ST. LOUIS, Aug. 8, 2017 /PRNewswire/ -- Edgewell
Personal Care Company (NYSE: EPC) today announced
results for its third fiscal quarter, which ended June 30, 2017.
Executive Summary
- Net sales were $637.5 million in
the third quarter of fiscal 2017, a decrease of 1.2% when compared
to the prior year period on a reported basis, and down 0.6% on an
organic basis. (Organic basis excludes sales growth from the
Bulldog acquisition and the negative impact from currency.)
- GAAP Diluted Earnings Per Share ("EPS") and Adjusted EPS grew
to $0.95 and $1.11, respectively, for the third quarter,
compared to $0.61 and $0.66, respectively, a year ago.
- The Company is increasing its fiscal 2017 financial outlook for
Adjusted EPS and lowering its outlook for organic net sales.
The Company reports and forecasts results on a GAAP and
"Non-GAAP" basis, and has reconciled Non-GAAP results and outlook
to the most directly comparable GAAP measures later in this
release. See "Non-GAAP Financial Measures" for a more
detailed explanation, including definitions of various Non-GAAP
terms used in this release. All comparisons used in this
release are with the same period in the prior fiscal year unless
otherwise stated.
"We delivered strong profit performance in the third quarter, in
what continues to be a very difficult market environment," said
David Hatfield, Edgewell's Chief
Executive Officer, President and Chairman of the Board.
"Although category weakness in the U.S. persists, and competitive
intensity remains high, we delivered solid results in the quarter,
driven by sales growth in International, market share gains in Wet
Shave and Sun and Skin Care, both globally and in the U.S., and by
good financial discipline." Mr. Hatfield continued, "Based on
our performance in the quarter, we are increasing our full year
outlook for Adjusted EPS, and we remain confident in our ability to
deliver strong free cash flow while continuing to invest in future
growth opportunities."
Fiscal 3Q 2017 Operating Results (Unaudited)
Net sales were $637.5
million in the quarter, a decrease of 1.2% when compared to
the prior year quarter. Excluding a $4.0 million benefit from the Bulldog acquisition
and a $7.9 million negative impact
from currency, organic net sales decreased 0.6%, as growth in Sun
and Skin Care was more than offset by declines in Feminine
Care. Wet Shave was essentially flat versus the prior year on
an organic basis.
Gross margin increased 230 basis points to 50.5%, driven
by lower product costs due to operational efficiencies and lower
commodity costs and favorable product mix, slightly offset by the
impact of currency movements.
Advertising and sales promotion expense ("A&P") was
$114.2 million, or 17.9% of net
sales, a decrease from prior year A&P of $122.5 million, or 19.0% of net sales. The
prior year included higher spending in support of new product
innovation in Feminine Care and higher media and promotional
campaigns for Wet Shave.
Selling, general and administrative expense ("SG&A")
was $97.5 million, or 15.3% of net
sales, as compared to $104.8 million,
or 16.2% of net sales, in the prior year. Excluding prior
year spin costs, SG&A as a percent of net sales decreased 50
basis points over the prior year, primarily related to lower
share-based and other compensation expense, the timing of
investments and project spending, as well as savings related to the
Company's Zero Based Spending program.
The Company recorded pre-tax restructuring expense of
$12.8 million compared to
$5.8 million in the prior year
quarter. The increase is primarily related to a non-cash
charge for the disposition of real estate.
Other income, net was $1.6
million during the quarter as compared to an $8.2 million expense in the prior year, primarily
reflecting a net benefit from foreign currency exchange contract
gains and losses in the quarter, partially offset by revaluation of
nonfunctional currency balance sheet exposures, as well as
$3.2 million of interest expense
related to settlements with tax authorities recorded in the prior
year quarter.
Earnings before income taxes were $65.5 million during the quarter compared to
$34.1 million in the third quarter of
fiscal 2016. Adjusted operating income increased to
$94.3 million in the quarter from
$69.2 million in the prior year
period and was primarily driven by higher gross margin and lower
spending.
The effective tax rate for the first nine months of
fiscal 2017 was 22.9% as compared to 19.0% in the prior year
period. The adjusted effective tax rate for the first nine
months of fiscal 2017, excluding the tax associated with
restructuring, was 23.9%, in line with the prior year adjusted rate
of 23.8%.
Net earnings in the quarter were $54.9 million, as compared to $36.7 million in the third quarter of fiscal
2016. Adjusted net earnings in the quarter were $63.7 million, as compared to $39.2 million in the third quarter of fiscal
2016.
GAAP Diluted EPS was $0.95
in the quarter, as compared to $0.61
in the prior year quarter. Adjusted EPS for the quarter was
$1.11, compared to $0.66 in the prior year quarter.
Net cash from operating activities was $119.4 million for the first nine months of
fiscal 2017, as compared to $4.1
million during the same period during the prior year.
The improvement reflects the $100.5
million of discretionary funding of certain international
pension plans during the second quarter of fiscal 2016 and higher
current period net earnings, partially offset by higher current
year deferred compensation payments. In the first nine months
of fiscal 2017, the Company completed share repurchases of
approximately 1.3 million shares for $94.6
million.
Fiscal 3Q 2017 Operating Segment Results (Unaudited)
Following is a summary of third quarter results by segment. All
comparisons are with the third quarter of fiscal year 2016.
Wet Shave (Men's Systems, Women's Systems, Disposables,
Shave Preps)
Wet Shave net sales decreased $6.1
million, or 1.7%. Excluding the impact of currency
movements, organic net sales were essentially flat versus the prior
year, as higher volumes were offset by unfavorable price mix.
Men's Systems volumes increased in both International and
North America in the quarter due
to the timing of promotional activities and new private label
distribution in Europe. Disposables volumes improved
primarily in North America behind
innovation and distribution gains. Women's Systems volumes
declined, reflecting weak category trends in the U.S. Wet
Shave segment profit increased $14.3
million, or 31.4%, primarily due to improved gross margins
driven by lower product and commodity costs, as well as improved
product and cost mix. In addition, A&P spending was lower
in the quarter on decreased media spend for Women's Systems and
Disposables, partially offset by higher spend in Men's Systems.
