Enterprising Investor
3 years ago
Energizer Holdings Inc. Announces Entry Into $75 Million Accelerated Share Repurchase Program (8/11/21)
ST. LOUIS, Aug. 11, 2021 /PRNewswire/ -- Energizer Holdings Inc. (NYSE: ENR) (the "Company") announced today it has entered into an agreement to repurchase an aggregate of $75 million of its common stock in an accelerated share repurchase ("ASR") program with JPMorgan Chase, National Association ("JPM"). This equates to approximately 1.9 million shares, at the closing price on August 10, 2021, and represents approximately 2.6% of Energizer's fully diluted outstanding stock(1). The Company is expected to fund the ASR program using available cash on hand and revolver borrowings. The Company will repurchase shares under the ASR Program as part of its existing 7.5 million share repurchase authorization, which was approved by its Board of Directors in November 2020.
"This accelerated share repurchase transaction is an important component of our capital allocation strategy," said Mark Lavigne, Chief Executive Officer. "The program demonstrates our confidence in Energizer's strategy and future growth prospects and underscores our commitment to deliver value to our shareholders."
Under the terms of the ASR agreement, dated August 11, 2021, Energizer will make an initial payment of $75 million to JPM and receive an initial delivery of approximately 1.5 million shares of Energizer's common stock. The final number of shares to be repurchased under the ASR program will be based on the average of the daily volume-weighted average prices of Energizer's common stock during the repurchase period, less a discount, and is subject to adjustments pursuant to the terms of the ASR agreement. The final settlement of the ASR program is expected to be completed before the end of the calendar year 2021.
Energizer expects to have ample financial capacity to sustain its balanced approach to capital allocation. This includes investments in its categories and brands to enhance growth and innovation and improve profitability, return capital to shareholders through dividends and opportunistic share repurchases, execute strategic M&A and pay down debt.
About Energizer:
Energizer Holdings Inc. (Energizer,NYSE: ENR), headquartered in St. Louis, is one of the world's largest manufacturers and distributors of primary batteries, portable lights, and auto care appearance, performance, refrigerant and fragrance products. Its portfolio of globally recognized brands includes Energizer®, Armor All®, Eveready®, Rayovac®, STP®, Varta®, A/C Pro®, Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL®, Eagle One®, Nu Finish®, Scratch Doctor® and Tuff Stuff®. As a global, branded consumer products company, Energizer's mission is to lead the charge to deliver value to its customers and consumers better than anyone else. Visit www.energizerholdings.com for more details.
https://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-entry-into-75-million-accelerated-share-repurchase-program-301352907.html
Enterprising Investor
5 years ago
Energizer Holdings, Inc. Announces Fiscal 2019 First Quarter Results (2/05/18)
- Positive organic net sales growth of 1.7% was fully offset by unfavorable currency headwinds which resulted in a decrease to reported net sales of 0.2% in the first fiscal quarter
- Diluted EPS was $1.16 in the first fiscal quarter compared to $0.98 in the prior year first quarter, and Adjusted Diluted EPS was $1.64 compared to $1.55 in the prior year first quarter
- Increasing full year Adjusted Diluted EPS outlook to $3.45 to $3.55
- Completed the Spectrum Brands' Battery and Portable Lighting and Global Auto Care Acquisitions
ST. LOUIS, Feb. 5, 2019 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced results for the first fiscal quarter, which ended December 31, 2018. For the first fiscal quarter, net earnings were $70.8 million, or $1.16 per diluted share, compared to $60.4 million, or $0.98 per diluted share, in the prior year first quarter. Adjusted net earnings in the first quarter were $100.2 million, or $1.64 per diluted share, compared to adjusted net earnings of $95.5 million, or $1.55 per diluted share, in the prior year first quarter.
"As we continued to focus on our strategic initiatives, we delivered strong operating results driven by organic top line growth and cost savings from our continuous improvement efforts," said Alan Hoskins, Chief Executive Officer. "These strong results will allow us to continue to invest in our business for long term growth while delivering $3.45 to $3.55 per adjusted diluted share on our base business, an increase over our previous outlook."
"During January, we closed on both of our acquisitions: Spectrum's battery and portable lighting business and the auto care business. We are very excited about the strategic, operational and financial opportunities of both of these businesses. This is truly a transformative time in Energizer's history as we become the global leader in the portable power and automotive care categories."
First Quarter 2019 Financial Highlights (Unaudited)
The following is a summary of key first fiscal quarter results. All comparisons are with the first quarter of fiscal 2018 unless otherwise stated.
•Net sales were $571.9 million, a decrease of 0.2%: (a)
- Organic net sales increased $9.9 million, or 1.7%, due to category growth and distribution gains across both segments and the impact of the reclassification of licensing revenues, slightly offset by increased retailer promotion and unfavorable mix.
- The impact of the Nu Finish acquisition increased net sales by $1.0 million, or 0.2%;
- Our Argentina operations, deemed to be highly inflationary, had an unfavorable impact on net sales of $3.3 million, or 0.6%.
- Unfavorable movement in foreign currencies, excluding Argentina, resulted in decreased sales of $9.0 million, or 1.5%.
•Gross margin percentage was 48.2%, down 30 basis points from prior year driven by unfavorable movement in foreign currencies partially offset by lower production costs and the lapping of the investments made in continuous improvement initiatives in the prior year.
•A&P spending was 7.2% of net sales, an increase of 70 basis points, or $3.6 million, versus the prior year driven by the timing of media spending.
•SG&A spending, excluding acquisition and integration costs, as a percent of net sales was 15.0%, or $85.7 million, a decrease of $7.8 million versus the prior year driven by the benefit of our continuous improvement initiatives as well as lapping prior year investments in those initiatives. These benefits were partially offset by the licensing revenue reclassification to net sales. (a)
•Interest expense was $48.2 compared to $13.4 for the prior year comparative period. The current quarter expense included $32.4 of interest and ticking fees related to the Spectrum battery and portable lighting acquisition. Excluding the acquisition costs, the current year interest expense increased $2.4 driven by increased borrowings and increased rates on our variable debt outstanding. (a)
•Earnings before income tax was negatively impacted by the movement in foreign currencies by approximately $10 million, net of hedge impact. This includes $4 million from our Argentina operations.
•Income tax rate on a year to date basis was 21.3% as compared to 49.2% in the prior year. The current and prior year rate includes $1.5 million and $31.0 million respectively, for the one-time impact of the new U.S. tax legislation passed in December 2017. Excluding the impact of our Non-GAAP adjustments, the year to date tax rate was 20.8% as compared to 23.4% in the prior year. The decrease in the rate is driven by the new 21% statutory U.S. rate effective for all of fiscal year 2019 compared to the statutory rate of 24.5% in fiscal year 2018. (a)
•Diluted earnings per share for the quarter was $1.16 and Adjusted diluted earnings per share for the quarter was $1.64. (a)
•Net cash from operating activities on a year to date basis was $118.9 million and Adjusted free cash flow on a year to date basis was $150.9 million, or 26.4% of net sales. (a)
•Dividend payments in the quarter were approximately $19.8 million, or $0.30 per share.
(a) See Press Release attachments for additional information as well as the GAAP to Non-GAAP reconciliations.
[Tables deleted]
Total Net sales decreased 0.2%, or $1.4 million:
•Organic net sales were up 1.7%, or $9.9 million, in the first fiscal quarter due to the following items:
- Category growth and distribution gains across both segments contributed 2.1% to the organic increase;
- The impact of the reclassification of licensing revenues contributed 0.3%;
- Partially offsetting the above was increased retailer promotion and unfavorable mix of 0.7%.
•The Nu Finish acquisition positively impacted net sales by 0.2%, or $1.0 million.
•Our Argentina operations had an unfavorable impact on net sales of $3.3 million or 0.6%. Our pricing actions in the market could not fully overcome the negative inflationary impacts.
•Unfavorable currency impacts were $9.0 million, or 1.5%.
Total Segment profit in the first fiscal quarter decreased $1.6 million, or 0.9%. Excluding the unfavorable movement in foreign currencies of $7.1 million, impact of the Nu Finish acquisition of $0.5 million, and decline due to Argentina operations of $1.9 million, organic segment profit increased $6.9 million, or 4.0%, in the current fiscal quarter. The increase was driven by organic top-line growth in the quarter and the benefit of our continuous improvement initiatives as well as lapping prior year investments in those initiatives. These increases were partially offset by higher A&P spending in the current fiscal quarter due to timing of spending.
Refer to the Reconciliation of GAAP and Non-GAAP Financial Measures attached for further information on our above breakouts.
Financial Outlook for Fiscal Year 2019
The company is increasing its adjusted EPS outlook for the full fiscal year to $3.45 to $3.55 and has updated the assumptions below related to its financial outlook for fiscal year 2019. Our outlook includes the impact of our acquisition of Nu Finish, but does not contemplate the impact of the Spectrum Brands' battery and portable lighting and global auto care acquisitions, or the equity and debt issuances, completed in January 2019.
Our outlook for fiscal year 2019 will be updated after the second fiscal quarter to include these transactions.
Note that all comparisons are with the fiscal year ended September 30, 2018 unless otherwise stated.
Net Sales on a reported basis are expected to be up low single digits:
•Organic net sales are expected to be up low single digits;
•Nu Finish acquisition is expected to contribute 30 to 40 basis points of net sales growth;
•Argentina is now expected to be a headwind of 60 basis points due to the high inflation;
•Unfavorable movements in foreign currency, excluding Argentina, are now expected to negatively impact net sales by 1.5% to 2.0% based on current rates.
Gross margin rates, excluding acquisition and integration costs, are now expected to be down approximately 10 to 50 basis points to the prior year; a slight improvement to our prior outlook.
A&P spending is now expected to be at the midpoint of our long term outlook range of 6% to 7% of net sales.
SG&A, as a percent of net sales, excluding acquisition and integration costs, is expected to further decline on a year over year basis as we continue to recognize the benefits from our continuous improvement initiatives. It is now expected to be down 40 to 70 basis points.
Earnings before income taxes is now expected to be unfavorably impacted by foreign currency headwinds of roughly $30 to $35 million, net of hedge impacts, based on current rates, including $13 million associated with Argentina, which was deemed highly inflationary as of July 1, 2018.
Ex-unusual income tax rate is now expected to be in the range of 21% to 23% based on the current expected country mix of earnings and the additional guidance issued on the new tax law changes during the first fiscal quarter of 2019.
Adjusted Diluted earnings per share for the full fiscal year is now expected to be in the range of $3.45 to $3.55.
Capital spending is expected to be in the range of $30 to $35 million.
Adjusted Free cash flow is expected to be roughly flat reflecting the expected foreign currency headwinds and lapping the benefits of hurricanes and asset sales in fiscal year 2018 that are not expected to repeat.
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 fiscal quarter earnings and the updated financial outlook for fiscal 2019. All interested parties may access a live webcast of this conference call at www.energizerholdings.com, under "Investors" and "Events and Presentations" tabs or by using the following link:
https://www.webcaster4.com/Webcast/Page/1192/28997
For those unable to participate during the live webcast, a replay will be available on www.energizerholdings.com, under "Investors," "Events and Presentations," and "Past Events" tabs.
https://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-fiscal-2019-first-quarter-results-300789530.html
Enterprising Investor
6 years ago
Energizer Announces Agreement to Acquire the Nu Finish Brands (6/26/18)
ST. LOUIS, June 26, 2018 /PRNewswire/ -- Today, Energizer Holdings, Inc. (NYSE: ENR) ("Energizer") and Reed-Union Corporation ("Reed-Union") jointly announced the entry into an agreement for Energizer to acquire Reed-Union's automotive appearance business, including the Nu Finish Car Polish and Nu Finish Scratch Doctor brands.
