(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 |
Emerging growth company |
Exhibit No. | Description |
99.1 | |
101 | Cover page information from Edgewell Personal Care Company's Current Report on Form 8-K filed on August 6, 2019, formatted in iXBRL (Inline Extensible Business Reporting Language). |
Exhibit No. | Description |
99.1 | |
101 | Cover page information from Edgewell Personal Care Company's Current Report on Form 8-K filed on August 6, 2019, formatted in iXBRL (Inline Extensible Business Reporting Language). |
![]() | 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 $609.2 million in the third quarter of fiscal 2019, a decrease of 1.8% when compared to the prior year quarter. Organic net sales were down 0.3% for the quarter. (Organic basis excludes the translational impact from currency movements.) |
• | GAAP Diluted Earnings Per Share ("EPS") were a loss of $8.16 for the third quarter, including the after-tax impact of a non-cash impairment of goodwill and indefinite-lived intangible assets of $9.10, resulting from declines in the common stock price and the ensuing decrease in the Company's market capitalization, and a $0.13 after tax impact from Project Fuel. Adjusted EPS were $1.11 for the third quarter, compared to $0.91 in the prior year quarter. |
• | The Company is maintaining its previously announced financial outlook for fiscal 2019. |
• | The Company continues to make substantial progress on the integration planning process related to the pending acquisition of Harry’s, which we continue to expect to close no later than the first quarter of calendar 2020. |
• | The Company has completed its comprehensive evaluation of strategic alternatives for the Feminine Care business. Based on that review, and in light of improving business trends and operational improvement potential, Management has concluded that retaining the Feminine Care business will maximize value to the Company and its shareholders. |
• | The Company continues to explore strategic alternatives for the Infant Care business. |
• | 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 nine months ended June 30, 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 nine months ended June 30, 2019, the impact of dispositions 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, impairment charges, Harry's acquisition and integration planning costs, 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, impairment charges, Harry's acquisition and integration |
• | Adjusted net earnings and adjusted earnings per share are defined as net earnings and diluted earnings per share excluding items such as restructuring charges, impairment charges, Harry's acquisition and integration planning costs, 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, impairment charges, Harry's acquisition and integration planning costs, 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 June 30, | Nine Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | $ | 609.2 | $ | 620.6 | $ | 1,613.0 | $ | 1,697.0 | |||||||
Cost of products sold | 317.0 | 318.9 | 876.4 | 894.9 | |||||||||||
Gross profit | 292.2 | 301.7 | 736.6 | 802.1 | |||||||||||
Selling, general and administrative expense | 94.8 | 101.3 | 280.2 | 303.5 | |||||||||||
Advertising and sales promotion expense | 91.8 | 105.3 | 191.3 | 229.9 | |||||||||||
Research and development expense | 12.9 | 14.9 | 39.5 | 46.5 | |||||||||||
Impairment charges | 549.0 | 24.4 | 549.0 | 24.4 | |||||||||||
Restructuring charges | 7.1 | 15.4 | 37.7 | 19.1 | |||||||||||
Sale of Playtex gloves | — | 0.6 | — | (15.3 | ) | ||||||||||
Interest expense associated with debt | 15.6 | 16.5 | 48.0 | 52.5 | |||||||||||
Other expense, net | 2.7 | 1.9 | 1.3 | 1.2 | |||||||||||
(Loss) earnings before income taxes | (481.7 | ) | 21.4 | (410.4 | ) | 140.3 | |||||||||
Income tax (benefit) provision | (40.3 | ) | 9.3 | (16.8 | ) | 56.4 | |||||||||
Net (loss) earnings | $ | (441.4 | ) | $ | 12.1 | $ | (393.6 | ) | $ | 83.9 | |||||
Earnings per share: | |||||||||||||||
Basic net (loss) earnings per share | (8.16 | ) | 0.23 | (7.27 | ) | 1.54 | |||||||||
