Missouri | 1-15401 | 43-1863181 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Title of each class | Stock symbol | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | EPC | New York Stock Exchange |
Emerging growth company | o |
Exhibit No. | Description |
99.1 |
Exhibit No. | Description |
99.1 |
Edgewell Personal Care Company 6 Research Drive Shelton, Conn 06484 | |
FOR IMMEDIATE RELEASE | Company Contact |
Chris Gough Vice President, Investor Relations 203-944-5706 Chris.Gough@Edgewell.com |
• | Net sales were $546.7 million in the second quarter of fiscal 2019, a decrease of 10.1% when compared to the prior year quarter. Organic net sales were down 8.9% for the quarter. (Organic basis excludes sales impact from the Jack Black acquisition and the translational impact from currency movements.) |
• | GAAP Diluted Earnings Per Share ("EPS") were $0.89 for the second quarter, including an after tax $0.21 impact from Project Fuel. Adjusted EPS were $1.13 for the second quarter, compared to $1.31 in the prior year quarter. |
• | The Company is maintaining its previously announced financial outlook for fiscal 2019. |
• | In a separate press release issued today, the Company announced that it has entered into a definitive merger agreement to acquire Harry's, Inc. in a cash and stock transaction valued at $1.37 billion. The combination of Edgewell and Harry's brings together complementary businesses and capabilities to create a next-generation consumer products platform with an expansive runway for growth and value creation. |
• | The Company analyzes its net revenue on an organic basis to better measure the comparability of results between periods. Organic net sales exclude the impact of changes in foreign currency, acquisitions, and dispositions. This information is provided because these fluctuations can distort the underlying change in net sales either positively or negatively. For the quarter and six months ended March 31, 2019, the impact of acquisitions includes net sales and segment profit activity for Jack Black through February 2019. Jack Black was acquired in March 2018. For the six months ended March 31, 2019, the impact of disposition includes October 2017 net sales and segment profit for the Playtex gloves business. |
• | Adjusted EBITDA is defined as earnings before income taxes, interest expense, net, depreciation and amortization and excludes items such as restructuring charges, Feminine and Infant Care evaluation costs, Sun Care reformulation costs, Jack Black acquisition and integration costs, investor settlement expense, and the sale of the Playtex gloves business. |
• | Adjusted operating income is defined as earnings before income taxes, interest expense associated with debt, other income, net, and excludes items such as restructuring charges, Feminine and Infant Care evaluation costs, Sun Care reformulation costs, Jack Black acquisition and integration costs, investor settlement expense, and the sale of the Playtex gloves business. |
• | Adjusted net earnings and adjusted earnings per share are defined as net earnings and diluted earnings per share excluding items such as restructuring charges, Feminine and Infant Care evaluation costs, Sun Care reformulation costs, Jack Black acquisition and integration costs, investor settlement expense, the sale of the Playtex gloves business, the related tax effects of these items, and the impact of the transition tax and re-measurement of deferred tax assets and liabilities related to the Tax Act. |
• | Adjusted effective tax rate is defined as the effective tax rate excluding items such as restructuring charges, Feminine and Infant Care evaluation costs, Sun Care reformulation costs, Jack Black acquisition and integration costs, investor settlement expense, the sale of the Playtex gloves business, the related tax effects of these items, and the impact of the transition tax and re-measurement of deferred tax assets and liabilities related to the Tax Act from the income tax provision and earnings before income taxes. |
• | Adjusted working capital is defined as receivables, less trade allowances in accrued liabilities, plus inventories, less accounts payable, and is calculated using an average of the trailing four-quarter end balances. |