Founded in Chicago, Illinois in 1929, Reed-Union has been a consumer products pioneer and innovator. Today, in its fourth generation of leadership, Reed-Union's auto appearance business has broad distribution across auto retail channels in the U.S., as well as sales into international markets such as Canada and Australia. The combination of product innovation and effective marketing campaigns have made Nu Finish and Scratch Doctor leading products in their categories.
"We are very excited about the combination of our auto appearance business with Reed-Union's industry leading appearance brands," said Alan Hoskins, Energizer's Chief Executive Officer. "Adding the strength of the Nu Finish and Scratch Doctor brands to our existing Lexol and Eagle One products expands our auto appearance portfolio and continues our strategy of building our auto care business, both organically and through acquisitions."
"The opportunity to combine the top-selling Nu Finish brand with Energizer's portfolio of automotive appearance products and global resources will greatly enhance our ability to grow Reed-Union's well-established brands," said Peter Goldman, president of Reed-Union. "We look forward to working together to expand our market penetration in order to serve and support the next generation of consumers."
Energizer intends to fund the acquisition through a combination of
existing cash and committed debt facilities.
Sawaya Partners, LLC, a leading consumer investment banking firm, acted as exclusive financial advisor to Energizer on this transaction.
About Energizer Holdings, Inc.
Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, MO, is one of the world's largest manufacturers of primary batteries and portable lighting products and is anchored by its two globally recognized brands Energizer® and EVEREADY®. Energizer is also a leading designer and marketer of automotive fragrance and appearance products from recognized brands such as Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®. As a global branded distributor of consumer products, our mission is to lead the charge to deliver value to our customers and consumers better than anyone else. Visit www.energizerholdings.com for more details.
https://www.prnewswire.com/news-releases/energizer-announces-agreement-to-acquire-the-nu-finish-brands-300671994.html
Enterprising Investor
6 years ago
Energizer Holdings, Inc. and Spectrum Brands Holdings, Inc. Announce Intention to File for Merger Review with the European Commission Regarding Energizer's Proposed Acquisition of Spectrum Brands' Battery and Portable Lighting Business (6/07/18)
ST. LOUIS and MIDDLETON, Wis., June 7, 2018 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) ("Energizer") and Spectrum Brands Holdings, Inc. (NYSE: SPB) ("Spectrum Brands") today announced they intend to file for merger review with the European Commission regarding Energizer's proposed acquisition of Spectrum Brands' Battery and Portable Lighting Business.
Energizer and Spectrum Brands are working with the Commission, as well as other regulators around the world, to obtain the necessary approvals to complete the transaction. Both parties continue to expect the transaction to close in the second half of calendar 2018.
About Energizer Holdings, Inc.
Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, MO, is one of the world's largest manufacturers of primary batteries and portable lighting products and is anchored by its two globally recognized brands Energizer® and Eveready®. Energizer is also a leading designer and marketer of automotive fragrance and appearance products from recognized brands such as Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®. As a global branded distributor of consumer products, our mission is to lead the charge to deliver value to our customers and consumers better than anyone else. Visit www.energizerholdings.com for more details.
About Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings, a member of the Russell 1000 Index, is a global and diversified consumer products company and a leading supplier of consumer batteries, residential locksets, residential builders' hardware, plumbing, shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn and garden and home pest control products, personal insect repellents, and auto care products. Helping to meet the needs of consumers worldwide, our Company offers a broad portfolio of market-leading, well-known and widely trusted brands including Rayovac®, VARTA®, Kwikset®, Weiser®, Baldwin®, National Hardware®, Pfister®, Remington®, George Foreman®, Black + Decker®, Tetra®, Marineland®, Nature's Miracle®, Dingo®, 8-in-1®, FURminator®, IAMS® and Eukanuba® (Europe only), Healthy-Hide®, Digest-eeze™, Littermaid®, Spectracide®, Cutter®, Repel®, Hot Shot®, Black Flag®, Liquid Fence®, Armor All®, STP® and A/C PRO®. Spectrum Brands' products are sold in approximately 160 countries. In fiscal 2017, Spectrum Brands Holdings generated net sales from continuing operations of approximately $3.0 billion. For more information, visit www.spectrumbrands.com.
https://www.prnewswire.com/news-releases/energizer-holdings-inc-and-spectrum-brands-holdings-inc-announce-intention-to-file-for-merger-review-with-the-european-commission-regarding-energizers-proposed-acquisition-of-spectrum-brands-battery-and-portable-lighting-bus-300661898.html
Enterprising Investor
6 years ago
Energizer Holdings, Inc. And Spectrum Brands Holdings Announce Expiration Of Hart-Scott-Rodino Waiting Period For The Acquisition Of Spectrum Brands' Battery And Portable Lighting Products Business (3/29/18)
ST. LOUIS and MIDDLETON, Wis., March 29, 2018 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) ("Energizer") and Spectrum Brands Holdings, Inc. (NYSE: SPB) ("Spectrum Brands") today announced that the Federal Trade Commission has allowed expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act"), with respect to the previously announced acquisition by Energizer of Spectrum Brands' battery and lighting products business.
"We look forward to closing the acquisition of Spectrum Brands' battery and lighting products business and welcoming their global team into the Energizer family," said Alan Hoskins, Chief Executive Officer, Energizer Holdings, Inc. "The combination will expand our presence in a number of international markets, broaden our product portfolio and manufacturing capabilities, and increase our ability to bring innovative new products to consumers."
"We are pleased to achieve this milestone and take a significant step toward completing our transaction with Energizer. Once the transaction closes, Energizer will be well positioned to deliver the necessary resources and market expertise, and provide strong support for our people and the business' future growth plans. For Spectrum Brands, we are continuing to execute our strategic plan to becoming a faster-growing and higher-margin company," said David Maura, Executive Chairman of Spectrum Brands Holdings.
The expiration of the waiting period under the HSR Act satisfies one of the closing conditions of the pending transaction. The transaction remains subject to other customary closing conditions, including regulatory approvals in several jurisdictions outside the United States. Both parties expect the transaction to close in the second half of calendar 2018.
King & Spalding LLP served as counsel for Energizer with Norman Armstrong, Jr. as lead antitrust counsel. Kirkland & Ellis LLP served as counsel for Spectrum with Matthew Reilly as lead antitrust counsel.
About Energizer Holdings, Inc.
Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, MO, is one of the world's largest manufacturers of primary batteries and portable lighting products and is anchored by its two globally recognized brands Energizer® and Eveready®. Energizer is also a leading designer and marketer of automotive fragrance and appearance products from recognized brands such as Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®. As a global branded distributor of consumer products, our mission is to lead the charge to deliver value to our customers and consumers better than anyone else. Visit www.energizerholdings.com for more details.
About Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings, a member of the Russell 1000 Index, is a global and diversified consumer products company and a leading supplier of consumer batteries, residential locksets, residential builders' hardware, plumbing, shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn and garden and home pest control products, personal insect repellents, and auto care products. Helping to meet the needs of consumers worldwide, our Company offers a broad portfolio of market-leading, well-known and widely trusted brands including Rayovac®, VARTA®, Kwikset®, Weiser®, Baldwin®, National Hardware®, Pfister®, Remington®, George Foreman®, Black + Decker®, Tetra®, Marineland®, Nature's Miracle®, Dingo®, 8-in-1®, FURminator®, IAMS® and Eukanuba® (Europe only), Healthy-Hide®, Digest-eeze™, Littermaid®, Spectracide®, Cutter®, Repel®, Hot Shot®, Black Flag®, Liquid Fence®, Armor All®, STP® and A/C PRO®. Spectrum Brands' products are sold in approximately 160 countries. In fiscal 2017, Spectrum Brands Holdings generated net sales from continuing operations of approximately $3.0 billion. For more information, visit www.spectrumbrands.com.
https://www.prnewswire.com/news-releases/energizer-holdings-inc-and-spectrum-brands-holdings-announce-expiration-of-hart-scott-rodino-waiting-period-for-the-acquisition-of-spectrum-brands-battery-and-portable-lighting-products-business-300621225.html
Enterprising Investor
6 years ago
Spectrum Brands Holdings Announces Agreement to Sell Global Battery and Lighting Business to Energizer Holdings, Inc. for $2.0 Billion in Cash
Transaction Represents Significant Step in Strategy to Reshape Spectrum Brands into Faster-Growing, Higher-Margin, More Focused Consumer Brands Company
MIDDLETON, Wis.--(BUSINESS WIRE)--Spectrum Brands Holdings, Inc. (NYSE: SPB) (“Spectrum Brands”), a global consumer products company offering a portfolio of leading brands providing superior value to consumers and customers every day, announced today that it has entered into a definitive agreement to sell its Global Battery and Lighting Business (“Battery Business”) to Energizer Holdings, Inc. (NYSE: ENR) (“Energizer”) for $2.0 billion in cash. The Company expects to use the net cash proceeds after tax and transaction costs to reduce debt, reinvest in its core businesses both organically and through bolt-on acquisitions, and repurchase shares.
“Today’s announcement is a culmination of our efforts to sell the Battery Business in order to refocus Spectrum Brands and enhance shareholder value. While we have a long and proud heritage in the Battery Business, this is a key part of our re-allocation of capital strategy towards a faster-growing and higher-margin Spectrum Brands,” said David Maura, Executive Chairman of Spectrum Brands Holdings.
Andreas Rouvé, Chief Executive Officer of Spectrum Brands Holdings, said, “Through this transaction, we are making progress towards repositioning ourselves with an increased focus on our remaining businesses of Hardware & Home Improvement, Global Auto Care and Pet, Home & Garden. We are focusing our portfolio to strengthen our business and drive long-term growth and shareholder value.
"Our Global Battery Business is a true reflection of Spectrum Brands’ strengths – a portfolio of well-known and widely trusted brands driven by a culture of innovation and by passionate people to generate consistent results,” Mr. Rouvé added. “We are pleased to be selling to owners who can deliver the necessary resources and market expertise, and provide strong support for our people and the business’ future growth plans.”
The transaction is expected to close prior to the end of calendar 2018, subject to customary closing conditions, including regulatory approvals.
Spectrum Brands had previously announced on January 3, 2018 that it was exploring strategic alternatives for its Global Batteries & Appliances (GBA) businesses. Spectrum Brands is actively marketing its Appliances business. No assurance can be given that any transaction will result from these efforts. The Company does not intend to comment on or provide updates regarding the exploration of strategic options unless and until it determines that further disclosure is appropriate or required based on the then-current facts and circumstances.
RBC Capital Markets acted as exclusive financial advisor and Kirkland & Ellis LLP acted as legal advisor to Spectrum Brands in connection with the transaction.
About Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings, a member of the Russell 1000 Index, is a global and diversified consumer products company and a leading supplier of consumer batteries, residential locksets, residential builders’ hardware, plumbing, shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn and garden and home pest control products, personal insect repellents, and auto care products. Helping to meet the needs of consumers worldwide, our Company offers a broad portfolio of market-leading, well-known and widely trusted brands including Rayovac®, VARTA®, Kwikset®, Weiser®, Baldwin®, National Hardware®, Pfister®, Remington®, George Foreman®, Black + Decker®, Tetra®, Marineland®, Nature’s Miracle®, Dingo®, 8-in-1®, FURminator®, IAMS® and Eukanuba® (Europe only), Healthy-Hide®, Digest-eeze™, Littermaid®, Spectracide®, Cutter®, Repel®, Hot Shot®, Black Flag®, Liquid Fence®, Armor All®, STP® and A/C PRO®. Spectrum Brands' products are sold in approximately 160 countries. Spectrum Brands Holdings generated net sales of approximately $5.01 billion in fiscal 2017. For more information, visit www.spectrumbrands.com.
https://www.businesswire.com/news/home/20180116005594/en/Spectrum-Brands-Holdings-Announces-Agreement-Sell-Global
Enterprising Investor
6 years ago
Energizer Holdings, Inc. Announces Agreement To Acquire Spectrum Brands Holdings' Global Battery And Portable Lighting Business (1/16/18)
- Adds Well Recognized Varta® and Rayovac® Brands to Energizer's Portfolio
- Improves Our Competiveness Globally through Addition of Complementary Geographies in Europe and Latin America
- Accretive to Adjusted Earnings per Share and Free Cash Flow in the First Full Fiscal Year, Excluding One-Time Transaction and Integration Costs
ST. LOUIS, Jan. 16, 2018 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced that it has entered into a definitive agreement to acquire Spectrum Brands' (NYSE: SPB) Global Battery and Portable Lighting Business ("Spectrum Batteries") for $2.0 billion in cash. Anchored by the Varta® and Rayovac® brands, the portfolio has a longstanding history, global footprint and diversified range of products including alkaline, carbon zinc, hearing aid and nickel metal hydride rechargeable batteries as well as battery chargers and portable lighting products.
