Helen of Troy Limited Reports Record Fourth Quarter Net Sales Revenue and Net Income and Improved Net Sales Revenue and Net Income for Fiscal 2010

EL PASO, Texas, May 12 /PRNewswire-FirstCall/ -- Helen of Troy Limited (Nasdaq: HELE), designer, developer and worldwide marketer of brand-name household and personal care consumer products, today reported record fourth quarter net sales revenue and record net income and improved net sales revenue and improved net income for the fiscal year ended February 28, 2010.

Fourth quarter net sales revenue increased 9.8 percent to $152,161,000 from $138,580,000 in the same period of the prior year. Fourth quarter net sales revenue in the Housewares segment increased 12.2 percent to $50,028,000 compared to $44,594,000 for the same period last year, demonstrating the continued strength of our OXO brands.  Net sales revenue in the Personal Care segment increased 8.7 percent to $102,133,000 in the fourth quarter compared to $93,986,000 for the same period last year, reflecting the acquisition of the Infusium 23® hair care business on March 31, 2009, partially offset by a still challenging retail environment.

Net income for the fourth quarter was $16,664,000 or $0.54 per fully diluted share compared to a net loss of $88,039,000 or $2.93 per fully diluted share in the prior year fourth quarter. The net loss for the prior year fourth quarter includes $99,061,000 of non-cash after-tax impairment charges to goodwill and intangibles.  Income in the prior year's fourth quarter, excluding the impairment charges, was $11,022,000 or $0.36 per fully diluted share. Net income increased 51.2 percent in the fourth quarter of fiscal 2010 when compared to income in the fourth quarter of the prior year, after excluding impairment charges in the prior year fourth quarter.

Fiscal year net sales revenue increased 4.0 percent to $647,626,000 from $622,745,000 in the prior fiscal year.  Net sales revenue in the Housewares segment for the full year increased 13.1 percent to $198,475,000 compared to $175,501,000 for the same period last year. Net sales revenue in the Personal Care Segment for the full year increased 0.4 percent to $449,151,000 compared to $447,244,000 for the same period last year.

Net income for the year was $71,817,000 or $2.32 per fully diluted share, compared to a net loss of $56,793,000 or $1.88 per fully diluted share in the prior fiscal year.  On a non-GAAP basis, income in the previous fiscal year excluding significant items was $49,293,000, or $1.59 per fully diluted share. Fiscal 2010 net income increased 45.7 percent compared to the prior fiscal year, after excluding significant items from the prior fiscal year.

Fourth quarter gross profit as a percentage of net sales revenue increased to 44.8 percent compared to 38.7 percent in the same period last year.  Fiscal year gross profit, as a percentage of net sales revenue, increased to 43.1 percent in fiscal 2010 from 41.0 percent in fiscal 2009.  The gross profit improvement is primarily due to:

• Lower sourcing overhead as a result of the streamlining of our Far East sourcing operations;
• Customer price increases and product mix improvements in the Housewares segment;
• The impact of the Infusium 23® and Ogilvie ® acquisitions, which have comparatively higher margins than the core business;
• Commodity price decreases, early in fiscal 2010 that began to cycle through cost of goods sold in the second half of the fiscal year; and
• A decrease in inbound freight costs.

Selling, general and administrative expense (SG&A) for the fourth quarter of fiscal 2010 was $47,658,000, or 31.3 percent of net sales revenue, compared to $38,916,000, or 28.1 percent of net sales revenue for the same period last year.  For fiscal 2010, SG&A decreased to 29.2 percent of net sales revenue compared to 30.2 percent in fiscal 2009.  The increase in SG&A in the fourth quarter is primarily due to an increase in incentive compensation expense due to the year-over-year improvement in overall financial results, higher advertising costs, higher exchange rate losses and higher intangible asset amortization as a result of recent acquisitions.

Gerald J. Rubin, Chairman, Chief Executive Officer and President, commenting on the Company's results stated, "We are very pleased with our fourth quarter results.  We continue to make progress in achieving our strategic business objectives initiated during the past year.  At fiscal year-end our cash, cash equivalents and trading securities balance was $110,208,000.  On March 31, 2010, we utilized $69,000,000 of our available cash to acquire the Pert Plus® and Sure ® brands from Innovative Brands, LLC.  We anticipate that our Pert Plus® and Sure® brands will be immediately accretive to earnings.

"Our on-going efforts to improve our gross profit margin and reduce expenses as a percent of sales are reflected in our results for the full year.  We plan to continue to implement the following specific initiatives for fiscal 2011 with the goal of achieving net sales revenue and net income growth:

• Continued growth and expansion of OXO® product lines;
• Continued investment in new product line development and introductions to gain market share;
• Integration and development of our new Pert Plus® and Sure® product lines;
• Continued sourcing and product cost management initiatives to offset expected commodity and in-bound transportation cost increases;
• Continued implementation of productivity initiatives to reduce operating expenses; and
• Pursuit of additional acquisitions of complementary businesses or product lines.

