EDGEWELL PERSONAL CARE COMPANY ST. LOUIS, Nov. 10, 2016 /PRNewswire/ -- Edgewell Personal Care Company (NYSE: EPC) today announced results for its full year and fourth fiscal quarter, which ended September 30, 2016.
Executive Summary
-- Net sales increased 9.0% in the quarter and decreased 2.4% for the full
year. Organic net sales increased 9.2% in the quarter and 1.4% for the
full year. Excluding the estimated impact of international go-to-market
changes, full year underlying net sales would have increased by 2.8%.
-- Net earnings were $52.2 million for the quarter and $178.7 million for
the full year. Adjusted EBITDA was $119.4 million for the quarter and
$440.1 million for the full year.
-- GAAP Diluted Earnings Per Share ("EPS") was $0.88 for the quarter and
$2.99 for the full year. Adjusted EPS was $1.06 for the quarter and
$3.57 for the full year.
-- The Company provided its financial outlook for fiscal 2017 that is in
line with its long term financial objectives.
The Company reports and forecasts results on a GAAP and "Non-GAAP" basis, and has reconciled Non-GAAP results and outlook to the most directly comparable GAAP measures later in this release. See "Non-GAAP Financial Measures" for a more detailed explanation, including definitions of various Non-GAAP terms used in this release.
All comparisons used in this release are with the same period in the prior fiscal year unless otherwise stated.
"We ended fiscal year 2016 with solid fourth quarter results, growing organic net sales in the quarter and the year, driven by growth in Wet Shave and Sun and Skin Care. We are pleased to have exceeded the sales, adjusted EPS, and operational objectives that we set for ourselves at the beginning of the year," said David Hatfield, Edgewell's President, Chief Executive Officer, and Chairman of the Board. "I want to thank all of our Edgewell colleagues around the world for that accomplishment and for their dedication and hard work during a very complex transition year." Mr. Hatfield continued, "We now move into the next phase for Edgewell, one where the strategy and the building blocks are in place to drive sustained performance on both the top and bottom line. We're excited about the organization we have in place, the products we have in the marketplace and the innovation in our pipeline. Although we recognize the tough competitive environment, we are confident that we can deliver results that are in line with the objectives of our long term financial algorithm in 2017."
Fiscal 4Q 2016 Operating Results (Unaudited)
Net sales were $610.6 million in the quarter, an increase of 9.0%. Organic net sales increased 9.2%, driven by growth in all four segments. North America net sales were up 8.4%, with growth across all segments. International (everything outside North America) net sales were up 14.2%, or 11.0% on an organic basis, driven by Wet Shave, with good performance in Asia, and Sun and Skin Care in Asia and Latin America.
Gross margin was $310.1 million, or 50.8% of net sales, representing a 270 basis point improvement over the prior year quarter. The gross margin increase was primarily due to high levels of promotional spending in the prior year quarter and lower material costs in the current year quarter, which was partly offset by higher start-up costs related to the Feminine Care production consolidation into the U.S. plant.
Advertising and sales promotion expense ("A&P") was $82.6 million, or 13.5% of net sales, down from prior year A&P of $95.7 million, or 17.1% of net sales. The majority of the decline was in the Wet Shave segment, as the prior year reflected higher expense related to Hydro Silk® in North America. A&P for the Sun and Skin Care segment was also down versus the year ago quarter.
Selling, general and administrative expense ("SG&A") was $107.8 million, or 17.7% of net sales, including $3.6 million of intangibles amortization, compared to $123.5 million, or 22.0% of net sales, in the prior year quarter. Excluding $30.1 million in prior year charges related to the spin-off of the Company's Household Products business in July 2015, SG&A as a percent of net sales increased 100 basis points over the prior year quarter. This increase was driven by higher spending in strategic growth projects, IT projects and other corporate costs, as well as increased compensation expense, including incentive compensation.
We incurred a $6.5 million non-cash asset intangibles impairment charge during the quarter in connection with our annual impairment testing.
The Company recorded pre-tax restructuring expense of $9.4 million ($1.7 million in Cost of goods sold and $7.7 million in Restructuring charges) compared to $6.3 million in the prior year quarter.
Other expense (income), net was an expense of $2.0 million during the quarter compared to income of $3.5 million in the prior year quarter. The change reflects the impact of foreign currency hedging contract losses, particularly related to the Japanese Yen, and revaluation losses on nonfunctional currency balance sheet exposures.
The effective tax rate for the year ended September 30, 2016 was 18.7% as compared to 35.4% in the prior year. The adjusted 2016 full year effective tax rate was 23.1% as compared to the prior year rate of 23.2%. The 2015 full year adjusted tax rate was favorably impacted by a large allocation of U.S. interest expense and corporate overheads associated with supporting the Company's former Household Products business that are not reported in discontinued operations. The 2016 full year adjusted tax rate includes a favorable mix of earnings in lower tax rate jurisdictions and positive adjustments to prior year tax accruals.
Net earnings in the quarter were $52.2 million, compared to a net loss of $219.5 million in the fourth quarter of fiscal 2015. The increase in net earnings was primarily related to the impact of an intangibles impairment charge and higher costs related to the spin-off in the prior year quarter, and to higher segment profit in the current year quarter. Fourth quarter Adjusted EBITDA was $119.4 million, an increase of $36.4 million versus fourth quarter 2015 Adjusted EBITDA of $83.0 million.
GAAP Diluted EPS was $0.88 in the quarter as compared to a loss of $3.57 in the prior year quarter. Adjusted EPS for the quarter was $1.06, compared to $0.64 in the prior year quarter.
Fiscal 4Q 2016 Operating Segment Results (Unaudited)
Wet Shave (Men's Systems, Women's Systems, Disposables, Shave Preps)
Wet Shave net sales increased $33.1 million, or 9.2%. Excluding the impact of currency movements, organic net sales increased $26.4 million, or 7.4%. North America drove the majority of the increase, due in large part to the high level of promotional spend in the prior year quarter related to coupons and trade spending. International growth was driven by Hydro® sales in Asia and Women's systems performance in EMEA. Wet Shave segment profit increased $38.2 million. On an organic basis, Wet Shave segment profit increased $30.9 million. The increase in profit was driven primarily by lower promotional spending, favorable costs, and lower A&P spend.
