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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED:
SEPTEMBER 30, 1998
-OR-
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 1-5050
ALBERTO-CULVER COMPANY
(Exact name of registrant as specified in its charter)
Delaware 36-2257936
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2525 Armitage Avenue
Melrose Park, Illinois 60160
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (708)450-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Class A Common Stock, par value $.22 per share New York Stock Exchange
Class B Common Stock, par value $.22 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was re-
quired to file such reports) and (2) has been subject to such filing require-
ments for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of common stock held by non-affiliates (assuming for
this purpose only that all directors and executive officers are affiliates) on
November 20, 1998 was $485.9 million for Class A Common Stock and $412.5 million
for Class B Common Stock.
At November 20, 1998, there were 23,914,132 shares of Class A Common Stock
outstanding and 33,147,471 shares of Class B Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II........ Portions of annual report to stockholders for the year
ended September 30, 1998, as specifically described
herein.
Part III.............. Portions of proxy statement and notice of annual
meeting of stockholders on January 28, 1999, as
specifically described herein.
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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K and the documents incorporated by reference
herein include certain 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 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 Alberto-Culver Company has no control.
Alberto-Culver Company disclaims any obligation to update any forward-looking
statement in this Annual Report on From 10-K or any incorporated document.
PART I
ITEM 1. BUSINESS
BUSINESS SEGMENTS AND GEOGRAPHIC AREA INFORMATION
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 and products intended for end use by
institutions and industries. The second segment, "Specialty Distribution -
Sally", consists of Sally Beauty Company, a specialty distributor of
professional beauty supplies with 1,998 stores as of September 30, 1998 in the
United States, Puerto Rico, the United Kingdom, Canada, Japan and Germany.
Financial information about business segments and geographic area information is
incorporated herein by reference to the "Business Segments and Geographic Area
Information" note of "Notes to Consolidated Financial Statements" in the
company's annual report to stockholders for the year ended September 30, 1998.
PRODUCTS
The classes of products in the "Consumer Products" business segment include
health and beauty care products as well as food and household products. Health
and beauty care products accounted for approximately 41%, 43% and 43% of the
company's consolidated net sales for the years ended September 30, 1998, 1997
and 1996, respectively. Food and household products accounted for approximately
6%, 7% and 8% of the company's consolidated net sales for the years ended
September 30, 1998, 1997 and 1996, respectively.
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
and STATIC GUARD anti-static spray. The company sold its Milani, Diafoods,
Thick-It and Smithers institutional food lines in July, 1996.
- 2 -
The company's consumer products are sold in more than 120 countries. Through its
Cederroth subsidiary, the company manufactures and markets health and beauty
care products throughout Scandinavia and Europe. Major products include SALVE
adhesive bandages, ALBERTO VO5 hair care products, SAMARIN antacids, SELTIN salt
substitute, LACTACYD liquid soap, 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, HEMANENT home permanents,
the ST. IVES SWISS FORMULA line of hair and skin care products, HTH and L300
skin care products and GRUMME TVATTSAPA detergents.
In the United Kingdom, the company markets, among other products, the ALBERTO
VO5 line of hair care products, the ST. IVES SWISS FORMULA line of hair and skin
care products, ALBERTO BALSAM shampoo and conditioner and the TRESemme line of
hair care products. INDOLA professional hair colors, shampoos, conditioners and
styling products are marketed throughout Europe and other international markets.
Other international markets include Australia, Canada, Italy, Mexico, New
Zealand and Puerto Rico.
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 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. Sales of the "Specialty Distribution - Sally"
business segment accounted for approximately 53%, 50% and 49% of the company's
consolidated net sales for the years ended September 30, 1998, 1997 and 1996,
respectively.
Many of the company's consumer products are developed in the company's
laboratories. New products introduced by the company are assigned product
managers who guide the products from development to the consumer. The product
managers are responsible for the overall marketing plans for the products and
coordinate advertising, promotion and market research activities.
MARKETING
The company allocates a large portion of its revenues to advertising, promotion
and market research. Net earnings are materially affected by these expenditures,
which are charged to income in the period incurred. Advertising, promotion and
market research expenditures were $257.7 million in 1998, $255.3 million in 1997
and $208.4 million in 1996.
Advertising, promotion and market research expenditures relating to a new
product will ordinarily constitute a higher percentage of sales than in the case
of a well-established product. There can be no assurance that such expenditures
will result in consumer acceptance and profitability for a product.
The company regards television as the best medium for its advertising and uses
it to conduct extensive network, spot and cable television advertising
campaigns. The company also advertises through other media such as newspapers,
magazines and radio as well as through Sally Beauty Company's direct mailings to
professional customers.
