Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2018 | Apr. 21, 2018 | Aug. 31, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | HELEN OF TROY LTD | ||
Entity Central Index Key | 916,789 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,451,672,081 | ||
Entity Common Stock, Shares Outstanding | 26,617,888 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Assets, current: | ||
Cash and cash equivalents | $ 20,738 | $ 23,848 |
Receivables - principally trade, less allowances of $5,309 and $5,560 | 273,168 | 229,416 |
Inventory | 251,511 | 280,877 |
Prepaid expenses and other current assets | 9,545 | 9,668 |
Income taxes receivable | 349 | 2,242 |
Current assets related to discontinued operations | 10,027 | |
Total assets, current | 555,311 | 556,078 |
Property and equipment, net of accumulated depreciation of $115,202 and $102,153 | 123,503 | 126,502 |
Goodwill | 602,320 | 602,320 |
Other intangible assets, net of accumulated amortization of $167,354 and $148,673 | 302,915 | 336,004 |
Deferred tax assets, net | 16,654 | 1,955 |
Other assets, net of accumulated amortization of $2,022 and $1,930 | 20,617 | 1,110 |
Non-current assets related to discontinued operations | 189,127 | |
Total assets | 1,621,320 | 1,813,096 |
Liabilities, current: | ||
Accounts payable, principally trade | 129,341 | 105,652 |
Accrued expenses and other current liabilities | 165,864 | 148,098 |
Long-term debt, current maturities | 1,884 | 24,404 |
Current liabilities related to discontinued operations | 11,213 | |
Total liabilities, current | 297,089 | 289,367 |
Long-term debt, excluding current maturities | 287,985 | 461,211 |
Deferred tax liabilities, net | 7,096 | 20,091 |
Other liabilities, noncurrent | 14,691 | 17,342 |
Non-current liabilities related to discontinued operations | 4,319 | |
Total liabilities | 606,861 | 792,330 |
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; 26,573,744 and 27,028,665 shares issued and outstanding | 2,658 | 2,703 |
Additional paid in capital | 230,676 | 218,760 |
Accumulated other comprehensive income | 631 | 1,173 |
Retained earnings | 780,494 | 798,130 |
Total stockholders' equity | 1,014,459 | 1,020,766 |
Total liabilities and stockholders' equity | $ 1,621,320 | $ 1,813,096 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Consolidated Balance Sheets | ||
Receivables - principally trade, allowances (in dollars) | $ 5,309 | $ 5,560 |
Property and equipment, accumulated depreciation (in dollars) | 115,202 | 102,153 |
Other intangible assets, accumulated amortization (in dollars) | 167,354 | 148,673 |
Other assets, accumulated amortization (in dollars) | $ 2,022 | $ 1,930 |
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 | 26,575,634 | 27,028,665 |
Common stock, shares outstanding | 26,575,634 | 27,028,665 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Consolidated Statements of Income | |||
Sales revenue, net | $ 1,489,747 | $ 1,406,676 | $ 1,392,575 |
Cost of goods sold | 867,646 | 824,119 | 866,841 |
Gross profit | 622,101 | 582,557 | 525,734 |
Selling, general and administrative expense ("SG&A") | 435,735 | 409,993 | 403,440 |
Asset impairment charges | 15,447 | 2,900 | 6,000 |
Restructuring charges | 1,857 | ||
Operating income | 169,062 | 169,664 | 116,294 |
Nonoperating income, net | 327 | 414 | 299 |
Interest expense | (13,951) | (14,361) | (10,581) |
Income before income taxes | 155,438 | 155,717 | 106,012 |
Income tax expense | 26,556 | 11,407 | 13,021 |
Income from continuing operations | 128,882 | 144,310 | 92,991 |
Income (loss) from discontinued operations, net of tax | (84,436) | (3,621) | 8,237 |
Net income | $ 44,446 | $ 140,689 | $ 101,228 |
Earnings (loss) per share - basic | |||
Continuing operations | $ 4.76 | $ 5.24 | $ 3.29 |
Discontinued operations | (3.12) | (0.13) | 0.29 |
Total earnings per share - basic | 1.64 | 5.11 | 3.58 |
Earnings (loss) per share - diluted | |||
Continuing operations | 4.73 | 5.17 | 3.23 |
Discontinued operations | (3.10) | (0.13) | 0.29 |
Total earnings per share - diluted | $ 1.63 | $ 5.04 | $ 3.52 |
Weighted average shares of common stock used in computing net earnings per share: | |||
Basic (in shares) | 27,077 | 27,522 | 28,273 |
Diluted (in shares) | 27,254 | 27,891 | 28,749 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Income from continuing operations before tax | $ 155,438 | $ 155,717 | $ 106,012 |
Income from continuing operations net of tax | 128,882 | 144,310 | 92,991 |
Income (loss) from discontinued operations before tax | (133,811) | (5,828) | 13,806 |
Income (loss) from discontinued operations tax | 49,375 | 2,207 | (5,569) |
Income (loss) from discontinued operations | (84,436) | (3,621) | 8,237 |
Cash flow hedge activity, before tax | |||
Total OCI, before tax | (125) | 751 | 775 |
Comprehensive income, before tax | 21,502 | 150,640 | 120,593 |
Cash flow hedge activity, tax | |||
Income tax (expense) benefit | (26,556) | (11,407) | (13,021) |
Total OCI, tax | (417) | (243) | (34) |
Comprehensive income, Tax | 22,402 | (9,443) | (18,624) |
Cash flow hedge activity, net of tax | |||
Total OCI | (542) | 508 | 741 |
Comprehensive income, net of tax | 43,904 | 141,197 | 101,969 |
Interest rate swaps | |||
Cash flow hedge activity, before tax | |||
Changes in fair market value | 2,481 | ||
Subtotal | 2,481 | ||
Cash flow hedge activity, tax | |||
Changes in fair market value | (776) | ||
Subtotal | (776) | ||
Total OCI, tax | (776) | ||
Cash flow hedge activity, net of tax | |||
Changes in fair market value | 1,705 | ||
Subtotal | 1,705 | ||
Total OCI | 1,705 | ||
Foreign currency contracts | |||
Cash flow hedge activity, before tax | |||
Changes in fair market value | 1,758 | 2,205 | 1,978 |
Settlements reclassified to income | (4,364) | (1,454) | (1,203) |
Subtotal | (2,606) | 751 | 775 |
Cash flow hedge activity, tax | |||
Changes in fair market value | (455) | (380) | (314) |
Settlements reclassified to income | 814 | 137 | 280 |
Subtotal | 359 | (243) | (34) |
Total OCI, tax | 359 | (243) | |
Cash flow hedge activity, net of tax | |||
Changes in fair market value | 1,303 | 1,825 | 1,664 |
Settlements reclassified to income | (3,550) | (1,317) | (923) |
Subtotal | (2,247) | 508 | $ 741 |
Total OCI | $ (2,247) | $ 508 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss)Interest rate swaps | Accumulated other comprehensive income (loss)Foreign currency contracts | Accumulated other comprehensive income (loss) | Retained earnings | Interest rate swaps | Foreign currency contracts | Total |
Balance at Feb. 28, 2015 | $ 2,849 | $ 179,934 | $ (76) | $ 721,858 | |||||
Balance (in shares) at Feb. 28, 2015 | 28,488,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stock option share-based compensation | 3,513 | ||||||||
Exercise of stock options, including tax benefits of $0, $0 and $1,581 | $ 18 | 8,304 | |||||||
Exercise of stock options (in shares) | 178,000 | ||||||||
Restricted share-based compensation, including tax benefits of $0, $0 and $1,894 | $ 28 | 21,836 | |||||||
Restricted share-based compensation (in shares) | 285,000 | ||||||||
Issuance of common stock in connection with employee stock purchase plan | $ 3 | 1,924 | |||||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 28,000 | ||||||||
Cash flow hedge activity, net of tax | $ 741 | $ 741 | |||||||
Common stock repurchased and retired | $ (124) | (17,434) | (94,559) | $ (6,411) | |||||
Common stock repurchased and retired (in shares) | (1,244,000) | (117,294) | |||||||
Net Income | 101,228 | ||||||||
Balance at Feb. 29, 2016 | $ 2,774 | 198,077 | 665 | 728,527 | $ 930,043 | ||||
Balance (in shares) at Feb. 29, 2016 | 27,735,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Cumulative effect of accounting change | 588 | ||||||||
Stock option share-based compensation | 3,194 | ||||||||
Exercise of stock options, including tax benefits of $0, $0 and $1,581 | $ 17 | 7,288 | |||||||
Exercise of stock options (in shares) | 170,000 | ||||||||
Restricted share-based compensation, including tax benefits of $0, $0 and $1,894 | $ 2 | 12,304 | |||||||
Restricted share-based compensation (in shares) | 21,000 | ||||||||
Issuance of common stock in connection with employee stock purchase plan | $ 3 | 2,487 | |||||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 32,000 | ||||||||
Cash flow hedge activity, net of tax | 508 | 508 | |||||||
Common stock repurchased and retired | $ (93) | (5,178) | (70,230) | $ (595) | |||||
Common stock repurchased and retired (in shares) | (929,000) | (6,286) | |||||||
Net Income | 140,689 | ||||||||
Balance at Feb. 28, 2017 | $ 2,703 | 218,760 | 1,173 | 798,130 | $ 1,020,766 | ||||
Balance (in shares) at Feb. 28, 2017 | 27,029,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Cumulative effect of accounting change | (856) | ||||||||
Stock option share-based compensation | 2,658 | ||||||||
Exercise of stock options, including tax benefits of $0, $0 and $1,581 | $ 12 | 6,546 | |||||||
Exercise of stock options (in shares) | 126,000 | ||||||||
Restricted share-based compensation, including tax benefits of $0, $0 and $1,894 | $ 5 | 4,978 | |||||||
Restricted share-based compensation (in shares) | 48,000 | ||||||||
Issuance of common stock in connection with employee stock purchase plan | $ 2 | 1,525 | |||||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 16,000 | ||||||||
Vesting of performance awards | $ 15 | ||||||||
Vesting of performance awards (in shares) | 150,000 | ||||||||
Cash flow hedge activity, net of tax | $ 1,705 | $ (2,247) | $ 1,705 | $ (2,247) | |||||
Common stock repurchased and retired | $ (79) | (3,791) | (62,082) | $ (7,258) | |||||
Common stock repurchased and retired (in shares) | (793,000) | (75,785) | |||||||
Net Income | 44,446 | ||||||||
Balance at Feb. 28, 2018 | $ 2,658 | $ 230,676 | $ 631 | $ 780,494 | $ 1,014,459 | ||||
Balance (in shares) at Feb. 28, 2018 | 26,576,000 |
Consolidated Statements of Sto7
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Consolidated Statements of Stockholders' Equity | |||
Exercise of stock options, tax benefits | $ 0 | $ 0 | $ 1,581 |
Restricted share-based compensation, tax benefits | $ 0 | $ 0 | $ 1,894 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018USD ($) | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) | |
Cash provide (used) by operating activities: | |||
Net income | $ 44,446 | $ 140,689 | $ 101,228 |
Income (loss) from discontinued operations | (84,436) | (3,621) | 8,237 |
Income from continuing operations | 128,882 | 144,310 | 92,991 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | |||
Depreciation and amortization | 33,730 | 36,175 | 34,889 |
Amortization of financing costs | 887 | 706 | 651 |
Provision for doubtful receivables | 1,066 | 2,277 | 223 |
Non-cash share-based compensation | 15,054 | 13,861 | 7,164 |
Non-cash intangible asset impairment charges | 15,447 | 2,900 | 6,000 |
Non-cash Venezuelan re-measurement related charges | 17,441 | ||
Gain on the sale or disposal of property and equipment | 331 | 197 | 84 |
Deferred income taxes and tax credits | 21,264 | (7,499) | (2,384) |
Changes in operating capital, net of effects of acquisition of businessess: | |||
Receivables | (44,818) | (6,592) | (3,437) |
Inventories | 29,366 | 17,161 | (14,896) |
Prepaid expenses and other current assets | (383) | (1,908) | (2,224) |
Other assets and liabilities, net | (16,728) | (814) | 9,957 |
Accounts payable | 23,689 | 6,299 | 3,949 |
Accrued expenses and other current liabilities | 12,190 | 8,894 | 18,673 |
Accrued income taxes | (1,368) | (3,476) | 1,180 |
Net cash provided by operating activities - continuing operations | 218,609 | 212,491 | 170,263 |
Net cash provided by operating activities - discontinued operations | 5,598 | 16,010 | 16,282 |
Net cash provided by operating activities | 224,207 | 228,501 | 186,545 |
Cash provided (used) by investing activities: | |||
Capital and intangible asset expenditures | (13,605) | (15,507) | (16,676) |
Proceeds from the sale of property and equipment | 13 | 32 | 7 |
Payments to acquire businesses, net of cash acquired | (209,267) | (43,150) | |
Net cash used by investing activities - continuing operations | (13,592) | (224,742) | (59,819) |
Net cash provided (used) by investing activities - discontinued operations | 49,226 | (5,112) | (3,927) |
Net cash provided (used) by investing activities | 35,634 | (229,854) | (63,746) |
Cash provided (used) by financing activities: | |||
Proceeds from line of credit | 521,200 | 470,900 | 802,600 |
Repayment of line of credit | (692,500) | (580,300) | (590,000) |
Repayment of long-term debt | (25,700) | (23,800) | (21,900) |
Payment of financing costs | (2,299) | (19) | |
Proceeds from share issuances under share-based compensation plans | 7,658 | 9,734 | 12,025 |
Payment of tax obligations resulting from cashless share award settlements | (7,053) | (595) | |
Payment of tax obligations resulting from cashless share settlement of severance obligation | (12,000) | ||
Payments for repurchases of common stock | (65,795) | (75,000) | (100,000) |
Net provided (used) by financing activities - continuing operations | (262,190) | (201,360) | 90,706 |
Net cash provided (used) in financing activities | (262,190) | (201,360) | 90,706 |
Net decrease in cash and cash equivalents | (2,349) | (202,713) | 213,505 |
Cash and cash equivalents, beginning balance | 23,087 | 225,800 | 12,295 |
Cash and cash equivalents, ending balance | 20,738 | 23,087 | 225,800 |
Less: Cash and cash equivalents of discontinued operations, ending balance | (761) | (1,664) | |
Cash and cash equivalents of continuing operations, ending balance | 20,738 | 23,848 | 227,464 |
Supplemental cash flow information: | |||
Interest paid | 13,543 | 9,978 | 13,990 |
Income taxes paid, net of refunds | 6,081 | 15,950 | 16,591 |
Value of common stock received as exercise price of options | $ 141 | $ 118 | $ 257 |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Related Information | 12 Months Ended |
Feb. 28, 2018 | |
Summary of Significant Accounting Policies and Related Information | |
Summary of Significant Accounting Policies and Related Information | Note 1 – 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 our common shares, par value $0.10 per share, as “common stock.” References to “the FASB” refer to the Financial Accounting Standards Board. References to “GAAP” refer to U.S. generally accepted accounting principles. References to “ASU” refer to the codification of GAAP in the Accounting Standards Updates issued by the FASB. References to “ASC” refer to the codification of GAAP in the Accounting Standards Codification issued by the FASB. We incorporated as Helen of Troy Corporation in Texas in 1968 and were reorganized as Helen of Troy Limited in Bermuda in 1994. We are a global designer, developer, importer, marketer, and distributor of an expanding portfolio of brand-name consumer products. As of February 28, 2018, we operated three segments: Housewares, Health & Home, and Beauty. Our Housewares segment provides a broad range of innovative consumer products for the home. Product offerings include food preparation tools and storage containers; cleaning, bath and garden tools and accessories; infant and toddler care products; and insulated beverage and food containers. The Health & Home 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 Beauty segment products include electric hair care, beauty care and wellness appliances; grooming tools and accessories; and liquid-, solid- and powder-based personal care and grooming products. On December 20, 2017, we completed the divestiture of the Nutritional Supplements segment through the sale of Healthy Directions LLC and its subsidiaries to Direct Digital, LLC. The results of the Nutritional Supplements operations have been reported as discontinued operations for all periods presented in the consolidated financial statements. For more information see Note 4 to the accompanying consolidated financial statements. All other footnotes present results from continuing operations. 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 30 th . We purchase our products from unaffiliated manufacturers, most of which are located in China, Mexico and the United States. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results may differ materially from those estimates. Our consolidated financial statements are prepared in United States (“U.S.”) Dollars. All intercompany accounts and transactions are eliminated in consolidation. We have reclassified, combined or separately disclosed certain amounts in the prior years’ consolidated financial statements and accompanying footnotes, including reclassifications for discontinued operations, to conform to the current year’s presentation. Our significant accounting policies include: 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. We consider money market accounts to be cash equivalents. 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 sales returns. Our allowance for doubtful receivables reflects our best estimate of probable losses, determined principally based on historical experience and specific allowances for known at-risk accounts. Our policy is to write off receivables when we have determined they will no longer be collectible. Write-offs are applied as a reduction to the allowance for doubtful accounts and any recoveries of previous write-offs are netted against bad debt expense in the period recovered. Our allowance for sales returns reflects our best estimate of future customer returns, determined principally based on historical experience and specific allowances for known pending returns. We have a significant concentration of credit risk with two major customers at February 28, 2018 representing approximately 19% and 11% of gross trade receivables, respectively. In addition, as of February 28, 2018 and 2017, approximately 48% and 44%, respectively, of our gross trade receivables in each year were due from our five top customers. Foreign currency transactions and related derivative financial instruments The U.S. Dollar is the functional currency for the Company and all of its subsidiaries; therefore, we do not have a translation adjustment recorded through accumulated other comprehensive income. 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. 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 comprehensive income, depending on the type of hedging instrument and the effectiveness of the hedges. We evaluate all hedging transactions each quarter to determine that they remain effective. Any material ineffectiveness is recorded as part of SG&A in our consolidated statements of income. Inventory and cost of goods sold Our inventory consists almost entirely of finished goods. We currently record inventory on our consolidated balance sheets 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 our sourcing activities and expenses incurred for production monitoring, product design, engineering, and packaging. We charged $43.2, $41.7, and $39.2 million of such general and administrative expenses to inventory during fiscal 2018, 2017 and 2016, respectively. We estimate that $11.8 and $12.8 million of general and administrative expenses directly attributable to the procurement of inventory were included in our inventory balances on hand at February 28, 2018 and 2017, respectively. The “Cost of goods sold” line item in 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 2018, 2017 and 2016, finished goods purchased from vendors in the Far East comprised approximately 74%, 71% and 70%, respectively, of finished goods purchased. During fiscal 2018, we had one vendor who fulfilled approximately 11% of our product requirements. Our top two manufacturers combined fulfilled approximately 19% of our product requirements. Over the same period, our top five suppliers fulfilled approximately 34% of our product requirements. Property and equipment These assets are stated at cost. 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 A significant portion of our 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 represent 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. We capitalize costs incurred to renew or extend the term of a license agreement and amortize 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 in SG&A. Net sales revenue subject to trademark license agreements requiring royalty payments comprised approximately 45%, 44% and 45% of consolidated net sales revenue for fiscal 2018, 2017 and 2016, respectively. During fiscal 2018, two license agreements accounted for net sales revenue subject to royalty payments of approximately 14% and 13% of consolidated net sales, respectively. No other license agreements had associated net sales revenue subject to royalty payments that accounted for 10% 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 fair value of the acquired 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 acquisition, 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 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. 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. Goodwill, intangible and other long-lived assets and related impairment testing 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 complete our analysis of the carrying value of our goodwill and other intangible assets annually, or more frequently, whenever events or changes in circumstances indicate their carrying value may not be recoverable. 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. Our annual impairment testing for goodwill and indefinite-lived assets had historically occurred in the first quarter of our fiscal year. In December 2016, we elected to change our annual impairment testing to the fourth quarter of our fiscal year. 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. 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. For certain intangible assets subject to amortization, we use the straight-line method over appropriate periods ranging from 4 to 30 years. Warranties We allow for 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 the liability. The following table summarizes the activity in our accrual for the past two fiscal years: ACCRUAL FOR WARRANTY RETURNS Fiscal Years Ended (in thousands) 2018 2017 Beginning balance $ 20,517 $ 19,418 Additions to the accrual 48,414 46,980 Reductions of the accrual - payments and credits issued (46,486) (45,881) Ending balance $ 22,445 $ 20,517 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 16 to these consolidated financial statements for our assessment of the fair value of our long-term debt. Income taxes and uncertain tax positions The provision for income tax expense is calculated on reported income before income taxes based on current tax law and includes, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Tax laws may require items to be included in the determination of taxable income at different times from when the items are reflected in the financial statements. Deferred tax balances reflect the effects of temporary differences between the financial statement carrying amounts of assets and liabilities and their tax bases, as well as from net operating losses and tax credit carryforwards, and are stated at enacted tax rates in effect for the year taxes are expected to be paid or recovered. Deferred tax assets represent tax benefits for tax deductions or credits available in future years and require certain estimates and assumptions to determine whether it is more likely than not that all or a portion of the benefit will not be realized. The recoverability of these future tax deductions and credits is determined by assessing the adequacy of future expected taxable income from all sources, including the future reversal of existing taxable temporary differences, taxable income in carryback years, estimated future taxable income and available tax planning strategies. Should a change in facts or circumstances lead to a change in judgment about the ultimate recoverability of a deferred tax asset, we record or adjust the related valuation allowance in the period that the change in facts and circumstances occurs, along with a corresponding increase or decrease in income tax expense. We record tax benefits for uncertain tax positions based upon management’s evaluation of the information available at the reporting date. To be recognized in the financial statements, the tax position must meet the more-likely-than-not threshold that the position will be sustained upon examination by the tax authority based on technical merits assuming the tax authority has full knowledge of all relevant information. For positions meeting this recognition threshold, the benefit is measured as the largest amount of benefit that meets the more-likely-than-not threshold to be sustained. We periodically evaluate these tax positions based on the latest available information. For tax positions that do not meet the threshold requirement, we record liabilities for unrecognized tax benefits as a tax expense or benefit in the period recognized or reversed and disclose as a separate liability in our financial statements, including related accrued interest and penalties. 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 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 We offer our customers certain incentives in the form of volume rebates, product markdown allowances, trade discounts, cash discounts, slotting fees, and other similar arrangements. These programs are generally recorded as reductions of net sales revenue. 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 $19.9, $18.4 and $19.4 million for fiscal 2018, 2017 and 2016, respectively. Advertising Advertising costs include cooperative advertising discussed above, traditional and digital media advertising and production expenses, and expenses associated with other promotional product messaging and consumer awareness programs. Advertising costs 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 $61.4, $57.7 and $54.2 million during fiscal 2018, 2017 and 2016, respectively. Research and development expense Expenditures for research activities relating to product design, development and improvement are charged to expense as incurred and included in our consolidated statements of income in SG&A. We incurred total research and development expenses of $13.5, $11.8 and $11.6 million during fiscal 2018, 2017 and 2016, respectively. Shipping and handling revenue and expense Shipping and handling revenue and expense are included in our consolidated statements of income in SG&A. This includes distribution center costs, third-party logistics costs and outbound transportation costs we incur. Our net expense for shipping and handling was $78.1, $79.4 and $82.4 million during fiscal 2018, 2017 and 2016, respectively. 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. All share-based compensation expense is recorded net of forfeitures in our consolidated statements of income. 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. See Note 10 to these consolidated financial statements for more information on our share-based compensation plans. |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Feb. 28, 2018 | |
