ST. LOUIS, Nov. 9, 2017 /PRNewswire/ -- Edgewell
Personal Care Company (NYSE: EPC) today announced results for its
full fiscal year 2017 and fourth fiscal quarter 2017, which ended
September 30, 2017.
Executive Summary
- Net sales on a reported basis were $564.9 million in the fourth quarter of fiscal
2017, a decrease of 7.5% when compared to the prior year quarter,
and $2,298.4 million for the full
year, a decrease of 2.7% compared to the prior year. Organic net
sales were down 8.4% for the quarter and 2.8% for the full year.
(Organic net sales exclude sales growth from the Bulldog
acquisition and the impact of currency fluctuations.)
- GAAP net loss for the quarter was $148.4
million ($2.61 per share) and
GAAP net earnings for the year were $5.7
million ($0.10 per share),
including a non-cash intangible asset pre-tax impairment charge of
$319.0 million.
- Adjusted Earnings Per Share were $1.00 for the quarter and $3.97 for the full year.
- The Company delivered net cash flow from operating activities
of $296 million for the full
year.
- The Company provided its financial outlook for fiscal
2018.
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.
"Fiscal 2017 was a challenging year, with unprecedented category
and competitive pressure. Fourth quarter and full year net sales
were short of our expectations; however, we delivered 11% Adjusted
earnings per share growth and expanded adjusted operating income as
a percent of sales by over 50 basis points. We also grew
dollar share in the U.S. and key global markets in both Razors and
Blades and Sun and Skin Care, and we successfully integrated the
Bulldog business to expand our global platform," said David Hatfield, Edgewell's Chief Executive
Officer, President and Chairman of the Board. "While we
expect category declines in Wet Shave to persist into Fiscal 2018,
we remain focused on our strategy of delivering compelling
innovation, while maintaining our investments in growth initiatives
and executing the financial discipline needed to ensure the
long-term success of the Company." Mr. Hatfield continued, "In a
category like Wet Shave, where innovation matters, I'm particularly
excited about the coming year, as we plan to launch new products
across our entire portfolio."
Fiscal 4Q 2017 Operating Results (Unaudited)
Net sales were $564.9
million in the quarter, a decrease of 7.5% when compared to
the prior year quarter. Excluding a $4.5 million benefit from the Bulldog acquisition
and a $1.1 million positive impact
from currency, organic net sales decreased 8.4%, driven by Wet
Shave, reflecting declining global category trends; continued
weakness in our Feminine Care Segment; and expected declines in Sun
and Skin Care.
Gross margin decreased 280 basis points to 48.0%, driven
by lower volumes, unfavorable price mix in Sun and Skin Care
primarily related to higher promotional spend and product returns,
and unfavorable cost mix in Wet Shave, reflecting negative
transactional currency impacts, lower volumes and an unfavorable
product mix.
Advertising and sales promotion expense ("A&P") was
$71.0 million, or 12.6% of net sales,
a decrease from prior year period A&P of $82.6 million, or 13.5% of net sales. The
primary drivers of the lower spending were in Feminine Care when
compared to last year's Carefree campaign, and to a lesser extent,
Wet Shave, where some marketing spend was shifted to trade
promotions.
Selling, general and administrative expense ("SG&A")
was $94.8 million, or 16.8% of net
sales, as compared to $107.8 million,
or 17.7% of net sales, in the prior year period. SG&A as
a percent of net sales decreased 90 basis points, primarily driven
by lower incentive compensation as well as savings realized from
the Company's Zero-Based Spending program, which more than offset a
$2 million increase in amortization
expense. The Company recorded pre-tax restructuring
expense of $4.7 million compared
to $9.4 million in the prior year
quarter.
The Company recorded a non-cash intangible asset impairment
charge of $319.0 million to
adjust the carrying values of indefinite-lived tradenames related
to the Playtex and Edge brand names, with the majority of the
charge related to the Playtex brand name. While the Company
continues to support the Playtex branded business and its strong
heritage and brand equity, declining performance impacted the
growth and cash flow projections used to value the
trademark.
Other income, net was $0.1
million of income during the quarter as compared to
$2.0 million expense in the prior
year period, primarily reflecting a net benefit from foreign
currency exchange contract gains and losses in the quarter and
revaluation of nonfunctional currency balance sheet exposures.
Loss before income taxes was $252.8 million during the quarter compared to
earnings of $63.8 million in the
fourth quarter of fiscal 2016. Adjusted operating income
decreased to $87.7 million in the
quarter from $99.7 million in the
prior year period, primarily driven by lower gross margin,
partially offset by lower A&P and SG&A spending.
The effective tax rate for fiscal 2017 was 110.8% as
compared to 18.7% in the prior year. The tax rate for fiscal
2017 reflects a tax benefit on a net loss primarily due to the
intangible asset impairment charge. The adjusted effective
tax rate for fiscal 2017, excluding the tax associated with
impairment and restructuring charges, was 22.9%, in line with the
prior year adjusted rate of 23.1%.
GAAP net loss for the quarter was $148.4 million
($2.61 per share)
compared to earnings of $52.2
million ($0.88 per share) in
the fourth quarter of fiscal 2016. Adjusted net earnings in
the quarter were $56.7 million
($1.00 per share), as compared to
$62.5 million ($1.06 per share) in the prior year period.
Fiscal 4Q 2017 Operating Segment Results (Unaudited)
Following is a summary of fourth quarter results by segment.
Wet Shave (Men's Systems, Women's Systems, Disposables,
Shave Preps)
Wet Shave net sales decreased $23.5
million, or 6.0% on a reported and organic basis, compared
the prior year, primarily driven by lower volumes in North America and EMEA. The volume
declines in North America reflect
the on-going intense competitive environment and category declines
in Men's, Women's, and Disposables. Volume declines in EMEA
were due to temporary supply chain challenges and category and
competitive pressure. Wet Shave segment profit decreased
$10.3 million, or 10.3%, primarily
driven by lower volumes and unfavorable cost mix, partially offset
by lower spending.
