Helen of Troy Limited Reports Results For the Third Quarter and First Nine Months of Fiscal Year 2014

  Helen of Troy Limited Reports Results For the Third Quarter and First Nine
  Months of Fiscal Year 2014

  *Third Quarter Diluted EPS of $1.16
  *Net Sales Growth of 1.6% Compared to Third Quarter of Prior Fiscal Year

Business Wire

EL PASO, Texas -- January 9, 2014

Helen of Troy Limited (NASDAQ, NM:HELE), designer, developer and worldwide
marketer of brand-name houseware, healthcare/home environment and personal
care consumer products, today reported results for the three and nine month
periods ended November 30, 2013.

Gerald J. Rubin, Chairman of the Board, Chief Executive Officer and President,
commenting on the Company's fiscal year 2014 third quarter results, stated,
“We continued our positive momentum during the quarter, increasing
consolidated sales revenue, operating income and adjusted EBITDA. Sales growth
was led by our Housewares segment, through the extension of OXO categories as
well as expanded shelf space and assortments at several key retailers. Better
product mix and new product introductions supported by effective marketing
strategies drove sales growth in our Healthcare/Home Environment segment.
While our Personal Care segment continues to face a challenging retail
environment, which pressured sales, we increased profitability in this
segment. I am pleased with how our team continues to diligently manage
expenses in order to mitigate product cost increases, which resulted in a
decline in our selling, general and administrative expense (“SG&A”) as a
percentage of sales revenue, and increased operating profitability in the
quarter on a year-over-year basis.

During the quarter we began shipping out of our new 1.3 million square foot
distribution facility in Olive Branch, Mississippi and expect to complete the
transition of our domestic Personal Care appliance distribution operations to
the new facility, on schedule, in the first quarter of fiscal year 2015.
Together with our 1.2 million square foot distribution facility in Southaven,
Mississippi, this new facility gives us 2.5 million square feet in the region
and the ability to continue to grow our business,” Mr. Rubin concluded.

Third Quarter of Fiscal Year 2014 Consolidated Operating Results

  *Net sales revenue increased 1.6% to a record $380.7 million compared to
    $374.6 million in the third quarter of fiscal year 2013.
  *Gross profit margin was 38.8% compared to 39.6% for the same period last
    year, reflecting increased promotional program costs, the negative effect
    of foreign currency exchange rates and product cost increases across all
    segments.
  *SG&A was 25.8% as a percent of net sales compared to 27.1% for the same
    period last year, a decrease of 130 basis points. The decrease primarily
    reflects lower media advertising costs and the favorable comparative
    impact arising from a product packaging litigation expense recorded during
    the same quarter last year. These expense reductions were partially offset
    by higher incentive compensation costs.
  *Operating income increased 5.0% to a record $49.4 million compared to
    operating income of $47.1 million in the same period last year.
  *Net income was $37.5 million, or $1.16 per fully diluted share on 32.5
    million weighted average shares outstanding, which compares to net income
    in the third quarter of fiscal year 2013 of $37.7 million, or $1.18 per
    fully diluted share on 32.0 million weighted average shares outstanding.
  *Adjusted EBITDA (EBITDA without non-cash share based compensation)
    increased 6% to $60.5 million compared to $57.1 million in the same period
    last year.

First Nine Months of Fiscal Year 2014 Consolidated Operating Results

  *Net sales revenue increased 4.4% to a record $1,004.6 million compared to
    $962.2 million in the first nine months of fiscal year 2013.
  *Gross profit margin was 38.9% compared to 40.2% for the same period last
    year, reflecting increased promotional program costs, the effect of
    foreign currency exchange rate fluctuations and product cost increases
    across all segments.
  *SG&A was 27.7% as a percent of net sales compared to 28.8% for the same
    period last year, a decrease of 110 basis points. The decrease primarily
    reflects lower outbound freight and distribution costs, reduced media
    advertising costs and the favorable comparative impact arising from a
    product packaging litigation expense recorded during the third fiscal
    quarter last year. These expense reductions were partially offset by
    higher incentive compensation costs.
  *Operating income was $100.4 million, which includes the impact of $12.0
    million in non-cash asset impairment charges related to certain trademarks
    in the Company’s Personal Care segment recorded in the first quarter of
    fiscal 2014, compared to operating income of $109.0 million in the same
    period last year.
  *Net income was $75.2 million, or $2.33 per fully diluted share on 32.3
    million weighted average shares outstanding, which compares to net income
    in the first nine months of fiscal year 2013 of $84.2 million, or $2.64
    per fully diluted share on 31.9 million weighted average shares
    outstanding.
  *Adjusted operating income (operating income without non-cash asset
    impairment charges) was $112.4 million compared to $109.0 million for the
    same period last year, an increase of 3.1%.
  *Adjusted income (net income without non-cash asset impairment charges) was
    $87.3 million, or $2.70 per fully diluted share, compared to $84.2
    million, or $2.64 per fully diluted share, in the first nine months of
    fiscal year 2013. This represents an increase in adjusted income of 3.7%
    and in adjusted diluted earnings per share of 2.3%.
  *Adjusted EBITDA (EBITDA without non-cash asset impairment charges and
    non-cash share based compensation) increased 4.9% to $146.9 million
    compared to $140.0 million in the same period last year.

