SHELTON, Conn., Aug. 5, 2021 /PRNewswire/ -- Edgewell
Personal Care Company (NYSE: EPC) today announced results for its
third fiscal quarter 2021 ended June
30, 2021.
Executive Summary
- Net sales were $573.7 million, an
increase of 18.6% compared to the prior year period.
- Organic net sales increased 12.5% compared to the prior year
period. (Organic basis excludes the impact of the Cremo acquisition
and the translational impact from currency.)
- GAAP Diluted Earnings Per Share ("EPS") were $0.74 for the third quarter compared to
$0.09 in the prior year
period.
- Adjusted EPS were $0.89 for the
third quarter, compared to $0.66 in
the prior year period.
- The Company ended the fiscal third quarter with $438 million in cash on hand, access to an
undrawn $425 million credit facility
and a net debt leverage ratio of 2.4.
- The Board of Directors declared a cash dividend of $0.15 per common share for the third fiscal
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.
"This was a strong quarter highlighted by double digit organic
net sales growth that exceeded our expectations, gross margin
accretion, and meaningful increases in adjusted EPS and free cash
flow. Additionally, we were encouraged to see strong
consumption growth in our core Wet Shave and Sun Care categories in North America, although COVID-19 continued to
negatively impact many of our international markets. Our
organization continued to execute well against our strategic
priorities, delivering $19 million in
gross Project Fuel savings in the quarter, helping to offset
significantly higher commodity and other input costs.
Importantly, our results are underpinned by meaningful investments
in our brands and products, innovation and increased digital
engagement and activation, all of which are important catalysts to
our sustained long-term growth." said Rod
Little, Edgewell's President and Chief Executive
Officer.
Mr. Little added, "With the strong results this quarter, we
remain well-positioned to meet our organic sales outlook for the
full fiscal year and we are increasing our annual outlook for
adjusted EPS and adjusted EBITDA. Our teams are focused on
achieving our objectives for fiscal 2021 while also advancing our
long-term strategy to transform Edgewell into a growing consumer
centric company delivering sustainable top line growth and
predictable profit and cash generation."
Fiscal 3Q 2021 Operating Results (Unaudited)
Net sales were $573.7
million in the quarter, an increase of 18.6%, as compared to
the prior year period. Excluding the positive impacts from
the Cremo acquisition and from currency translation, organic net
sales increased 12.5%, driven by strong Sun
Care and Wet Shave performance across both North America and International markets, and
in part reflecting the impact of cycling prior year COVID-19
related headwinds.
Gross profit was $270.3
million, as compared to $222.7
million in the prior year period. Gross margin as a
percent of net sales for the third quarter of fiscal 2021 was
47.1%. Adjusted gross margin percentage increased 40 basis points
compared to the prior year period, as favorable pricing, product
mix and trade promotional spending, and gross savings from Project
Fuel more than offset higher commodity and supply chain costs.
Advertising and sales promotion expense
("A&P") increased $14.4
million to $81.9 million, or
14.3% of net sales, as compared to $67.5
million, or 13.9% of net sales in the prior year period,
reflecting increased investments to support critical commercial
efforts, including; the Schick Hydro relaunch, Stubble Eraser,
Skintimate and Sun Care in-season
support. Digital spending represented over 70% of overall
advertising spend in the quarter.
Selling, general and administrative expense
("SG&A") was $97.5
million, or 17.0% of net sales, as compared to $91.3 million, or 18.9% of net sales in the prior
year period. Adjusted SG&A, which excludes restructuring
charges and acquisition and integration costs, decreased 200-basis
points as a percent of net sales, as the benefit of sales leverage
in the current quarter more than offset increased operating costs
associated with the Cremo business and negative translational
currency.
The Company recorded pre-tax restructuring and other
non-recurring expenses of $8.2
million in the quarter in support of Project Fuel,
consisting largely of severance and outplacement, IT enablement and
consulting costs, as well as $1.3
million in acquisition and integration costs related to the
Cremo acquisition.
Operating income was $71.1
million compared to $43.5
million in the prior year quarter. Adjusted operating income
was $80.6 million in the quarter,
compared to $58.1 million in the
prior year period, with adjusted operating profit margin increasing
200 basis points over last year.
The effective tax rate for the first nine months of
fiscal 2021 was 26.1% as compared to 26.1% in the prior year
period. The adjusted effective tax rate for the first nine months
of fiscal 2021 was 24.8%, up from the prior year period adjusted
tax rate of 23.7%. The fiscal 2021 effective tax rate reflects
higher unfavorable GILTI and IRS Code Section 162(m) permanent
adjustments compared to fiscal 2020.
