Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Apr. 20, 2015 | Aug. 31, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | HELEN OF TROY LTD | ||
Entity Central Index Key | 916789 | ||
Document Type | 10-K | ||
Document Period End Date | 28-Feb-15 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -26 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1,653,513,000 | ||
Entity Common Stock, Shares Outstanding | 28,496,412 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Feb. 28, 2015 | Feb. 28, 2014 |
In Thousands, unless otherwise specified | ||
Assets, current: | ||
Cash and cash equivalents | $12,295 | $70,027 |
Receivables - principally trade, less allowances of $5,882 and $4,679 | 222,499 | 213,054 |
Inventory, net | 293,081 | 289,255 |
Prepaid expenses and other current assets | 9,715 | 10,097 |
Income taxes receivable | 417 | 3,783 |
Deferred tax assets, net | 26,753 | 29,260 |
Total assets, current | 564,760 | 615,476 |
Property and equipment, net of accumulated depreciation of $82,154 and $71,516 | 126,068 | 129,117 |
Goodwill | 549,727 | 453,241 |
Other intangible assets, net of accumulated amortization of $111,627 and $94,698 | 398,430 | 322,309 |
Deferred tax assets, net | 2,132 | 2,523 |
Other assets, net of accumulated amortization of $9,166 and $6,781 | 12,638 | 10,636 |
Total assets | 1,653,755 | 1,533,302 |
Liabilities, current: | ||
Accounts payable, principally trade | 98,564 | 75,585 |
Accrued expenses and other current liabilities | 141,201 | 156,688 |
Deferred tax liabilities, net | 200 | 181 |
Long-term debt, current maturities | 21,900 | 96,900 |
Total liabilities, current | 261,865 | 329,354 |
Long-term debt, excluding current maturities | 411,307 | 95,707 |
Deferred tax liabilities, net | 52,711 | 56,988 |
Other liabilities, noncurrent | 23,307 | 21,766 |
Total liabilities | 749,190 | 503,815 |
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; 28,488,411 and 32,272,519 shares issued and outstanding | 2,849 | 3,227 |
Additional paid in capital | 179,934 | 180,861 |
Accumulated other comprehensive income (loss) | -76 | -1,091 |
Retained earnings | 721,858 | 846,490 |
Total stockholders' equity | 904,565 | 1,029,487 |
Total liabilities and stockholders' equity | $1,653,755 | $1,533,302 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Feb. 28, 2015 | Feb. 28, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ||
Receivables - principally trade, allowances (in dollars) | $5,882 | $4,679 |
Property and equipment, accumulated depreciation (in dollars) | 82,154 | 71,516 |
Other intangible assets, accumulated amortization (in dollars) | 111,627 | 94,698 |
Other assets, accumulated amortization (in dollars) | $9,166 | $6,781 |
Cumulative preferred stock, non-voting, par (in dollars per share) | $1 | $1 |
Cumulative preferred stock, non-voting, Authorized shares | 2,000,000 | 2,000,000 |
Cumulative preferred stock, non-voting, issued shares | 0 | 0 |
Common stock, par (in dollars per share) | $0.10 | $0.10 |
Common stock, Authorized shares | 50,000,000 | 50,000,000 |
Common stock, shares issued | 28,488,411 | 32,272,519 |
Common stock, shares outstanding | 28,488,411 | 32,272,519 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Consolidated Statements of Income | |||
Sales revenue, net | $1,445,131 | $1,317,153 | $1,288,263 |
Cost of goods sold | 845,572 | 800,450 | 770,052 |
Gross profit | 599,559 | 516,703 | 518,211 |
Selling, general and administrative expense | 428,840 | 387,554 | 369,438 |
Asset impairment charges | 9,000 | 12,049 | |
Operating income | 161,719 | 117,100 | 148,773 |
Nonoperating income, net | 517 | 227 | 86 |
Interest expense | -15,022 | -10,193 | -13,345 |
Income before income taxes | 147,214 | 107,134 | 135,514 |
Income tax expense (benefit): | |||
Income tax expense | 16,050 | 20,886 | 19,848 |
Net income | $131,164 | $86,248 | $115,666 |
Earnings per share: | |||
Basic (in dollars per share) | $4.59 | $2.69 | $3.64 |
Diluted (in dollars per share) | $4.52 | $2.66 | $3.62 |
Weighted average shares of common stock used in computing net earnings per share: | |||
Basic (in shares) | 28,579 | 32,007 | 31,754 |
Diluted (in shares) | 29,035 | 32,386 | 31,936 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Income, Before Tax | $147,214 | $107,134 | $135,514 |
Cash flow hedge activity, before tax | |||
Total other comprehensive income, before tax | 1,485 | 2,732 | 4,271 |
Comprehensive income, Before Tax | 148,699 | 109,866 | 139,785 |
Income, Tax | -16,050 | -20,886 | -19,848 |
Cash flow hedge activity, tax | |||
Total other comprehensive income, tax | -470 | -1,094 | -1,411 |
Comprehensive income, Tax | -16,520 | -21,980 | -21,259 |
Net income | 131,164 | 86,248 | 115,666 |
Cash flow hedge activity, net of tax | |||
Total other comprehensive income | 1,015 | 1,638 | 2,860 |
Comprehensive income, net of tax | 132,179 | 87,886 | 118,526 |
Interest rate swaps | |||
Cash flow hedge activity, before tax | |||
Changes in fair market value | 28 | -111 | -103 |
Settlements reclassified to income | 1,199 | 3,707 | 3,833 |
Subtotal | 1,227 | 3,596 | 3,730 |
Cash flow hedge activity, tax | |||
Changes in fair market value | -10 | 39 | 36 |
Settlements reclassified to income | -420 | -1,297 | -1,342 |
Subtotal | -430 | -1,258 | -1,306 |
Cash flow hedge activity, net of tax | |||
Changes in fair market value | 18 | -72 | -67 |
Settlements reclassified to income | 779 | 2,410 | 2,491 |
Subtotal | 797 | 2,338 | 2,424 |
Foreign currency contracts | |||
Cash flow hedge activity, before tax | |||
Changes in fair market value | 434 | -962 | -132 |
Ineffectiveness recorded in income | 44 | ||
Settlements reclassified to income | -176 | 98 | 629 |
Subtotal | 258 | -864 | 541 |
Cash flow hedge activity, tax | |||
Changes in fair market value | -62 | 195 | -17 |
Ineffectiveness recorded in income | 2 | ||
Settlements reclassified to income | 22 | -31 | -90 |
Subtotal | -40 | 164 | -105 |
Cash flow hedge activity, net of tax | |||
Changes in fair market value | 372 | -767 | -149 |
Ineffectiveness recorded in income | 46 | ||
Settlements reclassified to income | -154 | 67 | 539 |
Subtotal | $218 | ($700) | $436 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common stock | Paid in capital | Accumulated other comprehensive loss | Accumulated other comprehensive loss | Accumulated other comprehensive loss | Retained earnings | Interest rate swaps | Foreign currency contracts | Total |
In Thousands, except Share data, unless otherwise specified | Interest rate swaps | Foreign currency contracts | |||||||
Balance at Feb. 29, 2012 | $3,168 | $151,006 | ($5,589) | $648,144 | |||||
Balance (in shares) at Feb. 29, 2012 | 31,681,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock option share-based compensation | 3,067 | ||||||||
Exercise of stock options, including tax benefits of $773, $452, and $4,941 | 25 | 10,730 | |||||||
Exercise of stock options (in shares) | 248,000 | ||||||||
Restricted share-based compensation, including tax benefits of $0, $2,921 and $0 | 1 | -1 | |||||||
Restricted share-based compensation (in shares) | 11,000 | ||||||||
Issuance of common stock in connection with employee stock purchase plan | 4 | 1,056 | |||||||
Shares of common stock acquired by plan participants | 39,000 | ||||||||
Cash flow hedge activity, net of tax | 2,424 | 436 | 2,424 | 436 | |||||
Common stock repurchased and retired | -11 | -1,387 | -2,133 | ||||||
Common stock repurchased and retired (in shares) | 111,000 | ||||||||
Net Income | 115,666 | 115,666 | |||||||
Balance at Feb. 28, 2013 | 3,187 | 164,471 | -2,729 | 761,677 | 926,606 | ||||
Balance (in shares) at Feb. 28, 2013 | 31,868,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Adjustments to paid in capital for changes in uncertain tax positions | 257 | ||||||||
Stock option share-based compensation | 2,804 | ||||||||
Exercise of stock options, including tax benefits of $773, $452, and $4,941 | 24 | 6,494 | |||||||
Exercise of stock options (in shares) | 239,000 | ||||||||
Restricted share-based compensation, including tax benefits of $0, $2,921 and $0 | 1 | 12,285 | |||||||
Restricted share-based compensation (in shares) | 11,000 | ||||||||
Issuance of common stock in connection with employee stock purchase plan | 4 | 1,346 | |||||||
Shares of common stock acquired by plan participants | 42,000 | ||||||||
Vesting of performance awards | 26 | ||||||||
Vesting of performance awards (in shares) | 260,000 | ||||||||
Cash flow hedge activity, net of tax | 2,338 | -700 | 2,338 | -700 | |||||
Common stock repurchased and retired | -15 | -6,796 | -1,435 | ||||||
Common stock repurchased and retired (in shares) | 147,000 | ||||||||
Net Income | 86,248 | 86,248 | |||||||
Balance at Feb. 28, 2014 | 3,227 | 180,861 | -1,091 | 846,490 | 1,029,487 | ||||
Balance (in shares) at Feb. 28, 2014 | 32,273,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock option share-based compensation | 3,670 | ||||||||
Exercise of stock options, including tax benefits of $773, $452, and $4,941 | 19 | 6,318 | |||||||
Exercise of stock options (in shares) | 187,000 | ||||||||
Restricted share-based compensation, including tax benefits of $0, $2,921 and $0 | 7 | 9,759 | |||||||
Restricted share-based compensation (in shares) | 71,000 | ||||||||
Issuance of common stock in connection with employee stock purchase plan | 3 | 1,538 | |||||||
Shares of common stock acquired by plan participants | 31,000 | ||||||||
Vesting of performance awards | 10 | ||||||||
Vesting of performance awards (in shares) | 100,000 | ||||||||
Cash flow hedge activity, net of tax | 797 | 218 | 797 | 218 | |||||
Common stock repurchased and retired | -417 | -22,212 | -255,796 | ||||||
Common stock repurchased and retired (in shares) | 4,174,000 | ||||||||
Net Income | 131,164 | 131,164 | |||||||
Balance at Feb. 28, 2015 | $2,849 | $179,934 | ($76) | $721,858 | $904,565 | ||||
Balance (in shares) at Feb. 28, 2015 | 28,488,000 |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Consolidated Statements of Stockholders' Equity | |||
Stock option share-based compensation, tax benefits | $773 | $452 | $4,941 |
Restricted share-based compensation tax benefit | $0 | $2,921 | $0 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Cash provided (used) by operating activities: | |||
Net income | $131,164 | $86,248 | $115,666 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 39,653 | 33,839 | 34,425 |
Amortization of financing costs | 1,846 | 911 | 903 |
Provision for doubtful receivables | 299 | 400 | 188 |
Non-cash share-based compensation | 5,974 | 31,683 | 5,913 |
Intangible asset impairment charges | 9,000 | 12,049 | |
(Gain) loss on the sale of property and equipment | 49 | 81 | 175 |
Deferred income taxes and tax credits | -1,830 | -10,109 | -12,061 |
Changes in operating capital, net of effects of acquisition of business: | |||
Receivables | -9,487 | 6,265 | -24,624 |
Inventories | 2,274 | -8,383 | -34,625 |
Prepaid expenses and other current assets | 2,317 | 1,166 | -1,545 |
Other assets and liabilities, net | 2,448 | -1,867 | -326 |
Accounts payable | 16,502 | 3,733 | 2,507 |
Accrued expenses and other current liabilities | -21,135 | 8,129 | 1,360 |
Accrued income taxes | -471 | -9,980 | -398 |
Net cash provided by operating activities | 178,603 | 154,165 | 87,558 |
Cash provided (used) by investing activities: | |||
Capital and intangible asset expenditures | -6,521 | -40,463 | -14,688 |
Proceeds from the sale or disposal of property and equipment | 5 | 26 | |
Note receivable from land sale | 737 | ||
Payment to acquire a business, net of cash received | -195,943 | ||
Net cash used by investing activities | -202,464 | -40,458 | -13,925 |
Cash provided (used) by financing activities: | |||
Proceeds from line of credit | 769,000 | 107,300 | 234,650 |
Repayment of line of credit | -431,500 | -189,300 | -323,750 |
Proceeds from issuance of long-term debt | 37,607 | ||
Repayment of long-term debt | -96,900 | -20,000 | -3,000 |
Payment of financing costs | -4,585 | -367 | -28 |
Proceeds from share issuances under share-based compensation plans, including tax benefits | 7,621 | 10,285 | 10,392 |
Payment of tax obligations resulting from cashless share award exercises | -4,569 | -6,445 | |
Payments for repurchases of common stock | -273,599 | -1,311 | -1,759 |
Share-based compensation tax benefit | 661 | 5,709 | 858 |
Net cash provided (used) by financing activities | -33,871 | -56,522 | -82,637 |
Net (decrease) increase in cash and cash equivalents | -57,732 | 57,185 | -9,004 |
Cash and cash equivalents, beginning balance | 70,027 | 12,842 | 21,846 |
Cash and cash equivalents, ending balance | 12,295 | 70,027 | 12,842 |
Supplemental cash flow information: | |||
Interest paid | 13,990 | 10,632 | 11,681 |
Income taxes paid, net of refunds | 16,591 | 31,289 | 26,449 |
Value of common stock received as exercise price of options | $257 | $492 | $1,627 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||
(a)General | |||||||||||
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 the Company’s common shares, par value $0.10 per share, as “common stock.” References to “OXO” refer to the operations of OXO International and certain of its affiliated subsidiaries that comprise our Housewares segment. References to “Kaz” refer to the operations of Kaz, Inc. and its subsidiaries, which comprise a segment within the Company referred to as the Healthcare / Home Environment segment. References to “Healthy Directions” refer to the operations of Healthy Directions, LLC and its subsidiaries, acquired on June 30, 2014, that comprise the Nutritional Supplements segment. We use product and service names in this report for identification purposes only and they may be protected in the United States and other jurisdictions by trademarks, trade names, service marks, and other intellectual property rights of the Company and other parties. The absence of a specific attribution in connection with any such mark does not constitute a waiver of any such right. All trademarks, trade names, service marks, and logos referenced herein belong to their respective owners. References to “the FASB” refer to the Financial Accounting Standards Board. References to “GAAP” refer to 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 are a global designer, developer, importer, marketer, and distributor of an expanding portfolio of brand-name consumer products. We have four segments: Housewares, Healthcare / Home Environment, Nutritional Supplements, and Personal Care. Our Housewares segment provides a broad range of innovative consumer products for the home. Product offerings include food preparation tools, gadgets and storage containers, cleaning, organization, and baby and toddler care products. The Healthcare / Home Environment segment focuses on healthcare devices such as thermometers, humidifiers, blood pressure monitors, and heating pads; water filtration systems; and small home appliances such as portable heaters, fans, air purifiers, and insect control devices. Our Nutritional Supplements segment is a leading provider of premium branded vitamins, minerals and supplements, as well as other health products sold directly to consumers. Our Personal Care 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. | |||||||||||
Our consolidated financial statements are prepared in U.S. Dollars and in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. We have reclassified, combined or separately disclosed certain amounts in the prior years’ consolidated financial statements and accompanying footnotes to conform to the current year’s presentation. These reclassifications had no effect on previously reported results of operations, working capital or stockholders’ equity. | |||||||||||
(b)Consolidation | |||||||||||
Our consolidated financial statements include the accounts of Helen of Troy Limited and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. | |||||||||||
(c)Cash and cash equivalents | |||||||||||
Cash equivalents include all highly liquid investments with an original maturity of three months or less. We maintain cash and cash equivalents at several financial institutions, which at times may not be federally insured or may exceed federally insured limits. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risks on such accounts. | |||||||||||
Our cash balances at the end of fiscal years 2015 and 2014 include restricted cash of $0.73 and $2.59 million, respectively, denominated in Venezuelan Bolivars. The balances arise from our operations within the Venezuelan market. Until we are able to repatriate cash from Venezuela, we intend to use these cash balances in country to continue to fund operations. We do not otherwise rely on these restricted funds as a source of liquidity. | |||||||||||
We consider money market investment accounts to be cash equivalents. Cash equivalents comprised $1.69 and $1.55 million of the amounts reported on our consolidated balance sheets as “Cash and cash equivalents” at February 28, 2015 and 2014, respectively. Note (12) contains additional information regarding our cash and cash equivalents. | |||||||||||
(d)Trading securities | |||||||||||
Trading securities, when held, consist of shares of common stock of publicly traded companies and are stated on our consolidated balance sheets at fair value, as determined by the most recent trading price of each security as of each balance sheet date. We determine the appropriate classification of our investments when those investments are purchased and reevaluate those determinations at each balance sheet date. Trading securities, when held, are included in the “Assets, current” section of our consolidated balance sheets. | |||||||||||
All realized and unrealized gains and losses attributable to trading securities are included in “Nonoperating income (expense), net” in the consolidated statements of income. | |||||||||||
(e)Receivables | |||||||||||
Our receivables are comprised of trade credit granted to customers, primarily in the retail industry, offset by two valuation reserves: an allowance for doubtful receivables and an allowance for back-to-stock returns. | |||||||||||
Our allowance for doubtful receivables reflects our best estimate of probable losses, determined principally based on historical experience and specific allowances for known troubled accounts. Our policy is to charge off receivables when we have determined they will no longer be collectible. Charge offs are applied as a reduction to the allowance for doubtful accounts and any recoveries of previous charge offs are netted against bad debt expense in the period recovered. At February 28, 2015 and 2014, the allowance for doubtful receivables was $1.85 and $2.13 million, respectively. | |||||||||||
Our allowance for back-to-stock returns reflects our best estimate of future customer returns, determined principally based on historical experience and specific allowances for known pending returns. At February 28, 2015 and 2014, the allowance for back-to-stock returns was $4.03 and $2.55 million, respectively. | |||||||||||
The Company had significant concentrations of credit risk with two major customers at February 28, 2015 representing approximately 15 and 10 percent of gross trade receivables, respectively. In addition, as of February 28, 2015 and 2014, approximately 42 and 44 percent, respectively, of the Company’s gross trade receivables were due from its five top customers. | |||||||||||
(f)Inventory, net and cost of goods sold | |||||||||||
Our inventory consists almost entirely of finished goods. We currently record inventory on our balance sheet at average cost, or net realizable value, if it is below our recorded cost. Our average costs include the amounts we pay manufacturers for product, tariffs and duties associated with transporting product across national borders, freight costs associated with transporting the product from our manufacturers to our distribution centers, and general and administrative expenses directly attributable to acquiring inventory, as applicable. | |||||||||||
General and administrative expenses in inventory include all the expenses of operating the Company's sourcing activities and expenses incurred for production monitoring, product design, engineering and packaging. We charged $36.37, $36.23 and $30.28 million of such general and administrative expenses to inventory during fiscal years 2015, 2014 and 2013, respectively. We estimate that $12.52 and $12.26 million of general and administrative expenses directly attributable to the procurement of inventory were included in our inventory balances on hand at February 28, 2015 and 2014, respectively. | |||||||||||
The “Cost of goods sold” line item on the consolidated statements of income is comprised of the book value of inventory sold to customers during the reporting period. When circumstances dictate that we use net realizable value as the basis for recording inventory, we base our estimates on expected future selling prices less expected disposal costs. | |||||||||||
For fiscal years 2015, 2014 and 2013, finished goods purchased from vendors in the Far East comprised approximately 67, 69 and 68 percent, respectively, of finished goods purchased. During fiscal year 2015, we had one vendor who fulfilled approximately 10 percent of our product requirements. Our top two manufacturers combined fulfilled approximately 17 percent of our product requirements. Over the same period, our top five suppliers fulfilled approximately 31 percent of our product requirements. | |||||||||||
(g)Property and equipment | |||||||||||
These assets are stated at cost and depreciation is recorded on a straight-line basis over the estimated useful lives of the assets. Expenditures for repair and maintenance of property and equipment are expensed as incurred. For tax purposes, accelerated depreciation methods are used where allowed by tax laws. | |||||||||||
(h)License agreements, trademarks, patents, and other intangible assets | |||||||||||
A significant portion of our consolidated sales are made subject to trademark license agreements with various licensors. Our license agreements are reported on our consolidated balance sheets at cost, less accumulated amortization. The cost of our license agreements represents amounts paid to licensors to acquire the license or to alter the terms of the license in a manner that we believe to be in our best interest. Certain licenses have extension terms that may require additional payments to the licensor as part of the terms of renewal. The Company capitalizes costs incurred to renew or extend the term of a license agreement and amortizes such costs on a straight-line basis over the remaining term or economic life of the agreement, whichever is shorter. Royalty payments are not included in the cost of license agreements. Royalty expense under our license agreements is recognized as incurred and is included in our consolidated statements of income on the line entitled “Selling, general and administrative expense” (“SG&A”). Net sales revenue subject to trademark license agreements requiring royalty payments comprised approximately 42, 44 and 44 percent of consolidated net sales revenue for fiscal years 2015, 2014 and 2013, respectively. During fiscal year 2015, we had one licensor where our net sales revenue subject to royalty payments was approximately 19 percent of consolidated net sales. No other licensors had associated net sales revenue subject to royalty payments that accounted for 10 percent or more of consolidated net sales revenue. | |||||||||||
We also sell products under trademarks and brand assets that we own. Trademarks and brand assets that we acquire from other entities are generally recorded on our consolidated balance sheets based upon the appraised cost of acquiring the asset, net of any accumulated amortization and impairment charges. Costs associated with developing trademarks internally are recorded as expenses in the period incurred. In certain instances where trademarks or brand assets have readily determinable useful lives, we amortize their costs on a straight-line basis over such lives. In most instances, we have determined that such acquired assets have an indefinite useful life. In these cases, no amortization is recorded. Patents acquired through purchase from other entities, if material, are recorded on our consolidated balance sheets based upon the appraised value of the acquired patents and amortized over the remaining life of the patent. Additionally, we incur certain costs, primarily legal fees in connection with the design and development of products to be covered by patents, which are capitalized as incurred and amortized on a straight-line basis over the life of the patent in the jurisdiction filed, typically 14 years. | |||||||||||
Other intangible assets include customer lists, distribution rights, patent rights, and non-compete agreements that we acquired from other entities. These are recorded on our consolidated balance sheets based upon the fair value of the acquired asset and amortized on a straight-line basis over the remaining life of the asset as determined either through outside appraisal or by the term of any controlling agreements. See Notes (5) and (6) to these consolidated financial statements for additional information on our intangible assets. | |||||||||||
(i)Goodwill, intangible and other long-lived assets and impairments | |||||||||||
We complete our analysis of the carrying value of our goodwill and other intangible assets during the first quarter of each fiscal year, or more frequently whenever events or changes in circumstances indicate that their carrying value may not be recoverable. | |||||||||||
Goodwill is recorded as the difference, if any, between the aggregate consideration paid and the fair value of the net tangible and intangible assets received in the acquisition of a business. We evaluate goodwill at the reporting unit level (operating segment or one level below an operating segment). We measure the amount of any goodwill impairment based upon the estimated fair value of the underlying assets and liabilities of the reporting unit, including any unrecognized intangible assets and estimates of the implied fair value of goodwill. An impairment charge is recognized to the extent the recorded goodwill exceeds the implied fair value of goodwill. | |||||||||||
We consider whether circumstances or conditions exist that suggest that the carrying value of our goodwill and other long-lived assets might be impaired. If such circumstances or conditions exist, further steps are required in order to determine whether the carrying value of each of the individual assets exceeds its fair market value. If the analysis indicates that an individual asset’s carrying value does exceed its fair market value, the next step is to record a loss equal to the excess of the individual asset’s carrying value over its fair value. These steps entail significant amounts of judgment and subjectivity. Events and changes in circumstances that may indicate there is impairment include, but are not limited to, strategic decisions to exit a business or dispose of an asset made in response to changes in economic, political and competitive conditions, the impact of the economic environment on our customer base and on broad market conditions that drive valuation considerations by market participants, our internal expectations with regard to future revenue growth and the assumptions we make when performing our impairment reviews, a significant decrease in the market price of our assets, a significant adverse change in the extent or manner in which our assets are used, a significant adverse change in legal factors or the business climate that could affect our assets, an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset, and significant changes in the cash flows associated with an asset. We analyze these assets at the individual asset, reporting unit and Company levels. | |||||||||||
As further discussed in Note (5) to these consolidated financial statements, in fiscal years 2015 and 2014, we recorded non-cash impairment charges totaling $9.00 million ($8.16 million after tax) and $12.05 million ($12.03 million after tax), respectively, in order to reflect the carrying value of certain trademarks in our Personal Care segment at estimates of their fair value. | |||||||||||
(j)Economic useful lives and amortization of intangible assets | |||||||||||
We amortize intangible assets, such as licenses and trademarks, over their economic useful lives, unless those assets' economic useful lives are indefinite. If an intangible asset's economic useful life is deemed indefinite, that asset is not amortized. When we acquire an intangible asset, we consider factors such as the asset's history, our plans for that asset, and the market for products associated with the asset. We consider these same factors when reviewing the economic useful lives of our existing intangible assets as well. We review the economic useful lives of our intangible assets at least annually. | |||||||||||
Intangible assets consist primarily of goodwill, license agreements, trademarks, brand assets, customer lists, distribution rights, patents, and patent licenses. Some of our goodwill is held in jurisdictions that allow deductions for tax purposes, however, in some of those jurisdictions we have no tax basis for the associated goodwill recorded for book purposes. Accordingly, the majority of our goodwill is not deductible for tax purposes. We amortize certain intangible assets using the straight-line method over appropriate periods ranging from 2 to 30 years. We recorded intangible asset amortization totaling $25.33, $21.61 and $22.40 million during fiscal years 2015, 2014 and 2013, respectively. See Notes (5) and (6) to these consolidated financial statements for more information about our intangible assets. | |||||||||||
(k)Fair value classifications | |||||||||||
We classify our various assets and liabilities recorded or reported at fair value under a hierarchy prescribed by GAAP that prioritizes inputs to fair value measurement techniques into three broad levels: | |||||||||||
· | Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets. | ||||||||||
· | Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | ||||||||||
· | Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. | ||||||||||
Assets and liabilities subject to classification are classified upon acquisition. When circumstances dictate the transfer of an asset or liability to a different level, our policy is to recognize the transfer at the beginning of the reporting period in which the event resulting in the transfer occurred. | |||||||||||
(l)Warranties | |||||||||||
Our products are under warranty against defects in material and workmanship for periods ranging from two to five years. We estimate our warranty accrual using our historical experience and believe that this is the most reliable method by which we can estimate our warranty liability. The following table summarizes the activity in the Company's accrual for the past two fiscal years: | |||||||||||
ACCRUAL FOR WARRANTY RETURNS | |||||||||||
(in thousands) | |||||||||||
Fiscal Years Ended | |||||||||||
the Last Day of February, | |||||||||||
2015 | 2014 | ||||||||||
Beginning balance | $ | 19,269 | $ | 23,150 | |||||||
Additions to the accrual | 57,217 | 48,461 | |||||||||
Reductions of the accrual - payments and credits issued | -52,933 | -52,342 | |||||||||
Ending balance | $ | 23,553 | $ | 19,269 | |||||||
(m) Financial instruments | |||||||||||
The carrying amounts of cash and cash equivalents, receivables, accounts payable, accrued expenses and income taxes payable approximate fair value because of the short maturity of these items. See Note (10) to these consolidated financial statements for our assessment of the fair value of our Senior Notes and other long-term debt. We have previously used interest rate swaps (the “swaps”) to protect our funding costs against rising interest rates. The interest rate swaps allowed us to raise long-term borrowings at floating rates and effectively swap them into fixed rates. Under our previous swaps, we agreed with another party to exchange quarterly the difference between fixed-rate and floating-rate interest amounts calculated by reference to notional amounts that match the amount of our underlying debt. Under these swap agreements, we paid the fixed rates and received the floating rates. The swaps settled quarterly and terminated upon maturity of the related debt in June 2014. We hedge a portion of our foreign exchange rate risk by entering into forward contracts to exchange foreign currencies for U.S. Dollars at specified rates. Our foreign exchange contracts and interest rate swaps are considered highly effective and are accounted for as cash flow hedges. See Notes (12), (13) and (18) to these consolidated financial statements for more information on our hedging activities. | |||||||||||
(n)Income taxes and uncertain tax positions | |||||||||||
Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences between the book and tax bases of applicable assets and liabilities. Generally, deferred tax assets represent future income tax reductions while deferred tax liabilities represent income taxes that we expect to pay in the future. We measure deferred tax assets and liabilities using enacted tax rates for the years in which we expect temporary differences to be reversed or be settled. Changes in tax rates affect the carrying values of our deferred tax assets and liabilities, and the effects of any tax rate changes are recognized in the periods when they are enacted. The ultimate realization of our deferred tax assets depends upon generating sufficient future taxable income during the periods in which our temporary differences become deductible or before our net operating loss and tax credit carryforwards expire. | |||||||||||
We recognize the benefit of a tax position if that position will more likely than not be sustained in an audit, based on the technical merits of the position. If the tax position meets the more likely than not recognition threshold, the tax effect is recognized at the largest amount of the benefit that has greater than a fifty percent likelihood of being realized upon ultimate settlement. Liabilities created for unrecognized tax benefits are disclosed as a separate liability and not combined with deferred tax liabilities or assets. We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. Note (11) to these consolidated financial statements contains additional information regarding our income taxes. | |||||||||||
(o)Revenue recognition | |||||||||||
Sales are recognized when revenue is realized or realizable and has been earned. Sales and shipping terms vary among our customers, and as such, revenue is recognized when risk and title to the product transfer to the customer. Net sales revenue is comprised of gross revenues less estimates of expected returns, trade discounts and customer allowances, which include incentives such as advertising discounts, volume rebates and off-invoice markdowns. Such deductions are recorded and/or amortized during the period the related revenue is recognized. Sales and value added taxes collected from customers and remitted to governmental authorities are excluded from net sales revenue reported in the consolidated financial statements. | |||||||||||
(p)Consideration granted to customers | |||||||||||
We offer our customers certain incentives in the form of cooperative advertising arrangements, volume rebates, product markdown allowances, trade discounts, cash discounts, slotting fees, and similar other arrangements. In instances where the customer provides us with proof of advertising performance, reductions in amounts received from customers under cooperative advertising programs are expensed in our consolidated statements of income in SG&A. Customer cooperative advertising incentives included in SG&A were $17.28, $16.45 and $14.25 million for the fiscal years 2015, 2014 and 2013, respectively. | |||||||||||
Reductions in amounts received from customers without proof of advertising performance, markdown allowances, slotting fees, trade discounts, cash discounts, and volume rebates are all recorded as reductions of net sales revenue. | |||||||||||
(q)Advertising | |||||||||||
Advertising costs, including cooperative advertising discussed in (p) above, are expensed in the period in which they are incurred and included in our consolidated statements of income in SG&A. We incurred total advertising costs, including amounts paid to customers for cooperative media and print advertising, of $53.75, $46.29 and $51.08 million during fiscal years 2015, 2014 and 2013, respectively. | |||||||||||
(r)Shipping and handling revenues and expenses | |||||||||||
