Form 11-K
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

Form 11-K

 


 

(Mark One)

 

x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT 0F 1934

 

For the fiscal year ended December 31, 2004

 

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 333-70067

 


 

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

 

Sally Beauty 401(k) Savings Plan

  Alberto-Culver 401(k) Savings Plan

3900 Morse Street

   

Denton, TX 76205

   

 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

 

Alberto-Culver Company

2525 Armitage Ave.

Melrose Park, IL 60160

 



Table of Contents

ALBERTO-CULVER

401(k) SAVINGS PLAN

 

Financial Statements and Supplemental Schedule

 

December 31, 2004 and 2003

 

(With Report of Independent Registered Public Accounting Firm Thereon)


Table of Contents

ALBERTO-CULVER

401(k) SAVINGS PLAN

 

Table of Contents

 

     Page

Report of Independent Registered Public Accounting Firm

   1

Statements of Net Assets Available for Benefits

   2

Statements of Changes in Net Assets Available for Benefits

   3

Notes to Financial Statements

   4

Supplemental Schedule

    

Schedule H, Line 4i — Schedule of Assets (Held at End of Year)

   10


Table of Contents

Report of Independent Registered Public Accounting Firm

 

To the Plan Administrator of the

Alberto-Culver 401(k) Savings Plan:

 

We have audited the accompanying statements of net assets available for benefits of the Alberto-Culver 401(k) Savings Plan (the Plan) as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2004 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

/s/ KPMG LLP

 

June 24, 2005


Table of Contents

ALBERTO-CULVER

401(k) SAVINGS PLAN

 

Statements of Net Assets Available for Benefits

 

December 31, 2004 and 2003

 

     2004

   2003

Assets:

           

Investments

   $ 42,196,178    35,344,126

Employer contribution receivable

     1,202,937    970,053
    

  

Net assets available for benefits

   $ 43,399,115    36,314,179
    

  

 

See accompanying notes to financial statements.

 

2


Table of Contents

ALBERTO-CULVER

401(k) SAVINGS PLAN

 

Statements of Changes in Net Assets Available for Benefits

 

December 31, 2004 and 2003

 

     2004

    2003

 

Additions to net assets attributed to:

              

Investment income:

              

Net appreciation in fair value of investments

   $ 2,757,434     4,803,010  

Dividend and interest income

     351,265     241,232  

Interest on participant loans

     54,917     62,574  
    


 

Total investment income

     3,163,616     5,106,816  
    


 

Contributions:

              

Employer

     1,202,937     970,053  

Employee

     5,210,704     4,451,052  
    


 

Total contributions

     6,413,641     5,421,105  
    


 

Total additions

     9,577,257     10,527,921  

Deductions from net assets attributed to:

              

Benefits paid to participants

     (2,475,176 )   (1,861,878 )

Administrative fees

     (17,145 )   (15,728 )
    


 

Total deductions

     (2,492,321 )   (1,877,606 )
    


 

Net increase

     7,084,936     8,650,315  

Net assets available for benefits at beginning of year

     36,314,179     27,663,864  
    


 

Net assets available for benefits at end of year

   $ 43,399,115     36,314,179  
    


 

 

See accompanying notes to financial statements.

 

3


Table of Contents

ALBERTO-CULVER

401(K) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

(1) Description of the Plan

 

  (a) General

 

The Alberto-Culver 401(k) Savings Plan (the Plan), established on January 1, 1994, is a defined contribution plan available to eligible employees of Alberto-Culver Company (the Company), and certain subsidiaries of the Company.

 

The Plan is administered by the Company with the assistance of Prudential Retirement Insurance and Annuity Company (PRIAC), a company of Prudential Financial, Inc. Prudential Bank & Trust Company, F.S.B. (the Trustee) holds the investment assets of the Plan.

 

The following description of the Plan provides only general information. Information about the Plan’s provisions is contained in the plan document, which may be obtained from the Company.

 

  (b) Participation

 

Employees who are at least 21 years of age may participate in the Plan. On December 31, 2004, there were 1,184 participants in or beneficiaries of the Plan.

