1
As filed with the Securities and Exchange Commission on November 13, 1998September 6, 2002
Registration No. 333-____
===============================================================================333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------------
HELEN OF TROY LIMITED
(Exact name of registrant as specified in its charter)
BERMUDA 74-2692550
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6827 MARKET AVENUE
EL PASO, TEXAS 79915
(915) 779-6363CLARENDON HOUSE
CHURCH STREET
HAMILTON, BERMUDA
(441) 295-1422
(Address, including zip code, and telephone number,including area code, of
registrant's principal executive offices)
--------------------------
SAM L. HENRY1 HELEN OF TROY LIMITED
6827 MARKET AVENUEPLAZA
EL PASO, TEXAS 7991579912
(915) 779-6363225-8000
(Registrant's United States mailing address and telephone number)
----------
VINCENT D. CARSON
VICE PRESIDENT AND GENERAL COUNSEL
1 HELEN OF TROY PLAZA
EL PASO, TEXAS 79912
(915) 225-8000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a copy to:
DANIEL W. RABUN
BAKER & MCKENZIE
2001 ROSS AVENUE, SUITE 45002300
DALLAS, TEXAS 75201
(214) 978-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X][ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
TITLE OF EACH CLASS OF SHARES AMOUNT TO BE REGISTERED
=================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNTTITLE OF SECURITIES TO BE REGISTERED REGISTERED AGGREGATEAMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED(1) REGISTERED SHARE(2) PRICE(2) REGISTRATION FEE
SECURITY(2) PRICE(2)
===================================================================================================================================- -----------------------------------------------------------------------------------------------------------------
Common Shares,Stock, par value
$.10 350,000 $15.125 $5,293,750 $1,471.66
per share ===================================================================================================================================
Common Shares, par value $.10 580,000(1) $15.125 $8,772,500 $2,438.76
per share
===================================================================================================================================800,000 $11.64 $9,312,000 $857
Preference Share Purchase
Rights 800,000 rights N/A N/A N/A(3)
=================================================================================================================
(1) Includes 350,000 Common Shares issuable upon exercise or redemption of
Contingent Value Rights and 230,000 Common Shares issuable pursuantPursuant to a
contingent purchase price arrangement. For purposes of estimating the number
of Common Shares issuable upon exercise or redemption of the Contingent Value
Rights and issuable pursuant to the contingent purchase price arrangement, the
registrant calculated the number of shares to be issued based upon an assumed
price of $10.00. In accordance with Rule 416 ofunder the Securities Act of 1933, as amended, (the "Securities Act"), there are also being registered suchthis
registration statement covers any additional Common Shares as mayshares of common stock of
Helen of Troy Limited that become issuable pursuant toby reason of any stock dividend,
stock split, recapitalization or any other similar transaction without
receipt of consideration that results in an increase in the anti-dilution provisionsnumber of
the Contingent Value Rights.outstanding shares of common stock of Helen of Troy Limited.
(2) Estimated solely for the purpose of computing the amount ofcalculating the registration fee
in accordance withpursuant to Rule 457(c) ofpromulgated under the Securities Act of 1933, as
amended, on the basis of the average of the high and low salessale prices of the
Common Sharescommon stock on the NasdaqNASDAQ National Market System on November 12, 1998.September 5, 2002.
(3) In accordance with Rule 457(g) under the Securities Act of 1933, as
amended, no additional registration fee is required in respect of the
preference share purchase rights.
================================================================================
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A)8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A)8(a), MAY DETERMINE.
===============================================================================
2THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 13, 1998SEPTEMBER 6, 2002
PROSPECTUS
800,000 SHARES
HELEN OF TROY LIMITED
930,000 COMMON SHARES
THE COMMON SHARESSTOCK
The shareholders800,000 shares of common stock of Helen of Troy Limited ("HoT") listed below are offering and
selling up to 930,000 common shares of Helen of Troy Limited ("HoT Common
Shares") under this prospectus. There are four selling shareholders. These
selling shareholders were formerly shareholders of DCNL, Inc. which was
acquired by HoT on October 19, 1998. The selling shareholders acquired 350,000
HoT Common Shares as a result of the acquisition. In addition, there are an
additional 580,000 HoT Common Shares which may be issued in the future by HoT
as a result of the acquisition. Some or all of the selling shareholders expect
to sell their shares.
THE PROCEEDS AND DETERMINING THE OFFERING PRICE
All net proceeds from the sale of the HoT Common Shares will go to the
shareholders who offer and sell their shares. Accordingly, HoT will not receive
any proceeds from sales of the HoT Common Shares.
HoT Common Shares are listed on the Nasdaq National Market, and trade on the
ticker symbol: "HELE." We anticipate that the HoT Common Shares being sold
underoffered
through this prospectus will be sold by the selling security holders listed on
page 4 of this prospectus.
The sale of the common stock offered through this prospectus may be
effected by the selling security holders from time to time in transactions on
the NASDAQ National Market System, in privately negotiated transactions or in a
combination of such methods of sale. The common stock may be sold at fixed
prices that may change, at prices prevailing at the time of sale, at prices
relating to such prevailing prices or at negotiated prices. None of the proceeds
from this offering will be received by Helen of Troy Limited.
Helen of Troy Limited's common stock is listed on the NasdaqNASDAQ National
Market although
that listing has not yet been approved. If that listing is approved,System under the selling shareholders may offer their HoT Common Shares through public or
private transactions. These transactions may take place on or offsymbol "HELE." On September 5, 2002, the Nasdaq,
or on or off another national securities exchange on which HoT Common Shares
are approved for listing in the future. The transactions may take place at
prevailing market prices or at privately negotiated prices. On November 12,
1998, the closinglast reported
sale price of one HoT Common Sharea share of common stock on the NasdaqNASDAQ National Market System was
$15.125.
RISK FACTORS
YOU$11.59.
INVESTING IN THE COMMON STOCK INVOLVES RISKS. POTENTIAL INVESTORS
SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 2 IN1 OF THIS
PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACYDETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR ACCURACY OF THIS PROSPECTUS.COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES, SHARES, OR
STOCK OTHER THAN THE SHARES TO WHICH IT RELATES, NOR IS IT A SOLICITATIONThe date of this prospectus is _________, 2002.
TABLE OF AN
OFFER TO BUY ANY SECURITIES, SHARES, OR STOCK OTHER THAN THE SHARES TO WHICH IT
RELATES. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO
BUY SECURITIES IN ANY CIRCUMSTANCES IN WHICH AN OFFER OR SOLICITATION IS
UNLAWFUL.
THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE UNDER THIS PROSPECTUS SHALL
NOT, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT HOT IS OPERATING UNDER
THE SAME CONDITIONS THAT IT WAS OPERATING UNDER WHEN THIS PROSPECTUS WAS
WRITTEN. YOU CANNOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
CORRECT AT ANY TIME, EXCEPT FOR ON THE DATE OF THIS PROSPECTUS. DO NOT ASSUME
THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AT ANY TIME PAST
THE DATE LISTED.CONTENTS
PAGE
ABOUT HELEN OF TROY LIMITED......................................................................................1
THE OFFERING.....................................................................................................1
RISK FACTORS.....................................................................................................1
USE OF PROCEEDS..................................................................................................3
PLAN OF DISTRIBUTION.............................................................................................3
SELLING SECURITY HOLDERS.........................................................................................4
LEGAL MATTERS....................................................................................................5
EXPERTS..........................................................................................................5
SELECTED FINANCIAL DATA..........................................................................................5
INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS...............................................................5
INCORPORATION OF DOCUMENTS BY REFERENCE..........................................................................6
WHERE YOU CAN FIND MORE INFORMATION..............................................................................7
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE
HAVE REFERRED YOU TO. WE HAVEPROSPECTUS. HELEN OF
TROY LIMITED HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS DIFFERENT.
The date of this prospectus is November ____, 1998.
2
3
SUMMARYNOT AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK IN ANY JURISDICTION WHERE IT
IS UNLAWFUL. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE COMPANY ANDDATE OF THIS OFFERINGPROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS OR OF ANY SALE OF COMMON STOCK.
-i-
ABOUT HELEN OF TROY LIMITED
Unless the context requires otherwise, references to "the Company," to
"our Company" or to "Helen of Troy" and references such as "we" and "us" refer
to Helen of Troy Limited and its subsidiaries, including Tactica International,
Inc. ("HoT" orTactica"). Our Company is comprised of three operating segments. The
North American segment sells hair care and other personal care and comfort
appliances, hairbrushes, combs and utility and decorative hair accessories in
the "Company") primarily engages in
designing, manufacturingU.S. and distributingCanada. The International segment sells hair care and other
personal care and comfort appliances, hairbrushes, combs and utility and
decorative hair accessories outside of the U.S. and Canada. Our third segment,
Tactica, sells personal care and other consumer products directly to consumers
through direct response marketing and to retailers.
We design, develop and sell a wide variety of personal care appliances and hair care accessories.comfort
products under trademarks licensed from third parties, as well as under
trademarks that we own. We selloutsource the manufacture of our products to retailthird
parties and sell most of those products to mass merchandisers, drug chains,
warehouse clubs, grocery stores,
distributors, and professional beauty supply customers. Most of our customers
areretailers and wholesalers, and
directly to consumers in the United States, CanadaU.S. and Europe, although we also have some
customersother countries.
Products bearing licensed trademarks include those sold under the
trademarks of VS Sassoon(R), licensed from The Procter & Gamble Company;
Revlon(R), licensed from Revlon Consumer Products Corporation; Dr. Scholl's(R),
licensed from Schering-Plough HealthCare Products, Inc.; Scholl(R) (in areas
other than North America), licensed from Scholl Limited; and distributionSunbeam(R),
licensed from Sunbeam Products, Inc. Trademarks owned by the Company include
Helen of Troy(R), Salon Edition(R), Hot Tools(R), Ecstasy(TM), Gold Series(R),
Hotspa(R), Gallery Series(R), Wigo(R), Caruso(TM), Dazey(R), Lady Dazey(R),
Carel(R), Lady Carel(R), Sable(R), Karina(R), Karina Girl(TM), Kurl*Mi(R),
Detangle*Mi(R), Heat*Mi(R), DCNL(TM), DCNL Signature(TM), IGIA(R) and
Epil-Stop(R).
We were incorporated as Helen of Troy Corporation in Latin AmericaTexas in 1968 and
the Far East.reincorporated as Helen of Troy Limited in Bermuda in 1994. Our principal
executive offices are located at 6827 Market Avenue, El Paso, Texas, 79915. The
phoneClarendon House, Church Street, Hamilton,
Bermuda. Our telephone number in the United States is (915) 779-6363.225-8000.
THE OFFERING
This prospectus relates to 800,000 shares of common stock of Helen of
Troy that may be offered by the selling security holders. In a recent transaction, we acquired DCNL, Inc., a California
corporation ("DCNL"), engagedAugust 2002, one of
our shareholders sold 800,000 shares of common stock to certain accredited
investors in a similar business to ours. We paid for DCNLprivate placement transaction. As part of those transactions, we
entered into registration rights agreements with $1,875,000 in cash and by issuing 350,000 HoT Common Shares and Contingent
Value Rights ("CVRs")the investors with respect to
the DCNL shareholders. Each DCNL shareholder received
one CVR for each share of HoT Common Shares received. HoT reserved 350,000 HoT
Common Shares which might be issued inpurchased shares. We are registering the future under the CVRs. A descriptioncommon stock covered by this
prospectus to fulfill our contractual obligations with respect to these
registration rights. Registration of the CVRs is contained incommon stock does not necessarily mean
that all or any portion of such shares will be offered for sale by the section called "Selling Security Holders." HoT
also reserved an additional 230,000 HoT Common Shares, which might be issued in
the future to the DCNL shareholders under a contingent purchase price
arrangement (the "Earnout"). Under the Earnout, the DCNL shareholders will
receive more HoT Common Shares at a certain period of time if certain sales
projections are met. The specific sales projections are discussed below in the
section called "Selling Security Holders." The actual number of HoT Common
Shares which might be issued under the CVRs and the Earnout may be
substantially less than the 580,000 HoT Common Shares reserved for issuance
under the CVRs and the Earnout.
This transaction wasselling
security holders.
We have agreed to in an Agreement, dated asbear the expenses of October
16, 1998 (the "Agreement"). The Agreement was signed by the following parties:
HoT, DCNL, DCNL Merger Corp. (a Texas corporationregistration of the common
stock under federal and wholly-owned subsidiarystate securities laws, but we will not receive any
proceeds from the sale of HoT), and the DCNL shareholders (the "sellers" or the "selling
shareholders"). The HoT Common Shares issued in that transaction and the HoT
Common Shares issuable pursuant to the CVRs and the Earnout are the HoT Common
Shares beingcommon stock offered under this prospectus.
RISK FACTORS
Competition.INVESTING IN OUR COMMON STOCK IS VERY RISKY. YOU SHOULD BE ABLE TO BEAR
A COMPLETE LOSS OF YOUR INVESTMENT. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING
FACTORS IN ADDITION TO OTHER INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS
OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS FROM OUR OTHER FILINGS WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). IF ANY OF THESE RISKS
ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COULD SUFFER.
OUR INDUSTRY IS EXTREMELY COMPETITIVE. WE MAY NOT BE ABLE TO DEVELOP
AND COMPETITIVELY MARKET PRODUCTS THAT APPEAL TO CONSUMERS. The sale of personal care
appliances and hair care
accessoriescomfort products industry is characterized by intense competition. Competition is basedextremely competitive. Maintaining and gaining
market share depends heavily upon product features,price, quality, and price. It is also based uponbrand name recognition,
patents, innovation in the design of new products and replacement models and
in marketing and distribution approaches. The Company believesWe compete with domestic and
international companies, some of which have substantially greater financial and
other resources than those of the Company. We believe that its future success will
depend upon itsour ability to develop and
produce reliable products whichthat incorporate developments in technology and whichto
satisfy consumers'consumer tastes inwith respect to style and design, and on itsas well as our ability
to market itsa broad
1
offering of products in each applicable category at competitive prices. We encounter significant competition from many domestic and
international companies with substantially greater financial resources. Our
competitors include Conair Corporation, Windmere-Durable Holdings, Inc., Goody
Products Inc., a division of Newell Company, and L and N Marketing and Sales
Corporation. We cannot assure youprices, are keys
to our future success. No assurance can be given that we will be able to
successfully compete withon the basis of these or other companiesfactors in the future.