Shipping and handling expenses are included in our consolidated statements of income in SG&A. These expenses include distribution center costs, third-party logistics costs and outbound transportation costs. Our expenses for shipping and handling was approximately $88, $81 and $84 million during fiscal years 2015, 2014 and 2013, respectively. We bill our customers for charges for shipping and handling on certain sales made directly to consumers and retail customers ordering relatively small dollar amounts of product. Such charges are recorded as a reduction of our shipping and handling expense and are not material in the aggregate. | |||||||||||
(s)Foreign currency transactions and related derivative financial instruments | |||||||||||
The U.S. Dollar is the functional currency for the Company and all its foreign subsidiaries; therefore, we do not have a translation adjustment recorded through accumulated other comprehensive income (loss). All our non-U.S. subsidiaries' transactions involving other currencies have been re-measured in U.S. Dollars using exchange rates in effect on the date each transaction occurred. In our consolidated statements of income, exchange gains and losses resulting from the remeasurement of foreign taxes receivable, taxes payable, deferred tax assets, and deferred tax liabilities are recognized in their respective income tax lines and all other foreign exchange gains and losses are recognized in SG&A. We recorded net foreign exchange gains (losses), including the impact of currency hedges, of ($5.72), ($0.95) and ($2.36) million in SG&A and $0.40, ($0.17) and ($0.04) million in income tax expense during fiscal years 2015, 2014 and 2013, respectively. In order to manage our exposure to changes in foreign currency exchange rates, we use forward currency contracts to exchange foreign currencies for U.S. Dollars at specified rates. We account for these transactions as cash flow hedges, which requires these derivatives to be recorded on the balance sheet at their fair value and that changes in the fair value of the forward exchange contracts are recorded each period in our consolidated statements of income or other comprehensive income (loss), depending on the type of hedging instrument and the effectiveness of the hedges. All our current contracts are cash flow hedges and are adjusted to their fair market values at the end of each fiscal quarter. We evaluate all hedging transactions each quarter to determine that they are effective. Any ineffectiveness is recorded as part of SG&A in our consolidated statements of income. See Notes (12), (13) and (18) to these consolidated financial statements for a further discussion of our hedging activities. | |||||||||||
(t)Share-based compensation plans | |||||||||||
We account for share-based employee compensation plans under the fair value recognition and measurement provisions in accordance with applicable accounting standards, which require all share-based payments to employees, including grants of stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”), to be measured based on the grant date fair value of the awards. The resulting expense is recognized over the periods during which the employee is required to perform service in exchange for the award. The estimated number of PSU’s that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. | |||||||||||
Stock options are recognized in the financial statements based on their fair values using an option-pricing model at the date of grant. We use a Black-Scholes option-pricing model to calculate the fair value of options. This model requires various judgmental assumptions including volatility, forfeiture rates and expected option life. | |||||||||||
All share-based compensation expense is recorded net of estimated forfeitures in our consolidated statements of income and as such is recorded for only those share-based awards that we expect to vest. We estimate the forfeiture rate based on historical forfeitures of equity awards and adjust the rate to reflect changes in facts and circumstances, if any. We revise our estimated forfeiture rate if actual forfeitures differ from our initial estimates. | |||||||||||
See Note (16) to these consolidated financial statements for more information on our share-based compensation plans. | |||||||||||
(u)Interest income | |||||||||||
Interest income is included in “Nonoperating income, net” on the consolidated statements of income. Interest income totaled $0.06, $0.07 and $0.07 million in fiscal years 2015, 2014 and 2013, respectively. Interest income is normally earned on cash invested in short-term accounts, cash equivalents, and temporary and long-term investments. | |||||||||||
(v)Earnings per share | |||||||||||
We compute basic earnings per share using the weighted average number of shares of common stock outstanding during the period. We compute diluted earnings per share using the weighted average number of shares of common stock outstanding plus the effect of dilutive securities. Dilutive securities at any given point in time may consist of outstanding options to purchase common stock and issued and contingently issuable unvested restricted share units and other performance-based share awards. See Note (16) to these consolidated financial statements for more information regarding these restricted share units and other performance-based share awards. Options for common stock are excluded from the computation of diluted earnings per share if their effect is antidilutive. | |||||||||||
For fiscal years 2015, 2014 and 2013, the components of basic and diluted shares were as follows: | |||||||||||
WEIGHTED AVERAGE DILUTED SECURITIES | |||||||||||
(in thousands) | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Weighted average shares outstanding, basic | 28,579 | 32,007 | 31,754 | ||||||||
Incremental shares from share-based payment arrangements | 456 | 379 | 182 | ||||||||
Weighted average shares outstanding, diluted | 29,035 | 32,386 | 31,936 | ||||||||
Dilutive securities, stock options | 647 | 488 | 278 | ||||||||
Dilutive securities, unvested or unsettled share awards | 273 | 322 | 252 | ||||||||
Antidilutive securities, stock options | 239 | 441 | 586 | ||||||||
CHANGE_IN_ACCOUNTING_ESTIMATE
CHANGE IN ACCOUNTING ESTIMATE. | 12 Months Ended |
Feb. 28, 2015 | |
CHANGE IN ACCOUNTING ESTIMATE | |
CHANGE IN ACCOUNTING ESTIMATE | NOTE 2 – CHANGE IN ACCOUNTING ESTIMATE |
In the third quarter of fiscal year 2015, we revised our product liability estimates to reflect more relevant historical claims experience. The effect of the change in estimate was recorded in SG&A. The change increased operating income, net income and diluted earnings per share by $2.22 million, $1.36 million and $0.05 per share, respectively, for fiscal year 2015. | |
NEW_ACCOUNTING_PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Feb. 28, 2015 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | NOTE 3 – NEW ACCOUNTING PRONOUNCEMENTS |
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”, issued as a new Topic, ASC Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. 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. In April 2015, the FASB voted to propose deferral of the effective date of the new revenue standard by one year, but to permit entities to adopt one year earlier if they choose. The proposed deferral is not a final decision. Assuming the proposal is sustained after the FASB’s due process (including their evaluation of resulting public comments), we will be required to adopt the new standard in fiscal year 2019 (unless we elect to adopt one year earlier) and can adopt either retrospectively or as a cumulative effect adjustment as of the date of adoption. We are currently evaluating the effect this new accounting guidance will have on our consolidated results of operations, cash flows and financial position. | |
Unless otherwise discussed above, the Company's management believes that the impact of other recently issued standards that are not yet effective will not have a material impact on its consolidated financial position, results of operations and cash flows upon adoption. | |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT | ||||||||||
A summary of property and equipment is as follows: | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
(in thousands) | |||||||||||
Estimated | |||||||||||
Useful Lives | Balances at February 28, | ||||||||||
(Years) | 2015 | 2014 | |||||||||
Land | - | $ | 12,800 | $ | 12,800 | ||||||
Building and improvements | 3 | - | 40 | 102,058 | 98,660 | ||||||
Computer, furniture and other equipment | 3 | - | 15 | 64,464 | 60,291 | ||||||
Tools, molds and other production equipment | 1 | - | 10 | 25,861 | 23,017 | ||||||
Construction in progress | - | 3,039 | 5,865 | ||||||||
Property and equipment, gross | 208,222 | 200,633 | |||||||||
Less accumulated depreciation | -82,154 | -71,516 | |||||||||
Property and equipment, net | $ | 126,068 | $ | 129,117 | |||||||
We recorded $14.33, $12.23 and $12.03 million of depreciation expense for fiscal years 2015, 2014 and 2013, respectively. Capital expenditures for property and equipment totaled $5.36, $40.12 and $13.61 million in fiscal years 2015, 2014 and 2013, respectively. | |||||||||||
We lease certain facilities, equipment and vehicles under operating leases, which expire at various dates through fiscal year 2025. Certain of the leases contain escalation clauses and renewal or purchase options. Rent expense related to our operating leases was $5.01, $5.68 and $6.39 million for fiscal years 2015, 2014 and 2013, respectively. During the third quarter of fiscal year 2014, in connection with our move to a new distribution facility discussed below, we terminated the lease of our previous distribution facility in Memphis, Tennessee as of October 31, 2013. | |||||||||||
During fiscal year 2014, the Company completed construction of a new 1.3 million square foot distribution facility on approximately 84 acres of land in Olive Branch, Mississippi. Capital expenditures for fiscal years 2014 and 2013 include $34.03 million and $4.03 million, respectively, in connection with this project. The new facility consolidated the distribution operations of our U.S. based Personal Care and Healthcare / Home Environment segment’s appliance businesses. We commenced shipments out of the new facility during the first week of September 2013. | |||||||||||
During the first quarter of fiscal year 2015, we completed the transition of our domestic Personal Care appliance distribution operation to the new facility. The capital expenditures made in connection with the Personal Care appliance transition were not material. See Note (10) to these consolidated financial statements for related information regarding the debt incurred to fund the construction of the new distribution facility. | |||||||||||
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended | ||||||||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | |||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | NOTE 5 – GOODWILL AND INTANGIBLE ASSETS | ||||||||||||||||||||||||||||||
We do not record amortization expense for goodwill or other intangible assets that have indefinite useful lives. Amortization expense is recorded for intangible assets with definite useful lives. We perform an annual impairment review of goodwill and other intangible assets during the first quarter of each fiscal year. We also perform interim testing, if necessary, as required by GAAP. We write down any asset deemed to be impaired to its fair value. | |||||||||||||||||||||||||||||||
The Company's traditional impairment test methodology uses primarily estimated future discounted cash flow models (“DCF Models”). The DCF Models use a number of assumptions including expected future cash flows from the assets, volatility, risk free rate, and the expected life of the assets, the determination of which require significant judgments from management. In determining the assumptions to be used, the Company considers the existing rates on Treasury Bills, yield spreads on assets with comparable expected lives, historical volatility of the Company's common stock and that of comparable companies and general economic and industry trends, among other considerations. When stock market or other conditions warrant, the Company expands its traditional impairment test methodology to give weight to other methods that provide additional observable market information in order to better reflect the current risk level being incorporated into market prices and in order to corroborate the fair values of each of the Company’s reporting units. Management will place increased reliance on these additional methods in conjunction with its DCF Models in the event that the total market capitalization of its stock drops below its consolidated stockholders’ equity balance for a sustained period. | |||||||||||||||||||||||||||||||
Considerable management judgment is necessary in reaching a conclusion regarding the reasonableness of fair value estimates, evaluating the most likely impact of a range of possible external conditions, considering the resulting operating changes and their impact on estimated future cash flows, determining the appropriate discount factors to use, and selecting and weighting appropriate comparable market level inputs. | |||||||||||||||||||||||||||||||
Annual Impairment Testing in the First Quarter of Fiscal Year 2015 – The Company performed its annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal year 2015. As a result of our testing of indefinite-lived trademarks and licenses, we recorded a non-cash asset impairment charge of $9.00 million ($8.16 million after tax). The charge was related to certain trademarks in our Personal Care segment, which were written down to their estimated fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. | |||||||||||||||||||||||||||||||
Annual Impairment Testing in the First Quarter of Fiscal Year 2014 – The Company performed its annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal year 2014. As a result of our testing of indefinite-lived trademarks and licenses, we recorded a non-cash asset impairment charge of $12.05 million ($12.03 million after tax). The charge was related to certain trademarks in our Personal Care segment, which were written down to their estimated fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. | |||||||||||||||||||||||||||||||
Annual Impairment Testing in the First Quarter of Fiscal Year 2013 – The Company performed its annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal year 2013. As a result of its testing, the Company concluded no impairment charges were required as the estimated fair value of the indefinite-lived trademarks and licenses, reporting unit net assets and the Company’s estimated enterprise value exceeded their respective carrying values as of the date of evaluation. | |||||||||||||||||||||||||||||||
The following tables summarize by operating segment the changes in our goodwill and intangible assets for fiscal years 2015 and 2014: | |||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Balances at | Balances at | ||||||||||||||||||||||||||||||
Weighted | February 28, 2014 | Year Ended February 28, 2015 | February 28, 2015 | ||||||||||||||||||||||||||||
Average | Gross | Cumulative | Acquisition | Gross | Cumulative | ||||||||||||||||||||||||||
Life | Carrying | Goodwill | and Retirement | Carrying | Goodwill | Accumulated | Net Book | ||||||||||||||||||||||||
Description / Life | (Years) | Amount | Impairments | Additions | Impairments | Adjustments | Amount | Impairments | Amortization | Value | |||||||||||||||||||||
Housewares: | |||||||||||||||||||||||||||||||
Goodwill | $ | 166,132 | $ | - | $ | - | $ | - | $ | - | $ | 166,132 | $ | - | $ | - | $ | 166,132 | |||||||||||||
Trademarks - indefinite | 75,200 | - | - | - | - | 75,200 | - | - | 75,200 | ||||||||||||||||||||||
Other intangibles - finite | 1.7 | 15,693 | - | 244 | - | -183 | 15,754 | - | -12,331 | 3,423 | |||||||||||||||||||||
Subtotal | 257,025 | - | 244 | - | -183 | 257,086 | - | -12,331 | 244,755 | ||||||||||||||||||||||
Healthcare / Home Environment: | |||||||||||||||||||||||||||||||
Goodwill | 251,758 | - | - | - | - | 251,758 | - | - | 251,758 | ||||||||||||||||||||||
Trademarks - indefinite | 54,000 | - | - | - | - | 54,000 | - | - | 54,000 | ||||||||||||||||||||||
Licenses - finite | 2.0 | 15,300 | - | - | - | - | 15,300 | - | -9,377 | 5,923 | |||||||||||||||||||||
Other Intangibles - finite | 6.7 | 114,490 | - | 827 | - | -1,675 | 113,642 | - | -43,848 | 69,794 | |||||||||||||||||||||
Subtotal | 435,548 | - | 827 | - | -1,675 | 434,700 | - | -53,225 | 381,475 | ||||||||||||||||||||||
Nutritional Supplements: | |||||||||||||||||||||||||||||||
Goodwill | - | - | 95,308 | - | 1,178 | 96,486 | - | - | 96,486 | ||||||||||||||||||||||
Brand assets - indefinite | - | - | 65,500 | - | - | 65,500 | - | - | 65,500 | ||||||||||||||||||||||
Other intangibles - finite | 6.3 | - | - | 43,800 | - | - | 43,800 | - | -4,171 | 39,629 | |||||||||||||||||||||
Subtotal | - | - | 204,608 | - | 1,178 | 205,786 | - | -4,171 | 201,615 | ||||||||||||||||||||||
Personal Care: | |||||||||||||||||||||||||||||||
Goodwill | 81,841 | -46,490 | - | - | - | 81,841 | -46,490 | - | 35,351 | ||||||||||||||||||||||
Trademarks - indefinite | 63,754 | - | - | -9,000 | - | 54,754 | - | - | 54,754 | ||||||||||||||||||||||
Trademarks - finite | 13.6 | 150 | - | - | - | - | 150 | - | -82 | 68 | |||||||||||||||||||||
Licenses - indefinite | 10,300 | - | - | - | - | 10,300 | - | - | 10,300 | ||||||||||||||||||||||
Licenses - finite | 7.8 | 18,683 | - | - | - | -4,987 | 13,696 | - | -11,216 | 2,480 | |||||||||||||||||||||
Other intangibles - finite | 3.2 | 49,437 | - | 85 | - | -1,561 | 47,961 | - | -30,602 | 17,359 | |||||||||||||||||||||
Subtotal | 224,165 | -46,490 | 85 | -9,000 | -6,548 | 208,702 | -46,490 | -41,900 | 120,312 | ||||||||||||||||||||||
Total | $ | 916,738 | $ | -46,490 | $ | 205,764 | $ | -9,000 | $ | -7,228 | $ | 1,106,274 | $ | -46,490 | $ | -111,627 | $ | 948,157 | |||||||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Balances at | Balances at | ||||||||||||||||||||||||||||||
Weighted | February 28, 2013 | Year Ended February 28, 2014 | February 28, 2014 | ||||||||||||||||||||||||||||
Average | Gross | Cumulative | Acquisition | Gross | Cumulative | ||||||||||||||||||||||||||
Life | Carrying | Goodwill | and Retirement | Carrying | Goodwill | Accumulated | Net Book | ||||||||||||||||||||||||
Description / Life | (Years) | Amount | Impairments | Additions | Impairments | Adjustments | Amount | Impairments | Amortization | Value | |||||||||||||||||||||
Housewares: | |||||||||||||||||||||||||||||||
Goodwill | $ | 166,132 | $ | - | $ | - | $ | - | $ | - | $ | 166,132 | $ | - | $ | - | $ | 166,132 | |||||||||||||
Trademarks - indefinite | 75,200 | - | - | - | - | 75,200 | - | - | 75,200 | ||||||||||||||||||||||
Other intangibles - finite | 2.7 | 15,609 | - | 339 | - | -255 | 15,693 | - | -11,149 | 4,544 | |||||||||||||||||||||
Subtotal | 256,941 | - | 339 | - | -255 | 257,025 | - | -11,149 | 245,876 | ||||||||||||||||||||||
Healthcare / Home Environment: | |||||||||||||||||||||||||||||||
Goodwill | 251,758 | - | - | - | - | 251,758 | - | - | 251,758 | ||||||||||||||||||||||
Trademarks - indefinite | 54,000 | - | - | - | - | 54,000 | - | - | 54,000 | ||||||||||||||||||||||
Licenses - finite | 3.0 | 15,300 | - | - | - | - | 15,300 | - | -6,416 | 8,884 | |||||||||||||||||||||
Other Intangibles - finite | 7.6 | 114,490 | - | - | - | - | 114,490 | - | -34,606 | 79,884 | |||||||||||||||||||||
Subtotal | 435,548 | - | - | - | - | 435,548 | - | -41,022 | 394,526 | ||||||||||||||||||||||
Personal Care: | |||||||||||||||||||||||||||||||
Goodwill | 81,841 | -46,490 | - | - | - | 81,841 | -46,490 | - | 35,351 | ||||||||||||||||||||||
Trademarks - indefinite | 75,803 | - | - | -12,049 | - | 63,754 | - | - | 63,754 | ||||||||||||||||||||||
Trademarks - finite | 14.6 | 150 | - | - | - | - | 150 | - | -77 | 73 | |||||||||||||||||||||
Licenses - indefinite | 10,300 | - | - | - | - | 10,300 | - | - | 10,300 | ||||||||||||||||||||||
Licenses - finite | 6.5 | 18,683 | - | - | - | - | 18,683 | - | -15,887 | 2,796 | |||||||||||||||||||||
Other intangibles - finite | 4.0 | 49,437 | - | - | - | - | 49,437 | - | -26,563 | 22,874 | |||||||||||||||||||||
Subtotal | 236,214 | -46,490 | - | -12,049 | - | 224,165 | -46,490 | -42,527 | 135,148 | ||||||||||||||||||||||
Total | $ | 928,703 | $ | -46,490 | $ | 339 | $ | -12,049 | $ | -255 | $ | 916,738 | $ | -46,490 | $ | -94,698 | $ | 775,550 | |||||||||||||
In the third quarter of fiscal year 2015, we amended the terms of our trademark licensing agreement with Honeywell International Inc. to relinquish the rights to market Honeywell branded portable air purifiers after December 31, 2015 in twelve selected developing countries, including China. In exchange for the amendment, we received a one‐time cash payment of $7 million ($6.98 million after tax), which was recorded as a gain in SG&A. For fiscal years 2015, 2014 and 2013, sales into the relinquished countries accounted for approximately 0.3, 0.2 and 0.1 percent, respectively, of the Healthcare / Home Environment segment’s total net sales. We plan to market portable air purifiers in the relinquished markets under non‐Honeywell branded trademarks and retained the rights to market Honeywell portable air purifiers in other countries, including the United States, Canada and all European countries. For categories such as portable fans, portable heaters and portable humidifiers, we remain the Honeywell global licensee under the same material terms as our previous agreement. | |||||||||||||||||||||||||||||||
The following table summarizes the amortization expense attributable to intangible assets for the fiscal years 2015, 2014 and 2013, as well as estimated amortization expense for the fiscal years 2016 through 2020: | |||||||||||||||||||||||||||||||
AMORTIZATION OF INTANGIBLE ASSETS | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Aggregate Amortization Expense | |||||||||||||||||||||||||||||||
For the fiscal years ended | |||||||||||||||||||||||||||||||
Feb-15 | $ | 25,328 | |||||||||||||||||||||||||||||
Feb-14 | $ | 21,612 | |||||||||||||||||||||||||||||
Feb-13 | $ | 22,400 | |||||||||||||||||||||||||||||
Estimated Amortization Expense | |||||||||||||||||||||||||||||||
For the fiscal years ended | |||||||||||||||||||||||||||||||
Feb-16 | $ | 27,138 | |||||||||||||||||||||||||||||
Feb-17 | $ | 26,826 | |||||||||||||||||||||||||||||
Feb-18 | $ | 22,885 | |||||||||||||||||||||||||||||
Feb-19 | $ | 18,492 | |||||||||||||||||||||||||||||
Feb-20 | $ | 16,733 | |||||||||||||||||||||||||||||
Many of the license agreements under which we sell or intend to sell products with trademarks owned by other entities require that we pay minimum royalties. Some license agreements also require that we make minimum levels of advertising expenditures. For fiscal year 2016, estimated minimum royalties due and minimum advertising expenditures under these license agreements total $12.57 and $5.74 million, respectively. | |||||||||||||||||||||||||||||||
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | ||||||
Feb. 28, 2015 | |||||||
Acquisitions | |||||||
Acquisitions | NOTE 6 – ACQUISITIONS | ||||||
On June 30, 2014, we completed the acquisition of Healthy Directions, a leader in the premium branded vitamin, mineral and supplement market for a total cash purchase price of $195.94 million. The purchase price was funded from borrowings under the Credit Agreement, as described below, and cash on hand. The sellers were certain funds controlled by American Securities, LLC and ACI Capital Co., LLC. Significant assets acquired include inventory, property and equipment, customer relationships, brand assets, and goodwill. Brand assets consist of a portfolio of complementary marketing related assets determined to have indefinite lives that are utilized across multiple product lines. Brand assets include trademarks, tradenames, product formulations, proprietary research, doctor endorsements and all other associated elements of brand equity. Acquisition-related expenses incurred in fiscal year 2015 were approximately $3.61 million ($2.31 million after tax). Healthy Directions reports its operations as the Nutritional Supplements segment. | |||||||
We accounted for the acquisition as the purchase of a business and recorded the excess purchase price as goodwill. The goodwill recognized is expected to be deductible for income tax purposes. As of February 28, 2015, we completed our analysis of the economic lives of all the assets acquired and determined the appropriate allocation of the initial purchase price. We assigned the acquired brand assets an indefinite economic life and are amortizing the customer relationships over an expected weighted average life of approximately 7 years. For the customer relationships, we used historical attrition rates to assign an expected life. Since the brand assets acquired are considered to have an indefinite life, they are not subject to amortization. | |||||||
The following table presents the acquisition date fair value of the net assets of Healthy Directions. These balances are provisional and may be subject to additional adjustment: | |||||||
HEALTHY DIRECTIONS - NET ASSETS RECORDED UPON ACQUISITION AT JUNE 30, 2014 | |||||||
(in thousands) | |||||||
Assets: | |||||||
Receivables | $ | 257 | |||||
Inventory | 6,226 | ||||||
Prepaid expenses and other current assets | 1,875 | ||||||
Property and equipment | 5,962 | ||||||
Goodwill | 95,308 | ||||||
Brand assets - indefinite | 65,500 | ||||||
Customer relationships - definite | 43,800 | ||||||
Subtotal - assets | 218,928 | ||||||
Liabilities: | |||||||
Accounts payable | 6,479 | ||||||
Accrued expenses | 13,964 | ||||||
Other long-term liabilities | 2,542 | ||||||
Subtotal - liabilities | 22,985 | ||||||
Net assets recorded | $ | 195,943 | |||||
The fair values of the above assets acquired were estimated by applying income and market approaches. The fair value measurement of the intangible assets are based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements. Key assumptions included various discount rates based upon a 14.6 percent weighted average cost of capital, a royalty rate of 5 percent used in the determination of the brand assets fair value, and a customer attrition rate averaging 14 percent per year used in the determination of customer relationship values. | |||||||
The impact of the Healthy Directions acquisition on the Company’s consolidated statements of income from the acquisition date through February 28, 2015 is as follows: | |||||||
HEALTHY DIRECTIONS - IMPACT ON CONSOLIDATED STATEMENT OF INCOME | |||||||
June 30, 2014 (Acquisition Date) through February 28, 2015 | |||||||
(in thousands, except earnings per share data) | |||||||
Eight Months | |||||||
Ended | |||||||
February 28, 2015 | |||||||
Sales revenue, net | $ | 100,395 | |||||
Net income | 3,507 | ||||||
Earnings per share: | |||||||
Basic | $ | 0.12 | |||||
Diluted | $ | 0.12 | |||||
Net income for the eight months ended February 28, 2015 includes after tax acquisition-related expenses of $2.31 million. | |||||||
The following supplemental pro forma information presents the Company’s financial results as if the Healthy Directions acquisition had occurred as of the beginning of the fiscal periods presented. 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, 2013, and this information is not intended to be indicative of future results. | |||||||
HEALTHY DIRECTIONS | |||||||
PRO FORMA IMPACT ON CONSOLIDATED STATEMENTS OF INCOME | |||||||
As if the Acquisition had been completed at the beginning of March 1, 2013 | |||||||
(in thousands, except earnings per share data) | |||||||
Fiscal Years Ended | |||||||
the Last Day of February, | |||||||
2015 | 2014 | ||||||
Sales revenue, net | $ | 1,498,249 | $ | 1,465,057 | |||
Net income | 134,614 | 88,460 | |||||
Earnings per share: | |||||||
Basic | $ | 4.71 | $ | 2.76 | |||
Diluted | $ | 4.64 | $ | 2.73 | |||
CREDIT_AGREEMENT
CREDIT AGREEMENT | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
CREDIT AGREEMENT | |||||||||||
Credit agreement | NOTE 7 – CREDIT AGREEMENT | ||||||||||
On June 11, 2014, in connection with the acquisition of Healthy Directions, we entered into a fourth amendment to our credit agreement with Bank of America, N.A. and other lenders. We also entered into an amendment of a guaranty agreement in favor of Bank of America, N.A. and other lenders, which relates to a loan with the Mississippi Business Finance Corporation (the “MBFC Loan”). These amendments, among other things, increased the unsecured revolving commitment of the credit agreement from $375 million to $570 million. Additionally, the amendments modified the limitation on dividends and stock repurchases to allow for the Company to declare or pay cash dividends to shareholders or make stock repurchases if, after giving effect to the dividends or share repurchases, the leverage ratio is not greater than 2.75 to 1.00. Finally, the amendments increased the leverage ratio limit to 3.25 to 1.00, from a previous limit of 3.00 to 1.00. | |||||||||||
On January 16, 2015, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the other lenders party thereto. The unsecured revolving commitment under the Credit Agreement was increased from $570 million to $650 million, subject to the terms and limitations described below. The maturity of the commitment under the Credit Agreement was extended from December 31, 2015 to January 16, 2020. Accordingly, borrowings under the Credit Agreement are reported as long-term debt at February 28, 2015. Additionally, the LIBOR interest rate, letter of credit fees and loan commitment fees under the Credit Agreement were reduced and the limitations of certain covenants were eased. Borrowings under the Credit Agreement accrue interest at a “Base Rate” plus a margin of zero to 1.00 percent per annum based on the leverage ratio at the time of borrowing. The Base Rate is equal to the highest of the Federal Funds Rate plus 0.50 percent, Bank of America’s prime rate, or the LIBOR rate plus 1.00 percent. Alternatively, if the Company elects, borrowings accrue interest based on the respective 1, 2, 3, or 6-month LIBOR rate plus a margin of 1.00 to 2.00 percent per annum based upon the Leverage Ratio at the time of the borrowing. The Company will incur loan commitment fees under the Credit Agreement at a rate ranging from 0.15 to 0.35 percent per annum on the unused balance of the Credit Agreement. Additionally, the Company will incur letter of credit fees under the Credit Agreement at a rate ranging from 1.00 to 2.00 percent per annum on the face value of any letter of credit. Outstanding letters of credit reduce the borrowing availability under the Credit Agreement on a dollar-for-dollar basis. All obligations under the Credit Agreement are unconditionally guaranteed, on a joint and several basis, by the Company and certain of the Company’s subsidiaries. | |||||||||||
The Credit Agreement and our other debt agreements require the maintenance of a maximum leverage ratio and minimum interest coverage ratio, and contain other customary covenants, which restrict or limit the Company from incurring liens on any of its properties and place certain limits on the amount of dividends the Company may pay for shares of common stock the Company may repurchase, among other things. The Company was in compliance with the terms of its debt agreements as of February 28, 2015. | |||||||||||
In connection with the amendments to our credit agreement in fiscal year 2015, we incurred a total of $4.59 million in new debt acquisition costs that are being amortized over the remaining term of the Credit Agreement. As of February 28, 2015, there was $337.50 million in revolving debt and $0.77 million of open letters of credit outstanding under the Credit Agreement. As of February 28, 2015, the amount available for borrowings under the Credit Agreement was $311.73 million. | |||||||||||
The following table contains information about interest rates on our Credit Agreement and the related weighted average borrowings outstanding for the periods covered by our consolidated statements of income: | |||||||||||
INTEREST RATES ON CREDIT AGREEMENT | |||||||||||
(in thousands) | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Average borrowings outstanding (1) | $ | 300,280 | $ | 29,680 | $ | 143,100 | |||||
Average interest rate during each year (2) | 2.5 | % | 1.3 | % | 1.7 | % | |||||
Interest rate range during each year | 1.9 - 4.4 | % | 1.2 - 3.6 | % | 1.6 - 4.0 | % | |||||
Weighted average interest rates on borrowings outstanding at year end | 1.9 | % | 0.0 | % | 1.6 | % | |||||
(1)Average borrowings outstanding is computed as the average of the current and four prior quarters ending balances of our revolving credit facility. | |||||||||||
(2)The average interest rate during each year is computed by dividing the total interest expense associated with our revolving credit facility for a fiscal year by the average borrowings outstanding for the same fiscal year. | |||||||||||
ACCRUED_EXPENSES_AND_OTHER_CUR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended | ||||||
Feb. 28, 2015 | |||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 8 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||||||
A summary of accrued expenses and other current liabilities is as follows: | |||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||||||
(in thousands) | |||||||
Balances at February 28, | |||||||
2015 | 2014 | ||||||
Accrued compensation, benefits and payroll taxes | $ | 44,382 | $ | 69,877 | |||
Accrued sales returns, discounts and allowances | 24,271 | 25,297 | |||||
Accrued warranty returns | 23,553 | 19,269 | |||||
Accrued advertising | 18,930 | 16,414 | |||||
Accrued product liability, legal and professional fees | 6,001 | 5,705 | |||||
Accrued royalties | 7,683 | 5,712 | |||||
Accrued property, sales and other taxes | 6,850 | 6,835 | |||||
Derivative liabilities, current | 240 | 1,596 | |||||
Liability for uncertain tax positions | - | 453 | |||||
Other | 9,291 | 5,530 | |||||
Total accrued expenses and other current liabilities | $ | 141,201 | $ | 156,688 | |||
OTHER_LIABILITIES_NONCURRENT
OTHER LIABILITIES, NONCURRENT | 12 Months Ended | ||||||
Feb. 28, 2015 | |||||||
OTHER LIABILITIES, NONCURRENT | |||||||
OTHER LIABILITIES, NONCURRENT | NOTE 9 – OTHER LIABILITIES, NONCURRENT | ||||||
A summary of other noncurrent liabilities is as follows: | |||||||
OTHER LIABILITIES, NONCURRENT | |||||||
(in thousands) | |||||||
Balances at February 28, | |||||||
2015 | 2014 | ||||||
Deferred compensation liability | $ | 7,091 | $ | 7,257 | |||
Liability for uncertain tax positions | 10,295 | 13,471 | |||||
Other liabilities | 5,921 | 1,038 | |||||
Total other liabilities, noncurrent | $ | 23,307 | $ | 21,766 | |||
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | ||||||||||||
Feb. 28, 2015 | |||||||||||||
Debt | |||||||||||||
Long-term debt | NOTE 10 – LONG-TERM DEBT | ||||||||||||
A summary of long-term debt is as follows: | |||||||||||||
LONG-TERM DEBT | |||||||||||||
(dollars in thousands) | |||||||||||||
Original | |||||||||||||
Date | Interest | Balances at February 28, | |||||||||||
Borrowed | Rates | Matures | 2015 | 2014 | |||||||||
$37.61 million unsecured loan with the Mississippi Business Finance Corporation, interest is set and payable quarterly at a Base Rate, plus a margin of up to 1.00%, or applicable LIBOR plus a margin of up to 2.00%, as determined by the interest rate elected and the Leverage Ratio. Loan subject to holder's call on or after March 1, 2018. Loan can be prepaid without penalty. (1) | 13-Mar | 1.92 | % | 23-Mar | $ | 35,707 | $ | 37,607 | |||||
$75 million unsecured floating interest rate Senior Notes. Interest set and payable quarterly at three month LIBOR plus 90 basis points. Principal was due and paid on June 30, 2014. (2) | 4-Jun | 6.01 | % | 14-Jun | - | 75,000 | |||||||
$100 million unsecured Senior Notes payable at a fixed interest rate of 3.90%. Interest payable semi-annually. Annual principal payments of $20 million began in January 2014. Prepayment of notes are subject to a "make whole" premium. | 11-Jan | 3.90 | % | 18-Jan | 60,000 | 80,000 | |||||||
Credit Agreement. (3) | 15-Jan | Floating | 20-Jan | 337,500 | - | ||||||||
Total long-term debt | 433,207 | 192,607 | |||||||||||
Less current maturities of long-term debt | -21,900 | -96,900 | |||||||||||
Long-term debt, excluding current maturities | $ | 411,307 | $ | 95,707 | |||||||||
