UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, ~~2020~~2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __ to __

Commission File Number: 001-14669

HELEN OF TROY LIMITED

(Exact name of registrant as specified in its charter)

~~Bermuda~~ ~~74-2692550~~

~~(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)~~


Bermuda						74-2692550
(State or other jurisdiction						(I.R.S. Employer
of incorporation or organization)						Identification No.)

Clarendon House

2 Church Street

Hamilton, Bermuda

(Address of principal executive offices)

1 Helen of Troy Plaza

El Paso, Texas 79912

(~~Registrant’s~~Registrant's United States Mailing Address) (Zip Code)

(915) 225-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, $0.10 par value per share

HELE

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”,~~filer,” “smaller reporting ~~company”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer~~

Large accelerated filer

☒ ~~Accelerated filer~~ ☐

~~Non-accelerated filer~~ ☐ ~~Smaller reporting company~~ ☐

~~Emerging growth company~~

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of December 29, ~~2020,~~2021, there were ~~24,395,784~~24,137,065 common shares, $0.10 par value per share, outstanding.

Table of Contents

HELEN OF TROY LIMITED AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


		PAGE

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	2

	Note 1 - Basis of Presentation and Related Information	78
	Note 2 - New Accounting Pronouncements	89
	Note 3 - ~~Revenue Recognition~~	9
	~~Note 4 - Leases~~Assets and Liabilities Held for Sale	10
	Note 4 - Accrued Expenses and Other Current Liabilities	11
	Note 5 - ~~Assets Held for Sale~~Share-Based Compensation Plans	11
	Note 6 - ~~Supplemental Balance Sheet Information~~Repurchases of Common Stock	1211
	Note 7 - ~~Acquisitions~~Restructuring Plan	12
	Note 8 - ~~Goodwill~~Commitments and ~~Intangible Assets~~Contingencies	12
	Note 9 - Long-Term Debt	14
	Note 910 - ~~Share-Based Compensation Plans~~Fair Value	15
	Note 1011 - ~~Repurchase of Helen of Troy Common Stock~~Financial Instruments and Risk Management	16
	~~Note 11 - Restructuring Plan~~	17
	Note 12 - ~~Commitments and Contingencies~~Accumulated Other Comprehensive Income (Loss)	1719
	Note 13 - ~~Long-Term Debt~~	17
	~~Note 14 - Fair Value~~Segment Information	19
	Note 1514 - ~~Financial Instruments and Risk Management~~Income Taxes	20
	Note 15 - Earnings Per Share	21
	Note 16 - ~~Accumulated Other Comprehensive~~ ~~Income~~(~~Loss~~)	23
	~~Note 17 - Segment Information~~	23
	~~Note 18 - Income Taxes~~	24
	~~Note 19 - Earnings Per Share~~	25
	~~Note 20 -~~ Subsequent Events	2621

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2722

Item 3.	Quantitative and Qualitative Disclosures A ~~bout~~About Market Risk	5348

Item 4.	Controls and Procedures	5348

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	5349

Item 1A.	Risk Factors	5450

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5452

Item 6.	Exhibits	5553

SIGNATURES		5654

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)


(in thousands, except shares and par value)	(in thousands, except shares and par value)	November 30, 2020		February 29, 2020		(in thousands, except shares and par value)	November 30, 2021		February 28, 2021
Assets	Assets					Assets
Assets, current:	Assets, current:					Assets, current:
Cash and cash equivalents	Cash and cash equivalents	$	156,661	$	24,467	Cash and cash equivalents	$	44,344	$	45,120
Receivables - principally trade, less allowances of $3,956 and $1,461		500,070		348,023
Receivables - principally trade, less allowances of $627 and $998						Receivables - principally trade, less allowances of $627 and $998	505,933		382,449
Inventory	Inventory	383,440		256,311		Inventory	585,811		481,611
Prepaid expenses and other current assets	Prepaid expenses and other current assets	10,591		9,229		Prepaid expenses and other current assets	23,062		16,170

Income taxes receivable						Income taxes receivable	3,574		6,720
Assets held for sale	Assets held for sale	39,306		44,806		Assets held for sale	2,265		39,867
Total assets, current	Total assets, current	1,090,068		682,836		Total assets, current	1,164,989		971,937

Property and equipment, net of accumulated depreciation of $144,462 and $132,340		135,795		132,107
Property and equipment, net of accumulated depreciation of $157,287 and $140,379						Property and equipment, net of accumulated depreciation of $157,287 and $140,379	165,061		136,535
Goodwill	Goodwill	739,901		739,901		Goodwill	739,901		739,901
Other intangible assets, net of accumulated amortization of $162,425 and $148,891		288,617		300,952
Other intangible assets, net of accumulated amortization of $160,204 and $151,240						Other intangible assets, net of accumulated amortization of $160,204 and $151,240	349,328		357,264
Operating lease assets	Operating lease assets	32,277		32,645		Operating lease assets	30,314		32,533
Deferred tax assets, net	Deferred tax assets, net	21,568		14,635		Deferred tax assets, net	29,311		21,748
Other assets, net of accumulated amortization of $2,167 and $2,167		3,518		807
Other assets						Other assets	8,501		3,570
Total assets	Total assets	$	2,311,744	$	1,903,883	Total assets	$	2,487,405	$	2,263,488

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Liabilities, current:	Liabilities, current:					Liabilities, current:
Accounts payable, principally trade	Accounts payable, principally trade	$	301,175	$	152,674	Accounts payable, principally trade	$	306,049	$	334,807
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	289,568		183,157		Accrued expenses and other current liabilities	296,362		271,179
Income taxes payable	Income taxes payable	5,878		1,181		Income taxes payable	20,727		7,022
Long-term debt, current maturities	Long-term debt, current maturities	1,884		1,884		Long-term debt, current maturities	1,884		1,884
Liabilities held for sale						Liabilities held for sale	286		—
Total liabilities, current	Total liabilities, current	598,505		338,896		Total liabilities, current	625,308		614,892

Long-term debt, excluding current maturities	Long-term debt, excluding current maturities	438,497		337,421		Long-term debt, excluding current maturities	445,584		341,746
Lease liabilities, non-current	Lease liabilities, non-current	39,279		40,861		Lease liabilities, non-current	35,595		38,352
Deferred tax liabilities, net	Deferred tax liabilities, net	5,636		4,224		Deferred tax liabilities, net	7,136		5,735
Other liabilities, non-current	Other liabilities, non-current	19,389		20,758		Other liabilities, non-current	18,824		23,416
Total liabilities	Total liabilities	1,101,306		742,160		Total liabilities	1,132,447		1,024,141

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0

Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Cumulative preferred stock, non-voting, $1.00 par. Authorized 2,000,000 shares; NaN issued		0		0
Common stock, $0.10 par. Authorized 50,000,000 shares; 24,394,007 and 25,193,766 shares issued and outstanding		2,439		2,519
Cumulative preferred stock, non-voting, $1.00 par. Authorized 2,000,000 shares; none issued						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; 24,136,351 and 24,405,921 shares issued and outstanding						Common stock, $0.10 par. Authorized 50,000,000 shares; 24,136,351 and 24,405,921 shares issued and outstanding	2,414		2,441
Additional paid in capital	Additional paid in capital	277,289		268,043		Additional paid in capital	298,708		283,396
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(12,285)		(7,005)		Accumulated other comprehensive loss	(1,066)		(11,656)
Retained earnings	Retained earnings	942,995		898,166		Retained earnings	1,054,902		965,166
Total stockholders' equity	Total stockholders' equity	1,210,438		1,161,723		Total stockholders' equity	1,354,958		1,239,347
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	2,311,744	$	1,903,883	Total liabilities and stockholders' equity	$	2,487,405	$	2,263,488

See accompanying notes to condensed consolidated financial statements.

Table of Contents

HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended November 30, Nine Months Ended November 30,
(in thousands, except per share data) 2020 2019 2020 2019
Sales revenue, net $ 637,737 $ 474,737 $ 1,589,424 $ 1,265,067
Cost of goods sold 350,410 264,764 892,460 723,216
Gross profit 287,327 209,973 696,964 541,851
Selling, general and administrative expense (“SG&A”) 186,630 130,692 439,646 359,794
Restructuring charges (12) 12 355 1,061
Operating income 100,709 79,269 256,963 180,996
Non-operating income, net 93 92 440 313
Interest expense (2,926) (2,767) (9,568) (9,291)
Income before income tax 97,876 76,594 247,835 172,018
Income tax expense 13,721 7,895 16,061 16,530
Net income $ 84,155 $ 68,699 $ 231,774 $ 155,488
Earnings per share (“EPS”):
Basic $ 3.37 $ 2.73 $ 9.20 $ 6.19
Diluted 3.34 2.71 9.14 6.15
Weighted average shares used in computing EPS:
Basic 24,965 25,161 25,182 25,099
Diluted 25,192 25,396 25,350 25,295


	Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands, except per share data)	2021		2020		2021		2020
Sales revenue, net	$	624,884	$	637,737	$	1,641,335	$	1,589,424
Cost of goods sold	351,051		350,410		936,322		892,460
Gross profit	273,833		287,327		705,013		696,964

Selling, general and administrative expense (“SG&A”)	183,788		186,630		482,467		439,646

Restructuring charges	5		(12)		380		355
Operating income	90,040		100,709		222,166		256,963

Non-operating income, net	52		93		185		440
Interest expense	3,206		2,926		9,508		9,568
Income before income tax	86,886		97,876		212,843		247,835

Income tax expense	11,203		13,721		28,873		16,061
Net income	$	75,683	$	84,155	$	183,970	$	231,774




Earnings per share (“EPS”):
Basic	$	3.14	$	3.37	$	7.60	$	9.20
Diluted	3.10		3.34		7.52		9.14








Weighted average shares used in computing EPS:
Basic	24,129		24,965		24,193		25,182
Diluted	24,399		25,192		24,461		25,350

See accompanying notes to condensed consolidated financial statements.

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HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended November 30, Nine Months Ended November 30,
(in thousands) 2020 2019 2020 2019
Net income $ 84,155 $ 68,699 $ 231,774 $ 155,488
Other comprehensive income (loss), net of tax:
Cash flow hedge activity - interest rate swaps 1,180 1,599 (696) (5,562)
Cash flow hedge activity - foreign currency contracts 855 (1,729) (4,584) (514)
Total other comprehensive income (loss), net of tax 2,035 (130) (5,280) (6,076)
Comprehensive income $ 86,190 $ 68,569 $ 226,494 $ 149,412


	Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands)	2021		2020		2021		2020
Net income	$	75,683	$	84,155	$	183,970	$	231,774
Other comprehensive income (loss), net of tax:
Cash flow hedge activity - interest rate swaps	1,787		1,180		3,623		(696)
Cash flow hedge activity - foreign currency contracts	3,358		855		6,967		(4,584)
Total other comprehensive income (loss), net of tax	5,145		2,035		10,590		(5,280)
Comprehensive income	$	80,828	$	86,190	$	194,560	$	226,494

See accompanying notes to condensed consolidated financial statements.

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HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Common Stock Additional Paid in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Shareholders' Equity
(in thousands, including shares) Shares Par
Value
Balances at August 31, 2020 25,328 $ 2,533 $ 274,643 $ (14,320) $ 1,045,673 $ 1,308,529
Net income — — — — 84,155 84,155
Other comprehensive income, net of tax — — — 2,035 — 2,035
Exercise of stock options 1 0 70 — — 70
Net issuance and settlement of restricted stock 20 2 (2) — — 0
Issuance of common stock related to stock purchase plan 12 1 1,709 — — 1,710
Common stock repurchased and retired (967) (97) (5,870) — (186,833) (192,800)
Share-based compensation — — 6,739 — — 6,739
Balances at November 30, 2020 24,394 $ 2,439 $ 277,289 $ (12,285) $ 942,995 $ 1,210,438
Balances at February 29, 2020 25,194 $ 2,519 $ 268,043 $ (7,005) $ 898,166 $ 1,161,723
Net income — — — — 231,774 231,774
Other comprehensive loss, net of tax — — — (5,280) — (5,280)
Exercise of stock options 13 2 915 — — 917
Net issuance and settlement of restricted stock 189 19 (19) — — 0
Issuance of common stock related to stock purchase plan 27 2 3,609 — — 3,611
Common stock repurchased and retired (1,029) (103) (15,913) — (186,945) (202,961)
Share-based compensation — — 20,654 — — 20,654
Balances at November 30, 2020 24,394 $ 2,439 $ 277,289 $ (12,285) $ 942,995 $ 1,210,438
Balances at August 31, 2019 25,130 $ 2,513 $ 256,995 $ (4,755) $ 832,622 $ 1,087,375
Net income — — — — 68,699 68,699
Other comprehensive loss, net of tax — — — (130) — (130)
Exercise of stock options 7 1 556 — — 557
Net issuance and settlement of restricted stock 21 3 (3) — — 0
Issuance of common stock related to stock purchase plan 15 1 1,426 — — 1,427
Common stock repurchased and retired (6) (1) (1,001) — 0 (1,002)
Share-based compensation — — 4,758 — — 4,758
Balances at November 30, 2019 25,167 $ 2,517 $ 262,731 $ (4,885) $ 901,321 $ 1,161,684
Balances at February 28, 2019 24,946 $ 2,495 $ 246,585 $ 1,191 $ 746,366 $ 996,637
Net income — — — — 155,488 155,488
Other comprehensive loss, net of tax — — — (6,076) — (6,076)
Exercise of stock options 69 7 4,183 — — 4,190
Net issuance and settlement of restricted stock 199 21 (21) — — 0
Issuance of common stock related to stock purchase plan 30 2 2,833 — — 2,835
Common stock repurchased and retired (77) (8) (9,592) — (533) (10,133)
Share-based compensation — — 18,743 — — 18,743
Balances at November 30, 2019 25,167 $ 2,517 $ 262,731 $ (4,885) $ 901,321 $ 1,161,684


	Common Stock			Additional Paid in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Shareholders' Equity
(in thousands, including shares)	Shares	Par Value
Balances at February 28, 2021	24,406	$	2,441	$	283,396	$	(11,656)	$	965,166	$	1,239,347
Net income	—	—		—		—		56,972		56,972

Other comprehensive loss, net of tax	—	—		—		(797)		—		(797)
Exercise of stock options	4	—		275		—		—		275
Issuance and settlement of restricted stock	177	18		(18)		—		—		—
Issuance of common stock related to stock purchase plan	13	1		2,337		—		—		2,338
Common stock repurchased and retired	(502)	(50)		(16,616)		—		(93,408)		(110,074)
Share-based compensation	—	—		14,020		—		—		14,020

Balances at May 31, 2021	24,098	$	2,410	$	283,394	$	(12,453)	$	928,730	$	1,202,081
Net income	—	—		—		—		51,315		51,315

Other comprehensive income, net of tax	—	—		—		6,242		—		6,242
Exercise of stock options	6	1		519		—		—		520
Issuance and settlement of restricted stock	2	—		—		—		—		—

Common stock repurchased and retired	(1)	—		(104)		—		(12)		(116)
Share-based compensation	—	—		7,780		—		—		7,780

Balances at August 31, 2021	24,105	$	2,411	$	291,589	$	(6,211)	$	980,033	$	1,267,822
Net income	—	—		—		—		75,683		75,683

Other comprehensive income, net of tax	—	—		—		5,145		—		5,145
Exercise of stock options	11	1		664		—		—		665
Issuance and settlement of restricted stock	22	2		(2)		—		—		—
Issuance of common stock related to stock purchase plan	10	1		1,922		—		—		1,923
Common stock repurchased and retired	(12)	(1)		(2,014)		—		(814)		(2,829)
Share-based compensation	—	—		6,549		—		—		6,549

Balances at November 30, 2021	24,136	$	2,414	$	298,708	$	(1,066)	$	1,054,902	$	1,354,958

See accompanying notes to condensed consolidated financial statements.

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HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity - Continued (Unaudited)


	Common Stock			Additional Paid in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Shareholders' Equity
(in thousands, including shares)	Shares	Par Value
Balances at February 29, 2020	25,194	$	2,519	$	268,043	$	(7,005)	$	898,166	$	1,161,723
Net income	—	—		—		—		60,286		60,286

Other comprehensive loss, net of tax	—	—		—		(1,912)		—		(1,912)
Exercise of stock options	8	1		475		—		—		476
Issuance and settlement of restricted stock	165	17		(17)		—		—		—
Issuance of common stock related to stock purchase plan	15	1		1,900		—		—		1,901
Common stock repurchased and retired	(61)	(6)		(9,895)		—		(112)		(10,013)
Share-based compensation	—	—		9,291		—		—		9,291

Balances at May 31, 2020	25,321	$	2,532	$	269,797	$	(8,917)	$	958,340	$	1,221,752
Net income	—	—		—		—		87,333		87,333

Other comprehensive loss, net of tax	—	—		—		(5,403)		—		(5,403)
Exercise of stock options	4	1		370		—		—		371
Issuance and settlement of restricted stock	4	—		—		—		—		—

Common stock repurchased and retired	(1)	—		(148)		—		—		(148)
Share-based compensation	—	—		4,624		—		—		4,624

Balances at August 31, 2020	25,328	$	2,533	$	274,643	$	(14,320)	$	1,045,673	$	1,308,529
Net income	—	—		—		—		84,155		84,155

Other comprehensive income, net of tax	—	—		—		2,035		—		2,035
Exercise of stock options	1	—		70		—		—		70
Issuance and settlement of restricted stock	20	2		(2)		—		—		—
Issuance of common stock related to stock purchase plan	12	1		1,709		—		—		1,710
Common stock repurchased and retired	(967)	(97)		(5,870)		—		(186,833)		(192,800)
Share-based compensation	—	—		6,739		—		—		6,739

Balances at November 30, 2020	24,394	$	2,439	$	277,289	$	(12,285)	$	942,995	$	1,210,438

See accompanying notes to condensed consolidated financial statements.

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HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)


		Nine Months Ended November 30,					Nine Months Ended November 30,
(in thousands)	(in thousands)	2020		2019		(in thousands)	2021		2020
Cash provided by operating activities:
Cash (used) provided by operating activities:						Cash (used) provided by operating activities:
Net income	Net income	$	231,774	$	155,488	Net income	$	183,970	$	231,774

Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash (used) provided by operating activities:						Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation and amortization	Depreciation and amortization	27,995		24,876		Depreciation and amortization	26,082		27,995
Amortization of financing costs	Amortization of financing costs	772		763		Amortization of financing costs	738		772
Non-cash operating lease expense	Non-cash operating lease expense	4,910		1,371		Non-cash operating lease expense	6,910		4,910
Provision for doubtful receivables		3,445		484
Provision for credit losses						Provision for credit losses	292		3,445
Non-cash share-based compensation	Non-cash share-based compensation	20,654		18,743		Non-cash share-based compensation	28,349		20,654

Loss (gain) on the sale or disposal of property and equipment		75		(14)
Gain on sale of North America Personal Care business						Gain on sale of North America Personal Care business	(513)		—
(Gain) loss on the sale or disposal of property and equipment						(Gain) loss on the sale or disposal of property and equipment	(2,274)		75
Deferred income taxes and tax credits	Deferred income taxes and tax credits	(4,132)		(511)		Deferred income taxes and tax credits	(8,721)		(4,132)
Changes in operating capital:	Changes in operating capital:					Changes in operating capital:
Receivables	Receivables	(155,492)		(85,747)		Receivables	(139,292)		(155,492)
Inventories		(121,629)		(31,317)
Inventory						Inventory	(103,821)		(121,629)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(2,915)		(1,269)		Prepaid expenses and other current assets	(6,765)		(2,915)
Other assets and liabilities, net	Other assets and liabilities, net	(6,617)		21,091		Other assets and liabilities, net	(6,110)		(6,617)
Accounts payable	Accounts payable	148,501		(2,037)		Accounts payable	(30,549)		148,501
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	95,612		477		Accrued expenses and other current liabilities	29,198		95,612
Accrued income taxes	Accrued income taxes	6,793		(980)		Accrued income taxes	17,452		6,793
Net cash provided by operating activities		249,746		101,418
Net cash (used) provided by operating activities						Net cash (used) provided by operating activities	(5,054)		249,746

Cash used in investing activities:
Cash provided (used) by investing activities:						Cash provided (used) by investing activities:
Capital and intangible asset expenditures	Capital and intangible asset expenditures	(19,423)		(13,247)		Capital and intangible asset expenditures	(41,529)		(19,423)
Proceeds from sale of North America Personal Care business						Proceeds from sale of North America Personal Care business	44,700		—
Proceeds from the sale of property and equipment	Proceeds from the sale of property and equipment	0		3		Proceeds from the sale of property and equipment	5,305		—
Net cash used in investing activities		(19,423)		(13,244)
Net cash provided (used) by investing activities						Net cash provided (used) by investing activities	8,476		(19,423)

Cash used in financing activities:
Cash used by financing activities:						Cash used by financing activities:
Proceeds from line of credit	Proceeds from line of credit	917,400		406,600		Proceeds from line of credit	461,400		917,400
Repayment of line of credit	Repayment of line of credit	(811,400)		(482,000)		Repayment of line of credit	(356,400)		(811,400)
Repayment of long-term debt	Repayment of long-term debt	(1,900)		(1,900)		Repayment of long-term debt	(1,900)		(1,900)
Payment of financing costs	Payment of financing costs	(3,796)		0		Payment of financing costs	—		(3,796)
Proceeds from share issuances under share-based compensation plans	Proceeds from share issuances under share-based compensation plans	4,528		7,025		Proceeds from share issuances under share-based compensation plans	5,721		4,528

Payments for repurchases of common stock	Payments for repurchases of common stock	(202,961)		(10,133)		Payments for repurchases of common stock	(113,019)		(202,961)
Net cash used in financing activities		(98,129)		(80,408)
Net cash used by financing activities						Net cash used by financing activities	(4,198)		(98,129)

Net increase in cash and cash equivalents		132,194		7,766
Net (decrease) increase in cash and cash equivalents						Net (decrease) increase in cash and cash equivalents	(776)		132,194
Cash and cash equivalents, beginning balance	Cash and cash equivalents, beginning balance	24,467		11,871		Cash and cash equivalents, beginning balance	45,120		24,467
Cash and cash equivalents, ending balance	Cash and cash equivalents, ending balance	$	156,661	$	19,637	Cash and cash equivalents, ending balance	$	44,344	$	156,661

Supplemental non-cash items not included above resulting from the adoption of ASC 842
Initial recognition of operating lease asset		$	—	$	(37,082)
Initial recognition of lease liabilities		—		47,223
Accrued expenses and other current liabilities		—		(2,873)
Other assets and liabilities, net		—		(7,311)
Prepaid expenses and other current assets		—		43
Supplemental non-cash investing activity:						Supplemental non-cash investing activity:
Capital expenditures included in accounts payable						Capital expenditures included in accounts payable	$	8,140	$	—

See accompanying notes to condensed consolidated financial statements.

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HELEN OF TROY LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

November 30, ~~2020~~2021

Note 1 - Basis of Presentation and Related Information

Corporate Overview

The accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our consolidated financial position as of November 30, ~~2020~~2021 and February ~~29, 2020,~~28, 2021, and the results of our consolidated operations for the interim periods presented. We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data. These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual report on Form 10-K for the fiscal year ended February ~~29, 2020,~~28, 2021 (“Form 10-K”), and our other reports on file with the Securities and Exchange Commission ~~(“SEC”~~(the “SEC”).

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.~~subsidiaries, which are all wholly-owned. We refer to our common shares, par value $0.10 per share, as “common stock.” References to ~~the “FASB”~~“the FASB” refer to the Financial Accounting Standards Board. References to “GAAP” refer to accounting principles generally accepted in the United States ~~(“U.S.~~of America (the “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,~~leading consumer products company offering creative products and ~~distributor of an expanding~~solutions for our customers through a diversified portfolio of ~~brand-name consumer products. We have~~brands. As of November 30, 2021, we operated 3 segments: Housewares, Health & Home, and Beauty. Our Housewares segment provides a broad range of innovative consumer products for the home and on the ~~go. Product offerings include~~go to help with food preparation, ~~tools~~cooking, cleaning, organization, beverage service, and ~~storage containers; cleaning, bath and garden tools and accessories; infant and toddler care products; and insulated beverage, food containers and coolers.~~other tasks to ease everyday living for families. The Health & Home segment ~~focuses on~~provides healthcare and home environment products including health care devices, ~~such as thermometers, humidifiers, blood pressure monitors, and heating pads;~~ water filtration ~~systems;~~systems, and small home ~~appliances such as portable heaters, fans, and air purifiers.~~appliances. Our Beauty segment provides mass and prestige market beauty appliance and personal care products ~~include electric~~including hair ~~care, beauty care and wellness appliances;~~styling appliances, grooming tools, decorative haircare accessories, and ~~accessories; and liquid-, solid- and powder-based~~liquid personal care ~~and grooming~~ products.

Our business is seasonal due to different calendar events, holidays and seasonal weather patterns. Our fiscal reporting period ends on the last day in February. Historically, our highest sales volume and operating income occur in our third fiscal quarter ending November 30th. We purchase our products from unaffiliated manufacturers, most of which are located in China, Mexico and the ~~United States.~~

On January 23, 2020, we completed the acquisition of Drybar Products LLC (“Drybar Products”), for approximately $255.9 million in cash, subject to certain customary closing adjustments. Drybar Products is an innovative, trend-setting prestige hair care and styling brand. As part of the transaction, Helen of Troy granted a worldwide license to Drybar Holdings LLC, the owner and long-time operator of Drybar blowout salons, to use the Drybar trademark in their continued operation of Drybar salons. The salons will exclusively use, promote, and sell Drybar products globally. See Note 7 for additional information on the acquisition.U.S.

During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Beauty segment's mass channel personal care business, ~~(“Personal Care”). The assets to be disposed of include intangible assets, inventory and fixed assets relating to our mass channel liquids,~~which included liquid, powder and aerosol products ~~including~~under brands such as Pert, Brut, Sure and ~~Infusium.~~Infusium (“Personal Care”). On June 7, 2021, we completed the sale of our Personal Care business, not including the Latin America and Caribbean regions, to HRB Brands LLC, for $44.7 million in cash. The net assets sold included intangible assets, inventory, certain net trade receivables, fixed assets and certain accrued sales discounts and allowances relating to our North America Personal Care business. During the second quarter of fiscal 2022, we recognized a gain on the sale in SG&A totaling $0.5 million. We are continuing to negotiate the sale of the Latin America and Caribbean Personal Care businesses to HRB Brands LLC, which we expect to close no later than the ~~divestiture~~end of fiscal 2022. Accordingly, we have continued to ~~occur within fiscal~~classify the identified net assets of the Latin

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~~2021. Accordingly, we have classified the identified assets of the disposal group~~America and Caribbean Personal Care businesses as held for sale. ~~For~~See Note 3 for additional ~~information, see Note 5.~~information.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) to be a pandemic. ~~COVID-19 continues to spread throughout the United States and the world, with the continued potential for catastrophic impact.~~ The effects of the COVID-19 pandemic have had an unfavorable impact on certain parts of our business. The impact includes the effect of temporary closures of certain customer stores or limited hours of operation, ~~which has resulted in~~and materially lower store traffic, ~~at some of our brick and mortar retailers. The economic impact of historic unemployment and consumer uncertainty has also resulted in reduced demand for some of our more discretionary product lines.~~primarily during fiscal 2021. Additionally, COVID-19 has ~~also~~ disrupted certain parts of our supply ~~chain,~~chain. Surges in demand and shifts in shopping patterns related to COVID-19, as well as other factors, have strained the global freight network, which is resulting in ~~certain cases has limited~~higher costs, less capacity, and longer lead times. These factors may impact our ability to fulfill ~~demand. COVID-19 has favorably impacted~~some orders on a timely basis. Additionally, the extent of COVID-19's impact on the demand for certain of our product lines ~~that are more defensive, meet certain healthcare or healthy living needs, or meet~~in the ~~needs of consumers that are spending more time at home as a result~~future will depend on future developments, including the duration, spread and intensity of the ~~pandemic. COVID-19 has also favorably impacted~~pandemic, our ~~online channel in a meaningful way,~~continued ability to source and distribute our products, as ~~brick~~well as any future government actions affecting consumers and ~~mortar shopping options have been limited or considered unsafe. Although~~ the ~~favorable impacts~~global economy generally, all of ~~COVID-19 outweighed~~which are uncertain and difficult to predict considering the ~~unfavorable impacts during the nine month period ended November 30, 2020, this situation continues to change~~ rapidly ~~and additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today.~~evolving landscape. Accordingly, our liquidity and financial results could be impacted in ways that we are not able to predict today.