The combination will expand Energizer's presence in a number of international markets, broaden Energizer's product portfolio and manufacturing capabilities, and increase capacity for research and development. This will enable consumers to benefit from accelerated innovation and a wider range of products, and provide the opportunity to drive cost efficiencies to enhance the Company's ability to compete in the category.
Spectrum Batteries generated 2017 revenue and EBITDA of $866 million and $169 million, respectively. The acquisition price represents a transaction multiple of 7.5 times Fiscal 2017 EBITDA, net of tax benefits with a net present value of approximately $100 million and including estimated run-rate synergies of $80 to $100 million and the costs to achieve. The transaction is expected to deliver modest accretion to Energizer's adjusted earnings per share and free cash flow in the first year, excluding one-time transaction and integration costs, and will achieve additional favorable accretive impacts following our realization of targeted synergies.
"The acquisition of Spectrum Batteries represents a compelling strategic, operational, and financial fit for Energizer," said Alan R. Hoskins, Chief Executive Officer of Energizer. "The combination will enable us to leverage Spectrum Brands' manufacturing assets, significantly expand our international business and enhance our long-term brand building capabilities as we broaden our portfolio with the Varta and Rayovac brands and our geographies with Spectrum Batteries' passionate global colleagues. We have great respect for Spectrum Batteries and the strong business its colleagues have built, and are excited to bring together the talented colleagues from around the globe from both organizations to drive our business to new heights. In addition, the top-line and free cash flow growth from this acquisition, combined with the opportunity to realize meaningful synergies, will further enhance our ability to drive long-term shareholder value."
Energizer intends to fund the acquisition through a combination of existing cash and committed debt facilities, expected to consist of a new term loan and senior notes. In addition, Energizer intends to maintain its existing senior notes, maturing in 2025.
The transaction is subject to customary closing conditions, including regulatory approvals. The acquisition is expected to close prior to the end of calendar 2018.
Barclays acted as exclusive financial advisor and King & Spalding acted as legal counsel to Energizer on the transaction. Barclays and J.P. Morgan have committed to provide financing for the transaction.
Conference Call and Webcast Information:
In conjunction with this announcement, Energizer will hold an investor conference call and webcast beginning at 8:30 a.m. eastern time today to discuss the transaction. The call may be accessed by dialing 1-844-492-3730 about 10 minutes before the start of the call. International callers may dial 1-412-542-4197. Please ask to join Energizer Holdings, Inc.'s call. A slide presentation will accompany the call and can be accessed from the Investors section of the Company's website, www.energizerholdings.com, under "Investors" and "Events and Presentations" tabs. In addition, the call will be webcast on www.energizerholdings.com and can be accessed via the following link:
https://www.webcaster4.com/Webcast/Page/1192/24184
https://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-agreement-to-acquire-spectrum-brands-holdings-global-battery-and-portable-lighting-business-300582783.html
Enterprising Investor
7 years ago
Energizer Holdings, Inc. Declares Dividend For First Quarter Of Fiscal 2017 (11/14/16)
ST. LOUIS, Nov. 14, 2016 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) announced that its Board of Directors has declared a dividend for the first quarter of its fiscal 2017 of $0.275 per share of Common Stock, payable on December 15, 2016 to all shareholders of record as of the close of business on November 30, 2016.
About Energizer Holdings, Inc.
Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, MO, is one of the world's largest manufacturers of primary batteries and portable lighting products and is anchored by its two globally recognized brands Energizer® and Eveready®. Energizer is also a leading designer and marketer of automotive fragrance and appearance products from recognized brands such as Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®. As a global branded distributor of consumer products, our mission is to lead the charge to deliver value to our customers and consumers better than anyone else. Visit www.energizerholdings.com for more details.
http://www.prnewswire.com/news-releases/energizer-holdings-inc-declares-dividend-for-first-quarter-of-fiscal-2017-300361751.html
Enterprising Investor
7 years ago
Energizer Holdings, Inc. Announces Fiscal 2016 Fourth Quarter and Full Year Results and Provides Financial Outlook for the Fiscal Year 2017 (11/09/16)
- Reported net sales increased 8.3% in the fourth fiscal quarter versus prior year due to increased organic net sales of 1.7% and the HandStands acquisition which contributed $32.3 million
- Diluted EPS was $0.34 in the fourth fiscal quarter compared to $0.37 in the prior year fourth quarter, and Adjusted Diluted EPS was $0.54 compared to $0.61 in the prior year fourth quarter
- HandStands results were included in the full fourth quarter and were accretive to EPS by $0.05 per share, excluding acquisition and integration costs and inventory step up charges of $11.4 million, net of tax
ST. LOUIS, Nov. 9, 2016 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced results for the fourth fiscal quarter and full fiscal year, which ended September 30, 2016. For the fourth fiscal quarter, net earnings were $21.6 million, or $0.34 per diluted share, compared to net earnings of $23.1 million, or $0.37 per diluted share, in the prior year fourth quarter. Adjusted net earnings in the fourth quarter were $33.7 million, or $0.54 per diluted share, compared to adjusted net earnings of $38.5 million, or $0.61 per diluted share.
For the year, the Company reported net earnings of $127.7 million, or $2.04 per diluted share, compared with a net loss of $4.0 million, or a loss of $0.06 per diluted share, in the prior year. Adjusted net earnings for the current fiscal year were $144.6 million, or $2.31 per diluted share, compared to $177.3 million in the prior fiscal year, or $2.82 per diluted share.
"Fiscal 2016 was a strong year for Energizer," said Alan Hoskins, Chief Executive Officer. "The combination of organic sales growth, a relentless focus on costs and effective working capital management resulted in a solid financial performance in our first full fiscal year as a stand alone company. This allowed us to reinvest in our business, return capital to shareholders through dividends and share repurchase and, on July 1, complete our first acquisition. We believe that we have created a foundation for continued success and we remain focused on delivering value for our shareholders."
Fourth Fiscal Quarter Financial Highlights (Unaudited)
The following is a summary of key fourth fiscal quarter results. All comparisons are with the fourth quarter of fiscal 2015 unless otherwise stated.
•Net sales were $432.4 million, up 8.3%: (a) ?Organic net sales increased 1.7%, due primarily to net distribution and space gains, pricing actions and timing of holiday shipments. These items were partially offset by the expected reduction in retail inventory levels.
-- Impact of the HandStands acquisition resulted in increased sales of $32.3 million, or 8.1%.
-- These items were partially offset by the impact of unfavorable movement in foreign currencies of $5.6 million, or 1.5%.
•Gross margin percentage was 43.3%, down 260 basis points from the prior year. Excluding the impact from the one-time accounting adjustment ($8.1 million) related to the fair market value step up of HandStands acquired inventory and prior year restructuring, spin and integration related charges ($2.8 million), gross margin percentage was 45.2%, or 140 basis points below prior year. This change was driven in part by a 60 basis point impact due to an unfavorable movement in currencies and increased costs as a result of the continued impact from investments in product innovation. (a)
•A&P spending was 7.3% of sales, a decrease of 100 basis points, or $1.9 million, due to higher prior year spending related to the EcoAdvanced product launch.
•SG&A spending, excluding acquisition and integration costs and spin costs, was approximately $92.8 million, or 21.5% compared to $89.1 million, or 22.3% in the prior year. The higher absolute dollar value was due in part to $3.9 million of additional SG&A related to HandStands operations in the current fourth quarter. The improved percentage comparison versus the prior year quarter reflects the improved top-line performance due to organic sales growth and incremental sales from the HandStands acquisition. (a)
•Spin-off and spin restructuring related charges were $4.6 million in the fourth fiscal quarter.
•Acquisition and integration costs associated with the HandStands acquisition were $7.1 million in the fourth fiscal quarter.
•Earnings before income taxes was negatively impacted by the movement in foreign currencies by approximately $6 million in the fourth fiscal quarter, net of hedge impact.
•Adjusted EBITDA was $76.3 million in the quarter. (a)
•Dividend payments in the quarter were approximately $15.5 million, or $0.25 per share.
•Repurchased approximately 233,000 shares of common stock during the fourth quarter for $10.8 million.
(a) See Press Release attachments for additional information as well as the GAAP to Non-GAAP reconciliations.
Fiscal 2016 Full Year Financial Highlights (Unaudited)
The following is a summary of key fiscal 2016 full year results. All comparisons are with fiscal 2015 unless otherwise stated.
•Net sales were $1,634.2 million, up 0.2%: (a) ?Organic net sales increased 3.7%, reflecting net distribution and space gains, pricing actions and timing of holiday shipments. These gains were partially offset by the heightened competitive activity in certain Asia developed markets.
-- Impact of the HandStands acquisition resulted in increased sales of $32.3 million, or 2.0%.
-- These items were partially offset by the impact of unfavorable movement in foreign currencies of $66.9 million, or 4.1%, the unfavorable impact of the deconsolidation of Venezuela of $8.5 million, or 0.5%, and the unfavorable impact of the international go-to-market changes of $14.7 million, or 0.9%.
•Gross margin percentage was 43.6%, down 270 basis points from the prior year. Excluding the impact from the one-time accounting adjustment ($8.1 million) related to the fair market value step up of HandStands acquired inventory and restructuring, spin and integration charges ($2.8 million in fiscal 2016 and $3.9 million in fiscal 2015), gross margin percentage was 44.3% or 230 basis points below prior year. This change was driven by a 180 basis point impact due to an unfavorable movement in currencies, increased costs related to planned as well as accelerated discrete productivity initiatives and increased costs in support of product innovation. (a)
•A&P spending was 6.3% of sales, a decrease of 180 basis points, or $29.9 million, due to higher prior year spending related to the EcoAdvanced product launch.
•SG&A spending, excluding restructuring, acquisition and integration costs and spin costs, was approximately $332.6 million, or 20.4% compared to $327.1 million, or 20.0% in the prior year. (a)
•Spin-off and spin restructuring related charges were $16.2 million in fiscal 2016.
•Restructuring related charges were $4.9 million in fiscal 2016.
•Earnings before income taxes was negatively impacted by the movement in foreign currencies by approximately $52 million, net of hedge impact.
•Income tax rate on a year to date basis was 22.9% due to the favorable impacts of certain return to provision adjustments related to prior year provision estimates and certain spin related adjustments of approximately $11.4 million. Excluding the impact of all of our Non-GAAP adjustments, the effective tax rate on a full year basis was 29.8%. (a)
•Adjusted EBITDA was $313.9 million. (a)
•Net cash from operating activities was $193.9 million and Free Cash Flow was $166.7 million. (a)
•Dividend payments were $62.7 million, or $1.00 per share.
•Repurchased approximately 833,000 shares of common stock for $32.6 million. (b)
(a) See Press Release attachments for additional information as well as the GAAP to Non-GAAP reconciliations.
(b) Share repurchases include $0.8 million that was cash settled in fiscal 2017.
[tables deleted]
Total net sales in the fourth fiscal quarter increased 8.3%, or $33.3 million, driven in part by the impact of the HandStands acquisition on July 1, 2016, which contributed net sales of $32.3 million. Organic net sales increased 1.7% in the quarter due to net distribution and space gains, pricing actions in certain markets and timing of holiday shipments. These items were partially offset by the anticipated reduction in retail inventory levels. These increases were partially offset by unfavorable foreign currency movements of $5.6 million, or 1.5%.
