-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MOYPfAPGBRRu3IvjTafZDyjEbcvHqUSA/Rl9wTpbZnGGvufy7UzR9B631Qud2/pr AzD0w8TWamWkgBhKjzCOzQ== 0000950134-03-008672.txt : 20030529 0000950134-03-008672.hdr.sgml : 20030529 20030529161400 ACCESSION NUMBER: 0000950134-03-008672 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20030228 FILED AS OF DATE: 20030529 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HELEN OF TROY LTD CENTRAL INDEX KEY: 0000916789 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC HOUSEWARES & FANS [3634] IRS NUMBER: 742692550 FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14669 FILM NUMBER: 03723715 BUSINESS ADDRESS: STREET 1: CLARENDON HOUSE STREET 2: CHURCH STREET CITY: HAMILTON BERMUDA STATE: D0 ZIP: - BUSINESS PHONE: 915-225-8000 MAIL ADDRESS: STREET 1: ONE HELEN OF TROY PLAZA CITY: EL PASO STATE: TX ZIP: 79912 10-K 1 d06369e10vk.txt FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES --- EXCHANGE ACT OF 1934 For the fiscal year ended February 28, 2003 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES --- EXCHANGE ACT OF 1934 Commission file number 001-14669 HELEN OF TROY LIMITED (Exact name of the registrant as specified in its charter) BERMUDA 74-2692550 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) CLARENDON HOUSE CHURCH STREET HAMILTON, BERMUDA (Address of principal executive offices) 1 HELEN OF TROY PLAZA EL PASO, TEXAS 79912 (Registrant's United States Mailing Address) (Zip Code) Registrant's telephone number, including area code: (915) 225-8000 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK - $.10 PAR VALUE (Title of Class) 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 X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act) Yes X No --- --- The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as the last day of the registrant's most recently completed second quarter was $307,175,162. As of May 28, 2003 there were 28,220,445 shares of Common Stock, $.10 Par Value, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Certain sections of the Company's definitive proxy statement, which is to be filed under the Securities Exchange Act of 1934 within 120 days of the end of the Company's fiscal year on February 28, 2003, are incorporated by reference into Part III hereof. Except for those portions specifically incorporated by reference herein, such document shall not be deemed to be filed with the Securities and Exchange Commission as part of this Form 10-K. Index to Exhibits - Page 67 TABLE OF CONTENTS
PAGE ---- PART I Item 1. Business 1 Item 2. Properties 6 Item 3. Legal Proceedings 7 Item 4. Submission of Matters to a Vote of Security Holders 8 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters 9 Item 6. Selected Financial Data 10 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 27 Item 8. Financial Statements and Supplementary Data 28 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 59 PART III Item 10. Directors and Executive Officers of the Registrant 59 Item 11. Executive Compensation 59 Item 12. Security Ownership of Certain Beneficial Owners and Management 59 Item 13. Certain Relationships and Related Transactions 59 Item 14. Controls and Procedures 59 Item 16. Principal Accountant Fees and Services 59 PART IV Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 60 Signatures 63
i PART I ITEM 1. BUSINESS GENERAL 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. Our Company is comprised of three operating segments. The North American segment sells hair care and other personal care products in the U.S. and Canada. The International segment sells the same products outside the U.S. and Canada. Our third segment, Tactica, sells personal care and other consumer products to retailers and uses direct response marketing to sell such products directly to consumers. The section of Item 1 entitled "Products" contains more detailed information about the products that we sell. We present financial information for each of our operating segments in Note (11) of the Consolidated Financial Statements. The matters discussed in Item 1 pertain to all three of our operating segments, unless otherwise specified. We use outside manufacturers to produce our goods. We sell our products to mass merchandisers, drug chains, warehouse clubs, grocery stores, beauty supply retailers and wholesalers, as well as to individual consumers in the U.S. and other countries. We sell some of our products under licenses from third parties. Our licensed trademarks include Vidal 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; Sunbeam(R), and Sunbeam Health at Home(R), licensed from American Household, Inc; Sea Breeze(R), licensed from Shisheido Corporation; and Vitapointe(R), licensed from Fizons Corporation. We also own a number of trademarks, including 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(R), DCNL Signature(TM), Nandi(TM), Isobel(TM), Vitalis(R), Final Net(R), Ammens(R), Condition 3-in-1(R), IGIA(R), and Epil-Stop(R). We were incorporated as Helen of Troy Corporation in Texas in 1968 and reincorporated as Helen of Troy Limited in Bermuda in 1994. PRODUCTS The business of Helen of Troy's North American and International segments is designing, developing and selling a full line of personal care and comfort products. The following table lists the primary products that the North American and International segments sell and some of the brand names that appear on those products.
PRODUCTS BRAND NAMES -------- ----------- Hand-held hair dryers Vidal Sassoon(R), Revlon(R), Sunbeam(R), Helen of Troy(R), Salon Edition(R), Hot Tools(R), Ecstasy(TM), Gold Series(R), Gallery Series(R), Wigo(R), and Sable(R) Curling irons, straightening irons, Vidal Sassoon(R), Revlon(R), Sunbeam(R), Helen of Troy(R), hot air brushes and brush irons Salon Edition(R), Hot Tools(R), Gold Series(R), Gallery Series(R) Ecstasy(TM), Wigo(R), and Sable(R). Hairsetters Vidal Sassoon(R), Revlon(R) and Caruso(TM) Paraffin baths, facial brushes, and Revlon(R), Hotspa(R), Sunbeam(R) facial saunas, and other skin care appliances Foot baths Dr. Scholl's(R), Scholl(R), Revlon(R), Carel(R), and Hotspa(R) Foot massagers, hydro massagers, cushion Dr. Scholl's(R), Scholl(R), Carel(R) and Hotspa(R) massagers and body massagers Hair clippers and trimmers Vidal Sassoon(R) and Sunbeam(R) Hard and soft-bonnet hair dryers Dazey(R), Lady Dazey(R), Carel(R) and Hot Tools(R) Hair styling and utility implements Vidal Sassoon(R), Revlon(R), Wave Rage(TM), Nandi(TM), DCNL(R), and Ecstasy(TM) Decorative hair accessories Vidal Sassoon(R), Karina(R), Karina Girl(TM), HOT things(TM), isobel(TM), DCNL(R), and DCNL Signature(TM) Liquid hair styling products Vitalis(R), Final Net(R), Condition 3-in-1(R), and Vitapointe(R) Liquid skin care products Sea Breeze(R) Medicated skin care powder Ammens(R)
We own 55 percent of Tactica International, Inc. ("Tactica"). Tactica's net sales comprised approximately 17 percent, 24 percent and five percent of the Company's consolidated net sales in fiscal 2003, 2002 and 2001, respectively. Tactica designs, develops and sells a variety of personal care and other consumer products in categories such as hair care, hair removal, dental care, skin care, sports and exercise, household, and kitchen. Tactica sells these products, primarily under the IGIA(R) and Epil-Stop(R) trademarks, to retailers and uses direct response marketing to sell such products directly to consumers. Some of the products developed and marketed by Tactica are trend-oriented and have shorter product lives than Helen of Troy's other products. We continue to develop new products and enhance existing products in order to maintain and improve our position in the personal care and comfort product market. For example, during fiscal 2003 we improved existing products by adding new technologies to them. Examples include ionic hair care appliances and ceramic hair care appliances. We plan to extend our line of ceramic hair care appliances during fiscal 2004. During fiscal 2003, we also extended our line of hair care appliances that incorporate ionic technology. Our fiscal 2003 acquisition from The Procter & Gamble Company of the rights and formulas associated with six hair and skin care brand names augmented our internal product development efforts. Under the terms of an October 2002 transaction, we acquired ownership of the Vitalis(R), Condition 3-in-1(R), Final Net(R), and Ammens(R) trade names. Additionally, we acquired the rights under long-term license agreements to sell products using the Sea Breeze(R) and Vitapointe(R) trademarks. Currently, we are selling hair care and styling liquids under the Vitalis(R), Condition 3-in-1(R), Final Net(R), and Vitapointe(R) trademarks; skin care liquid, in the form of an astringent, under the Sea Breeze(R) trademark; and mediated skin care powder under the Ammens(R) name. 2 You can learn more about our products at the following Internet addresses: http://www.helenoftroyusa.com http://www.igia.com SALES AND MARKETING We market our products primarily within the U.S. Sales within the U.S. comprised 90 percent of total net sales in fiscal 2003, 91 percent of net sales in fiscal 2002, and 89 percent of net sales in fiscal 2001. Our North American and International operating segments sell their products primarily through mass merchandisers, drug chains, warehouse clubs, catalogs, grocery stores and beauty supply retailers and wholesalers. Both of these segments market our products through outside sales representatives and through our own sales staff. Tactica sells directly to retailers and distributors and uses direct consumer marketing, such as direct response and catalog advertising to sell its products to consumers. The companies from whom we license many of our brand names promote those names extensively. Revlon Consumer Products Corporation engages in national advertising of its beauty care products. The Vidal Sassoon(R), Dr. Scholl's(R) and Sunbeam(R) trademarks are widely recognized because of advertising and the sale of a variety of products. We benefit from the name recognition associated with a number of our licensed trademarks and seek to further improve the name recognition and perceived quality of all the trademarks under which we sell products through our own advertising and product development efforts. We also promote our products through television advertising and through print media, including consumer and trade magazines and various industry trade shows. MANUFACTURING AND DISTRIBUTION We contract with unaffiliated manufacturers in the Far East, primarily in the Peoples' Republic of China, Thailand, Taiwan, and South Korea, to manufacture most of the hair and personal care appliances and hair brushes, combs, and hair care accessories sold by our North American and International segments (see discussion of International Manufacturing and Operations in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the heading "Risk Factors"). For fiscal 2003, goods manufactured by vendors in the Far East comprised approximately 95 percent of the dollar value of the North American and International segments' inventory purchases and approximately 58 percent of the Tactica segment's inventory purchases. We purchase the remainder of our products from unaffiliated manufacturers, primarily in North America and Europe. The manufacturers who produce our products use formulas, molds, and certain other tooling, some of which we own, in manufacturing those products. The North American and International segments employ numerous technical and quality control persons to assure high product quality. Our products that are manufactured in the Far East and sold in North America are shipped to the West Coast of the U.S. and the West Coast of Canada. The products are then shipped by truck or rail service to warehouse facilities in El Paso, Texas; Southaven, Mississippi; Toronto, Canada; and Vancouver, Canada, or directly to customers. We ship substantially all products to North American customers from these warehouses by ground transportation services. Products sold by the International segment outside the U.S. and Canada are shipped from manufacturers, primarily in the Far East, to warehouse facilities in The Netherlands, the United Kingdom, Brazil, or directly to customers. We ship products stored at the warehouses in The Netherlands, the United Kingdom, and Brazil to distributors or retailers. Our customers in both the North American and International segments seek to minimize their inventory levels and often demand that we fulfill their orders within relatively short time frames. Consequently, these inventory management practices often require us to carry substantial levels of inventory in order to meet our customers' needs. Tactica also contracts with unaffiliated manufacturers both within and outside the U.S. to manufacture its products. Tactica's products are shipped to a warehouse facility in Reno, Nevada for shipment to individuals or retail 3 customers. Tactica also sometimes ships products from manufacturers directly to retailers. When selling to retail customers, Tactica often faces the same challenges as do our other two segments with regard to retailers' inventory management practices. Most of our three segments' products manufactured outside the countries in which they are sold are subject to import duties, which have the effect of increasing the amount we pay to obtain such products. LICENSE AGREEMENTS, TRADEMARKS, AND PATENTS Our North American and International operating segments depend materially upon the continued use of trademarks licensed under various agreements. The Vidal Sassoon(R) and Revlon(R) trademarks are of particular importance. New product introductions under licensed trademarks require approval from the respective licensors. The licensors also must approve the product packaging. Many of the license agreements require the Company to pay minimum royalties, meet minimum sales volumes, and make minimum levels of advertising expenditures. The duration of the license agreements for the Revlon(R) and Vidal Sassoon(R) trademarks, including the renewal terms, exceeds ten years. Upon expiration of the current terms of these agreements, we have the right to extend their terms upon payment of a renewal fee. The discussion below covers the primary product categories that Helen of Troy currently sells under its major license agreements. The product categories discussed do not necessarily include all of the products that Helen of Troy is entitled to sell under these or other license agreements. Under an agreement with The Procter & Gamble Company, Helen of Troy is licensed to sell certain products bearing the Vidal Sassoon(R) trademark worldwide, except in Asia. Products sold under the terms of this license include hair dryers, curling irons, straightening irons, styling irons, hairsetters, hot air brushes, hair clippers and hair trimmers, mirrors, brushes, combs, and hair care accessories. Under agreements with Revlon Consumer Products Corporation, we are licensed to sell, worldwide, except in Mexico and Western Europe, hair dryers, curling irons, straightening irons, brush irons, hairsetters, brushes, combs, mirrors, functional hair accessories, personal spa products, hair clippers and trimmers, and battery-operated and electric women's shavers bearing the Revlon(R) trademark. We are licensed to sell foot baths, foot massagers, hydro massagers, cushion massagers, body massagers, paraffin baths, and support pillows bearing the Dr. Scholl's(R) trademark in the U.S. and Canada, under an agreement with Schering-Plough HealthCare Products, Inc. We also are licensed to sell the same products under the Scholl(R) trademark in other areas of the world through an agreement with Scholl Limited. Under an agreement with American Household, Inc. we are licensed to sell hair clippers, hair trimmers, hair dryers, curling irons, hairsetters, hot air brushes, mirrors, manicure kits, hair brushes and combs, hair rollers, hair accessories, paraffin baths, and spa products bearing the Sunbeam(R) and Sunbeam Health at Home(R) trademarks in the U.S., Canada, Mexico, Central America, South America, and the Caribbean. In October 2002, we acquired from The Procter & Gamble Company the right to sell products under the trademark Sea Breeze(R) pursuant to a perpetual license from Shisheido Corporation. We currently sell a line of liquid skin care products under the Sea Breeze(R) name. Helen of Troy has filed or obtained licenses for design and utility patents in the U.S. and several foreign countries. The Company does not believe that the loss of any particular patent or patent license would have a materially adverse effect on its business. 4 RELIANCE ON ONE CUSTOMER Sales to Wal-Mart Stores, Inc., and its affiliate, SAM'S Club, accounted for approximately 24 percent, 22 percent, and 23 percent of our net sales in fiscal 2003, 2002, and 2001, respectively. No other customer accounted for ten percent or more of net sales during those fiscal years. ORDER BACKLOG When placing orders, our retail and wholesale customers usually request that we ship the related products within specific time frames. Our Tactica segment ships some of its products to direct response customers and provides these customers with estimated delivery dates at the time that it receives their respective orders. There was no significant backlog of orders in any of our distribution channels at February 28, 2003. COMPETITIVE CONDITIONS The markets in which we sell our products are very competitive. Maintaining and gaining market share depends heavily on product development and enhancement, pricing, quality, performance, packaging and availability, brand name recognition, patents, and marketing and distribution approaches. Our primary competitors include The Conair Corporation, Applica Incorporated, Remington Products Company, Goody Products, Inc., a division of Newell Rubbermaid Inc., Homedics-USA, Inc., The New L & N Marketing and Sales Corporation, Chattem, J&J Boots, Andrew Jergens, Loreal, Unilever, and Alberto Culver. Some of these competitors have significantly greater financial and other resources than we do. SEASONALITY The Company's business is somewhat seasonal. Net sales in the Company's fiscal second and third quarters, combined, accounted for approximately 55 percent of fiscal 2003 net sales and for approximately 57 percent of fiscal 2002 and 2001 net sales. As a result of the seasonality of sales, our working capital needs fluctuate during the year. REGULATION Our electrical products must meet the safety standards imposed in various national, state, local, and provincial jurisdictions. Our electrical products sold in the U.S. are designed, manufactured, and tested to meet the safety standards of Underwriters Laboratories, Inc. or Electronic Testing Laboratories. The medicated skin powder that we sell under the Ammens(R) trademark is regulated by the United States Food and Drug Administration. EMPLOYEES We employ 672 full-time employees in the U.S., Hong Kong, and Europe, of which 238 are marketing and sales employees, 159 are distribution employees, 55 are engineering and development employees, and 220 are administrative personnel. Included in these totals are 76 employees of Tactica. Tactica employs 57 administrative and 19 sales and marketing personnel. None of the Company's employees are covered by a collective bargaining agreement. We have never experienced a work stoppage and we believe that we have satisfactory working relations with our employees. GEOGRAPHIC INFORMATION Note (11) to the Consolidated Financial Statements contains geographic information concerning our net sales and long-lived assets. 5 SECURITIES EXCHANGE ACT REPORTS We maintain an Internet site at the following address: http://www.helenoftroyusa.com. We make available on or through our Internet website certain reports and amendments to those reports that we file with or furnish to the Securities and Exchange Commission (the "SEC") in accordance with the Securities Exchange Act of 1934 (the "Securities Exchange Act"). These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. The public may read and copy any of the materials we file with the SEC in accordance with the Securities Exchange Act at the SEC's Public Reference Room at 450 Fifth Street, N.W. Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0300. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information about our Company. The address of the SEC's Internet site is http://www.sec.gov. ITEM 2. PROPERTIES PLANT AND FACILITIES North American Segment. We own a 135,000 square foot office building and a 408,000 square foot warehouse in El Paso, Texas. The office building houses our U.S. operations. The El Paso office building and warehouse are located on a 50-acre plot of land that we own. We also own a 619,000 square foot warehouse in Southaven, Mississippi, as well as the 29-acre plot of land on which that warehouse is located. We purchased the Southaven warehouse in January 2003. It became fully operational during May 2003. We lease 108,000 square feet of warehouse space in El Paso, Texas; 50,000 square feet of warehouse space in Toronto, Canada; and 20,000 square feet of warehouse space in Vancouver, Canada. During fiscal 2003 we also leased 360,000 square feet of warehouse space in Memphis, Tennessee. Our lease in Memphis terminated upon the Southaven warehouse becoming fully operational. We also lease sales offices in Bentonville, Arkansas, Minneapolis Minnesota, Troy Michigan, and Toronto, Canada. We own 22 acres of land in El Paso, Texas, near the 50 acres on which the warehouse and the U.S. office building that we own are located. The Company is holding this land for future business use. International Segment. We lease warehouse space in public warehouses located in Hong Kong; The Netherlands, and the United Kingdom. In addition, we also lease sales offices in the United Kingdom, France, Germany, and Brazil. Tactica. Tactica leases administrative offices in New York, New York and leases public warehouse space in Reno, Nevada. Corporate. A subsidiary located in Hong Kong leases approximately 23,000 square feet of office space. Prior to fiscal 1996 this subsidiary was headquartered in approximately 12,000 square feet of office space that the Company still owns. We also own 12,000 square feet of warehouse space on a 62,000 square foot lot adjacent to the building that formerly housed our U.S. operations. We are holding this property for sale. 6 ITEM 3. LEGAL PROCEEDINGS The Hong Kong Inland Revenue Department (the "IRD") has assessed $6,753,000 in tax on certain profits of our foreign subsidiaries for the fiscal years 1995 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 and that we have complied with all applicable reporting and tax payment obligations. 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 $34,101,000 (U.S.) for the period from fiscal 1995 through fiscal 2003. In connection with the IRD's tax assessment for the fiscal years 1995 through 1997, we were required to purchase $3,282,000 (U.S.) in tax reserve certificates in Hong Kong, which represented approximately 49 percent 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 included on our Consolidated Balance Sheets as of February 28, 2003 and 2002 on the line entitled "Other assets." The tax reserve certificates are denominated in Hong Kong dollars and are, therefore, subject to the risks associated with foreign currency fluctuations. The IRD also assessed $4,468,000 in tax on certain profits of our foreign subsidiaries for the fiscal years 1990 through 1994. During the second quarter of the fiscal year ended February 28, 2003, we and the IRD settled our dispute related to those years for $2,505,000 (56 percent of the assessed amount), plus interest of approximately $100,000. As a result of the assessment, we forfeited tax reserve certificates previously valued at $2,468,000 on our Consolidated Balance Sheet and paid approximately $137,000 in cash to the IRD. The tax reserve certificates that we forfeited were included on our Consolidated Balance Sheet as of February 28, 2002 on the line entitled "Other assets." The settlement did not affect the current status of the IRD's assessments for fiscal years 1995 through 1997 and did not have a material effect on our consolidated results of operations. Although the ultimate resolution of the IRD's claims cannot be predicted with certainty, we believe that we have made adequate provision in the financial statements for the resolution of the IRD's claims and potential future assessments relating to activity since fiscal 1997. Such provision appears on our Consolidated Balance Sheets as of February 28, 2003 and 2002 on the line entitled "Income taxes payable." In the fourth quarter of the fiscal year ended February 28, 2001, the Company recorded a $2,457,000 charge for the remaining unamortized costs under a distribution agreement (which was later formally terminated) with The Schawbel Corporation ("Schawbel"), the supplier of the Company's butane hair care products. In a related matter, in September 1999, Schawbel commenced litigation in the U.S. District Court for the District of Massachusetts against The Conair Corporation ("Conair"), the predecessor distributor for Schawbel's butane products. In its action, amended in June 2000, Schawbel alleged, among other things, that Conair, following Schawbel's termination of the Conair distribution agreement, stockpiled and sold Schawbel product beyond the 120 day "sell-off" period afforded under the agreement, and manufactured, marketed and sold its own line of butane products which infringed patents held by Schawbel. In November 2000, the Massachusetts court granted Schawbel its request for preliminary injunction, and ordered that Conair cease selling all allegedly infringing products. The Company intervened as a plaintiff in the action to assert claims against Conair similar to the claims raised by Schawbel. The Company is seeking to recover damages in excess of $10 million, arising from the Company's inability to meet minimum purchase requirements under its distribution agreement with Schawbel and the subsequent termination of that agreement by Schawbel. Conair responded by filing a counterclaim alleging that the Company conspired with Schawbel to unlawfully terminate Conair's distribution agreement with Schawbel, and to disparage Conair's reputation in the industry. The counterclaim seeks $15 million in damages. Although the ultimate outcome of the matter cannot be predicted, the Company contends that Conair's counterclaims lack validity. The Company intends to pursue vigorously its claims and defense in the litigation. 7 The Company is involved in various other legal claims and proceedings in the normal course of operations. In the opinion of management, the outcome of these matters will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2003. 8 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS PRICE RANGE OF COMMON STOCK Our Common Stock is listed on the NASDAQ National Market System [symbol: HELE]. The following table sets forth, for the periods indicated, in dollars per share, the high and low bid prices of the Common Stock as reported on the NASDAQ National Market System. These quotations reflect the inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
High Low ---- --- FISCAL 2003 First quarter 15.00 11.65 Second quarter 14.17 11.20 Third quarter 12.05 8.20 Fourth quarter 14.58 10.21 FISCAL 2002 First quarter 9.42 5.16 Second quarter 14.80 7.75 Third quarter 13.20 7.99 Fourth quarter 15.79 10.26
APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS We have one class of equity security outstanding at February 28, 2003; Common Stock with a par value of $0.10. As of April 30, 2003 there were 404 holders of record of the Company's Common Stock. Shares held in "nominee" or "street" name at each bank nominee or brokerage house are included in the number of shareholders of record as a single shareholder. We estimate that approximately 14,000 individuals and institutions hold our Common Stock. CASH DIVIDENDS The Board of Directors' current policy is to retain earnings to provide funds for the operation and expansion of the Company's business and for potential acquisitions. The Company has not paid any cash dividends on its Common Stock since inception. The Company's current intention is to pay no cash dividends in fiscal 2004. Any change in dividend policy will depend upon future conditions, including earnings and financial condition, general business conditions, any applicable contractual limitations, and other factors deemed relevant by the Board of Directors. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER NUMBER OF SECURITIES TO WEIGHTED-AVERAGE EQUITY COMPENSATION BE ISSUED UPON EXERCISE OF EXERCISE PRICE OF PLANS (EXCLUDING OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, SECURITIES REFLECTED IN WARRANTS, AND RIGHTS WARRANTS, AND RIGHTS COLUMN (a)) (a) (b) (c) EQUITY COMPENSATION PLANS APPROVED BY SECURITY HOLDERS 8,614,738 $ 10.83 1,769,226 EQUITY COMPENSATION PLANS NOT APPROVED BY SECURITY HOLDERS -- -- -- ------------ ---------- ---------- TOTAL 8,614,738 $ 10.83 1,769,226 ============ ========== ==========
9 ITEM 6. SELECTED FINANCIAL DATA The selected consolidated financial information set forth below has been summarized from the Company's Consolidated Financial Statements. This information should be read in conjunction with the Consolidated Financial Statements and the related Notes to Consolidated Financial Statements included in Item 8. "Financial Statements and Supplementary Data." All currency amounts in this document are denominated in U.S. dollars. For the year ended the last day of February, (all numbers except shares and earnings per share in thousands)
2003(1) 2002(1) 2001(1) 2000 1999 --------- --------- --------- --------- --------- Statements of Income Data Net Sales (2) $ 458,825 $ 447,319 $ 357,164 $ 297,257 $ 293,363 Cost of sales 247,794 238,859 220,530 185,685(4) 175,293 --------- --------- --------- --------- --------- Gross Profit 211,031 208,460 136,634 111,572 118,070 Selling, general and administrative expenses (2) 158,172 166,803 113,638(3) 101,771(4) 81,356 --------- --------- --------- --------- --------- Operating income 52,859 41,657 22,996 9,801 36,714 Interest expense (3,965) (4,256) (3,989) (3,530) (3,337) Other income (5) 1,852 1,146 1,883 6,826 2,036 --------- --------- --------- --------- --------- Earnings before income taxes 50,746 38,547 20,890 13,097 35,413 Income tax expense (benefit) 12,030 9,332 3,558 (14) 7,083 --------- --------- --------- --------- --------- Net earnings $ 38,716 $ 29,215 $ 17,332 $ 13,111 $ 28,330 ========= ========= ========= ========= ========= Per Share Data Basic $ 1.37 $ 1.04 $ .61 $ .45 $ 1.00 Diluted $ 1.31 $ 1.00 $ .60 $ .44 $ .96 Weighted average number of Common shares outstanding: Basic 28,189 28,089 28,420 29,053 28,279 Diluted 29,548 29,199 28,729 29,885 29,596
10 ITEM 6. SELECTED FINANCIAL DATA - CONTINUED Last Day of February (in thousands)
2003 2002 2001 2000 1999 -------- -------- -------- -------- -------- Balance Sheet Data: Working capital $173,809 $191,438 $157,809 $154,395 $150,940 Total assets 405,629 357,558 337,181 304,252 294,036 Long-term debt 55,000 55,000 55,000 55,000 55,450 Stockholders' equity (6) 289,602 250,326 219,609 209,624 199,842 Cash dividends -- -- -- -- --
(1) Fiscal 2003, 2002 and 2001 results include 100 percent of the results of Tactica, a subsidiary in which the Company acquired a 55 percent interest in March 2000. See "Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" for a further explanation of this accounting policy. (2) We adopted Emerging Issues Task Force Abstract 01-9 ("EITF 01-9") for fiscal 2003. EITF 01-9 requires that certain vendors record certain consideration given to customers as reductions of sales, rather than as selling, general, and administrative expenses. Certain items that, prior to fiscal 2003, were classified as selling, general, and administrative expenses have been reclassified as reductions to net sales. Those items totaled $3,930,000 for fiscal 2002, $4,234,000 for fiscal 2001, $2,256,000 for fiscal 2000, and $1,124,000 for fiscal 1999. (3) In fiscal 2001, the Company recorded a $2,457,000 charge for the remaining unamortized costs under a distribution agreement, which was later formally terminated. (4) In fiscal 2000, the Company incurred $2,669,000 of charges to cost of goods sold and $8,725,000 of charges to selling, general and administrative expenses as a result of the discontinuance of its artificial nails product line. In fiscal 2000 the Company also incurred $770,000 of charges related to the restructuring and reorganization of several departments. (5) Other income includes gains of approximately $75,000 in fiscal 2003, $165,000 in fiscal 2002, $1,400,000 in fiscal 2001 and $6,300,000 in fiscal 2000 from the sale and appreciation of trading securities. (6) In fiscal 2000 the Company repurchased 526,485 shares of its Common Stock at a cost of $4,076,000. In fiscal 2001, the Company repurchased 815,946 shares of its Common Stock at a cost of $4,623,000. No Common Stock was repurchased in any other year presented above. 11 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This discussion contains a number of forward-looking statements, all of which are based on current expectations. Actual results may differ materially due to a number of factors, including those discussed in the sections entitled "Risk Factors" and "Information Relating to Forward Looking Statements" and in Item 7A. "Quantitative and Qualitative Disclosures About Market Risk." RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, selected consolidated operating data for the Company as a percentage of net sales. Relationship to Net Sales Fiscal Year
2003 2002 2001 ------ ------ ------ Net sales 100.0% 100.0% 100.0% Cost of sales 54.0 53.4 61.7 ------ ------ ------ Gross Profit 46.0 46.6 38.3 Selling, general and administrative expenses 34.5 37.3 31.8 ------ ------ ------ Operating income 11.5 9.3 6.5 Interest expense (0.9) (1.0) (1.1) Other income, net 0.4 0.3 0.5 ------ ------ ------ Earnings before income taxes 11.0 8.6 5.9 Income taxes 2.6 2.1 1.0 ------ ------ ------ Net earnings 8.4% 6.5% 4.9% ====== ====== ======
12 Sales by operating segment for fiscal 2003, 2002 and 2001 were as follows:
% INCREASE (IN THOUSANDS) (DECREASE) 2003 2002 versus versus SEGMENT 2003 2002 2001 2002 2001 - ------- -------- -------- -------- -------- -------- North American $345,992 $308,738 $307,764 12% --% International 33,759 29,906 25,390 13 18 Tactica 79,074 108,675 24,010 (27) 353 -------- -------- -------- -------- -------- $458,825 $447,319 $357,164 3% 25% -------- -------- -------- -------- --------
Operating income (loss) by operating segment for fiscal 2003, 2002 and 2001 was as follows:
% INCREASE (IN THOUSANDS) (DECREASE) ------------------------------------------ --------------------------- 2003 2002 versus versus SEGMENT 2003 2002 2001 2002 2001 - ------- ---------- ---------- ---------- ---------- ---------- North American $ 49,554 $ 32,203 $ 28,736 54% 12% International 2,995 (244) 94 1,327 (360) Tactica 2,657 11,930 (4,629) (78) 358 Corporate / other (1) (2,347) (2,232) (1,205) (5) (85) ---------- ---------- ---------- ---------- ---------- $ 52,859 $ 41,657 $ 22,996 27% 81% ---------- ---------- ---------- ---------- ----------