• | Free cash flow is defined as net cash from operating activities less net capital expenditures. 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. |
Quarter Ended March 31, | Six Months Ended March 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | $ | 546.7 | $ | 608.1 | $ | 1,003.8 | $ | 1,076.4 | |||||||
Cost of products sold | 295.8 | 307.0 | 559.4 | 576.0 | |||||||||||
Gross profit | 250.9 | 301.1 | 444.4 | 500.4 | |||||||||||
Selling, general and administrative expense | 98.1 | 104.3 | 185.4 | 202.2 | |||||||||||
Advertising and sales promotion expense | 47.9 | 75.6 | 99.5 | 124.6 | |||||||||||
Research and development expense | 14.0 | 15.5 | 26.6 | 31.6 | |||||||||||
Restructuring charges | 13.5 | 3.7 | 30.6 | 3.7 | |||||||||||
Gain on sale of Playtex gloves | — | — | — | (15.9 | ) | ||||||||||
Interest expense associated with debt | 16.4 | 18.2 | 32.4 | 36.0 | |||||||||||
Other income, net | (2.7 | ) | (2.0 | ) | (1.4 | ) | (0.7 | ) | |||||||
Earnings before income taxes | 63.7 | 85.8 | 71.3 | 118.9 | |||||||||||
Income tax provision | 15.5 | 20.7 | 23.5 | 47.1 | |||||||||||
Net earnings | $ | 48.2 | $ | 65.1 | $ | 47.8 | $ | 71.8 | |||||||
Earnings per share: | |||||||||||||||
Basic net earnings per share | 0.89 | 1.21 | 0.88 | 1.31 | |||||||||||
Diluted net earnings per diluted share | 0.89 | 1.20 | 0.88 | 1.31 | |||||||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 54.1 | 54.0 | 54.1 | 54.7 | |||||||||||
Diluted | 54.3 | 54.1 | 54.3 | 54.9 |
March 31, 2019 | September 30, 2018 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 244.6 | $ | 266.4 | |||
Trade receivables, less allowance for doubtful accounts | 250.8 | 226.5 | |||||
Inventories | 388.6 | 329.5 | |||||
Other current assets | 137.8 | 128.8 | |||||
Total current assets | 1,021.8 | 951.2 | |||||
Property, plant and equipment, net | 402.6 | 424.1 | |||||
Goodwill | 1,444.7 | 1,450.8 | |||||
Other intangible assets, net | 1,087.3 | 1,099.0 | |||||
Other assets | 32.1 | 28.2 | |||||
Total assets | $ | 3,988.5 | $ | 3,953.3 | |||
Liabilities and Shareholders' Equity | |||||||
Current liabilities | |||||||
Current maturities of long-term debt | $ | — | $ | 184.9 | |||
Notes payable | 13.9 | 8.2 | |||||
Accounts payable | 223.2 | 238.4 | |||||
Other current liabilities | 271.5 | 285.5 | |||||
Total current liabilities | 508.6 | 717.0 | |||||
Long-term debt | 1,312.3 | 1,103.8 | |||||
Deferred income tax liabilities | 175.5 | 176.1 | |||||
Other liabilities | 210.0 | 211.8 | |||||
Total liabilities | $ | 2,206.4 | $ | 2,208.7 | |||
Shareholders' equity | |||||||
Common shares | 0.7 | 0.7 | |||||
Additional paid-in capital | 1,630.0 | 1,628.3 | |||||
Retained earnings | 1,134.8 | 1,083.1 | |||||
Common shares in treasury at cost | (812.4 | ) | (819.2 | ) | |||
Accumulated other comprehensive loss | (171.0 | ) | (148.3 | ) | |||
Total shareholders' equity | 1,782.1 | 1,744.6 | |||||
Total liabilities and shareholders' equity | $ | 3,988.5 | $ | 3,953.3 |
Six Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash Flow from Operating Activities | |||||||
Net earnings | $ | 47.8 | $ | 71.8 | |||
Depreciation and amortization | 46.4 | 49.2 | |||||
Deferred compensation payments | (5.2 | ) | (9.1 | ) | |||
Share-based compensation expense | 10.0 | 9.3 | |||||
Loss (gain) on sale of assets | 0.9 | (13.6 | ) | ||||
Deferred income taxes | (0.3 | ) | (22.5 | ) | |||
Other, net | 4.5 | 31.6 | |||||
Changes in current assets and liabilities used in operations | (136.0 | ) | (55.1 | ) | |||
Net cash (used by) from operating activities | (31.9 | ) | 61.6 | ||||
Cash Flow from Investing Activities | |||||||
Capital expenditures | (22.9 | ) | (27.6 | ) | |||
Acquisitions, net of cash acquired | — | (90.3 | ) | ||||
Playtex glove sale | — | 19.0 | |||||
Proceeds from sale of assets | 4.0 | 4.7 | |||||
Collection of deferred purchase price from accounts receivable sold | 5.0 | 5.3 | |||||
Net cash used by investing activities | (13.9 | ) | (88.9 | ) | |||
Cash Flow from Financing Activities | |||||||
Cash proceeds from debt with original maturities greater than 90 days | 253.0 | 305.0 | |||||
