 million in the fiscal years 2016, 2015 and 2014, respectively. Foreign operations had earnings before provision for income taxes of $27.0 million, $16.4 million and $28.9 million in the fiscal years 2016, 2015 and 2014, respectively. Tax reserves are evaluated and adjusted as appropriate, while taking into account the progress of audits by various taxing jurisdictions and other changes in relevant facts and circumstances evident at each balance sheet date. Management does not expect the outcome of current or future tax audits to have a material adverse effect on the Company's financial condition, results of operations or cash flow. At September 30, 2016, undistributed earnings of the Company's foreign operations are intended to remain permanently invested to finance anticipated future growth and expansion. Accordingly, federal and state income taxes have not been provided on accumulated but undistributed earnings of $263.0 million and $233.2 million as of September 30, 2016 and 2015, respectively, as such earnings have been permanently reinvested in the business. The determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings is not practicable. At September 30, 2016 and 2015, the Company had total operating loss carry-forwards of $117.9 million and $114.2 million, respectively, of which $104.0 million and $98.4 million, respectively, are subject to a valuation allowance. At September 30, 2016, operating loss carry-forwards of $13.9 million expire between 2017 and 2025 and operating loss carry-forwards of $104.0 million have no expiration date. At September 30, 2016 and 2015, the Company had tax credit carry-forwards of $3.1 million and $3.4 million, respectively, including, at September 30, 2016, tax credit carry-forwards of $1.9 million which expire between 2024 and 2026, and tax credit carry-forwards of $1.2 million have no expiration date. The changes in the amount of unrecognized tax benefits are as follows (in thousands): Fiscal Year 2016 2015 Balance at beginning of the fiscal year $ $ Increases related to prior year tax positions Decreases related to prior year tax positions ) ) Increases related to current year tax positions Settlements ) — Lapse of statute ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of fiscal year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ If recognized, these positions would affect the Company's effective tax rate. The Company recognizes interest and penalties, accrued in connection with unrecognized tax benefits, in income tax expense. The total amount of accrued interest and penalties as of September 30, 2016 and 2015 was $0.2 million and $1.2 million, respectively. Because existing tax positions will continue to generate increased liabilities for unrecognized tax benefits over the next 12 months, and the fact that from time to time we are routinely under audit by various taxing authorities, it is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months. An estimate of the amount of such change, or a range thereof, cannot be made at this time. However, we do not expect the change, if any, to have a material effect on our consolidated financial condition or results of operations within the next 12 months. The IRS has concluded the field work associated with their examination of the Company's consolidated federal income tax returns for the fiscal years ended September 30, 2007 through September 30, 2013, and issued their examination reports. The Company is currently seeking relief from double taxation through competent authority on certain cross-border adjustments related to the fiscal years ended September 30, 2007 through September 30, 2012, and it does not anticipate the ultimate resolution of these items to have a material impact on the Company's financial statements. The Company's consolidated federal income tax returns for the fiscal years ended September 30, 2015 and 2016 are currently under IRS examination. Pending the resolution of the adjustments discussed in the preceding paragraph, our statute remains open from the year ended September 30, 2007 forward. Our foreign subsidiaries are impacted by various statutes of limitations, which are generally open from 2011 forward. Generally, states' statutes in the United States are open for tax reviews from 2007 forward. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2016 | |
Acquisitions | |
Acquisitions | 17. Acquisitions In the fiscal year ended September 30, 2016, the Company acquired certain assets and business operations of Peerless, a distributor of beauty products with 15 stores operating in the Midwestern region of the U.S. for approximately $23.9 million. The results of operations of Peerless are included in the Company's consolidated financial statements subsequent to the acquisition date. The Company recorded intangible assets subject to amortization of $7.8 million and goodwill of $13.1 million (which is expected to be deductible for tax purposes) in connection with this acquisition. In addition, we completed several other individually immaterial acquisitions during the fiscal years 2016, 2015 and 2014 at the aggregate cost of approximately $2.3 million, $7.1 million and $4.9 million, respectively, and recorded intangible assets subject to amortization of $2.3 million, $2.2 million and $1.4 million in connection with these acquisitions. Further, we recorded goodwill in the amount of $2.8 million and $2.6 million, the majority of which is expected to be deductible for tax purposes, in connection with these individually immaterial acquisitions completed in the fiscal year 2015 and 2014, respectively. We funded the acquisitions completed in the fiscal years 2016, 2015 and 2014 primarily with cash from operations and borrowings under the ABL facility. |
Business Segments and Geographi
Business Segments and Geographic Area Information | 12 Months Ended |
Sep. 30, 2016 | |
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 Europe and South America 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 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, 2016, 2015 and 2014. Business Segments Information Segment data for the fiscal years ended September 30, 2016, 2015 and 2014 are as follows (in thousands): Year Ended September 30, 2016 2015 2014 Net sales: Sally Beauty Supply $ $ $ BSG ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings before provision for income taxes: Segment operating earnings: Sally Beauty Supply(a) $ $ $ BSG ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment operating earnings Unallocated expenses(b) ) ) ) Share-based compensation expense(c) ) ) ) Interest expense(d) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings before provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Identifiable assets: Sally Beauty Supply $ $ $ BSG ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization: Sally Beauty Supply $ $ $ BSG Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures:(e) Sally Beauty Supply $ $ $ BSG Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) For the fiscal year 2015, Sally Beauty Supply's operating earnings reflects $5.3 million in expenses related to a restructuring of its operations in Germany. (b) Unallocated expenses consist of corporate and shared costs and are included in selling, general and administrative expenses in our consolidated statements of earnings. For the fiscal year 2016, 2015 and 2014, unallocated expenses reflect $14.6 million, $5.6 million (net of related insurance recovery of $0.6 million) and $2.5 million, respectively, related to the data security incidents. (c) For the fiscal year 2014, share-based compensation expenses reflect $3.5 million in expense in connection with the executive management transition plan disclosed in May 2014. Share-based compensation expenses are included in selling, general and administrative expenses in our consolidated statements of earnings. (d) For the fiscal year ended September 30, 2016, interest expense includes a loss on extinguishment of debt of $33.3 million in connection with the Company's December 2015 redemption of its senior notes due 2019. (e) Capital expenditures exclude amounts incurred but not paid at September 30, 2016 and 2015 of $3.8 million and $11.6 million, respectively. At September 30, 2014, such amounts were not material. Geographic Area Information Geographic data for the fiscal years ended September 30, 2016, 2015 and 2014 are as follows (in thousands): Year Ended September 30, 2016 2015 2014 Net sales:(a) United States $ $ $ Other Countries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Identifiable assets: United States $ $ $ Other Countries Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Net sales are attributable to individual countries based on the location of the customer. For the fiscal year 2016 and 2015, net sales outside the U.S. include a net negative impact from changes in foreign currency exchange rates of $56.4 million and $87.3 million, respectively. For the fiscal year 2014, changes in foreign currency exchange rates did not have a material impact on sales. |
Parent, Issuers, Guarantor and
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements | 12 Months Ended |
Sep. 30, 2016 | |
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements | |
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements | 19. Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements The following consolidating financial information presents the condensed consolidating balance sheets as of September 30, 2016 and 2015, the related condensed consolidating statements of earnings and comprehensive income, and the condensed consolidating statements of cash flows for each of the three fiscal years in the period ended September 30, 2016 of: (i) Sally Beauty Holdings, Inc., or the "Parent;" (ii) Sally Holdings LLC and Sally Capital Inc., or the "Issuers;" (iii) the guarantor subsidiaries; (iv) the non-guarantor subsidiaries; (v) elimination entries necessary for consolidation purposes; and (vi) Sally Beauty on a consolidated basis. Investments in subsidiaries are accounted for using the equity method for purposes of the consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. Separate financial statements and other disclosures with respect to the subsidiary guarantors have not been provided as management believes the following information is sufficient, as guarantor subsidiaries are 100% indirectly owned by the Parent and all guarantees are full and unconditional. Additionally, the accounts, inventory, credit card receivables, deposit accounts, certain intercompany notes and certain other personal property of the guarantor subsidiaries relating to the inventory and accounts are pledged under the ABL facility and consequently may not be available to satisfy the claims of general creditors. Condensed Consolidating Balance Sheet Parent Sally Guarantor Non- Consolidating Sally Beauty Assets Cash and cash equivalents $ — $ $ $ $ — $ Trade and other accounts receivable, less allowance for doubtful accounts — — Due from affiliates — — — ) — Inventory — — — Other current assets — Deferred income tax assets — — Property and equipment, net — — Investment in subsidiaries — ) — Goodwill and other intangible assets, net — — — Other assets ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders' (Deficit) Equity Accounts payable $ $ $ $ $ — $ Due to affiliates — ) — Accrued liabilities — Income taxes payable — — — Long-term debt — — Other liabilities — — — Deferred income tax liabilities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) Total stockholders' (deficit) equity ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' (deficit) equity $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Balance Sheet Parent Sally Guarantor Non- Consolidating Sally Beauty Assets Cash and cash equivalents $ — $ $ $ $ — $ Trade and other accounts receivable, less allowance for doubtful accounts — — — Due from affiliates — — ) — Inventory — — — Other current assets — Deferred income tax assets — — Property and equipment, net — — Investment in subsidiaries — ) — Goodwill and other intangible assets, net — — — Other assets ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders' (Deficit) Equity Accounts payable $ — $ — $ $ $ — $ Due to affiliates ) — Accrued liabilities — Income taxes payable — — Long-term debt — — Other liabilities — — — Deferred income tax liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) Total stockholders' (deficit) equity ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' (deficit) equity $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating earnings (loss) ) ) — Interest expense (income) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss), net of tax — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total comprehensive income $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating earnings (loss) ) ) — Interest expense — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss), net of tax — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total comprehensive income (loss) $ $ $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating earnings (loss) ) ) — Interest expense — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss), net of tax — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total comprehensive income (loss) $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net cash provided by operating activities $ $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment ) — ) ) — ) Acquisitions, net of cash acquired — — ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by investing activities ) — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — — Repayments of long-term debt — ) ) ) — ) Debt issuance costs — ) — — — ) Repurchases of common stock ) — — — — ) Proceeds from exercises of stock options — — — — Excess tax benefit from share-based compensation — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by financing activities ) ) ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents — ) ) — ) Cash and cash equivalents, beginning of period — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period $ — $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net cash provided by operating activities $ $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment ) — ) ) — ) Acquisitions, net of cash acquired — — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by investing activities ) — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — Repayments of long-term debt — — ) ) — ) Repurchases of common stock ) — — — — ) Proceeds from exercises of stock options — — — — Excess tax benefit from share-based compensation — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by financing activities ) — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents — ) — Cash and cash equivalents, beginning of period — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period $ — $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net cash provided (used) by operating activities $ $ ) $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment — — ) ) — ) Acquisitions, net of cash acquired — — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by investing activities — — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — Repayments of long-term debt — ) ) ) — ) Debt issuance costs — ) — — — ) Repurchases of common stock ) — — — — ) Proceeds from exercises of stock options — — — — Excess tax benefit from share-based compensation — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash (used) provided by financing activities ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase in cash and cash equivalents — — Cash and cash equivalents, beginning of period — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period $ — $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Sep. 30, 2016 | |
