EDGEWELL PERSONAL CARE CO ST. LOUIS, Jan. 28, 2015 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced results for the first fiscal quarter, which ended December 31, 2014. The Company reported adjusted net earnings per diluted share of $2.07, down 1.4% compared to the prior year first fiscal quarter and net earnings per diluted share of $1.69, down 1.2% as compared to the prior year first fiscal quarter.
First Fiscal Quarter Highlights (Unaudited)
Following is a summary of key first fiscal quarter 2015 results. All comparisons are with the first fiscal quarter 2014, unless otherwise stated.
-- Net sales of $1,038.4 million, decreased 6.8% (down 4.7% on an organic
basis) (b)
-- Gross Margin increased 120 basis points
-- A&P spending increased $4.1 million, or 90 basis points as a percent of
net sales
-- SG&A as a percent of net sales (exclusive of spin costs, restructuring
related charges and integration expenses) decreased 60 basis points.
SG&A as a percent of net sales (on a reported basis) increased 270 basis
points
-- Adjusted net earnings per diluted share of $2.07, down 1.4% (a)
-- Net earnings per diluted share of $1.69, down 1.2%
(a) See Net Earnings/Diluted EPS tables below
(b) See Net Sales -- Total Company table below
"First quarter adjusted net earnings per diluted share were in-line with our expectations despite significant currency headwinds," said Ward M. Klein, Chief Executive Officer. "We expect net sales trends to improve over the next six months as category performance has improved in Personal Care and Household Products gained share in the U.S. and globally. Additionally, both segments will launch new, innovative products in our second fiscal quarter."
Mr. Klein continued, "Through the next six months, the organization is focused on delivering our fiscal 2015 financial plan and completing the important work of separating the businesses. Our colleagues have remained committed and have made significant progress on preparing the company for separation, and we are in the process of finalizing several key decisions that will position both businesses for future success as stand-alone companies."
The following tables provide a reconciliation of net earnings and net earnings per diluted share to adjusted net earnings and adjusted net earnings per diluted share, which are non-GAAP measures.
Quarter Ended December 31,
Net Earnings Diluted EPS
------------ -----------
2014 2013 2014 2013
---- ---- ---- ----
Net Earnings/Diluted EPS -GAAP
(Unaudited) $105.1 $107.9 $1.69 $1.71
Impacts, net of tax: Expense/
(Income)
2013 restructuring and related
costs, net (1.1) 17.5 (0.02) 0.27
Spin restructuring 1.8 - 0.03 -
Spin costs 25.8 - 0.41 -
Feminine care acquisition/
integration costs - 3.1 - 0.06
Acquisition inventory valuation - 4.0 - 0.06
Other realignment/integration 0.3 0.1 - -
Adjustment to prior years' tax
accruals (2.6) - (0.04) -
---- --- ----- ---
Net Earnings/Diluted EPS -
adjusted (Non-GAAP) $129.3 $132.6 $2.07 $2.10
====== ====== ===== =====
Weighted average shares - Diluted 62.4 63.1
Energizer reported first fiscal quarter net earnings of $105.1 million, or $1.69 per diluted share. This compares to net earnings of $107.9 million, or $1.71 per diluted share in the prior year quarter. First fiscal quarter results reflect the impacts of significant weakening in foreign currency rates versus the U.S. dollar, organic top-line declines and increased A&P investments that were partially offset by continued margin rate improvement, accretion from the feminine care brands acquisition and a favorable effective tax rate versus the prior fiscal year. In addition, the following one-time or unusual items are included within the first fiscal quarter reported results:
-- $11.0 million of pre-tax restructuring related income driven by the gain
on sale of our Asia battery packaging facility(included in the 2013
restructuring line on the Statement of Earnings (Condensed);
-- $10.7 million of pre-tax restructuring related charges associated with
our 2013 restructuring project, including certain information technology
enablement costs associated with the restructuring activities ($10.5
million included in the 2013 restructuring line and $0.2 million
included in SG&A on the Statement of Earnings (Condensed));
-- $43.6 million of pre-tax spin costs and spin restructuring charges
($40.8 million included in SG&A and $2.8 million reported on the Spin
restructuring line on the Statement of Earnings (Condensed)); and
-- $0.4 million of pre-tax acquisition/integration related expenses ($0.3
million included in SG&A and $0.1 million included in Cost of products
sold on the Statement of Earnings (Condensed)).