Cash payments on debt with original maturities greater than 90 days | (45.0 | ) | (427.0 | ) | |||
Term Loan repayment | (185.0 | ) | — | ||||
Net increase (decrease) in debt with original maturities of 90 days or less | 3.5 | (1.2 | ) | ||||
Common shares purchased | — | (124.4 | ) | ||||
Net financing inflow from the Accounts Receivable Facility | 2.3 | 6.5 | |||||
Employee shares withheld for taxes | (1.5 | ) | (2.1 | ) | |||
Net cash from (used by) financing activities | 27.3 | (243.2 | ) | ||||
Effect of exchange rate changes on cash | (3.3 | ) | 11.2 | ||||
Net decrease in cash and cash equivalents | (21.8 | ) | (259.3 | ) | |||
Cash and cash equivalents, beginning of period | 266.4 | 502.9 | |||||
Cash and cash equivalents, end of period | $ | 244.6 | $ | 243.6 |
Common Shares | Treasury Shares | ||||||||||||||||||||||||||||
Number | Par Value | Number | Amount | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||
Balance at December 31, 2018 | 65.2 | $ | 0.7 | (11.1 | ) | $ | (812.6 | ) | $ | 1,625.0 | $ | 1,086.6 | $ | (160.4 | ) | $ | 1,739.3 | ||||||||||||
Net earnings | — | — | — | — | — | 48.2 | — | 48.2 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (11.2 | ) | (11.2 | ) | |||||||||||||||||||
Pension and postretirement activity | — | — | — | — | — | — | 0.3 | 0.3 | |||||||||||||||||||||
Impact of ASU 2016-16 | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Deferred gain on hedging activity | — | — | — | — | — | — | 0.3 | 0.3 | |||||||||||||||||||||
Activity under share plans | — | — | — | 0.2 | 5.0 | — | — | 5.2 | |||||||||||||||||||||
Balance at March 31, 2019 | 65.2 | $ | 0.7 | (11.1 | ) | $ | (812.4 | ) | $ | 1,630.0 | $ | 1,134.8 | $ | (171.0 | ) | $ | 1,782.1 |
Common Shares | Treasury Shares | ||||||||||||||||||||||||||||
Number | Par Value | Number | Amount | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||
Balance at September 30, 2018 | 65.2 | $ | 0.7 | (11.2 | ) | $ | (819.2 | ) | $ | 1,628.3 | $ | 1,083.1 | $ | (148.3 | ) | $ | 1,744.6 | ||||||||||||
Net earnings | — | — | — | — | — | 47.8 | — | 47.8 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (22.0 | ) | (22.0 | ) | |||||||||||||||||||
Pension and postretirement activity | — | — | — | — | — | — | 0.3 | 0.3 | |||||||||||||||||||||
Impact of ASU 2016-16 | — | — | — | — | — | 3.9 | — | 3.9 | |||||||||||||||||||||
Deferred gain on hedging activity | — | — | — | — | — | — | (1.0 | ) | (1.0 | ) | |||||||||||||||||||
Activity under share plans | — | — | 0.1 | 6.8 | 1.7 | — | — | 8.5 | |||||||||||||||||||||
Balance at March 31, 2019 | 65.2 | $ | 0.7 | (11.1 | ) | $ | (812.4 | ) | $ | 1,630.0 | $ | 1,134.8 | $ | (171.0 | ) | $ | 1,782.1 |
Common Shares | Treasury Shares | ||||||||||||||||||||||||||||
Number | Par Value | Number | Amount | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||
Balance at December 31, 2017 | 65.2 | $ | 0.7 | (11.1 | ) | $ | (813.5 | ) | $ | 1,620.7 | $ | 969.2 | $ | (121.3 | ) | $ | 1,655.8 | ||||||||||||
Net earnings | — | — | — | — | — | 65.1 | — | 65.1 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 16.4 | 16.4 | |||||||||||||||||||||
Pension and postretirement activity | — | — | — | — | — | — | 0.3 | 0.3 | |||||||||||||||||||||
Deferred gain on hedging activity | — | — | — | — | — | — | (1.7 | ) | (1.7 | ) | |||||||||||||||||||
Repurchase of shares | — | — | (0.1 | ) | (9.2 | ) | — | — | — | (9.2 | ) | ||||||||||||||||||
Activity under share plans | — | — | — | — | 4.5 | — | — | 4.5 | |||||||||||||||||||||
Balance at March 31, 2018 | 65.2 | $ | 0.7 | (11.2 | ) | $ | (822.7 | ) | $ | 1,625.2 | $ | 1,034.3 | $ | (106.3 | ) | $ | 1,731.2 |
Common Shares | Treasury Shares | ||||||||||||||||||||||||||||
Number | Par Value | Number | Amount | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||
Balance at September 30, 2017 | 65.2 | $ | 0.7 | (9.2 | ) | $ | (703.9 | ) | $ | 1,623.4 | $ | 952.9 | $ | (131.4 | ) | $ | 1,741.7 | ||||||||||||
Net earnings | — | — | — | — | — | 71.8 | — | 71.8 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 25.9 | 25.9 | |||||||||||||||||||||
Pension and postretirement activity | — | — | — | — | — | — | 0.7 | 0.7 | |||||||||||||||||||||
Deferred gain on hedging activity | — | — | — | — | — | — | (1.5 | ) | (1.5 | ) | |||||||||||||||||||
