November 2017
Forward Looking Statements
and Non-GAAP Information
2
HELE Business Overview
A leading global consumer products Highly Favorable Business Fundamentals
company offering creative solutions for
its customers through a strong Powerful Global Brands
diversified portfolio of well-recognized
and widely-trusted brands in Health & Exciting Growth Drivers
Home, Beauty, Housewares and
Nutritional Supplements. Highly Attractive Business Economics
3
Track Record of Sustained Growth
FY17 Highlights
$1,546 $1,537
$1,445 • Revenue -0.5%; over base of +7% in FY16
$1,288 $1,317 • Adj. operating margin +0.4 percentage
Net Sales
points
($ in Millions)
• Adj. diluted EPS +7.7%
FY 13 FY 14 FY 15 FY 16 FY 17
• Cash flow from operations +22%
• Inventory reduction of -4.1%
$238
$232 • Debt ratio down to 2.1X from 2.95X end of
$220 FY16
Adjusted EBITDA
$195 • Made accretive acquisition
($ in Millions) $190
• Returned capital through ~$75MM share
FY 13 FY 14 FY 15 FY 16 FY 17 buy-back
$6.73
Three Year Performance
$6.25
$5.85 Since New Strategic Plan in FY15
Adjusted • Sales: +16.7%
Diluted EPS $4.47 $4.50 • Cash from Operations: +48.2%
FY 13 FY 14 FY 15 FY 16 FY 17 • Adjusted diluted EPS: +49.6%
Throughout this presentation we refer to certain GAAP and non-GAAP measures used by management to
evaluate financial performance. Please see explanation of certain terms and measures and reconciliations
of Non-GAAP financial measures in the Appendix section.
* Source: Helen of Troy
4
Launched New Transformational Strategy in FY 15
Transformation
5
Efficient, Collaborative Operating Structure
Transforming from Holding Company to Operating Company
FY 2014 Today
Improved Performance
Corporate
& Support
Services
Supplements
Housewares
Nutritional
& Home
Beauty
Health
Healthcare
& Home Beauty Housewares
Environment Global Shared Services Platform
Strategic Plan
Culture
6
Comprehensive Strategy and Operating Model
+ +
Supplements
Housewares
Nutritional
& Home
Health
Beauty
Global Shared Services Platform
Strategic Plan
Strategic Plan
Culture
Culture
7
With Proven Ability to Acquire
and Integrate in Attractive Sectors
• FY17 Net sales of $1.537 B: built from acquisition and organic growth
• Bolting On: success adding new categories, geographies and channels
• Tucking In: new brands and adjacencies for additional growth
• Right Balance: of integration and independence
2003 2004 2007 2008 2009 2010 2010 2011 2014 2015 2016
8
Disciplined Acquisitions are Core to Our Strategy
Select M&A Criteria
1 Favor brands with #1 or 2 Accretive to cash flow and 3 Enhances revenue growth 4 HELE likely to add value and
#2 market position Adjusted Diluted EPS and sweetens the mix operational efficiency
• Leading market share in category, or • Accretive to earnings (in one or two years). • Enhances revenue growth. • Delivers complementary scale or
• Leading position in niche, uniquely • Impact of synergies. • Accretive to gross margin. scalability across our shared
differentiated subcategory. • Return hurdle rate exceeds cost of • Accretive to EBITDA margin. services to leverage and enhance
capital. efficiencies across sourcing,
purchasing, distribution,
warehousing, logistics, marketing,
R&D and other fixed costs.
5 HELE can accelerate growth 6 Bias toward high margin, 7 Global potential
of acquired business proprietary consumables
• Target business at inflection point, • High frequency, disposable products. • Participating in categories with universal
requiring additional resources, • Razor and blade model/recurring appeal or relevance.
expertise and/or capital to accelerate revenue stream. • Evidence of geographic and cultural
growth. Target offers clear white space • Participation in attractive categories. portability.
for growth in core HELE channels, • Relatively few entrenched competitors.
geographies or adjacent categories. • Global supply chain/transportation, etc.