Diluted net (loss) earnings per share | (8.16 | ) | 0.22 | (7.27 | ) | 1.54 | |||||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 54.1 | 54.0 | 54.1 | 54.5 | |||||||||||
Diluted | 54.1 | 54.1 | 54.1 | 54.6 |
June 30, 2019 | September 30, 2018 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 279.0 | $ | 266.4 | |||
Trade receivables, less allowance for doubtful accounts | 241.6 | 226.5 | |||||
Inventories | 372.7 | 329.5 | |||||
Other current assets | 142.3 | 128.8 | |||||
Total current assets | 1,035.6 | 951.2 | |||||
Property, plant and equipment, net | 400.7 | 424.1 | |||||
Goodwill | 1,060.2 | 1,450.8 | |||||
Other intangible assets, net | 921.4 | 1,099.0 | |||||
Other assets | 34.4 | 28.2 | |||||
Total assets | $ | 3,452.3 | $ | 3,953.3 | |||
Liabilities and Shareholders' Equity | |||||||
Current liabilities | |||||||
Current maturities of long-term debt | $ | 125.0 | $ | 184.9 | |||
Notes payable | 12.6 | 8.2 | |||||
Accounts payable | 221.9 | 238.4 | |||||
Other current liabilities | 319.1 | 285.5 | |||||
Total current liabilities | 678.6 | 717.0 | |||||
Long-term debt | 1,097.5 | 1,103.8 | |||||
Deferred income tax liabilities | 118.7 | 176.1 | |||||
Other liabilities | 203.0 | 211.8 | |||||
Total liabilities | $ | 2,097.8 | $ | 2,208.7 | |||
Shareholders' equity | |||||||
Common shares | 0.7 | 0.7 | |||||
Additional paid-in capital | 1,632.8 | 1,628.3 | |||||
Retained earnings | 693.4 | 1,083.1 | |||||
Common shares in treasury at cost | (811.5 | ) | (819.2 | ) | |||
Accumulated other comprehensive loss | (160.9 | ) | (148.3 | ) | |||
Total shareholders' equity | 1,354.5 | 1,744.6 | |||||
Total liabilities and shareholders' equity | $ | 3,452.3 | $ | 3,953.3 | |||
Nine Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash Flow from Operating Activities | |||||||
Net (loss) earnings | $ | (393.6 | ) | $ | 83.9 | ||
Impairment charges | 549.0 | 24.4 | |||||
Depreciation and amortization | 69.2 | 73.4 | |||||
Share-based compensation expense | 13.8 | 14.0 | |||||
Loss (gain) on sale of assets | 1.4 | (13.0 | ) | ||||
Deferred compensation payments | (7.3 | ) | (15.4 | ) | |||
Deferred income taxes | (56.8 | ) | (22.9 | ) | |||
Other, net | (0.3 | ) | 32.0 | ||||
Changes in current assets and liabilities used in operations | (77.2 | ) | 5.1 | ||||
Net cash from operating activities | 98.2 | 181.5 | |||||
Cash Flow from Investing Activities | |||||||
Capital expenditures | (38.7 | ) | (41.8 | ) | |||
Acquisitions, net of cash acquired | — | (90.2 | ) | ||||
Playtex glove sale | — | 19.0 | |||||
Proceeds from sale of assets | 4.1 | 4.7 | |||||
Collection of deferred purchase price from accounts receivable sold | 9.0 | 7.2 | |||||
Other, net | (1.3 | ) | — | ||||
Net cash used by investing activities | (26.9 | ) | (101.1 | ) | |||
Cash Flow from Financing Activities | |||||||
Cash proceeds from debt with original maturities greater than 90 days | 316.0 | 477.0 | |||||
Cash payments on debt with original maturities greater than 90 days | (198.0 | ) | (722.0 | ) | |||
Term Loan repayment | (185.0 | ) | — | ||||
Net increase (decrease) in debt with original maturities of 90 days or less | 5.7 | 0.2 | |||||
Common shares purchased | — | (124.4 | ) | ||||
Net financing inflow from the Accounts Receivable Facility | 5.6 | 4.6 | |||||
Employee shares withheld for taxes | (1.8 | ) | (2.2 | ) | |||
Net cash used by financing activities | (57.5 | ) | (366.8 | ) | |||
Effect of exchange rate changes on cash | (1.2 | ) | 2.0 | ||||
Net decrease in cash and cash equivalents | 12.6 | (284.4 | ) | ||||
Cash and cash equivalents, beginning of period | 266.4 | 502.9 | |||||
Cash and cash equivalents, end of period | $ | 279.0 | $ | 218.5 |
Common Shares | Treasury Shares | ||||||||||||||||||||||||||||
Number | Par Value | Number | Amount | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||
Balance at March 31, 2019 | 65.2 | $ | 0.7 | (11.1 | ) | $ | (812.4 | ) | $ | 1,630.0 | $ | 1,134.8 | $ | (171.0 | ) | $ | 1,782.1 | ||||||||||||
Net loss | — | — | — | — | — | (441.4 | ) | — | (441.4 | ) | |||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 12.6 | 12.6 | |||||||||||||||||||||
Pension and postretirement activity | — | — | — | — | — | — | (0.5 | ) | (0.5 | ) | |||||||||||||||||||