Adjusted net earnings per diluted share were $2.07 for the first fiscal quarter as compared to $2.10 in the prior year quarter.
Net Sales - Total Company (In millions - Unaudited)
Quarter Ended December 31, 2014
Q1 %Chg
--- ----
Net Sales - FY'14 $1,113.9
Organic (52.3) (4.7)%
Impact of currency (44.6) (4.0)%
Incremental impact of
acquisition 21.4 1.9%
---- ---
Net Sales -FY'15 $1,038.4 (6.8)%
======== =====
Net sales for the first fiscal quarter decreased 6.8% as compared to the prior year including a decrease of 4.0% due to an unfavorable movement in foreign currency rates and an increase of 1.9% due to the incremental impact of sales from the feminine care acquisition. Exclusive of the impact of unfavorable currency movements and the incremental impact of acquisitions, net sales decreased 4.7% versus the prior year fiscal quarter due to declines across both operating segments.
Gross margin for the first fiscal quarter increased 120 basis points to 47.1%. The increase in gross margin was primarily due to savings from the 2013 restructuring project and lower commodity costs.
Advertising and sales promotion expense was $85.1 million in the first fiscal quarter, or 8.2% of net sales. This represents an increase of $4.1 million, or 90 basis points as a percent of net sales, versus the prior year quarter. Spending was increased in the Personal Care segment in support of advertising and promotional programs and the feminine care brands acquisition.
Selling, general, and administrative expense was $218.3 million in the first fiscal quarter, or 21.0% of net sales, compared to $203.5 million, or 18.3% of net sales, in the prior year quarter. Included within the current quarter results were pre-tax costs of $40.8 million related to the spin-off transaction, $0.2 million of information technology enablement costs (recorded within SG&A, but are considered part of the overall 2013 restructuring project) and $0.3 million of acquisition/integration costs. Excluding the year-over-year impact of these items, SG&A as a percent of net sales decreased 60 basis points compared to prior year levels.
Interest expense was $28.7 million for the first fiscal quarter as compared to $31.2 million in the prior fiscal year quarter as a result of a lower average interest rate on outstanding debt.
Other financing income was $3.4 million for the first fiscal quarter primarily reflecting the net impact of foreign currency hedging contract gains partially offset by revaluation losses on nonfunctional currency balance sheet exposures, as compared to $2.0 million income in the prior fiscal year quarter.
The effective tax rate in the first fiscal quarter was 22.8% as compared to 28.9% in the prior year quarter. This quarter's rate was favorably impacted by restructuring and spin-off costs incurred primarily in tax jurisdictions with higher statutory tax rates, which positively impacts the effective tax rate.
Excluding the tax impact of the GAAP to non-GAAP reconciling items detailed in the table above and certain prior year tax adjustments, the first fiscal quarter effective tax rate was 28.0% as compared to 29.5% in the prior fiscal year quarter.
Average (trailing 4 quarter) working capital as a percent of sales was 15.2% versus 15.0% as of September 30, 2014. The Company continues to make improvements within Days Payable Outstanding. However, Days in Inventory increased primarily due to post-restructuring Household Products manufacturing footprint changes, temporary inventory builds as a result of on-going Personal Care footprint changes and increased inventory levels ahead of our second fiscal quarter new product launch.
Capital spending in the quarter was approximately $15 million, a decrease of $5 million versus the prior year quarter. Depreciation expense, excluding accelerated depreciation on assets impacted by the 2013 restructuring project, was approximately $29 million in the first fiscal quarter and equal to the prior year quarter. The charges for accelerated depreciation are included in the 2013 restructuring line on the Statement of Earnings (Condensed).
Dividend payments in the quarter were approximately $31 million, or $0.50 per share, equal to the prior fiscal year quarter.
Key Segment Results (Unaudited)
Following is a summary of key first fiscal quarter results by reportable segment. All comparisons are with the first quarter of fiscal 2014 unless otherwise stated.