9
We Leverage the Power of World Class Brands
Licensing Is A Core Competency
World Class Brands World Class Licensors World Class Partnerships
• P&G: One of the oldest,
largest, and most global
trademark licensees
• Honeywell: Largest and most
global licensee
• Revlon’s largest and most
global licensee
• Strong Unilever licensing
portfolio
• Long-term deals on the
majority of licenses
10
Our Brands Hold Strong Leadership Positions
11
We Partner With a Diversified Blue Chip Customer Base
12
Highly Experienced Leadership Team
CEO
Julien Mininberg
Chief Legal
Chief Chief Chief Chief Corporate President President
Officer and President President
Financial Supply Chain Information People Business Health Nutritional
External Housewares Beauty
Officer Officer Officer Officer Development & Home Supplements
Relations
Vince Brian Jay John Lisa Jack Larry Jon Ron Ben
Carson Grass Caron Conklin Kidd Jancin Witt Kosheff Anderskow Tiecher
Growth Productivity
Delivering
14
Creating Value for Shareholders – Improving Fundamentals
$217 $222
Adjusted Operating $206
Income $177 $183 4 YR. CAGR = 5.8%
($ in Millions)
FY 13 FY 14 FY 15 FY 16 FY 17
Adjusted Operating Margin 13.7% 13.9% 14.2% 14.0% 14.4%
$229
$187
Cash Flow from
$179 4 YR. CAGR = 27%
$154
Operations $88
($ in Millions)
FY 13 FY 14 FY 15 FY 16 FY 17
Cash Flow Productivity 63% 133% 131% 163% 148%
FY 13 FY 14 FY 15 FY 16 FY 17
Return on Capital 11.2% 7.4% 11.1% 7.0% 9.2%
Adjusted Return on Capital 13.8% 12.6% 14.3% 12.4% 12.3%
Throughout this presentation we refer to certain GAAP and non-GAAP measures used by management to
evaluate financial performance. Please see explanation of certain terms and measures and
reconciliations of Non-GAAP financial measures in the Appendix section.
15
Creating Value for Shareholders – Cumulative Returns
Key Drivers
• Strategic Plan
• Acquisitions
- March 2016: Hydro Flask
• Share Repurchase
- FY17 Repurchased ~.9MM shares for ~$75MM
16
Our Capital Philosophy
Capital Expenditures
$16 - $20 million expected for FY 18
17
Three Months Ended August 31, 2017
Sales and Operating Margin Results by Segment
Three Months Ended August 31,
Health & Nutritional
Housewares Beauty Total
Home Supplements
Fiscal 2017 sales revenue, net $ 105,976 $ 144,453 $ 33,112 $ 84,629 $ 368,170
Core business 8,804 3,024 (1,855) (177) 9,796
Impact of foreign currency (60) 384 - 172 496
Change in sales revenue, net 8,744 3,408 (1,855) (5) 10,292
Fiscal 2018 sales revenue, net $ 114,720 $ 147,861 $ 31,257 $ 84,624 $ 378,462
Total net sales revenue growth 8.3 % 2.4 % (5.6) % 0.0 % 2.8 %
Core business 8.3 % 2.1 % (5.6) % (0.2) % 2.7 %
Impact of foreign currency (0.1) % 0.3 % 0.0 % 0.2 % 0.1 %
Throughout this presentation we refer to certain GAAP and non-GAAP measures used by management to
evaluate financial performance. Please see explanation of certain terms and measures and
reconciliations of Non-GAAP financial measures in the Appendix section.
