GAAP Consolidated Net Sales Growth of 14.9%;
Organic Business Net Sales Growth of 13.4% Diluted Loss Per
Share from Continuing Operations of $0.13; Includes Impairment of
$1.43 Adjusted Diluted Earnings per Share from Continuing
Operations Growth of 3.3% to $1.88 Fiscal 2020 Consolidated
Net Sales Growth of 9.2% Fiscal 2020 GAAP Diluted Earnings
per Share from Continuing Operations of $6.02 Fiscal 2020
Adjusted Diluted EPS from Continuing Operations Growth of 15.4% to
$9.30 Fiscal 2020 Free Cash Flow Growth of 45.6%
Designates Mass Market Personal Care Business as Held for
Sale Defers Initiation of Fiscal 2021 Outlook Due to
Uncertainty from COVID-19 Pandemic
Helen of Troy Limited (NASDAQ: HELE), designer, developer
and worldwide marketer of consumer brand-name housewares, health
and home, and beauty products, today reported results for the
three-month period ended February 29, 2020.
Consistent with its strategy of focusing its resources on its
Leadership Brands, during the fourth quarter of fiscal 2020, the
Company committed to a plan to divest certain assets within its
mass market personal care business (Personal Care) and recorded an
after-tax non-cash asset impairment charge of $36.4 million related
to its goodwill and intangible assets. The assets to be divested
include intangible assets, inventory and fixed assets related to
the Company's mass channel liquids, powder and aerosol products
under brands such as Pert, Brut, Sure and Infusium. The Company
expects the divestiture to occur within fiscal 2021. Accordingly,
the Company has classified the identified assets of the disposal
group as held for sale.
In conjunction with this change, the Company now defines Core as
strategic business that it expects to be an ongoing part of its
operations, and Non-Core as business that it expects to divest
within a year of its designation as Non-Core. Previously referred
to as Core business, Organic business now refers to net sales
revenue associated with product lines or brands after the first
twelve months from the date the product line or brand is acquired,
excluding the impact that foreign currency re-measurement had on
reported net sales.
Executive Summary – Fourth Quarter of
Fiscal 2020
- Consolidated net sales revenue increase of 14.9%, including:
- An increase in Leadership Brand net sales of 15.7%
- An increase in online channel net sales of approximately
39%
- Organic business growth of 13.4%
- Core business growth of 16.0%
- GAAP operating loss of $2.7 million, or 0.6% of net sales,
which includes non-cash asset impairment charges of $41.0 million,
acquisition-related expenses of $1.1 million and restructuring
charges of $2.3 million, compared to GAAP operating income of $44.1
million, or 11.5% of net sales, for the same period last year,
which included restructuring charges of $1.0 million
- Non-GAAP adjusted operating income increase of 0.8% to $53.9
million, or 12.2% of net sales, compared to $53.5 million, or 13.9%
of net sales, for the same period last year
- GAAP diluted loss per share from continuing operations of
$0.13, which includes acquisition-related expenses of $0.04 per
share, non-cash asset impairment charges of $1.43 per share, and
restructuring charges of $0.08 per share, compared to GAAP diluted
earnings per share ("EPS") of $1.47 for the same period last year,
which included restructuring charges of $0.04 per share
- Non-GAAP adjusted diluted EPS from continuing operations
increase of 3.3% to $1.88, compared to $1.82 for the same period
last year
Executive Summary - Fiscal
2020
- Consolidated net sales revenue increase of 9.2% including:
- An increase in Leadership Brand net sales of 9.4%
- An increase in online channel net sales of approximately
34%
- Organic business growth of 9.2%
- Core business growth of 9.9%
- GAAP operating income of $178.3 million, or 10.4% of net sales,
which includes non-cash asset impairment charges of $41.0 million,
acquisition-related expenses of $2.5 million, and restructuring
charges of $3.3 million compared to GAAP operating income of $199.4
million, or 12.7% of net sales, for the same period last year,
which included restructuring charges of $3.6 million
- Non-GAAP adjusted operating income increase of 12.6% to $269.3
million, or 15.8% of net sales, compared to $239.2 million, or
15.3% of net sales, for the same period last year
- GAAP diluted EPS from continuing operations of $6.02, which
includes acquisition-related expenses of $0.10 per share, non-cash
asset impairment charges of $1.44 per share, and restructuring
charges of $0.12 per share compared to GAAP diluted EPS of $6.62
for the same period last year, which included restructuring charges
of $0.13 per share
- Non-GAAP adjusted diluted EPS from continuing operations growth
of 15.4% to $9.30 compared to $8.06
- Net cash provided by operating activities from continuing
operations growth of 35.3% to $271.3 million, compared to $200.6
million
- Free cash flow growth of 45.6% to $253.5 million, compared to
$174.2 million
Julien R. Mininberg, Chief Executive Officer, stated: “The
fourth quarter was extremely strong, capping the best year in Helen
of Troy’s history by almost any measure. For the quarter, we
delivered net sales growth of 14.9%. Our Leadership Brands led the
way, growing 15.7%, and we continued to make major gains online,
growing that channel 39% to now represent 24% of total sales. All
three of our business segments grew double digit in the quarter and
we leaned into our flywheel with key new product, marketing and
sustainability programs. On an adjusted basis, EPS for the quarter
grew 3.3% against a strong year-ago comparison. For the full fiscal
year 2020 net sales grew 9.2%, adjusted EPS grew 15.4%, adjusted
operating margin expanded by 50 basis points, and we increased our
free cash flow significantly. We are delighted by the acceleration
of our flywheel in fiscal year 2020 on top of the strength posted
in fiscal 2019 and 2018 and the outstanding first year of Phase II
of Helen of Troy’s Transformation.”
“Our heartfelt thoughts are with people around the globe as the
COVID-19 pandemic has quickly reshaped nearly every aspect of life.
As COVID-19 spread, Helen of Troy moved quickly and decisively to
help ensure the safety and health of our associates around the
world, and the communities where we operate. We were equally
decisive on actions to help improve liquidity and reduce the impact
on cash flow. Even amidst the crisis, we remain focused on our
strategic plans and the long-term interests of our shareholders.
With the resumption of more normalized retail, consumer, and
economic activity unknown, we are now holding cash and cash
equivalents of close to $400 million and have taken difficult but
necessary steps to temporarily reduce our personnel costs and
discretionary spending. We believe acting now, and with an approach
of shared sacrifice, best serves our goal to mitigate a portion of
the business impact of the coronavirus while preserving the
high-performance organization, systems, and brands we have worked
so hard to build and maintain. I could not be prouder of how our
global teams have adapted in order to maintain the health of our
business and support our consumers and customers, while also taking
care of themselves and their families.”
Mr. Mininberg concluded: “As we look to the future, we are
seeing positive sales trends in key Helen of Troy brands after the
initial shock of lock down in early March. Our Braun, Vicks, PUR
and Honeywell products are supporting consumer health at a time of
extreme need, and our OXO products are providing convenience,
comfort and solutions as families spend unprecedented amounts of
time at home. We are working around the clock to meet as much of
the ongoing demand for thermometers, humidifiers, air purifiers and
water purifiers as possible. We are also working with suppliers and
retailers to provide consumers with OXO kitchen, cleaning and
storage products, as well as volumizers in Beauty, where demand is
high in channels that are open. While encouraging, we do expect to
see a net adverse impact to our results for the first quarter and
full year fiscal 2021. Although still very early, we are making
plans to continue selectively investing in the key Phase II
initiatives once the economic situation allows. With our
diversified portfolio of leading, trusted brands, a strong balance
sheet with low net leverage, and a corporate culture driven to rise
to the challenge, we believe Helen of Troy is well positioned to
navigate the current unprecedented situation and emerge
strong.”
