Consolidated Net Sales Growth of 28.6%;
Organic Business Net Sales Growth of 27.3% GAAP Diluted Earnings
Per Share (“EPS”) of $2.31 Adjusted Diluted EPS Growth of 37.5% to
$3.48
Initiates Fiscal 2022 Outlook: Consolidated
GAAP Diluted EPS of $6.80 to $7.49; Core Diluted EPS of $6.60 to
$7.28 Consolidated Adjusted Diluted EPS of $10.46 to $10.97; Core
Adjusted Diluted EPS of $10.25 to $10.75 Consolidated Net Sales of
$1.93 to $1.98 Billion; Core Net Sales of $1.90 to $1.95
Billion
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 May 31, 2021.
Executive Summary – First Quarter of
Fiscal 2022
- Consolidated net sales revenue increase of 28.6% to $541.2
million, including:
- An increase in Leadership Brand net sales of 22.9%
- An increase in online channel net sales of approximately
4%
- Organic business net sales growth of 27.3%
- Core business net sales growth of 28.9%
- The Company is in discussions with the U.S. Environmental
Protection Agency (the “EPA”) regarding concerns that packaging
claims on certain products in its U.S. water and air filtration and
a limited subset of humidifier products are not in compliance with
the EPA's strict interpretation of specific regulations. On May 27,
2021, the Company voluntarily implemented a temporary stop shipment
action while it continues to work with the EPA to resolve
outstanding concerns on the affected products. The EPA has not
raised any product quality, safety or performance issues. The
Company has already addressed the EPA's concerns on the water
filtration products by making modest changes to our packaging and
have resumed shipping those products. The Company expects to
similarly resolve the EPA's concerns on air and humidification
packaging and then resume shipping of those products as soon as
operationally possible. During the first quarter of fiscal 2022,
the Company recorded a $13.1 million charge referred to as “EPA
compliance costs” in cost of goods sold to reflect the costs of its
compliance plans with respect to inventory on hand at the end of
the quarter.
- GAAP consolidated operating income of $64.8 million, or 12.0%
of net sales, which includes $13.1 million in EPA compliance costs,
compared to $57.0 million, or 13.5% of net sales, for the same
period last year
- Non-GAAP consolidated adjusted operating income increase of
33.6% to $95.0 million, or 17.5% of net sales, compared to $71.1
million, or 16.9% of net sales, for the same period last year
- GAAP diluted EPS of $2.31, which includes EPA compliance costs
of $0.52 per share, compared to $2.37 for the same period last
year
- Non-GAAP adjusted diluted EPS increase of 37.5% to $3.48,
compared to $2.53 for the same period last year
- Repurchased 436,842 shares of common stock in the open market
during the quarter for $95.5 million, at an average price of
$218.58 per share
Julien R. Mininberg, Chief Executive Officer, stated: “We
delivered an outstanding first quarter, with even higher sales
growth and stronger profitability than we expected. The 28.6% sales
growth was broad based, with Beauty and Housewares leading the way
as re-openings drove store traffic and our brands continued to
distinguish themselves with consumers. Health & Home also grew,
surpassing the very large COVID-related first quarter base laid
down a year ago. International sales grew even faster than the
fleet average as this strategic focus area benefited from prior
flywheel investments. We grew adjusted EPS by 37.5%, as the very
strong sales growth more than offset normalized spending versus
last year and headwinds from widespread inflation affecting nearly
all input costs including materials, labor, and transportation.
So far in Fiscal 2022, we have continued to take actions
intended to drive long-term value for shareholders. We divested our
Personal Care business in line with our long-term strategy to focus
on our Leadership Brands, finalized a land purchase in Gallaway,
Tennessee to build a state-of-the-art distribution center which
will have high levels of automation and scalable direct-to-consumer
capability, and re-purchased just under 2% of our stock. We also
secured more inventory ahead of the more recent cost increases in
the market, positioning us well to continue to meet demand and
better manage the current period of inflation and global supply
chain disruption.”
Mr. Mininberg continued: “Looking ahead to full fiscal 2022, we
are now in a position to provide an outlook. Our Housewares and
Beauty segments are each projecting healthy growth in revenue and
profitability on top of their strong growth last year. Our
projection in Health & Home includes the estimated impact of
lost sales volume related to the EPA matter. Our rapid response
team is working to bring this to resolution as quickly as possible.
Excluding the impact of the EPA matter, we were on track to achieve
growth in both Core net sales and Core adjusted EPS, which is in
line with the thinking we communicated in April.
Longer term, we remain committed to our Phase II Transformation
Plan and expect to return to our Phase II targets of average annual
organic revenue growth of 3% and adjusted EPS growth of 8% in
Fiscal 2023 and Fiscal 2024. We also remain actively focused on
acquisition opportunities to further accelerate long-term value
creation.”
Three Months Ended May
31,
(in thousands) (unaudited)
Housewares
Health & Home
Beauty
Total
Fiscal 2021 sales revenue, net
$
140,628
$
199,956
$
80,251
$
420,835
Organic business (1)
52,127
1,203
61,552
114,882
Impact of foreign currency
889
2,937
1,680
5,506
Change in sales revenue, net
53,016
4,140
63,232
120,388
Fiscal 2022 sales revenue, net
$
193,644
$
204,096
$
143,483
$
541,223
Total net sales revenue growth
37.7
%
2.1
%
78.8
%
28.6
%
Organic business
37.1
%
0.6
%
76.7
%
27.3
%
Impact of foreign currency
0.6
%
1.5
%
2.1
%
1.3
%
Operating margin (GAAP)
Fiscal 2022
14.0
%
5.5
%
18.4
%
12.0
%
Fiscal 2021
16.5
%
15.8
%
2.8
%
13.5
%
Adjusted operating margin (non-GAAP)
Fiscal 2022
17.2
%
14.6
%
22.3
%
17.5
%
Fiscal 2021
19.5
%
18.7
%
8.0
%
16.9
%
Consistent with its strategy of focusing resources on its
Leadership Brands, during the fourth quarter of fiscal 2020, the
Company committed to a plan to divest certain assets within its
Beauty segment's mass channel personal care business (“Personal
Care”). The net assets to be disposed of include intangible assets,
inventory, certain net trade receivables, fixed assets, and certain
accrued sales discounts and allowances relating to the Company's
mass channel liquids, powder and aerosol products under brands such
as Pert, Brut, Sure and Infusium. Accordingly, the Company
classified the identified net assets of the disposal group as held
for sale. The divestiture was completed during the second quarter
of fiscal 2022. The Company defines Core business as strategic
business that it expects to be an ongoing part of its operations,
and Non-Core business as business or net assets (including net
assets held for sale) that it expects to divest within a year of
its designation as Non-Core.
