SHELTON, Conn., Feb. 8, 2022 /PRNewswire/ -- Edgewell
Personal Care Company (NYSE: EPC) today announced results for its
first fiscal quarter 2022 ended December
31, 2021.
Executive Summary
- Net sales were $463.3 million, an
increase of 2.7% compared to the prior year quarter.
- Organic net sales increased 2.5% compared to the prior year
quarter. (Organic basis excludes the impact of the Billie
acquisition and the negative translational impact from
currency.)
- GAAP Diluted Earnings Per Share ("EPS") were $0.20 for the first quarter compared to
$0.32 in the prior year quarter.
- Adjusted EPS were $0.42 for the
first quarter, compared to $0.43 in
the prior year quarter, inclusive of a $0.04 negative impact from the Billie
acquisition.
- The Company ended the first quarter with $240 million in cash on hand, access to an
additional $221 million revolving
credit facility and a net debt leverage ratio of 3.3x.
- Returned $33 million to
shareholders through share repurchases and dividends in the first
quarter.
- The Board of Directors declared a cash dividend of $0.15 per common share on February 4th, 2022 for the first quarter.
The Company reports and forecasts results on a GAAP and
non-GAAP basis and has reconciled non-GAAP results and outlook to
the most directly comparable GAAP measures later in this
release. See non-GAAP Financial Measures for a more detailed
explanation, including definitions of various non-GAAP terms used
in this release. All comparisons used in this release are
with the same period in the prior fiscal year unless otherwise
stated.
"During the first quarter, we capitalized on the strength of the
underlying demand for our products and delivered strong organic net
sales growth in all three segments and across most major geographic
regions. We also executed well on the bottom line, despite a
progressively challenging macro environment, with significant cost
pressures and increasingly volatile supply chain conditions," said
Rod Little, Edgewell's President and
Chief Executive Officer. "We remain focused on our strategic
priorities that are critical to the ongoing transformation of our
business. In the quarter, we continued the integration efforts of
Billie and, and earlier this month, began supporting the exciting
national rollout of the Billie brand in Walmart. We also returned
$33 million to shareholders through
share repurchases and a dividend as we remain committed to a
disciplined and balanced approach to capital allocation to drive
long term shareholder value."
Fiscal 1Q 2022 Operating Results (Unaudited)
Net sales were $463.3
million in the quarter, an increase of 2.7% including a net
$6.8 million or 1.5% impact from the
acquisition of Billie and a $5.9
million or 1.3% negative impact from currency. Organic
net sales increased 2.5%, reflecting a combination of higher
pricing and volume growth across the Wet Shave, Sun Care and Feminine Care businesses, partly
offset by lower sales volumes in Wet One's.
Gross profit was $189.9
million, as compared to $193.3
million in the prior year period. Gross margin as a
percent of net sales for the first quarter of fiscal 2022 was
41.0%. Adjusted gross margin decreased 140-basis points compared to
the prior year quarter, as 100-basis points of favorable pricing,
promotional efficiency and mix and 200-basis points of productivity
gains were more than offset by a 400-basis point impact from higher
cost of goods and 50-basis points related to the negative effect of
currency translation and other items.
Advertising and sales promotion expense
("A&P") increased $5.0
million to $46.2 million, or
10.0% of net sales, as compared to $41.2
million, or 9.1% of net sales in the prior year quarter,
primarily reflecting increases in Sun and Skin Care and Wet
Shave.
Selling, general and administrative expense
("SG&A") was $96.9
million, or 20.9% of net sales, as compared to $93.1 million, or 20.6% of net sales in the prior
year quarter. Adjusted SG&A declined 110-basis points as a
percent of net sales, as lower incentive and fringe benefit costs
were only partly offset by higher compensation expense and the
additional costs associated with the Billie acquisition, including
increased amortization expense.
The Company recorded pre-tax restructuring and other
non-recurring expenses of $2.2
million in the quarter in support of restructuring programs,
consisting largely of severance and outplacement, IT enablement and
consulting costs, as well as $6.0
million in acquisition and integration costs related to the
Billie acquisition.
