EL PASO, Texas
,
January 6, 2022
(press release)
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Consolidated Net Sales Decline of 2.0%; Growth of 0.4% from Core Business Helen of Troy Limited (NASDAQ: HELE), designer, developer and worldwide marketer of consumer brand-name housewares, health and home, and beauty products, today reported results for the three-month period ended November 30, 2021. Executive Summary – Third Quarter of Fiscal 2022 Compared to Fiscal 2021 and Fiscal 2020 Julien R. Mininberg, Chief Executive Officer, stated: “We are pleased with our results for the third quarter, delivering Core net sales growth and Core adjusted diluted EPS growth on top of 37.1% and 21.1%, respectively, in the prior year period. All three business segments exceeded our expectations. These results are the primary driver allowing us to raise our top and bottom-line outlook for the full fiscal year. Strong consumer and retailer demand drove sales for Housewares and Beauty, with both segments growing double digits on a Core basis over major double-digit sales increases in the third quarter of last fiscal year. Health & Home declined in the quarter, but performed above our expectations due to stronger than expected demand and faster-than-expected progress reworking certain products impacted by the EPA matter. Despite the impact of inflation and the EPA matter, our Core adjusted diluted EPS grew 3.0%.” Mr. Mininberg continued: “We are also very pleased to be able to raise our outlook for the fiscal year, reflecting the strength of our third quarter and the positive trends we see in our business during the fourth quarter. For the full fiscal year, we now expect to grow Core net sales 2% to 3% over last year’s 25.1% increase, grow Core adjusted diluted EPS 4.7% to 6.5% over last year’s 26.5% increase, and expand margins. I am proud of the hard work across our organization that puts us in a position to deliver fiscal year 2022 in line with our Phase II average annual targets on top of an elevated base despite significant headwinds from widespread inflation and the EPA matter. As we have demonstrated this fiscal year and in the past, Helen of Troy has a track record of delivering results in the face of obstacles. Looking ahead, we plan to use the proven combination of our inflation playbook, investing in our Leadership Brands, creating efficiencies through our global shared services platform, and harnessing the excellence of our organization and culture to address obstacles such as continued inflationary cost pressures expected next fiscal year. We also expect value creation from the recently-closed Osprey acquisition, which is expected to be immediately accretive to nearly all our consolidated financial measures. We believe our balance sheet and cash flow can be put to work on further capital allocation opportunities that could help create additional value in both the short and long-term.” Three Months Ended November 30, (in thousands) (unaudited) Housewares Health & Home Beauty Total Fiscal 2021 sales revenue, net $ 222,400 $ 250,158 $ 165,179 $ 637,737 Organic business (1) 23,601 (46,595 ) 8,943 (14,051 ) Impact of foreign currency 134 337 727 1,198 Change in sales revenue, net 23,735 (46,258 ) 9,670 (12,853 ) Fiscal 2022 sales revenue, net $ 246,135 $ 203,900 $ 174,849 $ 624,884 Total net sales revenue growth (decline) 10.7 % (18.5 ) % 5.9 % (2.0 ) % Organic business 10.6 % (18.6 ) % 5.4 % (2.2 ) % Impact of foreign currency 0.1 % 0.1 % 0.4 % 0.2 % Operating margin (GAAP) Fiscal 2022 17.6 % 6.7 % 19.0 % 14.4 % Fiscal 2021 16.9 % 12.2 % 19.7 % 15.8 % Adjusted operating margin (non-GAAP) Fiscal 2022 19.4 % 10.7 % 20.9 % 17.0 % Fiscal 2021 18.4 % 14.1 % 21.7 % 17.6 % Three Months Ended November 30, % Change (in thousands, except per share data) (unaudited) 2021 2020 2019 FY22/FY21 FY22/FY20 Consolidated net sales revenue $ 624,884 $ 637,737 $ 474,737 (2.0) % 31.6 % Core business net sales revenue (2) 620,509 617,766 450,742 0.4 % 37.7 % Leadership Brand net sales revenue (3) 506,982 508,210 379,604 (0.2) % 33.6 % Online channel net sales revenue (4) 141,233 152,562 114,193 (7.4) % 23.7 % Consolidated Diluted EPS $ 3.10 $ 3.34 $ 2.71 (7.2) % 14.4 % Consolidated Adjusted Diluted EPS (non-GAAP) (5) 3.72 3.76 3.12 (1.1) % 19.2 % Core Adjusted Diluted EPS (non-GAAP) (2) (5) 3.72 3.61 2.98 3.0 % 24.8 % Nine Months Ended November 30, % Change (in thousands, except per share data) (unaudited) 2021 2020 2019 FY22/FY21 FY22/FY20 Consolidated net sales revenue $ 1,641,335 $ 1,589,424 $ 1,265,067 3.3 % 29.7 % Core business net sales revenue (2) 1,611,098 1,526,995 1,193,454 5.5 % 35.0 % Leadership Brand net sales revenue (3) 1,329,858 1,288,614 1,012,346 3.2 % 31.4 % Online channel net sales revenue (4) 369,007 398,175 299,901 (7.3 ) % 23.0 % Consolidated Diluted EPS $ 7.52 $ 9.14 $ 6.15 (17.7 ) % 22.3 % Consolidated Adjusted Diluted EPS (non-GAAP) (5) 9.85 10.05 7.42 (2.0 ) % 32.7 % Core Adjusted Diluted EPS (non-GAAP) (2) (5) 9.67 9.58 6.98 0.9 % 38.5 % Consistent with its strategy of focusing resources on its Leadership Brands, during the fourth quarter of fiscal 2020, the Company committed to a plan to divest certain assets within its Beauty segment's mass channel personal care business (“Personal Care”). During the second quarter of fiscal 2022, the Company completed the sale of its Personal Care business, not including the Latin America and Caribbean regions, to HRB Brands LLC, for $44.7 million in cash and recognized a gain on the sale of $0.5 million in SG&A. The Company is continuing to negotiate the sale of the Latin America and Caribbean Personal Care businesses to HRB Brands LLC, which it expects to close no later than the end of fiscal 2022. Accordingly, the Company has continued to classify the identified net assets of the Latin America and Caribbean Personal Care businesses as held for sale. The Company defines Core business as strategic business that it expects to be an ongoing part of its operations, and Non-Core business as business or net assets (including net assets held for sale) that it expects to divest within a year of its designation as Non-Core. Sales from the Latin America and Caribbean Personal Care businesses continue to be included in Non-Core business for all periods presented. Three Months Ended November 30, (in thousands) (unaudited) Housewares Health & Home Beauty Total Fiscal 2021 sales revenue, net $ 222,400 $ 250,158 $ 165,179 $ 637,737 Core business (2) 23,735 (46,258 ) 25,266 2,743 Non-Core business (Personal Care) (2) — — (15,596 ) (15,596 ) Change in sales revenue, net 23,735 (46,258 ) 9,670 (12,853 ) Fiscal 2022 sales revenue, net $ 246,135 $ 203,900 $ 174,849 $ 624,884 Total net sales revenue growth (decline) 10.7 % (18.5 ) % 5.9 % (2.0 ) % Core business 10.7 % (18.5 ) % 15.3 % 0.4 % Non-Core business (Personal Care) — % — % (9.4 ) % (2.4 ) % Consolidated Results - Third Quarter Fiscal 2022 Compared to Third Quarter Fiscal 2021 On an adjusted basis for the third quarters of fiscal 2022 and 