Quarterly Financial Data (Unaudited) | |
Quarterly Financial Data (Unaudited) | 20. Quarterly Financial Data (Unaudited) Certain unaudited quarterly consolidated statement of earnings information for the fiscal years ended September 30, 2016 and 2015 is summarized below (in thousands, except per share data): Fiscal Year 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter 2016: Net sales $ $ $ $ Gross profit $ $ $ $ Net earnings $ $ $ $ Earnings per common share(a) Basic $ $ $ $ Diluted $ $ $ $ 2015: Net sales $ $ $ $ Gross profit $ $ $ $ Net earnings $ $ $ $ Earnings per common share(a) Basic $ $ $ $ Diluted $ $ $ $ (a) The sum of the quarterly earnings per share may not equal the full year amount due to rounding of the calculated amounts. |
Significant Accounting Polici29
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2016 | |
Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures of contingent liabilities in the financial statements. Our most significant estimates relate to: the valuation of inventory, vendor rebates and concessions, retention of risk, income taxes, the assessment of long-lived assets and intangible assets for impairment, loss contingencies and share-based payments. The level of uncertainty in estimates and assumptions generally increases with the length of time until the underlying transactions are completed. Actual results may differ from these estimates in amounts that may be material to the financial statements. Management believes that the estimates and assumptions used in the preparation of the Company's consolidated financial statements are reasonable. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents generally represent highly liquid investments purchased by the Company from time to time which have an original maturity of three months or less. These investments are stated at cost, which approximates fair value. In addition, cash equivalents include proceeds due from customer credit and debit cards and PayPal transactions, which generally settle within one to three days, and were $15.1 million and $13.3 million at September 30, 2016 and 2015, respectively. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of investments in cash equivalents, accounts receivable and derivative instruments. The Company invests from time to time in securities of financial institutions it deems to be of high creditworthiness. Accounts receivable are deemed by the Company to be highly diversified due to the large number of individual customers comprising the Company's customer base and their dispersion across diverse geographical regions. The counterparties to our derivative instruments are deemed by the Company to be of substantial resources and strong creditworthiness. The Company believes that no significant concentration of credit risk exists with respect to its investments in cash equivalents, its accounts receivable and its derivative instruments at September 30, 2016 and 2015. |
Trade Accounts Receivable and Accounts Receivable, Other | Trade Accounts Receivable and Accounts Receivable, Other Trade accounts receivable are recorded at the values invoiced to customers and do not accrue interest. Trade accounts receivable are stated net of the allowance for doubtful accounts. The allowance for doubtful accounts requires management to estimate the future collectability of amounts receivable at the balance sheet date. The Company records allowances for doubtful accounts on the basis of its historical collection data and current customer information. Customer account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. In the Company's consolidated statements of earnings, bad debt expense is included in selling, general and administrative expenses. The Company's exposure to credit risk with respect to trade receivables is mitigated by the Company's broad customer base and their dispersion across diverse geographical regions. Accounts receivable, other, consist primarily of amounts earned from vendors under various contractual agreements and are recorded at the amounts management estimates will be collected. |
Inventory | Inventory Inventory consists primarily of beauty supplies and related accessories, and salon equipment for sale in the normal course of our business. Inventory is stated at the lower of cost, determined using the first-in, first-out ("FIFO") method, or net realizable value. Inventory cost reflects actual product costs, the cost of transportation to the Company's distribution centers and certain shipping and handling costs, such as freight from the distribution centers to the stores and handling costs incurred at the distribution centers. When necessary, the Company adjusts the carrying value of inventory to the lower of cost or net realizable value, including anticipated disposal costs and for estimated inventory shrinkage. When assessing the net realizable value of inventory, management considers several factors including estimates of future demand for the Company's products, historical turn-over rates, the age and sales history of the inventory, and historic as well as anticipated changes in stock keeping units ("SKUs"). The Company estimates inventory shrinkage between physical counts based on its historical experience. Physical inventory counts are performed at substantially all stores and significant distribution centers at least annually, and sooner when management has reason to believe that the risk of inventory shrinkage at a particular location is heightened. Upon completion of physical inventory counts, the Company's consolidated financial statements are adjusted to reflect actual quantities on hand. The Company has policies and processes in place that are intended to minimize inventory shrinkage. Inventory shrinkage expense has averaged approximately 1.0% of our consolidated net sales during each of the past three fiscal years. |
Lease Accounting | Lease Accounting The majority of the Company's lease agreements for office space, company-operated stores and warehouse/distribution facilities are accounted for as operating leases, consistent with Accounting Standards Codification ("ASC") Topic 840, Leases . Please see Note 3, Recent Accounting Pronouncements, below for information about a new lease accounting standard released in February 2016 which is effective for fiscal years beginning after December 15, 2018. Rent expense (including any rent abatements or escalation charges) is recognized on a straight-line basis from the date the Company takes possession of the property to begin preparation of the site for occupancy to the end of the lease term, including renewal options determined to be reasonably assured. Certain lease agreements to which the Company is a party provide for contingent rents that are determined as a percentage of revenues in excess of specified levels. The Company records a contingent rent liability, along with the corresponding rent expense, when the specified levels of revenue have been achieved or when management determines that achieving the specified levels of revenue during the fiscal year is probable. Certain lease agreements to which the Company is a party provide for tenant improvement allowances. Such allowances are recorded as deferred lease credits, included in accrued liabilities and other liabilities, as appropriate, on our consolidated balance sheets, and amortized on a straight-line basis over the lease term (including renewal options determined to be reasonably assured) as a reduction of rent expense. The amortization period used for deferred lease credits is generally consistent with the amortization period used for the constructed leasehold improvement asset for a given office, store or warehouse facility. |
Valuation of Long-Lived Assets and Intangible Assets with Definite Lives | Valuation of Long-Lived Assets and Intangible Assets with Definite Lives Long-lived assets, such as property and equipment, including store equipment, and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The recoverability of long-lived assets and intangible assets subject to amortization is assessed by comparing the net carrying amount of each asset to its total estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. There were no significant impairment losses recognized in our consolidated financial statements in the current or prior fiscal years presented in connection with long-lived assets and intangible assets subject to amortization. The Company's intangible assets subject to amortization include customer relationships, certain distribution rights and non-competition agreements, and are amortized, on a straight-line basis, over periods of two to thirteen years. Such amortization periods are based on the estimated useful lives of the assets and take into account the terms of any underlying agreements, but do not generally reflect all renewal terms contractually available to the Company. |
Goodwill and Intangible Assets with Indefinite Lives | Goodwill and Intangible Assets with Indefinite Lives Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Our intangible assets with indefinite lives consist of trade names acquired in business combinations. Goodwill and intangible assets with indefinite lives are reviewed for impairment at least annually, during our second fiscal quarter, and whenever events or changes in circumstances indicate it is more-likely-than-not that the value of the asset may be impaired. When assessing goodwill and intangible assets with indefinite lives for potential impairment, management considers whether the value of the asset has been impaired by evaluating if various factors (including current operating results, anticipated future results and cash flows, and relevant market and economic conditions) indicate a possible impairment and, if appropriate, compares the carrying amount of the asset to its fair value. Based on management's assessments, after taking into account potential triggering events, including the recent decline in the average daily trading prices for shares of our common stock, there was no material impairment of goodwill or intangible assets with indefinite lives recognized in our financial statements in the current or prior fiscal years presented. |
Deferred Financing Costs | Deferred Financing Costs Certain costs incurred in connection with the issuance of debt are capitalized when incurred and are amortized over the estimated term of the related debt instruments or agreements generally using the effective interest method. Unamortized deferred financing costs are expensed proportionally when certain debt is prepaid or notes are redeemed. At September 30, 2016 and 2015, unamortized debt issuance costs of $23.7 million and $21.8 million, respectively, related to our senior notes are reported as a deduction from the related long-term debt obligations (in long-term debt) on the Company's consolidated balance sheets. In addition, unamortized debt issuance costs related to the Company's five-year asset-based senior secured loan facility (the "ABL facility") of $1.6 million and $2.4 million, at September 30, 2016 and 2015, respectively, are reported in other assets in our consolidated balance sheets. |
Self-Insurance Programs | Self-Insurance Programs The Company retains a substantial portion of the risk related to certain of its workers' compensation, general and auto liability, and property damage insurable loss exposure. Predetermined loss limits have been arranged with insurance companies to limit the Company's exposure per occurrence and aggregate cash outlay. In addition, certain of our employees and their dependents are covered by a self-insurance program for healthcare benefit purposes (the "healthcare plan"). Currently these self-insurance costs (less amounts recovered through payroll deductions) and certain out-of-pocket amounts incurred in connection with the employee healthcare program are funded by the Company. The Company maintains an annual stop-loss insurance policy for the healthcare plan. The Company records an estimated liability for the ultimate cost of claims incurred and unpaid as of the balance sheet date, which includes claims filed and estimated losses incurred but not yet reported. The Company estimates the ultimate cost based on an analysis of its historical data and actuarial estimates. Workers' compensation, general and auto liability and property damage insurable loss liabilities are recorded at the estimate of their net present value, while healthcare plan liabilities are not discounted. These estimates are reviewed on a regular basis to ensure that the recorded liability is adequate. During the fiscal year ended September 30, 2016, the Company recorded a favorable expense adjustment of $6.3 million resulting from a decrease in estimated future payments in connection with certain of its self-insurance programs. The Company believes the amounts accrued at September 30, 2016 and 2015, are adequate. |
