Helen of Troy Limited Reports Record Net Sales Revenue and Record Net Income for Three and Twelve Month Periods Ended February 28, 2013 Business Wire EL PASO, Texas -- April 29, 2013 Helen of Troy Limited (NASDAQ, NM: HELE), designer, developer and worldwide marketer of brand-name household, personal care and healthcare/home environment consumer products, today reported record results for the three and twelve month periods ended February 28, 2013. Gerald J. Rubin, Chairman, Chief Executive Officer and President, commenting on the Company's fiscal 2013 fourth quarter results, stated, “I am pleased to report a solid quarter, where all three of our operating segments contributed to a double digit increase in consolidated net sales compared to the same period last year. Amidst a challenging retail sales environment we continued to diligently control our costs and increased our operating income compared to the fourth quarter of last year, even as we continued to make long-term investments in our business. The fourth quarter caps off a solid year of performance for our Company, where we made further progress on many of our long-term strategic business objectives and achieved overall organic growth for the second consecutive year. Our business is solid and continued to generate strong cash flow in fiscal 2013, providing significant resources to pursue our growth objectives.” Mr. Rubin continued, “Looking ahead to fiscal year 2014, we have confidence in our ability to leverage our portfolio of leading brands for long-term growth. While the global economic environment is mixed, we remain keenly focused on executing our growth strategies and controlling our costs. We will continue to invest in organic growth while evaluating accretive acquisitions that complement, and further diversify, our portfolio of global consumer products and brands.” Consolidated Fourth Quarter Operating Results *Net sales revenue increased 10.9% to a record $326.0 million compared to $294.0 million in the fourth quarter of fiscal 2012. *Gross profit margin as a percentage of net sales revenue was 40.4% compared to 41.9% for the same period last year, reflecting product cost increases across all segments. *Selling, general and administrative expense as a percentage of net sales revenue was 28.2% compared to 29.4% for the same period last year, a decrease of 120 basis points, reflecting the benefits of expense leverage and third party transition service expenses related to the PUR acquisition incurred last year, but not repeated this year. *Operating income was $39.7 million compared to $36.6 million in the same period last year, an increase of 8.7%. *EBITDA without non-cash share-based compensation was $50.0 million compared to $46.3 million in the same period last year, an increase of 8.0%. (See “Reconciliation of Non-GAAP Financial Measures – EBITDA and EBITDA without non-cash share-based compensation” below.) *Record net income was $31.5 million, or $0.98 per fully diluted share on 32.1 million weighted average shares outstanding, which compares to net income in the fourth quarter of fiscal 2012 of $29.3 million, or $0.92 per fully diluted share on 31.8 million weighted average shares outstanding, an increase in net income of 7.5% and in earnings per fully diluted share of 6.5%. Consolidated Twelve-Month Operating Results *Net sales revenue increased 9.0% to a record $1.29 billion compared to $1.18 billion in fiscal 2012. *Gross profit margin as a percentage of net sales revenue was 40.2% compared to 40.5% in fiscal 2012, reflecting the unfavorable impact of foreign currency exchange rates and product cost increases across all segments. *Selling, general and administrative expense as a percentage of net sales revenue of 28.7% was flat compared to fiscal 2012. *Operating income was $148.8 million compared to $139.4 million in fiscal 2012, an increase of 6.7%. *EBITDA without non-cash share-based compensation was $190.0 million compared to $171.8 million in fiscal 2012, an increase of 10.6%. (See “Reconciliation of Non-GAAP Financial Measures – EBITDA and EBITDA without non-cash share-based compensation” below.) *Record net income was $115.7 million, or $3.62 per fully diluted share on 31.9 million weighted average shares outstanding, which compares to net income in fiscal 2012 of $110.4 million, or $3.48 per fully diluted share on 31.7 million weighted average shares outstanding, an increase in net income of 