18
Six Months Ended August 31, 2017
Sales and Operating Margin Results by Segment
Six Months Ended August 31,
Health & Nutritional
Housewares Beauty Total
Home Supplements
Fiscal 2017 sales revenue, net $ 190,579 $ 290,808 $ 69,052 $ 165,669 $ 716,108
Core business 16,969 8,041 (6,176) (1,294) 17,540
Impact of foreign currency (548) (722) - (459) (1,729)
Acquisitions 6,148 - - - 6,148
Change in sales revenue, net 22,569 7,319 (6,176) (1,753) 21,959
Fiscal 2018 sales revenue, net $ 213,148 $ 298,127 $ 62,876 $ 163,916 $ 738,067
Total net sales revenue growth 11.8 % 2.5 % (8.9) % (1.1) % 3.1 %
Core business 8.9 % 2.8 % (8.9) % (0.8) % 2.4 %
Impact of foreign currency (0.3) % (0.2) % 0.0 % (0.3) % (0.2) %
Acquisitions 3.2 % 0.0 % 0.0 % 0.0 % 0.9 %
19
Fiscal Year 2018 Focus
20
FY 2018 Strategies for Growth and Margin Expansion
Strategies
Growth Expansion
• Feed Leadership Brands • Complement durables with high margin consumables
• Selectively enter new categories • Trim lower performing products/customers
• Leverage consumer research • Develop best in class supply chain
• Invest in innovation to drive margin and revenues • Leverage economies of scale and shared services
• Accretive acquisition • Mix improvement from recent acquisitions
21
Fiscal Year 2018 Focus
Accelerate advantage through a connected digital ecosystem
Grow Enhanced Digital More Connected
eCommerce Marketing Devices
13.2%*
+30%
YOY
6.4%*
22
Project Refuel
Focus on Beauty and Nutritional Supplements
23
Fiscal 2018 Outlook and Key Assumptions
FY 18 FY 18
Headwinds/Tailwinds Assumptions
Outlook Outlook by Business Segment
Business Segments
▪ Accretion and synergies year to a range of $4.01 to $4.34
Housewares 27.2%
Now
8% to 10%
from Hydro Flask ▪ Cash flow hedges in place ▪ Reiterates fiscal year 2018
Headwinds for portion of exposure non-GAAP adjusted diluted
brick and mortar retail YOY now approx. $0.40- ▪ Effective tax rate between
(4.6)% and (2.6)%, and Nutritional Now
$0.50/share
▪ Retailer inventory adjusted effective tax rate Supplements 8.5% MSD
rationalization ▪ No share repurchases,
of between 9.2% and 11.2%
impairments or
▪ Foreign currency for remainder of FY18 Now
acquisitions Total 100.0% 1.5 - 3.1%
24
HELE Long-Term Growth Targets
Throughout this presentation we refer to certain GAAP and non-GAAP measures used by management to
evaluate financial performance. Please see explanation of certain terms and measures and
reconciliations of Non-GAAP financial measures in the Appendix section.
25
In Summary...Key Investment Highlights
Powerful global brands; many market leaders
26
Business Segments
27
Source: Helen of Troy
28
A Global Branded Consumer Device and Consumable Platform
Home Environment Healthcare
Home Environment
Stinger Other Braun
Insect Control Blood Pressure
PUR
Water Filtration Braun
Thermometers
Honeywell
Humidification-Seasonal
Honeywell
Heaters
FY17: $632.8 Million Net Sales
Honeywell
Fans
Vicks
Humidification-Pharmacy
Honeywell Vicks
Dehumidifiers Thermometers
Honeywell
Air Purifiers Healthcare SoftHeat Vicks
Other Hot/Cold Therapy Vicks Vapopads
Vaposteam
29
Leadership
Brand
30
Leadership
Brand
Braun PRT2000
31
Leadership
Brand Braun and Vick’s Thermometer Leadership
US Thermometer $ Share
Braun
22.2%
Private Label
42.7%
36.1% Market Share
32
Leadership
Brand Vicks and Braun Products Remain #1 Brands in the U.S.