Revenue Recognition | Revenue Recognition The Company recognizes sales revenue when a customer consummates a point-of-sale transaction at a store. The cost of sales incentive programs, including customer and consumer coupons, is recognized as a reduction of revenue at the time of sale. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and are excluded from revenue. The Company also recognizes revenue on merchandise shipped to customers when title and risk of loss pass to the customer (generally upon shipment). Appropriate provisions for sales returns and cash discounts are made at the time the sales are recognized. Sales returns and allowances averaged approximately 2.0% of net sales during each of the past three fiscal years. Please see Note 3, Recent Accounting Pronouncements, below for more information about a new revenue accounting standard released in May 2014, which is effective for fiscal years beginning after December 15, 2017. |
Cost of Products Sold and Distribution Expenses | Cost of Products Sold and Distribution Expenses Cost of products sold and distribution expenses include actual product costs, the cost of transportation to the Company's distribution centers, vendor rebates and allowances, inventory shrinkage and certain shipping and handling costs, such as freight from the distribution centers to the stores and handling costs incurred at the distribution centers. All other shipping and handling costs are included in selling, general and administrative expenses when incurred. |
Shipping and Handling | Shipping and Handling Shipping and handling costs (including freight and distribution expenses) related to delivery to customers are included in selling, general and administrative expenses in our consolidated statements of earnings when incurred and amounted to $56.2 million, $53.1 million and $52.2 million for the fiscal years 2016, 2015 and 2014, respectively. |
Advertising Costs | Advertising Costs Advertising costs relate mainly to print advertisements, digital marketing, trade shows and product education for salon professionals. Advertising costs incurred in connection with print advertisements are expensed the first time the advertisement is run. Other advertising costs are expensed when incurred. Advertising costs were $93.0 million, $95.3 million and $90.2 million for the fiscal years 2016, 2015 and 2014, respectively, and are included in selling, general and administrative expenses in our consolidated statements of earnings. |
Vendor Rebates and Concessions | Vendor Rebates and Concessions The Company deems a cash consideration received from a supplier to be a reduction of the cost of products sold unless it is in exchange for an asset or service or a reimbursement of a specific, incremental, identifiable cost incurred by the Company in selling the vendor's products. The majority of cash consideration received by the Company is considered to be a reduction of the cost of the related products and is reflected in cost of products sold and distribution expenses in our consolidated statements of earnings as the related products are sold. Any portion of such cash consideration received that is attributable to inventory on hand is reflected as a reduction of inventory. |
Income Taxes | Income Taxes The Company recognizes deferred income taxes for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are estimated to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of earnings in the period of enactment. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount expected to be realized unless it is more-likely-than-not that such assets will be realized in full. The estimated tax benefit of an uncertain tax position is recorded in our financial statements only after determining a more-likely-than-not probability that the uncertain tax position will withstand challenge, if any, from applicable taxing authorities. |
Foreign Currency | Foreign Currency The functional currency of each of the Company's foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (the Company's reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individually material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in our consolidated balance sheets. Foreign currency transaction gains or losses, including changes in the fair value (i.e., marked-to-market adjustments) of certain foreign exchange contracts held by the Company, are included in selling, general and administrative expenses in our consolidated statements of earnings when incurred and were not significant in any of the periods presented in the accompanying financial statements. Please see Note 14 below for more information about the Company's foreign exchange contracts. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities by fair value hierarchy | Consistent with this hierarchy, the Company categorized certain of its financial assets and liabilities as follows at September 30, 2016 and 2015 (in thousands): As of September 30, 2016 Total Level 1 Level 2 Level 3 Assets Cash equivalents(a) $ — $ — $ — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ — $ — $ — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Long-term debt(c) $ $ $ — Foreign exchange contracts(b) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2015 Total Level 1 Level 2 Level 3 Assets Cash equivalents(a) $ $ $ — — Foreign exchange contracts(b) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Long-term debt(c) $ $ $ — Foreign exchange contracts(b) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Cash equivalents at September 30, 2015 consist of highly liquid investments which have no maturity and are valued using unadjusted quoted market prices for such securities. The Company may from time to time invest in securities with maturities of three months or less (consisting primarily of investment-grade corporate and government bonds), with the primary investment objective of minimizing the potential risk of loss of principal. (b) Foreign exchange contracts (including foreign currency forwards and options) are valued for purposes of this disclosure using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market foreign currency exchange rates. Please see Note 14 for more information about the Company's foreign exchange contracts. (c) At September 30, 2016 and 2015, long-term debt (including current maturities and borrowings under the ABL facility, if any) is reported in the Company's consolidated financial statements at amortized cost of $1,807.7 million and $1,809.4 million, respectively, less unamortized debt issuance costs of $23.7 million and $21.8 million, respectively. The Company's senior notes are valued for purposes of this disclosure using unadjusted quoted market prices for such debt securities. Other long-term debt (consisting primarily of borrowings under the ABL facility, if any, and capital lease obligations) is generally valued for purposes of this disclosure using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market interest rates. Please see Note 13 for more information about the Company's debt. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share | |
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): Year ended September 30, 2016 2015 2014 Net earnings $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total weighted average basic shares Dilutive securities: Stock options and stock award programs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total weighted average diluted shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share: Basic $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Share-Based Payments | |
Summary of activity for performance based unit awards | Performance Unit Awards Number of Weighted Weighted Unvested at September 30, 2015 — $ — — Granted Vested — — Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested at September 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of activity for stock option awards | Number of Weighted Weighted Aggregate Outstanding at September 30, 2015 $ $ Granted Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of stock options by range of exercise prices | The following table summarizes additional information about service-based stock options outstanding at September 30, 2016 under the Company's share-based compensation plans: Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted Weighted Number of Weighted $5.24 - 19.99 $ $ $20.00 - 31.58 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted average assumptions for valuation of stock options | Year Ended 2016 2015 2014 Expected life (in years) Expected volatility for the Company's stock % % % Risk-free interest rate % % % Dividend yield % % % |
Restricted Stock Awards | |
Share-Based Payments | |
Summary of the activity for restricted stock awards/units | Restricted Stock Awards Number of Weighted Weighted Unvested at September 30, 2015 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested at September 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Restricted Stock Units | |
Share-Based Payments | |
Summary of the activity for restricted stock awards/units | Restricted Stock Units Number of Weighted Weighted Unvested at September 30, 2015 — $ — — Granted Vested ) Forfeited — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested at September 30, 2016 — $ — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Allowance for Doubtful Accoun33
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Allowance for Doubtful Accounts | |
Schedule of change in the allowance for doubtful accounts | The change in the allowance for doubtful accounts was as follows (in thousands): Year Ended September 30, 2016 2015 2014 Balance at beginning of period $ $ $ Bad debt expense Uncollected accounts written off, net of recoveries ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of period $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment, net consists of the following (in thousands): September 30, 2016 2015 Land $ $ Buildings and building improvements Leasehold improvements Furniture, fixtures and equipment ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, gross Less accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets | |
Schedule of changes in carrying amounts of goodwill by operating segment | The changes in the carrying amounts of goodwill by operating segment during the fiscal years 2015 and 2016 are as follows (in thousands): Sally Beauty Beauty Systems Total Balance at September 30, 2014 $ $ $ Acquisitions — Foreign currency translation ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2015 $ $ $ Acquisitions — Foreign currency translation ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2016 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of carrying value for intangible assets by operating segment | The following table provides the carrying value for intangible assets with indefinite lives, excluding goodwill, and the gross carrying value and accumulated amortization for intangible assets subject to amortization by operating segment at September 30, 2016 and 2015 (in thousands): September 30, 2016 September 30, 2015 Sally Beauty Beauty Systems Total Sally Beauty Beauty Systems Total Intangible assets with indefinite lives: Trade names $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets subject to amortization: Gross carrying amount Accumulated amortization ) ) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net book value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets, excluding goodwill, net $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated future amortization expense related to intangible assets subject to amortization | As of September 30, 2016, future amortization expense related to intangible assets subject to amortization is estimated to be as follows (in thousands): Fiscal Year: 2017 $ 2018 2019 2020 2021 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Accrued Liabilities. | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): September 30, 2016 2015 Compensation and benefits $ $ Interest payable Deferred revenue Loss contingency obligation Rental obligations Property and other taxes Insurance reserves Operating accruals and other ​ ​ ​ ​ ​ ​ ​ ​ Total accrued liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies | |
Schedule of future minimum payments under non-cancelable operating leases, net of sublease income | At September 30, 2016, future minimum payments under non-cancelable operating leases, net of sublease income, are as follows (in thousands): Fiscal Year: 2017 $ 2018 2019 2020 2021 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Short-term Borrowings and Lon38
Short-term Borrowings and Long-Term Debt (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Short-term Borrowings and Long-Term Debt | |
Summary of long-term debt | Details of long-term debt (which is reported at amortized cost) are as follows at September 30, 2016 and 2015 (dollars in thousands): As of September 30, 2016 2015 Interest Rates(a) ABL facility(b) $ — $ — (i) Prime plus (0.50% to 0.75%) or; (ii) LIBOR(b) plus (1.50% to 1.75%) Senior notes due Nov. 2019 — 6.875% Senior notes due Jun. 2022 5.750% Senior notes due Nov. 2023 5.500% Senior notes due Dec. 2025 — 5.625% ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net(c) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt $ $ Less: current maturities ​ ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Interest rates shown represent the coupon or contractual rate or rates related to each debt instrument listed. (b) When used in this Annual Report, LIBOR means the London Interbank Offered Rate. At September 30, 2016 and 2015, unamortized debt issuance costs of $1.6 million and $2.4 million, respectively, related to the ABL facility are reported in other assets in the Company's consolidated balance sheets. (c) Amounts are net of unamortized premium of $5.6 million and $6.5 million as of September 30, 2016 and 2015, respectively, related to certain notes with an aggregate principal amount of $150.0 million. |
Schedule of maturities of long-term debt | Maturities of the Company's long-term debt are as follows at September 30, 2016 (in thousands): Twelve months ending September 30: 2017-2021 $ — Thereafter ​ ​ ​ ​ ​ $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net Less: current portion ​ ​ ​ ​ ​ Total long-term debt $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Derivative Instruments and He39
