Spectrum Brands Holdings Reports Fiscal 2022 Fourth Quarter
- Net Sales Decreased 1.1% with Significant Unfavorable Foreign Currency Impact, Largely in Line with Company's Previous Expectations
-
Fourth Quarter Net Loss from Continuing Operations was
$24.8 Million with a Reduction in Adjusted EBITDA from Continuing Operations to$74.7 million - The Company Expects to Deliver Low Single-Digit Net Sales Growth and Low Double-Digits Adjusted EBITDA Growth for Fiscal 2023 from Continuing Operations, with Adjusted EBITDA Growth in All Business Units
- Additional Pricing Actions Expected to Offset Projected Inflationary Increases and Unfavorable Currency Impact
-
The Company Expects to Return to Free Cash Flow Generation in Fiscal 2023 with over
$200 Million of Inventory Reduction -
The Company Expects to Collect
$4.3 Billion Upon Completion of the Sale of HHI, Anticipated to Close no Later Than the End ofJune 2023
“Our latest financial results for the fourth quarter complete a challenging year for our business where we faced high input cost inflation, supply chain disruptions, and cost headwinds related to currency changes. We were further challenged by retailers' focus on reducing high inventory levels, which led to reduced replenishment orders. Reported net sales declined 1.1% or 7.3% organically, excluding the impact of fx and acquisition. The results were also impacted by a stronger
Continuing,
Fiscal 2022 Fourth Quarter Highlights
|
|
Three Month Periods Ended |
|
|
|
||||||||||
|
(in millions, except per share and %) |
|
|
|
|
|
Variance |
||||||||
|
Net sales |
|
$ |
749.5 |
|
|
$ |
757.8 |
|
|
$ |
(8.3 |
) |
(1.1 |
)% |
|
Gross profit |
|
|
239.5 |
|
|
|
258.2 |
|
|
|
(18.7 |
) |
(7.2 |
)% |
|
Operating income (loss) |
|
|
16.4 |
|
|
|
(4.0 |
) |
|
|
20.4 |
|
n/m |
|
|
Net (loss) income from continuing operations |
|
|
(24.8 |
) |
|
|
6.1 |
|
|
|
(30.9 |
) |
n/m |
|
|
Diluted earnings per share from continuing operations |
|
$ |
(0.61 |
) |
|
$ |
0.14 |
|
|
$ |
(0.75 |
) |
n/m |
|
|
Non-GAAP Operating Metrics |
|
|
|
|
|
|
|
|||||||
|
Adjusted EBITDA from continuing operations |
|
$ |
74.7 |
|
|
$ |
79.1 |
|
|
$ |
(4.4 |
) |
(5.6 |
)% |
|
Adjusted EPS from continuing operations |
|
$ |
0.48 |
|
|
$ |
0.38 |
|
|
$ |
0.10 |
|
26.3 |
% |
|
n/m = not meaningful |
|
|
|
|
|
|
|
|||||||
-
Net sales decreased 1.1%. Excluding the impact of
$41.1 million of unfavorable foreign exchange rates and acquisition sales of$88.1 million , organic net sales decreased 7.3%. Net sales were significantly impacted by lower replenishment orders due to higher retail inventory, softer demand, negative foreign currency impact in international markets, and unfavorable weather conditions.
- The gross profit and margin decrease of 210 basis points were attributable to sales volume decline, increased costs due to unfavorable foreign currency impact and continued higher short-term supply chain related costs, while price is offsetting commodity and freight inflation.
- Operating income increased due to the impact of cost reduction initiatives, lower project spend on integration and lower variable incentive and stock compensation compared to the prior year.
- Net income and diluted earnings per share decreased due to higher interest cost, foreign currency losses and higher income tax expense.
-
Adjusted EBITDA decreased
$4.4 million , primarily driven by reduced sales volumes and unfavorable currency impact.
- Adjusted diluted EPS increased 26.3% due to increased operating income and a lower number of outstanding shares.
Fiscal 2022 Fourth Quarter Segment Level Data
Home & Personal Care (HPC)
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Three Month Periods Ended |
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|
||||||||||
|
(in millions, except %) |
|
|
|
|
|
Variance |
|||||||||
|
|
|
$ |
344.9 |
|
|
$ |
309.3 |
|
|
$ |
35.6 |
|
11.5 |
% |
|
|
Operating Income |
|
|
15.3 |
|
|
|
0.6 |
|
|
|
14.7 |
|
n/m |
|
|
|
Operating Income Margin |
|
|
4.4 |
% |
|
|
0.2 |
% |
|
|
420 |
bps |
|
||
|
Adjusted EBITDA |
|
$ |
28.0 |
|
|
$ |
14.5 |
|
|
$ |
13.5 |
|
93.1 |
% |
|
|
Adjusted EBITDA Margin |
|
|
8.1 |
% |
|
|
4.7 |
% |
|
|
340 |
bps |
|
||
|
n/m = not meaningful |
|
|
|
|
|
|
|
|
|||||||
The increase in net sales was driven by Tristar business acquisition sales of
Operating income, adjusted EBITDA and margins increased with improved pricing that now largely offsets current inflationary costs, better product mix partially from the acquisition of the Tristar business, and cost reduction initiatives to lower overall operating spend that were initiated earlier in the year, with significant unfavorable foreign currency impact mitigating margin realization.
Global Pet Care (GPC)
|
|
Three Month Periods Ended |
|
|
|
|
|||||||||||
|
(in millions, except %) |
|
|
|
|
|
Variance |
||||||||||
|
|
|
$ |
287.8 |
|
|
$ |
303.6 |
|
|
$ |
(15.8 |
) |
|
(5.2 |
)% |
|
|
Operating Income |
|
|
26.2 |
|
|
|
28.1 |
|
|
|
(1.9 |
) |
|
(6.8 |
)% |
|
|
Operating Income Margin |
|
|
9.1 |
% |
|
|
9.3 |
% |
|
|
(20 |
) |
bps |
|
||
|
Adjusted EBITDA |
|
$ |
48.4 |
|
|
$ |
53.6 |
|
|
$ |
(5.2 |
) |
|
(9.7 |
)% |
|
|
Adjusted EBITDA Margin |
|
|
16.8 |
% |
|
|
17.7 |
% |
|
|
(90 |
) |
bps |
|
||
Lower net sales were attributable to negative foreign currency trends in EMEA, high inventory levels at retail and pet specialty channels and slower aquatic equipment POS which was offset by price increases to address higher costs. Excluding unfavorable foreign exchange impacts of
The decrease in operating income, adjusted EBITDA and margins was driven by lower sales volume and significant unfavorable foreign currency impact, predominantly in EMEA. Pricing now largely offsets freight and other input cost inflation in the quarter. The reduction in operating and adjusted EBITDA margins was partially mitigated by operating cost reductions including the benefit of fixed cost reduction initiatives during the third quarter.