Sun and Skin Care (Sun
Care, Wipes, Gloves, Bulldog)
Sun and Skin Care net sales decreased $6.5 million, or 8.4%. Excluding the
Bulldog acquisition and the impact of currency movements, organic
net sales decreased $11.4 million, or
14.7%. North America organic
net sales were down over 25%, driven by expected volume declines as
compared to a strong prior year quarter, and unfavorable price mix
due to higher promotional spend and higher product returns this
year. International Sun and Skin Care organic net sales
increased nearly 14%, driven by volume growth in Latin
America. Organic net sales were also impacted by a
$1.6 million decline related to the
Company's exit of the private label Sun
Care business. Sun and Skin Care segment profit
decreased $9.6 million, or 67.1%,
driven primarily by lower volumes and unfavorable price mix and
returns in North America. As part of the on-going evaluation
of our product portfolio, we completed the sale of our Playtex
Gloves business in October for $19
million. The resulting gain and the results of the Gloves
business will be excluded from our organic results in fiscal
2018.
Feminine Care (Tampons, Pads, Liners)
Feminine Care net sales decreased $14.8
million, or 13.7%, driven by volume declines in tampons,
pads, and liners related to distribution losses, and heightened
competitive pressure. Feminine Care segment profit increased
$7.8 million, as lower A&P and
overhead spending, as well as lower product costs, more than offset
the impact of lower volumes.
All Other (Infant Care,
all other brands)
All Other net sales decreased $0.9
million, or 2.7%. Excluding the impact of currency
movements, organic net sales decreased $1.2
million, or 3.6%, driven by declines in infant feeding
products. All Other segment profit decreased $1.8 million, or 25.4%, driven by lower product
volumes and higher product costs.
Fiscal 2017 Operating Results (Unaudited)
Net sales were $2,298.4
million in fiscal 2017, a decrease of 2.7% when compared to
fiscal 2016, including a 0.6% increase from the Bulldog
acquisition. Organic net sales decreased 2.8%. From a geographic
perspective, North America organic
net sales decreased 4.4% and International organic net sales
increased 0.3%. From a segment perspective, organic net sales
decreased 2.8% in Wet Shave, driven primarily by lower volumes due
to heightened competitive activity and category declines.
Feminine Care organic net sales declined 9.7%, driven by lower
volumes. Sun and Skin Care net sales increased 3.2% on higher
volumes and favorable pricing and returns, partially offset by a
$8.2 million decline related to the
Company's decision to exit the private label Sun Care business.
Gross Margin was $1,130.6
million, or 49.2% of net sales, a 10-basis point increase
versus the prior year as a percent of net sales.
Net Earnings in fiscal 2017 were $5.7 million, compared to $178.7 million in fiscal 2016. Adjusted net
earnings were $228.4 million,
compared to $213.3 million in fiscal
2016. Excluding the intangible asset impairment charge and
restructuring costs, the increase in adjusted net earnings was
driven primarily by higher adjusted operating profit and favorable
other income, slightly offset by negative currency translation.
GAAP Diluted Earnings Per Share were $0.10 in fiscal 2017 as compared to earnings of
$2.99 in fiscal 2016. Adjusted EPS
was $3.97 for fiscal 2017, compared
to $3.57 in fiscal 2016.
Net cash from operating activities was $296.2 million for fiscal 2017, as compared to
$176.4 million during the prior
year. The improvement reflects $100.5
million of discretionary funding of certain international
pension plans in fiscal 2016 and higher current period adjusted net
earnings.
In fiscal 2017, the Company completed share repurchases
of approximately 2.2 million shares for $165.4 million.
Other Items
The Company completed its manufacturing footprint restructuring
efforts with full year restructuring costs of $30.3 million compared to $38.8 million in the prior year. Gross
savings for fiscal 2017 were $22
million, and are reflected in the results of the Wet Shave,
Sun and Skin Care, and Feminine Care businesses.
In addition, the first full year of the Zero-Based Spending
initiative was completed, yielding net savings of approximately
$20 million in fiscal 2017, above the
original estimate of $10 to $15
million.
Full Fiscal Year 2018 Financial Outlook
For fiscal 2018, reported net sales are expected to be generally
consistent with the prior year, including an approximate 150
basis-point increase from positive foreign currency translation
effects (based on spot exchange rates as of October 19, 2017) and a 50 basis-point decrease
from the Gloves divestiture, net of acquisitions. The
Company's outlook reflects an assumption of continued category
declines and competitive intensity in Wet Shave, as well as
on-going declines in Feminine Care net sales.
The Company's outlook for GAAP EPS for fiscal 2018 is in the
range of $4.00 to $4.20, and includes
an estimated $16 million pre-tax gain
from the Gloves divestiture. The outlook for Adjusted EPS is
in the range of $3.80 to $4.00.
Adjusted operating income margin as a percent of net sales is
anticipated to expand by 20 to 25 basis points. Planned savings and
efficiency initiatives, including the Company's Zero-Based Spending
program, will be mostly reinvested into marketing spend and
continued investment in the Company's strategic growth
initiatives. The planned savings and efficiency initiatives
includes the Company's Zero-Based Spending initiatives, anticipated
to drive $25 - $30 million in net
savings in fiscal 2018, and well as incremental savings from
Restructuring projects.
The effective tax rate for the fiscal year is now estimated to
be in the range of 24% to 26%.
In fiscal 2018, we anticipate that net sales and earnings
performance will not be uniform by quarter, largely due to the
timing of product launches, investments and A&P phasing.
In the first half of the fiscal year, we anticipate that both
organic net sales and adjusted EPS will decline as compared to the
comparable period in the prior fiscal year.
The Company anticipates that fiscal 2018 free cash flow will be
above 100% of GAAP net earnings.
The sale of the Playtex Gloves business was completed in October
and will result in a pre-tax gain of $16 million during the first fiscal quarter of
2018.
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
2017 fourth quarter earnings and the outlook for fiscal 2018.
