● Delivers Consolidated Net Sales
Revenue Growth of 1.9%; Core Business Growth of 1.3%
● Reports GAAP Diluted Loss Per Share
of $(1.12); Adjusted Diluted EPS of $2.52
● Updates Post-Divestiture Fiscal
2018 GAAP Diluted EPS Outlook to $5.42 to $5.63 for Continuing
Operations
● Updates Post-Divestiture Adjusted
Diluted EPS Outlook to $6.85 to $7.10 for Continuing
Operations
● Updates Post-Divestiture Fiscal
2018 Outlook for Consolidated Net Sales from Continuing Operations
of $1.440 to $1.463 billion; Growth of 2.3% to 4.0%
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 November 30, 2017. Third quarter
fiscal 2018 GAAP results include pre-tax non-cash asset impairment
charges of $82.2 million associated with the Company’s
Nutritional Supplements segment and $1.3 million in
restructuring charges related to our restructuring plan, Project
Refuel, with no comparable charges in the same period last
year.
Executive Summary
- Consolidated net sales revenue increase
of 1.9%, including:
- An increase in Leadership Brand net
sales of approximately 6.4%
- An increase in online channel net sales
of approximately 18.6%
- GAAP operating loss of $(15.6) million,
or (3.4)% of net sales, which includes $82.2 million in non-cash
pre-tax asset impairment charges and $1.3 million in restructuring
charges, compared to operating income of $63.3 million, or 14.2% of
net sales, in the same period last year
- Non-GAAP adjusted operating income
growth of 7.5% to $79.0 million, or 17.4% of net sales, which
excludes the impairment and restructuring charges mentioned above,
compared to $73.4 million, or 16.5% of net sales in the same period
last year
- Effective tax rate of (58.4)% compared
to 3.7% in the same period of the prior year, driven by the impact
of impairment charges on the tax provision
- GAAP diluted loss per share of $(1.12),
which includes $3.30 per share in impairment and restructuring
charges mentioned above, compared to diluted earnings per share
(“EPS”) of $2.07 in the same period last year with no comparable
charges in the prior year
- Non-GAAP adjusted diluted earnings per
share growth of 6.3% to $2.52, compared to $2.37 in the same period
last year
- Repurchased 311,100 shares of common
stock in the open market during the quarter for $29.2 million
Julien R. Mininberg, Chief Executive Officer, stated: “We
achieved solid results in the third quarter, with consolidated
sales growth of 1.9% driven primarily by new product introductions,
incremental distribution, and growth in international sales. Our
Leadership Brands continue to perform well, gaining 6.4% with each
of the seven growing during the quarter. Growth in the online
channel continued to be a key driver, gaining 18.6% to now
represent 17.4% of total sales for the third quarter. We drove
gross margin expansion through a better mix of higher-margin sales,
and increased consolidated adjusted operating margin as we
benefitted from greater efficiencies from our shared services
platform, even as we continued to invest in our brand portfolio and
digital capabilities. This progress resulted in adjusted earnings
per share growth of 6.3%. Our Health & Home and Housewares
segments led sales growth in the quarter, and both segments
achieved higher adjusted operating margins compared to the prior
year period. In our Beauty segment, sales and profitability
benefitted from new product introductions in the appliance
category, which was offset by continued challenges in the personal
care category. Subsequent to the end of the third quarter, we
completed the sale of the Nutritional Supplements business. The
sale of Healthy Directions demonstrates our willingness to sharpen
our portfolio and allows us to focus even more resources on our
Leadership Brands. Post divestiture, these brands, which are among
our highest volume, highest margin and most asset-efficient, now
represent more than 75% of fiscal year-to-date sales from
continuing operations. Importantly, the direct-to-consumer systems
and fulfillment capability we built for Healthy Directions remain
with Helen of Troy. We continue to look for the right acquisition
to further strengthen our portfolio and make use of our strong
balance sheet. Meanwhile, during the third quarter we
opportunistically repurchased 1.2% of our outstanding common
stock.”
Mr. Mininberg continued: “We are pleased with our
accomplishments this fiscal year to date, which are the result of
solid execution against our clear and focused strategies. We
achieved overall sales growth of 2.6%, including growth in our
Leadership Brands of 7.3%, improved profitability, and delivered
adjusted diluted EPS growth of 12.1%. We also reduced inventory by
over 5% year over year as we continue to benefit from the improved
operating efficiencies that are so important to our overall
transformation plan. We are therefore increasing our fiscal 2018
adjusted diluted EPS outlook range for continuing operations. We
continue to prudently invest behind those brands, channels and
categories that provide the best opportunities to drive growth and
further improve profitability. We believe these disciplined
investments in product innovation, marketing, and digital
initiatives will position our company for continued long-term
shareholder value creation.”
Three Months Ended November 30,
Housewares
Health & Home
Nutritional
Supplements
Beauty Total Fiscal 2017 sales revenue,
net $ 124,723 $ 179,842 $ 32,163 $ 107,686 $ 444,414 Core business
3,074 9,323 (2,827) (3,731) 5,839 Impact of foreign currency
220 1,810 - 762 2,792 Change in sales
revenue, net 3,294 11,133 (2,827)
(2,969) 8,631 Fiscal 2018 sales revenue, net $ 128,017 $
190,975 $ 29,336 $ 104,717 $ 453,045 Total net sales revenue
growth 2.6 % 6.2 % (8.8) % (2.8) % 1.9 % Core business 2.5 % 5.2 %
(8.8) % (3.5) % 1.3 % Impact of foreign currency 0.2 % 1.0 % - %
0.7 % 0.6 % Operating margin (GAAP) Third quarter fiscal
2018 23.4 % 14.6 % (284.7) % 9.6 % (3.4) % Third quarter fiscal
2017 23.4 % 11.2 % (0.2) % 13.0 % 14.2 % Adjusted operating margin
(non-GAAP) Third quarter fiscal 2018 25.0 % 16.9 % 3.6 % 13.0 %
17.4 % Third quarter fiscal 2017 24.5 % 13.7 % 5.8 % 15.3 % 16.5 %
Consolidated Operating Results - Third
Quarter Fiscal 2018 Compared to Third Quarter Fiscal
2017
Consolidated net sales revenue increased 1.9% to $453.0 million
compared to $444.4 million, which included an increase of 0.6% from
foreign currency fluctuations. The net sales increase includes the
contribution from new product introductions, online customer
growth, incremental distribution, and growth in international
sales. These factors were partially offset by an 8.8% decline in
the Nutritional Supplements segment, which had an unfavorable
impact of 0.6% on consolidated sales growth, a decrease in the
personal care category within Beauty, and the impact of lower store
traffic and soft consumer spending at traditional brick and mortar
retail.
