Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Nov. 09, 2018 | Mar. 31, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Sally Beauty Holdings, Inc. | ||
Entity Central Index Key | 1,368,458 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2018 | ||
Trading Symbol | SBH | ||
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 Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 2,017,069,000 | ||
Entity Common Stock, Shares Outstanding | 120,144,658 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 77,295 | $ 63,759 |
Trade accounts receivable, net | 48,417 | 46,986 |
Accounts receivable, other | 42,073 | 45,255 |
Inventory | 944,338 | 930,855 |
Other current assets | 42,960 | 55,223 |
Total current assets | 1,155,083 | 1,142,078 |
Property and equipment, net | 308,357 | 313,717 |
Goodwill | 535,925 | 537,791 |
Intangible assets, excluding goodwill, net | 72,698 | 80,305 |
Other assets | 25,351 | 25,116 |
Total assets | 2,097,414 | 2,099,007 |
Current liabilities: | ||
Current maturities of long-term debt | 5,501 | 96,082 |
Accounts payable | 303,241 | 307,752 |
Accrued liabilities | 180,287 | 166,527 |
Income taxes payable | 2,144 | 2,233 |
Total current liabilities | 491,173 | 572,594 |
Long-term debt | 1,768,808 | 1,771,853 |
Other liabilities | 30,022 | 20,140 |
Deferred income tax liabilities, net | 75,967 | 98,036 |
Total liabilities | 2,365,970 | 2,462,623 |
Stockholders’ deficit: | ||
Common stock, $0.01 par value. Authorized 500,000 shares; 120,145 and 129,710 shares issued and 119,926 and 129,585 shares outstanding at September 30, 2018 and 2017, respectively | 1,199 | 1,296 |
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued | ||
Accumulated deficit | (179,764) | (283,076) |
Accumulated other comprehensive loss, net of tax | (89,991) | (81,836) |
Total stockholders’ deficit | (268,556) | (363,616) |
Total liabilities and stockholders’ (deficit) equity | $ 2,097,414 | $ 2,099,007 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Sep. 30, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 500,000,000 | 500,000,000 |
Common stock, shares issued | 120,145,000 | 129,710,000 |
Common stock, shares outstanding | 119,926,000 | 129,585,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | |||
Net sales | $ 3,932,565 | $ 3,938,317 | $ 3,952,618 |
Cost of goods sold | 1,988,152 | 1,973,422 | 1,988,678 |
Gross profit | 1,944,413 | 1,964,895 | 1,963,940 |
Selling, general and administrative expenses | 1,484,209 | 1,463,619 | 1,465,643 |
Restructuring charges | 33,615 | 22,679 | |
Operating earnings | 426,589 | 478,597 | 498,297 |
Interest expense | 98,162 | 132,899 | 144,237 |
Earnings before provision for income taxes | 328,427 | 345,698 | 354,060 |
Provision for income taxes | 70,380 | 130,622 | 131,118 |
Net earnings | $ 258,047 | $ 215,076 | $ 222,942 |
Earnings per share: | |||
Basic | $ 2.09 | $ 1.56 | $ 1.51 |
Diluted | $ 2.08 | $ 1.56 | $ 1.50 |
Weighted average shares: | |||
Basic | 123,190 | 137,533 | 147,179 |
Diluted | 123,832 | 138,176 | 148,803 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net earnings | $ 258,047 | $ 215,076 | $ 222,942 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments, net of tax | (10,604) | 19,299 | (22,346) |
Interest rate caps: | |||
Changes in fair value | 3,189 | (1,772) | |
Income taxes related to changes in fair value | (740) | 688 | |
Other comprehensive income (loss), net of tax | (8,155) | 18,215 | (22,346) |
Total comprehensive income | $ 249,892 | $ 233,291 | $ 200,596 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities: | |||
Net earnings | $ 258,047 | $ 215,076 | $ 222,942 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 108,829 | 112,323 | 99,657 |
Share-based compensation expense | 10,519 | 10,507 | 12,580 |
Amortization of deferred financing costs | 3,832 | 3,264 | 3,255 |
Net loss on disposal and impairment of assets | 181 | 8,464 | 495 |
Net loss on extinguishment of debt | 876 | 27,981 | 33,296 |
Deferred income taxes | (20,538) | 14,122 | 21,460 |
Changes in (exclusive of effects of acquisitions): | |||
Trade accounts receivable | (1,949) | 702 | 936 |
Accounts receivable, other | 2,743 | (7,520) | 4,697 |
Inventory | (16,450) | (16,343) | (31,397) |
Other current assets | 12,164 | 1,480 | (17,194) |
Other assets | 48 | (6,700) | (1,964) |
Accounts payable and accrued liabilities | 4,592 | (18,779) | 15,381 |
Income taxes payable | (221) | 323 | (4,331) |
Other liabilities | 9,988 | (1,614) | (5,701) |
Net cash provided by operating activities | 372,661 | 343,286 | 354,112 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment | (86,507) | (89,666) | (151,220) |
Proceeds from sales of property and equipment | 369 | 41 | 2,531 |
Acquisitions, net of cash acquired | (9,175) | (26,141) | |
Net cash used by investing activities | (95,313) | (89,625) | (174,830) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 461,819 | 1,277,250 | 912,000 |
Repayments of long-term debt | (558,599) | (1,216,643) | (938,537) |
Debt issuance costs | (1,151) | (8,376) | (12,748) |
Payments for common stock repurchased | (166,701) | (346,873) | (209,072) |
Proceeds from exercises of stock options | 1,350 | 17,339 | 16,220 |
Net cash used by financing activities | (263,282) | (277,303) | (232,137) |
Effect of foreign exchange rate changes on cash and cash equivalents | (530) | 779 | (561) |
Net increase (decrease) in cash and cash equivalents | 13,536 | (22,863) | (53,416) |
Cash and cash equivalents, beginning of period | 63,759 | 86,622 | 140,038 |
Cash and cash equivalents, end of period | 77,295 | 63,759 | 86,622 |
Supplemental Cash Flow Information: | |||
Interest paid | 90,077 | 141,883 | 138,956 |
Income taxes paid | 70,253 | 114,553 | 123,738 |
Capital expenditures incurred but not paid | $ 15,315 | $ 8,367 | $ 3,757 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Loss |
Balance at Sep. 30, 2015 | $ (297,821) | $ 1,515 | $ (218,670) | $ (2,961) | $ (77,705) | |
Balance (in shares) at Sep. 30, 2015 | 151,452 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 222,942 | 222,942 | ||||
Other comprehensive income (loss), net of tax | (22,346) | (22,346) | ||||
Repurchases and cancellations of common stock | (207,312) | $ (79) | $ (28,361) | (181,833) | $ 2,961 | |
Repurchase and cancellations of common stock (in shares) | (7,950) | |||||
Share-based compensation | 12,580 | $ 1 | 12,579 | |||
Share-based compensation (in shares) | 131 | |||||
Stock issued for stock options | 15,791 | $ 9 | 15,782 | |||
Stock issued for stock options (in shares) | 938 | |||||
Balance at Sep. 30, 2016 | (276,166) | $ 1,446 | (177,561) | (100,051) | ||
Balance (in shares) at Sep. 30, 2016 | 144,571 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | 215,076 | 215,076 | ||||
Other comprehensive income (loss), net of tax | 18,215 | 18,215 | ||||
Repurchases and cancellations of common stock | (346,051) | $ (161) | (25,299) | (320,591) | ||
Repurchase and cancellations of common stock (in shares) | (16,072) | |||||
Share-based compensation | 10,507 | $ 1 | 10,506 | |||
Share-based compensation (in shares) | 122 | |||||
Stock issued for stock options | 14,803 | $ 10 | 14,793 | |||
Stock issued for stock options (in shares) | 964 | |||||
Balance at Sep. 30, 2017 | $ (363,616) | $ 1,296 | (283,076) | (81,836) | ||
Balance (in shares) at Sep. 30, 2017 | 129,585 | 129,585 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net earnings | $ 258,047 | 258,047 | ||||
Other comprehensive income (loss), net of tax | (8,155) | (8,155) | ||||
Repurchases and cancellations of common stock | (166,701) | $ (100) | (11,866) | (154,735) | ||
Repurchase and cancellations of common stock (in shares) | (9,987) | |||||
Share-based compensation | 10,519 | $ 2 | 10,517 | |||
Share-based compensation (in shares) | 178 | |||||
Stock issued for stock options | 1,350 | $ 1 | $ 1,349 | |||
Stock issued for stock options (in shares) | 150 | |||||
Balance at Sep. 30, 2018 | $ (268,556) | $ 1,199 | $ (179,764) | $ (89,991) | ||
Balance (in shares) at Sep. 30, 2018 | 119,926 | 119,926 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. The consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements included herein have been prepared on a going concern basis of accounting. Each quarter, management evaluates, based on relevant conditions and events, our ability to continue as a going concern for at least one year after the financial statements are issued. Based on management’s assessment, we have concluded that substantial doubt does not exist about our ability to continue as a going concern of the date the consolidated financial statements were issued. Certain segment amounts for prior fiscal years have been reclassified to conform to the current fiscal year’s presentation, in connection with the retroactive adoption of two new accounting pronouncements in the current fiscal year. See Note 3 below for additional information. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. 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 our consolidated financial statements. Use of Estimates In accordance with GAAP, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent liabilities in the consolidated financial statements. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. Cash and Cash Equivalents Cash equivalents generally represent highly liquid investments purchased 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 third-party online payment systems transactions, which generally settle within one to three days, and were $26.0 million and $20.5 million at September 30, 2018 and 2017, respectively. Trade Accounts Receivable and Accounts Receivable, Other Trade accounts receivable are recorded at the values invoiced to customers and are stated net of the allowance for doubtful accounts. The allowance for doubtful accounts requires us to estimate the future collectability of amounts receivable at the balance sheet date. We record allowances for doubtful accounts on the basis of our 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 our consolidated statements of earnings, bad debt expense is included in selling, general and administrative expenses. The allowance for doubtful accounts was $1.8 million and $1.0 million at September 30, 2018 and 2017, respectively. Other accounts receivable consist primarily of amounts earned from vendors under various contractual agreements and are recorded at the amounts that we estimate will be collected. Inventory and Cost of Goods Sold 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 our 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 assessing the net realizable value of inventory, we consider several factors including estimates of future demand for our products, historical turn-over rates, the age and sales history of the inventory, and historic and anticipated changes in stock keeping units. Physical inventory counts are performed at substantially all stores and significant distribution centers at least annually. Upon completion of physical inventory counts, our consolidated financial statements are adjusted to reflect actual quantities on hand. Between physical counts, we estimate inventory shrinkage based on our historical experience. We have policies and processes in place that are intended to minimize inventory shrinkage. Cost of goods sold include actual product costs, the cost of transportation to our distribution centers, operating cost associated with our distribution centers (including employee compensation expense, depreciation and amortization, rent and other occupancy-related expenses), vendor rebates and allowances, inventory shrinkage and certain shipping and handling costs, such as freight from the distribution centers to the stores. All other shipping and handling costs are included in selling, general and administrative expenses when incurred. We deem cash consideration received from a supplier to be a reduction of the cost of goods sold, unless it is in exchange for an asset or service or a reimbursement of a specific, incremental, identifiable cost incurred by us in selling the vendor’s products. The majority of cash consideration we receive is considered to be a reduction of inventory and a subsequent reduction in cost of goods sold as the related products are sold. Lease Accounting The majority of our lease agreements are for company-operated stores, warehouse/distribution facilities and office space and are accounted for as operating leases. Rent expense (including any rent abatements or escalation charges) is recognized on a straight-line basis from the date we take possession of the property to begin preparation of the site for occupancy to the end of the lease term, including renewal options that are considered reasonably assured. Certain lease agreements to which we are a party provide for contingent rents that are determined as a percentage of revenues in excess of specified levels. We record a contingent rent liability, along with the corresponding rent expense, when the specified levels of revenue have been achieved or when we determine that achieving the specified levels of revenue during the fiscal year is probable. Certain lease agreements to which we are a party provide for tenant improvement allowances. Tenant improvement 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 that are determined 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 the 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. 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 . G goodwill and intangible assets with indefinite lives for potential impairment, we consider 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, compare the carrying amount of the asset to its fair value. Based on our assessments, after taking into account potential triggering events, there was no material impairment of goodwill or intangible assets with indefinite lives recognized in our consolidated financial statements in the current or prior fiscal years presented. Based on our quantitative test of goodwill, each of our reporting units passed by a significant margin in the periods presented. Self-Insurance Programs We retain a substantial portion of the risk related to certain of our workers’ compensation, general and auto liability, and property damage insurable loss exposure. Predetermined loss limits have been arranged with insurance companies to limit our 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”). We maintain an annual stop-loss insurance policy for the healthcare plan. We record 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. We estimate the ultimate cost based on an analysis of our historical data and actuarial estimates. These estimates are reviewed on a regular basis to ensure that the recorded liability is adequate. The long-term portions of these liabilities are recorded at their present value. Revenue Recognition We measure revenue in connection with each sale of goods and services to a customer based on the consideration we expect to earn in exchange for each of those goods and services and we recognize revenue when we satisfy each performance obligation by transferring the promised goods and services to the customer. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and are excluded from revenue. Sales returns are estimated based on historical return rates. 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 $83.4 million, $82.0 million and $93.0 million for the fiscal years 2018, 2017 and 2016, respectively, and are included in selling, general and administrative expenses in our consolidated statements of earnings. Share-based Compensation We measure the cost of services received from our employees and directors in exchange for an award of equity instruments based on the fair value of the award on the date of grant. Service-based stock option awards are valued using the Black-Scholes option pricing model to estimate the fair value of each stock option award on the date of grant. Performance-based restricted stock units (“performance units”), and service-based restricted stock awards (“RSA” or “RSAs”) and restricted stock units (“RSU” or “RSUs”) are valued using the closing market price of our common stock on the date of grant. Stock options have a maximum term of ten years. The fair value of the service-based awards is expensed on a straight-line basis over the vesting period (generally three to four years for stock options, three to four years for RSAs and one year for RSUs) or, for stock options and RSAs, to the date a participant becomes eligible for retirement, if earlier. The fair value of the performance units are expensed over the requisite performance period (generally three years). For performance units, the number of shares, if any, which will be issued, is contingent upon both (a) employee service conditions and (b) our level of achievement with respect to specified performance targets. Periodic expense for performance unit awards, which is estimated quarterly, is based on our projected performance during the performance period compared to the performance targets contained in the award. As such, we estimate and recognize compensation expense for each award based on the percentage of the performance targets that we deem probable of achievement. Our assessment of the compensation expense, if any, to be ultimately recognized in connection with performance unit awards is based on currently available information. Depreciation and Amortization Depreciation of property and equipment is calculated using the straight-line method based on the estimated useful lives of the respective classes of assets. Building 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 considered reasonably assured. Furniture, fixtures and equipment are depreciated over periods ranging from two to ten years. Expenditures for maintenance and repairs are included in selling, general and administrative expenses when incurred, while expenditures for major renewals and improvements are capitalized. Our intangible assets subject to amortization include customer relationships, certain distribution rights and non-competition agreements, and are amortized, on a straight-line basis, typically between periods of two to 13 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 us. Income Taxes We recognize 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 anticipated to be recovered or settled. The effect on deferred taxes of a change in income 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 consolidated 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 our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our 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 we hold, 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 consolidated financial statements. |
Accounting Changes and Recent A
Accounting Changes and Recent Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes and Recent Accounting Pronouncements | 3. Accounting Changes In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Income Taxes In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue Recognition In February 2016, the FASB issued ASU No. 2016-02, Leases |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements Our financial instruments consist of cash equivalents, trade and other accounts receivable, accounts payable, derivative instruments, including foreign exchange contracts and interest rate caps, 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. We measure on a recurring basis and disclose the fair value of our financial instruments under the provisions of ASC Topic 820, Fair Value Measurement, as amended (“ASC 820”). We define “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. Fair value on recurring basis Consistent with the fair value hierarchy, we categorized our financial assets and liabilities as follows (in thousands): As of September 30, 2018 As of September 30, 2017 Assets Foreign exchange contracts Level 2 $ - $ 779 Interest rate caps Level 2 8,367 5,178 Total assets $ 8,367 $ 5,957 Liabilities Foreign exchange contracts Level 2 $ - $ 207 Other fair value disclosures The fair value for foreign exchange contracts and interest rate caps were measured using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market foreign currency exchange rates and market interest rates. As of September 30, 2018 As of September 30, 2017 Carrying Value Fair Value Carrying Value Fair Value Long-term debt Senior notes Level 1 950,000 911,490 $ 950,000 $ 973,750 Other long-term debt Level 2 845,383 824,951 941,480 946,180 Total debt $ 1,795,383 $ 1,736,441 $ 1,891,480 $ 1,919,930 The fair value of the senior notes was measured using unadjusted quoted market prices. The fair value of other long-term debt was measured using quoted market prices for similar debt securities in active markets or widely accepted valuation techniques, such as discounted cash flow analyses, using observable inputs, such as market interest rates. |
