|
Bermuda
|
74-2692550
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
|
|
Clarendon House
2 Church Street
Hamilton, Bermuda
|
|
(Address of principal executive offices)
|
|
|
|
1 Helen of Troy Plaza
El Paso, Texas
|
79912
|
(Registrant’s United States Mailing Address)
|
(Zip Code)
|
Large accelerated filer
x
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
Emerging growth company
¨
|
|
Class
|
|
Outstanding at January 4, 2019
|
|
Common Shares, $0.10 par value, per share
|
|
25,594,840 shares
|
|
|
PAGE
|
|
|
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||
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|
||
|
||
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||
|
||
|
||
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||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except shares and par value)
|
November 30, 2018
|
|
February 28, 2018
|
||||
Assets
|
|
|
|
||||
Assets, current:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19,136
|
|
|
$
|
20,738
|
|
Receivables - principally trade, less allowances of $1,788 and $2,912
|
339,124
|
|
|
275,565
|
|
||
Inventory
|
300,648
|
|
|
251,511
|
|
||
Prepaid expenses and other current assets
|
14,437
|
|
|
9,545
|
|
||
Income taxes receivable
|
—
|
|
|
349
|
|
||
Total assets, current
|
673,345
|
|
|
557,708
|
|
||
|
|
|
|
||||
Property and equipment, net of accumulated depreciation of $122,602 and $115,202
|
130,940
|
|
|
123,503
|
|
||
Goodwill
|
602,320
|
|
|
602,320
|
|
||
Other intangible assets, net of accumulated amortization of $178,087 and $167,354
|
294,565
|
|
|
302,915
|
|
||
Deferred tax assets, net
|
9,942
|
|
|
16,654
|
|
||
Other assets, net of accumulated amortization of $2,092 and $2,022
|
14,257
|
|
|
20,617
|
|
||
Total assets
|
$
|
1,725,369
|
|
|
$
|
1,623,717
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Liabilities, current:
|
|
|
|
|
|
||
Accounts payable, principally trade
|
$
|
146,035
|
|
|
$
|
129,341
|
|
Accrued expenses and other current liabilities
|
184,237
|
|
|
168,261
|
|
||
Income taxes payable
|
3,181
|
|
|
—
|
|
||
Long-term debt, current maturities
|
1,884
|
|
|
1,884
|
|
||
Total liabilities, current
|
335,337
|
|
|
299,486
|
|
||
|
|
|
|
||||
Long-term debt, excluding current maturities
|
337,846
|
|
|
287,985
|
|
||
Deferred tax liabilities, net
|
5,155
|
|
|
7,096
|
|
||
Other liabilities, noncurrent
|
13,773
|
|
|
14,691
|
|
||
Total liabilities
|
692,111
|
|
|
609,258
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
||
Cumulative preferred stock, non-voting, $1.00 par. Authorized 2,000,000 shares; none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.10 par. Authorized 50,000,000 shares; 25,593,327 and 26,575,634 shares issued and outstanding
|
2,534
|
|
|
2,658
|
|
||
Additional paid in capital
|
244,888
|
|
|
230,676
|
|
||
Accumulated other comprehensive income
|
5,207
|
|
|
631
|
|
||
Retained earnings
|
780,629
|
|
|
780,494
|
|
||
Total stockholders' equity
|
1,033,258
|
|
|
1,014,459
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,725,369
|
|
|
$
|
1,623,717
|
|
|
Three Months Ended November 30,
|
|
Nine Months Ended November 30,
|
||||||||||||
(in thousands, except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales revenue, net
|
$
|
431,081
|
|
|
$
|
420,841
|
|
|
$
|
1,179,308
|
|
|
$
|
1,091,281
|
|
Cost of goods sold
|
249,236
|
|
|
242,703
|
|
|
695,732
|
|
|
638,096
|
|
||||
Gross profit
|
181,845
|
|
|
178,138
|
|
|
483,576
|
|
|
453,185
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expense ("SG&A")
|
120,524
|
|
|
109,633
|
|
|
325,684
|
|
|
310,390
|
|
||||
Asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
||||
Restructuring charges
|
25
|
|
|
1,165
|
|
|
2,609
|
|
|
1,165
|
|
||||
Operating income
|
61,296
|
|
|
67,340
|
|
|
155,283
|
|
|
137,630
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Nonoperating income, net
|
15
|
|
|
34
|
|
|
175
|
|
|
281
|
|
||||
Interest expense
|
(2,971
|
)
|
|
(3,505
|
)
|
|
(8,413
|
)
|
|
(10,984
|
)
|
||||
Income before income tax
|
58,340
|
|
|
63,869
|
|
|
147,045
|
|
|
126,927
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
4,020
|
|
|
5,245
|
|
|
10,535
|
|
|
6,423
|
|
||||
Income from continuing operations
|
54,320
|
|
|
58,624
|
|
|
136,510
|
|
|
120,504
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations, net of tax
|
(4,850
|
)
|
|
(89,060
|
)
|
|
(5,231
|
)
|
|
(136,139
|
)
|
||||
Net income (loss)
|
$
|
49,470
|
|
|
$
|
(30,436
|
)
|
|
$
|
131,279
|
|
|
$
|
(15,635
|
)
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share - basic:
|
|
|
|
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.08
|
|
|
$
|
2.16
|
|
|
$
|
5.19
|
|
|
$
|
4.44
|
|
Discontinued operations
|
(0.19
|
)
|
|
(3.28
|
)
|
|
(0.20
|
)
|
|
(5.02
|
)
|
||||
Total earnings (loss) per share - basic
|
$
|
1.90
|
|
|
$
|
(1.12
|
)
|
|
$
|
4.99
|
|
|
$
|
(0.58
|
)
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share - diluted:
|
|
|
|
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.06
|
|
|
$
|
2.15
|
|
|
$
|
5.15
|
|
|
$
|
4.41
|
|
Discontinued operations
|
(0.18
|
)
|
|
(3.27
|
)
|
|
(0.20
|
)
|
|
(4.99
|
)
|
||||
Total earnings (loss) per share - diluted
|
$
|
1.88
|
|
|
$
|
(1.12
|
)
|
|
$
|
4.95
|
|
|
$
|
(0.57
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock used in computing earnings per share:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
26,057
|
|
|
27,113
|
|
|
26,321
|
|
|
27,140
|
|
||||
Diluted
|
26,366
|
|
|
27,267
|
|
|
26,520
|
|
|
27,304
|
|
|
Three Months Ended November 30,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Before Tax
|
|
Tax (Expense) Benefit
|
|
Net of Tax
|
|
Before Tax
|
|
Tax (Expense) Benefit
|
|
Net of Tax
|
||||||||||||
(in thousands)
|
|
|
|
|
|
||||||||||||||||||
Income from continuing operations
|
$
|
58,340
|
|
|
$
|
(4,020
|
)
|
|
$
|
54,320
|
|
|
$
|
63,869
|
|
|
$
|
(5,245
|
)
|
|
$
|
58,624
|
|
Loss from discontinued operations
|
(6,325
|
)
|
|
1,475
|
|
|
(4,850
|
)
|
|
(83,084
|
)
|
|
(5,976
|
)
|
|
(89,060
|
)
|
||||||
Net income (loss)
|
52,015
|
|
|
(2,545
|
)
|
|
49,470
|
|
|
(19,215
|
)
|
|
(11,221
|
)
|
|
(30,436
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash flow hedge activity - interest rate swap
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Changes in fair market value
|
(4
|
)
|
|
50
|
|
|
46
|
|
|
753
|
|
|
(290
|
)
|
|
463
|
|
||||||
Adoption of ASU No. 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal
|
(4
|
)
|
|
50
|
|
|
46
|
|
|
753
|
|
|
(290
|
)
|
|
463
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flow hedge activity - foreign currency contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Changes in fair market value
|
(563
|
)
|
|
96
|
|
|
(467
|
)
|
|
2,928
|
|
|
(725
|
)
|
|
2,203
|
|
||||||
Settlements reclassified to income
|
1,178
|
|
|
(197
|
)
|
|
981
|
|
|
(1,328
|
)
|
|
271
|
|
|
(1,057
|
)
|
||||||
Adoption of ASU No. 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal
|
615
|
|
|
(101
|
)
|
|
514
|
|
|
1,600
|
|
|
(454
|
)
|
|
1,146
|
|
||||||
Total other comprehensive income (loss)
|
611
|
|
|
(51
|
)
|
|
560
|
|
|
2,353
|
|
|
(744
|
)
|
|
1,609
|
|
||||||
Comprehensive income (loss)
|
$
|
52,626
|
|
|
$
|
(2,596
|
)
|
|
$
|
50,030
|
|
|
$
|
(16,862
|
)
|
|
$
|
(11,965
|
)
|
|
$
|
(28,827
|
)
|
|
Nine Months Ended November 30,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Before Tax
|
|
Tax (Expense) Benefit
|
|
Net of Tax
|
|
Before Tax
|
|
Tax (Expense) Benefit
|
|
Net of Tax
|
||||||||||||
(in thousands)
|
|
|
|
|
|
||||||||||||||||||
Income from continuing operations
|
