<PAGE>
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-49649
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 4, 1998
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 4 , 1998
$100,000,000
ALBERTO-CULVER COMPANY
% DEBENTURES DUE , 2028
-----------
Interest on the Debentures is payable on and of each year,
commencing , 1998. The Debentures will be redeemable, in whole or in
part, at the option of the Company at any time at a redemption price equal to
(a) prior to , 2008, the greater of (i) 100% of the principal amount of
such Debentures or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including the portion
of any such payments of interest accrued as of the redemption date) up to ,
2008 or (b) from , 2008 to , 2028, the greater of (i) 100% of the
principal amount of such Debentures or (ii) the sum of the present values of
the remaining scheduled payments of principal and interest thereon (not
including the portion of any such payments of interest accrued as of the
redemption date) up to , 2028, discounted, in each case, to the redemption
date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined herein), plus, in each case,
accrued and unpaid interest thereon to the redemption date. The Debentures will
not be entitled to any sinking fund. The registered holder of each Debenture
may elect to have that Debenture, or any portion of the principal amount
thereof that is a multiple of $1,000, repaid on , 2008 at 100% of the
principal amount thereof, together with accrued interest to , 2008. Such
election, which is irrevocable when made, must be made within the period
commencing on , 2008 and ending at the close of business on , 2008.
The Debentures will be represented by one or more global securities in book-
entry form (the "Book-Entry Securities") registered in the name of The
Depository Trust Company ("DTC") or its nominee. Beneficial interests in the
Book-Entry Securities will be shown on, and transfer thereof will be effected
only through, records maintained by DTC and its participants. Except as
described herein and in the accompanying Prospectus, Debentures in definitive
form will not be issued. See "Description of the Debentures."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
-----------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per Debenture...................... % % %
Total.............................. $ $ $
</TABLE>
- -----
(1) Plus accrued interest, if any, from , 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $230,000 payable by the Company.
-----------
The Debentures offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Debentures will be ready for delivery in book-entry form only through the
facilities of DTC in New York, New York, on or about ,1998, against payment
therefor in immediately available funds.
GOLDMAN, SACHS & CO.
BANCAMERICA ROBERTSON STEPHENS
FIRST CHICAGO CAPITAL MARKETS, INC.
-----------
The date of this Prospectus Supplement is , 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN THE DEBENTURES,
AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
S-2
<PAGE>
THE COMPANY
Alberto-Culver Company and its consolidated subsidiaries (herein referred to
collectively as the "Company," unless indicated otherwise) have two principal
business segments. One segment, "Consumer Products," principally includes
developing, manufacturing, distributing and marketing branded consumer
products worldwide and includes the Company's Alberto-Culver USA and Alberto-
Culver International business units. This segment also includes the
manufacturing of custom label products for other companies. The second
segment, "Specialty Distribution--Sally," consists of Sally Beauty Company, a
specialty distributor of professional beauty supplies with over 1,900 stores
as of May 31, 1998 in the United States, Puerto Rico, the United Kingdom,
Canada, Japan and Germany.
The Company's major health and beauty care products in the United States
include the ALBERTO VO5, TRESemme and CONSORT lines of hair care products, the
St. Ives SWISS FORMULA line of hair and skin care products, CORTEXX hair care
products, FDS feminine deodorant sprays and the TCB line of hair care products
for the ethnic market.
Food and household products sold in the United States include MRS. DASH
salt-free seasonings, MOLLY McBUTTER dairy sprinkles, SUGARTWIN sugar
substitute, BAKER'S JOY flour and oil cooking spray and STATIC GUARD anti-
static spray.
The Company's consumer products are sold in more than 120 countries. Through
its Cederroth International subsidiary headquartered in Sweden, the Company
manufactures and markets health and beauty care products throughout
Scandinavia and Europe. Cederroth's major products include SALVEKVICK adhesive
bandages, ALBERTO VO5 hair care products, SAMARIN antacids, SELTIN salt
substitute, LACTACYD liquid soap, TOPZ cotton buds, BLIW liquid soaps, DATE
antiperspirants and cologne for women, FAMILY FRESH shampoo and shower
products, SUKETTER artificial sweetener, HEMANENT home permanents, St. Ives
SWISS FORMULA line of hair and skin care products, HTH and L300 skin care
products and GRUMME TVATTSAPA detergents.
In the United Kingdom, the Company markets, among other products, the
ALBERTO VO5 line of hair care products, the St. Ives SWISS FORMULA line of
hair and skin care products, ALBERTO BALSAM shampoo and conditioner and the
TRESemme line of hair care products. INDOLA professional colors, shampoos,
conditioners and styling products are marketed throughout Europe and other
international markets. Other major international markets include Canada,
Mexico, Puerto Rico, Australia, Italy and New Zealand.
The "Specialty Distribution--Sally" business segment represents the
operations of Sally Beauty Company, Inc. which operates a network of cash-and-
carry professional beauty supply stores and also sells professional beauty
products to hairdressers, beauticians and cosmetologists through its own full-
service distributors. Sally stores provide salon owners, hairdressers and
consumers with an extensive selection of hair care and skin care products,
cosmetics, styling appliances and other beauty items.
RECENT DEVELOPMENTS
The Company has notified Bankers Trust Company ("Bankers Trust"), as trustee
under the indenture dated as of June 30, 1995 between the Company and Bankers
Trust, that the Company would redeem all of its 5.5% Convertible Subordinated
Debentures Due June 30, 2005 (the "Convertible Debentures") effective July 15,
1998 (the "Redemption Date"). Each $1,000 principal amount of Convertible
Debentures outstanding on the close of business on the Redemption Date will be
redeemed for $1,000 plus accrued interest of $2.29. Each holder has the option
to convert their Convertible Debentures into 61.776 shares of Class A Common
Stock per $1,000 principal amount of Convertible Debentures (equivalent to a
conversion price of approximately $16.1875) on or before the close of business
on the Redemption Date. The closing price of the Company's Class A Common
Stock on June 3, 1998 was $27.1875 per share.
S-3
<PAGE>
SELECTED FINANCIAL DATA
The selected financial data below should be read in conjunction with the
consolidated financial statements and notes thereto incorporated by reference
herein. The selected financial data shown below for, and as of the end of,
each of the fiscal years in the five-year period ended September 30, 1997 are
derived from audited consolidated financial statements of the Company. The
selected financial data shown below for, and as of the end of, the six months
ended March 31, 1998 and 1997 are derived from unaudited consolidated
financial statements of the Company. In the opinion of management, the
unaudited consolidated financial statements reflect all adjustments,
consisting only of normal adjustments, necessary for a fair presentation of
such periods. The results of operations for the six months ended March 31,
1998 are not necessarily indicative of the operating results that may be
expected for the full fiscal year.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,
------------------- -------------------------------------------------
(IN THOUSANDS, EXCEPT 1998 1997 1997 1996 1995 1994 1993
PER SHARE AND RATIO DATA) --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net sales............... $ 900,595 865,682 1,775,258 1,590,409 1,358,219 1,216,119 1,147,990
Cost of products sold... 443,810 433,445 880,416 805,080 682,589 602,749 564,260
Interest expense........ 5,626 6,103 11,826 15,905 9,946 8,630 9,661
Earnings before non-
recurring gain and
income taxes (1)....... 62,590 55,073 120,487 100,014 84,242 71,078 65,129
Provision for income
taxes (1).............. 23,315 20,515 44,881 37,270 31,591 27,010 23,857
Net earnings before non-
recurring
gain (1)............... 39,275 34,558 75,606 62,744 52,651 44,068 41,272
Net earnings per share
before
non-recurring gain (1)
(2) (3):
Basic.................. .69 .62 1.35 1.13 .95 .79 .72
Diluted................ .64 .57 1.25 1.06 .94 .79 .72
WEIGHTED AVERAGE SHARES
OUTSTANDING (2) (3):
Basic.................. 56,646 55,866 55,967 55,571 55,430 56,063 57,361
Diluted................ 63,884 63,229 63,377 62,776 57,053 56,083 57,435
FINANCIAL CONDITION:
Ratio of earnings to
fixed charges (4)...... 5.0x 4.7x 4.8x 4.0x 4.3x 4.0x 3.8x
Current ratio........... 2.00 to 1 1.84 to 1 1.86 to 1 1.79 to 1 2.28 to 1 1.86 to 1 2.05 to 1
Working capital......... $ 291,504 256,438 269,007 226,123 301,706 185,747 205,050
Cash, cash equivalents
and short-term
investments............ 83,820 92,937 87,600 71,557 146,985 50,362 73,947
Property, plant and
equipment, net......... 201,991 181,899 190,998 175,920 157,791 132,881 124,449
Total assets............ 1,013,271 968,262 1,000,059 909,266 815,086 610,208 593,046
Long-term debt.......... 46,330 57,125 49,441 61,548 83,094 42,976 80,184
Convertible subordinated
debentures............. 100,000 100,000 100,000 100,000 100,000 -- --
Stockholders' equity.... 534,466 464,992 497,004 425,096 370,903 326,970 298,857
Cash dividends per share
(5).................... .11 .095 .195 .175 .155 .1375 .1375
</TABLE>
- --------
(1) The operating results for the fiscal year ended September 30, 1997 and the
six months ended March 31, 1997 exclude a non-recurring gain from an
insurance settlement for the loss of the Company's corporate airplane.
For the six months ended March 31, 1997, pre-tax earnings including the non-
recurring gain were $70.7 million. Net earnings including the gain were
$44.4 million, after deducting income taxes of $26.3 million, representing
basic earnings per share of $0.80 and diluted earnings per share of $0.73.
For the fiscal year ended September 30, 1997, pre-tax earnings including the
non-recurring gain were $136.1 million. Net earnings including the gain were
$85.4 million, after deducting income taxes of $50.7 million, representing
basic earnings per share of $1.53 and diluted earnings per share of $1.41.
(2) Net earnings per share and weighted average shares outstanding have been
restated to reflect the 100% stock dividend on the Company's Class A and
Class B outstanding shares in February 1997.
(3) Net earnings per share and weighted average shares outstanding have been
restated to comply with Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings Per Share," which the Company adopted in the first
quarter of fiscal year 1998.
S-4
<PAGE>
(4) The ratios of earnings to fixed charges for the fiscal year ended
September 30, 1997 and the six months ended March 31, 1997 exclude the
non-recurring gain discussed in Note (1) above. Including the non-
recurring gain, the ratio of earnings to fixed charges was 5.3x for the
fiscal year ended September 30, 1997 and 5.7x for the six months ended
March 31, 1997.