Sun and Skin Care (Sun
Care, Wipes, Gloves, Bulldog)
Sun and Skin Care net sales increased $9.8 million, or 6.5%. Excluding the
Bulldog acquisition and the impact of currency movements, organic
net sales increased $7.4 million, or
4.9%, driven by growth in both International and North America and in both the Banana Boat® and
Hawaiian Tropic® brands. This was partially offset by a
$2.6 million decline related to the
Company's exiting of the private label Sun
Care business. Growth in North America was primarily driven by lower
returns and lower promotional spend compared to the prior year
quarter. Growth in International was largely driven by
category growth and new distribution. Sun and Skin Care
segment profit increased $8.1
million, or 23.6%, driven primarily by lower returns, lower
promotional spend and cost savings generated through restructuring
programs.
Feminine Care (Tampons, Pads, Liners)
Feminine Care net sales decreased $10.7
million, or 11.0%, driven by volume declines related to
Sport® branded pad distribution losses, increased competitive
pressure, and category softness. Price mix was also
unfavorable in the quarter in support of promotional programs
behind innovation. This resulted in declines across Tampons,
Pads and Liners. Feminine Care segment profit increased
$0.2 million, or 2.7%, due to lower
A&P and overhead spending, offset in part by lower volumes and
unfavorable price mix. Product cost mix was essentially flat,
as lower commodity costs and savings generated through
restructuring programs helped to offset final transition costs
related to the shift of manufacturing from Montreal to Dover,
Delaware.
All Other (Infant Care,
all other brands)
All Other net sales decreased $0.6
million, or 1.9%. Excluding the impact of currency
movements, organic net sales decreased $0.4
million, or 1.3%. Growth in Diaper Genie® and Pet Care
products was more than offset by declines in infant cups and
bottles. All Other segment profit increased $0.6 million, or 9.8%.
Full Fiscal Year 2017 Financial Outlook
For fiscal 2017, reported net sales are now expected to be down
approximately 1% to 2%, including an approximate 60 basis point
increase from the acquisition of Bulldog, and negative foreign
currency translation effects of approximately 60 basis points
(based on spot exchange rates as of August
1, 2017). The Company is also revising its
organic net sales outlook to be down 1% to 2% (previously flat)
compared to the prior year, reflecting a lower sales outlook in Wet
Shave and Feminine Care.
The Company's outlook for GAAP EPS for fiscal 2017 is in the
range of $3.55 - $3.70, and the
Company has increased its outlook for Adjusted EPS to $3.90 to $4.05 (previously $3.80 - $4.00). Adjusted operating income
margin is now anticipated to expand by 50 to 70 basis points
(previously 50 basis points). The effective tax rate for the
fiscal year is now estimated to be in the range of 24% to 25%
(previously 26% to 27%).
The Company anticipates that fiscal 2017 free cash flow will be
approximately 100% of GAAP net earnings.
The full-year estimate for restructuring related costs is now
$28 to $30 million (previously
$25 to $28 million). Full year
incremental restructuring savings are expected to be approximately
$20 to $25 million in fiscal 2017,
with an additional $20 to $25 million
in fiscal 2018 and 2019 combined. The Company does not expect
to incur material restructuring charges related to this project in
fiscal 2018.
The Company's Zero Based Spending initiative is anticipated to
drive $10 to $15 million in savings
(net of implementation expense) in fiscal 2017, with an additional
$25 to $30 million of savings
expected in fiscal 2018.
Webcast Information
In conjunction with this announcement, the Company will hold an
investor conference call beginning at 10:00
a.m. Eastern Time today. The call will focus on fiscal
2017 third quarter earnings and the outlook for fiscal 2017.
All interested parties may access a live webcast of this conference
call at www.edgewell.com, under "Investors," and "News and Events"
tabs or by using the following link:
http://ir.edgewell.com/news-and-events/events
For those unable to participate during the live webcast, a
replay will be available on www.edgewell.com, under "Investors,"
"Financial Reports," and "Quarterly Earnings" tabs.
About Edgewell
Edgewell is a leading pure-play consumer products company with
an attractive, diversified portfolio of established brand names
such as Schick® and Wilkinson Sword® men's and women's shaving
systems and disposable razors; Edge® and Skintimate® shave
preparations; Playtex®, Stayfree®, Carefree® and o.b.® feminine
care products; Banana Boat®, Hawaiian Tropic® and Bulldog® sun and
skin care products; Playtex® infant feeding, Diaper Genie® and
gloves; and Wet Ones® moist wipes. The Company has a broad
global footprint and operates in more than 50 markets, including
the U.S., Canada, Mexico, Germany, Japan, the U.K. and Australia, with approximately 6,000 employees
worldwide.
Non-GAAP Financial Measures. While the Company
reports financial results in accordance with accounting principles
generally accepted in the U.S. ("GAAP"), this discussion also
includes Non-GAAP measures. These Non-GAAP measures are
referred to as "adjusted" or "organic" and exclude items such as
spin costs, restructuring charges, the sale of the industrial
business and amortization of intangibles. Reconciliations of
Non-GAAP measures, including reconciliations of measures related to
the Company's fiscal 2017 financial outlook, are included within
the Notes to Condensed Consolidated Financial Statements included
with this release.
This Non-GAAP information is provided as a supplement to, not as
a substitute for, or as superior to, measures of financial
performance prepared in accordance with GAAP. The Company
uses this Non-GAAP information internally to make operating
decisions and believes it is helpful to investors because it allows
more meaningful period-to-period comparisons of ongoing operating
results. The information can also be used to perform analysis
and to better identify operating trends that may otherwise be
masked or distorted by the types of items that are excluded.
This Non-GAAP information is a component in determining
management's incentive compensation. Finally, the Company
believes this information provides a higher degree of
transparency. The following provides additional detail on the
Company's Non-GAAP measures.
- The Company analyzes its net 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
and acquisitions. This information is provided because these
fluctuations can distort the underlying change in net sales either
positively or negatively.