GAAP net earnings for the quarter were $40.8 million or $0.74 per share compared to $4.7 million or $0.09 per share in the third quarter of fiscal
2020. Adjusted net earnings in the quarter were $49.2 million or $0.89 per share, as compared to $35.9 million or $0.66 per share in the prior year period. The
increase in adjusted net earnings was driven by higher adjusted
operating income partly offset by higher interest expense and the
unfavorable impact of foreign currency movement and hedge
remeasurement income. Adjusted EBITDA was $101.2 million compared to $82.8 million in the prior year period.
Net cash from operating activities was $155.9
million for the first nine months of fiscal 2021 compared to
$118.6 million in the prior year
period, driven by higher net earnings.
Project Fuel
Project Fuel is an enterprise-wide transformational initiative
that was launched in the second fiscal quarter of 2018, to address
all aspects of Edgewell's business and cost structure, simplifying
and transforming the organization, structure and key processes.
Project Fuel is facilitating further re-investment in the Company's
growth strategy while enabling Edgewell to achieve its desired
future state operations.
Fiscal third quarter 2021 Project Fuel related gross savings
were approximately $19 million,
bringing cumulative gross savings to approximately $264 million. The Company now expects Project
Fuel to generate approximately $280
million in total project gross savings by the end of the
2021 fiscal year. The savings generated will be used to fuel
investments and brand building in strategic growth initiatives,
mitigate anticipated operational cost headwinds from inflation and
other rising input costs and improve the overall profitability and
cash flow of the Company.
To implement the restructuring element of Project Fuel, the
Company now expects to incur one-time pre-tax charges of
approximately $160 million through
the end of the 2021 fiscal year.
Fiscal 3Q 2021 Operating Segment Results (Unaudited)
Wet Shave (Men's Systems, Women's Systems, Disposables,
and Shave Preps)
Wet Shave net sales increased $26.9
million, or 9.7%. Excluding the impact of currency
movements, organic net sales increased $15.9
million or 5.7%, driven by on-going growth in Women's shave,
both branded and private label, and higher consumption across the
full category. By region, North
America organic net sales increased 4.6% while International
markets increased 6.6%. Wet Shave segment profit decreased
$1.5 million, or 3.4%, as higher
sales and gross profit, were offset by substantially higher A&P
spending.
Sun and Skin Care (Sun
Care, Wet Ones, Bulldog, Jack
Black and Cremo)
Sun and Skin Care net sales increased $58.3 million, or 42.6%, as compared to the prior
year period. Excluding the impact of the Cremo acquisition and
currency movements, organic net sales increased $40.4 million, or 29.5%. The increase in organic
net sales was primarily driven by Sun
Care growth of nearly 50%, reflecting a sharp recovery in
consumption as compared to the heavily COVID-19 impacted prior year
period in the U.S. market, as well as 17% organic net sales growth
in Men's grooming. Wet Ones organic net sales contracted
$8.5 million, or 32% in the quarter,
reflecting on-going high retailer inventory and lower consumption
as we cycled prior year COVID-driven performance. Sun and Skin Care
segment profit increased $21.5
million despite increased A&P spend, driven by higher
sales and gross profit.
Feminine Care (Tampons, Pads, and Liners)
Feminine Care net sales increased $4.6
million, or 6.7%, as compared to the prior year period. The
increase in net sales was largely driven by increased consumption
as the category began to recover from the prior year's COVID-19
related declines. Feminine Care segment profit increased
$1.7 million, or 14.2% as compared to
the prior year period, driven by higher gross margin, partly offset
by increased A&P spending.
Dividend and Share Repurchase
On August 5, 2021, the Board of
Directors declared a quarterly cash dividend of $0.15 per common share for the third fiscal
quarter. The dividend is payable October 5,
2021 to stockholders of record as of the close of business
on September 9, 2021.
Through the first three quarters of fiscal 2021, the
Company completed share repurchases of 250,000 shares for a cost of
$9.2 million. The Company has 9.75
million shares of common stock available for repurchase in the
future under the Board's 2018 authorization.