$
|
147,045
|
|
|
$
|
(10,535
|
)
|
|
$
|
136,510
|
|
|
$
|
126,927
|
|
|
$
|
(6,423
|
)
|
|
$
|
120,504
|
|
Loss from discontinued operations
|
(6,809
|
)
|
|
1,578
|
|
|
(5,231
|
)
|
|
(136,729
|
)
|
|
590
|
|
|
(136,139
|
)
|
||||||
Net income (loss)
|
140,236
|
|
|
(8,957
|
)
|
|
131,279
|
|
|
(9,802
|
)
|
|
(5,833
|
)
|
|
(15,635
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash flow hedge activity - interest rate swap
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Changes in fair market value
|
72
|
|
|
29
|
|
|
101
|
|
|
753
|
|
|
(290
|
)
|
|
463
|
|
||||||
Adoption of ASU No. 2018-02
|
—
|
|
|
150
|
|
|
150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal
|
72
|
|
|
179
|
|
|
251
|
|
|
753
|
|
|
(290
|
)
|
|
463
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flow hedge activity - foreign currency contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Changes in fair market value
|
3,962
|
|
|
(504
|
)
|
|
3,458
|
|
|
(1,275
|
)
|
|
75
|
|
|
(1,200
|
)
|
||||||
Settlements reclassified to income
|
1,101
|
|
|
(236
|
)
|
|
865
|
|
|
(2,208
|
)
|
|
434
|
|
|
(1,774
|
)
|
||||||
Adoption of ASU No. 2018-02
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal
|
5,063
|
|
|
(738
|
)
|
|
4,325
|
|
|
(3,483
|
)
|
|
509
|
|
|
(2,974
|
)
|
||||||
Total other comprehensive income (loss)
|
5,135
|
|
|
(559
|
)
|
|
4,576
|
|
|
(2,730
|
)
|
|
219
|
|
|
(2,511
|
)
|
||||||
Comprehensive income (loss)
|
$
|
145,371
|
|
|
$
|
(9,516
|
)
|
|
$
|
135,855
|
|
|
$
|
(12,532
|
)
|
|
$
|
(5,614
|
)
|
|
$
|
(18,146
|
)
|
|
Nine Months Ended November 30,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Cash provided by operating activities:
|
|
|
|
|
|
||
Net income (loss)
|
$
|
131,279
|
|
|
$
|
(15,635
|
)
|
Less: Loss from discontinued operations
|
(5,231
|
)
|
|
(136,139
|
)
|
||
Income from continuing operations
|
136,510
|
|
|
120,504
|
|
||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
22,490
|
|
|
25,139
|
|
||
Amortization of financing costs
|
761
|
|
|
632
|
|
||
Provision for doubtful receivables
|
725
|
|
|
2,045
|
|
||
Non-cash share-based compensation
|
17,029
|
|
|
10,619
|
|
||
Non-cash intangible asset impairment charges
|
—
|
|
|
4,000
|
|
||
Gain on the sale or disposal of property and equipment
|
(536
|
)
|
|
(10
|
)
|
||
Deferred income taxes and tax credits
|
4,060
|
|
|
(54,355
|
)
|
||
Changes in operating capital, net of effects of acquisition of businesses:
|
|
|
|
|
|
||
Receivables
|
(64,284
|
)
|
|
(77,017
|
)
|
||
Inventories
|
(49,137
|
)
|
|
2,795
|
|
||
Prepaid expenses and other current assets
|
(1,149
|
)
|
|
(3,356
|
)
|
||
Other assets and liabilities, net
|
5,554
|
|
|
(1,184
|
)
|
||
Accounts payable
|
16,694
|
|
|
(1,961
|
)
|
||
Accrued expenses and other current liabilities
|
17,809
|
|
|
21,425
|
|
||
Accrued income taxes
|
2,969
|
|
|
53,637
|
|
||
Net cash provided by operating activities - continuing operations
|
109,495
|
|
|
102,913
|
|
||
Net cash provided (used) by operating activities - discontinued operations
|
(5,231
|
)
|
|
4,716
|
|
||
Net cash provided by operating activities
|
104,264
|
|
|
107,629
|
|
||
|
|
|
|
||||
Cash used by investing activities:
|
|
|
|
|
|
||
Capital and intangible asset expenditures
|
(22,166
|
)
|
|
(10,375
|
)
|
||
Proceeds from the sale of property and equipment
|
1,125
|
|
|
13
|
|
||
Net cash used by investing activities - continuing operations
|
(21,041
|
)
|
|
(10,362
|
)
|
||
Net cash used by investing activities - discontinued operations
|
—
|
|
|
(9,479
|
)
|
||
Net cash used by investing activities
|
(21,041
|
)
|
|
(19,841
|
)
|
||
|
|
|
|
||||
Cash used by financing activities:
|
|
|
|
|
|
||
Proceeds from line of credit
|
462,350
|
|
|
389,500
|
|
||
Repayment of line of credit
|
(411,350
|
)
|
|
(444,200
|
)
|
||
Repayment of long-term debt
|
(1,900
|
)
|
|
(5,700
|
)
|
||
Proceeds from share issuances under share-based compensation plans
|
7,802
|
|
|
6,670
|
|
||
Payment of tax obligations resulting from cashless share award settlements
|
(4,660
|
)
|
|
(6,830
|
)
|
||
Payments for repurchases of common stock
|
(137,067
|
)
|
|
(29,158
|
)
|
||
Net cash used by financing activities - continuing operations
|
(84,825
|
)
|
|
(89,718
|
)
|
||
Net cash used by financing activities - discontinued operations
|
—
|
|
|
—
|
|
||
Net cash used by financing activities
|
(84,825
|
)
|
|
(89,718
|
)
|
||
|
|
|
|
||||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(1,602
|
)
|
|
(1,930
|
)
|
||
Cash and cash equivalents, beginning balance
|
20,738
|
|
|
23,087
|
|
||
Cash and cash equivalents, ending balance
|
19,136
|
|
|
21,157
|
|
||
Less: Cash and cash equivalents of discontinued operations, ending balance
|
—
|
|
|
1,232
|
|
||
Cash and cash equivalents of continuing operations, ending balance
|
$
|
19,136
|
|
|
$
|
19,925
|
|
|
|
|
|
(in thousands)
|
Before Reclassification
|
|
|
|
After Reclassification
|
||||||
Balance Sheet
|
February 28, 2018
|
|
Reclassification
|
|
February 28, 2018
|
||||||
Receivables
|
$
|
273,168
|
|
|
$
|
2,397
|
|
|
$
|
275,565
|
|
Accrued expenses and other current liabilities
|
$
|
165,864
|
|
|
$
|
2,397
|
|
|
$
|
168,261
|
|
(in thousands)
|
Before Reclassification
|
|
|
|
After Reclassification
|
||||||
Statement of Income
|
Three Months Ended November 30, 2017
|
|
Reclassification
|
|
Three Months Ended November 30, 2017
|
||||||
Sales revenue, net
|
$
|
423,709
|
|
|
$
|
(2,868
|
)
|
|
$
|
420,841
|
|
SG&A
|
$
|
112,501
|
|
|
$
|
(2,868
|
)
|
|
$
|
109,633
|
|
(in thousands)
|
Before Reclassification
|
|
|
|
After Reclassification
|
||||||
Statement of Income
|
Nine Months Ended November 30, 2017
|
|
Reclassification
|
|
Nine Months Ended November 30, 2017
|
||||||
Sales revenue, net
|
$
|
1,098,900
|
|
|
$
|
(7,619
|
)
|
|
$
|
1,091,281
|
|
SG&A
|
$
|
318,009
|
|
|
$
|
(7,619
|
)
|
|
$
|
310,390
|
|
|
Three Months Ended November 30,
|
|
Nine Months Ended November 30,
|
||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales revenue, net
|
$
|
—
|
|
|
$
|
29,337
|
|
|
$
|
—
|
|
|
$
|
92,213
|
|
Cost of goods sold
|
—
|
|
|
8,568
|
|
|
—
|
|
|
26,860
|
|
||||
Gross profit
|
—
|
|
|
20,769
|
|
|
—
|
|
|
65,353
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expense ("SG&A")
|
—
|
|
|
21,394
|
|
|
—
|
|
|
69,324
|
|
||||
Asset impairment charges (1)
|
—
|
|
|
82,227
|
|
|
—
|
|
|
132,297
|
|
||||
Restructuring charges
|
—
|
|
|
118
|
|
|
—
|
|
|
118
|
|
||||
Operating loss
|
—
|
|
|
(82,970
|
)
|
|
—
|
|
|
(136,386
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on sale before income tax (2)
|
(6,325
|
)
|
|
—
|
|
|
(6,809
|
)
|
|
—
|
|
||||
Interest expense
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
(343
|
)
|
||||
Loss before income tax
|
(6,325
|
)
|
|
(83,084
|
)
|
|
(6,809
|
)
|
|
(136,729
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax benefit (expense)
|
1,475
|
|
|
(5,976
|
)
|
|
1,578
|
|
|
590
|
|
||||
Loss from discontinued operations
|
$
|
(4,850
|
)
|
|
$
|
(89,060
|
)
|
|
$
|
(5,231
|
)
|
|
$
|
(136,139
|
)
|
|
|
|
|
|
|
|
|
(1)
|
Included pre-tax non-cash asset impairment charges consisting of
$70.6 million
to goodwill and
$11.6 million
to indefinite-lived brand assets for the three months ended November 30, 2017. Included pre-tax non-cash asset impairment charges consisting of
$96.6
million to goodwill and
$35.7
million to indefinite-lived brand assets for the nine months ended November 30, 2017.
|
(2)
|
Includes adjustments recorded during fiscal 2019 to the initial estimated gain on sale before income tax recorded in the fourth quarter of fiscal 2018.