- Adjusted EBITDA is defined as earnings before income taxes,
interest expense, net, depreciation and amortization and excludes
items such as spin costs, restructuring charges and the sale of the
industrial business.
- Adjusted operating income is defined as earnings before income
taxes, interest expense associated with debt, other income, net,
and excludes items such as spin costs, restructuring charges and
the sale of the industrial business.
- Adjusted net earnings and adjusted earnings per share are
defined as net earnings and diluted earnings per share excluding
items such as spin costs, restructuring charges, the sale of the
industrial business and the related tax effects of these
items.
- Adjusted effective tax rate is defined as the effective tax
rate excluding items such as spin costs, restructuring charges, the
sale of the industrial business and the related tax effects of
these items 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.
Forward-Looking Statements. This document contains
both historical and forward-looking statements.
Forward-looking statements are not based on historical facts, but
instead reflect the Company's expectations, estimates or
projections concerning future results or events, including, without
limitation, the future earnings and performance of Edgewell or any
of its businesses. These statements generally can be
identified by the use of forward-looking words or phrases such as
"believe," "expect," "expectation," "anticipate," "may," "could,"
"intend," "belief," "estimate," "plan," "target," "predict,"
"likely," "will," "should," "forecast," "outlook," or other similar
words or phrases. These statements are not guarantees of
performance and are inherently subject to known and unknown risks,
uncertainties and assumptions that are difficult to predict and
could cause the Company's actual results to differ materially from
those indicated by those statements. The Company cannot
assure you that any of its expectations, estimates or projections
will be achieved. The forward-looking statements included in
this document are only made as of the date of this document and the
Company disclaims any obligation to publicly update any
forward-looking statement to reflect subsequent events or
circumstances. Numerous factors could cause the Company's
actual results and events to differ materially from those expressed
or implied by forward-looking statements, including, without
limitation:
- The Company is subject to risks related to its international
operations, such as global economic conditions and currency
fluctuations, that could adversely affect its results of
operations;
- Competition within the Company's industries may hinder its
ability to execute its business strategy, achieve profitability or
maintain relationships with existing customers;
- Loss of reputation of the Company's leading brands or failure
of its marketing plans could have an adverse effect on its
business;
- The Company's manufacturing facilities, supply channels or
other business operations may be subject to disruption from events
beyond its control;
- The Company's access to capital markets and borrowing capacity
could be limited;
- If the Company cannot continue to develop new products in a
timely manner, and at favorable margins, it may not be able to
compete effectively;
- The Company has a substantial level of indebtedness and is
subject to various covenants relating to such indebtedness, which
could limit its discretion to operate and grow its business;
- The Company faces risks arising from the restructuring of its
operations and its ongoing efforts to achieve cost savings;
- Loss of any of the Company's principal customers and emergence
of new sales channels, such as e-Commerce, could significantly
decrease its sales and profitability;
- The Company may not be able to attract, retain and develop key
personnel;
- The Company may experience losses or be subject to increased
funding obligations and expenses related to its pension plans;
- The Company may not be able to continue to identify and
complete strategic acquisitions and effectively integrate acquired
companies to achieve desired financial benefits;
- The Company's business involves the potential for product
liability and other claims against it, which could affect its
results of operations and financial condition and result in product
recalls or withdrawals;
- A failure of a key information technology system or a breach of
the Company's information security could adversely impact its
ability to conduct business;
- The Company's business is subject to increasing regulation in
the U.S. and abroad, including environmental laws and regulations,
that may expose it to significant liabilities;
- The resolution of the Company' tax contingencies may result in
additional tax liabilities, which could adversely impact its cash
flows and results of operations;
- If the Company fails to adequately protect its intellectual
property rights, competitors may manufacture and market similar
products, which could adversely affect its market share and results
of operations;
- The Company's financial results could be negatively impacted by
the United Kingdom's departure
from the European Union; and
- The Company faces risks related to the separation of its
Household Products business, which may adversely affect its
business.
In addition, other risks and uncertainties not presently known
to the Company or that it presently considers immaterial could
significantly affect the accuracy of any such forward-looking
statements. The list of factors above is illustrative, but
not exhaustive. All forward-looking statements should be
evaluated with the understanding of their inherent
uncertainty. Additional risks and uncertainties include those
detailed from time to time in the Company's publicly filed
documents, including in Item 1A. Risk Factors of Part I of the
Company's Annual Report on Form 10-K for the year ended
September 30, 2016.
EDGEWELL PERSONAL
CARE COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
(unaudited, in
millions, except per share data)
|
|
|
Quarter Ended June
30,
|
|
Nine Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
637.5
|
|
|
$
|
645.1
|
|
|
$
|
1,733.5
|
|
|
$
|
1,751.4
|
|
Cost of products
sold
|
315.4
|
|
|
333.9
|
|
|
873.8
|
|
|
901.6
|
|
Gross
profit
|
322.1
|
|
|
311.2
|
|
|
859.7
|
|
|
849.8
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
97.5
|
|
|
104.8
|
|
|
295.2
|
|
|
304.9
|
|
Advertising and sales
promotion expense
|
114.2
|
|
|
122.5
|
|
|
247.3
|
|
|
254.1
|
|
Research and
development expense
|
16.4
|
|
|
17.5
|
|
|
50.2
|
|
|
50.2
|
|
Restructuring
charges
|
12.5
|
|
|
5.8
|
|
|
24.9
|
|
|
29.3
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Interest expense
associated with debt
|
17.6
|
|
|
18.3
|
|
|
52.3
|
|
|
53.8
|
|
Other (income)
expense, net
|
(1.6)
|
|
|
8.2
|
|
|
(10.1)
|
|
|
1.2
|
|
Earnings before
income taxes
|
65.5
|
|
|
34.1
|
|
|
199.9
|
|
|
156.1
|
|
Income tax provision
(benefit)
|
10.6
|
|
|
(2.6)
|
|
|
45.8
|
|
|
29.6
|
|
Net
earnings
|
$
|
54.9
|
|
|
$
|
36.7
|
|
|
$
|
154.1
|
|
|
$
|
126.5
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic net earnings per share
|
$
|
0.96
|
|
|
$
|
0.62
|
|
|
$
|
2.68
|
|
|
$
|
2.13
|
|
Diluted net earnings per diluted share
|
0.95
|
|
|
0.61
|
|
|
2.67
|
|
|
2.11
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
57.2
|
|
|
59.1
|
|
|
57.4
|
|
|
59.4
|
|
Diluted
|
57.5
|
|
|
59.7
|
|
|
57.7
|
|
|
59.9
|
|
See Accompanying Notes.
