SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED:
December 31, 1994
- OR -
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 1-5050
ALBERTO-CULVER COMPANY
(Exact name of registrant as specified in its charter)
Delaware 36-2257936
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
2525 Armitage Avenue
Melrose Park, Illinois 60160
(Address of principal executive offices) (Zipcode)
Registrant's telephone number, including area code: (708) 450-3000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. YES X NO
At December 31, 1994, there were 10,940,209 shares of Class A common stock
outstanding and 16,766,240 shares of Class B common stock outstanding.
PART I
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Statements of Earnings
Three Months Ended December 31, 1994 and 1993
(dollar amounts in thousands, except per share figures)
<CAPTION>
(Unaudited)
1994 1993
<S> <C> <C>
Net sales $ 311,474 284,570
Costs and expenses:
Cost of products sold 155,548 141,166
Advertising, promotion,
selling and administrative 136,840 127,884
Interest expense, net of interest income
of $466 in 1994 and $595 in 1993 1,174 1,760
Total costs and expenses 293,562 270,810
Earnings before provision for income taxes 17,912 13,760
Provision for income taxes 6,717 5,229
Net earnings $ 11,195 8,531
Net earnings per share of common stock $ .40 .30
Cash dividends paid per share $ .070 .065
</TABLE>
See notes to consolidated financial statements
<TABLE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1994 and September 30, 1994
(dollar amounts in thousands, except per share figures)
<CAPTION>
(Unaudited)
December 31, September 30,
ASSETS 1994 1994
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 49,589 41,833
Short-term investments 10,328 8,529
Receivable, less allowance for doubtful
accounts ($5,818 at 12/31/94 and $5,497
at 9/30/94) 104,400 108,877
Inventories (Note 3) 232,976 231,119
Other current assets 13,252 11,339
Total current assets 410,545 401,757
Property, plant and equipment as cost, less
accumulated depreciation ($114,483 at 12/31/94
and $110,351 at 9/30/94) 133,051 132,881
Goodwill, net 44,249 44,307
Trade names and other intangible assets, net 9,818 9,960
Other assets 22,886 21,303
Total assets $620,549 610,208
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt
and short-term borrowings $ 31,894 32,819
Accounts payable 109,768 110,122
Accrued expenses 62,243 64,754
Income taxes 14,578 8,315
Total current liabilities 218,483 216,010
Long-term debt 43,627 42,976
Deferred income taxes 14,262 14,780
Other liabilities 9,590 9,472
Stockholders' equity:
Common stock, par value $.22 per share:
Class A authorized 25,000,000 shares;
issued 13,262,624 shares 2,918 2,918
Class B authorized 25,000,000 shares;
issued 20,944,424 shares 4,608 4,608
Additional paid-in capital 87,729 87,452
Retained earnings 302,702 293,445
Foreign currency translation (14,028) (11,793)
Less treasury stock at cost (Class A
common shares: 2,322,415 at 12/31/94 and
2,348,426 at 9/30/94; Class B common
shares: 4,178,184 at 12/31/94 and
at 9/30/94) 49,342 49,660
Total stockholders'equity 334,587 326,970
Total liabilities and stockholders' equity $620,549 610,208
</TABLE>
See notes to consolidated financial statements.