Three Months Ended Last Day of
February,
Housewares
Health & Home
Beauty
Total
Fiscal 2019 sales revenue, net
$
126,069
$
168,140
$
90,634
$
384,843
Organic business (10)
18,911
18,183
14,591
51,685
Impact of foreign currency
(32
)
(469
)
299
(202
)
Acquisition (8)
—
—
6,039
6,039
Change in sales revenue, net
18,879
17,714
20,929
57,522
Fiscal 2020 sales revenue, net
$
144,948
$
185,854
$
111,563
$
442,365
Total net sales revenue growth
15.0
%
10.5
%
23.1
%
14.9
%
Organic business
15.0
%
10.8
%
16.1
%
13.4
%
Impact of foreign currency
—
%
(0.3
)%
0.3
%
(0.1
)%
Acquisition
—
%
—
%
6.7
%
1.6
%
Operating margin (GAAP)
Fiscal 2020
9.6
%
8.8
%
(29.6
)%
(0.6
)%
Fiscal 2019
16.2
%
9.5
%
8.6
%
11.5
%
Adjusted operating margin (non-GAAP)
Fiscal 2020
11.8
%
11.2
%
14.4
%
12.2
%
Fiscal 2019
18.1
%
12.6
%
10.4
%
13.9
%
Three Months Ended Last Day of
February,
Housewares
Health & Home
Beauty
Total
Fiscal 2019 sales revenue, net
$
126,069
$
168,140
$
90,634
$
384,843
Core business (8)
18,879
17,714
24,792
61,385
Non-core business (Personal Care)
—
—
(3,863
)
(3,863
)
Change in sales revenue, net
18,879
17,714
20,929
57,522
Fiscal 2020 sales revenue, net
$
144,948
$
185,854
$
111,563
$
442,365
Total net sales revenue growth
15.0
%
10.5
%
23.1
%
14.9
%
Core business
15.0
%
10.5
%
27.4
%
16.0
%
Non-core business (Personal Care)
—
%
—
%
(4.3
)%
(1.0
)%
Consolidated Operating Results - Fourth
Quarter Fiscal 2020 Compared to Fourth Quarter Fiscal
2019
- Consolidated net sales revenue increased 14.9% to $442.4
million compared to $384.8 million, driven by an Organic business
increase of $51.7 million, or 13.4%, and growth from the
acquisition of Drybar Products of $6.0 million, or 1.6%. The
Organic business increase primarily reflects growth in both online
and brick and mortar appliance sales in the Beauty segment, higher
sales across core channels in the Housewares segment, and increased
demand driven growth in the Health & Home segment, particularly
in thermometry, related to higher pediatric fever and the impact of
COVID-19 late in the quarter. These factors were partially offset
by a decline in Non-Core business (Personal Care) sales within the
Beauty segment.
- Consolidated gross profit margin increased 2.6 percentage
points to 43.5%, compared to 40.9%. The increase is primarily due
to a more favorable product mix within all three business segments
and a lower mix of shipments made on a direct import basis. These
factors were partially offset by a lower mix of Personal Care sales
in the Beauty segment.
- Consolidated SG&A as a percentage of sales increased by 5.2
percentage points to 34.4% of net sales compared to 29.2%. The
increase is primarily due to higher advertising and new product
development expense, higher royalty expense, an increase in
amortization expense, and higher performance-based annual incentive
compensation expense. These factors were partially offset by lower
share-based compensation expense.
- Consolidated operating loss was $2.7 million, or 0.6% of net
sales, compared to operating income of $44.1 million, or 11.5% of
net sales. The decline in consolidated operating margin is
primarily due to $41.0 million of non-cash asset impairment
charges, higher advertising and new product development expense,
acquisition-related expenses, higher restructuring charges, higher
royalty expense, an increase in amortization expense, and higher
performance-based annual incentive compensation expense. These
factors were partially offset by a more favorable product mix,
lower share-based compensation expense, and increased operating
leverage from sales growth.
- Income tax benefit as a percentage of pre-tax loss was 48.1%,
compared to income tax expense as a percentage of pre-tax income of
7.9% for the same period last year. The year-over-year change is
primarily due to the recognition of a tax benefit from impairment
charges recorded in the fourth quarter of fiscal 2020.
- Loss from continuing operations was $3.2 million, or $0.13 per
diluted share, compared to income from continuing operations of
$37.7 million, or $1.47 per diluted share. Fiscal 2020 includes
after-tax non-cash asset impairment charges, restructuring charges,
and acquisition-related expenses totaling $1.55 per share, compared
to a total of $0.04 per share in after-tax restructuring charges in
the same period last year.
- There was no income or loss from discontinued operations,
compared to a loss of $0.4 million, or $0.02 per diluted share, for
the same period last year.
- Adjusted EBITDA increased 1.2% to $58.4 million compared to
$57.7 million.
On an adjusted basis for the fourth quarters of fiscal 2020 and
2019, excluding asset impairment charges, acquisition-related
expenses, restructuring charges, amortization of intangible assets,
and non-cash share-based compensation, as applicable:
- Adjusted operating income increased $0.4 million, or 0.8%, to
$53.9 million, or 12.2% of net sales, compared to $53.5 million, or
13.9% of net sales. The 1.7 percentage point decrease in adjusted
operating margin primarily reflects higher advertising and new
product development expense, higher performance-based annual
incentive compensation expense, and an increase in royalty expense.
These factors were partially offset by a more favorable product mix
and increased operating leverage from sales growth.
- Adjusted income from continuing operations increased $1.3
million, or 2.7%, to $47.8 million, or $1.88 per diluted share,
compared to $46.6 million, or $1.82 per diluted share. The 3.3%
increase in adjusted diluted EPS from continuing operations was
primarily due to higher adjusted operating income and the impact of
lower weighted average diluted shares outstanding, partially offset
by higher interest expense.
Segment Operating Results - Fourth
Quarter Fiscal 2020 Compared to Fourth Quarter Fiscal
2019
Housewares net sales increased 15.0%, or $18.9 million,
primarily due to point of sale growth with existing domestic brick
and mortar customers, an increase in online sales, and revenue from
new product introductions. These factors were partially offset by
lower club channel sales, a decline in international sales, and
lower closeout channel sales. Operating income decreased 31.5% to
$14.0 million, or 9.6% of segment net sales, compared to $20.4
million, or 16.2% of segment net sales in the same period last
year. The 6.6 percentage point decrease was primarily due to higher
advertising and new product development expense to support
strategic initiatives, higher freight and distribution expense to
support increased retail customer shipments, and higher
restructuring charges. These factors were partially offset by the
impact of a more favorable product mix and increased operating
leverage from sales growth. Adjusted operating income decreased
24.8% to $17.1 million, or 11.8% of segment net sales, compared to
$22.8 million, or 18.1% of segment net sales.