|
(in thousands)
|
Estimated
Useful Lives
(Years)
|
|
November 30, 2018
|
|
February 28, 2018
|
||||||
Land
|
|
-
|
|
|
$
|
12,644
|
|
|
$
|
12,800
|
|
Building and improvements
|
3
|
-
|
40
|
|
104,227
|
|
|
106,870
|
|
||
Computer, software, furniture and other equipment
|
3
|
-
|
15
|
|
81,038
|
|
|
79,657
|
|
||
Tools, molds and other production equipment
|
1
|
-
|
10
|
|
36,471
|
|
|
33,466
|
|
||
Construction in progress
|
|
-
|
|
|
19,162
|
|
|
5,912
|
|
||
Property and equipment, gross
|
|
|
|
|
253,542
|
|
|
238,705
|
|
||
Less accumulated depreciation
|
|
|
|
|
(122,602
|
)
|
|
(115,202
|
)
|
||
Property and equipment, net
|
|
|
|
|
$
|
130,940
|
|
|
$
|
123,503
|
|
(in thousands)
|
November 30, 2018
|
|
February 28, 2018
|
||||
Accrued compensation, benefits and payroll taxes
|
$
|
32,196
|
|
|
$
|
37,666
|
|
Accrued sales discounts and allowances
|
34,134
|
|
|
28,311
|
|
||
Accrued sales returns
|
27,391
|
|
|
24,842
|
|
||
Accrued advertising
|
31,449
|
|
|
25,324
|
|
||
Accrued legal fees and settlements
|
2,162
|
|
|
17,243
|
|
||
Other
|
56,905
|
|
|
34,875
|
|
||
Total accrued expenses and other current liabilities
|
$
|
184,237
|
|
|
$
|
168,261
|
|
|
November 30, 2018
|
|
February 28, 2018
|
||||||||||||||||||||||||||||
(in thousands)
|
Gross
Carrying
Amount
|
|
Cumulative
Goodwill
Impairments
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Gross
Carrying
Amount
|
|
Cumulative
Goodwill
Impairments
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||||||
Housewares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
282,056
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
282,056
|
|
|
$
|
282,056
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
282,056
|
|
Trademarks - indefinite
|
134,200
|
|
|
—
|
|
|
—
|
|
|
134,200
|
|
|
134,200
|
|
|
—
|
|
|
—
|
|
|
134,200
|
|
||||||||
Other intangibles - finite
|
41,284
|
|
|
—
|
|
|
(18,915
|
)
|
|
22,369
|
|
|
40,828
|
|
|
—
|
|
|
(17,530
|
)
|
|
23,298
|
|
||||||||
Subtotal
|
457,540
|
|
|
—
|
|
|
(18,915
|
)
|
|
438,625
|
|
|
457,084
|
|
|
—
|
|
|
(17,530
|
)
|
|
439,554
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Health & Home:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
284,913
|
|
|
—
|
|
|
—
|
|
|
284,913
|
|
|
284,913
|
|
|
—
|
|
|
—
|
|
|
284,913
|
|
||||||||
Trademarks - indefinite
|
54,000
|
|
|
—
|
|
|
—
|
|
|
54,000
|
|
|
54,000
|
|
|
—
|
|
|
—
|
|
|
54,000
|
|
||||||||
Licenses - finite
|
17,050
|
|
|
—
|
|
|
(15,315
|
)
|
|
1,735
|
|
|
15,300
|
|
|
—
|
|
|
(15,300
|
)
|
|
—
|
|
||||||||
Licenses - indefinite
|
7,400
|
|
|
—
|
|
|
—
|
|
|
7,400
|
|
|
7,400
|
|
|
—
|
|
|
—
|
|
|
7,400
|
|
||||||||
Other intangibles - finite
|
117,763
|
|
|
—
|
|
|
(85,243
|
)
|
|
32,520
|
|
|
117,586
|
|
|
—
|
|
|
(77,128
|
)
|
|
40,458
|
|
||||||||
Subtotal
|
481,126
|
|
|
—
|
|
|
(100,558
|
)
|
|
380,568
|
|
|
479,199
|
|
|
—
|
|
|
(92,428
|
)
|
|
386,771
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beauty:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
81,841
|
|
|
(46,490
|
)
|
|
—
|
|
|
35,351
|
|
|
81,841
|
|
|
(46,490
|
)
|
|
—
|
|
|
35,351
|
|
||||||||
Trademarks - indefinite
|
30,407
|
|
|
—
|
|
|
—
|
|
|
30,407
|
|
|
30,407
|
|
|
—
|
|
|
—
|
|
|
30,407
|
|
||||||||
Trademarks - finite
|
150
|
|
|
—
|
|
|
(101
|
)
|
|
49
|
|
|
150
|
|
|
—
|
|
|
(97
|
)
|
|
53
|
|
||||||||
Licenses - indefinite
|
10,300
|
|
|
—
|
|
|
—
|
|
|
10,300
|
|
|
10,300
|
|
|
—
|
|
|
—
|
|
|
10,300
|
|
||||||||
Licenses - finite
|
13,696
|
|
|
—
|
|
|
(12,403
|
)
|
|
1,293
|
|
|
13,696
|
|
|
—
|
|
|
(12,166
|
)
|
|
1,530
|
|
||||||||
Other intangibles - finite
|
46,402
|
|
|
—
|
|
|
(46,110
|
)
|
|
292
|
|
|
46,402
|
|
|
—
|
|
|
(45,133
|
)
|
|
1,269
|
|
||||||||
Subtotal
|
182,796
|
|
|
(46,490
|
)
|
|
(58,614
|
)
|
|
77,692
|
|
|
182,796
|
|
|
(46,490
|
)
|
|
(57,396
|
)
|
|
78,910
|
|
||||||||
Total
|
$
|
1,121,462
|
|
|
$
|
(46,490
|
)
|
|
$
|
(178,087
|
)
|
|
$
|
896,885
|
|
|
$
|
1,119,079
|
|
|
$
|
(46,490
|
)
|
|
$
|
(167,354
|
)
|
|
$
|
905,235
|
|
Aggregate Amortization Expense
|
|
||
For the three months ended
(in thousands)
|
|||
November 30, 2018
|
$
|
3,300
|
|
November 30, 2017
|
4,660
|
|
Aggregate Amortization Expense
|
|
||
For the nine months ended
(in thousands)
|
|||
November 30, 2018
|
$
|
10,822
|
|
November 30, 2017
|
14,198
|
|
•
|
We issued
1,160
and
3,897
shares to non-employee Board members with a total grant date fair value of
$0.1
and
$0.3 million
, respectively, and share prices of
$120.70
and
$100.08
, respectively.
|
•
|
We granted time-vested restricted stock units ("RSUs") that may be settled for
77,834
and
149,632
shares of common stock, respectively. The RSU grants have a weighted average grant price of
$125.44
and
$106.67
per share, respectively, for a total award fair value at date of grant of
$9.8
million and
$16.0
million, respectively.
|
•
|
There were no performance-based restricted stock units ("PSUs") granted during the three months ended November 30, 2018. For the nine-months ended November 30, 2018, we granted PSUs that may be settled for
76,064
shares of common stock with a weighted average grant price of
$86.24
per share and a total award fair value at date of grant of
$6.6
million.
|
•
|
RSUs for
875
and
37,942
shares vested and settled, respectively, with a total fair value at settlement of
$0.1
and
$3.4
million and a weighted average grant price of
$126.99
and
$89.55
per share, respectively.
|
•
|
PSUs for
2,213
and
102,617
shares vested and settled, respectively, with a total grant date fair value of
$0.3
and
$9.4
million, and a weighted average grant price of
$126.94
and
$91.88
per share, respectively.
|
•
|
Employees exercised stock options to purchase
9,584
and
120,768
shares of common stock, respectively.
|
|
Three Months Ended November 30,
|
||||||
(in thousands, except per share data)
|
2018
|
|
2017
|
||||
Stock options
|
$
|
128
|
|
|
$
|
327
|
|
Directors stock compensation
|
200
|
|
|
175
|
|
||
Performance based and other stock awards
|
5,419
|
|
|
3,939
|
|
||
Employee stock purchase plan
|
329
|
|
|
—
|
|
||
Share-based compensation expense
|
6,076
|
|
|
4,441
|
|
||
Less income tax benefits
|
(398
|
)
|
|
(781
|
)
|
||
Share-based compensation expense, net of income tax benefits
|
$
|
5,678
|
|
|
$
|
3,660
|
|
|
|
|
|
||||
Impact of share-based compensation on earnings per share from continuing operations:
|
|
|
|
||||
Basic
|
$
|
0.22
|
|
|
$
|
0.13
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.13
|
|
|
Nine Months Ended November 30,
|
||||||
(in thousands, except per share data)
|
2018
|
|
2017
|
||||
Stock options
|
$
|
655
|
|
|
$
|
1,289
|
|
Directors stock compensation
|
550
|
|
|
575
|
|
||
Performance based and other stock awards
|
15,337
|
|
|
8,664
|
|
||
Employee stock purchase plan
|
651
|
|
|
263
|
|
||
Share-based compensation expense
|
17,193
|
|
|
10,791
|
|
||
Less income tax benefits
|
(1,009
|
)
|
|
(1,862
|
)
|
||
Share-based compensation expense, net of income tax benefits
|
$
|
16,184
|
|
|
$
|
8,929
|
|
|
|
|
|
||||
Impact of share-based compensation on earnings per share from continuing operations:
|
|
|
|
||||
Basic
|
$
|
0.61
|
|
|
$
|
0.33
|
|
Diluted
|
$
|
0.61
|
|
|
$
|
0.33
|
|
|
Three Months Ended November 30,
|
|
Nine Months Ended November 30,
|
||||||||||
(in thousands, except share and per share data)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Common stock repurchased on the open market:
|
|
|
|
|
|
||||||||
Number of shares
|
813,696
|
|
311,100
|
|
|
1,220,721
|
|
311,100
|
|
||||
Aggregate value of shares
|
$
|
100,000
|
|
$
|
29,158
|
|
|
$
|
137,067
|
|
$
|
29,158
|
|
Average price per share
|
$
|
122.90
|
|
$
|
93.72
|
|
|
$
|
112.28
|
|
$
|
93.72
|
|
|
|
|
|
|
|
||||||||
Common stock received in connection with share-based compensation:
|
|
|
|
|
|
||||||||
Number of shares
|
1,398
|
|
299
|
|
|
58,470
|
|
72,864
|
|
||||
Aggregate value of shares
|
$
|
175
|
|
$
|
27
|
|
|
$
|
5,348
|
|
$
|
7,000
|
|
Average price per share
|
$
|
125.03
|
|
$
|
91.94
|
|
|
$
|
91.47
|
|
$
|
96.07
|
|
(in thousands)
|
Original
Date
Borrowed
|
|
Interest
Rates
|
|
Matures
|
|
November 30, 2018
|
|
February 28, 2018
|
||||
Mississippi Business Finance Corporation Loan (the "MBFC Loan") (1)
|
03/13
|
|
Floating
|
|
03/23
|
|
$
|
22,331
|
|
|
$
|
24,219
|
|
Credit Agreement (2)
|
01/15
|
|
Floating
|
|
12/21
|
|
317,399
|
|
|
265,650
|
|
||
Total long-term debt
|
|
|
|
|
|
|
339,730
|
|
|
289,869
|
|
||
Less current maturities of long-term debt
|
|
|
|
|
|
|
(1,884
|
)
|
|
(1,884
|
)
|
||
Long-term debt, excluding current maturities
|
|
|
|
|
|
|
$
|
337,846
|
|
|
$
|
287,985
|
|
(1)
|
The MBFC Loan is unsecured with an original balance of
$37.6 million
and incurs floating interest based on applicable LIBOR plus a margin of up to
2.0%
, or a Base Rate plus a margin of up to
1.0%
, as determined by the interest rate elected and the Leverage Ratio. The loan is subject to holder’s call on or after March 1, 2018. The loan can be prepaid without penalty. The remaining principal balance is payable as follows:
$1.9 million
annually on March 1, 2019 through 2022; and
$14.8 million
on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023.
