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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2022
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
hele-20220831_g1.jpg
HELEN OF TROY LIMITED
(Exact name of registrant as specified in its charter)
Bermuda 74-2692550
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Clarendon House
2 Church Street
Hamilton, Bermuda
(Address of principal executive offices)
1 Helen of Troy Plaza
El Paso, Texas 79912
(Registrant's United States Mailing Address) (Zip Code)
(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 September 29, 2022, there were 23,990,074 common shares, $0.10 par value per share, outstanding.

HELEN OF TROY LIMITED AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
  PAGE 
   
 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
   
   
   
   
 
   
   
   
   
   
1
PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

HELEN OF TROY LIMITED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except shares and par value)August 31, 2022February 28, 2022
Assets  
Assets, current:  
Cash and cash equivalents$39,650 $33,381 
Receivables - principally trade, less allowances of $1,718 and $843
507,261 457,623 
Inventory643,192 557,992 
Prepaid expenses and other current assets34,647 25,712 
Income taxes receivable13,066 5,430 
Assets held for sale— 1,942 
Total assets, current1,237,816 1,082,080 
Property and equipment, net of accumulated depreciation of $173,614 and $161,006
306,340 205,378 
Goodwill1,065,214 948,873 
Other intangible assets, net of accumulated amortization of $159,261 and $150,309
562,751 537,846 
Operating lease assets40,940 37,759 
Deferred tax assets, net2,657 3,628 
Other assets9,490 7,887 
Total assets$3,225,208 $2,823,451 
Liabilities and Stockholders' Equity  
Liabilities, current:  
Accounts payable, principally trade$311,622 $308,178 
Accrued expenses and other current liabilities235,133 271,675 
Income taxes payable15,484 20,718 
Long-term debt, current maturities20,872 1,884 
Liabilities held for sale— 235 
Total liabilities, current583,111 602,690 
Long-term debt, excluding current maturities1,148,870 811,332 
Lease liabilities, non-current45,630 43,745 
Deferred tax liabilities, net34,643 21,582 
Other liabilities, non-current14,608 16,763 
Total liabilities1,826,862 1,496,112 
Commitments and contingencies
Stockholders' equity:  
Cumulative preferred stock, non-voting, $1.00 par. Authorized 2,000,000 shares; none issued
— — 
Common stock, $0.10 par. Authorized 50,000,000 shares; 23,968,992 and 23,800,305 shares issued and outstanding
2,397 2,380 
Additional paid in capital 312,567 303,740 
Accumulated other comprehensive income
7,200 202 
Retained earnings1,076,182 1,021,017 
Total stockholders' equity1,398,346 1,327,339 
Total liabilities and stockholders' equity$3,225,208 $2,823,451 
See accompanying notes to condensed consolidated financial statements.
2
HELEN OF TROY LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited) 

 Three Months Ended August 31,Six Months Ended August 31,
(in thousands, except per share data)2022202120222021
Sales revenue, net$521,400 $475,228 $1,029,478 $1,016,451 
Cost of goods sold299,954 264,640 596,861 585,271 
Gross profit221,446 210,588 432,617 431,180 
Selling, general and administrative expense (“SG&A”)
169,724 142,928 346,954 298,679 
Restructuring charges4,776 369 4,778 375 
Operating income46,946 67,291 80,885 132,126 
Non-operating income, net113 31 180 133 
Interest expense9,166 3,307 13,539 6,302 
Income before income tax37,893 64,015 67,526 125,957 
Income tax expense7,221 12,700 12,259 17,670 
Net income$30,672 $51,315 $55,267 $108,287 
Earnings per share (“EPS”):
  
Basic$1.28 $2.13 $2.31 $4.47 
Diluted 1.28 2.11 2.29 4.42 
Weighted average shares used in computing EPS:  
Basic23,969 24,101 23,917 24,225 
Diluted24,056 24,347 24,089 24,492 

See accompanying notes to condensed consolidated financial statements.
3
HELEN OF TROY LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited) 

 Three Months Ended August 31,Six Months Ended August 31,
(in thousands)2022202120222021
Net income$30,672 $51,315 $55,267 $108,287 
Other comprehensive income, net of tax:
Cash flow hedge activity - interest rate swaps1,301 1,079 3,507 1,836 
Cash flow hedge activity - foreign currency contracts2,538 5,163 3,491 3,609 
Total other comprehensive income, net of tax3,839 6,242 6,998 5,445 
Comprehensive income$34,511 $57,557 $62,265 $113,732 