Health & Home net sales increased 10.5%, primarily due to
new product introductions and increased demand, particularly in
thermometry, related to higher pediatric fever and the impact of
COVID-19 toward the end of the fourth quarter. These factors were
partially offset by lower sales due to net distribution changes
year-over-year and the unfavorable impact of net foreign currency
fluctuations of $0.5 million, or 0.3%. Operating income increased
2.4% to $16.3 million, or 8.8% of segment net sales, compared to
$15.9 million, or 9.5% of segment net sales, in the same period
last year. The 0.7 percentage point decrease in operating margin
was primarily due to higher royalty expense and higher new product
development expense. These factors were partially offset by the
margin impact of a more favorable product mix and increased
operating leverage from sales growth. Adjusted operating income
decreased 2.3% to $20.8 million, or 11.2% of segment net sales,
compared to $21.2 million, or 12.6% of segment net sales in the
same period last year.
Beauty net sales increased 23.1%, or $20.9 million, primarily
due to an Organic business increase of 16.1% and 6.7% of growth
from the acquisition of Drybar Products. The Organic business
increase primarily reflects growth in both online and brick and
mortar channel sales in the appliance category. These factors were
partially offset by a decline in Personal Care. Operating loss was
$33.0 million, or 29.6% of segment net sales compared to operating
income of $7.8 million, or 8.6% of segment net sales, in the same
period last year. The operating loss in the fourth quarter of
fiscal 2020 primarily reflects the impact of non-cash asset
impairment charges of $41.0 million, higher amortization expense,
and an increase in advertising and new product development expense.
These factors were partially offset by the margin impact of a more
favorable product mix, increased operating leverage from sales
growth and lower freight expense. Adjusted operating income
increased 69.5% to $16.0 million, or 14.4% of segment net sales,
compared to $9.4 million, or 10.4% of segment net sales in the same
period last year.
Balance Sheet and Cash Flow Highlights
- Fiscal 2020 Compared to Fiscal 2019
- Cash and cash equivalents totaled $24.5 million, compared to
$11.9 million.
- Total short- and long-term debt was $339.3 million, compared to
$320.8 million, a net increase of $18.5 million.
- Accounts receivable turnover for fiscal 2020 was 67.0 days,
compared to 68.3 days for the same period last year.
- Inventory was $256.3 million, compared to $302.3 million.
Inventory turnover for fiscal 2020 was 3.0 times, compared to 3.3
times for the same period last year.
- Net cash provided by operating activities from continuing
operations for fiscal 2020 increased $70.7 million to $271.3
million. The increase was primarily driven by higher cash earnings,
and a decrease in cash used for inventory. These factors were
partially offset by an increase in cash used for receivables.
Subsequent Events
On March 13, 2020, the President of the United States announced
a National Emergency relating to COVID-19. Since then, there has
been widespread infection in the U.S. and abroad, with the
potential for catastrophic impact. As a result of these and other
effects, the Company expects COVID-19 to adversely impact its
business, which could be material. The impact includes the effect
of temporary closures of, and limited hours of operation and
materially lower store traffic at, customer stores. The COVID-19
pandemic is also impacting its third-party manufacturers, most of
which are located in the Far East, principally China. The extent of
the impact of COVID-19 on the business and financial results will
depend largely on future developments, including the duration of
the spread of the COVID-19 outbreak within the U.S. and globally,
the impact on capital and financial markets and the related impact
on consumer confidence and spending. These future developments are
outside of the Company's control, are highly uncertain and cannot
be predicted. If the impact is prolonged, then it can further
increase the difficulty of planning for operations. These and other
potential impacts of the current public health crisis could
therefore materially and adversely affect the business, financial
condition, cash flows and results of operations.
Due to the impacts of COVID-19, the Company is experiencing
favorable demand trends for some of its products, while others are
being adversely impacted due to retail store closures and consumer
uncertainty. At the end of fiscal 2020, the Company began to
experience increased demand for certain products in the Health
& Home segment, particularly thermometers. This trend continued
into the beginning of fiscal 2021 and became more pronounced in
other product categories such as humidification, water purification
and air purification. Additionally, at the beginning of fiscal
2021, the Company began to experience favorable demand trends for
OXO products within the Housewares segment as consumers engage in
pantry stocking, cleaning, nesting and cooking at home. Products
that are more discretionary in nature or more dependent on the
retail brick and mortar channel are generally experiencing
unfavorable demand trends. All products are being adversely
impacted by the effect of temporary closures of, and limited hours
of operation and materially lower store traffic at, customer
stores. The Company is also experiencing supply chain disruptions
with some third-party manufacturers, which is adversely affecting
its ability to meet consumer demand in product categories where it
is strong. Accordingly, the Company expects that the net effect of
COVID-19 will adversely impact its results for the first quarter of
fiscal 2021, as well as the full fiscal 2021, and that impact could
be material. This situation is changing rapidly, and additional
impacts may arise that we are not currently aware of.
On March 13, 2020, the Company entered into a Third Amendment
and Commitment Increase (the "Amendment") to its Amended and
Restated Credit Agreement (as amended, the "Credit Agreement"). The
Amendment extended the maturity of the commitment under the Credit
Agreement from December 7, 2021 to March 13, 2025. Further, the
Amendment increased the unsecured revolving commitment from $1.0
billion to $1.25 billion.
On March 24, 2020, the Company borrowed approximately $200
million under the Credit Agreement as part of a comprehensive
precautionary approach to increase its cash position and maximize
its financial flexibility in light of the volatility in the global
markets resulting from the COVID-19 outbreak. After giving effect
to the borrowing, the remaining amount available for borrowings
under the Credit Agreement was $536.4 million and the Company's
cash and cash equivalents on hand was approximately $393.0 million.
Covenants in the Company's debt agreements can limit the amount of
indebtedness it can incur. The Company may repay amounts borrowed
at any time without penalty.
Fiscal 2021 Business
Update
Due to the evolving COVID-19 pandemic and the related business
uncertainty, the Company is not providing an Outlook for fiscal
2021 at this time. In order to reduce costs and preserve cash flow,
the Company has implemented a number of measures that will remain
in place until there is greater certainty, a reopening of retail
customer brick and mortar stores and improved consumer demand,
which include the following:
- A graduated salary reduction for all associates, including
named executive officers and the other members of the Company’s
executive leadership team;
- A reduction in the cash compensation of the Company's Board of
Directors;
- Suspension of merit increases, promotions and new associate
hiring until further notice;
- The furlough of associates in specific areas directly tied to
sales volume, with assistance to maintain health insurance
coverage, as well as a reduction of external temporary labor and
reduced work hours;
- Reduction or deferral of marketing expense. The Company will
lean into brands with strong current demand and reduce investment
in other key brands without sacrificing brand awareness;
- Limited reduction of investment in new product development and
launches, in anticipation of more normalized economic
activity;
- Elimination of travel expense in the short term, with a
significant reduction planned for the second half of fiscal 2021;
and
- Reduction of consulting fees and capital expenditures for
projects that are not critical.
Conference Call and
Webcast
The Company will conduct a teleconference in conjunction with
today’s earnings release. The teleconference begins at 4:45 p.m.
