Earnings from continuing operations (net of tax) were, according to a press release, break even after deducting $20.3 million (net of tax) for restructuring and other expenses. Diluted earnings per share from continuing operations were zero after deducting 21 cents for restructuring and other expenses. Excluding restructuring and other expenses, diluted earnings per share from continuing operations increased 31.3% to 21 cents versus 16 cents in the prior year.
"We are pleased with the results for the first quarter of fiscal year 2007, our first as a company focused exclusively on consumer products, during which we experienced strong growth in many of our markets and many of our brands, in particular Nexxus and TRESemme," said V. James Marino, president and CEO, Alberto-Culver. "This quarter marks a new beginning for Alberto-Culver and its shareholders, and we are focused on our efforts to drive results and create value over the long term."
The company expects that some of the cost saving benefits related to the restructuring charges will be seen in each of the remaining quarters of the year, which should partially offset the corporate and overhead costs that were either previously absorbed by Sally prior to the separation or were not previously allocated to Consumer Products or Sally. At the same time, the company expects its year-on-year comparisons for the second quarter will be distorted by last year’s very successful Nexxus brand launch into retail channels.
"As part of our ongoing effort to support and further expand our brands, we increased the company’s advertising and other marketing expenditures 20.9% to $61.0 million from $50.4 million in the prior year," said Marino. "Moreover, in December, we announced a reorganization plan that will lower corporate overhead costs and also announced plans to construct a new 500,000 square foot manufacturing facility in Jonesboro, Arkansas. Both of these decisions were carefully considered and should help increase margins in future periods."
"The amount of work involved at all levels of the company in completing the Sally transaction and the wide variety of steps we have taken to reorganize our consumer products business could have been an enormous distraction in the quarter and one that could have negatively impacted our results," said Carol L. Bernick, executive chairman, Alberto-Culver. "It is a credit to our entire team that they were able to undertake all of this while still producing very strong results, and I am extremely proud of their efforts. This is both a challenging and exciting time in what is now a new chapter for Alberto-Culver, but also a time that offers tremendous opportunity. As we move forward, shareholders should expect to see the same energy and passion from our employees and board members that we have shown in the past as our commitment to creating shareholder value continues unabated."
Bernick also announced that the company’s board of directors has approved a quarterly cash dividend of 5.5 cents per share, or 22 cents per share on an annualized basis, to be paid on February 20, 2007, to shareholders of record on February 5, 2007.
"Alberto-Culver has, for many years, had a strong tradition of dividend payouts and dividend growth," said Bernick. "Going forward, we will continue to keep the interests of shareholders at the forefront of our thinking."