EDGEWELL PERSONAL
CARE COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited, in
millions)
|
|
Assets
|
June
30,
2017
|
|
September
30,
2016
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
454.9
|
|
|
$
|
738.9
|
|
Trade receivables,
net
|
312.9
|
|
|
260.7
|
|
Inventories
|
343.1
|
|
|
309.2
|
|
Other current
assets
|
125.1
|
|
|
143.2
|
|
Total current
assets
|
1,236.0
|
|
|
1,452.0
|
|
Property, plant and
equipment, net
|
458.4
|
|
|
486.1
|
|
Goodwill
|
1,439.4
|
|
|
1,420.3
|
|
Other intangible
assets, net
|
1,393.1
|
|
|
1,385.1
|
|
Other
assets
|
28.9
|
|
|
28.0
|
|
Total
assets
|
$
|
4,555.8
|
|
|
$
|
4,771.5
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current maturities of
long-term debt
|
$
|
—
|
|
|
$
|
281.8
|
|
Notes
payable
|
17.7
|
|
|
18.5
|
|
Accounts
payable
|
236.9
|
|
|
196.5
|
|
Other current
liabilities
|
289.7
|
|
|
371.4
|
|
Total current
liabilities
|
544.3
|
|
|
868.2
|
|
Long-term
debt
|
1,580.1
|
|
|
1,544.2
|
|
Deferred income tax
liabilities
|
254.8
|
|
|
255.3
|
|
Other
liabilities
|
262.7
|
|
|
274.8
|
|
Total
liabilities
|
2,641.9
|
|
|
2,942.5
|
|
Shareholders'
equity
|
|
|
|
Common
shares
|
0.7
|
|
|
0.7
|
|
Additional paid-in
capital
|
1,625.2
|
|
|
1,642.5
|
|
Retained
earnings
|
1,101.2
|
|
|
946.0
|
|
Treasury
shares
|
(636.9)
|
|
|
(563.0)
|
|
Accumulated other
comprehensive loss
|
(176.3)
|
|
|
(197.2)
|
|
Total shareholders'
equity
|
1,913.9
|
|
|
1,829.0
|
|
Total liabilities and
shareholders' equity
|
$
|
4,555.8
|
|
|
$
|
4,771.5
|
|
See Accompanying Notes.
EDGEWELL PERSONAL
CARE COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited, in
millions)
|
|
|
Nine Months
Ended June
30,
|
|
2017
|
|
2016
|
Cash Flow from
Operating Activities
|
|
|
|
Net
earnings
|
$
|
154.1
|
|
|
$
|
126.5
|
|
Non-cash
restructuring costs
|
6.4
|
|
|
2.2
|
|
Depreciation and
amortization
|
70.3
|
|
|
69.2
|
|
Deferred compensation
payments
|
(27.6)
|
|
|
(7.3)
|
|
Share-based
compensation expense
|
16.6
|
|
|
20.0
|
|
International pension
funding
|
—
|
|
|
(100.5)
|
|
Other, net
|
(12.2)
|
|
|
(18.9)
|
|
Changes in current
assets and liabilities used in operations
|
(88.2)
|
|
|
(87.1)
|
|
Net cash from
operating activities
|
119.4
|
|
|
4.1
|
|
|
|
|
|
Cash Flow from
Investing Activities
|
|
|
|
Capital
expenditures
|
(45.4)
|
|
|
(50.9)
|
|
Acquisitions, net of
cash acquired
|
(34.0)
|
|
|
—
|
|
Proceeds from sale of
assets
|
5.9
|
|
|
—
|
|
Net cash used by
investing activities
|
(73.5)
|
|
|
(50.9)
|
|
|
|
|
|
Cash Flow from
Financing Activities
|
|
|
|
Cash proceeds from
debt with original maturities greater than 90 days
|
181.0
|
|
|
656.3
|
|
Cash payments on debt
with original maturities greater than 90 days
|
(423.0)
|
|
|
(501.0)
|
|
Net increase
(decrease) in debt with original maturities of 90 days or
less
|
0.1
|
|
|
(15.5)
|
|
Common shares
purchased
|
(94.6)
|
|
|
(114.5)
|
|
Other, net
|
1.9
|
|
|
(0.6)
|
|
Net cash (used by)
from financing activities
|
(334.6)
|
|
|
24.7
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
4.7
|
|
|
1.5
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
(284.0)
|
|
|
(20.6)
|
|
Cash and cash
equivalents, beginning of period
|
738.9
|
|
|
712.1
|
|
Cash and cash
equivalents, end of period
|
$
|
454.9
|
|
|
$
|
691.5
|
|
See Accompanying Notes.
EDGEWELL PERSONAL CARE COMPANY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited,
in millions, except per share data)
Note 1 - Segments
The Company conducts its business in the following four
segments: Wet Shave, Sun and Skin Care, Feminine Care and All
Other. Segment performance is evaluated based on segment
profit, exclusive of general corporate expenses, share-based
compensation costs, costs associated with restructuring
initiatives, the sale of the industrial business and the
amortization of intangible assets. Financial items, such as
interest income and expense, are managed on a global basis at the
corporate level. The exclusion of such charges from segment
results reflects management's view on how it evaluates segment
performance.
On October 31, 2016, the Company
completed the acquisition of Bulldog Skincare Holdings Limited
("Bulldog"), a men's grooming and skincare products company based
in the United Kingdom,
for £27.8, or approximately $34.0, net of cash
acquired. The acquisition created opportunities to expand
Edgewell's personal care portfolio into a growing global category
where it can leverage its international geographic footprint.