Three Months Ended May
31,
(in thousands) (unaudited)
Housewares
Health & Home
Beauty
Total
Fiscal 2021 sales revenue, net
$
140,628
$
199,956
$
80,251
$
420,835
Core business (2)
53,016
4,140
64,429
121,585
Non-Core business (Personal Care) (2)
—
—
(1,197
)
(1,197
)
Change in sales revenue, net
53,016
4,140
63,232
120,388
Fiscal 2022 sales revenue, net
$
193,644
$
204,096
$
143,483
$
541,223
Total net sales revenue growth
(decline)
37.7
%
2.1
%
78.8
%
28.6
%
Core business
37.7
%
2.1
%
80.3
%
28.9
%
Non-Core business (Personal Care)
—
%
—
%
(1.5
)%
(0.3
)%
EPA Packaging Compliance
Matter
The Company is currently in discussions with the EPA regarding
the compliance of packaging claims on certain of its products in
the air and water filtration and a limited subset of humidifier
products within the Health & Home segment that are sold in the
United States. The EPA has not raised any product quality, safety
or performance issues. The Company expects these products to be
available for distribution with the only changes being modified
labeling or different packaging. As a result of these discussions,
on May 27, 2021, the Company voluntarily implemented a temporary
stop shipment action in the U.S. while it works with the EPA
towards an expedient resolution. The EPA has approved modest
changes to the Company's labeling claims on its existing water
filtration packaging, which the Company has begun to implement. The
Company resumed shipment of these products this week and is
actively working towards similar agreements regarding its air
filtration and humidification packaging in continued collaboration
with the EPA. At the Company's request, the EPA issued a Stop Sale,
Use or Removal Order on June 29, 2021, which among other things,
allows for the movement of certain of its products among its
warehouses and will facilitate rework of the affected air
filtration packaging once agreed to with the EPA. The Company
believes this is meaningful progress towards a final resolution
with the EPA. The stop shipment will remain in effect until the
Company implements an approved labeling and repackaging plan.
During the first quarter of fiscal 2022, the Company recorded a
$13.1 million charge to write-off the obsolete packaging for the
affected products in inventory on-hand and in-transit as of the end
of the first quarter of fiscal 2022. The charge was recognized in
cost of goods sold and is referred to as “EPA compliance costs.”
The Company expects to incur additional EPA compliance costs, which
may include costs to relabel or repackage existing inventory as
well as incremental freight and storage costs, among other
things.
Consolidated Results - First Quarter
Fiscal 2022 Compared to First Quarter Fiscal 2021
- Consolidated net sales revenue increased $120.4 million, or
28.6%, to $541.2 million compared to $420.8 million. The growth was
driven by an Organic business increase of $114.9 million, or 27.3%,
primarily due to higher consolidated brick and mortar sales in the
Beauty and Housewares segments due to the favorable comparative
impact of store closures and reduced store traffic in the prior
year period, an increase in consolidated international sales,
higher sales in the club and closeout channels, growth in
consolidated online sales, and the favorable impact of $15 million
of orders that were not able to be shipped at the end of the fourth
quarter of fiscal 2021 due to the late-February winter storm in the
U.S. (“Winter Storm Uri”). These factors were partially offset by a
net sales revenue decline in Non-Core business. Net sales revenue
was also favorably impacted by net foreign currency fluctuations of
approximately $5.5 million, or 1.3%.
- Consolidated gross profit margin decreased 1.8 percentage
points to 40.8%, compared to 42.6%. The decrease in consolidated
gross profit margin was primarily due to higher inbound freight
expense due to rising freight costs and container supply shortages,
EPA compliance costs in the Health & Home segment of $13.1
million, and a less favorable channel mix in the Housewares
segment. These factors were partially offset by a more favorable
product mix in the Beauty segment.
- Consolidated selling, general and administrative expense
(“SG&A”) ratio decreased 0.2 percentage points to 28.8%,
compared to 29.0%. The decrease in the consolidated SG&A ratio
was primarily due to favorable operating leverage, reduced royalty
expense as a result of the amendment of the Revlon trademark
license, lower amortization expense, and a decrease in bad debt
expense. These factors were partially offset by the impact of
higher personnel and advertising expenses due to cost reduction
initiatives in the prior year period and higher distribution
expense.
- Consolidated operating income was $64.8 million, or 12.0% of
net sales revenue, compared to $57.0 million, or 13.5% of net sales
revenue. The decrease in consolidated operating margin was
primarily driven by higher inbound freight expense due to rising
freight costs and container supply shortages, EPA compliance costs,
a less favorable channel mix in the Housewares segment, higher
personnel and advertising expenses due to cost reduction
initiatives in the prior year period, and higher distribution
expenses. These factors were partially offset by a more favorable
product mix in the Beauty segment, favorable operating leverage,
reduced royalty expense as a result of the amendment of the Revlon
trademark license, lower amortization expense, and a decrease in
bad debt expense.
- Income tax expense as a percentage of income before tax was
8.0% compared to an income tax benefit of 13.0% for the same period
last year, primarily due to the benefit of the CARES Act in fiscal
2021. Income tax expense for the three months ended May 31, 2021 is
driven by the mix of taxable income in the Company's various
jurisdictions and tax benefits associated with share-based
compensation recognized in the period in which it is settled.
- Net income was $57.0 million, compared to $60.3 million.
Diluted EPS was $2.31 compared to $2.37. Diluted EPS decreased
primarily due to lower operating income in the Health & Home
segment and the comparative impact from the CARES Act tax benefit
recognized in the prior year period, partially offset by higher
operating income in the Beauty and Housewares segments, lower
interest expense, and lower weighted average diluted shares
outstanding.
- Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization) increased 32.7% to $100.8 million compared to
$76.0 million.