 

  (c) Contributions

 

Participants may elect to contribute any amount from 1% to 50% of their eligible compensation, in whole percentage points, subject to the limitations of the Internal Revenue Code. Highly compensated participants, as defined by the Internal Revenue Code, are subject to more restrictive maximum annual contribution limits. The percentage of compensation contributed may be increased or decreased at the election of the participant any time during the year. All eligible participant contributions are tax-deferred contributions pursuant to a qualified cash or deferral arrangement subject to the limitations of the Internal Revenue Code. Annual participant contribution amounts were limited to $13,000 for the year ended December 31, 2004, as determined by the Internal Revenue Code. The Economic Growth and Tax Relief Reconciliation Act of 2001 includes a provision that allows participants who have attained age 50 during the Plan year to make additional contributions above otherwise permissible limits. These additional contributions, known as catch-up contributions, were limited to $3,000 for the year ended December 31, 2004. Company matching contributions are not be made on catch-up contributions.

 

Company contributions to the Plan are based on a discretionary match on an annual basis. For the Plan years 2004 and 2003, the Company matched $0.50 of each dollar contributed up to 5% of non-collectively bargained eligible participant compensation and $0.50 of each dollar contributed up to 4% of non-collectively bargained eligible participant compensation, respectively.

 

Effective April 1, 2004, the Company agreed to match $0.10 of each dollar contributed up to 6% of eligible participant compensation for collectively bargained employees of the Company belonging to the United States Steelworkers of America — Local 9777 Chapter.

 

4


Table of Contents

ALBERTO-CULVER

401(K) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

  (d) Investment Options

 

Participants may elect to invest their contributions and any Company matching contributions in twenty investment options within seven different asset classes as well as the Company’s common stock. The asset classes include: (i) stable value, (ii) balanced, (iii) large capitalization equity, (iv) mid capitalization equity, (v) small capitalization equity, (vi) global equity, and (vii) international equity. These investment options are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risks associated with certain investment securities, it is possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of net assets available for benefits.

 

None of the investment funds other than the Principal Preservation Separate Account guarantee a fixed return to the participant. The Principal Preservation Separate Account provides stable returns as well as a full guarantee of principal and interest from PRIAC. The guaranteed interest rate is announced semi-annually and is guaranteed against change for six-month periods (January-June, July-December).

 

Account balances may be invested in 1% increments in any of the Plan’s available investment options. Participants may reallocate their investments among the available investment options any time during the year. Dividend and interest income received on investments are reinvested in the same funds.

 

Effective January 1, 2004, the Oppenheimer Global Fund (Class A Shares) replaced the Janus Worldwide Fund due to the Janus Worldwide Fund’s inability to meet certain performance criteria established by the Plan’s Investment Policy Statement.

 

On January 21, 2004, the Company’s board of directors approved a 3-for-2 stock split in the form of a 50% stock dividend on the Company’s outstanding shares. The additional shares were distributed February 20, 2004 to shareholders of record at the close of business on February 2, 2004.

 

Effective June 1, 2004, the International Equity/Julius Baer Fund replaced the Credit Suisse International Focus Account due to the Credit Suisse International Focus Account’s inability to meet certain performance criteria established by the Plan’s Investment Policy Statement.

 

  (e) Vesting

 

Participants are fully vested in the current value of their contributions and earnings and losses thereon, and become fully vested in the Company matching contributions and related earnings and losses

 

5


Table of Contents

ALBERTO-CULVER

401(K) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

credited to their accounts based upon their years of vesting service as shown in the following table:

 

Years of vesting service


   Vested
percentage


 

Less than 1

   0 %

1 but less than 2

   20  

2 but less than 3

   40  

3 but less than 4

   60  

4 but less than 5

   80  

5 or more

   100  

 

Participants who are age 65 or over, die, or become permanently disabled are automatically 100% vested in the value of Company matching contributions and related earnings and losses credited to their account.

 

  (f) Distribution Options

 

Upon severance from employment (e.g. termination of employment, retirement, disability or death), participants may elect to receive a distribution of the total value of their account, which is the accumulation of to their contributions and related earnings and losses credited to their account, as well as the vested balance of Company matching contributions and related earnings and losses credited to their account. Distributions may be in the form of cash, periodic installments, Company common stock, or a direct rollover according to the provisions of the Plan. Alternatively, terminated participants may elect to defer the distribution of their account balance until age 70 1/2, at which time minimum required distributions will commence according to Section 401(a)(9) of the Internal Revenue Code. Such deferred benefits remain in the Plan and participate in the earnings and losses from the investments.

