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Helen of Troy Limited Reports Third Quarter Fiscal 2021 Results

01/07/21

Consolidated Net Sales Growth of 34.3%; Organic Business Net Sales Growth of 30.3%
GAAP Diluted Earnings Per Share (“EPS”) of $3.34
Adjusted Diluted EPS Growth of 20.5% to $3.76
Initiates Fiscal 2021 GAAP Diluted EPS Outlook of $10.29 - $10.46
Initiates Fiscal 2021 Adjusted Diluted EPS Outlook of $11.50 - $11.70
Initiates Fiscal 2021 Consolidated Net Sales Growth Outlook of 21.5% - 23.0%

EL PASO, Texas--(BUSINESS WIRE)-- 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, 2020.

Executive Summary – Third Quarter of Fiscal 2021

  • Consolidated net sales revenue increase of 34.3%, including:
    • An increase in Leadership Brand net sales of 33.9%
    • An increase in online channel net sales of approximately 34%
    • Organic business net sales growth of 30.3%
    • Core business net sales growth of 35.2%
  • GAAP consolidated operating income of $100.7 million, or 15.8% of net sales, compared to $79.3 million, or 16.7% of net sales, for the same period last year
  • Non-GAAP consolidated adjusted operating income increase of 24.0% to $111.9 million, or 17.6% of net sales, compared to $90.3 million, or 19.0% of net sales, for the same period last year
  • GAAP diluted EPS of $3.34, compared to $2.71 for the same period last year
  • Non-GAAP adjusted diluted EPS increase of 20.5% to $3.76, compared to $3.12 for the same period last year
  • Net cash provided by operating activities for the first nine months of the fiscal year of $249.7 million, compared to $101.4 million for the same period last year
  • Non-GAAP free cash flow for the first nine months of the fiscal year of $230.3 million, compared to $88.2 million for the same period last year
  • Repurchased 960,829 shares of common stock in the open market during the quarter for $191.6 million, at an average price of $199.42 per share

Julien R. Mininberg, Chief Executive Officer, stated: “Our business delivered an exceptional third quarter in what is shaping up to be another year of outstanding results for Helen of Troy. We delivered 34.3% growth in consolidated net sales behind continued momentum across each of our business segments, our Leadership Brands, the online channel, brick and mortar, organic business, core business, and international. During the quarter, adjusted EPS grew 20.5%, even as we invested in key initiatives designed to continue driving our value creation flywheel for next fiscal year and for the back half of Phase II. Year to date, we have outstanding momentum, with consolidated net sales growth of 25.6%, adjusted EPS growth of 35.4%, and growth in cash flow from operations of 146.3% to $249.7 million. We are very pleased to deliver these results and now provide full fiscal year guidance projecting that Helen of Troy will cross the $2 billion sales milestone for the first time and grow its adjusted EPS by $2.20 per share or more this year. This is tremendous progress in our second year of Phase II, and well ahead of the five-year glidepath we laid out during our May 2019 Investor Day. The strength of our execution is a testament to our exceptional associates around the world who continue to thrive as we rise together to overcome the many challenges of COVID-19, live our culture, and build for the future.”

Mr. Mininberg concluded: “We are excited to be in a position this fiscal year to use the strength of our results and balance sheet to make long-term investments needed to catch up with our rapid growth over the past several years and to invest in the building blocks and capabilities we believe will create incremental revenue and earnings growth during the rest of Phase II. We like our chosen initiatives, remain clearly focused on leveraging our diversified portfolio and expect to continue to develop additional opportunities to further supplement future earnings growth as we head into fiscal 2022.”

 

Three Months Ended November 30,

(in thousands)

Housewares

 

Health & Home

 

Beauty

 

Total

Fiscal 2020 sales revenue, net

$

183,211

 

 

$

185,810

 

 

$

105,716

 

 

$

474,737

 

Organic business (1)

38,836

 

 

62,887

 

 

42,072

 

 

143,795

 

Impact of foreign currency

353

 

 

1,461

 

 

(110

)

 

1,704

 

Acquisition (2)

 

 

 

 

17,501

 

 

17,501

 

Change in sales revenue, net

39,189

 

 

64,348

 

 

59,463

 

 

163,000

 

Fiscal 2021 sales revenue, net

$

222,400

 

 

$

250,158

 

 

$

165,179

 

 

$

637,737

 

 

 

 

 

 

 

 

 

Total net sales revenue growth (decline)

21.4

%

 

34.6

%

 

56.2

%

 

34.3

%

Organic business

21.2

%

 

33.8

%

 

39.8

%

 

30.3

%

Impact of foreign currency

0.2

%

 

0.8

%

 

(0.1

)%

 

0.4

%

Acquisition

%

 

%

 

16.6

%

 

3.7

%

 

 

 

 

 

 

 

 

Operating margin (GAAP)

 

 

 

 

 

 

 

Fiscal 2021

16.9

%

 

12.2

%

 

19.7

%

 

15.8

%

Fiscal 2020

23.1

%

 

13.1

%

 

11.9

%

 

16.7

%

Adjusted operating margin (non-GAAP)

 

 

 

 

 

 

 

Fiscal 2021

18.4

%

 

14.1

%

 

21.7

%

 

17.6

%

Fiscal 2020

24.3

%

 

15.5

%

 

16.0

%

 

19.0

%

Consistent with its strategy of focusing on its Leadership Brands, during the fourth quarter of fiscal 2020, the Company committed to a plan to divest certain assets within its mass channel personal care business (“Personal Care”). The assets to be divested include intangible assets, inventory and fixed assets related to the Company's mass channel liquids, powder and aerosol products under brands such as Pert, Brut, Sure and Infusium. The Company expects the divestiture to occur within fiscal 2021. Accordingly, the Company has classified the identified assets of the disposal group as held for sale. In connection with this change, the Company now defines Core as strategic business that it expects to be an ongoing part of its operations, and Non-Core as business or assets (including assets held for sale) that it expects to divest within a year of its designation as Non-Core. Organic business now refers to net sales revenue associated with product lines or brands after the first twelve months from the date the product line or brand is acquired, not including the impact that foreign currency had on reported net sales revenue.

 

Three Months Ended November 30,

(in thousands)

Housewares

 

Health & Home

 

Beauty

 

Total

Fiscal 2020 sales revenue, net

$

183,211

 

 

$

185,810

 

 

$

105,716

 

 

$

474,737

 

Core business (2) (3)

39,189

 

 

64,348

 

 

63,487

 

 

167,024

 

Non-Core business (Personal Care) (3)

 

 

 

 

(4,024

)

 

(4,024

)

Change in sales revenue, net

39,189

 

 

64,348

 

 

59,463

 

 

163,000

 

Fiscal 2021 sales revenue, net

$

222,400

 

 

$

250,158

 

 

$

165,179

 

 

$

637,737

 

 

 

 

 

 

 

 

 

Total net sales revenue growth (decline)

21.4

%

 

34.6

%

 

56.2

%

 

34.3

%

Core business

21.4

%

 

34.6

%

 

60.1

%

 

35.2

%

Non-Core business (Personal Care)

%

 

%

 

(3.8

)%

 

(0.8

)%

Consolidated Operating Results - Third Quarter Fiscal 2021 Compared to Third Quarter Fiscal 2020