Principles of Consolidation

The accompanying condensed consolidated financial statements are prepared in accordance with GAAP and include all of our subsidiaries. Our condensed consolidated financial statements are prepared in U.S. Dollars. All intercompany ~~accounts~~balances and transactions are eliminated in consolidation.

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. The severity, duration and the economic consequences of COVID-19 are uncertain, evolving and difficult to predict. Therefore, our estimates and assumptions may change materially in future periods in response to COVID-19. Actual results may differ materially from those estimates.

Reclassifications

We have reclassified, combined or separately disclosed certain amounts in the prior years’ condensed consolidated financial statements and accompanying footnotes to conform with the current period’s presentation.

Note 2 - New Accounting Pronouncements

Except for the changes discussed below, there have been no changes in the information provided in our Form ~~10-K for the fiscal year ended February 29, 2020.~~10-K.

Not Yet Adopted

In ~~December 2019,~~October 2021, the FASB issued ASU ~~2019-12,~~2021-08, ~~Income Taxes~~Business Combinations (Topic ~~740)~~805): ~~Simplifying the~~ Accounting for ~~Income Taxes~~Contract Assets and Contract Liabilities from Contracts with Customers, which ~~provides for certain updates~~requires contract assets and contract liabilities acquired in a business combination to ~~reduce complexity~~be recognized and measured by the acquirer on the acquisition date in ~~accounting for income taxes, including~~accordance with ASC 606, Revenue from Contracts with Customers. Prior to the ~~utilization~~issuance of this guidance, contract assets and contract liabilities were recognized by the ~~incremental approach for intra-period tax allocation, among others.~~acquirer at fair value on the acquisition date. The amendments in ASU ~~2019-12~~2021-08 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2020,~~2022, with early adoption permitted and should be applied prospectively to acquisitions occurring on or after the effective date. This ASU will be effective for us in the first quarter of fiscal ~~2022.~~2024. We ~~are currently evaluating~~believe that the ~~impact this guidance may have on our consolidated financial statements.~~

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~~Adopted~~

~~In March 2020, the FASB issued ASU 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~, which provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting and other transactions affected by reference rate reform to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU was effective upon issuance, on March 12, 2020, and may be applied through December 31, 2022. The adoption of this ASU ~~did~~will not have a material impact on our consolidated financial statements.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ (with subsequent targeted amendments), which modifies the measurements of expected credit losses for certain financial instruments and financial assets, including trade receivables. This ASU was effective for us in the first quarter of fiscal 2021, and the adoption of this ASU did not have a material impact on our consolidated financial statements.

~~In August 2018, the FASB issued ASU 2018-13,~~ ~~Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement~~. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. Certain disclosures in ASU 2018-13 would need to be applied on a retrospective basis and others on a prospective basis. This ASU was effective for us in the first quarter of fiscal 2021, and the adoption of this ASU did not have a material impact on our consolidated financial statements.

~~In August 2018, the FASB issued ASU 2018-15,~~ ~~Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract~~. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU was effective for us in the first quarter of fiscal 2021, and the adoption of this ASU did not have a material impact on our consolidated financial statements.

~~Note 3 - Revenue Recognition~~

We adopted the provisions of ASU 2014-09 in the first quarter of fiscal 2019, and we elected to adopt the standard using the retrospective method. 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.

Our revenue is primarily generated from the sale of non-customized consumer products to customers. These products are promised goods that are distinct performance obligations. Revenue is recognized when control of, and title to, the product sold transfers to the customer in accordance with applicable shipping terms, which can occur on the date of shipment or the date of receipt by the customer, depending on the customer and the agreed upon shipping terms. Payment terms from the sale of our products are typically due to us in thirty to ninety days after the date of sale. Therefore, the timing and amount of revenue recognized was not materially impacted by the new guidance. We have thus concluded that the adoption of the guidance did not have a material impact on our consolidated financial statements. The provisions of the new guidance did, however, impact the classification of certain consideration paid to our customers. We therefore have reclassified an immaterial amount of such payments from SG&A to a reduction of net sales revenue for all periods presented. Also, in accordance

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In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires business entities to disclose information about transactions with ~~the guidance, we reclassified an immaterial amount of estimated sales returns from~~ a ~~reduction of receivables to accrued expenses and other current liabilities for all periods presented. We elected to adopt the guidance using the full retrospective method.~~

We measure revenue as the amount of consideration for which we expect to be entitled, in exchange for transferring goods. Certain customers may receive cash incentives such as customer discounts (including volume or trade discounts), advertising discounts and other customer-related programs whichgovernment that are accounted for ~~as variable consideration. In some cases, we apply judgment,~~by applying a grant or contribution model by analogy to other accounting guidance due to the lack of specific authoritative guidance in GAAP, (for example, a grant model within International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance, or Subtopic 958-605, Not-For-Profit Entities - Revenue Recognition). This guidance excludes transactions in the scope of specific GAAP, such as ~~contractual rates~~tax incentives accounted for under ASC 740, Income Taxes. This new ASU is effective for annual periods beginning after December 15, 2021, with early adoption and ~~historical payment trends, when estimating variable consideration. In accordance with~~retrospective or prospective application permitted. This ASU will be effective for us in our Form 10-K for fiscal 2023. We believe that the ~~guidance, most variable consideration is classified as a reduction to net sales.~~

~~Sales taxes and other similar taxes are excluded from revenue. We elected to account for shipping and handling activities as a fulfillment cost as permitted by the guidance. We do~~adoption of this ASU will not have ~~unsatisfied performance obligations since our performance obligations are satisfied at~~ a ~~single point in time.~~

~~Note 4 - Leases~~

Adoption of the new lease standard resulted in the recording of lease assets and lease liabilities of approximately $37.1 million and $47.2 million, respectively, as of March 1, 2019. The difference between the lease assets and lease liabilities primarily relates to unamortized lease incentives and deferred rent recorded in accordance with the previous lease guidance. The new standard did not materiallymaterial impact on our consolidated ~~statements of income or cash flows.~~

We primarily have leases for office space, which are classified as operating leases. Operating leases are included in operating lease assets, accrued expenses and other current liabilities, and lease liabilities, non-current in our consolidated balance sheets. Operating lease assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As most of our lease contracts do not provide an explicit interest rate, we use an estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We include options to extend or terminate the lease in the lease term for accounting considerations, when it is reasonably certain that we will exercise that option. Our leases have remaining lease terms of less than 1 to 12 years. Lease expense for lease payments is recognized on a straight-line basis over the lease term in a manner similar to previous accounting guidance. We do not recognize leases with an initial term of twelve months or less on the balance sheet and instead recognize the related lease payments as expense in the condensed consolidated statements of income on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component for all asset classes. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

~~Operating lease expense recognized in the condensed consolidated statements of income during the three and nine month periods ended November 30, 2020, was $1.8 millionand$5.0 million, respectively, compared to $1.5 million~~ and $4.8 million, respectively, for the same periods last year. Short-term lease expense is excluded from this amount and is not material. For the three and nine month periods ended November 30, 2020, rent expense related to all our operating leases was $2.4 million and $6.6 million, respectively, compared to $2.1 million and $5.8 million for the same periods last year. The non-cash component of lease expense is included as an adjustment to reconcile net income to net cash provided by operating activities in the condensed consolidated statements of cash flows.

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~~A summary of supplemental lease information is as follows:~~


	~~November 30, 2020~~
~~Weighted average remaining lease term (years~~)	~~10.0~~
~~Weighted average discount rate~~	~~6.10%~~
~~Year-to-date cash paid for amounts included in the measurement of lease liabilities:~~
~~Operating cash flows from operating leases~~ ~~(in thousands)~~	$	~~4,998~~

~~A summary of our estimated lease payments, imputed interest and liabilities as of November 30, 2020 are as follows:~~


~~(in thousands)~~
~~Fiscal 2021 (balance for remainder of fiscal year)~~	$	~~1,826~~
~~Fiscal 2022~~	~~7,128~~
~~Fiscal 2023~~	~~6,123~~
~~Fiscal 2024~~	~~5,332~~
~~Fiscal 2025~~	~~5,762~~
~~Thereafter~~	~~34,370~~
~~Total future lease payments~~	~~60,541~~
~~Less: imputed interest~~	~~(16,492)~~
~~Present value of lease liability~~	$	~~44,049~~


	~~November 30, 2020~~
~~Lease liabilities, current (1)~~	$	~~4,770~~
~~Lease liabilities, non-current~~	~~39,279~~
~~Total lease liability~~	$	~~44,049~~

~~(1)Included as part of “Accrued expenses and other current liabilities” on the condensed consolidated balance sheet.~~financial statement disclosures.

Note 53 - Assets and Liabilities Held for Sale

During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Personal ~~Care. The assets to be disposed of include intangible assets, inventory~~Care business and ~~fixed assets relating to our mass channel liquids, powder and aerosol products under brands such as Pert, Brut, Sure and Infusium. We expect the divestiture to occur within fiscal 2021 and have~~accordingly, we classified the identified net assets of the disposal group as held for sale. On June 7, 2021, we completed the sale of our Personal Care business, not including the Latin America and Caribbean regions, to HRB Brands LLC, for $44.7 million in cash. The ~~business is currently being marketed~~net assets sold included intangible assets, inventory, certain net trade receivables, fixed assets and certain accrued sales discounts and allowances relating to our North America Personal Care business. During the ~~process is ongoing.~~second quarter of fiscal 2022, we recognized a gain on the sale in SG&A totaling $0.5 million. We are continuing to negotiate the sale of the Latin America and Caribbean Personal Care businesses to HRB Brands LLC, which we expect to close no later than the end of fiscal 2022. Accordingly, we have continued to classify the identified net assets of the Latin America and Caribbean Personal Care businesses as held for sale.

The carrying amounts of the major classes of assets and liabilities for our Personal Care business that were classified as held for sale are as follows:

(in thousands) November 30, 2020 February 29, 2020
Assets:
Inventory $ 11,650 $ 17,150
Property and equipment, net of accumulated depreciation of $403 83 83
Goodwill, net of cumulative impairments of $71,993 9,849 9,849
Other intangible assets, net of accumulated amortization of $4,474 17,724 17,724
Total assets held for sale $ 39,306 $ 44,806


(in thousands)	November 30, 2021		February 28, 2021
Receivables, net of allowance of $34 and $30	$	1,555	$	7,979
Inventory	644		12,667
Property and equipment, net of accumulated depreciation of $152 and $403	66		100
Goodwill (1)	—		1,397
Other intangible assets (1)	—		17,724
Assets held for sale	$	2,265	$	39,867

Accrued sales discounts and allowances	$	286	$	—
Liabilities held for sale	$	286	$	—

(1)

Goodwill and other intangible assets as of February 28, 2021 are presented net of accumulated impairment and accumulated amortization of $80,445 and $4,474, respectively.

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Note 64 - ~~Supplemental Balance Sheet Information~~Accrued Expenses and Other Current Liabilities

~~PROPERTY AND EQUIPMENT~~A summary of accrued expenses and other current liabilities is as follows:

(in thousands) Estimated
Useful Lives
(Years) November 30, 2020 February 29, 2020
Land - $ 12,644 $ 12,644
Building and improvements 3 - 40 117,061 115,592
Computer, software, furniture and other equipment 3 - 15 98,382 89,257
Tools, molds and other production equipment 3 - 7 43,001 37,652
Construction in progress - 9,169 9,302
Property and equipment, gross 280,257 264,447
Less accumulated depreciation (144,462) (132,340)
Property and equipment, net $ 135,795 $ 132,107

~~ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES~~


(in thousands)	(in thousands)	November 30, 2020		February 29, 2020		(in thousands)	November 30, 2021		February 28, 2021
Accrued compensation, benefits and payroll taxes	Accrued compensation, benefits and payroll taxes	$	54,667	$	49,624	Accrued compensation, benefits and payroll taxes	$	41,107	$	66,385
Accrued sales discounts and allowances	Accrued sales discounts and allowances	55,832		34,176		Accrued sales discounts and allowances	68,729		59,426
Accrued sales returns	Accrued sales returns	31,919		22,972		Accrued sales returns	34,960		29,434
Accrued advertising	Accrued advertising	60,549		31,351		Accrued advertising	72,183		50,923
Other	Other	86,601		45,034		Other	79,383		65,011
Total accrued expenses and other current liabilities	Total accrued expenses and other current liabilities	$	289,568	$	183,157	Total accrued expenses and other current liabilities	$	296,362	$	271,179

~~Note 7 - Acquisitions~~

~~Drybar Products Acquisition~~

On January 23, 2020, we completed the acquisition of Drybar Products for approximately $255.9 million in cash, subject to certain customary closing adjustments. Acquisition-related expenses incurred during fiscal 2020 were approximately $2.5 million before tax. The purchase price was funded by borrowings under the Company's revolving credit agreement.

Drybar is an innovative, trend-setting prestige hair care and styling brand in the multi-billion-dollar beauty industry. As part of the transaction, we granted a worldwide license to Drybar Holdings LLC, the owner and long-time operator of Drybar blowout salons, to use the Drybar trademark in their continued operation of Drybar salons. The salons will exclusively use, promote, and sell Drybar products globally.

We accounted for the acquisition as a purchase of a business and recorded the excess purchase price as goodwill. We completed our analysis of the economic lives of the assets acquired and determined the appropriate fair values of the acquired assets. We assigned $30.0 million to trade names and are amortizing over a 15 year expected life. We assigned $17.0 million to customer relationships and are amortizing over a 14.5 year expected life. We used historical attrition rates to assign the expected life. We assigned $10.0 million to a consulting agreement and $6.0 million to a non-compete provision, and we are amortizing these assets over expected lives of 5 and 10 years, respectively.

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~~The following schedule presents the net assets recorded upon the acquisition of Drybar Products on January 23, 2020:~~


~~(in thousands)~~
~~Assets:~~
~~Receivables~~	$	~~7,710~~
~~Inventory~~	~~16,603~~
~~Prepaid expenses and other current assets~~	~~190~~
~~Property and equipment~~	~~1,472~~
~~Goodwill~~	~~172,933~~
~~Trade names - definite~~	~~30,000~~
~~Other intangible assets - definite~~	~~33,000~~
~~Subtotal - assets~~	~~261,908~~
~~Liabilities:~~
~~Accounts payable~~	~~1,948~~
~~Accrued expenses~~	~~4,099~~
~~Subtotal - liabilities~~	~~6,047~~
~~Net assets recorded~~	$	~~255,861~~

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 12.6% weighted average cost of capital; royalty rates used in the determination of trade names and customer relationship asset values of 5.0% and 3.0%, respectively; and a customer attrition rate used in the determination of customer relationship values of 6.7% per year.

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~~Note 8 - Goodwill and Intangible Assets~~

We perform annual impairment tests each fiscal year during the fourth quarter and interim impairment tests, if and when necessary. For the three and nine month periods ended November 30, 2020 and 2019, we did not record any impairment charges.

~~The following table summarizes the carrying amounts and accumulated amortization for all intangible assets by segment as of the end of the periods presented:~~

November 30, 2020 February 29, 2020
(in thousands) Gross
Carrying
Amount Cumulative
Goodwill
Impairments Accumulated
Amortization Net Book
Value Gross
Carrying
Amount Cumulative
Goodwill
Impairments
(1) Accumulated
Amortization
(2) Net Book
Value
Housewares:
Goodwill $ 282,056 $ 0 $ — $ 282,056 $ 282,056 $ 0 $ — $ 282,056
Trademarks - indefinite 134,200 — — 134,200 134,200 — — 134,200
Other intangibles - finite 43,063 — (23,011) 20,052 42,095 — (21,469) 20,626
Subtotal 459,319 — (23,011) 436,308 458,351 — (21,469) 436,882
Health & Home:
Goodwill 284,913 0 — 284,913 284,913 0 — 284,913
Trademarks - indefinite 54,000 — — 54,000 54,000 — — 54,000
Licenses - finite 17,050 — (16,015) 1,035 17,050 — (15,752) 1,298
Licenses - indefinite 7,400 — — 7,400 7,400 — — 7,400
Other intangibles - finite 118,446 — (105,293) 13,153 118,223 — (98,142) 20,081
Subtotal 481,809 — (121,308) 360,501 481,586 — (113,894) 367,692
Beauty:
Goodwill 172,932 0 — 172,932 244,925 (71,993) — 172,932
Trademarks - finite 30,151 — (1,827) 28,324 33,392 — (3,564) 29,828
Licenses - finite 13,697 — (13,037) 660 13,697 — (12,800) 897
Other intangibles - finite 33,035 — (3,242) 29,793 79,171 — (46,549) 32,622
Subtotal 249,815 0 (18,106) 231,709 371,185 (71,993) (62,913) 236,279
Total $ 1,190,943 $ 0 $ (162,425) $ 1,028,518 $ 1,311,122 $ (71,993) $ (198,276) $ 1,040,853

~~(1)~~The cumulative goodwill impairment of approximately $72.0 million in the Beauty segment is related to goodwill associated with the Personal Care business, which was reclassified to assets held for sale.

~~(2)~~Includes the retirement and reclassification of accumulated amortization of $49.4 million related to assets associated with the Personal Care business, which were reclassified to assets held for sale.

The following tables summarize the aggregate amortization expense attributable to intangible assets recorded in SG&A in the condensed consolidated statements of income for the periods shown below, as well as our estimated amortization expense for fiscal 2021 through 2026:

(in thousands) Three Months Ended Nine Months Ended
November 30, 2020 $ 4,501 $ 13,527
November 30, 2019 4,790 13,129


~~Estimated Amortization Expense(in thousands)~~
~~Fiscal 2021~~	$	~~16,751~~
~~Fiscal 2022~~	~~10,361~~
~~Fiscal 2023~~	~~10,287~~
~~Fiscal 2024~~	~~9,902~~
~~Fiscal 2025~~	~~9,281~~
~~Fiscal 2026~~	~~7,252~~

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Note 95 - Share-Based Compensation Plans

~~We have equity awards outstanding under several~~As part of our compensation structure, we grant share-based compensation ~~plans. During the three~~awards to certain employees and ~~nine month periods ended November 30, 2020, we had the following share-based compensation activity:~~

•~~We issued 770 and 2,842 shares to~~ non-employee members of ~~the~~our Board of Directors during the fiscal year. These awards may be subject to attainment of certain service conditions, performance conditions and/or market conditions. During the first quarter of fiscal 2022, we granted 83,227 service condition awards (“Service Condition Awards”) with a ~~total~~weighted average grant date fair value of ~~$0.1 million~~$219.02. Additionally, we granted 143,340 performance-based awards during the first quarter of fiscal 2022, of which 71,670 contained performance conditions (“Performance Condition Awards”) and ~~$0.5 million, respectively,~~71,670 contained market conditions (“Market Condition Awards”) with weighted average grant date fair values of $216.20 and ~~average share prices of $207.98 and $184.56,~~$156.08, respectively. Refer to our Form 10-K for further information on the Company's share-based compensation plans.

•We ~~granted time-vested restricted stock units (“RSUs”) that may~~recorded share-based compensation expense in SG&A as follows:


	Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands)	2021		2020		2021		2020
Stock options	$	—	$	3	$	—	$	18
Directors stock compensation	160		161		483		525
Service Condition Awards	3,117		1,677		8,353		5,261
Performance Condition Awards	1,622		4,407		14,706		13,873
Market Condition Awards	1,115		—		3,504		—
Employee stock purchase plan	535		491		1,303		977
Share-based compensation expense	6,549		6,739		28,349		20,654
Less income tax benefits	(784)		(403)		(2,355)		(1,406)
Share-based compensation expense, net of tax	$	5,765	$	6,336	$	25,994	$	19,248

Unrecognized Share-Based Compensation Expense

As of November 30, 2021, our total unrecognized share-based compensation for all awards was $33.8 million, which will be ~~settled for 39 and 2,747 shares of common stock, respectively. The RSUs have~~recognized over a weighted average ~~grant price~~amortization period of ~~$200.00~~2.2 years. The total unrecognized share-based compensation reflects an estimate of target achievement for Performance Condition Awards granted during the first quarter of fiscal 2022 and ~~$170.69 per share, respectively,~~fiscal 2021, and a weighted average estimate of 175% of target achievement for ~~a total award fair value at date of grant of an insignificant amount and $0.5 million, respectively.~~Performance Condition Awards granted in fiscal 2020.

•~~We granted time-vested restricted stock awards (“RSAs”) that may vest for 4,171 and 42,143 shares~~

Note 6 - Repurchases of common stock, respectively. The RSAs have a weighted average grant price of $199.39 and $174.03 per share, respectively, for a total award fair value at date of grant of $0.8 million and $7.3 million, respectively.Common Stock

•~~There were 0 grants~~In August 2021, our Board of ~~performance-based stock units (“PSUs”) during~~Directors authorized the ~~three months ended November 30, 2020. During the nine months ended November 30, 2020, we granted PSUs that may be settled for 4,970 shares~~repurchase of up to $500 million of our outstanding common ~~stock at target.~~stock. The ~~PSUs have a weighted average grant price of $170.27 per share,~~authorization became effective August 25, 2021, for a ~~total award fair value at date~~period of ~~grant of $0.8 million.~~

•~~There were 0 grants of performance-based restricted stock awards (“PSAs”) during the~~ three months ended November 30, 2020. During the nine months ended November 30, 2020, we granted PSAs that may vest for 86,004 shares of common stock at target. The PSAs have a weighted average grant price of $170.27 per share, for a total award fair value at date of grant of $14.6 million.

•~~RSUs for 18,196~~years, and ~~64,948 shares vested, respectively, with a total fair value at settlement of $3.6 million and $11.3 million, respectively, and average share prices of $195.29 and $173.33, respectively.~~

•RSAs for 605 and 7,929 shares vested, respectively, with a total fair value at settlement of $0.1 million and $1.4 million, respectively, and average share prices of $201.29 and $174.75, respectively.

•There were 0 PSUs that vested and settled during the three months ended November 30, 2020. During the nine months ended November 30, 2020, PSUs for 112,720 shares vested and settled, with a total settlement date fair value of $18.6 million, and an average share price of $164.58.

•~~Employees exercised stock options to purchase 850 shares and 13,540 shares of common stock, respectively.~~

•~~There were 12,264 and 26,830 purchases of common stock, respectively, under the employee stock purchase plan at an average price of $139.88 and $134.78 per share, respectively.~~

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~~We recorded the following share-based compensation expense in SG&A for the periods shown below:~~

Three Months Ended November 30, Nine Months Ended November 30,
(in thousands, except per share data) 2020 2019 2020 2019
Stock options $ 3 $ 21 $ 18 $ 172
Directors stock compensation 161 140 525 421
Performance based and other stock awards 6,084 4,138 19,134 17,366
Employee stock purchase plan 491 459 977 784
Share-based compensation expense 6,739 4,758 20,654 18,743
Less income tax benefits (403) (343) (1,406) (1,434)
Share-based compensation expense, net of income tax benefits $ 6,336 $ 4,415 $ 19,248 $ 17,309
Impact of share-based compensation on EPS:
Basic $ 0.25 $ 0.18 $ 0.76 $ 0.69
Diluted $ 0.25 $ 0.17 $ 0.76 $ 0.68

~~Note 10 - Repurchase of Helen of Troy Common Stock~~

In May 2019, we announced that our Board of Directors authorized the repurchase of up to $400 million of our outstanding common stock. The authorization was effective May 8, 2019 for a period of three years and replaced our ~~previous~~former repurchase authorization, of which approximately ~~$107.4~~$79.5 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 November 30, ~~2020,~~2021, our repurchase authorization allowed for the purchase of ~~$190.0~~$497.2 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 equity holder can be ~~paid for~~settled by having the ~~equity~~ holder tender back to ~~the Company~~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:


		Three Months Ended November 30,				Nine Months Ended November 30,					Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands, except share and per share data)	(in thousands, except share and per share data)	2020		2019		2020		2019		(in thousands, except share and per share data)	2021		2020		2021		2020
Common stock repurchased on the open market:	Common stock repurchased on the open market:									Common stock repurchased on the open market:
Number of shares	Number of shares	960,829		0		960,829		0		Number of shares	—		960,829		436,842		960,829
Aggregate value of shares	Aggregate value of shares	$	191,606	$	0	$	191,606	$	0	Aggregate value of shares	$	—	$	191,606	$	95,484	$	191,606
Average price per share	Average price per share	$	199.42	$	0	$	199.42	$	0	Average price per share	$	—	$	199.42	$	218.58	$	199.42

Common stock received in connection with share-based compensation:	Common stock received in connection with share-based compensation:									Common stock received in connection with share-based compensation:
Number of shares	Number of shares	6,115		6,509		67,740		77,067		Number of shares	12,059		6,115		78,206		67,740
Aggregate value of shares	Aggregate value of shares	$	1,194	$	1,002	$	11,355	$	10,133	Aggregate value of shares	$	2,829	$	1,194	$	17,535	$	11,355
Average price per share	Average price per share	$	195.26	$	153.88	$	167.63	$	131.48	Average price per share	$	234.56	$	195.26	$	224.22	$	167.63

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Note 117 - Restructuring Plan

In October 2017, we announced ~~that we had approved~~ a restructuring plan (referred to as “Project Refuel”) intended to ~~improve the~~enhance performance primarily in the Beauty and former Nutritional Supplements segments. Project Refuel includes charges for a reduction-in-force and the elimination of certain contracts. During the first quarter of fiscal 2019, we expanded Project Refuel to include the realignment and streamlining of our supply chain structure. We are targeting total annualized profit improvements of approximately ~~$9.0~~$10.5 million to ~~$11.0~~$12.5 million over the duration of the plan. We estimate the plan ~~will~~to be completed during ~~the first quarter of~~ fiscal 2022 and expect to incur total restructuring charges of approximately ~~$9.5~~$10.3 million over the duration of the ~~plan.~~plan, of which $9.6 million have been incurred through the third quarter of fiscal 2022. Restructuring provisions are determined based on estimates prepared at the time the restructuring actions are approved by management and are revised periodically.

AnWe incurred an insignificant ~~change in the estimate of pre-tax restructuring costs was recorded during the three month period ended November 30, 2020. For the nine month period ended November 30, 2020, we incurred pre-tax restructuring charges of~~amount and $0.4 ~~million. Since implementing Project Refuel, we have incurred $9.1~~ million of pre-tax restructuring costs ~~as of November 30, 2020. During~~during the three and nine months ended November 30, 2021, respectively, which are recorded as “Restructuring charges” in the condensed consolidated statements of income. During the three and nine month periods ended November 30, ~~2020,~~2021, we made total cash restructuring payments of ~~$0.2~~$0.1 million and ~~$0.9~~$0.5 million, ~~respectively, compared to $0.3 million and $1.8 million, respectively, for the same periods last year.~~respectively. Since implementing Project Refuel, we have made total cash restructuring payments of ~~$8.9 million. We had a remaining liability of $0.2~~$9.6 million as of November 30, ~~2020.~~2021.

Note 128 - Commitments and Contingencies

Legal 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.~~liquidity, except as described below.

~~Note 13 - Long-Term Debt~~

~~Credit Agreement~~

As of February 29, 2020, we had a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and other lenders that provided for an unsecured total revolving commitment of $1.0 billion. Borrowings accrued interest under one of two alternative methods (based upon a base rate or LIBOR) as described in the Credit Agreement. With each borrowing against our credit line, we could elect the interest rate method based on our funding needs at the time. We also incurred loan commitment and letter of credit fees under the Credit Agreement.