See accompanying notes to condensed consolidated financial statements.
4
HELEN OF TROY LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Common StockAdditional Paid in CapitalAccumulated Other Comprehensive (Loss) IncomeRetained EarningsTotal Stockholders' Equity
(in thousands, including shares) SharesPar
Value
Balances at February 28, 202124,406 $2,441 $283,396 $(11,656)$965,166 $1,239,347 
Net income— — — — 56,972 56,972 
Other comprehensive loss, net of tax— — — (797)— (797)
Exercise of stock options4 — 275 — — 275 
Issuance and settlement of restricted stock177 18 (18)— — — 
Issuance of common stock related to stock purchase plan13 1 2,337 — — 2,338 
Common stock repurchased and retired(502)(50)(16,616)— (93,408)(110,074)
Share-based compensation— — 14,020 — — 14,020 
Balances at May 31, 202124,098 $2,410 $283,394 $(12,453)$928,730 $1,202,081 
Net income— — — — 51,315 51,315 
Other comprehensive income, net of tax— — — 6,242 — 6,242 
Exercise of stock options6 1 519 — — 520 
Issuance and settlement of restricted stock2 — — — — — 
Common stock repurchased and retired(1)— (104)— (12)(116)
Share-based compensation— — 7,780 — — 7,780 
Balances at August 31, 202124,105 $2,411 $291,589 $(6,211)$980,033 $1,267,822 

Balances at February 28, 202223,800 $2,380 $303,740 $202 $1,021,017 $1,327,339 
Net income— — — — 24,595 24,595 
Other comprehensive income, net of tax— — — 3,159 — 3,159 
Exercise of stock options8 1 658 — — 659 
Issuance and settlement of restricted stock235 24 (24)— — — 
Issuance of common stock related to stock purchase plan13 1 2,274 — — 2,275 
Common stock repurchased and retired(89)(9)(18,113)— (102)(18,224)
Share-based compensation— — 16,619 — — 16,619 
Balances at May 31, 202223,967 $2,397 $305,154 $3,361 $1,045,510 $1,356,422 
Net income— — — — 30,672 30,672 
Other comprehensive income, net of tax— — — 3,839 — 3,839 
Issuance and settlement of restricted stock2 — (1)— — (1)
Common stock repurchased and retired— — (81)— — (81)
Share-based compensation— — 7,495 — — 7,495 
Balances at August 31, 202223,969 $2,397 $312,567 $7,200 $1,076,182 $1,398,346 

See accompanying notes to condensed consolidated financial statements.





5
HELEN OF TROY LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
 Six Months Ended August 31,
(in thousands)20222021
Cash used by operating activities:  
Net income$55,267 $108,287 
Adjustments to reconcile net income to net cash used by operating activities:  
Depreciation and amortization21,617 17,441 
Amortization of financing costs512 489 
Non-cash operating lease expense5,186 4,434 
Provision for credit losses 963 510 
Non-cash share-based compensation24,114 21,800 
Gain on sale of Personal Care business(1,336)(513)
Gain on the sale or disposal of property and equipment(20)(1,640)
Deferred income taxes and tax credits3,977 (8,207)
Changes in operating capital, net of effects of acquisitions of businesses:  
Receivables(46,754)(62,604)
Inventory(77,348)(124,506)
Prepaid expenses and other current assets575 (4,982)
Other assets and liabilities, net(2,040)(4,545)
Accounts payable3,333 6,080 
Accrued expenses and other current liabilities(43,767)(26,414)
Accrued income taxes(19,731)16,032 
Net cash used by operating activities
(75,452)(58,338)
Cash (used) provided by investing activities:  
Capital and intangible asset expenditures(112,635)(23,954)
Net payments to acquire businesses, net of cash acquired(148,111)— 
Proceeds from sale of Personal Care business1,804 44,700 
Proceeds from the sale of property and equipment20 3,208 
Net cash (used) provided by investing activities(258,922)23,954 
Cash provided by financing activities:  
Proceeds from revolving loans573,500 342,500 
Repayment of line of credit(465,000)(212,500)
Proceeds from term loans250,000 — 
Repayment of long-term debt(1,900)(1,900)
Payment of financing costs(586)— 
Proceeds from share issuances under share-based compensation plans2,934 3,133 
Payments for repurchases of common stock(18,305)(110,190)
Net cash provided by financing activities
340,643 21,043 
Net increase (decrease) in cash and cash equivalents
6,269 (13,341)
Cash and cash equivalents, beginning balance33,381 45,120 
Cash and cash equivalents, ending balance$39,650 $31,779 
Supplemental non-cash investing activity:
Capital expenditures included in accounts payable$8,484 $2,927 