(1) Includes items not allocated to the three operating segments. RESULTS OF OPERATIONS Consolidated Sales and Gross Profit Margins Our net sales for the 12-month period ended February 28, 2003 ("fiscal 2003") grew by $11,506,000, or 2.6 percent, compared to the 12-month period ended February 28, 2002 ("fiscal 2002"). Net sales increased in our North American and International operating segments, while our Tactica segment's net sales decreased. Fiscal 2002 net sales improved 25.2 percent or $90,155,000 versus the 12-month period ended February 28, 2001 ("fiscal 2001"). All three of our operating segments exceeded their prior year sales totals, with the Tactica operating segment producing $84,665,000 of the fiscal 2002 sales increase. The International operating segment was responsible for most of the remaining sales growth. Gross profit, as a percentage of sales decreased from 46.6 percent in fiscal 2002 to 46.0 percent in fiscal 2003, primarily because of the mix of net sales among our operating segments. Our North American and International segments' net sales increased during fiscal 2003, both in absolute terms and as a percentage of consolidated net sales. These segments generally achieve lower gross margins than Tactica, but also incur lower selling, general, and administrative expenses, as a percentage of net sales, than Tactica. This change in sales mix contributed to the decrease in gross profit margins. The North American and International segments both achieved improved gross margins during fiscal 2003, offsetting, in part, the effect of the change in our sales mix. Our fiscal 2002 gross profit margins improved from 38.3 to 46.6 percent. Most of this increase was attributable 13 to Tactica's higher sales. Tactica's net revenues made up 24.1 percent of our consolidated fiscal 2002 net sales, versus 6.7 percent in fiscal 2001, thus increasing the effect of its relatively high gross margins on consolidated gross margins. North American segment gross margins also improved from fiscal 2001 to fiscal 2002, primarily because of a favorable change in the mix of products sold and our ability to source product more efficiently. Selling, general, and administrative expense During fiscal 2003, selling, general, and administrative expenses ("SG&A"), expressed as a percentage of sales, decreased from 37.3 percent to 34.5 percent. Three factors contributed significantly to this decrease. First, we experienced a $2,035,000 reduction in SG&A due to the discontinuance of goodwill amortization associated with the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." Second, SG&A dropped by $1,945,000, compared to fiscal 2002, because of foreign exchange gains. Finally, our North American and International segments comprised larger portions of our business in fiscal 2003 than in fiscal 2002. As mentioned above, the North American and International segments generally incur lower SG&A, as a percentage of sales, than our other segment, Tactica. The difference in SG&A rates is largely due to the fact that Tactica's business model requires it to spend higher percentages of its net sales on media advertising. Because the North American and International segments contributed larger percentages of our consolidated net sales in fiscal 2003 than in fiscal 2002, the lower SG&A, as a percentage of sales, that they incurred, had a greater weight in determining consolidated SG&A as a percentage of net sales. From fiscal 2001 to fiscal 2002, SG&A expressed as a percentage of net sales, increased from 31.8 percent to 37.3 percent. Because Tactica grew significantly during fiscal 2002, both in its sales volume and as a percentage of our consolidated business, all of its operating statistics, including SG&A as a percentage of sales, became much more significant to our overall results. This was the primary reason for higher SG&A, as a percentage of sales, during fiscal 2002. Although its SG&A percentage was higher than the percentages incurred by the other segments, Tactica's SG&A declined as a percentage of its net sales from fiscal 2001 to fiscal 2002. The main reason for the decline was a drop in Tactica's fixed expenses as a percentage of its increased sales. The variable portion of Tactica's SG&A expense rose slightly as a percentage of its fiscal 2002 net sales, mainly because of higher advertising expense. Excluding Tactica, our fiscal 2002 SG&A as a percentage of sales was consistent with fiscal 2001, as lower media advertising expenses largely offset slightly higher personnel, insurance, and inventory storage costs. North American Segment The North American segment sells hair care and other personal care and comfort appliances, hair brushes, combs, utility and decorative hair accessories, liquid hair care products, and liquid and powder skin care products in the U.S. and Canada. The North American segment's main customers are mass merchandisers, drug chains, warehouse clubs, grocery stores, and beauty supply retailers and wholesalers. Net sales in the North American segment grew $37,254,000 or 12.1 percent from fiscal 2002 to fiscal 2003. On October 23, 2002, we expanded our product lines into the liquid and powder hair and skin care category by acquiring four brand names and licenses to sell products under two additional brand names. Sales of liquid and powder hair and skin care products under the six new brand names resulted in $11,200,000 of sales growth in the North American segment. Exclusive of these sales our North American segment grew 8.4 percent. The growth, exclusive of the liquid and powder product lines, resulted from increased sales of existing product lines that have been enhanced with new technologies and features. Examples include hair care appliances utilizing ionic technology and ceramic, rather than traditional, heating surfaces. We also experienced increased sales in our Vidal Sassoon(R) line of hair clippers, as well as hair care appliances sold under our Wave Rage(TM) trade name. Partially offsetting the gains discussed above, our fiscal 2003 net sales of hair brushes, combs and accessories were lower than in fiscal 2002. North American segment sales remained relatively constant from fiscal 2001 to fiscal 2002, increasing by less than one percent. In the retail distribution channel, our new line of ion hair care appliances and our private label products produced sales increases. Slight decreases in sales of some of our branded hair care and personal care appliances, as well 14 as lower sales of brushes, combs, and accessories offset partially the sales increases. Sales in the North American professional distribution channel grew mainly because of new product introductions and the expansion of some of our larger customers in this channel of distribution. The weakness of the U.S. economy in fiscal 2002, relative to the recent past, contributed to a difficult North American sales environment. The North American segment's operating income grew $17,351,000, or 53.9 percent, for fiscal 2003, compared to fiscal 2002. Operating income in the North American segment was 14.3 percent of sales, compared to 10.4 percent in fiscal 2002. The sales growth discussed above was a significant factor in the North American segment's achievement of higher operating income. The North American segment benefited from the absence of goodwill amortization during fiscal 2003, due to the adoption of SFAS 142, and achieved better gross margins in fiscal 2003 than fiscal 2002. The increased gross margins were attributable primarily to more efficient product sourcing. In addition, the North American segment benefited during fiscal 2003 from the reclassification of $580,000 that was accrued during fiscal 2000 for anticipated customer credits related to the artificial fingernails business, but was not needed for that purpose. This amount was reclassified in fiscal 2003 to accrue for customer credits related to other products. Operating income generated by the North American segment increased 12.1 percent in the fiscal year ended February 28, 2002, compared to the same period a year earlier. Expressed as a percentage of sales, the North American segment's operating income rose from 9.3 percent to 10.4 percent from fiscal 2001 to fiscal 2002. The improved North American operating results were primarily the result of higher gross profit margins, arising from favorable changes in the mix of products sold and our ability to source product more efficiently. International Segment The International segment sells hair care and other personal care and comfort appliances, hairbrushes, combs, utility and decorative hair accessories, liquid hair care products, and liquid and powder skin care products outside of the U.S. and Canada. The International segment, like the North American segment, sells primarily to mass merchandisers, drug chains, warehouse clubs, grocery stores, and beauty supply retailers and wholesalers. Net sales in the International segment grew $3,853,000 or 12.9 percent from fiscal 2002 to fiscal 2003. As discussed in the North American segment sales analysis above, on October 23, 2002, we expanded our product lines into the liquid and powder hair and skin care category by acquiring four brand names and licenses to sell products under two additional brand names. Sales of liquid and powder hair and skin care products under the six new brand names resulted in $1,797,000 of sales growth in the International segment. Exclusive of these sales our International segment grew 6.9 percent. The International segment sales increase, exclusive of the liquid and powder products, is mainly comprised of improved sales in the United Kingdom ("UK"). The introduction of hair straighteners under the Vidal Sassoon(R) trade name in the UK produced part of the sales growth, while the introduction of a new line of hair care appliances under the Cosmopolitan trade name contributed the balance. The strengthening during fiscal 2003 of the British pound and the Euro versus the U.S. dollar also had a positive effect on our International segment's net sales. Increased sales in Latin and South America, France, and the UK drove International segment net sales up 17.8 percent during fiscal 2002. The growth in Latin America and South America was attributable to our successful efforts to increase distribution by expanding our customer base in that geographic area. The net sales increase in France was due both to the development of relationships with a larger number of customers and the growth of our business with existing customers. Expanded sales to some of our larger customers in the UK drove sales increases there. The International segment generated $2,995,000 of operating income, compared to a $244,000 operating loss in fiscal 2002. Higher net sales, along with better gross profit margins, were keys to the International segment's improved operating results for fiscal 2003. As was the case with the North American segment, more efficient sourcing contributed to the International segment's improved gross margins. Foreign currency exchange gains also increased the International segment's operating profits by approximately $1,900,000. Our operations in the UK, Germany, and France purchase inventory using United States dollars and bill customers in British pounds or Euros upon selling such inventory. This 15 method of purchasing and billing combined with a weakening U.S. dollar to produce foreign exchange gains during fiscal 2003. Our International segment incurred an operating loss of $244,000 in fiscal 2002, compared to operating income of $94,000 in fiscal 2001. During fiscal 2002, we experienced collection difficulties with a customer in the Latin and South American market, as well as several customers in the Middle East. We are currently exploring strategies that might reduce our credit risk in the Latin and South American market. In addition to collection difficulties, inventory markdowns and currency exchange losses contributed to the International segment's fiscal 2002 operating loss. Tactica Segment We own a 55 percent interest in Tactica International, Inc. ("Tactica"). Tactica sells a variety of personal care and other products to retailers and directly to consumers. Tactica uses television and print media advertising extensively. As a result, Tactica incurs higher SG&A expenses, as a percentage of sales, than the North American and International operating segments. At the time that we acquired Tactica, we determined that use of the purchase method of accounting and consolidation was appropriate and we continue to use that method of consolidation. Tactica had accumulated a net deficit at the time that we acquired our interest in it and the minority shareholders have not adequately guaranteed their portion of the accumulated deficit. At February 28, 2003, Tactica's accumulated deficit totaled $2,172,000. Therefore, our Consolidated Statements of Income for fiscal 2003, 2002 and 2001 include 100 percent of Tactica's net earnings or loss. We will continue to recognize all of Tactica's net income or loss until such time as Tactica's $2,172,000 accumulated deficit is extinguished. Tactica's fiscal 2003 net revenues decreased 27.2 percent, compared to fiscal 2002. Sales of Tactica's Epil-Stop(R) hair removal products decreased approximately 50 percent, with this change being the primary reason for Tactica's lower net revenues. We expect Tactica's fiscal 2004 net revenues to remain relatively constant, compared to fiscal 2003. Please refer to the section below entitled "Risk Factors" regarding this and other forward-looking statements. During fiscal 2002, Tactica's net revenues increased to over four times their fiscal 2001 levels. Epil-Stop(R) products played the most significant role of any product in Tactica's fiscal 2002 sales increase. The Electrosage(TM) muscle stimulation / exercise product line and the new Twist-A-Braid(TM) hair styling accessory also contributed to higher fiscal 2002 sales. Due mainly to the sales decrease discussed above, Tactica's operating income decreased from $11,930,000 in fiscal 2002 to $2,657,000 in fiscal 2003. In addition to lower sales, Tactica also achieved slightly lower gross profit, as a percentage of sales, in fiscal 2003 than in fiscal 2002 as its sales mix shifted more heavily toward retailers and away from sales directly to consumers. Because its sales decreased, Tactica experienced an increase in SG&A as a percentage of sales, despite lowering its SG&A spending by approximately $16,000,000. Tactica's operating income of $11,930,000 in fiscal 2002 was a $16,559,000 improvement over its fiscal 2001 operating loss of $4,629,000. Tactica's improvement in net sales was the primary factor leading to its better operating results in fiscal 2002. Higher fiscal 2002 revenues produced more gross profit for Tactica and caused its SG&A expenses, as a percentage of sales, to decrease. Interest expense and Other income / expense Interest expense was $291,000, or 6.8 percent, lower in fiscal 2003 than in fiscal 2002. We did not borrow any funds under our line of credit during fiscal 2003, as opposed to fiscal 2002, when we borrowed funds during the first three quarters of that fiscal year and incurred the related interest expense. During fiscal 2003, our interest expense 16 consisted entirely of interest on our fixed rate long-term notes payable. Interest expense increased 6.7 percent, or $267,000, from fiscal 2001 to fiscal 2002. This was largely due to increased borrowings under our line of credit during the first three quarters of fiscal 2002. The increase in borrowings was due to our relatively high levels of inventory purchases early in the year. Such purchases enabled us to obtain products from suppliers at favorable prices. The increase of $706,000, or 62 percent, in our other income for fiscal 2003, over fiscal 2002, was due mainly to the fact that we had more cash available for investment during most of fiscal 2003 than fiscal 2002. Other income decreased to $1,146,000 in fiscal 2002, compared to $1,883,000 in fiscal 2001. The primary reason for the decrease was a drop in income from the sale and appreciation of trading securities from approximately $1,400,000 in fiscal 2001 to $147,000 in fiscal 2002. Interest income also fell because of lower interest rates and because of lower cash balances for most of fiscal 2002 versus fiscal 2001. Income tax expense Our fiscal 2003 income tax expense was 23.7 percent of net income before taxes, a rate relatively constant with the 24.2 percent rate that we experienced in fiscal 2002. Because of our corporate structure, the earnings produced by our North American and International operating segments are generally taxed at lower rates than earnings produced by Tactica. The North American and International segments, combined, contributed a significantly larger portion of our earnings in fiscal 2003 than in fiscal 2002. This change in the mix of our earnings served to reduce our consolidated effective income tax rate. However, as discussed below, we removed a valuation allowance from a deferred tax asset during fiscal 2002, thereby making that year's effective income tax rate lower than it otherwise would have been. This factor offset the reduction of income taxes as a percentage of earnings before income taxes, caused by the reduction in Tactica's contribution to pre-tax earnings. In fiscal 2002 our income tax expense was 24.2 percent of net income before income taxes, as opposed to 17.0 percent in fiscal 2001. The main reason for this change was Tactica. As mentioned above, Tactica usually incurs higher income tax rates than do our other two segments combined. Because Tactica produced net income during fiscal 2002, as opposed to a loss in fiscal 2001, our fiscal 2002 effective tax rate rose. The removal during fiscal 2002 of a valuation allowance from a $1,115,000 deferred tax asset reduced Tactica's income tax expense for fiscal 2002. LIQUIDITY AND CAPITAL RESOURCES During fiscal 2003, we funded several significant capital, trademark, and license expenditures with cash generated internally. Our largest such expenditures consisted of the purchase of four trade names and the rights under licenses for two additional trade names. We now sell hair care liquids and skin care liquids and powder under those six brand names. In addition, we purchased a warehouse in Mississippi and entered an agreement with a licensor whereby we prepaid royalties due in future years. We used approximately $63,000,000 of cash in these transactions and ended the year with cash of more than $47,000,000. Operating activities provided $43,513,000 during fiscal 2003, compared to $52,632,000 during fiscal 2002. The primary reason for the difference between these two figures was our use of $11,500,000 to prepay royalties under a license agreement in connection with alterations to the terms of that agreement. Investing activities used $60,529,000 of cash during fiscal 2003, compared with $5,778,000 in fiscal 2002, mainly because of our purchase of a warehouse in Mississippi and our acquisition of four trade names under which we will sell hair care liquids and skin care liquids and powder, as well as licenses to sell such products under two additional trade names. The new warehouse replaces space that we were leasing in a warehouse operated by a third party in the Southeast. The purchase of the brand names and rights under licenses allows us to expand into an additional portion of the personal care market. We believe that this transaction will result in increased net sales and earnings for the Company. 17 Net accounts receivable decreased 11.4 percent from February 28, 2002 to February 28, 2003. This decrease is largely a result of the timing of our fourth quarter sales. Our sales during the first month of the fourth quarter were higher in fiscal 2003 than in fiscal 2002. The reverse was true of sales for the third month of the quarter. This pattern resulted in earlier collection of fiscal 2003 fourth quarter sales, compared to fiscal 2002. Our February 28, 2003 inventory balance increased 11.6 percent, compared to the same time a year earlier, while net sales grew by 2.6 percent. The primary reason for the difference between the percentage increase in inventory and sales was an increase in the Tactica segment's inventory, while its sales decreased. Our working capital balance decreased to $173,809,000 at February 28, 2003, from $191,438,000 at February 28, 2002. Our current ratio was 3.8 at February 2003, compared to 4.7 at February 28, 2002. The decreases in our working capital and current ratio resulted from the conversion of cash into non-current assets in connection with the purchases of brand names and a new warehouse facility, as well as the prepayment of royalties, all of which are discussed earlier in this section. In connection with its acquisition of a 55 percent interest in Tactica, the Company loaned $3,500,000 to the minority shareholders of Tactica. The annual interest rate on these loans is 8.75 percent. All principal and unpaid interest on these loans is due March 14, 2005. These loans are secured by the shares of Tactica held by the minority shareholders. The total amounts of principal and accrued interest due to the Company under the loans to Tactica's minority shareholders were $4,409,000 and $4,103,000 at February 28, 2003 and 2002, respectively. These amounts are included in "Other assets" on the Consolidated Balance Sheets. We maintain a revolving credit loan with a bank to facilitate short-term borrowings and the issuance of letters of credit. This line of credit allows borrowings totaling $25,000,000, incurs interest at the three-month LIBOR rate plus a percentage that varies based on the ratio of the Company's debt to its earnings before interest, taxes, depreciation, and amortization ("EBITDA"), and expires August 31, 2003. At February 28, 2003 the interest rate charged under the line of credit was 2.31 percent. This line of credit allows for the issuance of letters of credit up to $7,000,000. Any outstanding letters of credit reduce the $25,000,000 maximum borrowing limit on a dollar-for-dollar basis. At February 28, 2003, there were no borrowings under this line of credit and outstanding letters of credit totaled $828,000. The revolving credit agreement provides that the Company must satisfy requirements concerning its minimum net worth, debt to capitalization ratio, debt to EBITDA ratio and its fixed charge coverage ratio. The Company is in compliance with all of these requirements. Under the terms of the revolving credit agreement, one of our U.S. subsidiaries is the borrower. Our parent company, located in Bermuda and three of our U.S. subsidiaries fully guarantee any amounts outstanding under the revolving line of credit on a joint and several basis. Our $55,000,000 of long-term debt is comprised of a group of unsecured Senior Notes with face values totaling $40,000,000 and an annual interest rate of 7.01 percent, as well as an unsecured Senior Note with a face value of $15,000,000 and an annual interest rate of 7.24 percent. We pay interest on these notes each calendar quarter. The $40,000,000 group of Senior Notes requires annual principal payments of $10,000,000 beginning January 5, 2005, with the final payment due January 5, 2008. The $15,000,000 Senior Note requires annual principal payments of $3,000,000 beginning July 18, 2008, with the final payment due July 18, 2012. The Senior Notes contain covenants that require the Company to meet certain net worth and other financial requirements. Additionally, the Senior Notes restrict the Company from incurring liens on any of its properties, except under certain conditions. The Company is in compliance with all the terms of these notes. Under the terms of the Senior Notes, one of our U.S. subsidiaries is the borrower. Our parent company, located in Bermuda, one of our subsidiaries located in Barbados, and three of our U.S. subsidiaries fully guarantee the Senior Notes on a joint and several basis. Capital and license expenditures totaled $42,865,000, $878,000, and $3,185,000 in fiscal 2003, 2002, and 2001, respectively. Capital and license expenditures during fiscal 2003 included $16,700,000 associated with our purchase of a new warehouse facility in Mississippi, $19,000,000 paid for the acquisition of the rights to sell Sea Breeze(R) and 18 Vitapointe(R) products under a license agreement, and $2,000,000 paid in connection with the renewal and alteration of terms of a license agreement. We also used $16,920,000 of cash to acquire trademarks. We are in the process of replacing certain of our key information technology systems. We estimate that we will spend a total of approximately $5,000,000 to $6,000,000 on this project, with the expenditures occurring during fiscal 2004 and fiscal 2005. It is our expectation that we will capitalize at least 80 percent of the amount spent on the information technology project. In addition, we plan to move our UK operation into a new office facility during fiscal 2004. We expect to make a capital expenditure of approximately $1,800,000 in connection with the construction of our new office facility in the UK. We expect to pay for the information technology project and the new UK office facility with funds generated internally. Our contractual obligations and commercial commitments, as of February 28, 2003 were:
PAYMENTS DUE BY Contractual Obligations PERIOD (IN 000S) After Total 1 year 2 years 3 years 4 years 5 years 5 years -------- -------- -------- -------- -------- -------- -------- Long-term debt $ 55,000 -- 10,000 10,000 10,000 10,000 15,000 Open purchase orders - inventory 68,249 68,249 -- -- -- Minimum royalty payments 24,830 3,705 3,829 3,260 2,658 2,658 8,720 Advertising commitments under license agreements 23,775 6,274 5,724 5,705 868 878 4,326 Management fees - Corporate jet 1,811 362 362 363 362 362 -- Operating leases 3,678 1,960 894 818 6 -- -- New office facility in UK 1,800 1,800 -- -- -- -- -- Purchase of software 1,113 1,113 -- -- -- -- -- -------- -------- -------- -------- -------- -------- -------- Total contractual obligations $180,256 83,463 20,809 20,146 13,894 13,898 28,046 ======== ======== ======== ======== ======== ======== ========
Our 55 percent-owned subsidiary, Tactica International, Inc. ("Tactica") leases office space in New York City. One of our U.S. subsidiaries has issued a $389,000 standby letter of credit to the lessor. The lessor may draw funds from the standby letter of credit if Tactica fails to pay its rent. The standby letter of credit decreases to $195,000 on April 30, 2005 and expires on the same date as the related lease, February 27, 2006. We do not engage in any activities involving special purpose entities or off-balance sheet financing. Based on our current financial condition and current operations, we believe that cash flows from operations and available financing sources will continue to provide sufficient capital resources to fund the Company's ongoing liquidity needs for the foreseeable future. Other than the planned capital expenditures discussed above, we expect that our capital needs will stem primarily from the needs to purchase sufficient levels of inventory and to carry normal levels of accounts receivable on our balance sheet. In addition, we evaluate acquisition opportunities on a regular basis and might augment our internal growth with acquisitions of complementary businesses and product lines. We might finance acquisition activity with available cash, the issuance of stock, or with additional debt, depending upon the size and nature of any such transaction and upon conditions in the capital markets. ACQUISITION OF TRADE NAMES AND LICENSES On October 21, 2002, we acquired from The Procter & Gamble Company the right to sell products under six trade names. We acquired all rights to the trademarks, formulas, and production processes for four of the six trade names; Ammens(R), Vitalis(R), Condition 3-in-1(R), and Final Net(R). The Procter & Gamble Company assigned to us its rights under licenses to sell products bearing the other two trade names; Sea Breeze(R) and Vitapointe(R). The Sea Breeze(R) license is perpetual. The portion of the purchase price assigned to the four trademarks purchased is included in our consolidated balance sheet as of February 28, 2003 on the line entitled "Trademarks, net of accumulated amortization." We have concluded that the useful economic lives of these trademarks are indefinite, meaning that they are not subject to amortization. This conclusion was reached after consideration of the history of the brands and of our 19 plans and forecasts for sales of products under these trademarks. The portion of the purchase price assigned to the rights obtained under the Sea Breeze(R) and Vitapointe(R) licenses appears on our consolidated balance sheet as of February 28, 2003 on the line entitled "License agreements, at cost less accumulated amortization." After consideration of the fact that the Sea Breeze(R) license is perpetual and an analysis of the history of the brand as well as our plans and forecasts with respect to the brand, we determined that the Sea Breeze(R) license has an indefinite economic useful life. Therefore it is not subject to amortization. The Vitapointe(R) license expires on December 31, 2010. Although, our long-range expectation is to renew this license upon its expiration, we determined that the finite nature of this license indicates that it has a definite life and is, therefore subject to amortization. We expect annual amortization expense associated with the Vitapointe(R) license to be approximately $125,000. TRADEMARK LICENSE AGREEMENT RENEWAL During December 2002, we signed a new agreement with The Procter & Gamble Company to sell appliances and combs, hair brushes, and accessories using the Vidal Sassoon trade name. The agreement allows us to sell products under the Vidal Sassoon trade name worldwide except in Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, The Philippines, Singapore, Taiwan, and Thailand. In connection with the new agreement, we paid a $2,000,000 non-refundable licensing fee, which we will amortize over the agreement's initial term, January 2003 through December 2012. In addition, we are obligated under the agreement to pay royalties on a quarterly basis. We also have options to extend the agreement for two additional ten-year periods. NON-MONETARY TRANSACTIONS During fiscal 2003, we entered into two non-monetary transactions in which we exchanged inventory with a net book value of approximately $3,100,000 for advertising credits. As a result of these transactions, we recorded both sales and cost of goods sold equal to the exchanged inventory's net book value. We used approximately $600,000 of the advertising credits during fiscal 2003 and expect to use the remaining advertising credits by February 28, 2004. The remaining credits are valued at $2,500,000 on our Consolidated Balance Sheet at February 28, 2003 and are included in the line item entitled "Prepaid Assets." CRITICAL ACCOUNTING POLICIES The U.S. Securities and Exchange Commission defines critical accounting policies as "those that are both most important to the portrayal of a company's financial condition and results, and require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain." Preparation of our financial statements involves the application of several such policies. These policies include: consolidation of Tactica International, Inc. ("Tactica") under the purchase method, estimates of our exposure to liability for income taxes in Hong Kong, estimates of credits to be issued to customers for sales that have already been recorded, the calculation of our allowance for doubtful accounts, and the valuation of inventory on a lower-of-cost-or-market basis. Consolidation of Tactica - In March 2000 (fiscal 2001), we acquired a 55 percent interest in Tactica. At that time, we determined that use of the purchase method of accounting and consolidation was appropriate and we continue to use that method of consolidation. Because Tactica had accumulated a net deficit at the time that we acquired our interest in it and because the minority shareholders of Tactica have not adequately guaranteed their portion of the accumulated deficit, our Consolidated Statements of Income for fiscal 2003, 2002 and 2001 include 100 percent of Tactica's net income or loss. We will continue to recognize all of Tactica's net income or loss until such time as Tactica's accumulated deficit is extinguished. Hong Kong Income Taxes - The Inland Revenue Department ("the IRD") in Hong Kong assessed tax on certain profits of the Company's foreign subsidiaries for the fiscal years 1990 through 1997. During fiscal 2003, we came to an agreement with the IRD, settling its assessment for fiscal 1990 through 1994 for approximately 56 percent of the amount originally assessed. The ultimate resolution of the remaining IRD claims cannot be 20 predicted with certainty. However, we have recorded a liability for the IRD's claims, based on consultations with outside Hong Kong tax experts as to the probability that some or all of the IRD's claims prevail. Such liability is included in "Income taxes payable" on the Consolidated Balance Sheets. If the IRD's position were to prevail and it were to assert the same position with respect to fiscal years after 1997, the resulting tax liability could total $34,101,000 (U.S.) for the period from fiscal 1995 through fiscal 2003. Estimates of credits to be issued to customers - We regularly receive requests for credits from retailers for returned products or in connection with sales incentives, such as cooperative advertising and volume rebate agreements. We reduce sales or increase selling, general, and administrative expenses, depending on the nature of the credits, for estimated future credits to customers. Our estimates of these amounts are based either on historical information about credits issued, relative to total sales, or on specific knowledge of incentives offered to retailers. Valuation of inventory - We account for our inventory using a first-in-first-out system in which we record inventory on our balance sheet at the lower of its cost or its net realizable value. Determination of net realizable value requires management to estimate the point in time at which an item's net realizable value drops below its cost. We regularly review our inventory for slow-moving items and for items that we are unable to sell at prices above their original cost. When we identify such an item, we reduce its book value to the net amount that we expect to realize upon its sale. This process entails a significant amount of inherent subjectivity and uncertainty. Carrying value of long-lived assets - We apply the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") and Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144") in assessing the carrying values of our long-lived assets. SFAS 142 and SFAS 144 both require that a company consider whether circumstances or conditions exist that suggest that the carrying value of a long-lived asset might be impaired. If such circumstances or conditions exist, further steps are required in order to determine whether the carrying value of the asset exceeds its fair market value. If analyses indicate that the asset's carrying value does exceed its fair market value, the next step is to record a loss equal to the excess of the asset's carrying value over its fair value. The steps required by SFAS 142 and SFAS 144 entail significant amounts of judgment and subjectivity. We did not record any charges for impairment of long-lived assets during fiscal 2003. Economic useful life of intangible assets - We apply Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") in determining the useful economic lives of intangible assets that we acquire and that we report on our consolidated balance sheets. SFAS 142 requires that companies amortize intangible assets, such as licenses and trademarks, over their economic useful lives, unless those assets' economic useful lives are indefinite. If an intangible asset's economic useful life is deemed to be indefinite, that asset is not amortized. When we acquire an intangible asset, we consider factors such as the asset's history, our plans for that asset, and the market for products associated with the asset. We consider these same factors when reviewing the economic useful lives of our previously acquired intangible assets as well. We review the economic useful lives of our intangible assets at least annually. The determination of the economic useful life of an intangible asset requires a significant amount of judgment and entails significant subjectivity and uncertainty. In addition to the above policies, several other policies, including policies governing the timing of revenue recognition, are important to the preparation of our financial statements, but do not meet the definition of critical accounting policies because they do not involve subjective or complex judgments. 21 RISK FACTORS OUR FINANCIAL POSITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED BY CHANGES IN TAX LAWS. Currently, we benefit from an international corporate structure that produces relatively low tax effective tax rates on a consolidated basis. If we were to encounter changes in the rates or rules imposed by certain key taxing jurisdictions, such changes could have a material adverse effect on the Company's financial position and profitability. In 1994, we engaged in a corporate restructuring that, among other things, resulted in a greater portion of our income 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 adversely affect our U.S. federal income tax status. In addition to the legislation introduced in Congress, the U.S. Treasury Department has 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 corporate structure. If this were to occur, 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 MATERIAL AMOUNTS IN THE FUTURE. The Hong Kong Inland Revenue Department ("the IRD") assessed $6,753,000 in tax on certain profits of our foreign subsidiaries for the fiscal years 1995 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 1995 through 1997, we were required to purchase $3,282,000 (U.S.) in tax reserve certificates in Hong Kong, which represented approximately 49% 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 IRD also assessed $4,468,000 in tax on certain profits of our foreign subsidiaries for fiscal 1990 through 1994. During the second quarter of fiscal 2003, the Company and the IRD agreed on a settlement for fiscal years 1990 through 1994. 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. In addition to the tax reserve certificates discussed above, we previously purchased $2,468,000 in tax reserve certificates in connection with the IRD's assessment for 1990 through 1994. We were able to apply these reserve certificates to amounts due under the settlement. We 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 $34,101,000 (U.S.) for the period from fiscal 1995 through fiscal 2003. 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. However, such provisions do not reserve for the full 22 amount of such contingency and if the IRD's position was to prevail the Company's financial condition and future results of operations could be materially adversely affected. A FEW CUSTOMERS ACCOUNT FOR A SUBSTANTIAL PERCENTAGE OF OUR SALES. OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD SUFFER IF WE LOST ALL OR A PORTION OF THE SALES TO THESE CUSTOMERS. We are dependent on certain principal customers. Wal-Mart Stores, Inc. and its affiliate, SAM'S Club accounted for approximately 24 percent of the Company's net sales in fiscal 2003. Our top three customers accounted for approximately 36 percent of fiscal 2003 net sales. Although we have long-standing relationships with our 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 ARE VERY VOLATILE. ACCORDINGLY, OUR FINANCIAL CONDITION COULD BE ADVERSELY AFFECTED AND THE RESULTS OF OPERATIONS COULD FLUCTUATE MATERIALLY. Tactica's net sales increased by approximately 353 percent from fiscal 2001 and fiscal 2002 and decreased by approximately 27 percent from fiscal 2002 to fiscal 2003. Tactica's net sales comprised approximately 17 percent and 24 percent of the Company's consolidated net sales during fiscal 2003 and 2002, respectively. Tactica sells some products that have short life cycles. Furthermore, Tactica relies on television infomercials and direct response marketing campaigns for the marketing of some of its products. Accordingly, Tactica's sales could continue to be more volatile than the sales of our other two segments. Our financial position could be adversely affected and the results of operations could fluctuate materially because of the volatility of sales of Tactica products. ONE OF OUR SUBSIDIARIES IS SUBJECT TO A STOCKHOLDERS' AGREEMENT WITH THE FORMER STOCKHOLDERS OF TACTICA. UNDER THE TERMS OF THE STOCKHOLDERS' AGREEMENT, UNDER CERTAIN CIRCUMSTANCES WE COULD BE REQUIRED TO BUY THE REMAINING OUTSTANDING SHARES OF TACTICA OR SELL OUR TACTICA SHARES TO A THIRD PARTY. THE COMPANY'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE NEGATIVELY AFFECTED IF IT WAS FORCED TO CHANGE ITS OWNERSHIP POSITION IN TACTICA. 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 results of operations could be adversely affected. WE ARE DEPENDENT ON THIRD PARTY MANUFACTURERS, MOST OF WHICH ARE IN THE FAR EAST. CHANGES IN FOREIGN POLICY, INTERNATIONAL LAW OR THE INTERNAL LAWS OF THE COUNTRIES WHERE OUR MANUFACTURERS ARE LOCATED COULD HAVE A MATERIAL NEGATIVE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 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. 23 THE RECENT OUTBREAK OF SEVERE ACUTE RESPIRATORY SYNDROME ("SARS") COULD DISRUPT THE FLOW OF FINISHED GOODS THAT WE PURCHASE AND RE-SELL. Our subsidiary in Hong Kong assists in the procurement of a large portion of the products that we sell. Many of these products are produced in South China. SARS has been most prevalent in these two regions. Should a SARS outbreak interfere with the operations of the third party factories from whom we purchase product or should it interfere with the operation of our office in Hong Kong, we might experience a shortage of inventory. This type of shortage could have a material negative effect on our financial position, results of operations, and cash flow. Thus far, SARS has had no effect on our business. OUR INDUSTRY IS EXTREMELY COMPETITIVE. OUR BUSINESS WILL SUFFER IF WE DO NOT DEVELOP AND COMPETITIVELY MARKET PRODUCTS THAT APPEAL TO CONSUMERS. The personal care and comfort products industry is extremely competitive. Maintaining and gaining market share depends heavily upon price, quality, brand name recognition, patents, innovative designs of new products and replacement models, and marketing and distribution approaches. We compete with domestic and international companies, some of which have substantially greater financial and other resources than those of the Company. We believe that our ability to produce reliable products that incorporate developments in technology and to satisfy consumer tastes with respect to style and design, as well as our ability to market a broad offering of products in each applicable category at competitive prices, are keys to our future success. No assurance can be given that we will be able to successfully compete on the basis of these factors in the future. WE ARE MATERIALLY DEPENDENT ON OUR LICENSED TRADEMARKS AS A SUBSTANTIAL PORTION OF OUR SALES REVENUE COMES FROM SELLING PRODUCTS UNDER LICENSED TRADEMARKS. OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED IF WE ARE UNABLE TO SELL PRODUCTS UNDER THESE TRADEMARKS. A substantial portion of our sales revenue is derived from sales of products under licensed trademarks. As a result, we are materially dependent upon the continued use of such trademarks, particularly the Vidal 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 or the value of the trademarks were diminished by the licensor or third parties, the effect on our business, financial condition and results of operations could be both negative and material. OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS WILL SUFFER IF WE DO NOT ACCURATELY FORECAST OUR CUSTOMERS' DEMANDS. Because of our reliance 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 amount of inventory 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. OUR FUTURE ACQUISITIONS, IF ANY, AND NEW PRODUCTS MAY NOT BE SUCCESSFUL, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 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 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 24 may carry unexpected liabilities. Each of these factors could result in a newly acquired business or product line having a material negative impact on our financial condition and results of operations. INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS Certain written and oral statements made by our Company and subsidiaries or with the approval of an authorized executive officer of our Company 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, 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. The Company cautions 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. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Factors that could cause actual results to differ from those anticipated include the factors discussed above in the section entitled "Risk Factors" and other risks described from time to time in the Company's reports to the Securities and Exchange Commission, including this report. NEW ACCOUNTING GUIDANCE As explained in Note 1 to the consolidated condensed financial statements, on March 1, 2002, we adopted EITF 01-9 "Vendor Income Statement Characterization of Consideration Paid to a Reseller of a Vendor's Products." Our adoption of EITF 01-9 in fiscal 2003 had no effect on operating income, net earnings, or earnings per share. The following table presents the impact of EITF 01-9 on net sales and SG&A had the standard been in effect for all fiscal years during the three-year period ending February 28, 2003.