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities | |
Tabular disclosure of fair values of derivative financial instruments | The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the Company's consolidated balance sheets as of September 30, 2016 and 2015 (in thousands): Asset Derivatives Liability Derivatives As of As of Classification 2016 2015 Classification 2016 2015 Derivatives designated as hedging instruments: None Derivatives not designated as hedging instruments: Foreign Exchange Contracts Other current assets $ — $ Accrued liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Tabular disclosure of the effect of derivative financial instruments on the statement of earnings | The table below presents the effect of the Company's derivative financial instruments on the Company's consolidated statements of earnings for the fiscal years ended September 30, 2016, 2015 and 2014 (in thousands): Derivatives Designated as Hedging Instruments Amount of Gain Amount of Gain None Amount of Gain or Fiscal Year Ended Classification of Gain or (Loss) Derivatives Not Designated as 2016 2015 2014 Foreign Exchange Contracts Selling, general and administrative expenses $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives not designated as hedging instruments $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Income Taxes | |
Schedule of provision for income taxes | The provision for income taxes for the fiscal years 2016, 2015 and 2014 consists of the following (in thousands): Fiscal Year Ended 2016 2015 2014 Current: Federal $ $ $ Foreign State ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current portion ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: Federal ) Foreign ) ) ) State ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred portion ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the difference between U.S. statutory federal income tax rate and the effective income tax rate | Fiscal Year Ended 2016 2015 2014 Statutory tax rate % % % State income taxes, net of federal tax benefit Effect of foreign operations ) ) ) Other, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the tax effects of temporary differences that give rise to the Company's deferred tax assets and liabilities | The tax effects of temporary differences that give rise to the Company's deferred tax assets and liabilities are as follows (in thousands): At September 30, 2016 2015 Deferred tax assets attributable to: Share-based compensation expense $ $ Accrued liabilities Inventory adjustments Foreign loss carryforwards Unrecognized tax benefits Other ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets, net ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities attributable to: Depreciation and amortization ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liability $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of changes in the amount of unrecognized tax benefits | The changes in the amount of unrecognized tax benefits are as follows (in thousands): Fiscal Year 2016 2015 Balance at beginning of the fiscal year $ $ Increases related to prior year tax positions Decreases related to prior year tax positions ) ) Increases related to current year tax positions Settlements ) — Lapse of statute ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of fiscal year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Business Segments and Geograp41
Business Segments and Geographic Area Information (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Business Segments and Geographic Area Information | |
Schedule of segment data | Segment data for the fiscal years ended September 30, 2016, 2015 and 2014 are as follows (in thousands): Year Ended September 30, 2016 2015 2014 Net sales: Sally Beauty Supply $ $ $ BSG ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings before provision for income taxes: Segment operating earnings: Sally Beauty Supply(a) $ $ $ BSG ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment operating earnings Unallocated expenses(b) ) ) ) Share-based compensation expense(c) ) ) ) Interest expense(d) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings before provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Identifiable assets: Sally Beauty Supply $ $ $ BSG ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization: Sally Beauty Supply $ $ $ BSG Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures:(e) Sally Beauty Supply $ $ $ BSG Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) For the fiscal year 2015, Sally Beauty Supply's operating earnings reflects $5.3 million in expenses related to a restructuring of its operations in Germany. (b) Unallocated expenses consist of corporate and shared costs and are included in selling, general and administrative expenses in our consolidated statements of earnings. For the fiscal year 2016, 2015 and 2014, unallocated expenses reflect $14.6 million, $5.6 million (net of related insurance recovery of $0.6 million) and $2.5 million, respectively, related to the data security incidents. (c) For the fiscal year 2014, share-based compensation expenses reflect $3.5 million in expense in connection with the executive management transition plan disclosed in May 2014. Share-based compensation expenses are included in selling, general and administrative expenses in our consolidated statements of earnings. (d) For the fiscal year ended September 30, 2016, interest expense includes a loss on extinguishment of debt of $33.3 million in connection with the Company's December 2015 redemption of its senior notes due 2019. (e) Capital expenditures exclude amounts incurred but not paid at September 30, 2016 and 2015 of $3.8 million and $11.6 million, respectively. At September 30, 2014, such amounts were not material. |
Schedule of geographic area information | Geographic data for the fiscal years ended September 30, 2016, 2015 and 2014 are as follows (in thousands): Year Ended September 30, 2016 2015 2014 Net sales:(a) United States $ $ $ Other Countries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Identifiable assets: United States $ $ $ Other Countries Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Net sales are attributable to individual countries based on the location of the customer. For the fiscal year 2016 and 2015, net sales outside the U.S. include a net negative impact from changes in foreign currency exchange rates of $56.4 million and $87.3 million, respectively. For the fiscal year 2014, changes in foreign currency exchange rates did not have a material impact on sales. |
Parent, Issuers, Guarantor an42
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements | |
Schedule of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet Parent Sally Guarantor Non- Consolidating Sally Beauty Assets Cash and cash equivalents $ — $ $ $ $ — $ Trade and other accounts receivable, less allowance for doubtful accounts — — Due from affiliates — — — ) — Inventory — — — Other current assets — Deferred income tax assets — — Property and equipment, net — — Investment in subsidiaries — ) — Goodwill and other intangible assets, net — — — Other assets ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders' (Deficit) Equity Accounts payable $ $ $ $ $ — $ Due to affiliates — ) — Accrued liabilities — Income taxes payable — — — Long-term debt — — Other liabilities — — — Deferred income tax liabilities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) Total stockholders' (deficit) equity ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' (deficit) equity $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Balance Sheet Parent Sally Guarantor Non- Consolidating Sally Beauty Assets Cash and cash equivalents $ — $ $ $ $ — $ Trade and other accounts receivable, less allowance for doubtful accounts — — — Due from affiliates — — ) — Inventory — — — Other current assets — Deferred income tax assets — — Property and equipment, net — — Investment in subsidiaries — ) — Goodwill and other intangible assets, net — — — Other assets ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders' (Deficit) Equity Accounts payable $ — $ — $ $ $ — $ Due to affiliates ) — Accrued liabilities — Income taxes payable — — Long-term debt — — Other liabilities — — — Deferred income tax liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) Total stockholders' (deficit) equity ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' (deficit) equity $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of Condensed Consolidating Statement of Earnings and Comprehensive Income | Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating earnings (loss) ) ) — Interest expense (income) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss), net of tax — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total comprehensive income $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating earnings (loss) ) ) — Interest expense — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss), net of tax — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total comprehensive income (loss) $ $ $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating earnings (loss) ) ) — Interest expense — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss), net of tax — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total comprehensive income (loss) $ $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net cash provided by operating activities $ $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment ) — ) ) — ) Acquisitions, net of cash acquired — — ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by investing activities ) — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — — Repayments of long-term debt — ) ) ) — ) Debt issuance costs — ) — — — ) Repurchases of common stock ) — — — — ) Proceeds from exercises of stock options — — — — Excess tax benefit from share-based compensation — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by financing activities ) ) ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents — ) ) — ) Cash and cash equivalents, beginning of period — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period $ — $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net cash provided by operating activities $ $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment ) — ) ) — ) Acquisitions, net of cash acquired — — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by investing activities ) — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — Repayments of long-term debt — — ) ) — ) Repurchases of common stock ) — — — — ) Proceeds from exercises of stock options — — — — Excess tax benefit from share-based compensation — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by financing activities ) — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents — ) — Cash and cash equivalents, beginning of period — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period $ — $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net cash provided (used) by operating activities $ $ ) $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment — — ) ) — ) Acquisitions, net of cash acquired — — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used by investing activities — — ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — Repayments of long-term debt — ) ) ) — ) Debt issuance costs — ) — — — ) Repurchases of common stock ) — — — — ) Proceeds from exercises of stock options — — — — Excess tax benefit from share-based compensation — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash (used) provided by financing activities ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase in cash and cash equivalents — — Cash and cash equivalents, beginning of period — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period $ — $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Quarterly Financial Data (Una43
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Quarterly Financial Data (Unaudited) | |
Schedule of selected unaudited quarterly consolidated statement of earnings data | Certain unaudited quarterly consolidated statement of earnings information for the fiscal years ended September 30, 2016 and 2015 is summarized below (in thousands, except per share data): Fiscal Year 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter 2016: Net sales $ $ $ $ Gross profit $ $ $ $ Net earnings $ $ $ $ Earnings per common share(a) Basic $ $ $ $ Diluted $ $ $ $ 2015: Net sales $ $ $ $ Gross profit $ $ $ $ Net earnings $ $ $ $ Earnings per common share(a) Basic $ $ $ $ Diluted $ $ $ $ (a) The sum of the quarterly earnings per share may not equal the full year amount due to rounding of the calculated amounts. |
Significant Accounting Polici44
Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cash and Cash Equivalents | |||
Minimum period in which customer credit and debit card transactions are settled | 1 day | ||
Maximum period in which customer credit and debit card transactions are settled | 3 days | ||
Proceeds due from customers of credit and debit card and PayPal transactions | $ 15.1 | $ 13.3 | |
Inventory | |||
Average approximate inventory shrinkage, as percentage of consolidated net sales | 1.00% | 1.00% | 1.00% |
Significant Accounting Polici45
Significant Accounting Policies - Valuation of Long Lived Assets and Intangible Assets with Definite Lives (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Intangible assets with definite lives | |||
Estimated useful life | 4 years 7 months 6 days | ||
Goodwill and Intangible Assets with Indefinite Lives | |||
Impairment losses in connection with the goodwill | $ 0 | $ 0 | $ 0 |
Impairment of intangible assets with indefinite lives | $ 0 | $ 0 | $ 0 |
Minimum | |||
Intangible assets with definite lives | |||
Estimated useful life | 2 years | ||
Maximum | |||
Intangible assets with definite lives | |||
Estimated useful life | 13 years |
Significant Accounting Polici46
Significant Accounting Policies - Deferred Financing Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2011 | |
Deferred Financing Costs | |||
Unamortized Debt Issuance Expense | $ 18,113 | $ 15,276 | |
ABL facility | |||
Deferred Financing Costs | |||
Unamortized Debt Issuance Expense | 23,700 | 21,800 | |
Adjustments for New Accounting Pronouncement | Senior notes | |||
Deferred Financing Costs | |||