Extensive advertising and promotion are required to build and protect a
product's market position. The company believes there is significant consumer
awareness of its major brands and that such awareness is an important factor in
the company's operating results.
- 3 -
COMPETITION
The markets for the company's branded consumer products are highly competitive
and sensitive to changes in consumer preferences and demands. The company's
competitors range in size from large, highly diversified companies (some of
which have substantially greater financial resources than the company) to small,
specialized producers. The company competes on the basis of product quality and
price and believes that brand loyalty and consumer acceptance are important
factors. The company's markets are characterized by frequent introductions of
competitive products and by the entry of other manufacturers as new competitors,
both of which are typically accompanied by extensive advertising and promotional
campaigns. Such campaigns are often very costly and can significantly affect the
sales and earnings of the company and its competitors.
Sally Beauty Company experiences competition from local and regional
professional beauty supply stores, full-service dealers calling directly on
salons and a wide range of retail outlets carrying a limited selection of
professional beauty products.
DISTRIBUTION IN THE UNITED STATES
Retail health and beauty care products and food and household products for
Alberto-Culver USA are sold primarily through the company's sales force
consisting of approximately 50 employees and 130 independent brokers calling
upon wholesale drug establishments and retail outlets such as supermarkets, drug
stores, mass merchandisers and variety stores.
Hair care products for the professional trade in the United States are sold by
company sales representatives and brokers to beauty supply outlets and to beauty
distributors who in turn sell to beauty salons, barber shops and beauty schools.
Sally Beauty Company sells professional beauty supplies through full-service
distributors and its 1,998 stores located in 46 states, Puerto Rico, the United
Kingdom, Canada, Japan and Germany. Sally's stores are self-service,
cash-and-carry and are primarily located in shopping centers. Sally operates the
world's largest chain of professional beauty supply stores and as such is a
major customer of some of the company's competitors in the personal care
products industry. Sally sells Alberto-Culver USA's professional hair care
products, but these products represent only a small portion of Sally's selection
of salon brands.
FOREIGN OPERATIONS
Products of the company are sold in more than 120 countries or geographic
regions, primarily through direct sales by subsidiaries, independent
distributors and licensees.
The company's foreign operations are subject to risks inherent in transactions
involving foreign currencies and political uncertainties.
EMPLOYEES
In its domestic and foreign operations, the company had approximately 12,700
full-time equivalent employees as of September 30, 1998, consisting of 7,700
hourly personnel and 5,000 salaried employees. At September 30, 1997, the
company had approximately 11,000 full-time equivalent employees. The increase in
employees during fiscal year 1998 is principally due to the growth in the number
of Sally Beauty Company stores.
Certain subsidiaries of the company have union contracts covering production,
warehouse, shipping and maintenance personnel. The company considers relations
with its employees to be satisfactory.
- 4 -
REGULATION
The company is subject to the regulations of several federal and state agencies,
including the Federal Food and Drug Administration and the Federal Trade
Commission.
TRADEMARKS AND PATENTS
The company's trademarks, certain of which are material to its business, are
registered or legally protected in the United States, Canada and other countries
throughout the world in which products of the company are sold. Although the
company owns patents and has other patent applications pending, its business is
not materially dependent upon patents or patent protection.
- 5 -
ITEM 2. PROPERTIES
The company's properties, plants and equipment are maintained in good condition
and are suitable and adequate to support the business. The company's principal
properties and their general characteristics are described below:
Business
Location Type of Facility Segment
Company-Owned Properties:
Melrose Park, Illinois
(2525 Armitage Avenue) Corporate Headquarters, Manufacturing,
Warehouse (1) (3)
(2020 and 2040 Indian Boundary Drive) Office, Warehouse (1)
(2150 N. 15th Avenue) Manufacturing, Warehouse (1)
(2100 N. 15th Avenue) Warehouse (1)
(1930 George Street) Office, Warehouse (1)
Basingstoke, Hampshire, England Office (1)
Columbus, Ohio Warehouse (2)
Denton, Texas Office, Warehouse (2)
Falun, Sweden Office, Manufacturing, Warehouse (1)
Jacksonville, Florida Warehouse (2)
Madrid, Spain Office, Manufacturing, Warehouse (1)
Naguabo, Puerto Rico Manufacturing, Warehouse (1)
Naucalpan de Juarez, Mexico Office, Manufacturing, Warehouse (1)
North Rocks, New South Wales,
Australia Office, Manufacturing, Warehouse (1)
Reno, Nevada Warehouse (2)
Swansea, Wales, England Office, Manufacturing, Warehouse (1)
Toronto, Ontario, Canada Office, Manufacturing, Warehouse (1)
Leased Properties:
Albertslund, Denmark Office, Warehouse (1)
Atlanta, Georgia Warehouse (1)
Auckland, New Zealand Office, Warehouse (1)
Chatsworth, California Office, Manufacturing, Warehouse (1)
Espoo, Finland Office, Warehouse (1)
Geneva, Switzerland Office (1)
Macedonia, Ohio Warehouse (2)
Ontario, California Warehouse (1)
Rakkestad, Norway Office, Warehouse (1)
Stockholm, Sweden Office, Manufacturing, Warehouse (1)
Various (1,998 locations in 46 states,
Puerto Rico, the United Kingdom, Japan
and Germany) Sally Beauty Company Stores (2)
(1) Consumer Products
(2) Specialty Distribution - Sally
(3) Corporate
- 6 -
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings pending.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the year
ended September 30, 1998.