Eastern Time today, Tuesday, April 28, 2020. Investors and analysts
interested in participating in the call are invited to dial (877)
407-3982 approximately ten minutes prior to the start of the call.
The conference call will also be webcast live at:
http://investor.helenoftroy.com/. A telephone replay of this call
will be available at 7:45 p.m. Eastern Time on April 28, 2020 until
11:59 p.m. Eastern Time on May 5, 2020 and can be accessed by
dialing (844) 512-2921 and entering replay pin number 13700166. A
replay of the webcast will remain available on the website for one
year.
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 such as adjusted operating income,
adjusted operating margin, adjusted income from continuing
operations, adjusted diluted earnings per share (“EPS”) from
continuing operations, Core and Non-Core adjusted diluted EPS from
continuing operations, EBITDA, adjusted EBITDA, and free cash flow,
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
condensed consolidated statements of income and cash flow. All
references to the Company's continuing operations exclude the
Nutritional Supplements segment. For additional information see
Note 1 to the accompanying tables to this Press Release.
About Helen of Troy
Limited
Helen of Troy Limited (NASDAQ: HELE) 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 OXO, Hydro Flask, Vicks, Braun,
Honeywell, PUR, Hot Tools and Drybar. All trademarks herein belong
to Helen of Troy Limited (or its affiliates) and/or are used under
license from their respective licensors.
For more information about Helen of Troy, please visit
http://investor.helenoftroy.com/
Forward Looking Statements
Certain written and oral statements made by the Company and
subsidiaries of the Company may constitute “forward-looking
statements” as defined under the Private Securities Litigation
Reform Act of 1995. This includes statements made in this press
release. Generally, the words “anticipates”, “believes”, “expects”,
“plans”, “may”, “will”, “should”, “seeks”, “estimates”, “project”,
“predict”, “potential”, “continue”, “intends”, and other similar
words identify forward-looking statements. All statements that
address operating results, events or developments that the Company
expects or anticipates will occur in the future, including
statements related to sales, earnings per share results, and
statements expressing general expectations about future operating
results, are forward-looking statements and are based upon its
current expectations and various assumptions. The Company believes
there is a reasonable basis for these expectations and assumptions,
but there can be no assurance that the Company will realize these
expectations or that these assumptions will prove correct.
Forward-looking statements are subject to risks that could cause
them to differ materially from actual results. Accordingly, the
Company cautions readers not to place undue reliance on
forward-looking statements. 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 29, 2020, and in
the Company's 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 Company's
ability to manage successfully the demand, supply, and operational
challenges associated with the actual or perceived effects of
COVID-19 and any similar future public health crisis, pandemic or
epidemic, the Company's ability to deliver products to its
customers in a timely manner and according to their fulfillment
standards, the costs of complying with the business demands and
requirements of large sophisticated customers, its dependence on
the strength of retail economies and vulnerabilities to any
prolonged economic downturn, including from the effects of
COVID-19, the Company's relationships with key customers and
licensors, its dependence on sales to several large customers and
the risks associated with any loss or substantial decline in sales
to top customers, expectations regarding any proposed
restructurings, its recent, pending and future acquisitions or
divestitures, including its ability to realize anticipated cost
savings, synergies and other benefits along with its ability to
effectively integrate acquired businesses or separate divested
businesses, circumstances which may contribute to future impairment
of goodwill, intangible or other long-lived assets, the retention
and recruitment of key personnel, the costs, complexity and
challenges of upgrading and managing its global information
systems, the risks associated with cybersecurity and information
security breaches, the risks associated with global legal
developments regarding privacy and data security could result in
changes to its business practices, penalties, increased cost of
operations, or otherwise harm our business, risks associated with
foreign currency exchange rate fluctuations, the risks associated
with accounting for tax positions, tax audits and related disputes
with taxing authorities, the risks of potential changes in laws in
the U.S. or abroad, including tax laws, regulations or treaties,
employment and health insurance laws and regulations, and laws
relating to environmental policy, personal data, financial
regulation, transportation policy and infrastructure policy along
with the costs and complexities of compliance with such laws, its
ability to continue to avoid classification as a controlled foreign
corporation, and legislation enacted in Bermuda and Barbados in
response to the European Union’s review of harmful tax competition
could adversely affect our operations, risks associated with
weather conditions, the duration and severity of the cold and flu
season and other related factors, its dependence on foreign sources
of supply and foreign manufacturing, and associated operational
risks including, but not limited to, long lead times, consistent
local labor availability and capacity, and timely availability of
sufficient shipping carrier capacity, labor and energy on cost of
goods sold and certain operating expenses, the risks associated
with significant tariffs or other restrictions on imports from
China or any retaliatory trade measures taken by China, the
geographic concentration and peak season capacity of certain U.S.
distribution facilities increases its exposure to significant
shipping disruptions and added shipping and storage costs, its
projections of product demand, sales and net income are highly
subjective in nature and future sales and net income could vary in
a material amount from such projections, the risks associated with
the use of trademarks licensed from and to third parties, its
ability to develop and introduce a continuing stream of new
products to meet changing consumer preferences, trade barriers,
exchange controls, expropriations, and other risks associated with
U.S. and foreign operations, the risks to its liquidity as a result
of changes to capital and credit market conditions, limitations
under its financing arrangements and other constraints or events
that impose constraints on its cash resources and ability to
operate its business, the risks associated with product recalls,
product liability, other claims, and related litigation against us,
the risks associated with significant changes in regulations or
product certifications. The Company undertakes no obligation to
publicly update or revise any forward-looking statements as a
result of new information, future events or otherwise.