-1 | A $1.90 million principal payment was made on March 1, 2014. The remaining loan balance is payable as follows: $1.90 million on March 1 in each of 2015, 2018, 2019, 2020, 2021, and 2022; $3.80 million on March 1, 2016; $5.70 million on March 1, 2017; and $14.81 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023. | ||||||||||||
-2 | Floating interest rates were hedged with an interest rate swap to effectively fix interest rates while the Senior Notes were outstanding. Additional information regarding the swap is provided in Notes (12) and (13) to these consolidated financial statements. | ||||||||||||
-3 | See Note (7) to these consolidated financial statements for further information regarding the terms of the Credit Agreement. | ||||||||||||
The fair market value of the fixed rate debt at February 28, 2015 computed using a discounted cash flow analysis was $62.01 million compared to the $60 million book value and represents a Level 2 liability. Our other long-term debt has floating interest rates, and its book value approximates its fair value at February 28, 2015. | |||||||||||||
All of our debt is unconditionally guaranteed, on a joint and several basis, by the Company and certain of its subsidiaries. Our debt agreements require the maintenance of certain financial covenants, including maximum leverage ratios, minimum interest coverage ratios and minimum consolidated net worth levels (as each of these terms is defined in the various agreements). Our debt agreements also contain other customary covenants, including, among other things, covenants restricting or limiting the Company, except under certain conditions set forth therein, from (1) incurring debt, (2) incurring liens on its properties, (3) making certain types of investments, (4) selling certain assets or making other fundamental changes relating to mergers and consolidations, and (5) repurchasing shares of our common stock and paying dividends. | |||||||||||||
As of February 28, 2015, our debt agreements effectively limited our ability to incur more than $296.82 million of additional debt from all sources, including our Credit Agreement. We were in compliance with the terms of these agreements as of February 28, 2015. | |||||||||||||
The following table contains a summary of the components of our interest expense for the periods covered by our consolidated statements of income: | |||||||||||||
INTEREST EXPENSE | |||||||||||||
(in thousands) | |||||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||||
2015 | 2014 | 2013 | |||||||||||
Interest and commitment fees | $ | 11,958 | $ | 5,610 | $ | 8,858 | |||||||
Deferred finance costs | 1,846 | 911 | 903 | ||||||||||
Interest rate swap settlements, net | 1,218 | 3,672 | 3,584 | ||||||||||
Total interest expense | $ | 15,022 | $ | 10,193 | $ | 13,345 | |||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | NOTE 11 - INCOME TAXES | ||||||||||
Our components of income before income tax expense are as follows: | |||||||||||
COMPONENTS OF INCOME BEFORE TAXES | |||||||||||
(in thousands) | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
U.S. | $ | 34,876 | $ | 38,147 | $ | 50,834 | |||||
Non-U.S. | 112,338 | 68,987 | 84,680 | ||||||||
Total | $ | 147,214 | $ | 107,134 | $ | 135,514 | |||||
Our components of income tax expense (benefit) are as follows: | |||||||||||
COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) | |||||||||||
(in thousands) | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
U.S. | |||||||||||
Current | $ | 18,525 | $ | 24,736 | $ | 26,369 | |||||
Deferred | -3,014 | -9,021 | -8,776 | ||||||||
15,511 | 15,715 | 17,593 | |||||||||
Non-U.S. | |||||||||||
Current | -645 | 6,254 | 5,464 | ||||||||
Deferred | 1,184 | -1,083 | -3,209 | ||||||||
539 | 5,171 | 2,255 | |||||||||
Total | $ | 16,050 | $ | 20,886 | $ | 19,848 | |||||
Our total income tax expense differs from the amounts computed by applying the statutory tax rate to income before income taxes. A summary of these differences are as follows: | |||||||||||
INCOME TAX RATE RECONCILIATION | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Expected effective income tax rate at the U.S. statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | |||||
Impact of U.S. state income taxes and other | 2.3 | % | 2.2 | % | -0.2 | % | |||||
Decrease in income taxes due to income from non-U.S. operations subject to varying income tax rates | -10.9 | % | -9.1 | % | -11.4 | % | |||||
Effect of zero tax rate in Macau | -16.6 | % | -12.3 | % | -8.8 | % | |||||
Decrease in income taxes resulting from tax audit settlements | -0.5 | % | -0.2 | % | - | % | |||||
Effect of asset impairment charges, most of which are non-deductible | 1.6 | % | 3.9 | % | - | % | |||||
Effective income tax rate | 10.9 | % | 19.5 | % | 14.6 | % | |||||
Each year there are significant transactions or events that are incidental to our core businesses and that by a combination of their nature and jurisdiction, can have a disproportionate impact on our reported effective tax rates. Without these transactions or events, the trend in our effective tax rates would follow a more normalized pattern. | |||||||||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of the last day of February 2015 and 2014 are as follows: | |||||||||||
COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES | |||||||||||
(in thousands) | |||||||||||
Balances at February 28, | |||||||||||
2015 | 2014 | ||||||||||
Deferred tax assets, gross: | |||||||||||
Operating loss carryforwards | $ | 17,193 | $ | 17,455 | |||||||
Accounts receivable | 4,367 | 4,068 | |||||||||
Inventories | 8,450 | 8,528 | |||||||||
Accrued expenses and other | 17,666 | 20,307 | |||||||||
Foreign currency contracts, interest rate swaps and deferred exchange gains | 68 | 528 | |||||||||
Total gross deferred tax assets | 47,744 | 50,886 | |||||||||
Valuation allowance | -16,982 | -15,602 | |||||||||
Deferred tax liabilities: | |||||||||||
Depreciation and amortization | -54,788 | -60,670 | |||||||||
Total deferred tax liabilities, net | $ | -24,026 | $ | -25,386 | |||||||
In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, expected future taxable income and tax planning strategies in making this assessment. In fiscal year 2015, the net increase in our valuation allowance was $1.38 million, principally due to changes in estimates regarding the value of operating loss carryforwards to be used in the future. | |||||||||||
The schedule below shows the composition of our operating loss carryforwards and the approximate future taxable income we will need to generate in order to utilize all carryforwards prior to their expiration. | |||||||||||
SUMMARY OF OPERATING LOSS CARRYFORWARDS | |||||||||||
(in thousands) | |||||||||||
Balances at February 28, 2015 | |||||||||||
Tax Year | Gross | Required | |||||||||
Expiration | Deferred Tax | Future Taxable | |||||||||
Date Range | Assets | Income | |||||||||
U.S. operating loss carryforwards | 2016 - 2032 | $ | 1,935 | $ | 6,260 | ||||||
Non-U.S. operating loss carryforwards with definite carryover periods | 2014 - 2025 | 1,848 | 12,203 | ||||||||
Non-U.S. operating loss carryforwards with indefinite carryover periods | Indefinite | 13,410 | 44,757 | ||||||||
Subtotals | 17,193 | 63,220 | |||||||||
Less portion of valuation allowance established for operating loss carryforwards | -14,649 | -49,393 | |||||||||
Total | $ | 2,544 | $ | 13,827 | |||||||
As of February 28, 2015, subject to the valuation allowances provided, we believe it is more likely than not that we will realize the net benefits of these deferred tax assets. Any future amount of deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during any carryforward periods are reduced. | |||||||||||
United States Income Taxes – The U.S. federal income tax returns of Kaz, Inc. and its U.S. subsidiaries for tax years 2003, 2007 and 2008 continue to be under examination as of February 28, 2015. During fiscal year 2012, the Company received notices of proposed adjustments related to Kaz’s 2007 and 2008 tax years. The Company is protesting the adjustments and does not expect them to have a material impact on our results of operations or financial position. | |||||||||||
During fiscal year 2014, the IRS began an audit of the U.S. Federal income tax returns of Helen of Troy Texas Corporation and its subsidiaries for the 2011 and 2012 tax years. As of February 28, 2015, no adjustments have been proposed. | |||||||||||
Hungary Income Taxes – The Company is currently under audit in Hungary with respect to the 2005, 2006 and 2009 tax years and has received notices of proposed adjustments for each year. We are currently challenging these adjustments through judicial proceedings and have recorded an unrecognized tax benefit of $2.54 million. | |||||||||||
Income Tax Provisions – We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments must be used in the calculation of certain tax assets and liabilities because of differences in the timing of recognition of revenue and expense for tax and financial statement purposes. We must assess the likelihood that we will be able to recover our deferred tax assets. If recovery is not likely, we must increase our provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. As changes occur in our assessments regarding our ability to recover our deferred tax assets, our tax provision is increased in any period in which we determine that the recovery is not probable. | |||||||||||
Uncertainty in Income Taxes – The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. When there is uncertainty in a tax position taken or expected to be taken in a tax return, a liability is recorded for the amount of the position that could be challenged and overturned through any combination of audit, appeals or litigation processes. This amount is determined through criteria and a methodology prescribed by GAAP and is referred to as an “unrecognized tax benefit.” In the period these liabilities are established, we record an associated charge to our provision for taxes. If based on new information in a later period, we determine that payment of these amounts are not probable, or that the recorded tax liability differs from what we expect the ultimate assessment to be, we adjust the liability accordingly and recognize a related tax benefit or expense. | |||||||||||
During fiscal years 2015 and 2014, changes in the total amount of unrecognized tax benefits were as follows: | |||||||||||
UNRECOGNIZED TAX BENEFITS | |||||||||||
(in thousands) | |||||||||||
Fiscal Years Ended | |||||||||||
the Last Day of February, | |||||||||||
2015 | 2014 | ||||||||||
Total unrecognized tax benefits, beginning balance | $ | 13,924 | $ | 15,759 | |||||||
Tax positions taken during the current period | 341 | - | |||||||||
Changes in tax positions taken during a prior period | -1,802 | 536 | |||||||||
Changes due to lapse in statute of limitations | -523 | -2,363 | |||||||||
Impact of foreign currency remeasurement on unrecognized tax benefits in the current period | -763 | 216 | |||||||||
Changes resulting from agreements with taxing authorities | -882 | -224 | |||||||||
Total unrecognized tax benefits, ending balance | 10,295 | 13,924 | |||||||||
Less current unrecognized tax benefits | - | -453 | |||||||||
Noncurrent unrecognized tax benefits | $ | 10,295 | $ | 13,471 | |||||||
We do not expect any additional material changes to our existing unrecognized tax benefits during the next twelve months resulting from any issues currently pending with tax authorities. | |||||||||||
The Company classifies all interest and penalties on uncertain tax positions as income tax expense. As of February 28, 2015 and February 28, 2014, the liability for tax-related interest expense and penalties included in unrecognized tax benefits was $1.53 and $2.66 million for interest expense and $1.29 and $1.48 million for penalties, respectively. Additionally, the 2015, 2014 and 2013 provisions for income tax include combined tax-related interest and penalties expense of $0.23, $0.56 and $1.03 million, respectively. | |||||||||||
We file income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. As of February 28, 2015, tax years under examination or still subject to examination by material tax jurisdictions are as follows: | |||||||||||
Jurisdiction | Tax Years Under Examination | Open Tax Years | |||||||||
Mexico | - None - | 2009 | - | 2014 | |||||||
United Kingdom | - None - | 2014 | - | 2015 | |||||||
United States * | 2003, 2007, 2008, 2011, 2012 | 2003, 2007, 2008, 2011 - 2015 | |||||||||
Switzerland | - None - | 2008 | - | 2015 | |||||||
Hong Kong | - None - | 2007 | - | 2015 | |||||||
France | - None - | 2012 | - | 2015 | |||||||
Hungary | 2005, 2006, 2009 | 2005, 2006, 2009 - 2015 | |||||||||
* Kaz, Inc. and its U.S. subsidiaries are under examination for the 2003, 2007 and 2008 tax years. Helen of Troy Texas Corporation and its subsidiaries are currently under examination for the 2011 and 2012 tax years. | |||||||||||
FAIR_VALUE
FAIR VALUE | 12 Months Ended | ||||||
Feb. 28, 2015 | |||||||
Fair Value | |||||||
Fair Value | NOTE 12 – FAIR VALUE | ||||||
The following tables present the fair value of our financial assets and liabilities carried at fair value and measured on a recurring basis as of the last day of February 2015 and 2014: | |||||||
FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES | |||||||
(in thousands) | |||||||
Fair Values at | |||||||
February 28, 2015 | |||||||
Description | (Level 2) (1) | ||||||
Assets: | |||||||
Money market accounts | $ | 1,692 | |||||
Foreign currency contracts | 129 | ||||||
Total assets | $ | 1,821 | |||||
Liabilities: | |||||||
Long-term debt - fixed rate (2) | $ | 62,006 | |||||
Long-term debt - floating rate | 35,707 | ||||||
Foreign currency contracts | 240 | ||||||
Total liabilities | $ | 97,953 | |||||
Fair Values at | |||||||
February 28, 2014 | |||||||
Description | (Level 2) (1) | ||||||
Assets: | |||||||
Money market accounts | $ | 1,549 | |||||
Total assets | $ | 1,549 | |||||
Liabilities: | |||||||
Long-term debt - fixed rate (2) | $ | 83,951 | |||||
Long-term debt - floating rate | 112,607 | ||||||
Interest rate swaps and foreign currency contracts | 1,596 | ||||||
Total liabilities | $ | 198,154 | |||||
-1 | Our financial assets and liabilities are classified as Level 2 assets because their valuation is dependent on observable inputs and other quoted prices for similar assets or liabilities, or model-derived valuations whose significant value drivers are observable. | ||||||
-2 | Debt values are reported at estimated fair value in these tables, but are recorded in the accompanying consolidated balance sheets at the undiscounted value of remaining principal payments due. | ||||||
The carrying amounts of cash and cash equivalents, receivables and accounts payable approximate fair value because of the short maturity of these items. Money market accounts included in cash and cash equivalents in the accompanying consolidated balance sheets consist of interest bearing deposits with banks that pay comparable money market interest rates. | |||||||
We use derivatives for hedging purposes and our derivatives are primarily foreign currency contracts and interest rate swaps. See Notes (1), (13) and (18) to these consolidated financial statements for more information on our hedging activities. | |||||||
We classify our fixed and floating rate debt as Level 2 items because the estimation of the fair market value of these financial assets requires the use of a discount rate based upon current market rates of interest for obligations with comparable remaining terms. Such comparable rates are considered significant other observable market inputs. The fair market value of the fixed rate debt was computed using a discounted cash flow analysis and discount rates at February 28, 2015 and 2014 of 2.05 and 1.75, respectively. All other long-term debt has floating interest rates, and its book value approximates its fair value as of the reporting date. | |||||||
The Company’s other non-financial assets include goodwill and other intangible assets, which we classify as Level 3 items. These assets are measured at fair value on a non-recurring basis as part of the Company’s impairment assessments and as circumstances require. As discussed in Note (5) to these consolidated financial statements, in connection with our annual impairment testing during the first quarters of fiscal years 2015 and 2014, we recorded non-cash asset impairment charges of $9.00 million ($8.16 million after tax) and $12.05 million ($12.03 million after tax), respectively. The charges related to certain trademarks in our Personal Care segment, which were written down to their estimated fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. The table below presents other non-financial assets measured on a non-recurring basis using significant unobservable inputs (Level 3) for the fiscal years 2015 and 2014: | |||||||
OTHER NON-FINANCIAL ASSETS | |||||||
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (Level 3) | |||||||
(in thousands) | |||||||
Fiscal Years Ended | |||||||
the Last Day of February, | |||||||
2015 | 2014 | ||||||
Beginning balances | $ | 775,550 | $ | 808,869 | |||
Total gains/income (losses/expense): | |||||||
Included in net income - realized | -34,152 | -33,403 | |||||
Acquired during the period | 205,764 | 339 | |||||
Acquisition adjustments and retirements during the period | 995 | -255 | |||||
Ending balances | $ | 948,157 | $ | 775,550 | |||
FINANCIAL_INSTRUMENTS_AND_RISK
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT | 12 Months Ended | ||||||||||||||
Feb. 28, 2015 | |||||||||||||||
Financial Instruments and Risk Management | |||||||||||||||
Financial Instruments and Risk Management | NOTE 13 – FINANCIAL INSTRUMENTS AND RISK MANAGEMENT | ||||||||||||||
Foreign Currency Risk – Our functional currency is the U.S. Dollar. By operating internationally, we are subject to foreign currency risk from transactions denominated in currencies other than the U.S. Dollar (“foreign currencies”). Such transactions include sales, certain inventory purchases and operating expenses. As a result of such transactions, portions of our cash, trade accounts receivable and trade accounts payable are denominated in foreign currencies. For the fiscal years 2015, 2014 and 2013, approximately 14, 15 and 15 percent, respectively, of our net sales revenue was in foreign currencies. These sales were primarily denominated in British Pounds, Euros, Mexican Pesos, Canadian Dollars, Australian Dollars, Peruvian Soles, and Venezuelan Bolivars. We make most of our inventory purchases from the Far East and use the U.S. Dollar for such purchases. In our consolidated statements of income, exchange gains and losses resulting from the remeasurement of foreign taxes receivable, taxes payable, deferred tax assets, and deferred tax liabilities, are recognized in their respective income tax lines, and all other foreign exchange gains and losses are recognized in SG&A. We recorded net foreign exchange gains (losses), including the impact of currency hedges, of ($5.72), ($0.95) and ($2.36) million in SG&A and $0.40, ($0.17) and ($0.04) million in income tax expense during fiscal years 2015, 2014 and 2013, respectively. | |||||||||||||||
We have historically hedged against certain foreign currency exchange rate-risk by using a series of forward contracts designated as cash flow hedges to protect against the foreign currency exchange risk inherent in our forecasted transactions denominated in currencies other than the U.S. Dollar. We do not enter into any forward exchange contracts or similar instruments for trading or other speculative purposes. | |||||||||||||||
Chinese Renminbi Currency Exchange Uncertainties - A significant portion of the products we sell are purchased from third-party manufacturers in China. During fiscal years 2015 and 2013, the Chinese Renminbi remained relatively flat against the U.S. Dollar. During fiscal year 2014, the Chinese Renminbi appreciated against the U.S. Dollar approximately 3 percent. While China’s currency intervention strategy with respect to the U.S. Dollar is continuously evolving, we believe that China’s currency may continue to fluctuate against the U.S. Dollar in the short-to-intermediate term, which could result in increased product costs over time. | |||||||||||||||
Venezuelan Bolivar Currency Exchange Uncertainties - In February 2013, the Venezuelan government devalued its currency from 4.30 to 6.30 Bolivars per U.S. Dollar for all goods and services. In March 2013, the Venezuelan government announced an additional complementary auction-based exchange rate mechanism known as SICAD 1. SICAD 1 was made available to certain companies that operate in designated industry sectors. At February 28, 2015, the SICAD 1 rate was 12 Bolivars to the U.S. Dollar. | |||||||||||||||
In early 2014, the Venezuelan government created a National Center of Foreign Commerce ("CENCOEX") to control the multiple currency exchange rate mechanisms that may be available for a company to exchange funds. CENCOEX was granted the authority to determine the sectors that will be allowed to buy U.S. dollars in SICAD auctions, and subsequently introduced a more accessible market-based, SICAD 2 daily auction exchange market. | |||||||||||||||
In February 2015, the Venezuelan Government unveiled its latest foreign exchange mechanism known as SIMADI, which replaced the SICAD 2 rate as the lowest rate in Venezuela’s three-tier foreign exchange system. Under the latest program, SICAD 1 (now referred to as “SICAD”) is still being used in limited circumstances, which we believe preclude us from accessing such rates if we chose to do so. SIMADI is a somewhat less restrictive auction system whose value is determined by market forces. SIMADI is currently under a trial period and accounts for a small percentage of Venezuelan’s foreign exchange. At February 28, 2015, the SIMADI rate was approximately 177 Bolivars to the U.S. Dollar. | |||||||||||||||
Despite the recent changes made by the Venezuelan government, there remains a significant degree of uncertainty as to which exchange markets might be available to the Company. To date, we have not gained access to U.S. Dollars in Venezuela through either SICAD or SIMADI mechanisms. As of February 28, 2015, these auctions had not eliminated or changed the official rate of 6.30 Bolivars per U.S. Dollar. | |||||||||||||||
Our business in Venezuela continues to be entirely self-funded with earnings from operations. We have no current need or intention to repatriate Venezuelan earnings and remain committed to the business for the long-term. Within Venezuela, we market primarily liquid, solid- and powder-based personal care and grooming products, which are sourced almost entirely within the country. We do not have, nor do we foresee having, any need to access SICAD or SIMADI. Accordingly, we continue to utilize the official rate of 6.30 Bolivars per U.S. Dollar to re-measure our Venezuelan financial statements. | |||||||||||||||
For the fiscal years 2015, 2014 and 2013 sales in Venezuela represented approximately 0.7, 0.6 and 0.6 percent, respectively, of the Company’s consolidated net sales revenue. At February 28, 2015 and 2014, we had a U.S. Dollar based net investment in our Venezuelan business of $10.38 and $7.35 million, respectively, consisting almost entirely of working capital. | |||||||||||||||
Developments within the Venezuelan economy, including any future governmental interventions, are beyond our ability to control or predict, and we cannot assess impacts, if any, such events may have on our Venezuelan business. We will continue to closely monitor the applicability and viability of the various exchange mechanisms. | |||||||||||||||
Interest Rate Risk – Interest on our outstanding debt as of February 28, 2015 is both floating and fixed. Fixed rates are in place on $60 million of Senior Notes at 3.90 percent and floating rates are in place on the balance of all other debt outstanding, which totaled $373.21 million as of February 28, 2015. If short-term interest rates increase, we will incur higher interest rates on any future outstanding balances under our Credit Agreement and MFBC Loan. | |||||||||||||||
At February 28, 2014, floating rate $75 million Senior Notes due June 2014 had been effectively converted to fixed rate debt using an interest rate swap (the “swap”). The swap converted the total aggregate notional principal from floating interest rate payments to fixed interest rate payments at 6.01 percent. Changes in the spread between the fixed rate payment side of the swap and the floating rate receipt side of the swap offset 100 percent of the change in any period of the underlying debt’s floating rate payments. The swap was 100 percent effective. As of June 30, 2014, the swap ended concurrent with the repayment at maturity of $75 million of principal on the related Senior Notes. | |||||||||||||||
The following table summarizes the fair values of our various derivative instruments at the end of fiscal years 2015 and 2014: | |||||||||||||||
FAIR VALUES OF DERIVATIVE INSTRUMENTS | |||||||||||||||
(in thousands) | |||||||||||||||
February 28, 2015 | |||||||||||||||
Prepaid | Accrued | ||||||||||||||
Expenses | Expenses | ||||||||||||||
Final | and Other | and Other | |||||||||||||
Settlement | Notional | Current | Current | ||||||||||||
Designated as hedging instruments | Hedge Type | Date | Amount | Assets | Liabilities | ||||||||||
Foreign currency contracts - sell Euro | Cash flow | Jan-16 | € | 10,000 | $ | 129 | $ | - | |||||||
Foreign currency contracts - sell Pounds | Cash flow | Feb-16 | £ | 6,900 | - | 240 | |||||||||
Total fair value | $ | 129 | $ | 240 | |||||||||||
February 28, 2014 | |||||||||||||||
Prepaid | Accrued | ||||||||||||||
Expenses | Expenses | ||||||||||||||
Final | and Other | and Other | |||||||||||||
Settlement | Notional | Current | Current | ||||||||||||
Designated as hedging instruments | Hedge Type | Date | Amount | Assets | Liabilities | ||||||||||
Foreign currency contracts - sell Euro | Cash flow | Jun-14 | € | 2,850 | $ | - | $ | 89 | |||||||
Foreign currency contracts - sell Pounds | Cash flow | Nov-14 | £ | 4,250 | - | 280 | |||||||||
Interest rate swap | Cash flow | Jun-14 | $ | 75,000 | - | 1,227 | |||||||||
Total fair value | $ | - | $ | 1,596 | |||||||||||
The pre-tax effect of derivative instruments for the fiscal years 2015 and 2014 is as follows: | |||||||||||||||
PRE-TAX EFFECT OF DERIVATIVE INSTRUMENTS | |||||||||||||||
Fiscal Years Ended the Last Day of February | |||||||||||||||
Gain / (Loss) | Gain / (Loss) Reclassified | ||||||||||||||
Recognized in OCI | from Accumulated Other | ||||||||||||||
(effective portion) | Comprehensive Income (Loss) into Income | ||||||||||||||
2015 | 2014 | Location | 2015 | 2014 | |||||||||||
Currency contracts - cash flow hedges | $ | 434 | $ | -962 | SG&A | $ | 176 | $ | -98 | ||||||
Interest rate swaps - cash flow hedges | 28 | -111 | Interest expense | -1,199 | -3,707 | ||||||||||
Total | $ | 462 | $ | -1,073 | $ | -1,023 | $ | -3,805 | |||||||
We expect net losses of $0.11 million associated with foreign currency contracts currently reported in accumulated other comprehensive income (loss), to be reclassified into income over the next twelve months. The amount ultimately realized, however, will differ as exchange rates change and the underlying contracts settle. See Notes (1), (12) and (18) to these consolidated financial statements for more information on our hedging activities. | |||||||||||||||
Counterparty Credit Risk – Financial instruments, including foreign currency contracts and interest rate swaps, expose us to counterparty credit risk for nonperformance. We manage our exposure to counterparty credit risk by dealing with counterparties who are substantial international financial institutions with significant experience using such derivative instruments. Although our theoretical credit risk is the replacement cost at the then-estimated fair value of these instruments, we believe that the risk of incurring credit risk losses is remote. | |||||||||||||||
OTHER_COMMITMENTS_AND_CONTINGE
OTHER COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||||||||||||||||||||
Feb. 28, 2015 | ||||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||||
Other Commitments and Contingencies | NOTE 14 – OTHER COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||||
Indemnity Agreements – Under agreements with customers, licensors and parties from whom we have acquired assets or entered into business combinations, we indemnify these parties against liability associated with our products. Additionally, we are party to a number of agreements under leases where we indemnify the lessor for liabilities attributable to our actions or conduct. The indemnity agreements to which we are a party do not, in general, increase our liability for claims related to our products or actions and have not materially affected our consolidated financial statements. | ||||||||||||||||||||||
Employment Contracts – Until January 2014, we were party to a restated employment agreement with Gerald J. Rubin, our former Chief Executive Officer and President (the “former CEO”). On January 14, 2014, the Company and the former CEO entered into a separation agreement (the “Separation Agreement”). Pursuant to the Separation Agreement, the former CEO ceased serving as the Chief Executive Officer and President and resigned as a director of the Company, effective January 14, 2014, but remained an employee of the Company through February 28, 2014. The former CEO’s employment with the Company was considered a termination without cause under the terms of his employment agreement. As a result, in connection with the termination of his employment, Mr. Rubin will only receive the amounts or payments due to him under the employment agreement for a termination of employment without cause as of February 28, 2014. As a result of the Separation Agreement, the Company recorded a charge of $16.34 million (after tax) in the fourth quarter of fiscal year 2014, which accrued for liabilities and associated legal and administrative costs as a result of the separation. | ||||||||||||||||||||||
We have entered into employment contracts with certain officers, including an employment agreement with Mr. Mininberg effective March 1, 2014, in connection with his appointment as the Company’s new CEO. These agreements provide for minimum salary levels, potential incentive bonuses, and in some cases, performance based awards. These agreements also specify varying levels of salary continuation and/or severance compensation dependent on certain circumstances such as involuntary termination for other than cause or involuntary termination due to a change of control. | ||||||||||||||||||||||
In some cases, the expiration dates for these agreements are indefinite, unless terminated by either party. At February 28, 2015, the estimated aggregate commitment for potential future compensation and/or severance pursuant to all continuing employment contracts, was approximately $7.95 million, payable over varying terms for the next two years. | ||||||||||||||||||||||
International Trade – We purchase most of our appliances and a significant portion of other products that we sell from unaffiliated manufacturers located in the Far East, mainly in China. With most of our products being manufactured in the Far East, we are subject to risks associated with trade barriers, currency exchange fluctuations and social, economic and political unrest. In recent years, increasing labor costs, regional labor dislocations driven by new government policies, local inflation, changes in ocean cargo carrier capacity and costs, the impact of energy prices on transportation, and the appreciation of the Chinese Renminbi against the U.S. Dollar have resulted in fluctuations in our cost of goods sold. In the past, certain Chinese suppliers have closed operations due to economic conditions that pressured their profitability. Any future supplier closings could cause periodic disruptions in delivery of certain items that can affect our sales. Although we have multiple sourcing partners for many of our products, occasionally we are unable to source certain items on a timely basis due to changes occurring with our suppliers. We believe supplier contraction continues to be a trend in our industry. We also believe that we could source similar products outside China, if necessary, and we continuously explore expanding sourcing alternatives in other countries. However, the relocation of any production capacity could require substantial time and increased costs. | ||||||||||||||||||||||
Customer Incentives – We regularly enter into arrangements with customers whereby we offer various incentives, including incentives in the form of volume rebates. Our estimate of the liability for such incentives is included in the accompanying consolidated balance sheets on the line entitled “Accrued expenses and other current liabilities,” and in Note (8) to these consolidated financial statements included in the lines entitled “Accrued sales returns, discounts and allowances” and “Accrued advertising” and are based on incentives applicable to sales occurring up to the respective balance sheet dates. | ||||||||||||||||||||||
Other Matters – We are involved in various legal claims and proceedings in the normal course of operations. We believe the outcome of these matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity. | ||||||||||||||||||||||
Contractual Obligations and Commercial Commitments – Our contractual obligations and commercial commitments at the end of fiscal year 2015 were: | ||||||||||||||||||||||
PAYMENTS DUE BY PERIOD - TWELVE MONTHS ENDED THE LAST DAY OF FEBRUARY: | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | After | |||||||||||||||||
Total | 1 year | 2 years | 3 years | 4 years | 5 years | 5 years | ||||||||||||||||
Fixed rate debt | $ | 60,000 | $ | 20,000 | $ | 20,000 | $ | 20,000 | $ | - | $ | - | $ | - | ||||||||
Floating rate debt | 373,207 | 1,900 | 3,800 | 5,700 | 1,900 | 339,400 | 20,507 | |||||||||||||||
Long-term incentive plan payouts | 12,379 | 5,718 | 4,096 | 2,565 | - | - | - | |||||||||||||||
Interest on fixed rate debt | 4,372 | 2,236 | 1,460 | 676 | - | - | - | |||||||||||||||
Interest on floating rate debt | 38,366 | 7,805 | 7,732 | 7,622 | 7,586 | 6,655 | 966 | |||||||||||||||
Open purchase orders | 197,998 | 197,998 | - | - | - | - | - | |||||||||||||||
Long-term purchase commitments | 2,609 | 1,094 | 606 | 606 | 303 | - | - | |||||||||||||||
Minimum royalty payments | 73,283 | 12,566 | 12,567 | 12,518 | 9,708 | 8,446 | 17,478 | |||||||||||||||
Advertising and promotional | 54,059 | 11,284 | 5,901 | 6,054 | 6,162 | 6,271 | 18,387 | |||||||||||||||
Operating leases | 20,791 | 4,063 | 3,467 | 2,876 | 2,720 | 1,394 | 6,271 | |||||||||||||||
Capital spending commitments | 2,597 | 2,597 | - | - | - | - | - | |||||||||||||||
Total contractual obligations (1) | $ | 839,661 | $ | 267,261 | $ | 59,629 | $ | 58,617 | $ | 28,379 | $ | 362,166 | $ | 63,609 | ||||||||
-1 | In addition to the contractual obligations and commercial commitments in the table above, as of February 28, 2015, we have recorded a provision for uncertain tax positions of $10.30 million. We are unable to reliably estimate the timing of most of the future payments, if any, related to uncertain tax positions; therefore, we have excluded these tax liabilities from the table above. | |||||||||||||||||||||
REPURCHASE_OF_HELEN_OF_TROY_CO
REPURCHASE OF HELEN OF TROY COMMON STOCK | 12 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
Repurchase of Helen of Troy Common Stock | ||||||||||
Repurchase of Helen of Troy Common Stock | NOTE 15 – REPURCHASE OF HELEN OF TROY COMMON STOCK | |||||||||
As of February 28, 2015, we were authorized by our Board of Directors to purchase up to $265.43 million of common stock in the open market or through private transactions. On March 14, 2014, the Company completed a modified “Dutch auction” tender offer resulting in the repurchase of 3,693,816 shares of its outstanding common stock at a total cost of $247.83 million, including tender offer transaction-related costs. The Company also repurchased 408,327 shares of outstanding common stock on the open market at a total cost of $25.77 million during fiscal year 2015. | ||||||||||
Our current equity-based compensation plans include provisions that allow for the “net exercise” of stock options 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 holder can be paid for by having the option holder tender back to the Company a number of shares at fair value equal to the amounts due. These transactions are accounted for by the Company as a purchase and retirement of shares and are included in the table on the following page as common stock received in connection with share-based compensation. | ||||||||||