Sun and Skin Care (Sun Care, Wipes, Gloves)
Sun and Skin Care net sales increased $11.8 million, or 17.9%. Excluding the impact of currency movements, organic net sales increased $12.0 million, or 18.2%, driven by growth of Banana Boat® and Hawaiian Tropic® in both North America and International. Growth was driven by higher volumes due to category growth versus a year ago. Sun and Skin Care segment profit increased $9.6 million. Excluding the impact of currency movements, organic segment profit improved $9.7 million, driven by higher volumes, favorable price mix, lower product costs and reduced A&P spend.
Feminine Care (Tampons, Pads, Liners)
Feminine Care net sales increased $11.0 million, or 11.4%. Growth was largely driven by lower promotional spending, which more than offset lower volumes this quarter. Feminine Care segment profit decreased $1.1 million. The decrease was primarily due to start-up costs related to the production consolidation into the U.S. plant and slightly lower volumes, which offset the benefit from the lower promotional spend.
All Other (Infant Care, all other brands)
All Other net sales decreased $5.4 million, or 13.8%. Excluding the impact of currency movements and the sale of the Industrial blade business a year ago, organic net sales increased $2.1 million, or 5.3%, with growth in Diaper Genie®, slightly offset by lower volumes in infant cups and bottles. All Other segment profit increased $1.6 million.
Fiscal 2016 Operating Results (Unaudited)
Net sales were $2,362.0 million in fiscal 2016, a decrease of 2.4%. Organic net sales increased 1.4%, including an approximate $34.0 million, or 140 basis point, negative impact from international go-to-market changes. From a geographic perspective, North America organic net sales increased 1.7%, and International organic net sales increased 1.1%, or 5.0% on an underlying basis. From a segment perspective, organic net sales increased 1.8% for Wet Shave, and 4.6% for Sun and Skin Care. Organic net sales decreased 1.8% for Feminine Care and 1.2% for All Other.
Gross margin was $1,159.9 million, or 49.1% of net sales, representing a 20 basis point increase over the prior year, including a 10 basis point benefit from currency.
Net earnings in fiscal 2016 were $178.7 million, compared to a net loss of $275.3 million in fiscal 2015. The increase in earnings was primarily related to the prior year impact of an intangibles impairment charge, the Venezuela deconsolidation, and spin-related charges. Fiscal 2016 Adjusted EBITDA was $440.1 million versus fiscal 2015 Normalized EBITDA of $462.2 million. Year-over-year segment profit growth was more than offset by $7.0 million of unfavorable foreign currency, $11.6 million from the impact of Venezuela and Industrial, and $15 million in Other expense (income), net. The change in Other expense (income), net was driven by foreign currency hedging activity, which was in an income position in fiscal 2015 but changed to a loss position in fiscal 2016, in large part due to the strengthening of the Japanese Yen.
GAAP Diluted EPS was $2.99 in fiscal 2016 as compared to a loss of $4.44 in fiscal 2015. Adjusted EPS for the year was $3.57, compared to $2.80 in the prior year.
Net cash from operating activities was $176.4 million for fiscal 2016. During fiscal 2016, the Company made a discretionary contribution of $100.5 million to one of its international pension plans, and repurchased 2.5 million shares for $196.6 million.
Adjusted working capital as a percent of net sales was 16.1% at September 30, 2016, versus 17.5% as of September 30, 2015. The 140 basis point improvement was driven by improved days payable outstanding and days in inventory. Adjusted working capital continues to reflect a higher level of inventory in Feminine Care, which is expected to return to normal levels as the Company completes the consolidation of Feminine Care manufacturing in the U.S.
On October 20, 2016, the Company terminated its commitments under its Netherlands revolving credit facility and repaid all outstanding loans and other obligations in full, in the amount of approximately $277 million.
On November 1, 2016, the Company announced that it had acquired the outstanding shares of Bulldog Skincare Holdings Limited, a U.K. based men's grooming and skincare products company. The acquisition was financed through available foreign cash.
Full Fiscal Year 2017 Financial Outlook
For fiscal 2017, the Company estimates that net sales will increase by low single digits, with no impact from currency, based on current exchange rates (as of November 2, 2016), and an approximately 40 basis point benefit from the Bulldog acquisition.
The GAAP EPS outlook is estimated to be in the range of $3.60 - $3.80. Adjusted EPS is estimated to be in the range of $3.80 - $4.00. Adjusted operating income margin is anticipated to expand by at least 50 basis points. The impact from the acquisition of Bulldog is expected to be neutral to EPS in 2017. The effective tax rate for the fiscal year is estimated to be in the range of 27% to 28%.
The full-year estimate for restructuring related costs is $15 to $20 million for fiscal 2017. Incremental restructuring savings are expected to be approximately $20 to $25 million in fiscal 2017 and an additional $25 million in fiscal 2018.
The Company anticipates that fiscal 2017 Free Cash Flow will exceed 100% of net earnings.
As part of the Company's strategy to drive systematic cost reduction, the Zero Based Spend (ZBS) initiative was announced last quarter. Based on initial projections, ZBS is anticipated to drive $10 to $15 million in savings (net of implementation expense) in fiscal 2017, primarily in the second half of the year, and an additional $25 to $30 million in savings in fiscal 2018.
In fiscal 2017, we anticipate that sales and earnings growth will not be uniform by quarter, largely due to the timing of product launches and A&P phasing. In particular, fiscal first quarter net sales are anticipated to be flat and segment profit is anticipated to be lower than in the prior year quarter.
Webcast Information
In conjunction with this announcement, the Company will hold an investor conference call beginning at 10:00 a.m. Eastern Time today. The call will focus on fiscal 2016 fourth quarter earnings and the outlook for fiscal 2017. All interested parties may access a live webcast of this conference call at www.edgewell.com, under "Investors," and "News and Events" tabs or by using the following link:
http://ir.edgewell.com/news-and-events/events
For those unable to participate during the live webcast, a replay will be available on www.edgewell.com, under "Investors," "Financial Reports," and "Quarterly Earnings" tabs.
About Edgewell
Edgewell is a leading pure-play consumer products company with an attractive, diversified portfolio of established brand names such as Schick® and Wilkinson Sword® men's and women's shaving systems and disposable razors; Edge® and Skintimate® shave preparations; Playtex®, Stayfree®, Carefree® and o.b.® feminine care products; Banana Boat® and Hawaiian Tropic® sun care products; Playtex® infant feeding, Diaper Genie® and gloves; and Wet Ones® moist wipes. The Company has a broad global footprint and operates in more than 50 markets, including the U.S., Canada, Mexico, Germany, Japan and Australia, with approximately 6,000 employees worldwide.
