Helen of Troy Ltd (NASDAQ:HELE) Q3 2020 Earnings Conference Call January 8, 2019 4:45 PM ET Company Participants Jack Jancin - SVP, Corporate Business Development Julien Mininberg - CEO & Director Brian Grass - CFO & Principal Accounting Officer Conference Call Participants Olivia Tong - Bank of America Merrill Lynch Linda Bolton-Weiser - D.A. Davidson & Co. Steven Marotta - CL King & Associates Operator Greetings, and welcome to the Helen of Troy Limited Third Quarter 2020 Earnings Conference Call. [Operat ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ..... to ….. Commission file number: 001-14669 HELEN OF TROY LIMITED (Exact name of registrant as specified in its charter) Bermuda 74-2692 ...

Financial Data and Key Metrics Changes - The company reported consolidated sales revenue of $414 million, a 5.2% increase over the prior year, driven by a core business increase of 5.7% [39][50] - Adjusted diluted EPS increased by 13.1% to $2.24 per share, compared to $1.98 per share in the same period last year [50][49] - Consolidated gross profit margin improved to 43% from 39.4%, primarily due to a higher mix of Housewares revenue and tariff exclusion refunds [43][50] Business Line Data and Key Metrics Changes - Housewares segment net sales increased by over 22%, benefiting from strong demand for OXO and Hydro Flask brands [19][40] - Health & Home segment experienced a 9.1% decline in core business net sales, attributed to tough comparisons from the previous year and lower seasonal demand [22][41] - Beauty segment core business net sales grew by 9.3%, driven by growth in the appliance category, particularly online and internationally [24][42] Market Data and Key Metrics Changes - Online sales represented approximately 24% of total sales in the quarter, with a year-over-year increase of about 25% [13][39] - The company noted strong international sales growth, particularly in the EMEA and Asia Pacific regions [16][19] Company Strategy and Development Direction - The company is focused on executing Phase II of its Transformation Plan, which includes eight core strategic priorities aimed at international growth and shared service excellence [16][28] - New senior leadership roles have been created to support international expansion and IT improvements, indicating a commitment to enhancing operational capabilities [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges such as tariffs, currency volatility, and rising logistics costs while maintaining a strong balance sheet [27][28] - The outlook for fiscal 2020 has been raised, with consolidated net sales expected to be in the range of $1.61 billion to $1.64 billion, reflecting a growth of 2.9% to 4.8% [55][57] Other Important Information - The company plans to reinvest the majority of tariff exclusion refunds into its brands and retail partners, indicating a strategy focused on long-term growth rather than short-term gains [64][79] - The effective tax rate for the quarter was 10.3%, an increase from 8.3% in the previous year, primarily due to shifts in taxable income [49] Q&A Session Summary Question: Can you provide more information on the tariff exclusion refund? - Management indicated that the refunds are based on successful exclusion applications and are expected to be reinvested for brand benefits, making the impact on the bottom line minimal [63][64] Question: How much of the growth is attributed to price versus volume? - Management acknowledged a price impact, particularly in the Health & Home segment, but emphasized that demand impact is difficult to quantify [66][67] Question: What drove the revenue expectation increase in Housewares? - The increase was attributed to successful distribution wins, particularly with Hydro Flask, and strong direct-to-consumer sales [69][70] Question: Can you elaborate on the Health & Home segment's performance? - Management noted that the segment faced tough comparisons and distribution changes but expects a return to growth in the second half of the fiscal year due to new products and international expansion [92][96] Question: Is there any demand impact observed in discretionary product lines? - Management indicated that while there are alternatives, the strong brand reputation and product differentiation have maintained demand levels [99][100]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ..... to ….. Commission file number: 001-14669 HELEN OF TROY LIMITED (Exact name of registrant as specified in its charter) (State or other jurisdiction ...

Helen of Troy Limited (NASDAQ:HELE) Q1 2020 Earnings Conference Call July 9, 2019 4:45 PM ET Company Participants Jack Jancin - SVP, Corporate Business Development Julien Mininberg - CEO Brian Grass - CFO Conference Call Participants Frank Camma - Sidoti Olivia Tong - Bank of America Linda Bolton Weiser - D.A. Davidson Operator Good day and welcome to the Helen of Troy Limited First Quarter 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ja ...

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Helen of Troy is a global consumer products company with three core segments, executing a multi-phase transformation strategy focused on its Leadership Brands - Helen of Troy operates in three continuing business segments: Housewares, Health & Home, and Beauty[15](index=15&type=chunk) - Fiscal 2019 marked the completion of Phase I of a multi-year transformation strategy, which improved core sales growth, facilitated strategic acquisitions, enhanced operating efficiency, and returned capital to shareholders[18](index=18&type=chunk) - Phase II of the transformation strategy, starting in fiscal 2020, aims for improved organic sales growth, continued margin expansion, and strategic capital deployment[19](index=19&type=chunk)[21](index=21&type=chunk) - The company is exploring the divestiture of its Personal Care business to focus resources on Leadership Brands such as OXO, Honeywell, Braun, PUR, Hydro Flask, Vicks, and Hot Tools[22](index=22&type=chunk) - Sales within the United States comprised approximately **78% of total net sales revenue** in fiscal 2019[28](index=28&type=chunk) - Finished goods manufactured by vendors in the Far East comprised approximately **74% of total finished goods purchased** in fiscal 2019[30](index=30&type=chunk) Consolidated Net Sales Revenue by Key Customer (Fiscal Years 2017-2019) | Customer | Fiscal 2019 | Fiscal 2018 | Fiscal 2017 | | :--- | :--- | :--- | :--- | | Walmart, Inc | 16% | 17% | 17% | | Amazon.com Inc | 16% | 13% | 10% | | Target Corporation | 10% | 10% | 10% | | Top Five Customers (Aggregate) | 51% | 49% | 48% | Seasonality as a Percentage of Annual Net Sales Revenue (Fiscal Years 2017-2019) | Fiscal Quarter Ended | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | May | 22.7% | 22.0% | 22.2% | | August | 25.2% | 23.3% | 23.8% | | November | 27.6% | 28.5% | 29.3% | | February | 24.6% | 26.2% | 24.7% | [Item 1A. Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from customer concentration, potential asset impairment, currency fluctuations, and reliance on third-party manufacturing in the Far East - The company is increasingly dependent on key customers, with its two largest customers accounting for approximately **32% of consolidated net sales revenue** in fiscal 2019, and the top five customers accounting for approximately **51%**[46](index=46&type=chunk)[50](index=50&type=chunk) - A significant portion of long-term assets consists of goodwill and other indefinite-lived intangible assets, which are reviewed annually for impairment and could result in significant charges[53](index=53&type=chunk)[54](index=54&type=chunk) - Operations are exposed to foreign currency exchange rate fluctuations, particularly from non-U.S. operations and purchases from Chinese manufacturers[56](index=56&type=chunk)[57](index=57&type=chunk) - The company is dependent on third-party manufacturers, primarily in China (**74% of finished goods purchased in fiscal 2019**), exposing it to various international trade and political risks[60](index=60&type=chunk)[64](index=64&type=chunk) - Most U.S. distribution functions are consolidated into two facilities in Mississippi, which handled approximately **60% of consolidated gross sales volume** in fiscal 2019, increasing disruption risk[65](index=65&type=chunk) - New global privacy laws like GDPR and CCPA create new compliance obligations and expand potential liability, which could materially impact financial condition[77](index=77&type=chunk)[78](index=78&type=chunk) - New economic substance legislation in Bermuda and Barbados, enacted in response to EU reviews, has an unclear impact on the company's operations[86](index=86&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) [Item 1B. Unresolved Staff Comments](index=20&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - No unresolved staff comments[90](index=90&type=chunk) [Item 2. Properties](index=20&type=section&id=Item%202.%20Properties) The company owns or leases 38 properties globally, totaling approximately 4.2 million square feet, including key distribution centers in Mississippi - As of February 28, 2019, the company owns, leases, or utilizes **38 properties worldwide**, totaling approximately **4.2 million square feet**[91](index=91&type=chunk) Owned Properties by Location, Type, Use, and Size (as of February 28, 2019) | Location | Type and Use | Business Segment | Approximate Size (Square Feet) | | :--- | :--- | :--- | :--- | | El Paso, Texas, USA | Land & Building - U.S. Headquarters | All Segments | 135,000 | | El Paso, Texas, USA | Land & Building - Distribution Facility | Housewares, Health & Home and Beauty | 408,000 | | Olive Branch, Mississippi, USA | Land & Building - Distribution Facility | Health & Home and Beauty | 1,300,000 | | Southaven, Mississippi, USA | Land & Building - Distribution Facility | Housewares and Beauty | 1,200,000 | | Sheffield, England | Land & Building - Office Space | Housewares, Health & Home and Beauty | 10,400 | | Mexico City, Mexico | Land & Building - Office Space | Health & Home and Beauty | 3,900 | - The company leases or otherwise utilizes 32 properties, comprising approximately **1.5 million square feet** of office and distribution space[93](index=93&type=chunk) [Item 3. Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings that are not expected to have a material adverse effect on its financial position or results - The company is involved in various legal claims and proceedings in the normal course of operations, which management believes will not have a material adverse effect[94](index=94&type=chunk) [Item 4. Mine Safety Disclosures](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[95](index=95&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock (HELE) is on NASDAQ; earnings are retained for growth, and a $400 million share repurchase program is active - The company's common stock is listed on the NASDAQ Global Select Market under the symbol: **HELE**[98](index=98&type=chunk) - As of April 22, 2019, there were **144 holders of record** of the company's common stock[99](index=99&type=chunk) - The company's policy is to retain earnings for operations and has not paid any cash dividends since inception[100](index=100&type=chunk) - A **$400 million** common stock repurchase authorization is effective until May 2020, with **$110.5 million** remaining available as of February 28, 2019[101](index=101&type=chunk) Common Stock Repurchase Activity (Fiscal Years 2017-2019) | Category | Fiscal 2019 | Fiscal 2018 | Fiscal 2017 | | :--- | :--- | :--- | :--- | | **Common stock repurchased on the open market:** | | | | | Number of shares | 1,875,469 | 717,300 | 922,731 | | Aggregate value of shares | $212,080 | $65,795 | $75,000 | | Average price per share | $113.08 | $91.73 | $81.28 | | **Common stock received in connection with share-based compensation:** | | | | | Number of shares | 59,024 | 75,785 | 6,286 | | Aggregate value of shares | $5,413 | $7,258 | $595 | | Average price per share | $91.70 | $95.77 | $94.61 | [Item 6. Selected Financial Data](index=25&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents a five-year summary of selected financial data from continuing operations, excluding the divested Nutritional Supplements segment - Selected financial data is derived from audited financial statements for fiscal years 2017-2019[109](index=109&type=chunk) - The operating results of the Nutritional Supplements segment, divested in December 2017, are presented as discontinued operations for all applicable periods[109](index=109&type=chunk) Selected Consolidated Income Statement Data (Fiscal Years 2015-2019) | (in thousands, except per share data) | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue, net | $1,564,151 | $1,478,845 | $1,397,535 | $1,383,393 | $1,334,970 | | Gross profit | $641,106 | $611,199 | $573,416 | $516,551 | $516,906 | | Operating income | $199,379 | $169,062 | $169,664 | $116,294 | $152,215 | | Income from continuing operations | $174,224 | $128,882 | $144,310 | $92,991 | $126,322 | | Net income | $168,545 | $44,446 | $140,689 | $101,228 | $131,164 | | Diluted EPS - Continuing operations | $6.62 | $4.73 | $5.17 | $3.23 | $4.35 | | Diluted EPS - Net income | $6.41 | $1.63 | $5.04 | $3.52 | $4.52 | Selected Consolidated Cash Flow Data from Continuing Operations (Fiscal Years 2015-2019) | (in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $200,568 | $218,609 | $212,491 | $170,263 | $171,742 | | Capital and intangible asset expenditures | $26,385 | $13,605 | $15,507 | $16,676 | $5,908 | | Payments to acquire businesses, net of cash acquired | — | — | $209,267 | $43,150 | $195,943 | Selected Consolidated Balance Sheet Data from Continuing Operations (Fiscal Years 2015-2019) | (in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Working capital | $292,828 | $258,222 | $267,896 | $487,861 | $308,895 | | Total assets | $1,649,535 | $1,623,717 | $1,616,235 | $1,639,673 | $1,444,163 | | Long-term debt | $318,900 | $287,985 | $461,211 | $600,107 | $411,307 | | Stockholders' equity | $996,637 | $1,014,459 | $1,020,766 | $930,043 | $904,565 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial results, highlighting the transformation strategy, key business trends, segment performance, and liquidity - Fiscal 2019 marked the completion of Phase I of the multi-year transformation strategy, which improved core sales growth and operating efficiency[120](index=120&type=chunk) - Phase II of the transformation strategy, starting in fiscal 2020, aims for improved organic sales growth and continued margin expansion[121](index=121&type=chunk) - Project Refuel, a restructuring plan, is expected to be completed in fiscal 2020, targeting **$8.0 million to $10.0 million** in annualized profit improvements[122](index=122&type=chunk) - USTR tariffs on Chinese imports unfavorably impacted cost of sales by approximately **$4.0 million** in fiscal 2019[123](index=123&type=chunk)[124](index=124&type=chunk) - Online sales comprised approximately **19% of total consolidated net sales revenue** in fiscal 2019, growing over **28% year-over-year**[130](index=130&type=chunk) Consolidated Operating Results Summary (Fiscal Years 2017-2019) | Metric (in thousands) | 2019 | % of Sales | 2018 | % of Sales | 2017 | % of Sales | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue, net | $1,564,151 | 100.0% | $1,478,845 | 100.0% | $1,397,535 | 100.0% | | Gross profit | $641,106 | 41.0% | $611,199 | 41.3% | $573,416 | 41.0% | | SG&A | $438,141 | 28.0% | $424,833 | 28.7% | $400,852 | 28.7% | | Operating income | $199,379 | 12.7% | $169,062 | 11.4% | $169,664 | 12.1% | | Income from continuing operations | $174,224 | 11.1% | $128,882 | 8.7% | $144,310 | 10.3% | | Net income | $168,545 | 10.8% | $44,446 | 3.0% | $140,689 | 10.1% | Consolidated Net Sales Revenue Growth (Fiscal Years 2018-2019) | Metric | FY2019 vs FY2018 | FY2018 vs FY2017 | | :--- | :--- | :--- | | Total net sales revenue growth | 5.8% | 5.8% | | Core business growth | 5.9% | 5.0% | | Impact of foreign currency | (0.1)% | 0.4% | | Acquisitions growth | —% | 0.4% | Leadership Brand and Other Net Sales (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | $ Change 19/18 | $ Change 18/17 | % Change 19/18 | % Change 18/17 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Leadership Brand sales revenue, net | $1,243,600 | $1,142,183 | $1,044,208 | $101,417 | $97,975 | 8.9% | 9.4% | | All other sales revenue, net | $320,551 | $336,662 | $353,327 | $(16,111) | $(16,665) | (4.8)% | (4.7)% | | Total sales revenue, net | $1,564,151 | $1,478,845 | $1,397,535 | $85,306 | $81,310 | 5.8% | 5.8% | Consolidated and Adjusted Operating Income and Margin (Fiscal Years 2017-2019) | Metric (in thousands) | 2019 | Margin | 2018 | Margin | 2017 | Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Operating income (GAAP) | $199,379 | 12.7% | $169,062 | 11.4% | $169,664 | 12.1% | | Adjusted operating income (non-GAAP) | $239,222 | 15.3% | $223,870 | 15.1% | $209,917 | 15.0% | Income from Continuing Operations and Diluted EPS (Fiscal Years 2017-2019) | Metric (in thousands, except per share data) | 2019 | Diluted EPS | 2018 | Diluted EPS | 2017 | Diluted EPS | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Income from continuing operations (GAAP) | $174,224 | $6.62 | $128,882 | $4.73 | $144,310 | $5.17 | | Adjusted income from continuing operations (non-GAAP) | $212,085 | $8.06 | $197,224 | $7.24 | $180,905 | $6.49 | Selected Liquidity and Capital Utilization Measures (Fiscal Years 2018-2019) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Accounts Receivable Turnover (Days) | 68.3 | 62.7 | | Inventory Turnover (Times) | 3.3 | 3.0 | | Working Capital (in thousands) | $292,828 | $258,222 | | Current Ratio | 1.9:1 | 1.9:1 | | Ending Debt to Ending Equity Ratio | 32.2% | 28.6% | | Return on Average Equity | 16.9% | 12.7% | Net Cash Provided by Operating Activities (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Continuing operations | $200,568 | $218,609 | $212,491 | | Discontinued operations | $(5,265) | $5,598 | $16,010 | | Total | $195,303 | $224,207 | $228,501 | Contractual Obligations and Commercial Commitments (as of February 28, 2019) | (in thousands) | Total | < 1 year | 1-2 years | 2-3 years | 3-4 years | 4-5 years | > 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Floating rate debt | $323,607 | $1,900 | $1,900 | $303,100 | $1,900 | $14,807 | — | | Long-term incentive plan payouts | $12,708 | $7,012 | $3,481 | $2,215 | — | — | — | | Interest on floating rate debt | $32,237 | $11,453 | $11,387 | $8,879 | $518 | — | — | | Open purchase orders | $234,659 | $234,659 | — | — | — | — | — | | Minimum royalty payments | $49,159 | $12,650 | $12,855 | $13,040 | $7,914 | $2,700 | — | | Advertising and promotional | $37,401 | $18,933 | $6,411 | $6,527 | $5,530 | — | — | | Operating leases | $69,482 | $5,171 | $6,678 | $6,411 | $5,743 | $5,078 | $40,401 | | Capital spending commitments | $4,602 | $4,602 | — | — | — | — | — | | **Total contractual obligations** | **$763,855** | **$296,380** | **$42,712** | **$340,172** | **$21,605** | **$22,585** | **$40,401** | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency exchange rates and interest rates, which are managed through hedging instruments - The company's primary financial market risks are changes in currency exchange rates and interest rates[231](index=231&type=chunk) - Foreign currency risk arises from transactions denominated in foreign currencies (approximately **13% of net sales revenue** in fiscal 2019) and purchases from Chinese manufacturers[232](index=232&type=chunk)[236](index=236&type=chunk) - The company uses forward contracts and zero-cost collars as cash flow hedges and mark-to-market derivatives to mitigate foreign currency exchange rate risk[235](index=235&type=chunk) - A hypothetical adverse 10% change in foreign currency rates would reduce the carrying and fair values of hedging instruments by **$8.2 million** on a pre-tax basis in fiscal 2019[235](index=235&type=chunk) - Interest on outstanding debt is floating, and interest rate swaps are used to hedge **$225.0 million** of the outstanding floating rate debt[238](index=238&type=chunk) - A hypothetical adverse 10% change in interest rates would reduce the carrying and fair values of interest rate swaps by **$2.1 million** on a pre-tax basis in fiscal 2019[238](index=238&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=56&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the audited consolidated financial statements, management's report on internal controls, and the independent auditor's reports - Management concluded that the company's internal control over financial reporting was **effective** as of February 28, 2019, based on the COSO framework[245](index=245&type=chunk) - Grant Thornton LLP issued an **unqualified opinion** on the effectiveness of internal control over financial reporting and the consolidated financial statements for the