During the fiscal quarter ended May 31, 2014, certain employees tendered 1,993 shares of common stock having a market value of $59.13 per share, or $0.12 million in the aggregate, and our former CEO tendered 68,086 shares of common | ||||||||||
stock having a market value of $67.10 per share, or $4.57 million in the aggregate, as payment for related federal tax obligations arising from the vesting and settlement of performance-based restricted stock units and restricted stock awards. During the fiscal quarter ended May 31, 2013, 9,898 shares of common stock having a market value of $35.55 | ||||||||||
per share, or $0.35 million in the aggregate, were withheld as payment for related federal tax obligations arising from the vesting and settlement of performance-based restricted stock awards. | ||||||||||
For the second through fourth quarters of fiscal year 2015, we did not repurchase any shares of common stock on the open market or through tender offer. In the second and third quarters of fiscal year 2015, no shares of common stock were tendered by our employees in “net exercise” transactions. | ||||||||||
During the fourth quarter ended February 28, 2015, certain employees tendered 1,871 shares of common stock having a market value of $74.64 per share, or $0.14 million in the aggregate. | ||||||||||
The following table summarizes our share repurchase activity for the periods covered below: | ||||||||||
SHARE REPURCHASES | ||||||||||
Fiscal Years Ended the Last Day of February, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Common stock repurchased on the open market or through tender offer | ||||||||||
Number of shares | 4,102,143 | 33,862 | 61,426 | |||||||
Aggregate market value of shares (in thousands) | $ | 273,599 | $ | 1,311 | $ | 1,759 | ||||
Average price per share | $ | 66.70 | $ | 38.71 | $ | 28.64 | ||||
Common stock received in connection with share-based compensation | ||||||||||
Number of shares | 71,950 | 112,677 | 49,126 | |||||||
Aggregate market value of shares (in thousands) | $ | 4,826 | $ | 6,937 | $ | 1,627 | ||||
Average price per share | $ | 67.08 | $ | 61.57 | $ | 33.12 | ||||
SHAREBASED_COMPENSATION_PLANS
SHARE-BASED COMPENSATION PLANS | 12 Months Ended | ||||||||||||||
Feb. 28, 2015 | |||||||||||||||
Share-Based Compensation Plans | |||||||||||||||
Share-Based Compensation Plans | NOTE 16 – SHARE-BASED COMPENSATION PLANS | ||||||||||||||
We have equity awards outstanding under an expired employee stock option and restricted stock plan adopted in 1998 (the “1998 Plan”). We also have equity awards outstanding under three active share-based compensation plans. The plans consist of the Helen of Troy Limited 2008 Stock Incentive Plan, an employee stock option and restricted stock plan (the “2008 Stock Incentive Plan”), the Helen of Troy Limited 2008 Non-Employee Directors Stock Incentive Plan, a non-employee director restricted stock plan (the “2008 Directors’ Plan”), and the Helen of Troy Limited 2008 Employee Stock Purchase Plan (the “2008 Stock Purchase Plan”). These plans are described below. The plans are administered by the Compensation Committee of the Board of Directors, which consists of non-employee directors who are independent under the NASDAQ Stock Market listing standards. | |||||||||||||||
Expired Plan | |||||||||||||||
The 1998 Plan – The plan covered a total of 6,750,000 shares of common stock for issuance to key officers and employees. The 1998 Plan provided for the grant of options to purchase our common stock at a price equal to or greater than the fair market value on the grant date. The 1998 Plan contained provisions for incentive stock options, non-qualified stock options and restricted share grants. Generally, options granted under the 1998 Plan become exercisable over four- or five-year vesting periods and expire on dates ranging from seven to ten years from the date of grant. The 1998 Plan expired by its terms on August 25, 2008. As of February 28, 2015, 16,350 shares of common stock subject to options were outstanding under the plan. | |||||||||||||||
Active Plans | |||||||||||||||
The 2008 Stock Incentive Plan – The plan covers a total of 3,750,000 shares of common stock for issuance to key officers, employees and consultants of the Company. Under this plan, the Company offers stock-based compensation that includes stock options, annual restricted share awards, time-vested restricted stock units and performance-based restricted stock units. The plan will expire by its terms on August 19, 2018. | |||||||||||||||
Stock Options | |||||||||||||||
Generally, options granted under the 2008 Stock Incentive Plan will become exercisable over four- or five-year vesting periods and will expire on dates ranging from seven to ten years from the date of grant. These stock options are expensed ratably over their vesting terms. As of February 28, 2015, 751,665 shares of common stock subject to options were outstanding. | |||||||||||||||
Restricted Stock Awards (“RSAs”) | |||||||||||||||
RSAs were awarded in settlement of our former CEO’s annual bonus as a result of the achievement of certain performance targets specified in his employment agreement. RSAs for 159,666 shares of common stock for fiscal year 2013 with a fair value at the date of the award of $35.55 per share, vested and settled on February 28, 2014. RSAs for 62,304 shares of common stock for fiscal year 2014 with a fair value at the date of the award of $67.10 per share, vested during fiscal year 2015. | |||||||||||||||
Restricted Stock Units (“RSUs”) | |||||||||||||||
RSUs are awards of time-vested restricted stock units that are independent of stock option grants and are generally subject to forfeiture if employment terminates prior to vesting. During fiscal year 2015, the Company granted RSUs that may be settled for up to 28,937 shares of common stock with an average fair value at the grant dates of $58.36, to the CEO and certain members of the management team. The awards vest 50 percent on the second anniversary of the grant date and 50 percent on the third anniversary of the grant date. The Company expenses the cost of restricted stock units ratably over their vesting periods. | |||||||||||||||
Performance Restricted Stock Units (“PSUs”) | |||||||||||||||
PSUs are performance-based restricted stock unit awards that represent the right to receive unrestricted shares of stock based on the achievement of Company performance goals over the performance period established by the Compensation Committee of the Company’s Board of Directors. In fiscal years 2014 and 2013, respectively, 100,000 PSUs each, having a fair value at the date of grant of $32.88 were awarded in accordance with the terms of our former CEO’s employment agreement. During fiscal year 2015, the Company granted PSUs that may be settled for up to 178,101 shares of common stock with an average fair value at the grant date of $58.34, to the CEO and certain members of the management team. These awards have a three year performance period ending February 28, 2017. The awards will vest and settle on the date the Compensation Committee certifies that the performance goals have been achieved. Expense for the new plan must be estimated until earned, subject to a probability assessment of achieving the various performance goals and payout levels. | |||||||||||||||
A summary of activity under the 2008 stock incentive plan follows: | |||||||||||||||
SUMMARY OF ACTIVITY UNDER THE 2008 STOCK INCENTIVE PLAN | |||||||||||||||
Shares originally authorized | 3,750,000 | ||||||||||||||
Less cumulative stock option grants issued, net of forfeitures | -1,154,860 | ||||||||||||||
Less restricted share awards previously vested and settled | -421,970 | ||||||||||||||
Subtotal | 2,173,170 | ||||||||||||||
Less maximum RSUs issuable upon vesting (1) | -28,937 | ||||||||||||||
Less estimated maximum PSUs issuable upon vesting (1) | -178,101 | ||||||||||||||
Shares available for issuance | 1,966,132 | ||||||||||||||
-1 | RSUs and PSUs potentially issuable are estimated by dividing the maximum payouts of $1.69 and $10.39 million, respectively (assuming no forfeitures), by grant date weighted average fair values of $58.36 and $58.34 per share, respectively. | ||||||||||||||
The 2008 Directors’ Plan – The plan covers a total of 175,000 shares of common stock for issuance of restricted stock, restricted stock units or other stock-based awards to non-employee members of our Board of Directors. Awards granted under the 2008 Directors' Plan will be subject to vesting schedules and other terms and conditions as determined by the Compensation Committee of the Company’s Board of Directors. The plan will expire by its terms on August 19, 2018. As of February 28, 2015, 67,891 shares of restricted stock have been granted and 107,109 shares remained available for future issue under the plan. Under the 2008 Directors’ Plan, for the fiscal years ended 2015, 2014 and 2013, the Company granted 9,267, 10,512 and 10,512 shares of restricted stock, respectively, to certain members of our Board of Directors having weighted average fair values at the date of grant of $61.72, $41.26 and $31.54 per share for each year, respectively. The restricted stock awards vested immediately, were valued at the fair value of the Company’s common stock at the date of the grant and accordingly, were expensed at the time of the grants. | |||||||||||||||
The 2008 Stock Purchase Plan – The plan covers a total of 350,000 shares of common stock for issuance to our employees. Under the terms of the plan, employees may authorize the withholding of up to 15 percent of their wages or salaries to purchase our shares of common stock. The purchase price for shares acquired under the 2008 Stock Purchase Plan is equal to the lower of 85 percent of the share’s fair market value on either the first day of each option period or the last day of each period. The plan will expire by its terms on September 1, 2018. Shares of common stock purchased under the 2008 Stock Purchase Plan vest immediately at the time of purchase. Accordingly, the fair value award associated with their discounted purchase price is expensed at the time of purchase. During fiscal years 2015, 2014 and 2013, plan participants acquired a total of 31,128, 41,328 and 39,728 shares of common stock at average prices of $49.49, $32.66 and $26.68 per share, respectively. As of February 28, 2015, 127,085 shares remained available for future issue under this plan. | |||||||||||||||
The Company recorded share-based compensation expense in SG&A for each of the fiscal years covered by our consolidated statements of income as follows: | |||||||||||||||
SHARE-BASED PAYMENT EXPENSE | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||||||
2015 | 2014 | 2013 | |||||||||||||
Stock options | $ | 3,279 | $ | 2,380 | $ | 2,298 | |||||||||
Directors stock compensation | 816 | 619 | 473 | ||||||||||||
Performance based and other stock awards (1) | 1,732 | 13,446 | 2,988 | ||||||||||||
CEO separation compensation (2) | - | 15,000 | - | ||||||||||||
Employee stock purchase plan | 391 | 424 | 296 | ||||||||||||
Share-based payment expense | 6,218 | 31,869 | 6,055 | ||||||||||||
Less income tax benefits | -661 | -5,709 | -858 | ||||||||||||
Share-based payment expense, net of income tax benefits | $ | 5,557 | $ | 26,160 | $ | 5,197 | |||||||||
Earnings per share impact of share based payment expense: | |||||||||||||||
Basic | $ | 0.19 | $ | 0.82 | $ | 0.16 | |||||||||
Diluted | $ | 0.19 | $ | 0.81 | $ | 0.16 | |||||||||
The table above includes the following awards recognized in accordance with the terms of our former CEO’s Employment and Separation Agreements: | |||||||||||||||
-1 | Includes RSAs for 159,666 shares of common stock for fiscal year 2013 with a fair value at the date of the award of $35.55 per share, vested and settled at the end of February 2014, and RSAs for 62,304 shares of common stock for fiscal year 2014 with a fair value at the date of the award of $67.10 per share, vested in April 2014. For both fiscal years 2014 and 2013, PSUs for 100,000 shares of common stock having a fair value at the date of grant of $32.88 were awarded in accordance with the terms of our former CEO’s employment agreement. PSUs for 166,600 and 34,400 shares of common stock vested and settled in April 2014 and April 2013, respectively. | ||||||||||||||
-2 | $15 million in aggregate fair value of shares of common stock, awarded under the terms of the employment agreement with our former CEO. | ||||||||||||||
The fair value of all share-based payment awards are estimated using a Black-Scholes option pricing model with the following assumptions for fiscal years 2015, 2014 and 2013 | |||||||||||||||
ASSUMPTIONS USED FOR FAIR VALUE OF STOCK OPTION GRANTS | |||||||||||||||
Fiscal Years Ended the Last Day of February | |||||||||||||||
2015 | 2014 | 2013 | |||||||||||||
Range of risk free interest rates used | 1.2% - 1.5% | 0.6% - 1.3% | 0.1% - 0.9% | ||||||||||||
Expected dividend rate | 0.00% | 0.00% | 0.00% | ||||||||||||
Weighted average volatility rate | 48.00% | 38.80% | 51.40% | ||||||||||||
Range of expected volatility rates used | 35.3% - 50.5% | 34.0% - 41.7% | 45.7% - 55.3% | ||||||||||||
Range of expected terms used (in years) | 4.1 - 4.4 | 4.1 - 4.4 | 4.1 - 4.4 | ||||||||||||
The following describes how certain assumptions above are determined and affect the estimated fair value of options or discounted employee share purchases (“share-based payments”). The risk-free interest rate is based on U.S. Treasury securities with maturities equal to the expected life of the share-based payments. The dividend yield is computed as zero because the Company has not historically paid dividends nor does it expect to do so at this time. Expected volatility is based on a weighted average of the market implied volatility and historical volatility over the expected life of the underlying share-based payments. The Company uses its historical experience to estimate the expected life of each stock-option grant and also to estimate the impact of exercise, forfeitures, termination, and holding period behavior for fair value expensing purposes. | |||||||||||||||
A summary of stock option activity under all the Company’s share-based compensation plans follows: | |||||||||||||||
SUMMARY OF STOCK OPTION ACTIVITY | |||||||||||||||
(in thousands, except contractual term and per share data) | |||||||||||||||
Weighted | |||||||||||||||
Weighted | Weighted | Average | |||||||||||||
Average | Average | Remaining | |||||||||||||
Exercise | Grant Date | Contractual | |||||||||||||
Price | Fair Value | Term | Intrinsic | ||||||||||||
Options | (per share) | (per share) | (in years) | Value | |||||||||||
Outstanding at March 1, 2012 | 871 | $ | 26.26 | $ | 10.31 | 5.78 | $ | 5,570 | |||||||
Grants | 309 | 34.57 | 14.09 | ||||||||||||
Exercises | -248 | 22.88 | 2,634 | ||||||||||||
Forfeitures / expirations | -68 | 30.23 | |||||||||||||
Outstanding at February 28, 2013 | 864 | 29.89 | 11.98 | 6.26 | 6,209 | ||||||||||
Grants | 264 | 36.45 | 11.61 | ||||||||||||
Exercises | -239 | 25.36 | 4,663 | ||||||||||||
Forfeitures / expirations | -50 | 33.55 | |||||||||||||
Outstanding at February 28, 2014 | 839 | 33.03 | 12.38 | 6.48 | 27,081 | ||||||||||
Grants | 257 | 63.84 | 25.22 | ||||||||||||
Exercises | -187 | 29.70 | 6,498 | ||||||||||||
Forfeitures / expirations | -141 | 40.67 | |||||||||||||
Outstanding at February 28, 2015 | 768 | $ | 42.76 | $ | 16.28 | 6.59 | $ | 26,008 | |||||||
Exercisable at February 28, 2015 | 94 | $ | 28.32 | $ | 11.23 | 4.72 | $ | 4,523 | |||||||
A summary of non-vested stock option activity and changes under all the Company’s share-based compensation plans follows: | |||||||||||||||
NON-VESTED STOCK OPTION ACTIVITY | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Non- | Grant Date | ||||||||||||||
Vested | Fair Value | ||||||||||||||
Options | (per share) | ||||||||||||||
Outstanding at March 1, 2012 | 617 | $ | 10.99 | ||||||||||||
Grants | 309 | 14.09 | |||||||||||||
Vested or forfeited | -237 | 10.29 | |||||||||||||
Outstanding at February 28, 2013 | 689 | 12.62 | |||||||||||||
Grants | 264 | 11.61 | |||||||||||||
Vested or forfeited | -225 | 11.06 | |||||||||||||
Outstanding at February 28, 2014 | 728 | 12.74 | |||||||||||||
Grants | 257 | 25.22 | |||||||||||||
Vested or forfeited | -311 | 13.87 | |||||||||||||
Outstanding at February 28, 2015 | 674 | $ | 16.98 | ||||||||||||
A summary of restricted stock award activity under the Company’s 2008 Stock Incentive Plan follows: | |||||||||||||||
SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Restricted | Grant Date | ||||||||||||||
Stock | Fair Value | Fair Value | |||||||||||||
Awards | (per share) | Outstanding | |||||||||||||
Due for issue at March 1, 2012 | - | $ | - | $ | - | ||||||||||
Earned (1) | 160 | 35.55 | |||||||||||||
Vested and issued | - | - | |||||||||||||
Due for Issue at February 28, 2013 (2) | 160 | $ | 35.55 | $ | 5,920 | ||||||||||
Earned (2) | 62 | 67.10 | |||||||||||||
Vested and issued (1) | -160 | 35.55 | |||||||||||||
Due for issue at February 28, 2014 | 62 | $ | 67.10 | $ | 4,073 | ||||||||||
Vested and issued (2) | -62 | 67.10 | |||||||||||||
Due for issue at February 28, 2015 | - | $ | - | $ | - | ||||||||||
The schedule above includes the following awards earned based on fiscal years 2013 and 2014 performance and vested in accordance with the terms of our former CEO’s employment agreement: | |||||||||||||||
-1 | Fiscal year 2013 RSAs, which vested on February 28, 2014. | ||||||||||||||
-2 | Fiscal year 2014 RSAs, which vested on April 22, 2014. | ||||||||||||||
For further information regarding the former CEO’s employment agreement, see Note (14) to these consolidated financial statements under the subheading “Employment Contracts.” | |||||||||||||||
A summary of restricted stock unit activity and changes under the Company’s 2008 Stock Incentive Plan follows: | |||||||||||||||
SUMMARY OF RESTRICTED STOCK UNIT ACTIVITY | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Restricted | Grant Date | ||||||||||||||
Stock | Fair Value | Fair Value | |||||||||||||
Units | (per share) | Outstanding | |||||||||||||
Outstanding at March 1, 2012 | - | $ | - | $ | - | ||||||||||
Granted | 700 | 32.88 | |||||||||||||
Vested | - | - | |||||||||||||
Outstanding at February 28, 2013 | 700 | 32.88 | 25,956 | ||||||||||||
Vested (1) | -100 | 32.88 | |||||||||||||
Forfeited (2) | -500 | 32.88 | |||||||||||||
Outstanding at February 28, 2014 (3) | 100 | $ | 32.88 | $ | 6,531 | ||||||||||
Granted (4) | 118 | 58.35 | |||||||||||||
Vested (3) | -100 | $ | 32.88 | ||||||||||||
Outstanding at February 28, 2015 | 118 | $ | 58.35 | $ | 9,041 | ||||||||||
The schedule above includes the following awards and forfeitures recognized in accordance with the terms of our former CEO’s employment agreement: | |||||||||||||||
-1 | Includes fiscal year 2013 PSUs for 100,000 shares of common stock. 33,400 vested and settled on April 22, 2013 at a fair value of $35.55 per share and 66,600 vested and settled on February 28, 2014 at a fair value of $65.31 per share. | ||||||||||||||
-2 | PSUs for 500,000 shares of common stock were forfeited. | ||||||||||||||
-3 | Includes fiscal year 2014 PSUs for 100,000 shares of common stock, which were vested and settled on April 22, 2014 at a fair value of $67.10 per share. | ||||||||||||||
-4 | Includes target level RSUs and PSUs granted to its current CEO and certain members of the management team in connection with new long-term incentive compensation instituted by the Company in fiscal year 2015. | ||||||||||||||
A summary of our total unrecognized share-based compensation expense as of February 28, 2015 is as follows: | |||||||||||||||
UNRECOGNIZED SHARE-BASED COMPENSATION EXPENSE | |||||||||||||||
(in thousands, except weighted average expense period data) | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Unrecognized | Period of | ||||||||||||||
Compensation | Recognition | ||||||||||||||
Expense | (in months) | ||||||||||||||
Stock options | $ | 6,405 | 35.0 | ||||||||||||
Restricted Stock Units (RSUs and PSUs) | 3,585 | 22.1 | |||||||||||||
DEFINED_CONTRIBUTION_PLANS
DEFINED CONTRIBUTION PLANS | 12 Months Ended |
Feb. 28, 2015 | |
DEFINED CONTRIBUTION PLANS | |
DEFINED CONTRIBUTION PLANS | NOTE 17 – DEFINED CONTRIBUTION PLANS |
We sponsor defined contribution savings plans in the U.S. and other countries where we have employees. Total matching contributions made to these savings plans for the fiscal years ended 2015, 2014 and 2013 were $3.21, $2.89 and $2.60 million, respectively. | |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
Comprehensive Income (Loss) | ||||||||||
Comprehensive Income (Loss) | NOTE 18 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||
The changes in accumulated other comprehensive income (loss) by component and related tax effects for fiscal years 2015 and 2014 were as follows: | ||||||||||
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT | ||||||||||
(in thousands) | ||||||||||
Unrealized Holding Gains (Losses) | ||||||||||
On Cash Flow Hedges | ||||||||||
Foreign | ||||||||||
Interest Rate | Currency | |||||||||
Swaps (1) | Contracts (2) | Total | ||||||||
Balance at February 28, 2013 | $ | -3,135 | $ | 406 | $ | -2,729 | ||||
Other comprehensive income before reclassification | -111 | -962 | -1,073 | |||||||
Amounts reclassified out of accumulated other comprehensive income | 3,707 | 98 | 3,805 | |||||||
Tax effects | -1,258 | 164 | -1,094 | |||||||
Other Comprehensive Income (Loss) | 2,338 | -700 | 1,638 | |||||||
Balance at February 28, 2014 | -797 | -294 | -1,091 | |||||||
Other comprehensive income before reclassification | 28 | 434 | 462 | |||||||
Amounts reclassified out of accumulated other comprehensive income | 1,199 | -176 | 1,023 | |||||||
Tax effects | -430 | -40 | -470 | |||||||
Other Comprehensive Income (Loss) | 797 | 218 | 1,015 | |||||||
Balance at February 28, 2015 | $ | - | $ | -76 | $ | -76 | ||||
-1 | Includes net deferred tax benefits of $0.43 million at the end of fiscal year 2014. | |||||||||
-2 | Includes net deferred tax benefits (expense) of $0.03 and $0.08 million at the end of fiscal years 2015 and 2014, respectively. | |||||||||
See Notes (1), (12) and (13) to these consolidated financial statements for additional information regarding our hedging activities. | ||||||||||
SELECTED_QUARTERLY_FINANCIAL_D
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE 19 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||
Selected unaudited quarterly financial data is as follows: | ||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
May | August | November | February | Total | ||||||||||||
Fiscal Year 2015: | ||||||||||||||||
Sales revenue, net | $ | 311,778 | $ | 319,949 | $ | 435,674 | $ | 377,730 | $ | 1,445,131 | ||||||
Gross profit | 119,520 | 133,744 | 181,411 | 164,884 | 599,559 | |||||||||||
Asset impairment charges | 9,000 | - | - | - | 9,000 | |||||||||||
Net income | 16,398 | 18,839 | 55,377 | 40,550 | 131,164 | |||||||||||
Earnings per share (1) | ||||||||||||||||
Basic | 0.56 | 0.66 | 1.95 | 1.42 | 4.59 | |||||||||||
Diluted | 0.55 | 0.65 | 1.92 | 1.40 | 4.52 | |||||||||||
Fiscal Year 2014: | ||||||||||||||||
Sales revenue, net | $ | 304,516 | $ | 319,387 | $ | 380,730 | $ | 312,520 | $ | 1,317,153 | ||||||
Gross profit | 120,165 | 123,255 | 147,701 | 125,582 | 516,703 | |||||||||||
Asset impairment charges | 12,049 | - | - | - | 12,049 | |||||||||||
Net income | 14,392 | 23,318 | 37,524 | 11,014 | 86,248 | |||||||||||
Earnings per share (1) | ||||||||||||||||
Basic | 0.45 | 0.73 | 1.17 | 0.34 | 2.69 | |||||||||||
Diluted | 0.45 | 0.72 | 1.16 | 0.34 | 2.66 | |||||||||||
-1 | Earnings per share calculations for each quarter are based on the weighted average number of shares outstanding for each period, and the sum of the quarterly amounts may not necessarily equal the annual earnings per share amounts. | |||||||||||||||
FOURTH_QUARTER_CHARGES_TRANSAC
FOURTH QUARTER CHARGES / TRANSACTIONS | 12 Months Ended |
Feb. 28, 2015 | |
FOURTH QUARTER CHARGES / TRANSACTIONS | |
FOURTH QUARTER CHARGES / TRANSACTIONS | NOTE 20 – FOURTH QUARTER CHARGES / TRANSACTIONS |
Fiscal Year 2015 – Our results for the fourth quarter of fiscal year 2015 did not contain any transactions of a non-routine nature. | |
Fiscal Year 2014 – Our results for the fourth quarter of fiscal year 2014 included a charge of $16.34 million (after tax) in connection with payments, including associated legal and administrative costs, required as a result of our former CEO’s separation from service, as further discussed in Notes (14), (15) and (16) to these consolidated financial statements. | |
Fiscal Year 2013 – Our results for the fourth quarter of fiscal year 2013 did not contain any transactions of a non-routine nature other than a $1.41 million Venezuela foreign currency devaluation adjustment. | |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Segment Information | ||||||||||||||||
Segment Information | NOTE 21 - SEGMENT INFORMATION | |||||||||||||||
The following table contains segment information for fiscal years covered by our consolidated financial statements: | ||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||
(in thousands) | ||||||||||||||||
Healthcare / | Nutritional | Personal | ||||||||||||||
Fiscal Year 2015 | Housewares | Home Environment | Supplements (1) | Care | Total | |||||||||||
Sales revenue, net | $ | 296,252 | $ | 613,253 | $ | 100,395 | $ | 435,231 | $ | 1,445,131 | ||||||
Asset impairment charges | - | - | - | 9,000 | 9,000 | |||||||||||
Operating income | 59,392 | 50,821 | 9,512 | 41,994 | 161,719 | |||||||||||
Identifiable assets | 397,956 | 683,533 | 218,181 | 354,085 | 1,653,755 | |||||||||||
Capital and intangible asset expenditures | 2,019 | 2,602 | 613 | 1,287 | 6,521 | |||||||||||
Depreciation and amortization | 3,615 | 20,532 | 5,380 | 10,126 | 39,653 | |||||||||||
Healthcare / | Nutritional | Personal | ||||||||||||||
Fiscal Year 2014 | Housewares | Home Environment | Supplements (1) | Care | Total | |||||||||||
Sales revenue, net | $ | 274,478 | $ | 568,075 | - | $ | 474,600 | $ | 1,317,153 | |||||||
Asset impairment charges | - | - | - | 12,049 | 12,049 | |||||||||||
Operating income | 50,828 | 20,764 | - | 45,508 | 117,100 | |||||||||||
Identifiable assets | 369,698 | 676,131 | 487,473 | 1,533,302 | ||||||||||||
Capital and intangible asset expenditures | 851 | 22,934 | - | 16,678 | 40,463 | |||||||||||
Depreciation and amortization | 3,461 | 19,318 | - | 11,060 | 33,839 | |||||||||||
Healthcare / | Nutritional | Personal | ||||||||||||||
Fiscal Year 2013 | Housewares | Home Environment | Supplements (1) | Care | Total | |||||||||||
Sales revenue, net | $ | 259,042 | $ | 538,666 | $ | - | $ | 490,555 | $ | 1,288,263 | ||||||
Operating income | 49,612 | 37,772 | - | 61,389 | 148,773 | |||||||||||
Identifiable assets | 362,378 | 645,586 | - | 466,040 | 1,474,004 | |||||||||||
Capital and intangible asset expenditures | 1,269 | 7,795 | - | 5,624 | 14,688 | |||||||||||
Depreciation and amortization | 4,803 | 16,614 | - | 13,008 | 34,425 | |||||||||||
-1 | The Nutritional Supplements segment includes eight months of operating results for fiscal year 2015. The segment was acquired on June 30, 2014. Operating income includes acquisition-related expenditures of $3.61 million for fiscal year 2015. For further information regarding the acquisition, see Note (6) to these consolidated financial statements. | |||||||||||||||
We compute segment operating income based on net sales revenue, less cost of goods sold, SG&A and any asset impairment charges associated with the segment. The SG&A used to compute each segment’s operating income is directly associated with the segment, plus overhead expenses that are allocable to the segment. We do not allocate nonoperating income and expense, including interest or income taxes, to operating segments. The operating income for the Nutritional Supplements segment does not include any allocation of shared service or corporate costs for fiscal year 2015. As the new segment is further integrated into our operating structure, we expect to make an allocation of shared service and corporate costs to the segment in future fiscal years. When we decide such allocations are appropriate, there may be some reduction in the operating income of the Nutritional Supplements segment offset by increases in operating income of our other segments. The extent of this operating income impact between the segments has not yet been determined. | ||||||||||||||||
Our domestic and international net sales revenue and long-lived assets were as follows: | ||||||||||||||||
GEOGRAPHIC INFORMATION | ||||||||||||||||
(in thousands) | ||||||||||||||||
Fiscal Years Ended the Last Day of February, | ||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||
SALES REVENUE, NET: | ||||||||||||||||
United States | $ | 1,139,959 | $ | 1,019,525 | $ | 1,014,354 | ||||||||||
International | 305,172 | 297,628 | 273,909 | |||||||||||||
Total | $ | 1,445,131 | $ | 1,317,153 | $ | 1,288,263 | ||||||||||
LONG-LIVED ASSETS: | ||||||||||||||||
United States | $ | 636,089 | $ | 444,788 | $ | 515,411 | ||||||||||
International: | ||||||||||||||||
Barbados | 319,298 | 324,399 | 398,340 | |||||||||||||
Other international | 133,608 | 148,639 | 15,048 | |||||||||||||
Subtotal | 452,906 | 473,038 | 413,388 | |||||||||||||
Total | $ | 1,088,995 | $ | 917,826 | $ | 928,799 | ||||||||||
The table above classifies assets based upon the country where we hold legal title. | ||||||||||||||||
Worldwide sales to our largest customer and its affiliates accounted for approximately 18, 19 and 19 percent of our net sales revenue in fiscal years 2015, 2014 and 2013, respectively. Sales to this customer are made within the Personal Care and Healthcare / Home Environment segments. Of these sales, approximately 84, 92 and 91 percent were within the U.S. during fiscal years 2015, 2014 and 2013, respectively. | ||||||||||||||||
Sales to our second largest customer accounted for approximately 9, 11 and 11 percent of our net sales revenue in fiscal years ending 2015, 2014 and 2013, respectively. Sales to this customer are made across all segments, primarily within the United States and Canada. No other customers accounted for 10 percent or more of net sales revenue during those fiscal years. | ||||||||||||||||
Subsequent_Event
Subsequent Event | 12 Months Ended |
Feb. 28, 2015 | |
Subsequent Event | |
Subsequent Event | NOTE 22 – SUBSEQUENT EVENT |
On March 31, 2015 the Company announced the acquisition of the Vicks VapoSteam U.S. liquid inhalant business from The Procter & Gamble Company (“P&G”), which includes a fully paid-up license of P&G’s Vicks VapoSteam trademarks. In a related transaction, the Company acquired a fully paid-up license of P&G’s Vicks VapoPad trademarks for scent pads in the U.S. The vast majority of Vicks VapoSteam and VapoPads are used in Vicks humidifiers, vaporizers and other health care devices already marketed by the Company. The transaction includes the acquisition of certain production assets and inventory related to the above categories, as well as the right to use related product formulations and other intellectual property. The aggregate purchase price for the two transactions was approximately $42.75 million financed under the Credit Agreement. The acquired VapoSteam business had annual revenues of approximately $10 million in calendar year 2014. | |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | ||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | HELEN OF TROY LIMITED AND SUBSIDIARIES | |||||||||||||||
Schedule II - Valuation and Qualifying Accounts | ||||||||||||||||
(in thousands) | ||||||||||||||||
Additions | ||||||||||||||||
Charged to | Net charge | |||||||||||||||
Beginning | cost and | (credit) to | Ending | |||||||||||||
Description | Balance | expenses (1) | sales revenue (2) | Deductions (3) | Balance | |||||||||||
Year ended February 28, 2015 | ||||||||||||||||
Allowances for doubtful accounts | $ | 2,127 | $ | 299 | $ | - | $ | 577 | $ | 1,849 | ||||||
Allowances for back-to-stock returns | 2,552 | - | 1,481 | - | $ | 4,033 | ||||||||||
Year ended February 28, 2014 | ||||||||||||||||
Allowances for doubtful accounts | $ | 1,764 | $ | 400 | $ | - | $ | 37 | $ | 2,127 | ||||||
Allowances for back-to-stock returns | 3,267 | - | -715 | - | $ | 2,552 | ||||||||||
Year ended February 28, 2013 | ||||||||||||||||
Allowances for doubtful accounts | $ | 1,811 | $ | 188 | $ | - | $ | 235 | $ | 1,764 | ||||||
Allowances for back-to-stock returns | 3,730 | - | -463 | - | $ | 3,267 | ||||||||||
-1 | Represents periodic charges to the provision for doubtful accounts. | |||||||||||||||
-2 | Represents net charges (credits) during the period to sales returns and allowances. Net additions to the allowance for back-to-stock returns for fiscal year 2015 includes $1.40 million of initial back-to-stock reserves recorded through purchase accounting upon the acquisition of Healthy Directions. For more information regarding the acquisition of Healthy Directions, see Note (6) to the accompanying consolidated financial statements. | |||||||||||||||
-3 | Represents write-offs of doubtful accounts net of recoveries of previously reserved amounts. | |||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
General | (a)General | ||||||||||
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 the Company’s common shares, par value $0.10 per share, as “common stock.” References to “OXO” refer to the operations of OXO International and certain of its affiliated subsidiaries that comprise our Housewares segment. References to “Kaz” refer to the operations of Kaz, Inc. and its subsidiaries, which comprise a segment within the Company referred to as the Healthcare / Home Environment segment. References to “Healthy Directions” refer to the operations of Healthy Directions, LLC and its subsidiaries, acquired on June 30, 2014, that comprise the Nutritional Supplements segment. We use product and service names in this report for identification purposes only and they may be protected in the United States and other jurisdictions by trademarks, trade names, service marks, and other intellectual property rights of the Company and other parties. The absence of a specific attribution in connection with any such mark does not constitute a waiver of any such right. All trademarks, trade names, service marks, and logos referenced herein belong to their respective owners. References to “the FASB” refer to the Financial Accounting Standards Board. References to “GAAP” refer to 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 are a global designer, developer, importer, marketer, and distributor of an expanding portfolio of brand-name consumer products. We have four segments: Housewares, Healthcare / Home Environment, Nutritional Supplements, and Personal Care. Our Housewares segment provides a broad range of innovative consumer products for the home. Product offerings include food preparation tools, gadgets and storage containers, cleaning, organization, and baby and toddler care products. The Healthcare / Home Environment segment focuses on healthcare devices such as thermometers, humidifiers, blood pressure monitors, and heating pads; water filtration systems; and small home appliances such as portable heaters, fans, air purifiers, and insect control devices. Our Nutritional Supplements segment is a leading provider of premium branded vitamins, minerals and supplements, as well as other health products sold directly to consumers. Our Personal Care 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. | |||||||||||
Our consolidated financial statements are prepared in U.S. Dollars and in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. We have reclassified, combined or separately disclosed certain amounts in the prior years’ consolidated financial statements and accompanying footnotes to conform to the current year’s presentation. These reclassifications had no effect on previously reported results of operations, working capital or stockholders’ equity. | |||||||||||
Consolidation | (b)Consolidation | ||||||||||
Our consolidated financial statements include the accounts of Helen of Troy Limited and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. | |||||||||||
Cash and cash equivalents | (c)Cash and cash equivalents | ||||||||||
Cash equivalents include all highly liquid investments with an original maturity of three months or less. We maintain cash and cash equivalents at several financial institutions, which at times may not be federally insured or may exceed federally insured limits. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risks on such accounts. | |||||||||||
