[July 09, 2015] |
|
Helen of Troy Limited Reports First Quarter Fiscal Year 2016 Results
Helen of Troy Limited (NASDAQ, NM:HELE), designer, developer and
worldwide marketer of consumer brand-name housewares, healthcare/home
environment, nutritional supplement and beauty products, today reported
results for the three-month period ended May 31, 2015.
Julien R. Mininberg, Chief Executive Officer, stated: "We had a solid
first quarter positioning us well to achieve our annual goals. The
quarter was highlighted by a double digit increase in revenue and growth
in adjusted diluted earnings per share, in line with our expectations,
despite a greater-than-expected impact from foreign currency and the
West Coast port disruption. Leading our quarterly performance was our
Healthcare/Home Environment segment driven by new product introductions,
a relatively strong end to the flu season and the VapoSteam acquisition
notwithstanding a significant foreign currency headwind. The Healthy
Directions acquisition contributed almost $40 million to sales revenue.
Housewares had a slight decline in the quarter, as strong point-of-sale
activity and new product introductions were offset by a shift in timing
of customer orders and inventory levels at several key retailers. In
Beauty, we reorganized and renamed the segment formerly known as
Personal Care. While Beauty sales were down year-over-year, we made
continued progress toward stability. We remain highly focused on
executing our multi-year growth strategy and believe we are on track to
achieve the objectives we have set for ourselves for the current fiscal
year."
Key Highlights for the First Quarter of Fiscal
Year 2016 Compared to the First Quarter of Fiscal Year 2015
-
Net sales revenue increased $33.6 million, or 10.8%, which includes a
2.1% decrease in core business net sales revenue (excluding
Nutritional Supplements and VapoSteam). The decrease in core business
net sales revenue includes a negative impact of 2.5% from foreign
currency fluctuations.
-
Healthcare/Home Environment rose 0.4%, driven by new product
introductions, a relatively strong end to the cold/flu season and
the VapoSteam acquisition, primarily offset by a negative impact
of $5.2 million, or 3.6% from foreign currency fluctuations.
-
Housewares declined $1.6 million, or 2.4%, primarily due to a
shift in the timing of customer orders of an estimated $3.0
million into the fourth quarter of fiscal year 2015 and an
estimated $1.0 million into the second quarter of fiscal year
2016, and inventory adjustments by several key retailers. The
decline was partially offset by strong point-of-sale activity,
continued growth with existing products, such as the infant and
toddler care line, and new products, including the GreenSaver
storage containers.
-
Beauty declined 4.7%, which included a negative impact of $2.2
million, or 2.1% from foreign currency fluctuations. The West
Coast port disruption also negatively impacted net sales revenue.
-
Healthy Directions, which comprises the Nutritional Supplements
segment, contributed $39.4 million to net sales revenue.
-
VapoSteam contributed $0.7 million to net sales revenue.
-
Gross margin expanded 3.2 percentage points to 41.5% due primarily to
the Healthy Directions acquisition.
-
Foreign currency exchange losses from balance sheet re-measurement,
transactions and hedge settlements increased SG&A expense by $0.9
million compared to the same period last year.
-
Diluted EPS was $0.70 and adjusted diluted EPS was $1.06 on 29.1
million shares outstanding.
-
Adjusted EBITDA increased $0.2 million to $42.1 million.
First Quarter of Fiscal Year 2016 Consolidated
Operating Results
-
Net sales revenue increased 10.8% to $345.3 million compared to $311.8
million in the first quarter of fiscal year 2015, and includes three
months of operations of Healthy Directions, which was acquired on June
30, 2014 and two months of operations of the VapoSteam business, which
was acquired on March 31, 2015. Net sales revenue reflects a decline
in core business net sales revenue of $6.5 million, or 2.1%. Foreign
currency fluctuations decreased consolidated U.S. Dollar reported net
sales revenue by $7.7 million, or 2.5%, year-over-year. Additionally,
the impact of the West Coast port disruption negatively impacted net
sales revenue, primarily in the Beauty segment.
-
Gross profit margin increased 3.2 percentage points to 41.5% compared
to 38.3% for the same period last year. This increase reflects the
impact of the Nutritional Supplements segment and the recent
acquisition of VapoSteam, which had a combined favorable impact of 4.0
percentage points on the consolidated gross profit margin. Gross
profit margin for the core business declined by 0.8 percentage points
primarily due to the unfavorable impact of foreign currency
fluctuations.
-
SG&A was 32.9% of net sales compared to 28.0% of net sales for the
same period last year. The increase is primarily due to a higher
relative SG&A ratio in the Nutritional Supplements segment, which
increased the SG&A ratio by 4.2 percentage points. The SG&A ratio in
the core business increased 0.8 percentage points, primarily due to
higher year-over-year net foreign currency exchange losses of $0.9
million, as well as higher compensation expense and investments in
advertising, marketing and product development.
-
Operating income was $26.5 million compared to $23.1 million for the
same period last year. Operating income for the fiscal quarter ended
May 31, 2015 includes non-cash asset impairment charges of $3.0
million, compared to $9.0 million for the same period last year.