See accompanying notes to condensed consolidated financial statements.
6
HELEN OF TROY LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
August 31, 2022

Note 1 - Basis of Presentation and Related Information

Corporate Overview

The accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our consolidated financial position as of August 31, 2022 and February 28, 2022, 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 28, 2022 (“Form 10-K”), and our other reports on file with the Securities and Exchange Commission (the “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, which are all wholly-owned. 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 accounting principles generally accepted in the United States of America (the “U.S.”). 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 leading consumer products company offering creative products and solutions for our customers through a diversified portfolio of brands. As of August 31, 2022, we operated three segments: Home & Outdoor, Health & Wellness, and Beauty. Our Home & Outdoor segment provides a broad range of innovative consumer products for home activities such as food preparation, cooking, cleaning and organization, as well as products for outdoor and on the go activities such as hydration, food storage, backpacks, and travel gear. The Health & Wellness segment provides health and wellness products including healthcare devices, thermometers, water and air filtration systems, humidifiers, and fans. Our Beauty segment provides mass and prestige market beauty appliances including hair styling appliances, grooming tools, decorative hair accessories, and prestige market liquid-based hair and personal care products.

Our business is seasonal due to different calendar events, holidays and seasonal weather patterns. Our fiscal reporting period ends on the last day in February. 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, Vietnam and the U.S.

During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Beauty segment's mass channel personal care business, which included liquid, powder and aerosol products under brands such as Pert, Brut, Sure and Infusium (“Personal Care”). On June 7, 2021, we completed the sale of our North America Personal Care business to HRB Brands LLC, for $44.7 million in cash and recognized a gain on the sale in SG&A totaling $0.5 million. On March 25, 2022, we completed the sale of the Latin America and Caribbean Personal Care business to HRB Brands LLC, for $1.8 million in cash and recognized a gain on the sale in SG&A totaling $1.3 million. See Note 3 for additional information.

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On April 22, 2022, we completed the acquisition of Recipe Products Ltd., a producer of innovative prestige hair care products for all types of curly and wavy hair under the Curlsmith brand (“Curlsmith”). The total purchase consideration was $149.7 million in cash, net of a preliminary closing net working capital adjustment and cash acquired. See Note 4 for additional information.

On December 29, 2021, we completed the acquisition of Osprey Packs, Inc. (“Osprey”), a longtime U.S. leader in technical and everyday packs, for $409.3 million in cash, net of a final net working capital adjustment and cash acquired. Osprey is highly respected in the outdoor industry with a product lineup that includes a wide range of backpacks and daypacks for hiking, mountaineering, skiing, climbing, mountain biking, trail running, commuting, and school, as well as rugged adventure travel packs, wheeled luggage, and travel accessories. See Note 4 for additional information.

Macroeconomic trends and the COVID-19 pandemic have adversely impacted our business in the first and second quarters of fiscal 2023. In response to rising inflation, the Federal Open Market Committee has been raising interest rates, and has stated it intends to continue to raise rates throughout the remainder of 2022 and possibly into 2023. As a result, we incurred higher average interest rates compared to the same period last year, and we expect this trend to continue throughout fiscal year 2023. While the actual timing and extent of the future increases in interest rates remains unknown, higher long-term interest rates are expected to significantly increase interest expense on our outstanding debt. High inflation and interest rates have also negatively impacted consumer disposable income, credit availability and spending, among others things, and may continue to have an adverse impact throughout fiscal year 2023. Surges in demand and shifts in shopping patterns related to COVID-19, as well as other factors, have strained the global freight network, which has resulted in higher costs, less capacity, component part and raw material shortages, and longer lead times. The extent of COVID-19’s impact on the demand for certain of our product lines in the future will depend on continuing future developments, including any new variants and surges in the spread of COVID-19, our continued ability to source and distribute our products, the impact of COVID-19 on capital and financial markets, and the related impact on consumer confidence and spending, all of which are uncertain and difficult to predict considering the continuously evolving landscape. Accordingly, our liquidity and financial results could be impacted in ways that we are not able to predict today.