New Accounting Pronouncements. | |
New Accounting Pronouncements | Note 2 – New Accounting Pronouncements Not Yet Adopted In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220) . The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this ASU also require certain disclosures about stranded tax effects. The ASU will be effective for us on March 1, 2019. Early adoption in any period is permitted. We are currently evaluating the impact this guidance may have on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging –Targeted Improvements to Accounting for Hedging Activities (Topic 815) , which amends and simplifies hedge accounting with the intent of better aligning financial reporting for hedging relationships with an entity's risk management activities. The ASU is effective for us on March 1, 2019. We are currently evaluating the impact this guidance may have on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (Topic 718). This update amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards. ASU 2017-09 is effective for us on March 1, 2018. We have concluded that the adoption of this guidance will not have a material impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra–Entity Asset Transfers of Assets Other Than Inventory (Topic 740). ASU 2016-16 amends accounting guidance for intra-entity transfers of assets other than inventory to require the recognition of taxes when the transfer occurs. The amendment will be effective for us on March 1 2018. A modified retrospective approach will be required for transition to the new guidance, with a cumulative-effect adjustment consisting of the net impact from (1) the write-off of any unamortized expense previously deferred and (2) recognition of any previously unrecognized deferred tax assets, net of any valuation allowance. The new guidance does not include any specific new disclosure requirements. We have concluded that the adoption of this guidance will not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and updated in February 2018. ASU 2016-02 will require lessees to recognize on their balance sheets “right-of-use assets” and corresponding lease liabilities, measured on a discounted basis over the lease term. Virtually all leases will be subject to this treatment except leases that meet the definition of a “short-term lease.” For expense recognition, the dual model requiring leases to be classified as either operating or finance leases has been retained from the prior standard. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. Classification will use criteria very similar to those applied in current lease accounting, but without explicit bright lines. The new lease guidance will essentially eliminate off-balance sheet financing. The guidance is effective for us on March 1, 2019. The new standard must be adopted using a modified retrospective transition and requires the new guidance to be applied at the beginning of the earliest comparative period presented. We are currently evaluating the impact this guidance may have on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . Topic 606 provides a framework for revenue recognition that replaces most existing GAAP revenue recognition guidance. 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. The guidance is effective for us on March 1, 2018, and we elected to adopt the standard using the retrospective method. Our revenue is primarily generated from the sale of non-customized consumer products to customers. Each product represents a performance obligation that is satisfied at a single point in time control transfers, which is generally when we ship the product. The timing and amount of revenue recognized will not be impacted by the new standard. We have thus concluded that the standard will not have a material impact on our consolidated financial statements. The provisions of the new standard will, however, impact the classification of certain consideration paid to our customers. We therefore expect to reclassify an immaterial amount of such payments from SG&A to a reduction of net sales revenue. The impact would reduce net sales by approximately 1%. The standard also requires new quantitative and qualitative disclosures about revenue and costs to obtain or fulfill a contract. There have been no other accounting pronouncements issued but not yet adopted which are expected to have a material impact on our consolidated financial statements. Adopted In January 2017, the FASB, issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance provides for a single-step quantitative test to identify and measure impairment, requiring an entity to recognize an impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. We adopted the guidance on March 1, 2017, applying it on a prospective basis. The application of this guidance has not had a material impact on our financial statements. |
Significant Accounting Matters
Significant Accounting Matters | 12 Months Ended |
Feb. 28, 2018 | |
Significant Accounting Matters | |
Significant Accounting Matters | Note 3 – Significant Accounting Matters Fiscal 2018 - On December 20, 2017, we completed the divestiture of the Nutritional Supplements segment through the sale of Healthy Directions LLC and its subsidiaries to Direct Digital, LLC. We have presented the Nutritional Supplements segment in the accompanying consolidated financial statements as a discontinued operation. For more information see Note 4 to these consolidated financial statements. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. Among other changes, the Tax Act lowered the U.S. corporate income tax rate from 35% to 21% and established a modified territorial system requiring mandatory deemed repatriation tax on undistributed earnings of certain foreign subsidiaries. The rate change is effective at the beginning of calendar year 2018 and, as a result, we have a blended U.S. federal statutory tax rate of 32.7% for fiscal 2018. As a result of the enactment, we have recorded a provisional tax expense of $17.9 million related to the one-time remeasurement of our U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, the one-time repatriation tax applied to our undistributed foreign earnings, and the impact of executive compensation that is no longer deductible under the Tax Act. On an ongoing basis, we expect that the Tax Act will result in a reduction to our annual effective tax rate of approximately one percentage point, primarily due to the reduction in the U.S. corporate income tax rate. For more information see Note 21 to these consolidated financial statements. Fiscal 2017 – There were no significant accounting matters for fiscal 2017. Fiscal 2016 - During fiscal 2016, as a result of a devaluation of the Venezuelan official rate, continued economic instability from declines in oil prices and the declaration of an economic emergency, among other factors, we discontinued the use of the official exchange rate and adopted a market-based exchange rate for the remeasurement of our Venezuelan financial statements. As a result, we recorded a charge of $9.57 million (before and after tax) from the re-measurement of our Venezuelan monetary assets and liabilities at February 29, 2016 at the new rate. In addition to re-measuring our monetary holdings in Venezuela, we recorded $9.16 million of non-cash impairment charges (before and after tax) with respect to inventory and property and equipment in order to reflect their respective estimated net realizable and fair values as of February 29, 2016. The following table summarizes the financial impact of these adjustments: IMPACT OF VENEZUELAN RE-MEASURMENT RELATED CHARGES Balance at February 29, 2016 (in thousands) Before Adjustment Adjustments After Location of Income Statement Impact Cash and cash equivalents $ 1,302 $ (1,292) $ 10 SG&A Other net assets, principally working capital other than inventory 8,120 (8,284) (164) SG&A Inventory 9,378 (9,078) 300 Cost of goods sold Property and equipment, net 82 (79) 3 SG&A Net investment in Venezuelan operations $ 18,882 $ (18,733) $ 149 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Feb. 28, 2018 | |
Discontinued Operations | |
Discontinued Operations | Note 4 – Discontinued Operations On December 20, 2017, we completed the divestiture of the Nutritional Supplements segment through the sale of Healthy Directions LLC and its subsidiaries to Direct Digital, LLC. The Nutritional Supplements segment sold premium branded doctor formulated nutritional supplements, skincare and pain relief products through highly targeted catalog and other printed collateral mailings, online and direct response print, radio and television media. The purchase price from the sale is comprised of $46.0 million in cash, paid at closing, and a supplemental payment with a target value of $25.0 million, payable on or before August 1, 2019. The final amount of the supplemental payment may be adjusted up or down based on the performance of Healthy Directions through February 28, 2018. In conjunction with the sale of the business, we have agreed to provide certain transition services for up to an eighteen-month period following the closing of the transaction. The balance sheets associated with discontinued operations are presented below: February 28, February 28, (in thousands) 2018 2017 Assets Receivables $ - $ Inventory - Prepaid expenses and other current assets - Property and equipment, net - Goodwill - Other intangible assets, net - Other assets, net - Assets of discontinued operations $ - $ Liabilities Accounts payable, principally trade - 6,111 Accrued expenses and other current liabilities (1) - 5,862 Other liabilities, noncurrent - 4,319 Liabilities of discontinued operations $ - $ The results of operations associated with discontinued operations are presented in the following table: Fiscal Years Ended the Last Day of February, (in thousands) 2018 (2) 2017 2016 Sales revenue, net $ 99,013 $ 130,543 $ 153,126 Cost of goods sold 28,744 37,632 42,855 Gross profit 70,269 92,911 110,271 Selling, general and administrative expense ("SG&A") 72,419 88,742 95,950 Asset impairment charges (3) 132,297 9,500 - Restructuring charges 621 - - Operating income (loss) (135,068) (5,331) 14,321 Gain on sale before income tax 1,624 - - Interest expense (367) (497) (515) Income (loss) before income tax (133,811) (5,828) 13,806 Income tax benefit (expense) 49,375 2,207 (5,569) Income (loss) from discontinued operations $ (84,436) $ (3,621) $ 8,237 (1) Includes cash overdrafts. (2) Includes approximately 9.6 months of operating results prior to the divestiture on December 20, 2017. (3) Includes goodwill impairment charges of $96.6 million and trademark impairment charges of $35.7 million during fiscal 2018 and trademark impairment charges of $9.5 million during fiscal 2017. Total after tax asset impairment charges were $83.5 million for fiscal 2018 and $5.9 million for fiscal 2017. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Feb. 28, 2018 | |
Property and Equipment | |
Property and Equipment | Note 5 – Property and Equipment A summary of property and equipment is as follows: PROPERTY AND EQUIPMENT Estimated Useful Lives February 28, February 28, (in thousands) (Years) 2018 2017 Land - $ 12,800 $ 12,800 Building and improvements - 40 106,870 106,648 Computer, furniture and other equipment - 15 79,657 72,444 Tools, molds and other production equipment - 10 33,466 31,157 Construction in progress - 5,912 5,606 Property and equipment, gross 238,705 228,655 Less accumulated depreciation (115,202) (102,153) Property and equipment, net $ 123,503 $ 126,502 We recorded $14.9, $14.2 and $13.4 million of depreciation expense including $3.7, $4.6 and $4.3 million in cost of goods sold and $11.2, $9.6 and $9.1 million in SG&A in the consolidated statements of income for fiscal 2018, 2017 and 2016, respectively. We lease certain facilities, equipment, and vehicles under operating leases, which expire at various dates through fiscal 2033. Certain of the leases contain escalation clauses and renewal or purchase options in addition to rent abatement amounts. Rent expense related to our operating leases was $5.5, $5.3, and $5.1 million for fiscal 2018, 2017 and 2016, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Feb. 28, 2018 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | Note 6 – Accrued Expenses and Other Current Liabilities A summary of accrued expenses and other current liabilities is as follows: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES February 28, February 28, (in thousands) 2018 2017 Accrued compensation, benefits and payroll taxes $ 37,666 $ 34,917 Accrued sales discounts and allowances 28,311 26,867 Accrued warranty returns 22,445 20,517 Accrued advertising 25,324 23,747 Accrued legal fees and settlements 17,243 16,908 Other 34,875 25,142 Total accrued expenses and other current liabilities $ 165,864 $ 148,098 |
Other Liabilities, Noncurrent
Other Liabilities, Noncurrent | 12 Months Ended |
Feb. 28, 2018 | |
Other Liabilities, Noncurrent | |
Other Liabilities, Noncurrent | Note 7 – Other Liabilities, Noncurrent A summary of other noncurrent liabilities is as follows: OTHER LIABILITIES, NONCURRENT February 28, February 28, (in thousands) 2018 2017 Deferred compensation liability $ 6,736 $ 6,560 Liability for uncertain tax positions 3,349 6,611 Other liabilities 4,606 4,171 Total other liabilities, noncurrent $ 14,691 $ 17,342 |
Hydro Flask Acquisition
Hydro Flask Acquisition | 12 Months Ended |
Feb. 28, 2018 | |
Hydro Flask Acquisition | |
Hydro Flask Acquisition | Note 8 – Hydro Flask Acquisition On March 18, 2016, we completed the acquisition of all membership units of Steel Technology, LLC, doing business as Hydro Flask. Hydro Flask is a leading designer, distributor and marketer of high performance insulated stainless steel food and beverage containers for active lifestyles. The aggregate purchase price for the transaction was approximately $209.3 million, net of cash acquired. Significant assets acquired include receivables, inventory, prepaid expenses, property and equipment, trade names, technology assets, customer relationships, and goodwill. Acquisition-related expenses, incurred during fiscal 2016, were approximately $0.7 million (before and after tax). We accounted for the acquisition as the purchase of a business and recorded the excess purchase price as goodwill, which is not expected to be deductible for income tax purposes. We completed our analysis of the economic lives of the assets acquired and determined the appropriate fair values of the acquired assets. We assigned $59.0 million to trade names with indefinite economic lives. We assigned $10.3 million to technology assets and $14.2 million to customer relationships and are amortizing these assets over expected lives of 10 and 24 years, respectively. For technology assets, we considered the average life cycle of the underlying products, which range from 7 - 15 years, and the overall average life of the associated patent portfolio. For the customer relationships, we used historical attrition rates to assign an expected life. The following schedule presents the net assets of Hydro Flask recorded at acquisition, excluding cash acquired: HYDRO FLASK – NET ASSETS RECORDED UPON ACQUISITION AT MARCH 18, 2016 (in thousands) Assets: Receivables $ 7,955 Inventory 6,243 Prepaid expenses and other current assets 336 Property and equipment 1,108 Goodwill 116,053 Trade names - indefinite 59,000 Technology assets - definite 10,300 Customer relationships - definite 14,200 Subtotal - assets 215,195 Liabilities: Accounts payable 2,275 Accrued expenses 3,662 Subtotal - liabilities 5,937 Net assets recorded $ 209,258 The fair values of the above assets acquired and liabilities assumed were estimated by applying income and market approaches. Key assumptions include various discount rates based upon a 12.3% weighted average cost of capital; royalty rates used in the determination of trade names and technology asset values of 6% and 2%, respectively; and a customer attrition rate used in the determination of customer relationship values of approximately 4% per year. The impact of the Hydro Flask acquisition on our consolidated statements of income for fiscal 2017 is as follows: HYDRO FLASK - IMPACT ON CONSOLIDATED STATEMENT OF INCOME Fiscal Year March 18, 2016 (acquisition date) through February 28, 2017 Ended (in thousands, except earnings per share data) February 28, 2017 Sales revenue, net $ 107,005 Net income 27,902 Earnings per share: Basic $ 1.01 Diluted $ 1.00 The following supplemental unaudited pro forma information presents our financial results as if the Hydro Flask 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, 2015, and this information is not intended to be indicative of future results. HYDRO FLASK - PRO FORMA IMPACT ON CONSOLIDATED STATEMENTS OF INCOME (unaudited) As if the acquisition had been completed at the beginning of March 1, 2015 Fiscal Years Ended the Last Day of February (in thousands, except earnings per share data) 2017 2016 Sales revenue, net $ 1,410,171 $ 1,450,530 Net income 144,947 105,669 Earnings per share: Basic $ 5.27 $ 3.74 Diluted $ 5.20 $ 3.68 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Feb. 28, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 9 – Goodwill and Intangibles 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. 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 perform annual impairment testing each fiscal year and interim impairment testing, if necessary. We write down any asset deemed to be impaired to its fair value. Our 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, we consider the existing rates on Treasury Bills, yield spreads on assets with comparable expected lives, historical volatility of our common stock and that of comparable companies, and general economic and industry trends, among other considerations. When stock market or other conditions warrant, we expand our 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 our 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. Impairment Testing in Fiscal 2018 - As a result of our annual and interim testing of indefinite-lived trademarks, we recorded non-cash asset impairment charges totaling $15.4 million ($13.8 million after tax) during fiscal 2018. The charges were related to trademarks in our Beauty segment, which were written down to their estimated fair values, determined on the basis of our estimated future discounted cash flows using the relief from royalty valuation method. The fair values used in our impairment tests were determined using a weighted average of various valuation methods including estimated future discounted cash flows and other market data. The valuation techniques utilized assumptions we believed to be appropriate in the circumstances; however, future circumstances attributable to a strategic change in our business could result in changes to those assumptions and other charges or losses relating our segments may be recorded and could be material. We are unable to project the amount of any expense, charge or loss that may be incurred in future periods. Impairment Testing in Fiscal 2017 - As a result of our testing of indefinite-lived trademarks, we recorded non-cash asset impairment charges of $2.9 million ($2.5 million after tax) during fiscal 2017. The charges were related to trademarks in our Beauty segment, which were written down to their estimated fair values, determined on the basis of our estimated future discounted cash flows using the relief from royalty valuation method. Impairment Testing in Fiscal 2016 - As a result of our testing of indefinite-lived trademarks, we recorded non-cash impairment charges of $6.0 million ($5.3 million after tax) during fiscal 2016. The charges were related to certain trademarks in our Beauty segment, which were written down to fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. The following tables summarize the changes in our goodwill and intangible assets by segment for fiscal 2018 and 2017: GOODWILL AND INTANGIBLE ASSETS Balances at Balances at Weighted February 28, 2017 Year Ended February 28, 2018 February 28, 2018 Average Gross Cumulative Acquisition Gross Cumulative Life Carrying Goodwill and Retirement Carrying Goodwill Accumulated Net Book (in thousands) (Years) Amount Impairments Additions Impairments Adjustments Amount Impairments Amortization Value Housewares: Goodwill $ 282,056 $ - $ - $ - $ - $ 282,056 $ - $ - $ 282,056 Trademarks - indefinite 134,200 - - - - 134,200 - - 134,200 Other intangibles - finite 10.7 40,393 - 607 (173) 40,828 - (17,530) 23,298 Subtotal 456,649 - 607 - (173) 457,084 - (17,530) 439,554 Health & Home: Goodwill 284,913 - - - - 284,913 - - 284,913 Trademarks - indefinite 54,000 - - - - 54,000 - - 54,000 Licenses - finite 15,300 - - - - 15,300 - (15,300) - Licenses - indefinite 7,400 - - - - 7,400 - - 7,400 Other Intangibles - finite 4.0 116,982 - 605 - 117,586 - (77,128) 40,458 Subtotal 478,595 - 605 - - 479,199 - (92,428) 386,771 Beauty: Goodwill 81,841 (46,490) - - - 81,841 (46,490) - 35,351 Trademarks - indefinite 45,854 - - (15,447) - 30,407 - - 30,407 Trademarks - finite 10.6 150 - - - - 150 - (97) 53 Licenses - indefinite 10,300 - - - - 10,300 - - 10,300 Licenses - finite 4.8 13,696 - - - - 13,696 - (12,166) 1,530 Other intangibles - finite 0.2 46,402 - - - - 46,402 - (45,133) 1,269 Subtotal 198,243 (46,490) - (15,447) - 182,796 (46,490) (57,396) 78,910 Total $ 1,133,487 $ (46,490) $ 1,212 $ (15,447) $ (173) $ 1,119,079 $ (46,490) $ (167,354) $ 905,235 Year Ended Year Ended Weighted February 29, 2016 Year Ended February 28, 2017 February 28, 2017 Average Gross Cumulative Acquisition Gross Cumulative Life Carrying Goodwill and Retirement Carrying Goodwill Accumulated Net Book (in thousands) (Years) Amount Impairments Additions Impairments Adjustments Amount Impairments Amortization Value Housewares: Goodwill $ 166,132 $ - $ 116,053 $ - $ (129) $ 282,056 $ - $ - $ 282,056 Trademarks - indefinite 75,200 - 59,000 - - 134,200 - - 134,200 Other intangibles - finite 11.6 15,448 - 25,040 - (95) 40,393 - (15,476) 24,917 Subtotal 256,780 - 200,093 - (224) 456,649 - (15,476) 441,173 Health & Home: Goodwill 284,913 - - - - 284,913 - - 284,913 Trademarks - indefinite 54,000 - - - - 54,000 - - 54,000 Licenses - finite 15,300 - - - - 15,300 - (15,300) - Licenses - indefinite 7,400 - - - - 7,400 - - 7,400 Other Intangibles - finite 5.0 116,575 - 472 - (65) 116,982 - (66,027) 50,955 Subtotal 478,188 - 472 - (65) 478,595 - (81,327) 397,268 Beauty: Goodwill 81,841 (46,490) - - - 81,841 (46,490) - 35,351 Trademarks - indefinite 48,754 - - (2,900) - 45,854 - - 45,854 Trademarks - finite 11.6 150 - - - - 150 - (92) 58 Licenses - indefinite 10,300 - - - - 10,300 - - 10,300 Licenses - finite 5.8 13,696 - - - - 13,696 - (11,849) 1,847 Other intangibles - finite 1.2 46,402 - - - - 46,402 - (39,929) 6,473 Subtotal 201,143 (46,490) - (2,900) - 198,243 (46,490) (51,870) 99,883 Total $ 936,111 $ (46,490) $ 200,565 $ (2,900) $ (289) $ 1,133,487 $ (46,490) $ (148,673) $ 938,324 The following table summarizes the amortization expense attributable to intangible assets recorded in SG&A in the consolidated statements of income for fiscal 2018, 2017 and 2016, as well as estimated amortization expense for fiscal 2019 through 2023: Aggregate Amortization Expense (in thousands) Fiscal 2018 $ 18,854 Fiscal 2017 $ 22,024 Fiscal 2016 $ 21,514 Estimated Amortization Expense (in thousands) Fiscal 2019 $ 14,018 Fiscal 2020 $ 12,428 Fiscal 2021 $ 10,384 Fiscal 2022 $ 4,078 Fiscal 2023 $ 3,995 |
Share-Based Compensation Plans
Share-Based Compensation Plans | 12 Months Ended |
Feb. 28, 2018 | |
Share-Based Compensation Plans | |
