Helen of Troy reports fiscal Q2 net earnings of US$23M, down 2.6% from year-ago period, impacted by tax expenses of US$4.8M; net revenue up 3.6% to US$287.4M

EL PASO, Texas , October 10, 2012 (press release) – Helen of Troy Limited (NASDAQ, NM: HELE), designer, developer and worldwide marketer of brand-name household, personal care and healthcare/home environment consumer products, today reported record net sales revenue and record operating income for the three and six month periods ended August 31, 2012.

Fiscal 2013 second quarter net sales revenue increased $9,991,000, or 3.6 percent, to $287,411,000 from $277,420,000 in the same period of the prior year. Net sales revenue for the six months ended August 31, 2012 was $587,622,000 versus net sales revenue of $548,887,000 in the same period of the prior year, an increase of $38,735,000, or 7.1 percent.

Housewares. Fiscal 2013 second quarter net sales revenue in the Housewares segment increased $722,000, or 1.1 percent, to $64,570,000 compared to $63,848,000 for the same period last year, a modest gain that resulted from the acceleration into the first fiscal quarter of certain sales that have historically occurred in the second quarter of the fiscal year, as well as a difficult retail environment. For the six months ended August 31, 2012, net sales revenue in the Housewares segment increased $8,025,000, or 6.9 percent, to $124,819,000 compared to $116,794,000 for the same period last year.

Personal Care. Fiscal 2013 second quarter net sales revenue in the Personal Care segment decreased $2,932,000, or 2.5 percent, to $112,364,000 compared to $115,296,000 for the same period last year, resulting from a difficult retail environment in the U.S., challenging macroeconomic conditions internationally, increased competitive trade promotional activities, the impact of foreign currency fluctuations, and the impact of inventory reductions and shifts in category emphasis by certain retailers. For the six months ended August 31, 2012, net sales revenue in the Personal Care segment decreased $8,098,000, or 3.4 percent, to $229,916,000 compared with $238,014,000 for the same period last year.

Healthcare/Home Environment. Fiscal 2013 second quarter net sales revenue in the Healthcare/Home Environment segment increased $12,201,000, or 12.4 percent, to $110,477,000 compared to $98,276,000 for the same period last year, reflecting the addition of $26,252,000 of net sales revenue from our recent acquisition of the PUR® water filtration business on December 30, 2011. For the six months ended August 31, 2012, net sales revenue in the Healthcare/Home Environment segment increased $38,808,000, or 20.0 percent, to $232,887,000 compared with $194,079,000 for the same period last year, reflecting the addition of $50,543,000 of net sales revenue from PUR®. The core business in this segment was negatively impacted by the difficult retail environment in the U.S. and Europe, as well as the impact of high inventory levels at retail due to the warm winter and mild cold and flu season experienced last year.

Net income for the second quarter of fiscal 2013 was $22,968,000, or $0.72 per fully diluted share, compared to $23,593,000, or $0.74 per fully diluted share, in the prior year second quarter, a decrease in net income of $625,000 or 2.6 percent. For the six month period ended August 31, 2012, net income was $46,440,000, or $1.46 per fully diluted share, compared to $48,198,000, or $1.52 per fully diluted share, in the same period last year, a decrease in net income of $1,758,000 or 3.6 percent.

Consolidated gross profit margin as a percentage of net sales revenue for the fiscal quarter ended August 31, 2012 increased 0.2 percentage points to 40.7 percent compared to 40.5 percent for the same period last year. The consolidated gross profit margin as a percentage of net sales revenue for the six months ended August 31, 2012 of 40.5 percent was unchanged compared to the same period last year.

Selling, general and administrative expense as a percentage of net sales revenue increased by 0.5 percentage points to 30.0 percent for the three months ended August 31, 2012 compared to 29.5 percent for the same period last year. Selling, general and administrative expense as a percentage of net sales revenue increased by 0.6 percentage points to 30.0 percent for the six months ended August 31, 2012 compared to 29.4 percent for the same period last year. The factors that contributed to the increase in SG&A include additional advertising spending, transition service fees incurred in connection with the PUR® acquisition, higher depreciation expense resulting from of an upgrade of our enterprise resource planning system, higher amortization as a result of the PUR® acquisition and higher incentive compensation expenses under new performance compensation arrangements.