2021, excluding acquisition-related expenses, EPA compliance costs, restructuring charges, amortization of intangible assets, and non-cash share-based compensation, as applicable: Segment Results - Third Quarter Fiscal 2022 Compared to Third Quarter Fiscal 2021 Housewares net sales revenue increased $23.7 million, or 10.7%, to $246.1 million, compared to $222.4 million. Growth was driven by an increase from Organic business of $23.6 million, or 10.6%, primarily due to an increase in brick and mortar and online channel sales driven by strong consumer demand, earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season, the impact of customer price increases related to rising freight and product costs, higher sales in the club and closeout channels, growth in international sales, and the favorable comparative impact of COVID-19 reduced store traffic and a soft back to school season in the prior year period. Operating income was $43.2 million, or 17.6% of segment net sales revenue, compared to $37.7 million, or 16.9% of segment net sales revenue. The 0.7 percentage point increase in segment operating margin was primarily due to favorable operating leverage, favorable product mix, and reduced annual incentive compensation expense. These factors were partially offset by the net unfavorable impact of higher inbound freight expense and related customer price increases, a less favorable channel mix, an increase in marketing expense, and higher acquisition-related expense in connection with the Osprey transaction. Adjusted operating income increased 16.7% to $47.7 million, or 19.4% of segment net sales revenue compared to $40.9 million, or 18.4% of segment net sales revenue. Health & Home net sales revenue decreased $46.3 million, or 18.5%, to $203.9 million, compared to $250.2 million. The decline was driven by a decrease from Organic business of $46.6 million, or 18.6%, primarily due to a decrease in sales due to stronger COVID-19 driven demand for healthcare and healthy living products, primarily in thermometry and air filtration, in the comparative prior year period and a decrease in sales of air filtration products as a result of the EPA packaging compliance matter. These factors were partially offset by an increase in sales of humidification products and new product introductions. Operating income was $13.6 million, or 6.7% of segment net sales revenue, compared to $30.5 million, or 12.2% of segment net sales revenue. The 5.5 percentage point decrease in segment operating margin was primarily due to unfavorable operating leverage, the net unfavorable impact of higher inbound ocean freight expense and related customer price increases, EPA compliance costs of $4.9 million, higher distribution expense, and increased inventory obsolescence expense. These factors were partially offset by a decrease in marketing expenses, lower inbound air freight expense, reduced amortization expense, and decreased annual incentive compensation expense. Adjusted operating income decreased 38.3% to $21.8 million, or 10.7% of segment net sales revenue, compared to $35.3 million, or 14.1% of segment net sales revenue. Beauty Core business net sales revenue increased $25.3 million, or 15.3%, primarily reflecting growth in appliance sales due to higher brick and mortar and online channel sales driven by strong consumer demand, earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season, new product introductions, higher international sales, expanded distribution primarily in the club channel, and the favorable comparative impact of COVID-19 reduced store traffic in the prior year period. Total Beauty segment net sales revenue increased $9.7 million, or 5.9%, to $174.8 million, compared to $165.2 million primarily due to Core business growth partially offset by the sale of the Non-Core North America Personal Care business during the second quarter of fiscal 2022. Net sales revenue was favorably impacted by net foreign currency fluctuations of approximately $0.7 million, or 0.4%. Operating income was $33.2 million, or 19.0% of segment net sales revenue, compared to $32.6 million, or 19.7% of segment net sales revenue. The 0.7 percentage point decrease in segment operating margin was primarily due to the net unfavorable impact of higher inbound freight expense and related customer price increases, higher marketing expense, an increase in personnel expense, and the unfavorable impact of foreign currency exchange fluctuations. These factors were partially offset by a more favorable product mix, reduced royalty expense as a result of the amended Revlon trademark license, a decrease in outbound freight costs, lower bad debt expense, lower inventory obsolescence expense, and favorable operating leverage. Adjusted operating income increased 2.4% to $36.6 million, or 20.9% of segment net sales revenue, compared to $35.8 million, or 21.7% of segment net sales revenue. Balance Sheet and Cash Flow Highlights - Third Quarter Fiscal 2022 Compared to Third Quarter Fiscal 2021 Subsequent Event On December 29, 2021, the Company completed the acquisition of Osprey, a longtime U.S. leader in technical and everyday packs. The total purchase consideration was $414.7 million in cash, including the impact of a $5.3 million favorable customary closing net working capital adjustment. The acquisition was funded with cash on hand and borrowings from the Company's existing revolving credit facility. The Company incurred acquisition-related expenses of $1.6 million during the third quarter of fiscal 2022, which were recognized in SG&A within its condensed consolidated statements of income. Updated Fiscal 2022 Annual Outlook Due to the sale of the majority of the Personal Care business during the second quarter of fiscal 2022 and the expected continued classification of the remaining Latin America and Caribbean Personal Care business as Non-Core for fiscal 2022, the Company is providing its updated outlook on both a consolidated and Core business basis in order to provide comparability between historical and future periods. The expected impact of the Osprey acquisition for the period from the date of closing to the end of fiscal year 2022 is estimated to provide approximately $20 million of net sales revenue and approximately $0.05 and $0.07 of diluted EPS and adjusted diluted EPS, respectively. The expected impact of the Osprey acquisition is included in both the updated consolidated and Core business outlook provided. The Company's updated outlook includes the current estimated impact of the duration of time required to repackage the remaining inventory affected by the EPA compliance concerns and considers anticipated customer demand. The Company's updated outlook includes an improvement in the estimated unfavorable sales revenue impact to approximately $60 million and an improvement in the unfavorable adjusted diluted EPS impact to approximately $0.30 related to lost sales volume and earnings due to the EPA matter. The adjusted diluted EPS impact is net of the favorable