Attached files
file | filename |
---|---|
8-K/A - AMENDMENT TO FORM 8-K - HELEN OF TROY LTD | a11-8102_18ka.htm |
EX-99.1 - EX-99.1 - HELEN OF TROY LTD | a11-8102_1ex99d1.htm |
EX-99.3 - EX-99.3 - HELEN OF TROY LTD | a11-8102_1ex99d3.htm |
EX-23.1 - EX-23.1 - HELEN OF TROY LTD | a11-8102_1ex23d1.htm |
EXHIBIT 99.2
KAZ, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Financial Statements
as of October 29, 2010 and April 30, 2010 and
for the Six Months Ended October 29, 2010 and October 23, 2009
KAZ, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
|
|
Page |
|
|
|
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
|
|
|
|
|
Balance Sheets |
|
29 |
|
|
|
Statements of Operations |
|
30 |
|
|
|
Statement of Redeemable Convertible Preferred Stock and Stockholders Deficit |
|
31 |
|
|
|
Statements of Cash Flows |
|
32 |
|
|
|
Notes to Condensed Consolidated Financial Statements |
|
33 |
KAZ, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF OCTOBER 29, 2010 AND APRIL 30, 2010
(In thousands)
|
|
October 29, 2010 |
|
April 30, 2010 |
| ||
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current Assets: |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
12,167 |
|
$ |
23,429 |
|
Accounts receivable, net of allowances for bad debts $4,934 and $4,727, respectively |
|
46,315 |
|
27,625 |
| ||
Inventories, net |
|
58,834 |
|
41,982 |
| ||
Prepaid expenses and other current assets |
|
5,800 |
|
4,741 |
| ||
Income tax receivable |
|
3,775 |
|
3,762 |
| ||
Deferred tax asset |
|
48 |
|
47 |
| ||
|
|
|
|
|
| ||
Total current assets |
|
126,939 |
|
101,586 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
|
6,503 |
|
7,052 |
| ||
Goodwill |
|
3,147 |
|
3,147 |
| ||
Intangible assets, net |
|
11,634 |
|
12,472 |
| ||
Other assets |
|
2,927 |
|
3,264 |
| ||
|
|
|
|
|
| ||
Total Assets |
|
$ |
151,150 |
|
$ |
127,521 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS DEFICIT |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current Liabilities: |
|
|
|
|
| ||
Current maturities of long-term debt |
|
$ |
205 |
|
$ |
205 |
|
Accounts payable |
|
51,112 |
|
35,080 |
| ||
Accrued expenses and other current liabilities |
|
28,020 |
|
31,389 |
| ||
|
|
|
|
|
| ||
Total current liabilities |
|
79,337 |
|
66,674 |
| ||
|
|
|
|
|
| ||
Long-term debt |
|
2,874 |
|
3,079 |
| ||
Stock compensation liabilities |
|
22,496 |
|
11,005 |
| ||
Warrant liabilities |
|
11,401 |
|
10,761 |
| ||
Derivative liabilities |
|
3,701 |
|
6,000 |
| ||
Other liabilities |
|
2,634 |
|
2,606 |
| ||
|
|
|
|
|
| ||
Total liabilities |
|
122,443 |
|
100,125 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies (Note 6) |
|
|
|
|
| ||
|
|
|
|
|
| ||
Redeemable convertible preferred stock |
|
51,319 |
|
51,319 |
| ||
|
|
|
|
|
| ||
Stockholders Deficit |
|
|
|
|
| ||
Common stock |
|
118 |
|
116 |
| ||
Additional paid-in capital |
|
20 |
|
|
| ||
Accumulated deficit |
|
(34,590 |
) |
(34,777 |
) | ||
Accumulated other comprehensive income |
|
11,840 |
|
10,738 |
| ||
|
|
|
|
|
| ||
Total stockholders deficit |
|
(22,612 |
) |
(23,923 |
) | ||
|
|
|
|
|
| ||
Total Liabilities and Stockholders Deficit |
|
$ |
151,150 |
|
$ |
127,521 |
|
See notes to unaudited condensed consolidated financial statements
KAZ, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED OCTOBER 29, 2010 AND OCTOBER 23, 2009
(In thousands)
|
|
October 29, 2010 |
|
October 23, 2009 |
| ||
|
|
|
|
|
| ||
Net sales |
|
$ |
215,476 |
|
$ |
218,819 |
|
Cost of goods sold |
|
148,250 |
|
154,471 |
| ||
|
|
|
|
|
| ||
Gross profit |
|
67,226 |
|
64,348 |
| ||
|
|
|
|
|
| ||
Selling expenses |
|
31,606 |
|
32,295 |
| ||
