Anne Rakunas - Investor Relations, ICR, Inc. Jack Jancin - Senior Vice President of Corporate Business Development Julien Mininberg - Chief Executive Officer Brian Grass - Chief Financial Officer.

Bob Labick - CJS Securities Steph Wissink - Piper Jaffray Jason Gere - KeyBanc.

Good day everyone and welcome to the Helen of Troy Limited Fourth Quarter 2015 Earnings Call. Today's conference is being recorded. And at this time, I’d like to turn the conference over to Jack Jancin, Senior Vice President of Corporate Business Development. You may begin..

Good afternoon everyone and welcome to Helen of Troy's fourth quarter and fiscal year 2015 earnings conference call. The agenda for the call this afternoon is as follows. I will begin with a brief discussion of forward-looking statements; Mr.

Julien Mininberg, the company's CEO will comment on the financial performance during the quarter and key accomplishments of fiscal 2015, and then highlight areas of focus for fiscal year 2016. Then Brian Grass, the company's CFO, will review the financials in more detail and provide you with the company's outlook for fiscal year 2016.

Following this, Mr. Mininberg and Mr. Grass will take questions you have for us today. Before reviewing our safe harbour statement, I would like to let you all know that we will hosting our Investor Day in New York on May 12.

If you would like to attend, please contact Anne Rakunas of ICR, whose contact details are listed at the bottom of the earnings release we issued this afternoon as well as on our website. The event will also be webcast for those of you who will not be able to join us.

Now moving on, this conference call may contain certain forward-looking statements that are based on management's current expectation with respect to future events or financial performance. Generally, the words anticipates, believes, expects and other similar words identify forward-looking statements.

Forward-looking statements are subject to a number of risks and uncertainties that could cause anticipated results to differ materially from actual results. This conference call may also include information that may be considered non-GAAP financial information.

These non-GAAP measures are not alternative to GAAP financial information and may be calculated differently than the non-GAAP financial information disclosed by other companies. The company cautions listeners not to place undue reliance on forward-looking statements or non-GAAP information. Before I turn the conference call over to Mr.

Mininberg, I’d like to inform all interested parties that a copy of today's earnings release has been posted on the company's website at www.hotus.com. The earnings release contains tables that reconcile non-GAAP financial measures to their corresponding GAAP-based measures.

The release can be assessed by selecting the Investor Relations tab on the company's home page and then the news tab. I will now turn the conference call over to Mr. Mininberg..

Thank you, Jack. Good afternoon everyone. Well time flies, we’re already one year into the transformation work on Helen of Troy’s business, its organization and its culture. We are pleased to report good progress and our strategic priorities for fiscal 2015, as well as our business.

Our fourth quarter results cap a successful fiscal year of top and bottom line growth. Fourth quarter revenue rose 21% and adjusted net income grew 35% building on favourable third quarter results.

Our healthcare and home environment and our Houseware segments led the way both growing double digit in the fourth quarter driven by a favourable response to new product introductions, strong retail execution and a strong cold flu season.

Our nutritional supplement segment acquired in June of 2014 performed in line with expectations, contributing positively to both our gross margin and our adjusted operating margin. Our personal care slowed its decline in the fourth quarter as we made progress towards stabilization.

Despite foreign currency headwinds for the full fiscal year, Helen of Troy grew revenues by 7.9%, grew adjusted net income by 16.5% and increased adjusted EPS by 30%.

These results are the product of diligent focus on the three strategic priorities we set in fiscal 2015 as the cornerstones of the early states of Helen of Troy’s multi-year transformation. Let me share a few details of the progress we have made on each objective during the fourth quarter and during the year.

We made excellent progress on our first objective of building a winning organization and culture. In shared services we are starting to see efficiencies and increased collaboration from our warehouse, logistics and sourcing operations. We also improved our information technology capability, including hiring a new CIO, Mr. John Conklin.

Our new global leadership council has united the business units with the shared services that support them globally and with our corporate team. We have excellent leaders in each of the global leadership council positions, including well deserved promotions of internal talent and new world class players we have brought into the company.

In our business units, we are pleased with the addition of Connie Hallquist, President of Healthy Directions and we have a made a bold change in personal care unifying the various businesses constituting this 400 plus million dollar global segment under one President Ms. Leah Bailey who joined us in March 2015.

