falsedesktopHELE2020-11-30000091678921000005{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "\t\tPAGE\nPART I.\tFINANCIAL INFORMATION\t\nItem 1.\tFinancial Statements\t2\n\tNote 1 - Basis of Presentation and Related Information\t7\n\tNote 2 - New Accounting Pronouncements\t8\n\tNote 3 - Revenue Recognition\t9\n\tNote 4 - Leases\t10\n\tNote 5 - Assets Held for Sale\t11\n\tNote 6 - Supplemental Balance Sheet Information\t12\n\tNote 7 - Acquisitions\t12\n\tNote 8 - Goodwill and Intangible Assets\t14\n\tNote 9 - Share-Based Compensation Plans\t15\n\tNote 10 - Repurchase of Helen of Troy Common Stock\t16\n\tNote 11 - Restructuring Plan\t17\n\tNote 12 - Commitments and Contingencies\t17\n\tNote 13 - Long-Term Debt\t17\n\tNote 14 - Fair Value\t19\n\tNote 15 - Financial Instruments and Risk Management\t20\n\tNote 16 - Accumulated Other Comprehensive Income (Loss)\t23\n\tNote 17 - Segment Information\t23\n\tNote 18 - Income Taxes\t24\n\tNote 19 - Earnings Per Share\t25\n\tNote 20 - Subsequent Events\t26\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t27\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t53\nItem 4.\tControls and Procedures\t53\nPART II.\tOTHER INFORMATION\t\nItem 1.\tLegal Proceedings\t53\nItem 1A.\tRisk Factors\t54\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t54\nItem 6.\tExhibits\t55\nSIGNATURES\t\t56\n", "q10k_tbl_1": "(in thousands except shares and par value)\tNovember 30 2020\tFebruary 29 2020\nAssets\t\t\nAssets current:\t\t\nCash and cash equivalents\t156661\t24467\nReceivables - principally trade less allowances of $3956 and $1461\t500070\t348023\nInventory\t383440\t256311\nPrepaid expenses and other current assets\t10591\t9229\nAssets held for sale\t39306\t44806\nTotal assets current\t1090068\t682836\nProperty and equipment net of accumulated depreciation of $144462 and $132340\t135795\t132107\nGoodwill\t739901\t739901\nOther intangible assets net of accumulated amortization of $162425 and $148891\t288617\t300952\nOperating lease assets\t32277\t32645\nDeferred tax assets net\t21568\t14635\nOther assets net of accumulated amortization of $2167 and $2167\t3518\t807\nTotal assets\t2311744\t1903883\nLiabilities and Stockholders' Equity\t\t\nLiabilities current:\t\t\nAccounts payable principally trade\t301175\t152674\nAccrued expenses and other current liabilities\t289568\t183157\nIncome taxes payable\t5878\t1181\nLong-term debt current maturities\t1884\t1884\nTotal liabilities current\t598505\t338896\nLong-term debt excluding current maturities\t438497\t337421\nLease liabilities non-current\t39279\t40861\nDeferred tax liabilities net\t5636\t4224\nOther liabilities non-current\t19389\t20758\nTotal liabilities\t1101306\t742160\nCommitments and contingencies\t\t\nStockholders' equity:\t\t\nCumulative preferred stock non-voting $1.00 par. Authorized 2000000 shares; none issued\t0\t0\nCommon stock $0.10 par. Authorized 50000000 shares; 24394007 and 25193766 shares issued and outstanding\t2439\t2519\nAdditional paid in capital\t277289\t268043\nAccumulated other comprehensive loss\t(12285)\t(7005)\nRetained earnings\t942995\t898166\nTotal stockholders' equity\t1210438\t1161723\nTotal liabilities and stockholders' equity\t2311744\t1903883\n", "q10k_tbl_2": "\tThree Months Ended November 30\t\tNine Months Ended November 30\t\n(in thousands except per share data)\t2020\t2019\t2020\t2019\nSales revenue net\t637737\t474737\t1589424\t1265067\nCost of goods sold\t350410\t264764\t892460\t723216\nGross profit\t287327\t209973\t696964\t541851\nSelling general and administrative expense (\"SG&A\")\t186630\t130692\t439646\t359794\nRestructuring charges\t(12)\t12\t355\t1061\nOperating income\t100709\t79269\t256963\t180996\nNon-operating income net\t93\t92\t440\t313\nInterest expense\t(2926)\t(2767)\t(9568)\t(9291)\nIncome before income tax\t97876\t76594\t247835\t172018\nIncome tax expense\t13721\t7895\t16061\t16530\nNet income\t84155\t68699\t231774\t155488\nEarnings per share (\"EPS\"):\t\t\t\t\nBasic\t3.37\t2.73\t9.20\t6.19\nDiluted\t3.34\t2.71\t9.14\t6.15\nWeighted average shares used in computing EPS:\t\t\t\t\nBasic\t24965\t25161\t25182\t25099\nDiluted\t25192\t25396\t25350\t25295\n", "q10k_tbl_3": "\tThree Months Ended November 30\t\tNine Months Ended November 30\t\n(in thousands)\t2020\t2019\t2020\t2019\nNet income\t84155\t68699\t231774\t155488\nOther comprehensive income (loss) net of tax:\t\t\t\t\nCash flow hedge activity - interest rate swaps\t1180\t1599\t(696)\t(5562)\nCash flow hedge activity - foreign currency contracts\t855\t(1729)\t(4584)\t(514)\nTotal other comprehensive income (loss) net of tax\t2035\t(130)\t(5280)\t(6076)\nComprehensive income\t86190\t68569\t226494\t149412\n", "q10k_tbl_4": "\tCommon Stock\t\tAdditional Paid in Capital\tAccumulated Other Comprehensive Income (Loss)\tRetained Earnings\tTotal Shareholders' Equity\n(in thousands including shares)\tShares\tPar Value\nBalances at August 31 2020\t25328\t2533\t274643\t(14320)\t1045673\t1308529\nNet income\t0\t0\t0\t0\t84155\t84155\nOther comprehensive income net of tax\t0\t0\t0\t2035\t0\t2035\nExercise of stock options\t1\t0\t70\t0\t0\t70\nNet issuance and settlement of restricted stock\t20\t2\t(2)\t0\t0\t0\nIssuance of common stock related to stock purchase plan\t12\t1\t1709\t0\t0\t1710\nCommon stock repurchased and retired\t(967)\t(97)\t(5870)\t0\t(186833)\t(192800)\nShare-based compensation\t0\t0\t6739\t0\t0\t6739\nBalances at November 30 2020\t24394\t2439\t277289\t(12285)\t942995\t1210438\nBalances at February 29 2020\t25194\t2519\t268043\t(7005)\t898166\t1161723\nNet income\t0\t0\t0\t0\t231774\t231774\nOther comprehensive loss net of tax\t0\t0\t0\t(5280)\t0\t(5280)\nExercise of stock options\t13\t2\t915\t0\t0\t917\nNet issuance and settlement of restricted