At February 28, 2010, the Company's balance sheet included stockholders' equity of $583,772,000 and long-term debt of $134,000,000.  The domestic retail environment has recently shown some improvement, and we are confident that we will continue to be an innovative market leader in serving our retail partners and consumers in the years to come," 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, May 12, 2010.  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 June 30, 2010.

Helen of Troy Limited is a leading designer, producer and global marketer of a strong portfolio of brand-name household and personal care consumer products.  The Company's household products include kitchen tools, cutlery, bar and wine accessories, household cleaning tools, tea kettles, trash cans, storage and organization products, gardening tools, kitchen mitts and trivets, barbeque tools, and rechargeable lighting products sold under the OXO®, Good Grips®, and Candela® brand names.  The Company's personal care products include hair dryers, straighteners, curling irons, hair setters, women's shavers, brushes, combs, hair accessories, home hair clippers, mirrors, foot baths, body massagers, paraffin baths, liquid hair styling products, body powder, shampoos, deodorants and skin care products.  These products are sold to consumers by mass merchandisers, drug chains, warehouse clubs and grocery stores under Helen of Troy's owned brands including Infusium 23®, Brut®, Pro Beauty Tools®, Vitalis®, Final Net®, Ammens®, Condition® 3-in-1, SkinMilk®, Dazey®, Caruso®, Karina®, DCNL®, Nandi®, Isobel® and Ogilvie®.  Products are also sold under licensed trademarks including Vidal Sassoon®, licensed from The Procter & Gamble Company, Revlon®, licensed from Revlon Consumer Products Corporation, Dr. Scholl's®, licensed from Schering-Plough HealthCare Products, Inc., Sunbeam®, Health at Home® and Health o meter® licensed from Sunbeam Products, Inc., Sea Breeze®, licensed from Shiseido Company Ltd., Vitapointe®, licensed from Sara Lee Household and Body Care UK Limited, Toni & Guy® outside of the Americas, licensed from Mascolo Limited, Bed Head® and TIGI® in the Americas licensed from MBL/TIGI Products, LP, and Toni&Guy® in the Americas licensed from MBL/TONI&GUY Products, LP.  The Company markets hair and beauty care products under the Helen of Troy®, Hot Tools®, Hot Spa®, Salon Edition®, Gallery Series®, Wigo®, Fusion Tools®,  Belson®, Belson Pro®, Gold 'N Hot®, Curlmaster®, Profiles®, Comare®, Mega Hot®, and Shear Technology® owned brands to the professional beauty salon industry.

The Company reports and discusses its operating results using financial measures consistent with accounting principles generally accepted in the United States of America ("U.S. GAAP").  To supplement its presentation, the Company discloses certain financial measures that may be considered non-GAAP financial measures, such as EBITDA,  EBITDA without share-based compensation and significant items and income without significant items, which are presented in this press release.  The following tables present a reconciliation of these financial measures to their corresponding U.S. GAAP based measures presented in the Company's consolidated condensed statements of operations.

This press release may contain forward-looking statements, which are subject to change.  The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Any or all of the forward-looking statements may turn out to be wrong.  They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.  Many of these factors will be important in determining the Company's actual future results.  Consequently, no forward-looking statement can be guaranteed.  Actual future results may vary materially from those expressed or implied in any forward-looking statements.  The forward-looking statements are qualified in their entirety by a number of risks that could cause actual results to differ materially from historical or anticipated results.  Generally, the words "anticipates", "estimates", "believes", "expects", "plans", "may", "will", "should", "seeks", "project", "predict", "potential", "continue", "intends" and other similar words identify forward-looking statements.  The Company cautions readers not to place undue reliance on forward-looking statements.  The Company intends its forward-looking statements to speak only as of the time of such statements, and does not undertake to update or revise them as more information becomes available.  The forward-looking statements contained in this press release should be read in conjunction with, and are subject to and qualified by, the risks described in the Company's Form 10-K for the year ended February 28, 2010 and in our other filings with the SEC.  Investors are urged to refer to the risk factors referred to above for a description of these risks.  Such risks include, among others, the departure and recruitment of key personnel, the Company's ability to deliver products to our customers in a timely manner, the Company's projections of product demand, sales and net income are highly subjective and our future sales and net income could vary in a material amount from our projections, the Company's relationship with key customers and licensors, the costs of complying with the business demands and requirements of large sophisticated customers, the Company's dependence on foreign sources of supply and foreign manufacturing, impact of changing costs of raw materials and energy on cost of goods sold and certain operating expenses, the inability to liquidate auction rate securities, circumstances which may contribute to future impairment of goodwill, intangible or other long-lived assets, the risks associated with the use of trademarks licensed from third parties, our dependence on the strength of retail economies and vulnerabilities to a prolonged economic downturn, the Company's ability to develop and introduce innovative new products to meet changing consumer preferences, disruptions in U.S. and international credit markets, exchange rate risks, expectations regarding acquisitions and the integration of acquired businesses, the Company's use of debt and the constraints it may impose, the cost, complexity and challenges of operating our global information systems, the risks associated with tax audits and related disputes with taxing authorities, potential changes in laws, including tax laws, and the Company's ability to continue to avoid classification as a controlled foreign corporation.

SOURCE Helen of Troy Limited