 

  (g) Participant Loans

 

Participants may borrow against their account balances for periods of one to five years. In the event the loan is used to purchase a primary residence, an extended period of time for repayment is allowed. Participant loans are limited to the lesser of $50,000 or 50% of the participants’ vested account balance and bear interest at the prime rate plus 1% at the time the loan is made. Outstanding participant loans are considered investments of the Plan and repayments of principal and interest are credited to the borrowing participants’ account using his or her current investment election. At December 31, 2004 and 2003, interest rates on outstanding loans ranged from 5.00% to 10.50%. At December 31, 2004 and 2003, the number of participants with outstanding loans were 212 and 234, respectively.

 

6


Table of Contents

ALBERTO-CULVER

401(K) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

  (h) Forfeitures

 

Company matching contributions and earnings and losses thereon forfeited by terminated employees are used to reduce future Company matching contributions to the Plan. The Company will reinstate forfeited account balances to the accounts of terminated participants who rejoin the Company before incurring five consecutive one year breaks in service. For the Plan years ended December 31, 2004 and 2003, Company matching contributions were reduced by forfeiture amounts of $76,460 and $30,000, respectively.

 

  (i) Administrative Expenses

 

Administrative fees are paid by the Plan. All other Plan-related expenses are paid by the Company. Investment management fees are included in the investment fund yield.

 

(2) Summary of Significant Accounting Policies

 

  (a) Basis of Accounting

 

The Company maintains the accounts of the Plan on an accrual basis.

 

  (b) Asset Valuation

 

The investment assets in the Plan are valued at the quoted closing sale price on the last business day of the year. Participant loans are stated at contract value which approximates fair value.

 

  (c) Security Transactions and Investment Income

 

Purchases and sales of investments in the Plan are recorded on a trade-date basis. When investments are sold, the difference between the carrying value original cost (computed on an average cost basis) and the proceeds received is recorded as a realized gain or loss. Interest and dividend income are recorded when earned.

 

  (d) Payment of Benefits

 

Benefits are recorded when paid.

 

  (e) Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and related disclosures. Actual results could differ from these estimates.

 

(3) Related-Party Transactions

 

PRIAC provides certain accounting and administrative services to the Plan for which $17,145 and $15,728 of expenses were charged for the years ended December 31, 2004 and 2003, respectively.

 

7


Table of Contents

ALBERTO-CULVER

401(K) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

(4) Termination of the Plan

 

It is the intent of the Company that the Plan continues into the future; however, the Company reserves the right to terminate the Plan. In the event the Plan is terminated, participants would become fully vested in their accounts and the assets of the Plan would be distributed to the participants in proportion to their respective interests in the Plan.

 

(5) Tax Status

 

The Company adopted a Prototype Standardized Profit Sharing Plan with a cash or deferral arrangement which received a favorable determination letter from the Internal Revenue Service, dated July 28, 2004 which stated that the form of the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code. The Company believes that the Plan currently is designed and being operated in compliance with the applicable requirements of the Internal Revenue Code and, therefore, the Plan qualifies under Section 401(a) of the Internal Revenue Code and is exempt from tax under Section 501(a) of the Internal Revenue Code. The Plan administrator is not aware of any activity or transaction that may adversely affect the qualified status of the Plan.

 

(6) Other Investment Information

 

The fair values of investment fund balances which represent 5% or more of the Plan’s net assets as of December 31, 2004 and 2003 are as follows:

 

     2004

   2003

Principal Preservation Separate Account

   $ 11,151,618    10,741,593

Company Common Stock Fund

     4,809,190    3,029,196

Dryden S&P 500 Index Fund

     4,785,357    4,273,385

Fidelity Advisor Equity Growth Account

     3,605,870    3,468,174

Large Cap Growth/Turner Investment Partners Fund

     2,798,001    2,545,298

Fidelity Advisor Balanced Account

     2,555,562    2,307,823

 

During the Plan years ended December 31, 2004 and 2003, the Plan’s investments (including investments bought, sold, and held during the year) appreciated in value as follows:

 

     2004

   2003

Pooled Separate Accounts

   $ 2,210,480    4,193,340

Company Common Stock

     546,954    609,670
    

  

Net appreciation in fair value

   $ 2,757,434    4,803,010
    

  

 

8


Table of Contents

ALBERTO-CULVER

401(K) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

(7) Subsequent Events

 

Effective January 1, 2005, annual participant contributions and catch-up contributions will be limited to $14,000 and $4,000, respectively.