On an adjusted basis for the first quarters of fiscal 2022 and
2021, excluding EPA compliance costs, restructuring charges, tax
reform, amortization of intangible assets, and non-cash share-based
compensation, as applicable:
- Adjusted operating income increased $23.9 million, or 33.6%, to
$95.0 million, or 17.5% of net sales revenue, compared to $71.1
million, or 16.9% of net sales revenue. The 0.6 percentage point
increase in adjusted operating margin primarily reflects a more
favorable product mix in the Beauty segment, favorable operating
leverage, reduced royalty expense as a result of the amendment of
the Revlon trademark license, and a decrease in bad debt expense.
These factors were partially offset by higher inbound freight
expense due to rising freight costs and container supply shortages,
a less favorable channel mix in the Housewares segment, higher
personnel and advertising expenses due to cost reduction
initiatives in the prior year period, and higher distribution
expenses.
- Adjusted income increased $21.7 million, or 33.7%, to $85.8
million, compared to $64.2 million for the same period last year.
Adjusted diluted EPS increased 37.5% to $3.48 compared to $2.53.
The increase in adjusted diluted EPS was primarily due to higher
adjusted operating income in the Beauty and Housewares segments,
lower interest expense, and lower weighted average diluted shares
outstanding, partially offset by lower adjusted operating income in
the Health & Home segment and higher tax expense resulting from
the CARES Act tax benefit recognized in the prior year period.
Segment Results - First Quarter Fiscal
2022 Compared to First Quarter Fiscal 2021
Housewares net sales revenue increased $53.0 million, or 37.7%,
to $193.6 million, compared to $140.6 million. Growth was driven by
an Organic business increase of $52.1 million, or 37.1%, primarily
due to an increase in brick and mortar sales for both OXO and Hydro
Flask due to the favorable comparative impact of store closures and
reduced store traffic in the prior year period, growth in
international sales, higher sales in the club and closeout
channels, and the favorable impact of orders that were not able to
be shipped at the end of the fourth quarter of fiscal 2021 due to
Winter Storm Uri. These factors were partially offset by a decrease
in online sales due to the unfavorable comparative impact of an
even greater shift to online shopping in the prior year period due
to store closures. Net sales revenue was also favorably impacted by
net foreign currency fluctuations of approximately $0.9 million, or
0.6%. Operating income was $27.1 million, or 14.0% of segment net
sales revenue, compared to $23.2 million, or 16.5% of segment net
sales revenue. The 2.5 percentage point decrease in segment
operating margin was primarily due to a less favorable channel mix,
higher inbound freight expense, higher distribution costs, an
increase in marketing expense, and higher personnel expense. These
factors were partially offset by lower bad debt expense and
favorable operating leverage. Adjusted operating income increased
21.3% to $33.2 million, or 17.2% of segment net sales revenue
compared to $27.4 million, or 19.5% of segment net sales
revenue.
Health & Home net sales revenue increased $4.1 million, or
2.1%, to $204.1 million, compared to $200.0 million. Growth was
driven by an Organic business increase of $1.2 million, or 0.6%,
primarily due to an increase in sales in the air filtration
category, growth in international sales, and the favorable impact
of orders that were not able to be shipped at the end of the fourth
quarter of fiscal 2021 due to Winter Storm Uri. These factors were
sufficient to grow over the 30.2% organic sales increase fueled by
strong COVID-19 driven demand for healthcare and healthy living
products in the comparative prior year period. Net sales revenue
was also favorably impacted by net foreign currency fluctuations of
approximately $2.9 million, or 1.5%. Operating income was $11.2
million, or 5.5% of segment net sales revenue, compared to $31.5
million, or 15.8% of segment net sales revenue. The 10.3 percentage
point decrease in segment operating margin was primarily due to a
less favorable product mix, EPA compliance costs of $13.1 million,
higher inbound freight expense, higher distribution costs, an
increase in marketing expense, and higher personnel expenses. These
factors were partially offset by lower product liability claim
costs, reduced amortization expense, a decrease in royalty expense,
and the favorable impact of foreign currency fluctuations. Adjusted
operating income decreased 20.1% to $29.8 million, or 14.6% of
segment net sales revenue, compared to $37.3 million, or 18.7% of
segment net sales revenue.
Beauty net sales revenue increased $63.2 million, or 78.8%, to
$143.5 million, compared to $80.3 million. The increase was driven
by an Organic business increase of $61.6 million, or 76.7%. The
Organic growth was broad based with strength across many aspects of
the business. The growth drivers include an increase in brick and
mortar sales due to the favorable comparative impact of store
closures and reduced store traffic in the prior year period, growth
in the volumizer franchise due to continued high consumer demand,
expanded distribution primarily in the club channel, new product
introductions, the favorable comparative impact of constrained
supply levels in the prior year period, a strong increase in Drybar
sales, an increase in online channel sales, significantly higher
international sales, and the favorable impact of orders that were
not able to be shipped at the end of the fourth quarter of fiscal
2021 due to Winter Storm Uri. These factors were partially offset
by a decline in Non-Core business. Net sales revenue was also
favorably impacted by net foreign currency fluctuations of
approximately $1.7 million, or 2.1%. Operating income was $26.4
million, or 18.4% of segment net sales revenue, compared to $2.2
million, or 2.8% of segment net sales revenue. The 15.6 percentage
point increase in segment operating margin was primarily due to
favorable operating leverage, a more favorable product mix, reduced
royalty expense as a result of the amendment of the Revlon
trademark license, lower inventory obsolescence costs, the
favorable impact of foreign currency fluctuations, and a decrease
in bad debt expense. These factors were partially offset by higher
inbound freight expense, increased marketing expense, and increased
personnel expense. Adjusted operating income increased $25.5
million to $31.9 million, or 22.3% of segment net sales revenue,
compared to $6.4 million, or 8.0% of segment net sales revenue.
Balance Sheet and Cash Flow Highlights
- First Quarter Fiscal 2022 Compared to First Quarter Fiscal
2021
- Cash and cash equivalents totaled $37.4 million, compared to
$88.5 million.
- Accounts receivable turnover was 67.4 days, compared to 67.5
days.
- Inventory was $540.1 million, compared to $276.3 million.