Total Segment Profit in the fourth fiscal quarter increased $8.8 million, or 9.3%, driven primarily by the impact of the HandStands acquisition, which contributed an additional $9.5 million to segment profit. These increases were partially offset by an unfavorable currency impact of $3.5 million, or 3.6%. Organic growth of $2.8 million, or 2.9%, was driven primarily by the organic top-line increase explained above.
Financial Outlook Assumptions for Fiscal Year 2017
The Company is providing the below assumptions related to its financial outlook for the fiscal year 2017. All comparisons are with the fiscal year ended September 30, 2016 unless otherwise stated.
•Net sales are expected to be up mid-single digits: ?Organic net sales are expected to be flat to up low-single digits;
-- The incremental impact of the HandStands acquisition is expected to increase net sales by 5% to 6%; and
-- Unfavorable movements in foreign currencies are expected to reduce net sales by 0.5% to 1.0%, based upon recent currency rates.
•Gross margin rates are expected to improve by 50 to 100 basis points, driven primarily by productivity initiatives.
•SG&A as a percent of net sales, excluding integration costs and other unusual items, is expected to improve 50 to 100 basis points and be in the range of 19 to 20 percent.
•Earnings before income taxes is expected to be negatively impacted by the movement in foreign currencies by $5 to $10 million, net of hedge impact, based upon recent currency rates.
•Income tax rate, excluding integration costs and other unusual items, is expected to be in the range of 30 to 31 percent.
•Adjusted EPS for the full fiscal year is expected to be in the range of $2.55 to $2.75, inclusive of approximately $0.15 to $0.20 from the recently acquired HandStands business.
•Capital spending is expected to be in the range of $30 to $35 million.
•Free Cash Flow is expected to exceed $180 million.
•Acquisition and integration costs are expected to be in the range of $5 to $10 million.
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 fourth quarter earnings and the financial outlook for fiscal 2017. All interested parties may access a live webcast of this conference call at www.energizerholdings.com, under "Investors" and "Events and Presentations" tabs or by using the following link:
https://www.webcaster4.com/Webcast/Page/1192/17830
http://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-fiscal-2016-fourth-quarter-and-full-year-results-and-provides-financial-outlook-for-the-fiscal-year-2017-300359538.html
Enterprising Investor
8 years ago
Energizer Holdings, Inc. Announces Fiscal 2016 Third Quarter Results and Updates Financial Outlook for Fiscal 2016 to include Acquisition Impact of HandStands Holding Corporation (8/03/16)
- Reported net sales declined 3.6% while organic net sales were up 1.2% in the third fiscal quarter versus the prior year
- Diluted EPS was $0.39 in the third fiscal quarter compared to a net loss per diluted share of $0.32 in the prior year third quarter, and Adjusted Diluted EPS was $0.32 compared to $0.64 in the prior year third quarter
- Increased Full Year Outlook to include fourth quarter acquisition impact of HandStands Holding Corporation(HandStands) - Adjusted EPS of $2.20 to $2.30
ST. LOUIS, Aug. 3, 2016 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced results for the third fiscal quarter, which ended June 30, 2016. For the third fiscal quarter, net earnings were $24.2 million, or $0.39 per diluted share, compared to a net loss of $19.6 million, or a loss of $0.32 per diluted share, in the prior year third quarter. Adjusted net earnings in the third quarter were $20.1 million, or $0.32 per diluted share, compared to adjusted net earnings of $40.1 million, or $0.64 per diluted share, in the prior year third quarter.
"Fiscal 2016 is shaping up to be a strong year as we build on the momentum from the first half of the year," said Alan Hoskins, Chief Executive Officer. "The battery category remains stable, and the underlying fundamentals of our business remain solid as we continue to achieve organic net sales growth in the current quarter. In addition, we closed our acquisition of HandStands on July 1. As a result, we are increasing our full year Fiscal 2016 outlook to $2.20 to $2.30 to reflect approximately $0.04 to $0.05 of accretion from the acquisition. With the strength of our existing business along with the HandStands acquisition, we are building a foundation to drive long-term shareholder value and deliver top-tier free cash flow performance."
Third Quarter Financial Highlights (Unaudited)
The following is a summary of key third fiscal quarter results. All comparisons are with the third quarter of fiscal 2015 unless otherwise stated.
Net sales were $361.0 million, a decrease of 3.6%: (a)
•Organic net sales increased 1.2% due primarily to the net impact of distribution and space gains in North America and distribution gains and pricing actions in Latin America. These items were partially offset by the anticipated reduction in retail inventory levels and continued heightened competitive activity in certain Asia Pacific Developed markets.
•The following items were offsetting amounts to the organic net sales increase:
Unfavorable currency impacts were $12.6 million, or 3.4%; and
International go-to-market changes, including the exit from certain markets and shift to distributors, resulted in a decline of $5.2 million, or 1.4%.
•Gross Margin percentage was 42.6%, down 300 basis points driven in part by an unfavorable movement in currencies. Excluding the impact from currency movements, gross margin percentage declined 150 basis points driven by increased costs in the quarter as a result of costs related to a planned productivity initiative ($5.0 million or 130 basis points) and increased costs in support of innovation launched across our portfolios partially offset by favorable commodity costs and other productivity savings. (a)
•A&P spending was 6.3% of net sales, a decrease of 310 basis points, or $12.3 million, due to higher prior year spending related to the EcoAdvanced product launch and the timing of current year advertising and promotional activities.
•SG&A spending, excluding acquisition and spin costs, was approximately $81 million on an absolute dollar basis, consistent with prior quarter levels. SG&A, excluding acquisition and spin costs, was 22.4% of net sales compared to 18.6% in the prior year. The higher percentage comparison versus the prior year quarter reflects the impact of a low prior year comparative (based on carve out financial data) and incremental investment spending and higher compensation related costs in the current year. (a)
•Spin-off and spin restructuring related charges were $2.8 million in the third fiscal quarter. (a)
•Pre-tax income was negatively impacted by the movement in foreign currencies by approximately $11 million in the third fiscal quarter and $45 million through the first nine months of the fiscal year.
•Income tax rate on a year to date basis was 23.8% due to the favorable impacts of certain return to provision adjustments related to prior year provision estimates and certain spin related adjustments of approximately $9 million. These favorable adjustments are included in the current quarter's results and were the primary driver of the $0.5 million tax benefit. Excluding the impact of all of our Non-GAAP adjustments, the effective tax rate on a year to date basis was 30.6%. (a)
•Adjusted EBITDA was $56.2 million. (a)
•Net cash from operating activities on a year to date basis was $141.9 million and Free Cash Flow on a year to date basis was $125.6 million, or 10.5% of net sales. (a)
•Dividend payments in the quarter were approximately $15.5 million, or $0.25 per share, and $46.4 million on a year to date basis, or $0.75 per share.
•Repurchased 600,000 shares of common stock on a year to date basis for $21.8 million. There were no shares repurchased during the current quarter.
(a) See Press Release attachments for additional information as well as the GAAP to Non-GAAP reconciliations.
Results for the third quarter and nine months ended June 30, 2015 are based on carve out financial data. Net sales, Gross profit, Advertising & promotion (A&P) and Research & development (R&D) spending are directly attributable to our business. However, certain Selling, general, and administrative expense (SG&A), Interest expense, Other financing items and Spin-off and Restructuring related charges were allocated from our former parent company, Edgewell, and not necessarily representative of Energizer's stand-alone results or expected future results as an independent company.
Results for the HandStands business are not included in the current quarter results as the acquisition occurred subsequent to the quarter end on July 1, 2016.
[tables deleted]
Total net sales decreased 3.6%, or $13.3 million, driven by the unfavorable movement in foreign currencies of 3.4% and the unfavorable impact of international go-to-market changes of 1.4%, including the exits and shifts to distributors in certain markets.
Organic net sales increased 1.2% in the quarter due primarily to the net impact of distribution and space gains in North America and distribution gains and pricing actions in Latin America. These items were partially offset by the anticipated reduction in retail inventory levels and continued heightened competitive activity in certain Asia Developed markets
Total Segment Profit in the third fiscal quarter declined 9.6%, or $7.9 million. Excluding the unfavorable movement in foreign currencies of $8.7 million and the unfavorable impact from go-to-market changes of $0.9 million, organic segment profit increased 2.1%, or $1.7 million, in the current fiscal quarter. The 2.1% increase was driven by the organic net sales growth, lower A&P spending due to the prior year EcoAdvanced product launch and the timing of current year advertising and promotional activities and favorable commodity and other products costs. These increases were slightly offset by higher costs in the quarter as a result of a planned productivity initiative ($5.0 million or 130 basis points) and increased costs in support of innovation across our portfolios, as well as higher SG&A driven by a low prior year comparative (based on carve out financial data) and incremental investment spending and higher compensation related costs incurred in the current year.
Financial Outlook for Fiscal Year 2016
The company expects Adjusted EPS for the full fiscal year to be in the range of $2.20 to $2.30, which includes a contribution from the recently acquired HandStands. We expect HandStands to contribute Adjusted EPS in the range of $0.04 to $0.05 during the fourth quarter. The Company is also providing the following assumptions related to the full year financial outlook for fiscal year 2016 associated with the existing base Energizer business unless noted otherwise:
Base Energizer business (exclusive of HandStands acquisition impact):
•Net Sales are expected to be down low single digits, consistent with the prior outlook: ?Organic net sales are expected to be up low-single digits, consistent with the prior outlook;
The negative impact of foreign currency movement is expected to reduce net sales by $60 to $70 million, consistent with the prior outlook;
International go-to-market changes are expected to reduce net sales in the low single digits, consistent with the prior outlook; and
Change in Venezuela results, due to the previously announced deconsolidation, will reduce net sales by $8.5 million, or 0.5%, consistent with the prior outlook.
•Gross Margin rates are expected to decline up to 250 basis points, consistent with the prior outlook, driven in part by unfavorable currency impacts, the impact from the Venezuela deconsolidation and costs of planned productivity initiatives and increased costs in support of innovation across our portfolios.
•SG&A as a percent of net sales, excluding integration and acquisition costs, spin related costs and restructuring costs, is expected to be in the low 20's, consistent with the prior outlook.
•Pre-tax income is expected to be negatively impacted due to the movement in foreign currencies by $50 to $60 million, consistent with the prior outlook.
•Income Tax Rate, excluding our Non-GAAP adjustments, is expected to be in the range of 29 to 30 percent, consistent with the prior outlook.
•Adjusted EBITDA is expected to be in the range of $280 million to $300 million, consistent with the prior outlook.
•Free Cash Flow is expected to exceed $150 million, consistent with the prior outlook.
•Spin and restructuring costs are now expected to be in the range of $17 to $20 million in fiscal year 2016.
HandStands acquisition outlook:
•Accretive to Adjusted EPS in the range of $0.04 to $0.05 for the fourth fiscal quarter of 2016.
•Total acquisition and integration related costs associated with the HandStands acquisition are expected to be in the range of $30 million to $35 million. We expect to incur these costs over the next 12 to 15 months. We expect to incur approximately $17 million to $19 million in the fourth fiscal quarter of 2016. ?Total acquisition related costs are estimated to be in the range of $8 million to $10 million;
Total integration related costs are estimated to be in the range of $14 million to $16 million; and
Non-cash inventory step-up accounting adjustment is estimated to be in the range of $8 million to $9 million.
All comparisons above are with the fiscal year ended September 30, 2015 (which are on a carve out basis through the first three quarters), unless otherwise stated. We will provide our outlook for fiscal year 2017 in conjunction with our fourth quarter earnings release.
