Net Sales Increase of 9.3%, or 11.4%
Organic
8th Consecutive Quarter of Organic Net Sales
Growth
Increased Outlook for Reported and Organic Net
Sales Growth to the High End of Previous Range
SHELTON,
Conn., May 9, 2023 /PRNewswire/ -- Edgewell
Personal Care Company (NYSE: EPC) today announced results for its
second fiscal quarter 2023 ended March
31, 2023.
Executive Summary
- Net sales were $598.4, an
increase of 9.3% compared to the prior year quarter.
- Organic net sales increased 11.4% (Organic basis excludes the
unfavorable impact from currency movements.)
- GAAP Diluted net Earnings Per Share ("EPS") were $0.37 for the second fiscal quarter compared to
$0.43 in the prior year quarter.
- Adjusted EPS were $0.56,
inclusive of a $0.16 unfavorable
impact from currency movements, compared to $0.50 in the prior year quarter.
- Ended the second fiscal quarter with $155.2 million in cash on hand, access to an
additional $243.1 million revolving
credit facility and a net debt leverage ratio of 3.8x.
- Returned $22.8 million to
shareholders in the form of $15.0
million in share repurchases and $7.8
million of dividends in the second fiscal quarter.
- Board of Directors declared a cash dividend of $0.15 per common share on May 8, 2023 for the second fiscal quarter.
- Increased the fiscal 2023 outlook for organic net sales growth
to the high end of the previously provided range and maintained
outlook range for Adjusted EPS and EBITDA.
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.
"Our results this quarter represented another meaningful step
forward in the continued transformation of our business. We
delivered better than expected top and bottom-line results, fueled
by increasingly healthy categories and strong operational and
commercial execution by our entire organization. This was our
eighth straight quarter of year-over-year organic growth, with
growth in all major geographic regions and all segments of the
business, underpinned by volume growth and reflecting strong
consumer demand for our brands across key categories and
markets. While we continue to operate in a challenging and
uncertain environment, we are increasingly confident in the
underlying strength of our business, with our outlook for organic
net sales now expected to be at the high end of our previously
provided range."
Fiscal 2Q 2023 Operating Results (Unaudited)
Net sales were $598.4
million in the quarter, an increase of 9.3%, including an
$11.8 million unfavorable impact from
currency movements. Organic net sales increased 11.4%, with
growth in all segments and major geographic regions, as
international markets increased 13.2 % and North America markets increased 10.5%.
In aggregate, growth in organic net sales was driven largely in
equal parts by increased pricing and volumes.
Gross profit was $241.7
million, inclusive of a $10.6
million unfavorable impact from currency movements, as
compared to $230.1 million in the
prior year quarter. Gross margin as a percent of net sales
was 40.4%, a decline of 160-basis points compared to the prior
year period. Adjusted gross margin decreased 170-basis points, or
75-basis points at constant currency, as gross inflationary
pressure of approximately 550-basis points, was mostly offset by
approximately 220-basis points of productivity savings and a
285-basis points benefit from higher pricing and promotion
management.
Advertising and sales promotion expense
("A&P") was $62.9
million, or 10.5% of net sales, a decrease of $7.0 million, compared to $69.9 million, or 12.8% of net sales in the prior
year quarter. Excluding the favorable impact of currency
translation, A&P decreased $5.8
million compared to the prior year quarter, primarily due to
timing of brand investments and marketing campaigns versus a year
ago.
Selling, general and administrative expense
("SG&A") was $105.2
million, or 17.6% of net sales, as compared to $101.3 million, or 18.5% of net sales in the
prior year quarter. Adjusted SG&A as a percent of net sales
decreased 110-basis points as improved leverage, the benefits of
operational efficiency programs and favorable currency movements
more than offset the impact of higher people costs and travel
expense.
The Company recorded pre-tax restructuring expenses of
$3.0 million in the quarter,
consisting largely of severance and outplacement costs in support
of cost efficiency programs, as well as $2.0
million in acquisition and integration costs related to the
Billie acquisition.