4.8% and in earnings per fully diluted share of 4.0%. Balance Sheet Highlights *Cash and equivalents totaled $12.8 million compared to $21.8 million at February 29, 2012. *Receivables turnover improved to 60.6 days, from 62.5 days at February 29, 2012. *Inventory was $280.9 million compared to $246.1 million at February 29, 2012, reflecting the purchase of PUR inventories during the second fiscal quarter, advance purchases of PUR inventory in the second half of the fiscal year in anticipation of a change in a third-party manufacturer in fiscal year 2014 and additional inventory holdings in anticipation of the Chinese New Year. Fiscal 2014 Annual Outlook For fiscal year 2014, the Company expects net sales revenue in the range of $1.29 billion to $1.32 billion, and earnings per fully diluted share in the range of $3.50 to $3.60. The earnings guidance reflects the negative impact of the difficult retail environment, a conservative approach to the cold/cough/flu season, product cost increases across all segments and an increase in non-cash compensation expense for the Company’s CEO. The Company expects capital expenditures for fiscal year 2014 to be in the range of $40 million to $45 million, with approximately $33 million related to the completion of the Company’s new 1.3 million square foot distribution center in Olive Branch, Mississippi. Conference Call and Webcast The Company will conduct a teleconference in conjunction with today's earnings release. The teleconference begins at 4:45 pm Eastern Time today, Monday, April 29, 2013. Institutional investors and analysts interested in participating in the call are invited to dial (888) 359-3624. The conference call will also be available to interested parties through a live webcast at www.hotus.com. Please visit the website and select the “Investor Relations” link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until May 6, 2013, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international) and entering the conference replay number: 4022910. Please note participants must enter the conference identification number in order to access the replay. 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®; Personal Care: Revlon®, Vidal Sassoon®, Dr. Scholl's®, Pro Beauty Tools®, Sure®, Pert®, Infusium23®, Brut®, Ammens®, Hot Tools®, Bed Head®, Karina®, Ogilvie® and Gold 'N Hot®; and Healthcare/Home Environment: Vicks®, Braun®, Honeywell®, PUR®, Febreze®, Stinger®, Duracraft® and SoftHeat®. The Revlon® trademark is used under license from Revlon Consumer Products Corporation. The Vidal Sassoon®, Vicks®, Braun® and Febreze® trademarks are used under license from The Procter & Gamble Company. The Dr. Scholl's® trademark is used under license from MSD Consumer Care, Inc. The Honeywell® trademark is used under license from Honeywell International Inc. The Bed Head® trademark is used under license from Unilever PLC. For more information, 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 Form10-K for the year ended February 28, 2013 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 Company's geographic concentration of certain U.S. distribution facilities, which increases our exposure to significant shipping disruptions and added shipping and storage costs, delays in construction of the Company’s new distribution facility or difficulties encountered during the transition to the new facility could interrupt the Company’s logistical systems and cause shipping disruptions, the Company's projections of product demand, sales, net income and earnings per share are highly subjective and our future net sales revenue, net income and earnings per share could vary in a material amount from such projections, expectations regarding acquisitions and the integration of acquired businesses, the Company's relationship with key customers and licensors, the costs of complying with the business demands and requirements of large sophisticated customers, the Company's dependence on foreign sources of supply and foreign manufacturing, the impact of changing costs of raw materials and energy on cost of goods sold and certain operating expenses, 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, our dependence on the strength of retail economies and vulnerabilities to an economic downturn, the Company's ability to develop and introduce innovative new products to meet changing consumer preferences, disruptions in U.S., European and other international credit