(5) Dividends per share on Class A Common Stock and Class B Common Stock have
been equal since the Class A shares were issued in April 1986. Dividends
paid in fiscal 1993 include a one-time extraordinary dividend of one cent
per share in recognition of the Company surpassing one billion dollars in
sales for the fiscal year ended September 30, 1992.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Debentures are
estimated to be approximately $ million. The Company expects to use such
proceeds for potential acquisitions if suitable opportunities arise, for
repurchases of Class A Common Stock under the Company's stock repurchase
program and for general corporate purposes. Pending the application of the net
proceeds for such purposes, the Company may invest such proceeds in short-
term, marketable securities. See "Capitalization."
S-5
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of March 31, 1998 and "as adjusted" to give effect to the issuance
by the Company of the Debentures offered hereby. The table should be read in
conjunction with the consolidated financial statements of the Company and
related notes thereto incorporated by reference in the Prospectus. See "Use of
Proceeds."
<TABLE>
<CAPTION>
(UNAUDITED)
MARCH 31, 1998
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Current maturities of long-term debt and short-term
borrowings.............................................. $ 3,730 3,730
======== =======
Long-term debt, excluding current maturities:
5.5% convertible subordinated debentures due June, 2005
(1)................................................... $100,000 100,000
6.2% term note due September, 2000..................... 20,000 20,000
Revolving Swedish krona credit agreement............... 23,907 23,907
Revolving credit facility (2).......................... -- --
Debentures due 2028 offered hereby..................... -- 100,000
Other.................................................. 2,423 2,423
-------- -------
Total long-term debt................................. 146,330 246,330
-------- -------
Stockholders' equity:
Common stock, par value $.22 per share:
Class A authorized 75,000,000 shares; issued
24,442,931
shares (3).......................................... 5,378 5,378
Class B authorized 75,000,000 shares; issued
37,710,664 shares................................... 8,296 8,296
Additional paid-in capital............................. 96,550 96,550
Retained earnings...................................... 491,949 491,949
Foreign currency translation........................... (27,583) (27,583)
Treasury stock, at cost (Class A Common Stock--
1,117,036 shares; Class B Common Stock--4,178,184
shares) (4)........................................... (40,124) (40,124)
-------- -------
Total stockholders' equity........................... 534,466 534,466
-------- -------
Total capitalization..................................... $680,796 780,796
======== =======
</TABLE>
- --------
(1) The Convertible Debentures are convertible into Class A Common Stock at a
conversion rate of 61.776 shares of Class A Common Stock per $1,000 of
principal amount of Convertible Debentures (equivalent to a conversion
price of approximately $16.1875). The Convertible Debentures will be
called for redemption effective July 15, 1998. See "Recent Developments."
(2) The Company has a $200 million revolving credit facility which expires
September 2002. The facility, which has no outstanding balance at March
31, 1998, can be increased to $300 million under certain circumstances and
may be drawn in U.S. dollars or certain foreign currencies.
(3) Does not include (a) 3,293,021 shares of Class A Common Stock issuable
upon the exercise of outstanding employee and director stock options as of
March 31, 1998 or (b) 6,177,600 shares of Class A Common Stock issuable
upon conversion of the Convertible Debentures discussed in note (1) above
assuming holders convert all such Convertible Debentures.
(4) As of March 31, 1998 and reflected in the above capitalization table, the
Company purchased 94,300 shares of Class A Common Stock under its
3,000,000 share buyback program. From April 1, 1998 through June 3, 1998,
the Company acquired an additional 1,364,900 shares of Class A Common
Stock. In addition, the Company purchased 385,000 shares of Class B Common
Stock in April 1998. The total cost of the share purchases since April 1,
1998 was $47.6 million.
S-6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The following is a discussion of the historical results of operations and
financial condition of the Company and has been excerpted from the
Management's Discussion and Analysis of Results of Operations and Financial
Condition filed in the Company's Form 10-Q for the quarter ended March 31,
1998 and Form 10-K for the fiscal year ended September 30, 1997. The earnings
per share information included in the discussion of the results of operations
for the fiscal years ended September 30, 1997, 1996 and 1995 has been restated
to comply with SFAS No. 128, "Earnings Per Share," which the Company adopted
in the first quarter of fiscal year 1998.This discussion should be read in
conjunction with, and is qualified in its entirety by, the historical
consolidated financial statements of the Company, related notes thereto and
the complete Management's Discussion and Analysis of Results of Operations and
Financial Condition thereto in the appropriate Form 10-Q or Form 10-K which
are incorporated by reference herein.
RESULTS OF OPERATIONS
Three and Six Months Ended March 31, 1998 and 1997
The Company achieved record net sales of $455.2 million in the second
quarter of fiscal year 1998, up $15.6 million or 3.6% over the comparable
quarter of fiscal year 1997. For the six month period ending March 31, 1998,
net sales reached a new high of $900.6 million, representing a 4.0% increase
compared to last year's six month period.
During the first quarter of fiscal year 1997, the Company received a $28.0
million insurance settlement from the loss of its corporate airplane. As a
result, the Company recognized a non-recurring pre-tax gain of $15.6 million
and an increase to net earnings of $9.8 million. Accordingly, last year's
basic earnings per share for the first half increased 18 cents and diluted
earnings per share increased 16 cents as a result of the non-recurring gain.
Net earnings for the three months ended March 31, 1998 were also a record
for the second quarter at $19.6 million or 10.1% higher than the same period
of the prior year. Basic earnings per share of 34 cents were 2 cents or 6.3%
higher than the same period last year. Diluted earnings per share were 32
cents, up 3 cents or 10.3% from the prior year.
On a pro-forma basis for the six months ended March 31, 1998, net earnings
before the non-recurring gain were a record at $39.3 million or 13.6% higher
than the same period of the prior year. Pro-forma basic earnings per share
were 69 cents, representing a 7 cent or 11.3% increase over last year. Pro-
forma diluted earnings per share increased 7 cents or 12.3% to 64 cents.
The following table presents net sales information by business segment for
the second quarter and first six months of fiscal years 1998 and 1997 (dollars
in millions):
<TABLE>
<CAPTION>
FISCAL YEAR
SECOND QUARTER ------------- DOLLAR PERCENT
1998 1997 CHANGE CHANGE
------ ----- ------ -------
<S> <C> <C> <C> <C>
Net sales:
Consumer Products:
Alberto-Culver USA............................ $105.5 117.2 (11.7) (10.0)%
Alberto-Culver International.................. 111.9 110.2 1.7 1.5
------ ----- -----
Total Consumer Products....................... 217.4 227.4 (10.0) (4.4)
Specialty Distribution--Sally................... 241.6 215.6 26.0 12.1
Eliminations.................................... (3.8) (3.4) (0.4) (10.0)
------ ----- -----
$455.2 439.6 15.6 3.6%
====== ===== =====
</TABLE>
S-7
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR
SIX MONTHS ------------- DOLLAR PERCENT
1998 1997 CHANGE CHANGE
------ ----- ------ -------
<S> <C> <C> <C> <C>
Net sales:
Consumer Products:
Alberto-Culver USA............................ $211.7 224.8 (13.1) (5.8)%
Alberto-Culver International.................. 224.4 223.1 1.3 0.6
------ ----- -----
Total Consumer Products....................... 436.1 447.9 (11.8) (2.6)
Specialty Distribution--Sally................... 472.4 424.3 48.1 11.3
Eliminations.................................... (7.9) (6.5) (1.4) (20.8)
------ ----- -----
$900.6 865.7 34.9 4.0%
====== ===== =====
</TABLE>
Compared to the same periods of the prior year, sales of Alberto-Culver USA
consumer products decreased 10.0% and 5.8% for the current quarter and first
half of fiscal 1998, respectively. The 1998 decreases were primarily due to
lower sales for custom label filling operations and ALBERTO VO5 hair care
products, partially offset by higher sales of the TRESemme and TCB hair care
lines and St. Ives SWISS FORMULA lotions.
Sales of Alberto-Culver International consumer products increased 1.5% in
the second quarter and 0.6% in the first half compared to last year. The
fiscal 1998 results were negatively impacted by the effect of foreign exchange
rates. Had foreign exchange rates this year been the same as the second
quarter and first half of fiscal 1997, Alberto-Culver International sales
would have increased 8.1% in the second quarter and 8.0% for the first half
primarily due to strong sales increases in Latin America, Europe and
Scandinavia.
The "Specialty Distribution--Sally" business segment experienced sales
increases of $26.0 million or 12.1% for the second quarter of fiscal 1998 and
$48.1 million or 11.3% for the first half. The gains were attributable to
higher sales for established Sally Beauty Company outlets, the addition of new
stores during the year and the expansion of Sally's full service and foreign
operations. At March 31, 1998, Sally Beauty Company had 1,926 stores offering
a full range of professional beauty supplies.
Cost of products sold as a percent of net sales was 49.6% for the second
quarter of 1998 and 1997. Cost of products sold as a percent of net sales for
the first half decreased to 49.3% compared to 50.1% in the prior year. The
decrease for the first half was primarily due to cost savings and a change in
product mix favoring higher margin products for Alberto-Culver USA.
Compared to the prior year, advertising, promotion, selling and
administrative expenses rose 2.6% or $4.9 million for the second quarter and
4.6% or $17.2 million for the six months ended March 31, 1998. The second
quarter increase resulted from higher selling and administrative costs
associated with the increase in the number of Sally Beauty Company stores and
a charge to provide for the closing of a Cederroth manufacturing facility in
Holland. In addition, first half expenses were higher due to increased
advertising, promotion and market research expenses.
Advertising, promotion and market research expenditures totaled $63.3
million in the second quarter of 1998, a decrease of 0.2% versus the prior
year. Advertising, promotion and market research expenditures for the first
half of fiscal year 1998 were $125.4 million, an increase of 5.0% over last
year. The first half increase was primarily due to higher expenditures for
Alberto-Culver USA and Alberto-Culver International, principally in Latin
America, Europe and Canada.
Interest expense decreased $142,000 or 4.9% for the second quarter and
$477,000 or 7.8% for the first half versus the comparable periods of last
year. The decreases were primarily attributable to a reduction in outstanding
revolving debt and the effect of foreign exchange rates. Interest income
S-8
<PAGE>
decreased $238,000 or 27.8% in the second quarter and $262,000 or 15.9% in the
first half versus the same periods of fiscal 1997. The decreases principally
resulted from lower investment balances in fiscal 1998.