<TABLE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three months Ended December 31, 1994 and 1993
(dollar amounts in thousands)
<CAPTION>
(Unaudited)
1994 1993
<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings $11,195 8,531
Adjustments to reconcile net
cash provided by operating activities:
Depreciation and amortization 5,451 4,904
Other, net (1,218) 1,870
Cash effects of changes in:
Receivables, net 3,805 9,094
Inventories (1,938) (18,831)
Other current assets (1,905) (2,080)
Accounts payable and accrued expenses (2,463) 4,785
Income taxes 5,616 484
Net cash provided by operating activities 18,543 8,757
Cash Flows from Investing Activities:
Short-term investments (1,840) (1,136)
Capital expenditures (4,925) (6,973)
Payments for purchased businesses, net of
acquired companies' cash (283) (5,447)
Proceeds from sale of business, net of disposed
company's cash -- 1,592
Other, net (1,305) 414
Net cash used by investing activities (8,353) (11,550)
Cash Flows from Financing Activities:
Short-term borrowings (910) (559)
Proceeds from long-term debt 677 245
Repayments of long-term debt (231) (237)
Cash dividends paid (1,938) (1,838)
Cash proceeds from exercise of stock options 124 669
Stock purchased for treasury 0 (2,003)
Net cash usedby financing activities (2,278) (3,723)
Effect of foreign exchange rate changes on cash (156) (461)
Net increase (decrease) in cash and cash equivalents 7,756 (6,977)
Cash and cash equivalents at beginning of period 41,833 65,747
Cash and cash equivalents at end of period $49,589 58,770
</TABLE>
See notes to consolidated financial statements.
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(l) The consolidated financial statements contained in this report have not
been examined by independent public accountants, except for balance sheet
information presented at September 30, 1994. However, in the opinion of the
company, the consolidated financial statements reflect all adjustments, which
include only normal adjustments, necessary to present fairly the data contained
therein. The results of operations for the periods covered are not necessarily
indicative of results for a full year.
(2) For the three months ended December 31, 1994 and 1993, earnings per
share figures were calculated using the weighted average number of common shares
outstanding of 27,772,000 and 28,293,000 respectively.
(3) Inventories consist of the following:
(in thousands)
December 31, September 30,
1994 1993
Finished goods $197,622 195,633
Work-in-process 5,589 5,868
Raw Materials 29,765 29,618
$232,976 231,119
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
FIRST QUARTER ENDED DECEMBER 31, 1994 VS. FIRST QUARTER ENDED DECEMBER 31, 1993
The company achieved record first quarter net sales of $311.5 million in fiscal
year 1995, up $26.9 million or 9.5% over the comparable period of fiscal year
1994. Net earnings for the three months ended December 31, 1994 were also a
record for the first quarter at $11.2 million or 31.2% higher than the same
period of the prior year. Earnings per share of 40 cents was 10 cents or 33.3%
higher than the same period last year.
The following table presents net sales information by business segment for the
first quarter of fiscal years 1995 and 1994:
FIRST QUARTER
(dollars in millions)
Fiscal Year Percent
Net sales: 1995 1994 Change Change
Mass marketed personal
use products $121.0 116.0 5.0 4.3%
Institutional products 24.2 23.4 0.8 3.4
Other products - Sally 168.6 148.1 20.5 13.8
Eliminations (2.3) (2.9) 0.6 20.7
Total $311.5 284.6 26.9 9.5%
Compared to the same period of the prior year, sales of the "mass marketed
personal use products" business segment increased $5.0 million or 4.3% for the
December 31, 1994 quarter. Sales increases were recorded for such brands as
Alberto VO5 shampoo, Alberto VO5 conditioner, Static Guard anti-static spray and
Tresemme and Consort retail hair care products. These increases were partially
offset by lower sales principally for Village Saucerie sauce and recipe mixes,
TCB retail hair care products and Alberto Styling hair care products.
International sales, which were flat in local currencies, benefitted from
favorable foreign exchange rates this year, resulting in a slight sales
increase.
Sales of the "institutional products" business segment were $24.2 million for
the current quarter, an increase of 3.4% compared to last year. The slight
increase on fiscal year 1995 was principally attributable to increased sales of
institutional hair care products in Europe partially offset by lower sales in
the U.S. for TCB institiutional hair care products.
The "other products - Sally" business segment experienced a sales increase of
$20.5 million or 13.8%, reaching $168.6 million for the quarter ended December
31, 1994. The gain was attributable to Sally Beauty Company's sales growth for
established stores and the addition of 128 new stores since December 31, 1993.