Accumulated Stockholders' Defic
Accumulated Stockholders' Deficit | 12 Months Ended |
Sep. 30, 2018 | |
Stockholders Equity Note [Abstract] | |
Accumulated Stockholders' Deficit | 5. Accumulated Stockholders’ Deficit In August 2017, we announced that the Board approved a share repurchase program authorizing us to repurchase up to $1.0 billion of our common stock over an approximate four-year period expiring on September 30, 2021 (the “2017 Share Repurchase Program”) and terminated the 2014 Share Repurchase Program. During the fiscal years ended September 30, 2018, 2017 and 2016, we repurchased and subsequently retired approximately 10.0 million shares, 16.1 million shares and 7.8 million shares of our common stock at a cost of approximately $165.9 million, $346.1 million and $207.3 million, respectively, under the 2017 Share Repurchase Program and the 2014 Share Repurchase Program (prior to termination of the 2014 Share Repurchase Program in August 2017). 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 such repurchases, we recorded the excess in accumulated deficit. We funded these share repurchases with cash from operations and borrowings under the ABL facility, as appropriate. The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Caps Total Balance at September 30, 2016 $ (100,051 ) $ - $ (100,051 ) Other comprehensive income (loss) before reclassifications, net of tax 19,299 (1,084 ) 18,215 Balance at September 30, 2017 (80,752 ) (1,084 ) (81,836 ) Other comprehensive income (loss) before reclassifications, net of tax (10,604 ) 2,449 (8,155 ) Balance at September 30, 2018 $ (91,356 ) $ 1,365 $ (89,991 ) |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 6. 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, 2018 2017 2016 Net earnings $ 258,047 $ 215,076 $ 222,942 Weighted average basic shares 123,190 137,533 147,179 Dilutive securities: Stock option and stock award programs 642 643 1,624 Weighted average diluted shares 123,832 138,176 148,803 Earnings per share: Basic $ 2.09 $ 1.56 $ 1.51 Diluted $ 2.08 $ 1.56 $ 1.50 At September 30, 2018, 2017 and 2016, options to purchase approximately 5.2 million, 4.5 million and 1.1 million shares, respectively, of our common stock were outstanding but not included in the computation of diluted earnings per share, because these options were anti-dilutive. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Payments | 7. The following table presents total compensation cost included in selling, general and administrative expenses for all share-based compensation arrangements, and the related income tax benefits recognized in our consolidated statement of earnings (in thousands): Year ended September 30, 2018 2017 2016 Share-based compensation expense $ 10,519 $ 10,507 $ 12,580 Income tax benefit related to share-based compensation expense $ 3,013 $ 3,918 $ 4,816 Performance-Based Awards During the fiscal year ended September 30, 2018, 2017 and 2016 we granted approximately 215 thousand, 146 thousand and 152 thousand performance units (“target units”) with a weighted average fair value per unit at the date of grant of $17.42, $25.53 and $23.45, respectively. Performance units represent our unsecured obligations to issue shares of our common stock. 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 our level of achievement with respect to certain specified cumulative performance targets during the three-year period specified in each award (the “performance period”) and satisfaction of the employee service condition. The following table presents a summary of the activity for our performance unit awards assuming 100% payout: Performance Unit Awards Number of Shares (in Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 197 $ 24.50 1.5 Granted 215 17.42 Vested — — Forfeited (63 ) 20.51 Unvested at September 30, 2018 349 $ 20.88 1.3 The maximum compensation expense to be potentially recognized in connection with all outstanding performance unit awards is approximately $14.6 million, including $2.2 million of cumulative expense recognized on or prior to September 30, 2018. Service-Based Awards Stock Option Awards During the fiscal years ended September 30, 2018, 2017 and 2016, we granted approximately 1.2 million, 1.5 million and 1.5 million stock options, respectively. The following table presents a summary of the activity for our stock option awards: Number of Outstanding Options (in Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Outstanding at September 30, 2017 5,211 $ 24.12 5.6 $ 3,867 Granted 1,220 17.23 Exercised (150 ) 8.98 Forfeited or expired (876 ) 23.80 Outstanding at September 30, 2018 5,405 $ 23.04 5.4 $ 3,161 Exercisable at September 30, 2018 4,309 $ 23.87 4.7 $ 2,203 The following table summarizes additional information about stock options outstanding at September 30, 2018 under our share-based compensation plans: Options Outstanding Options Exercisable Range of Exercise Prices Number of Options Outstanding (in Thousands) Weighted Average Remaining Contractual Term (in Years) Weighted Average Exercise Price Number of Options Exercisable (in Thousands) Weighted Average Exercise Price $5.24 – 19.99 1,556 6.9 $ 16.48 802 $ 15.89 $20.00 – 24.99 1,312 4.9 23.46 1,312 23.46 $25.00 – 31.58 2,537 4.9 26.83 2,195 27.03 Total 5,405 5.4 $ 23.04 4,309 $ 23.87 The weighted average assumptions used in the Black-Scholes model relating to the valuation of our stock options are as follows: Year ended September 30, 2018 2017 2016 Expected life (in years) 5.0 5.0 5.0 Expected volatility for the Company’s common stock 27.4 % 25.3 % 27.2 % Risk-free interest rate 2.1 % 1.3 % 1.5 % Dividend yield 0.0 % 0.0 % 0.0 % The expected life of options awarded represents the period of time that such options are expected to be outstanding and is based on our 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 we do 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 during the fiscal years 2018, 2017 and 2016 was $4.84, $6.37 and $6.32, respectively. The aggregate fair value of stock options that vested during the fiscal years 2018, 2017 and 2016 was $7.7 million, $13.1 million and $16.5 million, respectively. The aggregate intrinsic value of options exercised during the fiscal years 2018, 2017 and 2016 was $1.3 million, $7.7 million and $11.0 million, respectively. The total cash received during the fiscal years 2018, 2017 and 2016 from these option exercises was $1.4 million, $17.3 million and $16.2 million, respectively, and the tax benefit realized for the tax deductions from these option exercises was $0.3 million, $2.9 million and $3.7 million, respectively. At September 30, 2018, approximately $5.0 million of total unrecognized compensation costs related to unvested stock option awards are expected to be recognized over the weighted average period of 1.7 years. RSAs During the fiscal years ended September 30, 2018, 2017 and 2016, we granted approximately 326 thousand, 35 thousand and 40 thousand RSAs with a weighted average fair value per share at the date of grant of $16.98, $23.79 and $25.35, respectively. An RSA is an award of shares of our common stock that 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 four years). RSAs 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 Sally Beauty Holdings, Inc. Amended and Restated 2010 Omnibus Incentive Plan (the “2010 Plan”). The following table presents a summary of the activity for our RSAs: Restricted Stock Awards Number of Shares (in Thousands) Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 125 $ 26.00 1.3 Granted 326 16.98 Vested (172 ) 22.59 Forfeited (60 ) 19.71 Unvested at September 30, 2018 219 $ 16.98 2.1 At September 30, 2018, approximately $3.2 million of total unrecognized compensation costs related to unvested RSAs are expected to be recognized over the weighted average period of 2.1 years. RSUs As of September 30, 2018, we have granted RSU awards only to our non-employee directors. During the fiscal years ended September 30, 2018, 2017 and 2016, we granted approximately 75 thousand, 42 thousand and 28 thousand RSUs with a weighted average fair value per unit at the date of grant of $17.32, $25.09 and $24.10, respectively. RSUs represent our unsecured promise to issue shares of our common stock. Unless forfeited prior to the vesting date, RSUs are converted into shares of our 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 our 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, we may settle the vested deferred stock units with shares of our common stock or in cash. The following table presents a summary of the activity for our RSUs: Restricted Stock Units Number of Shares (in Thousands) Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 - $ - - Granted 75 17.32 Vested (68 ) 17.31 Forfeited (7 ) 17.42 Unvested at September 30, 2018 - $ - - At September 30, 2018, all RSUs previously awarded have vested and there are no unrecognized compensation costs in connection therewith. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 8. Property and Equipment Property and equipment, net consists of the following (in thousands): September 30, 2018 2017 Land $ 11,130 $ 11,196 Buildings and building improvements 64,251 64,191 Leasehold improvements 274,848 259,618 Furniture, fixtures and equipment 569,149 524,773 Total property and equipment, gross 919,378 859,778 Less accumulated depreciation and amortization $ (611,021 ) (546,061 ) Total property and equipment, net $ 308,357 $ 313,717 Depreciation expense for the fiscal years 2018, 2017 and 2016 was $97.2 million, $99.2 million and $86.3 million, respectively, and is included in selling, general and administrative expenses in our consolidated statements of earnings. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 9. The changes in the carrying amounts of goodwill during the fiscal years 2018 and 2017 are as follows (in thousands): SBS BSG Total Balance at September 30, 2016 $ 79,542 $ 453,172 $ 532,714 Foreign currency translation 3,128 1,949 5,077 Balance at September 30, 2017 $ 82,670 $ 455,121 $ 537,791 Acquisitions 329 716 1,045 Foreign currency translation (1,782 ) (1,129 ) (2,911 ) Balance at September 30, 2018 $ 81,217 $ 454,708 $ 535,925 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, 2018 and 2017 (in thousands): September 30, 2018 September 30, 2017 SBS BSG Total SBS BSG Total Intangible assets with indefinite lives: Trade names $ 20,643 $ 23,600 $ 44,243 $ 18,455 $ 26,280 $ 44,735 Intangible assets subject to amortization: Gross carrying amount 30,891 130,288 161,179 28,544 128,576 157,120 Accumulated amortization (24,432 ) (108,292 ) (132,724 ) (20,190 ) (101,360 ) (121,550 ) Net book value 6,459 21,996 28,455 8,354 27,216 35,570 Total intangible assets, excluding goodwill, net $ 27,102 $ 45,596 $ 72,698 $ 26,809 $ 53,496 $ 80,305 Amortization expense totaled $11.7 million, $13.1 million and $13.3 million for the fiscal years ended September 30, 2018, 2017 and 2016, respectively, and is included in selling, general and administrative expenses in our consolidated statements of earnings. See Note 16 for additional information about acquisitions completed in the fiscal year ended September 30, 2018. As of September 30, 2018, future amortization expense related to intangible assets subject to amortization is estimated as follows (in thousands): Fiscal Year: 2019 $ 11,124 2020 8,325 2021 4,674 2022 2,172 2023 1,054 Thereafter 1,106 $ 28,455 The weighted average remaining amortization period for intangible assets subject to amortization is approximately 3.5 years. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Sep. 30, 2018 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | 10. Accrued liabilities consist of the following (in thousands): September 30, 2018 2017 Compensation and benefits $ 61,182 $ 59,838 Interest payable 23,008 19,623 Deferred revenue 18,450 20,588 Loss contingency obligation 14,294 6,359 Rental obligations 12,129 15,283 Insurance reserves 4,816 5,322 Property and other taxes 4,607 4,787 Operating accruals and other 41,801 34,727 Total accrued liabilities $ 180,287 $ 166,527 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Lease Commitments Our leases relate primarily to retail stores and warehousing properties. At September 30, 2018, future minimum payments under non-cancelable operating leases, net of sublease income, are as follows (in thousands): Fiscal Year: 2019 $ 181,851 2020 145,414 2021 111,053 2022 73,908 2023 42,574 Thereafter 46,270 $ 601,070 Certain of our leases require us to pay a portion of real estate taxes, insurance, maintenance and special assessments assessed by the lessor. Also, certain of our leases include renewal options and escalation clauses. Aggregate rental expense for all operating leases amounted to $249.8 million, $242.0 million and $231.0 million for the fiscal years 2018, 2017 and 2016, 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. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. Other Contingencies As previously disclosed, we experienced data security incidents during the fiscal years 2014 and 2015 (together, 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 may have placed at risk certain payment card data for some transactions. The costs that we have incurred to date in connection with the data security incidents include assessments by payment card networks, professional advisory fees and legal fees relating to investigating and remediating the data security incidents. During the fiscal year ended September 30, 2018, we received an assessment from a payment card network in connection with the data security incidents and recognized $7.9 million of expenses. The assessment is based on the network’s claims against the Company’s acquiring banks for costs that it asserts its issuing banks incurred in connection with the data security incidents, including incremental counterfeit fraud losses and non-ordinary course operating expenses, such as card reissuance costs. Our estimated probable loss related to the claims made by payment card networks in connection with the data security incidents is based on currently available information. We dispute the validity of the payment card network’s claims and intend to contest them vigorously. During the fiscal year 2017, we entered into agreement pursuant to which all existing claims and assessments by certain payment card networks were settled. For the fiscal year 2016, we recognized $14.6 million of expenses in connection with these data security incidents. We expect to incur additional costs and expenses related to the data security incidents in the future. These costs and expenses may result from potential additional liabilities to other 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. While we do not anticipate these additional costs and expenses or liabilities would have a material adverse impact on our business, financial condition and operating results, these additional costs and expenses could be significant. We provide healthcare benefits to most of our full-time employees. We are 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 our employees. In addition, we retain a substantial portion of the risk related to certain workers’ compensation, general liability, and automobile and property insurance. We record an estimated liability for the ultimate cost of claims incurred and unpaid as of the balance sheet date. The discounted estimated liability is included in accrued liabilities (current portion) and other liabilities (long-term portion) in our consolidated balance sheets. We carry insurance coverage in such amounts in excess of our self-insured retention that we believe 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. We have no significant liabilities for loss contingencies at September 30, 2018 and 2017, except as disclosed above. |
Short-term Borrowings and Long-
Short-term Borrowings and Long-term Debt | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Short-term Borrowings and Long-term Debt | 12. Details of long-term debt (which is reported at amortized cost) are as follows (dollars in thousands): September 30, 2018 2017 Interest Rates ABL facility $ — $ 90,000 (i) Prime plus (0.25% to 0.50%) or; (ii) LIBOR plus (1.25% to 1.50%) Term loan B: Variable-rate tranche 544,500 550,000 LIBOR plus 2.25% Fixed-rate tranche 300,000 300,000 4.500% Senior notes due Nov. 2023 200,000 200,000 5.500% Senior notes due Dec. 2025 750,000 750,000 5.625% Total $ 1,794,500 $ 1,890,000 Plus: capital lease obligations 883 1,480 Less: unamortized debt issuance costs and premium, net 21,074 23,545 Total debt $ 1,774,309 $ 1,867,935 Less: current maturities 5,501 96,082 Total long-term debt $ 1,768,808 $ 1,771,853 Maturities of our long-term debt, excluding capital leases, are as follows at September 30, 2018 (in thousands): Twelve months ending September 30: 2019 $ 5,500 2020 5,500 2021 5,500 2022 5,500 2023 5,500 Thereafter 1,767,000 Total $ 1,794,500 In July 2017, Sally Holdings and Sally Capital Inc. (collectively, the “Issuers” or “Borrowers”), both indirectly wholly-owned subsidiaries of the Company, the Borrowers entered into a seven-year term loan pursuant to which they borrowed $850 million (the “term loan B”). We used the net proceeds from the term loan B (approximately $845.8 million), as well as existing cash balances and borrowings under the ABL facility in the amount of $33.5 million, to (i) redeem $850.0 million aggregate outstanding principal amount of our senior notes due 2022 at a premium, plus accrued and unpaid interest and (ii) pay fees and expenses incurred in connection with the origination of the term loan B and redemption of the senior notes due 2022. In connection with our redemption of our senior notes due 2022, we recorded a loss on extinguishment of debt in the amount of approximately $27.6 million, including a redemption premium in the amount of approximately $24.4 million and unamortized deferred financing costs of approximately $8.0 million, partially offset by the write-off of unamortized premium of $4.8 million. In connection with the term loan B, we incurred and capitalized financing costs of approximately $6.9 million which are being amortized over the term of the term loan B using the effective interest method. The term loan B consists of a variable-rate tranche in the amount of $550 million which bears interest at LIBOR plus 2.25% or, at the option of the Borrowers, at an alternate base rate plus 1.25%, and a fixed-rate tranche in the amount of $300 million which bears interest at 4.50%. The agreement governing the term loan B contains a customary covenant package substantially consistent with the indentures governing our senior notes. Borrowings under the term loan B are secured by a first-priority lien in and upon substantially all of the assets of the Company and its domestic subsidiaries other than the accounts, inventory (and the proceeds thereof) and other assets that secure the ABL facility on a first priority basis. In addition, the variable-rate tranche contains provisions requiring quarterly repayments of principal in an amount equal to 0.25% of the original amount for the variable-rate tranche. The term loan B matures on July 5, 2024. Interest is payable monthly on the variable-rate tranche and quarterly on the fixed rate tranche. Additionally, in March 2018, the Borrowers entered into an Amendment No. 1 with respect to our term loan B pursuant to which the interest rate spread on the variable-rate tranche was reduced by 25 basis points to LIBOR plus 2.25%. In connection with the amendment, we incurred and capitalized financing costs of approximately $1.0 million. This amount is reported as a deduction from the term loan B and is being amortized over the term of the term loan B using the effective interest method. Additionally, we recorded a loss on extinguishment of debt in the amount of approximately $0.9 million, including cost resulting from certain creditors exiting the loan syndication. Furthermore, in July 2017, we entered into an amended and restated $500 million, five-year asset-based senior secured loan facility (the “ABL facility”). In connection with our modification of the ABL facility, we recorded a loss on extinguishment of debt in the amount of approximately $0.4 million, and incurred and capitalized additional financing costs of approximately $1.5 million. The availability of funds under the ABL facility 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. The terms of the new ABL facility are substantially the same as those of the predecessor ABL facility, except for an extension of the maturity to July 6, 2022, improved pricing, a relaxation of the restrictions on Sally Holdings’ ability to make Restricted Payments, as defined in the ABL facility, and certain other improved terms. 