Consolidated Net Sales Growth of 14.3%; Core
Net Sales Growth of 17.2% GAAP Diluted EPS of $1.64; Core Adjusted
Diluted EPS Growth of 76.8%
Full Year Core Net Sales Growth and Adjusted
Diluted EPS Growth Above Phase II Long-Term Targets On Top of
Fiscal 2021 Elevated Base
Initiates Fiscal 2023 Outlook: Consolidated
Net Sales Growth of 6.8%-8.8%; Core Net Sales Growth of 8.5%-10.5%
Consolidated Diluted EPS of $9.92-$10.38 Core Adjusted Diluted EPS
of $12.73-$13.03; Growth of 4.5%-7.0%
Helen of Troy Limited (NASDAQ: HELE), designer, developer
and worldwide marketer of consumer brand-name home, outdoor,
health, wellness, and beauty products, today reported results for
the three-month period ended February 28, 2022.
In the fourth quarter of fiscal 2022, the Company changed the
names of two of its segments to align with the growth in certain
product offerings and brands. The previously named “Housewares”
segment was changed to “Home & Outdoor,” and the previously
named “Health & Home” segment was changed to “Health &
Wellness.” There were no changes to the products or brands included
within the segments as part of these name changes.
Executive Summary – Fourth Quarter of
Fiscal 2022 Compared to Fiscal 2021 and Fiscal 2020
- Consolidated net sales revenue of $582.0 million, an increase
of 14.3% from fiscal 2021 and an increase of 31.6% from fiscal
2020
- Core net sales increase of 17.2% from fiscal 2021 and an
increase of 37.1% from fiscal 2020
- GAAP diluted EPS of $1.64, compared to $0.90 for the same
period last year and $(0.13) in fiscal 2020
- Non-GAAP Core adjusted diluted EPS of $2.51, an increase of
76.8% from fiscal 2021 and an increase of 45.1% from fiscal
2020
- Non-GAAP adjusted diluted EPS of $2.51, an increase of 59.9%
from fiscal 2021 and an increase of 33.5% from fiscal 2020
- Net cash provided by operating activities of $145.9
million
Executive Summary - Fiscal 2022
Compared to Fiscal 2021 and Fiscal 2020
- Consolidated net sales revenue of $2.22 billion, an increase of
5.9% from fiscal 2021 and an increase of 30.2% from fiscal
2020
- Core business net sales growth of 8.4% from fiscal 2021 and an
increase of 35.5% from fiscal 2020
- GAAP diluted EPS of $9.17, compared to $10.08 for the same
period last year and $6.02 in fiscal 2020
- Non-GAAP Core adjusted diluted EPS of $12.18, an increase of
10.4% from fiscal 2021 and an increase of 39.7% from fiscal
2020
- Non-GAAP adjusted diluted EPS of $12.36, an increase of 6.1%
from fiscal 2021 and an increase of 32.9% from fiscal 2020
- Net cash provided by operating activities of $140.8 million,
compared to $314.1 million for the same period last year, primarily
due to cash used for inventory purchases
Julien R. Mininberg, Chief Executive Officer, stated: “Our
fourth quarter results significantly outperformed our expectations
in each business segment, delivering an exceptionally strong finish
to our fiscal year. We are very proud that fiscal 2022 marks
another year of top and bottom line growth well ahead of our Phase
II targets, despite the global pandemic, supply chain disruption,
inflation, the EPA matter, and the elevated base.”
Mr. Mininberg continued: “Looking back over the first three
years of Phase II, core net sales and core adjusted diluted EPS
increased by 50% and 68%, respectively. We believe our performance
so far in Phase II illustrates the strength of our strategic
choices, the power of our diversified portfolio, the return on
investments in our Leadership Brands and shared services, and the
winning culture and organization we have built. We are proud that
our results contributed to total shareholder returns significantly
ahead of our proxy peer group since the start of Phase II, and all
through Phase I.”
Mr. Mininberg concluded: “As we now begin the fourth year of
Phase II, we are pleased to be able to provide our outlook for
continued top and bottom-line growth in fiscal 2023. We expect our
recent acquisitions of Osprey and Curlsmith will drive revenue and
adjusted EPS growth and further expand margins. Our outlook
includes our current assessment of the impact from continued
widespread inflation on input costs and consumer buying power,
further supply chain disruption, and expected rising interest
rates. Our outlook also reflects the work we have done with our
supply chain partners, cost mitigation measures, pre-negotiated sea
freight contracts, and price increases. We will continue to make
thoughtful spending choices that support the most important
opportunities for our brands, cost efficiency projects, new
capabilities, and further scalability for our shared services. We
believe this approach will help us continue creating incremental
value for shareholders in the remaining two years of Phase II and
beyond.”
Three Months Ended Last Day of
February,
(in thousands)
Home & Outdoor
Health & Wellness
Beauty
Total
Fiscal 2021 sales revenue, net
$
162,463
$
228,623
$
118,289
$
509,375
Organic business (1)
24,683
(388
)
25,910
50,205
Impact of foreign currency
(672
)
(630
)
(631
)
(1,933
)
Acquisition (2)
24,373
—
—
24,373
Change in sales revenue, net
48,384
(1,018
)
25,279
72,645
Fiscal 2022 sales revenue, net
$
210,847
$
227,605
$
143,568
$
582,020
Total net sales revenue growth
(decline)
29.8
%
(0.4
)%
21.4
%
14.3
%
Organic business
15.2
%
(0.2
)%
21.9
%
9.9
%
Impact of foreign currency
(0.4
)%
(0.3
)%
(0.5
)%
(0.4
)%
Acquisition
15.0
%
—
%
—
%
4.8
%
Operating margin (GAAP)
Fiscal 2022
10.7
%
4.2
%
12.6
%
8.7
%
Fiscal 2021
10.0
%
(0.7
)%
8.5
%
4.8
%
Adjusted operating margin (non-GAAP)
Fiscal 2022
13.1
%
10.2
%
15.2
%
12.5
%
Fiscal 2021
11.7
%
0.7
%
18.9
%
8.4
%
Three Months Ended Last Day of February, % Change
(in thousands, except per share data) (unaudited)
2022
2021
2020
FY22/FY21
FY22/FY20
Consolidated net sales revenue
$
582,020
$
509,375
$
442,365
14.3
%
31.6
%
Core business net sales revenue (3)
578,141
493,458
421,640
17.2
%
37.1
%
Leadership Brand net sales revenue (4)
480,391
417,931
347,713
14.9
%
38.2
%
Online channel net sales revenue (5)
162,107
140,016
107,329
15.8
%
51.0
%
Consolidated Diluted EPS
$
1.64
$
0.90
($
0.13
)
82.2
%
* Consolidated Adjusted Diluted EPS (non-GAAP) (6)
2.51
1.57
1.88
59.9
%
33.5
%
Core Adjusted Diluted EPS (non-GAAP) (3) (6)
2.51
1.42
1.73
76.8
%
45.1
%
* Calculation is not meaningful.
Year Ended Last Day of
February, % Change (in thousands, except per share
data) (unaudited)
2022
2021
2020
FY22/FY21
FY22/FY20
Consolidated net sales revenue
$
2,223,355
$
2,098,799
$
1,707,432
5.9
%
30.2
%
Core business net sales revenue (3)
2,189,239
2,020,453
1,615,094
8.4
%
35.5
%
Leadership Brand net sales revenue (4)
1,810,249
1,706,545
1,360,059
6.1
%
33.1
%
Online channel net sales revenue (5)
531,114
538,191
407,230
(1.3
)%
30.4
%
Consolidated Diluted EPS
$
9.17
$
10.08
$
6.02
(9.0
)%
52.3
%
Consolidated Adjusted Diluted EPS (non-GAAP) (6)
12.36
11.65
9.30
6.1
%
32.9
%
Core Adjusted Diluted EPS (non-GAAP) (3) (6)
12.18
11.03
8.72
10.4
%
39.7
%
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”). 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.
Accordingly, the Company continued to classify the identified net
assets of the Latin America and Caribbean Personal Care businesses
as held for sale in its fiscal 2022 financial statements.
Subsequent to its fiscal 2022 year end, on March 25, 2022, the
Company completed the sale of the Latin America and Caribbean
Personal Care businesses to HRB Brands LLC, for $1.8 million in
cash.
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. Sales from the Latin America and Caribbean Personal Care
businesses are included in Non-Core business for all periods
presented and sales from the North America Personal Care business
are included in Non-Core business for all periods presented through
June 7, 2021.