Home & Garden (H&G)
|
|
Three Month Periods Ended |
|
|
|
|
|||||||||||
|
(in millions, except %) |
|
|
|
|
|
Variance |
||||||||||
|
|
|
$ |
116.8 |
|
|
$ |
144.9 |
|
|
$ |
(28.1 |
) |
|
(19.4 |
)% |
|
|
Operating Income |
|
|
6.4 |
|
|
|
12.5 |
|
|
|
(6.1 |
) |
|
(48.8 |
)% |
|
|
Operating Income Margin |
|
|
5.5 |
% |
|
|
8.6 |
% |
|
|
(310 |
) |
bps |
|
||
|
Adjusted EBITDA |
|
$ |
13.1 |
|
|
$ |
25.4 |
|
|
$ |
(12.3 |
) |
|
(48.4 |
)% |
|
|
Adjusted EBITDA Margin |
|
|
11.2 |
% |
|
|
17.5 |
% |
|
|
(630 |
) |
bps |
|
||
The net sales decrease was primarily driven by slow category POS leading to higher retailer inventory and reduced replenishment orders. Excessive heat and drought conditions during the quarter reduced the demand for repellent products. Retailers also experienced lower foot traffic in home centers, which adversely impacted sales across all categories. Pricing adjustments to address inflationary input costs are mitigating the impact of lower volume on net sales.
Lower operating income, adjusted EBITDA and margins were driven by lower volumes and related fixed cost absorption losses partially offset by the impact of cost-saving actions initiated during the previous quarter.
Liquidity and Debt
As of the end of the fiscal year, the Company had a cash balance of
Proforma net leverage at the end of the fourth quarter was 5.4 times, consistent with the previous quarter. The Company entered into an amendment to the credit agreement to temporarily increase the maximum consolidated leverage ratio permitted from 6.0 to 1.0 to be no greater than 7.0 to 1.0 until the earliest of (i)
Fiscal 2023 Earnings Framework
From a capital structure perspective, the Company is targeting a long-term net leverage ratio of 2.0 - 2.5 times after full deployment of HHI sale proceeds.
Conference Call/Webcast Scheduled for
Following the call, a replay of the live broadcast also will be accessible through the Event Calendar page in the Investor Relations section of the Company’s website.
About
Non-GAAP Measurements
Management believes that certain non-GAAP financial measures may be useful in providing additional meaningful comparisons between current results and results in prior periods. Management believes that organic net sales provide for a more complete understanding of underlying business trends of regional and segment performance by excluding the impact of currency exchange rate fluctuations and the impact of acquisitions. In addition, within this release, including the supplemental information attached hereto, reference is made to adjusted diluted EPS, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), and adjusted EBITDA margin. Adjusted EBITDA is a metric used by management to evaluate segment performance and frequently used by the financial community which provides insight into an organization’s operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA also is one of the measures used for determining compliance with the Company’s debt covenants. Adjusted EBITDA excludes certain items that are unusual in nature or not comparable from period to period. Adjusted EBITDA margin reflects adjusted EBITDA as a percentage of net sales of the Company. The Company’s management uses adjusted diluted EPS as one means of analyzing the Company’s current and future financial performance and identifying trends in its financial condition and results of operations. Management believes that adjusted diluted EPS is a useful measure for providing further insight into our operating performance because it eliminates the effects of certain items that are not comparable from one period to the next. An income tax adjustment is included in adjusted diluted EPS to exclude the impact of the valuation allowance against deferred taxes and other tax-related items in order to reflect a normalized ongoing effective tax rate. The Company provides this information to investors to assist in comparisons of past, present and future operating results and to assist in highlighting the results of on-going operations. While the Company’s management believes that non-GAAP measurements are useful supplemental information, such adjusted results are not intended to replace the Company’s GAAP financial results and should be read in conjunction with those GAAP results. Other Supplemental Information has been provided to demonstrate reconciliation of non-GAAP measurements discussed above to most relevant GAAP financial measurements.
Forward-Looking Statements
We have made, implied or incorporated by reference certain forward-looking statements in this document. All statements, other than statements of historical facts included or incorporated by reference in this document, without limitation, statements or expectations regarding our business strategy, future operations, financial condition, estimated revenues, projected costs, earnings power, projected synergies, prospects, plans and objectives of management, information concerning expected actions of third parties are forward-looking statements. When used in this document, the words future, anticipate, pro forma, seeks, intend, plan, envision, estimate, believe, belief, expect, project, forecast, outlook, earnings framework, goal, target, could, would, will, can, should, may and similar expressions are also intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Since these forward-looking statements are based upon our current expectations of future events and projections and are subject to a number of risks and uncertainties, many of which are beyond our control and some of which may change rapidly, actual results or outcomes may differ materially from those expressed or implied herein, and you should not place undue reliance on these statements. Important factors that could cause our actual results to differ materially from those expressed or implied herein include, without limitation: (1) the COVID-19 pandemic, economic, social and political conditions or civil unrest, terrorist attacks, acts of war, natural disasters, other public health concerns or unrest in international markets impacting our business, customers, employees (including our ability to retain and attract key personnel), manufacturing facilities, suppliers, capital markets, and our financial condition, and results of operations, all of which tend to aggravate the other risks and uncertainties we face; (2) the impact of a number of local, regional and global uncertainties could negatively impact our business; (3) the negative effect of the armed conflict between
