Helen of Troy Limited (NASDAQ:HELE), designer, developer and worldwide
marketer of brand-name houseware, healthcare/home environment and
personal care consumer products, today announced that its Board of
Directors has authorized the repurchase of $550 million of its
outstanding common shares (“common stock” or “shares”) in keeping with
its stated intention, first noted in April 2013, to return to
shareholders capital not otherwise deployed for strategic acquisitions.
The Company will today commence a modified "Dutch Auction" tender offer
to purchase up to $300 million of its common stock, subject to certain
terms and conditions, and plans to initiate a subsequent repurchase of
an additional $250 million of its common stock over the next three
years, at times and prices to be determined.
In total, the $550 million share repurchase plan represents
approximately 28.88% of the Company’s outstanding common stock, based
upon the Company’s closing price on February 7, 2014. As of February 5,
2014, Helen of Troy had approximately 32.091 million shares outstanding.
“The Helen of Troy Board has been engaged in a thorough and ongoing
evaluation of opportunities to enhance long-term value for
shareholders,” said Timothy F. Meeker, Chairman of the Board. “Utilizing
our strong balance sheet to fund a significant share repurchase provides
immediate and continuing benefits to shareholders and underscores our
confidence in the Company's current strategy and future growth
potential. It builds upon a series of actions the Board has taken to
strengthen our corporate governance and position Helen of Troy for
greater growth and profitability. These actions have included the
implementation of our CEO succession plan, the separation of the
Chairman and CEO roles, and a significant reduction in executive
compensation. We view Helen of Troy as being uniquely positioned to
deliver significant value to its shareholders through the execution of
its strategy for long-term growth.”
Thomas J. Benson, Interim Chief Executive Officer, said, "We have been
clear over the past several quarters that we would return directly to
shareholders excess capital not otherwise deployed for strategic
acquisitions. Our strong balance sheet affords us the opportunity to
repurchase a substantial percentage of our outstanding shares while
continuing to invest in future organic growth and opportunistic
acquisitions as we have done in the past. At the same time, we are
continuing to effectively reduce costs, including realizing substantial
savings in CEO compensation of approximately $30 million, or $0.92 per
share, in fiscal 2015. We have a clear strategy in place and are
confident in our ability to capitalize on the opportunities ahead to
drive sustainable long-term growth and deliver significant value to
shareholders.”
Tender Offer
The Company will today commence a modified “Dutch Auction” tender offer
to repurchase up to $300 million of its shares of common stock at a
price not greater than $66.50 per share nor less than $57.75 per share
(the “Offer”). Helen of Troy intends to use a combination of cash on
hand and borrowings under its existing revolving credit facility to pay
for all shares that are purchased in the Offer and all fees and expenses
applicable to the Offer. Additional information regarding the Offer will
be provided via a separate news release issued today.
Subsequent Share Repurchase
The additional $250 million share repurchase may be purchased through a
variety of methods, which may include open market purchases, privately
negotiated transactions, block trades, accelerated stock repurchase
transactions, or any combination of such methods. The share repurchase
authorization supersedes any remaining outstanding share repurchase
authorization as of the commencement of the Offer. 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, as well as on working capital requirements, general business
conditions, financial conditions, any applicable contractual limitations
and other factors, including alternative investment opportunities. The
share repurchases will be made in a manner that is designed to comply
with U.S. securities laws and rules.
Helen of Troy’s Board of Directors has approved the Offer. However, none
of the Company, its Board of Directors, J.P. Morgan Securities LLC, the
dealer manager for the Offer, Computershare Trust Company, N.A., the
depositary for the Offer, or Georgeson Inc., the information agent for
the Offer, makes any recommendation to any holder of common stock as to
whether to participate in the Offer or, if a person wishes to
participate, at what price or prices to tender shares in the Offer.
Before making a decision, shareholders should read the documents
relating to the Offer, including the Offer to Purchase dated February
10, 2014, including the documents incorporated therein by reference, and
the related Letter of Transmittal, in their entirety. The Company also
urges shareholders to consult their financial and tax advisors in making
their own decisions on what action, if any, to take in light of their
own particular circumstances.
This press release is for informational purposes only and does not
constitute an offer to buy or the solicitation of an offer to sell
shares of Helen of Troy Limited. The tender offer will be made
only pursuant to the Offer to Purchase, Letter of Transmittal and
related materials that Helen of Troy will shortly be distributing to its
shareholders and filing with the Securities and Exchange Commission. Shareholders
and investors should read carefully the Offer to Purchase, Letter of
Transmittal and related materials because they contain important
information, including the various terms and conditions of the tender
offer. Shareholders and investors may obtain a free copy of the
tender offer statement on Schedule TO, the Offer to Purchase, Letter of
Transmittal and other documents that Helen of Troy will shortly be
filing with the Securities and Exchange Commission at the Commission’s
website at www.sec.gov
or by calling Georgeson Inc., the Information Agent for the tender
offer, toll-free at 1-800-676-0281. Shareholders are urged to
carefully read these materials prior to making any decision with respect
to the tender offer.