The acquisition was financed through available foreign cash.
The results of Bulldog for the post-acquisition period are included
within the Company's results for the third quarter and first nine
months of fiscal 2017, and all assets are included in the Company's
Sun and Skin Care segment.
Segment net sales and profitability are presented below:
|
Quarter Ended June
30,
|
|
Nine Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
Sales
|
|
|
|
|
|
|
|
Wet Shave
|
$
|
358.5
|
|
|
$
|
364.6
|
|
|
$
|
1,007.3
|
|
|
$
|
1,034.3
|
|
Sun and Skin
Care
|
161.1
|
|
|
151.3
|
|
|
369.3
|
|
|
337.3
|
|
Feminine
Care
|
86.4
|
|
|
97.1
|
|
|
258.7
|
|
|
281.2
|
|
All Other
|
31.5
|
|
|
32.1
|
|
|
98.2
|
|
|
98.6
|
|
Total net
sales
|
$
|
637.5
|
|
|
$
|
645.1
|
|
|
$
|
1,733.5
|
|
|
$
|
1,751.4
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
|
|
|
|
|
Wet Shave
|
$
|
59.8
|
|
|
$
|
45.5
|
|
|
$
|
205.0
|
|
|
$
|
190.0
|
|
Sun and Skin
Care
|
42.4
|
|
|
34.3
|
|
|
94.1
|
|
|
75.2
|
|
Feminine
Care
|
7.6
|
|
|
7.4
|
|
|
17.5
|
|
|
35.5
|
|
All Other
|
6.7
|
|
|
6.1
|
|
|
21.3
|
|
|
21.3
|
|
Total segment
profit
|
116.5
|
|
|
93.3
|
|
|
337.9
|
|
|
322.0
|
|
General corporate and
other expenses
|
(18.2)
|
|
|
(20.5)
|
|
|
(58.1)
|
|
|
(58.5)
|
|
Spin costs
(1)
|
—
|
|
|
(2.8)
|
|
|
—
|
|
|
(12.0)
|
|
Restructuring and
related costs (2)
|
(12.8)
|
|
|
(5.8)
|
|
|
(25.6)
|
|
|
(29.4)
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2)
|
|
Amortization of
intangibles
|
(4.0)
|
|
|
(3.6)
|
|
|
(12.1)
|
|
|
(10.8)
|
|
Interest and other
expense, net
|
(16.0)
|
|
|
(26.5)
|
|
|
(42.2)
|
|
|
(55.0)
|
|
Total earnings
before income taxes
|
$
|
65.5
|
|
|
$
|
34.1
|
|
|
$
|
199.9
|
|
|
$
|
156.1
|
|
|
(1)
|
Includes Selling,
general and administrative expense ("SG&A") of $2.8 and $11.8
for the third quarter and first nine months of fiscal 2016,
respectively, and Cost of products sold of $0.2 for the first nine
months of fiscal 2016 related to the separation of the Household
Products business in July 2015.
|
(2)
|
Includes Cost of
products sold of $0.3 and $0.7 for the third quarter and first nine
months of fiscal 2017, respectively, and $0.1 for the first nine
months of fiscal 2016 associated with obsolescence charges related
to the exit of certain non-core product lines as a part of the
restructuring.
|
Note 2 - GAAP to Non-GAAP Reconciliations
Basic earnings per share is based on the average number of
common shares outstanding during the period. Diluted earnings
per share is based on the weighted-average number of shares used
for the basic earnings per share calculation, adjusted for the
dilutive effect of share options and restricted stock equivalent
awards.
The following table provides a reconciliation of Net earnings
and Net earnings per diluted share ("EPS") to Adjusted net earnings
and Adjusted EPS, which are Non-GAAP measures.
|
Quarter Ended June
30,
|
|
Net
Earnings
|
|
Diluted
EPS
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Earnings and
Diluted EPS - GAAP (Unaudited)
|
$
|
54.9
|
|
|
$
|
36.7
|
|
|
$
|
0.95
|
|
|
$
|
0.61
|
|
Spin costs
(1)
|
—
|
|
|
2.8
|
|
|
—
|
|
|
0.05
|
|
Restructuring and
related charges (2)
|
12.8
|
|
|
5.8
|
|
|
0.23
|
|
|
0.10
|
|
Income taxes
(3)
|
(4.0)
|
|
|
(6.1)
|
|
|
(0.07)
|
|
|
(0.10)
|
|
Adjusted Net
Earnings and Adjusted Diluted EPS - Non-GAAP
|
$
|
63.7
|
|
|
$
|
39.2
|
|
|
$
|
1.11
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares - Diluted
|
|
|
|
|
57.5
|
|
|
59.7
|
|
|
(1)
|
Includes SG&A of
$2.8 for the third quarter of fiscal 2016 related to the separation
of the Household Products business in July 2015.
|
(2)
|
Includes Cost of
products sold of $0.3 for the third quarter of fiscal 2017
associated with obsolescence charges related to the exit of certain
non-core product lines as part of the restructuring.
|
(3)
|
Includes adjustments
to prior years' tax accrual of $3.3 for the third quarter
of fiscal 2016.
|
|
Nine Months Ended
June 30,
|
|
Net
Earnings
|
|
Diluted
EPS
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Earnings and
Diluted EPS - GAAP (Unaudited)
|
$
|
154.1
|
|
|
$
|
126.5
|
|
|
$
|
2.67
|
|
|
$
|
2.11
|
|
Spin costs
(1)
|
—
|
|
|
12.0
|
|
|
—
|
|
|
0.20
|
|
Restructuring and
related charges (2)
|
25.6
|
|
|
29.4
|
|
|
0.45
|
|
|
0.50
|
|
Industrial sale
charges
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
Income taxes
(3)
|
(8.0)
|
|
|
(17.4)
|
|
|
(0.14)
|
|
|
(0.29)
|
|
Adjusted Net
Earnings and Adjusted Diluted EPS - Non-GAAP
|
$
|
171.7
|
|
|
$
|
150.7
|
|
|
$
|
2.98
|
|
|
$
|
2.52
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares - Diluted
|
|
|
|
|
57.7
|
|
|
59.9
|
|
|
(1)
|
Includes SG&A of
$11.8 and Cost of products sold of $0.2 for the first nine months
of fiscal 2016 related to the separation of the Household Products
business in July 2015.