Principles of Consolidation

The accompanying condensed consolidated financial statements are prepared in accordance with GAAP and include all of our subsidiaries. Our condensed consolidated financial statements are prepared in U.S. Dollars. All intercompany balances and transactions are eliminated in consolidation.

The preparation of consolidated 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. Actual results may differ materially from those estimates.

Note 2 - New Accounting Pronouncements

There have been no changes in the information provided in our Form 10-K.

Note 3 - Assets and Liabilities Held for Sale

During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Personal Care business and accordingly, we classified the identified net assets of the disposal group as held for sale. On June 7, 2021, we completed the sale of our North America Personal Care business to HRB Brands LLC, for $44.7 million in cash and recognized a gain on the sale in SG&A totaling $0.5 million. On March 25, 2022, we completed the sale of the Latin America and Caribbean Personal
8
Care business to HRB Brands LLC, for $1.8 million in cash and recognized a gain on the sale in SG&A totaling $1.3 million. The net assets sold included intangible assets, inventory, certain net trade receivables, fixed assets and certain accrued sales discounts and allowances relating to our Personal Care business. As a result of these dispositions, we no longer have any assets or liabilities classified as held for sale.

The carrying amounts of the major classes of assets and liabilities for our Personal Care business that were classified as held for sale were as follows:
(in thousands)February 28, 2022
Receivables, net of allowance of $23
$1,265 
Inventory611 
Property and equipment, net of accumulated depreciation of $152
66 
  Assets held for sale$1,942 
Accrued sales discounts and allowances$235 
  Liabilities held for sale$235 

Note 4 - Acquisitions

Curlsmith

On April 22, 2022, we completed the acquisition of Recipe Products Ltd., a producer of innovative prestige hair care products for all types of curly and wavy hair under the Curlsmith brand. Curlsmith's products are a category leader in the market for prestige haircare products for curly hair and include conditioners, shampoos and co-washes purposefully designed for the unique joys and challenges of all types of curls and textured hair. The Curlsmith brand and products were added to the Beauty segment. The total purchase consideration was $149.7 million in cash, net of a preliminary closing net working capital adjustment of $0.3 million and cash acquired. The acquisition was funded with cash on hand and borrowings under our existing revolving credit facility. We incurred pre-tax acquisition-related expenses of $2.7 million during the six months ended August 31, 2022, which were recognized in SG&A within our condensed consolidated statement of income.

We accounted for the acquisition as a purchase of a business and recorded the excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed as goodwill. The goodwill recognized is attributable primarily to expected synergies including leveraging our Beauty segment's existing marketing and sales structure, as well as our global sourcing, distribution, shared service, and international go-to-market capabilities. The goodwill is not expected to be deductible for income tax purposes. We have provisionally determined the appropriate fair values of the acquired intangible assets and completed our analysis of the economic lives of the assets acquired. We assigned $21.0 million to trade names and are amortizing over a 20 year expected life. We assigned $12.0 million to customer relationships and are amortizing over a 19.5 year expected life, based on historical attrition rates.

During the second quarter of fiscal 2023, we made adjustments to provisional asset and liability balances, which resulted in a corresponding net increase to goodwill of $0.1 million.

9
The following table presents the preliminary estimated fair values of assets acquired and liabilities assumed at the acquisition date:
 (in thousands)
Assets: 
Receivables$4,211 
Inventory7,890 
Prepaid expenses and other current assets119 
Property and equipment212 
Goodwill118,613 
Trade names - definite21,000 
Customer relationships - definite12,000 
Deferred tax assets, net360 
Total assets164,405 
Liabilities:
Accounts payable1,401 
Accrued expenses and other current liabilities2,583 
Income taxes payable2,538 
Deferred tax liabilities, net8,187 
Total liabilities14,709 
Net assets recorded$149,696 

Both the fair value and gross contractual amount of receivables acquired was $4.2 million, as an immaterial amount is expected to be uncollectible.

The impact of the acquisition of Curlsmith on our condensed consolidated statements of income for the periods presented was as follows:


(in thousands, except earnings per share data)		Three Months Ended
August 31, 2022		Six Months Ended
August 31, 2022 (1)
Sales revenue, net$10,207 $13,453 
Net income1,437 1,876 
EPS:
Basic$0.06 $0.08 
Diluted$0.06 $0.08 
(1)Represents approximately nineteen weeks of operating results from Curlsmith, acquired on April 22, 2022.