About Helen of Troy Limited
Helen of Troy Limited is a leading global consumer products company
offering creative solutions for its customers through a strong portfolio
of well-recognized and widely-trusted brands, including: Housewares:
OXO®, Good Grips®, Soft Works®, OXO tot® and OXO Steel®; Healthcare/Home
Environment: Vicks®, Braun®, Honeywell®, PUR®, Febreze®, Stinger®,
Duracraft® and SoftHeat®; and Personal Care: Revlon®, Vidal Sassoon®,
Dr. Scholl's®, Pro Beauty Tools®, Sure®, Pert®, Infusium23®, Brut®,
Ammens®, Hot Tools®, Bed Head®, Karina®, Ogilvie® and Gold 'N Hot®. The
Honeywell® trademark is used under license from Honeywell International
Inc. The Vicks®, Braun®, Febreze® and Vidal Sassoon® trademarks are used
under license from The Procter & Gamble Company. The Revlon® trademark
is used under license from Revlon Consumer Products Corporation. The Bed
Head® trademark is used under license from Unilever PLC. The Dr.
Scholl's® trademark is used under license from MSD Consumer Care, Inc.
For in-depth information about Helen of Troy, please visit www.hotus.com.
FORWARD LOOKING STATEMENTS
This press release may contain forward looking statements, which are
subject to change. Any or all of the forward looking statements may turn
out to be wrong. They can be affected by inaccurate assumptions or by
known or unknown risks and uncertainties. Many of these factors will be
important in determining the Company's actual future results.
Consequently, no forward looking statement can be guaranteed. Actual
future results may vary materially from those expressed or implied in
any forward looking statements. The forward looking statements are
qualified in their entirety by a number of risks that could cause actual
results to differ materially from historical or anticipated results.
Generally, the words “anticipates”, “estimates”, “believes”, “expects”,
“plans”, “may”, “will”, “should”, “seeks”, “project”, “predict”,
“potential”, “continue”, “intends”, and other similar language identify
forward looking statements. The Company cautions readers not to place
undue reliance on forward looking statements. The Company intends its
forward looking statements to speak only as of the time of such
statements, and does not undertake to update or revise any forward
looking statement, whether as a result of new information, additional or
subsequent developments or otherwise. The forward looking statements
contained in this press release should be read in conjunction with, and
are subject to and qualified by, the risks described in the Company’s
Form 10-K for the year ended February 28, 2013 and in our other filings
with the SEC. Investors are urged to refer to such risk factors referred
to above for a description of these risks. Such risks include, among
others, the departure and recruitment of key personnel, the Company’s
ability to deliver products to our customers in a timely manner, the
Company’s geographic concentration of certain U.S. distribution
facilities, which increases our exposure to significant shipping
disruptions and added shipping and storage costs, difficulties
encountered during the transition to the Company’s new distribution
facility could interrupt the Company’s logistical systems and cause
shipping disruptions, the Company’s projections of product demand,
sales, net income and earnings per share are highly subjective and our
future net sales revenue, net income and earnings per share could vary
in a material amount from such projections, expectations regarding
acquisitions and the integration of acquired businesses, the Company’s
relationship with key customers and licensors, the costs of complying
with the business demands and requirements of large sophisticated
customers, the Company’s dependence on foreign sources of supply and
foreign manufacturing, the impact of changing costs of raw materials and
energy on cost of goods sold and certain operating expenses,
circumstances that may contribute to future impairment of goodwill,
intangible or other long lived assets, the risks associated with the use
of trademarks licensed from and to third parties, our dependence on the
strength of retail economies and vulnerabilities to an economic
downturn, the Company’s ability to develop and introduce innovative new
products to meet changing consumer preferences, litigation brought by
any party in any court in Bermuda, the United States or any country in
which the Company operates, regulatory and legislative actions in the
countries in which the Company operates, disruptions in U.S., European
and other international credit markets, exchange rate risks, trade
barriers, exchange controls, expropriations, and other risks associated
with foreign operations, the Company’s debt leverage and the constraints
it may impose, the costs, complexity and challenges of upgrading and
managing our global information systems, the risks associated with
information security breaches, the risks associated with tax audits and
related disputes with taxing authorities, potential changes in laws,
including tax laws, and the Company’s ability to continue to avoid
classification as a controlled foreign corporation.
Copyright Business Wire 2014