|
(2)
|
Includes Cost of
products sold of $0.7 and $0.1 for the first nine months of fiscal
2017 and 2016, respectively, associated with obsolescence charges
related to the exit of certain non-core product lines as part of
the restructuring.
|
(3)
|
Includes adjustments
to prior years' tax accrual of $3.3 for the first nine
months of fiscal 2016.
|
The following tables provide a GAAP to Non-GAAP reconciliation
of certain line items from the Condensed Consolidated Statement of
Earnings:
Quarter Ended June
30, 2017
|
|
|
|
|
|
|
|
Gross
Profit
|
|
SG&A
|
|
EBIT
(1)
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP -
Reported
|
$
|
322.1
|
|
|
$
|
97.5
|
|
|
$
|
65.5
|
|
|
$
|
54.9
|
|
|
$
|
0.95
|
|
% of net
sales
|
50.5
|
%
|
|
15.3
|
%
|
|
|
|
|
|
|
Restructuring and
related charges (2)
|
0.3
|
|
|
—
|
|
|
12.8
|
|
|
8.8
|
|
|
0.16
|
|
Total Adjusted
Non-GAAP
|
$
|
322.4
|
|
|
$
|
97.5
|
|
|
$
|
78.3
|
|
|
$
|
63.7
|
|
|
$
|
1.11
|
|
% of net
sales
|
50.6
|
%
|
|
15.3
|
%
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
Gross
Profit
|
|
SG&A
|
|
EBIT
(1)
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP -
Reported
|
$
|
859.7
|
|
|
$
|
295.2
|
|
|
$
|
199.9
|
|
|
$
|
154.1
|
|
|
$
|
2.67
|
|
% of net
sales
|
49.6
|
%
|
|
17.0
|
%
|
|
|
|
|
|
|
Restructuring and
related charges (2)
|
0.7
|
|
|
—
|
|
|
25.6
|
|
|
17.6
|
|
|
0.31
|
|
Total Adjusted
Non-GAAP
|
$
|
860.4
|
|
|
$
|
295.2
|
|
|
$
|
225.5
|
|
|
$
|
171.7
|
|
|
$
|
2.98
|
|
% of net
sales
|
49.6
|
%
|
|
17.0
|
%
|
|
|
|
|
|
|
Quarter Ended June
30, 2016
|
|
|
|
|
|
|
|
Gross
Profit
|
|
SG&A
|
|
EBIT
(1)
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP -
Reported
|
$
|
311.2
|
|
|
$
|
104.8
|
|
|
$
|
34.1
|
|
|
$
|
36.7
|
|
|
$
|
0.61
|
|
% of net
sales
|
48.2
|
%
|
|
16.2
|
%
|
|
|
|
|
|
|
Spin costs
|
—
|
|
|
2.8
|
|
|
2.8
|
|
|
1.9
|
|
|
0.03
|
|
Restructuring and
related charges
|
—
|
|
|
—
|
|
|
5.8
|
|
|
3.9
|
|
|
0.08
|
|
Adjustment to prior
years' tax accruals
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3)
|
|
|
(0.06)
|
|
Total Adjusted
Non-GAAP
|
$
|
311.2
|
|
|
$
|
102.0
|
|
|
$
|
42.7
|
|
|
$
|
39.2
|
|
|
$
|
0.66
|
|
% of net
sales
|
48.2
|
%
|
|
15.8
|
%
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2016
|
|
|
|
|
|
|
|
Gross
Profit
|
|
SG&A
|
|
EBIT
(1)
|
|
Net
Earnings
|
|
Diluted
EPS
|
GAAP -
Reported
|
$
|
849.8
|
|
|
$
|
304.9
|
|
|
$
|
156.1
|
|
|
$
|
126.5
|
|
|
$
|
2.11
|
|
% of net
sales
|
48.5
|
%
|
|
17.4
|
%
|
|
|
|
|
|
|
Spin costs
|
0.2
|
|
|
11.8
|
|
|
12.0
|
|
|
7.6
|
|
|
0.13
|
|
Restructuring and
related charges (2)
|
0.1
|
|
|
—
|
|
|
29.4
|
|
|
19.8
|
|
|
0.34
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
Adjustment to prior
years' tax accrual
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3)
|
|
|
(0.06)
|
|
Total Adjusted
Non-GAAP
|
$
|
850.1
|
|
|
$
|
293.1
|
|
|
$
|
197.7
|
|
|
$
|
150.7
|
|
|
$
|
2.52
|
|
% of net
sales
|
48.5
|
%
|
|
16.7
|
%
|
|
|
|
|
|
|
|
(1)
|
EBIT is defined as
Earnings before income taxes.
|
(2)
|
Includes Cost of
products sold of $0.3 and $0.7 for the third quarter and first nine
months of fiscal 2017, respectively, and $0.1 for the first nine
months of fiscal 2016 associated with obsolescence charges related
to the exit of certain non-core product lines as part of the
restructuring.
|
The following table provides a reconciliation of Earnings before
income taxes to adjusted operating income, which is a Non-GAAP
measure, for the third quarter and first nine months of fiscal 2017
and 2016:
|
Quarter Ended June
30,
|
|
Nine Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Earnings before
income taxes
|
$
|
65.5
|
|
|
$
|
34.1
|
|
|
$
|
199.9
|
|
|
$
|
156.1
|
|
Spin costs
(1)
|
—
|
|
|
2.8
|
|
|
—
|
|
|
12.0
|
|
Restructuring and
related charges (2)
|
12.8
|
|
|
5.8
|
|
|
25.6
|
|
|
29.4
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Interest expense
associated with debt
|
17.6
|
|
|
18.3
|
|
|
52.3
|
|
|
53.8
|
|
Other (income)
expense, net
|
(1.6)
|
|
|
8.2
|
|
|
(10.1)
|
|
|
1.2
|
|
Adjusted operating
income
|
$
|
94.3
|
|
|
$
|
69.2
|
|
|
$
|
267.7
|
|
|
$
|
252.7
|
|
% of net
sales
|
14.8
|
%
|
|
10.7
|
%
|
|
15.4
|
%
|
|
14.4
|
%
|
|
(1)
|
Includes SG&A of
$2.8 and $11.8 for the third quarter and first nine months of
fiscal 2016, respectively, and Costs of products sold of $0.2 for
the first nine months of fiscal 2016 related to the separation of
the Household Products business in July 2015.