Unamortized Debt Issuance Expense | $ 23,700 | $ 21,800 | |
Sally Holdings, LLC | ABL facility | |||
Deferred Financing Costs | |||
Debt Instrument, Term | 5 years | 5 years | 5 years |
Other assets | ABL facility | |||
Deferred Financing Costs | |||
Unamortized Debt Issuance Expense | $ 1,600 | $ 2,400 |
Significant Accounting Polici47
Significant Accounting Policies - Self-Insurance Programs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Self-Insurance Programs | |||
Self Insurance Expense Adjustment | $ 6.3 | ||
Revenue Recognition | |||
Sales returns and allowance, average of net sales (as a percent) | 2.00% | 2.00% | 2.00% |
Shipping and Handling | |||
Shipping and handling costs | $ 56.2 | $ 53.1 | $ 52.2 |
Advertising Costs | |||
Advertising costs | $ 93 | $ 95.3 | $ 90.2 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Liabilities | ||
Long-term debt | $ 1,800,000 | $ 1,800,000 |
Unamortized debt issuance costs | 18,113 | 15,276 |
Fair value measurement on recurring basis | Total | ||
Assets | ||
Cash equivalents (a) | 46,003 | |
Total assets | 46,325 | |
Liabilities | ||
Long-term debt (c) | 1,899,749 | 1,873,620 |
Total liabilities | 1,900,021 | 1,873,678 |
Foreign exchange contracts | Fair value measurement on recurring basis | Total | ||
Assets | ||
Foreign exchange contracts (b) | 322 | |
Liabilities | ||
Foreign exchange contracts (b) | 272 | 58 |
Level 1 | Fair value measurement on recurring basis | ||
Assets | ||
Cash equivalents (a) | 46,003 | |
Total assets | 46,003 | |
Liabilities | ||
Long-term debt (c) | 1,897,625 | 1,870,750 |
Total liabilities | 1,897,625 | 1,870,750 |
Level 2 | Fair value measurement on recurring basis | ||
Assets | ||
Total assets | 322 | |
Liabilities | ||
Long-term debt (c) | 2,124 | 2,870 |
Total liabilities | 2,396 | 2,928 |
Level 2 | Foreign exchange contracts | Fair value measurement on recurring basis | ||
Assets | ||
Foreign exchange contracts (b) | 322 | |
Liabilities | ||
Foreign exchange contracts (b) | 272 | 58 |
ABL facility | ||
Liabilities | ||
Long-term debt (c) | 1,807,700 | 1,809,400 |
Unamortized debt issuance costs | $ 23,700 | $ 21,800 |
Accumulated Stockholders' Def49
Accumulated Stockholders' Deficit - Share Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share repurchase program | ||||
Cost of repurchase and retirement of common stock | $ 207,312 | $ 227,559 | $ 333,291 | |
Preferred stock | ||||
Preferred Stock, Shares Authorized | 50,000 | 50,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||
Preferred Stock, Shares Issued | 0 | 0 | ||
2014 Share Repurchase Program | ||||
Share repurchase program | ||||
Amount of shares authorized to be repurchased | $ 1,000,000 | |||
Term of share repurchase program | 3 years | |||
Common stock shares repurchased and retired (in shares) | 7,800 | 8,100 | ||
Cost of repurchase and retirement of common stock | $ 207,300 | $ 227,600 | ||
2013 Share Repurchase Program | ||||
Share repurchase program | ||||
Common stock shares repurchased and retired (in shares) | 12,600 | |||
Cost of repurchase and retirement of common stock | $ 333,300 |
Accumulated Stockholders' Def50
Accumulated Stockholders' Deficit - Accumulated other comprehensive loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accumulated Stockholders' Deficit | |||
Accumulated other comprehensive loss | $ 100,051 | $ 77,705 | |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | $ (578) | ||
Foreign currency translation adjustments | |||
Accumulated Stockholders' Deficit | |||
Accumulated other comprehensive loss | 100,100 | 77,700 | |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | $ 2,300 | $ 2,300 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share Reconciliation: | |||||||||||
Net earnings | $ 52,621 | $ 67,919 | $ 60,159 | $ 42,243 | $ 56,180 | $ 62,463 | $ 61,535 | $ 54,909 | $ 222,942 | $ 235,087 | $ 245,993 |
Total weighted average basic shares | 147,179,000 | 156,353,000 | 159,933,000 | ||||||||
Dilutive securities: | |||||||||||
Stock options and stock award programs (in shares) | 1,624,000 | 1,873,000 | 3,486,000 | ||||||||
Total weighted average diluted shares | 148,803,000 | 158,226,000 | 163,419,000 | ||||||||
Earnings per share: | |||||||||||
Basic (in dollars per share) | $ 0.36 | $ 0.47 | $ 0.41 | $ 0.28 | $ 0.36 | $ 0.40 | $ 0.39 | $ 0.35 | $ 1.51 | $ 1.50 | $ 1.54 |
Diluted (in dollars per share) | $ 0.36 | $ 0.46 | $ 0.41 | $ 0.28 | $ 0.36 | $ 0.39 | $ 0.39 | $ 0.35 | $ 1.50 | $ 1.49 | $ 1.51 |
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) | 1,061,068 | 1,090,459 | 130,952 |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-Based Payments | |||
Common stock approved for issuance under share-based compensation plan (in shares) | 29,800,000 | ||
Share-based compensation expense (in dollars) | $ 12,580 | $ 16,778 | $ 22,107 |
Accelerated expense related to certain retirement eligible employees (in dollars) | 1,300 | 4,800 | 8,800 |
Total income tax benefit recognized (in dollars) | $ 4,800 | 6,300 | $ 8,200 |
Executive management transition plan | |||
Share-Based Payments | |||
Accelerated expense related to certain retirement eligible employees (in dollars) | $ 3,500 | ||
Stock Option Awards | |||
Share-Based Payments | |||
Granted (in shares) | 1,486,000 | 1,200,000 | 1,600,000 |
Restricted Stock Awards | |||
Share-Based Payments | |||
Granted (in shares) | 40,000 | 222,000 | 247,000 |
Restricted Stock Awards | Executive management transition plan | |||
Share-Based Payments | |||
Granted (in shares) | 210,820 | ||
Restricted Stock Units | |||
Share-Based Payments | |||
Granted (in shares) | 28,000 | 20,000 | 27,000 |
Performance units | |||
Share-Based Payments | |||
Granted (in shares) | 152,000 | ||
Selling, general and administrative expenses | |||
Share-Based Payments | |||
Share-based compensation expense (in dollars) | $ 12,600 | $ 16,800 | $ 22,100 |
Share-Based Payments - Performa
Share-Based Payments - Performance-Based Awards (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Sep. 30, 2016USD ($)item$ / sharesshares | |
Minimum | Return on invested capital target | |
Share-Based Payments | |
Percentage of target achievement | 0.00% |
Maximum | Return on invested capital target | |
Share-Based Payments | |
Percentage of target achievement | 100.00% |
Performance units | |
Share-Based Payments | |
Expected life (in years) | 3 years |
Number of performance targets | item | 2 |
Compensation expenses as percentage of performance target (as a percent) | 100.00% |
Performance-Based Awards (in shares) | |
Granted (in shares) | shares | 152,000 |
Forfeited (in shares) | shares | (20,000) |
Unvested at the end of the period (in shares) | shares | 132,000 |
Performance-Based Awards (in dollars per share) | |
Granted (in dollars per share) | $ / shares | $ 23.45 |
Forfeited (in dollars per share) | $ / shares | 23.45 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 23.45 |
Performance-Based Awards (in years) | |
Weighted Average Remaining Vesting Term (in Years) | 2 years |
Total unrecognized compensation costs related to unvested stock option awards | $ | $ 2 |
Weighted average period for recognition of unvested awards | 2 years |
Performance units | Minimum | |
Share-Based Payments | |
Percentage of target shares | 0.00% |
Performance units | Minimum | Consolidated sales growth | |
Share-Based Payments | |
Percentage of target achievement | 0.00% |
Performance units | Maximum | |
Share-Based Payments | |
Percentage of target shares | 200.00% |
Performance units | Maximum | Consolidated sales growth | |
Share-Based Payments | |
Percentage of target achievement | 100.00% |
Share-Based Payments - Stock Op
Share-Based Payments - Stock Option Awards (Details) - Stock Option Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock Options, Number of Outstanding Options | |||
Outstanding at the beginning of the period (in shares) | 5,316 | ||
Granted (in shares) | 1,486 | 1,200 | 1,600 |
Exercised (in shares) | (938) | ||
Forfeited or expired (in shares) | (280) | ||
Outstanding at the end of the period (in shares) | 5,584 | 5,316 | |
Exercisable at the end of the period (in shares) | 3,550 | ||
Stock Options, Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 21.89 | ||
Granted (in dollars per share) | 23.65 | ||
Exercised (in dollars per share) | 17.27 | ||
Forfeited or expired (in dollars per share) | 25.64 | ||
Outstanding at the end of the period (in dollars per share) | 22.95 | $ 21.89 | |
Exercisable at the end of the period (in dollars per share) | $ 21.54 | ||
Stock Options, Weighted Average Remaining Contractual Term | |||
Weighted average remaining contractual term (in years) | 6 years 1 month 6 days | 6 years 9 months 18 days | |
Exercisable at the end of the period | 5 years 4 months 24 days | ||
Stock Options, Aggregate Intrinsic Value | |||
Outstanding at the beginning of the period (in dollars) | $ 19,255 | ||
Outstanding at the end of the period (in dollars) | 19,615 | $ 19,255 | |
Exercisable at the end of the period (in dollars) | $ 17,071 | ||
Minimum | |||
Share-Based Payments | |||
Vesting period | 3 years | ||
Maximum | |||
Share-Based Payments | |||
Term of stock options | 10 years | ||
Vesting period | 4 years |
Share-Based Payments - Summary
Share-Based Payments - Summary of stock options by range of exercise prices (Details) shares in Thousands | 12 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Options Outstanding | |
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares | 5,584 |
Range of Exercise Prices, Weighted Average Remaining Contractual Term | 6 years 1 month 6 days |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 22.95 |
Options Exercisable | |
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares | 3,550 |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 21.54 |
Range of Exercise Prices $5.24 - 19.99 | |
Information about stock options under option plans | |
Lower Range of Exercise Prices (in dollars per share) | 5.24 |
Upper Range of Exercise Prices (in dollars per share) | $ 19.99 |
Options Outstanding | |
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares | 1,169 |
Range of Exercise Prices, Weighted Average Remaining Contractual Term | 3 years 7 months 6 days |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 12.84 |
Options Exercisable | |
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares | 1,169 |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 12.84 |
Range of Exercise Prices $20.00 - 31.58 | |
Information about stock options under option plans | |
Lower Range of Exercise Prices (in dollars per share) | 20 |
Upper Range of Exercise Prices (in dollars per share) | $ 31.58 |
Options Outstanding | |
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares | 4,415 |
Range of Exercise Prices, Weighted Average Remaining Contractual Term | 6 years 8 months 12 days |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 25.63 |
Options Exercisable | |
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares | 2,381 |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 25.81 |
Share-Based Payments - Schedule
Share-Based Payments - Schedule of weighted average assumptions for valuation of stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock option disclosures | |||
Proceeds from exercises of stock options | $ 16,220 | $ 54,351 | $ 26,663 |
Stock Option Awards | |||
Weighted average assumptions relating to the valuation of stock options | |||
Expected life (in years) | 5 years | 5 years | 5 years |
Expected volatility (as a percent) | 27.20% | 30.90% | 47.30% |
Risk-free interest rate (as a percent) | 1.50% | 1.60% | 1.30% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Stock option disclosures | |||
Weighted average fair value of the stock options issued (in dollars per share) | $ 6.32 | $ 8.78 | $ 11.08 |
Aggregate fair value of stock options | $ 16,500 | $ 10,000 | $ 19,500 |
Aggregate intrinsic value of options exercised | 11,000 | 86,700 | 50,300 |
Proceeds from exercises of stock options | 16,200 | 54,400 | 26,700 |
Tax benefit realized for the tax deductions of stock option exercises | 3,700 | $ 31,700 | $ 18,300 |
Total unrecognized compensation costs related to unvested stock option awards | $ 8,500 | ||
Weighted average period for recognition of unvested awards | 1 year 9 months 18 days |
Share-Based Payments - Restrict
Share-Based Payments - Restricted Stock Awards (Details) - Restricted Stock Awards - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restricted stock (in shares) | |||
Unvested at the beginning of the period (in shares) | 446,000 | ||
Granted (in shares) | 40,000 | 222,000 | 247,000 |
Vested (in shares) | (192,000) | ||
Forfeited (in shares) | (23,000) | ||
Unvested at the end of the period (in shares) | 271,000 | 446,000 | |
Restricted Stock (in dollars per share) | |||
Unvested at the beginning of the period (in dollars per share) | $ 25.82 | ||
Granted (in dollars per share) | 25.35 | ||
Vested (in dollars per share) | 24.16 | ||
Forfeited (in dollars per share) | 27.18 | ||
Unvested at the end of the period (in dollars per share) | $ 26.80 | $ 25.82 | |
Restricted stock (in years) | |||
Weighted Average Remaining Vesting Term (in Years) | 1 year 10 months 24 days | 2 years 9 months 18 days | |
Total unrecognized compensation costs | $ 3 | ||
Weighted average period for recognition of unvested restricted awards | 1 year 10 months 24 days | ||
Executive management transition plan | |||
Stock Awards | |||
Granted (in shares) | 210,820 | ||
Minimum | |||
Restricted stock (in years) | |||
Vesting period | 3 years | ||
Weighted average period for recognition of unvested restricted awards | 3 years | ||
Minimum | Executive management transition plan | |||
Restricted stock (in years) | |||
Vesting period | 3 years | ||
Maximum | |||
Restricted stock (in years) | |||
Vesting period | 5 years | ||
Weighted average period for recognition of unvested restricted awards | 5 years | ||
Maximum | Executive management transition plan | |||
Restricted stock (in years) | |||
Vesting period | 4 years |
Share-Based Payments - Restri58
Share-Based Payments - Restricted Stock Units (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restricted stock (in shares) | |||
Granted (in shares) | 28,000 | 20,000 | 27,000 |
Vested (in shares) | (28,000) | ||
Restricted Stock (in dollars per share) | |||
Granted (in dollars per share) | $ 24.10 | ||
Vested (in dollars per share) | $ 24.10 | ||