Operating income, inclusive of a $7.4 million unfavorable impact from currency
movements, was $56.2 million compared
to $41.7 million in the prior year
quarter. Adjusted operating income increased 33.8% to $62.5 million, or 10.4% of net sales, compared to
$46.7 million, or 8.5% of net sales
in the prior year quarter, as increased gross profit and lower
expenses, were partly offset by the impact of unfavorable currency
movements.
Interest expense associated with debt was
$20.7 million, compared to
$18.0 million in the prior year
period. The increase in interest expense was the result of higher
interest rates and a higher overall debt balance on the Company's
revolving credit facility.
Other expense (income), net was an expense of
$9.5 million compared to $3.4 million of income in the prior year quarter.
This included a $7.2 million charge
for the wind-up of Canada's
defined benefit plan. On an adjusted basis, expense was
$2.3 million.
The effective tax rate for the first six months of fiscal
2023 was 27.0% compared to 20.5% in the prior year period.
The adjusted effective tax rate for the first six months of fiscal
2023 was 26.6%, up from the prior year period adjusted effective
tax rate of 20.5%. The change in the adjusted effective tax
rate was primarily due to an unfavorable mix of earnings in higher
tax rate jurisdictions.
GAAP net earnings were $19.0
million or $0.37 per diluted
share compared to $23.2 million or
$0.43 per diluted share in the second
quarter of fiscal 2022. Adjusted net earnings were $29.0 million or $0.56 per share, inclusive of a $0.16 unfavorable impact from currency movements,
compared to $27.0 million or
$0.50 per share in the prior year
quarter. Adjusted EBITDA was $83.0
million, inclusive of a $10.3
million unfavorable currency impact, compared to
$73.7 million in the prior year
quarter.
Net cash from operating activities was $1.9 million for the six months ending
March 31, 2023 compared to cash used
by operating activities of $39.9
million in the prior year period, driven by a lower net
working capital build.
Capital Allocation
On May 8, 2023, 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 6, 2023 to shareholders of record as of the
close of business on June 7,
2023. During the second quarter of fiscal 2023, the Company
paid dividends totaling $7.8 million
to stockholders.
During the second quarter of fiscal 2023, the Company completed
share repurchases of approximately 0.4 million shares at a total
cost of $15.0 million. As of
March 31, 2023 the Company had
5.7 million shares of common stock available for repurchase in
the future under the Board's 2018 authorization.
Fiscal 2Q 2023 Operating Segment Results (Unaudited)
Wet Shave (Men's Systems, Women's Systems, Disposables,
and Shave Preps)
Net sales increased $3.6 million,
or 1.2%. Organic net sales increased $14.0
million or 4.6%, with balanced growth in both North America and international markets,
driven largely by increased pricing, as volumes were essentially
flat. Growth in Men's Systems, Disposable's and Shave Preps
was partly offset by declines in Women's Systems. Wet Shave
segment profit increased $7.5
million, or 27.1%. Organic segment profit, excluding the
unfavorable impact from currency increased $14.6 million, reflecting higher organic net
sales and gross profit as well as lower marketing expense.
Sun and Skin Care (Sun
Care, Wet Ones, Bulldog, Jack
Black and Cremo)
Net sales increased $26.4 million,
or 14.4%. Organic net sales increased $27.5 million, or 15.0%, driven by strong
Sun Care and Men's Grooming
sales. International markets increased 53.4%, driven by
higher volumes and pricing in Europe, Latin
America and Oceania, while North
America organic net sales increased 7.6%, also reflecting
higher volumes and pricing. Segment profit decreased
$2.4 million, or 5.6%. Organic
segment profit decreased $2.3
million, or 5.4%, as the benefit from higher organic net
sales was more than offset by significantly higher cost of goods
sold and increased marketing expense.
Feminine Care (Tampons, Pads, and Liners)
Net sales increased $20.7 million,
or 34.9%. Organic net sales increased 35.4%, reflecting a
healthier category, higher pricing and improved product
availability. Segment profit increased $10.1 million. Organic segment profit increased
$10.4 million, driven by higher
organic net sales and gross profit.