Non-GAAP Financial Measures. While the Company reports financial results in accordance with accounting principles generally accepted in the U.S. ("GAAP"), this discussion also includes Non-GAAP measures. These Non-GAAP measures are referred to as "adjusted" or "organic" and exclude expenses associated with the Venezuela deconsolidation charge, the sale of the Industrial business, spin costs, restructuring charges, amortization and impairment of intangible assets and cost of early debt retirements. Reconciliations of the Company's Non-GAAP measures, including reconciliations of measures related to the Company's fiscal 2017 financial outlook, are included within the Notes to Condensed Consolidated Financial Statements included with this release.
This Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The Company uses this Non-GAAP information internally to make operating decisions and believes it is helpful to investors because it allows more meaningful period-to-period comparisons of ongoing operating results. Given the significant one-time events that took place during fiscal 2016 and 2015, most prominently the spin-off of the Household Products business and the resulting go-to-market impacts, the deconsolidation of the Company's Venezuela operations and the sale of the Industrial business, the Company views the use of Non-GAAP measures that take into account the impact of these unique events as particularly valuable in understanding the Company's underlying operational results and providing insights into future performance.
The information can also be used to perform analysis and to better identify operating trends that may otherwise be masked or distorted by the types of items that are excluded. This Non-GAAP information is a component in determining management's incentive compensation. Finally, the Company believes this information provides a higher degree of transparency. The following provides additional detail on the Company's Non-GAAP measures.
-- The Company analyzes its net revenue and segment profit on an organic
basis to better measure the comparability of results between periods.
Organic net sales and organic segment profit exclude the impact of
changes in foreign currency, the impact of acquisitions and dispositions
(including the results of the Industrial business) and the
period-over-period change resulting from the deconsolidation of the
Company's Venezuela operations. Underlying net sales represents organic
net sales adjusted for international go-to-market impacts, as defined
below. This information is provided because these fluctuations can
distort the underlying change in net sales and segment profit either
positively or negatively.
-- To compete more effectively as an independent company, the Company has
increased its use of third-party distributors and wholesalers, impacting
sales and gross margin, and has decreased or eliminated its business
operations in certain countries, impacting SG&A, consistent with its
international go-to-market strategy. Within this press release the
Company discusses go-to-market impacts, which reflect its best estimate
on the impact of these international go-to-market changes and exits, and
represent the year-over-year change in those markets. The Company
believes it has realized the majority of the impact from these changes
in the first three quarters of fiscal 2016.
-- Adjusted EBITDA is defined as earnings before income taxes, net interest
expense, depreciation and amortization and excludes items such as
impairment charges, the Venezuela deconsolidation charge, spin costs,
restructuring charges and the sale of the Industrial business.
-- Historical results on a continuing operations basis include certain
costs associated with supporting the Company's former Household Products
business that are not reported in discontinued operations. These costs
affect SG&A, interest expense, spin costs, restructuring and tax. As a
result, EPS and EBITDA on both a GAAP and Non-GAAP basis for this
quarter and fiscal year are not comparable to the prior year, and are
not comparable for each of the first three quarters of fiscal 2016. To
address this, the Company has provided Normalized EBITDA, which adjusts
corporate SG&A expenses to reflect the Company's estimated full-year run
rate. Normalized EBITDA is presented to provide a basis for comparing to
future performance. A reconciliation of Fiscal 2015 Consolidated
Statement of Earnings and Normalized EBITDA by quarter was announced in
a Form 8-K furnished on December 1, 2015, and can be found on the
Company's website www.edgewell.com, under "Investors," and "Financial
Reports," "Key Statistics" tabs or by using the following link:
http://ir.edgewell.com/financial-reports/key-statistics
-- Adjusted operating income is defined as earnings from continuing
operations before income taxes, interest expense associated with debt,
other expense (income), net, and excludes items such as impairment
charges, spin costs, restructuring charges and the sale of the
Industrial business.
-- Adjusted EPS is defined as diluted earnings per share excluding items
such as impairment charges, the Venezuela deconsolidation charge, spin
costs, restructuring charges, the sale of the Industrial business, cost
of early debt retirements and the related tax effects of these items.
-- The Adjusted effective tax rate is defined as the effective tax rate
excluding impairment charges, the Venezuela deconsolidation charge, spin
costs, restructuring charges, the sale of the Industrial business, cost
of early debt retirements and the related tax effects of these items.
-- Adjusted working capital is defined as receivables, less trade
allowances in accrued liabilities, plus inventories, less accounts
payable, and is calculated using an average of the trailing four-quarter
end balances. Adjusted working capital also excludes amounts related to
the Household Products business.
-- Free cash flow is defined as net cash flow from operating activities
less capital expenditures. Free cash flow conversion is defined as free
cash flow as a percentage of net earnings.
Forward-Looking Statements. This document contains both historical and forward-looking statements. Forward-looking statements are not based on historical facts, but instead reflect the Company's expectations, estimates or projections concerning future results or events, including, without limitation, the future earnings and performance of Edgewell Personal Care Company or any of its businesses. These statements generally can be identified by the use of forward-looking words or phrases such as "believe," "expect," "expectation," "anticipate," "may," "could," "intend," "belief," "estimate," "plan," "target," "predict," "likely," "will," "should," "forecast," "outlook," or other similar words or phrases. These statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause the Company's actual results to differ materially from those indicated by those statements. The Company cannot assure you that any of its expectations, estimates or projections will be achieved. The forward-looking statements included in this document are only made as of the date of this document and the Company disclaims any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances. Numerous factors could cause the Company's actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation:
-- The Company is subject to risks related to its international operations,
such as global economic conditions, currency fluctuations and its
international go-to-market strategy, that could adversely affect its
results of operations;
-- The Company's manufacturing facilities, supply channels or other
business operations may be subject to disruption from events beyond its
control;
-- The Company's access to capital markets and borrowing capacity could be
limited;
-- If the Company cannot continue to develop new products in a timely
manner, and at favorable margins, it may not be able to compete
effectively;
-- The Company has a substantial level of indebtedness and is subject to
various covenants relating to such indebtedness, which could limit its
discretion to operate and grow its business;
-- The Company faces risks arising from the restructuring of its operations
and its ongoing efforts to achieve cost savings;
-- Loss of any of the Company's principal customers and emergence of new
sales channels such as e-commerce could significantly decrease its sales
and profitability;
-- The Company may not be able to attract, retain and develop key
personnel;
-- The Company may experience losses or be subject to increased funding and
expenses related to its pension plans;
-- The Company may not be able to continue to identify and complete
strategic acquisitions and effectively integrate acquired companies to
achieve desired financial benefits;
-- The Company's business involves the potential for product liability and
other claims against it, which could affect its results of operations
and financial condition and result in product recalls or withdrawals;
-- A failure of a key information technology system or a breach of the
Company's information security could adversely impact its ability to
conduct business;
-- The resolution of the Company's tax contingencies may result in
additional tax liabilities, which could adversely impact its cash flows
and results of operations;
-- If the Company fails to adequately protect its intellectual property
rights, competitors may manufacture and market similar products, which
could adversely affect its market share and results of operations;
-- Potential liabilities in connection with the Separation may arise under
fraudulent conveyance and transfer laws and legal capital requirements;
and
-- The Company may not achieve some or all of the expected benefits of the
spin-off of its Household Products business, and this may materially
adversely affect its business.