  • Consolidated net sales revenue increased $163.0 million, or 34.3%, to $637.7 million compared to $474.7 million. The growth was driven by an Organic business increase of $143.8 million, or 30.3%, primarily reflecting growth in consolidated brick and mortar, online, and international sales. The Drybar Products acquisition also contributed $17.5 million, or 3.7% to consolidated net sales revenue growth. These factors were partially offset by reduced store traffic at certain retail brick and mortar stores, a soft back-to-school season due to COVID-19 related school closures and a decline in Non-Core business.
  • Consolidated gross profit margin increased 0.9 percentage points to 45.1%, compared to 44.2%. The increase was primarily due to a favorable product mix within Health & Home and the Organic Beauty business, the favorable impact of the Drybar Products acquisition, and a favorable channel mix within the Housewares segment. These factors were partially offset by higher inbound freight expense and an unfavorable product mix in the Housewares segment.
  • Consolidated selling, general and administrative expense (“SG&A”) ratio increased 1.8 percentage points to 29.3%, compared to 27.5%. The increase was primarily due to increased marketing expense, increased freight and distribution expense, higher royalty expense, increased legal and other professional fees, and higher bad debt expense. These factors were partially offset by the impact that higher net sales revenue had on net operating leverage, travel expense reductions due to COVID-19, and the favorable comparative impact of acquisition-related expenses for the purchase of Drybar Products incurred in the prior year period.
  • Consolidated operating income was $100.7 million, or 15.8% of net sales revenue, compared to $79.3 million, or 16.7% of net sales revenue. The decrease in consolidated operating margin was primarily driven by the increase in the SG&A ratio, partially offset by the increase in gross profit margin.
  • Income tax expense as a percentage of income before tax was 14.0% compared to 10.3% for the same period last year. The year-over-year increase in the effective tax rate is primarily due to an increase in liabilities related to uncertain tax positions.
  • Net income increased 22.6% to $84.2 million, compared to $68.7 million. Diluted EPS was $3.34 compared to $2.71. Diluted EPS increased primarily due to higher operating income in the Beauty and Health & Home segments, partially offset by lower operating income in the Housewares segment and higher income tax expense.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 24.0% to $117.0 million compared to $94.4 million.

On an adjusted basis for the third quarter of fiscal 2021 and 2020, excluding non-cash asset impairment charges, acquisition-related expenses, restructuring charges, tax reform, amortization of intangible assets, and non-cash share-based compensation, as applicable:

  • Adjusted operating income increased $21.6 million, or 24.0%, to $111.9 million, or 17.6% of net sales, compared to $90.3 million, or 19.0% of net sales. The 1.4 percentage point decrease in adjusted operating margin primarily reflects increased marketing expense, increased freight and distribution expense, an unfavorable product mix in the Housewares segment, higher royalty expense, increased legal and other professional fees, and higher bad debt expense. These factors were partially offset by the favorable impact that higher overall net sales revenue had on operating leverage, a favorable product mix within Health & Home and the Organic Beauty business, a favorable channel mix within the Housewares segment, and travel expense reductions due to COVID-19.
  • Adjusted income increased $15.7 million, or 19.8%, to $94.8 million, compared to $79.1 million for the same period last year. Adjusted diluted EPS increased 20.5% to $3.76 compared to $3.12. The increase in adjusted diluted EPS was primarily due to higher operating income in the Beauty and Health & Home segments, partially offset by lower operating income in the Housewares segment and higher income tax expense.

Segment Operating Results - Third Quarter Fiscal 2021 Compared to Third Quarter Fiscal 2020

Housewares net sales revenue increased $39.2 million, or 21.4%, to $222.4 million, compared to $183.2 million. Growth was driven by an Organic business increase of $38.8 million, or 21.2%, primarily due to higher demand for OXO brand products as consumers spent more time at home cooking, cleaning, organizing and pantry loading in response to COVID-19, which resulted in increases in brick and mortar, online and international sales. These factors were partially offset by the COVID-19 related impact of reduced store traffic at certain retail brick and mortar stores, a soft back-to-school season due to COVID-19, lower closeout channel sales and increased competitive activity. Operating income was $37.7 million, or 16.9% of segment net sales revenue, compared to $42.3 million, or 23.1% of segment net sales revenue. The 6.2 percentage point decrease in segment operating margin was primarily due to a less favorable product mix, higher marketing expense, increased freight and distribution expense to support strong demand, higher royalty expense, and increased legal and other professional fees. These factors were partially offset by the favorable impact that higher overall net sales revenue had on operating leverage, a more favorable channel mix, and travel expense reductions due to COVID-19. Adjusted operating income decreased 8.3% to $40.9 million, or 18.4% of segment net sales revenue compared to $44.6 million, or 24.3% of segment net sales revenue.

Health & Home net sales revenue increased $64.3 million, or 34.6%, to $250.2 million, compared to $185.8 million. The increase was primarily driven by an Organic business increase of $62.9 million, or 33.8%, primarily due to strong consumer demand for healthcare and healthy living products in domestic and international markets, primarily in thermometry and air purification, in both brick and mortar and online channels, mainly attributable to COVID-19. These factors were partially offset by declines in non-strategic categories. Operating income was $30.5 million, or 12.2% of segment net sales revenue, compared to $24.4 million, or 13.1% of segment net sales revenue. The 0.9 percentage point decrease in segment operating margin was primarily due to increased marketing expense, higher performance-based annual incentive compensation expense, higher royalty expense, and the unfavorable impact of foreign currency exchange and forward contract settlements year-over-year. These factors were partially offset by the favorable impact that higher overall net sales revenue had on operating leverage and the impact of a more favorable product mix. Adjusted operating income increased 22.5% to $35.3 million, or 14.1% of segment net sales revenue, compared to $28.8 million, or 15.5% of segment net sales revenue.

Beauty net sales revenue increased $59.5 million, or 56.2%, to $165.2 million, compared to $105.7 million. The increase was driven by an Organic business increase of $42.1 million, or 39.8%, as well as the net sales revenue contribution of $17.5 million, or 16.6% growth, from the acquisition of Drybar Products. The Organic business increase primarily reflects growth in the appliance category in both online and brick and mortar channels driven by the strength of the One-Step family of products, a shift to greater and more aggressive early season retail holiday promotions during the third quarter, expanded distribution, primarily in the club channel, and an increase in international sales. These factors were partially offset by reduced store traffic at certain retail brick and mortar stores due to COVID-19 and a net sales revenue decline in Non-Core business. Operating income was $32.6 million, or 19.7% of segment net sales revenue, compared to $12.6 million, or 11.9% of segment net sales revenue. The 7.8 percentage point increase in segment operating margin was primarily due to the favorable impact that higher overall net sales revenue had on operating leverage, the margin impact of a more favorable product mix, the favorable comparative impact of acquisition-related expenses for the purchase of Drybar Products incurred in the prior year period, and travel expense reductions due to COVID-19. These factors were partially offset by higher personnel expense related to the acquisition of Drybar Products, increased marketing expense, higher performance-based annual incentive compensation expense, higher bad debt expense, and higher legal and other professional fees. Adjusted operating income increased 111.7% to $35.8 million, or 21.7% of segment net sales revenue, compared to $16.9 million, or 16.0% of segment net sales revenue.

Balance Sheet and Cash Flow Highlights - Third Quarter Fiscal 2021 Compared to Third Quarter Fiscal 2020

  • Cash and cash equivalents totaled $156.7 million, compared to $19.6 million.
  • Accounts receivable turnover was 70.0 days, compared to 68.9 days.
  • Inventory was $383.4 million, compared to $333.7 million. Trailing twelve-month inventory turnover was 3.6 times compared to 2.9 times.
  • Total short- and long-term debt was $440.4 million, compared to $244.2 million.
  • Net cash provided by operating activities for the first nine months of the fiscal year was $249.7 million, compared to $101.4 million.