Restricted stock (in years) | |||
Vesting period | 1 year | ||
Restricted stock units, retention period | 6 months | ||
Total unrecognized compensation costs | $ 0 | ||
Maximum | |||
Restricted stock (in years) | |||
Vesting period | 1 year |
Allowance for Doubtful Accoun59
Allowance for Doubtful Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Change in the allowance for doubtful accounts | |||
Balance at beginning of period | $ 1,162 | $ 1,752 | $ 2,556 |
Bad debt expense | 1,939 | 2,282 | 1,175 |
Uncollected accounts written off, net of recoveries | (1,694) | (2,872) | (1,979) |
Balance at end of period | $ 1,407 | $ 1,162 | $ 1,752 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Property and Equipment, Net | |||
Total property and equipment, gross | $ 787,423 | $ 699,348 | |
Less accumulated depreciation and amortization | (467,865) | (428,501) | |
Total property and equipment, net | 319,558 | 270,847 | |
Depreciation expense | 86,300 | 75,100 | $ 65,100 |
Land | |||
Property and Equipment, Net | |||
Total property and equipment, gross | 11,113 | 11,074 | |
Buildings and building improvements | |||
Property and Equipment, Net | |||
Total property and equipment, gross | $ 62,087 | 59,407 | |
Buildings and building improvements | Minimum | |||
Property and Equipment, Net | |||
Useful lives | 5 years | ||
Buildings and building improvements | Maximum | |||
Property and Equipment, Net | |||
Useful lives | 40 years | ||
Leasehold improvements | |||
Property and Equipment, Net | |||
Total property and equipment, gross | $ 238,173 | 245,309 | |
Furniture, fixtures and equipment | |||
Property and Equipment, Net | |||
Total property and equipment, gross | $ 476,050 | $ 383,558 | |
Furniture, fixtures and equipment | Minimum | |||
Property and Equipment, Net | |||
Useful lives | 2 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property and Equipment, Net | |||
Useful lives | 10 years |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill | |||
Impairment losses in connection with the goodwill | $ 0 | $ 0 | $ 0 |
Impairment losses in connection with the intangible assets | 0 | 0 | 0 |
Amortization expense | 13,300 | 14,300 | 14,500 |
Change in the carrying amounts of goodwill | |||
Balance at the beginning of the period | 524,369 | 536,341 | |
Acquisitions | 12,797 | 2,814 | |
Foreign currency translation | (4,452) | (14,786) | |
Balance at the end of the period | 532,714 | 524,369 | 536,341 |
Sally Beauty Supply | |||
Change in the carrying amounts of goodwill | |||
Balance at the beginning of the period | 83,216 | 91,332 | |
Foreign currency translation | (3,674) | (8,116) | |
Balance at the end of the period | 79,542 | 83,216 | 91,332 |
Beauty Systems Group | |||
Goodwill | |||
Intangible assets subject to amortization recorded in connection with acquisitions | 10,100 | ||
Change in the carrying amounts of goodwill | |||
Balance at the beginning of the period | 441,153 | 445,009 | |
Acquisitions | 12,797 | 2,814 | |
Foreign currency translation | (778) | (6,670) | |
Balance at the end of the period | $ 453,172 | $ 441,153 | $ 445,009 |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets - Intangible assets with indefinite lives (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Trade names | $ 43,926 | $ 46,499 |
Intangible assets subject to amortization: | ||
Gross carrying amount | 159,750 | 150,246 |
Accumulated amortization | (110,713) | (97,897) |
Net book value | 49,037 | 52,349 |
Total intangible assets, excluding goodwill, net | 92,963 | 98,848 |
Sally Beauty Supply | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Trade names | 17,732 | 19,289 |
Intangible assets subject to amortization: | ||
Gross carrying amount | 27,271 | 27,352 |
Accumulated amortization | (17,127) | (14,991) |
Net book value | 10,144 | 12,361 |
Total intangible assets, excluding goodwill, net | 27,876 | 31,650 |
Beauty Systems Group | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Trade names | 26,194 | 27,210 |
Intangible assets subject to amortization: | ||
Gross carrying amount | 132,479 | 122,894 |
Accumulated amortization | (93,586) | (82,906) |
Net book value | 38,893 | 39,988 |
Total intangible assets, excluding goodwill, net | $ 65,087 | $ 67,198 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets - Estimated future amortization expense related to intangible assets subject to amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Estimated future amortization expense related to intangible assets subject to amortization: | ||
2,017 | $ 13,039 | |
2,018 | 11,513 | |
2,019 | 10,137 | |
2,020 | 7,346 | |
2,021 | 3,819 | |
Thereafter | 3,183 | |
Net book value | $ 49,037 | $ 52,349 |
Intangible assets weighted average amortization period | 4 years 7 months 6 days |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Accrued Liabilities | ||
Compensation and benefits | $ 75,675 | $ 81,319 |
Interest payable | 35,624 | 40,837 |
Deferred revenue | 23,220 | 22,674 |
Loss contingency obligation | 15,644 | 2,859 |
Rental obligations | 12,942 | 12,641 |
Property and other taxes | 4,870 | 4,730 |
Insurance reserves | 6,472 | 7,783 |
Operating accruals and other | 40,137 | 35,874 |
Total accrued liabilities | $ 214,584 | $ 208,717 |
Commitments and Contingencies65
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Fiscal Year: | |||
2,017 | $ 176,066 | ||
2,018 | 148,397 | ||
2,019 | 114,586 | ||
2,020 | 81,074 | ||
2,021 | 52,403 | ||
Thereafter | 77,741 | ||
Total operating lease, future minimum payments due | 650,267 | ||
Total rental expense for operating leases | $ 231,000 | $ 223,200 | $ 218,000 |
Commitments and Contingencies -
Commitments and Contingencies - Other Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Commitments and contingencies | |||
Data security incident expenses | $ 15.6 | $ 2.9 | |
Data security incidents | |||
Commitments and contingencies | |||
Insurance recovery | 0.6 | ||
Selling, general and administrative expenses | 2015 data security incident | |||
Commitments and contingencies | |||
Accrued liability related to loss contingency | 12.8 | ||
Selling, general and administrative expenses | 2014 data security incident | |||
Commitments and contingencies | |||
Accrued liability related to loss contingency | 2.9 | ||
Selling, general and administrative expenses | Data security incidents | |||
Commitments and contingencies | |||
Data security incident expenses | $ 14.6 | 5.6 | $ 2.5 |
Insurance recovery | $ 0.6 |
Short-term Borrowings and Lon67
Short-term Borrowings and Long-Term Debt - Details of Long-Term Debt Table (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2012 | |
Debt Instruments | |||||
Total | $ 1,800,000 | $ 1,800,000 | |||
ABL facility | Prime | Minimum | |||||
Debt Instruments | |||||
Percentage points added to the reference rate | 0.50% | ||||
ABL facility | Prime | Maximum | |||||
Debt Instruments | |||||
Percentage points added to the reference rate | 0.75% | ||||
ABL facility | LIBOR | Minimum | |||||
Debt Instruments | |||||
Percentage points added to the reference rate | 1.50% | ||||
ABL facility | LIBOR | Maximum | |||||
Debt Instruments | |||||
Percentage points added to the reference rate | 1.75% | ||||
Senior notes due Nov. 2019 | |||||
Debt Instruments | |||||
Total | 750,000 | ||||
Interest rate (as a percent) | 6.875% | 6.875% | |||
Senior notes due Jun. 2022 | |||||
Debt Instruments | |||||
Total | $ 850,000 | 850,000 | |||
Interest rate (as a percent) | 5.75% | 5.75% | |||
Senior notes due Nov. 2023 | |||||
Debt Instruments | |||||
Total | $ 200,000 | $ 200,000 | |||
Interest rate (as a percent) | 5.50% | 5.50% | |||
Senior notes due Dec. 2025 | |||||
Debt Instruments | |||||
Total | $ 750,000 | ||||
Interest rate (as a percent) | 5.625% | 5.625% |
Short-term Borrowings and Lon68
Short-term Borrowings and Long-Term Debt - Details of Long-Term Debt Table - Total debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Short-term Borrowings and Long-Term Debt | ||
Total | $ 1,800,000 | $ 1,800,000 |
Plus: capital lease obligations | 2,123 | 2,870 |
Less: unamortized debt issuance costs and premium, net | 18,113 | 15,276 |
Total debt | $ 1,784,010 | $ 1,787,594 |
Short-term Borrowings and Lon69
Short-term Borrowings and Long-Term Debt - Details of Long-Term Debt Table - Total long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Short-term Borrowings and Long-Term Debt | ||
Total debt | $ 1,784,010 | $ 1,787,594 |
Less: current portion | 716 | 755 |
Total long-term debt | $ 1,783,294 | $ 1,786,839 |
Short-term Borrowings and Lon70
Short-term Borrowings and Long-Term Debt - Details of Long-Term Debt Table - Subscript Details (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Debt Instruments | ||
Unamortized premium related to certain notes | $ 5,600 | $ 6,500 |
Unamortized deferred financing costs | 18,113 | 15,276 |
Aggregate principal amount related to certain notes | 150,000 | |
ABL facility | ||
Debt Instruments | ||
Unamortized deferred financing costs | 23,700 | 21,800 |
ABL facility | Other assets | ||
Debt Instruments | ||
Unamortized deferred financing costs | $ 1,600 | $ 2,400 |
Short-term Borrowings and Lon71
Short-term Borrowings and Long-Term Debt - ABL Facility and Senior Notes (Details) - USD ($) $ in Thousands | Dec. 03, 2015 | Dec. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2006 |
Debt Instruments | |||||||||
Aggregate principal amount of debt retired | $ 1,391,900 | ||||||||
Long-term Debt | $ 1,800,000 | ||||||||
Net loss on extinguishment of debt | 33,296 | ||||||||
Capitalized financing costs | 12,748 | $ 3,896 | |||||||
Sally Investment Holdings LLC and Sally Holdings, LLC | |||||||||
Debt Instruments | |||||||||
Debt instrument, face amount | $ 1,850,000 | ||||||||
ABL facility | |||||||||
Debt Instruments | |||||||||
Revolving credit facility | $ 500,000 | ||||||||
Outstanding borrowings | 0 | ||||||||
Remaining credit facility available | $ 478,400 | ||||||||
Commitment fee for line of credit facility (as a percent) | 0.25% | ||||||||
Long-term Debt | 88,500 | ||||||||
ABL facility | Sally Holdings, LLC | |||||||||
Debt Instruments | |||||||||
Revolving credit facility | $ 400,000 | ||||||||
Line of credit facility term | 5 years | 5 years | 5 years | ||||||
Canadian sub-facility | |||||||||
Debt Instruments | |||||||||
Revolving credit facility | $ 25,000 | ||||||||
Senior notes due Nov. 2019 | |||||||||
Debt Instruments | |||||||||
Debt instrument, face amount | $ 750,000 | ||||||||
Interest rate (as a percent) | 6.875% | 6.875% | |||||||
Redemption premium (as a percent) | 103.438% | ||||||||
Total redemption cost | $ 775,800 | ||||||||
Net loss on extinguishment of debt | 33,300 | $ 33,300 | |||||||
Redemption premium of debt | 25,800 | ||||||||
Unamortized deferred financing costs | 7,500 | ||||||||
Senior notes due Jun. 2022 | |||||||||
Debt Instruments | |||||||||
Debt instrument, face amount | $ 850,000 | ||||||||
Interest rate (as a percent) | 5.75% | 5.75% | |||||||
Senior notes due Nov. 2023 | |||||||||
Debt Instruments | |||||||||
Debt instrument, face amount | $ 200,000 | ||||||||
Interest rate (as a percent) | 5.50% | 5.50% | |||||||
Proceeds used to repay borrowings | $ 196,300 | ||||||||
Senior notes due Dec. 2025 | |||||||||
Debt Instruments | |||||||||
Debt instrument, face amount | 750,000 | ||||||||
Interest rate (as a percent) | 5.625% | 5.625% | |||||||
Proceeds used to repay borrowings | 737,300 | ||||||||
Capitalized financing costs | $ 12,700 | ||||||||
Maximum percentage of original principal amount that can be redeemed from specified proceeds | 35.00% | ||||||||
Senior notes due 2022 issued for $150 million | |||||||||
Debt Instruments | |||||||||
Debt instrument, face amount | $ 150,000 |
Short-term Borrowings and Lon72
Short-term Borrowings and Long-Term Debt - Maturities of the Company's long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Fiscal Year | ||
Thereafter | $ 1,800,000 | |
Total | 1,800,000 | $ 1,800,000 |
Plus: capital lease obligations | 2,123 | 2,870 |
Less: unamortized debt issuance costs and premium, net | 18,113 | |
Less: current portion | 716 | 755 |
Total long-term debt | $ 1,783,294 | $ 1,786,839 |
Short-term Borrowings and Lon73
Short-term Borrowings and Long-Term Debt - ABL Facility and Senior Notes Additional Details (Details) $ in Thousands | 12 Months Ended | |||
Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Debt Instruments | ||||
Cash and cash equivalents | $ 86,622 | $ 140,038 | $ 106,575 | $ 47,115 |
Letter of credit | $ 21,600 | $ 23,100 | ||
ABL facility | ||||
Debt Instruments | ||||
Secured Leverage Ratio, threshold | 4 | |||
Secured Leverage Ratio | 0.1 | |||
Minimum borrowing availability | $ 40,000 | |||
Percentage of borrowing base | 10.00% | |||
Revolving credit facility | $ 500,000 | |||
Consolidated Fixed-Charge Coverage Ratio, threshold | 1 | |||
Consolidated Fixed-Charge Coverage Ratio | 3.1 | |||
ABL facility after Second Amendment | Restricted payments up to $30.0 million | ||||
Debt Instruments | ||||
Restricted payments | $ 30,000 | |||
Minimum borrowing availability | $ 75,000 | |||
Percentage of borrowing base | 15.00% | |||
Period prior to payments of dividends and other equity distributions up to certain thresholds under the terms of the credit facility must be met | 45 days | |||
ABL facility after Second Amendment | Restricted payments in excess of $30.0 million | ||||
Debt Instruments | ||||
Minimum borrowing availability | $ 100,000 | |||
Percentage of borrowing base | 20.00% | |||
Revolving credit facility | $ 150,000 | |||
Period prior to payments of dividends and other equity distributions up to certain thresholds under the terms of the credit facility must be met | 45 days | |||
Consolidated Fixed-Charge Coverage Ratio, threshold | 1.1 | |||
Percentage of lesser of $150.0 million or borrowing base, considered for applicability of Consolidated Fixed Charge Coverage Ratio | 30 | |||
Trailing period preceding proposed Restricted Payment | 12 months | |||
Senior notes due 2022, 2023 and 2025 | ||||
Debt Instruments | ||||
Consolidated Coverage Ratio, threshold | 2 | |||
Consolidated Coverage Ratio | 6.1 | |||
Number of consecutive fiscal quarters | item | 4 | |||
Percentage of Sally Holdings and its subsidiaries cumulative consolidated net earnings | 50.00% | |||
Consolidated Total Leverage Ratio, threshold | 3.25 | |||
Consolidated Total Leverage Ratio | 2.7 | |||