Full Fiscal Year 2021 Financial Outlook
The Company is updating its previously provided outlook
assumptions for fiscal 2021:
- Reported net sales to increase mid-single digits
-
- Includes: 160 basis-point net benefit from the Cremo
acquisition and the Infant and Pet Care divestiture and a 190
basis-point benefit from currency translation
- Organic sales to increase low-single digits
- Adjusted operating profit margin to be consistent with fiscal
2020
-
- Project Fuel costs of approximately $25
million (previously $25 to
$30 million)
- Project Fuel Gross Savings of approximately $70 million (previously $50 to $60
million)
- GAAP EPS in the range of $2.00 to
$2.10 (Previously $1.80 to $2.00)
-
- Includes: Project Fuel restructuring charges, cost of early
retirement of long-term debt, IT enablement costs, the UK tax rate
increase, acquisition and integration costs
- Adjusted EPS in the range of $2.80 to $2.90
(previously $2.62 to $2.82)
- Adjusted EBITDA in the range of $358 to $366
million (previously $345 to
$360 million)
- Adjusted effective tax rate in the range of 23.5% to 24.5%
- Capital expenditures of approximately 3.0% of net sales
- Free cash flow expected to be approximately 100% of non-GAAP
net earnings
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® and Wilkinson Sword® men's and women's shaving
systems and disposable razors; Edge® and Skintimate® shave
preparations; Playtex®, Stayfree®, Carefree® and o.b.® feminine
care products; Banana Boat®, Hawaiian Tropic®, 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 5,800 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. Many factors outside our control (including the ongoing
COVID-19 pandemic), 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.
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 20, 2020.
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, cost of early retirement
of long-term debt, the UK tax rate increase, incremental pandemic
charges, business evaluation costs, and the gain on sale of the
Infant and Pet Care business. Reconciliations of non-GAAP measures,
including reconciliations of measures related to the Company's
fiscal 2021 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, acquisitions,
and divestitures. This information is provided because these types
of fluctuations can distort the underlying change in net sales and
segment profit either positively or negatively.
- 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, cost of early retirement of long
term debt, the UK tax rate increase, COVID-19 expenses, the gain on
sale of the Infant and Pet Care business, and advisory expenses in
connection with the evaluation of the Feminine and Infant Care businesses.
- 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
June 30,
|
|
Nine Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
$
|
573.7
|
|
|
$
|
483.9
|
|
|
$
|
1,544.1
|
|
|
$
|
1,460.9
|
|
Cost of products
sold
|
303.4
|
|
|
261.2
|
|
|
838.8
|
|
|
802.1
|
|
Gross
profit
|
270.3
|
|
|
222.7
|
|
|
705.3
|
|
|
658.8
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
97.5
|
|
|
91.3
|
|
|
284.0
|
|
|
307.8
|
|
Advertising and sales
promotion expense
|
81.9
|
|
|
67.5
|
|
|
191.5
|
|
|
155.6
|
|
Research and
development expense
|
14.6
|
|
|
12.4
|
|
|
42.6
|
|
|
40.1
|
|
Restructuring
charges
|
5.2
|
|
|
8.0
|
|
|
11.6
|
|
|
20.6
|
|
Operating
income
|
71.1
|
|
|
43.5
|
|
|
175.6
|
|
|
134.7
|
|
Gain on sale of
Infant and Pet Care business
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1)
|
|
Interest expense
associated with debt
|
16.4
|
|
|
15.5
|
|
|
51.1
|
|
|
43.7
|
|
Cost of early
retirement of long-term debt
|
—
|
|
|
26.2
|
|
|
26.1
|
|
|
26.2
|
|
Other expense
(income), net
|
0.8
|
|
|
(3.5)
|
|
|
(0.2)
|
|
|
5.8
|
|
Earnings before
income taxes
|
53.9
|
|
|
5.3
|
|
|
98.6
|
|
|
63.1
|
|
Income tax
provision
|
13.1
|
|
|
0.6
|
|
|
25.7
|
|
|
16.5
|
|
Net
earnings
|
$
|
40.8
|
|
|
$
|
4.7
|
|
|
$
|
72.9
|
|
|
$
|
46.6
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic net earnings per share
|
0.75
|
|
|
0.09
|
|
|
1.34
|
|
|
0.86
|
|
Diluted net earnings per diluted share
|
0.74
|
|
|
0.09
|
|
|
1.32
|
|
|
0.86
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
54.4
|
|
|
54.3
|
|
|
54.4
|
|
|
54.3
|
|
Diluted
|
55.4
|
|
|
54.6
|
|
|
55.1
|
|
|
54.5
|
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL
CARE COMPANY
CONDENSED
CONSOLIDATED BALANCE SHEETS
(unaudited, in
millions)
|
|
|
June 30,
2021
|
|
September
30,
2020
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