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 0.20% on the unused portion of the facility. 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. At September 30, 2018, we had $481.3 million available for borrowing under the ABL facility, including the Canadian sub-facility. At September 30, 2018 and 2017, unamortized debt issuance costs of $17.2 million and $19.4 million, respectively, related to our senior notes and term loan B, are reported as a deduction from the related long-term debt obligations on our consolidated balance sheets. In addition, unamortized debt issuance costs related to the ABL facility of $1.6 million and $2.0 million, at September 30, 2018 and 2017, respectively, are reported in other assets in our consolidated balance sheets. The senior notes due 2023 and the senior notes due 2025, which we refer to collectively as “the senior notes due 2023 and 2025,” are unsecured obligations of the Issuers and are jointly and severally guaranteed by Sally Beauty Holdings, Inc. and Sally Investment, and by each material domestic subsidiary of the Company. Interest on the senior notes due 2023 and 2025 is payable semi-annually, during the Company’s first and third fiscal quarters. Please see Note 18 for certain condensed financial statement data pertaining to Sally Beauty Holdings, Inc., the Issuers, the guarantor subsidiaries and the non-guarantor subsidiaries. The agreements and instruments governing the debt of Sally Holdings and its subsidiaries contain material limitations on our ability to pay dividends and other restricted payments. The ABL facility and the indentures governing the senior notes due 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, 2018, all the net assets of our consolidated subsidiaries were unrestricted from transfer under our credit arrangements . At September 30, 2018 and 2017, we had no off-balance sheet financing arrangements other than obligations under operating leases and letters of credit (related to inventory purchases and self-insurance programs) in the aggregate amount of $18.7 million and $20.4 million, respectively. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 13. Risk Management Objectives of Using Derivative Instruments From time to time we use foreign exchange contracts (including foreign currency forwards and options), as part of our overall risk management strategy, to fix the amount of certain foreign assets and obligations relative to our functional and reporting currency (the U.S. dollar) or relative to the functional currency of certain of our consolidated subsidiaries, or to add stability to cash flows resulting from our net investments (including intercompany notes not permanently invested) and earnings denominated in foreign currencies. Our foreign currency exposures at times offset each other, sometimes providing a natural hedge against our foreign currency risk. In connection with the remaining foreign currency risk, we use 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. In addition, from time to time we use interest rate derivatives (including interest rate caps and swaps) as part of our overall risk management strategy to add stability to the interest payments due in connection with our debt obligations. At September 30, 2018, our exposure to interest rate fluctuations relates to interest payments under the ABL facility and the variable-rate tranche of the term loan B. In connection with the variable-rate tranche of its term loan B, we use interest rate caps to partially mitigate our exposure to potential significant interest rate increases. As of September 30, 2018, we did not purchase or hold any derivative instruments for trading or speculative purposes. Designated Cash Flow Hedges In July 2017, we purchased two interest rate caps with an initial aggregate notional amount of $550 million (the “interest rate caps”). The interest rate caps are made up of individual caplets that expire monthly through June 30, 2023 and are designated as cash flow hedges. Accordingly, changes in the fair value of the interest rate caps are recorded quarterly, net of income tax, and are included in AOCL. Over the next 12 months, we expect to reclassify approximately $0.2 million in to interest expense, which represents the original value of the expiring caplets. Non-designated Hedges We may use derivative instruments not designated as hedges or that do not meet the requirements for hedge accounting in order to manage our exposure to foreign currency exchange rate or interest rate movements, as appropriate. The changes in the fair value (i.e., marked-to-market adjustments) of these derivative instruments are adjusted quarterly and are recorded in selling, general and administrative expenses in our consolidated statements of earnings. The table below presents the fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets (in thousands): Asset Derivatives Liability Derivatives September 30, September 30, Classification 2018 2017 Classification 2018 2017 Derivatives designated as hedging instruments: Interest rate caps Other assets $ 8,367 $ 5,178 N/A $ — $ — Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets — 779 Accrued liabilities — 207 $ 8,367 $ 5,957 $ — $ 207 The table below presents the effect of our derivative financial instruments on our consolidated statements of earnings and consolidated statements of comprehensive income, as appropriate, for the fiscal years ended September 30, 2018, 2017 and 2016 (in thousands): Amount of Gain or (Loss) Recognized in OCI on Derivative, net of tax Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Derivatives Designated as Hedging Instruments Fiscal year ended September 30, Fiscal year ended September 30, 2018 2017 2016 2018 2017 2016 Interest rate caps $ 2,449 $ (1,084 ) $ — $ — $ — $ — Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives Not Designated as Hedging Instruments Classification of Gain or (Loss) Recognized into Income Fiscal year ended September 30, 2018 2017 2016 Foreign exchange contracts Selling, general and administrative expenses $ 1,566 $ (2,791 ) $ (1,051 ) |
401(k) and Profit Sharing Plan
401(k) and Profit Sharing Plan | 12 Months Ended |
Sep. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
401(k) and Profit Sharing Plan | 14. We sponsor the Sally Beauty 401(k) and Profit Sharing Plan (the “401(k) Plan”), which is a qualified defined contribution plan. The 401(k) Plan covers our U.S.-based employees who meet certain eligibility requirements and who are not members of a collective bargaining unit. Under the terms of the 401(k) Plan, employees may contribute a percentage of their annual compensation up to certain maximums, as defined by the 401(k) Plan and by the U.S. Internal Revenue Code. We currently match a portion of employee contributions to the plan. We recognized expense of $6.5 million, $7.1 million and $7.1 million in the fiscal years ended September 30, 2018, 2017 and 2016, respectively, related to such matching contributions and these amounts are included in selling, general and administrative expenses in our consolidated statements of earnings. In addition, pursuant to the 401(k) Plan, we may elect to make voluntary profit sharing contributions to the accounts of eligible employees as determined by the Compensation Committee of the Board. We recognized expense of $2.6 million in the fiscal years ended September 30, 2016 related to such profit sharing contributions and this amount is included in selling, general and administrative expenses in our consolidated statements of earnings. During the fiscal year ended September 30, 2018 and 2017, we did not make a profit sharing contribution to the 401(k) Plan. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. On December 22, 2017, the U.S. enacted comprehensive amendments to the Internal Revenue Code of 1986 (“U.S. Tax Reform”). Among other things, U.S. Tax Reform (a) reduced the federal statutory tax rate for corporate taxpayers, (b) provided for a deemed repatriation of undistributed foreign earnings by U.S. taxpayers and made other fundamental changes on how foreign earnings will be taxed by the U.S. and (c) otherwise modified corporate tax rules in significant ways. In accordance with ASC Topic No. 740, Income Taxes In December 2017, the SEC provided guidance allowing registrants to record provisional amounts, during a specified measurement period, when the necessary information is not available, prepared or analyzed in reasonable detail to account for the impact of U.S. Tax Reform. Accordingly, we have reported the revaluation of deferred income taxes and the impact of the deemed repatriation on our consolidated financial statements based on provisional amounts. Specifically, in the fiscal year ended September 30, 2018, we recognized a provisional income tax benefit of $37.7 million in connection with the revaluation of our deferred income tax assets and liabilities, including $2.7 million of benefit related to the adoption of income tax method changes, and a provisional income tax charge of $11.7 million for federal and state income taxes, including $10.6 million payable beyond one year, related to accumulated but undistributed earnings of our foreign operations. For the fiscal year ending September 30, 2018, our U.S. federal statutory tax rate is 24.5% and, for fiscal years after that, 21.0%. Among the factors that could affect the accuracy of our provisional amounts is uncertainty about the statutory tax rate applicable to our deferred income tax assets and liabilities, since the actual rate will be dependent on the timing of realization or settlement of such assets and liabilities. At September 30, 2018, we estimated the dates when such realization or settlement would occur. The actual dates when such realization or settlement occurs may be significantly different from our estimates, which could result in the ultimate revaluation of our deferred income taxes to be different from our provisional amounts. In addition, there is uncertainty about the impact of expected U.S. Internal Revenue Service (“IRS”) guidance intended to interpret the most complex provisions of U.S. Tax Reform. Our liability for federal and state income taxes applicable to undistributed earnings of our foreign operations may be materially different from our provisional amount as a result of such future IRS guidance and interpretation and in connection with estimates related to the amount of undistributed foreign earnings and cash balances. Effective for fiscal years beginning after December 31, 2017, U.S. Tax Reform subjects taxpayers to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. In January 2018, FASB Staff provided guidance that an entity can make an accounting policy election to either recognize deferred taxes related to items giving rise to GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. Given the uncertainty about the impact of expected IRS guidance related to the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. We are currently assessing the potential additional impact of U.S. Tax Reform on our business and consolidated financial statements. Additional IRS guidance and interpretation is expected beyond September 30, 2018. As such, we now expect to complete the assessment of potential additional impact during the first quarter of fiscal year 2019. The provision for income taxes for the fiscal years 2018, 2017 and 2016 consists of the following (in thousands): Fiscal Year Ended September 30, 2018 2017 2016 Current: Federal $ 68,608 $ 97,332 $ 87,088 Foreign 11,039 10,394 8,795 State 11,344 8,700 13,816 Total current portion 90,991 116,426 109,699 Deferred: Federal (26,001 ) 14,559 20,915 Foreign 1,868 (2,314 ) (932 ) State 3,522 1,951 1,436 Total deferred portion (20,611 ) 14,196 21,419 Total provision for income taxes $ 70,380 $ 130,622 $ 131,118 The difference between the U.S. statutory federal income tax rate and the effective income tax rate is summarized below: Fiscal Year Ended September 30, 2018 2017 2016 U.S. federal statutory income tax rate 24.5 % 35.0 % 35.0 % State income taxes, net of federal tax benefit 3.2 2.2 2.9 Effect of foreign operations 0.6 0.3 (0.4 ) Deferred tax revaluation, including adoption of income tax method changes (11.5 ) — — Deemed repatriation tax 3.6 — — Other, net 1.0 0.3 (0.5 ) Effective tax rate 21.4 % 37.8 % 37.0 % The tax effects of temporary differences that give rise to our deferred tax assets and liabilities are as follows (in thousands): At September 30, 2018 2017 Deferred tax assets attributable to: Foreign loss carryforwards $ 28,612 $ 41,267 Accrued liabilities 15,676 19,695 Share-based compensation expense 10,762 16,057 U.S. foreign tax credits 8,807 — Unrecognized tax benefits 322 571 Inventory adjustments — 6,602 Other 442 2,214 Total deferred tax assets 64,621 86,406 Valuation allowance (40,906 ) (42,379 ) Total deferred tax assets, net 23,715 44,027 Deferred tax liabilities attributable to: Depreciation and amortization 92,531 133,264 Inventory adjustments 673 — Total deferred tax liabilities 93,204 133,264 Net deferred tax liability $ 69,489 $ 89,237 We believe 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. We have recorded a valuation allowance to account for uncertainties regarding recoverability of certain deferred tax assets, primarily foreign loss carry-forwards. Domestic earnings before provision for income taxes were $300.4 million, $332.5 million and $327.1 million in the fiscal years 2018, 2017 and 2016, respectively. Foreign operations had earnings before provision for income taxes of $28.0 million, $13.2 million and $27.0 million in the fiscal years 2018, 2017 and 2016, 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. We do not expect the outcome of current or future tax audits to have a material adverse effect on our consolidated financial condition, results of operations or cash flow. As of September 30, 2018, no deferred taxes have been provided on the accumulated undistributed earnings of our foreign operations beyond the amounts recorded for deemed repatriation of such earnings, as required by U.S. Tax Reform. An actual repatriation of earnings from our foreign operations could still be subject to additional foreign withholding taxes and U.S. state taxes. Based upon evaluation of our foreign operations, undistributed earnings are intended to remain permanently reinvested to finance anticipated future growth and expansion, and accordingly, deferred taxes have not been provided. If undistributed earnings of our foreign operations were not considered permanently reinvested as of September 30, 2018, an immaterial amount of additional deferred taxes would have been provided. At September 30, 2018 and 2017, we had total operating loss carry-forwards of $103.0 million and $135.6 million, respectively, of which $88.6 million and $117.0 million, respectively, are subject to a valuation allowance. At September 30, 2018, operating loss carry-forwards of $8.0 million expire between 2019 and 2030 and operating loss carry-forwards of $95.0 million have no expiration date. As a result of a tentative agreement with German tax authorities, our German affiliate expects to surrender approximately $21 million of operating loss carry-forwards against which a full valuation allowance is recorded. As such, these operating loss carry-forwards have been written off with a corresponding valuation allowance adjustment, resulting in no net impact to income tax expense. At September 30, 2018 and 2017, we had tax credit carry-forwards of $11.6 million and $2.8 million, respectively, This includes a U.S. foreign tax credit carry-forward of $8.8 million as a result of the deemed repatriation tax under U.S. Tax Reform. This credit expires in 2028. We do not believe the realization of the U.S. foreign tax credit is more likely than not, so a valuation allowance has been recorded against its full value. Of the remaining tax credit carry-forwards, at September 30, 2018, $1.4 million expire between 2024 and 2027, and $1.4 million have no expiration date. Total tax credit carry-forwards of $10.2 million and $1.2 million are subject to a valuation allowance at September 30, 2018 and 2017, respectively. The changes in the amount of unrecognized tax benefits are as follows (in thousands): Fiscal Year Ended September 30, 2018 2017 Balance at beginning of the fiscal year $ 1,467 $ 1,295 Increases related to prior year tax positions — 182 Decreases related to prior year tax positions (3 ) — Increases related to current year tax positions 309 254 Lapse of statute (405 ) (264 ) Balance at end of fiscal year $ 1,368 $ 1,467 If recognized, these positions would affect our effective tax rate. We recognize interest and penalties, accrued in connection with unrecognized tax benefits, in provision for income taxes. Accrued interest and penalties, in the aggregate, were $0.2 million at September 30, 2018 and 2017. 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 our tax returns 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 reasonably 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 its examination of our consolidated federal income tax returns for the fiscal years ended September 30, 2007 through September 30, 2017, and issued its examination reports. In August 2018, we received a Closing Letter from the U.S. competent authority on certain cross-border adjustments related to the fiscal years ended September 30, 2007 through September 30, 2012. Additional administrative steps with the U.S. and Canadian governments are required for ultimate resolution of this matter. However, the initial results indicate there is no material impact on our consolidated financial statements. Our consolidated federal income tax return for the fiscal year ended September 30, 2018 is currently under IRS examination. Pending the resolution of the adjustments discussed in the preceding paragraph, our statute remains open for the fiscal years ended September 30, 2007 through September 30, 2012, and from the fiscal year ended September 30, 2015 forward. Our foreign subsidiaries are impacted by various statutes of limitations, which are generally open from 2013 forward. Generally, states’ statutes in the U.S. are open for tax reviews from 2007 forward. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | 16. In the fiscal year ended September 30, 2018, we acquired certain assets and business operations of H. Chalut, Ltee. (“Chalut”), a distributor of beauty products with 21 stores operating in the province of Quebec, Canada, for approximately $8.8 million. The results of operations of Chalut are included in our consolidated financial statements subsequent to the acquisition date. We recorded intangible assets subject to amortization of $4.7 million and goodwill of $0.7 million, which is expected to be deductible for tax purposes, in connection with this acquisition. In addition, we completed one immaterial acquisition during the fiscal year 2018 for approximately $0.4 million. We did not acquire any business in the fiscal year ended September 30, 2017. In the fiscal year ended September 30, 2016, we 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 our consolidated financial statements subsequent to the acquisition date. We 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 year 2016 at the aggregate cost of approximately $2.3 million and recorded intangible assets subject to amortization of $2.3 million in connection with these acquisitions. We funded these acquisitions 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, 2018 | |
Segment Reporting [Abstract] | |