These new leaders each bring more than 25 of experience in their respective fields and have outstanding track records. I look forward to their leadership and to the highly collaborative approach they bring to building our business and organization.

Our new culture continues to take root and becomes a power force unifying and motivating our worldwide base of employees. Our second objective was to accelerate and sustain organic growth.

In Fiscal 2015, our core business grew by 2.1%, despite the $12.5 million impact of a one-time European distribution arrangement in fiscal 2014 that did not repeat in 2015. This growth was driven in-part by new product launches and increased marketing support.

As an example, in one of our core categories we launched Febreze air purifiers to complement our market leading Honeywell line. Over the past year, the result has been growth of our U.S. market share in air purification for the ninth consecutive year, now toping 50%.

In another category in our core thermometers, we launched three innovative new products under Braun further expanding our position as the number one brand in the market. The launches were helped by the strong cold flu season and a particularly strong level of pediatric fever in fiscal 2015.

PUR water filtration also grew share in fiscal 2015 behind new packaging, new positioning and a new pitcher system. In housewares OXO continued growing organically, now nearly 300 million in sales, it is driven by product innovation, expanded shelf placement, and international growth.

In the fourth quarter OXO launched its innovative green saver product which has been well received. Our OXO top line continues to gain traction with consumers with sales up 30% for the full fiscal year.

International expansion continues to be an important growth driver for OXO with international sales growing in the low double digits once again in fiscal 2015. In our personal care business, were our primary focus in stabilization, we saw a decline a 3.7% in the fourth quarter. This compared to a 12.8% decline for the first half of fiscal 2015.

We continue to work on improving the fundamentals of branding, quality, packaging, and a more efficient product assortment with a better margin profile. During the quarter, we gained expanded distribution on our new Dr Scholl's callus buffer in the United States.

We also continue to invest in developing more differentiated and higher margin personal care products for appliances and for parts of the segment. In fiscal 2015, this segment generated strong adjusted EBITDA of $65.2 million. Our third objective is to continue engage in shareholder friendly policies to drive shareholder value.

A key factor of that strategy is to leverage the strong cash flow generation of our business to make accretive acquisitions, as well as leverage organic growth potential of our existing businesses. The strategic acquisition of Healthy Directions last June contributed a $100 million in revenue in fiscal 2015 and has been accretive.

Healthy Directions expanded our foot print in healthcare and added additional branded proprietary high margin consumables as well as a direct consumer capability to our portfolio. And as we recently announced, subsequent to the end of the fourth quarter we closed two transactions that expanded our inhalant business in United States.

Adding Vicks VapoSteam to our existing Vicks VapoPad inhalant further strengthens our U.S. humidifier and vaporizer business with consumable refills in both the liquid and pad form. The vast majority of Vicks VapoSteam and VapoPad’s are used in Vicks humidifiers, vaporizers, and other healthcare devices already marketed by Helen of Troy.

By combining the business of devices and consumables we are now able to give inhalants greater marketing focus and to invest in additional new product development. Overall, a good year and a good start to our transformation.

As we look to fiscal 2016, we will continue implementing these themes and roll out additional strategic elements of our multiyear plan for transformation. I’d like to introduce these strategies to you now. We look forward to providing more detail on each of them during our Investor Day in a few weeks. The first strategy is to invest in our core.

In fiscal 2015, we increased our investments in those brands with the most promising potential for organic growth. In addition to investing in new product development and launches, we spent $5 million in incremental marketing and advertising in our core.

In fiscal ’16, we will continue to make prudent investments in developing and launching new products, new go-to-market plans and new marketing activities for brands with leading physicians or with the potential to grow share, about $15 million incremental across the company.

This will include continued focus on sweetening our mix through the growth of products that feature consumables. The second strategy involves strategic, disciplined M&A.

Building on our track record of accretive acquisitions; we will continue to source and evaluate new strategically sound businesses and opportunities to expand in categories and geographies where we believe we can develop a competitive advantage. The third is to focus on consumer centric innovation.

We have a long history of developing or acquiring new technologies, new products that improve consumers’ lives and new design that differentiate our products from competitors.

As we increase our focus on innovation both in our core categories and also in new adjacencies, we are increasingly reapplying best practices across all business segments companywide. The fourth is to upgrade our organization and people systems.