- Consolidated gross profit margin
increased 0.8% percentage points to 44.5% compared to 43.7%. The
increase in consolidated gross profit margin is primarily due to
favorable product mix, growth in the Company’s Leadership Brands
and the favorable impact of net foreign currency fluctuations,
partially offset by the unfavorable impact that the revenue
declines in the Nutritional Supplements segment and personal care
category had on consolidated gross profit margin.
- Consolidated SG&A as a percentage
of sales increased by 0.1% percentage point to 29.6% of net sales
compared to 29.5%. The increase is primarily due to higher
incentive compensation expense and the unfavorable comparative
impact of foreign currency revaluation year over year. These
factors were partially offset by lower advertising expense,
improved distribution efficiency, lower outbound freight costs, and
the impact that higher overall net sales had on operating
leverage.
- GAAP operating loss was $(15.6)
million, or (3.4)% of net sales, compared to operating income of
$63.3 million, or 14.2% of net sales, in the same period last year.
Operating loss includes pre-tax non-cash asset impairment charges
of $82.2 million in the Company’s Nutritional Supplements segment
and pre-tax restructuring charges of $1.3 million, with no
comparable charges in the same period last year. These items
unfavorably impacted the year-over-year comparison of operating
margin by 18.4 percentage points. The remaining increase in
consolidated operating margin primarily reflects a higher mix of
Leadership Brand sales at a higher operating margin, lower
marketing and advertising expense, improved distribution
efficiency, lower outbound freight costs, and the impact that
higher overall net sales had on operating leverage. These factors
were partially offset by higher incentive compensation expense and
the unfavorable comparative impact of foreign currency revaluation
year-over-year.
- Income tax expense as a percentage of
pre-tax loss was (58.4)%, compared to income tax expense of 3.7%
for the same period last year, primarily due to the recognition of
tax benefits from impairment charges over the course of the year in
relation to pre-tax income, as opposed to the periods in which the
charges were incurred. There were no comparable expenses or
benefits in the same period last year. The expected $52.8 million
tax benefit from impairment charges will be recognized entirely in
the fourth quarter of fiscal 2018 relative to pre-tax income.
- Net loss was $(30.4) million, or
$(1.12) per diluted share on 27.1 million weighted average shares
outstanding, compared to net income of $57.6 million, or $2.07 per
diluted share on 27.8 million weighted average diluted shares
outstanding. Net loss for the three months ended
November 30, 2017 includes after-tax non-cash asset
impairment charges of $88.6 million and after-tax restructuring
charges of $1.2 million, with no comparable charges for the same
period last year.
- Adjusted EBITDA (EBITDA excluding
non-cash asset impairment charges, restructuring charges, and
non‐cash share based compensation, as applicable) increased 7.5% to
$83.3 million compared to $77.5 million.
On an adjusted basis for the third quarters of fiscal 2018 and
2017, excluding non-cash asset impairment charges, restructuring
charges, non‐cash share based compensation, and non-cash
amortization of intangible assets, as applicable:
- Adjusted operating income was $79.0
million, or 17.4% of net sales, compared to $73.4 million, or 16.5%
of net sales. The 7.6% increase in adjusted operating income
primarily reflects a higher mix of Leadership Brand sales at a
higher operating margin, lower marketing and advertising expense, a
decline in product liability expense, improved distribution
efficiency, lower outbound freight costs, and the impact that
higher overall net sales had on operating leverage. These factors
were partially offset by higher incentive compensation expense and
the unfavorable comparative impact of foreign currency revaluation
year-over-year.
- Adjusted income was $68.8 million, or
$2.52 per diluted share, compared to $66.0 million, or $2.37 per
diluted share. The 6.3% increase in adjusted diluted earnings per
share primarily reflects the impact of higher adjusted operating
income in the Company’s Housewares and Health & Home segments
and lower weighted average diluted shares outstanding
year-over-year.
Segment Operating Results - Third
Quarter Fiscal 2018 Compared to Third Quarter Fiscal
2017
Housewares net sales increased by 2.6% reflecting an increase in
online channel sales, incremental distribution with existing
customers, international growth, and new product introductions for
both Hydro Flask and OXO brands. This growth was partially offset
by the unfavorable impact of lower store traffic and soft consumer
spending at traditional brick and mortar retail, and the
unfavorable comparative impact of strong sales into the club
channel in the same period last year. Segment net sales also
benefitted from the favorable impact of net foreign currency
fluctuations of approximately $0.2 million, or 0.2%. GAAP operating
margin was unchanged at 23.4%. Adjusted operating margin increased
0.5 percentage points primarily due to lower incentive compensation
expense and the impact of increased operating leverage from net
sales growth, partially offset by higher marketing, advertising and
new product development expense.
Health & Home net sales increased 6.2% reflecting
growth in online channel sales, expanded international
distribution, and incremental distribution with existing customers.
Segment net sales also benefitted from the favorable impact of net
foreign currency fluctuations of approximately $1.8 million,
or 1.0%. GAAP operating margin was 14.6% compared to 11.2%.
Adjusted operating margin increased 3.2 percentage points
reflecting a decline in product liability expense, lower legal fee
expense, improved distribution efficiency, lower outbound freight
costs, a decrease in marketing, advertising and new product
development expense, increased operating leverage from net sales
growth, and the favorable impact of net foreign currency
fluctuations on net sales.
Beauty net sales decreased 2.8% primarily reflecting a decline
in the personal care category, which offset solid growth in both
retail and professional appliance sales, particularly to online
retail customers. Segment net sales benefitted from the favorable
impact of net foreign currency fluctuations of approximately $0.8
million, or 0.7%. GAAP operating margin was 9.6% compared to 13.0%.
Adjusted operating margin was 13.0% compared to 15.3% reflecting
higher incentive compensation expense and the net sales decline in
the personal care category and its unfavorable impact on sales mix
and operating leverage, partially offset by lower media advertising
expense, improved distribution efficiency and lower outbound
freight costs.
Nutritional Supplements net sales decreased 8.8%, reflecting a
decline in auto-delivery revenue resulting primarily from the
transition to new order management and customer relationship
management systems, partially offset by increases in direct mail
and third-party retail sales. The segment’s operating loss was
$(83.5) million, and included pre-tax non-cash asset impairment
charges of $82.2 million and restructuring charges of $0.1
million, with no comparable charges in the same period last year.
This compares to an operating loss of $(0.1) million in the same
period last year. Segment adjusted operating income was $1.1
million compared to adjusted operating income of $1.9 million in
the same period last year. The decrease in adjusted operating
income is primarily due to higher promotional, advertising and
customer acquisition costs as a percentage of sales and the net
sales decline and its unfavorable impact on operating leverage.