Repurchase of shares | — | — | (2.1 | ) | (124.4 | ) | — | — | — | (124.4 | ) | ||||||||||||||||||
Activity under share plans | — | — | 0.1 | 5.6 | 1.8 | 9.6 | — | 17.0 | |||||||||||||||||||||
Balance at March 31, 2018 | 65.2 | $ | 0.7 | (11.2 | ) | $ | (822.7 | ) | $ | 1,625.2 | $ | 1,034.3 | $ | (106.3 | ) | $ | 1,731.2 |
Quarter Ended March 31, | Six Months Ended March 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Sales | |||||||||||||||
Wet Shave | $ | 294.4 | $ | 345.2 | $ | 582.1 | $ | 639.3 | |||||||
Sun and Skin Care | 145.2 | 152.3 | 211.9 | 211.4 | |||||||||||
Feminine Care | 74.6 | 80.3 | 149.3 | 162.9 | |||||||||||
All Other | 32.5 | 30.3 | 60.5 | 62.8 | |||||||||||
Total net sales | $ | 546.7 | $ | 608.1 | $ | 1,003.8 | $ | 1,076.4 | |||||||
Segment Profit | |||||||||||||||
Wet Shave | $ | 55.7 | $ | 68.9 | $ | 110.7 | $ | 122.6 | |||||||
Sun and Skin Care | 40.5 | 48.6 | 39.9 | 42.4 | |||||||||||
Feminine Care | 13.7 | 9.9 | 21.2 | 14.7 | |||||||||||
All Other | 6.0 | 4.3 | 7.2 | 11.4 | |||||||||||
Total segment profit | 115.9 | 131.7 | 179.0 | 191.1 | |||||||||||
General corporate and other expenses | (16.7 | ) | (19.2 | ) | (30.4 | ) | (37.9 | ) | |||||||
Restructuring and related costs (1) | (15.4 | ) | (3.7 | ) | (33.9 | ) | (3.7 | ) | |||||||
Feminine and Infant Care evaluation costs (2) | (1.0 | ) | — | (1.0 | ) | — | |||||||||
Jack Black acquisition and integration costs (3) | (0.5 | ) | (2.6 | ) | (1.0 | ) | (2.6 | ) | |||||||
Investor settlement expense (4) | — | — | (0.9 | ) | — | ||||||||||
Sun Care reformulation costs (5) | (0.4 | ) | — | (0.5 | ) | — | |||||||||
Gain on sale of Playtex gloves | — | — | — | 15.9 | |||||||||||
Amortization of intangibles | (4.5 | ) | (4.2 | ) | (9.0 | ) | (8.6 | ) | |||||||
Interest and other income, net | (13.7 | ) | (16.2 | ) | (31.0 | ) | (35.3 | ) | |||||||
Total earnings before income taxes | $ | 63.7 | $ | 85.8 | $ | 71.3 | $ | 118.9 |
(1) | Restructuring costs associated with Project Fuel, an enterprise-wide transformational initiative that is designed to address all aspects of our business and cost structure, simplifying and transforming the organization, structure and key processes that will enable us to achieve our desired future state operations. Includes pre-tax SG&A of $1.9 and $3.3 for the three and six months ended March 31, 2019, associated with certain information technology enablement expenses for Project Fuel. |
(2) | Includes pre-tax SG&A of $1.0 for the three and six months ended March 31, 2019, associated with consulting costs for the Company to evaluate segments. |
(3) | Includes pre-tax SG&A of $0.5 and $1.0 for the three and six months ended March 31, 2019, and $2.6 for the three and six months ended March 31, 2018, for costs associated with the integration of the Jack Black acquisition. |
(4) | Includes pre-tax SG&A of $0.9 for the six months ended March 31, 2019, associated with a settlement with an investor. |
(5) | Includes pre-tax Cost of products sold of $0.4 and $0.5 for the three and six months ended March 31, 2019, associated with supply chain changes on select Sun Care products. |
Quarter Ended March 31, | |||||||||||||||
Net Earnings | Diluted EPS | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Earnings and Diluted EPS - GAAP (Unaudited) | $ | 48.2 | $ | 65.1 | $ | 0.89 | $ | 1.20 | |||||||
Restructuring and related costs (1) | 15.4 | 3.7 | 0.28 | 0.07 | |||||||||||
Feminine and Infant Care evaluation costs (2) | 1.0 | — | 0.02 | — | |||||||||||
Jack Black acquisition and integration (3) | 0.5 | 2.6 | 0.01 | 0.05 | |||||||||||
Sun Care reformulation costs (4) | 0.4 | — | 0.01 | — | |||||||||||
Income taxes (5) | (4.0 | ) | (0.5 | ) | (0.08 | ) | (0.01 | ) | |||||||
Adjusted Net Earnings and Adjusted Diluted EPS - Non-GAAP | $ | 61.5 | $ | 70.9 | $ | 1.13 | $ | 1.31 | |||||||
Weighted-average shares - Diluted | 54.3 | 54.1 |
(1) | Restructuring costs associated with Project Fuel, an enterprise-wide transformational initiative that is designed to address all aspects of our business and cost structure, simplifying and transforming the organization, structure and key processes that will enable us to achieve our desired future state operations. Includes pre-tax SG&A of $1.9 for the three months ended March 31, 2019, associated with certain information technology enablement expenses for Project Fuel. |