markets, exchange rate risks, 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 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. HELEN OF TROY LIMITED AND SUBSIDIARIES Consolidated Condensed Statements of Income (unaudited) (in thousands, except per share data) Three Months ended the last day of February Fiscal years ended the last day of February 2013 2012 2013 2012 Sales revenue, $ 326,042 100.0 % $ 294,004 100.0 % $ 1,288,263 100.0 % $ 1,181,676 100.0 % net Cost of goods 194,462 59.6 % 170,897 58.1 % 770,052 59.8 % 703,192 59.5 % sold Gross profit 131,580 40.4 % 123,107 41.9 % 518,211 40.2 % 478,484 40.5 % Selling, general, and 91,848 28.2 % 86,552 29.4 % 369,438 28.7 % 339,098 28.7 % administrative expense Operating 39,732 12.2 % 36,555 12.4 % 148,773 11.5 % 139,386 11.8 % income Other income (expense): Nonoperating income 48 0.0 % (52 ) 0.0 % 86 0.0 % (377 ) 0.0 % (expense), net Interest (3,671 ) -1.1 % (3,265 ) -1.1 % (13,345 ) -1.0 % (12,917 ) -1.1 % expense Total other (3,623 ) -1.1 % (3,317 ) -1.1 % (13,259 ) -1.0 % (13,294 ) -1.1 % expense Income before 36,109 11.1 % 33,238 11.3 % 135,514 10.5 % 126,092 10.7 % income taxes Income tax 4,602 1.4 % 3,941 1.3 % 19,848 1.5 % 15,718 1.3 % expense Net income $ 31,507 9.7 % $ 29,297 10.0 % $ 115,666 9.0 % $ 110,374 9.3 % Diluted earnings per $ 0.98 $ 0.92 $ 3.62 $ 3.48 share Weighted average shares of common stock used in 32,089 31,766 31,936 31,705 computing diluted earnings per share HELEN OF TROY LIMITED AND SUBSIDIARIES Selected Consolidated Balance Sheet Information (unaudited) (in thousands) 2/28/2013 2/29/2012 Cash and cash equivalents $ 12,842 $ 21,846 Receivables 219,719 195,283 Inventory 280,872 246,142 Total assets, current 545,205 488,536 Total assets 1,474,004 1,435,723 Total liabilities, current 308,665 378,889 Total long-term liabilities 238,733 260,105 Stockholders' equity 926,606 796,729 SELECTED OTHER DATA (in thousands) (unaudited) Reconciliation of Non-GAAP Financial Measures - EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and EBITDA without non-cash share-based compensation Three Months ended Fiscal years ended the last day of February the last day of February 2013 2012 2013 2012 Net income $ 31,507 $ 29,297 $ 115,666 $ 110,374 Interest expense, net 3,651 3,246 13,270 12,619 Income tax expense 4,602 3,941 19,848 15,718 Depreciation and 8,737 9,112 35,328 30,178 amortization EBITDA (Earnings before interest, taxes, $ 48,497 $ 45,596 $ 184,112 $ 168,889 depreciation and amortization) EBITDA without non-cash share-based compensation: EBITDA, as calculated $ 48,497 $ 45,596 $ 184,112 $ 168,889 above Add: Non-cash 1,496 697 5,913 2,928 share-based compensation EBITDA without non-cash $ 49,993 $ 46,293 $ 190,025 $ 171,817 share-based compensation The above table of SELECTED OTHER DATA and the accompanying press release include non-GAAP measures. EBITDA and EBITDA without non-cash share-based compensation that are discussed in the accompanying press release or in the preceding table may be considered non-GAAP financial information as contemplated by SEC Regulation G, Rule 100. Accordingly, we are providing the preceding table that reconciles these measures to their corresponding GAAP based measures presented in our Consolidated Condensed Statements of Income in the accompanying table 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 measures, in combination with the Company's financial results calculated in accordance with GAAP, provides investors with additional perspective. The Company further believes that the items excluded from certain non-GAAP measures do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though some of these excluded items may be incurred and reflected in the Company's GAAP financial results in the foreseeable future. The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures do not reflect the full economic impact of the Company's activities. These non-GAAP measures are not prepared in accordance with GAAP, are not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, undue reliance should not be placed on non-GAAP information. Contact: Helen of Troy Limited John Boomer Senior Vice President 915-225-8050 or Investor: ICR, Inc. Allison Malkin / Anne Rakunas 203-682-8200 / 310-954-1113
Helen of Troy Limited Reports Record Net Sales Revenue and Record Net Income for Three and Twelve Month Periods Ended February
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