Trailing twelve-month inventory turnover was 3.0 times compared to
3.2 times.
- Total short- and long-term debt was $511.0 million, compared to
$324.9 million.
- Net cash used by operating activities for the first three
months of the fiscal year was $63.4 million, compared to net cash
provided of $92.8 million for the same period last year.
Subsequent Event
On June 7, 2021, the Company completed the sale of its Personal
Care business, not including the Latin America and Caribbean
regions, to HRB Brands LLC for $44.7 million in cash. The sale also
includes an option that provides HRB Brands LLC the right to
purchase the Latin America and Caribbean Personal Care businesses
no later than the end of fiscal 2022, subject to meeting certain
agreed-upon conditions. The carrying amount of the identified
assets and liabilities within the disposal group were classified as
held for sale as of May 31, 2021. The transaction is not reflected
in the Company's condensed consolidated financial statements as of
and for the period ended May 31, 2021.
Fiscal 2022 Annual
Outlook
Due to the sale of the majority of the Personal Care business
during the second quarter of fiscal 2022 and the expected continued
classification of the remaining Latin America and Caribbean
Personal Care business as Non-Core for fiscal 2022, the outlook the
Company is providing is on both a consolidated and Core business
basis in order to provide comparability between historical and
future periods.
The Company's outlook includes the current estimated impact of
the duration of the EPA-related stop shipment action previously
discussed, which is based on the estimated timing of approval and
implementation of the Company's compliance plans. The Company's
outlook includes an estimated unfavorable sales revenue impact of
$110 to $135 million and an unfavorable adjusted diluted EPS impact
of $0.70 to $1.00 related to lost sales volume and earnings due to
the EPA matter. The adjusted diluted EPS impact is net of the
favorable impact of cost reduction actions being taken in the
Health & Home segment, which include significant reductions in
personnel, marketing and select new product development costs.
The Company incurred $13.1 million of EPA compliance costs in
the first quarter of fiscal 2022 in conjunction with the
implementation of its compliance plans. These costs were included
in our GAAP operating results but were excluded in our non-GAAP
adjusted operating results. The Company expects to incur additional
EPA compliance costs, which may include costs to relabel or
repackage existing inventory as well as incremental freight and
storage costs, among other things. The Company expects to continue
to exclude these costs from non-GAAP adjusted operating results,
and the costs have been excluded from the annual outlook for
non-GAAP adjusted diluted EPS.
The Company expects consolidated net sales revenue in the range
of $1.93 to $1.98 billion, which implies a decline of 8.0% to 5.5%.
The Company expects Core net sales revenue in the range of $1.9 to
$1.95 billion, which implies a decline of 6.0% to 3.5%, which
includes 6.7% to 5.4% of unfavorable impact related to the EPA
matter.
The Company’s net sales outlook reflects the following
expectations by segment:
- Housewares net sales growth of 7.0% to 9.0%;
- Health & Home net sales decline of 27.0% to 24.0%,
including 15.2% to 12.4% of decline related to the EPA matter;
and
- Beauty net sales growth of 4.2% to 6.3%; Beauty Core net sales
growth of 17.0% to 19.0%.
The Company expects consolidated GAAP diluted EPS of $6.80 to
$7.49 and Core diluted EPS of $6.60 to $7.28. The Company expects
consolidated non-GAAP adjusted diluted EPS in the range of $10.46
to $10.97 and Core adjusted diluted EPS in the range of $10.25 to
$10.75, which excludes any EPA compliance costs, asset impairment
charges, restructuring charges, tax reform, share-based
compensation expense and intangible asset amortization expense. The
Company's Core adjusted diluted EPS outlook implies a decline of
7.0% to 2.5%, which includes 9.1% to 6.3% of impact due to the EPA
matter, implying year-over-year growth of 2.1% to 3.8% not
including the impact of the EPA matter.
The Company’s outlook also includes year-over-year inflationary
cost pressures of approximately $55 to $60 million, or
approximately $2.25 to $2.45 of adjusted diluted EPS, much of which
have been mitigated through improved product mix, price increases,
forward buying of inventory to delay cost impacts, utilizing
previously negotiated shipping contracts at rates below current
market prices, and implementing other cost reduction
initiatives.
The Company’s consolidated and Core net sales and EPS outlook
reflect the following:
- the assumption that the severity of the cough/cold/flu season
will be in line with pre-COVID historical averages;
- the assumption that June 2021 foreign currency exchange rates
will remain constant for the remainder of the fiscal year; and
- an estimated weighted average diluted shares outstanding of
24.4 million.
Due to the strong growth comparison and COVID-related events in
fiscal 2021, and the timing of the estimated impacts of the
shipping restrictions related to the EPA matter, the Company
expects consolidated Core net sales growth for fiscal 2022 to be
concentrated entirely in the first quarter of the fiscal year. The
Company also expects Core adjusted diluted EPS growth for fiscal
2022 to be concentrated in the first and fourth quarters of the
fiscal year, with the second quarter expected to be the most
impacted by the shipping restrictions as well as having the most
challenging growth comparison to the prior fiscal year.
The Company expects a reported consolidated GAAP effective tax
rate range of 13.0% to 14.0%, and a Core GAAP effective tax rate
range of 12.8% to 13.8% for the full fiscal year 2022. The Company
expects a consolidated adjusted effective tax rate range of 10.1%
to 11.1% and a Core adjusted effective tax rate range of 9.9% to
10.9%.
The Company expects capital asset expenditures of $100 to $125
million for the full fiscal year 2022, which includes expected
initial expenditures related to a new 2 million square foot
distribution facility with state-of-the-art automation for the
Housewares segment. The Company expects the total cost of the new
distribution center and equipment to be in the range of $200 to
$225 million spread over fiscal years 2022 and 2023, assuming
construction and equipment costs remain at current levels.
The likelihood and potential impact of any fiscal 2022
acquisitions and divestitures, future asset impairment charges,
future foreign currency fluctuations, material long-term
distribution losses and/or customer returns that may arise related
to the EPA matter, or further share repurchases are unknown and
cannot be reasonably estimated; therefore, they are not included in
the Company’s sales and earnings outlook.