Full Fiscal Year 2023 Financial Outlook
The Company is providing the following updated outlook
assumptions for fiscal 2023:
- Reported net sales are now expected to increase at the high end
of the range of 2% to 4%
-
- Includes an estimated 60-basis point inorganic benefit in net
sales from the acquisition of Billie, net of prior year Edgewell
sales to Billie and an estimated 115-basis point (previously
150-basis point) negative impact from currency movements
- Organic net sales are now expected to increase at the high end
of the range of 3% to 5%
- GAAP EPS now expected to be in the range of $1.80 to $2.00
(previously $1.90 to $2.10)
-
- Includes: Restructuring charges*, acquisition and integration
costs, Sun Care reformulation costs,
and Canadian Pension wind-up costs
- Adjusted EPS expected to be in the range of $2.30 to $2.50
-
- Includes an estimated $0.43 EPS
(previously $0.45) unfavorable impact
from foreign currency movements
- Gross margin is expected to increase approximately 30-basis
points, with margin accretion expected in the second half of the
fiscal year
- Operating margin is expected to increase slightly
- The EPS outlook reflects the impact of estimated share
repurchases
- Adjusted EBITDA expected to be at the high end of the range of
$320 to $335
million
-
- Includes an estimated $29 million
(previously $30 million) unfavorable
impact from foreign currency changes
- Adjusted effective tax rate now expected to be approximately
25% (previously 24%)
- Free cash flow expected to be approximately $140 million
* In fiscal 2023, the Company will take specific actions to
strengthen its operating model, simplify the organization and
improve manufacturing and supply chain efficiency. As a
result of these actions, the Company expects to incur charges of
approximately $19 million for the
full fiscal year.
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. This release includes references to the Company's
website and references to additional information and materials
found on its website. The Company's website and such information
and materials are not incorporated by reference in, and are not
part of, this release.
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 7,000 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-Q filed with the Securities and Exchange Commission
("SEC") on November 16, 2022.
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
and related costs, acquisition and integration costs and at times
may include other items. Reconciliations of non-GAAP measures,
including reconciliations of measures related to the Company's
fiscal 2023 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 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, Sun
Care reformulation charges, and other items such as the
settlement loss as a result of the wind-up of the Canadian defined
benefit plan and other costs.
-
- Constant currency measures are calculated by removing the
impact of translational and transactional foreign currencies
changes net of foreign currency hedges compared to the prior year.
Transactional foreign currency changes are driven by foreign legal
entities transactions not denominated in local currency.
- 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
acquisitions.
-
- Organic net sales will be unfavorably impacted in October and
November of fiscal 2023 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 impacted by fluctuations in translation
and transactional foreign currency. The impact of currency was
applied to segments using management's best estimate.
- 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 defined as total debt less cash. Net debt ratio is
defined as total debt less cash divided by trailing twelve month
adjusted EBITDA.