year ended February 28, 2019[248](index=248&type=chunk)[249](index=249&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) Consolidated Balance Sheets (as of February 28, 2019 and 2018) | (in thousands) | Feb 28, 2019 | Feb 28, 2018 | | :--- | :--- | :--- | | **Assets, current:** | | | | Cash and cash equivalents | $11,871 | $20,738 | | Receivables - principally trade | $280,280 | $275,565 | | Inventory | $302,339 | $251,511 | | Total assets, current | $604,859 | $557,708 | | Property and equipment, net | $130,338 | $123,503 | | Goodwill | $602,320 | $602,320 | | Other intangible assets, net | $291,526 | $302,915 | | Total assets | $1,649,535 | $1,623,717 | | **Liabilities, current:** | | | | Accounts payable, principally trade | $143,560 | $129,341 | | Accrued expenses and other current liabilities | $165,160 | $168,261 | | Total liabilities, current | $312,031 | $299,486 | | Long-term debt, excluding current maturities | $318,900 | $287,985 | | Total liabilities | $652,898 | $609,258 | | **Stockholders' equity:** | | | | Total stockholders' equity | $996,637 | $1,014,459 | Consolidated Statements of Income (Fiscal Years 2017-2019) | (in thousands, except per share data) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Sales revenue, net | $1,564,151 | $1,478,845 | $1,397,535 | | Gross profit | $641,106 | $611,199 | $573,416 | | Operating income | $199,379 | $169,062 | $169,664 | | Income from continuing operations | $174,224 | $128,882 | $144,310 | | Loss from discontinued operations, net of tax | $(5,679) | $(84,436) | $(3,621) | | Net income | $168,545 | $44,446 | $140,689 | | Diluted EPS - Continuing operations | $6.62 | $4.73 | $5.17 | | Diluted EPS - Total | $6.41 | $1.63 | $5.04 | Consolidated Statements of Cash Flows (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $195,303 | $224,207 | $228,501 | | Net cash provided (used) by investing activities | $(25,247) | $35,634 | $(229,854) | | Net cash used by financing activities | $(178,923) | $(262,190) | $(201,360) | | Net decrease in cash and cash equivalents | $(8,867) | $(2,349) | $(202,713) | | Cash and cash equivalents, ending balance | $11,871 | $20,738 | $23,087 | [Note 1 – Summary of Significant Accounting Policies and Related Information](index=66&type=section&id=Note%201%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies%20and%20Related%20Information) This note details the company's significant accounting policies, including revenue recognition, inventory valuation, and goodwill impairment testing - The company operates in three segments, and its business is seasonal, with the highest sales typically in the third fiscal quarter[271](index=271&type=chunk)[273](index=273&type=chunk) - The U.S. Dollar is the functional currency for the company and all its subsidiaries, with foreign exchange gains and losses recognized in SG&A[280](index=280&type=chunk) - Inventory is stated at the lower of average costs or net realizable value[281](index=281&type=chunk)[282](index=282&type=chunk) - Net sales revenue subject to trademark license agreements requiring royalty payments comprised approximately **41% of consolidated net sales revenue** for fiscal 2019[286](index=286&type=chunk) - Goodwill and indefinite-lived intangible assets are not amortized but are evaluated for impairment annually[289](index=289&type=chunk)[291](index=291&type=chunk) - The company adopted ASU 2014-9 (Topic 606) in fiscal 2019, recognizing revenue when control of the product transfers to the customer[301](index=301&type=chunk) [Note 2 – New Accounting Pronouncements](index=73&type=section&id=Note%202%20%E2%80%93%20New%20Accounting%20Pronouncements) This note details new accounting pronouncements, highlighting the material balance sheet impact expected from the new lease accounting standard - ASU 2016-02, Leases (Topic 842), effective March 1, 2019, is expected to have a **material impact on the consolidated balance sheet** by recognizing lease liabilities and right-of-use assets[311](index=311&type=chunk) - ASU 2017-12, Derivatives and Hedging, effective March 1, 2019, is not expected to have a material impact[312](index=312&type=chunk) - ASU 2018-15 (Cloud Computing) and ASU 2018-13 (Fair Value Measurement) are effective March 1, 2020, and their impacts are currently being evaluated[313](index=313&type=chunk)[314](index=314&type=chunk) - Recently adopted pronouncements, including those related to revenue recognition and goodwill impairment, had no material impact on financial statements[316](index=316&type=chunk)[317](index=317&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk) [Note 3 – Revenue Recognition](index=74&type=section&id=Note%203%20%E2%80%93%20Revenue%20Recognition) The company adopted ASU 2014-09 (Topic 606) retrospectively, resulting in the reclassification of certain customer incentives from SG&A to net sales - The company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), in the first quarter of fiscal 2019 using the retrospective method[322](index=322&type=chunk) - The adoption led to the reclassification of certain customer incentives from SG&A to a reduction of net sales revenue[323](index=323&type=chunk) - Estimated sales returns were reclassified from a reduction of receivables to accrued expenses and other current liabilities[323](index=323&type=chunk) Impact of ASU 2014-9 Reclassification on Financial Statements (Fiscal Years 2017-2018) | (in thousands) | Before Reclassification (FY2018) | Reclassification (FY2018) | After Reclassification (FY2018) | | :--- | :--- | :--- | :--- | | Sales revenue, net | $1,489,747 | $(10,902) | $1,478,845 | | SG&A | $435,735 | $(10,902) | $424,833 | | | | | | | (in thousands) | Before Reclassification (FY2017) | Reclassification (FY2017) | After Reclassification (FY2017) | | :--- | :--- | :--- | :--- | | Sales revenue, net | $1,406,676 | $(9,141) | $1,397,535 | | SG&A | $409,993 | $(9,141) | $400,852 | [Note 4 – Discontinued Operations](index=75&type=section&id=Note%204%20%E2%80%93%20Discontinued%20Operations) The Nutritional Supplements segment was divested in December 2017, and its results, including significant prior-year impairment charges, are reported as discontinued operations - The Nutritional Supplements segment was divested on December 20, 2017, for **$46.0 million** in cash and a supplemental payment[326](index=326&type=chunk) - The estimated value of the supplemental payment was reduced in Q3 FY2019, resulting in a pre-tax charge of **$5.8 million** to discontinued operations[326](index=326&type=chunk) - Fiscal 2018 loss from discontinued operations included goodwill and trademark impairment charges totaling **$132.3 million** pre-tax[328](index=328&type=chunk) Results of Discontinued Operations (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Sales revenue, net | — | $99,013 | $130,543 | | Gross profit | — | $70,269 | $92,911 | | Operating loss | — | $(135,068) | $(5,331) | | Loss from discontinued operations | $(5,679) | $(84,436) | $(3,621) | [Note 5 – Property