(2) | Includes pre-tax SG&A of $1.0 for the three months ended March 31, 2019, associated with consulting costs for the Company to evaluate segments. |
(3) | Includes pre-tax SG&A of $0.5 and $2.6 for the three months ended March 31, 2019 and 2018, respectively, for costs associated with the integration of the Jack Black acquisition. |
(4) | Includes pre-tax Cost of products sold of $0.4 for the three months ended March 31, 2019, associated with supply chain changes on select Sun Care products. |
(5) | Includes the impact of the Tax Act totaling $1.2 in Income tax expense for the second quarter of fiscal 2018 in addition to the tax impact of the other adjustments to Net Earnings and Diluted EPS - GAAP. |
Six Months Ended March 31, | |||||||||||||||
Net Earnings | Diluted EPS | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Earnings and Diluted EPS - GAAP (Unaudited) | $ | 47.8 | $ | 71.8 | $ | 0.88 | $ | 1.31 | |||||||
Restructuring and related costs (1) | 33.9 | 3.7 | 0.62 | 0.07 | |||||||||||
Feminine and Infant Care evaluation costs (2) | 1.0 | — | 0.02 | — | |||||||||||
Jack Black acquisition and integration (3) | 1.0 | 2.6 | 0.02 | 0.05 | |||||||||||
Investor settlement expense (4) | 0.9 | — | 0.02 | — | |||||||||||
Sun Care reformulation costs (5) | 0.5 | — | 0.01 | — | |||||||||||
Gain on sale of Playtex gloves | — | (15.9 | ) | — | (0.29 | ) | |||||||||
Income taxes (6) | (3.4 | ) | 20.0 | (0.07 | ) | 0.36 | |||||||||
Adjusted Net Earnings and Adjusted Diluted EPS - Non-GAAP | $ | 81.7 | $ | 82.2 | $ | 1.50 | $ | 1.50 | |||||||
Weighted-average shares - Diluted | 54.3 | 54.9 |
(1) | Restructuring costs associated with Project Fuel, an enterprise-wide transformational initiative that is designed to address all aspects of our business and cost structure, simplifying and transforming the organization, structure and key processes that will enable us to achieve our desired future state operations. Includes pre-tax SG&A of $3.3 for the six months ended March 31, 2019, associated with certain information technology enablement expenses for Project Fuel. |
(2) | Includes pre-tax SG&A of $1.0 for the six months ended March 31, 2019, associated with consulting costs for the Company to evaluate segments. |
(3) | Includes pre-tax SG&A of $1.0 and $2.6 for the six months ended March 31, 2019 and 2018, respectively, for costs associated with the integration of the Jack Black acquisition. |
(4) | Includes pre-tax SG&A of $0.9 for the six months ended March 31, 2019, associated with a settlement with an investor. |
(5) | Includes pre-tax Cost of products sold of $0.5 for the six months ended March 31, 2019, associated with supply chain changes on select Sun Care products. |
(6) | Includes Income tax expense of $4.7 for the six months ended March 31, 2019 related to the fiscal 2018 one-time transition tax from the U.S. Tax Act, recorded in the first quarter of fiscal 2019. Includes the impact of the Tax Act totaling $17.4 in Income tax expense for the six months ended March 31, 2018 in addition to the tax impact of the other adjustments to Net Earnings and Diluted EPS - GAAP. |
Quarter Ended March 31, 2019 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 250.9 | $ | 98.1 | $ | 63.7 | $ | 48.2 | $ | 0.89 | |||||||||
% of net sales | 45.9 | % | 17.9 | % | |||||||||||||||
Restructuring and related costs (2) | — | 1.9 | 15.4 | 11.7 | 0.21 | ||||||||||||||
Feminine and Infant Care evaluation costs | — | 1.0 | 1.0 | 0.8 | 0.01 | ||||||||||||||
Jack Black acquisition and integration costs | — | 0.5 | 0.5 | 0.4 | 0.01 | ||||||||||||||
Sun Care reformulation costs | 0.4 | — | 0.4 | 0.4 | 0.01 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 251.3 | $ | 94.7 | $ | 81.0 | $ | 61.5 | $ | 1.13 | |||||||||
% of net sales | 46.0 | % | 17.3 | % |
Six Months Ended March 31, 2019 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 444.4 | $ | 185.4 | $ | 71.3 | $ | 47.8 | $ | 0.88 | |||||||||
% of net sales | 44.3 | % | 18.5 | % | |||||||||||||||