Balance Sheet Highlights - Third
Quarter Fiscal 2018 Compared to Third Quarter Fiscal
2017
- Cash and cash equivalents totaled $21.2
million, compared to $16.8 million
- Total short- and long-term debt was
$426.2 million, compared to $564.9 million, a net decrease of
$138.7 million
- Accounts receivable turnover was 59.1
days, compared to 57.8 days
- Inventory was $285.6 million, compared
to $301.1 million, a net decrease of 5.1%. Inventory turnover was
2.9 times compared to 2.8 times
Subsequent Events
Divestiture of the Nutritional Supplements Segment
On December 20, 2017, the Company completed the sale of Healthy
Directions LLC and its subsidiaries to Direct Digital, LLC. The
purchase price from the sale is comprised of $46 million in cash
paid at closing and a supplemental payment with a target value of
$25 million, payable on or before August 1, 2019. The final amount
of the supplemental payment may be adjusted up or down based on the
performance of Healthy Directions through February 28, 2018. The
final purchase price is also subject to a customary working capital
adjustment. The transaction is not reflected in the Company’s
consolidated condensed financial statements as of and for the
period ended November 30, 2017.
Tax Reform
The Tax Cuts and Jobs Act was signed into law in December 2017,
which represents significant U.S. federal tax reform legislation
that includes a permanent reduction to the U.S. federal corporate
income tax rate. The permanent reduction to the federal corporate
income tax rate will have the effect of a one-time impact to the
value of the Company’s deferred tax assets and liabilities.
Additionally, the Company expects that the tax reform legislation
will subject certain of its cumulative foreign earnings and profits
to U.S. income taxes through a deemed repatriation. The Company is
reviewing the recently enacted tax reform’s effects on its deferred
tax assets and liabilities and the taxation of certain foreign
earnings and profits, and expects to recognize the one-time impact
in the fourth quarter of fiscal 2018. On a go-forward basis, the
Company expects the impact of the legislation to result in a
reduction of its effective tax rate beginning in fiscal 2019. The
Company has provided its estimated tax rate outlook for the
remainder of fiscal 2018 in a table accompanying the press release
and will provide its fiscal year 2019 estimated tax rate outlook
when it reports its fourth quarter fiscal 2018 results.
Fiscal 2018 Annual
Outlook
For fiscal 2018, the Company expects consolidated net sales
revenue from continuing operations in the range of $1.440 to $1.463
billion, which implies consolidated sales growth of 2.3% to 4.0%.
The Company’s net sales outlook assumes that December 2017 foreign
currency exchange rates will remain constant for the remainder of
the fiscal year and that the severity of the cough/cold/flu season
will be in line with long-term historical averages. Finally, the
Company’s net sales outlook reflects the following expectations by
segment:
- Housewares net sales growth of 7% to
9%;
- Health & Home net sales growth in
the mid-single digits; and
- Beauty net sales decline in the
mid-single digits.
The Company now expects consolidated GAAP diluted earnings per
share for continuing operations of $5.42 to $5.63 and adjusted
diluted earnings per share (non-GAAP) for continuing operations in
the range of $6.85 to $7.10, which excludes after-tax asset
impairment charges, the Toys ”R” Us bankruptcy charge,
restructuring charges, share-based compensation expense and
intangible asset amortization expense. The Company’s diluted
earnings per share outlook assumes that December 2017 foreign
currency exchange rates will remain constant for the remainder of
the fiscal year.
Consistent with the Company’s strategies of investing in core
business growth and consumer centric innovation, its outlook
continues to include approximately $0.40 to $0.50 per diluted share
year-over-year in incremental after-tax growth investments
expanding digital marketing, advertising, new product development
and e-commerce, primarily behind the Company’s Leadership Brands.
The diluted earnings per share outlook is based on an estimated
weighted average diluted shares outstanding of
27.3 million.
As previously announced, the Company has initiated Project
Refuel, which upon the divestiture of the Nutritional Supplements
segment, is now targeting annualized profit improvement of
approximately $8.0 million over the duration of the plan. The plan
is estimated to be completed by the first quarter of fiscal 2020,
and the Company expects to incur total cumulative restructuring
charges in the range of $3.2 to $4.8 million over the same
period.
The Company now expects a reported GAAP effective tax rate range
of 10.4% to 10.9% for continuing operations, and an adjusted
effective tax rate range of 6.8% to 7.2% for continuing operations
for the full fiscal year 2018. The outlook does not include the
potential one-time impact from recently enacted tax legislation
that cannot be reasonably estimated at this time. Please refer to
the schedule entitled “Effective Income Tax Rate (GAAP) and
Adjusted Effective Income Tax Rate (Non-GAAP)” in the accompanying
tables to this press release.
The likelihood and potential impact of any fiscal 2018
acquisitions and divestitures, future asset impairment charges,
future foreign currency fluctuations, 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, Monday, January 8, 2018. Investors and
analysts interested in participating in the call are invited to
dial (888) 394-8218 approximately ten minutes prior to the start of
the call. The conference call will also be webcast live at:
http://investor.hotus.com/. A telephone replay of this call will be
available at 12:00 p.m. Eastern Time on January 8, 2018 until 11:59
p.m. Eastern Time on January 15, 2018 and can be accessed by
dialing (844) 512-2921 and entering replay pin number 1227500. A
replay of the webcast will remain available on the website for 60
days.
Non-GAAP Financial
Measures
The Company reports and discusses its operating results using
financial measures consistent with accounting principles generally
accepted in the United States of America (“GAAP”). To supplement
its presentation, the Company discloses certain financial measures
that may be considered non-GAAP financial measures, such as
Leadership Brand net sales, adjusted operating income, adjusted
operating margin, adjusted effective tax rate, adjusted income,
adjusted diluted earnings per share, EBITDA and adjusted EBITDA,
which are presented in accompanying tables to this press release
along with a reconciliation of these financial measures to their
corresponding GAAP-based measures presented in the Company’s
consolidated statements of operations. All references to our
continuing operations exclude the Nutritional Supplements
segment.