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 third fiscal quarter earnings and the updated financial outlook for fiscal 2016. All interested parties may access a live webcast of this conference call at www.energizerholdings.com, under "Investors" and "Events and Presentations" tabs or by using the following link:
https://www.webcaster4.com/Webcast/Page/1192/16293
http://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-fiscal-2016-third-quarter-results-and-updates-financial-outlook-for-fiscal-2016-to-include-acquisition-impact-of-handstands-holding-corporation-300308202.html
Enterprising Investor
8 years ago
Energizer Holdings, Inc. Declares Dividend For Fourth Quarter Of Fiscal 2016 and Announces Plan For Dividend Increase For Fiscal 2017 (8/01/16)
ST. LOUIS, Aug. 1, 2016 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) announced that its Board of Directors has declared a dividend for the fourth quarter of its fiscal 2016 of $0.25 per share of Common Stock, payable on September 9, 2016 to all shareholders of record as of the close of business on August 19, 2016.
In addition, the Board of Directors announced their intention to increase the Company's regular quarterly dividend to $0.275 per share of Common Stock beginning in fiscal 2017. This represents a 10% increase over the current quarterly dividend of $0.25. Future declarations of dividends are subject to Board approval and may be adjusted at the discretion of the Board, as business needs or market conditions change.
"As we have consistently stated, our goal of delivering long-term shareholder value will be achieved through a balanced combination of reinvesting in our business, returning cash to shareholders through both dividends and share repurchases and adding to our portfolio through acquisitions," said Alan Hoskins, Chief Executive Officer. "This dividend increase is an important part of continuing to deliver long-term value to our shareholders."
About Energizer Holdings, Inc.
Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, MO, is one of the world's largest manufacturers of primary batteries and portable lighting products and is anchored by its two globally recognized brands Energizer® and EVEREADY®. As a global leader in power solutions, our mission is to lead the charge to connect our brands, our people and the products we offer to the world better than anyone else. Visit www.energizerholdings.com for more details.
http://www.prnewswire.com/news-releases/energizer-holdings-inc-declares-dividend-for-fourth-quarter-of-fiscal-2016-and-announces-plan-for-dividend-increase-for-fiscal-2017-300306962.html
Enterprising Investor
8 years ago
Energizer lawsuit over Duracell's pink bunny can keep going (5/24/16)
By Jonathan Stempel
Duracell has failed in its effort to dismiss a lawsuit claiming it violated Energizer Holdings Inc's (ENR.N) trademark rights by using a pink bunny on battery packages that closely resembled the sunglass-clad, drum-beating Energizer Bunny.
In a decision last week, U.S. District Judge Carol Jackson in St. Louis said Duracell, recently bought by Warren Buffett's Berkshire Hathaway Inc (BRKa.N), must face claims that its bunny confuses consumers and irreparably harms Energizer, which has used a bunny mascot since 1989.
Energizer said it has spent hundreds of millions of dollars using its bunny to market its batteries, using the slogan that both "keep going and going and going."
Duracell called Energizer's lawsuit a "thinly veiled" attempt to renegotiate a January 1992 agreement limiting Duracell's use of a bunny in U.S. and Canadian marketing.
It also said many Duracell batteries are made at lower cost in other countries, and that it was should not be liable if distributors send them lawfully to the United States, where a "Duracell Bunny" is incompatible with its branding strategy.
But in a May 18 decision, the judge said such assertions are not a "proper basis" for dismissing the three-month-old lawsuit, and that Energizer's trademark claims could succeed if Duracell had a close relationship with its distributors.
Jackson also dismissed claims against former Duracell parent Procter & Gamble Co (PG.N) and its Gillette unit, finding no sign they sold batteries or were involved in the 1992 agreement.
Gillette bought Duracell in 1996, and P&G bought Gillette in 2005.
A Duracell spokesman had no immediate comment on Tuesday. Energizer spokeswoman Jackie Burwitz said that company does not discuss current litigation.
Berkshire acquired Bethel, Connecticut-based Duracell on Feb. 29 in exchange for about $4.2 billion of P&G stock. It also assumed about $1.8 billion of cash.
Energizer has offices in Town and Country, Missouri, a St. Louis suburb. It separately announced on Tuesday that it agreed to buy HandStands Holding Corp, which makes car air fresheners, from private equity firm Trivest Partners for $340 million.
The case is Energizer Brands LLC v Procter & Gamble Co et al, U.S. District Court, Eastern District of Missouri, No. 16-00223.
http://www.reuters.com/article/us-duracell-lawsuit-energizer-idUSKCN0YF2F0
Enterprising Investor
8 years ago
Energizer Holdings, Inc. to Acquire HandStands Holding Corporation for $340 Million (5/24/16)
- Adds Leading Brands in Growing Automotive Fragrance and Appearance Categories, including Refresh Your Car!, California Scents, Driven, Bahama & Co., LEXOL and Eagle One
- Accretive to EBITDA Margins, Adjusted Earnings per Share and Free Cash Flow in the First Full Fiscal Year, Excluding One-Time Transaction and Integration Costs
- Provides Domestic and International Growth Potential by Leveraging Energizer's Global Battery Distribution Platform, Infrastructure and Supply Chain Network
- To be Ultimately Funded with Approximately $250 Million of Cash on Hand and Committed Debt Facilities
ST. LOUIS, May 24, 2016 /PRNewswire/ -- Energizer Holdings, Inc. ("Energizer") (NYSE: ENR) today announced that it has agreed to acquire HandStands Holding Corporation ("HandStands") from Trivest Partners for an aggregate cash purchase price of $340 million, subject to certain adjustments.
HandStands is a leading designer and marketer of automotive fragrance and appearance products. Inclusive of recent acquisitions, calendar year 2015 pro forma net sales were approximately $128 million, with approximately 80% in the U.S., and adjusted pro forma EBITDA was approximately $34 million. HandStands offers innovative products driven by deep consumer insights through well recognized brands such as Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®. This combination of innovative product offerings and strong category leadership has allowed HandStands to achieve consistent top-line growth in recent years and establish itself as one of the market leaders and a partner of choice for retailers in the U.S. automotive fragrance category.
"HandStands represents a compelling strategic, operational and cultural fit for Energizer," said Alan R. Hoskins, Chief Executive Officer of Energizer. "The HandStands business is complementary to our existing business with opportunities for growth. These two businesses have similar customers, distribution channels, category management characteristics and commitment to innovation. The acquisition allows us to leverage our global battery platform and integrated supply chain network, while providing top-line and free cash flow growth, which will further enhance our ability to drive long-term shareholder value."
Chris Anderson, Chief Executive Officer of HandStands, added: "This transaction represents an exciting milestone in HandStands' evolution. The ability to leverage Energizer's strong consumer insights, industry-leading innovation and global reach positions HandStands' brands for continued growth."
Energizer intends to ultimately fund the acquisition through a combination of approximately $250 million of existing cash and committed debt facilities. This transaction is expected to be leverage neutral to Energizer's projected levels of Debt to EBITDA by the first quarter of Fiscal 2017. Excluding one-time transaction and integration costs, earnings accretion from the transaction in the first full fiscal year following the close is estimated to be $0.15 to $0.20 per share and free cash flow is expected to increase by at least $20 million. In addition to revenue growth potential, Energizer anticipates cost synergies of approximately $5 million to be achieved by leveraging Energizer's global battery platform, infrastructure and supply chain network. These savings are projected to be achieved over a period of two years following the close of the acquisition.
The transaction is subject to customary closing conditions, including regulatory approvals. The acquisition is expected to close in the fourth fiscal quarter of 2016. Citi acted as exclusive financial advisor and Bryan Cave LLP acted as legal counsel to Energizer on the transaction. Sawaya Segalas & Co., LLC acted as exclusive financial advisor, and Greenberg Traurig, LLP acted as legal counsel to HandStands on this transaction.
Webcast Information:
In conjunction with this announcement, Energizer will hold an investor conference call beginning at 9:00 a.m. eastern time today to discuss the transaction. All interested parties may access a live webcast of this conference call at www.energizerholdings.com, under "Investors" and "Events and Presentations" tabs or by using the following link:
https://www.webcaster4.com/Webcast/Page/1192/15412
For those unable to participate during the live webcast, a replay will be available on www.energizerholdings.com, under "Investors," "Events and Presentations," and "Past Events" tabs.
About Energizer Holdings, Inc.:
Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, MO, is one of the world's largest manufacturers of primary batteries and portable lighting products and is anchored by its two globally recognized brands Energizer® and EVEREADY®. As a global leader in power solutions, our mission is to lead the charge to connect our brands, our people and the products we offer to the world better than anyone else. Visit www.energizerholdings.com for more details.
About Trivest Partners:
Trivest Partners is a private investment firm that focuses on partnering with founder/family owned businesses in the United States and Canada. Since its founding in 1981, Trivest has completed more than 225 transactions, totaling in excess of $5.5 billion in value. For additional information, please visit www.trivest.com.
http://www.prnewswire.com/news-releases/energizer-holdings-inc-to-acquire-handstands-holding-corporation-for-340-million-300273760.html
Enterprising Investor
8 years ago
Energizer Holdings, Inc. Announces Fiscal 2016 Second Quarter Results and Raises Financial Outlook for Fiscal 2016 (5/04/16)
- Reported net sales declined 6.4% while organic net sales were up 0.5%
- Diluted EPS was $0.26 compared to a net loss per diluted share of $1.11 in the prior year second quarter, and Adjusted Diluted EPS was $0.30 compared to $0.44 in the prior year second quarter
- Increased Full Year Outlook - Adjusted EPS of $2.15 to $2.25 and Adjusted EBITDA of $280 million to $300 million
- Full year free cash flow still expected to exceed $150 million
ST. LOUIS, May 4, 2016 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced results for the second fiscal quarter, which ended March 31, 2016. For the second fiscal quarter, net earnings were $16.4 million, or $0.26 per diluted share, compared to a net loss of $69.2 million, or a loss of $1.11 per diluted share, in the prior year second quarter. Adjusted net earnings in the second quarter were $18.5 million, or $0.30 per diluted share, compared to adjusted net earnings of $27.5 million, or $0.44 per diluted share, in the prior year second quarter.
"We achieved solid results in the second quarter adding to our momentum from the start of the year," said Alan Hoskins, Chief Executive Officer. "We continued to increase distribution in the U.S. and pricing in certain international markets. In addition, global category trends were stable. As a result of this strong performance in the first half of the year, improving foreign currency trends and a more favorable outlook on our effective tax rate, we are increasing our full year outlook for adjusted earnings per share in the range of $2.15 to $2.25. We remain focused on delivering results for the balance of the year and a top-tier cash flow performance, as well as investing in the long-term health of our business."
Second Quarter Financial Highlights (Unaudited)
The following is a summary of key second fiscal quarter results. All comparisons are with the second quarter of fiscal 2015 unless otherwise stated.
Net sales were $334.0 million, a decrease of 6.4%: (a)
• Organic net sales increased 0.5% due primarily to distribution and space gains and storm related volumes. These gains were partially offset by the lapping of the EcoAdvanced product launch in the prior year.
• The following items were offsetting amounts to the organic net sales increase: ?Unfavorable currency impacts were $15.5 million, or 4.3%;
? International go-to-market changes, including the exit from certain markets and shift to distributors, resulted in a decline of $3.9 million, or 1.1%; and
? Change in Venezuela results, due to the deconsolidation, resulted in a decline of $5.4 million, or 1.5%. This will be the last quarter of impact from the deconsolidation which occurred at the end of the prior year second quarter.
• Gross Margin percentage was 42.4%, down 480 basis points driven in part by unfavorable currencies, change in Venezuela results and international go-to-market changes. Excluding the impact from these items, gross margin percentage declined 220 basis points driven by higher costs in the quarter due to investments in product improvements and productivity initiatives partially offset by favorable commodity and other product costs. (a)
•A&P spending was 5.4% of net sales, a decrease of 290 basis points, or $11.4 million, due to higher prior year spending related to the EcoAdvanced launch and the timing of current year advertising and promotional activities.