The provision for income taxes as a percentage of earnings before income
taxes was 37.25% for the second quarter and first half of fiscal years 1998
and 1997.
Fiscal Years Ended September 30, 1997, 1996 and 1995
Fiscal year 1997 marked the Company's fourteenth consecutive year of record
sales. Net sales for the year ended September 30, 1997 were $1.78 billion, an
increase of 11.6% over prior year sales of $1.59 billion. Net sales in 1995
were $1.36 billion.
Record net earnings of $85.4 million in 1997, including a non-recurring
gain, increased 36.1% from 1996 net earnings of $62.7 million. Basic earnings
per share of $1.53 were 40 cents or 35.4% higher than 1996. Diluted earnings
per share were $1.41, an increase of 35 cents or 33.0 % from 1996. Net
earnings in 1995 were $52.7 million, representing basic earnings per share of
95 cents and diluted earnings per share of 94 cents.
During fiscal year 1997, the Company received a $28.0 million insurance
settlement from the loss of its corporate airplane. As a result, the Company
recognized a non-recurring pre-tax gain of $15.6 million and an increase in
net earnings of $9.8 million. Accordingly, basic earnings per share for fiscal
year 1997 increased 18 cents and diluted earnings per share increased 16
cents.
On a pro-forma basis, net earnings before the non-recurring gain were a
record $75.6 million or 20.5% higher than fiscal year 1997. Excluding the
gain, pro-forma basic earnings per share were $1.35, representing an increase
of 22 cents or 19.5%, while diluted earnings per share increased 19 cents or
17.9% to $1.25.
Prior to 1996, the Consumer Products Division of Alberto-Culver USA recorded
certain promotional allowances that were shown as a deduction from the list
price reported on customer invoices as promotion expenses. Effective October
1, 1995, the division changed its method of reporting to a net sales basis
thereby reducing sales and promotion expense by $12.6 million for 1996. This
change had no effect on net income and prior periods have not been
reclassified due to immateriality. The change is in conformity with industry
practice and also provides management with financial information that is
consistent across other divisions of Alberto-Culver USA and Alberto-Culver
International.
Sales of Alberto-Culver USA consumer products in 1997 were $444.2 million,
an increase of
17.7 % from prior year sales of $377.5 million. The 1997 increase primarily
resulted from higher sales of St. Ives SWISS FORMULA products in addition to
sales increases for TRESemme, TCB, MRS. DASH, ALBERTO VO5 Hot Oil and the
introduction of new products. In 1996, sales increased 23.5% from 1995 sales
of $305.7 million primarily due to the acquisition of St. Ives, which added
$87.7 million of sales, partially offset by lower sales due to the change in
the classification of certain off-invoice promotional allowances. St. Ives
Laboratories, Inc. was acquired in February, 1996.
Alberto-Culver International consumer products sales were $466.5 million in
1997 compared to $452.0 million in 1996 and $363.3 million in 1995. The fiscal
year 1997 sales increase of 3.2% was mainly due to higher sales of St. Ives
products, offset in part by the effects of unfavorable foreign exchange rates
due to the strengthening of the U.S. dollar. Had foreign exchange rates this
year been the same as fiscal year 1996, Alberto-Culver International sales
would have increased 8.3% for the year. The sales increase in 1996 primarily
resulted from the acquisition of St. Ives.
Sales of the "Specialty Distribution--Sally" business segment increased to
$879.2 million in 1997 compared to $771.9 million and $697.7 million in 1996
and 1995, respectively. The sales increases of
S-9
<PAGE>
13.9% in 1997 and 10.6% in 1996 were attributable to sales gains for
established Sally Beauty Company outlets, the addition of stores during the
year and the expansion of Sally's full service operations. The number of Sally
stores increased 34.5% during the last three years to a total of 1,833 at the
end of 1997 compared to 1,656 and 1,494 at the end of 1996 and 1995,
respectively.
Cost of products sold as a percentage of sales was 49.6% in fiscal year 1997
compared to 50.6% in 1996 and 50.3% in 1995. The lower cost of products sold
percentage in 1997 was primarily due to cost savings and a change in product
mix favoring higher margin products of Alberto-Culver USA.
Advertising, promotion, selling and administrative expenses increased 13.8 %
in 1997 and 15.1% in 1996. The increase in 1997 resulted from the acquisition
of St. Ives, higher selling and administration costs associated with the
growth of the Sally Beauty business and higher advertising, promotion and
market research expenses for Alberto-Culver USA. The 1996 increase resulted
primarily from the acquisition of St. Ives, the inclusion of the operations of
Molnlycke Toiletries for a full year and higher selling and administration
costs associated with the growth of the Sally Beauty business. These increases
in 1996 were partially offset by an immaterial, non-recurring gain on the sale
of certain Alberto-Culver USA institutional food lines in July 1996.
Advertising, promotion and market research expenditures were $255.3 million,
$208.4 million and $188.0 million in 1997, 1996 and 1995, respectively. The
increase in 1997 mainly resulted from the acquisition of St. Ives and
increased marketing expenditures for Alberto-Culver USA, including the
introduction of new products. The increase in 1996 was primarily due to the
acquisitions of St. Ives and Molnlycke Toiletries, partially offset by the
reclassification of certain off-invoice promotional allowances.
Interest expense, net of interest income, was $8.2 million, $12.1 million
and $6.5 million in 1997, 1996 and 1995, respectively. Interest expense was
$11.8 million in 1997 versus $15.9 million in 1996 and $9.9 million in 1995.
The decrease in interest expense in 1997 was attributable to the prepayment of
$20 million of 9.73% term notes in August 1996 and a reduction in outstanding
revolving Swedish krona debt, including the impact of foreign exchange rates.
The 1996 increase was primarily due to the Convertible Debentures and
borrowings related to the Molnlycke acquisition being outstanding for a full
year, along with the penalty incurred on the August 1996 prepayment of $20
million of term notes.
The provision for income taxes as a percentage of earnings before income
taxes was 37.3%, 37.3% and 37.5% in 1997, 1996 and 1995, respectively.
FINANCIAL CONDITION
Working capital at September 30, 1997 was $269.0 million, an increase of
$42.9 million from the prior year's working capital of $226.1 million. The
resulting current ratio was 1.86 to 1.00 at September 30, 1997 compared to
1.79 to 1.00 last year. The higher working capital was primarily due to an
increase in inventories partially offset by higher accounts payable.
Accounts receivable and inventories less accounts payable were $290.3
million at September 30, 1997 compared to $259.6 million last year. The
increase was primarily due to higher inventories needed to support the growth
of the Sally Beauty business and increased St. Ives activity.
Net property, plant and equipment increased $15.1 million to $191.0 million
at September 30, 1997. The increase resulted primarily from additional Sally
stores, warehouse and office expenditures and purchases of machinery,
equipment and information systems. The involuntary conversion of the corporate
airplane was offset by the purchase of an interest in another airplane.
S-10
<PAGE>
Goodwill and trade names, net of amortization, was $184.4 million as of
September 30, 1997, down slightly from 1996. The decrease in goodwill and
trade names was due to amortization and the effects of foreign exchange rates,
offset by additional goodwill from Sally Beauty acquisitions and finalization
of purchase accounting related to the St. Ives acquisition.
Long-term debt decreased $12.1 million principally due to a reduction in the
local currency amount of Swedish krona revolving debt and the impact of
foreign exchange rates.
Total stockholders' equity increased $71.9 million to $497.0 million at
September 30, 1997 primarily due to net earnings for the fiscal year partially
offset by dividend payments and foreign currency translation.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of cash over the past three years have been
funds provided by operating activities, the July 1995 issuance of $100 million
of Convertible Debentures and the 1996 sale of $30 million of trade accounts
receivable. Operating activities provided cash of $79.7 million, $92.7 million
and $81.8 million in 1997, 1996 and 1995, respectively.
The Company has obtained long-term financing as needed to fund acquisitions
and other growth opportunities. Funds are occasionally obtained prior to their
actual need in order to take advantage of opportunities in the debt markets.
In September, 1997, the Company obtained a five-year, $200 million revolving
credit facility. The facility, which is undrawn at September 30, 1997, can be
increased to $300 million under certain conditions and may be drawn in U.S.
dollars or in certain foreign currencies. Under debt covenants, the Company
had the ability to incur up to $590 million of additional debt at September
30, 1997.
The primary uses of cash have been to repay long-term debt and fund
acquisitions. During the three year period ending September 30, 1997, debt
repayments exceeded proceeds from new borrowings, excluding the Convertible
Debentures, by $23.0 million. Other major uses of cash during the three year
period included payments for acquired companies of $188.2 million, capital
expenditures of $130.1 million and cash dividends of $29.2 million.
Compared to 1994, cash dividends per share increased 41.8% over the three-
year period ended September 30, 1997. Cash dividends paid on Class A and Class
B Common Stock were $.195 per share in 1997, $.175 per share in 1996 and $.155
per share in 1995.
The Company anticipates that cash flows from operations and available credit
will be sufficient to fund operational requirements in future years. During
1998, the Company expects that cash will continue to be used for acquisitions,
capital expenditures, new product development, market expansion, retirement of
debt and dividend payments. The Company may also purchase shares of its Class
A Common Stock depending on market conditions.
INFLATION
The Company was not significantly affected by inflation during the past
three years. Management continuously attempts to resist cost increases and
counteract the effects of inflation through productivity improvements, cost
reduction programs and price increases within the constraints of the highly
competitive markets in which the Company operates.
S-11
<PAGE>
DESCRIPTION OF THE DEBENTURES
The following sets forth the particular terms of the % Debentures due
, 2028 (the "Debentures") offered hereby and supplements and should be
read in conjunction with the statements in the accompanying Prospectus under
the caption "Description of Debt Securities." Capitalized terms not otherwise
defined herein shall have the meanings given to them in the accompanying
Prospectus.
GENERAL
The Debentures will be issued under the Indenture, which is more fully
described in the accompanying Prospectus.
The Debentures will constitute a single series under the Indenture. The
Debentures will be issued as unsecured obligations of the Company in an
aggregate principal amount of $100,000,000 and will mature on , 2028.