Personal Care
-- Net sales down 2.4%
-- Organic net sales down 2.5%
-- Segment profit of $116.2 million, down 10.8%. Excluding the impacts of
currency movements and the incremental benefit from the feminine care
brands acquisition, segment profit declined 6.7%
-- Incremental net sales and segment profit from the October 2013 feminine
care brands acquisition totaled $21.4 million and $4.5 million,
respectively, excluding acquisition/integration related costs
Net Sales - Personal Care (In millions - Unaudited)
Quarter Ended December 31, 2014
Q1 %Chg
--- ----
Net Sales - FY'14 $550.2
Organic (13.6) (2.5)%
Impact of
currency (20.9) (3.8)%
Incremental
impact of
acquisition 21.4 3.9%
---- ---
Net Sales -FY'15 $537.1 (2.4)%
====== =====
Segment Profit - Personal Care (In millions - Unaudited)
Quarter Ended December 31, 2014
Q1 %Chg
--- ----
Segment Profit - FY'14 $130.3
Operations (8.7) (6.7)%
Impact of currency (9.9) (7.6)%
Incremental impact of
acquisition 4.5 3.5%
--- ---
Segment Profit - FY'15 $116.2 (10.8)%
====== ======
Organic net sales in the first fiscal quarter decreased 2.5% due to lower volumes across Feminine Care, Wet Shave and Infant Care products, partially offset by improved price/mix in Wet Shave. Despite improved performance in many of our U.S. personal care categories, we experienced share declines driven by increased levels of competition.
Segment profit in the first fiscal quarter decreased approximately $14 million, inclusive of the negative impact of currency movements and the incremental impact of the feminine care brands acquisition. Excluding the impact of the unfavorable movement in currencies and the incremental impact of the feminine care brands acquisition, segment profit decreased $8.7 million driven by increased A&P spending.
Household Products
-- Net sales down 11.1%
-- Organic net sales down 6.9%
-- Segment profit of $121.2 million, down 9.1% (or up 2.6% excluding the
impact of currency movements)
Net Sales - Household Products (In millions - Unaudited)
Quarter Ended December 31, 2014
Q1 %Chg
--- ----
Net Sales -
FY'14 $563.7
Organic (38.7) (6.9)%
Impact of
currency (23.7) (4.2)%
Net Sales -
FY'15 $501.3 (11.1)%
====== ======
Segment Profit - Household Products (In millions - Unaudited)
Quarter Ended December 31, 2014
Q1 %Chg
--- ----
Segment Profit - FY'14 $133.4
Operations 3.4 2.6%
Impact of currency (15.6) (11.7)%
Segment Profit -FY'15 $121.2 (9.1)%
====== =====
Organic net sales decreased 6.9% in the first fiscal quarter versus the prior year due to the timing of holiday shipments, increased promotional spending and retail inventory reductions, primarily in the U.S.
Segment profit in the first fiscal quarter decreased $12.2 million due primarily to the impact of unfavorable movements in currencies. Excluding the impact of the unfavorable movement in currencies, segment profit increased $3.4 million driven by improved product costs resulting from the 2013 restructuring project and lower commodity input prices.
2013 Restructuring Project
Restructuring savings in the first fiscal 2015 quarter increased approximately $26 million versus the prior year quarter. The primary impacts of savings were reflected in improved gross margins across both segments and lower overhead expenses. Project-to-date savings total approximately $282 million.
The Company expects savings to exceed $300 million through June 30, 2015. Estimated total project savings are expected to exceed $330 million through fiscal 2016.
Restructuring (pre-tax) related charges were a net credit of $0.3 million for the first fiscal 2015 quarter reflecting the $11.0 million gain on sale of our Asia battery packaging facility less $10.7 million of pre-tax restructuring related charges, including certain information technology enablement costs associated with the restructuring activities.
Total project-to-date costs are approximately $260 million. These amounts are inclusive of certain information technology enablement costs (included in SG&A) and inventory obsolescence charges (included in Cost of products sold), both of which are considered part of the overall 2013 restructuring project.
The Company expects to incur over $300 million of restructuring (pre-tax) related charges through June 30, 2015. Estimated total project restructuring costs are projected to be $350 million through fiscal 2016, consistent with our prior estimate.
Spin-Off and Spin Restructuring Related Charges
As announced on April 30, 2014, the Company is pursuing a plan to separate the Company's Household Products and Personal Care segments into two independent, publicly traded companies. The separation is planned as a tax-free spin-off to the Company's shareholders and is expected to be completed by July 1, 2015. The proposed separation is subject to further due diligence as appropriate and customary conditions, including receipt of regulatory approvals, an opinion of counsel regarding the tax-free nature of the separation, the effectiveness of a Form 10 filing with the Securities and Exchange Commission, and final approval by the Company's Board of Directors.