EDGEWELL PERSONAL
CARE COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in
millions, except per share data)
|
|
|
Three Months
Ended
March
31,
|
|
Six Months
Ended
March
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
598.4
|
|
$
547.7
|
|
$
1,067.5
|
|
$
1,011.0
|
Cost of products
sold
|
356.7
|
|
317.6
|
|
636.8
|
|
591.0
|
Gross
profit
|
241.7
|
|
230.1
|
|
430.7
|
|
420.0
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
105.2
|
|
101.3
|
|
200.9
|
|
198.2
|
Advertising and sales
promotion expense
|
62.9
|
|
69.9
|
|
108.8
|
|
116.1
|
Research and
development expense
|
14.4
|
|
13.7
|
|
27.8
|
|
26.5
|
Restructuring
charges
|
3.0
|
|
3.5
|
|
5.7
|
|
5.7
|
Operating
income
|
56.2
|
|
41.7
|
|
87.5
|
|
73.5
|
Interest expense
associated with debt
|
20.7
|
|
18.0
|
|
40.6
|
|
35.3
|
Other expense (income),
net
|
9.5
|
|
(3.4)
|
|
4.5
|
|
(5.1)
|
Earnings before
income taxes
|
26.0
|
|
27.1
|
|
42.4
|
|
43.3
|
Income tax
provision
|
7.0
|
|
3.9
|
|
11.5
|
|
8.9
|
Net
earnings
|
$
19.0
|
|
$
23.2
|
|
$
30.9
|
|
$
34.4
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic net earnings per share
|
$
0.37
|
|
$
0.43
|
|
$
0.60
|
|
$
0.64
|
Diluted net earnings per diluted share
|
$
0.37
|
|
$
0.43
|
|
$
0.60
|
|
$
0.63
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
51.4
|
|
53.6
|
|
51.5
|
|
54.0
|
Diluted
|
52.0
|
|
54.3
|
|
52.0
|
|
54.6
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL
CARE COMPANY
CONDENSED
CONSOLIDATED BALANCE SHEETS
(unaudited, in
millions)
|
|
|
March 31,
2023
|
|
September
30,
2022
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
155.2
|
|
$
188.7
|
Trade receivables,
less allowance for doubtful accounts
|
160.8
|
|
136.9
|
Inventories
|
540.5
|
|
449.3
|
Other current
assets
|
152.7
|
|
167.3
|
Total current
assets
|
1,009.2
|
|
942.2
|
Property, plant and
equipment, net
|
342.3
|
|
345.5
|
Goodwill
|
1,333.6
|
|
1,322.2
|
Other intangible
assets, net
|
990.1
|
|
996.6
|
Other assets
|
123.4
|
|
106.6
|
Total
assets
|
$
3,798.6
|
|
$
3,713.1
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Notes
payable
|
$
21.5
|
|
$
19.0
|
Accounts
payable
|
245.1
|
|
237.3
|
Other current
liabilities
|
302.4
|
|
291.7
|
Total current
liabilities
|
569.0
|
|
548.0
|
Long-term
debt
|
1,413.6
|
|
1,391.4
|
Deferred income tax
liabilities
|
141.6
|
|
140.4
|
Other
liabilities
|
167.4
|
|
173.6
|
Total
liabilities
|
2,291.6
|
|
2,253.4
|
Shareholders'
equity
|
|
|
|
Common
shares
|
0.7
|
|
0.7
|
Additional paid-in
capital
|
1,583.2
|
|
1,604.3
|
Retained
earnings
|
946.4
|
|
931.7
|
Common shares in
treasury at cost
|
(863.6)
|
|
(860.9)
|
Accumulated other
comprehensive loss
|
(159.7)
|
|
(216.1)
|
Total shareholders'
equity
|
1,507.0
|
|
1,459.7
|
Total liabilities
and shareholders' equity
|
$
3,798.6
|
|
$
3,713.1
|
|
|
|
|
See Accompanying
Notes.
|
EDGEWELL PERSONAL
CARE COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
|
|
|
Six Months
Ended
March 31,
|
|
2023
|
|
2022
|
Cash Flow from
Operating Activities
|
|
|
|
Net
earnings
|
$
30.9
|
|
$
34.4
|
Depreciation and
amortization
|
45.6
|
|
44.6
|
Share-based
compensation expense
|
13.3
|
|
12.2