(in thousands) FISCAL YEAR ENDED FEBRUARY 28, 2003 2002 2001 ------------ ------------ ------------ Net sales prior to application of EITF 01-9 $ 462,563 $ 451,249 $ 361,398 ------------ ------------ ------------ Adjustments: Slotting fees (861) (1,607) (1,275) Cooperative advertising arrangements (2,877) (2,323) (2,959) ------------ ------------ ------------ Net adjustments (3,738) (3,930) (4,234) ------------ ------------ ------------ Net sales as reported herein $ 458,825 $ 447,319 $ 357,164 ============ ============ ============ SG&A prior to application of EITF 01-9 $ 161,910 $ 170,733 $ 117,872 ------------ ------------ ------------ Adjustments: Slotting fees (861) (1,607) (1,275) Cooperative advertising arrangements (2,877) (2,323) (2,959) ------------ ------------ ------------ Net adjustments (3,738) (3,930) (4,234) ------------ ------------ ------------ SG&A as reported herein $ 158,172 $ 166,803 $ 113,638 ============ ============ ============
In June 2001, the Financial Accounting Standards ("FASB") issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). The Company adopted SFAS 142 on March 1, 2002. SFAS 142 eliminates the amortization of goodwill and other intangible assets that have indefinite useful lives. Amortization will continue to be recorded for intangible assets with definite useful lives. SFAS 142 also requires at least an annual impairment review of goodwill and other intangible assets. Any asset deemed to be impaired is to be written down to its fair value. We completed reviews of our goodwill to determine whether any of that goodwill was impaired. Based on the results of these reviews, we concluded that our goodwill was not impaired as of March 1, 2002 or March 1, 2003. Therefore, we incurred no impairment charge as a result of the adoption of SFAS 142. Because it eliminates the amortization of goodwill, SFAS 142 decreased our SG&A expense by $2,035,000 for the fiscal year ended February 28, 2003. 25 The following tables present the impact of SFAS 142 on net earnings and earnings per share had the standard been in effect for the fiscal years ended February 28, 2003, 2002 and 2001. (In thousands, except per-share amounts):
YEARS ENDED FEBRUARY 28, (in thousands, except per share amounts) 2003 2002 2001 ------------ ------------ ------------ Reported net earnings $ 38,716 $ 29,215 $ 17,332 Adjustments: Amortization of Goodwill -- 2,035 2,025 Income tax effect -- (407) (405) ------------ ------------ ------------ Net adjustments -- 1,628 1,620 ------------ ------------ ------------ Adjusted net earnings $ 38,716 $ 30,843 $ 18,952 ============ ============ ============ Reported earnings per share - basic $ 1.37 $ 1.04 $ .61 Adjusted earnings per share - basic $ 1.37 $ 1.10 $ .67 Reported earnings per share - diluted $ 1.31 $ 1.00 $ .60 Adjusted earnings per share - diluted $ 1.31 $ 1.06 $ .66
In June 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141"). SFAS 141 requires all business combinations to be accounted for using the purchase method and requires the recognition of intangible assets apart from goodwill if they arise from contractual or legal rights or if they are separable from goodwill. SFAS 141 applies to all business combinations initiated after June 30, 2001. We did not enter into any transactions during fiscal 2003 that required the application of SFAS 141. Our fiscal 2003 purchase from The Procter & Gamble Company of four brand names and rights under licenses for two additional brand names was a purchase of specific assets, rather than a business combination. In June 2001, the FASB issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS 143 requires that legal obligations associated with the retirement of an asset be recorded as liabilities as incurred and capitalized as part of the cost of the associated asset. These obligations are then depreciated over the course of the asset's useful life. We believe that SFAS 143 will have no effect on our consolidated financial statements. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment of Long-Lived Assets" ("SFAS 144"). We adopted the provisions of SFAS 144 effective March 1, 2002. SFAS 144 requires that companies consider whether indicators are present that would indicate impairment of any of their long-lived assets. If such indicators are present the company compares the projected future undiscounted cash flows from the asset to its book value. If the cash flows exceed the book value, no further action is necessary. If the book value exceeds the projected undiscounted cash flows, a loss is recognized for the excess of the asset's book value over its fair value. SFAS 144 did not affect our consolidated financial statements as of or for the year ending February 28, 2003. In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" ("SFAS 148"). This statement amends Statement of Financial Accounting Standards No. 123, "Accounting For Stock-Based Compensation" ("SFAS 123") by providing alternative methods of transition to the fair-value-based method of accounting for stock-based employee compensation. It also amends the disclosure requirements of SFAS No. 123 to require prominent disclosures of stock compensation information, including the method used to account for stock-based compensation and the effects of that method on reported financial results in interim, as well as annual, financial statements. We account for stock-based compensation using the intrinsic value method in accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." We recognize no compensation expense in our financial statements for 26 stock options issued with exercise prices that equal or exceed the cost of our common stock on the date such options are issued. As a result, we do not expect the provisions of SFAS 148 covering the transition to fair-value method accounting for stock-based compensation to affect our financial statements. We make the disclosures required by SFAS 148 in Note (7) to our consolidated financial statements. Beginning with our financial statements as of and for the three months ended May 31, 2003, we will make the interim disclosures required by SFAS 148. In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 requires that a guarantor record a liability for and disclose certain types of guarantees. For certain other guarantees, FIN 45 requires only disclosure in the notes to the financial statements. We have not made any of the types of guarantees for which FIN 45 requires that a liability be recorded. However, certain entities whose financial statements are a part of our consolidated financial statements have guaranteed obligations of other entities within our consolidated group. FIN 45 requires disclosure of these guarantees and of our product warranties. These disclosures are contained in the notes to our consolidated financial statements. In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"). FIN 46 requires that a company with an interest in a variable interest entity include such an entity in its consolidated financial statements if its financial interest in the entity indicates control. The statement applies immediately to interests in all variable interest entities acquired after January 1, 2003. For other variable interest entities, FIN is to be applied effective July 1, 2003. We have no interests in entities covered by FIN 46. Therefore, we do not expect FIN 46 to affect our consolidated financial statements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Changes in interest rates and currency exchange rates represent our primary financial market risks. Fluctuation in interest rates causes variation in the amount of interest that we can earn on our available cash. Interest on our long-term debt is fixed at rates ranging from 7.01 percent to 7.24 percent. Increases in interest rates do not expose us to risk on this debt. However, as interest rates drop below the rates on our long-term debt, our interest cost can exceed the cost of capital of companies who borrow at lower rates of interest. As mentioned in the "Liquidity and Capital Resources" discussion, interest rates on our revolving credit agreement vary based on the three-month LIBOR rate and on our ratio of debt to EBITDA. Therefore, the potential for interest rate increases exposes us to interest rate risk on our revolving credit agreement. That agreement allows maximum borrowings of $25,000,000. At the end of fiscal 2003, no borrowings were outstanding under this agreement. However, if the need to borrow under the revolving credit agreement were to arise, higher interest rates would increase the cost of such debt. We do not currently hedge against interest rate risk. Because we purchase a substantial majority of our inventory using U.S. dollars, we are subject to minimal short-term foreign exchange rate risk in purchasing inventory. However long-term declines in the value of the U.S. dollar could subject us to higher inventory costs. Such an increase in inventory costs could occur if foreign vendors were to react to such a decline by raising prices. Sales in countries other than the United Kingdom, Germany, and France are transacted in U.S. dollars. Our sales in the United Kingdom are transacted in British pounds and our sales in France and Germany are invoiced in Euros. When the U.S. dollar strengthens against other currencies in which we transact sales, we are exposed to foreign exchange losses on those sales because our foreign currency sales prices are not adjusted for currency fluctuations. When the U.S. dollar weakens against those currencies, we could realize foreign currency gains. In fiscal 2003, our net sales denominated originally in currencies other than the U.S. dollar totaled approximately $43,366,000, converted at average monthly exchange rates. Our fiscal 2003 foreign currency exchange gains totaled $1,638,000. During fiscal 2003, we began hedging against foreign currency exchange rate risk by entering into forward contracts to exchange a total of 5,000,000 British pounds for U.S. dollars at rates ranging from 1.5393 to 1.548 dollars per British pound. At February 28, 2003, one forward contract to exchange 1,000,000 British pounds for U.S. dollars at a rate of 1.5393 U.S. dollars per British pound remained outstanding. We expect to enter into additional forward contracts to hedge foreign currency risk up to one year in advance in the future. 27 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Page ---- Independent Auditors' Report 29 Consolidated Financial Statements: Consolidated Balance Sheets as of February 28, 2003 and 2002 30 Consolidated Statements of Income for each of the years in the three-year period ended February 28, 2003 32 Consolidated Statements of Stockholders' Equity for each of the years in the three-year period ended February 28, 2003 33 Consolidated Statements of Cash Flows for each of the years in the three-year period ended February 28, 2003 34 Notes to Consolidated Financial Statements 36 Financial Statement Schedule - Schedule II - Valuation and Qualifying Accounts for each of the years in the three-year period ended February 28, 2003 58
All other schedules are omitted as the required information is included in the consolidated financial statements or is not applicable. 28 INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders Helen of Troy Limited: We have audited the consolidated financial statements of Helen of Troy Limited and subsidiaries (the Company) as listed in the index on page 28. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the index on page 28. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Helen of Troy Limited and subsidiaries as of February 28, 2003 and February 28, 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended February 28, 2003, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth thereon. As discussed in Note (1) to the consolidated financial statements, effective March 1, 2002, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." /s/ KPMG LLP El Paso, Texas May 13, 2003 29 HELEN OF TROY LIMITED AND SUBSIDIARIES Consolidated Balance Sheets February 28, 2003 and 2002 (in thousands, except par value and shares)
2003 2002 ------------ ------------ Assets Current assets: Cash and cash equivalents $ 47,837 $ 64,293 Trading securities, at market value 1,442 145 Receivables - principally trade, less allowance of $5,107 in 2003 and $5,794 in 2002 61,990 69,943 Inventories 111,966 100,306 Prepaid expenses 8,454 3,256 Deferred income tax benefits 3,147 5,727 ------------ ------------ Total current assets 234,836 243,670 Property and equipment, at cost less accumulated depreciation of $14,302 in 2003 and $11,998 in 2002 63,082 45,716 Goodwill, net of accumulated amortization of $8,629 in 2003 and 2002 40,767 40,767 Trademarks at cost, net of accumulated amortization of $211 in 2003 and $188 in 2002 17,048 151 License agreements, at cost less accumulated amortization of $10,194 in 2003 and $8,888 in 2002 27,372 6,678 Other assets 22,524 20,576 ------------ ------------ $ 405,629 $ 357,558 ============ ============
(Continued) 30 HELEN OF TROY LIMITED AND SUBSIDIARIES Consolidated Balance Sheets February 28, 2003 and 2002 (in thousands, except par value and shares)
2003 2002 ------------ ------------ Liabilities and Stockholders' Equity Current liabilities Accounts payable, principally trade $ 19,613 $ 11,549 Accrued expenses: Advertising and promotional 5,662 5,183 Other 16,802 15,369 Income taxes payable 18,950 20,131 ------------ ------------ Total current liabilities 61,027 52,232 Long-term debt 55,000 55,000 ------------ ------------ Total liabilities 116,027 107,232 ------------ ------------ Stockholders' equity Cumulative preferred stock, non-voting, $1.00 par value. Authorized 2,000,000 shares; none issued -- -- Common stock, $.10 par value. Authorized 50,000,000 shares; 28,202,495 and 28,196,517 shares issued and outstanding at February 28, 2003 and 2002, respectively 2,820 2,820 Additional paid-in-capital 53,984 53,424 Retained earnings 233,774 195,474 Minority interest in deficit of acquired subsidiary (976) (1,392) ------------ ------------ Total stockholders' equity 289,602 250,326 ------------ ------------ Commitments and contingencies $ 405,629 $ 357,558 ============ ============
See accompanying notes to consolidated financial statements. 31 HELEN OF TROY LIMITED AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except shares and earnings per share)
Years Ended February 28, ------------------------------------------------ 2003 2002 2001 ------------ ------------ ------------ Net sales $ 458,825 $ 447,319 $ 357,164 Cost of sales 247,794 238,859 220,530 ------------ ------------ ------------ Gross profit 211,031 208,460 136,634 Selling, general, and administrative expenses 158,172 166,803 113,638 ------------ ------------ ------------ Operating income 52,859 41,657 22,996 ------------ ------------ ------------ Other income (expense): Interest expense (3,965) (4,256) (3,989) Other income, net 1,852 1,146 1,883 ------------ ------------ ------------ Total other income (expense) (2,113) (3,110) (2,106) ------------ ------------ ------------ Earnings before income taxes 50,746 38,547 20,890 Income tax expense 12,030 9,332 3,558 ------------ ------------ ------------ Net earnings $ 38,716 $ 29,215 $ 17,332 ============ ============ ============ Earnings per share: Basic $ 1.37 $ 1.04 $ .61 Diluted $ 1.31 $ 1.00 $ .60 Weighted average number of common shares used in computing net earnings per share Basic 28,188,747 28,089,072 28,420,073 Diluted 29,547,845 29,198,972 28,728,762
See accompanying notes to consolidated financial statements. 32 HELEN OF TROY LIMITED AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity Years ended February 28, 2003, 2002, and 2001 (in thousands)
Minority Interest in Additional Deficit of Total Common Paid-In Retained Acquired Stockholders' Stock Capital Earnings Subsidiary Equity ------------ ------------ ------------ ------------ ------------- Balances, February 29, 2000 $ 2,884 $ 53,494 $ 153,246 $ -- $ 209,624 Exercise of common stock options, net 1 52 -- -- 53 Issuance of common stock in connection with employee stock purchase plan 3 168 -- -- 171 Acquisition and retirement of common stock (82) (1,508) (3,033) -- (4,623) Minority interest in deficit of acquired subsidiary at date of acquisition -- -- -- (2,948) (2,948) Net earnings -- -- 19,290 (1,958) 17,332 ------------ ------------ ------------ ------------ ------------ Balances February 28, 2001 2,806 52,206 169,503 (4,906) 219,609 Exercise of common stock options, net 10 710 -- -- 720 Issuance of common stock in connection with employee stock purchase plan 4 178 -- -- 182 Capital contribution to subsidiary by minority shareholder -- 330 -- 270 600 Net earnings -- -- 25,971 3,244 29,215 ------------ ------------ ------------ ------------ ------------ Balances February 28, 2002 2,820 53,424 195,474 (1,392) 250,326 Exercise of common stock options, net 3 336 -- -- 339 Issuance of common stock in connection with employee stock purchase plan 2 219 -- -- 221 Cancellation of stock recovered from escrow (5) 5 -- -- -- Net earnings -- -- 38,300 416 38,716 ------------ ------------ ------------ ------------ ------------ Balances February 28, 2003 $ 2,820 $ 53,984 $ 233,774 $ (976) $ 289,602 ============ ============ ============ ============ ============
See accompanying notes to consolidated financial statements. 33 HELEN OF TROY LIMITED AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands)
Years Ended February 28, ------------------------------------------------ 2003 2002 2001 ------------ ------------ ------------ Cash flows from operating activities: Net earnings $ 38,716 $ 29,215 $ 17,332 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 6,558 8,630 8,137 Provision for doubtful receivables (693) 2,153 1,003 Deferred taxes, net 2,580 1,391 (2,148) Purchases of trading securities (3,487) (431) (1,579) Proceeds from sales of trading securities 2,258 2,407 2,006 Realized gain - trading securities (157) (777) (688) Unrealized (gain) loss - trading securities 90 612 (701) Prepayment of royalties (11,500) -- -- Proceeds from sales of property, plant, and equipment -- 43 -- Loss (gain) on disposal of property, plant and equipment (58) 17 -- Impairment of asset held for sale -- -- 158 Other non-cash adjustments to earnings -- -- 2,457 Changes in operating assets and liabilities: Accounts receivable 8,646 (7,786) (12,053) Inventory (11,660) 18,238 (20,011) Prepaid expenses (1,937) (740) 1,483 Accounts payable 8,064 (9,454) 8,240 Accrued expenses 1,878 7,108 (8,892) Other assets 5,396 -- -- Income taxes payable (1,181) 2,006 5,071 ------------ ------------ ------------ Net cash provided (used) by operating activities 43,513 52,632 (185) ------------ ------------ ------------ Cash flows from investing activities: Capital and license expenditures (42,865) (878) (3,185) Purchase of trademarks (16,920) -- -- Retirements of property and equipment 536 Cash paid for acquisitions, net of cash acquired -- -- (2,205) Increase in other assets (1,280) (4,900) (7,904) ------------ ------------ ------------ Net cash used by investing activities (60,529) (5,778) (13,294) ------------ ------------ ------------
(Continued) 34 HELEN OF TROY LIMITED AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands)
Years Ended February 28, ------------------------------------------------ 2003 2002 2001 ------------ ------------ ------------ Cash flows from financing activities: Net proceeds from (payments on) short-term borrowings -- (10,000) 10,000 Payments on long-term debt -- -- (450) Capital contribution to subsidiary by minority shareholder -- 600 -- Proceeds from exercise of stock options, net 560 902 224 Common stock repurchases -- -- (4,623) ------------ ------------ ------------ Net cash provided by (used in) financing activities 560 (8,498) 5,151 ------------ ------------ ------------ Net increase (decrease) in cash and cash equivalents (16,456) 38,356 (8,328) Cash and cash equivalents, beginning of year 64,293 25,937 34,265 ------------ ------------ ------------ Cash and cash equivalents, end of year $ 47,837 $ 64,293 $ 25,937 ============ ============ ============ Supplemental cash flow disclosures: Interest paid $ 3,890 $ 4,278 $ 3,982 Income taxes paid (net of refunds) $ 10,068 $ 5,776 $ 1,015
See accompanying notes to consolidated financial statements. 35 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) General Helen of Troy Limited, a Bermuda company, and its subsidiaries ("the Company") design, develop, import, and distribute hair care appliances, hair brushes, combs, hair accessories, hair and skin care liquids and powders, and other personal care products. The Company purchases its products from unaffiliated manufacturers most of which are located in the People's Republic of China, Thailand, Taiwan, and South Korea. The consolidated financial statements are prepared in U.S. dollars and in accordance with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. (b) Consolidation The consolidated financial statements include the accounts of Helen of Troy Limited and its subsidiaries, including Tactica International, Inc. ("Tactica"), a subsidiary in which the Company acquired a 55 percent interest in fiscal 2001. The Company's consolidated net income includes and will continue to include 100 percent of Tactica's net income or loss until such time as the minority interest in Tactica's accumulated deficit has been extinguished. Intercompany balances and transactions have been eliminated in consolidation. (c) Revenue recognition Sales are recognized when revenue is realized or realizable and has been earned. Sales and shipping terms vary among customers, and, as such, revenue is recognized when risk and title to the product transfer to the customer. Net sales is comprised of gross revenues less estimates of expected returns, trade discounts, and customer allowances, which include incentives such as cooperative advertising agreements and off-invoice markdowns. Such deductions are recorded and/or amortized during the period the related revenue is recognized. (d) Consideration paid to customers The Company offers certain incentives in the form of cooperative advertising arrangements, volume rebates, product markdown allowances, trade discounts, cash discounts, and slotting fees to customers who purchase its products. The Company accounts for these types of incentives in accordance with Emerging Issues Task Force Issue No. 01-9, "Accounting for Consideration Given by a Vendor to a Customer" ("EITF 01-9"). In instances where the customer is required to provide the Company with proof of performance, reductions in amounts received from customers as a result of cooperative advertising programs are included in the Consolidated Statement of Income on the line entitled "Selling, general, and administrative expenses" ("SG&A"). Other reductions in amounts received from customers as a result of cooperative advertising programs are recorded as reductions of net sales. Markdown allowances, slotting fees, trade discounts, cash discounts, and volume rebates are all recorded as reductions of net sales. After the implementation of EITF 01-9 customer incentives recorded as part of SG&A totaled $14,942,000, $12,261,000, and $12,390,000, respectively, for the fiscal years ended February 28, 2003, 2002, and 2001. 36 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED (e) Inventories and cost of sales The Company's inventories consist almost entirely of finished goods. The Company accounts for its inventory using a first-in-first-out system in which it records inventory on its balance sheet at the lower of its cost or its net realizable value. A product's cost is comprised of the amount that the Company pays a manufacturer for the product, tariffs and duties associated with transporting the product across national borders, freight costs associated with transporting the product from its shipping point to the Company's warehouse locations, and selling, general, and administrative ("SG&A") expenses attributable directly to the procurement of inventory. SG&A expenses attributable directly to the procurement of inventory include the expenses associated with operating the Company's Hong Kong sourcing facility, expenses associated with production forecasting, and certain expenses incurred in designing products and packaging. The Company charged $10,195,000, $9,608,000 and $10,074,000 of SG&A expenses to inventory during the fiscal years ended February 28, 2003, 2002, and 2001, respectively. The Company estimates that $4,493,000 and $4,332,000 of its inventory balances at February 28, 2003 and 2002, respectively, consisted of SG&A expenses charged to inventory. Net realizable value is based on the Company's estimate of future selling prices, less estimated disposal costs. The "Cost of sales" line item on the Consolidated Statements of Income is comprised of the book value (lower of cost or net realizable value) of inventory sold to customers during the reporting period. (f) Shipping and handling revenues and expenses The Company reports revenue from shipping and handling charges on the "Net sales" line of its Consolidated Statements of Income, in accordance with paragraph 5 of Emerging Issues Task Force Issue 00-10, "Accounting for Shipping and Handling Fees and Costs." The Company only includes charges for shipping and handling in "Net sales" in respect of sales to direct response customers and retail customers ordering relatively small dollar amounts of product. The Company's shipping and handling expenses far exceed its shipping and handling revenues. Shipping and handling expenses are included in our Consolidated Statements of Income on the line entitled "Selling, general, and administrative expenses." The Company's expenses for shipping and handling totaled $31,355,000, $32,495,000, and $21,670,000 during its fiscal years ended February 28, 2003, 2002, and 2001. (g) Valuation of accounts receivable The allowance for doubtful accounts reflects the Company's best estimate of probable losses, determined principally on the basis of historical experience and specific allowances for known troubled accounts. (h) Property and equipment Property and equipment are stated at cost. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets. Expenditures for repair and maintenance of property and equipment are expensed as incurred. (i) License agreements and Trademarks A substantial majority of the Company's sales are made subject to license agreements with the licensors of the Vidal Sassoon(R), Revlon(R), Sunbeam(R), and Dr. Scholl's(R) trademarks. License agreements are reported on the Company's Consolidated Balance Sheets at cost, less accumulated amortization. The cost of license agreements represents amounts paid to the licensor to acquire the license or to alter the terms of the license in a manner which the Company believes to be in its favor. Royalty payments are not included in the cost of license agreements. The Company amortizes the acquisition costs of the existing license agreements on a straight-line basis over the lives of the respective agreements. Net sales subject to license agreements comprised 59 percent, 56 percent, and 73 percent of total net sales for fiscal years 2003, 2002, and 2001, respectively. Royalty expense under the Company's license agreements is recognized as it is incurred and comprises part of the totals reported on the line item entitled "Selling, general, and administrative expenses" on our Consolidated Statements of Income. See Note (3) for more information on the Company's licenses. 37 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED The Company also sells products under trademarks that it owns. Trademarks that the Company acquires from other entities are reported, at the cost of acquiring the trademark, net of accumulated amortization, on the Company's Consolidated Balance Sheets. Costs associated with developing trademarks internally are recorded as expenses in the period incurred. The Company amortizes the costs of trademarks on a straight-line basis over the useful life of the trademark. See Note (3) for more information on the Company's trademarks. (j) Income taxes The Company uses the asset and liability method to account for income taxes. Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences between the book and tax bases of various assets and liabilities. Generally, deferred tax assets represent future income tax reductions while deferred tax liabilities represent income taxes that the Company expects to pay in the future. The Company measures deferred tax assets and liabilities using enacted tax rates for the years in which it expects that temporary differences will reverse or be settled. Changes in tax rates affect the carrying values of deferred tax assets and liabilities. The effects of tax rate changes are recognized in the periods in which they are enacted. (k) Earnings per share Basic earnings per share are computed based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed based upon the weighted average number of common shares plus the effects of potentially dilutive securities. The number of potentially dilutive securities was 1,359,098; 1,109,900; and 308,689 for fiscal years 2003, 2002, and 2001, respectively. Dilutive securities for the years ended February 28, 2003 and February 28, 2002 consisted entirely of stock options. Dilutive securities for the year ended February 28, 2001 included 258,084 attributable to dilutive stock options, as well as 50,605 contingently issuable as part of an acquisition. Options to purchase common stock that were outstanding but not included in the computation of earnings per share because the exercise prices of such options were greater than the average market price of the Company's common stock totaled 4,162,662; 2,794,900; and 4,319,762 for fiscal 2003, 2002, and 2001, respectively. (l) Cash equivalents The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents comprised $37,049,000 and $48,911,000 of the amount reported on the Company's consolidated balance sheets as "Cash and cash equivalents" at February 28, 2003 and 2002, respectively. The Company's cash equivalents consist of variable rate demand bonds that mature in 35 or fewer days. (m) Trading securities Trading securities consist of shares of common stock of several publicly traded companies and are stated on the Company's Consolidated Balance sheets at market value, as determined by the most recent trading price of each security as of the balance sheet date. Management determines the appropriate classification of the Company's investments when those investments are purchased and reevaluates those determinations at each balance sheet date. At February 28, 2003, the Company held its investments in equity securities of unaffiliated companies for the purpose of trading them in the near term. Therefore, all investments in equity securities are classified as trading securities and included in the "Current assets" section of the Company's Consolidated Balance Sheets. All unrealized gains and losses attributable to such securities are included in "Other income" on the Consolidated Statements of Income. The sum of unrealized and realized net gains attributable to trading securities totaled $67,000, $165,000, and $1,389,000 in fiscal 2003, 2002, and 2001, respectively. 38 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED (n) Foreign currency transactions and derivative financial instruments The U.S. dollar is the Company's functional currency. All of Helen of Troy Limited's non-U.S. subsidiaries' transactions involving other currencies have been re-measured in U.S. dollars using average exchange rates for the months in which the transactions occurred. Changes in exchange rates that affect cash flows and the related receivables or payables are included as part of the totals on our Consolidated Statements of Income on the line entitled "Selling, general, and administrative expenses" ("SG&A"). SG&A for fiscal 2003 and 2001, respectively, included reductions for foreign exchange gains of $1,638,000 and $31,000. SG&A for fiscal 2002 included a charge of $307,000 for foreign exchange losses. The Company periodically hedges foreign currency risk for up to one year by purchasing contracts to exchange foreign currencies for U.S. dollars at specified rates. The Company first entered into such contracts in fiscal 2003. See Note (13) to these consolidated financial statements for a further discussion of the Company's hedging activities. The Company's accounting for these contracts complies with Statement of Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). The contracts into which the Company entered in fiscal 2003 qualified as "effective hedges." Therefore, changes in their market value due to changes in exchange rates were recorded to selling, general, and administrative expenses. The contracts into which the Company entered were "effective hedges" according to the definition provided by SFAS 133. The Company's forward exchange contracts at February 28, 2003 had a negative value of $34,000. This amount is included in "Current Liabilities" section of the Company's Consolidated Balance Sheet as of February 28, 2003 as a component of the line entitled "Other." Since all of the cash flows hedged by the Company had been realized at February 28, 2003, the entire gain or loss attributable to the foreign exchange contracts appears on our Consolidated Statement of Income on the line entitled "Selling, general, and administrative expenses." The gain or loss related to foreign currency exchange contracts appears in our Consolidated Statements of Cash flows as a line item in the reconciliation of net earnings to cash flows from operations. (o) Advertising Advertising costs are expensed in the fiscal year in which they are incurred. During the fiscal years ended February 28, 2003, February 28, 2002 and February 28, 2001, the Company charged $45,917,000, $49,261,000, and $31,675,000, respectively, of advertising costs to selling, general, and administrative expenses. (p) Warranties The Company's products are under warranty against defects in material and workmanship for a maximum of two years. The Company has established an accrual of approximately $3,263,000 and $3,428,000 as of February 28, 2003 and February 28, 2002, respectively, to cover future warranty costs. The Company estimates its warranty accrual using historical trends. The Company believes that these trends are the most reliable method by which it can estimate its warranty liability. The following table summarizes the activity in the Company's accrual for the past three fiscal years: ACCRUAL FOR WARRANTY RETURNS (in thousands)
Reductions of accrual - FISCAL YEAR Beginning Additions to payments and ENDED FEBRUARY 28, balance accrual credits issued Ending balance ------------ ------------ -------------- -------------- 2003 $ 3,428 $ 12,408 $ 12,573 $ 3,263 2002 $ 2,946 $ 13,915 $ 13,433 $ 3,428 2001 $ 2,868 $ 11,314 $ 11,236 $ 2,946
39 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED (q) Carrying value of long-lived assets The Company applies the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") and Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144") in assessing the carrying values of its long-lived assets. SFAS 142 and SFAS 144 both require that a company consider whether circumstances or conditions exist that suggest that the carrying value of a long-lived asset might be impaired. If such circumstances or conditions exist, further steps are required in order to determine whether the carrying value of the asset exceeds its fair market value. If the analyses indicate that the asset's carrying value does exceed its fair market value, the next step is to record a loss equal to the excess of the asset's carrying value over its fair value. The steps required by SFAS 142 and SFAS 144 entail significant amounts of judgment and subjectivity. The Company did not record any charges for impairment of long-lived assets during fiscal 2003. Also see the subsection of this note entitled "New Accounting Guidance." (r) Economic useful lives and amortization of intangible assets The Company applies Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") in determining the useful economic lives of intangible assets that it acquires and that it reports on its Consolidated Balance Sheets. SFAS 142 requires that companies amortize intangible assets, such as licenses and trademarks, over their economic useful lives, unless those assets' economic useful lives are indefinite. If an intangible asset's economic useful life is deemed to be indefinite, that asset is not amortized. When the Company acquires an intangible asset, it considers factors such as the asset's history, the Company's plans for that asset, and the market for products associated with the asset. The Company considers these same factors when reviewing the economic useful lives of its existing intangible assets as well. The Company reviews the economic useful lives of its intangible assets at least annually. The determination of the economic useful life of an intangible asset requires a significant amount of judgment and entails significant subjectivity and uncertainty. Also see the subsection of this note entitled "New Accounting Guidance." Intangible assets consist primarily of goodwill, license agreements and trademarks. The Company amortizes intangible assets using the straight-line method over appropriate periods ranging from five to forty years. The Company recorded amortization of intangible assets totaling $1,329,000, $3,244,000, and $3,450,000 during fiscal 2003, 2002, and 2001, respectively. See Note (3) to these consolidated financial statements for more information about the Company's intangible assets. (s) Interest income Interest income is included in "Other income, net" on the Consolidated Statements of Income. Interest income totaled $1,410,000, $727,000, and $931,000 in fiscal 2003, 2002, and 2001, respectively. (t) Financial instruments The carrying amounts of cash and cash equivalents, receivables, accounts payable, accrued expenses and income taxes payable approximate fair value because of the short maturity of these items. See Note (5) for management's assessment of the fair value of the Company's guaranteed Senior Notes. The Company hedges a portion of its foreign exchange rate risk by entering into contracts to exchange foreign currencies for U.S. dollars at specified rates. The fair value of such contracts is determined in accordance with Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." See Note (13) for more information on the Company's hedging activities. 40 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED (u) Stock-based compensation plans Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," encourages, but does not require companies to record compensation expense for stock-based compensation plans at fair value. The Company has chosen to account for its stock-based compensation plans using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Accordingly, the Company recognizes no expense in connection with its stock-based compensation plans, as all stock option grants are made at market value on the date of grant. Income tax benefits attributable to stock options exercised are credited to Additional paid-in-capital. Disclosures about the Company's stock-based compensation plans are included in Note (7) to these consolidated financial statements. (v) New accounting guidance On March 1, 2002, the Company adopted EITF 01-9 "Vendor Income Statement Characterization of Consideration Paid to a Reseller of a Vendor's Products." The adoption of EITF 01-9 had no effect on operating income, net earnings, or earnings per share. The following table presents the impact of EITF 01-9 on net sales and SG&A had the standard been in effect for all fiscal years during the three-year period ending February 28, 2003.
YEARS ENDED FEBRUARY 28, (in thousands) 2003 2002 2001 ------------ ------------ ------------ Net sales prior to application of EITF 01-9 $ 462,563 $ 451,249 $ 361,398 ------------ ------------ ------------ Adjustments: Slotting fees (861) (1,607) (1,275) Cooperative advertising arrangements (2,877) (2,323) (2,959) ------------ ------------ ------------ Net adjustments (3,738) (3,930) (4,234) ------------ ------------ ------------ Net sales as reported herein $ 458,825 $ 447,319 $ 357,164 ============ ============ ============ SG&A prior to application of EITF 01-9 $ 161,910 $ 170,733 $ 117,872 ------------ ------------ ------------ Adjustments: Slotting fees (861) (1,607) (1,275) Cooperative advertising arrangements (2,877) (2,323) (2,959) ------------ ------------ ------------ Net adjustments (3,738) (3,930) (4,234) ------------ ------------ ------------ SG&A as reported herein $ 158,172 $ 166,803 $ 113,638 ============ ============ ============
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). The Company adopted SFAS 142 on March 1, 2002. SFAS 142 eliminates the amortization of goodwill and other intangible assets that have indefinite useful lives. Amortization will continue to be recorded for intangible assets with definite useful lives. SFAS 142 also requires at least an annual impairment review of goodwill and other intangible assets. Any asset deemed to be impaired is to be written down to its fair value. The Company completed reviews of its goodwill to determine whether any of that goodwill was impaired. Based on the results of these reviews, the Company's goodwill was not impaired as of March 1, 2002 or March 1, 2003. Therefore, it incurred no impairment charge as a result of the adoption of SFAS 142. Because it eliminates the amortization of goodwill, SFAS 142 decreased the Company's SG&A expense by $2,035,000 for the fiscal year ended February 28, 2003. 41 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED The following tables present the impact of SFAS 142 on net earnings and earnings per share had the standard been in effect for the fiscal years ended February 28, 2003, 2002 and 2001. (in thousands, except per-share amounts):
(in thousands, except per share amounts) YEARS ENDED FEBRUARY 28, 2003 2002 2001 ------------ ------------ ------------ Reported net earnings $ 38,716 $ 29,215 $ 17,332 Adjustments: Amortization of Goodwill -- 2,035 2,025 Income tax effect -- (407) (405) ------------ ------------ ------------ Net adjustments -- 1,628 1,620 ------------ ------------ ------------ Adjusted net earnings $ 38,716 $ 30,843 $ 18,952 ============ ============ ============ Reported earnings per share - basic $ 1.37 $ 1.04 $ .61 Adjusted earnings per share - basic $ 1.37 $ 1.10 $ .67 Reported earnings per share - diluted $ 1.31 $ 1.00 $ .60 Adjusted earnings per share - diluted $ 1.31 $ 1.06 $ .66
In June 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141"). SFAS 141 requires all business combinations to be accounted for using the purchase method and requires the recognition of intangible assets apart from goodwill if they arise from contractual or legal rights or if they are separable from goodwill. SFAS 141 applies to all business combinations initiated after June 30, 2001. The Company did not enter into any transactions during fiscal 2003 that required the application of SFAS 141. The Company's purchase from The Procter & Gamble Company of four brand names and rights under licenses for two additional brand names was a purchase of specific assets, rather than a business combination. In June 2001, the FASB issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS 143 requires that legal obligations associated with the retirement of an asset be recorded as liabilities as incurred and capitalized as part of the cost of the associated asset. These obligations are then depreciated over the course of the asset's useful life. The Company believes that SFAS 143 will have no effect on the Company's consolidated financial statements. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment of Long-Lived Assets" ("SFAS 144"). The Company adopted the provisions of SFAS 144 effective March 1, 2002. SFAS 144 requires that companies consider whether indicators are present that would indicate impairment of any of their long-lived assets. If such indicators are present the company compares the projected future undiscounted cash flows from the asset to its book value. If the cash flows exceed the book value, no further action is necessary. If the book value exceeds the projected undiscounted cash flows, a loss is recognized for the excess of the asset's book value over its fair value. SFAS 144 did not affect the Company's consolidated financial statements as of or for the year ending February 28, 2003. 42 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation -- Transition and Disclosure" ("SFAS 148"). This statement amends Statement of Financial Accounting Standards No. 123, "Accounting For Stock-Based Compensation" ("SFAS 123") by providing alternative methods of transition to the fair-value-based method of accounting for stock-based employee compensation. It also amends the disclosure requirements of SFAS No. 123 to require prominent disclosures of stock compensation information, including the method used to account for stock-based compensation and the effects of that method on reported financial results in interim, as well as annual, financial statements. The Company accounts for stock-based compensation using the intrinsic value method in accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly, it recognizes no compensation expense in our financial statements for stock options issued with exercise prices that equal or exceed the cost of our common stock on the date such options are issued. As a result, the Company does not expect the provisions of SFAS 148 covering the transition to fair-value method accounting for stock-based compensation to affect its consolidated financial statements. Beginning with its financial statements as of and for the three months ended May 31, 2003, the Company will make the interim disclosures required by SFAS 148. See Note (7) to these consolidated financial statements for disclosures about the Company's stock-based compensation. In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 requires that a guarantor record a liability for and disclose certain types of guarantees. For certain other guarantees, FIN 45 requires only disclosure in the notes to the financial statements. The Company has not made any of the types of guarantees for which FIN 45 requires that a liability be recorded. However, certain entities whose financial statements are a part of these consolidated financial statements have guaranteed obligations of other entities within the consolidated group. FIN 45 requires disclosure of these guarantees, of the Company's product warranties, and of various indemnity arrangements to which the Company is a party. These disclosures are contained in the notes to our consolidated financial statements. In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"). FIN 46 requires that a company with an interest in a variable interest entity include such an entity in its consolidated financial statements if its financial interest in the entity indicates control. The statement applies immediately to interests in all variable interest entities acquired after January 1, 2003. For other variable interest entities, FIN is to be applied effective July 1, 2003. The Company has no interests in entities covered by FIN 46. Therefore, it does not expect FIN 46 to affect its consolidated financial statements. 43 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (2) PROPERTY AND EQUIPMENT A summary of property and equipment (in thousands) is as follows:
Estimated As of February 28, Useful Lives ------------------------------ (Years) 2003 2002 ------------ ------------ ------------ Land -- $ 12,166 $ 10,157 Building and improvements 20 - 40 43,715 29,315 Computer and other equipment 3 - 5 10,880 10,416 Transportation equipment 3 - 5 3,724 862 Furniture and fixtures 5 - 15 6,899 6,964 ------------ ------------ 77,384 57,714 Less accumulated depreciation (14,302) (11,998) ------------ ------------ Property and equipment, net $ 63,082 $ 45,716 ============ ============
The Company recorded $3,079,000, $2,865,000 and $3,003,000 of depreciation expense for fiscal 2003, 2002, and 2001, respectively. Capital expenditures totaled $20,865,000, $878,000, and $1,351,000 in fiscal 2003, 2002, and 2001, respectively. The Company recorded a $158,000 impairment charge in fiscal 2001 related to assets held for sale. The related assets consisted of the Company's former office and warehouse facilities located in El Paso, Texas. The Company sold its former office facility during fiscal 2002. The carrying value of the Company's former warehouse facility is included within the total classified as "Other assets" on the February 28, 2003 and 2002 Consolidated Balance Sheets. The Company leases 108,000 square feet of warehouse space, as well as various administrative office spaces, from a real estate partnership in which the Chief Executive Officer and another member of the Board of Directors are limited partners. During fiscal 2003, 2002, and 2001, the Company paid the real estate partnership $614,000, $624,000, and $510,540, respectively, under these leases. (3) INTANGIBLE ASSETS The following table is a summary, by operating segment, of the Company's goodwill balances as of February 28, 2003 and February 28, 2002. Total Goodwill by Operating Segment (thousands)
February 28, 2003 February 28, 2002 ----------------------------------------------- ----------------------------------------------- Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount ------------ ------------ ------------ ------------ ------------ ------------ Operating Segment: North American $ 42,212 $ (7,792) $ 34,420 $ 42,212 $ (7,792) $ 34,420 International 1,081 (433) 648 1,081 (433) 648 Tactica 6,103 (404) 5,699 6,103 (404) 5,699 ------------ ------------ ------------ ------------ ------------ ------------ Total $ 49,396 $ (8,629) $ 40,767 $ 49,396 $ (8,629) $ 40,767 ============ ============ ============ ============ ============ ============
44 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (3) INTANGIBLE ASSETS, CONTINUED The following table discloses information regarding the carrying amounts and associated accumulated amortization for intangible assets, other than goodwill. Intangible Assets (in thousands)
February 28, 2003 February 28, 2002 ----------------------------------------------- ----------------------------------------------- Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount ------------ ------------ ------------ ------------ ------------ ------------ Licenses $ 37,566 $ (10,194) $ 27,372 $ 15,566 $ (8,888) $ 6,678 Trademarks 17,259 (211) 17,048 339 (188) 151
(a) February 28, 2003 gross and net carrying amounts include $16,920,000 of trademarks and $18,000,000 of licenses not subject to amortization. The following table summarizes the amortization expense attributable to intangible assets for the year ending February 28, 2003, 2002, and 2001, as well as estimated amortization expense for the fiscal years ending the last day of February 2004 through 2008.