US Humidifier $ Share “Pharmacy”
Safety1st Other
MyPurMist 2.9% 2.5%
4.2%
Crane
7.5%
Private Label
8.0%
33
Leadership
Brand
34
Leadership
Brand #1 Dollar Share in Air Purifiers - US
✓ Deep Consumer Understanding ✓ Product Innovation ✓ Excellent Retail and Consumer Execution
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
= =
Holmes
13% • Honeywell share more than 3X that of closest competitor
• Febreze air purifiers launched by Helen of Troy in 2014
Febreze, 3.0
Source: 3rd party syndicated data, NPD Traqline and internal Health & Home
estimates for devices only CY 2016
35
Leadership
Brand Next Generation PUR Faucet Filtration
Launched August 2016
PUR faucet mount filters are certified to remove more contaminants than any other filter using our MAXion™ filtration system and are
the only ones certified to reduce over 70 contaminants including lead, pesticides, mercury, and more providing cleaner, healthier water.
36
Leadership
Brand PUR is Growing
Faucet Mount and Pitcher Segments L26W
Faucet Mount
Faucet System
Mount System Faucet
FaucetMount
MountRefill
Refill
Other Other
BRAND SHARE GROWTH Brita
BRAND SHARE GROWTH
Brita PUR 73.7% +1.9 PUR 84.6% +1.1
PUR Brita 26.3% (-1.6) PUR Brita 15.4% (-1.9)
Other 0.0% (-0.3) Other 0.0% (-0.2)
Zero
Zero Other BRAND SHARE GROWTH
BRAND SHARE GROWTH Water Other
Water
PUR Private PUR 15.1% +3.2
PUR 20.6% +5.2 Label PUR
Brita 64.5% (-2.7)
Brita 65.6% (-6.2)
Brita
Brita Private
8.7% (-2.6)
Zero Water 8.9% +0.9 Label
Zero Water 10.1% +1.1
Other 4.8% (-0.8)
Other 1.6% +1.0
37
38
Professional Business Profile Brush, Comb & Accessories
Retail Appliances
39
Leadership
Brand
40
Leadership
Brand
COMFORTABLE TO USE
EASY TO MASTER
GUARANTEED RESULTS
HTCURL1181 - 1”
HTCURL1110 - 1¼”
41
Leadership
Brand
42
Salon 360 Surround AC Dryer
Redefining How She Dries and Styles Her Hair
PATENT PENDING DUAL AIRFLOW SYSTEM
EXCLUSIVE 360 MODE
43
Shipped Summer of 2017
TM
Pro collection salon one-step
Perfect Straight Smooth Brilliance
STRAIGHT and SHINETM
Flat Iron
44
Leadership
Brand
Housewares
45
Leadership
Brand Housewares
Based Upon Universal Design: To provide products and environments that are
easily usable and comfortable for the largest spectrum of people possible.
$418 Categories
$310
$296
$274
$259
$237
$217
$199
$175
$164
$138
$128
$98
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
46
Leadership
Brand
Glass Pour-Over
Microwave Egg Cooker 3 Blade Hand-Held Spiralizer Microwave Omelet Maker Microwave Bacon Crisper
Coffee Maker
47
Leadership
Brand
48
Leadership
Brand
FY 2017 Cubby & Cubby Plus
Cubby Features:
• Quick and easy center pull fold
• Stands upright when folded with handlebar away from
ground
• Large, waterproof canopy with canopy extension for full
coverage
• Large basket with pull out extension for added capacity
• Convenient zip pockets for added storage
49
Leadership
Brand
50
Leadership
Brand
Hydro Flask's leading technology and design is setting
the standard for product performance within the category
Vacuum Insulation
Hydro Flasks are vacuum
insulated, which means there is an
TempShield ™
absence of matter between the two
Used in 100% of Hydro
stainless steel walls. Since there is Flask products, our
no matter, the temperature outside unique double wall Flex Cap
of the flask has minimal influence
insulation protects
on the temperature of the contents
temperature for up to 24
inside the flask
hours cold and 6 hours
Cold
2 Up to 24 Hrs. Hot Up to 6 Hrs. hot
Due to the fact that the flasks are
Powder Coating
4 The Hydro Flask product offering vacuum insulated, hot beverages stay
hot up to 6 hours and cold beverages 18/8 pro-grade stainless
includes a multitude of color 18/8
stay cold up to 24 hours steel won't retain or