EXECUTIVE OFFICERS
The following table sets forth the names and current positions of the
registrant's executive officers, including their five-year business history and
ages. Executive officers of the company and its subsidiaries are elected
annually.
Name Current Position and Five-Year Business History Age
Leonard H. Lavin (1) October, 1994 - Chairman; previously Chairman and 79
Chief Executive Officer for more than five years.
Howard B. Bernick (1) October, 1994 - President and Chief Executive Officer; 46
previously President and Chief Operating Officer for
more than five years.
Bernice E. Lavin (1) July, 1994 - Vice Chairman, Secretary and Treasurer; 73
previously Vice President, Secretary and Treasurer for
more than five years.
Carol L. Bernick (1) April, 1998 - Vice Chairman and Assistant Secretary, 46
Alberto-Culver Company and President, Alberto-Culver
North America, a division of the registrant; October 1994
to April 1998 - Executive Vice President and Assistant
Secretary, Alberto-Culver Company and President,
Alberto-Culver USA, Inc., a subsidiary of registrant;
September, 1992 to October, 1994 - Executive Vice
President and Assistant Secretary.
William J. Cernugel October, 1993 - Senior Vice President, Finance; 56
April, 1982 to October, 1993 - Vice President,
Finance & Controller.
Thomas J. Pallone Vice President, Research and Development. 53
Michael H. Renzulli President, Sally Beauty Company, Inc., a subsidiary of 58
registrant.
- 7 -
Name Current Position and Five-Year Business History Age
Gary P. Schmidt June, 1997 - Vice President, General Counsel and 47
Assistant Secretary; April, 1990 to June, 1998 -
Vice-President, General Counsel and Secretary, Fujisawa
USA, Inc.
Terrence L. Stecz April, 1998 to December, 1998 - President, Alberto-Culver 43
USA, Inc., a subsidiary of the registrant; February, 1994
to March, 1997 - President of Whitehall-Robins Healthcare,
American Home Products Corporation; January, 1990 to
February, 1994 - President and General Manager of A.H.
Robins Consumer Products Division, American Home
Products Corporation. Mr. Stecz resigned from the Company
on December 11, 1998.
Paul H. Stoneham October, 1998 - President, Alberto-Culver International, 37
Inc., a subsidiary of registrant; December, 1997 to September,
1998 - Marketing Director, Hair Care Products - Germany,
Procter and Gamble GmbH; January, 1994 to November,
1996 - Marketing Director, Health and Beauty Care Products
- U.K., Procter and Gamble (UK) Ltd.;
October, 1992 to December, 1993 -
Marketing Director - Strategic Planning,
OTC Health Care Products - Europe,
Procter and Gamble GmbH.
(1) Leonard H. Lavin and Bernice E. Lavin are husband and wife. Carol L. Bernick is the wife of Howard
B. Bernick and the daughter of Mr. and Mrs. Lavin.
- 8 -
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information required for this Item is incorporated herein by reference to the
section entitled "Market Price of Common Stock and Cash Dividends Per Share" and
notes 3 and 4 of "Notes to Consolidated Financial Statements" in the
registrant's annual report to stockholders for the year ended September 30,
1998.