Foreign Operations. We primarily manufacture our products in the
People's Republic of China, Thailand, Taiwan, and South Korea (the "Far East
countries").WE ARE MATERIALLY DEPENDENT ON OUR LICENSED TRADEMARKS AS A small percentageSUBSTANTIAL
PORTION OF OUR SALES REVENUE COMES FROM SELLING PRODUCTS UNDER LICENSED
TRADEMARKS. A substantial portion of our products are purchased in other
countries, including the United States and Mexico. Our manufacturing operations
use molds and other tools owned by the Company's wholly-owned subsidiary, Helen
of Troy Limited, a Barbados corporation. The Company purchases goodssales revenue is derived from its
subsidiary, which contracts with unrelated factories. A portion of the
subsidiary's assets, including equipment and molds, are located in the Far East
countries.
Because of the location of these manufacturing processes, the supply
and cost of our products can be affected by several factors. These factors
include, among other things, trade barriers, increased import duties,
imposition of tariffs, imposition of import quotas, currency exchange
fluctuations, interruption of sea or air transportation, and economic and
political unrest. So far, political changes in the Far East countries have not
affected the Company's ability to obtain its products. Also, the Company
believes that facilities in other countries are adequate to produce what it
needs. However, the relocation of production and our operations, should it
become necessary, could result in product shipment delays and increased
production costs. Delays or increased production costs could adversely affect
the profitability of the Company.
3
4
Reliance upon certain customers. The Company's sales of
its products to its largest customers represent a large percentage of its total net sales.
In the fiscal years ended February 28, 1997 and 1998, the sales to the
Company's largest customer and its affiliates was 27% and 29%, respectively, of
total sales during such fiscal year. Further, in the fiscal year ended February
28, 1996, net sales to three customers comprised 29%, 10%, and 10% of total net
sales, respectively. Although we enjoy long-established relationships with our
largest customers, we do not have long-term supply contracts with any of them.
A decrease in, or loss of, business from any of our major customers could
detrimentally affect both our operations and our financial condition.
Retail industry. Retail sales depend, in part, on general economic
conditions. A significant decline in economic conditions could negatively
impact the sales that our retail customers will be able to make. If this
occurs, then our sales and profitability will suffer also. In addition, as a
result of many retailers' desire to more closely manage inventory levels, many
retailers make purchases on a "just-in-time" basis. This concept requires us to
shorten our "lead time" for production (the period of time between
manufacturing a product and actually delivering it to the customer).under licensed trademarks. As a result, we must more closely anticipate demand soare materially dependent
upon the continued use of such trademarks, particularly the VS Sassoon(R) and
Revlon(R) trademarks. Actions taken by licensors and other third parties could
diminish greatly the value of any of our licensed trademarks. If we were unable
to sell products under these licensed trademarks the effect on our business,
financial condition and results of operations could be both negative and
material.
WE COULD BE MATERIALLY ADVERSELY EFFECTED BY SIGNIFICANT CHANGES IN THE
TAX LAWS. Currently, we benefit from an international corporate structure that
our products will be
ready when the customer orders them. This may require usresults in relatively low tax rates on a consolidated basis. If we were to
carry additional
inventories, which may increase the cost of overhead and insurance. Carrying
extra inventories also means money is tied upencounter significant changes in the cost of carrying those
inventories which increases interest expense. In addition, if there is a
general downturn in economic conditions, the Company may be required to sell
inventories at a price less than its normal selling price to reduce its
exposure to the large inventories requiredrates or rules imposed by our customers. Thiscertain key
taxing jurisdictions, such changes could result
in losses for the Company.
Seasonality of business. Our business is generally seasonal.
Historically, we experience higher revenues in the second and third quarters
(June through November) of each fiscal year, when a disproportionate number of
our sales occur. These higher revenues generally increase the gross profit and
the net earnings of the Company during those same months. By the same token, we
experience lower revenues during the first and fourth fiscal quarters (December
through May), and this usually decreases gross profit and net earnings in those
months. We believe that this "seasonality" will continue.
The increased demand from June to November primarily derives from
"back to school" sales in the late summer, and from Christmas sales in the
autumn. Because we anticipate a higher number of sales in these months, we
purchase substantial amounts of inventory to satisfy anticipated customer
demand. If for any reason our sales are below what we normally expect to sell
during these months, our revenues, gross profit, and net earnings would be
adversely affected for the entire year. (Please note the section on the "Retail
Industry" above, and especially its discussion of a general downturn in
economic conditions). Also, as a result of having to carry additional
inventory, we have less available capital on hand in those periods. This
capital might otherwise have been invested. This results in reduced interest
income.
Risks attendant to our acquisition strategy. We regularly consider the
acquisition of other companies engaged in the design, manufacture and
distribution of personal care appliances and hair care accessories, and related
products. At any given time, we may be in various stages of considering such
opportunities. We cannot assure you that we will be able to find and identify
desirable acquisition targets. Nor can we assure you that we will be successful
in entering into a definitive agreement with any one target. Also, even if a
definitive agreement is reached, there is no assurance that any future
acquisition will be completed.
We typically anticipate that any acquisitions will bring certain
benefits to the Company, such as an increase in sales. However, it is difficult
to determine if such benefits can actually be realized prior to completing an
acquisition. Accordingly, there is a risk that any acquired company may not
achieve an increase in sales or other benefits for the Company. There may be
additional costs and other expenses which were not anticipated at the time of
the acquisition. Any of these events could result in a material adverse effect on the
Company's business operationsfinancial position and financial performance.
The process of integrating acquired companies into our existing
business may also resultprofitability. In 1994, we engaged in unforeseen difficulties. Unforeseen operating
difficulties may absorb significant amounts of management attention which might
otherwise be devoted to our existing business. Also, the process may require
significant financial resourcesa
corporate restructuring that, would otherwise be available foramong other activities, including the ongoing development or expansionthings, resulted in a greater portion
of our existing
operations. Finally, future acquisitionsincome not being subject to taxation in the U.S. If such income were
subject to U.S. federal income taxes, our effective income tax rate would
increase materially. Several bills have been introduced recently in the U.S.
Congress that, if enacted into law, could resultadversely affect our U.S. federal
income tax status. At least one of the bills introduced would apply to companies
such as ours that restructured several years ago. That bill could, if enacted
into law, subject a greater portion of our income to U.S. income taxes, thereby
reducing our net income. Other bills introduced recently would exempt
restructuring transactions, such as ours, that were completed before certain
dates in 2001 and 2002, but would limit the deductibility of payments made in
certain intercompany transactions for U.S. income tax purposes and would subject
gains on certain asset transfers to U.S. income tax. In addition to the
legislation introduced in Congress, the U.S. Treasury Department recently
published a study of restructurings such as ours. It is not currently possible
to predict whether the legislation that has been introduced will become law,
whether any additional bills will be introduced or the consequences of the U.S.