|
Loss on sale of
assets
|
1.0
|
|
0.4
|
Defined benefit
settlement loss
|
7.2
|
|
—
|
Deferred compensation
payments
|
(4.7)
|
|
(7.1)
|
Deferred income
taxes
|
(0.9)
|
|
(10.5)
|
Other, net
|
(19.4)
|
|
(0.9)
|
Changes in operating
assets and liabilities
|
(71.1)
|
|
(113.0)
|
Net cash from (used by)
operating activities
|
$
1.9
|
|
$
(39.9)
|
|
|
|
|
Cash Flow from
Investing Activities
|
|
|
|
Capital
expenditures
|
$
(18.8)
|
|
$
(25.0)
|
Acquisition of Billie,
net of cash acquired
|
—
|
|
(309.4)
|
Collection of deferred
purchase price on accounts receivable sold
|
0.8
|
|
4.7
|
Proceeds from sale of
Infant and Pet Care business
|
—
|
|
5.0
|
Other, net
|
(2.0)
|
|
(1.0)
|
Net cash used by
investing activities
|
$
(20.0)
|
|
$
(325.7)
|
|
|
|
|
Cash Flow from
Financing Activities
|
|
|
|
Cash proceeds from
debt with original maturities greater than 90 days
|
$
413.0
|
|
$
399.0
|
Cash payments on debt
with original maturities greater than 90 days
|
(392.0)
|
|
(220.0)
|
(Payments) proceeds of
debt with original maturities of 90 days or less
|
(1.4)
|
|
0.7
|
Repurchase of
shares
|
(30.0)
|
|
(75.4)
|
Dividends to common
shareholders
|
(16.1)
|
|
(16.7)
|
Net financing inflow
(outflow) from the Accounts Receivable Facility
|
4.8
|
|
(0.2)
|
Employee shares
withheld for taxes
|
(8.1)
|
|
(9.7)
|
Other, net
|
0.8
|
|
0.6
|
Net cash (used by) from
financing activities
|
$
(29.0)
|
|
$
78.3
|
|
|
|
|
Effect of exchange rate
changes on cash
|
13.6
|
|
(3.8)
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
(33.5)
|
|
(291.1)
|
Cash and cash
equivalents, beginning of period
|
188.7
|
|
479.2
|
Cash and cash
equivalents, end of period
|
$
155.2
|
|
$
188.1
|
|
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 may at times include other costs,
including acquisition and integration costs, Sun Care reformulation costs, value-added tax
("VAT") settlement costs, the loss on the Canadian defined benefit
settlement, other 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.
Segment net sales and profitability are presented below:
|
Three Months
Ended
March 31,
|
|
Six Months
Ended
March 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
Sales
|
|
|
|
|
|
|
|
Wet Shave
|
$
308.6
|
|
$
305.0
|
|
$
583.9
|
|
$
591.1
|
Sun and Skin
Care
|
209.7
|
|
183.3
|
|
322.6
|
|
288.1
|
Feminine
Care
|
80.1
|
|
59.4
|
|
161.0
|
|
131.8
|
Total net
sales
|
$
598.4
|
|
$
547.7
|
|
$
1,067.5
|
|
$
1,011.0
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
|
|
|
|
|
Wet Shave
|
$
35.1
|
|
$
27.6
|
|
$
70.5
|
|
$
79.1
|
Sun and Skin
Care
|
39.9
|
|
42.3
|
|
53.0
|
|
46.0
|
Feminine
Care
|
12.0
|
|
1.9
|
|
23.8
|
|
10.3
|
Total segment
profit
|
87.0
|
|
71.8
|
|
147.3
|
|
135.4
|
General corporate and
other expenses
|
(17.0)
|
|
(17.2)
|
|
(32.9)
|
|
(28.0)
|
Amortization of
intangibles
|
(7.7)
|
|
(7.9)
|
|
(15.4)
|
|
(14.0)
|
Interest and other
expenses, net
|
(23.0)
|
|
(14.6)
|
|
(37.9)
|
|
(30.2)
|
Restructuring and
related costs
|
(3.0)
|
|
(3.7)
|
|
(5.8)
|
|
(5.9)
|
Acquisition and
integration costs
|
(2.0)
|
|
(1.1)
|
|
(4.1)
|
|
(7.1)
|
Sun Care reformulation
costs
|
(0.6)
|
|
(0.2)
|
|
(1.1)
|
|