Conference Call and
Webcast
The Company will conduct a teleconference in conjunction with
today’s earnings release. The teleconference begins at 9:00 a.m.
Eastern Time today, Thursday, July 8, 2021. 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 12:00 p.m. Eastern Time on July 8, 2021 until
11:59 p.m. Eastern Time on July 15, 2021 and can be accessed by
dialing (844) 512-2921 and entering replay pin number 13720546. 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 Effective Tax Rate, Adjusted
Income, Adjusted Diluted Earnings per Share (“EPS”), Core and
Non-Core Adjusted Diluted EPS, 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 flows. For
additional information see Note 8 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 diversified portfolio of well-recognized and
widely-trusted brands, including OXO, Hydro Flask, Vicks, Braun,
Honeywell, PUR, Hot Tools and Drybar. We sometimes refer to these
brands as our Leadership Brands. All trademarks herein belong to
Helen of Troy Limited (or its subsidiaries) 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”, “would”, “should”, “seeks”, “estimates”,
“project”, “predict”, “potential”, “currently”, “continue”,
“intends”, “outlook”, 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-Q for the three months ended May 31, 2021, 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 successfully manage 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, actions taken by large customers that may adversely
affect the Company's gross profit and operating results, the
Company's dependence on the strength of retail economies and
vulnerabilities to any prolonged economic downturn, including from
the effects of COVID-19, the Company's dependence on sales to
several large customers and the risks associated with any loss of,
or substantial decline in, sales to top customers, expectations
regarding recent acquisitions and any future acquisitions or
divestitures, including the Company's ability to realize related
synergies along with its ability to effectively integrate acquired
businesses or disaggregate divested businesses, the Company's
reliance on its Chief Executive Officer and a limited number of
other key senior officers to operate its business, obsolescence or
interruptions in the operation of the Company's central global
Enterprise Resource Planning systems and other peripheral
information systems, occurrence of cyber incidents or failure by
the Company or its third-party service providers to maintain
cybersecurity and the integrity of confidential internal or
customer data, the Company's dependence on third-party
manufacturers, most of which are located in the Asia Pacific
market, and any inability to obtain products from such
manufacturers, risks associated with weather conditions, the
duration and severity of the cold and flu season and other related
factors, the geographic concentration and peak season capacity of
certain U.S. distribution facilities which increase its risk to
disruptions that could affect the Company's ability to deliver
products in a timely manner, risks associated with the use of
licensed trademarks from or to third parties, the Company's ability
to develop and introduce a continuing stream of innovative new
products to meet changing consumer preferences, the risks
associated with trade barriers, exchange controls, expropriations,
and other risks associated with domestic and foreign operations,
the risks associated with significant changes in or the Company's
compliance with regulations, interpretations or product
certification requirements, the risks associated with the Company's
discussions with the EPA on the development and implementation of
compliance plans related to certain of its products within the
Health & Home segment, the risks associated with global legal
developments regarding privacy and data security that could result
in changes to its business practices, penalties, increased cost of
operations, or otherwise harm the business, the risks associated
with accounting for tax positions and the resolution of tax
disputes, the risks of potential changes in laws and regulations,
including environmental, health and safety and tax laws, and the
costs and complexities of compliance with such laws, the Company's
ability to continue to avoid classification as a Controlled Foreign
Corporation, the risks associated with legislation enacted in
Bermuda and Barbados in response to the European Union’s review of
harmful tax competition, the risks of significant tariffs or other
restrictions being placed on imports from China or Mexico or any
retaliatory trade measures taken by China or Mexico, the risks
associated with product recalls, product liability and other claims
against the Company, and associated financial risks including but
not limited to, significant impairment of the Company's goodwill,
indefinite-lived and definite-lived intangible assets or other
long-lived assets, risks associated with foreign currency exchange
rate fluctuations, increased costs of raw materials, energy and
transportation, projections of product demand, sales and net
income, which are highly subjective in nature, and from which
future sales and net income could vary in a material amount, the