On March 13, 2020, we entered into an amendment to the Credit Agreement. The amendment extended the maturity of the commitment under the Credit Agreement from December 7, 2021 to March 13, 2025. Further, the amendment increased the unsecured revolving commitment from $1.0 billion to $1.25 billion. The accordion was amended to increase it from $200 million to $300 million and to include the ability to use it for term loan commitments. The accordion permits the Company to request to increase its borrowing capacity, not to exceed the $300 million commitment in the aggregate, provided certain conditions are met, including lender approval. Any increase to term loan commitments and revolving loan commitments must be made on terms identical to the revolving loans under the Credit Agreement and must have a maturity date of no earlier than March 13, 2025. Following the amendment, borrowings under the Credit Agreement bear interest at either the base rate or LIBOR, plus a margin based on the Net Leverage Ratio (as defined in the Credit Agreement) of 0% to 1.0% and 1.0% to 2.0% for base rate and LIBOR borrowings, respectively. Outstanding letters of credit reduce the borrowing availability under

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~~the Credit Agreement on a dollar-for-dollar basis. We are able to repay amounts borrowed at any time without penalty.~~Regulatory Matters

As a global company, we are subject to U.S. and foreign regulations, including environmental, health and safety laws, and industry-specific product certifications. Many of ~~November 30, 2020,~~ the ~~outstanding revolving loan principal balance was~~ ~~$426.0 million (excluding prepaid financing fees)~~products we sell are subject to product safety laws and regulations in various jurisdictions. These laws and regulations specify the maximum allowable levels of certain materials that may be contained in our products, provide statutory prohibitions against misbranded and adulterated products, establish ingredients and manufacturing procedures for certain products, specify product safety testing requirements, and set product identification, labeling and claim requirements. Additionally, some of our product lines within our Health & Home segment are subject to product identification, labeling and claim requirements, which are monitored and enforced by regulatory agencies, such as the U.S. Environmental Protection Agency (the “EPA”), U.S. Customs and Border Protection, the U.S. Food and Drug Administration, and the ~~balance~~U.S. Consumer Product Safety Commission.

In our quarterly report on Form 10-Q for our first quarter of ~~outstanding letters~~fiscal 2022, we disclosed that we were in discussions with the EPA regarding the compliance of ~~credit was $19.2 million. For~~packaging claims on certain of our products in the ~~three~~air and water filtration categories and a limited subset of humidifier products within the Health & Home segment that are sold in the U.S. The EPA did not raise any product quality, safety or performance issues. As a result of these packaging compliance discussions, on May 27, 2021, we voluntarily implemented a temporary stop shipment action across this line of products in the U.S. as we worked with the EPA towards an expedient resolution. In July 2021, the EPA approved modest changes to our labeling claims on packaging of existing water filtration products, which we implemented, and subsequently began shipping in limited quantities during the second quarter of fiscal 2022. The shipping volume for these products has continued to increase and, in September 2021, we returned to a more normalized level of shipping activity. In August 2021, the EPA approved changes to our air filtration packaging and we implemented a repackaging plan. We began shipping limited quantities of the impacted products at the end of August 2021 and returned to a more normalized level of shipping activity in November 2021. We have also resolved the majority of the packaging compliance concerns on the limited subset of humidifier products and do not expect them to have a material impact on our consolidated financial results. Our consolidated and Health & Home segment’s net sales revenue, gross profit and operating income for the nine ~~month periods~~months ended November 30, ~~2020, borrowings under~~2021, have been materially and adversely impacted by the ~~Credit Agreement incurred interest expense at rates ranging from 1.14%~~stop shipment actions and the time needed to ~~3.25%~~execute repackaging plans after changes were approved by the EPA. While we have resumed normalized levels of shipping of the affected inventory, we are still in process of repackaging our existing inventory of affected products. If we are not able to execute our repackaging plans on schedule to meet demand, our net sales revenue, gross profit and ~~1.14%~~operating income could continue to ~~4.75%, respectively. As~~be materially and adversely impacted. At this time, we are not aware of ~~November 30, 2020,~~any fines or penalties related to this matter imposed against us by the ~~amount available for borrowings under the Credit Agreement was $804.8 million. Covenants in the Credit Agreement limit the amount of total indebtedness~~EPA. While we do not anticipate material fines or penalties, there can ~~incur. As of November 30, 2020, these covenants did~~be no assurances that such fines or penalties will not ~~limit our ability to incur $804.8 million of additional debt under the Credit Agreement.~~be imposed.

~~Other Debt Agreements~~

AsDuring the first quarter of ~~November 30, 2020,~~fiscal 2022, we ~~have an aggregate principal balanc~~erecorded a $13.1 million charge to cost of ~~$18.6~~goods sold to write-off the obsolete packaging for the affected products in our inventory on-hand and in-transit as of the end of the first quarter of fiscal 2022. During the second and third quarters of fiscal 2022, we incurred additional compliance costs of $3.0 million ~~(excluding prepaid financing fees) under~~ and $4.9 million, respectively, comprised of incremental warehouse storage costs and legal fees of $2.6 million and $4.6 million, respectively, which were recognized in SG&A, and storage and obsolete packaging charges from vendors of $0.4 million and $0.3 million, respectively, which were recognized in cost of goods sold. These charges are referred to throughout this Form 10-Q as “EPA compliance costs.” In addition, during the second and third quarters of fiscal 2022, we incurred and capitalized into inventory costs to repackage a ~~loan agreement (the “MBFC Loan”) with the Mississippi Business Finance Corporation (the “MBFC”), which was entered into in connection with the issuance by~~ ~~MBFC of taxable industrial development revenue bonds (the “Bonds”).~~ ~~The borrowings were used to fund construction~~portion of our ~~Olive Branch, Mississippi distribution facility. Since March 2018,~~existing inventory of the ~~MBFC Loan can~~affected products and expect to continue to incur and capitalize such costs as we continue to repackage the remainder of the inventory during the fourth quarter of fiscal 2022. We also expect to incur additional compliance costs, which may include incremental freight, warehouse storage costs, charges from

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vendors, and legal fees, among other things. Such potential incremental EPA compliance costs will be ~~called~~expensed as incurred and could materially and adversely impact our consolidated and Health & Home segment’s gross profit and operating income. In addition, our net sales revenue could be materially and adversely impacted by customer returns, an increase in sales discounts and allowances and by the ~~holder~~potential impact of distribution losses at ~~any time. The remaining loan balance is payable as follows: $1.9 million annually on March 1, 2021~~certain retailers. Additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today. Accordingly, our business, results of operations and ~~2022;~~financial condition could be adversely and ~~$14.8 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023.~~

~~On May 14, 2020, Helen of Troy Limited and certain of its subsidiaries entered into the Sixth Amendment~~materially impacted in ways that we are not able to ~~Guaranty Agreement (the “Amended Guaranty”) in favor of Bank of America, N.A. The Amended Guaranty amends the Guaranty Agreement (as amended, the “Guaranty Agreement”)~~predict today. For additional information refer to Part I, Item 2., dated March 1, 2013, made by the Company and certain of its subsidiaries in favor of Bank of America, N.A. and other lenders. Certain of the representations and warranties, and covenants in the Guaranty Agreement were amended by the Amended Guaranty to include or modify certain baskets, exceptions and other customary provisions.

The Bonds were issued under a Trust Indenture, dated as of March 1, 2013 (as supplemented, the “Indenture”), by and between MBFC and U.S. Bank National Association, as trustee (the “Trustee”). On May 14, 2020, MBFC and U.S. Bank National Association, as Trustee, entered into the Fifth Supplemental Trust Indenture, effective May 14, 2020 (the “Fifth Supplemental Indenture”), with the consent of Kaz USA, Inc. (“Kaz USA”) and Bank of America, N.A., the purchaser of the Bonds. The Base Rate (as defined in the Indenture) and Eurodollar Rate (as defined in the Indenture) were each amended. As amended by the Fifth Supplemental Indenture, the Bonds and the related loans to Kaz USA will bear interest at a Base Rate or Eurodollar Rate plus a margin based on the Net Leverage Ratio (as defined in the Fifth Supplemental Indenture). The Fifth Supplemental Indenture amended the pricing grid for the Eurodollar and Base Rate margins.

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 key financial covenants defined in the accompanying Management's“Management’s Discussion and Analysis of Financial Condition and Results of Operations, ~~- Financial Condition, Liquidity~~” including “EPA Compliance Costs” and ~~Capital Resources - Credit and Other Debt Agreements~~. Our debt agreements also contain other customary covenants, including, among other things, covenants restricting or limiting us, except under certain conditions set forth therein, from (1) incurring debt, (2) incurring liens on our properties, (3) making certain types of investments, (4) selling certain assets or making other fundamental changes relating to mergers and consolidations, and (5) repurchasing shares of our common stock and paying dividends. Our debt agreements also contain customary events of default, including failure to pay principal or interest when due, among others. Our debt agreements are

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cross-defaulted to each other. Upon an event of default under our debt agreements, the holders or lenders may, among other things, accelerate the maturity of any amounts outstanding under our debt agreements. The commitments of the lenders to make loans to us under the Credit Agreement are several and not joint. Accordingly, if any lender fails to make loans to us, our available liquidity could be reduced by an amount up to the aggregate amount of such lender’s commitments under the Credit Agreement.Part II, Item 1A., “Risk Factors” included within this Form 10-Q.

~~As of November 30, 2020, we were in compliance with all covenants as defined under the terms of the Credit Agreement and our other debt agreements.~~

Note 9 - Long-Term Debt

A summary of our long-term debt ~~including prepaid financing fees~~ follows:

(in thousands) November 30, 2020 February 29, 2020
MBFC Loan (1) $ 18,548 $ 20,451
Credit Agreement (2) 421,833 318,854
Total long-term debt 440,381 339,305
Less current maturities of long-term debt (1,884) (1,884)
Long-term debt, excluding current maturities $ 438,497 $ 337,421


(in thousands)	November 30, 2021		February 28, 2021
Mississippi Business Finance Corporation Loan (the “MBFC Loan”) (1)	$	16,707	$	18,607
Credit Agreement (2)	434,000		329,000
Subtotal	450,707		347,607
Unamortized prepaid financing fees	(3,239)		(3,977)
Total long-term debt	447,468		343,630
Less: current maturities of long-term debt	(1,884)		(1,884)
Long-term debt, excluding current maturities	$	445,584	$	341,746

(1)The MBFC Loan is unsecured and bears floating interest based on either ~~LIBOR~~the London Interbank Offered Rate (“LIBOR”) plus a margin of up to 2.0%, or a Base Rate plus a margin of up to 1.0%, as determined by the interest rate elected and the Net Leverage Ratio defined in the ~~Indenture. Since March 2018, the~~ loan ~~may be called by the holder~~agreement. The weighted average interest rate on borrowings outstanding was1.1% at ~~any time. The loan can be prepaid without penalty. The remaining principal balance is payable as follows: $1.9 million annually on March 1,~~both November 30, 2021 and ~~2022; and $14.8 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023.~~February 28, 2021.

(2)The Credit ~~Agreement's~~ Agreement (defined below) is unsecured and bears floating interest at either the Base Rate or LIBOR, plus a margin based on the Net Leverage Ratio (as defined in the Credit Agreement) of 0% to 1.0% and 1.0% to 2.0% for Base Rate and LIBOR borrowings, respectively. These floating interest rates are hedged with interest rate swaps to effectively fix interest rates on $225 million of the outstanding principal balance under the Credit Agreement (see Notes ~~14, 15~~10, 11, and 1612 for additional information regarding ~~the~~ interest rate swaps). The weighted average interest rate on borrowings outstanding was 1.1% at both November 30, 2021 and February 28, 2021.

~~At November 30, 2020 and February 29, 2020, our long-term debt has floating interest rates, and its book value approximates its fair value.~~Credit Agreement

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 $1.25 billion. As of November 30, 2021, the balance of outstanding letters of credit was $32.7 million and the amount available for borrowings was $783.3 million. Covenants in the Credit Agreement limit the amount of total indebtedness we can incur. As of November 30, 2021, these covenants effectively limited our ability to incur more than $735.8 million of additional debt from all sources, including the Credit Agreement, or $783.3 million in the event a qualified acquisition is consummated.

Debt Covenants

As of November 30, 2021, we were in compliance with all covenants as defined under the terms of the Credit Agreement and our other debt agreements.

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Note 1410 - Fair Value

~~We classify our various assets and liabilities recorded~~Fair value is defined as the price that would be received to sell an asset or ~~reported~~paid to transfer a liability in an orderly transaction between market participants at ~~fair value~~the measurement date. Valuation techniques under ~~a hierarchy prescribed by GAAP that prioritizes inputs~~the accounting guidance related to fair value ~~measurement techniques~~measurements are based on observable and unobservable inputs. These inputs are classified into ~~three broad levels:~~the following hierarchy:

Level 1:~~Observable inputs such as quoted~~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.

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~~The following tables present the fair value of our financial assets and liabilities measured on a recurring basis as of the end of the periods shown:~~

Fair Values (1)
(in thousands) November 30, 2020 February 29, 2020
Assets:
Money market accounts $ 118,559 $ 2,648
Interest rate swaps 0 0
Foreign currency contracts 7 2,083
Total assets $ 118,566 $ 4,731

Liabilities:
Floating rate debt $ 440,381 $ 339,305
Interest rate swaps 11,627 10,717
Foreign currency contracts 5,328 159
Total liabilities $ 457,336 $ 350,181

~~(1)~~Our financial assets and liabilities are classified as Level 2 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. The following tables present the carrying amount and fair value of our financial assets and liabilities measured and recorded at fair value on a recurring basis and classified as Level 2 as follows:


	Carrying Amount and Fair Value

(in thousands)	November 30, 2021		February 28, 2021
Assets:
Cash equivalents (money market accounts)	$	791	$	1,631

Foreign currency derivatives	3,448		33
Total assets	$	4,239	$	1,664

Liabilities:

Interest rate swaps	$	5,186	$	9,941
Foreign currency derivatives	658		6,550
Total liabilities	$	5,844	$	16,491

The carrying amounts of cash, accounts payable, accrued expenses and ~~cash equivalents, receivables~~other current liabilities and ~~accounts~~income taxes payable approximate fair value because of the short maturity of these items. The carrying amounts of receivables approximate fair value due to the effect of the related allowance for credit losses. The carrying amount of our floating rate debt approximates its fair value.

We use derivatives ~~for hedging purposes and~~to manage our ~~derivatives are primarily interest rate swaps,~~exposure to changes in foreign currency exchange rates, which can include foreign currency forward contracts, zero cost collars and cross-currency debt swaps. In addition, we use interest rate swaps to manage our exposure to changes in interest rates. All of our derivative assets and liabilities are recorded at fair value. See Notes ~~13, 15~~11 and ~~16 to these condensed consolidated financial statements~~12 for more information on our ~~hedging activities.~~derivatives.

We classify our floating rate debt as a Level 2 item because the estimation of the fair market value 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 book value of the floating rate debt approximates its fair value as of the reporting date.

Our other non-financial assets include goodwill, other intangible assets and assets held for sale, 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 8 to these condensed consolidated financial statements contains additional information related to goodwill and intangible assets, and our impairment testing.

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Note 1511 - Financial Instruments and Risk Management

Foreign Currency Risk

~~Our~~The U.S. Dollar is the functional currency for the Company and all of its subsidiaries and is also the ~~U.S. Dollar.~~reporting currency for the Company. 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. ~~During~~For both the three and nine month periods ended November 30, ~~2020,~~2021, approximately ~~11% and 12%, respectively,~~10% of our net sales revenue was denominated in foreign currencies, compared to ~~17%~~11% and ~~14%~~12%, respectively, for the same periods last year. These sales were primarily denominated in ~~Euros,~~ British Pounds, Euros, Mexican Pesos and Canadian ~~Dollars, and Mexican Pesos.~~Dollars. We make most of our inventory purchases from vendors in the ~~Far East~~Asia Pacific market and primarily use the U.S. Dollar for such purchases.

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In our condensed consolidated statements of income, foreign currency exchange rate 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 currency exchange rate gains and losses are recognized in SG&A. During the three and nine month periods ended November 30, ~~2020,~~2021, we recorded ~~net exchange gains from~~ foreign currency ~~fluctuations, including the impact~~exchange rate net losses of ~~currency hedges and the cross-currency debt swaps, of $0.4~~$0.3 million and ~~$0.5~~$0.8 million, respectively, in SG&A compared to ~~net~~ foreign currency exchange rate net gains of ~~$0.6~~$0.4 million and ~~$2.2~~$0.5 million, respectively, for the same periods last year.

We ~~hedge against~~mitigate certain foreign currency exchange ~~rate-risk~~rate risk by using a series of foreign currency contracts, which can include forward contracts and zero-cost collars, designated as cash flow hedges, and mark-to-market ~~derivatives~~cross-currency debt swaps to protect against the foreign currency exchange rate risk inherent in our forecasted transactions denominated in ~~currencies other than the U.S. Dollar.~~foreign currencies. We do not enter into any ~~forward exchange contracts~~derivatives or similar instruments for trading or other speculative purposes. ~~The effective portion of~~Our foreign currency contracts are designated as cash flow hedges and are recorded on the balance sheet at fair value with changes in fair value ~~of these instruments~~recorded in Other Comprehensive Income (Loss) (“OCI”) until the hedge transaction is ~~reported in~~settled, at which point amounts are reclassified from Accumulated Other Comprehensive Income (Loss) (“AOCI”) to our condensed consolidated statements of income. Derivatives for which we have not elected hedge accounting consist of our cross-currency debt swaps, and ~~reclassified into SG&A~~any changes in the ~~same period they~~fair value of the derivatives are ~~settled. The ineffective portion,~~recorded in our condensed consolidated statements of income. We evaluate our derivatives designated as cash flow hedges each quarter to assess hedge effectiveness. Any ineffectiveness, which is not material for any ~~year~~period presented, is immediately recognized in ~~SG&A.~~our condensed consolidated statements of income.

Interest Rate Risk

Interest on our outstanding debt as of November 30, ~~2020~~2021 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 interest rate swaps to effectively fix interest rates on $225.0 million of the outstanding principal balance under the Credit Agreement, which totaled ~~$426.0~~$434.0 million ~~(excluding prepaid finance fees)~~ as of November 30, ~~2020.~~2021. Our interest rate swaps are designated as cash flow hedges and are recorded on the balance sheet at fair value with changes in fair value recorded in OCI until the hedge transaction is settled, at which point amounts are reclassified from AOCI to our condensed consolidated statements of income. We evaluate our derivatives designated as cash flow hedges each quarter to assess hedge effectiveness. Any ineffectiveness, which is not material for any period presented, is immediately recognized in our condensed consolidated statements of income.

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The following ~~table summarizes~~tables summarize the fair values of our derivative instruments as of the end of the periods ~~shown:~~presented:

(in thousands) November 30, 2020

Derivatives designated as hedging instruments Hedge
Type Final
Settlement Date Notional Amount Prepaid
Expenses
and Other
Current Assets Other Assets Accrued
Expenses
and Other
Current Liabilities Other
Liabilities, Non- current
Zero-cost collar - Euro Cash flow 02/2021 € 2,000 $ 0 $ 0 $ 15 $ 0
Foreign currency contracts - sell Euro Cash flow 02/2022 € 46,000 0 0 1,758 433
Foreign currency contracts - sell Canadian Dollar Cash flow 02/2022 $ 26,000 0 0 763 93
Zero-cost collar - Pound Cash flow 02/2021 £ 2,000 0 0 122 0
Foreign currency contracts - sell Pound Cash flow 02/2022 £ 23,790 0 0 662 266
Foreign currency contracts - sell Mexican Peso Cash flow 02/2021 $ 30,000 7 0 0 0
Interest rate swaps Cash flow 01/2024 $ 225,000 0 0 4,986 6,641
Subtotal 7 0 8,306 7,433
Derivatives not designated under hedge accounting
Foreign currency contracts - cross-currency debt swaps - Euro (1) 04/2022 € 6,000 0 0 0 732
Foreign currency contracts - cross-currency debt swaps - Pound (1) 04/2022 £ 4,500 0 0 0 484
Subtotal 0 0 0 1,216
Total fair value $ 7 $ 0 $ 8,306 $ 8,649


(in thousands)	November 30, 2021
Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non- current

Forward contracts - sell Euro	Cash flow	2/2023	€	30,500	$	1,494	$	157	$	—	$	—
Forward contracts - sell Canadian Dollars	Cash flow	2/2023	$	34,700	344		148		—		—
Forward contracts - sell Pounds	Cash flow	2/2023	£	28,250	953		352		—		—



Interest rate swaps	Cash flow	1/2024	$	225,000	—		—		2,411		2,775
Subtotal					2,791		657		2,411		2,775

Derivatives not designated under hedge accounting
Cross-currency debt swaps - Euro	(1)	4/2022	€	6,000	—		—		272		—
Cross-currency debt swaps - Pounds	(1)	4/2022	£	4,500	—		—		386		—
Subtotal					—		—		658		—
Total fair value					$	2,791	$	657	$	3,069	$	2,775

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(in thousands) February 29, 2020

Derivatives designated as hedging instruments Hedge Type Final
Settlement Date Notional Amount Prepaid
Expenses
and Other
Current Assets Other Assets Accrued
Expenses
and Other
Current Liabilities Other
Liabilities, Non- current
Zero-cost collar - Euro Cash flow 02/2021 € 8,000 $ 74 $ 0 $ 0 $ 0
Foreign currency contracts - sell Euro Cash flow 05/2021 € 25,875 837 0 0 15
Foreign currency contracts - sell Canadian Dollar Cash flow 02/2021 $ 14,000 202 0 0 0
Zero-cost collar - Pound Cash flow 02/2021 £ 6,500 0 0 144 0
Foreign currency contracts - sell Pound Cash flow 05/2021 £ 13,000 435 23 0 0
Foreign currency contracts - sell Mexican Peso Cash flow 05/2020 $ 10,000 12 0 0 0
Interest rate swaps Cash flow 01/2024 $ 225,000 0 0 3,489 7,228
Subtotal 1,560 23 3,633 7,243
Derivatives not designated under hedge accounting
Foreign currency contracts - cross-currency debt swaps - Euro (1) 04/2020 € 4,400 473 0 0 0
Foreign currency contracts - cross-currency debt swaps - Pound (1) 04/2020 £ 5,000 27 0 0 0
Subtotal 500 0 0 0
Total fair value $ 2,060 $ 23 $ 3,633 $ 7,243


(in thousands)	February 28, 2021
Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non- current

Forward contracts - sell Euro	Cash flow	2/2022	€	39,000	$	—	$	—	$	1,851	$	—
Forward contracts - sell Canadian Dollars	Cash flow	2/2023	$	34,000	—		33		1,061		—

Forward contracts - sell Pounds	Cash flow	2/2023	£	34,500	—		—		2,026		21

Forward contracts - sell Australian Dollars	Cash flow	11/2021	A$	4,000	—		—		18		—
Interest rate swaps	Cash flow	1/2024	$	225,000	—		—		4,407		5,534
Subtotal					—		33		9,363		5,555

Derivatives not designated under hedge accounting
Cross-currency debt swaps - Euro	(1)	4/2022	€	6,000	—		—		—		817
Cross-currency debt swaps - Pounds	(1)	4/2022	£	4,500	—		—		—		756
Subtotal					—		—		—		1,573
Total fair value					$	—	$	33	$	9,363	$	7,128

(1)These ~~are foreign currency contracts~~cross-currency debt swaps, for which we have not elected hedge ~~accounting. We refer to them as “cross-currency debt swaps”. They, in effect,~~accounting, 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.

The ~~following table summarizes the~~ pre-tax ~~effect~~effects of derivative instruments designated as cash flow hedges were as follows for the periods ~~shown:~~presented:


		Three Months Ended November 30,															Three Months Ended November 30,
		Gain (Loss) Recognized in AOCI				Gain (Loss) Reclassified from AOCI into Income					Gain (Loss) Recognized in Income						Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income
(in thousands)	(in thousands)	2020		2019		Location	2020		2019		Location	2020		2019		(in thousands)	2021			Location	2021
Currency contracts - cash flow hedges		$	1,550	$	(2,739)	SG&A	$	549	$	(630)		$	0	$	0
Foreign currency contracts - cash flow hedges																Foreign currency contracts - cash flow hedges	$	3,686		Sales revenue, net	$	(354)
Interest rate swaps - cash flow hedges	Interest rate swaps - cash flow hedges	1,539		2,084		Interest expense	0		0		Interest expense	(1,289)		(162)		Interest rate swaps - cash flow hedges	1,045			Interest expense	(1,300)
Cross-currency debt swaps - principal		0		0			0		0		SG&A	23		(389)
Cross-currency debt swaps - interest		0		0			0		0		Interest Expense	(2)		73

Total	Total	$	3,089	$	(655)		$	549	$	(630)		$	(1,268)	$	(478)	Total	$	4,731			$	(1,654)

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		Nine Months Ended November 30,															Three Months Ended November 30,
		Gain (Loss) Recognized in AOCI				Gain (Loss) Reclassified from AOCI into Income					Gain (Loss) Recognized in Income						Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income
(in thousands)	(in thousands)	2020		2019		Location	2020		2019		Location	2020		2019		(in thousands)	2020		Location	2020
Currency contracts - cash flow hedges		$	(5,653)	$	(3,407)	SG&A	$	(124)	$	(2,840)		$	0	$	0
Foreign currency contracts - cash flow hedges																Foreign currency contracts - cash flow hedges	$	452	SG&A	$	(549)
Interest rate swaps - cash flow hedges	Interest rate swaps - cash flow hedges	(910)		(7,242)		Interest expense	0		0		Interest expense	(3,222)		69		Interest rate swaps - cash flow hedges	250		Interest expense	(1,289)
Cross-currency debt swaps - principal		0		0			0		0		SG&A	(1,075)		419
Cross-currency debt swaps - interest		0		0			0		0		Interest expense	72		147

Total	Total	$	(6,563)	$	(10,649)		$	(124)	$	(2,840)		$	(4,225)	$	635	Total	$	702		$	(1,838)


	Nine Months Ended November 30,
	Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income
(in thousands)	2021			Location	2021
Foreign currency contracts - cash flow hedges	$	5,951		Sales revenue, net	$	(2,441)
Interest rate swaps - cash flow hedges	821			Interest expense	(3,934)


Total	$	6,772			$	(6,375)


	Nine Months Ended November 30,
	Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income
(in thousands)	2020		Location	2020
Foreign currency contracts - cash flow hedges	$	(5,405)	SG&A	$	124
Interest rate swaps - cash flow hedges	(4,132)		Interest expense	(3,222)


Total	$	(9,537)		$	(3,098)

The pre-tax effects of derivative instruments not designated under hedge accounting were as follows for the periods presented:


	Gain (Loss) Recognized in Income
		Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands)	Location	2021		2020		2021		2020
Cross-currency debt swaps - principal	SG&A	$	575	$	23	$	915	$	(1,075)
Cross-currency debt swaps - interest	Interest expense	(1)		(2)		(3)		72
Total		$	574	$	21	$	912	$	(1,003)

We expect ~~pre-tax losses~~a net gain of ~~$8.3~~$0.4 million associated with foreign currency contracts and interest rate swaps currently reported in ~~accumulated other comprehensive income,~~AOCI to be reclassified into income

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over the next twelve months. The amount ultimately realized, however, will differ as exchange rates ~~vary~~and interest rates change and the underlying contracts settle. See Notes 10 and 12 to these condensed consolidated financial statements for more information.

Counterparty Credit Risk

Financial instruments, including foreign currency contracts, ~~and~~ cross-currency debt swaps and interest rate swaps, expose us to counterparty credit risk for non-performance. We manage our exposure to counterparty credit risk by only dealing with counterparties who are substantial international financial

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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~~We believe that the risk of incurring credit losses is remote.