stock\t189\t19\t(19)\t0\t0\t0\nIssuance of common stock related to stock purchase plan\t27\t2\t3609\t0\t0\t3611\nCommon stock repurchased and retired\t(1029)\t(103)\t(15913)\t0\t(186945)\t(202961)\nShare-based compensation\t0\t0\t20654\t0\t0\t20654\nBalances at November 30 2020\t24394\t2439\t277289\t(12285)\t942995\t1210438\nBalances at August 31 2019\t25130\t2513\t256995\t(4755)\t832622\t1087375\nNet income\t0\t0\t0\t0\t68699\t68699\nOther comprehensive loss net of tax\t0\t0\t0\t(130)\t0\t(130)\nExercise of stock options\t7\t1\t556\t0\t0\t557\nNet issuance and settlement of restricted stock\t21\t3\t(3)\t0\t0\t0\nIssuance of common stock related to stock purchase plan\t15\t1\t1426\t0\t0\t1427\nCommon stock repurchased and retired\t(6)\t(1)\t(1001)\t0\t0\t(1002)\nShare-based compensation\t0\t0\t4758\t0\t0\t4758\nBalances at November 30 2019\t25167\t2517\t262731\t(4885)\t901321\t1161684\nBalances at February 28 2019\t24946\t2495\t246585\t1191\t746366\t996637\nNet income\t0\t0\t0\t0\t155488\t155488\nOther comprehensive loss net of tax\t0\t0\t0\t(6076)\t0\t(6076)\nExercise of stock options\t69\t7\t4183\t0\t0\t4190\nNet issuance and settlement of restricted stock\t199\t21\t(21)\t0\t0\t0\nIssuance of common stock related to stock purchase plan\t30\t2\t2833\t0\t0\t2835\nCommon stock repurchased and retired\t(77)\t(8)\t(9592)\t0\t(533)\t(10133)\nShare-based compensation\t0\t0\t18743\t0\t0\t18743\nBalances at November 30 2019\t25167\t2517\t262731\t(4885)\t901321\t1161684\n", "q10k_tbl_5": "\tNine Months Ended November 30\t\n(in thousands)\t2020\t2019\nCash provided by operating activities:\t\t\nNet income\t231774\t155488\nAdjustments to reconcile net income to net cash provided by operating activities:\t\t\nDepreciation and amortization\t27995\t24876\nAmortization of financing costs\t772\t763\nNon-cash operating lease expense\t4910\t1371\nProvision for doubtful receivables\t3445\t484\nNon-cash share-based compensation\t20654\t18743\nLoss (gain) on the sale or disposal of property and equipment\t75\t(14)\nDeferred income taxes and tax credits\t(4132)\t(511)\nChanges in operating capital:\t\t\nReceivables\t(155492)\t(85747)\nInventories\t(121629)\t(31317)\nPrepaid expenses and other current assets\t(2915)\t(1269)\nOther assets and liabilities net\t(6617)\t21091\nAccounts payable\t148501\t(2037)\nAccrued expenses and other current liabilities\t95612\t477\nAccrued income taxes\t6793\t(980)\nNet cash provided by operating activities\t249746\t101418\nCash used in investing activities:\t\t\nCapital and intangible asset expenditures\t(19423)\t(13247)\nProceeds from the sale of property and equipment\t0\t3\nNet cash used in investing activities\t(19423)\t(13244)\nCash used in financing activities:\t\t\nProceeds from line of credit\t917400\t406600\nRepayment of line of credit\t(811400)\t(482000)\nRepayment of long-term debt\t(1900)\t(1900)\nPayment of financing costs\t(3796)\t0\nProceeds from share issuances under share-based compensation plans\t4528\t7025\nPayments for repurchases of common stock\t(202961)\t(10133)\nNet cash used in financing activities\t(98129)\t(80408)\nNet increase in cash and cash equivalents\t132194\t7766\nCash and cash equivalents beginning balance\t24467\t11871\nCash and cash equivalents ending balance\t156661\t19637\nSupplemental non-cash items not included above resulting from the adoption of ASC 842\t\t\nInitial recognition of operating lease asset\t0\t(37082)\nInitial recognition of lease liabilities\t0\t47223\nAccrued expenses and other current liabilities\t0\t(2873)\nOther assets and liabilities net\t0\t(7311)\nPrepaid expenses and other current assets\t0\t43\n", "q10k_tbl_6": "(in thousands)\t\nFiscal 2021 (balance for remainder of fiscal year)\t1826\nFiscal 2022\t7128\nFiscal 2023\t6123\nFiscal 2024\t5332\nFiscal 2025\t5762\nThereafter\t34370\nTotal future lease payments\t60541\nLess: imputed interest\t(16492)\nPresent value of lease liability\t44049\n", "q10k_tbl_7": "\tNovember 30 2020\nLease liabilities current (1)\t4770\nLease liabilities non-current\t39279\nTotal lease liability\t44049\n", "q10k_tbl_8": "(in thousands)\tNovember 30 2020\tFebruary 29 2020\nAssets:\t\t\nInventory\t11650\t17150\nProperty and equipment net of accumulated depreciation of $403\t83\t83\nGoodwill net of cumulative impairments of $71993\t9849\t9849\nOther intangible assets net of accumulated amortization of $4474\t17724\t17724\nTotal assets held for sale\t39306\t44806\n", "q10k_tbl_9": "(in thousands)\tEstimated Useful Lives (Years)\t\t\tNovember 30 2020\tFebruary 29 2020\nLand\t\t0\t\t12644\t12644\nBuilding and improvements\t3\t0\t40\t117061\t115592\nComputer software furniture and other equipment\t3\t0\t15\t98382\t89257\nTools molds and other production equipment\t3\t0\t7\t43001\t37652\nConstruction in progress\t\t0\t\t9169\t9302\nProperty and equipment gross\t\t\t\t280257\t264447\nLess accumulated depreciation\t\t\t\t(144462)\t(132340)\nProperty and equipment net\t\t\t\t135795\t132107\n", "q10k_tbl_10": "(in thousands)\tNovember 30 2020\tFebruary 29 2020\nAccrued compensation benefits and payroll taxes\t54667\t49624\nAccrued sales discounts and allowances\t55832\t34176\nAccrued sales returns\t31919\t22972\nAccrued advertising\t60549\t31351\nOther\t86601\t45034\nTotal accrued expenses and other current liabilities\t289568\t183157\n", "q10k_tbl_11": "(in thousands)\t\nAssets:\t\nReceivables\t7710\nInventory\t16603\nPrepaid expenses and other current assets\t190\nProperty and equipment\t1472\nGoodwill\t172933\nTrade names - definite\t30000\nOther intangible assets - definite\t33000\nSubtotal - assets\t261908\nLiabilities:\t\nAccounts payable\t1948\nAccrued expenses\t4099\nSubtotal - liabilities\t6047\nNet assets recorded\t255861\n", "q10k_tbl_12": "\tNovember 