In fiscal 2015, we transformed our organizational structure to improve capability and increased collaboration across the company. We implemented best practices across segments and departments and began to better leverage our scale.

We also adopted a new compensation program that we believe will promote greater accountability, better alignment with management and shareholder interest, and help us attract and retain talent. In fiscal ‘16, we will continue to drive these initiatives companywide and add new emphasis on talent development.

The fifth is to develop best in class shared services. In fiscal 2015, we installed a new COO, upgraded leadership and applied best practices. These actions have allowed us to better leverage our scale with vendors, improve warehouse efficiency and better manage our inventory.

We will continue to drive these going forward and now begin to unlock further potential through improvements in information technology under the direction of our new CIO. The sixth is to attack waste. We kicked off a cost savings initiative in fiscal 2015.

The results to date include $6 million of savings between fiscal ’15 and fiscal ‘16 primarily in sourcing, ware house and distribution. We plan to reinvest some of these savings to grow our core with the remainder offsetting margin compression from foreign exchange headwinds.

And the seventh is to improve asset efficiency and maintain our shareholder friendly policies. On the asset side, our emphasis is to improve accounts receivable and inventory.

On the capital side, we are using the strong cash flow generation of our business and the financial flexibility of our balance sheet to invest in our core business first, search for accretive acquisitions, then consider return of capital to shareholders.

We will continue the practices we began in fiscal ’15 of our active investor outreach via investor meetings and attend relevant investor conferences. We believe these seven strategic elements will fuel the next steps in our multiyear transformation. As I mentioned we look forward to discussing these in more depth on May 12.

And with that, I would like to turn the call over to Brian Grass..

Thank you, Julien. Good afternoon everyone. Before I begin discussing our fiscal year 2015 results and our outlook for fiscal year ’16, I would like to briefly discuss foreign currency as it had a significant impact in fiscal year ‘15 and we expected to have even greater impact in fiscal year ‘16.

The recent weakening of many foreign currencies against the U.S. dollar affects our company’s results in several ways. Similar to other U.S. dollar reporting companies transacting in foreign currencies, when the dollar strengthens our operating results and/or operating results are remeasured from foreign currencies, it reduces our U.S.

dollar reported net sales, operating income and net income. Unlike some other multinational companies, most of our sourcing is done in the U.S. dollar so there is little to no reduction in our reported cost of goods sold when foreign currencies weaken.

Further a large portion of our EMEA operating expenses are denominated in the Swiss franc which actually appreciated fairly significantly as other foreign currencies were weakening. This resulted in higher U.S. dollar reported operating expenses for our company in the fourth quarter.

Assuming the Swiss franc stays at today’s rate, this will continue to impact our year-over-year results until the appreciation anniversary next January.

When thinking about the impact of foreign currency fluctuation on Helen of Troy’s results, it may be helpful to consider that for every one dollar fluctuation in net sales from foreign currency approximately $0.60 to $0.70 could fall to the bottom line.

This is based on our recent fourth quarter experience but of course this would depend on the mix of currencies and their volatility against the U.S. dollar.

There is also an impact from the settlement transaction and a remeasurement of the company’s monetary assets and liabilities denominated in foreign currencies, which is reported in SG&A as is the impact of settlements of any hedging transactions that the company may enter into.

The company intends to mitigate the impact of foreign currency fluctuations through price increases, but our ability to take price increases is limited by market conditions and often we are not able to pass along the full impact as is the case with many companies now reporting results for the first quarter of calendar 2015.

The company also considers forward contracts to hedge against exchange rate risk. With that as a background, I would like to start by highlighting the impact that foreign currency had on our results for the fourth quarter.

Foreign currency exchange rate fluctuations reduced our reported net sales revenue by $5.4 million or 1.7 percentage points year-over-year.

Not that the most significant volatility with respect to Euro, Canadian dollar and Swiss franc occurred in January which means that only a portion of the impact was recognized in the fourth quarter of fiscal year 2015.

We also had net foreign currency exchange losses of $2.4 million reported in SG&A for the fourth quarter of fiscal year 2015 compared to $0.6 million loss in the same period last year. Now moving to my discussion, consolidated sales revenue was $ 377.7 million for the quarter a 20.9% increase over the prior year period.