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®, Hawaiian Tropic® and Bulldog® sun and
skin care products; Playtex® infant feeding and Diaper Genie®; 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, the U.K. 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 items such as
spin costs, restructuring charges, the sale of the industrial
business and impairment of intangibles. Reconciliations of
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. 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 on an organic basis to
better measure the comparability of results between periods.
Organic net sales exclude the impact of changes in foreign currency
and acquisitions. This information is provided because these
fluctuations can distort the underlying change in net sales either
positively or negatively.
- Adjusted EBITDA is defined as earnings before income taxes,
interest expense, net, depreciation and amortization and excludes
items such as impairment charges, spin costs, restructuring charges
and the sale of the industrial business.
- Adjusted operating income is defined as earnings before income
taxes, interest expense associated with debt, other income, net,
and excludes items such as impairment charges, spin costs,
restructuring charges and the sale of the industrial business.
- Adjusted net earnings and adjusted earnings per share are
defined as net earnings and diluted earnings per share excluding
items such as impairment charges, spin costs, restructuring
charges, the sale of the industrial business and the related tax
effects of these items.
- Adjusted effective tax rate is defined as the effective tax
rate excluding items such as impairment charges, spin costs,
restructuring charges, the sale of the industrial business and the
related tax effects of these items from the income tax provision
and earnings before income taxes.
- 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.
- Free cash flow is defined as net cash from operating activities
less net capital expenditures. Free cash flow conversion is
defined as free cash flow as a percentage of net earnings adjusted
for the net impact of non-cash impairments.
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 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:
- We face risks associated with global economic conditions.
- Competition in our industries may hinder our ability to execute
our business strategy, achieve profitability, or maintain
relationships with existing customers.
- Loss of any of our principal customers could significantly
decrease our sales and profitability.
- Our inability to execute a successful e-commerce strategy could
have a significant impact on our business
- Changes in production costs, including raw material prices,
could erode our profit margins and negatively impact operating
results.
- Loss of reputation of our leading brands or failure of our
marketing plans could have an adverse effect on our business.
- We are subject to risks related to our international
operations, including currency fluctuations, which could adversely
affect our results of operations.
- We face risks arising from our ongoing efforts to achieve cost
savings.
- If we cannot continue to develop new products in a timely
manner, and at favorable margins, we may not be able to compete
effectively.
- We may not be able to continue to identify and complete
strategic acquisitions and effectively integrate acquired companies
to achieve desired financial benefits.
- A failure of a key information technology system or a breach of
our information security could adversely impact our ability to
conduct business.
- Our business is subject to increasing global regulation,
including product related regulations and environmental
regulations, that may expose us to significant liabilities.
- Our access to capital markets and borrowing capacity could be
limited.
- Impairment of our goodwill and other intangible assets would
result in a reduction in net income.
- Legislative changes in applicable tax laws, policies and
regulations or unfavorable resolution of tax matters may result in
additional tax liabilities, which could adversely impact our cash
flows and results of operations.
- Our manufacturing facilities, supply channels or other business
operations may be subject to disruption from events beyond our
control.
- We have a substantial level of indebtedness and are subject to
various covenants relating to such indebtedness, which could limit
our discretion to operate and grow our business.
- Our business is subject to seasonal volatility.
- There can be no guarantee that we will repurchase stock.
- We do not expect to pay dividends for the foreseeable
future.
- If we fail to adequately protect our intellectual property
rights, competitors may manufacture and market similar products,
which could adversely affect our market share and results of
operations.
- Our financial results could be adversely impacted by the
United Kingdom's departure from
the European Union.
- Our business involves the potential for product liability and
other claims against us, which could affect our results of
operations and financial condition and result in product recalls or
withdrawals.
- Our business could be negatively impacted as a result of
stockholder activism or an unsolicited takeover proposal or a proxy
contest.
- We may not be able to attract, retain and develop key
personnel.
- We may experience losses or be subject to increased funding and
expenses related to our pension plans.
- Certain provisions in our articles of incorporation and bylaws,
and of Missouri law, could deter
or delay a third-party's effort to acquire us, especially if the
Board determines it is not in the best interest of our
shareholders.
- The trading price of our common shares may be volatile.
- Our historical financial information is not necessarily
representative of the results that we would have achieved had the
separation of our household products business (the "Separation")
taken place before July 1, 2015, and
may not be a reliable indicator of our future results.
- If the Separation, together with certain related transactions,
does not qualify as a transaction that is generally tax free for
U.S. federal income tax purposes, our shareholders could be subject
to significant tax liabilities.
- Indemnifications under the Separation agreement with Energizer
Holdings, Inc. or Energizer's inability to satisfy indemnification
obligations in the future could negatively impact our financial
results.
In addition, other risks and uncertainties not presently known
to the Company or that it presently considers immaterial could
significantly 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, 2016.
EDGEWELL PERSONAL
CARE COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in
millions, except per share data)
|
|
|
Quarter Ended
September 30,
|
|
Year Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
564.9
|
|
|
$
|
610.6
|
|
|
$
|
2,298.4
|
|
|
$
|
2,362.0
|
|
Cost of products
sold
|
294.0
|
|
|
300.5
|
|
|
1,167.8
|
|
|
1,202.1
|
|
Gross
profit
|
270.9
|
|
|
310.1
|
|
|
1,130.6
|
|
|
1,159.9
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
94.8
|
|
|
107.8
|
|
|
390.0
|
|
|
412.7
|
|
Advertising and sales
promotion expense
|
71.0
|
|
|
82.6
|
|
|
318.3
|
|
|
336.7
|
|
Research and
development expense
|
17.4
|
|
|
21.7
|
|
|
67.6
|
|
|
71.9
|
|
Impairment
charge
|
319.0
|
|
|
6.5
|
|
|
319.0
|
|
|
6.5
|
|
Restructuring
charges
|
4.7
|
|
|
7.7
|
|
|
29.6
|
|
|
37.0
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Interest expense
associated with debt
|
16.9
|
|
|
18.0
|
|
|
69.2
|
|
|
71.8
|
|
Other (income)
expense, net
|
(0.1)
|
|
|
2.0
|
|
|
(10.2)
|
|
|
3.2
|
|
(Loss) earnings
before income taxes
|
(252.8)
|
|
|
63.8
|
|
|
(52.9)
|
|
|
219.9
|
|
Income tax (benefit)
provision
|
(104.4)
|
|
|
11.6
|
|
|
(58.6)
|
|
|
41.2
|
|
Net (loss)
earnings
|
$
|
(148.4)
|
|
|
$
|
52.2
|
|
|
$
|
5.7
|
|
|
$
|
178.7
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic net (loss) earnings per share
|
$
|
(2.61)
|
|
|
$
|
0.89
|
|
|
$
|
0.10
|
|
|
$
|
3.02
|
|
Diluted net (loss) earnings per diluted share
|
(2.61)
|
|
|
0.88
|
|
|
0.10
|
|
|
2.99
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
56.7
|
|
|
58.6
|
|
|
57.3
|
|
|
59.2
|
|
Diluted
|
56.7
|
|
|
59.2
|
|
|
57.5
|
|
|
59.7
|
|
See Accompanying Notes.