•SG&A, excluding spin and restructuring costs, was 24.3% of net sales compared to 22.5% in the prior year. The higher percentage comparison versus the prior year quarter reflects the impact of lower reported net sales, incremental investment spending and the timing of overhead spend. (a)
•Restructuring related charges were $1.5 million in the second fiscal quarter. (a)
•Spin-off and spin restructuring related charges were $1.9 million in the second fiscal quarter. (a)
•Pretax income of $21.0 million compared to pre-tax loss of $71.7 million in the prior year quarter.
•Income tax rate on a year to date basis was 29.1% due to the favorable impacts from the country mix of earnings. This favorable change in tax rate is included in the current quarter's results, which is reflected in the disproportionately lower rate of 21.9% in the quarter.
•Net earnings per diluted share were $0.26.
•Adjusted net earnings per diluted share were $0.30 compared to $0.44 prior year second quarter. (a)
•Adjusted EBITDA was $51.4 million. (a)
•Net cash from operating activities on a year to date basis was $128.3 million and Free Cash Flow on a year to date basis was $114.8, or 13.7% of net sales. (a)
•Dividend payments in the quarter were approximately $15.5 million, or $0.25 per share, and $30.9 million on a year to date basis, or $0.50 per share.
•Repurchased 600,000 shares of common stock on a year to date basis for $21.8 million.
(a) See Press Release attachments for additional information as well as the GAAP to Non-GAAP reconciliations.
Results for the second quarter and six months ended March 31, 2015 are based on carve out financial data. Net sales, Gross profit, Advertising & promotion (A&P) and Research & development (R&D) spending are directly attributable to our business. However, certain Selling, general, and administrative expense (SG&A), Interest expense, Other financing items and Spin-off and Restructuring related charges were allocated from our former parent company, Edgewell, and not necessarily representative of Energizer's stand-alone results or expected future results as an independent company.
[tables deleted]
Total net sales decreased 6.4% or $22.9 million driven by the unfavorable impact in foreign currency of 4.3%, the change in Venezuela results of 1.5% (due to the Company's previously announced deconsolidation) and the impact of international go-to-market changes of 1.1%, including the exit and shift to distributors in certain markets.
Organic net sales increased 0.5% in the quarter as a result of the following items:
• Increase of approximately 3% related to distribution and space gains;
• Decrease of approximately 3% related to the lapping of the EcoAdvanced product launch in the prior year;
• Increase of approximately 0.5% primarily related to incremental storm volumes; and
• Flat price/mix impact as pricing declines due to heightened competitive activity in our Asia developed markets were offset by net pricing and mix gains in the rest of world.
Total Segment Profit in the second fiscal quarter declined 15.3%, or $12.4 million. Excluding the unfavorable movement in foreign currency of $10.4 million, the $2.0 million change in Venezuela results (due to the Company's previously announced deconsolidation) and the favorable $1.0 million net impact of go-to-market changes resulting from overhead reductions, organic segment profit declined 1.2% or $1.0 million in the current fiscal quarter. The 1.2% decline was driven primarily by lower gross margin as a result of higher costs in the quarter due to investments in product improvements and productivity initiatives partially offset by favorable commodity and other products costs.
Financial Outlook Projection for Fiscal Year 2016
As a result of the strong performance in the first half of the year, improved current foreign currency rates and a more favorable effective tax rate estimate, the company has increased its financial outlook for Adjusted EPS in the range of $2.15 to $2.25. The Company is also providing the following assumptions related to the full year financial outlook for fiscal year 2016:
• Net Sales are expected to be down low single digits: ?Organic net sales are expected to be up low-single digits;
? The negative impact of foreign currency movement is now expected to reduce net sales by $60 to $70 million, a slight improvement from our prior outlook;
? International go-to-market changes are expected to reduce net sales in the low single digits, consistent with the prior outlook; and
? Change in Venezuela results, due to the previously announced deconsolidation, will reduce net sales by $8.5 million, or 0.5%, consistent with the prior outlook.
• Gross Margin rates are expected to decline up to 250 basis points, consistent with the prior outlook, driven in part by unfavorable currency impacts, international go-to-market changes, the impact from the Venezuela deconsolidation and investments in product improvements and productivity initiatives.
• SG&A as a percent of net sales, excluding spin related and restructuring costs, is expected to be in the low 20's, consistent with the prior outlook.
• Pre-tax income is expected to be negatively impacted due to the movement in foreign currencies by $50 to $60 million, a slight improvement from our prior outlook.
• Income Tax Rate is now expected to be in the range of 29 to 30 percent, a slight improvement from our prior outlook.
• Adjusted EBITDA is now expected to be in the range of $280 to $300 million, a slight improvement from our prior outlook, reflecting the impact of improved current currency rates.
• Free Cash Flow is expected to exceed $150 million, consistent with the prior outlook.
• Spin and restructuring costs are now expected to be in the range of $15 to $20 million in fiscal year 2016.
All comparisons above are with the fiscal year ended September 30, 2015 (which was on a carve out basis through the first three quarters), unless otherwise stated.
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 second fiscal quarter earnings and the updated financial outlook for fiscal 2016. All interested parties may access a live webcast of this conference call at www.energizerholdings.com, under "Investors" and "Events and Presentations" tabs or by using the following link:
http://investors.energizerholdings.com/Energizer-Holdings-Inc-Second-Quarter-Fiscal-2016-Results
For those unable to participate during the live webcast, a replay will be available on www.energizerholdings.com, under "Investors," "Events and Presentations," and "Past Events" tabs.
http://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-fiscal-2016-second-quarter-results-and-raises-financial-outlook-for-fiscal-2016-300262344.html
Enterprising Investor
8 years ago
Spinoffs Are Slowing, but Value Plays Still Exist (4/30/16)
Investing in spinoffs has become a crowded trade, but Energizer and MSG are still attractive.
By Reshma Kapadia
Much like the little-known gem of a restaurant that loses some of its luster when the masses swoop in, spinoffs often lose their cachet when too many investors chase too many of them. But true foodies—and savvy investors—always know where to look for the next great find.
Since 1999, newly liberated companies outperformed the Standard & Poor’s 500 index by six percentage points in the first two years after they were spun off, according to Goldman Sachs. And over the past five years, the Bloomberg Spinoff Index has returned 103%, compared with 55% for the S&P 500. The index tracks, for three years, companies that launch with a market value of at least $1 billion.
Studies have attributed the superior performance of spinoffs to factors including investors’ greater appreciation of a business after it is no longer ensconced within a larger entity, plus the new company’s ability to be run more efficiently, get more dedicated resources, and more effectively incentivize management.
Enter the hordes. In 2014 and 2015, spinoffs surged, with 100 new companies launched, often as a result of pressure from activist investors. Spinoffs concocted under duress have a mixed—and occasionally horrible—track record. Shares of specialty-chemical firm Chemours (ticker: CC) are down 56% since DuPont (DD) spun it off last summer at the urging of Nelson Peltz’s Trian Fund Management.
“You don’t get the same quality of spinoffs as you do if management and the board have come to that decision without pressure,” says Ivy Mid Cap Growth fund’s manager Kim Scott, who often looks at spinoffs for potential investments.
That decline in quality is borne out in recent returns. Over the past year, as the S&P 500 has fallen 0.6%, the Bloomberg Spinoff Index has slid 6%. The 42-stock Guggenheim Spin-Off exchange-traded fund (CSD) has fared even worse, down 17%. Clearly, this isn’t a market for simple index investing.
Instead, investors must be choosy about picking the right type of spinoff, and at the right time. In the past, companies spun off unprofitable or marginally profitable businesses that investors essentially valued at nothing. It would take a few years to get a spinoff’s profitability up to the industry level once it was on its own. But as that happened, it would drive the stock higher, says Murray Stahl, chief investment officer of Horizon Kinetics. “You don’t see as many spinoffs like that now,” he observes. “You’ll have to wait for a recession, when companies lose customers, are saddled with debt, and profitability declines” to find a better crop to invest in.
With 2016 on track to be a lean year for spinoffs, timing becomes even more important. There have been just nine so far, putting the year on pace for 27, down from last year’s 40, according to Joe Cornell, founding principal of the advisory firm that publishes Spin-Off Research.
To do well, investors must get in earlier or wait several months after a spinoff is listed, when shareholders in the parent company dump the spinoff’s stock. Often a company that’s spun off is too small for institutional investors or in an industry they dislike. “Investors need to do a lot more homework than simply buying a basket of spinoffs, which might have worked in 2013 or 2014,” says Jonathan Morgan, deals analyst at Edge Consulting Group, which advises investors on spinoffs and special situations. “You really need good timing now.”
Spinoff stocks might trade higher in the when-issued market—a few days before the shares are distributed—often making them overvalued when they come out. In that case, be patient and wait for them to come back down.
ENERGIZER HOLDINGS (ENR) embodies traits that have typically led to outperformance by spinoffs. Energizer spun off its steady cash-generating battery business last July, giving the spinoff its old name. The parent entity retained its faster-growing businesses—including its Schick, Playtex, and Hawaiian Tropic brands—and renamed itself Edgewell Personal Care (EPC). Energizer’s shares have risen 25% since then, but Gabelli Asset fund manager Kevin Dreyer sees about 15% more upside
Dreyer expects margins to improve due to a shift in the competitive landscape. Berkshire Hathaway purchased rival Duracell in 2014. Under Procter & Gamble’s ownership, Duracell was often promotional, but Dreyer expects the new owners to run the business with an eye toward maximizing cash flow, which should mean fewer price wars. Analysts expect Energizer to earn $135 million, or $2.17 a share, this year, on sales of $1.6 billion.
Now that Madison Square Garden (MSG) is free from MSG Networks (MSGN), it can use the $1.6 billion on its balance sheet to grow via acquisitions or buy back shares. It could also monetize the air rights above its midtown Manhattan arena. In the interim, the company, which became independent in October, has stable and modestly growing cash flow from the sale of TV rights. Analysts expect net income of $28 million, or $1.13 a share, on $1.1 billion in revenue for the fiscal year that ends in June, with a 3% increase in profits on a 7.5% sales rise next year. The company could also be an attractive takeover target, says Cornell, who thinks the stock could rise 30%, to $210 from its current $160.
THE CLASSIC WAY to benefit from a spinoff, of course, is to buy shares of its parent company before the deal is done. Cornell suggests Fiesta Restaurant Group (FRGI), which plans to split off its slower-growing, but cash-generating, fast-casual restaurant Taco Cabana. Fiesta will change its name to Pollo Tropical, the faster-growing Caribbean chicken chain it will retain—a cult hit in South Florida that is expanding elsewhere. A date for the spinoff has not yet been announced.
Raymond James restaurant analyst Brian Vaccaro argues that Taco Cabana deserves a forward multiple of eight times earnings, in line with where Fiesta currently trades. Pollo Tropical, however, could fetch a multiple of 11 or more as it expands—last year’s sales growth was 19%, triple that of Taco Cabana’s. “I’ve always looked at [Fiesta] as a sum-of-the-parts story, because there is a big differential in the growth prospects of the two chains,” says Vaccaro, who thinks Fiesta stock is worth $45, versus its recent price of $34. “Now, more investors are beginning to look at it from that view.”
http://www.barrons.com/articles/spinoffs-are-slowing-but-value-plays-still-exist-1461990741
Enterprising Investor
9 years ago
Recharging the Energizer Bunny (7/18/15)
By jettisoning its consumer-products unit, Energizer Holdings should be able to focus on its core battery market, boosting margins and cutting costs.
By David Englander
When it was spun off from Ralston Purina in 2000, Energizer Holdings ’ focus was on batteries. That’s the case again. Early this month, Energizer split off its consumer products brands—Schick, Edge, and Hawaiian Tropic, to name a few—into a new company known as Edgewell Personal Care (ticker: EPC).
