<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-49649
Prospectus Supplement to Prospectus Dated May 4, 1998.
$200,000,000
Alberto-Culver Company
8.25% Notes due November 1, 2005
----------------
Alberto-Culver will pay interest on the notes on November 1 and May 1 of
each year. The first such payment will be made on November 1, 2000. The notes
will be issued only in denominations of $1,000 and integral multiples of
$1,000.
Alberto-Culver has the option to redeem all or a portion of the notes at
any time. The redemption price will be based on the present value of the
scheduled payments of principal and interest remaining at the time of
redemption, plus accrued interest. The discount rate used will be based on a
U.S. Treasury security having a remaining life to maturity comparable to the
notes, plus 15 basis points. The redemption price will not be less than 100% of
the principal amount of the notes to be redeemed.
----------------
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
----------------
<TABLE>
<S> <C> <C>
Per Note Total
-------- -----
Initial public offering price............................ 99.88% $199,760,000
Underwriting discount.................................... 0.60% $ 1,200,000
Proceeds, before expenses, to Alberto-Culver............. 99.28% $198,560,000
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from April 3, 2000.
----------------
The underwriters expect to deliver the notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York on April 3, 2000.
Goldman, Sachs & Co.
Banc of America Securities LLC
Banc One Capital Markets, Inc.
----------------
Prospectus Supplement dated March 28, 2000.
<PAGE>
THE COMPANY
Alberto-Culver Company and its consolidated subsidiaries (which may be
referred to collectively as "we", "us", "our" or the "Company") have three
principal business segments. Our consumer products business includes two
segments, Alberto-Culver North America ("North America") and Alberto-Culver
International ("International"), which develop, manufacture, distribute and
market branded consumer products worldwide. North America includes our consumer
products operations in the United States and Canada while International sells
consumer products in more than 120 other countries. Our third segment,
"Specialty Distribution--Sally," consists of Sally Beauty Company ("Sally
Beauty"), a specialty distributor of professional beauty supplies through its
Sally Beauty stores and its full service operations.
Alberto-Culver North America
The major health and beauty care products that we market 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, FDS
feminine deodorant sprays and the TCB and MOTIONS lines of hair care products
for the ethnic market. Food and household products that we sell in the United
States include MRS. DASH salt alternatives, MOLLY McBUTTER butter flavor
sprinkles, SUGARTWIN sugar substitute and STATIC GUARD anti-static spray.
In Canada, we sell most of the products marketed in the United States along
with the ALBERTO and ALBERTO BALSAM lines of hair care products.
This segment also includes the manufacturing of custom label products in
the United States for other companies.
Alberto-Culver International
We manufacture and market health and beauty products throughout Scandinavia
and Europe through our Cederroth International subsidiary headquartered in
Sweden. Major products include SALVE adhesive bandages, ALBERTO VO5 hair care
products, SAMARIN antacids, SELTIN salt substitute, JORDAN toothbrushes, TOPZ
cotton buds, SAVETTE wet wipes, BLIW liquid soaps, DATE anti-perspirants and
cologne for women, FAMILY FRESH shampoo and shower products, SUKETTER
artificial sweetener, the ST. IVES SWISS FORMULA line of hair and skin care
products, HTH and L300 skin care products, GRUMME TVATTSAPA detergents and
PHARBIO natural pharmaceuticals.
In the United Kingdom, we manufacture and market products such as ALBERTO
VO5, ALBERTO BALSAM and TRESemme lines of hair care products and the ST. IVES
SWISS FORMULA line of hair and skin care products. We sell INDOLA professional
hair colors, shampoos, conditioners and styling products throughout Europe and
other international markets.
In Latin America, our significant products include the ALBERTO VO5, GET SET
and ANTIALL lines of hair care products, the ST. IVES SWISS FORMULA line of
hair and skin care products, VERITAS soap and deodorant body powder products
and FARMACO soap products. Our other major international markets include
Australia, Italy and New Zealand.
Specialty Distribution--Sally
Our Sally Beauty subsidiary operates a network of cash-and-carry
professional beauty supply stores and also sells professional beauty products
to hairdressers, beauticians and cosmetologists through its full-service
distribution business, Beauty Systems Group. Sally Beauty stores provide
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<PAGE>
salon owners, hairdressers and consumers with an extensive selection of hair
care and skin care products, cosmetics, styling appliances and other beauty
items. Beauty Systems Group distributes products in exclusive, licensed
territories in the Northeast, Midwest, Midsouth and Southeast United States and
Canada and only sells to the professional market through its stores and direct
sales forces. As of December 31, 1999, Sally Beauty had 2,203 stores in the
United States, Puerto Rico, the United Kingdom, Canada, Japan and Germany.
RECENT DEVELOPMENTS
On October 18, 1999, Beauty Systems Group acquired Heil Beauty Supply, a
full-service professional beauty products distributor headquartered in Paducah,
Kentucky. Heil sells professional beauty supply lines through a sales force of
approximately 60 people and 34 professional only cash-and-carry stores in
Arkansas, Kentucky and Tennessee and parts of Alabama, Illinois, Indiana,
Mississippi, Missouri and West Virginia. Heil Beauty is the exclusive Paul
Mitchell products distributor in Kentucky, Tennessee and parts of Arkansas and
offers the Graham Webb line of professional products throughout most of their
territory.