EDGEWELL PERSONAL
CARE COMPANY CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited, in millions)
|
|
|
September 30,
2017
|
|
September 30,
2016
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
502.9
|
|
|
$
|
738.9
|
|
Trade receivables,
net
|
224.1
|
|
|
260.7
|
|
Inventories
|
333.5
|
|
|
309.2
|
|
Other current
assets
|
125.7
|
|
|
143.2
|
|
Total current
assets
|
1,186.2
|
|
|
1,452.0
|
|
Property, plant and
equipment, net
|
453.4
|
|
|
486.1
|
|
Goodwill
|
1,445.9
|
|
|
1,420.3
|
|
Other intangible
assets, net
|
1,071.7
|
|
|
1,385.1
|
|
Other
assets
|
31.6
|
|
|
28.0
|
|
Total
assets
|
$
|
4,188.8
|
|
|
$
|
4,771.5
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current maturities of
long-term debt
|
$
|
—
|
|
|
$
|
281.8
|
|
Notes
payable
|
19.4
|
|
|
18.5
|
|
Accounts
payable
|
223.6
|
|
|
196.5
|
|
Other current
liabilities
|
281.4
|
|
|
371.4
|
|
Total current
liabilities
|
524.4
|
|
|
868.2
|
|
Long-term
debt
|
1,525.4
|
|
|
1,544.2
|
|
Deferred income tax
liabilities
|
181.8
|
|
|
255.3
|
|
Other
liabilities
|
215.5
|
|
|
274.8
|
|
Total
liabilities
|
2,447.1
|
|
|
2,942.5
|
|
Shareholders'
equity
|
|
|
|
Common
shares
|
0.7
|
|
|
0.7
|
|
Additional paid-in
capital
|
1,623.4
|
|
|
1,642.5
|
|
Retained
earnings
|
952.9
|
|
|
946.0
|
|
Treasury
shares
|
(703.9)
|
|
|
(563.0)
|
|
Accumulated other
comprehensive loss
|
(131.4)
|
|
|
(197.2)
|
|
Total shareholders'
equity
|
1,741.7
|
|
|
1,829.0
|
|
Total liabilities and
shareholders' equity
|
$
|
4,188.8
|
|
|
$
|
4,771.5
|
|
See Accompanying Notes.
EDGEWELL PERSONAL
CARE COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited, in millions)
|
|
|
Year Ended
September 30,
|
|
2017
|
|
2016
|
Cash Flow from
Operating Activities
|
|
|
|
Net
earnings
|
$
|
5.7
|
|
|
$
|
178.7
|
|
Non-cash
restructuring costs
|
6.8
|
|
|
3.9
|
|
Depreciation and
amortization
|
94.4
|
|
|
92.6
|
|
Impairment
charge
|
319.0
|
|
|
6.5
|
|
Deferred compensation
payments
|
(27.9)
|
|
|
(10.2)
|
|
Share-based
compensation expense
|
22.2
|
|
|
25.6
|
|
International pension
funding
|
—
|
|
|
(100.5)
|
|
Deferred income
taxes
|
(87.4)
|
|
|
7.8
|
|
Other, net
|
(15.9)
|
|
|
(9.5)
|
|
Changes in current
assets and liabilities used in operations
|
(20.7)
|
|
|
(18.5)
|
|
Net cash from
operating activities
|
296.2
|
|
|
176.4
|
|
|
|
|
|
Cash Flow from
Investing Activities
|
|
|
|
Capital
expenditures
|
(69.0)
|
|
|
(69.5)
|
|
Acquisitions, net of
cash acquired
|
(34.0)
|
|
|
—
|
|
Proceeds from sale of
assets
|
18.4
|
|
|
—
|
|
Net cash used by
investing activities
|
(84.6)
|
|
|
(69.5)
|
|
|
|
|
|
Cash Flow from
Financing Activities
|
|
|
|
Cash proceeds from
debt with original maturities greater than 90 days
|
271.0
|
|
|
756.3
|
|
Cash payments on debt
with original maturities greater than 90 days
|
(568.0)
|
|
|
(631.0)
|
|
Net increase
(decrease) in debt with original maturities of 90 days or
less
|
2.0
|
|
|
(11.1)
|
|
Deferred finance
expense
|
—
|
|
|
(0.6)
|
|
Common shares
purchased
|
(165.4)
|
|
|
(196.6)
|
|
Other, net
|
(0.2)
|
|
|
—
|
|
Net cash used by
financing activities
|
(460.6)
|
|
|
(83.0)
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
13.0
|
|
|
2.9
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
(236.0)
|
|
|
26.8
|
|
Cash and cash
equivalents, beginning of period
|
738.9
|
|
|
712.1
|
|
Cash and cash
equivalents, end of period
|
$
|
502.9
|
|
|
$
|
738.9
|
|
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, costs associated with restructuring
initiatives, the sale of the industrial business and the
amortization 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 October 31, 2016, the Company
completed the acquisition of Bulldog Skincare Holdings Limited
("Bulldog"), a men's grooming and skincare products company based
in the United Kingdom,
for £27.8, or approximately $34.0, net of cash
acquired. The acquisition created opportunities to expand
Edgewell's personal care portfolio into a growing global category
where it can leverage its international geographic footprint.