|
(2)
|
Floating interest rates are hedged with an interest rate swap to effectively fix interest rates on
$100 million
of the outstanding principal balance under the Credit Agreement. Notes 12 and 13 to these condensed consolidated financial statements provide additional information regarding the interest rate swap.
|
Level 1:
|
Observable inputs such as quoted prices for identical assets or liabilities in active markets;
|
Level 2:
|
Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable; and
|
Level 3:
|
Unobservable inputs that reflect the reporting entity’s own assumptions.
|
|
Fair Values at
|
||
|
November 30, 2018
|
||
(in thousands)
|
(Level 2) (1)
|
||
Assets:
|
|
|
|
Money market accounts
|
$
|
646
|
|
Interest rate swap
|
2,553
|
|
|
Foreign currency contracts
|
4,057
|
|
|
Total assets
|
$
|
7,256
|
|
|
|
|
|
Liabilities:
|
|
|
|
Floating rate debt
|
$
|
339,730
|
|
Foreign currency contracts
|
64
|
|
|
Total liabilities
|
$
|
339,794
|
|
|
Fair Values at
|
||
|
February 28, 2018
|
||
(in thousands)
|
(Level 2) (1)
|
||
Assets:
|
|
|
|
Money market accounts
|
$
|
1,107
|
|
Interest rate swap
|
2,481
|
|
|
Foreign currency contracts
|
642
|
|
|
Total assets
|
$
|
4,230
|
|
|
|
|
|
Liabilities:
|
|
|
|
Floating rate debt
|
$
|
289,869
|
|
Foreign currency contracts
|
2,606
|
|
|
Total liabilities
|
$
|
292,475
|
|
(1)
|
Our financial assets and liabilities are classified as Level 2 because their valuation is dependent on observable inputs and other quoted prices for similar assets or liabilities, or model-derived valuations whose significant value drivers are observable.
|
(in thousands)
|
November 30, 2018
|
||||||||||||||||||||||
Derivatives designated as hedging instruments
|
Hedge Type
|
|
Final
Settlement Date
|
|
Notional Amount
|
|
Prepaid
Expenses
and Other
Current Assets
|
|
Other Assets
|
|
Accrued
Expenses
and Other
Current Liabilities
|
|
Other
Liabilities, Non-current
|
||||||||||
Foreign currency contracts - sell Euro
|
Cash flow
|
|
11/2019
|
|
€
|
20,500
|
|
|
$
|
1,759
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts - sell Canadian Dollars
|
Cash flow
|
|
01/2020
|
|
$
|
16,000
|
|
|
477
|
|
|
26
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts - sell Pounds
|
Cash flow
|
|
02/2020
|
|
£
|
18,500
|
|
|
1,490
|
|
|
81
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts - sell Mexican Pesos
|
Cash flow
|
|
09/2019
|
|
$
|
40,000
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap
|
Cash flow
|
|
12/2021
|
|
$
|
100,000
|
|
|
901
|
|
|
1,652
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
|
|
|
|
|
|
4,666
|
|
|
1,759
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives not designated under hedge accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency contracts - cross-currency debt swap - Euro
|
(1)
|
|
04/2020
|
|
$
|
5,280
|
|
|
—
|
|
|
185
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts - cross-currency debt swaps - Pound
|
(1)
|
|
04/2020
|
|
$
|
6,395
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||
Subtotal
|
|
|
|
|
|
|
—
|
|
|
185
|
|
|
—
|
|
|
64
|
|
||||||
Total fair value
|
|
|
|
|
|
|
$
|
4,666
|
|
|
$
|
1,944
|
|
|
$
|
—
|
|
|
$
|
64
|
|
(in thousands)
|
February 28, 2018
|
||||||||||||||||||||||
Derivatives designated as hedging instruments
|
Hedge Type
|
|
Final
Settlement Date |
|
Notional Amount
|
|
Prepaid
Expenses and Other Current Assets |
|
Other Assets
|
|
Accrued
Expenses and Other Current Liabilities |
|
Other
Liabilities, Non-current |
||||||||||
Foreign currency contracts - sell Euro
|
Cash flow
|
|
07/2019
|
|
€
|
38,000
|
|
|
$
|
—
|
|
|
$
|
102
|
|
|
$
|
1,320
|
|
|
$
|
—
|
|
Foreign currency contracts - sell Canadian Dollars
|
Cash flow
|
|
06/2019
|
|
$
|
27,750
|
|
|
378
|
|
|
101
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts - sell Pounds
|
Cash flow
|
|
04/2019
|
|
£
|
19,500
|
|
|
—
|
|
|
56
|
|
|
513
|
|
|
—
|
|
||||
Foreign currency contracts - sell Mexican Pesos
|
Cash flow
|
|
05/2018
|
|
$
|
20,000
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap
|
Cash flow
|
|
12/2021
|
|
$
|
100,000
|
|
|
539
|
|
|
1,942
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
|
|
|
|
|
|
922
|
|
|
2,201
|
|
|
1,833
|
|
|
—
|
|
||||||
Derivatives not designated under hedge accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency contracts - cross-currency debt swap - Euro
|
(1)
|
|
04/2020
|
|
$
|
5,280
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
208
|
|
||||
Foreign currency contracts - cross-currency debt swaps - Pound
|
(1)
|
|
04/2020
|
|
$
|
6,395
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
565
|
|
||||
Subtotal
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
773
|
|
||||||
Total fair value
|
|
|
|
|
|
|
$
|
922
|
|
|
$
|
2,201
|
|
|
$
|
1,833
|
|
|
$
|
773
|
|
(1)
|
These are foreign currency contracts for which we have not elected hedge accounting. We refer to them as “cross-currency debt swaps”. They, in effect, adjust the currency denomination of a portion of our outstanding debt to the Euro and British Pound, as applicable, for the notional amounts reported, creating an economic hedge against currency movements.
|
|
Three Months Ended November 30,
|
||||||||||||||||||||||||||
|
Gain (Loss)
Recognized in OCI
(effective portion)
|
|
Gain (Loss) Reclassified from
Accumulated Other Comprehensive
Income (Loss) into Income
|
|
Gain (Loss) Recognized
As Income
|
||||||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
Location
|
|
2018
|
|
2017
|
|
Location
|
|
2018
|
|
2017
|
||||||||||||
Currency contracts - cash flow hedges
|
$
|
(563
|
)
|
|
$
|
2,928
|
|
|
SG&A
|
|
$
|
(1,178
|
)
|
|
$
|
1,328
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps - cash flow hedges
|
(4
|
)
|
|
753
|
|
|
Interest expense
|
|
—
|
|
|
—
|
|
|
Interest expense
|
|
136
|
|
|
(48
|
)
|
||||||
Cross-currency debt swaps - principal
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
SG&A
|
|
228
|
|
|
(419
|
)
|
||||||
Cross-currency debt swaps - interest
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
Interest Expense
|
|
73
|
|
|
74
|
|
||||||
Total
|
$
|
(567
|
)
|
|
$
|
3,681
|
|
|
|
|
$
|
(1,178
|
)
|
|
$
|
1,328
|
|
|
|
|
$
|
437
|
|
|
$
|
(393
|
)
|
|
Nine Months Ended November 30,
|
||||||||||||||||||||||||||
|
Gain (Loss)
Recognized in OCI
(effective portion)
|
|
Gain (Loss) Reclassified from
Accumulated Other Comprehensive
Income (Loss) into Income
|
|
Gain (Loss) Recognized
As Income
|
||||||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
Location
|
|
2018
|
|
2017
|
|
Location
|
|
2018
|
|
2017
|
||||||||||||
Currency contracts - cash flow hedges
|
$
|
3,962
|
|
|
$
|
(1,275
|
)
|
|
SG&A
|
|
$
|
(1,101
|
)
|
|
$
|
2,208
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps - cash flow hedges
|
72
|
|
|
753
|
|
|
Interest expense
|
|
—
|
|
|
—
|
|
|
Interest expense
|
|
347
|
|
|
(48
|
)
|
||||||
Cross-currency debt swaps - principal
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
SG&A
|
|
894
|
|
|
(1,183
|
)
|
||||||
Cross-currency debt swaps - interest
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
Interest Expense
|
|
147
|
|
|
74
|
|
||||||
Total
|
$
|
4,034
|
|
|
$
|
(522
|
)
|
|
|
|
$
|
(1,101
|
)
|
|
$
|
2,208
|
|
|
|
|
$
|
1,388
|
|
|
$
|
(1,157
|
)
|
|
Three Months Ended November 30, 2018
|
||||||||||||||
(in thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||
Sales revenue, net
|
$
|
142,937
|
|
|
$
|
187,863
|
|
|
$
|
100,281
|
|
|
$
|
431,081
|
|
Restructuring charges
|
(20
|
)
|
|
—
|
|
|
45
|
|
|
25
|
|
||||
Operating income
|
29,839
|
|
|
19,213
|
|
|
12,244
|
|
|
61,296
|
|
||||
Capital and intangible asset expenditures
|
5,534
|
|
|
3,128
|
|
|
443
|
|
|
9,105
|
|
||||
Depreciation and amortization
|
1,408
|
|
|
4,326
|
|
|
1,461
|
|
|
7,195
|
|
|
Three Months Ended November 30, 2017
|
||||||||||||||
(in thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||
Sales revenue, net
|
$
|
128,261
|
|
|
$
|
189,240
|
|
|
$
|
103,340
|
|
|
$
|
420,841
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
1,165
|
|
|
1,165
|
|
||||
Operating income
|
29,809
|
|
|
27,584
|
|
|
9,947
|
|
|
67,340
|
|
||||
Capital and intangible asset expenditures
|
1,705
|
|
|
500
|
|
|
565
|
|
|
2,770
|
|
||||
Depreciation and amortization
|
1,444
|
|
|
4,232
|
|
|
2,707
|
|
|
8,383
|
|
|
Nine Months Ended November 30, 2018
|
||||||||||||||
(in thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||
Sales revenue, net
|
$
|
397,738
|
|
|
$
|
527,077
|
|
|
$
|
254,493
|
|
|
$
|
1,179,308
|
|
Restructuring charges
|
740
|
|
|
358
|
|
|
1,511
|
|
|
2,609
|
|
||||
Operating income
|
80,351
|
|
|
52,501
|
|
|
22,431
|
|
|
155,283
|
|
||||
Capital and intangible asset expenditures
|
12,830
|
|
|
7,783
|
|
|
1,553
|
|
|
22,166
|
|
||||
Depreciation and amortization
|
4,414
|
|
|
12,703
|
|
|
5,373
|
|
|
22,490
|
|
|
Nine Months Ended November 30, 2017
|
||||||||||||||
(in thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||
Sales revenue, net
|
$
|
342,050
|
|
|
$
|
483,592
|
|
|
$
|
265,639
|
|
|
$
|
1,091,281
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
1,165
|
|
|
1,165
|
|
||||
Asset impairment charges
|
—
|
|
|
—
|
|
|
4,000
|
|
|
4,000
|
|
||||
Operating income
|
71,085
|
|
|
49,243
|
|
|
17,302
|
|
|
137,630
|
|
||||
Capital and intangible asset expenditures
|
6,463
|
|
|
2,746
|
|
|
1,166
|
|
|
10,375
|
|
||||
Depreciation and amortization
|
4,290
|
|
|
12,553
|
|
|
8,296
|
|
|
25,139
|
|
|
Three Months Ended
November 30, |
|
Nine Months Ended
November 30, |
||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Weighted average shares outstanding, basic
|
26,057
|
|
|
27,113
|
|
|
26,321
|
|
|
27,140
|
|
Incremental shares from share-based compensation arrangements
|
309
|
|
|
154
|
|
|
199
|
|
|
164
|
|
Weighted average shares outstanding, diluted
|
26,366
|
|
|
27,267
|
|
|
26,520
|
|
|
27,304
|
|
|
|
|
|
|
|
|
|
||||
Antidilutive securities
|
137
|
|
|
354
|
|
|
281
|
|
|
344
|
|
•
|
Consolidated net sales revenue
increased
2.4%
, or
$10.2 million
, to
$431.1 million
for the
three
months ended
November 30, 2018
, compared to
$420.8 million
for the same period last year. Net sales from our Leadership Brands were
$343.4 million
for the three months ended
November 30, 2018
, compared to
$327.3 million
for the same period last year, representing growth of 4.9%.