Share-Based Compensation Plans | Note 10 – 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 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 applicable listing standards for companies traded on the NASDAQ Stock Market LLC. 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, 2018, there were 1,200 shares of common stock subject to options 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 our Company. Under this plan, we offer 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, 2018, there were 298,602 shares of common stock subject to options outstanding under the plan. · Restricted Stock Awards (“RSAs”): During fiscal 2016, we issued an RSA that immediately vested for 2,000 shares of common stock to our current CEO at a fair value of $89.12 per share. · 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 2018, 2017 and 2016, we granted RSUs that may be settled for up to 82,356, 92,329 and 29,932 shares of common stock, with weighted average grant date fair values of $95.36, $96.74 and $76.62, respectively, to the CEO and certain members of the management team. The awards vest over varying terms up to 4 years. We expense 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 our performance goals over the performance period established by the Compensation Committee of our Board of Directors. During fiscal 2018, 2017 and 2016, we granted PSUs that may be settled for up to 140,658, 139,846 and 130,608 shares of common stock with average fair values at the grant date of $96.52, $97.12 and $76.62, respectively, to the CEO and certain members of the management team. These awards have three year performance periods ending on the last day of fiscal 2020, 2019 and 2018, respectively. 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 shares available for issue under the 2008 stock incentive plan follows: Shares originally authorized 3,750,000 Less cumulative stock option grants issued, net of forfeitures (1,160,556) Less restricted share awards previously vested and settled (638,565) Subtotal 1,950,879 Less maximum RSUs issuable upon vesting (1) (136,253) Less maximum PSUs issuable upon vesting (1) (348,126) Shares available for issuance 1,466,500 (1) RSUs and PSUs potentially issuable are estimated assuming the maximum payouts adjusted for actual forfeitures to date. 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 our Board of Directors. The plan will expire by its terms on August 19, 2018. As of February 28, 2018, 84,483 shares of restricted stock have been granted and 90,517 shares remained available for future issue under the plan. Under the 2008 Directors’ Plan for fiscal 2018, 2017 and 2016, we granted 5,658, 5,285 and 5,649 shares of restricted stock, respectively, to certain members of our Board of Directors having weighted average fair values at the date of grant of $92.95, $92.98 and $87.04 per share for each year, respectively. The restricted stock awards vested immediately, were valued at the fair value of our 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% 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% 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 2018, 2017 and 2016, plan participants acquired a total of 16,098, 32,110 and 28,433 shares of common stock at average prices of $76.76, $76.77 and $67.77 per share, respectively. As of February 28, 2018, there were 50,444 shares available for future issue under the plan. We recorded share-based compensation expense in SG&A as follows: SHARE-BASED PAYMENT EXPENSE Fiscal Years Ended the Last Day of February, (in thousands, except per share data) 2018 2017 2016 Stock options $ 1,634 $ 2,614 $ 2,863 Directors stock compensation 750 700 700 Performance based and other stock awards 12,631 10,243 3,235 Employee stock purchase plan 264 490 552 Share-based compensation expense 15,279 14,047 7,350 Less income tax benefits (1,669) (1,762) (753) Share-based compensation expense, net of income tax benefits $ 13,610 $ 12,285 $ 6,597 Continuing operations earnings per share impact of share-based compensation expense: Basic $ 0.50 $ 0.45 $ 0.23 Diluted $ 0.50 $ 0.44 $ 0.23 A summary of our total unrecognized share-based compensation expense as of February 28, 2018 is as follows: UNRECOGNIZED SHARE-BASED COMPENSATION EXPENSE Weighted Average Unrecognized Period of Compensation Recognition (in thousands, except weighted average expense period data) Expense (in months) Stock options $ 1,384 Restricted stock units (RSUs and PSUs) 12,220 There were no options granted during fiscal 2018. The fair value of our stock option grants are estimated using a Black-Scholes option pricing model with the following assumptions for fiscal years 2017 and 2016: ASSUMPTIONS USED FOR FAIR VALUE OF STOCK OPTION GRANTS Fiscal Years Ended the Last Day of February, 2017 2016 Range of risk free interest rates used 1.2% 0.9% - 1.5% Expected dividend rate -% -% Weighted average volatility rate 33.4% 39.1% Range of expected volatility rates used 33.4% 35.9% - 39.7% Range of expected terms used (in years) 4.1 4.1 - 4.4 The risk-free interest rate is based on U.S. Treasury securities with maturities equal to the expected life of the stock option grants. The dividend yield is computed as zero because we have not historically paid dividends nor do we 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 stock option grants. We use our historical experience to estimate the expected term of each stock option grant. A summary of stock option activity under all our share-based compensation plans follows: SUMMARY OF STOCK OPTION ACTIVITY Weighted Weighted Weighted Average Average Average Remaining Exercise Grant Date Contractual Price Fair Value Term Intrinsic (in thousands, except contractual term and per share data) Options (per share) (per share) (in years) Value Outstanding at February 28, 2015 42.76 16.28 26,008 Grants 88.17 28.82 Exercises 37.86 9,480 Forfeitures / expirations 59.01 Outstanding at February 29, 2016 53.94 19.52 6.1 26,847 Grants 2 102.04 28.74 Exercises (170) 43.07 9,152 Forfeitures / expirations (33) 65.68 Outstanding at February 28, 2017 448 $ 57.41 $ 20.54 5.0 $ 18,097 Grants - - - Exercises (126) 52.28 5,400 Forfeitures / expirations (22) 72.37 Outstanding at February 28, 2018 300 $ 58.35 $ 32.04 $ 9,606 Exercisable at February 28, 2018 175 $ 49.18 $ 41.11 $ 7,198 A summary of non-vested stock option activity and changes under all our share-based compensation plans follows: NON-VESTED STOCK OPTION ACTIVITY Weighted Average Non- Grant Date Vested Fair Value (in thousands, except per share data) Options (per share) Outstanding at February 28, 2015 16.98 Grants 186 28.82 Vested or forfeited (339) 17.59 Outstanding at February 29, 2016 521 20.81 Grants 2 28.74 Vested or forfeited (243) 18.95 Outstanding at February 28, 2017 280 $ 22.48 Grants - - Vested or forfeited (155) 25.02 Outstanding at February 28, 2018 125 $ 19.31 A summary of restricted stock unit activity and changes under our 2008 Stock Incentive Plan follows: SUMMARY OF RESTRICTED STOCK UNIT ACTIVITY Weighted Average Restricted Grant Date Stock Fair Value Fair Value (in thousands, except per share data) Units (per share) Outstanding Outstanding at February 28, 2015 (1) 118 58.35 9,041 Granted (1) 95 76.62 Vested (2) - - Outstanding at February 29, 2016 213 66.50 20,311 Granted (1) 162 96.90 Vested (2) (53) 70.14 Outstanding at February 28, 2017 322 $ 81.19 $ 31,418 Granted (1) 262 96.44 Vested or forfeited (2) (274) 78.71 Outstanding at February 28, 2018 310 $ 90.05 $ 27,944 (1) Includes target level RSUs and PSUs granted to our current CEO and members of management in connection with long-term incentive compensation for fiscal 2018, 2017 and 2016. (2) Includes 192,002 and 15,643 RSUs which vested and settled throughout the year at an weighted average fair values of $62.88 and $60.28 per share for fiscal 2018 and 2017, respectively. There were no RSUs vested or settled in fiscal 2016. |
Defined Contribution Plans
Defined Contribution Plans | 12 Months Ended |
Feb. 28, 2018 | |
Defined Contribution Plans | |
Defined Contribution Plans | Note 11 – We sponsor defined contribution savings plans in the U.S. and other countries where we have employees. Total company matching contributions made to these plans for fiscal 2018, 2017 and 2016 were $3.9, $3.2 and $3.1 million, respectively. |
Repurchases of Helen of Troy Co
Repurchases of Helen of Troy Common Stock | 12 Months Ended |
Feb. 28, 2018 | |
Repurchase of Helen of Troy Common Stock | |
Repurchase of Helen of Troy Common Stock | Note 1 On May 10, 2017, our Board of Directors authorized the repurchase of up to $400 million of our outstanding common stock. The authorization is effective for a period of three years and replaced our former repurchase authorization, of which approximately $82 million remained. These repurchases may include open market purchases, privately negotiated transactions, block trades, accelerated stock repurchase transactions, or any combination of such methods. The number of shares purchased and the timing of the purchases will depend on a number of factors, including share price, trading volume and general market conditions, working capital requirements, general business conditions, financial conditions, any applicable contractual limitations, and other factors, including alternative investment opportunities. As of February 28, 2018, our repurchase authorization allowed for the purchase of $328.0 million of common stock. Our current equity-based compensation plans include provisions that allow for the “net exercise” of share settled awards by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the option holder can be paid for by having the option holder tender back to us a number of shares at fair value equal to the amounts due. Net exercises are treated as purchases and retirements of shares. The following table summarizes our share repurchase activity for the periods shown: SHARE REPURCHASES Year Ended the Last Day of February (in thousands, except share and per share data) 2018 2017 2016 Common stock repurchased on the open market or through tender offer: Number of shares 717,300 922,731 1,126,796 Aggregate value of shares $ 65,795 $ 75,000 $ 100,000 Average price per share $ 91.73 $ 81.28 $ 88.75 Common stock received in connection with share-based compensation: Number of shares 75,785 6,286 117,294 Aggregate value of shares $ 7,258 $ 595 $ 6,411 Average price per share $ 95.77 $ 94.61 $ 54.66 |
Restructuring Plan
Restructuring Plan | 12 Months Ended |
Feb. 28, 2018 | |
Restructuring Plan | |
Restructuring Plan | Note 13 – On October 5, 2017, we announced an approved restructuring plan (referred to as “Project Refuel”) intended to enhance the performance primarily for the Beauty and Nutritional Supplements segments. Project Refuel includes charges for a reduction-in-force and the elimination of certain contracts. Following the divestiture of our former Nutritional Supplements segment, as discussed in Note 4 to these consolidated financial statements, we are targeting total annualized profit improvements of approximately $8.0 million over the duration of the plan. We estimate the plan to be completed by the first quarter of fiscal 2020 and expect to incur total restructuring charges in the range of approximately $3.2 to $4.8 million over the same period. Restructuring provisions are determined based on estimates prepared at the time the restructuring actions are approved by management and are revised periodically. Restructuring charges also include amounts recognized as incurred. During fiscal 2018, we incurred $1.9 million of pre-tax restructuring costs related to employee severance and termination benefits and contract termination costs. As of February 28, 2018, we made cash restructuring payments of $1.3 million and had a remaining liability of $0.5 million. |
Other Commitments and Contingen
Other Commitments and Contingencies | 12 Months Ended |
Feb. 28, 2018 | |
Other 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 and Related Matters – We have entered into employment contracts with certain officers, including an employment agreement with Mr. Julien Mininberg, our CEO, that was amended and restated on January 7, 2016. The amended and restated agreement, among other things, extended the term of Mr. Mininberg’s employment agreement from March 1, 2016 through February 28, 2019. 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, 2018, the estimated aggregate commitment for potential future compensation and/or severance pursuant to all continuing employment contracts, was approximately $7.0 million, payable over varying terms up to two years from the date of separation. 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, the imposition of additional tariffs, 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 fluctuations in the Chinese Renminbi against the U.S. Dollar have resulted in variability in our cost of goods sold. In the past, certain Chinese suppliers have closed operations due to economic conditions that pressured their profitability. Although we have multiple sourcing partners for certain products, occasionally we are unable to source certain items on a timely basis due to changes occurring with our suppliers. We 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 estimates of the liabilities for such incentives is included in the accompanying consolidated balance sheets on the line entitled “Accrued expenses and other current liabilities,” and in Note 6 to these consolidated financial statements included in the lines entitled “Accrued sales discounts and allowances” and “Accrued advertising” and are based on incentives applicable to sales occurring up to the respective balance sheet dates. Thermometer Patent Litigation – In January 2016, a jury ruled against us in a case that involved claims by Exergen Corporation. The case involved the alleged patent infringement related to two forehead thermometer models sold by our subsidiary, Kaz USA, Inc., in the United States. As a result of the jury verdict, we recorded a charge in fiscal 2016 including legal fees and other related expenses, of $17.8 million (before and after tax). In June 2016, certain post-trial motions were concluded with Exergen Corporation being awarded an additional $1.5 million of pre-judgment compensation. We accrued this additional amount in May 2016. In July 2016, we appealed the judgment to the United States Court of Appeals for the Federal Circuit. In March 2018, the Federal Circuit issued a decision, which reversed the district court’s verdict of infringement of one of the two patents at issue and remanded the damage award for a determination by the district court of the impact the reversal of infringement has on the damage award. We are not yet able to predict the outcome of the further district court proceedings and, therefore, have not adjusted the related reserve. 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 2018 were: PAYMENTS DUE BY PERIOD - TWELVE MONTHS ENDED THE LAST DAY OF FEBRUARY: 2019 2020 2021 2022 2023 After (in thousands) Total 1 year 2 years 3 years 4 years 5 years 5 years Floating rate debt $ 293,707 $ 1,900 $ 1,900 $ 1,900 $ 271,300 $ 1,900 $ 14,807 Long-term incentive plan payouts 11,840 5,412 4,786 1,642 - - - Interest on floating rate debt (1) 29,011 7,625 7,569 7,514 5,873 429 1 Open purchase orders 182,603 182,603 - - - - - Long-term purchase commitments 1,033 1,033 - - - - - Minimum royalty payments 55,359 12,490 12,972 12,912 9,071 7,914 - Advertising and promotional 39,071 14,304 6,298 6,411 6,527 5,531 - Operating leases 67,685 6,237 6,270 6,278 5,851 4,932 38,117 Capital spending commitments 1,080 1,080 - - - - - Total contractual obligations (2) $ 681,389 $ 232,684 $ 39,795 $ 36,657 $ 298,622 $ 20,706 $ 52,925 (1) We estimate our future obligations for interest on our floating rate debt by assuming the weighted average interest rates in effect on each floating rate debt obligation at February 28, 2018 remain constant into the future. This is an estimate, as actual rates will vary over time. In addition, for the Credit Agreement, we assume that the balance outstanding as of February 28, 2018 remains the same for the remaining term of the agreement. The actual balance outstanding under the Credit Agreement may fluctuate significantly in future periods, depending on the availability of cash flow from operations and future investing and financing considerations. (2) In addition to the contractual obligations and commercial commitments in the table above, as of February 28, 2018, we have recorded a provision for uncertain tax positions of $3.3 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. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Feb. 28, 2018 | |
Long-Term Debt | |
Long-Term Debt | Note 15 – Long Term Debt We have a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and other lenders that provides for an unsecured total revolving commitment of $1 billion as of February 28, 2018. The commitment under the Credit Agreement terminates on December 7, 2021. Borrowings accrue interest under one of two alternative methods as described in the Credit Agreement. With each borrowing against our credit line, we can elect the interest rate method based on our funding needs at the time. We also incur loan commitment and letter of credit fees under the Credit Agreement. Outstanding letters of credit reduce the borrowing availability under the Credit Agreement on a dollar-for-dollar basis. As of February 28, 2018, the outstanding revolving loan principal balance was $269.4 million and the balance of outstanding letters of credit was $7.1. million. As of February 28, 2018, the amount available for borrowings under the Credit Agreement was $723.5 million. Covenants in our debt agreements limit the amount of total indebtedness we can incur. As of February 28, 2018 these covenants effectively limited our ability to incur more than $516.9 million of additional debt from all sources, including our Credit Agreement, or $692.1 million in the event a qualified acquisition is consummated. A summary of our long-term debt follows: LONG-TERM DEBT Original Date Interest February 28, February 28, (dollars in thousands) Borrowed Rates Matures 2018 2017 Mississippi Business Finance Corporation Loan (the "MBFC Loan") (1) 03/13 Floating 03/23 $ 24,219 $ 29,903 Senior Notes (2) 01/11 3.9 % 01/18 - 19,763 Credit Agreement (3) 01/15 Floating 12/21 265,650 435,949 Total long-term debt 289,869 485,615 Less current maturities of long-term debt (1,884) (24,404) Long-term debt, excluding current maturities $ 287,985 $ 461,211 (1) The MBFC Loan is unsecured with an original balance of $37.6 million and interest set and payable quarterly at a Base Rate, plus a margin of up to 1.0%, or applicable LIBOR plus a margin of up to 2.0%, as determined by the interest rate elected and the Leverage Ratio. The loan is subject to holder’s call on or after March 1, 2018. The loan can be prepaid without penalty. The remaining loan balance is payable as follows: $1.9 million annually on March 1, 2018 through 2022; and $14.8 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023. (2) Unsecured Senior Notes at a fixed interest rate of 3.9% were paid in full during the fourth quarter of fiscal 2018. (3) Floating interest rates are hedged with an interest rate swap to effectively fix interest rates on $100 million of the outstanding principal balance under the Credit Agreement. Notes 16 and 17 to these consolidated financial statements provide additional information regarding the interest rate swap. At February 28, 2018, our long-term debt has floating interest rates, and its book value approximates its fair value. The fair market value of the fixed rate debt at February 28, 2017 computed using a discounted cash flow analysis and comparable market rates was $20.1 million compared to the $19.8 million book value. 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. We were in compliance with the terms of these agreements as of February 28, 2018. 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 Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 Average borrowings outstanding (1) $ 382,960 $ 498,420 $ 399,800 Average interest rate during each year (2) % % % Interest rate range during each year 2.3 - 4.8 % 1.9 - 4.3 % 1.4 - 4.0 % Weighted average interest rates on borrowings outstanding at year end % % % (1) Average borrowings outstanding is computed as the average of the current and four prior quarters ending balances of our credit facility. (2) The average interest rate during each year is computed by dividing the total interest expense associated with the Credit Agreement for a fiscal year by the average borrowings outstanding for the same fiscal year. 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 Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 Interest and commitment fees $ 13,084 $ 13,745 $ 9,941 Deferred finance costs 887 Interest rate swap settlements, net 54 - (11) Cross-currency debt swap (74) (90) - Total interest expense $ 13,951 $ 14,361 $ 10,581 |
Fair Value
Fair Value | 12 Months Ended |
Feb. 28, 2018 | |
Fair Value | |
Fair Value | Note 16 – Fair Value 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; and · 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. The following tables present the fair value of our financial assets and liabilities measured on a recurring basis as of the last day of February 2018 and 2017: FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES Fair Values at February 28, 2018 (in thousands) (Level 2) (1) Assets: Money market accounts $ 1,107 Interest rate swap 922 Foreign currency contracts 2,201 Total assets $ 4,230 Liabilities: Floating rate debt $ 289,868 Foreign currency contracts 2,606 Total liabilities $ 292,474 Fair Values at February 28, 2017 (in thousands) (Level 2) (1) Assets: Money market accounts $ 2,711 Foreign currency contracts 2,167 Total assets $ 4,878 Liabilities: Fixed rate debt (2) $ 20,105 Floating rate debt 465,852 Foreign currency contracts 47 Total liabilities $ 486,004 (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. We use derivatives for hedging purposes and our derivatives are primarily interest rate swaps, foreign currency contracts and cross-currency debt swaps. See Notes 1, 17 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 at February 28, 2017 was computed using a discounted cash flow analysis and a discount rate of 1.8%. All other debt has floating interest rates, and its book value approximates its fair value as of the reporting date. Our 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 our impairment testing. Note 9 to these consolidated financial statements contains additional information regarding impairment testing and related intangible asset impairments. The table below presents other non-financial assets measured on a non-recurring basis using significant unobservable inputs (Level 3) for fiscal 2018 and 2017: OTHER NON-FINANCIAL ASSETS FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (Level 3) Fiscal Years Ended (in thousands) 2018 2017 Beginning balances $ 938,324 $ 762,878 Total income (expense): Included in net income - realized (34,128) (24,830) Acquired during the period 1,212 200,565 Acquisition adjustments and retirements during the period (173) (289) Ending balances $ 905,235 $ 938,324 |
Financial Instruments and Risk
Financial Instruments and Risk Management | 12 Months Ended |
Feb. 28, 2018 | |
Financial Instruments and Risk Management | |
Financial Instruments and Risk Management | Note 17 – 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 fiscal 2018, 2017 and 2016, approximately 13%, 13% and 16%, respectively, of our net sales revenue was in foreign currencies. These sales were primarily denominated in British Pounds, Euros, Mexican Pesos, Canadian Dollars, and Venezuelan Bolivars. We make most of our inventory purchases from the Far East and primarily 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 exchange gains (losses) from foreign currency fluctuations, including the impact of currency hedges and the cross-currency debt swap, of $(3.1), $0.5 and ($3.1) million in SG&A during fiscal 2018, 2017 and 2016, respectively. We hedge against certain foreign currency exchange rate-risk by using a series of forward contracts designated as cash flow hedges and mark-to-market derivatives 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. The effective portion of the changes in fair value of these instruments is reported in OCI and reclassified into SG&A in the same period they are settled. The ineffective portion, which is not material for any year presented, is immediately recognized in SG&A. Interest Rate Risk – Interest on our outstanding debt as of February 28, 2018 is based on floating interest rates. If short-term interest rates increase, we will incur higher interest expense on any future outstanding balances of floating rate debt. Floating interest rates are hedged with an interest rate swap to effectively fix interest rates on $100.0 million of the outstanding principal balance under the Credit Agreement, which totaled $269.4 million as of February 28, 2018. The following table summarizes the fair values of our various derivative instruments at the end of fiscal 2018 and 2017: FAIR VALUES OF DERIVATIVE INSTRUMENTS February 28, 2018 Prepaid Accrued Expenses Expenses Final and Other and Other Other (in thousands) Hedge Settlement Notional Current Other Current Liabilities, Derivatives designated as hedging instruments Type Date Amount Assets Assets Liabilities Non-current Foreign currency contracts - sell Euro Cash flow 07/2019 € 38,000 $ - $ 102 $ 1,320 $ - Foreign currency contracts - sell Canadian Dollars Cash flow 06/2019 $ 27,750 378 101 - - Foreign currency contracts - sell Pounds Cash flow 04/2019 £ 19,500 - 56 513 - Foreign currency contracts - sell Mexican Pesos Cash flow 05/2018 $ 20,000 5 - - - Interest rate swap Cash flow 12/2021 $ 100,000 539 1,942 - - Subtotal 922 2,201 1,833 - Derivatives not designated under hedge accounting Foreign currency contracts - cross-currency debt swaps - Euro (1) 4/2020 $ 5,280 - - - 208 Foreign currency contracts - cross-currency debt swaps - Pound (1) 4/2020 $ 6,395 - - - 565 Subtotal - - - 773 Total fair value $ 922 $ 2,201 $ 1,833 $ 773 February 28, 2017 Prepaid Accrued Expenses Expenses Final and Other and Other Other Hedge Settlement Notional Current Other Current Liabilities, Derivatives designated as hedging instruments Type Date Amount Assets Assets Liabilities Non-current Foreign currency contracts - sell Euro Cash flow 2/2018 € 27,500 $ 727 $ - $ - $ - Foreign currency contracts - sell Canadian Dollars Cash flow 6/2018 $ 26,000 155 32 - - Foreign currency contracts - sell Pounds Cash flow 2/2018 £ 13,500 548 - - - Foreign currency contracts - sell Mexican Pesos Cash flow 2/2018 $ 59,600 - - 47 - Subtotal 1,430 32 47 - Derivatives not designated under hedge accounting Foreign currency contracts - cross-currency debt swap - Euro (1) 1/2018 $ 10,000 705 - - - Total fair value $ 2,135 $ 32 $ 47 $ - (1) These are foreign currency contracts for which we have not elected hedge accounting. We refer to them as “cross-currency debt swaps”. They, in effect, adjust the currency denomination of a portion of our outstanding debt to the Euro and British Pound, as applicable, for the notional amounts reported, creating an economic hedge against currency movements. PRE-TAX EFFECT OF DERIVATIVE INSTRUMENTS The pre-tax effect of derivative instruments for fiscal 2018 and 2017 is as follows: Fiscal Years Ended February 28, Gain (Loss) Gain (Loss) Reclassified from Recognized in OCI Accumulated Other Comprehensive Gain (Loss) Recognized (effective portion) Income (Loss) into Income As Income (in thousands) 2018 2017 Location 2018 2017 Location 2018 2017 Currency contracts - cash flow hedges $ 1,758 $ 2,205 SG&A $ 4,364 $ 1,454 $ - $ - Interest rate swaps - cash flow hedges 2,481 - Interest expense - - Interest expense (54) - Cross-currency debt swaps - principal - - - - SG&A (1,479) 499 Cross-currency debt swaps - interest - - - - Interest Expense 74 90 Total $ 4,239 $ 2,205 $ 4,364 $ 1,454 $ (1,459) $ 589 We expect a net loss of $0.9 million associated with foreign currency contracts and interest rate swaps currently reported in accumulated other comprehensive income, 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, 16 and 18 to these consolidated financial statements for more information on our hedging activities. Counterparty Credit Risk – Financial instruments, including foreign currency contracts, cross-currency debt swaps 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. Risks Inherent in Cash and Cash Equivalents – As the levels of our cash and cash equivalents change, they can become more subject to foreign exchange rate risk, interest rate risk, credit risk, and liquidity risk. Cash consists of interest-bearing, non-interest-bearing and short-term investment accounts. We consider money market accounts to be cash equivalents. The following table summarizes our cash and cash equivalents at the end of fiscal 2018 and 2017: CASH AND CASH EQUIVALENTS February 28, 2018 February 28, 2017 Carrying Range of Carrying Range of (in thousands) Amount Interest Rates Amount Interest Rates Cash, interest and non-interest-bearing accounts $ 19,631 0.00 to 0.35% $ 21,138 0.00 to 0.35% Money market funds 1,107 0.0 to 0.03% 2,711 0.18 to 0.19% Total cash and cash equivalents $ 20,738 $ 23,848 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Feb. 28, 2018 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other 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 2018 and 2017 were as follows: CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT Unrealized Holding Gains (Losses) on Cash Flow Hedges (in thousands) Interest Foreign Total Balance at February 29, 2016 $ - $ 665 $ 665 Other comprehensive income before reclassification - 2,205 2,205 Amounts reclassified out of accumulated other comprehensive income - (1,454) (1,454) Tax effects - (243) (243) Other comprehensive income (loss) - 508 508 Balance at February 28, 2017 $ - $ 1,173 $ 1,173 Other comprehensive income (loss) before reclassification 2,481 1,758 4,239 Amounts reclassified out of accumulated other comprehensive income - (4,364) (4,364) Tax effects (776) 359 (417) Other comprehensive income (loss) 1,705 (2,247) (542) Balance at February 28, 2018 $ 1,705 $ (1,074) $ 631 See Notes 1, 16 and 17 to these consolidated financial statements for additional information regarding our hedging activities. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Feb. 28, 2018 | |
