Sally Beauty Supply 2007 Annual Report Download - page 64

Transactions. The following table shows our sources and uses of funds for the fiscal years ended September 30, 2007, 2006 and 2005 (in thousands):
Year Ended September 30,
2007 2006 2005
Cash provided by operating activities $ 192,336 $ 156,721 $ 115,455
Cash used by investing activities (121,364) (52,158) (126,045)
Cash provided (used) by financing activities (141,883) (32,205) 3,737
Effect of foreign exchange rates 1,612 (3,399) 12
Net increase (decrease) in cash and cash equivalents $ (69,299) $ 68,959 $ (6,841)
Cash Provided by Operating Activities
Net cash provided by operating activities during fiscal year 2007 increased by $35.6 million to $192.3 million, compared to $156.7 million during fiscal year
2006. The increase was primarily due to a reduction in cash used for inventory as we reduced our inventory levels, partially offset by lower net earnings due to
interest expense.
Net cash provided by operating activities during fiscal year 2006 increased by $41.2 million to $156.7 million, compared to $115.5 million during fiscal year
2005. The increase was primarily due to the timing of payments of amounts due to Alberto-Culver and to vendors and improved collections of other receivable
balances, partially offset by lower net earnings adjusted for non-cash items and for increased amounts paid for inventories.
Cash Used by Investing Activities
Net cash used by investing activities during fiscal year 2007 increased by $69.2 million to $121.4 million, compared to $52.2 million during fiscal year 2006,
primarily due to the acquisition of Salon Services, and capital expenditures for new stores and remodels of existing facilities. Included in fiscal year 2007 is
$7.6 million paid to exercise an operating lease purchase option of a warehouse building that was subsequently sold for $8.0 million, which proceeds are included
in the proceeds from sale of property and equipment.
Net cash used by investing activities during fiscal year 2006 decreased by $73.8 million to $52.2 million, compared to $126.0 million in fiscal year 2005,
primarily due to lower cash acquisition costs and capital expenditures in fiscal year 2006. Cash used for the acquisition of Salon Success during fiscal year 2006
was substantially less than the cash used for the acquisition of CosmoProf in the prior year period. Capital expenditures were $30.3 million for fiscal year 2006
compared to $52.2 million during the prior year period with the higher amount in 2005 principally related to the new corporate support facility in Denton, Texas.
Cash Provided (Used) by Financing Activities
Net cash used by financing activities during fiscal year 2007 increased by $109.7 million to $141.9 million, compared to $32.2 million during fiscal year 2006,
primarily due to distributions to Alberto-Culver and costs associated with the Separation Transactions, including debt issuance costs and special cash dividend
paid, partially offset by equity contributions and proceeds from the issuance of debt.
Net cash used by financing activities was $32.2 million during fiscal year 2006 compared to net cash provided by financing activities of $3.7 million during
fiscal year 2005. Net cash provided (used) by financing activities was negatively impacted in fiscal year 2006 by the net repayment of $16.7 million of notes with
affiliated companies and the change in the book cash overdraft balance. For fiscal year 2005, Sally Holdings borrowed $52.3 million from affiliated companies,
which was offset by repayments of
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Source: Sally Beauty Holding, 10-K, November 29, 2007