Transaction helps further focus the Company around its Leadership
Brands; retains DTC capability
EL PASO, Texas--(BUSINESS WIRE)--
Helen of Troy Limited (NASDAQ:HELE) (“the Company”), designer,
developer and worldwide marketer of consumer brand-name housewares,
health and home, nutritional supplement and beauty products, today
announced it has sold Healthy Directions LLC (“Healthy Directions”) and
subsidiaries, which make up its Nutritional Supplements segment, to
Direct Digital LLC (“Direct Digital”), a leader in the areas of product
development and marketing within the health and wellness space. Healthy
Directions is a leading provider of premier doctor-formulated
nutritional supplements, products, and expert natural health guidance
sold directly to consumers. The sale of Healthy Directions advances the
Company’s strategy to focus its resources on its Leadership Brands. The
Company’s Leadership Brands are among the highest volume, highest margin
and most asset-efficient businesses at Helen of Troy.
Proceeds from the sale are comprised of $46 million in cash 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 transaction is also subject to customary
working capital and other adjustments. Proceeds will be used to pay down
debt, make accretive acquisitions or opportunistic share repurchases to
create further shareholder value. The Company will further discuss the
transaction during its third quarter fiscal 2018 earnings conference
call, currently scheduled for January 8, 2017 at 9:00 a.m. Eastern.
Julien R. Mininberg, Chief Executive Officer, stated: “We are pleased to
have entered into this transaction. We believe Healthy Directions and
its highly dedicated staff will benefit from its new home with Direct
Digital, a privately-held company focused on the vitamin, mineral and
supplement market. We believe Direct Digital is well-positioned to take
Healthy Directions to its next phase of growth. As we part ways with
Healthy Directions, we thank the management and staff for all their
efforts, and wish them well.”
Mr. Mininberg continued: “This transaction will strengthen the overall
portfolio of Helen of Troy, and focus our resources toward our most
attractive business prospects, including our seven Leadership Brands.
These brands include Braun, Honeywell, PUR, Vicks, OXO, Hydro Flask and
Hot Tools, all of which can fully leverage our shared services platform,
strong balance sheet, and global presence as we continue to execute our
strategic transformation plan. Our strategic plan also includes seeking
further acquisition opportunities. The direct-to-consumer systems and
fulfillment capability we have built for Healthy Directions will
continue to be of value to Helen of Troy’s remaining portfolio. This
will allow us to continue building on the investments and know-how in
direct-to-consumer online sales, and the fulfillment efficiencies we
have gained in our distribution center.”
Brandon Adcock, Co-founder and president of Direct Digital, LLC, said,
“We are very excited about today’s announcement and welcome the
collective talent and energy of the Healthy Directions team to the
Direct Digital family. We are extremely pleased to add Healthy
Directions to our health and wellness platform. Healthy Directions’
family of highly respected doctors and wellness experts will be a
tremendous complement to our portfolio of nutritional brands. The
Healthy Directions marketing platform will further strengthen Direct
Digital’s omni channel strategy by adding robust, authoritative content,
as well as market leading direct mail capabilities. We believe this
combination, together with our distinctive entrepreneurial culture, lean
operating structure, and efficient business model, will enable Direct
Digital to continue to bring innovative and category leading nutritional
supplements to market.”
Cantor Fitzgerald provided lead advisory services and Baker & McKenzie
LLP served as legal counsel to Helen of Troy on the transaction.
Deloitte Corporate Finance LLC acted as financial advisor and Davis &
Gilbert LLP served as legal counsel to Direct Digital LLC on the
transaction.
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 EPS,
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 income.
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, risks to the Nutritional Supplements segment associated with
the availability, purity and integrity of materials used in the
manufacture of vitamins, minerals and supplements, the impact of
changing costs of raw materials, 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, increased product liability and
reputational risks associated with the formulation and distribution of
vitamins, minerals and supplements, the risks associated with potential
adverse publicity and negative public perception regarding the use of
vitamins, minerals and supplements, 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 increased complexity of compliance with new
government regulations covering vitamins, minerals and supplements, 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.
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®, Bed Head®, Dr. Sinatra®, Dr. David Williams, and Dr. Whitaker®.
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 www.hotus.com.
About Direct Digital:
Direct Digital, LLC, is based in Charlotte, NC, and Boston, MA and is a
leader in the areas of product development and marketing within the
health and wellness space. Direct Digital owns the Nugenix®, Instaflex®,
Peptiva™, Lumiday® and Luminite® brands, which are distributed
throughout North America and internationally, direct-to-consumer and
leading national retailers.
For additional information, please visit http://www.DirectDigitalllc.com.
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Source: Helen of Troy Limited