|
•
|
Consolidated operating income was
$61.3 million
for the
three
months ended
November 30, 2018
, compared to
$67.3 million
for the same period last year. Consolidated operating income for the
three
months ended
November 30, 2017
included pre-tax restructuring charges of
$1.2 million
.
|
•
|
Consolidated adjusted operating income
decreased
8.9%
, or
$6.9 million
, to
$70.6 million
for the
three
months ended
November 30, 2018
, compared to
$77.6 million
for the same period last year. Consolidated adjusted operating margin decreased
2.0
percentage points to
16.4%
of consolidated net sales revenue for the
three
months ended
November 30, 2018
, compared to
18.4%
for the same period last year.
|
•
|
Income from continuing operations was
$54.3 million
for the
three
months ended
November 30, 2018
, compared to
$58.6 million
for the same period last year. Diluted earnings per share (“EPS”) from continuing operations was
$2.06
for the
three
months ended
November 30, 2018
, compared to
$2.15
for the same period last year.
|
•
|
Adjusted income from continuing operations decreased
7.1%
to
$63.2 million
for the
three
months ended
November 30, 2018
, compared to
$68.1 million
for the same period last year. Adjusted diluted EPS from continuing operations decreased
4.0%
to
$2.40
for the
three
months ended
November 30, 2018
, compared to
$2.50
for the same period last year.
|
•
|
Loss from discontinued operations was
$4.9 million
, or
$0.18
per diluted share, for the three months ended November 30, 2018, compared to a loss of
$89.1 million
, or
$3.27
per diluted share, for the same period last year.
|
•
|
Net income was
$49.5 million
for the
three
months ended
November 30, 2018
, compared to a net loss of
$30.4 million
for the same period last year. Diluted EPS was
$1.88
for the
three
months ended
November 30, 2018
compared to a loss of
$1.12
per diluted share for the same period last year.
|
•
|
Consolidated net sales revenue
increased
8.1%
, or
$88.0 million
, to
$1,179.3 million
for the
nine
months ended
November 30, 2018
, compared to
$1,091.3 million
for the same period last year. Net sales from our Leadership Brands were
$943.2 million
for the
nine
months ended
November 30, 2018
, compared to
$837.0 million
for the same period last year.
|
•
|
Consolidated operating income was
$155.3 million
for the
nine
months ended
November 30, 2018
, compared to
$137.6 million
for the same period last year. Consolidated operating income for the
nine
months ended
November 30, 2018
included pre-tax restructuring charges of
$2.6 million
related to Project Refuel. Consolidated operating income for the
nine
months ended
November 30, 2017
included pre-tax non-cash impairment charges of
$4.0 million
, a pre-tax charge of
$3.6 million
related to the bankruptcy of Toys "R" Us ("TRU"), and pre-tax restructuring charges of
$1.2 million
.
|
•
|
Consolidated adjusted operating income
increased
8.5%
, or
$14.5 million
, to
$185.7 million
for the
nine
months ended
November 30, 2018
, compared to
$171.2 million
for the same period last year. Consolidated adjusted operating margin increased
0.1
percentage points to
15.8%
of consolidated net sales revenue for the
nine
months ended
November 30, 2018
, compared to
15.7%
for the same period last year.
|
•
|
Income from continuing operations was
$136.5 million
for the
nine
months ended
November 30, 2018
, compared to
$120.5 million
for the same period last year. Diluted EPS from continuing operations was
$5.15
for the
nine
months ended
November 30, 2018
, compared to
$4.41
for the same period last year.
|
•
|
Adjusted income from continuing operations increased
9.2%
to
$165.5 million
for the
nine
months ended
November 30, 2018
, compared to
$151.6 million
for the same period last year. Adjusted diluted EPS from continuing operations increased
12.4%
to
$6.24
for the
nine
months ended
November 30, 2018
, compared to
$5.55
for the same period last year.
|
•
|
Loss from discontinued operations, net of tax, was
$5.2 million
for the
nine
months ended
November 30, 2018
, compared to a loss of
$136.1 million
for the same period last year. Loss from discontinued operations was
$0.20
per diluted share for the
nine
months ended
November 30, 2018
compared to a loss of
$4.99
per diluted share for the same period last year.
|
•
|
Net income was
$131.3 million
for the
nine
months ended
November 30, 2018
compared to a net loss of
$15.6 million
for the same period last year. Diluted EPS was
$4.95
for the
nine
months ended
November 30, 2018
compared to a loss of
$0.57
per diluted share for the same period last year.
|
|
Three Months Ended November 30,
|
|
|
|
|
|
% of Sales Revenue, net
|
|||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|||||||||
Sales revenue by segment, net
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Housewares
|
$
|
142,937
|
|
|
$
|
128,261
|
|
|
$
|
14,676
|
|
|
11.4
|
%
|
|
33.2
|
%
|
|
30.5
|
%
|
Health & Home
|
187,863
|
|
|
189,240
|
|
|
(1,377
|
)
|
|
(0.7
|
)%
|
|
43.6
|
%
|
|
45.0
|
%
|
|||
Beauty
|
100,281
|
|
|
103,340
|
|
|
(3,059
|
)
|
|
(3.0
|
)%
|
|
23.3
|
%
|
|
24.6
|
%
|
|||
Total sales revenue, net
|
431,081
|
|
|
420,841
|
|
|
10,240
|
|
|
2.4
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|||
Cost of goods sold
|
249,236
|
|
|
242,703
|
|
|
6,533
|
|
|
2.7
|
%
|
|
57.8
|
%
|
|
57.7
|
%
|
|||
Gross profit
|
181,845
|
|
|
178,138
|
|
|
3,707
|
|
|
2.1
|
%
|
|
42.2
|
%
|
|
42.3
|
%
|
|||
Selling, general and administrative expense ("SGA")
|
120,524
|
|
|
109,633
|
|
|
10,891
|
|
|
9.9
|
%
|
|
28.0
|
%
|
|
26.1
|
%
|
|||
Asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Restructuring charges
|
25
|
|
|
1,165
|
|
|
(1,140
|
)
|
|
(97.9
|
)%
|
|
—
|
%
|
|
0.3
|
%
|
|||
Operating income
|
61,296
|
|
|
67,340
|
|
|
(6,044
|
)
|
|
(9.0
|
)%
|
|
14.2
|
%
|
|
16.0
|
%
|
|||
Nonoperating income, net
|
15
|
|
|
34
|
|
|
(19
|
)
|
|
(55.9
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Interest expense
|
(2,971
|
)
|
|
(3,505
|
)
|
|
534
|
|
|
(15.2
|
)%
|
|
(0.7
|
)%
|
|
(0.8
|
)%
|
|||
Income before income tax
|
58,340
|
|
|
63,869
|
|
|
(5,529
|
)
|
|
(8.7
|
)%
|
|
13.5
|
%
|
|
15.2
|
%
|
|||
Income tax expense
|
4,020
|
|
|
5,245
|
|
|
(1,225
|
)
|
|
(23.4
|
)%
|
|
0.9
|
%
|
|
1.2
|
%
|
|||
Income from continuing operations
|
54,320
|
|
|
58,624
|
|
|
(4,304
|
)
|
|
(7.3
|
)%
|
|
12.6
|
%
|
|
13.9
|
%
|
|||
Loss from discontinued operations (1)
|
(4,850
|
)
|
|
(89,060
|
)
|
|
84,210
|
|
|
*
|
|
|
(1.1
|
)%
|
|
(21.2
|
)%
|
|||
Net income (loss)
|
$
|
49,470
|
|
|
$
|
(30,436
|
)
|
|
$
|
79,906
|
|
|
*
|
|
|
11.5
|
%
|
|
(7.2
|
)%
|
|
Nine Months Ended November 30,
|
|
|
|
|
|
% of Sales Revenue, net
|
|||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|||||||||
Sales revenue by segment, net
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Housewares
|
$
|
397,738
|
|
|
$
|
342,050
|
|
|
$
|
55,688
|
|
|
16.3
|
%
|
|
33.7
|
%
|
|
31.3
|
%
|
Health & Home
|
527,077
|
|
|
483,592
|
|
|
43,485
|
|
|
9.0
|
%
|
|
44.7
|
%
|
|
44.3
|
%
|
|||
Beauty
|
254,493
|
|
|
265,639
|
|
|
(11,146
|
)
|
|
(4.2
|
)%
|
|
21.6
|
%
|
|
24.3
|
%
|
|||
Total sales revenue, net
|
1,179,308
|
|
|
1,091,281
|
|
|
88,027
|
|
|
8.1
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|||
Cost of goods sold
|
695,732
|
|
|
638,096
|
|
|
57,636
|
|
|
9.0
|
%
|
|
59.0
|
%
|
|
58.5
|
%
|
|||
Gross profit
|
483,576
|
|
|
453,185
|
|
|
30,391
|
|
|
6.7
|
%
|
|
41.0
|
%
|
|
41.5
|
%
|
|||
SGA
|
325,684
|
|
|
310,390
|
|
|
15,294
|
|
|
4.9
|
%
|
|
27.6
|
%
|
|
28.4
|
%
|
|||
Asset impairment charges
|
—
|
|
|
4,000
|
|
|
(4,000
|
)
|
|
(100.0
|
)%
|
|
—
|
%
|
|
0.4
|
%
|
|||
Restructuring charges
|
2,609
|
|
|
1,165
|
|
|
1,444
|
|
|
123.9
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|||
Operating income
|
155,283
|
|
|
137,630
|
|
|
17,653
|
|
|
12.8
|
%
|
|
13.2
|
%
|
|
12.6
|
%
|
|||
Nonoperating income, net
|
175
|
|
|
281
|
|
|
(106
|
)
|
|
(37.7
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Interest expense
|
(8,413
|
)
|
|
(10,984
|
)
|
|
2,571
|
|
|
(23.4
|
)%
|
|
(0.7
|
)%
|
|
(1.0
|
)%
|
|||
Income before income tax
|
147,045
|
|
|
126,927
|
|
|
20,118
|
|
|
15.9
|
%
|
|
12.5
|
%
|
|
11.6
|
%
|
|||
Income tax expense
|
10,535
|
|
|
6,423
|
|
|
4,112
|
|
|
64.0
|
%
|
|
0.9
|
%
|
|
0.6
|
%
|
|||
Income from continuing operations
|
136,510
|
|
|
120,504
|
|
|
16,006
|
|
|
13.3
|
%
|
|
11.6
|
%
|
|
11.0
|
%
|
|||
Loss from discontinued operations (1)
|
(5,231
|
)
|
|
(136,139
|
)
|
|
130,908
|
|
|
*
|
|
|
(0.4
|
)%
|
|
(12.5
|
)%
|
|||
Net income (loss)
|
$
|
131,279
|
|
|
$
|
(15,635
|
)
|
|
$
|
146,914
|
|
|
*
|
|
|
11.1
|
%
|
|
(1.4
|
)%
|
(1)
|
During fiscal
2018
, we divested our Nutritional Supplements segment, which is reported as discontinued operations for all periods presented. For more information see Note 4 to the accompanying condensed consolidated financial statements.