Restructuring and related costs (2) | — | 3.3 | 33.9 | 26.5 | 0.49 | ||||||||||||||
Feminine and Infant Care evaluation costs | — | 1.0 | 1.0 | 0.8 | 0.01 | ||||||||||||||
Jack Black acquisition and integration costs | — | 1.0 | 1.0 | 0.8 | 0.01 | ||||||||||||||
Investor settlement expense | — | 0.9 | 0.9 | 0.7 | 0.01 | ||||||||||||||
Sun Care reformulation costs | 0.5 | — | 0.5 | 0.4 | 0.01 | ||||||||||||||
Income tax reform | — | — | — | 4.7 | 0.09 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 444.9 | $ | 179.2 | $ | 108.6 | $ | 81.7 | $ | 1.50 | |||||||||
% of net sales | 44.3 | % | 17.9 | % |
Quarter Ended March 31, 2018 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 301.1 | $ | 104.3 | $ | 85.8 | $ | 65.1 | $ | 1.20 | |||||||||
% of net sales | 49.5 | % | 17.2 | % | |||||||||||||||
Restructuring and related costs | — | — | 3.7 | 2.7 | 0.05 | ||||||||||||||
Jack Black acquisition and integration costs | — | 2.6 | 2.6 | 1.9 | 0.04 | ||||||||||||||
Income tax reform | — | — | — | 1.2 | 0.02 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 301.1 | $ | 101.7 | $ | 92.1 | $ | 70.9 | $ | 1.31 | |||||||||
% of net sales | 49.5 | % | 16.7 | % |
Six Months Ended March 31, 2018 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 500.4 | $ | 202.2 | $ | 118.9 | $ | 71.8 | $ | 1.31 | |||||||||
% of net sales | 46.5 | % | 18.8 | % | |||||||||||||||
Restructuring and related costs | — | — | 3.7 | 2.7 | 0.05 | ||||||||||||||
Jack Black acquisition and integration costs | — | 2.6 | 2.6 | 1.9 | 0.03 | ||||||||||||||
Gain on sale of Playtex gloves | — | — | (15.9 | ) | (11.6 | ) | (0.21 | ) | |||||||||||
Income tax reform | — | — | — | 17.4 | 0.32 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 500.4 | $ | 199.6 | $ | 109.3 | $ | 82.2 | $ | 1.50 | |||||||||
% of net sales | 46.5 | % | 18.5 | % |
(1) | EBIT is defined as Earnings before income taxes. |
(2) | Restructuring costs associated with Project Fuel, an enterprise-wide transformational initiative that is designed to address all aspects of our business and cost structure, simplifying and transforming the organization, structure and key processes that will enable us to achieve our desired future state operations. Includes pre-tax SG&A of $1.9 and $3.3 for the three and six months ended March 31, 2019, associated with certain information technology enablement expenses for Project Fuel. |
Quarter Ended March 31, | Six Months Ended March 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Earnings before income taxes | $ | 63.7 | $ | 85.8 | $ | 71.3 | $ | 118.9 | |||||||
Restructuring and related costs (1) | 15.4 | 3.7 | 33.9 | 3.7 | |||||||||||
Feminine and Infant Care evaluation costs (2) | 1.0 | — | 1.0 | — | |||||||||||
Jack Black acquisition and integration costs (3) | 0.5 | 2.6 | 1.0 | 2.6 | |||||||||||
Investor settlement expense (4) | — | — | 0.9 | — | |||||||||||
Sun Care reformulation costs (5) | 0.4 | — | 0.5 | — | |||||||||||
Gain on sale of Playtex gloves | — | — | — | (15.9 | ) | ||||||||||
Interest expense associated with debt | 16.4 | 18.2 | 32.4 | 36.0 | |||||||||||
Other income, net | (2.7 | ) | (2.0 | ) | (1.4 | ) | (0.7 | ) | |||||||
Adjusted operating income | $ | 94.7 | $ | 108.3 | $ | 139.6 | $ | 144.6 | |||||||
% of net sales | 17.3 | % | 17.8 | % | 13.9 | % | 13.4 | % |
(1) | Restructuring costs associated with Project Fuel, an enterprise-wide transformational initiative that is designed to address all aspects of our business and cost structure, simplifying and transforming the organization, structure and key processes that will enable us to achieve our desired future state operations. Includes pre-tax SG&A of $1.9 and $3.3 for the three and six months ended March 31, 2019, associated with certain information technology enablement expenses for Project Fuel. |
(2) | Includes pre-tax SG&A of $1.0 for the three and six months ended March 31, 2019, associated with consulting costs for the Company to evaluate segments. |
(3) | Includes pre-tax SG&A of $0.5 and $1.0 for the three and six months ended March 31, 2019, and $2.6 for the three and six months ended March 31, 2018, for costs associated with the integration of the Jack Black acquisition. |