-
Income tax expense as a percentage of pretax income was 14.2% compared
to 17.0% for the same period last year. The year-over-year comparison
of our effective tax rate was primarily impacted by shifts in the mix
of taxable income in our various tax jurisdictions.
-
Net income was $20.4 million, or $0.70 per diluted share on 29.1
million weighted average diluted shares outstanding. This compares to
net income in the first quarter of fiscal year 2015 of $16.4 million,
or $0.55 per diluted share on 29.6 million weighted average diluted
shares outstanding. Net income for the fiscal quarter ended May 31,
2015 includes after-tax non-cash asset impairment charges of $2.7
million, compared to $8.2 million for the same period last year.
-
Adjusted EBITDA (EBITDA excluding non-cash asset impairment charges
and non-cash share-based compensation, as applicable) was $42.1
million compared to $41.9 million in the same period last year.
On an adjusted basis for the first quarter of fiscal years 2016 and
2015, excluding non-cash asset impairment charges, non-cash amortization
of intangible assets, and non-cash share based compensation, as
applicable:
-
Adjusted operating income was $38.4 million compared to $38.7 million
for the first quarter of fiscal year 2015.
-
Adjusted income was $30.7 million, or $1.06 per diluted share,
compared to $30.8 million, or $1.04 per diluted share, for the first
quarter of fiscal year 2015.
Balance Sheet Highlights
-
Cash and cash equivalents totaled $15.3 million at May 31, 2015,
compared to $29.2 million at May 31, 2014.
-
Total short- and long-term debt increased to $438.8 million at May 31,
2015, compared to $425.7 million at May 31, 2014. The increase
primarily reflects borrowings incurred in conjunction with the
acquisition of Healthy Directions for $195.9 million in the second
quarter of fiscal year 2015, and the VapoSteam transactions that
totaled $42.8 million in the first quarter of fiscal year 2016.
-
Accounts receivable turnover was 57.1 days at May 31, 2015, compared
to 63.2 days at May 31, 2014.
-
Inventory was $299.3 million at May 31, 2015, compared to $298.5
million at May 31, 2014.
Recent Events
On March 31, 2015, the Company announced that it had acquired the Vicks®
VapoSteam® U.S. liquid inhalant business from The Procter & Gamble
Company ("P&G"), which includes a fully paid-up license to the Vicks
VapoSteam trademarks. In a related transaction, the Company also
acquired a fully paid-up license of P&G's Vicks VapoPad® trademarks for
scent pads in the United States. The vast majority of Vicks VapoSteam
and VapoPads are used in Vicks humidifiers, vaporizers and other health
care devices already marketed by Helen of Troy. The transaction includes
the acquisition of certain production assets and the inventory related
to the above categories, as well as the right to use related
intellectual property. The VapoSteam acquisition was financed with the
Company's revolving credit facility. The United States Vicks VapoSteam
business that was part of the transaction had annual revenues of
approximately $10 million in calendar year 2014. The aggregate
consideration for the two transactions was approximately $42.8 million.
Early in March 2015, the Company announced the introduction of a premium
line of kitchen electrics under the OXO On brand. The initial line will
consist of motorized toasters, coffee makers, a coffee grinder, an
electric kettle, an immersion blender and a hand mixer. The line will
ship initially in the U.S. offering several unique features, as well as
elements based on OXO's universal design ethos. The Company believes OXO
On appliances will provide the simplicity, functionality, and
thoughtfulness consumers have come to expect from the OXO brand. The
line is expected to ship to retail stores in the second half of fiscal
year 2016.
Fiscal Year 2016 Annual Outlook
The Company is maintaining its fiscal year 2016 outlook. For fiscal year
2016, the Company continues to expect consolidated net sales revenue in
the range of $1.485 to $1.536 billion and diluted EPS (GAAP) in the
range of $4.33 to $4.73. This includes expected sales and diluted EPS
from VapoSteam. The Company continues to expect sales and diluted EPS
(GAAP) from the VapoSteam acquisition to be in the range of $10 million
to $11 million and $0.03 to $0.08, respectively, for the eleven months
included in our fiscal year 2016 results.
The Company continues to expect consolidated adjusted diluted EPS
(non-GAAP) to be in the range of $5.40 to $5.85, which excludes
after-tax non-cash asset impairment charges, non-cash share-based
compensation expense and intangible asset amortization expense. This
includes expected sales and adjusted diluted EPS from VapoSteam. The
Company continues to expect adjusted diluted EPS (non-GAAP) for
VapoSteam to be in the range of $0.04 to $0.11, which excludes after-tax
non-cash share-based compensation expense and intangible asset
amortization expense.
The Company's fiscal year 2016 outlook assumes current foreign currency
exchange rates for the remainder of the fiscal year, which are expected
to negatively impact year-over-year net sales revenue by approximately
$28.0 million, net income by approximately $17.0 million, and earnings
per share by approximately $0.59. The diluted EPS outlook is based on an
estimated weighted average shares outstanding of 29.0 million for the
full fiscal year 2016. Further, the Company's guidance assumes that the
severity of the cold/flu season will be in line with historical
averages. The likelihood and potential impact of any fiscal year 2016
acquisitions other than VapoSteam, future asset impairment charges,
future foreign currency fluctuations, including any potential currency
devaluation in Venezuela, or share repurchases are unknown and cannot be
reasonably estimated; therefore they are not included in the Company's
sales and earnings outlook.