risks to the Company's liquidity or cost of capital which may be
materially adversely affected by constraints or changes in the
capital and credit markets and limitations under its financing
arrangements. 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 May
31,
2021
2020
Sales revenue, net
$
541,223
100.0
%
$
420,835
100.0
%
Cost of goods sold
320,631
59.2
%
241,534
57.4
%
Gross profit
220,592
40.8
%
179,301
42.6
%
Selling, general and administrative
expense (“SG&A”)
155,751
28.8
%
121,989
29.0
%
Restructuring charges
6
—
%
333
0.1
%
Operating income
64,835
12.0
%
56,979
13.5
%
Non-operating income, net
102
—
%
236
0.1
%
Interest expense
2,995
0.6
%
3,846
0.9
%
Income before income tax
61,942
11.4
%
53,369
12.7
%
Income tax expense
4,970
0.9
%
(6,917
)
(1.6
)%
Net income
$
56,972
10.5
%
$
60,286
14.3
%
Diluted earnings per share (“EPS”)
$
2.31
$
2.37
Weighted average shares of common stock
used in computing diluted EPS
24,636
25,397
Condensed Consolidated
Statements of Income and Reconciliation of Non-GAAP
Financial
Measures – Adjusted Operating
Income, Adjusted Income and Adjusted Diluted EPS (8)
(Unaudited) (in thousands,
except per share data)
Three Months Ended May 31,
2021
As Reported (GAAP)
Adjustments
Adjusted (Non-GAAP)
Sales revenue, net
$
541,223
100.0
%
$
—
$
541,223
100.0
%
Cost of goods sold
320,631
59.2
%
(13,112
)
(3)
307,519
56.8
%
Gross profit
220,592
40.8
%
13,112
233,704
43.2
%
SG&A
155,751
28.8
%
(2,983
)
(4)
138,748
25.6
%
(14,020
)
(5)
Restructuring charges
6
—
%
(6
)
(6)
—
—
%
Operating income
64,835
12.0
%
30,121
94,956
17.5
%
Non-operating income, net
102
—
%
—
102
—
%
Interest expense
2,995
0.6
%
—
2,995
0.6
%
Income before income tax
61,942
11.4
%
30,121
92,063
17.0
%
Income tax expense
4,970
0.9
%
1,264
6,234
1.2
%
Net income
$
56,972
10.5
%
$
28,857
$
85,829
15.9
%
Diluted EPS
$
2.31
$
1.17
$
3.48
Weighted average shares of common stock
used in computing diluted EPS
24,636
24,636
Three Months Ended May 31,
2020
As Reported (GAAP)
Adjustments
Adjusted (Non-GAAP)
Sales revenue, net
$
420,835
100.0
%
$
—
$
420,835
100.0
%
Cost of goods sold
241,534
57.4
%
—
241,534
57.4
%
Gross profit
179,301
42.6
%
—
179,301
42.6
%
SG&A
121,989
29.0
%
(4,474
)
(4)
108,224
25.7
%
(9,291
)
(5)
Restructuring charges
333
0.1
%
(333
)
(6)
—
—
%
Operating income
56,979
13.5
%
14,098
71,077
16.9
%
Non-operating income, net
236
0.1
%
—
236
—
%
Interest expense
3,846
0.9
%
—
3,846
0.9
%
Income before income tax
53,369
12.7
%
14,098
67,467
16.0
%
Income tax expense
(6,917
)
(1.6
)%
10,206
3,289
0.8
%
Net income
$
60,286
14.3
%
$
3,892
$
64,178
15.3
%
Diluted EPS
$
2.37
$
0.15
$
2.53
Weighted average shares of common stock
used in computing diluted EPS
25,397
25,397
Consolidated and Segment Net Sales Revenue
(Unaudited) (in
thousands)
Three Months Ended May
31,
Housewares
Health & Home
Beauty
Total
Fiscal 2021 sales revenue, net
$
140,628
$
199,956
$
80,251
$
420,835
Organic business (1)
52,127
1,203
61,552
114,882
Impact of foreign currency
889
2,937
1,680
5,506
Change in sales revenue, net
53,016
4,140
63,232
120,388
Fiscal 2022 sales revenue, net
$
193,644
$
204,096
$
143,483
$
541,223
Total net sales revenue growth
37.7
%
2.1
%
78.8
%
28.6
%
Organic business
37.1
%
0.6
%
76.7
%
27.3
%
Impact of foreign currency
0.6
%
1.5
%
2.1
%
1.3
%
Leadership Brand and Other Net
Sales Revenue
(Unaudited) (in
thousands)
Three Months Ended May
31,
2021
2020
$ Change
% Change
Leadership Brand sales revenue, net
(7)
$
429,056
$
349,030
$
80,026
22.9%
All other sales revenue, net
112,167
71,805
40,362
56.2%
Total sales revenue, net
$
541,223
$
420,835
$
120,388
28.6%
Consolidated and Segment Net
Sales from Core and Non-Core Business (2)
(Unaudited) (in
thousands)
Three Months Ended May
31,
Housewares
Health & Home
Beauty
Total
Fiscal 2021 sales revenue, net
$
140,628
$
199,956
$
80,251
$
420,835
Core business
53,016
4,140
64,429
121,585
Non-Core business (Personal Care)
—
—
(1,197
)
(1,197
)
Change in sales revenue, net
53,016
4,140
63,232
120,388
Fiscal 2022 sales revenue, net
$
193,644
$
204,096
$
143,483
$
541,223
Total net sales revenue growth
(decline)
37.7
%
2.1
%
78.8
%
28.6
%
Core business
37.7
%
2.1
%
80.3
%
28.9
%
Non-Core business (Personal Care)
—
%
—
%
(1.5
)%
(0.3
)%
SELECTED OTHER DATA
Reconciliation of Non-GAAP
Financial Measures – GAAP Operating Income
to Adjusted Operating Income
(Non-GAAP) (8)
(Unaudited) (in
thousands)
Three Months Ended May 31,
2021
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
27,143
14.0
%
$
11,249
5.5
%
$
26,443
18.4
%
$
64,835
12.0
%
EPA compliance costs
—
—
%
13,112
6.4
%
—
—
%
13,112
2.4
%
Restructuring charges
—
—
%
—
—
%
6
—
%
6
—
%
Subtotal
27,143
14.0
%
24,361
11.9
%
26,449
18.4
%
77,953
14.4
%
Amortization of intangible assets
518
0.3
%
567
0.3
%
1,898
1.3
%
2,983
0.6
%
Non-cash share-based compensation
5,551
2.9
%
4,880
2.4
%
3,589
2.5
%
14,020
2.6
%
Adjusted operating income (non-GAAP)
$
33,212
17.2
%
$
29,808
14.6
%
$
31,936
22.3
%
$
94,956
17.5
%
Three Months Ended May 31,
2020
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
23,233
16.5
%
$
31,533
15.8
%
$
2,213
2.8
%
$
56,979
13.5
%
Restructuring charges
238
0.2
%
—
—
%
95
0.1
%
333
0.1
%
Subtotal
23,471
16.7
%
31,533
15.8
%
2,308
2.9
%
57,312
13.6
%
Amortization of intangible assets
498