Note 1612 - Accumulated Other Comprehensive Income (Loss)

The ~~following table summarizes~~ changes in AOCI by component and related tax effects for the periods ~~shown:~~presented were as follows:


(in thousands)	(in thousands)	Interest Rate Swaps		Foreign Currency Contracts		Total		(in thousands)	Interest Rate Swaps		Foreign Currency Contracts		Total
Balance at February 29, 2020	Balance at February 29, 2020	$	(8,199)	$	1,194	$	(7,005)	Balance at February 29, 2020	$	(8,199)	$	1,194	$	(7,005)
Other comprehensive loss before reclassification	Other comprehensive loss before reclassification	(910)		(5,653)		(6,563)		Other comprehensive loss before reclassification	(4,132)		(5,405)		(9,537)
Amounts reclassified out of AOCI	Amounts reclassified out of AOCI	0		124		124		Amounts reclassified out of AOCI	3,222		(124)		3,098
Tax effects	Tax effects	214		945		1,159		Tax effects	214		945		1,159
Other comprehensive loss	Other comprehensive loss	(696)		(4,584)		(5,280)		Other comprehensive loss	(696)		(4,584)		(5,280)
Balance at November 30, 2020	Balance at November 30, 2020	$	(8,895)	$	(3,390)	$	(12,285)	Balance at November 30, 2020	$	(8,895)	$	(3,390)	$	(12,285)

Balance at February 28, 2019		$	132	$	1,059	$	1,191
Other comprehensive loss before reclassification		(7,242)		(3,407)		(10,649)
Balance at February 28, 2021								Balance at February 28, 2021	$	(7,576)	$	(4,080)	$	(11,656)
Other comprehensive income before reclassification								Other comprehensive income before reclassification	821		5,951		6,772
Amounts reclassified out of AOCI	Amounts reclassified out of AOCI	0		2,840		2,840		Amounts reclassified out of AOCI	3,934		2,441		6,375
Tax effects	Tax effects	1,680		53		1,733		Tax effects	(1,132)		(1,425)		(2,557)
Other comprehensive loss		(5,562)		(514)		(6,076)
Balance at November 30, 2019		$	(5,430)	$	545	$	(4,885)
Other comprehensive income								Other comprehensive income	3,623		6,967		10,590
Balance at November 30, 2021								Balance at November 30, 2021	$	(3,953)	$	2,887	$	(1,066)

See Notes ~~13, 14~~9, 10 and 1511 to these condensed consolidated financial statements for additional information regarding our ~~hedging activities.~~cash flow hedges.

Note 1713 - Segment Information

The following tables ~~present~~summarize segment information for the periods ~~shown:~~presented:


		Three Months Ended November 30, 2020									Three Months Ended November 30, 2021
(in thousands)	(in thousands)	Housewares		Health & Home		Beauty (1)		Total		(in thousands)	Housewares		Health & Home		Beauty		Total
Sales revenue, net	Sales revenue, net	$	222,400	$	250,158	$	165,179	$	637,737	Sales revenue, net	$	246,135	$	203,900	$	174,849	$	624,884
Restructuring charges	Restructuring charges	(12)		0		0		(12)		Restructuring charges	—		—		5		5
Operating income	Operating income	37,658		30,478		32,573		100,709		Operating income	43,239		13,573		33,228		90,040
Capital and intangible asset expenditures	Capital and intangible asset expenditures	1,375		2,441		370		4,186		Capital and intangible asset expenditures	16,159		633		783		17,575
Depreciation and amortization	Depreciation and amortization	2,371		4,106		3,042		9,519		Depreciation and amortization	2,894		2,529		3,218		8,641


	Three Months Ended November 30, 2020
(in thousands)	Housewares		Health & Home		Beauty		Total
Sales revenue, net	$	222,400	$	250,158	$	165,179	$	637,737
Restructuring charges	(12)		—		—		(12)

Operating income	37,658		30,478		32,573		100,709
Capital and intangible asset expenditures	1,375		2,441		370		4,186
Depreciation and amortization	2,371		4,106		3,042		9,519

2319

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		Three Months Ended November 30, 2019									Nine Months Ended November 30, 2021
(in thousands)	(in thousands)	Housewares		Health & Home		Beauty		Total		(in thousands)	Housewares		Health & Home		Beauty		Total
Sales revenue, net	Sales revenue, net	$	183,211	$	185,810	$	105,716	$	474,737	Sales revenue, net	$	654,997	$	549,475	$	436,863	$	1,641,335
Restructuring charges	Restructuring charges	0		0		12		12		Restructuring charges	369		—		11		380

Operating income	Operating income	42,272		24,372		12,625		79,269		Operating income	112,303		29,616		80,247		222,166
Capital and intangible asset expenditures	Capital and intangible asset expenditures	2,272		1,917		197		4,386		Capital and intangible asset expenditures	36,196		3,613		1,720		41,529
Depreciation and amortization	Depreciation and amortization	2,263		3,740		2,757		8,760		Depreciation and amortization	8,257		7,879		9,946		26,082

Nine Months Ended November 30, 2020
(in thousands) Housewares Health & Home Beauty (1) Total
Sales revenue, net $ 564,891 $ 661,568 $ 362,965 $ 1,589,424
Restructuring charges 251 0 104 355
Operating income 106,294 95,782 54,887 256,963
Capital and intangible asset expenditures 6,912 10,346 2,165 19,423
Depreciation and amortization 6,743 12,331 8,921 27,995

Nine Months Ended November 30, 2019
(in thousands) Housewares Health & Home Beauty Total
Sales revenue, net $ 496,017 $ 499,543 $ 269,507 $ 1,265,067
Restructuring charges 90 0 971 1,061
Operating income 109,170 51,836 19,990 180,996
Capital and intangible asset expenditures 8,354 4,115 778 13,247
Depreciation and amortization 5,292 12,322 7,262 24,876

~~(1)~~The three and nine month periods ended November 30, 2020 include three and nine months of operating results for Drybar Products, respectively, which was acquired on January 23, 2020, with no comparable results in the same periods last year. For additional information regarding the Drybar Products acquisition, see Note 7 to the accompanying condensed consolidated financial statements.

We compute segment operating income based on net sales revenue, less cost of goods sold, SG&A, restructuring charges, 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 do not allocate non-operating income and expense, including interest or income taxes, to operating segments.


	Nine Months Ended November 30, 2020
(in thousands)	Housewares		Health & Home		Beauty		Total
Sales revenue, net	$	564,891	$	661,568	$	362,965	$	1,589,424
Restructuring charges	251		—		104		355

Operating income	106,294		95,782		54,887		256,963
Capital and intangible asset expenditures	6,912		10,346		2,165		19,423
Depreciation and amortization	6,743		12,331		8,921		27,995

Note 1814 - Income Taxes

~~The period-over-period comparison of our effective tax rate is often impacted by~~We reorganized the ~~mix of taxable income in our various tax jurisdictions. Due to our organization~~Company in Bermuda in 1994 and ~~the ownership structure~~many of our foreign subsidiaries ~~many of which~~ are not ~~owned~~ directly or indirectly owned by a U.S. ~~parent company, an immaterial amount~~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 ~~our~~ 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.

For interim periods, our income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including changes in tax laws, changes in estimated exposures for uncertain tax positions and other items.

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~~For~~On March 11, 2021, the ~~three months ended November 30, 2020, income~~American Rescue Plan Act (the “ARP”) was enacted and signed into law. The ARP is an economic stimulus package in response to the COVID-19 outbreak which contains tax ~~expense as~~provisions that did not have a ~~percentage of income before income tax was 14.0% compared~~material impact to ~~10.3% for the same period last year. The year-over-year increase in the effective tax rate is primarily due to an increase in liabilities related to uncertain tax positions.~~our condensed consolidated financial statements.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security ~~(“CARES”~~Act (the “CARES Act”) ~~Act~~ was enacted and signed into law. The CARES Act is an emergency economic stimulus package in response to the COVID-19 outbreak that contains numerous tax provisions. Among other things, the CARES Act included technical corrections to the effective date language in the Tax Cuts and Jobs Act, enacted into law on December 22, 2017 (the “Tax Act”), related to net operating loss carrybacks.

Upon the enactment of the Tax Act in fiscal 2018, there was a net operating loss on our balance sheet, which was measured using the U.S. statutory tax rate in effect prior to enactment. As a result of the Tax Act, we were required to record a one-time charge of $17.9 million in fiscal 2018, which included a charge of $9.4 million to remeasure the net operating loss at the reduced rate at which it was expected to reverse in the future. The CARES Act effectively reversed the impact of the Tax Act on our net operating loss, resulting in a corresponding tax benefit of $9.4 million recorded in the first quarter of fiscal 2021.

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year period, partially offset by shifts in the mix of income in our various tax jurisdictions. For the nine months ended November 30, 2021, income tax expense as a percentage of ~~9.6%~~income before income tax was 13.6% compared to 6.5% for the same period last year, primarily due to ~~this benefit. Income~~the mix of income in our various tax ~~expense for~~jurisdictions and the ~~nine months ended November 30, 2020 also includes other discrete benefits to include reductions~~benefit of ~~U.S. BEAT tax (Base Erosion and Anti-Abuse) and GILTI tax (Global Intangible Low-Tax Income),~~ the ~~recognition of excess tax benefits from share-based compensation settlements, and one-time benefits related to the transition of our Macau entity from offshore to onshore status,~~CARES Act in fiscal 2021, partially offset by the favorable comparative impact of increases in liabilities related to uncertain tax ~~positions.~~

~~During fiscal 2017, we received an assessment from a state tax authority which adjusted taxable income applicable to~~positions in the particular state resulting from interpretations of certain state income tax provisions applicable to our legal structure. During the time the dispute was ongoing, we believe we accurately reported our taxable income and vigorously protested the assessment through administrative processes with the state. During the quarter, we reached an agreement in principle to settle the $6.0 million assessment in dispute for $0.5 million. The agreement was signed on December 4, 2020.

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 currently have an indefinite tax holiday in Macau conditioned on the subsidiary meeting certain employment and investment thresholds. The Macau Offshore Law and its supplementary regulations that grant tax incentives to approved offshore institutions will be abolished on January 1, 2021. Existing approved offshore institutions such as ours can continue to operate under the offshore regime until the end of the calendarprior year 2020. Beginning in calendar year 2021, our Macau subsidiary will transition to onshore status and become subject to a statutory corporate income tax of approximately 12%. We expect the impact of this change to increase our overall effective tax rate by 1.5 to 2.0 percentage points on an annual basis, beginning with our fiscal 2022. 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.period.

Note 1915 - 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, PSUs, RSAs, PSAs~~restricted stock units, performance stock units, restricted stock awards and performance restricted stock awards and other stock based awards. Anti-dilutive securities are not included in the computation of diluted earnings per share under the treasury stock

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method. See Note 95 to these condensed consolidated financial statements for more information regarding stock-based awards.

The following table presents our weighted average basic and diluted shares outstanding for the periods shown:


		Three Months Ended November 30,		Nine Months Ended November 30,			Three Months Ended November 30,		Nine Months Ended November 30,
(in thousands)	(in thousands)	2020	2019	2020	2019	(in thousands)	2021	2020	2021	2020
Weighted average shares outstanding, basic	Weighted average shares outstanding, basic	24,965	25,161	25,182	25,099	Weighted average shares outstanding, basic	24,129	24,965	24,193	25,182
Incremental shares from share-based compensation arrangements	Incremental shares from share-based compensation arrangements	227	235	168	196	Incremental shares from share-based compensation arrangements	270	227	268	168
Weighted average shares outstanding, diluted	Weighted average shares outstanding, diluted	25,192	25,396	25,350	25,295	Weighted average shares outstanding, diluted	24,399	25,192	24,461	25,350

Anti-dilutive securities	Anti-dilutive securities	4	134	149	217	Anti-dilutive securities	20	4	16	149

Note 2016 - Subsequent Events

On December ~~22, 2020,~~29, 2021, we ~~entered into an amended~~completed the acquisition of Osprey Packs, Inc., a longtime U.S. leader in technical and ~~extended Trademark License~~everyday packs. The total purchase consideration, net of cash acquired, was $414.7 million in cash, including the impact of a $5.3 million favorable customary closing net working capital adjustment. The acquisition was funded with cash on hand and a $435.0 million borrowing under our existing revolving credit facility. After giving effect to the borrowing, as of December 29, 2021, the remaining amount available for borrowings under our Credit Agreement ~~with Revlon to license Revlon’s trademark for hair care appliances and tools (the “Revlon License”).~~was $351.8 million. The Revlon License grants us an exclusive, global, fully paid-up license to use the licensed trademark to manufacture, sell and distribute licensed merchandise in accordance with the terms of the agreement. The Revlon License has an initial term of 40 years, which will automatically renew at the end of the initial term for 3 consecutive additional 20-year periods unless we give notice of non-renewal. The Revlon License amends and restates the existing Revlon trademark licensing agreements entirely, and eliminates ongoing royalties we have historically paid and recognized as expense within SG&A in accordance with such agreements. In exchangeaccounting for this ~~exclusive global license, we paid a one-time, up-front license fee~~business combination is in process. We incurred acquisition-related expenses of ~~$72.5~~$1.6 million during the third quarter of fiscal 2022, which ~~will be recorded as an intangible asset at cost and amortized on a straight-line basis over a useful life~~were recognized in SG&A within our condensed consolidated statements of 40 years, representing the initial term. As a result of the Revlon License, we are no longer obligated to pay royalties to Revlon, and thus will not recognize royalty expense after December 22, 2020, the effective date of the Revlon License.income.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) ~~contains~~should be read in conjunction with our condensed consolidated financial statements included under Part I, Item 1., “Financial Statements.” The various sections of this MD&A contain a number of forward-looking statements, all of which are based on our current expectations. Actual results may differ materially due to a number of factors, including those discussed in Part II, Item 1A.,“Risk Factors,” and in the section entitled “Information Regarding Forward-Looking Statements” following this MD&A, and in Part I, Item ~~3 of this report,~~3., “Quantitative and Qualitative Disclosures ~~about~~About Market Risk” ~~and “Information Regarding Forward-Looking Statements”~~ in this report, ~~and~~as well as in Part II, Item IA., “Risk Factors” in the Company’s most recent annual report on Form 10-K for the fiscal year ended February ~~29, 2020~~28, 2021 (“Form 10-K”) and its other filings with the Securities and Exchange Commission (the “SEC”). ~~This discussion should be read in conjunction with our condensed consolidated financial statements included under Part I, Item 1 of this report.~~ When used in this MD&A, 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. Throughout this MD&A, we refer to our Leadership Brands, which are brands that have number-one and number-two positions in their respective categories and ~~consist of the~~include OXO, Honeywell, Braun, PUR, Hydro Flask, Vicks, Hot Tools and ~~Drybar brands.~~Drybar.

This MD&A, including the tables under the headings “Operating ~~income, operating margin, adjusted operating income~~Income, Operating Margin, Adjusted Operating Income (non-GAAP), and ~~adjusted operating margin~~Adjusted Operating Margin (non-GAAP) by ~~segment"~~Segment” and “Net Income, ~~diluted~~Diluted EPS, ~~adjusted income~~Adjusted Income (non-GAAP), and ~~adjusted diluted~~Adjusted Diluted EPS (non-GAAP),” ~~respectively,~~ reports operating income, operating margin, net income and diluted earnings per share (“EPS”) without the impact of ~~non-cash asset impairment charges,~~ acquisition-related expenses, EPA compliance costs, restructuring charges, tax reform, amortization of intangible assets, and non-cash share-based compensation for the periods presented, as applicable. These measures may be considered non-GAAP financial information as set forth in SEC Regulation G, Rule 100. The tables reconcile these measures to their corresponding GAAP-based measures presented in our condensed consolidated statements of income. We believe that adjusted operating income, adjusted operating margin, adjusted income, and adjusted diluted EPS provide useful information to management and investors regarding financial and business trends relating to our financial condition and results of operations. We believe that these non-GAAP financial measures, in combination with our financial results calculated in accordance with GAAP, provide investors with additional perspective regarding the impact of such ~~charges/~~charges and benefits on applicable income, margin and earnings per share measures. We also believe that these non-GAAP measures facilitate a more direct comparison of our performance to our competitors. We further believe that including the excluded ~~charges/~~charges and benefits would not accurately reflect the underlying performance of our ~~continuing~~ operations for the period in which the ~~charges/~~charges and benefits are incurred, even though such ~~charges/~~charges and benefits may be incurred and reflected in our GAAP financial results in the near future. The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures do not reflect the full economic impact of our activities. Our adjusted operating income, adjusted operating margin, adjusted income, and adjusted diluted EPS are not prepared in accordance with GAAP, are not an alternative to GAAP financial information and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, undue reliance should not be placed on non-GAAP information. These non-GAAP measures are discussed further and reconciled to their applicable ~~GAAP based~~GAAP-based measures contained in this MD&A beginning on page ~~40.~~37.

There were no material changes to the key financial measures discussed in our ~~annual report on~~ Form ~~10-K for the period ending February 29, 2020.~~10-K.

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~~OVERVIEW~~Overview

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 leading global consumer products company offering creative products and solutions for our customers through a diversified portfolio of ~~well-recognized and widely-trusted~~ brands. We have built leading market positions through new product innovation, product quality and competitive pricing. We currently operate in three segments consisting of Housewares, Health & Home, and Beauty.

In fiscal 2015, we launched a five-year transformational strategy designed to improve the performance of our business segments and strengthen our shared service capabilities. Fiscal 2019 marked the completion of Phase I of our multi-year transformation strategy, which delivered performance across a wide range of measures. We improved organic sales growth by focusing on our Leadership Brands, made strategic acquisitions, became a more efficient operating company with strong global shared services, upgraded our organization and culture, improved inventory turns and return on invested capital, and returned capital to shareholders.

Fiscal 2020 began Phase II of our transformation, which is designed to drive the next five years of progress. The long-term objectives of Phase II include improved organic sales growth, continued margin expansion, and strategic and effective capital deployment. ~~We expect~~ Phase II ~~will include~~includes continued investment in our Leadership Brands, with a focus on growing them through consumer-centric innovation, expanding them more aggressively outside the United States of America (the “U.S.”), and adding new brands through acquisition. We ~~anticipate~~are building further shared service capability and operating efficiency, as well as focusing on attracting, retaining, unifying and training the best people. Additionally, we are enhancing and consolidating our environmental, social and governance efforts and accelerating programs related to diversity, equity and inclusion to support our Phase II transformation.

In fiscal 2018, we announced a restructuring plan (referred to as “Project Refuel”) intended to enhance the performance primarily in the Beauty and former Nutritional Supplements segments. Project Refuel includes charges for a reduction-in-force and the elimination of certain contracts. During the first quarter of fiscal 2019, we expanded Project Refuel to include the realignment and streamlining of our supply chain structure. We are targeting total annualized profit improvements of approximately ~~$9.0~~$10.5 million to ~~$11.0~~$12.5 million over the duration of the plan.

~~On January 23, 2020, we~~ We estimate the plan to be completed during fiscal 2022 and expect to incur total restructuring charges of approximately $10.3 million over the acquisition of Drybar Products LLC (“Drybar Products”), for approximately $255.9 million in cash, subject to certain customary closing adjustments. Drybar is an innovative, trend-setting prestige hair care and styling brand in the multi-billion-dollar beauty industry. As partduration of the ~~transaction, we granted a worldwide license~~plan, of which $9.6 million have been incurred through the third quarter of fiscal 2022. See Note 7 to ~~Drybar Holdings LLC,~~ the owner and long-time operator of Drybar blowout salons, to use the Drybar trademark in their continued operation of Drybar salons. The salons will exclusively use, promote, and sell Drybar products globally.accompanying condensed consolidated financial statements for additional information.

Consistent with our strategy of focusing resources on our Leadership Brands, during the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Beauty segment's mass channel personal care business, ~~(“Personal Care”). The assets to be disposed of include intangible assets, inventory and fixed assets relating to our mass channel liquids,~~which included liquid, powder and aerosol products under brands such as Pert, Brut, Sure and ~~Infusium.~~Infusium (“Personal Care”). On June 7, 2021, we completed the sale of our Personal Care business, not including the Latin America and Caribbean regions, to HRB Brands LLC, for $44.7 million in cash. The net assets sold included intangible assets, inventory, certain net trade receivables, fixed assets and certain accrued sales discounts and allowances relating to our North America Personal Care business. During the second quarter of fiscal 2022, we recognized a gain on the sale in selling, general and administrative expense (“SG&A”) totaling $0.5 million. We are continuing to negotiate the sale of the Latin America and Caribbean Personal Care businesses to HRB Brands LLC, which we expect to close no later than the ~~divestiture to occur within~~end of fiscal ~~2021.~~2022. Accordingly, we have ~~classified~~continued to classify the identified net assets of the ~~disposal group~~Latin America and Caribbean Personal Care businesses as held for sale.

On March 13, 2020, we entered into an amendment to our Credit Agreement with Bank of America, N.A., as administrative agent, and other lenders (as amended, the “Credit Agreement”). The amendment extended the maturity of the commitment under the Credit Agreement from December 7, 2021 to March 13, 2025. Further, the amendment increased the unsecured revolving commitment from $1.0 billion to $1.25 billion. The amount of the accordion was increased from $200 million to $300 million. The accordion permits the Company to request to increase its borrowing capacity, not to exceed the

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$300 million commitment in the aggregate, provided certain conditions are met, including lender approval. Following the amendment, borrowings under the Credit Agreement bear interest at either the base rate or LIBOR, plus a margin based on the Net Leverage Ratio (as defined in the Credit Agreement) of 0% to 1.0% and 1.0% to 2.0%, respectively, for base rate and LIBOR borrowings. See Note 133 to the accompanying condensed consolidated financial statements for additional information.

Subsequent to the end of ~~the~~our third quarter, on December ~~22, 2020,~~29, 2021, we ~~entered into an amended~~completed the acquisition of Osprey Packs, Inc. (“Osprey”), a longtime U.S. leader in technical and ~~extended Trademark License Agreement~~everyday packs. The total

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purchase consideration, net of cash acquired, was $414.7 million in cash, including the impact of a $5.3 million favorable customary closing net working capital adjustment. The acquisition was funded with ~~Revlon to license Revlon’s trademark for hair care appliances~~cash on hand and ~~tools (the “Revlon License”). The Revlon License grants us an exclusive, global, fully paid-up license to use~~borrowings from our existing revolving credit facility. We incurred acquisition-related expenses of $1.6 million during the ~~licensed trademark to manufacture, sell and distribute licensed merchandise~~third quarter of fiscal 2022, which were recognized in ~~accordance with the terms~~SG&A within our condensed consolidated statements of the agreement. The Revlon License has an initial term of 40 years, which will automatically renew at the end of the initial term for three consecutive additional 20-year periods unless we give notice of non-renewal. The Revlon License amends and restates the existing Revlon trademark licensing agreements entirely, and eliminates ongoing royalties we have historically paid and recognized as expense within SG&A in accordance with such agreements. In exchange for this exclusive global license, we paid a one-time, up-front license fee of $72.5 million, which will be recorded as an intangible asset at cost and amortized on a straight-line basis over a useful life of 40 years, representing the initial term. As a result of the Revlon License, we are no longer obligated to pay royalties to Revlon, and thus will not recognize royalty expense after December 22, 2020, the effective date of the Revlon License.income.

Significant Trends Impacting the Business

~~Potential~~ Impact of COVID-19

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) to be a pandemic. ~~COVID-19 continues to spread throughout the United States and the world, with the continued potential for catastrophic impact.~~ The effects of the COVID-19 pandemic have had an unfavorable impact on certain parts of our business. The impact includes the effect of temporary closures of certain customer stores, or limited hours of operation, ~~which has resulted in~~and materially lower store ~~traffic. The economic impact of historic unemployment and consumer uncertainty has also resulted in reduced overall demand for our more discretionary product lines.~~traffic, primarily during fiscal 2021. Additionally, COVID-19 has ~~also~~ disrupted certain parts of our supply ~~chain,~~chain. Surges in demand and shifts in shopping patterns related to COVID-19, as well as other factors, have strained the global freight network, which is resulting in ~~certain cases has limited~~higher costs, less capacity, and longer lead times. These factors may impact our ability to fulfill ~~demand. COVID-19 has favorably impacted~~some orders on a timely basis. Additionally, the extent of COVID-19’s impact on the demand for certain of our product lines ~~that are more defensive, meet certain healthcare or healthy living needs, or meet~~in the ~~needs of consumers that are spending more time at home as a result~~future will depend on future developments, including the duration, spread and intensity of the ~~pandemic. COVID-19 has also favorably impacted~~pandemic, our ~~online channel in a meaningful way,~~continued ability to source and distribute our products, as ~~brick~~well as any future government actions affecting consumers and ~~mortar shopping options have been limited or considered unsafe by consumers. Although~~ the ~~favorable impacts~~global economy generally, all of ~~COVID-19 outweighed~~which are uncertain and difficult to predict considering the ~~unfavorable impacts for the nine month period ended November 30, 2020, this situation continues to change~~ rapidly ~~and additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today.~~evolving landscape. Accordingly, our liquidity and financial results could be impacted in ways that we are not able to predict today.

~~These future~~Future developments are outside of our control, are highly uncertain and cannot be predicted. If the COVID-19 impact or ~~resulting~~potential economic downturn is prolonged, then it can further increase the difficulty of planning for operations. These and other potential impacts of the current public health crisis could therefore materially and adversely affect our business, financial condition, cash flows and results of operations.

~~During the first quarter of fiscal 2021, as part of a comprehensive approach to preserve our cash flow~~Global Supply Chain and adjust our cost structure to align to lower anticipated revenue related to the business disruption and uncertainty of COVID-19, we implemented a number of temporary precautionary measures. These measures included the following:Cost Inflation Trends

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•~~a graduated salary reduction for all associates, including named executive officers and the other members of the Company’s executive leadership team;~~

•~~a reduction in the cash compensation of the Company's Board of Directors;~~

•~~suspension of merit increases, promotions and new associate hiring until further notice;~~

•the furlough of associates in specific areas directly tied to sales volume, with assistance to maintain health insurance coverage, as well as a reduction of external temporary labor and reduced work hours;

•~~reduction or deferral of marketing expense, while continuing to support brands with strong consumer demand and to keep brands top of mind with the consumer;~~

•~~limited reduction of investment in new product development and launches, in anticipation of more normalized economic activity;~~

•~~elimination of travel expense in the short term, with a significant reduction planned for the second half of fiscal 2021; and~~

•~~reduction of consulting fees and capital expenditures for projects that are not critical.~~

During the second quarter of fiscal 2021, we reversed a number of these temporary measures including a restoration of all wages, salaries, and director compensation to pre-COVID-19 levels. We also increased levels of investments in marketing activities, new product development and launches and capital expenditures. In the third quarter of fiscal 2021, we continued to increase the amount of these investments, and we expect to continue to further increase our investments in these areas during the fourth quarter of fiscal 2021. These investments are intended to continue progressing our Phase II transformation plan and the longer-term opportunities we see to further grow our business. In addition, during the third quarter of fiscal 2021, we reinstituted merit increases, promotions and new associate hiring.

Due to the evolving COVID-19 pandemic and related consumer demand for certain of our products, trends are emerging that may impact our ability to fulfill some orders on a timely basis or make marketing investments with an acceptable return.

We continue to see very strong demand trends in many of our product categories. In the second quarter of fiscal 2021, demand continued to outpace even recently increased supply capacity with respect to thermometry, air filtration, water filtration and various products within Housewares, which in some cases resulted in out of stocks. Demand continued to outpace our increased supply capacity during the third quarter of fiscal 2021, with respect to thermometry and various products within Housewares, which in some cases resulted in out of stocks. Additionally, surgesSurges in demand and shifts in shopping patterns related to COVID-19, as well as other factors, have ~~strained~~continued to strain the ~~U.S. freight~~global supply chain network, which ~~is resulting~~has resulted in carrier-imposed capacity restrictions, ~~and carrier delays. The demand surge for the OXO brand, in combination with~~ carrier delays, and longer lead times. Demand for Chinese imports has caused ~~order flow~~shipment receiving and unloading backlogs at many U.S. ports that have been unable to ~~outpace~~keep pace with unprecedented inbound container volume. The situation has been further exacerbated by COVID-19 illness and protocols at many port locations. Due to the backlog and increasing trade imbalance with China, many shipping containers are not being sent back to China, or are being sent to China empty. With continued increases in demand for containers, limited supply and freight vendors bearing the cost of shipping empty containers, the market cost of inbound freight has increased by several multiples compared to calendar year 2020 averages. In addition to increasing cost trends, our third party manufacturing partners are not equipped to hold meaningful amounts of inventory and if shipping container capacity remains limited or unavailable, they could pause manufacturing, which could ultimately impact our ability to meet consumer demand on a timely basis. Demand for raw materials, components and semiconductor chips impacted by the supply chain challenges described above have created surges in prices and shortages of these materials may become more significant which could further increase our costs. Further, in the U.S., the surge in demand along with COVID-19 related government stimulus and rising hourly labor wages, have created labor shortages and higher labor costs. The majority of our hourly labor is employed in our distribution ~~center~~centers and these factors may increase our costs and negatively impact our ability to attract and retain qualified associates.