30 2020\t\t\t\tFebruary 29 2020\t\t\t\n(in thousands)\tGross Carrying Amount\tCumulative Goodwill Impairments\tAccumulated Amortization\tNet Book Value\tGross Carrying Amount\tCumulative Goodwill Impairments (1)\tAccumulated Amortization (2)\tNet Book Value\nHousewares:\t\t\t\t\t\t\t\t\nGoodwill\t282056\t0\t0\t282056\t282056\t0\t0\t282056\nTrademarks - indefinite\t134200\t0\t0\t134200\t134200\t0\t0\t134200\nOther intangibles - finite\t43063\t0\t(23011)\t20052\t42095\t0\t(21469)\t20626\nSubtotal\t459319\t0\t(23011)\t436308\t458351\t0\t(21469)\t436882\nHealth & Home:\t\t\t\t\t\t\t\t\nGoodwill\t284913\t0\t0\t284913\t284913\t0\t0\t284913\nTrademarks - indefinite\t54000\t0\t0\t54000\t54000\t0\t0\t54000\nLicenses - finite\t17050\t0\t(16015)\t1035\t17050\t0\t(15752)\t1298\nLicenses - indefinite\t7400\t0\t0\t7400\t7400\t0\t0\t7400\nOther intangibles - finite\t118446\t0\t(105293)\t13153\t118223\t0\t(98142)\t20081\nSubtotal\t481809\t0\t(121308)\t360501\t481586\t0\t(113894)\t367692\nBeauty:\t\t\t\t\t\t\t\t\nGoodwill\t172932\t0\t0\t172932\t244925\t(71993)\t0\t172932\nTrademarks - finite\t30151\t0\t(1827)\t28324\t33392\t0\t(3564)\t29828\nLicenses - finite\t13697\t0\t(13037)\t660\t13697\t0\t(12800)\t897\nOther intangibles - finite\t33035\t0\t(3242)\t29793\t79171\t0\t(46549)\t32622\nSubtotal\t249815\t0\t(18106)\t231709\t371185\t(71993)\t(62913)\t236279\nTotal\t1190943\t0\t(162425)\t1028518\t1311122\t(71993)\t(198276)\t1040853\n", "q10k_tbl_13": "(in thousands)\tThree Months Ended\tNine Months Ended\nNovember 30 2020\t4501\t13527\nNovember 30 2019\t4790\t13129\n", "q10k_tbl_14": "Estimated Amortization Expense (in thousands)\t\nFiscal 2021\t16751\nFiscal 2022\t10361\nFiscal 2023\t10287\nFiscal 2024\t9902\nFiscal 2025\t9281\nFiscal 2026\t7252\n", "q10k_tbl_15": "\tThree Months Ended November 30\t\tNine Months Ended November 30\t\n(in thousands except per share data)\t2020\t2019\t2020\t2019\nStock options\t3\t21\t18\t172\nDirectors stock compensation\t161\t140\t525\t421\nPerformance based and other stock awards\t6084\t4138\t19134\t17366\nEmployee stock purchase plan\t491\t459\t977\t784\nShare-based compensation expense\t6739\t4758\t20654\t18743\nLess income tax benefits\t(403)\t(343)\t(1406)\t(1434)\nShare-based compensation expense net of income tax benefits\t6336\t4415\t19248\t17309\nImpact of share-based compensation on EPS:\t\t\t\t\nBasic\t0.25\t0.18\t0.76\t0.69\nDiluted\t0.25\t0.17\t0.76\t0.68\n", "q10k_tbl_16": "\tThree Months Ended November 30\t\tNine Months Ended November 30\t\n(in thousands except share and per share data)\t2020\t2019\t2020\t2019\nCommon stock repurchased on the open market:\t\t\t\t\nNumber of shares\t960829\t0\t960829\t0\nAggregate value of shares\t191606\t0\t191606\t0\nAverage price per share\t199.42\t0\t199.42\t0\nCommon stock received in connection with share-based compensation:\t\t\t\t\nNumber of shares\t6115\t6509\t67740\t77067\nAggregate value of shares\t1194\t1002\t11355\t10133\nAverage price per share\t195.26\t153.88\t167.63\t131.48\n", "q10k_tbl_17": "(in thousands)\tNovember 30 2020\tFebruary 29 2020\nMBFC Loan (1)\t18548\t20451\nCredit Agreement (2)\t421833\t318854\nTotal long-term debt\t440381\t339305\nLess current maturities of long-term debt\t(1884)\t(1884)\nLong-term debt excluding current maturities\t438497\t337421\n", "q10k_tbl_18": "\tFair Values (1)\t\n(in thousands)\tNovember 30 2020\tFebruary 29 2020\nAssets:\t\t\nMoney market accounts\t118559\t2648\nInterest rate swaps\t0\t0\nForeign currency contracts\t7\t2083\nTotal assets\t118566\t4731\nLiabilities:\t\t\nFloating rate debt\t440381\t339305\nInterest rate swaps\t11627\t10717\nForeign currency contracts\t5328\t159\nTotal liabilities\t457336\t350181\n", "q10k_tbl_19": "(in thousands)\tNovember 30 2020\t\t\t\t\t\t\t\nDerivatives designated as hedging instruments\tHedge Type\tFinal Settlement Date\tNotional Amount\t\tPrepaid Expenses and Other Current Assets\tOther Assets\tAccrued Expenses and Other Current Liabilities\tOther Liabilities Non- current\nZero-cost collar - Euro\tCash flow\t02/2021\t€\t2000\t0\t0\t15\t0\nForeign currency contracts - sell Euro\tCash flow\t02/2022\t€\t46000\t0\t0\t1758\t433\nForeign currency contracts - sell Canadian Dollar\tCash flow\t02/2022\t26000\t\t0\t0\t763\t93\nZero-cost collar - Pound\tCash flow\t02/2021\t£\t2000\t0\t0\t122\t0\nForeign currency contracts - sell Pound\tCash flow\t02/2022\t£\t23790\t0\t0\t662\t266\nForeign currency contracts - sell Mexican Peso\tCash flow\t02/2021\t30000\t\t7\t0\t0\t0\nInterest rate swaps\tCash flow\t01/2024\t225000\t\t0\t0\t4986\t6641\nSubtotal\t\t\t\t\t7\t0\t8306\t7433\nDerivatives not designated under hedge accounting\t\t\t\t\t\t\t\t\nForeign currency contracts - cross-currency debt swaps - Euro\t(1)\t04/2022\t€\t6000\t0\t0\t0\t732\nForeign currency contracts - cross-currency debt swaps - Pound\t(1)\t04/2022\t£\t4500\t0\t0\t0\t484\nSubtotal\t\t\t\t\t0\t0\t0\t1216\nTotal fair value\t\t\t\t\t7\t0\t8306\t8649\n", "q10k_tbl_20": "(in thousands)\tFebruary 29 2020\t\t\t\t\t\t\t\nDerivatives designated as hedging instruments\tHedge Type\tFinal Settlement Date\tNotional Amount\t\tPrepaid Expenses and Other Current Assets\tOther Assets\tAccrued Expenses and Other Current Liabilities\tOther Liabilities Non- current\nZero-cost collar - Euro\tCash flow\t02/2021\t€\t8000\t74\t0\t0\t0\nForeign currency contracts - sell Euro\tCash flow\t05/2021\t€\t25875\t837\t0\t0\t15\nForeign currency contracts - sell Canadian Dollar\tCash flow\t02/2021\t14000\t\t202\t0\t0\t0\nZero-cost collar - Pound\tCash flow\t02/2021\t£\t6500\t0\t0\t144\t0\nForeign currency contracts - sell Pound\tCash flow\t05/2021\t£\t13000\t435\t23\t0\t0\nForeign currency contracts - sell Mexican Peso\tCash flow\t05/2020\t10000\t\t12\t0\t0\t0\nInterest rate swaps\tCash