About Helen of Troy
Limited
Helen of Troy Limited (NASDAQ, NM: 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®, Febreze®, Revlon®, Pro Beauty Tools®,
Sure®, Pert®, Infusium23®, Brut®, Ammens®, Hot Tools®, and Bed
Head®. 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.hotus.com/
Forward Looking Statements
Certain written and oral statements made by our Company and
subsidiaries of our 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 we expect or
anticipate 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 our current
expectations and various assumptions. We believe there is a
reasonable basis for our expectations and assumptions, but there
can be no assurance that we will realize our expectations or that
our assumptions will prove correct. Forward-looking statements are
subject to risks that could cause them to differ materially from
actual results. Accordingly, we caution 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
28, 2017 and in our other filings with the SEC. Investors are urged
to refer to the risk factors referred to above for a description of
these risks. Such risks include, among others, our ability to
deliver products to our 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,
our relationships with key customers and licensors, our dependence
on the strength of retail economies and vulnerabilities to any
prolonged economic downturn, our 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, our recent and future
acquisitions or divestitures, including our ability to realize
anticipated cost savings, synergies and other benefits along with
our 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, foreign
currency exchange rate fluctuations, disruptions in U.S., U.K.,
Euro zone, and other international credit markets, risks associated
with weather conditions, the duration and severity of the cold and
flu season and other related factors, our 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
geographic concentration and peak season capacity of certain U.S.
distribution facilities increases our exposure to significant
shipping disruptions and added shipping and storage costs, our
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, our
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 our liquidity as a result
of changes to capital market conditions and other constraints or
events that impose constraints on our cash resources and ability to
operate our business, the costs, complexity and challenges of
upgrading and managing our global information systems, the risks
associated with information security breaches, the risks associated
with product recalls, product liability, other claims, and related
litigation against us, 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, financial regulation, transportation policy and
infrastructure policy along with the costs and complexities of
compliance with such laws, and our ability to continue to avoid
classification as a controlled foreign corporation. We undertake 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
Consolidated Condensed Statements of
Operations
(Unaudited)
(in thousands, except per share
data)
Three Months Ended November
30, 2017 2016 Sales revenue, net $ 453,045 100.0
% $ 444,414 100.0 % Cost of goods sold 251,271 55.5 %
250,199 56.3 % Gross profit 201,774 44.5 % 194,215 43.7 %
Selling, general, and administrative expense ("SG&A") 133,894
29.6 % 130,896 29.5 % Asset impairment charges 82,227 18.1 % - - %
Restructuring charges(4) 1,283 0.3 % - - % Operating
income (loss) (15,630) (3.4) % 63,319 14.2 %
Nonoperating income, net 34 - % 106 - % Interest expense
(3,619) (0.8) % (3,625) (0.8) % Income (loss) before income
taxes (19,215) (4.2) % 59,800 13.5 % Income tax expense
11,221 2.5 % 2,188 0.5 % Net income (loss) $ (30,436)
(6.7) % $ 57,612 13.0 % Diluted earnings (loss) per share $
(1.12) $ 2.07 Weighted average shares of common stock used
in computingdiluted earnings (loss) per share 27,113 27,802
Nine Months Ended November 30, 2017
2016 Sales revenue, net $ 1,191,112 100.0 % $ 1,160,522
100.0 % Cost of goods sold 664,956 55.8 % 650,912
56.1 % Gross profit 526,156 44.2 % 509,610 43.9 % Selling,
general, and administrative expense ("SG&A") 387,332 32.5 %
378,506 32.6 % Asset impairment charges 136,297 11.4 % 7,400 0.6 %
Restructuring charges(4) 1,283 0.1 % - - % Operating
income 1,244 0.1 % 123,704 10.7 % Nonoperating
income, net 281 - % 343 - % Interest expense (11,327) (1.0)
% (11,142) (1.0) % Income (loss) before income taxes (9,802)
(0.8) % 112,905 9.7 % Income tax expense 5,833 0.5 %
7,912 0.7 % Net income (loss) $ (15,635) (1.3) % $ 104,993
9.0 % Diluted earnings (loss) per share $ (0.58) $ 3.74
Weighted average shares of common stock used in
computingdiluted earnings (loss) per share 27,140 28,058
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Net Sales Revenue by Segment
(Unaudited)
(in thousands)
Three Months Ended
November 30, % of Sales Revenue, net 2017
2016 $ Change % Change 2017
2016 Sales revenue by segment, net Housewares $
128,017 $ 124,723 $ 3,294 2.6 % 28.3 % 28.1 % Health & Home
190,975 179,842 11,133 6.2 % 42.2 % 40.5 % Nutritional Supplements
29,336 32,163 (2,827) (8.8) % 6.5 % 7.2 % Beauty 104,717
107,686 (2,969) (2.8) % 23.1 % 24.2 % Total sales
revenue, net $ 453,045 $ 444,414 $ 8,631 1.9 % 100.0 % 100.0 %
Nine Months Ended November 30, % of Sales
Revenue, net 2017(3) 2016 $ Change
% Change 2017 2016 Sales revenue