Segment and Geographic Information | |
Segment and Geographic Information | Note 19 – Segment and Geographic Information The following table contains segment information included in continuing operations. SEGMENT INFORMATION (in thousands) Fiscal 2018 Housewares (1) Health & Home Beauty Total Sales revenue, net $ 457,819 $ 682,605 $ 349,323 $ 1,489,747 Asset impairment charges - - 15,447 15,447 Restructuring charges 220 - 1,637 1,857 Operating income 89,319 $ 62,099 $ 17,644 169,062 Identifiable assets 664,151 674,440 282,729 1,621,320 Capital and intangible asset expenditures 8,537 3,716 1,352 13,605 Depreciation and amortization 5,825 16,750 11,155 33,730 Fiscal 2017 Housewares (1) Health & Home Beauty Total Sales revenue, net $ 418,128 $ 632,769 $ 355,779 $ 1,406,676 Asset impairment charges - - 2,900 2,900 Restructuring charges - - - - Operating income 89,020 51,072 29,572 169,664 Identifiable assets 642,967 679,248 284,992 1,607,207 Capital and intangible asset expenditures 5,652 5,192 4,663 15,507 Depreciation and amortization 5,795 20,483 9,897 36,175 Fiscal 2016 Housewares Health & Home Beauty Total Sales revenue, net $ 310,663 $ 642,735 $ 439,177 1,392,575 Asset impairment charges - - 6,000 6,000 Restructuring charges - - - - Operating income 55,944 36,860 23,490 116,294 Identifiable assets 610,176 715,104 306,651 1,631,931 Capital and intangible asset expenditures 1,560 9,131 5,985 16,676 Depreciation and amortization 4,532 22,022 8,335 34,889 (1) Fiscal 2018 includes a full twelve months of operating results for Hydro Flask, compared to eleven and one-half months for fiscal 2017. 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 shared service and corporate overhead expenses that are allocable to the segment. We have reallocated corporate overhead expenses to the above continuing segments that were previously allocated to our former Nutritional Supplements segment. We do not allocate nonoperating income and expense, including interest or income taxes, to operating segments. Our domestic and international net sales revenue and long-lived assets were as follows: GEOGRAPHIC INFORMATION Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 SALES REVENUE, NET: United States $ 1,168,888 $ 1,111,109 $ 1,080,338 International Total $ 1,489,747 $ 1,406,676 $ 1,392,575 LONG-LIVED ASSETS: United States $ 437,920 $ 409,337 $ 407,621 International: Barbados 496,258 499,064 315,182 Other international 131,830 159,490 Subtotal 628,088 658,554 486,956 Total $ 1,066,008 $ 1,067,891 $ 894,577 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 15%, 16% and 18% of our net sales revenue in fiscal 2018, 2017 and 2016, respectively. Sales to this customer are made within the Beauty and Health & Home segments. Of these sales, approximately 78%, 79%, and 78% for fiscal 2018, 2017 and 2016, respectively, were within the United States. Sales to our second largest customer accounted for 13% of our net sales in fiscal 2018. No other customers accounted for 10% or more of net sales revenue during the periods presented. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Feb. 28, 2018 | |
Selected Quarterly Financial Data (Unaudited) | |
Selected Quarterly Financial Data (Unaudited) | Note 20 – Selected Quarterly Financial Data (Unaudited) Selected unaudited quarterly financial data is as follows (in thousands except share data): SELECTED QUARTERLY FINANCIAL DATA Fiscal Year 2018: May August November February Total Sales revenue, net $ 327,986 $ 347,205 $ 423,709 $ 390,847 $ 1,489,747 Gross profit 181,005 161,298 622,101 Asset impairment charges 4,000 - - 11,447 15,447 Income from continuing operations 58,624 8,378 128,882 Income (loss) from discontinued operations (21,440) (25,639) (89,060) 51,703 (84,436) Earnings (loss) per share (1) Basic Continuing operations $ $ $ $ $ Discontinued operations Total earnings per share $ $ $ $ $ Diluted Continuing operations $ $ $ $ $ Discontinued operations Total earnings per share $ $ $ $ $ Fiscal Year 2017: May August November February Total Sales revenue, net $ 311,998 $ 335,058 $ 412,251 $ 347,369 $ 1,406,676 Gross profit 171,927 144,607 582,557 Asset impairment charges 2,400 - - 500 2,900 Income from continuing operations 56,774 34,425 144,310 Income (loss) from discontinued operations (4,620) (1,110) 838 1,271 (3,621) Earnings (loss) per share (1) Basic Continuing operations $ $ $ $ $ Discontinued operations Total earnings per share $ $ $ $ $ Diluted Continuing operations $ $ $ $ $ Discontinued operations Total earnings per share $ $ $ $ $ (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. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 28, 2018 | |
Income Taxes | |
Income Taxes | Note 21 - Income Taxes We reorganized the Company in Bermuda in 1994 and many of our foreign subsidiaries are not directly or indirectly owned by a U.S. parent. As such, a large portion of our foreign income is not subject to U.S. taxation on a permanent basis under current law. Additionally, our intellectual property is largely owned by foreign subsidiaries, resulting in proportionally higher earnings in jurisdictions with lower statutory tax rates, which decreases our overall effective tax rate. The taxable income earned in each jurisdiction, whether U.S. or foreign, is determined by the subsidiary's operating results, and transfer pricing and tax regulations in the related jurisdictions. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. Among other changes, the Tax Act lowered the U.S. corporate income tax rate from 35% to 21% and established a modified territorial system requiring a mandatory deemed repatriation tax on undistributed earnings of certain foreign subsidiaries. The rate change is effective at the beginning of calendar year 2018 and, as a result, we have a blended U.S. federal statutory tax rate of 32.7% for our fiscal year 2018. Under accounting standards for income taxes, the impact of new tax legislation must be taken into account in the period in which it is enacted. Subsequent to the Tax Act, the SEC issued Staff Accounting Bulletin 118 (“SAB 118”) allowing companies to use provisional estimates to record the effects of the Tax Act. SAB 118 also provides a measurement period (not to exceed one year from the date of enactment) to complete the accounting for the impacts of the Tax Act. As a result of the enactment, we have recorded a provisional tax expense of $17.9 million related to the one-time remeasurement of our U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, the one-time repatriation tax applied to our undistributed foreign earnings, and the impact of executive compensation that is no longer deductible under the Tax Act. The ultimate impact may differ from these provisional amounts due to additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued and actions the we may take as a result of the Tax Act. Any subsequent adjustments to provisional estimates will be reflected in our income tax provision during one or more periods in our fiscal 2019. Due to the enactment of the Tax Act, future repatriations of foreign earnings will generally be free of U.S. federal income tax but may incur withholding or state taxes. As of February 28, 2018, we have not made a change to our assertion that undistributed net earnings with respect to certain foreign subsidiaries are indefinitely reinvested outside the United States. All undistributed net earnings have been taxed in the U.S. as a result of the Tax Act, and consistent with our assertion, the Company intends to limit any future distributions to previously taxed income. However, we are continuing to analyze the impact of the Tax Act on our assertion. Our components of income before income tax expense are as follows: COMPONENTS OF INCOME BEFORE TAXES Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 U.S. $ 23,824 $ 20,878 $ 17,069 Non-U.S. 131,614 134,839 88,943 Total $ 155,438 $ 155,717 $ 106,012 Our components of income tax expense (benefit) are as follows: COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 U.S. Current $ 3,380 $ 19,195 $ 10,444 Deferred 19,578 22,958 Non-U.S. Current 1,912 Deferred 1,686 3,598 Total $ 26,556 $ 11,407 $ 13,021 Our total income tax expense differs from the amounts computed by applying the U.S. 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, 2018 2017 2016 Effective income tax rate at the U.S. statutory rate 32.7 % 35.0 % 35.0 % Impact of U.S. state income taxes 0.5 % 0.5 % (0.1) % Effect of statutory tax rate in Macau (19.5) % (20.1) % (21.8) % Effect of statutory tax rate in Barbados (5.2) % (7.3) % (7.6) % Effect of statutory tax rate in Europe (5.3) % (3.6) % - % Effect of statutory tax rate in Switzerland - % - % (6.5) % Effect of income from other non-U.S. operations subject to varying rates 2.1 % 2.1 % 4.6 % Effect of foreign exchange fluctuations 0.3 % 0.4 % 3.8 % Effect of asset impairment charges 2.2 % 0.4 % 1.3 % Effect of U.S. tax reform 11.5 % - % - % Effect of uncertain tax positions (1.3) % - % - % Other Items (0.9) % (0.1) % 3.6 % Effective income tax rate 17.1 % 7.3 % 12.3 % Our Macau subsidiary generates income from the sale of the goods that it has sourced and procured. This subsidiary is responsible for the sourcing and procurement of a large portion of the products that we sell. We have an indefinite tax holiday in Macau conditioned on the subsidiary meeting certain employment and investment thresholds. We have not experienced any issues in meeting the required thresholds and are unaware of any regulatory changes or impending circumstances that would restrict our right to continue to benefit from the tax holiday. Because our Macau subsidiary is not directly or indirectly owned by a U.S. parent, there is no U.S. tax liability associated with the income generated in Macau. 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 2018 and 2017 are as follows: COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES Last Day of February, (in thousands) 2018 2017 Deferred tax assets, gross: Operating loss carryforwards $ 32,829 $ 16,799 Accounts receivable 4,767 7,375 Inventories 7,183 11,057 Accrued expenses and other 7,385 12,007 Total gross deferred tax assets 52,164 Valuation allowance (17,747) (17,600) Deferred tax liabilities: Depreciation and amortization (24,859) (47,774) Total deferred tax liabilities, net $ 9,558 $ (18,136) 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. We consider the scheduled reversal of deferred tax liabilities, expected future taxable income and tax planning strategies in assessing the ultimate realization of 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 be recoverable. In fiscal 2018, the $0.1 million net decrease in our valuation allowance was principally due to changes in estimates regarding the value of operating loss carryforwards to be used in the future. As of February 28, 2018 and 2017, we had remaining tax-deductible goodwill of $19.0 million and $113.0 million, respectively, resulting from acquisitions. The amortization of this goodwill is deductible over various periods ranging up to 2 years. The tax deduction for goodwill in fiscal 2019 is expected to be approximately $1.3 million. The composition of our operating loss carryforwards at the end of fiscal 2018 is as follows: SUMMARY OF OPERATING LOSS CARRYFORWARD Balances at February 28, 2018 Tax Year Deferred Operating Expiration Tax Loss (in thousands) Date Range Assets Carryforward U.S. federal and state operating loss carryforward 2021 - Indefinite $ 16,549 $ 81,856 Non-U.S. operating loss carryforwards with definite carryover periods 2020 - 2035 2,103 7,853 Non-U.S. operating loss carryforwards with indefinite carryover periods Indefinite 14,177 50,436 Subtotals 32,829 $ 140,145 Less portion of valuation allowance established for operating loss carryforwards (16,406) Total $ 16,423 Any future amount of deferred tax asset considered realizable could be reduced in the near term if estimates of future taxable income during any carryforward periods are reduced. During fiscal 2018 and 2017, changes in the total amount of unrecognized tax benefits were as follows: UNRECOGNIZED TAX BENEFITS Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 Total unrecognized tax benefits, beginning balance $ 6,611 $ 8,737 Tax positions taken during the current period - - Resolution of tax dispute (1,486) - Changes in tax positions taken during a prior period 88 (1,260) Lapse in statute of limitations (890) (218) Impact of foreign currency re-measurement 218 (133) Settlements (113) (515) Total unrecognized tax benefits, ending balance 4,428 6,611 Less current unrecognized tax benefits (1,079) - Noncurrent unrecognized tax benefits $ 3,349 $ 6,611 Included in the balance of unrecognized tax benefits at the end of fiscal 2018 were $4.4 million of tax benefits, which, if recognized, would affect our effective tax rate. We do not expect any significant changes to our existing unrecognized tax benefits during the next twelve months resulting from any issues currently pending with tax authorities. We classify interest and penalties on uncertain tax positions as income tax expense. At the end of February 2018 and 2017, the liability for tax-related interest and penalties included in unrecognized tax benefits was $1.1 million and $1.7 million, respectively. Additionally, during fiscal 2018, 2017 and 2016 we recognized expense (benefit) of ($0.5) ($0.6) and $0.5 million, respectively, in the consolidated statements of income. We file income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. We do not expect that any proposed adjustments from these tax jurisdictions will have a material impact on our consolidated financial statements. As of February 28, 2018, tax years under examination or still subject to examination by material tax jurisdictions are as follows: Jurisdiction Tax Years Under Examination Open Tax Years United Kingdom - None - 2017 - 2018 United States 2016 2007, 2008, 2015 - 2018 Switzerland - None - 2014 - 2018 Hong Kong - None - 2010 - 2018 During fiscal 2017 we received an assessment from a state tax authority which adjusted taxable income applicable to the particular state resulting from interpretations of certain state income tax provisions applicable to our legal structure. We believe we have accurately reported our taxable income and are vigorously protesting the assessment through administrative processes with the state. We believe it is unlikely that the outcome of these matters will have a material adverse effect on our consolidated financial position, results of operations, or liquidity. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Feb. 28, 2018 | |
Earnings per Share | |
Earnings per Share | Note 22 – 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 RSUs and PSUs. See Note 10 to these consolidated financial statements for more information regarding RSUs, PSUs and other performance based stock awards. Options for common stock are excluded from the computation of diluted earnings per share if their effect is antidilutive. For fiscal 2018, 2017 and 2016, the components of basic and diluted shares were as follows: WEIGHTED AVERAGE DILUTED SECURITIES Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 Weighted average shares outstanding, basic 27,077 Incremental shares from share-based compensation arrangements 177 369 476 Weighted average shares outstanding, diluted 27,254 Dilutive securities, stock options 230 Dilutive securities, unvested or unsettled stock awards 114 186 227 Antidilutive securities 319 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Feb. 28, 2018 | |
Schedule II - Valuation and Qualifying Accounts | |
Schedule II - Valuation and Qualifying Accounts | HELEN OF TROY LIMITED AND SUBSIDIARIES Schedule II - Valuation and Qualifying Accounts Additions Charged to Net charge Beginning cost and (credit) to Ending (in thousands) Balance expenses (1) sales revenue (2) Deductions (3) Balance Year Ended February 28, 2018 Allowances for doubtful accounts $ 3,266 $ 1,066 $ - $ 1,420 $ 2,912 Allowances for sales returns 2,293 - 104 - $ 2,397 Year Ended February 28, 2017 Allowances for doubtful accounts $ 1,712 $ 2,277 $ - $ 723 $ 3,266 Allowances for sales returns 4,165 - (1,872) - $ 2,293 Year Ended February 29, 2016 Allowances for doubtful accounts $ 1,830 $ 298 $ - $ 416 $ 1,712 Allowances for sales returns 4,033 - 132 - $ 4,165 All amounts presented above have been restated to exclude the impact of our discontinued operations. (1) Represents periodic charges to the provision for doubtful accounts. (2) Represents net charges (credits) during the period to sales returns and allowances. (3) Represents write-offs of doubtful accounts, net of recoveries of previously reserved amounts . |
Summary of Significant Accoun32
Summary of Significant Accounting Policies and Related Information (Policies) | 12 Months Ended |
Feb. 28, 2018 | |
Summary of Significant Accounting Policies and Related Information | |
General | 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 our common shares, par value $0.10 per share, as “common stock.” References to “the FASB” refer to the Financial Accounting Standards Board. References to “GAAP” refer to U.S. generally accepted accounting principles. References to “ASU” refer to the codification of GAAP in the Accounting Standards Updates issued by the FASB. References to “ASC” refer to the codification of GAAP in the Accounting Standards Codification issued by the FASB. We incorporated as Helen of Troy Corporation in Texas in 1968 and were reorganized as Helen of Troy Limited in Bermuda in 1994. We are a global designer, developer, importer, marketer, and distributor of an expanding portfolio of brand-name consumer products. As of February 28, 2018, we operated three segments: Housewares, Health & Home, and Beauty. Our Housewares segment provides a broad range of innovative consumer products for the home. Product offerings include food preparation tools and storage containers; cleaning, bath and garden tools and accessories; infant and toddler care products; and insulated beverage and food containers. The Health & Home 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 Beauty segment products include electric hair care, beauty care and wellness appliances; grooming tools and accessories; and liquid-, solid- and powder-based personal care and grooming products. On December 20, 2017, we completed the divestiture of the Nutritional Supplements segment through the sale of Healthy Directions LLC and its subsidiaries to Direct Digital, LLC. The results of the Nutritional Supplements operations have been reported as discontinued operations for all periods presented in the consolidated financial statements. For more information see Note 4 to the accompanying consolidated financial statements. All other footnotes present results from continuing operations. 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 30 th . We purchase our products from unaffiliated manufacturers, most of which are located in China, Mexico and the United States. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results may differ materially from those estimates. Our consolidated financial statements are prepared in United States (“U.S.”) Dollars. All intercompany accounts and transactions are eliminated in consolidation. We have reclassified, combined or separately disclosed certain amounts in the prior years’ consolidated financial statements and accompanying footnotes, including reclassifications for discontinued operations, to conform to the current year’s presentation. Our significant accounting policies include: |
Cash and cash equivalents | 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. We consider money market accounts to be cash equivalents. |
Receivables | 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 sales returns. Our allowance for doubtful receivables reflects our best estimate of probable losses, determined principally based on historical experience and specific allowances for known at-risk accounts. Our policy is to write off receivables when we have determined they will no longer be collectible. Write-offs are applied as a reduction to the allowance for doubtful accounts and any recoveries of previous write-offs are netted against bad debt expense in the period recovered. Our allowance for sales returns reflects our best estimate of future customer returns, determined principally based on historical experience and specific allowances for known pending returns. We have a significant concentration of credit risk with two major customers at February 28, 2018 representing approximately 19% and 11% of gross trade receivables, respectively. In addition, as of February 28, 2018 and 2017, approximately 48% and 44%, respectively, of our gross trade receivables in each year were due from our five top customers. |
Foreign currency transactions and related derivative financial instruments | Foreign currency transactions and related derivative financial instruments The U.S. Dollar is the functional currency for the Company and all of its subsidiaries; therefore, we do not have a translation adjustment recorded through accumulated other comprehensive income. 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. 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 comprehensive income, depending on the type of hedging instrument and the effectiveness of the hedges. We evaluate all hedging transactions each quarter to determine that they remain effective. Any material ineffectiveness is recorded as part of SG&A in our consolidated statements of income. |
Inventory and cost of goods sold | Inventory and cost of goods sold Our inventory consists almost entirely of finished goods. We currently record inventory on our consolidated balance sheets 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 our sourcing activities and expenses incurred for production monitoring, product design, engineering, and packaging. We charged $43.2, $41.7, and $39.2 million of such general and administrative expenses to inventory during fiscal 2018, 2017 and 2016, respectively. We estimate that $11.8 and $12.8 million of general and administrative expenses directly attributable to the procurement of inventory were included in our inventory balances on hand at February 28, 2018 and 2017, respectively. The “Cost of goods sold” line item in 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 2018, 2017 and 2016, finished goods purchased from vendors in the Far East comprised approximately 74%, 71% and 70%, respectively, of finished goods purchased. During fiscal 2018, we had one vendor who fulfilled approximately 11% of our product requirements. Our top two manufacturers combined fulfilled approximately 19% of our product requirements. Over the same period, our top five suppliers fulfilled approximately 34% of our product requirements. |
Property and equipment | Property and equipment These assets are stated at cost. 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 | License agreements, trademarks, patents, and other intangible assets A significant portion of our 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 represent 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. We capitalize costs incurred to renew or extend the term of a license agreement and amortize 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 in SG&A. Net sales revenue subject to trademark license agreements requiring royalty payments comprised approximately 45%, 44% and 45% of consolidated net sales revenue for fiscal 2018, 2017 and 2016, respectively. During fiscal 2018, two license agreements accounted for net sales revenue subject to royalty payments of approximately 14% and 13% of consolidated net sales, respectively. No other license agreements had associated net sales revenue subject to royalty payments that accounted for 10% 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 fair value of the acquired 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 acquisition, 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 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. 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. |
Goodwill, intangible and other long-lived assets and related impairment testing | Goodwill, intangible and other long-lived assets and related impairment testing 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 complete our analysis of the carrying value of our goodwill and other intangible assets annually, or more frequently, whenever events or changes in circumstances indicate their carrying value may not be recoverable. 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. Our annual impairment testing for goodwill and indefinite-lived assets had historically occurred in the first quarter of our fiscal year. In December 2016, we elected to change our annual impairment testing to the fourth quarter of our fiscal year. |
Economic useful lives and amortization of intangible assets | 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. 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. For certain intangible assets subject to amortization, we use the straight-line method over appropriate periods ranging from 4 to 30 years. |
Warranties | Warranties We allow for 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 the liability. The following table summarizes the activity in our accrual for the past two fiscal years: ACCRUAL FOR WARRANTY RETURNS Fiscal Years Ended (in thousands) 2018 2017 Beginning balance $ 20,517 $ 19,418 Additions to the accrual 48,414 46,980 Reductions of the accrual - payments and credits issued (46,486) (45,881) Ending balance $ 22,445 $ 20,517 |
Financial instruments | 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 16 to these consolidated financial statements for our assessment of the fair value of our long-term debt. |