Some of the above-mentioned factors are described in further detail in the sections entitled “Risk Factors” in our annual and quarterly reports, as applicable. You should assume the information appearing in this document is accurate only as of the date hereof. Except as required by applicable law, including the securities laws of
|
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
||||||||||||||||
|
|
Three Month Periods Ended |
|
Twelve Month Periods Ended |
|||||||||||||
|
(in millions, except per share amounts) |
|
|
|
|
|
|
|
|
||||||||
|
Net sales |
|
$ |
749.5 |
|
|
$ |
757.8 |
|
|
$ |
3,132.5 |
|
|
$ |
2,998.1 |
|
|
Cost of goods sold |
|
|
510.0 |
|
|
|
499.6 |
|
|
|
2,142.1 |
|
|
|
1,963.5 |
|
|
Gross profit |
|
|
239.5 |
|
|
|
258.2 |
|
|
|
990.4 |
|
|
|
1,034.6 |
|
|
Selling |
|
|
139.7 |
|
|
|
145.9 |
|
|
|
597.6 |
|
|
|
518.5 |
|
|
General and administrative |
|
|
82.2 |
|
|
|
108.7 |
|
|
|
371.4 |
|
|
|
389.2 |
|
|
Research and development |
|
|
4.7 |
|
|
|
7.6 |
|
|
|
26.7 |
|
|
|
29.8 |
|
|
Gain from remeasurement of contingent consideration liability |
|
|
(3.5 |
) |
|
|
— |
|
|
|
(28.5 |
) |
|
|
— |
|
|
Total operating expenses |
|
|
223.1 |
|
|
|
262.2 |
|
|
|
967.2 |
|
|
|
937.5 |
|
|
Operating income (loss) |
|
|
16.4 |
|
|
|
(4.0 |
) |
|
|
23.2 |
|
|
|
97.1 |
|
|
Interest expense |
|
|
27.0 |
|
|
|
20.1 |
|
|
|
99.4 |
|
|
|
116.5 |
|
|
Other non-operating expense (income), net |
|
|
6.7 |
|
|
|
1.4 |
|
|
|
14.1 |
|
|
|
(8.3 |
) |
|
Loss from continuing operations before income taxes |
|
|
(17.3 |
) |
|
|
(25.5 |
) |
|
|
(90.3 |
) |
|
|
(11.1 |
) |
|
Income tax expense (benefit) |
|
|
7.5 |
|
|
|
(31.6 |
) |
|
|
(13.3 |
) |
|
|
(26.4 |
) |
|
Net (loss) income from continuing operations |
|
|
(24.8 |
) |
|
|
6.1 |
|
|
|
(77.0 |
) |
|
|
15.3 |
|
|
Income from discontinued operations, net of tax |
|
|
39.9 |
|
|
|
44.2 |
|
|
|
149.7 |
|
|
|
174.3 |
|
|
Net income |
|
|
15.1 |
|
|
|
50.3 |
|
|
|
72.7 |
|
|
|
189.6 |
|
|
Net income from continuing operations attributable to non-controlling interest |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
Net income (loss) from discontinued operations attributable to non-controlling interest |
|
|
0.2 |
|
|
|
— |
|
|
|
0.9 |
|
|
|
(0.2 |
) |
|
Net income attributable to controlling interest |
|
$ |
14.8 |
|
|
$ |
50.2 |
|
|
$ |
71.6 |
|
|
$ |
189.6 |
|
|
Amounts attributable to controlling interest |
|
|
|
|
|
|
|
|
||||||||
|
Net (loss) income from continuing operations attributable to controlling interest |
|
$ |
(24.9 |
) |
|
$ |
6.0 |
|
|
$ |
(77.2 |
) |
|
$ |
15.1 |
|
|
Net income from discontinued operations attributable to controlling interest |
|
|
39.7 |
|
|
|
44.2 |
|
|
|
148.8 |
|
|
|
174.5 |
|
|
Net income attributable to controlling interest |
|
$ |
14.8 |
|
|
$ |
50.2 |
|
|
$ |
71.6 |
|
|
$ |
189.6 |
|
|
Earnings Per Share |
|
|
|
|
|
|
|
|
||||||||
|
Basic earnings per share from continuing operations |
|
$ |
(0.61 |
) |
|
$ |
0.14 |
|
|
$ |
(1.89 |
) |
|
$ |
0.35 |
|
|
Basic earnings per share from discontinued operations |
|
|
0.97 |
|
|
|
1.04 |
|
|
|
3.64 |
|
|
|
4.09 |
|
|
Basic earnings per share |
|
$ |
0.36 |
|
|
$ |
1.18 |
|
|
$ |
1.75 |
|
|
$ |
4.44 |
|
|
Diluted earnings per share from continuing operations |
|
$ |
(0.61 |
) |
|
$ |
0.14 |
|
|
$ |
(1.89 |
) |
|
$ |
0.35 |
|
|
Diluted earnings per share from discontinued operations |
|
|
0.97 |
|
|
|
1.02 |
|
|
|
3.64 |
|
|
|
4.04 |
|
|
Diluted earnings per share |
|
$ |
0.36 |
|
|
$ |
1.16 |
|
|
$ |
1.75 |
|
|
$ |
4.39 |
|
|
Weighted Average Shares Outstanding |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
|
40.8 |
|
|
|
42.4 |
|
|
|
40.9 |
|
|
|
42.7 |
|
|
Diluted |
|
|
40.8 |
|
|
|
43.1 |
|
|
|
40.9 |
|
|
|
43.2 |
|
|
CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) |
||||||||
|
|
Twelve Month Periods Ended |
|||||||
|
(in millions) |
|
|
|
|
||||
|
Cash flows from operating activities |
|
|
|
|
||||
|
Net cash (used) provided by operating activities from continuing operations |
|
$ |
(231.5 |
) |
|
$ |
89.2 |
|
|
Net cash provided by operating activities from discontinued operations |
|
|
177.7 |
|
|
|
199.2 |
|
|
Net cash (used) provided by operating activities |
|
|
(53.8 |
) |
|
|
288.4 |
|
|
Cash flows from investing activities |
|
|
|
|
||||
|
Purchases of property, plant and equipment |
|
|
(64.0 |
) |
|
|
(43.6 |
) |
|
Proceeds from disposal of property, plant and equipment |
|
|
0.2 |
|
|
|
0.1 |
|
|
Business acquisitions, net of cash acquired |
|
|
(272.1 |
) |
|
|
(429.9 |
) |
|
Proceeds from sale of equity investment |
|
|
— |
|
|
|
73.1 |
|
|
Other investing activity |
|
|
— |
|
|
|
(0.4 |
) |
|
Net cash used by investing activities from continuing operations |
|
|
(335.9 |
) |
|
|
(400.7 |
) |
|
Net cash used by investing activities from discontinued operations |
|
|
(23.9 |
) |
|
|
(22.8 |
) |
|
Net cash used by investing activities |
|
|
(359.8 |
) |
|
|
(423.5 |
) |
|
Cash flows from financing activities |
|
|
|
|
||||
|
Payment of debt, including premium on extinguishment |
|
|
(12.7 |
) |
|
|
(891.2 |
) |
|
Proceeds from issuance of debt |
|
|
740.0 |
|
|
|
899.0 |
|
|
Payment of debt issuance costs |
|
|
(7.6 |
) |
|
|
(12.6 |
) |
|
|
|
|
(134.0 |
) |
|
|
(125.8 |
) |
|
Dividends paid to shareholders |
|
|
(68.6 |
) |
|
|
(71.5 |
) |
|
Share based award tax withholding payments, net of proceeds upon vesting |
|
|
(24.5 |
) |
|
|
(8.3 |
) |
|
Payment of contingent consideration |
|
|
(1.9 |
) |
|
|
— |
|
|
Other financing activities, net |
|
|
— |
|
|
|
3.5 |
|
|