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EPA Compliance Costs

Some of our product lines within our Health & Home segment are subject to product identification, labeling and claim requirements, which are monitored and enforced by regulatory agencies, such as the U.S. Environmental Protection Agency (the “EPA”), U.S. Customs and Border Protection, the U.S. Food and Drug Administration, and the U.S. Consumer Product Safety Commission.

In our quarterly report on Form 10-Q for our first quarter of fiscal 2022, we disclosed that we were in discussions with the EPA regarding the compliance of packaging claims on certain of our products in the air and water filtration categories and a limited subset of humidifier products within the Health & Home segment that are sold in the U.S. The EPA did not raise any product quality, safety or performance issues. As a result of these packaging compliance discussions, on May 27, 2021, we voluntarily implemented a temporary stop shipment action across this line of products in the U.S. as we worked with the EPA towards an expedient resolution. In July 2021, the EPA approved modest changes to our labeling claims on packaging of existing water filtration products, which we implemented, and subsequently began shipping in limited quantities during the second quarter of fiscal 2022. The shipping volume for these products has continued to increase and, in September 2021, we returned to a more normalized level of shipping activity. In August 2021, the EPA approved changes to our air filtration packaging and we implemented a repackaging plan. We began shipping limited quantities of the impacted products at the end of August 2021 and returned to a more normalized level of shipping activity in November 2021. We have also resolved the majority of the packaging compliance concerns on the limited subset of humidifier products and do not expect them to have a material impact on our consolidated financial results.Our consolidated and Health & Home segment’s net sales revenue, gross profit and operating income for the nine months ended November 30, 2021, have been materially and adversely impacted by the stop shipment actions and the time needed to execute repackaging plans after changes were approved by the EPA. While we have resumed normalized levels of shipping of the affected inventory, we are still in process of executing our repackaging plans. If we are not able to execute our repackaging plans on schedule to meet demand, our net sales revenue, gross profit and operating income could continue to be materially and adversely impacted. The extent to which net sales revenue, gross profit and operating income could be impacted will primarily depend on product demand and the duration of time required to repackage the affected inventory. In addition, our net sales revenue could be materially and adversely impacted by customer returns, an increase in sales discounts and allowances and by the potential impact of distribution losses at certain ~~times~~retailers.

These trends can also limit our ability to make marketing expenditures with an adequate return on investment. In certain categories, where macro-trends like COVID-19 are driving demand significantly higher than historical levels or in situations where supply or distribution is capacity constrained, we believe that driving additional demand throughinclude incremental ~~marketing activities~~freight, warehouse storage costs, charges from vendors, and legal fees, among other things. Such potential incremental EPA compliance costs will be expensed as incurred and could ~~compound potential shipment delays or out of stocks. In these situations, currently planned marketing investments designed to drive incremental short-term demand would not be made.~~

~~These trends and potential impacts could therefore~~ materially and adversely ~~affect~~impact our consolidated and Heath & Home segment's gross profit and operating income. Additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today. Accordingly, our business, results of operations and financial condition ~~cash flows~~could be adversely and ~~results of operations.~~

materially impacted in ways that we are not able to predict today.

At this time, we are not aware of any fines or penalties related to this matter imposed against us by the EPA. While we do not anticipate material fines or penalties, there can be no assurances that such fines or penalties will not be imposed.

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See Note 8 to our condensed consolidated financial statements for additional information and Part II, Item 1A., “Risk Factors” in this Form 10-Q for additional information on our related material risks.

Potential Impact of Tariffs

~~During fiscal~~Since 2019, ~~and 2020,~~ the Office of the U.S. Trade Representative (“USTR”) has imposed, and in certain cases subsequently reduced or removed, additional tariffs on products imported from China. We purchase a high concentration of our products from unaffiliated manufacturers located in China. This concentration exposes us to risks associated with doing business globally, including changes in tariffs. Any alteration of trade agreements and terms between China and the ~~United States,~~U.S., including limiting trade with China, imposing additional tariffs on imports from China and potentially imposing other restrictions on exports from China to the ~~United States~~U.S. may result in further and/or higher tariffs or retaliatory trade measures by China. Furthermore, in certain cases, we have been ~~somewhat~~ successful in obtaining tariff exclusions from the USTR on certain products that we import. These exclusions generally expire after a ~~certain~~designated period of ~~time and must be re-approved by~~time. In the ~~USTR, otherwise~~case that a tariff exclusion is not granted or extended, higher tariffs ~~will~~would be assessed on ~~our products upon expiration of~~ the ~~exclusions. All of these factors could have a material adverse effect on our business and results of operations.~~related products.

Foreign Currency Exchange Rate Fluctuations

Due to the nature of our operations, we have exposure to the impact of fluctuations in exchange rates from transactions that are denominated in a currency other than our ~~reporting~~functional currency (the U.S. Dollar). Such transactions include sales, certain inventory purchases and operating expenses. The most significant currencies affecting our operating results are the British Pound, Euro, Canadian Dollar, and Mexican Peso.

For the three months ended November 30, ~~2020,~~2021, changes in foreign currency exchange rates had a favorable year-over-year impact on consolidated U.S. Dollar reported net sales revenue of approximately $1.2 million, or 0.2%, compared to $1.7 million, or 0.4%~~, compared to an unfavorable impact of $2.3 million, or 0.5%~~ for the same period last year. For the nine months ended November 30, ~~2020,~~2021, changes in foreign currency exchange rates had ~~an unfavorable~~a favorable year-over-year impact on consolidated U.S. ~~dollar~~Dollar reported net sales revenue of approximately ~~$3.2~~$8.8 million, or ~~0.3%~~0.6%, compared to an unfavorable impact of ~~$6.8~~$3.2 million, or ~~0.6%~~0.3% for the same period last year.

Consumer Spending and Changes in Shopping Preferences

Our business depends upon discretionary consumer demand for most of our products and primarily operates within mature and highly developed consumer markets. The principal driver of our operating performance is the strength of the U.S. retail economy. Approximately 79% and 80% of our consolidated net sales ~~were~~revenue was from U.S. shipments ~~for~~during the three ~~months~~month periods ended November 30, 2021 and 2020, ~~and 2019.~~respectively. For ~~both~~ the nine month periods ended November 30, ~~2020~~2021 and ~~2019,~~2020, U.S. shipments were approximately 77% and 79% of our consolidated net ~~sales.~~sales revenue.

Our concentration of sales reflects the evolution of consumer shopping preferences to online or multichannel shopping experiences. Our net sales to retail customers fulfilling end-consumer online orders and online sales directly to consumers comprised approximately 23% and 22% of our total consolidated net sales revenue for the three and nine month periods ended November 30, 2021, respectively, and both declined approximately 7%, compared to the same periods in the prior year.

For the three and nine month periods ended November 30, 2020, our net sales to retail customers fulfilling end-consumer online orders and online sales directly to consumers comprised approximately 24% and 25%, respectively, of our total consolidated net sales revenue, and grew approximately 34% and 33%, respectively, ~~over~~compared to the same periods ~~last~~in the prior year.

~~For both~~With the ~~three~~continued growth in online sales across the retail landscape, many brick and ~~nine month periods ended November 30, 2019,~~mortar retailers are aggressively looking for ways to improve their customer delivery capabilities to be able to meet customer expectations. As a result, it will become increasingly important for us to leverage our ~~net~~distribution

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capabilities in order to meet the changing demands of our customers, as well as to increase our online capabilities to support our direct-to-consumer sales ~~to retail customers fulfilling end-consumer online orders~~channels and online channel sales ~~directly to consumers comprised approximately 24% of~~by our ~~total consolidated net sales revenue, and grew approximately 30% and 28%, respectively, over the same periods last year.~~retail customers.

Variability of the Cough/Cold/Flu Season

Sales in several of our Health & Home segment categories are highly correlated to the severity of winter weather and cough/cold/flu incidence. In the U.S., the cough/cold/flu season historically runs from November through March, with peak activity normally in January to March. The 2020-2021 cough/cold/flu season experienced historically low incidence levels due to COVID-19 prevention measures including mask-wearing, remote learning, work from home, and reduced travel, brick and mortar shopping, and group gatherings. For the 2019-2020 season, cough/cold/flu incidence was slightly higher than the 2018-2019 season, which was a below average season.

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RESULTS OF OPERATIONS

The following tables provide selected operating data, in U.S. Dollars, as a percentage of net sales

revenue, and as a year-over-year percentage ~~change:~~change.

Three Months Ended November 30, % of Sales Revenue, net
(in thousands) 2020 (1) 2019 $ Change % Change 2020 2019
Sales revenue by segment, net
Housewares $ 222,400 $ 183,211 $ 39,189 21.4 % 34.9 % 38.6 %
Health & Home 250,158 185,810 64,348 34.6 % 39.2 % 39.1 %
Beauty 165,179 105,716 59,463 56.2 % 25.9 % 22.3 %
Total sales revenue, net 637,737 474,737 163,000 34.3 % 100.0 % 100.0 %
Cost of goods sold 350,410 264,764 85,646 32.3 % 54.9 % 55.8 %
Gross profit 287,327 209,973 77,354 36.8 % 45.1 % 44.2 %
Selling, general and administrative expense (“SG&A”) 186,630 130,692 55,938 42.8 % 29.3 % 27.5 %
Restructuring charges (12) 12 (24) * — % — %
Operating income 100,709 79,269 21,440 27.0 % 15.8 % 16.7 %
Non-operating income, net 93 92 1 1.1 % — % — %
Interest expense (2,926) (2,767) (159) 5.7 % (0.5) % (0.6) %
Income before income tax 97,876 76,594 21,282 27.8 % 15.3 % 16.1 %
Income tax expense 13,721 7,895 5,826 73.8 % 2.2 % 1.7 %
Net income $ 84,155 $ 68,699 $ 15,456 22.5 % 13.2 % 14.5 %

Nine Months Ended November 30, % of Sales Revenue, net
(in thousands) 2020 (1) 2019 $ Change % Change 2020 2019
Sales revenue by segment, net
Housewares $ 564,891 $ 496,017 $ 68,874 13.9 % 35.6 % 39.2 %
Health & Home 661,568 499,543 162,025 32.4 % 41.6 % 39.5 %
Beauty 362,965 269,507 93,458 34.7 % 22.8 % 21.3 %
Total sales revenue, net 1,589,424 1,265,067 324,357 25.6 % 100.0 % 100.0 %
Cost of goods sold 892,460 723,216 169,244 23.4 % 56.1 % 57.2 %
Gross profit 696,964 541,851 155,113 28.6 % 43.9 % 42.8 %
SG&A 439,646 359,794 79,852 22.2 % 27.7 % 28.4 %
Restructuring charges 355 1,061 (706) (66.5) % — % 0.1 %
Operating income 256,963 180,996 75,967 42.0 % 16.2 % 14.3 %
Non-operating income, net 440 313 127 40.6 % — % — %
Interest expense (9,568) (9,291) (277) 3.0 % (0.6) % (0.7) %
Income before income tax 247,835 172,018 75,817 44.1 % 15.6 % 13.6 %
Income tax expense 16,061 16,530 (469) (2.8) % 1.0 % 1.3 %
Net income $ 231,774 $ 155,488 $ 76,286 49.1 % 14.6 % 12.3 %


	Three Months Ended November 30,								% of Sales Revenue, net
(in thousands)	2021		2020		$ Change		% Change		2021		2020
Sales revenue by segment, net
Housewares	$	246,135	$	222,400	$	23,735	10.7	%	39.4	%	34.9	%
Health & Home	203,900		250,158		(46,258)		(18.5)	%	32.6	%	39.2	%
Beauty	174,849		165,179		9,670		5.9	%	28.0	%	25.9	%
Total sales revenue, net	624,884		637,737		(12,853)		(2.0)	%	100.0	%	100.0	%
Cost of goods sold	351,051		350,410		641		0.2	%	56.2	%	54.9	%
Gross profit	273,833		287,327		(13,494)		(4.7)	%	43.8	%	45.1	%
SG&A	183,788		186,630		(2,842)		(1.5)	%	29.4	%	29.3	%

Restructuring charges	5		(12)		17		*		—	%	—	%
Operating income	90,040		100,709		(10,669)		(10.6)	%	14.4	%	15.8	%
Non-operating income, net	52		93		(41)		(44.1)	%	—	%	—	%
Interest expense	3,206		2,926		280		9.6	%	0.5	%	0.5	%
Income before income tax	86,886		97,876		(10,990)		(11.2)	%	13.9	%	15.3	%
Income tax expense	11,203		13,721		(2,518)		(18.4)	%	1.8	%	2.2	%


Net income	$	75,683	$	84,155	$	(8,472)	(10.1)	%	12.1	%	13.2	%


	Nine Months Ended November 30,								% of Sales Revenue, net
(in thousands)	2021		2020		$ Change		% Change		2021		2020
Sales revenue by segment, net
Housewares	$	654,997	$	564,891	$	90,106	16.0	%	39.9	%	35.5	%
Health & Home	549,475		661,568		(112,093)		(16.9)	%	33.5	%	41.6	%
Beauty	436,863		362,965		73,898		20.4	%	26.6	%	22.8	%
Total sales revenue, net	1,641,335		1,589,424		51,911		3.3	%	100.0	%	100.0	%
Cost of goods sold	936,322		892,460		43,862		4.9	%	57.0	%	56.1	%
Gross profit	705,013		696,964		8,049		1.2	%	43.0	%	43.9	%
SG&A	482,467		439,646		42,821		9.7	%	29.4	%	27.7	%

Restructuring charges	380		355		25		7.0	%	—	%	—	%
Operating income	222,166		256,963		(34,797)		(13.5)	%	13.5	%	16.2	%
Non-operating income, net	185		440		(255)		(58.0)	%	—	%	—	%
Interest expense	9,508		9,568		(60)		(0.6)	%	0.6	%	0.6	%
Income before income tax	212,843		247,835		(34,992)		(14.1)	%	13.0	%	15.6	%
Income tax expense	28,873		16,061		12,812		79.8	%	1.8	%	1.0	%


Net income	$	183,970	$	231,774	$	(47,804)	(20.6)	%	11.2	%	14.6	%

* Calculation is not meaningful.

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Third Quarter Fiscal ~~2021~~2022 Financial Results

•Consolidated net sales revenue ~~increased 34.3%~~decreased 2.0%, or ~~$163.0~~$12.9 million, to ~~$637.7~~$624.9 million for the three months ended November 30, ~~2020,~~2021, compared to ~~$474.7~~$637.7 million for the same period last year.

•Consolidated operating income ~~increased 27.0%~~decreased 10.6%, or ~~$21.4~~$10.7 million, to ~~$100.7~~$90.0 million for the three months ended November 30, ~~2020,~~2021, compared to ~~$79.3~~$100.7 million for the same period last year. Consolidated operating margin decreased ~~0.9~~1.4 percentage points to ~~15.8%~~14.4% of consolidated net sales revenue for the three months ended November 30, ~~2020,~~2021, compared to ~~16.7%~~15.8% for the same period last year.

•Consolidated adjusted operating income ~~increased 24.0%~~decreased 5.2%, or ~~$21.6~~$5.8 million, to ~~$111.9~~$106.1 million for the three months ended November 30, ~~2020,~~2021, compared to ~~$90.3~~$111.9 million for the same period last year. Consolidated adjusted operating margin decreased ~~1.4~~0.6 percentage points to ~~17.6%~~17.0% of consolidated net sales revenue for the three months ended November 30, ~~2020,~~2021, compared to ~~19.0%~~17.6% for the same period last year.

•Net income ~~increased 22.5%~~decreased 10.1%, or ~~$15.5~~$8.5 million, to ~~$84.2~~$75.7 million for the three months ended November 30, ~~2020,~~2021, compared to ~~$68.7~~$84.2 million for the same period last year. Diluted EPS ~~increased 23.2%~~decreased 7.2% to ~~$3.34~~$3.10 for the three months ended November 30, ~~2020,~~2021, compared to ~~$2.71~~$3.34 for the same period last year.

•Adjusted income ~~increased 19.8%~~decreased 4.4%, or ~~$15.7~~$4.1 million, to ~~$94.8~~$90.6 million for the three months ended November 30, ~~2020,~~2021, compared to ~~$79.1~~$94.8 million for the same period last year. Adjusted diluted EPS ~~increased 20.5%~~decreased 1.1% to ~~$3.76~~$3.72 for the three months ended November 30, ~~2020,~~2021, compared to ~~$3.12~~$3.76 for the same period last year.

Year-To-Date Fiscal ~~2021~~2022 Financial Results

•Consolidated net sales revenue increased ~~25.6%~~3.3%, or ~~$324.4~~$51.9 million, to ~~$1,589.4~~$1,641.3 million for the nine months ended November 30, ~~2020,~~2021, compared to ~~$1,265.1~~$1,589.4 million for the same period last year.

•Consolidated operating income ~~increased 42.0%~~decreased 13.5%, or ~~$76.0~~$34.8 million, to ~~$257.0~~$222.2 million for the nine months ended November 30, ~~2020,~~2021, compared to ~~$181.0~~$257.0 million for the same period last year. Consolidated operating margin ~~increased 1.9~~decreased 2.7 percentage points to ~~16.2%~~13.5% of consolidated net sales revenue for the nine months ended November 30, ~~2020,~~2021, compared to ~~14.3%~~16.2% for the same period last year.

•Consolidated adjusted operating income ~~increased 35.3%~~decreased 3.1%, or ~~$76.1~~$9.0 million, to ~~$291.5~~$282.5 million for the nine months ended November 30, ~~2020,~~2021, compared to ~~$215.4~~$291.5 million for the same period last year. Consolidated adjusted operating margin ~~increased 1.3~~decreased 1.1 percentage points to ~~18.3%~~17.2% of consolidated net sales revenue for the nine months ended November 30, ~~2020,~~2021, compared to ~~17.0%~~18.3% for the same period last year.

•Net income ~~increased 49.1%~~decreased 20.6%, or ~~$76.3~~$47.8 million, to ~~$231.8~~$184.0 million for the nine months ended November 30, ~~2020,~~2021, compared to ~~$155.5~~$231.8 million for the same period last year. Diluted EPS ~~increased 48.6%~~decreased 17.7% to ~~$9.14~~$7.52 for the nine months ended November 30, ~~2020,~~2021, compared to ~~$6.15~~$9.14 for the same period last year.

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•Adjusted income ~~increased 35.8%~~decreased 5.5%, or ~~$67.1~~$14.0 million, to ~~$254.9~~$240.9 million for the nine months ended November 30, ~~2020,~~2021, compared to ~~$187.8~~$254.9 million for the same period last year. Adjusted diluted

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EPS ~~increased 35.4%~~decreased 2.0% to ~~$10.05~~$9.85 for the nine months ended November 30, ~~2020,~~2021, compared to ~~$7.42~~$10.05 for the same period last year.

Consolidated and Segment Net Sales Revenue

The following tables summarize the impact that Organic business and foreign currency ~~and acquisitions~~ had on our net sales revenue by segment:


		Three Months Ended November 30,													Three Months Ended November 30,
(in thousands)	(in thousands)	Housewares			Health & Home			Beauty			Total			(in thousands)	Housewares			Health & Home			Beauty			Total
Fiscal 2020 sales revenue, net		$	183,211		$	185,810		$	105,716		$	474,737
Organic business (1)		38,836			62,887			42,072			143,795
Fiscal 2021 sales revenue, net														Fiscal 2021 sales revenue, net	$	222,400		$	250,158		$	165,179		$	637,737
Organic business														Organic business	23,601			(46,595)			8,943			(14,051)
Impact of foreign currency	Impact of foreign currency	353			1,461			(110)			1,704			Impact of foreign currency	134			337			727			1,198
Acquisition (2)		—			—			17,501			17,501

Change in sales revenue, net	Change in sales revenue, net	39,189			64,348			59,463			163,000			Change in sales revenue, net	23,735			(46,258)			9,670			(12,853)
Fiscal 2021 sales revenue, net		$	222,400		$	250,158		$	165,179		$	637,737
Fiscal 2022 sales revenue, net														Fiscal 2022 sales revenue, net	$	246,135		$	203,900		$	174,849		$	624,884

Total net sales revenue growth (decline)	Total net sales revenue growth (decline)	21.4		%	34.6		%	56.2		%	34.3		%	Total net sales revenue growth (decline)	10.7		%	(18.5)		%	5.9		%	(2.0)		%
Organic business	Organic business	21.2		%	33.8		%	39.8		%	30.3		%	Organic business	10.6		%	(18.6)		%	5.4		%	(2.2)		%
Impact of foreign currency	Impact of foreign currency	0.2		%	0.8		%	(0.1)		%	0.4		%	Impact of foreign currency	0.1		%	0.1		%	0.4		%	0.2		%
Acquisition		—		%	—		%	16.6		%	3.7		%

Nine Months Ended November 30,
(in thousands) Housewares Health & Home Beauty Total
Fiscal 2020 sales revenue, net $ 496,017 $ 499,543 $ 269,507 $ 1,265,067
Organic business (1) 68,803 162,138 60,946 291,887
Impact of foreign currency 71 (113) (3,121) (3,163)
Acquisition (2) — — 35,633 35,633
Change in sales revenue, net 68,874 162,025 93,458 324,357
Fiscal 2021 sales revenue, net $ 564,891 $ 661,568 $ 362,965 $ 1,589,424
Total net sales revenue growth (decline) 13.9 % 32.4 % 34.7 % 25.6 %
Organic business 13.9 % 32.5 % 22.6 % 23.1 %
Impact of foreign currency — % — % (1.2) % (0.3) %
Acquisition — % — % 13.2 % 2.8 %

~~(1)Previously referred to as “Core” business, as described below.~~

~~(2)~~The three and nine month periods ended November 30, 2020 include three and nine months of net sales revenue for Drybar Products, respectively, which was acquired on January 23, 2020, with no comparable results in the same periods last year. For additional information on the Drybar Products acquisition, see Note 7 to the accompanying condensed consolidated financial statements.


	Nine Months Ended November 30,
(in thousands)	Housewares			Health & Home			Beauty			Total
Fiscal 2021 sales revenue, net	$	564,891		$	661,568		$	362,965		$	1,589,424
Organic business	88,812			(116,302)			70,640			43,150
Impact of foreign currency	1,294			4,209			3,258			8,761

Change in sales revenue, net	90,106			(112,093)			73,898			51,911
Fiscal 2022 sales revenue, net	$	654,997		$	549,475		$	436,863		$	1,641,335

Total net sales revenue growth (decline)	16.0		%	(16.9)		%	20.4		%	3.3		%
Organic business	15.7		%	(17.6)		%	19.5		%	2.7		%
Impact of foreign currency	0.2		%	0.6		%	0.9		%	0.6		%

In the above tables, Organic business refers to our net sales revenue associated with product lines or brands after the first twelve months from the date the product line or brand iswas acquired, excluding the impact that foreign currency ~~re-measurement~~remeasurement had on reported net ~~sales.~~sales revenue. Net sales revenue from internally developed brands or product lines is considered Organic business activity.

We ~~previously referred to Organic business sales as~~define Core business ~~sales. In connection with this change, we now define Core~~ as strategic business that we expect to be an ongoing part of our operations, and Non-Core

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business as business or net assets (including net assets held for sale) that we expect to divest within a year of its designation as Non-Core. During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Personal Care business. As a result, sales from our Personal Care business are included in Non-Core business for all periods presented. On June 7, 2021, we completed the sale of our North America Personal Care business. Sales from our Latin America and Caribbean Personal Care businesses continue to be included in Non-Core business for all periods presented as the related net assets continue to be classified as held for sale.

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The following tables summarize the impact that Core business and Non-Core (Personal Care) business had on our net sales revenue by segment:


	Three Months Ended November 30,
(in thousands)	Housewares			Health & Home			Beauty			Total
Fiscal 2021 sales revenue, net	$	222,400		$	250,158		$	165,179		$	637,737
Core business	23,735			(46,258)			25,266			2,743
Non-Core business (Personal Care)	—			—			(15,596)			(15,596)
Change in sales revenue, net	23,735			(46,258)			9,670			(12,853)
Fiscal 2022 sales revenue, net	$	246,135		$	203,900		$	174,849		$	624,884

Total net sales revenue growth (decline)	10.7		%	(18.5)		%	5.9		%	(2.0)		%
Core business	10.7		%	(18.5)		%	15.3		%	0.4		%
Non-Core business (Personal Care)	—		%	—		%	(9.4)		%	(2.4)		%

Three Months Ended November 30,
(in thousands) Housewares Health & Home Beauty Total
Fiscal 2020 sales revenue, net $ 183,211 $ 185,810 $ 105,716 $ 474,737
Core business (1) 39,189 64,348 63,487 167,024
Non-Core business (Personal Care) — — (4,024) (4,024)
Change in sales revenue, net 39,189 64,348 59,463 163,000
Fiscal 2021 sales revenue, net $ 222,400 $ 250,158 $ 165,179 $ 637,737
Total net sales revenue growth (decline) 21.4 % 34.6 % 56.2 % 34.3 %
Core business 21.4 % 34.6 % 60.1 % 35.2 %
Non-Core business (Personal Care) — % — % (3.8) % (0.8) %

Nine Months Ended November 30,
(in thousands) Housewares Health & Home Beauty Total
Fiscal 2020 sales revenue, net $ 496,017 $ 499,543 $ 269,507 $ 1,265,067
Core business (1) 68,874 162,025 102,642 333,541
Non-Core business (Personal Care) — — (9,184) (9,184)
Change in sales revenue, net 68,874 162,025 93,458 324,357
Fiscal 2021 sales revenue, net $ 564,891 $ 661,568 $ 362,965 $ 1,589,424
Total net sales revenue growth (decline) 13.9 % 32.4 % 34.7 % 25.6 %
Core business 13.9 % 32.4 % 38.1 % 26.4 %
Non-Core business (Personal Care) — % — % (3.4) % (0.7) %

~~(1)~~The three and nine month periods ended November 30, 2020 include three and nine months of net sales revenue for Drybar Products, respectively, which was acquired on January 23, 2020, with no comparable results for the same period last year. For additional information on the Drybar Products acquisition, see Note 7 to the accompanying condensed consolidated financial statements.


