Expected to Be Immediately Accretive to Sales, Gross Margin, Cash
Flow, Adjusted EBITDA Margin, and Diluted Earnings per Share
Complements and Extends Helen of Troy’s Housewares Segment with a
Strong Outdoor Brand in a Growth Category
Helen of Troy to Hold a Conference Call at 11:00 a.m. ET Today
EL PASO, Texas--(BUSINESS WIRE)--Feb. 29, 2016--
Helen of Troy Limited (NASDAQ, NM:HELE), designer, developer and
worldwide marketer of consumer brand-name housewares, health and home,
nutritional supplement and beauty products, announced that one of its
subsidiaries has entered into a definitive purchase agreement to acquire
Hydro Flask and all membership units of Steel Technology, LLC. Hydro
Flask is a leading designer, distributor and marketer of high
performance insulated hydration vessels for active lifestyles. Hydro
Flask adds a fast growing brand that has built equity among outdoor and
active lifestyle enthusiasts with a product lineup, innovation pipeline
and margin profile that complements Helen of Troy’s Housewares segment
and extends its reach into the Outdoor and Athletic Specialty, Natural
Foods and e-commerce channels.
The Hydro Flask acquisition is an excellent fit with Helen of Troy’s
strategic goal of investing its strong cash flow in businesses that can
accelerate its profitable growth in categories where it can add value.
The purchase price is expected to be approximately $210 million in cash,
subject to certain customary closing adjustments, implying a pre-synergy
multiple of less than 12 times projected calendar year 2016 adjusted
EBITDA. We expect calendar year 2016 net sales revenue of approximately
$65 - $70 million. Hydro Flask is expected to be immediately accretive
to Helen of Troy’s sales growth rate, gross margin, cash flow, adjusted
EBITDA margin and diluted earnings per share.
“We are delighted to announce the acquisition of Hydro Flask, adding a
well-respected and fast growing outdoor brand to our thriving Housewares
business,” said Helen of Troy CEO Julien Mininberg. “In less than five
years, Hydro Flask has become a strong #2 in hydration bottles in the
outdoor & fitness channels. The business has more than quadrupled in
size since the beginning of calendar year 2014, grew over 50% in
calendar year 2015, and has been the key driver behind the majority of
the growth of the category itself. Hydro Flask is led by a group of
passionate end users who are highly skilled at developing the premium
segment of their category and an authentic brand culture with high
quality products that delight consumers. Outdoor enthusiasts love Hydro
Flask’s stainless steel hydration products, as well as its genuine brand
heritage rooted in the outdoor mecca of Bend, Oregon. Hydro Flask’s team
will remain in Bend, where its employees live every day with the same
love and respect for the outdoors they share with their rapidly growing
consumer base.”
Mr. Mininberg continued, “Our third acquisition in less than two years,
this transaction marks Helen of Troy’s first new brand in its Housewares
segment since acquiring OXO in 2004. OXO has since tripled its revenues
solely through organic growth and has established a track record of
delivering strong margins. We are dedicated to providing innovative
consumer products that make everyday living easier. From its founding 25
years ago, the OXO brand has been a hallmark of this mission, recognized
globally for how a well-executed Universal Design philosophy creates
products that benefit consumers in a growing array of categories ranging
from kitchen gadgets to high chairs. Hydro Flask adds another innovative
growth brand to this model. Managing Hydro Flask within Helen of Troy’s
Housewares segment should allow us to leverage our proven expertise in
innovation, product design and category development. We also expect to
leverage key Helen of Troy shared services where we can add value such
as our larger infrastructure and international footprint, while
preserving the qualities of Hydro Flask we admire. We are very pleased
to welcome the Hydro Flask management team to the Helen of Troy family,
along with the strong partnership they have built with key outdoor
channel retailers and major e-tailers, and the foundation for future
growth they have created.”
Conference Call and Webcast:
The Company will conduct a teleconference in conjunction with today’s
announcement of the acquisition. The teleconference begins at 11:00 a.m.
Eastern Time today, Monday, February 29, 2016. Institutional investors
and analysts interested in participating in the call are invited to dial
(877) 407-0784 approximately ten minutes prior to the start of the call.
The conference call will also be webcast live at: www.hotus.com.
A telephone replay of this call will be available at 2:00 p.m. Eastern
Time on February 29, 2016 until 11:59 p.m. Eastern Time on March 7, 2016
and can be accessed by dialing (877) 870-5176 and entering replay pin
number 13631737.
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 periodically discloses certain financial
measures that may be considered non-GAAP financial measures, such as
adjusted operating income, adjusted income, adjusted diluted EPS, EBITDA
and adjusted EBITDA.
Adjusted EBITDA is considered a non-GAAP financial measure. Adjusted
EBITDA is defined as earnings before interest, taxes, depreciation,
amortization, non-cash asset impairment charges, non-cash share based
compensation and intangible asset amortization expense.