Our cash balances at the end of fiscal years 2015 and 2014 include restricted cash of $0.73 and $2.59 million, respectively, denominated in Venezuelan Bolivars. The balances arise from our operations within the Venezuelan market. Until we are able to repatriate cash from Venezuela, we intend to use these cash balances in country to continue to fund operations. We do not otherwise rely on these restricted funds as a source of liquidity. | |||||||||||
We consider money market investment accounts to be cash equivalents. Cash equivalents comprised $1.69 and $1.55 million of the amounts reported on our consolidated balance sheets as “Cash and cash equivalents” at February 28, 2015 and 2014, respectively. Note (12) contains additional information regarding our cash and cash equivalents. | |||||||||||
Trading securities and long-term marketable securities | (d)Trading securities | ||||||||||
Trading securities, when held, consist of shares of common stock of publicly traded companies and are stated on our consolidated balance sheets at fair value, as determined by the most recent trading price of each security as of each balance sheet date. We determine the appropriate classification of our investments when those investments are purchased and reevaluate those determinations at each balance sheet date. Trading securities, when held, are included in the “Assets, current” section of our consolidated balance sheets. | |||||||||||
All realized and unrealized gains and losses attributable to trading securities are included in “Nonoperating income (expense), net” in the consolidated statements of income. | |||||||||||
Receivables | (e)Receivables | ||||||||||
Our receivables are comprised of trade credit granted to customers, primarily in the retail industry, offset by two valuation reserves: an allowance for doubtful receivables and an allowance for back-to-stock returns. | |||||||||||
Our allowance for doubtful receivables reflects our best estimate of probable losses, determined principally based on historical experience and specific allowances for known troubled accounts. Our policy is to charge off receivables when we have determined they will no longer be collectible. Charge offs are applied as a reduction to the allowance for doubtful accounts and any recoveries of previous charge offs are netted against bad debt expense in the period recovered. At February 28, 2015 and 2014, the allowance for doubtful receivables was $1.85 and $2.13 million, respectively. | |||||||||||
Our allowance for back-to-stock returns reflects our best estimate of future customer returns, determined principally based on historical experience and specific allowances for known pending returns. At February 28, 2015 and 2014, the allowance for back-to-stock returns was $4.03 and $2.55 million, respectively. | |||||||||||
The Company had significant concentrations of credit risk with two major customers at February 28, 2015 representing approximately 15 and 10 percent of gross trade receivables, respectively. In addition, as of February 28, 2015 and 2014, approximately 42 and 44 percent, respectively, of the Company’s gross trade receivables were due from its five top customers. | |||||||||||
Inventory, net and cost of goods sold | (f)Inventory, net and cost of goods sold | ||||||||||
Our inventory consists almost entirely of finished goods. We currently record inventory on our balance sheet at average cost, or net realizable value, if it is below our recorded cost. Our average costs include the amounts we pay manufacturers for product, tariffs and duties associated with transporting product across national borders, freight costs associated with transporting the product from our manufacturers to our distribution centers, and general and administrative expenses directly attributable to acquiring inventory, as applicable. | |||||||||||
General and administrative expenses in inventory include all the expenses of operating the Company's sourcing activities and expenses incurred for production monitoring, product design, engineering and packaging. We charged $36.37, $36.23 and $30.28 million of such general and administrative expenses to inventory during fiscal years 2015, 2014 and 2013, respectively. We estimate that $12.52 and $12.26 million of general and administrative expenses directly attributable to the procurement of inventory were included in our inventory balances on hand at February 28, 2015 and 2014, respectively. | |||||||||||
The “Cost of goods sold” line item on the consolidated statements of income is comprised of the book value of inventory sold to customers during the reporting period. When circumstances dictate that we use net realizable value as the basis for recording inventory, we base our estimates on expected future selling prices less expected disposal costs. | |||||||||||
For fiscal years 2015, 2014 and 2013, finished goods purchased from vendors in the Far East comprised approximately 67, 69 and 68 percent, respectively, of finished goods purchased. During fiscal year 2015, we had one vendor who fulfilled approximately 10 percent of our product requirements. Our top two manufacturers combined fulfilled approximately 17 percent of our product requirements. Over the same period, our top five suppliers fulfilled approximately 31 percent of our product requirements. | |||||||||||
Property and equipment | (g)Property and equipment | ||||||||||
These assets are stated at cost and depreciation is recorded on a straight-line basis over the estimated useful lives of the assets. Expenditures for repair and maintenance of property and equipment are expensed as incurred. For tax purposes, accelerated depreciation methods are used where allowed by tax laws. | |||||||||||
License agreements, trademarks, patents and other intangible assets | (h)License agreements, trademarks, patents, and other intangible assets | ||||||||||
A significant portion of our consolidated sales are made subject to trademark license agreements with various licensors. Our license agreements are reported on our consolidated balance sheets at cost, less accumulated amortization. The cost of our license agreements represents amounts paid to licensors to acquire the license or to alter the terms of the license in a manner that we believe to be in our best interest. Certain licenses have extension terms that may require additional payments to the licensor as part of the terms of renewal. The Company capitalizes costs incurred to renew or extend the term of a license agreement and amortizes such costs on a straight-line basis over the remaining term or economic life of the agreement, whichever is shorter. Royalty payments are not included in the cost of license agreements. Royalty expense under our license agreements is recognized as incurred and is included in our consolidated statements of income on the line entitled “Selling, general and administrative expense” (“SG&A”). Net sales revenue subject to trademark license agreements requiring royalty payments comprised approximately 42, 44 and 44 percent of consolidated net sales revenue for fiscal years 2015, 2014 and 2013, respectively. During fiscal year 2015, we had one licensor where our net sales revenue subject to royalty payments was approximately 19 percent of consolidated net sales. No other licensors had associated net sales revenue subject to royalty payments that accounted for 10 percent or more of consolidated net sales revenue. | |||||||||||
We also sell products under trademarks and brand assets that we own. Trademarks and brand assets that we acquire from other entities are generally recorded on our consolidated balance sheets based upon the appraised cost of acquiring the asset, net of any accumulated amortization and impairment charges. Costs associated with developing trademarks internally are recorded as expenses in the period incurred. In certain instances where trademarks or brand assets have readily determinable useful lives, we amortize their costs on a straight-line basis over such lives. In most instances, we have determined that such acquired assets have an indefinite useful life. In these cases, no amortization is recorded. Patents acquired through purchase from other entities, if material, are recorded on our consolidated balance sheets based upon the appraised value of the acquired patents and amortized over the remaining life of the patent. Additionally, we incur certain costs, primarily legal fees in connection with the design and development of products to be covered by patents, which are capitalized as incurred and amortized on a straight-line basis over the life of the patent in the jurisdiction filed, typically 14 years. | |||||||||||
Other intangible assets include customer lists, distribution rights, patent rights, and non-compete agreements that we acquired from other entities. These are recorded on our consolidated balance sheets based upon the fair value of the acquired asset and amortized on a straight-line basis over the remaining life of the asset as determined either through outside appraisal or by the term of any controlling agreements. See Notes (5) and (6) to these consolidated financial statements for additional information on our intangible assets. | |||||||||||
Goodwill, intangible and other long-lived assets and impairments | (i)Goodwill, intangible and other long-lived assets and impairments | ||||||||||
We complete our analysis of the carrying value of our goodwill and other intangible assets during the first quarter of each fiscal year, or more frequently whenever events or changes in circumstances indicate that their carrying value may not be recoverable. | |||||||||||
Goodwill is recorded as the difference, if any, between the aggregate consideration paid and the fair value of the net tangible and intangible assets received in the acquisition of a business. We evaluate goodwill at the reporting unit level (operating segment or one level below an operating segment). We measure the amount of any goodwill impairment based upon the estimated fair value of the underlying assets and liabilities of the reporting unit, including any unrecognized intangible assets and estimates of the implied fair value of goodwill. An impairment charge is recognized to the extent the recorded goodwill exceeds the implied fair value of goodwill. | |||||||||||
We consider whether circumstances or conditions exist that suggest that the carrying value of our goodwill and other long-lived assets might be impaired. If such circumstances or conditions exist, further steps are required in order to determine whether the carrying value of each of the individual assets exceeds its fair market value. If the analysis indicates that an individual asset’s carrying value does exceed its fair market value, the next step is to record a loss equal to the excess of the individual asset’s carrying value over its fair value. These steps entail significant amounts of judgment and subjectivity. Events and changes in circumstances that may indicate there is impairment include, but are not limited to, strategic decisions to exit a business or dispose of an asset made in response to changes in economic, political and competitive conditions, the impact of the economic environment on our customer base and on broad market conditions that drive valuation considerations by market participants, our internal expectations with regard to future revenue growth and the assumptions we make when performing our impairment reviews, a significant decrease in the market price of our assets, a significant adverse change in the extent or manner in which our assets are used, a significant adverse change in legal factors or the business climate that could affect our assets, an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset, and significant changes in the cash flows associated with an asset. We analyze these assets at the individual asset, reporting unit and Company levels. | |||||||||||
As further discussed in Note (5) to these consolidated financial statements, in fiscal years 2015 and 2014, we recorded non-cash impairment charges totaling $9.00 million ($8.16 million after tax) and $12.05 million ($12.03 million after tax), respectively, in order to reflect the carrying value of certain trademarks in our Personal Care segment at estimates of their fair value. | |||||||||||
Economic useful lives and amortization of intangible assets | (j)Economic useful lives and amortization of intangible assets | ||||||||||
We amortize intangible assets, such as licenses and trademarks, over their economic useful lives, unless those assets' economic useful lives are indefinite. If an intangible asset's economic useful life is deemed indefinite, that asset is not amortized. When we acquire an intangible asset, we consider factors such as the asset's history, our plans for that asset, and the market for products associated with the asset. We consider these same factors when reviewing the economic useful lives of our existing intangible assets as well. We review the economic useful lives of our intangible assets at least annually. | |||||||||||
Intangible assets consist primarily of goodwill, license agreements, trademarks, brand assets, customer lists, distribution rights, patents, and patent licenses. Some of our goodwill is held in jurisdictions that allow deductions for tax purposes, however, in some of those jurisdictions we have no tax basis for the associated goodwill recorded for book purposes. Accordingly, the majority of our goodwill is not deductible for tax purposes. We amortize certain intangible assets using the straight-line method over appropriate periods ranging from 2 to 30 years. We recorded intangible asset amortization totaling $25.33, $21.61 and $22.40 million during fiscal years 2015, 2014 and 2013, respectively. See Notes (5) and (6) to these consolidated financial statements for more information about our intangible assets. | |||||||||||
Fair value classifications | (k)Fair value classifications | ||||||||||
We classify our various assets and liabilities recorded or reported at fair value under a hierarchy prescribed by GAAP that prioritizes inputs to fair value measurement techniques into three broad levels: | |||||||||||
· | Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets. | ||||||||||
· | Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | ||||||||||
· | Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. | ||||||||||
Assets and liabilities subject to classification are classified upon acquisition. When circumstances dictate the transfer of an asset or liability to a different level, our policy is to recognize the transfer at the beginning of the reporting period in which the event resulting in the transfer occurred. | |||||||||||
Warranties | (l)Warranties | ||||||||||
Our products are under warranty against defects in material and workmanship for periods ranging from two to five years. We estimate our warranty accrual using our historical experience and believe that this is the most reliable method by which we can estimate our warranty liability. The following table summarizes the activity in the Company's accrual for the past two fiscal years: | |||||||||||
ACCRUAL FOR WARRANTY RETURNS | |||||||||||
(in thousands) | |||||||||||
Fiscal Years Ended | |||||||||||
the Last Day of February, | |||||||||||
2015 | 2014 | ||||||||||
Beginning balance | $ | 19,269 | $ | 23,150 | |||||||
Additions to the accrual | 57,217 | 48,461 | |||||||||
Reductions of the accrual - payments and credits issued | -52,933 | -52,342 | |||||||||
Ending balance | $ | 23,553 | $ | 19,269 | |||||||
Financial instruments | (m) Financial instruments | ||||||||||
The carrying amounts of cash and cash equivalents, receivables, accounts payable, accrued expenses and income taxes payable approximate fair value because of the short maturity of these items. See Note (10) to these consolidated financial statements for our assessment of the fair value of our Senior Notes and other long-term debt. We have previously used interest rate swaps (the “swaps”) to protect our funding costs against rising interest rates. The interest rate swaps allowed us to raise long-term borrowings at floating rates and effectively swap them into fixed rates. Under our previous swaps, we agreed with another party to exchange quarterly the difference between fixed-rate and floating-rate interest amounts calculated by reference to notional amounts that match the amount of our underlying debt. Under these swap agreements, we paid the fixed rates and received the floating rates. The swaps settled quarterly and terminated upon maturity of the related debt in June 2014. We hedge a portion of our foreign exchange rate risk by entering into forward contracts to exchange foreign currencies for U.S. Dollars at specified rates. Our foreign exchange contracts and interest rate swaps are considered highly effective and are accounted for as cash flow hedges. See Notes (12), (13) and (18) to these consolidated financial statements for more information on our hedging activities. | |||||||||||
Income taxes and uncertain tax positions | (n)Income taxes and uncertain tax positions | ||||||||||
Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences between the book and tax bases of applicable assets and liabilities. Generally, deferred tax assets represent future income tax reductions while deferred tax liabilities represent income taxes that we expect to pay in the future. We measure deferred tax assets and liabilities using enacted tax rates for the years in which we expect temporary differences to be reversed or be settled. Changes in tax rates affect the carrying values of our deferred tax assets and liabilities, and the effects of any tax rate changes are recognized in the periods when they are enacted. The ultimate realization of our deferred tax assets depends upon generating sufficient future taxable income during the periods in which our temporary differences become deductible or before our net operating loss and tax credit carryforwards expire. | |||||||||||
We recognize the benefit of a tax position if that position will more likely than not be sustained in an audit, based on the technical merits of the position. If the tax position meets the more likely than not recognition threshold, the tax effect is recognized at the largest amount of the benefit that has greater than a fifty percent likelihood of being realized upon ultimate settlement. Liabilities created for unrecognized tax benefits are disclosed as a separate liability and not combined with deferred tax liabilities or assets. We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. Note (11) to these consolidated financial statements contains additional information regarding our income taxes. | |||||||||||
Revenue recognition | (o)Revenue recognition | ||||||||||
Sales are recognized when revenue is realized or realizable and has been earned. Sales and shipping terms vary among our customers, and as such, revenue is recognized when risk and title to the product transfer to the customer. Net sales revenue is comprised of gross revenues less estimates of expected returns, trade discounts and customer allowances, which include incentives such as advertising discounts, volume rebates and off-invoice markdowns. Such deductions are recorded and/or amortized during the period the related revenue is recognized. Sales and value added taxes collected from customers and remitted to governmental authorities are excluded from net sales revenue reported in the consolidated financial statements. | |||||||||||
Consideration granted to customers | (p)Consideration granted to customers | ||||||||||
We offer our customers certain incentives in the form of cooperative advertising arrangements, volume rebates, product markdown allowances, trade discounts, cash discounts, slotting fees, and similar other arrangements. In instances where the customer provides us with proof of advertising performance, reductions in amounts received from customers under cooperative advertising programs are expensed in our consolidated statements of income in SG&A. Customer cooperative advertising incentives included in SG&A were $17.28, $16.45 and $14.25 million for the fiscal years 2015, 2014 and 2013, respectively. | |||||||||||
Reductions in amounts received from customers without proof of advertising performance, markdown allowances, slotting fees, trade discounts, cash discounts, and volume rebates are all recorded as reductions of net sales revenue. | |||||||||||
Advertising | (q)Advertising | ||||||||||
Advertising costs, including cooperative advertising discussed in (p) above, are expensed in the period in which they are incurred and included in our consolidated statements of income in SG&A. We incurred total advertising costs, including amounts paid to customers for cooperative media and print advertising, of $53.75, $46.29 and $51.08 million during fiscal years 2015, 2014 and 2013, respectively. | |||||||||||
Shipping and handling revenues and expenses | (r)Shipping and handling revenues and expenses | ||||||||||
Shipping and handling expenses are included in our consolidated statements of income in SG&A. These expenses include distribution center costs, third-party logistics costs and outbound transportation costs. Our expenses for shipping and handling was approximately $88, $81 and $84 million during fiscal years 2015, 2014 and 2013, respectively. We bill our customers for charges for shipping and handling on certain sales made directly to consumers and retail customers ordering relatively small dollar amounts of product. Such charges are recorded as a reduction of our shipping and handling expense and are not material in the aggregate. | |||||||||||
Foreign currency transactions and related derivative financial instruments | (s)Foreign currency transactions and related derivative financial instruments | ||||||||||
The U.S. Dollar is the functional currency for the Company and all its foreign subsidiaries; therefore, we do not have a translation adjustment recorded through accumulated other comprehensive income (loss). All our non-U.S. subsidiaries' transactions involving other currencies have been re-measured in U.S. Dollars using exchange rates in effect on the date each transaction occurred. In our consolidated statements of income, exchange gains and losses resulting from the remeasurement of foreign taxes receivable, taxes payable, deferred tax assets, and deferred tax liabilities are recognized in their respective income tax lines and all other foreign exchange gains and losses are recognized in SG&A. We recorded net foreign exchange gains (losses), including the impact of currency hedges, of ($5.72), ($0.95) and ($2.36) million in SG&A and $0.40, ($0.17) and ($0.04) million in income tax expense during fiscal years 2015, 2014 and 2013, respectively. In order to manage our exposure to changes in foreign currency exchange rates, we use forward currency contracts to exchange foreign currencies for U.S. Dollars at specified rates. We account for these transactions as cash flow hedges, which requires these derivatives to be recorded on the balance sheet at their fair value and that changes in the fair value of the forward exchange contracts are recorded each period in our consolidated statements of income or other comprehensive income (loss), depending on the type of hedging instrument and the effectiveness of the hedges. All our current contracts are cash flow hedges and are adjusted to their fair market values at the end of each fiscal quarter. We evaluate all hedging transactions each quarter to determine that they are effective. Any ineffectiveness is recorded as part of SG&A in our consolidated statements of income. See Notes (12), (13) and (18) to these consolidated financial statements for a further discussion of our hedging activities. | |||||||||||
Share-based compensation plans | (t)Share-based compensation plans | ||||||||||
We account for share-based employee compensation plans under the fair value recognition and measurement provisions in accordance with applicable accounting standards, which require all share-based payments to employees, including grants of stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”), to be measured based on the grant date fair value of the awards. The resulting expense is recognized over the periods during which the employee is required to perform service in exchange for the award. The estimated number of PSU’s that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. | |||||||||||
Stock options are recognized in the financial statements based on their fair values using an option-pricing model at the date of grant. We use a Black-Scholes option-pricing model to calculate the fair value of options. This model requires various judgmental assumptions including volatility, forfeiture rates and expected option life. | |||||||||||
All share-based compensation expense is recorded net of estimated forfeitures in our consolidated statements of income and as such is recorded for only those share-based awards that we expect to vest. We estimate the forfeiture rate based on historical forfeitures of equity awards and adjust the rate to reflect changes in facts and circumstances, if any. We revise our estimated forfeiture rate if actual forfeitures differ from our initial estimates. | |||||||||||
See Note (16) to these consolidated financial statements for more information on our share-based compensation plans. | |||||||||||
Interest income | (u)Interest income | ||||||||||
Interest income is included in “Nonoperating income, net” on the consolidated statements of income. Interest income totaled $0.06, $0.07 and $0.07 million in fiscal years 2015, 2014 and 2013, respectively. Interest income is normally earned on cash invested in short-term accounts, cash equivalents, and temporary and long-term investments. | |||||||||||
Earnings per share | (v)Earnings per share | ||||||||||
We compute basic earnings per share using the weighted average number of shares of common stock outstanding during the period. We compute diluted earnings per share using the weighted average number of shares of common stock outstanding plus the effect of dilutive securities. Dilutive securities at any given point in time may consist of outstanding options to purchase common stock and issued and contingently issuable unvested restricted share units and other performance-based share awards. See Note (16) to these consolidated financial statements for more information regarding these restricted share units and other performance-based share awards. Options for common stock are excluded from the computation of diluted earnings per share if their effect is antidilutive. | |||||||||||
For fiscal years 2015, 2014 and 2013, the components of basic and diluted shares were as follows: | |||||||||||
WEIGHTED AVERAGE DILUTED SECURITIES | |||||||||||
(in thousands) | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Weighted average shares outstanding, basic | 28,579 | 32,007 | 31,754 | ||||||||
Incremental shares from share-based payment arrangements | 456 | 379 | 182 | ||||||||
Weighted average shares outstanding, diluted | 29,035 | 32,386 | 31,936 | ||||||||
Dilutive securities, stock options | 647 | 488 | 278 | ||||||||
Dilutive securities, unvested or unsettled share awards | 273 | 322 | 252 | ||||||||
Antidilutive securities, stock options | 239 | 441 | 586 | ||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Summary of activity in warranty accrual (in thousands) | |||||||||||
Fiscal Years Ended | |||||||||||
the Last Day of February, | |||||||||||
2015 | 2014 | ||||||||||
Beginning balance | $ | 19,269 | $ | 23,150 | |||||||
Additions to the accrual | 57,217 | 48,461 | |||||||||
Reductions of the accrual - payments and credits issued | -52,933 | -52,342 | |||||||||
Ending balance | $ | 23,553 | $ | 19,269 | |||||||
Schedule of weighted average securities (in thousands) | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Weighted average shares outstanding, basic | 28,579 | 32,007 | 31,754 | ||||||||
Incremental shares from share-based payment arrangements | 456 | 379 | 182 | ||||||||
Weighted average shares outstanding, diluted | 29,035 | 32,386 | 31,936 | ||||||||
Dilutive securities, stock options | 647 | 488 | 278 | ||||||||
Dilutive securities, unvested or unsettled share awards | 273 | 322 | 252 | ||||||||
Antidilutive securities, stock options | 239 | 441 | 586 | ||||||||
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Schedule of property and equipment (in thousands) | |||||||||||
Estimated | |||||||||||
Useful Lives | Balances at February 28, | ||||||||||
(Years) | 2015 | 2014 | |||||||||
Land | - | $ | 12,800 | $ | 12,800 | ||||||
Building and improvements | 3 | - | 40 | 102,058 | 98,660 | ||||||
Computer, furniture and other equipment | 3 | - | 15 | 64,464 | 60,291 | ||||||
Tools, molds and other production equipment | 1 | - | 10 | 25,861 | 23,017 | ||||||
Construction in progress | - | 3,039 | 5,865 | ||||||||
Property and equipment, gross | 208,222 | 200,633 | |||||||||
Less accumulated depreciation | -82,154 | -71,516 | |||||||||
Property and equipment, net | $ | 126,068 | $ | 129,117 | |||||||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | |||||||||||||||||||||||||||||||
Summary of carrying amounts and associated accumulated amortization for all intangible assets by operating segment (in thousands) | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Balances at | Balances at | ||||||||||||||||||||||||||||||
Weighted | February 28, 2014 | Year Ended February 28, 2015 | February 28, 2015 | ||||||||||||||||||||||||||||
Average | Gross | Cumulative | Acquisition | Gross | Cumulative | ||||||||||||||||||||||||||
Life | Carrying | Goodwill | and Retirement | Carrying | Goodwill | Accumulated | Net Book | ||||||||||||||||||||||||
Description / Life | (Years) | Amount | Impairments | Additions | Impairments | Adjustments | Amount | Impairments | Amortization | Value | |||||||||||||||||||||
Housewares: | |||||||||||||||||||||||||||||||
Goodwill | $ | 166,132 | $ | - | $ | - | $ | - | $ | - | $ | 166,132 | $ | - | $ | - | $ | 166,132 | |||||||||||||
Trademarks - indefinite | 75,200 | - | - | - | - | 75,200 | - | - | 75,200 | ||||||||||||||||||||||
Other intangibles - finite | 1.7 | 15,693 | - | 244 | - | -183 | 15,754 | - | -12,331 | 3,423 | |||||||||||||||||||||
Subtotal | 257,025 | - | 244 | - | -183 | 257,086 | - | -12,331 | 244,755 | ||||||||||||||||||||||
Healthcare / Home Environment: | |||||||||||||||||||||||||||||||
Goodwill | 251,758 | - | - | - | - | 251,758 | - | - | 251,758 | ||||||||||||||||||||||
Trademarks - indefinite | 54,000 | - | - | - | - | 54,000 | - | - | 54,000 | ||||||||||||||||||||||
Licenses - finite | 2.0 | 15,300 | - | - | - | - | 15,300 | - | -9,377 | 5,923 | |||||||||||||||||||||
Other Intangibles - finite | 6.7 | 114,490 | - | 827 | - | -1,675 | 113,642 | - | -43,848 | 69,794 | |||||||||||||||||||||
Subtotal | 435,548 | - | 827 | - | -1,675 | 434,700 | - | -53,225 | 381,475 | ||||||||||||||||||||||
Nutritional Supplements: | |||||||||||||||||||||||||||||||
Goodwill | - | - | 95,308 | - | 1,178 | 96,486 | - | - | 96,486 | ||||||||||||||||||||||
Brand assets - indefinite | - | - | 65,500 | - | - | 65,500 | - | - | 65,500 | ||||||||||||||||||||||
Other intangibles - finite | 6.3 | - | - | 43,800 | - | - | 43,800 | - | -4,171 | 39,629 | |||||||||||||||||||||
Subtotal | - | - | 204,608 | - | 1,178 | 205,786 | - | -4,171 | 201,615 | ||||||||||||||||||||||
Personal Care: | |||||||||||||||||||||||||||||||
Goodwill | 81,841 | -46,490 | - | - | - | 81,841 | -46,490 | - | 35,351 | ||||||||||||||||||||||
Trademarks - indefinite | 63,754 | - | - | -9,000 | - | 54,754 | - | - | 54,754 | ||||||||||||||||||||||
Trademarks - finite | 13.6 | 150 | - | - | - | - | 150 | - | -82 | 68 | |||||||||||||||||||||
Licenses - indefinite | 10,300 | - | - | - | - | 10,300 | - | - | 10,300 | ||||||||||||||||||||||
Licenses - finite | 7.8 | 18,683 | - | - | - | -4,987 | 13,696 | - | -11,216 | 2,480 | |||||||||||||||||||||
Other intangibles - finite | 3.2 | 49,437 | - | 85 | - | -1,561 | 47,961 | - | -30,602 | 17,359 | |||||||||||||||||||||
Subtotal | 224,165 | -46,490 | 85 | -9,000 | -6,548 | 208,702 | -46,490 | -41,900 | 120,312 | ||||||||||||||||||||||
Total | $ | 916,738 | $ | -46,490 | $ | 205,764 | $ | -9,000 | $ | -7,228 | $ | 1,106,274 | $ | -46,490 | $ | -111,627 | $ | 948,157 | |||||||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Balances at | Balances at | ||||||||||||||||||||||||||||||
Weighted | February 28, 2013 | Year Ended February 28, 2014 | February 28, 2014 | ||||||||||||||||||||||||||||
Average | Gross | Cumulative | Acquisition | Gross | Cumulative | ||||||||||||||||||||||||||
Life | Carrying | Goodwill | and Retirement | Carrying | Goodwill | Accumulated | Net Book | ||||||||||||||||||||||||
Description / Life | (Years) | Amount | Impairments | Additions | Impairments | Adjustments | Amount | Impairments | Amortization | Value | |||||||||||||||||||||
Housewares: | |||||||||||||||||||||||||||||||
Goodwill | $ | 166,132 | $ | - | $ | - | $ | - | $ | - | $ | 166,132 | $ | - | $ | - | $ | 166,132 | |||||||||||||
Trademarks - indefinite | 75,200 | - | - | - | - | 75,200 | - | - | 75,200 | ||||||||||||||||||||||
Other intangibles - finite | 2.7 | 15,609 | - | 339 | - | -255 | 15,693 | - | -11,149 | 4,544 | |||||||||||||||||||||
Subtotal | 256,941 | - | 339 | - | -255 | 257,025 | - | -11,149 | 245,876 | ||||||||||||||||||||||
Healthcare / Home Environment: | |||||||||||||||||||||||||||||||
Goodwill | 251,758 | - | - | - | - | 251,758 | - | - | 251,758 | ||||||||||||||||||||||
Trademarks - indefinite | 54,000 | - | - | - | - | 54,000 | - | - | 54,000 | ||||||||||||||||||||||
Licenses - finite | 3.0 | 15,300 | - | - | - | - | 15,300 | - | -6,416 | 8,884 | |||||||||||||||||||||
Other Intangibles - finite | 7.6 | 114,490 | - | - | - | - | 114,490 | - | -34,606 | 79,884 | |||||||||||||||||||||
Subtotal | 435,548 | - | - | - | - | 435,548 | - | -41,022 | 394,526 | ||||||||||||||||||||||
Personal Care: | |||||||||||||||||||||||||||||||
Goodwill | 81,841 | -46,490 | - | - | - | 81,841 | -46,490 | - | 35,351 | ||||||||||||||||||||||
Trademarks - indefinite | 75,803 | - | - | -12,049 | - | 63,754 | - | - | 63,754 | ||||||||||||||||||||||
Trademarks - finite | 14.6 | 150 | - | - | - | - | 150 | - | -77 | 73 | |||||||||||||||||||||
Licenses - indefinite | 10,300 | - | - | - | - | 10,300 | - | - | 10,300 | ||||||||||||||||||||||
Licenses - finite | 6.5 | 18,683 | - | - | - | - | 18,683 | - | -15,887 | 2,796 | |||||||||||||||||||||
Other intangibles - finite | 4.0 | 49,437 | - | - | - | - | 49,437 | - | -26,563 | 22,874 | |||||||||||||||||||||
Subtotal | 236,214 | -46,490 | - | -12,049 | - | 224,165 | -46,490 | -42,527 | 135,148 | ||||||||||||||||||||||
Total | $ | 928,703 | $ | -46,490 | $ | 339 | $ | -12,049 | $ | -255 | $ | 916,738 | $ | -46,490 | $ | -94,698 | $ | 775,550 | |||||||||||||
Summary of amortization expense attributable to intangible assets (in thousands) | |||||||||||||||||||||||||||||||
Aggregate Amortization Expense | |||||||||||||||||||||||||||||||
For the fiscal years ended | |||||||||||||||||||||||||||||||
Feb-15 | $ | 25,328 | |||||||||||||||||||||||||||||
Feb-14 | $ | 21,612 | |||||||||||||||||||||||||||||
Feb-13 | $ | 22,400 | |||||||||||||||||||||||||||||
Schedule of estimated amortization expense of intangible assets (in thousands) | |||||||||||||||||||||||||||||||
Estimated Amortization Expense | |||||||||||||||||||||||||||||||
For the fiscal years ended | |||||||||||||||||||||||||||||||
Feb-16 | $ | 27,138 | |||||||||||||||||||||||||||||
Feb-17 | $ | 26,826 | |||||||||||||||||||||||||||||
Feb-18 | $ | 22,885 | |||||||||||||||||||||||||||||
Feb-19 | $ | 18,492 | |||||||||||||||||||||||||||||
Feb-20 | $ | 16,733 | |||||||||||||||||||||||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) (Healthy Directions) | 12 Months Ended | ||||||
Feb. 28, 2015 | |||||||
Healthy Directions | |||||||
Acquisitions | |||||||
Schedule of acquisition date fair value of net assets (in thousands) | |||||||
Assets: | |||||||
Receivables | $ | 257 | |||||
Inventory | 6,226 | ||||||
Prepaid expenses and other current assets | 1,875 | ||||||
Property and equipment | 5,962 | ||||||
Goodwill | 95,308 | ||||||
Brand assets - indefinite | 65,500 | ||||||
Customer relationships - definite | 43,800 | ||||||
Subtotal - assets | 218,928 | ||||||
Liabilities: | |||||||
Accounts payable | 6,479 | ||||||
Accrued expenses | 13,964 | ||||||
Other long-term liabilities | 2,542 | ||||||
Subtotal - liabilities | 22,985 | ||||||
Net assets recorded | $ | 195,943 | |||||