The acquisition was financed through available foreign cash.
The results of Bulldog for the post-acquisition period are included
within the Company's results for the fourth quarter and fiscal
2017, and all assets are included in the Company's Sun and Skin
Care segment.
Segment net sales and profitability are presented below:
|
Quarter Ended
September 30,
|
|
Year Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
Sales
|
|
|
|
|
|
|
|
Wet Shave
|
$
|
368.0
|
|
|
$
|
391.5
|
|
|
$
|
1,375.3
|
|
|
$
|
1,425.8
|
|
Sun and Skin
Care
|
71.1
|
|
|
77.6
|
|
|
440.4
|
|
|
414.9
|
|
Feminine
Care
|
92.9
|
|
|
107.7
|
|
|
351.6
|
|
|
388.9
|
|
All Other
|
32.9
|
|
|
33.8
|
|
|
131.1
|
|
|
132.4
|
|
Total net
sales
|
$
|
564.9
|
|
|
$
|
610.6
|
|
|
$
|
2,298.4
|
|
|
$
|
2,362.0
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
|
|
|
|
|
Wet Shave
|
$
|
89.9
|
|
|
$
|
100.2
|
|
|
$
|
294.9
|
|
|
$
|
290.2
|
|
Sun and Skin
Care
|
4.7
|
|
|
14.3
|
|
|
98.8
|
|
|
89.5
|
|
Feminine
Care
|
11.4
|
|
|
3.6
|
|
|
28.9
|
|
|
39.1
|
|
All Other
|
5.3
|
|
|
7.1
|
|
|
26.6
|
|
|
28.4
|
|
Total segment
profit
|
111.3
|
|
|
125.2
|
|
|
449.2
|
|
|
447.2
|
|
General corporate and
other expenses
|
(17.9)
|
|
|
(21.9)
|
|
|
(76.0)
|
|
|
(80.4)
|
|
Impairment
charge
|
(319.0)
|
|
|
(6.5)
|
|
|
(319.0)
|
|
|
(6.5)
|
|
Spin costs
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.0)
|
|
Restructuring and
related costs (2)
|
(4.7)
|
|
|
(9.4)
|
|
|
(30.3)
|
|
|
(38.8)
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2)
|
|
Amortization of
intangibles
|
(5.7)
|
|
|
(3.6)
|
|
|
(17.8)
|
|
|
(14.4)
|
|
Interest and other
expense, net
|
(16.8)
|
|
|
(20.0)
|
|
|
(59.0)
|
|
|
(75.0)
|
|
Total (loss)
earnings before income taxes
|
$
|
(252.8)
|
|
|
$
|
63.8
|
|
|
$
|
(52.9)
|
|
|
$
|
219.9
|
|
|
|
(1)
|
Includes Selling,
general and administrative expense ("SG&A") of $11.8 and Cost
of products sold of $0.2 for the year ended September 30, 2016
related to the separation of the Household Products business in
July 2015.
|
|
|
(2)
|
Includes Cost of
products sold of $0.7 for the year ended September 30, 2017, and
$1.7 and $1.8 for the quarter and year ended September 30, 2016,
respectively, associated with obsolescence charges related to the
exit of certain non-core product lines as a part of the
restructuring.
|
Note 2 - GAAP to Non-GAAP Reconciliations
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 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
awards.
The following table provides a reconciliation of Net earnings
and Net earnings per diluted share ("EPS") to Adjusted net earnings
and Adjusted EPS, which are Non-GAAP measures.
|
Quarter Ended
September 30,
|
|
Net
Earnings
|
|
Diluted
EPS
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net (Loss)
Earnings and Diluted EPS - GAAP (Unaudited)
|
$
|
(148.4)
|
|
|
$
|
52.2
|
|
|
$
|
(2.61)
|
|
|
$
|
0.88
|
|
Impairment
charge
|
319.0
|
|
|
6.5
|
|
|
5.63
|
|
|
0.11
|
|
Restructuring and
related charges (1)
|
4.7
|
|
|
9.4
|
|
|
0.08
|
|
|
0.16
|
|
Income
taxes
|
(118.6)
|
|
|
(5.6)
|
|
|
(2.09)
|
|
|
(0.09)
|
|
Impact of
basic/dilutive shares(2)
|
—
|
|
|
—
|
|
|
(0.01)
|
|
|
—
|
|
Adjusted Net
Earnings and Adjusted Diluted EPS - Non-GAAP
|
$
|
56.7
|
|
|
$
|
62.5
|
|
|
$
|
1.00
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares - Diluted
|
|
|
|
|
56.7
|
|
59.2
|
|
|
(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)
|
All EPS impacts are
calculated using diluted weighted-average shares outstanding. For
the quarter ended September 30, 2017, this reflects the impact of
0.3 dilutive restricted stock equivalent ("RSE") awards which were
excluded from the GAAP EPS calculation due to the reported net loss
for the period.
|
|
Year Ended
September 30,
|
|
Net
Earnings
|
|
Diluted
EPS
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Earnings and
Diluted EPS - GAAP (Unaudited)
|
$
|
5.7
|
|
|
$
|
178.7
|
|
|
$
|
0.10
|
|
|
$
|
2.99
|
|
Impairment
charge
|
319.0
|
|
|
6.5
|
|
|
5.55
|
|
|
0.11
|
|
Spin costs
(1)
|
—
|
|
|
12.0
|
|
|
—
|
|
|
0.20
|
|
Restructuring and
related charges (2)
|
30.3
|
|
|
38.8
|
|
|
0.53
|
|
|
0.65
|
|
Industrial sale
charges
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
Income
taxes
|
(126.6)
|
|
|
(22.9)
|
|
|
(2.21)
|
|
|
(0.38)
|
|
Adjusted Net
Earnings and Adjusted Diluted EPS - Non-GAAP
|
$
|
228.4
|
|
|
$
|
213.3
|
|
|
$
|
3.97
|
|
|
$
|
3.57
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares - Diluted
|
|
|
|
|
57.5
|
|
59.7
|
|
|
(1)
|
Includes SG&A of
$11.8 and Cost of products sold of $0.2 for the year ended
September 30, 2016 related to the separation of the Household
Products business in July 2015.