Balance Sheet Highlights

  *Cash and cash equivalents totaled $28.8 million at November 30, 2013,
    compared to $16.1 million at November 30, 2012.
  *Total short and long-term debt declined by $103.0 million to $215.4
    million at November 30, 2013, compared to $318.4 million at November 30,
    2012.
  *Accounts receivables turnover was 65.5 days at November 30, 2013, compared
    to 62.7 days at November 30, 2012.
  *Inventory was $289.9 million at November 30, 2013, compared to $306.3
    million at November 30, 2012.

Fiscal Year 2014 Annual Outlook

For fiscal year 2014, the Company continues to expect net sales revenue in the
range of $1.29 billion to $1.32 billion, and diluted EPS in the range of $3.13
to $3.23, which includes the non-cash asset impairment charges of $0.37 per
share recorded in the first quarter of fiscal year 2014. The Company expects
adjusted diluted EPS to be in the range of $3.50 to $3.60, which is consistent
with the Company’s previous guidance. The earnings guidance reflects the
negative impact of the difficult retail environment, a normal cold/cough/flu
season, product cost increases across all segments, an increase in non-cash
compensation expense for the Company’s CEO, and an incentive compensation
program for the Healthcare/Home Environment segment. 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, Thursday,
January 9, 2014. Institutional investors and analysts interested in
participating in the call are invited to dial (888) 417-8465. 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 11:59 pm Eastern Time
on January 16, 2014, by dialing (877) 570-5176 (domestic) or (858) 384-5517
(international) and entering the conference replay number: 8376226. Please
note participants must enter the conference identification number in order to
access the replay.

About Helen of Troy Limited:

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®; Healthcare/Home Environment: Vicks®, Braun®, Honeywell®, PUR®,
Febreze®, Stinger®, Duracraft® and SoftHeat®; and 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®. 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 in-depth information about Helen of Troy, please visit www.hotus.com.

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 adjusted operating income, adjusted income, adjusted diluted
EPS, EBITDA and adjusted EBITDA, which are presented in an accompanying table
to this press release along with a reconciliation of these financial measures
to their corresponding GAAP based measures presented in the Company’s
consolidated condensed statements of income.

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, difficulties encountered during the
transition to the Company’s new distribution 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 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 and Reconciliation of Non-GAAP Financial Measures - Adjusted Operating
Income and Adjusted Income
(Unaudited)
(in thousands, except per share data)
                                                                                                           
                   Three Months Ended November 30,
                   2013                                                                    2012
                   As Reported (GAAP)            Adjustments    Adjusted                 As Reported (GAAP)
                                                 (1)             (non-GAAP)(1)(2)
                                                                                                           
Sales revenue,     $ 380,730         100.0 %     $ -             $ 380,730     100.0 %     $ 374,599       100.0 %
net
Cost of goods       233,029      61.2  %      -             233,029    61.2  %      226,146    60.4  %
sold
Gross profit         147,701         38.8  %       -               147,701     38.8  %       148,453       39.6  %
                                                                                                           
Selling,
general, and         98,308          25.8  %       -               98,308      25.8  %       101,401       27.1  %
administrative
expense
Asset
impairment          -            0.0   %      -             -          0.0   %      -          0.0   %
charges
Operating           49,393       13.0  %      -             49,393     13.0  %      47,052     12.6  %
income
                                                                                                           
Other income
(expense):
Nonoperating
income               13              0.0   %       -               13          0.0   %       (16     )     0.0   %
(expense), net
Interest            (2,513    )   -0.7  %      -             (2,513    ) -0.7  %      (3,232  )   -0.9  %
expense
Total other         (2,500    )   -0.7  %      -             (2,500    ) -0.7  %      (3,248  )   -0.9  %
expense
Income before        46,893          12.3  %       -               46,893      12.3  %       43,804        11.7  %
income taxes
                                                                                                           
