NEW YORK — Two weeks away from a shareholder vote to split the company into two parts, Alberto-Culver ended its fiscal year on a high note, reporting a fourth-quarter profit surge of nearly 12 percent.
In a statement released Thursday, Alberto-Culver president and chief executive officer Howard Bernick declared fiscal 2006 a “transformational year” for the company, referring to plans to separate its consumer products business and its Sally beauty supplies business into two publicly traded companies.
“In the coming weeks, with shareholder approval and the satisfaction of other closing conditions, we will complete the separation and our shareholders will own 100 percent of the new Alberto-Culver…and 52.5 percent of the new Sally/BSG, a leading beauty supply distribution business, in addition to receiving $25 in cash for each share owned,” stated Bernick.
A fund managed by Clayton, Dubilier & Rice will own the remaining 47.5 percent of the Sally businesses. The spin-off will allow Alberto-Culver to move forward as a consumer products company.
For the fourth quarter ended Sept. 30, the maker of Nexxus and Alberto VO5 hair care products earned $65.8 million, or 70 cents a diluted share, up from $59 million, or 63 cents, in the prior year on sales that jumped 8.2 percent to $974.3 million from $900.7 million.
Excluding costs related to the split and other expenses, net earnings increased to 70 million, or 74 cents.
For the year, net earnings fell to $205.3 million, or $2.20 a share, from $210.9 million, or $2.27, on sales that rose 6.8 percent, to $3.8 billion from $3.5 billion. Excluding costs related to the split and other expenses, net earnings came in at $254 million, or $2.72 a share, for the year-end period. Expenses related to the failed deal to merge its Sally businesses with Regis Corp. reduced Alberto-Culver’s earnings by $38.3 million after tax. The company also incurred expenses, related to the decision to split the company into two, of $1 million after tax.
Bernick credited hair care brands Nexxus and TRESemmé, each backed by aggressive advertising spending, for driving 2006 sales of the consumer products group up 9.4 percent to $1.43 billion from $1.31 billion. He noted that, for the year, Alberto-Culver increased its global advertising spending by 17 percent to $306 million from $261 the prior year.