In addition, on January 26, 2000, Beauty Systems Group acquired Macon
Beauty Supply, a full-service distributor of professional beauty products
headquartered in Macon, Georgia. Macon sells professional beauty product lines
through a sales force of approximately 70 people and 22 professional only cash-
and-carry stores. Macon is the distributor of the Matrix, L'Oreal, Graham Webb,
OPI and Creative Nail professional product lines in a territory which includes
eastern Alabama, northern Florida, southern Virginia, Georgia, North and South
Carolina.
On March 23, 2000, the Company purchased Pro-Line Corporation, a leading
manufacturer and marketer of personal care products for the African-American
market, headquartered in Dallas, Texas. Pro-Line manufactures and markets
products under the brand names of SOFT & BEAUTIFUL and JUST FOR ME.
The acquisitions of Heil Beauty Supply, Macon Beauty Supply and Pro-Line
Corporation were financed with borrowings under our $200 million revolving
credit facility, which borrowings will be repaid with a portion of the net
proceeds of this offering. See "Use of Proceeds."
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SELECTED FINANCIAL DATA
The selected financial data appearing below should be read together with
the consolidated financial statements, notes and other financial information we
are incorporating by reference. The selected financial data for, and as of the
end of, each of the fiscal years 1995 through 1999 are derived from our audited
consolidated financial statements. The selected financial data for, and as of
the end of, the three months ended December 31, 1999 and 1998, is derived from
our unaudited consolidated financial statements. In our opinion, the unaudited
consolidated financial statements reflect all adjustments, consisting only of
normal, recurring adjustments, necessary for a fair presentation of such
periods. Our results of operations for the three months ended December 31,
1999, do not necessarily indicate what our operating results will be for the
full fiscal year.
<TABLE>
<CAPTION>
Three Months Ended
December 31, Year Ended September 30,
------------------- -------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- --------- ---------
(In thousands, except
per share and ratio data)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Results:
Net sales............... $ 525,799 464,551 1,975,928 1,834,711 1,775,258 1,590,409 1,358,219
Cost of products sold... 257,370 228,757 973,702 902,095 880,416 805,080 682,589
Interest expense........ 4,172 3,252 14,849 12,170 11,826 15,905 9,946
Earnings before non-
recurring gain and
income taxes (1)....... 31,069 29,438 133,783 132,378 120,487 100,014 84,242
Provision for income
taxes (1).............. 10,253 10,818 47,493 49,311 44,881 37,270 31,591
Net earnings before non-
recurring gain (1)..... 20,816 18,620 86,290 83,067 75,606 62,744 52,651
Net earnings per share
before
non-recurring gain (1)
(2):
Basic.................. .37 .33 1.53 1.46 1.35 1.13 .95
Diluted................ .37 .32 1.51 1.37 1.25 1.06 .94
Weighted average shares
outstanding (2):
Basic.................. 55,708 57,082 56,378 56,845 55,967 55,571 55,430
Diluted................ 56,432 57,969 57,162 62,420 63,377 62,776 57,053
Shares outstanding at
period end (2):
Class A................ 22,778 23,873 22,768 24,063 22,610 22,097 21,926
Class B................ 32,957 33,147 32,957 33,148 33,533 33,533 33,533
Financial Condition:
Ratio of earnings to
fixed
charges (3)............ 4.1x 4.5x 4.5x 5.0x 4.8x 4.0x 4.3x
Current ratio........... 2.03 to 1 1.99 to 1 1.92 to 1 1.89 to 1 1.86 to 1 1.79 to 1 2.28 to 1
Working capital......... $ 335,784 283,196 309,153 277,940 269,007 226,123 301,706
Cash, cash equivalents
and short-term
investments............ 53,443 46,629 57,816 73,305 87,600 71,557 146,985
Property, plant and
equipment, net......... 236,267 223,437 238,753 223,476 190,998 175,920 157,791
Total assets............ 1,202,610 1,048,905 1,184,534 1,068,184 1,000,059 909,266 815,086
Long-term debt.......... 235,613 170,544 225,173 171,760 149,441 161,548 183,094
Stockholders' equity.... 586,755 543,749 568,820 533,991 497,004 425,096 370,903
Cash dividends.......... 3,618 3,429 14,394 13,220 10,909 9,724 8,590
Cash dividends per share
(2) (4)................ .065 .060 .255 .230 .195 .175 .155
</TABLE>
- --------
(1) The operating results for the three months ended December 31, 1999 exclude
a non-recurring gain from the sale of a trademark. Pre-tax earnings
including the non-recurring gain were $40.3 million. Net earnings including
the gain were $26.8 million, after deducting income taxes of $13.5 million,
resulting in basic and diluted earnings per share of $0.48.
The operating results for the fiscal year ended September 30, 1997 exclude
a non-recurring gain from an insurance settlement for the loss of the
Company's corporate airplane. 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, resulting in basic
earnings per share of $1.53 and diluted earnings per share of $1.41.
(2) Net earnings per share, shares outstanding and cash dividends per share
have been restated to reflect the 100% stock dividend on the Company's
Class A and Class B outstanding shares in February, 1997.
(3) The ratios of earnings to fixed charges for the three months ended
December 31, 1999 and for the fiscal year ended September 30, 1997 exclude
the non-recurring gains discussed in note (1) above. Including the non-
recurring gains, the ratio of earnings to fixed charges was 5.0x for the
three months ended December 31, 1999 and 5.3x for the fiscal year ended
September 30, 1997.
(4 Cash 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.
