- Delivers Second Quarter Revenue of
$369.1 Million; GAAP Diluted Earnings Per Share (EPS) of
$0.84
- Second Quarter Non-GAAP Adjusted
Diluted EPS of $1.12
- Company now Expects Fiscal Year 2016
GAAP Diluted EPS in a Range of $4.43 to $4.73 and Fiscal Year 2016
Non-GAAP Adjusted Diluted EPS in a Range of $5.50 to $5.85
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
August 31, 2015.
Julien R. Mininberg, Chief Executive Officer, stated: “We had a
strong second quarter, with year-over-year revenue growth of 15.4%
and core business revenue growth of 10.9%, both of which include a
foreign currency drag of 2.7%. All business segments grew in the
second quarter, including Beauty. We continue to make progress on
our key initiatives in product innovation, brand marketing, talent
development, shared services and collaboration across our business
segments, positioning us well to accomplish the goals we have set
for this full fiscal year. With capital allocation representing a
key component of our strategic plan, we returned capital to
shareholders by repurchasing $50.0 million of our common stock on
the open market. Since the second quarter of last year, we have
invested $92.8 million in acquisition and share repurchase, while
reducing our total debt by $125.3 million.
For the first six months of fiscal year 2016, revenue grew 13.1%
year-over-year, and core business revenue increased 4.5%, despite a
foreign currency drag of 2.6%. Our Healthcare/Home Environment
segment saw revenue growth of 6.5% for the first half of fiscal
2016, driven by successful new product introductions and strong
retail sell-through of seasonal products. The Nutritional
Supplements segment contributed over $77 million to revenue for the
first half of fiscal 2016. Housewares grew revenue by 5.6% for the
first half of fiscal 2016, driven by strong point-of-sale activity,
and new product introductions, partially offset by a shift in
timing of customer orders into the fourth quarter of fiscal year
2015. Beauty segment sales increased 2.3% for the first half of
fiscal 2016 despite a foreign currency drag of 2.4%, supported by
new distribution in foot care and new product introductions. We
believe the Beauty segment results reflect further progress toward
stabilization.
We expect continued progress in the second half of the fiscal
year. Our outlook reflects further progress on our key initiatives,
as well as our cautious view on the upcoming cold and flu season,
retail inventory levels, upward pressure on hourly wages, foreign
currency and the global economic environment.”
Key Highlights for the Second Quarter
of Fiscal Year 2016 Compared to the Second Quarter of Fiscal Year
2015
- Net sales revenue increased $49.2
million, or 15.4%, which includes a 10.9% increase in core business
net sales revenue (excluding incremental sales from Nutritional
Supplements and VapoSteam). The increase in net sales revenue
includes a negative impact of 2.7% from foreign currency
fluctuations.
- Healthcare/Home Environment rose 13.5%,
driven by successful new product introductions, strong retail
sell-through of fans due to the sustained high summer temperatures
in many regions, partially offset by declines in water filtration
and air purification and a negative impact of $5.7 million, or 4.5%
from foreign currency fluctuations.
- Housewares increased 13.2%, primarily
due to successful new product introductions and strong
point-of-sale activity.
- Beauty increased 9.6%, which included a
negative impact of $2.6 million, or 2.6%, from foreign currency
fluctuations. Growth was driven by new product distribution in foot
care, increases in the professional curling iron category, the
resolution of the West Coast port disruption that pushed sales from
the first quarter into the second quarter of fiscal year 2016, and
the comparative impact of inventory reductions by a major retailer
in the same period last year.
- The Nutritional Supplements segment
contributed net sales revenue of $38.1 million for the three months
of results included in the second quarter of fiscal year 2016,
compared to $24.6 million for the two months of results included in
the same period last year.
- The Company repurchased 556,591 shares
of outstanding common stock on the open market at a total cost of
$50.0 million in the second quarter.
- Diluted EPS was $0.84 and adjusted
diluted EPS was $1.12 on 29.0 million diluted shares
outstanding.
- Adjusted EBITDA increased $4.9 million
to $45.1 million.