	Nine Months Ended November 30,
(in thousands)	Housewares			Health & Home			Beauty			Total
Fiscal 2021 sales revenue, net	$	564,891		$	661,568		$	362,965		$	1,589,424
Core business	90,106			(112,093)			106,090			84,103
Non-Core business (Personal Care)	—			—			(32,192)			(32,192)
Change in sales revenue, net	90,106			(112,093)			73,898			51,911
Fiscal 2022 sales revenue, net	$	654,997		$	549,475		$	436,863		$	1,641,335

Total net sales revenue growth (decline)	16.0		%	(16.9)		%	20.4		%	3.3		%
Core business	16.0		%	(16.9)		%	29.2		%	5.3		%
Non-Core business (Personal Care)	—		%	—		%	(8.9)		%	(2.0)		%

Leadership Brand and Other Net Sales Revenue

The following tables summarize our Leadership Brand and other net sales revenue:


		Three Months Ended November 30,									Three Months Ended November 30,
(in thousands)	(in thousands)	2020		2019		$ Change		% Change		(in thousands)	2021		2020		$ Change		% Change
Leadership Brand sales revenue, net ~~(1)~~	Leadership Brand sales revenue, net ~~(1)~~	$	508,210	$	379,604	$	128,606	33.9	%	Leadership Brand sales revenue, net ~~(1)~~	$	506,982	$	508,210	$	(1,228)	(0.2)	%
All other sales revenue, net	All other sales revenue, net	129,527		95,133		34,394		36.2	%	All other sales revenue, net	117,902		129,527		(11,625)		(9.0)	%
Total sales revenue, net	Total sales revenue, net	$	637,737	$	474,737	$	163,000	34.3	%	Total sales revenue, net	$	624,884	$	637,737	$	(12,853)	(2.0)	%

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Nine Months Ended November 30,
(in thousands) 2020 2019 $ Change % Change
Leadership Brand sales revenue, net (1) $ 1,288,614 $ 1,012,346 $ 276,268 27.3 %
All other sales revenue, net 300,810 252,721 48,089 19.0 %
Total sales revenue, net $ 1,589,424 $ 1,265,067 $ 324,357 25.6 %


	Nine Months Ended November 30,
(in thousands)	2021		2020		$ Change		% Change
Leadership Brand sales revenue, net	$	1,329,858	$	1,288,614	$	41,244	3.2	%
All other sales revenue, net	311,477		300,810		10,667		3.5	%
Total sales revenue, net	$	1,641,335	$	1,589,424	$	51,911	3.3	%

Consolidated Net Sales Revenue

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Consolidated net sales revenue ~~increased $163.0~~decreased $12.9 million, or ~~34.3%~~2.0%, to ~~$637.7~~$624.9 million, compared to ~~$474.7~~$637.7 million. The ~~growth~~decline was driven by ana decrease from Organic business ~~increase~~ of ~~$143.8~~$14.1 million, or ~~30.3%~~2.2%, primarily ~~reflecting:~~due to:

•~~growth~~a decrease in ~~consolidated brick~~sales in our Health & Home segment as a result of the EPA packaging compliance matter and ~~mortar sales;~~related stop shipment actions and stronger COVID-19 driven demand for healthcare

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and healthy living products, primarily in thermometry and air filtration, in the comparative prior year period; and

•~~growth in consolidated online sales; and~~

•~~an increase in consolidated international sales.~~

~~The Drybar Products acquisition also contributed $17.5 million, or 3.7% to consolidated net sales revenue growth.~~

~~These factors were partially offset by reduced store traffic at certain retail brick and mortar stores, a soft back to school season due to COVID-19 related school closures and~~ a net sales revenue decline in Non-Core ~~business.~~

~~Net sales revenue from~~business primarily due to the sale of our ~~Leadership Brands was $508.2 million, compared to $379.6 million for~~North America Personal Care business during the ~~same period last year, representing growth~~second quarter of ~~33.9%.~~

~~Comparison of First Nine Months of Fiscal 2021 to First Nine Months of Fiscal 2020~~

Consolidated net sales revenue increased $324.4 million, or 25.6%, to $1,589.4 million, compared to $1,265.1 million. The growth was driven by an Organic business increase of $291.9 million, or 23.1%, primarily reflecting:

•~~growth in consolidated online sales;~~

•~~an increase in consolidated international sales; and~~

•~~an increase in consolidated brick and mortar sales.~~

~~The Drybar Products acquisition also contributed~~ ~~$35.6 million, or 2.8% to consolidated net sales revenue growth.~~fiscal 2022.

These factors were partially offset by:

•higher brick and mortar and online channel sales in our Beauty and Housewares segments due primarily to strong consumer demand, earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season and the favorable comparative impact of COVID-19 ~~related store closures, during the first and second quarters of fiscal 2021, and the related reduction in~~reduced store traffic ~~at certain retail customers;~~

•and a soft back to school season ~~due to COVID-19 related school closures;~~in the prior year period;

•~~a net sales revenue decline in Non-Core business;~~the impact of customer price increases related to rising freight and product costs; and

•higher sales in the ~~unfavorable impact from~~club and closeout channels.

Net sales revenue was also favorably impacted by net foreign currency fluctuations of approximately ~~$3.2~~$1.2 million, or ~~0.3%~~0.2%.

Net sales revenue from our Leadership Brands was ~~$1,288.6~~$507.0 million, compared to ~~$1,012.3~~$508.2 million for the same period last year, representing a decline of 0.2%.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Consolidated net sales revenue increased $51.9 million, or 3.3%, to $1,641.3 million, compared to $1,589.4 million. Growth was driven by an increase from Organic business of $43.2 million, or 2.7%, primarily reflecting:

•higher brick and mortar and online channel sales in our Beauty and Housewares segments due primarily to strong consumer demand, the favorable comparative impact of COVID-19 related store closures, reduced store traffic and a soft back to school season in the prior year period, and earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season;

•growth in consolidated international sales;

•higher sales in the club and closeout channels; and

•the favorable impact of ~~27.3%~~orders that were not able to be shipped at the end of the fourth quarter of fiscal 2021 due to the impact of the late-February winter storm in the U.S. (“Winter Storm Uri”).

These factors were partially offset by:

•a decrease in sales in our Health & Home segment as a result of the EPA packaging compliance matter and related stop shipment actions and stronger COVID-19 driven demand for healthcare and healthy living products, primarily in thermometry and air filtration, in the comparative prior year period; and

•a net sales revenue decline in Non-Core business primarily due to the sale of our North America Personal Care business during the second quarter of fiscal 2022.

Net sales revenue was also favorably impacted by net foreign currency fluctuations of approximately $8.8 million, or 0.6%.

Net sales revenue from our Leadership Brands was $1,329.9 million, compared to $1,288.6 million for the same period last year, representing an increase of 3.2%.

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Segment Net Sales Revenue

Housewares

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Net sales revenue increased ~~$39.2~~$23.7 million, or ~~21.4%~~10.7%, to ~~$222.4~~$246.1 million, compared to ~~$183.2~~$222.4 million. Growth was driven by an increase from Organic business ~~increase~~ of ~~$38.8~~$23.6 million, or ~~21.2%~~10.6%, primarily due to:

•higher ~~demand for OXO brand products as consumers spent more time at home cooking, cleaning, organizing and pantry loading in response to COVID-19, which resulted in increases in both~~ brick and mortar and online channel sales ~~for~~driven by strong consumer demand, earlier than typical customer orders as retailers accelerated orders into the ~~OXO brand;~~third quarter to try to avoid supply chain disruptions during the holiday season and the favorable comparative impact of COVID-19 reduced store traffic and a soft back to school season in the prior year period;

•the impact of customer price increases related to rising freight and product costs;

•higher sales in the club and closeout channels; and

•growth in international sales.

~~These factors were partially offset by:~~

•~~the COVID-19 related impact~~Net sales revenue was favorably impacted by net foreign currency fluctuations of ~~reduced store traffic at certain retail brick and mortar stores;~~

•~~a soft back-to-school season due to COVID-19 and increased competitive activity primarily impacting the Hydro Flask brand; and~~

•~~lower closeout channel sales.~~approximately $0.1 million, or 0.1%.

Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Net sales revenue increased ~~$68.9~~$90.1 million, or ~~13.9%~~16.0%, to ~~$564.9~~$655.0 million, compared to ~~$496.0~~$564.9 million. Growth was driven by an increase from Organic business ~~increase~~ of ~~$68.8~~$88.8 million, or ~~13.9%~~15.7%, primarily due to:

•higher ~~demand for OXO brand products as consumers spent more time at home cooking, cleaning, organizing and pantry loading in response to COVID-19, which resulted in increases in both online and~~ brick and mortar and online channel sales ~~for~~driven by strong consumer demand, the ~~OXO brand;~~favorable comparative impact of COVID-19 related store closures, reduced store traffic and a soft back to school season in the prior year period, and earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season;

•growth in international sales;

•higher sales in the club ~~channel;~~

•~~growth in international sales;~~and closeout channels; and

•~~new product introductions.~~the favorable impact of orders that were not able to be shipped at the end of the fourth quarter of fiscal 2021 due to Winter Storm Uri.

~~These factors were partially offset by:~~

•~~the COVID-19 related impact~~Net sales revenue was favorably impacted by net foreign currency fluctuations of ~~certain retail brick and mortar store closures and reduced store traffic on the Hydro Flask and OXO brands;~~

•~~a soft back-to-school season due to COVID-19 and increased competitive activity primarily impacting the Hydro Flask brand; and~~

•~~lower closeout channel sales.~~approximately $1.3 million, or 0.2%.

Health & Home

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Net sales revenue ~~increased $64.3~~decreased $46.3 million, or ~~34.6%~~18.5%, to ~~$250.2~~$203.9 million, compared to ~~$185.8~~$250.2 million. The ~~increase~~decline was driven by ana decrease from Organic business ~~increase~~ of ~~$62.9~~$46.6 million, or ~~33.8%~~18.6%, primarily due to ~~strong consumer~~a decrease in sales due to stronger COVID-19 driven demand for healthcare and healthy living products, ~~in domestic and international markets,~~ primarily in thermometry and air ~~purification,~~filtration, in ~~both brick~~the comparative prior year period and ~~mortar and online channels, mainly attributable to COVID-19.~~a decrease in sales of air filtration products as a result of the EPA packaging compliance matter.

These factors were partially offset by ~~declines~~an increase in ~~non-strategic categories.~~sales of humidification products and new product introductions.

Net sales revenue was also favorably impacted by net foreign currency fluctuations of approximately $0.3 million, or 0.1%.

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Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Net sales revenue ~~increased $162.0~~decreased $112.1 million, or ~~32.4%~~16.9%, to ~~$661.6~~$549.5 million, compared to ~~$499.5~~$661.6 million. The ~~increase~~decline was ~~primarily~~ driven by ana decrease from Organic business ~~increase~~ of ~~$162.1~~$116.3 million, or ~~32.5%~~17.6%, primarily due to:

•a decrease in both brick and mortar and online sales of air filtration, water filtration, and humidification products as a result of the EPA packaging compliance matter and related stop shipment actions;

•a decline in sales of thermometers and air filtration products due to ~~strong consumer~~stronger COVID-19 driven demand for healthcare and healthy living products in ~~domestic~~the comparative prior year period; and ~~international~~

~~Table~~•the unfavorable impact on sales of ~~Contents~~

~~markets, in both brick and mortar and online channels, mainly attributable to COVID-19, and~~ air ~~purifier demand further~~filtration products driven by greater wildfire activity on the west coast of the ~~United States.~~U.S. in the comparative prior year period.

These factors were partially offset by ~~declines~~an increase in ~~non-strategic categories.~~

sales of fans, heaters and new product introductions, as well as the favorable impact of orders that were not able to be shipped at the end of the fourth quarter of fiscal 2021 due to Winter Storm Uri.

Net sales revenue was also favorably impacted by net foreign currency fluctuations of approximately $4.2 million, or 0.6%.

Beauty

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Net sales revenue increased ~~$59.5~~$9.7 million, or ~~56.2%~~5.9%, to ~~$165.2~~$174.8 million, compared to ~~$105.7~~$165.2 million. The increase was driven by an increase from Organic business ~~increase~~ of ~~$42.1~~$8.9 million, or ~~39.8%, as well as the net sales revenue contribution of $17.5 million, or 16.6% growth,~~5.4%. The increase from ~~the acquisition of Drybar Products. The~~ Organic business ~~increase~~ primarily ~~reflects:~~reflects higher appliance sales due to:

•~~growth in the appliance category in both online and~~higher brick and mortar ~~channels~~and online channel sales driven by strong consumer demand, the ~~strength~~favorable comparative impact of COVID-19 reduced store traffic in the ~~One-Step family of products;~~prior year period, and earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season;

•~~a shift to greater~~new product introductions;

•higher international sales; and ~~more aggressive early season retail holiday promotions during the third quarter;~~

•expanded distribution primarily in the club ~~channel; and~~

•~~an increase in international sales.~~channel.

These factors were partially offset by ~~reduced store traffic at certain retail brick and mortar stores due to COVID-19 and~~ a decline in Non-Core business net sales revenue ~~decline in Non-Core business.~~primarily due to the sale of the North America Personal Care business during the second quarter of fiscal 2022.

Net sales revenue was favorably impacted by net foreign currency fluctuations of approximately $0.7 million, or 0.4%.

Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Net sales revenue increased ~~$93.5~~$73.9 million, or ~~34.7%~~20.4%, to ~~$363.0~~$436.9 million, compared to ~~$269.5~~$363.0 million. The increase was driven by an increase from Organic business ~~increase~~ of ~~$60.9~~$70.6 million, or ~~22.6%, as well as the net sales revenue contribution of $35.6 million, or 13.2% growth,~~19.5%. The increase from ~~the acquisition of Drybar Products. The~~ Organic business ~~increase~~ primarily reflects:

•~~growth~~higher brick and mortar and online channel sales driven by strong consumer demand, the favorable comparative impact of COVID-19 related store closures and reduced store traffic in the ~~appliance category driven by strength of~~prior year period, and earlier than typical customer orders as retailers accelerated orders into the ~~One-Step family of products;~~third quarter to try to avoid supply chain disruptions during the holiday season;

•~~a shift to greater and more aggressive early season retail holiday promotions during the third quarter;~~new product introductions;

•expanded distribution primarily in the club channel; ~~and~~

•~~an increase in international sales.~~

~~These factors were partially offset by:~~

•~~a net sales revenue decline in Non-Core business;~~

•the ~~closure~~favorable comparative impact of ~~key domestic customers, lower brick and mortar store traffic, and lower overall discretionary demand primarily~~constrained supply levels in the ~~first~~prior year period;

•higher international sales; and

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•the favorable impact of orders that were not able to be shipped at the end of the fourth quarter of fiscal 2021 due to ~~high unemployment and consumer uncertainty as a result of COVID-19; and~~Winter Storm Uri.

•

These factors were partially offset by a decline in Non-Core business net sales revenue primarily due to the sale of the North America Personal Care business during the second qua~~the unfavorable impact~~rter of fiscal 2022.

Net sales revenue was favorably impacted by net foreign currency fluctuations of approximately ~~$3.1~~$3.3 million, or ~~1.2%~~0.9%.

Consolidated Gross Profit Margin

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Consolidated gross profit margin ~~increased 0.9~~decreased 1.3 percentage points to ~~45.1%~~43.8%, compared to ~~44.2%~~45.1%. The ~~increase~~decrease in consolidated gross profit margin was primarily due to:

•~~a favorable product mix within~~the net unfavorable impact of higher inbound freight expense and related customer price increases;

•EPA compliance costs recognized in cost of goods sold in the Health & Home ~~and the Organic Beauty business;~~

•~~the favorable impact~~segment of ~~the Drybar Products acquisition;~~$0.3 million; and

•a less favorable channel mix within the Housewares segment.

These factors were partially offset by ~~higher inbound freight expense and an unfavorable~~a more favorable product mix inwithin the Housewares ~~segment.~~and Beauty segments and a favorable mix of more Housewares and Beauty sales within our consolidated net sales revenue.

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Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Consolidated gross profit margin ~~increased 1.1~~decreased 0.9 percentage points to ~~43.9%~~43.0%, compared to ~~42.8%~~43.9%. The ~~increase~~decrease in consolidated gross profit margin was primarily due to:

•~~a favorable product mix within~~the unfavorable impact of higher inbound freight expense;

•EPA compliance costs recognized in cost of goods sold in the Health & Home ~~and the Organic Beauty business;~~

•~~the favorable impact~~segment of ~~the Drybar Products acquisition;~~$13.8 million; and

•a less favorable channel mix within the Housewares segment.

These factors were partially offset by ~~an unfavorable~~a more favorable product mix inwithin the ~~Housewares~~Beauty segment and ~~the unfavorable comparative impact~~a favorable mix of ~~tariff exclusion refunds received in the prior year period.~~more Housewares and Beauty sales within our consolidated net sales revenue.

Consolidated SG&A

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Consolidated SG&A ratio increased ~~1.8~~0.1 percentage points to ~~29.3%~~29.4%, compared to ~~27.5%~~29.3%. The increase in the consolidated SG&A ratio was primarily due to:

•~~increased marketing~~higher personnel expense;

•~~increased freight and~~unfavorable operating leverage;

•higher distribution expense;

•~~higher royalty expense;~~

•~~increased legal and other professional fees;~~EPA compliance costs of $4.6 million in the Health & Home segment; and

•higher ~~bad debt expense.~~acquisition-related expense in connection with the Osprey transaction.

These factors were partially offset by:

•~~the impact that higher overall net sales revenue had on net operating leverage;~~lower royalty expense;

•~~travel expense reductions due to COVID-19;~~reduced annual incentive compensation expense;

•lower marketing expense;

•lower amortization expense;

•a decrease in bad debt expense; and

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•the favorable ~~comparative~~leverage impact of ~~acquisition-related expenses for the purchase of Drybar Products incurred in the prior year period.~~customer price increases related to rising freight and product costs.

Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Consolidated SG&A ratio ~~decreased 0.7 percentage~~increased 1.7 percentage points to ~~27.7%~~29.4%, compared to ~~28.4%~~27.7%. The ~~decrease~~increase in the consolidated SG&A ratio was primarily due to:

•the comparative impact ~~that~~of higher ~~overall net sales revenue had on net operating leverage;~~personnel and marketing expenses due to cost reduction initiatives in the prior year period related to the uncertainty of COVID-19;

•~~lower marketing and personnel expenses as a percentage of sales due to COVID-19 cost reduction initiatives that were in place during the first half of fiscal 2021;~~higher distribution expense;

•higher share-based compensation expense; and

•~~travel expense reductions due to COVID-19.~~EPA compliance costs of $7.2 million in the Health & Home segment as a result of the EPA packaging compliance matter and related stop shipment actions.

These factors were partially offset by:

•~~increased freight and distribution~~reduced royalty expense;

•~~increased legal and other professional fees;~~decreased annual incentive compensation expense;

•~~increased customer chargeback activity;~~

•~~higher performance-based annual and long-term incentive compensation~~reduced amortization expense; and

•~~higher bad debt expense.~~the favorable leverage impact of customer price increases related to rising freight and product costs.

Restructuring Charges

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

AnWe incurred insignificant ~~amount~~amounts of pre-tax restructuring costs ~~were recorded for~~under Project Refuel during the three month periods ended November 30, ~~2020~~2021 and ~~2019.~~2020.

Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

During both the nine months ended November 30, 2021 and 2020, we incurred $0.4 million of pre-tax restructuring costs under Project Refuel primarily related to employee severance and termination benefits. Restructuring costs incurred during the nine months ended November 30, 2020 ~~and 2019, we incurred $0.4 million and $1.1 million, respectively, of pre-tax restructuring charges related primarily to employee severance and termination benefits and~~also included contract termination costs.

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Operating ~~income, operating margin, adjusted operating income~~Income, Operating Margin, Adjusted Operating Income (non-GAAP), and ~~adjusted operating margin~~Adjusted Operating Margin (non-GAAP) by ~~segment~~Segment

In order to provide a better understanding of the comparative impact of certain items on our operating income, the tables that follow report the comparative ~~before-tax~~pre-tax impact of ~~non-cash asset impairment charges,~~ acquisition-related expenses, EPA compliance costs, restructuring charges, amortization of intangible assets, and non-cash share-based compensation, as applicable, on operating income and operating margin for each segment and in total for the periods ~~covered~~presented below. Adjusted operating income and adjusted operating margin may be considered non-GAAP financial measures as contemplated by SEC Regulation G, Rule 100. For additional information regarding management’s decision to present this non-GAAP financial information, see the introduction to this Item 2,2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


	Three Months Ended November 30, 2021
(In thousands)	Housewares				Health & Home				Beauty				Total
Operating income, as reported (GAAP)	$	43,239	17.6	%	$	13,573	6.7	%	$	33,228	19.0	%	$	90,040	14.4	%

Acquisition-related expenses	1,605		0.7	%	—		—	%	—		—	%	1,605		0.3	%
EPA compliance costs	—		—	%	4,926		2.4	%	—		—	%	4,926		0.8	%
Restructuring charges	—		—	%	—		—	%	5		—	%	5		—	%
Subtotal	44,844		18.2	%	18,499		9.1	%	33,233		19.0	%	96,576		15.5	%
Amortization of intangible assets	525		0.2	%	572		0.3	%	1,897		1.1	%	2,994		0.5	%
Non-cash share-based compensation	2,339		1.0	%	2,717		1.3	%	1,493		0.9	%	6,549		1.0	%
Adjusted operating income (non-GAAP)	$	47,708	19.4	%	$	21,788	10.7	%	$	36,623	20.9	%	$	106,119	17.0	%


	Three Months Ended November 30, 2020
(In thousands)	Housewares				Health & Home				Beauty				Total
Operating income, as reported (GAAP)	$	37,658	16.9	%	$	30,478	12.2	%	$	32,573	19.7	%	$	100,709	15.8	%



Restructuring charges	(12)		—	%	—		—	%	—		—	%	(12)		—	%
Subtotal	37,646		16.9	%	30,478		12.2	%	32,573		19.7	%	100,697		15.8	%
Amortization of intangible assets	523		0.2	%	2,454		1.0	%	1,524		1.0	%	4,501		0.7	%
Non-cash share-based compensation	2,712		1.2	%	2,359		0.9	%	1,668		1.0	%	6,739		1.1	%
Adjusted operating income (non-GAAP)	$	40,881	18.4	%	$	35,291	14.1	%	$	35,765	21.7	%	$	111,937	17.6	%

Three Months Ended November 30, 2019
(In thousands) Housewares Health & Home Beauty Total
Operating income, as reported (GAAP) $ 42,272 23.1 % $ 24,372 13.1 % $ 12,625 11.9 % $ 79,269 16.7 %
Acquisition-related expenses — — % — — % 1,475 1.4 % 1,475 0.3 %
Restructuring charges — — % — — % 12 — % 12 — %
Subtotal 42,272 23.1 % 24,372 13.1 % 14,112 13.3 % 80,756 17.0 %
Amortization of intangible assets 815 0.4 % 2,492 1.3 % 1,483 1.4 % 4,790 1.0 %
Non-cash share-based compensation 1,510 0.8 % 1,946 1.0 % 1,302 1.2 % 4,758 1.0 %
Adjusted operating income (non-GAAP) $ 44,597 24.3 % $ 28,810 15.5 % $ 16,897 16.0 % $ 90,304 19.0 %

Nine Months Ended November 30, 2020
(In thousands) Housewares Health & Home Beauty Total
Operating income, as reported (GAAP) $ 106,294 18.8 % $ 95,782 14.5 % $ 54,887 15.1 % $ 256,963 16.2 %
Restructuring charges 251 — % — — % 104 — % 355 — %
Subtotal 106,545 18.9 % 95,782 14.5 % 54,991 15.2 % 257,318 16.2 %
Amortization of intangible assets 1,541 0.3 % 7,415 1.1 % 4,571 1.3 % 13,527 0.9 %
Non-cash share-based compensation 8,024 1.4 % 7,166 1.1 % 5,464 1.5 % 20,654 1.3 %
Adjusted operating income (non-GAAP) $ 116,110 20.6 % $ 110,363 16.7 % $ 65,026 17.9 % $ 291,499 18.3 %


		Nine Months Ended November 30, 2019																	Nine Months Ended November 30, 2021
(In thousands)	(In thousands)	Housewares				Health & Home				Beauty				Total				(In thousands)	Housewares				Health & Home				Beauty				Total
Operating income, as reported (GAAP)	Operating income, as reported (GAAP)	$	109,170	22.0	%	$	51,836	10.4	%	$	19,990	7.4	%	$	180,996	14.3	%	Operating income, as reported (GAAP)	$	112,303	17.1	%	$	29,616	5.4	%	$	80,247	18.4	%	$	222,166	13.5	%

Acquisition-related expenses	Acquisition-related expenses	—		—	%	—		—	%	1,475		0.5	%	1,475		0.1	%	Acquisition-related expenses	1,605		0.2	%	—		—	%	—		—	%	1,605		0.1	%
EPA compliance costs																		EPA compliance costs	—		—	%	20,998		3.8	%	—		—	%	20,998		1.3	%
Restructuring charges	Restructuring charges	90		—	%	—		—	%	971		0.4	%	1,061		0.1	%	Restructuring charges	369		0.1	%	—		—	%	11		—	%	380		—	%
Subtotal	Subtotal	109,260		22.0	%	51,836		10.4	%	22,436		8.3	%	183,532		14.5	%	Subtotal	114,277		17.4	%	50,614		9.2	%	80,258		18.4	%	245,149		14.9	%
Amortization of intangible assets	Amortization of intangible assets	1,512		0.3	%	8,088		1.6	%	3,529		1.3	%	13,129		1.0	%	Amortization of intangible assets	1,562		0.2	%	1,709		0.3	%	5,692		1.3	%	8,963		0.5	%
Non-cash share-based compensation	Non-cash share-based compensation	5,853		1.2	%	7,839		1.6	%	5,051		1.9	%	18,743		1.5	%	Non-cash share-based compensation	11,047		1.7	%	10,229		1.9	%	7,073		1.6	%	28,349		1.7	%
Adjusted operating income (non-GAAP)	Adjusted operating income (non-GAAP)	$	116,625	23.5	%	$	67,763	13.6	%	$	31,016	11.5	%	$	215,404	17.0	%	Adjusted operating income (non-GAAP)	$	126,886	19.4	%	$	62,552	11.4	%	$	93,023	21.3	%	$	282,461	17.2	%

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	Nine Months Ended November 30, 2020
(In thousands)	Housewares				Health & Home				Beauty				Total
Operating income, as reported (GAAP)	$	106,294	18.8	%	$	95,782	14.5	%	$	54,887	15.1	%	$	256,963	16.2	%



Restructuring charges	251		—	%	—		—	%	104		—	%	355		—	%
Subtotal	106,545		18.9	%	95,782		14.5	%	54,991		15.2	%	257,318		16.2	%
Amortization of intangible assets	1,541		0.3	%	7,415		1.1	%	4,571		1.3	%	13,527		0.9	%
Non-cash share-based compensation	8,024		1.4	%	7,166		1.1	%	5,464		1.5	%	20,654		1.3	%
Adjusted operating income (non-GAAP)	$	116,110	20.6	%	$	110,363	16.7	%	$	65,026	17.9	%	$	291,499	18.3	%

Consolidated Operating Income

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Consolidated operating income was $90.0 million, or 14.4% of net sales revenue, compared to $100.7 million, or 15.8% of net sales ~~revenue, compared to $79.3 million, or 16.7% of net sales~~ revenue. The 1.4 percentage point decrease in consolidated operating margin was primarily ~~driven by~~ due to:

•the ~~following factors:~~net unfavorable impact of higher inbound freight expense and related customer price increases;

•increased personnel expense;

•higher distribution expense;

•unfavorable operating leverage;

•EPA compliance costs of $4.9 million in the Health & Home segment;

•a less favorable channel mix within the Housewares segment; and

•higher acquisition-related expense in connection with the Osprey transaction.

These factors were partially offset by:

•a favorable product mix within the Housewares and Beauty segments and a favorable mix of more Housewares and Beauty sales within our consolidated net sales revenue;

•lower royalty expense;

•reduced annual incentive compensation expense;

•lower marketing expense;

•~~increased~~lower amortization expense; and

•a decrease in bad debt expense.

Consolidated adjusted operating income decreased 5.2% to $106.1 million, or 17.0% of net sales revenue, compared to $111.9 million, or 17.6% of net sales revenue.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Consolidated operating income was $222.2 million, or 13.5% of net sales revenue, compared to $257.0 million, or 16.2% of net sales revenue. The 2.7 percentage point decrease in consolidated operating margin was primarily due to:

•the comparative impact of higher personnel and marketing expenses due to cost reduction initiatives in the prior year period related to the uncertainty of COVID-19;

•higher inbound freight expense due to rising freight rates and container supply shortages;

•EPA compliance costs of $21.0 million in the Health & Home segment;

•increased distribution expense;

•~~an unfavorable product~~a less favorable channel mix inwithin the Housewares segment; and

•higher share-based compensation expense.

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These factors were partially offset by:

•a favorable product mix within the Beauty segment and a favorable mix of more Housewares and Beauty sales within our consolidated net sales revenue;

•reduced royalty expense;

•~~increased legal and other professional fees;~~decreased annual incentive compensation expense; and

•~~higher bad debt~~reduced amortization expense.

Consolidated adjusted operating income decreased 3.1% to $282.5 million, or 17.2% of net sales revenue, compared to $291.5 million, or 18.3% of net sales revenue.

Housewares

Comparison of Third Quarter Fiscal 2022 to Third Quarter Fiscal 2021

Operating income was $43.2 million, or 17.6% of segment net sales revenue, compared to $37.7 million, or 16.9% of segment net sales revenue. The 0.7 percentage point increase in segment operating margin was primarily due to:

•favorable operating leverage;

•favorable product mix; and

•reduced annual incentive compensation expense.