(3.5)
|
Defined benefit
settlement loss
|
(7.2)
|
|
—
|
|
(7.2)
|
|
—
|
VAT settlement
costs
|
—
|
|
—
|
|
—
|
|
(3.4)
|
Other costs
|
(0.5)
|
|
—
|
|
(0.5)
|
|
—
|
Total earnings
before income taxes
|
$
26.0
|
|
$
27.1
|
|
$
42.4
|
|
$
43.3
|
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, 2023
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP —
Reported
|
$
241.7
|
|
$ 105.2
|
|
$
56.2
|
|
$
26.0
|
|
$
7.0
|
|
$
19.0
|
|
$
0.37
|
Restructuring and
related costs
|
0.2
|
|
—
|
|
3.2
|
|
3.2
|
|
0.9
|
|
2.3
|
|
0.04
|
Acquisition and
integration costs
|
—
|
|
2.0
|
|
2.0
|
|
2.0
|
|
0.5
|
|
1.5
|
|
0.03
|
Defined benefit
settlement loss
|
—
|
|
—
|
|
—
|
|
7.2
|
|
1.9
|
|
5.3
|
|
0.10
|
Sun Care
reformulation
|
—
|
|
—
|
|
0.6
|
|
0.6
|
|
0.1
|
|
0.5
|
|
0.01
|
Other Costs
|
—
|
|
0.5
|
|
0.5
|
|
0.5
|
|
0.1
|
|
0.4
|
|
0.01
|
Total Adjusted
Non-GAAP
|
$
241.9
|
|
$ 102.7
|
|
$
62.5
|
|
$
39.5
|
|
$
10.5
|
|
$
29.0
|
|
$
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
Constant Currency
|
|
$
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
40.4 %
|
|
17.6 %
|
|
9.4 %
|
|
GAAP effective tax
rate
|
26.9 %
|
|
|
Adjusted as a percent
of net sales
|
40.4 %
|
|
17.2 %
|
|
10.4 %
|
|
Adjusted effective tax
rate
|
26.5 %
|
|
|
Adjusted Constant
Currency as a percent of net sales
|
41.4 %
|
|
|
|
11.5 %
|
|
|
|
|
|
|
|
|
|
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
reformation
|
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 %
|
|
|
|
Six Months Ended
March 31, 2023
|
|
Gross
Profit
|
|
SG&A
|
|
Operating
Income
|
|
EBIT
|
|
Income
taxes
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP —
Reported
|
$ 430.7
|
|
$ 200.9
|
|
$ 87.5
|
|
$
42.4
|
|
$
11.5
|
|
$ 30.9
|
|
$
0.60
|
Restructuring and
related costs
|
0.2
|
|
0.1
|
|
6.0
|
|
6.0
|
|
1.6
|
|
4.4
|
|
0.08
|
Acquisition and
integration costs
|
—
|
|
4.1
|
|
4.1
|
|
4.1
|
|
1.0
|
|
3.1
|
|
0.06
|
Defined benefit
settlement loss
|
—
|
|
—
|
|
—
|
|
7.2
|
|
1.9
|
|
5.3
|
|
0.10
|
Sun Care
reformulation
|
—
|
|
—
|
|
1.1
|
|
1.1
|
|
0.2
|
|
0.9
|
|
0.02
|
Other costs
|
—
|
|
0.5
|
|
0.5
|
|
0.5
|
|
0.1
|
|
0.4
|
|
0.01
|
Total Adjusted
Non-GAAP
|
$ 430.9
|
|
$ 196.2
|
|
$ 99.2
|
|
$
61.3
|
|
$
16.3
|
|
$ 45.0
|
|
$
0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
Constant Currency
|
|
$
1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as a percent of
net sales
|
40.3 %
|
|
18.8 %
|
|
8.2 %
|
|
GAAP effective tax
rate
|
27.0 %
|
|
|
Adjusted as a percent
of net sales
|
40.4 %
|
|
18.4 %
|
|
9.3 %
|
|
Adjusted effective tax
rate
|
26.6 %
|
|
|
Adjusted Constant
Currency as a percent of net sales
|
41.5 %
|
|
|
|
10.5 %
|
|
|
|
|
|
|
|
|
|
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
|
VAT settlement
costs
|
—
|
|
3.4
|
|
3.4
|
|
3.4
|
|
1.1
|
|
2.3
|
|
0.04
|
Sun Care
reformulation
|
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 %
|
|
|
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. The
following tables present changes in net sales and segment profit
for the second quarter and first six months ended March 31, 2023, as compared to the corresponding
period in the prior quarter.