Second Quarter of Fiscal Year 2016
Consolidated Operating Results
- Net sales revenue increased 15.4% to
$369.1 million compared to $319.9 million in the second quarter of
fiscal year 2015. Net sales revenue includes one additional month
of Nutritional Supplements results compared to the same period last
year, and three months of operations of the VapoSteam business,
which was acquired on March 31, 2015. Core business net sales
revenue increased $34.9 million, or 10.9%. Foreign currency
fluctuations negatively impacted consolidated U.S. Dollar reported
net sales revenue by $8.6 million, or 2.7%, year-over-year.
- Gross profit margin decreased 1.7
percentage points to 40.1% compared to 41.8% for the same period
last year. The decrease in consolidated gross profit margin is
primarily due to the unfavorable impact of foreign currency
fluctuations and a lower margin product and channel sales mix,
partially offset by the favorable incremental impact of the
Nutritional Supplements segment.
- SG&A was 31.3% of net sales
compared to 34.1% of net sales for the same period last year. The
decrease is primarily due to operating leverage on higher net sales
revenue, partially offset by a higher relative SG&A ratio in
the Nutritional Supplements segment, higher compensation expense
and investments in advertising, marketing and product
development.
- Operating income was $32.4 million
compared to $24.6 million for the same period last year.
- Income tax expense as a percentage of
pretax income was 18.2% compared to 9.0% 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 and the comparative impact of a tax
benefit of $2.1 million recorded in the same period last year
related to the resolution of an uncertain tax position with a
foreign tax authority.
- Net income was $24.5 million, or $0.84
per diluted share on 29.0 million weighted average diluted shares
outstanding. This compares to net income in the second quarter of
fiscal year 2015 of $18.8 million, or $0.65 per diluted share on
28.8 million weighted average diluted shares outstanding.
- Adjusted EBITDA (EBITDA excluding
non-cash asset impairment charges, acquisition-related expenses,
and non-cash share-based compensation, as applicable) was $45.1
million compared to $40.2 million in the same period last
year.
On an adjusted basis for the second quarter of fiscal years 2016
and 2015, excluding non-cash amortization of intangible assets,
acquisition-related expenses, and non‐cash share based
compensation, as applicable:
- Adjusted operating income was $41.5
million compared to $36.4 million for the second quarter of fiscal
year 2015.
- Adjusted income was $32.3 million, or
$1.12 per diluted share, compared to $28.5 million, or $0.99 per
diluted share, for the second quarter of fiscal year 2015.
First Six Months of Fiscal Year 2016
Consolidated Operating Results
- Net sales revenue increased 13.1% to
$714.5 million compared to $631.7 million in the first six months
of fiscal year 2015. Net sales revenue includes four additional
months of Nutritional Supplements results compared to the same
period last year and five months of results from the VapoSteam
business, which was acquired on March 31, 2015. Core business net
sales revenue increased $28.4 million, or 4.5%. Foreign currency
fluctuations negatively impacted consolidated U.S. Dollar reported
net sales revenue by $16.4 million, or 2.6%, year-over-year.
- Gross profit margin increased 0.7
percentage points to 40.8% compared to 40.1% for the same period
last year. The increase in consolidated gross profit margin is
primarily due to the favorable incremental impact of the
Nutritional Supplements segment, partially offset by the
unfavorable impact of foreign currency fluctuations and a lower
margin product and channel sales mix.
- SG&A was 32.1% of net sales
compared to 31.1% of net sales for the same period last year. The
addition of the Nutritional Supplements and VapoSteam acquisitions
increased the SG&A ratio by 1.0 percentage point in the first
six months of the fiscal year 2016 compared to the prior year
period.
- Operating income was $59.0 million
compared to $47.7 million for the same period last year. Operating
income for the first six months of fiscal year 2016 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 16.4% compared to 12.9% 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 and the comparative impact of a tax
benefit of $2.1 million recorded in the same period last year
related to the resolution of an uncertain tax position with a
foreign tax authority.
- Net income was $44.9 million, or $1.54
per diluted share on 29.0 million weighted average diluted shares
outstanding. This compares to net income in the first six months of
fiscal year 2015 of $35.2 million, or $1.21 per diluted share on
29.2 million weighted average diluted shares outstanding. Net
income for the first six months of fiscal year 2016 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, acquisition-related expenses,
and non-cash share-based compensation, as applicable) was $87.2
million compared to $82.2 million in the same period last
year.