Three Months Ended Last Day of
February,
(in thousands)
Home & Outdoor
Health & Wellness
Beauty
Total
Fiscal 2021 sales revenue, net
$
162,463
$
228,623
$
118,289
$
509,375
Core business (3)
48,384
(1,018
)
37,317
84,683
Non-Core business (Personal Care) (3)
—
—
(12,038
)
(12,038
)
Change in sales revenue, net
48,384
(1,018
)
25,279
72,645
Fiscal 2022 sales revenue, net
$
210,847
$
227,605
$
143,568
$
582,020
Total net sales revenue growth
(decline)
29.8
%
(0.4
)%
21.4
%
14.3
%
Core business
29.8
%
(0.4
)%
31.5
%
16.6
%
Non-Core business (Personal Care)
—
%
—
%
(10.2
)%
(2.4
)%
Consolidated Results - Fourth Quarter
Fiscal 2022 Compared to Fourth Quarter Fiscal 2021
- Consolidated net sales revenue increased $72.6 million, or
14.3% to $582.0 million compared to $509.4 million. The growth was
driven by an increase from Organic business of $50.2 million, or
9.9%, and from the acquisition of Osprey Packs, Inc. (“Osprey”) of
$24.4 million, or 4.8%. The Organic business increase primarily
reflects higher brick and mortar and online channel sales in the
Home & Outdoor and Beauty segments due primarily to strong
consumer demand, approximately $20 million of accelerated retailer
orders to improve inventory levels and in anticipation of price
increases, higher sales in the club and closeout channels, the
impact of customer price increases related to rising freight and
product costs, growth in consolidated international sales, and the
favorable comparative 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 sales in the Health & Wellness segment as a result of
stronger COVID-19 driven demand for healthcare and healthy living
products, primarily in thermometry and air filtration, in the
comparative prior year period, and a net sales revenue decline in
Non-Core business primarily due to the sale of the North America
Personal Care business during the second quarter of fiscal
2022.
- Consolidated gross profit margin decreased 2.6 percentage
points to 42.6%, compared to 45.2%. The decrease was primarily due
to the net dilutive impact of inflationary costs and related
customer price increases, EPA compliance costs of $4.0 million,
higher inventory obsolescence expense, and a less favorable channel
mix within the Beauty segment. These factors were partially offset
by a more favorable brand mix within the Home & Outdoor segment
and a favorable mix of more Home & Outdoor and Beauty segment
sales within consolidated net sales revenue.
- Consolidated selling, general and administrative expense
(“SG&A”) ratio decreased 4.7 percentage points to 34.0%,
compared to 38.7%. The decrease was primarily due to a decrease in
marketing expense and the favorable leverage impact of net sales
growth. These factors were partially offset by EPA compliance costs
of $7.4 million in the Health & Wellness segment, an increase
in annual incentive compensation expense, and higher outbound
freight costs.
- Consolidated operating income was $50.4 million, or 8.7% of net
sales revenue, compared to $24.5 million, or 4.8% of net sales
revenue. The increase in consolidated operating margin was
primarily due to a decrease in marketing expense in the Health
& Wellness segment, the favorable comparative impact of asset
impairment charges recorded in the prior year period and lower
marketing expense in the Beauty segment, lower distribution expense
and a more favorable brand mix in the Home & Outdoor segment,
favorable consolidated operating leverage, and a favorable mix of
more Home & Outdoor and Beauty segment sales within
consolidated net sales revenue. These factors were partially offset
by EPA compliance costs of $11.4 million, the net dilutive impact
of inflationary costs and related customer price increases,
increased inventory obsolescence expense, an increase in annual
incentive compensation expense, higher outbound freight costs, and
a less favorable channel mix within the Beauty segment.
- Income tax expense as a percentage of income before tax was
15.6%, compared to income tax benefit as a percentage of income
before tax of 2.7%. The year-over-year change was primarily due to
shifts in the mix of taxable income in the Company’s various tax
jurisdictions, higher taxes associated with the Company’s Macao
subsidiary, the comparative impact of tax benefits recognized on
impairment charges in the prior year period, and differences in the
Company’s fiscal 2021 actual year-to-date results as compared to
estimates used to calculate the estimated annual effective tax rate
for the Company’s fiscal 2021 third quarter results.
- Net Income was $39.8 million, compared to $22.2 million.
Diluted EPS was $1.64 compared to $0.90. The increase in diluted
EPS was primarily due to higher operating income in all segments
and lower weighted average diluted shares outstanding. These
factors were partially offset by an increase in the effective
income tax rate and higher interest expense.
- Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization) increased 61.9% to $78.7 million compared to
$48.6 million.
On an adjusted basis for the fourth quarters of fiscal 2022 and
2021, excluding acquisition-related expenses, asset impairment
charges, EPA compliance costs, restructuring charges, amortization
of intangible assets, and non-cash share-based compensation, as
applicable:
- Adjusted operating income increased $29.8 million, or 69.5%, to
$72.6 million, or 12.5% of net sales revenue, compared to $42.9
million, or 8.4% of net sales revenue. The 4.1 percentage point
increase in adjusted operating margin was primarily driven by a
decrease in marketing expense in the Health & Wellness and
Beauty segments, lower distribution expenses and a favorable brand
mix in the Home & Outdoor segment, favorable consolidated
operating leverage, and a favorable mix of more Home & Outdoor
and Beauty segment sales within consolidated net sales revenue.
These factors were partially offset by the net dilutive impact of
inflationary costs and related customer price increases, higher
inventory obsolescence expense, an increase in annual incentive
compensation expense, higher outbound freight costs, and a less
favorable channel mix within the Beauty segment.
- Adjusted income increased $22.1 million, or 56.9%, to $60.8
million, compared to $38.8 million. Adjusted diluted EPS increased
59.9% to $2.51, compared to $1.57. The increase in adjusted diluted
EPS was primarily due to higher adjusted operating income in the
Home & Outdoor and Health & Wellness segments and lower
weighted average diluted shares outstanding. These factors were
partially offset by lower adjusted operating income in the Beauty
segment, an increase in the effective income tax rate and higher
interest expense.
Segment Results - Fourth Quarter Fiscal
2022 Compared to Fourth Quarter Fiscal 2021
Home & Outdoor net sales revenue increased $48.4 million, or
29.8%, to $210.8 million, compared to $162.5 million. The growth
was driven by an increase from Organic business of $24.7 million,
or 15.2%, and growth from the acquisition of Osprey of $24.4
million, or 15.0%. The Organic business increase was primarily due
to higher brick and mortar and online channel sales driven by
strong consumer demand, accelerated retailer orders to improve
inventory levels and in anticipation of price increases, higher
sales in the club and closeout channels, the impact of customer
price increases related to rising freight and product costs, growth
in international sales, and the favorable comparative impact of
COVID-19 reduced store traffic and orders that were not able to be
shipped at the end of the fourth quarter of fiscal 2021 due to
Winter Storm Uri. Operating income increased 39.7% to $22.6
million, or 10.7% of segment net sales revenue, compared to $16.2
million, or 10.0% of segment net sales revenue. The 0.7 percentage
point increase was primarily due to favorable operating leverage, a
more favorable brand mix and a decrease in distribution expense.
These factors were partially offset by the net dilutive impact of
inflationary costs and related customer price increases, higher
inventory obsolescence expense, increased personnel expense, higher
acquisition-related expenses, and higher amortization expense.
Adjusted operating income increased 45.2% to $27.5 million, or
13.1% of segment net sales revenue, compared to $19.0 million, or
11.7% of segment net sales revenue.
Health & Wellness net sales revenue decreased $1.0 million,
or 0.4%, to $227.6 million, compared to $228.6 million. The decline
was driven by a decrease from Organic business of $0.4 million, or
0.2%, primarily due to a decrease in sales of thermometers and air
filtration products due to stronger COVID-19 driven demand for
healthcare and healthy living products in the comparative prior
year period. These factors were partially offset by an increase in
sales of fans, higher humidification product sales due to the
COVID-19 Omicron variant surge, and the impact of customer price
increases related to rising freight and product costs. Operating
income was $9.6 million, or 4.2% of segment net sales revenue,
compared to operating loss of $1.7 million, or 0.7% of segment net
sales revenue. The 4.9 percentage point increase in segment
operating margin was primarily due to a decrease in marketing
expense, lower new product development expense, lower royalty
expense, and a decrease in amortization expense. These factors were
partially offset by EPA compliance costs of $11.4 million, an
increase in outbound freight costs, increased inventory
obsolescence expense, higher distribution expense, a less favorable
product mix, and the net dilutive impact of inflationary costs and
related customer price increases. Adjusted operating income
increased to $23.3 million, or 10.2% of segment net sales revenue,
compared to $1.5 million, or 0.7% of segment net sales revenue.