Treasury Department's study. However, there is a risk that new laws in the U.S.
could eliminate or substantially reduce the current income tax benefits of our
havingcorporate structure. If this were to incur
additional debt and/or contingent liabilities. All of these possibilities mightoccur, such changes could have a material
adverse effect on our financial condition and results of operations. In addition
to potential changes in tax laws, the Company's position on various tax matters
may be challenged. Our ability to maintain our position that the parent company
is not a Controlled Foreign Corporation (as defined under the U.S. Internal
Revenue Code) is critical to the tax treatment of our non-U.S. earnings. A
Controlled Foreign Corporation is a non-U.S. corporation whose largest U.S.
shareholders (i.e., those owning 10% or more of its stock) together own more
than 50% of the stock in such corporation. If a change of ownership of the
Company were to occur such that the parent company became a Controlled Foreign
Corporation, such a change could have a material negative effect on the largest
U.S. shareholders and, in turn, on the Company's business.
THE HONG KONG INLAND REVENUE DEPARTMENT HAS CHALLENGED OUR POSITION ON
CERTAIN PROFITS AND ASSESSED TAXES ON SUCH PROFITS. WE HAVE SETTLED CERTAIN OF
THE CHALLENGES; HOWEVER, CERTAIN AMOUNTS ARE STILL OUTSTANDING AND WE MAY HAVE
TO PAY FURTHER AMOUNTS IN THE FUTURE. The Hong Kong Inland Revenue Department
("the IRD") assessed $11,033,000 in tax on certain profits of our foreign
subsidiaries for the fiscal years 1990 through 1997. Hong Kong taxes income
earned from certain activities conducted in Hong Kong. We are vigorously
defending our position that we conducted the activities that produced the
profits in question outside of Hong Kong. The Company also asserts that it has
complied with all applicable reporting and tax payment obligations. In
connection with the IRD's tax assessment for the fiscal years 1990 through 1997,
we were required to purchase $5,750,000 (U.S.) in tax reserve certificates in
Hong Kong, which represented approximately 52% of the liability assessed by the
IRD. Tax reserve certificates represent the prepayment by a taxpayer of
potential tax liabilities. The amounts paid for tax reserve certificates are
refundable in the event that the value of the tax reserve certificates exceeds
the related tax liability. These certificates are denominated in Hong Kong
dollars and are subject to the risks associated with foreign currency
fluctuations.
The Company and the IRD agreed on a settlement for fiscal years 1990
through 1994. The assessment for that period was $4,468,000. The Company and the
IRD agreed to settle the amount for $2,505,000 (56% of the assessed amount),
plus interest of approximately $100,000. Because we were able to apply certain
of the tax reserve certificates discussed above to amounts due under the
proposed settlement, the Company paid the IRD approximately $37,000 of
additional cash, plus interest to settle the issues raised by the IRD for fiscal
1990 through 1994. The settlement of the IRD's assessments for fiscal 1990
through 1994 did not affect the status of the IRD's assessments for fiscal years
1995 through 1997. If the IRD's position were to prevail and if it were to
assert the same position for years after fiscal 1997, the resulting assessment
could total $28,015,000 (U.S.) for the period from fiscal 1995 through fiscal
2002. Although the ultimate resolution of the IRD's claims cannot be predicted
with certainty, we believe that adequate provision has been made in the
financial statements for the resolution of the IRD's assessments for the fiscal
years 1990 through 1997 and potential future assessments relating to activity
since fiscal 1997.
WE ARE DEPENDENT ON THIRD PARTY MANUFACTURERS, MOST OF WHICH ARE IN THE
FAR EAST. All of our products are manufactured by unaffiliated companies, most
of which are in the Far East. Risks associated with such foreign manufacturing
include: changing international political relations; changes in laws, including
tax laws, regulations and treaties; changes in labor laws, regulations, and
policies; changes in customs duties and other trade barriers; changes in
shipping costs; currency exchange fluctuations; local political unrest; and the
availability and cost of raw materials and merchandise. To date, these factors
have not significantly affected our production in the Far East. However, any
change that impairs our ability to obtain products from such manufacturers, or
to obtain products at marketable rates, could have a material negative effect on
our business, financial condition and results of operations.
4
5
Dependence on key employees. Our operations require managerial and
operational expertise. We cannot assure you that anyOUR BUSINESS WILL SUFFER IF WE DO NOT ACCURATELY FORECAST OUR
CUSTOMER'S DEMANDS. Because of our key employees will
remain employedreliance on manufacturers in the Far East,
our production lead times are relatively long. Therefore, we must commit to
production in advance of customer orders. If we fail to forecast customer or
consumer demand accurately we may encounter difficulties in filling customer
orders or in liquidating excess inventories, or may find that customers are
canceling orders or returning products. Distribution difficulties may have an
adverse effect on our business by increasing the Company. The lossamount of a key employee or key employeesinventory and the
cost of storing inventory. Additionally, changes in retailer inventory
management strategies could make inventory management more difficult. Any of
these results could have a material adverse effect on our business, financial
condition and results of operations.
Quarterly Earnings Fluctuations. As isOUR FUTURE ACQUISITIONS, IF ANY, AND NEW PRODUCTS MAY NOT BE
SUCCESSFUL. We may decide to grow our business through the acquisition of new
product lines and businesses. The acquisition of a business or of the rights to
market specific products or use specific product names involves a financial
commitment. In the case of an
2
acquisition such commitments are usually in the form of either cash or stock
consideration. In the case of a new license, such commitments could take the
form of license fees, prepaid royalties and future minimum royalty and
advertising payments. While our strategy is to acquire businesses and to develop
products that will contribute positively to earnings, there is no guarantee of
such results. Anticipated synergies may not materialize, cost savings may be
less than expected, sales of products may not meet expectations and acquired
businesses may carry unexpected liabilities. Each of these factors could result
in a newly acquired business or product line having a material negative impact
on financial condition and results of operations.
A FEW CUSTOMERS ACCOUNT FOR A SUBSTANTIAL PERCENTAGE OF OUR SALES. We
are dependent on certain principal customers. Wal-Mart Stores, Inc., and one of
its affiliates, accounted for approximately 22% of the Company's net sales in
fiscal 2002. Our top three customers accounted for approximately 35% of fiscal
2002 net sales. Although we have long-standing relationships with many companiesour major
customers, no contracts require these customers to buy from us. A substantial
decrease in sales to any of our major customers could have a material adverse
effect on our financial condition and results of operations.
THE SALES OF OUR TACTICA PRODUCTS MAY BE SUBJECT TO VOLATILITY.
Tactica's net sales grew substantially in fiscal 2002 from fiscal 2001,
comprising 24% and 5%, respectively, of the Company's consolidated net sales
during such periods. In addition, the increase in Tactica's sales in fiscal 2002
accounted for 94% of the increase in our industry,consolidated sales during this period.
Tactica's sales in fiscal 2002 were comprised heavily of the Epil-Stop(R)
product line, which has an unproven product life cycle. Tactica also sells other
products that have short life cycles. Furthermore, Tactica relies on television
infomercials and direct response marketing campaigns for the marketing of its
products. Accordingly, Tactica's sales may be more volatile than the business of
our other two segments. The results of our business could be adversely affected
by decreases in sales of Tactica products.