The following supplemental unaudited pro forma information presents our financial results as if the acquisition of Curlsmith had occurred on March 1, 2021. This supplemental pro forma information has been prepared for comparative purposes and would not necessarily indicate what may have occurred if the acquisition had been completed on March 1, 2021, and this information is not intended to be indicative of future results.

Three Months Ended
August 31, 		Six Months Ended
August 31,
(in thousands, except earnings per share data)2022202120222021
Sales revenue, net$521,400 $483,586 $1,036,570 $1,034,443 
Net income30,672 52,156 57,180 107,260 
EPS:
Basic$1.28 $2.16 $2.39 $4.43 
Diluted$1.28 $2.14 $2.37 $4.38 

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These amounts have been calculated after applying our accounting policies and adjusting the results of Curlsmith to reflect the effect of definite-lived intangible assets recognized as part of the business combination on amortization expense as if the acquisition had occurred on March 1, 2021.

Osprey

On December 29, 2021, we completed the acquisition of Osprey, a longtime U.S. leader in technical and everyday packs. Osprey is highly respected in the outdoor industry with a product lineup that includes a wide range of backpacks and daypacks for hiking, mountaineering, skiing, climbing, mountain biking, trail running, commuting, and school, as well as rugged adventure travel packs, wheeled luggage, and travel accessories. The Osprey brand and products were added to the Home & Outdoor segment. The total purchase consideration, net of cash acquired, was $409.3 million in cash, including the impact of a final $10.7 million favorable net working capital adjustment. The acquisition was funded with cash on hand and borrowings under our existing revolving credit facility. We incurred pre-tax acquisition-related expenses of $0.1 million during the six months ended August 31, 2022, which were recognized in SG&A within our condensed consolidated statement of income.

We accounted for the acquisition as a purchase of a business and recorded the excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed as goodwill. The goodwill recognized is attributable primarily to expected synergies including leveraging our information systems, shared service capabilities and international footprint. The goodwill is not expected to be deductible for income tax purposes. We have provisionally determined the appropriate fair values of the acquired intangible assets and completed our analysis of the economic lives of the assets acquired. We assigned $170.0 million to trade names which were determined to have an indefinite life. We assigned $22.0 million to customer relationships and are amortizing over a 4.5 year expected life, based on historical attrition rates.

During the first quarter of fiscal 2023, we finalized the net working capital adjustment, which resulted in a $1.6 million reduction to the total purchase consideration and we reduced the provisional accounts payable liability by $0.7 million, both with a corresponding decrease to goodwill totaling $2.3 million. During the second quarter of fiscal 2023, we made immaterial adjustments to provisional asset and liability balances, which resulted in a corresponding net increase to goodwill.

11
The following table presents the preliminary estimated fair values of assets acquired and liabilities assumed at the acquisition date:
 (in thousands)
Assets: 
Receivables$11,758 
Inventory30,056 
Prepaid expenses and other current assets3,699 
Income taxes receivable4,169 
Property and equipment11,386 
Goodwill206,699 
Trade names - indefinite170,000 
Customer relationships - definite22,000 
Operating lease assets2,155 
Total assets461,922 
Liabilities:
Accounts payable3,780 
Accrued expenses and other current liabilities7,334 
Lease liabilities, non-current 1,719 
Deferred tax liabilities, net39,794 
Total liabilities52,627 
Net assets recorded$409,295 

Note 5 - Accrued Expenses and Other Current Liabilities

A summary of accrued expenses and other current liabilities was as follows:
(in thousands)August 31, 2022February 28, 2022
Accrued compensation, benefits and payroll taxes$20,643 $55,405 
Accrued sales discounts and allowances72,380 69,120 
Accrued sales returns29,639 33,384 
Accrued advertising54,591 55,775 
Other57,880 57,991 
Total accrued expenses and other current liabilities$235,133 $271,675 

Note 6 - Share-Based Compensation Plans

As part of our compensation structure, we grant share-based compensation awards to certain employees and non-employee members of our Board of Directors during the fiscal year. These awards may be subject to attainment of certain service conditions, performance conditions and/or market conditions. During the first quarter of fiscal 2023, we granted 36,088 service condition awards (“Service Condition Awards”) with a weighted average grant date fair value of $204.11. Additionally, we granted 165,734 performance-based awards during the first quarter of fiscal 2023, of which 82,867 contained performance conditions (“Performance Condition Awards”) and 82,867 contained market conditions (“Market Condition Awards”), with weighted average grant date fair values of $204.11 and $152.91, respectively. Refer to our Form 10-K for further information on the Company's share-based compensation plans.