Net sales revenue from Beauty Core business increased $37.3
million, or 31.5%, primarily reflecting higher brick and mortar and
online channel sales driven by strong consumer demand and
accelerated retailer orders to improve inventory levels and in
anticipation of price increases, an increase in closeout channel
sales, new product introductions, higher international sales. Total
Beauty segment net sales revenue increased $25.3 million, or 21.4%,
to $143.6 million, compared to $118.3 million primarily due to Core
business growth partially offset by the sale of the Non-Core North
America Personal Care business during the second quarter of fiscal
2022. Operating income was $18.2 million, or 12.6% of segment net
sales revenue, compared to $10.0 million, or 8.5% of segment net
sales revenue. The 4.1 percentage point increase in segment
operating margin reflects favorable operating leverage, the
favorable comparative impact of asset impairment charges recorded
in the prior year period, a decrease in marketing expense, and
lower amortization expense. These factors were partially offset by
a less favorable channel mix, the net dilutive impact of
inflationary costs and related customer price increases, higher
royalty expense, and an increase in annual incentive compensation
expense. Adjusted operating income decreased 2.5% to $21.8 million,
or 15.2% of segment net sales revenue, compared to $22.4 million,
or 18.9% of segment net sales revenue.
Balance Sheet and Cash Flow Highlights
- Fiscal 2022 Compared to Fiscal 2021
- Cash and cash equivalents totaled $33.4 million, compared to
$45.1 million.
- Accounts receivable turnover for fiscal 2022 was 72.6 days,
compared to 68.6 days for the same period last year.
- Inventory was $558.0 million, compared to $481.6 million.
Inventory turnover for fiscal 2022 was 2.3 times, compared to 3.2
times for the same period last year.
- Total short- and long-term debt was $813.2 million, compared to
$343.6 million.
- Net cash provided by operating activities for fiscal 2022 was
$140.8 million, compared to $314.1 million.
- Net cash used by investing activities of $438.9 million
included investments to acquire Osprey for $410.9 million and
capital and intangible asset expenditures of $78.0 million, of
which $55.8 million was for land and initial construction
expenditures related to a new 2 million square foot distribution
center. This was partially offset by proceeds from the sale of the
Company's North America Personal Care business of $44.7
million.
- Net cash provided by financing activities included share
repurchases of common stock in the open market during the fiscal
year for $170.7 million.
Subsequent Events
On March 30, 2022, a third-party facility that the Company
utilizes for inventory storage incurred severe damage from a
weather-related incident. The Company’s inventory stored at this
facility primarily relates to the Health & Wellness and Beauty
segments. While the inventory is insured, some seasonal inventory
and inventory designated for specific customer promotions is
currently not accessible, and as a result, may unfavorably impact
the Company's net sales revenue in the first half of fiscal 2023.
The Company is working with local officials and its insurance
provider to understand the extent of the damage, however the
building must be assessed and made to be structurally sound before
the Company will have access to the inventory and be able to fully
assess damages.
On April 22, 2022, the Company completed the acquisition of
Recipe Products Ltd., a producer of innovative prestige hair care
products for all types of curly and wavy hair under the Curlsmith
brand (“Curlsmith”). The total purchase consideration, net of cash
acquired, was $150.0 million in cash, subject to certain customary
closing adjustments. The acquisition was funded with cash on hand
and borrowings under the Company’s existing revolving credit
facility.
EPA Update
As previously disclosed, during fiscal 2022, the Company was in
discussions with the U.S. Environmental Protection Agency (the
“EPA”) regarding the compliance of packaging claims on certain of
its products in the air and water filtration categories and a
limited subset of humidifier products within the Health &
Wellness segment that are sold in the United States. The EPA
approved modest changes to labeling claims on packaging of the air
and water filtration impacted products, which the Company
implemented, and subsequently resumed shipping during fiscal 2022.
While the Company resumed normalized levels of shipping of the
affected inventory by the end of the third fiscal quarter, the
Company is still in process of repackaging the existing inventory
of impacted products. Additionally, as a result of continuing
dialogue with the EPA, the Company is executing further repackaging
and relabeling plans on certain additional humidifier products and
certain additional air filtration products.
Executive Leadership
Update
To accommodate the significant growth during its Transformation,
the Company previously announced that it would be creating a Chief
Operating Officer role. Noel Geoffroy will join Helen of Troy as
Chief Operating Officer on May 9, 2022 and will oversee the
day-to-day business and execution of the major Phase II projects.
Ms. Geoffroy joins Helen of Troy with over 25 years of experience
as a proven leader in President and General Manager roles at world
class companies including Sanofi in Consumer Healthcare, Kellogg,
H. J. Heinz, and Procter & Gamble. She is a consumer-centric
leader, brand builder, and product innovator with a strong
reputation as an inspirational organizational and cultural
leader.
Fiscal 2023 Annual
Outlook
Due to the sale of the majority of the Personal Care business
during the second quarter of fiscal 2022 and the sale of the
remaining Latin America and Caribbean Personal Care business on
March 25, 2022, the Company is not currently expecting any material
activity related to Non-Core business in fiscal 2023. Therefore,
the amounts included in its outlook for fiscal 2023 will be shown
on a consolidated basis. However, due to the fact that the fiscal
2022 results include material activity related to Non-Core
business, the year-over-year growth rates on a consolidated and
Core business basis will be different. Where appropriate, the
information provided in the outlook will reflect growth rates on
both a consolidated and Core business basis. The Company believes
that Core business growth is the most relevant basis as it provides
the best comparability between historical and future periods.
The Company expects consolidated net sales revenue in the range
of $2.38 billion to $2.42 billion, which implies consolidated
growth of 6.8% to 8.8% and Core business growth of 8.5% to
10.5%.
The Company’s fiscal year net sales outlook reflects the
following expectations by segment:
- Home & Outdoor net sales growth of 19.0% to 21.0%;
including net sales from Osprey of $180 million to $185
million;
- Health & Wellness net sales decline of 1.0% to growth of
1.0%; and
- Beauty Core business net sales growth of 4.5% to 7.5%;
including net sales from Curlsmith of $30 million to $35
million
The Company expects consolidated GAAP diluted EPS of $9.92 to
$10.38 and consolidated non-GAAP adjusted diluted EPS in the range
of $12.73 to $13.03, which implies consolidated adjusted diluted
EPS growth of 3.0% to 5.4% and Core adjusted diluted EPS growth of
4.5% to 7.0%. This includes adjusted diluted EPS contribution from
Osprey of $0.50 to $0.55 and $0.20 to $0.25 from Curlsmith.
The Company’s consolidated net sales and EPS outlooks reflect
the following assumptions:
- the severity of the cough/cold/flu season will be in line with
pre-COVID historical averages;
- April 2022 foreign currency exchange rates will remain constant
for the remainder of the fiscal year;
- the estimated net favorable impact to net sales of
approximately $10 million and adjusted diluted EPS of approximately
$0.10 related to the EPA matter;
- an estimated unfavorable impact to net sales of approximately
$10 million and adjusted diluted EPS of approximately $0.10 due to
not being able to ship certain products on a timely basis related
to damage to a third party storage facility caused by a severe
weather event in March 2022;
- estimated incremental after-tax inflationary cost pressures in
the range of $75 million to $80 million, or approximately $3.10 to
$3.30 of adjusted diluted EPS
- expected interest expense in the range of $35 million to $36
million due to higher average levels of debt due to recent
acquisitions and the expectation the Federal Open Market Committee
(“FOMC”) will increase interest rates by 225 basis points during
calendar year 2022;
- a reported consolidated GAAP effective tax rate range of 13.0%
to 14.0% for the full fiscal year 2023 and a consolidated adjusted
effective tax rate range of 11.7% to 12.7%; and
- an estimated weighted average diluted shares outstanding of
24.2 million.
The Company expects capital and intangible asset expenditures of
$180 million to $205 million for the full fiscal year 2023
including expected expenditures of $145 million to $170 million
related to the construction of a new distribution facility that is
expected to be completed by the end of fiscal 2023.