HELEN OF
TROY LIMITED AND SUBSIDIARIES
Condensed Consolidated
Statements of Income
(Unaudited)
(in thousands, except per
share data)
Three Months Ended Last Day of
February,
2020
2019
Sales revenue, net (8)
$
442,365
100.0
%
$
384,843
100.0
%
Cost of goods sold
249,750
56.5
%
227,313
59.1
%
Gross profit
192,615
43.5
%
157,530
40.9
%
Selling, general and administrative
expense ("SG&A")
152,108
34.4
%
112,457
29.2
%
Asset impairment charges
41,000
9.3
%
—
—
%
Restructuring charges (3)
2,252
0.5
%
977
0.3
%
Operating income
(2,745
)
(0.6
)%
44,096
11.5
%
Nonoperating income, net
81
—
%
165
—
%
Interest expense
(3,414
)
(0.8
)%
(3,306
)
(0.9
)%
Income before income tax
(6,078
)
(1.4
)%
40,955
10.6
%
Income tax expense
(2,923
)
(0.7
)%
3,241
0.8
%
Income (loss) from continuing
operations
(3,155
)
(0.7
)%
37,714
9.8
%
Loss from discontinued operations, net of
tax
—
—
%
(448
)
(0.1
)%
Net income (loss)
$
(3,155
)
(0.7
)%
$
37,266
9.7
%
Earnings (loss) per share - diluted:
Continuing operations
$
(0.13
)
$
1.47
Discontinued operations
—
(0.02
)
Total earnings (loss) per share -
diluted
$
(0.13
)
$
1.45
Weighted average shares of common stock
used in computing diluted earnings (loss) per share
25,175
25,638
Fiscal Year Ended Last Day of
February,
2020
2019
Sales revenue, net (8)
$
1,707,432
100.0
%
$
1,564,151
100.0
%
Cost of goods sold
972,966
57.0
%
923,045
59.0
%
Gross profit
734,466
43.0
%
641,106
41.0
%
SG&A
511,902
30.0
%
438,141
28.0
%
Asset impairment charges
41,000
2.4
%
—
—
%
Restructuring charges (3)
3,313
0.2
%
3,586
0.2
%
Operating income
178,251
10.4
%
199,379
12.7
%
Nonoperating income, net
394
—
%
340
—
%
Interest expense
(12,705
)
(0.7
)%
(11,719
)
(0.7
)%
Income before income tax
165,940
9.7
%
188,000
12.0
%
Income tax expense
13,607
0.8
%
13,776
0.9
%
Income from continuing operations
152,333
8.9
%
174,224
11.1
%
Loss from discontinued operations, net of
tax
—
—
%
(5,679
)
(0.4
)%
Net income
$
152,333
8.9
%
$
168,545
10.8
%
Earnings (loss) per share - diluted:
Continuing operations
$
6.02
$
6.62
Discontinued operations
—
(0.22
)
Total earnings per share - diluted
$
6.02
$
6.41
Weighted average shares of common stock
used in computing diluted earnings per share
25,322
26,303
Condensed Consolidated
Statements of Income and Reconciliation of Non-GAAP Financial
Measures – Adjusted Operating Income, Adjusted Income from
Continuing Operations and Adjusted Diluted Earnings Per Share
(“EPS”) from Continuing Operations (1)
(Unaudited)
(in thousands, except per
share data)
Three Months Ended February
29, 2020
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net (8)
$
442,365
100.0
%
$
—
$
442,365
100.0
%
Cost of goods sold
249,750
56.5
%
—
249,750
56.5
%
Gross profit
192,615
43.5
%
—
192,615
43.5
%
SG&A
152,108
34.4
%
(8,142
)
(4)
138,709
31.4
%
(4,186
)
(5)
(1,071
)
(9)
Asset impairment charges
41,000
9.3
%
(41,000
)
(7)
—
—
%
Restructuring charges (3)
2,252
0.5
%
(2,252
)
(3)
—
—
%
Operating income
(2,745
)
(0.6
)%
56,651
53,906
12.2
%
Nonoperating income, net
81
—
%
—
81
—
%
Interest expense
(3,414
)
(0.8
)%
—
(3,414
)
(0.8
)%
Income (loss) before income tax
(6,078
)
(1.4
)%
56,651
50,573
11.4
%
Income tax expense
(2,923
)
(0.7
)%
5,676
2,753
0.6
%
Income (loss) from continuing
operations
(3,155
)
(0.7
)%
50,975
47,820
10.8
%
Diluted EPS from continuing operations
$
(0.13
)
$
2.01
$
1.88
Weighted average shares of common stock
used in computing diluted EPS
25,175
25,403
Three Months Ended February
28, 2019
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
384,843
100.0
%
$
—
$
384,843
100.0
%
Cost of goods sold
227,313
59.1
%
—
227,313
59.1
%
Gross profit
157,530
40.9
%
—
157,530
40.9
%
SG&A
112,457
29.2
%
(3,382
)
(4)
104,051
27.0
%
(5,024
)
(5)
Restructuring charges (3)
977
0.3
%
(977
)
(3)
—
—
%
Operating income
44,096
11.5
%
9,383
53,479
13.9
%
Nonoperating income, net
165
—
%
—
165
—
%
Interest expense
(3,306
)
(0.9
)%
—
(3,306
)
(0.9
)%
Income before income tax
40,955
10.6
%
9,383
50,338
13.1
%
Income tax expense
3,241
0.8
%
540
3,781
1.0
%
Income from continuing operations
37,714
9.8
%
8,843
46,557
12.1
%
Diluted EPS from continuing operations
$
1.47
$
0.35
$
1.82
Weighted average shares of common stock
used in computing diluted EPS
25,638
25,638
Condensed Consolidated
Statements of Income and Reconciliation of Non-GAAP Financial
Measures – Adjusted Operating Income, Adjusted Income from
Continuing Operations and Adjusted Diluted Earnings Per Share
(“EPS”) from Continuing Operations (1)
(Unaudited)
(in thousands, except per
share data)
Fiscal Year Ended February 29,
2020
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net (8)
$
1,707,432
100.0
%
$
—
$
1,707,432
100.0
%
Cost of goods sold
972,966
57.0
%
—
972,966
57.0
%
Gross profit
734,466
43.0
%
—
734,466
43.0
%
SG&A
511,902
30.0
%
(21,271
)
(4)
465,156
27.2
%
(22,929
)
(5)
(2,546
)
(9)
Asset impairment charges (7)
41,000
2.4
%
(41,000
)
(7)
—
—
%
Restructuring charges (3)
3,313
0.2
%
(3,313
)
(3)
—
—
%
Operating income
178,251
10.4
%
91,059
269,310
15.8
%
Nonoperating income, net
394
—
%
—
394
—
%
Interest expense
(12,705
)
(0.7
)%
—
(12,705
)
(0.7
)%
Income before income tax
165,940
9.7
%
91,059
256,999
15.1
%
Income tax expense
13,607
0.8
%
7,821
21,428
1.3
%
Income from continuing operations
152,333
8.9
%
83,238
235,571
13.8
%
Diluted EPS from continuing operations
$
6.02
$
3.29
$
9.30
Weighted average shares of common stock
used in computing diluted EPS
25,322
25,322
Fiscal Year Ended February 28,
2019
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
1,564,151
100.0
%
$
—
$
1,564,151
100.0
%
Cost of goods sold
923,045
59.0
%
—
923,045
59.0
%
Gross profit
641,106
41.0
%
—
641,106
41.0
%
SG&A
438,141
28.0
%
(14,204
)
(4)
401,884
25.7
%
(22,053
)
(5)
Restructuring charges (3)
3,586
0.2
%
(3,586
)
(3)
—
—
%
Operating income
199,379
12.7
%
39,843
239,222
15.3
%
Nonoperating income, net
340
—
%
—
340
—
%
Interest expense
(11,719
)
(0.7
)%
—
(11,719
)
(0.7
)%
Income before income tax
188,000
12.0
%
39,843
227,843
14.6
%
Income tax expense