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We recorded share-based compensation expense in SG&A as follows:
 Three Months Ended August 31,Six Months Ended
August 31,
(in thousands)2022202120222021
Directors stock compensation$222 $163 $395 $323 
Service Condition Awards2,160 3,296 5,277 5,236 
Performance Condition Awards3,196 3,061 14,041 13,084 
Market Condition Awards1,917 1,260 3,827 2,389 
Employee stock purchase plan— — 574 768 
Share-based compensation expense7,495 7,780 24,114 21,800 
Less income tax benefits(570)(712)(1,654)(1,571)
Share-based compensation expense, net of income tax benefits$6,925 $7,068 $22,460 $20,229 

Unrecognized Share-Based Compensation Expense

As of August 31, 2022, our total unrecognized share-based compensation for all awards was $50.8 million, which will be recognized over a weighted average amortization period of 2.1 years. The total unrecognized share-based compensation reflects an estimate of target achievement for Performance Condition Awards granted during the first quarter of fiscal 2023 and fiscal 2022, and a weighted average estimate of 150% of target achievement for Performance Condition Awards granted in fiscal 2021.

Note 7 - Repurchases of Common Stock

In August 2021, our Board of Directors authorized the repurchase of up to $500 million of our outstanding common stock. The authorization became effective August 25, 2021, for a period of three years, and replaced our former repurchase authorization. As of August 31, 2022, our repurchase authorization allowed for the purchase of $403.7 million of common stock.

Our current equity-based compensation plans include provisions that allow for the “net exercise” of share-settled awards by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the option or other share-based award holders are settled by having the holder tender back to us a number of shares at fair value equal to the amounts due. Net exercises are treated as purchases and retirements of shares.

The following table summarizes our share repurchase activity for the periods shown:
 Three Months Ended August 31,Six Months Ended August 31,
(in thousands, except share and per share data)2022202120222021
Common stock repurchased on the open market: 
Number of shares— — — 436,842 
Aggregate value of shares$— $— $— $95,484 
Average price per share$— $— $— $218.58 
Common stock received in connection with share-based compensation:
Number of shares501 503 89,959 66,147 
Aggregate value of shares$81 $116 $18,305 $14,706 
Average price per share$163.28 $229.76 $203.49 $222.32 

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Note 8 - Restructuring Plan

During the second quarter of fiscal 2023, we focused on developing a global restructuring plan intended to expand operating margins through initiatives designed to improve efficiency and reduce costs (referred to as “Project Pegasus”). Project Pegasus includes initiatives to further optimize our brand portfolio, streamline and simplify the organization, accelerate cost of goods savings projects, enhance the efficiency of our supply chain network, optimize our indirect spending, and improve our cash flow and working capital, as well as other activities. We anticipate these initiatives will create operating efficiencies, as well as provide a platform to fund future growth investments.

We have the following expectations regarding Project Pegasus:
•Targeted annualized pre-tax operating profit improvements of approximately $75 million to $85 million, which we expect to begin in fiscal 2024 and be substantially achieved by the end of fiscal 2026.
•Estimated cadence of the recognition of the savings will be approximately 25% in fiscal 2024, approximately 50% in fiscal 2025 and approximately 25% in fiscal 2026.
•Total profit improvements to be realized approximately 60% through reduced cost of goods sold and 40% through lower SG&A.
•Total one-time pre-tax restructuring charges of approximately $85 million to $95 million over the duration of the plan, which is expected to be completed during fiscal 2025 and will primarily be comprised of severance and employee related costs, professional fees, contract termination costs, and other exit and disposal costs.
•All of our operating segments and shared services will be impacted by the plan.

During both the three and six month periods ended August 31, 2022, we incurred $4.8 million of pre-tax restructuring costs in connection with Project Pegasus, which are recorded as “Restructuring charges” in the condensed consolidated statements of income. We recognized $0.4 million of pre-tax restructuring costs during both the three and six month periods ended August 31, 2021, under a prior restructuring plan referred to as Project Refuel, which was completed during the fourth quarter of fiscal 2022.

The following tables summarize restructuring charges recorded as a result of Project Pegasus for the periods presented:
Three Months Ended August 31, 2022
(in thousands)Home &
Outdoor		Health &
Wellness		BeautyTotal
Severance and employee related costs$472