|
|
|
(2)
|
Includes Cost of
products sold of $0.7 and $1.8 for the years ended September 30,
2017 and 2016, respectively, associated with obsolescence charges
related to the exit of certain non-core product lines as part of
the restructuring.
|
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, 2017
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
SG&A
|
|
EBIT
(1)
|
|
Net (Loss)
Earnings
|
|
Diluted
EPS
|
GAAP -
Reported
|
$
|
270.9
|
|
|
$
|
94.8
|
|
|
$
|
(252.8)
|
|
|
$
|
(148.4)
|
|
|
$
|
(2.61)
|
|
% of net
sales
|
48.0
|
%
|
|
16.8
|
%
|
|
|
|
|
|
|
Impairment
charges
|
—
|
|
|
—
|
|
|
319.0
|
|
|
201.9
|
|
|
3.56
|
|
Restructuring and
related charges (2)
|
—
|
|
|
—
|
|
|
4.7
|
|
|
3.2
|
|
|
0.06
|
|
Impact of
basic/dilutive shares (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01)
|
|
Total Adjusted
Non-GAAP
|
$
|
270.9
|
|
|
$
|
94.8
|
|
|
$
|
70.9
|
|
|
$
|
56.7
|
|
|
$
|
1.00
|
|
% of net
sales
|
48.0
|
%
|
|
16.8
|
%
|
|
|
|
|
|
|
Year Ended
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
SG&A
|
|
EBIT
(1)
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP -
Reported
|
$
|
1,130.6
|
|
|
$
|
390.0
|
|
|
$
|
(52.9)
|
|
|
$
|
5.7
|
|
|
$
|
0.10
|
|
% of net
sales
|
49.2
|
%
|
|
17.0
|
%
|
|
|
|
|
|
|
Impairment
charges
|
—
|
|
|
—
|
|
|
319.0
|
|
|
201.9
|
|
|
3.51
|
|
Restructuring and
related charges (2)
|
0.7
|
|
|
—
|
|
|
30.3
|
|
|
20.8
|
|
|
0.36
|
|
Total Adjusted
Non-GAAP
|
$
|
1,131.3
|
|
|
$
|
390.0
|
|
|
$
|
296.4
|
|
|
$
|
228.4
|
|
|
$
|
3.97
|
|
% of net
sales
|
49.2
|
%
|
|
17.0
|
%
|
|
|
|
|
|
|
Quarter Ended
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
SG&A
|
|
EBIT
(1)
|
|
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 (2)
|
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
|
|
EBIT
(1)
|
|
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 (2)
|
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
|
%
|
|
|
|
|
|
|
|
|
(1)
|
EBIT is defined as
Earnings before income taxes.
|
|
|
(2)
|
Includes Cost of
products sold of $0.7 for the year ended September 30, 2017 and
$1.7 and $1.8 for the quarter and year ended September 30, 2016,
respectively, associated with obsolescence charges related to the
exit of certain non-core product lines as part of the
restructuring.
|
|
|
(3)
|
All EPS impacts are
calculated using diluted weighted-average shares outstanding. For
the fourth quarter of fiscal 2017, this reflects the impact of 0.3
dilutive RSE awards which were excluded from the GAAP EPS
calculation due to the reported net loss.
|
The following table provides a reconciliation of Earnings before
income taxes to adjusted operating income, which is a Non-GAAP
measure, for the quarters and years ended September 30, 2017 and 2016:
|
Quarter Ended
September 30,
|
|
Year Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
(Loss) earnings
before income taxes
|
$
|
(252.8)
|
|
|
$
|
63.8
|
|
|
$
|
(52.9)
|
|
|
$
|
219.9
|
|
Impairment
charges
|
319.0
|
|
|
6.5
|
|
|
319.0
|
|
|
6.5
|
|
Spin costs
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
12.0
|
|
Restructuring and
related charges (2)
|
4.7
|
|
|
9.4
|
|
|
30.3
|
|
|
38.8
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Interest expense
associated with debt
|
16.9
|
|
|
18.0
|
|
|
69.2
|
|
|
71.8
|
|
Other (income)
expense, net
|
(0.1)
|
|
|
2.0
|
|
|
(10.2)
|
|
|
3.2
|
|
Adjusted operating
income
|
$
|
87.7
|
|
|
$
|
99.7
|
|
|
$
|
355.4
|
|
|
$
|
352.4
|
|
% of net
sales
|
15.5
|
%
|
|
16.3
|
%
|
|
15.5
|
%
|
|
14.9
|
%
|
|
|
(1)
|
Includes SG&A of
$11.8 and Costs of products sold of $0.2 for the year ended
September 30, 2016 related to the separation of the Household
Products business in July 2015.
|
|
|
(2)
|
Includes Cost of
products sold of $0.7 for the year ended September 30, 2017, and
$1.7 and $1.8 for the quarter and year ended September 30, 2016,
respectively, associated with obsolescence charges related to the
exit of certain non-core product lines as part of the
restructuring.