Deferred gain on hedging activity | — | — | — | — | — | — | (2.0 | ) | (2.0 | ) | |||||||||||||||||||
Activity under share plans | — | — | — | 0.9 | 2.8 | — | — | 3.7 | |||||||||||||||||||||
Balance at June 30, 2019 | 65.2 | $ | 0.7 | (11.1 | ) | $ | (811.5 | ) | $ | 1,632.8 | $ | 693.4 | $ | (160.9 | ) | $ | 1,354.5 |
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 loss | — | — | — | — | — | (393.6 | ) | — | (393.6 | ) | |||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (9.4 | ) | (9.4 | ) | |||||||||||||||||||
Pension and postretirement activity | — | — | — | — | — | — | (0.2 | ) | (0.2 | ) | |||||||||||||||||||
Impact of ASU 2016-16 | — | — | — | — | — | 3.9 | — | 3.9 | |||||||||||||||||||||
Deferred gain on hedging activity | — | — | — | — | — | — | (3.0 | ) | (3.0 | ) | |||||||||||||||||||
Activity under share plans | — | — | 0.1 | 7.7 | 4.5 | — | — | 12.2 | |||||||||||||||||||||
Balance at June 30, 2019 | 65.2 | $ | 0.7 | (11.1 | ) | $ | (811.5 | ) | $ | 1,632.8 | $ | 693.4 | $ | (160.9 | ) | $ | 1,354.5 |
Common Shares | Treasury Shares | ||||||||||||||||||||||||||||
Number | Par Value | Number | Amount | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||
Balance at March 31, 2018 | 65.2 | $ | 0.7 | (11.2 | ) | $ | (822.7 | ) | $ | 1,625.2 | $ | 1,034.4 | $ | (106.3 | ) | $ | 1,731.3 | ||||||||||||
Net earnings | — | — | — | — | — | 12.1 | — | 12.1 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (36.3 | ) | (36.3 | ) | |||||||||||||||||||
Pension and postretirement activity | — | — | — | — | — | — | 1.9 | 1.9 | |||||||||||||||||||||
Deferred gain on hedging activity | — | — | — | — | — | — | 4.4 | 4.4 | |||||||||||||||||||||
Repurchase of shares | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Activity under share plans | — | — | — | 0.3 | 4.2 | — | — | 4.5 | |||||||||||||||||||||
Balance at June 30, 2018 | 65.2 | $ | 0.7 | (11.2 | ) | $ | (822.4 | ) | $ | 1,629.4 | $ | 1,046.5 | $ | (136.3 | ) | $ | 1,717.9 |
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 | — | — | — | — | — | 83.9 | — | 83.9 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (10.4 | ) | (10.4 | ) | |||||||||||||||||||
Pension and postretirement activity | — | — | — | — | — | — | 2.6 | 2.6 | |||||||||||||||||||||
Deferred gain on hedging activity | — | — | — | — | — | — | 2.9 | 2.9 | |||||||||||||||||||||
Repurchase of shares | — | — | (2.1 | ) | (124.4 | ) | — | — | — | (124.4 | ) | ||||||||||||||||||
Activity under share plans | — | — | 0.1 | 5.9 | 6.0 | 9.7 | — | 21.6 | |||||||||||||||||||||
Balance at June 30, 2018 | 65.2 | $ | 0.7 | (11.2 | ) | $ | (822.4 | ) | $ | 1,629.4 | $ | 1,046.5 | $ | (136.3 | ) | $ | 1,717.9 |
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Sales | |||||||||||||||
Wet Shave | $ | 327.7 | $ | 341.1 | $ | 909.8 | $ | 980.4 | |||||||
Sun and Skin Care | 168.4 | 162.8 | 380.3 | 374.2 | |||||||||||
Feminine Care | 80.9 | 84.1 | 230.2 | 247.0 | |||||||||||
All Other | 32.2 | 32.6 | 92.7 | 95.4 | |||||||||||
Total net sales | $ | 609.2 | $ | 620.6 | $ | 1,613.0 | $ | 1,697.0 | |||||||
Segment Profit | |||||||||||||||
Wet Shave | $ | 54.1 | $ | 55.0 | $ | 164.8 | $ | 177.6 | |||||||
Sun and Skin Care | 42.2 | 33.9 | 82.1 | 76.3 | |||||||||||
Feminine Care | 15.5 | 11.0 | 36.7 | 25.7 | |||||||||||
All Other | 3.6 | 5.4 | 10.8 | 16.8 | |||||||||||
Total segment profit | 115.4 | 105.3 | 294.4 | 296.4 | |||||||||||
General corporate and other expenses | (13.1 | ) | (17.7 | ) | (43.5 | ) | (55.6 | ) | |||||||
Impairment charges | (549.0 | ) | (24.4 | ) | (549.0 | ) | (24.4 | ) | |||||||
Restructuring and related costs (1) | (8.9 | ) | (15.9 | ) | (42.8 | ) | (19.6 | ) | |||||||
Harry's acquisition and integration costs (2) | (1.8 | ) | — | (1.8 | ) | — | |||||||||
Feminine and Infant Care evaluation costs (3) | (0.5 | ) | — | (1.5 | ) | — | |||||||||
Sun Care reformulation costs (4) | (1.0 | ) | — | (1.5 | ) | — | |||||||||
Jack Black acquisition and integration costs (5) | (0.1 | ) | (2.3 | ) | (1.1 | ) | (4.9 | ) | |||||||
Investor settlement expense (6) | — | — | (0.9 | ) | — | ||||||||||
Sale of Playtex gloves | — | (0.6 | ) | — | 15.3 | ||||||||||