ITEM 6. SELECTED FINANCIAL DATA
Information required for this Item is incorporated herein by reference to the
section entitled "Selected Financial Data" in the registrant's annual report to
stockholders for the year ended September 30, 1998.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information required for this Item is incorporated herein by reference to the
section entitled "Management's Discussion and Analysis of Results of Operations
and Financial Condition" in the registrant's annual report to stockholders for
the year ended September 30, 1998.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required for this Item is incorporated herein by reference to the
section entitled "Management's Discussion and Analysis of Results of Operations
and Financial Condition" in the registrant's annual report to stockholders for
the year ended September 30, 1998.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required for this Item is incorporated herein by reference to the
consolidated financial statements and notes and "Independent Auditors' Report"
of KPMG Peat Marwick LLP in the registrant's annual report to stockholders for
the year ended September 30, 1998.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
- 9 -
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required for this Item regarding the directors of the company and
regarding delinquent filers pursuant to Item 405 of Regulation S-K is
incorporated herein by reference to the sections entitled "Election of
Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance",
respectively, in the registrant's proxy statement for its annual meeting of
stockholders on January 28, 1999. Information concerning Executive Officers of
the registrant is included in Part I of this report.
ITEM 11. EXECUTIVE COMPENSATION
Information required for this Item is incorporated herein by reference to the
section entitled "Executive Compensation" in the registrant's proxy statement
for its annual meeting of stockholders on January 28, 1999.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required for this Item is incorporated herein by reference to the
sections entitled "Share Ownership of Directors and Executive Officers" and
"Principal Stockholders" in the registrant's proxy statement for its annual
meeting of stockholders on January 28, 1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required for this Item is incorporated herein by reference to the
section entitled "Certain Business Relationships" in the registrant's proxy
statement for its annual meeting of stockholders on January 28, 1999.
- 10 -
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report:
1. Financial statements:
The consolidated financial statements and notes to be
included in Part II, Item 8 are incorporated by reference
to the registrant's annual report to stockholders for the
year ended September 30, 1998, which is filed as an exhibit
to this report.
2. Financial statement schedules:
Description Schedule
Valuation and Qualifying Accounts II
Schedules I, III, IV, and V are omitted as the information
required by these schedules is not applicable.
3. Exhibits:
Exhibit
Number Description
3(i)(a) Copy of Restated Certificate of
Incorporation of Alberto-Culver Company
(filed as Exhibit 3(a) and incorporated
herein by reference from the company's
Form 10-K Annual Report for the year ended
September 30, 1988).
3(i)(b) Copy of the amendment to the Restated
Certificate of Incorporation of
Alberto-Culver Company (filed as Exhibit
3(i)(c) and incorporated herein by
reference from the company's Form 10-Q
Quarterly Report for the quarter ended
March 31, 1997).
3(ii) Copy of the By-Laws of Alberto-Culver
Company, as amended and in effect as of
January 17, 1990 (filed as Exhibit 3(b)(1)
and incorporated herein by reference from
the company's Form 10-Q Quarterly Report
for the quarter ended December 31, 1989).
4 Certain instruments defining the rights of
holders of long-term obligations of the
registrant and certain of its subsidiaries
(the total amount of securities authorized
under each of which does not exceed ten
percent of the registrant's consolidated
assets) are omitted pursuant to part 4
(iii) (A) of Item 601 (b) of Regulation
S-K. The registrant agrees to furnish
copies of any such instruments to the
Securities and Exchange Commission upon
request.
- 11 -
3. Exhibits: (continued)
Exhibit
Number Description
4 (a) Copy of Indenture dated June 10, 1998 between Alberto-Culver Company and
The First National Bank of Chicago, as Trustee (filed as Exhibit 4(a) and
incorporated herein by reference from the company's Form 10-Q Quarterly Report
for the quarter ended June 30, 1998).
4 (b) Specimen of 6.375% Debentures due June 15, 2028 (filed as Exhibit 4(b) and
incorporated herein by reference from the company's Form 10-Q Quarterly Report
for the quarter ended June 30, 1998).
10 (a) Copy of Alberto-Culver Company Management Incentive Plan dated October
27, 1994, as amended * (filed as Exhibit 10(a) and incorporated herein by
reference from the company's Form 10-K Annual Report for the year ended
September 30,1997).
10 (b) Copy of Alberto-Culver Company Employee Stock Option Plan of 1988, as
amended *(filed as Exhibit 10(b) and incorporated herein by reference from the
company's Form 10-Q Quarterly Report for the quarter ended December 31, 1997).
10 (c) Copy of Alberto-Culver Company 1994 Shareholder Value Incentive Plan, as
amended * (filed as Exhibit 10(c) and incorporated herein by reference from the
company's Form 10-K Annual Report for the year ended September 30,1997).
10 (d) Copy of Alberto-Culver Company 1994 Restricted Stock Plan, as amended
*(filed as Exhibit 10(d) and incorporated herein by reference from the company's
Form 10-Q Quarterly Report for the quarter ended December 31, 1996).