The Company is incurring incremental costs to evaluate, plan and execute the transaction. In addition, the Company plans to execute certain restructuring initiatives in order to prepare both businesses to operate as stand-alone entities. The spin restructuring initiatives include efforts to:
-- Adapt the global go-to-market footprint to adjust to the future
strategies and scale of each stand-alone business;
-- Centralize certain back-office functions to increase efficiencies;
-- Outsource certain non-core transactional activities; and
-- Reduce headcount to optimize the cost structures of each stand-alone
business
The spin restructuring initiative savings are targeted to offset incremental costs expected to be incurred to develop the stand-alone organizations.
The Company estimates total spin-off and spin restructuring related costs through June 30, 2015 will be approximately $350 million to $425 million.
-- $200 million to $225 million related to the transaction evaluation,
planning and execution
-- $150 million to $200 million related to spin restructuring initiatives.
These estimates are based on currently known facts and may change materially as future operating decisions are made. These estimates do not include costs related to potential debt breakage, potential tax related charges or potential capital expenditures which may be incurred related to the proposed transaction. These additional costs could be significant.
For the quarter ended December 31, 2014 and on a project-to-date basis, the Company incurred $40.8 million and $85.5 million, respectively, in pre-tax spin-off costs that were recorded in SG&A on the Statement of Earnings (Condensed). In addition, $2.8 million was incurred in the current quarter and on a project-to-date basis for spin restructuring related charges that were recorded on a separate line item on the Statement of Earnings (Condensed).
Updated Financial Outlook Assumptions Through June 30, 2015
The Company has updated the below assumptions related to its financial outlook for the first nine months of fiscal 2015. All comparisons are with the nine months ended June 30, 2014, unless otherwise stated.
-- Total Company organic net sales are expected to be flat, consistent with
prior estimates
-- Personal Care organic net sales are expected to increase in the
low-single digits
-- Household Products organic net sales are expected to be down
low-single digits
-- Gross margin rates are estimated to increase slightly due to increased
restructuring savings
-- A&P as a percent of net sales is expected to increase over 100 basis
points, consistent with prior estimates
-- 2013 restructuring project savings in excess of $300 million are
expected to be realized by June 30, 2015. Estimated total project
savings are expected to exceed $330 million through fiscal 2016.
-- Unfavorable movement in foreign currencies is expected to result in a
pre-tax profit impact of approximately $60 to $65 million, an increase
of $25 million versus our prior estimate.
-- The Company's fiscal 2015 outlook for its Venezuela operations are
reflected at the official exchange rate equal to 6.30 per U.S. dollar.
A devaluation or change in accounting position could have a material
effect on the results of our operations. We have noted the recent
public announcements by certain SEC registrants relative to changes made
in the accounting for their Venezuela operations, including
de-consolidation and translating their results at the SICAD II exchange
rate. We have been and continue to evaluate the appropriate accounting
as it relates to our Venezuelan operations, including these options
recently announced. Had we concluded that de-consolidation of our
Venezuelan operations was appropriate at December 31, 2014, such a
conclusion would have resulted in a pre-tax charge in excess of $100
million. If the Company were to revalue at either the SICAD I or SICAD
II rates (as of December 31, 2014), the estimated pre-tax devaluation
charge of its net monetary assets as compared to the official exchange
rate of 6.30 bolivars to one U.S. dollar would equal approximately $39
million and $71 million, respectively. Although we do not believe a
change in the accounting for our Venezuelan operations (including the
use of the official exchange rate) is necessary at December 31, 2014, it
is reasonably possible we could conclude a change is necessary in the
near-term and the impact would be material as discussed above.
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 first quarter earnings and the updated financial outlook through June 30, 2015. All interested parties may access a live webcast of this conference call at www.energizerholdings.com, under "Investors", "Investor Information", and "Webcasts and Presentations" tabs or by using the following link:
http://edge.media-server.com/m/p/64cpw42q/lan/en
For those unable to participate during the live webcast, a replay will be available on www.energizerholdings.com, under "Investors", "Investor Information", "Webcasts and Presentations", and "Audio Archives" tabs.