Net
Sales
|
Quarter Ended March
31, 2023
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
Total
|
Net Sales - Q2
FY22
|
$
305.0
|
|
|
|
$
183.3
|
|
|
|
$ 59.4
|
|
|
|
$
547.7
|
|
|
Organic
|
14.0
|
|
4.6 %
|
|
27.5
|
|
15.0 %
|
|
21.0
|
|
35.4 %
|
|
62.5
|
|
11.4 %
|
Impact of
currency
|
(10.4)
|
|
(3.4) %
|
|
(1.1)
|
|
(0.6) %
|
|
(0.3)
|
|
(0.5) %
|
|
(11.8)
|
|
(2.1) %
|
Net Sales - Q2
FY23
|
$
308.6
|
|
1.2 %
|
|
$
209.7
|
|
14.4 %
|
|
$ 80.1
|
|
34.9 %
|
|
$
598.4
|
|
9.3 %
|
Net
Sales
|
Six Months Ended
March 31, 2023
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
Total
|
Net Sales - Q2
FY22
|
$
591.1
|
|
|
|
$
288.1
|
|
|
|
$
131.8
|
|
|
|
$ 1,011.0
|
|
|
Organic
|
8.3
|
|
1.4 %
|
|
38.5
|
|
13.4 %
|
|
29.7
|
|
22.5 %
|
|
76.5
|
|
7.6 %
|
Impact of Billie
acquisition, net
|
12.0
|
|
2.0 %
|
|
—
|
|
— %
|
|
—
|
|
— %
|
|
12.0
|
|
1.2 %
|
Impact of
currency
|
(27.5)
|
|
(4.8) %
|
|
(4.0)
|
|
(1.4) %
|
|
(0.5)
|
|
(0.4) %
|
|
(32.0)
|
|
(3.2) %
|
Net Sales - Q2
FY23
|
$
583.9
|
|
(1.4) %
|
|
$
322.6
|
|
12.0 %
|
|
$
161.0
|
|
22.1 %
|
|
$ 1,067.5
|
|
5.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic net sales were impacted in the first quarter of fiscal
2023 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 from October 1,
2022 through November 30, 2022
less sales to Billie by the Company in the comparable prior year
period, which totaled $12.0.
Segment
Profit
|
Quarter Ended March
31, 2023
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
Total
|
Segment Profit - Q2
FY22
|
$ 27.6
|
|
|
|
$ 42.3
|
|
|
|
$ 1.9
|
|
|
|
$ 71.8
|
|
|
Organic
|
14.6
|
|
52.9 %
|
|
(2.3)
|
|
(5.4) %
|
|
10.4
|
|
547.5 %
|
|
22.7
|
|
31.6 %
|
Impact of
currency
|
(7.1)
|
|
(25.8) %
|
|
(0.1)
|
|
(0.2) %
|
|
(0.3)
|
|
(15.8) %
|
|
(7.5)
|
|
(10.4) %
|
Segment Profit - Q2
FY23
|
$ 35.1
|
|
27.1 %
|
|
$ 39.9
|
|
(5.6) %
|
|
$ 12.0
|
|
531.7 %
|
|
$ 87.0
|
|
21.2 %
|
Segment
Profit
|
Six Months Ended
March 31, 2023
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
Total
|
Segment Profit - Q2
FY22
|
$ 79.1
|
|
|
|
$ 46.0
|
|
|
|
$ 10.3
|
|
|
|
$
135.4
|
|
|
Organic
|
6.4
|
|
8.1 %
|
|
7.7
|
|
16.7 %
|
|
14.2
|
|
137.9 %
|
|
28.3
|
|
20.9 %
|
Impact of
currency
|
(15.0)
|
|
(19.0) %
|
|
(0.7)
|
|
(1.5) %
|
|
(0.7)
|
|
(6.8) %
|
|
(16.4)
|
|
(12.1) %
|
Segment Profit - Q2
FY23
|
$ 70.5
|
|
(10.9) %
|
|
$ 53.0
|
|
15.2 %
|
|
$ 23.8
|
|
131.1 %
|
|
$
147.3
|
|
8.8 %
|
For all tables, the impact of currency to segment profit
includes both the translational and transactional currency changes
during the quarter.
