Net Sales Increase of 5.5%, or 2.1%
Organic
Exclusive Launch of Billie Brand at Walmart
Company Updates Previously Provided Outlook
for Fiscal 2022
SHELTON,
Conn., May 10, 2022 /PRNewswire/ --
Edgewell Personal Care Company (NYSE: EPC)
today announced results for its second fiscal quarter 2022 ended
March 31, 2022.
Executive Summary
- Net sales were $547.7
million, an increase of 5.5% compared to the prior year
period.
- Organic net sales increased 2.1% compared to the prior
year period. (Organic basis excludes the impact of the Billie
acquisition and the negative translational impact from
currency.)
- GAAP Diluted Earnings Per Share ("EPS") were $0.43 for the second quarter compared to
$0.26 in the prior year
period.
- Adjusted EPS were $0.50 for
the second quarter, compared to $0.70
in the prior year period.
- Ended the fiscal second quarter with $188 million in cash on hand, access to an
additional $240 million revolving
credit facility and a net debt leverage ratio of 3.6x.
- The Company repurchased $51
million of its common stock and paid $8.2 million of dividends in the second fiscal
quarter in support of its capital allocation strategy.
- Board of Directors declared a cash dividend of
$0.15 per common share on
May 6th, 2022 for the second fiscal
quarter.
- Increasing organic net sales outlook to reflect continued
strong demand and incremental pricing, while lowering adjusted EPS
and adjusted EBITDA estimates to reflect increased inflationary
pressure.
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.
"In Q2, we delivered another quarter of solid growth reflecting
strong demand for our products, continued market share gains and
improving trends across many key brands, despite a
higher-than-expected inflationary environment and significant
supply chain disruptions," said Rod
Little, Edgewell's President and Chief Executive Officer.
"Looking ahead, we believe the supply chain disruptions are largely
behind us, as evidenced by signs of a normalization within our
product flow and an improvement of our on-shelf position; however,
we expect increased commodity and transportation-related cost
headwinds to persist, which is reflected in our revised
outlook."
Little continued, "Encouragingly, our results demonstrate the
continued progress we are making in executing against our strategic
priorities to transform Edgewell amidst a dynamic operating
environment, while also maintaining our returns-focused investment
stance – returning to shareholders over $59
million in the quarter."
Fiscal 2Q 2022 Operating Results (Unaudited)
Net sales were $547.7
million in the quarter, an increase of 5.5% including a net
impact of $27.4 million or 5.3% from
the acquisition of Billie and a $10.1
million or 1.9% negative impact from currency. Organic
net sales increased 2.1%, reflecting strong Sun Care, Grooming and Women's Shave performance
across both North America and
International markets, partially offset by the impact of supply
constraints on Feminine Care and certain Wet Shave brands, and
lower consumption in Wet Ones.
Gross profit was $230.1
million, as compared to $241.7
million in the prior year period. Gross margin as a
percent of net sales for the second quarter of fiscal 2022 was
42.0%. Adjusted gross margin decreased 450-basis points compared to
the prior year quarter, as 110-basis points of favorable pricing
and 200-basis points of productivity gains were more than offset by
a 560-basis point impact from higher commodity costs and increased
transportation and air-freight costs, and a 140-basis point impact
from negative mix and higher non-trade spend, and a 60-basis
inorganic impact from Billie and unfavorable foreign
exchange.
Advertising and sales promotion expense ("A&P")
increased $1.5 million to
$69.9 million, or 12.8% of net sales,
as compared to $68.4 million, or
13.2% of net sales in the prior year quarter, primarily reflecting
increases in support of sun season execution, the Schick
Masterbrand launch and continued investments behind commercial
activation in Japan and the
U.K.
Selling, general and administrative expense ("SG&A")
was $101.3 million, or 18.5% of net
sales, as compared to $93.4 million,
or 18.0% of net sales in the prior year quarter. Adjusted SG&A
increased 90-basis points as a percent of net sales driven 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 $3.7
million in the quarter in support of restructuring programs,
consisting largely of severance and outplacement, as well as
$1.1 million in acquisition and
integration costs related to the Billie acquisition.