Amortization of intangibles | (4.4 | ) | (4.6 | ) | (13.4 | ) | (13.2 | ) | |||||||
Interest and other expense, net | (18.3 | ) | (18.4 | ) | (49.3 | ) | (53.7 | ) | |||||||
Total (loss) earnings before income taxes | $ | (481.7 | ) | $ | 21.4 | $ | (410.4 | ) | $ | 140.3 |
(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 $1.8 and $5.1 for the three and nine months ended June 30, 2019, and $0.5 for the three and nine months ended June 30, 2018 associated with certain information technology enablement expenses for Project Fuel. |
(2) | Acquisition and integration planning costs related to Harry’s, Inc. totaling $1.8 for the three and nine months ended June 30, 2019, were included in SG&A on the Consolidated Statement of Earnings. |
(3) | Includes pre-tax SG&A of $0.5 and $1.5 for the three and nine months ended June 30, 2019, respectively, associated with consulting costs for the Company to evaluate segments. |
(4) | Includes pre-tax Cost of products sold of $1.0 and $1.5 for the three and nine months ended June 30, 2019, respectively, associated with supply chain changes on select Sun Care products. |
(5) | Acquisition and integration costs related to Jack Black totaling $0.1 and $1.1 for the three and nine months ended June 30, 2019, respectively, were included in SG&A on the Consolidated Statement of Earnings. Acquisition and integration costs related to Jack Black totaled $0.5 and $3.1 for the three and nine months ending June 30, 2018, respectively, were included in SG&A in the Consolidated Statement of Earnings. Additionally, acquisition and integration costs of $1.8 were included in Cost of products sold for the three and nine months ended June 30, 2018. |
(6) | Includes pre-tax SG&A of $0.9 for the nine months ended June 30, 2019, associated with a settlement with an investor. |
Quarter Ended June 30, | |||||||||||||||
Net Earnings | Diluted EPS | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (Loss) Earnings and Diluted EPS - GAAP (Unaudited) | $ | (441.4 | ) | $ | 12.1 | $ | (8.16 | ) | $ | 0.22 | |||||
Impairment charges | 549.0 | 24.4 | 10.14 | 0.45 | |||||||||||
Restructuring and related costs (1) | 8.9 | 15.9 | 0.17 | 0.29 | |||||||||||
Harry's acquisition and integration costs (2) | 1.8 | — | 0.03 | — | |||||||||||
Feminine and Infant Care evaluation costs (3) | 0.5 | — | 0.01 | — | |||||||||||
Sun Care reformulation costs (4) | 1.0 | — | 0.02 | — | |||||||||||
Jack Black acquisition and integration (5) | 0.1 | 2.3 | — | 0.05 | |||||||||||
Gain on sale of Playtex gloves | — | 0.6 | — | 0.01 | |||||||||||
Impact of dilutive shares (7) | — | — | (0.01 | ) | — | ||||||||||
Income taxes | (59.4 | ) | (6.1 | ) | (1.09 | ) | (0.11 | ) | |||||||
Adjusted Net Earnings and Adjusted Diluted EPS - Non-GAAP | $ | 60.5 | $ | 49.2 | $ | 1.11 | $ | 0.91 | |||||||
Weighted-average shares - Diluted | 54.1 | 54.1 |
Nine Months Ended June 30, | |||||||||||||||
Net Earnings | Diluted EPS | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (Loss) Earnings and Diluted EPS - GAAP (Unaudited) | $ | (393.6 | ) | $ | 83.9 | $ | (7.27 | ) | $ | 1.54 | |||||
Impairment charges | 549.0 | 24.4 | 10.14 | 0.45 | |||||||||||
Restructuring and related costs (1) | 42.8 | 19.6 | 0.79 | 0.36 | |||||||||||
Harry's acquisition and integration costs (2) | 1.8 | — | 0.03 | — | |||||||||||
Feminine and Infant Care evaluation costs (3) | 1.5 | — | 0.03 | — | |||||||||||
Sun Care reformulation costs (4) | 1.5 | — | 0.03 | — | |||||||||||
Jack Black acquisition and integration (5) | 1.1 | 4.9 | 0.02 | 0.09 | |||||||||||
Investor settlement expense (6) | 0.9 | — | 0.02 | — | |||||||||||
Gain on sale of Playtex gloves | — | (15.3 | ) | — | (0.28 | ) | |||||||||
Impact of dilutive shares (7) | — | — | (0.01 | ) | — | ||||||||||
Income taxes (8) | (62.8 | ) | 13.9 | (1.16 | ) | 0.25 | |||||||||
Adjusted Net Earnings and Adjusted Diluted EPS - Non-GAAP | $ | 142.2 | $ | 131.4 | $ | 2.62 | $ | 2.41 | |||||||
Weighted-average shares - Diluted | 54.1 | 54.6 |
(1) | Restructuring costs associated with Project Fuel includes pre-tax SG&A of $1.8 and $5.1 for the three and nine months ended June 30, 2019, respectively, and $0.5 for the three and nine months ended June 30, 2018, associated with certain information technology enablement expenses. |