Non-GAAP Financial Measures. While the Company reports financial results in accordance with accounting principles generally accepted in the U.S. ("GAAP"), this discussion includes non-GAAP measures. These non-GAAP measures, such as adjusted net earnings, adjusted net earnings per diluted share, operating results, organic sales, SG&A as a percent of net sales (exclusive of spin costs, restructuring related charges and integration expenses) and other comparison changes, exclude the impact of currency devaluations and other currency movements, the costs associated with restructuring and other initiatives, costs associated with the planned spin-off transaction, costs associated with acquisitions and integration as well as acquisition inventory valuation, adjustments to prior year tax accruals, pension curtailment and certain other items as outlined in this announcement, are not in accordance with, nor are they a substitute for, GAAP measures. Additionally, we are unable to provide a reconciliation of forward-looking non-GAAP measures due to uncertainty regarding future restructuring related charges, spin-off related charges, the impact of fluctuations in foreign currency movements and the cost of raw materials. The Company believes these non-GAAP measures provide a meaningful comparison to the corresponding historical or future period and assist investors in performing analysis consistent with financial models developed by research analysts. Investors should consider non-GAAP measures in addition to, not as a substitute for, or superior to, the comparable GAAP measures.
Forward-Looking Statements. This document contains both historical and forward-looking statements. Forward-looking statements are not based on historical facts but instead reflect our expectations, estimates or projections concerning future results or events, including, without limitation, statements regarding the planned spin-off of the Household Products business, the timing of any such spin-off, the future earnings and performance of Energizer Holdings or any of its businesses, including the Household Products and Personal Care businesses on a standalone basis if the spin-off is completed. 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 our actual results to differ materially from those indicated by those statements. We cannot assure you that any of our 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 we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances. Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation:
-- Whether the spin-off of the Household Products business is completed, as
expected or at all, and the timing of any such spin-off;
-- Whether the conditions to the spin-off can be satisfied;
-- Whether the operational, marketing and strategic benefits of the
spin-off can be achieved;
-- Whether the costs and expenses of the spin-off can be controlled within
expectations;
-- General market and economic conditions;
-- Market trends in the categories in which we operate;
-- The success of new products and the ability to continually develop and
market new products;
-- Our ability to attract, retain and improve distribution with key
customers;
-- Our ability to continue planned advertising and other promotional
spending;
-- Our ability to timely execute strategic initiatives, including
restructurings, in a manner that will positively impact our financial
condition and results of operations and does not disrupt our business
operations;
-- The impact of strategic initiatives, including the planned spin-off of
the Household Products business as well as restructurings, on our
relationships with employees, customers and vendors;
-- Our ability to maintain and improve market share in the categories in
which we operate despite heightened competitive pressure;
-- Our ability to improve operations and realize cost savings;
-- The impact of foreign currency exchange rates and currency controls,
particularly in Venezuela and Argentina, as well as offsetting hedges;
-- The impact of raw material and other commodity costs;
-- The impact of change in accounting position as it relates to the
selection of the applicable Venezuela translation rate;
-- Goodwill impairment charges resulting from declines in profitability or
estimated cash flows related to intangible assets or market valuations
for similar assets;
-- Costs and reputational damage associated with cyber-attacks or
information security breaches;
-- Our ability to acquire and integrate businesses, and to realize the
projected results of acquisitions;
-- The impact of advertising and product liability claims and other
litigation;
-- Compliance with debt covenants and maintenance of credit ratings as well
as the impact of interest and principal repayment of our existing and
any future debt; or
-- The impact of legislative or regulatory determinations or changes by
federal, state and local, and foreign authorities, including taxing
authorities.
In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of any such forward-looking statements. The list of factors above is illustrative, but by no means 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 Energizer's publicly filed documents, including its annual report on Form 10-K for the year ended September 30, 2014.
ENERGIZER HOLDINGS, INC.