General and administrative expenses |
|
31,276 |
|
20,893 |
| ||
Research and development expenses |
|
4,243 |
|
4,298 |
| ||
|
|
|
|
|
| ||
Operating income |
|
101 |
|
6,862 |
| ||
|
|
|
|
|
| ||
Other (income) expense: |
|
|
|
|
| ||
Interest expense, net of interest income |
|
675 |
|
2,353 |
| ||
Other income, net |
|
(2,111 |
) |
(5,745 |
) | ||
|
|
|
|
|
| ||
Total other (income) expense |
|
(1,436 |
) |
(3,392 |
) | ||
|
|
|
|
|
| ||
Income before provision for income taxes |
|
1,537 |
|
10,254 |
| ||
Provision for income taxes |
|
1,350 |
|
829 |
| ||
|
|
|
|
|
| ||
Net income |
|
$ |
187 |
|
$ |
9,425 |
|
See notes to unaudited condensed consolidated financial statements
KAZ, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT
FOR THE SIX MONTHS ENDED OCTOBER 29, 2010
(In thousands except share information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
| |||||||||||
|
|
Series A |
|
|
|
Class A |
|
Class B |
|
Class C |
|
Additional |
|
|
|
Other |
|
Total |
|
Other |
| |||||||||||||||||
|
|
Preferred Stock |
|
|
|
Common Stock |
|
Common Stock |
|
Common Stock |
|
Paid-In |
|
Accumulated |
|
Comprehensive |
|
Stockholders |
|
Comprehensive |
| |||||||||||||||||
|
|
Shares |
|
Amount |
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Income |
|
Equity (Deficit) |
|
Income |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance at April 30, 2010 |
|
318.43 |
|
$ |
51,319 |
|
|
|
548.40 |
|
$ |
55 |
|
548.40 |
|
$ |
55 |
|
63.41 |
|
$ |
6 |
|
$ |
|
|
$ |
(34,777 |
) |
$ |
10,738 |
|
$ |
(23,923 |
) |
|
| |
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.97 |
|
2 |
|
20 |
|
|
|
|
|
22 |
|
|
| |||||||||
Comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
187 |
|
|
|
187 |
|
$ |
187 |
| ||||||||
Foreign currency translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,102 |
|
1,102 |
|
1,102 |
| |||||||||
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,289 |
| ||||||||
Balance at October 29, 2010 |
|
318.43 |
|
$ |
51,319 |
|
|
|
548.40 |
|
$ |
55 |
|
548.40 |
|
$ |
55 |
|
87.38 |
|
$ |
8 |
|
$ |
20 |
|
$ |
(34,590 |
) |
$ |
11,840 |
|
$ |
(22,612 |
) |
|
|
See notes to unaudited condensed consolidated financial statements
KAZ, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 29, 2010 AND OCTOBER 23, 2009
(In thousands)
|
|
October 29, 2010 |
|
October 23, 2009 |
| ||
OPERATING ACTIVITIES: |
|
|
|
|
| ||
Net income |
|
$ |
187 |
|
$ |
9,425 |
|
Adjustments to reconcile net income to net cash (used in) provided by operations: |
|
|
|
|
| ||
Depreciation and amortization |
|
2,439 |
|
2,424 |
| ||
Interest accretion and amortization of debt discount |
|
432 |
|
719 |
| ||
Provisions for accounts receivable valuation allowances |
|
201 |
|
624 |
| ||
(Gain)/loss on disposal of property and equipment |
|
253 |
|
(93 |
) | ||
Stock-based compensation |
|
11,513 |
|
561 |
| ||
Gain on foreign currency transactions |
|
(1,089 |
) |
(5,648 |
) | ||
Decrease in warrant liabilities and derivative liabilities, net |
|
(1,659 |
) |
|
| ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
|
(19,111 |
) |
(14,739 |
) | ||
Inventories |
|
(17,468 |
) |
15,873 |
| ||
Prepaid expenses and other current assets |
|
(783 |
) |
(7,046 |
) | ||
Income tax receivable |
|
(14 |
) |
(953 |
) | ||
Other assets |
|
(95 |
) |
(99 |
) | ||
Accounts payable |
|
16,401 |
|
21,592 |
| ||
Accrued expenses and other current liabilities |
|
(3,003 |
) |
7,414 |
| ||
Other liabilities |
|
1,116 |
|
5,665 |
| ||
Net cash (used in) provided by operating activities |
|
(10,680 |
) |
35,719 |
| ||
|
|
|
|
|
| ||
INVESTING ACTIVITIES: |
|
|
|
|
| ||
Capital expenditures |
|
(915 |
) |
(654 |