Income taxes and uncertain tax positions | Income taxes and uncertain tax positions The provision for income tax expense is calculated on reported income before income taxes based on current tax law and includes, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Tax laws may require items to be included in the determination of taxable income at different times from when the items are reflected in the financial statements. Deferred tax balances reflect the effects of temporary differences between the financial statement carrying amounts of assets and liabilities and their tax bases, as well as from net operating losses and tax credit carryforwards, and are stated at enacted tax rates in effect for the year taxes are expected to be paid or recovered. Deferred tax assets represent tax benefits for tax deductions or credits available in future years and require certain estimates and assumptions to determine whether it is more likely than not that all or a portion of the benefit will not be realized. The recoverability of these future tax deductions and credits is determined by assessing the adequacy of future expected taxable income from all sources, including the future reversal of existing taxable temporary differences, taxable income in carryback years, estimated future taxable income and available tax planning strategies. Should a change in facts or circumstances lead to a change in judgment about the ultimate recoverability of a deferred tax asset, we record or adjust the related valuation allowance in the period that the change in facts and circumstances occurs, along with a corresponding increase or decrease in income tax expense. We record tax benefits for uncertain tax positions based upon management’s evaluation of the information available at the reporting date. To be recognized in the financial statements, the tax position must meet the more-likely-than-not threshold that the position will be sustained upon examination by the tax authority based on technical merits assuming the tax authority has full knowledge of all relevant information. For positions meeting this recognition threshold, the benefit is measured as the largest amount of benefit that meets the more-likely-than-not threshold to be sustained. We periodically evaluate these tax positions based on the latest available information. For tax positions that do not meet the threshold requirement, we record liabilities for unrecognized tax benefits as a tax expense or benefit in the period recognized or reversed and disclose as a separate liability in our financial statements, including related accrued interest and penalties. |
Revenue recognition | 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 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 | Consideration granted to customers We offer our customers certain incentives in the form of volume rebates, product markdown allowances, trade discounts, cash discounts, slotting fees, and other similar arrangements. These programs are generally recorded as reductions of net sales revenue. 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 $19.9, $18.4 and $19.4 million for fiscal 2018, 2017 and 2016, respectively. |
Advertising | Advertising Advertising costs include cooperative advertising discussed above, traditional and digital media advertising and production expenses, and expenses associated with other promotional product messaging and consumer awareness programs. Advertising costs 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 $61.4, $57.7 and $54.2 million during fiscal 2018, 2017 and 2016, respectively. |
Research and development expenses | Research and development expense Expenditures for research activities relating to product design, development and improvement are charged to expense as incurred and included in our consolidated statements of income in SG&A. We incurred total research and development expenses of $13.5, $11.8 and $11.6 million during fiscal 2018, 2017 and 2016, respectively. |
Shipping and handling revenues and expenses | Shipping and handling revenue and expense Shipping and handling revenue and expense are included in our consolidated statements of income in SG&A. This includes distribution center costs, third-party logistics costs and outbound transportation costs we incur. Our net expense for shipping and handling was $78.1, $79.4 and $82.4 million during fiscal 2018, 2017 and 2016, respectively. |
Share-based compensation plans | 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. All share-based compensation expense is recorded net of forfeitures in our consolidated statements of income. 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. See Note 10 to these consolidated financial statements for more information on our share-based compensation plans. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 12 Months Ended |
Feb. 28, 2018 | |
Summary of Significant Accounting Policies and Related Information | |
New Accounting Pronouncements | Not Yet Adopted In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220) . The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this ASU also require certain disclosures about stranded tax effects. The ASU will be effective for us on March 1, 2019. Early adoption in any period is permitted. We are currently evaluating the impact this guidance may have on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging –Targeted Improvements to Accounting for Hedging Activities (Topic 815) , which amends and simplifies hedge accounting with the intent of better aligning financial reporting for hedging relationships with an entity's risk management activities. The ASU is effective for us on March 1, 2019. We are currently evaluating the impact this guidance may have on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (Topic 718). This update amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards. ASU 2017-09 is effective for us on March 1, 2018. We have concluded that the adoption of this guidance will not have a material impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra–Entity Asset Transfers of Assets Other Than Inventory (Topic 740). ASU 2016-16 amends accounting guidance for intra-entity transfers of assets other than inventory to require the recognition of taxes when the transfer occurs. The amendment will be effective for us on March 1 2018. A modified retrospective approach will be required for transition to the new guidance, with a cumulative-effect adjustment consisting of the net impact from (1) the write-off of any unamortized expense previously deferred and (2) recognition of any previously unrecognized deferred tax assets, net of any valuation allowance. The new guidance does not include any specific new disclosure requirements. We have concluded that the adoption of this guidance will not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and updated in February 2018. ASU 2016-02 will require lessees to recognize on their balance sheets “right-of-use assets” and corresponding lease liabilities, measured on a discounted basis over the lease term. Virtually all leases will be subject to this treatment except leases that meet the definition of a “short-term lease.” For expense recognition, the dual model requiring leases to be classified as either operating or finance leases has been retained from the prior standard. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. Classification will use criteria very similar to those applied in current lease accounting, but without explicit bright lines. The new lease guidance will essentially eliminate off-balance sheet financing. The guidance is effective for us on March 1, 2019. The new standard must be adopted using a modified retrospective transition and requires the new guidance to be applied at the beginning of the earliest comparative period presented. We are currently evaluating the impact this guidance may have on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . Topic 606 provides a framework for revenue recognition that replaces most existing GAAP revenue recognition guidance. 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. The guidance is effective for us on March 1, 2018, and we elected to adopt the standard using the retrospective method. Our revenue is primarily generated from the sale of non-customized consumer products to customers. Each product represents a performance obligation that is satisfied at a single point in time control transfers, which is generally when we ship the product. The timing and amount of revenue recognized will not be impacted by the new standard. We have thus concluded that the standard will not have a material impact on our consolidated financial statements. The provisions of the new standard will, however, impact the classification of certain consideration paid to our customers. We therefore expect to reclassify an immaterial amount of such payments from SG&A to a reduction of net sales revenue. The impact would reduce net sales by approximately 1%. The standard also requires new quantitative and qualitative disclosures about revenue and costs to obtain or fulfill a contract. There have been no other accounting pronouncements issued but not yet adopted which are expected to have a material impact on our consolidated financial statements. Adopted In January 2017, the FASB, issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance provides for a single-step quantitative test to identify and measure impairment, requiring an entity to recognize an impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. We adopted the guidance on March 1, 2017, applying it on a prospective basis. The application of this guidance has not had a material impact on our financial statements. |
Summary of Significant Accoun34
Summary of Significant Accounting Policies and Related Information (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Summary of Significant Accounting Policies and Related Information | |
Summary of activity in warranty accrual | Fiscal Years Ended (in thousands) 2018 2017 Beginning balance $ 20,517 $ 19,418 Additions to the accrual 48,414 46,980 Reductions of the accrual - payments and credits issued (46,486) (45,881) Ending balance $ 22,445 $ 20,517 |
Significant Accounting Matters
Significant Accounting Matters (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Significant Accounting Matters | |
Schedule of impact of Venezuela re-measurement related charges | Balance at February 29, 2016 (in thousands) Before Adjustment Adjustments After Location of Income Statement Impact Cash and cash equivalents $ 1,302 $ (1,292) $ 10 SG&A Other net assets, principally working capital other than inventory 8,120 (8,284) (164) SG&A Inventory 9,378 (9,078) 300 Cost of goods sold Property and equipment, net 82 (79) 3 SG&A Net investment in Venezuelan operations $ 18,882 $ (18,733) $ 149 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Discontinued Operations | |
Summary of balance sheet and results of operations associated with discontinued operations | February 28, February 28, (in thousands) 2018 2017 Assets Receivables $ - $ Inventory - Prepaid expenses and other current assets - Property and equipment, net - Goodwill - Other intangible assets, net - Other assets, net - Assets of discontinued operations $ - $ Liabilities Accounts payable, principally trade - 6,111 Accrued expenses and other current liabilities (1) - 5,862 Other liabilities, noncurrent - 4,319 Liabilities of discontinued operations $ - $ The results of operations associated with discontinued operations are presented in the following table: Fiscal Years Ended the Last Day of February, (in thousands) 2018 (2) 2017 2016 Sales revenue, net $ 99,013 $ 130,543 $ 153,126 Cost of goods sold 28,744 37,632 42,855 Gross profit 70,269 92,911 110,271 Selling, general and administrative expense ("SG&A") 72,419 88,742 95,950 Asset impairment charges (3) 132,297 9,500 - Restructuring charges 621 - - Operating income (loss) (135,068) (5,331) 14,321 Gain on sale before income tax 1,624 - - Interest expense (367) (497) (515) Income (loss) before income tax (133,811) (5,828) 13,806 Income tax benefit (expense) 49,375 2,207 (5,569) Income (loss) from discontinued operations $ (84,436) $ (3,621) $ 8,237 (1) Includes cash overdrafts. (2) Includes approximately 9.6 months of operating results prior to the divestiture on December 20, 2017. Includes goodwill impairment charges of $96.6 million and trademark impairment charges of $35.7 million during fiscal 2018 and trademark impairment charges of $9.5 million during fiscal 2017. Total after tax asset impairment charges were $83.5 million for fiscal 2018 and $5.9 million for fiscal 2017. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Property and Equipment | |
Schedule of property and equipment | Estimated Useful Lives February 28, February 28, (in thousands) (Years) 2018 2017 Land - $ 12,800 $ 12,800 Building and improvements - 40 106,870 106,648 Computer, furniture and other equipment - 15 79,657 72,444 Tools, molds and other production equipment - 10 33,466 31,157 Construction in progress - 5,912 5,606 Property and equipment, gross 238,705 228,655 Less accumulated depreciation (115,202) (102,153) Property and equipment, net $ 123,503 $ 126,502 |
Accrued Expenses and Other Cu38
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | February 28, February 28, (in thousands) 2018 2017 Accrued compensation, benefits and payroll taxes $ 37,666 $ 34,917 Accrued sales discounts and allowances 28,311 26,867 Accrued warranty returns 22,445 20,517 Accrued advertising 25,324 23,747 Accrued legal fees and settlements 17,243 16,908 Other 34,875 25,142 Total accrued expenses and other current liabilities $ 165,864 $ 148,098 |
Other Liabilities, Noncurrent (
Other Liabilities, Noncurrent (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Other Liabilities, Noncurrent | |
Schedule of other liabilities, noncurrent | February 28, February 28, (in thousands) 2018 2017 Deferred compensation liability $ 6,736 $ 6,560 Liability for uncertain tax positions 3,349 6,611 Other liabilities 4,606 4,171 Total other liabilities, noncurrent $ 14,691 $ 17,342 |
Hydro Flask Acquisition (Tables
Hydro Flask Acquisition (Tables) - Hydro Flask | 12 Months Ended |
Feb. 28, 2018 | |
Acquisitions | |
Schedule of net assets recorded upon acquisition | (in thousands) Assets: Receivables $ 7,955 Inventory 6,243 Prepaid expenses and other current assets 336 Property and equipment 1,108 Goodwill 116,053 Trade names - indefinite 59,000 Technology assets - definite 10,300 Customer relationships - definite 14,200 Subtotal - assets 215,195 Liabilities: Accounts payable 2,275 Accrued expenses 3,662 Subtotal - liabilities 5,937 Net assets recorded $ 209,258 |
Schedule of impact of acquisition on consolidated condensed statements of income | Fiscal Year March 18, 2016 (acquisition date) through February 28, 2017 Ended (in thousands, except earnings per share data) February 28, 2017 Sales revenue, net $ 107,005 Net income 27,902 Earnings per share: Basic $ 1.01 Diluted $ 1.00 |
Schedule of supplemental pro forma impact on consolidated condensed statements of income | As if the acquisition had been completed at the beginning of March 1, 2015 Fiscal Years Ended the Last Day of February (in thousands, except earnings per share data) 2017 2016 Sales revenue, net $ 1,410,171 $ 1,450,530 Net income 144,947 105,669 Earnings per share: Basic $ 5.27 $ 3.74 Diluted $ 5.20 $ 3.68 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Goodwill and Intangible Assets | |
Summary of carrying amounts and associated accumulated amortization for all intangible assets by operating segment | Balances at Balances at Weighted February 28, 2017 Year Ended February 28, 2018 February 28, 2018 Average Gross Cumulative Acquisition Gross Cumulative Life Carrying Goodwill and Retirement Carrying Goodwill Accumulated Net Book (in thousands) (Years) Amount Impairments Additions Impairments Adjustments Amount Impairments Amortization Value Housewares: Goodwill $ 282,056 $ - $ - $ - $ - $ 282,056 $ - $ - $ 282,056 Trademarks - indefinite 134,200 - - - - 134,200 - - 134,200 Other intangibles - finite 10.7 40,393 - 607 (173) 40,828 - (17,530) 23,298 Subtotal 456,649 - 607 - (173) 457,084 - (17,530) 439,554 Health & Home: Goodwill 284,913 - - - - 284,913 - - 284,913 Trademarks - indefinite 54,000 - - - - 54,000 - - 54,000 Licenses - finite 15,300 - - - - 15,300 - (15,300) - Licenses - indefinite 7,400 - - - - 7,400 - - 7,400 Other Intangibles - finite 4.0 116,982 - 605 - 117,586 - (77,128) 40,458 Subtotal 478,595 - 605 - - 479,199 - (92,428) 386,771 Beauty: Goodwill 81,841 (46,490) - - - 81,841 (46,490) - 35,351 Trademarks - indefinite 45,854 - - (15,447) - 30,407 - - 30,407 Trademarks - finite 10.6 150 - - - - 150 - (97) 53 Licenses - indefinite 10,300 - - - - 10,300 - - 10,300 Licenses - finite 4.8 13,696 - - - - 13,696 - (12,166) 1,530 Other intangibles - finite 0.2 46,402 - - - - 46,402 - (45,133) 1,269 Subtotal 198,243 (46,490) - (15,447) - 182,796 (46,490) (57,396) 78,910 Total $ 1,133,487 $ (46,490) $ 1,212 $ (15,447) $ (173) $ 1,119,079 $ (46,490) $ (167,354) $ 905,235 Year Ended Year Ended Weighted February 29, 2016 Year Ended February 28, 2017 February 28, 2017 Average Gross Cumulative Acquisition Gross Cumulative Life Carrying Goodwill and Retirement Carrying Goodwill Accumulated Net Book (in thousands) (Years) Amount Impairments Additions Impairments Adjustments Amount Impairments Amortization Value Housewares: Goodwill $ 166,132 $ - $ 116,053 $ - $ (129) $ 282,056 $ - $ - $ 282,056 Trademarks - indefinite 75,200 - 59,000 - - 134,200 - - 134,200 Other intangibles - finite 11.6 15,448 - 25,040 - (95) 40,393 - (15,476) 24,917 Subtotal 256,780 - 200,093 - (224) 456,649 - (15,476) 441,173 Health & Home: Goodwill 284,913 - - - - 284,913 - - 284,913 Trademarks - indefinite 54,000 - - - - 54,000 - - 54,000 Licenses - finite 15,300 - - - - 15,300 - (15,300) - Licenses - indefinite 7,400 - - - - 7,400 - - 7,400 Other Intangibles - finite 5.0 116,575 - 472 - (65) 116,982 - (66,027) 50,955 Subtotal 478,188 - 472 - (65) 478,595 - (81,327) 397,268 Beauty: Goodwill 81,841 (46,490) - - - 81,841 (46,490) - 35,351 Trademarks - indefinite 48,754 - - (2,900) - 45,854 - - 45,854 Trademarks - finite 11.6 150 - - - - 150 - (92) 58 Licenses - indefinite 10,300 - - - - 10,300 - - 10,300 Licenses - finite 5.8 13,696 - - - - 13,696 - (11,849) 1,847 Other intangibles - finite 1.2 46,402 - - - - 46,402 - (39,929) 6,473 Subtotal 201,143 (46,490) - (2,900) - 198,243 (46,490) (51,870) 99,883 Total $ 936,111 $ (46,490) $ 200,565 $ (2,900) $ (289) $ 1,133,487 $ (46,490) $ (148,673) $ 938,324 |
Summary of amortization expense attributable to intangible assets | Aggregate Amortization Expense (in thousands) Fiscal 2018 $ 18,854 Fiscal 2017 $ 22,024 Fiscal 2016 $ 21,514 |
Schedule of estimated amortization expense of intangible assets | Estimated Amortization Expense (in thousands) Fiscal 2019 $ 14,018 Fiscal 2020 $ 12,428 Fiscal 2021 $ 10,384 Fiscal 2022 $ 4,078 Fiscal 2023 $ 3,995 |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
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 (1,160,556) Less restricted share awards previously vested and settled (638,565) Subtotal 1,950,879 Less maximum RSUs issuable upon vesting (1) (136,253) Less maximum PSUs issuable upon vesting (1) (348,126) Shares available for issuance 1,466,500 (1) RSUs and PSUs potentially issuable are estimated assuming the maximum payouts adjusted for actual forfeitures to date. |
Schedule of unrecognized share-based compensation expense | Weighted Average Unrecognized Period of Compensation Recognition (in thousands, except weighted average expense period data) Expense (in months) Stock options $ 1,384 Restricted stock units (RSUs and PSUs) 12,220 |
Schedule of share-based compensation expense in S G and A | SHARE-BASED PAYMENT EXPENSE Fiscal Years Ended the Last Day of February, (in thousands, except per share data) 2018 2017 2016 Stock options $ 1,634 $ 2,614 $ 2,863 Directors stock compensation 750 700 700 Performance based and other stock awards 12,631 10,243 3,235 Employee stock purchase plan 264 490 552 Share-based compensation expense 15,279 14,047 7,350 Less income tax benefits (1,669) (1,762) (753) Share-based compensation expense, net of income tax benefits $ 13,610 $ 12,285 $ 6,597 Continuing operations earnings per share impact of share-based compensation expense: Basic $ 0.50 $ 0.45 $ 0.23 Diluted $ 0.50 $ 0.44 $ 0.23 |
Schedule of assumptions used for fair value of stock option grants | Fiscal Years Ended the Last Day of February, 2017 2016 Range of risk free interest rates used 1.2% 0.9% - 1.5% Expected dividend rate -% -% Weighted average volatility rate 33.4% 39.1% Range of expected volatility rates used 33.4% 35.9% - 39.7% Range of expected terms used (in years) 4.1 4.1 - 4.4 |
Summary of option activity | SUMMARY OF STOCK OPTION ACTIVITY Weighted Weighted Weighted Average Average Average Remaining Exercise Grant Date Contractual Price Fair Value Term Intrinsic (in thousands, except contractual term and per share data) Options (per share) (per share) (in years) Value Outstanding at February 28, 2015 42.76 16.28 26,008 Grants 88.17 28.82 Exercises 37.86 9,480 Forfeitures / expirations 59.01 Outstanding at February 29, 2016 53.94 19.52 6.1 26,847 Grants 2 102.04 28.74 Exercises (170) 43.07 9,152 Forfeitures / expirations (33) 65.68 Outstanding at February 28, 2017 448 $ 57.41 $ 20.54 5.0 $ 18,097 Grants - - - Exercises (126) 52.28 5,400 Forfeitures / expirations (22) 72.37 Outstanding at February 28, 2018 300 $ 58.35 $ 32.04 $ 9,606 Exercisable at February 28, 2018 175 $ 49.18 $ 41.11 $ 7,198 |
Schedule of non-vested option activity | NON-VESTED STOCK OPTION ACTIVITY Weighted Average Non- Grant Date Vested Fair Value (in thousands, except per share data) Options (per share) Outstanding at February 28, 2015 16.98 Grants 186 28.82 Vested or forfeited (339) 17.59 Outstanding at February 29, 2016 521 20.81 Grants 2 28.74 Vested or forfeited (243) 18.95 Outstanding at February 28, 2017 280 $ 22.48 Grants - - Vested or forfeited (155) 25.02 Outstanding at February 28, 2018 125 $ 19.31 |
Restricted Stock Units (RSU) | |
Share-based compensation plans | |
Summary of award activity | SUMMARY OF RESTRICTED STOCK UNIT ACTIVITY Weighted Average Restricted Grant Date Stock Fair Value Fair Value (in thousands, except per share data) Units (per share) Outstanding Outstanding at February 28, 2015 (1) 118 58.35 9,041 Granted (1) 95 76.62 Vested (2) - - Outstanding at February 29, 2016 213 66.50 20,311 Granted (1) 162 96.90 Vested (2) (53) 70.14 Outstanding at February 28, 2017 322 $ 81.19 $ 31,418 Granted (1) 262 96.44 Vested or forfeited (2) (274) 78.71 Outstanding at February 28, 2018 310 $ 90.05 $ 27,944 (1) Includes target level RSUs and PSUs granted to our current CEO and members of management in connection with long-term incentive compensation for fiscal 2018, 2017 and 2016. Includes 192,002 and 15,643 RSUs which vested and settled throughout the year at an weighted average fair values of $62.88 and $60.28 per share for fiscal 2018 and 2017, respectively. There were no RSUs vested or settled in fiscal 2016. |
Repurchase of Helen of Troy Com
Repurchase of Helen of Troy Common Stock (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Repurchase of Helen of Troy Common Stock | |
Summary of share repurchase activity | Year Ended the Last Day of February (in thousands, except share and per share data) 2018 2017 2016 Common stock repurchased on the open market or through tender offer: Number of shares 717,300 922,731 1,126,796 Aggregate value of shares $ 65,795 $ 75,000 $ 100,000 Average price per share $ 91.73 $ 81.28 $ 88.75 Common stock received in connection with share-based compensation: Number of shares 75,785 6,286 117,294 Aggregate value of shares $ 7,258 $ 595 $ 6,411 Average price per share $ 95.77 $ 94.61 $ 54.66 |
Other Commitments and Conting44
Other Commitments and Contingencies (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Other Commitments and Contingencies | |
Summary of contractual obligations and commercial commitments | PAYMENTS DUE BY PERIOD - TWELVE MONTHS ENDED THE LAST DAY OF FEBRUARY: 2019 2020 2021 2022 2023 After (in thousands) Total 1 year 2 years 3 years 4 years 5 years 5 years Floating rate debt $ 293,707 $ 1,900 $ 1,900 $ 1,900 $ 271,300 $ 1,900 $ 14,807 Long-term incentive plan payouts 11,840 5,412 4,786 1,642 - - - Interest on floating rate debt (1) 29,011 7,625 7,569 7,514 5,873 429 1 Open purchase orders 182,603 182,603 - - - - - Long-term purchase commitments 1,033 1,033 - - - - - Minimum royalty payments 55,359 12,490 12,972 12,912 9,071 7,914 - Advertising and promotional 39,071 14,304 6,298 6,411 6,527 5,531 - Operating leases 67,685 6,237 6,270 6,278 5,851 4,932 38,117 Capital spending commitments 1,080 1,080 - - - - - Total contractual obligations (2) $ 681,389 $ 232,684 $ 39,795 $ 36,657 $ 298,622 $ 20,706 $ 52,925 (1) We estimate our future obligations for interest on our floating rate debt by assuming the weighted average interest rates in effect on each floating rate debt obligation at February 28, 2018 remain constant into the future. This is an estimate, as actual rates will vary over time. In addition, for the Credit Agreement, we assume that the balance outstanding as of February 28, 2018 remains the same for the remaining term of the agreement. The actual balance outstanding under the Credit Agreement may fluctuate significantly in future periods, depending on the availability of cash flow from operations and future investing and financing considerations. In addition to the contractual obligations and commercial commitments in the table above, as of February 28, 2018, we have recorded a provision for uncertain tax positions of $3.3 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. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Long-Term Debt | |
Summary of long-term debt | Original Date Interest February 28, February 28, (dollars in thousands) Borrowed Rates Matures 2018 2017 Mississippi Business Finance Corporation Loan (the "MBFC Loan") (1) 03/13 Floating 03/23 $ 24,219 $ 29,903 Senior Notes (2) 01/11 3.9 % 01/18 - 19,763 Credit Agreement (3) 01/15 Floating 12/21 265,650 435,949 Total long-term debt 289,869 485,615 Less current maturities of long-term debt (1,884) (24,404) Long-term debt, excluding current maturities $ 287,985 $ 461,211 |
Schedule of interest rates on credit agreement | Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 Average borrowings outstanding (1) $ 382,960 $ 498,420 $ 399,800 Average interest rate during each year (2) % % % Interest rate range during each year 2.3 - 4.8 % 1.9 - 4.3 % 1.4 - 4.0 % Weighted average interest rates on borrowings outstanding at year end % % % |
Summary of components of interest expense | Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 Interest and commitment fees $ 13,084 $ 13,745 $ 9,941 Deferred finance costs 887 Interest rate swap settlements, net 54 - (11) Cross-currency debt swap (74) (90) - Total interest expense $ 13,951 $ 14,361 $ 10,581 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Fair Value | |