Overall our core business grew $ 27.9 million 8.9% for the quarter which includes the reduction of $5.4 million or 1.7 percentage points from foreign currency fluctuations referred to previously.

As Julien mentioned, core business growth was led by growth of 16.6% in our healthcare, home environment segment and growth of 11.9% in our house ware segment. Healthy directions contributed $37.3 million in sales during the quarter.

While we did experience a sales decline in personal care segment of 3.7% or $3.8 million, approximately $ 1.5 million or 1.5 percentage points of the decline was due to the impact of foreign currency. Consolidated gross profit was 43.7% of net sales compared to 40.2% of net sales in the fourth quarter of fiscal ‘14.

The 3.5 percentage point improvement was primarily due to three months of operations of the nutritional supplement segment which had a favorable impact of 3.3 percentage points on the consolidated gross profit margin.

The core business improved by 0.2 percentage points compared to the same period last year mostly due to a better mix, partially offset by the negative impact of foreign currency which reduced our reported gross profit margin by approximately 0.7 percentage points.

SG&A was 30.7% of net sales compared to 34.8% of net sales in the fourth quarter of fiscal ‘14. The 4.1 percentage point improvement is primarily due to $18.2 million of CEO succession cost and higher share-based compensation expense in the same period last year associated with our former CEOs employment and separation agreements.

This improvement was partially offset by higher relative SG&A ratio in the nutritional supplement segment, higher advertising and other marketing expenditures in the core business and higher year-over-year net foreign currency exchange losses of $1.8 million in the core business.

Operating income was $49 million compared to operating income of $16.7 million in the same period last year reflecting sales growth, greater operating leverage as well as the items previously mentioned.

Adjusted operating income, excluding CEO succession cost, non-cash share-based compensation, and non-cash intangible asset amortization expenses as applicable, increased 26.3% to $57.3 million, compared to $45.4 million in the same period last year.

Adjusted operating margin improved to 15.2%, compared to 14.5% in the same period last year despite the negative impact of foreign currency. Income tax expense as a percentage of pre-tax income was 11.5%, compared to 22.7% for the same period last year.

The year-over-year comparison of our effective tax rate was primarily impacted by shifts in the mix of taxable income in our various tax jurisdictions. Net income was $40.6 million or $1.40 per diluted share on 29 million weighted average diluted shares outstanding.

This compares to net income in the fourth quarter of fiscal year 2014 of $11 million or $0.34 per diluted share on 32.6 million shares, which included CEO succession cost of $0.50 per diluted share.

Adjusted income was $48.1 million or $1.66 per diluted share, compared to $35.6 million or $1.09 per diluted share for the fourth quarter of fiscal year 2014. Now moving on to our financial position, at February 28, 2015, accounts receivable was $222.5 million, compared to $213.1 million at the same time last year.

Receivable turnover was 58.6 days compared to 63.7 days at the same time last year. Inventory increased $3.8 million to $293.1 million, compared to $289.3 million at the same time last year and includes $7.4 million of inventory from Healthy Directions that was not in our inventory balance last year.

Inventory turnover was 2.7 times compared to 2.8 times for the same period last year. Total short and long term debt increased to $433.2 million at February 28, 2015, compared to $192.6 million at February 28, 2014.

The increase primarily reflects borrowings incurred in conjunction with the repurchase of $273.6 million of common stock in the first quarter of fiscal year 2015 and the acquisition of Healthy Directions for $195.9 million in the second quarter of fiscal year 2015.

We ended the fiscal year with a leverage ratio of 1.93 times, compared to 2.93 times at the end of the second quarter.

We expect that VapoSteam and VapoPads transactions to further enhance the profitability of our Healthcare/Home Environment segment at incremental cash flow to Helen of Troy at an attractive valuation and be accretive in fiscal year 2016.

The aggregate consideration for the two transactions was approximately $42.8 million, which implies multiple of less than 8 times adjusted EBITDA.

We have detailed our full fiscal year 2015 results in our earnings release, but just to touch up a few highlights, consolidated sales revenue increased 9.7% to $1.45 billion, which included a foreign currency headwind of $7.5 million. Gross margin expanded by 2.3 percentage points, driven by 8 months of contribution from Healthy Directions.