) | ||
Proceeds from sale of equipment |
|
4 |
|
|
| ||
Net cash used in investing activities |
|
(911 |
) |
(654 |
) | ||
|
|
|
|
|
| ||
FINANCING ACTIVITIES: |
|
|
|
|
| ||
Principal payments on revolving line of credit, net |
|
|
|
(10,994 |
) | ||
Principal payments on long-term debt |
|
(205 |
) |
(20,726 |
) | ||
Net cash used in financing activities |
|
(205 |
) |
(31,720 |
) | ||
Effect of foreign exchange on cash |
|
534 |
|
(6,032 |
) | ||
Net decrease in cash and cash equivalents |
|
(11,262 |
) |
(2,687 |
) | ||
Cash and cash equivalents, beginning of fiscal year |
|
23,429 |
|
5,772 |
| ||
Cash and cash equivalents, end of fiscal period |
|
$ |
12,167 |
|
$ |
3,085 |
|
See notes to unaudited condensed consolidated financial statements
KAZ, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF OCTOBER 29, 2010 AND APRIL 30, 2010 AND FOR THE SIX MONTHS ENDED OCTOBER 29, 2010 and OCTOBER 23, 2009
(In thousands except share and per share information)
1. BUSINESS AND BASIS OF PRESENTATION
Business
Kaz, Inc. and its Subsidiaries (the Company) is a leading provider of a broad range of consumer products. The Companys three primary product categories, Home Healthcare, Home Environment, and Lawn & Garden, source, market, and distribute a number of well-recognized brands, including: Home Healthcare: Vicks®, Braun®, Kaz®, Smart-Temp®, and SoftHeat®; Home Environment: Honeywell®, Duracraft®, and Dunlap®; and Lawn & Garden: Stinger® and Nosquito®. Products are sold primarily to retailers in the United States and Europe. The Company maintains its headquarters in Southborough, Massachusetts. The Company was acquired by Helen of Troy Limited (Helen of Troy) on December 31, 2010 and became a wholly-owned indirect subsidiary of Helen of Troy on that date.
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited. These financial statements and notes should be read in conjunction with the accompanying audited consolidated financial statements and related notes.
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements and notes have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments (consisting of normal, recurring adjustments) necessary for the fair presentation of the Companys financial position at October 29, 2010 and April 30, 2010 and statements of operations and cash flow for the six months ended October 29, 2010 and October 23, 2009. The interim periods are not necessarily indicative of the results to be expected for any other interim period or the full year.
2. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Companys financial instruments consist of cash and cash equivalents, accounts receivable, marketable securities held in a deferred compensation plan, accounts payable and long-term debt. Fair value hierarchy classifies fair value measurements based on the inputs used in measuring fair value. The inputs include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets for similar instruments that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are considered reasonable estimates of their fair value, due to the short maturity of these instruments.
The Companys long-term debt has never been traded and there are no available quotes or other Company specific observable market inputs to arrive at the fair value of the Companys long-term debt. Based upon consideration of the terms of the Companys long-term debt, the Companys credit worthiness, general market conditions and yields on similar debt obligations, management believes that the carrying value is a reasonable estimate of the fair value of long-term debt at October 29, 2010 and April 30, 2010, respectively.