Operating income was $31.8
million compared to $41.6
million in the prior year quarter. Adjusted operating income
was $46.7 million, or 10.1% of net
sales compared to $49.0 million in
the prior year quarter.
The effective tax rate for the first three months of
fiscal 2022 was 30.9% as compared to 29.7% in the prior year
quarter. The adjusted effective tax rate for the first three
months of fiscal 2022 was 25.3%, down from the prior year quarter
adjusted effective tax rate of 28.4%. The fiscal 2022
effective tax rate and adjusted effective tax rate reflects an
increase in Internal Revenue Service Code Section 162(m) permanent
adjustments partially offset by favorable stock compensation vests
compared to fiscal 2021.
GAAP net earnings for the quarter were $11.2 million or $0.20 per share compared to $17.7 million or $0.32 per share in the first quarter of fiscal
2021. Adjusted net earnings in the quarter were $23.2 million or $0.42 per share, as compared to $23.3 million or $0.43 per share in the prior year period,
inclusive of a $0.04 negative impact
from the Billie acquisition. This $0.04 reflects the impact of deferred profit, as
a consequence of profit on sales to Billie transitioning to cost,
as well as higher amortization of intangible asset costs.
Adjusted EBITDA was $69.7 million
compared to $72.2 million in the
prior year period.
Net cash used by operating activities was
$79.0 million for the first
three months of fiscal 2022 compared to $82.5 million in the prior year period.
Capital Allocation
On February 4, 2022, the Board of
Directors declared a quarterly cash dividend of $0.15 per common share for the first fiscal
quarter. The dividend is payable April 5,
2022 to stockholders of record as of the close of business
on March 8, 2022.
During the first quarter of fiscal 2022, the Company completed
share repurchases of 557,963 shares at a total cost of $24.5 million. The Company has 9.2 million shares
of common stock available for repurchase in the future under the
Board's 2018 authorization.
Fiscal 1Q 2022 Operating Segment Results (Unaudited)
Wet Shave (Men's Systems, Women's Systems, Disposables,
and Shave Preps)
Wet Shave net sales increased $7.0
million, or 2.5%. Organic net sales increased $6.0 million or 2.1%, driven by growth in Women's
Systems and Disposables, partly offset by declines in Men's
Systems, primarily in North
America and Shave Preps, which were negatively impacted by
supply chain issues and out of stocks. Wet Shave segment
profit decreased $1.1 million, or
2.1%, as higher sales were offset by the negative effect of
inflationary pressures and higher A&P spending, including the
impact from the Billie acquisition, and unfavorable currency
translation.
Sun and Skin Care (Sun
Care, Wet Ones, Bulldog, Jack
Black and Cremo)
Sun and Skin Care net sales increased $1.8 million, or 1.7%. Organic net sales
increased $2.0 million, or 1.9%,
primarily driven by Sun Care growth
of over 40%, reflecting market share gains and continued category
recovery in both U.S. and international markets, as well as organic
net sales growth in Men's Grooming. Wet One's organic net sales
declined 41%, reflecting the impact of cycling prior year COVID-19
related growth of over 110%. Sun and Skin Care segment profit
decreased $1.5 million, as higher
sales were more than offset by the negative effect of inflationary
pressures and substantially higher A&P spend in support of
increased program activation.
Feminine Care (Tampons, Pads, and Liners)
Feminine Care net sales increased $3.4
million, or 4.9%. The increase in net sales reflected
increased consumption and the impact of higher pricing, while
market share remained stable. Feminine Care segment profit
decreased $0.4 million, or 4.5%
driven by lower gross profit, partly offset by lower A&P and
SG&A.
Full Fiscal Year 2022 Financial Outlook
The Company is updating its previously provided outlook
assumptions for fiscal 2022 to include the ten month impact of the
Billie acquisition and the incremental negative impact of currency
translation. Excluding these impacts, the current outlook is
in-line with the previously provided outlook.