flow\t01/2024\t225000\t\t0\t0\t3489\t7228\nSubtotal\t\t\t\t\t1560\t23\t3633\t7243\nDerivatives not designated under hedge accounting\t\t\t\t\t\t\t\t\nForeign currency contracts - cross-currency debt swaps - Euro\t(1)\t04/2020\t€\t4400\t473\t0\t0\t0\nForeign currency contracts - cross-currency debt swaps - Pound\t(1)\t04/2020\t£\t5000\t27\t0\t0\t0\nSubtotal\t\t\t\t\t500\t0\t0\t0\nTotal fair value\t\t\t\t\t2060\t23\t3633\t7243\n", "q10k_tbl_21": "\tThree Months Ended November 30\t\t\t\t\t\t\t\n\tGain (Loss) Recognized in AOCI\t\tGain (Loss) Reclassified from AOCI into Income\t\t\tGain (Loss) Recognized in Income\t\t\n(in thousands)\t2020\t2019\tLocation\t2020\t2019\tLocation\t2020\t2019\nCurrency contracts - cash flow hedges\t1550\t(2739)\tSG&A\t549\t(630)\t\t0\t0\nInterest rate swaps - cash flow hedges\t1539\t2084\tInterest expense\t0\t0\tInterest expense\t(1289)\t(162)\nCross-currency debt swaps - principal\t0\t0\t\t0\t0\tSG&A\t23\t(389)\nCross-currency debt swaps - interest\t0\t0\t\t0\t0\tInterest Expense\t(2)\t73\nTotal\t3089\t(655)\t\t549\t(630)\t\t(1268)\t(478)\n", "q10k_tbl_22": "\tNine Months Ended November 30\t\t\t\t\t\t\t\n\tGain (Loss) Recognized in AOCI\t\tGain (Loss) Reclassified from AOCI into Income\t\t\tGain (Loss) Recognized in Income\t\t\n(in thousands)\t2020\t2019\tLocation\t2020\t2019\tLocation\t2020\t2019\nCurrency contracts - cash flow hedges\t(5653)\t(3407)\tSG&A\t(124)\t(2840)\t\t0\t0\nInterest rate swaps - cash flow hedges\t(910)\t(7242)\tInterest expense\t0\t0\tInterest expense\t(3222)\t69\nCross-currency debt swaps - principal\t0\t0\t\t0\t0\tSG&A\t(1075)\t419\nCross-currency debt swaps - interest\t0\t0\t\t0\t0\tInterest expense\t72\t147\nTotal\t(6563)\t(10649)\t\t(124)\t(2840)\t\t(4225)\t635\n", "q10k_tbl_23": "(in thousands)\tInterest Rate Swaps\tForeign Currency Contracts\tTotal\nBalance at February 29 2020\t(8199)\t1194\t(7005)\nOther comprehensive loss before reclassification\t(910)\t(5653)\t(6563)\nAmounts reclassified out of AOCI\t0\t124\t124\nTax effects\t214\t945\t1159\nOther comprehensive loss\t(696)\t(4584)\t(5280)\nBalance at November 30 2020\t(8895)\t(3390)\t(12285)\nBalance at February 28 2019\t132\t1059\t1191\nOther comprehensive loss before reclassification\t(7242)\t(3407)\t(10649)\nAmounts reclassified out of AOCI\t0\t2840\t2840\nTax effects\t1680\t53\t1733\nOther comprehensive loss\t(5562)\t(514)\t(6076)\nBalance at November 30 2019\t(5430)\t545\t(4885)\n", "q10k_tbl_24": "\tThree Months Ended November 30 2020\t\t\t\n(in thousands)\tHousewares\tHealth & Home\tBeauty (1)\tTotal\nSales revenue net\t222400\t250158\t165179\t637737\nRestructuring charges\t(12)\t0\t0\t(12)\nOperating income\t37658\t30478\t32573\t100709\nCapital and intangible asset expenditures\t1375\t2441\t370\t4186\nDepreciation and amortization\t2371\t4106\t3042\t9519\n", "q10k_tbl_25": "\tThree Months Ended November 30 2019\t\t\t\n(in thousands)\tHousewares\tHealth & Home\tBeauty\tTotal\nSales revenue net\t183211\t185810\t105716\t474737\nRestructuring charges\t0\t0\t12\t12\nOperating income\t42272\t24372\t12625\t79269\nCapital and intangible asset expenditures\t2272\t1917\t197\t4386\nDepreciation and amortization\t2263\t3740\t2757\t8760\n", "q10k_tbl_26": "\tNine Months Ended November 30 2020\t\t\t\n(in thousands)\tHousewares\tHealth & Home\tBeauty (1)\tTotal\nSales revenue net\t564891\t661568\t362965\t1589424\nRestructuring charges\t251\t0\t104\t355\nOperating income\t106294\t95782\t54887\t256963\nCapital and intangible asset expenditures\t6912\t10346\t2165\t19423\nDepreciation and amortization\t6743\t12331\t8921\t27995\n", "q10k_tbl_27": "\tNine Months Ended November 30 2019\t\t\t\n(in thousands)\tHousewares\tHealth & Home\tBeauty\tTotal\nSales revenue net\t496017\t499543\t269507\t1265067\nRestructuring charges\t90\t0\t971\t1061\nOperating income\t109170\t51836\t19990\t180996\nCapital and intangible asset expenditures\t8354\t4115\t778\t13247\nDepreciation and amortization\t5292\t12322\t7262\t24876\n", "q10k_tbl_28": "\tThree Months Ended November 30\t\tNine Months Ended November 30\t\n(in thousands)\t2020\t2019\t2020\t2019\nWeighted average shares outstanding basic\t24965\t25161\t25182\t25099\nIncremental shares from share-based compensation arrangements\t227\t235\t168\t196\nWeighted average shares outstanding diluted\t25192\t25396\t25350\t25295\nAnti-dilutive securities\t4\t134\t149\t217\n", "q10k_tbl_29": "\tThree Months Ended November 30\t\t\t\t% of Sales Revenue net\t\n(in thousands)\t2020 (1)\t2019\t Change\t% Change\t2020\t2019\nSales revenue by segment net\t\t\t\t\t\t\nHousewares\t222400\t183211\t39189\t21.4%\t34.9%\t38.6%\nHealth & Home\t250158\t185810\t64348\t34.6%\t39.2%\t39.1%\nBeauty\t165179\t105716\t59463\t56.2%\t25.9%\t22.3%\nTotal sales revenue net\t637737\t474737\t163000\t34.3%\t100.0%\t100.0%\nCost of goods sold\t350410\t264764\t85646\t32.3%\t54.9%\t55.8%\nGross profit\t287327\t209973\t77354\t36.8%\t45.1%\t44.2%\nSelling general and administrative expense (\"SG&A\")\t186630\t130692\t55938\t42.8%\t29.3%\t27.5%\nRestructuring charges\t(12)\t12\t(24)\t*\t-%\t-%\nOperating income\t100709\t79269\t21440\t27.0%\t15.8%\t16.7%\nNon-operating income net\t93\t92\t1\t1.1%\t-%\t-%\nInterest expense\t(2926)\t(2767)\t(159)\t5.7%\t(0.5)%\t(0.6)%\nIncome before income tax\t97876\t76594\t21282\t27.8%\t15.3%\t16.1%\nIncome tax expense\t13721\t7895\t5826\t73.8%\t2.2%\t1.7%\nNet income\t84155\t68699\t15456\t22.5%\t13.2%\t14.5%\n", "q10k_tbl_30": "\tNine Months Ended November 30\t\t\t\t% of Sales Revenue net\t\n(in thousands)\t2020 (1)\t2019\t Change\t% Change\t2020\t2019\nSales revenue by segment net\t\t\t\t\t\t\nHousewares\t564891\t496017\t68874\t13.9%\t35.6%\t39.2%\nHealth & Home\t661568\t499543\t162025\t32.4%\t41.6%\t39.5%\nBeauty\t362965\t269507\t93458\t34.7%\t22.8%\t21.3%\nTotal