|
|
Three Months Ended November 30,
|
||||||||||||||
(in thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||
Fiscal 2018 sales revenue, net
|
$
|
128,261
|
|
|
$
|
189,240
|
|
|
$
|
103,340
|
|
|
$
|
420,841
|
|
Core business growth (decline)
|
14,828
|
|
|
(313
|
)
|
|
(2,458
|
)
|
|
12,057
|
|
||||
Impact of foreign currency
|
(152
|
)
|
|
(1,064
|
)
|
|
(601
|
)
|
|
(1,817
|
)
|
||||
Change in sales revenue, net
|
14,676
|
|
|
(1,377
|
)
|
|
(3,059
|
)
|
|
10,240
|
|
||||
Fiscal 2019 sales revenue, net
|
$
|
142,937
|
|
|
$
|
187,863
|
|
|
$
|
100,281
|
|
|
$
|
431,081
|
|
|
|
|
|
|
|
|
|
||||||||
Total net sales revenue growth
|
11.4
|
%
|
|
(0.7
|
)%
|
|
(3.0
|
)%
|
|
2.4
|
%
|
||||
Core business growth (decline)
|
11.6
|
%
|
|
(0.2
|
)%
|
|
(2.4
|
)%
|
|
2.9
|
%
|
||||
Impact of foreign currency
|
(0.1
|
)%
|
|
(0.6
|
)%
|
|
(0.6
|
)%
|
|
(0.4
|
)%
|
|
Three Months Ended November 30,
|
|||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Leadership Brand sales revenue, net
|
$
|
343,364
|
|
|
$
|
327,288
|
|
|
$
|
16,076
|
|
|
4.9
|
%
|
All other sales revenue, net
|
87,717
|
|
|
93,553
|
|
|
(5,836
|
)
|
|
(6.2
|
)%
|
|||
Total sales revenue, net
|
$
|
431,081
|
|
|
$
|
420,841
|
|
|
$
|
10,240
|
|
|
2.4
|
%
|
•
|
the favorable comparative impact of restructuring charges in the same period last year; and
|
•
|
lower amortization expense.
|
|
Three Months Ended November 30, 2018
|
||||||||||||||||||||||||||
(In thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||||||||||||||
Operating income, as reported (GAAP)
|
$
|
29,839
|
|
|
20.9
|
%
|
|
$
|
19,213
|
|
|
10.2
|
%
|
|
$
|
12,244
|
|
|
12.2
|
%
|
|
$
|
61,296
|
|
|
14.2
|
%
|
Asset impairment charges
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||||
Restructuring charges
|
(20
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
45
|
|
|
—
|
%
|
|
25
|
|
|
—
|
%
|
||||
Subtotal
|
29,819
|
|
|
20.9
|
%
|
|
19,213
|
|
|
10.2
|
%
|
|
12,289
|
|
|
12.3
|
%
|
|
61,321
|
|
|
14.2
|
%
|
||||
Amortization of intangible assets
|
489
|
|
|
0.3
|
%
|
|
2,721
|
|
|
1.4
|
%
|
|
90
|
|
|
0.1
|
%
|
|
3,300
|
|
|
0.8
|
%
|
||||
Non-cash share-based compensation
|
2,293
|
|
|
1.6
|
%
|
|
2,548
|
|
|
1.4
|
%
|
|
1,175
|
|
|
1.2
|
%
|
|
6,016
|
|
|
1.4
|
%
|
||||
Adjusted operating income (non-GAAP)
|
$
|
32,601
|
|
|
22.8
|
%
|
|
$
|
24,482
|
|
|
13.0
|
%
|
|
$
|
13,554
|
|
|
13.5
|
%
|
|
$
|
70,637
|
|
|
16.4
|
%
|
|
Three Months Ended November 30, 2017
|
||||||||||||||||||||||||||
(In thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||||||||||||||
Operating income, as reported (GAAP)
|
$
|
29,809
|
|
|
23.2
|
%
|
|
$
|
27,584
|
|
|
14.6
|
%
|
|
$
|
9,947
|
|
|
9.6
|
%
|
|
$
|
67,340
|
|
|
16.0
|
%
|
Asset impairment charges
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||||
Restructuring charges
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1,165
|
|
|
1.1
|
%
|
|
1,165
|
|
|
0.3
|
%
|
||||
Subtotal
|
29,809
|
|
|
23.2
|
%
|
|
27,584
|
|
|
14.6
|
%
|
|
11,112
|
|
|
10.8
|
%
|
|
68,505
|
|
|
16.3
|
%
|
||||
Amortization of intangible assets
|
489
|
|
|
0.4
|
%
|
|
2,797
|
|
|
1.5
|
%
|
|
1,374
|
|
|
1.3
|
%
|
|
4,660
|
|
|
1.1
|
%
|
||||
Non-cash share-based compensation
|
1,439
|
|
|
1.1
|
%
|
|
1,711
|
|
|
0.9
|
%
|
|
1,239
|
|
|
1.2
|
%
|
|
4,389
|
|
|
1.0
|
%
|
||||
Adjusted operating income (non-GAAP)
|
$
|
31,737
|
|
|
24.7
|
%
|
|
$
|
32,092
|
|
|
17.0
|
%
|
|
$
|
13,725
|
|
|
13.3
|
%
|
|
$
|
77,554
|
|
|
18.4
|
%
|
•
|
higher advertising expense;
|
•
|
the impact of tariff increases;
|
•
|
higher freight expense; and
|
•
|
increased share-based compensation expense.
|
•
|
the favorable comparative impact of foreign currency exchange and forward contract settlements;
|
•
|
the net favorable comparative impact of pre-tax restructuring charges of $1.1 million;
|
•
|
lower amortization expense; and
|
•
|
the favorable margin impact from Leadership Brand growth.
|
•
|
higher advertising expense;
|
•
|
higher annual incentive compensation expense related to current year performance;
|
•
|
higher freight expense; and
|
•
|
higher rent expense related to new office space.
|
•
|
the margin impact of more favorable product and channel mix; and
|
•
|
the favorable impact of increased operating leverage from net sales growth.
|
•
|
higher advertising expense;
|
•
|
increased promotional spending and trade support with retail customers;
|
•
|
the impact of tariff increases;
|
•
|
the margin impact of a less favorable product and channel mix; and
|
•
|
higher personnel expense.
|
•
|
the net favorable comparative impact of pre-tax restructuring charges of
$1.1
million;
|
•
|
lower amortization expense; and
|
•
|
personnel cost savings from Project Refuel.
|
•
|
higher advertising expense; and
|
•
|
higher freight expense.