Subsequent Event

On December 22, 2020, the Company entered into an amended and extended Trademark License Agreement with Revlon to license Revlon’s trademark for hair care appliances and tools (the “Revlon License”). The Revlon License grants the Company an exclusive, global, fully paid-up license to use the licensed trademark to manufacture, sell and distribute licensed merchandise in accordance with the terms of the agreement. The Revlon License has an initial term of 40 years, which will automatically renew at the end of the initial term for three consecutive additional 20-year periods unless the Company gives notice of non-renewal. The Revlon License amends and restates the existing Revlon trademark licensing agreements entirely, and eliminates ongoing royalties the Company has historically paid and recognized as expense within SG&A in accordance with such agreements. In exchange for this exclusive global license, the Company paid a one-time, up-front license fee of $72.5 million, which will be recorded as an intangible asset at cost and amortized on a straight-line basis over a useful life of 40 years, representing the initial term. As a result of the Revlon License, the Company is no longer obligated to pay royalties or any other fees to Revlon, and thus will not recognize these expenses after December 22, 2020, the effective date of the Revlon License.

Fiscal 2021 Annual Outlook

For fiscal 2021, the Company expects consolidated net sales revenue in the range of $2.075 to $2.1 billion, which implies consolidated sales growth of 21.5% to 23.0%.

The Company’s net sales outlook reflects the following expectations by segment:

  • Housewares net sales growth of 12.0% to 12.5%;
  • Health & Home net sales growth of 27.5% to 30.0%; and
  • Beauty net sales growth of 27.0% to 28.0%.

The Company expects consolidated GAAP diluted EPS of $10.29 to $10.46 and non-GAAP adjusted diluted EPS in the range of $11.50 to $11.70, which excludes any asset impairment charges, restructuring charges, tax reform, share-based compensation expense and intangible asset amortization expense.

The Company’s net sales and EPS growth outlook reflects the following:

  • the assumption that COVID-19 related demand trends seen in the second and third quarters of fiscal 2021 continue through the fourth quarter;
  • the assumption that the impact of the cough/cold/flu season on the fourth quarter will be below average due to the COVID-19 impact on back to school, work from home, travel, brick and mortar shopping, and group gatherings, compared to an above average impact in the same period last year;
  • the more difficult comparison to the fourth quarter of fiscal 2020, which included initial COVID-19 demand surges in the Health & Home segment and an initial surge in demand for the One-Step family of products in the Beauty segment;
  • an estimated increase in short- and long-term growth investments of approximately 50% for the full fiscal year 2021, which falls entirely in the second half of the year due to cost reduction initiatives in place during the first half of the year;
  • the assumption that December 2020 foreign currency exchange rates will remain constant for the remainder of the fiscal year; and
  • an estimated weighted average diluted shares outstanding of 25.3 million.

The Company expects a reported GAAP effective tax rate range of 6.7% to 6.8%, and an adjusted effective tax rate range of 9.5% to 9.7% for the full fiscal year 2021. Please refer to the schedule entitled “Effective Tax Rate (GAAP) and Adjusted Effective Tax Rate (Non-GAAP)” in the accompanying tables to this press release.

The Company expects capital asset expenditures of $32 to $35 million for the full fiscal year 2021, which includes expected initial expenditures related to a new 2 million square foot distribution facility with state of the art automation for our Housewares segment. The Company expects intangible asset expenditures of $74 to $75 million, which includes the $72.5 million incurred in December related to the Revlon License agreement.

The likelihood and potential impact of any fiscal 2021 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, Thursday, January 7, 2021. Investors and analysts interested in participating in the call are invited to dial (877) 407-3982 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at: http://investor.helenoftroy.com. A telephone replay of this call will be available at 12:00 p.m. Eastern Time on January 7, 2021 until 11:59 p.m. Eastern Time on January 14, 2021 and can be accessed by dialing (844) 512-2921 and entering replay pin number 13714008. A replay of the webcast will remain available on the website for one year.

Non-GAAP Financial Measures

The Company reports and discusses its operating results using financial measures consistent with accounting principles generally accepted in the United States of America (“GAAP”). To supplement its presentation, the Company discloses certain financial measures that may be considered non-GAAP such as adjusted operating income, adjusted operating margin, adjusted effective tax rate, adjusted income, adjusted diluted earnings per share (“EPS”), Core and Non-Core adjusted diluted EPS, EBITDA, adjusted EBITDA, and free cash flow, which are presented in accompanying tables to this press release along with a reconciliation of these financial measures to their corresponding GAAP-based measures presented in the Company’s condensed consolidated statements of income and cash flows. For additional information see Note 9 to the accompanying tables to this Press Release.

About Helen of Troy Limited

Helen of Troy Limited (NASDAQ: HELE) is a leading global consumer products company offering creative solutions for its customers through a strong portfolio of well-recognized and widely-trusted brands, including OXO, Hydro Flask, Vicks, Braun, Honeywell, PUR, Hot Tools and Drybar. We sometimes refer to these brands as our Leadership Brands. All trademarks herein belong to Helen of Troy Limited (or its subsidiaries) and/or are used under license from their respective licensors.

For more information about Helen of Troy, please visit http://investor.helenoftroy.com

Forward Looking Statements

Certain written and oral statements made by the Company and subsidiaries of the Company may constitute “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made in this press release. Generally, the words “anticipates”, “believes”, “expects”, “plans”, “may”, “will”, “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 the Company expects or anticipates will occur in the future, including statements related to sales, earnings per share results, and statements expressing general expectations about future operating results, are forward-looking statements and are based upon its current expectations and various assumptions. The Company believes there is a reasonable basis for these expectations and assumptions, but there can be no assurance that the Company will realize these expectations or that these assumptions will prove correct. Forward-looking statements are subject to risks that could cause them to differ materially from actual results. Accordingly, the Company cautions readers not to place undue reliance on forward-looking statements. The forward-looking statements contained in this press release should be read in conjunction with, and are subject to and qualified by, the risks described in the Company’s Form 10-K for the year ended February 29, 2020, 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, our 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, 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 dependence on the strength of retail economies and vulnerabilities to any prolonged economic downturn, including from the effects of COVID-19, our relationships with key customers and licensors, 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 recent, pending 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, the costs, complexity and challenges of upgrading and managing our global information systems, the risks associated with cybersecurity and information security breaches, the risks associated with global legal developments regarding privacy and data security could result in changes to our business practices, penalties, increased cost of operations, or otherwise harm our business, risks associated with foreign currency exchange rate fluctuations, 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, laws relating to environmental policy, personal data, financial regulation, transportation policy and infrastructure policy along with the costs and complexities of compliance with such laws, our ability to continue to avoid classification as a controlled foreign corporation, the risks of new legislation enacted in Bermuda and Barbados in response to the European Union’s review of harmful tax competition, 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, the impact of changing costs of raw materials, labor and energy on cost of goods sold and certain operating expenses, the risks associated with significant tariffs or other restrictions on imports from China or any retaliatory trade measures taken by China, the risks associated with the geographic concentration and peak season capacity of certain U.S. distribution facilities, 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 risks associated with product recalls, product liability, other claims, and related litigation against us and the risks associated with changes in regulations or product certifications.

 

HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Unaudited) (in thousands, except per share data)

 

 

Three Months Ended November 30,

 

2020

 

2019

Sales revenue, net

$

637,737

 

 

100.0

%

 

$

474,737

 

 

100.0

%

Cost of goods sold

350,410

 

 

54.9

%

 

264,764

 

 

55.8

%

Gross profit

287,327

 

 

45.1

%

 

209,973

 

 

44.2

%

Selling, general and administrative expense (“SG&A”)

186,630

 

 

29.3

%

 

130,692

 

 

27.5

%

Restructuring charges

(12

)

 

%

 

12

 

 

%

Operating income

100,709

 

 

15.8

%

 

79,269

 

 

16.7

%

Non-operating income, net

93

 

 

%

 

92

 

 

%

Interest expense

(2,926

)

 

(0.5

)%

 

(2,767

)

 

(0.6

)%

Income before income tax

97,876

 

 

15.3

%

 

76,594

 

 

16.1

%

Income tax expense

13,721

 

 

2.2

%

 

7,895

 

 

1.7

%

Net income

$

84,155

 

 

13.2

%

 

$

68,699

 

 

14.5

%

 

 

 

 

 

 

 

 