sales revenue net\t1589424\t1265067\t324357\t25.6%\t100.0%\t100.0%\nCost of goods sold\t892460\t723216\t169244\t23.4%\t56.1%\t57.2%\nGross profit\t696964\t541851\t155113\t28.6%\t43.9%\t42.8%\nSG&A\t439646\t359794\t79852\t22.2%\t27.7%\t28.4%\nRestructuring charges\t355\t1061\t(706)\t(66.5)%\t-%\t0.1%\nOperating income\t256963\t180996\t75967\t42.0%\t16.2%\t14.3%\nNon-operating income net\t440\t313\t127\t40.6%\t-%\t-%\nInterest expense\t(9568)\t(9291)\t(277)\t3.0%\t(0.6)%\t(0.7)%\nIncome before income tax\t247835\t172018\t75817\t44.1%\t15.6%\t13.6%\nIncome tax expense\t16061\t16530\t(469)\t(2.8)%\t1.0%\t1.3%\nNet income\t231774\t155488\t76286\t49.1%\t14.6%\t12.3%\n", "q10k_tbl_31": "\tThree Months Ended November 30\t\t\t\n(in thousands)\tHousewares\tHealth & Home\tBeauty\tTotal\nFiscal 2020 sales revenue net\t183211\t185810\t105716\t474737\nOrganic business (1)\t38836\t62887\t42072\t143795\nImpact of foreign currency\t353\t1461\t(110)\t1704\nAcquisition (2)\t0\t0\t17501\t17501\nChange in sales revenue net\t39189\t64348\t59463\t163000\nFiscal 2021 sales revenue net\t222400\t250158\t165179\t637737\nTotal net sales revenue growth (decline)\t21.4%\t34.6%\t56.2%\t34.3%\nOrganic business\t21.2%\t33.8%\t39.8%\t30.3%\nImpact of foreign currency\t0.2%\t0.8%\t(0.1)%\t0.4%\nAcquisition\t-%\t-%\t16.6%\t3.7%\n", "q10k_tbl_32": "\tNine Months Ended November 30\t\t\t\n(in thousands)\tHousewares\tHealth & Home\tBeauty\tTotal\nFiscal 2020 sales revenue net\t496017\t499543\t269507\t1265067\nOrganic business (1)\t68803\t162138\t60946\t291887\nImpact of foreign currency\t71\t(113)\t(3121)\t(3163)\nAcquisition (2)\t0\t0\t35633\t35633\nChange in sales revenue net\t68874\t162025\t93458\t324357\nFiscal 2021 sales revenue net\t564891\t661568\t362965\t1589424\nTotal net sales revenue growth (decline)\t13.9%\t32.4%\t34.7%\t25.6%\nOrganic business\t13.9%\t32.5%\t22.6%\t23.1%\nImpact of foreign currency\t-%\t-%\t(1.2)%\t(0.3)%\nAcquisition\t-%\t-%\t13.2%\t2.8%\n", "q10k_tbl_33": "\tThree Months Ended November 30\t\t\t\n(in thousands)\tHousewares\tHealth & Home\tBeauty\tTotal\nFiscal 2020 sales revenue net\t183211\t185810\t105716\t474737\nCore business (1)\t39189\t64348\t63487\t167024\nNon-Core business (Personal Care)\t0\t0\t(4024)\t(4024)\nChange in sales revenue net\t39189\t64348\t59463\t163000\nFiscal 2021 sales revenue net\t222400\t250158\t165179\t637737\nTotal net sales revenue growth (decline)\t21.4%\t34.6%\t56.2%\t34.3%\nCore business\t21.4%\t34.6%\t60.1%\t35.2%\nNon-Core business (Personal Care)\t-%\t-%\t(3.8)%\t(0.8)%\n", "q10k_tbl_34": "\tNine Months Ended November 30\t\t\t\n(in thousands)\tHousewares\tHealth & Home\tBeauty\tTotal\nFiscal 2020 sales revenue net\t496017\t499543\t269507\t1265067\nCore business (1)\t68874\t162025\t102642\t333541\nNon-Core business (Personal Care)\t0\t0\t(9184)\t(9184)\nChange in sales revenue net\t68874\t162025\t93458\t324357\nFiscal 2021 sales revenue net\t564891\t661568\t362965\t1589424\nTotal net sales revenue growth (decline)\t13.9%\t32.4%\t34.7%\t25.6%\nCore business\t13.9%\t32.4%\t38.1%\t26.4%\nNon-Core business (Personal Care)\t-%\t-%\t(3.4)%\t(0.7)%\n", "q10k_tbl_35": "\tThree Months Ended November 30\t\t\t\n(in thousands)\t2020\t2019\t Change\t% Change\nLeadership Brand sales revenue net (1)\t508210\t379604\t128606\t33.9%\nAll other sales revenue net\t129527\t95133\t34394\t36.2%\nTotal sales revenue net\t637737\t474737\t163000\t34.3%\n", "q10k_tbl_36": "\tNine Months Ended November 30\t\t\t\n(in thousands)\t2020\t2019\t Change\t% Change\nLeadership Brand sales revenue net (1)\t1288614\t1012346\t276268\t27.3%\nAll other sales revenue net\t300810\t252721\t48089\t19.0%\nTotal sales revenue net\t1589424\t1265067\t324357\t25.6%\n", "q10k_tbl_37": "\tThree Months Ended November 30 2020\t\t\t\t\t\t\t\n(In thousands)\tHousewares\t\tHealth & Home\t\tBeauty\t\tTotal\t\nOperating income as reported (GAAP)\t37658\t16.9%\t30478\t12.2%\t32573\t19.7%\t100709\t15.8%\nRestructuring charges\t(12)\t-%\t0\t-%\t0\t-%\t(12)\t-%\nSubtotal\t37646\t16.9%\t30478\t12.2%\t32573\t19.7%\t100697\t15.8%\nAmortization of intangible assets\t523\t0.2%\t2454\t1.0%\t1524\t1.0%\t4501\t0.7%\nNon-cash share-based compensation\t2712\t1.2%\t2359\t0.9%\t1668\t1.0%\t6739\t1.1%\nAdjusted operating income (non-GAAP)\t40881\t18.4%\t35291\t14.1%\t35765\t21.7%\t111937\t17.6%\n", "q10k_tbl_38": "\tThree Months Ended November 30 2019\t\t\t\t\t\t\t\n(In thousands)\tHousewares\t\tHealth & Home\t\tBeauty\t\tTotal\t\nOperating income as reported (GAAP)\t42272\t23.1%\t24372\t13.1%\t12625\t11.9%\t79269\t16.7%\nAcquisition-related expenses\t0\t-%\t0\t-%\t1475\t1.4%\t1475\t0.3%\nRestructuring charges\t0\t-%\t0\t-%\t12\t-%\t12\t-%\nSubtotal\t42272\t23.1%\t24372\t13.1%\t14112\t13.3%\t80756\t17.0%\nAmortization of intangible assets\t815\t0.4%\t2492\t1.3%\t1483\t1.4%\t4790\t1.0%\nNon-cash share-based compensation\t1510\t0.8%\t1946\t1.0%\t1302\t1.2%\t4758\t1.0%\nAdjusted operating income (non-GAAP)\t44597\t24.3%\t28810\t15.5%\t16897\t16.0%\t90304\t19.0%\n", "q10k_tbl_39": "\tNine Months Ended November 30 2020\t\t\t\t\t\t\t\n(In thousands)\tHousewares\t\tHealth & Home\t\tBeauty\t\tTotal\t\nOperating income as reported (GAAP)\t106294\t18.8%\t95782\t14.5%\t54887\t15.1%\t256963\t16.2%\nRestructuring charges\t251\t-%\t0\t-%\t104\t-%\t355\t-%\nSubtotal\t106545\t18.9%\t95782\t14.5%\t54991\t15.2%\t257318\t16.2%\nAmortization of intangible assets\t1541\t0.3%\t7415\t1.1%\t4571\t1.3%\t13527\t0.9%\nNon-cash share-based compensation\t8024\t1.4%\t7166\t1.1%\t5464\t1.5%\t20654\t1.3%\nAdjusted operating income (non-GAAP)\t116110\t20.6%\t110363\t16.7%\t65026\t17.9%\t291499\t18.3%\n", "q10k_tbl_40": "\tNine Months Ended November 30 2019\t\t\t\t\t\t\t\n(In thousands)\tHousewares\t\tHealth & Home\t\tBeauty\t\tTotal\t\nOperating income as reported (GAAP)\t109170\t22.0%\t51836\t10.4%\t19990\t7.4%\t180996\t14.3%\nAcquisition-related expenses\t0\t-%\t0\t-%\t1475\t0.5%\t1475\t0.1%\nRestructuring charges\t90\t-%\t0\t-%\t971\t0.4%\t1061\t0.1%\nSubtotal\t109260\t22.0%\t51836\t10.4%\t22436\t8.3%\t183532\t14.5%\nAmortization of intangible assets\t1512\t0.3%\t8088\t1.6%\t3529\t1.3%\t13129\t1.0%\nNon-cash share-based compensation\t5853\t1.2%\t7839\t1.6%\t5051\t1.9%\t18743\t1.5%\nAdjusted operating income (non-GAAP)\t116625\t23.5%\t67763\t13.6%\t31016\t11.5%\t215404\t17.0%\n", "q10k_tbl_41": "\tThree Months Ended November 30 2020\t\t\t\t\t\n\tIncome\t\t\tDiluted EPS\t\t\n(in thousands except per share data)\tBefore Tax\tTax\tNet of Tax\tBefore Tax\tTax\tNet of Tax\nAs reported (GAAP)\t97876\t13721\t84155\t3.89\t0.55\t3.34\nRestructuring charges\t(12)\t0\t(12)\t0\t0\t0\nSubtotal\t97864\t13721\t84143\t3.89\t0.55\t3.34\nAmortization of intangible assets\t4501\t204\t4297\t0.18\t0.01\t0.17\nNon-cash share-based compensation\t6739\t403\t6336\t0.27\t0.02\t0.25\nAdjusted (non-GAAP)\t109104\t14328\t94776\t4.33\t0.57\t3.76\nWeighted average shares of common stock used in computing diluted EPS\t\t\t\t\t\t25192\n", "q10k_tbl_42": "\tThree Months Ended November 30 2019\t\t\t\t\t\n\tIncome\t\t\tDiluted EPS\t\t\n(in thousands except per share data)\tBefore Tax\tTax\tNet of Tax\tBefore Tax\tTax\tNet of Tax\nAs reported (GAAP)\t76594\t7895\t68699\t3.02\t0.31\t2.71\nAcquisition-related expenses\t1475\t22\t1453\t0.06\t0\t0.06\nRestructuring charges\t12\t0\t12\t0\t0\t0\nSubtotal\t78081\t7917\t70164\t3.07\t0.31\t2.76\nAmortization of intangible assets\t4790\t252\t4538\t0.19\t0.01\t0.18\nNon-cash share-based compensation\t4758\t343\t4415\t0.19\t0.01\t0.17\nAdjusted (non-GAAP)\t87629\t8512\t79117\t3.45\t0.34\t3.12\nWeighted average shares of common stock used in computing diluted EPS\t\t\t\t\t\t25396\n", "q10k_tbl_43": "\tNine Months Ended November 30 2020\t\t\t\t\t\n\tIncome\t\t\tDiluted EPS\t\t\n(in thousands except per share data)\tBefore Tax\tTax\tNet of Tax\tBefore Tax\tTax\tNet of Tax\nAs reported (GAAP)\t247835\t16061\t231774\t9.78\t0.63\t9.14\nRestructuring charges\t355\t2\t353\t0.01\t0\t0.01\nTax Reform\t0\t9357\t(9357)\t0\t0.37\t(0.37)\nSubtotal\t248190\t25420\t222770\t9.79\t1.00\t8.79\nAmortization of intangible assets\t13527\t651\t12876\t0.53\t0.03\t0.51\nNon-cash share-based compensation\t20654\t1406\t19248\t0.82\t0.06\t0.76\nAdjusted (non-GAAP)\t282371\t27477\t254894\t11.14\t1.08\t10.05\nWeighted average shares of common stock used in computing diluted EPS\t\t\t\t\t\t25350\n", "q10k_tbl_44": "\tNine Months Ended November 30 2019\t\t\t\t\t\n\tIncome\t\t\tDiluted EPS\t\t\n(in thousands except per share data)\tBefore Tax\tTax\tNet of Tax\tBefore Tax\tTax\tNet of Tax\nAs reported (GAAP)\t172018\t16530\t155488\t6.80\t0.65\t6.15\nAcquisition-related expenses\t1475\t22\t1453\t0.06\t0\t0.06\nRestructuring charges\t1061\t68\t993\t0.04\t0\t0.04\nSubtotal\t174554\t16620\t157934\t6.90\t0.66\t6.24\nAmortization of intangible assets\t13129\t621\t12508\t0.52\t0.02\t0.49\nNon-cash share-based compensation\t18743\t1434\t17309\t0.74\t0.06\t0.68\nAdjusted (non-GAAP)\t206426\t18675\t187751\t8.16\t0.74\t7.42\nWeighted average shares of common stock used in computing diluted EPS\t\t\t\t\t\t25295\n", "q10k_tbl_45": "\tNine Months Ended November 30\t\n\t2020\t2019\nAccounts Receivable Turnover (Days) (1)\t70.0\t68.9\nInventory Turnover (Times) (1)\t3.6\t2.9\nWorking Capital (in thousands)\t491563\t411340\nCurrent Ratio\t1.8:1\t2.3:1\nEnding Debt to Ending Equity Ratio\t36.4%\t21.0%\nReturn on Average Equity (1)\t18.9%\t18.2%\n", "q10k_tbl_46": "Applicable Financial Covenant\tCredit Agreement and MBFC Loan\nMinimum Interest Coverage Ratio\tEBIT (1) ÷ Interest Expense (1)\nMinimum Required: 3.00 to 1.00\nMaximum Leverage Ratio\tTotal Current and Long Term Debt (2) ÷\nEBITDA (1) + Pro Forma Effect of Transactions\nMaximum Currently Allowed: 3.50 to 1.00 (3)\n", "q10k_tbl_47": "Period\tTotal Number of Shares Purchased (1)\tAverage Price Paid per Share\tTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs\tMaximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands) (2)\nSeptember 1 to September 30 2020\t5710\t194.97\t5710\t381706\nOctober 1 to October 31 2020\t746276\t201.07\t746276\t231651\nNovember 1 to November 30 2020\t214958\t193.68\t214958\t190019\nTotal\t966944\t199.39\t966944\t\n", "q10k_tbl_48": "ITEM 6.\tEXHIBITS\t\t\t\n\t\t(a)\tExhibits\t\n\t\t\t31.1*\tCertification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n\t\t\t31.2*\tCertification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n\t\t\t32**\tJoint certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n\t\t\t101\tFinancial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended November 30 2020 formatted in Inline eXtensible Business Reporting Language (\"iXBRL\"): (i) Condensed Consolidated Balance Sheet (ii) Condensed Consolidated Statements of Income (iii) Condensed Consolidated Statements of Comprehensive Income (iv) Condensed Consolidated Statements of Stockholders' Equity (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to the Condensed Consolidated Financial Statements.\n\t\t\t104\tCover Page Interactive Data File formatted in iXBRL and contained in Exhibit 101.\n\t\t\t* Filed herewith.\t\n\t\t\t** Furnished herewith.\t\n"}{"bs": "q10k_tbl_1", "is": "q10k_tbl_2", "cf": "q10k_tbl_5"}None
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2020
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)
Bermuda74-2692550
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
Clarendon House, 2 Church Street, Hamilton, Bermuda
(Address of principal executive offices)