Business Segments and Geographic Area Information | 17. Our business is organized into two reportable segments: (i) Sally Beauty Supply (“SBS”), a domestic and international chain of retail stores and a consumer-facing e-commerce website that 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) Beauty Systems Group (“BSG”), including its franchise-based business Armstrong McCall, a full service distributor of beauty products and supplies that offers professional beauty products directly to salons and salon professionals through its professional-only stores, e-commerce websites and its own sales force in partially exclusive geographical territories in the U.S. and Canada. The accounting policies of both of our reportable 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, 2018, 2017 and 2016. Business Segments Information Segment data for the fiscal years 2018, 2017 and 2016 are as follows (in thousands): 2018 2017 2016 Net sales: SBS $ 2,333,838 $ 2,345,116 $ 2,386,337 BSG 1,598,727 1,593,201 1,566,281 Total $ 3,932,565 $ 3,938,317 $ 3,952,618 Earnings before provision for income taxes: Segment operating earnings: SBS $ 362,853 $ 385,407 $ 411,824 BSG 240,225 254,691 252,442 Segment operating earnings 603,078 640,098 664,266 Unallocated expenses (a) (142,874 ) (138,822 ) (165,969 ) Restructuring charges (33,615 ) (22,679 ) - Consolidated operating earnings 426,589 478,597 498,297 Interest expense (b) (98,162 ) (132,899 ) (144,237 ) Earnings before provision for income taxes $ 328,427 $ 345,698 $ 354,060 Depreciation and amortization: SBS $ 64,017 $ 63,427 $ 55,833 BSG 29,733 31,755 29,598 Corporate 15,079 17,141 14,226 Total $ 108,829 $ 112,323 $ 99,657 Payments for property and equipment: SBS $ 46,289 $ 52,178 $ 95,706 BSG 16,598 19,335 23,907 Corporate 23,620 18,153 31,607 Total $ 86,507 $ 89,666 $ 151,220 Total assets (as of September 30): SBS $ 995,546 $ 1,025,545 $ 987,187 BSG 993,122 964,984 970,840 Sub-total 1,988,668 1,990,529 1,958,027 Corporate 108,746 108,478 137,011 Total $ 2,097,414 $ 2,099,007 $ 2,095,038 (a) 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 years 2018 and 2016, unallocated expenses includes $7.9 million and $14.6 million related to the data security incidents. (b) For the fiscal years 2018, 2017 and 2016, interest expense includes a loss on extinguishment of debt of $0.9 million, $28.0 million and $33.3 million, respectively Geographic Area Information Certain geographic data is as follows (in thousands): 2018 2017 2016 Net sales (for the fiscal year indicated): United States $ 3,188,993 $ 3,248,662 $ 3,261,648 Other countries 743,572 689,655 690,970 Total $ 3,932,565 $ 3,938,317 $ 3,952,618 Long-lived assets (as of September 30): United States $ 234,475 $ 230,698 $ 240,803 United Kingdom 29,493 32,771 29,764 Other countries 44,389 50,248 48,991 Total $ 308,357 $ 313,717 $ 319,558 Net sales are attributable to individual countries based on the location of the customer. For the fiscal year 2018, net sales outside the U.S. include a net positive impact from changes in foreign currency exchange rates of $33.1 million. For the fiscal years 2017 and 2016, net sales outside the U.S. include a net negative impact from changes in foreign currency exchange rates of $30.0 million and $56.4 million, respectively. |
Parent, Issuers, Guarantor and
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements | 12 Months Ended |
Sep. 30, 2018 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements | 18. The following consolidating financial information presents the condensed consolidating balance sheets as of September 30, 2018 and 2017, 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 three-year period ended September 30, 2018 of: (i) Sally Beauty Holdings, Inc., or the “Parent;” (ii) Sally Holdings and Sally Capital Inc.; (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 since we believe the following information is sufficient, as guarantor subsidiaries are 100% indirectly owned by the Parent and all guarantees are full and unconditional. Condensed Consolidating Balance Sheet September 30, 2018 (In thousands) Parent Sally Holdings and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 Trade and other accounts receivable, net 4 — 53,295 37,191 — 90,490 Due from affiliates — — 2,598,681 — (2,598,681 ) — Inventory — — 714,000 230,338 — 944,338 Other current assets 2,010 111 27,422 13,417 — 42,960 Property and equipment, net 8 — 232,941 75,408 — 308,357 Investment in subsidiaries 1,368,927 4,044,669 380,166 — (5,793,762 ) — Goodwill and other intangible assets, net — — 459,348 149,275 — 608,623 Other assets 1,325 10,242 (4,797 ) 18,581 — 25,351 Total assets $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 38 $ — $ 233,936 $ 69,267 $ — $ 303,241 Due to affiliates 1,629,411 888,141 — 81,129 (2,598,681 ) — Accrued liabilities 234 23,019 125,179 31,855 — 180,287 Income taxes payable 585 1,519 — 40 — 2,144 Long-term debt — 1,773,426 1 882 — 1,774,309 Other liabilities 10,562 — 15,250 4,210 — 30,022 Deferred income tax liabilities, net — — 71,071 4,896 — 75,967 Total liabilities 1,640,830 2,686,105 445,437 192,279 (2,598,681 ) 2,365,970 Total stockholders’ (deficit) equity (268,556 ) 1,368,927 4,044,669 380,166 (5,793,762 ) (268,556 ) Total liabilities and stockholders’ (deficit) equity $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Condensed Consolidating Balance Sheet September 30, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 22,090 $ 41,659 $ — $ 63,759 Trade and other accounts receivable, net 200 — 59,992 32,049 — 92,241 Due from affiliates — — 2,289,371 — (2,289,371 ) — Inventory — — 709,890 220,965 — 930,855 Other current assets 11,763 813 26,144 16,503 — 55,223 Property and equipment, net 12 — 230,069 83,636 — 313,717 Investment in subsidiaries 1,110,891 3,717,999 386,681 — (5,215,571 ) — Goodwill and other intangible assets, net — — 468,118 149,978 — 618,096 Other assets 1,538 8,116 (7,837 ) 23,299 — 25,116 Total assets $ 1,124,404 $ 3,726,938 $ 4,184,518 $ 568,089 $ (7,504,942 ) $ 2,099,007 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 251 $ 4 $ 243,818 $ 63,679 $ — $ 307,752 Due to affiliates 1,487,484 727,856 — 74,031 (2,289,371 ) — Accrued liabilities 285 20,108 113,628 32,506 — 166,527 Income taxes payable — 1,624 — 609 — 2,233 Long-term debt — 1,866,455 1 1,479 — 1,867,935 Other liabilities — — 16,008 4,132 — 20,140 Deferred income tax liabilities, net — — 93,064 4,972 — 98,036 Total liabilities 1,488,020 2,616,047 466,519 181,408 (2,289,371 ) 2,462,623 Total stockholders’ (deficit) equity (363,616 ) 1,110,891 3,717,999 386,681 (5,215,571 ) (363,616 ) Total liabilities and stockholders’ (deficit) equity $ 1,124,404 $ 3,726,938 $ 4,184,518 $ 568,089 $ (7,504,942 ) $ 2,099,007 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,152,120 $ 780,445 $ — $ 3,932,565 Related party sales — — 2,294 — (2,294 ) — Cost of goods sold — — 1,581,385 409,061 (2,294 ) 1,988,152 Gross profit — — 1,573,029 371,384 — 1,944,413 Selling, general and administrative expenses 10,957 1,538 1,136,312 335,402 — 1,484,209 Restructuring charges — — 33,615 — — 33,615 Operating earnings (loss) (10,957 ) (1,538 ) 403,102 35,982 — 426,589 Interest expense (income) — 98,332 (3 ) (167 ) — 98,162 Earnings (loss) before provision for income taxes (10,957 ) (99,870 ) 403,105 36,149 — 328,427 Provision (benefit) for income taxes (2,734 ) (28,787 ) 73,747 28,154 — 70,380 Equity in earnings of subsidiaries, net of tax 266,270 337,353 7,995 — (611,618 ) — Net earnings 258,047 266,270 337,353 7,995 (611,618 ) 258,047 Other comprehensive income (loss), net of tax — 2,449 — (10,604 ) — (8,155 ) Total comprehensive income (loss) $ 258,047 $ 268,719 $ 337,353 $ (2,609 ) $ (611,618 ) $ 249,892 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,209,039 $ 729,278 $ — $ 3,938,317 Related party sales — — 2,501 — (2,501 ) — Cost of goods sold — — 1,590,184 385,739 (2,501 ) 1,973,422 Gross profit — — 1,621,356 343,539 — 1,964,895 Selling, general and administrative expenses 10,939 526 1,130,615 321,539 — 1,463,619 Restructuring charges — — 22,679 — — 22,679 Operating earnings (loss) (10,939 ) (526 ) 468,062 22,000 — 478,597 Interest expense — 132,696 6 197 — 132,899 Earnings (loss) before provision for income taxes (10,939 ) (133,222 ) 468,056 21,803 — 345,698 Provision (benefit) for income taxes (4,246 ) (51,726 ) 177,383 9,211 — 130,622 Equity in earnings of subsidiaries, net of tax 221,769 303,265 12,592 — (537,626 ) — Net earnings 215,076 221,769 303,265 12,592 (537,626 ) 215,076 Other comprehensive income (loss), net of tax — (1,084 ) — 19,299 — 18,215 Total comprehensive income $ 215,076 $ 220,685 $ 303,265 $ 31,891 $ (537,626 ) $ 233,291 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2016 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,219,812 $ 732,806 $ — $ 3,952,618 Related party sales — — 2,666 — (2,666 ) — Cost of goods sold — — 1,595,187 396,157 (2,666 ) 1,988,678 Gross profit — — 1,627,291 336,649 — 1,963,940 Selling, general and administrative expenses 11,905 364 1,151,071 302,303 — 1,465,643 Restructuring charges — — — — — — Operating earnings (loss) (11,905 ) (364 ) 476,220 34,346 — 498,297 Interest expense (income) — 144,229 (6 ) 14 — 144,237 Earnings (loss) before provision for income taxes (11,905 ) (144,593 ) 476,226 34,332 — 354,060 Provision (benefit) for income taxes (4,638 ) (56,161 ) 181,932 9,985 — 131,118 Equity in earnings of subsidiaries, net of tax 230,209 318,641 24,347 — (573,197 ) — Net earnings 222,942 230,209 318,641 24,347 (573,197 ) 222,942 Other comprehensive loss, net of tax — — — (22,346 ) — (22,346 ) Total comprehensive income $ 222,942 $ 230,209 $ 318,641 $ 2,001 $ (573,197 ) $ 200,596 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 23,424 $ (62,948 ) $ 384,958 $ 27,227 $ — $ 372,661 Cash Flows from Investing Activities: Payments for property and equipment, net — — (68,689 ) (17,449 ) — (86,138 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (309,310 ) — 309,310 — Net cash used by investing activities — — (377,999 ) (26,624 ) 309,310 (95,313 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 461,814 5 — — 461,819 Repayments of long-term debt — (558,000 ) (4 ) (595 ) — (558,599 ) Debt issuance costs — (1,151 ) — — — (1,151 ) Payments for common stock repurchased (166,701 ) — — — — (166,701 ) Proceeds from exercises of stock options 1,350 — — — — 1,350 Due to affiliates 141,927 160,285 — 7,098 (309,310 ) — Net cash (used) provided by financing activities (23,424 ) 62,948 1 6,503 (309,310 ) (263,282 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (530 ) — (530 ) Net increase in cash and cash equivalents — — 6,960 6,576 — 13,536 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 4,095 $ (72,779 ) $ 386,604 $ 25,366 $ — $ 343,286 Cash Flows from Investing Activities: Payments for property and equipment, net — — (64,000 ) (25,625 ) — (89,625 ) Due from affiliates — — (322,866 ) — 322,866 — Net cash used by investing activities — — (386,866 ) (25,625 ) 322,866 (89,625 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 1,277,250 — — — 1,277,250 Repayments of long-term debt — (1,215,940 ) (16 ) (687 ) — (1,216,643 ) Debt issuance cost — (8,376 ) — — — (8,376 ) Payments for common stock repurchased (346,873 ) — — — — (346,873 ) Proceeds from exercises of stock options 17,339 — — — — 17,339 Due to affiliates 325,439 (8,517 ) — 5,944 (322,866 ) — Net cash (used) provided by financing activities (4,095 ) 44,417 (16 ) 5,257 (322,866 ) (277,303 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — 779 — 779 Net increase (decrease) in cash and cash equivalents — (28,362 ) (278 ) 5,777 — (22,863 ) Cash and cash equivalents, beginning of period — 28,372 22,368 35,882 — 86,622 Cash and cash equivalents, end of period $ — $ 10 $ 22,090 $ 41,659 $ — $ 63,759 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided by operating activities $ 192,868 $ 20,902 $ 107,289 $ 33,053 $ — $ 354,112 Cash Flows from Investing Activities: Payments for property and equipment, net (16 ) — (117,539 ) (31,134 ) — (148,689 ) Acquisitions, net of cash acquired — — (26,141 ) — — (26,141 ) Net cash used by investing activities (16 ) — (143,680 ) (31,134 ) — (174,830 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 912,000 — — — 912,000 Repayments of long-term debt — (937,785 ) (92 ) (660 ) — (938,537 ) Debt issuance costs — (12,748 ) — — — (12,748 ) Payments for common stock repurchased (209,072 ) — — — — (209,072 ) Proceeds from exercises of stock options 16,220 — — — — 16,220 Net cash used by financing activities (192,852 ) (38,533 ) (92 ) (660 ) — (232,137 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (561 ) — (561 ) Net increase (decrease) in cash and cash equivalents — (17,631 ) (36,483 ) 698 — (53,416 ) Cash and cash equivalents, beginning of period — 46,003 58,851 35,184 — 140,038 Cash and cash equivalents, end of period $ — $ 28,372 $ 22,368 $ 35,882 $ — $ 86,622 |
Recent Restructuring Plans
Recent Restructuring Plans | 12 Months Ended |
Sep. 30, 2018 | |
Restructuring And Related Activities [Abstract] | |
Recent Restructuring Plans | 19. In January 2017, the Board approved a restructuring plan (the “2017 Restructuring Plan”) for our businesses that included the closure of four administrative offices in the U.S. and Canada, reductions in both salaried and hourly workforce and certain other cost reduction activities. In our fourth quarter ended September 30, 2017, we expanded the restructuring initiatives contemplated by the 2017 Restructuring Plan to encompass some other underperforming international operations. The liability related to the 2017 Restructuring Plan, which is included in accrued liabilities in our consolidated balance sheet, is as follows at September 30, 2018 (in thousands): Restructuring Activity Liability at September 30, 2017 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at September 30, 2018 Workforce reductions $ 1,860 $ - $ 1,346 $ 322 $ 192 Facility closures 1,747 - 1,101 516 130 Other 235 - 235 - - Total $ 3,842 $ - $ 2,682 $ 838 $ 322 In November 2017, our Board of Directors approved an additional restructuring plan (the “2018 Restructuring Plan”) focused on significantly improving the profitability of our international businesses, with particular focus on our European operations. The liability related to the 2018 Restructuring Plan, which is included in accrued liabilities in our consolidated balance sheet, is as follows at September 30, 2018 (in thousands): Restructuring Activity Liability at September 30, 2017 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at September 30, 2018 Workforce reductions $ - $ 15,623 $ 12,179 $ - $ 3,444 Consulting - 10,865 7,778 - 3,087 Other - 7,127 4,861 - 2,266 Total $ - $ 33,615 $ 24,818 $ - $ 8,797 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | 20. Certain unaudited quarterly consolidated statement of earnings information for the fiscal years ended September 30, 2018 and 2017 is summarized below (in thousands, except per share data): 1 st 2 nd 3 rd 4 th Fiscal Year Quarter Quarter Quarter Quarter 2018: Net sales $ 994,964 $ 975,321 $ 996,283 $ 965,997 Gross profit $ 486,629 $ 486,322 $ 493,370 $ 478,092 Net earnings $ 83,264 $ 61,371 $ 58,226 $ 55,186 Earnings per share (a) Basic $ 0.65 $ 0.49 $ 0.48 $ 0.46 Diluted $ 0.65 $ 0.49 $ 0.48 $ 0.46 2017: Net sales $ 999,609 $ 966,470 $ 998,043 $ 974,195 Gross profit $ 491,708 $ 488,106 $ 502,639 $ 482,442 Net earnings $ 55,826 $ 56,992 $ 66,539 $ 35,719 Earnings per share (a) Basic $ 0.39 $ 0.41 $ 0.49 $ 0.27 Diluted $ 0.39 $ 0.40 $ 0.49 $ 0.27 (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 Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates In accordance with GAAP, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent liabilities in the consolidated financial statements. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents generally represent highly liquid investments purchased 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 third-party online payment systems transactions, which generally settle within one to three days, and were $26.0 million and $20.5 million at September 30, 2018 and 2017, respectively. |
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 are stated net of the allowance for doubtful accounts. The allowance for doubtful accounts requires us to estimate the future collectability of amounts receivable at the balance sheet date. We record allowances for doubtful accounts on the basis of our 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 our consolidated statements of earnings, bad debt expense is included in selling, general and administrative expenses. The allowance for doubtful accounts was $1.8 million and $1.0 million at September 30, 2018 and 2017, respectively. Other accounts receivable consist primarily of amounts earned from vendors under various contractual agreements and are recorded at the amounts that we estimate will be collected. |
Inventory and Cost of Goods Sold | Inventory and Cost of Goods Sold 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 our 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 assessing the net realizable value of inventory, we consider several factors including estimates of future demand for our products, historical turn-over rates, the age and sales history of the inventory, and historic and anticipated changes in stock keeping units. Physical inventory counts are performed at substantially all stores and significant distribution centers at least annually. Upon completion of physical inventory counts, our consolidated financial statements are adjusted to reflect actual quantities on hand. Between physical counts, we estimate inventory shrinkage based on our historical experience. We have policies and processes in place that are intended to minimize inventory shrinkage. Cost of goods sold include actual product costs, the cost of transportation to our distribution centers, operating cost associated with our distribution centers (including employee compensation expense, depreciation and amortization, rent and other occupancy-related expenses), vendor rebates and allowances, inventory shrinkage and certain shipping and handling costs, such as freight from the distribution centers to the stores. All other shipping and handling costs are included in selling, general and administrative expenses when incurred. We deem cash consideration received from a supplier to be a reduction of the cost of goods sold, unless it is in exchange for an asset or service or a reimbursement of a specific, incremental, identifiable cost incurred by us in selling the vendor’s products. The majority of cash consideration we receive is considered to be a reduction of inventory and a subsequent reduction in cost of goods sold as the related products are sold. |
Lease Accounting | Lease Accounting The majority of our lease agreements are for company-operated stores, warehouse/distribution facilities and office space and are accounted for as operating leases. Rent expense (including any rent abatements or escalation charges) is recognized on a straight-line basis from the date we take possession of the property to begin preparation of the site for occupancy to the end of the lease term, including renewal options that are considered reasonably assured. Certain lease agreements to which we are a party provide for contingent rents that are determined as a percentage of revenues in excess of specified levels. We record a contingent rent liability, along with the corresponding rent expense, when the specified levels of revenue have been achieved or when we determine that achieving the specified levels of revenue during the fiscal year is probable. Certain lease agreements to which we are a party provide for tenant improvement allowances. Tenant improvement 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 that are determined 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 the 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. |
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 . G goodwill and intangible assets with indefinite lives for potential impairment, we consider 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, compare the carrying amount of the asset to its fair value. Based on our assessments, after taking into account potential triggering events, there was no material impairment of goodwill or intangible assets with indefinite lives recognized in our consolidated financial statements in the current or prior fiscal years presented. Based on our quantitative test of goodwill, each of our reporting units passed by a significant margin in the periods presented. |
Self-Insurance Programs | Self-Insurance Programs We retain a substantial portion of the risk related to certain of our workers’ compensation, general and auto liability, and property damage insurable loss exposure. Predetermined loss limits have been arranged with insurance companies to limit our 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”). We maintain an annual stop-loss insurance policy for the healthcare plan. We record 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. We estimate the ultimate cost based on an analysis of our historical data and actuarial estimates. These estimates are reviewed on a regular basis to ensure that the recorded liability is adequate. The long-term portions of these liabilities are recorded at their present value. |
Revenue Recognition | Revenue Recognition We measure revenue in connection with each sale of goods and services to a customer based on the consideration we expect to earn in exchange for each of those goods and services and we recognize revenue when we satisfy each performance obligation by transferring the promised goods and services to the customer. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and are excluded from revenue. Sales returns are estimated based on historical return rates. |