On an adjusted basis for the first six months of fiscal years
2016 and 2015, excluding non-cash asset impairment charges,
non-cash amortization of intangible assets, acquisition-related
expenses, and non‐cash share based compensation, as applicable:
- Adjusted operating income was $79.9
million compared to $75.1 million for the first six months of
fiscal year 2015.
- Adjusted income was $63.0 million, or
$2.17 per diluted share, compared to $59.3 million, or $2.03 per
diluted share, for the first six months of fiscal year 2015.
Balance Sheet Highlights
- Cash and cash equivalents totaled $19.4
million at August 31, 2015, compared to $24.7 million at August 31,
2014.
- Total short- and long-term debt
decreased to $479.3 million at August 31, 2015, compared to $604.6
million at August 31, 2014, a net reduction of $125.3 million after
making the VapoSteam acquisition for $42.8 million in March 2015
and share repurchases of $50.0 million in August 2015.
- Accounts receivable turnover was 55.7
days at August 31, 2015, compared to 63.8 days at August 31,
2014.
- Inventory was $348.5 million at August
31, 2015, compared to $351.8 million at August 31, 2014.
Share Repurchases
During the fiscal quarter ended August 31, 2015, the Company
repurchased 556,591 shares of outstanding common stock on the open
market at a total cost of $50.0 million, primarily funded with
borrowings under its revolving credit facility.
Fiscal Year 2016 Annual
Outlook
For fiscal year 2016, the Company now expects consolidated net
sales revenue in the range of $1.500 to $1.536 billion and diluted
EPS (GAAP) in the range of $4.43 to $4.73. The Company now expects
consolidated adjusted diluted EPS (non-GAAP) to be in the range of
$5.50 to $5.85, which excludes after-tax non-cash asset impairment
charges, 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. The
diluted EPS outlook is based on an estimated weighted average
shares outstanding of 28.8 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 further 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
benefited 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, October 8, 2015. Institutional
investors and analysts interested in participating in the call are
invited to dial (888) 471-3843 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 October 8, 2015 until 11:59
p.m. Eastern Time on October 15, 2015 and can be accessed by
dialing (877) 870-5176 and entering replay pin number 311918. 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.
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Consolidated Condensed Statements of
Income and Reconciliation of Non-GAAP Financial Measures –
Adjusted Operating Income, Adjusted
Income and Adjusted Diluted Earnings per Share ("EPS") (1)
(Unaudited)
(in thousands, except per share
data)
Three Months Ended August 31,
2015 2014 As Reported (GAAP)
Adjustments Adjusted
(non-GAAP)
As Reported (GAAP) Adjustments Adjusted
(non-GAAP)
Sales revenue, net $ 369,129 100.0 % $ - $ 369,129 100.0 % $
319,949 100.0 % $ - $ 319,949 100.0 % Cost of goods sold
221,124 59.9 % - 221,124
59.9 % 186,205 58.2 % -
186,205 58.2 % Gross profit 148,005 40.1 % -
148,005 40.1 % 133,744 41.8 % - 133,744 41.8 % Selling,
general, and administrative expense 115,573 31.3 % (1,877 ) (2 )
106,488 28.8 % 109,141 34.1 % (1,917 ) (2 ) 97,298 30.4 % (7,208 )