Aggregate Amortization Expense: For the twelve months ended (in thousands) ------------------------------- February 28, 2003 $ 1,330 February 28, 2002 $ 3,244(a) February 28, 2001 $ 3,450(a) Estimated Amortization Expense: For the fiscal years ended ------------------------------- February 2004 $ 1,309 February 2005 $ 1,309 February 2006 $ 1,309 February 2007 $ 1,309 February 2008 $ 1,207
(a) Totals for the twelve months ending February 28, 2002 and 2001 include $2,035,000 and $2,025,000 respectively, of goodwill amortization. Many of the license agreements under which the Company sells or intends to sell products with trademarks owned by other entities require the Company to pay minimum royalties and make minimum levels of advertising expenditures. For the fiscal year ending February 29, 2004, minimum royalties due and minimum advertising expenditures under these agreements total $3,705,000 and $6,274,000, respectively. (4) REVOLVING LINE OF CREDIT The Company maintains a revolving credit loan with a bank to facilitate short-term borrowings and the issuance of letters of credit. This line of credit allows borrowings totaling $25,000,000, charges interest at the three-month LIBOR rate plus a percentage that varies based on the ratio of the Company's debt to its earnings before interest, taxes, depreciation, and amortization (EBITDA), and expires August 31, 2003. At February 28, 2003 the interest rate charged under the line of credit was 2.31 percent. This line of credit allows for the issuance of letters of credit up to $7,000,000. Any outstanding letters of credit reduce the $25,000,000 maximum borrowing limit on a dollar-for-dollar basis. At February 28, 2003, there were no borrowings under this line of credit and outstanding letters of credit totaled $828,000. The revolving credit agreement provides that the Company must satisfy requirements concerning its minimum net worth, total debt to consolidated total capitalization ratio, debt to EBITDA ratio, and its fixed charge coverage ratio. The Company is in compliance with all of these requirements. Under the terms of the revolving credit agreement, one of the Company's U.S. subsidiaries is the borrower. The consolidated group's parent company, located in Bermuda and three of its U.S. subsidiaries fully guarantee the Revolving Line of Credit on a joint and several basis. 45 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (5) LONG-TERM DEBT On January 5, 1996, a U.S. subsidiary issued guaranteed Senior Notes at face value of $40,000,000. Interest is paid quarterly at an annual rate of 7.01 percent. The Senior Notes are unsecured, and are guaranteed by Helen of Troy Limited and certain of its subsidiaries. Annual principal payments of $10,000,000 each begin January 5, 2005, with the final payment due January 5, 2008. Using a discounted cash flow analysis based on estimated market rates, the estimated fair value of the guaranteed Senior Notes at February 28, 2003 is approximately $41,465,000. On July 18, 1997, a U.S. subsidiary of the Company issued a $15,000,000 Senior Note. Interest is paid quarterly at an annual rate of 7.24 percent. The $15,000,000 Senior Note is unsecured, is guaranteed by Helen of Troy Limited and certain of its subsidiaries and is due July 18, 2012. Annual principal payments of $3,000,000 each begin July 18, 2008, with the final payment due July 18, 2012. Using a discounted cash flow analysis based on estimated market rates, the estimated fair value of the guaranteed Senior Note at February 28, 2003 is approximately $16,105,000. Both the $40,000,000 and $15,000,000 Senior Notes contain covenants that require the Company to meet certain net worth and other financial requirements. Additionally, the notes restrict the Company from incurring liens on any of its properties, except under certain conditions as defined in the Senior Note agreements. The Company is in compliance with all the terms of these notes. Under the terms of the Senior Notes, one of the Company's U.S. subsidiaries is the borrower. The consolidated group's parent company, located in Bermuda, one of its subsidiaries located in Barbados, and three of its U.S. subsidiaries fully guarantee the Senior Notes on a joint and several basis. See Note (8) to these consolidated financial statements for maturity schedules of principal amounts due under the Senior Notes. (6) INCOME TAXES The components of earnings before income tax expense are as follows:
Years Ended February 28, ---------------------------------------------- (in thousands) 2003 2002 2001 ------------ ------------ ------------ U.S. $ 14,042 $ 17,762 $ 4,524 Non-U.S. 36,704 20,785 16,366 ------------ ------------ ------------ $ 50,746 $ 38,547 $ 20,890 ============ ============ ============
The components of income tax expense (benefit) are as follows:
Years Ended February 28, ---------------------------------------------- (in thousands) 2003 2002 2001 ------------ ------------ ------------ Current U.S. $ 3,985 $ 6,252 $ 2,990 Non-U.S. 5,465 1,689 2,716 Deferred 2,580 1,391 (2,148) ------------ ------------ ------------ $ 12,030 $ 9,332 $ 3,558 ============ ============ ============
46 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (6) INCOME TAXES, CONTINUED Total income tax expense differs from the amounts computed by applying the statutory tax rate to earnings before income taxes. The reasons for these differences are as follows:
Years Ended February 28, ------------------------------------------------ (in thousands) 2003 2002 2001 ------------ ------------ ------------ Expected tax expense at the U.S. statutory rate of 35% $ 17,761 $ 13,491 $ 7,312 Decrease in income taxes resulting from income from non-U.S. operations subject to varying income tax rates (5,731) (4,159) (3,754) ------------ ------------ ------------ Actual tax expense $ 12,030 $ 9,332 $ 3,558 ============ ============ ============
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at February 28, 2003 and 2002 are as follows:
2003 2002 ------------ ------------ Deferred tax assets: (in thousands) Net operating loss carryforwards $ 746 $ 1,510 Inventories, principally due to additional cost of inventories for tax purposes 1,750 2,164 Accrued expenses 1,964 2,246 Accounts receivable 1,073 2,679 ------------ ------------ Total gross deferred tax assets 5,533 8,599 Valuation allowance (169) (1,076) Deferred tax liabilities: Depreciation and amortization (2,217) (1,796) ------------ ------------ Net deferred tax asset $ 3,147 $ 5,727 ============ ============
The Company's gross deferred tax asset of $581,000 attributable to U.S. net operating loss carryforwards expires if not utilized by various dates ranging from fiscal 2019 to 2023. The Company's gross deferred tax asset of $165,000 attributable to non-U.S. net operating loss carryforwards expire at various dates between fiscal 2005 and fiscal 2012. Accounting standards require that deferred income taxes reflect the tax consequences of future tax benefits, including net operating losses, to the extent that realization of such benefits is more likely than not. Certain of the Company's gross deferred tax assets did not, in the opinion of management, meet that standard as of February 28, 2003 and 2002. Therefore, the Company placed a valuation allowance against those assets. Although realization is not assured, management believes it is more likely than not that the remaining net deferred tax assets, including net operating losses, will be realized. The amount of the deferred tax assets considered realizable, however, could be lower if estimates of future taxable income during the carryforward period are reduced. During the fiscal year ended February 28, 2003, the Company removed the valuation allowances that were in place at February 28, 2002. These valuation allowances were related to net operating loss carryforwards of the Company's United Kingdom subsidiary and one of its U.S. subsidiaries. During fiscal 2003, circumstances arose that either allowed the use of such net operating losses or that caused management to believe that it to be more likely than not that they will be used at a future date. 47 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (6) INCOME TAXES, CONTINUED The Hong Kong Inland Revenue Department ("the IRD") has assessed $6,753,000 in income tax on certain profits of the Company's foreign subsidiaries for the fiscal years 1995 through 1997. The ultimate resolution of the IRD's claims cannot be predicted with certainty. However, the Company has recorded a liability for the IRD's claims, based on consultations with outside Hong Kong tax experts as to the probability that some or all of the IRD's claims prevail. If the IRD were to assert the same position for later years and that position were to prevail, the resulting tax liability could total $34,101,000 (U.S.) for the period from fiscal 1995 through fiscal 2003. In connection with the IRD's tax assessment, the Company purchased tax reserve certificates in Hong Kong. The certificates were valued at $3,282,000 (U.S.) as of February 28, 2003, or approximately 49 percent of the liability assessed by the IRD for fiscal 1995 through 1997. Tax reserve certificates represent the prepayment of potential tax liabilities by a taxpayer. 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. Although the ultimate resolution of the IRD's claims cannot be predicted with certainty, management believes that adequate provision has been made in the financial statements for the resolution of the IRD's claims. The IRD also assessed $4,468,000 in tax on certain profits of the Company's foreign subsidiaries for fiscal years 1990 through 1994. During the second quarter of the fiscal year ended February 28, 2003, the Company settled its dispute for those years with the IRD for $2,505,000 (56 percent of the assessed amount), plus interest of approximately $100,000. As a result of the assessment, we forfeited tax reserve certificates previously valued at $2,468,000 on our balance sheet and paid approximately $137,000 in cash to the IRD. The tax reserve certificates that we forfeited were included on our Consolidated Balance Sheet as of February 28, 2002 on the line entitled "Other assets, net of accumulated amortization." The settlement did not affect the current status of the IRD's assessments for fiscal years 1995 through 1997 and did not have a material effect on the Company's fiscal 2003 consolidated net earnings. The Internal Revenue Service ("IRS") is auditing the U.S. federal tax returns of the Company's largest U.S. subsidiary for the fiscal years 1997, 1998, and 1999. The IRS has proposed adjustments to those returns. If the IRS's position with respect to these adjustments were to prevail, the resulting tax liability could total $9,884,000. The Company plans to vigorously contest these adjustments and is engaged in the process of formulating its response. Although the ultimate outcome of the examination cannot be predicted with certainty, management is of the opinion that adequate provision has been made in the consolidated financial statements for the adjustments proposed. The IRS is also auditing the U.S. federal tax returns of the Company's largest U.S. subsidiary for fiscal years 2000, 2001, and 2002. Thus far, the IRS has proposed no adjustments to these tax returns. The Company cannot predict with certainty the results of the IRS examination for these years. The Company plans to permanently reinvest all of the undistributed earnings of the non-U.S. subsidiaries of the U.S. subsidiaries. The Company has made no provision for U.S. federal income taxes on these undistributed earnings. At February 28, 2003, undistributed earnings for which the Company had not provided deferred U.S. federal income taxes totaled $50,244,000. 48 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (7) STOCK-BASED COMPENSATION PLANS The Company sponsors four stock-based compensation plans. The plans consist of two employee stock option plans, a non-employee director stock option plan and an employee stock purchase plan. These plans are described below. As all options were granted at or above market prices on the dates of grant, no compensation expense has been recognized for the Company's stock option plans or its stock purchase plan. Had the Company recorded compensation expense for its stock option plans based on the fair value of the options at the dates of grant for those awards, consistent with the method of Statement of Financial Accounting Standards No. 123, "Accounting For Stock-Based Compensation," net earnings and earnings per share would have been reduced to the following pro forma amounts:
Years Ended February 28, ---------------------------------------------------------- 2003 2002 2001 ---------------- ---------------- ---------------- Net Income: As Reported $ 38,716,000 $ 29,215,000 $ 17,332,000 Fair-value cost 7,004,000 7,416,000 4,830,000 ---------------- ---------------- ---------------- Pro forma $ 31,712,000 $ 21,799,000 $ 12,502,000 Earnings per share: Basic: As Reported $ 1.37 $ 1 .04 $ .61 Pro forma $ 1.12 $ .78 $ .44 Diluted: As Reported $ 1.31 $ 1.00 $ .60 Pro forma $ 1.07 $ .75 $ .44
The Company computed the pro forma figures disclosed above using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants in fiscal 2003, 2002, and 2001, respectively; expected dividend yields of zero for all years; expected volatility of 39.6 percent for fiscal 2003, 40.8 percent for fiscal 2002, and 34.9 percent for fiscal 2001, risk-free interest rates of 4.1 percent for fiscal 2003, 4.7 percent for fiscal 2002, and 4.9 percent for fiscal 2001 and expected lives of 3, 4, 5 or 10 years depending on the option granted. Under stock option and restricted stock plans adopted in 1994 and 1998 (the "1994 Plan" and the "1998 Plan," respectively) the Company reserved a total of 14,000,000 shares of its common stock for issuance to key officers and employees. Pursuant to the 1994 and 1998 Plans, the Company grants options to purchase its common stock at a price equal to or greater than the fair market value on the grant date. Both plans contain provisions for incentive stock options ("ISOs"), non-qualified stock options ("Non-Qs") and restricted stock grants. Generally, options granted under the 1994 and 1998 Plans become exercisable immediately, or over a one, four or five-year vesting period and expire on a date ranging from seven to ten years from their date of grant. Under a stock option plan for non-employee directors (the "Directors' Plan"), adopted in fiscal 1996, the Company reserved a total of 980,000 shares of its common stock for issuance to non-employee members of the Board of Directors. The Company grants options under the Directors' Plan at a price equal to the fair market value of the Company's common stock at the date of grant. Options granted under the Directors' Plan vest one year from their date of issuance and expire ten years after issuance. 49 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (7) STOCK-BASED COMPENSATION PLANS, CONTINUED A summary of stock option activity under all plans is as follows:
YEARS ENDED FEBRUARY 28, ---------------------------------------------------------------------------------------- 2003 2002 2001 -------------------------- -------------------------- -------------------------- WEIGHTED Weighted Weighted AVERAGE Average Average SHARES EXERCISE Shares Exercise Shares Exercise (000S) PRICE (000s) Price (000s) Price ---------- ---------- ---------- ---------- ---------- ---------- Options outstanding, beginning of year 7,323 $ 10.53 6,203 $ 10.52 5,441 $ 11.96 Options granted 1,384 12.33 1,353 10.26 1,273 5.95 Options exercised (56) 10.00 (108) 6.57 (12) 4.31 Options forfeited (36) 9.09 (125) 10.25 (499) 14.78 ---------- ---------- ---------- ---------- ---------- ---------- Options outstanding, at year end 8,615 10.83 7,323 10.53 6,203 10.52 ========== ========== ========== ========== ========== ========== Options exercisable at year-end 7,566 $ 10.66 5,870 $ 9.96 4,362 $ 9.01 ========== ========== ========== ========== ========== ========== Weighted-average fair value of options granted during the year $ 6.28 $ 5.74 $ 3.00
The following table summarizes information about stock options at February 28, 2003:
Outstanding Stock Options Exercisable Stock Options ------------------------------------------------------------------- ----------------------------- Weighted- Average Weighted- Weighted- Remaining Average Average Number of Contractual Exercise Number of Exercise Options Price Range Life (years) Price Options Price ------------ ---------------- ------------ ------------ ------------ ------------ ISOs 290,204 $4.13 to $6.97 5.41 $ 5.85 85,882 $ 5.35 217,193 $7.90 to $13.63 6.05 11.81 81,593 11.80 235,426 $14.02 to $23.91 5.96 14.45 44,706 16.04 --------- ------------ Total 742,823 5.77 $ 10.32 212,181 $ 10.08 ========= ============ Non-Qs 2,575,272 $4.13 to $7.09 4.85 $ 5.29 2,520,672 $ 5.28 2,295,419 $9.17 to $13.13 8.79 11.54 2,284,419 11.54 2,593,224 $13.46 to $20.00 5.51 15.63 2,229,084 15.64 --------- ------------ Total 7,463,915 6.29 $ 10.80 7,034,175 $ 10.60 ========= ============ Directors' Plan 228,000 $4.41 to $12.63 8.04 $ 9.55 160,000 $ 8.75 180,000 $13.03 to $17.63 5.36 15.69 160,000 16.02 --------- ------------ Total 408,000 6.86 $ 12.26 320,000 $ 12.39 ========= ============
50 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (7) STOCK-BASED COMPENSATION PLANS, CONTINUED In fiscal 1999 the Company's shareholders approved an employee stock purchase plan (the "Stock Purchase Plan") under which 500,000 shares of common stock are reserved for issuance to the Company's employees, nearly all of whom are eligible to participate. Under the terms of the Stock Purchase Plan employees authorize the Company to withhold from 1 percent to 15 percent of their wages or salaries to purchase the Company's common stock. The purchase price for stock purchased under the plan is equal to the lower of 85 percent of the stock's fair market value on either the first day of each option period or the last day of each period. During fiscal 2003, employees purchased 19,828 shares of common stock from the Company under the stock purchase plan. (8) COMMITMENTS AND CONTINGENCIES Under agreements with customers, licensors, and parties from whom it has acquired assets or entered into business combinations, the Company indemnifies these parties against liability associated with the Company's products. Additionally, the Company is party to a number of agreements under leases whereby it indemnifies lessors for liabilities attributable to the Company's action or conduct. The indemnity agreements to which it is a party do not, in general, increase the Company's liability for claims related to its products or actions and have not affected materially the Company's consolidated financial position as of February 28, 2003 and 2002 or its consolidated earnings and cash flows for the years ended February 28, 2003, 2002, and 2001. Helen of Troy Limited, the parent company of the consolidated group, has guaranteed two commitments of its subsidiary based in the United Kingdom ("the UK"). Under one of the guarantees, the parent company guaranteed a commitment by the UK subsidiary to purchase a new office facility. Under this guarantee, the parent company is liable for up to 1,150,000 British pounds, should the UK subsidiary fail to fulfill its obligations under its purchase agreement. Under the second arrangement with a marketing company used by the UK subsidiary, the parent company guaranteed up to 600,000 British pounds on behalf of the UK subsidiary. No liability is recorded on the February 28, 2003 Consolidated Balance Sheet for either of the parent company guarantees on behalf of the UK subsidiary. The Company's 55-percent owned subsidiary, Tactica International, Inc. ("Tactica") leases office space in New York City. One of the Company's U.S. subsidiaries has issued a $389,000 standby letter of credit to the lessor. The lessor may draw funds from the standby letter of credit if Tactica fails to pay its rent due under the lease. The standby letter of credit decreases to $195,000 on April 30, 2005 and expires on the same date as the related lease, February 27, 2006. The Company has employment contracts with certain of its officers. These agreements provide for minimum salary levels and potential incentive bonuses. One agreement automatically renews itself each month for a five-year period and provides that in the event of a merger, consolidation or transfer of all or substantially all of the assets of the Company to an unaffiliated party, the officer may make an election to receive a cash payment for the balance of the obligations under the agreement. The expiration dates for these agreements range from March 15, 2004 to February 28, 2008. The aggregate commitment for future salaries pursuant to such contracts, at February 28, 2003, excluding incentive compensation, was approximately $4,000,000. The Company purchases most of the appliances and products that it sells from unaffiliated manufacturers located in the Far East, principally in the Peoples' Republic of China, Thailand, Taiwan and South Korea. Due to the fact that most of its products are manufactured in the Far East, the Company is subject to risks associated with trade barriers, currency exchange fluctuations, and political unrest. These risks have not historically affected the Company's operations. Additionally, the Company's management believes that it could obtain its products from facilities in other countries, if necessary. However, the relocation of production capacity could require substantial time and could result in increased costs. The Company regularly enters into arrangements with customers whereby it offers those customers incentives, including incentives in the form of volume rebates. The Company's estimate of its liability for such incentives is included on its Consolidated Balance Sheets on the line entitled "Accrued liabilities" and is based on incentives applicable to sales up to the respective balance sheet dates. 51 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (8) COMMITMENTS AND CONTINGENCIES, CONTINUED In the fourth quarter of fiscal 2001, the Company recorded a $2,457,000 charge for the remaining unamortized costs under a distribution agreement (which was later formally terminated) with The Schawbel Corporation ("Schawbel"), the supplier of the Company's butane hair care products. In a related matter, in September 1999, Schawbel commenced litigation in the U.S. District Court for the District of Massachusetts against The Conair Corporation ("Conair"), the predecessor distributor for Schawbel's butane products. In its action, amended in June 2000, Schawbel alleged, among other things, that Conair, following Schawbel's termination of the Conair distribution agreement, stockpiled and sold Schawbel product beyond the 120 day "sell-off" period afforded under the agreement, and manufactured, marketed and sold its own line of butane products which infringed patents held by Schawbel. In November 2000, the Massachusetts court granted Schawbel its request for preliminary injunction, and ordered that Conair cease selling all allegedly infringing products. The Company intervened as a plaintiff in the action to assert claims against Conair similar to the claims raised by Schawbel. The Company is seeking to recover damages in excess of $10 million, arising from the Company's inability to meet minimum purchase requirements under its distribution agreement with Schawbel and the subsequent termination of that agreement by Schawbel. Conair responded by filing a counterclaim alleging that the Company conspired with Schawbel to unlawfully terminate Conair's distribution agreement with Schawbel, and to disparage Conair's reputation in the industry. The counterclaim seeks $15 million in damages. Although the ultimate outcome of the matter cannot be predicted, the Company contends that Conair's counterclaims lack validity. The Company intends to pursue vigorously its claims and defense in the litigation. The Company is also involved in various other legal claims and proceedings in the normal course of operations. In the opinion of management, the outcome of these matters will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company and its subsidiaries. One of the Company's 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, the Company has been granted the right to initiate a process whereby it 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. The Company may elect at its 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 the Company. Under the terms of a Shareholders' Rights Plan approved by the Board of Directors in fiscal 1999, the Board of Directors declared a dividend of one preference share right ("Right") for each outstanding share of Common Stock. The dividend resulted in no cash payment by the Company, created no liability on the part of the Company and did not change the number of shares of Common Stock outstanding. The Rights are inseparable from the shares of Common Stock and entitle the holders to purchase one one-thousandth of a share of Series A First Preference Shares ("Preference Shares"), par value $1.00, at a price of $100 per one-one thousandth of a Preference Share. Should certain persons or groups of persons ("Acquiring Persons") acquire more than 15% of the Company's outstanding Common Stock, the Board of Directors may either adjust the price at which holders of Rights may purchase Preference Shares or may redeem all of the then outstanding Rights at $.01 per Right. The Rights associated with the Acquiring Person's shares of Common Stock would not be exercisable. The Rights have certain anti-takeover effects. The Rights could cause substantial dilution to a person or group that attempts to acquire the Company in certain circumstances, but should not interfere with any merger or other business combination approved by the Board of Directors. The Rights expire December 1, 2008, unless their expiration date is advanced or extended or unless the Rights are earlier redeemed or exchanged by the Company. 52 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (8) COMMITMENTS AND CONTINGENCIES, CONTINUED The Company's contractual obligations and commercial commitments, as of February 28, 2003 were: Contractual Obligations PAYMENTS DUE BY PERIOD (IN 000S) After Total 1 year 2 years 3 years 4 years 5 years 5 years -------- -------- -------- -------- -------- -------- -------- Long-term debt $ 55,000 -- 10,000 10,000 10,000 10,000 15,000 Open purchase orders - inventory 68,249 68,249 -- -- -- Minimum royalty payments 24,830 3,705 3,829 3,260 2,658 2,658 8,720 Advertising commitments under license agreements 23,775 6,274 5,724 5,705 868 878 4,326 Management fees - Corporate jet 1,811 362 362 363 362 362 -- Operating leases 3,678 1,960 894 818 6 -- -- New office facility in UK 1,800 1,800 -- -- -- -- -- Purchase of software 1,113 1,113 -- -- -- -- -- -------- -------- -------- -------- -------- -------- -------- Total contractual obligations $180,256 83,463 20,809 20,146 13,894 13,898 28,046 ======== ======== ======== ======== ======== ======== ========
(9) FOURTH QUARTER CHARGES/TRANSACTIONS In the fourth quarter of fiscal 2001, the Company recognized $2,457,000 in pre-tax charges due to the planned discontinuance of a product. See Note (8) to these consolidated financial statements for further discussion of this issue. The Company's fourth quarter fiscal 2001 results also included a $1,895,000 reduction in SG&A due to the settlement of a license obligation for which the Company accrued a liability in fiscal 2000. The Company's results for the fourth quarters of fiscal 2003 and 2002 do not contain any transactions of a non-routine nature. 53 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (10) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Selected quarterly financial data is as follows (in thousands, except per share amounts): Unaudited -- see accompanying accountants' report
May August November February Total ----------- ----------- ----------- ----------- ----------- Fiscal 2003: Net sales $ 102,483 $ 111,058 $ 142,998 $ 102,286 $ 458,825 Gross profit 49,515 50,910 65,413 45,193 211,031 Net earnings 6,591 8,876 16,791 6,458 38,716 Earnings per Share Basic .23 .31 .60 .23 1.37 Diluted .22 .30 .57 .22 1.31 Fiscal 2002: Net sales $ 91,383 $ 112,688 $ 141,788 $ 101,460 $ 447,319 Gross profit 41,979 55,602 64,170 46,709 208,460 Net earnings 4,591 7,303 12,967 4,354 29,215 Earnings per Share Basic .16 .26 .46 .15 1.04 Diluted .16 .25 .44 .15 1.00
The business of the Company is somewhat seasonal. Between 54 percent and 57 percent of annual sales volume normally occurs in the second and third fiscal quarters. 54 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (11) SEGMENT INFORMATION The following table contains segment information for fiscal 2003, 2002, and 2001.
(in thousands) North Corporate / 2003 American International Tactica Other Total - ---- ----------- ------------- ----------- ----------- ----------- Net sales $ 345,992 $ 33,759 $ 79,074 $ -- $ 458,825 Operating income (loss) 49,554 2,995 2,657 (2,347) 52,859 Identifiable assets 337,596 26,049 27,928 14,056 405,629 Capital, license, and trademark expenditures 54,100 5,414 189 82 59,785 Depreciation and amortization 4,577 1,331 136 514 6,558
North Corporate / 2002 American International Tactica Other Total - ---- ----------- ------------- ----------- ----------- ----------- Net sales $ 308,738 $ 29,906 $ 108,675 $ -- $ 447,319 Operating income (loss) 32,203 (244) 11,930 (2,232) 41,657 Identifiable assets 287,897 21,248 17,184 31,229 357,558 Capital / license expenditures 647 111 120 -- 878 Depreciation and amortization 6,665 1,442 256 267 8,630
North Corporate / 2001 American International Tactica Other Total - ---- ----------- ------------- ----------- ----------- ----------- Net sales $ 307,764 $ 25,390 $ 24,010 $ -- $ 357,164 Operating income (loss) 28,736 94 (4,629) (1,205) 22,996 Identifiable assets 273,068 24,331 19,943 19,839 337,181 Capital / license expenditures 3,056 125 4 -- 3,185 Depreciation and amortization 7,537 372 228 -- 8,137
The North American segment sells hair care appliances, other personal care appliances, including massagers and spa products, hairbrushes, combs, and utility and decorative hair accessories in the U.S. and Canada. The International segment sells hair care appliances, personal care appliances, hairbrushes, combs, and hair accessories in other countries. Tactica sells a variety of personal care and other consumer products directly to customers and to retailers. The column above entitled "Corporate / other" contains items not allocated to any specific operating segment. Operating profit for each operating segment is computed based on net sales, less cost of goods sold, less any selling, general, and administrative expenses associated with the segment. The selling, general, and administrative expense totals used to compute each segment's operating profit are comprised of SG&A expense directly associated with those segments, plus overhead expenses that are allocable to operating segments. Other items of income and expense, including income taxes, are not allocated to operating segments. 55 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (11) SEGMENT INFORMATION, CONTINUED The Company's domestic and international net revenues from third parties and long-lived assets are as follows:
2003 2002 2001 ------------ ------------ ------------ NET REVENUES FROM THIRD PARTIES: United States $ 412,040 $ 405,060 $ 319,096 International 46,785 42,259 38,068 ------------ ------------ ------------ Total 458,825 447,319 357,164 ============ ============ ============ LONG-LIVED ASSETS: United States 150,193 91,868 94,890 International 20,600 22,020 21,910 ------------ ------------ ------------ Total $ 170,793 $ 113,888 $ 116,800 ============ ============ ============
Sales to one customer and its affiliate accounted for 24 percent, 22 percent, and 23 percent of the Company's net sales in fiscal 2003, 2002, and 2001, respectively. Of the Company's total sales to that customer and its affiliate, 92 percent, 98 percent, and 99 percent, respectively were made by the North American segment during fiscal 2003, 2002, and 2001, respectively. Tactica made the remainder of the Company's sales to this customer and its affiliate. (12) ACQUISITION OF TRADEMARKS AND OF RIGHTS UNDER LICENSE AGREEMENTS On October 21, 2002, the Company acquired from The Procter & Gamble Company the right to sell products under six trade names. The Company acquired all rights to the trademarks, formulas, and production processes for four of the six trade names; Ammens(R), Vitalis(R), Condition 3-in-1(R), and Final Net(R). The Procter & Gamble Company assigned the Company its rights under licenses to sell products bearing the other two trade names; Sea Breeze(R) and Vitapointe(R). The Sea Breeze(R) license is perpetual. The portion of the purchase price assigned to the four trademarks purchased is included on the Company's February 28, 2003 consolidated balance sheet on the line entitled "Trademarks, at cost, net of accumulated amortization." The Company concluded that the useful economic lives of these trademarks are indefinite, meaning that these trademarks are not subject to amortization. This conclusion was reached after consideration of the history of the brands and of plans and forecasts for sales of products under these trademarks. The portion of the purchase price assigned to the rights obtained under the Sea Breeze(R) and Vitapointe(R) licenses appears on the Company's February 28, 2003 consolidated balance sheet on the line entitled "License agreements, at cost less accumulated amortization." After consideration of the fact that the Sea Breeze(R) license is perpetual and an analysis of the history of the brand as well as the Company's plans and forecasts with respect to the brand, the Company determined that the Sea Breeze(R) license has an indefinite economic useful life. Therefore, it is not subject to amortization. The Vitapointe(R) license expires on December 31, 2010. Although, its long-range expectation is to renew the Vitapointe(R) license upon its expiration, the Company determined that the finite nature of this license indicates that it has a definite life and is, therefore subject to amortization. The Company expects annual amortization expense associated with the Vitapointe(R) license to be approximately $125,000. 56 HELEN OF TROY LIMITED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (13) FORWARD CONTRACTS The Company's functional currency is the U.S. dollar. Because it operates internationally, the Company is subject to foreign currency risk from transactions denominated in currencies other than the U.S. dollar ("foreign currencies"). Such transactions include sales and certain inventory purchases. As a result of such transactions, portions of the Company's cash, trade accounts receivable, and trade accounts payable are denominated in British pounds or Euros. These sales were primarily denominated in the British pound sterling and the Euro. The Company makes most of its inventory purchases from the Far East and uses the U.S. dollar for such purchases. The Company identifies foreign currency risk by regularly monitoring its foreign currency-denominated transactions and balances. During fiscal 2003, the Company hedged against foreign currency exchange rate risk by entering into forward contracts to exchange a total of 5,000,000 British pounds for U.S. dollars at rates ranging from 1.5393 to 1.548 dollars per British pound. At February 28, 2003, one forward contract to exchange 1,000,000 British pounds for U.S. dollars at a rate of 1.5393 U.S. dollars per British pound remained outstanding. The line item entitled "Other income, net" in the Consolidated Statements of Income includes $34,000 of expense associated with hedges of foreign currency risk. (14) NON-MONETARY TRANSACTIONS During fiscal 2003, the Company entered into two non-monetary transactions in which it exchanged inventory with a net book value of approximately $3,100,000 for advertising credits. As a result of these transactions, the Company recorded both sales and cost of goods sold equal to the inventory's net book value. The Company used approximately $600,000 of the advertising credits during fiscal 2003 and expects to use the remaining advertising credits by February 28, 2004. The remaining credits are valued at $2,500,000 on the Company's Consolidated Condensed Balance Sheet at February 28, 2003 and are included in the line item entitled "Prepaid expenses." 57 HELEN OF TROY LIMITED AND SUBSIDIARIES Schedule II Valuation and Qualifying Accounts Years ended February 28, 2003, February 28, 2002 and February 28, 2001 (in thousands)
Additions ---------------------------- Balance at Charged to Write-off of Beginning cost and uncollectible Balance at Description of Year expenses Recoveries accounts End of Year - ----------- ---------- ---------- ---------- ------------- ----------- Year ended February 28, 2003 Allowance for accounts receivable $5,794 $2,929 $ 77 $ 3,693 $5,107 Year ended February 28, 2002 Allowance for accounts receivable 4,081 1,969 22 278 5,794 Year ended February 28, 2001 Allowance for accounts receivable 2,514 2,469 63 965 4,081
58 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information in the Company's Proxy Statement, which will be filed within 120 days of the end of the Company's 2003 fiscal year, is incorporated herein by reference in response to this Item 10. ITEM 11. EXECUTIVE COMPENSATION Information in the Company's Proxy Statement, which will be filed within 120 days of the end of the Company's 2003 fiscal year, is incorporated herein by reference in response to this Item 11. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information in the Company's Proxy Statement, which will be filed within 120 days of the end of the Company's 2003 fiscal year, is incorporated herein by reference in response to this Item 12. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information in the Company's Proxy Statement, which will be filed within 120 days of the end of the Company's 2003 fiscal year, is incorporated herein by reference in response to this Item 13. ITEM 14. CONTROLS AND PROCEDURES We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Securities Exchange Act reports 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 the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. During the 90-day period prior to the date of this report, an evaluation was performed under the supervision and with the participation of our Company's management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective. Subsequent to the date of this evaluation, there have been no significant changes in the Company's internal controls or in other factors that could significantly affect these controls, and no corrective actions taken with regard to significant deficiencies or material weaknesses in such controls. ITEM 16. PRINCIPAL ACCOUNTANT FEES AND SERVICES Information in the Company's Proxy Statement, which will be filed within 120 days of the end of the Company's 2003 fiscal year, is incorporated herein by reference in response to this Item 16. 59 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULE, AND REPORTS ON FORM 8-K (a) Exhibits 3. Exhibits 3.1 Memorandum of Association (incorporated by reference to Exhibit 3.1 to the Registrant's Registration Statement on Form S-4, File No. 33-73594, filed with the Securities and Exchange Commission on December 30, 1993 (the "1993 S-4")). 3.2 Bye-Laws (incorporated by reference to Exhibit 3.2 of the 1993 S-4). 4.1 Rights Agreement, dated as of December 1, 1998, between Helen of Troy Limited and Harris Trust and Savings Bank, as Rights Agent (incorporated by reference to Exhibit 4 to the Registrant's Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 4, 1998). 10.1** Form of Directors' and Executive Officers' Indemnity Agreement (incorporated by reference to Exhibit 10.2 to the 1993 S-4). 10.2** 1994 Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 10.1 to the 1993 S-4). 10.3 Revlon Consumer Products Corporation (RCPC) North American Appliances License Agreement dated September 30, 1992 (incorporated by reference to Exhibit 10.31 to Helen of Troy Corporation's Quarterly Report on Form 10-Q for the period ending November 30, 1992 (the "November 1992 10-Q")). 10.4 Revlon Consumer Products Corporation (RCPC) International Appliances License Agreement dated September 30, 1992 (incorporated by reference to Exhibit 10.32 to the November 1992 10-Q). 10.5 Revlon Consumer Products Corporation (RCPC) North American Comb and Brush License Agreement dated September 30, 1992 (incorporated by reference to Exhibit 10.33 to the November 1992 10-Q). 10.6 Revlon Consumer Products Corporation (RCPC) International Comb and Brush License Agreement dated September 30, 1992 (incorporated by reference to Exhibit 10.34 to the November 1992 10-Q). 10.7 First Amendment to RCPC North America Appliance License Agreement, dated September 30, 1992 (incorporated by reference to Exhibit 10.26 to Helen of Troy Corporation's Annual Report on Form 10-K for the period ending February 28, 1993 (the "1993 10-K"). 10.8 First Amendment to RCPC North America Comb and Brush License Agreement, dated September 30, 1992 (incorporated by reference to Exhibit 10.27 to the 1993 10-K). 10.9 First Amendment to RCPC International Appliance License Agreement, dated September 30, 1992 (incorporated by reference to Exhibit 10.28 to the 1993 10-K). 10.10 First Amendment to RCPC International Comb and Brush License Agreement, dated
60 September 30, 1992 (incorporated by reference to Exhibit 10.29 to the 1993 10-K). 10.11 Amended and Restated Note Purchase, Guaranty and Master Shelf Agreement, $40,000,000 7.01% Guaranteed Senior Notes and $40,000,000 Guaranteed Senior Note Facility (incorporated by reference to Exhibit 10.23 to Helen of Troy Limited's Quarterly Report on Form 10-Q for the period ending November 30, 1996). 10.12** Helen of Troy Limited 1998 Employee Stock Option and Restricted Stock Plan (incorporated by reference to Exhibit 4.3 to Helen of Troy Limited's Registration Statement on Form S-8, File Number 333-67349, filed with the Securities and Exchange Commission on November 6, 1998 (the "1998 S-8"). 10.13** Helen of Troy Limited 1998 Employee Stock Purchase Plan (incorporated by reference to Exhibit 4.3 of the 1998 S-8). 10.14** Amended and Restated Employment Agreement between Helen of Troy Limited and Gerald J. Rubin, dated March 1, 1999 (incorporated by reference to Exhibit 10.29 to Helen of Troy Limited's Quarterly Report on Form 10-Q for the period ending August 31, 1999 (the "August 1999 10-Q")). 10.15** Amended and Restated Helen of Troy Limited 1995 Non-Employee Director Stock Option Plan (incorporated by reference to Exhibit 10.30 to the August 1999 10-Q). 10.16 Loan Agreement, dated December 31, 1996, between Helen of Troy L.P. and Texas Commerce Bank National Association (incorporated by reference to Exhibit 10.21 to Helen of Troy Limited's Quarterly Report on Form 10-Q for the period ending August 31, 2001 (the "August 2001 10-Q")). 10.17 First Amendment, dated July 31, 1997, to Loan Agreement between Helen of Troy L.P, and Texas Commerce Bank National Association (incorporated by reference to Exhibit 10.22 of the August 2001 10-Q). 10.18 Second Amendment, dated July 31, 1998 to Loan Agreement between Helen of Troy L.P. and Chase Bank of Texas National Association (incorporated by reference to Exhibit 10.23 of the August 2001 10-Q). 10.19 Third Amendment, dated July 31, 2000 to Loan Agreement between Helen of Troy L.P. and The Chase Manhattan Bank (incorporated by reference to Exhibit 10.24 of the August 2001 10-Q). 10.20 Fourth Amendment, dated July 31, 2001 to Loan Agreement between Helen of Troy L.P. and The Chase Manhattan Bank (incorporated by reference to Exhibit 10.25 of the August 2001 10-Q). 10.21 Fifth Amendment, dated August 31, 2001 to Loan Agreement between Helen of Troy L.P. and The Chase Manhattan Bank (incorporated by reference to Exhibit 10.26 of the August 2001 10-Q). 10.22** Helen of Troy 1997 Cash Bonus Performance Plan (incorporated by reference to Exhibit 10.26 of Helen of Troy Limited's Annual Report on Form 10-K for the period ended February 28, 2002 (the "2002 10-K")). 10.23 Stockholders Agreement dated March 14, 2000 by and among Tactica International, Inc., Helen of Troy, LLC, Avi Sivan, Prem Atma Ramchandani, Avraham Ovadia, and APA
61 International, LLC (incorporated by reference to Exhibit 10.27 of the 2002 10-K). 10.24* Master License Agreement dated October 21, 2002, between The Procter & Gamble Company and Helen of Troy Limited (Barbados) (Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Commission). 21* Subsidiaries of the Registrant. 23* Independent Auditors' Consent.