STATEMENT OF EARNINGS
(Condensed)
(In millions, except per share data - Unaudited)
Quarter Ended December 31,
2014 2013
---- ----
Net sales $1,038.4 $1,113.9
Cost of products sold 549.2 602.1
----- -----
Gross profit 489.2 511.8
Selling, general and
administrative expense 218.3 203.5
Advertising and sales
promotion expense 85.1 81.0
Research and
development expense 22.0 21.9
Spin restructuring 2.8 -
2013 restructuring (0.5) 24.4
Interest expense 28.7 31.2
Other financing items,
net (3.4) (2.0)
---- ----
Earnings before income
taxes 136.2 151.8
Income tax provision 31.1 43.9
---- ----
Net earnings $105.1 $107.9
====== ======
Earnings per share
Basic $1.70 $1.73
Diluted $1.69 $1.71
Weighted average shares
of common stock -
Basic 62.0 62.5
---- ----
Weighted average shares
of common stock -
Diluted 62.4 63.1
---- ----
See Accompanying Notes
Energizer Holdings, Inc.
Notes to Condensed Financial Statements
December 31, 2014
(In millions, except per share data - Unaudited)
1. Operating results for any quarter are not
necessarily indicative of the results for any
other quarter or the full year.
2. Operations for the Company are managed via two
segments - Personal Care (Wet Shave, Skin Care,
Feminine Care and Infant Care) and Household
Products (Battery and Portable Lighting
products). Segment performance is evaluated
based on segment profit, exclusive of general
corporate expenses, share-based compensation
costs, costs associated with restructuring
projects (including spin restructuring and the
2013 restructuring detailed below), acquisition,
integration or business realignment activities,
and amortization of intangible assets. Financial
items, such as interest income and expense, are
managed on a global basis at the corporate level.
The exclusion from segment results of charges
such as acquisition transaction and integration
costs, and substantially all restructuring and
realignment costs, reflects management's view on
how it evaluates segment performance.
The Company's operating model includes a
combination of stand-alone and combined business
functions between the Personal Care and Household
Products businesses, varying by country and
region of the world. Shared functions include
product warehousing and distribution, various
transaction processing functions, and in some
countries, a combined sales force and management.
The Company applies an allocated cost basis, in
which the costs of shared segment business
functions are allocated between the segments.
Such allocations are estimates, and also do not
represent the costs of such services if performed
on a stand-alone basis.
For the quarter ended December 31, 2014, the
Company recorded pre-tax income of $0.5 related
to its 2013 restructuring, which was driven by
the gain on the sale of our Asia battery
packaging facility of $11.0 offset by
restructuring charges of $10.5, as compared to
pre-tax expense of $24.4 in the prior year
quarter. The 2013 restructuring charges were
reported on a separate line in the Statement of
Earnings (Condensed). In addition, pre-tax
costs of $0.2 for the quarter ended December 31,
2014 and $2.3 for the quarter ended December 31,
2013, associated with certain information
technology enablement activities related to the
Company's restructuring initiatives were included
in Selling, general and administrative (SG&A) on
the Statement of Earnings (Condensed).
As announced on April 30, 2014, the Company is
pursuing a plan to separate the Household
Products and Personal Care divisions into two
independent, publicly traded companies. As a
result, the Company is incurring incremental
costs to evaluate, plan and execute the
transaction. For the quarter ended December 31,
2014, $40.8 of pre-tax charges were recorded in
SG&A on the Statement of Earnings (Condensed).
Additionally, the Company recorded $2.8 in pre-
tax spin restructuring charges related to the
proposed spin-off transaction for the quarter
ended December 31, 2014. The spin restructuring
charges were reported on a separate line in the
Statement of Earnings (Condensed).
In connection with the feminine care acquisition,
the Company recorded pre-tax acquisition/
integration costs of $4.9 for the quarter ended
December 31, 2013. These amounts are not
reflected in the Personal Care segment, but
rather are presented as a separate line item
below segment profit, as it is a non-recurring
item directly associated with the feminine care
acquisition. Such presentation reflects
management's view on how segment results are
evaluated.
For the quarter ended December 31, 2013, the
Company recorded a pre-tax inventory valuation
adjustment of approximately $8 related to the
feminine care acquisition representing the
increased fair value of the inventory based on
the estimated selling price of the finished goods
acquired at the close date less the sum of (a)
costs of disposal and (b) a reasonable profit
allowance for the selling effort of the acquiring
entity. Approximately $6.4 of this amount was
recorded within Cost of products sold based upon
the write-up and subsequent sale of inventory
acquired in the feminine care acquisition for the
quarter ended December 31, 2013. The remaining
amount of the inventory valuation adjustment was
recorded to Cost of products sold during the
second fiscal quarter of 2014, upon the
subsequent sale of the remaining inventory. These
amounts are not reflected in the Personal Care
segment, but rather presented as a separate line
item below segment profit, as it is a non-
recurring item directly associated with the
feminine care acquisition. Such presentation
reflects management's view on how segment results
are evaluated.