Mr. Little commented, "As we look to the remainder of the year,
we are encouraged by the improving demand environment, as well as
the distribution gains we are driving that are fueled by strong
innovation. However, we are also facing supply chain disruptions
and cost inflation that we are actively working to mitigate, even
as we maintain a disciplined investment stance in our brands.
All of this is reflected in our underlying Fiscal 2022 outlook
which we are reiterating today."
- Reported net sales expected to increase mid-single digits
(previously low-single digit increase)
-
- Updated to include an estimated 400-basis point increase from
the acquisition of Billie, net of Edgewell sales to Billie which
were included in the previous outlook
- Updated to Include a 160-basis point negative impact from
currency translation (previously 110 basis-point negative
impact)
- Organic sales expected to increase low-single digits
(previously low-single digit increase)
- GAAP EPS anticipated to be in the range of $2.23 to $2.51
(previously $2.73 to $3.01)
-
- Includes: Restructuring charges,* acquisition and integration
costs, Sun Care reformulation costs,
and value added tax settlement costs
- Adjusted EPS anticipated to now be in the range of $2.74 to $3.02
(previously $2.98 to $3.26)
-
- Updated to Include a $0.13
negative impact from increased amortization expense from the Billie
acquisition, a $0.06 negative impact
resulting from deferred profit on intercompany sales to Billie, and
a $0.05 incremental negative impact
from currency translation
- The EPS outlook includes an assumption that share repurchases
will offset dilution only
- Adjusted EBITDA expected to now be in the range of $357 to $377
million (previously $365 to
$385)
-
- Updated to include an $4.1
million negative impact from Billie 3rd party sales profit
deferral, and a $3.9 million negative
impact from currency translation
- Adjusted effective tax rate expected to be in the range of 22%
to 23%
- Total depreciation and amortization expense is expected to be
$93.5 million, including $9.0 million in incremental amortization expense
related to the acquisition of Billie
- Expected capital expenditures of approximately 3.0% of net
sales
- Free cash flow expected to be approximately 100% of non-GAAP
net earnings
*In Fiscal 2022, the Company expects to take specific actions to
strengthen its operating model, simplify the organization and
improve manufacturing and supply chain efficiency and
productivity. As a result of these actions, the Company
expects to incur one-time charges of approximately $17 million, inclusive of $2.2 million incurred in the fiscal first
quarter.
Webcast Information
In conjunction with this announcement, the Company will hold an
investor conference call beginning at 8:00
a.m. Eastern Time today. All interested parties may access a
live webcast of this conference call at www.edgewell.com,
under the "Investors," and "News and Events" tabs or by using the
following link:
http://ir.edgewell.com/news-and-events/events
For those unable to participate during the live webcast, a
replay will be available on www.edgewell.com, under the
"Investors," "Financial Reports," and "Quarterly Earnings"
tabs.
About Edgewell
Edgewell is a leading pure-play consumer products company with
an attractive, diversified portfolio of established brand names
such as Schick®, Wilkinson Sword® and Billie® men's and women's
shaving systems and disposable razors; Edge and Skintimate® shave
preparations; Playtex®, Stayfree®, Carefree® and o.b.® feminine
care products; Banana Boat®, Hawaiian Tropic®, Bulldog®, Jack
Black®, and CREMO® sun and skin care products; and Wet Ones®
products. The Company has a broad global footprint and operates in
more than 50 markets, including the U.S., Canada, Mexico, Germany, Japan, the U.K. and Australia, with approximately 6,900 employees
worldwide.
Forward-Looking Statements. This document contains
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. You should not place undue reliance on these
statements. Forward-looking statements generally can be identified
by the use of words or phrases such as "believe," "expect,"
"expectation," "anticipate," "may," "could," "intend," "belief,"
"estimate," "plan," "target," "predict," "likely," "will,"
"should," "forecast," "outlook," or other similar words or phrases.
These statements are not based on historical facts, but instead
reflect the Company's expectations, estimates or projections
concerning future results or events, including, without limitation,
the future earnings and performance of Edgewell or any of its
businesses, and the integration of the Billie acquisition and
expected benefits from this transaction, including growth
opportunities and cost savings. Many factors outside our
control could affect the realization of these estimates.