 

9


Table of Contents

Schedule 1

 

ALBERTO-CULVER

401(k) SAVINGS PLAN

 

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

 

December 31, 2004

 

Identity of issuer, borrower,
lessor, or similar party


  

Description of investment
including maturity date, rate of interest,
par value, or number of shares


   Number of
shares/units


   Current
value


* Prudential Retirement Insurance and Annuity Company

   Principal Preservation Separate Account    1,074,222 Units    $ 11,151,618

* Alberto-Culver Company

   Alberto-Culver Company Common Stock Fund    99,016 Shares      4,809,190

* Prudential Retirement Insurance and Annuity Company

   Dryden S&P 500 Index Fund    69,155 Units      4,785,357

* Prudential Retirement Insurance and Annuity Company

   Fidelity Advisor Equity Growth Account    46,493 Units      3,605,870

* Prudential Retirement Insurance and Annuity Company

   Large Cap Growth/Turner Investment Partners Fund    259,902 Units      2,798,001

* Prudential Retirement Insurance and Annuity Company

   Fidelity Advisor Balanced Account    73,264 Units      2,555,562

* Prudential Retirement Insurance and Annuity Company

   Oppenheimer Global Fund (Class A Shares)    31,494 Units      1,937,846

* Prudential Retirement Insurance and Annuity Company

   Small Cap Value/Perkins, Wolf, McDonnell Fund    63,978 Units      1,501,801

* Prudential Retirement Insurance and Annuity Company

   Small Cap Growth/TimesSquare Fund    62,612 Units      1,200,609

* Prudential Retirement Insurance and Annuity Company

   Lifetime 40    72,754 Units      1,025,342

* Prudential Retirement Insurance and Annuity Company

   International Equity/Julius Baer Fund    60,665 Units      1,011,909

* Prudential Retirement Insurance and Annuity Company

   Mid Cap Blend/New Amsterdam Partners Fund    73,627 Units      1,003,714

* Prudential Retirement Insurance and Annuity Company

   Lifetime 30    48,881 Units      697,922

* Prudential Retirement Insurance and Annuity Company

   Large Cap Value/John A. Levin & Co. Fund    39,698 Units      649,385

* Prudential Retirement Insurance and Annuity Company

   Lifetime 20    40,318 Units      570,804

* Prudential Retirement Insurance and Annuity Company

   Lifetime 50    31,929 Units      454,535

* Prudential Retirement Insurance and Annuity Company

   Balanced I Fund/(Sub-advised by Wellington Management)    12,828 Units      539,872

* Prudential Retirement Insurance and Annuity Company

   Mid Cap Value/(Sub-advised by Wellington Management)    23,495 Units      397,160

* Prudential Retirement Insurance and Annuity Company

   Mid Cap Growth/Artisan Partners Fund    30,829 Units      316,462

* Prudential Retirement Insurance and Annuity Company

   Lifetime 60    13,133 Units      189,531

* Participant Loans

   Loans to participants, bearing interest from 5.00% to 10.50% with    —        993,688
              

     varying maturities through 2014         $ 42,196,178
              


* Represents a party-in-interest.

 

See accompanying report of independent registered public accounting firm.

 

10


Table of Contents

Consent of Independent Registered Public Accounting Firm

 

The Board of Directors

    Alberto-Culver Company:

 

We consent to the incorporation by reference in the registration statement (No. 333-70067) on Form S-8 of Alberto-Culver Company of our report dated June 24, 2005, with respect to the Statements of Net Assets Available for Benefits of the Alberto-Culver 401(k) Savings Plan as of December 31, 2004 and 2003, and the related Statements of Changes in Net Assets Available for Benefits for the years then ended, and the related supplemental schedule, which report appears in the December 31, 2004 annual report on Form 11-K of Alberto-Culver Company.

 

/s/ KPMG LLP

 

Chicago, Illinois

June 28, 2005

 


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Financial Statements and Supplemental Schedule

 

December 31, 2004 and 2003

 

(With Report of Independent Registered Public Accounting Firm Thereon)

 


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Table of Contents

 

     Page

Report of Independent Registered Public Accounting Firm

   1

Statements of Net Assets Available for Benefits

   2

Statements of Changes in Net Assets Available for Benefits

   3

Notes to Financial Statements

   4

Supplemental Schedule

    
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)    11


Table of Contents

Report of Independent Registered Public Accounting Firm

 

To the Plan Administrator of the

    Sally Beauty 401(k) Savings Plan:

 

We have audited the accompanying statements of net assets available for benefits of the Sally Beauty 401(k) Savings Plan (the Plan) as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2004 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

/s/ KPMG LLP

 

June 24, 2005

 


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Statements of Net Assets Available for Benefits

 

December 31, 2004 and 2003

 

     2004

   2003

Assets:

           

Cash

   $ 236,584    133,271

Investments

     60,637,106    39,643,676
    

  

Total assets held for investment

     60,873,690    39,776,947

Employer contribution receivable

     2,359,553    1,704,385
    

  

Net assets available for benefits

   $ 63,233,243    41,481,332
    

  

 

See accompanying notes to financial statements.