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USE OF PROCEEDS
The net proceeds from the sale of the notes are estimated to be
approximately $198.6 million, before expenses. We will use $149.0 million of
the net proceeds to repay loans under our $200 million revolving credit
facility. These loans were incurred primarily to fund acquisitions. Such loans
mature on dates between April 6, 2000 and May 11, 2000 (subject to being rolled
over under the terms of the revolving credit facility) and the loans have a
weighted average interest rate of 6.21%. The remaining net proceeds will be
used for other potential acquisitions, if suitable opportunities arise, for
general corporate purposes and, subject to market conditions, for possible
additional repurchases of Class A Common Stock under the stock repurchase
program. Pending the application of the net proceeds for such purposes, we may
invest such proceeds in short-term, marketable securities. See "Recent
Developments," "Capitalization" and "Underwriting."
CAPITALIZATION
The following table shows our consolidated capitalization as of December
31, 1999 and "as adjusted" to give effect to the sale of the notes by the
Company and the application of the estimated net proceeds as described under
"Use of Proceeds." The table should be read together with the consolidated
financial statements, notes and other financial information we are
incorporating by reference.
<TABLE>
<CAPTION>
(Unaudited)
December 31, 1999
---------------------
Actual As Adjusted
-------- -----------
(In thousands)
<S> <C> <C>
Short-term borrowings and current maturities of long-term
debt.................................................... $ 5,358 5,358
======== ========
Long-term debt, excluding current maturities:
6.2% term note due September, 2000..................... $ 20,000 20,000
Revolving Swedish krona credit agreement............... 19,946 19,946
Revolving credit facility(1)........................... 74,000 --
6.375% debentures due June, 2028(2).................... 120,000 120,000
8.25% notes due November 1, 2005 offered hereby........ -- 200,000
Other.................................................. 1,667 1,667
-------- --------
Total long-term debt................................. 235,613 361,613
-------- --------
Stockholders' equity:
Common stock, par value $.22 per share:
Class A authorized 75,000,000 shares; issued
30,612,798 shares(3)................................ 6,735 6,735
Class B authorized 75,000,000 shares; issued
37,710,655 shares................................... 8,296 8,296
Additional paid-in capital............................. 190,078 190,078
Retained earnings...................................... 623,845 623,845
Accumulated other comprehensive income--foreign
currency translation.................................. (35,872) (35,872)
Treasury stock, at cost (Class A Common Stock--
7,835,028 shares; Class B Common Stock--4,753,184
shares)(4)............................................ (206,327) (206,327)
-------- --------
Total stockholders' equity........................... 586,755 586,755
-------- --------
Total capitalization..................................... $822,368 948,368
======== ========
</TABLE>
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(1) We have a $200 million revolving credit facility which expires September,
2002. The facility may be drawn in U.S. dollars or certain foreign
currencies. From January 1, 2000 through March 28, 2000, the Company
borrowed an additional $75.0 million under the revolving credit facility,
increasing the total amount outstanding to $149.0 million. See "Recent
Developments."
(2) The debentures are subject to repayment, in whole or in part, on June 15,
2008 at the option of the holders.
(3) Does not include 5,136,215 shares of Class A Common Stock issuable upon the
exercise of outstanding employee and director stock options as of December
31, 1999.
(4) Includes 144,900 shares of Class A Common Stock that the Company
repurchased during the fiscal quarter ended December 31, 1999.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations
Three Months Ended December 31, 1999 and 1998
The Company achieved record first quarter net sales of $525.8 million in
fiscal year 2000, up $61.2 million or 13.2% over the comparable period of
fiscal year 1999.
Net earnings for the three months ended December 31, 1999 were $26.8
million, including the non-recurring gain, or 44.1% higher than the same period
of the prior year. Basic and diluted earnings per share were 48 cents in fiscal
year 2000.
The Company sold a European trademark owned by its Indola professional
business in the first quarter of fiscal year 2000. As a result, the Company
recognized a non-recurring pre-tax gain of $9.3 million and an increase in net
earnings of $6.0 million. Accordingly, basic and diluted earnings per share
increased 11 cents as a result of the gain.
Net earnings before the non-recurring gain for the three months ended
December 31, 1999 were $20.8 million or 11.8% higher than the same period of
the prior year. Basic earnings per share before the non-recurring gain were 37
cents in fiscal year 2000 compared to 33 cents in fiscal year 1999. Diluted
earnings per share before the non-recurring gain increased 15.6% to 37 cents
from 32 cents in fiscal year 1999.
Compared to the same period of the prior year, sales for North America
increased 9.4% in the first quarter of fiscal year 2000. The increase was
primarily due to higher sales of the ALBERTO VO5 Herbals line of shampoos and
conditioners, ST. IVES SWISS FORMULA facial products and the MOTIONS line of
hair care products.
Sales of International were $113.1 million for the current quarter, up
11.5% compared to last year. Sales for the first quarter of fiscal year 2000
were negatively impacted by the effect of foreign exchange rates. Had foreign
exchange rates this year been the same as the first quarter of fiscal year
1999, International sales would have increased 16.5%. The growth in
International sales was principally due to the launch of Advanced ALBERTO VO5
hair care products in certain international markets and acquisitions in Latin
America.
The Specialty Distribution--Sally business segment achieved a sales
increase of $40.6 million or 15.9% for the quarter ended December 31, 1999. The
increase was attributable to higher sales for established Sally Beauty outlets,
the addition of stores during the year and the expansion of Sally Beauty's full
service and foreign operations. At December 31, 1999, Sally Beauty had 2,203
stores offering a full range of professional beauty supplies.
