Sally Beauty Holdings, Inc. (SBH) Earnings Call Transcript & Summary

Hello, and welcome to the 2022 Annual Meeting of Stockholders of Sally Beauty Holdings, Inc. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Denise Paulonis, Director, President and Chief Executive Officer. The floor is yours.

Good morning, everyone. Welcome to the Sally Beauty Holdings Annual Meeting of Stockholders for 2022. I'm Denise Paulonis, Director, President and Chief Executive Officer. As previously announced in the notice and proxy statement, today's stockholder meeting is being held virtually. On the meeting site you logged into for today's meeting, there is an agenda and rules of procedure. Please take a moment to review the rules that are posted. We will follow them closely so that we conduct this meeting efficiently. First, I'll introduce our Board of Directors and some other officials. Second, we will vote on the proposals listed on the agenda. Third, we will report the preliminary voting results. And finally, we will answer your questions about our company. Now it is my privilege to introduce my fellow directors of Sally Beauty Holdings: Tim Baer, Founding Partner of TRB Partners, LLC and former Executive Vice President, Chief Legal Officer at Target Corporation; Marshall Eisenberg, founding partner of Neal, Gerber & Eisenberg, LLP; Diana Ferguson, principal of Scarlett Investments, LLC; Dorlisa Flur, Corporate Director and Strategic Adviser to companies in the retail industry; James Head, Chief Financial Officer of MultiPlan Corporation; Linda Heasley, Chief Executive Officer of Janie and Jack; Bob McMaster, our Chairman of the Board and former CEO of ASP Westward LLC and LP and former member of KPMG's Management Committee; John Miller, Co-Chairman of Envoy Solutions; Susan Mulder, Global Brand President of Timberland; Erin Nealy Cox, partner of the law firm of Kirkland & Ellis; Ed Rabin, former president of Hyatt Hotels Corporation. And with me on the call today is John Henrich, Senior Vice President, General Counsel and Secretary. Our independent auditors, KPMG, are represented here today by Rachel Storey. A representative from Computershare, Stephen Plefka, is here serving as our Independent Inspector of Election. And now John Henrich will present the Corporate Secretary's report and explain our voting procedures.

Thank you, Denise. I'm presenting for the record an affidavit certifying that an annual report and Form 10-K for 2021 and the proxy statement and proxy card for this meeting were mailed on or about December 15, 2021, to all stockholders of record as of November 29, 2021, which is the record date for this meeting. Accordingly, this meeting has been duly called under the Laws of Delaware, the state of incorporation for Sally Beauty Holdings, Inc., and under the company's bylaws. A representative of Computershare has been appointed by the Board of Directors as Inspector of Election for this meeting. He has executed an appropriate oath of office. The Inspector of Election has presented for the record a certificate of quorum indicating that there are represented at this meeting approximately 105,418,483 shares of the company's common stock. Each share of common stock is entitled to 1 vote at this meeting. Therefore, shares representing approximately 93.93% of the voting power of the company's outstanding shares are represented at this meeting in person or by proxy, so a quorum is present. Everyone in attendance online can view the agenda listing the order of business to be conducted. This meeting has 3 proposals before it: number one, the election of directors; number two, the approval of the advisory resolution endorsing the company's compensation of executive officers, including the company's compensation practices and principles and their implementation; and number three, the ratification of KPMG LLP as the company's accountants for the 2022 fiscal year. All of these proposals are described in the proxy statement and will be presented in the order in which they appear on the agenda. No other nominations for election as a director or proposals were received in accordance with the company's bylaws or the SEC's proxy rules. So no additional nominations or proposals will be considered at this meeting. Voting at this virtual meeting will be done electronically via online ballot. If you wish to vote now, click on the Vote tab in the meeting center. Stockholders who executed proxies or voted online or by telephone do not need to vote again by electronic ballot unless they wish to change their vote. After the proposals have been considered at this meeting and the electronic ballots completed, the polls will close and no more ballots will be accepted. An opportunity to respond to the questions that have been submitted to us will be provided at the end of the meeting. Please hold your questions until that time. It is now 9:05 a.m. on Thursday, January 27, 2022, and the polls are now open. The polls will close immediately following the presentation of the third proposal and my call for the collection of ballots. We will now consider the 3 proposals before us. Proposal #1. The first proposal is the election of 10 directors, Marshall E. Eisenberg, Diana S. Ferguson, Dorlisa K. Flur, James M. Head, Linda Heasley, Robert R. McMaster, John A. Miller, Erin Nealy Cox, Denise Paulonis and Edward W. Rabin. Each individual has been nominated to serve as a Director of Sally Beauty Holdings, Inc. for a 1-year term ending at the Annual Meeting in 2023. The proposal is discussed on Page 10 of your proxy statement. The first proposal is now submitted to a vote of our stockholders. If you're voting by electronic ballot and you have not done so, please vote your shares by clicking on the vote tab on the meeting site at this time, and we will proceed to the next proposal. The second proposal is for the approval of the advisory resolution endorsing the compensation of the company's executive direct officers, including the company's compensation practices and principles and their implementation. This proposal is discussed on Page 42 of your proxy statement. This second proposal is now submitted to a vote of the stockholders. If you're voting by electronic ballot and you've not already done so, please vote your shares at this time by clicking on the Vote tab on the meeting site, and we will proceed to the next proposal. The third proposal is for ratification of the selection of KPMG LLP as the independent auditor for the company for 2022. This proposal is discussed on Page 85 of your proxy statement. This third proposal is now submitted to a vote of our stockholders. If you're voting by electronic ballot and you've not already done so, please vote your shares by clicking the Vote tab on the meeting site at this time. This completes the voting on proposals before the stockholders.

As I mentioned, we'll have time for questions and answers in a moment. But first, John Henrich will give us the preliminary voting results.

Thank you, Denise. Based on my review of the preliminary report, all 3 of the proposals, including the election of each of the 10 director nominees named in the proxy statement, have been approved by at least the majority of the votes cast. We will now proceed to the question-and-answer session. Before Denise opens the floor for questions, I want to quickly remind you of the procedures. Only stockholders or their authorized representatives with a validated attendance to this meeting may ask questions. [Operator Instructions] Questions should be addressed directly to Denise. Please confine your questions to one subject at a time. Denise will not answer questions that are unrelated to matters properly before this meeting.

Thanks, John.

We do not have any questions.

Seeing that there are no questions, that concludes the meeting and question-and-answer session. The business of the meeting is concluded, and I move with the meeting be adjourned.

I second that. The meeting is now adjourned.

Thank you for attending. This concludes the meeting. You may now disconnect.