|
|
Three Months Ended November 30, 2018
|
||||||||||||||||||||||
|
Income From Continuing Operations
|
|
Diluted EPS
|
||||||||||||||||||||
(in thousands, except per share data)
|
Before Tax
|
|
Tax
|
|
Net of Tax
|
|
Before Tax
|
|
Tax
|
|
Net of Tax
|
||||||||||||
As reported (GAAP)
|
$
|
58,340
|
|
|
$
|
4,020
|
|
|
$
|
54,320
|
|
|
$
|
2.21
|
|
|
$
|
0.15
|
|
|
$
|
2.06
|
|
Restructuring charges
|
25
|
|
|
2
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal
|
58,365
|
|
|
4,022
|
|
|
54,343
|
|
|
2.21
|
|
|
0.15
|
|
|
2.06
|
|
||||||
Amortization of intangible assets
|
3,300
|
|
|
46
|
|
|
3,254
|
|
|
0.13
|
|
|
—
|
|
|
0.12
|
|
||||||
Non-cash share-based compensation
|
6,016
|
|
|
415
|
|
|
5,601
|
|
|
0.23
|
|
|
0.02
|
|
|
0.21
|
|
||||||
Adjusted (non-GAAP)
|
$
|
67,681
|
|
|
$
|
4,483
|
|
|
$
|
63,198
|
|
|
$
|
2.57
|
|
|
$
|
0.17
|
|
|
$
|
2.40
|
|
|
|||||||||||||||||||||||
Weighted average shares of common stock used in computing diluted EPS
|
26,366
|
|
|
Three Months Ended November 30, 2017
|
||||||||||||||||||||||
|
Income From Continuing Operations
|
|
Diluted EPS
|
||||||||||||||||||||
(in thousands, except per share data)
|
Before Tax
|
|
Tax
|
|
Net of Tax
|
|
Before Tax
|
|
Tax
|
|
Net of Tax
|
||||||||||||
As reported (GAAP)
|
$
|
63,869
|
|
|
$
|
5,245
|
|
|
$
|
58,624
|
|
|
$
|
2.34
|
|
|
$
|
0.19
|
|
|
$
|
2.15
|
|
Asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restructuring charges
|
1,165
|
|
|
68
|
|
|
1,097
|
|
|
0.04
|
|
|
—
|
|
|
0.04
|
|
||||||
Subtotal
|
65,034
|
|
|
5,313
|
|
|
59,721
|
|
|
2.39
|
|
|
0.19
|
|
|
2.19
|
|
||||||
Amortization of intangible assets
|
4,660
|
|
|
211
|
|
|
4,449
|
|
|
0.17
|
|
|
0.01
|
|
|
0.16
|
|
||||||
Non-cash share-based compensation
|
4,389
|
|
|
498
|
|
|
3,891
|
|
|
0.16
|
|
|
0.02
|
|
|
0.14
|
|
||||||
Adjusted (non-GAAP)
|
$
|
74,083
|
|
|
$
|
6,022
|
|
|
$
|
68,061
|
|
|
$
|
2.72
|
|
|
$
|
0.22
|
|
|
$
|
2.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares of common stock used in computing diluted EPS
|
|
27,267
|
|
|
Nine Months Ended November 30,
|
||||||||||||||
(in thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||
Fiscal 2018 sales revenue, net
|
$
|
342,050
|
|
|
$
|
483,592
|
|
|
$
|
265,639
|
|
|
$
|
1,091,281
|
|
Core business growth (decline)
|
55,414
|
|
|
41,658
|
|
|
(10,432
|
)
|
|
86,640
|
|
||||
Impact of foreign currency
|
274
|
|
|
1,827
|
|
|
(714
|
)
|
|
1,387
|
|
||||
Change in sales revenue, net
|
55,688
|
|
|
43,485
|
|
|
(11,146
|
)
|
|
88,027
|
|
||||
Fiscal 2019 sales revenue, net
|
$
|
397,738
|
|
|
$
|
527,077
|
|
|
$
|
254,493
|
|
|
$
|
1,179,308
|
|
|
|
|
|
|
|
|
|
||||||||
Total net sales revenue growth
|
16.3
|
%
|
|
9.0
|
%
|
|
(4.2
|
)%
|
|
8.1
|
%
|
||||
Core business growth (decline)
|
16.2
|
%
|
|
8.6
|
%
|
|
(3.9
|
)%
|
|
7.9
|
%
|
||||
Impact of foreign currency
|
0.1
|
%
|
|
0.4
|
%
|
|
(0.3
|
)%
|
|
0.1
|
%
|
|
Nine Months Ended November 30,
|
|||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Leadership Brand sales revenue, net
|
$
|
943,168
|
|
|
$
|
836,993
|
|
|
$
|
106,175
|
|
|
12.7
|
%
|
All other sales revenue, net
|
236,140
|
|
|
254,288
|
|
|
(18,148
|
)
|
|
(7.1
|
)%
|
|||
Total sales revenue, net
|
$
|
1,179,308
|
|
|
$
|
1,091,281
|
|
|
$
|
88,027
|
|
|
8.1
|
%
|
•
|
a core business increase of
$86.6 million
, or
7.9%
, primarily due to point of sale growth in the brick and mortar channel in our Housewares and Health & Home segments, incremental distribution, increased international sales, growth in online sales, and new product introductions; and
|
•
|
the favorable impact from net foreign currency fluctuations of approximately
$1.4 million
, or
0.1%
.
|
•
|
lower amortization expense;
|
•
|
the favorable comparative impact of a
$3.6 million
charge related to the bankruptcy of TRU in the same period last year;
|
•
|
the favorable impact of a higher mix of shipments made on a direct import basis; and
|
•
|
the impact that higher overall net sales had on operating leverage.
|
|
Nine Months Ended November 30, 2018
|
||||||||||||||||||||||||||
(In thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||||||||||||||
Operating income, as reported (GAAP)
|
$
|
80,351
|
|
|
20.2
|
%
|
|
$
|
52,501
|
|
|
10.0
|
%
|
|
$
|
22,431
|
|
|
8.8
|
%
|
|
$
|
155,283
|
|
|
13.2
|
%
|
Restructuring charges
|
740
|
|
|
0.2
|
%
|
|
358
|
|
|
0.1
|
%
|
|
1,511
|
|
|
0.6
|
%
|
|
2,609
|
|
|
0.2
|
%
|
||||
Subtotal
|
81,091
|
|
|
20.4
|
%
|
|
52,859
|
|
|
10.0
|
%
|
|
23,942
|
|
|
9.4
|
%
|
|
157,892
|
|
|
13.4
|
%
|
||||
Amortization of intangible assets
|
1,474
|
|
|
0.4
|
%
|
|
8,129
|
|
|
1.5
|
%
|
|
1,219
|
|
|
0.5
|
%
|
|
10,822
|
|
|
0.9
|
%
|
||||
Non-cash share-based compensation
|
6,273
|
|
|
1.6
|
%
|
|
7,030
|
|
|
1.3
|
%
|
|
3,726
|
|
|
1.5
|
%
|
|
17,029
|
|
|
1.4
|
%
|
||||
Adjusted operating income (non-GAAP)
|
$
|
88,838
|
|
|
22.3
|
%
|
|
$
|
68,018
|
|
|
12.9
|
%
|
|
$
|
28,887
|
|
|
11.4
|
%
|
|
$
|
185,743
|
|
|
15.8
|
%
|
|
Nine Months Ended November 30, 2017
|
||||||||||||||||||||||||||
(In thousands)
|
Housewares
|
|
Health & Home
|
|
Beauty
|
|
Total
|
||||||||||||||||||||
Operating income, as reported (GAAP)
|
$
|
71,085
|
|
|
20.8
|
%
|
|
$
|
49,243
|
|
|
10.2
|
%
|
|
$
|
17,302
|
|
|
6.5
|
%
|
|
$
|
137,630
|
|
|
12.6
|
%
|
Asset impairment charges
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
4,000
|
|
|
1.5
|
%
|
|
4,000
|
|
|
0.4
|
%
|
||||
TRU bankruptcy charge
|
956
|
|
|
0.3
|
%
|
|
2,640
|
|
|
0.5
|
%
|
|
—
|
|
|
—
|
%
|
|
3,596
|
|
|
0.3
|
%
|
||||
Restructuring charges
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1,165
|
|
|
0.4
|
%
|
|
1,165
|
|
|
0.1
|
%
|
||||
Subtotal
|
72,041
|
|
|
21.1
|
%
|
|
51,883
|
|
|
10.7
|
%
|
|
22,467
|
|
|
8.5
|
%
|
|
146,391
|
|
|
13.4
|
%
|
||||
Amortization of intangible assets
|
1,618
|
|
|
0.5
|
%
|
|
8,373
|
|
|
1.7
|
%
|
|
4,207
|
|
|
1.6
|
%
|
|
14,198
|
|
|
1.3
|
%
|
||||
Non-cash share-based compensation
|
3,380
|
|
|
1.0
|
%
|
|
3,971
|
|
|
0.8
|
%
|
|
3,268
|
|
|
1.2
|
%
|
|
10,619
|
|
|
1.0
|
%
|
||||
Adjusted operating income (non-GAAP)
|
$
|
77,039
|
|
|
22.5
|
%
|
|
$
|
64,227
|
|
|
13.3
|
%
|
|
$
|
29,942
|
|
|
11.3
|
%
|
|
$
|
171,208
|
|
|
15.7
|
%
|
•
|
a higher mix of Leadership Brand sales at a higher operating margin;
|
•
|
lower amortization expense; and
|
•
|
the favorable impact of increased operating leverage from net sales growth.
|
•
|
higher advertising expense;
|
•
|
higher freight expense;
|
•
|
higher annual incentive compensation related to current year performance;
|
•
|
higher rent expense related to new office space; and
|
•
|
the impact of restructuring charges of $0.7 million.
|
•
|
the favorable comparative impact of a $1.0 million charge related to the bankruptcy of TRU in the same period last year; and
|
•
|
the favorable impact of increased operating leverage from net sales growth.
|
•
|
the margin impact of a less favorable product mix;
|
•
|
the impact of tariff increases;
|
•
|
increased promotional spending and trade support with retail customers;
|
•
|
higher advertising expense; and
|
•
|
the impact of restructuring charges of $0.4 million.
|
•
|
the favorable comparative impact of a $2.6 million charge related to the bankruptcy of TRU in the same period last year; and
|
•
|
the favorable impact of foreign currency exchange and forward contract settlements.
|
•
|
cost savings from Project Refuel; and
|
•
|
lower amortization expense.
|
•
|
the margin impact of less favorable product sales mix;
|
•
|
higher freight expense;
|
•
|
higher share-based compensation expense related to long-term incentive plans; and
|
•
|
the unfavorable impact of decreased operating leverage from the decline in net sales.
