Kaz Fuels Helen of Troy Third Quarter; Net Up 21.5 Percent
EL PASO, Texas-The acquisition of Kaz, the manufacturer of home-environment products, proved to be a boon for Helen of Troy's top and bottom lines in the third quarter.
Net income rose 21.5 percent to $32.9 million, while net sales jumped 65 percent to $338.8 million, and a Helen of Troy statement gave most of the credit to Kaz. Gerald Rubin, Helen of Troy's chairman, president and CEO, said the company's recent purchase from Procter & Gamble of the PUR home water filtration business, which will join Kaz in Helen of Troy's Healthcare/Home Environment segment, shows that the company is marching ahead in its expansion of this segment.
Rubin added that the Healthcare/Home Environment segment, whose gross margins are less than other areas of the company, played a role in reducing overall gross margin by 590 basis points to 39.3 percent. Selling, general and administrative expenses climbed 49 percent in dollars but dropped back 290 basis points as a percentage of sales, to 27 percent.
Rubin said Helen of Troy will push ahead with its business plan in spite of the "mixed signals" from U.S. and global economic indicators. This plan includes "continued pursuit of additional acquisitions of complementary businesses or product lines," he said, along with investment in product development and cost-control initiatives.