Operating income was $41.7
million compared to $62.9
million in the prior year quarter. Adjusted operating income
was $46.7 million, or 8.5% of net
sales compared to $68.7 million in
the prior year quarter.
The effective tax rate for the first six months of fiscal
2022 was 20.5% compared to 28.4% in the prior year period.
The adjusted effective tax rate for the first six months of fiscal
2022 was 20.5%, down from the prior year quarter's adjusted
effective tax rate of 26.5%. The fiscal 2022 effective and
adjusted tax rates reflects a favorable mix of earnings in low tax
jurisdictions combined with a favorable impact of a change in prior
estimates.
GAAP net earnings for the quarter were $23.2 million or $0.43 per share compared to $14.4 million or $0.26 per share in the second quarter of fiscal
2021. Adjusted net earnings in the quarter were $27.0 million or $0.50 per share, compared to $38.5 million or $0.70 per share in the prior year period, and
adjusted EBITDA was $73.7 million
compared to $90.9 million in the
prior year period.
Net cash used by operating activities was
$39.9 million for the six months
ending March 31, 2022 compared to
$18.8 million used in the prior year
period, driven by lower adjusted net earnings.
Capital Allocation
On May 6, 2022, the Board of
Directors declared a quarterly cash dividend of $0.15 per common share for the second fiscal
quarter. The dividend will be payable on July 7, 2022 to shareholders of record as of the
close of business on June 2,
2022. During the second quarter of fiscal 2022, the Company
paid dividends totaling $8.2 million
to stockholders.
During the second quarter of fiscal 2022, the Company completed
share repurchases of approximately 1.4 million shares at a total
cost of $50.9 million. The Company
has 7.8 million shares of common stock available for repurchase in
the future under the Board's 2018 authorization as of March 31, 2022.
Fiscal 2Q 2022 Operating Segment Results (Unaudited)
Wet Shave (Men's Systems, Women's Systems, Disposables,
and Shave Preps)
Net sales increased $12.3 million,
or 4.2%. Organic net sales decreased $6.1
million or 2.1%, driven by declines in Men's systems
primarily from lower volumes and unfavorable trade promotional
spend in North America, partially
offset by growth in Women's Systems in North America and International. Organic
Net Sales in North American were impacted by supply constraints and
resultant out of stocks in certain Women's Systems and Men's and
Women's Shave Preps products. Wet Shave segment profit
decreased $18.3 million, or 39.9%, as
commodity inflation and increased transportation and air freight
costs were partially offset by favorable pricing across all
markets.
Sun and Skin Care (Sun
Care, Wet Ones, Bulldog, Jack
Black and Cremo)
Net sales increased $23.8 million,
or 14.9%. Organic net sales increased $24.8 million, or 15.5%, primarily driven by
Sun Care growth of over 28%,
reflecting distribution and market share gains in North America and continued category recovery
in certain International markets. Additionally, Grooming grew 5.7%,
primarily in North America. Wet
Ones organic net sales declined 24.5%, reflecting the impact of
reduced demand cycling last year's COVID-19 driven demand. Sun and
Skin Care segment profit increased $6.1
million, as higher sales in Sun
Care were partially offset by inflationary cost pressures,
higher A&P spend and sales declines in Wet Ones.
Feminine Care (Tampons, Pads, and Liners)
Net sales decreased $7.7 million,
or 11.5%. The decrease in net sales reflected the impact of supply
constraints due to manufacturing labor shortages and certain
ingredient shortages. Consumption increased approximately 9%
driven by higher pricing, while market share increased slightly in
the quarter. Feminine Care segment profit decreased
$3.7 million, driven by driven by the
aforementioned supply chain constraints and increased commodity and
transportation costs.
Full Fiscal Year 2022 Financial Outlook
The Company is updating its previously provided outlook
assumptions for fiscal 2022 to reflect the impact of fiscal second
quarter results and projected increases in cost inflation.