In addition, other risks and uncertainties not presently known to the Company or that it presently considers immaterial could affect the accuracy of any such forward-looking statements. The list of factors above is illustrative, but not exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Additional risks and uncertainties include those detailed from time to time in the Company's publicly filed documents, including in Item 1A. Risk Factors of Part I of the Company's Annual Report on Form 10-K for the year ended September 30, 2015.
EDGEWELL PERSONAL CARE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in millions, except per share data)
Quarter Ended September 30, Year Ended September 30,
2016 2015 2016 2015
---- ---- ---- ----
Net sales $610.6 $560.1 $2,362.0 $2,421.2
Cost of products sold 300.5 290.8 1,202.1 1,237.4
----- ----- ------- -------
Gross profit 310.1 269.3 1,159.9 1,183.8
Selling, general and
administrative
expense 107.8 123.5 412.7 571.6
Advertising and sales
promotion expense 82.6 95.7 336.7 367.1
Research and
development expense 21.7 22.5 71.9 71.0
Impairment charge 6.5 318.2 6.5 318.2
Venezuela
deconsolidation
charge - - - 79.3
Spin restructuring
charges - - - 28.3
Restructuring charges 7.7 6.3 37.0 26.7
Industrial sale
charges - 10.8 0.2 32.7
Interest expense
associated with debt 18.0 16.4 71.8 99.8
Cost of early debt
retirements - - - 59.6
Other expense
(income), net 2.0 (3.5) 3.2 (11.8)
--- ---- --- -----
Earnings (loss) from
continuing operations
before income taxes 63.8 (320.6) 219.9 (458.7)
Income tax provision
(benefit) 11.6 (126.9) 41.2 (162.6)
---- ------ ---- ------
Earnings (loss) from
continuing operations 52.2 (193.7) 178.7 (296.1)
(Loss) earnings from
discontinued
operations, net of
tax - (25.8) - 20.8
--- ----- --- ----
Net earnings (loss) $52.2 $(219.5) $178.7 $(275.3)
===== ======= ====== =======
Basic earnings (loss) per share:
Continuing operations $0.89 $(3.15) $3.02 $(4.78)
Discontinued
operations - (0.42) - 0.34
Net earnings (loss) 0.89 (3.57) 3.02 (4.44)
Diluted earnings (loss) per share:
Continuing operations $0.88 $(3.15) $2.99 $(4.78)
Discontinued
operations - (0.42) - 0.34
Net earnings (loss) 0.88 (3.57) 2.99 (4.44)
Weighted-average shares outstanding:
Basic 58.6 61.5 59.2 62.0
Diluted 59.2 61.5 59.7 62.0
See Accompanying Notes.
EDGEWELL PERSONAL CARE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
Assets September 30, September 30,
2016 2015
---- ----
Current assets
Cash and cash equivalents $738.9 $712.1
Trade receivables, net 260.7 279.8
Inventories 309.2 332.8
Other current assets (1) 143.2 311.9
----- -----
Total current assets 1,452.0 1,636.6
Property, plant and equipment,
net 486.1 498.9
Goodwill 1,420.3 1,421.8
Other intangible assets, net 1,385.1 1,408.5
Other assets (1) 28.0 20.5
---- ----
Total assets $4,771.5 $4,986.3
======== ========
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-
term debt $281.8 $ -
Notes payable 18.5 17.5
Accounts payable 196.5 236.9
Other current liabilities (1) 371.4 412.4
----- -----
Total current liabilities 868.2 666.8
Long-term debt 1,544.2 1,698.6
Deferred income tax
liabilities (1) 255.3 335.8
Other liabilities 274.8 421.0
----- -----
Total liabilities 2,942.5 3,122.2
------- -------
Shareholders' equity
Common shares 0.7 0.7
Additional paid-in capital 1,642.5 1,644.2
Retained earnings 946.0 772.9
Treasury shares (563.0) (382.2)
Accumulated other
comprehensive loss (197.2) (171.5)
------ ------
Total shareholders' equity 1,829.0 1,864.1
------- -------
Total liabilities and
shareholders' equity $4,771.5 $4,986.3
======== ========
(1) The Company early adopted new
accounting guidance during the
first quarter of fiscal 2016 which
required all deferred income tax
assets and liabilities to be
classified as non-current,
resulting in reductions to Other
current assets, Other current
liabilities and Deferred income
tax liabilities of $86.3, $0.7 and
$76.2, respectively, and an
increase in Other assets of $9.4
as of September 30, 2016. The
prospective adoption of the new
guidance had no impact on the
balance sheet as of September 30,
2015.
See Accompanying Notes.
EDGEWELL PERSONAL CARE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Year Ended September 30,
2016 2015
---- ----
Cash Flow from Operating
Activities
Net earnings
(loss) $178.7 $(275.3)
Non-cash
restructuring
costs 3.9 41.5
Depreciation
and
amortization 92.6 115.3
Impairment
charge 6.5 318.2
Venezuela
deconsolidation
charge - 144.5
Non-cash
items
included in
income, net 37.7 19.4
International
pension
funding (100.5) -
Deferred
income
taxes 7.8 (190.4)
Other, net (31.8) (37.9)
Changes in
current
assets and
liabilities
used in
operations (18.5) 13.5
----- ----
Net cash
from
operating
activities 176.4 148.8
----- -----
Cash Flow from Investing
Activities
Capital
expenditures (69.5) (99.4)
Change
related to
Venezuelan
operations - (93.8)
Acquisitions,
net of cash
acquired - (12.1)
Proceeds
from sale
of assets - 16.6
Change in
restricted
cash - 13.9
--- ----
Net cash
used by
investing
activities (69.5) (174.8)
----- ------
Cash Flow from Financing
Activities
Cash
proceeds
from debt
with
original
maturities
greater
than 90
days 756.3 2,604.2
Cash
payments on
debt with
original
maturities
greater
than 90
days (631.0) (1,900.0)
Net decrease
in debt
with
original
maturities
of 90 days
or less (11.1) (252.6)
Deferred
finance
expense (0.6) (15.1)
Common
shares
purchased (196.6) (175.2)
Cash
dividends
paid - (93.2)
Transfer of
cash and
cash
equivalents
to New
Energizer - (499.7)
Proceeds
from
issuance of
common
shares, net - 4.4
Net cash
used by
financing
activities (83.0) (327.2)
----- ------
Effect of
exchange
rate
changes on
cash 2.9 (63.7)
Net increase
(decrease)
in cash and
cash
equivalents 26.8 (416.9)
Cash and
cash
equivalents,
beginning
of period 712.1 1,129.0
----- -------
Cash and
cash
equivalents,
end of
period $738.9 $712.1
====== ======
See Accompanying Notes.