Sally Beauty Company operates 1,386 beauty supply stores offering a full range
of salon care products.
Cost of products sold as a percent of net sales for the three month period
ended December 31, 1994 increased 0.3% compared to the first quarter of the
prior year principally due to the sales growth of Sally Beauty Company which
has a relatively higher cost of sales percentage.
Advertising, promotion, selling and administrative expenses rose 7.0% or $9.0
million for the December 31, 1994 quarter versus the comparable period of the
prior year. The increase was mainly attributable to higher selling and
administrative costs associated with the increase in the number of Sally Beauty
Company stores partially offset by lower advertising and promotion expenditures
for mass marketed personal use products. Advetising, promotion and market
research expenditures totaled $41.7 million for the current period versus $43.1
million for the comparable period of the prior year. The decrease in 1995 was
primarily due to lower expenditures in the current year for certain products
which were introduced in the prior year.
Interest expense was $1.6 million fo the first quarter of fiscal year 1995
versus $2.4 million for the comparable prior period. The decrease was primarily
attributable to a 28.6% decrease in total borrowings at December 31, 1994 as
compared to the prior year. Interest income of $466,000 for the quarter ended
December 31, 1994 was $129,000 lower than last year mainly due to lower
investment balances and interest rates.
The provision for income taxes as a percentage of earnings before income taxes
was 37.5% and 38.0% for the for the first quarter of fiscal years 1995 and 1994,
respectively.
FINANCIAL CONDITION
DECEMBER 31, 1994 VS. SEPTEMBER 30, 1994
The ratio of current assets to current liabilities was 1.88 to 1.00 at the end
of the first quarter of fiscal years 1995 compared to 1.86 to 1.00 at September
30, 1994.
Working capital increased 3.4% to $192.1 million at December 31, 1994 compared
to September 30, 1994. The increase in working capital resulted from earnings
for the quarter, lower accounts payable and accrued expenses and higher other
current assets partially offset by capital expenditures, lower accounts
receivable, higher income taxes payable and the devaluation of the Mexican Peso.
During the first three months of fiscal year 1995, total borrowings decreased
$.3 million. At December 31, 1994, the company had unused lines of credit with
various banks of approximately $97 million.
For the eleventh consecutive year, the company announced an increase in the
quarterly cash dividend on both Class A and Class B common stock, raising it
14.3% to 8 cents per share or 32 cents annually. The dividend is payable
February 20, 1995 to stockholders of record on February 3, 1995.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
No report on Form 8-K was filed by the registrant during the quarter
ended December 31, 1994.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALBERTO-CULVER COMPANY
(Registrant)
By:/s/ William J. Cernugel
William J. Cernugel
Senior Vice President, Finance & Controller
(Principal Financial Officer)
February 9, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from the
consolidated balance sheet as of December 31, 1994 and the consolidated
statement of earnings for the three months ended December 31, 1994 and is
qualified in it entirety by reference to such financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> DEC-31-1994
<CASH> $49,589
<SECURITIES> 10,328
<RECEIVABLES> 110,218
<ALLOWANCES> 5,818
<INVENTORY> 232,976
<CURRENT-ASSETS> 410,545
<PP&E> 247,534
<DEPRECIATION> 114,483
<TOTAL-ASSETS> 620,549
<CURRENT-LIABILITIES> 218,483
<BONDS> 43,627
0
0
<COMMON> 7,526
<OTHER-SE> 327,061
<TOTAL-LIABILITY-AND-EQUITY> 620,549
<SALES> 311,474
<TOTAL-REVENUES> 311,474
<CGS> 155,548
<TOTAL-COSTS> 155,548
<OTHER-EXPENSES> 136,840
<LOSS-PROVISION> 1,072
<INTEREST-EXPENSE> 1,640
<INCOME-PRETAX> 17,912
<INCOME-TAX> 6,717
<INCOME-CONTINUING> 11,195
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,195
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0.40
</TABLE>