|
(2)
|
Includes Cost of
products sold of $0.3 and $0.7 for the third quarter and first nine
months of fiscal 2017, respectively, and $0.1 for the first nine
months of fiscal 2016 associated with obsolescence charges related
to the exit of certain non-core product lines as part of the
restructuring.
|
The following table provides a reconciliation of the effective
tax rate to the adjusted effective tax rate, which is a Non-GAAP
measure:
|
Nine Months Ended
June 30, 2017
|
|
Nine Months Ended
June 30, 2016
|
|
Reported
|
|
Adjustments
(1)
|
|
Adjusted
(Non-GAAP)
|
|
Reported
|
|
Adjustments
(1)
|
|
Adjusted (Non-GAAP)
|
Earnings before
income taxes
|
$
|
199.9
|
|
|
$
|
25.6
|
|
|
$
|
225.5
|
|
|
$
|
156.1
|
|
|
$
|
41.6
|
|
|
$
|
197.7
|
|
Income tax
provision
|
45.8
|
|
|
8.0
|
|
|
53.8
|
|
|
29.6
|
|
|
17.4
|
|
|
47.0
|
|
Net
earnings
|
$
|
154.1
|
|
|
$
|
17.6
|
|
|
$
|
171.7
|
|
|
$
|
126.5
|
|
|
$
|
24.2
|
|
|
$
|
150.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
22.9
|
%
|
|
|
|
|
|
19.0
|
%
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
23.9
|
%
|
|
|
|
|
|
23.8
|
%
|
|
(1)
|
Includes adjustments
for spin costs, restructuring charges, the sale of the industrial
business and the associated tax impact of these charges. See
reconciliation of Net earnings to Adjusted net earnings.
|
Note 3 - Net Sales and Profit by Segment
Operations for the Company are reported via four segments - Wet
Shave, Sun and Skin Care, Feminine Care and All Other. The
following tables present changes in net sales and segment profit
for the third quarter and first nine months of fiscal 2017, as
compared to the corresponding periods in fiscal 2016, and provide a
reconciliation of organic net sales and organic segment profit to
reported amounts.
Net Sales (In
millions - Unaudited)
|
Quarter Ended June
30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Net Sales - Q3
'16
|
$
|
364.6
|
|
|
|
|
$
|
151.3
|
|
|
|
|
$
|
97.1
|
|
|
|
|
$
|
32.1
|
|
|
|
|
$
|
645.1
|
|
|
|
Organic
|
(0.2)
|
|
|
(0.1)%
|
|
|
7.4
|
|
|
4.9
|
%
|
|
(10.5)
|
|
|
(10.8)%
|
|
|
(0.4)
|
|
|
(1.3)%
|
|
|
(3.7)
|
|
|
(0.6)%
|
|
Impact of
acquisition
|
—
|
|
|
—
|
%
|
|
4.0
|
|
|
2.6
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
4.0
|
|
|
0.6
|
%
|
Impact of
currency
|
(5.9)
|
|
|
(1.6)%
|
|
|
(1.6)
|
|
|
(1.0)%
|
|
|
(0.2)
|
|
|
(0.2)%
|
|
|
(0.2)
|
|
|
(0.6)%
|
|
|
(7.9)
|
|
|
(1.2)%
|
|
Net Sales - Q3
'17
|
$
|
358.5
|
|
|
(1.7)%
|
|
|
$
|
161.1
|
|
|
6.5
|
%
|
|
$
|
86.4
|
|
|
(11.0)%
|
|
|
$
|
31.5
|
|
|
(1.9)%
|
|
|
$
|
637.5
|
|
|
(1.2)%
|
|
Net Sales (In
millions - Unaudited)
|
Nine Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Net Sales - FY
'16
|
$
|
1,034.3
|
|
|
|
|
$
|
337.3
|
|
|
|
|
$
|
281.2
|
|
|
|
|
$
|
98.6
|
|
|
|
|
$
|
1,751.4
|
|
|
|
Organic
|
(15.6)
|
|
|
(1.5)%
|
|
|
24.6
|
|
|
7.3
|
%
|
|
(22.5)
|
|
|
(8.0)%
|
|
|
(0.2)
|
|
|
(0.2)%
|
|
|
(13.7)
|
|
|
(0.8)%
|
|
Impact of
acquisition
|
—
|
|
|
—
|
%
|
|
10.1
|
|
|
3.0
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
10.1
|
|
|
0.6
|
%
|
Impact of
currency
|
(11.4)
|
|
|
(1.1)%
|
|
|
(2.7)
|
|
|
(0.8)%
|
|
|
—
|
|
|
—
|
%
|
|
(0.2)
|
|
|
(0.2)%
|
|
|
(14.3)
|
|
|
(0.8)%
|
|
Net Sales - FY
'17
|
$
|
1,007.3
|
|
|
(2.6)%
|
|
|
$
|
369.3
|
|
|
9.5
|
%
|
|
$
|
258.7
|
|
|
(8.0)%
|
|
|
$
|
98.2
|
|
|
(0.4)%
|
|
|
$
|
1,733.5
|
|
|
(1.0)%
|
|
Segment Profit (In
millions - Unaudited)
|
Quarter Ended June
30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Segment Profit - Q3
'16
|
$
|
45.5
|
|
|
|
|
$
|
34.3
|
|
|
|
|
$
|
7.4
|
|
|
|
|
$
|
6.1
|
|
|
|
|
$
|
93.3
|
|
|
|
Organic
|
16.7
|
|
|
36.7
|
%
|
|
7.6
|
|
|
22.2
|
%
|
|
0.3
|
|
|
4.1
|
%
|
|
0.8
|
|
|
13.1
|
%
|
|
25.4
|
|
|
27.2
|
%
|
Impact of
acquisition
|
—
|
|
|
—
|
%
|
|
0.9
|
|
|
2.6