impact of cost reduction actions being taken in the Health & Home segment, which include reductions in personnel, marketing and select new product development costs. The Company incurred $13.1 million, $3.0 million and $4.9 million of EPA compliance costs during the first, second and third quarters of fiscal 2022, respectively. These costs were included in the Company's GAAP operating results but were excluded from non-GAAP adjusted operating results. The Company expects to incur additional EPA compliance costs in the fourth quarter of fiscal 2022, which may include incremental freight, warehouse storage costs, charges from vendors, and legal fees, among other things. The Company expects to continue to exclude these costs from non-GAAP adjusted operating results in fiscal 2022, and the costs have been excluded from the updated annual outlook for non-GAAP adjusted diluted EPS. The Company expects consolidated net sales revenue in the range of $2.10 to $2.12 billion, which implies growth of flat to 1.0%. The Company expects Core net sales revenue in the range of $2.06 to $2.08 billion, which implies growth of 2.0% to 3.0%, and includes a 3.0% unfavorable impact related to the EPA matter. Excluding the EPA matter, the Company expects Core net sales revenue growth of 5.0% to 6.0%. The Company’s updated fiscal year net sales outlook reflects the following expectations by segment: The Company expects consolidated GAAP diluted EPS of $8.25 to $8.59 and Core diluted EPS of $8.08 to $8.42. The Company expects consolidated non-GAAP adjusted diluted EPS in the range of $11.73 to $11.93 and Core adjusted diluted EPS in the range of $11.55 to $11.75, which excludes any acquisition-related expenses, EPA compliance costs, asset impairment charges, restructuring charges, tax reform, share-based compensation expense and intangible asset amortization expense. The Company's Core adjusted diluted EPS expectation implies growth of 4.7% to 6.5%, which includes 2.7% of unfavorable impact due to the EPA matter, implying expected year-over-year growth of 7.4% to 9.2% not including the impact of the EPA matter. The Company’s updated outlook also includes estimated year-over-year inflationary cost pressures of approximately $55 to $60 million, or approximately $2.25 to $2.45 of adjusted diluted EPS, much of which have been mitigated through improved product mix, price increases, forward buying of inventory to delay cost impacts, utilizing previously negotiated shipping contracts at rates below current market prices, and implementing other cost reduction initiatives. The Company’s updated consolidated and Core net sales and EPS outlook reflects the following: Due primarily to the strong growth comparison and COVID-related events in the fourth quarter of fiscal 2021 and the accelerated orders by retailers in the third quarter of fiscal 2022 to avoid supply chain disruptions during the holiday season, the Company does not expect Core business net sales growth in the fourth quarter of fiscal 2022. However, the Company does expect Core adjusted diluted EPS growth for the fourth quarter due to the higher concentration of growth investments made in the prior year comparative period. The Company expects a reported consolidated GAAP effective tax rate range of 13.0% to 14.0%, and a Core GAAP effective tax rate range of 12.8% to 13.8% for the full fiscal year 2022. The Company expects a consolidated adjusted effective tax rate range of 10.8% to 11.7% and a Core adjusted effective tax rate range of 10.6% to 11.5%. The Company expects capital asset expenditures of $85 to $110 million for the full fiscal year 2022, which includes expected initial expenditures related to the previously announced new two million square foot distribution facility with state-of-the-art automation for the Housewares segment. The Company expects the total cost of the new distribution center and equipment to be in the range of $200 to $225 million spread over fiscal years 2022 and 2023. The likelihood and potential impact of any fiscal 2022 acquisitions, other than the Osprey transaction, and divestitures, future asset impairment charges, future foreign currency fluctuations, material long-term distribution losses and/or customer returns that may arise related to the EPA matter, or further share repurchases are unknown and cannot be reasonably estimated; therefore, they are not included in the Company’s updated sales and earnings outlook. Conference Call and Webcast The Company will conduct a teleconference in conjunction with today’s earnings release. The teleconference begins at 9:00 a.m. Eastern Time today, Thursday, January 6, 2022. Institutional investors and analysts interested in participating in the call are invited to dial (877) 407-3982 approximately ten minutes prior to the start of the call. The conference call will also be webcast live on the Events & Presentations page at: http://investor.helenoftroy.com/. A telephone replay of this call will be available at 12:00 p.m. Eastern Time on January 6, 2022 until 11:59 p.m. Eastern Time on January 13, 2022 and can be accessed by dialing (844) 512-2921 and entering replay pin number 13725730. A replay of the webcast will remain available on the website for one year. Non-GAAP Financial Measures The Company reports and discusses its operating results using financial measures consistent with accounting principles generally accepted in the United States of America (“GAAP”). To supplement its presentation, the Company discloses certain financial measures that may be considered non-GAAP such as Adjusted Operating Income, Adjusted Operating Margin, Adjusted Effective Tax Rate, Core and Non-Core Adjusted Effective Tax Rate, Adjusted Income, Adjusted Diluted Earnings per Share (“EPS”), Core and Non-Core Adjusted Diluted EPS, EBITDA, Adjusted EBITDA, Free Cash Flow and Outlook for Consolidated, Core and Non-Core Net Sales Revenue, Diluted EPS and Adjusted Diluted EPS Excluding Impact of the EPA Matter, which are presented in accompanying tables to this press release along with a reconciliation of these financial measures to their corresponding GAAP-based measures presented in the Company’s condensed consolidated statements of income and cash flows. For additional information see Note 5 to the accompanying tables to this press release. About Helen of Troy Limited Helen of Troy Limited (NASDAQ: HELE) is a leading global consumer products company offering creative solutions for its customers through a diversified portfolio of well-recognized and widely-trusted brands, including OXO, Hydro Flask, Vicks, Braun, Honeywell, PUR, Hot Tools and Drybar. We sometimes refer to these brands as our Leadership Brands. All trademarks herein belong to Helen of Troy Limited (or its subsidiaries) and/or are used under license from their respective licensors. For more information about Helen of Troy, please visit http://investor.helenoftroy.com Forward-Looking Statements Certain written and oral statements made by the Company and subsidiaries of the Company