 

2


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Statements of Changes in Net Assets Available for Benefits

 

Years ended December 31, 2004 and 2003

 

     2004

    2003

 

Additions to net assets attributed to:

              

Investment income:

              

Net appreciation in fair value of investments

   $ 4,109,710     5,697,064  

Dividend and interest income

     413,493     225,898  

Interest on participant loans

     105,088     74,213  
    


 

Total investment income

     4,628,291     5,997,175  
    


 

Contributions:

              

Employer

     2,359,553     1,704,385  

Employee

     7,786,452     5,957,878  

Transfer in - plan merger

     10,592,225     —    
    


 

Total contributions

     20,738,230     7,662,263  
    


 

Total additions

     25,366,521     13,659,438  
    


 

Deductions from net assets attributed to:

              

Benefits paid to participants

     (3,570,517 )   (3,430,032 )

Administrative fees

     (44,093 )   (34,620 )
    


 

Total deductions

     (3,614,610 )   (3,464,652 )
    


 

Net increase

     21,751,911     10,194,786  

Net assets available for benefits at beginning of year

     41,481,332     31,286,546  
    


 

Net assets available for benefits at end of year

   $ 63,233,243     41,481,332  
    


 

 

See accompanying notes to financial statements.

 

3


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

(1) Description of the Plan

 

  (a) General

 

The Sally Beauty 401(k) Savings Plan (the Plan), established on January 1, 1994, is a defined contribution plan available to eligible employees of Sally Beauty Company (the Company). The Company is a wholly owned subsidiary of the Alberto-Culver Company (Alberto-Culver).

 

The Plan is administered by the Company with the assistance of Prudential Retirement Insurance and Annuity Company (PRIAC), a company of Prudential Financial, Inc. Prudential Bank & Trust Company, F.S.B.(the Trustee) holds the investment assets of the Plan.

 

The following description of the Plan provides only general information. Information about the Plan’s provisions is contained in the plan document, which may be obtained from the Company.

 

  (b) Participation

 

All eligible employees whose customary employment is for at least 1,000 hours within 12 consecutive months, who are not members of a collective bargaining unit, and who are at least 21 years of age may participate in the Plan upon the completion of 12 months of service. On December 31, 2004, there were 3,243 participants in or beneficiaries of the Plan.

 

  (c) Contributions

 

Participants may elect to contribute any amount from 1% to 50% of their eligible compensation, in whole percentage points, subject to the limitations of the Internal Revenue Code. Highly compensated participants, as defined by the Internal Revenue Code, are subject to more restrictive maximum annual contribution limits. The percentage of compensation contributed may be increased or decreased at the election of the participant any time during the year. All eligible participant contributions are tax-deferred contributions pursuant to a qualified cash or deferral arrangement subject to the limitations of the Internal Revenue Code. Annual participant contribution amounts were limited to $13,000 for the year ended December 31, 2004, as determined by the Internal Revenue Code. The Economic Growth and Tax Relief Reconciliation Act of 2001 includes a provision that allows participants who have attained age 50 during the Plan year to make additional contributions above otherwise permissible limits. These additional contributions, known as catch-up contributions, were limited to $3,000 for the year ended December 31, 2004. Company matching contributions are not be made on catch-up contributions.

 

Company contributions to the Plan are based on a discretionary match on an annual basis. For the Plan years 2004 and 2003, the Company matched $0.50 of each dollar contributed up to 5% of eligible participant compensation and $0.50 of each dollar contributed up to 4% of eligible participant compensation, respectively.

 

  (d) Investment Options

 

Participants may elect to invest their contributions and any Company matching contributions in twenty investment options within seven different asset classes as well as the Alberto-Culver Company common stock. The asset classes include: (i) stable value, (ii) balanced, (iii) large

 

(Continued)

4


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

capitalization equity, (iv) mid capitalization equity, (v) small capitalization equity, (vi) global equity, and (vii) international equity. These investment options are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risks associated with certain investment securities, it is possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of net assets available for benefits.