by segment, net Housewares $ 341,165 $ 315,302 $ 25,863 8.2 % 28.6
% 27.2 % Health & Home 489,102 470,650 18,452 3.9 % 41.1 % 40.6
% Nutritional Supplements 92,212 101,215 (9,003) (8.9) % 7.7 % 8.7
% Beauty 268,633 273,355 (4,722) (1.7) % 22.6
% 23.6 % Total sales revenue, net $ 1,191,112 $ 1,160,522 $ 30,590
2.6 % 100.0 % 100.0 %
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Leadership Brand Net Sales
Revenue(1)
(Unaudited)
(in thousands)
Three Months Ended November 30,
Nine Months Ended November 30, 2017
2016 2017 2016 Leadership Brand sales revenue,
net(2) $ 329,884 $ 310,121 $ 843,169 $ 785,788 All other sales
revenue, net 123,161 134,293 347,943
374,734 Total sales revenue, net $ 453,045 $ 444,414 $ 1,191,112 $
1,160,522
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Consolidated and Segment Net Sales,
Operating Margin and Adjusted Operating Margin
(non-GAAP)(1)
(Unaudited)
(in thousands)
Three Months Ended November 30,
Housewares Health & Home
Nutritional
Supplements
Beauty Total Fiscal 2017 sales revenue,
net $ 124,723 $ 179,842 $ 32,163 $ 107,686 $ 444,414 Core business
3,074 9,323 (2,827) (3,731) 5,839 Impact of foreign currency
220 1,810 - 762 2,792 Change in sales
revenue, net 3,294 11,133 (2,827)
(2,969) 8,631 Fiscal 2018 sales revenue, net $ 128,017 $
190,975 $ 29,336 $ 104,717 $ 453,045 Total net sales revenue
growth 2.6 % 6.2 % (8.8) % (2.8) % 1.9 % Core business 2.5 % 5.2 %
(8.8) % (3.5) % 1.3 % Impact of foreign currency 0.2 % 1.0 % - %
0.7 % 0.6 % Operating margin (GAAP) Third quarter fiscal
2018 23.4 % 14.6 % (284.7) % 9.6 % (3.4) % Third quarter fiscal
2017 23.4 % 11.2 % (0.2) % 13.0 % 14.2 % Adjusted operating margin
(non-GAAP) Third quarter fiscal 2018 25.0 % 16.9 % 3.6 % 13.0 %
17.4 % Third quarter fiscal 2017 24.5 % 13.7 % 5.8 % 15.3 % 16.5 %
Nine Months Ended November 30,
Housewares Health & Home
Nutritional
Supplements
Beauty Total Fiscal 2017 sales revenue,
net $ 315,302 $ 470,650 $ 101,215 $ 273,355 $ 1,160,522 Core
business 20,043 17,364 (9,003) (5,025) 23,379 Impact of foreign
currency (328) 1,088 - 303 1,063 Acquisitions(3) 6,148
- - - 6,148 Change in sales revenue,
net 25,863 18,452 (9,003) (4,722)
30,590 Fiscal 2018 sales revenue, net $ 341,165 $ 489,102 $
92,212 $ 268,633 $ 1,191,112 Total net sales revenue growth
8.2 % 3.9 % (8.9) % (1.7) % 2.6 % Core business 6.4 % 3.7 % (8.9) %
(1.8) % 2.0 % Impact of foreign currency (0.1) % 0.2 % - % 0.1 %
0.1 % Acquisitions 1.9 % - % - % - % 0.5 % Operating Margin
(GAAP) Year-to-Date Fiscal 2018 21.0 % 10.3 % (150.1) % 6.7 % 0.1 %
Year-to-Date Fiscal 2017 21.9 % 8.3 % (6.5) % 8.1 % 10.7 % Adjusted
Operating Margin (non-GAAP) Year-to-Date Fiscal 2018 22.8 % 13.3 %
0.4 % 11.2 % 14.5 % Year-to-Date Fiscal 2017 23.3 % 11.7 % 4.8 %
11.9 % 14.3 %
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Selected Consolidated Balance Sheet,
Cash Flow and Liquidity Information
(Unaudited)
(in thousands)
November 30, 2017 2016 Balance
Sheet: Cash and cash equivalents $ 21,157 $ 16,780 Receivables, net
302,390 289,943 Inventory, net 285,594 301,088 Total assets,
current 622,646 620,062 Total assets 1,774,895 1,889,077 Total
liabilities, current 359,126 327,503 Total long-term liabilities
431,359 581,696 Total debt 426,191 564,902 Stockholders' equity
984,410 979,878 Liquidity: Working capital $ 263,520 $
292,559
Nine Months Ended November 30, 2017
2016 Cash Flow: Depreciation and amortization $ 32,362 $
33,323 Net cash provided by operating activities 107,629 139,140
Capital and intangible asset expenditures 19,854 14,989 Payments to
acquire businesses, net of cash received - 209,258 Net debt
repayments 60,400 55,800 Payments for repurchases of common stock
29,158 75,000
SELECTED OTHER DATA
Reconciliation of Non-GAAP Financial
Measures – GAAP Operating Income (Loss)
to Adjusted Operating Income
(non-GAAP)(1)
(Unaudited)
(in thousands)
Three Months Ended November 30, 2017
Housewares Health & Home
Nutritional
Supplements
Beauty Total Operating income (loss), as
reported GAAP) $ 29,982 23.4 % $ 27,897 14.6 % $
(83,521) (284.7) % $ 10,012 9.6 % $ (15,630) (3.4) %
Asset impairment charges - - % - - % 82,227 280.3 % - - % 82,227
18.1 % Restructuring charges(4) - - % - - %
118 0.4 % 1,165 1.1 % 1,283 0.3 % Subtotal 29,982
23.4 % 27,897 14.6 % (1,176) (4.0) % 11,177 10.7 % 67,880 15.0 %
Amortization of intangible assets 489 0.4 % 2,797 1.5 % 1,770 6.0 %
1,374 1.3 % 6,430 1.4 % Non-cash share-based compensation
1,527 1.2 % 1,632 0.9 % 467 1.6 % 1,025 1.0 %
4,651 1.0 % Adjusted operating income (non-GAAP) $ 31,998
25.0 % $ 32,326 16.9 % $ 1,061 3.6 % $ 13,576 13.0 % $ 78,961 17.4
%
Three Months Ended November 30, 2016
Housewares Health & Home
NutritionalSupplements Beauty Total
Operating income (loss), as reported (GAAP) $ 29,223 23.4 % $
20,155 11.2 % $ (80) (0.2) % $ 14,021 13.0 % $ 63,319 14.2 %
Amortization of intangible assets 658 0.5 % 3,546 2.0 % 1,571 4.9 %
1,424 1.3 % 7,199 1.6 % Non-cash share-based compensation
671 0.5 % 872 0.5 % 369 1.1 % 991 0.9 %
2,903 0.7 % Adjusted operating income (non-GAAP) $ 30,552 24.5 % $
24,573 13.7 % $ 1,860 5.8 % $ 16,436 15.3 % $ 73,421 16.5 %
Nine Months Ended November 30, 2017
Housewares(3) Health & Home
NutritionalSupplements Beauty Total
Operating income (loss), as reported (GAAP) $ 71,601 21.0 % $
50,187 10.3 % $ (138,413) (150.1) % $ 17,869 6.7 % $ 1,244 0.1 %
Asset impairment charges - - % - - % 132,297 143.5 % 4,000 1.5 %
136,297 11.4 % Restructuring charges(4) - - % - - % 118 0.4 % 1,165