With regard to quarterly cadence, the Company expects the
majority of its net sales and adjusted diluted EPS growth to be
concentrated in the second and third quarters of fiscal 2023 due
primarily to the impact of approximately $20 million of accelerated
retailer orders in the fourth quarter of fiscal 2022, the strong
net sales and adjusted diluted EPS growth comparisons in the first
and fourth quarters of fiscal 2022, and the adverse net sales and
earnings impact of the EPA matter in the second and third quarters
of fiscal 2022.
The likelihood and potential impact of any additional fiscal
2023 acquisitions and divestitures, future asset impairment
charges, future foreign currency fluctuations, additional interest
rate increases, 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
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, Wednesday, April 27, 2022. Institutional
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 on the Events & Presentations page at:
http://investor.helenoftroy.com/. A telephone replay of this call
will be available at 12:00 p.m. Eastern Time on April 27, 2022
until 11:59 p.m. Eastern Time on May 4, 2022 and can be accessed by
dialing (844) 512-2921 and entering replay pin number 13728630. 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, Core and Non-Core Adjusted Operating
Income, Core and Non-Core Adjusted Operating Margin, Adjusted
Effective Tax Rate, Core 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
consolidated statements of income and cash flows. For additional
information see Note 6 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 products and solutions
for its customers through a diversified portfolio of
well-recognized and widely-trusted brands, including OXO, Hydro
Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools and Drybar.
The Company sometimes refers to these brands as its 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, in other filings with the SEC, and in certain other oral
and written presentations. Generally, the words “anticipates”,
“believes”, “expects”, “plans”, “may”, “will”, “would”, “should”,
“seeks”, “estimates”, “project”, “predict”, “potential”,
“currently”, “continue”, “intends”, “outlook”, “forecasts”,
“could”, and other similar words identify forward-looking
statements. All statements that address operating results, events
or developments that the Company expects or anticipates may occur
in the future, including statements related to sales, earnings per
share results, and statements expressing general expectations about
future operating results, are forward-looking statements and are
based upon its current expectations and various assumptions. The
Company believes there is a reasonable basis for these expectations
and assumptions, but there can be no assurance that the Company
will realize these expectations or that these assumptions will
prove correct. Forward-looking statements are subject to risks that
could cause them to differ materially from actual results.
Accordingly, the Company cautions readers not to place undue
reliance on forward-looking statements. The forward-looking
statements contained in this press release should be read in
conjunction with, and are subject to and qualified by, the risks
described in the Company’s Form 10-K for the year ended February
28, 2022, 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 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, a
cybersecurity breach, obsolescence or interruptions in the
operation of the Company’s central global Enterprise Resource
Planning systems and other peripheral information systems, 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, 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 develop and
introduce a continuing stream of innovative new products to meet
changing consumer preferences, actions taken by large customers
that may adversely affect the Company’s gross profit and operating
results, 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, the Company’s dependence on
third-party manufacturers, most of which are located in Asia, and
any inability to obtain products from such manufacturers, the
Company’s ability to deliver products to its customers in a timely
manner and according to their fulfillment standards, the risks
associated with trade barriers, exchange controls, expropriations,
and other risks associated with domestic and foreign operations
including uncertainty and business interruptions resulting from
political changes and actions in the U.S. and abroad, such as the
current conflict between Russia and Ukraine, and volatility in the
global credit and financial markets and economy, the Company’s
dependence on the strength of retail economies and vulnerabilities
to any prolonged economic downturn, including a future downturn
from the effects of COVID-19, risks associated with the use of
licensed trademarks from or to third parties, risks associated with
weather conditions, the duration and severity of the cold and flu
season and other related factors, the Company’s reliance on its
Chief Executive Officer and a limited number of other key senior
officers to operate its business, expectations regarding recent
acquisitions (including Curlsmith and Osprey) 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 risks of potential changes in laws and regulations, including
environmental, employment and health and safety and tax laws, and
the costs and complexities of compliance with such laws, the risks
associated with increased focus and expectations on climate change
and other environmental, social and governance matters, the risks
associated with significant changes in or the Company’s compliance
with regulations, interpretations or product certification
requirements, 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 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 associated with accounting for tax positions and the
resolution of tax disputes, the risks of significant tariffs or
other restrictions being placed on imports from China, Mexico or
Vietnam or any retaliatory trade measures taken by China, Mexico or
Vietnam, 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,
increased costs of raw materials, energy and transportation, 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, risks associated with foreign currency exchange rate
fluctuations, and 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
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
Consolidated Statements of
Income (2)
(Unaudited) (in thousands,
except per share data)
Three Months Ended Last Day of February,
2022
2021
Sales revenue, net
$
582,020
100.0
%
$
509,375
100.0
%
Cost of goods sold
333,846
57.4
%
279,037
54.8
%
Gross profit
248,174
42.6
%
230,338
45.2
%
Selling, general and administrative expense (“SG&A”)
197,790
34.0
%
197,366
38.7
%
Asset impairment charges
—
—
%
8,452
1.7
%
Restructuring charges
—
—
%
(5
)
—
%