The following table presents information about the assets measured at fair value on a recurring basis as of October 29, 2010 and April 30, 2010, respectively:
Description |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
Assets: |
|
|
|
|
|
|
|
|
| ||||
Marketable securities as of October 29, 2010 |
|
$ |
1,232 |
|
$ |
|
|
$ |
|
|
$ |
1,232 |
|
Marketable securities as of April 30, 2010 |
|
$ |
1,137 |
|
$ |
|
|
$ |
|
|
$ |
1,137 |
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities: |
|
|
|
|
|
|
|
|
| ||||
Warrant liabilities as of October 29, 2010 |
|
$ |
|
|
$ |
|
|
$ |
11,401 |
|
$ |
11,401 |
|
Derivative liability as of October 29, 2010 |
|
$ |
|
|
$ |
|
|
$ |
3,701 |
|
$ |
3,701 |
|
Warrant liabilities as of April 30, 2010 |
|
$ |
|
|
$ |
|
|
$ |
10,761 |
|
$ |
10,761 |
|
Derivative liability as of April 30, 2010 |
|
$ |
|
|
$ |
|
|
$ |
6,000 |
|
$ |
6,000 |
|
The following table summarizes the changes in the fair value of the warrant and derivative liabilities, which are based on level 3 inputs:
|
|
Derivative |
|
Warrants |
| ||
Balance - April 30, 2010 |
|
$ |
6,000 |
|
$ |
10,761 |
|
Increase/(decrease) in fair value recognized in other expense |
|
(2,299 |
) |
640 |
| ||
Balance - October 29, 2010 |
|
$ |
3,701 |
|
$ |
11,401 |
|
The Companys marketable securities in the deferred compensation plan include mutual funds that are carried at fair value and are classified as other long term assets. Fair value of these securities has been determined based upon market quotes for identical assets at the balance sheet date.
The Company utilized the transaction value proposed in the acquisition of the Company by Helen of Troy and the estimated settlement of the warrant liability to determine the fair value of the warrant liability at October 29, 2010. As of April 30, 2010, the fair value of the warrant liability was determined using the Black Scholes option-pricing model using the following assumptions: expected dividend yield of zero, risk-free interest rate of 2.8%, volatility of 51%, and remaining contractual lives of 6.6 years to 9.6 years. The fair value of the warrants totaled $10,761 at April 30, 2010. As of October 29, 2010, the fair value of the warrants totaled $11,401.
The fair value of the derivative liability was determined by comparing the fair value of the Series A preferred stock that included all of the embedded features that gave rise to the derivative liability to the fair value of the Series A preferred stock that excluded the embedded features. The difference in the two values was deemed to be the fair value of the derivative. As of October 29, 2010, the fair value of the Series A preferred stock was determined utilizing the transaction value proposed in the acquisition of the Company by Helen of Troy. As of April 30, 2010, the fair value of the Series A preferred stock was determined using an option pricing model to allocate the fair value of the Company to the various classes of securities. The option pricing model contemplates the rights and preferences of the various debt and equity securities that are outstanding.
3. INVENTORIES
Inventories are stated at the lower of cost (determined by the first-in, first-out method) or market. Inventories are reduced by reserves for excess and obsolete inventories of $8,942 at October 29, 2010 and $8,946 at April 30, 2010.
The components of inventories at October 29, 2010 and April 30, 2010 are as follows:
|
|
Oct-10 |
|
Apr-10 |
| ||
Raw materials |
|
$ |
248 |
|
$ |
1,664 |
|
Finished goods |
|
58,586 |
|
40,318 |
| ||
|
|
$ |
58,834 |
|
$ |
41,982 |
|
4. INTANGIBLE ASSETS
Intangible assets at October 29, 2010 and April 30, 2010 were as follows:
|
|
Useful Lives |
|
Oct-10 |
|
Apr-10 |
| ||
Patents |
|
5 years |
|
$ |
1,808 |
|
$ |
1,808 |
|
Trademarks and customer relationships |
|
10 years |
|
18,513 |
|
17,982 |
| ||
Product technology |
|
5 years |
|
881 |
|
857 |
| ||
|
|
|
|
21,202 |
|
20,647 |
| ||
Less accumulated amortization |
|
|
|
(9,568 |
) |
(8,175 |
) | ||
|
|
|
|
$ |
11,634 |
|
$ |
12,472 |
|
Annual estimated amortization expense on the intangible assets is as follows:
Fiscal Years |
|
Amount |
| |
Remainder of fiscal 2011 |
|
$ |
1,166 |
|
2012 |
|
1,898 |
| |
2013 |
|
1,798 |
| |
2014 |
|
1,798 |
| |
2015 |
|
1,798 |
| |
2016 and thereafter |
|
3,176 |
| |
|
|
$ |
11,634 |
|
Amortization expense for the six months ended October 2010 and 2009 was $1,285 and $1,257, respectively.
5. RESTRUCTURING
During the fiscal year ended April 24, 2009, the Company initiated a plan to close its three manufacturing facilities located in the United States and China. This restructuring was based on managements determination that outsourcing manufacturing will result in significant cost savings, reduced working capital requirements, improved product quality, and increased on-time delivery to customers. As of April 24, 2009, manufacturing operations ceased at all locations and the restructuring activities were considered substantially complete. Subsequent charges recorded in China related primarily to residual customs and duty charges.