|
|
Nine Months Ended November 30, 2018
|
||||||||||||||||||||||
|
Income From Continuing Operations
|
|
Diluted EPS
|
||||||||||||||||||||
(in thousands, except per share data)
|
Before Tax
|
|
Tax
|
|
Net of Tax
|
|
Before Tax
|
|
Tax
|
|
Net of Tax
|
||||||||||||
As reported (GAAP)
|
$
|
147,045
|
|
|
$
|
10,535
|
|
|
$
|
136,510
|
|
|
$
|
5.54
|
|
|
$
|
0.40
|
|
|
$
|
5.15
|
|
Restructuring charges
|
2,609
|
|
|
185
|
|
|
2,424
|
|
|
0.10
|
|
|
0.01
|
|
|
0.09
|
|
||||||
Subtotal
|
149,654
|
|
|
10,720
|
|
|
138,934
|
|
|
5.64
|
|
|
0.40
|
|
|
5.24
|
|
||||||
Amortization of intangible assets
|
10,822
|
|
|
236
|
|
|
10,586
|
|
|
0.41
|
|
|
0.01
|
|
|
0.40
|
|
||||||
Non-cash share-based compensation
|
17,029
|
|
|
1,021
|
|
|
16,008
|
|
|
0.64
|
|
|
0.04
|
|
|
0.60
|
|
||||||
Adjusted (non-GAAP)
|
$
|
177,505
|
|
|
$
|
11,977
|
|
|
$
|
165,528
|
|
|
$
|
6.69
|
|
|
$
|
0.45
|
|
|
$
|
6.24
|
|
|
|||||||||||||||||||||||
Weighted average shares of common stock used in computing diluted EPS
|
26,520
|
|
|||||||||||||||||||||
|
|
Nine Months Ended November 30, 2017
|
||||||||||||||||||||||
|
Income From Continuing Operations
|
|
Diluted EPS
|
||||||||||||||||||||
(in thousands, except per share data)
|
Before Tax
|
|
Tax
|
|
Net of Tax
|
|
Before Tax
|
|
Tax
|
|
Net of Tax
|
||||||||||||
As reported (GAAP)
|
$
|
126,927
|
|
|
$
|
6,423
|
|
|
$
|
120,504
|
|
|
$
|
4.65
|
|
|
$
|
0.24
|
|
|
$
|
4.41
|
|
Asset impairment charges
|
4,000
|
|
|
418
|
|
|
3,582
|
|
|
0.15
|
|
|
0.02
|
|
|
0.13
|
|
||||||
TRU bankruptcy charge
|
3,596
|
|
|
204
|
|
|
3,392
|
|
|
0.13
|
|
|
0.01
|
|
|
0.12
|
|
||||||
Restructuring charges
|
1,165
|
|
|
68
|
|
|
1,097
|
|
|
0.04
|
|
|
—
|
|
|
0.04
|
|
||||||
Subtotal
|
135,688
|
|
|
7,113
|
|
|
128,575
|
|
|
4.97
|
|
|
0.26
|
|
|
4.71
|
|
||||||
Amortization of intangible assets
|
14,198
|
|
|
658
|
|
|
13,540
|
|
|
0.52
|
|
|
0.02
|
|
|
0.50
|
|
||||||
Non-cash share-based compensation
|
10,619
|
|
|
1,178
|
|
|
9,441
|
|
|
0.39
|
|
|
0.04
|
|
|
0.35
|
|
||||||
Adjusted (non-GAAP)
|
$
|
160,505
|
|
|
$
|
8,949
|
|
|
$
|
151,556
|
|
|
$
|
5.88
|
|
|
$
|
0.33
|
|
|
$
|
5.55
|
|
|
|||||||||||||||||||||||
Weighted average shares of common stock used in computing diluted EPS
|
27,304
|
|
|||||||||||||||||||||
|
|
Nine Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
Accounts Receivable Turnover (Days) (1)
|
69.4
|
|
|
65.4
|
|
||
Inventory Turnover (Times) (1)
|
3.4
|
|
|
2.8
|
|
||
Working Capital
(
in thousands
)
|
$
|
338,008
|
|
|
$
|
263,537
|
|
Current Ratio
|
2.0:1
|
|
|
1.7:1
|
|
||
Ending Debt to Ending Equity Ratio
|
32.9
|
%
|
|
43.3
|
%
|
||
Return on Average Equity (1)
|
14.1
|
%
|
|
15.3
|
%
|
(1)
|
Accounts receivable turnover, inventory turnover and return on average equity computations use 12 month trailing net sales revenue, cost of goods sold or net income components as required by the particular measure. The current and four prior quarters' ending balances of accounts receivable, inventory and equity are used for the purposes of computing the average balance component as required by the particular measure.
|
•
|
we had draws of
$462.4 million
against our credit agreement;
|
•
|
we repaid
$411.4 million
drawn against our credit agreement;
|
•
|
we repaid
$1.9 million
of our long-term debt;
|
•
|
we received
$7.8 million
of cash from employees exercising stock options and participating in our employee stock purchase plan;
|
•
|
we paid
$4.7 million
in tax obligations resulting from cashless share award settlements; and
|
•
|
we repurchased
$137.1 million
of our common stock in the open market.
|
Applicable Financial Covenant
|
Credit Agreement and MBFC Loan
|
Interest Coverage Ratio
|
EBIT (1)
+ Interest Expense (1)
|
Minimum Required: 3.00 to 1.00
|
|
|
Total Current and Long Term Debt (2) +
|
Maximum Leverage Ratio
|
EBITDA (1) + Pro Forma Effect of Acquisitions
|
|
Maximum Currently Allowed: 3.50 to 1.00 (3)
|
(1)
|
Computed using totals for the latest reported four consecutive fiscal quarters.
|
(2)
|
Computed using the ending balances as of the latest reported fiscal quarter.
|
(3)
|
In the event a qualified acquisition is consummated, the maximum leverage ratio is 4.25 to 1.00.
|
•
|
our ability to deliver products to our customers in a timely manner and according to their fulfillment standards;
|
•
|
the costs of complying with the business demands and requirements of large sophisticated customers;
|
•
|
our relationships with key customers and licensors;
|
•
|
our dependence on the strength of retail economies and vulnerabilities to any prolonged economic downturn;
|
•
|
our dependence on sales to several large customers and the risks associated with any loss or substantial decline in sales to top customers;
|
•
|
expectations regarding Project Refuel and any other proposed restructurings;
|
•
|
expectations regarding recent and future acquisitions or divestitures, including our ability to realize anticipated cost savings, synergies and other benefits along with our ability to effectively integrate acquired businesses or separate divested businesses;
|
•
|
circumstances which may contribute to future impairment of goodwill, intangible or other long-lived assets;
|
•
|
the retention and recruitment of key personnel;
|
•
|
foreign currency exchange rate fluctuations;
|
•
|
disruptions in U.S., U.K., Eurozone, and other international credit markets;
|
•
|
risks associated with weather conditions, the duration and severity of the cold and flu season and other related factors;
|
•
|
our dependence on foreign sources of supply and foreign manufacturing, and associated operational risks including, but not limited to, long lead times, consistent local labor availability and capacity, and timely availability of sufficient shipping carrier capacity;
|
•
|
the impact of changing costs of raw materials, labor and energy on cost of goods sold and certain operating expenses;
|
•
|
the geographic concentration and peak season capacity of certain U.S. distribution facilities increases our exposure to significant shipping disruptions and added shipping and storage costs;
|
•
|
our projections of product demand, sales and net income are highly subjective in nature and future sales and net income could vary in a material amount from such projections;
|
•
|
the risks associated with the use of trademarks licensed from and to third parties;
|
•
|
our ability to develop and introduce a continuing stream of new products to meet changing consumer preferences;
|
•
|
trade barriers, exchange controls, expropriations, and other risks associated with U.S. and foreign operations;
|
•
|
the risks associated with significant tariffs or other restrictions on imports from China or any retaliatory trade measures taken by China;
|
•
|
the risks to our liquidity as a result of changes to capital market conditions and other constraints or events that impose constraints on our cash resources and ability to operate our business;
|
•
|
the costs, complexity and challenges of upgrading and managing our global information systems;
|
•
|
the risks associated with information security breaches;
|
•
|
the risks associated with product recalls, product liability, other claims, and related litigation against us;
|
•
|
the risks associated with accounting for tax positions, tax audits and related disputes with taxing authorities;
|
•
|
the risks of potential changes in laws in the U.S. or abroad, including tax laws, regulations or treaties, employment and health insurance laws and regulations, 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; and
|
•
|
our ability to continue to avoid classification as a controlled foreign corporation.
|
Period
|
Total Number of
Shares Purchased (1)
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Dollar Value of
Shares that May
Yet be Purchased
Under the Plans
or Programs
(in thousands) (2)
|
||||||
September 1 to September 30, 2018
|
708
|
|
|
$
|
123.76
|
|
|
708
|
|
|
$
|
285,694
|
|
October 1 to October 31, 2018
|
705,716
|
|
|
122.22
|
|
|
705,716
|
|
|
199,442
|
|
||
November 1 to November 30, 2018
|
108,670
|
|
|
127.31
|
|
|
108,670
|
|
|
185,606
|
|
||
Total
|
815,094
|
|
|
$
|
122.90
|
|
|
815,094
|
|
|
|
|
(1)
|
The number of shares above includes shares of common stock acquired from employees who tendered shares to: i) satisfy the tax withholding on equity awards as part of our long-term incentive plans or ii) satisfy the exercise price on stock option exercises. For the three months ended
November 30, 2018
, 1,398 shares were acquired at a weighted average per share price of $125.03.
|
(2)
|
Reflects the remaining dollar value of shares that may yet be purchased under our Stock Repurchase Plan through the end of
November 30, 2018
as authorized by the Company's Board of Directors in May 2017. For additional information, see Note 8 to the accompanying condensed consolidated financial statements.
|
|
|
HELEN OF TROY LIMITED
|
|
|
(Registrant)
|
|
|
|
Date:
|
January 9, 2019
|
/s/ Julien R. Mininberg
|
|
|
Julien R. Mininberg
|
|
|
Chief Executive Officer,
Director and Principal Executive Officer
|
|
|
|
Date:
|
January 9, 2019
|
/s/ Brian L. Grass
|
|
|
Brian L. Grass
|
|
|
Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended November 30, 2018 of Helen of Troy Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Julien R. Mininberg
|
Julien R. Mininberg
|
Chief Executive Officer,
|
Director and Principal Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended November 30, 2018 of Helen of Troy Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Brian L. Grass
|
Brian L. Grass
|
Chief Financial Officer, Principal Financial
|
Officer and Principal Accounting Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Julien R. Mininberg
|
Julien R. Mininberg
|
Chief Executive Officer,
|
Director and Principal Executive Officer
|
|
/s/ Brian L. Grass
|
Brian L. Grass
|
Chief Financial Officer, Principal Financial Officer
|
and Principal Accounting Officer
|