and Equipment](index=76&type=section&id=Note%205%20%E2%80%93%20Property%20and%20Equipment) Net property and equipment totaled $130.3 million as of February 28, 2019, with depreciation expense for the fiscal year at $15.7 million - Depreciation expense for fiscal 2019 was **$15.7 million**[329](index=329&type=chunk) - Rent expense related to operating leases was **$7.9 million** for fiscal 2019[330](index=330&type=chunk) Property and Equipment, Net (as of February 28, 2019 and 2018) | (in thousands) | Feb 28, 2019 | Feb 28, 2018 | | :--- | :--- | :--- | | Land | $12,644 | $12,800 | | Building and improvements | $113,820 | $106,870 | | Computer, furniture and other equipment | $84,711 | $79,657 | | Tools, molds and other production equipment | $36,378 | $33,466 | | Construction in progress | $6,529 | $5,912 | | Property and equipment, gross | $254,082 | $238,705 | | Less accumulated depreciation | $(123,744) | $(115,202) | | Property and equipment, net | $130,338 | $123,503 | [Note 6 – Accrued Expenses and Other Current Liabilities](index=76&type=section&id=Note%206%20%E2%80%93%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities totaled $165.2 million as of February 28, 2019, with key components including compensation and sales allowances Accrued Expenses and Other Current Liabilities (as of February 28, 2019 and 2018) | (in thousands) | Feb 28, 2019 | Feb 28, 2018 | | :--- | :--- | :--- | | Accrued compensation, benefits and payroll taxes | $36,782 | $37,666 | | Accrued sales discounts and allowances | $28,655 | $28,311 | | Accrued sales returns | $23,316 | $24,842 | | Accrued advertising | $26,549 | $25,324 | | Accrued legal fees and settlements | $2,604 | $17,243 | | Other | $47,254 | $34,875 | | Total accrued expenses and other current liabilities | $165,160 | $168,261 | [Note 7 – Hydro Flask Acquisition](index=76&type=section&id=Note%207%20%E2%80%93%20Hydro%20Flask%20Acquisition) The company acquired Hydro Flask in March 2016 for approximately $209.3 million, recording significant goodwill and intangible assets - On March 18, 2016, the company acquired Steel Technology, LLC (Hydro Flask) for approximately **$209.3 million**, net of cash acquired[332](index=332&type=chunk) Net Assets of Hydro Flask Recorded at Acquisition Date (March 18, 2016) | (in thousands) | Amount | | :--- | :--- | | Receivables | $7,955 | | Inventory | $6,243 | | Property and equipment | $1,108 | | Goodwill | $116,053 | | Trade names - indefinite | $59,000 | | Technology assets - definite | $10,300 | | Customer relationships - definite | $14,200 | | Total Assets | $215,195 | | Total Liabilities | $5,937 | | Net assets recorded | $209,258 | Hydro Flask Pro Forma Impact on Consolidated Statements of Income (Fiscal Years 2016-2017) | (in thousands, except earnings per share data) | 2017 | 2016 | | :--- | :--- | :--- | | Sales revenue, net | $1,410,171 | $1,450,530 | | Net income | $144,947 | $105,669 | | Earnings per share: Basic | $5.27 | $3.74 | | Earnings per share: Diluted | $5.20 | $3.68 | [Note 8 – Goodwill and Intangibles](index=79&type=section&id=Note%208%20%E2%80%93%20Goodwill%20and%20Intangibles) Goodwill and intangible assets are tested annually for impairment, with no charges in fiscal 2019 but charges recorded for Beauty segment trademarks in prior years - Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment annually[338](index=338&type=chunk)[340](index=340&type=chunk) - Impairment testing primarily uses estimated future discounted cash flow models, which involve significant management judgment[339](index=339&type=chunk)[340](index=340&type=chunk) - **No impairment charges** related to goodwill or intangible assets were recorded during fiscal 2019[342](index=342&type=chunk) - In fiscal 2018, non-cash asset impairment charges of **$15.4 million** were recorded for certain trademarks in the Beauty segment[342](index=342&type=chunk) - In fiscal 2017, non-cash impairment charges of **$2.9 million** were recorded for certain trademarks in the Beauty segment[344](index=344&type=chunk) Goodwill and Intangible Assets by Segment (as of February 28, 2019) | (in thousands) | Goodwill | Trademarks - indefinite | Other intangibles - finite | Total Net Book Value | | :--- | :--- | :--- | :--- | :--- | | Housewares | $282,056 | $134,200 | $22,019 | $438,275 | | Health & Home | $284,913 | $54,000 | $31,662 | $377,975 | | Beauty | $35,351 | $30,407 | $1,538 | $77,596 | | **Total** | **$602,320** | **$218,607** | **$55,219** | **$893,846** | Estimated Amortization Expense for Intangible Assets (Fiscal Years 2020-2024) | Fiscal Year | Estimated Amortization Expense (in thousands) | | :--- | :--- | | 2020 | $13,142 | | 2021 | $10,563 | | 2022 | $4,057 | | 2023 | $3,986 | | 2024 | $3,679 | [Note 9 – Share-Based Compensation Plans](index=81&type=section&id=Note%209%20%E2%80%93%20Share-Based%20Compensation%20Plans) The company maintains active stock incentive and employee stock purchase plans, with total share-based compensation expense of $22.1 million in fiscal 2019 - The company has two active share-based compensation plans: the 2018 Stock Incentive Plan and the 2018 Employee Stock Purchase Plan (ESPP)[348](index=348&type=chunk) - The 2018 Plan permits the granting of various stock awards, with an aggregate of **2,000,000 shares** authorized for issuance[353](index=353&type=chunk) - The 2018 ESPP authorizes **750,000 shares**, allowing employees to purchase shares at a discount[354](index=354&type=chunk) - Total unrecognized share-based compensation expense as of February 28, 2019, was **$18.8 million**[356](index=356&type=chunk) Share-Based Compensation Expense (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Stock options | $829 | $1,634 | $2,614 | | Directors stock compensation | $526 | $525 | $514 | | Performance based and other stock awards | $20,047 | $12,631 | $10,243 | | Employee stock purchase plan | $651 | $264 | $490 | | **Share-based compensation expense** | **$22,053** | **$15,054** | **$13,861** | | Less income tax benefits | $(1,395) | $(1,669) | $(1,762) | | **Share-based compensation expense, net of income tax benefits** | **$20,658** | **$13,385** | **$12,099** | [Note 10 – Defined Contribution Plans](index=86&type=section&id=Note%2010%20%E2%80%93%20Defined%20Contribution%20Plans) The company sponsors defined contribution savings plans, with total matching contributions of $4.0 million in fiscal 2019 - Total company matching contributions to defined contribution savings plans were **$4.0 million** in fiscal 2019, **$3.9 million** in fiscal 2018, and **$3.2 million** in fiscal 2017[362](index=362&type=chunk) [Note 11 – Repurchase of Helen of Troy Common Stock](index=86&type=section&id=Note%2011%20%E2%80%93%20Repurchase%20of%20Helen%20of%20Troy%20Common%20Stock) The company repurchased $212.1 million of its common stock in fiscal 2019 under a $400 million authorization effective until May 2020 - The Board of Directors authorized the repurchase of up to **$400 million** of common stock, with **$110.5 million** remaining available as of February 28, 2019[363](index=363&type=chunk) - Repurchases may include open market purchases, privately negotiated transactions, block trades, and accelerated stock repurchase transactions[363](index=363&type=chunk) Common Stock Repurchase Activity (Fiscal Years 2017-2019) | Category | Fiscal 2019 | Fiscal 2018 | Fiscal 2017 | | :--- | :--- | :--- | :--- | | **Common stock repurchased on the open market:** | | | | | Number of shares | 1,875,469 | 717,300 | 922,731 | | Aggregate value of shares | $212,080 | $65,795 | $75,000 | | Average price per share | $113.08 | $91.73 | $81.28 | | **Common stock received in connection with share-based compensation:** | | | | | Number of shares | 59,024 | 75,785 | 6,286 | | Aggregate value of shares | $5,413 | $7,258 | $595 | | Average price per share | $91.70 | $95.77 | $94.61 | [Note 12 – Restructuring Plan](index=87&type=section&id=Note%2012%20%E2%80%93%20Restructuring%20Plan) The "Project Refuel" restructuring plan targets $8.0 to $10.0 million in annualized profit improvements and is expected to be completed in fiscal 2020 - Project Refuel, a restructuring plan initiated in October 2017, aims to enhance performance in the Beauty and former Nutritional Supplements segments[366](index=366&type=chunk) - The plan was expanded in fiscal 2019 to include realignment and streamlining of the supply chain structure[366](index=366&type=chunk) - Project Refuel targets total annualized profit improvements of approximately **$8.0 million to $10.0 million** and is estimated to be completed during fiscal 2020[366](index=366&type=chunk) - In fiscal 2019, **$3.6 million** of pre-tax restructuring costs were incurred, primarily related to employee severance[367](index=367&type=chunk) [Note 13 – Other Commitments and Contingencies](index=87&type=section&id=Note%2013%20%E2%80%93%20Other%20Commitments%20and%20Contingencies) This note details commitments including the CEO's contract, international trade risks, and a $15.0 million litigation settlement paid in May 2018 - The CEO's employment contract was amended and extended through February 28, 2023[369](index=369&type=chunk) - The company faces international trade risks due to significant manufacturing in the Far East, mainly China[370](index=370&type=chunk)[371](index=371&type=chunk) - Thermometer patent litigation was settled, resulting in a **$15.0 million** settlement payment made on May 31, 2018[373](index=373&type=chunk) Contractual Obligations and Commercial Commitments (as of February 28, 2019) | (in thousands) | Total | < 1 year | 1-2 years | 2-3 years | 3-4 years | 4-5 years | > 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Floating rate debt | $323,607 | $1,900 | $1,900 | $303,100 | $1,900 | $14,807 | — | | Long-term incentive plan payouts | $12,708 | $7,012 | $3,481 | $2,215 | — | — | — | | Interest on floating rate debt | $32,237 | $11,453 | $11,387 | $8,879 | $518 | — | — | | Open purchase orders | $234,659 | $234,659 | — | — | — | — | — | | Minimum royalty payments | $49,159 | $12,650 | $12,855 | $13,040 | $7,914 | $2,700 | — | | Advertising and promotional | $37,401 | $18,933 | $6,411 | $6,527 | $5,530 | — | — | | Operating leases | $69,482 | $5,171 | $6,678 | $6,411 | $5,743 | $5,078 | $40,401 | | Capital spending commitments | $4,602 | $4,602 | — | — | — | — | — | | **Total contractual obligations** | **$763,855** | **$296,380** | **$42,712** | **$340,172** | **$21,605** | **$22,585** | **$40,401** | [Note 14 – Long Term Debt](index=89&type=section&id=Note%2014%20%E2%80%93%20Long%20Term%20Debt) The company maintains a $1.0 billion credit facility with $689.8 million available and was in compliance with all debt covenants as of February 28, 2019 - The company has a **$1.0 billion** unsecured revolving credit agreement, with **$301.2 million** outstanding and **$689.8 million** available as of February 28, 2019[376](index=376&type=chunk) - The company also has an aggregate principal balance of approximately **$22.3 million** under an MBFC Loan[377](index=377&type=chunk) - All debt is unconditionally guaranteed and requires maintenance of certain financial covenants[378](index=378&type=chunk) - The company was in **compliance with all debt agreement terms** as of February 28, 2019[378](index=378&type=chunk) Long-Term Debt Summary (as of February 28, 2019 and 2018) | (dollars in thousands) | Feb 28, 2019 | Feb 28, 2018 | | :--- | :--- | :--- | | MBFC Loan | $22,335 | $24,219 | | Credit Agreement | $298,449 | $265,650 | | Total long-term debt | $320,784 | $289,869 | | Less current maturities | $(1,884) | $(1,884) | | Long-term debt, excluding current maturities | $318,900 | $287,985 | Interest Expense Components (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Interest and commitment fees | $11,366 | $13,084 | $13,745 | | Deferred finance costs | $1,015 | $887 | $706 | | Interest rate swap settlements, net | $(515) | $54 | — | | Cross-currency debt swap | $(147) | $(74) | $(90) | | **Total interest expense** | **$11,719** | **$13,951** | **$14,361** | [Note 15 – Fair Value](index=90&type=section&id=Note%2015%20%E2%80%93%20Fair%20Value) The company classifies financial instruments by fair value hierarchy, with derivatives categorized as Level 2 and goodwill as Level 3 for impairment testing - Financial assets and liabilities are classified into a three-level hierarchy based on the observability of inputs to fair value measurement[380](index=380&type=chunk) - Money market accounts, interest rate swaps, and foreign currency contracts are classified as **Level 2** assets/liabilities[381](index=381&type=chunk) - Goodwill and other intangible assets are classified as **Level 3** items, measured at fair value on a non-recurring basis for impairment testing[384](index=384&type=chunk) Fair Value of Financial Assets and Liabilities (as of February 28, 2019 and 2018) | (in thousands) | Feb 28, 2019 (Level 2) | Feb 28, 2018 (Level 2) | | :--- | :--- | :--- | | **Assets:** | | | | Money market accounts | $915 | $1,107 | | Interest rate swaps | $512 | $2,481 | | Foreign currency contracts | $1,692 | $642 | | **Total assets** | **$3,119** | **$4,230** | | **Liabilities:** | | | | Floating rate debt | $320,784 | $289,869 | | Interest rate swaps | $339 | — | | Foreign currency contracts | $563 | $2,606 | | **Total liabilities** | **$321,686** | **$292,475** | [Note 16 – Financial Instruments and Risk Management](index=92&type=section&id=Note%2016%20%E2%80%93%20Financial%20Instruments%20and%20Risk%20Management) The company uses derivatives to manage foreign currency and interest rate risks and mitigates counterparty credit risk by dealing with major financial institutions - Foreign currency risk is managed using forward contracts and zero-cost collars designated as cash flow hedges and mark-to-market derivatives[387](index=387&type=chunk) - Interest rate risk on floating-rate debt is hedged with interest rate swaps, effectively fixing rates on **$225.0 million** of