Cost of products sold as a percentage of net sales for the first quarter
was 48.9% as compared to 49.2% for the first quarter of the prior year. The
decrease in the cost of goods sold percentage was primarily due to improvements
for International from the launch of the higher margin Advanced ALBERTO VO5
hair care products along with higher margin sales from the acquired operations
in Argentina and Chile. In addition, Sally Beauty's cost of goods sold
percentage decreased principally due to an increase in higher margin retail
sales and volume purchase discounts.
Advertising, promotion, selling and administrative expenses increased 14.8%
in the first quarter of fiscal year 2000. The increase primarily resulted from
the higher selling and administration costs associated with the growth of the
Sally Beauty business and higher expenditures for advertising, promotion and
market research.
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<PAGE>
Advertising, promotion and market research expenditures totaled $73.2
million for the current period versus $65.0 million for the comparable period
of the prior year. The higher expenses in fiscal year 2000 were mainly
attributable to increased advertising and promotion expenditures for
International as a result of the launch of Advanced ALBERTO VO5 and
acquisitions in Latin America.
Net interest expense increased $901,000 for the first quarter compared to
the same period of the prior year. The increase was primarily due to additional
borrowings under the Company's revolving credit facility.
The provision for income taxes as a percentage of earnings before income
taxes and before the non-recurring gain was 33.00% for the first quarter of
fiscal year 2000 and 36.75% for the same period in the prior year. The lower
tax rate in 2000 was mainly due to the realization of certain tax benefits and
the favorable closing of certain tax years.
Fiscal Years Ended September 30, 1999, 1998 and 1997
Fiscal year 1999 marked the Company's eighth consecutive year of record
sales and record operating earnings. Net sales for the year ended September 30,
1999 were $1.98 billion, an increase of 7.7% over prior year sales of $1.83
billion. Net sales in 1997 were $1.78 billion.
Record net earnings of $86.3 million in 1999 increased 3.9% from 1998 net
earnings of $83.1 million. Basic earnings per share of $1.53 were 7 cents or
4.8% higher than 1998 and diluted earnings per share were $1.51, an increase of
14 cents or 10.2% from 1998. Excluding the 1997 non-recurring gain, net
earnings were $75.6 million in 1997, representing basic earnings per share of
$1.35 and diluted earnings per share of $1.25.
During fiscal 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 in 1997
increased 18 cents and diluted earnings per share increased 16 cents as a
result of the gain. Fiscal 1998 net earnings decreased $2.4 million or 2.8%
compared to fiscal 1997 net earnings including the non-recurring gain.
Sales of North America consumer products in 1999 were $455.5 million, which
approximated 1998 sales of $458.2 million. The 1999 decrease primarily resulted
from sales declines for the CORTEXX and VO FINE hair care lines which were new
products introduced in fiscal years 1997 and 1998, respectively, partially
offset by higher 1999 sales for ALBERTO VO5 Herbals shampoo and conditioner and
the relaunch of ST. IVES SWISS FORMULA facial products. In 1998, sales
decreased 6.5% compared to 1997 sales of $490.2 million primarily due to lower
sales for custom label filling operations, ST. IVES SWISS FORMULA facial
products and ALBERTO VO5 shampoo and conditioner.
International consumer products sales increased 5.0% to $441.4 million in
1999 compared to $420.5 million in 1998. The fiscal 1999 results were
negatively impacted by the effect of foreign exchange rates. Had foreign
exchange rates in fiscal 1999 been the same as fiscal 1998, International sales
would have increased 8.0%, primarily due to acquisitions in Latin America and
the launch of Advanced ALBERTO VO5 in several overseas markets. International
sales in 1998 were relatively unchanged compared to sales in 1997.
Sales of the Specialty Distribution--Sally business segment crossed the
billion dollar sales threshold in 1999, reaching $1.1 billion compared to
$972.8 million and $879.2 million in 1998 and 1997, respectively. The sales
increases of 12.8% in 1999 and 10.6% in 1998 were attributable to sales gains
for established Sally Beauty outlets, the addition of stores during the year
and the expansion of Sally Beauty's full service and foreign operations through
acquisitions and internal
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growth. The number of Sally Beauty stores increased 30.3% during the last three
fiscal years to a total of 2,157 at the end of fiscal 1999 compared to 1,998
and 1,833 at the end of 1998 and 1997, respectively.
Cost of products sold as a percentage of sales was 49.3% in fiscal year
1999 compared to 49.2% in 1998 and 49.6% in 1997. The slight increase in the
cost of goods sold percentage in 1999 was principally due to the growth of
Sally Beauty, which has a higher cost of goods sold as a percentage of sales.
The lower cost of products sold percentage in 1998 compared to the prior year
was primarily due to cost savings and changes in product mix favoring higher
margin products.
Advertising, promotion, selling and administrative expenses increased 8.1%
in 1999 and 3.3% in 1998. The increases in 1999 and 1998 primarily resulted
from the higher selling and administration costs associated with the growth of
the Sally Beauty business.
Advertising, promotion and market research expenditures were $259.7
million, $257.7 million and $255.3 million in 1999, 1998 and 1997,
respectively. The higher expenses in 1999 were mainly attributable to increased
advertising and promotion expenditures for International as a result of
acquisitions in Latin America and the launch of Advanced ALBERTO VO5 in several
overseas markets. These increases are partially offset by lower advertising and
promotion expenditures for North America's CORTEXX and VO FINE hair care lines,
which were new products in 1997 and 1998, respectively.