- ---------- *filed herewith ** Indicates management contract or compensatory plan or arrangement (b) The following documents are filed as part of the report: 1. Financial Statements Independent Auditors' Report Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements 2. Schedule: Schedule II - Valuation and Qualifying Accounts (c) Reports on Form 8-K The Company filed no reports on Form 8-K during the three months ended February 28, 2003. 62 The registrant will send its annual report to security holders and proxy solicitation material subsequent to the filing of this form and shall furnish copies of both to the Commission when they are sent to security holders. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 By: /s/ Gerald J. Rubin -------------------------------------- Gerald J. Rubin, Chairman, Chief Executive Officer and Director Dated May 29, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date - ------------------------------------------ -------------------------------------- ----------- Chairman of the Board, Chief Executive Officer, President, and /s/ Gerald J. Rubin Director (Principal Executive Officer) May 29,2003 - ----------------------------------------- (Gerald J. Rubin) Senior Vice President, Finance and Chief Financial Officer (Principal Financial and Accounting /s/ Russell G. Gibson Officer) May 29, 2003 - ----------------------------------------- (Russell G. Gibson) /s/ Stanlee N. Rubin Director May 29, 2003 - ----------------------------------------- (Stanlee N. Rubin) /s/ Christopher L. Carameros Director May 29, 2003 - ----------------------------------------- (Christopher L. Carameros)
63 /s/ Byron H. Rubin Director May 29, 2003 - ----------------------------------------- (Byron H. Rubin) /s/ Daniel C. Montano Director May 29, 2003 - ----------------------------------------- (Daniel C. Montano) /s/ Gary B. Abromovitz Director May 29, 2003 - ----------------------------------------- (Gary B. Abromovitz) /s/ John B. Butterworth Director May 29, 2003 - ----------------------------------------- (John B. Butterworth)
64 CERTIFICATION I, Gerald J. Rubin, certify that: 1. I have reviewed this annual report on Form 10-K of Helen of Troy Limited; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 29, 2003 ------------- /s/ Gerald J. Rubin - -------------------------------- Gerald J. Rubin Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) 65 CERTIFICATION I, Russell G. Gibson, certify that: 1. I have reviewed this annual report on Form 10-K of Helen of Troy Limited; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 29, 2003 ------------ /s/ Russell G. Gibson - ------------------------------- Russell G. Gibson Senior Vice President, Finance, and Chief Financial Officer (Principal Financial Officer) 66 Index to Exhibits
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 10.24 - Master License Agreement dated October 21, 2002, between The Procter & Gamble Company and Helen of Troy Limited (Barbados) (Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Commission). 21 - Subsidiaries of the Registrant, filed herewith. 23 - Independent Auditors' Consent. 99.1 - CEO Certification 99.2 - CFO Certification
67 EX-10.24 3 d06369exv10w24.txt MASTER LICENSE AGREEMENT EXHIBIT 10.24 [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK (***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.] MASTER LICENSE AGREEMENT THIS AGREEMENT is made and entered into as of January 1, 2003 by and between The Procter & Gamble Company, a corporation duly organized and existing under the laws of Ohio, having a principal place of business at 1 Procter & Gamble Plaza, Cincinnati, Ohio 45201, as successor-in-interest to Richardson-Vicks Inc. (hereinafter referred to as "P&G") and Helen of Troy Limited, a corporation duly organized and existing under the laws of Barbados, having its principal place of business at Whitepark House, White Park Road, P.O. Box 836E, Bridgetown, Barbados, as successor-in-interest to Helen of Troy Corporation, now known as Helen of Troy Texas Corporation (hereinafter referred to as "LICENSEE"). WITNESSETH WHEREAS, P&G is the owner of the tradenames and trademarks "VIDAL SASSOON" and "VS SASSOON" (hereinafter referred to as "Trade Name," as more particularly defined in Section 1(d) below), which is known to the public and enjoys an excellent reputation; and WHEREAS, the parties are operating under an Appliance/License Agreement dated December 22, 1982, as amended, Brush License Agreement dated December 18, 1985, as amended, License Agreement (Canada) dated December 22, 1982, as amended, European Appliance Agreement dated January 1, 1990, as amended, and a Mexico Appliance License Agreement dated July 1, 1991, as amended (the foregoing are collectively the "Existing Licenses"), with respect to the Trade Name; and WHEREAS, inasmuch as the Existing Licenses are soon to expire, the parties desire to enter into one new License Agreement which will take the place of all Existing Licenses. 1 NOW, THEREFORE, in consideration of the foregoing and of the mutual promises herein contained, the parties hereto agree as follows: SECTION 1 - GRANT OF LICENSE (a) Upon the terms and conditions hereinafter set forth, P&G hereby grants to LICENSEE, and LICENSEE hereby accepts the sole right, license and privilege of utilizing the Trade Name, solely and only upon and in connection with the manufacture, sale and distribution of the "Designated Merchandise" (as defined in Section 1(e) below). This License Agreement is independent of any other agreement between the parties and applies only to the Licensed Territory as hereinafter defined. (b) The license hereby granted extends worldwide (hereinafter referred to as "Licensed Territory") except for the following countries (collectively "Asia"): Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand. LICENSEE shall not make or authorize any use, direct or indirect, of the Trade Name in any area, other than the Licensed Territory and any other geographical areas which may be covered from time to time during the Term hereof by amendment or by separate license agreements, if any, between the parties hereto, relating to the manufacture, sale and distribution of Designated Merchandise, as defined below, and shall not knowingly sell Designated Merchandise to persons who intend to resell it in any other area. It is understood and agreed, however, that some part or all of the Designated Merchandise may be manufactured outside of the Licensed Territory. (c) The initial term of this license shall begin January 1, 2003 and extend through December 31, 2012 (the "Initial Term"), subject to any extension or extensions thereafter, as provided in Section 3 hereof (the "Term"). 2 (d) For the purpose hereof, the Trade Name shall mean the names "VIDAL SASSOON" and "VS SASSOON" and all rights, registrations and entitlements thereto, as well as any portions, simulations or variations thereof, together with all applications, registrations and filings with respect to the Trade Name, and any renewals and extensions of any such applications, registrations and filings. LICENSEE acknowledges that P&G may not have the exclusive right to some variations or portions of the Trade Name, including the initials "VS," and for such variations or portions, LICENSEE is only acquiring the right to use such variations or portions in the same manner as P&G may be permitted to use said variations or portions. (e) For the purposes hereof, "Designated Merchandise" shall mean those items listed on Exhibit "A" attached hereto. By January 31 of each year, LICENSEE shall furnish P&G with a list of items it is manufacturing, selling and distributing into the Licensed Territory at that time. In the event LICENSEE wishes to so manufacture, sell or distribute any product outside the scope of the Designated Merchandise, it shall so notify P&G in writing, and P&G, in its sole and absolute discretion, shall have thirty (30) days to accept or reject such product. P&G must so specifically state the reason or reasons for its disapproval in its written notice of rejection. (f) In the event P&G desires to manufacture, sell or distribute in Licensed Territory products bearing the Trade Name which are not within the scope of the Designated Merchandise, P&G shall notify LICENSEE in writing of such fact, and LICENSEE shall have ninety (90) days within which to notify P&G either that it desires to manufacture, sell or distribute such product in the Licensed Territory under the terms contained herein, or that it does not so desire to manufacture, sell and distribute such product. In the event LICENSEE does not respond within said ninety (90) day period, or notifies P&G that it does not desire to manufacture, sell and distribute such product under the terms contained herein, P&G shall have the right to itself 3 manufacture, sell and distribute such product, or to offer to another party or parties, on any terms, the right to manufacture, sell and distribute such product. (g) In the event that LICENSEE notifies P&G that it desires to so market a proposed product by P&G as provided in Paragraph 1(f) above, then LICENSEE shall have the right to manufacture, sell and distribute such product in the Licensed Territory under the terms and conditions contained herein; provided however, that in the event LICENSEE has not, within a reasonable period of time from the date LICENSEE notified P&G of its desire to so market such product, made a good faith effort to manufacture, sell and distribute substantial quantities of such product in the Licensed Territory, then P&G shall have the right to itself manufacture, sell and distribute, or to appoint another entity to manufacture, sell and distribute such product. (h) LICENSEE will cooperate with P&G in the execution, filing and prosecution of any trademark applications and registered user agreements that P&G may desire to file at its own expense and for that purpose LICENSEE will supply to P&G from time to time such samples, containers, labels and similar material as may reasonably be required. In the event this Agreement is terminated, LICENSEE agrees to execute whatever documents are necessary to terminate the registered user agreements and this obligation shall survive the termination of this Agreement. SECTION 2 - TERMS OF PAYMENT (a) LICENSEE shall pay LICENSOR a non-refundable licensing fee of two million dollars ($2,000,000.00) within ten (10) days of signing this Agreement. (b) Subject to adjustment as provided below, LICENSEE shall pay to P&G a royalty equal to *** of the Net Sales of all Designated Merchandise for each License Year of the Term - ------------------------ *** Confidential material redacted and filed separately with the Commission. 4 specified herein, or the Minimum Annual Royalty, as hereinafter defined, whichever is greater. The term Net Sales shall mean the Gross Sales (as defined below) of the Designated Merchandise by LICENSEE, its affiliated, associated or subsidiary companies, less Allowable Adjustments (as defined below) not to collectively exceed *** of Gross Sales. "Gross Sales" shall mean the consolidated gross dollar value of sales to third persons obtained by multiplying the number of items of Designated Merchandise shipped (net of returns credited and/or received), by LICENSEE's assigned price for each such item exclusive of, and before allowance for or deduction of, any Allowable Adjustments. The term "Minimum Annual Royalty," as used herein, shall be *** per year, subject to adjustment as provided below. Royalties payable hereunder shall be reduced by an amount equal to all expenditures made by LICENSEE for advertising; provided, however, that such reduction shall not exceed *** of the amount actually payable in such year. Amounts paid for advertising may be carried forward and reduce royalties for a period of 12 months after the date of expenditure. In addition, Royalties payable hereunder shall be reduced by an additional ***, and redirected into advertising as set forth above, if and when: (i) VIDAL SASSOON shampoo dollar share falls below *** for *** as measured by Information Resources, Inc., A. C. Nielsen, or another nationally-recognized market share data provider; or (ii) VIDAL SASSOON hair care products cease to be sold in the United States of America to ***, or (iii) P&G decides to discontinue or suspend sale of VIDAL SASSON hair care products in the retail channel of distribution in the United States of America. - -------------------- *** Confidential material redacted and filed separately with the Commission. 5 Such reduction shall continue until dollar share meets or exceeds *** for ***, if applicable, or so long as either of items (ii) or (iii) is still occurring in the United States of America. In no event, however, shall Royalty payable to P&G be less than *** per year. Minimum Annual Royalty shall be prorated for any partial year(s) at the beginning or end of the Initial or any renewal Term. "Allowable Adjustments" shall be deemed to include but not be necessarily limited to: ***. For the purpose of calculating Net Sales, it is understood, without limitation, that no deduction shall be made for cash discounts, uncollectible accounts and freight costs or freight allowances in the manufacture, sale or distribution of Designated Merchandise. Net sales shall not include sales by LICENSEE to P&G or any related or affiliated company thereof. (c) *** For purposes hereof, a Newly Developed Item of Designated Merchandise shall mean a new item of Designated Merchandise different in design, overall appearance and componentry from any currently existing item of Designated Merchandise, and which requires the development and production of new designs, tooling and molds, and the expenditure of significant monies in engineering, development and/or testing. LICENSEE shall submit a new design proposal to P&G for P& G's written determination that such new design shall be considered a Newly Developed Item of Designated Merchandise before such new design is in the manufacturing stage. Such determination by P&G shall be final. *** P&G's determination under this provision is not a Merchandise Dispute subject to arbitration pursuant to Section 3(e) hereof. (d) Royalty payments shall be based on U.S. dollar calculations and paid in U.S. - ------------- *** Confidential material redacted and filed separately with the Commission. 6 dollars. Exchange rates used to convert local currency sales to U.S. dollars shall be the actual average monthly rates of New York banks as published in the Wall Street Journal. (e) Royalty payments shall be due and payable by LICENSEE sixty (60) days after completion of each calendar quarter year of each License Year during the Term hereof. For purposes of this Agreement, the first License Year shall be defined as the period ending December 31, 2003, and each subsequent License Year shall be defined as the twelve (12) month period commencing January 1 of each year and ending December 31 of the same year. The first royalty payment due under this License Agreement shall be for the quarter ending March 31, 2003. No less than twenty-five percent (25%) of the Minimum Annual Royalty applicable to each License Year shall be payable each calendar quarter under this Agreement, except that payments within each License Year shall be determined based on cumulative Net Sales within the year. (f) In this regard, all moneys due as royalty payments under this Agreement shall be payable in United States Dollars by bank wire transfer of immediately available funds to the following account: *** Please reference "Royalty: Vidal Sassoon/Helen of Troy." Confirmation via fax should be sent to: The Procter & Gamble Company General Accounting TE-11 GO One Procter & Gamble Plaza P.O. Box 599 Cincinnati, OH 45202 (513) 983-7202 - --------------- *** Confidential material redacted and filed separately with the Commission. 7 with copy to: The Procter & Gamble Company Attention: Contact Administration P.O. Box 330176 West Hartford, CT 06133-0176 Telephone: (860) 236-8002 Fax: (860) 236-5515 (g) Within sixty (60) days after the end of each quarter, LICENSEE shall prepare and issue to LICENSOR verified reports for each Quarter in the English language in a form mutually acceptable to LICENSEE and LICENSOR, and showing separately: A) Total number or amount of Designated Merchandise by items sold, delivered, provided, or otherwise disposed of by LICENSEE, B) Gross Sales, C) Itemized deductions and returns by Designated Merchandise, used to calculate Net Sales, D) The royalties accrued during the quarter and payable to LICENSOR by LICENSEE. If no sales, deliveries, or dispositions of Designated Merchandise were made during the reporting period, a report to that effect shall be prepared and issued to LICENSOR within sixty (60) days after the end of each quarter. LICENSEE shall transmit the aforementioned reports to the following address The Procter & Gamble Company Attention: Contract Administration P.O. Box 330176 West Hartford, CT 06133-0176 Telephone: (860) 236-8002 Fax: (860) 236-5515 SECTION 3 - TERMINATION; OPTION TO EXTEND (a) Unless sooner terminated by reason of the application of subsections (d), (e), (f) or (g) of this Section 3, this Agreement shall terminate at the end of the Initial Term hereof; provided however, that LICENSEE shall have the option to extend this Agreement and all of the terms and conditions hereof, for an additional ten (10) year period (the "Extension") from 8 January 1, 2013 to December 31, 2022, if LICENSEE has Net Sales in the last License Year of the Initial Term equal to or exceeding the "Adjusted Sales Amount" (as defined below) at actual exchange rates. In addition, LICENSEE shall have one further option to extend this Agreement and all of the terms and conditions hereof, for an additional ten (10) year period from January 1, 2123 to December 31, 2032, if LICENSEE has the Net Sales in the last License Year of the Extension term equal to or exceeding the "Adjusted Sales Amount" at actual exchange rates. In the event that LICENSEE is qualified to exercise, and elects to so exercise, its option to extend this Agreement, it shall do so by giving written notice of its intention to P&G no later than six months prior to the expiration of the Initial Term or Extension term, as applicable; provided however, that if the subsequent accounting furnished by LICENSEE to P&G for such last License year shall reflect that LICENSEE is not qualified to so exercise such option, then this Agreement shall terminate as of the last day of the next calendar month following the month in which written notice is given by P&G to LICENSEE of its failure to so qualify to extend the term hereof. In the event of the occurrence of any act beyond the control of LICENSEE specified in Section 15(k) which continues for a period of one (1) month or more during the final License Year of the Initial Term, then the Net Sales for that License Year required to entitle LICENSEE to exercise its option to extend shall be prorated based on the actual portion of such License Year not so disrupted. For purposes of this Section 3, the "Adjusted Sales Amount" for any License Year shall be an amount equal to the lesser of; (i) *** multiplied by a fraction, the numerator of which shall be the "Consumer Price Index" as announced by the Bureaus of Labor Statistics, United States Department of Labor, for the month of January of such year, and the denominator of which shall be the "Consumer Price Index" for the month of January 2003 - ------------------- *** Confidential material redacted and filed separately with the Commission. 9 (provided, however, in no event will the annualized increase in the numerator be more than ***); (ii) the average of LICENSEE'S Net Sales in the prior three License years. (b) Notwithstanding the provisions of Section 3(a) above, LICENSEE shall nonetheless have the option to extend this Agreement through the Extension Period, if; (i) LICENSEE shall have Net Sales in the last License Year of the Initial Term or Extension term, as applicable, in an amount equal to or exceeding *** of the Adjusted Sales Amount; and (ii) LICENSEE pays to P&G additional royalties at the rate specified in Section 2(a) of this Agreement sufficient to provide P&G with that amount it would have been paid had LICENSEE had the Net Sales in such License Year equal to the Adjusted Sales Amount. (c) If LICENSEE exercises any option to renew, it shall pay to P&G a renewal fee in an amount equal to *** of the Net Sales for a year in which the option to renew is exercised. Such renewal fee shall be payable as follows: one-third (1/3) on the 90th day after the first day of the applicable renewal term, one-third (1/3) on the first anniversary of the first day of the renewal term, and one-third (1/3) on the second anniversary of the first day of the renewal term. (d) The failure of either party to pay any sum due hereunder within fifteen (15) days of the date specified herein shall constitute a default hereunder. Thereafter, the non-defaulting party may give written notice of such non-payment. All payments made during the fifteen (15) day period commencing with the date such notice is received by the defaulting party shall bear interest at the annual interest rate identified as the "Prime Rate" in the Money Rates column published each day in the Wall Street Journal, and defined therein as the Base Rate on corporate loans posted by at least 75% of the nation's 30 largest banks, as of the date of receipt of such notice, plus one and one-half percent (1-1/2%), or the maximum rate allowed by applicable law, - ---------------------- *** Confidential material redacted and filed separately with the Commission. 10 whichever amount is less. In the event full payment is not received by the end of this fifteen (15) day period, then for the next thirty (30) days commencing upon the expiration of this fifteen (15) day period the defaulting party shall, in addition to paying interest on all unpaid amounts at the interest rate specified above, pay as liquidated damages and not as a penalty, the sum of One Thousand Dollars ($1,000) per day for each day during this thirty (30) day period that payment is not received, which sum represents a reasonable endeavor by the parties hereto to estimate a fair compensation for the foreseeable losses that might result from such default. If full payment is not received by the end of this thirty (30) day period, this Agreement may be terminated in writing at the option of the non-defaulting party. Acceptance by the non-defaulting party of payment in full after the aforementioned period shall act as a waiver by the non-defaulting party of its right to terminate this agreement by reason of such default. It is understood and agreed that the defaulting party shall have the right to continue to make payments on amounts owed as provided herein until the expiration of the above-stated final thirty (30) day period. (e) LICENSEE or P&G may terminate this Agreement upon the other party's breach or default of the terms hereof (except the failure to pay money when due), which shall continue for a period of thirty (30) days after written notice specifying such default. Notwithstanding the above, in the event said breach or default is cured within, said thirty (30) day period, said notice of default shall be deemed cancelled and rescinded. In the event of a breach or default which cannot reasonably be cured within said thirty (30) day period, the date for termination shall be extended to that date upon which said breach or default could reasonably be cured; provided, that LICENSEE or P&G has promptly and in good faith commenced to cure the default within said thirty (30) day period and continues expeditiously thereafter its efforts to cure the same until such default has been remedied. Merchandise Disputes, as defined below, shall not be considered breaches or defaults and shall be resolved by binding arbitration upon the election of 11 either party, which, it is understood, shall be the exclusive method of resolving such Merchandise Disputes. Merchandise Disputes shall be defined to include only claimed breaches relating to the Designated Merchandise and its specifications, designs, standards and advertising, but shall in no event include any disputes over the use of the Trade Name or trademarks licensed hereunder or any dispute regarding the payment of money. Such arbitration shall be held in Cincinnati, Ohio, in the offices of a neutral third party. Each party hereto may appoint one arbitrator from a panel of names supplied for that purpose by the American Arbitration Association. The two (2) arbitrators so selected shall agree upon a third arbitrator from such panel of names. The decision of two arbitrators shall be controlling and the judgment based on the award may be entered in the Superior Court of the State of Ohio or any other court having jurisdiction thereover. The losing party shall pay all costs. The Rules of the American Arbitration Association and the Arbitration laws of the State of Ohio shall apply. (f) P&G shall have the sole option to terminate this Agreement if LICENSEE is acquired by another entity which competes in the hair care category, such option to be exercised within thirty (30) days after the event giving rise to such option. If P&G is given a comprehensive written description of a proposed acquisition, P&G will inform LICENSEE in writing as to whether it will or will not exercise its option to terminate, within 30 days of P&G's receipt of the proposed acquisition description. (g) Upon the termination of this Agreement, for any reason whatsoever, LICENSEE shall immediately discontinue its use of the Trade Name in connection with the manufacture, marketing and distribution of Designated Merchandise, and thereafter will no longer use or have the right to use the Trade Name in any form or manner whatsoever; provided however, that 12 LICENSEE shall have a period of up to *** after termination of this Agreement (hereinafter the "Disposal Period") in which to use the Trade Name in making orderly disposition of inventory in accordance with the terms of this Agreement, of Designated Merchandise manufactured or actually ordered and in production by LICENSEE prior to the termination date. Within fifteen (15) days after termination, LICENSEE shall submit to P&G a schedule of the inventory, including all of LICENSEE's purchase commitments, of Designated Merchandise bearing the Trade Name then on hand, in production or on order for production. Within five (5) days after receipt of the aforementioned schedule of inventory, P&G shall be required to advise LICENSEE in writing of P&G's decision to either: (i) permit LICENSEE to dispose of the Designated Merchandise then on hand during the Disposal Period, as set forth above, or (ii) buy all previously unsold Designated Merchandise for a price, payable in cash within ninety (90) days after P&G's election, equal to LICENSEE's landed cost (subject to audit by P&G auditors), including any outstanding letters of credit or purchase commitments for inventory to be landed in the United States within six (6) months of the date P&G notifies LICENSEE of its intent to buy said inventory. (h) Royalties shall be due P&G for all sales made during the Disposal Period and shall be paid no later than sixty (60) days after the end of said period; provided however, that in the event P&G elects to purchase the inventory then on hand, no royalty payment shall be payable with respect thereto. SECTION 4 - EXCLUSIVITY (a) Nothing in this Agreement shall be construed to prevent P&G from granting any other licenses for the use of the Trade Name or from utilizing the Trade Name in any manner - ------------------------ *** Confidential material redacted and filed separately with the Commission. 13 whatsoever, except that P&G will neither itself use the Trade Name in connection with the sale of Designated Merchandise in the Licensed Territory during the Term hereof, other than in connection with the sale or promotion of Designated Merchandise purchased by P&G or its affiliates from LICENSEE, nor will it grant any other licenses for the Licensed Territory to take effect during the Term of this Agreement or the Disposal Period, for the use of Trade Name in connection with the sale of Designated Merchandise. Further, P&G agrees that during the Term hereof, it shall not enter into any arrangement with any person, firm or corporation granting the right to use the Trade Name in connection with the Designated Merchandise for ultimate disposition outside the Licensed Territory, knowing or having reason to believe that the person, firm or corporation intends to sell or distribute, directly or indirectly, Designated Merchandise within the Licensed Territory. In the event LICENSEE advises P&G in writing that merchandise similar to the Designated Merchandise bearing the Trade Name is being sold or distributed in the Licensed Territory by a third party, P&G will take reasonable steps, including (i) notifying the appropriate Customs Office(s) of such improper sales or distribution, and requesting assistance in preventing such improper sales or distribution; and, (ii) initiating litigation if it determines, in its sole discretion, that to do so would be feasible and successful, to prevent any further distribution or sale of such merchandise by such third party in the Licensed Territory. (b) LICENSEE agrees not to sell in *** products of the type or description identified as Designated Merchandise under any other trademark or brand other than that covered by this License Agreement as long as this License Agreement remains in effect; provided, however, that nothing herein is intended to restrict or otherwise prohibit LICENSEE from marketing products of the type or description identified as Designated Merchandise under private labels of specific - ---------------- *** Confidential material redacted and filed separately with the Commission. 14 customers or as a generic product that carries no consumer advertising provided further such products utilize different aesthetics and different molds, and provided further that LICENSEE shall not manufacture or distribute any products that are sold in the Licensed Territory which ***. Notwithstanding the foregoing, however, LICENSEE shall be entitled to sell products under the following trademarks brands: ***. Additionally, LICENSEE can market products directly to the professional trade pursuant to Section 9. SECTION 5 - STANDARDS OF MERCHANDISE (a) LICENSEE agrees that all Designated Merchandise shall be manufactured according to standards equivalent to the Underwriters Laboratories for the relevant countries within the Licensed Territory, or by such comparable governmental or standard facility certifying electrical appliances, and bear its seal, and be in full compliance with all applicable standards and regulations in Licensed Territory for all merchandise sold. P&G shall have an unconditional right of approval over any and all designs, construction and component parts of Designated Merchandise, including without limitation, motors, brushes, plastic molded parts, switches and heating coils, except that with respect to such component parts, P&G may not unreasonably withhold its approval, and LICENSEE agrees not to sell any design of Designated Merchandise with the Trade Name without P&G's prior written approval. As long as LICENSEE shall comply with the standards set forth herein, P&G may not withdraw its approval for any design of Designated Merchandise after LICENSEE has commenced to manufacture and sell such Designated Merchandise. Approvals required of P&G hereunder shall be requested in accordance with and governed by the terms of Section 7(e) hereof. (b) During the term hereof, P&G shall have the right to notify LICENSEE at any time - ------------------- *** Confidential material redacted and filed separately with the Commission. 