1.1 % 1,283 0.3 % TRU bankruptcy charge 956 0.3 %
2,640 0.5 % - - % - - % 3,596 0.3 % Subtotal
72,557 21.3 % 52,827 10.8 % (5,998) (6.5) % 23,034 8.6 % 142,420
12.0 % Amortization of intangible assets 1,618 0.5 % 8,373 1.7 %
5,380 5.8 % 4,207 1.6 % 19,578 1.6 % Non-cash share-based
compensation 3,579 1.0 % 3,792 0.8 % 980 1.1 %
2,779 1.0 % 11,130 0.9 % Adjusted operating income
(non-GAAP) $ 77,754 22.8 % $ 64,992 13.3 % $ 362 0.4 % $ 30,020
11.2 % $ 173,128 14.5 %
Nine Months Ended November
30, 2016 Housewares Health & Home
Nutritional
Supplements
Beauty Total Operating income
(loss), as reported GAAP) $ 68,956 21.9 % $ 39,156 8.3 % $ (6,581)
(6.5) % $ 22,173 8.1 % $ 123,704 10.7 % Asset impairment charges -
- % - - % 5,000 4.9 % 2,400 0.9 % 7,400 0.6 % Patent litigation
charge - - % 1,468 0.3 % - - % - - %
1,468 0.1 % Subtotal 68,956 21.9 % 40,624 8.6 % (1,581)
(1.6) % 24,573 9.0 % 132,572 11.4 % Amortization of intangible
assets 1,986 0.6 % 10,626 2.3 % 4,713 4.7 % 4,300 1.6 % 21,625 1.9
% Non-cash share-based compensation 2,404 0.8 % 3,787
0.8 % 1,734 1.7 % 3,736 1.4 % 11,661 1.0 %
Adjusted operating income (non-GAAP) $ 73,346 23.3 % $ 55,037 11.7
% $ 4,866 4.8 % $ 32,609 11.9 % $ 165,858 14.3 %
SELECTED OTHER DATA
Reconciliation of Non-GAAP Financial
Measures - EBITDA
(Earnings (Loss) Before Interest,
Taxes, Depreciation and Amortization) and Adjusted
EBITDA(1)
(Unaudited)
(in thousands)
Three Months Ended November 30,
Nine Months Ended November 30, 2017 2016
2017 2016 Net income (loss), as reported (GAAP) $
(30,436) $ 57,612 $ (15,635) $ 104,993 Interest expense, net
3,604 3,604 11,221 11,052 Income tax expense 11,221 2,188
5,833 7,912 Depreciation and amortization, excluding
amortized interest 10,760 11,225 32,362
33,323 EBITDA (non-GAAP) (4,851) 74,629 33,781 157,280
Add: Non-cash asset impairment charges 82,227 - 136,297
7,400 Restructuring charges(4) 1,283 - 1,283 - TRU
bankruptcy charge - - 3,596 - Patent litigation charge - - -
1,468 Non-cash share-based compensation 4,651
2,903 11,130 11,661 Adjusted EBITDA (non-GAAP)
$ 83,310 $ 77,532 $ 186,087 $ 177,809
SELECTED OTHER DATA
Reconciliation of Non-GAAP Financial
Measures - EBITDA
(Earnings (Loss) Before Interest,
Taxes, Depreciation and Amortization) and Adjusted EBITDA by
Segment(1)
(Unaudited)
(in thousands)
Three Months Ended November
30, 2017 Housewares Health & Home
Nutritional
Supplements
Beauty Total Operating income (loss), as reported
(GAAP) $ 29,982 $ 27,897 $ (83,521) $ 10,012 $ (15,630)
Depreciation and amortization, excluding amortized interest 1,444
4,232 2,374 2,710 10,760 Nonoperating income, net - -
- 19 19 EBITDA (non-GAAP) 31,426 32,129
(81,147) 12,741 (4,851) Add: Non-cash asset impairment charges - -
82,227 - 82,227 Restructuring charges(4) - - 118 1,165 1,283
Non-cash share-based compensation 1,527 1,632
467 1,025 4,651 Adjusted EBITDA (non-GAAP) $ 32,953 $
33,761 $ 1,665 $ 14,931 $ 83,310
Three Months Ended
November 30, 2016 Housewares Health & Home
Nutritional
Supplements
Beauty Total Operating income (loss), as reported
(GAAP) $ 29,223 $ 20,155 $ (80) $ 14,021 $ 63,319 Depreciation and
amortization, excluding amortized interest 1,429 5,221 2,108 2,467
11,225 Nonoperating income, net - - -
85 85 EBITDA (non-GAAP) 30,652 25,376 2,028 16,573 74,629
Add: Non-cash share-based compensation 671 872
369 991 2,903 Adjusted EBITDA (non-GAAP) $ 31,323 $
26,248 $ 2,397 $ 17,564 $ 77,532
Nine Months Ended November 30, 2017 Housewares
Health & Home
Nutritional
Supplements
Beauty Total Operating income (loss), as reported
(GAAP) $ 71,601 $ 50,187 $ (138,413) $ 17,869 $ 1,244 Depreciation
and amortization, excluding amortized interest 4,290 12,553 7,223
8,296 32,362 Nonoperating income, net - - -
175 175 EBITDA (non-GAAP) 75,891 62,740 (131,190)
26,340 33,781 Add: Non-cash asset impairment charges - - 132,297
4,000 136,297 Restructuring charges(4) - - 118 1,165 1,283 TRU
bankruptcy charge 956 2,640 - - 3,596 Non-cash asset share-based
compensation 3,579 3,792 980 2,779
11,130 Adjusted EBITDA (non-GAAP) $ 80,426 $ 69,172 $ 2,205
$ 34,284 $ 186,087
Nine Months Ended November 30,
2016 Housewares Health & Home
Nutritional
Supplements
Beauty Total Operating income (loss), as reported
(GAAP) $ 68,956 $ 39,156 $ (6,581) $ 22,173 $ 123,704 Depreciation
and amortization, excluding amortized interest 4,200 15,738 6,242
7,143 33,323 Nonoperating income, net - - -
253 253 EBITDA (non-GAAP) 73,156 54,894 (339) 29,569
157,280 Add: Non-cash asset impairment charges - - 5,000 2,400
7,400 Patent litigation charge - 1,468 - - 1,468 Non-cash asset
share-based compensation 2,404 3,787 1,734
3,736 11,661 Adjusted EBITDA (non-GAAP) $ 75,560 $
60,149 $ 6,395 $ 35,705 $ 177,809
SELECTED OTHER DATA
Effective Tax Rate (GAAP) and Adjusted
Effective Tax Rate (Non-GAAP)(1)
(Unaudited)
Nine
Discontinued Continuing Months Outlook for
the Operations Operations Ended Balance
of Outlook Outlook Outlook November
30, the Fiscal Year for Fiscal Year for Fiscal
Year for Fiscal Year 2017 (Three Months)
2018 2018 2018 Effective tax rate, as reported
(GAAP) (59.5) % (78.6) % - (76.6) % (83.0) % - (82.5) % 40.0 % -
40.0 % 10.4 % - 10.9 % Impact of divestiture 0.0 % (32.4) %
- (32.4) % (42.5) % - (42.5) % 0.0 % - 0.0 % (4.3) % - (4.3) %
Asset impairment charges 64.1 % 118.2 % - 118.2 % 130.8 % -
130.8 % (0.6) % - (0.6) % 0.1 % - 0.1 % Restructuring
charges 0.0 % 0.0 % - 0.0 % 0.0 % - 0.0 % 0.0 % - 0.0 % 0.0 % - 0.0