- Reported net sales expected to increase mid-single digits
-
- Includes an estimated 400-basis point increase from the
acquisition of Billie, net of Edgewell sales to Billie
- Updated to include a 200-basis point negative impact from
currency translation (previously 160-basis point negative
impact)
- Organic sales expected to increase approximately 400-basis
points (previously low-single digits)
- GAAP EPS expected to be in the range of $1.93 to $2.21
(previously $2.23 to $2.51)
-
- Includes: Restructuring charges,* acquisition and integration
costs, Sun Care reformulation costs,
and value added tax settlement costs
- Adjusted EPS expected to be in the range of $2.38 to $2.66
(previously $2.74 to $3.02)
-
- Updated to reflect incremental estimated cost headwinds from
higher commodities and transportation related costs, with the full
year inflation impact now expected to be 650-basis points.
Adjusted Gross Margin is now expected to decline 350-basis points
(previously 200-basis point decline)
- The EPS outlook reflects the impact of total fiscal
year-to-date share repurchases through March
- Adjusted EBITDA expected to be in the range of $330 to $345
million (previously $357 to
$377)
- Adjusted effective tax rate expected to be in the range of 21%
to 22% (previously 22% to 23%)
- Total depreciation and amortization expense expected to be
$91.5 million (previously
$93.5 million)
- Expected capital expenditures expected to be approximately 3.0%
of net sales
- Free cash flow expected to be above 100% of 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 $15 million, inclusive of $5.9 million incurred in the first six months of
fiscal 2022.
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 intercompany
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)
|
|
|
Quarter Ended
March 31,
|
|
Six Months Ended March
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales
|
$
547.7
|
|
$
519.3
|
|
$
1,011.0
|
|
$
970.4
|
Cost of products
sold
|
317.6
|
|
277.6
|
|
591.0
|
|
535.4
|
Gross
profit
|
230.1
|
|
241.7
|
|
420.0
|
|
435.0
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
101.3
|
|
93.4
|
|
198.2
|
|
186.5
|
Advertising and sales
promotion expense
|
69.9
|
|
68.4
|
|
116.1
|
|
109.6
|
Research and
development expense
|
13.7
|
|
14.3
|
|
26.5
|
|
28.0
|
Restructuring
charges
|
3.5
|
|
2.7
|
|
5.7
|
|
6.4
|
Operating
income
|
41.7
|
|
62.9
|
|
73.5
|
|
104.5
|
Interest expense
associated with debt
|
18.0
|
|
17.3
|
|
35.3
|
|
34.7
|
Cost of early
retirement of long-term debt
|
—
|
|
26.1
|
|
—
|
|
26.1
|
Other income,
net
|
(3.4)
|
|
—
|
|
(5.1)
|
|
(1.0)
|
Earnings before income
taxes
|
27.1
|
|
19.5
|
|
43.3
|
|
44.7
|
Income tax
provision
|
3.9
|
|
5.1
|
|
8.9
|
|
12.6
|
Net
earnings
|
$
23.2
|
|
$
14.4
|
|
$
34.4
|
|
$
32.1
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
Basic net earnings per share
|
0.43
|
|
0.26
|
|
0.64
|
|
0.59
|
Diluted net earnings per diluted share
|
0.43
|
|
0.26
|
|
0.63
|
|
0.58
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
53.6
|
|
54.3
|
|
54.0
|
|
54.4
|
Diluted
|
54.3
|
|
54.9
|
|
54.6
|
|
54.9
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL CARE COMPANY
CONDENSED
CONSOLIDATED BALANCE SHEETS
(unaudited, in
millions)
|
|
|
March 31,
2022
|
|
September 30,
2021
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash equivalents
|
$
188.1
|
|
$
479.2
|
Trade receivables, less allowance for doubtful
accounts
|
183.8
|
|
150.7
|
Inventories
|
429.1
|
|
345.7
|
Other current assets
|
167.7
|
|
160.1
|