outstanding principal[388](index=388&type=chunk) - The company expects a gain of **$1.7 million** from derivatives to be reclassified into income over the next twelve months[391](index=391&type=chunk) - Counterparty credit risk for financial instruments is managed by dealing with substantial international financial institutions[393](index=393&type=chunk) Fair Values of Derivative Instruments (as of February 28, 2019 and 2018) | (in thousands) | Feb 28, 2019 Assets | Feb 28, 2019 Liabilities | Feb 28, 2018 Assets | Feb 28, 2018 Liabilities | | :--- | :--- | :--- | :--- | :--- | | **Derivatives designated as hedging instruments:** | | | | | | Zero-cost collar - Euro | $11 | — | — | $1,320 | | Foreign currency contracts - sell Euro | $1,047 | — | $102 | — | | Foreign currency contracts - sell Canadian Dollars | $168 | — | $378 | — | | Zero-cost collar - Pounds | — | $200 | — | $513 | | Foreign currency contracts - sell Pounds | $248 | $13 | $56 | — | | Foreign currency contracts - sell Mexican Pesos | — | $58 | $5 | — | | Interest rate swaps | $512 | $339 | $539 | — | | **Derivatives not designated under hedge accounting:** | | | | | | Foreign currency contracts - cross-currency debt swaps - Euro | $218 | — | — | $208 | | Foreign currency contracts - cross-currency debt swaps - Pound | — | $292 | — | $565 | | **Total fair value** | **$1,986** | **$902** | **$922** | **$2,606** | [Note 17 – Accumulated Other Comprehensive Income (Loss)](index=96&type=section&id=Note%2017%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details changes in accumulated other comprehensive income, which increased to a balance of $1.2 million as of February 28, 2019 Changes in Accumulated Other Comprehensive Income (Loss) (Fiscal Years 2018-2019) | (in thousands) | Interest Rate Swaps | Foreign Currency Contracts | Total | | :--- | :--- | :--- | :--- | | Balance at February 28, 2017 | $— | $1,173 | $1,173 | | Other comprehensive income before reclassification | $2,481 | $1,758 | $4,239 | | Amounts reclassified out of accumulated other comprehensive income | $— | $(4,364) | $(4,364) | | Tax effects | $(776) | $359 | $(417) | | Other comprehensive income (loss) | $1,705 | $(2,247) | $(542) | | **Balance at February 28, 2018** | **$1,705** | **$(1,074)** | **$631** | | Other comprehensive income (loss) before reclassification | $(2,308) | $(94) | $(2,402) | | Amounts reclassified out of accumulated other comprehensive income | $— | $2,488 | $2,488 | | Tax effects | $735 | $(261) | $474 | | Other comprehensive income (loss) | $(1,573) | $2,133 | $560 | | **Balance at February 28, 2019** | **$132** | **$1,059** | **$1,191** | [Note 18 – Segment and Geographic Information](index=96&type=section&id=Note%2018%20%E2%80%93%20Segment%20and%20Geographic%20Information) This note provides a breakdown of financial data by business segment and geographic region, with the United States being the largest market - Worldwide sales to the largest customer accounted for approximately **16% of net sales revenue** in fiscal 2019, with **78%** of these sales within the United States[401](index=401&type=chunk) Segment Information (Fiscal Year 2019) | (in thousands) | Housewares | Health & Home | Beauty | Total | | :--- | :--- | :--- | :--- | :--- | | Sales revenue, net | $523,807 | $695,217 | $345,127 | $1,564,151 | | Operating income | $100,743 | $68,448 | $30,188 | $199,379 | | Identifiable assets | $698,519 | $686,335 | $264,481 | $1,649,335 | | Capital and intangible asset expenditures | $16,023 | $8,508 | $1,854 | $26,385 | | Depreciation and amortization | $6,048 | $17,058 | $6,821 | $29,927 | Net Sales Revenue by Geographic Region (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | United States | $1,221,806 | $1,161,698 | $1,104,870 | | Canada | $66,855 | $58,856 | $58,631 | | EMEA | $143,024 | $143,668 | $133,172 | | Asia Pacific | $90,073 | $75,376 | $60,532 | | Latin America | $42,393 | $39,247 | $40,330 | | **Total sales revenue, net** | **$1,564,151** | **$1,478,845** | **$1,397,535** | Domestic and International Long-Lived Assets (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | United States | $416,521 | $437,920 | $409,337 | | International | $628,155 | $628,089 | $658,554 | | **Total** | **$1,044,676** | **$1,066,009** | **$1,067,891** | [Note 19 – Selected Quarterly Financial Data (Unaudited)](index=99&type=section&id=Note%2019%20%E2%80%93%20Selected%20Quarterly%20Financial%20Data%20(Unaudited)) This note provides unaudited selected quarterly financial data for fiscal years 2019 and 2018 Selected Quarterly Financial Data (Fiscal Year 2019) | Fiscal Year 2019: | May | August | November | February | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue, net | $354,679 | $393,548 | $431,081 | $384,843 | $1,564,151 | | Gross profit | $146,558 | $155,173 | $181,845 | $157,530 | $641,106 | | Operating income | $41,000 | $44,876 | $54,345 | $59,158 | $199,379 | | Income from continuing operations | $38,173 | $44,017 | $54,320 | $37,714 | $174,224 | | Diluted EPS - Continuing operations | $1.43 | $1.66 | $2.06 | $1.47 | $6.62 | Selected Quarterly Financial Data (Fiscal Year 2018) | Fiscal Year 2018: | May | August | November | February | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue, net | $325,491 | $344,949 | $420,841 | $387,564 | $1,478,845 | | Gross profit | $131,570 | $143,477 | $178,138 | $158,014 | $611,199 | | Operating income | $23,308 | $34,572 | $57,459 | $53,723 | $169,062 | | Income from continuing operations | $27,308 | $34,572 | $58,624 | $8,378 | $128,882 | | Diluted EPS - Continuing operations | $1.00 | $1.26 | $2.15 | $0.31 | $4.73 | [Note 20 – Income Taxes](index=99&type=section&id=Note%2020%20%E2%80%93%20Income%20Taxes) The effective tax rate was 7.3% in fiscal 2019, influenced by foreign tax rates and the prior-year impact of the U.S. Tax Cuts and Jobs Act - The Tax Cuts and Jobs Act (Tax Act) led to a provisional tax charge of **$17.9 million** in fiscal 2018[406](index=406&type=chunk)[408](index=408&type=chunk) - The effective income tax rate was **7.3%** in fiscal 2019, a decrease from **17.1%** in fiscal 2018, primarily due to the provisional charge related to the Tax Act in the prior year[184](index=184&type=chunk)[413](index=413&type=chunk) - The company's intellectual property is largely owned by foreign subsidiaries, resulting in a lower overall effective tax rate[405](index=405&type=chunk) - The Macau Offshore Law, which grants tax incentives, will be abolished on January 1, 2021, subjecting the subsidiary to a **12%** corporate income tax[413](index=413&type=chunk) - As of February 28, 2019, the total unrecognized tax benefits were **$3.2 million**[418](index=418&type=chunk) Components of Income Before Income Tax Expense (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | U.S. | $32,135 | $23,824 | $20,878 | | Non-U.S. | $155,865 | $131,614 | $134,839 | | **Total** | **$188,000** | **$155,438** | **$155,717** | Income Tax Rate Reconciliation (Fiscal Years 