Senior notes due 2022, 2023 and 2025 | Maximum | ||||
Debt Instruments | ||||
Cash and cash equivalents | $ 100,000 | |||
Senior notes due Dec. 2025 | ||||
Debt Instruments | ||||
Maximum conditional amount of debt for restricted payments | $ 350,000 |
Derivative Instruments and He74
Derivative Instruments and Hedging Activities - (Details) - Sep. 30, 2016 € in Millions, £ in Millions, MXN in Millions, CAD in Millions, $ in Millions | MXNinstrument | EUR (€)instrument | GBP (£)instrument | CADinstrument | USD ($)instrument |
Designated Cash Flow Hedges | |||||
Number of derivative instruments held | 0 | 0 | 0 | 0 | 0 |
USD:EUR | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges To Manage Exposure Of International Subsidiaries Purchases Of Merchandise From Third Party Suppliers | |||||
Derivative Instruments | |||||
Notional amount | € 16 | $ 18 | |||
Non-designated Cash Flow Hedges | |||||
Weighted average contractual exchange rate for buy contracts (as a percent) | 1.1219 | 1.1219 | 1.1219 | 1.1219 | 1.1219 |
USD:EUR | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances | |||||
Derivative Instruments | |||||
Notional amount | € 22.4 | $ 25.1 | |||
Non-designated Cash Flow Hedges | |||||
Contractual exchange rate (as a percent) | 1.1267 | 1.1267 | 1.1267 | 1.1267 | 1.1267 |
USD:CAD | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances | |||||
Derivative Instruments | |||||
Notional amount | CAD 4.1 | $ 3.1 | |||
Non-designated Cash Flow Hedges | |||||
Contractual exchange rate (as a percent) | 1.3121 | 1.3121 | 1.3121 | 1.3121 | 1.3121 |
CAD:USD | Purchase | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances | |||||
Derivative Instruments | |||||
Notional amount | CAD 15.5 | $ 11.8 | |||
Non-designated Cash Flow Hedges | |||||
Contractual exchange rate (as a percent) | 1.3078 | 1.3078 | 1.3078 | 1.3078 | 1.3078 |
USD:MXN | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances | |||||
Derivative Instruments | |||||
Notional amount | MXN 17.9 | $ 0.9 | |||
Non-designated Cash Flow Hedges | |||||
Contractual exchange rate (as a percent) | 19.4605 | 19.4605 | 19.4605 | 19.4605 | 19.4605 |
UK Pounds:USD | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances | |||||
Derivative Instruments | |||||
Notional amount | £ 7.2 | $ 9.3 | |||
Non-designated Cash Flow Hedges | |||||
Contractual exchange rate (as a percent) | 1.3030 | 1.3030 | 1.3030 | 1.3030 | 1.3030 |
Derivative Instruments and He75
Derivative Instruments and Hedging Activities - Non-designated Cash Flow Hedges (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Derivatives Not Designated as Hedging Instruments | ||
Total derivatives not designated as hedging instruments, Asset | $ 322 | |
Total derivatives not designated as hedging instruments, Liability | $ 272 | 58 |
Other current assets | ||
Derivatives Not Designated as Hedging Instruments | ||
Foreign Exchange Contracts, Asset | 322 | |
Accrued liabilities | ||
Credit-risk-related Contingent Features | ||
Foreign Exchange Contracts, Liability | $ 272 | $ 58 |
Derivative Instruments and He76
Derivative Instruments and Hedging Activities - Derivatives Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivatives Designated as Hedging Instruments | |||
Derivatives not designated as hedging instruments | $ (1,051) | $ 2,731 | $ 1,935 |
Probable loss on counterparty defaults | 0 | ||
Selling, general and administrative expenses | |||
Derivatives Designated as Hedging Instruments | |||
Amount of Gain or (Loss) Recognized in Income on Derivatives, Foreign Exchange Contracts | (1,100) | 2,700 | 1,900 |
Foreign exchange contracts | |||
Credit-risk-related Contingent Features | |||
Aggregate fair value of all foreign exchange contracts held in a liability position | 300 | ||
Foreign exchange contracts | Selling, general and administrative expenses | |||
Derivatives Designated as Hedging Instruments | |||
Amount of Gain or (Loss) Recognized in Income on Derivatives, Foreign Exchange Contracts | $ (1,051) | $ 2,731 | $ 1,935 |
401(k) and Profit Sharing Plan
401(k) and Profit Sharing Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
401(k) and Profit Sharing Plan | |||
Defined contribution plan, expense recognized | $ 7.1 | $ 6.8 | $ 6.4 |
Profit sharing plan, expense recognized | $ 2.6 | $ 3.3 | $ 3.2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Current: | |||
Federal | $ 87,088 | $ 113,023 | $ 121,418 |
Foreign | 8,795 | 9,531 | 9,414 |
State | 13,816 | 13,686 | 14,637 |
Total current portion | 109,699 | 136,240 | 145,469 |
Deferred: | |||
Federal | 20,915 | 7,963 | (335) |
Foreign | (932) | (1,461) | (895) |
State | 1,436 | 655 | 447 |
Total deferred portion | 21,419 | 7,157 | (783) |
Total provision for income taxes | $ 131,118 | $ 143,397 | $ 144,686 |
Reconciliation between the U.S. statutory federal income tax rate and the effective income tax rate | |||
Statutory tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal tax benefit (as a percent) | 2.90% | 2.70% | 2.70% |
Effect of foreign operations (as a percent) | (0.40%) | (0.10%) | (0.50%) |
Other, net (as a percent) | (0.50%) | 0.30% | (0.20%) |
Effective tax rate (as a percent) | 37.00% | 37.90% | 37.00% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Deferred tax assets attributable to: | |||
Share-based compensation expense | $ 18,425 | $ 17,082 | |
Accrued liabilities | 32,145 | 27,949 | |
Inventory adjustments | 4,492 | 3,055 | |
Foreign loss carryforwards | 36,419 | 35,315 | |
Unrecognized tax benefits | 532 | 471 | |
Other | 3,225 | 4,065 | |
Total deferred tax assets | 95,238 | 87,937 | |
Valuation allowance | (36,571) | (34,965) | |
Total deferred tax assets, net | 58,667 | 52,972 | |
Deferred tax liabilities attributable to: | |||
Depreciation and amortization | 131,201 | 103,697 | |
Total deferred tax liabilities | 131,201 | 103,697 | |
Net deferred tax liability | 72,534 | 50,725 | |
Domestic earnings before provision for income taxes | 327,100 | 362,100 | $ 361,800 |
Foreign earnings before provision for income taxes | 27,000 | 16,400 | $ 28,900 |
Accumulated undistributed earnings of the Company's foreign operations | 263,000 | 233,200 | |
Total operating loss carry-forward | 117,900 | 114,200 | |
Operating loss carry-forward, subject to valuation allowance | 104,000 | 98,400 | |
Amount of operating loss carry-forwards with an expiration date | 13,900 | ||
Amount of operating loss carry-forwards without an expiration date | 104,000 | ||
Total tax credit carryforwards | 3,100 | $ 3,400 | |
Expiring tax credit carryforwards | 1,900 | ||
Non-expiring tax credit carryforwards | $ 1,200 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the changes in the amount of unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of the changes in the amount of unrecognized tax benefits | ||
Balance at beginning of the fiscal year | $ 2,982 | $ 2,867 |
Increases related to prior year tax positions | 447 | 43 |
Decreases related to prior year tax positions | (18) | (134) |
Increases related to current year tax positions | 275 | 308 |
Settlements | (2,261) | |
Lapse of statute | (130) | (102) |
Balance at end of fiscal year | 1,295 | 2,982 |
Total unrecognized tax benefits of accrued interest and penalties | $ 200 | $ 1,200 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016USD ($)store | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Peerless | |||
Acquisitions | |||
Cost of acquisition | $ 23.9 | ||
Intangible assets subject to amortization | 7.8 | ||
Goodwill expected to be deducted for tax purposes | $ 13.1 | ||
Number of beauty supply stores | store | 15 | ||
Not individually material acquisitions | |||
Acquisitions | |||
Cost of acquisition | $ 2.3 | $ 7.1 | $ 4.9 |
Intangible assets subject to amortization | $ 2.3 | 2.2 | 1.4 |
Goodwill expected to be deducted for tax purposes | $ 2.8 | $ 2.6 |
Business Segments and Geograp82
Business Segments and Geographic Area Information (Details) $ in Thousands | Dec. 03, 2015USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) |
Segments | ||||||||||||
Number of operating segments | segment | 2 | |||||||||||
Net sales: | ||||||||||||
Total net sales | $ 976,358 | $ 998,161 | $ 980,067 | $ 998,032 | $ 964,230 | $ 967,890 | $ 937,755 | $ 964,468 | $ 3,952,618 | $ 3,834,343 | $ 3,753,498 | |
Identifiable assets: | ||||||||||||
Assets | 2,132,063 | 2,094,351 | 2,132,063 | 2,094,351 | 2,004,319 | |||||||
Depreciation and amortization: | ||||||||||||
Depreciation and amortization | 99,657 | 89,391 | 79,663 | |||||||||
Capital expenditures: | ||||||||||||
Capital expenditures | 151,220 | 106,532 | 76,814 | |||||||||
Changes in foreign currency exchange rates | ||||||||||||
Loss on foreign currency exchange | 56,400 | (87,300) | ||||||||||
Segment operating earnings: | ||||||||||||
Segment operating earnings | 498,297 | 495,326 | 506,996 | |||||||||
Share-based compensation expense | (12,580) | (16,778) | (22,107) | |||||||||
Interest expense | (144,237) | (116,842) | (116,317) | |||||||||
Earnings before provision for income taxes | 354,060 | 378,484 | 390,679 | |||||||||
Loss on extinguishment of debt | ||||||||||||
Net loss on extinguishment of debt | 33,296 | |||||||||||
Capital expenditures exclude amounts incurred but not paid | 3,800 | 11,600 | ||||||||||
Senior notes due Nov. 2019 | ||||||||||||
Loss on extinguishment of debt | ||||||||||||
Net loss on extinguishment of debt | $ 33,300 | 33,300 | ||||||||||
Operating segments | ||||||||||||
Identifiable assets: | ||||||||||||
Assets | 1,993,428 | 1,952,321 | 1,993,428 | 1,952,321 | 1,928,884 | |||||||
Segment operating earnings: | ||||||||||||
Segment operating earnings | 664,266 | 643,544 | 648,626 | |||||||||
Corporate | ||||||||||||
Identifiable assets: | ||||||||||||
Assets | 138,635 | 142,030 | 138,635 | 142,030 | 75,435 | |||||||
Depreciation and amortization: | ||||||||||||
Depreciation and amortization | 14,226 | 15,141 | 11,862 | |||||||||
Capital expenditures: | ||||||||||||
Capital expenditures | 31,607 | 23,794 | 14,521 | |||||||||
Segment operating earnings: | ||||||||||||
Unallocated expenses | (153,389) | (131,440) | (119,523) | |||||||||
Sally Beauty Supply | ||||||||||||
Net sales: | ||||||||||||
Total net sales | 2,364,531 | 2,329,523 | 2,308,743 | |||||||||
Sally Beauty Supply | Operating segments | ||||||||||||
Identifiable assets: | ||||||||||||
Assets | 972,441 | 976,152 | 972,441 | 976,152 | 959,210 | |||||||
Depreciation and amortization: | ||||||||||||
Depreciation and amortization | 55,460 | 45,572 | 41,019 | |||||||||
Capital expenditures: | ||||||||||||
Capital expenditures | 95,587 | 65,983 | 43,114 | |||||||||
Segment operating earnings: | ||||||||||||
Segment operating earnings | 409,787 | 412,393 | 431,655 | |||||||||
Beauty Systems Group | ||||||||||||
Net sales: | ||||||||||||
Total net sales | 1,588,087 | 1,504,820 | 1,444,755 | |||||||||
Beauty Systems Group | Operating segments | ||||||||||||
Identifiable assets: | ||||||||||||
Assets | 1,020,987 | 976,169 | 1,020,987 | 976,169 | 969,674 | |||||||
Depreciation and amortization: | ||||||||||||
Depreciation and amortization | 29,971 | 28,678 | 26,782 | |||||||||
Capital expenditures: | ||||||||||||
Capital expenditures | 24,026 | 16,755 | 19,179 | |||||||||
Segment operating earnings: | ||||||||||||
Segment operating earnings | 254,479 | 231,151 | 216,971 | |||||||||
Selling, general and administrative expenses | ||||||||||||
Segment operating earnings: | ||||||||||||
Share-based compensation expense | (12,600) | (16,800) | (22,100) | |||||||||
Executive management transition plan | Corporate | ||||||||||||
Segment operating earnings: | ||||||||||||
Share-based compensation expense | (3,500) | |||||||||||
Germany | Restructuring charges | Sally Beauty Supply | ||||||||||||
Segment operating earnings: | ||||||||||||
Segment operating earnings | 5,300 | |||||||||||
United States | ||||||||||||
Net sales: | ||||||||||||
Total net sales | 3,261,648 | 3,145,894 | 3,031,000 | |||||||||
Identifiable assets: | ||||||||||||
Assets | 1,505,237 | 1,460,413 | 1,505,237 | 1,460,413 | 1,405,671 | |||||||
Foreign | ||||||||||||
Net sales: | ||||||||||||
Total net sales | 690,970 | 688,449 | 722,498 | |||||||||
Identifiable assets: | ||||||||||||
Assets | 488,191 | 491,908 | 488,191 | 491,908 | 523,213 | |||||||
Corporate | Corporate | ||||||||||||
Identifiable assets: | ||||||||||||
Assets | $ 138,635 | $ 142,030 | 138,635 | 142,030 | 75,435 | |||||||
Data security incidents | ||||||||||||
Segment operating earnings: | ||||||||||||
Insurance recovery | 600 | |||||||||||
Data security incidents | Selling, general and administrative expenses | ||||||||||||
Segment operating earnings: | ||||||||||||
Unallocated expenses | $ 14,600 | (5,600) | $ (2,500) | |||||||||
Insurance recovery | $ 600 |
Parent, Issuers, Guarantor an83
Parent, Issuers, Guarantor and Non Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 |
Condensed Consolidating Balance Sheet | ||||
Percentage of guarantor subsidiaries owned by parent | 100.00% | |||
Assets | ||||
Cash and cash equivalents | $ 86,622 | $ 140,038 | $ 106,575 | $ 47,115 |
Trade and other accounts receivable, less allowance for doubtful accounts | 83,983 | 91,092 | ||
Inventory | 907,337 | 885,214 | ||
Other current assets | 54,861 | 37,049 | ||
Deferred income tax assets | 40,024 | 33,709 | ||
Property and equipment, net | 319,558 | 270,847 | ||
Goodwill and other intangible assets, net | 625,677 | 623,217 | ||
Other assets | 14,001 | 13,185 | ||
Total assets | 2,132,063 | 2,094,351 | 2,004,319 | |
Liabilities and Stockholders' (Deficit) Equity | ||||
Accounts payable | 271,376 | 275,917 | ||
Accrued liabilities | 214,584 | 208,717 | ||
Income taxes payable | 1,989 | 6,310 | ||
Long-term debt | 1,784,010 | 1,787,594 | ||
Other liabilities | 21,614 | 27,734 | ||
Deferred income tax liabilities | 114,656 | 85,900 | ||
Total liabilities | 2,408,229 | 2,392,172 | ||
Total stockholders' (deficit) equity | (276,166) | (297,821) | (347,053) | (303,479) |
Total liabilities and stockholders' deficit | 2,132,063 | 2,094,351 | ||
Reportable Legal Entities | Parent | ||||
Assets | ||||
Trade and other accounts receivable, less allowance for doubtful accounts | 16 | |||
Other current assets | 14,816 | 2,308 | ||
Deferred income tax assets | 50 | |||
Property and equipment, net | 15 | 2 | ||
Investment in subsidiaries | 870,907 | 663,045 | ||
Other assets | 1,515 | 1,384 | ||