1 Helen of Troy Plaza, El Paso, Texas79912
(Registrant’s United States Mailing Address) (Zip Code)
(915) 225-8000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Shares, $0.10 par value per share
HELE
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of December 29, 2020, there were 24,395,784 common shares, $0.10 par value per share, outstanding.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
November 30, 2020
Note 1 - Basis of Presentation and Related Information
The accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our consolidated financial position as of November 30, 2020 and February 29, 2020, and the results of our consolidated operations for the interim periods presented. We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data. These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual report on Form 10-K for the fiscal year ended February 29, 2020, and our other reports on file with the Securities and Exchange Commission (“SEC”).
When used in these notes, unless otherwise indicated or the context suggests otherwise, references to “the Company”, “our Company”, “Helen of Troy”, “we”, “us”, or “our” refer to Helen of Troy Limited and its subsidiaries. We refer to our common shares, par value $0.10 per share, as “common stock.” References to the “FASB” refer to the Financial Accounting Standards Board. References to “GAAP” refer to United States (“U.S.”) Generally Accepted Accounting Principles. References to “ASU” refer to the codification of GAAP in the Accounting Standards Updates issued by the FASB. References to “ASC” refer to the codification of GAAP in the Accounting Standards Codification issued by the FASB.
We incorporated as Helen of Troy Corporation in Texas in 1968 and were reorganized as Helen of Troy Limited in Bermuda in 1994. We are a global designer, developer, importer, marketer, and distributor of an expanding portfolio of brand-name consumer products. We have three segments: Housewares, Health & Home, and Beauty. Our Housewares segment provides a broad range of innovative consumer products for the home and on the go. Product offerings include food preparation tools and storage containers; cleaning, bath and garden tools and accessories; infant and toddler care products; and insulated beverage, food containers and coolers. The Health & Home segment focuses on health care devices such as thermometers, humidifiers, blood pressure monitors, and heating pads; water filtration systems; and small home appliances such as portable heaters, fans, and air purifiers. Our Beauty segment products include electric hair care, beauty care and wellness appliances; grooming tools and accessories; and liquid-, solid- and powder-based personal care and grooming products.
Our business is seasonal due to different calendar events, holidays and seasonal weather patterns. Historically, our highest sales volume and operating income occur in our third fiscal quarter ending November 30th. We purchase our products from unaffiliated manufacturers, most of which are located in China, Mexico and the United States.
On January 23, 2020, we completed the acquisition of Drybar Products LLC (“Drybar Products”), for approximately $255.9 million in cash, subject to certain customary closing adjustments. Drybar Products is an innovative, trend-setting prestige hair care and styling brand. As part of the transaction, Helen of Troy granted a worldwide license to Drybar Holdings LLC, the owner and long-time operator of Drybar blowout salons, to use the Drybar trademark in their continued operation of Drybar salons. The salons will exclusively use, promote, and sell Drybar products globally. See Note 7 for additional information on the acquisition.
During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our mass channel personal care business (“Personal Care”). The assets to be disposed of include intangible assets, inventory and fixed assets relating to our mass channel liquids, powder and aerosol products including brands such as Pert, Brut, Sure and Infusium. We expect the divestiture to occur within fiscal
2021. Accordingly, we have classified the identified assets of the disposal group as held for sale. For additional information, see Note 5.
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) to be a pandemic. COVID-19 continues to spread throughout the United States and the world, with the continued potential for catastrophic impact. The effects of the COVID-19 pandemic have had an unfavorable impact on certain parts of our business. The impact includes the effect of temporary closures of certain customer stores, or limited hours of operation, which has resulted in materially lower store traffic at some of our brick and mortar retailers. The economic impact of historic unemployment and consumer uncertainty has also resulted in reduced demand for some of our more discretionary product lines. COVID-19 has also disrupted certain parts of our supply chain, which in certain cases has limited our ability to fulfill demand. COVID-19 has favorably impacted the demand for our product lines that are more defensive, meet certain healthcare or healthy living needs, or meet the needs of consumers that are spending more time at home as a result of the pandemic. COVID-19 has also favorably impacted our online channel in a meaningful way, as brick and mortar shopping options have been limited or considered unsafe. Although the favorable impacts of COVID-19 outweighed the unfavorable impacts during the nine month period ended November 30, 2020, this situation continues to change rapidly, and additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today. Accordingly, our liquidity and financial results could be impacted in ways that we are not able to predict today.