 

None of the investment funds, other than the Principal Preservation Separate Account, guarantee a fixed return to the participant. The Principal Preservation Separate Account provides stable returns as well as a full guarantee of principal and interest from PRIAC. The guaranteed interest rate is announced semi-annually and is guaranteed against change for six-month periods (January-June, July-December).

 

Account balances may be invested in 1% increments in any of the Plan’s available investment options. Participants may reallocate their investments among the available investment options any time during the year. Dividend and interest income received on investments are reinvested in the same funds.

 

Effective January 1, 2004, the Oppenheimer Global Fund (Class A Shares) replaced the Janus Worldwide Fund due to the Janus Worldwide Fund’s inability to meet certain performance criteria established by the Plan’s Investment Policy Statement.

 

On January 21, 2004, Alberto-Culver Company’s board of directors approved a 3-for-2 stock split in the form of a 50% stock dividend on Alberto-Culver Company’s outstanding shares. The additional shares were distributed February 20, 2004 to shareholders of record at the close of business on February 2, 2004.

 

Effective June 1, 2004, the International Equity/Julius Baer Fund replaced the Credit Suisse International Focus Account due to the Credit Suisse International Focus Account’s inability to meet certain performance criteria established by the Plan’s Investment Policy Statement.

 

  (e) Vesting

 

Participants are fully vested in the current value of their contributions and earnings and losses thereon, and become fully vested in the Company matching contributions and related earnings and losses

 

(Continued)

5


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

credited to their accounts based upon their years of vesting service as shown in the following table:

 

Years of vesting service


   Vested
percentage


 

Less than 1

   0 %

1 but less than 2

   20  

2 but less than 3

   40  

3 but less than 4

   60  

4 but less than 5

   80  

5 or more

   100  

 

Participants who are age 65 or over, die, or become permanently disabled are automatically 100% vested in the value of Company matching contributions and related earnings or losses credited to their account.

 

  (f) Distribution Options

 

Upon severance from employment (e.g. termination of employment, retirement, disability or death, participants may elect to receive a distribution of the total value of their account, which is the accumulation of their contributions and related earnings and losses credited to their account, as well as the vested balance of their Company matching contributions and related earnings and losses credited to their account. Distributions may be in the form of cash, periodic installments, Alberto-Culver Company common stock, or a direct rollover according to the provisions of the Plan. Alternatively, terminated participants may elect to defer the distribution of their account balance until age 70 1/2, at which time minimum required distributions will commence according to Section 401(a)(9) of the Internal Revenue Code. Such deferred benefits remain in the Plan and participate in the earnings and losses from the investments.

 

  (g) Corrective Distributions

 

As required under Sections 401(k) and 401(m) of the Internal Revenue Code, the Plan is required to pass compliance tests as they relate to both participant and Company matching contributions to the Plan. If the Plan does not pass these tests, the Plan must make corrective distributions to certain highly compensated employees. For the Plan years ended December 31, 2004 and 2003, corrective distributions were required in the amounts of $113,225 and $120,509, respectively. Corrective distributions are processed in the Plan year subsequent to which the participant and Company matching contributions were initially contributed.

 

(Continued)

6


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

  (h) Participant Loans

 

Participants may borrow against their account balances for periods of one to five years. In the event the loan is used to purchase a primary residence, an extended period of time for repayment is allowed. Participant loans are limited to the lesser of $50,000 or 50% of the participants’ vested account balance and bear interest at the prime rate plus 1% at the time the loan is made. Outstanding participant loans are considered investments of the Plan and repayments of principal and interest are credited to the borrowing participants’ account using his or her current investment election. At December 31, 2004 and 2003, interest rates on outstanding loans ranged from 5.00% to 10.50%. For the Plan years ending December 31, 2004 and 2003, the numbers of participants with outstanding loans were 638 and 468, respectively.

 

  (i) Forfeitures

 

Company matching contributions, and earnings thereon, forfeited by terminated employees are used to reduce future Company matching contributions to the Plan. The Company will reinstate forfeited balances to the accounts of employees who rejoin the Company within five years of their termination. In 2004 and 2003, Company matching contributions were reduced by forfeiture amounts of $35,000.

 

  (j) Plan Merger

 

During 2004, participants’ balances in the West Coast Beauty Supply Company Retirement Savings Plan totaling $10,592,225 were transferred into the Plan due to the Company’s acquisition of the West Coast Beauty Supply Company.