Segment sales and profitability for the quarter
ended December 31, 2014 and 2013, respectively,
are presented below.
Unaudited
Quarter Ended December 31,
Net Sales 2014 2013
---- ----
Personal Care $537.1 $550.2
Household Products 501.3 563.7
----- -----
Total net sales $1,038.4 $1,113.9
======== ========
Personal Care $116.2 $130.3
Household Products 121.2 133.4
----- -----
Total segment profit 237.4 263.7
General corporate and other
expenses (28.5) (40.2)
2013 restructuring (1) 0.3 (26.7)
Spin restructuring (2.8) -
Spin costs (40.8) -
Feminine care acquisition/
integration costs - (4.9)
Acquisition inventory
valuation - (6.4)
Amortization of intangibles (4.1) (4.5)
Interest and other
financing items (25.3) (29.2)
----- -----
Total earnings before
income taxes $136.2 $151.8
====== ======
(1) Includes pre-tax costs of $0.2
for the quarter ended December
31, 2014 and $2.3 for the quarter
ended December 31, 2013,
associated with certain
information technology and
related activities, which are
included in SG&A on the Statement
of Earnings (Condensed).
Supplemental product information is presented below for revenues from external customers:
Unaudited
Quarter Ended December 31,
Net Sales 2014 2013 % Change
---- ---- --------
Wet Shave $342.5 $365.2 (6.2)%
Alkaline batteries 327.9 365.6 (10.3)%
Other batteries and
lighting products 173.4 198.1 (12.5)%
Feminine Care 95.8 80.9 18.4%
Skin Care 54.3 56.2 (3.4)%
Infant Care 30.9 35.3 (12.5)%
Other personal care
products 13.6 12.6 7.9%
---- ---- ---
Total net sales $1,038.4 $1,113.9 (6.8)%
======== ======== =====
3. Basic earnings per share is
based on the average number
of common shares outstanding
during the period. Diluted
earnings per share is based
on the average number of
shares used for the basic
earnings per share
calculation, adjusted for the
dilutive effect of stock
options and restricted stock
equivalents.
4. Working Capital Metrics at
December 31, 2014 as compared
to September 30, 2014.
Working Capital Metrics
(Unaudited) Q1
($ in millions) FY '15 Days FY '14
Days
----
Receivables, as
reported $479.2 $481.1
Less: Trade allowance
in accrued liabilities (89.8) (94.6)
----- -----
Receivables, adjusted
(1) 389.4 32.5 386.5
31.7
Inventories 625.3 101.0 617.4
97.5
Accounts Payable 350.7 56.7 337.5
53.3
Average Working
Capital, net (2)(4) $664.0 $666.4
Average Working Capital
as % of Net Sales (3) 15.2% 15.0%
(1) Trade receivable adjusted for trade allowance recorded as a reduction
of net sales per US GAAP, but included in accrued expenses on the
consolidated balance sheet.
(2) Average Working Capital is calculated using an average of the four
quarter end balances for each working capital component as of December
31, 2014 and September 30, 2014, respectively.
(3) Average Working Capital / Trailing 4 Quarter net sales.
(4) Working Capital is defined as Receivables (less trade allowance in
accrued liabilities), plus Inventories less Accounts Payable.
Statements in this Working Capital Comparative are not guarantees of
performance and are inherently subject to known and unknown risks and
uncertainties, which could cause actual performance or achievements to
differ materially from those expressed in or indicated by those
statements. Numerous factors could cause our actual results and events
to differ materially from those expressed or implied by forward-looking
statements. Please refer to "Forward Looking Statements" in the release
as well as Energizer's publicly filed documents for the risks that may
cause actual results to differ from statements herein, including its
annual report on Form 10-K for the year ended September 30, 2014.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-fiscal-2015-first-quarter-results-and-updates-financial-outlook-through-june-30-2015-300026897.html
SOURCE Energizer Holdings, Inc.