ONE OF OUR SUBSIDIARIES IS SUBJECT TO A STOCKHOLDERS' AGREEMENT. One of
our subsidiaries is a party to a stockholders' agreement with the former owners
of Tactica, who retained a 45% interest in Tactica (collectively the "other
Tactica stockholders"). Under the terms of the stockholders' agreement, we have
been granted the right to initiate a process whereby we can purchase, and the
other Tactica stockholders are required to sell, the shares they own. In
addition, the other Tactica stockholders have the right to initiate a process
regarding the sale of their remaining interest in Tactica. We may elect at our
option not to purchase the shares owned by the other Tactica stockholders and
under the terms of the stockholders' agreement the parties will then be required
to initiate a procedure under which the entire business of Tactica would be
offered for sale to third parties. In either case, the purchase price will be
based upon fair market value as determined by independent appraisal. A sale to a
third party would be subject to the approval of the other Tactica stockholders
and us. In the event that either party exercises its rights under the
stockholders' agreement, our financial position and profitability could be
adversely affected.
U.S. AND WORLDWIDE ECONOMIC CONDITIONS AFFECT OUR FINANCIAL CONDITION.
Adverse changes in economic conditions that affect consumer spending or
worldwide economic conditions could have a material negative effect on the
Company's operating results are affected by the seasonal
nature of the industry. (Please note the section on "Seasonality" above.)
Accordingly, the Company's operating results may fluctuate from quarter to
quarter.
Possible Volatility of Stock Price. The market price for shares of our
stock has varied significantlyfinancial condition and may be volatile depending on news
announcements and changes in general market conditions. In particular, news
announcements regarding quarterly or annual results of operations, or news
announcements regarding competitive developments impacting the Company, may
cause significant fluctuations in the market price of our stock.operations.
USE OF PROCEEDS
YouWe will find this information onnot receive any proceeds from the cover pagesale of the common stock
offered by this prospectus.
DETERMINATIONPLAN OF OFFERING PRICE
You will find this information onDISTRIBUTION
We are registering the cover page of this prospectus.
SELLING SECURITY HOLDERS
A total of 350,000 HoT Common Shares were delivered to the DCNL
shareholders in the acquisition. In addition, one CVR was delivered for each
HoT Common Share delivered. At the same time that the Agreement was signed,
however, the same parties to that agreement, joined by another party, Chase
Bank of Texas, N.A., signed an Escrow Agreement dated as of October 16, 1998.
Under the Escrow Agreement, 50,000 HoT Common Shares issued to the selling
shareholders under the Agreement were delivered to the escrow agent, Chase Bank
of Texas, N.A. The same number of CVRs were also issued to the selling
shareholders and delivered to the escrow agent. HoT may use the escrowed shares
and CVRs to satisfy our indemnification claims if there is a breach of certain
representations and warranties made in the Agreement.
A CVR entitles the holder to obtain additional HoT Common Shares. Each
CVR entitles the holder to obtain HoT Common Shares equal to the product of (i)
one, times (ii) a fraction, the numerator of which is $20 minus the average of
closing price of a HoT Common Share for the five consecutive trading days prior
to October 16, 1999 (the "Current Market Value"), and the denominator of which
is the Current Market Value. The purpose of the CVRs is to give the DCNL
shareholders protection against the HoT Common Share price being less than $20.
With the exception of the CVRs held in escrow, the CVRs can generally be
redeemed by HoT prior to October 16, 1999, and the CVRs automatically terminate
in the event the average price of a HoT Common Share for 5 consecutive trading
days equals or exceeds $20.
The Agreement reserves 230,000 HoT Common Shares which might be issued
in the future to the DCNL shareholders under an Earnout. Under the Earnout, the
DCNL shareholders will receive more HoT Common Shares if the following sales
projections are met: the Earnout will be paid in two installments, the first in
the amount of up to 30,000 HoT Common Shares if HoT's net sales of DCNL
products for the three month period ending January 31, 1999 are at least
$4,000,000, and the second in the amount of up to 200,000 HoT Common Shares if
HoT's net sales of DCNL products for the year ending December 31, 1999 are at
least $18,000,000.
In the Agreement, we also agreed to register the HoT Common Shares
issued to the selling shareholders, and to use our best efforts to keep the
registration statement effective until the earliest of:
5
6
(1) twenty-four months; or
(2) until the HoT Common Shares are no longer considered "restricted
stock" within the meaning of Rule 144 of the Securities Act of 1933
(the "Securities Act") and any restrictive legend can be removed; or
(3) until all the HoT Common Shares have been resold by the sellers
pursuant to Rule 144 of the Securities Act, or pursuant to an
effective registration statement.
The following list of selling shareholders includes the four shareholders that
received HoT Common Shares through the DCNL merger. The HoT Common Shares
listed below represent all of the HoT Common Shares that each selling
shareholder currently owns, or which each selling shareholder may own, either:
(1) upon the release of the HoT Common Shares from escrow or (2) pursuant to
the CVRs or (3) issued pursuant to an Earnout provision in the Agreement:
- ------------------------------------------------------------------------------------------------------------------
SELLING SHAREHOLDER SHARES OWNED PRIOR TO SHARES BEING OFFERED SHARES OWNED AFTER
OFFERING (1) OFFERING
==================================================================================================================
Darryl R. Cohen 454,334(2)(3) 454,334 0
- ------------------------------------------------------------------------------------------------------------------
Nini Cohen 227,166(2)(3) 227,166 0
- ------------------------------------------------------------------------------------------------------------------
Lisa Dake Brown 148,800(2)(3) 148,800 0
- ------------------------------------------------------------------------------------------------------------------
Dennis L. Bergquist 99,700(2)(3) 99,700 0
- ------------------------------------------------------------------------------------------------------------------
(1) Assumes that all of the HoT Common Shares held by the selling shareholders
and being offered under this prospectus are sold, and that the selling
shareholders acquire no additional shares of HoT Common Shares before the
completion of this offering. Each selling shareholder owns less than 1% of the
total number of HoT Common Shares outstanding.