437.5
|
|
|
$
|
364.7
|
|
Trade receivables,
less allowance for doubtful accounts
|
149.6
|
|
|
158.8
|
|
Inventories
|
359.2
|
|
|
314.1
|
|
Other current
assets
|
155.7
|
|
|
146.0
|
|
Total current
assets
|
1,102.0
|
|
|
983.6
|
|
Property, plant and
equipment, net
|
358.1
|
|
|
370.9
|
|
Goodwill
|
1,166.9
|
|
|
1,159.7
|
|
Other intangible
assets, net
|
914.4
|
|
|
928.1
|
|
Other
assets
|
105.8
|
|
|
98.6
|
|
Total
assets
|
$
|
3,647.2
|
|
|
$
|
3,540.9
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Notes
payable
|
24.8
|
|
|
21.1
|
|
Accounts
payable
|
215.9
|
|
|
181.9
|
|
Other current
liabilities
|
306.4
|
|
|
307.5
|
|
Total current
liabilities
|
547.1
|
|
|
510.5
|
|
Long-term
debt
|
1,233.6
|
|
|
1,237.9
|
|
Deferred income tax
liabilities
|
103.4
|
|
|
102.5
|
|
Other
liabilities
|
251.5
|
|
|
257.1
|
|
Total
liabilities
|
2,135.6
|
|
|
2,108.0
|
|
Shareholders'
equity
|
|
|
|
Common
shares
|
0.7
|
|
|
0.7
|
|
Additional paid-in
capital
|
1,624.7
|
|
|
1,631.8
|
|
Retained
earnings
|
829.9
|
|
|
782.4
|
|
Common shares in
treasury at cost
|
(777.3)
|
|
|
(790.4)
|
|
Accumulated other
comprehensive loss
|
(166.4)
|
|
|
(191.6)
|
|
Total shareholders'
equity
|
1,511.6
|
|
|
1,432.9
|
|
Total liabilities
and shareholders' equity
|
$
|
3,647.2
|
|
|
$
|
3,540.9
|
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL
CARE COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
|
|
|
Nine Months
Ended
June
30,
|
|
2021
|
|
2020
|
Cash Flow from
Operating Activities
|
|
|
|
Net
earnings
|
$
|
72.9
|
|
|
$
|
46.6
|
|
Depreciation and
amortization
|
65.9
|
|
|
65.5
|
|
Share-based
compensation expense
|
19.6
|
|
|
15.1
|
|
Loss on sale of
assets
|
0.6
|
|
|
1.2
|
|
Gain on sale of Infant
and Pet Care business
|
—
|
|
|
(4.1)
|
|
Deferred compensation
payments
|
(9.2)
|
|
|
(8.7)
|
|
Deferred income
taxes
|
(1.3)
|
|
|
(16.1)
|
|
Cost of early
retirement of long-term debt
|
26.1
|
|
|
26.2
|
|
Other, net
|
(0.8)
|
|
|
7.3
|
|
Changes in operating
assets and liabilities
|
(17.9)
|
|
|
(14.4)
|
|
Net cash from
operating activities
|
155.9
|
|
|
118.6
|
|
|
|
|
|
Cash Flow from
Investing Activities
|
|
|
|
Capital
expenditures
|
(34.1)
|
|
|
(26.9)
|
|
Proceeds from sale of
Infant and Pet Care business
|
7.5
|
|
|
95.8
|
|
Acquisition of
Cremo
|
(0.3)
|
|
|
—
|
|
Collection of deferred
purchase price on accounts receivable sold
|
2.6
|
|
|
3.9
|
|
Other, net
|
(1.8)
|
|
|
(1.5)
|
|
Net cash (used by)
from investing activities
|
(26.1)
|
|
|
71.3
|
|
|
|
|
|
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 the
issuance of Senior Notes due 2028
|
—
|
|
|
750.0
|
|
Cash payments on
Senior Notes due 2021
|
—
|
|
|
(600.0)
|
|
Cash proceeds from
debt with original maturities greater than 90 days
|
—
|
|
|
50.0
|
|
Cash payments on debt
with original maturities greater than 90 days
|
—
|
|
|
(167.0)
|
|
Net increase in debt
with original maturities of 90 days or less
|
2.4
|
|
|
1.7
|
|
Debt issuance costs
for Senior Notes due 2029
|
(6.5)
|
|
|
—
|
|
Debt issuance costs
for Senior Notes due 2028
|
—
|
|
|
(10.4)
|
|
Debt issuance costs
for the Revolving Credit Facility
|
—
|
|
|
(3.6)
|
|
Cost of early
retirement of long-term debt
|
(26.1)
|
|
|
(26.2)
|
|
Dividends to common
shareholders
|
(16.7)
|
|
|
—
|
|
Repurchase of
shares
|
(9.2)
|
|
|
—
|
|
Net financing inflow
(outflow) from the Accounts Receivable Facility
|
0.8
|
|
|
(14.4)
|
|
Employee shares
withheld for taxes
|
(4.0)
|
|
|
(1.7)
|
|
Other, net
|
(0.6)
|
|
|
—
|
|
Net cash used by
financing activities
|
(59.9)
|
|
|
(21.6)
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
2.9
|
|
|
2.0
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
72.8
|
|
|
170.3
|
|
Cash and cash
equivalents, beginning of period
|
364.7
|
|
|
341.6
|
|
Cash and cash
equivalents, end of period
|
$
|
437.5
|
|
|
$
|
511.9
|
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL CARE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in millions, except per share data)
Note 1 — Segments
The Company conducts its business in the following 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,
other charges such as restructuring and integration costs, cost of
early debt retirements, incremental pandemic expenses, the gain on
the sale of Infant care business, business evaluation 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 sale of its Infant and Pet Care
business in December 2019. As a
result, no additional Net Sales or Segment Profit will be reported
for the All Other segment in subsequent periods.