Schedule of fair value hierarchy of financial assets and liabilities presented at fair value and measured on a recurring basis | Fair Values at February 28, 2018 (in thousands) (Level 2) (1) Assets: Money market accounts $ 1,107 Interest rate swap 922 Foreign currency contracts 2,201 Total assets $ 4,230 Liabilities: Floating rate debt $ 289,868 Foreign currency contracts 2,606 Total liabilities $ 292,474 Fair Values at February 28, 2017 (in thousands) (Level 2) (1) Assets: Money market accounts $ 2,711 Foreign currency contracts 2,167 Total assets $ 4,878 Liabilities: Fixed rate debt (2) $ 20,105 Floating rate debt 465,852 Foreign currency contracts 47 Total liabilities $ 486,004 (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) | Fiscal Years Ended (in thousands) 2018 2017 Beginning balances $ 938,324 $ 762,878 Total income (expense): Included in net income - realized (34,128) (24,830) Acquired during the period 1,212 200,565 Acquisition adjustments and retirements during the period (173) (289) Ending balances $ 905,235 $ 938,324 |
Financial Instruments and Ris47
Financial Instruments and Risk Management (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Financial Instruments and Risk Management | |
Schedule of fair values of derivative instruments | February 28, 2018 Prepaid Accrued Expenses Expenses Final and Other and Other Other (in thousands) Hedge Settlement Notional Current Other Current Liabilities, Derivatives designated as hedging instruments Type Date Amount Assets Assets Liabilities Non-current Foreign currency contracts - sell Euro Cash flow 07/2019 € 38,000 $ - $ 102 $ 1,320 $ - Foreign currency contracts - sell Canadian Dollars Cash flow 06/2019 $ 27,750 378 101 - - Foreign currency contracts - sell Pounds Cash flow 04/2019 £ 19,500 - 56 513 - Foreign currency contracts - sell Mexican Pesos Cash flow 05/2018 $ 20,000 5 - - - Interest rate swap Cash flow 12/2021 $ 100,000 539 1,942 - - Subtotal 922 2,201 1,833 - Derivatives not designated under hedge accounting Foreign currency contracts - cross-currency debt swaps - Euro (1) 4/2020 $ 5,280 - - - 208 Foreign currency contracts - cross-currency debt swaps - Pound (1) 4/2020 $ 6,395 - - - 565 Subtotal - - - 773 Total fair value $ 922 $ 2,201 $ 1,833 $ 773 February 28, 2017 Prepaid Accrued Expenses Expenses Final and Other and Other Other Hedge Settlement Notional Current Other Current Liabilities, Derivatives designated as hedging instruments Type Date Amount Assets Assets Liabilities Non-current Foreign currency contracts - sell Euro Cash flow 2/2018 € 27,500 $ 727 $ - $ - $ - Foreign currency contracts - sell Canadian Dollars Cash flow 6/2018 $ 26,000 155 32 - - Foreign currency contracts - sell Pounds Cash flow 2/2018 £ 13,500 548 - - - Foreign currency contracts - sell Mexican Pesos Cash flow 2/2018 $ 59,600 - - 47 - Subtotal 1,430 32 47 - Derivatives not designated under hedge accounting Foreign currency contracts - cross-currency debt swap - Euro (1) 1/2018 $ 10,000 705 - - - Total fair value $ 2,135 $ 32 $ 47 $ - (1) These are foreign currency contracts for which we have not elected hedge accounting. We refer to them as “cross-currency debt swaps”. They, in effect, adjust the currency denomination of a portion of our outstanding debt to the Euro and British Pound, as applicable, for the notional amounts reported, creating an economic hedge against currency movements. |
Schedule of pre-tax effect of derivative instruments | Fiscal Years Ended February 28, Gain (Loss) Gain (Loss) Reclassified from Recognized in OCI Accumulated Other Comprehensive Gain (Loss) Recognized (effective portion) Income (Loss) into Income As Income (in thousands) 2018 2017 Location 2018 2017 Location 2018 2017 Currency contracts - cash flow hedges $ 1,758 $ 2,205 SG&A $ 4,364 $ 1,454 $ - $ - Interest rate swaps - cash flow hedges 2,481 - Interest expense - - Interest expense (54) - Cross-currency debt swaps - principal - - - - SG&A (1,479) 499 Cross-currency debt swaps - interest - - - - Interest Expense 74 90 Total $ 4,239 $ 2,205 $ 4,364 $ 1,454 $ (1,459) $ 589 |
Schedule of cash and cash equivalents | February 28, 2018 February 28, 2017 Carrying Range of Carrying Range of (in thousands) Amount Interest Rates Amount Interest Rates Cash, interest and non-interest-bearing accounts $ 19,631 0.00 to 0.35% $ 21,138 0.00 to 0.35% Money market funds 1,107 0.0 to 0.03% 2,711 0.18 to 0.19% Total cash and cash equivalents $ 20,738 $ 23,848 |
Accumulated Other Comprehensi48
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Accumulated Other Comprehensive Income (Loss) | |
Schedule of changes in accumulated other comprehensive income (loss) by component | Unrealized Holding Gains (Losses) on Cash Flow Hedges (in thousands) Interest Foreign Total Balance at February 29, 2016 $ - $ 665 $ 665 Other comprehensive income before reclassification - 2,205 2,205 Amounts reclassified out of accumulated other comprehensive income - (1,454) (1,454) Tax effects - (243) (243) Other comprehensive income (loss) - 508 508 Balance at February 28, 2017 $ - $ 1,173 $ 1,173 Other comprehensive income (loss) before reclassification 2,481 1,758 4,239 Amounts reclassified out of accumulated other comprehensive income - (4,364) (4,364) Tax effects (776) 359 (417) Other comprehensive income (loss) 1,705 (2,247) (542) Balance at February 28, 2018 $ 1,705 $ (1,074) $ 631 |
Segment and Geographic Inform49
Segment and Geographic Information (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Segment and Geographic Information | |
Schedule of segment information | (in thousands) Fiscal 2018 Housewares (1) Health & Home Beauty Total Sales revenue, net $ 457,819 $ 682,605 $ 349,323 $ 1,489,747 Asset impairment charges - - 15,447 15,447 Restructuring charges 220 - 1,637 1,857 Operating income 89,319 $ 62,099 $ 17,644 169,062 Identifiable assets 664,151 674,440 282,729 1,621,320 Capital and intangible asset expenditures 8,537 3,716 1,352 13,605 Depreciation and amortization 5,825 16,750 11,155 33,730 Fiscal 2017 Housewares (1) Health & Home Beauty Total Sales revenue, net $ 418,128 $ 632,769 $ 355,779 $ 1,406,676 Asset impairment charges - - 2,900 2,900 Restructuring charges - - - - Operating income 89,020 51,072 29,572 169,664 Identifiable assets 642,967 679,248 284,992 1,607,207 Capital and intangible asset expenditures 5,652 5,192 4,663 15,507 Depreciation and amortization 5,795 20,483 9,897 36,175 Fiscal 2016 Housewares Health & Home Beauty Total Sales revenue, net $ 310,663 $ 642,735 $ 439,177 1,392,575 Asset impairment charges - - 6,000 6,000 Restructuring charges - - - - Operating income 55,944 36,860 23,490 116,294 Identifiable assets 610,176 715,104 306,651 1,631,931 Capital and intangible asset expenditures 1,560 9,131 5,985 16,676 Depreciation and amortization 4,532 22,022 8,335 34,889 (1) Fiscal 2018 includes a full twelve months of operating results for Hydro Flask, compared to eleven and one-half months for fiscal 2017. |
Schedule of domestic and international net sales revenue and long-lived assets (in thousands) | Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 SALES REVENUE, NET: United States $ 1,168,888 $ 1,111,109 $ 1,080,338 International Total $ 1,489,747 $ 1,406,676 $ 1,392,575 LONG-LIVED ASSETS: United States $ 437,920 $ 409,337 $ 407,621 International: Barbados 496,258 499,064 315,182 Other international 131,830 159,490 Subtotal 628,088 658,554 486,956 Total $ 1,066,008 $ 1,067,891 $ 894,577 |
Selected Quarterly Financial 50
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Selected Quarterly Financial Data (Unaudited) | |
Schedule of selected unaudited quarterly financial data | Fiscal Year 2018: May August November February Total Sales revenue, net $ 327,986 $ 347,205 $ 423,709 $ 390,847 $ 1,489,747 Gross profit 181,005 161,298 622,101 Asset impairment charges 4,000 - - 11,447 15,447 Income from continuing operations 58,624 8,378 128,882 Income (loss) from discontinued operations (21,440) (25,639) (89,060) 51,703 (84,436) Earnings (loss) per share (1) Basic Continuing operations $ $ $ $ $ Discontinued operations Total earnings per share $ $ $ $ $ Diluted Continuing operations $ $ $ $ $ Discontinued operations Total earnings per share $ $ $ $ $ Fiscal Year 2017: May August November February Total Sales revenue, net $ 311,998 $ 335,058 $ 412,251 $ 347,369 $ 1,406,676 Gross profit 171,927 144,607 582,557 Asset impairment charges 2,400 - - 500 2,900 Income from continuing operations 56,774 34,425 144,310 Income (loss) from discontinued operations (4,620) (1,110) 838 1,271 (3,621) Earnings (loss) per share (1) Basic Continuing operations $ $ $ $ $ Discontinued operations Total earnings per share $ $ $ $ $ Diluted Continuing operations $ $ $ $ $ Discontinued operations Total earnings per share $ $ $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Income Taxes | |
Schedule of components of income before taxes | Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 U.S. $ 23,824 $ 20,878 $ 17,069 Non-U.S. 131,614 134,839 88,943 Total $ 155,438 $ 155,717 $ 106,012 |
Schedule of components of income tax expense (benefit) | Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 U.S. Current $ 3,380 $ 19,195 $ 10,444 Deferred 19,578 22,958 Non-U.S. Current 1,912 Deferred 1,686 3,598 Total $ 26,556 $ 11,407 $ 13,021 |
Schedule of effective income tax rate reconciliation | Fiscal Years Ended the Last Day of February, 2018 2017 2016 Effective income tax rate at the U.S. statutory rate 32.7 % 35.0 % 35.0 % Impact of U.S. state income taxes 0.5 % 0.5 % (0.1) % Effect of statutory tax rate in Macau (19.5) % (20.1) % (21.8) % Effect of statutory tax rate in Barbados (5.2) % (7.3) % (7.6) % Effect of statutory tax rate in Europe (5.3) % (3.6) % - % Effect of statutory tax rate in Switzerland - % - % (6.5) % Effect of income from other non-U.S. operations subject to varying rates 2.1 % 2.1 % 4.6 % Effect of foreign exchange fluctuations 0.3 % 0.4 % 3.8 % Effect of asset impairment charges 2.2 % 0.4 % 1.3 % Effect of U.S. tax reform 11.5 % - % - % Effect of uncertain tax positions (1.3) % - % - % Other Items (0.9) % (0.1) % 3.6 % Effective income tax rate 17.1 % 7.3 % 12.3 % |
Schedule of components of deferred tax assets and liabilities | Last Day of February, (in thousands) 2018 2017 Deferred tax assets, gross: Operating loss carryforwards $ 32,829 $ 16,799 Accounts receivable 4,767 7,375 Inventories 7,183 11,057 Accrued expenses and other 7,385 12,007 Total gross deferred tax assets 52,164 Valuation allowance (17,747) (17,600) Deferred tax liabilities: Depreciation and amortization (24,859) (47,774) Total deferred tax liabilities, net $ 9,558 $ (18,136) |
Schedule of operating loss carryforwards | Balances at February 28, 2018 Tax Year Deferred Operating Expiration Tax Loss (in thousands) Date Range Assets Carryforward U.S. federal and state operating loss carryforward 2021 - Indefinite $ 16,549 $ 81,856 Non-U.S. operating loss carryforwards with definite carryover periods 2020 - 2035 2,103 7,853 Non-U.S. operating loss carryforwards with indefinite carryover periods Indefinite 14,177 50,436 Subtotals 32,829 $ 140,145 Less portion of valuation allowance established for operating loss carryforwards (16,406) Total $ 16,423 |
Schedule of unrecognized tax benefits | Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 Total unrecognized tax benefits, beginning balance $ 6,611 $ 8,737 Tax positions taken during the current period - - Resolution of tax dispute (1,486) - Changes in tax positions taken during a prior period 88 (1,260) Lapse in statute of limitations (890) (218) Impact of foreign currency re-measurement 218 (133) Settlements (113) (515) Total unrecognized tax benefits, ending balance 4,428 6,611 Less current unrecognized tax benefits (1,079) - Noncurrent unrecognized tax benefits $ 3,349 $ 6,611 |
Schedule of material tax years under examination or still subject to examination by major tax jurisdictions | Jurisdiction Tax Years Under Examination Open Tax Years United Kingdom - None - 2017 - 2018 United States 2016 2007, 2008, 2015 - 2018 Switzerland - None - 2014 - 2018 Hong Kong - None - 2010 - 2018 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Earnings per Share | |
Schedule of components of basic and diluted shares | Fiscal Years Ended the Last Day of February, (in thousands) 2018 2017 2016 Weighted average shares outstanding, basic 27,077 Incremental shares from share-based compensation arrangements 177 369 476 Weighted average shares outstanding, diluted 27,254 Dilutive securities, stock options 230 Dilutive securities, unvested or unsettled stock awards 114 186 227 Antidilutive securities 319 |
Summary of Significant Accoun53
Summary of Significant Accounting Policies and Related Information - General and cash (Details) | 12 Months Ended | |
Feb. 28, 2018segment$ / shares | Feb. 28, 2017$ / shares | |
Summary of Significant Accounting Policies and Related Information | ||
Common stock, par (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 |
Number of segments | segment | 3 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies and Related Information - Receivables (Details) | 12 Months Ended | |
Feb. 28, 2018customeritem | Feb. 28, 2017customer | |
Receivables | ||
Number of receivables valuation reserves | item | 2 | |
Number of major customers | 5 | 5 |
Customer concentration risk | ||
Receivables | ||
Number of major customers | 2 | |
Gross trade receivable | Customer concentration risk | Two major customers | ||
Receivables | ||
Concentration risk percentage | 19.00% | 11.00% |
Gross trade receivable | Customer concentration risk | Five top customers | ||
Receivables | ||
Concentration risk percentage | 48.00% | 44.00% |
Summary of Significant Accoun55
Summary of Significant Accounting Policies and Related Information - Inventory and Licenses (Details) $ in Millions | 12 Months Ended | ||
Feb. 28, 2018USD ($)item | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) | |
Summary of significant accounting policies | |||
General and administrative expenses charged to inventory | $ | $ 43.2 | $ 41.7 | $ 39.2 |
General and administrative expenses directly attributable to the procurement of inventory included in inventory balances | $ | $ 11.8 | $ 12.8 | |
Number of licensors exceeding 10 percent of net sales revenue | 2 | ||
Supplier concentration risk | Top vendor | |||
Summary of significant accounting policies | |||
Number of suppliers exceeding 10 percent of product requirements | 1 | ||
Supplier concentration risk | Top two manufacturers | |||
Summary of significant accounting policies | |||
Number of third-party manufacturers | 2 | ||
Supplier concentration risk | Top five suppliers | |||
Summary of significant accounting policies | |||
Number of suppliers exceeding 10 percent of product requirements | 5 | ||
Cost of goods sold manufactured by vendors | Supplier concentration risk | Vendors in Far East | |||
Summary of significant accounting policies | |||
Concentration risk percentage | 74.00% | 71.00% | 70.00% |
Cost of goods sold manufactured by vendors | Supplier concentration risk | Top vendor | |||
Summary of significant accounting policies | |||
Concentration risk percentage | 11.00% | ||
Cost of goods sold manufactured by vendors | Supplier concentration risk | Top two manufacturers | |||
Summary of significant accounting policies | |||
Concentration risk percentage | 19.00% | ||
Cost of goods sold manufactured by vendors | Supplier concentration risk | Top five suppliers | |||
Summary of significant accounting policies | |||
Concentration risk percentage | 34.00% | ||
Net sales revenue | Net sales revenue subject to trademark license agreements | |||
Summary of significant accounting policies | |||
Concentration risk percentage | 45.00% | 44.00% | 45.00% |
Net sales revenue | Net sales revenue subject to trademark license agreements | Top Licensor | |||
Summary of significant accounting policies | |||
Concentration risk percentage | 14.00% | ||
Net sales revenue | Net sales revenue subject to trademark license agreements | Second Top Licensor | |||
Summary of significant accounting policies | |||
Concentration risk percentage | 13.00% |
Summary of Significant Accoun56
Summary of Significant Accounting Policies and Related Information - Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Goodwill, intangible and other long-lived assets and impairments | |||
Impairment of intangible assets (excluding goodwill) | $ 0 | ||
Intangible asset amortization | 18,854 | $ 22,024 | $ 21,514 |
Goodwill | |||
Goodwill deductible for tax purposes | $ 19,000 | $ 113,000 | |
Minimum | |||
Economic useful lives and amortization of intangible assets | |||
Amortization period | 4 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 Accoun57
Summary of Significant Accounting Policies and Related Information - Warrants (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Accrual for warranty returns | |||
Beginning balance | $ 20,517 | $ 19,418 | |
Additions to the accrual | 48,414 | 46,980 | |
Reductions of the accrual - payments and credits issued | (46,486) | (45,881) | |
Ending balance | 22,445 | 20,517 | $ 19,418 |
SG&A | |||
Customer incentives in SG&A | 19,900 | 18,400 | 19,400 |
Advertising costs in SG&A | 61,400 | 57,700 | 54,200 |
Research and development expenses | 13,500 | 11,800 | 11,600 |
Shipping and handling expenses in SG&A | $ 78,100 | $ 79,400 | $ 82,400 |
Minimum | |||
Warranties | |||
Product Warranty Period | 2 years | ||
Maximum | |||
Warranties | |||
Product Warranty Period | 5 years |
New Accounting Pronouncements58
New Accounting Pronouncements (Details) | Mar. 01, 2018 |
ASU 2014-09 | Forecast | |
New Accounting Pronouncements | |
Decrease in net sales | 1.00% |
Significant Accounting Matter59
Significant Accounting Matters (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Dec. 31, 2017 | Feb. 28, 2017 | Feb. 29, 2016 |
Change in Accounting Estimate | |||||||||||||
Corporate income tax rate (as a percent) | 21.00% | 32.70% | 35.00% | 35.00% | 35.00% | ||||||||
Blended U.S. federal statutory rate (as a percent) | 32.70% | ||||||||||||
Provisional tax expense related to one-time remeasurement of our U.S. deferred tax assets and liabilities | $ 17,900 | ||||||||||||
Expected percentage reduction in annual effective tax rate due to the Tax Act | 1.00% | ||||||||||||
Charge from re-measurement of monetary assets and liabilities due to an exchange rate change | $ 9,570 | ||||||||||||
Asset impairment charges | $ 11,447 | $ 4,000 | $ 500 | $ 2,400 | $ 15,447 | $ 2,900 | 6,000 | ||||||
Cash and cash equivalents | 20,738 | 23,848 | 20,738 | 23,848 | 227,464 | ||||||||
Inventory | 251,511 | 280,877 | 251,511 | 280,877 | |||||||||
Property and equipment, net | $ 123,503 | $ 126,502 | 123,503 | 126,502 | |||||||||
Net investment in Venezuelan operations | 149 | ||||||||||||
Operating income (loss) | $ 169,062 | $ 169,664 | $ 116,294 | ||||||||||
Total earnings per share - diluted | $ 2.22 | $ (1.12) | $ 0.33 | $ 0.22 | $ 1.30 | $ 2.07 | $ 1 | $ 0.68 | $ 1.63 | $ 5.04 | $ 3.52 | ||
Before Adjustment | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Net investment in Venezuelan operations | $ 18,882 | ||||||||||||
Adjustments | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Net investment in Venezuelan operations | (18,733) | ||||||||||||
Venezuela | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Asset impairment charges | 9,160 | ||||||||||||
SG&A | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Cash and cash equivalents | 10 | ||||||||||||
Other net assets, principally working capital other than inventory | (164) | ||||||||||||
Property and equipment, net | 3 | ||||||||||||
SG&A | Before Adjustment | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Cash and cash equivalents | 1,302 | ||||||||||||
Other net assets, principally working capital other than inventory | 8,120 | ||||||||||||
Property and equipment, net | 82 | ||||||||||||
SG&A | Adjustments | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Cash and cash equivalents | (1,292) | ||||||||||||
Other net assets, principally working capital other than inventory | (8,284) | ||||||||||||
Property and equipment, net | (79) | ||||||||||||
Cost of goods sold | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Inventory | 300 | ||||||||||||
Cost of goods sold | Before Adjustment | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Inventory | 9,378 | ||||||||||||
Cost of goods sold | Adjustments | |||||||||||||
Change in Accounting Estimate | |||||||||||||
Inventory | $ (9,078) |
Discontinued Operation (Details
Discontinued Operation (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 |
Assets | ||||
Receivables | $ 512 | |||
Inventory | 8,245 | |||
Prepaid expenses and other current assets | 2,031 | |||
Property and equipment, net | 8,433 | |||
Goodwill | 96,609 | |||
Other intangible assets, net | 83,485 | |||
Other assets, net | 599 | |||
Assets of discontinued operations | 199,914 | |||
Liabilities | ||||
Accounts payable, principally trade | 6,111 | |||
Accrued expenses and other current liabilities | 5,862 | |||
Other liabilities, noncurrent | 4,319 | |||
Liabilities of discontinued operations | 16,292 | |||
Results of operations associated with discontinued operations | ||||
Sales revenue, net | $ 99,013 | 130,543 | $ 153,126 | |
Cost of goods sold | 28,744 | 37,632 | 42,855 | |
Gross profit | 70,269 | 92,911 | 110,271 | |
Selling, general and administrative expense ("SG&A") | 72,419 | 88,742 | 95,950 | |
Asset impairment charges | 132,297 | 9,500 | ||
Restructuring charges | 621 | |||
Operating income (loss) | (135,068) | (5,331) | 14,321 | |
Gain on sale before income tax | 1,624 | |||
Interest expense | (367) | (497) | (515) | |
Income (loss) from discontinued operations before tax | (133,811) | (5,828) | 13,806 | |
Income tax benefit (expense) | (49,375) | (2,207) | 5,569 | |
Income (loss) from discontinued operations | (84,436) | (3,621) | $ 8,237 | |
Goodwill impairment charges | 96,600 | |||
Intangible impairment charges | 35,700 | 9,500 | ||
Asset impairment charges net of tax | $ 83,500 | $ 5,900 | ||
Discontinued Operations | Healthy Directions LLC | ||||
Discontinued Operations | ||||
Purchase price from sale | $ 46,000 | |||
Supplemental payment with a target value | $ 25,000 | |||
Threshold period for providing transition services | 18 months | |||
Results of operations associated with discontinued operations | ||||
Period of operating results prior to divestiture | 9 months 18 days |
Property and Equipment - Summar
Property and Equipment - Summary of PP&E (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Feb. 28, 2018 | May 31, 2017 | Feb. 28, 2017 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
PROPERTY AND EQUIPMENT | |||||||
Property and equipment, gross | $ 238,705 | $ 228,655 | $ 238,705 | $ 228,655 | |||
Less accumulated depreciation | (115,202) | (102,153) | (115,202) | (102,153) | |||
Property and equipment, net | 123,503 | 126,502 | 123,503 | 126,502 | |||
Depreciation expense | 14,900 | 14,200 | $ 13,400 | ||||
Rent expense related to operating leases | 5,500 | 5,300 | 5,100 | ||||
Asset impairment charges | 11,447 | $ 4,000 | 500 | $ 2,400 | 15,447 | 2,900 | 6,000 |
Cost of goods sold | |||||||
PROPERTY AND EQUIPMENT | |||||||
Depreciation expense | 3,700 | 4,600 | 4,300 | ||||
SG&A | |||||||
PROPERTY AND EQUIPMENT | |||||||
Property and equipment, net | 3 | ||||||
Depreciation expense | 11,200 | 9,600 | 9,100 | ||||
Land | |||||||
PROPERTY AND EQUIPMENT | |||||||
Property and equipment, gross | 12,800 | 12,800 | 12,800 | 12,800 | |||
Building and improvements | |||||||
PROPERTY AND EQUIPMENT | |||||||
Property and equipment, gross | 106,870 | 106,648 | $ 106,870 | 106,648 | |||
Building and improvements | Minimum | |||||||
PROPERTY AND EQUIPMENT | |||||||
Estimated useful life | 3 years | ||||||
Building and improvements | Maximum | |||||||
PROPERTY AND EQUIPMENT | |||||||
Estimated useful life | 40 years | ||||||
Computer, furniture and other equipment | |||||||
PROPERTY AND EQUIPMENT | |||||||
Property and equipment, gross | 79,657 | 72,444 | $ 79,657 | 72,444 | |||
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 | 33,466 | 31,157 | $ 33,466 | 31,157 | |||
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 | $ 5,912 | $ 5,606 | $ 5,912 | $ 5,606 | |||
Venezuela | |||||||
PROPERTY AND EQUIPMENT | |||||||
Asset impairment charges | $ 9,160 |
Accrued Expenses and Other Cu62
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Accrued Expenses and Other Current Liabilities | ||
Accrued compensation, benefits and payroll taxes | $ 37,666 | $ 34,917 |
Accrued sales discounts and allowances | 28,311 | 26,867 |
Accrued warranty returns | 22,445 | 20,517 |
Accrued advertising | 25,324 | 23,747 |
Accrued legal fees and settlements | 17,243 | 16,908 |
Liability for uncertain tax positions | 1,079 | |
Other | 34,875 | 25,142 |
Total accrued expenses and other current liabilities | $ 165,864 | $ 148,098 |
Other Liabilities, Noncurrent63
Other Liabilities, Noncurrent (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Other Liabilities, Noncurrent | ||
Deferred compensation liability | $ 6,736 | $ 6,560 |
Liability for uncertain tax positions | 3,349 | 6,611 |
Other liabilities | 4,606 | 4,171 |
Total other liabilities, noncurrent | $ 14,691 | $ 17,342 |
Hydro Flask Acquisition (Detail
Hydro Flask Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 18, 2016 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 |
Assets | |||||
Goodwill | $ 602,320 | $ 602,320 | $ 602,320 | ||
Earnings per share: | |||||
Goodwill expected to be deductible for income tax purposes | 113,000 | $ 19,000 | 113,000 | ||
Minimum | |||||
Assets | |||||
Useful life | 4 years | ||||
Maximum | |||||
Assets | |||||
Useful life | 30 years | ||||
Patent | |||||
Assets | |||||
Useful life | 14 years | ||||
Hydro Flask | |||||
Acquisitions | |||||
Purchase price | $ 209,300 | ||||
Acquisition-related expenses incurred | 700 | ||||
Assets | |||||
Receivables | 7,955 | ||||
Inventory | 6,243 | ||||
Prepaid expenses and other current assets | 336 | ||||
Property and equipment | 1,108 | ||||
Goodwill | 116,053 | ||||
Subtotal - assets | 215,195 | ||||
Liabilities | |||||
Accounts payable | 2,275 | ||||
Accrued expenses | 3,662 | ||||
Subtotal - liabilities | 5,937 | ||||
Net assets recorded | $ 209,258 | ||||
Fair value key assumptions | |||||
Discount rate (as a percent) | 12.30% | ||||
Impact of the acquisition on the consolidated condensed statements of income | |||||
Sales revenue, net | 107,005 | ||||
Net income | $ 27,902 | ||||
Earnings per share: | |||||
Basic (in dollars per share) | $ 1.01 | ||||
Diluted (in dollars per share) | $ 1 | ||||
Supplemental pro forma information | |||||
Sales revenue, net | 1,410,171 | $ 1,450,530 | |||
Net income | $ 144,947 | $ 105,669 | |||
Earnings per share: | |||||
Basic (in dollars per share) | $ 5.27 | $ 3.74 | |||
Diluted (in dollars per share) | $ 5.20 | $ 3.68 | |||
Hydro Flask | Customer relationships | |||||
Acquisitions | |||||
Expected weighted average lives of acquired finite-lived intangible assets | 24 years | ||||
Assets | |||||
Finite-lived intangible assets | $ 14,200 | ||||
Fair value key assumptions | |||||
Customer attrition rates (as a percent) | 4.00% | ||||
Hydro Flask | Technology assets | |||||
Acquisitions | |||||
Expected weighted average lives of acquired finite-lived intangible assets | 10 years | ||||