choices, all of which include a
transfer flavors, ensuring
proprietary powder coat for an PRO-GRADE
the pure taste of your
easy-to-grip, sweat-free bottle you STAINLESS STEL
beverage
can take anywhere 64 oz. Wide Mouth Growler
51
Leadership
Brand
Rapidly Growing Market Share
#1 Bottle Share in Sport/Outdoor and Natural Foods
2017 2017
33.1% 39.4%
#1 #1
Hydration
2016 2016
19.5% 16.7%
#2 #4
Accessories
52
Leadership
Brand Sold Through Diverse, Premium Sales Channels
And Where to Play: Premium Outdoor, Natural Foods and Specialty Beverage Channels in the US
Micro-
Breweries
Outdoor
Coffee
Golf / Yoga Outdoor
Corporate / Misc
CHANNEL MIX
Natural Foods
Micro Breweries
Military
Direct Online
Coffee
International
Direct
Sales
Sporting Goods
GEOGRAPHIC MIX
Online
US
Wholesale
53
Leadership
Brand New for 2017 – Rocks and Tumblers
NEW PRODUCT
54
Leadership
Brand
183,456 Combinations
55
Housewares
56
Inspiring Wellness
57
Nutritional Supplements
A Leading, Direct-to-Consumer Marketer of Premium, Doctor Branded VMS Products
Anti-Aging Support
Other Blood Sugar Support
Vision Supoort
Brain/Mental Health
Sports/Energy/Weight
Gastrointestinal Health
Sleep Supoort
Sexual Health
Mood Support
Cold/Flu-immune
Heart Health
58
Market Leading Direct-To-Consumer (“DTC”) Nutritional
Supplements Marketer
Healthy Directions is a leading DTC marketer of doctor and health nutrition expert endorsed nutritional supplements, topical skincare and other
health and wellness products. The Company’s innovative, premium products are primarily sold via digital and direct mail channels. A 25+ year
track record of quality and regulatory compliance underpins its superior customer loyalty
DTC Leader
In FYE17, Healthy Directions transformed the Company’s e-commerce platform, customer relationship
Successfully
Transformed from Direct management and order management systems to compete in the rapidly growing online VMS sector while still
Mail to Digital leveraging historical leadership in VMS direct mail
Healthy Directions’ innovative, highly efficacious supplements and topical products are based on gold-standard
Innovative, Superior clinical research and made to industry-leading quality standards by third party manufacturers driving a low-cost
Quality Products outsourced model. The Company practices a focused and disciplined product development path, launching new
products from concept to market in 9 months with robust, supportable claims
Education-Driven Content Healthy Directions has a rich library of original content across a wide range of health topics and is aggressively
and Marketing Model expanding its digital content marketing to engage new consumers in an increasingly online driven industry
Highly Respected Doctors Healthy Directions’ family of highly respected doctors and wellness experts in the natural health field engender
and Natural Health Experts trust and provide consumers with validated knowledge and product confidence
High Value Database of The Company has a multi-million customer database of customers. Healthy Directions’ average customer tenure
Loyal DTC Customers of customers is 4.5 years
Repeatable, High Margin The Company’s highly popular AutoDelivery (“AD”) subscription program is substantial and growing highly
Continuity Sales profitable
59
Doctor/Physician Recommendations are the #1 Influencer of Supplement User Purchases – 90%(1)
HEALTHY DIRECTIONS KEY HEALTH MEGATRENDS STRATEGIC NATIONALLY REPUTED EXCLUSIVE AND LONG-TERM DOCTOR BRAND
FOCUS AMBASSADORS
HEART HEALTH
Since 1995
DIGESTIVE HEALTH
PAIN
Since 2012
Since 2012
$3.2 B market
Since 2011
Source: Nutrition Business Journal Direct-to-Consumer Report 2016 and Euromonitor.
Note: Market sizes represent 2015 sales per NBJ.