13,776
0.9
%
1,982
15,758
1.0
%
Income from continuing operations
174,224
11.1
%
37,861
212,085
13.6
%
Diluted EPS from continuing operations
$
6.62
$
1.44
$
8.06
Weighted average shares of common stock
used in computing diluted EPS
26,303
26,303
Consolidated and Segment Net
Sales
(Unaudited)
(in thousands)
Three Months Ended Last Day of
February,
Housewares
Health & Home
Beauty
Total
Fiscal 2019 sales revenue, net
$
126,069
$
168,140
$
90,634
$
384,843
Organic business (10)
18,911
18,183
14,591
51,685
Impact of foreign currency
(32
)
(469
)
299
(202
)
Acquisition (8)
—
—
6,039
6,039
Change in sales revenue, net
18,879
17,714
20,929
57,522
Fiscal 2020 sales revenue, net
$
144,948
$
185,854
$
111,563
$
442,365
Total net sales revenue growth
15.0
%
10.5
%
23.1
%
14.9
%
Organic business
15.0
%
10.8
%
16.1
%
13.4
%
Impact of foreign currency
—
%
(0.3
)%
0.3
%
(0.1
)%
Acquisition
—
%
—
%
6.7
%
1.6
%
Fiscal Year Ended Last Day of
February,
Housewares
Health & Home
Beauty
Total
Fiscal 2019 sales revenue, net
$
523,807
$
695,217
$
345,127
$
1,564,151
Organic business (10)
118,446
(5,349
)
31,157
144,254
Impact of foreign currency
(1,288
)
(4,471
)
(1,253
)
(7,012
)
Acquisition (8)
—
—
6,039
6,039
Change in sales revenue, net
117,158
(9,820
)
35,943
143,281
Fiscal 2020 sales revenue, net
$
640,965
$
685,397
$
381,070
$
1,707,432
Total net sales revenue growth
(decline)
22.4
%
(1.4
)%
10.4
%
9.2
%
Organic business
22.6
%
(0.8
)%
9.0
%
9.2
%
Impact of foreign currency
(0.2
)%
(0.6
)%
(0.4
)%
(0.4
)%
Acquisition
—
%
—
%
1.7
%
0.4
%
Leadership Brand Net Sales
Revenue (2) (8)
(Unaudited)
(in thousands)
Three Months Ended
Last Day of February,
$ Change
% Change
(in thousands)
2020
2019
20/19
20/19
Leadership Brand sales revenue, net
(8)
$
347,713
$
300,432
$
47,283
15.7
%
All other sales revenue, net
94,652
84,411
10,239
12.1
%
Total sales revenue, net
$
442,365
$
384,843
$
57,522
14.9
%
Fiscal Year Ended
Last Day of February,
$ Change
% Change
(in thousands)
2020
2019
20/19
20/19
Leadership Brand sales revenue, net
(8)
$
1,360,059
$
1,243,600
$
116,459
9.4
%
All other sales revenue, net
347,373
320,551
26,822
8.4
%
Total sales revenue, net
$
1,707,432
$
1,564,151
$
143,281
9.2
%
Consolidated and Segment Net
Sales from Core and Non-Core Business (11)
(Unaudited)
(in thousands)
Three Months Ended Last Day of
February,
Housewares
Health & Home
Beauty
Total
Fiscal 2019 sales revenue, net
$
126,069
$
168,140
$
90,634
$
384,843
Core business (8)
18,879
17,714
24,792
61,385
Non-core business (Personal Care)
—
—
(3,863
)
(3,863
)
Change in sales revenue, net
18,879
17,714
20,929
57,522
Fiscal 2020 sales revenue, net
$
144,948
$
185,854
$
111,563
$
442,365
Total net sales revenue growth
15.0
%
10.5
%
23.1
%
14.9
%
Core business
15.0
%
10.5
%
27.4
%
16.0
%
Non-core business (Personal Care)
—
%
—
%
(4.3
)%
(1.0
)%
Fiscal Year Ended Last Day of
February,
Housewares
Health & Home
Beauty
Total
Fiscal 2019 sales revenue, net
$
523,807
$
695,217
$
345,127
$
1,564,151
Core business (8)
117,158
(9,820
)
46,796
154,134
Non-core business (Personal Care)
—
—
(10,853
)
(10,853
)
Change in sales revenue, net
117,158
(9,820
)
35,943
143,281
Fiscal 2020 sales revenue, net
$
640,965
$
685,397
$
381,070
$
1,707,432
Total net sales revenue growth
22.4
%
(1.4
)%
10.4
%
9.2
%
Core business
22.4
%
(1.4
)%
13.6
%
9.9
%
Non-core business (Personal Care)
—
%
—
%
(3.1
)%
(0.7
)%
SELECTED OTHER DATA
Reconciliation of Non-GAAP
Financial Measures – GAAP Operating Income
to Adjusted Operating Income
(non-GAAP) (1)
(Unaudited) (in
thousands)
Three Months Ended February
29, 2020
Housewares
Health & Home
Beauty (8)
Total
Operating income (loss), as reported
(GAAP)
$
13,965
9.6
%
$
16,330
8.8
%
$
(33,040
)
(29.6
)%
$
(2,745
)
(0.6
)%
Asset impairment charges (7)
—
—
—
—
41,000
36.8
%
41,000
9.3
%
Acquisition-related expenses (9)
—
—
%
—
—
%
1,071
1.0
%
1,071
0.2
%
Restructuring charges (3)
1,261
0.9
%
93
0.1
%
898
0.8
%
2,252
0.5
%
Subtotal
15,226
10.5
%
16,423
8.8
%
9,929
8.9
%
41,578
9.4
%
Amortization of intangible assets
543
0.4
%
2,451
1.3
%
5,148
4.6
%
8,142
1.8
%
Non-cash share-based compensation
1,365
0.9
%
1,878
1.0
%
943
0.8
%
4,186
0.9
%
Adjusted operating income (non-GAAP)
$
17,134
11.8
%
$
20,752
11.2
%
$
16,020
14.4
%
$
53,906
12.2
%
Three Months Ended February
28, 2019
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
20,392
16.2
%
$
15,947
9.5
%
$
7,757
8.6
%
$
44,096
11.5
%
Restructuring charges (3)
186
0.1
%
328
0.2
%
463
0.5
%
977
0.3
%
Subtotal
20,578
16.3
%
16,275
9.7
%
8,220
9.1
%
45,073
11.7
%
Amortization of intangible assets
506
0.4
%
2,796
1.7
%
80
0.1
%
3,382
0.9
%
Non-cash share-based compensation
1,701
1.3
%
2,174
1.3
%
1,149
1.3
%
5,024
1.3
%
Adjusted operating income (non-GAAP)
$
22,785
18.1
%
$
21,245
12.6
%
$
9,449
10.4
%
$
53,479
13.9
%
Fiscal Year Ended February 29,
2020
Housewares
Health & Home
Beauty
Total
Operating income (loss), as reported
(GAAP)
$
123,135
19.2
%
$
68,166
9.9
%
$
(13,050
)
(3.4
)%
$
178,251
10.4
%
Asset impairment charges (7)
—
—
%
—
—
%
41,000
10.8
%
41,000
2.4
%
Acquisition-related expenses (9)
—
—
%
—
—
%
2,546
0.7
%
2,546
0.1
%
Restructuring charges (3)
1,351
0.2
%
93
—
%
1,869
0.5
%
3,313
0.2
%
Subtotal
124,486
19.4
%
68,259
10.0
%
32,365
8.5
%
225,110
13.2
%
Amortization of intangible assets
2,055
0.3
%
10,539
1.5
%
8,677
2.3
%
21,271
1.2
%
Non-cash share-based compensation
7,218
1.1
%
9,717
1.4
%
5,994
1.6
%
22,929
1.3
%
Adjusted operating income (non-GAAP)
$
133,759
20.9
%
$
88,515
12.9
%
$
47,036
12.3
%
$
269,310
15.8
%
Fiscal Year Ended February 28,
2019
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
100,743
19.2
%
$
68,448
9.8
%
$
30,188
8.7
%
$
199,379
12.7
%
Restructuring charges (3)
926
0.2
%
686
0.1
%
1,974
0.6
%
3,586
0.2
%
Subtotal
101,669
19.4
%
69,134
9.9
%
32,162
9.3
%
202,965
13.0
%
Amortization of intangible assets
1,980
0.4
%
10,925
1.6
%
1,299
0.4
%
14,204
0.9
%
Non-cash share-based compensation
7,974
1.5
%
9,204
1.3
%
4,875
1.4
%
22,053
1.4
%
Adjusted operating income (non-GAAP)