Energizer built up the consumer-products division over years of acquisitions, and that business gradually overtook batteries as its largest. The battery operations have long been thought of as the ugly duckling, but this column is intrigued by its stand-alone prospects.
At a recent $41.46, Energizer’s shares (ENR) have jumped 22% since the July 1 spinoff. But more gains could be ahead.
Disposable battery usage has declined, as smartphones and other electronic devices with built-in rechargeable batteries have depressed demand. Still, there are one billion devices in U.S. homes that use disposable batteries, including toys, flashlights, and remote controls. That isn’t going to change much anytime soon.
The industry has attractive attributes, especially the fact that it’s highly concentrated. Duracell, Energizer, and Spectrum Brands Holdings (SPB), the top players, have more than 80% of the market. This year, Berkshire Hathaway (BRK.A) will close on its $5 billion purchase of Duracell from Procter & Gamble (PG), and that could prompt a shift to more favorable industrywide pricing.
Energizer, whose ads long have featured a seemingly tireless bunny, has an opportunity to cut costs and boost margins. Earnings and free cash flow could grow, even if global battery demand slowly declines, as is expected.
Jefferies analyst Kevin Grundy notes that, based on free cash flow, the stock looks cheap. It trades for a 7.2% free cash flow yield, versus 5.1% for peers. He values the shares at $45, which implies a 7% free cash flow yield. His upside target is $60.
With 32% of the battery market, Energizer is No. 2, behind Duracell, which controls 41%. Spectrum Brands’ Rayovac is the smaller player.
Energizer’s alkaline- and lithium-based batteries sell under the Energizer and Eveready brands. Energizer also makes headlamps, lanterns, and flashlights. Batteries represent 83% of revenue, and the lighting segment chips in the remainder. The company sells into 140 markets around the world, with about half of sales coming from North America.
This fiscal year ending in September, Grundy expects earnings of $181 million, or $2.93 a share, on $1.65 billion in revenue. Those results don’t fully reflect changes that management has been making to the business, including exiting or paring exposure to unprofitable markets. In 2016, earnings are expected to fall to $2.65 a share, before rebounding to $3 in 2017. Annual revenue should normalize around $1.6 billion.
Historically, batteries have been a highly promoted product. That’s been especially the case in the past few years, as P&G has run Duracell with an eye toward increasing share. Since 2009, P&G has kept pricing steady, even as Energizer and Rayovac boosted prices. Energizer has lost share, while Duracell has picked it up.
Under the Berkshire umbrella, that could change. Duracell will probably refocus on improving cash flow and profitability, rather than on driving sales volume. More rational pricing could ensue, and that would boost participants’ margins. This has happened in other consolidated U.S. industries, such as beer and cigarettes.
Energizer could also cut more costs. Over the past few years, the battery business has been dramatically restructured. Since 2011, $210 million in annual costs have been taken out, and that helped boost gross margins from 41.9%, to 46.2% in 2014.
In a report, analyst Grundy observes that management could announce a program to trim an additional $50 million by targeting selling, general, and administrative cost.
He also cites the opportunity to improve profitability in Latin America and Europe, where margins are much lower than those in North America.
On Energizer’s June investor day, CEO Alan Hoskins named “driving productivity gains” a “strategic priority.” He later added, “our singular objective will be to maximize free cash flow.”
In connection with the spinoff, Energizer took on $1 billion of debt, and paid the proceeds to Edgewell. With just over $300 million in cash, that puts leverage in a comfortable place. Free cash flow could come to about $3 a share this year.
Returning some of that cash to shareholders will be key to moving the stock. In addition to paying out a $1 a share in annual dividends, Energizer has committed to buying back 7.5 million shares, or more than 10% of its shares outstanding.
Energizer’s shares rallied 12% last week. Investors accumulating a position might want to pick up the bulk of their shares on any stock price weakness.
http://online.barrons.com/articles/recharging-the-energizer-bunny-1437195190?mod=BOL_hp_mag
Enterprising Investor
9 years ago
Energizer Holdings, Inc. Announces Dividend Policy and Share Repurchase Authorization (7/02/15)
ST. LOUIS, July 2, 2015 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced that its newly formed Board of Directors initiated a dividend program by declaring a dividend of $0.25 per share of common stock, payable on September 9, 2015, to all shareholders of record as of the close of business on August 19, 2015. Subject to declaration by the Board, Energizer anticipates paying a $0.25 per share cash dividend each quarter, with expected dividend payment dates in March, June, September and December. Future declarations of dividends are subject to Board approval and may be adjusted at the discretion of the Board, as business needs or market conditions change.
The Board of Directors also approved an authorization for the company to acquire up to 7.5 million shares of its common stock. The Company expects to purchase shares from time to time in open market transactions. The timing and the amount of any purchases will be determined by the Company based on its evaluation of market conditions, capital allocation objectives, legal and regulatory requirements and other factors.
"Our Board's decision to declare a quarterly dividend and authorize an opportunistic share repurchase program underscores our commitment to enhancing value for our shareholders," said Alan Hoskins, Chief Executive Officer of Energizer Holdings, Inc.
About Energizer Holdings, Inc.
Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, Mo., is one of the world's largest manufacturers of primary batteries and portable lighting products. The company had annual revenues of approximately $1.8 billion in fiscal year 2014, anchored by its two globally recognized brands Energizer® and EVEREADY®. As a global leader in power solutions, our mission is to lead the charge to connect our brands, our people and the products we offer to the world better than anyone else. Visit www.energizerholdings.com for more details.
http://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-dividend-policy-and-share-repurchase-authorization-300108006.html
Enterprising Investor
9 years ago
Energizer Holdings, Inc. Completes Spin Off from Parent Company Edgewell Personal Care; Begins Trading on NYSE as Independent, Publicly-Traded Entity (7/01/15)
ST. LOUIS, July 1, 2015 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) ("Energizer") today announced that it has completed the spin off from its former parent company, newly named Edgewell Personal Care Company ("Edgewell"), and has begun operating as an independent, publicly-traded entity. The new Energizer will be called Energizer Holdings, Inc. and trade under the ticker symbol "ENR." Starting July 1, 2015, the new Energizer will begin "regular-way" trading on the New York Stock Exchange ("NYSE").
"We are pleased to carry forward the globally recognized name and legacy of Energizer, and we are excited to begin a successful new era in our company's history," said Alan Hoskins, Chief Executive Officer of Energizer Holdings, Inc. "We will lead the charge with a renewed focus on our core business of batteries and portable lighting products, building upon the strength of our two iconic brands, Energizer and Eveready, and our leading market positions around the world. With a strong tradition of bringing innovation to our product categories and a relentless focus on cost savings, we are committed to driving long-term value for our shareholders, customers and consumers."
In connection with the listing of its shares of common stock on the NYSE, members of Energizer's management team will ring the NYSE Opening Bell at 9:30 a.m. ET on July 2, 2015.
As previously announced, common stockholders of record as of the close of business on June 16, 2015, the record date for the distribution, received one share of Energizer for each share of Edgewell common stock held as of the record date. The distribution of Energizer shares was made in book-entry form and no action or payment by Edgewell shareholders was required to receive Energizer shares. No physical share certificates of Energizer were issued.
About Energizer Holdings, Inc.
Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, Mo., is one of the world's largest manufacturers of primary batteries and portable lighting products. The company had annual revenues of approximately $1.8 billion in fiscal year 2014, anchored by its two globally recognized brands Energizer® and EVEREADY®. As a global leader in power solutions, our mission is to lead the charge to connect our brands, our people and the products we offer to the world better than anyone else. Visit www.energizerholdings.com for more details.
http://www.prnewswire.com/news-releases/energizer-holdings-inc-completes-spin-off-from-parent-company-edgewell-personal-care-begins-trading-on-nyse-as-independent-publicly-traded-entity-300107140.html
Enterprising Investor
9 years ago
Energizer Holdings, Inc. Announces Share Repurchase Authorization (6/02/15)
New Edgewell Personal Care Executive Team Announces Share Authorization During Presentation to Investors
ST. LOUIS, June 2, 2015 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced that its Board of Directors has approved a new authorization for the Company to acquire up to 10 million shares of its $.01 par value common stock. This authorization replaces a similar authorization to acquire up to 10 million shares, which was approved by the Board in April 2012, and under which approximately 5 million shares of common stock have been repurchased. This authorization will carry over to Edgewell Personal Care Company after the expected July 1, 2015 spin off of the Household Division.
The executive leadership team of Edgewell Personal Care made the announcement at its Investor kickoff meeting in New York today, where it also presented its long-term financial objectives and its capital allocation plans to investors.
David Hatfield, future Chief Executive Officer of Edgewell Personal Care, said, "Our Board's decision to authorize this substantial share repurchase underscores our commitment to enhancing value for our shareholders, and we are excited to announce that this commitment will extend to Edgewell Personal Care after the completion of the spin-off."
Cautionary Statement on Forward-Looking Language
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact should be considered to be forward-looking statements. Any such forward-looking statements are made based on information currently known and are subject to various risks and uncertainties, including those contained in Energizer Holdings, Inc.'s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended September 30, 2014 and its quarterly reports on Form 10-Q for the quarters ended December 31, 2014 and March 31, 2015 and in Energizer SpinCo, Inc.'s Form 10 Registration Statement, as amended. Neither company assumes any obligation to update or revise any forward-looking statements to reflect new events or circumstances.
About Energizer Holdings, Inc.
Energizer Holdings, Inc., headquartered in St. Louis, Missouri, is a consumer goods company operating globally in the broad categories of personal care and household products. Energizer's Personal Care Division offers a diversified range of consumer products in the wet shave, skin care, feminine care and infant care categories. Our portfolio includes well established brand names such as Schick(R) and Wilkinson Sword(R) men's and women's shaving systems and disposables; Edge(R) and Skintimate(R) shave preparations; Playtex(R) tampons, gloves and infant feeding products; Banana Boat(R) and Hawaiian Tropic(R) sun care products and Wet Ones(R) moist wipes. Energizer's Household Products Division offers consumers the broadest range of portable power solutions, anchored by our universally recognized Energizer(R) and Eveready(R) brands.
On April 30, 2014, Energizer Holdings announced plans to divide and create two independent, publicly traded companies:
New Household Products (to be named Energizer Holdings, Inc.), a leading consumer products company with annual revenue of approximately $1.8 billion in the fiscal year ending September 30, 2014, offering strong margins and significant cash flows anchored by its two globally recognized battery brands.
New Personal Care (to be Edgewell Personal Care Company): a leading pure-play personal care company with annual revenue of approximately $2.6 billion in the fiscal year ending September 30, 2014, offering top-line growth and capital return through a large portfolio of global brands with #1 or #2 positions in their categories.
http://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-share-repurchase-authorization-300092668.html
Enterprising Investor
9 years ago
Energizer Holdings, Inc. Announces Effectiveness of Form 10 Registration Statement of its Household Products Spin-Off Subsidiary, Energizer SpinCo, Inc. (6/02/15)
ST. LOUIS, June 1, 2015 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) ("ParentCo") today announced that the Securities and Exchange Commission ("SEC") has declared effective the Registration Statement on Form 10, as amended ("Form 10") filed by Energizer SpinCo, Inc. ("New Energizer"). New Energizer is the recently-formed holding company for ParentCo's Household Products business, created in connection with the upcoming separation of ParentCo's Household Products and Personal Care businesses. In connection with the separation, ParentCo will be renamed Edgewell Personal Care Company and New Energizer will be renamed Energizer Holdings, Inc.
ParentCo's board of directors has approved the separation of New Energizer and declared a dividend distribution of one share of New Energizer common stock for each share of ParentCo common stock outstanding as of the close of business on June 16, 2015, the record date for the distribution, subject to certain conditions referred to below. ParentCo expects to complete the distribution of New Energizer common stock to its shareholders on July 1, 2015 ("Distribution Date").