Schedule of impact of acquisition on consolidated condensed statements of income from acquisition date through end of period (in thousands, except earnings per share data) | |||||||
Eight Months | |||||||
Ended | |||||||
February 28, 2015 | |||||||
Sales revenue, net | $ | 100,395 | |||||
Net income | 3,507 | ||||||
Earnings per share: | |||||||
Basic | $ | 0.12 | |||||
Diluted | $ | 0.12 | |||||
Schedule of supplemental pro forma information (in thousands, except earnings per share data) | |||||||
Fiscal Years Ended | |||||||
the Last Day of February, | |||||||
2015 | 2014 | ||||||
Sales revenue, net | $ | 1,498,249 | $ | 1,465,057 | |||
Net income | 134,614 | 88,460 | |||||
Earnings per share: | |||||||
Basic | $ | 4.71 | $ | 2.76 | |||
Diluted | $ | 4.64 | $ | 2.73 | |||
CREDIT_AGREEMENT_Tables
CREDIT AGREEMENT (Tables) | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
CREDIT AGREEMENT | |||||||||||
Schedule of interest rates on credit agreement (n thousands) | Fiscal Years Ended the Last Day of February, | ||||||||||
2015 | 2014 | 2013 | |||||||||
Average borrowings outstanding (1) | $ | 300,280 | $ | 29,680 | $ | 143,100 | |||||
Average interest rate during each year (2) | 2.5 | % | 1.3 | % | 1.7 | % | |||||
Interest rate range during each year | 1.9 - 4.4 | % | 1.2 - 3.6 | % | 1.6 - 4.0 | % | |||||
Weighted average interest rates on borrowings outstanding at year end | 1.9 | % | 0.0 | % | 1.6 | % | |||||
(1)Average borrowings outstanding is computed as the average of the current and four prior quarters ending balances of our revolving credit facility. | |||||||||||
(2)The average interest rate during each year is computed by dividing the total interest expense associated with our revolving credit facility for a fiscal year by the average borrowings outstanding for the same fiscal year. | |||||||||||
ACCRUED_EXPENSES_AND_OTHER_CUR1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended | ||||||
Feb. 28, 2015 | |||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||||||
Schedule of accrued expenses and other current liabilities (in thousands) | |||||||
Balances at February 28, | |||||||
2015 | 2014 | ||||||
Accrued compensation, benefits and payroll taxes | $ | 44,382 | $ | 69,877 | |||
Accrued sales returns, discounts and allowances | 24,271 | 25,297 | |||||
Accrued warranty returns | 23,553 | 19,269 | |||||
Accrued advertising | 18,930 | 16,414 | |||||
Accrued product liability, legal and professional fees | 6,001 | 5,705 | |||||
Accrued royalties | 7,683 | 5,712 | |||||
Accrued property, sales and other taxes | 6,850 | 6,835 | |||||
Derivative liabilities, current | 240 | 1,596 | |||||
Liability for uncertain tax positions | - | 453 | |||||
Other | 9,291 | 5,530 | |||||
Total accrued expenses and other current liabilities | $ | 141,201 | $ | 156,688 | |||
OTHER_LIABILITIES_NONCURRENT_T
OTHER LIABILITIES, NONCURRENT (Tables) | 12 Months Ended | ||||||
Feb. 28, 2015 | |||||||
OTHER LIABILITIES, NONCURRENT | |||||||
Schedule of other liabilities, noncurrent (in thousands) | |||||||
Balances at February 28, | |||||||
2015 | 2014 | ||||||
Deferred compensation liability | $ | 7,091 | $ | 7,257 | |||
Liability for uncertain tax positions | 10,295 | 13,471 | |||||
Other liabilities | 5,921 | 1,038 | |||||
Total other liabilities, noncurrent | $ | 23,307 | $ | 21,766 | |||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | ||||||||||||
Feb. 28, 2015 | |||||||||||||
Debt | |||||||||||||
Summary of long-term debt (dollars in thousands) | |||||||||||||
Original | |||||||||||||
Date | Interest | Balances at February 28, | |||||||||||
Borrowed | Rates | Matures | 2015 | 2014 | |||||||||
$37.61 million unsecured loan with the Mississippi Business Finance Corporation, interest is set and payable quarterly at a Base Rate, plus a margin of up to 1.00%, or applicable LIBOR plus a margin of up to 2.00%, as determined by the interest rate elected and the Leverage Ratio. Loan subject to holder's call on or after March 1, 2018. Loan can be prepaid without penalty. (1) | 13-Mar | 1.92 | % | 23-Mar | $ | 35,707 | $ | 37,607 | |||||
$75 million unsecured floating interest rate Senior Notes. Interest set and payable quarterly at three month LIBOR plus 90 basis points. Principal was due and paid on June 30, 2014. (2) | 4-Jun | 6.01 | % | 14-Jun | - | 75,000 | |||||||
$100 million unsecured Senior Notes payable at a fixed interest rate of 3.90%. Interest payable semi-annually. Annual principal payments of $20 million began in January 2014. Prepayment of notes are subject to a "make whole" premium. | 11-Jan | 3.90 | % | 18-Jan | 60,000 | 80,000 | |||||||
Credit Agreement. (3) | 15-Jan | Floating | 20-Jan | 337,500 | - | ||||||||
Total long-term debt | 433,207 | 192,607 | |||||||||||
Less current maturities of long-term debt | -21,900 | -96,900 | |||||||||||
Long-term debt, excluding current maturities | $ | 411,307 | $ | 95,707 | |||||||||
-1 | A $1.90 million principal payment was made on March 1, 2014. The remaining loan balance is payable as follows: $1.90 million on March 1 in each of 2015, 2018, 2019, 2020, 2021, and 2022; $3.80 million on March 1, 2016; $5.70 million on March 1, 2017; and $14.81 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023. | ||||||||||||
-2 | Floating interest rates were hedged with an interest rate swap to effectively fix interest rates while the Senior Notes were outstanding. Additional information regarding the swap is provided in Notes (12) and (13) to these consolidated financial statements. | ||||||||||||
-3 | See Note (7) to these consolidated financial statements for further information regarding the terms of the Credit Agreement. | ||||||||||||
Summary of components of interest expense (in thousands) | |||||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||||
2015 | 2014 | 2013 | |||||||||||
Interest and commitment fees | $ | 11,958 | $ | 5,610 | $ | 8,858 | |||||||
Deferred finance costs | 1,846 | 911 | 903 | ||||||||||
Interest rate swap settlements, net | 1,218 | 3,672 | 3,584 | ||||||||||
Total interest expense | $ | 15,022 | $ | 10,193 | $ | 13,345 | |||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||
Feb. 28, 2015 | |||||||||||
Income Taxes | |||||||||||
Schedule of components of income before taxes (in thousands) | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
U.S. | $ | 34,876 | $ | 38,147 | $ | 50,834 | |||||
Non-U.S. | 112,338 | 68,987 | 84,680 | ||||||||
Total | $ | 147,214 | $ | 107,134 | $ | 135,514 | |||||
Schedule of components of income tax expense (benefit) (in thousands) | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
U.S. | |||||||||||
Current | $ | 18,525 | $ | 24,736 | $ | 26,369 | |||||
Deferred | -3,014 | -9,021 | -8,776 | ||||||||
15,511 | 15,715 | 17,593 | |||||||||
Non-U.S. | |||||||||||
Current | -645 | 6,254 | 5,464 | ||||||||
Deferred | 1,184 | -1,083 | -3,209 | ||||||||
539 | 5,171 | 2,255 | |||||||||
Total | $ | 16,050 | $ | 20,886 | $ | 19,848 | |||||
Schedule of effective income tax rate reconciliation | |||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Expected effective income tax rate at the U.S. statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | |||||
Impact of U.S. state income taxes and other | 2.3 | % | 2.2 | % | -0.2 | % | |||||
Decrease in income taxes due to income from non-U.S. operations subject to varying income tax rates | -10.9 | % | -9.1 | % | -11.4 | % | |||||
Effect of zero tax rate in Macau | -16.6 | % | -12.3 | % | -8.8 | % | |||||
Decrease in income taxes resulting from tax audit settlements | -0.5 | % | -0.2 | % | - | % | |||||
Effect of asset impairment charges, most of which are non-deductible | 1.6 | % | 3.9 | % | - | % | |||||
Effective income tax rate | 10.9 | % | 19.5 | % | 14.6 | % | |||||
Schedule ofcomponents of deferred tax assets and liabilities (in thousands) | |||||||||||
Balances at February 28, | |||||||||||
2015 | 2014 | ||||||||||
Deferred tax assets, gross: | |||||||||||
Operating loss carryforwards | $ | 17,193 | $ | 17,455 | |||||||
Accounts receivable | 4,367 | 4,068 | |||||||||
Inventories | 8,450 | 8,528 | |||||||||
Accrued expenses and other | 17,666 | 20,307 | |||||||||
Foreign currency contracts, interest rate swaps and deferred exchange gains | 68 | 528 | |||||||||
Total gross deferred tax assets | 47,744 | 50,886 | |||||||||
Valuation allowance | -16,982 | -15,602 | |||||||||
Deferred tax liabilities: | |||||||||||
Depreciation and amortization | -54,788 | -60,670 | |||||||||
Total deferred tax liabilities, net | $ | -24,026 | $ | -25,386 | |||||||
Schedule of operating loss carryforwards (in thousands) | |||||||||||
Balances at February 28, 2015 | |||||||||||
Tax Year | Gross | Required | |||||||||
Expiration | Deferred Tax | Future Taxable | |||||||||
Date Range | Assets | Income | |||||||||
U.S. operating loss carryforwards | 2016 - 2032 | $ | 1,935 | $ | 6,260 | ||||||
Non-U.S. operating loss carryforwards with definite carryover periods | 2014 - 2025 | 1,848 | 12,203 | ||||||||
Non-U.S. operating loss carryforwards with indefinite carryover periods | Indefinite | 13,410 | 44,757 | ||||||||
Subtotals | 17,193 | 63,220 | |||||||||
Less portion of valuation allowance established for operating loss carryforwards | -14,649 | -49,393 | |||||||||
Total | $ | 2,544 | $ | 13,827 | |||||||
Schedule of unrecognized tax benefits (in thousands) | |||||||||||
Fiscal Years Ended | |||||||||||
the Last Day of February, | |||||||||||
2015 | 2014 | ||||||||||
Total unrecognized tax benefits, beginning balance | $ | 13,924 | $ | 15,759 | |||||||
Tax positions taken during the current period | 341 | - | |||||||||
Changes in tax positions taken during a prior period | -1,802 | 536 | |||||||||
Changes due to lapse in statute of limitations | -523 | -2,363 | |||||||||
Impact of foreign currency remeasurement on unrecognized tax benefits in the current period | -763 | 216 | |||||||||
Changes resulting from agreements with taxing authorities | -882 | -224 | |||||||||
Total unrecognized tax benefits, ending balance | 10,295 | 13,924 | |||||||||
Less current unrecognized tax benefits | - | -453 | |||||||||
Noncurrent unrecognized tax benefits | $ | 10,295 | $ | 13,471 | |||||||
Schedule of material tax years under examination or still subject to examination by major tax jurisdictions | As of February 28, 2015, tax years under examination or still subject to examination by material tax jurisdictions are as follows: | ||||||||||
Jurisdiction | Tax Years Under Examination | Open Tax Years | |||||||||
Mexico | - None - | 2009 | - | 2014 | |||||||
United Kingdom | - None - | 2014 | - | 2015 | |||||||
United States * | 2003, 2007, 2008, 2011, 2012 | 2003, 2007, 2008, 2011 - 2015 | |||||||||
Switzerland | - None - | 2008 | - | 2015 | |||||||
Hong Kong | - None - | 2007 | - | 2015 | |||||||
France | - None - | 2012 | - | 2015 | |||||||
Hungary | 2005, 2006, 2009 | 2005, 2006, 2009 - 2015 | |||||||||
* Kaz, Inc. and its U.S. subsidiaries are under examination for the 2003, 2007 and 2008 tax years. Helen of Troy Texas Corporation and its subsidiaries are currently under examination for the 2011 and 2012 tax years | |||||||||||
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 12 Months Ended | ||||||
Feb. 28, 2015 | |||||||
Fair Value | |||||||
Schedule of fair value hierarchy of financial assets and liabilities carried at fair value and measured on a recurring basis (in thousands) | |||||||
Fair Values at | |||||||
February 28, 2015 | |||||||
Description | (Level 2) (1) | ||||||
Assets: | |||||||
Money market accounts | $ | 1,692 | |||||
Foreign currency contracts | 129 | ||||||
Total assets | $ | 1,821 | |||||
Liabilities: | |||||||
Long-term debt - fixed rate (2) | $ | 62,006 | |||||
Long-term debt - floating rate | 35,707 | ||||||
Foreign currency contracts | 240 | ||||||
Total liabilities | $ | 97,953 | |||||
Fair Values at | |||||||
February 28, 2014 | |||||||
Description | (Level 2) (1) | ||||||
Assets: | |||||||
Money market accounts | $ | 1,549 | |||||
Total assets | $ | 1,549 | |||||
Liabilities: | |||||||
Long-term debt - fixed rate (2) | $ | 83,951 | |||||
Long-term debt - floating rate | 112,607 | ||||||
Interest rate swaps and foreign currency contracts | 1,596 | ||||||
Total liabilities | $ | 198,154 | |||||
-1 | Our financial assets and liabilities are classified as Level 2 assets because their valuation is dependent on observable inputs and other quoted prices for similar assets or liabilities, or model-derived valuations whose significant value drivers are observable. | ||||||
-2 | Debt values are reported at estimated fair value in these tables, but are recorded in the accompanying consolidated balance sheets at the undiscounted value of remaining principal payments due. | ||||||
Schedule of reconciliation of other non-financial assets measured on a non-recurring basis using significant unobservable inputs (Level 3) (in thousands) | |||||||
Fiscal Years Ended | |||||||
the Last Day of February, | |||||||
2015 | 2014 | ||||||
Beginning balances | $ | 775,550 | $ | 808,869 | |||
Total gains/income (losses/expense): | |||||||
Included in net income - realized | -34,152 | -33,403 | |||||
Acquired during the period | 205,764 | 339 | |||||
Acquisition adjustments and retirements during the period | 995 | -255 | |||||
Ending balances | $ | 948,157 | $ | 775,550 | |||
FINANCIAL_INSTRUMENTS_AND_RISK1
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Tables) | 12 Months Ended | ||||||||||||||
Feb. 28, 2015 | |||||||||||||||
Financial Instruments and Risk Management | |||||||||||||||
Schedule of fair values of derivative instruments (in thousands) | |||||||||||||||
February 28, 2015 | |||||||||||||||
Prepaid | Accrued | ||||||||||||||
Expenses | Expenses | ||||||||||||||
Final | and Other | and Other | |||||||||||||
Settlement | Notional | Current | Current | ||||||||||||
Designated as hedging instruments | Hedge Type | Date | Amount | Assets | Liabilities | ||||||||||
Foreign currency contracts - sell Euro | Cash flow | Jan-16 | € | 10,000 | $ | 129 | $ | - | |||||||
Foreign currency contracts - sell Pounds | Cash flow | Feb-16 | £ | 6,900 | - | 240 | |||||||||
Total fair value | $ | 129 | $ | 240 | |||||||||||
February 28, 2014 | |||||||||||||||
Prepaid | Accrued | ||||||||||||||
Expenses | Expenses | ||||||||||||||
Final | and Other | and Other | |||||||||||||
Settlement | Notional | Current | Current | ||||||||||||
Designated as hedging instruments | Hedge Type | Date | Amount | Assets | Liabilities | ||||||||||
Foreign currency contracts - sell Euro | Cash flow | Jun-14 | € | 2,850 | $ | - | $ | 89 | |||||||
Foreign currency contracts - sell Pounds | Cash flow | Nov-14 | £ | 4,250 | - | 280 | |||||||||
Interest rate swap | Cash flow | Jun-14 | $ | 75,000 | - | 1,227 | |||||||||
Total fair value | $ | - | $ | 1,596 | |||||||||||
Schedule of pre-tax effect of derivative instruments | |||||||||||||||
Fiscal Years Ended the Last Day of February | |||||||||||||||
Gain / (Loss) | Gain / (Loss) Reclassified | ||||||||||||||
Recognized in OCI | from Accumulated Other | ||||||||||||||
(effective portion) | Comprehensive Income (Loss) into Income | ||||||||||||||
2015 | 2014 | Location | 2015 | 2014 | |||||||||||
Currency contracts - cash flow hedges | $ | 434 | $ | -962 | SG&A | $ | 176 | $ | -98 | ||||||
Interest rate swaps - cash flow hedges | 28 | -111 | Interest expense | -1,199 | -3,707 | ||||||||||
Total | $ | 462 | $ | -1,073 | $ | -1,023 | $ | -3,805 | |||||||
OTHER_COMMITMENTS_AND_CONTINGE1
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | |||||||||||||||||||||
Feb. 28, 2015 | ||||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||||
Summary of contractual obligations and commercial commitments (in thousands) | ||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | After | |||||||||||||||||
Total | 1 year | 2 years | 3 years | 4 years | 5 years | 5 years | ||||||||||||||||
Fixed rate debt | $ | 60,000 | $ | 20,000 | $ | 20,000 | $ | 20,000 | $ | - | $ | - | $ | - | ||||||||
Floating rate debt | 373,207 | 1,900 | 3,800 | 5,700 | 1,900 | 339,400 | 20,507 | |||||||||||||||
Long-term incentive plan payouts | 12,379 | 5,718 | 4,096 | 2,565 | - | - | - | |||||||||||||||
Interest on fixed rate debt | 4,372 | 2,236 | 1,460 | 676 | - | - | - | |||||||||||||||
Interest on floating rate debt | 38,366 | 7,805 | 7,732 | 7,622 | 7,586 | 6,655 | 966 | |||||||||||||||
Open purchase orders | 197,998 | 197,998 | - | - | - | - | - | |||||||||||||||
Long-term purchase commitments | 2,609 | 1,094 | 606 | 606 | 303 | - | - | |||||||||||||||
Minimum royalty payments | 73,283 | 12,566 | 12,567 | 12,518 | 9,708 | 8,446 | 17,478 | |||||||||||||||
Advertising and promotional | 54,059 | 11,284 | 5,901 | 6,054 | 6,162 | 6,271 | 18,387 | |||||||||||||||
Operating leases | 20,791 | 4,063 | 3,467 | 2,876 | 2,720 | 1,394 | 6,271 | |||||||||||||||
Capital spending commitments | 2,597 | 2,597 | - | - | - | - | - | |||||||||||||||
Total contractual obligations (1) | $ | 839,661 | $ | 267,261 | $ | 59,629 | $ | 58,617 | $ | 28,379 | $ | 362,166 | $ | 63,609 | ||||||||
-1 | In addition to the contractual obligations and commercial commitments in the table above, as of February 28, 2015, we have recorded a provision for uncertain tax positions of $10.30 million. We are unable to reliably estimate the timing of most of the future payments, if any, related to uncertain tax positions; therefore, we have excluded these tax liabilities from the table above. | |||||||||||||||||||||
REPURCHASE_OF_HELEN_OF_TROY_CO1
REPURCHASE OF HELEN OF TROY COMMON STOCK (Tables) | 12 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
Repurchase of Helen of Troy Common Stock | ||||||||||
Summary of share repurchase activity | ||||||||||
Fiscal Years Ended the Last Day of February, | ||||||||||
2015 | 2014 | 2013 | ||||||||
Common stock repurchased on the open market or through tender offer | ||||||||||
Number of shares | 4,102,143 | 33,862 | 61,426 | |||||||
Aggregate market value of shares (in thousands) | $ | 273,599 | $ | 1,311 | $ | 1,759 | ||||
Average price per share | $ | 66.70 | $ | 38.71 | $ | 28.64 | ||||
Common stock received in connection with share-based compensation | ||||||||||
Number of shares | 71,950 | 112,677 | 49,126 | |||||||
Aggregate market value of shares (in thousands) | $ | 4,826 | $ | 6,937 | $ | 1,627 | ||||
Average price per share | $ | 67.08 | $ | 61.57 | $ | 33.12 | ||||
SHAREBASED_COMPENSATION_PLANS_
SHARE-BASED COMPENSATION PLANS (Tables) | 12 Months Ended | ||||||||||||||
Feb. 28, 2015 | |||||||||||||||
Share-based compensation plans | |||||||||||||||
Schedule of shares authorized for issuance under the stock incentive plan | |||||||||||||||
Shares originally authorized | 3,750,000 | ||||||||||||||
Less cumulative stock option grants issued, net of forfeitures | -1,154,860 | ||||||||||||||
Less restricted share awards previously vested and settled | -421,970 | ||||||||||||||
Subtotal | 2,173,170 | ||||||||||||||
Less maximum RSUs issuable upon vesting (1) | -28,937 | ||||||||||||||
Less estimated maximum PSUs issuable upon vesting (1) | -178,101 | ||||||||||||||
Shares available for issuance | 1,966,132 | ||||||||||||||
-1 | RSUs and PSUs potentially issuable are estimated by dividing the maximum payouts of $1.69 and $10.39 million, respectively (assuming no forfeitures), by grant date weighted average fair values of $58.36 and $58.34 per share, respectively. | ||||||||||||||
Schedule of share-based compensation expense in SG&A (in thousands, except per share data) | |||||||||||||||
Fiscal Years Ended the Last Day of February, | |||||||||||||||
2015 | 2014 | 2013 | |||||||||||||
Stock options | $ | 3,279 | $ | 2,380 | $ | 2,298 | |||||||||
Directors stock compensation | 816 | 619 | 473 | ||||||||||||
Performance based and other stock awards (1) | 1,732 | 13,446 | 2,988 | ||||||||||||
CEO separation compensation (2) | - | 15,000 | - | ||||||||||||
Employee stock purchase plan | 391 | 424 | 296 | ||||||||||||
Share-based payment expense | 6,218 | 31,869 | 6,055 | ||||||||||||
Less income tax benefits | -661 | -5,709 | -858 | ||||||||||||
Share-based payment expense, net of income tax benefits | $ | 5,557 | $ | 26,160 | $ | 5,197 | |||||||||
Earnings per share impact of share based payment expense: | |||||||||||||||
Basic | $ | 0.19 | $ | 0.82 | $ | 0.16 | |||||||||
Diluted | $ | 0.19 | $ | 0.81 | $ | 0.16 | |||||||||
The table above includes the following awards recognized in accordance with the terms of our former CEO’s Employment and Separation Agreements: | |||||||||||||||
-1 | Includes RSAs for 159,666 shares of common stock for fiscal year 2013 with a fair value at the date of the award of $35.55 per share, vested and settled at the end of February 2014, and RSAs for 62,304 shares of common stock for fiscal year 2014 with a fair value at the date of the award of $67.10 per share, vested in April 2014. For both fiscal years 2014 and 2013, PSUs for 100,000 shares of common stock having a fair value at the date of grant of $32.88 were awarded in accordance with the terms of our former CEO’s employment agreement. PSUs for 166,600 and 34,400 shares of common stock vested and settled in April 2014 and April 2013, respectively. | ||||||||||||||
-2 | $15 million in aggregate fair value of shares of common stock, awarded under the terms of the employment agreement with our former CEO. | ||||||||||||||
Schedule of assumptions used for fair value of stock option grants | |||||||||||||||
Fiscal Years Ended the Last Day of February | |||||||||||||||
2015 | 2014 | 2013 | |||||||||||||
Range of risk free interest rates used | 1.2% - 1.5% | 0.6% - 1.3% | 0.1% - 0.9% | ||||||||||||
Expected dividend rate | 0.00% | 0.00% | 0.00% | ||||||||||||
Weighted average volatility rate | 48.00% | 38.80% | 51.40% | ||||||||||||
Range of expected volatility rates used | 35.3% - 50.5% | 34.0% - 41.7% | 45.7% - 55.3% | ||||||||||||
Range of expected terms used (in years) | 4.1 - 4.4 | 4.1 - 4.4 | 4.1 - 4.4 | ||||||||||||
Summary of option activity (in thousands, except contractual term and per share data) | |||||||||||||||
Weighted | |||||||||||||||
Weighted | Weighted | Average | |||||||||||||
Average | Average | Remaining | |||||||||||||
Exercise | Grant Date | Contractual | |||||||||||||
Price | Fair Value | Term | Intrinsic | ||||||||||||
Options | (per share) | (per share) | (in years) | Value | |||||||||||
Outstanding at March 1, 2012 | 871 | $ | 26.26 | $ | 10.31 | 5.78 | $ | 5,570 | |||||||
Grants | 309 | 34.57 | 14.09 | ||||||||||||
Exercises | -248 | 22.88 | 2,634 | ||||||||||||
Forfeitures / expirations | -68 | 30.23 | |||||||||||||
Outstanding at February 28, 2013 | 864 | 29.89 | 11.98 | 6.26 | 6,209 | ||||||||||
Grants | 264 | 36.45 | 11.61 | ||||||||||||
Exercises | -239 | 25.36 | 4,663 | ||||||||||||
Forfeitures / expirations | -50 | 33.55 | |||||||||||||
Outstanding at February 28, 2014 | 839 | 33.03 | 12.38 | 6.48 | 27,081 | ||||||||||
Grants | 257 | 63.84 | 25.22 | ||||||||||||
Exercises | -187 | 29.70 | 6,498 | ||||||||||||
Forfeitures / expirations | -141 | 40.67 | |||||||||||||
Outstanding at February 28, 2015 | 768 | $ | 42.76 | $ | 16.28 | 6.59 | $ | 26,008 | |||||||
Exercisable at February 28, 2015 | 94 | $ | 28.32 | $ | 11.23 | 4.72 | $ | 4,523 | |||||||
Schedule of non-vested option activity (in thousands, except per share data) | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Non- | Grant Date | ||||||||||||||
Vested | Fair Value | ||||||||||||||
Options | (per share) | ||||||||||||||
Outstanding at March 1, 2012 | 617 | $ | 10.99 | ||||||||||||
Grants | 309 | 14.09 | |||||||||||||
Vested or forfeited | -237 | 10.29 | |||||||||||||
Outstanding at February 28, 2013 | 689 | 12.62 | |||||||||||||
Grants | 264 | 11.61 | |||||||||||||
Vested or forfeited | -225 | 11.06 | |||||||||||||
Outstanding at February 28, 2014 | 728 | 12.74 | |||||||||||||
Grants | 257 | 25.22 | |||||||||||||
Vested or forfeited | -311 | 13.87 | |||||||||||||
Outstanding at February 28, 2015 | 674 | $ | 16.98 | ||||||||||||
Schedule of unrecognized share-based compensation expense (in thousands, except weighted average expense period data) | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Unrecognized | Period of | ||||||||||||||
Compensation | Recognition | ||||||||||||||
Expense | (in months) | ||||||||||||||
Stock options | $ | 6,405 | 35.0 | ||||||||||||
Restricted Stock Units (RSUs and PSUs) | 3,585 | 22.1 | |||||||||||||
Restricted stock (RSA) | |||||||||||||||
Share-based compensation plans | |||||||||||||||
Summary of award activity (in thousands, except per share data) | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Restricted | Grant Date | ||||||||||||||
Stock | Fair Value | Fair Value | |||||||||||||
Awards | (per share) | Outstanding | |||||||||||||
Due for issue at March 1, 2012 | - | $ | - | $ | - | ||||||||||
Earned (1) | 160 | 35.55 | |||||||||||||
Vested and issued | - | - | |||||||||||||
Due for Issue at February 28, 2013 (2) | 160 | $ | 35.55 | $ | 5,920 | ||||||||||
Earned (2) | 62 | 67.10 | |||||||||||||
Vested and issued (1) | -160 | 35.55 | |||||||||||||
Due for issue at February 28, 2014 | 62 | $ | 67.10 | $ | 4,073 | ||||||||||
Vested and issued (2) | -62 | 67.10 | |||||||||||||
Due for issue at February 28, 2015 | - | $ | - | $ | - | ||||||||||
The schedule above includes the following awards earned based on fiscal years 2013 and 2014 performance and vested in accordance with the terms of our former CEO’s employment agreement: | |||||||||||||||
-1 | Fiscal year 2013 RSAs, which vested on February 28, 2014. | ||||||||||||||
-2 | Fiscal year 2014 RSAs, which vested on April 22, 2014. | ||||||||||||||
Restricted Stock Units (RSU) | |||||||||||||||
Share-based compensation plans | |||||||||||||||
Summary of award activity (in thousands, except per share data) | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Restricted | Grant Date | ||||||||||||||
Stock | Fair Value | Fair Value | |||||||||||||
Units | (per share) | Outstanding | |||||||||||||
Outstanding at March 1, 2012 | - | $ | - | $ | - | ||||||||||
Granted | 700 | 32.88 | |||||||||||||
Vested | - | - | |||||||||||||
Outstanding at February 28, 2013 | 700 | 32.88 | 25,956 | ||||||||||||
Vested (1) | -100 | 32.88 | |||||||||||||
Forfeited (2) | -500 | 32.88 | |||||||||||||
Outstanding at February 28, 2014 (3) | 100 | $ | 32.88 | $ | 6,531 | ||||||||||
Granted (4) | 118 | 58.35 | |||||||||||||
Vested (3) | -100 | $ | 32.88 | ||||||||||||
Outstanding at February 28, 2015 | 118 | $ | 58.35 | $ | 9,041 | ||||||||||
The schedule above includes the following awards and forfeitures recognized in accordance with the terms of our former CEO’s employment agreement: | |||||||||||||||
-1 | Includes fiscal year 2013 PSUs for 100,000 shares of common stock. 33,400 vested and settled on April 22, 2013 at a fair value of $35.55 per share and 66,600 vested and settled on February 28, 2014 at a fair value of $65.31 per share. | ||||||||||||||
-2 | PSUs for 500,000 shares of common stock were forfeited. | ||||||||||||||
-3 | Includes fiscal year 2014 PSUs for 100,000 shares of common stock, which were vested and settled on April 22, 2014 at a fair value of $67.10 per share. | ||||||||||||||
-4 | Includes target level RSUs and PSUs granted to its current CEO and certain members of the management team in connection with new long-term incentive compensation instituted by the Company in fiscal year 2015. | ||||||||||||||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
Comprehensive Income (Loss) | ||||||||||
Schedule of changes in accumulated other comprehensive income (loss) by component (in thousands) | ||||||||||
Unrealized Holding Gains (Losses) | ||||||||||
On Cash Flow Hedges | ||||||||||
Foreign | ||||||||||
Interest Rate | Currency | |||||||||
Swaps (1) | Contracts (2) | Total | ||||||||
Balance at February 28, 2013 | $ | -3,135 | $ | 406 | $ | -2,729 | ||||
Other comprehensive income before reclassification | -111 | -962 | -1,073 | |||||||
Amounts reclassified out of accumulated other comprehensive income | 3,707 | 98 | 3,805 | |||||||
Tax effects | -1,258 | 164 | -1,094 | |||||||
Other Comprehensive Income (Loss) | 2,338 | -700 | 1,638 | |||||||
Balance at February 28, 2014 | -797 | -294 | -1,091 | |||||||
Other comprehensive income before reclassification | 28 | 434 | 462 | |||||||
Amounts reclassified out of accumulated other comprehensive income | 1,199 | -176 | 1,023 | |||||||
Tax effects | -430 | -40 | -470 | |||||||
Other Comprehensive Income (Loss) | 797 | 218 | 1,015 | |||||||
Balance at February 28, 2015 | $ | - | $ | -76 | $ | -76 | ||||
-1 | Includes net deferred tax benefits of $0.43 million at the end of fiscal year 2014. | |||||||||
-2 | Includes net deferred tax benefits (expense) of $0.03 and $0.08 million at the end of fiscal years 2015 and 2014, respectively. | |||||||||
SELECTED_QUARTERLY_FINANCIAL_D1
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
Schedule of selected unaudited quarterly financial data (in thousands, except per share data) | ||||||||||||||||
May | August | November | February | Total | ||||||||||||
Fiscal Year 2015: | ||||||||||||||||
Sales revenue, net | $ | 311,778 | $ | 319,949 | $ | 435,674 | $ | 377,730 | $ | 1,445,131 | ||||||
Gross profit | 119,520 | 133,744 | 181,411 | 164,884 | 599,559 | |||||||||||
Asset impairment charges | 9,000 | - | - | - | 9,000 | |||||||||||
Net income | 16,398 | 18,839 | 55,377 | 40,550 | 131,164 | |||||||||||
Earnings per share (1) | ||||||||||||||||
Basic | 0.56 | 0.66 | 1.95 | 1.42 | 4.59 | |||||||||||
Diluted | 0.55 | 0.65 | 1.92 | 1.40 | 4.52 | |||||||||||
Fiscal Year 2014: | ||||||||||||||||
Sales revenue, net | $ | 304,516 | $ | 319,387 | $ | 380,730 | $ | 312,520 | $ | 1,317,153 | ||||||
Gross profit | 120,165 | 123,255 | 147,701 | 125,582 | 516,703 | |||||||||||
Asset impairment charges | 12,049 | - | - | - | 12,049 | |||||||||||
Net income | 14,392 | 23,318 | 37,524 | 11,014 | 86,248 | |||||||||||
Earnings per share (1) | ||||||||||||||||
Basic | 0.45 | 0.73 | 1.17 | 0.34 | 2.69 | |||||||||||
Diluted | 0.45 | 0.72 | 1.16 | 0.34 | 2.66 | |||||||||||
-1 | Earnings per share calculations for each quarter are based on the weighted average number of shares outstanding for each period, and the sum of the quarterly amounts may not necessarily equal the annual earnings per share amounts. | |||||||||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Segment Information | ||||||||||||||||
Schedule of segment information (in thousands) | ||||||||||||||||
Healthcare / | Nutritional | Personal | ||||||||||||||
Fiscal Year 2015 | Housewares | Home Environment | Supplements (1) | Care | Total | |||||||||||
Sales revenue, net | $ | 296,252 | $ | 613,253 | $ | 100,395 | $ | 435,231 | $ | 1,445,131 | ||||||
Asset impairment charges | - | - | - | 9,000 | 9,000 | |||||||||||
Operating income | 59,392 | 50,821 | 9,512 | 41,994 | 161,719 | |||||||||||
Identifiable assets | 397,956 | 683,533 | 218,181 | 354,085 | 1,653,755 | |||||||||||
Capital and intangible asset expenditures | 2,019 | 2,602 | 613 | 1,287 | 6,521 | |||||||||||
Depreciation and amortization | 3,615 | 20,532 | 5,380 | 10,126 | 39,653 | |||||||||||
Healthcare / | Nutritional | Personal | ||||||||||||||
Fiscal Year 2014 | Housewares | Home Environment | Supplements (1) | Care | Total | |||||||||||
Sales revenue, net | $ | 274,478 | $ | 568,075 | - | $ | 474,600 | $ | 1,317,153 | |||||||
Asset impairment charges | - | - | - | 12,049 | 12,049 | |||||||||||
Operating income | 50,828 | 20,764 | - | 45,508 | 117,100 | |||||||||||
Identifiable assets | 369,698 | 676,131 | 487,473 | 1,533,302 | ||||||||||||
Capital and intangible asset expenditures | 851 | 22,934 | - | 16,678 | 40,463 | |||||||||||
Depreciation and amortization | 3,461 | 19,318 | - | 11,060 | 33,839 | |||||||||||
Healthcare / | Nutritional | Personal | ||||||||||||||
Fiscal Year 2013 | Housewares | Home Environment | Supplements (1) | Care | Total | |||||||||||
Sales revenue, net | $ | 259,042 | $ | 538,666 | $ | - | $ | 490,555 | $ | 1,288,263 | ||||||
Operating income | 49,612 | 37,772 | - | 61,389 | 148,773 | |||||||||||
Identifiable assets | 362,378 | 645,586 | - | 466,040 | 1,474,004 | |||||||||||
Capital and intangible asset expenditures | 1,269 | 7,795 | - | 5,624 | 14,688 | |||||||||||
Depreciation and amortization | 4,803 | 16,614 | - | 13,008 | 34,425 | |||||||||||
-1 | The Nutritional Supplements segment includes eight months of operating results for fiscal year 2015. The segment was acquired on June 30, 2014. Operating income includes acquisition-related expenditures of $3.61 million for fiscal year 2015. For further information regarding the acquisition, see Note (6) to these consolidated financial statements. | |||||||||||||||
Schedule of domestic and international net sales revenue and long-lived assets (in thousands) | ||||||||||||||||
Fiscal Years Ended the Last Day of February, | ||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||
SALES REVENUE, NET: | ||||||||||||||||
United States | $ | 1,139,959 | $ | 1,019,525 | $ | 1,014,354 | ||||||||||
International | 305,172 | 297,628 | 273,909 | |||||||||||||
Total | $ | 1,445,131 | $ | 1,317,153 | $ | 1,288,263 | ||||||||||
LONG-LIVED ASSETS: | ||||||||||||||||
United States | $ | 636,089 | $ | 444,788 | $ | 515,411 | ||||||||||
International: | ||||||||||||||||
Barbados | 319,298 | 324,399 | 398,340 | |||||||||||||
Other international | 133,608 | 148,639 | 15,048 | |||||||||||||
Subtotal | 452,906 | 473,038 | 413,388 | |||||||||||||
Total | $ | 1,088,995 | $ | 917,826 | $ | 928,799 | ||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - General and cash (Details) (USD $) | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 |
item | ||
Basis of Presentation and Conventions Used in this Report | ||
Common shares, par value (in dollars per share) | $0.10 | $0.10 |
Number of segments | 4 | |
Cash and cash equivalents | ||
Restricted cash denominated in foreign currency | $0.73 | $2.59 |
Cash equivalents | $1.69 | $1.55 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Receivables (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 29, 2012 |
item | ||||
Receivables | ||||
Number of receivables valuation reserves | 2 | |||
Concentration Risk, Percentage | 0.70% | 0.60% | 0.60% | |
Gross trade receivable | Customer concentration risk | Two major customers | ||||
Receivables | ||||
Concentration Risk, Percentage | 15.00% | 10.00% | ||
Gross trade receivable | Customer concentration risk | Five top customers | ||||
Receivables | ||||
Concentration Risk, Percentage | 42.00% | 44.00% | ||
Allowances for doubtful accounts | ||||
Receivables | ||||
Valuation reserve | 1,849 | 2,127 | 1,764 | $1,811 |
Allowances for back-to-stock returns | ||||
Receivables | ||||
Valuation reserve | 4,033 | 2,552 | 3,267 | $3,730 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory and Licenses (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Summary of significant accounting policies | |||
General and administrative expenses charged to inventory | $36.37 | $36.23 | $30.28 |
General and administrative expenses directly attributable to the procurement of inventory included in inventory balances | $12.52 | $12.26 | |
Concentration Risk, Percentage | 0.70% | 0.60% | 0.60% |
Supplier concentration risk | |||
Summary of significant accounting policies | |||
Number of third-party manufacturers | 2 | ||
Number of suppliers exceeding 10 percent of product requirements | 1 | ||
Cost of goods sold manufactured by vendors | Supplier concentration risk | Vendors in Far East | |||
Summary of significant accounting policies | |||
Concentration Risk, Percentage | 67.00% | 69.00% | 68.00% |
Cost of goods sold manufactured by vendors | Supplier concentration risk | Top two manufacturers | |||
Summary of significant accounting policies | |||
Concentration Risk, Percentage | 17.00% | ||
Cost of goods sold manufactured by vendors | Supplier concentration risk | Top five suppliers | |||
Summary of significant accounting policies | |||
Concentration Risk, Percentage | 31.00% | ||
Net sales revenue | Net sales revenue subject to trademark license agreements | |||
Summary of significant accounting policies | |||
Concentration Risk, Percentage | 42.00% | 44.00% | 44.00% |
Net sales revenue | Net sales revenue subject to trademark license agreements | Top Licensor | |||
Summary of significant accounting policies | |||
Concentration Risk, Percentage | 19.00% | ||
Number of licensors exceeding 10 percent of net sales revenue | 1 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangibles (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Goodwill, intangible and other long-lived assets and impairments | |||
Impairment of Intangible Assets (Excluding Goodwill) | $9,000,000 | $12,050,000 | |
Non cash impairment charges after tax | 8,160,000 | 12,030,000 | |
Intangible asset amortization | $25,328,000 | $21,612,000 | $22,400,000 |
Minimum | |||