Gross profit margin for the core business was flat despite the impact of foreign currency, which reduced our reported gross profit margin by approximately 3 percentage points.

Consolidated SG&A as a percentage of net sales increased 0.3 percentage points reflecting a higher relative SG&A ratio in the nutritional supplement segment and $3.6 million of acquisition related expenses. SG&A as a percentage of net sales for the core business improved 2.2 percentage points due to the factors detailed in our earnings release.

Adjusted diluted EPS increased 30% to $5.85 and includes an after-tax gain of $0.24 per diluted share from the amendment of a license agreement and after-tax decrease in product liability estimates of $0.05 per diluted share and tax benefits of $0.15 per diluted share. Now, I’d like to turn to our outlook for the fiscal year 2016.

Please note that we have provided a reconciliation of fiscal year 2016 projected GAAP diluted EPS to non-GAAP adjusted diluted EPS in our earnings release issued this afternoon. For fiscal year 2016, we expect consolidated net sales revenue in the range of $1.485 billion to $1.536 billion and GAAP diluted EPS in the range of $4.33 to $4.73.

This includes projected sales and GAAP diluted EPS from the VapoSteam acquisition in the range of $10 million to $11 million and $0.03 to $0.08 per share respectively for the 11 months included in our fiscal 2016 results.

On a segment basis, for fiscal year 2016, we expect sales growth for Housewares in the mid-single digits and for the Healthcare/Home Environment in the low-single digits and for Healthy Directions in the mid-single digits. For Personal Care, we expect to see a sales decline in the low to mid single digits.

We expect consolidated non-GAAP adjusted diluted EPS to be the range of $5.40 to $5.85, which excludes after-tax non-cash share-based compensation and intangible asset amortization expense. This includes adjusted diluted EPS for VapoSteam in the range of $0.04 to $0.11 per share.

Our fiscal year 2015 outlook assumes foreign currency exchange rates for the balance of the fiscal year will remain at current levels. This is expected to negatively impact year-over-year net sales revenue by approximately $28 million.

Net income [Audio Gap] diluted EPS outlook is based on an estimated weighted average shares outstanding of 29 million for the full fiscal year of 2016. Further, our outlook assumes that the severity of the cold/flu season will be in-line with historical averages. As a reminder, the recent cold/flu season was above average.

The likelihood and potential impact of any fiscal year 2015 acquisitions, other than VapoSteam, asset impairment charges, future foreign currency fluctuations, including any potential currency devaluation in Venezuela, or share repurchases are unknown and cannot be reasonably estimated, therefore, they are not included in our sales and earnings outlook.

As a reminder, in fiscal year 2015, the company benefited from an after-tax gain of $0.24 per share from the amendment of a license agreement, and after-tax decrease and product liability estimates of $0.05 per share and tax benefits of $0.15 per share that are not expected to repeat in fiscal year 2016.

These items negatively impacted year-over-year comparison of adjusted diluted EPS of fiscal year 2015 by a combined $0.44. As mentioned, the year-over-year comparison is also negatively impacted by the estimated foreign currency impact of $0.59 per share in fiscal year 2016.

Finally, we believe our fiscal year 2016 guidance reflects a balanced approach with respect to investment and organic growth and maintaining healthy margins. Our guidance reflects planned incremental investments in market research, innovation, new product development, and marketing and advertising of over $15 million.

I’d like to make a couple of key points as you think about the cadence of fiscal year 2016. First, a higher proportion of our total marketing and advertising spend will be weighted in the first half of the fiscal year in support of key initiatives during our heavier selling season in the third and fourth quarters.

Second, the first quarter of fiscal year 2016 will reflect the first full quarter impact of recent currency volatility whereas the fourth quarter of fiscal year 2015 only had a partial impact. And lastly, we expect our sales and earnings to be even more heavily weighted towards the second half of the year when compared to fiscal year 2015.

And now, I would like to turn the call back over to Julien for some closing remarks..

Thank you, Brian. We are pleased to see Helen of Troy delivering value to shareholders. We are winning in the marketplace on many of our core businesses and we are making progress on our biggest opportunities for further improvement.

Our strong cash flow and powerful brands continue to be among our greatest assets as are our people, culture, and rigorous adherence to our strategic choices. With that, I’d like to turn the call over to the operator to being the question-and-answer session..

