THE FOLLOWING INFORMATION, DOCUMENT OR REPORT IS BEING MADE AVAILABLE BY SALLY HOLDINGS LLC TO THE HOLDERS OF ITS 9.25% SENIOR NOTES DUE 2014 AND ITS 10.5% SENIOR SUBORDINATED NOTES DUE 2016 AS WELL AS TO THE TRUSTEE FOR EACH SERIES OF NOTES PURSUANT TO SECTION 405 OF THE INDENTURE WITH RESPECT TO EACH SERIES OF NOTES. Form 8-K Sally Beauty Holdings, Inc. - SBH Filed: December 19, 2006 (period: December 19, 2006) Report of unscheduled material events or corporate changes.
Item 7.01 Regulation FD Disclosure Item 9.01 Financial Statements and Exhibits SIGNATURE EXHIBIT INDEX Table of Contents EX-99.1 (SCRIPTED QUESTIONS AND ANSWERS)
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: December 19, 2006 (Date of earliest event reported) SALLY BEAUTY HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 1-33145 36-2257936 (Commission file number) (State or other jurisdiction of incorporation) (I.R.S. Employer Identification Number) 3001 Colorado Boulevard Denton, Texas 76210 (Address of principal executive offices) (940) 898-7500 (Registrant s telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure On December 19, 2006, Sally Beauty Holdings, Inc. (the Company ) announced that (1) its Beauty Systems Group LLC subsidiary, other than its Armstrong-McCall division ( BSG ), will not retain its rights to distribute the professional products of the Professional Products Division of L Oreal USA S/D, Inc. ( L Oreal ) through its distributor sales consultants (effective January 30, 2007, with exclusivity ending December 31, 2006) or in its stores on an exclusive basis (effective January 1, 2007) in those geographic areas within the U.S. in which BSG currently has distribution rights, and (2) BSG s Armstrong McCall division will not retain the rights to distribute Redken professional products through distributor sales consultants or its stores. In replacement of these rights, BSG entered into long-term agreements with L Oreal under which, as of January 1, 2007, BSG will have non-exclusive rights to distribute the same L Oreal professional products in its stores that it previously had exclusive rights to in its stores and through its sales consultants. Armstrong McCall will retain its exclusive rights to distribute Matrix products in its territories. Attached as Exhibit 99.1 are scripted Questions and Answers (Q&A), dated December 19, 2006, to be used by the Company when discussing these developments with representatives of the financial community. In accordance with General Instruction B.2 of Form 8-K, the information included or incorporated in Item 7.01 of this report, including Exhibit 99.1, is being furnished to the Commission and shall not be deemed filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing. Item 9.01 Financial Statements and Exhibits (d) See exhibit index. 2
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: December 19, 2006 SALLY BEAUTY HOLDINGS, INC. By: /s/ Raal H. Roos Name: Raal H. Roos Title: Senior Vice President, General Counsel and Secretary 3
Exhibit Number EXHIBIT INDEX Description 99.1 Scripted Questions and Answers (Q&A), dated December 19, 2006, to be used by Sally Beauty Holdings, Inc. when discussing developments to its relationship with L Oreal with representatives of the financial community 4
Exhibit 99.1 Investor Q&A What did Sally Beauty Holdings, Inc. announce? On December 19, 2006, Sally Beauty Holdings, Inc. (the Company ) announced that (1) its Beauty Systems Group LLC subsidiary, other than its Armstrong-McCall division ( BSG ), will not retain its rights to distribute the professional products of the Professional Products Division of L Oreal USA S/D, Inc. ( L Oreal ) through its distributor sales consultants (effective January 30, 2007, with exclusivity ending December 31, 2006) or in its stores on an exclusive basis (effective January 1, 2007) in those geographic areas within the U.S. in which BSG currently has distribution rights, and (2) BSG s Armstrong McCall division will not retain the rights to distribute Redken professional products through distributor sales consultants or its stores. In replacement of these rights, BSG entered into long-term agreements with L Oreal under which, as of January 1, 2007, BSG will have non-exclusive rights to distribute the same L Oreal professional products in its stores that it previously had exclusive rights to in its stores and through its sales consultants. Armstrong McCall will retain its exclusive rights to distribute Matrix products in its territories. Are L Oreal products still going to be available in BSG/Sally Beauty Supply stores and through Armstrong McCall? Yes. L Oreal professional products will remain available in BSG stores that currently carry these products. Sally Beauty Supply stores, which carry a different selection of L Oreal products from those carried in BSG stores, are not impacted by these developments. Armstrong McCall will not retain the rights to distribute Redken professional products through its distributor sales consultants or its stores, but will retain its exclusive rights to distribute Matrix products in its territories. What are your next steps? BSG intends to begin marketing certain product lines that were previously unavailable through its outlets and also to expand existing product lines in new territories. BSG will be exploring ways to maximize the efficiency of its structure to mitigate the impact of these developments. BSG will encourage, through financial incentives, the retention of distributor sales consultants needed to effect the new business plan. BSG expects to shift a portion of its lost L Oreal distribution business into its BSG stores. BSG intends to continue expanding its business into underserved geographic areas, including Florida. What is the anticipated financial impact of these developments on your 2007 financials? We expect the impact of the loss of BSG s exclusive rights to distribute L Oreal professional products in BSG stores and by its distributor sales consultants to negatively impact our consolidated revenue by approximately $110 million during the last nine months of our 2007 fiscal year. This number includes anticipated ancillary impact on revenue from other products that may be indirectly affected by these developments. However, we expect to mitigate some of this impact through the actions described above.
Cautionary Language Concerning Forward-Looking Statements This Investor Q&A includes forward-looking statements within the meaning of the Private Securities Reform Act of 1995. All statements other than statements of historical information are forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company s control. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ from those in the forward-looking statements include: the effects of the substantial debt of the Company s subsidiaries; loss of the Company s subsidiaries distributorship rights; competition within relevant product markets; sales by unauthorized distributors in the Company s exclusive markets; dependence on certain suppliers of manufactured products and termination of distribution agreements with key suppliers that cover exclusive territories; the effect of consolidation in the beauty supply industry; the risk that the benefits from the Company s separation with Alberto-Culver Company may not be fully realized or may take longer to realize than expected; the impact of certain events on the tax-free treatment of the Company s separation; the Company s ability to maintain and/or improve sales and earnings performance; the Company s ability to attract and retain qualified personnel and key employees; risks inherent in acquisitions, dispositions and strategic alliances; foreign currency exchange and interest rate fluctuations; general economic, political and business conditions that would adversely affect the Company or its suppliers, distributors or customers; adverse weather conditions, natural disasters and acts of terrorism; changes in costs, including changes in labor costs, raw material prices or advertising and marketing expenses; the costs and effects of unanticipated legal or administrative proceedings; and disruption from the Company s separation with Alberto-Culver Company making it more difficult for the Company to maintain relationships with its customers, employees or suppliers. Forward-looking statements are made only as of the date of this Investor Q&A, and the Company does not undertake any obligation, other than as may be required by law, to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, changes in future operating results over time or otherwise. Created by 10KWizard www.10kwizard.comsource: Sally Beauty Holding, 8-K, December 19, 2006