may constitute “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made in this press release. Generally, the words “anticipates”, “believes”, “expects”, “plans”, “may”, “will”, “would”, “should”, “seeks”, “estimates”, “project”, “predict”, “potential”, “currently”, “continue”, “intends”, “outlook”, “could”, and other similar words identify forward-looking statements. All statements that address operating results, events or developments that the Company expects or anticipates will occur in the future, including statements related to sales, earnings per share results, and statements expressing general expectations about future operating results, are forward-looking statements and are based upon its current expectations and various assumptions. The Company believes there is a reasonable basis for these expectations and assumptions, but there can be no assurance that the Company will realize these expectations or that these assumptions will prove correct. Forward-looking statements are subject to risks that could cause them to differ materially from actual results. Accordingly, the Company cautions readers not to place undue reliance on forward-looking statements. The forward-looking statements contained in this press release should be read in conjunction with, and are subject to and qualified by, the risks described in the Company’s Form 10-Q for the nine months ended November 30, 2021, and in the Company's other filings with the SEC. Investors are urged to refer to the risk factors referred to above for a description of these risks. Such risks include, among others, the Company's ability to successfully manage the demand, supply, and operational challenges associated with the actual or perceived effects of COVID-19 and any similar future public health crisis, pandemic or epidemic, the Company's ability to deliver products to its customers in a timely manner and according to their fulfillment standards, actions taken by large customers that may adversely affect the Company's gross profit and operating results, the Company's dependence on the strength of retail economies and vulnerabilities to any prolonged economic downturn, including from the effects of COVID-19, the Company's dependence on sales to several large customers and the risks associated with any loss of, or substantial decline in, sales to top customers, expectations regarding recent acquisitions (including Osprey) and any future acquisitions or divestitures, including the Company's ability to realize related synergies along with its ability to effectively integrate acquired businesses or disaggregate divested businesses, the Company's reliance on its Chief Executive Officer and a limited number of other key senior officers to operate its business, obsolescence or interruptions in the operation of the Company's central global Enterprise Resource Planning systems and other peripheral information systems, occurrence of cyber incidents or failure by the Company or its third-party service providers to maintain cybersecurity and the integrity of confidential internal or customer data, the Company's dependence on third-party manufacturers, most of which are located in the Asia Pacific market, and any inability to obtain products from such manufacturers, risks associated with weather conditions, the duration and severity of the cold and flu season and other related factors, the geographic concentration and peak season capacity of certain U.S. distribution facilities which increase its risk to disruptions that could affect the Company's ability to deliver products in a timely manner, risks associated with the use of licensed trademarks from or to third parties, the Company's ability to develop and introduce a continuing stream of innovative new products to meet changing consumer preferences, the risks associated with trade barriers, exchange controls, expropriations, and other risks associated with domestic and foreign operations, the risks associated with significant changes in or the Company's compliance with regulations, interpretations or product certification requirements, the risks associated with the Company's discussions with the EPA on the implementation of compliance plans related to certain of its products within the Health & Home segment, the risks associated with global legal developments regarding privacy and data security that could result in changes to its business practices, penalties, increased cost of operations, or otherwise harm the business, the risks associated with accounting for tax positions and the resolution of tax disputes, the risks of potential changes in laws and regulations, including environmental, health and safety and tax laws, and the costs and complexities of compliance with such laws, the Company's ability to continue to avoid classification as a Controlled Foreign Corporation, the risks associated with legislation enacted in Bermuda and Barbados in response to the European Union’s review of harmful tax competition, the risks of significant tariffs or other restrictions being placed on imports from China or Mexico or any retaliatory trade measures taken by China or Mexico, the risks associated with product recalls, product liability and other claims against the Company, and associated financial risks including but not limited to, significant impairment of the Company's goodwill, indefinite-lived and definite-lived intangible assets or other long-lived assets, risks associated with foreign currency exchange rate fluctuations, increased costs of raw materials, energy and transportation, projections of product demand, sales and net income, which are highly subjective in nature, and from which future sales and net income could vary in a material amount, the risks to the Company's liquidity or cost of capital which may be materially adversely affected by constraints or changes in the capital and credit markets and limitations under its financing arrangements. The Company undertakes no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise. HELEN OF TROY LIMITED AND SUBSIDIARIES Three Months Ended November 30, 2021 2020 Sales revenue, net $ 624,884 100.0 % $ 637,737 100.0 % Cost of goods sold 351,051 56.2 % 350,410 54.9 % Gross profit 273,833 43.8 % 287,327 45.1 % Selling, general and administrative expense (“SG&A”) 183,788 29.4 % 186,630 29.3 % Restructuring charges 5 — % (12 ) — % Operating income 90,040 14.4 % 100,709 15.8 % Non-operating income, net 52 — % 93 — % Interest expense 3,206 0.5 % 2,926 0.5 % Income before income tax 86,886 13.9 % 97,876 15.3 % Income tax expense 11,203 1.8 % 13,721 2.2 % Net income $ 75,683 12.1 % $ 84,155 13.2 % Diluted earnings per share (“EPS”) $ 3.10 $ 3.34 Weighted average shares of common stock used in computing diluted EPS 24,399 25,192 Nine Months Ended November 30, 2021 2020 Sales revenue, net $ 1,641,335 100.0 % $ 1,589,424 100.0 % Cost of goods sold 936,322 57.0 % 892,460 56.1 % Gross profit 705,013 43.0 % 696,964 43.9 % SG&A 482,467 29.4 % 439,646 27.7 % Restructuring charges 380 — % 