The Debentures will bear interest at the rate of % per annum. The Debentures
will be effectively subordinated to (i) any secured indebtedness of the
Company to the extent of the assets securing that indebtedness and (ii) all
indebtedness for money borrowed and other liabilities of subsidiaries of the
Company. The Debentures are obligations exclusively of the Company. Since
substantially all operations of the Company are conducted through
subsidiaries, the cash flow and the consequent ability to service debt,
including the Debentures, of the Company are dependent upon the earnings of
its subsidiaries and the distribution of those earnings to, or upon loans or
other payments of funds by those subsidiaries to, the Company. The payment of
dividends and the making of loans and advances to the Company by its
subsidiaries may be subject to statutory and contractual restrictions and are
subject to various business considerations. As of March 31, 1998, the
Company's subsidiaries had approximately $26.3 million of outstanding
indebtedness.
The Debentures will bear interest from , 1998, payable semi-annually
in arrears on each and , commencing ,1998, at the rate set
forth on the cover page of this Prospectus Supplement, to the persons in whose
names the Debentures are registered on the preceding and ,
respectively.
The Debentures will be represented by a Book-Entry Security that will be
deposited with, or on behalf of, DTC, the Depository for the Debentures, and
registered in the name of Cede & Co., the nominee of DTC. So long as the
Debentures are represented by Book-Entry Securities, the interest payable on
the Debentures will be paid to Cede & Co., the nominee of DTC, or to such
nominee's registered assigns, as the registered owner of the Book-Entry
Securities, by wire transfer of immediately available funds on each of the
applicable interest payment dates, not later than 2:30 p.m. Eastern Standard
Time. If the Debentures are no longer represented by Book-Entry Securities,
payment of interest may, at the option of the Company, be made by check mailed
to the address of the person entitled thereto. A description of DTC's
procedures is set forth in the accompanying Prospectus under the heading
"Description of Debt Securities--Book-Entry Debt Securities."
No sinking fund is provided for the Debentures.
OPTIONAL REDEMPTION
The Debentures will be redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to (a) prior to , 2008,
the greater of (i) 100% of the principal amount of such Debentures or (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (not including the portion of any such payments of interest
accrued as of the redemption date) up to , 2008 or (b) from , 2008
to , 2028 the greater of (i) 100% of the principal amount of such
Debentures or (ii) the sum of the present
S-12
<PAGE>
values of the remaining scheduled payments of principal and interest thereon
(not including the portion of any such payments of interest accrued as of the
redemption date) up to , 2028, discounted, in each case, to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (determined on the third
Business Day preceding such redemption date), plus, in each case, accrued and
unpaid interest thereon to the redemption date.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.15%.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Reference Treasury Dealer as having a maturity comparable to the
remaining term of the Debentures to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Debentures.
"Comparable Treasury Price" means, with respect to any redemption date, the
average of the Reference Treasury Dealer Quotations for such redemption date.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. (New
York City time) on the third Business Day preceding such redemption date.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co., BancAmerica
Robertson Stephens, and First Chicago Capital Markets, Inc. and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer (a "Primary Treasury
Dealer") or is no longer quoting prices for United States Treasury securities,
the Company shall substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the Debentures to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the redemption date, interest will cease to accrue on the Debentures or
portions thereof called for redemption.
OPTIONAL REPAYMENT
The Debentures may be repaid on , 2008, at the option of the
registered holders of the Debentures, at 100% of their principal amount,
together with accrued interest to , 2008. In order for a holder to
exercise this option, the Company must receive at its office or agency in New
York, New York, during the period beginning on , 2008 and ending at 5:00
p.m. (New York City time) on , 2008 (or, if , 2008 is not a
Business Day, the next succeeding Business Day), the Debenture with the form
entitled "Option to Elect Repayment on , 2008" on the reverse of the
Debenture duly completed. Any such notice received by the Company during the
period beginning on , 2008 and ending at 5:00 p.m. (New York City time)
on , 2008 shall be irrevocable. See "Book-Entry System," below. The
repayment option may be exercised by the holder of a Debenture for less than
the entire principal amount of the Debentures held by such holder, so long as
the principal amount that is to be repaid is equal to $1,000 or an integral
multiple of $1,000. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of any Debenture for repayment will
be determined by the Company, whose determination will be final and binding.
S-13
<PAGE>
Failure by the Company to repay the Debentures when required as described in
the preceding paragraph will result in an Event of Default under the
Indenture.
As long as the Debentures are represented by a Book-Entry Security, the
Depository's nominee will be the registered holder of the Debentures and
therefore it will be the only entity that can exercise the right to repayment.
See "Book-Entry System," below.
BOOK-ENTRY SYSTEM
The Debentures will be represented by Book-Entry Securities that will be
deposited with, or on behalf of, DTC, as Depository, and registered in the
name of DTC's nominee, Cede & Co. Except as described in the Prospectus under
"Description of Debt Securities--Book-Entry Debt Securities," owners of
beneficial interests in a Book-Entry Security will not be considered the
Holders thereof and will not be entitled to receive physical delivery of
Debentures in definitive form.
DTC has advised the Company that DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered under the Exchange
Act. DTC was created to hold the securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations, and certain other organizations some of whom (and/or
their representatives) own DTC. Access to DTC's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly. Persons who are not participants may beneficially own
securities held by DTC only though participants.
So long as the Debentures are represented by a Book-Entry Security, the
Depository's nominee will be the only entity that can exercise a right to
repayment pursuant to the Holder's option to elect repayment of its
Debentures. Notice by participants or by owners of beneficial interests in a
Book-Entry Security held though such participants of the exercise of the
option to elect repayment of beneficial interest in Debentures represented by
a Book-Entry Security must be transmitted to the Depository in accordance with
its procedures on a form required by the Depository and provided to
participants. In order to ensure that the Depository's nominee will timely
exercise a right to repayment with respect to a particular Debenture, the
beneficial owner of such Debenture must instruct the broker or other
participant though which it holds an interest in such Debenture to notify the
Depository of its desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker or other
participant through which it holds an interest in a Debenture in order to
ascertain the cut-off time by which such an instruction must be given in order
for timely notice to be delivered to the Depository. The Company will not be
liable for any delay in delivery of such notice to the Depository.
A further description of DTC's procedures with respect to the Debentures is
set forth in the accompanying Prospectus under the heading "Description of
Debt Securities--Book-Entry Debt Securities."
DEFEASANCE
The provisions described under "Description of Debt Securities--Defeasance
and Covenant Defeasance" in the accompanying Prospectus are applicable to the
Debentures.
CONCERNING THE TRUSTEE
The First National Bank of Chicago, an affiliate of First Chicago Capital
Markets, Inc., (i) acts as Trustee under the Indenture, (ii) acts as a co-
agent under the Company's $200 million revolving credit facility and (iii)
performs routine banking functions for the Company.
S-14
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Pricing Agreement, the Company has agreed to sell to each of the
Underwriters named below, and each of such Underwriters has severally agreed
to purchase, the principal amount of the Debentures set forth opposite its
name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OF
UNDERWRITER DEBENTURES
----------- ------------
<S> <C>
Goldman, Sachs & Co............................................ $
BancAmerica Robertson Stephens.................................
First Chicago Capital Markets, Inc.............................
------------
Total........................................................ $100,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the Pricing
Agreement, the Underwriters are committed to take and pay for all of the
Debentures, if any are taken.
The Underwriters propose to offer the Debentures in part directly to the
public at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of % of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not to
exceed % of the principal amount of the Debentures to certain brokers and
dealers. After the Debentures are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures but are not obligated to do so and
may discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
In connection with the offering, the Underwriters may purchase and sell the
Debentures in the open market. These transactions may include over-allotment
and stabilizing transactions and purchases to cover short positions created by
the Underwriters in connection with the offering. Stabilizing transactions
consist of certain bids or purchases for the purpose of preventing or
retarding a decline in the market price of the Debentures; and short positions
created by the Underwriters involve the sale by the Underwriters of a greater
number of Debentures than they are required to purchase from the Company in
the offering. The Underwriters also may impose a penalty bid, whereby selling
concessions allowed to broker-dealers in respect of the securities sold in the
offering may be reclaimed by the Underwriters if such Debentures are
repurchased by the Underwriters in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Debentures, which may be higher than the price that might otherwise prevail in
the open market; and these activities, if commenced, may be discontinued at
any time. These transactions may be effected in the over-the-counter market or
otherwise.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
In the ordinary course of their business, the Underwriters and certain of
their affiliates have engaged, and may in the future engage, in commercial
banking and investment banking transactions with the Company and affiliates of
the Company. Bank of America National Trust and Savings Association, an
affiliate of BancAmerica Robertson Stephens, acts as the agent and The First
National Bank of Chicago, an affiliate of First Chicago Capital Markets, Inc.,
acts as a co-agent, under the Company's $200 million revolving credit
facility.
S-15
<PAGE>
VALIDITY OF THE DEBENTURES
Certain legal matters in connection with the Debentures offered hereby will
be passed upon for the Company by Gary P. Schmidt, General Counsel of the
Company. The validity of the Debentures offered hereby will be passed upon for
the Underwriters by Mayer, Brown & Platt, Chicago, Illinois. Mr. Schmidt owns
options to purchase 10,000 shares of Class A Common Stock, of which no such
options are currently exercisable.
S-16
<PAGE>
PROSPECTUS
$350,000,000
ALBERTO-CULVER COMPANY
DEBT SECURITIES
Alberto-Culver Company (the "Company") may offer from time to time under
this Prospectus in one or more series its debt securities ("Debt Securities"),
which may be senior ("Senior Securities") or subordinated ("Subordinated
Securities"), with an aggregate public offering price of up to $350,000,000 or
the equivalent thereof in one or more foreign currencies or composite
currencies, on terms to be determined at the time of each offering hereunder.
The Debt Securities will be offered in amounts, at prices and on terms to be
determined at the time of sale and to be set forth in one or more supplements
to this Prospectus (a "Prospectus Supplement"). The Debt Securities may be
convertible into, or exchangeable for securities or property of the Company,
cash or any combination thereof.
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be described in a Prospectus Supplement,
which terms will include, among others and where applicable, the specific
title, designation, rank (including any subordination provisions), aggregate
principal amount, minimum denominations, currency or currencies of
denomination and payment, maturity, premium or discount, if any, interest rate
(or method of calculation) and time of payment of interest, terms for
redemption at the option of the Company or repayment at the option of the
holder, terms for sinking fund payments, terms for conversion or exchange for
or into securities or property of the Company, cash, or any combination
thereof, and form (which may be bearer, registered or global), provisions
regarding original issue discount, including accretion thereof, and any other
terms in connection with the offer and sale of Debt Securities. The applicable
Prospectus Supplement will also contain information, where applicable,
concerning certain United States federal income tax considerations relating to
the Debt Securities and any listing on a securities exchange or exchanges of
the Debt Securities covered by such Prospectus Supplement and about
relationships between the Company and the applicable trustee (to the extent
such relationships are not already set forth in this Prospectus). See
"Description of Debt Securities."