(1) Source: NMI SORD 2015 (Capsugel Presentation).
(2) Represents topical analgesic market in the U.S.
60
Unique Education-Driven Content Marketing Model
DRTV E-NEWS VIDEOS/WEBINARS SOCIAL MEDIA WEBSITES
61
New Order Management
and Customer Relationship Management Platform
Replaced 20+ year old order management system and customer relationship management system is expected to provide significant marketing flexibility and
increase topline through cross selling and upselling. These platforms are in the immediate post-implementation phase and are expected to deliver benefits in FYE18
CATALOG
MANAGEMENT
CROSS-SELLING LOYALTY
Involve & UP DRLLING MANAGEMENT
• Multi-channel engagement W
• Outbound quality
ENGAGE
A
BUY
N
RESEARCH
T USE
REPORTING &
SEARCH
Improve DATA
Integrate SERVICES
• Customer ANALYTICS INVENTORY
• Reporting
service MANAGEME
• Dashboard &
• Action and NT
scorecards
workflow COMMENT
management WANT
• Knowledge
base USER PERSONALIZED
MANAGEMENT SERVICES
CRM
COMPAIGN PAYMENT
MANAGEMENT SERVICES
New Order Management Key benefits: New CRM Key benefits: New eCommerce Platform Key benefits:
▪ Orders are accepted in real time using Oracle EBS ▪ Contact center agents to have 360° view of each customer ▪ New online platform will provide the ability for customers to
Warehouse Management System (WMS) that is integrated (purchase history, customer lifetime value, promotion manage their accounts, one-click ordering, significantly
with Intelligrated’s RTS pick and put-to-light system history) during the live interaction on the telephone or via improved site speed, mobile optimization, consolidation of
chat the current four web platforms, common cart, A/B testing,
▪ Greater pay method capabilities, real-time credit card significantly accelerated marketing campaign
authorization, PayPal on AutoDelivery, improved credit card ▪ New CRM system allows for dynamic call scripting, implementation delivering lower costs on digital as
processing capabilities through current processing platform improved upselling, cross-selling and overall customer compared to direct mail
provider service
62
Appendix
63
Our Global Footprint…
Canada RMO EMEA RMO
Toronto Canada Lausanne,
Housewares/ Health & Home
Hydro Flask Marlborough, MA Switzerland
Bend, OR
Shared Service Beauty
Warehouses Personal Care
Mississippi Danbury, CT
Shared Service Housewares
Center El Paso, New York City
Texas
Beauty Nutritional
Appliances Supplements
El Paso, Texas Bethesda, MD
China Shared Service Asia/Pacific RMO
Centers Hong Kong
Shenzhen & Macao
Latin America RMO
Mexico City
64
To unite
all business
segments, regions,
departments and
sites
65
New Transformational Strategy
66
Reconciliation of Non-GAAP Financial Measures
The Company reports and discusses its operating results using financial measures consistent
with accounting principles generally accepted in the United States of America (“GAAP”). To
supplement its presentation, the Company discloses certain financial measures that may be
considered non-GAAP financial measures, such as adjusted operating income, adjusted income,
adjusted diluted EPS, EBITDA and adjusted EBITDA, which are presented in accompanying
tables to this presentation along with a reconciliation of these financial measures to their
corresponding GAAP-based measures presented in the Company’s consolidated statements of
income.