% TRU Bankruptcy charge 0.0 % 0.0 % - 0.0 % 0.0 % - 0.0 %
0.0 % - 0.0 % 0.0 % - 0.0 %
Subtotal 4.7 % 7.1 % - 9.1 % 5.3 % -
5.8 % 39.4 % - 39.4 % 6.2 % - 6.7 % Amortization of
intangible assets 1.1 % 0.8 % - 0.8 % 1.0 % - 1.0 % 1.1 % - 1.1 %
(0.1) % - (0.1) % Non-cash share based compensation 0.7 %
0.5 % - 0.5 % 0.7 % - 0.7 % 0.0 % - 0.0 % 0.7 % - 0.7 %
Adjusted
effective tax rate 6.5 % 8.4 % - 10.4 % 7.0 % - 7.5 % 40.5 % - 40.5
% 6.8 % - 7.2 %
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Reconciliation of GAAP Net Income and
Earnings (Loss) Per Share to Adjusted Income and Adjusted Earnings
Per Share (non-GAAP)(1)
(Unaudited)
(dollars in thousands, except per share
data)
Three Months Ended November 30, 2017
Income (Loss) Diluted Earnings (Loss) Per
Share (in thousands, except per share data) Before
Tax Tax Net of Tax Before
Tax Tax Net of Tax As reported
(GAAP)
$ (19,215) $ 11,221 $
(30,436) $ (0.71) $ 0.41
$ (1.12) Asset impairment charges
82,227 (6,380) 88,607 3.02
(0.23) 3.25 Restructuring charges(4)
1,283
69 1,214 0.05 - 0.04 Subtotal
64,295 4,910 59,385 2.36 0.18
2.18 Amortization of intangible assets
6,430
853 5,577 0.24 0.03 0.20
Non-cash share-based compensation
4,651
781 3,870 0.17
0.03 0.14 Adjusted (non-GAAP)
$
75,376 $ 6,544 $ 68,832 $
2.76 $ 0.24 $ 2.52
Weighted average shares of common stock used in computing
diluted earnings (loss) per share, as reported
27,113
Weighted average shares of common stock used in computing adjusted
diluted earnings per share (non-GAAP)
27,267
Three Months Ended November 30, 2016 Income
Diluted Earnings Per Share (in thousands, except
per share data) Before Tax Tax
Net of Tax Before Tax Tax Net
of Tax As reported (GAAP)
$ 59,800 $ 2,188 $ 57,612 $
2.15 $ 0.08 $ 2.07 Amortization of intangible assets 7,199
1,009 6,190 0.26 0.04 0.22 Non-cash share-based compensation
2,903 706 2,197 0.10 0.02 0.08
Adjusted (non-GAAP)
$ 69,902 $ 3,903 $ 65,999 $ 2.51 $ 0.14
$ 2.37 Weighted average shares of common stock used in
computing diluted earnings per share, as reported 27,802 Weighted
average shares of common stock used in computing adjusted diluted
earnings per share (non-GAAP)
27,802
Nine Months Ended
November 30, 2017 Income (Loss) Diluted
Earnings (Loss) Per Share (in thousands, except per share
data) Before Tax Tax Net of
Tax Before Tax Tax Net of
Tax As reported (GAAP)
$ (9,802) $
5,833 $ (15,635) $ (0.36)
$ 0.21 $ (0.58) Asset impairment
charges
136,297 3 136,294 4.99 -
4.99 Restructuring charges(4)
1,283 69
1,214 0.05 - 0.04 TRU bankruptcy charge
3,596 204 3,392
0.13 0.01 0.12 Subtotal
131,374
6,109 125,265 4.81 0.22 4.59
Amortization of intangible assets
19,578 2,625
16,953 0.72 0.10 0.62 Non-cash
share-based compensation
11,130 1,862
9,268 0.41 0.07
0.34 Adjusted (non-GAAP)
$ 162,082 $
10,596 $ 151,486 $ 5.94 $
0.39 $ 5.55 Weighted average shares of
common stock used in computing diluted earnings (loss) per share,
as reported
27,140 Weighted average shares of common stock
used in computing adjusted diluted earnings per share (non-GAAP)
27,304
Nine Months Ended November
30, 2016 Income Diluted Earnings Per
Share (in thousands, except per share data) Before
Tax Tax Net of Tax Before
Tax Tax Net of Tax As reported
(GAAP) $ 112,905 $ 7,912 $ 104,993 $ 4.02 $ 0.28 $ 3.74
Asset impairment charges 7,400 2,303 5,097 0.26 0.08 0.18 Patent
litigation charge 1,468 4 1,464 0.05
- 0.05 Subtotal 121,773 10,219 111,554 4.34 0.36 3.98
Amortization of intangible assets 21,625 3,005 18,620 0.77 0.11
0.66 Non-cash share-based compensation 11,661 2,920
8,741 0.42 0.11 0.31 Adjusted
(non-GAAP) $ 155,059 $ 16,144 $ 138,915 $ 5.53 $ 0.58 $ 4.95
Weighted average shares of common stock used in computing diluted
earnings per share, as reported 28,058 Weighted average shares of
common stock used in computing adjusted diluted earnings per share
(non-GAAP)
28,058
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Reconciliation of Fiscal Year 2018
Outlook for GAAP Diluted Earnings (Loss) Per Share
to Adjusted Diluted Earnings Per Share
(non-GAAP) (1)
(Unaudited)
Fiscal Year Ended February
28, 2018
Nine Months
Ended
November 30,
Outlook for the Balance of the Fiscal Year
(Three Months) Outlook for the Fiscal Year
(Twelve Months)
Discontinued
Operations
Continuing
Operations
Diluted earnings (loss) per share, as reported (GAAP) $ (0.58) $
2.93 - $ 3.19 $ 2.35 - $ 2.61 $ (3.07) - $ (3.02) $ 5.42 - $ 5.63
Asset impairment charges, net of tax 4.99 (1.93) - (1.93) 3.06 -
3.06 2.93 - 2.93 0.13 - 0.13 Restructuring charges, net of tax(4)
0.04 0.0 - 0.0 0.04 - 0.04 0.0 - 0.0 0.04 - 0.04 TRU bankruptcy
charge, net of tax 0.12 0.0 - 0.0 0.12
- 0.12 0.0 - 0.0 0.12 - 0.12
Subtotal 4.59 1.00 - 1.26 5.59 - 5.85 (0.14) - (0.09) 5.73 - 5.94
Amortization of intangible assets, net of tax 0.62 0.20 - 0.21 0.82
- 0.83 0.14 - 0.14 0.68 - 0.69 Non-cash share-based compensation,
net of tax 0.34 0.10 - 0.13 0.44 -
0.47 0.0 - 0.0 0.44 - 0.47
Adjusted diluted earnings per share (non-GAAP) $ 5.55 $ 1.30 - $
1.60 $ 6.85 - $ 7.15 $ 0.0 - $ 0.05 $ 6.85 - $ 7.10
HELEN OF TROY LIMITED AND
SUBSIDIARIES
Consolidated Condensed Statements of
Income, and Reconciliation of Non-GAAP Financial Measures –
Adjusted Operating Income, Adjusted Diluted Earnings (Loss) Per
Share(1)
(Unaudited)
(in thousands, except per share
data)
Three Months Ended November 30, 2017 2016
As Reported Adjusted As Reported
Adjusted (GAAP) Adjustments
(Non-GAAP) (GAAP) Adjustments