The Debt Securities may be offered directly, through agents, to or through
underwriters or dealers, which may include affiliates of the Company, or
through any combination of the foregoing. See "Plan of Distribution." If any
agents, dealers or underwriters are involved in the sale of any of the Debt
Securities, their names, and any applicable fee, commission, purchase price or
discount arrangements with them will be set forth, or will be calculable from
the information set forth, in the applicable Prospectus Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
This Prospectus may not be used to consummate sales of the Debt Securities
without delivery of one or more Prospectus Supplements.
The date of this Prospectus is May 4, 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission").
Such materials can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at its regional offices located at Citicorp Center, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade
Center, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such materials also can be
inspected at the offices of The New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
For further information, reference is hereby made to the Registration
Statement and exhibits thereto. Statements contained herein concerning any
such document are not necessarily complete and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement. Each such statement is qualified in its entirety by such reference.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated by reference into this Prospectus
(not including exhibits to the information that is incorporated by reference
unless such exhibits are specifically incorporated by reference into the
information that this Prospectus incorporates). Such written or oral request
should be directed to Alberto-Culver Company, 2525 Armitage Avenue, Melrose
Park, Illinois 60160, Attention: Corporate Secretary; telephone 708/450-3101.
Unless otherwise indicated, currency amounts in the Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars,"
"U.S. dollars," or "U.S. $").
----------------
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the Commission
are incorporated herein by reference:
(1) The Company's annual report on Form 10-K for the fiscal year ended
September 30, 1997.
(2) The Company's quarterly report on Form 10-Q for the quarter ended
December 31, 1997.
(3) The description of the Company's Class A Common Stock, par value $.22
per share (the "Class A Common Stock"), and Class B Common Stock, par value
$.22 per share (the "Class B Common Stock", together with the Class A
Common Stock, the "Common Stock"), which is contained in the Company's
registration statements filed pursuant to the Exchange Act, and any
amendment or report filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed
to be incorporated in this Prospectus by reference and to be a part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
2
<PAGE>
No person has been authorized to give any information or to make any
representations not contained in this Prospectus or the Prospectus Supplement
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company. This Prospectus and the
Prospectus Supplement do not constitute an offer to sell or a solicitation of
an offer to buy any of the securities offered to any person in any
jurisdiction where such offer would be unlawful. The delivery of this
Prospectus or any Prospectus Supplement or any sale of the securities made
hereby or thereby does not imply that there has been no change in the
Company's affairs since the date hereof or thereof.
This Prospectus and the Prospectus Supplement may contain forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Such statements are based on management's current
expectations and assessments of risks and uncertainties and reflect various
assumptions concerning anticipated results, which may or may not prove to be
correct. Some of the factors that could cause actual results to differ
materially from estimates or projections contained in such forward looking
statements include the pattern of brand sales, including variations in sales
volume within periods; competition within the relevant product markets,
including pricing, promotional activities, continuing customer acceptance of
existing products and the ability to develop and successfully introduce new
products; risks inherent in acquisitions and strategic alliances; changes in
costs including changes in labor costs, raw material prices or promotional
expenses; the costs and effects of unanticipated legal or administrative
proceedings; variations in political, economic or other factors such as
currency exchange rates, inflation rates, recessionary or expansive trends,
tax changes, legal and regulatory changes or other external factors over which
the Company has no control. The Company disclaims any obligation to update any
forward-looking statement in this Prospectus, the Prospectus Supplement or any
incorporated document.
THE COMPANY
Alberto-Culver Company and its consolidated subsidiaries (herein referred to
collectively as the "Company", unless indicated otherwise) have two principal
business segments. One segment, "Consumer Products", principally includes
developing, manufacturing, distributing and marketing branded consumer
products worldwide and includes the Company's Alberto-Culver USA and Alberto-
Culver International business units. This segment also includes the
manufacturing of custom label products for other companies. The second
segment, "Specialty Distribution--Sally", consists of Sally Beauty Company, a
specialty distributor of professional beauty supplies with over 1,900 stores
as of February 28, 1998 in the United States, Puerto Rico, the United Kingdom,
Japan and Germany.
The Company's major health and beauty care products in the United States
include the ALBERTO VO5, TRESemme and CONSORT lines of hair care products, the
St. Ives SWISS FORMULA line of hair and skin care products, CORTEXX hair care
products, FDS feminine deodorant sprays and the TCB line of hair care products
for the ethnic market.
Food and household products sold in the United States include MRS. DASH
salt-free seasonings, MOLLY McBUTTER dairy sprinkles, SUGARTWIN sugar
substitute, BAKER'S JOY flour and oil cooking spray and STATIC GUARD anti-
static spray.
The Company's consumer products are sold in more than 120 countries. Through
its Cederroth International subsidiary headquartered in Sweden, the Company
manufactures and markets health and beauty care products throughout
Scandinavia and Europe. Major products include SALVEKVICK adhesive bandages,
ALBERTO VO5 hair care products, SAMARIN antacids, SELTIN salt substitute,
LACTACYD liquid soap, TOPZ cotton buds, BLIW liquid soaps, DATE
antiperspirants and cologne for women, FAMILY FRESH shampoo and shower
products, SUKETTER artificial sweetener, HEMANENT home permanents, St. Ives
SWISS FORMULA line of hair and skin care products, HTH and L300 skin care
products and GRUMME TVATTSAPA detergents.
3
<PAGE>
In the United Kingdom, the Company markets, among other products, the
ALBERTO VO5 line of hair care products, the St. Ives SWISS FORMULA line of
hair and skin care products, ALBERTO BALSAM shampoo and conditioner and the
TRESemme line of hair care products. INDOLA professional colors, shampoos,
conditioners and styling products are marketed throughout Europe and other
international markets. Other major international markets include Canada,
Mexico, Puerto Rico, Australia, Italy and New Zealand.
The "Specialty Distribution--Sally" business segment represents the
operations of Sally Beauty Company, Inc. which operates a network of cash-and-
carry professional beauty supply stores and also sells professional beauty
products to hairdressers, beauticians and cosmetologists through its own full-
service distributors. Sally stores provide salon owners, hairdressers and
consumers with an extensive selection of hair care and skin care products,
cosmetics, styling appliances and other beauty items.
Alberto-Culver Company was incorporated under the laws of the State of
Delaware in 1961.
The Company's principal executive offices are located at 2525 Armitage
Avenue, Melrose Park, Illinois 60160, and its telephone number is (708) 450-
3000.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be added to the Company's
general funds and will be available for potential acquisitions if suitable
opportunities arise, for repurchases of Class A Common Stock under the
Company's stock repurchase program, for ongoing and new capital projects, for
repayment of any outstanding indebtedness and for general corporate purposes.
Pending the application of the net proceeds for such purposes, the Company may
invest such proceeds in short-term, marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following are the unaudited consolidated ratios of earnings to fixed
charges for the quarters ended December 31, 1997 and December 31, 1996 and
each of the years in the five-year period ended September 30, 1997:
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED SEPTEMBER 30,
- ------------------------------ -------------------------------------------------------------
DECEMBER 31, DECEMBER 31,
1997 1996* 1997* 1996 1995 1994 1993
- ------------ ------------ ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
5.0x 4.5x 4.8x 4.0x 4.3x 4.0x 3.8x
</TABLE>
- --------
*Excludes a non-recurring pre-tax gain of $15.6 million in the first quarter
of fiscal year 1997 resulting from a $28.0 million insurance settlement
from the loss of the Company's airplane. Including this non-recurring gain,
the ratio of earnings to fixed charges was 6.6x for the three months ended
December 31, 1996 and 5.3x for the fiscal year ended September 30, 1997.
For the purpose of computing the ratios of earnings to fixed charges,
"earnings" consist of income from continuing operations before taxes and fixed
charges (including amortization of amounts previously capitalized). "Fixed
charges" consist of interest on all indebtedness and amortization of debt
discount and expense and that portion of rental expense which the Company
believes to be representative of interest.
A statement setting forth the computation of the unaudited ratios of
earnings to fixed charges is filed as an exhibit to the Registration Statement
of which this Prospectus is a part.
4
<PAGE>
SELECTED FINANCIAL DATA
The selected financial data below should be read in conjunction with the
consolidated financial statements and notes thereto incorporated by reference
herein. The selected financial data shown below for, and as of the end of,
each of the fiscal years in the five-year period ended September 30, 1997 are
derived from audited consolidated financial statements of the Company. The
selected financial data shown below for, and as of the end of, the three
months ended December 31, 1997 and 1996 are derived from unaudited
consolidated financial statements of the Company. In the opinion of
management, the unaudited consolidated financial statements reflect all
adjustments, consisting only of normal adjustments, necessary for a fair
presentation of such periods. The results of operations for the three months
ended December 31, 1997 are not necessarily indicative of the operating
results that may be expected for the full fiscal year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31, YEAR ENDED SEPTEMBER 30,
-------------------- -------------------------------------------------
(IN THOUSANDS, EXCEPT PER 1997 1996 1997 1996 1995 1994 1993
SHARE DATA) ---------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net sales............... $ 445,400 426,105 1,775,258 1,590,409 1,358,219 1,216,119 1,147,990
Cost of products sold... 218,040 215,388 880,416 805,080 682,589 602,749 564,260
Interest expense........ 2,081 2,392 11,826 15,905 9,946 8,630 9,661
Earnings before non-
recurring gain and
income taxes (1)....... 31,382 26,738 120,487 100,014 84,242 71,078 65,129
Provision for income
taxes (1).............. 11,690 9,961 44,881 37,270 31,591 27,010 23,857
Net earnings before non-
recurring gain (1)..... 19,692 16,777 75,606 62,744 52,651 44,068 41,272
Net earnings per share
before
non-recurring gain (1)
(2) (3):
Basic.................. .35 .30 1.35 1.13 .95 .79 .72
Diluted................ .32 .28 1.25 1.06 .94 .79 .72
WEIGHTED AVERAGE SHARES
OUTSTANDING (2) (3):
Basic.................. 56,354 55,773 55,967 55,571 55,430 56,063 57,361
Diluted................ 63,656 63,012 63,377 62,776 57,053 56,083 57,435
FINANCIAL CONDITION:
Current ratio........... 1.98 to 1 1.89 to 1 1.86 to 1 1.79 to 1 2.28 to 1 1.86 to 1 2.05 to 1
Working capital......... $ 282,553 265,344 269,007 226,123 301,706 185,747 205,050
Cash, cash equivalents
and short-term
investments............ 63,190 113,338 87,600 71,557 146,985 50,362 73,947
Property, plant and
equipment, net......... 199,655 167,550 190,998 175,920 157,791 132,881 124,449
Total assets............ 1,003,431 955,374 1,000,059 909,266 815,086 610,208 593,046
Long-term debt.......... 48,580 60,925 49,441 61,548 83,094 42,976 80,184
Convertible subordinated
debentures............. 100,000 100,000 100,000 100,000 100,000 -- --
Stockholders' equity.... 520,977 453,928 497,004 425,096 370,903 326,970 298,857
Cash dividends per share
(4).................... .05 .045 .195 .175 .155 .1375 .1375
</TABLE>
- --------
(1) The operating results for the fiscal year ended September 30, 1997 and the
three months ended December 31, 1996 exclude a non-recurring gain from an
insurance settlement for the loss of the Company's corporate airplane.