Operating income
50,384
8.7
%
24,525
4.8
%
Non-operating income, net
75
—
%
119
—
%
Interest expense
3,336
0.6
%
3,049
0.6
%
Income before income tax
47,123
8.1
%
21,595
4.2
%
Income tax expense (benefit)
7,329
1.3
%
(577
)
(0.1
)%
Net income
$
39,794
6.8
%
$
22,172
4.4
%
Diluted earnings per share (“EPS”)
$
1.64
$
0.90
Weighted average shares of common stock used in computing
diluted EPS
24,259
24,737
Fiscal Year Ended Last Day of February,
2022
2021
Sales revenue, net
$
2,223,355
100.0
%
$
2,098,799
100.0
%
Cost of goods sold
1,270,168
57.1
%
1,171,497
55.8
%
Gross profit
953,187
42.9
%
927,302
44.2
%
SG&A
680,257
30.6
%
637,012
30.4
%
Asset impairment charges
—
—
%
8,452
0.4
%
Restructuring charges
380
—
%
350
—
%
Operating income
272,550
12.3
%
281,488
13.4
%
Non-operating income, net
260
—
%
559
—
%
Interest expense
12,844
0.6
%
12,617
0.6
%
Income before income tax
259,966
11.7
%
269,430
12.8
%
Income tax expense
36,202
1.6
%
15,484
0.7
%
Net income
$
223,764
10.1
%
$
253,946
12.1
%
Diluted EPS
$
9.17
$
10.08
Weighted average shares of common stock used in computing
diluted EPS
24,410
25,196
Consolidated Statements of
Income and Reconciliation of Non-GAAP Financial Measures –
Adjusted Operating Income,
Adjusted Income and Adjusted Diluted EPS (2) (6)
(Unaudited) (in thousands,
except per share data)
Three Months Ended February
28, 2022
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
582,020
100.0
%
$
—
$
582,020
100.0
%
Cost of goods sold
333,846
57.4
%
(3,953
)
(
7)
329,893
56.7
%
Gross profit
248,174
42.6
%
3,953
252,127
43.3
%
SG&A
197,790
34.0
%
(7,403
)
(
7)
179,498
30.8
%
(819
)
(
8)
(3,801
)
(
9)
(6,269
)
(
10)
Operating income
50,384
8.7
%
22,245
72,629
12.5
%
Non-operating income, net
75
—
%
—
75
—
%
Interest expense
3,336
0.6
%
—
3,336
0.6
%
Income before income tax
47,123
8.1
%
22,245
69,368
11.9
%
Income tax expense
7,329
1.3
%
1,216
8,545
1.5
%
Net Income
$
39,794
6.8
%
$
21,029
$
60,823
10.5
%
Diluted EPS
$
1.64
$
0.87
$
2.51
Weighted average shares of common stock
used in computing diluted EPS
24,259
24,259
Three Months Ended February
28, 2021
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
509,375
100.0
%
$
—
$
509,375
100.0
%
Cost of goods sold
279,037
54.8
%
—
279,037
54.8
%
Gross profit
230,338
45.2
%
—
230,338
45.2
%
SG&A
197,366
38.7
%
(4,116
)
(
9)
187,486
36.8
%
(5,764
)
(
10)
Asset impairment charges
8,452
1.7
%
(8,452
)
(
11)
—
—
%
Restructuring charges
(5
)
—
%
5
(
12)
—
—
%
Operating income
24,525
4.8
%
18,327
42,852
8.4
%
Non-operating income, net
119
—
%
—
119
—
%
Interest expense
3,049
0.6
%
—
3,049
0.6
%
Income before income tax
21,595
4.2
%
18,327
39,922
7.8
%
Income tax (benefit) expense
(577
)
(0.1
) %
1,743
1,166
0.2
%
Net income
$
22,172
4.4
%
$
16,584
$
38,756
7.6
%
Diluted EPS
$
0.90
$
0.67
$
1.57
Weighted average shares of common stock
used in computing diluted EPS
24,737
24,737
Consolidated Statements of
Income and Reconciliation of Non-GAAP Financial Measures –
Adjusted Operating Income,
Adjusted Income and Adjusted Diluted EPS (2) (6)
(Unaudited) (in thousands,
except per share data)
Fiscal Year Ended February 28,
2022
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
2,223,355
100.0
%
$
—
$
2,223,355
100.0
%
Cost of goods sold
1,270,168
57.1
%
(17,728
)
(
7)
1,252,440
56.3
%
Gross profit
953,187
42.9
%
17,728
970,915
43.7
%
SG&A
680,257
30.6
%
(14,626
)
(
7)
615,825
27.7
%
(2,424
)
(
8)
(12,764
)
(
9)
(34,618
)
(
10)
Restructuring charges
380
—
%
(380
)
(
12)
—
—
%
Operating income
272,550
12.3
%
82,540
355,090
16.0
%
Non-operating income, net
260
—
%
—
260
—
%
Interest expense
12,844
0.6
%
—
12,844
0.6
%
Income before income tax
259,966
11.7
%
82,540
342,506
15.4
%
Income tax expense
36,202
1.6
%
4,553
40,755
1.8
%
Net Income
$
223,764
10.1
%
$
77,987
$
301,751
13.6
%
Diluted EPS
$
9.17
$
3.19
$
12.36
Weighted average shares of common stock
used in computing diluted EPS
24,410
24,410
Fiscal Year Ended February 28,
2021
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
2,098,799
100.0
%
$
—
$
2,098,799
100.0
%
Cost of goods sold
1,171,497
55.8
%
—
1,171,497
55.8
%
Gross profit
927,302
44.2
%
—
927,302
44.2
%
SG&A
637,012
30.4
%
(17,643
)
(
9)
592,951
28.3
%
(26,418
)
(
10)
Asset impairment charges
8,452
0.4
%
(8,452
)
(
11)
—
—
%
Restructuring charges
350
—
%
(350
)
(
12)
—
—
%
Operating income
281,488
13.4
%
52,863
334,351
15.9
%
Non-operating income, net
559
—
%
—
559
—
%
Interest expense
12,617
0.6
%
—
12,617
0.6
%
Income before income tax
269,430
12.8
%
52,863
322,293
15.4
%
Income tax expense
15,484
0.7
%
13,159
28,643
1.4
%
Net Income
$
253,946
12.1
%
$
39,704
$
293,650
14.0
%
Diluted EPS
$
10.08
$
1.58
$
11.65
Weighted average shares of common stock
used in computing diluted EPS
25,196
25,196
Consolidated and Segment Net
Sales Revenue
(Unaudited) (in
thousands)
Three Months Ended Last Day of
February,
Home & Outdoor
Health & Wellness
Beauty
Total
Fiscal 2021 sales revenue, net
$
162,463
$
228,623
$
118,289
$
509,375
Organic business (1)
24,683
(388
)
25,910
50,205
Impact of foreign currency
(672
)
(630
)
(631
)
(1,933
)
Acquisition (2)
24,373
—
—
24,373
Change in sales revenue, net
48,384
(1,018
)
25,279
72,645
Fiscal 2022 sales revenue, net
$
210,847
$
227,605
$
143,568
$
582,020
Total net sales revenue growth
(decline)
29.8
%
(0.4
)%
21.4
%
14.3
%
Organic business
15.2
%
(0.2
)%
21.9
%
9.9
%
Impact of foreign currency
(0.4
)%
(0.3
)%
(0.5
)%
(0.4
)%
Acquisition
15.0
%
—
%
—
%
4.8
%
Fiscal Year Ended Last Day of
February,
Home & Outdoor
Health & Wellness
Beauty
Total
Fiscal 2021 sales revenue, net
$
727,354
$
890,191
$
481,254
$
2,098,799
Organic business (1)
113,495
(116,690
)
96,550
93,355
Impact of foreign currency
622
3,579
2,627
6,828
Acquisition (2)
24,373
—
—
24,373
Change in sales revenue, net
138,490
(113,111
)
99,177
124,556
Fiscal 2022 sales revenue, net
$
865,844
$
777,080
$
580,431
$
2,223,355
Total net sales revenue growth
(decline)
19.0
%
(12.7
) %
20.6
%
5.9
%
Organic business
15.6
%
(13.1
) %
20.1
%
4.4
%
Impact of foreign currency
0.1
%
0.4
%
0.5
%
0.3
%
Acquisition
3.4
%
—
%
—
%
1.2
%
Leadership Brand and Other Net
Sales Revenue (2)
(Unaudited) (in
thousands)
Three Months Ended Last Day of
February,
2022
2021
$ Change
% Change
Leadership Brand sales revenue, net
(4)
$
480,391
$
417,931
$
62,460
14.9
%
All other sales revenue, net
101,629
91,444
10,185
11.1
%
Total sales revenue, net
$
582,020
$
509,375
$
72,645
14.3
%
Fiscal Year Ended Last Day of
February,
2022
2021
$ Change
% Change
Leadership Brand sales revenue, net
(4)
$
1,810,249
$
1,706,545
$
103,704
6.1
%
All other sales revenue, net
413,106
392,254
20,852
5.3
%
Total sales revenue, net
$
2,223,355
$
2,098,799
$
124,556
5.9
%
Consolidated and Segment Net
Sales from Core and Non-Core Business (3)
(Unaudited) (in
thousands)
Three Months Ended Last Day of
February,
Home & Outdoor
Health & Wellness
Beauty
Total
Fiscal 2021 sales revenue, net
$
162,463
$
228,623
$