About Helen of Troy Limited:
Helen of Troy Limited is a leading global consumer products company
offering creative solutions for its customers through a strong portfolio
of well-recognized and widely-trusted brands, including: Housewares:
OXO®, Good Grips®, Soft Works®, OXO tot® and OXO Steel®; Health &
Home: Vicks®, Braun®, Honeywell®, PUR®, Febreze®, Stinger®,
Duracraft® and SoftHeat®; and Beauty: Revlon®, Vidal Sassoon®,
Dr. Scholl's®, Pro Beauty Tools®, Sure®, Pert®, Infusium23®, Brut®,
Ammens®, Hot Tools®, Bed Head®, Karina®, Ogilvie® and Gold 'N Hot®. The Nutritional
Supplements segment was formed with the acquisition of Healthy
Directions, a U.S. market leader in premium doctor-branded vitamins,
minerals and supplements, as well as other health products sold directly
to consumers. The Honeywell® trademark is used under license from
Honeywell International Inc. The Vicks®, Braun®, Febreze® and Vidal
Sassoon® trademarks are used under license from The Procter & Gamble
Company. The Revlon® trademark is used under license from Revlon
Consumer Products Corporation. The Bed Head® trademark is used under
license from Unilever PLC. The Dr. Scholl's® trademark is used under
license from MSD Consumer Care, Inc.
For more information about Helen of Troy, please visit www.hotus.com.
Forward Looking Statements:
This press release may contain forward-looking statements, which are
subject to change. The forward-looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Any or all of the forward-looking statements may turn out
to be wrong. They can be affected by inaccurate assumptions or by known
or unknown risks and uncertainties. Many of these factors will be
important in determining the Company's actual future results.
Consequently, no forward-looking statement can be guaranteed. Actual
future results may vary materially from those expressed or implied in
any forward-looking statements. The forward-looking statements are
qualified in their entirety by a number of risks that could cause actual
results to differ materially from historical or anticipated results.
Generally, the words "anticipates", "estimates", "believes", "expects",
"plans", "may", "will", "should", "seeks", "project", "predict",
"potential", "continue", "intends", and other similar words identify
forward-looking statements. The Company cautions readers not to place
undue reliance on forward-looking statements. The Company intends its
forward-looking statements to speak only as of the time of such
statements, and does not undertake to update or revise them as more
information becomes available. The forward-looking statements contained
in this press release should be read in conjunction with, and are
subject to and qualified by, the risks described in the Company's Form
10-K for the year ended February 28, 2015 and in our other filings with
the SEC. Investors are urged to refer to the risk factors referred to
above for a description of these risks. Such risks include, among
others, the departure and recruitment of key personnel, the Company's
ability to deliver products to our customers in a timely manner, the
costs of complying with the business demands and requirements of large
sophisticated customers, the Company's relationship with key customers
and licensors, our dependence on the strength of retail economies and
vulnerabilities to an economic downturn, expectations regarding
acquisitions and the integration of acquired businesses, exchange rate
risks, disruptions in U.S., European and other international credit
markets, risks associated with weather conditions, the Company’s
dependence on foreign sources of supply and foreign manufacturing, risks
associated with the availability, purity and integrity of materials used
in nutritional supplements, the impact of changing costs of raw
materials and energy on cost of goods sold and certain operating
expenses, the Company's geographic concentration of certain U.S.
distribution facilities, which increases our exposure to
significant shipping disruptions and added shipping and storage costs,
the Company's projections of product demand, sales, net income and
earnings per share are highly subjective and our future net sales
revenue and net income could vary in a material amount from such
projections, circumstances that may contribute to future impairment of
goodwill, intangible or other long-lived assets, the risks associated
with the use of trademarks licensed from and to third parties, the
Company's ability to develop and introduce innovative new products to
meet changing consumer preferences, increased product liability and
reputational risks associated with the formulation and distribution of
nutritional supplements, risks associated with adverse publicity and
negative public perception regarding the use of nutritional supplements,
trade barriers, exchange controls, expropriations, and other risks
associated with foreign operations, the Company’s debt leverage and the
constraints it may impose, the costs, complexity and challenges of
upgrading and managing our global information systems, the risks
associated with information security breaches, the increased complexity
of compliance with a number of new government regulations as a result of
adding nutritional supplements to the Company’s portfolio of products,
the risks associated with tax audits and related disputes with taxing
authorities, potential changes in laws, including tax laws, and the
Company's ability to continue to avoid classification as a controlled
foreign corporation.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160229005806/en/
Source: Helen of Troy Limited
For Helen of Troy Limited:
Investors:
ICR, Inc.
Allison
Malkin, 203-682-8200
or
Anne Rakunas, 310-954-1113