Diluted earnings per share (“EPS”)

$

3.34

 

 

 

 

$

2.71

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

25,192

 

 

 

 

25,396

 

 

 

 
 

 

Nine Months Ended November 30,

 

2020

 

2019

Sales revenue, net

$

1,589,424

 

 

100.0

%

 

$

1,265,067

 

 

100.0

%

Cost of goods sold

892,460

 

 

56.1

%

 

723,216

 

 

57.2

%

Gross profit

696,964

 

 

43.9

%

 

541,851

 

 

42.8

%

SG&A

439,646

 

 

27.7

%

 

359,794

 

 

28.4

%

Restructuring charges

355

 

 

%

 

1,061

 

 

0.1

%

Operating income

256,963

 

 

16.2

%

 

180,996

 

 

14.3

%

Non-operating income, net

440

 

 

%

 

313

 

 

%

Interest expense

(9,568

)

 

(0.6

)%

 

(9,291

)

 

(0.7

)%

Income before income tax

247,835

 

 

15.6

%

 

172,018

 

 

13.6

%

Income tax expense

16,061

 

 

1.0

%

 

16,530

 

 

1.3

%

Net income

$

231,774

 

 

14.6

%

 

$

155,488

 

 

12.3

%

 

 

 

 

 

 

 

 

Diluted EPS

$

9.14

 

 

 

 

$

6.15

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

25,350

 

 

 

 

25,295

 

 

 

Condensed Consolidated Statements of Income and Reconciliation of Non-GAAP Financial Measures – Adjusted Operating Income, Adjusted Income and Adjusted Diluted EPS (2) (9)

(Unaudited) (in thousands, except per share data)

 

 

Three Months Ended November 30, 2020

 

As Reported
(GAAP)

 

Adjustments

 

Adjusted
(Non-GAAP)

Sales revenue, net

$

637,737

 

 

100.0

%

 

$

 

 

$

637,737

 

 

100.0

%

Cost of goods sold

350,410

 

 

54.9

%

 

 

 

350,410

 

 

54.9

%

Gross profit

287,327

 

 

45.1

%

 

 

 

287,327

 

 

45.1

%

SG&A

186,630

 

 

29.3

%

 

(4,501

)

(4)

175,390

 

 

27.5

%

 

 

 

 

 

(6,739

)

(5)

 

 

 

Restructuring charges

(12

)

 

%

 

12

 

(6)

 

 

%

Operating income

100,709

 

 

15.8

%

 

11,228

 

 

111,937

 

 

17.6

%

Non-operating income, net

93

 

 

%

 

 

 

93

 

 

%

Interest expense

(2,926

)

 

(0.5

)%

 

 

 

(2,926

)

 

(0.5

)%

Income before income tax

97,876

 

 

15.3

%

 

11,228

 

 

109,104

 

 

17.1

%

Income tax expense

13,721

 

 

2.2

%

 

607

 

 

14,328

 

 

2.2

%

Net income

$

84,155

 

 

13.2

%

 

$

10,621

 

 

$

94,776

 

 

14.9

%

 

 

 

 

 

 

 

 

 

 

Diluted EPS

$

3.34

 

 

 

 

$

0.42

 

 

$

3.76

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

25,192

 

 

 

 

 

 

25,192

 

 

 

 

 

Three Months Ended November 30, 2019

 

As Reported
(GAAP)

 

Adjustments

 

Adjusted
(Non-GAAP)

Sales revenue, net

$

474,737

 

 

100.0

%

 

$

 

 

$

474,737

 

 

100.0

%

Cost of goods sold

264,764

 

 

55.8

%

 

 

 

264,764

 

 

55.8

%

Gross profit

209,973

 

 

44.2

%

 

 

 

209,973

 

 

44.2

%

SG&A

130,692

 

 

27.5

%

 

(4,790

)

(4)

119,669

 

 

25.2

%

 

 

 

 

 

(4,758

)

(5)

 

 

 

 

 

 

 

 

(1,475

)

(7)

 

 

 

Restructuring charges

12

 

 

%

 

(12

)

(6)

 

 

%

Operating income

79,269

 

 

16.7

%

 

11,035

 

 

90,304

 

 

19.0

%

Non-operating income, net

92

 

 

%

 

 

 

92

 

 

%

Interest expense

(2,767

)

 

(0.6

)%

 

 

 

(2,767

)

 

(0.6

)%

Income before income tax

76,594

 

 

16.1

%

 

11,035

 

 

87,629

 

 

18.5

%

Income tax expense

7,895

 

 

1.7

%

 

617

 

 

8,512

 

 

1.8

%

Net income

$

68,699

 

 

14.5

%

 

$

10,418

 

 

$

79,117

 

 

16.7

%

 

 

 

 

 

 

 

 

 

 

Diluted EPS

$

2.71

 

 

 

 

$

0.41

 

 

$

3.12

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

25,396

 

 

 

 

 

 

25,396

 

 

 

Condensed Consolidated Statements of Income and Reconciliation of Non-GAAP Financial Measures – Adjusted Operating Income, Adjusted Income and Adjusted Diluted EPS (2) (9)

(Unaudited) (in thousands, except per share data)

 

 

Nine Months Ended November 30, 2020

 

As Reported
(GAAP)

 

Adjustments

 

Adjusted
(Non-GAAP)

Sales revenue, net

$

1,589,424

 

 

100.0

%

 

$

 

 

$

1,589,424

 

 

100.0

%

Cost of goods sold

892,460

 

 

56.1

%

 

 

 

892,460

 

 

56.1

%

Gross profit

696,964

 

 

43.9

%

 

 

 

696,964

 

 

43.9

%

SG&A

439,646

 

 

27.7

%

 

(13,527

)

(4)

405,465

 

 

25.5

%

 

 

 

 

 

(20,654

)

(5)

 

 

 

Restructuring charges

355

 

 

%

 

(355

)

(6)

 

 

%

Operating income

256,963

 

 

16.2

%

 

34,536

 

 

291,499

 

 

18.3

%

Non-operating income, net

440

 

 

%

 

 

 

440

 

 

%

Interest expense

(9,568

)

 

(0.6

)%

 

 

 

(9,568

)

 

(0.6

)%

Income before income tax

247,835

 

 

15.6

%

 

34,536

 

 

282,371

 

 

17.8

%

Income tax expense

16,061

 

 

1.0

%

 

11,416

 

 

27,477

 

 

1.7

%

Net income

$

231,774

 

 

14.6

%

 

$

23,120

 

 

$

254,894

 

 

16.0

%

 

 

 

 

 

 

 

 

 

 

Diluted EPS

$

9.14

 

 

 

 

$

0.91

 

 

$

10.05

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

25,350

 

 

 

 

 

 

25,350

 

 

 

 

 

Nine Months Ended November 30, 2019

 

As Reported
(GAAP)

 

Adjustments

 

Adjusted
(Non-GAAP)

Sales revenue, net

$

1,265,067

 

 

100.0

%

 

$

 

 

$

1,265,067

 

 

100.0

%

Cost of goods sold

723,216

 

 

57.2

%

 

 

 

723,216

 

 

57.2

%

Gross profit

541,851

 

 

42.8

%

 

 

 

541,851

 

 

42.8

%

SG&A

359,794

 

 

28.4

%

 

(13,129

)

(4)

326,447

 

 

25.8

%

 

 

 

 

 

(18,743

)

(5)

 

 

 

 

 

 

 

 

(1,475

)

(7)

 

 

 

Restructuring charges

1,061

 

 

0.1

%

 

(1,061

)

(6)

 

 

%

Operating income

180,996

 

 

14.3

%

 

34,408

 

 

215,404

 

 

17.0

%

Non-operating income, net

313

 

 

%

 

 

 

313

 

 

%

Interest expense

(9,291

)

 

(0.7

)%

 

 

 

(9,291

)

 