118,289
$
509,375
Core business
48,384
(1,018
)
37,317
84,683
Non-Core business (Personal Care)
—
—
(12,038
)
(12,038
)
Change in sales revenue, net
48,384
(1,018
)
25,279
72,645
Fiscal 2022 sales revenue, net
$
210,847
$
227,605
$
143,568
$
582,020
Total net sales revenue growth
(decline)
29.8
%
(0.4
) %
21.4
%
14.3
%
Core business
29.8
%
(0.4
) %
31.5
%
16.6
%
Non-Core business (Personal Care)
—
%
—
%
(10.2
)%
(2.4
)%
Fiscal Year Ended Last Day of
February,
Home & Outdoor
Health & Wellness
Beauty
Total
Fiscal 2021 sales revenue, net
$
727,354
$
890,191
$
481,254
$
2,098,799
Core business
138,490
(113,111
)
143,407
168,786
Non-Core business (Personal Care)
—
—
(44,230
)
(44,230
)
Change in sales revenue, net
138,490
(113,111
)
99,177
124,556
Fiscal 2022 sales revenue, net
$
865,844
$
777,080
$
580,431
$
2,223,355
Total net sales revenue growth
(decline)
19.0
%
(12.7
) %
20.6
%
5.9
%
Core business
19.0
%
(12.7
) %
29.8
%
8.0
%
Non-Core business (Personal Care)
—
%
—
%
(9.2
)%
(2.1
)%
Reconciliation of Non-GAAP
Financial Measures – GAAP Operating Income
to Adjusted Operating Income
(Non-GAAP) (6)
(Unaudited) (in
thousands)
Three Months Ended February
28, 2022
Home &
Outdoor (2)
Health & Wellness
Beauty
Total
Operating income, as reported (GAAP)
$
22,622
10.7
%
$
9,601
4.2
%
$
18,161
12.6
%
$
50,384
8.7
%
Acquisition-related expenses
819
0.4
%
—
—
%
—
—
%
819
0.1
%
EPA compliance costs
—
—
%
11,356
5.0
%
—
—
%
11,356
2.0
%
Restructuring charges
—
—
%
—
—
%
—
—
%
—
—
%
Subtotal
23,441
11.1
%
20,957
9.2
%
18,161
12.6
%
62,559
10.7
%
Amortization of intangible assets
1,329
0.6
%
575
0.3
%
1,897
1.3
%
3,801
0.7
%
Non-cash share-based compensation
2,765
1.3
%
1,772
0.8
%
1,732
1.2
%
6,269
1.1
%
Adjusted operating income (non-GAAP)
$
27,535
13.1
%
$
23,304
10.2
%
$
21,790
15.2
%
$
72,629
12.5
%
Three Months Ended February
28, 2021
Home &
Outdoor
Health & Wellness
Beauty
Total
Operating income (loss), as reported
(GAAP)
$
16,193
10.0
%
$
(1,679
)
(0.7
) %
$
10,011
8.5
%
$
24,525
4.8
%
Asset impairment charges
—
—
%
—
—
%
8,452
7.1
%
8,452
1.7
%
Restructuring charges
(2
)
—
%
(6
)
—
%
3
—
%
(5
)
—
%
Subtotal
16,191
10.0
%
(1,685
)
(0.7
) %
18,466
15.6
%
32,972
6.5
%
Amortization of intangible assets
514
0.3
%
1,196
0.5
%
2,406
2.0
%
4,116
0.8
%
Non-cash share-based compensation
2,254
1.4
%
2,025
0.9
%
1,485
1.3
%
5,764
1.1
%
Adjusted operating income (non-GAAP)
$
18,959
11.7
%
$
1,536
0.7
%
$
22,357
18.9
%
$
42,852
8.4
%
Fiscal Year Ended February 28,
2022
Home &
Outdoor (2)
Health & Wellness
Beauty
Total
Operating income, as reported (GAAP)
$
134,925
15.6
%
$
39,217
5.0
%
$
98,408
17.0
%
$
272,550
12.3
%
Acquisition-related expenses
2,424
0.3
%
—
—
%
—
—
%
2,424
0.1
%
EPA compliance costs
—
—
%
32,354
4.2
%
—
—
%
32,354
1.5
%
Restructuring charges
369
—
%
—
—
%
11
—
%
380
—
%
Subtotal
137,718
15.9
%
71,571
9.2
%
98,419
17.0
%
307,708
13.8
%
Amortization of intangible assets
2,891
0.3
%
2,284
0.3
%
7,589
1.3
%
12,764
0.6
%
Non-cash share-based compensation
13,812
1.6
%
12,001
1.5
%
8,805
1.5
%
34,618
1.6
%
Adjusted operating income (non-GAAP)
$
154,421
17.8
%
$
85,856
11.0
%
$
114,813
19.8
%
$
355,090
16.0
%
Fiscal Year Ended February 28,
2021
Home &
Outdoor
Health & Wellness
Beauty
Total
Operating income, as reported (GAAP)
$
122,487
16.8
%
$
94,103
10.6
%
$
64,898
13.5
%
$
281,488
13.4
%
Asset impairment charges
—
—
%
—
—
%
8,452
1.8
%
8,452
0.4
%
Restructuring charges
249
—
%
(6
)
—
%
107
—
%
350
—
%
Subtotal
122,736
16.9
%
94,097
10.6
%
73,457
15.3
%
290,290
13.8
%
Amortization of intangible assets
2,055
0.3
%
8,611
1.0
%
6,977
1.4
%
17,643
0.8
%
Non-cash share-based compensation
10,278
1.4
%
9,191
1.0
%
6,949
1.4
%
26,418
1.3
%
Adjusted operating income (non-GAAP)
$
135,069
18.6
%
$
111,899
12.6
%
$
87,383
18.2
%
$
334,351
15.9
%
Reconciliation of Non-GAAP
Financial Measures – EBITDA
(Earnings Before Interest,
Taxes, Depreciation and Amortization) and Adjusted EBITDA
(6)
(Unaudited) (in
thousands)
Three Months Ended February
28, 2022
Home & Outdoor (2)
Health & Wellness
Beauty
Total
Operating income, as reported (GAAP)
$
22,622
$
9,601
$
18,161
$
50,384
Depreciation and amortization
3,855
2,812
3,080
9,747
Non-operating income, net
—
—
75
75
EBITDA (non-GAAP)
26,477
12,413
21,316
60,206
Add: Acquisition-related expenses
819
—
—
819
EPA compliance costs
—
11,356
—
11,356
Non-cash share-based compensation
2,765
1,772
1,732
6,269
Adjusted EBITDA (non-GAAP)
$
30,061
$
25,541
$
23,048
$
78,650
Three Months Ended February
28, 2021
Home & Outdoor
Health & Wellness
Beauty
Total
Operating income (loss), as reported
(GAAP)
$
16,193
$
(1,679
)
$
10,011
$
24,525
Depreciation and amortization
2,590
3,122
4,011
9,723
Non-operating income, net
—
—
119
119
EBITDA (non-GAAP)
18,783
1,443
14,141
34,367
Add: Asset impairment charges
—
—
8,452
8,452
Restructuring charges
(2
)
(6
)
3
(5
)
Non-cash share-based compensation
2,254
2,025
1,485
5,764
Adjusted EBITDA (non-GAAP)
$
21,035
$
3,462
$
24,081
$
48,578
Fiscal Year Ended February 28,
2022
Home & Outdoor (2)
Health & Wellness
Beauty
Total
Operating income, as reported (GAAP)
$
134,925
$
39,217
$
98,408
$
272,550
Depreciation and amortization
12,112
10,691
13,026
35,829
Non-operating income, net
—
—
260
260
EBITDA (non-GAAP)
147,037
49,908
111,694
308,639
Add: Acquisition-related expenses
2,424
—
—
2,424
EPA compliance costs
—
32,354
—
32,354
Restructuring charges
369
—
11
380
Non-cash share-based compensation
13,812
12,001
8,805
34,618
Adjusted EBITDA (non-GAAP)
$
163,642
$
94,263
$
120,510
$
378,415
Fiscal Year Ended February 28,
2021
Home & Outdoor
Health & Wellness
Beauty
Total
Operating income, as reported (GAAP)
$
122,487
$
94,103
$
64,898
$
281,488
Depreciation and amortization
9,333
15,453
12,932
37,718
Non-operating income, net
—
—
559
559
EBITDA (non-GAAP)
131,820
109,556
78,389
319,765
Add: Asset impairment charges
—
—
8,452
8,452
Restructuring charges
249
(6
)
107
350
Non-cash share-based compensation
10,278
9,191
6,949
26,418
Adjusted EBITDA (non-GAAP)
$
142,347
$
118,741
$
93,897
$
354,985
Reconciliation of Non-GAAP
Financial Measures – GAAP Income (Loss) and Diluted EPS to Adjusted
Income and Adjusted Diluted EPS (Non-GAAP) (6)
(Unaudited) (in thousands,
except per share data)
Three Months Ended February
28, 2022
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
47,123
$
7,329
$
39,794
$
1.94
$
0.30
$
1.64
Acquisition-related expenses
819
29
790
0.03
—
0.03
EPA compliance costs
11,356
170
11,186
0.47
0.01
0.46
Subtotal
59,298
7,528
51,770
2.44
0.31
2.13
Amortization of intangible assets
3,801
407
3,394
0.16
0.02
0.14
Non-cash share-based compensation
6,269
610
5,659
0.26
0.03
0.23
Adjusted (non-GAAP)
$
69,368
$
8,545
$
60,823
$
2.86
$
0.35
$
2.51
Weighted average shares of common stock
used in computing diluted EPS
24,259
Three Months Ended February
28, 2021
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
21,595
$
(577
)
$
22,172
$
0.87
$
(0.02
)
$
0.90
Asset impairment charges