Segment net sales and profitability are presented below:
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net
Sales
|
|
|
|
|
|
|
|
Wet Shave
|
$
|
304.9
|
|
|
$
|
278.0
|
|
|
$
|
876.7
|
|
|
$
|
835.5
|
|
Sun and Skin
Care
|
195.2
|
|
|
136.9
|
|
|
457.7
|
|
|
369.5
|
|
Feminine
Care
|
73.6
|
|
|
69.0
|
|
|
209.7
|
|
|
229.1
|
|
All Other
|
—
|
|
|
—
|
|
|
—
|
|
|
26.8
|
|
Total net
sales
|
$
|
573.7
|
|
|
$
|
483.9
|
|
|
$
|
1,544.1
|
|
|
$
|
1,460.9
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
|
|
|
|
|
Wet Shave
|
$
|
43.1
|
|
|
$
|
44.6
|
|
|
$
|
141.6
|
|
|
$
|
142.0
|
|
Sun and Skin
Care
|
45.0
|
|
|
23.5
|
|
|
86.4
|
|
|
67.9
|
|
Feminine
Care
|
13.7
|
|
|
12.0
|
|
|
28.1
|
|
|
43.4
|
|
All Other
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
Total segment
profit
|
101.8
|
|
|
80.1
|
|
|
256.1
|
|
|
256.4
|
|
General corporate and
other expenses
|
(15.7)
|
|
|
(17.7)
|
|
|
(41.2)
|
|
|
(41.9)
|
|
Restructuring and
related costs
|
(8.2)
|
|
|
(10.4)
|
|
|
(18.1)
|
|
|
(30.8)
|
|
Cost of early
retirement of long-term debt
|
—
|
|
|
(26.2)
|
|
|
(26.1)
|
|
|
(26.2)
|
|
Acquisition and
integration costs
|
(1.3)
|
|
|
(0.3)
|
|
|
(4.6)
|
|
|
(32.0)
|
|
Gain on sale of Infant
and Pet Care business
|
—
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
COVID-19
expense
|
—
|
|
|
(3.9)
|
|
|
—
|
|
|
(3.9)
|
|
Feminine and Infant
Care evaluation costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3)
|
|
Amortization of
intangibles
|
(5.5)
|
|
|
(4.2)
|
|
|
(16.6)
|
|
|
(12.7)
|
|
Interest and other
expenses, net
|
(17.2)
|
|
|
(12.1)
|
|
|
(50.9)
|
|
|
(49.6)
|
|
Total earnings
before income taxes
|
$
|
53.9
|
|
|
$
|
5.3
|
|
|
$
|
98.6
|
|
|
$
|
63.1
|
|
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
June 30, 2021
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP —
Reported
|
$
|
270.3
|
|
$
|
97.5
|
|
$
|
71.1
|
|
|
$
|
53.9
|
|
|
$
|
13.1
|
|
|
$
|
40.8
|
|
$
|
0.74
|
|
Restructuring and
related costs
|
0.2
|
|
2.8
|
|
8.2
|
|
|
8.2
|
|
|
2.0
|
|
|
6.2
|
|
0.11
|
|
Acquisition and
integration costs
|
—
|
|
1.3
|
|
1.3
|
|
|
1.3
|
|
|
0.3
|
|
|
1.0
|
|
0.02
|
|
UK tax rate
increase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2)
|
|
|
1.2
|
|
0.02
|
|
Total Adjusted
Non-GAAP
|
$
|
270.5
|
|
$
|
93.4
|
|
$
|
80.6
|
|
|
$
|
63.4
|
|
|
$
|
14.2
|
|
|
$
|
49.2
|
|
$
|
0.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
47.1
|
%
|
|
17.0
|
%
|
|
12.4
|
%
|
|
GAAP effective tax
rate
|
24.2
|
%
|
|
|
Adjusted as a percent
of net sales
|
47.2
|
%
|
|
16.3
|
%
|
|
14.0
|
%
|
|
Adjusted effective
tax rate
|
22.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2020
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP —
Reported
|
$
|
222.7
|
|
|
$
|
91.3
|
|
|
$
|
43.5
|
|
|
$
|
5.3
|
|
|
$
|
0.6
|
|
|
$
|
4.7
|
|
|
$
|
0.09
|
|
Restructuring and
related costs
|
0.1
|
|
|
2.3
|
|
|
10.4
|
|
|
10.4
|
|
|
2.3
|
|
|
8.1
|
|
|
0.15
|
|
Acquisition and
integration costs
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
0.01
|
|
Cost of early
retirement of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
26.2
|
|
|
6.4
|
|
|
19.8
|
|
|
0.36
|
|
COVID-19
expenses
|
3.9
|
|
|
—
|
|
|
3.9
|
|
|