Income tax          9,369        2.5   %      -             9,369      2.5   %      6,085      1.6   %
expense
Net income         $ 37,524       9.9   %     $ -            $ 37,524     9.9   %     $ 37,719     10.1  %
                                                                                                           
Diluted
earnings per       $ 1.16                        $ -             $ 1.16                    $ 1.18
share
                                                                                                           
Weighted
average shares
of common
stock used in        32,482                        32,482          32,482                    31,970
computing
diluted
earnings per
share
                                                                                                           
                                                                                                           
                   Nine Months Ended November 30,
                   2013                                                                    2012
                   As Reported (GAAP)            Adjustments    Adjusted                 As Reported (GAAP)
                                                 (1)             (non-GAAP)(1)(2)
                                                                                                           
Sales revenue,     $ 1,004,633       100.0 %     $ -             $ 1,004,633   100.0 %     $ 962,221       100.0 %
net
Cost of goods       613,513      61.1  %      -             613,513    61.1  %      575,590    59.8  %
sold
Gross profit         391,120         38.9  %       -               391,120     38.9  %       386,631       40.2  %
                                                                                                           
Selling,
general, and         278,697         27.7  %       -               278,697     27.7  %       277,590       28.8  %
administrative
expense
Asset
impairment          12,049       1.2   %      (12,049 )      -          0.0   %      -          0.0   %
charges
Operating           100,374      10.0  %      12,049        112,423    11.2  %      109,041    11.3  %
income
                                                                                                           
Other income
(expense):
Nonoperating
income               153             0.0   %       -               153         0.0   %       38            0.0   %
(expense), net
Interest            (7,647    )   -0.8  %      -             (7,647    ) -0.8  %      (9,674  )   -1.0  %
expense
Total other         (7,494    )   -0.7  %      -             (7,494    ) -0.7  %      (9,636  )   -1.0  %
expense
Income before        92,880          9.2   %       12,049          104,929     10.4  %       99,405        10.3  %
income taxes
                                                                                                           
Income tax          17,647       1.8   %      15            17,662     1.8   %      15,246     1.6   %
expense
Net income         $ 75,233       7.5   %    $ 12,034       $ 87,267     8.7   %     $ 84,159     8.7   %
                                                                                                           
Diluted
earnings per       $ 2.33                        $ 0.37          $ 2.70                    $ 2.64
share
                                                                                                           
Weighted
average shares
of common
stock used in        32,311                        32,311          32,311                    31,885
computing
diluted
earnings per
share
                                                                                                           

                                                                         
HELEN OF TROY LIMITED AND SUBSIDIARIES
                                                                                    
Net Sales Revenue by Segment
(Unaudited)
(in thousands)
             
                Three Months Ended                                      % of Sales Revenue,
                November 30,                                            net
             2013          2012        $ Change     %        2013      2012
                                                             Change
                                                                                    
Sales
revenue by
segment,
net
Housewares      $ 74,776        $ 67,787      $ 6,989        10.3 %     19.6  %     18.1  %
Healthcare
/ Home            165,752         158,174       7,578        4.8  %     43.5  %     42.2  %
Environment
Personal       140,202      148,638    (8,436 )   -5.7 %   36.8  %   39.7  %
Care
Total sales
revenue,       380,730      374,599    6,131     1.6  %   100.0 %   100.0 %
net
                                                                                    
                                                                                    
                Nine Months Ended                                       % of Sales Revenue,
                November 30,                                            net
             2013          2012        $ Change     %        2013      2012
                                                             Change
                                                                                    
Sales
revenue by
segment,
net
Housewares      $ 208,471       $ 192,606     $ 15,865       8.2  %     20.8  %     20.0  %
Healthcare
/ Home            424,398         391,061       33,337       8.5  %     42.2  %     40.6  %
Environment
Personal       371,764      378,554    (6,790 )   -1.8 %   37.0  %   39.3  %
Care
Total sales
revenue,       1,004,633    962,221    42,412    4.4  %   100.0 %   100.0 %
net
                                                                                          

                                         
HELEN OF TROY LIMITED AND SUBSIDIARIES
                                            
Selected Consolidated Balance Sheet Information
(Unaudited)
(in thousands)
                                            