(Non-GAAP) Sales revenue, net $ 453,045 100.0 % $ - $
453,045 100.0 % $ 444,414 100.0 % $ - $ 444,414 100.0 % Cost of
goods sold 251,271 55.5 % - 251,271 55.5 %
250,199 56.3 % - 250,199 56.3 % Gross
profit 201,774 44.5 % - 201,774 44.5 % 194,215 43.7 % - 194,215
43.7 % SG&A 133,894 29.6 % (6,430) (5) 122,813 27.1 %
130,896 29.5 % (7,199) (5) 120,794 27.2 % (4,651) (6) (2,903) (6)
Asset impairment charges 82,227 18.1 % (82,227) - - % - - % - - - %
Restructuring charges 1,283 0.3 % (1,283) (4)
- - % - - % - - - % Operating income
(Loss) (15,630) (3.4) % 94,591 78,961 17.4 %
63,319 14.2 % 10,102 73,421 16.5 %
Nonoperating income, net 34 - % - 34 0.0 % 106 - % - 106 - %
Interest expense (3,619) (0.8) % - (3,619)
(0.8) % (3,625) (0.8) % - (3,625) (0.8)
% Income (loss) before income taxes (19,215) (4.2) % 94,591 75,376
16.6 % 59,800 13.5 % 10,102 69,902 15.7 % Income tax expense
11,221 2.5 % (4,677) 6,544 1.4 % 2,188
0.5 % 1,715 3,903 0.9 % Net income (loss) $
(30,436) (6.7) % $ 99,268 $ 68,832 15.2 % $ 57,612 13.0 % $ 8,387
$ 65,999 14.9 % Diluted earnings (loss) per share $
(1.12) $ 3.64 $ 2.52 $ 2.07 $ 0.30 $ 2.37 Weighted average
shares of commonstock used in computing dilutedearnings (loss) per
share 27,113 27,267 27,802 27,802
Nine Months
Ended November 30, 2017 2016 As Reported
Adjusted As Reported Adjusted (GAAP)
Adjustments (Non-GAAP) (GAAP)
Adjustments (Non-GAAP) Sales revenue, net $
1,191,112 100.0 % $ - $ 1,191,112 100.0 % $ 1,160,522 100.0 % $ - $
1,160,522 100.0 % Cost of goods sold 664,956 55.8 % -
664,956 55.8 % 650,912 56.1 % - 650,912
56.1 % Gross profit 526,156 44.2 % - 526,156 44.2 % 509,610 43.9 %
- 509,610 43.9 % SG&A 387,332 32.5 % (3,596) (7) 353,028 29.6 %
378,506 32.6 % (1,468) (8) 343,752 29.6 % (19,578) (5) (21,625) (5)
(11,130) (6) (11,661) (6) Asset impairment charges 136,297 11.4 %
(136,297) - - % 7,400 0.6 % (7,400) - - % Restructuring charges
1,283 0.1 % (1,283) (4) - - % - - %
- - - % Operating income 1,244 0.1 %
171,884 173,128 14.5 % 123,704 10.7 % 42,154
165,858 14.3 % Nonoperating income, net 281 - % - 281
- % 343 - % - 343 - % Interest expense (11,327) (1.0) %
- (11,327) (1.0) % (11,142) (1.0) % -
(11,142) (1.0) % Income (loss) before income taxes (9,802)
(0.8) % 171,884 162,082 13.6 % 112,905 9.7 % 42,154 155,059 13.4 %
Income tax expense 5,833 0.5 % 4,763
10,596 0.9 % 7,912 0.7 % 8,232 16,144 1.4 %
Net income (loss) $ (15,635) (1.3) % $ 167,121 $ 151,486 12.7 % $
104,993 9.0 % $ 33,922 $ 138,915 12.0 % Diluted earnings
(loss) per share $ (0.58) $ 6.13 $ 5.55 $ 3.74 $ 1.21 $ 4.95
Weighted average shares of commonstock used in computing
dilutedearnings (loss) per share 27,140 27,304 28,058 28,058
HELEN OF TROY LIMITED AND SUBSIDIARIES
Notes to Press Release
(1) This press release contains non-GAAP financial measures.
Leadership Brand net sales revenue, adjusted operating income,
adjusted operating margin, adjusted effective tax rate, adjusted
income, adjusted diluted earnings per share, EBITDA, and adjusted
EBITDA (“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, we are providing the preceding tables that
reconcile these measures to their corresponding GAAP-based measures
presented in our Consolidated Condensed Statements of Operations 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. We
believe 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 such charges on net income and earnings per share. We also
believe that these non-GAAP measures facilitate a more direct
comparison of the Company’s performance with its competitors. We
further believe 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 financial measures are used by
management for measuring and evaluating the Company’s performance.
The Company further believes that the items excluded from certain
non-GAAP measures do not accurately reflect the underlying
performance of its continuing operations for the periods in which
they are incurred, even though some of these excluded items may be
incurred and reflected in the Company’s GAAP financial results in
the foreseeable future. The material limitation associated with the
use of the non-GAAP financial measures is that the non-GAAP
measures do not reflect the full economic impact of the Company’s
activities. These non-GAAP measures are not prepared in accordance
with GAAP, are not an alternative to GAAP financial information,
and may be calculated differently than non-GAAP financial
information disclosed by other companies. Accordingly, undue
reliance should not be placed on non-GAAP information.
(2) Leadership Brand net sales consists of revenue from the OXO,
Honeywell, Braun, PUR, Hydro Flask, Vicks, and Hot Tools
brands.
(3) The Housewares segment includes approximately one-half month
of incremental operating results from Hydro Flask, which was
acquired on March 18, 2016.
(4) Charges incurred in conjunction with the Company’s
restructuring plan (Project Refuel) for the three- and nine-months
ended November 30, 2017, with no comparable charges in the same
periods last year.
(5) Amortization of intangible assets.
(6) Non-cash share-based compensation.
(7) Charge related to the bankruptcy of Toys “R” Us, Inc.
(TRU).
(8) Patent litigation charge.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180108005536/en/
Investors:Helen of Troy LimitedAnne Rakunas,
915-225-4841Director, External CommunicationsorICR, Inc.Allison
Malkin, 203-682-8200Sr. Managing Director
Helen of Troy (NASDAQ:HELE)
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