3.9
|
|
|
0.9
|
|
|
3.0
|
|
|
0.05
|
|
Total Adjusted
Non-GAAP
|
$
|
226.7
|
|
|
$
|
88.7
|
|
|
$
|
58.1
|
|
|
$
|
46.1
|
|
|
$
|
10.2
|
|
|
$
|
35.9
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
46.0
|
%
|
|
18.9
|
%
|
|
9.0
|
%
|
|
GAAP effective tax
rate
|
11.3
|
%
|
|
|
Adjusted as a percent
of net sales
|
46.8
|
%
|
|
18.3
|
%
|
|
12.0
|
%
|
|
Adjusted effective
tax rate
|
22.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2021
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP —
Reported
|
$
|
705.3
|
|
|
$
|
284.0
|
|
|
$
|
175.6
|
|
|
$
|
98.6
|
|
|
$
|
25.7
|
|
|
$
|
72.9
|
|
|
$
|
1.32
|
|
Restructuring and
related costs
|
0.3
|
|
|
6.2
|
|
|
18.1
|
|
|
18.1
|
|
|
4.4
|
|
|
13.7
|
|
|
0.25
|
|
Acquisition and
integration costs
|
1.3
|
|
|
3.3
|
|
|
4.6
|
|
|
4.6
|
|
|
1.1
|
|
|
3.5
|
|
|
0.06
|
|
Cost of early
retirement of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
26.1
|
|
|
6.4
|
|
|
19.7
|
|
|
0.36
|
|
UK tax rate
increase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2)
|
|
|
1.2
|
|
|
0.02
|
|
Total Adjusted
Non-GAAP
|
$
|
706.9
|
|
|
$
|
274.5
|
|
|
$
|
198.3
|
|
|
$
|
147.4
|
|
|
$
|
36.4
|
|
|
$
|
111.0
|
|
|
$
|
2.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
45.7
|
%
|
|
18.4
|
%
|
|
11.4
|
%
|
|
GAAP effective tax
rate
|
26.1
|
%
|
|
|
Adjusted as a percent
of net sales
|
45.8
|
%
|
|
17.8
|
%
|
|
12.8
|
%
|
|
Adjusted effective
tax rate
|
24.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2020
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP —
Reported
|
$
|
658.8
|
|
|
$
|
307.8
|
|
|
$
|
134.7
|
|
|
$
|
63.1
|
|
|
$
|
16.5
|
|
|
$
|
46.6
|
|
|
$
|
0.86
|
|
Restructuring and
related costs
|
0.2
|
|
|
10.0
|
|
|
30.8
|
|
|
30.8
|
|
|
6.9
|
|
|
23.9
|
|
|
0.44
|
|
Acquisition and
integration costs
|
—
|
|
|
32.0
|
|
|
32.0
|
|
|
32.0
|
|
|
7.8
|
|
|
24.2
|
|
|
0.45
|
|
Cost of early
retirement of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
26.2
|
|
|
6.4
|
|
|
19.8
|
|
|
0.36
|
|
Gain on sale of Infant
and Pet Care business
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1)
|
|
|
(2.6)
|
|
|
(1.5)
|
|
|
(0.03)
|
|
COVID-19
expenses
|
3.9
|
|
|
—
|
|
|
3.9
|
|
|
3.9
|
|
|
0.9
|
|
|
3.0
|
|
|
0.05
|
|
Feminine and Infant
Care evaluation costs
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
Total Adjusted
Non-GAAP
|
$
|
662.9
|
|
|
$
|
265.5
|
|
|
$
|
201.7
|
|
|
$
|
152.2
|
|
|
$
|
36.0
|
|
|
$
|
116.2
|
|
|
$
|
2.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
45.1
|
%
|
|
21.1
|
%
|
|
9.2
|
%
|
|
GAAP effective tax
rate
|
26.1
|
%
|
|
|
Adjusted as a percent
of net sales
|
45.4
|
%
|
|
18.2
|
%
|
|
13.8
|
%
|
|
Adjusted effective
tax rate
|
23.7
|
%
|
|
|
Note 3 - Net Sales and Profit by Segment
Operations for the Company are reported via three Segments. The
impact of disposition includes the sale of the Infant and Pet Care
business included in All Other. The impact of acquisitions includes
the operations of Cremo which was acquired in September 2020. The following tables present
changes in net sales and segment profit for the third quarter and
first nine months ended June 30,
2021, as compared to the corresponding period in the prior
year.