(4) | Includes pre-tax SG&A of $0.9 for the six months ended March 31, 2019, associated with a settlement with an investor. |
(5) | Includes pre-tax Cost of products sold of $0.4 and $0.5 for the three and six months ended March 31, 2019, associated with supply chain changes on select Sun Care products. |
Six Months Ended March 31, 2019 | Six Months Ended March 31, 2018 | ||||||||||||||||||||||
Reported | Adjustments (1) | Adjusted (Non-GAAP) | Reported | Adjustments (1) | Adjusted (Non-GAAP) | ||||||||||||||||||
Earnings before income taxes | 71.3 | $ | 37.3 | $ | 108.6 | 118.9 | $ | (9.6 | ) | $ | 109.3 | ||||||||||||
Income tax provision | 23.5 | 3.4 | 26.9 | 47.1 | (20.0 | ) | 27.1 | ||||||||||||||||
Net earnings | $ | 47.8 | $ | 33.9 | $ | 81.7 | $ | 71.8 | $ | 10.4 | $ | 82.2 | |||||||||||
Effective tax rate | 33.0 | % | 39.7 | % | |||||||||||||||||||
Adjusted effective tax rate | 24.9 | % | 24.8 | % |
(1) | Includes adjustments for restructuring charges, Feminine and Infant Care evaluation costs, Jack Black acquisition and integration costs, investor settlement expense, Sun Care reformulation costs, the sale of the Playtex gloves business, the related tax effects of these items, and the impact of the transition tax and re-measurement of deferred tax assets and liabilities related to the Tax Act. |
Net Sales (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Quarter Ended March 31, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Net Sales - Q2 '18 | $ | 345.2 | $ | 152.3 | $ | 80.3 | $ | 30.3 | $ | 608.1 | ||||||||||||||||||||||||
Organic | (41.0 | ) | (11.9 | )% | (10.1 | ) | (6.6 | )% | (5.5 | ) | (6.8 | )% | 2.5 | 8.3 | % | (54.1 | ) | (8.9 | )% | |||||||||||||||
Impact of disposition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of acquisition | — | — | % | 5.3 | 3.5 | % | — | — | % | — | — | % | 5.3 | 0.9 | % | |||||||||||||||||||
Impact of currency | (9.8 | ) | (2.8 | )% | (2.3 | ) | (1.6 | )% | (0.2 | ) | (0.3 | )% | (0.3 | ) | (1.0 | )% | (12.6 | ) | (2.1 | )% | ||||||||||||||
Net Sales - Q2 '19 | $ | 294.4 | (14.7 | )% | $ | 145.2 | (4.7 | )% | $ | 74.6 | (7.1 | )% | $ | 32.5 | 7.3 | % | $ | 546.7 | (10.1 | )% |
Net Sales (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Six Months Ended March 31, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Net Sales - Q2 '18 | $ | 639.3 | $ | 211.4 | $ | 162.9 | $ | 62.8 | $ | 1,076.4 | ||||||||||||||||||||||||
Organic | (42.9 | ) | (6.7 | )% | (12.4 | ) | (5.9 | )% | (13.2 | ) | (8.1 | )% | (1.8 | ) | (2.9 | )% | (70.3 | ) | (6.5 | )% | ||||||||||||||
Impact of disposition | — | — | % | (1.0 | ) | (0.5 | )% | — | — | % | — | — | % | (1.0 | ) | (0.1 | )% | |||||||||||||||||
Impact of acquisition | — | — | % | 17.1 | 8.1 | % | — | — | % | — | — | % | 17.1 | 1.6 | % | |||||||||||||||||||
Impact of currency | (14.3 | ) | (2.2 | )% | (3.2 | ) | (1.5 | )% | (0.4 | ) | (0.2 | )% | (0.5 | ) | (0.8 | )% | (18.4 | ) | (1.7 | )% | ||||||||||||||
Net Sales - Q2 '19 | $ | 582.1 | (8.9 | )% | $ | 211.9 | 0.2 | % | $ | 149.3 | (8.3 | )% | $ | 60.5 | (3.7 | )% | $ | 1,003.8 | (6.7 | )% |
Segment Profit (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Quarter Ended March 31, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Segment Profit - Q2 '18 | $ | 68.9 | $ | 48.6 | $ | 9.9 | $ | 4.3 | $ | 131.7 | ||||||||||||||||||||||||
Organic | (11.0 | ) | (16.0 | )% | (9.1 | ) | (18.7 | )% | 4.0 | 40.4 | % | 2.0 | 46.5 | % | (14.1 | ) | (10.7 | )% | ||||||||||||||||
Impact of disposition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of acquisition | — | — | % | 1.4 | 2.9 | % | — | — | % | — | — | % | 1.4 | 1.1 | % | |||||||||||||||||||
Impact of currency | (2.2 | ) | (3.2 | )% | (0.4 | ) | (0.9 | )% | (0.2 | ) | (1.9 | )% | (0.3 | ) | (7.0 | )% | (3.1 | ) | (2.4 | )% | ||||||||||||||
Segment Profit - Q2 '19 | $ | 55.7 | (19.2 | )% | $ | 40.5 | (16.7 | )% | $ | 13.7 | 38.5 | % | $ | 6.0 | 39.5 | % | $ | 115.9 | (12.0 | )% |
Segment Profit (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Six Months Ended March 31, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Segment Profit - Q2 '18 | $ | 122.6 | $ | 42.4 | $ | 14.7 | $ | 11.4 | $ | 191.1 | ||||||||||||||||||||||||