As previously disclosed, in fiscal year 2015 the Company benefitted from
an after-tax gain of $0.24 per share from the amendment of a license
agreement, an after-tax decrease in product liability estimates of $0.05
per share and tax benefits of $0.15 per share that are not expected to
repeat in fiscal year 2016. These items negatively impact the
year-over-year comparison of adjusted diluted EPS by a combined $0.44.
Conference Call and Webcast
The Company will conduct a teleconference in conjunction with today's
earnings release. The teleconference begins at 4:45 pm Eastern Time
today, Thursday, July 9, 2015. Institutional investors and analysts
interested in participating in the call are invited to dial (888)
329-8877 approximately ten minutes prior to the start of the call. The
conference call will also be webcast live at: www.hotus.com.
A telephone replay of this call will be available at 7:45 p.m. Eastern
Time on July 9, 2015 until 11:59 p.m. Eastern Time on July 16, 2015 and
can be accessed by dialing (877) 870-5176 and entering replay pin number
8777201. A replay of the webcast will remain available on the website
for 60 days.
Non-GAAP Financial Measures:
The Company reports and discusses its operating results using
financial measures consistent with accounting principles generally
accepted in the United States of America ("GAAP"). To supplement
its presentation, the Company discloses certain financial measures that
may be considered non-GAAP financial measures, such as adjusted
operating income, adjusted income, adjusted diluted EPS, EBITDA and
adjusted EBITDA, which are presented in accompanying tables to this
press release along with a reconciliation of these financial measures to
their corresponding GAAP-based measures presented in the Company's
consolidated statements of income.
About Helen of Troy Limited:
Helen of Troy Limited is a leading global consumer products company
offering creative solutions for its customers through a strong portfolio
of well-recognized and widely-trusted brands, including: Housewares:
OXO®, Good Grips®, Soft Works®, OXO tot® and OXO Steel®; Healthcare/Home
Environment: Vicks®, Braun®, Honeywell®, PUR®, Febreze®, Stinger®,
Duracraft® and SoftHeat®; and Beauty: Revlon®, Vidal Sassoon®, Dr.
Scholl's®, Pro Beauty Tools®, Sure®, Pert®, Infusium23®, Brut®, Ammens®,
Hot Tools®, Bed Head®, Karina®, Ogilvie® and Gold 'N Hot®. The
Nutritional Supplements segment was formed with the acquisition of
Healthy Directions, a U.S. market leader in premium doctor-branded
vitamins, minerals and supplements, as well as other health products
sold directly to consumers. The Honeywell® trademark is used under
license from Honeywell International Inc. The Vicks®, Braun®, Febreze®
and Vidal Sassoon® trademarks are used under license from The Procter &
Gamble Company. The Revlon® trademark is used under license from Revlon
Consumer Products Corporation. The Bed Head® trademark is used under
license from Unilever PLC. The Dr. Scholl's® trademark is used under
license from MSD Consumer Care, Inc.
For more information about Helen of Troy, please visit www.hotus.com.
Forward Looking Statements:
This press release may contain forward-looking statements, which are
subject to change. The forward-looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Any or all of the forward-looking statements may turn out
to be wrong. They can be affected by inaccurate assumptions or by known
or unknown risks and uncertainties. Many of these factors will be
important in determining the Company's actual future results.
Consequently, no forward-looking statement can be guaranteed. Actual
future results may vary materially from those expressed or implied in
any forward-looking statements. The forward-looking statements are
qualified in their entirety by a number of risks that could cause actual
results to differ materially from historical or anticipated results.
Generally, the words "anticipates", "estimates", "believes", "expects",
"plans", "may", "will", "should", "seeks", "project", "predict",
"potential", "continue", "intends", and other similar words identify
forward-looking statements. The Company cautions readers not to place
undue reliance on forward-looking statements. The Company intends its
forward-looking statements to speak only as of the time of such
statements, and does not undertake to update or revise them as more
information becomes available. The forward-looking statements contained
in this press release should be read in conjunction with, and are
subject to and qualified by, the risks described in the Company's Form
10-K for the year ended February 28, 2015 and in our other filings with
the SEC. Investors are urged to refer to the risk factors referred to
above for a description of these risks. Such risks include, among
others, the departure and recruitment of key personnel, the Company's
ability to deliver products to our customers in a timely manner, the
costs of complying with the business demands and requirements of large
sophisticated customers, the Company's relationship with key customers
and licensors, our dependence on the strength of retail economies and
vulnerabilities to an economic downturn, expectations regarding
acquisitions and the integration of acquired businesses, exchange rate
risks, disruptions in U.S., European and other international credit
markets, risks associated with weather conditions, the Company's
dependence on foreign sources of supply and foreign manufacturing, risks
associated with the availability, purity and integrity of materials used
in nutritional supplements, the impact of changing costs of raw
materials and energy on cost of goods sold and certain operating
expenses, the Company's geographic concentration of certain U.S.