 

  (k) Administrative Expenses

 

Administrative fees are paid by the Plan. All other Plan-related expenses are paid by the Company. Investment management fees are included in the investment fund yields.

 

(2) Summary of Significant Accounting Policies

 

  (a) Basis of Accounting

 

The Company maintains the accounts of the Plan on an accrual basis.

 

  (b) Asset Valuation

 

The investment assets in the Plan are valued at the quoted closing sale price on the last business day of the year. Participant loans are stated at contract value which approximates fair value.

 

  (c) Security Transactions and Investment Income

 

Purchases and sales of investments in the Plan are recorded on a trade-date basis. When investments are sold, the difference between the carrying value original cost (computed on an average cost basis) and the proceeds received are recorded as a realized gain or loss. Interest and dividend income are recorded when earned.

 

(Continued)

7


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

  (d) Payment of Benefits

 

Benefits are recorded when paid.

 

  (e) Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and related disclosures. Actual results could differ from these estimates.

 

(3) Related-party Transactions

 

PRIAC provides certain accounting and administrative services to the Plan for which $44,093 and $34,620 of expenses were charged for the years ended December 31, 2004 and 2003, respectively.

 

(4) Termination of the Plan

 

It is the intent of the Company that the Plan continues into the future; however, the Company reserves the right to terminate the Plan. In the event the Plan is terminated, participants would become fully vested in their accounts, and the assets of the Plan would be distributed to the participants in proportion to their respective interests in the Plan.

 

(5) Tax Status

 

The Company adopted a Prototype Standardized Profit Sharing Plan with a cash or deferral arrangement which received a favorable determination letter from the Internal Revenue Service, dated July 28, 2004, which stated that the form of the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code. The Company believes that the Plan currently is designed and being operated in compliance with the applicable requirements of the Internal Revenue Code and, therefore, the Plan qualifies under Section 401(a) of the Internal Revenue Code and is exempt from tax under Section 501(a) of the Internal Revenue Code. The Plan administrator is not aware of any activity or transaction that may adversely affect the qualified status of the Plan.

 

(Continued)

8


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

(6) Other Investment Information

 

The fair values of investment fund balances which represent 5% or more of the Plan’s net assets as of December 31, 2004 and 2003 are as follows:

 

     2004

   2003

Principal Preservation Separate Account

   $ 13,214,286    10,170,300

Fidelity Advisor Equity Growth Account

     6,808,784    3,986,698

Alberto-Culver Company Common Stock

     6,554,021    3,891,280

Large Cap Growth/Turner Investment Partners Funds

     4,242,471    3,924,479

Dryden S&P 500 Index Fund

     3,996,534    3,261,777

Fidelity Advisor Balanced Account

     3,461,708    2,461,663

Large Cap Value/John A. Levin & Co. Fund

     3,455,226    *

* Fair value is less than 5% of Plan’s net assets

 

During the Plan years ended December 31, 2004 and 2003, the Plan’s investments (including investments bought, sold, and held during the year) appreciated in value as follows:

 

     2004

   2003

Pooled Separate Accounts

   $ 3,323,086    5,014,172

Alberto-Culver Company Common Stock

     786,624    682,892
    

  

Net appreciation in fair value

   $ 4,109,710    5,697,064
    

  

 

(7) Reconciliation of Financials Statements to Form 5500

 

The following is a reconciliation of net assets available for benefits included in the financial statements at December 31, 2004 to the Form 5500:

 

     2004

 

Net assets available for benefits included in the financial statements

   $ 63,233,243  

Amounts payable to withdrawing participants at December 31, 2004

     (776 )

Net assets available for benefits included in the IRS Form 5500

   $ 63,232,467  
    


 

(Continued)

9


Table of Contents

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Notes to Financial Statements

 

December 31, 2004 and 2003

 

The following is a reconciliation of benefits paid to participants per the financial statements for the Plan years ended December 31, 2004 and 2003 to the Form 5500:

 

     2004

   2003

 

Benefits paid to participants per the financial statements

   $ 3,570,517    3,430,032  

Add amounts payable to withdrawing participants in current year

     776    —    

Less amounts payable to withdrawing participants in prior year

     —      (2,274 )
    

  

Benefits paid to participants per IRS Form 5500

   $ 3,571,293    3,427,758  
    

  

 

(8) Subsequent Events

 

Effective January 1, 2004, annual participant contributions and catch-up contributions will be limited to $14,000 and $4,000, respectively.