Interest expense, net of interest income, was $12.7 million, $8.6 million
and $8.2 million in 1999, 1998 and 1997, respectively. Interest expense was
$14.8 million in 1999 versus $12.2 million in 1998 and $11.8 million in 1997.
The increase in interest expense in 1999 was primarily attributable to the $120
million of 6.375% debentures issued on June 15, 1998 and new borrowings under
the domestic revolving credit facility in 1999. Interest income in 1999 was
$2.1 million, compared to $3.6 million in 1998 and $3.6 million in 1997. The
decrease in 1999 was principally due to lower investments.
The provision for income taxes as a percentage of earnings before income
taxes was 35.5% in 1999 and 37.3% in 1998 and 1997. The lower tax rate in 1999
was primarily due to the favorable closing of certain tax years.
Financial Condition
Working capital at September 30, 1999 was $309.2 million, an increase of
$31.3 million from the prior year's working capital of $277.9 million. The
resulting current ratio was 1.92 to 1.00 at September 30, 1999 compared to 1.89
to 1.00 at the end of the prior fiscal year. Working capital of $335.8 million
at December 31, 1999 was $26.6 million higher than the September 30, 1999
balance of $309.2 million. The current ratio was 2.03 to 1.00 at December 31,
1999.
Accounts receivable increased 11.6% to $144.1 million at September 30, 1999
from $129.1 million at the end of the prior fiscal year. The increase was
principally due to acquisitions in Latin America along with higher accounts
receivables related to the 12.2% sales increase in the fourth quarter of fiscal
year 1999.
Inventories were $421.9 million at September 30, 1999, up 14.3% compared to
$369.2 million at the end of the prior fiscal year. The increase was primarily
due to higher inventories needed to support the growth of Sally Beauty.
Net property, plant and equipment increased $15.3 million to $238.8 million
at September 30, 1999. The increase resulted primarily from additional Sally
Beauty stores, acquisitions by International and Sally Beauty, warehouse and
office expenditures, and outlays for machinery, equipment and information
systems, partially offset by depreciation during fiscal 1999.
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<PAGE>
Goodwill and trade names, net of amortization, was $245.1 million as of
September 30, 1999, up $40.3 million from the end of fiscal year 1998. The
increase in goodwill and trade names was due to additional goodwill from
acquisitions by International and Sally Beauty partially offset by amortization
and the effects of foreign exchange rates.
Accounts payable of $198.9 million at September 30, 1999 increased $21.3
million compared to 1998, primarily due to acquisitions and higher Sally Beauty
inventories.
Long-term debt increased $53.4 million to $225.2 million at September 30,
1999, principally due to borrowings under the Company's domestic revolving
credit facility. Total borrowings increased $12.1 million to $241.0 million
during the first three months of fiscal year 2000. The increase was principally
due to additional borrowings under the Company's revolving credit facility
primarily to fund acquisitions. At December 31, 1999, the Company had $126.0
million available under its revolving credit facility. See "Capitalization."
Total stockholders' equity increased $34.8 million to $568.8 million at
September 30, 1999. The increase was primarily due to net earnings for the
fiscal year, partially offset by the purchase of 1.6 million Class A common
shares and 190,000 Class B common shares for the treasury and dividend
payments.
Liquidity and Capital Resources
The Company's primary sources of cash over the past three years have been
from funds provided by operating activities, the issuance of $120 million of
6.375% debentures in June, 1998 and the borrowing of $56 million under the
domestic revolving credit facility in fiscal year 1999. Operating activities
provided cash of $89.9 million, $110.4 million and $79.7 million in 1999, 1998
and 1997, respectively.
The Company has obtained long-term financing as needed to fund acquisitions
and other growth opportunities. Funds also may be obtained prior to their
actual need in order to take advantage of opportunities in the debt markets. In
June, 1998, the Company issued $120 million of 6.375% debentures due June,
2028. As a result, the Company had, prior to this offering, $230 million
remaining on its $350 million shelf registration of debt securities that was
filed with the Securities and Exchange Commission in April, 1998. In September,
1997, the Company obtained a five-year, $200 million revolving credit facility.
The facility, which had $56.0 million outstanding at September 30, 1999 and
$74.0 million outstanding at December 31, 1999, may be drawn in U.S. dollars or
in certain foreign currencies. Under debt covenants, as of September 30, 1999
and December 31, 1999, the Company had the ability to incur up to $624 million
and $638 million, respectively, of additional borrowings. See "Capitalization."
The primary uses of cash during the three-year period ending September 30,
1999 have been for acquisitions of $111.8 million, purchases of treasury stock
of $185.7 million, capital expenditures of $162.0 million and cash dividends of
$38.5 million.
Compared to 1996, cash dividends per share increased 45.7% over the three-
year period ended September 30, 1999. Cash dividends paid on Class A and Class
B common stock were $.255 per share in fiscal year 1999, $.230 per share in
fiscal year 1998 and $.195 per share in fiscal year 1997.
The Company anticipates that cash flows from operations and available
credit will be sufficient to fund operational requirements in future years.
During fiscal year 2000, 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
S-9
<PAGE>
common stock depending on market conditions. During fiscal years 1998 and
1999, the Board of Directors authorized the Company to purchase up to 9.0
million shares of its Class A common stock. As of September 30, 1999 and
December 31, 1999, 1.9 million and 1.7 million Class A shares, respectively,
remained available for purchase under these authorizations.