8,452
1,009
7,443
0.34
0.04
0.30
Restructuring charges
(5
)
—
(5
)
—
—
—
Subtotal
30,042
432
29,610
1.21
0.02
1.20
Amortization of intangible assets
4,116
214
3,902
0.17
0.01
0.16
Non-cash share-based compensation
5,764
520
5,244
0.23
0.02
0.21
Adjusted (non-GAAP)
$
39,922
$
1,166
$
38,756
$
1.61
$
0.05
$
1.57
Weighted average shares of common stock
used in computing diluted EPS
24,737
Three Months Ended February
29, 2020
(Loss) Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
(6,078
)
$
(2,923
)
$
(3,155
)
$
(0.24
)
$
(0.12
)
$
(0.13
)
Acquisition-related expenses
1,071
16
1,055
0.04
—
0.04
Asset impairment charges
41,000
4,574
36,426
1.61
0.18
1.43
Restructuring charges
2,252
93
2,159
0.09
—
0.08
Subtotal
38,245
1,760
36,485
1.51
0.07
1.44
Amortization of intangible assets
8,142
624
7,518
0.32
0.02
0.30
Non-cash share-based compensation
4,186
369
3,817
0.16
0.01
0.15
Adjusted (non-GAAP)
$
50,573
$
2,753
$
47,820
$
1.99
$
0.11
$
1.88
Weighted average shares of common stock
used in computing diluted EPS
25,403
Reconciliation of Non-GAAP
Financial Measures – GAAP Income and Diluted EPS to Adjusted Income
and Adjusted Diluted EPS (Non-GAAP) (6)
(Unaudited) (in thousands,
except per share data)
Fiscal Year Ended February 28,
2022
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
259,966
$
36,202
$
223,764
$
10.65
$
1.48
$
9.17
Acquisition-related expenses
2,424
87
2,337
0.10
—
0.10
EPA compliance costs
32,354
485
31,869
1.33
0.02
1.31
Restructuring charges
380
6
374
0.02
—
0.02
Subtotal
295,124
36,780
258,344
12.09
1.51
10.58
Amortization of intangible assets
12,764
1,010
11,754
0.52
0.04
0.48
Non-cash share-based compensation
34,618
2,965
31,653
1.42
0.12
1.30
Adjusted (non-GAAP)
$
342,506
$
40,755
$
301,751
$
14.03
$
1.67
$
12.36
Weighted average shares of common stock
used in computing diluted EPS
24,410
Fiscal Year Ended February 28,
2021
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
269,430
$
15,484
$
253,946
$
10.69
$
0.61
$
10.08
Asset impairment charges
8,452
1,009
7,443
0.34
0.04
0.30
Restructuring charges
350
2
348
0.01
—
0.01
Tax reform
—
9,357
(9,357
)
—
0.37
(0.37
)
Subtotal
278,232
25,852
252,380
11.04
1.03
10.02
Amortization of intangible assets
17,643
865
16,778
0.70
0.03
0.67
Non-cash share-based compensation
26,418
1,926
24,492
1.05
0.08
0.97
Adjusted (non-GAAP)
$
322,293
$
28,643
$
293,650
$
12.79
$
1.14
$
11.65
Weighted average shares of common stock
used in computing diluted EPS
25,196
Fiscal Year Ended February 29,
2020
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
165,940
$
13,607
$
152,333
$
6.55
$
0.54
$
6.02
Acquisition-related expenses
2,546
38
2,508
0.10
—
0.10
Asset impairment charges
41,000
4,574
36,426
1.62
0.18
1.44
Restructuring charges
3,313
161
3,152
0.13
0.01
0.12
Subtotal
212,799
18,380
194,419
8.40
0.73
7.68
Amortization of intangible assets
21,271
1,245
20,026
0.84
0.05
0.79
Non-cash share-based compensation
22,929
1,803
21,126
0.91
0.07
0.83
Adjusted (non-GAAP)
$
256,999
$
21,428
$
235,571
$
10.15
$
0.85
$
9.30
Weighted average shares of common stock
used in computing diluted EPS
25,322
Consolidated Core and Non-Core
Net Sales and Reconciliation of Non-GAAP Financial Measures – Core
and Non-Core Adjusted Diluted EPS (Non-GAAP) (3) (6)
(Unaudited) (in thousands,
except per share data)
Three Months Ended Last Day of
February,
2022
2021
$ Change
% Change
Sales revenue, net
Core
$
578,141
$
493,458
$
84,683
17.2
%
Non-Core
3,879
15,917
(12,038
)
(75.6
) %
Total
$
582,020
$
509,375
$
72,645
14.3
%
Three Months Ended Last Day of
February,
2022
2021
$ Change
% Change
Adjusted Diluted EPS (non-GAAP)
Core
$
2.51
$
1.42
$
1.09
76.8
%
Non-Core
—
0.15
(0.15
)
(100.0
) %
Total
$
2.51
$
1.57
$
0.94
59.9
%
Three Months Ended Last Day of February, Core
Business:
2022
2021
Diluted EPS, as reported
$
1.64
$
1.05
Acquisition-related expenses, net of tax
0.03
—
EPA compliance costs, net of tax
0.46
—
Subtotal
2.13
1.05
Amortization of intangible assets, net of tax
0.14
0.16
Non-cash share-based compensation, net of tax
0.23
0.21
Adjusted Diluted EPS (non-GAAP)
$
2.51
$
1.42
Three Months Ended Last Day of February, Non-Core
Business:
2022
2021
Diluted EPS, as reported
$
—
$
(0.15
)
Asset impairment charges, net of tax
—
0.30
Adjusted Diluted EPS (non-GAAP)
$
—
$
0.15
Diluted EPS, as reported (GAAP)
$
1.64
$
0.90
Consolidated Core and Non-Core
Net Sales and Reconciliation of Non-GAAP Financial Measures – Core
and Non-Core Adjusted Diluted EPS (Non-GAAP) (3) (6)
(Unaudited) (in thousands,
except per share data)
Fiscal Years Ended Last Day of
February,
2022
2021
$ Change
% Change
Sales revenue, net
Core
$
2,189,239
$
2,020,453
$
168,786
8.4
%
Non-Core
34,116
78,346
(44,230
)
(56.5
)%
Total
$
2,223,355
$
2,098,799
$
124,556
5.9
%
Fiscal Years Ended Last Day of
February,
2022
2021
$ Change
% Change
Adjusted Diluted EPS (non-GAAP)
Core
$
12.18
$
11.03
$
1.15
10.4
%
Non-Core
0.18
0.62
(0.44
)
(71.0
)%
Total
$
12.36
$
11.65
$
0.71
6.1
%
Fiscal Years Ended Last Day of
February,
Core Business:
2022
2021
Diluted EPS, as reported
$
9.00
$
9.76
Acquisition-related expenses, net of tax
0.10
—
EPA compliance costs, net of tax
1.31
—
Restructuring charges, net of tax
0.02
0.01
Tax Reform
—
(0.37
)
Subtotal
10.41
9.40
Amortization of intangible assets, net of tax
0.48
0.67
Non-cash share-based compensation, net of tax
1.29
0.97
Adjusted Diluted EPS (non-GAAP)
$
12.18
$
11.03
Fiscal Years Ended Last Day of
February,
Non-Core Business:
2022
2021
Diluted EPS, as reported
$
0.17
$
0.32
Asset impairment charges, net of tax
—
0.30
Subtotal
0.17
0.62
Non-cash share-based compensation, net of tax
0.01
—
Adjusted Diluted EPS (non-GAAP)
$
0.18
$
0.62
Diluted EPS, as reported (GAAP)
$
9.17
$
10.08
Reconciliation of Non-GAAP
Financial Measures – Core and Non-Core GAAP Operating Income (Loss)
to Core and Non-Core Adjusted Operating Income (Non-GAAP) (3)
(6)
(Unaudited) (in
thousands)
Fiscal Year Ended February 28,
2022
Core Business
Non-Core Business
Consolidated
Operating income, as reported (GAAP)
$
267,004
12.2
%
$
5,546
16.3
%
$
272,550
12.3
%
Acquisition-related expenses
2,424
0.1
%
—
—
%
2,424
0.1
%
EPA compliance costs
32,354
1.5
%
—
—
%
32,354
1.5
%
Restructuring charges
380
—
%
—
—
%
380
—
%
Subtotal
302,162
13.8
%
5,546
16.3
%
307,708
13.8
%
Amortization of intangible assets
12,764
0.6
%
—
—
%
12,764
0.6
%
Non-cash share-based compensation
34,386
1.6
%
232
0.7
%
34,618
1.6
%
Adjusted operating income (non-GAAP)
$
349,312
16.0
%
$
5,778
16.9
%
$
355,090
16.0
%
Fiscal Year Ended February 28,
2021
Core Business
Non-Core Business
Consolidated
Operating income, as reported (GAAP)
$
272,783
13.5
%
$
8,705
11.1
%
$
281,488
13.4
%
Asset impairment charges
—
—
%
8,452
10.8
%
8,452
0.4
%
Restructuring charges
350
—
%
—
—
%
350
—
%
Subtotal
273,133
13.5
%
17,157
21.9
%
290,290
13.8
%
Amortization of intangible assets
17,643
0.9
%
—
—
%
17,643
0.8
%
Non-cash share-based compensation
26,203
1.3