Assets | |||||
Finite-lived intangible assets | $ 10,300 | ||||
Fair value key assumptions | |||||
Royalty rates (as a percent) | 2.00% | ||||
Hydro Flask | Technology assets | Minimum | |||||
Assets | |||||
Average life cycle of underlying products | 7 years | ||||
Hydro Flask | Technology assets | Maximum | |||||
Assets | |||||
Average life cycle of underlying products | 15 years | ||||
Hydro Flask | Trade names | |||||
Assets | |||||
Indefinite-lived intangible assets | $ 59,000 | ||||
Fair value key assumptions | |||||
Royalty rates (as a percent) | 6.00% |
Goodwill and Intangible Asset65
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Changes in Goodwill | |||
Cumulative Goodwill Impairments, balance at the beginning of the period | $ (46,490) | $ (46,490) | |
Cumulative Goodwill Impairments, balance at the end of the period | (46,490) | (46,490) | $ (46,490) |
Goodwill Net Book Value | 602,320 | 602,320 | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | (167,354) | (148,673) | |
Goodwill and intangible assets | |||
Gross Carrying Amount, balance at the beginning of the period | 1,133,487 | 936,111 | |
Additions | 1,212 | 200,565 | |
Impairments | (15,447) | (2,900) | (6,000) |
Acquisition and Retirement Adjustments | (173) | (289) | |
Gross Carrying Amount, balance at the end of the period | 1,119,079 | 1,133,487 | 936,111 |
Net Book Value | 905,235 | 938,324 | |
Housewares | |||
Changes in Goodwill | |||
Goodwill Gross Carrying Amount, balance at the beginning of the period | 282,056 | 166,132 | |
Goodwill Acquisition and Retirement Adjustments | (129) | ||
Goodwill Gross Carrying Amount, balance at the end of the period | 282,056 | 282,056 | 166,132 |
Goodwill Net Book Value | 282,056 | 282,056 | |
Goodwill Additions | 116,053 | ||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | (17,530) | (15,476) | |
Goodwill and intangible assets | |||
Gross Carrying Amount, balance at the beginning of the period | 456,649 | 256,780 | |
Additions | 607 | 200,093 | |
Acquisition and Retirement Adjustments | (173) | (224) | |
Gross Carrying Amount, balance at the end of the period | 457,084 | 456,649 | 256,780 |
Net Book Value | $ 439,554 | $ 441,173 | |
Housewares | Other intangible assets | |||
Goodwill and intangible assets | |||
Useful life | 10 years 8 months 12 days | 11 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 | $ 40,393 | $ 15,448 | |
Intangible assets - finite-lived, Additions | 607 | 25,040 | |
Intangible assets - finite-lived, Acquisition and Retirement Adjustments | (173) | (95) | |
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 40,828 | 40,393 | 15,448 |
Intangible assets - finite-lived, Accumulated Amortization | (17,530) | (15,476) | |
Intangible assets - finite-lived, Net Book Value | 23,298 | 24,917 | |
Housewares | Trademarks | |||
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the beginning of the period | 134,200 | 75,200 | |
Intangible assets - indefinite-lived, Additions | 59,000 | ||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | 134,200 | 134,200 | 75,200 |
Health and Home | |||
Changes in Goodwill | |||
Goodwill Gross Carrying Amount, balance at the beginning of the period | 284,913 | 284,913 | |
Goodwill Gross Carrying Amount, balance at the end of the period | 284,913 | 284,913 | 284,913 |
Goodwill Net Book Value | 284,913 | 284,913 | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | (92,428) | (81,327) | |
Goodwill and intangible assets | |||
Gross Carrying Amount, balance at the beginning of the period | 478,595 | 478,188 | |
Additions | 605 | 472 | |
Acquisition and Retirement Adjustments | (65) | ||
Gross Carrying Amount, balance at the end of the period | 479,199 | 478,595 | 478,188 |
Net Book Value | 386,771 | 397,268 | |
Health and Home | Licenses | |||
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | 15,300 | 15,300 | |
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 15,300 | 15,300 | 15,300 |
Intangible assets - finite-lived, Accumulated Amortization | $ (15,300) | $ (15,300) | |
Health and Home | Other intangible assets | |||
Goodwill and intangible assets | |||
Useful life | 4 years | 5 years | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | $ 116,982 | $ 116,575 | |
Intangible assets - finite-lived, Additions | 605 | 472 | |
Intangible assets - finite-lived, Acquisition and Retirement Adjustments | (65) | ||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 117,586 | 116,982 | 116,575 |
Intangible assets - finite-lived, Accumulated Amortization | (77,128) | (66,027) | |
Intangible assets - finite-lived, Net Book Value | 40,458 | 50,955 | |
Health and Home | Trademarks | |||
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the beginning of the period | 54,000 | 54,000 | |
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | 54,000 | 54,000 | 54,000 |
Health and Home | Licenses | |||
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the beginning of the period | 7,400 | 7,400 | |
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | 7,400 | 7,400 | 7,400 |
Beauty | |||
Goodwill and intangible assets | |||
Non-cash indefinite-lived intangible assets impairment charges | 15,400 | 2,900 | 6,000 |
Non-cash indefinite-lived intangible assets impairment charges, net of tax | 13,800 | 2,500 | 5,300 |
Changes in Goodwill | |||
Goodwill Gross Carrying Amount, balance at the beginning of the period | 81,841 | 81,841 | |
Cumulative Goodwill Impairments, balance at the beginning of the period | (46,490) | (46,490) | |
Goodwill Gross Carrying Amount, balance at the end of the period | 81,841 | 81,841 | 81,841 |
Cumulative Goodwill Impairments, balance at the end of the period | (46,490) | (46,490) | (46,490) |
Goodwill Net Book Value | 35,351 | 35,351 | |
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Impairments | (15,400) | (2,900) | (6,000) |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Accumulated Amortization | (57,396) | (51,870) | |
Goodwill and intangible assets | |||
Gross Carrying Amount, balance at the beginning of the period | 198,243 | 201,143 | |
Impairments | (15,447) | (2,900) | |
Gross Carrying Amount, balance at the end of the period | 182,796 | 198,243 | 201,143 |
Net Book Value | $ 78,910 | $ 99,883 | |
Beauty | Trademarks | |||
Goodwill and intangible assets | |||
Useful life | 10 years 7 months 6 days | 11 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 | $ 150 | |
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 150 | 150 | 150 |
Intangible assets - finite-lived, Accumulated Amortization | (97) | (92) | |
Intangible assets - finite-lived, Net Book Value | $ 53 | $ 58 | |
Beauty | Licenses | |||
Goodwill and intangible assets | |||
Useful life | 4 years 9 months 18 days | 5 years 9 months 18 days | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | $ 13,696 | $ 13,696 | |
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 13,696 | 13,696 | 13,696 |
Intangible assets - finite-lived, Accumulated Amortization | (12,166) | (11,849) | |
Intangible assets - finite-lived, Net Book Value | $ 1,530 | $ 1,847 | |
Beauty | Other intangible assets | |||
Goodwill and intangible assets | |||
Useful life | 2 months 12 days | 1 year 2 months 12 days | |
Changes in intangible assets - finite-lived | |||
Intangible assets - finite-lived, Gross Carrying Amount, balance at the beginning of the period | $ 46,402 | $ 46,402 | |
Intangible assets - finite-lived, Gross Carrying Amount, balance at the end of the period | 46,402 | 46,402 | 46,402 |
Intangible assets - finite-lived, Accumulated Amortization | (45,133) | (39,929) | |
Intangible assets - finite-lived, Net Book Value | 1,269 | 6,473 | |
Beauty | Trademarks | |||
Goodwill and intangible assets | |||
Non-cash indefinite-lived intangible assets impairment charges | (15,447) | 2,900 | |
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the beginning of the period | 45,854 | 48,754 | |
Intangible assets - indefinite-lived, Impairments | 15,447 | (2,900) | |
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | 30,407 | 45,854 | 48,754 |
Beauty | Licenses | |||
Changes in intangible assets - indefinite-lived | |||
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the beginning of the period | 10,300 | 10,300 | |
Intangible assets - indefinite-lived, Gross Carrying Amount, balance at the end of the period | $ 10,300 | $ 10,300 | $ 10,300 |
Goodwill and Intangible Asset66
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Goodwill and Intangible Assets | |||
Aggregate Amortization Expense | $ 18,854 | $ 22,024 | $ 21,514 |
Estimated Amortization Expense | |||
Fiscal 2,019 | 14,018 | ||
Fiscal 2,020 | 12,428 | ||
Fiscal 2,021 | 10,384 | ||
Fiscal 2,022 | 4,078 | ||
Fiscal 2,023 | $ 3,995 |
Share-Based Compensation Plan67
Share-Based Compensation Plans (Details) $ / shares in Units, $ in Thousands | Aug. 24, 2008shares | Feb. 28, 2018USD ($)item$ / sharesshares | Feb. 28, 2017USD ($)$ / sharesshares | Feb. 29, 2016USD ($)$ / sharesshares | Feb. 28, 2015shares |
Share-based compensation plans | |||||
Number of active share-based compensation plans | item | 3 | ||||
Options granted (in shares) | 0 | ||||
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 | (1,160,556) | ||||
Less restricted share awards previously vested and settled | (638,565) | ||||
Subtotal | 1,950,879 | ||||
Less maximum RSU's issuable upon vesting | (136,253) | ||||
Less estimated maximum PSU's issuable upon vesting | (348,126) | ||||
Shares available for issuance | 1,466,500 | ||||
Number of shares available for future issue under the plan | 1,466,500 | ||||
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 | 90,517 | ||||
Number of shares available for future issue under the plan | 90,517 | ||||
Restricted stock (RSA) | |||||
Restricted stock disclosure | |||||
Shares, Issued | 84,483 | ||||
Restricted stock (RSA) | 2008 Stock Incentive Plan | |||||
Share-based compensation plans | |||||
Grant date fair value (in dollars per share) | $ / shares | $ 89.12 | ||||
Number of awards vested (in shares) | 2,000 | ||||
Restricted stock (RSA) | 2008 Directors Plan | |||||
Share-based compensation plans | |||||
Fair value for grants (in dollars per share) | $ / shares | $ 92.95 | ||||
Number of awards granted (in shares) | 5,658 | 5,285 | 5,649 | ||
Grant date fair value (in dollars per share) | $ / shares | $ 92.98 | $ 87.04 | |||
Employee stock purchase plan | |||||
Share-based compensation plans | |||||
Number of shares of common stock covered for issuance under share-based compensation plan | 350,000 | ||||
Shares of common stock acquired by plan participants | 16,098 | 32,110 | 28,433 | ||
Restricted stock disclosure | |||||
Shares originally authorized | 350,000 | ||||
Shares available for issuance | 50,444 | ||||
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% | ||||
Price of common stock acquired by plan participants (in dollars per share) | $ / shares | $ 76.76 | $ 76.77 | $ 67.77 | ||
Number of shares available for future issue under the plan | 50,444 | ||||
Stock Option Officers Employees and Consultants | |||||
Share-based compensation plans | |||||
Options granted (in shares) | 2,000 | 186,000 | |||
Fair value for grants (in dollars per share) | $ / shares | $ 28.74 | $ 28.82 | |||
Options outstanding | 300,000 | 448,000 | 649,000 | 768,000 | |
Stock Option Officers Employees and Consultants | 2008 Stock Incentive Plan | |||||
Share-based compensation plans | |||||
Options outstanding | 298,602 | ||||
Stock Option Officers Employees and Consultants | Certain officers and employees | 1998 Plan | |||||
Share-based compensation plans | |||||
Options outstanding | 1,200 | ||||
Restricted Stock Units (RSU) | |||||
Share-based compensation plans | |||||
Number of awards granted (in shares) | 262,000 | 162,000 | 95,000 | ||
Grant date fair value (in dollars per share) | $ / shares | $ 96.44 | $ 96.90 | $ 76.62 | ||
Number of awards vested (in shares) | 53,000 | 0 | |||
Restricted stock disclosure | |||||
Less restricted share awards previously vested and settled | 192,002 | 15,643 | |||
Restricted Stock Units (RSU) | CEO and certain members of management team | 2008 Stock Incentive Plan | |||||
Share-based compensation plans | |||||
Number of awards granted (in shares) | 82,356 | 92,329 | 29,932 | ||
Grant date fair value (in dollars per share) | $ / shares | $ 95.36 | $ 96.74 | $ 76.62 | ||
Performance Restricted Stock Units (PSU) | 2008 Stock Incentive Plan | |||||
Share-based compensation plans | |||||
Number of awards granted (in shares) | 140,658 | 139,846 | 130,608 | ||
Grant date fair value (in dollars per share) | $ / shares | $ 96.52 | $ 97.12 | $ 76.62 | ||
Restricted stock disclosure | |||||
Performance period (in years) | 3 years | ||||
SG&A | |||||
SHARE-BASED PAYMENT EXPENSE | |||||
Share-based compensation expense | $ | $ 15,279 | $ 14,047 | $ 7,350 | ||
Less income tax benefits | $ | (1,669) | (1,762) | (753) | ||
Share-based payment expense, net of income tax benefits | $ | $ 13,610 | $ 12,285 | $ 6,597 | ||
Continuing operations earnings per share impact of share-based compensation expense: | |||||
Basic (in dollars per share) | $ / shares | $ 0.50 | $ 0.45 | $ 0.23 | ||
Diluted (in dollars per share) | $ / shares | $ 0.50 | $ 0.44 | $ 0.23 | ||
SG&A | Share-based compensation | Directors | |||||
SHARE-BASED PAYMENT EXPENSE | |||||
Share-based compensation expense | $ | $ 750 | $ 700 | $ 700 | ||
SG&A | Performance-based and other stock awards | |||||
SHARE-BASED PAYMENT EXPENSE | |||||
Share-based compensation expense | $ | 12,631 | 10,243 | 3,235 | ||
SG&A | Employee stock purchase plan | |||||
SHARE-BASED PAYMENT EXPENSE | |||||
Share-based compensation expense | $ | 264 | 490 | 552 | ||
SG&A | Stock Option Officers Employees and Consultants | |||||
SHARE-BASED PAYMENT EXPENSE | |||||
Share-based compensation expense | $ | $ 1,634 | $ 2,614 | $ 2,863 | ||
Minimum | Stock Option Officers Employees and Consultants | 2008 Stock Incentive Plan | |||||
Share-based compensation plans | |||||
Vesting period | 4 years | ||||
Term of award | 7 years | ||||
Restricted stock disclosure | |||||
Vesting period | 4 years | ||||
Minimum | Stock Option Officers Employees and Consultants | Certain officers and employees | 1998 Plan | |||||
Share-based compensation plans | |||||
Vesting period | 4 years | ||||
Term of award | 7 years | ||||
Restricted stock disclosure | |||||
Vesting period | 4 years | ||||
Maximum | Stock Option Officers Employees and Consultants | 2008 Stock Incentive Plan | |||||
Share-based compensation plans | |||||
Vesting period | 5 years | ||||
Term of award | 10 years | ||||
Restricted stock disclosure | |||||
Vesting period | 5 years | ||||
Maximum | Stock Option Officers Employees and Consultants | Certain officers and employees | 1998 Plan | |||||
Share-based compensation plans | |||||
Vesting period | 5 years | ||||
Term of award | 10 years | ||||
Restricted stock disclosure | |||||
Vesting period | 5 years | ||||
Maximum | Restricted Stock Units (RSU) | CEO and certain members of management team | 2008 Stock Incentive Plan | |||||
Share-based compensation plans | |||||
Vesting period | 4 years | ||||
Restricted stock disclosure | |||||
Vesting period | 4 years |
Share-Based Compensation Plan68
Share-Based Compensation Plans - Unrecognized share based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
UNRECOGNIZED SHARE-BASED COMPENSATION EXPENSE | |||
Grants (in shares) | 0 | ||
Stock Option Officers Employees and Consultants | |||
UNRECOGNIZED SHARE-BASED COMPENSATION EXPENSE | |||
Unrecognized Compensation Expense | $ 1,384 | ||
Weighted Average Period of Recognition | 16 months 27 days | ||
Grants (in shares) | 2,000 | 186,000 | |
Restricted Stock Units and Performance Stock Units | |||
UNRECOGNIZED SHARE-BASED COMPENSATION EXPENSE | |||
Unrecognized Compensation Expense | $ 12,220 | ||
Weighted Average Period of Recognition | 23 months 24 days |
Share-Based Compensation Plan69
Share-Based Compensation Plans - Fair value of stock option grants (Details) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Minimum | ||
Assumptions used for fair value of stock options granted | ||
Range of expected terms used | 4 years 1 month 6 days | |
Maximum | ||
Assumptions used for fair value of stock options granted | ||
Range of expected terms used | 4 years 4 months 24 days | |
Stock Option Officers Employees and Consultants | ||
Assumptions used for fair value of stock options granted | ||
Range of risk free interest rates used (as a percent) | 1.20% | |
Range of risk free interest rates used, minimum (as a percent) | 0.90% | |
Range of risk free interest rates used, maximum (as a percent) | 1.50% | |
Expected dividend rate (as a percent) | 0.00% | 0.00% |
Weighted average volatility rate (as a percent) | 33.40% | 39.10% |
Range of expected volatility rates used (as a percent) | 33.40% | |
Range of expected volatility rates used, minimum (as a percent) | 35.90% | |
Range of expected volatility rates used, maximum (as a percent) | 39.70% | |
Range of expected terms used | 4 years 1 month 6 days |
Share-Based Compensation Plan70
Share-Based Compensation Plans - Summary of stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2015 | |
Options | ||||
Grants (in shares) | 0 | |||
Stock Option Officers Employees and Consultants | ||||
Options | ||||
Outstanding at the beginning of the period (in shares) | 448,000 | 649,000 | 768,000 | |
Grants (in shares) | 2,000 | 186,000 | ||
Exercises (in shares) | (126,000) | (170,000) | (178,000) | |
Forfeitures / expirations (in shares) | (22,000) | (33,000) | (127,000) | |
Outstanding at the end of the period (in shares) | 300,000 | 448,000 | 649,000 | 768,000 |
Exercisable at the end of the period (in shares) | 175,000 | |||
Weighted Average Exercise price (per share) | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 57.41 | $ 53.94 | $ 42.76 | |
Grants (in dollars per share) | 102.04 | 88.17 | ||
Exercises (in dollars per share) | 52.28 | 43.07 | 37.86 | |
Forfeitures / expirations (in dollars per share) | 72.37 | 65.68 | 59.01 | |
Outstanding at the end of the period (in dollars per share) | 58.35 | 57.41 | 53.94 | $ 42.76 |
Exercisable at the end of the period (in dollars per share) | 49.18 | |||
Weighted Average Grant Date Fair Value (per share) | ||||
Outstanding at the beginning of the period (in dollars per share) | 20.54 | 19.52 | 16.28 | |
Grants (in dollars per share) | 28.74 | 28.82 | ||
Outstanding at the end of the period (in dollars per share) | 32.04 | $ 20.54 | $ 19.52 | $ 16.28 |
Exercisable at the end of the period (in dollars per share) | $ 41.11 | |||
Weighted Average Remaining Contractual Term | ||||
Weighted Average Remaining Contractual Term (in years) | 4 years 3 months 18 days | 5 years | 6 years 1 month 6 days | 6 years 7 months 6 days |
Exercisable at the end of the period | 3 years 10 months 24 days | |||
Intrinsic Value | ||||
Intrinsic value, options outstanding | $ 9,606 | $ 18,097 | $ 26,847 | $ 26,008 |
Intrinsic value, options exercised | 5,400 | $ 9,152 | $ 9,480 | |
Intrinsic value, options exercisable | $ 7,198 |
Share-Based Compensation Plan71
Share-Based Compensation Plans - Non-vested stock option activity (Details) - $ / shares | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Non-Vested Options | |||
Grants (in shares) | 0 | ||
Stock Option Officers Employees and Consultants | |||
Non-Vested Options | |||
Outstanding at the beginning of the period (in shares) | 280,000 | 521,000 | 674,000 |
Grants (in shares) | 2,000 | 186,000 | |
Vested or forfeited (in shares) | (155,000) | (243,000) | (339,000) |
Outstanding at the end of the period (in shares) | 125,000 | 280,000 | 521,000 |
Weighted Average Grant Date Fair Value (per share) | |||
Outstanding at the beginning of the period (in dollars per share) | $ 22.48 | $ 20.81 | $ 16.98 |
Grants (in dollars per share) | 28.74 | 28.82 | |
Vested or forfeited (in dollars per share) | 25.02 | 18.95 | 17.59 |
Outstanding at the end of the period (in dollars per share) | $ 19.31 | $ 22.48 | $ 20.81 |
Share-Based Compensation Plan72
Share-Based Compensation Plans - Restricted stock unit activity (Details) - Restricted Stock Units (RSU) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2015 | |
Shares | ||||
Outstanding at the beginning of the period (in shares) | 322,000 | 213,000 | 118,000 | |
Granted/Earned (in shares) | 262,000 | 162,000 | 95,000 | |
Vested (in shares) | (53,000) | 0 | ||
Vested or forfeited (in shares) | (274,000) | |||
Outstanding at the end of the period (in shares) | 310,000 | 322,000 | 213,000 | |
Weighted Average Grant Date Fair Value (per share) | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 81.19 | $ 66.50 | $ 58.35 | |
Grant date fair value (in dollars per share) | 96.44 | 96.90 | 76.62 | |
Vested in period, fair value at award date (in dollars per share) | 70.14 | |||
Vested or forfeited (in dollars per share) | 78.71 | |||
Outstanding at the end of the period (in dollars per share) | $ 90.05 | $ 81.19 | $ 66.50 | |
Fair Value Outstanding | ||||
Fair value outstanding | $ 27,944 | $ 31,418 | $ 20,311 | $ 9,041 |
Vested and settled | (192,002) | (15,643) | ||
Fair value of RSU vested and settled | $ 62.88 | $ 60.28 |
Defined Contribution Plans (Det
Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Defined Contribution Plans | |||
Total matching contributions to saving plans | $ 3.9 | $ 3.2 | $ 3.1 |
Repurchase of Helen of Troy C74
Repurchase of Helen of Troy Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | May 10, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 |
Repurchase of common stock | ||||
Amount of shares authorized for purchase | $ 400,000 | |||
Period for stock repurchase | 3 years | |||
Remaining share repurchase amount - prior program | $ 82,000 | |||
Remaining share repurchase amount | $ 328,000 | |||
Common stock repurchased and retired (in shares) | 75,785 | 6,286 | 117,294 | |
Common stock repurchased and retired, total cost or aggregate market value | $ 7,258 | $ 595 | $ 6,411 | |
Average price per share (in dollars per share) | $ 95.77 | $ 94.61 | $ 54.66 | |
Open market or tender offer | ||||
Repurchase of common stock | ||||
Common stock repurchased and retired (in shares) | 717,300 | 922,731 | 1,126,796 | |
Common stock repurchased and retired, total cost or aggregate market value | $ 65,795 | $ 75,000 | $ 100,000 | |
Average price per share (in dollars per share) | $ 91.73 | $ 81.28 | $ 88.75 |
Restructuring Plan (Details)
Restructuring Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Restructuring Plan | ||
Restructuring charges | $ 1,857 | |
Cash restructuring payments | 1,300 | |
Restructuring liability | 500 | |
Project Refuel | ||
Restructuring Plan | ||
Targeted annualized profit improvement | 8,000 | |
Forecast | Minimum | Project Refuel | ||
Restructuring Plan | ||
Restructuring charges | $ 3,200 | |
Forecast | Maximum | Project Refuel | ||
Restructuring Plan | ||
Restructuring charges | $ 4,800 | |
Beauty | ||
Restructuring Plan | ||
Restructuring charges | $ 1,637 |
Other Commitments and Conting76
Other Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018item | Jun. 30, 2016USD ($) | Feb. 28, 2018USD ($) | Feb. 29, 2016USD ($) | Feb. 28, 2017USD ($) | Mar. 31, 2016item | |
Litigation | ||||||
Number of verdicts of infringement of patents reversed | item | 1 | |||||
Contractual obligations and commercial commitments | ||||||
Total | $ 681,389 | |||||
2019, 1 year | 232,684 | |||||
2020, 2 years | 39,795 | |||||
2021, 3 years | 36,657 | |||||
2022, 4 years | 298,622 | |||||
2023, 5 years | 20,706 | |||||
After 5 years | 52,925 | |||||
Provision for uncertain tax position | 3,349 | $ 6,611 | ||||
Thermometer Patent Litigation | Litigation | ||||||
Litigation | ||||||
Number of models | item | 2 | |||||
Charge including legal fees and other related expenses | $ 17,800 | |||||
Charge including legal fees and other related expenses, after tax | $ 17,800 | |||||
Amount of additional pre-judgment compensation | $ 1,500 | |||||
Capital spending commitments | ||||||
Contractual obligations and commercial commitments | ||||||
Total | 1,080 | |||||
2019, 1 year | 1,080 | |||||
Long-term purchase commitments | ||||||
Contractual obligations and commercial commitments | ||||||
Total | 1,033 | |||||
2019, 1 year | 1,033 | |||||
Open purchase orders | ||||||
Contractual obligations and commercial commitments | ||||||
Total | 182,603 | |||||
2019, 1 year | 182,603 | |||||
Employment Contracts | CEO | ||||||
Other commitments and contingencies | ||||||
Aggregate commitment | $ 7,000 | |||||
Employment contract term | 2 years | |||||
Fixed rate debt | ||||||
Contractual obligations and commercial commitments | ||||||
Total | $ 293,707 | |||||
2019, 1 year | 1,900 | |||||
2020, 2 years | 1,900 | |||||
2021, 3 years | 1,900 | |||||
2022, 4 years | 271,300 | |||||
2023, 5 years | 1,900 | |||||
After 5 years | 14,807 | |||||
Long-term incentive plan payouts | ||||||
Contractual obligations and commercial commitments | ||||||
Total | 11,840 | |||||
2019, 1 year | 5,412 | |||||
2020, 2 years | 4,786 | |||||
2021, 3 years | 1,642 | |||||
Interest on floating rate debt | ||||||
Contractual obligations and commercial commitments | ||||||
Total | 29,011 | |||||
2019, 1 year | 7,625 | |||||
2020, 2 years | 7,569 | |||||
2021, 3 years | 7,514 | |||||
2022, 4 years | 5,873 | |||||
2023, 5 years | 429 | |||||
After 5 years | 1 | |||||
Minimum royalty payments | ||||||
Contractual obligations and commercial commitments | ||||||
Total | 55,359 | |||||
2019, 1 year | 12,490 | |||||
2020, 2 years | 12,972 | |||||
2021, 3 years | 12,912 | |||||
2022, 4 years | 9,071 | |||||
2023, 5 years | 7,914 | |||||
Advertising and promotional | ||||||
Contractual obligations and commercial commitments | ||||||
Total | 39,071 | |||||
2019, 1 year | 14,304 | |||||
2020, 2 years | 6,298 | |||||
2021, 3 years | 6,411 | |||||
2022, 4 years | 6,527 | |||||
2023, 5 years | 5,531 | |||||
Operating leases | ||||||
Contractual obligations and commercial commitments | ||||||
Total | 67,685 | |||||
2019, 1 year | 6,237 | |||||
2020, 2 years | 6,270 | |||||
2021, 3 years | 6,278 | |||||
2022, 4 years | 5,851 | |||||
2023, 5 years | 4,932 | |||||
After 5 years | $ 38,117 |
Long-Term Debt - Schedule (Deta
Long-Term Debt - Schedule (Details) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018USD ($)item | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) | |
Long-term debt | |||
Total long-term debt | $ 289,869 | $ 485,615 | |
Less current maturities of long-term debt | (1,884) | (24,404) | |
Long-term debt, excluding current maturities | 287,985 | 461,211 | |
Principal payment made | 25,700 | 23,800 | $ 21,900 |
MBFC Loan | |||
Long-term debt | |||
Face amount | 37,600 | ||
Total long-term debt | 24,219 | 29,903 | |
Outstanding principal payable on March 1, 2018 | 1,900 | ||
Outstanding principal payable on March 1, 2019 | 1,900 | ||
Outstanding principal payable on March 1, 2020 | 1,900 | ||
Outstanding principal payable on March 1, 2021 | 1,900 | ||