These statements are not guarantees of performance and are
inherently subject to known and unknown risks, uncertainties and
assumptions that are difficult to predict and could cause the
Company's actual results to differ materially from those indicated
by those statements. The Company cannot assure you that any of its
expectations, estimates or projections will be achieved. The
forward-looking statements included in this document are only made
as of the date of this document and the Company disclaims any
obligation to publicly update any forward-looking statement to
reflect subsequent events or circumstances, except as required by
law. You should not place undue reliance on these
statements.
In addition, other risks and uncertainties not presently known
to the Company or that it presently considers immaterial could
significantly affect the accuracy of any such forward-looking
statements. Risks and uncertainties include those detailed from
time to time in the Company's publicly filed documents, including
in Item 1A. Risk Factors of Part I of the Company's Annual Report
on Form 10-K filed with the Securities and Exchange Commission
("SEC") on November 19, 2021.
Non-GAAP Financial Measures. While the Company
reports financial results in accordance with generally accepted
accounting principles ("GAAP") in the U.S., this discussion also
includes non-GAAP measures. These non-GAAP measures are referred to
as "adjusted" or "organic" and exclude items such as restructuring
costs, acquisition and integration costs and non-standard
items. Reconciliations of non-GAAP measures, including
reconciliations of measures related to the Company's fiscal 2022
financial outlook, are included within the Notes to Condensed
Consolidated Financial Statements included with this release.
This non-GAAP information is provided as a supplement to, not as
a substitute for, or as superior to, measures of financial
performance prepared in accordance with GAAP. The Company uses this
non-GAAP information internally to make operating decisions and
believes it is helpful to investors because it allows more
meaningful period-to-period comparisons of ongoing operating
results. The information can also be used to perform analysis and
to better identify operating trends that may otherwise be masked or
distorted by the types of items that are excluded. This non-GAAP
information is a component in determining management's incentive
compensation. Finally, the Company believes this information
provides a higher degree of transparency. The following provides
additional detail on the Company's non-GAAP measures:
- The Company analyzes its net sales and segment profit on an
organic basis to better measure the comparability of results
between periods. Organic net sales and organic segment profit
exclude the impact of changes in foreign currency and the impact of
the Billie acquisition.
-
- Organic net sales will be unfavorably impacted in fiscal 2022
by the Billie acquisition as sales that were previously reported as
third party sales to Billie are now included as inter-company
sales.
- Segment profit will be unfavorably impacted in fiscal 2022 as a
result of a change in the timing of profit recognition due to the
Billie acquisition. Subsequent to the acquisition of Billie, profit
previously earned on sales to Billie will be deferred until Billie
sells to a third party.
- The Company utilizes "adjusted" non-GAAP measures including
gross profit, SG&A, operating income, income taxes, net
earnings, diluted earnings per share, and EBITDA to internally make
operating decisions. The following items are excluded when
analyzing non-GAAP measures: restructuring and related costs,
acquisition and integration costs and non-standard items.
- Free cash flow is defined as net cash from operating activities
less capital expenditures plus collections of deferred purchase
price of accounts receivable sold and proceeds from sales of fixed
assets. Free cash flow conversion is defined as free cash flow as a
percentage of net earnings adjusted for the net impact of non-cash
impairments.
- Net debt leverage ratio is defined as total debt less cash
divided by adjusted EBITDA.