 

(Continued)

10


Table of Contents

Schedule 1

 

SALLY BEAUTY

401(k) SAVINGS PLAN

 

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

 

December 31, 2004

 

Identity of issuer, borrower,
lessor, or similar party


  

Description of investment including
maturity date, rate of interest,
par value, or number of shares


   Number of
shares/units


   Current
value


* Prudential Retirement Insurance and Annuity Company

   Principal Preservation Separate Account    1,272,916 Units    $ 13,214,286

* Prudential Retirement Insurance and Annuity Company

   Fidelity Advisor Equity Growth Account    87,790 Units      6,808,784

* Alberto-Culver Company

   Alberto-Culver Company Common Stock Fund    134,855 Shares      6,554,021

* Prudential Retirement Insurance and Annuity Company

   Large Cap Growth/Turner Investment Partners Fund    394,077 Units      4,242,471

* Prudential Retirement Insurance and Annuity Company

   Dryden S&P 500 Index Fund    57,755 Units      3,996,534

* Prudential Retirement Insurance and Annuity Company

   Fidelity Advisor Balanced Account    99,242 Units      3,461,708

* Prudential Retirement Insurance and Annuity Company

   Large Cap Value/John A. Levin & Co. Fund    211,222 Units      3,455,226

* Prudential Retirement Insurance and Annuity Company

   International Equity/Julius Baer Fund    172,907 Units      2,884,112

* Prudential Retirement Insurance and Annuity Company

   Oppenheimer Global Fund (Class A Shares)    44,687 Units      2,749,645

* Prudential Retirement Insurance and Annuity Company

   Balanced I Fund/(Sub-advised by Wellington Management)    40,092 Units      1,687,247

* Prudential Retirement Insurance and Annuity Company

   Small Cap Growth/TimesSquare Fund    85,666 Units      1,642,672

* Prudential Retirement Insurance and Annuity Company

   Small Cap Value/Perkins, Wolf, McDonnell Fund    67,010 Units      1,572,964

* Prudential Retirement Insurance and Annuity Company

   Lifetime 50    84,370 Units      1,201,067

* Prudential Retirement Insurance and Annuity Company

   Lifetime 40    80,795 Units      1,138,668

* Prudential Retirement Insurance and Annuity Company

   Lifetime 30    75,393 Units      1,076,455

* Prudential Retirement Insurance and Annuity Company

   Mid Cap Blend/New Amsterdam Partners Fund    70,822 Units      965,464

* Prudential Retirement Insurance and Annuity Company

   Lifetime 20    53,123 Units      752,093

* Prudential Retirement Insurance and Annuity Company

   Mid Cap Value/(Sub-advised by Wellington Management)    27,961 Units      472,655

* Prudential Retirement Insurance and Annuity Company

   Mid Cap Growth/Artisan Partners Fund    44,633 Units      458,167

* Prudential Retirement Insurance and Annuity Company

   Lifetime 60    14,113 Units      203,670

* Participant Loans

   Loans to participants, bearing interest from 5.00% to 10.50% with    —        2,099,197
              

     varying maturities through 2014         $ 60,637,106
              


* Represents a party-in-interest.

 

See accompanying report of independent registered public accounting firm.

 

11


Table of Contents

Consent of Independent Registered Public Accounting Firm

 

The Board of Directors

Alberto-Culver Company:

 

We consent to the incorporation by reference in the registration statement (No. 333-70067) on Form S-8 of Alberto-Culver Company of our report dated June 24, 2005, with respect to the Statements of Net Assets Available for Benefits of the Sally Beauty 401(k) Savings Plan as of December 31, 2004 and 2003, and the related Statements of Changes in Net Assets Available for Benefits for the years then ended, and the related supplemental schedule, which report appears in the December 31, 2004 annual report on Form 11-K of Alberto-Culver Company.

 

/s/ KPMG LLP

 

Chicago, Illinois

June 28, 2005


Table of Contents

SIGNATURES

 

The Plans: Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plans) have duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized.

 

SALLY BEAUTY 401(k) SAVINGS PLAN

By:  

/s/ William J. Cernugel

   

Sally Beauty Company, Inc., Plan Administrator

 

 

ALBERTO-CULVER 401(k) SAVINGS PLAN

By:  

/s/ William J. Cernugel

   

Alberto-Culver Company, Plan Administrator

 

Dated: June 29, 2005