Note 4 - Net Debt and EBITDA
The Company reports financial results on a GAAP and adjusted
basis. The tables below are used to reconcile Net Debt and Net
earnings to EBITDA and Adjusted EBITDA, which are Non-GAAP
measures, to improve comparability of results between periods.
|
March 31,
2023
|
|
September
30,
2022
|
Notes
payable
|
$
21.5
|
|
$
19.0
|
Long-term
debt
|
1,413.6
|
|
1,391.4
|
Gross debt
|
$
1,435.1
|
|
$
1,410.4
|
Less: Cash and cash
equivalents
|
155.2
|
|
188.7
|
Net Debt
|
$
1,279.9
|
|
$
1,221.7
|
|
Three Months
Ended
March
31,
|
|
Six Months
Ended
March
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
earnings
|
$
19.0
|
|
$
23.2
|
|
$
30.9
|
|
$
34.4
|
Income tax
provision
|
7.0
|
|
3.9
|
|
11.5
|
|
8.9
|
Interest expense,
net
|
20.4
|
|
18.4
|
|
40.0
|
|
35.6
|
Depreciation and
amortization
|
23.1
|
|
23.2
|
|
45.6
|
|
44.6
|
EBITDA
|
$
69.5
|
|
$
68.7
|
|
$
128.0
|
|
$
123.5
|
|
|
|
|
|
|
|
|
Restructuring and
related costs
|
3.2
|
|
3.7
|
|
6.0
|
|
5.9
|
Acquisition and
integration costs
|
2.0
|
|
1.1
|
|
4.1
|
|
7.1
|
Defined benefit
settlement
|
7.2
|
|
—
|
|
7.2
|
|
—
|
VAT settlement
costs
|
—
|
|
—
|
|
—
|
|
3.4
|
Sun Care reformulation
costs
|
0.6
|
|
0.2
|
|
1.1
|
|
3.5
|
Other costs
|
0.5
|
|
—
|
|
0.5
|
|
—
|
Adjusted
EBITDA
|
$
83.0
|
|
$
73.7
|
|
$
146.9
|
|
$
143.4
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Constant Currency
|
$
93.5
|
|
|
|
$
161.0
|
|
|
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 2023 results:
Adjusted EPS
Outlook
|
|
|
Fiscal 2023 GAAP
EPS
|
|
$1.80 -
$2.00
|
|
|
|
Restructuring and
related costs
|
approx.
|
0.36
|
Acquisition and
integration costs
|
approx.
|
0.13
|
Defined benefit
settlement loss
|
approx.
|
0.14
|
Sun Care reformulation
costs
|
approx.
|
0.04
|
Other costs
|
approx.
|
0.01
|
Income
taxes(1)
|
approx.
|
(0.17)
|
|
|
|
Fiscal 2023 Adjusted
EPS Outlook (Non-GAAP)
|
|
$2.30 -
$2.50
|
|
(1) Income tax
effect of the adjustments to Fiscal 2023 GAAP EPS noted
above.
|
|
Adjusted EBITDA
Outlook
|
|
|
Fiscal 2023 GAAP Net
Income
|
approx.
|
$90 - $105
|
Income tax
provision
|
approx.
|
32
|
Interest expense,
net
|
approx.
|
79
|
Depreciation and
amortization
|
approx.
|
91
|
EBITDA
|
approx.
|
$292 - $307
|
|
|
|
Restructuring and
related costs
|
approx.
|
19
|
Acquisition and
integration costs
|
approx.
|
6
|
Defined benefit
settlement loss
|
approx.
|
7
|
Sun Care reformulation
costs
|
approx.
|
2
|
Other costs
|
approx.
|
1
|
Fiscal 2023 Adjusted
EBITDA
|
approx.
|
$320 - $335
|
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SOURCE Edgewell Personal Care Company