$
111,623
21.3
%
$
89,263
12.8
%
$
38,336
11.1
%
$
239,222
15.3
%
SELECTED OTHER DATA
Reconciliation of Non-GAAP
Financial Measures - EBITDA
(Earnings Before Interest,
Taxes, Depreciation and Amortization) and Adjusted EBITDA by
Segment (1)
(Unaudited) (in
thousands)
Three Months Ended February
29, 2020
Housewares
Health & Home
Beauty (8)
Total
Operating income (loss), as reported
(GAAP)
$
13,965
$
16,330
$
(33,040
)
$
(2,745
)
Depreciation and amortization, excluding
amortized interest
2,006
3,791
6,736
12,533
Nonoperating income, net
—
—
81
81
EBITDA (non-GAAP)
15,971
20,121
(26,223
)
9,869
Add: Acquisition-related expenses (9)
—
—
1,071
1,071
Restructuring charges (3)
1,261
93
898
2,252
Non-cash asset impairment charges (7)
—
—
41,000
41,000
Non-cash share-based compensation
1,365
1,878
943
4,186
Adjusted EBITDA (non-GAAP)
$
18,597
$
22,092
$
17,689
$
58,378
Three Months Ended February
28, 2019
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
20,392
$
15,947
$
7,757
$
44,096
Depreciation and amortization, excluding
amortized interest
1,634
4,355
1,448
7,437
Nonoperating income, net
—
—
165
165
EBITDA (non-GAAP)
22,026
20,302
9,370
51,698
Add: Restructuring charges (3)
186
328
463
977
Non-cash share-based compensation
1,701
2,174
1,149
5,024
Adjusted EBITDA (non-GAAP)
$
23,913
$
22,804
$
10,982
$
57,699
Fiscal Year Ended February 29,
2020
Housewares
Health & Home
Beauty (8)
Total
Operating income (loss), as reported
(GAAP)
$
123,135
$
68,166
$
(13,050
)
$
178,251
Depreciation and amortization, excluding
amortized interest
7,298
16,113
13,998
37,409
Nonoperating income, net
—
—
394
394
EBITDA (non-GAAP)
130,433
84,279
1,342
216,054
Add: Acquisition-related expenses (9)
—
—
2,546
2,546
Restructuring charges (3)
1,351
93
1,869
3,313
Non-cash asset impairment charges (7)
—
—
41,000
41,000
Non-cash share-based compensation
7,218
9,717
5,994
22,929
Adjusted EBITDA (non-GAAP)
$
139,002
$
94,089
$
52,751
$
285,842
Fiscal Year Ended February 28,
2019
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
100,743
$
68,448
$
30,188
$
199,379
Depreciation and amortization, excluding
amortized interest
6,048
17,058
6,821
29,927
Nonoperating income, net
—
—
340
340
EBITDA (non-GAAP)
106,791
85,506
37,349
229,646
Restructuring charges (3)
926
686
1,974
3,586
Non-cash share-based compensation
7,974
9,204
4,875
22,053
Adjusted EBITDA (non-GAAP)
$
115,691
$
95,396
$
44,198
$
255,285
Reconciliation of GAAP Income
(Loss) and Diluted Earnings Per Share (“EPS”) from Continuing
Operations to Adjusted Income and Adjusted Diluted EPS from
Continuing Operations (non-GAAP) (1) (Unaudited) (dollars in
thousands, except per share data)
Three Months Ended February
29, 2020
Income (loss) from Continuing
Operations
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
(6,078
)
$
(2,923
)
$
(3,155
)
$
(0.24
)
$
(0.12
)
$
(0.13
)
Acquisition-related expenses (9)
1,071
16
1,055
0.04
—
0.04
Asset impairment charges (7)
41,000
4,574
36,426
1.61
0.18
1.43
Restructuring charges (3)
2,252
93
2,159
0.09
—
0.08
Subtotal
38,245
1,760
36,485
1.51
0.07
1.44
Amortization of intangible assets
8,142
624
7,518
0.32
0.02
0.30
Non-cash share-based compensation
4,186
369
3,817
0.16
0.01
0.15
Adjusted (non-GAAP)
$
50,573
$
2,753
$
47,820
$
1.99
$
0.11
$
1.88
Weighted average shares of common stock
used in computing diluted EPS
25,403
Three Months Ended February
28, 2019
Income from Continuing
Operations
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
40,955
$
3,241
$
37,714
$
1.60
$
0.13
$
1.47
Restructuring charges (3)
977
30
947
0.04
—
0.04
Subtotal
41,932
3,271
38,661
1.64
0.13
1.51
Amortization of intangible assets
3,382
136
3,246
0.13
0.01
0.13
Non-cash share-based compensation
5,024
374
4,650
0.20
0.01
0.18
Adjusted (non-GAAP)
$
50,338
$
3,781
$
46,557
$
1.96
$
0.15
$
1.82
Weighted average shares of common stock
used in computing diluted EPS
25,638
Fiscal Year Ended February 29,
2020
Income from Continuing
Operations
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
165,940
$
13,607
$
152,333
$
6.55
$
0.54
$
6.02
Acquisition-related expenses (9)
2,546
38
2,508
0.10
—
0.10
Asset impairment charges (7)
41,000
4,574
36,426
1.62
0.18
1.44
Restructuring charges (3)
3,313
161
3,152
0.13
0.01
0.12
Subtotal
212,799
18,380
194,419
8.40
0.73
7.68
Amortization of intangible assets
21,271
1,245
20,026
0.84
0.05
0.79
Non-cash share-based compensation
22,929
1,803
21,126
0.91
0.07
0.83
Adjusted (non-GAAP)
$
256,999
$
21,428
$
235,571
$
10.15
$
0.85
$
9.30
Weighted average shares of common stock
used in computing diluted EPS
25,322
Fiscal Year Ended February 28,
2019
Income from Continuing
Operations
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
188,000
$
13,776
$
174,224
$
7.15
$
0.52
$
6.62
Restructuring charges (3)
3,586
215
3,371
0.14
0.01
0.13
Subtotal
191,586
13,991
177,595
7.28
0.53
6.75
Amortization of intangible assets
14,204
372
13,832
0.54
0.01
0.53
Non-cash share-based compensation
22,053
1,395
20,658
0.84
0.05
0.79
Adjusted (non-GAAP)
$
227,843
$
15,758
$
212,085
$
8.66
$
0.60
$
8.06
Weighted average shares of common stock
used in computing diluted EPS
26,303
Consolidated Core and Non-Core
Net Sales and Reconciliation of Core and Non-Core Diluted Earnings
Per Share (“EPS”) from Continuing Operations to Core and Non-Core
Adjusted Diluted EPS from Continuing Operations (non-GAAP) (1)
(Unaudited)
Fiscal Years Ended
Last Day of February,
$ Change
% Change
(in thousands)
2020
2019
2018
20/19
19/18
20/19
19/18
Sales revenue, net
Core
$
1,615,094
$
1,460,960
$
1,370,040
$
154,134
$
90,920
10.6
%
6.6
%
Non-core
92,338
103,191
108,805
(10,853
)
(5,614
)
(10.5
)%
(5.2
)%
Total
$
1,707,432
$
1,564,151
$
1,478,845
$
143,281
$
85,306
9.2
%
5.8
%
Fiscal Years Ended
Last Day of February,
$ Change
% Change
2020
2019
2018
20/19
19/18
20/19
19/18
Adjusted EPS
Core
$
8.72
$
7.27
$
6.51
$
1.45
$
0.76
19.9
%
11.7
%
Non-core
0.58
0.79
0.73
(0.21
)
0.06
(26.6
)%
8.2
%
Total
$
9.30
$
8.06
$
7.24
$
1.24
$
0.82
15.4
%
11.3
%
Fiscal Years Ended
Last Day of February,