Net Sales (In
millions - Unaudited)
|
Quarter Ended June
30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Net Sales - Q3
FY20
|
$
|
278.0
|
|
|
|
|
$
|
136.9
|
|
|
|
|
$
|
69.0
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
483.9
|
|
|
|
Organic
|
15.9
|
|
|
5.7
|
%
|
|
40.4
|
|
|
29.5
|
%
|
|
4.2
|
|
|
6.1
|
%
|
|
—
|
|
|
—
|
%
|
|
60.5
|
|
|
12.5
|
%
|
Impact of
acquisitions
|
—
|
|
|
—
|
%
|
|
13.7
|
|
|
10.0
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
13.7
|
|
|
2.8
|
%
|
Impact of
currency
|
11.0
|
|
|
4.0
|
%
|
|
4.2
|
|
|
3.1
|
%
|
|
0.4
|
|
|
0.6
|
%
|
|
—
|
|
|
—
|
%
|
|
15.6
|
|
|
3.2
|
%
|
Net Sales - Q3
FY21
|
$
|
304.9
|
|
|
9.7
|
%
|
|
$
|
195.2
|
|
|
42.6
|
%
|
|
$
|
73.6
|
|
|
6.7
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
573.7
|
|
|
18.5
|
%
|
|
|
Net Sales (In
millions - Unaudited)
|
Nine Months Ended
June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Net Sales - Q3
FY20
|
$
|
835.5
|
|
|
|
|
$
|
369.5
|
|
|
|
|
$
|
229.1
|
|
|
|
|
$
|
26.8
|
|
|
|
|
$
|
1,460.9
|
|
|
|
Organic
|
14.8
|
|
|
1.8
|
%
|
|
36.2
|
|
|
9.8
|
%
|
|
(20.0)
|
|
|
(8.7)
|
%
|
|
—
|
|
|
—
|
%
|
|
31.0
|
|
|
2.1
|
%
|
Impact of
acquisitions
|
—
|
|
|
—
|
%
|
|
44.9
|
|
|
12.2
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
44.9
|
|
|
3.1
|
%
|
Impact of
disposition
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(26.8)
|
|
|
(100.0)
|
%
|
|
(26.8)
|
|
|
(1.8)
|
%
|
Impact of
currency
|
26.4
|
|
|
3.2
|
%
|
|
7.1
|
|
|
1.9
|
%
|
|
0.6
|
|
|
0.3
|
%
|
|
—
|
|
|
—
|
%
|
|
34.1
|
|
|
2.3
|
%
|
Net Sales - Q3
FY21
|
$
|
876.7
|
|
|
5.0
|
%
|
|
$
|
457.7
|
|
|
23.9
|
%
|
|
$
|
209.7
|
|
|
(8.4)
|
%
|
|
$
|
—
|
|
|
(100.0)
|
%
|
|
$
|
1,544.1
|
|
|
5.7
|
%
|
|
|
Segment Profit (In
millions - Unaudited)
|
Quarter Ended June
30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Segment Profit - Q3
FY20
|
$
|
44.6
|
|
|
|
|
$
|
23.5
|
|
|
|
|
$
|
12.0
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
80.1
|
|
|
|
Organic
|
(4.1)
|
|
|
(9.2)
|
%
|
|
18.4
|
|
|
78.3
|
%
|
|
1.4
|
|
|
11.7
|
%
|
|
—
|
|
|
—
|
%
|
|
15.7
|
|
|
19.6
|
%
|
Impact of
acquisitions
|
—
|
|
|
—
|
%
|
|
1.9
|
|
|
8.1
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1.9
|
|
|
2.4
|
%
|
Impact of
currency
|
2.6
|
|
|
5.7
|
%
|
|
1.2
|
|
|
5.1
|
%
|
|
0.3
|
|
|
2.5
|
%
|
|
—
|
|
|
—
|
%
|
|
4.1
|
|
|
5.1
|
%
|
Segment Profit - Q3
FY21
|
$
|
43.1
|
|
|
(3.5)
|
%
|
|
$
|
45.0
|
|
|
91.5
|
%
|
|
$
|
13.7
|
|
|
14.2
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
101.8
|
|
|
27.1
|
%
|
|
|
Segment Profit (In
millions - Unaudited)
|
Nine Months Ended
June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Segment Profit - Q3
FY20
|
$
|
142.0
|
|
|
|
|
$
|
67.9
|
|
|
|
|
$
|
43.4
|
|
|
|
|
$
|
3.1
|
|
|
|
|
$
|
256.4
|
|
|
|
Organic
|
(6.4)
|
|
|
(4.5)
|
%
|
|
