Sally Beauty Supply 2013 Annual Report Download - page 47

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We cannot assure you that we will be able to refinance any of our indebtedness or obtain additional
financing, particularly because of our high levels of debt and the debt incurrence restrictions imposed by
the agreements governing our debt, as well as prevailing market conditions. In the absence of such
operating results and resources, we could face substantial liquidity problems and might be required to
dispose of material assets or operations to meet our debt service and other obligations. Our ABL facility
and the indentures governing the Notes restrict our ability to dispose of assets and use the proceeds from
any such dispositions. We cannot assure you we will be able to consummate those sales, or if we do, what
the timing of the sales will be or whether the proceeds that we realize will be adequate to meet debt service
obligations when due.
The impairment of certain financial institutions could adversely affect us.
We have exposure to different financial institutions in their capacities as lenders in our credit facilities,
depositories of our corporate cash balances and counterparties on our foreign currency hedging
transactions. All of these transactions expose us to credit risk in the event of default of the financial
institution(s). If these financial institutions become impaired or insolvent, this could have serious
consequences to our financial condition and results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
Substantially all of our store and warehouse locations are leased while our corporate headquarters and five
warehouses/distribution centers are owned. The average store lease is for a term of five years with
customary renewal options. The following table provides the number of stores in the U.S. and globally, as
of September 30, 2013:
Sally Beauty Beauty Systems
Supply Group
Company- Company-
Location Operated Franchise Operated Franchise
United States (excluding Puerto Rico) .... 2,668 — 986 133
Puerto Rico ....................... 42 — 2 —
International:
United Kingdom .................. 238 4 — —
Belgium ......................... 38 6 — —
Canada ......................... 88 — 96 —
Chile ........................... 38 — — —
France .......................... 49 3 — —
Germany ........................ 33 — — —
Netherlands ...................... 22 — — —
Mexico ......................... 166 — — 28
Other .......................... 21 8 — —
Total International ............... 693 21 96 28
Total Store Count ................... 3,403 21 1,084 161
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