(2) | Acquisition and integration planning costs related to Harry’s, Inc. totaling $1.8 for the three and nine months ended June 30, 2019, were included in SG&A on the Consolidated Statement of Earnings. |
(3) | Includes pre-tax SG&A of $0.5 and $1.5 for the three and nine months ended June 30, 2019, respectively, associated with consulting costs for the Company to evaluate segments. |
(4) | Includes pre-tax Cost of products sold of $1.0 and $1.5 for the three and nine months ended June 30, 2019, respectively, associated with supply chain changes on select Sun Care products. |
(5) | Acquisition and integration costs related to Jack Black totaling $0.1 and $1.1 for the three and nine months ended June 30, 2019, respectively, were included in SG&A on the Consolidated Statement of Earnings. Acquisition and integration costs related to Jack Black totaled $0.5 and $3.1 for the three and nine months ending June 30, 2018, respectively, were included in SG&A in the Consolidated Statement of Earnings. Additionally, acquisition and integration costs of $1.8 were included in Cost of products sold for the three and nine months ended June 30, 2018. |
(6) | Includes pre-tax SG&A of $0.9 for the nine months ended June 30, 2019, associated with a settlement with an investor. |
(7) | GAAP EPS was calculated using basic weighted average shares outstanding due to a net loss. Adjusted diluted EPS was calculated using diluted weighted average shares outstanding. |
(8) | Includes Income tax expense of $4.7 for the nine months ended June 30, 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 nine months ended June 30, 2018 in addition to the tax impact of the other adjustments to Net Earnings and Diluted EPS - GAAP. |
Quarter Ended June 30, 2019 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net (Loss) Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 292.2 | $ | 94.8 | $ | (481.7 | ) | $ | (441.4 | ) | $ | (8.16 | ) | ||||||
% of net sales | 48.0 | % | 15.6 | % | |||||||||||||||
Impairment charges | — | — | 549.0 | 492.6 | 9.10 | ||||||||||||||
Restructuring and related costs (2) | — | 1.8 | 8.9 | 6.8 | 0.13 | ||||||||||||||
Harry's acquisition and integration costs | — | 1.8 | 1.8 | 1.4 | 0.03 | ||||||||||||||
Feminine and Infant Care evaluation costs | — | 0.5 | 0.5 | 0.4 | 0.01 | ||||||||||||||
Sun Care reformulation costs | 1.0 | — | 1.0 | 0.7 | 0.01 | ||||||||||||||
Jack Black acquisition and integration costs | — | 0.1 | 0.1 | — | — | ||||||||||||||
Impact of dilutive shares | — | — | — | — | (0.01 | ) | |||||||||||||
Total Adjusted Non-GAAP | $ | 293.2 | $ | 90.6 | $ | 79.6 | $ | 60.5 | $ | 1.11 | |||||||||
% of net sales | 48.1 | % | 14.9 | % |
Nine Months Ended June 30, 2019 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net (Loss) Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 736.6 | $ | 280.2 | $ | (410.4 | ) | $ | (393.6 | ) | $ | (7.27 | ) | ||||||
% of net sales | 45.7 | % | 17.4 | % | |||||||||||||||
Impairment charges | — | — | 549.0 | 492.6 | 9.10 | ||||||||||||||
Restructuring and related costs (2) | — | 5.1 | 42.8 | 33.3 | 0.61 | ||||||||||||||
Harry's acquisition and integration costs | — | 1.8 | 1.8 | 1.4 | 0.03 | ||||||||||||||
Feminine and Infant Care evaluation costs | — | 1.5 | 1.5 | 1.2 | 0.02 | ||||||||||||||
Sun Care reformulation costs | 1.5 | — | 1.5 | 1.1 | 0.02 | ||||||||||||||
Jack Black acquisition and integration costs | — | 1.1 | 1.1 | 0.8 | 0.02 | ||||||||||||||
Investor settlement expense | — | 0.9 | 0.9 | 0.7 | 0.01 | ||||||||||||||
Impact of dilutive shares | — | — | — | — | (0.01 | ) | |||||||||||||
Income tax reform | — | — | — | 4.7 | 0.09 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 738.1 | $ | 269.8 | $ | 188.2 | $ | 142.2 | $ | 2.62 | |||||||||
% of net sales | 45.8 | % | 16.7 | % |
Quarter Ended June 30, 2018 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 301.7 | $ | 101.3 | $ | 21.4 | $ | 12.1 | $ | 0.22 | |||||||||
% of net sales | 48.6 | % | 16.3 | % | |||||||||||||||