Net cash provided (used) by financing activities from continuing operations |
|
|
490.7 |
|
|
|
(206.9 |
) |
|
Net cash used by financing activities from discontinued operations |
|
|
(3.1 |
) |
|
|
(3.0 |
) |
|
Net cash provided (used) by financing activities |
|
|
487.6 |
|
|
|
(209.9 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(20.1 |
) |
|
|
1.3 |
|
|
Net change in cash, cash equivalents and restricted cash |
|
|
53.9 |
|
|
|
(343.7 |
) |
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
190.0 |
|
|
|
533.7 |
|
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
243.9 |
|
|
$ |
190.0 |
|
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) |
||||||
|
(in millions) |
|
|
|
|
||
|
Assets |
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
243.7 |
|
$ |
187.9 |
|
Trade receivables, net |
|
|
247.4 |
|
|
248.4 |
|
Other receivables |
|
|
95.7 |
|
|
63.7 |
|
Inventories |
|
|
780.6 |
|
|
562.8 |
|
Prepaid expenses and other current assets |
|
|
51.2 |
|
|
40.8 |
|
Current assets of business held for sale |
|
|
1,816.7 |
|
|
1,810.0 |
|
Total current assets |
|
|
3,235.3 |
|
|
2,913.6 |
|
Property, plant and equipment, net |
|
|
263.8 |
|
|
260.2 |
|
Operating lease assets |
|
|
82.5 |
|
|
56.5 |
|
Deferred charges and other |
|
|
38.7 |
|
|
38.8 |
|
|
|
|
953.1 |
|
|
867.2 |
|
Intangible assets, net |
|
|
1,202.2 |
|
|
1,204.1 |
|
Total assets |
|
$ |
5,775.6 |
|
$ |
5,340.4 |
|
Liabilities and Shareholders' Equity |
|
|
|
|
||
|
Current portion of long-term debt |
|
$ |
12.3 |
|
$ |
12.0 |
|
Accounts payable |
|
|
453.1 |
|
|
388.6 |
|
Accrued wages and salaries |
|
|
28.4 |
|
|
67.4 |
|
Accrued interest |
|
|
27.6 |
|
|
29.9 |
|
Other current liabilities |
|
|
203.0 |
|
|
211.9 |
|
Current liabilities of business held for sale |
|
$ |
463.7 |
|
|
454.3 |
|
Total current liabilities |
|
|
1,188.1 |
|
|
1,164.1 |
|
Long-term debt, net of current portion |
|
|
3,144.5 |
|
|
2,494.3 |
|
Long-term operating lease liabilities |
|
|
56.0 |
|
|
44.5 |
|
Deferred income taxes |
|
|
60.1 |
|
|
59.5 |
|
Other long-term liabilities |
|
|
57.8 |
|
|
99.0 |
|
Total liabilities |
|
|
4,506.5 |
|
|
3,861.4 |
|
Total shareholders' equity |
|
|
1,263.2 |
|
|
1,471.9 |
|
Noncontrolling interest |
|
|
5.9 |
|
|
7.1 |
|
Total equity |
|
|
1,269.1 |
|
|
1,479.0 |
|
Total liabilities and equity |
|
$ |
5,775.6 |
|
$ |
5,340.4 |
OTHER SUPPLEMENTAL INFORMATION (Unaudited)
NET SALES AND ORGANIC
The following is a summary of net sales by segment for the three and twelve month periods ended
|
|
Three Month Periods Ended |
|
|
|
|
Twelve Month Periods Ended |
|
|
|
|||||||||||||||
|
(in millions, except %) |
|
|
|
|
|
Variance |
|
|
|
|
|
Variance |
||||||||||||
|
HPC |
|
$ |
344.9 |
|
$ |
309.3 |
|
$ |
35.6 |
|
11.5 |
% |
|
$ |
1,370.1 |
|
$ |
1,260.1 |
|
$ |
110.0 |
|
8.7 |
% |
|
GPC |
|
|
287.8 |
|
|
303.6 |
|
|
(15.8 |
) |
(5.2 |
)% |
|
|
1,175.3 |
|
|
1,129.9 |
|
|
45.4 |
|
4.0 |
% |
|
H&G |
|
|
116.8 |
|
|
144.9 |
|
|
(28.1 |
) |
(19.4 |
)% |
|
|
587.1 |
|
|
608.1 |
|
|
(21.0 |
) |
(3.5 |
)% |
|
|
|
$ |
749.5 |
|
$ |
757.8 |
|
|
(8.3 |
) |
(1.1 |
)% |
|
$ |
3,132.5 |
|
$ |
2,998.1 |
|
|
134.4 |
|
4.5 |
% |
We define organic net sales as reported net sales excluding the effect of changes in foreign currency exchange rates and acquisitions. We believe this non-GAAP measure provides useful information to investors because it reflects regional and segment performance from our activities without the effect of changes in currency exchange rate and/or acquisitions. We use organic net sales as one measure to monitor and evaluate our regional and segment performance. Organic growth is calculated by comparing organic net sales to reported net sales in the prior year. The effect of changes in currency exchange rates is determined by translating the period’s net sales using the currency exchange rates that were in effect during the prior period. Net sales are attributed to the geographic regions based on the country of destination. We exclude net sales from acquired businesses in the current year for which there are no comparable sales in the prior period. The following is a reconciliation of reported sales to organic sales for the three and twelve month periods ended
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Three Month Periods Ended (in millions, except %) |
|
|
|
Effect of Changes in Currency |
|
Net Sales Excluding Effect of Changes in Currency |
|
Effect of Acquisitions |
|
Organic |
|
Net Sales |
|
Variance |
|||||||||||
|
HPC |
|
$ |
344.9 |
|
$ |
24.8 |
|
$ |
369.7 |
|
$ |
(88.1 |
) |
|
$ |
281.6 |
|
$ |
309.3 |
|
$ |
(27.7 |
) |
(9.0 |
)% |
|
GPC |
|
|
287.8 |
|
|
16.3 |
|
|
304.1 |
|
|
— |
|
|
|
304.1 |
|
|
303.6 |
|
|
0.5 |
|
0.2 |
% |
|
H&G |
|
|
116.8 |
|
|
— |
|
|
116.8 |
|
|
— |
|
|
|
116.8 |
|
|
144.9 |
|
|
(28.1 |
) |
(19.4 |
)% |
|
Total |
|
$ |
749.5 |
|
$ |
41.1 |
|
$ |
790.6 |
|
$ |
(88.1 |
) |
|
$ |
702.5 |
|
$ |
757.8 |
|
$ |
(55.3 |
) |
(7.3 |
)% |
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Twelve Month Periods Ended (in millions, except %) |
|
|
|
Effect of Changes in Currency |
|
Net Sales Excluding Effect of Changes in Currency |
|
Effect of Acquisitions |
|
Organic |
|
Net Sales |
|
Variance |
|||||||||||
|
HPC |
|
$ |
1,370.1 |
|
$ |
59.0 |
|
$ |
1,429.1 |
|
$ |
(189.7 |
) |
|
$ |
1,239.4 |
|
$ |
1,260.1 |
|
$ |
(20.7 |
) |
(1.6 |
)% |
|
GPC |
|
|
1,175.3 |
|
|
35.9 |
|
|
1,211.2 |
|
|
(8.8 |
) |
|
|
1,202.4 |
|
|
1,129.9 |
|
|
72.5 |
|
6.4 |
% |
|
H&G |
|
|
587.1 |
|
|
— |
|
|
587.1 |
|
|
(26.6 |
) |
|
|
560.5 |
|
|
608.1 |
|
|
(47.6 |
) |
(7.8 |
)% |
|
Total |
|
$ |
3,132.5 |
|
$ |
94.9 |
|
$ |
3,227.4 |
|
$ |
(225.1 |
) |
|
$ |
3,002.3 |
|
$ |
2,998.1 |
|
$ |
4.2 |
|
0.1 |
% |
OTHER SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) is a non-GAAP metric used by management that we believe provides useful information to investors because it reflects ongoing operating performance and trends of our segments excluding certain non-cash based expenses and/or non-recurring items during each of the comparable periods and facilitates comparisons between peer companies since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Further, adjusted EBITDA is a measure used for determining the Company’s debt covenant. EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA further excludes the following:
-
Share based compensation costs consist of costs associated with long-term incentive compensation arrangements that generally consist of non-cash, share-based compensation. During the twelve month period ended
September 30, 2021 , compensation costs included incentive bridge awards previously issued due to changes in the Company’s Long-Term Incentive Plan that allowed for cash based payment upon employee election but do not qualify for shared-based compensation, which were fully vested inNovember 2020 ;
- Incremental amounts attributable to strategic transactions and business development initiatives including, but not limited to, the acquisition or divestitures of a business, costs to effect and facilitate a transaction, including such cost to integrate or separate the respective business. These amounts are excluded from our performance metrics as they are reflective of incremental investment by the Company towards business development activities, incremental costs attributable to such transactions and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments;
- Incremental amounts realized towards restructuring and optimization projects including, but not limited to, costs towards the development and implementation of strategies to optimize operations and improve efficiency, reduce costs, increase revenues, increase or maintain our current profit margins, including recognition of one-time exit or disposal costs. These amounts are excluded from our ongoing performance metrics as they are reflective of incremental investment by the Company towards significant initiatives controlled by management, incremental costs directly attributable to such initiatives, indirect impact or disruption to operating performance during implementation, and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments;
- Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions the Company's business units excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations. Amounts attributable to unallocated shared costs would be mitigated through subsequent strategic or restructuring initiatives, transition services agreements, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations following the completed sale of the discontinued operations;
- Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value and the incremental value in operating lease assets with below market rent, among others;
-
Non-cash gain from the remeasurement of the contingent consideration liability recognized during the three and twelve month periods ended
September 30, 2022 associated with the Tristar Business acquisition;
- Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations;
-
Gains attributable to the Company's investment in Energizer common stock during the twelve month period ended
September 30, 2021 with such remaining shares sold inJanuary 2021 ;
-
Incremental reserves for non-recurring litigation or environmental remediation activity including the proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual nonrecurring claims with no previous history or precedent recognized during the three and twelve month periods ended
September 30, 2022 andSeptember 30, 2021 ;
-
Early settlement on certain foreign currency cash flow hedges in our EMEA region prior to their stated maturity due to changes in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods within the region, resulting in the recognition of realized gains during the third quarter ended
July 3, 2022 , plus the pro forma effect of assumed losses following the early settlement date for the subsequent settlement periods through the original stated maturities;
-
Incremental costs recognized by the HPC segment attributable to the realization of product recalls initiated by the Company during the three and twelve month periods ended
September 30, 2022 ; and
-
Other adjustments are primarily attributable to (1) costs associated with Salus as they are not considered a component of the continuing commercial products company and (2) other key executive severance related costs, (3) asset write-off for exit of certain GPC brands within
China during the three and twelve month period endedSeptember 30, 2022 , and (4) write-off of cost based investment previously held by the GPC segment during the three and twelve month period endedSeptember 30, 2022 .
Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of reported net sales for the respective periods.
OTHER SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (continued)
The following is a reconciliation of reported net income (loss) from continuing operations to adjusted EBITDA for the three month period ended
|
Three Month Period Ended (in millions, except %) |
|
HPC |
|
GPC |
|
H&G |
|
Corporate |
|
Consolidated |
||||||||||
|
Net income (loss) from continuing operations |
|
$ |
13.1 |
|
|
$ |
25.9 |
|
|
$ |
6.5 |
|
|
$ |
(70.3 |
) |
|
$ |
(24.8 |
) |
|
Income tax expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7.5 |
|
|
|
7.5 |
|
|
Interest expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27.0 |
|
|
|
27.0 |
|
|
Depreciation |
|
|
3.2 |
|
|
|
3.7 |
|
|
|
1.8 |
|
|
|
3.6 |
|
|
|
12.3 |
|
|
Amortization |
|
|
2.1 |
|
|
|
5.5 |
|
|
|
2.8 |
|
|
|
— |
|
|
|
10.4 |
|
|
EBITDA |
|
|
18.4 |
|
|
|
35.1 |
|
|
|
11.1 |
|
|
|
(32.2 |
) |
|
|
32.4 |
|
|
Share based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.3 |
) |
|
|
(1.3 |
) |
|
Tristar Business integration |
|
|
4.3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4.3 |
|
|
Rejuvenate integration |
|
|
— |
|
|
|
— |
|
|
|
(0.2 |
) |
|
|
— |
|
|
|
(0.2 |
) |
|
Armitage integration |
|
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
|
Omega production integration |
|
|
— |
|
|
|
3.1 |
|
|
|
— |
|
|
|
— |
|
|
|
3.1 |
|
|
HHI divestiture |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