Economic useful lives and amortization of intangible assets | |||
Amortization period | 2 years | ||
Maximum | |||
Economic useful lives and amortization of intangible assets | |||
Amortization period | 30 years | ||
Patent | |||
Economic useful lives and amortization of intangible assets | |||
Amortization period | 14 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Warrants (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Accrual for warranty returns | |||
Beginning balance | $19,269,000 | $23,150,000 | |
Additions to the accrual | 57,217,000 | 48,461,000 | |
Reductions of the accrual - payments and credits issued | -52,933,000 | -52,342,000 | |
Ending balance | 23,553,000 | 19,269,000 | 23,150,000 |
SG&A | |||
Customer incentives in SG&A | 17,280,000 | 16,450,000 | 14,250,000 |
Advertising costs in SG&A | 53,750,000 | 46,290,000 | 51,080,000 |
Shipping and handling expenses in SG&A | 88,000,000 | 81,000,000 | 84,000,000 |
Foreign currency transactions and related derivative financial instruments | |||
Net foreign exchange gains (losses), including the impact of currency hedges, in SG&A | -5,720,000 | -950,000 | -2,360,000 |
Net foreign exchange gains (losses), including the impact of currency hedges and currency swaps, in income tax expense | 400,000 | -170,000 | -40,000 |
Nonoperating income, net | |||
Interest income | $60,000 | $70,000 | $70,000 |
Minimum | |||
Warranties | |||
Product Warranty Period | 2 years | ||
Maximum | |||
Warranties | |||
Product Warranty Period | 5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Weighted Average Shares (Details) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Weighted average diluted securities | |||
Weighted average shares outstanding, basic | 28,579 | 32,007 | 31,754 |
Incremental shares from share-based payment arrangements | 456 | 379 | 182 |
Weighted average shares outstanding, diluted | 29,035 | 32,386 | 31,936 |
Options | |||
Dilutive securities, in-the-money and/or unvested | |||
Antidilutive securities, as a result of out-of-the-money options (in shares) | 239 | 441 | 586 |
Stock Option Officers Employees and Consultants [Member] | |||
Dilutive securities, in-the-money and/or unvested | |||
Dilutive securities (in shares) | 647 | 488 | 278 |
Restricted stock (RSA) | |||
Dilutive securities, in-the-money and/or unvested | |||
Dilutive securities (in shares) | 273 | 322 | 252 |
CHANGE_IN_ACCOUNTING_ESTIMATE_
CHANGE IN ACCOUNTING ESTIMATE - Estimates (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Change in Accounting Estimate | |||||||||||
Operating income | $161,719 | $117,100 | $148,773 | ||||||||
Net Income | 40,550 | 55,377 | 18,839 | 16,398 | 11,014 | 37,524 | 23,318 | 14,392 | 131,164 | 86,248 | 115,666 |
Diluted earnings per share (in dollars per share) | $1.40 | $1.92 | $0.65 | $0.55 | $0.34 | $1.16 | $0.72 | $0.45 | $4.52 | $2.66 | $3.62 |
Revision to product liability estimates | |||||||||||
Change in Accounting Estimate | |||||||||||
Operating income | 2,220 | ||||||||||
Net Income | $1,360 | ||||||||||
Diluted earnings per share (in dollars per share) | $0.05 |
PROPERTY_AND_EQUIPMENT_Summary
PROPERTY AND EQUIPMENT - Summary of PPNE (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $208,222,000 | $200,633,000 | |
Less accumulated depreciation | -82,154,000 | -71,516,000 | |
Property and equipment, net | 126,068,000 | 129,117,000 | |
Depreciation expense | 14,330,000 | 12,230,000 | 12,030,000 |
Capital expenditures for property and equipment | 5,360,000 | 40,120,000 | 13,610,000 |
Rent expense related to operating leases | 5,010,000 | 5,680,000 | 6,390,000 |
Olive Branch, Mississippi distribution facility | |||
PROPERTY AND EQUIPMENT | |||
Capital expenditures for property and equipment | 34,030,000 | 4,030,000 | |
Land | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 12,800,000 | 12,800,000 | |
Land | Olive Branch, Mississippi distribution facility | |||
PROPERTY AND EQUIPMENT | |||
Area (in square feet or acres) | 84 | ||
Building and improvements | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 102,058,000 | 98,660,000 | |
Building and improvements | Minimum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful life | 3 years | ||
Building and improvements | Maximum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful life | 40 years | ||
Building and improvements | Olive Branch, Mississippi distribution facility | |||
PROPERTY AND EQUIPMENT | |||
Area (in square feet or acres) | 1,300,000 | ||
Computer, furniture and other equipment | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 64,464,000 | 60,291,000 | |
Computer, furniture and other equipment | Minimum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful life | 3 years | ||
Computer, furniture and other equipment | Maximum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful life | 15 years | ||
Tools, dies, molds and other production equipment | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 25,861,000 | 23,017,000 | |
Tools, dies, molds and other production equipment | Minimum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful life | 1 year | ||
Tools, dies, molds and other production equipment | Maximum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful life | 10 years | ||
Construction in progress | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $3,039,000 | $5,865,000 |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS - Goodwill impairment (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Goodwill and intangible assets | |||
Goodwill impairment charges | $0 | ||
Changes in Goodwill | |||
Cumulative Goodwill Impairments, balance at the beginning of the period | -46,490,000 | ||
Cumulative Goodwill Impairments, balance at the end of the period | -46,490,000 | -46,490,000 | |
Goodwill Net Book Value | 549,727,000 | 453,241,000 | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | -111,627,000 | -94,698,000 | |
Goodwill and intangible assets | |||
Gross Carrying Amount, balance at the beginning of the period | 916,738,000 | 928,703,000 | |
Additions | 205,764,000 | 339,000 | |
Impairments | -9,000,000 | -12,049,000 | |
Acquisition and Retirement Adjustments | -7,228,000 | -255,000 | |
Gross Carrying Amount, balance at the end of the period | 1,106,274,000 | 916,738,000 | 928,703,000 |
Net Book Value | 948,157,000 | 775,550,000 | |
Aggregate Amortization Expense | 25,328,000 | 21,612,000 | 22,400,000 |
Estimated Amortization Expense | |||
Feb-16 | 27,138,000 | ||
Feb-17 | 26,826,000 | ||
Feb-18 | 22,885,000 | ||
Feb-19 | 18,492,000 | ||
Feb-20 | 16,733,000 | ||
Non-cash impairment charges after tax | -9,000,000 | ||
Housewares | |||
Changes in Goodwill | |||
Goodwill Gross Carrying Amount, balance at the beginning of the period | 166,132,000 | 166,132,000 | |
Goodwill Gross Carrying Amount, balance at the end of the period | 166,132,000 | 166,132,000 | |
Goodwill Net Book Value | 166,132,000 | 166,132,000 | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | -12,331,000 | -11,149,000 | |
Goodwill and intangible assets | |||
Gross Carrying Amount, balance at the beginning of the period | 257,025,000 | 256,941,000 | |
Additions | 244,000 | 339,000 | |
Acquisition and Retirement Adjustments | -183,000 | -255,000 | |
Gross Carrying Amount, balance at the end of the period | 257,086,000 | 257,025,000 | |
Net Book Value | 244,755,000 | 245,876,000 | |
Housewares | Trademarks | |||
Goodwill and intangible assets | |||
Weighted Average Life | 2 years 8 months 12 days | ||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 15,609,000 | ||
Intangible assets - finite-lived, Additions | 339,000 | ||
Intangible assets - finite-lived, Acquisition and Retirement Adjustments | -255,000 | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 15,693,000 | ||
Intangible assets - finite-lived, Accumulated Amortization | -11,149,000 | ||
Intangible assets - finite-lived, Net Book Value | 4,544,000 | ||
Housewares | Other intangible assets | |||
Goodwill and intangible assets | |||
Weighted Average Life | 1 year 8 months 12 days | ||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 15,693,000 | ||
Intangible assets - finite-lived, Additions | 244,000 | ||
Intangible assets - finite-lived, Acquisition and Retirement Adjustments | -183,000 | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 15,754,000 | ||
Intangible assets - finite-lived, Accumulated Amortization | -12,331,000 | ||
Intangible assets - finite-lived, Net Book Value | 3,423,000 | ||
Housewares | Trademarks | |||
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | 75,200,000 | 75,200,000 | 75,200,000 |
Healthcare/Home Environment | |||
Changes in Goodwill | |||
Goodwill Gross Carrying Amount, balance at the beginning of the period | 251,758,000 | ||
Goodwill Gross Carrying Amount, balance at the end of the period | 251,758,000 | 251,758,000 | |
Goodwill Net Book Value | 251,758,000 | 251,758,000 | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | -53,225,000 | -41,022,000 | |
Goodwill and intangible assets | |||
Gross Carrying Amount, balance at the beginning of the period | 435,548,000 | ||
Additions | 827,000 | ||
Acquisition and Retirement Adjustments | -1,675,000 | ||
Gross Carrying Amount, balance at the end of the period | 434,700,000 | 435,548,000 | |
Net Book Value | 381,475,000 | 394,526,000 | |
Healthcare/Home Environment | Trademarks | |||
Goodwill and intangible assets | |||
Weighted Average Life | 3 years | ||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 15,300,000 | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 15,300,000 | ||
Intangible assets - finite-lived, Accumulated Amortization | -6,416,000 | ||
Intangible assets - finite-lived, Net Book Value | 8,884,000 | ||
Healthcare/Home Environment | Licenses | |||
Goodwill and intangible assets | |||
Weighted Average Life | 2 years | ||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 15,300,000 | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 15,300,000 | ||
Intangible assets - finite-lived, Accumulated Amortization | -9,377,000 | ||
Intangible assets - finite-lived, Net Book Value | 5,923,000 | ||
Healthcare/Home Environment | Other intangible assets | |||
Goodwill and intangible assets | |||
Weighted Average Life | 6 years 8 months 12 days | 7 years 7 months 6 days | |
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Additions | 827,000 | ||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 114,490,000 | 114,490,000 | |
Intangible assets - finite-lived, Acquisition and Retirement Adjustments | -1,675,000 | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 113,642,000 | 114,490,000 | |
Intangible assets - finite-lived, Accumulated Amortization | -43,848,000 | -34,606,000 | |
Intangible assets - finite-lived, Net Book Value | 69,794,000 | 79,884,000 | |
Healthcare/Home Environment | Trademarks | |||
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | 54,000,000 | 54,000,000 | 54,000,000 |
Nutritional Supplements | |||
Changes in Goodwill | |||
Goodwill Acquisition and Retirement Adjustments | 1,178,000 | ||
Goodwill Gross Carrying Amount, balance at the end of the period | 96,486,000 | ||
Goodwill Net Book Value | 96,486,000 | ||
Goodwill Additions | 95,308,000 | ||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | -4,171,000 | ||
Goodwill and intangible assets | |||
Additions | 204,608,000 | ||
Acquisition and Retirement Adjustments | 1,178,000 | ||
Gross Carrying Amount, balance at the end of the period | 205,786,000 | ||
Net Book Value | 201,615,000 | ||
Nutritional Supplements | Other intangible assets | |||
Goodwill and intangible assets | |||
Weighted Average Life | 6 years 3 months 18 days | ||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Additions | 43,800,000 | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 43,800,000 | ||
Intangible assets - finite-lived, Accumulated Amortization | -4,171,000 | ||
Intangible assets - finite-lived, Net Book Value | 39,629,000 | ||
Nutritional Supplements | Brand assets | |||
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Additions | 65,500,000 | ||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | 65,500,000 | ||
Personal Care | |||
Changes in Goodwill | |||
Goodwill Gross Carrying Amount, balance at the beginning of the period | 81,841,000 | 81,841,000 | |
Cumulative Goodwill Impairments, balance at the beginning of the period | -46,490,000 | ||
Goodwill Gross Carrying Amount, balance at the end of the period | 81,841,000 | 81,841,000 | |
Cumulative Goodwill Impairments, balance at the end of the period | -46,490,000 | -46,490,000 | |
Goodwill Net Book Value | 35,351,000 | 35,351,000 | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | -41,900,000 | -42,527,000 | |
Goodwill and intangible assets | |||
Gross Carrying Amount, balance at the beginning of the period | 224,165,000 | 236,214,000 | |
Additions | 85,000 | ||
Impairments | -9,000,000 | -12,049,000 | |
Acquisition and Retirement Adjustments | -6,548,000 | ||
Gross Carrying Amount, balance at the end of the period | 208,702,000 | 224,165,000 | |
Net Book Value | 120,312,000 | 135,148,000 | |
Personal Care | Trademarks | |||
Goodwill and intangible assets | |||
Weighted Average Life | 13 years 7 months 6 days | 14 years 7 months 6 days | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 150,000 | 150,000 | |
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 150,000 | 150,000 | |
Intangible assets - finite-lived, Accumulated Amortization | -82,000 | -77,000 | |
Intangible assets - finite-lived, Net Book Value | 68,000 | 73,000 | |
Personal Care | Licenses | |||
Goodwill and intangible assets | |||
Weighted Average Life | 7 years 9 months 18 days | 6 years 6 months | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 18,683,000 | 18,683,000 | |
Intangible assets - finite-lived, Acquisition and Retirement Adjustments | -4,987,000 | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 13,696,000 | 18,683,000 | |
Intangible assets - finite-lived, Accumulated Amortization | -11,216,000 | -15,887,000 | |
Intangible assets - finite-lived, Net Book Value | 2,480,000 | 2,796,000 | |
Personal Care | Other intangible assets | |||
Goodwill and intangible assets | |||
Weighted Average Life | 3 years 2 months 12 days | 4 years | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 49,437,000 | 49,437,000 | |
Intangible assets - finite-lived, Additions | 85,000 | ||
Intangible assets - finite-lived, Acquisition and Retirement Adjustments | -1,561,000 | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 47,961,000 | 49,437,000 | |
Intangible assets - finite-lived, Accumulated Amortization | -30,602,000 | -26,563,000 | |
Intangible assets - finite-lived, Net Book Value | 17,359,000 | 22,874,000 | |
Personal Care | Trademarks | |||
Goodwill and intangible assets | |||
Non-cash indefinite-lived intangible assets impairment charges | 9,000,000 | 12,049,000 | |
Non-cash indefinite-lived intangible assets impairment charges, net of tax | 8,160,000 | 12,030,000 | |
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the beginning of the period | 63,754,000 | 75,803,000 | |
Intangible assets - indefinite-lived, Impairments | -9,000,000 | -12,049,000 | |
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | 54,754,000 | 63,754,000 | |
Estimated Amortization Expense | |||
Non-cash impairment charges after tax | 8,160,000 | 12,030,000 | |
Personal Care | Licenses | |||
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | $10,300,000 | $10,300,000 | $10,300,000 |
GOODWILL_AND_INTANGIBLE_ASSETS3
GOODWILL AND INTANGIBLE ASSETS - Agreement (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Nov. 30, 2014 |
country | ||||
Trademark licensing agreement | ||||
Percentage of net sales | 0.70% | 0.60% | 0.60% | |
Trademark licensing agreement to market branded portable air purifiers | Honeywell International Inc. | Selected developing countries | ||||
Trademark licensing agreement | ||||
Number of countries in which rights to market Honeywell branded portable air purifiers were relinquished | 12 | |||
Payment received in exchange for the amendment after tax | ($6.98) | |||
Trademark licensing agreement to market branded portable air purifiers | Honeywell International Inc. | Selected developing countries | SG&A | ||||
Trademark licensing agreement | ||||
Payment received in exchange for the amendment | $7 | |||
Healthcare/Home Environment | Selected developing countries | Segment net sales | Customer concentration risk | ||||
Trademark licensing agreement | ||||
Percentage of net sales | 0.30% | 0.20% | 0.10% |
GOODWILL_AND_INTANGIBLE_ASSETS4
GOODWILL AND INTANGIBLE ASSETS - Obligations (Details) (USD $) | Feb. 28, 2015 |
In Thousands, unless otherwise specified | |
Other commitments and contingencies | |
Obligations payable in 2016 | $267,261 |
Royalty payments | |
Other commitments and contingencies | |
Obligations payable in 2016 | 12,566 |
Licenses | Royalty payments | |
Other commitments and contingencies | |
Obligations payable in 2016 | 12,570 |
Licenses | Advertising | |
Other commitments and contingencies | |
Obligations payable in 2016 | $5,740 |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | 12 Months Ended | 0 Months Ended | 8 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | Jun. 30, 2014 | Feb. 28, 2015 | |
Assets | ||||
Goodwill | $549,727,000 | $453,241,000 | $549,727,000 | |
Supplemental pro forma information | ||||
Sales revenue, net | 1,498,249,000 | 1,465,057,000 | ||
Net income | 134,614,000 | 88,460,000 | ||
Earnings per share: | ||||
Basic (in dollars per share) | $4.71 | $2.76 | ||
Diluted (in dollars per share) | $4.64 | $2.73 | ||
Healthy Directions | ||||
Acquisitions | ||||
Purchase price | 195,940,000 | |||
Acquisition-related expenses incurred | 3,610,000 | |||
Acquisition-related expenses incurred after tax | 2,310,000 | 2,310,000 | ||
Assets | ||||
Receivables | 257,000 | |||
Inventory | 6,226,000 | |||
Prepaid expenses and other current assets | 1,875,000 | |||
Property and equipment | 5,962,000 | |||
Goodwill | 95,308,000 | |||
Subtotal - assets | 218,928,000 | |||
Liabilities | ||||
Accounts payable | 6,479,000 | |||
Accrued expenses | 13,964,000 | |||
Other long-term liabilities | 2,542,000 | |||
Subtotal - liabilities | 22,985,000 | |||
Net assets recorded | 195,943,000 | |||
Impact of the acquisition on the consolidated condensed statements of income | ||||
Sales revenue, net | 100,395,000 | |||
Net income | 3,507,000 | |||
Earnings per share: | ||||
Basic (in dollars per share) | $0.12 | |||
Diluted (in dollars per share) | $0.12 | |||
Healthy Directions | Significant Unobservable Inputs (Level 3) | Income and market approaches | Intangible assets | ||||
Fair value key assumptions | ||||
Discount rate (as a percent) | 14.60% | |||
Healthy Directions | Customer relationships | ||||
Assets | ||||
Finite-lived intangible assets | 43,800,000 | |||
Earnings per share: | ||||
Expected weighted average lives of acquired finite-lived intangible assets | 7 years | |||
Healthy Directions | Customer Lists | Significant Unobservable Inputs (Level 3) | Income and market approaches | Intangible assets | ||||
Fair value key assumptions | ||||
Customer attrition rates (as a percent) | 14.00% | |||
Healthy Directions | Brand assets | ||||
Assets | ||||
Indefinite-lived intangible assets | $65,500,000 | |||
Healthy Directions | Brand assets | Significant Unobservable Inputs (Level 3) | Income and market approaches | Intangible assets | ||||
Fair value key assumptions | ||||
Royalty rates (as a percent) | 5.00% |
CREDIT_AGREEMENT_Details
CREDIT AGREEMENT (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Jun. 11, 2014 | Jun. 10, 2013 | Jan. 16, 2015 | Jun. 10, 2014 | |
Minimum | |||||||
Revolving Line of Credit | |||||||
Interest rate range during each year (as a percent) | 1.90% | 1.20% | 1.60% | ||||
Maximum | |||||||
Revolving Line of Credit | |||||||
Interest rate range during each year (as a percent) | 4.40% | 3.60% | 4.00% | ||||
Credit Agreement | |||||||
Revolving Line of Credit | |||||||
Unsecured revolving commitment | 337,500,000 | 570,000,000 | $650,000,000 | $375,000,000 | |||
Deferred Finance Costs, Net | 4,590,000 | ||||||
Amount outstanding | 770,000 | ||||||
Amount available for borrowings | 311,730,000 | ||||||
Average borrowings outstanding | 300,280,000 | 29,680,000 | 143,100,000 | ||||
Average interest rates during each year (as a percent) | 2.50% | 1.30% | 1.70% | ||||
Weighted average interest rates on borrowings outstanding at year | 1.90% | 0.00% | 1.60% | ||||
Number of prior quarters used in calculation of average borrowings outstanding | 4 | ||||||
Credit Agreement | Base Rate | |||||||
Revolving Line of Credit | |||||||
Variable Rate Basis | Base Rate | ||||||
Credit Agreement | Federal Funds Effective Swap Rate [Member] | |||||||
Revolving Line of Credit | |||||||
Variable Rate Basis | Federal Funds Rate | ||||||
Basis spread on variable rate (as percent) | 0.50% | ||||||
Credit Agreement | LIBOR | |||||||
Revolving Line of Credit | |||||||
Variable Rate Basis | LIBOR | ||||||
Basis spread on variable rate (as percent) | 1.00% | ||||||
Credit Agreement | One, two, three or six-month LIBOR [Member] | |||||||
Revolving Line of Credit | |||||||
Variable Rate Basis | 1, 2, 3, or 6-month LIBOR | ||||||
Credit Agreement | Minimum | |||||||
Revolving Line of Credit | |||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.15% | ||||||
Credit Agreement | Minimum | Base Rate | |||||||
Revolving Line of Credit | |||||||
Basis spread on variable rate (as percent) | 0.00% | ||||||
Credit Agreement | Minimum | One, two, three or six-month LIBOR [Member] | |||||||
Revolving Line of Credit | |||||||
Basis spread on variable rate (as percent) | 1.00% | ||||||
Credit Agreement | Maximum | |||||||
Revolving Line of Credit | |||||||
Debt instrument covenant leverage ratio maximum for dividends or repurchases | 2.75 | ||||||
Leverage Ratio | 3.25% | 3.00% | |||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.35% | ||||||
Credit Agreement | Maximum | Base Rate | |||||||
Revolving Line of Credit | |||||||
Basis spread on variable rate (as percent) | 1.00% | ||||||
Credit Agreement | Maximum | One, two, three or six-month LIBOR [Member] | |||||||
Revolving Line of Credit | |||||||
Basis spread on variable rate (as percent) | 2.00% | ||||||
Credit Agreement | Letter of credit | Minimum | |||||||
Revolving Line of Credit | |||||||
Basis spread on variable rate (as percent) | 1.00% | ||||||
Credit Agreement | Letter of credit | Maximum | |||||||
Revolving Line of Credit | |||||||
Basis spread on variable rate (as percent) | 2.00% |
ACCRUED_EXPENSES_AND_OTHER_CUR2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Summary of acrued expenses (Details) (USD $) | Feb. 28, 2015 | Feb. 28, 2014 |
In Thousands, unless otherwise specified | ||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued compensation, benefits and payroll taxes | $44,382 | $69,877 |
Accrued sales returns, discounts and allowances | 24,271 | 25,297 |
Accrued warranty returns | 23,553 | 19,269 |
Accrued advertising | 18,930 | 16,414 |
Accrued product liability, legal and professional fees | 6,001 | 5,705 |
Accrued royalties | 7,683 | 5,712 |
Accrued property, sales and other taxes | 6,850 | 6,835 |
Derivative liabilities, current | 240 | 1,596 |
Liability for uncertain tax positions | 453 | |
Other | 9,291 | 5,530 |
Total accrued expenses and other current liabilities | $141,201 | $156,688 |
OTHER_LIABILITIES_NONCURRENT_S
OTHER LIABILITIES, NONCURRENT - Summary of other liabilities non current (Details) (USD $) | Feb. 28, 2015 | Feb. 28, 2014 |
In Thousands, unless otherwise specified | ||
OTHER LIABILITIES, NONCURRENT | ||
Deferred compensation liability | $7,091 | $7,257 |
Liability for uncertain tax positions | 10,295 | 13,471 |
Other liabilities | 5,921 | 1,038 |
Total other liabilities, noncurrent | $23,307 | $21,766 |
LONGTERM_DEBT_Summary_of_debt_
LONG-TERM DEBT - Summary of debt (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Long-term debt | ||
Total long-term debt | $433,207,000 | $192,607,000 |
Less current maturities of long-term debt | -21,900,000 | -96,900,000 |
Long-term debt, excluding current maturities | 411,307,000 | 95,707,000 |
Unsecured state industrial development loan | ||
Long-term debt | ||
Interest rate (as a percent) | 1.92% | |
Total long-term debt | 35,707,000 | 37,607,000 |
Unsecured state industrial development loan | Base Rate | Maximum | ||
Long-term debt | ||
Basis spread on variable rate (as percent) | 1.00% | |
Unsecured state industrial development loan | LIBOR | Maximum | ||
Long-term debt | ||
Basis spread on variable rate (as percent) | 2.00% | |
Unsecured floating interest rate 10 year Senior Notes | ||
Long-term debt | ||
Interest rate (as a percent) | 6.01% | |
Total long-term debt | 75,000,000 | |
Unsecured floating interest rate 10 year Senior Notes | LIBOR | ||
Long-term debt | ||
Basis spread on variable rate (as percent) | 0.90% | |
3.90% unsecured Senior Notes payable | ||
Long-term debt | ||
Face amount | 100,000,000 | |
Interest rate (as a percent) | 3.90% | |
Interest rate (as a percent) | 3.90% | |
Principal payments | 20,000,000 | |
Total long-term debt | 60,000,000 | 80,000,000 |
Credit Agreement | ||
Long-term debt | ||
Total long-term debt | $337,500,000 |
LONGTERM_DEBT_Additional_Infor
LONG-TERM DEBT - Additional Information (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Long-term debt | |||
Principal payment made | $96,900,000 | $20,000,000 | $3,000,000 |
Unsecured state industrial development loan | |||
Long-term debt | |||
Outstanding principal payable on March 1, 2014 | 1,900,000 | ||
Outstanding principal payable on March 1, 2015 | 1,900,000 | ||
Outstanding principal payable on March 1, 2016 | 3,800,000 | ||
Outstanding principal payable on March 1, 2017 | 5,700,000 | ||
Outstanding principal payable on March 1, 2018 | 1,900,000 | ||
Outstanding principal payable on March 1, 2019 | 1,900,000 | ||
Outstanding principal payable on March 1, 2020 | 1,900,000 | ||
Outstanding principal payable on March 1, 2021 | 1,900,000 | ||
Outstanding principal payable on March 1, 2022 | 1,900,000 | ||
Outstanding principal payable on March 1, 2023 | 14,810,000 | ||
Unsecured state industrial development loan | Maximum | Base Rate | |||
Long-term debt | |||
Margin (as a percent) | 1.00% | ||
Basis spread on variable rate (as percent) | 1.00% | ||
Unsecured state industrial development loan | Maximum | LIBOR | |||
Long-term debt | |||
Margin (as a percent) | 2.00% | ||
Basis spread on variable rate (as percent) | 2.00% | ||
Unsecured floating interest rate 10 year Senior Notes | LIBOR | |||
Long-term debt | |||
Margin (as a percent) | 0.90% | ||
Basis spread on variable rate (as percent) | 0.90% | ||
3.90% unsecured Senior Notes payable | |||
Long-term debt | |||
Face amount | $100,000,000 | ||
Interest rate (as a percent) | 3.90% |
LONGTERM_DEBT_Interest_expense
LONG-TERM DEBT - Interest expense (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Long-term debt | |||
Limit on additional debt borrowings | $296,820,000 | ||
INTEREST EXPENSE | |||
Interest and commitment fees | 11,958,000 | 5,610,000 | 8,858,000 |
Deferred finance costs | 1,846,000 | 911,000 | 903,000 |
Interest rate swap settlements, net | 1,218,000 | 3,672,000 | 3,584,000 |
Total interest expense | 15,022,000 | 10,193,000 | 13,345,000 |
Fixed rate Senior Notes | Significant Other Observable Market Inputs (Level 2) | |||
Long-term debt | |||
Long-term debt | 62,006,000 | 83,951,000 | |
Fixed rate Senior Notes | Book value | |||
Long-term debt | |||
Long-term debt | 60,000,000 | ||
Fixed rate Senior Notes | Fair Values | Discounted cash flow analysis | |||
Long-term debt | |||
Long-term debt | 62,010,000 | ||
Fixed rate Senior Notes | Fair Values | Significant Other Observable Market Inputs (Level 2) | Discounted cash flow analysis | |||
Long-term debt | |||
Long-term debt | $2.05 | $1.75 |
INCOME_TAXES_Components_of_inc
INCOME TAXES - Components of income tax and deferred tax (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Components of income (loss) before income tax expense | |||
U.S. | $34,876,000 | $38,147,000 | $50,834,000 |
Non-U.S. | 112,338,000 | 68,987,000 | 84,680,000 |
Income before income taxes | 147,214,000 | 107,134,000 | 135,514,000 |
U.S. | |||
Current | 18,525,000 | 24,736,000 | 26,369,000 |
Deferred | -3,014,000 | -9,021,000 | -8,776,000 |
U.S. | 15,511,000 | 15,715,000 | 17,593,000 |
Non-U.S. | |||
Current | -645,000 | 6,254,000 | 5,464,000 |
Deferred | 1,184,000 | -1,083,000 | -3,209,000 |
Non-U.S. | 539,000 | 5,171,000 | 2,255,000 |
Total | 16,050,000 | 20,886,000 | 19,848,000 |
Effective income tax rate reconciliation | |||
Expected effective income tax rate at the U.S. statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
Impact of U.S. state income taxes and other (as a percent) | 2.30% | 2.20% | -0.20% |
Decrease in income taxes resulting from income from non-U.S. operations subject to varying income tax rates (as a percent) | -10.90% | -9.10% | -11.40% |
Effect of zero tax rate in Macau (as a percent) | 16.60% | 12.30% | 8.80% |
Decrease in income taxes resulting from tax audit settlements (as a percent) | -0.50% | -0.20% | |
Effect of asset impairment charges, most of which are non-deductible (as a percent) | 1.60% | 3.90% | |
Effective income tax rate (as a percent) | 10.90% | 19.50% | 14.60% |
Deferred tax assets, gross: | |||
Operating loss carryforwards | 17,193,000 | 17,455,000 | |
Accounts receivable | 4,367,000 | 4,068,000 | |
Inventories | 8,450,000 | 8,528,000 | |
Accrued expenses and other | 17,666,000 | 20,307,000 | |
Foreign currency contracts, interest rate swaps, and deferred exchange gains | 68,000 | 528,000 | |
Total gross deferred tax assets | 47,744,000 | 50,886,000 | |
Valuation allowance | -16,982,000 | -15,602,000 | |
Deferred tax liabilities: | |||
Depreciation and amortization | -54,788,000 | -60,670,000 | |
Net increase in valuation allowance | $1,380,000 |
INCOME_TAXES_Operating_loss_ca
INCOME TAXES - Operating loss carryforwards (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Gross deferred tax assets | ||
Subtotals | $17,193,000 | $17,455,000 |
Less portion of valuation allowance established for operating loss carryforwards | -14,649,000 | |
Total | 2,544,000 | |
Required future taxable income | ||
Subtotals | 63,220,000 | |
Less portion of valuation allowance established for operating loss carryforwards | -49,393,000 | |
Total | 13,827,000 | |
U.S. | ||
Gross deferred tax assets | ||
Operating loss carryforwards with definite carryover periods | 1,935,000 | |
Required future taxable income | ||
Required future taxable income - operating loss carryforwards with definite carryover periods | 6,260,000 | |
Non-U.S. | ||
Gross deferred tax assets | ||
Operating loss carryforwards with definite carryover periods | 1,848,000 | |
Operating loss carryforwards with indefinite carryover periods | 13,410,000 | |
Required future taxable income | ||
Required future taxable income - operating loss carryforwards with definite carryover periods | 12,203,000 | |
Required future taxable income - operating loss carryforwards with indefinite carryover periods | 44,757,000 | |
Non-U.S. | Hungary | ||
Income tax, other disclosures | ||
Unrecognized tax benefit recorded | $2,540,000 |
INCOME_TAXES_Unrecognized_tax_
INCOME TAXES - Unrecognized tax benefits (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Unrecognized Tax Benefits | |||
Total unrecognized tax benefits, beginning balance | $13,924,000 | $15,759,000 | |
Changes in tax positions taken during a prior period | -1,802,000 | 536,000 | |
Changes due to lapse in statute of limitations | -523,000 | -2,363,000 | |
Impact of foreign currency remeasurement on unrecognized tax benefits in the current period | 763,000 | -216,000 | |
Decrease in income taxes due to income from non-U.S. operations subject to varying income tax rates (as a percent) | 882,000 | 224,000 | |
Total unrecognized tax benefits, ending balance | 10,295,000 | 13,924,000 | 15,759,000 |
Less current unrecognized tax benefits | -453,000 | ||
Noncurrent unrecognized tax benefits | 10,295,000 | 13,471,000 | |
Tax positions taken during the current period | 341,000 | ||
Liability for tax-related interest expense included in unrecognized tax benefits | 1,530,000 | 2,660,000 | |
Liability for tax-related penalties included in unrecognized tax benefits | 1,290,000 | 1,480,000 | |
Tax-related interest and penalties expense included in provisions for income tax | $230,000 | $560,000 | $1,030,000 |
FAIR_VALUE_Fair_values_of_fina
FAIR VALUE - Fair values of financial assets and liabilities (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Personal Care | Trademarks | ||
Assets measured at fair value on a non-recurring basis | ||
Non-cash impairment charges | $9,000,000 | $12,049,000 |
Non-cash impairment charges after tax | 8,160,000 | 12,030,000 |
Significant Other Observable Market Inputs (Level 2) | Fixed rate Senior Notes | ||
Liabilities: | ||
Long-term debt | 62,006,000 | 83,951,000 |
Significant Other Observable Market Inputs (Level 2) | Long-term debt - floating rate | ||
Liabilities: | ||
Long-term debt | 35,707,000 | 112,607,000 |
Fair Values | Discounted cash flow analysis | Fixed rate Senior Notes | ||
Liabilities: | ||
Long-term debt | 62,010,000 | |
Fair Values | Significant Other Observable Market Inputs (Level 2) | ||
Liabilities: | ||
Total liabilities | 97,953,000 | 198,154,000 |
Fair Values | Significant Other Observable Market Inputs (Level 2) | Discounted cash flow analysis | Fixed rate Senior Notes | ||
Liabilities: | ||
Long-term debt | 2.05 | 1.75 |
Recurring | Significant Other Observable Market Inputs (Level 2) | ||
Assets: | ||
Total assets | 1,821,000 | 1,549,000 |
Recurring | Significant Other Observable Market Inputs (Level 2) | Foreign currency contracts | ||
Assets: | ||
Derivative assets | 129,000 | |
Liabilities: | ||
Derivative liabilities | 240,000 | |
Recurring | Significant Other Observable Market Inputs (Level 2) | Interest rate swaps and foreign currency contracts | ||
Liabilities: | ||
Derivative liabilities | 1,596,000 | |
Recurring | Significant Other Observable Market Inputs (Level 2) | Money market accounts | ||
Assets: | ||
Cash and cash equivalents | 1,692,000 | 1,549,000 |
Non-recurring | Significant Unobservable Inputs (Level 3) | Personal Care | Trademarks | ||
Assets measured at fair value on a non-recurring basis | ||
Non-cash impairment charges | 9,000,000 | 12,050,000 |
Non-cash impairment charges after tax | $8,160,000 | $12,030,000 |
FAIR_VALUE_Other_nonfinancial_
FAIR VALUE - Other non-financial assets (Details) (Other Non-financial Assets, Significant Unobservable Inputs (Level 3), USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 |
Other Non-financial Assets | Significant Unobservable Inputs (Level 3) | ||
Fair value measurement on non-recurring basis using significant unobservable inputs (Level 3) | ||
Beginning balances | $775,550 | $808,869 |
Total gains/income (losses/expense): | ||
Included in net income - realized | -34,152 | -33,403 |
Acquired during the period | 205,764 | 339 |
Acquisition adjustments and retirements during the period | 995 | -255 |
Ending balances | $948,157 | $775,550 |
FINANCIAL_INSTRUMENTS_AND_RISK2
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT- Foreign currency risk (Details) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
USD ($) | USD ($) | USD ($) | SG&A | SG&A | SG&A | Venezuelan Bolivar | Venezuelan Bolivar | Venezuelan Bolivar | Venezuelan Bolivar | Chinese Renminbi | Geographic concentration | Geographic concentration | Net sales revenue | Net sales revenue | Net sales revenue | |
USD ($) | USD ($) | USD ($) | VEF | VEF | SICAD 1 | SICAD 2 | Venezuela | Venezuela | Geographic concentration | Geographic concentration | Geographic concentration | |||||
VEF | VEF | USD ($) | USD ($) | International operations - transactions denominated in foreign currencies | International operations - transactions denominated in foreign currencies | International operations - transactions denominated in foreign currencies | ||||||||||
Foreign Currency Risk and Currency Exchange Uncertainties | ||||||||||||||||
Percentage of net sales | 0.70% | 0.60% | 0.60% | 14.00% | 15.00% | 15.00% | ||||||||||
Net foreign exchange gains (losses), including the impact of currency hedges and currency swaps | ($5.72) | ($0.95) | ($2.36) | |||||||||||||
Net foreign exchange gains (losses), including the impact of currency hedges and currency swaps, in income tax expense | 0.4 | -0.17 | -0.04 | |||||||||||||
Currency Exchange Uncertainties | ||||||||||||||||
Chinese Renminbi appreciated against the U.S.Dollar | 3.00% | |||||||||||||||
Value of foreign currency before devaluation (in Bolivars per dollar) | 4.3 | |||||||||||||||