15 that all or any of the Designated Merchandise being manufactured, sold and distributed by LICENSEE under the Trade Name does not meet the design or quality standards as previously approved by P&G pursuant to Section 5(a), which notice shall list the specific merchandise and specify in what respects such merchandise fails to meet such standards. LICENSEE agrees that the Trade Name shall not be placed on any Designated Merchandise that does not meet such standards, and upon receipt of notice that a particular model of the Designated Merchandise does not meet such standards, shall not place the Trade Name on any further units of that model of the Designated Merchandise until such as P&G agrees in writing that such Designated Merchandise has met such quality standards. In the event that any Designated Merchandise cannot be sold by LICENSEE as a result of the provisions of this Section 5(b), LICENSEE and P&G agree to negotiate in good faith to provide for the disposition of such Designated Merchandise. (c) In furtherance of the provisions of Section 5(a), LICENSEE agrees to permit P&G, its agents and employees to have access, during normal business hours and after reasonable notice, to its manufacturing and warehouse facilities, or to arrange, if requested, for P&G, its agents or employees to have access to the facilities of is subcontractors. P&G shall have the right to open and inspect shipping cartons, and make such other tests and inspections as it shall deem necessary to ensure the quality of the Designated Merchandise. P&G agrees not to disclose to third parties any proprietary or confidential information obtained as a result of or during any such visit, investigation or inspection. SECTION 6 - ACKNOWLEDGMENT AND PROTECTIONS OF THE TRADE NAME (a) LICENSEE hereby acknowledges and agrees that: (i) LICENSEE shall acquire no right in or to the Trade Name by virtue of this Agreement, except for the rights incident to the grant of the license hereunder for the term herein specified; 16 (ii) LICENSEE recognizes the great value of the Trade Name and the goodwill associated therewith in the Licensed Territory, and acknowledges that the Trade Name and all rights therein and goodwill pertaining thereto, belong exclusively to P&G; (iii) The consuming public now associates the Trade Name with products and service of consistently high quality; and (iv) The conditions, terms, restrictions, covenants and limitations of this Agreement are necessary, equitable, reasonable and essential to assure the consuming public that all goods or services sold under the Trade Name are of the same consistently high quality as sold by others who are or may hereafter be licensed to sell merchandise or services under the Trade Name. (b) Both parties acknowledge that the Trade Name has become established among the consuming public as representing goods and services of high quality, and further agree that it is in the mutual interest of the parties hereto to protect and foster the value and consumer acceptance of the Trade Name. P&G will take reasonable and cost effective steps to protect the goodwill of the Trade Name. (c) To help protect the good reputation of the Trade Name, LICENSEE will, make a good faith effort to handle consumer complaints to satisfactory conclusions. SECTION 7 - APPROVAL OF LABELING, PACKAGING AND ADVERTISING (a) LICENSEE agrees that all labels and tags, if any, attached to units of Designated Merchandise sold by LICENSEE under the Trade Name shall be in form and design, approved in writing by P&G. Said labels and tags, if any, shall comply with all applicable statutes and with the rules and regulations promulgated by any governmental agency, including such designations as may be required or permitted to indicate the proprietary nature of the Trade Name. 17 (b) The Trade Name shall be physically affixed and displayed on each item of Designated Merchandise manufactured or sold by LICENSEE pursuant to the terms hereof. P&G shall have the right to approve the size, coloring, lettering, placement and manner of use of the Trade Name, and LICENSEE agrees that no items of Designated Merchandise will be sold without LICENSEE first obtaining P&G's prior written approval of such placement and manner of use. (c) During the Term hereof and any extension thereof, or the Disposal Period, LICENSEE may use the Trade Name in advertisements of the Designated Merchandise in electronic or print media, trade papers, direct mail and advertising mats for retailers. All advertising and promotional activities, including specifically but not limited to themes, media, standards, policies and uses to the extent such items are within LICENSEE's control, shall be subject to P&G's prior written approval. Any advertising or promotional format which has been approved by P&G may be used by LICENSEE for other items of Designated Merchandise without obtaining the additional approval of P&G. (d) If any items of Designated Merchandise are marketed in a carton, container, packing or wrapping material bearing the Trade Name, written approval of P&G must first be obtained. (e) All approvals or disapprovals required of P&G pursuant to the provisions of Sections 5(a), 7(a), 7(b), 7(c) or 7(d) hereof shall be given by P&G in writing no later than thirty (30) days following receipt of a written request from LICENSEE requesting such approval. If LICENSEE does not receive notice of disapproval from P&G within said thirty (30) days, then LICENSEE may deem such request approved. In any case in which P&G disapproves of any request made by LICENSEE pursuant to the aforementioned sections, P&G shall state, with sufficient specificity so as to allow LICENSEE an opportunity to correct any defects, the reasons 18 for such disapproval. In any event, P&G shall not unreasonably withhold, delay or condition any required approval. SECTION 8 - MAINTENANCE OF RECORDS (a) LICENSEE shall keep true and accurate books of account and records in accordance with generally accepted accounting principles, consistently applied covering all transactions relating to the license hereby granted, and P&G and its duly authorized representatives shall, after reasonable notice, have the right at all reasonable hours of the day to an examination of such books of account and records, and of all other documents and materials in the possession or under the control of LICENSEE with respect to the subject matter and terms of this Agreement, and shall have free and full access thereto for such purposes and for the purpose of making extracts therefrom. All books of account and records shall be kept available for at least four (4) years after the License Year to which they pertain. P&G agrees not to disclose to third party any proprietary or confidential information obtained as a result of such examination. (b) During the term of this Agreement, LICENSEE agrees to furnish to P&G simultaneously with its quarterly royalty payment a statement verified by LICENSEE's Chief Financial Officer showing the number, description, gross sales price and net sales price of the item of Designated Merchandise distributed or sold by LICENSEE in the Licensed Territory during the quarter just ended, along with a statement showing how the royalty was computed. (c) Within one hundred twenty (120) days of the completion of each fiscal year of LICENSEE during which this Agreement shall have been in effect, LICENSEE shall provide P&G with a statement showing all sales of Designated Merchandise sold under the Trade Name during such fiscal year, along with a computation of the royalties paid and payable hereunder with respect to such sales. In the event P&G shall question LICENSEE's determination of Net 19 Sales, it shall have the right, to be exercised only within four (4) years of the date P&G receives the aforementioned statement, to require LICENSEE's independent public accounting firm to audit the Net Sales for the License Year, and to certify the amount thereof. In the event that Net Sales, as certified by said accounting firm, shall exceed by Two Percent (2%) or more the Net Sales as shown on the certificate provided by P&G by LICENSEE, then LICENSEE agrees that it shall pay the cost of the Net Sales audit. In all other events, P&G shall pay the cost of said Net Sales audit. (d) Within thirty (30) days following the last day of each calendar month during the term hereof, LICENSEE agrees to provide, upon request of P&G, a listing, prepared upon LICENSEE's data processing equipment, of each invoice for Designated Merchandise shipped during said month. SECTION 9 - OWNERSHIP OF DESIGNS P&G and LICENSEE agree that LICENSEE shall not, in the countries of ***, use, nor license the use of, the molds, tooling and designs created to produce "Type A" (as set forth on Exhibit A) Designated Merchandise to be sold in retail outlets selling such products to the consuming public. Notwithstanding the above, LICENSEE may use such molds, tooling and designs for the production of such items of Designated Merchandise to be sold under LICENSEE'S trade names to hair salons and beauty supply houses for the professional trade. Upon the termination hereof, P&G shall have the right to purchase all or any part of such molds and tooling, at a price based upon the cost of such items to LICENSEE depreciated on a straight-line basis over a period of five (5) years, but not less than ten percent (10%) of the cost of such item. LICENSEE agrees it shall not, at any time after the termination hereof, use, or - -------------------- *** Confidential material redacted and filed separately with the Commission. 20 license the use of any such mold, tooling or the design for that particular mold or tooling purchased by P&G, except, however, that LICENSEE shall be entitled to sell products utilizing such designs to hair salons and beauty supply houses with an agreed credit to the mold purchase price. This excludes sale to an outlet who sells to the consuming public. LICENSEE shall, upon the termination hereof however, be free to use or license the use of any such mold or tooling, or any design therefor, not purchased by P&G as provided herein. SECTION 10 - CREATIVE SERVICES P&G agrees that upon LICENSEE's written request, P&G shall provide LICENSEE with creative services required for advertising and promoting Designated Merchandise. LICENSEE agrees to pay to P&G, P&G's actual out-of-pocket costs or applicable fees, plus twenty-five percent (25%) thereon, for all such creative services performed under P&G's direction. SECTION 11 - ASSIGNMENTS, SUBLICENSES (a) The rights under this Agreement may only be assigned or sublicensed by LICENSEE with the prior written consent of P&G. For purposes of this Agreement, it is agreed that in the event this Agreement is assigned in connection with and as a part of the sale of at least eighty percent (80%) of all of LICENSEE's assets, based upon the value of such assets on LICENSEE's most recent audited financial statement, to a single individual or entity who or which does not compete in the hair care category, then such sale or transfer of this Agreement shall not be deemed an assignment of this Agreement. P&G consents to an assignment or sublicense of the rights under this Agreement to an affiliate of LICENSEE provided LICENSEE informs P&G and LICENSEE, and its affiliate, Helen of Troy Texas Corporation, are guarantors of all obligations to be fulfilled by such assignee or sublicensee. 21 (b) Nothing contained in Subsection (a) above shall be deemed to prohibit LICENSEE from appointing an exclusive distributor to sell the Designated Merchandise in the Licensed Territory, or any part thereof. (c) LICENSEE shall have the right to subcontract the actual manufacture of the Designated Merchandise bearing the Trade Name, so long as said Designated Merchandise meets the quality standards set forth herein. SECTION 12 - INDEMNIFICATION (a) LICENSEE hereby indemnifies and hold P&G, its parent, affiliates and subsidiaries and any of their employees, directors, officers, agents or other representatives harmless from any claims, suits, loss or damage (including reasonable attorneys' fees) arising out of any allegedly unauthorized use of any patent, process, idea, method, industrial design or devise by LICENSEE in connection with the Designated Merchandise manufactured and sold pursuant to this Agreement, and also, from any claims, suits, loss and damage for personal injury, death or property damage arising out of alleged defects in the Designated Merchandise, or arising out of the advertisement, sale or promotion of the Designated Merchandise. Without limiting such indemnification and in addition to it, LICENSEE shall obtain, at its own expense, liability insurance from a recognized insurance company (approved in writing by P&G), providing protection in the amount of at least Ten Million Dollars ($10,000,000) for P&G against any claims, suits, loss or damage arising out of any alleged defects in the Designated Merchandise, personal injury, death or property damage resulting from LICENSEE's activities in connection herewith. As proof of such insurance, a certificate of insurance naming P&G and appropriate parents, affiliates and subsidiaries as may be reasonably requested by P&G as an insured party shall be submitted to P&G by LICENSEE. As used in this Section 12(a), P&G shall also include the officers, directors, agents and employees of P&G or any of its parent, 22 subsidiaries or affiliates, and any persons, the use of whose name may be licensed hereunder. In the event LICENSEE cannot obtain the insurance coverage set forth herein, or it would be more economical for P&G to obtain the coverage, P&G agrees to obtain such coverage and LICENSEE agrees to reimburse P&G for the cost thereof. (b) P&G shall indemnify and hold LICENSEE harmless from and against any and all claims, suits, loss or damage (including reasonable attorneys' fees) arising from infringement of statutory or common law trademark or trade name rights of others through the use of the Trade Name hereunder (including specifically, without limitation, any license agreement or understanding by which P&G licensed others to produce merchandise included within the scope hereof), and P&G upon written notice from LICENSEE, shall defend at its own expense any litigation instituted by others against LICENSEE resulting therefrom. LICENSEE agrees to cooperate and assist P&G in connection with any litigation arising pursuant hereto. LICENSEE shall have the right, if it so elects, to conduct the defense of any such litigation brought against it at its own cost and expense and by its own counsel, and P&G may at its option join therein, but LICENSEE shall in such case pay its own costs and expenses of such litigation. (c) LICENSEE shall apprise P&G in writing as soon as practicable of any infringement of the Trade Name which comes to the attention of LICENSEE. P&G, at its sole cost and expense and in its own name, may prosecute and defend any action or proceeding which P&G deems necessary or desirable to protect the Trade Name, including but not limited to actions or proceedings involving infringement of the Trade Name. LICENSEE, upon written request by P&G, shall join P&G in any such action or proceeding at P&G's sole cost. P&G may prosecute and defend at its sole cost and expense and in its own name any action or proceeding to protect its own designs or styles. LICENSEE shall not commence any action or proceeding alleging infringement thereof without the prior written consent of P&G and shall not defend any 23 such action unless it shall first make written demand upon P&G so to do. Any and all damages recovered in any action or proceeding commenced by P&G shall belong solely and exclusively to P&G. (d) P&G shall have no liability to LICENSEE or to any other person for any damages awarded or recovered against LICENSEE or such other person based on any action or proceeding alleging any violation of any antitrust, trade regulation or similar statue, or unfair competition involving any acts or omissions of LICENSEE. (e) Nothing in this Agreement shall create a joint venture or establish the relationship of principal and agent, or any other relationship of a similar nature between the parties. SECTION 13 - P&G'S WARRANTIES P&G represents and warrants that, within the Licensed Territory, it has sole and exclusive ownership rights to the Trade Name; that it has authority to enter into this Agreement; that no other person, firm or corporation has nor will have, during the Term hereof, the right to use the Trade Name or any variant thereof, with respect to the Designated Merchandise within the Licensed Territory or in violation of the terms and provisions of this Agreement; that P&G, as of the effective date hereof, has not licensed the use of the Trade Name with respect to the Designated Merchandise other than pursuant to agreements with LICENSEE; and, that the Trade Name is valid, subsisting and in full force, and does not infringe upon the rights of third parties in those countries where the Trade Name is registered and used. P&G additionally represents and warrants that it has the right to license the Trade Name in connection with the manufacture, sale and distribution of the Designated Merchandise in the Licensed Territory, and that there are no agreements existing as of the effective date hereof restricting P&G's right to use or license the use of Trade Name in connection with the manufacture, sale and distribution of the Designated Merchandise in the Licensed Territory. P&G agrees to maintain and keep in full force and effect 24 the current and future registrations of the Trade Name, as it relates to the Designated Merchandise, in the Licensed Territory, throughout the Term hereof. The Trade Name is currently registered in the jurisdictions listed on Exhibit "B" attached hereto. In addition, P&G will register the Trade Name in any jurisdiction in the Territory in which it is not registered at the cost of LICENSEE, which is agreed to be $2,500.00 per registration. SECTION 14 - BANKRUPTCY (a) If LICENSEE is adjudicated bankrupt, or if a petition in bankruptcy is filed against LICENSEE by a third party or parties, and such petition is not dismissed or transferred to a reorganization proceeding under any provision of the Bankruptcy Code within ninety (90) days after the date of such filing, or LICENSEE make a general assignment of the benefit of its creditors or an arrangement pursuant to any bankruptcy or reorganization law (except the filing of a reorganization proceeding under any provision of the Bankruptcy Code) or discontinues its business, or if a receiver is appointed for it or its business and is not withdrawn within ninety (90) days of the date of such appointment, it shall be deemed a default hereunder entitling P&G to terminate this Agreement upon written notice of such effect. In the event this Agreement is terminated as a result of such default, except as provided in Section 3(h), LICENSEE, its receivers, representatives, trustees, agents, administrators, successors or assigns shall have no further rights hereunder. It is understood and agreed that nothing contained in this Section 14 shall be deemed to relieve LICENSEE of any obligation to pay the royalties due hereunder by reason of the sale of Designated Merchandise. SECTION 15 - GENERAL PROVISIONS (a) All notices and other communications which are required or which may be given under the provisions of this Agreement shall be in writing and shall be sent by telex or mailed by registered or certified mail, postage prepaid, as follows: 25 If to P&G: The Procter & Gamble Company 1 Procter & Gamble Plaza Cincinnati, OH 45202 U.S.A. Attention: Vice President - External Business Development & Global Licensing With a copy to: The Procter & Gamble Company 1 Procter & Gamble Plaza Cincinnati, OH 45202 U.S.A. Attention: Associate General Counsel - Trademarks If to LICENSEE: Helen of Troy Limited A Barbados Company Whitepark House White Park Road P.O. Box 836E Bridgetown, Barbados Attn: Chairman of the Board, Chief Executive Officer, and President With a copy to: Helen of Troy L.P. One Helen of Troy Plaza El Paso, Texas 79912 Attn: Chief Executive Officer Fax No.: (915) 225-8001 With a copy to: Helen of Troy L.P. One Helen of Troy Plaza El Paso, TX 79912 Attn: General Counsel Fax No. (915) 225-8081 All notices and communications shall be effective upon the date on which they are received by the party to which they are required or permitted to be given. 26 (b) Whenever, pursuant to this Agreement, Licensor's approval is required, request for approval should be addressed to: External Business Development and Global Licensing Attention: K. M. Sammons The Procter & Gamble Company One Procter & Gamble Plaza, C-10 Cincinnati, Ohio 45202 or such other address as shall be designated by written notice. (c) In the event P&G approves, in accordance with Section 1(e), LICENSEE's manufacture, sale and distribution of any product not then within the scope of the Designated Merchandise, or in the event LICENSEE agrees to and actually commences the manufacture, sale and distribution of a product not then within the scope of the Designated Merchandise; as provided in Sections 1(f) and 1(g), then such product shall, as of the date of P&G's approval of such product or LICENSEE's acceptance and commencement of manufacture and sale of such product, be deemed to be included as part of the Designated Merchandise. (d) This Agreement sets forth the entire Agreement and understanding between the parties, and may not be orally changed, altered, modified or amended in any respect. To effect any change, modification, alteration or amendment, the same must be in writing, signed by the parties hereto. (e) Except as otherwise specifically limited herein, in the event that either party should breach or violate any of the covenants, representations or warranties contained in this Agreement, the other party shall be entitled to exercise any right or remedy available to it either at law or in equity. Such rights and remedies shall include but shall not be limited to termination (as provided herein), damages and injunctive relief. The exercise of any right or remedy available to a party shall not preclude the concurrent or subsequent exercise by it of any other right or remedy, and all rights and remedies shall be cumulative. 27 (f) Waiver of a particular default by either party shall constitute a waiver as to the particular default, but shall not constitute a waiver of any subsequent breach, whether or not of the same nature. (g) The parties hereto intend to comply with the laws of the individual countries where license rights exist. In the event that a representative of any governmental body within any individual country covered by this license asserts a bona fide claim that this Agreement, or any provision hereof, violates any law, and the parties hereto cannot mutually agree as to an assertion, either party may terminate that provision of this Agreement on ten (10) days notice therefor; subject to the other party's recourse to legal action, as herein provided, to contest such termination on the basis of whether such assertion is a bona fide claim or not. A bona fide claim shall be considered as one having sufficient merit as to be likely to prevail if finally litigated. (h) This Agreement shall be binding upon and inure to the benefit of the successors and assigns of both parties, subject to the requirements of obtaining consent to assignments provided hereinabove. (i) This Agreement is executed and delivered within the State of Ohio, and its expressly agreed that it shall be construed in accordance with the laws of the State of Ohio. (j) The titles set forth in this Agreement are for convenience only and shall not be considered as part of the Agreement in an respect, not shall they in any way affect the substance of any provisions contained in this Agreement. (k) Neither party shall be held responsible in any way for failure to perform their duties and obligations under this Agreement caused by strikes, accidents, riots, damage to or destruction of plant, inability of common carrier to make transportation or other causes beyond the control of such party; provided, however, that if either party shall fail of a period of one (1) year to perform this Agreement from any cause, whether beyond its control or not, the other 28 party commences on a continuing basis, the performance of its obligations hereunder during this one (1) year period, in which case the other party shall not be entitled to cancel this Agreement as a result of such nonperformance. (l) Each party warrants to the other that the warranting party has engaged no broker in connection with this Agreement. (m) All time limits stated in this Agreement are of the essence of this Agreement. (n) In the event that the existing license of Trade Name for any Designated Merchandise in all or any part of Asia shall expire or terminate, P&G shall first offer such license to LICENSEE and shall negotiate in good faith toward adding such area in Asia to the Territory. If no such agreement is reached within ninety (90) days following notice to LICENSEE of such opportunity, then P&G shall be under no further obligation to LICENSEE with respect to such opportunity. 29 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers and their corporate seals affixed the day anal year first above written. THE PROCTER, & GAMBLE COMPANY By: /s/ Jeffrey D. Weedman --------------------------------------- Printed Name: Jeffrey D. Weedman Title: Vice President Date: 12/19/02 HELEN OF TROY LIMITED By: /s/ Gerald J. Rubin --------------------------------------- Gerald J. Rubin, Chairman, Chief Executive Officer and President Date: 12/11/02 30 EXHIBIT "A" DESIGNATED MERCHANDISE Type A Electric, battery-operated and non-electric personal care appliances, as well as the accessories and attachments therefor, including, without limitation: Hair Dryers Hair Styling Irons and Flatteners Hot Air Hair Brushes Hot Hair Rollers Hair Styling Appliances Mirrors Hair Trimmers Shavers for beard/mustache grooming (excluding shavers designed for everyday removal of facial hair) Hair Clippers Type B Hair Brushes, Hair Combs, Hair Ornaments and Hair Accessories (including, without limitation, bobby pins and hair rollers) 31 EXHIBIT "B" JURISDICTIONS IN WHICH TRADE NAME IS REGISTERED [see attached listing] 32 VS SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPLICATION DATE APPLICATION NO INT'I CII REG. OWNER Japan IMAGINE VS SASSOON Registered 27-Apr-01 4471158 4-Feb-00 8528/2000 3 PGCo Australia THE EDGE BY VS SASSOON Registered 23-Sep-99 808055 23-Sep-99 808055 16 PGCo China THE EDGE BY VS SASSOON Registered 28-Dec-00 1496781 28-Sep-99 9900116356 16 PGCo Hong Kong THE EDGE BY VS SASSOON Registered 24-Sep-99 12120/2000 24-Sep-99 13422/1999 16 PGCo Japan THE EDGE BY VS SASSOON Registered 14-Apr-00 4376336 29-Sep-99 88231/1999 16 PGCo Singapore THE EDGE BY VS SASSOON Registered 24-Sep-99 1999/10742 24-Sep-99 1999/10742 16 PGCo Taiwan THE EDGE BY VS SASSOON Registered 1-Mar-01 933462 23-Sep-99 88047273 16 PGCo Australia VS SASSOON Registered 10-Jun-98 764466 10-Jun-98 764466 3,9,11,21,41,42 PGCo Australia VS SASSOON Registered 2-Aug-99 802218 2-Aug-99 802218 16 PGCo Cambodia VS SASSOON Registered 28-Jul-98 10756 9-Jun-98 10785 3 PGCo Cambodia VS SASSOON Registered 28-Jul-98 10757 9-Jun-98 10786 21 PGCo Cambodia VS SASSOON Registered 28-Jul-98 10786 23-Jun-98 10845 11 PGCo Cambodia VS SASSOON Registered 28-Jul-98 10785 23-Jun-98 10844. 9 PGCo Cambodia VS SASSOON Registered 28-Jul-98 10759 9-Jun-98 10788 42 PGCo Cambodia VS SASSOON Registered 28-Jul-98 10758 9-Jun-98 10787 41 PGCo Canada VS SASSOON Registered 16-Nov-01 TMA553,947 27-May-98 879948 3,11 PGCo China VS SASSOON Registered 7-Aug-01 1612400 25-Aug-98 9800097402 3 PGCo China VS SASSOON Registered 7-Jan-00 1351855 25-Aug-98 9800097403 11 PGCo China VS SASSOON Registered 28-Jan-00 1359890 25-Aug-98 9800097406 42 PGCo China VS SASSOON Registered 7-Aug-01 1612399 7-Dec-98 9800138178 3 PGCo China VS SASSOON Registered 21-Jan-00 1357216 25-Aug-98 9800097405 41 PGCo China VS SASSOON Registered 14-Apr-00 1383852 25-Aug-98 9800097404 21 PGCo China VS SASSOON Registered 7-Aug-01 1612398 7-Dec-98 9800138179 3 PGCo Hong Kong VS SASSOON Registered 20-Aug-98 11082/1998 20-Aug-98 11082/1998 3 PGCo Hong Kong VS SASSOON Registered 20-Aug-98 B13125/2000 20-Aug-98 11085/1998 21 PGCo Hong Kong VS SASSOON Registered 20-Aug-98 B13126/2000 20-Aug-98 11086/1998 41 PGCo Hong Kong VS SASSOON Registered 20-Aug-98 B13127/2000 20-Aug-98 11087/1998 42 PGCo Hong Kong VS SASSOON Registered 20-Aug-98 B13124/2000 20-Aug-98 11084/1998 11 PGCo Hong Kong VS SASSOON Registered 20-Aug-98 B13123/2000 20-Aug-98 11083/1998 9 PGCo India VS SASSOON Pending 22-Sep-98 820361 3 PGCo India VS SASSOON Pending 22-Sep-98 820362 21 PGCo India VS SASSOON Pending 14-Oct-98 823036 9 PGCo India VS SASSOON Pending 8-Oct-98 822171 11 PGCo Indonesia VS SASSOON Pending 31-Aug-98 D98 14860 21 PGCo Indonesia VS SASSOON Pending 13-Dec-99 D99 22351 3 PGCo Indonesia VS SASSOON Registered 8-Mar-00 442210 31-Aug-98 1998/14859 41 PGCo Indonesia VS SASSOON Registered 3-Aug-00 442214 31-Aug-98 J98 14865 42 PGCo Japan VS SASSOON Registered 24-Mar-00 4370060 12-Jan-99 2167/1999 11 PGCo Japan VS SASSOON Registered 1-Jun-01 4479180 12-Jan-99 1999/2165 3,21,41,42 PGCo
178 Marks VS SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPLICATION DATE APPLICATION NO INT'I CII REG. OWNER Japan VS SASSOON Registered 24-Mar-00 4370059 12-Jan-99 2166/1999 9 PGCo Kenya VS SASSOON Registered 17-Sep-98 47970 4-Sep-98 47970 3 RVI Korea (South) VS SASSOON Registered 10-Sep-99 56519 27-Aug-98 1998-6837 41 PGCo Korea (South) VS SASSOON Registered 10-Sep-99 56518 27-Aug-98 1998-6838 42 PGCo Korea (South) VS SASSOON Registered 11-Aug-99 452434 27-Aug-98 1998-21971 3 PGCo Korea (South) VS SASSOON Registered 19-Aug-99 453001 27-Aug-98 1998-21972 9 PGCo Korea (South) VS SASSOON Registered 30-Jul-99 452042 27-Aug-98 1998-21973 11 PGCo Korea (South) VS SASSOON Registered 31-Jul-99 452071 27-Aug-98 1998-21974 21 PGCo Lebanon VS SASSOON Registered 18-Nov-98 77786 18-Nov-98 77786 3 PGCo Macao VS SASSOON Registered 14-Feb-00 N/3572 25-May-98 3572 3 PGCo Macao VS SASSOON Registered 14-Feb-00 N/3622 16-Jun-98 3621 11 PGCo Macao VS SASSOON Registered 14-Feb-00 N/3621 16-Jun-98 3622 9 PGCo Macao VS SASSOON Registered 14-Feb-00 N/3569 25-May-98 3569 21 PGCo Macao VS SASSOON Registered 14-Feb-00 N/3570 25-May-98 3570 42 PGCo Macao VS SASSOON Registered 14-Feb-00 N/3571 25-May-98 3571 41 PGCo Malaysia VS SASSOON Pending 7-Sep-98 1998/10318 11 PGCo Malaysia VS SASSOON Pending 7-Sep-98 1998/10316 41 PGCo Malaysia VS SASSOON Pending 7-Sep-98 1998/10315 42 PGCo Malaysia VS SASSOON Pending 7-Sep-98 1998/10317 3 PGCo Malaysia VS SASSOON Pending 7-Sep-98 1998/10319 21 PGCo Malaysia VS SASSOON Registered 7-Sep-98 98010314 7-Sep-98 1998/10314 9 PGCo Mexico VS SASSOON Registered 31-Jul-98 583747 8-Jun-98 335251 3 PGCo Mexico VS SASSOON Registered 19-Jun-98 612180 19-Jun-98 336804 11 PGCo Mexico VS SA$SOON Registered 31-Jul-98 584015 19-Jun-98 336806 42 PGCo Mexico VS SASSOON Registered 26-Jul-00 664958 16-Dec-98 358321 9 PGCo Mexico VS SASSOON Registered 31-Aug-98 587051 29-Jul-98 341726 21 PGCo Mexico VS SASSOON Registered 31-Jul-98 584014 19-Jun-98 336805 41 PGCo Morocco VS SASSOON Registered 31-Aug-98 67047 31-Aug-98 67047 3 PGCo Myanmar VS SASSOON Registered 22-Jan-01 221/2001 16-Jan-01 NIL 3,9,11,21,41,42 PGCo New Zealand VS SASSOON Registered 26-May-98 292836 26-May-98 292836 21 PGCo New Zealand VS SASSOON Registered 26-May-98 292835 26-May-98 292835 3 PGCo New Zealand VS SASSOON Registered 26-May-98 292838 26-May-98 292838 42 PGCo New Zealand VS SASSOON Registered 12-Jun-98 293727 12-Jun-98 293727 11 PGCo New Zealand VS SASSOON Registered 12-Jun-98 293726 12-Jun-98 293726 9 PGCo New Zealand VS SASSOON Registered 26-May-98 292837 26-May-98 292837 41 PGCo Nigeria VS SASSOON Pending 10-Aug-98 TP37538 3 RVI Pakistan VS SASSOON Pending 11-Aug-98 149481 3 RVI Peru VS SASSOON Registered 28-Jun-00 64463 6-Oct-99 092799-1999 11 PGCo Saudi Arabia VS SASSOON Registered 22-Jun-99 481/63 12-Aug-98 45282 3 PGCo
178 Marks VS SASSOON - Global 178 Marks Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPLICATION DATE Singapore VS SASSOON Registered 10-Jun-98 1998/05829 10-Jun-98 Singapore VS SASSOON Registered 10-Jun-98 1998/5834 10-Jun-98 Singapore VS SASSOON Registered 10-Jun-98 1998/5831 10-Jun-98 Singapore VS SASSOON Registered 10-Jun-98 1998/05830 10-Jun-98 Singapore VS SASSOON Registered 10-Jun-98 1998/05833 10-Jun-98 Singapore VS SASSOON Registered 10-Jun-98 1998/5832 10-Jun-98 Taiwan VS SASSOON Pending 21-Feb-00 Taiwan VS SASSOON Pending 21-Feb-00 Taiwan VS SASSOON Pending 21-Feb-00 Taiwan VS SASSOON Registered 1-Jun-01 943371 21-Feb-00 Taiwan VS SASSOON Registered 16-Mar-02 162013 21-Feb-00 Taiwan VS SASSOON Registered 16-Feb-01 138663 21-Feb-00 Thailand VS SASSOON Registered 27-Aug-98 KOR141923 27-Aug-98 Thailand VS SASSOON Registered 27-Aug-98 KOR98392 27-Aug-99 Thailand VS SASSOON Registered 27-Aug-98 KOR157710 27-Aug-98 Thailand VS SASSOON Registered 27-Aug-98 BOR9871 27-Aug-98 Thailand VS SASSOON Registered 27-Aug-98 KOR126648 27-Aug-98 Thailand VS SASSOON Registered 27-Aug-98 BOR9870 27-Aug-98 United States of America VS SASSOON Pending 23-Jul-02 United States of America VS SASSOON Pending 21-May-98 United States of America VS SASSOON Registered 5-Sep-00 2,384,263 21-May-98 Yemen Arab Republio VS SASSOON Registered 25-Jul-99 10233 9-Aug-98 United Kingdom VS SASSOON (Device 02/1) Pending 14-Mar-02 United Kingdom VS SASSOON (Device 02/2) Pending 14-Mar-02 Argentina VS SASSOON (Stylized & Device 98 bw) Pending 13-Aug-98 Argentina VS SASSOON (Stylized & Device 98 bw) Pending 13-Aug-98 Argentina VS SASSOON (Stylized & Device 98 bw) Registered 29-Sep-00 1805595 27-May-99 Argentina VS SASSOON (Stylized & Device 98 bw) Registered 28-Aug-00 1803268 13-Aug-98 Argentina VS SASSOON (Stylized & Device 98 bw) Registered 28-Aug-00 1803267 13-Aug-98 Aruba VS SASSOON (Stylized & Device 98 bw) Registered 16-Jul-98 19228 15-Jun-98 Aruba VS SASSOON (Stylized & Device 98 bw) Registered 17-Feb-99 19648 3-Aug-98 Brazil VS SASSOON (Stylized & Device 98 bw) Pending 27-Dec-99 Brazil VS SASSOON (Stylized & Device 98 bw) Pending 27-Dec-99 Brazil VS SASSOON (Stylized & Device 98 bw) Pending 27-Dec-99 Brazil VS SASSOON (Stylized & Device 98 bw) Pending 27-Dec-99 Brazil VS SASSOON (Stylized & Device 98 bw) Pending 27-Dec-99 Chile VS SASSOON (Stylized & Device 98 bw) Registered 6-Jan-99 531461 19-May-98 Chile VS SASSOON (Stylized & Device 98 bw) Registered 26-Feb-99 535342 17-Jul-98 Chile VS SASSOON (Stylized & Device 98 bw) Registered 26-Jan-99 533124 17-Jul-98
COUNTRY APPLICATION NO INT'I CII REG. OWNER Singapore 1998/05829 42 PGCo Singapore 1998/5834 3 PGCo Singapore 1998/5831 21 PGCo Singapore 1998/5830 41 PGCo Singapore 1998/5833 9 PGCo Singapore 1998/5832 11 PGCo Taiwan 89008861 3 PGCo Taiwan 89008862 9 PGCo Taiwan 89008864 21 PGCo Taiwan 89008863 11 PGCo Taiwan 89008866 42 PGCo Taiwan 89008865 41 PGCo Thailand 368114 3 PGCo Thailand 368117 21 PGCo Thailand 368116 11 PGCo Thailand 368119 42 PGCo Thailand 368115 9 PGCo Thailand 368118 41 PGCo United States of America 78/146590 8 PGCo United States of America 75/489260 9,11 PGCo United States of America 75/979536 3 PGCo Yemen Arab Republio 12818 3 PGCo United Kingdom 2295334 3 PGCo United Kingdom 2295546 3 PGCo Argentina 2169336 41 RVI Argentina 2169337 42 RVI Argentina 2153089 3 PGCo Argentina 2169335 21 PGCo Argentina 2169334 11 PGCo Aruba NIA 3 PGCo Aruba N/A 11,21,41,42 PGCo Brazil 822323460 21 PGCo Brazil 822323486 3 PGCo Brazil 822323478 11 PGCo Brazil 822361949 40 PGCo Brazil 822323494 41 PGCo Chile 415180 3 RVI Chile 420950 11,21 RVI Chile 420951 41,42 RVI