Thank you. [Operator Instructions] We will take our first question from Bob Labick with CJS Securities..

Good afternoon. Congratulations on a very strong quarter and year..

Thanks Bob. Hi there..

Thanks Bob..

Hi.

Just wanted to start with OXO for a little bit, obviously it has been fantastic since you bought it, but doing very well off late as well, lot of news you’ve entered a few new categories off late the electrics bakeware and cookware, I was wondering if you could just give a little bit of an overview on those categories and kind of where we stand in progression, how much of the contribution from them is in the next years guidance or is that all future growth beyond that?.

Sure. Yes, we’ve been on a long role with OXO, a continuity of management has been very important and part of our strategy when we make that kind of acquisition that adds a new leg on to our stool and they’ve done a wonderful job.

In the case of the category expansion it’s true as we move further and further beyond the original core of kitchen gadgets we’re now adding the ones that you mentioned and even others like tot’s and GreenSaver and ones that we mentioned as well.

So, as we look at the pots and pans that we did last year, we are seeing growth and it is cooked into our fiscal 2016 numbers just as a reminder that’s a royalty arrangement with the cookware company and so that one has a profit impact, but not showing up as revenues if we sold them on our own.

In the case of the bakeware and now the very exciting new launch into electrics with the OXO on-line, we do have some included in our forecast already and that said as we are somewhat in experienced in forecasting those new categories, we’ve been careful not to lean forward too far..

Bob I would say that the operating income impact of those two new categories is relatively minimal in fiscal year 2016. There will be a sales impact, but there is also some initial investment costs that will be incurred and so the full-year operating income impact will not be significant in fiscal year 2016..

Okay..

One other comment Bob on that one, just form a margin standpoint is, as we grow OXO into these new spaces, some of those categories do not have the same margin profile as the highly premium kitchen gadgets and while we are still going high premium in all of these categories that’s a very core of OXO, these are the keepers and these are the high-end products.

Will only play in the higher end, but nonetheless not at the same average margins as we expand and make the investments to get traction in the new segments..

Got it. That makes perfect sense.

And then you mentioned I think low double digit on OXO in international, can you just remind us where they are on a penetration basis versus the rest of the company and over time where do you see the international sales of OXO going?.

Sure. So the most penetration segments of the company on international is the health and home environment. OXO is probably third, I’d have to check after our personal care business, which does have a significant International President present, especially in the Americas and Europe, Americas North and South, I mean in Canada, LA and EMEA.

In the case of OXO, Europe is the primary area, especially in the U.K. and we do have a business in Japan and a smaller business in many other countries for OXO. In terms of penetration, we have a long list of wide space opportunities and shelf opportunities versus some of the competitors in those spaces.

For example, over the last year, we just launched into Germany. We’ve increased our sales nicely and yet just scratched the tip of the iceberg there and we are looking at other continental European countries as well. So, it’s a long way of saying just getting started overseas.

That said it’s a nice chunk of the business today and we see that double digit opportunity continuing for some time. It will be affected by the currencies just by the very nature of the comments Brian made about a U.S. dollar based company and International exposure..

Okay great, and then just switching over to healthy directions, obviously nice acquisition for you, nicely accretive during the year, one of the – some of the potential growth drivers you discussed when you bought it were I guess either new doctors or new product launches and then also about selling some of the cast [ph] stuff through the Healthy Directions pipeline, can you just give us an update where those two opportunities stand, if there is still opportunities, if we might see anything from those in 2016?.

Yes, just let me make sure I understand the question, I understand about testing the cast [ph] stuff, but the first part, just make sure I understand it..

If the Healthy Directions launched new product categories for memory or digestion or a new doctor or a new category that you go into..

Yes, okay thank you. So, on the first one first, Healthy Directions is experimenting with new categories and expanding some of its existing doctors into adjacencies that those doctors can handle. For example in the cardiac area several new products in the area of cardiac Coenzyme, CoQ10, but now with a feature that includes weight reduction.

So, these kinds of adjacencies are possible. They are constantly testing new spaces looking at new formulas and even talking to some new doctors that are not in the portfolio today.

On the subject of testing, the cast [ph] items, there has been some early tests and while we’ve seen nice results on a percentage basis in terms of the amount of units that we are selling at least with these very early experiments, we have not seen large-scale movement.