EDGEWELL PERSONAL CARE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(unaudited, in millions, except per share
data)
Note 1 - Segments
The Company conducts its business in
the following four segments: Wet
Shave, Sun and Skin Care, Feminine
Care and All Other. Segment
performance is evaluated based on
segment profit, exclusive of general
corporate expenses, share-based
compensation costs, restructuring
charges, spin costs, the Venezuela
deconsolidation charge, the sale of
the Industrial business, cost of
early debt retirements, and
amortization and impairment of
intangible assets. Financial items,
such as interest income and expense,
are managed on a global basis at the
corporate level. The exclusion of
such charges from segment results
reflects management's view on how it
evaluates segment performance.
On July 1, 2015, the Company
completed the separation of its
Household Products business into a
separate publicly-traded company
(the "Spin" or the "Separation").
The historical financial results of
the Company's Household Products
business are presented as
discontinued operations on the
Condensed Consolidated Statements of
Earnings. The prior year Condensed
Consolidated Statements of Cash
Flows has not been adjusted to
reflect the effect of the
Separation. Historical results on a
continuing operations basis include
certain costs associated with
supporting the Household Products
business that were not reported in
discontinued operations.
Segment net sales and profitability
are presented below:
Quarter Ended September 30, Year Ended September 30,
2016 2015 2016 2015
---- ---- ---- ----
Net Sales
Wet Shave $391.5 $358.4 $1,425.8 $1,441.3
Sun and Skin Care 77.6 65.8 414.9 403.6
Feminine Care 107.7 96.7 388.9 398.2
All Other 33.8 39.2 132.4 178.1
---- ---- ----- -----
Total net sales $610.6 $560.1 $2,362.0 $2,421.2
Segment Profit
Wet Shave $100.2 $62.0 $290.2 $308.7
Sun and Skin Care 14.3 4.7 89.5 71.5
Feminine Care 3.6 4.7 39.1 48.7
All Other 7.1 5.5 28.4 24.6
--- --- ---- ----
Total segment profit 125.2 76.9 447.2 453.5
General corporate and other expenses (21.9) (15.4) (80.4) (122.0)
Impairment charge (6.5) (318.2) (6.5) (318.2)
Venezuela deconsolidation charge - - - (79.3)
Spin costs (1) - (30.3) (12.0) (142.0)
Spin restructuring charges - - - (28.3)
Restructuring and related costs (2) (9.4) (6.3) (38.8) (27.0)
Industrial sale charges - (10.8) (0.2) (32.7)
Amortization of intangibles (3.6) (3.6) (14.4) (15.1)
Cost of early debt retirements - - - (59.6)
Interest and other expense, net (20.0) (12.9) (75.0) (88.0)
----- ----- ----- -----
Total earnings (loss) from continuing $63.8 $(320.6) $219.9 $(458.7)
operations before income taxes
(1) The Company incurred incremental costs to
evaluate, plan and execute the
Separation. This includes pre-tax SG&A
of $30.1 for the fourth quarter of
fiscal 2015 and $11.8 and $137.8 for the
years ending September 30, 2016 and
2015, respectively, and pre-tax Cost of
products sold of $0.2 for the fourth
quarter of fiscal 2015 and $0.2 and $4.2
for the years ending September 30, 2016
and 2015, respectively.
(2) Includes pre-tax Cost of products sold
of $1.7 and $1.8 for the quarter and
year ended September 30, 2016 associated
with obsolescence charges related to the
exit of certain non-core product lines
as part of the restructuring. Also
includes $0.3 pre-tax SG&A costs
associated with certain information
technology and related activities during
fiscal 2015. These non-core inventory
obsolescence charges and information
technology costs are considered part of
the total project costs incurred for the
restructuring project.
Note 2 - GAAP to Non-GAAP Reconciliations
Basic earnings (loss) per share is based on the average number of common shares
outstanding during the period. Diluted earnings (loss) per share is based on the
weighted-average number of shares used for the basic earnings per share calculation,
adjusted for the dilutive effect of share options and restricted stock equivalent
("RSE") awards.
The following table provides a reconciliation of Net earnings (loss) from continuing
operations and Net earnings (loss) per diluted share ("EPS") to Adjusted net earnings
and Adjusted EPS, which are Non-GAAP measures.
Quarter Ended September 30,
Net Earnings Diluted EPS
------------ -----------
2016 2015 2016 2015
---- ---- ---- ----
Net Earnings (Loss) from Continuing
Operations and Diluted EPS -GAAP
(Unaudited) $52.2 $(193.7) $0.88 $(3.15)
Impairment charges 6.5 318.2 0.11 5.17
Spin costs (1) - 30.3 - 0.49
Restructuring and related charges, net (2) 9.4 6.3 0.16 0.10
Industrial sale charges - 10.8 - 0.17
Income taxes (5.6) (132.4) (0.09) (2.16)
Impact of basic/dilutive shares (3) - - - 0.02
--- --- --- ----
Adjusted Net Earnings and Adjusted Diluted
EPS - Non-GAAP $62.5 $39.5 $1.06 $0.64
===== ===== ===== =====
Weighted-average shares - Diluted 59.2 61.5
Includes SG&A of $30.1 and Cost of products sold of $0.2 for the fourth quarter of fiscal
2015.
(1)
Includes Cost of products sold of $1.7 for the quarter ended September 30, 2016
associated with obsolescence charges related to the exit of certain non-core product
lines as part of the restructuring.
(2)
(3) All EPS impacts are calculated using diluted weighted-average shares outstanding. For
the fourth quarter of fiscal 2015, this reflects the impact of 0.4 dilutive RSE awards,
which were excluded from the GAAP EPS calculation due to the reported net loss.