distribution facilities, which increases our exposure to
significant shipping disruptions and added shipping and storage costs,
the Company's projections of product demand, sales, net income and
earnings per share are highly subjective and our future net sales
revenue and net income could vary in a material amount from such
projections, circumstances that may contribute to future impairment of
goodwill, intangible or other long-lived assets, the risks associated
with the use of trademarks licensed from and to third parties, the
Company's ability to develop and introduce innovative new products to
meet changing consumer preferences, increased product liability and
reputational risks associated with the formulation and distribution of
nutritional supplements, risks associated with adverse publicity and
negative public perception regarding the use of nutritional supplements,
trade barriers, exchange controls, expropriations, and other risks
associated with foreign operations, the Company's debt leverage and the
constraints it may impose, the costs, complexity and challenges of
upgrading and managing our global information systems, the risks
associated with information security breaches, the increased complexity
of compliance with a number of new government regulations as a result of
adding nutritional supplements to the Company's portfolio of products,
the risks associated with tax audits and related disputes with taxing
authorities, potential changes in laws, including tax laws, and the
Company's ability to continue to avoid classification as a controlled
foreign corporation.
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HELEN OF TROY LIMITED AND SUBSIDIARIES
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Consolidated Condensed Statements of Income and Reconciliation
of Non-GAAP Financial Measures - Adjusted Operating Income,
|
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Adjusted Income and Adjusted Diluted Earnings per Share ("EPS")
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(Unaudited)
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(in thousands, except per share data)
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Three Months ended May 31,
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2015
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2014
|
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|
|
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|
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As Reported (GAAP)
|
|
|
|
|
Adjustments (1)
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|
|
Adjusted (non-GAAP) (1)
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As Reported (GAAP)
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Adjustments (1)
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Adjusted (non-GAAP) (1)
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|
Sales revenue, net
|
|
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$
|
|
345,345
|
|
|
|
|
|
100.0
|
|
%
|
|
|
|
$
|
-
|
|
|
|
|
$
|
|
345,345
|
|
|
|
|
|
100.0
|
|
%
|
|
|
|
$
|
|
311,778
|
|
|
|
|
|
100.0
|
|
%
|
|
|
|
$
|
-
|
|
|
|
|
$
|
|
311,778
|
|
|
|
|
100.0
|
|
%
|
|
Cost of goods sold
|
|
|
|
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|
202,026
|
|
|
|
|
|
58.5
|
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%
|
|
|
|
|
-
|
|
|
|
|
|
|
202,026
|
|
|
|
|
|
58.5
|
|
%
|
|
|
|
|
|
192,258
|
|
|
|
|
|
61.7
|
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
192,258
|
|
|
|
|
61.7
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%
|
|
Gross profit
|
|
|
|
|
|
143,319
|
|
|
|
|
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41.5
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|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
143,319
|
|
|
|
|
|
41.5
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|
%
|
|
|
|
|
|
119,520
|
|
|
|
|
|
38.3
|
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
119,520
|
|
|
|
|
38.3
|
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%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expense
|
|
|
|
|
|
113,776
|
|
|
|
|
|
32.9
|
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
104,901
|
|
|
|
|
|
30.4
|
|
%
|
|
|
|
|
|
87,397
|
|
|
|
|
|
28.0
|
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
80,843
|
|
|
|
|
25.9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,061
|
)
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,295
|
)
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,814
|
)
|
(3
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,259
|
)
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment charges
|
|
|
|
|
|
3,000
|
|
|
|
|
|
0.9
|
|
%
|
|
|
|
|
(3,000
|
)
|
(4
|
)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
%
|
|
|
|
|
|