(3 ) (6,315 ) (3 ) - (3,611 ) (4 ) Asset impairment charges
- - % - - - %
- - % - - -
% Operating income 32,432 8.8 % 9,085
41,517 11.2 % 24,603 7.7
% 11,843 36,446 11.4 %
Nonoperating income (expense), net (46 ) - % - (46 ) - % 97
- % - 97 - % Interest expense (2,503 ) (0.7 ) % -
(2,503 ) (0.7 ) % (3,998 ) (1.2 ) % -
(3,998 ) (1.2 ) % Total other expense (2,549 )
(0.7 ) % - (2,549 ) (0.7 ) % (3,901 )
(1.2 ) % - (3,901 ) (1.2 ) % Income before
income taxes 29,883 8.1 % 9,085 38,968 10.6 % 20,702 6.5 % 11,843
32,545 10.2 % Income tax expense 5,431 1.5
% 1,204 (6 ) 6,635 1.8 %
1,863 0.6 % 2,134 (6 )
3,997 1.2 % Net income $ 24,452 6.6 % $
7,881 $ 32,333 8.8 % $ 18,839 5.9
% $ 9,709 $ 28,548 8.9 % Diluted
EPS $ 0.84 $ 0.28 $ 1.12 $ 0.65 $ 0.34 $ 0.99 Weighted
average shares of common stock used in computing diluted EPS 28,986
- 28,986 28,769 - 28,769
Six Months Ended August
31, 2015 2014 As Reported (GAAP)
Adjustments Adjusted
(non-GAAP)
As Reported (GAAP) Adjustments Adjusted
(non-GAAP)
Sales revenue, net $ 714,474 100.0 % $ - $ 714,474 100.0 % $
631,727 100.0 % $ - $ 631,727 100.0 % Cost of goods sold
423,150 59.2 % - 423,150
59.2 % 378,463 59.9 % -
378,463 59.9 % Gross profit 291,324 40.8 % -
291,324 40.8 % 253,264 40.1 % - 253,264 40.1 % Selling,
general, and administrative expense 229,349 32.1 % (3,938 ) (2 )
211,389 29.6 % 196,538 31.1 % (3,212 ) (2 ) 178,141 28.2 % (14,022
) (3 ) (11,574 ) (3 ) - (3,611 ) (4 ) Asset impairment charges
3,000 0.4 % (3,000 ) (5 ) -
- % 9,000 1.4 %
(9,000 ) (5 ) - - % Operating income
58,975 8.3 % 20,960 79,935
11.2 % 47,726 7.6 %
27,397 75,123 11.9 %
Nonoperating income, net 91 - % - 91 - % 147 - % - 147 - % Interest
expense (5,394 ) (0.8 ) % - (5,394 )
(0.8 ) % (7,415 ) (1.2 ) % -
(7,415 ) (1.2 ) % Total other expense (5,303 ) (0.7 ) %
- (5,303 ) (0.7 ) % (7,268 )
(1.2 ) % - (7,268 ) (1.2 ) % Income before
income taxes 53,672 7.5 % 20,960 74,632 10.4 % 40,458 6.4 % 27,397
67,855 10.7 % Income tax expense 8,810 1.2
% 2,787 (6 ) 11,597 1.6 %
5,221 0.8 % 3,323 (6 )
8,544 1.4 % Net income $ 44,862 6.3
% $ 18,173 $ 63,035 8.8 % $ 35,237
5.6 % $ 24,074 $ 59,311 9.4 %
Diluted EPS $ 1.54 $ 0.63 $ 2.17 $ 1.21 $ 0.82 $ 2.03
Weighted average shares of common stock used in computing diluted
EPS 29,037 - 29,037 29,192 - 29,192
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Net Sales Revenue by Segment
(7)
(Unaudited)
(in thousands)
Three Months
Ended August 31, % of Sales Revenue, net 2015
2014 $ Change % Change 2015 2014
Sales revenue by segment, net Housewares $ 78,848 $ 69,637 $ 9,211
13.2 % 21.4 % 21.8 % Healthcare / Home Environment 143,254 126,218
17,036 13.5 % 38.8 % 39.4 % Nutritional Supplements 38,048 24,634
13,414 54.5 % 10.3 % 7.7 % Beauty 108,979
99,460 9,519 9.6 % 29.5 % 31.1 % Total sales
revenue, net $ 369,129 $ 319,949 $ 49,180 15.4 % 100.0 % 100.0 %
Six Months Ended August 31, % of Sales
Revenue, net 2015 2014 $ Change %
Change 2015 2014 Sales revenue by segment, net
Housewares $ 144,034 $ 136,393 $ 7,641 5.6 % 20.2 % 21.6 %
Healthcare / Home Environment 286,296 268,707 17,589 6.5 % 40.1 %
42.5 % Nutritional Supplements 77,488 24,634 52,854 * 10.8 % 3.9 %
Beauty 206,656 201,993 4,663 2.3 % 28.9 % 32.0
% Total sales revenue, net $ 714,474 $ 631,727 $ 82,747 13.1 %
100.0 % 100.0 %
______________________________________
* Calculation is not meaningful or
comparable