Year Ended September 30,
Net Earnings Diluted EPS
------------ -----------
2016 2015 2016 2015
---- ---- ---- ----
Net Earnings (Loss) from Continuing
Operations and Diluted EPS -GAAP
(Unaudited) $178.7 $(296.1) $2.99 $(4.78)
Impairment charges 6.5 318.2 0.11 5.13
Venezuela deconsolidation charge - 79.3 - 1.27
Spin costs (1) 12.0 142.0 0.20 2.29
Spin restructuring charges - 28.3 - 0.44
Restructuring and related charges, net (2) 38.8 27.0 0.65 0.43
Industrial sale charges 0.2 32.7 - 0.52
Cost of early debt retirements - 59.6 - 0.96
Income taxes (22.9) (215.8) (0.38) (3.49)
Impact of basic/dilutive shares (3) - - - 0.03
--- --- --- ----
Adjusted Net Earnings and Adjusted Diluted
EPS - Non-GAAP $213.3 $175.2 $3.57 $2.80
====== ====== ===== =====
Weighted-average shares - Diluted 59.7 62.0
(1) Includes SG&A of $11.8 and $137.8 for
fiscal 2016 and 2015, respectively, and
Cost of products sold of $0.2 and $4.2
for fiscal 2016 and 2015, respectively.
(2) Includes Cost of products sold of $1.8
for the year ended September 30, 2016
associated with obsolescence charges
related to the exit of certain non-
core product lines as part of the
restructuring. Also includes costs of
$0.3 for the year ended September 30,
2015 associated with certain
information technology and related
activities, which are included in SG&A.
These non-core inventory obsolescence
charges and information technology
costs are considered part of the total
project costs incurred for the
restructuring project.
(3) All EPS impacts are calculated using
diluted weighted-average shares
outstanding. For fiscal 2015, this
reflects the impact of 0.5 dilutive RSE
awards, which were excluded from the
GAAP EPS calculation due to the
reported net loss.
The following tables provide a GAAP to Non-GAAP reconciliation of certain line items from the Condensed Consolidated Statement of Earnings:
Quarter Ended September 30, 2016
Gross Profit SG&A Pre-tax Income Net Earnings Diluted EPS
------------ ---- -------------- ------------ -----------
GAAP - Reported $310.1 $107.8 $63.8 $52.2 $0.88
% of net sales 50.8% 17.7%
Impairment charges - - 6.5 4.1 0.07
Restructuring and
related charges, net
(1) 1.7 - 9.4 6.2 0.11
--- --- --- --- ----
Total Adjusted Non-
GAAP $311.8 $107.8 $79.7 $62.5 $1.06
====== ====== ===== ===== =====
% of net sales 51.1% 17.7%
Year Ended September 30, 2016
Gross Profit SG&A Pre-tax Income Net Earnings Diluted EPS
------------ ---- -------------- ------------ -----------
GAAP - Reported $1,159.9 $412.7 $219.9 $178.7 $2.99
% of net sales 49.1% 17.5%
Impairment charges - - 6.5 4.1 0.07
Spin costs 0.2 11.8 12.0 7.6 0.13
Restructuring and
related charges, net
(1) 1.8 - 38.8 26.1 0.43
Industrial sale
charges - - 0.2 0.1 -
Separation-related
tax adjustments - - - (3.3) (0.05)
Total Adjusted Non-
GAAP $1,161.9 $400.9 $277.4 $213.3 $3.57
======== ====== ====== ====== =====
% of net sales 49.2% 17.0%
Quarter Ended September 30, 2015
Gross Profit SG&A Pre-tax Income Net Earnings (2) Diluted EPS
------------ ---- -------------- ---------------- -----------
GAAP - Reported $269.3 $123.5 $(320.6) $(193.7) $(3.15)
% of net sales 48.1% 22.0%
Impairment charges - - 318.2 201.1 3.25
Spin costs 0.2 30.1 30.3 15.2 0.25
Restructuring and
related charges, net
(1) - - 6.3 1.7 0.03
Industrial sale
charges - - 10.8 6.7 0.11
Taxes on certain spin
costs - - - 1.4 0.02
Adjustments to prior
years' tax accruals - - - 7.1 0.11
Impact of dilutive
shares - - - - 0.02
Total Adjusted Non-
GAAP $269.5 $93.4 $45.0 $39.5 $0.64
====== ===== ===== ===== =====
% of net sales 48.1% 16.7%
Year Ended September 30, 2015
Gross Profit SG&A Pre-tax Income Net Earnings (2) Diluted EPS (3)
------------ ---- -------------- ---------------- ---------------
GAAP - Reported $1,183.8 $571.6 $(458.7) $(296.1) $(4.78)
% of net sales 48.9% 23.6%
Impairment charges - - 318.2 201.1 3.22
Venezuela
deconsolidation
charge - - 79.3 79.3 1.27
Spin costs 4.2 137.8 142.0 93.5 1.50
Spin restructuring
charges - - 28.3 20.1 0.32
Restructuring and
related charges, net
(1) - 0.3 27.0 16.2 0.26
Industrial sale
charges - - 32.7 20.5 0.33
Cost of early debt
retirements - - 59.6 37.4 0.60
Taxes on certain spin
costs - - - 1.4 0.02
Adjustments to prior
years' tax accruals - - - 1.8 0.03
Impact of basic/
dilutive shares (3) - - - - 0.03
Total Adjusted Non-
GAAP $1,188.0 $433.5 $228.4 $175.2 $2.80
======== ====== ====== ====== =====
% of net sales 49.1% 17.9%
(1) Includes Cost of products sold of $1.7
and $1.8 for quarter and year ending
September 30, 2016 associated with
obsolescence charges related to the
exit of certain non-core product lines
as part of the restructuring. Also
includes costs of $0.3 for fiscal 2015
associated with certain information
technology and related activities,
which are included in SG&A. These non-
core inventory obsolescence charges and
information technology costs are
considered part of the total project
costs incurred for the restructuring
project.
(2) For the fourth quarter and year ending
September 30, 2015, Net Earnings is
defined as Earnings (loss) from
continuing operations.
(3) All EPS impacts are calculated using
diluted weighted-average shares
outstanding. For the fourth quarter
and year ended September 30, 2015, this
reflects the impact of 0.4 and 0.5
dilutive RSE awards, respectively,
which were excluded from the GAAP EPS
calculation due to the reported net
loss.