So we’re going to be looking at new ways to explain those kinds of products in particular water purifiers and air purifiers with the intention of seeing whether that target audience will respond to different kind of messages. So far while the response rates are interesting, the absolute volume of responses are not as high as we liked them to be..

Okay, great. And then last one and I’ll get back in queue and others ask, but obviously very strong cash flow you got to essentially below your targeted leverage range of I think two to four times the nice VapoSteam, VapoPad acquisition as well.

Can you just talk a little bit about the criteria for future acquisitions as you outline that as one of the strategic initiatives for next year?.

Yes and we will say more about this on our Investor Day as well.

The ability to meet many of the features that you hear me talk about all the time for example being a strong brand meaning number one or number two in its category, in a category big enough to make a difference, in a category where we believe there is a proprietary technology even better if it has a high margin consumables, you can see that double profit stream, one from the initial sale and then from the follow-on repurchase cycle of the consumables, brands with international presence or the potential to be more global and going to multiple countries.

And while we prefer to own the brands and that is our primary criteria, we will license under the right conditions and you saw us do a combination of purchase and license just now in VapoSteam. So those are many of the criteria, there are a few others and in the end if it’s a good business and it fits well with our machine, we like it.

And as you mentioned, the cash flow is important.

So one of the most important features of Helen of Troy is its ability to generate a strong flow of after-tax cash and that cash can be borrowed at least in today’s interest rate – sorry leveraged in today’s interest rate environment to make these purchases and because of the flow paid back quickly, so we can do it again, accrete our earnings and accelerate..

Okay great. Congrats again on a great quarter and year, and talk to you soon..

Great. Thank you, Bob..

We will move next to Steph Wissink with Piper Jaffray..

Hi, good afternoon everyone. Thanks for taking our question. Just a couple of questions on a housekeeping basis. First, I think Julien you mentioned or Brian that the cold and flu season in your guidance for 2016 is assumed at average.

So could you just help us with censurability in ‘15 how much above average was it? Just help us understand kind of the back half cadence of the third and fourth quarter?.

Sure. So we did find that the season was above normal. It was significant in the middle of the season especially months like December when it peaked and that peak was meaningfully higher.

I don’t have a specific percentage but think 10% to 15% above in that range on a total symptom basis meaning cough, cold, flu like symptoms fever et cetera On the fever side on the other hand, it was an especially strong year statistically outlier in a good way and the number was 32% above year ago.

And the reason I call out pediatric fever, that’s the 32% by the way and not all fever is because it especially helped thermometer launches during the fiscal year. So as you think of ‘16, think of numbers like that 10% or 15% less total incidents to get back to an average year.

And on the fever side, especially for children which is a primary correlate to thermometer purchases, we saw numbers as high as 30% higher than the traditional average..

Very helpful, Julien. Thank you.

And then you mentioned also when you are going through your seven initiatives, with the upgrades and talent that you’ve had also a new incentive plan, can you just give us any insight until what may be the old metrics were and what the new recast incentive plan includes in terms of meeting more alignment with the stock or shareholder value..

Yes. So the new system has multiple features.

First of all, its metric based and while we did have metrics in our prior system in parts of the company in fact most had targets, there was quite a lot of discretion in the annual bonus as well and here on a cash bonus basis, it’s much more metrics driven now and tied to the same kind of numbers that we’ve just rolled out to you from a guidance standpoint cascaded through the various divisions of the company, sales, profitability, asset efficiency which means things like inventory and accounts receivable.

So there is a direct tie to what we are trying to deliver in our own financials to you as a shareholder.

To the long-term compensation, we are replacing options for most people in the company especially the senior ones with the combination of longer-term like three-year windows that have features such as cash and stock, stock primarily in the form of performance units (PSUs) and some restricted stock that is also in the form of time based.

So more stock, less options, longer windows and metrics based..

Great. And then just a last one for us on the personal care segment, I am just curious within that operating division, what core categories of the business are turning first. Then as you guided I think your down low to mid single would imply kind of a fourth quarter run rate carry through.

So tell us just a little bit about where you are seeing some of the business turn and maybe what’s taking a little bit longer to turn? Thank you..