EDGEWELL PERSONAL
CARE COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
(unaudited, in
millions, except per share data)
|
|
|
Three Months
Ended
December
31,
|
|
2021
|
|
2020
|
Net sales
|
$
463.3
|
|
$
451.1
|
Cost of products
sold
|
273.4
|
|
257.8
|
Gross
profit
|
189.9
|
|
193.3
|
|
|
|
|
Selling, general and
administrative expense
|
96.9
|
|
93.1
|
Advertising and sales
promotion expense
|
46.2
|
|
41.2
|
Research and
development expense
|
12.8
|
|
13.7
|
Restructuring
charges
|
2.2
|
|
3.7
|
Operating
income
|
31.8
|
|
41.6
|
Interest expense
associated with debt
|
17.3
|
|
17.4
|
Other income,
net
|
(1.7)
|
|
(1.0)
|
Earnings before
income taxes
|
16.2
|
|
25.2
|
Income tax
provision
|
5.0
|
|
7.5
|
Net
earnings
|
$
11.2
|
|
$
17.7
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic net earnings per share
|
0.21
|
|
0.33
|
Diluted net earnings per diluted share
|
0.20
|
|
0.32
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
Basic
|
54.4
|
|
54.4
|
Diluted
|
55.0
|
|
54.8
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL
CARE COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited, in
millions)
|
|
|
December
31,
2021
|
|
September
30,
2021
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
239.8
|
|
$
479.2
|
Trade receivables,
less allowance for doubtful accounts
|
154.4
|
|
150.7
|
Inventories
|
407.5
|
|
345.7
|
Other current
assets
|
165.2
|
|
160.1
|
Total current
assets
|
966.9
|
|
1,135.7
|
Property, plant and
equipment, net
|
356.6
|
|
362.6
|
Goodwill
|
1,342.7
|
|
1,162.8
|
Other intangible
assets, net
|
1,035.0
|
|
906.4
|
Other
assets
|
105.9
|
|
107.1
|
Total
assets
|
$
3,807.1
|
|
$
3,674.6
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Notes
payable
|
27.4
|
|
26.5
|
Accounts
payable
|
217.8
|
|
209.5
|
Other current
liabilities
|
238.7
|
|
300.8
|
Total current
liabilities
|
483.9
|
|
536.8
|
Long-term
debt
|
1,432.7
|
|
1,234.2
|
Deferred income tax
liabilities
|
150.1
|
|
129.0
|
Other
liabilities
|
188.1
|
|
190.3
|
Total
liabilities
|
2,254.8
|
|
2,090.3
|
Shareholders'
equity
|
|
|
|
Common
shares
|
0.7
|
|
0.7
|
Additional paid-in
capital
|
1,593.7
|
|
1,631.1
|
Retained
earnings
|
868.5
|
|
865.7
|
Common shares in
treasury at cost
|
(767.2)
|
|
(776.3)
|
Accumulated other
comprehensive loss
|
(143.4)
|
|
(136.9)
|
Total shareholders'
equity
|
1,552.3
|
|
1,584.3
|
Total liabilities
and shareholders' equity
|
$
3,807.1
|
|
$
3,674.6
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL
CARE COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited, in
millions)
|
|
|
Three Months
Ended
December
31,
|
|
2021
|
|
2020
|
Cash Flow from
Operating Activities
|
|
|
|
Net
earnings
|
$
11.2
|
|
$
17.7
|
Depreciation and
amortization
|
21.4
|
|
22.2
|
Share-based
compensation expense
|
5.5
|
|
5.3
|
Loss on sale of
assets
|
0.3
|
|
0.2
|
Deferred compensation
payments
|
(0.5)
|
|
(0.2)
|
Deferred income
taxes
|
(0.1)
|
|
—
|
Other, net
|
1.7
|
|
1.0
|
Changes in operating
assets and liabilities
|
(118.5)
|
|
(128.7)
|
Net cash used by
operating activities
|
(79.0)
|
|
(82.5)
|
|
|
|
|
Cash Flow from
Investing Activities
|
|
|
|
Capital
expenditures
|
(9.4)
|
|
(10.2)
|
Acquisition of
Billie
|
(308.8)
|
|
—
|
Proceeds from sale of