355 — % Operating income 222,166 13.5 % 256,963 16.2 % Non-operating income, net 185 — % 440 — % Interest expense 9,508 0.6 % 9,568 0.6 % Income before income tax 212,843 13.0 % 247,835 15.6 % Income tax expense 28,873 1.8 % 16,061 1.0 % Net income $ 183,970 11.2 % $ 231,774 14.6 % Diluted EPS $ 7.52 $ 9.14 Weighted average shares of common stock used in computing diluted EPS 24,461 25,350 Condensed Consolidated Statements of Income and Reconciliation of Non-GAAP Three Months Ended November 30, 2021 As Reported Adjustments Adjusted Sales revenue, net $ 624,884 100.0 % $ — $ 624,884 100.0 % Cost of goods sold 351,051 56.2 % (306 ) (6 ) 350,745 56.1 % Gross profit 273,833 43.8 % 306 274,139 43.9 % SG&A 183,788 29.4 % (4,620 ) (6 ) 168,020 26.9 % (1,605 ) (7 ) (2,994 ) (8 ) (6,549 ) (9 ) Restructuring charges 5 — % (5 ) (10 ) — — % Operating income 90,040 14.4 % 16,079 106,119 17.0 % Non-operating income, net 52 — % — 52 — % Interest expense 3,206 0.5 % — 3,206 0.5 % Income before income tax 86,886 13.9 % 16,079 102,965 16.5 % Income tax expense 11,203 1.8 % 1,113 12,316 2.0 % Net income $ 75,683 12.1 % $ 14,966 $ 90,649 14.5 % Diluted EPS $ 3.10 $ 0.61 $ 3.72 Weighted average shares of common stock used in computing diluted EPS 24,399 24,399 Three Months Ended November 30, 2020 As Reported Adjustments Adjusted Sales revenue, net $ 637,737 100.0 % $ — $ 637,737 100.0 % Cost of goods sold 350,410 54.9 % — 350,410 54.9 % Gross profit 287,327 45.1 % — 287,327 45.1 % SG&A 186,630 29.3 % (4,501 ) (8 ) 175,390 27.5 % (6,739 ) (9 ) Restructuring charges (12 ) — % 12 (10 ) — — % Operating income 100,709 15.8 % 11,228 111,937 17.6 % Non-operating income, net 93 — % — 93 — % Interest expense 2,926 0.5 % — 2,926 0.5 % Income before income tax 97,876 15.3 % 11,228 109,104 17.1 % Income tax expense 13,721 2.2 % 607 14,328 2.2 % Net income $ 84,155 13.2 % $ 10,621 $ 94,776 14.9 % Diluted EPS $ 3.34 $ 0.42 $ 3.76 Weighted average shares of common stock used in computing diluted EPS 25,192 25,192 Condensed Consolidated Statements of Income and Reconciliation of Non-GAAP Financial Nine Months Ended November 30, 2021 As Reported Adjustments Adjusted Sales revenue, net $ 1,641,335 100.0 % $ — $ 1,641,335 100.0 % Cost of goods sold 936,322 57.0 % (13,775 ) (6 ) 922,547 56.2 % Gross profit 705,013 43.0 % 13,775 718,788 43.8 % SG&A 482,467 29.4 % (7,223 ) (6 ) 436,327 26.6 % (1,605 ) (7 ) (8,963 ) (8 ) (28,349 ) (9 ) Restructuring charges 380 — % (380 ) (10 ) — — % Operating income 222,166 13.5 % 60,295 282,461 17.2 % Non-operating income, net 185 — % — 185 — % Interest expense 9,508 0.6 % — 9,508 0.6 % Income before income tax 212,843 13.0 % 60,295 273,138 16.6 % Income tax expense 28,873 1.8 % 3,337 32,210 2.0 % Net income $ 183,970 11.2 % $ 56,958 $ 240,928 14.7 % Diluted EPS $ 7.52 $ 2.33 $ 9.85 Weighted average shares of common stock used in computing diluted EPS 24,461 24,461 Nine Months Ended November 30, 2020 As Reported Adjustments Adjusted Sales revenue, net $ 1,589,424 100.0 % $ — $ 1,589,424 100.0 % Cost of goods sold 892,460 56.1 % — 892,460 56.1 % Gross profit 696,964 43.9 % — 696,964 43.9 % SG&A 439,646 27.7 % (13,527 ) (8 ) 405,465 25.5 % (20,654 ) (9 ) Restructuring charges 355 — % (355 ) (10 ) — — % Operating income 256,963 16.2 % 34,536 291,499 18.3 % Non-operating income, net 440 — % — 440 — % Interest expense 9,568 0.6 % — 9,568 0.6 % Income before income tax 247,835 15.6 % 34,536 282,371 17.8 % Income tax expense 16,061 1.0 % 11,416 27,477 1.7 % Net income $ 231,774 14.6 % $ 23,120 $ 254,894 16.0 % Diluted EPS $ 9.14 $ 0.91 $ 10.05 Weighted average shares of common stock used in computing diluted EPS 25,350 25,350 Consolidated and Segment Net Sales Revenue Three Months Ended November 30, Housewares Health & Home Beauty Total Fiscal 2021 sales revenue, net $ 222,400 $ 250,158 $ 165,179 $ 637,737 Organic business (1) 23,601 (46,595 ) 8,943 (14,051 ) Impact of foreign currency 134 337 727 1,198 Change in sales revenue, net 23,735 (46,258 ) 9,670 (12,853 ) Fiscal 2022 sales revenue, net $ 246,135 $ 203,900 $ 174,849 $ 624,884 Total net sales revenue growth (decline) 10.7 % (18.5 ) % 5.9 % (2.0 ) % Organic business 10.6 % (18.6 ) % 5.4 % (2.2 ) % Impact of foreign currency 0.1 % 0.1 % 0.4 % 0.2 % Nine Months Ended November 30, Housewares Health & Home Beauty Total Fiscal 2021 sales revenue, net $ 564,891 $ 661,568 $ 362,965 $ 1,589,424 Organic business (1) 88,812 (116,302 ) 70,640 43,150 Impact of foreign currency 1,294 4,209 3,258 8,761 Change in sales revenue, net 90,106 (112,093 ) 73,898 51,911 Fiscal 2022 sales revenue, net $ 654,997 $ 549,475 $ 436,863 $ 1,641,335 Total net sales revenue growth (decline) 16.0 % (16.9 ) % 20.4 % 3.3 % Organic business 15.7 % (17.6 ) % 19.5 % 2.7 % Impact of foreign currency 0.2 % 0.6 % 0.9 % 0.6 % Leadership Brand and Other Net Sales Revenue Three Months Ended November 30, 2021 2020 $ Change % Change Leadership Brand sales revenue, net (3) $ 506,982 $ 508,210 $ (1,228) (0.2) % All other sales revenue, net 117,902 129,527 (11,625) (9.0) % Total sales revenue, net $ 624,884 $ 637,737 $ (12,853) (2.0) % Nine Months Ended November 30, 2021 2020 $ Change % Change Leadership Brand sales revenue, net (3) $ 1,329,858 $ 1,288,614 $ 41,244 3.2 % All other sales revenue, net 311,477 300,810 10,667 3.5 % Total sales revenue, net $ 1,641,335 $ 1,589,424 $ 51,911 3.3 % Consolidated and Segment Net Sales from Core and Non-Core Business (2) Three Months Ended November 30, Housewares Health & Home Beauty Total Fiscal 2021 sales revenue, net $ 222,400 $ 250,158 $ 165,179 $ 637,737 Core business 23,735 (46,258 ) 25,266 2,743 Non-Core business (Personal Care) — — (15,596 ) (15,596 ) Change in sales revenue, net 23,735 (46,258 ) 9,670 (12,853 ) Fiscal 2022 sales revenue, net $ 246,135 $ 203,900 $ 174,849 $ 624,884 Total net sales revenue growth (decline) 10.7 % (18.5 ) % 5.9 % (2.0 ) % Core business 10.7 % (18.5 ) % 15.3 % 0.4 % Non-Core business (Personal Care) — % — % (9.4 ) % (2.4 ) % Nine Months Ended November 30, Housewares Health & Home Beauty Total Fiscal 2021 sales revenue, net $ 564,891 $ 661,568 $ 362,965 $ 1,589,424 Core business 90,106 (112,093 ) 106,090 84,103 Non-Core business (Personal Care) — — (32,192 ) (32,192 ) Change in sales revenue, net 90,106 (112,093 ) 73,898 51,911 Fiscal 2022 sales revenue, net $ 654,997 $ 549,475 $ 436,863 $ 1,641,335 Total net sales revenue growth (decline) 16.0 % (16.9 ) % 20.4 % 3.3 % Core business 16.0 % (16.9 ) % 29.2 % 5.3 % Non-Core business (Personal Care) — % — % (8.9 ) % (2.0 ) % SELECTED OTHER DATA Three Months Ended November 30, 2021 Housewares Health & Home Beauty Total Operating income, as reported (GAAP) $ 43,239 17.6 % $ 13,573 6.7 % $ 33,228 19.0 % $ 90,040 14.4 % Acquisition-related expenses 1,605 0.7 % — — % — — % 1,605 0.3 % EPA compliance costs — — % 4,926 2.4 % — — % 4,926 0.8 % Restructuring charges — — % — — % 5 — % 5 — % Subtotal 44,844 18.2 % 18,499 9.1 % 33,233 19.0 % 96,576 15.5 % Amortization of intangible assets 525 0.2 % 572 0.3 % 1,897 