Value of foreign currency after devaluation (in dollars per Bolivar) | 6.3 | |||||||||||||||
Foreign currency exchange rate | 6.3 | 12 | 177 | |||||||||||||
Net investment | $10.38 | $7.35 |
FINANCIAL_INSTRUMENTS_AND_RISK3
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT- Interest rate risk (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Financial instruments and risk management | |||
Floating rate debt | $373,210,000 | ||
Repayment of principal | 96,900,000 | 20,000,000 | 3,000,000 |
Credit Agreement | |||
Financial instruments and risk management | |||
Debt instrument intermediate draws | 770,000 | ||
3.90% unsecured Senior Notes payable | |||
Financial instruments and risk management | |||
Fixed rate debt | 60,000,000 | ||
Fixed interest rate (as a percent) | 3.90% | ||
Effective fixed interest rate on debt (as a percent) | 3.90% | ||
Unsecured floating interest rate 10 year Senior Notes | |||
Financial instruments and risk management | |||
Floating rate debt amount | $75,000,000 | ||
Effective fixed interest rate on debt (as a percent) | 6.01% | ||
Unsecured state industrial development loan | |||
Financial instruments and risk management | |||
Effective fixed interest rate on debt (as a percent) | 1.92% | ||
Interest rate swaps | Unsecured floating interest rate 10 year Senior Notes | |||
Financial instruments and risk management | |||
Effective fixed interest rate on debt (as a percent) | 6.01% | ||
Percentage of change in floating interest rate offset by swap | 100.00% | ||
Effectiveness percentage of swap | 100.00% |
FINANCIAL_INSTRUMENTS_AND_RISK4
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT- Fair values of derivative instruments (Details) (Designated as cash flow hedging instruments) | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 |
In Thousands, unless otherwise specified | Prepaid Expenses and Other Current Assets | Accrued Expenses and Other Current Liability | Accrued Expenses and Other Current Liability | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Foreign currency contracts | Interest rate swaps | Interest rate swaps |
USD ($) | USD ($) | USD ($) | Prepaid Expenses and Other Current Assets | Accrued Expenses and Other Current Liability | Euros | Pounds | Sell | Sell | Sell | Sell | USD ($) | Accrued Expenses and Other Current Liability | |
USD ($) | USD ($) | Accrued Expenses and Other Current Liability | Accrued Expenses and Other Current Liability | Euros | Euros | Pounds | Pounds | USD ($) | |||||
USD ($) | USD ($) | EUR (€) | EUR (€) | GBP (£) | GBP (£) | ||||||||
Fair values of derivative instruments in the consolidated balance sheet | |||||||||||||
Notional Amount | € 10,000 | € 2,850 | £ 6,900 | £ 4,250 | $75,000 | ||||||||
Derivative assets | 129 | 129 | |||||||||||
Derivative liabilities | $240 | $1,596 | $240 | $89 | $280 | $1,227 |
FINANCIAL_INSTRUMENTS_AND_RISK5
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT- Pre-tax effect of derivative instruments (Details) (Cash flow hedges, USD $) | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Recognized in OCI (effective portion) | $462,000 | ($1,073,000) |
Gain/ (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | -1,023,000 | -3,805,000 |
Foreign currency contracts | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Recognized in OCI (effective portion) | 434,000 | -962,000 |
Losses from foreign currency contracts expected to be reclassified into income over the next twelve months | 110,000 | |
Foreign currency contracts | SG&A | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | 176,000 | -98,000 |
Interest rate swaps | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Recognized in OCI (effective portion) | 28,000 | -111,000 |
Interest rate swaps | Interest expenses | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | ($1,199,000) | ($3,707,000) |
OTHER_COMMITMENTS_AND_CONTINGE2
OTHER COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Feb. 28, 2014 | Feb. 28, 2015 | |
Contractual obligations and commercial commitments | ||
Total | $839,661,000 | |
2016, 1 year | 267,261,000 | |
2017, 2 years | 59,629,000 | |
2018, 3 years | 58,617,000 | |
2019, 4 years | 28,379,000 | |
2020, 5 years | 362,166,000 | |
After 5 years | 63,609,000 | |
Provision for uncertain tax position | 13,471,000 | 10,295,000 |
Construction Agreement | ||
Contractual obligations and commercial commitments | ||
Total | 2,597,000 | |
2016, 1 year | 2,597,000 | |
Long-term purchase commitments | ||
Contractual obligations and commercial commitments | ||
Total | 2,609,000 | |
2016, 1 year | 1,094,000 | |
2017, 2 years | 606,000 | |
2018, 3 years | 606,000 | |
2019, 4 years | 303,000 | |
Open purchase orders | ||
Contractual obligations and commercial commitments | ||
Total | 197,998,000 | |
2016, 1 year | 197,998,000 | |
Separation Agreement | Former CEO | ||
Other commitments and contingencies | ||
Charge for accrued payment required under agreement (after tax) | 16,340,000 | |
Employment Contracts | ||
Other commitments and contingencies | ||
Aggregate commitment | 7,950,000 | |
Employment contract term | 2 years | |
Fixed rate Senior Notes | ||
Contractual obligations and commercial commitments | ||
Total | 60,000,000 | |
2016, 1 year | 20,000,000 | |
2017, 2 years | 20,000,000 | |
2018, 3 years | 20,000,000 | |
Long-term debt - floating rate | ||
Contractual obligations and commercial commitments | ||
Total | 373,207,000 | |
2016, 1 year | 1,900,000 | |
2017, 2 years | 3,800,000 | |
2018, 3 years | 5,700,000 | |
2019, 4 years | 1,900,000 | |
2020, 5 years | 339,400,000 | |
After 5 years | 20,507,000 | |
Long-term incentive plan payouts | ||
Contractual obligations and commercial commitments | ||
Total | 12,379,000 | |
2016, 1 year | 5,718,000 | |
2017, 2 years | 4,096,000 | |
2018, 3 years | 2,565,000 | |
Interest on fixed rate debt | ||
Contractual obligations and commercial commitments | ||
Total | 4,372,000 | |
2016, 1 year | 2,236,000 | |
2017, 2 years | 1,460,000 | |
2018, 3 years | 676,000 | |
Interest on floating rate debt | ||
Contractual obligations and commercial commitments | ||
Total | 38,366,000 | |
2016, 1 year | 7,805,000 | |
2017, 2 years | 7,732,000 | |
2018, 3 years | 7,622,000 | |
2019, 4 years | 7,586,000 | |
2020, 5 years | 6,655,000 | |
After 5 years | 966,000 | |
Royalty payments | ||
Contractual obligations and commercial commitments | ||
Total | 73,283,000 | |
2016, 1 year | 12,566,000 | |
2017, 2 years | 12,567,000 | |
2018, 3 years | 12,518,000 | |
2019, 4 years | 9,708,000 | |
2020, 5 years | 8,446,000 | |
After 5 years | 17,478,000 | |
Advertising and promotional | ||
Contractual obligations and commercial commitments | ||
Total | 54,059,000 | |
2016, 1 year | 11,284,000 | |
2017, 2 years | 5,901,000 | |
2018, 3 years | 6,054,000 | |
2019, 4 years | 6,162,000 | |
2020, 5 years | 6,271,000 | |
After 5 years | 18,387,000 | |
Operating leases | ||
Contractual obligations and commercial commitments | ||
Total | 20,791,000 | |
2016, 1 year | 4,063,000 | |
2017, 2 years | 3,467,000 | |
2018, 3 years | 2,876,000 | |
2019, 4 years | 2,720,000 | |
2020, 5 years | 1,394,000 | |
After 5 years | $6,271,000 |
REPURCHASE_OF_HELEN_OF_TROY_CO2
REPURCHASE OF HELEN OF TROY COMMON STOCK (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | ||||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Mar. 14, 2014 | Feb. 28, 2015 | 31-May-14 | 31-May-13 | |
Repurchase of common stock | |||||||
Amount of shares authorized for purchase | $265,430,000 | $265,430,000 | |||||
Stock compensation | |||||||
Repurchase of common stock | |||||||
Common stock repurchased and retired (in shares) | 71,950 | 112,677 | 49,126 | ||||
Common stock repurchased and retired, total cost or aggregate market value | 4,826,000 | 6,937,000 | 1,627,000 | ||||
Average price per share (in dollars per share) | $67.08 | $61.57 | $33.12 | ||||
Dutch auction self tender | |||||||
Repurchase of common stock | |||||||
Common stock repurchased and retired (in shares) | 3,693,816 | ||||||
Common stock repurchased and retired, total cost or aggregate market value | 247,830,000 | ||||||
Open market transactions | |||||||
Repurchase of common stock | |||||||
Common stock repurchased and retired (in shares) | 408,327 | ||||||
Common stock repurchased and retired, total cost or aggregate market value | 25,770,000 | ||||||
Open market or tender offer | |||||||
Repurchase of common stock | |||||||
Common stock repurchased and retired (in shares) | 4,102,143 | 33,862 | 61,426 | ||||
Common stock repurchased and retired, total cost or aggregate market value | 273,599,000 | 1,311,000 | 1,759,000 | ||||
Average price per share (in dollars per share) | $66.70 | $38.71 | $28.64 | ||||
Private transactions | |||||||
Repurchase of common stock | |||||||
Shares of common stock tendered by employees in "net exercise" transactions | 0 | ||||||
Private transactions | Certain employees | |||||||
Repurchase of common stock | |||||||
Common stock repurchased and retired (in shares) | 1,871 | ||||||
Common stock repurchased and retired, total cost or aggregate market value | 140,000 | ||||||
Average price per share (in dollars per share) | $74.64 | ||||||
Private transactions | Performance-based | Restricted stock units and restricted stock awards | Former CEO | |||||||
Repurchase of common stock | |||||||
Common stock repurchased and retired, total cost or aggregate market value | 4,570,000 | ||||||
Average price per share (in dollars per share) | $67.10 | ||||||
Shares of common stock tendered by employees in "net exercise" transactions | 68,086 | ||||||
Private transactions | Performance-based | Restricted stock units and restricted stock awards | Certain employees | |||||||
Repurchase of common stock | |||||||
Common stock repurchased and retired, total cost or aggregate market value | 120,000 | ||||||
Average price per share (in dollars per share) | $59.13 | ||||||
Shares of common stock tendered by employees in "net exercise" transactions | 1,993 | ||||||
Private transactions | Performance-based | Restricted stock (RSA) | |||||||
Repurchase of common stock | |||||||
Common stock repurchased and retired, total cost or aggregate market value | $350,000 | ||||||
Average price per share (in dollars per share) | $35.55 | ||||||
Shares of common stock tendered by employees in "net exercise" transactions | 9,898 |
SHAREBASED_COMPENSATION_PLANS_1
SHARE-BASED COMPENSATION PLANS - Plans and share-based payment expense (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Aug. 24, 2008 | Feb. 28, 2014 | Apr. 30, 2014 | Apr. 30, 2013 | Apr. 22, 2014 | Apr. 22, 2013 | Feb. 29, 2012 | |
item | ||||||||||
Share-based compensation plans | ||||||||||
Number of active share-based compensation plans | 3 | |||||||||
SHARE-BASED PAYMENT EXPENSE | ||||||||||
Less income tax benefits | ($661,000) | ($5,709,000) | ($858,000) | |||||||
Share-based payment expense, net of income tax benefits | 5,557,000 | 26,160,000 | 5,197,000 | |||||||
Earnings per share impact of share-based payment expense: | ||||||||||
Basic (in dollars per share) | $0.19 | $0.82 | $0.16 | |||||||
Diluted (in dollars per share) | $0.19 | $0.81 | $0.16 | |||||||
1998 Plan | ||||||||||
Share-based compensation plans | ||||||||||
Number of shares of common stock covered for issuance under share-based compensation plan | 6,750,000 | |||||||||
Restricted stock disclosure | ||||||||||
Shares originally authorized | 6,750,000 | |||||||||
2008 Stock Incentive Plan | ||||||||||
Share-based compensation plans | ||||||||||
Number of shares of common stock covered for issuance under share-based compensation plan | 3,750,000 | |||||||||
Restricted stock disclosure | ||||||||||
Shares originally authorized | 3,750,000 | |||||||||
Less cumulative stock option grants issued, net of forfeitures | -1,154,860 | |||||||||
Less restricted share awards previously vested and settled | -421,970 | |||||||||
Subtotal | 2,173,170 | |||||||||
Less maximum RSU's issuable upon vesting | -28,937 | |||||||||
Less estimated maximum PSU's issuable upon vesting | -178,101 | |||||||||
Shares available for issuance | 1,966,132 | |||||||||
Number of shares available for future issue under the plan | 1,966,132 | |||||||||
2008 Directors Plan | ||||||||||
Share-based compensation plans | ||||||||||
Number of shares of common stock covered for issuance under share-based compensation plan | 175,000 | |||||||||
Restricted stock disclosure | ||||||||||
Shares originally authorized | 175,000 | |||||||||
Shares available for issuance | 107,109 | |||||||||
Number of shares available for future issue under the plan | 107,109 | |||||||||
2008 Stock Purchase Plan | ||||||||||
Share-based compensation plans | ||||||||||
Number of shares of common stock covered for issuance under share-based compensation plan | 350,000 | |||||||||
Restricted stock disclosure | ||||||||||
Shares originally authorized | 350,000 | |||||||||
Shares available for issuance | 127,085 | |||||||||
Maximum withholding percentage of employee wages or salaries for the purchase of shares of common stock | 15.00% | |||||||||
Purchase price for shares acquired under the plan as a percentage of the share's fair market value | 85.00% | |||||||||
Shares of common stock acquired by plan participants | 31,128 | 41,328 | 39,728 | |||||||
Price of common stock acquired by plan participants (in dollars per share) | $49.49 | $32.66 | $26.68 | $32.66 | ||||||
Number of shares available for future issue under the plan | 127,085 | |||||||||
SG&A | ||||||||||
SHARE-BASED PAYMENT EXPENSE | ||||||||||
Share-based payment expense | 6,218,000 | 31,869,000 | 6,055,000 | |||||||
SG&A | 2008 Stock Purchase Plan | ||||||||||
SHARE-BASED PAYMENT EXPENSE | ||||||||||
Share-based payment expense | 391,000 | 424,000 | 296,000 | |||||||
Stock Option Officers Employees and Consultants [Member] | ||||||||||
Share-based compensation plans | ||||||||||
Options outstanding | 768,000 | 839,000 | 864,000 | 839,000 | 871,000 | |||||
Stock Option Officers Employees and Consultants [Member] | 2008 Stock Incentive Plan | ||||||||||
Share-based compensation plans | ||||||||||
Options outstanding | 751,665 | |||||||||
Stock Option Officers Employees and Consultants [Member] | SG&A | ||||||||||
SHARE-BASED PAYMENT EXPENSE | ||||||||||
Share-based payment expense | 3,279,000 | 2,380,000 | 2,298,000 | |||||||
Stock Option Officers Employees and Consultants [Member] | Minimum | 2008 Stock Incentive Plan | ||||||||||
Share-based compensation plans | ||||||||||
Vesting period | 4 years | |||||||||
Term of award | 7 years | |||||||||
Restricted stock disclosure | ||||||||||
Vesting period | 4 years | |||||||||
Stock Option Officers Employees and Consultants [Member] | Maximum | 2008 Stock Incentive Plan | ||||||||||
Share-based compensation plans | ||||||||||
Vesting period | 5 years | |||||||||
Term of award | 10 years | |||||||||
Restricted stock disclosure | ||||||||||
Vesting period | 5 years | |||||||||
Stock Option Officers Employees and Consultants [Member] | Certain officers and employees | 1998 Plan | ||||||||||
Share-based compensation plans | ||||||||||
Options outstanding | 16,350 | |||||||||
Stock Option Officers Employees and Consultants [Member] | Certain officers and employees | Minimum | 1998 Plan | ||||||||||
Share-based compensation plans | ||||||||||
Vesting period | 4 years | |||||||||
Term of award | 7 years | |||||||||
Restricted stock disclosure | ||||||||||
Vesting period | 4 years | |||||||||
Stock Option Officers Employees and Consultants [Member] | Certain officers and employees | Maximum | 1998 Plan | ||||||||||
Share-based compensation plans | ||||||||||
Vesting period | 5 years | |||||||||
Term of award | 10 years | |||||||||
Restricted stock disclosure | ||||||||||
Vesting period | 5 years | |||||||||
Restricted stock (RSA) | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards vested (in shares) | 159,666 | 62,304 | ||||||||
Vested in period, fair value at award date (in dollars per share) | $35.55 | $67.10 | ||||||||
Restricted stock (RSA) | 2008 Stock Incentive Plan | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards vested (in shares) | 62,000 | 160,000 | ||||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 | ||||||||
Number of awards granted (in shares) | 62,000 | 160,000 | ||||||||
Grant date fair value (in dollars per share) | $67.10 | $35.55 | ||||||||
Restricted stock (RSA) | 2008 Directors Plan | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards granted (in shares) | 9,267 | 10,512 | 10,512 | |||||||
Grant date fair value (in dollars per share) | $61.72 | $41.26 | $31.54 | |||||||
Shares, Issued | 67,891 | |||||||||
Restricted stock (RSA) | Former CEO | 2008 Stock Incentive Plan | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards vested (in shares) | 62,304 | 159,666 | ||||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 | ||||||||
Restricted Stock Units (RSU) | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards vested (in shares) | 100,000 | 100,000 | ||||||||
Vested in period, fair value at award date (in dollars per share) | $32.88 | $32.88 | ||||||||
Number of awards granted (in shares) | 118,000 | 700,000 | ||||||||
Grant date fair value (in dollars per share) | $58.35 | $32.88 | ||||||||
Restricted Stock Units (RSU) | 2008 Stock Incentive Plan | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards granted (in shares) | 28,937 | |||||||||
Grant date fair value (in dollars per share) | $58.36 | |||||||||
Maximum payout | 1,690,000 | |||||||||
Restricted Stock Units (RSU) | Vesting period one | 2008 Stock Incentive Plan | ||||||||||
Restricted stock disclosure | ||||||||||
Awards currently outstanding vesting percentage | 50.00% | |||||||||
Restricted Stock Units (RSU) | Vesting period two | 2008 Stock Incentive Plan | ||||||||||
Restricted stock disclosure | ||||||||||
Awards currently outstanding vesting percentage | 50.00% | |||||||||
Performance Restricted Stock Units (PSU) | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards vested (in shares) | 166,600 | 34,400 | ||||||||
Performance Restricted Stock Units (PSU) | 2008 Stock Incentive Plan | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards vested (in shares) | 66,600 | 100,000 | 33,400 | |||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 | ||||||||
Number of awards granted (in shares) | 178,101 | |||||||||
Grant date fair value (in dollars per share) | $58.34 | $65.31 | ||||||||
Performance period (in years) | 3 years | |||||||||
Maximum payout | 10,390,000 | |||||||||
Performance Restricted Stock Units (PSU) | Former CEO | 2008 Stock Incentive Plan | Separation Agreement | ||||||||||
Restricted stock disclosure | ||||||||||
Number of awards granted (in shares) | 100,000 | 100,000 | ||||||||
Grant date fair value (in dollars per share) | $32.88 | $32.88 | ||||||||
Performance-based and other stock awards | SG&A | ||||||||||
SHARE-BASED PAYMENT EXPENSE | ||||||||||
Share-based payment expense | 1,732,000 | 13,446,000 | 2,988,000 | |||||||
Stock compensation | Directors | SG&A | ||||||||||
SHARE-BASED PAYMENT EXPENSE | ||||||||||
Share-based payment expense | 816,000 | 619,000 | 473,000 | |||||||
Stock compensation | Former CEO | SG&A | Separation Agreement | ||||||||||
SHARE-BASED PAYMENT EXPENSE | ||||||||||
Share-based payment expense | $15,000,000 |
SHAREBASED_COMPENSATION_PLANS_2
SHARE-BASED COMPENSATION PLANS - Fair value of stock option grants (Details) (Stock Option Officers Employees and Consultants [Member]) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Assumptions used for fair value of stock options granted | |||
Range of risk free interest rates used, minimum (as a percent) | 1.20% | 0.60% | 0.10% |
Range of risk free interest rates used, maximum (as a percent) | 1.50% | 1.30% | 0.90% |
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% |
Weighted average volatility rate (as a percent) | 48.00% | 38.80% | 51.40% |
Range of expected volatility rates used, minimum (as a percent) | 35.30% | 34.00% | 45.70% |
Range of expected volatility rates used, maximum (as a percent) | 50.50% | 41.70% | 55.30% |
Minimum | |||
Assumptions used for fair value of stock options granted | |||
Expected terms used | 4 years 1 month 6 days | 4 years 1 month 6 days | 4 years 1 month 6 days |
Maximum | |||
Assumptions used for fair value of stock options granted | |||
Expected terms used | 4 years 4 months 24 days | 4 years 4 months 24 days | 4 years 4 months 24 days |
SHAREBASED_COMPENSATION_PLANS_3
SHARE-BASED COMPENSATION PLANS - Summary of stock option activity (Details) (Stock Option Officers Employees and Consultants [Member], USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 29, 2012 |
Stock Option Officers Employees and Consultants [Member] | ||||
Options | ||||
Outstanding at the beginning of the period (in shares) | 839,000 | 864,000 | 871,000 | |
Grants (in shares) | 257,000 | 264,000 | 309,000 | |
Exercises (in shares) | -187,000 | -239,000 | -248,000 | |
Forfeitures / expirations (in shares) | -141,000 | -50,000 | -68,000 | |
Outstanding at the end of the period (in shares) | 768,000 | 839,000 | 864,000 | 871,000 |
Exercisable at the end of the period (in shares) | 94,000 | |||
Weighted Average Exercise price (per share) | ||||
Outstanding at the beginning of the period (in dollars per share) | $33.03 | $29.89 | $26.26 | |
Grants (in dollars per share) | $63.84 | $36.45 | $34.57 | |
Exercises (in dollars per share) | $29.70 | $25.36 | $22.88 | |
Forfeitures / expirations (in dollars per share) | $40.67 | $33.55 | $30.23 | |
Outstanding at the end of the period (in dollars per share) | $42.76 | $33.03 | $29.89 | $26.26 |
Exercisable at the end of the period (in dollars per share) | $28.32 | |||
Weighted Average Grant Date Fair Value (per share) | ||||
Outstanding at the beginning of the period (in dollars per share) | $12.38 | $11.98 | $10.31 | |
Grants (in dollars per share) | $25.22 | $11.61 | $14.09 | |
Outstanding at the end of the period (in dollars per share) | $16.28 | $12.38 | $11.98 | $10.31 |
Exercisable at the end of the period (in dollars per share) | $11.23 | |||
Weighted Average Remaining Contractual Term | ||||
Weighted Average Remaining Contractual Term (in years) | 6 years 7 months 2 days | 6 years 5 months 23 days | 6 years 3 months 4 days | 5 years 9 months 11 days |
Exercisable at the end of the period | 4 years 8 months 19 days | |||
Intrinsic Value | ||||
Intrinsic value, options outstanding | $26,008 | $27,081 | $6,209 | $5,570 |
Intrinsic value, options exercised | 6,498 | 4,663 | 2,634 | |
Intrinsic value, options exercisable | $4,523 |
SHAREBASED_COMPENSATION_PLANS_4
SHARE-BASED COMPENSATION PLANS - Non-vested stock option activity (Details) (Stock Option Officers Employees and Consultants [Member], USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Stock Option Officers Employees and Consultants [Member] | |||
Non-Vested Options | |||
Outstanding at the beginning of the period (in shares) | 728 | 689 | 617 |
Grants (in shares) | 257 | 264 | 309 |
Vested or forfeited (in shares) | -311 | -225 | -237 |
Outstanding at the end of the period (in shares) | 674 | 728 | 689 |
Weighted Average Grant Date Fair Value (per share) | |||
Outstanding at the beginning of the period (in dollars per share) | $12.74 | $12.62 | $10.99 |
Grants (in dollars per share) | $25.22 | $11.61 | $14.09 |
Vested or forfeited (in dollars per share) | $13.87 | $11.06 | $10.29 |
Outstanding at the end of the period (in dollars per share) | $16.98 | $12.74 | $12.62 |
SHAREBASED_COMPENSATION_PLANS_5
SHARE-BASED COMPENSATION PLANS - RSA, RSU Activity and unrecognized share based compensation expense (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Apr. 30, 2014 | Apr. 30, 2013 | Apr. 22, 2014 | Apr. 22, 2013 | Feb. 28, 2014 |
Shares | |||||||||
Outstanding at the beginning of the period (in shares) | 100,000 | ||||||||
Outstanding at the end of the period (in shares) | 100,000 | 100,000 | 100,000 | ||||||
Stock Option Officers Employees and Consultants [Member] | |||||||||
UNRECOGNIZED SHARE-BASED COMPENSATION EXPENSE | |||||||||
Unrecognized Compensation Expense | $6,405 | ||||||||
Weighted Average Period of Recognition | 35 months | ||||||||
Restricted Stock Units (RSU) | |||||||||
Shares | |||||||||
Outstanding at the beginning of the period (in shares) | 100,000 | 700,000 | |||||||
Granted/Earned (in shares) | 118,000 | 700,000 | |||||||
Forfeited (in shares) | -500,000 | ||||||||
Vested (in shares) | -100,000 | -100,000 | |||||||
Outstanding at the end of the period (in shares) | 118,000 | 100,000 | 700,000 | 100,000 | 100,000 | ||||
Weighted Average Grant Date Fair Value (per share) | |||||||||
Outstanding at the beginning of the period (in dollars per share) | $32.88 | $32.88 | |||||||
Grant date fair value (in dollars per share) | $58.35 | $32.88 | |||||||
Vested in period, fair value at award date (in dollars per share) | $32.88 | $32.88 | |||||||
Forfeited (in dollars per share) | $32.88 | ||||||||
Outstanding at the end of the period (in dollars per share) | $58.35 | $32.88 | $32.88 | $32.88 | 32.88 | ||||
Fair Value Outstanding | |||||||||
Fair value outstanding | 9,041 | 6,531 | 25,956 | 6,531 | 6,531 | ||||
Vested and settled | |||||||||
Vested in period, fair value at award date (in dollars per share) | $32.88 | $32.88 | |||||||
Restricted stock (RSA) | |||||||||
Shares | |||||||||
Vested (in shares) | -159,666 | -62,304 | |||||||
Weighted Average Grant Date Fair Value (per share) | |||||||||
Vested in period, fair value at award date (in dollars per share) | $35.55 | $67.10 | |||||||
Vested and settled | |||||||||
Vested in period, fair value at award date (in dollars per share) | $35.55 | $67.10 | |||||||
Performance Restricted Stock Units (PSU) | |||||||||
Shares | |||||||||
Vested (in shares) | -166,600 | -34,400 | |||||||
Restricted Stock Units and Performance Stock Units [Member] | |||||||||
UNRECOGNIZED SHARE-BASED COMPENSATION EXPENSE | |||||||||
Unrecognized Compensation Expense | 3,585 | ||||||||
Weighted Average Period of Recognition | 22 months 3 days | ||||||||
2008 Stock Incentive Plan | Restricted Stock Units (RSU) | |||||||||
Shares | |||||||||
Granted/Earned (in shares) | 28,937 | ||||||||
Weighted Average Grant Date Fair Value (per share) | |||||||||
Grant date fair value (in dollars per share) | $58.36 | ||||||||
2008 Stock Incentive Plan | Restricted stock (RSA) | |||||||||
Shares | |||||||||
Outstanding at the beginning of the period (in shares) | 62,000 | 160,000 | |||||||
Granted/Earned (in shares) | 62,000 | 160,000 | |||||||
Vested (in shares) | -62,000 | -160,000 | |||||||
Outstanding at the end of the period (in shares) | 62,000 | 160,000 | 62,000 | 62,000 | |||||
Weighted Average Grant Date Fair Value (per share) | |||||||||
Outstanding at the beginning of the period (in dollars per share) | $67.10 | $35.55 | |||||||
Grant date fair value (in dollars per share) | $67.10 | $35.55 | |||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 | |||||||
Outstanding at the end of the period (in dollars per share) | $67.10 | $35.55 | $67.10 | 67.1 | |||||
Fair Value Outstanding | |||||||||
Fair value outstanding | $4,073 | $5,920 | $4,073 | 4,073 | |||||
Vested and settled | |||||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 | |||||||
2008 Stock Incentive Plan | Restricted stock (RSA) | Former CEO | |||||||||
Shares | |||||||||
Vested (in shares) | -62,304 | -159,666 | |||||||
Weighted Average Grant Date Fair Value (per share) | |||||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 | |||||||
Vested and settled | |||||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 | |||||||
2008 Stock Incentive Plan | Performance Restricted Stock Units (PSU) | |||||||||
Shares | |||||||||
Granted/Earned (in shares) | 178,101 | ||||||||
Forfeited (in shares) | -500,000 | ||||||||
Vested (in shares) | -66,600 | -100,000 | -33,400 | ||||||
Weighted Average Grant Date Fair Value (per share) | |||||||||
Grant date fair value (in dollars per share) | $58.34 | $65.31 | |||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 | |||||||
Vested and settled | |||||||||
Vested in period, fair value at award date (in dollars per share) | $67.10 | $35.55 |
DEFINED_CONTRIBUTION_PLANS_Det
DEFINED CONTRIBUTION PLANS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
DEFINED CONTRIBUTION PLANS | |||
Total matching contributions to saving plans | $3.21 | $2.89 | $2.60 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Components of accumulated other comprehensive loss | |||
Balance at the beginning of the period | ($1,091) | ($2,729) | |
Other comprehensive income before reclassification | 462 | -1,073 | |
Amounts reclassified out of accumulated other comprehensive income (loss) | 1,023 | 3,805 | |
Tax effects | -470 | -1,094 | -1,411 |
Other comprehensive income | 1,015 | 1,638 | 2,860 |
Balance at the end of the period | -76 | -1,091 | -2,729 |
Net deferred tax benefits | 68 | 528 | |
Unrealized Holding Gains (Losses) On Cash Flow Hedges | Interest rate swaps | |||
Components of accumulated other comprehensive loss | |||
Balance at the beginning of the period | -797 | -3,135 | |
Other comprehensive income before reclassification | 28 | -111 | |
Amounts reclassified out of accumulated other comprehensive income (loss) | 1,199 | 3,707 | |
Tax effects | -430 | -1,258 | |
Other comprehensive income | 797 | 2,338 | |
Balance at the end of the period | -797 | ||
Net deferred tax benefits | 430 | ||
Unrealized Holding Gains (Losses) On Cash Flow Hedges | Foreign currency contracts | |||
Components of accumulated other comprehensive loss | |||
Balance at the beginning of the period | -294 | 406 | |
Other comprehensive income before reclassification | 434 | -962 | |
Amounts reclassified out of accumulated other comprehensive income (loss) | -176 | 98 | |
Tax effects | -40 | 164 | |
Other comprehensive income | 218 | -700 | |
Balance at the end of the period | -76 | -294 | |
Net deferred tax benefits | $30 | $80 |
SELECTED_QUARTERLY_FINANCIAL_D2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||
Sales revenue, net | $377,730 | $435,674 | $319,949 | $311,778 | $312,520 | $380,730 | $319,387 | $304,516 | $1,445,131 | $1,317,153 | $1,288,263 |
Gross Profit | 164,884 | 181,411 | 133,744 | 119,520 | 125,582 | 147,701 | 123,255 | 120,165 | 599,559 | 516,703 | 518,211 |
Asset Impairment Charges | 9,000 | 12,049 | 9,000 | 12,049 | |||||||
Net Income | $40,550 | $55,377 | $18,839 | $16,398 | $11,014 | $37,524 | $23,318 | $14,392 | $131,164 | $86,248 | $115,666 |
Earnings per share: | |||||||||||
Basic (in dollars per share) | $1.42 | $1.95 | $0.66 | $0.56 | $0.34 | $1.17 | $0.73 | $0.45 | $4.59 | $2.69 | $3.64 |
Diluted (in dollars per share) | $1.40 | $1.92 | $0.65 | $0.55 | $0.34 | $1.16 | $0.72 | $0.45 | $4.52 | $2.66 | $3.62 |
FOURTH_QUARTER_CHARGES_TRANSAC1
FOURTH QUARTER CHARGES / TRANSACTIONS (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Separation Agreement | Former CEO | ||
Fourth quarter charges / transactions | ||
Effect of Fourth Quarter Events Amount, Net of Tax | $16.34 | |
Foreign currency devaluation adjustment | ||
Fourth quarter charges / transactions | ||
Fourth quarter charges or transactions | $1.41 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Segment information | |||||||||||
Sales revenue, net | $377,730,000 | $435,674,000 | $319,949,000 | $311,778,000 | $312,520,000 | $380,730,000 | $319,387,000 | $304,516,000 | $1,445,131,000 | $1,317,153,000 | $1,288,263,000 |
Asset impairment charges | 9,000,000 | 12,049,000 | 9,000,000 | 12,049,000 | |||||||
Operating income | 161,719,000 | 117,100,000 | 148,773,000 | ||||||||
Identifiable assets | 1,653,755,000 | 1,533,302,000 | 1,653,755,000 | 1,533,302,000 | 1,474,004,000 | ||||||
Capital and intangible asset expenditures | 6,521,000 | 40,463,000 | 14,688,000 | ||||||||
Depreciation and amortization | 39,653,000 | 33,839,000 | 34,425,000 | ||||||||
Housewares | |||||||||||
Segment information | |||||||||||
Sales revenue, net | 296,252,000 | 274,478,000 | 259,042,000 | ||||||||
Operating income | 59,392,000 | 50,828,000 | 49,612,000 | ||||||||
Identifiable assets | 397,956,000 | 369,698,000 | 397,956,000 | 369,698,000 | 362,378,000 | ||||||
Capital and intangible asset expenditures | 2,019,000 | 851,000 | 1,269,000 | ||||||||
Depreciation and amortization | 3,615,000 | 3,461,000 | 4,803,000 | ||||||||
Healthcare/Home Environment | |||||||||||
Segment information | |||||||||||
Sales revenue, net | 613,253,000 | 568,075,000 | 538,666,000 | ||||||||
Operating income | 50,821,000 | 20,764,000 | 37,772,000 | ||||||||
Identifiable assets | 683,533,000 | 676,131,000 | 683,533,000 | 676,131,000 | 645,586,000 | ||||||
Capital and intangible asset expenditures | 2,602,000 | 22,934,000 | 7,795,000 | ||||||||
Depreciation and amortization | 20,532,000 | 19,318,000 | 16,614,000 | ||||||||
Nutritional Supplements | |||||||||||
Segment information | |||||||||||
Sales revenue, net | 100,395,000 | ||||||||||
Operating income | 9,512,000 | ||||||||||
Identifiable assets | 218,181,000 | 218,181,000 | |||||||||
Capital and intangible asset expenditures | 613,000 | ||||||||||
Depreciation and amortization | 5,380,000 | ||||||||||
Acquisition-related expenditures | 3,610,000 | ||||||||||
Personal Care | |||||||||||
Segment information | |||||||||||
Sales revenue, net | 435,231,000 | 474,600,000 | 490,555,000 | ||||||||
Asset impairment charges | 9,000,000 | 12,049,000 | |||||||||
Operating income | 41,994,000 | 45,508,000 | 61,389,000 | ||||||||
Identifiable assets | 354,085,000 | 487,473,000 | 354,085,000 | 487,473,000 | 466,040,000 | ||||||
Capital and intangible asset expenditures | 1,287,000 | 16,678,000 | 5,624,000 | ||||||||
Depreciation and amortization | $10,126,000 | $11,060,000 | $13,008,000 |
SEGMENT_INFORMATION_Geographic
SEGMENT INFORMATION- Geographical information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
GEOGRAPHIC INFORMATION | |||||||||||
Sales revenue, net | $377,730 | $435,674 | $319,949 | $311,778 | $312,520 | $380,730 | $319,387 | $304,516 | $1,445,131 | $1,317,153 | $1,288,263 |
Long-lived assets | 1,088,995 | 917,826 | 1,088,995 | 917,826 | 928,799 | ||||||
United States | |||||||||||
GEOGRAPHIC INFORMATION | |||||||||||
Sales revenue, net | 1,139,959 | 1,019,525 | 1,014,354 | ||||||||
Long-lived assets | 636,089 | 444,788 | 636,089 | 444,788 | 515,411 | ||||||
International | |||||||||||
GEOGRAPHIC INFORMATION | |||||||||||
Sales revenue, net | 305,172 | 297,628 | 273,909 | ||||||||
Long-lived assets | 452,906 | 473,038 | 452,906 | 473,038 | 413,388 | ||||||
Barbados | |||||||||||
GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets | 319,298 | 324,399 | 319,298 | 324,399 | 398,340 | ||||||
Other international | |||||||||||
GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets | $133,608 | $148,639 | $133,608 | $148,639 | $15,048 |
SEGMENT_INFORMATION_Percentage
SEGMENT INFORMATION- Percentage of sales (Details) | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Foreign Currency Risk and Currency Exchange Uncertainties | |||
Percentage of net sales revenue in foreign currencies | 0.70% | 0.60% | 0.60% |
Net sales revenue | Customer concentration risk | Largest customer | |||
Foreign Currency Risk and Currency Exchange Uncertainties | |||
Percentage of net sales revenue in foreign currencies | 18.00% | 19.00% | 19.00% |
Net sales revenue | Customer concentration risk | Largest customer | United States | |||
Foreign Currency Risk and Currency Exchange Uncertainties | |||
Percentage of sales from largest customer that were within the U.S. | 84.00% | 92.00% | 91.00% |
Net sales revenue | Customer concentration risk | Second largest customer | United States | |||
Foreign Currency Risk and Currency Exchange Uncertainties | |||
Percentage of net sales revenue in foreign currencies | 9.00% | 11.00% | 11.00% |
Subsequent_Event_Details
Subsequent Event (Details) (Subsequent event, Vicks VapoSteam U.S., USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
item | |
Subsequent event | Vicks VapoSteam U.S. | |
Subsequent Event | |
Number of transactions | 2 |
Purchase price | $42.75 |
Annual revenues | $10 |
Recovered_Sheet1
SCHEDULE II - Valuation and qualifying accounts (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 |
Allowances for doubtful accounts | |||
Valuation and Qualifying Accounts | |||
Beginning Balance | $2,127 | $1,764 | $1,811 |
Charged to cost and expenses | 299 | 400 | 188 |
Deductions | 577 | 37 | 235 |
Ending Balance | 1,849 | 2,127 | 1,764 |
Allowances for back-to-stock returns | |||
Valuation and Qualifying Accounts | |||
Beginning Balance | 2,552 | 3,267 | 3,730 |
Net charge (credit) to sales revenue | 1,481 | -715 | -463 |
Ending Balance | 4,033 | 2,552 | 3,267 |
Allowances for back-to-stock returns | Healthy Directions | |||
Valuation and Qualifying Accounts | |||
Charged to cost and expenses | $1,400 |