Our condensed consolidated financial statements are prepared in U.S. Dollars. All intercompany accounts and transactions are eliminated in consolidation.
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. The severity, duration and the economic consequences of COVID-19 are uncertain, evolving and difficult to predict. Therefore, our estimates and assumptions may change materially in future periods in response to COVID-19. Actual results may differ materially from those estimates.
We have reclassified, combined or separately disclosed certain amounts in the prior years’ condensed consolidated financial statements and accompanying footnotes to conform with the current period’s presentation.
Note 2 - New Accounting Pronouncements
Except for the changes discussed below, there have been no changes in the information provided in our Form 10-K for the fiscal year ended February 29, 2020.
Not Yet Adopted
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which provides for certain updates to reduce complexity in accounting for income taxes, including the utilization of the incremental approach for intra-period tax allocation, among others. The amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and will be effective for us in the first quarter of fiscal 2022. We are currently evaluating the impact this guidance may have on our consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting and other transactions affected by reference rate reform to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU was effective upon issuance, on March 12, 2020, and may be applied through December 31, 2022. The adoption of this ASU did not have a material impact on our consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (with subsequent targeted amendments), which modifies the measurements of expected credit losses for certain financial instruments and financial assets, including trade receivables. This ASU was effective for us in the first quarter of fiscal 2021, and the adoption of this ASU did not have a material impact on our consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. Certain disclosures in ASU 2018-13 would need to be applied on a retrospective basis and others on a prospective basis. This ASU was effective for us in the first quarter of fiscal 2021, and the adoption of this ASU did not have a material impact on our consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU was effective for us in the first quarter of fiscal 2021, and the adoption of this ASU did not have a material impact on our consolidated financial statements.
Note 3 - Revenue Recognition
We adopted the provisions of ASU 2014-09 in the first quarter of fiscal 2019, and we elected to adopt the standard using the retrospective method. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Our revenue is primarily generated from the sale of non-customized consumer products to customers. These products are promised goods that are distinct performance obligations. Revenue is recognized when control of, and title to, the product sold transfers to the customer in accordance with applicable shipping terms, which can occur on the date of shipment or the date of receipt by the customer, depending on the customer and the agreed upon shipping terms. Payment terms from the sale of our products are typically due to us in thirty to ninety days after the date of sale. Therefore, the timing and amount of revenue recognized was not materially impacted by the new guidance. We have thus concluded that the adoption of the guidance did not have a material impact on our consolidated financial statements. The provisions of the new guidance did, however, impact the classification of certain consideration paid to our customers. We therefore have reclassified an immaterial amount of such payments from SG&A to a reduction of net sales revenue for all periods presented. Also, in accordance
with the guidance, we reclassified an immaterial amount of estimated sales returns from a reduction of receivables to accrued expenses and other current liabilities for all periods presented. We elected to adopt the guidance using the full retrospective method.
We measure revenue as the amount of consideration for which we expect to be entitled, in exchange for transferring goods. Certain customers may receive cash incentives such as customer discounts (including volume or trade discounts), advertising discounts and other customer-related programs which are accounted for as variable consideration. In some cases, we apply judgment, such as contractual rates and historical payment trends, when estimating variable consideration. In accordance with the guidance, most variable consideration is classified as a reduction to net sales.
Sales taxes and other similar taxes are excluded from revenue. We elected to account for shipping and handling activities as a fulfillment cost as permitted by the guidance. We do not have unsatisfied performance obligations since our performance obligations are satisfied at a single point in time.
Note 4 - Leases
Adoption of the new lease standard resulted in the recording of lease assets and lease liabilities of approximately $37.1 million and $47.2 million, respectively, as of March 1, 2019. The difference between the lease assets and lease liabilities primarily relates to unamortized lease incentives and deferred rent recorded in accordance with the previous lease guidance. The new standard did not materially impact our consolidated statements of income or cash flows.
We primarily have leases for office space, which are classified as operating leases. Operating leases are included in operating lease assets, accrued expenses and other current liabilities, and lease liabilities, non-current in our consolidated balance sheets. Operating lease assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As most of our lease contracts do not provide an explicit interest rate, we use an estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
We include options to extend or terminate the lease in the lease term for accounting considerations, when it is reasonably certain that we will exercise that option. Our leases have remaining lease terms of less than 1 to 12 years. Lease expense for lease payments is recognized on a straight-line basis over the lease term in a manner similar to previous accounting guidance. We do not recognize leases with an initial term of twelve months or less on the balance sheet and instead recognize the related lease payments as expense in the condensed consolidated statements of income on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component for all asset classes. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease expense recognized in the condensed consolidated statements of income during the three and nine month periods ended November 30, 2020, was $1.8 millionand$5.0 million, respectively, compared to $1.5 million and $4.8 million, respectively, for the same periods last year. Short-term lease expense is excluded from this amount and is not material. For the three and nine month periods ended November 30, 2020, rent expense related to all our operating leases was $2.4 million and $6.6 million, respectively, compared to $2.1 million and $5.8 million for the same periods last year. The non-cash component of lease expense is included as an adjustment to reconcile net income to net cash provided by operating activities in the condensed consolidated statements of cash flows.
A summary of supplemental lease information is as follows:
November 30, 2020
Weighted average remaining lease term (years)
10.0
Weighted average discount rate
6.10%
Year-to-date cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)
$
4,998
A summary of our estimated lease payments, imputed interest and liabilities as of November 30, 2020 are as follows:
(in thousands)
Fiscal 2021 (balance for remainder of fiscal year)
$
1,826
Fiscal 2022
7,128
Fiscal 2023
6,123
Fiscal 2024
5,332
Fiscal 2025
5,762
Thereafter
34,370
Total future lease payments
60,541
Less: imputed interest
(16,492)
Present value of lease liability
$
44,049
November 30, 2020
Lease liabilities, current (1)
$
4,770
Lease liabilities, non-current
39,279
Total lease liability
$
44,049
(1)Included as part of “Accrued expenses and other current liabilities” on the condensed consolidated balance sheet.
Note 5 - Assets Held for Sale
During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within Personal Care. The assets to be disposed of include intangible assets, inventory and fixed assets relating to our mass channel liquids, powder and aerosol products under brands such as Pert, Brut, Sure and Infusium. We expect the divestiture to occur within fiscal 2021 and have classified the identified assets of the disposal group as held for sale. The business is currently being marketed and the process is ongoing.
The carrying amounts of the major classes of assets for Personal Care that were classified as held for sale are as follows:
(in thousands)
November 30, 2020
February 29, 2020
Assets:
Inventory
$
11,650
$
17,150
Property and equipment, net of accumulated depreciation of $403
83
83
Goodwill, net of cumulative impairments of $71,993
9,849
9,849
Other intangible assets, net of accumulated amortization of $4,474