Organic | (8.5 | ) | (6.9 | )% | (7.3 | ) | (17.2 | )% | 6.8 | 46.3 | % | (3.9 | ) | (34.2 | )% | (12.9 | ) | (6.8 | )% | |||||||||||||||
Impact of disposition | — | — | % | (0.3 | ) | (0.7 | )% | — | — | % | — | — | % | (0.3 | ) | (0.1 | )% | |||||||||||||||||
Impact of acquisition | — | — | % | 5.3 | 12.5 | % | — | — | % | — | — | % | 5.3 | 2.8 | % | |||||||||||||||||||
Impact of currency | (3.4 | ) | (2.8 | )% | (0.2 | ) | (0.5 | )% | (0.3 | ) | (2.1 | )% | (0.3 | ) | (2.6 | )% | (4.2 | ) | (2.2 | )% | ||||||||||||||
Segment Profit - Q2 '19 | $ | 110.7 | (9.7 | )% | $ | 39.9 | (5.9 | )% | $ | 21.2 | 44.2 | % | $ | 7.2 | (36.8 | )% | $ | 179.0 | (6.3 | )% |
Quarter Ended March 31, | Six Months Ended March 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net earnings | $ | 48.2 | $ | 65.1 | $ | 47.8 | $ | 71.8 | |||||||
Income tax provision | 15.5 | 20.7 | 23.5 | 47.1 | |||||||||||
Interest expense, net | 16.3 | 18.4 | 32.3 | 36.1 | |||||||||||
Depreciation and amortization | 24.3 | 24.4 | 46.4 | 49.2 | |||||||||||
EBITDA | $ | 104.3 | $ | 128.6 | $ | 150.0 | $ | 204.2 | |||||||
Restructuring and related costs(1) | $ | 14.9 | $ | 3.7 | $ | 33.4 | $ | 3.7 | |||||||
Feminine and Infant Care evaluation costs | 1.0 | — | 1.0 | — | |||||||||||
Jack Black acquisition and integration costs | 0.5 | 2.6 | 1.0 | 2.6 | |||||||||||
Investor settlement expense | — | — | 0.9 | — | |||||||||||
Sun Care Reformulation | 0.4 | — | 0.5 | — | |||||||||||
Gain on sale of Playtex gloves | — | — | — | (15.9 | ) | ||||||||||
Adjusted EBITDA | $ | 121.1 | $ | 134.9 | $ | 186.8 | $ | 194.6 |
(1) | Excludes $0.5 of accelerated depreciation for the quarter and six months ended March 31, 2019, which are included within Depreciation and amortization. |
Adjusted EPS Outlook | ||
Fiscal 2019 GAAP EPS | $2.16 - $2.46 | |
Restructuring and related costs | approx. | $1.22 |
Sun Care reformulation costs | approx. | $0.09 |
Jack Black acquisition and integration costs | approx. | $0.03 |
Feminine and Infant Care evaluation costs | approx. | $0.02 |
Investor settlement expense | approx. | $0.02 |
Impact of tax reform | approx. | $0.09 |
Income taxes(1) | approx. | $(0.33) |
Fiscal 2019 Adjusted EPS Outlook (Non-GAAP) | $3.30 - $3.60 |
(1) | Income tax effect of the adjustments to Fiscal 2019 GAAP EPS noted above. |
Q2 2019 | Days (1) | Q1 2019 | Days (1) | Q4 2018 | Days (1) | ||||||||||||||
Receivables, as reported | $ | 216.6 | $ | 218.5 | $ | 223.4 | |||||||||||||
Less: Trade allowance in accrued liabilities (2) | (25.1 | ) | (26.1 | ) | (25.8 | ) | |||||||||||||
Receivables, adjusted | 191.5 | 32 | 192.4 | 32 | 197.6 | 32 | |||||||||||||
Inventories, as reported | 356.7 | 110 | 352.0 | 107 | 347.4 | 106 | |||||||||||||
Accounts payable, as reported | 225.7 | 70 | 231.8 | 71 | 229.6 | 70 | |||||||||||||
Average adjusted working capital (3) | $ | 322.5 | $ | 312.6 | $ | 315.4 | |||||||||||||
% of net sales (4) | 14.9 | % | 14.1 | % | 14.1 | % |
(1) | Days sales outstanding is calculated using net sales for the trailing four-quarter period. Days in inventory and days payable outstanding are calculated using cost of products sold for the trailing four-quarter period. |
(2) | Trade allowances are recorded as a reduction of net sales per GAAP and reported in accrued expenses on the Condensed Consolidated Balance Sheets. |
(3) | Adjusted working capital is defined as receivables (less trade allowance in accrued liabilities), plus inventories, less accounts payable. Average adjusted working capital is calculated using an average of the four-quarter end balances for each working capital component as of March 31, 2019, December 31, 2018 and September 30, 2018, respectively. |
(4) | Average adjusted working capital divided by trailing four-quarter net sales. |
Six months ended March 31, 2018 | Adjustments for adoption of ASU 2017-07 | Adjusted six months ended March 31, 2018 | |||||||||
Cost of products sold | $ | 574.0 | $ | 2.0 | $ | 576.0 | |||||
Gross profit | 502.4 | (2.0 | ) | 500.4 | |||||||
Selling, general and administrative expenses | 200.7 | 1.5 | 202.2 | ||||||||
Other income, net | 2.8 | (3.5 | ) | (0.7 | ) | ||||||
Earnings before income taxes | 118.9 | — | 118.9 | ||||||||
Adjusted operating income | $ | 148.1 | $ | (3.5 | ) | $ | 144.6 |