(2) 50,000 HoT Common Shares and 50,000 CVRs are being held in escrow under an
Escrow Agreement dated as of October 16, 1998, which may be used to indemnify
HoT against certain claims relating to the merger. The selling shareholders,
and the number of HoT Common Shares and CVRs held in escrowcommon stock on behalf of each,
are as follows:
HoT
Selling Shareholder Common Shares CVRs
------------------- ------------- ----
Darryl R. Cohen 25,000 25,000
Nini Cohen 12,500 12,500
Lisa Dake Brown 8,000 8,000
Dennis L. Bergquist 4,500 4,500
------ ------
50,000 50,000
====== ======
(3)the selling
security holders. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at prices related to the prevailing market prices, at varying prices determined
at the time of sale or at negotiated prices. These amounts include up to 580,000 HoT Common Shares that mightsales may be issued
in the future under the CVRs and the Earnout. The selling shareholders, and the
amount of HoT Common Shares which might be issued in the future, are as
follows:
HoT
Selling Shareholder Common Shares
------------------- -------------
Darryl R. Cohen 284,667
Nini Cohen 142,333
Lisa Dake Brown 92,800
Dennis L. Bergquist 60,200
-------
580,000
=======
6
7
PLAN OF DISTRIBUTION
The selling shareholders may offer their HoT Common Shareseffected at
various times in one or more of the following transactions, or in other kinds of
transactions:
Oo transactions on the NASDAQ National Market System or on any
national securities exchange or U.S. inter-dealer system of the United Statesa
registered national securities exchanges whereassociation on which our HoT
Common Shares are listed, including the Nasdaq National Market,
or any other exchange where our HoT Common Sharescommon
stock may be listed inor quoted at the future;
Otime of sale;
o in the over-the-counter market;
O3
o in private transactions otherand transactions otherwise than on
suchthese exchanges or systems or in the over-the-counter market;
Oo in connection with short sales of the HoT Common Shares;
Ocommon stock;
o by pledge to secure debtsor in payment of debt and other
obligations;
Oo through the writing of options, whether the options are listed
on an options exchange or otherwise;
o in connection with the writing of non-traded and
exchange-traded call options, in hedge transactions and in
settlement of other transactions in standardized or
over-the-counter options; or
O ino through a combination of any of the above transactions.
The selling shareholderssecurity holders and their successors, including their
transferees, pledgees or donees or their successors, may sell their HoT Common Shares at market
prices prevailing at the timeshares of
sale, at prices relatedcommon stock directly to such prevailing
market prices, at negotiated pricespurchasers or at fixed prices.
The selling shareholdersthrough underwriters, broker-dealers or
agents, who may use broker-dealers to sell their HoT
Common Shares. If this happens, broker-dealers will either receive compensation in the form of discounts, concessions or
commissions from the selling shareholders,security holders or theythe purchasers. These
discounts, concessions or commissions as to any particular underwriter,
broker-dealer or agent may be in excess of those customary in the types of
transactions involved.
In addition, any securities covered by this prospectus which qualify
for sale pursuant to Rule 144 of the Securities Act of 1933, as amended (the
"Securities Act"), may be sold under Rule 144 rather than pursuant to this
prospectus.
We entered into registration rights agreements for the benefit of the
selling security holders to register our common stock under applicable federal
and state securities laws. The registration rights agreements provide for cross-
indemnification of the selling security holders and us and our respective
directors, officers and controlling persons against specific liabilities in
connection with the offer and sale of the common stock, including liabilities
under the Securities Act. We will receive commissions
from purchasers of HoT Common Shares for whom they acted as agents.
This offering is the effect of a plan of acquisition, under which HoT
acquiredpay substantially all of the outstandingexpenses incurred
by the selling security holders incident to the offering and sale of the common
stock.
SELLING SECURITY HOLDERS
In August 2002, one of our shareholders sold 800,000 shares of DCNL. The general effectcommon
stock to certain accredited investors in a private placement transaction. As
part of this
acquisition is that DCNL became a wholly-owned subsidiary of HoT on October 16,
1998, pursuantthose transactions, we entered into registration rights agreements with
the investors with respect to the Agreement outlined above. Upon approvalpurchased shares of a listingcommon stock. We are
registering the shares of common stock covered by this prospectus to fulfill our
contractual obligations with respect to these registration rights.
The following table provides information with respect to the shares of
common stock beneficially owned by the Nasdaq National Market,selling security holders. The information
regarding common stock owned after the HoT Common Shares will beoffering assumes the sale of all shares
of common stock offered on that
exchange, underby the symbol "HELE."
The selling shareholders and any brokers and dealers who sell the HoT
Common Shares may be deemed to be "underwriters" within the meaning of the
Securities Act. The commissions, discounts, or other compensation paid to such
persons may be regarded as underwriters' compensation. Also, certainsecurity holders. None of the selling
shareholders are trustssecurity holders has held a position or custodianships. These entities may inoffice or had a material relationship
with us or any of our affiliates within the future distribute their HoT Common Shares to their beneficiaries. These shares
may later be distributed, sold, pledged, hypothecated or otherwise transferred.
To comply with the securities laws of certain jurisdictions, the
securities offered in this prospectus will be offered or sold in those
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the securities offered in this prospectus
may not be offered or sold unless they have been registered or qualified for
sale in those jurisdictions, or unless an exemption from registration or
qualification is available and is complied with. The rights under this
Registration Statement and prospectus are assignable to the distributees,
pledgees orpast three years other transfereesthan as a
result of the selling shareholders.
7ownership of our common stock.
COMMON STOCK OWNED
AFTER COMPLETION
COMMON STOCK COMMON OF OFFERING(1)
BENEFICIALLY STOCK -------------------------
NAME OWNED OFFERED NUMBER PERCENTAGE
---- ------------ ------- ------ ----------
Acqua Wellington Private Placement Fund, Ltd. 200,000 200,000 0 0%
Acqua Wellington Opportunity I Limited 600,000 600,000 0 0%
- ----------
(1) Assumes all of the shares of common stock are sold.
4
8
LEGAL MATTERS
The validity of the issuance of the HoT Common Shares offered in this
prospectuscommon stock will be passed upon for the selling shareholdersus by Conyers
Dill & Pearman, Bermuda counsel to HoT.Helen of Troy.
EXPERTS
TheKPMG LLP, independent auditors, are our auditors. They audited the
consolidated financial statements and schedule of Helen of Troy
Limited as of February 28, 1998 and 1997, andthe financial statement schedules that we
included in our Annual Report on Form 10-K for each of the years in the
three-year periodfiscal year ended February
28, 1998, have been incorporated by reference
herein2002, as described in their report dated May 3, 2002. The Annual Report on
Form 10-K for the fiscal year ended February 28, 2002, includes these reports.
We incorporate these financial statements, schedules and in the registration statementreports into this
prospectus in reliance upon the report ofon KPMG Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon theLLP's authority of said firm as experts in accounting and
auditing.
MATERIAL CHANGES
We knowSELECTED FINANCIAL DATA
Below is summarized financial information comparing previously reported
net income for the three years ended February 28, 2002 as though the provisions
of no material changesSFAS 142 had been applied as of March 1, 1999 (amounts in thousands, except
per share data):
Year Ended the last day of February
----------------------------------------------
2002 2001 2000
------------ ------------ ------------
Reported net income $ 29,215 $ 17,332 $ 13,111
Goodwill amortization 2,034 2,026 1,948
------------ ------------ ------------
Adjusted net income $ 31,249 $ 19,358 $ 15,059
============ ============ ============
Basic earnings per share of common stock
Reported net income $ 1.04 $ .61 $ .45
Goodwill amortization .07 .07 .07
------------ ------------ ------------
Adjusted basic earnings per share of common
stock $ 1.11 $ .68 $ .52
============ ============ ============
Diluted earnings per share of common stock
Reported net income $ 1.00 $ .60 $ .44
Goodwill amortization .07 .07 .06
------------ ------------ ------------
Adjusted diluted earnings per share of
common stock $ 1.07 $ .67 $ .50
============ ============ ============
INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS
Certain written and oral statements made by us or with the approval of
one of our affairs that have occurred sinceauthorized executive officers may constitute "forward-looking
statements" as defined under the endPrivate Securities Litigation Reform Act of
the latest fiscal year, except for any changes included in the
documents that are incorporated by reference1995. This includes statements made in this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
HoT is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Thus, we file annual,
quarterly and special reports, proxy statements andregistration statement, in other
information with the
Securities and Exchange Commission (the "SEC"). You may read, inspect, and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C., 20549, or in the public reference rooms located in New
York, N.Y. and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from the SEC's Website at "http://www.sec.gov". Copies
of our filings may also be obtained at prescribed rates upon request from the
Public Reference Section of the Commission at 450 Fifth Street, NW, Washington,
D.C. 20549. The HoT Common Shares are listed on the Nasdaq National Market, and
such reports, proxy statements and other information can also be inspected at
the offices of the NASDAQ National Market, Inc., Reports Section, 1735 K Street
N.W., Washington, D. C. 20006.