9,000
|
|
|
|
|
|
2.9
|
|
%
|
|
|
|
|
(9,000
|
)
|
(4
|
)
|
|
|
|
|
-
|
|
|
|
|
-
|
|
%
|
|
Operating income
|
|
|
|
|
|
26,543
|
|
|
|
|
|
7.7
|
|
%
|
|
|
|
|
11,875
|
|
|
|
|
|
|
38,418
|
|
|
|
|
|
11.1
|
|
%
|
|
|
|
|
|
23,123
|
|
|
|
|
|
7.4
|
|
%
|
|
|
|
|
15,554
|
|
|
|
|
|
|
38,677
|
|
|
|
|
12.4
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income, net
|
|
|
|
|
|
138
|
|
|
|
|
|
-
|
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
138
|
|
|
|
|
|
-
|
|
%
|
|
|
|
|
|
50
|
|
|
|
|
|
-
|
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
50
|
|
|
|
|
-
|
|
%
|
|
Interest expense
|
|
|
|
|
|
(2,892
|
)
|
|
|
|
|
(0.8
|
)
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
(2,892
|
)
|
|
|
|
|
(0.8
|
)
|
%
|
|
|
|
|
|
(3,417
|
)
|
|
|
|
|
(1.1
|
)
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
(3,417
|
)
|
|
|
|
(1.1
|
)
|
%
|
|
Total other expense
|
|
|
|
|
|
(2,754
|
)
|
|
|
|
|
(0.8
|
)
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
(2,754
|
)
|
|
|
|
|
(0.8
|
)
|
%
|
|
|
|
|
|
(3,367
|
)
|
|
|
|
|
(1.1
|
)
|
%
|
|
|
|
|
-
|
|
|
|
|
|
|
(3,367
|
)
|
|
|
|
(1.1
|
)
|
%
|
|
Income before income taxes
|
|
|
|
|
|
23,789
|
|
|
|
|
|
6.9
|
|
%
|
|
|
|
|
11,875
|
|
|
|
|
|
|
35,664
|
|
|
|
|
|
10.3
|
|
%
|
|
|
|
|
|
19,756
|
|
|
|
|
|
6.3
|
|
%
|
|
|
|
|
15,554
|
|
|
|
|
|
|
35,310
|
|
|
|
|
11.3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
3,379
|
|
|
|
|
|
1.0
|
|
%
|
|
|
|
|
1,583
|
|
(5
|
)
|
|
|
|
|
4,962
|
|
|
|
|
|
1.4
|
|
%
|
|
|
|
|
|
3,358
|
|
|
|
|
|
1.1
|
|
%
|
|
|
|
|
1,189
|
|
(5
|
)
|
|
|
|
|
4,547
|
|
|
|
|
1.5
|
|
%
|
|
Net income
|
|
|
|
$
|
|
20,410
|
|
|
|
|
|
5.9
|
|
%
|
|
|
|
$
|
10,292
|
|
|
|
|
$
|
|
30,702
|
|
|
|
|
|
8.9
|
|
%
|
|
|
|
$
|
|
16,398
|
|
|
|
|
|
5.3
|
|
%
|
|
|
|
$
|
14,365
|
|
|
|
|
$
|
|
30,763
|
|
|
|
|
9.9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
$
|
|
0.70
|
|
|
|
|
|
|
|
|
|
|
$
|
0.36
|
|
|
|
|
$
|
|
1.06
|
|
|
|
|
|
|
|
|
|
|
$
|
|
0.55
|
|
|
|
|
|
|
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
used in computing diluted EPS
|
|
|
|
|
|
29,088
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
29,088
|
|
|
|
|
|
|
|
|
|
|
|
|
29,616
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
29,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HELEN OF TROY LIMITED AND SUBSIDIARIES
|
|
Net Sales Revenue by Segment
|
(Unaudited)
|
(in thousands)
|
|
|
|
|
|
Three Months Ended May 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Sales Revenue, net
|
|
|
|
|
|
2015 (6
|
)
|
|
|
2014
|
|
|
|
$ Change
|
|
|
|
|
|
|
% Change
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Sales revenue by segment, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Housewares
|
|
|
|
$
|
|
65,186
|
|
|
|
$
|
|
66,756
|
|
|
|
$
|
|
(1,570
|
)
|
|
|
|
|
|
(2.4
|
)
|
%
|
|
|
|
|
|
18.9
|
%
|
|
|
21.4
|
%
|
Healthcare / Home Environment
|
|
|
|
|
|
143,042
|
|
|
|
|
|
142,489
|
|
|
|
|
|
553
|
|
|
|
|
|
|
0.4
|
|
%
|
|
|
|
|
|
41.4
|
%
|
|
|
45.7
|
%
|
Nutritional Supplements
|
|
|
|
|
|
39,440
|
|
|
|
|
|
-
|
|
|
|
|
|
39,440
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
11.4
|
%
|
|
|
-
|
%
|
Beauty
|
|
|
|
|
|
97,677
|
|
|
|
|
|
102,533
|
|
|
|
|
|
(4,856
|
)
|
|
|
|
|
|
(4.7
|
)
|
%
|
|
|
|
|
|
28.3
|
%
|
|
|
32.9
|
%
|
Total sales revenue, net
|
|
|
|
$
|
|
345,345
|
|
|
|
$
|
|
311,778
|
|
|
|
$
|
|
33,567
|
|
|
|
|
|
|
10.8
|
|
%
|
|
|
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
* Calculation is not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
HELEN OF TROY LIMITED AND SUBSIDIARIES
|
|
|
|
|
|
Selected Consolidated Balance Sheet, Cash Flow and Liquidity
Information
|
|
|
(Unaudited)
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
May 31,
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
|
|
15,262
|
|
|
|
$
|
|
|
29,170
|
|
|
Receivables, net
|
|
|
|
|
|
|
|
210,001
|
|
|
|
|
|
|
217,415
|
|
|
Inventory, net
|
|
|
|
|
|
|
|
299,300
|
|
|
|
|
|
|
298,450
|
|
|
Total assets, current
|
|
|
|
|
|
|
|
565,743
|
|
|
|
|
|
|
586,294
|
|
|
Total assets
|
|
|
|
|
|
|
|
1,687,138
|
|
|
|
|
|
|
1,487,655
|
|
|
Total liabilities, current
|
|
|
|
|
|
|
|
268,442
|
|
|
|
|
|
|
541,471
|
|
|
Total long-term liabilities
|
|
|
|
|
|
|
|
486,559
|
|
|
|
|
|
|
166,381
|
|
|
Total debt
|
|
|
|
|
|
|
|
438,807
|
|
|
|
|
|
|
425,707
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
932,137
|
|
|
|
|
|
|
779,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
$
|
|
|
10,354
|
|
|
|
$
|
|
|
8,500
|
|
|
Net cash provided by operating activities
|
|
|
|
|
|
|
|
37,499
|
|
|
|
|
|
|
2,971
|
|
|
Capital and intangible asset expenditures
|
|
|
|
|
|
|
|
2,717
|
|
|
|
|
|
|
1,822
|
|
|
Payments to acquire businesses, net of cash received
|
|
|
|
|
|
|
|
42,750
|
|
|
|
|
|
|
-
|
|
|
Net amounts borrowed
|
|
|
|
|