2017-2019) | | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Effective income tax rate at the U.S. statutory rate | 21.0% | 32.7% | 35.0% | | Impact of U.S. state income taxes | 1.2% | 0.5% | 0.5% | | Effect of statutory tax rate in Macau | (10.3)% | (19.5)% | (20.1)% | | Effect of statutory tax rate in Barbados | (5.9)% | (5.2)% | (7.3)% | | Effect of U.S. tax reform | (0.1)% | 11.5% | —% | | **Effective income tax rate** | **7.3%** | **17.1%** | **7.3%** | [Note 21 – Earnings Per Share](index=106&type=section&id=Note%2021%20%E2%80%93%20Earnings%20Per%20Share) This note provides the computation of basic and diluted earnings per share, including the impact of dilutive securities like stock options and RSUs - Basic earnings per share is computed using the weighted average number of common stock shares outstanding[421](index=421&type=chunk) - Diluted earnings per share includes the effect of dilutive securities, such as outstanding options and unvested RSUs and PSUs[421](index=421&type=chunk) Weighted Average Diluted Securities (Fiscal Years 2017-2019) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Weighted average shares outstanding, basic | 26,073 | 27,077 | 27,522 | | Incremental shares from share-based compensation arrangements | 230 | 177 | 369 | | **Weighted average shares outstanding, diluted** | **26,303** | **27,254** | **27,891** | | Antidilutive securities | 262 | 319 | 137 | [Schedule II - Valuation and Qualifying Accounts](index=107&type=section&id=Schedule%20II%20-%20Valuation%20and%20Qualifying%20Accounts) This schedule details the activity in the allowance for doubtful accounts for fiscal years 2017 through 2019 - Additions represent periodic charges to the provision for doubtful accounts, while deductions represent write-offs, net of recoveries[425](index=425&type=chunk) Allowances for Doubtful Accounts (Fiscal Years 2017-2019) | (in thousands) | Beginning Balance | Additions (1) | Deductions (2) | Ending Balance | | :--- | :--- | :--- | :--- | :--- | | Year Ended February 28, 2017 | $1,712 | $2,277 | $723 | $3,266 | | Year Ended February 28, 2018 | $3,266 | $1,066 | $1,420 | $2,912 | | Year Ended February 28, 2019 | $2,912 | $1,097 | $1,977 | $2,032 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=108&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There are no changes in or disagreements with accountants on accounting and financial disclosure - Not applicable[427](index=427&type=chunk) [Item 9A. Controls and Procedures](index=108&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of February 28, 2019 - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of February 28, 2019[428](index=428&type=chunk)[429](index=429&type=chunk) - Management's report on internal control over financial reporting is incorporated by reference from Item 8[430](index=430&type=chunk) - No material changes in internal control over financial reporting were identified during the fiscal year ended February 28, 2019[431](index=431&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=110&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2019 Proxy Statement - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2019 Proxy Statement[434](index=434&type=chunk) - The company has adopted a Code of Ethics for its key financial officers, available on its website[434](index=434&type=chunk) [Item 11. Executive Compensation](index=110&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the company's Proxy Statement - Information on executive compensation is incorporated by reference from the Proxy Statement for the 2019 Annual General Meeting of Shareholders[435](index=435&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=110&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Details regarding security ownership and related shareholder matters are incorporated by reference from the company's Proxy Statement - Information regarding security ownership of certain beneficial owners and management and related shareholder matters is incorporated by reference from the Proxy Statement[436](index=436&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=110&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related person transactions and director independence is incorporated by reference from the company's Proxy Statement - Information on certain relationships and related transactions, and director independence is incorporated by reference from the Proxy Statement[437](index=437&type=chunk) [Item 14. Principal Accounting Fees and Services](index=110&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information concerning principal accounting fees and services is incorporated by reference from the company's Proxy Statement - Information on principal accounting fees and services is incorporated by reference from the Proxy Statement[438](index=438&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=111&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and various exhibits filed with the Form 10-K - This item lists the financial statements, financial statement schedules, and exhibits filed with the Form 10-K[439](index=439&type=chunk)[441](index=441&type=chunk) - Exhibits include various agreements, corporate documents, and compensation plans[440](index=440&type=chunk)[442](index=442&type=chunk)[443](index=443&type=chunk)[444](index=444&type=chunk) [Signatures](index=116&type=section&id=Signatures) This section contains the signatures of the registrant's authorized officers and directors certifying the report - The report is signed by the Chief Executive Officer, Chief Financial Officer, and other directors on behalf of Helen of Troy Limited[448](index=448&type=chunk)[449](index=449&type=chunk)

Helen of Troy Limited (NASDAQ:HELE) Q4 2019 Earnings Conference Call April 26, 2019 9:00 AM ET Company Participants Jack Jancin – Senior Vice President-Corporate Business Development Julien Mininberg – Chief Executive Officer Brian Grass – Chief Financial Officer Conference Call Participants Bob Labick – CJS Securities Frank Camma – Sidoti Chris Carey – Bank of America Linda Bolton Weiser – D.A. Davidson Steve Marotta – CL King & Associates Operator Good day, ladies and gentlemen, and welcome to the Helen o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2018 or Table of Contents ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ..... to ….. Commission file number: 001-14669 HELEN OF TROY LIMITED (Exact name of registrant as specified in its charter) Bermuda 74-2692550 (Stat ...

Helen of Troy Ltd (NASDAQ:HELE) Q3 2019 Earnings Call January 8, 2019 9:00 AM ET Company Participants Jack Jancin - Senior Vice President, Corporate Business Development Julien Mininberg - Chief Executive Officer Brian Grass - Chief Financial Officer Conference Call Participants Bob Labick - CJS securities Chris Carey - Bank of America Merrill Lynch Linda Bolton Weiser - D.A. Davidson Steve Marotta - CL King Associates Operator Good day and welcome to the Helen of Troy Limited Third Quarter 2019 Earnings Ca ...