HoT has filed with the SEC, in press releases and in certain other oral and written
presentations. Generally, the words "anticipates," "believes," "expects" and
other similar words identify forward-looking statements. All statements that
address operating results, events or developments that we expect or anticipate
will 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. We caution readers not to
place undue reliance on forward-looking statements. Forward-looking statements
are subject to risks that could cause such statements to differ materially from
actual results. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a registration statementresult of new information, future
events or otherwise.
5
Factors that could cause actual results to differ from those
anticipated include the following, among others:
o general industry conditions and competition;
o credit risks;
o our, or our operating segments', material reliance on
Form S-3 underindividual customers or small numbers of customers;
o our material reliance on certain trademarks;
o the Securities Act,impact of tax legislation, regulations or treaties,
including proposed legislation in the United States that would
affect companies or subsidiaries of companies that have
headquarters outside the United States and file U.S. income
tax returns;
o the impact of other current and future laws and regulations;
o the results of our disagreement with respect to these HoT Common Shares. This prospectus,
which constitutes a part of that registration statement, does not contain all
the information contained in that registration statement and its exhibits. For
further information with respect to HoT and the HoT Common Shares, you should
consult the registration statement and its exhibits. Statements contained in
this prospectusHong Kong Inland
Revenue Department concerning the provisionsportion of our profits that
might be subject to Hong Kong income tax;
o any documents are necessarily
summaries of those documents, and each statement is qualified in its entirety
by reference tofuture disagreements with the copyUnited States Internal
Revenue Service or other taxing authority regarding our
assessment of the document filedeffects or interpretation of existing tax
laws, regulations or treaties;
o risks associated with inventory, including potential
obsolescence;
o risks associated with new products and new product lines;
o risks associated with operating in foreign jurisdictions;
o foreign currency exchange losses;
o worldwide and domestic economic conditions;
o uninsured losses;
o reliance on computer systems;
o management's reliance on the representations of third parties;
o risks associated with new business ventures and acquisitions;
o risks associated with investments in equity securities; and
o the risks described from time to time in our filings with the
SEC.
The registration
statement and any of its amendments, including exhibits filed as a part of the
registration statement or an amendment to the registration statement, are
available for inspection and copying through the entities listed above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporateincorporate by reference"reference in this prospectus the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede the information in this information. Weprospectus. Accordingly, we incorporate by
reference the documentsinformation listed below as (a), (b), (c) and (d):
(a) The Company'sbelow:
o our Annual Report on Form 10-K for the fiscal year ended
February 28, 1998;
(b) The Company's2002;
6
o our Quarterly Report on Form 10-Q for the fiscal quarter ended May
31, 1998;
(c) The Company's Quarterly Report2002;
o our Proxy Statement filed with the SEC on Form 10-Q forJune 27, 2002;
o the fiscal quarter
ended August 31, 1998; and
8
9
(d) The Company's description of its HoT Common Shares,our common stock, which is contained in itsour
registration statement filed underwith the Exchange
ActSEC (Registration No.
0-23312), including any amendments or reports filed for the
purpose of updating such descriptions.
Each documentdescription; and
o the description of our preference share purchase rights, which
is contained in our Registration Statement on Form 8-A filed
afterwith the dateSEC on December 4, 1998, including any amendments or
reports filed for the purpose of this prospectus underupdating such description.
All reports and other documents we subsequently file pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act and beforeof 1934, as
amended, prior to the termination of thethis offering iswill also be incorporated by
reference into this prospectus and is made adeemed to be part of this prospectus from the
date of its filing. Any statement contained in
a document incorporated or deemed to be incorporated by reference in this
prospectus is deemed to be modified or superseded for purposesthe filing of this
prospectus, if this prospectus or another document incorporated or deemed to be
incorporated by reference in this prospectus modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this prospectus.
HoTreports and documents.
We will furnishprovide without charge upon written or oral request, to each person, including any beneficial
owner, to whom this prospectus is delivered, upon written or oral request, a
copy of any or all of the documents that are incorporated by reference into this prospectus exceptby
reference, but not delivered with the prospectus, other than exhibits to such
documents (unless theunless such exhibits are specifically incorporated by reference into
the documents that this prospectus incorporates. You should direct such documents). Such requests
should be directed toto:
Helen of Troy
Limited, 6827 Market Avenue,1 Helen of Troy Plaza
El Paso, Texas 79915. The phone number is79912
Attn: General Counsel
Telephone (915) 779-6363.
DISCLOSURE OF THE SEC'S POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification225-8000
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's Public Reference Room at 450 Fifth Street, N.W. Washington, D.C.,
20549. Please call the SEC at 1-800-SEC-0330 for liabilities arising underfurther information on the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the company pursuantPublic Reference Room. Our SEC filings are also available to the foregoing provisions,public at the
company has
been informed that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is therefore
unenforceable.
9SEC's web site at http://www.sec.gov.
7
10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTIONDISTRIBUTION.
The table belowfollowing sets forth the estimatedbest estimate of the Company as to its
anticipated expenses and costs expected to be paid
by HoTincurred in connection with the
issuance and distribution of the HoT Common
Shares covered by this Registration Statement. For information concerning
certain additional expenses that HoT and/orsecurities registered hereby (except for the
selling shareholders may be
required to pay in the event that there is an underwritten offering of the HoT
Common Shares, see "Plan of Distribution."SEC registration fee, all amounts are estimates):
SecuritiesSEC Registration Fee ....................... $ 857
Printing and Exchange Commission registration fee............................Engraving Expenses ............ 500
Legal Fees and Expenses .................... 5,000
Accounting Fees and Expenses ............... 2,500
Miscellaneous .............................. 500
----------
Total ...................................... $ 3,084
Legal fees and expenses (other than blue sky).................................. 10,000
Accounting fees and expenses................................................... 6,700
Nasdaq listing fee............................................................. 17,500
Miscellaneous.................................................................. 2,000
-----------
Total $.....................................................................$ 39,2849,357
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERSOFFICERS.