HPC separation initiatives |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.7 |
|
|
|
3.7 |
|
|
Coevorden operations divestiture |
|
|
— |
|
|
|
1.5 |
|
|
|
— |
|
|
|
— |
|
|
|
1.5 |
|
|
Fiscal 2022 restructuring initiatives |
|
|
1.1 |
|
|
|
0.5 |
|
|
|
0.1 |
|
|
|
— |
|
|
|
1.7 |
|
|
Global ERP transformation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.7 |
|
|
|
3.7 |
|
|
GPC distribution center transition |
|
|
— |
|
|
|
7.5 |
|
|
|
— |
|
|
|
— |
|
|
|
7.5 |
|
|
Global productivity improvement program |
|
|
(0.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
|
|
(2.0 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2.2 |
) |
|
HPC brand portfolio transitions |
|
|
0.9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.9 |
|
|
Other project costs |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
1.6 |
|
|
|
1.4 |
|
|
Unallocated shared costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6.8 |
|
|
|
6.8 |
|
|
Non-cash purchase accounting adjustments |
|
|
0.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.5 |
|
|
Gain from remeasurement of contingent consideration liability |
|
|
(3.5 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3.5 |
) |
|
Legal and environmental |
|
|
— |
|
|
|
— |
|
|
|
2.0 |
|
|
|
— |
|
|
|
2.0 |
|
|
Early settlement of foreign currency cash flow hedges |
|
|
3.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.1 |
|
|
HPC product recall |
|
|
5.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5.5 |
|
|
Salus and other adjustments |
|
|
— |
|
|
|
0.9 |
|
|
|
0.1 |
|
|
|
2.6 |
|
|
|
3.6 |
|
|
Adjusted EBITDA |
|
$ |
28.0 |
|
|
$ |
48.4 |
|
|
$ |
13.1 |
|
|
$ |
(14.8 |
) |
|
$ |
74.7 |
|
|
Net sales |
|
$ |
344.9 |
|
|
$ |
287.8 |
|
|
$ |
116.8 |
|
|
$ |
— |
|
|
$ |
749.5 |
|
|
Adjusted EBITDA margin |
|
|
8.1 |
% |
|
|
16.8 |
% |
|
|
11.2 |
% |
|
|
— |
|
|
|
10.0 |
% |
OTHER SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (continued)
The following is a reconciliation of reported net (loss) income from continuing operations to adjusted EBITDA for the three month period ended
|
Three Month Period Ended (in millions, except %) |
|
HPC |
|
GPC |
|
H&G |
|
Corporate |
|
Consolidated |
||||||||||
|
Net (loss) income from continuing operations |
|
$ |
(0.3 |
) |
|
$ |
27.8 |
|
|
$ |
12.5 |
|
|
$ |
(33.9 |
) |
|
$ |
6.1 |
|
|
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(31.6 |
) |
|
|
(31.6 |
) |
|
Interest expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20.1 |
|
|
|
20.1 |
|
|
Depreciation |
|
|
3.3 |
|
|
|
3.9 |
|
|
|
1.9 |
|
|
|
3.6 |
|
|
|
12.7 |
|
|
Amortization |
|
|
8.3 |
|
|
|
5.7 |
|
|
|
2.9 |
|
|
|
— |
|
|
|
16.9 |
|
|
EBITDA |
|
|
11.3 |
|
|
|
37.4 |
|
|
|
17.3 |
|
|
|
(41.8 |
) |
|
|
24.2 |
|
|
Share and incentive based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7.5 |
|
|
|
7.5 |
|
|
Tristar Business acquisition |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
Rejuvenate integration |
|
|
— |
|
|
|
— |
|
|
|
5.0 |
|
|
|
— |
|
|
|
5.0 |
|
|
Armitage integration |
|
|
— |
|
|
|
3.1 |
|
|
|
— |
|
|
|
— |
|
|
|
3.1 |
|
|
Omega production integration |
|
|
— |
|
|
|
1.3 |
|
|
|
— |
|
|
|
— |
|
|
|
1.3 |
|
|
HHI divestiture |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9.6 |
|
|
|
9.6 |
|
|
Coevorden operations separation |
|
|
— |
|
|
|
3.9 |
|
|
|
— |
|
|
|
— |
|
|
|
3.9 |
|
|
Global ERP transformation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.6 |
|
|
|
2.6 |
|
|
GPC distribution center transition |
|
|
— |
|
|
|
7.5 |
|
|
|
— |
|
|
|
— |
|
|
|
7.5 |
|
|
Global productivity improvement program |
|
|
2.8 |
|
|
|
0.6 |
|
|
|
0.5 |
|
|
|
1.7 |
|
|
|
5.6 |
|
|
Other project costs |
|
|
0.4 |
|
|
|
(0.2 |
) |
|
|
— |
|
|
|
(0.8 |
) |
|
|
(0.6 |
) |
|
Unallocated shared costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6.7 |
|
|
|
6.7 |
|
|
Non-cash purchase accounting adjustments |
|
|
— |
|
|
|
— |
|
|
|
2.6 |
|
|
|
— |
|
|
|
2.6 |
|
|
Adjusted EBITDA |
|
$ |
14.5 |
|
|
$ |
53.6 |
|
|
$ |
25.4 |
|
|
$ |
(14.4 |
) |
|
$ |
79.1 |
|
|
Net sales |
|
$ |
309.3 |
|
|
$ |
303.6 |
|
|
$ |
144.9 |
|
|
$ |
— |
|
|
$ |
757.8 |
|
|
Adjusted EBITDA margin |
|
|
4.7 |
% |
|
|
17.7 |
% |
|
|
17.5 |
% |
|
|
— |
% |
|
|
10.4 |
% |
OTHER SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (continued)
The following is a reconciliation of reported net income (loss) from continuing operations to adjusted EBITDA for the twelve month period ended
|
Twelve Month Period Ended (in millions, except for %) |
|
HPC |
|
GPC |
|
H&G |
|
Corporate |
|
Consolidated |
||||||||||
|
Net income (loss) from continuing operations |
|
$ |
25.4 |
|
|
$ |
75.2 |
|
|
$ |
57.2 |
|
|
$ |
(234.8 |
) |
|
$ |
(77.0 |
) |
|
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(13.3 |
) |
|
|
(13.3 |
) |
|
Interest expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
99.4 |
|
|
|
99.4 |
|
|
Depreciation |
|
|
12.4 |
|
|
|
14.8 |
|
|
|
7.2 |
|
|
|
14.6 |
|
|
|
49.0 |
|
|
Amortization |
|
|
16.3 |
|
|
|
22.6 |
|
|
|
11.4 |
|
|
|
— |
|
|
|
50.3 |
|
|
EBITDA |
|
|
54.1 |
|
|
|
112.6 |
|
|
|
75.8 |
|
|
|
(134.1 |
) |
|
|
108.4 |
|
|
Share and incentive based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.2 |
|
|
|
10.2 |
|
|
Tristar Business acquisition and integration |
|
|
24.3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
24.3 |
|
|
Rejuvenate integration |
|
|
— |
|
|
|
— |
|
|
|
6.8 |
|
|
|
— |
|
|
|
6.8 |
|
|
Armitage integration |
|
|
— |
|
|
|
1.4 |
|
|
|
— |
|
|
|
— |
|
|
|
1.4 |
|
|
Omega production integration |
|
|
— |
|
|
|
4.6 |
|
|
|
— |
|
|
|
— |
|
|
|
4.6 |
|
|
HHI divestiture |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6.3 |
|
|
|
6.3 |
|
|
HPC separation initiatives |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19.1 |
|
|
|
19.1 |
|
|
Coevorden operations divestiture |
|
|
— |
|
|
|
8.8 |
|
|
|
— |
|
|
|
— |
|
|
|
8.8 |
|
|
Fiscal 2022 restructuring initiatives |
|
|
4.9 |
|
|
|
3.6 |
|
|
|
0.7 |
|
|
|
0.6 |
|
|
|
9.8 |
|
|
Global ERP transformation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13.1 |