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Selected Consolidated Balance Sheet,
Cash Flow and Liquidity Information
(Unaudited)
(in thousands)
August 31, 2015 2014 Balance
Sheet: Cash and cash equivalents $ 19,405 $ 24,726 Receivables, net
227,147 217,066 Inventory, net 348,463 351,823 Total assets,
current 633,929 635,081 Total assets 1,746,986 1,740,985 Total
liabilities, current 311,066 769,021 Total long-term liabilities
524,654 170,154 Total debt 479,307 604,607 Stockholders' equity
911,266 801,810 Cash Flow: Depreciation and amortization $
21,227 $ 18,493 Net cash provided by operating activities 51,618
17,995 Capital and intangible asset expenditures 5,946 3,688
Payments to acquire businesses, net of cash received 42,750 195,943
Net amounts borrowed 46,100 412,000 Liquidity: Working
Capital $ 322,863 $ (133,940 )
SELECTED OTHER DATA
Reconciliation of Non-GAAP Financial
Measures - EBITDA(Earnings Before Interest, Taxes, Depreciation and
Amortization) and Adjusted EBITDA (1)
(Unaudited)
(in thousands)
Three Months Ended August 31,
Six Months Ended August 31, 2015 2014
2015 2014 Net income $ 24,452 $ 18,839 $ 44,862 $
35,237 Interest expense, net 2,495 3,986 5,368 7,382
Income tax expense 5,431 1,863 8,810 5,221 Depreciation and
amortization, excluding amortized interest 10,873
9,993 21,227 18,493 EBITDA (Earnings before
interest, taxes, depreciation and amortization) $ 43,251 $ 34,681 $
80,267 $ 66,333 Adjusted EBITDA: EBITDA, as
calculated above $ 43,251 $ 34,681 $ 80,267 $ 66,333
Non-cash share-based compensation (2) 1,877 1,917 3,938 3,212
Acquisition-related expenses (4) - 3,611 - 3,611
Non-cash asset impairment charges (5) - -
3,000 9,000 Adjusted EBITDA $ 45,128 $ 40,209 $
87,205 $ 82,156
SELECTED OTHER DATA
Reconciliation of Non-GAAP Financial
Measures - EBITDA
(Earnings Before Interest, Taxes,
Depreciation and Amortization) and Adjusted EBITDA by Segment (1)
(7)
(Unaudited)
(in thousands)
Three Months Ended August 31, 2015 Housewares
Healthcare /Home
Environment
NutritionalSupplements
Beauty Total Operating Income $ 15,142
$ 4,808 $ 2,969 $ 9,513 $ 32,432 Depreciation and
amortization, excluding amortized interest 1,075 5,514 1,965 2,319
10,873 Other income / (expense) - - -
(54 ) (54 ) EBITDA (Earnings before interest,
taxes, depreciation and amortization) $ 16,217 $ 10,322 $ 4,934 $
11,778 $ 43,251 Adjusted EBITDA:
EBITDA, as calculated above $ 16,217 $ 10,322 $ 4,934 $ 11,778 $
43,251 Add: Non-cash share-based compensation (2) 325 533
273 746 1,877 Acquisition-related expenses (4) - - - - -
Non-cash asset impairment charges (5) - -
- - - Adjusted EBITDA $
16,542 $ 10,855 $ 5,207 $ 12,524 $ 45,128
Three Months Ended August 31, 2014 Housewares
Healthcare /Home
Environment
NutritionalSupplements
Beauty Total Operating Income $ 13,891 $ 4,508 $ 110
$ 6,094 $ 24,603 Depreciation and amortization, excluding
amortized interest 889 5,027 1,359 2,718 9,993 Other income
/ (expense) - - - 85 85
EBITDA (Earnings before interest, taxes, depreciation
and amortization) $ 14,780 $ 9,535 $ 1,469 $ 8,897 $ 34,681
Adjusted EBITDA: EBITDA, as calculated above $
14,780 $ 9,535 $ 1,469 $ 8,897 $ 34,681 Add: Non-cash
share-based compensation (2) 260 81 - 1,576 1,917
Acquisition-related expenses (4) - - 3,611 - 3,611 Non-cash
asset impairment charges (5) - - - -
- Adjusted EBITDA $ 15,040 $ 9,616 $
5,080 $ 10,473 $ 40,209