0.4
%
2,452
1.2
%
1,524
1.9
%
4,474
1.1
%
Non-cash share-based compensation
3,421
2.4
%
3,314
1.7
%
2,556
3.2
%
9,291
2.2
%
Adjusted operating income (non-GAAP)
$
27,390
19.5
%
$
37,299
18.7
%
$
6,388
8.0
%
$
71,077
16.9
%
SELECTED OTHER DATA
Reconciliation of Non-GAAP
Financial Measures - EBITDA
(Earnings Before Interest,
Taxes, Depreciation and Amortization) and Adjusted EBITDA
(8)
(Unaudited) (in
thousands)
Three Months Ended May 31,
2021
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
27,143
$
11,249
$
26,443
$
64,835
Depreciation and amortization
2,548
2,726
3,439
8,713
Non-operating income, net
—
—
102
102
EBITDA (non-GAAP)
29,691
13,975
29,984
73,650
Add: EPA compliance costs
—
13,112
—
13,112
Restructuring charges
—
—
6
6
Non-cash share-based compensation
5,551
4,880
3,589
14,020
Adjusted EBITDA (non-GAAP)
$
35,242
$
31,967
$
33,579
$
100,788
Three Months Ended May 31,
2020
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
23,233
$
31,533
$
2,213
$
56,979
Depreciation and amortization
2,122
4,052
2,966
9,140
Non-operating income, net
—
—
236
236
EBITDA (non-GAAP)
25,355
35,585
5,415
66,355
Add: Restructuring charges
238
—
95
333
Non-cash share-based compensation
3,421
3,314
2,556
9,291
Adjusted EBITDA (non-GAAP)
$
29,014
$
38,899
$
8,066
$
75,979
Reconciliation of GAAP Net Income and Diluted EPS to
Adjusted Income and Adjusted
Diluted EPS (Non-GAAP) (8)
(Unaudited) (in thousands,
except per share data)
Three Months Ended May 31,
2021
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
61,942
$
4,970
$
56,972
$
2.51
$
0.20
$
2.31
EPA compliance costs
13,112
197
12,915
0.53
0.01
0.52
Restructuring charges
6
—
6
—
—
—
Subtotal
75,060
5,167
69,893
3.05
0.21
2.84
Amortization of intangible assets
2,983
208
2,775
0.12
0.01
0.11
Non-cash share-based compensation
14,020
859
13,161
0.57
0.03
0.53
Adjusted (non-GAAP)
$
92,063
$
6,234
$
85,829
$
3.74
$
0.25
$
3.48
Weighted average shares of common stock
used in computing diluted EPS
24,636
Three Months Ended May 31,
2020
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
53,369
$
(6,917
)
$
60,286
$
2.10
$
(0.27
)
$
2.37
Restructuring charges
333
2
331
0.01
—
0.01
Tax reform
—
9,357
(9,357
)
—
0.37
(0.37
)
Subtotal
53,702
2,442
51,260
2.11
0.10
2.02
Amortization of intangible assets
4,474
241
4,233
0.18
0.01
0.17
Non-cash share-based compensation
9,291
606
8,685
0.37
0.02
0.34
Adjusted (non-GAAP)
$
67,467
$
3,289
$
64,178
$
2.66
$
0.13
$
2.53
Weighted average shares of common stock
used in computing diluted EPS
25,397
Consolidated Core and Non-Core
Net Sales and Reconciliation of Core and Non-Core
Diluted EPS to Core and
Non-Core Adjusted Diluted EPS (Non-GAAP) (2) (8)
(Unaudited) (in thousands,
except per share data)
Three Months Ended May
31,
2021
2020
$ Change
% Change
Sales revenue, net
Core
$
521,104
$
399,519
$
121,585
30.4%
Non-Core
20,119
21,316
(1,197)
(5.6)%
Total
$
541,223
$
420,835
$
120,388
28.6%
Three Months Ended May
31,
2021
2020
$ Change
% Change
Adjusted Diluted EPS (non-GAAP)
Core
$
3.31
$
2.43
$
0.88
36.2%
Non-Core
0.17
0.10
0.07
70.0%
Total
$
3.48
$
2.53
$
0.95
37.5%
Three Months Ended May
31,
Core Business:
2021
2020
Diluted EPS, as reported
$
2.15
$
2.27
EPA compliance costs, net of tax
0.52
—
Restructuring charges, net of tax
—
0.01
Tax Reform
—
(0.37
)
Subtotal
2.67
1.92
Amortization of intangible assets, net of
tax
0.11
0.17
Non-cash share-based compensation, net of
tax
0.53
0.34
Adjusted Diluted EPS (non-GAAP)
$
3.31
$
2.43
Three Months Ended May
31,
Non-Core Business:
2021
2020
Diluted EPS, as reported
$
0.16
$
0.10
Non-cash share-based compensation, net of
tax
—
—
Adjusted Diluted EPS (non-GAAP)
$
0.17
$
0.10
Diluted EPS, as reported (GAAP)
$
2.31
$
2.37
Selected Consolidated Balance
Sheet, Cash Flow and Liquidity Information
(Unaudited) (in
thousands)
May 31,
2021
2020
Balance Sheet:
Cash and cash equivalents
$
37,368
$
88,517
Receivables, net
406,409
332,769
Inventory, net
540,129
276,327
Total assets, current
1,056,074
757,036
Total assets
2,348,092
1,975,688
Total liabilities, current
571,735
365,929
Total long-term liabilities
574,276
388,007
Total debt
510,974
324,883
Stockholders' equity
1,202,081
1,221,752
Liquidity:
Working capital
$
484,339
$
391,107
Three Months Ended May
31,
2021
2020
Cash Flow:
Depreciation and amortization
$
8,713
$
9,140
Net cash (used) provided by operating
activities
(63,385)
92,826
Capital and intangible asset
expenditures
4,006
6,451
Net debt proceeds (repayments)
167,100
(10,900)
Payments for repurchases of common
stock
110,074
10,013
Reconciliation of GAAP Net Cash (Used) Provided by Operating
Activities
to Free Cash Flow (Non-GAAP)
(8)
(Unaudited) (in
thousands)
Three Months Ended May
31,
2021
2020
Net cash (used) provided by operating
activities (GAAP)
$
(63,385
)
$
92,826
Less: Capital and intangible asset
expenditures
(4,006
)
(6,451
)
Free cash flow (non-GAAP)
$
(67,391
)
$
86,375
Fiscal 2022 Outlook for Net
Sales Revenue (2)
(Unaudited)
(in thousands)
Consolidated:
Fiscal 2021
Outlook for Fiscal
2022
Net sales revenue
$
2,098,799
$
1,931,000
—
$
1,983,000
(8.0)%
—
(5.5)%
Core Business: Net sales revenue
$
2,020,453
$
1,900,000
—
$
1,950,000
(6.0)%
—
(3.5)%
Non-Core Business: Net sales revenue
$
78,346
$
31,000
—
$
33,000
(60.4)%
—
(57.9)%