(0.7

)%

Income before income tax

172,018

 

 

13.6

%

 

34,408

 

 

206,426

 

 

16.3

%

Income tax expense

16,530

 

 

1.3

%

 

2,145

 

 

18,675

 

 

1.5

%

Net income

$

155,488

 

 

12.3

%

 

$

32,263

 

 

$

187,751

 

 

14.8

%

 

 

 

 

 

 

 

 

 

 

Diluted EPS

$

6.15

 

 

 

 

$

1.28

 

 

$

7.42

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

25,295

 

 

 

 

 

 

25,295

 

 

 

Consolidated and Segment Net Sales Revenue

(Unaudited) (in thousands)

 

 

Three Months Ended November 30,

 

Housewares

 

Health & Home

 

Beauty

 

Total

Fiscal 2020 sales revenue, net

$

183,211

 

 

$

185,810

 

 

$

105,716

 

 

$

474,737

 

Organic business (1)

38,836

 

 

62,887

 

 

42,072

 

 

143,795

 

Impact of foreign currency

353

 

 

1,461

 

 

(110

)

 

1,704

 

Acquisition (2)

 

 

 

 

17,501

 

 

17,501

 

Change in sales revenue, net

39,189

 

 

64,348

 

 

59,463

 

 

163,000

 

Fiscal 2021 sales revenue, net

$

222,400

 

 

$

250,158

 

 

$

165,179

 

 

$

637,737

 

 

 

 

 

 

 

 

 

Total net sales revenue growth (decline)

21.4

%

 

34.6

%

 

56.2

%

 

34.3

%

Organic business

21.2

%

 

33.8

%

 

39.8

%

 

30.3

%

Impact of foreign currency

0.2

%

 

0.8

%

 

(0.1

)%

 

0.4

%

Acquisition

%

 

%

 

16.6

%

 

3.7

%

 
 

 

Nine Months Ended November 30,

 

Housewares

 

Health & Home

 

Beauty

 

Total

Fiscal 2020 sales revenue, net

$

496,017

 

 

$

499,543

 

 

$

269,507

 

 

$

1,265,067

 

Organic business (1)

68,803

 

 

162,138

 

 

60,946

 

 

291,887

 

Impact of foreign currency

71

 

 

(113

)

 

(3,121

)

 

(3,163

)

Acquisition (2)

 

 

 

 

35,633

 

 

35,633

 

Change in sales revenue, net

68,874

 

 

162,025

 

 

93,458

 

 

324,357

 

Fiscal 2021 sales revenue, net

$

564,891

 

 

$

661,568

 

 

$

362,965

 

 

$

1,589,424

 

 

 

 

 

 

 

 

 

Total net sales revenue growth (decline)

13.9

%

 

32.4

%

 

34.7

%

 

25.6

%

Organic business

13.9

%

 

32.5

%

 

22.6

%

 

23.1

%

Impact of foreign currency

%

 

%

 

(1.2

)%

 

(0.3

)%

Acquisition

%

 

%

 

13.2

%

 

2.8

%

Leadership Brand and Other Net Sales Revenue (2)

(Unaudited) (in thousands)

 

 

Three Months Ended November 30,

 

2020

 

2019

 

$ Change

 

% Change

Leadership Brand sales revenue, net (8)

$

508,210

 

 

$

379,604

 

 

$

128,606

 

 

33.9

%

All other sales revenue, net

129,527

 

 

95,133

 

 

34,394

 

 

36.2

%

Total sales revenue, net

$

637,737

 

 

$

474,737

 

 

$

163,000

 

 

34.3

%

 
 

 

Nine Months Ended November 30,

 

2020

 

2019

 

$ Change

 

% Change

Leadership Brand sales revenue, net (8)

$

1,288,614

 

 

$

1,012,346

 

 

$

276,268

 

 

27.3

%

All other sales revenue, net

300,810

 

 

252,721

 

 

48,089

 

 

19.0

%

Total sales revenue, net

$

1,589,424

 

 

$

1,265,067

 

 

$

324,357

 

 

25.6

%

Consolidated and Segment Net Sales from Core and Non-Core Business (3)

(Unaudited) (in thousands)

 

 

Three Months Ended November 30,

 

Housewares

 

Health & Home

 

Beauty

 

Total

Fiscal 2020 sales revenue, net

$

183,211

 

 

$

185,810

 

 

$

105,716

 

 

$

474,737

 

Core business

39,189

 

 

64,348

 

 

63,487

 

 

167,024

 

Non-Core business (Personal Care)

 

 

 

 

(4,024

)

 

(4,024

)

Change in sales revenue, net

39,189

 

 

64,348

 

 

59,463

 

 

163,000

 

Fiscal 2021 sales revenue, net

$

222,400

 

 

$

250,158

 

 

$

165,179

 

 

$

637,737

 

 

 

 

 

 

 

 

 

Total net sales revenue growth (decline)

21.4

%

 

34.6

%

 

56.2

%

 

34.3

%

Core business

21.4

%

 

34.6

%

 

60.1

%

 

35.2

%

Non-Core business (Personal Care)

%

 

%

 

(3.8

)%

 

(0.8

)%

 
 

 

Nine Months Ended November 30,

 

Housewares

 

Health & Home

 

Beauty

 

Total

Fiscal 2020 sales revenue, net

$

496,017

 

 

$

499,543

 

 

$

269,507

 

 

$

1,265,067

 

Core business

68,874

 

 

162,025

 

 

102,642

 

 

333,541

 

Non-Core business (Personal Care)

 

 

 

 

(9,184

)

 

(9,184

)

Change in sales revenue, net

68,874

 

 

162,025

 

 

93,458

 

 

324,357

 

Fiscal 2021 sales revenue, net

$

564,891

 

 

$

661,568

 

 

$

362,965

 

 

$

1,589,424

 

 

 

 

 

 

 

 

 

Total net sales revenue growth (decline)

13.9

%

 

32.4

%

 

34.7

%

 

25.6

%

Core business

13.9

%

 

32.4

%

 

38.1

%

 

26.4

%

Non-Core business (Personal Care)

%

 

%

 

(3.4

)%

 

(0.7

)%

SELECTED OTHER DATA

 

Reconciliation of Non-GAAP Financial Measures – GAAP Operating Income

to Adjusted Operating Income (Non-GAAP) (9)

(Unaudited) (in thousands)

 
 

 

Three Months Ended November 30, 2020

 

Housewares

 

Health & Home

 

Beauty

 

Total

Operating income, as reported (GAAP)

$

37,658

 

 

16.9

%

 

$

30,478

 

 

12.2

%

 

$

32,573

 

 

19.7

%

 

$

100,709

 

 

15.8

%

Restructuring charges

(12

)

 

%

 

 

 

%

 

 

 

%

 

(12

)

 

%

Subtotal

37,646

 

 

16.9

%

 

30,478

 

 

12.2

%

 

32,573

 

 

19.7

%

 

100,697

 

 

15.8

%

Amortization of intangible assets

523

 

 

0.2

%

 

2,454

 

 

1.0

%

 

1,524

 

 

1.0

%

 

4,501

 

 

0.7

%

Non-cash share-based compensation

2,712

 

 

1.2

%

 

2,359

 

 

0.9

%

 

1,668

 

 

1.0

%

 

6,739

 

 

1.1

%

Adjusted operating income (non-GAAP)

$

40,881

 

 

18.4

%

 

$

35,291

 

 

14.1

%

 

$

35,765

 

 

21.7

%

 

$

111,937

 

 

17.6

%

 

 

Three Months Ended November 30, 2019

 

Housewares

 

Health & Home

 

Beauty

 

Total

Operating income, as reported (GAAP)

$

42,272

 

 

23.1

%

 

$

24,372

 

 

13.1

%

 

$

12,625

 

 

11.9

%

 

$

79,269

 

 