The distribution of New Energizer shares will be made in book-entry form and no action or payment by ParentCo shareholders is required to receive New Energizer shares. No physical share certificates of New Energizer will be issued. An information statement containing details of the separation and important information about New Energizer will be mailed to ParentCo shareholders prior to the Distribution Date.
There is currently no market for New Energizer common stock. The New York Stock Exchange ("NYSE") has authorized the listing of New Energizer common stock under the symbol "ENR," subject to official notice of distribution. Trading in New Energizer common stock is expected to begin on a "when issued" basis on June 12, 2015, under the symbol "ENR WI." "When issued" trading of New Energizer common stock will continue until the distribution occurs. New Energizer "when issued" trades will settle after the completion of the distribution.
Beginning on June 12, 2015, and continuing until the occurrence of the distribution, ParentCo expects that ParentCo common stock will trade in two markets on the NYSE: in the "regular-way" market under the symbol "ENR" and in the "ex-distribution" market under the symbol "EPC WI." Shares of ParentCo common stock trading in the "regular-way" market will carry the right to receive shares of New Energizer common stock through the distribution. Shares of ParentCo common stock trading in the "ex-distribution" market will not carry the right to receive New Energizer common stock.
ParentCo shareholders who sell their shares in the "regular-way" market before July 1, 2015 will also be selling their entitlement to receive New Energizer common stock in the distribution. ParentCo shareholders are encouraged to consult with their financial advisors regarding the specific consequences of selling shares of ParentCo common stock on or before July 1, 2015.
On July 1, 2015, "regular-way" trading will commence on the NYSE for New Energizer under the symbol "ENR" and for ParentCo under the symbol "EPC."
The distribution of New Energizer common stock is subject to the satisfaction or waiver of certain conditions including, but not limited to, the completion of an internal reorganization, the receipt of an opinion of tax counsel, the completion of related financing transactions, and the other conditions summarized in the Form 10. The transaction does not require approval from ParentCo shareholders. The Form 10 includes as Exhibit 2.1 a preliminary form of a Separation and Distribution Agreement, which includes the conditions to the distribution. Those filings are available at www.sec.gov.
New Energizer, through its worldwide operating subsidiaries, will be one of the world's largest manufacturers and marketers of batteries and lighting products, anchored by its universally recognized Energizer® and Eveready® brands. ParentCo will be a leading consumer products company, with an attractive stable of well-established brand names, including Schick® and Wilkinson Sword® in Wet Shave; Edge® and Skintimate® in Shave Preparation; Playtex®, Stayfree®, Carefree® and o.b.® in Feminine Care; Banana Boat® and Hawaiian Tropic® in Sun Care; Playtex® gloves and infant feeding products; and Wet Ones® moist wipes.
Cautionary Statement on Forward-Looking Language
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact should be considered to be forward-looking statements. Any such forward-looking statements are made based on information currently known and are subject to various risks and uncertainties, including those contained in ParentCo's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended September 30, 2014 and its quarterly reports on Form 10-Q for the quarters ended December 31, 2014 and March 31, 2015 and the Form 10 filed by New Energizer. Neither ParentCo nor New Energizer assumes any obligation to update or revise any forward-looking statements to reflect new events or circumstances.
About Energizer Holdings, Inc.
Energizer Holdings, Inc., headquartered in St. Louis, Missouri, is a consumer goods company operating globally in the broad categories of personal care and household products. Energizer's Personal Care Division offers a diversified range of consumer products in the wet shave, skin care, feminine care and infant care categories. Our portfolio includes well established brand names such as Schick® and Wilkinson Sword® men's and women's shaving systems and disposables; Edge® and Skintimate® shave preparations; Playtex® tampons, gloves and infant feeding products; Banana Boat® and Hawaiian Tropic® sun care products and Wet Ones® moist wipes. Energizer's Household Products Division offers consumers the broadest range of portable power solutions, anchored by our universally recognized Energizer® and Eveready® brands.
On April 30, 2014, Energizer Holdings announced plans to divide and create two independent, publicly traded companies:
New Household Products (to be named Energizer Holdings, Inc.), a leading consumer products company with annual revenue of approximately $1.8 billion in the fiscal year ending September 30, 2014, offering strong margins and significant cash flows anchored by its two globally recognized battery brands.
New Personal Care (to be Edgewell Personal Care Company): a leading pure-play personal care company with annual revenue of approximately $2.6 billion in the fiscal year ending September 30, 2014, offering top-line growth and capital return through a large portfolio of global brands with #1 or #2 positions in their categories.
http://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-effectiveness-of-form-10-registration-statement-of-its-household-products-spin-off-subsidiary-energizer-spinco-inc-300092100.html
Enterprising Investor
9 years ago
Energizer Holdings Announces Names For Both New Companies Upon Separation On July 1, 2015 (2/20/15)
ST. LOUIS, Feb. 20, 2015 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced the names of each of the two new companies upon separation, which is targeted for completion by July 1, 2015. The Personal Care Division will be named Edgewell Personal Care upon its separation to become an independent company. The Household Product Division will retain the Energizer Holdings, Inc. name and logo.
"Edgewell" is a newly coined word created by combining two familiar terms. "Edge" expresses the company's drive to be on the leading edge of innovation and to deliver meaningful advantages over competitive products. It also evokes the rich heritage of the company's largest global business: shaving, which is literally about putting an edge on blades. "Well" reflects the company's ultimate goal as a Personal Care business: to deliver well-being for the people who use its products. Furthermore, it speaks to a commitment that everything created will be well-designed and well-made.
"Together, these words form the perfect name for our new company: Edgewell Personal Care, the innovative challenger in the world of personal care products," said David Hatfield, Chief Executive Officer of Energizer's Personal Care Division.
The Edgewell logo will be accompanied by a hummingbird symbol in a fresh aqua blue with clean, modern lines. As alluded to by its name, Edgewell intends to continue Energizer's legacy as a challenger brand. The hummingbird is the ultimate challenger of the natural world: fast and agile, smaller than some, but strong and resourceful. And, like Edgewell's brands, the hummingbird surprises and delights, making people feel good.
"It's an emotionally engaging symbol that expresses our values, and it will help us to stand apart from the more traditional corporate logos in our industry," said Al Robertson, Global Chief Marketing Officer of the Energizer Personal Care Division.
The company also announced today that the Household Products Company will keep the Energizer Holdings, Inc. name and logo, retaining the legacy and value of the holding company's flagship brand.
"We're proud to carry forward our iconic Energizer name, building upon that rich heritage as we strive to deliver long-term value for our colleagues, customers and owners," said Alan Hoskins, Chief Executive Officer of Energizer's Household Products Division.
The Transition to Edgewell and the New Energizer
Separation activities are well underway and are expected to be completed on July 1st, 2015. Until that time, Energizer Holdings, Inc. will continue to operate under its current name and stock trading symbol. Edgewell Personal Care has reserved the stock symbol EPC on the New York Stock Exchange, while Energizer Holdings, Inc. will maintain the symbol ENR on the New York Stock Exchange. Both will begin trading under these symbols upon completion of separation. Shareholders will not be required to take any action with respect to the name change. Outstanding stock certificates will not be affected by the name change and will not need to be exchanged.
About Energizer:
Energizer Holdings, Inc. is a consumer goods company operating globally in the broad categories of personal care and household products. The Personal Care Division offers a diversified range of consumer products in the wet shave, skin care, feminine care and infant care categories with well-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; Playtex® infant feeding, Diaper Genie® and gloves; Banana Boat® and Hawaiian Tropic® sun care products; and Wet Ones® moist wipes. The Household Products Division offers consumers a broad range of household and specialty batteries and portable lighting products, anchored by the universally recognized Energizer® and Eveready® brands. The company markets its products throughout most of the world. Energizer Holdings, Inc. is traded on the NYSE under the ticker symbol ENR.
On April 30, 2014, Energizer Holdings announced plans to divide and create two independent, publicly traded companies:
New Household Products, a leading consumer products company with annual revenue of approximately $1.8 billion in the fiscal year ending September 30, 2014, offering strong margins and significant cash flows anchored by its two globally recognized battery brands.
New Personal Care (Edgewell): a leading pure-play personal care company with annual revenue of approximately $2.6 billion in the fiscal year ending September 30, 2014, offering top-line growth and capital return through a large portfolio of global brands with #1 or #2 positions in their categories.
http://www.prnewswire.com/news-releases/energizer-holdings-announces-names-for-both-new-companies-upon-separation-on-july-1-2015-300038199.html
Enterprising Investor
9 years ago
Energizer Announces Filing Of Form 10 Registration Statement For Separation Of Household Products And Personal Care Businesses (2/06/15)
Separation Planned to be Completed by July 1, 2015
ST. LOUIS, Feb. 6, 2015 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced the initial filing of a Form 10 Registration Statement with the U.S. Securities and Exchange Commission (SEC) in connection with the Company's previously announced plan to separate its Household Products and Personal Care businesses. The separation is planned as a tax-free spin-off to the Company's shareholders and is targeted to be completed by July 1, 2015.
"The filing of the Form 10 Registration Statement is one important milestone in executing our plan to separate the Household Products and Personal Care businesses into two stand-alone companies, and we believe we're on track to complete the spin by July 1," said Ward Klein, Energizer's Chief Executive Officer. "This separation will allow each business to pursue its own strategic focus and priorities – with Household Products carrying forward Energizer's legacy of iconic brands, global distribution and meaningful cash flows and Personal Care driving top-line and market share growth through an attractive portfolio of brands and a track record of innovation. We look forward to completing the separation to unlock the full value of each business for shareholders."
As previously announced on April 30, 2014, the Company is pursuing a plan to separate the Household Products and Personal Care businesses and create two independent, publicly traded companies. The Household Products business, with batteries and portable lighting products, will be anchored by the universally recognized Energizer® and Eveready® brands. The Personal Care business will be a pure-play consumer products company with well-established brand names, including Schick® and Wilkinson Sword® in Wet Shave; Edge® and Skintimate® in shave preparation; Playtex®, Stayfree®, Carefree® and o.b.® in Feminine Care; and Banana Boat® and Hawaiian Tropic® in Sun Care.
The initial Form 10 Registration Statement filed today with the SEC includes important information about the Household Products business, such as historical segment sales and profit. The Household Products business has not yet finalized its post-distribution capitalization structure. Pro-forma financial information reflecting the Company's final capital structure and capital allocation policies, among other matters, will be included in a subsequent amendment to the Form 10. The Company also plans to formally present pro-forma financial information to investors closer to separation.
The separation remains subject to the approval of the Board of Directors of Energizer Holdings, Inc. and the satisfaction of certain other customary conditions, including the effectiveness of the Form 10 Registration Statement. Energizer may, at any time until the closing of the separation, decide to abandon, modify or change the terms of the separation.
A copy of the Form 10 Registration Statement is available on the investor page of the Company's website, http://www.energizerholdings.com.
The Company has retained Goldman, Sachs & Co. as financial adviser and Wachtell, Lipton, Rosen & Katz and Bryan Cave LLP as legal counsel to advise on the separation process.
About Energizer:
Energizer Holdings, Inc. is a consumer goods company operating globally in the broad categories of personal care and household products. The Personal Care Division offers a diversified range of consumer products in the wet shave, skin care, feminine care and infant care categories with well-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; Playtex® infant feeding, Diaper Genie® and gloves; Banana Boat® and Hawaiian Tropic® sun care products; and Wet Ones® moist wipes. The Household Products Division offers consumers a broad range of household and specialty batteries and portable lighting products, anchored by the universally recognized Energizer® and Eveready® brands. The Company markets its products throughout most of the world. Energizer Holdings, Inc. is traded on the NYSE under the ticker symbol ENR.
http://www.prnewswire.com/news-releases/energizer-announces-filing-of-form-10-registration-statement-for-separation-of-household-products-and-personal-care-businesses-300032098.html
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