Impairment charge | — | — | 24.4 | 23.3 | 0.43 | ||||||||||||||
Restructuring and related costs (2) | — | 0.5 | 15.9 | 11.6 | 0.22 | ||||||||||||||
Jack Black acquisition and integration costs | 1.8 | 0.5 | 2.3 | 1.7 | 0.03 | ||||||||||||||
Sale of Playtex gloves | — | 0.6 | 0.5 | 0.01 | |||||||||||||||
Total Adjusted Non-GAAP | $ | 303.5 | $ | 100.3 | $ | 64.6 | $ | 49.2 | $ | 0.91 | |||||||||
% of net sales | 48.9 | % | 16.2 | % |
Nine Months Ended June 30, 2018 | |||||||||||||||||||
Gross Profit | SG&A | EBIT (1) | Net Earnings | Diluted EPS | |||||||||||||||
GAAP - Reported | $ | 802.1 | $ | 303.5 | $ | 140.3 | $ | 83.9 | $ | 1.54 | |||||||||
% of net sales | 47.3 | % | 17.9 | % | |||||||||||||||
Impairment charge | — | — | 24.4 | 23.3 | 0.43 | ||||||||||||||
Restructuring and related costs (2) | — | 0.5 | 19.6 | 14.3 | 0.26 | ||||||||||||||
Jack Black acquisition and integration costs | 1.8 | 3.1 | 4.9 | 3.6 | 0.06 | ||||||||||||||
Sale of Playtex gloves | — | — | (15.3 | ) | (11.1 | ) | (0.20 | ) | |||||||||||
Income tax reform | — | — | — | 17.4 | 0.32 | ||||||||||||||
Total Adjusted Non-GAAP | $ | 803.9 | $ | 299.9 | $ | 173.9 | $ | 131.4 | $ | 2.41 | |||||||||
% of net sales | 47.4 | % | 17.7 | % |
(1) | EBIT is defined as (Loss) earnings before income taxes. |
(2) | Restructuring costs associated with Project Fuel includes pre-tax SG&A of $1.8 and $5.1 for the three and nine months ended June 30, 2019, respectively, and $0.5 for the three and nine months ended June 30, 2018, associated with certain information technology enablement expenses. |
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Loss) earnings before income taxes | $ | (481.7 | ) | $ | 21.4 | $ | (410.4 | ) | $ | 140.3 | |||||
Impairment charges | 549.0 | 24.4 | 549.0 | 24.4 | |||||||||||
Restructuring and related costs (1) | 8.9 | 15.9 | 42.8 | 19.6 | |||||||||||
Harry's acquisition and integration costs (2) | 1.8 | — | 1.8 | — | |||||||||||
Feminine and Infant Care evaluation costs (3) | 0.5 | — | 1.5 | — | |||||||||||
Sun Care reformulation costs (4) | 1.0 | — | 1.5 | — | |||||||||||
Jack Black acquisition and integration costs (5) | 0.1 | 2.3 | 1.1 | 4.9 | |||||||||||
Investor settlement expense (6) | — | — | 0.9 | — | |||||||||||
Sale of Playtex gloves | — | 0.6 | — | (15.3 | ) | ||||||||||
Interest expense associated with debt | 15.6 | 16.5 | 48.0 | 52.5 | |||||||||||
Other expense, net | 2.7 | 1.9 | 1.3 | 1.2 | |||||||||||
Adjusted operating income | $ | 97.9 | $ | 83.0 | $ | 237.5 | $ | 227.6 | |||||||
% of net sales | 16.1 | % | 13.4 | % | 14.7 | % | 13.4 | % |
(1) | Restructuring costs associated with Project Fuel includes pre-tax SG&A of $1.8 and $5.1 for the three and nine months ended June 30, 2019, respectively, and $0.5 for the three and nine months ended June 30, 2018, associated with certain information technology enablement expenses. |
(2) | Acquisition and integration planning costs related to Harry’s, Inc. totaling $1.8 for the three and nine months ended June 30, 2019, were included in SG&A on the Consolidated Statement of Earnings. |
(3) | Includes pre-tax SG&A of $0.5 and $1.5 for the three and nine months ended June 30, 2019, respectively, associated with consulting costs for the Company to evaluate segments. |
(4) | Includes pre-tax Cost of products sold of $1.0 and $1.5 for the three and nine months ended June 30, 2019, respectively, associated with supply chain changes on select Sun Care products. |
(5) | Acquisition and integration costs related to Jack Black totaling $0.1 and $1.1 for the three and nine months ended June 30, 2019, respectively, were included in SG&A on the Consolidated Statement of Earnings. Acquisition and integration costs related to Jack Black totaled $0.5 and $3.1 for the three and nine months ending June 30, 2018, respectively, were included in SG&A in the Consolidated Statement of Earnings. Additionally, acquisition and integration costs of $1.8 were included in Cost of products sold for the three and nine months ended June 30, 2018. |
(6) | Includes pre-tax SG&A of $0.9 for the nine months ended June 30, 2019, associated with a settlement with an investor. |