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 $83.4 million, $82.0 million and $93.0 million for the fiscal years 2018, 2017 and 2016, respectively, and are included in selling, general and administrative expenses in our consolidated statements of earnings. |
Share-based Compensation | Share-based Compensation We measure the cost of services received from our employees and directors in exchange for an award of equity instruments based on the fair value of the award on the date of grant. Service-based stock option awards are valued using the Black-Scholes option pricing model to estimate the fair value of each stock option award on the date of grant. Performance-based restricted stock units (“performance units”), and service-based restricted stock awards (“RSA” or “RSAs”) and restricted stock units (“RSU” or “RSUs”) are valued using the closing market price of our common stock on the date of grant. Stock options have a maximum term of ten years. The fair value of the service-based awards is expensed on a straight-line basis over the vesting period (generally three to four years for stock options, three to four years for RSAs and one year for RSUs) or, for stock options and RSAs, to the date a participant becomes eligible for retirement, if earlier. The fair value of the performance units are expensed over the requisite performance period (generally three years). For performance units, the number of shares, if any, which will be issued, is contingent upon both (a) employee service conditions and (b) our level of achievement with respect to specified performance targets. Periodic expense for performance unit awards, which is estimated quarterly, is based on our projected performance during the performance period compared to the performance targets contained in the award. As such, we estimate and recognize compensation expense for each award based on the percentage of the performance targets that we deem probable of achievement. Our assessment of the compensation expense, if any, to be ultimately recognized in connection with performance unit awards is based on currently available information. |
Depreciation and Amortization | Depreciation and Amortization Depreciation of property and equipment is calculated using the straight-line method based on the estimated useful lives of the respective classes of assets. Building 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 considered reasonably assured. Furniture, fixtures and equipment are depreciated over periods ranging from two to ten years. Expenditures for maintenance and repairs are included in selling, general and administrative expenses when incurred, while expenditures for major renewals and improvements are capitalized. Our intangible assets subject to amortization include customer relationships, certain distribution rights and non-competition agreements, and are amortized, on a straight-line basis, typically between periods of two to 13 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 us. |
Income Taxes | Income Taxes We recognize 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 anticipated to be recovered or settled. The effect on deferred taxes of a change in income 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 consolidated 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 our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our 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 we hold, 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 consolidated financial statements. |
Accounting Changes and Recent_2
Accounting Changes and Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes | Accounting Changes In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Income Taxes In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue Recognition In February 2016, the FASB issued ASU No. 2016-02, Leases |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities by fair value hierarchy | Fair value on recurring basis Consistent with the fair value hierarchy, we categorized our financial assets and liabilities as follows (in thousands): As of September 30, 2018 As of September 30, 2017 Assets Foreign exchange contracts Level 2 $ - $ 779 Interest rate caps Level 2 8,367 5,178 Total assets $ 8,367 $ 5,957 Liabilities Foreign exchange contracts Level 2 $ - $ 207 Other fair value disclosures The fair value for foreign exchange contracts and interest rate caps were measured using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market foreign currency exchange rates and market interest rates. As of September 30, 2018 As of September 30, 2017 Carrying Value Fair Value Carrying Value Fair Value Long-term debt Senior notes Level 1 950,000 911,490 $ 950,000 $ 973,750 Other long-term debt Level 2 845,383 824,951 941,480 946,180 Total debt $ 1,795,383 $ 1,736,441 $ 1,891,480 $ 1,919,930 |
Accumulated Stockholders' Def_2
Accumulated Stockholders' Deficit (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Stockholders Equity Note [Abstract] | |
Schedule of changes in accumulated other comprehensive loss | The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Caps Total Balance at September 30, 2016 $ (100,051 ) $ - $ (100,051 ) Other comprehensive income (loss) before reclassifications, net of tax 19,299 (1,084 ) 18,215 Balance at September 30, 2017 (80,752 ) (1,084 ) (81,836 ) Other comprehensive income (loss) before reclassifications, net of tax (10,604 ) 2,449 (8,155 ) Balance at September 30, 2018 $ (91,356 ) $ 1,365 $ (89,991 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
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, 2018 2017 2016 Net earnings $ 258,047 $ 215,076 $ 222,942 Weighted average basic shares 123,190 137,533 147,179 Dilutive securities: Stock option and stock award programs 642 643 1,624 Weighted average diluted shares 123,832 138,176 148,803 Earnings per share: Basic $ 2.09 $ 1.56 $ 1.51 Diluted $ 2.08 $ 1.56 $ 1.50 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Share-Based Payments | |
Schedule of total compensation cost charged against income | The following table presents total compensation cost included in selling, general and administrative expenses for all share-based compensation arrangements, and the related income tax benefits recognized in our consolidated statement of earnings (in thousands): Year ended September 30, 2018 2017 2016 Share-based compensation expense $ 10,519 $ 10,507 $ 12,580 Income tax benefit related to share-based compensation expense $ 3,013 $ 3,918 $ 4,816 |
Summary of activity for performance based unit awards assuming 100% payout | Performance Unit Awards Number of Shares (in Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 197 $ 24.50 1.5 Granted 215 17.42 Vested — — Forfeited (63 ) 20.51 Unvested at September 30, 2018 349 $ 20.88 1.3 |
Summary of activity for stock option awards | Number of Outstanding Options (in Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Outstanding at September 30, 2017 5,211 $ 24.12 5.6 $ 3,867 Granted 1,220 17.23 Exercised (150 ) 8.98 Forfeited or expired (876 ) 23.80 Outstanding at September 30, 2018 5,405 $ 23.04 5.4 $ 3,161 Exercisable at September 30, 2018 4,309 $ 23.87 4.7 $ 2,203 |
Summary of stock options by range of exercise prices | Options Outstanding Options Exercisable Range of Exercise Prices Number of Options Outstanding (in Thousands) Weighted Average Remaining Contractual Term (in Years) Weighted Average Exercise Price Number of Options Exercisable (in Thousands) Weighted Average Exercise Price $5.24 – 19.99 1,556 6.9 $ 16.48 802 $ 15.89 $20.00 – 24.99 1,312 4.9 23.46 1,312 23.46 $25.00 – 31.58 2,537 4.9 26.83 2,195 27.03 Total 5,405 5.4 $ 23.04 4,309 $ 23.87 |
Schedule of weighted average assumptions for valuation of stock options using the Black-Scholes option pricing model | Year ended September 30, 2018 2017 2016 Expected life (in years) 5.0 5.0 5.0 Expected volatility for the Company’s common stock 27.4 % 25.3 % 27.2 % Risk-free interest rate 2.1 % 1.3 % 1.5 % Dividend yield 0.0 % 0.0 % 0.0 % |
Restricted Stock Awards | |
Share-Based Payments | |
Summary of the activity for restricted stock awards/units | Restricted Stock Awards Number of Shares (in Thousands) Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 125 $ 26.00 1.3 Granted 326 16.98 Vested (172 ) 22.59 Forfeited (60 ) 19.71 Unvested at September 30, 2018 219 $ 16.98 2.1 |
Restricted Stock Units | |
Share-Based Payments | |
Summary of the activity for restricted stock awards/units | Restricted Stock Units Number of Shares (in Thousands) Weighted Average Fair Value Per Share Weighted Average Remaining Vesting Term (in Years) Unvested at September 30, 2017 - $ - - Granted 75 17.32 Vested (68 ) 17.31 Forfeited (7 ) 17.42 Unvested at September 30, 2018 - $ - - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment, net consists of the following (in thousands): September 30, 2018 2017 Land $ 11,130 $ 11,196 Buildings and building improvements 64,251 64,191 Leasehold improvements 274,848 259,618 Furniture, fixtures and equipment 569,149 524,773 Total property and equipment, gross 919,378 859,778 Less accumulated depreciation and amortization $ (611,021 ) (546,061 ) Total property and equipment, net $ 308,357 $ 313,717 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amounts of goodwill | The changes in the carrying amounts of goodwill during the fiscal years 2018 and 2017 are as follows (in thousands): SBS BSG Total Balance at September 30, 2016 $ 79,542 $ 453,172 $ 532,714 Foreign currency translation 3,128 1,949 5,077 Balance at September 30, 2017 $ 82,670 $ 455,121 $ 537,791 Acquisitions 329 716 1,045 Foreign currency translation (1,782 ) (1,129 ) (2,911 ) Balance at September 30, 2018 $ 81,217 $ 454,708 $ 535,925 |
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, 2018 and 2017 (in thousands): September 30, 2018 September 30, 2017 SBS BSG Total SBS BSG Total Intangible assets with indefinite lives: Trade names $ 20,643 $ 23,600 $ 44,243 $ 18,455 $ 26,280 $ 44,735 Intangible assets subject to amortization: Gross carrying amount 30,891 130,288 161,179 28,544 128,576 157,120 Accumulated amortization (24,432 ) (108,292 ) (132,724 ) (20,190 ) (101,360 ) (121,550 ) Net book value 6,459 21,996 28,455 8,354 27,216 35,570 Total intangible assets, excluding goodwill, net $ 27,102 $ 45,596 $ 72,698 $ 26,809 $ 53,496 $ 80,305 |
Schedule of estimated future amortization expense related to intangible assets subject to amortization | As of September 30, 2018, future amortization expense related to intangible assets subject to amortization is estimated as follows (in thousands): Fiscal Year: 2019 $ 11,124 2020 8,325 2021 4,674 2022 2,172 2023 1,054 Thereafter 1,106 $ 28,455 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Payables And Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): September 30, 2018 2017 Compensation and benefits $ 61,182 $ 59,838 Interest payable 23,008 19,623 Deferred revenue 18,450 20,588 Loss contingency obligation 14,294 6,359 Rental obligations 12,129 15,283 Insurance reserves 4,816 5,322 Property and other taxes 4,607 4,787 Operating accruals and other 41,801 34,727 Total accrued liabilities $ 180,287 $ 166,527 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments under non-cancelable operating leases, net of sublease income | At September 30, 2018, future minimum payments under non-cancelable operating leases, net of sublease income, are as follows (in thousands): Fiscal Year: 2019 $ 181,851 2020 145,414 2021 111,053 2022 73,908 2023 42,574 Thereafter 46,270 $ 601,070 |
Short-term Borrowings and Lon_2
Short-term Borrowings and Long-term Debt (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of long-term debt | Details of long-term debt (which is reported at amortized cost) are as follows (dollars in thousands): September 30, 2018 2017 Interest Rates ABL facility $ — $ 90,000 (i) Prime plus (0.25% to 0.50%) or; (ii) LIBOR plus (1.25% to 1.50%) Term loan B: Variable-rate tranche 544,500 550,000 LIBOR plus 2.25% Fixed-rate tranche 300,000 300,000 4.500% Senior notes due Nov. 2023 200,000 200,000 5.500% Senior notes due Dec. 2025 750,000 750,000 5.625% Total $ 1,794,500 $ 1,890,000 Plus: capital lease obligations 883 1,480 Less: unamortized debt issuance costs and premium, net 21,074 23,545 Total debt $ 1,774,309 $ 1,867,935 Less: current maturities 5,501 96,082 Total long-term debt $ 1,768,808 $ 1,771,853 |
Schedule of maturities of long-term debt | Maturities of our long-term debt, excluding capital leases, are as follows at September 30, 2018 (in thousands): Twelve months ending September 30: 2019 $ 5,500 2020 5,500 2021 5,500 2022 5,500 2023 5,500 Thereafter 1,767,000 Total $ 1,794,500 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivative financial instruments and their classification on consolidated balance sheets | The table below presents the fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets (in thousands): Asset Derivatives Liability Derivatives September 30, September 30, Classification 2018 2017 Classification 2018 2017 Derivatives designated as hedging instruments: Interest rate caps Other assets $ 8,367 $ 5,178 N/A $ — $ — Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets — 779 Accrued liabilities — 207 $ 8,367 $ 5,957 $ — $ 207 |
Schedule of derivative financial instruments on our consolidated statements of earnings and consolidated statements of comprehensive income | The table below presents the effect of our derivative financial instruments on our consolidated statements of earnings and consolidated statements of comprehensive income, as appropriate, for the fiscal years ended September 30, 2018, 2017 and 2016 (in thousands): Amount of Gain or (Loss) Recognized in OCI on Derivative, net of tax Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Derivatives Designated as Hedging Instruments Fiscal year ended September 30, Fiscal year ended September 30, 2018 2017 2016 2018 2017 2016 Interest rate caps $ 2,449 $ (1,084 ) $ — $ — $ — $ — Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives Not Designated as Hedging Instruments Classification of Gain or (Loss) Recognized into Income Fiscal year ended September 30, 2018 2017 2016 Foreign exchange contracts Selling, general and administrative expenses $ 1,566 $ (2,791 ) $ (1,051 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes for the fiscal years 2018, 2017 and 2016 consists of the following (in thousands): Fiscal Year Ended September 30, 2018 2017 2016 Current: Federal $ 68,608 $ 97,332 $ 87,088 Foreign 11,039 10,394 8,795 State 11,344 8,700 13,816 Total current portion 90,991 116,426 109,699 Deferred: Federal (26,001 ) 14,559 20,915 Foreign 1,868 (2,314 ) (932 ) State 3,522 1,951 1,436 Total deferred portion (20,611 ) 14,196 21,419 Total provision for income taxes $ 70,380 $ 130,622 $ 131,118 |
Schedule of the difference between U.S. statutory federal income tax rate and the effective income tax rate | The difference between the U.S. statutory federal income tax rate and the effective income tax rate is summarized below: Fiscal Year Ended September 30, 2018 2017 2016 U.S. federal statutory income tax rate 24.5 % 35.0 % 35.0 % State income taxes, net of federal tax benefit 3.2 2.2 2.9 Effect of foreign operations 0.6 0.3 (0.4 ) Deferred tax revaluation, including adoption of income tax method changes (11.5 ) — — Deemed repatriation tax 3.6 — — Other, net 1.0 0.3 (0.5 ) Effective tax rate 21.4 % 37.8 % 37.0 % |
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 our deferred tax assets and liabilities are as follows (in thousands): At September 30, 2018 2017 Deferred tax assets attributable to: Foreign loss carryforwards $ 28,612 $ 41,267 Accrued liabilities 15,676 19,695 Share-based compensation expense 10,762 16,057 U.S. foreign tax credits 8,807 — Unrecognized tax benefits 322 571 Inventory adjustments — 6,602 Other 442 2,214 Total deferred tax assets 64,621 86,406 Valuation allowance (40,906 ) (42,379 ) Total deferred tax assets, net 23,715 44,027 Deferred tax liabilities attributable to: Depreciation and amortization 92,531 133,264 Inventory adjustments 673 — Total deferred tax liabilities 93,204 133,264 Net deferred tax liability $ 69,489 $ 89,237 |
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 Ended September 30, 2018 2017 Balance at beginning of the fiscal year $ 1,467 $ 1,295 Increases related to prior year tax positions — 182 Decreases related to prior year tax positions (3 ) — Increases related to current year tax positions 309 254 Lapse of statute (405 ) (264 ) Balance at end of fiscal year $ 1,368 $ 1,467 |
Business Segments and Geograp_2
Business Segments and Geographic Area Information (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment data | Segment data for the fiscal years 2018, 2017 and 2016 are as follows (in thousands): 2018 2017 2016 Net sales: SBS $ 2,333,838 $ 2,345,116 $ 2,386,337 BSG 1,598,727 1,593,201 1,566,281 Total $ 3,932,565 $ 3,938,317 $ 3,952,618 Earnings before provision for income taxes: Segment operating earnings: SBS $ 362,853 $ 385,407 $ 411,824 BSG 240,225 254,691 252,442 Segment operating earnings 603,078 640,098 664,266 Unallocated expenses (a) (142,874 ) (138,822 ) (165,969 ) Restructuring charges (33,615 ) (22,679 ) - Consolidated operating earnings 426,589 478,597 498,297 Interest expense (b) (98,162 ) (132,899 ) (144,237 ) Earnings before provision for income taxes $ 328,427 $ 345,698 $ 354,060 Depreciation and amortization: SBS $ 64,017 $ 63,427 $ 55,833 BSG 29,733 31,755 29,598 Corporate 15,079 17,141 14,226 Total $ 108,829 $ 112,323 $ 99,657 Payments for property and equipment: SBS $ 46,289 $ 52,178 $ 95,706 BSG 16,598 19,335 23,907 Corporate 23,620 18,153 31,607 Total $ 86,507 $ 89,666 $ 151,220 Total assets (as of September 30): SBS $ 995,546 $ 1,025,545 $ 987,187 BSG 993,122 964,984 970,840 Sub-total 1,988,668 1,990,529 1,958,027 Corporate 108,746 108,478 137,011 Total $ 2,097,414 $ 2,099,007 $ 2,095,038 (a) 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 years 2018 and 2016, unallocated expenses includes $7.9 million and $14.6 million related to the data security incidents. (b) For the fiscal years 2018, 2017 and 2016, interest expense includes a loss on extinguishment of debt of $0.9 million, $28.0 million and $33.3 million, respectively |
Schedule of geographic area information | Certain geographic data is as follows (in thousands): 2018 2017 2016 Net sales (for the fiscal year indicated): United States $ 3,188,993 $ 3,248,662 $ 3,261,648 Other countries 743,572 689,655 690,970 Total $ 3,932,565 $ 3,938,317 $ 3,952,618 Long-lived assets (as of September 30): United States $ 234,475 $ 230,698 $ 240,803 United Kingdom 29,493 32,771 29,764 Other countries 44,389 50,248 48,991 Total $ 308,357 $ 313,717 $ 319,558 |
Parent, Issuers, Guarantor an_2
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet September 30, 2018 (In thousands) Parent Sally Holdings and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 Trade and other accounts receivable, net 4 — 53,295 37,191 — 90,490 Due from affiliates — — 2,598,681 — (2,598,681 ) — Inventory — — 714,000 230,338 — 944,338 Other current assets 2,010 111 27,422 13,417 — 42,960 Property and equipment, net 8 — 232,941 75,408 — 308,357 Investment in subsidiaries 1,368,927 4,044,669 380,166 — (5,793,762 ) — Goodwill and other intangible assets, net — — 459,348 149,275 — 608,623 Other assets 1,325 10,242 (4,797 ) 18,581 — 25,351 Total assets $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 38 $ — $ 233,936 $ 69,267 $ — $ 303,241 Due to affiliates 1,629,411 888,141 — 81,129 (2,598,681 ) — Accrued liabilities 234 23,019 125,179 31,855 — 180,287 Income taxes payable 585 1,519 — 40 — 2,144 Long-term debt — 1,773,426 1 882 — 1,774,309 Other liabilities 10,562 — 15,250 4,210 — 30,022 Deferred income tax liabilities, net — — 71,071 4,896 — 75,967 Total liabilities 1,640,830 2,686,105 445,437 192,279 (2,598,681 ) 2,365,970 Total stockholders’ (deficit) equity (268,556 ) 1,368,927 4,044,669 380,166 (5,793,762 ) (268,556 ) Total liabilities and stockholders’ (deficit) equity $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Condensed Consolidating Balance Sheet September 30, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 22,090 $ 41,659 $ — $ 63,759 Trade and other accounts receivable, net 200 — 59,992 32,049 — 92,241 Due from affiliates — — 2,289,371 — (2,289,371 ) — Inventory — — 709,890 220,965 — 930,855 Other current assets 11,763 813 26,144 16,503 — 55,223 Property and equipment, net 12 — 230,069 83,636 — 313,717 Investment in subsidiaries 1,110,891 3,717,999 386,681 — (5,215,571 ) — Goodwill and other intangible assets, net — — 468,118 149,978 — 618,096 Other assets 1,538 8,116 (7,837 ) 23,299 — 25,116 Total assets $ 1,124,404 $ 3,726,938 $ 4,184,518 $ 568,089 $ (7,504,942 ) $ 2,099,007 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 251 $ 4 $ 243,818 $ 63,679 $ — $ 307,752 Due to affiliates 1,487,484 727,856 — 74,031 (2,289,371 ) — Accrued liabilities 285 20,108 113,628 32,506 — 166,527 Income taxes payable — 1,624 — 609 — 2,233 Long-term debt — 1,866,455 1 1,479 — 1,867,935 Other liabilities — — 16,008 4,132 — 20,140 Deferred income tax liabilities, net — — 93,064 4,972 — 98,036 Total liabilities 1,488,020 2,616,047 466,519 181,408 (2,289,371 ) 2,462,623 Total stockholders’ (deficit) equity (363,616 ) 1,110,891 3,717,999 386,681 (5,215,571 ) (363,616 ) Total liabilities and stockholders’ (deficit) equity $ 1,124,404 $ 3,726,938 $ 4,184,518 $ 568,089 $ (7,504,942 ) $ 2,099,007 |