Operating income for the second quarter of fiscal 2013 was a record $30,841,000 compared to $30,349,000 in the same period last year, an increase of 1.6%. Operating income for the six month period ended August 31, 2012 was a record $61,989,000 compared to $61,003,000 in the same period last year, an increase of 1.6%. EBITDA without share-based compensation for the second quarter of fiscal 2013 was $41,079,000 compared to $36,895,000 in the same period last year, an increase of $4,184,000 or 11.3%. EBITDA without share-based compensation for the six month period ended August 31, 2012 was $82,925,000 compared to $75,148,000 in the same period last year, an increase of $7,777,000 or 10.3%.

Net income and earnings per fully diluted share were unfavorably impacted by a year-over-year increase in tax expense of $1,941,000, to $4,774,000 for the fiscal second quarter, which equates to 17.2 percent of pretax earnings compared to 10.7 percent for the same period last year. For the six month period ended August 31, 2012, tax expense of $9,161,000 equates to 16.5 percent of pre-tax earnings, compared to 10.4 percent for the same period last year. The increase in tax expense as a percentage of pre-tax earnings is due to an increase in the proportion of taxable income in higher tax rate jurisdictions, resulting primarily from the Kaz and PUR® acquisitions.

Gerald J. Rubin, Chairman, Chief Executive Officer and President, commenting on the Company's fiscal 2013 second quarter results, stated "During the second quarter, we achieved record net sales revenue and record operating income. Similar to other global consumer products companies, we faced many challenges in light of continuing consumer uncertainty and global economic problems. We are pleased that we were able to achieve growth in net sales revenue, operating income and EBITDA without share-based compensation, in a challenging retail sales environment.

"As a Company, we continue to have a very strong balance sheet and generate a significant amount of cash, which can be used to further innovate our businesses and make future acquisitions. We are firmly committed to executing our strategic vision for Helen of Troy, even as the worldwide economic environment remains challenging.

"Under our previously approved share repurchase program, our Board of Directors has authorized us to purchase up to 3,019,071 shares of our outstanding common stock. We will continue to be opportunistic in both exploring future business acquisitions as well as repurchasing our common stock. As of August 31, 2012, our stockholder equity was $26.81 per share.

"Based on our results for the second quarter of fiscal 2013 and our outlook for a continuingly challenging retail sales environment, we are adjusting our expectations for the full fiscal year. While we still expect net sales revenue for fiscal year 2013 to be in the range of $1.3 billion to $1.325 billion, we now expect earnings per fully diluted share to be in the range of $3.50 to $3.60 for fiscal year 2013, ending February 28, 2013," Rubin concluded.

The Company will conduct a teleconference in conjunction with today's earnings release. The teleconference begins at 11 a.m. ET today, Wednesday, October 10, 2012. Members of the news media, investors and the general public are invited to access a live broadcast of the conference call via the Investor Relations page of the Company's website at www.hotus.com. The event will be archived and available for replay through November 30, 2012.

About Helen of Troy Limited: Helen of Troy Limited is a leading global consumer products company offering creative solutions for its customers through a strong portfolio of well-recognized and widely-trusted brands, including: Housewares: OXO®, OXO Good Grips®, OXO Soft Works®, OXO tot® and OXO Steel®; Personal Care: Revlon®, Vidal Sassoon®, Dr. Scholl's®, Pro Beauty Tools®, Sure®, Pert Plus®, Infusium23®, Brut®, Ammens®, Hot Tools®, Bed Head®, Karina®, Ogilvie® and Gold 'N Hot®; and Healthcare/Home Environment: Vicks®, Braun®, Honeywell®, PUR®, Febreze®, Stinger®, Duracraft® and SoftHeat®. The Revlon® trademark is used under license from Revlon. The Vidal Sassoon®, Vicks®, Braun® and Febreze® trademarks are used under license from The Procter & Gamble Company. The Dr. Scholl's® trademark is used under license from Merck. The Honeywell® trademark is used under license from Honeywell. The Bed Head® trademark is used under license from Unilever.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.