The following table provides a reconciliation of Earnings from continuing operations before income taxes to adjusted operating income, which is a Non-GAAP measure, for each quarter of fiscal 2016:
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Fiscal Year
2016
----
Earnings from
continuing
operations before
income taxes $30.7 $91.3 $34.1 $63.8 $219.9
Impairment charges - - - 6.5 6.5
Spin costs (1) 7.5 1.7 2.8 - 12.0
Restructuring and
related charges,
net (2) 18.5 5.1 5.8 9.4 38.8
Industrial sale
charges - 0.2 - - 0.2
Interest expense
associated with
debt 17.7 17.8 18.3 18.0 71.8
Other expense
(income), net (2.4) (4.6) 8.2 2.0 3.2
Adjusted operating
income $72.0 $111.5 $69.2 $99.7 $352.4
===== ====== ===== ===== ======
% of net sales 14.5% 18.2% 10.7% 16.3% 14.9%
(1) Includes SG&A of $7.3, $1.7, $2.8
and $11.8 for the first, second
and third quarters of fiscal 2016
and fiscal year 2016,
respectively, and Cost of products
sold of $0.2 for the first quarter
of fiscal 2016 and fiscal year
2016.
(2) Includes Cost of products sold of
$0.1, $1.7 and $1.8 for the second
and fourth quarters of fiscal 2016
and fiscal year 2016,
respectively, associated with
obsolescence charges related to
the exit of certain non-core
product lines as part of the
restructuring. These non-core
inventory obsolescence charges are
considered part of the total
project costs incurred for the
restructuring project.
The following table provides a reconciliation of the effective tax rate to the adjusted effective tax rate, which is a Non-GAAP measure:
Year Ended September 30, 2016 Year Ended September 30, 2015
Reported Adjustments (1) Adjusted Reported Adjustments (1) Adjusted
(Non-GAAP) (Non-GAAP)
--------- ---------
Earnings
(loss) from
continuing
operations
before
income
taxes $219.9 $57.5 $277.4 $(458.7) $687.1 $228.4
Income tax
provision
(benefit) 41.2 22.9 64.1 (162.6) 215.8 53.2
Earnings
(loss) from
continuing
operations $178.7 $34.6 $213.3 $(296.1) $471.3 $175.2
====== ===== ====== ======= ====== ======
Effective
tax rate 18.7% 35.4%
Adjusted
effective
tax rate 23.1% 23.2%
(1) Includes adjustments for the
Venezuela deconsolidation charge,
spin costs, restructuring charges,
the sale of the Industrial business,
cost of early debt retirements,
impairment charges and the
associated tax impact of these
charges, as well as adjustments to
prior years' tax accruals. See
reconciliation of Net earnings to
Adjusted net earnings.
Note 3 - Net Sales and Profit by Segment
The following tables present changes in net sales and segment profit for the fourth quarter and fiscal 2016, as compared to the corresponding period in fiscal 2015, and also provide a
reconciliation of organic net sales and organic segment profit to reported amounts.
Net Sales (In millions - Unaudited)
Quarter Ended September 30, 2016
Wet Sun and Skin Feminine All Total
Shave Care Care Other
Net Sales - FY '15 $358.4 $65.8 $96.7 $39.2 $560.1
Organic 26.4 7.4% 12.0 18.2% 11.0 11.4% 2.1 5.3% 51.5 9.2%
Impact of Industrial sale - - % - - % - - % (7.6) (19.4)% (7.6) (1.4)%
Impact of currency 6.7 1.8% (0.2) (0.3)% - - % 0.1 0.3% 6.6 1.2%
--- --- ---- ----- --- --- --- --- --- --- ---
Net Sales - FY '16 $391.5 9.2% $77.6 17.9% $107.7 11.4% $33.8 (13.8)% $610.6 9.0%
====== === ===== ==== ====== ==== ===== ====== ====== ===
Net Sales (In millions - Unaudited)
Year Ended September 30, 2016
Wet Sun and Skin Feminine All Total
Shave Care Care Other
Net Sales - FY '15 $1,441.3 $403.6 $398.2 $178.1 $2,421.2
Organic 25.5 1.8% 18.6 4.6% (7.1) (1.8)% (2.1) (1.2)% 34.9 1.4%
Impact of Venezuela (24.0) (1.7)% - - % - - % - % (24.0) (1.0)%
Impact of Industrial sale - - % - - % - - % (41.9) (23.5)% (41.9) (1.7)%
Impact of currency (17.0) (1.2)% (7.3) (1.8)% (2.2) (0.5)% (1.7) (1.0)% (28.2) (1.1)%
----- ----- ---- ----- ---- ----- ---- ----- ----- -----
Net Sales - FY '16 $1,425.8 (1.1)% $414.9 2.8% $388.9 (2.3)% $132.4 (25.7)% $2,362.0 (2.4)%
======== ===== ====== === ====== ===== ====== ====== ======== =====
Segment Profit (In millions - Unaudited)
Quarter Ended September 30, 2016
Wet Sun and Skin Feminine All Total
Shave Care Care Other
Segment Profit - FY '15 $62.0 $4.7 $4.7 $5.5 $76.9
Organic 30.9 49.8% 9.7 206.4% (1.1) (23.4)% 2.2 40.0% 41.7 54.2%
Impact of Industrial sale - - % - - % - - % (0.6) (10.9)% (0.6) (0.8)%
Impact of currency 7.3 11.8% (0.1) (2.1)% - - % - - % 7.2 9.4%
--- ---- ---- ----- --- --- --- --- --- --- --- ---
Segment Profit - FY'16 $100.2 61.6% $14.3 204.3% $3.6 (23.4)% $7.1 29.1% $125.2 62.8%
====== ==== ===== ===== ==== ====== ==== ==== ====== ====
Segment Profit (In millions - Unaudited)
Year Ended September 30, 2016
Wet Sun and Skin Feminine All Total
Shave Care Care Other
Segment Profit - FY '15 $308.7 $71.5 $48.7 $24.6 $453.5
Organic (7.9) (2.6)% 20.9 29.2% (7.9) (16.2)% 7.2 29.3% 12.3 2.7%
Impact of Venezuela (9.4) (3.0)% - - % - - % - - % (9.4) (2.1)%
Impact of Industrial sale - - % - - % - - % (2.2) (8.9)% (2.2) (0.5)%
Impact of currency (1.2) (0.4)% (2.9) (4.0)% (1.7) (3.5)% (1.2) (5.0)% (7.0) (1.5)%
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
Segment Profit - FY'16 $290.2 (6.0)% $89.5 25.2% $39.1 (19.7)% $28.4 15.4% $447.2 (1.4)%
====== ===== ===== ==== ===== ====== ===== ==== ====== =====
Note 4 - EBITDA
The Company reports financial results on a GAAP and adjusted basis. The table below is
used to reconcile Net earnings (loss) to EBITDA, Adjusted EBITDA and Normalized
EBITDA, which are Non-GAAP measures, to improve comparability of results between
periods.