Schedule of Condensed Consolidating Statement of Earnings and Comprehensive Income | Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,152,120 $ 780,445 $ — $ 3,932,565 Related party sales — — 2,294 — (2,294 ) — Cost of goods sold — — 1,581,385 409,061 (2,294 ) 1,988,152 Gross profit — — 1,573,029 371,384 — 1,944,413 Selling, general and administrative expenses 10,957 1,538 1,136,312 335,402 — 1,484,209 Restructuring charges — — 33,615 — — 33,615 Operating earnings (loss) (10,957 ) (1,538 ) 403,102 35,982 — 426,589 Interest expense (income) — 98,332 (3 ) (167 ) — 98,162 Earnings (loss) before provision for income taxes (10,957 ) (99,870 ) 403,105 36,149 — 328,427 Provision (benefit) for income taxes (2,734 ) (28,787 ) 73,747 28,154 — 70,380 Equity in earnings of subsidiaries, net of tax 266,270 337,353 7,995 — (611,618 ) — Net earnings 258,047 266,270 337,353 7,995 (611,618 ) 258,047 Other comprehensive income (loss), net of tax — 2,449 — (10,604 ) — (8,155 ) Total comprehensive income (loss) $ 258,047 $ 268,719 $ 337,353 $ (2,609 ) $ (611,618 ) $ 249,892 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,209,039 $ 729,278 $ — $ 3,938,317 Related party sales — — 2,501 — (2,501 ) — Cost of goods sold — — 1,590,184 385,739 (2,501 ) 1,973,422 Gross profit — — 1,621,356 343,539 — 1,964,895 Selling, general and administrative expenses 10,939 526 1,130,615 321,539 — 1,463,619 Restructuring charges — — 22,679 — — 22,679 Operating earnings (loss) (10,939 ) (526 ) 468,062 22,000 — 478,597 Interest expense — 132,696 6 197 — 132,899 Earnings (loss) before provision for income taxes (10,939 ) (133,222 ) 468,056 21,803 — 345,698 Provision (benefit) for income taxes (4,246 ) (51,726 ) 177,383 9,211 — 130,622 Equity in earnings of subsidiaries, net of tax 221,769 303,265 12,592 — (537,626 ) — Net earnings 215,076 221,769 303,265 12,592 (537,626 ) 215,076 Other comprehensive income (loss), net of tax — (1,084 ) — 19,299 — 18,215 Total comprehensive income $ 215,076 $ 220,685 $ 303,265 $ 31,891 $ (537,626 ) $ 233,291 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2016 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,219,812 $ 732,806 $ — $ 3,952,618 Related party sales — — 2,666 — (2,666 ) — Cost of goods sold — — 1,595,187 396,157 (2,666 ) 1,988,678 Gross profit — — 1,627,291 336,649 — 1,963,940 Selling, general and administrative expenses 11,905 364 1,151,071 302,303 — 1,465,643 Restructuring charges — — — — — — Operating earnings (loss) (11,905 ) (364 ) 476,220 34,346 — 498,297 Interest expense (income) — 144,229 (6 ) 14 — 144,237 Earnings (loss) before provision for income taxes (11,905 ) (144,593 ) 476,226 34,332 — 354,060 Provision (benefit) for income taxes (4,638 ) (56,161 ) 181,932 9,985 — 131,118 Equity in earnings of subsidiaries, net of tax 230,209 318,641 24,347 — (573,197 ) — Net earnings 222,942 230,209 318,641 24,347 (573,197 ) 222,942 Other comprehensive loss, net of tax — — — (22,346 ) — (22,346 ) Total comprehensive income $ 222,942 $ 230,209 $ 318,641 $ 2,001 $ (573,197 ) $ 200,596 |
Schedule of Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 23,424 $ (62,948 ) $ 384,958 $ 27,227 $ — $ 372,661 Cash Flows from Investing Activities: Payments for property and equipment, net — — (68,689 ) (17,449 ) — (86,138 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (309,310 ) — 309,310 — Net cash used by investing activities — — (377,999 ) (26,624 ) 309,310 (95,313 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 461,814 5 — — 461,819 Repayments of long-term debt — (558,000 ) (4 ) (595 ) — (558,599 ) Debt issuance costs — (1,151 ) — — — (1,151 ) Payments for common stock repurchased (166,701 ) — — — — (166,701 ) Proceeds from exercises of stock options 1,350 — — — — 1,350 Due to affiliates 141,927 160,285 — 7,098 (309,310 ) — Net cash (used) provided by financing activities (23,424 ) 62,948 1 6,503 (309,310 ) (263,282 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (530 ) — (530 ) Net increase in cash and cash equivalents — — 6,960 6,576 — 13,536 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 4,095 $ (72,779 ) $ 386,604 $ 25,366 $ — $ 343,286 Cash Flows from Investing Activities: Payments for property and equipment, net — — (64,000 ) (25,625 ) — (89,625 ) Due from affiliates — — (322,866 ) — 322,866 — Net cash used by investing activities — — (386,866 ) (25,625 ) 322,866 (89,625 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 1,277,250 — — — 1,277,250 Repayments of long-term debt — (1,215,940 ) (16 ) (687 ) — (1,216,643 ) Debt issuance cost — (8,376 ) — — — (8,376 ) Payments for common stock repurchased (346,873 ) — — — — (346,873 ) Proceeds from exercises of stock options 17,339 — — — — 17,339 Due to affiliates 325,439 (8,517 ) — 5,944 (322,866 ) — Net cash (used) provided by financing activities (4,095 ) 44,417 (16 ) 5,257 (322,866 ) (277,303 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — 779 — 779 Net increase (decrease) in cash and cash equivalents — (28,362 ) (278 ) 5,777 — (22,863 ) Cash and cash equivalents, beginning of period — 28,372 22,368 35,882 — 86,622 Cash and cash equivalents, end of period $ — $ 10 $ 22,090 $ 41,659 $ — $ 63,759 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided by operating activities $ 192,868 $ 20,902 $ 107,289 $ 33,053 $ — $ 354,112 Cash Flows from Investing Activities: Payments for property and equipment, net (16 ) — (117,539 ) (31,134 ) — (148,689 ) Acquisitions, net of cash acquired — — (26,141 ) — — (26,141 ) Net cash used by investing activities (16 ) — (143,680 ) (31,134 ) — (174,830 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 912,000 — — — 912,000 Repayments of long-term debt — (937,785 ) (92 ) (660 ) — (938,537 ) Debt issuance costs — (12,748 ) — — — (12,748 ) Payments for common stock repurchased (209,072 ) — — — — (209,072 ) Proceeds from exercises of stock options 16,220 — — — — 16,220 Net cash used by financing activities (192,852 ) (38,533 ) (92 ) (660 ) — (232,137 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (561 ) — (561 ) Net increase (decrease) in cash and cash equivalents — (17,631 ) (36,483 ) 698 — (53,416 ) Cash and cash equivalents, beginning of period — 46,003 58,851 35,184 — 140,038 Cash and cash equivalents, end of period $ — $ 28,372 $ 22,368 $ 35,882 $ — $ 86,622 |
Recent Restructuring Plans (Tab
Recent Restructuring Plans (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
2017 Restructuring Plan | |
Schedule of restructuring plan | The liability related to the 2017 Restructuring Plan, which is included in accrued liabilities in our consolidated balance sheet, is as follows at September 30, 2018 (in thousands): Restructuring Activity Liability at September 30, 2017 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at September 30, 2018 Workforce reductions $ 1,860 $ - $ 1,346 $ 322 $ 192 Facility closures 1,747 - 1,101 516 130 Other 235 - 235 - - Total $ 3,842 $ - $ 2,682 $ 838 $ 322 |
2018 Restructuring Plan | |
Schedule of restructuring plan | The liability related to the 2018 Restructuring Plan, which is included in accrued liabilities in our consolidated balance sheet, is as follows at September 30, 2018 (in thousands): Restructuring Activity Liability at September 30, 2017 Expenses Expenses Paid or Otherwise Settled Adjustments Liability at September 30, 2018 Workforce reductions $ - $ 15,623 $ 12,179 $ - $ 3,444 Consulting - 10,865 7,778 - 3,087 Other - 7,127 4,861 - 2,266 Total $ - $ 33,615 $ 24,818 $ - $ 8,797 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
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, 2018 and 2017 is summarized below (in thousands, except per share data): 1 st 2 nd 3 rd 4 th Fiscal Year Quarter Quarter Quarter Quarter 2018: Net sales $ 994,964 $ 975,321 $ 996,283 $ 965,997 Gross profit $ 486,629 $ 486,322 $ 493,370 $ 478,092 Net earnings $ 83,264 $ 61,371 $ 58,226 $ 55,186 Earnings per share (a) Basic $ 0.65 $ 0.49 $ 0.48 $ 0.46 Diluted $ 0.65 $ 0.49 $ 0.48 $ 0.46 2017: Net sales $ 999,609 $ 966,470 $ 998,043 $ 974,195 Gross profit $ 491,708 $ 488,106 $ 502,639 $ 482,442 Net earnings $ 55,826 $ 56,992 $ 66,539 $ 35,719 Earnings per share (a) Basic $ 0.39 $ 0.41 $ 0.49 $ 0.27 Diluted $ 0.39 $ 0.40 $ 0.49 $ 0.27 (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 Polici_3
Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
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 third-party online payment systems transactions | $ 26 | $ 20.5 |
Trade Accounts Receivable and Accounts Receivable, Other | ||
Allowance for Doubtful Accounts | $ 1.8 | $ 1 |
Significant Accounting Polici_4
Significant Accounting Policies - Valuation of Long Lived Assets and Intangible Assets with Definite Lives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
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 |
Significant Accounting Polici_5
Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Advertising Costs | |||
Advertising costs | $ 83.4 | $ 82 | $ 93 |
Significant Accounting Polici_6
Significant Accounting Policies (Share based compensation and Depreciation) (Details) | 12 Months Ended |
Sep. 30, 2018 | |
Minimum | |
Depreciation and amortization: | |
Intangible assets amortization period | 2 years |
Minimum | Buildings and building improvements | |
Depreciation and amortization: | |
Property, Plant and Equipment, Useful Life | 5 years |
Minimum | Furniture, fixtures and equipment | |
Depreciation and amortization: | |
Property, Plant and Equipment, Useful Life | 2 years |
Minimum | Stock Option Awards | |
Share-Based Payments | |
Vesting period | 3 years |
Minimum | Restricted Stock Awards | |
Share-Based Payments | |
Vesting period | 3 years |
Maximum | |
Share-Based Payments | |
Term of stock options | 10 years |
Depreciation and amortization: | |
Intangible assets amortization period | 13 years |
Maximum | Buildings and building improvements | |
Depreciation and amortization: | |
Property, Plant and Equipment, Useful Life | 40 years |
Maximum | Furniture, fixtures and equipment | |
Depreciation and amortization: | |
Property, Plant and Equipment, Useful Life | 10 years |
Maximum | Stock Option Awards | |
Share-Based Payments | |
Vesting period | 4 years |
Maximum | Restricted Stock Awards | |
Share-Based Payments | |
Vesting period | 4 years |
Maximum | Restricted Stock Units | |
Share-Based Payments | |
Vesting period | 1 year |
Maximum | Performance Unit Awards | |
Share-Based Payments | |
Vesting period | 3 years |
Accounting Changes and Recent_3
Accounting Changes and Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Net decrease in noncurrent deferred income tax liabilities | $ (75,967) | $ (98,036) | |
ASU 2015-17 | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Decrease in current deferred income tax assets | (28,400) | ||
Net decrease in noncurrent deferred income tax liabilities | (22,100) | ||
ASU 2015-17 | Other Assets | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Net increase in noncurrent deferred income tax assets | 4,300 | ||
ASU 2015-17 | Accrued Liabilities | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Decrease in current deferred income tax liabilities | $ (2,000) | ||
ASU 2014-09 | Scenario, Forecast | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Increase decrease in other current assets and accrued liabilities | $ 2,600 | ||
ASU 16-02 | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Estimated amount of Right of use asset | 525,000 | ||
Lease liability | $ 525,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Long-term debt | ||
Long-term debt, Carrying Value | $ 1,795,383 | $ 1,891,480 |
Long-term debt, Fair Value | 1,736,441 | 1,919,930 |
Level 2 | Other Long-Term Debt | ||
Long-term debt | ||
Long-term debt, Carrying Value | 845,383 | 941,480 |
Long-term debt, Fair Value | 824,951 | 946,180 |
Level 1 | Senior notes | ||
Long-term debt | ||
Long-term debt, Carrying Value | 950,000 | 950,000 |
Long-term debt, Fair Value | 911,490 | 973,750 |
Fair value measurement on recurring basis | ||
Assets | ||
Total assets | 8,367 | 5,957 |
Fair value measurement on recurring basis | Level 2 | ||
Assets | ||
Foreign exchange contracts | 779 | |
Interest rate caps | $ 8,367 | 5,178 |
Liabilities | ||
Foreign exchange contracts | $ 207 |
Accumulated Stockholders' Def_3
Accumulated Stockholders' Deficit - Share Repurchase Program (Details) - USD ($) shares in Millions | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share Repurchase Program | ||||
Cost of repurchase and retirement of common stock | $ 166,701,000 | $ 346,051,000 | $ 207,312,000 | |
2017 Share Repurchase program | ||||
Share Repurchase Program | ||||
Amount of shares authorized to be repurchased | $ 1,000,000,000 | |||
Term of share repurchase program | 4 years | |||
Stock repurchase program, expiration date | Sep. 30, 2021 | |||
2017 Share Repurchase Program and 2014 Share Repurchase Program | ||||
Share Repurchase Program | ||||
Common stock shares repurchased and retired (in shares) | 10 | 16.1 | 7.8 | |
Cost of repurchase and retirement of common stock | $ 165,900,000 | $ 346,100,000 | $ 207,300,000 |
Accumulated stock holders' Defi
Accumulated stock holders' Deficit - Change in AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | $ (363,616) | $ (276,166) |
Balance | (268,556) | (363,616) |
Interest rate caps | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (1,084) | |
Other comprehensive income (loss) before reclassifications, net of tax | 2,449 | (1,084) |
Balance | 1,365 | (1,084) |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (80,752) | (100,051) |
Other comprehensive income (loss) before reclassifications, net of tax | (10,604) | 19,299 |
Balance | (91,356) | (80,752) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (81,836) | (100,051) |
Other comprehensive income (loss) before reclassifications, net of tax | (8,155) | 18,215 |
Balance | $ (89,991) | $ (81,836) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share Reconciliation: | |||||||||||
Net earnings | $ 55,186 | $ 58,226 | $ 61,371 | $ 83,264 | $ 35,719 | $ 66,539 | $ 56,992 | $ 55,826 | $ 258,047 | $ 215,076 | $ 222,942 |
Weighted average basic shares | 123,190 | 137,533 | 147,179 | ||||||||
Dilutive securities: | |||||||||||
Stock option and stock award programs | 642 | 643 | 1,624 | ||||||||
Weighted average diluted shares | 123,832 | 138,176 | 148,803 | ||||||||
Earnings per share: | |||||||||||
Basic | $ 0.46 | $ 0.48 | $ 0.49 | $ 0.65 | $ 0.27 | $ 0.49 | $ 0.41 | $ 0.39 | $ 2.09 | $ 1.56 | $ 1.51 |
Diluted | $ 0.46 | $ 0.48 | $ 0.49 | $ 0.65 | $ 0.27 | $ 0.49 | $ 0.40 | $ 0.39 | $ 2.08 | $ 1.56 | $ 1.50 |
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) | 5,200 | 4,500 | 1,100 |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Share-based compensation expense | $ 10,519 | $ 10,507 | $ 12,580 |
Income tax benefit related to share-based compensation expense | $ 3,013 | $ 3,918 | $ 4,816 |
Share-Based Payments - Performa
Share-Based Payments - Performance-Based Awards (Details) - Performance Unit Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-Based Payments | |||
Granted (in shares) | 215 | 146 | 152 |
Granted (in dollars per share) | $ 17.42 | $ 25.53 | $ 23.45 |
Performance period (in years) | 3 years | ||
Payout percentage (in percentage) | 100.00% | ||
Performance Unit Awards (in shares) | |||
Unvested at the beginning of the period (in shares) | 197 | ||
Granted (in shares) | 215 | 146 | 152 |
Forfeited (in shares) | (63) | ||
Unvested at the end of the period (in shares) | 349 | 197 | |
Performance Unit Awards (in dollars per share) | |||
Unvested at the beginning of the period (in dollars per share) | $ 24.50 | ||
Granted (in dollars per share) | 17.42 | $ 25.53 | $ 23.45 |
Forfeited (in dollars per share) | 20.51 | ||
Unvested at the end of the period (in dollars per share) | $ 20.88 | $ 24.50 | |
Performance Unit Awards (in years) | |||
Weighted Average Remaining Vesting Term (in Years) | 1 year 3 months 18 days | 1 year 6 months | |
Compensation expense Potentially recognized | $ 14.6 | ||
Cumulative compensation expense recognized prior to period | $ 2.2 | ||
Minimum | |||
Share-Based Payments | |||
Percentage of target shares | 0.00% | 0.00% | 0.00% |
Maximum | |||
Share-Based Payments | |||
Percentage of target shares | 200.00% | 200.00% | 200.00% |
Share-Based Payments - Service-
Share-Based Payments - Service-Based Awards and Stock Option Awards (Details) - Stock Option Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Options, Number of Outstanding Options | |||
Outstanding at the beginning of the period (in shares) | 5,211 | ||
Granted (in shares) | 1,220 | 1,500 | 1,500 |
Exercised (in shares) | (150) | ||
Forfeited or expired (in shares) | (876) | ||
Outstanding at the end of the period (in shares) | 5,405 | 5,211 | |
Exercisable at the end of the period (in shares) | 4,309 | ||
Stock Options, Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 24.12 | ||
Granted (in dollars per share) | 17.23 | ||
Exercised (in dollars per share) | 8.98 | ||
Forfeited or expired (in dollars per share) | 23.80 | ||
Outstanding at the end of the period (in dollars per share) | 23.04 | $ 24.12 | |
Exercisable at the end of the period (in dollars per share) | $ 23.87 | ||
Stock Options, Weighted Average Remaining Contractual Term | |||
Weighted average remaining contractual term (in years) | 5 years 4 months 24 days | 5 years 7 months 6 days | |
Exercisable at September 30, 2018 | 4 years 8 months 12 days | ||
Stock Options, Aggregate Intrinsic Value | |||
Outstanding balance at period end (in dollars) | $ 3,161 | $ 3,867 | |
Exercisable at the end of the period (in dollars) | $ 2,203 |
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, 2018$ / sharesshares | |
Information about stock options under option plans | |
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares | 5,405 |
Range of Exercise Prices, Weighted Average Remaining Contractual Term | 5 years 4 months 24 days |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 23.04 |
Options Exercisable | |
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares | 4,309 |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 23.87 |
Range of Exercise Prices $5.24 - 19.99 | |
Information about stock options under option plans | |
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares | 1,556 |
Range of Exercise Prices, Weighted Average Remaining Contractual Term | 6 years 10 months 24 days |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 16.48 |
Options Exercisable | |
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares | 802 |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 15.89 |
Lower Range of Exercise Prices (in dollars per share) | 5.24 |
Upper Range of Exercise Prices (in dollars per share) | $ 19.99 |
Range of Exercise Prices $20.00 - 24.99 | |
Information about stock options under option plans | |
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares | 1,312 |
Range of Exercise Prices, Weighted Average Remaining Contractual Term | 4 years 10 months 24 days |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 23.46 |
Options Exercisable | |
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares | 1,312 |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 23.46 |
Lower Range of Exercise Prices (in dollars per share) | 20 |
Upper Range of Exercise Prices (in dollars per share) | $ 24.99 |
Range of Exercise Prices $25.00 - 31.58 | |
Information about stock options under option plans | |
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares | 2,537 |
Range of Exercise Prices, Weighted Average Remaining Contractual Term | 4 years 10 months 24 days |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 26.83 |
Options Exercisable | |
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares | 2,195 |
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share) | $ 27.03 |
Lower Range of Exercise Prices (in dollars per share) | 25 |
Upper Range of Exercise Prices (in dollars per share) | $ 31.58 |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted average assumptions relating to the valuation of stock options | |||