10 (e) Copy of Alberto-Culver Company 1994 Stock Option Plan for Non- Employee
Directors, as amended * (filed as Exhibit 10(e) and incorporated herein by
reference from the company's Form 10-Q Quarterly Report for the quarter ended
December 31, 1997).
10 (f) Copy of Split Dollar Life Insurance Agreement dated September 30, 1993
between Alberto-Culver Company and the trustee of the Lavin Survivorship
Insurance Trust * (filed as Exhibit 10(e) and incorporated herein by reference
from the company's Form 10-K Annual Report for the year ended September 30,
1993).
10 (g) Form of Severance Agreement between Alberto-Culver Company and certain
executive officers * (filed as Exhibit 10(f) and incorporated herein by
reference from the company's Form 10-Q Quarterly Report for the quarter ended
December 31, 1996).
- 12 -
3. Exhibits: (continued)
Exhibit
Number Description
10 (h) Copy of Multicurrency Credit Agreement dated as of September 11, 1998
among Alberto-Culver Company, Bank of America National Trust and Savings
Association as U.S. agent and the other financial institutions parties thereto
(filed as Exhibit 10(h) and incorporated herein by reference from the company's
Form 10-K Annual Report for the year ended September 30, 1997).
13 Portions of annual report to stockholders for the year
ended September 30,1998 incorporated herein by reference.
21 Subsidiaries of the Registrant.
23 Consent of KPMG Peat Marwick LLP
27 Financial Data Schedule
27 (a) Amended Financial Data Schedule
* This exhibit is a management contract or compensatory plan or arrangement
of the registrant.
(b) Reports on Form 8-K: None
- 13 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on the 11th day of
December, 1998.
ALBERTO-CULVER COMPANY
By /s/ Howard B. Bernick
Howard B. Bernick
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
/s/ Leonard H. Lavin Chairman of the Board December 11, 1998
- ------------------------------------
Leonard H. Lavin and Director
/s/ Howard B. Bernick President, Chief Executive December 11, 1998
- -----------------------------------
Howard B. Bernick Officer and Director
/s/ Bernice E. Lavin Vice Chairman, Secretary, December 11, 1998
- --------------------------------------
Bernice E. Lavin Treasurer and Director
/s/ Carol L. Bernick Vice Chairman, December 11, 1998
- --------------------------------------
Carol L. Bernick Assistant Secretary and Director
/s/ William J. Cernugel Senior Vice President, Finance December 11, 1998
- ------------------------------------
William J. Cernugel (Principal Financial &
Accounting Officer)
/s/ Robert Abboud Director December 11, 1998
A. Robert Abboud
/s/ A.G. Atwater, Jr. Director December 11, 1998
A. G. Atwater, Jr.
/s/ Robert P. Gwinn Director December 11, 1998
- ------------------------------------
Robert P. Gwinn
s/ Allan B. Muchin Director December 11, 1998
- -------------------------------------
Allan B. Muchin
/s/ Robert H. Rock Director December 11, 1998
- --------------------------------------
Robert H. Rock
/s/ Dr. Harold M. Visotsky Director December 11, 1998
- ---------------------------------
Dr. Harold M. Visotsky
/s/ William W. Wirtz Director December 11, 1998
- ------------------------------------
William W. Wirtz
- 14 -
Independent Auditors' Report
The Board of Directors and Stockholders
Alberto-Culver Company:
On October 22, 1998, we reported on the consolidated balance sheets of
Alberto-Culver Company and subsidiaries as of September 30, 1998 and
1997 and the related consolidated statements of earnings, cash flows,
and stockholders' equity for each of the years in the three-year period
ended September 30, 1998, as contained in the 1998 annual report to
stockholders. These consolidated financial statements and our report
thereon are incorporated by reference in the annual report on Form 10-K
for the year 1998. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related financial
statement schedule as listed in Item 14(a)2 of the annual report on Form
10-K. That financial statement schedule is the responsibility of the
company's management. Our responsibility is to express an opinion on
that financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set
forth therein.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Chicago, Illinois
October 22, 1998
-14-
Schedule II
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
(In thousands)
Year Ended September 30,
1998 1997 1996
---- ---- ----
Allowance for doubtful accounts:
Balance at beginning of period $9,042 8,208 5,663
Additions (deductions):
Charged to costs and expenses 7,162 5,664 6,309
Uncollectible accounts written off,
net of recoveries (5,532) (4,820) (4,326)
Allowance for doubtful accounts
of acquired company 266 -- 580
Other (70) (10) (18)
----------- ---------- --------
Balance at end of period $10,868 9,042 8,208
============ ============== ===========