Year 2000 Readiness Disclosure
As of the date hereof, the Company has not experienced any significant
business interruptions as a result of Year 2000 ("Y2K") issues. However, Y2K
problems could occur during the Year 2000, but as time passes the likelihood
of encountering problems will diminish. If Y2K problems develop, every effort
will be made to correct the problems before the business is impacted in any
significant manner. A Y2K rapid response team at each business unit is being
maintained to address Y2K problems efficiently and to communicate the problems
to the Company's Y2K coordinators.
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.
Market Risk
As a multinational corporation that manufactures and markets products in
countries throughout the world, the Company is subject to certain market
risks, including foreign currency, interest rates and government actions. The
Company uses a variety of practices to manage these market risks, including,
when considered appropriate, derivative financial instruments. The Company
uses derivative financial instruments only for risk management and does not
use them for trading or speculative purposes.
The Company is exposed to potential gains or losses from foreign currency
fluctuations affecting net investments and earnings denominated in foreign
currencies. The Company's primary exposures are to changes in exchange rates
for the U.S. dollar versus the Swedish krona, the British pound sterling, the
Canadian dollar, the Australian dollar, the Mexican peso and the Argentine
peso.
The Company's various currency exposures often offset each other,
providing a natural hedge against currency risk. Periodically, specific
foreign currency transactions (e.g. inventory purchases, royalty payments,
etc.) are hedged with forward contracts to reduce the foreign currency risk.
Gains and losses on these foreign currency hedges are included in the basis of
the underlying hedged transactions. As of September 30, 1999 and December 31,
1999, the Company had no material outstanding foreign currency contracts.
Interest rate risk is managed through a combination of fixed rate and
variable rate debt with varying maturities. At September 30, 1999, variable
rate long-term debt was $64.9 million or 28.8% of total long-term debt and at
December 31, 1999 was $76.3 million or 32.4% of total long-term debt.
The Company periodically uses interest rate swaps to manage interest rate
risk on debt securities. These instruments allow the Company to exchange
variable rate debt into fixed rate or fixed rate debt into variable rate.
Interest rate differentials paid or received on these arrangements are
recognized as adjustments to interest expense over the life of the agreement.
At September 30, 1999 and December 31, 1999, the Company had no interest rate
swaps outstanding.
S-10
<PAGE>
The Company is exposed to credit risk on certain assets, primarily cash
equivalents, short-term investments and accounts receivable. The credit risk
associated with cash equivalents and short-term investments is mitigated by the
Company's policy of investing in securities with high credit ratings and
investing through major financial institutions with high credit ratings.
The Company provides credit to customers in the ordinary course of business
and performs ongoing credit evaluations. Concentrations of credit risk with
respect to trade receivables are limited due to the large number of customers
comprising the Company's customer base. The Company currently believes its
allowance for doubtful accounts is sufficient to cover customer credit risks.
FORWARD LOOKING STATEMENTS
This Prospectus Supplement, the Prospectus and the documents incorporated
by reference herein and therein may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. 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, loss of distributorship rights and the ability to develop
and successfully introduce new products; uncertainties pertaining to Y2K
computer exposures; 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 Supplement, the
Prospectus or any incorporated document.
DESCRIPTION OF THE NOTES
The following description is a summary of the particular terms of the
notes. This summary supplements the description of the general terms and
provisions of the notes set forth under "Description of Debt Securities" in the
Prospectus dated May 4, 1998.
General
We will issue the notes as a separate series of debt securities under the
Indenture dated as of June 10, 1998 between the Company and Bank One Trust
Company, National Association (as successor in interest to The First National
Bank of Chicago), as trustee. The Indenture is described more fully in the
accompanying Prospectus.
We will issue notes with an aggregate principal amount of $200,000,000. We
will issue notes in denominations of $1,000 and integral multiples of $1,000.
The notes will mature on November 1, 2005 and will be unsecured obligations.
The notes will rank equally with all our other unsecured and unsubordinated
debt. However, since substantially all of our operations are conducted through
subsidiaries, the cash flow and the consequent ability to service debt,
including the notes, of the Company are dependent upon the earnings of our
subsidiaries and the distribution of those earnings to, or upon loans or other
payments of funds by those subsidiaries to us. The payment of dividends and the
making of loans and advances to us by our subsidiaries may be subject to
statutory and contractual restrictions and are subject to various business
considerations. As of February 29, 2000, our subsidiaries would have had
approximately $27.6 million of outstanding indebtedness after giving effect to
the application of the proceeds of this offering.
S-11
<PAGE>
Interest on the notes will accrue from April 3, 2000 at an annual rate of
8.25%. Interest will be payable semi-annually on November 1 and May 1 beginning
on November 1, 2000, and at maturity. Interest will be computed on the basis of
a 360-day year consisting of twelve 30-day months. We will make each interest
payment to the persons in whose names the notes are registered at the close of
business on the October 15th or April 15th before the interest payment date.
Optional Redemption
The notes will be redeemable, in whole or in part, at our option at any
time. The redemption price for the notes to be redeemed will equal the greater
of the following amounts, plus, in each case, accrued interest thereon to the
redemption date:
. 100% of the principal amount of such notes; or
. as determined by a Reference Treasury Dealer (as defined below), the sum
of the present values of the remaining scheduled payments of principal
and interest on the notes (not including any portion of any payments of
interest accrued as of the redemption date) discounted to the redemption
date on a semiannual basis at the Adjusted Treasury Rate (as defined
below) plus 15 basis points.
The redemption price will be calculated assuming a 360-day year consisting of
twelve 30-day months.
"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.
"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 notes 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 such notes.