|
|
|
13.1 |
|
|
GPC distribution center transition |
|
|
— |
|
|
|
35.8 |
|
|
|
— |
|
|
|
— |
|
|
|
35.8 |
|
|
Global productivity improvement program |
|
|
2.4 |
|
|
|
0.8 |
|
|
|
— |
|
|
|
1.9 |
|
|
|
5.1 |
|
|
|
|
|
1.9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.9 |
|
|
HPC brand portfolio transitions |
|
|
1.3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.3 |
|
|
Other project costs |
|
|
0.5 |
|
|
|
0.1 |
|
|
|
— |
|
|
|
11.5 |
|
|
|
12.1 |
|
|
Unallocated shared costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27.6 |
|
|
|
27.6 |
|
|
Non-cash purchase accounting adjustments |
|
|
8.3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8.3 |
|
|
Gain from remeasurement of contingent consideration liability |
|
|
(28.5 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(28.5 |
) |
|
Legal and environmental |
|
|
— |
|
|
|
— |
|
|
|
1.5 |
|
|
|
— |
|
|
|
1.5 |
|
|
Early settlement of foreign currency cash flow hedges |
|
|
(5.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5.1 |
) |
|
HPC product recall |
|
|
5.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5.5 |
|
|
Salus and other adjustments |
|
|
— |
|
|
|
0.9 |
|
|
|
1.4 |
|
|
|
2.5 |
|
|
|
4.8 |
|
|
Adjusted EBITDA |
|
$ |
69.6 |
|
|
$ |
168.6 |
|
|
$ |
86.2 |
|
|
$ |
(41.3 |
) |
|
$ |
283.1 |
|
|
|
|
$ |
1,370.1 |
|
|
$ |
1,175.3 |
|
|
$ |
587.1 |
|
|
$ |
— |
|
|
$ |
3,132.5 |
|
|
Adjusted EBITDA Margin |
|
|
5.1 |
% |
|
|
14.3 |
% |
|
|
14.7 |
% |
|
$ |
— |
|
|
|
9.0 |
% |
OTHER SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (continued)
The following is a reconciliation of reported net income (loss) from continuing operations to adjusted EBITDA for the twelve month period ended
|
Twelve Month Period Ended (in millions, except for %) |
|
HPC |
|
GPC |
|
H&G |
|
Corporate |
|
Consolidated |
||||||||||
|
Net income (loss) from continuing operations |
|
$ |
46.1 |
|
|
$ |
127.7 |
|
|
$ |
83.7 |
|
|
$ |
(242.2 |
) |
|
$ |
15.3 |
|
|
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(26.4 |
) |
|
|
(26.4 |
) |
|
Interest expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
116.5 |
|
|
|
116.5 |
|
|
Depreciation |
|
|
13.8 |
|
|
|
15.4 |
|
|
|
8.1 |
|
|
|
14.6 |
|
|
|
51.9 |
|
|
Amortization |
|
|
30.2 |
|
|
|
23.8 |
|
|
|
11.1 |
|
|
|
— |
|
|
|
65.1 |
|
|
EBITDA |
|
|
90.1 |
|
|
|
166.9 |
|
|
|
102.9 |
|
|
|
(137.5 |
) |
|
|
222.4 |
|
|
Share and incentive based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
29.4 |
|
|
|
29.4 |
|
|
Tristar Business acquisition |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
Rejuvenate acquisition and integration |
|
|
— |
|
|
|
— |
|
|
|
10.8 |
|
|
|
— |
|
|
|
10.8 |
|
|
Armitage acquisition and integration |
|
|
— |
|
|
|
10.9 |
|
|
|
— |
|
|
|
— |
|
|
|
10.9 |
|
|
Omega production integration |
|
|
— |
|
|
|
1.3 |
|
|
|
— |
|
|
|
— |
|
|
|
1.3 |
|
|
HHI divestiture |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9.6 |
|
|
|
9.6 |
|
|
HPC separation initiatives |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14.2 |
|
|
|
14.2 |
|
|
Coevorden operations divestiture |
|
|
— |
|
|
|
11.6 |
|
|
|
— |
|
|
|
— |
|
|
|
11.6 |
|
|
Global ERP transformation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4.3 |
|
|
|
4.3 |
|
|
GPC distribution center transition |
|
|
— |
|
|
|
15.2 |
|
|
|
— |
|
|
|
— |
|
|
|
15.2 |
|
|
Global productivity improvement program |
|
|
8.0 |
|
|
|
2.4 |
|
|
|
0.4 |
|
|
|
10.4 |
|
|
|
21.2 |
|
|
Other project costs |
|
|
4.5 |
|
|
|
0.4 |
|
|
|
— |
|
|
|
2.5 |
|
|
|
7.4 |
|
|
Unallocated shared costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26.9 |
|
|
|
26.9 |
|
|
Non-cash purchase accounting adjustments |
|
|
— |
|
|
|
3.4 |
|
|
|
3.9 |
|
|
|
— |
|
|
|
7.3 |
|
|
Gain on Energizer investment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6.9 |
) |
|
|
(6.9 |
) |
|
Legal and environmental |
|
|
— |
|
|
|
— |
|
|
|
6.0 |
|
|
|
— |
|
|
|
6.0 |
|
|
Salus and other adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
Adjusted EBITDA |
|
$ |
102.6 |
|
|
$ |
212.1 |
|
|
$ |
124.0 |
|
|
$ |
(46.9 |
) |
|
$ |
391.8 |
|
|
|
|
$ |
1,260.1 |
|
|
$ |
1,129.9 |
|
|
$ |
608.1 |
|
|
$ |
— |
|
|
$ |
2,998.1 |
|
|
Adjusted EBITDA Margin |
|
|
8.1 |
% |
|
|
18.8 |
% |
|
|
20.4 |
% |
|
|
— |
|
|
|
13.1 |
% |
OTHER SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED DILUTED EPS
We define adjusted diluted EPS as reported diluted EPS excluding the effect of one-time, non-recurring activity and volatility associated with our income tax expense. The Company believes that adjusted diluted EPS provides further insight and comparability in operating performance as it eliminates the effects of certain items that are not comparable from one period to the next. Adjustments to diluted EPS include the following:
- Incremental amounts attributable to strategic transactions and business development initiatives including, but not limited to, the acquisition or divestitures of a business, costs to effect and facilitate a transaction, including such cost to integrate or separate the respective business. These amounts are excluded from our performance metrics as they are reflective of incremental investment by the Company towards business development activities, incremental costs attributable to such transactions and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments;
- Incremental amounts realized towards restructuring and optimization projects including, but not limited to, costs towards the development and implementation of strategies to optimize operations and improve efficiency, reduce costs, increase revenues, increase or maintain our current profit margins, including recognition of one-time exit or disposal costs. These amounts are excluded from our ongoing performance metrics as they are reflective of incremental investment by the Company towards significant initiatives controlled by management, incremental costs directly attributable to such initiatives, indirect impact or disruption to operating performance during implementation, and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments;
- Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions the Company's business units excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations. Amounts attributable to unallocated shared costs would be mitigated through subsequent strategic or restructuring initiatives, transition services agreements, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations following the completed sale of the discontinued operations;
- Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value and the incremental value in operating lease assets with below market rent, among others;
-
Non-cash gain from the remeasurement of the contingent consideration liability recognized during the three and twelve month periods ended
September 30, 2022 associated with the Tristar Business acquisition;
- Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations;
-
Gains attributable to the Company's investment in Energizer common stock during the twelve month period ended
September 30, 2021 with such remaining shares sold inJanuary 2021 ;
-
Incremental reserves for non-recurring litigation or environmental remediation activity including the proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual nonrecurring claims with no previous history or precedent recognized during the three and twelve month periods ended
September 30, 2022 andSeptember 30, 2021 ;
-
Early settlement on certain foreign currency cash flow hedges in our EMEA region prior to their stated maturity due to changes in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region, resulting in the recognition of realized gains during the third quarter ended
July 3, 2022 , plus the pro forma effect of assumed losses following the early settlement date for the subsequent settlement periods through the original stated maturities;
-
Incremental costs recognized by the HPC segment attributable to the realization of product recalls initiated by the Company during the three and twelve month periods ended
September 30, 2022 ;
-
Incremental interest costs recognized for the extinguishment of the 6.625% Notes, including the cash payment for premium from early extinguishment and non-cash write-off of debt issuance costs during the twelve month period ended
September 30, 2021 ;
-
Other adjustments are primarily attributable to (1) costs associated with Salus as they are not considered a component of the continuing commercial products company and (2) other key executive severance related costs, (3) asset write-off for exit of certain GPC brands within
China during the three and twelve month period endedSeptember 30, 2022 , and (4) write-off of cost based investment previously held by the GPC segment during the three and twelve month period endedSeptember 30, 2022 ; and
-
Income tax adjustment to diluted EPS is to exclude the impact of adjusting the valuation allowance against deferred taxes and other tax related items in order to reflect a normalized ongoing effective tax rate of 25.0% for the three and twelve month periods ended
September 30, 2022 andSeptember 30, 2021 based upon enacted corporate tax rate inthe United States .
OTHER SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED DILUTED EPS
The following is a reconciliation of reported diluted EPS from continuing operations to adjusted diluted EPS for the three and twelve month periods ended
|
|
Three Month Period Ended |
|
Twelve Month Period Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted EPS from continuing operations, as reported |
$ |
(0.61 |
) |
|
$ |
0.14 |
|
|
$ |
(1.89 |
) |
|
$ |
0.35 |
|
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
|
Tristar Business acquisition and integration |
|
0.11 |
|
|
|
— |
|
|
|
0.59 |
|
|
|
— |
|
|
Rejuvenate acquisition and integration |
|
— |
|
|
|
0.12 |
|
|
|
0.17 |
|
|
|
0.25 |
|
|
Armitage acquisition and integration |
|
— |
|
|
|
0.07 |
|
|
|
0.04 |
|
|
|
0.25 |
|
|
Omega production integration |
|
0.08 |
|
|
|
0.03 |
|
|
|
0.11 |
|
|
|
0.03 |
|
|
HHI divestiture |
|
0.01 |
|
|
|
0.22 |
|
|
|
0.15 |
|
|
|
0.22 |
|
|
HPC separation initiatives |
|
0.09 |
|
|
|
— |
|
|
|
0.47 |
|
|
|
0.33 |
|
|
Coevorden operations divestiture |
|
0.04 |
|
|
|
0.09 |
|
|
|
0.21 |
|
|
|
0.41 |
|
|
Fiscal 2022 restructuring initiatives |
|
0.04 |
|
|
|
— |
|
|
|
0.24 |
|
|
|
— |
|
|
Global ERP transformation |
|
0.09 |
|
|
|
0.06 |
|
|
|
0.32 |
|
|
|
0.10 |
|
|
GPC distribution center transition |
|
0.19 |
|
|
|
0.17 |
|
|
|
0.88 |
|
|
|
0.35 |
|
|
Global productivity improvement program |
|
— |
|
|
|
0.13 |
|
|
|
0.13 |
|
|
|
0.49 |
|
|
|
|
(0.05 |
) |
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
|
HPC brand portfolio transitions |
|
0.02 |
|
|
|
— |
|
|
|
0.03 |
|
|
|
— |
|
|
Other project costs |
|
0.03 |
|
|
|
(0.01 |
) |
|
|
0.30 |
|
|
|
0.17 |
|
|
Unallocated shared costs |
|
0.17 |
|
|
|
0.16 |
|
|
|
0.67 |
|
|
|
0.62 |
|
|
Non-cash purchase adjustments |
|
0.01 |
|
|
|
0.06 |
|
|
|
0.20 |
|
|
|
0.17 |
|
|
Gain from remeasurement of contingent consideration liability |
|
(0.09 |
) |
|
|
— |
|
|
|
(0.70 |
) |
|
|
— |
|
|
Gain on Energizer investment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.16 |
) |
|
Legal and environmental |
|
0.05 |
|
|
|
— |
|
|
|
0.04 |
|
|
|
0.14 |
|
|
Early settlement on foreign currency cash flow hedges |
|
0.08 |
|
|
|
— |
|
|
|
(0.13 |
) |
|
|
— |
|
|
HPC product recall |
|
0.14 |
|
|
|
— |
|
|
|
0.13 |
|
|
|
— |
|
|
Debt refinancing costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.72 |
|
|
Salus and other |
|
0.08 |
|
|
|
— |
|
|
|
0.12 |
|
|
|
— |
|
|
Total pre-tax adjustments |
|
1.09 |
|
|
|
1.10 |
|
|
|
4.02 |
|
|
|
4.09 |
|
|
Income tax adjustment |
|
— |
|
|
|
(0.86 |
) |
|
|
(0.77 |
) |
|
|
(1.56 |
) |
|
Total adjustments |
|
1.09 |
|
|
|
0.24 |
|
|
|
3.25 |
|
|
|
2.53 |
|
|
Diluted EPS from continuing operations, as adjusted |
$ |
0.48 |
|
|
$ |
0.38 |
|
|
$ |
1.36 |
|
|
$ |
2.88 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20221117006199/en/
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