Total assets | 887,319 | 666,739 | ||
Liabilities and Stockholders' (Deficit) Equity | ||||
Accounts payable | 116 | |||
Due to affiliates | 1,162,045 | 962,264 | ||
Accrued liabilities | 1,324 | 771 | ||
Income taxes payable | 1,525 | |||
Total liabilities | 1,163,485 | 964,560 | ||
Total stockholders' (deficit) equity | (276,166) | (297,821) | ||
Total liabilities and stockholders' deficit | 887,319 | 666,739 | ||
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc. | ||||
Assets | ||||
Cash and cash equivalents | 28,372 | 46,003 | 27,000 | |
Other current assets | 30 | 27 | ||
Deferred income tax assets | 11 | |||
Investment in subsidiaries | 3,395,436 | 3,099,141 | ||
Other assets | 2,158 | 2,894 | ||
Total assets | 3,425,996 | 3,148,076 | ||
Liabilities and Stockholders' (Deficit) Equity | ||||
Accounts payable | 1 | |||
Due to affiliates | 736,373 | 658,106 | ||
Accrued liabilities | 35,320 | 40,768 | ||
Income taxes payable | 1,508 | 1,337 | ||
Long-term debt | 1,781,887 | 1,784,724 | ||
Deferred income tax liabilities | 96 | |||
Total liabilities | 2,555,089 | 2,485,031 | ||
Total stockholders' (deficit) equity | 870,907 | 663,045 | ||
Total liabilities and stockholders' deficit | 3,425,996 | 3,148,076 | ||
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 22,368 | 58,851 | 40,042 | 16,337 |
Trade and other accounts receivable, less allowance for doubtful accounts | 55,989 | 60,744 | ||
Due from affiliates | 1,966,505 | 1,687,325 | ||
Inventory | 709,523 | 687,884 | ||
Other current assets | 23,864 | 17,803 | ||
Deferred income tax assets | 35,740 | 30,565 | ||
Property and equipment, net | 239,791 | 195,271 | ||
Investment in subsidiaries | 359,193 | 360,416 | ||
Goodwill and other intangible assets, net | 479,682 | 468,342 | ||
Other assets | (8,090) | (6,949) | ||
Total assets | 3,884,565 | 3,560,252 | ||
Liabilities and Stockholders' (Deficit) Equity | ||||
Accounts payable | 215,552 | 217,964 | ||
Due to affiliates | 35 | |||
Accrued liabilities | 145,661 | 136,688 | ||
Long-term debt | 17 | 109 | ||
Other liabilities | 17,852 | 24,686 | ||
Deferred income tax liabilities | 110,047 | 81,629 | ||
Total liabilities | 489,129 | 461,111 | ||
Total stockholders' (deficit) equity | 3,395,436 | 3,099,141 | ||
Total liabilities and stockholders' deficit | 3,884,565 | 3,560,252 | ||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 35,882 | 35,184 | $ 39,533 | $ 30,778 |
Trade and other accounts receivable, less allowance for doubtful accounts | 27,978 | 30,348 | ||
Due from affiliates | 35 | |||
Inventory | 197,814 | 197,330 | ||
Other current assets | 16,151 | 16,911 | ||
Deferred income tax assets | 4,234 | 3,133 | ||
Property and equipment, net | 79,752 | 75,574 | ||
Goodwill and other intangible assets, net | 145,995 | 154,875 | ||
Other assets | 18,418 | 15,856 | ||
Total assets | 526,224 | 529,246 | ||
Liabilities and Stockholders' (Deficit) Equity | ||||
Accounts payable | 55,707 | 57,953 | ||
Due to affiliates | 68,087 | 66,955 | ||
Accrued liabilities | 32,279 | 30,490 | ||
Income taxes payable | 481 | 3,448 | ||
Long-term debt | 2,106 | 2,761 | ||
Other liabilities | 3,762 | 3,048 | ||
Deferred income tax liabilities | 4,609 | 4,175 | ||
Total liabilities | 167,031 | 168,830 | ||
Total stockholders' (deficit) equity | 359,193 | 360,416 | ||
Total liabilities and stockholders' deficit | 526,224 | 529,246 | ||
Consolidating Eliminations | ||||
Assets | ||||
Due from affiliates | (1,966,505) | (1,687,360) | ||
Investment in subsidiaries | (4,625,536) | (4,122,602) | ||
Total assets | (6,592,041) | (5,809,962) | ||
Liabilities and Stockholders' (Deficit) Equity | ||||
Due to affiliates | (1,966,505) | (1,687,360) | ||
Total liabilities | (1,966,505) | (1,687,360) | ||
Total stockholders' (deficit) equity | (4,625,536) | (4,122,602) | ||
Total liabilities and stockholders' deficit | $ (6,592,041) | $ (5,809,962) |
Parent, Issuers, Guarantor an84
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Statement of Earnings and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidating Statement of Earnings and Comprehensive Income | |||||||||||
Net sales | $ 976,358 | $ 998,161 | $ 980,067 | $ 998,032 | $ 964,230 | $ 967,890 | $ 937,755 | $ 964,468 | $ 3,952,618 | $ 3,834,343 | $ 3,753,498 |
Cost of products sold and distribution expenses | 1,988,678 | 1,936,492 | 1,893,326 | ||||||||
Gross profit | 483,441 | 498,976 | 487,474 | 494,049 | 475,311 | 481,319 | 467,452 | 473,769 | 1,963,940 | 1,897,851 | 1,860,172 |
Selling, general and administrative expenses | 1,365,986 | 1,313,134 | 1,273,513 | ||||||||
Depreciation and amortization | 99,657 | 89,391 | 79,663 | ||||||||
Operating earnings | 498,297 | 495,326 | 506,996 | ||||||||
Interest expense | 144,237 | 116,842 | 116,317 | ||||||||
Earnings before provision for income taxes | 354,060 | 378,484 | 390,679 | ||||||||
Provision (benefit) for income taxes | 131,118 | 143,397 | 144,686 | ||||||||
Net earnings | $ 52,621 | $ 67,919 | $ 60,159 | $ 42,243 | $ 56,180 | $ 62,463 | $ 61,535 | $ 54,909 | 222,942 | 235,087 | 245,993 |
Other comprehensive income (loss), net of tax | (22,346) | (49,157) | (18,730) | ||||||||
Total comprehensive income | 200,596 | 185,930 | 227,263 | ||||||||
Reportable Legal Entities | Parent | |||||||||||
Condensed Consolidating Statement of Earnings and Comprehensive Income | |||||||||||
Selling, general and administrative expenses | 11,902 | 9,473 | 10,396 | ||||||||
Depreciation and amortization | 3 | 1 | 1 | ||||||||
Operating earnings | (11,905) | (9,474) | (10,397) | ||||||||
Earnings before provision for income taxes | (11,905) | (9,474) | (10,397) | ||||||||
Provision (benefit) for income taxes | (4,638) | (3,679) | (4,037) | ||||||||
Equity in earnings of subsidiaries, net of tax | 230,209 | 240,882 | 252,353 | ||||||||
Net earnings | 222,942 | 235,087 | 245,993 | ||||||||
Total comprehensive income | 222,942 | 235,087 | 245,993 | ||||||||
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc. | |||||||||||
Condensed Consolidating Statement of Earnings and Comprehensive Income | |||||||||||
Selling, general and administrative expenses | 364 | 475 | 474 | ||||||||
Operating earnings | (364) | (475) | (474) | ||||||||
Interest expense | 144,229 | 116,753 | 116,063 | ||||||||
Earnings before provision for income taxes | (144,593) | (117,228) | (116,537) | ||||||||
Provision (benefit) for income taxes | (56,161) | (45,532) | (45,264) | ||||||||
Equity in earnings of subsidiaries, net of tax | 318,641 | 312,578 | 323,626 | ||||||||
Net earnings | 230,209 | 240,882 | 252,353 | ||||||||
Total comprehensive income | 230,209 | 240,882 | 252,353 | ||||||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||
Condensed Consolidating Statement of Earnings and Comprehensive Income | |||||||||||
Net sales | 3,219,812 | 3,102,406 | 2,986,026 | ||||||||
Related party sales | 2,666 | 2,733 | 2,854 | ||||||||
Cost of products sold and distribution expenses | 1,595,187 | 1,545,873 | 1,486,048 | ||||||||
Gross profit | 1,627,291 | 1,559,266 | 1,502,832 | ||||||||
Selling, general and administrative expenses | 1,074,821 | 1,012,810 | 969,026 | ||||||||
Depreciation and amortization | 76,250 | 66,093 | 56,682 | ||||||||
Operating earnings | 476,220 | 480,363 | 477,124 | ||||||||
Interest expense | (6) | 2 | 13 | ||||||||
Earnings before provision for income taxes | 476,226 | 480,361 | 477,111 | ||||||||
Provision (benefit) for income taxes | 181,932 | 185,388 | 181,741 | ||||||||
Equity in earnings of subsidiaries, net of tax | 24,347 | 17,605 | 28,256 | ||||||||
Net earnings | 318,641 | 312,578 | 323,626 | ||||||||
Total comprehensive income | 318,641 | 312,578 | 323,626 | ||||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||
Condensed Consolidating Statement of Earnings and Comprehensive Income | |||||||||||
Net sales | 732,806 | 731,937 | 767,472 | ||||||||
Cost of products sold and distribution expenses | 396,157 | 393,352 | 410,132 | ||||||||
Gross profit | 336,649 | 338,585 | 357,340 | ||||||||
Selling, general and administrative expenses | 278,899 | 290,376 | 293,617 | ||||||||
Depreciation and amortization | 23,404 | 23,297 | 22,980 | ||||||||
Operating earnings | 34,346 | 24,912 | 40,743 | ||||||||
Interest expense | 14 | 87 | 241 | ||||||||
Earnings before provision for income taxes | 34,332 | 24,825 | 40,502 | ||||||||
Provision (benefit) for income taxes | 9,985 | 7,220 | 12,246 | ||||||||
Net earnings | 24,347 | 17,605 | 28,256 | ||||||||
Other comprehensive income (loss), net of tax | (22,346) | (49,157) | (18,730) | ||||||||
Total comprehensive income | 2,001 | (31,552) | 9,526 | ||||||||
Consolidating Eliminations | |||||||||||
Condensed Consolidating Statement of Earnings and Comprehensive Income | |||||||||||
Related party sales | (2,666) | (2,733) | (2,854) | ||||||||
Cost of products sold and distribution expenses | (2,666) | (2,733) | (2,854) | ||||||||
Equity in earnings of subsidiaries, net of tax | (573,197) | (571,065) | (604,235) | ||||||||
Net earnings | (573,197) | (571,065) | (604,235) | ||||||||
Total comprehensive income | $ (573,197) | $ (571,065) | $ (604,235) |
Parent, Issuers, Guarantor an85
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidating Statement of Cash Flows | |||
Net cash provided by operating activities | $ 351,005 | $ 300,787 | $ 315,972 |
Cash Flows from Investing Activities: | |||
Capital expenditures, net of proceeds from sale of property and equipment | (148,689) | (106,350) | (76,556) |
Acquisitions, net of cash acquired | (26,141) | (6,468) | (5,198) |
Net cash used by investing activities | (174,830) | (112,818) | (81,754) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 912,000 | 983 | 356,247 |
Repayments of long-term debt | (938,537) | (1,814) | (234,103) |
Repurchases of common stock | (207,312) | (227,559) | (333,291) |
Debt issuance costs | (12,748) | (3,896) | |
Proceeds from exercises of stock options | 16,220 | 54,351 | 26,663 |
Excess tax benefit from share-based compensation | 1,347 | 22,084 | 14,646 |
Net cash used by financing activities | (229,030) | (151,955) | (173,734) |
Effect of foreign exchange rate changes on cash and cash equivalents | (561) | (2,551) | (1,024) |
Net increase (decrease) in cash and cash equivalents | (53,416) | 33,463 | 59,460 |
Cash and cash equivalents, beginning of year | 140,038 | 106,575 | 47,115 |
Cash and cash equivalents, end of year | 86,622 | 140,038 | 106,575 |
Reportable Legal Entities | Parent | |||
Condensed Consolidating Statement of Cash Flows | |||
Net cash provided by operating activities | 189,761 | 151,126 | 291,982 |
Cash Flows from Investing Activities: | |||
Capital expenditures, net of proceeds from sale of property and equipment | (16) | (2) | |
Net cash used by investing activities | (16) | (2) | |
Cash Flows from Financing Activities: | |||
Repurchases of common stock | (207,312) | (227,559) | (333,291) |
Proceeds from exercises of stock options | 16,220 | 54,351 | 26,663 |
Excess tax benefit from share-based compensation | 1,347 | 22,084 | 14,646 |
Net cash used by financing activities | (189,745) | (151,124) | (291,982) |
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc. | |||
Condensed Consolidating Statement of Cash Flows | |||
Net cash provided by operating activities | 20,902 | 19,003 | (93,104) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 912,000 | 356,000 | |
Repayments of long-term debt | (937,785) | (232,000) | |
Debt issuance costs | (12,748) | (3,896) | |
Net cash used by financing activities | (38,533) | 120,104 | |
Net increase (decrease) in cash and cash equivalents | (17,631) | 19,003 | 27,000 |
Cash and cash equivalents, beginning of year | 46,003 | 27,000 | |
Cash and cash equivalents, end of year | 28,372 | 46,003 | 27,000 |
Reportable Legal Entities | Guarantor Subsidiaries | |||
Condensed Consolidating Statement of Cash Flows | |||
Net cash provided by operating activities | 107,289 | 104,239 | 78,699 |
Cash Flows from Investing Activities: | |||
Capital expenditures, net of proceeds from sale of property and equipment | (117,539) | (79,541) | (50,315) |
Acquisitions, net of cash acquired | (26,141) | (5,731) | (4,765) |
Net cash used by investing activities | (143,680) | (85,272) | (55,080) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 14 | 247 | |
Repayments of long-term debt | (92) | (172) | (161) |
Net cash used by financing activities | (92) | (158) | 86 |
Net increase (decrease) in cash and cash equivalents | (36,483) | 18,809 | 23,705 |
Cash and cash equivalents, beginning of year | 58,851 | 40,042 | 16,337 |
Cash and cash equivalents, end of year | 22,368 | 58,851 | 40,042 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||
Condensed Consolidating Statement of Cash Flows | |||
Net cash provided by operating activities | 33,053 | 26,419 | 38,395 |
Cash Flows from Investing Activities: | |||
Capital expenditures, net of proceeds from sale of property and equipment | (31,134) | (26,807) | (26,241) |
Acquisitions, net of cash acquired | (737) | (433) | |
Net cash used by investing activities | (31,134) | (27,544) | (26,674) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 969 | ||
Repayments of long-term debt | (660) | (1,642) | (1,942) |
Net cash used by financing activities | (660) | (673) | (1,942) |
Effect of foreign exchange rate changes on cash and cash equivalents | (561) | (2,551) | (1,024) |
Net increase (decrease) in cash and cash equivalents | 698 | (4,349) | 8,755 |
Cash and cash equivalents, beginning of year | 35,184 | 39,533 | 30,778 |
Cash and cash equivalents, end of year | $ 35,882 | $ 35,184 | $ 39,533 |
Quarterly Financial Data (Una86
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net sales | $ 976,358 | $ 998,161 | $ 980,067 | $ 998,032 | $ 964,230 | $ 967,890 | $ 937,755 | $ 964,468 | $ 3,952,618 | $ 3,834,343 | $ 3,753,498 |
Gross profit | 483,441 | 498,976 | 487,474 | 494,049 | 475,311 | 481,319 | 467,452 | 473,769 | 1,963,940 | 1,897,851 | 1,860,172 |
Net earnings | $ 52,621 | $ 67,919 | $ 60,159 | $ 42,243 | $ 56,180 | $ 62,463 | $ 61,535 | $ 54,909 | $ 222,942 | $ 235,087 | $ 245,993 |
Earnings per common share | |||||||||||
Basic (in dollars per share) | $ 0.36 | $ 0.47 | $ 0.41 | $ 0.28 | $ 0.36 | $ 0.40 | $ 0.39 | $ 0.35 | $ 1.51 | $ 1.50 | $ 1.54 |
Diluted (in dollars per share) | $ 0.36 | $ 0.46 | $ 0.41 | $ 0.28 | $ 0.36 | $ 0.39 | $ 0.39 | $ 0.35 | $ 1.50 | $ 1.49 | $ 1.51 |