"Comparable Treasury Price" means, with respect to any redemption date, (A)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co., Banc of
America Securities LLC, and Banc One Capital Markets, Inc. and their respective
successors and any other primary U.S. Government securities dealer in New York
City selected by the trustee after consultation with us.
"Reference Treasury Dealer Quotation" 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.
We will mail notice of any redemption at least 30 days but not more than 60
days before the redemption date to each registered holder of the notes to be
redeemed.
S-12
<PAGE>
Unless we default in payment of the redemption price, on and after the
redemption date interest will cease to accrue on the notes or portions thereof
called for redemption.
The notes will not be entitled to the benefit of a sinking fund.
Covenants and Events of Default
Covenants with respect to the notes and the events of default under the
notes are described in the accompanying Prospectus.
Book-Entry System
We will issue the notes in the form of one or more fully registered global
securities (collectively, the "Global Note"). The Company will deposit the
Global Note with, or on behalf of, The Depository Trust Company, New York, New
York (the "Depositary") and will register it in the name of the Depositary's
nominee. Except as set forth below, the Global Note may be transferred only to
another nominee of the Depositary or to a successor depositary or its nominee.
The Depositary has advised the Underwriters and us as follows:
The Depositary is a limited-purpose trust company created to hold
securities for its participating organizations. The Depositary also facilitates
the clearance and settlement of transactions in those securities among
participants through electronic computerized book-entry changes in
participants' accounts. This eliminates the need for physical movement of
securities certificates. Participants include securities brokers and dealers,
banks, trust companies, clearing corporations, and other organizations. The
Depositary is owned by a number of its participants and by the New York Stock
Exchange, Inc., the American Stock Exchange LLC, and the National Association
of Securities Dealers, Inc. Access to the Depositary's system is also available
to indirect participants such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. The rules applicable to the
Depositary and its participants are on file with the Securities and Exchange
Commission.
Pursuant to procedures established by the Depositary:
(1) upon deposit of the Global Note, the Depositary will credit the
accounts of its participants for purchases of notes (notes must be
purchased by or through participants); and
(2) ownership of interests in the Global Note will be shown on, and
the transfer of ownership of interests will be effected only
through, the records of participants and indirect participants.
Owners of interests in the Global Note will not have notes registered in
their names, will not receive physical delivery of notes in certificated form
and will not be considered the registered owners or holders of the notes under
the Indenture for any purpose. They will not receive written confirmation from
the Depositary of their purchase of an interest in the Global Note. The
participant or indirect participant through which beneficial owners purchased
their interests should give written confirmations to them providing details of
the transactions, as well as periodic statements of their holdings.
The Depositary registers all notes deposited by participants in the name of
the Depositary's partnership nominee, Cede & Co. This facilitates subsequent
transfers but does not have any effect on beneficial ownership. The records of
the Depositary only identify the participants to whose accounts such notes are
credited. These may or may not be the beneficial owners. The Depositary has no
knowledge of the actual beneficial owners of the notes. The participants and
indirect participants will remain responsible for keeping account of their
holdings on behalf of their customers.
S-13
<PAGE>
Arrangements among the Depositary, participants, indirect participants and
beneficial owners of interests in the notes will govern the conveyance of
notices and other communications among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
We will send any redemption notices to the Depositary. If we redeem only a
portion of the notes, the Depositary will determine by lot the amount of the
interest of each participant in the notes to be redeemed.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the notes. Under its usual procedures, the Depositary will mail an omnibus
proxy to the Company as soon as possible after a record date for a consent
solicitation. The omnibus proxy assigns Cede & Co.'s consenting or voting
rights to those participants to whose accounts the notes are credited on the
applicable record date (identified in a listing attached to the omnibus proxy).
We will make principal and interest payments on the notes to the
Depositary. The Depositary's practice is to credit participants' accounts on
the payable date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payment on the payable date. Participants and indirect participants
will be responsible for all payments to beneficial owners of interests in the
notes. These payments 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." The Depositary, the trustee and the
Company are not responsible for such payments, subject to any statutory or
regulatory requirements as may be in effect from time to time. The Depositary
is responsible for disbursing payments of principal and interest from the
Company or the trustee to participants. Participants are responsible for
disbursing these payments to indirect participants who clear through or
maintain a custodial relationship with them. Participants and indirect
participants are responsible for disbursing these payments to the beneficial
owners of interests in the notes.
The Global Note will be exchangeable for notes in definitive form of like
terms if:
(1) the Depositary notifies us that it is unwilling or unable to
continue as depositary for the Global Note or if at any time the
Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934 and, in either case, we do not
appoint a successor depositary within 90 days of the occurrence of
the Depositary's ineligibility;
(2) in our discretion at any time, we determine not to have all of the
notes represented by the Global Note and notify the trustee
thereof; or
(3) an Event of Default has occurred and is continuing with respect to
the notes.
If the Global Note is exchangeable as a result of one of these conditions, it
shall be exchangeable for notes issuable in authorized denominations and
registered in such names as the Depositary holding the Global Note shall
direct. The Global Note is not otherwise exchangeable, except for a note or
notes of the same aggregate denominations to be registered in the name of the
Depositary or its nominee or in the name of a successor depositary or its
nominee.
Except as provided above, (1) owners of beneficial interest in such Global
Note will not be entitled to receive physical delivery of notes in definitive
form and will not be considered the Holders of the notes for any purpose under
the Indenture and (2) no notes represented by a Global Note will be
exchangeable. Accordingly, each person owning a beneficial interest in a Global
Note must rely on the procedures of the Depository (and if such person is not a
participant, on the procedures of the participant through which such person
owns its interest) to exercise any rights of a Holder under the Indenture or
such Global Note. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of the securities in definitive
form. Such laws may impair the ability to transfer beneficial interests in a
Global Note.