Quarter Ended September 30, Year Ended September 30,
2016 2015 2016 2015
---- ---- ---- ----
Net earnings (loss) $52.2 $(219.5) $178.7 $(275.3)
Loss (earnings) from discontinued
operations, net of tax - 25.8 - (20.8)
Income tax provision (benefit) 11.6 (126.9) 41.2 (162.6)
Interest expense, net (1) 16.3 16.4 70.1 159.4
Depreciation and amortization 25.1 22.3 96.5 91.1
EBITDA (2) $105.2 $(281.9) $386.5 $(208.2)
Impairment charges 6.5 318.2 6.5 318.2
Venezuela deconsolidation charge - - - 79.3
Spin restructuring charges - - - 28.3
Spin costs - 30.3 12.0 142.0
Restructuring and related costs (3) 7.7 5.6 34.9 22.4
Industrial sale charges - 10.8 0.2 32.7
Adjusted EBITDA (2) $119.4 $83.0 $440.1 $414.7
SG&A (4) - - - 47.5
Normalized EBITDA $119.4 $83.0 $440.1 $462.2
====== ===== ====== ======
(1) Interest expense, net includes
Interest expense associated
with debt as well as components
of interest reported in Other
expense (income), net on the
Condensed Consolidated
Statement of Earnings.
Interest expense, net for the
fourth quarter and twelve
months ending September 30,
2016 includes $1.4 and $0.8
respectively of net interest
income recorded in relation to
settlements with tax
authorities. Interest expense,
net for the twelve months
ending September 30, 2015
includes $59.6 of cost of early
debt retirements.
(2) Historical Adjusted EBITDA
results on a continuing
operations basis include costs
associated with supporting the
Household Product business that
are not reported in
discontinued operations which
affect corporate SG&A. As
such, both EBITDA and Adjusted
EBITDA this quarter and this
fiscal year are not comparable
to the prior year, and are not
comparable year-over-year for
the first three quarters of
fiscal 2016.
(3) Excludes $1.7 and $0.7 of
accelerated depreciation for
the fourth fiscal quarters of
2016 and 2015, respectively,
and $3.9 and $4.6 of
accelerated depreciation for
the fiscal years 2016 and 2015,
respectively, which are
included within Depreciation
and amortization.
(4) Corporate SG&A has been adjusted
to reflect an estimated full
year run-rate of $74 in fiscal
2015.
Note 5 - Outlook
The following table provides a
reconciliation of Adjusted EPS,
which is a Non-GAAP measure,
included within the Company's
outlook for projected fiscal 2017
results:
Adjusted EPS Outlook
Fiscal 2017 GAAP EPS $3.60 - $3.80
Restructuring and related costs,
net approx. $0.30
Income taxes approx. $(0.10)
Fiscal 2017 Adjusted EPS Outlook
(Non-GAAP) $3.80 - $4.00
Note 6 - Adjusted Working Capital
Adjusted Working Capital metrics for the fourth and third quarters of fiscal 2016 and the fourth quarter of fiscal
2015 are presented below.
Q4 2016 Days (1) Q3 2016 Days (1) Q4 2015 Days (1)
------- ------- ------- ------- ------- -------
Receivables, as reported $275.2 $280.0 $423.0
Less: Household Products
receivables (2) - (8.5) (137.7)
Less: Trade allowance in accrued
liabilities (3) (28.1) (31.9) (38.0)
Receivables, adjusted 247.1 38.2 239.6 37.8 247.3 37.2
Inventories, as reported 345.3 351.2 565.0
Less: Household Products
inventories (2) - - (202.7)
Inventories, adjusted 345.3 104.9 351.2 107.5 362.3 107.1
Accounts payable, as reported 211.4 221.6 325.4
Less: Household Products accounts
payable (2) - - (139.4)
Accounts payable, adjusted 211.4 64.2 221.6 67.8 186.0 54.8
Average adjusted working capital
(4) $381.0 $369.2 $423.6
====== ====== ======
% of net sales (5) 16.1% 16.0% 17.5%
(1) Days sales outstanding is
calculated using net sales for
the trailing four-quarter
period. Days in inventory and
days payable outstanding are
calculated using cost of
products sold for the trailing
four-quarter period. Both net
sales and cost of products sold
for the trailing four-quarter
period exclude amounts related
to the Household Products
business.
(2) Amounts are calculated using an
average of the four-quarter
end balances for each working
capital component. As such,
the average for each period
includes amounts related to the
Household Products business,
which are being excluded from
the calculation.
(3) Trade allowances are recorded as
a reduction of net sales per
GAAP and reported in accrued
expenses on the Condensed
Consolidated Balance Sheets.
(4) Adjusted working capital is
defined as receivables (less
trade allowance in accrued
liabilities), plus inventories,
less accounts payable. Average
adjusted working capital is
calculated using an average of
the four-quarter end balances
for each working capital
component as of September 30,
2016, June 30, 2016 and
September 30, 2015,
respectively.
(5) Average adjusted working capital
divided by trailing four-
quarter net sales.
Note 7 - Venezuela Deconsolidation
On March 31, 2015, the Company deconsolidated
its Venezuelan subsidiaries. Included in
consolidated results of operations, and
reflected below, are the historical results of
the Company's Venezuela operations through the
second quarter of fiscal 2015 (reflected at
the official exchange rate of 6.30 bolivars
per U.S. dollar).
Q1 Q2 Q3 Q4 FY
--- --- --- --- ---
Wet Shave - Net Sales Fiscal 2015 $9.6 $14.4 - - $24.0
Q1 Q2 Q3 Q4 FY
--- --- --- --- ---
Wet Shave -Segment
Profit Fiscal 2015 $3.3 $6.0 - - $9.3
Note 8 - Sale of Industrial Business
The sale of the Industrial business was completed in
September 2015. The historical results of the
Industrial business are included in consolidated
results of operations through September 30, 2015.
Reflected below are the net sales for the
Industrial business. The impact on All Other
segment profit is not material.
Q1 Q2 Q3 Q4 FY
--- --- --- --- ---
Industrial - Net Sales Fiscal 2015 $10.7 $11.2 $12.4 $7.6 $41.9
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SOURCE Edgewell Personal Care Company