Proceeds from exercises of stock options | $ 1,350 | $ 17,339 | $ 16,220 |
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 for the Company’s common stock | 27.40% | 25.30% | 27.20% |
Risk-free interest rate | 2.10% | 1.30% | 1.50% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average fair value of the stock options issued (in dollars per share) | $ 4.84 | $ 6.37 | $ 6.32 |
Aggregate fair value of stock options | $ 7,700 | $ 13,100 | $ 16,500 |
Aggregate intrinsic value of options exercised | 1,300 | 7,700 | 11,000 |
Proceeds from exercises of stock options | 1,400 | 17,300 | 16,200 |
Tax benefit realized for the tax deductions of stock option exercises | 300 | $ 2,900 | $ 3,700 |
Total unrecognized compensation expenses related to unvested awards | $ 5,000 | ||
Weighted average period for recognition of unvested awards | 1 year 8 months 12 days |
Share-Based Payments - Restrict
Share-Based Payments - Restricted Stock Awards (Details) - Restricted Stock Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Awards | |||
Granted (in shares) | 326 | 35 | 40 |
Granted (in dollars per share) | $ 16.98 | $ 23.79 | $ 25.35 |
Restricted stock (in shares) | |||
Unvested at the beginning of the period (in shares) | 125 | ||
Granted (in shares) | 326 | 35 | 40 |
Vested (in shares) | (172) | ||
Forfeited (in shares) | (60) | ||
Unvested at the end of the period (in shares) | 219 | 125 | |
Restricted Stock (in dollars per share) | |||
Unvested at the beginning of the period (in dollars per share) | $ 26 | ||
Granted (in dollars per share) | 16.98 | $ 23.79 | $ 25.35 |
Vested (in dollar per share) | 22.59 | ||
Forfeited (in dollars per share) | 19.71 | ||
Unvested at the end of the period (in dollars per share) | $ 16.98 | $ 26 | |
Restricted stock (in years) | |||
Weighted Average Remaining Vesting Term (in Years) | 2 years 1 month 6 days | 1 year 3 months 18 days | |
Total unrecognized compensation expenses related to unvested awards | $ 3.2 | ||
Weighted average period for recognition of unvested awards | 2 years 1 month 6 days | ||
Minimum | |||
Stock Awards | |||
Vesting period | 3 years | ||
Maximum | |||
Stock Awards | |||
Vesting period | 4 years |
Share-Based Payments - Restri_2
Share-Based Payments - Restricted Stock Units (Details) - Restricted Stock Units - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Awards | |||
Restricted stock units, retention period | 6 months | ||
Granted (in shares) | 75 | 42 | 28 |
Granted (in dollars per share) | $ 17.32 | $ 25.09 | $ 24.10 |
Restricted stock (in shares) | |||
Granted (in shares) | 75 | 42 | 28 |
Vested (in shares) | (68) | ||
Forfeited (in shares) | (7) | ||
Restricted Stock (in dollars per share) | |||
Granted (in dollars per share) | $ 17.32 | $ 25.09 | $ 24.10 |
Vested (in dollar per share) | 17.31 | ||
Forfeited (in dollars per share) | $ 17.42 | ||
Restricted stock (in years) | |||
Total unrecognized compensation expenses related to unvested awards | $ 0 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property and Equipment, Net | |||
Total property and equipment, gross | $ 919,378 | $ 859,778 | |
Less accumulated depreciation and amortization | (611,021) | (546,061) | |
Total property and equipment, net | 308,357 | 313,717 | $ 319,558 |
Selling, general and administrative expenses | |||
Property and Equipment, Net | |||
Depreciation expense | 97,200 | 99,200 | $ 86,300 |
Land | |||
Property and Equipment, Net | |||
Total property and equipment, gross | 11,130 | 11,196 | |
Buildings and building improvements | |||
Property and Equipment, Net | |||
Total property and equipment, gross | 64,251 | 64,191 | |
Leasehold improvements | |||
Property and Equipment, Net | |||
Total property and equipment, gross | 274,848 | 259,618 | |
Furniture, fixtures and equipment | |||
Property and Equipment, Net | |||
Total property and equipment, gross | $ 569,149 | $ 524,773 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | $ 537,791 | $ 532,714 |
Foreign currency translation | (2,911) | 5,077 |
Balance at the end of the period | 535,925 | 537,791 |
Acquisitions | 1,045 | |
Sally Beauty Supply | ||
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | 82,670 | 79,542 |
Foreign currency translation | (1,782) | 3,128 |
Balance at the end of the period | 81,217 | 82,670 |
Acquisitions | 329 | |
Beauty Systems Group | ||
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | 455,121 | 453,172 |
Foreign currency translation | (1,129) | 1,949 |
Balance at the end of the period | 454,708 | $ 455,121 |
Acquisitions | $ 716 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible assets with indefinite lives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Trade names | $ 44,243 | $ 44,735 | |
Intangible assets subject to amortization: | |||
Gross carrying amount | 161,179 | 157,120 | |
Accumulated amortization | (132,724) | (121,550) | |
Net book value | 28,455 | 35,570 | |
Total intangible assets, excluding goodwill, net | 72,698 | 80,305 | |
Selling, general and administrative expenses | |||
Intangible assets subject to amortization: | |||
Amortization expense | 11,700 | 13,100 | $ 13,300 |
Sally Beauty Supply | |||
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Trade names | 20,643 | 18,455 | |
Intangible assets subject to amortization: | |||
Gross carrying amount | 30,891 | 28,544 | |
Accumulated amortization | (24,432) | (20,190) | |
Net book value | 6,459 | 8,354 | |
Total intangible assets, excluding goodwill, net | 27,102 | 26,809 | |
Beauty Systems Group | |||
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Trade names | 23,600 | 26,280 | |
Intangible assets subject to amortization: | |||
Gross carrying amount | 130,288 | 128,576 | |
Accumulated amortization | (108,292) | (101,360) | |
Net book value | 21,996 | 27,216 | |
Total intangible assets, excluding goodwill, net | $ 45,596 | $ 53,496 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated future amortization expense related to intangible assets subject to amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Estimated future amortization expense related to intangible assets subject to amortization: | ||
2,019 | $ 11,124 | |
2,020 | 8,325 | |
2,021 | 4,674 | |
2,022 | 2,172 | |
2,023 | 1,054 | |
Thereafter | 1,106 | |
Net book value | $ 28,455 | $ 35,570 |
Weighted average remaining amortization period (in years) | 3 years 6 months |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Accrued Liabilities | ||
Compensation and benefits | $ 61,182 | $ 59,838 |
Interest payable | 23,008 | 19,623 |
Deferred revenue | 18,450 | 20,588 |
Loss contingency obligation | 14,294 | 6,359 |
Rental obligations | 12,129 | 15,283 |
Insurance reserves | 4,816 | 5,322 |
Property and other taxes | 4,607 | 4,787 |
Operating accruals and other | 41,801 | 34,727 |
Total accrued liabilities | $ 180,287 | $ 166,527 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fiscal Year: | |||
2,019 | $ 181,851 | ||
2,020 | 145,414 | ||
2,021 | 111,053 | ||
2,022 | 73,908 | ||
2,023 | 42,574 | ||
Thereafter | 46,270 | ||
Total operating lease, future minimum payments due | 601,070 | ||
Total rental expense for operating leases | $ 249,800 | $ 242,000 | $ 231,000 |
Commitments and Contingencies -
Commitments and Contingencies - Other Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2016 | |
Data security incidents | ||
Loss Contingencies [Line Items] | ||
Data security incident expenses | $ 7.9 | $ 14.6 |
Short-term Borrowings and Lon_3
Short-term Borrowings and Long-term Debt - Details of Long-term Debt Table (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2018 | |
Debt Instruments | ||
Total | $ 1,890,000 | $ 1,794,500 |
Variable-rate tranche | ||
Debt Instruments | ||
Total | $ 550,000 | 544,500 |
Variable-rate tranche | LIBOR | ||
Debt Instruments | ||
Percentage points added to the reference rate | 2.25% | |
Fixed-rate tranche | ||
Debt Instruments | ||
Total | $ 300,000 | 300,000 |
Interest rate (as a percent) | 4.50% | |
ABL facility | ||
Debt Instruments | ||
Total | $ 90,000 | |
ABL facility | Prime | Minimum | ||
Debt Instruments | ||
Percentage points added to the reference rate | 0.25% | |
ABL facility | Prime | Maximum | ||
Debt Instruments | ||
Percentage points added to the reference rate | 0.50% | |
ABL facility | LIBOR | Minimum | ||
Debt Instruments | ||
Percentage points added to the reference rate | 1.25% | |
ABL facility | LIBOR | Maximum | ||
Debt Instruments | ||
Percentage points added to the reference rate | 1.50% | |
Senior notes due Nov. 2023 | ||
Debt Instruments | ||
Total | $ 200,000 | 200,000 |
Interest rate (as a percent) | 5.50% | |
Senior notes due Dec. 2025 | ||
Debt Instruments | ||
Total | $ 750,000 | $ 750,000 |
Interest rate (as a percent) | 5.625% |
Short-term Borrowings and Lon_4
Short-term Borrowings and Long-term Debt - Details of Long-term Debt Table - Total debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Debt Disclosure [Abstract] | ||
Total | $ 1,794,500 | $ 1,890,000 |
Plus: capital lease obligations | 883 | 1,480 |
Less: unamortized debt issuance costs and premium, net | 21,074 | 23,545 |
Total debt | $ 1,774,309 | $ 1,867,935 |
Short-term Borrowings and Lon_5
Short-term Borrowings and Long-term Debt - Details of Long-term Debt Table - Total long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Debt Disclosure [Abstract] | ||
Total debt | $ 1,774,309 | $ 1,867,935 |
Less: current maturities | 5,501 | 96,082 |
Total long-term debt | $ 1,768,808 | $ 1,771,853 |
Short-term Borrowings and Lon_6
Short-term Borrowings and Long-term Debt - Maturities of the Company's long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Fiscal Year | ||
2,019 | $ 5,500 | |
2,020 | 5,500 | |
2,021 | 5,500 | |
2,022 | 5,500 | |
2,023 | 5,500 | |
Thereafter | 1,767,000 | |
Total | $ 1,794,500 | $ 1,890,000 |
Short-term Borrowings and Lon_7
Short-term Borrowings and Long-term Debt - ABL Facility and Canadian sub-facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Instruments | ||||
Capitalized financing costs | $ 1,151 | $ 8,376 | $ 12,748 | |
Sally Holdings, LLC | Senior notes due Jun. 2022 | ||||
Debt Instruments | ||||
Redemption premium of debt | $ 24,400 | |||
Unamortized deferred financing costs | 8,000 | |||
Sally Holdings, LLC | ABL facility | ||||
Debt Instruments | ||||
Revolving credit facility | $ 500,000 | |||
Debt instrument term | 5 years | |||
Capitalized financing costs | $ 1,500 | |||
Sally Holdings, LLC | Canadian sub-facility | ||||
Debt Instruments | ||||
Revolving credit facility | $ 25,000 |
Short-term Borrowings and Lon_8
Short-term Borrowings and Long-Term Debt - Term loan (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Jul. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Instruments | |||||
Capitalized financing costs | $ 1,151 | $ 8,376 | $ 12,748 | ||
Loss on extinguishment of debt | (876) | (27,981) | $ (33,296) | ||
Unamortized debt issuance costs | 21,074 | 23,545 | |||
Letter of credit | 18,700 | 20,400 | |||
ABL facility | Other Assets | |||||
Debt Instruments | |||||
Unamortized deferred financing costs | 1,600 | $ 2,000 | |||
Variable-rate tranche | LIBOR | |||||
Debt Instruments | |||||
Debt instrument, variable percentage | 2.25% | ||||
Fixed-rate tranche | |||||
Debt Instruments | |||||
Debt instrument, stated percentage | 4.50% | ||||
Sally Holdings, LLC | |||||
Debt Instruments | |||||
Revolving credit facility | 481,300 | ||||
Sally Holdings, LLC | Senior notes due Jun. 2022 | |||||
Debt Instruments | |||||
Loss on extinguishment of debt | $ (27,600) | ||||
Redemption premium of debt | 24,400 | ||||
Unamortized deferred financing costs | 8,000 | ||||
Unamortized premium | $ 4,800 | ||||
Sally Holdings, LLC | ABL facility | |||||
Debt Instruments | |||||
Debt instrument term | 5 years | ||||
Capitalized financing costs | $ 1,500 | ||||
Loss on extinguishment of debt | (400) | ||||
Proceeds from revolving credit facility | $ 33,500 | ||||
Debt instrument, maturity date | Jul. 6, 2022 | ||||
Revolving credit facility | $ 500,000 | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.20% | ||||
Sally Holdings, LLC | Canadian sub-facility | |||||
Debt Instruments | |||||
Revolving credit facility | $ 25,000 | ||||
Sally Holdings, LLC | Term Loan B | |||||
Debt Instruments | |||||
Debt instrument term | 7 years | ||||
Debt instrument, face amount | $ 850,000 | ||||
Proceeds from term loan B | 845,800 | ||||
Capitalized financing costs | $ 6,900 | ||||
Debt instrument, maturity date | Jul. 5, 2024 | ||||
Sally Holdings, LLC | Term Loan B | Senior notes due Jun. 2022 | |||||
Debt Instruments | |||||
Debt instrument, face amount | $ 850,000 | ||||
Sally Holdings, LLC | Term Loan B | Senior notes | |||||
Debt Instruments | |||||
Unamortized debt issuance costs | $ 17,200 | $ 19,400 | |||
Sally Holdings, LLC | Variable-rate tranche | |||||
Debt Instruments | |||||
Debt instrument, face amount | $ 550,000 | ||||
Debt instrument, annual rate on original amount | 0.25% | ||||
Sally Holdings, LLC | Variable-rate tranche | LIBOR | |||||
Debt Instruments | |||||
Debt instrument, variable percentage | 2.25% | ||||
Sally Holdings, LLC | Variable-rate tranche | Alternate base rate | |||||
Debt Instruments | |||||
Debt instrument, variable percentage | 1.25% | ||||
Sally Holdings, LLC | Fixed-rate tranche | |||||
Debt Instruments | |||||
Debt instrument, face amount | $ 300,000 | ||||
Debt instrument, stated percentage | 4.50% | ||||
Sally Holdings, LLC | Term Loan B | |||||
Debt Instruments | |||||
Loss on extinguishment of debt | $ (900) | ||||
Basis Points | 0.25% | ||||
Unamortized debt issuance costs | $ 1,000 | ||||
Sally Holdings, LLC | Term Loan B | LIBOR | |||||
Debt Instruments | |||||
Debt instrument, variable percentage | 2.25% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - (Details) | 12 Months Ended | |
Sep. 30, 2018USD ($)instrument | Jul. 31, 2017USD ($)derivative | |
Derivative Instruments | ||
Number of derivative instruments held | instrument | 0 | |
Variable-rate tranche | Interest rate caps | Sally Holdings, LLC | ||
Derivative Instruments | ||
Notional Amount | $ 550,000,000 | |
Derivative instruments, expiration date | Jun. 30, 2023 | |
Designated Cash Flow Hedges | ||
Number of interest rate caps | derivative | 2 | |
Interest rate caps designated as cash flow hedges to be reclassified in to interest expense over next 12 months | $ 200,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Non-designated Cash Flow Hedges (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Derivatives Not Designated as Hedging Instruments | ||
Total derivatives not designated as hedging instruments, Asset | $ 8,367 | $ 5,957 |
Total derivatives not designated as hedging instruments, Liability | 207 | |
Other Assets | ||
Derivatives Not Designated as Hedging Instruments | ||
Interest rate caps | $ 8,367 | 5,178 |
Other current assets | ||
Derivatives Not Designated as Hedging Instruments | ||
Foreign exchange contracts | 779 | |
Accrued Liabilities | ||
Credit-risk-related Contingent Features | ||
Foreign exchange contracts | $ 207 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Derivatives Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Designated as Hedging Instrument | Interest rate caps | |||
Designated Cash Flow Hedges | |||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion), net of tax | $ 2,449 | $ (1,084) | |
Derivatives not designated as hedging instruments | Foreign Exchange Contract | Selling, general and administrative expenses | |||
Derivative Instruments Not Designated as Hedging Instruments [Abstract] | |||
Amount of Gain or (Loss) Recognized in Income on Derivatives, Foreign Exchange Contracts | $ 1,566 | $ (2,791) | $ (1,051) |
401(k) and Profit Sharing Plan
401(k) and Profit Sharing Plan (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |||
Defined contribution plan, expense recognized | $ 6,500,000 | $ 7,100,000 | $ 7,100,000 |
Defined contributionplan, plan name | 401(k) Plan | ||
Profit sharing plan, expense recognized | $ 0 | $ 0 | $ 2,600,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Contingency [Line Items] | ||||
Provisional income tax benefit recognized related to revaluation of deferred income tax assets and liabilities | $ 37,700 | |||
Provisional income tax charge recognized for federal and state income taxes | 11,700 | |||
Undistributed earnings of foreign operations | $ 10,600 | |||
Federal statutory tax rate | 24.50% | 35.00% | 35.00% | |
Current: | ||||
Federal | $ 68,608 | $ 97,332 | $ 87,088 | |
Foreign | 11,039 | 10,394 | 8,795 | |
State | 11,344 | 8,700 | 13,816 | |
Total current portion | 90,991 | 116,426 | 109,699 | |
Deferred: | ||||
Federal | (26,001) | 14,559 | 20,915 | |
Foreign | 1,868 | (2,314) | (932) | |
State | 3,522 | 1,951 | 1,436 | |
Total deferred portion | (20,611) | 14,196 | 21,419 | |
Total provision for income taxes | 70,380 | $ 130,622 | $ 131,118 | |
Scenario, Forecast | ||||
Income Tax Contingency [Line Items] | ||||
Federal statutory tax rate | 21.00% | |||
ASU 2015-17 | ||||
Income Tax Contingency [Line Items] | ||||
Provisional income tax benefit recognized related to revaluation of deferred income tax assets and liabilities | $ 2,700 |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference Between US Federal Statutory Income Tax Rate and Effective Income Tax Rate (Details) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 24.50% | 35.00% | 35.00% |
State income taxes, net of federal tax benefit | 3.20% | 2.20% | 2.90% |
Effect of foreign operations | 0.60% | 0.30% | (0.40%) |
Deferred tax revaluation, including adoption of income tax method changes | (11.50%) | ||
Deemed repatriation tax | 3.60% | ||
Other, net | 1.00% | 0.30% | (0.50%) |
Effective tax rate | 21.40% | 37.80% | 37.00% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Deferred tax assets attributable to: | |||
Foreign loss carryforwards | $ 28,612,000 | $ 41,267,000 | |
Accrued liabilities | 15,676,000 | 19,695,000 | |
Share-based compensation expense | 10,762,000 | 16,057,000 | |
U.S. foreign tax credits | 8,807,000 | ||
Unrecognized tax benefits | 322,000 | 571,000 | |
Inventory adjustments | 6,602,000 | ||
Other | 442,000 | 2,214,000 | |
Total deferred tax assets | 64,621,000 | 86,406,000 | |
Valuation allowance | (40,906,000) | (42,379,000) | |
Total deferred tax assets, net | 23,715,000 | 44,027,000 | |
Deferred tax liabilities attributable to: | |||
Depreciation and amortization | 92,531,000 | 133,264,000 | |
Inventory adjustments | 673,000 | ||
Total deferred tax liabilities | 93,204,000 | 133,264,000 | |
Net deferred tax liability | 69,489,000 | 89,237,000 | |
Domestic earnings before provision for income taxes | 300,400,000 | 332,500,000 | $ 327,100,000 |
Foreign earnings before provision for income taxes | 28,000,000 | 13,200,000 | $ 27,000,000 |
Deferred taxes on accumulated undistributed earnings of our foreign operations | 0 | ||
Total operating loss carry-forward | 103,000,000 | 135,600,000 | |
Operating loss carry-forward, subject to valuation allowance | 88,600,000 | 117,000,000 | |
Amount of operating loss carry-forwards with an expiration date | 8,000,000 | ||
Amount of operating loss carry-forwards without an expiration date | 95,000,000 | ||
Total tax credit carryforwards | 11,600,000 | 2,800,000 | |
Expiring tax credit carryforwards | 1,400,000 | ||
Non-expiring tax credit carryforwards | 1,400,000 | ||
Total Tax credit carryforwards, subject to a valuation allowance | 10,200,000 | $ 1,200,000 | |
U.S. foreign | |||
Deferred tax liabilities attributable to: | |||
Expiring tax credit carryforwards | 8,800,000 | ||
German Tax Authories | German Affiliate | |||
Deferred tax liabilities attributable to: | |||
Operating loss carry-forwards, expected surrender amount | $ 21,000,000 |
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, 2018 | Sep. 30, 2017 | |
Reconciliation of the changes in the amount of unrecognized tax benefits | ||
Balance at beginning of the fiscal year | $ 1,467 | $ 1,295 |
Increases related to prior year tax positions | 182 | |
Decreases related to prior year tax positions | (3) | |
Increases related to current year tax positions | 309 | 254 |
Lapse of statute | (405) | (264) |
Balance at end of fiscal year | 1,368 | 1,467 |
Total unrecognized tax benefits of accrued interest and penalties | $ 200 | $ 200 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 12 Months Ended | |
Sep. 30, 2018USD ($)store | Sep. 30, 2016USD ($)store | |
Chalut | ||
Acquisitions | ||
Number of beauty supply stores | store | 21 | |
Cost of acquisition | $ 8.8 | |
Intangible assets subject to amortization | 4.7 | |
Goodwill expected to be deducted for tax purposes | 0.7 | |
Not individually material acquisitions | ||
Acquisitions | ||
Cost of acquisition | $ 0.4 | $ 2.3 |
Intangible assets subject to amortization | $ 2.3 | |