Sure. Sure, no problem. And in terms of turning, I wouldn’t yet use that word, I would say, we are slowing the decline as you saw in the fourth quarter. We also reported a slower decline in the third quarter after a very strong decline in the first half and while we are encouraged by what we are seeing in the marketplace, we’ve got a long way to go.

That’s where the new products and the other fundamentals that I mentioned will help. In terms of which parts are moving in which direction, we are seeing stabilization in fact growth in our brushes, combs, and accessories business, that’s the smallest part of personal care.

We are seeing slower declines in the retail appliance business, which is the largest part, stability, but frankly a little decline in some quarters in the professional appliance business, which is especially productive from a cash generation standpoint.

And then the liquids and lotions business is also now starting to stabilize and is especially productive in terms of cash. So we are a few quarters away from being able to say that we are stable, we need a trend, and we also need to see the various pieces all performing. And we feel a bit more confident to say that we are stable..

Thank you, guys. Best of luck..

Thank you..

Yeah. Thanks, Steph..

[Operator Instructions] We will move next to Jason Gere with KeyBanc..

Good afternoon, guys. I apologize I miss part of Brian – of kind of some of your comments.

I was just wondering as you talk about 2016, I guess two question, one, if you provided kind of a growth algorithm for the top line in the core business, excluding acquisitions and where would you see some of the stronger growth coming through between the four division, if maybe you can kind of give a little color there?.

Yeah, in my remarks, I did provide growth expectations kind of broken down by the segments. So what you can expect for housewares is mid-single digits; for healthcare/home environment, low-single digits; for Healthy Directions, mid-single digits; and then for personal care, a decline of low-single digits..

Okay, great. And I apologize for making you repeat that..

Sorry, let me – Jason, let me clarify that, mid to low single digits..

For the personal care?.

Correct..

Okay and thank you for repeating that. I got dropped off the call, so I kind of missed that part. I guess the other question was really on the FX and we’ve heard a lot of companies talk about the pains of the exposure there. I guess I was a little surprised that it was that much greater for you guys than it is for some my other companies out there.

So I was just wondering as you are looking to grow more international, can you talk a little bit about some of the offsets, where you think that there is great opportunity to kind of minimize that EPS or kind of expense impact that would come through, especially I think you talked about sourcing a lot in U.S.

dollars? I was just wondering – and maybe this is something you will talk more about at the analyst day, but I was just wondering if you can give a little bit more color for FX as a kind of offset, what seems to be a really good fundamental improvement as you can see that build out?.

Yeah, I think we have several options. One thing that we have done is we have done some hedging transactions at the very end of fiscal year 2015. We’ve hedged some Canadian, euro, and pound exposure. It averages between 30% to 50% of our exposure in those currencies in terms of the proportion that we’ve hedged.

And generally speaking, we’ve hedged at slightly higher rate than we are today. So we’ve taken a little bit of action there. We will continue to look at those hedging option. We will also continue to look at more structural type hedges. We will consider possibly some debt, some type of transaction that would allow for some debt in foreign currency.

And then we are evaluating also some sourcing options where we could build in a natural hedge through sourcing. So those are the things we are looking at.

As I also mentioned in my remarks, we are very actively trying to take price increases where we can, but a lot of those are limited by market conditions and so we have to be careful with those, but we are definitely focused on that..

The one built I would put on that one, Jason, is the expense efficiencies that I mentioned from the project cost reduction is playing a big role and that’s allowing us to provide the guidance year-over-year that you saw despite all those foreign exchange headwinds and nonetheless continue to invest in the core and have some money left over to offset enough of those exchange rate headwinds to continue to deliver growth despite there were items that Brian mentioned such as the historical currency in fiscal 2015, Honeywell transaction, the other non-repeating items such as the tax and the reduction in liability expense..

Okay. Perfect. Thank you. And I will see you in a few weeks..

Yeah, sounds good, Jason..

Sounds good..

Everyone, that just conclude our question-and-answer session. I will turn it back over to our speakers for any final or additional remarks..

Wonderful. Well, thank you and thank you for joining us here today and for your continued interest and for your support in Helen of Troy. We look forward to seeing many of you in a few weeks and speaking with you again when we report our first quarter results in July. So, thanks, again, and have a wonderful evening..

And everyone, that does conclude our conference call for today. We do thank you all for your participation..