SELECTED OTHER DATA
Reconciliation of Non-GAAP Financial
Measures - EBITDA
(Earnings Before Interest, Taxes,
Depreciation and Amortization) and Adjusted EBITDA by Segment (1)
(7)
(Unaudited)
(in thousands)
Six Months Ended August 31, 2015 Housewares
Healthcare /Home
Environment
NutritionalSupplements
Beauty Total Operating income $ 26,325
$ 13,226 $ 5,589 $ 13,835 $ 58,975 Depreciation and
amortization, excluding amortized interest 2,083 10,577 3,933 4,634
21,227 Other income / (expense) - - -
65 65 EBITDA (Earnings before interest, taxes,
depreciation and amortization) $ 28,408 $ 23,803 $ 9,522 $ 18,534 $
80,267 Adjusted EBITDA: EBITDA, as calculated above $
28,408 $ 23,803 $ 9,522 $ 18,534 $ 80,267 Add: Non-cash
share-based compensation (2) 631 1,128 576 1,603 3,938
Acquisition-related expenses (4) - - - - - Non-cash asset
impairment charges (5) - - - 3,000
3,000 Adjusted EBITDA $ 29,039 $ 24,931 $ 10,098 $
23,137 $ 87,205
Six Months Ended August 31,
2014 Housewares
Healthcare /Home
Environment
NutritionalSupplements
Beauty Total Operating income $ 26,926 $ 13,225 $ 110
$ 7,465 $ 47,726 Depreciation and amortization, excluding
amortized interest 1,777 10,259 1,359 5,098 18,493 Other
income / (expense) - - - 114 114
EBITDA (Earnings before interest, taxes, depreciation and
amortization) $ 28,703 $ 23,484 $ 1,469 $ 12,677 $ 66,333
Adjusted EBITDA: EBITDA, as calculated above $ 28,703 $
23,484 $ 1,469 $ 12,677 $ 66,333 Add: Non-cash share-based
compensation (2) 534 662 - 2,016 3,212 Acquisition-related
expenses (4) - - 3,611 - 3,611 Non-cash asset impairment
charges (5) - - - 9,000 9,000
Adjusted EBITDA $ 29,237 $ 24,146 $ 5,080 $ 23,693 $ 82,156
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Reconciliation of GAAP Net Income and
Earnings Per Share (EPS) to Adjusted Income and Adjusted EPS
(non-GAAP) (1) (7)
(dollars in thousands, except per share
data)
(Unaudited)
Three Months Ended
August 31, Basic EPS Diluted EPS 2015
2014 2015 2014 2015 2014 Net
income as reported (GAAP) $ 24,452 $ 18,839 $ 0.86 $ 0.66 $ 0.84 $
0.65 Acquisition-related expenses, net of tax (4) -
2,306 - 0.08 - 0.08 Subtotal 24,452
21,145 0.86 0.75 0.84 0.73 Non-cash share-based compensation, net
of tax (2) 1,603 1,671 0.06 0.06 0.06 0.06 Amortization of
intangible assets, net of tax (3) 6,278 5,732
0.22 0.20 0.22 0.20 Adjusted income (non-GAAP)
$ 32,333 $ 28,548 $ 1.14 $ 1.00 $ 1.12 $ 0.99 Weighted
average shares of common stock used in computing basic and diluted
earnings per share (GAAP) 28,435 28,372 28,986
28,769
Six Months Ended August 31, Basic
EPS Diluted EPS 2015 2014 2015
2014 2015 2014 Net income as reported (GAAP) $
44,862 $ 35,237 $ 1.58 $ 1.23 $ 1.54 $ 1.21 Acquisition-related
expenses, net of tax (4) - 2,306 - 0.08 - 0.08 Asset impairment
charges, net of tax (5) 2,656 8,155 0.09
0.28 0.09 0.28 Subtotal 47,518 45,698 1.67
1.59 1.64 1.57 Non-cash share-based compensation, net of tax (2)
3,345 2,839 0.12 0.10 0.12 0.10 Amortization of intangible assets,
net of tax (3) 12,172 10,774 0.43 0.37
0.42 0.37 Adjusted income (non-GAAP) $ 63,035 $
59,311 $ 2.21 $ 2.06 $ 2.17 $ 2.03 Weighted average shares
of common stock used in computing basic and diluted earnings per
share (non-GAAP) 28,478 28,738 29,037
29,192
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) (1)
(8)
(Unaudited)
Fiscal Year Ended February 29, 2016