Infant and Pet Care business
|
5.0
|
|
7.5
|
Acquisition of
Cremo
|
—
|
|
(0.3)
|
Collection of deferred
purchase price on accounts receivable sold
|
0.8
|
|
1.5
|
Other, net
|
(0.3)
|
|
(0.8)
|
Net cash used by
investing activities
|
(312.7)
|
|
(2.3)
|
|
|
|
|
Cash Flow from
Financing Activities
|
|
|
|
Cash proceeds from
debt with original maturities greater than 90 days
|
198.0
|
|
—
|
Net increase in debt
with original maturities of 90 days or less
|
1.4
|
|
2.5
|
Dividends to common
shareholders
|
(8.5)
|
|
—
|
Repurchase of
shares
|
(24.5)
|
|
(9.2)
|
Net financing inflow
(outflow) from the Accounts Receivable Facility
|
(1.6)
|
|
4.2
|
Employee shares
withheld for taxes
|
(9.7)
|
|
(3.0)
|
Other, net
|
0.4
|
|
—
|
Net cash from (used
by) financing activities
|
155.5
|
|
(5.5)
|
|
|
|
|
Effect of exchange
rate changes on cash
|
(3.2)
|
|
6.4
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
(239.4)
|
|
(83.9)
|
Cash and cash
equivalents, beginning of period
|
479.2
|
|
364.7
|
Cash and cash
equivalents, end of period
|
$
239.8
|
|
$
280.8
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL CARE COMPANY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited,
in millions, except per share data)
Note 1 — Segments
The Company conducts its business
in the following three segments: Wet Shave, Sun and Skin Care, and
Feminine Care (collectively, the "Segments", and each individually,
a "Segment"). Segment performance is evaluated based on segment
profit, exclusive of general corporate expenses, share-based
compensation costs, restructuring charges, and certain costs deemed
non-recurring in nature, including acquisition and integration
costs, value added tax settlement costs, Sun Care reformulation costs, and the
amortization of intangible assets. Financial items, such as
interest income and expense, are managed on a global basis at the
corporate level. The exclusion of such charges from segment results
reflects management's view on how it evaluates segment
performance.
The Company completed the
acquisition of Billie on November 29,
2021. As a result, Net Sales and Segment Profit associated
with Billie products will be reported in the Wet Shave segment
beginning on the acquisition date.
Segment net sales and
profitability are presented below:
|
Three Months
Ended
December 31,
|
|
2021
|
|
2020
|
Net
Sales
|
|
|
|
Wet Shave
|
$
286.1
|
|
$
279.1
|
Sun and Skin
Care
|
104.8
|
|
103.0
|
Feminine
Care
|
72.4
|
|
69.0
|
Total net
sales
|
$
463.3
|
|
$
451.1
|
|
|
|
|
Segment
Profit
|
|
|
|
Wet Shave
|
$
51.5
|
|
$
52.6
|
Sun and Skin
Care
|
3.7
|
|
5.2
|
Feminine
Care
|
8.4
|
|
8.8
|
Total segment
profit
|
63.6
|
|
66.6
|
General corporate and
other expenses
|
(10.8)
|
|
(12.1)
|
Restructuring and
related costs
|
(2.2)
|
|
(4.4)
|
Acquisition and
integration costs
|
(6.0)
|
|
(3.0)
|
Value added tax
settlement costs
|
(3.4)
|
|
—
|
Sun Care reformulation
costs
|
(3.3)
|
|
—
|
Amortization of
intangibles
|
(6.1)
|
|
(5.5)
|
Interest and other
expenses, net
|
(15.6)
|
|
(16.4)
|
Total earnings
before income taxes
|
$
16.2
|
|
$
25.2
|
Refer to Note 2 GAAP to Non-GAAP
Reconciliations for the income statement location of non-GAAP
adjustments to earnings before income taxes.