16.7

%

Acquisition-related expenses (7)

 

 

%

 

 

 

%

 

1,475

 

 

1.4

%

 

1,475

 

 

0.3

%

Restructuring charges

 

 

%

 

 

 

%

 

12

 

 

%

 

12

 

 

%

Subtotal

42,272

 

 

23.1

%

 

24,372

 

 

13.1

%

 

14,112

 

 

13.3

%

 

80,756

 

 

17.0

%

Amortization of intangible assets

815

 

 

0.4

%

 

2,492

 

 

1.3

%

 

1,483

 

 

1.4

%

 

4,790

 

 

1.0

%

Non-cash share-based compensation

1,510

 

 

0.8

%

 

1,946

 

 

1.0

%

 

1,302

 

 

1.2

%

 

4,758

 

 

1.0

%

Adjusted operating income (non-GAAP)

$

44,597

 

 

24.3

%

 

$

28,810

 

 

15.5

%

 

$

16,897

 

 

16.0

%

 

$

90,304

 

 

19.0

%

 

 

Nine Months Ended November 30, 2020

 

Housewares

 

Health & Home

 

Beauty

 

Total

Operating income, as reported (GAAP)

$

106,294

 

 

18.8

%

 

$

95,782

 

 

14.5

%

 

$

54,887

 

 

15.1

%

 

$

256,963

 

 

16.2

%

Restructuring charges

251

 

 

%

 

 

 

%

 

104

 

 

%

 

355

 

 

%

Subtotal

106,545

 

 

18.9

%

 

95,782

 

 

14.5

%

 

54,991

 

 

15.2

%

 

257,318

 

 

16.2

%

Amortization of intangible assets

1,541

 

 

0.3

%

 

7,415

 

 

1.1

%

 

4,571

 

 

1.3

%

 

13,527

 

 

0.9

%

Non-cash share-based compensation

8,024

 

 

1.4

%

 

7,166

 

 

1.1

%

 

5,464

 

 

1.5

%

 

20,654

 

 

1.3

%

Adjusted operating income (non-GAAP)

$

116,110

 

 

20.6

%

 

$

110,363

 

 

16.7

%

 

$

65,026

 

 

17.9

%

 

$

291,499

 

 

18.3

%

 

 

Nine Months Ended November 30, 2019

 

Housewares

 

Health & Home

 

Beauty

 

Total

Operating income, as reported (GAAP)

$

109,170

 

 

22.0

%

 

$

51,836

 

 

10.4

%

 

$

19,990

 

 

7.4

%

 

$

180,996

 

 

14.3

%

Acquisition-related expenses (7)

 

 

%

 

 

 

%

 

1,475

 

 

0.5

%

 

1,475

 

 

0.1

%

Restructuring charges

90

 

 

%

 

 

 

%

 

971

 

 

0.4

%

 

1,061

 

 

0.1

%

Subtotal

109,260

 

 

22.0

%

 

51,836

 

 

10.4

%

 

22,436

 

 

8.3

%

 

183,532

 

 

14.5

%

Amortization of intangible assets

1,512

 

 

0.3

%

 

8,088

 

 

1.6

%

 

3,529

 

 

1.3

%

 

13,129

 

 

1.0

%

Non-cash share-based compensation

5,853

 

 

1.2

%

 

7,839

 

 

1.6

%

 

5,051

 

 

1.9

%

 

18,743

 

 

1.5

%

Adjusted operating income (non-GAAP)

$

116,625

 

 

23.5

%

 

$

67,763

 

 

13.6

%

 

$

31,016

 

 

11.5

%

 

$

215,404

 

 

17.0

%

 

SELECTED OTHER DATA

 

Reconciliation of Non-GAAP Financial Measures - EBITDA

(Earnings Before Interest, Taxes, Depreciation and Amortization) and Adjusted EBITDA (9)

(Unaudited) (in thousands)

 

 

Three Months Ended November 30, 2020

 

Housewares

 

Health & Home

 

Beauty

 

Total

Operating income, as reported (GAAP)

$

37,658

 

 

$

30,478

 

 

$

32,573

 

 

$

100,709

 

Depreciation and amortization

2,371

 

 

4,106

 

 

3,042

 

 

9,519

 

Non-operating income, net

 

 

 

 

93

 

 

93

 

EBITDA (non-GAAP)

40,029

 

 

34,584

 

 

35,708

 

 

110,321

 

Add:

Restructuring charges

(12

)

 

 

 

 

 

(12

)

Non-cash share-based compensation

2,712

 

 

2,359

 

 

1,668

 

 

6,739

 

Adjusted EBITDA (non-GAAP)

$

42,729

 

 

$

36,943

 

 

$

37,376

 

 

$

117,048

 

 

 

Three Months Ended November 30, 2019

 

Housewares

 

Health & Home

 

Beauty

 

Total

Operating income, as reported (GAAP)

$

42,272

 

 

$

24,372

 

 

$

12,625

 

 

$

79,269

 

Depreciation and amortization

2,263

 

 

3,740

 

 

2,757

 

 

8,760

 

Non-operating income, net

 

 

 

 

92

 

 

92

 

EBITDA (non-GAAP)

44,535

 

 

28,112

 

 

15,474

 

 

88,121

 

Add:

Acquisition-related expenses (7)

 

 

 

 

1,475

 

 

1,475

 

Restructuring charges

 

 

 

 

12

 

 

12

 

Non-cash share-based compensation

1,510

 

 

1,946

 

 

1,302

 

 

4,758

 

Adjusted EBITDA (non-GAAP)

$

46,045

 

 

$

30,058

 

 

$

18,263

 

 

$

94,366

 

 

 

Nine Months Ended November 30, 2020

 

Housewares

 

Health & Home

 

Beauty

 

Total

Operating income, as reported (GAAP)

$

106,294

 

 

$

95,782

 

 

$

54,887

 

 

$

256,963

 

Depreciation and amortization

6,743

 

 

12,331

 

 

8,921

 

 

27,995

 

Non-operating income, net

 

 

 

 

440

 

 

440

 

EBITDA (non-GAAP)

113,037

 

 

108,113

 

 

64,248

 

 

285,398

 

Add:

Restructuring charges

251

 

 

 

 

104

 

 

355

 

Non-cash share-based compensation

8,024

 

 

7,166

 

 

5,464

 

 

20,654

 

Adjusted EBITDA (non-GAAP)

$

121,312

 

 

$

115,279

 

 

$

69,816

 

 

$

306,407

 

 

 

Nine Months Ended November 30, 2019

 

Housewares

 

Health & Home

 

Beauty

 

Total

Operating income, as reported (GAAP)

$

109,170

 

 

$

51,836

 

 

$

19,990

 

 

$

180,996

 

Depreciation and amortization

5,292

 

 

12,322

 

 

7,262

 

 

24,876

 

Non-operating income, net

 

 

 

 

313

 

 

313

 

EBITDA (non-GAAP)

114,462

 

 

64,158

 

 

27,565

 

 

206,185

 

Add:

Acquisition-related expenses (7)

 

 

 

 

1,475

 

 

1,475

 

Restructuring charges

90

 

 

 

 

971

 

 

1,061

 

Non-cash share-based compensation

5,853

 

 

7,839

 

 

5,051

 

 

18,743

 

Adjusted EBITDA (non-GAAP)

$

120,405

 

 

$

71,997

 

 

$

35,062

 

 

$

227,464

 

 

Reconciliation of GAAP Net Income and Diluted EPS to

Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (9)

(Unaudited) (in thousands, except per share data)

 

 

Three Months Ended November 30, 2020

 

Income

 

Diluted EPS

 

Before Tax

 

Tax

 

Net of Tax

 

Before Tax

 

Tax

 

Net of Tax

As reported (GAAP)

$

97,876

 

 

$

13,721

 

 

$

84,155

 

 

$

3.89

 

 