Total current assets
|
968.7
|
|
1,135.7
|
Property, plant and
equipment, net
|
355.4
|
|
362.6
|
Goodwill
|
1,340.6
|
|
1,162.8
|
Other intangible
assets, net
|
1,024.2
|
|
906.4
|
Other assets
|
104.4
|
|
107.1
|
Total
assets
|
$
3,793.3
|
|
$
3,674.6
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Notes payable
|
25.8
|
|
26.5
|
Accounts payable
|
224.7
|
|
209.5
|
Other current liabilities
|
293.7
|
|
300.8
|
Total current
liabilities
|
544.2
|
|
536.8
|
Long-term
debt
|
1,414.3
|
|
1,234.2
|
Deferred income tax
liabilities
|
139.1
|
|
129.0
|
Other
liabilities
|
180.2
|
|
190.3
|
Total
liabilities
|
2,277.8
|
|
2,090.3
|
Shareholders'
equity
|
|
|
|
Common shares
|
0.7
|
|
0.7
|
Additional paid-in capital
|
1,597.2
|
|
1,631.1
|
Retained earnings
|
883.5
|
|
865.7
|
Common shares in treasury at cost
|
(814.6)
|
|
(776.3)
|
Accumulated other comprehensive loss
|
(151.3)
|
|
(136.9)
|
Total shareholders'
equity
|
1,515.5
|
|
1,584.3
|
Total liabilities and shareholders'
equity
|
$
3,793.3
|
|
$
3,674.6
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL CARE COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
|
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
Cash Flow from Operating
Activities
|
|
|
|
Net
earnings
|
$
34.4
|
|
$
32.1
|
Depreciation and amortization
|
44.6
|
|
44.4
|
Share-based compensation expense
|
12.2
|
|
12.0
|
Loss on sale of assets
|
0.4
|
|
0.4
|
Deferred compensation payments
|
(7.1)
|
|
(8.8)
|
Deferred income taxes
|
(10.5)
|
|
(0.8)
|
Cost of early retirement of long-term debt
|
—
|
|
26.1
|
Other, net
|
(0.9)
|
|
(1.6)
|
Changes in operating assets and liabilities
|
(113.0)
|
|
(122.6)
|
Net cash used by
operating activities
|
(39.9)
|
|
(18.8)
|
|
|
|
|
Cash Flow from Investing
Activities
|
|
|
|
Capital expenditures
|
(25.0)
|
|
(22.2)
|
Acquisition of Billie
|
(309.4)
|
|
—
|
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
|
4.7
|
|
2.2
|
Other, net
|
(1.0)
|
|
(0.8)
|
Net cash used by
investing activities
|
(325.7)
|
|
(13.6)
|
|
|
|
|
Cash Flow from Financing
Activities
|
|
|
|
Cash proceeds from the issuance of Senior Notes due
2029
|
—
|
|
500.0
|
Cash payments on Senior Notes due 2022
|
—
|
|
(500.0)
|
Cash proceeds from debt with original maturities greater than
90 days
|
399.0
|
|
—
|
Cash payments on debt with original maturities greater than
90 days
|
(220.0)
|
|
—
|
Net
increase in debt with original maturities of 90 days or
less
|
0.7
|
|
0.7
|
Debt issuance costs for Senior Notes due 2029
|
—
|
|
(5.9)
|
Cost of early retirement of long-term debt
|
—
|
|
(26.5)
|
Dividends to common shareholders
|
(16.7)
|
|
(8.4)
|
Repurchase of shares
|
(75.4)
|
|
(9.2)
|
Net
financing (outflow) inflow from the Accounts Receivable
Facility
|
(0.2)
|
|
0.7
|
Employee shares withheld for taxes
|
(9.7)
|
|
(3.0)
|
Other, net
|
0.6
|
|
(0.5)
|
Net cash from (used by)
financing activities
|
78.3
|
|
(52.1)
|
|
|
|
|
Effect of exchange rate
changes on cash
|
(3.8)
|
|
1.9
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
(291.1)
|
|
(82.6)
|
Cash and cash
equivalents, beginning of period
|
479.2
|
|
364.7
|
Cash and cash
equivalents, end of period
|
$
188.1
|
|
$
282.1
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL CARE COMPANY
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in
millions, except per share data)
|
|
Note 1 —
Segments
|
|
The
Company conducts its business in the following 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 have been
reported in the Wet Shave segment since the acquisition
date.