67
Reconciliation of GAAP Diluted Earnings Per Share (EPS) to Adjusted Diluted EPS (non-GAAP)
(in thousands, except per share data)
FY 13 FY 14 FY 15 FY 16 FY 17
Diluted earnings per share (EPS) as reported (GAAP) $3.62 $2.66 $4.52 $3.52 $5.04
Asset impairment charges, net of tax $0.37 $0.28 $0.18 $0.30
CEO succession costs, net of tax $0.51 $0.16
Acquisition-related expenses, net of tax $0.08 $0.02
Venezuela re-measurement related charges, net of tax $0.65
Patent litigation charge, net of tax $0.62 $0.05
Sub total $3.62 $3.54 $4.88 $5.16 $5.39
Amortization of intangible assets, net of tax $0.69 $0.64 $0.79 $0.84 $0.87
Non-cash share-based compensation, net of tax $0.16 $0.32 $0.18 $0.25 $0.47
Adjusted diluted EPS (non-GAAP) $4.47 $4.50 $5.85 $6.25 $6.73
68
Reconciliation of Net Income to Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) and Adjusted EBITDA
(In Thousands)
FY 13 FY 14 FY 15 FY 16 FY 17
Net Income $115,666 $86,248 $131,164 $101,228 $140,689
Interest expense, net $13,270 $10,128 $14,965 $10,981 $14,743
Income Tax expense $19,848 $20,886 $16,050 $18,590 $9,200
Depreciation and amortization, excluding amortized interest $34,425 $33,839 $39,653 $42,749 $44,341
EBITDA (Earnings before interest, taxes, depreciation and amortization) $183,209 $151,101 $201,832 $173,548 $208,973
CEO succession costs $18,228 $6,707
Non-cash share-based compensation charges $5,913 $14,232 $5,974 $8,483 $15,498
Acquisition-related expenses $3,611 $698
Venezuela re-measurement related charges $18,733
Patent litigation charge $17,830 $1,468
Non-cash asset impairment charges $12,049 $9,000 $6,000 $12,400
Adjusted EBITDA $189,122 $195,610 $220,417 $231,999 $238,339
69
Reconciliation of Net Income (GAAP) to Adjusted Income (non-GAAP)
(In Thousands)
70
Reconciliation of Fiscal Year 2018 Outlook for GAAP Diluted EPS
to Adjusted Diluted EPS (non-GAAP)
(Unaudited)
71
Reconciliation of Non-GAAP Financial Measures – GAAP Operating Income
to Adjusted Operating Income (non-GAAP) (Unaudited)
(in thousands)
72
Reconciliation of Non-GAAP Financial Measures – GAAP Operating Income
to Adjusted Operating Income (non-GAAP) (Unaudited)
(in thousands)
(a) Includes approximately one-half month of incremental operating results from Hydro Flask, which was acquired on March 18, 2016.
73
Reconciliation of GAAP Net Income and Earnings Per Share (EPS) to Adjusted Income and
Adjusted EPS (non-GAAP)
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended August 31, Basic EPS Diluted EPS
2017 2016 2017 2016 2017 2016
Net income as reported (GAAP) $ 8,933 $ 28,355 $ 0.33 $ 1.02 $ 0.33 $ 1.00
Asset impairment charges, net of tax 24,559 - 0.90 - 0.90 -
TRU bankruptcy charge 3,392 - 0.12 - 0.12 -
Subtotal 36,884 28,355 1.35 1.02 1.35 1.00
Amortization of intangible assets, net of tax 5,607 6,228 0.21 0.22 0.20 0.22
Non-cash share-based compensation, net of tax 2,698 2,451 0.10 0.09 0.10 0.09
Adjusted income (non-GAAP) $ 45,189 $ 37,034 $ 1.66 $ 1.33 $ 1.65 $ 1.31
74
EXPLANATION OF CERTAIN TERMS AND MEASURES USED IN THIS PRESENTATION
Throughout the accompanying presentation we refer to certain measures used by management to evaluate financial performance. We also may refer to a number of financial measures that are not defined under GAAP, but
have corresponding GAAP-based measures. Where non-GAAP measures appear, we provide tables reconciling these to their corresponding GAAP-based measures and refer to a discussion of their use. We believe these
measures provide investors with important information that is useful in understanding our business results and trends.
Many of the definitions below refer to terms also used in our Quarterly and Annual filings (“public filings”) with the SEC,
however certain terms are used only in the accompanying presentation and these are noted with an *.