                            11/30/2013    11/30/2012
                                            
Cash and cash equivalents   $ 28,775        $ 16,122
                                            
Receivables                   279,699         258,124
                                            
Inventory                     289,890         306,290
                                            
Total assets, current         633,999         605,660
                                            
Total assets                  1,559,020       1,534,347
                                            
Total liabilities, current    355,162         388,627
                                            
Total long-term liabilities   194,036         255,453
                                            
Stockholders' equity          1,009,822       890,267
                                              

                                                            
SELECTED OTHER DATA
                                                                     
Reconciliation of Non-GAAP Financial Measures - EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization)
and Adjusted EBITDA
(Unaudited)
(in thousands)
                                                                     
                    Three Months Ended November     Nine Months Ended November
                    30,                             30,
                    2013             2012           2013             2012
                                                                     
Net income          $  37,524        $  37,719      $  75,233        $ 84,159
                                                                     
Interest               2,470            3,219          7,598           9,619
expense, net
                                                                     
Income tax             9,369            6,085          17,647          15,246
expense
                                                                     
Depreciation
and
amortization,         8,746           8,796         25,184         26,591
excluding
amortized
interest
                                                                     
EBITDA
(Earnings
before
interest,
taxes,              $  58,109        $  55,819      $  125,662       $ 135,615
depreciation
and
amortization)
(2)
                                                                     
Adjusted
EBITDA:
                                                                     
EBITDA, as
calculated          $  58,109        $  55,819      $  125,662       $ 135,615
above (2)
                                                                     
Add: Non-cash
asset                  -                -              12,049          -
impairment
charges (1)
Non-cash
share-based           2,403           1,288         9,200          4,417
compensation
(3)
                                                                     
Adjusted EBITDA     $  60,512        $  57,107      $  146,911       $ 140,032
(2)
                                                                       


Reconciliation of Fiscal Year 2014 Reported Diluted Earnings Per Share (EPS)
to Adjusted Diluted EPS to Exclude
Non-Cash Asset Impairment Charges
(Unaudited)
                                                           
                         Year-To-Date          Guidance for       Guidance for
                                               the                the
                         Actual Through        Balance of         Fiscal Year
                                               the                Ended
                         November 30, 2013     Fiscal Year        February 28,
                                                                  2014
                         (Nine Months)         (Three             (Twelve
                                               Months)            Months)
                                                                  
Diluted EPS, as          $ 2.33                $ 0.80 - $         $ 3.13 - $
reported (GAAP)                                0.90               3.23
                                                                  
Non-cash asset
impairment Charges       0.37                  -                  0.37
(1)
                                                                  
Adjusted Diluted         $ 2.70                $ 0.80 - $         $ 3.50 - $
EPS (non-GAAP) (2)                             0.90               3.60
                                                                  


HELEN OF TROY LIMITED AND SUBSIDIARIES
Notes to Press Release
        Adjustments relate to items that are excluded from the “As Reported
        (GAAP)” results to arrive at the “Adjusted (non-GAAP)” results.
        Adjustments consist of non-cash asset impairment charges of $12.05
        million ($12.03 million after tax) for the nine months ended November
        30, 2013 as a result of our annual evaluation of goodwill and
        indefinite-lived intangible assets for impairment during the first
 (1)  quarter of fiscal year 2014. The non-cash charges relate to certain
        trademarks in our Personal Care segment, which were written down to
        their estimated fair value, determined on the basis of future
        discounted cash flows using the relief from royalty valuation method.
        There were no comparable adjustments for the three months ended
        November 30, 2013, or for the three- and nine-months ended November
        30, 2012.
        
        This press release contains non-GAAP financial measures. Adjusted
        operating income, adjusted income, adjusted diluted EPS, EBITDA and
        adjusted EBITDA (“Non-GAAP measures”) that are discussed in the
        accompanying press release or in the preceding tables are considered
        non-GAAP financial information as set forth in SEC Regulation G, Rule
        100. Accordingly, we are providing the preceding tables that reconcile
        these measures to their corresponding GAAP based measures presented in
        our Consolidated Condensed Statements of Income 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 measures, in combination with the Company's financial results
  (2)   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.
        
        Adjustment consists of non-cash share-based compensation expense
        associated with share based awards outstanding under two expired and
        three active share-based compensation plans. These awards consist of
  (3)   stock options granted to certain officers and employees, restricted
        stock grants to certain members of the Company’s Board of Directors
        and performance based restricted stock awards and units granted to our
        Chief Executive Officer under the terms of his employment agreement.

Contact:

Helen of Troy Limited
John Boomer, 915-225-8050
Senior Vice President
or
Investors:
ICR, Inc.
Allison Malkin / Anne Rakunas
203-682-8200 / 310-954-1113
 
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