1.1 % 2,994 0.5 % Non-cash share-based compensation 2,339 1.0 % 2,717 1.3 % 1,493 0.9 % 6,549 1.0 % Adjusted operating income (non-GAAP) $ 47,708 19.4 % $ 21,788 10.7 % $ 36,623 20.9 % $ 106,119 17.0 % Three Months Ended November 30, 2020 Housewares Health & Home Beauty Total Operating income, as reported (GAAP) $ 37,658 16.9 % $ 30,478 12.2 % $ 32,573 19.7 % $ 100,709 15.8 % Restructuring charges (12) — % — — % — — % (12) — % Subtotal 37,646 16.9 % 30,478 12.2 % 32,573 19.7 % 100,697 15.8 % Amortization of intangible assets 523 0.2 % 2,454 1.0 % 1,524 1.0 % 4,501 0.7 % Non-cash share-based compensation 2,712 1.2 % 2,359 0.9 % 1,668 1.0 % 6,739 1.1 % Adjusted operating income (non-GAAP) $ 40,881 18.4 % $ 35,291 14.1 % $ 35,765 21.7 % $ 111,937 17.6 % Nine Months Ended November 30, 2021 Housewares Health & Home Beauty Total Operating income, as reported (GAAP) $ 112,303 17.1 % $ 29,616 5.4 % $ 80,247 18.4 % $ 222,166 13.5 % Acquisition-related expenses 1,605 0.2 % — — % — — % 1,605 0.1 % EPA compliance costs — — % 20,998 3.8 % — — % 20,998 1.3 % Restructuring charges 369 0.1 % — — % 11 — % 380 — % Subtotal 114,277 17.4 % 50,614 9.2 % 80,258 18.4 % 245,149 14.9 % Amortization of intangible assets 1,562 0.2 % 1,709 0.3 % 5,692 1.3 % 8,963 0.5 % Non-cash share-based compensation 11,047 1.7 % 10,229 1.9 % 7,073 1.6 % 28,349 1.7 % Adjusted operating income (non-GAAP) $ 126,886 19.4 % $ 62,552 11.4 % $ 93,023 21.3 % $ 282,461 17.2 % Nine Months Ended November 30, 2020 Housewares Health & Home Beauty Total Operating income, as reported (GAAP) $ 106,294 18.8 % $ 95,782 14.5 % $ 54,887 15.1 % $ 256,963 16.2 % Restructuring charges 251 — % — — % 104 — % 355 — % Subtotal 106,545 18.9 % 95,782 14.5 % 54,991 15.2 % 257,318 16.2 % Amortization of intangible assets 1,541 0.3 % 7,415 1.1 % 4,571 1.3 % 13,527 0.9 % Non-cash share-based compensation 8,024 1.4 % 7,166 1.1 % 5,464 1.5 % 20,654 1.3 % Adjusted operating income (non-GAAP) $ 116,110 20.6 % $ 110,363 16.7 % $ 65,026 17.9 % $ 291,499 18.3 % SELECTED OTHER DATA Three Months Ended November 30, 2021 Housewares Health & Home Beauty Total Operating income, as reported (GAAP) $ 43,239 $ 13,573 $ 33,228 $ 90,040 Depreciation and amortization 2,894 2,529 3,218 8,641 Non-operating income, net — — 52 52 EBITDA (non-GAAP) 46,133 16,102 36,498 98,733 Add: Acquisition-related expenses 1,605 — — 1,605 EPA compliance costs — 4,926 — 4,926 Restructuring charges — — 5 5 Non-cash share-based compensation 2,339 2,717 1,493 6,549 Adjusted EBITDA (non-GAAP) $ 50,077 $ 23,745 $ 37,996 $ 111,818 Three Months Ended November 30, 2020 Housewares Health & Home Beauty Total Operating income, as reported (GAAP) $ 37,658 $ 30,478 $ 32,573 $ 100,709 Depreciation and amortization 2,371 4,106 3,042 9,519 Non-operating income, net — — 93 93 EBITDA (non-GAAP) 40,029 34,584 35,708 110,321 Add: Restructuring charges (12 ) — — (12 ) Non-cash share-based compensation 2,712 2,359 1,668 6,739 Adjusted EBITDA (non-GAAP) $ 42,729 $ 36,943 $ 37,376 $ 117,048 Nine Months Ended November 30, 2021 Housewares Health & Home Beauty Total Operating income, as reported (GAAP) $ 112,303 $ 29,616 $ 80,247 $ 222,166 Depreciation and amortization 8,257 7,879 9,946 26,082 Non-operating income, net — — 185 185 EBITDA (non-GAAP) 120,560 37,495 90,378 248,433 Add: Acquisition-related expenses 1,605 — — 1,605 EPA compliance costs — 20,998 — 20,998 Restructuring charges 369 — 11 380 Non-cash share-based compensation 11,047 10,229 7,073 28,349 Adjusted EBITDA (non-GAAP) $ 133,581 $ 68,722 $ 97,462 $ 299,765 Nine Months Ended November 30, 2020 Housewares Health & Home Beauty Total Operating income, as reported (GAAP) $ 106,294 $ 95,782 $ 54,887 $ 256,963 Depreciation and amortization 6,743 12,331 8,921 27,995 Non-operating income, net — — 440 440 EBITDA (non-GAAP) 113,037 108,113 64,248 285,398 Add: Restructuring charges 251 — 104 355 Non-cash share-based compensation 8,024 7,166 5,464 20,654 Adjusted EBITDA (non-GAAP) $ 121,312 $ 115,279 $ 69,816 $ 306,407 Reconciliation of GAAP Net Income and Diluted EPS to Three Months Ended November 30, 2021 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported (GAAP) $ 86,886 $ 11,203 $ 75,683 $ 3.56 $ 0.46 $ 3.10 Acquisition-related expenses 1,605 58 1,547 0.07 — 0.06 EPA compliance costs 4,926 74 4,852 0.20 — 0.20 Restructuring charges 5 — 5 — — — Subtotal 93,422 11,335 82,087 3.83 0.46 3.36 Amortization of intangible assets 2,994 197 2,797 0.12 0.01 0.11 Non-cash share-based compensation 6,549 784 5,765 0.27 0.03 0.24 Adjusted (non-GAAP) $ 102,965 $ 12,316 $ 90,649 $ 4.22 $ 0.50 $ 3.72 Weighted average shares of common stock used in computing diluted EPS 24,399 Three Months Ended November 30, 2020 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported (GAAP) $ 97,876 $ 13,721 $ 84,155 $ 3.89 $ 0.55 $ 3.34 Restructuring charges (12) — (12) — — — Subtotal 97,864 13,721 84,143 3.89 0.55 3.34 Amortization of intangible assets 4,501 204 4,297 0.18 0.01 0.17 Non-cash share-based compensation 6,739 403 6,336 0.27 0.02 0.25 Adjusted (non-GAAP) $ 109,104 $ 14,328 $ 94,776 $ 4.33 $ 0.57 $ 3.76 Weighted average shares of common stock used in computing diluted EPS 25,192 Three Months Ended November 30, 2019 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported (GAAP) $ 76,594 $ 7,895 $ 68,699 $ 3.02 $ 0.31 $ 2.71 Acquisition-related expenses 1,475 22 1,453 0.06 — 0.06 Restructuring charges 12 — 12 — — — Subtotal 78,081 7,917 70,164 3.07 0.31 2.76 Amortization of intangible assets 4,790 252 4,538 0.19 0.01 0.18 Non-cash share-based compensation 4,758 343 4,415 0.19 0.01 0.17 Adjusted (non-GAAP) $ 87,629 $ 8,512 $ 79,117 $ 3.45 $ 0.34 $ 3.12 Weighted average shares of common stock used in computing diluted EPS 25,396 Reconciliation of GAAP Net Income and Diluted EPS to Nine Months Ended November 30, 2021 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported (GAAP) $ 212,843 $ 28,873 $ 183,970 $ 8.70 $ 1.18 $ 7.52 Acquisition-related expenses 1,605 58 1,547 0.07 — 0.06 EPA compliance costs 20,998 315 20,683 0.86 0.01 0.85 Restructuring charges 380 6 374 0.02 — 0.02 Subtotal 235,826 29,252 206,574 9.64 1.20 8.45 Amortization of intangible assets 8,963 603 8,360 0.37 0.02 0.34 Non-cash share-based compensation 28,349 2,355 25,994 1.16 0.10 1.06 Adjusted (non-GAAP) $ 273,138 $ 32,210 $ 240,928 $ 11.17 $ 1.32 $ 9.85 Weighted average shares of common stock used in computing diluted EPS 24,461 Nine Months Ended November 30, 2020 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported (GAAP) $ 247,835 $ 16,061 $ 231,774 $ 9.78 $ 0.63 $ 9.14 Restructuring charges 355 2 353 0.01 — 0.01 Tax reform — 9,357 (9,357) — 0.37 (0.37) Subtotal 248,190 25,420 222,770 9.79 1.00 8.79 Amortization of intangible assets 13,527 651 12,876 0.53 0.03 0.51 Non-cash share-based compensation 20,654 1,406 19,248 0.82 0.06 0.76 Adjusted (non-GAAP) $ 282,371 $ 27,477 $ 254,894 $ 11.14 $ 1.08 $ 10.05 Weighted average shares of common stock used in computing diluted EPS 25,350 Nine Months Ended November 30, 2019 Income