1. Accounts receivable turnover: Twelve-month trailing net sales revenue divided by the average of the 11. Ending debt to ending equity ratio: Total interest bearing short- and long-term debt divided by
current and prior four fiscal quarters’ ending accounts receivable balances. This result is divided into 365 to shareholders’ equity. We use this as a leverage metric to indicate what proportion of debt and equity we are
express turnover in terms of average days outstanding. using to finance assets.
2. Adjusted diluted EPS (non-GAAP): Adjusted income divided by the weighted average shares of common 12. Growth from acquisitions: Net sales revenue growth associated with product lines or brands that we have
stock outstanding plus the effect of dilutive securities.* acquired and operated for less than twelve months during each period presented.
3. Adjusted income (non-GAAP): Net income as reported under GAAP excluding the following items net of
their applicable tax effects: non-cash asset impairment charges, CEO succession costs, acquisition‐related 13. Inventory turnover: Twelve-month trailing cost of goods sold divided by the average of the current and prior
expenses, Venezuelan re-measurement related charges, patent litigation charges, amortization of intangible four fiscal quarters’ ending inventory balances.
assets, and non-cash share-based compensation, as applicable.*
14. Operating expense ratio: Total operating expense (SG&A plus asset impairment charges) for the Company
4. Adjusted operating income (non-GAAP): Operating income for the Company or a segment as reported or a segment divided by the related net sales revenue for the Company or a segment.
under GAAP excluding non-cash asset impairment charges, CEO succession costs, acquisition‐related
expenses, Venezuelan re-measurement related charges, patent litigation charges, amortization of intangible 15. Operating leverage: The improvement in operating margin that the Company achieves with sales growth,
assets, and non-cash share-based compensation, as applicable.* due to the fixed nature of certain operating expenses.
5. Adjusted operating margin (non-GAAP): Adjusted Operating income for the Company or a segment divided 16. Operating margin: Operating income for the Company or a segment divided by the related net sales revenue
by the related net sales revenue for the Company or a segment.* for the Company or a segment.*
6. Cash flow from operations: Same as net cash provided by operating activities in our consolidated
statements of cash flows presented in our public filings. 17. Return on average equity: Twelve month trailing net income divided by the average of the current and prior
four fiscal quarters’ ending shareholders’ equity.
7. Cash flow productivity (non-GAAP): The result, expressed as a percentage, of cash flow from operations
minus capital expenditures, divided by reported net income. We currently use this as a metric to indicate the 18. Return on Capital: Twelve month trailing net income divided by the average of the sum of the beginning and
proportion of the cash we generate that can be made available for acquisitions, debt repayment, or ending total debt plus shareholders’ equity.*
shareholder repurchases.
19. Adjusted Return on Capital (non-GAAP): Twelve month trailing adjusted net income divided by the average
8. Core business: Core business is net sales revenue and related operations associated with product lines or
of the sum of the beginning and ending total debt plus shareholders’ equity.*
brands after the first twelve months from the date the product line or brand was acquired. Net sales revenue
and related operations from internally developed product lines or brands are always considered core 20. Segment operating income: We compute segment operating income based on net sales revenue, less cost
business.* of goods sold, SG&A, and any asset impairment charges associated with the segment. The SG&A used to
9. Corporate overhead costs: General corporate managerial and related administrative compensation costs, compute each segment’s operating income is directly associated with the segment. We then deduct
legal, accounting, and regulatory compliance costs, together with associated operating overhead that is not allocations for operational shared services and corporate overhead costs. We do not allocate non-operating
directly attributable to any one operating segment, but benefits the Company as a whole. These charges are income and expense, including interest or income taxes to operating segments.*
allocated to each operating segment based upon a number of factors depending on the nature of the
expense. Such factors include relative revenues, estimates of relative labor expenditures for each segment 21. SG&A ratio: This is total SG&A for the Company or a segment divided by the related net sales revenue for
and certain intangible asset levels held by each segment. the Company or a segment.
10. Current ratio: Current assets divided by current liabilities at the end of a reporting period, expressed as a 22. Working capital: Current assets less current liabilities.*
ratio.
75