|
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, 2017
|
|
Year Ended
September 30, 2016
|
|
Reported
|
|
Adjustments
(1)
|
|
Adjusted
(Non-GAAP)
|
|
Reported
|
|
Adjustments
(1)
|
|
Adjusted
(Non-GAAP)
|
(Loss) earnings
before income taxes
|
$
|
(52.9)
|
|
|
$
|
349.3
|
|
|
$
|
296.4
|
|
|
$
|
219.9
|
|
|
$
|
57.5
|
|
|
$
|
277.4
|
|
Income tax
provision
|
(58.6)
|
|
|
126.6
|
|
|
68.0
|
|
|
41.2
|
|
|
22.9
|
|
|
64.1
|
|
Net
earnings
|
$
|
5.7
|
|
|
$
|
222.7
|
|
|
$
|
228.4
|
|
|
$
|
178.7
|
|
|
$
|
34.6
|
|
|
$
|
213.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
110.8
|
%
|
|
|
|
|
|
18.7
|
%
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
22.9
|
%
|
|
|
|
|
|
23.1
|
%
|
|
|
(1)
|
Includes adjustments
for spin costs, restructuring charges, the sale of the industrial
business, impairment charges and the associated tax impact of these
charges. See reconciliation of Net earnings to Adjusted net
earnings.
|
Note 3 - Net Sales and Profit by Segment
Operations for the Company are reported via four segments - Wet
Shave, Sun and Skin Care, Feminine Care and All Other. The
following tables present changes in net sales and segment profit
for the quarter and year ended September 30,
2017, as compared to the corresponding periods in fiscal
2016, and provide a reconciliation of organic net sales and organic
segment profit to reported amounts.
Net Sales (In
millions - Unaudited)
|
Quarter Ended
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Net Sales - Q4
'16
|
$
|
391.5
|
|
|
|
|
$
|
77.6
|
|
|
|
|
$
|
107.7
|
|
|
|
|
$
|
33.8
|
|
|
|
|
$
|
610.6
|
|
|
|
Organic
|
(23.6)
|
|
|
(6.0)
|
%
|
|
(11.4)
|
|
|
(14.7)
|
%
|
|
(15.1)
|
|
|
(14.0)
|
%
|
|
(1.2)
|
|
|
(3.6)
|
%
|
|
(51.3)
|
|
|
(8.4)
|
%
|
Impact of
acquisition
|
—
|
|
|
—
|
%
|
|
4.5
|
|
|
5.8
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
4.5
|
|
|
0.7
|
%
|
Impact of
currency
|
0.1
|
|
|
—
|
%
|
|
0.4
|
|
|
0.5
|
%
|
|
0.3
|
|
|
0.3
|
%
|
|
0.3
|
|
|
0.9
|
%
|
|
1.1
|
|
|
0.2
|
%
|
Net Sales - Q4
'17
|
$
|
368.0
|
|
|
(6.0)
|
%
|
|
$
|
71.1
|
|
|
(8.4)
|
%
|
|
$
|
92.9
|
|
|
(13.7)
|
%
|
|
$
|
32.9
|
|
|
(2.7)
|
%
|
|
$
|
564.9
|
|
|
(7.5)
|
%
|
Net Sales (In
millions - Unaudited)
|
Year Ended
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Net Sales - FY
'16
|
$
|
1,425.8
|
|
|
|
|
$
|
414.9
|
|
|
|
|
$
|
388.9
|
|
|
|
|
$
|
132.4
|
|
|
|
|
$
|
2,362.0
|
|
|
|
Organic
|
(39.2)
|
|
|
(2.7)
|
%
|
|
13.2
|
|
|
3.2
|
%
|
|
(37.6)
|
|
|
(9.7)
|
%
|
|
(1.4)
|
|
|
(1.1)
|
%
|
|
(65.0)
|
|
|
(2.8)
|
%
|
Impact of
acquisition
|
—
|
|
|
—
|
%
|
|
14.6
|
|
|
3.5
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
14.6
|
|
|
0.6
|
%
|
Impact of
currency
|
(11.3)
|
|
|
(0.8)
|
%
|
|
(2.3)
|
|
|
(0.6)
|
%
|
|
0.3
|
|
|
0.1
|
%
|
|
0.1
|
|
|
0.1
|
%
|
|
(13.2)
|
|
|
(0.5)
|
%
|
Net Sales - FY
'17
|
$
|
1,375.3
|
|
|
(3.5)
|
%
|
|
$
|
440.4
|
|
|
6.1
|
%
|
|
$
|
351.6
|
|
|
(9.6)
|
%
|
|
$
|
131.1
|
|
|
(1.0)
|
%
|
|
$
|
2,298.4
|
|
|
(2.7)
|
%
|
Segment Profit (In
millions - Unaudited)
|
Quarter Ended
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Segment Profit - Q4
'16
|
$
|
100.2
|
|
|
|
|
$
|
14.3
|
|
|
|
|
$
|
3.6
|
|
|
|
|
$
|
7.1
|
|
|
|
|
$
|
125.2
|
|
|
|
Organic
|
(7.6)
|
|
|
(7.6)
|
%
|
|
(9.0)
|
|
|
(62.9)
|
%
|
|
7.8
|
|
|
216.7
|
%
|
|
(2.0)
|
|
|
(28.2)
|
%
|
|
(10.8)
|
|
|
(8.6)
|
%
|
Impact of
acquisition
|
—
|
|
|
—
|
%
|
|
(0.5)
|
|
|
(3.5)
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(0.5)
|
|
|
(0.4)
|
%
|
Impact of
currency
|
(2.7)
|
|
|
(2.7)
|
%
|
|
(0.1)
|
|
|
(0.7)
|
%
|
|
—
|
|
|
—
|
%
|
|
0.2
|
|
|
2.8
|
%
|
|
(2.6)
|
|
|
(2.1)
|
%
|
Segment Profit - Q4
'17
|
$
|
89.9
|
|
|
(10.3)
|
%
|
|
$
|
4.7
|
|
|
(67.1)
|
%
|
|
$
|
11.4
|
|
|
216.7
|
%
|
|
$
|
5.3
|
|
|
(25.4)
|
%
|
|
$
|
111.3
|
|
|
(11.1)
|
%
|
Segment Profit (In
millions - Unaudited)
|
Year Ended
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Segment Profit - FY
'16
|
$
|
290.2
|
|
|
|
|
$
|
89.5
|
|
|
|
|
$
|
39.1
|
|
|
|
|
$
|
28.4
|
|
|
|
|
$
|
447.2
|
|
|
|
Organic
|
8.3
|
|
|
2.9
|
%
|
|
10.2
|
|
|
11.4
|
%
|
|
(10.2)
|
|
|
(26.1)
|
%
|
|
(1.9)
|
|
|
(6.7)
|
%
|
|
6.4
|
|
|
1.4
|
%
|
Impact of
acquisition
|
—
|
|
|
—
|
%
|
|
0.3
|
|
|
0.3
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
0.3
|
|
|
0.1
|
%
|
Impact of
currency
|
(3.6)
|
|
|
(1.3)
|
%
|
|
(1.2)
|
|
|
(1.3)
|
%
|
|
—
|
|
|
—
|
%
|
|
0.1
|
|
|
0.4
|
%
|
|
(4.7)
|
|
|
(1.1)
|
%
|
Segment Profit - FY
'17
|
$
|
294.9
|
|
|
1.6
|
%
|
|
$
|
98.8
|
|
|
10.4
|
%
|
|
$
|
28.9
|
|
|
(26.1)
|
%
|
|
$
|
26.6
|
|
|
(6.3)
|
%
|
|
$
|
449.2
|
|
|
0.4
|
%
|
Note 4 - EBITDA
The Company reports financial results on a GAAP and adjusted
basis. The table below is used to reconcile Net (loss)
earnings to EBITDA and Adjusted EBITDA, which are Non-GAAP
measures, to improve comparability of results between periods.