|
|
Segment net sales and profitability are presented
below:
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net Sales
|
|
|
|
|
|
|
|
Wet
Shave
|
$
305.0
|
|
$
292.7
|
|
$
591.1
|
|
$
571.8
|
Sun
and Skin Care
|
183.3
|
|
159.5
|
|
288.1
|
|
262.5
|
Feminine Care
|
59.4
|
|
67.1
|
|
131.8
|
|
136.1
|
Total net
sales
|
$
547.7
|
|
$
519.3
|
|
$
1,011.0
|
|
$
970.4
|
|
|
|
|
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
Wet
Shave
|
$
27.6
|
|
$
45.9
|
|
$
79.1
|
|
$
98.5
|
Sun
and Skin Care
|
42.3
|
|
36.2
|
|
46.0
|
|
41.4
|
Feminine Care
|
1.9
|
|
5.6
|
|
10.3
|
|
14.4
|
Total segment
profit
|
71.8
|
|
87.7
|
|
135.4
|
|
154.3
|
General corporate and other expenses
|
(17.2)
|
|
(13.4)
|
|
(28.0)
|
|
(25.5)
|
Restructuring and related costs
|
(3.7)
|
|
(5.5)
|
|
(5.9)
|
|
(9.9)
|
Acquisition and integration costs
|
(1.1)
|
|
(0.3)
|
|
(7.1)
|
|
(3.3)
|
Value added tax settlement costs
|
—
|
|
—
|
|
(3.4)
|
|
—
|
Sun
Care reformulation costs
|
(0.2)
|
|
—
|
|
(3.5)
|
|
—
|
Cost of early retirement of long-term debt
|
—
|
|
(26.1)
|
|
—
|
|
(26.1)
|
Amortization of intangibles
|
(7.9)
|
|
(5.6)
|
|
(14.0)
|
|
(11.1)
|
Interest and other expenses, net
|
(14.6)
|
|
(17.3)
|
|
(30.2)
|
|
(33.7)
|
Total earnings before income
taxes
|
$
27.1
|
|
$
19.5
|
|
$
43.3
|
|
$
44.7
|
|
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 March 31,
2022
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP — Reported
|
$
230.1
|
|
$
101.3
|
|
$
41.7
|
|
$
27.1
|
|
$
3.9
|
|
$
23.2
|
|
$
0.43
|
Restructuring and related costs
|
—
|
|
0.2
|
|
3.7
|
|
3.7
|
|
1.0
|
|
2.7
|
|
0.05
|
Acquisition and integration costs
|
0.5
|
|
0.6
|
|
1.1
|
|
1.1
|
|
0.2
|
|
0.9
|
|
0.02
|
Sun
Care reformulation costs
|
0.2
|
|
—
|
|
0.2
|
|
0.2
|
|
—
|
|
0.2
|
|
—
|
Total Adjusted Non-GAAP
|
$
230.8
|
|
$
100.5
|
|
$
46.7
|
|
$
32.1
|
|
$
5.1
|
|
$
27.0
|
|
$
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
42.0%
|
|
18.5%
|
|
7.6%
|
|
GAAP effective tax
rate
|
14.4%
|
|
|
Adjusted as a percent
of net sales
|
42.1%
|
|
18.3%
|
|
8.5%
|
|
Adjusted effective
tax rate
|
16.0%
|
|
|
|
|
|
Three Months Ended March 31,
2021
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP — Reported
|
$
241.7
|
|
$
93.4
|
|
$
62.9
|
|
$
19.5
|
|
$
5.1
|
|
$
14.4
|
|
$
0.26
|
Restructuring and related costs
|
—
|
|
2.8
|
|
5.5
|
|
5.5
|
|
1.3