Core Business:
2020
2019
2018
Diluted EPS, as reported
$
7.16
$
5.89
$
4.72
Tax Reform
—
—
0.66
Asset impairment charges, net of tax
—
—
—
Restructuring charges, net of tax
0.11
0.11
0.04
Acquisition-related expenses, net of
tax
0.10
—
—
Toys "R" Us bankruptcy charge, net of
tax
—
—
0.12
Subtotal
$
7.37
$
6.00
$
5.54
Amortization of intangible assets, net of
tax
0.53
0.49
0.49
Non-cash share-based compensation, net of
tax
0.82
0.78
0.48
Adjusted Diluted EPS (non-GAAP)
$
8.72
$
7.27
$
6.51
Fiscal Years Ended
Last Day of February,
Non-Core Business:
2020
2019
2018
Diluted EPS, as reported
$
(1.14
)
$
0.73
$
0.01
Tax reform
—
—
—
Asset impairment charges, net of tax
1.44
—
0.51
Restructuring charges, net of tax
0.01
0.02
0.03
Acquisition-related Expenses, net of
tax
—
—
—
Toys "R" Us bankruptcy charge, net of
tax
—
—
—
Subtotal
$
0.31
$
0.75
$
0.55
Amortization of intangible assets, net of
tax
0.26
0.04
0.17
Non-cash share-based compensation, net of
tax
0.01
0.01
0.01
Adjusted Diluted EPS (non-GAAP)
$
0.58
$
0.79
$
0.73
Diluted EPS, as reported (GAAP)
$
6.02
$
6.62
$
4.73
Selected Consolidated Balance
Sheet, Cash Flow and Liquidity Information (6)
(Unaudited)
(in thousands)
Last Day of February,
2020
2019
Balance Sheet:
Cash and cash equivalents
$
24,467
$
11,871
Receivables, net
348,023
280,280
Inventory, net
256,311
302,339
Assets held for sale
44,806
—
Total assets, current
682,836
604,859
Total assets
1,903,883
1,649,535
Total liabilities, current
338,896
312,031
Total long-term liabilities
403,264
340,867
Total debt
339,305
320,784
Consolidated stockholders' equity
1,161,723
996,637
Liquidity:
Working capital
$
343,940
$
292,828
Fiscal Year Ended Last Day of
February,
2020
2019
Cash Flow from continuing operations:
Depreciation and amortization
$
37,409
$
29,927
Net cash provided by operating
activities
271,293
200,568
Capital and intangible asset
expenditures
17,759
26,385
Net debt proceeds
16,900
29,900
Payments for repurchases of common
stock
10,169
217,493
Reconciliation of GAAP Net
Cash Provided by Operating Activities
to Free Cash Flow (Non-GAAP)
(1)
(Unaudited) (in
thousands)
Fiscal Year Ended Last Day of
February,
2020
2019
Net cash provided by operating activities
- continuing operations (GAAP)
$
271,293
$
200,568
Less: Capital and intangible asset
expenditures
(17,759
)
(26,385
)
Free cash flow - continuing operations
(Non-GAAP)
$
253,534
$
174,183
HELEN OF TROY LIMITED AND SUBSIDIARIES
Notes to Press Release
(1)
This press release contains non-GAAP
financial measures. Adjusted operating income, adjusted operating
margin, adjusted effective tax rate, adjusted income from
continuing operations, adjusted diluted EPS from continuing
operations, Core and Non-Core adjusted diluted EPS from continuing
operations, EBITDA, adjusted EBITDA, and free cash flow (“Non-GAAP
measures”) that are discussed in the accompanying press release or
in the preceding tables may be considered non-GAAP financial
information as contemplated by SEC Regulation G, Rule 100.
Accordingly, the Company is providing the preceding tables that
reconcile these measures to their corresponding GAAP-based measures
presented in the Company's Condensed Consolidated 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 financial measures, in
combination with the Company’s financial results calculated in
accordance with GAAP, provide investors with additional perspective
regarding the impact of certain charges on applicable income,
margin and earnings per share measures. The Company also believes
that these non-GAAP measures facilitate a more direct comparison of
the Company’s performance with its competitors. The Company further
believes that including the excluded charges would not accurately
reflect the underlying performance of the Company’s continuing
operations for the period in which the charges are incurred, even
though such charges may be incurred and reflected in the Company’s
GAAP financial results in the near future. Additionally, the
non-GAAP measures are used by management for measuring and
evaluating the Company’s performance. The material limitation
associated with the use of the non-GAAP 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)
Leadership Brand net sales consists of
revenue from the OXO, Honeywell, Braun, PUR, Hydro Flask, Vicks,
Hot Tools and Drybar brands.
(3)
Charges incurred in conjunction with the
Company’s restructuring plan (Project Refuel).
(4)
Amortization of intangible assets.
(5)
Non-cash share-based compensation.
(6)
Amounts presented are from continuing
operations with the exception of stockholders’ equity, which is
presented on a consolidated basis and includes discontinued
operations.
(7)
Non-cash asset impairment charges related
to goodwill and intangible assets. The charges were related to
assets of the Personal Care business classified as held for sale
within the Beauty segment.
(8)
Fiscal 2020 includes approximately five
weeks of operating results from the acquisition of Drybar Products
on January 23, 2020, which is reported in the Beauty segment.
(9)
Acquisition-related expense pertaining to
the Drybar Products acquisition.
(10)
Previously referred to as Core business,
Organic business refers to net sales revenue associated with
product lines or brands after the first twelve months from the date
the product line or brand is acquired, excluding the impact that
foreign currency re-measurement had on reported net sales. Net
sales revenue from internally developed brands or product lines is
considered Organic business activity.
(11)
The Company defines Core as strategic
business that it expects to be an ongoing part of its operations,
and Non-Core as business that it expects to divest within a year of
its designation as non-core.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200428005996/en/
Investor Contact: Helen of Troy Limited Anne Rakunas,
Director, External Communications (915) 225-4841 ICR, Inc. Allison
Malkin, Partner (203) 682-8200
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