For the three months ended December 31, 1996, pre-tax earnings including the
non-recurring gain were $42.4 million. Net earnings including the gain were
$26.6 million, after deducting income taxes of $15.8 million, representing
basic earnings per share of $0.48 and diluted earnings per share of $0.44.
For the fiscal year ended September 30, 1997, pre-tax earnings including the
non-recurring gain were $136.1 million. Net earnings including the gain were
$85.4 million, after deducting income taxes of $50.7 million, representing
basic earnings per share of $1.53 and diluted earnings per share of $1.41.
(2) Net earnings per share and weighted average shares outstanding have been
restated to reflect the 100% stock dividend on the Company's Class A and
Class B outstanding shares in February, 1997.
(3) Net earnings per share and weighted average shares outstanding have been
restated to comply with Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings Per Share", which the Company adopted in the first
quarter of fiscal year 1998.
(4) Dividends per share on Class A Common Stock and Class B Common Stock have
been equal since the Class A shares were issued in April, 1986. Dividends
paid in fiscal 1993 include a one-time extraordinary dividend of one cent
per share in recognition of the Company surpassing one billion dollars in
sales for the fiscal year ended September 30, 1992.
5
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (the "Indenture")
between the Company and The First National Bank of Chicago, as trustee (the
"Trustee"), a copy of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Indenture, including the
definitions therein of certain terms. Wherever particular Sections or defined
terms of the Indenture are referred to, such Sections or defined terms are
incorporated herein by reference.
The following sets forth certain general terms and provisions of the Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Securities") will be described in
the Prospectus Supplement relating to such Offered Securities (the "Applicable
Prospectus Supplement").
GENERAL
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder, and Debt Securities may be issued thereunder from time to
time in one or more series. The Debt Securities will be unsecured and, to the
extent not otherwise indicated in the Applicable Prospectus Supplement,
unsubordinated obligations of the Company and will rank equally and ratably
with other unsecured and, to the extent not otherwise so indicated,
unsubordinated obligations of the Company.
The Debt Securities will be effectively subordinated to (i) any secured
indebtedness of the Company to the extent of the assets securing that
indebtedness and (ii) all indebtedness for money borrowed and other
liabilities of subsidiaries of the Company. The Debt Securities are
obligations exclusively of the Company. Since substantially all operations of
the Company are conducted through subsidiaries, the cash flow and the
consequent ability to service debt, including the Debt Securities, of the
Company may be affected by the earnings of its subsidiaries and the
distribution of those earnings to, or upon loans or other payments of funds by
those subsidiaries to, the Company. The payment of dividends and the making of
loans and advances to the Company by its subsidiaries may be subject to
restrictions, are dependent upon the earnings of those subsidiaries and are
subject to various business considerations.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, premium, if any, and interest on the Debt Securities will be
payable, and the transfer of Debt Securities will be registrable, at the
office or agency to be maintained by the Company in New York, New York, and at
any other office or agency maintained by the Company for such purpose. Unless
otherwise indicated in the Applicable Prospectus Supplement, the Debt
Securities will be issued only in fully registered form without coupons and in
denominations of $1,000 and integral multiples thereof. No service charge will
be made for any registration of transfer or exchange of the Debt Securities,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge imposed in connection therewith.
The Applicable Prospectus Supplement will describe, when applicable, the
following terms of the Offered Securities: (1) the title of the Offered
Securities; (2) any limit on the aggregate principal amount of the Offered
Securities; (3) the person to whom any interest on the Offered Securities
shall be payable, if other than the person in whose name that Security (or one
or more Predecessor Debt Securities) is registered at the close of business on
the Regular Record Date for such interest; (4) the date or dates on which the
principal of the Offered Securities is payable (or the method of determination
thereof); (5) the rate or rates (which may be fixed or variable) at which the
Offered Securities will bear interest, if any, or the method by which such
rate or rates will be determined, the date or dates from which any such
interest will accrue (or the method of determination thereof), the Interest
Payment Dates on which any such interest will be payable (or the method of
determination thereof) and the Regular Record Date for the interest payable on
any Interest Payment Date (or the method of determination thereof); (6)
whether the interest rate or interest rate formula for the Offered Securities
may be reset at the option of the Company or otherwise, and the date or dates
on which such interest rate or interest rate
6
<PAGE>
formula may be reset; (7) the place or places where the principal of and any
premium and interest on the Offered Securities will be payable; (8) the period
or periods within which, the price or prices at which and the terms and
conditions upon which the Offered Securities may be redeemed, in whole or in
part, at the option of the Company; (9) the obligation, if any, of the Company
to redeem, purchase or repay the Offered Securities pursuant to any sinking
fund or analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the terms and
conditions upon which the Offered Securities will be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation; (10) if other than
denominations of $1,000 and any integral multiple thereof, the denominations
in which the Offered Securities will be issuable; (11) the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on any Offered Securities will be payable if other than
the currency of the United States of America; (12) if the amount of payments
of principal of or any premium or interest on any Offered Securities may be
determined with reference to an index or formula, the manner in which such
amounts will be determined; (13) if the principal of or any premium or
interest on any Offered Securities is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency units other
than that or those in which the Offered Securities are stated to be payable,
the currency, currencies or currency units in which payment of the principal
of and any premium and interest on the Offered Securities as to which such
election is made will be payable, and the periods within which and the terms
and conditions upon which such election is to be made; (14) the applicability,
if any, of the provisions described under "Defeasance and Covenant
Defeasance"; (15) whether the Offered Securities will be issuable, in whole or
in part, in the form of one or more Book-Entry Debt Securities as described
under "Book-Entry Debt Securities," and, in such case, the depository
appointed by the Company or its nominee with respect to the Offered Securities
and the circumstances under which the Book-Entry Security may be registered
for transfer or exchange or authenticated and delivered in the name of a
Person other than the Depository or its nominee; (16) if other than the
principal amount thereof, the portion of the principal amount of the Offered
Securities which will be payable upon declaration of acceleration of the
Maturity thereof; (17) subordination provisions of the Offered Securities;
(18) the terms and conditions, if any, upon which the Offered Securities are
to be convertible into, or exchangeable for, securities or property of the
Company, cash, or any combination thereof; (19) any deletions from or
modifications of or additions to the Events of Default or the covenants of the
Company in respect of the Offered Securities; (20) whether the Offered
Securities will be issued, in whole or in part, in bearer form and, if so, any
provisions related thereto; and (21) any other terms of the Offered
Securities.
The Debt Securities may be issued as Original Issue Discount Securities to
be offered and sold at a substantial discount below their stated principal
amount. Federal income tax consequences and other special considerations
applicable to Original Issue Discount Securities and any Debt Securities
treated as having been issued with original issue discount for federal income
tax purposes will be described in the Applicable Prospectus Supplement.
"Original Issue Discount Securities" means any Debt Security which provides
for an amount less than the principal amount thereof to be due and payable
upon the declaration of acceleration of the Maturity thereof upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture does not contain covenants or other provisions designed to
afford holders of the Debt Securities protection in the event of a highly
leveraged transaction, change in credit rating or other similar occurrence.
BOOK-ENTRY DEBT SECURITIES
Unless otherwise provided in the Applicable Prospectus Supplement, the Debt
Securities will be represented by one or more certificates (the "Global
Securities") which Debt Securities will be deposited with, or on behalf of,
The Depository Trust Company ("DTC"), or other successor depository appointed
by the Company (DTC or such other depository being the "Depository") and
registered in the name of the Depository or its nominee. Unless otherwise
provided in the Applicable Prospectus Supplement, Debt Securities will not be
issued in definitive form. If the aggregate principal amount of any issue
exceeds $200 million, one certificate will be issued with respect to each $200
million of principal amount and an additional certificate will be issued with
respect to any remaining principal amount of such issue.
7
<PAGE>
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The Rules applicable to DTC and its Participants are on file with the
Commission.
Upon the issuance by the Company of Debt Securities represented by a Global
Security, purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual purchaser
of each Security ("Beneficial Owner") is in turn to be recorded on the Direct
and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Debt Securities are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Debt Securities, except in the event that use of the book-entry
system for the Debt Securities is discontinued. The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in the Global Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in Debt
Securities represented by the Global Security will not be entitled to have
Debt Securities represented by such Global Security registered in their names,
will not receive or be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the owners or holders
thereof under the applicable Indenture.