|
|
4.2
|
|
0.08
|
Acquisition and integration costs
|
—
|
|
0.3
|
|
0.3
|
|
0.3
|
|
0.1
|
|
0.2
|
|
—
|
Cost of early retirement of long-
term debt
|
—
|
|
—
|
|
—
|
|
26.1
|
|
6.4
|
|
19.7
|
|
0.36
|
Total Adjusted Non-GAAP
|
$
241.7
|
|
$
90.3
|
|
$
68.7
|
|
$
51.4
|
|
$
12.9
|
|
$
38.5
|
|
$
0.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
46.6%
|
|
18.0%
|
|
12.1%
|
|
GAAP effective tax
rate
|
26.6%
|
|
|
Adjusted as a percent
of net sales
|
46.6%
|
|
17.4%
|
|
13.2%
|
|
Adjusted effective
tax rate
|
25.3%
|
|
|
|
|
|
Six Months Ended March 31, 2022
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP — Reported
|
$
420.0
|
|
$
198.2
|
|
$
73.5
|
|
$
43.3
|
|
$
8.9
|
|
$
34.4
|
|
$
0.63
|
Restructuring and related costs
|
—
|
|
0.2
|
|
5.9
|
|
5.9
|
|
1.6
|
|
4.3
|
|
0.08
|
Acquisition and integration costs
|
0.8
|
|
6.3
|
|
7.1
|
|
7.1
|
|
0.5
|
|
6.6
|
|
0.12
|
Value added tax settlement costs
|
—
|
|
3.4
|
|
3.4
|
|
3.4
|
|
1.1
|
|
2.3
|
|
0.04
|
Sun
Care reformulation costs
|
3.5
|
|
—
|
|
3.5
|
|
3.5
|
|
0.9
|
|
2.6
|
|
0.05
|
Total Adjusted Non-GAAP
|
$
424.3
|
|
$
188.3
|
|
$
93.4
|
|
$
63.2
|
|
$
13.0
|
|
$
50.2
|
|
$
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
41.5%
|
|
19.6%
|
|
7.3%
|
|
GAAP effective tax
rate
|
20.5%
|
|
|
Adjusted as a percent
of net sales
|
42.0%
|
|
18.6%
|
|
9.2%
|
|
Adjusted effective
tax rate
|
20.5%
|
|
|
|
|
|
Six Months Ended March 31, 2021
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP — Reported
|
$
435.0
|
|
$
186.5
|
|
$ 104.5
|
|
$
44.7
|
|
$
12.6
|
|
$
32.1
|
|
$
0.58
|
Restructuring and related costs
|
0.1
|
|
3.4
|
|
9.9
|
|
9.9
|
|
2.5
|
|
7.4
|
|
0.14
|
Acquisition and integration costs
|
1.3
|
|
2.0
|
|
3.3
|
|
3.3
|
|
0.7
|
|
2.6
|
|
0.05
|
Cost of early retirement of long-
term debt
|
—
|
|
—
|
|
—
|
|
26.1
|
|
6.4
|
|
19.7
|
|
0.36
|
Total Adjusted Non-GAAP
|
$
436.4
|
|
$
181.1
|
|
$ 117.7
|
|
$
84.0
|
|
$
22.2
|
|
$
61.8
|
|
$
1.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
44.8%
|
|
19.2%
|
|
10.8%
|
|
GAAP effective tax
rate
|
28.4%
|
|
|
Adjusted as a percent
of net sales
|
45.0%
|
|
18.7%
|
|
12.1%
|
|
Adjusted effective
tax rate
|
26.5%
|
|
|
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 second
quarter and first six months ended March 31, 2022, as compared to
the
corresponding period in the prior
quarter.