VS SASSOON - Global 178 Marks Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPLICATION DATE Colombia VS SASSOON (Stylized & Device 98 bw) Registered 20-Jun-01 243166 17-Jul-98 Colombia VS SASSOON (Stylized & Device 98 bw) Registered 26-Feb-99 216306 3-Jun-98 Colombia VS SASSOON (Stylized & Device 98 bw) Registered 26-Mar-99 217104 14-Aug-98 Colombia VS SASSOON (Stylized & Device 98 bw) Registered 19-Jun-01 243137 14-Aug-98 Colombia VS SASSOON (Stylized & Device 98 bw) Registered 29-Jan-99 215655 17-Jul-98 Croatia VS SASSOON (Stylized & Device 98 bw) Registered 17-Jul-01 20000371 22-Mar-00 Czech Republic VS SASSOON (Stylized & Device 98 bw) Registered 23-May-01 233735 20-Mar-00 Dominican Republic VS SASSOON (Stylized & Device 98 bw) Registered 30-Oct-98 100348 1-Sep-98 Dominican Republic VS SASSOON (Stylized & Device 98 bw) Registered 30-Oct-98 109465 6-Aug-98 Dominican Republic VS SASSOON (Stylized & Device 98 bw) Registered 15-Aug-98 98618 9-Jun-98 Egypt VS SASSOON (Stylized & Device 98 bw) Registered 8-Aug-98 116870 8-Aug-98 Estonia VS SASSOON (Stylized & Device 98 bw) Registered 17-May-01 33974 24-Mar-00 Hungary VS SASSOON (Stylized & Device 98 bw) Pending 22-Mar-00 Kazakhstan VS SASSOON (Stylized & Device 98 bw) Registered 28-May-01 11910 27-Mar-00 Latvia VS SASSOON (Stylized & Device 98 bw) Registered 20-Feb-01 47475 24-Mar-00 Lithuania VS SASSOON (Stylized & Device 98 bw) Registered 5-Mar-01 41998 24-Mar-00 Mexico VS SASSOON (Stylized & Device 98 bw) Registered 10-Feb-99 600065 6-Nov-98 Netherlands Antilles VS SASSOON (Stylized & Device 98 bw) Registered 15-Jul-98 1894 15-Jun-98 Netherlands Antilles VS SASSOON (Stylized & Device 98 bw) Registered 22-Sep-98 1897 7-Aug-98 Peru VS SASSOON (Stylized & Device 98 bw) Registered 28-Aug-98 48270 28-May-98 Peru VS SASSOON (Stylized & Device 98 bw) Registered 16-Aug-99 19082 30-Jul-98 Peru VS SASSOON (Stylized & Device 98 bw) Registered 27-Jul-99 18804 30-Jul-98 Peru VS SASSOON (Stylized & Device 98 bw) Registered 27-Jul-99 57470 30-Jul-98 Poland VS SASSOON (Stylized & Device 98 bw) Pending 22-Mar-00 Romania VS SASSOON (Stylized & Device 98 bw) Registered 22-Mar-00 41821 22-Mar-00 Russian Federation VS SASSOON (Stylized & Device 98 bw) Registered 29-Mar-02 210206 6-Apr-00 Slovakia VS SASSOON (Stylized & Device 98 bw) Registered 11-Jul-01 195925 22-Mar-00 Slovenia VS SASSOON (Stylized & Device 98 bw) Registered 13-Dec-00 200070526 20-Mar-00 Turkey VS SASSOON (Stylized & Device 98 bw) Registered 30-Mar-00 2000005534 30-Mar-00 Ukraine VS SASSOON (Stylized & Device 98 bw) Pending 28-Mar-00 Uzbekistan VS SASSOON (Stylized & Device 98 bw) Registered 22-Dec-00 10250 28-Mar-00 Venezuela VS SASSOON (Stylized & Device 98 bw) Pending 16-Jun-98 Venezuela VS SASSOON (Stylized & Device 98 bw) Pending 6-Jan-99 Venezuela VS SASSOON (Stylized & Device 98 bw) Pending 6-Jan-99 Venezuela VS SASSOON (Stylized & Device 98 bw) Pending 6-Jan-99 Venezuela VS SASSOON (Stylized & Device 98 bw) Pending 6-Jan-99 Austria VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Benelux VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Community Trademark VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00
COUNTRY APPLICATION NO INT'I CII REG. OWNER Colombia 98-040783 42 PGCo Colombia 98031271 3 PGCo Colombia 98046751 41 PGCo Colombia 98-046749 21 PGCo Colombia 98040785 11 PGCo Croatia 100371 3 PGCo Czech Republic 153230 3 PGCo Dominican Republic N/A 11 RVI Dominican Republic N/A 42 RVI Dominican Republic N/A 3,5,16,21 PGCo Egypt 116870 3 PGCo Estonia 2000-00477 3 PGCo Hungary M0001631 3 PGCo Kazakhstan 15169 3 PGCo Latvia 00/0390 3 PGCo Lithuania 20000571 3 PGCo Mexico 353308 3 PGCo Netherlands Antilles NIA 3,41,42 PGCo Netherlands Antilles NIA 11,21,41,42 PGCo Peru 63506 3 PGCo Peru 067408-1998 41 PGCo Peru 067409-1998 42 PGCo Peru 067407-1998 21 PGCo Poland Z-215 630 3 PGCo Romania 1360 3 PGCo Russian Federation 2000707753 3 PGCo Slovakia 8392000 3 PGCo Slovenia 200070526 3 PGCo Turkey 2000/005534 3 PGCo Ukraine 2000031256 3 PGCo Uzbekistan 20000225 3 PGCo Venezuela 11091-98 3 RVI Venezuela 55-99 42 RVI Venezuela 53-99 11 RVI Venezuela 58-99 41 RVI Venezuela 52-99 21 RVI Austria 1556638 3 PGCo Benelux 1556638 3 PGCo Community Trademark 1556638 3 PGCo
VS SASSOON - Global 178 Marks Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPLICATION DATE Denmark VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Finland VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 France VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Germany VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Greece VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Ireland VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Italy VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Norway VS SASSOON (Stylized & Device 98 colour) Registered 12-Oct-00 205204 21-Mar-00 Portugal VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Spain VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Sweden VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 Switzerland VS SASSOON (Stylized & Device 98 colour) Registered 25-Aug-00 475568 20-Mar-00 United Kingdom VS SASSOON (Stylized & Device 98 colour) Registered 20-Jun-01 1556638 14-Mar-00 China VS SASSOON (Stylized 98 & Chinese/s) Registered 21-Apr-01 1556865 24-Feb-00 Bahrain VS SASSOON (Stylized 98) Registered 20-DeC-98 24931 20-Dec-98 Botswana VS SASSOON (Stylized 98) Pending 17-Feb-00 Kuwait VS SASSOON (Stylized 98) Pending 24-Feb-99 Oman VS SASSOON (Stylized 98) Pending 12-Aug-98 Qatar VS SASSOON (Stylized 98) Pending 12-Aug-98 South Africa VS SASSOON (Stylized 98) Pending 6-Aug-98 United Arab Emirates VS SASSOON (Stylized 98) Registered 3-Jan-00 22997 31-Oct-98 Germany VS VIDAL SASSOON Registered 22-Jan-81 1013211 1-Apr-80
COUNTRY APPLICATION NO INT'I CII REG. OWNER Denmark 1556638 3 PGCo Finland 1556638 3 PGCo France 1556638 3 PGCo Germany 1556638 3 PGCo Greece 1556638 3 PGCo Ireland 1556638 3 PGCo Italy 1556638 3 PGCo Norway 200003292 3 PGCo Portugal 1556638 3 PGCo Spain 1556638 3 PGCo Sweden 1556638 3 PGCo Switzerland 3346/2000 3 PGCo United Kingdom 1556638 3 PGCo China 2000020422 16 PGCo Bahrain 2328/98 3 PGCo Botswana BW/M/2000/156 3 PGCo Kuwait 42464 3 RVI Oman 18426 3 RVI Qatar 19149 3 RVI South Africa 9813952 3 PGCo United Arab Emirates 28855 3 RVI Germany V17058/3WZ 3 PGCo
VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE Japan IMAGINE VIDAL SASSOON Registered 20-Apr-01 4468846 4-Feb-00 African Union (AIPO) VIDAL SASSOON Pending 13-Feb-01 Albania VIDAL SASSOON Registered 5-Dec-92 5061 14-Aug-91 Algeria VIDAL SASSOON Registered 13-Oct-91 61609 13-Oc1-91 Andorra VIDAL SASSOON Registered 3-Dec-97 11335 3-Dec-97 Angola VIDAL SASSOON Registered 31-Jul-02 4051 27-Oct-94 Anguilla VIDAL SASSOON Registered 23-Apr-82 1762 26-Feb-82 Antigua & Barbuda VIDAL SASSOON Registered 8-Apr-83 2516 Antigua & Barbuda VIDAL SASSOON Registered 8-Apr-83 2515 Argentina VIDAL SASSOON Registered 30-DeC-93 1496586 14-Aug-84 Armenia VIDAL SASSOON Registered 9-Jun-97 1416 16-May-96 Aruba VIDAL SASSOON Registered 14-Dec-89 14169 1-Jan-86 Australia VIDAL SASSOON Registered 13-Mar-74 B276786 13-Mar-74 Australia VIDAL SASSOON Registered 27-May-96 677051 1-Nov-95 Australia VIDAL SASSOON Registered 27-May-94 630904 27-May-94 Australia VIDAL SASSOON Registered 27-May-94 630903 27-May-94 Australia VIDAL SASSOON Registered 27-May-94 630902 27-May-94 Australia VIDAL SASSOON Registered 13-Mar-74 B276789 13-Mar-74 Australia VIDAL SASSOON Registered 13-Mar-74 B276788 13-Mar-74 Australia VIDAL SASSOON Registered 3-Feb-83 B386990 3-Feb-83 Austria VIDAL SASSOON Registered 30-Mar-79 90772 8-Sep-78 Azerbaijan VIDAL SASSOON Registered 18-Jan-99 990083 30-Dec-93 Bahamas VIDAL SASSOON Registered 13-Mar-81 10210 Bahrain VIDAL SASSOON Registered 30-Mar-94 17357 30-Mar-94 Bangladesh VIDAL SASSOON Pending 14-Feb-95 Barbados VIDAL SASSOON Registered 31-Jul-78 81-4383 31-Jul-78 Barbados VIDAL SASSOON Registered 31-Jul-78 81-4384 Barbados VIDAL SASSOON Registered 31-Jul-78 81-4386 Barbados VIDAL SASSOON Registered 31-Jul-78 81-4385 31-Jul-78 Belarus VIDAL SASSOON Registered 4-Oct-93 1079 4-Oct-93 Benelux VIDAL SASSOON Registered 23-Mar-87 428071 23-Mar-87 Benelux VIDAL SASSOON Registered 26-Jan-90 474342 26-Jan-90 Benelux VIDAL SASSOON Registered 8-Dec-78 356764 8-Deo-78 Benelux VIDAL SASSOON Registered 8-Feb-83 389221 8-Feb-83 Benelux VIDAL SASSOON Registered 14-Mar-74 324484 14-Mar-74 Benin VIDAL SASSOON Pending 13-Feb-01 Bermuda VIDAL SASSOON Registered 10-Jan-78 B8838 Bhutan VIDAL SASSOON Pending 19-Nov-99 Bolivia VIDAL SASSOON Registered 2-Jun-80 41F 15-Dec-78
COUNTRY APPL. NO INT'I CII REG. OWNER Japan 8529/2000 3 PGCo African Union (AIPO) NA 3 PGCo Albania 221 3 PGCo Algeria 945 3 PGCo Andorra 10094 3 PGCo Angola 1206 41 RVI Anguilla N/A 3,25 RVI Antigua & Barbuda 3,25 RVI Antigua & Barbuda 3,25 RVI Argentina 1448929 3 PGCo Armenia 1779 3 PGCo Aruba N/A 3,8,11,21,26 PGCo Australia NA. 3 PGCo Australia 677051 9 PGCo Australia 630904 21 PGCo Australia 630903 11 PGCo Australia 630902 8 PGCo Australia NA. 26 PGCo Australia NA. 21 PGCo Australia NA. 42 PGCo Austria AM2288/78 3,5,7,8,9,11,14,16,18,20,21,24,25,26,28,41,42 PGCo Azerbaijan 233-PRT 3 PGCo Bahamas 3 PGCo Bahrain 387/94 3 PGCo Bangladesh 43043 3 RVI Barbados N/A 3 RVI Barbados 5 RVI Barbados 21 RVI Barbados N/A 16 RVI Belarus NA 3 PGCo Benelux 695266 41,42 PGCo Benelux 740514 9,11,21,26 PGCo Benelux 627713 7,8,9,14,16,18,25 PGCo Benelux 48323 20,24,28,30 PGCo Benelux 602362 3,5,21,26 PGCo Benin NA 3 PGCo Bermuda 3 PGCo Bhutan BT/M/99/017 3 PGCo Bolivia N/A 16 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'I CII REG. OWNER Bolivia VIDAL SASSOON Registered 2-Jun-80 41635-A 5-Dec78 N/A 25,26 PGCo Bolivia VIDAL SASSOON Registered 2-Jun-80 41630-A 5-Dec-78 N/A 11 PGCo Bolivia VIDAL SASSOON Registered 2-Jun-80 41632-A 5-Dec-78 N/A 9 PGCo Bolivia VIDAL SASSOON Registered 14-Jun-82 59642-A 24-Jul-81 N/A 21 PGCo Bolivia VIDAL SASSOON Registered 2-Jun-80 41633-A 5-Dec-78 N/A 3 PGCo Bolivia VIDAL SASSOON Registered 2-Jun-80 41637-A 5-Dec-78 N/A 42 PGCo Bolivia VIDAL SASSOON Registered 2-Jun-80 41636-A 5-Dec-78 N/A 41 PGCo Bolivia VIDAL SASSOON Registered 2-Jun-80 41631-A 5-Dec-78 N/A 7 PGCo Bosnia-Herzegovina VIDAL SASSOON Pending 4-Jun-97 BAZR97231 3,9,21 PGCo Bosnia-Herzegovina VIDAL SASSOON Pending 4-Jun-97 BAZR97230 3 PGCo Botswana VIDAL SASSOON Pending 17-Feb-00 BW/M/2000/ 3 PGCo Brazil VIDAL SASSOON Registered 25-Aug-80 7224532 6-Sep-79 25173 21 RVI Brazil VIDAL SASSOON Registered 25-Aug-80 7224524 6-Sep-79 25171 18 RVI British Virgin Islands VIDAL SASSOON Registered 2-Oct-81 1890 3,21,25 RVI Brunei Darussalam VIDAL SASSOON Registered 2-Dec-80 10745 2-Deo-80 NA. 3 PGCo Bulgaria VIDAL SASSOON Registered 17-Jun-81 13104 17-Jun-81 745 3,25 PGCo Burkina Faso VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Burundi VIDAL SASSOON Registered 28-Sep-81 1807/BUR 28-Sep-81 NA 3 PGCo Cambodia VIDAL SASSOON Registered 30-Jul-94 4795 30-Jul-94 4797 3 PGCo Cameroon VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Canada VIDAL SASSOON Registered 10-Apr-87 TMA325,7! 4-May-79 439329 3,11,16,41,42 PGCo Canada VIDAL SASSOON Registered 28-Jun-91 TMA386,0: 31-Aug-84 527843 3,11 PGCo Canada VIDAL SASSOON Registered 16-Sep-88 TMA334,9; 2-Oct-78 430499 3,11,16 PGCo Cayman Islands VIDAL SASSOON Registered 10-Apr-92 B981703 1-Apr-92 N/A 3 PGCo Central African Republic VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Chad VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Chile VIDAL SASSOON Registered 22-Sep-77 501789 3 RVI Chile VIDAL SASSOON Registered 5-Jul-78 546839 27-Sep-77 N/A 41,42 PGCo Chile VIDAL SASSOON Registered 7-Sep-81 614194 20-Jul-81 185200 21 PGCo Chile VIDAL SASSOON Registered 25-Mar-80 572409 7-Mar-79 N/A 3 PGCo China VIDAL SASSOON Registered 21-Nov-00 147953 25-Aug-99 9900100774 42 PGCo China VIDAL SASSOON Registered 21-Nov-00 1479318 25-Aug-99 9900100773 41 PGCo China VIDAL SASSOON Registered 7-Jan-01 1500695 25-Aug-99 99001007721 6 PGCo China VIDAL SASSOON Registered 7-Sep-00 1442658 4-Jun-99 9900062648 42 PGCo China VIDAL SASSOON Registered 21-Sep-00 1448803 4-Jun-99 9900062647 41 PGCo China VIDAL SASSOON Registered 14-May-96 839528 30-Jul-94 94069634 26 PGCo China VIDAL SASSOON Registered 7-Oct-96 879372 30-Jul-94 94074003 21 PGCo China VIDAL SASSOON Registered 7-Jun-96 845702 30-Jul-94 94074002 20 PGCo China VIDAL SASSOON Registered 7-Jun-96 84 30-Jul-94 94069633 11 PGCo
704 Marks VIDAL SASSQON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'I CII REG. OWNER China VIDAL SASSOON Registered 21-Jun-96 848771 30-Jul-94 94074001 9 PGCo China VIDAL SASSOON Registered 21-Jun-96 848459 30-Jul-94 94069632 8 PGCo China VIDAL SASSOON Registered 21-May-96 840379 30-Jul-94 94074000 7 PGCo China VIDAL SASSOON Registered 15-Jun-82 158641 21-Jan-80 NA. 3 PGCo Colombia VIDAL SASSOON Registered 15-May-90 129026 8-May-87 N/A 41 PGCo Colombia VIDAL SASSOON Registered 22-Mar-94 196621 8-May-87 92270106 42 PGCo Colombia VIDAL SASSOON Registered 8-Oct-90 132491 8-May-87 270109 3 PGCo Congo VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Congo, Dem.Rep. VIDAL SASSOON Registered 23-Mar-82 3831/C 3 PGCo Costa Rica VIDAL SASSOON Registered 3-May-83 62168 19-Oct-82 10154 9 PGCo Costa Rica VIDAL SASSOON Registered 7-Feb-84 63197 5-Apr-83 N/A 25 PGCo Costa Rica VIDAL SASSOON Registered 13-Oct-81 59490 23-Feb-81 N/A 3 PGCo Costa Rica VIDAL SASSOON Registered 8-Sep-82 61219 3-Feb-82 N/A 21 PGCo Croatia VIDAL SASSOON Registered 2-May-97 Z931493 4-May-83 04/93-01/25 3,9,21 PGCo Cuba VIDAL SASSOON Registered 13-Mar-00 128011 31-Jul-97 1136-97 3 PGCo Cyprus VIDAL SASSOON Registered 27-Oct-83 B24257 27-Oct-83 NA 3 PGCo Czech Republic VIDAL SASSOON Registered 15-Mar-82 165061 8-May-81 N.A. 3,25 PGCo Denmark VIDAL SASSOON Registered 10-Jan-86 128-1986 15-Aug-84 4453/84 3,42 PGCo Denmark VIDAL SASSOON Registered 29-Jan-93 754/1993 15-Feb-90 1300/1990 7,8,9,11,20,21,25,26 PGCo Djibouti VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Dominican Republic VIDAL SASSOON Registered 15-Mar-82 33537 15-Jan-82 N/A 9 PGCo Dominican Republic VIDAL SASSOON Registered 11-Oct-77 26908 4-Oct-77 N/A 3,5,16,21 PGCo Dominican Republic VIDAL SASSOON Registered 15-Mar-82 33576 15-Jan-82 N/A 21 PGCo Dominican Republic VIDAL SASSOON Registered 25-Mar-82 33613 15-Jan-82 N/A 21 PGCo Ecuador VIDAL SASSOON Registered 17-Aug-89 624-89 17-May-88 11994 3 Rosemount Ecuador VIDAL SASSOON Registered 18-May-88 1146-88 20-Mar-87 7817 21 Rosemount Egypt VIDAL SASSOON Registered 11-Aug-85 59816 17-Nov-81 NA 3 PGCo El Salvador VIDAL SASSOON Registered 17-Jan-97 154BK-47 7-Dec-90 2901-90 3 RVI Estonia VIDAL SASSOON Registered 4-Mar-94 8883 26-Mar-93 2748 3 PGCo Fiji VIDAL SASSOON Registered 24-May-94 30431 28-Nov-91 25683 3 PGCo Finland VIDAL SASSOON Registered 5-Mar-92 117323 16-Feb-90 910/90 9,11,20,21 PGCo Finland VIDAL SASSOON Registered 21-Dec-81 79834 30-Sep-78 3960/78 3,5,7,8,9,14,16,18,21,25,26,41,42 PGCo Finland VIDAL SASSOON Registered 5-Sep-84 90226 11-Feb-83 914/83 20,24,28,30 PGCo France VIDAL SASSOON Registered 26-Jun-90 1599088 26-Jun-90 220383 8,9,11,20,21 PGCo France VIDAL SASSOON Registered 25-Mar-74 1262147 25-Mar-74 170384 3,5,21,26,35,41,42 PGCo France VIDAL SASSOON Registered 1-Feb-83 1230090 1-Feb-83 653362 21 PGCo France VIDAL SASSOON Registered 23-Nov-78 1529445 23-Nov-78 303398 7,8,9,14,16,18,21,25 PGCo Gabon VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Gambia VIDAL SASSOON Pending 7-Dec-81 514/12/81 3 RVI
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'L CLL REG. OWNER Georgia VIDAL SASSOON Registered 26-Oct-94 75 27-Aug-92 002560/03 3 PGCo Germany VIDAL SASSOON Registered 19-May-87 1106393 23-Oct-86 R44808/3Wi 3 PGCo Germany VIDAL SASSOON Registered 22-Apr-91 1175220 2-Jun-90 849467/3Wi 3,9,14,16,18,21,24,25,26 PGCo Germany VIDAL SASSOON Registered 17-Oct-91 1181693 2-Jun-90 R49466/8W 27,8,9,11,20,21,25,26 PGCo Germany VIDAL SASSOON Registered 6-Feb-80 642943 24-Aug-79 W53247 3 PGCo Germany VIDAL SASSOON Registered 22-Sep-80 1008004 22-Nov-78 V16146/42" 7,9,11,14,18,18,25,41,42 PGCo Germany VIDAL SASSOON Registered 11-Mar-85 1074576 20-Sep-84 V19099/42" 35,41,42 PGCo Germany VIDAL SASSOON Registered 14-Oct-83 1054862 4-Feb-83 V18320/24A 20 PGCo Germany VIDAL SASSOON Registered 1-Feb-78 967232 13-Mar-74 V14246/3W 23,5,8,21,26 PGCo Ghana VIDAL SASSOON Registered 12-Nov-84 22534 2-Dec-81 NA 3 RVI Greece VIDAL SASSOON Registered 19-Apr-81 61939 8-Sep-78 61939 3,5,7,8,9,14,16,18,21,25,26 PGCo Greece VIDAL SASSOON Registered 17-Oct-84 74194 9-Mar-83 74194 20,24,28,30 PGCo Guatemala VIDAL SASSOON Pending 2-Nov-81 72418 21 VSI Guatemala VIDAL SASSOON Registered 20-Jun-80 39368 3 PGCo Guinea VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Guinea-Bissau VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Haiti VIDAL SASSOON Registered 28-Dec-98 69-119 25-Mar-98 N/A 3 RVI Honduras VIDAL SASSOON Registered 2-Apr-82 30706 3-May-79 N/A 3 PGCo Honduras VIDAL SASSOON Registered 25-Nov-80 112 25-May-79 N/A 41 PGCo Honduras VIDAL SASSOON Registered 13-Aug-82 40379 23-Jul-81 N/A 21 PGCo Honduras VIDAL SASSOON Registered 2-Apr-82 30707 3-May-79 N/A 16 PGCo Hong Kong VIDAL SASSOON Registered 23-Jun-80 B3734/198 23-Jun-80 NA. 3 PGCo Hong Kong VIDAL SASSOON Registered 9-Jun-94 9858/1995 9-Jun-94 6435/1995 7 PGCo Hong Kong VIDAL SASSOON Registered 9-Jun-94 360/1996 9-Jun-94 6433/1994 9 PGCo Hong Kong VIDAL SASSOON Registered 9-Jun-94 9520/1995 9-Jun-94 6431/94 20 PGCo Hong Kong VIDAL SASSOON Registered 9-Jun-94 9518/1995 9-Jun-94 6429/94 26 PGCo Hong Kong VIDAL SASSOON Registered 9-Jun-94 9519/1995 9-Jun-94 6430/94 21 PGCo Hong Kong VIDAL SASSOON Registered 9-Jun-94 9857/1995 9-Jun-94 6432/1994 11 PGCo Hong Kong VIDAL SASSOON Registered 16-Feb-96 1632/1996 9-Jun-94 94/06434 8 PGCo Hong Kong VIDAL SASSOON Registered 15-Dec-77 1348/1988 15-Dec-77 NA. 26 PGCo Hong Kong VIDAL SASSOON Registered 23-Jun-80 B1996/198 23-Jun-80 NA. 21 PGCo Hong Kong VIDAL SASSOON Registered 15-Dec-77 1347/1988 15-Dec-77 NA. 8 PGCo Hungary VIDAL SASSOON Registered 4-May-83 125051 4-May-83 793/83 7,21,42 PGCo Hungary VIDAL SASSOON Registered 27-Sep-90 131366 27-Sep-90 3769/90 3 PGCo Iceland VIDAL SASSOON Registered 30-Nov-81 282/1981 25-Feb-81 NA 3,25 PGCo Iceland VIDAL SASSOON Registered 29-Dec-81 405/1981 28-Aug-81 NA 21 PGCo India VIDAL SASSOON Registered 7-Dec-78 343499B 7-Dec-78 NA. 3 RVI India VIDAL SASSOON Registered 7-Dec-78 343514B 7-Dec-78 NA. 7 RVI India VIDAL SASSOON Registered 7-Dec-78 34? 3 7-Dec-78 NA. 9 RVI
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'I CII REG. OWNER India VIDAL SASSOON Registered 7-Dec-78 343508B 7-Dec-78 NA. 21 RVI India VIDAL SASSOON Registered 7-Dec-78 343513B 7-Dec-78 NA. 8 RVI Indonesia VIDAL SASSOON Registered 8-May-79 281079 24-Oct-77 NA. 3 PGCo Indonesia VIDAL SASSOON Registered 18-Dec-95 349708 4-Nov-94 20559/94 11 PGCo Indonesia VIDAL SASSOON Registered 29-Dec-95 350857 4-Nov-94 20560/94 8 PGCo Iran VIDAL SASSOON Registered 29-Oct-77 48293 3 PGCo Ireland VIDAL SASSOON Registered 11-Mar-74 B86904 11-Mar-74 B627/74 21,26 PGCo Ireland VIDAL SASSOON Registered 24-May-83 B112849 18-May-83 1438/83 9,18 PGCo Ireland VIDAL SASSOON Registered 11-Mar-74 B86902 11-Mar-74 8625/74 3,5 PGCo Ireland VIDAL SASSOON Registered 25-Jan-90 B137482 25-Jan-90 509/90 9,11,20,26 PGCo Israel VIDAL SASSOON Registered 11-Sep-78 46539 11-Sep-78 NA 3 PGCo Israel VIDAL SASSOON Registered 11-Sep-78 46542 11-Sep-78 NA 8 PGCo Israel VIDAL SASSOON Registered 11-Nov-78 46543 11-Sep-78 NA 9 PGCo Israel VIDAL SASSOON Registered 11-Sep-78 46541 11-Sep-78 NA 7 PGCo Israel VIDAL SASSOON Registered 11-Sep-78 46545 11-Sep-78 NA 16 PGCo Israel VIDAL SASSOON Registered 11-Sep-78 46547 11-Sep-78 NA 21 PGCo Israel VIDAL SASSOON Registered 11-Sep-78 46551 11-Sep-78 NA 42 PGCo Israel VIDAL SASSOON Registered 11-Sep-78 46550 11-Sep-78 NA 41 PGCo Israel VIDAL SASSOON Registered 11-Sep-78 46546 11-Sep-78 NA 18 PGCo Italy VIDAL SASSOON Registered 29-Dec-92 586494 26-Mar-90 48455-C/90 3,8,9,11,20,21 RVI Italy VIDAL SASSOON Registered 27-Oct-86 454190 22-Feb-83 33145C/83 8,20,24,28 RVI Italy VIDAL SASSOON Registered 23-Jul-85 363535 24-Nov-78 21523C/78 7,9,14,16,18,25 RVI Italy VIDAL SASSOON Registered 9-Jul-77 683107 14-May-74 17862C/74 3,5,21,26,41,42 RVI Ivory Coast VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Jamaica VIDAL SASSOON Registered 23-Sep-77 B18603 23-Sep-77 N/A 3 PGCo Jamaica VIDAL SASSOON Registered 19-Jan-82 B20425 15-Jan-82 N/A 9 PGCo Japan VIDAL SASSOON Registered 28-Aug-84 1707062 23-Oct-81 NA. 21 PGCo Japan VIDAL SASSOON Registered 28-Aug-84 1707064 23-Oct-81 NA. 21 PGCo Japan VIDAL SASSOON Registered 31-Aug-93 2569942 13-Mar-91 3-24604 26 PGCo Japan VIDAL SASSOON Registered 30-Aug-96 3186310 28-Apr-93 5-42630 20 PGCo Japan VIDAL SASSOON Registered 29-Nov-96 3231012 19-Mar-93 26976/1993 9 PGCo Japan VIDAL SASSOON Registered 26-Nov-82 1550771 13-Apr-79 NA. 22 PGCo Japan VIDAL SASSOON Registered 18-Oct-73 1038611 14-Jan-71 NA. 21 PGCo Japan VIDAL SASSOON Registered 26-Mar-73 1005632 14-Jan-71 NA. 3 PGCo Japan VIDAL SASSOON Registered 5-Sep-97 4053658 16-Nov-95 119513/199(degree) 11 PGCo Japan VIDAL SASSOON Registered 29-Nov-96 3231013 19-Mar-93 26977/1993 14 PGCo Japan VIDAL SASSOON Registered 31-May-95 3042675 30-Sep-92 4-250040 41 PGCo Jordan VIDAL SASSOON Registered 12-Mar-81 16590 10-Mar-79 16590 3 PGCo Jordan VIDAL SASSOON Registered 4-Aug-86 200 30-Oct-82 20000 9 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE Kazakhstan VIDAL SASSOON Registered 6-Jun-95 1744 20-Oct-93 Kenya VIDAL SASSOON Registered 1-Feb-79 25634 1-Feb-79 Kenya VIDAL SASSOON Registered 2-Oct-81 29156 2-Oct-81 Korea (South) VIDAL SASSOON Registered 13-May-93 262776 19-Feb-92 Korea (South) VIDAL SASSOON Registered 23-Nov-83 96755 27-Jan-83 Korea (South) VIDAL SASSOON Registered 4-Nov-99 458005 17-Sep-98 Korea (South) VIDAL SASSOON Registered 9-Aug-99 55926 10-Jul-98 Korea (South) VIDAL SASSOON Registered 9-Aug-99 55925 10-Jul-98 Korea (South) VIDAL SASSOON Registered 16-Jan-96 331539 11-Oct-94 Korea (South) VIDAL SASSOON Registered 6-Oct-95 28820 20-Dec-93 Korea (South) VIDAL SASSOON Registered 9-Jun-95 315128 30-Dec-93 Kyrgyzstan VIDAL SASSOON Registered 28-Jun-94 250 10-Aug-79 Laos VIDAL SASSOON Registered 27-Aug-93 2230 27-Aug-93 Latvia VIDAL SASSOON Registered 10-Jun-94 M 15485 19-Apr-93 Lebanon VIDAL SASSOON Registered 31-Mar-79 36956 31-Mar-79 Lesotho VIDAL SASSOON Registered 17-Jun-75 LS/M/93/00665 Liberia VIDAL SASSOON Registered 30-Jun-82 30682/2527 Liechtenstein VIDAL SASSOON Registered 4-Sep-01 12264 4-Sep-01 Lithuania VIDAL SASSOON Registered 30-Jun-94 11717 3-Sep-93 Macao VIDAL SASSOON Registered 10-Oct-97 9448-M 31-Jan-89 Macedonia VIDAL SASSOON Registered 13-Feb-96 2095 4-Jul-94 Macedonia VIDAL SASSOON Registered 5-Mar-97 4358 4-Jul-94 Malawi VIDAL SASSOON Registered 8-Sep-81 181/81 Malaysia VIDAL SASSOON Registered 11-May-78 M/78534 11-May-78 Malaysia VIDAL SASSOON Registered 11-May-78 M/78531 11-May-78 Malaysia VIDAL SASSOON Registered 11-May-78 M/78535 11-May-78 Malaysia VIDAL SASSOON Registered 11-May-78 M/78530 11-May-78 Mali VIDAL SASSOON Pending 13-Feb-01 Malta VIDAL SASSOON Registered 28-Jun-93 22461 28-Jun-93 Mauritania VIDAL SASSOON Pending 13-Feb-01 Mexico VIDAL SASSOON Registered 22-Jun-95 495268 29-Aug-90 Mexico VIDAL SASSOON Registered 13-Mar-92 407759 29-Jun-90 Mexico VIDAL SASSOON Registered 28-May-92 414763 11-Sep-90 Mexico VIDAL SASSOON Registered 29-Jul-93 438430 30-Mar-93 Mexico VIDAL SASSOON Registered 25-May-93 434581 29-Jun-90 Mexico VIDAL SASSOON Registered 21-Apr-95 488153 20-Sep-94 Moldova VIDAL SASSOON Registered 10-Apr-95 1633 21-Sep-94 Monaco VIDAL SASSOON Registered 25-Apr-79 R94.15209 25-Apr-79 Monaco VIDAL SASSOON Registered 28-Apr-81 R-9 90: 28-Apr-81
COUNTRY APPL. NO INT'I CII REG. OWNER Kazakhstan 2963 3 PGCo Kenya NA 3 RVI Kenya NA 21 RVI Korea (South) 92-4124 3 PGCo Korea (South) NA. 16 PGCo Korea (South) 1998-24200 3 PGCo Korea (South) 98-5526 42 PGCo Korea (South) 98-5525 41 PGCo Korea (South) 94-40430 9 PGCo Korea (South) 93-7789 42 PGCo Korea (South) 93-47086 3 PGCo Kyrgyzstan 86927 3 PGCo Laos 2382 3 PGCo Latvia M-93-3916 3 PGCo Lebanon NA 3,5,7,8,9,14,16,18,21,25,26,41,42 PGCo Lesotho 3 PGCo Liberia 3 PGCo Liechtenstein 12264 3,11,21,41,42 PGCo Lithuania RL10916 3 PGCo Macao 795 3 PGCo Macedonia PZ-2404/94 3,9,21 PGCo Macedonia PZ-2405/94 3 PGCo Malawi 3 PGCo Malaysia NA. 8 RVI Malaysia NA. 3 PGCo Malaysia NA. 9 RVI Malaysia NA. 21 PGCo Mali NA 3 PGCo Malta NA 3 PGCo Mauritania NA 3 PGCo Mexico 94721 9 PGCo Mexico 90682 28 PGCo Mexico 95815 42 PGCo Mexico 164492 3 PGCo Mexico 90684 14 PGCo Mexico 69188 5 PGCo Moldova 2905 3 PGCo Monaco 7986 3,21 PGCo Monaco 8694 25 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE Monaco VIDAL SASSOON Registered 24-Sep-81 R-96.16801 24-Sep-81 Mongolia VIDAL SASSOON Registered 3-Jun-99 2665 16-Feb-99 Montserrat VIDAL SASSOON Registered 12-May-81 1059 12-May-81 Montserrat VIDAL SASSOON Registered 17-Apr-78 922 Morocco VIDAL SASSOON Registered 19-Sep-81 31543 19-Sep-81 Myanmar VIDAL SASSOON Registered 4-May-99 1399/1999 Namibia VIDAL SASSOON Registered 25-Aug-81 B81/0894 25-Aug-81 Namibia VIDAL SASSOON Registered 25-Aug-81 B81/0895 25-Aug-81 Netherlands Antilles VIDAL SASSOON Registered 21-Sep-77 1896 21-Sep-77 New Zealand VIDAL SASSOON Registered 19-Sep-85 161102 19-Sep-85 New Zealand VIDAL SASSOON Registered 12-Nov-73 B106234 12-Nov-73 New Zealand VIDAL $ASSOON Registered 30-May-94 237343 30-May-94 New Zealand VIDAL SASSOON Registered 30-May-94 237345 30-May-94 New Zealand VIDAL SASSOON Registered 30-May-94 237346 30-May-94 New Zealand VIDAL SASSOON Registered 30-May-94 237344 30-May-94 New Zealand VIDAL SASSOON Registered 30-May-94 237342 30-May-94 Nicaragua VIDAL SASSOON Registered 22-Jan-83 14848-CC 4-Mar-82 Nicaragua VIDAL SASSOON Registered 1-Sep-78 8913-CC 3-Feb-78 Niger VIDAL SASSOON Pending 13-Feb-01 Nigeria VIDAL SASSOON Registered 7-Oct-81 40253 7-Oct-81 Nigeria VIDAL SASSOON Registered 29-Jan-82 41140 29-Jan-82 Nigeria VIDAL SASSOON Registered 7-Oct-81 40365 7-Oct-81 Norway VIDAL SASSOON Registered 10-Apr-75 93446 11-Mar-74 Norway VIDAL SASSOON Registered 7-Jun-84 117110 11-Feb-83 Norway VIDAL SASSOON Registered 22-Oct-92 152837 7-Feb-90 Norway VIDAL SASSOON Registered 30-Apr-80 104970 20-Dec-78 Oman VIDAL SASSOON Registered 2-Mar-97 4160 22-Apr-90 Pakistan VIDAL SASSOON Registered 9-Nov-88 75446 9-Nov-81 Pakistan VIDAL SASSOON Registered 9-Nov-81 75445 9-Nov-81 Palestine (W.Jordan) VIDAL SASSOON Registered 8-May-94 2766 8-May-94 Panama VIDAL SASSOON Registered 17-Jun-83 31079 13-Sep-82 Panama VIDAL SASSOON Registered 7-Oct-80 25298 Paraguay VIDAL SASSOON Registered 13-Nov-79 211859 9-Jan-79 Paraguay VIDAL SASSOON Registered 9-Mar-82 248057 26-Aug-81 Peru VIDAL SASSOON Registered 10-Nov-88 77370 16-Jun-88 Peru VIDAL SASSOON Registered 27-Aug-87 70074 23-Apr-87 Peru VIDAL SASSOON Registered 13-Dec-88 6379 14-Jul-88 Philippines VIDAL SASSOON Pending 20-Jan-95 Philippines VIDAL SASSOON Pending 5-Jun-97 5-Jun-97
COUNTRY APPL. NO INT'I CII REG. OWNER Monaco NA 21 PGCo Mongolia 2781 3 PGCo Montserrat N/A 3 RVI Montserrat 3,5,14,16,18 PGCo Morocco NA 3,21,25 PGCo Myanmar 3 PGCo Namibia NA 3 PGCo Namibia NA 21 PGCo Netherlands Antilles N/A 3,8,11,21,26,41,42 PGCo New Zealand 161102 3 PGCo New Zealand NA. 3 PGCo New Zealand 237343 9 PGCo New Zealand 237345 20 PGCo New Zealand 237346 21 PGCo New Zealand 237344 11 PGCo New Zealand 237342 8 PGCo Nicaragua N/A 21 PGCo Nicaragua NIA 3 PGCo Niger NA 3 PGCo Nigeria 40364/81 3 RVI Nigeria 41140 9 RVI Nigeria 40365/81 21 RVI Norway 118166 3,5,21,26,41,42 PGCo Norway 83/430 20,24,28,30 PGCo Norway 90/0689 9,11,20,21,26 PGCo Norway 78.3573 7,8,9,14,16,18 PGCo Oman 4160 3 PGCo Pakistan 75446 3 PGCo Pakistan 75445 21 PGCo Palestine (W.Jordan) 2766 3 RVI Panama N/A 21 PGCo Panama 3 PGCo Paraguay N/A 3 PGCo Paraguay N/A 21 PGCo Peru N/A 3 PGCo Peru 119854 9 PGCo Peru 141702 42 PGCo Philippines 97858-PN 7 RVI Philippines 121410 10 PGCo 121410 10 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'L CLL REG. OWNER Philippines VIDAL SASSOON Registered 4-Sep-92 53379 6-Apr-89 70682 3 RVI Philippines VIDAL SASSOON Registered 6-Jun-89 44955 4-Sep-81 46035 21 PGCo Poland VIDAL SASSOON Pending 28-Mar-01 233546 3,25 PGCo Portugal VIDAL SASSOON Registered 14-Sep-92 263875 27-Apr-90 263875 9 PGCc Portugal VIDAL SASSOON Registered 14-Sep-92 263876 27-Apr-90 263876 11 PGCo Portugal VIDAL SASSOON Registered 14-Sep-92 263878 27-Apr-90 263878 21 PGCo Portugal VIDAL SASSOON Registered 13-Oct-86 202442 17-May-79 202442 5 PGCo Portugal VIDAL SASSOON Registered 13-Oct-86 202444 17-May-79 202444 8 PGCo Portugal VIDAL SASSOON Registered 13-Oct-86 202446 17-May-79 202446 14 PGCo Portugal VIDAL SASSOON Registered 13-Oct-86 202448 17-May-79 202448 18 PGCo Portugal VIDAL SASSOON Registered 21-Jul-88 209779 16-Jan-81 209779 42 PGCo Portugal VIDAL SASSOON Registered 21-Jul-88 209778 16-Jan-81 209778 41 PGCo Portugal VIDAL SASSOON Registered 13-Oct-86 202449 17-May-79 202449 21 PGCo Portugal VIDAL SASSOON Registered 13-Oct-86 202447 17-May-79 202447 16 PGCo Portugal VIDAL SASSOON Registered 13-Oct-86 202445 17-May-79 202445 9 PGCo Portugal VIDAL SASSOON Registered 13-Oct-86 202443 17-May-79 202443 7 PGCo Portugal VIDAL SASSOON Registered 3-Nov-86 202441 17-May-79 202441 3 PGCo Portugal VIDAL SASSOON Registered 14-Sep-92 263877 27-Apr-90 263877 20 PGCo Romania VIDAL SASSOON Registered 11-Sep-81 2R12470 11-Sep-81 11776 3,25 PGCo Russian Federation VIDAL SASSOON Registered 24-Mar-80 65931 10-Aug-79 86927 3 PGCo Rwanda VIDAL SASSOON Registered 12-Nov-81 1808/DRK 12-Nov-81 NA 3,21,25 RVI Sabah VIDAL SASSOON Registered 10-Dec-80 SB-27185 10-Dec-80 27185 3 PGCo Saudi Arabia VIDAL SASSOON Registered 25-Mar-85 113/48 21-Feb-82 2579 21 PGCo Saudi Arabia VIDAL SASSOON Registered 25-Oct-94 323/46 21-Mar-94 24283 3 PGCo Senegal VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Sierra Leone VIDAL SASSOON Registered 7-Oct-81 11620 7-Oct-81 11620 3 PGCo Singapore VIDAL SASSOON Registered 23-Jun-94 5231/94 23-Jun-94 S/5231/94 11 PGCo Singapore VIDAL SASSOON Registered 23-Jun-94 5232/94 23-Jun-94 5232/94 8 PGCo Singapore VIDAL SASSOON Registered 9-Dec-75 B66317 9-Dec-75 NA. 5 PGCo Singapore VIDAL SASSOON Registered 9-Dec-75 66316 9-Dec-75 NA. 3 PGCo Singapore VIDAL SASSOON Registered 9-Dec-75 66319 9-Dec-75 NA. 26 PGCo Singapore VIDAL SASSOON Registered 9-Dec-75 66318 9-Dec-75 NA. 21 PGCo Singapore VIDAL SASSOON Registered 4-Dec-88 B5368/81 4-Dec-81 5368/81 9 PGCo Singapore VIDAL SASSOON Registered 29-Mar-95 95/02886 29-Mar-95 2886/95 3 PGCo Singapore VIDAL SASSOON Registered 23-Jun-94 B5230/94 23-Jun-94 S/5230/94 21 PGCo Slovakia VIDAL SASSOON Registered 15-Mar-82 165061 8-May-81 N.A. 3,25 PGCo Slovenia VIDAL SASSOON Registered 24-Sep-96 7980709 14-Feb-94 7980709 3,9,21 PGCo Slovenia VIDAL SASSOON Registered 19-Aug-96 8380223 14-Feb-94 Z-8380223 3,9,21 PGCo Somalia VIDAL SASSOON Registered 27-Sep-81 305 26-Sep-81 NA 3,21,25 RVI
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'L CLL REG. OWNER South Africa VIDAL SASSOON Registered 17-Jun-75 75/3073 17-Jun-75 NA 41 PGCo South Africa VIDAL SASSOON Registered 17-Jun-75 B75/3074 17-Jun-75 NA 42 PGCo South Africa VIDAL.SASSOON Registered 14-Dec-81 B81/9516 14-Dec-81 NA 9 PGCo South Africa VIDAL SASSOON Registered 16-Nov-80 70/5161 16-Nov-80 NA 3 PGCo South Africa VIDAL SASSOON Registered 16-Nov-70 70/5162 16-Nov-70 NA 26 PGCo South Africa VIDAL SASSOON Registered 17-Jun-75 B75/3070 17-Jun-75 NA 5 PGCo South Africa VIDAL SASSOON Registered 17-Jun-75 B75/3069 17-Jun-75 NA 3 PGCo Spain VIDAL SASSOON Registered 19-Feb-79 749455 16-Apr-74 749455 41 PGCo Spain VIDAL SASSOON Registered 28-Mar-78 749453 16-Apr-74 749453 21 PGCo Spain VIDAL SASSOON Registered 20-Nov-79 897540 12-Jan-79 897540 16 PGCo Spain VIDAL SASSOON Registered 20-Nov-79 897538 12-Jan-79 897538 9 PGCo Spain VIDAL SASSOON Registered 5-Jul-79 897537 12-Jan-79 897537 8 PGCo Spain VIDAL SASSOON Registered 20-Dec-78 749451 16-Apr-74 749451 3 PGCo Spain VIDAL SASSOON Registered 5-Nov-91 1552800 1-Mar-90 1552800 11 PGCo Spain VIDAL SASSOON Registered 19-Feb-79 749456 16-Apr-74 749456 42 PGCo Sri Lanka VIDAL SASSOON Registered 15-Mar-96 77998 15-Mar-96 77998 3 RVI St. Helena VIDAL SASSOON Registered 13-Feb-81 884-81 21 RVI St. Vincent VIDAL SASSOON Registered 13-Feb-74 63-1982 21 RVI St. Vincent VIDAL SASSOON Registered 29-Oct-96 97-1996 25-Sep-96 NA. 3 RVI Sudan VIDAL SASSOON Registered 5-Nov-81 19262 5-Nov-81 NA 3 RVI Suriname VIDAL SASSOON Registered 21-App 98 16579 21-Apr-98 N/A 3,8,11,21,26 RVI Suriname VIDAL SASSOON Registered 4-Sep-81 10688 25 VSI Sweden VIDAL SASSOON Registered 29-Nov-91 228426 26-Jan-90 90-0829 7,8,9,11,20,21 PGCo Sweden VIDAL SASSOON Registered 8-Jul-83 187256 3-Feb-83 83-0716 20,24,28,30 PGCo Switzerland VIDAL SASSOON Registered 31-Jan-90 379394 31-Jan-90 856/1990.0 9,11,20,21,26 PGCo Switzerland VIDAL SASSOON Registered 4-Feb-83 328616 4-Feb-83 835 24,28 PGCo Switzerland VIDAL SASSOON Registered 11-Mar-74 P270467 3,5,6,8,20,21,22,26 PGCo Switzerland VIDAL SASSOON Registered 29-Jun-79 302110 29-Jun-79 3378 1,9,11,14,16,18,25 PGCo Syria VIDAL SASSOON Registered 28-Sep-78 14542 28-Sep-78 27412 3,11,14,18,21,25 PGCo Taiwan VIDAL SASSOON Registered 16-Oct-92 572582 31-Jan-92 572582 3 PGCo Taiwan VIDAL SASSOON Registered 16-Sep-92 570448 31-Jan-92 570448 3 PGCo Taiwan VIDAL SASSOON Registered 1-Sep-78 102837 3 PGCo Taiwan VIDAL SASSOON Registered 16-Feb-02 159371 8-Apr-00 89018877 41 PGCo Taiwan VIDAL SASSOON Registered 16-Apr-95 678837 13-Jul-94 678837 8 PGCo Taiwan VIDAL SASSOON Registered 16-Mar-95 674992 13-Jul-94 674992 8 PGCo Taiwan VIDAL SASSOON Registered 1-Dec-95 699591 13-Jul-94 699591 20 PGCo Taiwan VIDAL SASSOON Registered 16-Jun-95 682123 13-Jul-94 682123 21 PGCo Taiwan VIDAL SASSOON Registered 16-Jun-95 682122 13-Jul-94 682122 21 PGCo Taiwan VIDAL SASSOON Registered 1-Jul-93 65 9-Jan-93 65149 42 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE Taiwan VIDAL SASSOON Registered 1-May-85 281219 24-Aug-84 Taiwan VIDAL SASSOON Registered 1-Sep-78 102893 Taiwan VIDAL SASSOON Registered 16-Sep-92 570473 31-Jan-92 Taiwan VIDAL SASSOON Registered 16-Oct-92 572583 31-Jan-92 Tajikistan VIDAL SASSOON Registered 12-Dec-94 1150 12-Dec-94 Tanganyika VIDAL SASSOON Registered 29-Sep-81 18733 29-Sep-81 Thailand VIDAL SASSOON Registered 30-Mar-92 KOR1536 30-Mar-92 Thailand VIDAL SASSOON Registered 16-Feb-82 KOR16086 16-Feb-82 Thailand VIDAL SASSOON Registered 9-Dec-94 Kor32838 9-Dec-94 Thailand VIDAL SASSOON Registered 8-Sep-95 Kor49280 8-Sep-95 Thailand VIDAL SASSOON Registered 9-Dec-94 Kor40277 9-Dec-94 Togo VIDAL SASSOON Pending 13-Feb-01 Trinidad & Tobago VIDAL SASSOON Registered 25-Nov-85 13235 5-Mar-82 Trinidad & Tobago VIDAL SASSOON Registered 21-Dec-81 B10607 13-Apr-78 Trinidad & Tobago VIDAL SASSOON Registered 21-Dec-81 B10608 13-Apr-78 Trinidad & Tobago VIDAL SASSOON Registered 21-Dec-81 B10602 13-Apr-78 Trinidad & Tobago VIDAL SASSOON Registered 21-Dec-81 B10601 13-Apr-78 Trinidad & Tobago VIDAL SASSOON Registered 21-Dec-81 B10600 13-Apr-78 Tunisia VIDAL SASSOON Registered 7-Oct-81 EE961319 25-Sep-81 Turkey VIDAL SASSOON Registered 28-May-79 111195 28-May-79 Turkmenistan VIDAL SASSOON Registered 8-Jun-98 1892 21-Dec-95 Uganda VIDAL SASSOON Registered 23-Nov-81 15724 23-Nov-81 Ukraine VIDAL SASSOON Registered 31-Mar-94 4152 13-Mar-94 United Arab Emirates VIDAL SASSOON Registered 8-Jun-97 10493 25-Feb-95 United Kingdom VIDAL SASSOON Registered 17-Oct-861 1290987 17-Oct-86 United Kingdom VIDAL SASSOON Registered 26-Mar-90 B1422906 26-Mar-90 United Kingdom VIDAL SASSOON Registered 28-Nov-91 1483852 28-Nov-91 United Kingdom VIDAL SASSOON Registered 12-Oct-71 B981704 12-Oct-71 United Kingdom VIDAL SASSOON Registered 12-Oct-71 B981703 12-Oct-71 United Kingdom VIDAL SASSOON Registered 10-Aug-84 B1224521 10-Aug-84 United Kingdom VIDAL SASSOON Registered 13-Feb-74 B1024909 13-Feb-74 United Kingdom VIDAL SASSOON Registered 13-Feb-74 B1024908 13-Feb-74 United Kingdom VIDAL SASSOON Registered 13-Sep-74 B1024907 13-Sep-74 United Kingdom VIDAL SASSOON Registered 16-Oct-78 B1103006 16-Oct-78 United Kingdom VIDAL SASSOON Registered 17-Oct-86 1290988 17-Oct-86 United States of America VIDAL SASSOON Registered 15-Jan-74 977,015 2-Oct-72 United States of America VIDAL SASSOON Registered 17-May-77 1,065,957 5-Aug-76 United States of America VIDAL SASSOON Registered 28-Aug-79 1,124,380 13-Apr-78 United States of America VIDAL SASSOON Registered 8-Nov-94 1,8' '.0 9-Nov-93