S-14
<PAGE>
We believe that the information in this section concerning the Depositary
and the Depositary's book-entry system has been obtained from reliable sources,
but we take no responsibility for its accuracy.
Same-Day Settlement and Payment
The Underwriters will make settlement for the notes in immediately
available or same-day funds. So long as the notes are represented by the Global
Note, we will make all payments of principal and interest in immediately
available funds.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, so long as the notes
are represented by the Global Note registered in the name of the Depositary or
its nominee, the notes will trade in the Depositary's Same-Day Funds Settlement
System. Secondary market trading activity in the notes represented by the
Global Note will be required by the Depositary to settle in immediately
available or same-day funds. We cannot give any assurance as to the effect, if
any, of settlement in same-day funds on trading activity in the notes.
Defeasance
The provisions described under "Description of Debt Securities--Defeasance
and Covenant Defeasance" in the accompanying Prospectus are applicable to the
notes.
Concerning the Trustee
Bank One Trust Company, National Association (as successor in interest to
The First National Bank of Chicago), an affiliate of Banc One Capital Markets,
Inc., acts as trustee under the Indenture and is an affiliate of Bank One, NA
which (1) acts as a co-agent under the Company's $200 million revolving credit
facility and (2) performs routine banking functions for the Company.
S-15
<PAGE>
UNDERWRITING
Alberto-Culver and the underwriters for the offering (the "Underwriters")
named below have entered into an underwriting agreement and a pricing agreement
with respect to the notes. Subject to certain conditions, each Underwriter has
severally agreed to purchase the principal amount of notes indicated in the
following table:
<TABLE>
<CAPTION>
Principal Amount
Underwriters of Notes
------------ ----------------
<S> <C>
Goldman, Sachs & Co...................................... $140,000,000
Banc of America Securities LLC........................... 40,000,000
Banc One Capital Markets, Inc............................ 20,000,000
------------
Total................................................ $200,000,000
============
</TABLE>
Notes sold by the Underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this Prospectus
Supplement. Any notes sold by the Underwriters to securities dealers may be
sold at a discount from the initial public offering price of up to 0.35% of the
principal amount of notes. Any such securities dealers may resell any notes
purchased from the Underwriters to certain other brokers or dealers at a
discount from the initial public offering price of up to 0.25% of the principal
amount of notes. If all the notes are not sold at the initial offering price,
the Underwriters may change the offering price and the other selling terms.
The notes are a new issue of securities with no established trading market.
Alberto-Culver has been advised by the Underwriters that the Underwriters
intend to make a market in the notes 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 notes.
In connection with the offering, the Underwriters may purchase and sell
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the Underwriters of a greater number of
notes than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the notes while the
offering is in progress.
The Underwriters also may impose a penalty bid. This may occur when a
particular Underwriter repays to the Underwriters a portion of the underwriting
discount received by it because the Underwriters have repurchased notes sold by
or for the account of such Underwriter in stabilizing or short covering
transactions.
These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the notes. As a result, the price of the notes may
be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued by the Underwriters at
any time. These transactions may be effected in the over-the-counter market or
otherwise.
Alberto-Culver estimates that its share of the total expenses for the
offering of the notes, excluding underwriting discounts and commissions, will
be approximately $200,000.
Alberto-Culver has agreed to indemnify the 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
S-16
<PAGE>
with the Company and affiliates of the Company. Bank of America N.A., an
affiliate of Banc of America Securities LLC, acts as the agent and Bank One,
NA, an affiliate of Banc One Capital Markets, Inc., acts as a co-agent, under
Alberto-Culver's $200 million revolving credit facility. See "Use of Proceeds."
Because affiliates of Banc of America Securities LLC and Banc One Capital
Markets, Inc. are receiving more than 10% of the net proceeds from this
offering, it is being conducted in accordance with Rule 2710(c)(8) of the
National Association of Securities Dealers.
LEGAL OPINIONS
Certain legal matters in connection with the notes offered hereby will be
passed upon for the Company by Gary P. Schmidt, General Counsel of the Company.
Certain legal matters in connection with the notes offered hereby will be
passed upon for the Underwriters by Mayer, Brown & Platt, Chicago, Illinois.
Mayer, Brown & Platt from time to time provides legal services to the Company.
Mr. Schmidt owns options to purchase 44,000 shares of Class A Common Stock and
owns 1,432 shares of Class A Common Stock and 6,774 shares of Class B Common
Stock.
S-17
<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.
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<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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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 dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You
must not rely on any unauthorized information or representations. This
prospectus is an offer to sell only the notes offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.
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TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
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<S> <C>
The Company............................................................... S-2
Recent Developments....................................................... S-3
Selected Financial Data................................................... S-4
Use of Proceeds........................................................... S-5
Capitalization............................................................ S-5
Management's Discussion and Analysis of Results of Operations and
Financial Condition...................................................... S-6
Forward Looking Statements................................................ S-11
Description of the Notes.................................................. S-11
Underwriting.............................................................. S-16
Legal Opinions............................................................ S-17
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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$200,000,000
Alberto-Culver Company
8.25% Notes
due November 1, 2005
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PROSPECTUS SUPPLEMENT
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Goldman, Sachs & Co.
Banc of America Securities LLC
Banc One Capital Markets, Inc.
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