|
Quarter Ended
September 30,
|
|
Year Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net (loss)
earnings
|
$
|
(148.4)
|
|
|
$
|
52.2
|
|
|
$
|
5.7
|
|
|
$
|
178.7
|
|
Income tax
provision
|
(104.4)
|
|
|
11.6
|
|
|
(58.6)
|
|
|
41.2
|
|
Interest expense, net
(1)
|
17.0
|
|
|
16.3
|
|
|
69.3
|
|
|
70.1
|
|
Depreciation and
amortization
|
24.6
|
|
|
25.1
|
|
|
96.2
|
|
|
96.5
|
|
EBITDA
|
(211.2)
|
|
|
105.2
|
|
|
112.6
|
|
|
386.5
|
|
|
|
|
|
|
|
|
|
Impairment
charges
|
319.0
|
|
|
6.5
|
|
|
319.0
|
|
|
6.5
|
|
Spin costs
|
—
|
|
|
—
|
|
|
—
|
|
|
12.0
|
|
Restructuring and
related costs (2)
|
4.2
|
|
|
7.7
|
|
|
28.5
|
|
|
34.9
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Adjusted
EBITDA
|
$
|
112.0
|
|
|
$
|
119.4
|
|
|
$
|
460.1
|
|
|
$
|
440.1
|
|
|
|
(1)
|
Interest expense, net
for the quarter and year ended September 30, 2016 includes $1.4 and
$0.8, respectively, of net interest income recorded in relation to
settlements with tax authorities.
|
|
|
(2)
|
Excludes $0.5 and
$1.8 of accelerated depreciation for the quarter and year ended
September 30, 2017, respectively, and $1.7 and $3.9 for the quarter
and year ended September 30, 2016, respectively, which are included
within Depreciation and amortization.
|
Note 5 - Outlook
The following tables provide reconciliations of Adjusted EPS,
which is a Non-GAAP measure, included within the Company's outlook
for projected fiscal 2018 results:
Adjusted EPS
Outlook
|
|
|
Fiscal 2018 GAAP
EPS
|
|
$4.00 -
$4.20
|
|
|
|
Gain on sale of
Playtex Gloves business
|
approx.
|
$0.29
|
Income
taxes
|
approx.
|
$(0.09)
|
|
|
|
Fiscal 2018 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 2017 and the fourth quarter of fiscal 2016 are
presented below.
|
Q4
2017
|
|
Days
(1)
|
|
Q3
2017
|
|
Days
(1)
|
|
Q4
2016
|
|
Days
(1)
|
Receivables, as
reported
|
$
|
269.1
|
|
|
|
|
$
|
278.2
|
|
|
|
|
$
|
275.2
|
|
|
|
Less: Trade allowance
in accrued liabilities (2)
|
(26.0)
|
|
|
|
|
(27.3)
|
|
|
|
|
(28.1)
|
|
|
|
Receivables,
adjusted
|
243.1
|
|
|
39
|
|
|
250.9
|
|
|
39
|
|
|
247.1
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories, as
reported
|
346.1
|
|
|
108
|
|
|
339.4
|
|
|
105
|
|
|
345.3
|
|
|
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable, as
reported
|
218.4
|
|
|
68
|
|
|
211.6
|
|
|
66
|
|
|
211.4
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average adjusted
working capital (3)
|
$
|
370.8
|
|
|
|
|
$
|
378.7
|
|
|
|
|
$
|
381.0
|
|
|
|
% of net sales
(4)
|
16.1
|
%
|
|
|
|
16.2
|
%
|
|
|
|
16.1
|
%
|
|
|
|
|
(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.
|
|
|
(2)
|
Trade allowances are
recorded as a reduction of net sales per GAAP and reported in
accrued expenses on the Condensed Consolidated Balance
Sheets.
|
|
|
(3)
|
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, 2017, June 30, 2017 and September 30, 2016,
respectively.
|
|
|
(4)
|
Average adjusted
working capital divided by trailing four-quarter net
sales.
|
Note 7 - Sale of Playtex Gloves Business
The sale of the Playtex Gloves business was completed in
October 2017. The historical results
of the Playtex Gloves business are included in the consolidated
statements of earnings through September
30, 2017. Reflected below are the net sales and
segment profit for the Playtex Gloves business. The Playtex Gloves
business is included in the Sun and Skin Care Segment through the
date of sale.
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
Gloves - Net
Sales
|
Fiscal
2017
|
$4.1
|
$3.8
|
3.5
|
3.3
|
$14.7
|
Gloves - Segment
Profit
|
Fiscal
2017
|
$1.2
|
$1.3
|
1.1
|
0.7
|
$4.3
|
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SOURCE Edgewell Personal Care Company