$

0.55

 

 

$

3.34

 

Restructuring charges

(12

)

 

 

 

(12

)

 

 

 

 

 

 

Subtotal

97,864

 

 

13,721

 

 

84,143

 

 

3.89

 

 

0.55

 

 

3.34

 

Amortization of intangible assets

4,501

 

 

204

 

 

4,297

 

 

0.18

 

 

0.01

 

 

0.17

 

Non-cash share-based compensation

6,739

 

 

403

 

 

6,336

 

 

0.27

 

 

0.02

 

 

0.25

 

Adjusted (non-GAAP)

$

109,104

 

 

$

14,328

 

 

$

94,776

 

 

$

4.33

 

 

$

0.57

 

 

$

3.76

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

 

25,192

 

 

 

Three Months Ended November 30, 2019

 

Income

 

Diluted EPS

 

Before Tax

 

Tax

 

Net of Tax

 

Before Tax

 

Tax

 

Net of Tax

As reported (GAAP)

$

76,594

 

 

$

7,895

 

 

$

68,699

 

 

$

3.02

 

 

$

0.31

 

 

$

2.71

 

Acquisition-related expenses (7)

1,475

 

 

22

 

 

1,453

 

 

0.06

 

 

 

 

0.06

 

Restructuring charges

12

 

 

 

 

12

 

 

 

 

 

 

 

Subtotal

78,081

 

 

7,917

 

 

70,164

 

 

3.07

 

 

0.31

 

 

2.76

 

Amortization of intangible assets

4,790

 

 

252

 

 

4,538

 

 

0.19

 

 

0.01

 

 

0.18

 

Non-cash share-based compensation

4,758

 

 

343

 

 

4,415

 

 

0.19

 

 

0.01

 

 

0.17

 

Adjusted (non-GAAP)

$

87,629

 

 

$

8,512

 

 

$

79,117

 

 

$

3.45

 

 

$

0.34

 

 

$

3.12

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

 

25,396

 

 

 

Nine Months Ended November 30, 2020

 

Income

 

Diluted EPS

 

Before Tax

 

Tax

 

Net of Tax

 

Before Tax

 

Tax

 

Net of Tax

As reported (GAAP)

$

247,835

 

 

$

16,061

 

 

$

231,774

 

 

$

9.78

 

 

$

0.63

 

 

$

9.14

 

Restructuring charges

355

 

 

2

 

 

353

 

 

0.01

 

 

 

 

0.01

 

Tax Reform

 

 

9,357

 

 

(9,357

)

 

 

 

0.37

 

 

(0.37

)

Subtotal

248,190

 

 

25,420

 

 

222,770

 

 

9.79

 

 

1.00

 

 

8.79

 

Amortization of intangible assets

13,527

 

 

651

 

 

12,876

 

 

0.53

 

 

0.03

 

 

0.51

 

Non-cash share-based compensation

20,654

 

 

1,406

 

 

19,248

 

 

0.82

 

 

0.06

 

 

0.76

 

Adjusted (non-GAAP)

$

282,371

 

 

$

27,477

 

 

$

254,894

 

 

$

11.14

 

 

$

1.08

 

 

$

10.05

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

 

25,350

 

 

 

Nine Months Ended November 30, 2019

 

Income

 

Diluted EPS

 

Before Tax

 

Tax

 

Net of Tax

 

Before Tax

 

Tax

 

Net of Tax

As reported (GAAP)

$

172,018

 

 

$

16,530

 

 

$

155,488

 

 

$

6.80

 

 

$

0.65

 

 

$

6.15

 

Acquisition-related expenses (7)

1,475

 

 

22

 

 

1,453

 

 

0.06

 

 

 

 

0.06

 

Restructuring charges

1,061

 

 

68

 

 

993

 

 

0.04

 

 

 

 

0.04

 

Subtotal

174,554

 

 

16,620

 

 

157,934

 

 

6.90

 

 

0.66

 

 

6.24

 

Amortization of intangible assets

13,129

 

 

621

 

 

12,508

 

 

0.52

 

 

0.02

 

 

0.49

 

Non-cash share-based compensation

18,743

 

 

1,434

 

 

17,309

 

 

0.74

 

 

0.06

 

 

0.68

 

Adjusted (non-GAAP)

$

206,426

 

 

$

18,675

 

 

$

187,751

 

 

$

8.16

 

 

$

0.74

 

 

$

7.42

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock used in computing diluted EPS

 

25,295

 

Consolidated Core and Non-Core Net Sales and Reconciliation of Core and Non-Core Diluted EPS to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (3) (9)

(Unaudited) (in thousands, except per share data)

 

 

Three Months Ended November 30,

 

2020

 

2019

 

$ Change

 

% Change

Sales revenue, net

 

 

 

 

 

 

 

Core

$

617,766

 

 

$

450,742

 

 

$

167,024

 

 

37.1

%

Non-Core

19,971

 

 

23,995

 

 

(4,024

)

 

(16.8

)%

Total

$

637,737

 

 

$

474,737

 

 

$

163,000

 

 

34.3

%

 
 

 

Three Months Ended November 30,

 

2020

 

2019

 

$ Change

 

% Change

Adjusted Diluted EPS (non-GAAP)

 

 

 

 

 

 

 

Core

$

3.61

 

 

$

2.98

 

 

$

0.63

 

 

21.1

%

Non-Core

0.15

 

 

0.14

 

 

0.01

 

 

7.1

%

Total

$

3.76

 

 

$

3.12

 

 

$

0.64

 

 

20.5

%

 

Three Months Ended November 30,

Core Business:

2020

 

2019

Diluted EPS, as reported

$

3.19

 

 

$

2.62

 

Acquisition-related expenses, net of tax

 

 

0.06

 

Subtotal

$

3.19

 

 

$

2.68

 

Amortization of intangible assets, net of tax

0.17

 

 

0.13

 

Non-cash share-based compensation, net of tax

0.25

 

 

0.17

 

Adjusted Diluted EPS (non-GAAP)

$

3.61

 

 

$

2.98

 

 

Three Months Ended November 30,

Non-Core Business:

2020

 

2019

Diluted EPS, as reported

$

0.15

 

 

$

0.09

 

Amortization of intangible assets, net of tax

 

 

0.05

 

Non-cash share-based compensation, net of tax

 

 

 

Adjusted Diluted EPS (non-GAAP)

$

0.15

 

 

$

0.14

 

 

 

 

 

Diluted EPS, as reported (GAAP)

$

3.34

 

 

$

2.71

 

 

Consolidated Core and Non-Core Net Sales and Reconciliation of Core and Non-Core Diluted EPS to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (3) (9)

(Unaudited) (dollars in thousands, except per share data)

 

 

Nine Months Ended November 30,

 

2020

 

2019

 

$ Change

 

% Change

Sales revenue, net

 

 

 

 

 

 

 

Core

$

1,526,995

 

 

$

1,193,454

 

 

$

333,541

 

 

27.9

%

Non-Core

62,429

 

 

71,613

 

 

(9,184

)

 

(12.8

)%

Total

$

1,589,424

 

 

$

1,265,067

 

 

$

324,357

 

 

25.6

%

 
 

 

Nine Months Ended November 30,

 

2020

 

2019

 

$ Change

 

% Change

Adjusted Diluted EPS (non-GAAP)

 

 

 

 

 

 

 

Core

$

9.58

 

 

$

6.98

 

 

$

2.60

 

 

37.2

%

Non-Core

0.47

 

 

0.44

 

 

0.03

 

 

6.8

%

Total

$

10.05

 

 

$

7.42

 

 

$

2.63

 

 

35.4

%

 

Nine Months Ended November 30,

Core Business:

2020

 

2019

Diluted EPS, as reported

$

8.67

 

 

$

5.85

 

Restructuring charges, net of tax

0.01

 

 

0.02

 

Tax Reform

(0.37)