Nine Months Ended June 30, 2019 | Nine Months Ended June 30, 2018 | ||||||||||||||||||||||
Reported | Adjustments (1) | Adjusted (Non-GAAP) | Reported | Adjustments (1) | Adjusted (Non-GAAP) | ||||||||||||||||||
(Loss) earnings before income taxes | (410.4 | ) | $ | 598.6 | $ | 188.2 | 140.3 | $ | 33.6 | $ | 173.9 | ||||||||||||
Income tax (benefit) provision | (16.8 | ) | 62.8 | 46.0 | 56.4 | (13.9 | ) | 42.5 | |||||||||||||||
Net (loss) earnings | $ | (393.6 | ) | $ | 535.8 | $ | 142.2 | $ | 83.9 | $ | 47.5 | $ | 131.4 | ||||||||||
Effective tax rate | 4.1 | % | 40.2 | % | |||||||||||||||||||
Adjusted effective tax rate | 24.4 | % | 24.4 | % |
(1) | Includes adjustments for restructuring charges, impairment charges, Harry's acquisition and integration planning costs, 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 June 30, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Net Sales - Q3 '18 | $ | 341.1 | $ | 162.8 | $ | 84.1 | $ | 32.6 | $ | 620.6 | ||||||||||||||||||||||||
Organic | (5.8 | ) | (1.7 | )% | 7.0 | 4.3 | % | (2.9 | ) | (3.4 | )% | (0.2 | ) | (0.6 | )% | (1.9 | ) | (0.3 | )% | |||||||||||||||
Impact of disposition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of acquisition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of currency | (7.6 | ) | (2.2 | )% | (1.4 | ) | (0.9 | )% | (0.3 | ) | (0.4 | )% | (0.2 | ) | (0.6 | )% | (9.5 | ) | (1.5 | )% | ||||||||||||||
Net Sales - Q3 '19 | $ | 327.7 | (3.9 | )% | $ | 168.4 | 3.4 | % | $ | 80.9 | (3.8 | )% | $ | 32.2 | (1.2 | )% | $ | 609.2 | (1.8 | )% |
Net Sales (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Nine Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Net Sales - Q3 '18 | $ | 980.4 | $ | 374.2 | $ | 247.0 | $ | 95.4 | $ | 1,697.0 | ||||||||||||||||||||||||
Organic | (48.7 | ) | (5.0 | )% | (5.4 | ) | (1.4 | )% | (16.1 | ) | (6.5 | )% | (2.0 | ) | (2.1 | )% | (72.2 | ) | (4.3 | )% | ||||||||||||||
Impact of disposition | — | — | % | (1.0 | ) | (0.3 | )% | — | — | % | — | — | % | (1.0 | ) | (0.1 | )% | |||||||||||||||||
Impact of acquisition | — | — | % | 17.1 | 4.6 | % | — | — | % | — | — | % | 17.1 | 1.0 | % | |||||||||||||||||||
Impact of currency | (21.9 | ) | (2.2 | )% | (4.6 | ) | (1.3 | )% | (0.7 | ) | (0.3 | )% | (0.7 | ) | (0.7 | )% | (27.9 | ) | (1.5 | )% | ||||||||||||||
Net Sales - Q3 '19 | $ | 909.8 | (7.2 | )% | $ | 380.3 | 1.6 | % | $ | 230.2 | (6.8 | )% | $ | 92.7 | (2.8 | )% | $ | 1,613.0 | (4.9 | )% |
Segment Profit (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Quarter Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Segment Profit - Q3 '18 | $ | 55.0 | $ | 33.9 | $ | 11.0 | $ | 5.4 | $ | 105.3 | ||||||||||||||||||||||||
Organic | 0.8 | 1.5 | % | 8.5 | 25.1 | % | 4.7 | 42.7 | % | (1.7 | ) | (31.5 | )% | 12.3 | 11.7 | % | ||||||||||||||||||
Impact of disposition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of acquisition | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Impact of currency | (1.7 | ) | (3.1 | )% | (0.2 | ) | (0.6 | )% | (0.2 | ) | (1.7 | )% | (0.1 | ) | (1.8 | )% | (2.2 | ) | (2.1 | )% | ||||||||||||||
Segment Profit - Q3 '19 | $ | 54.1 | (1.6 | )% | $ | 42.2 | 24.5 | % | $ | 15.5 | 41.0 | % | $ | 3.6 | (33.3 | )% | $ | 115.4 | 9.6 | % |
Segment Profit (In millions - Unaudited) | ||||||||||||||||||||||||||||||||||
Nine Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||
Wet Shave | Sun and Skin Care | Feminine Care | All Other | Total | ||||||||||||||||||||||||||||||
Segment Profit - Q3 '18 | $ | 177.6 | $ | 76.3 | $ | 25.7 | $ | 16.8 | $ | 296.4 | ||||||||||||||||||||||||
Organic | (7.7 | ) | (4.3 | )% | 1.2 | 1.6 | % | 11.5 | 44.7 | % | (5.6 | ) | (33.3 | )% | (0.6 | ) | (0.2 | )% | ||||||||||||||||
Impact of disposition | — | — | % | (0.3 | ) | (0.4 | )% | — | — | % | — | — | % | (0.3 | ) | — | % | |||||||||||||||||
Impact of acquisition | — | — | % | 5.3 | 6.9 | % | — | — | % | — | — | % | 5.3 | 1.8 | % | |||||||||||||||||||
Impact of currency | (5.1 | ) | (2.9 | )% | (0.4 | ) | (0.5 | )% | (0.5 | ) | (1.9 | )% | (0.4 | ) | (2.4 | )% | (6.4 | ) | (2.2 | )% | ||||||||||||||
Segment Profit - Q3 '19 | $ | 164.8 | (7.2 | )% | $ | 82.1 | 7.6 | % | $ | 36.7 | 42.8 | % | $ | 10.8 | (35.7 | )% | $ | 294.4 | (0.6 | )% |