Period EndedAugust 31, 2015 (Six
Months)
Outlook for theBalance of the
Fiscal Year (Six Months)
Outlook for theFiscal Year
(Twelve Months)
Diluted EPS, as reported (GAAP) $ 1.54 $ 2.80 - $ 3.10 4.34 - $
4.64 Asset impairment charges, net of tax (5) 0.09 -
- - 0.09 - 0.09 Subtotal 1.63 2.80 - 3.10 4.43
- 4.73 Non-cash share-based compensation, net of tax (2) 0.12 0.13
- 0.16 0.25 - 0.28 Amortization of intangible assets, net of tax
(3) 0.42 0.40 - 0.42 0.82 - 0.84
Adjusted diluted EPS (non-GAAP) $ 2.17 $ 3.33 - $ 3.68 $ 5.50 - $
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 for the three months ended
August 31, 2015 and 2014 consist of non-cash share-based
compensation expense of $1.88 million ($1.60 million after tax) and
$1.92 million ($1.67 million after tax), respectively. Adjustments
for the six months ended August 31, 2015 and 2014 consist
of non-cash share-based compensation expense of $3.94 million
($3.35 million after tax) and $3.21 million ($2.84 million after
tax), respectively. Share-based compensation expense is recognized
for share-based awards outstanding under share-based compensation
plans.
(3)
Adjustments for the three months ended
August 31, 2015 and 2014 consist of non-cash intangible
asset amortization expense of $7.21 million ($6.28 million after
tax) and $6.32 million ($5.73 million after tax), respectively.
Adjustments for the six months ended August 31, 2015 and
2014 consist of non-cash intangible asset amortization expense of
$14.02 million ($12.17 million after tax) and $11.57 million
($10.77 million after tax), respectively.
(4)
Adjustment consists of expenses of $3.61
million ($2.31 million after tax) incurred in connection with the
Healthy Directions acquisition in the second quarter of fiscal year
2015.
(5)
Adjustments for the six months ended
August 31, 2015 and 2014 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 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.
(6)
Total tax effects of adjustments described
in Notes 2 through 5, for each of the periods presented:
Three Months Ended August 31,
Six Months Ended August 31, 2015 2014
2015 2014 Tax Effects of
Adjustments Non-cash share-based compensation (2) $ (274
) $ (246 ) $ (593 ) $ (373 ) Amortization of intangible assets (3)
(930 ) (583 ) (1,850 ) (800 ) Acquisition-related expenses (4) -
(1,305 ) - (1,305 ) Asset impairment charges (5) -
- (344 ) (845 ) Total $ (1,204 ) $
(2,134 ) $ (2,787 ) $ (3,323 ) (7) Healthy Directions was
acquired on June 30, 2014 and its operations are reported under the
Nutritional Supplements segment. Results reported include three-
and two- months respectively, and six- and two-months, respectively
for the fiscal quarter and year-to-date periods ended August 31,
2015 and 2014. The VapoSteam business was acquired on March
31, 2015 and its operations are reported under the Healthcare /
Home environment segment. Results reported include three- and five-
months, respectively, for the fiscal quarter and year-to-date
periods ended August 31, 2015. (8) The diluted EPS outlook
is based on an estimated weighted average shares outstanding of
28.8 million for fiscal year 2016.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151008006451/en/
Investor Contact:ICR, Inc.Allison Malkin / Anne
Rakunas203-682-8200 / 310-954-1113
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