Reconciliation of Fiscal 2022
Outlook for GAAP Diluted Earnings Per Share (“EPS”)
to Adjusted Diluted EPS
(Non-GAAP) (2) (8) (Unaudited)
Consolidated:
Three Months Ended May 31,
2021
Outlook for the Balance of the
Fiscal Year (Nine Months)
Outlook Fiscal 2022
Diluted EPS, as reported (GAAP)
$
2.31
$
4.49
—
$
5.18
$
6.80
—
$
7.49
EPA compliance costs, net of tax
0.52
1.23
—
1.03
1.75
—
1.55
Restructuring charges, net of tax
—
0.02
—
0.02
0.02
—
0.02
Subtotal
2.84
5.73
—
6.22
8.57
—
9.06
Amortization of intangible assets, net of
tax
0.11
0.35
—
0.35
0.46
—
0.46
Non-cash share-based compensation, net of
tax
0.53
0.89
—
0.91
1.42
—
1.44
Adjusted diluted EPS (non-GAAP)
$
3.48
$
6.98
—
$
7.49
$
10.46
—
$
10.97
Core Business:
Three Months Ended May 31,
2021
Outlook for the Balance of the
Fiscal Year (Nine Months)
Outlook Fiscal 2022
Diluted EPS, as reported (GAAP)
$
2.15
$
4.45
—
$
5.13
$
6.60
—
$
7.28
EPA compliance costs, net of tax
0.52
1.23
—
1.03
1.75
—
1.55
Restructuring charges, net of tax
—
0.02
—
0.02
0.02
—
0.02
Subtotal
2.67
5.70
—
6.18
8.37
—
8.85
Amortization of intangible assets, net of
tax
0.11
0.35
—
0.35
0.46
—
0.46
Non-cash share-based compensation, net of
tax
0.53
0.89
—
0.91
1.42
—
1.44
Adjusted diluted EPS (non-GAAP)
$
3.31
$
6.94
—
$
7.44
$
10.25
—
$
10.75
Non-Core Business:
Three Months Ended May 31,
2021
Outlook for the Balance of the
Fiscal Year (Nine Months)
Outlook Fiscal 2022
Diluted EPS, as reported (GAAP)
$
0.16
$
0.04
—
$
0.05
$
0.20
—
$
0.21
Non-cash share-based compensation, net of
tax
—
—
—
—
—
—
—
Adjusted diluted EPS (non-GAAP)
$
0.17
$
0.04
—
$
0.05
$
0.21
—
$
0.22
Effective Tax Rate (GAAP) and
Adjusted Effective Tax Rate (Non-GAAP) (2) (8)
(Unaudited)
Consolidated:
Three Months Ended May 31,
2021
Outlook for the Balance of the
Fiscal Year (Nine Months)
Outlook Fiscal 2022
Effective tax rate, as reported (GAAP)
8.0
%
15.4
%
—
16.5
%
13.0
%
—
14.0
%
EPA compliance costs
(1.1)
%
(2.6)
%
—
(2.1)
%
(2.1)
%
—
(1.9)
%
Restructuring charges
—
%
—
%
—
—
%
—
%
—
—
%
Subtotal
6.9
%
12.7
%
—
14.3
%
10.9
%
—
12.1
%
Amortization of intangible assets
—
%
(0.3)
%
—
(0.3)
%
(0.2)
%
—
(0.2)
%
Non-cash share-based compensation
(0.1)
%
(0.8)
%
—
(0.9)
%
(0.6)
%
—
(0.7)
%
Adjusted effective tax rate (non-GAAP)
6.8
%
11.7
%
—
13.0
%
10.1
%
—
11.1
%
Core Business:
Three Months
Ended May 31, 2021
Outlook for the Balance of the
Fiscal Year (Nine Months)
Outlook Fiscal 2022
Effective tax rate, as reported (GAAP)
7.8
%
15.1
%
—
16.1
%
12.8
%
—
13.8
%
EPA compliance costs
(1.1)
%
(2.6)
%
—
(2.1)
%
(2.1)
%
—
(1.9)
%
Restructuring charges
—
%
—
%
—
—
%
—
%
—
—
%
Subtotal
6.7
%
12.4
%
—
14.0
%
10.6
%
—
11.9
%
Amortization of intangible assets
—
%
(0.3)
%
—
(0.3)
%
(0.2)
%
—
(0.2)
%
Non-cash share-based compensation
(0.1)
%
(0.7)
%
—
(0.9)
%
(0.6)
%
—
(0.7)
%
Adjusted effective tax rate (non-GAAP)
6.6
%
11.4
%
—
12.8
%
9.9
%
—
10.9
%
Non-Core Business:
Three Months Ended May 31,
2021
Outlook for the Balance of the
Fiscal Year (Nine Months)
Outlook Fiscal 2022
Effective tax rate, as reported (GAAP)
11.3
%
45.4
%
—
43.3
%
19.1
%
—
20.1
%
Non-cash share-based compensation
—
%
—
%
—
—
%
—
%
—
—
%
Adjusted effective tax rate (non-GAAP)
11.3
%
45.4
%
—
43.3
%
19.1
%
—
20.1
%
HELEN OF TROY LIMITED AND SUBSIDIARIES
Notes to Press Release
- 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, not including the impact that foreign currency
had on reported net sales. Net sales revenue from internally
developed brands or product lines is considered Organic business
activity.
- The Company defines Core as strategic business that it expects
to be an ongoing part of its operations, and Non-Core as business
or assets (including assets held for sale) that it expects to
divest within a year of its designation as Non-Core.
- Charges incurred in conjunction with EPA compliance of
packaging claims on certain products in the air and water
filtration and humidification categories within the Health &
Home segment.
- Amortization of intangible assets.
- Non-cash share-based compensation.
- Charges incurred in connection with the Company’s restructuring
plan (Project Refuel).
- Leadership Brand net sales consists of revenue from the OXO,
Honeywell, Braun, PUR, Hydro Flask, Vicks, Hot Tools and Drybar
brands.
- This press release contains non-GAAP financial measures.
Adjusted Operating Income, Adjusted Operating Margin, Adjusted
Effective Tax Rate, Adjusted Income, Adjusted Diluted EPS, Core and
Non-Core Adjusted Diluted EPS, EBITDA, Adjusted EBITDA, and Free
Cash Flow ("Non-GAAP Financial 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. 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 and benefits 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 and benefits would not
accurately reflect the underlying performance of the Company’s
operations for the period in which the charges and benefits are
incurred, even though such charges and benefits may be incurred and
reflected in the Company’s GAAP financial results in the near
future. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210708005323/en/
Investors: Helen of Troy Limited Anne Rakunas, Director,
External Communications (915) 225-4841
ICR, Inc. Allison Malkin, Partner (203) 682-8200
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