Diluted EPS Before Tax Tax Net of Tax Before Tax Tax Net of Tax As reported (GAAP) $ 172,018 $ 16,530 $ 155,488 $ 6.80 $ 0.65 $ 6.15 Acquisition-related expenses 1,475 22 1,453 0.06 — 0.06 Restructuring charges 1,061 68 993 0.04 — 0.04 Subtotal 174,554 16,620 157,934 6.90 0.66 6.24 Amortization of intangible assets 13,129 621 12,508 0.52 0.02 0.49 Non-cash share-based compensation 18,743 1,434 17,309 0.74 0.06 0.68 Adjusted (non-GAAP) $ 206,426 $ 18,675 $ 187,751 $ 8.16 $ 0.74 $ 7.42 Weighted average shares of common stock used in computing diluted EPS 25,295 Consolidated Core and Non-Core Net Sales and Reconciliation of Core and Non-Core Diluted EPS Three Months Ended November 30, 2021 2020 $ Change % Change Sales revenue, net Core $ 620,509 $ 617,766 $ 2,743 0.4 % Non-Core 4,375 19,971 (15,596 ) (78.1 ) % Total $ 624,884 $ 637,737 $ (12,853 ) (2.0 ) % Three Months Ended November 30, 2021 2020 $ Change % Change Adjusted Diluted EPS (non-GAAP) Core $ 3.72 $ 3.61 $ 0.11 3.0 % Non-Core — 0.15 (0.15 ) (100.0 ) % Total $ 3.72 $ 3.76 $ (0.04 ) (1.1 ) % Three Months Ended November 30, Core Business: 2021 2020 Diluted EPS, as reported $ 3.10 $ 3.19 Acquisition-related expenses, net of tax 0.06 — EPA compliance costs, net of tax 0.20 — Restructuring charges, net of tax — — Subtotal 3.36 3.19 Amortization of intangible assets, net of tax 0.11 0.17 Non-cash share-based compensation, net of tax 0.24 0.25 Adjusted Diluted EPS (non-GAAP) $ 3.72 $ 3.61 Three Months Ended November 30, Non-Core Business: 2021 2020 Diluted EPS, as reported $ — $ 0.15 Non-cash share-based compensation, net of tax — — Adjusted Diluted EPS (non-GAAP) $ — $ 0.15 Diluted EPS, as reported (GAAP) $ 3.10 $ 3.34 Consolidated Core and Non-Core Net Sales and Reconciliation of Core and Non-Core Diluted EPS Nine Months Ended November 30, 2021 2020 $ Change % Change Sales revenue, net Core $ 1,611,098 $ 1,526,995 $ 84,103 5.5 % Non-Core 30,237 62,429 (32,192 ) (51.6 ) % Total $ 1,641,335 $ 1,589,424 $ 51,911 3.3 % Nine Months Ended November 30, 2021 2020 $ Change % Change Adjusted Diluted EPS (non-GAAP) Core $ 9.67 $ 9.58 $ 0.09 0.9 % Non-Core 0.18 0.47 (0.29 ) (61.7 ) % Total $ 9.85 $ 10.05 $ (0.20 ) (2.0 ) % Nine Months Ended November 30, Core Business: 2021 2020 Diluted EPS, as reported $ 7.35 $ 8.67 Acquisition-related expenses, net of tax 0.06 — EPA compliance costs, net of tax 0.85 — Restructuring charges, net of tax 0.02 0.01 Tax reform — (0.37) Subtotal 8.28 8.31 Amortization of intangible assets, net of tax 0.34 0.51 Non-cash share-based compensation, net of tax 1.05 0.76 Adjusted Diluted EPS (non-GAAP) $ 9.67 $ 9.58 Nine Months Ended November 30, Non-Core Business: 2021 2020 Diluted EPS, as reported $ 0.17 $ 0.47 Non-cash share-based compensation, net of tax 0.01 — Adjusted Diluted EPS (non-GAAP) $ 0.18 $ 0.47 Diluted EPS, as reported (GAAP) $ 7.52 $ 9.14 Consolidated Core and Non-Core Net Sales and Reconciliation of Core and Non-Core Diluted EPS Three Months Ended Nine Months Ended Sales revenue, net Core $ 450,742 $ 1,193,454 Non-Core 23,995 71,613 Total $ 474,737 $ 1,265,067 Three Months Ended Nine Months Ended Adjusted Diluted EPS (non-GAAP) Core $ 2.98 $ 6.98 Non-Core 0.14 0.44 Total $ 3.12 $ 7.42 Three Months Ended Nine Months Ended Core Business: Diluted EPS, as reported $ 2.62 $ 5.85 Acquisition-related expenses, net of tax 0.06 0.06 Restructuring charges, net of tax — 0.02 Subtotal 2.68 5.93 Amortization of intangible assets, net of tax 0.13 0.38 Non-cash share-based compensation, net of tax 0.17 0.67 Adjusted Diluted EPS (non-GAAP) $ 2.98 $ 6.98 Three Months Nine Months Ended Non-Core Business: Diluted EPS, as reported $ 0.09 $ 0.30 Restructuring charges, net of tax — 0.01 Subtotal 0.09 0.31 Amortization of intangible assets, net of tax 0.05 0.12 Non-cash share-based compensation, net of tax — 0.01 Adjusted Diluted EPS (non-GAAP) $ 0.14 $ 0.44 Diluted EPS, as reported (GAAP) $ 2.71 $ 6.15 Selected Consolidated Balance Sheet, Cash Flow and Liquidity Information November 30, 2021 2020 Balance Sheet: Cash and cash equivalents $ 44,344 $ 156,661 Receivables, net 505,933 500,070 Inventory, net 585,811 383,440 Total assets, current 1,164,989 1,090,068 Total assets 2,487,405 2,311,744 Total liabilities, current 625,308 598,505 Total long-term liabilities 507,139 502,801 Total debt 447,468 440,381 Stockholders' equity 1,354,958 1,210,438 Liquidity: Working capital $ 539,681 $ 491,563 Nine Months Ended November 30, 2021 2020 Cash Flow: Depreciation and amortization $ 26,082 $ 27,995 Net cash (used) provided by operating activities (5,054 ) 249,746 Capital and intangible asset expenditures 41,529 19,423 Net debt proceeds 103,100 104,100 Payments for repurchases of common stock 113,019 202,961 Reconciliation of GAAP Net Cash (Used) Provided by Operating Activities Nine Months Ended November 30, 2021 2020 Net cash (used) provided by operating activities (GAAP) $ (5,054 ) $ 249,746 Less: Capital and intangible asset expenditures (41,529 ) (19,423 ) Free cash flow (non-GAAP) $ (46,583 ) $ 230,323 Updated Fiscal 2022 Outlook for Net Sales Revenue (2) Consolidated: Fiscal 2021 Updated Outlook for Fiscal 2022 Net sales revenue $ 2,098,799 $ 2,095,000 — $ 2,115,000 — % — 1.0 % Core Business: Net sales revenue $ 2,020,453 $ 2,060,000 — $ 2,080,000 2.0 % — 3.0 % Non-Core Business: Net sales revenue $ 78,346 $ 35,000 — $ 35,000 % — (55.3 )% Reconciliation of Updated Fiscal 2022 Outlook for GAAP Diluted Earnings Per Share Consolidated: Nine Months Ended Outlook for the Updated Outlook Diluted EPS, as reported (GAAP) $ 7.52 $ 0.73 — $ 1.07 $ 8.25 — $ 8.59 Acquisition-related expenses, net of tax 0.06 0.04 — 0.02 0.10 — 0.08 EPA compliance costs, net of tax 0.85 0.70 — 0.60 1.55 — 1.45 Restructuring charges, net of tax 0.02 — — — 0.02 — 0.02 Subtotal 8.45 1.47 — 1.69 9.92 — 10.14 Amortization of intangible assets, net of tax 0.34 0.14 — 0.14 0.48 — 0.48 Non-cash share-based compensation, net of tax 1.06 0.27 — 0.25 1.33 — 1.31 Adjusted diluted EPS (non-GAAP) $ 9.85 $ 1.88 — $ 2.08 $ 11.73 — $ 11.93 Core Business: Nine Months Ended Outlook for the Updated Outlook Diluted EPS, as reported (GAAP) $ 7.35 $ 0.73 — $ 1.07 $ 8.08 — $ 8.42 Acquisition-related expenses, net of tax 0.06 0.04 — 0.02 0.10 — 0.08 EPA compliance costs, net of tax 0.85 0.70 — 0.60 1.55 — 1.45 Restructuring charges, net of tax 0.02 — — — 0.02 — 0.02 Subtotal 8.28 1.47 — 1.69 9.75 — 9.97 Amortization of intangible assets, net of tax 0.34 0.14 — 0.14 0.48 — 0.48 Non-cash share-based compensation, net of tax 1.05 0.27 — 0.25 1.32 — 1.30 Adjusted diluted EPS (non-GAAP) $ 9.67 $ 1.88 — $ 2.08 $ 11.55 — $ 11.75 Non-Core Business: Nine Months Ended Outlook for the Updated Outlook Diluted EPS, as reported (GAAP) $ 0.17 $ — — $ — $ 0.17 — $ 0.17 Non-cash share-based compensation, net of tax 0.01 — — — 0.01 — 0.01 Adjusted diluted EPS (non-GAAP) $ 0.18 $ — — $ — $ 0.18 — $ 0.18 Reconciliation of Updated Fiscal 2022 Outlook for Effective Tax Rate (GAAP) to Adjusted Consolidated: Nine Months Ended Outlook for the