To facilitate subsequent transfers, all Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Debt Securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Securities; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Debt Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers. Conveyance of notices and other
communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Debt
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Company as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Debt Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
8
<PAGE>
Payments of principal of, premium, if any, and interest on the Debt
Securities represented by the Global Security registered in the name of DTC or
its nominee will be made by the Company through the Trustee under the
Indenture or a paying agent (the "Paying Agent"), which may also be the
Trustee under the Indenture, to DTC or its nominee, as the case may be, as the
registered owner of the Global Security. Neither the Company, the Trustee, nor
the Paying Agent will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any payment of
principal, premium, if any, and interest in respect of a Global Security, will
credit Direct Participants' accounts on the payable date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payment on the payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the accounts
of customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Paying Agent or the
Company, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal, premium, if any, and interest
to DTC is the responsibility of the Company or the Paying Agent, disbursement
of such payments to Direct Participants shall be the responsibility of DTC,
and disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
If the Depository with respect to a Global Security is at any time unwilling
or unable to continue as Depository and a successor Depository is not
appointed by the Company within 90 days, the Company will issue certificated
notes in exchange for the Debt Securities represented by such Global Security.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
CERTAIN COVENANTS OF THE COMPANY
Limitation on Liens. Unless otherwise provided in the Applicable Prospectus
Supplement, the Indenture will provide that the Company will not, nor will it
permit any Restricted Subsidiary to, incur, issue, assume, guarantee or create
any Secured Funded Debt, without effectively providing concurrently with the
incurrence, issuance, assumption, guaranty or creation of any such Secured
Funded Debt that the Outstanding Securities (together with, if the Company
shall so determine, any other Indebtedness of the Company or such Restricted
Subsidiary then existing or thereafter created which is not subordinated to
the Outstanding Securities) will be secured equally and ratably with (or prior
to) such Secured Funded Debt, so long as such Secured Funded Debt will be
secured by a Lien, unless, after giving effect thereto, the sum of the
aggregate amount of all outstanding Secured Funded Debt of the Company and its
Restricted Subsidiaries together with all Attributable Debt in respect of sale
and leaseback transactions relating to a Principal Property (with the
exception of Attributable Debt which is excluded pursuant to clauses (1) to
(6) described under "Limitations on Sales and Leasebacks" below), would not
exceed an amount equal to the greater of (i) $100 million or (ii) 15% of
Consolidated Net Tangible Assets; provided, however, that this restriction
will not apply to, and there will be excluded from Secured Funded Debt in any
computation under this restriction, Funded Debt secured by: (1) Liens on
property, shares of capital stock or indebtedness of any corporation existing
at the time such corporation becomes a Subsidiary; (2) Liens on property,
shares of capital stock or indebtedness existing at the time of acquisition
thereof or incurred within 270 days of the time of acquisition thereof
(including in either case, without limitation, acquisition through merger or
consolidation) by the Company or any Restricted Subsidiary; (3) Liens on
property, shares of capital stock or indebtedness thereafter acquired (or
constructed) by the Company or any Restricted Subsidiary and created prior to,
at the time of, or within 270 days after such acquisition (including, without
limitation, acquisition through merger or consolidation) (or the completion of
such construction or commencement of commercial operation of such property,
whichever is later) to secure or provide for the payment of all or any part of
the purchase price
9
<PAGE>
(or the construction price) thereof; (4) Liens in favor of the Company or any
Restricted Subsidiary; (5) Liens in favor of the United States of America, any
State thereof or the District of Columbia, or any agency, department or other
instrumentality thereof, to secure partial, progress, advance or other
payments pursuant to any contract or provisions of any statute; (6) Liens
incurred or assumed in connection with the issuance of revenue bonds the
interest on which is exempt from Federal income taxation pursuant to Section
103(b) of the Internal Revenue Code; (7) Liens securing the performance of any
contract or undertaking not directly or indirectly in connection with the
borrowing of money, the obtaining of advances or credit or the securing of
Funded Debt, if made and continuing in the ordinary course of business; (8)
Liens under workers' compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders,
contracts or deposits to secure public or statutory obligations of the Company
or any Restricted Subsidiary, or deposits of cash or obligations of the United
States of America to secure surety and appeal bonds to which the Company or
any Restricted Subsidiary is a party or in lieu of such bonds, or pledges or
deposits for similar purposes in the ordinary course of business, or Liens
imposed by law, such as laborers' or other employees', carriers',
warehousemen's, mechanics', materialmen's and vendors' Liens, and Liens
arising out of judgments or awards against the Company or any Restricted
Subsidiary with respect to which the Company or such Restricted Subsidiary at
the time shall be prosecuting an appeal or proceedings for review and with
respect to which it shall have secured a stay of execution pending such appeal
or proceedings for review, or Liens for taxes not yet subject to penalties for
nonpayment or the amount or validity of which is being in good faith contested
by appropriate proceedings by the Company or any Restricted Subsidiary, as the
case may be, or minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning or
other restrictions or Liens as to the use of real properties, which Liens,
exceptions, encumbrances, easements, reservations, rights and restrictions do
not, in the opinion of the Company, in the aggregate materially detract from
the value of said properties or materially impair their use in the operation
of the business of the Company and its Restricted Subsidiaries; (9) Liens
incurred to finance all or any portion of the cost of construction, alteration
or repair of any Principal Property and improvements thereto created prior to
completion of such construction, alteration or repair; (10) Liens outstanding
on the date of the Indenture; or (11) any extension, renewal, refunding or
replacement of the foregoing.
"Attributable Debt" means, as to any particular lease under which either the
Company or any Restricted Subsidiary is at the time liable as lessee for a
term of more than 12 months and at any date as of which the amount thereof is
to be determined, the total net obligations of the lessee for rental payments
during the remaining term of the lease (including any period for which such
lease has been extended or may, at the option of the lessor, be extended)
discounted from the respective due dates thereof to such determination date at
a rate per annum equivalent to the greater of (a) the weighted-average Yield
to Maturity (as defined in the Indenture) of the Outstanding Securities, such
average being weighted by the principal amount of the Outstanding Securities
of each series or, in the case of Original Issue Discount Securities (as
defined in the Indenture), by the principal amount of such outstanding
Original Issue Discount Securities that would be due and payable as of the
date of such determination upon a declaration of acceleration of the maturity
thereof pursuant to the Indenture and (b) the interest rate inherent in such
lease (as determined in good faith by the Company), both to be compounded
semi-annually.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom, without duplication, the sum of (i) all current liabilities except
for (A) notes and loans payable, (B) current maturities of long term debt, (C)
current maturities of obligations under capital leases and (D) customer
deposits and (ii) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on a consolidated
balance sheet of the Company and its subsidiaries.
"Funded Debt" means (i) any indebtedness of the Company or a Restricted
Subsidiary maturing more than 12 months after the time of computation thereof,
(ii) guarantees by the Company or a Restricted Subsidiary of
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Funded Debt or of dividends of others (except guarantees in connection with
the sale or discount of accounts receivable, trade acceptances and other paper
arising in the ordinary course of business), (iii) in the case of any
Restricted Subsidiary, all preferred stock having mandatory redemption
provisions of such Restricted Subsidiary as reflected on such Restricted
Subsidiary's balance sheet prepared in accordance with U.S. generally accepted
accounting principles, and (iv) all Capital Lease Obligations (as defined in
the Indenture).
"Indebtedness" means, at any date, without duplication, (i) all obligations
for borrowed money of the Company or a Restricted Subsidiary or any other
indebtedness of the Company or a Restricted Subsidiary, evidenced by bonds,
debentures, notes or other similar instruments, and (ii) Funded Debt.
"Liens" means such pledges, mortgages, security interests and other liens on
any Principal Property of the Company or a Restricted Subsidiary which secure
Secured Funded Debt.
"Principal Property" means any real property (including all related land and
buildings but excluding related fixtures, machinery and equipment) or
machinery and equipment located within the United States and owned by, or
leased to, the Company or any of its Subsidiaries that has a net book value
(after deduction of accumulated depreciation) in excess of 1.0% of
Consolidated Net Tangible Assets.
"Restricted Subsidiary" means any Subsidiary of the Company that owns any
Principal Property.
"Secured Funded Debt" means Funded Debt which is secured by any pledge of,
or mortgage, security interest or other lien on, any (i) Principal Property
(whether owned on the date of the Indenture or thereafter acquired or
created), (ii) shares of stock owned by the Company or a Subsidiary in a
Restricted Subsidiary or (iii) indebtedness of a Restricted Subsidiary owed to
the Company or a Subsidiary.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock, which under ordinary circumstances (not dependent upon the
happening of a contingency) has voting power to elect a majority of the board
of directors of such corporation (or similar management body), is owned
directly or indirectly by the Company or by one or more Subsidiaries of the
Company, or by the Company and one or more Subsidiaries.
Limitation on Sales and Leasebacks. Unless otherwise provided in the
Applicable Prospectus Supplement, the Indenture will provide that the Company
will not, nor will it permit any Restricted Subsidiary to, enter into any
arrangement with any Person providing for the leasing by the Company or any
Restricted Subsidiary of any Principal Property of the Company or any
Restricted Subsidiary, which Principal Property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person (a
"sale and leaseback transaction") unless, after giving effect thereto, the
aggregate amount of all Attributable Debt with respect to all such sale and
leaseback transactions plus all Secured Funded Debt (with the exception of
Funded Debt secured by liens which is excluded pursuant to clauses (1) to (11)
described under "Limitations on Liens" above) would not exceed an amount equal
to the greater of (i) $100 million or (ii) 15% of Consolidated Net Tangible
Assets. This covenant will not apply to, and there will be excluded from
Attributable Debt in any computation under this restriction or under
"Limitations on Liens" above, Attributable Debt with respect to any sale and
leaseback transaction if: (1) the Company or a Restricted Subsidiary is
permitted to create Funded Debt secured by a Lien pursuant to clauses (1) to
(11) inclusive described under "Limitations on Liens" above on the Principal
Property to be leased, in an amount equal to the Attributable Debt with
respect to such sale and leaseback transaction, without equally and ratably
securing the Outstanding Securities; (2) the Company or a Restricted
Subsidiary shall apply an amount in cash equal to the greater of (i) the net
proceeds of the sale or transfer of the Principal Property leased pursuant to
such arrangement or (ii) the fair market value of the Principal Property so
leased at the time of entering into such arrangement (as determined by the
Chief Executive Officer, the President, the Chief Financial Officer, the
Treasurer or the Controller of the Company) to the retirement of Secured
Funded Debt of the Company or any Restricted Subsidiary (other than Secured
Funded Debt owned by the Company or any Restricted Subsidiary); provided,
however, that no retirement referred to in this clause (2) may be effected by
payment at maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision of Secured Funded Debt; (3) the Company or a
Restricted Subsidiary immediately applies the net proceeds of
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the sale or transfer of the Principal Property leased pursuant to such
transaction to investment in another Principal Property; provided, however,
that this exception shall apply only if such proceeds invested in such other
Principal Property shall not exceed the total acquisition, repair, alteration
and construction cost of the Company or any Restricted Subsidiary in such
other Principal Property less amounts secured by any purchase money or
construction mortgages on such Principal Property; (4) the effective date of
any such arrangement is within 270 days of the acquisition of the Principal
Property (including, without limitation, acquisition by merger or
consolidation) or the completion of construction and commencement of operation
thereof, whichever is later; (5) the lease in such sale and leaseback
transaction is for a term, including renewals, of not more than three years;
or (6) the sale and leaseback transaction is entered into between the Company
and a Restricted Subsidiary or between Restricted Subsidiaries which in each
case shall include a Subsidiary which shall become a Restricted Subsidiary
after giving effect to such sale and leaseback transaction.