11.5
|
|
|
16.9
|
%
|
|
(15.8)
|
|
|
(36.4)
|
%
|
|
—
|
|
|
—
|
%
|
|
(10.7)
|
|
|
(4.2)
|
%
|
Impact of
acquisitions
|
—
|
|
|
—
|
%
|
|
5.7
|
|
|
8.4
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
5.7
|
|
|
2.2
|
%
|
Impact of
disposition
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(3.1)
|
|
|
(100.0)
|
%
|
|
(3.1)
|
|
|
(1.2)
|
%
|
Impact of
currency
|
6.0
|
|
|
4.1
|
%
|
|
1.3
|
|
|
1.9
|
%
|
|
0.5
|
|
|
1.2
|
%
|
|
—
|
|
|
—
|
%
|
|
7.8
|
|
|
3.0
|
%
|
Segment Profit - Q3
FY21
|
$
|
141.6
|
|
|
(0.4)
|
%
|
|
$
|
86.4
|
|
|
27.2
|
%
|
|
$
|
28.1
|
|
|
(35.2)
|
%
|
|
$
|
—
|
|
|
(100.0)
|
%
|
|
$
|
256.1
|
|
|
(0.2)
|
%
|
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.
|
Quarter Ended
June 30,
|
|
Nine Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net
earnings
|
$
|
40.8
|
|
|
$
|
4.7
|
|
|
$
|
72.9
|
|
|
$
|
46.6
|
|
Income tax
provision
|
13.1
|
|
|
0.6
|
|
|
25.7
|
|
|
16.5
|
|
Interest expense,
net
|
16.3
|
|
|
15.7
|
|
|
51.0
|
|
|
43.4
|
|
Depreciation and
amortization
|
21.5
|
|
|
21.0
|
|
|
65.9
|
|
|
65.5
|
|
EBITDA
|
$
|
91.7
|
|
|
$
|
42.0
|
|
|
$
|
215.5
|
|
|
$
|
172.0
|
|
|
|
|
|
|
|
|
|
Restructuring and
related costs
|
8.2
|
|
|
10.4
|
|
|
18.1
|
|
|
30.8
|
|
Acquisition and
integration costs
|
1.3
|
|
|
0.3
|
|
|
4.6
|
|
|
32.0
|
|
Cost of early
retirement of long-term debt
|
—
|
|
|
26.2
|
|
|
26.1
|
|
|
26.2
|
|
Gain on sale of
Infant and Pet Care business
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1)
|
|
COVID-19
expenses
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
Feminine and Infant
Care evaluation costs
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
Adjusted
EBITDA
|
$
|
101.2
|
|
|
$
|
82.8
|
|
|
$
|
264.3
|
|
|
$
|
261.1
|
|
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 2021 results:
Adjusted EPS
Outlook
|
|
|
Fiscal 2021 GAAP
EPS
|
|
$2.00 -
$2.10
|
|
|
|
Restructuring and
related costs
|
approx.
|
0.50
|
Acquisition and
integration costs
|
approx.
|
0.10
|
Cost of early
retirement of long-term debt
|
approx.
|
0.47
|
UK tax rate
increase
|
approx.
|
0.02
|
Income
taxes(1)
|
approx.
|
(0.29)
|
|
|
|
Fiscal 2021 Adjusted
EPS Outlook (Non-GAAP)
|
|
$2.80 -
$2.90
|
|
(1) Income tax
effect of the adjustments to Fiscal 2021 GAAP EPS noted
above.
|
|
Adjusted EBITDA
Outlook
|
|
|
Fiscal 2021 GAAP Net
Income
|
approx.
|
$106 -
$114
|
Income tax
provision
|
approx.
|
40
|
Interest expense,
net
|
approx.
|
68
|
Depreciation and
amortization
|
approx.
|
86
|
EBITDA
|
approx.
|
$300 -
$308
|
|
|
|
Restructuring and
related costs
|
approx.
|
27
|
Acquisition and
integration costs
|
approx.
|
5
|
Cost of early
retirement of long-term debt
|
approx.
|
26
|
Fiscal 2021 Adjusted
EBITDA
|
approx.
|
$358- $366
|
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SOURCE Edgewell Personal Care Company