|
|
|
5,600
|
|
|
|
|
|
|
233,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
|
|
|
|
|
$
|
|
|
297,301
|
|
|
|
$
|
|
|
44,823
|
|
|
Leverage Ratio (8)
|
|
|
|
|
|
|
|
1.97
|
|
|
|
|
|
|
2.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED OTHER DATA
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures - EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amortization)
and
|
|
|
Adjusted EBITDA
|
|
|
(Unaudited)
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended May 31,
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
|
20,410
|
|
|
|
$
|
|
16,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
|
2,874
|
|
|
|
|
|
3,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
3,379
|
|
|
|
|
|
3,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization, excluding amortized interest
|
|
|
|
|
|
10,354
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (Earnings before interest, taxes, depreciation and
amortization) (1)
|
|
|
|
$
|
|
37,017
|
|
|
|
$
|
|
31,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as calculated above (1)
|
|
|
|
$
|
|
37,017
|
|
|
|
$
|
|
31,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash share-based compensation (2)
|
|
|
|
|
|
2,061
|
|
|
|
|
|
1,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash asset impairment charges (4)
|
|
|
|
|
|
3,000
|
|
|
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1)
|
|
|
|
$
|
|
42,078
|
|
|
|
$
|
|
41,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED OTHER DATA
|
|
Reconciliation of Non-GAAP Financial Measures - EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amortization)
and
|
Adjusted EBITDA by Segment
|
(Unaudited)
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended May 31, 2015
|
|
|
|
|
|
|
|
Housewares
|
|
|
|
Healthcare / Home Environment
|
|
|
|
Nutritional Supplements
|
|
|
|
Beauty
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
$
|
|
|
11,183
|
|
|
|
$
|
8,418
|
|
|
|
$
|
2,620
|
|
|
|
$
|
|
|
4,322
|
|
|
|
$
|
|
|
26,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization, excluding amortized interest
|
|
|
|
|
|
|
|
1,008
|
|
|
|
|
5,063
|
|
|
|
|
1,968
|
|
|
|
|
|
|
2,315
|
|
|
|
|
|
|
10,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income / (expense)
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
120
|
|
|
|
|
|
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (Earnings before interest, taxes, depreciation and
amortization) (1)
|
|
|
|
|
$
|
|
|
12,191
|
|
|
|
$
|
13,481
|
|
|
|
$
|
4,588
|
|
|
|
$
|
|
|
6,757
|
|
|
|
$
|
|
|
37,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as calculated above (1)
|
|
|
|
|
$
|
|
|
12,191
|
|
|
|
$
|
13,481
|
|
|
|
$
|
4,588
|
|
|
|
$
|
|
|
6,757
|
|
|
|
$
|
|
|
37,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash share-based compensation (2)
|
|
|
|
|
|
|
|
306
|
|
|
|
|
595
|
|
|
|
|
303
|
|
|
|
|
|
|
857
|
|
|
|
|
|
|
2,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash asset impairment charges (4)
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1)
|
|
|
|
|
$
|
|
|
12,497
|
|
|
|
$
|
14,076
|
|
|
|
$
|
4,891
|
|
|
|
$
|
|
|
10,614
|
|
|
|
$
|
|
|
42,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended May 31, 2014
|
|
|
|
|
|
|
|
Housewares
|
|
|
|
Healthcare / Home Environment
|
|
|
|
Nutritional Supplements
|
|
|
|
Beauty
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
$
|
|
|
13,035
|
|
|
|
$
|
8,717
|
|
|
|
$
|
-
|
|
|
|
$
|
|
|
1,371
|
|
|
|
$
|
|
|
23,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization, excluding amortized interest
|
|
|
|
|
|
|
|
888
|
|
|
|
|
5,232
|
|
|
|
|
-
|
|
|
|
|
|
|
2,380
|
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income / (expense)
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
29
|
|
|
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (Earnings before interest, taxes, depreciation and
amortization) (1)
|
|
|
|
|
$
|
|
|
13,923
|
|
|
|
$
|
13,949
|
|
|
|
$
|
-
|
|
|
|
$
|
|
|
3,780
|
|
|
|
$
|
|
|
31,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as calculated above (1)
|
|
|
|
|
$
|
|
|
13,923
|
|
|
|
$
|
13,949
|
|
|
|
$
|
-
|
|
|
|
$
|
|
|
3,780
|
|
|
|
$
|
|
|
31,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash share-based compensation (2)
|
|
|
|
|
|
|
|
274
|
|
|
|
|
581
|
|
|
|
|
-
|
|
|
|
|
|
|
440
|
|
|
|
|
|
|
1,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash asset impairment charges (4)
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
9,000
|
|
|
|
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1)
|
|
|
|
|
$
|
|
|
14,197
|
|
|
|
$
|
14,530
|
|
|
|
$
|
-
|
|
|
|
$
|
|
|
13,220
|
|
|
|
$
|
|
|
41,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HELEN OF TROY LIMITED AND SUBSIDIARIES
|
|
|
|
|
|
Reconciliation of GAAP Net Income and Earnings Per Share (EPS)