EVENTS OF DEFAULT
Unless otherwise provided in the Applicable Prospectus Supplement, any one
of the following events will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay
any interest on any Debt Security of that series when due, continued for 30
days; (b) failure to pay principal of or any premium on any Debt Security of
that series when due; (c) failure to deposit any sinking fund or other
payment, when due, in respect of any Debt Security of that series; (d) failure
to perform, or breach of, any other covenant or warranty of the Company in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Debt Securities thereunder other than that series)
continued for 90 days after written notice as provided in the Indenture; (e)
certain events in bankruptcy, insolvency or reorganization of the Company; (f)
acceleration of any indebtedness for money borrowed by the Company in an
aggregate principal amount exceeding $50,000,000 under the terms of the
instrument under which such indebtedness is issued or secured, if such
acceleration is not annulled, or such indebtedness is not discharged, within
15 business days after written notice as provided in the Indenture; or (g) any
other Event of Default provided with respect to Debt Securities of that
series.
If any Event of Default with respect to the Debt Securities of any series at
the time Outstanding occurs and is continuing, either the Trustee or the
Holder or Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Debt Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms thereof)
of all the Debt Securities of that series to be due and payable immediately.
At any time after a declaration of acceleration with respect to Debt
Securities of any series has been made, but before a judgment or decree based
on acceleration has been obtained, the Holders of a majority in aggregate
principal amount of Outstanding Securities of that series may, under certain
circumstances, rescind and annul such acceleration.
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Securities that are Original Issue Discount Securities for
the particular provisions relating to acceleration of the Stated Maturity of a
portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for
the indemnification of the Trustee and to certain other conditions, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Debt Securities of that series.
No Holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written
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notice of a continuing Event of Default and unless the Holders of at least 25%
in principal amount of the Outstanding Securities of that series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a Holder of a
Security for enforcement of payment of the principal of and premium, if any,
or interest on such Security on or after the respective due dates expressed in
such Security.
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holder or Holders of not less than the
majority in aggregate principal amount of the Outstanding Securities of each
series issued under the Indenture and affected by the modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder or Holders of all Debt Securities affected
thereby, (i) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security; (ii) reduce the
principal amount of, or the premium, if any, or (except as otherwise provided
in the Applicable Prospectus Supplement) interest on, any Security (including
in the case of an Original Issue Discount Security the amount payable upon
acceleration of the maturity thereof); (iii) change the place or currency of
payment of principal of, or premium, if any, or interest on any Security; (iv)
impair the right to institute suit for the enforcement of any payment on any
Security on or at the Stated Maturity thereof (or in the case of redemption,
on or after the Redemption Date); or (v) reduce the percentage in principal
amount of Outstanding Securities of any series, the consent of whose Holders
is required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults.
The Holder or Holders of at least a majority in aggregate principal amount
of the Outstanding Securities of any series may, on behalf of all Holders of
that series, waive compliance by the Company with certain restrictive
provisions of the Indenture. The Holder or Holders of not less than a majority
in aggregate principal amount of the Outstanding Securities of any series may,
on behalf of all Holders of that series, waive any past default under the
Indenture, except a default in the payment of principal, premium or interest
and in respect of a covenant or provision of the Indenture that cannot be
modified or amended without the consent of the Holder of each Outstanding
Security of such series affected thereby.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person (as
defined) or transfer or lease its assets substantially as an entirety to any
Person and may not permit any Person to merge into or consolidate with the
Company or transfer or lease its assets substantially as an entirety to the
Company, unless (i) any successor or purchaser is a Person organized under the
laws of the United States of America, any State or the District of Columbia,
and any such successor or purchaser expressly assumes the Company's
obligations on the Debt Securities under a supplemental Indenture, (ii)
immediately after giving effect to the transaction no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, (iii) if properties or assets
of the Company or a Restricted Subsidiary or any shares of capital stock or
indebtedness of any Restricted Subsidiary become subject to a mortgage or
other encumbrance not permitted by the Indenture, the Company or such
successor Person, as the case may be, takes such steps as shall be necessary
effectively to secure the Debt Securities equally and ratably with (or prior
to) all indebtedness secured thereby, and (iv) the Company has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel stating
compliance with these provisions.
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DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that, if such provision is made applicable to the
Debt Securities of any series pursuant to Section 3.1 of the Indenture, the
Company, at the Company's option, (a) will be discharged from any and all
obligations in respect of the Debt Securities of any series (except for
certain obligations to register the transfer of or exchange of Debt Securities
of such series, replace stolen, lost or mutilated Debt Securities of such
series, maintain paying agencies and hold moneys for payment in trust) or (b)
need not comply with certain restrictive covenants of the Indenture, including
those described under "Certain Covenants of the Company," and the occurrence
of an event described in clause (d) under "Events of Default" shall no longer
be an Event of Default, in each case, if the Company deposits, in trust, with
the Trustee money or U.S. Government Obligations, which, through the payment
of interest thereon and principal thereof in accordance with their terms, will
provide money in an amount sufficient to pay all the principal of, premium, if
any, and interest on the Debt Securities of such series on the dates such
payments are due (which may include one or more redemption dates designated by
the Company) in accordance with the terms of the Debt Securities of such
series. Such a trust may be established only if, among other things, (i) no
Event of Default or event which with the giving of notice or lapse of time, or
both, would become an Event of Default under the Indenture shall have occurred
and be continuing on the date of such deposit or on such later date specified
in the Indenture in the case of certain events in bankruptcy, insolvency or
reorganization of the Company, (ii) such deposit will not cause the Trustee to
have any conflicting interest with respect to other securities of the Company,
(iii) such defeasance will not result in a breach or violation of, or
constitute a default under, the Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound and (iv) the Company
shall have delivered an Opinion of Counsel to the effect that the Holders will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit or defeasance and will be subject to federal income tax in the
same manner as if such defeasance had not occurred, which Opinion of Counsel,
in the case of clause (a) above, must refer to and be based upon a published
ruling of the Internal Revenue Service, a private ruling of the Internal
Revenue Service addressed to the Company, or otherwise a change in applicable
federal income tax law occurring after the date of the Indenture. In the event
the Company omits to comply with its remaining obligations under the Indenture
after a defeasance of the Indenture with respect to the Debt Securities of any
series as described under clause (b) above and the Debt Securities of such
series are declared due and payable because of the occurrence of any Event of
Default, the amount of money and U.S. Government Obligations on deposit with
the Trustee may be insufficient to pay amounts due on the Debt Securities of
such series at the time of the acceleration resulting from such Event of
Default. However, the Company will remain liable in respect of such payments.
CONCERNING THE TRUSTEE
The First National Bank of Chicago is Trustee under the Indenture. The First
National Bank of Chicago serves as a co-agent under the Company's
Multicurrency Credit Agreement dated September 11, 1997 and performs routine
banking functions for the Company.
PLAN OF DISTRIBUTION
The Company may offer and sell the Debt Securities through agents, to or
through underwriters or dealers, which may include affiliates of the Company,
directly to one or more purchasers or through any combination of the
foregoing. The Prospectus Supplement with respect to any of the Debt
Securities will set forth the terms of the offering of such Debt Securities,
including the name or names of any underwriters, dealers or agents, the
purchase price of such Debt Securities, the proceeds to the Company from such
sale, any underwriting discounts or agency fees and other items constituting
underwriters' or agents' compensation, the public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Debt Securities may be listed.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
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If underwriters or dealers are used in the sale, the Debt Securities will be
acquired by the underwriters or dealers for their own accounts and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price, which may be changed, or at
varying prices determined at the time of sale. The Debt Securities may be
offered to the public either through underwriting syndicates represented by
one or more managing underwriters or directly by one or more of such firms.
Unless otherwise specified in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase such Debt Securities will be
subject to certain conditions precedent, and the underwriters will be
obligated to purchase all of such Debt Securities if any are purchased. Any
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contributions with respect to payments which the underwriters, dealers or
agents may be required to make in respect thereof. Underwriters, dealers and
agents, and affiliates thereof, may be customers of, engage in transactions
with, or perform services for the Company and its affiliates in the ordinary
course of business.
All Debt Securities will be issues of new securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the
Company for public offering and sale may make a market in such Debt
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given concerning the liquidity of the trading market for any Debt Securities.
LEGAL OPINIONS
Certain legal matters with respect to the Debt Securities will be passed
upon for the Company by Gary P. Schmidt, Esq., General Counsel of the Company
and for any underwriters or agents by Mayer, Brown & Platt, Chicago, Illinois.
Mr. Schmidt owns options to purchase 10,000 shares of Common Stock, of which
no such options are currently exercisable.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries as
of September 30, 1997 and 1996, and for each of the years in the three-year
period ended September 30, 1997 and the financial statement schedule for the
three-year period ended September 30, 1997 have been incorporated by reference
herein in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS
PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
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<S> <C>
The Company............................................................... S-3
Recent Developments....................................................... S-3
Selected Financial Data................................................... S-4
Use of Proceeds........................................................... S-5
Capitalization............................................................ S-6
Management's Discussion and Analysis of Results of Operations and
Financial Condition...................................................... S-7
Description of the Debentures............................................. S-12
Underwriting.............................................................. S-15
Validity of the Debentures................................................ S-16
PROSPECTUS
<CAPTION>
PAGE
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<S> <C>
Available Information..................................................... 2
Documents Incorporated by Reference....................................... 2
The Company............................................................... 3
Use of Proceeds........................................................... 4
Ratio of Earnings to Fixed Charges........................................ 4
Selected Financial Data................................................... 5
Description of Debt Securities............................................ 6
Plan of Distribution...................................................... 14
Legal Opinions............................................................ 15
Experts................................................................... 15
</TABLE>
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$100,000,000
ALBERTO-CULVER COMPANY
% DEBENTURES DUE , 2028
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
BANCAMERICA ROBERTSON STEPHENS
FIRST CHICAGO CAPITAL MARKETS, INC.
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