COUNTRY APPL. NO INT'L CLL REG. OWNER Taiwan NA. 3 PGCo Taiwan 3 PGCo Taiwan 570473 3 PGCo Taiwan 572583 3 PGCo Tajikistan 94001593 3 PGCo Tanganyika NA 3 RVI Thailand 226025 3 PGCo Thailand NA. PGCo Thailand 277257 8 PGCo Thailand 292778 8 PGCo Thailand 277258 11 PGCo Togo NA 3 PGCo Trinidad & Tobago N/A 10 PGCo Trinidad & Tobago N/A 3 PGCo Trinidad & Tobago N/A 26 PGCo Trinidad & Tobago N/A 8 PGCo Trinidad & Tobago N/A 9 PGCo Trinidad & Tobago B10600 7 PGCo Tunisia 363/81 3,21,25 PGCo Turkey 50809 3,5,7,8,9,11,14,18,21,25,26 PGCo Turkmenistan 1(2665) 3 PGCo Uganda NA 3 PGCo Ukraine N/A 3 PGCo United Arab Emirates 9365 3 RVI United Kingdom 1290987 41 PGCo United Kingdom 1422906 11,20,26 PGCo United Kingdom 1483852 3 PGCo United Kingdom 981704 26 PGCo United Kingdom 981703 3 PGCo United Kingdom 1224521 16 PGCo United Kingdom 1024909 21 PGCo United Kingdom 1024908 8 PGCo United Kingdom 1024907 5 PGCo United Kingdom 1103006 3,5 PGCo United Kingdom 1290988 42 PGCo United States of America NA. 42 PGCo United States of America NA. 41 PGCo United States of America NA. 3 PGCo United States of America 74/455619 21 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'L CLL REG. OWNER United States of Americ VIDAL SASSOON Registered 10-May-77 1,065,108 5-Aug-76 NA. 3 PGCo United States of Americ VIDAL SASSOON Registered 25-Jun-74 986,983 2-Oct-72 NA. 9 PGCo Uruguay VIDAL SASSOON Registered 22-Feb-80 334475 3-Feb-79 159026 3 PGCo Uruguay VIDAL SASSOON Registered 29-Apr-85 275985 8-Apr-83 N/A 42 PGCo Uruguay VIDAL SASSOON Registered 21-Dec-79 233374 3,5 PGCo Uzbekistan VIDAL SASSOON Registered 7-Sep-94 1359 20-Oct-93 2482 3 13GCo Venezuela VIDAL SASSOON Registered 11-Jan-83 101192-F 14-Oct-77 101192-F 3 RVI Venezuela VIDAL SASSOON Registered 23-May-86 20962-D 2-Mar-84 N/A 42 RVI Venezuela VIDAL SASSOON Registered 14-May-86 122977-F 2-Mar-84 I-1705-84 3 RVI Venezuela VIDAL SASSOON Registered 21-Jun-84 108877-F 20-Mar-81 N/A 25 RVI Venezuela VIDAL SASSOON Registered 30-Sep-85 114723-F 13-Aug-82 N/A 11 RVI Venezuela VIDAL SASSOON Registered 23-Sep-85 114044-F 25-Aug-81 I-7312-81 21 RVI Venezuela VIDAL SASSOON Registered 16-Jul-85 112855-F 8-Dec-81 I-10941-81 9 RVI Vietnam VIDAL SASSOON Registered 31-Mar-92 6382 31-Mar-92 7166 3 PGCo Yemen Arab Republic VIDAL SASSOON Registered 23-Nov-96 5839 6-Nov-95 7718 3 PGCo Yugoslavia VIDAL SASSOON Registered 25-Nov-87 30514 28-Sep-79 Z-709/79 3 RVI Yugoslavia VIDAL SASSOON Registered 5-Aug-86 29043 4-May-83 Z-223/83 3,9,21 RVI Zambia VIDAL SASSOON Registered 10-Sep-81 289/81 10-Sep-81 NA 3 PGCo Zanzibar VIDAL SASSOON Registered 30-Oct-81 76/1983 30-Oct-81 NA 3 RVI VIDAL SASSOON Pending 13-Feb-01 NA 3 PGCo Qatar VIDAL SASSOON (& Arabic) Registered 10-Dec-00 11621 22-Feb-94 11621 3 PGCo Argentina VIDAL SASSOON (& Device) Registered 30-Nov-94 1542826 3 PGCo Azerbaijan VIDAL SASSOON (& Device) Registered 18-Jan-99 990082 30-Dec-93 234-PRT 3 PGCo Belarus VIDAL SASSOON (& Device) Registered 27-Dec-93 2721 3 PGCo Bosnia-Herzegovina VIDAL SASSOON (& Device) Pending 23-Jun-97 971969A 3 RVI Bulgaria VIDAL SASSOON (& Device) Registered 18-Jun-93 20676 16-Dec-91 18029 3 PGCo Cambodia VIDAL SASSOON (& Device) Registered 30-Jul-94 4796 30-Jul-94 4798 3 PGCo China VIDAL SASSOON (& Device) Registered 28-Aug-98 1202102 15-Nov-96 960126339 3 PGCo China VIDAL SASSOON (& Device) Registered 7-Apr-93 636237 25-Apr-92 92020035 3 PGCo Croatia VIDAL SASSOON (& Device) Registered 25-Feb-97 Z931874 26-May-93 04/93-01/30 3 PGCo Czech Republic VIDAL SASSOON (& Device) Registered 24-May-94 176789 10-Jan-92 65840 3 PGCo Estonia VIDAL SASSOON (& Device) Registered 8-Feb-95 14837 7-May-93 4465 3 PGCo France VIDAL SASSOON (& Device) Registered 13-Mar-90 1579887 13-Mar-90 194883 3 PGCo Georgia VIDAL SASSOON (& Device) Registered 15-Aug-97 6406 30-Jul-93 4514/03 3 PGCo Germany VIDAL SASSOON (& Device) Registered 6-May-85 1076687 20-Sep-84 V19096/3WZ 3 PGCo Germany VIDAL SASSOON (& Device) Registered 9-Apr-86 1090157 11-Oct-85 V19559/42W 3,42 PGCo Germany VIDAL SASSOON (& Device) Registered 29-Apr-85 1076408 24-Aug-84 V19061/3WZi 3 PGCo Germany VIDAL SASSOON (& Device) Registered 29-Apr-85 1076407 24-Aug-84 V19060/3WZ 3 PGCo Grenada VIDAL SASSOON (& Device) Registered 12-Oct-71 99- 3 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE Hungary VIDAL SASSOON (& Device) Registered 19-Aug-93 136489 30-Jan-92 Italy VIDAL SASSOON (& Device) Registered 9-Jul-77 683098 14-May-74 Kazakhstan VIDAL SASSOON (& Device) Registered 6-Jun-95 1741 20-Oct-93 Kuwait VIDAL SASSOON (& Device) Registered 17-Apr-79 10174 17-Apr-79 Kyrgyzstan VIDAL SASSOON (& Device) Registered 28-Jun-94 251 28-Dec-91 Latvia VIDAL SASSOON (& Device) Registered 20-Jun-96 M32750 19-Apr-93 Lithuania VIDAL SASSOON (& Device) Registered 18-Apr-96 22571 7-Jul-93 Macedonia VIDAL SASSOON (& Device) Registered 6-Nov-96 5024 4-Jul-94 Moldova VIDAL SASSOON (& Device) Registered 13-Nov-95 2547 21-Sep-94 Poland VIDAL SASSOON (& Device) Pending 28-Mar-01 Romania VIDAL SASSOON (& Device) Registered 14-Dec-94 R17838 22-Jan-92 Russian Federation VIDAL SASSOON (& Device) Registered 12-Mar-93 110372 28-Dec-91 Sarawak VIDAL SASSOON (& Device) Registered 11-Dec-80 SAR/22445 11-Dec-80 Slovakia VIDAL SASSOON (& Device) Registered 20-Feb-97 177710 10-Jan-92 Slovenia VIDAL SASSOON (& Device) Registered 21-Jul-97 9182397 14-Feb-94 Sweden VIDAL SASSOON (& Device) Registered 15-Jan-82 179611 28-Oct-78 Sweden VIDAL SASSOON (& Device) Registered 5-Mar-82 180392 4-May-81 Tajikistan VIDAL SASSOON (& Device) Registered 12-Dec-94 1152 12-Dec-94 Turkmenistan VIDAL SASSOON (& Device) Registered 8-Jun-98 1891 21-Dec-95 Ukraine VIDAL SASSOON (& Device) Registered 30-Sep-96 7076 16-Jun-93 United Kingdom VIDAL SASSOON (& Device) Registered 15-Apr-81 B1152662 15-Apr-81 United Kingdom VIDAL SASSOON (& Device) Registered 18-Feb-80 1128902 18-Feb-80 Uzbekistan VIDAL SASSOON (& Device) Registered 25-Nov-94 2144 17-Nov-93 Yugoslavia VIDAL SASSOON (& Device) Registered 6-Jul-92 37127 19-Dec-91 Japan VIDAL SASSOON (& Katakana) Registered 25-Dec-96 3234596 25-Sep-92 Japan VIDAL SASSOON (& Katakana) Registered 24-Feb-97 3265527 30-Jun-93 Japan VIDAL SASSOON (& Katakana) Registered 24-Feb-97 3262566 30-Jun-93 Cuba VIDAL SASSOON (& Oval Device 1) Registered 3-Apr-00 128456 31-Jul-97 Japan VIDAL SASSOON (& Oval Device 1) Registered 30-Aug-91 2326141 23-Oct-81 Chile VIDAL SASSOON (& Oval Device 2) Registered 17-Nov-93 416840 19-Apr-93 Chile VIDAL SASSOON (& Oval Device 2) Registered 17-Nov-93 416841 19-Apr-93 Japan VIDAL SASSOON (& Oval Device 2) Registered 27-Feb-85 1744367 23-Oct-81 Mexico VIDAL SASSOON (& Oval Device 2) Registered 6-Sep-93 441272 11-May-93 Puerto Rico VIDAL SASSOON (& Oval Device 2) Registered 9-Oct-97 36875 2-Aug-95 Venezuela VIDAL SASSOON (& Oval Device 2) Registered 25-Apr-86 119657-F 31-Jul-81 Australia VIDAL SASSOON (BL) Registered 13-Mar-74 B276787 13-Mar-74 China VIDAL SASSOON (Chinese) Registered 9-Feb-92 581756 22-Feb-91 China VIDAL SASSOON (Chinese) Registered 28-Aug-98 1202104 15-Nov-96 Hong Kong VIDAL SASSOON (Chinese) Registered 16-Aug-93 245 16-Aug-93
COUNTRY APPL. NO INT'L CLASSES REG. OWNER Hungary M9200579 3 PGCo Italy 17681C/74 3,5,21,26,41,42 RVI Kazakhstan 2960 3 PGCo Kuwait 11075 3 RVI Kyrgyzstan 149087 3 PGCo Latvia M-93-3910 3 PGCo Lithuania ZP9422 3 PGCo Macedonia Z-1-1480/94 3 PGCo Moldova 2894 3 PGCo Poland 233545 3 PGCo Romania 26206 3 PGCo Russian Federation 149087 3 PGCo Sarawak NA. 3 PGCo Slovakia 65840 3 PGCo Slovenia Z-9182397 3 PGCo Sweden 78-5377 3 PGCo Sweden 81-2399 5,7,8,9,11,14,16,18,21,25,26,41,42 PGCo Tajikistan 94001595 3 PGCo Turkmenistan 1(2664) 3 PGCo Ukraine 93062675 3 PGCo United Kingdom 1152662 9 PGCo United Kingdom 1128902 3 PGCo Uzbekistan MBGU9301 13 PGCo Yugoslavia Z-2397/91 3 RVI Japan 211360/1992 42 PGCo Japan 70375/1993 8 PGCo Japan 5-70376 21 PGCo Cuba 1137-97 3 PGCo Japan 56-088540 3 PGCo Chile 237771 3 RVI Chile 237772 3 RVI Japan NA. 3 PGCo Mexico 167313 3 PGCo Puerto Rico 36875 3 RVI Venezuela M-53910 3,5 RVI Australia NA. 5 PGCo China 91006537 3 PGCo China 960126338 3 PGCo Hong Kong 8647/1993 3 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'L CLL REG. OWNER Hong Kong VIDAL SASSOON (Chinese) Registered 30-Jan-91 02397 OF 30-Jan-91 645/91 3 PGCo Malaysia VIDAL SASSOON (Chinese) Registered 26-Jan-93 1993/412 26-Jan-93 1993/0412 3 PGCo Singapore VIDAL SASSOON (Chinese) Registered 21-Jan-93 450/93 21-Jan-93 S/450/93 3 PGCo Taiwan VIDAL SASSOON (Chinese) Pending 4-Sep-97 86045756 42 PGCo China VIDAL SASSOON (Chinese/S) Registered 7-Apr-93 636232 25-Apr-92 92020066 3 PGCo China VIDAL SASSOON (Chinese/S) Registered 7-Jan-01 1500696 25-Aug-99 9900100775 16 PGCo China VIDAL SASSOON (Chinese/S) Registered 21-Apr-01 1556868 24-Feb-00 2000020426 16 PGCo China VIDAL SASSOON (Chinese/S) Registered 21-Oct-98 1216102 18-Jul-97 970074088 3 PGCo Taiwan VIDAL SASSOON (Chinese/S) Registered 16-Jan-01 924153 18-Feb-00 89008471 3 PGCo Armenia VIDAL SASSOON (Cyrillic) Registered 9-Jun-97 1415 16-May-96 1778 3 PGCo Azerbaijan VIDAL SASSOON (Cyrillic) Registered 31-Mar-98 980530 30-Dec-93 124-PRT 3 PGCo Belarus VIDAL SASSOON (Cyrillic) Registered 27-Dec-93 2835 4-Oct-93 102610 3 PGCo Estonia VIDAL SASSOON (Cyrillic) Registered 14-Apr-94 10034 25-Mar-93 2508 3 PGCo Georgia VIDAL SASSOON (Cyrillic) Registered 25-Oct-94 55 21-Aug-92 003449/03 3 PGCo Kazakhstan VIDAL SASSOON (Cyrillic) Registered 6-Jun-95 1745 20-Oct-93 2964 3 PGCo Kyrgyzstan VIDAL SASSOON (Cyrillic) Registered 28-Jun-94 249 26-Sep-85 102610 3 PGCo Latvia VIDAL SASSOON (Cyrillic) Registered 10-Jun-94 M 15484 19-Apr-93 M-93-3915 3 PGCo Lithuania VIDAL SASSOON (Cyrillic) Registered 15-Jul-94 11948 15-Sep-93 RL11319 3 PGCo Moldova VIDAL SASSOON (Cyrillic) Registered 25-Sep-95 2383 21-Sep-94 3241 3 PGCo Russian Federation VIDAL SASSOON (Cyrillic) Registered 31-Dec-85 78882 26-Sep-85 102610 3 PGCo Tajikistan VIDAL SASSOON (Cyrillic) Registered 12-Dec-94 1151 12-Dec-94 94001594 3 PGCo Turkmenistan VIDAL SASSOON (Cyrillic) Registered 8-Jun-98 1890 21-Dec-95 1(2663) 3 PGCo Ukraine VIDAL SASSOON (Cyrillic) Registered 29-Apr-94 4597 3 PGCo Uzbekistan VIDAL SASSOON (Cyrillic) Registered 7-Sep-94 1358 20-Oct-93 MBGU93024 3 PGCo Japan VIDAL SASSOON (Katakana & Oval Devicei Registered 27-Feb-85 1744369 23-Oct-81 NA. 3 PGCo Japan VIDAL SASSOON (Katakana & Oval Device/ Registered 27-Feb-85 1744368 23-Oct-81 NA. 3 PGCo Japan VIDAL SASSOON (Katakana) Registered 25-Dec-81 1491567 28-Jan-77 NA. 3 PGCo Japan VIDAL SASSOON (Katakana) Registered 30-Jan-98 4108728 31-Jan-96 8559/1996 25 PGCo Japan VIDAL SASSOON (Katakana) Registered 4-Jul-97 4022661 12-Jan-95 2195/1995 5 PGCo Japan VIDAL SASSOON (Katakana) Registered 30-May-81 1462611 28-Jan-77 NA. 21 PGCo Japan VIDAL SASSOON (Katakana) Registered 11-Jul-97 3330985 12-Jan-95 2196/1995 5 PGCo Japan VIDAL SASSOON (Katakana) Registered 28-Aug-84 1707063 23-Oct-81 NA. 21 PGCo Japan VIDAL SASSOON (Katakana) Registered 28-Aug-84 1707065 23-Oct-81 NA. 21 PGCo Japan VIDAL SASSOON (Katakana) Registered 31-Oct-84 1724439 7-Sep-81 NA. 3 PGCo Vietnam VIDAL SASSOON (Oval Device) Registered 8-Jul-93 11979 8-Jul-93 14415 3 PGCo United Kingdom VIDAL SASSOON ACADEMY Registered 12-Jan-85 81233488 12-Jan-85 1233488 16 PGCo China VIDAL SASSOON ACADEMY (Chinese) Registered 21-Nov-00 1479317 25-Aug-99 9900100776 41 PGCo China VIDAL SASSOON ACADEMY (Chinese) Registered 21-Nov-00 1479752 25-Aug-99 9900100777 42 PGCo Japan VIDAL SASSOON BODY GLAZE Registered 28-Nov-89 218- ' 25-Jul-86 NA. 3 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'L CLL REG. OWNER Japan VIDAL SASSOON BODY GLAZE+ Registered 28-Nov-89 2187669 25-Jul-86 NA. 3 PGCo Japan VIDAL SASSOON COLOR CARE (& Katakal Registered 18-Jan-02 4537185 26-Feb-01 16261/2001 3 PGCo Germany VIDAL SASSOON COLORIFIC Registered 22-Sep-86 1096688 1-Mar-86 R44073/3WZ 3 PGCo United Kingdom VIDAL SASSOON COLORIFIC Registered 8-Mar-86 B1262161 8-Mar-86 1262161 3 PGCo Norway VIDAL SASSOON CREATE & STYLE Registered 17-Jun-93 157131 25-Oct-91 91/5370 3 PGCo Sweden VIDAL SASSOON CREATE & STYLE Registered 21-May-93 249204 24-Oct-91 91-9082 3 PGCo Switzerland VIDAL SASSOON CREATE & STYLE Registered 9-Oct-92 400953 9-Oct-92 6640/1992.0 3 PGCo United Kingdom VIDAL SASSOON CREATE & STYLE Registered 9-Sep-92 1512046 9-Sep-92 1512046 3 PGCo China VIDAL SASSOON FORM & FINISH Registered 21-Feb-96 816310 13-Jul-93 93056344 3 PGCo Hong Kong VIDAL SASSOON FORM & FINISH Registered 15-Jun-93 B1720/199 15-Jun-93 5997/1993 3 PGCo Colombia VIDAL SASSOON FORMESILK Registered 29-Jun-95 176277 7-Feb-95 95004386 3 PGCo Germany VIDAL SASSOON IF YOU DON'T LOOK GC Registered 11-Feb-81 1013939 8-Dec-79 V16914/3W 23 PGCo Spain VIDAL SASSOON LAVAR Y LISTO Registered 7-Jan-92 1526801 25-Oct-89 1526801 35 PGCo Finland VIDAL SASSOON LIVE STYLE Registered 20-Oct-93 128682 22-Jan-92 299/92 3 PGCo Ireland VIDAL SASSOON LIVE STYLE Registered 9-Jun-94 149975 21-Jan-92 324/92 3 PGCo Norway VIDAL SASSOON LIVE STYLE Registered 17-Jun-93 157173 23-Jan-92 92/0317 3 PGCo Portugal VIDAL SASSOON LIVE STYLE Registered 25-Oct-93 280083 30-Jan-92 280083 3 PGCo Sweden VIDAL SASSOON LIVE STYLE Registered 13-Aug-93 250720 17-Jan-92 92-0595 3 PGCo Switzerland VIDAL SASSOON LIVE STYLE Registered 23-Jan-92 395528 23-Jan-92 941/1992.5 3 PGCo United Kingdom VIDAL SASSOON LIVE STYLE Registered 21-Jan-92 B1488439 21-Jan-92 1488439 3 PGCo Brazil VIDAL SASSOON Logo Registered 14-May-85 7.90E+08 27-Jul-79 790205254 3 PGCo Brazil VIDAL SASSOON Logo Registered 2-Oct-84 7.90E+08 6-Sep-79 790251744 25 PGCo Brazil VIDAL SASSOON Logo Registered 7-Jul-89 7.90E+08 6-Sep-79 790251752 9 PGCo Laos VIDAL SASSOON Logo Registered 27-Aug-93 2229 27-Aug-93 2381 3 PGCo Japan VIDAL SASSOON NEW + Registered 23-Jul-87 1974006 12-Mar-82 NA. 3 PGCo Japan VIDAL SASSOON NEW PROFESSIONAL Registered 27-Feb-85 1744370 16-Dec-81 NA. 3 PGCo Japan VIDAL SASSOON PROFESSIONAL + Registered 28-Nov-89 2187671 25-Jul-86 NA. 3 PGCo Japan VIDAL SASSOON PROFESSIONAL + Registered 28-Nov-89 2187672 25-Jul-86 NA. 3 PGCo Japan VIDAL SASSOON PROFESSIONAL + Registered 29-Sep-89 2171543 25-Jul-86 NA. 3 PGCo Japan VIDAL SASSOON PROFESSIONAL + Registered 29-Sep-89 2171544 25-Jul-86 NA. 3 PGCo Japan VIDAL SASSOON PROFESSIONAL + Registered 28-Nov-89 2187673 25-Jul-86 NA. 3 PGCo Japan VIDAL SASSOON PROFESSIONAL = Registered 28-Nov-89 2187670 25-Jul-86 NA. 3 PGCo Estonia VIDAL SASSOON PROFESSIONAL COLLE, Registered 5-Apr-95 15406 15-Jun-93 5332 3 PGCo Latvia VIDAL SASSOON PROFESSIONAL COLLE, Registered 20-Nov-95 M31226 9-Oct-92 M-92-1432 3 PGCo Lithuania VIDAL SASSOON PROFESSIONAL COLLE- Registered 12-Sep-95 20878 29-Oct-92 ZP2333 3 PGCo Austria VIDAL SASSOON PUMP & SPRAY Registered 12-Dec-91 139342 14-Oct-91 AM4960/91 3 PGCo Denmark VIDAL SASSOON PUMP & SPRAY Registered 14-May-93 3540/1993 16-Oct-91 7399/1991 3 PGCo Finland VIDAL SASSOON PUMP & SPRAY Registered 5-Feb-93 124713 14-Oct-91 4852/91 3 PGCo France VIDAL SASSOON PUMP & SPRAY Registered 17-Oct-91 170' -7 17-Oct-91 314180 3 PGCo
704 Marks VIDAL SASSOON ? Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE Germany VIDAL SASSOON PUMP & SPRAY Registered 26-May-92 2014588 15-Oct-91 Greece VIDAL SASSOON PUMP & SPRAY Registered 17-Jul-94 106338 16-Oct-91 Ireland VIDAL SASSOON PUMP & SPRAY Registered 14-Sep-94 B151254 14-Oct-91 Norway VIDAL SASSOON PUMP & SPRAY Registered 21-Jan-93 154795 16-Oct-91 Sweden VIDAL SASSOON PUMP & SPRAY Registered 21-May-93 249203 15-Oct-91 Switzerland VIDAL SASSOON PUMP & SPRAY Registered 28-Oct-91 403750 28-Oct-91 United Kingdom VIDAL SASSOON PUMP & SPRAY (& Devic Registered i6-May-91 1464531 16-May-91 Taiwan VIDAL SASSOON SALON Registered 1-Mar-94 634120 19-Apr-93 Korea (South) VIDAL SASSOON SALON + Registered 4-Nov-93 278592 1-Aug-92 Australia VIDAL SASSOON SALON COLLECTION Registered 7-Jul-92 B582038 7-Jul-92 China VIDAL SASSOON SALON COLLECTION Registered 14-Feb-94 677235 27-Oct-92 Hong Kong VIDAL SASSOON SALON COLLECTION Registered 17-Aug-92 B6676 of 1 17-Aug-92 India VIDAL SASSOON SALON COLLECTION Registered 28-Dec-92 587432 28-Dec-92 Indonesia VIDAL SASSOON SALON COLLECTION Registered 23-Dec-94 319976 13-Sep-93 Korea (South) VIDAL SASSOON SALON COLLECTION Registered 12-Jan-94 282972 1-Aug-92 Malaysia VIDAL SASSOON SALON COLLECTION Registered 21-Aug-92 1992/5898 21-Aug-92 New Zealand VIDAL SASSOON SALON COLLECTION Registered 13-Jul-92 219784 13-Jul-92 Pakistan VIDAL SASSOON SALON COLLECTION Registered 10-Jan-93 118590 10-Jan-93 Singapore VIDAL SASSOON SALON COLLECTION Registered 19-Aug-92 B6345/92 19-Aug-92 Thailand VIDAL SASSOON SALON COLLECTION Registered 21-Aug-92 KOR54423 21-Aug-92 Australia VIDAL SASSOON SALON SCIENCE Registered 7-Jul-92 B582037 7-Jul-92 China VIDAL SASSOON SALON SCIENCE Registered 14-Feb-94 677236 27-Oct-92 Hong Kong VIDAL SASSOON SALON SCIENCE Registered 17-Aug-92 B6674 of 1 17-Aug-92 India VIDAL SASSOON SALON SCIENCE Registered 28-Dec-92 587431 28-Dec-92 Indonesia VIDAL SASSOON SALON SCIENCE Registered 23-Dec-94 319975 13-Sep-93 Korea (South) VIDAL SASSOON SALON SCIENCE Registered 4-Nov-93 278594 1-Aug-92 Korea (South) VIDAL SASSOON SALON SCIENCE Registered 12-Jan-94 282974 1-Aug-92 Malaysia VIDAL SASSOON SALON SCIENCE Pending 21-Aug-92 New Zealand VIDAL SASSOON SALON SCIENCE Registered 13-Jul-92 219785 13-Jul-92 Pakistan VIDAL SASSOON SALON SCIENCE Registered 10-Jan-93 118592 10-Jan-93 Singapore VIDAL SASSOON SALON SCIENCE Registered 19-Aug-92 B6344/92 19-Aug-92 Thailand VIDAL SASSOON SALON SCIENCE Registered 21-Aug-92 KOR54422 21-Aug-92 Austria VIDAL SASSOON SALON STYLE Registered 19-Mar-92 141043 31-Jan-92 Denmark VIDAL SASSOON SALON STYLE Registered 2-Oct-92 9118/1992 3-Feb-92 Finland VIDAL SASSOON SALON STYLE Registered 20-Dec-93 129517 31-Jan-92 Germany VIDAL SASSOON SALON STYLE Registered 1-Sep-92 2019798 1-Feb-92 Portugal VIDAL SASSOON SALON STYLE Registered 11-Apr-93 280317 12-Feb-92 Turkey VIDAL SASSOON SALON STYLE Registered 10-Feb-92 134663 10-Feb-92 United Kingdom VIDAL SASSOON SALON STYLE Registered 31-Jan-92 148(degree)" caret 4 31-Jan-92
COUNTRY APPL. NO INT'L CLL REG. OWNER Germany R51415/3W 23,5 PGCo Greece 106338 3 PGCo Ireland 5088/91 3 PGCo Norway 91/5185 3 PGCo Sweden 91-8750 3 PGCo Switzerland 7229/1991.4 3 PGCo United Kingdom 1464531 3 PGCo Taiwan 634120 s PGCo Korea (South) 92-21363 3 PGCo Australia 582038 3 PGCo China 92070984 3 PGCo Hong Kong 9214705 3 PGCo India 587432 3 RVI Indonesia 9808/92 3 PGCo Korea (South) 92-21366 3 PGCo Malaysia 5898/92 3 PGCo New Zealand 219784 3 PGCo Pakistan 118590 3 PGCo Singapore 6345/92 3 PGCo Thailand 232666 3 PGCo Australia 582037 3 PGCo China 92070983 3 PGCo Hong Kong 92-14703 3 PGCo India 587431 3 RVI Indonesia 9807/92 3 PGCo Korea (South) 92-21365 3 PGCo Korea (South) 92-21368 3 PGCo Malaysia 1992/5899 3 RVI New Zealand 219785 3 PGCo Pakistan 118592 3 PGCo Singapore 6344/92 3 PGCo Thailand 232667 3 PGCo Austria AM439/92 3 PGCo Denmark 772/1992 3 PGCo Finland 479/92 3 PGCo Germany R51941/3WZ 3 PGCo Portugal 280317 3 PGCo Turkey 934/92 3 PGCo United Kingdom 1489594 3 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE Pakistan VIDAL SASSOON SALON STYLIST + Registered 10-Jan-93 118591 10-Jan-93 United Kingdom VIDAL SASSOON SALONS Registered 12-Jan-85 B1233489 12-Jan-85 United Kingdom VIDAL SASSOON SCHOOL Registered 12-Jan-85 B1233490 12-Jan-85 Japan VIDAL SASSOON SCULPTING GEL Registered 29-Sep-89 2171541 25-Jul-86 Japan VIDAL SASSOON SCULPTING GEL Registered 29-Sep-89 2171542 25-Jul-86 United Kingdom VIDAL SASSOON SENSITIVE HAIR Registered 8-May-81 B1153774 8-May-81 Denmark VIDAL SASSOON SILK STYLE Registered 14-May-93 3556/1993 17-Feb-92 Finland VIDAL SASSOON SILK STYLE Registered 7-Feb-94 130381 14-Feb-92 Norway VIDAL SASSOON SILK STYLE Registered 17-Jun-93 157184 17-Feb-92 Portugal VIDAL SASSOON SILK STYLE Registered 25-Nov-93 281106 10-Mar-92 Sweden VIDAL SASSOON SILK STYLE Registered 21-May-93 249217 14-Feb-92 Switzerland VIDAL SASSOON SILK STYLE Registered 19-Feb-92 399743 19-Feb-92 United Kingdom VIDAL SASSOON SILK STYLE Registered 14-Feb-92 1490936 14-Feb-92 Austria VIDAL SASSOON SILKSANE Registered 26-Apr-93 146905 17-Mar-93 Denmark VIDAL SASSOON SILKSANE Registered 4-Jun-93 4080/1993 18-Mar-93 France VIDAL SASSOON SILKSANE Registered 18-Mar-93 93460059 18-Mar-93 Greece VIDAL SASSOON SILKSANE Registered 19-Feb-96 113279 17-Mar-93 Portugal VIDAL SASSOON SILKSANE Registered 23-Aug-94 291229 22-Apr-93 Austria VIDAL SASSOON SOLUTIONS Registered 20-Mar-90 130131 2-Jan-90 Benelux VIDAL SASSOON SOLUTIONS Registered 30-Jan-90 474350 30-Jan-90 Denmark VIDAL SASSOON SOLUTIONS Registered 22-Mar-91 1752/1991 30-Jan-90 Finland VIDAL SASSOON SOLUTIONS Registered 20-Aug-92 121455 31-Jan-90 France VIDAL SASSOON SOLUTIONS Registered 2-Feb-90 1618855 2-Feb-90 Germany VIDAL SASSOON SOLUTIONS Registered 27-Feb-91 1172786 1-Feb-90 Greece VIDAL SASSOON SOLUTIONS Registered 19-Jul-93 97364 30-Jan-90 Ireland VIDAL SASSOON SOLUTIONS Registered 1-Jun-93 139329 26-Jan-90 Norway VIDAL SASSOON SOLUTIONS Registered 7-Jan-93 154414 6-Feb-90 Portugal VIDAL SASSOON SOLUTIONS Registered 28-Aug-92 262367 23-Feb-90 Sweden VIDAL SASSOON SOLUTIONS Registered 21-May-93 249178 30-Jan-90 Switzerland VIDAL SASSOON SOLUTIONS Registered 2-Feb-90 380374 2-Feb-90 United Kingdom VIDAL SASSOON SOLUTIONS Registered 30-Jan-90 1413339 30-Jan-90 United Kingdom VIDAL SASSOON SOLUTIONS (& Device) Registered 5-Jan-90 1409688 5-Jan-90 Austria VIDAL SASSOON STYLE & FINISH Registered 17-Oct-90 133188 8-Aug-90 Denmark VIDAL SASSOON STYLE & FINISH Registered 13-Dec-91 8659/1991 6-Aug-90 Finland VIDAL SASSOON STYLE & FINISH Registered 20-Aug-92 121199 6-Aug-90 France VIDAL SASSOON STYLE & FINISH Registered 22-Mar-91 1651873 22-Mar-91 Germany VIDAL SASSOON STYLE & FINISH Registered 22-Apr-91 1175224 11-Aug-90 Greece VIDAL SASSOON STYLE & FINISH Registered 17-Mar-94 103661 15-Apr-91 Ireland VIDAL SASSOON STYLE & FINISH Registered 30-Sep-93 B14' 10-Aug-90
COUNTRY APPL. NO INT'L CLL REG. OWNER Pakistan 118591 3 PGCo United Kingdom 1233489 16 PGCo United Kingdom 1233490 16 PGCo Japan NA. 3 PGCo Japan NA. 3 PGCo United Kingdom 1153774 3 PGCo Denmark 1153/1992 3 PGCo Finland 762/92 3 PGCo Norway 92/0769 3 PGCo Portugal 281106 3 PGCo Sweden 92-1412 3 PGCo Switzerland 1619/1992.5 3 PGCo United Kingdom 1490936 3 PGCo Austria AM1257/93 3 PGCo Denmark 1849/93 3 PGCo France 93460059 3 PGCo Greece 113279 3 PGCo Portugal 291229 3 PGCo Austria AM14/90 3 PGCo Benelux 740655 3 PGCo Denmark 0831/1990 3 PGCo Finland 533/90 3 PGCo France 185081 3 PGCo Germany R48962/3WZi 3 PGCo Greece 97364 3 PGCo Ireland 541/90 3 PGCo Norway 90/0667 3 PGCo Portugal 262367 3 PGCo Sweden 90-0973 3 PGCo Switzerland 956/1990.4 3 PGCo United Kingdom 1413339 3 PGCo United Kingdom 1409688 3 PGCo Austria AM4039/90 3 PGCo Denmark 6052/1990 3 PGCo Finland 4017/90 3 PGCo France 275426 3 PGCo Germany R49731/3W 23 PGCo Greece 103661 3 PGCo Ireland 4771/90 3 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE APPL. NO INT'L CLL REG. OWNER Norway VIDAL SASSOON STYLE & FINISH Registered 3-Dec-92 153466 7-Aug-90 90/3991 3 PGCo Portugal VIDAL SASSOON STYLE & FINISH Registered 31-Mar-93 273225 24-Apr-91 273225 3 PGCo Sweden VIDAL SASSOON STYLE & FINISH Registered 30-Jul-93 250365 7-Aug-90 90-7244 3 PGCo Switzerland VIDAL SASSOON STYLE & FINISH Registered 15-Aug-90 384213 15-Aug-90 6130/1990.6 3 PGCo United Kingdom VIDAL SASSOON STYLE & FINISH Registered 27-Jun-90 1430234 27-Jun-90 1430234 3 PGCo Finland VIDAL SASSOON STYLE & GO Registered 5-Feb-93 124785 17-Dec-91 6101/91 3 PGCo Germany VIDAL SASSOON STYLE & GO Registered 20-Oct-92 2022622 11-Dec-91 R51756/3WZ 3 PGCo Japan VIDAL SASSOON STYLING MOUSSE Registered 23-Feb-90 2214015 13-May-85 60-047297 3 PGCo Japan VIDAL SASSOON STYLING MOUSSE + Registered 23-Feb-90 2214017 13-May-85 60-047299 3 PGCo Japan VIDAL SASSOON STYLING MOUSSE + Registered 23-Feb-90 2214016 13-May-85 NA. 3 PGCo China VIDAL SASSOON STYLIST CHOICE Registered 14-Feb-94 677246 27-Oct-92 92070892 3 PGCo Hong Kong VIDAL SASSOON STYLIST CHOICE Registered 17-Aug-92 B6675 OF 17-Aug-92 92-14704 3 PGCo India VIDAL SASSOON STYLIST CHOICE Pending 28-Dec-92 587434 3 RVI Indonesia VIDAL SASSOON STYLIST CHOICE Registered 22-Aug-92 316904 22-Aug-92 9806/92 3 PGCo Korea (South) VIDAL SASSOON STYLIST CHOICE Registered 4-Nov-93 278593 1-Aug-92 92-21364 3 PGCo Korea (South) VIDAL SASSOON STYLIST CHOICE Registered 12-Jan-94 282973 1-Aug-92 92-21367 3 PGCo Malaysia VIDAL SASSOON STYLIST CHOICE Pending 21-Aug-92 1992/5897 3 RVI Singapore VIDAL SASSOON STYLIST CHOICE Registered 19-Aug-92 6346/92 19-Aug-92 6346/92 3 PGCo Thailand VIDAL SASSOON STYLIST CHOICE Registered 21-Aug-92 Kor10066 21-Aug-92 232665 3 PGCo Canada VIDAL SASSOON ULTRA Registered 10-Apr-92 TMA396,9j 8-May-90 657114 3 PGCo Argentina VIDAL SASSOON ULTRA CARE Registered 7-Jun-01 1832868 16-Apr-93 1876041 3 PGCo Australia VIDAL SASSOON ULTRA CARE Registered 9-Feb-93 A595613 9-Feb-93 595613 3 PGCo Brazil VIDAL SASSOON ULTRA CARE Registered 22-Aug-95 8.17E+08 14-Jul-93 817362665 3 RVI Brunei Darussalam VIDAL SASSOON ULTRA CARE Registered 21-Sep-92 BRU/19051 21-Sep-92 BRU/22103 3 PGCo Chile VIDAL SASSOON ULTRA CARE Registered 13-Nov-95 452814 20-Jan-93 230506 3 RVI Colombia VIDAL SASSOON ULTRA CARE Pending 26-Jan-93 374350 3 RVI Guatemala VIDAL SASSOON ULTRA CARE Registered 7-May-96 78027 25-Nov-93 93-78917 3 PGCo Hong Kong VIDAL SASSOON ULTRA CARE Registered 1-Apr-92 B06673 of 1-Apr-92 9209607 3 PGCo India VIDAL SASSOON ULTRA CARE Pending 6-Feb-96 697248 3 RVI Indonesia VIDAL SASSOON ULTRA CARE Registered 8-Apr-93 302449 8-Apr-93 H4HC0101-( 3 PGCo Korea (South) VIDAL SASSOON ULTRA CARE Registered 12-Apr-93 260705 11-Jan-92 92-572 3 PGCo Malaysia VIDAL SASSOON ULTRA CARE Pending 19-May-92 1992/3289 3 RVI Mexico VIDAL SASSOON ULTRA CARE Registered 26-Jul-93 438143 1-Feb-93 159638 3 PGCo New Zealand VIDAL SASSOON ULTRA CARE Registered 18-Feb-93 224971 18-Feb-93 224971 3 PGCo Peru VIDAL SASSOON ULTRA CARE Registered 22-Jul-93 1014 22-Jul-93 216406 3 PGCo Singapore VIDAL SASSOON ULTRA CARE Registered 14-May-92 B3591/92 14-May-92 S/3591/92 3 PGCo Taiwan VIDAL SASSOON ULTRA CARE Registered 16-Jan-93 578705 12-Dec-91 578705 3 PGCo Taiwan VIDAL SASSOON ULTRA CARE Registered 16-Jan-92 547847 30-Jul-91 80 34085 3 PGCo Venezuela VIDAL SASSOON ULTRA CARE Pending 11-Feb-93 2046 3 RVI
704 Marks VIDAL SASSOON - Global Registrations and Applications
COUNTRY TRADEMARK STATUS REG. DATE REG. NO APPL. DATE Vietnam VIDAL SASSOON ULTRA CARE Registered 8-Jul-93 12866 8-Jul-93 Austria VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Austria VIDAL SASSOON WASH & GO Registered 29-Mar-89 124581 6-Dec-88 Benelux VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Community Trademark VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Denmark VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Finland VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Finland VIDAL SASSOON WASH & GO Registered 5-Mar-92 117201 7-Dec-88 France VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Germany VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Germany VIDAL SASSOON WASH & GO Registered 23-Apr-93 DD-65284 28-Sep-90 Germany VIDAL SASSOON WASH & GO Registered 24-May-89 1140205 18-Nov-88 Greece VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Ireland VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Italy VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Madagascar VIDAL SASSOON WASH & GO Registered 19-Feb-96 1515 29-Jun-95 Norway VIDAL SASSOON WASH & GO Registered 15-Nov-90 143357 8-Dec-88 Portugal VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Spain VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 Spain VIDAL SASSOON WASH & GO Registered 20-Nov-89 1270754 24-Aug-88 Sweden VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 United Kingdom VIDAL SASSOON WASH & GO Registered 8-May-98 58503 1-Apr-96 France VIDAL SASSOON WASH & GO (& Device) Registered 23-Mar-90 1581716 23-Mar-90 Germany VIDAL SASSOON WASH & GO (& Device) Registered 11-Sep-91 2003930 21-Nov-90 Greece VIDAL SASSOON WASH & GO (& Device) Registered 19-Dec-94 109288 8-Jun-92 Morocco VIDAL SASSOON WASH & GO (& Device) Registered 17-Aug-95 57292 17-Aug-95 Portugal VIDAL SASSOON WASH & GO (& Device) Registered 15-Apr-93 273774 17-May-91 Portugal VIDAL SASSOON WASH & GO (& Device) Registered 7-Nov-94 294068 17-Aug-93 Portugal VIDAL SASSOON WASH & GO (& Device) Registered 7-Nov-94 293956 11-Aug-93 Spain VIDAL SASSOON WASH & GO (& Device) Registered 3-Dec-92 1591501 4-Oct-90 Spain VIDAL SASSOON WASH & GO (& Device) Registered 3-Dec-92 1591500 4-Oct-90 Spain VIDAL SASSOON WASH & GO (& Device) Registered 3-Dec-92 1591499 4-Oct-90 Swaziland VIDAL SASSOON WASH & GO (& Device) Registered 6-Mar-97 565/95 4-Jul-95 Yemen Arab Republic VIDAL SASSOON WASH & GO (& Device) Registered 5-Apr-97 6659 9-Jan-96 Syria VIDAL SASSOON WASH & GO (Design) Registered 29-Nov-95 56650 1-Nov-95 Gaza VIDAL SASSOON WASH & GO (Green Lab) Registered 18-Sep-95 2598 8-Feb-95 Austria VIDAL SASSOON WENN SIE NICHT GUT A Registered 2-Jul-85 109581 20-Nov-84 Germany VIDAL SASSOON WENN SIE NICHT GUT .A Registered 3-Sep-85 1081310 20-Jun-84 Denmark VIDAL SASSOON Registered 18-Apr-80 16790 28-Nov-78
COUNTRY APPL. NO INT'L CLL REG. OWNER Vietnam 14413 3 PGCo Austria 58503 3 PGCo Austria AM5558/88 3 PGCo Benelux 58503 3 PGCo Community Trademark 58503 3 PGCo Denmark 58503 3 PGCo Finland 58503 3 PGCo Finland 5449/88 3 PGCo France 58503 3 PGCo Germany 58503 3 PGCo Germany W65577 3 PGCo Germany R47399/3WZ 3 PGCo Greece 58503 3 PGCo Ireland 58503 3 PGCo Italy 58503 3 PGCo Madagascar 95/00750 3 RVI Norway 88/5601 3 PGCo Portugal 58503 3 PGCo Spain 58503 3 PGCo Spain 1270754 3 PGCo Sweden 58503 3 PGCo United Kingdom 58503 3 PGCo France 197652 3 PGCo Germany R50176/3WZ 3 PGCo Greece 109288 3 PGCo Morocco NA 3 PGCo Portugal 273774 3 PGCo Portugal 294068 3 PGCo Portugal 293956 3 13GCo Spain 1591501 3 PGCo Spain 1591500 3 PGCo Spain 1591499 3 PGCo Swaziland 565/95 3 PGCo Yemen Arab Republic 7979 3 PGCo Syria ###-##-#### 3 PGCo Gaza 2598 3 RVI Austria AM3555/84 3,35,41,42 PGCo Germany V18977/42W 3,35,41,42 PGCo Denmark 5022/78 7,8,9,14,16,18,25 PGCo
704 Marks VIDAL SASSOON - Global Registrations and Applications
Country Trademark Status Reg. Date Reg. No Appl. Date Appl. No Intl classes Denmark VIDALSASSOON Registered 21-Mar-75 1234-1975 19-Jul-74 314174 3,5,21,26,41,42 Germany VS VIDAL SASSOON Registered 22-Jan-81 1013211 1-Apr-80 V17058/3WZ
704 Marks EX-21 4 d06369exv21.txt SUBSIDIARIES OF THE REGISTRANT . . . EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT
Doing Name Incorporation Business as - ---- ------------- ----------- Helen of Troy (Far East) Limited Hong Kong Same Name Helen of Troy (Cayman) Limited Cayman Islands Same Name Helen of Troy International B.V. The Netherlands Same Name Helen of Troy Limited Barbados Same Name Helen of Troy Services Limited Hong Kong Same Name Helen of Troy Texas Corporation Texas Same Name Helen of Troy Nevada Corporation Nevada Same Name HOT Nevada Inc. Nevada Same Name Helen of Troy L.P. Texas Limited Partnership Same Name HOT International Marketing Limited Barbados Same Name HOT (UK) Limited United Kingdom Same Name Helen of Troy GmbH Germany Same Name Karina, Inc. New Jersey Same Name DCNL, Inc. Texas Same Name Helen of Troy Canada, Inc. Nevada Same Name Helen of Troy Limited Hong Kong Same Name Helen of Troy, LLC Nevada Same Name Tactica International, Inc. (55% ownership) Nevada Same Name Helen of Troy SARL France Same Name Fontelux Trading, S.A. Uruguay Same Name H.O.T. Cayman Holding Cayman Holdings Same Name Helen of Troy do Brasil Ltda. Brazil Same Name Idelle Management Company Nevada Same Name Idelle Labs, Ltd. Texas Limited Partnership Same Name Helen of Troy Manufacturing Limited Hong Kong Same Name HOT Latin America, LLC Nevada Same Name Helen of Troy de Mexico S.de R.L. de C.V. Mexico Same Name Helen of Troy Servicios S.de R.L. de C.V. Mexico Same Name
EX-23 5 d06369exv23.txt INDEPENDENT AUDITORS' CONSENT EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT The Board of Directors Helen of Troy Limited: We consent to incorporation by reference in the registration statements No. 33-75832, No. 333-11181, No. 333-67349, No. 333-67369, No. 333-90776, and No. 333-103825 on Form S-8, and the registration statement No. 333-99295 on Form S-3, of Helen of Troy Limited of our report dated May 13, 2003, relating to the consolidated balance sheets of Helen of Troy Limited and subsidiaries as of February 28, 2003 and February 28, 2002, and the related consolidated statements of income, stockholders' equity, and cash flows and related financial statement schedule for each of the years in the three-year period ended February 28, 2003, which report appears in the February 28, 2003 annual report on Form 10-K of Helen of Troy Limited and which includes an explanatory paragraph regarding the adoption of the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." /s/ KPMG LLP El Paso, Texas May 28, 2003 EX-99.1 6 d06369exv99w1.txt CEO CERTIFICATION EXHIBIT 99.1 CERTIFICATION In connection with the Annual Report of Helen of Troy Limited (the "Company") on Form 10-K for the fiscal year ended February 28, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report") and pursuant to 18 U.S.C. Section 1350, as adopted in Section 906 of the Sarbanes-Oxley Act of 2002, I, GERALD J. RUBIN, Chairman of the Board, Chief Executive Officer, and President of the Company, certify that to the best of my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 29, 2003 ------------ /s/ Gerald J. Rubin - --------------------------------------- Gerald J. Rubin Chairman of the Board, Chief Executive Officer, and President EX-99.2 7 d06369exv99w2.txt CFO CERTIFICATION EXHIBIT 99.2 CERTIFICATION In connection with the Annual Report of Helen of Troy Limited (the "Company") on Form 10-K for the fiscal year ended February 28, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report") and pursuant to 18 U.S.C. Section 1350, as adopted in Section 906 of the Sarbanes-Oxley Act of 2002, I, RUSSELL G. GIBSON, Chief Financial Officer of the Company, certify that to the best of my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 29, 2003 ------------ /s/ Russell G. Gibson - ------------------------------ Russell G. Gibson Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----