to Adjusted Income and Adjusted EPS (non-GAAP)
|
|
|
(dollars in thousands, except per share data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended May 31,
|
|
|
|
Basic EPS
|
|
|
|
Diluted EPS
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income as reported (GAAP)
|
|
|
|
|
$
|
|
20,410
|
|
|
|
$
|
|
16,398
|
|
|
|
$
|
|
|
0.72
|
|
|
|
$
|
|
|
0.56
|
|
|
|
$
|
|
|
0.70
|
|
|
|
$
|
|
|
0.55
|
|
|
Asset impairment charges, net of tax (4)
|
|
|
|
|
|
|
2,656
|
|
|
|
|
|
8,155
|
|
|
|
|
|
|
0.09
|
|
|
|
|
|
|
0.28
|
|
|
|
|
|
|
0.09
|
|
|
|
|
|
|
0.28
|
|
|
Subtotal
|
|
|
|
|
|
|
23,066
|
|
|
|
|
|
24,553
|
|
|
|
|
|
|
0.81
|
|
|
|
|
|
|
0.84
|
|
|
|
|
|
|
0.79
|
|
|
|
|
|
|
0.83
|
|
|
Non-cash share-based compensation, net of tax (2)
|
|
|
|
|
|
|
1,742
|
|
|
|
|
|
1,168
|
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
0.04
|
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
0.04
|
|
|
Amortization of intangible assets, net of tax (3)
|
|
|
|
|
|
|
5,894
|
|
|
|
|
|
5,042
|
|
|
|
|
|
|
0.21
|
|
|
|
|
|
|
0.17
|
|
|
|
|
|
|
0.20
|
|
|
|
|
|
|
0.17
|
|
|
Adjusted income (non-GAAP) (1)
|
|
|
|
|
$
|
|
30,702
|
|
|
|
$
|
|
30,763
|
|
|
|
$
|
|
|
1.08
|
|
|
|
$
|
|
|
1.06
|
|
|
|
$
|
|
|
1.06
|
|
|
|
$
|
|
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of common stock used in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
computing basic and diluted earnings per share (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,520
|
|
|
|
|
|
|
29,105
|
|
|
|
|
|
|
29,088
|
|
|
|
|
|
|
29,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HELEN OF TROY LIMITED AND SUBSIDIARIES
|
|
|
|
|
|
Reconciliation of Fiscal Year 2016 GAAP Outlook for GAAP
Diluted Earnings Per Share (EPS) to Adjusted Diluted EPS (non-GAAP)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended February 29, 2016 (7)
|
|
|
|
|
|
|
|
Quarter Ended May 31, 2015 (Three
Months)
|
|
|
|
Outlook for the Balance of the Fiscal
Year (Nine Months)
|
|
|
|
Outlook for the Fiscal Year (Twelve
Months)
|
|
|
Diluted EPS, as reported (GAAP)
|
|
|
|
|
$
|
|
|
0.70
|
|
|
|
$
|
3.54
|
|
-
|
|
$
|
3.94
|
|
|
|
|
4.24
|
|
-
|
|
$
|
4.64
|
|
|
Asset impairment charges, net of tax (4)
|
|
|
|
|
|
|
|
0.09
|
|
|
|
|
-
|
|
-
|
|
|
-
|
|
|
|
|
0.09
|
|
-
|
|
|
0.09
|
|
|
Subtotal
|
|
|
|
|
|
|
|
0.79
|
|
|
|
|
3.54
|
|
-
|
|
|
3.94
|
|
|
|
|
4.33
|
|
-
|
|
|
4.73
|
|
|
Non-cash share-based compensation, net of tax (2)
|
|
|
|
|
|
|
|
0.06
|
|
|
|
|
0.19
|
|
-
|
|
|
0.22
|
|
|
|
|
0.25
|
|
-
|
|
|
0.28
|
|
|
Amortization of intangible assets, net of tax (3)
|
|
|
|
|
|
|
|
0.20
|
|
|
|
|
0.62
|
|
-
|
|
|
0.64
|
|
|
|
|
0.82
|
|
-
|
|
|
0.84
|
|
|
Adjusted diluted EPS (non-GAAP) (1)
|
|
|
|
|
$
|
|
|
1.06
|
|
|
|
$
|
4.34
|
|
-
|
|
$
|
4.79
|
|
|
|
$
|
5.40
|
|
-
|
|
$
|
5.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HELEN OF TROY LIMITED AND SUBSIDIARIES
|
_____________________
|
Notes to Press Release
|
|
(1)
|
|
This press release contains non-GAAP financial measures. Adjusted
operating income, adjusted income, adjusted diluted EPS, EBITDA and
adjusted EBITDA ("Non-GAAP measures") that are discussed in the
accompanying press release or in the preceding tables are considered
non-GAAP financial information as contemplated by SEC Regulation G,
Rule 100. Accordingly, we are providing the preceding tables that
reconcile these measures to their corresponding GAAP-based measures
presented in our Consolidated Condensed Statements of Income in the
accompanying tables to the press release. The Company believes that
these non-GAAP measures provide useful information to management and
investors regarding financial and business trends relating to its
financial condition and results of operations. The Company believes
that these non-GAAP measures, in combination with the Company's
financial results calculated in accordance with GAAP, provides
investors with additional perspective. The Company further believes
that the items excluded from certain non-GAAP measures do not
accurately reflect the underlying performance of its continuing
operations for the periods in which they are incurred, even though
some of these excluded items may be incurred and reflected in the
Company's GAAP financial results in the foreseeable future. The
material limitation associated with the use of the non-GAAP
financial measures is that the non-GAAP measures do not reflect the
full economic impact of the Company's activities. These non-GAAP
measures are not prepared in accordance with GAAP, are not an
alternative to GAAP financial information, and may be calculated
differently than non-GAAP financial information disclosed by other
companies. Accordingly, undue reliance should not be placed on
non-GAAP information.
|
|
|
|
(2)
|
|
Adjustments consist of non-cash share-based compensation expense of