%
215
0.3
%
26,418
1.3
%
Adjusted operating income (non-GAAP)
$
316,979
15.7
%
$
17,372
22.2
%
$
334,351
15.9
%
Fiscal Year Ended February 29,
2020
Core Business
Non-Core Business
Consolidated
Operating income (loss), as reported
(GAAP)
$
208,011
12.9
%
$
(29,760
)
(32.2
) %
$
178,251
10.4
%
Acquisition-related expenses
2,546
0.2
%
—
—
%
2,546
0.1
%
Asset impairment charges
—
—
%
41,000
44.4
%
41,000
2.4
%
Restructuring charges
2,817
0.2
%
496
0.5
%
3,313
0.2
%
Subtotal
213,374
13.2
%
11,736
12.7
%
225,110
13.2
%
Amortization of intangible assets
13,511
0.8
%
7,760
8.4
%
21,271
1.2
%
Non-cash share-based compensation
22,496
1.4
%
433
0.5
%
22,929
1.3
%
Adjusted operating income (non-GAAP)
$
249,381
15.4
%
$
19,929
21.6
%
$
269,310
15.8
%
Fiscal Year Ended February 28,
2019
Core Business
Non-Core Business
Consolidated
Operating income, as reported (GAAP)
$
176,189
12.1
%
$
23,190
22.5
%
$
199,379
12.7
%
Restructuring charges
3,224
0.2
%
362
0.4
%
3,586
0.2
%
Subtotal
179,413
12.3
%
23,552
22.8
%
202,965
13.0
%
Amortization of intangible assets
13,215
0.9
%
989
1.0
%
14,204
0.9
%
Non-cash share-based compensation
21,777
1.5
%
276
0.3
%
22,053
1.4
%
Adjusted operating income (non-GAAP)
$
214,405
14.7
%
$
24,817
24.0
%
$
239,222
15.3
%
Selected Consolidated Balance
Sheet, Cash Flow and Liquidity Information
(Unaudited) (in
thousands)
Last Day of February,
2022
2021
Balance Sheet:
Cash and cash equivalents
$
33,381
$
45,120
Receivables, net
457,623
382,449
Inventory
557,992
481,611
Assets held for sale
1,942
39,867
Total assets, current
1,082,080
971,937
Total assets
2,823,451
2,263,488
Total liabilities, current
602,690
614,892
Total long-term liabilities
893,422
409,249
Total debt
813,216
343,630
Stockholders’ equity
1,327,339
1,239,347
Liquidity:
Working capital
$
479,390
$
357,045
Fiscal Years Ended Last Day of
February,
2022
2021
Cash Flow:
Depreciation and amortization
$
35,829
$
37,718
Net cash provided by operating
activities
140,823
314,106
Capital and intangible asset
expenditures
78,039
98,668
Net debt proceeds
468,600
7,100
Payments for repurchases of common
stock
188,204
203,294
Reconciliation of Non-GAAP
Financial Measures – GAAP Net Cash Provided by Operating Activities
to Free Cash Flow (Non-GAAP) (6)
(Unaudited) (in
thousands)
Fiscal Years Ended Last Day of
February,
2022
2021
Net cash provided by operating activities
(GAAP)
$
140,823
$
314,106
Less: Capital and intangible asset
expenditures
(78,039
)
(98,668
)
Free cash flow (non-GAAP)
$
62,784
$
215,438
Fiscal 2023 Outlook for Net
Sales Revenue (3)
(Unaudited)
(in thousands)
Consolidated:
Fiscal 2022
Outlook Fiscal 2023
Net sales revenue
$
2,223,355
$
2,375,000
—
$
2,420,000
Net sales revenue growth
6.8
%
—
8.8
%
Core Business:
Net sales revenue
$
2,189,239
$
2,375,000
—
$
2,420,000
Net sales revenue growth
8.5
%
—
10.5
%
Reconciliation of Non-GAAP
Financial Measures – Fiscal 2023 Outlook for GAAP Diluted Earnings
Per Share (“EPS”) to Adjusted Diluted EPS (Non-GAAP) (3) (6)
(Unaudited)
Consolidated:
Fiscal Year Ended February 28,
2022
Outlook Fiscal 2023
Diluted EPS, as reported (GAAP)
$
9.17
$
9.92
—
$
10.38
Acquisition-related expenses, net of
tax
0.10
0.05
—
0.03
EPA compliance costs, net of tax
1.31
0.72
—
0.62
Restructuring charges, net of tax
0.02
—
—
—
Subtotal
10.58
10.69
—
11.03
Amortization of intangible assets, net of
tax
0.48
0.69
—
0.67
Non-cash share-based compensation, net of
tax
1.30
1.35
—
1.33
Adjusted diluted EPS (non-GAAP)
$
12.36
$
12.73
—
$
13.03
Adjusted diluted EPS (non-GAAP) growth
3.0
%
—
5.4
%
Core Business:
Fiscal Year Ended February 28,
2022
Outlook Fiscal 2023
Diluted EPS, as reported (GAAP)
$
9.00
$
9.92
—
$
10.38
Acquisition-related expenses, net of
tax
0.10
0.05
—
0.03
EPA compliance costs, net of tax
1.31
0.72
—
0.62
Restructuring charges, net of tax
0.02
—
—
—
Subtotal
10.41
10.69
—
11.03
Amortization of intangible assets, net of
tax
0.48
0.69
—
0.67
Non-cash share-based compensation, net of
tax
1.29
1.35
—
1.33
Adjusted diluted EPS (non-GAAP)
$
12.18
$
12.73
—
$
13.03
Adjusted diluted EPS (non-GAAP) growth
4.5
%
—
7.0
%
Reconciliation of Non-GAAP
Financial Measures – Fiscal 2023 Outlook for Effective Tax Rate
(GAAP) to Adjusted Effective Tax Rate (Non-GAAP) (3) (6)
(Unaudited)
Consolidated & Core
Business:
Outlook Fiscal 2023
Effective tax rate, as reported (GAAP)
13.0
%
—
14.0
%
Acquisition-related expenses
—
%
—
—
%
EPA compliance costs
(0.7
)%
—
(0.6
)%
Subtotal
12.3
%
—
13.4
%
Amortization of intangible assets
(0.2
)%
—
(0.2
)%
Non-cash share-based compensation
(0.4
)%
—
(0.5
)%
Adjusted effective tax rate (non-GAAP)
11.7
%
—
12.7
%
HELEN OF TROY LIMITED AND SUBSIDIARIES
Notes to Press Release
- Organic business refers to net sales revenue associated with
product lines or brands after the first twelve months from the date
the product line or brand is acquired, excluding the impact that
foreign currency remeasurement had on reported net sales revenue.
Net sales revenue from internally developed brands or product lines
is considered Organic business activity.
- Fiscal 2022 includes approximately nine weeks of operating
results from Osprey, acquired on December 29, 2021.
- 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.
- Leadership Brand net sales consists of revenue from the OXO,
Hydro Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools and
Drybar.
- Online channel net sales revenue includes direct to consumer
online net sales, net sales to retail customers fulfilling
end-consumer online orders and net sales to pure-play online
retailers.
- This press release contains non-GAAP financial measures.
Adjusted Operating Income, Adjusted Operating Margin, Core and
Non-Core Adjusted Operating Income, Core and Non-Core Adjusted
Operating Margin, Adjusted Effective Tax Rate, Core 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.
- Charges incurred in conjunction with EPA packaging compliance
for certain products in the air filtration, water filtration and
humidification categories within the Health & Wellness
segment.
- Acquisition-related expenses associated with the definitive
agreement to acquire Osprey included in SG&A for the fiscal
quarter and year ended February 28, 2022.
- Amortization of intangible assets.
- Non-cash share-based compensation.
- Asset impairment charges related to goodwill and intangible
assets. The impairment charges were related to assets of the
Personal Care business classified as held for sale within the
Beauty segment
- Charges incurred in connection with the Company’s restructuring
plan (Project Refuel).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220427005047/en/
Investor Contact: Helen of Troy Limited Anne Rakunas,
Director, External Communications (915) 225-4841
ICR, Inc. Allison Malkin, Partner (203) 682-8200
Helen of Troy (NASDAQ:HELE)
Historical Stock Chart
From Aug 2024 to Sep 2024
Helen of Troy (NASDAQ:HELE)
Historical Stock Chart
From Sep 2023 to Sep 2024