These factors were partially offset by:

•the ~~favorable~~net unfavorable impact ~~that~~of higher ~~overall net sales revenue had on operating leverage;~~inbound freight expense and related customer price increases;

•a ~~favorable product mix within Health & Home and the Organic Beauty business;~~

•aless favorable channel ~~mix within the Housewares segment;~~mix;

•~~travel expense reductions due to COVID-19; and~~

•~~the favorable comparative impact of acquisition-related expenses for the purchase of Drybar Products incurred in the prior year period.~~

~~Consolidated adjusted operating income increased 24.0% to $111.9 million, or 17.6% of net sales revenue, compared to $90.3 million, or 19.0% of net sales revenue.~~

~~Comparison of First Nine Months of Fiscal 2021 to First Nine Months of Fiscal 2020~~

Consolidated operating income was $257.0 million, or 16.2% of net sales revenue, compared to $181.0 million, or 14.3% of net sales revenue. The increase in consolidated operating margin was primarily driven by the following factors:

•~~the favorable impact that higher overall net sales revenue had on operating leverage;~~

•~~a favorable product mix within Health & Home and the Organic Beauty business;~~

•~~a favorable channel mix within the Housewares segment;~~

•~~lower marketing and personnel expenses as a percentage of sales due to COVID-19 cost reduction initiatives that were in place during the first half of fiscal 2021;~~

•~~travel expense reductions due to COVID-19; and~~

•~~the favorable comparative impact of acquisition-related expenses for the purchase of Drybar Products incurred in the prior year period.~~

~~These factors were partially offset by:~~

•an ~~unfavorable product mix~~increase in ~~the Housewares segment;~~

•~~the unfavorable comparative impact of tariff exclusion refunds received in the prior year period;~~

•~~increased freight and distribution expense;~~

•~~increased customer chargeback activity;~~

•~~higher performance-based annual and long-term incentive compensation~~marketing expense; and

•higher ~~bad debt expense.~~

~~Consolidated adjusted operating income increased 35.3% to $291.5 million, or 18.3% of net sales revenue, compared to $215.4 million, or 17.0% of net sales revenue.~~

acquisition-related expense in connection with the Osprey transaction.

Adjusted operating income increased 16.7%

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~~Housewares~~

~~Comparison of Third Quarter Fiscal 2021~~ to ~~Third Quarter Fiscal 2020~~

~~Operating income was $37.7~~$47.7 million, or ~~16.9%~~19.4% of segment net sales revenue, compared to ~~$42.3 million, or 23.1% of segment net sales revenue. The 6.2 percentage poin~~t ~~decrease in segment operating margin was primarily due to:~~

•~~a less favorable product mix;~~

•~~increased freight and distribution expense to support strong demand;~~

•~~increased marketing expense;~~

•~~higher royalty expense; and~~

•~~increased legal and other professional fees.~~

~~These factors were partially offset by:~~

•~~the favorable impact that higher overall net sales revenue had on operating leverage;~~

•~~a more favorable channel mix; and~~

•~~travel expense reductions due to COVID-19.~~

~~Adjusted operating income decreased 8.3%~~to $40.9 million, or 18.4% ~~of segment net sales revenue, compared to $44.6 million, or 24.3%~~ of segment net sales revenue.

Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Operating income was $112.3 million, or 17.1% of segment net sales revenue, compared to $106.3 million, or 18.8% of segment net sales ~~revenue, compared to $109.2 million, or 22.0% of segment net sales~~ revenue. The ~~3.2~~1.7 percentage point decrease in segment operating margin was primarily due to:

•a less favorable ~~product~~channel mix;

•the unfavorable impact of higher inbound freight ~~and distribution expense to support strong demand;~~expense;

•~~increased~~an increase in marketing expense;

•higher share-based compensation expense; and

•~~increased customer chargeback activity.~~higher distribution expense.

These factors were partially offset ~~by:~~by favorable operating leverage.

•

Adjusted operating income increased 9.3%~~the favorable impact that higher overall~~to $126.9 million, or 19.4% of segment net sales revenue, ~~had on operating leverage;~~

•~~a more favorable channel mix;~~

•~~lower personnel expense as a percentage of sales due to COVID-19 cost reduction initiatives that were in place during the first half of fiscal 2021; and~~

•~~travel expense reductions due to COVID-19.~~

~~Adjusted operating income decreased 0.4%~~compared to $116.1 million, or 20.6% of segment net sales ~~revenue, compared to $116.6 million, or 23.5% of segment net sales~~ revenue.

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Health & Home

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Operating income was $13.6 million, or 6.7% of segment net sales revenue, compared to $30.5 million, or 12.2% of segment net sales ~~revenue, compared to $24.4 million, or 13.1% of segment net sales~~ revenue. The ~~0.9~~5.5 percentage point decrease in segment operating margin was primarily due to:

•~~increased marketing expense;~~unfavorable operating leverage;

•the net unfavorable impact of higher inbound ocean freight expense and related customer price increases;

•EPA compliance costs of $4.9 million;

•higher ~~performance-based annual incentive compensation expense;~~

•~~higher royalty~~distribution expense; and

•~~the unfavorable impact of foreign currency exchange and forward contract settlements year-over-year.~~increase in inventory obsolescence expense.

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These factors were partially offset by:

•~~the favorable impact that higher overall net sales revenue had on operating leverage;~~a decrease in marketing expenses;

•lower inbound air freight expense;

•reduced amortization expense; and

•~~the impact of a more favorable product mix.~~decreased annual incentive compensation expense.

Adjusted operating income ~~increased 22.5%~~decreased 38.3% to ~~$35.3~~$21.8 million, or ~~14.1%~~10.7% of segment net sales revenue, compared to ~~$28.8~~$35.3 million, or ~~15.5%~~14.1% of segment net sales revenue.

Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Operating income was $29.6 million, or 5.4% of segment net sales revenue, compared to $95.8 million, or 14.5% of segment net sales ~~revenue, compared to $51.8 million, or 10.4% of segment net sales~~ revenue. The ~~4.1~~9.1 percentage point ~~increase~~decrease in segment operating margin was primarily due to to:

•unfavorable operating leverage;

•the favorable impact that higher overall net sales revenue had on operating leverage, lower personnel and marketing expenses as a percentage of sales due to COVID-19 cost reduction initiatives in place during the first half of fiscal 2021, and theunfavorable impact of ~~a more favorable product mix.~~higher inbound ocean freight expense;

•EPA compliance costs of $21.0 million;

•higher personnel expense;

•increased distribution expense;

•increase in inventory obsolescence expense; and

•higher share-based compensation expense.

These factors were partially offset by:

•a decrease in marketing expenses;

•lower inbound air freight expense;

•the ~~unfavorable~~favorable comparative impact of tariff exclusion refunds received in ~~the prior year period;~~fiscal 2022;

•~~higher performance-based annual incentive compensation expense;~~

•~~increased customer chargeback activity;~~

•~~higher royalty~~reduced amortization expense; and

•~~higher freight and distribution expense to support increased retail customer shipments.~~decreased annual incentive compensation expense.

Adjusted operating income ~~increased 62.9%~~decreased 43.3% to $62.6 million, or 11.4% of segment net sales revenue, compared to $110.4 million, or 16.7% of segment net sales ~~revenue, compared to $67.8 million, or 13.6% of segment net sales~~ revenue.

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Beauty

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Operating income was $33.2 million, or 19.0% of segment net sales revenue, compared to $32.6 million, or 19.7% of segment net sales revenue. The 0.7 percentage point decrease in segment operating margin was primarily due to:

•the net unfavorable impact of higher inbound freight expense and related customer price increases;

•higher marketing expense;

•an increase in personnel expense; and

•the unfavorable impact of foreign currency exchange fluctuations.

These factors were partially offset by:

•a more favorable product mix;

•reduced royalty expense as a result of the amended Revlon trademark license;

•a decrease in outbound freight costs;

•lower bad debt expense;

•lower inventory obsolescence expense; and

•favorable operating leverage.

Adjusted operating income increased 2.4% to $36.6 million, or 20.9% of segment net sales revenue, compared to ~~$12.6~~$35.8 million, or ~~11.9%~~21.7% of segment net sales revenue.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Operating income was $80.2 million, or 18.4% of segment net sales revenue, compared to $54.9 million, or 15.1% of segment net sales revenue. The ~~7.8~~3.3 percentage point increase in segment operating margin was primarily due to:

•~~the~~ favorable ~~impact that higher overall net sales revenue had on~~ operating leverage;

•~~the margin impact of~~ a more favorable product mix;

•reduced royalty expense as a result of the ~~favorable comparative impact of acquisition-related expenses for the purchase of Drybar Products incurred~~amended Revlon trademark license;

•lower inventory obsolescence expense;

•a decrease in ~~the prior year period;~~outbound freight costs; and

•~~travel expense reductions due to COVID-19.~~a decrease in bad debt expense.

These factors were partially offset by:

•~~higher personnel expense related to the acquisition of Drybar Products;~~

•increased marketing expense;

•the unfavorable impact of higher ~~performance-based annual incentive compensation~~inbound freight expense;

•higher ~~bad debt~~personnel expense;

•higher share-based compensation expense; and

•~~higher legal and other professional fees.~~the unfavorable impact of foreign currency exchange fluctuations.

Adjusted operating income increased ~~111.7%~~43.1% to ~~$35.8~~$93.0 million, or ~~21.7%~~21.3% of segment net sales revenue, compared to ~~$16.9~~$65.0 million, or ~~16.0%~~17.9% of segment net sales revenue.

Table of Contents

~~Comparison of First Nine Months of Fiscal 2021 to First Nine Months of Fiscal 2020~~

~~Operating income was $54.9 million, or 15.1% of segment net sales revenue, compared to $20.0 million, or 7.4% of segment net sales revenue. The~~ ~~7.7 percentage point increase in segment operating margin was primarily due to:~~

•~~the favorable impact that higher overall net sales revenue had on operating leverage;~~

•~~the margin impact of a more favorable product mix;~~

•~~the favorable comparative impact of acquisition-related expenses related to the purchase of Drybar Products incurred in the prior year period;~~

•~~lower personnel expense as a percentage of sales due to COVID-19 cost reduction initiatives that were in place during the first half of fiscal 2021; and~~

•~~travel expense reductions due to COVID-19.~~

~~These factors were partially offset by:~~

•~~higher personnel expense related to the acquisition of Drybar Products;~~

•~~higher performance-based annual incentive compensation expense;~~

•~~higher legal and other professional fees;~~

•~~increased marketing expense; and~~

•~~higher bad debt expense.~~

~~Adjusted operating income increased 109.7% to $65.0 million, or 17.9% of segment net sales revenue, compared to $31.0 million, or 11.5% of segment net sales revenue.~~

Interest Expense

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Interest expense was ~~$2.9~~$3.2 million, compared to ~~$2.8~~$2.9 million. The increase in interest expense was primarily due to higher average levels of debt outstanding and higher average interest rates compared to the same period last ~~year, partially offset by lower average interest rates.~~year.

Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Interest expense was ~~$9.6~~$9.5 million, compared to ~~$9.3~~$9.6 million. The ~~increase~~decrease in interest expense was primarily due to lower average interest rates, partially offset by higher average levels of debt outstanding compared to the same period last ~~year, partially offset by lower average interest rates.~~year.

Income Tax Expense

The period-over-period comparison of our effective tax rate is often impacted by the mix of taxable income in our various tax jurisdictions. Due to our organization in Bermuda and the ownership structure of our foreign subsidiaries, many of which are not owned directly or indirectly by a U.S. parent company, an immaterial amount of our foreign income is subject to U.S. taxation on a permanent basis under current law. Additionally, our intellectual property is largely owned by our foreign subsidiaries, resulting in proportionally higher earnings in jurisdictions with lower statutory tax rates, which decreases our overall effective tax rate.

~~Table of Contents~~

technical corrections to the effective date language in the Tax Cuts and Jobs Act, enacted into law on December 22, 2017 (the “Tax Act”), related to net operating loss carrybacks.

For the ~~nine~~three months ended November 30, ~~2020,~~2021, income tax expense as a percentage of income before income tax was ~~6.5%~~12.9% compared to 14.0% for the same period last year. The year-over-year decrease in the effective tax rate is primarily due to increases in liabilities related to uncertain tax positions in the prior year period, partially offset by shifts in the mix of income in our various tax jurisdictions. For the nine months ended November 30, 2021, income tax expense as a percentage of ~~9.6%~~income before income tax was 13.6% compared to 6.5% for the same period last year, primarily due to ~~this benefit. Income~~the mix of income in our various tax ~~expense for~~jurisdictions and the ~~nine months ended November 30, 2020 also includes other discrete benefits to include reductions~~benefit of ~~U.S. BEAT tax (Base Erosion and Anti-Abuse) and GILTI tax (Global Intangible Low-Tax Income),~~ the ~~recognition of excess tax benefits from share-based compensation settlements, and one-time benefits related to the transition of our Macau entity from offshore to onshore status,~~CARES Act in fiscal 2021, partially offset by the favorable comparative impact of increases in liabilities related to uncertain tax ~~positions.~~positions in the prior year period.

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. During the time the dispute was ongoing, we believe we accurately reported our taxable income and vigorously protested the assessment through administrative processes with the state. During the quarter, we reached an agreement in principle to settle the $6.0 million assessment in dispute for $0.5 million. The agreement was signed on December 4, 2020.

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 currently have an indefinite tax holiday in Macau conditioned on the subsidiary meeting certain employment and investment thresholds. The Macau Offshore Law and its supplementary regulations that grant tax incentives to approved offshore institutions will be abolished on January 1, 2021. Existing approved offshore institutions such as ours can continue to operate under the offshore regime until the end of the calendar year 2020. Beginning in calendar year 2021, our Macau subsidiary will transition to onshore status and become subject to a statutory corporate income tax of approximately 12%. We expect the impact of this change to increase our overall effective tax rate by 1.5 to 2.0 percentage points on an annual basis, beginning with our fiscal 2022. 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.

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Net Income, ~~diluted~~Diluted EPS, ~~adjusted income~~Adjusted Income (non-GAAP), and ~~adjusted diluted~~Adjusted Diluted EPS (non-GAAP)

In order to provide a better understanding of the impact of certain items on our ~~net~~ income and diluted EPS, the ~~analysis~~tables that ~~follows reports~~follow report the comparative after-tax impact of ~~non-cash asset impairment charges,~~ acquisition-related expenses, EPA compliance costs, restructuring charges, tax reform, amortization of intangible assets, and non-cash share-based compensation, as applicable, on ~~net~~ income and diluted EPS for the periods ~~covered~~presented below. For additional information regarding management’s decision to present this non-GAAP financial information, see the introduction to this Item 2,2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


	Three Months Ended November 30, 2021
	Income						Diluted EPS
(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax
As reported (GAAP)	$	86,886	$	11,203	$	75,683	$	3.56	$	0.46	$	3.10

Acquisition-related expenses	1,605		58		1,547		0.07		—		0.06
EPA compliance costs	4,926		74		4,852		0.20		—		0.20
Restructuring charges	5		—		5		—		—		—

Subtotal	93,422		11,335		82,087		3.83		0.46		3.36
Amortization of intangible assets	2,994		197		2,797		0.12		0.01		0.11
Non-cash share-based compensation	6,549		784		5,765		0.27		0.03		0.24
Adjusted (non-GAAP)	$	102,965	$	12,316	$	90,649	$	4.22	$	0.50	$	3.72

Weighted average shares of common stock used in computing diluted EPS											24,399


	Three Months Ended November 30, 2020
	Income						Diluted EPS
(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax
As reported (GAAP)	$	97,876	$	13,721	$	84,155	$	3.89	$	0.55	$	3.34



Restructuring charges	(12)		—		(12)		—		—		—

Subtotal	97,864		13,721		84,143		3.89		0.55		3.34
Amortization of intangible assets	4,501		204		4,297		0.18		0.01		0.17
Non-cash share-based compensation	6,739		403		6,336		0.27		0.02		0.25
Adjusted (non-GAAP)	$	109,104	$	14,328	$	94,776	$	4.33	$	0.57	$	3.76

Weighted average shares of common stock used in computing diluted EPS											25,192

Three Months Ended November 30, 2019
Income Diluted EPS
(in thousands, except per share data) Before Tax Tax Net of Tax Before Tax Tax Net of Tax
As reported (GAAP) $ 76,594 $ 7,895 $ 68,699 $ 3.02 $ 0.31 $ 2.71
Acquisition-related expenses 1,475 22 1,453 0.06 — 0.06
Restructuring charges 12 — 12 — — —
Subtotal 78,081 7,917 70,164 3.07 0.31 2.76
Amortization of intangible assets 4,790 252 4,538 0.19 0.01 0.18
Non-cash share-based compensation 4,758 343 4,415 0.19 0.01 0.17
Adjusted (non-GAAP) $ 87,629 $ 8,512 $ 79,117 $ 3.45 $ 0.34 $ 3.12
Weighted average shares of common stock used in computing diluted EPS 25,396

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		Nine Months Ended November 30, 2020													Nine Months Ended November 30, 2021
		Income						Diluted EPS							Income						Diluted EPS
(in thousands, except per share data)	(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax		(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax
As reported (GAAP)	As reported (GAAP)	$	247,835	$	16,061	$	231,774	$	9.78	$	0.63	$	9.14	As reported (GAAP)	$	212,843	$	28,873	$	183,970	$	8.70	$	1.18	$	7.52

Acquisition-related expenses														Acquisition-related expenses	1,605		58		1,547		0.07		—		0.06
EPA compliance costs														EPA compliance costs	20,998		315		20,683		0.86		0.01		0.85
Restructuring charges														Restructuring charges	380		6		374		0.02		—		0.02

Restructuring charges		355		2		353		0.01		—		0.01
Tax Reform		—		9,357		(9,357)		—		0.37		(0.37)
Subtotal	Subtotal	248,190		25,420		222,770		9.79		1.00		8.79		Subtotal	235,826		29,252		206,574		9.64		1.20		8.45
Amortization of intangible assets	Amortization of intangible assets	13,527		651		12,876		0.53		0.03		0.51		Amortization of intangible assets	8,963		603		8,360		0.37		0.02		0.34
Non-cash share-based compensation	Non-cash share-based compensation	20,654		1,406		19,248		0.82		0.06		0.76		Non-cash share-based compensation	28,349		2,355		25,994		1.16		0.10		1.06
Adjusted (non-GAAP)	Adjusted (non-GAAP)	$	282,371	$	27,477	$	254,894	$	11.14	$	1.08	$	10.05	Adjusted (non-GAAP)	$	273,138	$	32,210	$	240,928	$	11.17	$	1.32	$	9.85

Weighted average shares of common stock used in computing diluted EPS	Weighted average shares of common stock used in computing diluted EPS											25,350		Weighted average shares of common stock used in computing diluted EPS											24,461


		Nine Months Ended November 30, 2019													Nine Months Ended November 30, 2020
		Income						Diluted EPS							Income						Diluted EPS
(in thousands, except per share data)	(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax		(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax
As reported (GAAP)	As reported (GAAP)	$	172,018	$	16,530	$	155,488	$	6.80	$	0.65	$	6.15	As reported (GAAP)	$	247,835	$	16,061	$	231,774	$	9.78	$	0.63	$	9.14

Acquisition-related expenses		1,475		22		1,453		0.06		—		0.06

Restructuring charges	Restructuring charges	1,061		68		993		0.04		—		0.04		Restructuring charges	355		2		353		0.01		—		0.01
Tax reform														Tax reform	—		9,357		(9,357)		—		0.37		(0.37)
Subtotal	Subtotal	174,554		16,620		157,934		6.90		0.66		6.24		Subtotal	248,190		25,420		222,770		9.79		1.00		8.79
Amortization of intangible assets	Amortization of intangible assets	13,129		621		12,508		0.52		0.02		0.49		Amortization of intangible assets	13,527		651		12,876		0.53		0.03		0.51
Non-cash share-based compensation	Non-cash share-based compensation	18,743		1,434		17,309		0.74		0.06		0.68		Non-cash share-based compensation	20,654		1,406		19,248		0.82		0.06		0.76
Adjusted (non-GAAP)	Adjusted (non-GAAP)	$	206,426	$	18,675	$	187,751	$	8.16	$	0.74	$	7.42	Adjusted (non-GAAP)	$	282,371	$	27,477	$	254,894	$	11.14	$	1.08	$	10.05

Weighted average shares of common stock used in computing diluted EPS	Weighted average shares of common stock used in computing diluted EPS											25,295		Weighted average shares of common stock used in computing diluted EPS											25,350

Comparison of Third Quarter Fiscal ~~2021~~2022 to Third Quarter Fiscal ~~2020~~2021

Net Income was ~~$84.2~~$75.7 million, compared to ~~$68.7~~$84.2 million. Diluted EPS was ~~$3.34,~~$3.10, compared to ~~$2.71.~~$3.34. Diluted EPS ~~increased~~decreased primarily due to lower operating income in the Health & Home segment and higher interest expense, partially offset by higher operating income in the Housewares and Beauty ~~and Health & Home segments. This was partially offset by lower operating income~~segments, a decrease in the ~~Housewares segment and higher~~effective income tax ~~expense.~~rate and lower weighted average diluted shares outstanding.

Adjusted income ~~increased $15.7~~decreased $4.1 million, or ~~19.8%~~4.4%, to ~~$94.8~~$90.6 million, compared to ~~$79.1 million the same period last year.~~$94.8 million. Adjusted diluted EPS ~~increased 20.5%~~decreased 1.1% to ~~$3.76,~~$3.72, compared to ~~$3.12.~~$3.76.

Comparison of First Nine Months of Fiscal ~~2021~~2022 to First Nine Months of Fiscal ~~2020~~2021

Net Income was ~~$231.8~~$184.0 million, compared to ~~$155.5~~$231.8 million. Diluted EPS was ~~$9.14,~~$7.52, compared to ~~$6.15.~~$9.14. Diluted EPS ~~increased~~decreased primarily due to ~~higher~~lower operating income in the Health & Home segment and a higher effective income tax rate primarily due to the tax reform benefit recognized in the prior year period, partially offset by higher operating income in the Housewares and Beauty segments and lower ~~income tax expense. This was partially offset by lower operating income in the Housewares segment and higher interest expense.~~weighted average diluted shares outstanding.

Adjusted income ~~increased $67.1~~decreased $14.0 million, or ~~35.8%~~5.5%, to ~~$254.9~~$240.9 million, compared to ~~$187.8~~$254.9 million. Adjusted diluted EPS ~~increased 35.4%~~decreased 2.0% to ~~$10.05,~~$9.85, compared to ~~$7.42.~~$10.05.

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Financial Condition, Liquidity and Capital Resources

Selected measures of our liquidity and capital resources are shown for the periods below:

Nine Months Ended November 30,
2020 2019
Accounts Receivable Turnover (Days) (1) 70.0 68.9
Inventory Turnover (Times) (1) 3.6 2.9
Working Capital (in thousands)
$ 491,563 $ 411,340
Current Ratio 1.8:1 2.3:1
Ending Debt to Ending Equity Ratio 36.4% 21.0%
Return on Average Equity (1) 18.9% 18.2%


	Nine Months Ended November 30,
	2021		2020
Accounts receivable turnover (days) (1)	76.4		70.0
Inventory turnover (times) (1)	2.3		3.6
Working capital (in thousands)	$	539,681	$	491,563
Current ratio	1.9:1		1.8:1
Ending debt to ending equity ratio	33.0%		36.4%
Return on average equity (1)	16.4%		18.9%

(1)Accounts receivable turnover, inventory turnover and return on average equity computations use 12 month trailing net sales revenue, cost of goods sold or net income components as required by the particular measure. The current and four prior quarters' ending balances of accounts receivable, inventory and equity are used for the purposes of computing the average balance component as required by the particular measure.

We principally rely ~~principally~~ on our cash flow from operations and borrowings under our ~~credit facility~~Credit Agreement (as defined below) to finance our operations, ~~acquisitions and capital expenditures. We believe our cash flow from operations and availability under our credit facility are sufficient to meet our working capital and capital expenditure needs.~~

~~Operating Activities~~

Operating activities provided net cash of $249.7 million for the nine months ended November 30, 2020, compared to $101.4 million for the same period last year. The increase was primarily driven by an increase in net income and increased cash from accounts payable and accrued expenses. These factors were partially offset by increased cash used for receivables and inventory.

~~Investing Activities~~

~~During the nine months ended November 30, 2020, we made investments in~~ capital and intangible asset expenditures, ~~of $19.4 million, compared to $13.2 million for the same period last year. The increase is primarily for molds, production~~acquisitions and ~~distribution equipment, information technology equipment, and software.~~

~~Financing Activities~~

~~Financing activities used $98.1 million~~share repurchases. Historically, our principal uses of cash ~~during~~to fund our operations have included operating expenses, primarily SG&A, and working capital, predominantly for inventory purchases and the ~~nine months ended~~extension of credit to our retail customers. We have been able to typically generate positive cash flow from operations sufficient to fund our operating activities. In the past, we have utilized a combination of available cash and existing, or additional, sources of financing to fund strategic acquisitions, share repurchases and capital investments. We had $44.3 million in cash and cash equivalents at November 30, 2020, compared to $80.4 million for the same period last year. The increase in cash used is primarily due to open market repurchases of common stock partially offset by an increase in proceeds from our line of credit.

~~Credit and Other Debt Agreements~~

~~Credit Agreement~~

~~Table of Contents~~

On March 13, 2020, we entered into an amendment to the Credit Agreement. The amendment extended the maturity of the commitment under the Credit Agreement from December 7, 2021 to March 13, 2025. Further, the amendment increased the unsecured revolving commitment from $1.0 billion to $1.25 billion. The accordion was amended to increase it from $200 million to $300 million and to include the ability to use it for term loan commitments. The accordion permits the Company to request to increase its borrowing capacity, not to exceed the $300 million commitment in the aggregate, provided certain conditions are met, including lender approval. Any increase to term loan commitments and revolving loan commitments must be made on terms identical to the revolving loans under the Credit Agreement and must have a maturity date of no earlier than March 13, 2025. Following the amendment, borrowings under the Credit Agreement bear interest at either the base rate or LIBOR, plus a margin based on the Net Leverage Ratio (as defined in the Credit Agreement) of 0% to 1.0% and 1.0% to 2.0%, respectively, for base rate and LIBOR borrowings. Outstanding letters of credit reduce the borrowing availability under the Credit Agreement on a dollar-for-dollar basis. We are able to repay amounts borrowed at any time without penalty.

2021. As of November 30, ~~2020, the outstanding revolving loan principal balance was~~ ~~$426.0 million (excluding prepaid financing fees) and the balance of outstanding letters of credit was $19.2 million. For the three and nine month periods ended~~ ~~November 30, 2020~~, borrowings under the Credit Agreement incurred interest expense at rates ranging from 1.14% to 3.25% and 1.14% to 4.75%, respectively. As of November 30, 2020, the amount available for borrowings under the Credit Agreement was $804.8 million. Covenants in the Credit Agreement limit2021, the amount of ~~total indebtedness we can incur. As of~~ ~~November 30, 2020, these covenants did not limit~~cash and cash equivalents held by our ~~ability to incur $804.8 million of additional debt under the Credit Agreement.~~

~~Other Debt Agreements~~

As of November 30, 2020, we have an aggregate principal balance of $18.6 million (excluding prepaid financing fees) under a loan agreement (the “MBFC Loan”) with the Mississippi Business Finance Corporation (the “MBFC”), whichforeign subsidiaries was entered into in connection with the issuance by MBFC of taxable industrial development revenue bonds (the “Bonds”). The borrowings were used to fund construction of our Olive Branch, Mississippi distribution facility. Since March 2018, the MBFC Loan can be called by the holder at any time. The remaining loan balance is payable as follows: $1.9 million annually on March 1, 2021 and 2022; and $14.8 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023.

On May 14, 2020, Helen of Troy Limited and certain of its subsidiaries entered into the Sixth Amendment to Guaranty Agreement (the “Amended Guaranty”) in favor of Bank of America, N.A. The Amended Guaranty amends the Guaranty Agreement (as amended, the “Guaranty Agreement”), dated March 1, 2013, made by the Company and certain of its subsidiaries in favor of Bank of America, N.A. and other lenders. Certain of the representations and warranties, and covenants in the Guaranty Agreement were amended by the Amended Guaranty to include or modify certain baskets, exceptions and other customary provisions.