Outstanding principal payable on March 1, 2022 | 1,900 | ||
Outstanding principal payable on March 1, 2023 | $ 14,800 | ||
MBFC Loan | Base Rate | |||
Long-term debt | |||
Margin (as a percent) | 1.00% | ||
MBFC Loan | LIBOR | |||
Long-term debt | |||
Margin (as a percent) | 2.00% | ||
Senior Notes | |||
Long-term debt | |||
Fixed interest rate (as a percentage) | 3.90% | ||
Total long-term debt | 19,763 | ||
Credit Agreement | |||
Long-term debt | |||
Maximum revolving commitment | $ 1,000,000 | ||
Number of alternative methods under which interest on borrowings accrue | item | 2 | ||
Amount available for borrowings | $ 723,500 | ||
Maximum amount of additional debt that can be incurred under debt covenants | 516,900 | ||
Maximum amount of additional debt that can be incurred in event a qualified acquisition is consummated | 692,100 | ||
Total long-term debt | 265,650 | 435,949 | |
Principal amount hedged | 100,000 | ||
Revolving loan | Credit Agreement | |||
Long-term debt | |||
Amount outstanding | 269,400 | ||
Letter of credit | Credit Agreement | |||
Long-term debt | |||
Amount outstanding | $ 7,100 | ||
Book value | |||
Long-term debt | |||
Long-term debt | 19,800 | ||
Fair Values | |||
Long-term debt | |||
Long-term debt | $ 20,100 |
Long-Term Debt - Interest rates
Long-Term Debt - Interest rates (Details) - Credit Agreement $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018USD ($)item | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) | |
Revolving Line of Credit | |||
Average borrowings outstanding | $ | $ 382,960 | $ 498,420 | $ 399,800 |
Average interest rates during each year (as a percent) | 2.70% | 2.20% | 1.60% |
Weighted average interest rates on borrowings outstanding at year end (as a percent) | 2.90% | 2.30% | 2.80% |
Number of prior quarters used in calculation of average borrowings outstanding | item | 4 | ||
Minimum | |||
Revolving Line of Credit | |||
Interest rate range during each year (as a percent) | 2.30% | 1.90% | 1.40% |
Maximum | |||
Revolving Line of Credit | |||
Interest rate range during each year (as a percent) | 4.80% | 4.30% | 4.00% |
Long-Term Debt - FV, Limit, Int
Long-Term Debt - FV, Limit, Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
INTEREST EXPENSE | |||
Interest and commitment fees | $ 13,084 | $ 13,745 | $ 9,941 |
Deferred finance costs | 887 | 706 | 651 |
Interest rate swap settlements, net | 54 | (11) | |
Cross-currency debt swap | (74) | (90) | |
Total interest expense | $ 13,951 | $ 14,361 | $ 10,581 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Beauty | |||
Assets measured at fair value on a non-recurring basis | |||
Non-cash impairment charges | $ 15,400 | $ 2,900 | $ 6,000 |
Non-cash impairment charges after tax | 13,800 | 2,500 | $ 5,300 |
Beauty | Trademarks | |||
Assets measured at fair value on a non-recurring basis | |||
Non-cash impairment charges | $ (15,447) | 2,900 | |
Fair Values | |||
Liabilities: | |||
Long-term debt | 20,100 | ||
Fair Values | Significant Other Observable Market Inputs (Level 2) | Discounted cash flow analysis | Fixed rate debt | |||
Fair value inputs | |||
Discount rate (as a percent) | 1.80% | ||
Recurring | Significant Other Observable Market Inputs (Level 2) | |||
Assets: | |||
Total assets | $ 4,230 | 4,878 | |
Liabilities: | |||
Total liabilities | 292,474 | 486,004 | |
Recurring | Significant Other Observable Market Inputs (Level 2) | Foreign currency contracts | |||
Assets: | |||
Derivative assets | 2,201 | 2,167 | |
Liabilities: | |||
Derivative liabilities | 2,606 | 47 | |
Recurring | Significant Other Observable Market Inputs (Level 2) | Interest Rate Swaps And Foreign Currency Contracts | |||
Assets: | |||
Derivative assets | 922 | ||
Recurring | Significant Other Observable Market Inputs (Level 2) | Fixed rate debt | |||
Liabilities: | |||
Long-term debt | 289,868 | 20,105 | |
Recurring | Significant Other Observable Market Inputs (Level 2) | Floating rate debt | |||
Liabilities: | |||
Long-term debt | 465,852 | ||
Recurring | Significant Other Observable Market Inputs (Level 2) | Money market accounts | |||
Assets: | |||
Cash and cash equivalents | $ 1,107 | $ 2,711 |
Fair Value - Other non-financia
Fair Value - Other non-financial assets (Details) - Other Non-financial Assets - Significant Unobservable Inputs (Level 3) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Fair value measurement on non-recurring basis using significant unobservable inputs (Level 3) | ||
Beginning balances | $ 938,324 | $ 762,878 |
Total gains/income (losses/expense): | ||
Included in net income - realized | (34,128) | (24,830) |
Acquired during the period | 1,212 | 200,565 |
Acquisition adjustments and retirements during the period | (173) | (289) |
Ending balances | $ 905,235 | $ 938,324 |
Financial Instruments and Ris82
Financial Instruments and Risk Management (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Foreign Currency Risk and Currency Exchange Uncertainties | |||||||||||
Charge from re-measurement of monetary assets and liabilities due to an exchange rate change | $ 9,570 | ||||||||||
Currency Exchange Uncertainties | |||||||||||
Sales revenue, net | $ 390,847 | $ 423,709 | $ 347,205 | $ 327,986 | $ 347,369 | $ 412,251 | $ 335,058 | $ 311,998 | $ 1,489,747 | $ 1,406,676 | 1,392,575 |
Operating income (loss) | 169,062 | $ 169,664 | 116,294 | ||||||||
SG&A | |||||||||||
Foreign Currency Risk and Currency Exchange Uncertainties | |||||||||||
Net foreign exchange gains (losses), including the impact of currency hedges and currency swaps | $ (3,100) | $ (3,100) | |||||||||
Net sales revenue | Geographic concentration | International operations - transactions denominated in foreign currencies | |||||||||||
Foreign Currency Risk and Currency Exchange Uncertainties | |||||||||||
Concentration risk percentage | 13.00% | 13.00% | 16.00% |
Financial Instruments and Ris83
Financial Instruments and Risk Management - Interest Rate Risk (Details) $ in Millions | Feb. 28, 2018USD ($) |
Senior Notes | |
Financial instruments and risk management | |
Fixed rate debt | $ 100 |
Interest rate (as a percent) | 3.90% |
Credit Agreement | |
Financial instruments and risk management | |
Floating rate debt | $ 269.4 |
Financial Instruments and Ris84
Financial Instruments and Risk Management - Derivative FV (Details) € in Thousands, £ in Thousands, $ in Thousands | Feb. 28, 2018GBP (£) | Feb. 28, 2018EUR (€) | Feb. 28, 2018USD ($) | Feb. 28, 2017GBP (£) | Feb. 28, 2017EUR (€) | Feb. 28, 2017USD ($) |
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Long-term debt | $ 289,869 | $ 485,615 | ||||
Senior Notes | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Long-term debt | 19,763 | |||||
Interest rate (as a percent) | 3.90% | 3.90% | 3.90% | |||
Prepaid Expenses and Other Current Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | $ 922 | 2,135 | ||||
Other Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 2,201 | 32 | ||||
Accrued Expenses and Other Current Liability | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | 1,833 | 47 | ||||
Other Liabilities, Non-current | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | 773 | |||||
Designated as hedging instruments | Prepaid Expenses and Other Current Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 922 | 1,430 | ||||
Designated as hedging instruments | Other Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 2,201 | 32 | ||||
Designated as hedging instruments | Accrued Expenses and Other Current Liability | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | 1,833 | 47 | ||||
Designated as hedging instruments | Foreign currency contracts | Sell | Euros | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Notional Amount | € | € 38,000 | € 27,500 | ||||
Designated as hedging instruments | Foreign currency contracts | Sell | Euros | Prepaid Expenses and Other Current Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 727 | |||||
Designated as hedging instruments | Foreign currency contracts | Sell | Euros | Other Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 102 | |||||
Designated as hedging instruments | Foreign currency contracts | Sell | Euros | Accrued Expenses and Other Current Liability | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | 1,320 | |||||
Designated as hedging instruments | Foreign currency contracts | Sell | Canadian Dollars | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Notional Amount | 27,750 | 26,000 | ||||
Designated as hedging instruments | Foreign currency contracts | Sell | Canadian Dollars | Prepaid Expenses and Other Current Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 378 | 155 | ||||
Designated as hedging instruments | Foreign currency contracts | Sell | Canadian Dollars | Other Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 101 | 32 | ||||
Designated as hedging instruments | Foreign currency contracts | Sell | Pounds | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Notional Amount | £ | £ 19,500 | £ 13,500 | ||||
Designated as hedging instruments | Foreign currency contracts | Sell | Pounds | Prepaid Expenses and Other Current Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 548 | |||||
Designated as hedging instruments | Foreign currency contracts | Sell | Pounds | Other Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 56 | |||||
Designated as hedging instruments | Foreign currency contracts | Sell | Pounds | Accrued Expenses and Other Current Liability | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | 513 | |||||
Designated as hedging instruments | Foreign currency contracts | Sell | Mexican Pesos | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Notional Amount | 20,000 | 59,600 | ||||
Designated as hedging instruments | Foreign currency contracts | Sell | Mexican Pesos | Prepaid Expenses and Other Current Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 5 | |||||
Designated as hedging instruments | Foreign currency contracts | Sell | Mexican Pesos | Accrued Expenses and Other Current Liability | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | 47 | |||||
Designated as hedging instruments | Interest rate swaps | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Notional Amount | 100,000 | |||||
Designated as hedging instruments | Interest rate swaps | Prepaid Expenses and Other Current Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 539 | |||||
Designated as hedging instruments | Interest rate swaps | Other Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | 1,942 | |||||
Not designated under hedge accounting | Other Liabilities, Non-current | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | 773 | |||||
Not designated under hedge accounting | Cross currency debt swaps | Euros | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Notional Amount | 5,280 | 10,000 | ||||
Not designated under hedge accounting | Cross currency debt swaps | Euros | Prepaid Expenses and Other Current Assets | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative assets | $ 705 | |||||
Not designated under hedge accounting | Cross currency debt swaps | Euros | Other Liabilities, Non-current | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | 208 | |||||
Not designated under hedge accounting | Cross currency debt swaps | Pounds | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Notional Amount | 6,395 | |||||
Not designated under hedge accounting | Cross currency debt swaps | Pounds | Other Liabilities, Non-current | ||||||
Fair values of derivative instruments in the consolidated balance sheet | ||||||
Derivative liabilities | $ 565 |
Financial Instruments and Ris85
Financial Instruments and Risk Management - Derivative tax effect (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Recognized in OCI (effective portion) | $ 4,239 | $ 2,205 |
Gain/ (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | 4,364 | 1,454 |
Gain/ (Loss) Recognized as Income | (1,459) | 589 |
Foreign currency contracts | Cash flow hedges | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | 4,364 | 1,454 |
Net loss currently reported in accumulated other comprehensive income, to be reclassified into income | (900) | |
Foreign currency contracts | Cash flow hedges | SG&A | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Recognized in OCI (effective portion) | 1,758 | 2,205 |
Interest rate swaps | Cash flow hedges | Interest expense | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Recognized in OCI (effective portion) | 2,481 | |
Gain/ (Loss) Recognized as Income | (54) | |
Cross currency debt swaps | SG&A | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Recognized as Income | (1,479) | 499 |
Cross currency debt swaps | Interest expense | ||
Pre-tax effect of derivative instruments | ||
Gain/ (Loss) Recognized as Income | $ 74 | $ 90 |
Financial Instruments and Ris86
Financial Instruments and Risk Management – Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Risks Inherent in Cash and Cash Equivalents | |||
Cash, interest and non-interest-bearing accounts - unrestricted | $ 19,631 | $ 21,138 | |
Money market funds | 1,107 | 2,711 | |
Cash and cash equivalents of continuing operations, ending balance | $ 20,738 | $ 23,848 | $ 227,464 |
Minimum | Cash | |||
Risks Inherent in Cash and Cash Equivalents | |||
Interest rate (as a percent) | 0.00% | 0.00% | |
Minimum | Money market accounts | |||
Risks Inherent in Cash and Cash Equivalents | |||
Interest rate (as a percent) | 0.00% | 18.00% | |
Maximum | Cash | |||
Risks Inherent in Cash and Cash Equivalents | |||
Interest rate (as a percent) | 35.00% | 35.00% | |
Maximum | Money market accounts | |||
Risks Inherent in Cash and Cash Equivalents | |||
Interest rate (as a percent) | 3.00% | 19.00% |
Accumulated Other Comprehensi87
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Components of accumulated other comprehensive loss | |||
Balance | $ 1,173 | $ 665 | |
Other comprehensive income before reclassification | 4,239 | 2,205 | |
Amounts reclassified out of accumulated other comprehensive income | (4,364) | (1,454) | |
Tax effects | (417) | (243) | $ (34) |
Other comprehensive income (loss) | (542) | 508 | 741 |
Balance | 631 | 1,173 | 665 |
Interest rate swaps | |||
Components of accumulated other comprehensive loss | |||
Other comprehensive income before reclassification | 2,481 | ||
Tax effects | (776) | ||
Other comprehensive income (loss) | 1,705 | ||
Balance | 1,705 | ||
Foreign currency contracts | |||
Components of accumulated other comprehensive loss | |||
Balance | 1,173 | 665 | |
Other comprehensive income before reclassification | 1,758 | 2,205 | |
Amounts reclassified out of accumulated other comprehensive income | (4,364) | (1,454) | |
Tax effects | 359 | (243) | |
Other comprehensive income (loss) | (2,247) | 508 | |
Balance | $ (1,074) | $ 1,173 | $ 665 |
Segment and Geographic Inform88
Segment and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Segment information | |||||||||||
Sales revenue, net | $ 390,847 | $ 423,709 | $ 347,205 | $ 327,986 | $ 347,369 | $ 412,251 | $ 335,058 | $ 311,998 | $ 1,489,747 | $ 1,406,676 | $ 1,392,575 |
Asset impairment charges | 11,447 | $ 4,000 | 500 | $ 2,400 | 15,447 | 2,900 | 6,000 | ||||
Restructuring charges | 1,857 | ||||||||||
Operating income | 169,062 | 169,664 | 116,294 | ||||||||
Identifiable assets | 1,621,320 | 1,813,096 | 1,621,320 | 1,813,096 | 1,631,931 | ||||||
Identifiable assets | 1,607,207 | 1,607,207 | |||||||||
Capital and intangible asset expenditures | 13,605 | 15,507 | 16,676 | ||||||||
Depreciation and amortization | 33,730 | 36,175 | 34,889 | ||||||||
Housewares | |||||||||||
Segment information | |||||||||||
Sales revenue, net | 457,819 | 418,128 | 310,663 | ||||||||
Restructuring charges | 220 | ||||||||||
Operating income | 89,319 | 89,020 | 55,944 | ||||||||
Identifiable assets | 664,151 | 664,151 | 610,176 | ||||||||
Identifiable assets | 642,967 | 642,967 | |||||||||
Capital and intangible asset expenditures | 8,537 | 5,652 | 1,560 | ||||||||
Depreciation and amortization | 5,825 | 5,795 | 4,532 | ||||||||
Health and Home | |||||||||||
Segment information | |||||||||||
Sales revenue, net | 682,605 | 632,769 | 642,735 | ||||||||
Operating income | 62,099 | 51,072 | 36,860 | ||||||||
Identifiable assets | 674,440 | 674,440 | 715,104 | ||||||||
Identifiable assets | 679,248 | 679,248 | |||||||||
Capital and intangible asset expenditures | 3,716 | 5,192 | 9,131 | ||||||||
Depreciation and amortization | 16,750 | 20,483 | 22,022 | ||||||||
Beauty | |||||||||||
Segment information | |||||||||||
Sales revenue, net | 349,323 | 355,779 | 439,177 | ||||||||
Asset impairment charges | 15,447 | 2,900 | 6,000 | ||||||||
Restructuring charges | 1,637 | ||||||||||
Operating income | 17,644 | 29,572 | 23,490 | ||||||||
Identifiable assets | $ 282,729 | 282,729 | 306,651 | ||||||||
Identifiable assets | $ 284,992 | 284,992 | |||||||||
Capital and intangible asset expenditures | 1,352 | 4,663 | 5,985 | ||||||||
Depreciation and amortization | $ 11,155 | $ 9,897 | $ 8,335 | ||||||||
Hydro Flask | Housewares | |||||||||||
Segment information | |||||||||||
Period of operating results of acquisition included | 12 months | 11 months 15 days |
Segment and Geographic Inform89
Segment and Geographic Information - Geographic information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
GEOGRAPHIC INFORMATION | |||||||||||
Sales revenue, net | $ 390,847 | $ 423,709 | $ 347,205 | $ 327,986 | $ 347,369 | $ 412,251 | $ 335,058 | $ 311,998 | $ 1,489,747 | $ 1,406,676 | $ 1,392,575 |
Long-lived assets | 1,066,008 | 1,067,891 | 1,066,008 | 1,067,891 | 894,577 | ||||||
United States | |||||||||||
GEOGRAPHIC INFORMATION | |||||||||||
Sales revenue, net | 1,168,888 | 1,111,109 | 1,080,338 | ||||||||
Long-lived assets | 437,920 | 409,337 | 437,920 | 409,337 | 407,621 | ||||||
International | |||||||||||
GEOGRAPHIC INFORMATION | |||||||||||
Sales revenue, net | 320,859 | 295,567 | 312,237 | ||||||||
Long-lived assets | 628,088 | 658,554 | 628,088 | 658,554 | 486,956 | ||||||
Barbados | |||||||||||
GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets | 496,258 | 499,064 | 496,258 | 499,064 | 315,182 | ||||||
Other international | |||||||||||
GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets | $ 131,830 | $ 159,490 | $ 131,830 | $ 159,490 | $ 171,774 |
Segment and Geographic Inform90
Segment and Geographic Information - Percentage of sales (Details) - Net sales revenue - Customer concentration risk | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Largest customer | |||
Foreign Currency Risk and Currency Exchange Uncertainties | |||
Percentage of net sales revenue | 15.00% | 16.00% | 18.00% |
Largest customer | United States | |||
Foreign Currency Risk and Currency Exchange Uncertainties | |||
Percentage of sales from largest customer that were within the U.S. | 78.00% | 79.00% | 78.00% |
Second largest customer | United States | |||
Foreign Currency Risk and Currency Exchange Uncertainties | |||
Percentage of sales from largest customer that were within the U.S. | 13.00% |
Selected Quarterly Financial 91
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Sales revenue, net | $ 390,847 | $ 423,709 | $ 347,205 | $ 327,986 | $ 347,369 | $ 412,251 | $ 335,058 | $ 311,998 | $ 1,489,747 | $ 1,406,676 | $ 1,392,575 |
Gross Profit | 161,298 | 181,005 | 145,733 | 134,065 | 144,607 | 171,927 | 139,390 | 126,633 | 622,101 | 582,557 | 525,734 |
Asset Impairment Charges | 11,447 | 4,000 | 500 | 2,400 | 15,447 | 2,900 | 6,000 | ||||
Income from continuing operations | 8,378 | 58,624 | 34,572 | 27,308 | 34,425 | 56,774 | 29,465 | 23,646 | 128,882 | 144,310 | 92,991 |
Income (loss) from discontinued operations, net of tax | $ 51,703 | $ (89,060) | $ (25,639) | $ (21,440) | $ 1,271 | $ 838 | $ (1,110) | $ (4,620) | $ (84,436) | $ (3,621) | $ 8,237 |
Earnings (loss) per share - basic | |||||||||||
Continuing operations | $ 0.31 | $ 2.16 | $ 1.27 | $ 1.01 | $ 1.27 | $ 2.07 | $ 1.06 | $ 0.85 | $ 4.76 | $ 5.24 | $ 3.29 |
Discontinued operations | 1.91 | (3.28) | (0.94) | (0.79) | 0.05 | 0.03 | (0.04) | (0.17) | (3.12) | (0.13) | 0.29 |
Total earnings per share - basic | 2.22 | (1.12) | 0.33 | 0.22 | 1.31 | 2.10 | 1.02 | 0.69 | 1.64 | 5.11 | 3.58 |
Earnings (loss) per share - diluted | |||||||||||
Continuing operations | 0.31 | 2.15 | 1.26 | 1 | 1.25 | 2.04 | 1.04 | 0.84 | 4.73 | 5.17 | 3.23 |
Discontinued operations | 1.91 | (3.27) | (0.94) | (0.79) | 0.05 | 0.03 | (0.04) | (0.16) | (3.10) | (0.13) | 0.29 |
Total earnings per share - diluted | $ 2.22 | $ (1.12) | $ 0.33 | $ 0.22 | $ 1.30 | $ 2.07 | $ 1 | $ 0.68 | $ 1.63 | $ 5.04 | $ 3.52 |
Income Taxes - Components of in
Income Taxes - Components of income tax and deferred tax (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Feb. 28, 2018 | Dec. 31, 2017 | Feb. 28, 2017 | Feb. 29, 2016 |
Components of income (loss) before income tax expense | |||||
U.S. | $ 23,824 | $ 20,878 | $ 17,069 | ||
Non-U.S. | 131,614 | 134,839 | 88,943 | ||
Income before income taxes | 155,438 | 155,717 | 106,012 | ||
U.S. | |||||
Current | 3,380 | 19,195 | 10,444 | ||
Deferred | 19,578 | (10,475) | (4,428) | ||
U.S. | 22,958 | 8,720 | 6,016 | ||
Non-U.S. | |||||
Current | 1,912 | (290) | 4,919 | ||
Deferred | 1,686 | 2,977 | 2,086 | ||
Non-U.S. | 3,598 | 2,687 | 7,005 | ||
Total | 26,556 | $ 11,407 | $ 13,021 | ||
Provisional tax expense | $ 17,900 | ||||
Effective income tax rate reconciliation | |||||
Expected effective income tax rate at the U.S. statutory rate (as a percent) | 21.00% | 32.70% | 35.00% | 35.00% | 35.00% |
Impact of U.S. state income taxes (as a percent) | 0.50% | 0.50% | (0.10%) | ||
Effect of statutory tax rate in Macau (as a percent) | (19.50%) | (20.10%) | (21.80%) | ||
Effect of statutory tax rate in Barbados (as a percent) | (5.20%) | (7.30%) | (7.60%) | ||
Effect of statutory tax rate in Europe | (5.30%) | (3.60%) | |||
Effect of statutory tax rate in Switzerland (as a percent) | (6.50%) | ||||
Effect of income from non-U.S. operations subject to varying rates (as a percent) | 2.10% | 2.10% | 4.60% | ||
Effect of foreign exchange fluctuations (as a percent) | 0.30% | 0.40% | 3.80% | ||
Effect of asset impairment charges (as a percent) | 2.20% | 0.40% | 1.30% | ||
Effect of U.S. tax reform | 11.50% | ||||
Effect of uncertain tax positions | (1.30%) | ||||
Other items | (0.90%) | (0.10%) | 3.60% | ||
Effective income tax rate (as a percent) | 17.10% | 7.30% | 12.30% | ||
U.S. tax liability associated with income generated in Macau | $ 0 | ||||
Blended U.S. federal statutory rate (as a percent) | 32.70% | ||||
Deferred tax assets, gross: | |||||
Operating loss carryforwards | $ 32,829 | $ 16,799 | |||
Accounts receivable | 4,767 | 7,375 | |||
Inventories | 7,183 | 11,057 | |||
Accrued expenses and other | 7,385 | 12,007 | |||
Total gross deferred tax assets | 52,164 | 47,238 | |||
Valuation allowance | (17,747) | (17,600) | |||
Deferred tax liabilities: | |||||
Depreciation and amortization | (24,859) | (47,774) | |||
Total deferred tax liabilities, net | (18,136) | ||||
Total deferred tax liabilities, net | 9,558 | ||||
Net increase in valuation allowance | 100 | ||||
Goodwill deductible for tax purposes | 19,000 | $ 113,000 | |||
Estimated tax deduction for goodwill for next fiscal year | $ 1,300 | ||||
Maximum | |||||
Deferred tax liabilities: | |||||
Remaining amortization period of tax deductible goodwill | 2 years |
Income Taxes - Operating loss c
Income Taxes - Operating loss carryforwards (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Gross deferred tax assets | ||
Subtotals | $ 32,829 | $ 16,799 |
Less portion of valuation allowance established for operating loss carryforwards | (16,406) | |
Total | 16,423 | |
Required future taxable income | ||
Subtotals | 140,145 | |
U.S. | ||
Gross deferred tax assets | ||
Operating loss carryforwards with indefinite carryover periods | 16,549 | |
Required future taxable income | ||
Required future taxable income - operating loss carryforwards with indefinite carryover periods | 81,856 | |
Non-U.S. | ||
Gross deferred tax assets | ||
Operating loss carryforwards with definite carryover periods | 2,103 | |
Operating loss carryforwards with indefinite carryover periods | 14,177 | |
Required future taxable income | ||
Required future taxable income - operating loss carryforwards with definite carryover periods | 7,853 | |
Required future taxable income - operating loss carryforwards with indefinite carryover periods | $ 50,436 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Unrecognized Tax Benefits | |||
Total unrecognized tax benefits, beginning balance | $ 6,611 | $ 8,737 | |
Resolution of tax dispute | (1,486) | ||
Changes in tax positions taken during a prior period | 88 | ||
Changes in tax positions taken during a prior period | (1,260) | ||
Changes due to lapse in statute of limitations | (890) | (218) | |
Impact of foreign currency remeasurement on unrecognized tax benefits in the current period | (133) | ||
Impact of foreign currency remeasurement on unrecognized tax benefits in the current period | 218 | ||
Settlements | (113) | (515) | |
Total unrecognized tax benefits, ending balance | 4,428 | 6,611 | $ 8,737 |
Less current unrecognized tax benefits | (1,079) | ||
Noncurrent unrecognized tax benefits | 3,349 | 6,611 | |
Unrecognized tax benefits that would affect effective tax rate if recognized | 4,400 | ||
Liability for tax-related interest and penalties included in unrecognized tax benefits | 1,100 | 1,700 | |
Tax-related interest and penalties expense included in provisions for income tax | $ (500) | $ (600) | $ 500 |
Earnings per Share (Details)
Earnings per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Weighted average diluted securities | |||
Weighted average shares outstanding, basic | 27,077 | 27,522 | 28,273 |
Incremental shares from share-based payment arrangements | 177 | 369 | 476 |
Weighted average shares outstanding, diluted | 27,254 | 27,891 | 28,749 |
Employee and Directors stock options | |||
Weighted average diluted securities | |||
Dilutive securities (in shares) | 230 | 365 | 317 |
Restricted stock (RSA) | |||
Weighted average diluted securities | |||
Dilutive securities (in shares) | 114 | 186 | 227 |
Earnings per Share - Antidiluti
Earnings per Share - Antidilution (Details) - shares shares in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Earnings per Share | |||
Antidilutive securities (in shares) | 319 | 137 | 159 |
SCHEDULE II - Valuation and q97
SCHEDULE II - Valuation and qualifying accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Allowances for doubtful accounts | |||
Valuation and Qualifying Accounts | |||
Beginning Balance | $ 3,266 | $ 1,712 | $ 1,830 |
Charged to cost and expenses | 1,066 | 2,277 | 298 |
Deductions | 1,420 | 723 | 416 |
Ending Balance | 2,912 | 3,266 | 1,712 |
Allowances for back-to-stock returns | |||
Valuation and Qualifying Accounts | |||
Beginning Balance | 2,293 | 4,165 | 4,033 |
Net charge (credit) to sales revenue | 104 | (1,872) | 132 |
Ending Balance | $ 2,397 | $ 2,293 | $ 4,165 |