|
|
Net Sales
|
Quarter Ended March 31, 2022
|
|
Wet
Shave
|
|
Sun and Skin
Care
|
|
Feminine
Care
|
|
Total
|
Net Sales - Q2
FY21
|
$
292.7
|
|
|
|
$
159.5
|
|
|
|
$ 67.1
|
|
|
|
$
519.3
|
|
|
Organic
|
(6.1)
|
|
(2.1)%
|
|
24.8
|
|
15.5%
|
|
(7.6)
|
|
(11.4)%
|
|
11.1
|
|
2.1%
|
Impact of Billie
acquisition, net
|
27.4
|
|
9.4%
|
|
—
|
|
—%
|
|
—
|
|
—%
|
|
27.4
|
|
5.3%
|
Impact of
currency
|
(9.0)
|
|
(3.1)%
|
|
(1.0)
|
|
(0.6)%
|
|
(0.1)
|
|
(0.1)%
|
|
(10.1)
|
|
(1.9)%
|
Net Sales - Q2
FY22
|
$
305.0
|
|
4.2%
|
|
$
183.3
|
|
14.9%
|
|
$ 59.4
|
|
(11.5)%
|
|
$
547.7
|
|
5.5%
|
|
Net Sales
|
Six Months Ended March 31, 2022
|
|
Wet
Shave
|
|
Sun and Skin
Care
|
|
Feminine
Care
|
|
Total
|
Net Sales - Q2
FY21
|
$
571.8
|
|
|
|
$
262.5
|
|
|
|
$
136.1
|
|
|
|
$
970.4
|
|
|
Organic
|
(0.1)
|
|
—%
|
|
26.8
|
|
10.2%
|
|
(4.3)
|
|
(3.2)%
|
|
22.4
|
|
2.3%
|
Impact of Billie
acquisition, net
|
34.2
|
|
6.0%
|
|
—
|
|
—%
|
|
—
|
|
—%
|
|
34.2
|
|
3.5%
|
Impact of
currency
|
(14.8)
|
|
(2.6)%
|
|
(1.2)
|
|
(0.4)%
|
|
—
|
|
—%
|
|
(16.0)
|
|
(1.6)%
|
Net Sales - Q2
FY22
|
$
591.1
|
|
3.4%
|
|
$
288.1
|
|
9.8%
|
|
$
131.8
|
|
(3.2)%
|
|
$ 1,011.0
|
|
4.2%
|
|
Organic net sales were unfavorably impacted in fiscal 2022 by
the change in classification of sales from third party to
intercompany as a result of the Billie
acquisition in fiscal 2022. The impact of the Billie acquisition,
net is calculated as
Billie net third party sales after the
acquisition date less shipments to Billie by the Company in the
comparable prior year
period, which totaled $6.7.
|
|
Segment Profit
|
Quarter Ended March 31, 2022
|
|
Wet
Shave
|
|
Sun and Skin
Care
|
|
Feminine
Care
|
|
Total
|
Segment Profit - Q2
FY21
|
$ 45.9
|
|
|
|
$ 36.2
|
|
|
|
$
5.6
|
|
|
|
$ 87.7
|
|
|
Organic
|
(10.9)
|
|
(23.7)%
|
|
6.0
|
|
16.6%
|
|
(3.7)
|
|
(66.1)%
|
|
(8.6)
|
|
(9.8)%
|
Impact of Billie
acquisition, net
|
(5.2)
|
|
(11.3)%
|
|
—
|
|
—%
|
|
—
|
|
—%
|
|
(5.2)
|
|
(5.9)%
|
Impact of
currency
|
(2.2)
|
|
(4.9)%
|
|
0.1
|
|
0.3%
|
|
—
|
|
—%
|
|
(2.1)
|
|
(2.4)%
|
Segment Profit - Q2
FY22
|
$ 27.6
|
|
(39.9)%
|
|
$ 42.3
|
|
16.9%
|
|
$
1.9
|
|
(66.1)%
|
|
$ 71.8
|
|
(18.1)%
|
|
Segment Profit
|
Six Months Ended March 31, 2022
|
|
Wet
Shave
|
|
Sun and Skin
Care
|
|
Feminine
Care
|
|
Total
|
Segment Profit - Q2
FY21
|
$ 98.5