Updated Outlook Fiscal Effective tax rate, as reported (GAAP) 13.6 % 6.7 % — 16.9 % 13.0 % — 14.0 % Acquisition-related expenses (0.1)% (0.1) % — (0.1) % (0.1) % — (0.1) % EPA compliance costs (1.1)% (2.4) % — (4.9) % (1.6) % — (1.6) % Restructuring charges —% — % — — % — % — — % Subtotal 12.4 % 4.2 % — 11.9 % 11.3 % — 12.3 % Amortization of intangible assets (0.1)% 0.3 % — (0.3) % (0.1) % — (0.2) % Non-cash share-based compensation (0.5)% 0.5 % — (0.5) % (0.4) % — (0.5) % Adjusted effective tax rate (non-GAAP) 11.8 % 5.0 % — 11.1 % 10.8 % — 11.7 % Core Business: Nine Months Ended Outlook for the Updated Outlook Fiscal Effective tax rate, as reported (GAAP) 13.4 % 5.5 % — 16.2 % 12.8 % — 13.8 % Acquisition-related expenses (0.1)% (0.1) % — (0.1) % (0.1) % — (0.1) % EPA compliance costs (1.1)% (1.8) % — (4.7) % (1.6) % — (1.6) % Restructuring charges —% — % — — % — % — — % Subtotal 12.2 % 3.6 % — 11.3 % 11.0 % — 12.1 % Amortization of intangible assets (0.1)% 0.3 % — (0.2) % (0.1) % — (0.2) % Non-cash share-based compensation (0.5)% 0.6 % — (0.4) % (0.3) % — (0.4) % Adjusted effective tax rate (non-GAAP) 11.6 % 4.5 % — 10.7 % 10.6 % — 11.5 % Non-Core Business: Nine Months Ended Outlook for the Updated Outlook Effective tax rate, as reported (GAAP) 19.5 % 109.4 % — 108.1 % 23.3 % — 23.8 % Non-cash share-based compensation (0.4)% (18.7) % — (16.4) % (0.7)% — (0.7)% Adjusted effective tax rate (non-GAAP) 19.1 % 90.7 % — 91.8 % 22.6 % — 23.1 % Reconciliation of Updated Fiscal 2022 Outlook for Net Sales Revenue to Updated Fiscal 2022 Consolidated: Fiscal 2021 Updated Outlook for Fiscal 2022 Net sales revenue $ 2,098,799 $ 2,095,000 — $ 2,115,000 — % — 1.0 % Impact of the EPA matter 60,000 — 60,000 (2.9) % — (2.9) % Net sales revenue, excluding impact of EPA matter (non-GAAP) $ 2,155,000 — $ 2,175,000 2.7 % — 3.6 % Core Business: Net sales revenue $ 2,020,453 $ 2,060,000 — $ 2,080,000 2.0 % — 3.0 % Impact of the EPA matter 60,000 — 60,000 (3.0) % — (3.0) % Net sales revenue, excluding impact of EPA matter (non-GAAP) $ 2,120,000 — $ 2,140,000 5.0 % — 6.0 % Non-Core Business: Net sales revenue $ 78,346 $ 35,000 — $ 35,000 (55.3) % — (55.3) % Impact of the EPA matter — — — — % — — % Net sales revenue, excluding impact of EPA matter (non-GAAP) $ 35,000 — $ 35,000 (55.3) % — (55.3) % Reconciliation of Updated Fiscal 2022 Outlook for GAAP Diluted EPS to Diluted EPS Excluding Impact of the EPA Matter (Non-GAAP) (2) (5) (11) (Unaudited) Consolidated: Fiscal 2021 Updated Outlook for Fiscal 2022 Diluted EPS, as reported (GAAP) $ 10.08 $ 8.25 — $ 8.59 (18.2) % — (14.8) % Impact of the EPA matter 0.30 — 0.30 (3.0) % — (3.0) % Diluted EPS, excluding impact of the EPA matter (non-GAAP) $ 8.55 — $ 8.89 (15.2) % — (11.8) % Core Business: Diluted EPS, as reported (GAAP) $ 9.76 $ 8.08 — $ 8.42 (17.2) % — (13.7) % Impact of the EPA matter 0.30 — 0.30 (3.1) % — (3.1) % Diluted EPS, excluding impact of the EPA matter (non-GAAP) $ 8.38 — $ 8.72 (14.1) % — (10.7) % Non-Core Business: Diluted EPS, as reported (GAAP) $ 0.32 $ 0.17 — $ 0.17 (46.9) % — (46.9) % Impact of the EPA matter — — — — % — — % Diluted EPS, excluding impact of the EPA matter (non-GAAP) $ 0.17 — $ 0.17 (46.9) % — (46.9) % Reconciliation of Updated Fiscal 2022 Outlook for Adjusted Diluted EPS (Non-GAAP) to Consolidated: Fiscal 2021 Updated Outlook for Fiscal 2022 Adjusted diluted EPS (non-GAAP) $ 11.65 $ 11.73 — $ 11.93 0.7 % — 2.4 % Impact of the EPA matter 0.30 — 0.30 (2.6) % — (2.6) % Adjusted diluted EPS, excluding impact of the EPA matter (non-GAAP) $ 12.03 — $ 12.23 3.3 % — 5.0 % Core Business: Adjusted diluted EPS (non-GAAP) $ 11.03 $ 11.55 — $ 11.75 4.7 % — 6.5 % Impact of the EPA matter 0.30 — 0.30 (2.7) % — (2.7) % Adjusted diluted EPS, excluding impact of the EPA matter (non-GAAP) $ 11.85 — $ 12.05 7.4 % — 9.2 % Non-Core Business: Adjusted diluted EPS (non-GAAP) $ 0.62 $ 0.18 — $ 0.18 (71.0) % — (71.0) % Impact of the EPA matter — — — — % — — % Adjusted diluted EPS, excluding impact of the EPA matter (non-GAAP) $ 0.18 — $ 0.18 (71.0) % — (71.0) % HELEN OF TROY LIMITED AND SUBSIDIARIES Notes to Press Release
GAAP Diluted Earnings Per Share (“EPS”) of $3.10
Core Adjusted Diluted EPS Growth of 3.0% to $3.72
Adjusted Diluted EPS Decline of 1.1% to $3.72
Raises Fiscal 2022 Diluted EPS and Net Sales Outlook:
Consolidated Diluted EPS to $8.25-$8.59; Core Diluted EPS to $8.08-$8.42
Consolidated Adjusted Diluted EPS to $11.73-$11.93; Core Adjusted Diluted EPS to $11.55-$11.75
Consolidated Net Sales to $2.095-$2.115 Billion; Core Net Sales to $2.060-$2.080 Billion
Condensed Consolidated Statements of Income
(Unaudited) (in thousands, except per share data)
Financial Measures – Adjusted Operating Income, Adjusted Income and Adjusted Diluted EPS (5)
(Unaudited) (in thousands, except per share data)
(GAAP)
(Non-GAAP)
(GAAP)
(Non-GAAP)
Measures – Adjusted Operating Income, Adjusted Income and Adjusted Diluted EPS (5)
(Unaudited) (in thousands, except per share data)
(GAAP)
(Non-GAAP)
(GAAP)
(Non-GAAP)
(Unaudited) (in thousands)
(Unaudited) (in thousands)
(Unaudited) (in thousands)
Reconciliation of Non-GAAP Financial Measures – GAAP Operating Income
to Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP) (5)
(Unaudited) (in thousands)
Reconciliation of Non-GAAP Financial Measures - EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amortization) and Adjusted EBITDA (5)
(Unaudited) (in thousands)
Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (5)
(Unaudited) (in thousands, except per share data)
Adjusted Income and Adjusted Diluted EPS (Non-GAAP) (5)
(Unaudited) (in thousands, except per share data)
to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (2) (5)
(Unaudited) (in thousands, except per share data)
to Core and Non-Core Adjusted Diluted EPS (Non-GAAP) (2) (5)
(Unaudited) (in thousands, except per share data)
to Core and Non Core Adjusted Diluted EPS (Non-GAAP) (2) (5)
(Unaudited) (in thousands, except per share data)
November 30, 2019
November 30, 2019
November 30, 2019
November 30, 2019
November 30, 2019
November 30, 2019
Ended November 30, 2019
November 30, 2019
(Unaudited) (in thousands)
to Free Cash Flow (Non-GAAP) (5)
(Unaudited) (in thousands)
(Unaudited)
(in thousands)
(55.3
)
(“EPS”) to Adjusted Diluted EPS (Non-GAAP) (2) (5) (Unaudited)
November 30, 2021
Balance of the
Fiscal Year
(Three Months)
Fiscal 2022
November 30, 2021
Balance of the
Fiscal Year
(Three Months)
Fiscal 2022
November 30, 2021
Balance of the
Fiscal Year
(Three Months)
Fiscal 2022
Effective Tax Rate (Non-GAAP) (2) (5) (Unaudited)
November 30, 2021
Balance of the
Fiscal Year
(Three Months)
2022
November 30, 2021
Balance of the
Fiscal Year
(Three Months)
2022
November 30, 2021
Balance of the
Fiscal Year
(Three Months)
Fiscal 2022
Outlook for Net Sales Revenue Excluding Impact of the EPA Matter (Non-GAAP) (2) (5) (11)
(Unaudited) (in thousands)
Adjusted Diluted EPS Excluding Impact of the EPA Matter (Non-GAAP) (2) (5) (11) (Unaudited)
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