Peerless | ||
Acquisitions | ||
Number of beauty supply stores | store | 15 | |
Cost of acquisition | $ 23.9 | |
Intangible assets subject to amortization | 7.8 | |
Goodwill expected to be deducted for tax purposes | $ 13.1 |
Business Segments and Geograp_3
Business Segments and Geographic Area Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Segments | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Net sales: | |||||||||||
Total net sales | $ 965,997 | $ 996,283 | $ 975,321 | $ 994,964 | $ 974,195 | $ 998,043 | $ 966,470 | $ 999,609 | $ 3,932,565 | $ 3,938,317 | $ 3,952,618 |
Segment operating earnings: | |||||||||||
Segment operating earnings | 426,589 | 478,597 | 498,297 | ||||||||
Restructuring charges | (33,615) | (22,679) | |||||||||
Interest expense (b) | (98,162) | (132,899) | (144,237) | ||||||||
Earnings before provision for income taxes | 328,427 | 345,698 | 354,060 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 108,829 | 112,323 | 99,657 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 86,507 | 89,666 | 151,220 | ||||||||
Total assets: | |||||||||||
Assets | 2,097,414 | 2,099,007 | 2,097,414 | 2,099,007 | 2,095,038 | ||||||
Loss on extinguishment of debt | |||||||||||
Net loss on extinguishment of debt | 876 | 27,981 | 33,296 | ||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 308,357 | 313,717 | 308,357 | 313,717 | 319,558 | ||||||
Changes in foreign currency exchange rates | |||||||||||
(Gain) loss on foreign currency exchange | (33,100) | 30,000 | 56,400 | ||||||||
United States | |||||||||||
Net sales: | |||||||||||
Total net sales | 3,188,993 | 3,248,662 | 3,261,648 | ||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 234,475 | 230,698 | 234,475 | 230,698 | 240,803 | ||||||
Foreign | |||||||||||
Net sales: | |||||||||||
Total net sales | 743,572 | 689,655 | 690,970 | ||||||||
United Kingdom | |||||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 29,493 | 32,771 | 29,493 | 32,771 | 29,764 | ||||||
Other countries | |||||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 44,389 | 50,248 | 44,389 | 50,248 | 48,991 | ||||||
Senior notes due Nov. 2019 | |||||||||||
Loss on extinguishment of debt | |||||||||||
Net loss on extinguishment of debt | 900 | 28,000 | 33,300 | ||||||||
Data security incidents | Selling, general and administrative expenses | |||||||||||
Segment operating earnings: | |||||||||||
Unallocated expenses (a) | 7,900 | 14,600 | |||||||||
Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 603,078 | 640,098 | 664,266 | ||||||||
Total assets: | |||||||||||
Assets | 1,988,668 | 1,990,529 | 1,988,668 | 1,990,529 | 1,958,027 | ||||||
Corporate | |||||||||||
Segment operating earnings: | |||||||||||
Unallocated expenses (a) | (142,874) | (138,822) | (165,969) | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 15,079 | 17,141 | 14,226 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 23,620 | 18,153 | 31,607 | ||||||||
Total assets: | |||||||||||
Assets | 108,746 | 108,478 | 108,746 | 108,478 | 137,011 | ||||||
Sally Beauty Supply | |||||||||||
Net sales: | |||||||||||
Total net sales | 2,333,838 | 2,345,116 | 2,386,337 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 64,017 | 63,427 | 55,833 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 46,289 | 52,178 | 95,706 | ||||||||
Sally Beauty Supply | Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 362,853 | 385,407 | 411,824 | ||||||||
Total assets: | |||||||||||
Assets | 995,546 | 1,025,545 | 995,546 | 1,025,545 | 987,187 | ||||||
Beauty Systems Group | |||||||||||
Net sales: | |||||||||||
Total net sales | 1,598,727 | 1,593,201 | 1,566,281 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 29,733 | 31,755 | 29,598 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 16,598 | 19,335 | 23,907 | ||||||||
Beauty Systems Group | Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 240,225 | 254,691 | 252,442 | ||||||||
Total assets: | |||||||||||
Assets | $ 993,122 | $ 964,984 | $ 993,122 | $ 964,984 | $ 970,840 |
Parent, Issuers, Guarantor an_3
Parent, Issuers, Guarantor and Non Guarantor Condensed Consolidated Financial Statements - (Details) | Sep. 30, 2018 |
Guarantor Subsidiaries | |
Condensed Balance Sheet Statements Captions [Line Items] | |
Percentage of guarantor subsidiaries owned by parent | 100.00% |
Parent, Issuers, Guarantor an_4
Parent, Issuers, Guarantor and Non Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Assets | ||||
Cash and cash equivalents | $ 77,295 | $ 63,759 | $ 86,622 | $ 140,038 |
Trade and other accounts receivable, net | 90,490 | 92,241 | ||
Inventory | 944,338 | 930,855 | ||
Other current assets | 42,960 | 55,223 | ||
Property and equipment, net | 308,357 | 313,717 | 319,558 | |
Goodwill and other intangible assets, net | 608,623 | 618,096 | ||
Other assets | 25,351 | 25,116 | ||
Total assets | 2,097,414 | 2,099,007 | 2,095,038 | |
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 303,241 | 307,752 | ||
Accrued liabilities | 180,287 | 166,527 | ||
Income taxes payable | 2,144 | 2,233 | ||
Long-term debt | 1,774,309 | 1,867,935 | ||
Other liabilities | 30,022 | 20,140 | ||
Deferred income tax liabilities, net | 75,967 | 98,036 | ||
Total liabilities | 2,365,970 | 2,462,623 | ||
Total stockholders’ (deficit) equity | (268,556) | (363,616) | (276,166) | (297,821) |
Total liabilities and stockholders’ (deficit) equity | 2,097,414 | 2,099,007 | ||
Parent | ||||
Assets | ||||
Trade and other accounts receivable, net | 4 | 200 | ||
Other current assets | 2,010 | 11,763 | ||
Property and equipment, net | 8 | 12 | ||
Investment in subsidiaries | 1,368,927 | 1,110,891 | ||
Other assets | 1,325 | 1,538 | ||
Total assets | 1,372,274 | 1,124,404 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 38 | 251 | ||
Due to affiliates | 1,629,411 | 1,487,484 | ||
Accrued liabilities | 234 | 285 | ||
Income taxes payable | 585 | |||
Other liabilities | 10,562 | |||
Total liabilities | 1,640,830 | 1,488,020 | ||
Total stockholders’ (deficit) equity | (268,556) | (363,616) | ||
Total liabilities and stockholders’ (deficit) equity | 1,372,274 | 1,124,404 | ||
Sally Holdings And Sally Capital | ||||
Assets | ||||
Cash and cash equivalents | 10 | 10 | 28,372 | 46,003 |
Other current assets | 111 | 813 | ||
Investment in subsidiaries | 4,044,669 | 3,717,999 | ||
Other assets | 10,242 | 8,116 | ||
Total assets | 4,055,032 | 3,726,938 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 4 | |||
Due to affiliates | 888,141 | 727,856 | ||
Accrued liabilities | 23,019 | 20,108 | ||
Income taxes payable | 1,519 | 1,624 | ||
Long-term debt | 1,773,426 | 1,866,455 | ||
Total liabilities | 2,686,105 | 2,616,047 | ||
Total stockholders’ (deficit) equity | 1,368,927 | 1,110,891 | ||
Total liabilities and stockholders’ (deficit) equity | 4,055,032 | 3,726,938 | ||
Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 29,050 | 22,090 | 22,368 | 58,851 |
Trade and other accounts receivable, net | 53,295 | 59,992 | ||
Due from affiliates | 2,598,681 | 2,289,371 | ||
Inventory | 714,000 | 709,890 | ||
Other current assets | 27,422 | 26,144 | ||
Property and equipment, net | 232,941 | 230,069 | ||
Investment in subsidiaries | 380,166 | 386,681 | ||
Goodwill and other intangible assets, net | 459,348 | 468,118 | ||
Other assets | (4,797) | (7,837) | ||
Total assets | 4,490,106 | 4,184,518 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 233,936 | 243,818 | ||
Accrued liabilities | 125,179 | 113,628 | ||
Long-term debt | 1 | 1 | ||
Other liabilities | 15,250 | 16,008 | ||
Deferred income tax liabilities, net | 71,071 | 93,064 | ||
Total liabilities | 445,437 | 466,519 | ||
Total stockholders’ (deficit) equity | 4,044,669 | 3,717,999 | ||
Total liabilities and stockholders’ (deficit) equity | 4,490,106 | 4,184,518 | ||
Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 48,235 | 41,659 | $ 35,882 | $ 35,184 |
Trade and other accounts receivable, net | 37,191 | 32,049 | ||
Inventory | 230,338 | 220,965 | ||
Other current assets | 13,417 | 16,503 | ||
Property and equipment, net | 75,408 | 83,636 | ||
Goodwill and other intangible assets, net | 149,275 | 149,978 | ||
Other assets | 18,581 | 23,299 | ||
Total assets | 572,445 | 568,089 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 69,267 | 63,679 | ||
Due to affiliates | 81,129 | 74,031 | ||
Accrued liabilities | 31,855 | 32,506 | ||
Income taxes payable | 40 | 609 | ||
Long-term debt | 882 | 1,479 | ||
Other liabilities | 4,210 | 4,132 | ||
Deferred income tax liabilities, net | 4,896 | 4,972 | ||
Total liabilities | 192,279 | 181,408 | ||
Total stockholders’ (deficit) equity | 380,166 | 386,681 | ||
Total liabilities and stockholders’ (deficit) equity | 572,445 | 568,089 | ||
Consolidating Eliminations | ||||
Assets | ||||
Due from affiliates | (2,598,681) | (2,289,371) | ||
Investment in subsidiaries | (5,793,762) | (5,215,571) | ||
Total assets | (8,392,443) | (7,504,942) | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Due to affiliates | (2,598,681) | (2,289,371) | ||
Total liabilities | (2,598,681) | (2,289,371) | ||
Total stockholders’ (deficit) equity | (5,793,762) | (5,215,571) | ||
Total liabilities and stockholders’ (deficit) equity | $ (8,392,443) | $ (7,504,942) |
Parent, Issuers, Guarantor an_5
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, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | $ 965,997 | $ 996,283 | $ 975,321 | $ 994,964 | $ 974,195 | $ 998,043 | $ 966,470 | $ 999,609 | $ 3,932,565 | $ 3,938,317 | $ 3,952,618 |
Cost of goods sold | 1,988,152 | 1,973,422 | 1,988,678 | ||||||||
Gross profit | $ 478,092 | $ 493,370 | $ 486,322 | $ 486,629 | $ 482,442 | $ 502,639 | $ 488,106 | $ 491,708 | 1,944,413 | 1,964,895 | 1,963,940 |
Selling, general and administrative expenses | 1,484,209 | 1,463,619 | 1,465,643 | ||||||||
Restructuring charges | 33,615 | 22,679 | |||||||||
Operating earnings | 426,589 | 478,597 | 498,297 | ||||||||
Interest expense (income) | 98,162 | 132,899 | 144,237 | ||||||||
Earnings before provision for income taxes | 328,427 | 345,698 | 354,060 | ||||||||
Provision (benefit) for income taxes | 70,380 | 130,622 | 131,118 | ||||||||
Net earnings | 258,047 | 215,076 | 222,942 | ||||||||
Other comprehensive income (loss), net of tax | (8,155) | 18,215 | (22,346) | ||||||||
Total comprehensive income | 249,892 | 233,291 | 200,596 | ||||||||
Parent | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Selling, general and administrative expenses | 10,957 | 10,939 | 11,905 | ||||||||
Operating earnings | (10,957) | (10,939) | (11,905) | ||||||||
Earnings before provision for income taxes | (10,957) | (10,939) | (11,905) | ||||||||
Provision (benefit) for income taxes | (2,734) | (4,246) | (4,638) | ||||||||
Equity in earnings of subsidiaries, net of tax | 266,270 | 221,769 | 230,209 | ||||||||
Net earnings | 258,047 | 215,076 | 222,942 | ||||||||
Total comprehensive income | 258,047 | 215,076 | 222,942 | ||||||||
Sally Holdings And Sally Capital | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Selling, general and administrative expenses | 1,538 | 526 | 364 | ||||||||
Operating earnings | (1,538) | (526) | (364) | ||||||||
Interest expense (income) | 98,332 | 132,696 | 144,229 | ||||||||
Earnings before provision for income taxes | (99,870) | (133,222) | (144,593) | ||||||||
Provision (benefit) for income taxes | (28,787) | (51,726) | (56,161) | ||||||||
Equity in earnings of subsidiaries, net of tax | 337,353 | 303,265 | 318,641 | ||||||||
Net earnings | 266,270 | 221,769 | 230,209 | ||||||||
Other comprehensive income (loss), net of tax | 2,449 | (1,084) | |||||||||
Total comprehensive income | 268,719 | 220,685 | 230,209 | ||||||||
Guarantor Subsidiaries | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | 3,152,120 | 3,209,039 | 3,219,812 | ||||||||
Related party sales | 2,294 | 2,501 | 2,666 | ||||||||
Cost of goods sold | 1,581,385 | 1,590,184 | 1,595,187 | ||||||||
Gross profit | 1,573,029 | 1,621,356 | 1,627,291 | ||||||||
Selling, general and administrative expenses | 1,136,312 | 1,130,615 | 1,151,071 | ||||||||
Restructuring charges | 33,615 | 22,679 | |||||||||
Operating earnings | 403,102 | 468,062 | 476,220 | ||||||||
Interest expense (income) | (3) | 6 | (6) | ||||||||
Earnings before provision for income taxes | 403,105 | 468,056 | 476,226 | ||||||||
Provision (benefit) for income taxes | 73,747 | 177,383 | 181,932 | ||||||||
Equity in earnings of subsidiaries, net of tax | 7,995 | 12,592 | 24,347 | ||||||||
Net earnings | 337,353 | 303,265 | 318,641 | ||||||||
Total comprehensive income | 337,353 | 303,265 | 318,641 | ||||||||
Non-Guarantor Subsidiaries | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | 780,445 | 729,278 | 732,806 | ||||||||
Cost of goods sold | 409,061 | 385,739 | 396,157 | ||||||||
Gross profit | 371,384 | 343,539 | 336,649 | ||||||||
Selling, general and administrative expenses | 335,402 | 321,539 | 302,303 | ||||||||
Operating earnings | 35,982 | 22,000 | 34,346 | ||||||||
Interest expense (income) | (167) | 197 | 14 | ||||||||
Earnings before provision for income taxes | 36,149 | 21,803 | 34,332 | ||||||||
Provision (benefit) for income taxes | 28,154 | 9,211 | 9,985 | ||||||||
Net earnings | 7,995 | 12,592 | 24,347 | ||||||||
Other comprehensive income (loss), net of tax | (10,604) | 19,299 | (22,346) | ||||||||
Total comprehensive income | (2,609) | 31,891 | 2,001 | ||||||||
Consolidating Eliminations | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Related party sales | (2,294) | (2,501) | (2,666) | ||||||||
Cost of goods sold | (2,294) | (2,501) | (2,666) | ||||||||
Equity in earnings of subsidiaries, net of tax | (611,618) | (537,626) | (573,197) | ||||||||
Net earnings | (611,618) | (537,626) | (573,197) | ||||||||
Total comprehensive income | $ (611,618) | $ (537,626) | $ (573,197) |
Parent, Issuers, Guarantor an_6
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, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | $ 372,661 | $ 343,286 | $ 354,112 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (86,138) | (89,625) | (148,689) |
Acquisitions, net of cash acquired | (9,175) | (26,141) | |
Net cash used by investing activities | (95,313) | (89,625) | (174,830) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 461,819 | 1,277,250 | 912,000 |
Repayments of long-term debt | (558,599) | (1,216,643) | (938,537) |
Debt issuance costs | (1,151) | (8,376) | (12,748) |
Payments for common stock repurchased | (166,701) | (346,873) | (209,072) |
Proceeds from exercises of stock options | 1,350 | 17,339 | 16,220 |
Net cash used by financing activities | (263,282) | (277,303) | (232,137) |
Effect of foreign exchange rate changes on cash and cash equivalents | (530) | 779 | (561) |
Net increase (decrease) in cash and cash equivalents | 13,536 | (22,863) | (53,416) |
Cash and cash equivalents, beginning of period | 63,759 | 86,622 | 140,038 |
Cash and cash equivalents, end of period | 77,295 | 63,759 | 86,622 |
Parent | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | 23,424 | 4,095 | 192,868 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (16) | ||
Net cash used by investing activities | (16) | ||
Cash Flows from Financing Activities: | |||
Payments for common stock repurchased | (166,701) | (346,873) | (209,072) |
Proceeds from exercises of stock options | 1,350 | 17,339 | 16,220 |
Due to affiliates | 141,927 | 325,439 | |
Net cash used by financing activities | (23,424) | (4,095) | (192,852) |
Sally Holdings And Sally Capital | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | (62,948) | (72,779) | 20,902 |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 461,814 | 1,277,250 | 912,000 |
Repayments of long-term debt | (558,000) | (1,215,940) | (937,785) |
Debt issuance costs | (1,151) | (8,376) | (12,748) |
Due to affiliates | 160,285 | (8,517) | |
Net cash used by financing activities | 62,948 | 44,417 | (38,533) |
Net increase (decrease) in cash and cash equivalents | (28,362) | (17,631) | |
Cash and cash equivalents, beginning of period | 10 | 28,372 | 46,003 |
Cash and cash equivalents, end of period | 10 | 10 | 28,372 |
Guarantor Subsidiaries | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | 384,958 | 386,604 | 107,289 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (68,689) | (64,000) | (117,539) |
Acquisitions, net of cash acquired | (26,141) | ||
Due from affiliates | (309,310) | (322,866) | |
Net cash used by investing activities | (377,999) | (386,866) | (143,680) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 5 | ||
Repayments of long-term debt | (4) | (16) | (92) |
Net cash used by financing activities | 1 | (16) | (92) |
Net increase (decrease) in cash and cash equivalents | 6,960 | (278) | (36,483) |
Cash and cash equivalents, beginning of period | 22,090 | 22,368 | 58,851 |
Cash and cash equivalents, end of period | 29,050 | 22,090 | 22,368 |
Non-Guarantor Subsidiaries | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | 27,227 | 25,366 | 33,053 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (17,449) | (25,625) | (31,134) |
Acquisitions, net of cash acquired | (9,175) | ||
Net cash used by investing activities | (26,624) | (25,625) | (31,134) |
Cash Flows from Financing Activities: | |||
Repayments of long-term debt | (595) | (687) | (660) |
Due to affiliates | 7,098 | 5,944 | |
Net cash used by financing activities | 6,503 | 5,257 | (660) |
Effect of foreign exchange rate changes on cash and cash equivalents | (530) | 779 | (561) |
Net increase (decrease) in cash and cash equivalents | 6,576 | 5,777 | 698 |
Cash and cash equivalents, beginning of period | 41,659 | 35,882 | 35,184 |
Cash and cash equivalents, end of period | 48,235 | 41,659 | $ 35,882 |
Consolidating Eliminations | |||
Cash Flows from Investing Activities: | |||
Due from affiliates | 309,310 | 322,866 | |
Net cash used by investing activities | 309,310 | 322,866 | |
Cash Flows from Financing Activities: | |||
Due to affiliates | (309,310) | (322,866) | |
Net cash used by financing activities | $ (309,310) | $ (322,866) |
Recent Restructuring Plans (Det
Recent Restructuring Plans (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2017Office | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Changes in restructuring reserve | |||
Restructuring charges | $ 33,615 | $ 22,679 | |
2017 Restructuring Plan | |||
Restructuring Plan | |||
Number of administrative offices closed | Office | 4 | ||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 3,842 | ||
Expenses Paid or Otherwise Settled | 2,682 | ||
Adjustments | 838 | ||
Restructuring reserve, ending balance | 322 | 3,842 | |
2017 Restructuring Plan | Workforce reductions | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 1,860 | ||
Expenses Paid or Otherwise Settled | 1,346 | ||
Adjustments | 322 | ||
Restructuring reserve, ending balance | 192 | 1,860 | |
2017 Restructuring Plan | Facility closures | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 1,747 | ||
Expenses Paid or Otherwise Settled | 1,101 | ||
Adjustments | 516 | ||
Restructuring reserve, ending balance | 130 | 1,747 | |
2017 Restructuring Plan | Other | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 235 | ||
Expenses Paid or Otherwise Settled | 235 | ||
Restructuring reserve, ending balance | $ 235 | ||
2018 Restructuring Plan | |||
Changes in restructuring reserve | |||
Restructuring charges | 33,615 | ||
Expenses Paid or Otherwise Settled | 24,818 | ||
Restructuring reserve, ending balance | 8,797 | ||
2018 Restructuring Plan | Workforce reductions | |||
Changes in restructuring reserve | |||
Restructuring charges | 15,623 | ||
Expenses Paid or Otherwise Settled | 12,179 | ||
Restructuring reserve, ending balance | 3,444 | ||
2018 Restructuring Plan | Other | |||
Changes in restructuring reserve | |||
Restructuring charges | 7,127 | ||
Expenses Paid or Otherwise Settled | 4,861 | ||
Restructuring reserve, ending balance | 2,266 | ||
2018 Restructuring Plan | Consulting | |||
Changes in restructuring reserve | |||
Restructuring charges | 10,865 | ||
Expenses Paid or Otherwise Settled | 7,778 | ||
Restructuring reserve, ending balance | $ 3,087 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 965,997 | $ 996,283 | $ 975,321 | $ 994,964 | $ 974,195 | $ 998,043 | $ 966,470 | $ 999,609 | $ 3,932,565 | $ 3,938,317 | $ 3,952,618 |
Gross profit | 478,092 | 493,370 | 486,322 | 486,629 | 482,442 | 502,639 | 488,106 | 491,708 | 1,944,413 | 1,964,895 | 1,963,940 |
Net earnings | $ 55,186 | $ 58,226 | $ 61,371 | $ 83,264 | $ 35,719 | $ 66,539 | $ 56,992 | $ 55,826 | $ 258,047 | $ 215,076 | $ 222,942 |
Earnings per share: | |||||||||||
Basic | $ 0.46 | $ 0.48 | $ 0.49 | $ 0.65 | $ 0.27 | $ 0.49 | $ 0.41 | $ 0.39 | $ 2.09 | $ 1.56 | $ 1.51 |
Diluted | $ 0.46 | $ 0.48 | $ 0.49 | $ 0.65 | $ 0.27 | $ 0.49 | $ 0.40 | $ 0.39 | $ 2.08 | $ 1.56 | $ 1.50 |