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (loss) earnings | $ | (441.4 | ) | $ | 12.1 | $ | (393.6 | ) | $ | 83.9 | |||||
Income tax (benefit) provision | (40.3 | ) | 9.3 | (16.8 | ) | 56.4 | |||||||||
Interest expense, net | 15.5 | 16.5 | 47.8 | 52.6 | |||||||||||
Depreciation and amortization | 22.8 | 24.2 | 69.2 | 73.4 | |||||||||||
EBITDA | $ | (443.4 | ) | $ | 62.1 | $ | (293.4 | ) | $ | 266.3 | |||||
Impairment charges | $ | 549.0 | $ | 24.4 | $ | 549.0 | $ | 24.4 | |||||||
Restructuring and related costs(1) | 8.4 | 15.9 | 41.8 | 19.6 | |||||||||||
Harry's acquisition and integration costs | 1.8 | — | 1.8 | — | |||||||||||
Feminine and Infant Care evaluation costs | 0.5 | — | 1.5 | — | |||||||||||
Sun Care reformulation costs | 1.0 | — | 1.5 | — | |||||||||||
Jack Black acquisition and integration costs | 0.1 | 2.3 | 1.1 | 4.9 | |||||||||||
Investor settlement expense | — | — | 0.9 | — | |||||||||||
Sale of Playtex gloves | — | 0.6 | — | (15.3 | ) | ||||||||||
Adjusted EBITDA | $ | 117.4 | $ | 105.3 | $ | 304.2 | $ | 299.9 |
(1) | Excludes $0.5 and $1.0 of accelerated depreciation for the three and nine months ended June 30, 2019, respectively, which are included within Depreciation and amortization. |
Adjusted EPS Outlook | ||
Fiscal 2019 GAAP EPS | $(6.87) - $(6.77) | |
Impairment charges | approx. | $10.14 |
Restructuring and related costs | approx. | $1.22 |
Harry's acquisition and integration planning costs | approx. | $0.07 |
Feminine and Infant Care evaluation costs | approx. | $0.02 |
Sun Care reformulation costs | approx. | $0.09 |
Jack Black acquisition and integration costs | approx. | $0.03 |
Investor settlement expense | approx. | $0.02 |
Impact of tax reform | approx. | $0.09 |
Impact of dilutive shares | approx. | $(0.01) |
Income taxes(1) | approx. | $(1.40) |
Fiscal 2019 Adjusted EPS Outlook (Non-GAAP) | $3.40 - $3.50 |
(1) | Income tax effect of the adjustments to Fiscal 2019 GAAP EPS noted above. |
Q3 2019 | Days (1) | Q2 2019 | Days (1) | Q4 2018 | Days (1) | ||||||||||||||
Receivables, as reported | $ | 220.6 | $ | 216.6 | $ | 223.4 | |||||||||||||
Less: Trade allowance in accrued liabilities (2) | (25.5 | ) | (25.1 | ) | (25.8 | ) | |||||||||||||
Receivables, adjusted | 195.1 | 33 | 191.5 | 32 | 197.6 | 32 | |||||||||||||
Inventories, as reported | 364.5 | 113 | 356.7 | 110 | 347.4 | 106 | |||||||||||||
Accounts payable, as reported | 222.7 | 69 | 225.7 | 70 | 229.6 | 70 | |||||||||||||
Average adjusted working capital (3) | $ | 336.9 | $ | 322.5 | $ | 315.4 | |||||||||||||
% of net sales (4) | 15.7 | % | 14.9 | % | 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 June 30, 2019, March 31, 2019 and September 30, 2018, respectively. |
(4) | Average adjusted working capital divided by trailing four-quarter net sales. |
Nine months ended June 30, 2018 | Adjustments for adoption of ASU 2017-07 | Adjusted nine months ended June 30, 2018 | |||||||||
Cost of products sold | $ | 891.9 | $ | 3.0 | $ | 894.9 | |||||
Gross profit | 805.1 | (3.0 | ) | 802.1 | |||||||
Selling, general and administrative expenses | 301.4 | 2.1 | 303.5 | ||||||||
Other expense, net | 6.3 | (5.1 | ) | 1.2 | |||||||
Earnings before income taxes | 140.3 | — | 140.3 | ||||||||
Adjusted operating income | $ | 232.7 | $ | (5.1 | ) | $ | 227.6 |
Document and Entity Information Document |
Aug. 06, 2019 |
---|---|
Document Information [Line Items] | |
Document Type | 8-K |
Document Period End Date | Aug. 06, 2019 |
Entity Registrant Name | EDGEWELL PERSONAL CARE COMPANY |
Entity Incorporation, State or Country Code | MO |
Entity File Number | 1-15401 |
Entity Tax Identification Number | 43-1863181 |
Entity Address, Address Line One | 6 Research Drive |
Entity Address, City or Town | Shelton |
Entity Address, State or Province | CT |
Entity Address, Postal Zip Code | 06484 |
City Area Code | 203 |
Local Phone Number | 944-5500 |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Trading Symbol | EPC |
Security Exchange Name | NYSE |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001096752 |
Amendment Flag | false |
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