Section 98 of the Companies Act of 1981 of Bermuda (as amended, the "Act")
provides generally that a Bermuda company may indemnify its directors, officers
and auditors against any liability which by virtue of Bermudaany rule of law
otherwise would be
imposed on them in relation to the Company, except in cases where such liability
arises from the fraud or dishonesty of which such officer, director or auditor may
be guilty in relation to the Company. Section 98 further provides that a Bermuda
company may indemnify its directors, officers and auditors against any liability
incurred against them in defending any proceedings, whether civil or criminal,
in which judgment is awarded in their favor or they are acquitted or granted
relief by the Supreme Court of Bermuda in certain proceedings arising under
Section 281 of the Act.
The Company has adopted provisions in its Memorandum of Association and
Bye-Laws that provide that the Company shall indemnify its officers and
directors to the maximum extent permitted under the Act. The Company has also
entered into indemnity agreements with each of its directors and officers to
provide them with the maximum indemnification allowed under its Memorandum of
Association, Bye-Laws and the Act.
The Act also permits a company to purchase and maintain insurance for
the benefit of its officers and directors covering certain liabilities. The
Company intends to maintain a policy of officers' and directors' liability
insurance for the benefit of such persons.
We entered into registration rights agreements for the benefit of the
selling security holders to register our common stock under applicable federal
and state securities laws. The registration rights agreements provide for cross-
indemnification of the selling security holders and us and our respective
directors, officers and controlling persons against specific liabilities in
connection with the offer and sale of the common stock, including liabilities
under the Securities Act.
The preceding discussion of the Company's Memorandum of Association and
Bye-Laws, the Act, the indemnity agreements and the Indemnity Agreementsregistration rights
agreements is not intended to be exhaustive and is qualified in its entirety by
the Memorandum of Association, Bye-Laws, the Act, the indemnity agreements and
the Indemnity
Agreements.
10
11
EXHIBITS
The following are filed as exhibits to this Registration Statement:registration rights agreements.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.14.1 Memorandum of Association of the Company (incorporated herein
by reference to(filed as Exhibit 3.1 to the
Company's Registration Statement on Form S-4, File No.
33-73594, filed with the SEC on December 30, 1993
(Registration No. 33-73594))1993).
3.24.2 Bye-Laws of the Company (incorporated herein by reference to(filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-4, File No. 33-73594, filed with the SEC
on December 30, 1993 (Registration No.
33-73594))1993).
II-1
4.3 Rights Agreement, dated as of December 1, 1998, between Helen
of Troy Limited and Harris Trust and Savings Bank, as Rights
Agent (filed as Exhibit 7.4 to the Company's Current Report on
Form 8-K, filed with the SEC on December 4, 1998).
5.1 Form of Opinion of Conyers Dill & Pearman*Pearman.
23.1 Consent of Conyers Dill & Pearman*Pearman (See Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP*LLP.
24.1 Power of Attorney (included on the signature page of the
Registration Statement)*
- ----------------
* filed herewithregistration statement).
ITEM 9.17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(A)(i) To include any prospectus required by Sectionsection
10(a)(3) of the Securities Act;
(B)(ii) To reflect in the prospectusProspectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the CommissionSEC pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20%20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; (C)and
(iii) To include any material information with
respect to the Planplan of Distributiondistribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(A)(i) and (a)(1)(B)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Sectionsection 13 or Sectionsection 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
11
12
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrantRegistrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act)Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the CommissionSEC such indemnification
is against public policy as expressed
II-2
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
12(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4),
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be determined to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
13
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrantregistrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration Statementregistration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of El Paso, State of Texas, on November 12, 1998.September 5, 2002.
HELEN OF TROY LIMITED
By:/s/ /s/ Gerald J. Rubin
-------------------------------------------------------------------------
Gerald J. Rubin
Chairman andof the Board, Chief Executive
Officer, (Principal
Executive Officer)
13
14President and Director
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Gerald J.
Rubin to file one or more amendments (including post-effective amendments) to
this Registration Statement,registration statement, which amendments may make such changes in this
Registration Statementregistration statement as each of themhe deems appropriate, and each such person hereby
appoints Gerald J. Rubin as attorney-in-fact to execute in the name and on
behalf of the CompanyRegistrant and any such person, individually and in each capacity
stated below, any such amendments to this Registration Statement.registration statement.
Pursuant to the requirements of the Securities Act, this Registration
Statementregistration
statement has been signed by the following persons in the capacities and on the
date indicated.
SIGNATURE TITLE DATESignature Title Date
--------- ----- ----
/s/ Gerald J. Rubin ------------------------------------------ Chairman of the Board, Chief Executive Officer, November 12, 1998
GERALD J. RUBINSeptember 5, 2002
- --------------------------------------- President and Director (Principal Executive Officer)
Gerald J. Rubin
/s/ H. McIntyre Gardner
------------------------------------------Russell G. Gibson Senior Vice President, Finance, and Chief Operating November 12, 1998
H. MCINTYRE GARDNER Officer
/s/ Sam L. Henry
------------------------------------------ Senior Vice-President, Finance, November 12, 1998
SAM L. HENRY Secretary, and Chief Financial September 5, 2002
- --------------------------------------- Officer (Principal Financial and Accounting Officer)
Russell G. Gibson
/s/ Stanlee N. Rubin ------------------------------------------ Director November 12, 1998
STANLEESeptember 5, 2002
- ---------------------------------------
Stanlee N. RUBIN
/s/ Gary A. Abromovitz
------------------------------------------ Director November 12, 1998
GARY B. ABROMOVITZRubin
/s/ Christopher L. Carameros ------------------------------------------ Director November 12, 1998
CHRISTOPHERSeptember 5, 2002
- ---------------------------------------
Christopher L. CARAMEROSCarameros
/s/ Byron H. Rubin ------------------------------------------ Director November 12, 1998
BYRONSeptember 5, 2002
- ---------------------------------------
Byron H. RUBINRubin
/s/ Daniel C. Montano Director September 5, 2002
- ----------------------------------------
Daniel C. Montano
/s/ Gary B. Abromovitz Director September 5, 2002
- ----------------------------------------
Gary B. Abromovitz
/s/ John B. Butterworth Director September 5, 2002
- ---------------------------------------
John B. Butterworth
14S-1
15
EXHIBIT INDEX TO EXHIBITS
Exhibit No. Description PageEXHIBIT
NUMBER DESCRIPTION
- ------- ----------- ----------- ----
3.14.1 Memorandum of Association of the Company (incorporated
herein by reference to(filed as Exhibit 3.1 to the
Company's Registration Statement on Form S-4, File No.
33-73594, filed with the SEC on December 30, 1993 (Registration No. 33-73594))1993).
3.24.2 Bye-Laws of the Company (incorporated herein by reference
to(filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-4, File No. 33-73594, filed with the SEC
on December 30, 1993
(Registration No. 33-73594))1993).
4.3 Rights Agreement, dated as of December 1, 1998, between Helen
of Troy Limited and Harris Trust and Savings Bank, as Rights
Agent (filed as Exhibit 7.4 to the Company's Current Report on
Form 8-K, filed with the SEC on December 4, 1998).
5.1 Form of Opinion of Conyers Dill & PearmanPearman.
23.1 Consent of Conyers Dill & Pearman (See Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLPLLP.
24.1 Power of Attorney (included on the signature page of the
Registration Statement)registration statement).
15