Note 2 — GAAP to Non-GAAP Reconciliations
The following tables provide a
GAAP to Non-GAAP reconciliation of certain line items from the
Condensed Consolidated Statement of Earnings:
|
Three Months Ended
December 31, 2021
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP —
Reported
|
$
189.9
|
|
$
96.9
|
|
$
31.8
|
|
$
16.2
|
|
$
5.0
|
|
$
11.2
|
|
$
0.20
|
Restructuring and
related costs
|
—
|
|
—
|
|
2.2
|
|
2.2
|
|
0.5
|
|
1.7
|
|
0.03
|
Acquisition and
integration costs
|
0.3
|
|
5.7
|
|
6.0
|
|
6.0
|
|
0.3
|
|
5.7
|
|
0.11
|
Value added tax
settlement costs
|
—
|
|
3.4
|
|
3.4
|
|
3.4
|
|
1.1
|
|
2.3
|
|
0.04
|
Sun Care reformulation
costs
|
3.3
|
|
—
|
|
3.3
|
|
3.3
|
|
1.0
|
|
2.3
|
|
0.04
|
Total Adjusted
Non-GAAP
|
$
193.5
|
|
$
87.8
|
|
$
46.7
|
|
$
31.1
|
|
$
7.9
|
|
$
23.2
|
|
$
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
41.0 %
|
|
20.9 %
|
|
6.9
%
|
|
GAAP effective tax
rate
|
30.9 %
|
|
|
Adjusted as a percent
of net sales
|
41.8 %
|
|
19.0 %
|
|
10.1 %
|
|
Adjusted effective
tax rate
|
25.3 %
|
|
|
|
Three Months Ended
December 31, 2020
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP —
Reported
|
$
193.3
|
|
$
93.1
|
|
$
41.6
|
|
$
25.2
|
|
$
7.5
|
|
$
17.7
|
|
$
0.32
|
Restructuring and
related costs
|
0.1
|
|
0.6
|
|
4.4
|
|
4.4
|
|
1.1
|
|
3.3
|
|
0.07
|
Acquisition and
integration costs
|
1.3
|
|
1.7
|
|
3.0
|
|
3.0
|
|
0.7
|
|
2.3
|
|
0.04
|
Total Adjusted
Non-GAAP
|
$
194.7
|
|
$
90.8
|
|
$
49.0
|
|
$
32.6
|
|
$
9.3
|
|
$
23.3
|
|
$
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
42.9 %
|
|
20.6 %
|
|
9.2
%
|
|
GAAP effective tax
rate
|
29.7 %
|
|
|
Adjusted as a percent
of net sales
|
43.2 %
|
|
20.1 %
|
|
10.9 %
|
|
Adjusted effective
tax rate
|
28.4 %
|
|
|
Note 3 - Net Sales and Profit by Segment
Operations for the Company are
reported via three Segments. The impact of acquisition includes the
operations of Billie which was acquired in November 2021 and included in the Wet Shave
segment. The following tables present changes in net sales
and segment profit for the first quarter, as compared to the
corresponding period in the prior quarter.
Net Sales (In
millions - Unaudited)
|
Three Months Ended
December 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
Total
|
Net Sales - Q1
FY21
|
$
279.1
|
|
|
|
$
103.0
|
|
|
|
$
69.0
|
|
|
|
$
451.1
|
|
|
Organic
|
6.0
|
|
2.1
%
|
|
2.0
|
|
1.9
%
|
|
3.3
|
|
4.8
%
|
|
11.3
|
|
2.5
%
|
Impact of Billie
acquisition, net
|
6.8
|
|
2.4
%
|
|
—
|
|
—
%
|
|
—
|
|
—
%
|
|
6.8
|
|
1.5
%
|
Impact of
currency
|
(5.8)
|
|
(2.1)
%
|
|
(0.2)
|
|
(0.2)
%
|
|
0.1
|
|
0.1
%
|
|
(5.9)
|
|
(1.3)
%
|
Net Sales - Q1
FY22
|
$
286.1
|
|
2.4
%
|
|
$
104.8
|
|
1.7
%
|
|
$
72.4
|
|
4.9
%
|
|
$
463.3
|
|
2.7
%
|
Organic net sales were unfavorably
impacted in fiscal 2022 by the change in classification of sales
from 3rd party to intercompany as a result of the Billie
acquisition in fiscal 2022. The impact of Billie, net is calculated
as Billie net 3rd party sales after the acquisition date less
shipments to Billie by the Company in the comparable prior year
period, which totaled $2.1.