$2.06 million ($1.74 million after tax) and $1.30 million ($1.17
million after tax), for the three months ended May 31, 2015 and
2014, respectively. Share-based compensation expense is recognized
for share-based awards outstanding under share-based compensation
plans.
|
|
|
|
(3)
|
|
Adjustments consist of non-cash intangible asset amortization
expense of $6.81 million ($5.89 million after tax) and $5.26 million
($5.04 million after tax), respectively, for the three months ended
May 31, 2015 and 2014, respectively.
|
|
|
|
(4)
|
|
Adjustments consist of non-cash asset impairment charges of $3.00
million ($2.66 million after tax) and $9.00 million ($8.16 million
after tax) recorded during the three months ended May 31, 2015 and
2014, respectively, as a result of our annual evaluation of goodwill
and indefinite-lived intangible assets for impairment. The non-cash
charges relate to certain trademarks in our Beauty segment, which
were written down to their estimated fair value, determined on the
basis of future discounted cash flows using the relief from royalty
valuation method.
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(5)
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Total tax effects of adjustments described in Notes 2 through 4, for
each of the periods presented:
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Three Months Ended May 31,
|
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|
|
|
|
|
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2015
|
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|
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2014
|
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Tax Effects of Adjustments
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|
|
|
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|
|
|
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|
|
|
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Non-cash share-based compensation (2)
|
|
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|
$
|
|
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(319)
|
|
|
|
$
|
|
|
(127)
|
|
|
Amortization of intangible assets (3)
|
|
|
|
|
|
|
|
(920)
|
|
|
|
|
|
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(217)
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|
|
Asset impairment charges (4)
|
|
|
|
|
|
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|
(344)
|
|
|
|
|
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(845)
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Total
|
|
|
|
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$
|
|
|
(1,583)
|
|
|
|
$
|
|
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(1,189)
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|
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|
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(6)
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Includes three months of operations of Healthy Directions, which was
acquired on June 30, 2014, and two months of operations of the
VapoSteam business, which was acquired on March 31, 2015.
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(7)
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The diluted EPS outlook is based on an estimated weighted average
shares outstanding of 29.00 million for fiscal year 2016.
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(8)
|
|
The leverage ratio is computed as defined in the Company's
revolving credit agreement, which is as follows:
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Funded Indebtedness (a)
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|
|
|
|
________________________________________________________________________
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EBITDA (b) + Pro Forma Effect of Acquisitions (c)
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(a)
|
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Funded Indebtedness: total debt plus the total letters of credit
outstanding at the end of the reporting period.
|
|
|
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(b)
|
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EBITDA: earnings before non-cash charges, interest expense, taxes,
depreciation and amortization expense, and share-based compensation
for the latest reported four consecutive fiscal quarters.
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(c)
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Pro Forma Effect of Acquisitions: for any acquisition,
pre-acquisition EBITDA of the acquired business so that EBITDA of
the acquired business includes the latest twelve month trailing
total.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20150709006205/en/
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