|
|
|
|
$ 41.4
|
|
|
|
$ 14.4
|
|
|
|
$
154.3
|
|
|
Organic
|
(7.7)
|
|
(7.8)%
|
|
4.7
|
|
11.4%
|
|
(4.2)
|
|
(29.2)%
|
|
(7.2)
|
|
(4.7)%
|
Impact of Billie
acquisition, net
|
(7.6)
|
|
(7.7)%
|
|
—
|
|
—%
|
|
—
|
|
—%
|
|
(7.6)
|
|
(4.9)%
|
Impact of
currency
|
(4.1)
|
|
(4.2)%
|
|
(0.1)
|
|
(0.3)%
|
|
0.1
|
|
0.7%
|
|
(4.1)
|
|
(2.7)%
|
Segment Profit - Q2
FY22
|
$ 79.1
|
|
(19.7)%
|
|
$ 46.0
|
|
11.1%
|
|
$ 10.3
|
|
(28.5)%
|
|
$
135.4
|
|
(12.3)%
|
|
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
March 31,
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net earnings
|
$
23.2
|
|
$
14.4
|
|
$
34.4
|
|
$
32.1
|
Income tax
provision
|
3.9
|
|
5.1
|
|
8.9
|
|
12.6
|
Interest expense,
net
|
18.4
|
|
17.3
|
|
35.6
|
|
34.7
|
Depreciation and
amortization
|
23.2
|
|
22.2
|
|
44.6
|
|
44.4
|
EBITDA
|
$
68.7
|
|
$
59.0
|
|
$
123.5
|
|
$
123.8
|
|
|
|
|
|
|
|
|
Restructuring and
related costs
|
3.7
|
|
5.5
|
|
5.9
|
|
9.9
|
Acquisition and
integration costs
|
1.1
|
|
0.3
|
|
7.1
|
|
3.3
|
Value added tax
settlement costs
|
—
|
|
—
|
|
3.4
|
|
—
|
Sun Care reformulation
costs
|
0.2
|
|
—
|
|
3.5
|
|
—
|
Cost of early
retirement of long-term debt
|
—
|
|
26.1
|
|
—
|
|
26.1
|
Adjusted EBITDA
|
$
73.7
|
|
$
90.9
|
|
$
143.4
|
|
$
163.1
|
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
|
|
$1.93 -
$2.21
|
|
|
|
Restructuring and
related costs
|
approx.
|
0.27
|
Acquisition and
integration costs
|
approx.
|
0.17
|
Value added tax
settlement costs
|
approx.
|
0.06
|
Sun Care reformulation
costs
|
approx.
|
0.06
|
Income
taxes(1)
|
approx.
|
(0.11)
|
|
|
|
Fiscal 2022 Adjusted
EPS Outlook (Non-GAAP)
|
|
$2.38 -
$2.66
|
|
(1) Income tax effect of the adjustments to
Fiscal 2022 GAAP EPS noted above.
|
|
Adjusted EBITDA Outlook
|
|
|
Fiscal 2022 GAAP Net
Income
|
approx.
|
$105 -
$120
|
Income tax
provision
|
approx.
|
32
|
Interest expense,
net
|
approx.
|
71
|
Depreciation and
amortization
|
approx.
|
92
|
EBITDA
|
approx.
|
$300 -
$315
|
|
|
|
Restructuring and
related costs
|
approx.
|
15
|
Acquisition and
integration costs
|
approx.
|
9
|
Value added tax
settlement costs
|
approx.
|
3
|
Sun Care reformulation
costs
|
approx.
|
3
|
Fiscal 2022 Adjusted
EBITDA
|
approx.
|
$330 -
$345
|
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SOURCE Edgewell Personal Care Company