Segment Profit (In
millions - Unaudited)
|
Three Months Ended
December 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
Total
|
Segment Profit - Q1
FY21
|
$
52.6
|
|
|
|
$
5.2
|
|
|
|
$
8.8
|
|
|
|
$
66.6
|
|
|
Organic
|
3.2
|
|
6.1
%
|
|
(1.3)
|
|
(25.0)
%
|
|
(0.5)
|
|
(5.6)
%
|
|
1.4
|
|
2.1
%
|
Impact of Billie
acquisition, net
|
(2.4)
|
|
(4.6)
%
|
|
—
|
|
—
%
|
|
—
|
|
—
%
|
|
(2.4)
|
|
(3.6)
%
|
Impact of
currency
|
(1.9)
|
|
(3.6)
%
|
|
(0.2)
|
|
(3.8) %
|
|
0.1
|
|
1.1
%
|
|
(2.0)
|
|
(3.0)
%
|
Segment Profit - Q1
FY22
|
$
51.5
|
|
(2.1)
%
|
|
$
3.7
|
|
(28.8)
%
|
|
$
8.4
|
|
(4.5)
%
|
|
$
63.6
|
|
(4.5)
%
|
Segment profit will be unfavorably
impacted in fiscal 2022 as a result of the Billie acquisition due
to timing of profit recognition. The Company eliminates profit
earned on its shipments to Billie as part of the intercompany
consolidation process, and recognizes this profit when Billie
completes net sales to third parties. Organic segment profit
excludes the deferral of Billie related profits in fiscal 2022.
Note 4 - EBITDA
The Company reports financial
results on a GAAP and adjusted basis. The table below is used to
reconcile Net earnings to EBITDA and Adjusted EBITDA, which are
Non-GAAP measures, to improve comparability of results between
periods.
|
Three Months
Ended
December
31,
|
|
2021
|
|
2020
|
Net
earnings
|
$
11.2
|
|
$
17.7
|
Income tax
provision
|
5.0
|
|
7.5
|
Interest expense,
net
|
17.2
|
|
17.4
|
Depreciation and
amortization
|
21.4
|
|
22.2
|
EBITDA
|
$
54.8
|
|
$
64.8
|
|
|
|
|
Restructuring and
related costs
|
2.2
|
|
4.4
|
Acquisition and
integration costs
|
6.0
|
|
3.0
|
Value added tax
settlement costs
|
3.4
|
|
—
|
Sun Care
reformulation costs
|
3.3
|
|
—
|
Adjusted
EBITDA
|
$
69.7
|
|
$
72.2
|
Note 5 - Outlook
The following tables provide
reconciliations of Adjusted EPS and Adjusted EBITDA, Non-GAAP
measures, included within the Company's outlook for projected
fiscal 2022 results:
Adjusted EPS
Outlook
|
|
|
Fiscal 2022 GAAP
EPS
|
|
$2.23 -
$2.51
|
|
|
|
Restructuring and
related costs
|
approx.
|
0.31
|
Acquisition and
integration costs
|
approx.
|
0.22
|
Value added tax
settlement costs
|
approx.
|
0.06
|
Sun Care
reformulation costs
|
approx.
|
0.06
|
Income
taxes(1)
|
approx.
|
(0.14)
|
|
|
|
Fiscal 2022 Adjusted
EPS Outlook (Non-GAAP)
|
|
$2.74 -
$3.02
|
|
|
(1)
|
Income tax effect of
the adjustments to Fiscal 2022 GAAP EPS noted above.
|
|
|
|
|
Adjusted EBITDA
Outlook
|
|
|
Fiscal 2022 GAAP Net
Income
|
approx.
|
$118 -
$138
|
Income tax
provision
|
approx.
|
40
|
Interest expense,
net
|
approx.
|
70
|
Depreciation and
amortization
|
approx.
|
94
|
EBITDA
|
approx.
|
$322 -
$342
|
|
|
|
Restructuring and
related costs
|
approx.
|
17
|
Acquisition and
integration costs
|
approx.
|
12
|
Value added tax
settlement costs
|
approx.
|
3
|
Sun Care
reformulation costs
|
approx.
|
3
|
Fiscal 2022 Adjusted
EBITDA
|
approx.
|
$357- $377
|
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SOURCE Edgewell Personal Care Company