The Company initiated a plan to centralize the organizational business model within Europe, and the first step was to move the regional headquarters to an office in Lausanne, Switzerland. Over a two year period all functions, except sales, were moved to this office. The final stage of the project consisted of the centralization of the warehouses within Europe, and, in August 2009, the Company approved the recommendation to centralize warehouses to one facility located in Belgium. Costs related to this centralization were recorded as restructuring costs in the fiscal year ended April 30, 2010.
For the six months ended October 29, 2010, the Company recorded the following restructuring payments against its reserves:
|
|
Employee |
|
Other |
|
Impairment |
|
Total |
| ||||
Reserve balance at April 30, 2010 |
|
$ |
116 |
|
$ |
5,328 |
|
$ |
|
|
$ |
5,444 |
|
Provision for restructuring |
|
|
|
|
|
|
|
|
| ||||
Cash payments and non-cash charges |
|
(2 |
) |
(4,974 |
) |
|
|
(4,976 |
) | ||||
Reserve balance at October 29, 2010 |
|
$ |
114 |
|
$ |
354 |
|
$ |
|
|
$ |
468 |
|
6. COMMITMENTS
Royalty Commitments
The Company maintains several license agreements to manufacture and sell certain products. Royalties are due to the licensors based upon sales of the licensed products. At October 29, 2010, minimum guaranteed royalty commitments are as follows:
Fiscal Years |
|
Amount |
| |
Remainder of Fiscal 2011 |
|
$ |
5,739 |
|
2012 |
|
10,231 |
| |
2013 |
|
10,231 |
| |
2014 |
|
10,231 |
| |
2015 |
|
10,231 |
| |
|
|
$ |
46,663 |
|
The royalty agreements have indefinite terms and the minimum commitments extend to the termination of the agreement by either party.
For the six months ended October 2010 and 2009, the Company recognized royalty expense of $7,762 and $7,931, respectively, which is reported in selling expenses in the consolidated statements of operations.
Procurement Commitments
The Company outsources manufacturing of its products. As a result of this outsourcing, as of October 29, 2010, the Company had purchase commitments of $10,170 for these products.
Legal Proceedings
The Company is party to certain legal proceedings arising in the ordinary course of business. The Company believes that none of these proceedings will have a material adverse effect on the Companys business, results of operations or financial condition.
Employment Agreements
The Company has entered into employment agreements with certain members of senior management. The terms of these agreements include specified employment terms and provide for defined severance payments and acceleration of vesting of share based awards under certain circumstances, including a sale of the company, other refinancing or recapitalization as well as termination without cause.
Other
The Company is subject to audits on sales and use taxes, unclaimed property, employee benefits, VAT, customs and other assessments. While management believes that known and estimated liabilities have been adequately provided for, additional liabilities could be assessed. Management does not believe that such outcome would have a material negative impact on the financial position, results of operations and cash flows.
7. INCOME TAXES
The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year. Discrete items and changes in our estimate of the annual effective tax rate are recorded in the period they occur. Accounting for income taxes requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax and financial reporting basis of assets and liabilities and for loss and credit carryforwards. Consistent with prior periods, the Company maintained a full valuation allowance against its deferred tax assets due to the historic losses that create uncertainty as the realization of such deferred tax assets. There were no material uncertain tax positions recognized from prior years and there were no changes related to uncertain tax positions during the periods presented.
The recorded provision for the periods presented differs from the statutory rates due primarily to the non-deductibility of the changes in the warrant liabilities and the full valuation allowance provided on the Companys deferred tax assets.
8. RELATED PARTIES
The Company has an agreement with the holders of the Series A preferred stock for an annual management fee, and during the six months ended October 29, 2010 and October 23, 2009, the Company paid $126 and $45, respectively, to the holders of the Series A preferred stock for the management fee, including out-of-pocket costs.
9. SUBSEQUENT EVENTS
The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through March 18, 2011, the date the financial statements became available to be issued.
On December 9, 2010, the Company announced that it had entered into a definitive merger agreement with Helen of Troy, a designer, developer and worldwide marketer of brand-name personal care and household consumer products, to acquire the Company, for $260 million in cash, subject to certain closing working capital and other adjustments. The merger was completed on December 31, 2010. Upon the effectiveness of the merger, Kaz became a wholly-owned indirect subsidiary of the Company.