 

 

 

Acquisition-related expenses, net of tax

 

 

0.06

 

Subtotal

$

8.31

 

 

$

5.93

 

Amortization of intangible assets, net of tax

0.51

 

 

0.38

 

Non-cash share-based compensation, net of tax

0.76

 

 

0.67

 

Adjusted Diluted EPS (non-GAAP)

$

9.58

 

 

$

6.98

 

 

Nine Months Ended November 30,

Non-Core Business:

2020

 

2019

Diluted EPS, as reported

$

0.47

 

 

$

0.30

 

Restructuring charges, net of tax

 

 

0.01

 

Subtotal

$

0.47

 

 

$

0.31

 

Amortization of intangible assets, net of tax

 

 

0.12

 

Non-cash share-based compensation, net of tax

 

 

0.01

 

Adjusted Diluted EPS (non-GAAP)

$

0.47

 

 

$

0.44

 

 

 

 

 

Diluted EPS, as reported (GAAP)

$

9.14

 

 

$

6.15

 

 

Selected Consolidated Balance Sheet, Cash Flow and Liquidity Information

(Unaudited) (in thousands)

 

 

November 30,

 

2020

 

2019

Balance Sheet:

 

 

 

Cash and cash equivalents

$

156,661

 

 

$

19,637

 

Receivables, net

500,070

 

 

365,543

 

Inventory, net

383,440

 

 

333,656

 

Total assets, current

1,090,068

 

 

729,239

 

Total assets

2,311,744

 

 

1,791,089

 

Total liabilities, current

598,505

 

 

317,899

 

Total long-term liabilities

502,801

 

 

311,506

 

Total debt

440,381

 

 

244,247

 

Total stockholders' equity

1,210,438

 

 

1,161,684

 

Liquidity:

 

 

 

Working capital

$

491,563

 

 

$

411,340

 

 

 

Nine Months Ended November 30,

 

2020

 

2019

Cash Flow:

 

 

 

Depreciation and amortization

$

27,995

 

 

$

24,876

 

Net cash provided by operating activities

249,746

 

 

101,418

 

Capital and intangible asset expenditures

19,423

 

 

13,247

 

Net debt proceeds (repayments)

104,100

 

 

(77,300)

 

Payments for repurchases of common stock

202,961

 

 

10,133

 

 

Reconciliation of GAAP Net Cash Provided by Operating Activities

to Free Cash Flow (Non-GAAP) (9)

(Unaudited) (in thousands)

 

 

Nine Months Ended November 30,

 

2020

 

2019

Net cash provided by operating activities (GAAP)

$

249,746

 

 

$

101,418

 

Less: Capital and intangible asset expenditures

(19,423

)

 

(13,247

)

Free cash flow (non-GAAP)

$

230,323

 

 

$

88,171

 

 

Fiscal 2021 Outlook for Net Sales Revenue

(Unaudited)

(in thousands)

 

 

Fiscal 2020

 

Outlook for Fiscal 2021

Net sales revenue

$

1,707,432

 

 

$

2,075,000

 

 

 

$

2,100,000

 

 

 

 

 

 

 

 

 

 

 

 

21.5

%

 

 

23.0

%

 
 

Reconciliation of Fiscal 2021 Outlook for GAAP Diluted Earnings Per Share (“EPS”) to Adjusted Diluted EPS (Non-GAAP) (9)(Unaudited)

 

 

Nine
Months
Ended
November
30, 2020

 

Outlook for the
Balance of the
Fiscal Year
(Three Months)

 

Outlook Fiscal 2021

Diluted EPS, as reported (GAAP)

$

9.14

 

 

$

1.15

 

 

 

$

1.32

 

 

$

10.29

 

 

 

$

10.46

 

Restructuring charges, net of tax

0.01

 

 

 

 

 

0.01

 

 

0.01

 

 

 

0.02

 

Tax Reform

(0.37

)

 

 

 

 

 

 

(0.37

)

 

 

(0.37

)

Subtotal

8.79

 

 

1.15

 

 

 

1.32

 

 

9.94

 

 

 

10.12

 

Amortization of intangible assets, net of tax

0.51

 

 

0.12

 

 

 

0.13

 

 

0.63

 

 

 

0.64

 

Non-cash share-based compensation, net of tax

0.76

 

 

0.18

 

 

 

0.19

 

 

0.94

 

 

 

0.95

 

Adjusted diluted EPS (non-GAAP)

$

10.05

 

 

$

1.45

 

 

 

$

1.65

 

 

$

11.50

 

 

 

$

11.70

 

 

Effective Tax Rate (GAAP) and Adjusted Effective Tax Rate (Non-GAAP) (9)

(Unaudited)

 

 

Nine Months
Ended
November 30,
2020

 

Outlook for the
Balance of the
Fiscal Year
(Three Months)

 

Outlook Fiscal 2021

Effective tax rate, as reported (GAAP)

6.5

%

 

8.5

%

 

 

10.4

%

 

6.7

%

 

 

6.8

%

Restructuring charges

%

 

%

 

 

%

 

%

 

 

%

Tax Reform

3.8

%

 

%

 

 

%

 

3.4

%

 

 

3.4

%

Subtotal

10.2

%

 

8.4

%

 

 

10.4

%

 

10.1

%

 

 

10.3

%

Amortization of intangible assets

(0.3

)%

 

(0.4

)%

 

 

(0.6

)%

 

(0.3

)%

 

 

(0.3

)%

Non-cash share-based compensation

(0.2

)%

 

(0.2

)%

 

 

(0.4

)%

 

(0.2

)%

 

 

(0.3

)%

Adjusted effective tax rate (non-GAAP)

9.7

%

 

7.9

%

 

 

9.3

%

 

9.5

%

 

 

9.7

%

 
HELEN OF TROY LIMITED AND SUBSIDIARIES
Notes to Press Release

 

(1)

Previously referred to as Core business, Organic business refers to net sales revenue associated with product lines or brands after the first twelve months from the date the product line or brand is acquired, not including the impact that foreign currency had on reported net sales. Net sales revenue from internally developed brands or product lines is considered Organic business activity.

(2)

The three and nine month periods ended November 30, 2020 include three and nine months of operating results for Drybar Products LLC, respectively, which was acquired on January 23, 2020, with no comparable results for the same period last year.

(3)

The Company defines Core as strategic business that it expects to be an ongoing part of its operations, and Non-Core as business or assets (including assets held for sale) that it expects to divest within a year of its designation as Non-Core.

(4)

Amortization of intangible assets.

(5)

Non-cash share-based compensation.

(6)

Charges incurred in connection with the Company’s restructuring plan (Project Refuel).

(7)

Acquisition-related expenses associated with the definitive agreement to acquire Drybar Products LLC are included in SG&A for the three and nine month periods ended November 30, 2019.

(8)

Leadership Brand net sales consists of revenue from the OXO, Honeywell, Braun, PUR, Hydro Flask, Vicks, Hot Tools and Drybar brands.

(9)

This press release contains non-GAAP financial measures. Adjusted operating income, adjusted operating margin, adjusted effective tax rate, adjusted income, adjusted diluted EPS, Core and Non-Core adjusted diluted EPS, EBITDA, adjusted EBITDA, and free cash flow 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 presented in the Company’s Condensed Consolidated Statements of Income and Cash Flows 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. 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/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/benefits would not accurately reflect the underlying performance of the Company’s operations for the period in which the charges/benefits are incurred, even though such charges/benefits may be incurred and reflected in the Company’s GAAP financial results in the near future. Additionally, the non-GAAP measures are used by management for measuring and evaluating the Company’s performance. 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.

 

Investor Contact:
Helen of Troy Limited
Anne Rakunas, Director, External Communications
(915) 225-4841

ICR, Inc.
Allison Malkin, Partner
(203) 682-8200

Source: Helen of Troy Limited

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