~~Table of Contents~~

~~the Fifth Supplemental Indenture). The Fifth Supplemental Indenture amended the pricing grid for the Eurodollar and Base Rate margins.~~

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 key financial covenants, defined in the table below. Our debt agreements also contain other customary covenants, including, among other things, covenants restricting or limiting us, except under certain conditions set forth therein, from (1) incurring debt, (2) incurring liens on our properties, (3) making certain types of investments, (4) selling certain assets or making other fundamental changes relating to mergers and consolidations, and (5) repurchasing shares of our common stock and paying dividends. Our debt agreements also contain customary events of default, including failure to pay principal or interest when due, among others. Our debt agreements are cross-defaulted to each other. Upon an event of default under our debt agreements, the holders or lenders may, among other things, accelerate the maturity of any amounts outstanding under our debt agreements. The commitments of the lenders to make loans to us under the Credit Agreement are several and not joint. Accordingly, if any lender fails to make loans to us, our available liquidity could be reduced by an amount up to the aggregate amount of such lender’s commitments under the Credit Agreement.

~~The table below provides the formulas currently in effect for certain key financial covenants as defined under our debt agreements:~~


~~Applicable Financial Covenant~~			~~Credit Agreement and MBFC Loan~~
~~Minimum Interest Coverage Ratio~~			~~EBIT (1)~~÷~~Interest Expense (1)~~
			~~Minimum Required: 3.00 to 1.00~~
~~Maximum Leverage Ratio~~			~~Total Current and Long Term Debt (2)~~ ÷
			~~EBITDA (1) + Pro Forma Effect of Transactions~~
			~~Maximum Currently Allowed: 3.50 to 1.00 (3)~~

~~Key Definitions:~~

~~EBIT: Earnings + Interest Expense + Taxes + Non-Cash~~

~~Charges (4) + Certain Allowed Addbacks (4) - Certain Non-Cash Income (4)~~

~~EBITDA: EBIT + Depreciation and Amortization Expense~~

~~Pro Forma Effect of Transactions: For any acquisition, pre-acquisition EBITDA of the acquired business is included so that the~~

EBITDA of the acquired business included in the computation equals its twelve month trailing total. In addition, the amount of certain pro forma run-rate cost savings for acquisitions or dispositions may be added to EBIT and EBITDA.

~~Notes:~~

~~(1)Computed using totals for the latest reported four consecutive fiscal quarters~~

~~(2)Computed using the ending balances as of the latest reported fiscal quarter.~~

~~(3)~~In the event a qualified acquisition is consummated, the maximum leverage ratio is 4.25 to 1.00 for the first fiscal quarter after the qualified acquisition and then steps down until the maximum leverage ratio is 3.75 to 1.00 at the end of the fifth fiscal quarter after the qualified acquisition is consummated.

~~(4)As described in the Credit Agreement and Guaranty Agreement.~~

~~Contractual Obligations~~

As of November 30, 2020, there have been no material changes from the information provided in our latest annual report on Form 10-K. Additional information regarding contractual obligations can be found in Notes 12, 13, 14 and 15 to the accompanying condensed consolidated financial statements.

~~Off-Balance Sheet Arrangements~~

$23.9 million. We have no existing activities involving special purpose entities or off-balance sheet financing.

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~~Current and Future Capital Needs~~

Based on our current financial condition and current operations, we believe that cash ~~flow~~flows from operations and available financing sources will continue to provide sufficient capital resources to fund our foreseeable short- and long-term liquidity requirements. ~~We expect our capital needs to stem primarily from the need to purchase sufficient levels of inventory and to carry normal levels of accounts receivable on our balance sheet.~~

On March 24, 2020, we borrowed approximately $200 million under the Credit Agreement as part of a comprehensive precautionary approach to increase our cash and cash equivalent position and maximize our financial flexibility in light of the volatility in the global markets resulting from the COVID-19 outbreak. We subsequently repaid the majority of this amount during May 2020. Due to the continued uncertainty of COVID-19, we have maintained cash and cash equivalent balances in excess of our operating needs and higher than historical levels.

We continue to evaluate acquisition opportunities on a regular basis. We may finance acquisition activity with available cash, the issuance of shares of common stock, additional debt, or other sources of financing, depending upon the size and nature of any such transaction and the status of the capital markets at the time of such acquisition. Subsequent to the end of our third quarter of fiscal 2022, we completed the acquisition of Osprey, which was funded with cash on hand and a $435.0 million borrowing under our existing revolving credit facility. For additional information, see Note 16 to the accompanying condensed consolidated financial statements.

We may also elect to repurchase additional shares of common stock under our Board of ~~Directors~~Directors' authorization, subject to limitations contained in our debt agreements and based upon our assessment of 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. We may finance share repurchases with available cash, additional debt or other sources of financing. For additional information, see Part II, Item 5,5. “Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities” in our ~~latest annual report on~~ Form 10-K and Part II, Item 2,2., “Unregistered Sales of Equity Securities and Use of ~~Proceeds”~~Proceeds" in this report.

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Operating Activities

Operating activities used net cash of $5.1 million for the nine months ended November 30, 2021, compared to net cash provided of $249.7 million for the same period last year. The decrease in cash provided by operating activities was primarily driven by a decrease in cash earnings and increases in cash used for accounts payable primarily for inventory purchases, incentive compensation payments and tax withholding settlements, partially offset by an increase in accrued income taxes.

Investing Activities

Investing activities provided net cash of $8.5 million during the nine months ended November 30, 2021, compared to net cash used of $19.4 million for the same period last year. The increase in cash provided by investing activities was primarily due to proceeds received from the sale of our North America Personal Care business in the second quarter of fiscal 2022 and sale of property and equipment, partially offset by an increase in capital and intangible asset expenditures. We made investments in capital and intangible asset expenditures of $41.5 million during the nine months ended November 30, 2021, compared to $19.4 million for the same period last year. The increase in capital and intangible asset expenditures was primarily for land and initial construction expenditures related to a new 2 million square foot distribution center for our Housewares segment. Capital and intangible asset expenditures during both periods also included expenditures for tools, molds, and other production equipment and computer, software, furniture and other equipment.

Financing Activities

Financing activities used net cash of $4.2 million during the nine months ended November 30, 2021, compared to net cash used of $98.1 million for the same period last year. The decrease in cash used by financing activities is primarily due to a decrease in open market repurchases of common stock.

Credit and Other Debt Agreements

Credit Agreement

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 $1.25 billion. As of November 30, ~~2020,~~2021, the outstanding revolving loan principal balance was $434.0 million (excluding prepaid financing fees), the balance of outstanding letters of credit was $32.7 million and the amount available for borrowings was $783.3 million. Covenants in the Credit Agreement limit the amount of ~~cash~~total indebtedness we can incur. As of November 30, 2021, these covenants effectively limited our ability to incur more than $735.8 million of additional debt from all sources, including the Credit Agreement, or $783.3 million in the event a qualified acquisition is consummated.

Subsequent to the end of our third quarter of fiscal 2022, we borrowed $435.0 million under our Credit Agreement in connection with the acquisition of Osprey. The proceeds of the borrowing and cash ~~equivalents held by~~on hand were used to pay all of the cash consideration payable for the acquisition, including amounts for cash acquired. After giving effect to the borrowing, as of December 29, 2021, the remaining amount available for borrowings under our ~~foreign subsidiaries~~Credit Agreement was ~~$30.2~~$351.8 million. As of December 29, 2021, covenants in the Credit Agreement did not limit our ability to incur $351.8 million of additional debt under the Credit Agreement.

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Other Debt Agreements

As of November 30, 2021, we have an aggregate principal balance of $16.7 million (excluding prepaid financing fees) under an unsecured loan agreement with the Mississippi Business Finance Corporation.

As of November 30, 2021, there have been no material changes to the information provided in our Form 10-K.

New Accounting Guidance

For information on recently adopted and issued accounting pronouncements, see Note 2 to the accompanying condensed consolidated financial statements.

Information Regarding Forward-Looking Statements

Certain written and oral statements may constitute “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made in this report, in other filings with the ~~Securities and Exchange Commission (the “SEC”),~~SEC, in press releases, and in certain other oral and written presentations. Generally, the words “anticipates”, “believes”, “expects”, “plans”, “may”, “will”, “would”, “should”, “seeks”, “estimates”, “project”, “predict”, “potential”, “currently”, “continue”, “intends”, “outlook”, “could”, and other similar words identify forward-looking statements. All statements that address operating results, events or developments that may occur in the future, including statements related to sales, earnings per share results, and statements expressing general expectations about future operating results, are forward-looking statements and are based upon our current expectations and various assumptions. We believe there is a reasonable basis for our expectations and assumptions, but there can be no assurance that we will realize our expectations or that our assumptions will prove correct. Forward-looking statements are subject to risks that could cause them to differ materially from actual results. Accordingly, we caution readers not to place undue reliance on forward-looking statements. We believe that these risks include but are not limited to the risks described in this report and that are otherwise described from time to time

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in our SEC reports as filed. We undertake no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.

Such risks are not limited to, but may include:

•our ability to successfully manage the demand, supply and operational challenges associated with the actual or perceived effects of COVID-19 and any similar future public health crisis, pandemic or epidemic;

•our ability to deliver products to our customers in a timely manner and according to their fulfillment standards;

•~~the costs of complying with the business demands~~actions taken by large customers that may adversely affect our gross profit and ~~requirements of large sophisticated customers;~~operating results;

•our dependence on the strength of retail economies and vulnerabilities to any prolonged economic downturn, including from the effects of COVID-19;

•our ~~relationships with key customers and licensors;~~

•~~our~~ dependence on sales to several large customers and the risks associated with any loss of, or substantial decline in, sales to top customers;

•expectations regarding recent ~~pending~~acquisitions (including Osprey) and any future acquisitions or divestitures, including our ability to realize ~~anticipated cost savings,~~related synergies ~~and other benefits~~ along with our ability to effectively integrate acquired businesses or ~~separate~~disaggregate divested businesses;

•~~circumstances which may contribute~~our reliance on our Chief Executive Officer and a limited number of other key senior officers to ~~future impairment of goodwill, intangible or other long-lived assets;~~operate our business;

•obsolescence or interruptions in the ~~retention~~operation of our central global Enterprise Resource Planning systems and ~~recruitment of key personnel;~~

•~~the costs, complexity and challenges of upgrading and managing our global~~other peripheral information systems;

•~~the risks associated with~~occurrence of cyber incidents or failure by us or our third-party service providers to maintain cybersecurity and ~~information security breaches;~~the integrity of confidential internal or customer data;

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•our dependence on third-party manufacturers, most of which are located in the Asia Pacific market, and any inability to obtain products from such manufacturers;

•the risks associated with global legal developments regarding privacy and data security could result in changes to our business practices, penalties, increased cost of operations, or otherwise harm our business;

•~~risks associated with foreign currency exchange rate fluctuations;~~

•~~the risks associated with accounting for tax positions, tax audits and related disputes with taxing authorities;~~

•the risks of potential changes in laws in the U.S. or abroad, including tax laws, regulations or treaties, employment and health insurance laws and regulations, laws relating to environmental policy, personal data, financial regulation, transportation policy and infrastructure policy along with the costs and complexities of compliance with such laws;

•~~our ability to continue to avoid classification as a controlled foreign corporation;~~

•~~the risks of new legislation enacted in Bermuda and Barbados in response to the European Union’s review of harmful tax competition;~~

•risks associated with weather conditions, the duration and severity of the cold and flu season and other related factors;

•our dependence on foreign sources of supply and foreign manufacturing, and associated operational risks including, but not limited to, long lead times, consistent local labor availability and capacity, and timely availability of sufficient shipping carrier capacity;

•~~the impact of changing costs of raw materials, labor and energy on cost of goods sold and certain operating expenses;~~

•~~the risks associated with significant tariffs or other restrictions on imports from China or any retaliatory trade measures taken by China;~~

•~~the risks associated with~~ the geographic concentration and peak season capacity of certain U.S. distribution ~~facilities;~~

•facilities which increase our ~~projections of product demand, sales and net income are highly subjective in nature and future sales and net income~~risk to disruptions that could ~~vary~~affect the our ability to deliver products in a ~~material amount from such projections;~~timely manner;

•the risks associated with the use of licensed trademarks ~~licensed~~ from ~~and~~or to third parties;

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•our ability to develop and introduce a continuing stream of innovative new products to meet changing consumer preferences;

•the risks associated with trade barriers, exchange controls, expropriations, and other risks associated with ~~U.S.~~domestic and foreign operations;

•the risks associated with significant changes in or our compliance with regulations, interpretations or product certification requirements;

•the risks associated with our discussions with the EPA on the implementation of compliance plans related to certain of our products within the Health & Home segment;

•the risks associated with global legal developments regarding privacy and data security that could result in changes to our ~~liquidity~~business practices, penalties, increased cost of operations, or otherwise harm our business;

•the risks associated with accounting for tax positions and the resolution of tax disputes;

•the risks of potential changes in laws and regulations, including environmental, health and safety and tax laws, and the costs and complexities of compliance with such laws;

•our ability to continue to avoid classification as a ~~result~~Controlled Foreign Corporation;

•the risks associated with legislation enacted in Bermuda and Barbados in response to the European Union’s review of ~~changes to capital market conditions and~~harmful tax competition;

•the risks of significant tariffs or other ~~constraints~~restrictions being placed on imports from China or ~~events that impose constraints on our cash resources and ability to operate our business;~~Mexico or any retaliatory trade measures taken by China or Mexico;

•the risks associated with product recalls, product liability and other claims ~~and related litigation~~ against us;

•associated financial risks including but not limited to, significant impairment of our goodwill, indefinite-lived and definite-lived intangible assets or other long-lived assets;

•the risks associated with foreign currency exchange rate fluctuations;

•increased costs of raw materials, energy and transportation;

•projections of product demand, sales and net income, which are highly subjective in nature, and from which future sales and net income could vary in a material amount; and

•the risks to our liquidity or cost of capital which may be materially adversely affected by constraints or changes in ~~regulations or product certifications.~~the capital and credit markets and limitations under our financing arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the information provided in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in our Form ~~10-K for the fiscal year ended February 29, 2020.~~10-K. Additional information regarding our risk management activities can be found in Notes ~~13, 14~~9, 10 and 1511 to the accompanying unaudited condensed consolidated financial statements.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Our management, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), maintains disclosure controls and procedures as defined in ~~Rules~~Rule 13a-15(e) under the Securities Exchange Act of 1934 ~~(“Exchange~~(the “Exchange Act”) that are designed to provide

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reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Our management, including our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended November 30, ~~2020.~~2021. Based upon that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective at a reasonable level of assurance as of November 30, ~~2020,~~2021, the end of the period covered by this quarterly report on Form 10-Q.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

In connection with the evaluation described above, we identified no change in our internal control over financial reporting as defined in Rule 13a-15(f) ofunder the Exchange Act that occurred during our fiscal quarter ended November 30, ~~2020,~~2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

EPA Regulatory Matter

In our quarterly report on Form 10-Q for our first quarter of fiscal 2022, we disclosed that we were in discussions with the EPA regarding the compliance of packaging claims on certain of our products in the air and water filtration categories and a limited subset of humidifier products within the Health & Home segment that are sold in the U.S. The EPA did not raise any product quality, safety or performance issues. As a result of these packaging compliance discussions, on May 27, 2021, we voluntarily implemented a temporary stop shipment action across this line of products in the U.S. while we worked with the EPA towards an expedient resolution. In July 2021, the EPA approved modest changes to our labeling claims on packaging of existing water filtration products, which we implemented, and subsequently began shipping in limited quantities during the second quarter of fiscal 2022. The shipping volume for these products has continued to increase and, in September 2021, we returned to a more normalized level of shipping activity. In August 2021, the EPA approved changes to our air filtration packaging and we implemented a repackaging plan. We began shipping limited quantities of the impacted products at the end of August 2021 and returned to a more normalized level of shipping activity in November 2021. We have also resolved the majority of the packaging compliance concerns on the limited subset of humidifier products and do not expect them to have a material impact on our consolidated financial results. Our consolidated and Health & Home segment’s net sales revenue, gross profit and operating income for the nine months ended November 30, 2021, have been materially and adversely impacted by the stop shipment actions and the time needed to execute repackaging plans after changes were approved by the EPA. While we have resumed normalized levels of shipping of the affected inventory, we are still in process of repackaging our existing inventory of affected products. If we are not able to execute our repackaging plans on schedule to meet demand, our net sales revenue, gross

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profit and operating income could continue to be materially and adversely impacted. At this time, we are not aware of any fines or penalties related to this matter imposed against us by the EPA. While we do not anticipate material fines or penalties, there can be no assurances that such fines or penalties will not be imposed.

See Note 8 to our condensed consolidated financial statements, Part I, Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including “EPA Compliance Costs” and Part II, Item 1A., “Risk Factors” in this Form 10-Q for additional information.

ITEM 1A. RISK FACTORS

The ownership of our common stock involves a number of risks and uncertainties. When evaluating the Company and our business before making an investment decision regarding our securities, potential investors should carefully consider the risk factors and uncertainties described in Part 1, Item 1A. “Risk Factors” of our annual report on Form 10-K for the fiscal year ended February ~~29, 2020.~~28, 2021 (“Form 10-K”). Since the filing of our ~~annual report on~~ Form 10-K, there have been no material changes in our risk factors from those disclosed ~~therein.~~therein except as follows.

Significant changes in or our compliance with regulations, interpretations or product certification requirements could adversely impact our operations.

As a global company, we are subject to U.S. and foreign regulations, including environmental, health and safety laws, and industry-specific product certifications. Many of the products we sell are subject to product safety laws and regulations in various jurisdictions. These laws and regulations specify the maximum allowable levels of certain materials that may be contained in our products, provide statutory prohibitions against misbranded and adulterated products, establish ingredients and manufacturing procedures for certain products, specify product safety testing requirements, and set product identification, labeling and claim requirements. For example, thermometers distributed by our Health & Home segment must comply with various regulations governing the production and distribution of medical devices.

Additionally, some of our product lines within our Health & Home segment are subject to product identification, labeling and claim requirements, which are monitored and enforced by regulatory agencies, such as the U.S. Environmental Protection Agency (the “EPA”), U.S. Customs and Border Protection, the U.S. Food and Drug Administration, and the U.S. Consumer Product Safety Commission.

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adversely impacted by the stop shipment actions and the time needed to execute repackaging plans after changes were approved by the EPA. While we have resumed normalized levels of shipping of the affected inventory, we are still in process of repackaging our existing inventory of affected products. If we are not able to execute our repackaging plans on schedule to meet demand, our net sales revenue, gross profit and operating income could continue to be materially and adversely impacted. The extent to which net sales revenue, gross profit and operating income could be impacted will primarily depend on product demand and the duration of time required to repackage the affected inventory. In addition, our net sales revenue could be materially and adversely impacted by customer returns, an increase in sales discounts and allowances and by the potential impact of distribution losses at certain retailers. There can also be no assurance that fines or penalties will not be imposed by the EPA.

During the first quarter of fiscal 2022, we recorded a $13.1 million charge to cost of goods sold to write-off the obsolete packaging for the affected products in our inventory on-hand and in-transit as of the end of the first quarter of fiscal 2022. During the second and third quarters of fiscal 2022, we incurred additional compliance costs of $3.0 million and $4.9 million, respectively, comprised of incremental warehouse storage costs and legal fees of $2.6 million and $4.6 million, respectively, which were recognized in SG&A, and storage and obsolete packaging charges from vendors of $0.4 million and $0.3 million, respectively, which were recognized in cost of goods sold.In addition, during the second and third quarters of fiscal 2022, we incurred and capitalized into inventory costs to repackage a portion of our existing inventory of the affected products and expect to continue to incur and capitalize such costs as we continue to repackage the remainder of the inventory during the fourth quarter of fiscal 2022.We also expect to incur additional compliance costs, which may include incremental freight, warehouse storage costs, charges from vendors, and legal fees, among other things. Such potential incremental EPA compliance costs will be expensed as incurred and could materially and adversely impact our consolidated and Heath & Home segment's gross profit and operating income. The consequences of the compliance requirements and other matters pertaining to our discussions with the EPA are inherently uncertain. Accordingly, additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today. As a result, our business, results of operations and financial condition could be adversely and materially impacted in ways that we are not able to predict today. For additional information refer to Part I, Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including “EPA Compliance Costs” in this Form 10-Q.

The ongoing compliance efforts with the EPA related to our Health & Home products, as well as significant new regulations, material changes to existing regulations, or greater oversight, enforcement or changes in interpretation of existing regulations, could further delay or interrupt distribution of our products in the U.S. and other countries, result in fines or penalties or cause our costs of compliance to increase. Additionally, we cannot guarantee that our products will receive regulatory approval in all countries. Similarly, some of our Beauty segment’s customers require that our Beauty appliances comply with various safety certifications, including UL certifications. Significant new certification requirements or changes to existing certification requirements could further delay or interrupt distribution of our products, or make them more costly to produce.

We are not able to predict the nature of potential changes to, or enforcement of laws, regulations, product certification requirements, repeals or interpretations. Nor are we able to predict the impact that any of these changes would have on our business in the future. Further, if we were found to be noncompliant with applicable laws and regulations in these or other areas, we could be subject to governmental or regulatory actions, including fines, import detentions, injunctions, product withdrawals or recalls or asset seizures, any of which could have a material adverse effect on our business, results of operations and financial condition.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In ~~May 2019,~~August 2021, our Board of Directors authorized the repurchase of up to ~~$400~~$500 million of our outstanding common stock. The authorization isbecame effective ~~until May 2022~~August 25, 2021, for a period of three years, and replaced our former repurchase authorization, of which ~~$107.4~~approximately $79.5 million ~~was outstanding at the time the new authorization was approved.~~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. See Note 106 to the accompanying condensed consolidated financial statements for additional information.

Our current equity-based compensation plans include provisions that allow for the ~~"net exercise"~~“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 or other share-based award holders are~~equity holder can be settled by having the 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:

Period Total Number of
Shares Purchased (1) Average Price
Paid per Share Total Number of
Shares Purchased as Part of Publicly
Announced Plans
or Programs Maximum Dollar Value of
Shares that May
Yet be Purchased
Under the Plans
or Programs
(in thousands) (2)
September 1 to September 30, 2020 5,710 $ 194.97 5,710 $ 381,706
October 1 to October 31, 2020 746,276 201.07 746,276 231,651
November 1 to November 30, 2020 214,958 193.68 214,958 190,019
Total 966,944 $ 199.39 966,944


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands) (2)
September 1 to September 30, 2021	5,557	$	239.19	5,557	$	498,671
October 1 to October 31, 2021	6,036	229.28		6,036	497,287
November 1 to November 30, 2021	466	247.75		466	497,171
Total	12,059	$	234.56	12,059

(1)The number of shares ~~above~~ includes shares of common stock acquired from employees who tendered shares to: (i) satisfy the tax withholding on equity awards as part of our long-term incentive plans or (ii) satisfy the exercise price on stock option exercises. For the three months ended November 30, ~~2020, 6,115 shares~~2021, there were ~~acquired at a weighted average per share price of $195.26.~~no common stock open market purchases.

(2)Reflects the remaining dollar value of shares that could be purchased under our current stock repurchase authorization through the expiration or termination of the plan. For additional information, see Note 106 to the accompanying condensed consolidated financial statements.

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ITEM 6.

EXHIBITS

(a)

Exhibits

31.1*

Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32**

Joint certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

Financial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended November 30, ~~2020,~~2021, formatted in Inline eXtensible Business Reporting Language ~~("iXBRL"~~(“iXBRL”): (i) Condensed Consolidated Balance ~~Sheet,~~Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Stockholders' Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to the Condensed Consolidated Financial Statements.

104

Cover Page, Interactive Data File formatted in iXBRL and contained in Exhibit 101.

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		HELEN OF TROY LIMITED
		(Registrant)

Date:	January ~~8, 2021~~7, 2022	/s/ Julien R. Mininberg
		Julien R. Mininberg
		Chief Executive Officer, Director and Principal Executive Officer

Date:	January ~~8, 2021~~7, 2022	/s/ ~~Brian L. Grass~~Matthew J. Osberg
		~~Brian L. Grass~~Matthew J. Osberg
		Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

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	Common Stock			Additional Paid in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Shareholders' Equity
(in thousands, including shares)	Shares	Par Value
Balances at August 31, 2020	25,328	$	2,533	$	274,643	$	(14,320)	$	1,045,673	$	1,308,529
Net income	—	—		—		—		84,155		84,155

Other comprehensive income, net of tax	—	—		—		2,035		—		2,035
Exercise of stock options	1	0		70		—		—		70
Net issuance and settlement of restricted stock	20	2		(2)		—		—		0
Issuance of common stock related to stock purchase plan	12	1		1,709		—		—		1,710
Common stock repurchased and retired	(967)	(97)		(5,870)		—		(186,833)		(192,800)
Share-based compensation	—	—		6,739		—		—		6,739

Balances at November 30, 2020	24,394	$	2,439	$	277,289	$	(12,285)	$	942,995	$	1,210,438

Balances at February 29, 2020	25,194	$	2,519	$	268,043	$	(7,005)	$	898,166	$	1,161,723
Net income	—	—		—		—		231,774		231,774

Other comprehensive loss, net of tax	—	—		—		(5,280)		—		(5,280)
Exercise of stock options	13	2		915		—		—		917
Net issuance and settlement of restricted stock	189	19		(19)		—		—		0
Issuance of common stock related to stock purchase plan	27	2		3,609		—		—		3,611
Common stock repurchased and retired	(1,029)	(103)		(15,913)		—		(186,945)		(202,961)
Share-based compensation	—	—		20,654		—		—		20,654

Balances at November 30, 2020	24,394	$	2,439	$	277,289	$	(12,285)	$	942,995	$	1,210,438

Balances at August 31, 2019	25,130	$	2,513	$	256,995	$	(4,755)	$	832,622	$	1,087,375
Net income	—	—		—		—		68,699		68,699

Other comprehensive loss, net of tax	—	—		—		(130)		—		(130)
Exercise of stock options	7	1		556		—		—		557
Net issuance and settlement of restricted stock	21	3		(3)		—		—		0
Issuance of common stock related to stock purchase plan	15	1		1,426		—		—		1,427
Common stock repurchased and retired	(6)	(1)		(1,001)		—		0		(1,002)
Share-based compensation	—	—		4,758		—		—		4,758

Balances at November 30, 2019	25,167	$	2,517	$	262,731	$	(4,885)	$	901,321	$	1,161,684

Balances at February 28, 2019	24,946	$	2,495	$	246,585	$	1,191	$	746,366	$	996,637
Net income	—	—		—		—		155,488		155,488

Other comprehensive loss, net of tax	—	—		—		(6,076)		—		(6,076)
Exercise of stock options	69	7		4,183		—		—		4,190
Net issuance and settlement of restricted stock	199	21		(21)		—		—		0
Issuance of common stock related to stock purchase plan	30	2		2,833		—		—		2,835
Common stock repurchased and retired	(77)	(8)		(9,592)		—		(533)		(10,133)
Share-based compensation	—	—		18,743		—		—		18,743

Balances at November 30, 2019	25,167	$	2,517	$	262,731	$	(4,885)	$	901,321	$	1,161,684


(in thousands)	Estimated Useful Lives (Years)			November 30, 2020		February 29, 2020
Land		-		$	12,644	$	12,644
Building and improvements	3	-	40	117,061		115,592
Computer, software, furniture and other equipment	3	-	15	98,382		89,257
Tools, molds and other production equipment	3	-	7	43,001		37,652
Construction in progress		-		9,169		9,302
Property and equipment, gross				280,257		264,447
Less accumulated depreciation				(144,462)		(132,340)
Property and equipment, net				$	135,795	$	132,107



(in thousands)	Three Months Ended		Nine Months Ended
November 30, 2020	$	4,501	$	13,527
November 30, 2019	4,790		13,129


	Fair Values (1)

(in thousands)	November 30, 2020		February 29, 2020
Assets:
Money market accounts	$	118,559	$	2,648
Interest rate swaps	0		0
Foreign currency contracts	7		2,083
Total assets	$	118,566	$	4,731

Liabilities:
Floating rate debt	$	440,381	$	339,305
Interest rate swaps	11,627		10,717
Foreign currency contracts	5,328		159
Total liabilities	$	457,336	$	350,181