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
0.9
|
|
|
1.0
|
%
|
Impact of
currency
|
(2.4)
|
|
|
(5.3)%
|
|
|
(0.4)
|
|
|
(1.2)%
|
|
|
(0.1)
|
|
|
(1.4)%
|
|
|
(0.2)
|
|
|
(3.3)%
|
|
|
(3.1)
|
|
|
(3.3)%
|
|
Segment Profit - Q3
'17
|
$
|
59.8
|
|
|
31.4
|
%
|
|
$
|
42.4
|
|
|
23.6
|
%
|
|
$
|
7.6
|
|
|
2.7
|
%
|
|
$
|
6.7
|
|
|
9.8
|
%
|
|
$
|
116.5
|
|
|
24.9
|
%
|
Segment Profit (In
millions - Unaudited)
|
Nine Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wet
Shave
|
|
Sun and
Skin
Care
|
|
Feminine
Care
|
|
All
Other
|
|
Total
|
Segment Profit - FY
'16
|
$
|
190.0
|
|
|
|
|
$
|
75.2
|
|
|
|
|
$
|
35.5
|
|
|
|
|
$
|
21.3
|
|
|
|
|
$
|
322.0
|
|
|
|
Organic
|
15.9
|
|
|
8.4
|
%
|
|
19.2
|
|
|
25.5
|
%
|
|
(18.0)
|
|
|
(50.7)%
|
|
|
0.1
|
|
|
0.5
|
%
|
|
17.2
|
|
|
5.3
|
%
|
Impact of
acquisition
|
—
|
|
|
—
|
%
|
|
0.8
|
|
|
1.1
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
0.8
|
|
|
0.3
|
%
|
Impact of
currency
|
(0.9)
|
|
|
(0.5)%
|
|
|
(1.1)
|
|
|
(1.5)%
|
|
|
—
|
|
|
—
|
%
|
|
(0.1)
|
|
|
(0.5)%
|
|
|
(2.1)
|
|
|
(0.7)%
|
|
Segment Profit - FY
'17
|
$
|
205.0
|
|
|
7.9
|
%
|
|
$
|
94.1
|
|
|
25.1
|
%
|
|
$
|
17.5
|
|
|
(50.7)%
|
|
|
$
|
21.3
|
|
|
—
|
%
|
|
$
|
337.9
|
|
|
4.9
|
%
|
Note 4 - EBITDA
The Company reports financial results on a GAAP and adjusted
basis. The table below is used to reconcile Net earnings to
EBITDA and Adjusted EBITDA, which are Non-GAAP measures, to improve
comparability of results between periods.
|
Quarter Ended June
30,
|
|
Nine Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
earnings
|
$
|
54.9
|
|
|
$
|
36.7
|
|
|
$
|
154.1
|
|
|
$
|
126.5
|
|
Income tax
provision
|
10.6
|
|
|
(2.6)
|
|
|
45.8
|
|
|
29.6
|
|
Interest expense, net
(1)
|
17.6
|
|
|
21.3
|
|
|
52.3
|
|
|
53.8
|
|
Depreciation and
amortization
|
22.5
|
|
|
25.6
|
|
|
71.6
|
|
|
71.4
|
|
EBITDA
|
105.6
|
|
|
81.0
|
|
|
323.8
|
|
|
281.3
|
|
|
|
|
|
|
|
|
|
Spin costs
|
—
|
|
|
2.8
|
|
|
—
|
|
|
12.0
|
|
Restructuring and
related costs (2)
|
13.7
|
|
|
4.8
|
|
|
24.3
|
|
|
27.2
|
|
Industrial sale
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Adjusted
EBITDA
|
$
|
119.3
|
|
|
$
|
88.6
|
|
|
$
|
348.1
|
|
|
$
|
320.7
|
|
|
(1)
|
Interest expense, net
for the third quarter and first nine months of fiscal 2016 includes
$3.2 and $0.6, respectively, of interest expense recorded in
relation to settlements with tax authorities.
|
(2)
|
Excludes $(0.9) and
$1.0 of accelerated depreciation for the third quarters of fiscal
2017 and 2016, respectively, and $1.3 and $2.2 for the first nine
months of fiscal 2017 and 2016, respectively, which are included
within Depreciation and amortization.
|
Note 5 - Outlook
The following tables provide reconciliations of Adjusted EPS,
which is a Non-GAAP measure, included within the Company's outlook
for projected fiscal 2017 results:
Adjusted EPS
Outlook
|
|
|
Fiscal 2017 GAAP
EPS
|
|
$3.55 -
$3.70
|
|
|
|
Restructuring and
related costs
|
approx.
|
$0.50
|
Income
taxes
|
approx.
|
$(0.15)
|
|
|
|
Fiscal 2017 Adjusted
EPS Outlook (Non-GAAP)
|
|
$3.90 -
$4.05
|
Note 6 - Adjusted Working Capital
Adjusted working capital metrics for the third and second
quarters of fiscal 2017 and the fourth quarter of fiscal 2016 are
presented below.
|
Q3
2017
|
|
Days
(1)
|
|
Q2
2017
|
|
Days
(1)
|
|
Q4
2016
|
|
Days
(1)
|
Receivables, as
reported
|
$
|
278.2
|
|
|
|
|
$
|
277.2
|
|
|
|
|
$
|
275.2
|
|
|
|
Less: Trade allowance
in accrued liabilities (2)
|
(27.3)
|
|
|
|
|
(27.6)
|
|
|
|
|
(28.1)
|
|
|
|
Receivables,
adjusted
|
250.9
|
|
|
39
|
|
|
249.6
|
|
|
39
|
|
|
247.1
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories, as
reported
|
339.4
|
|
|
105
|
|
|
337.0
|
|
|
103
|
|
|
345.3
|
|
|
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable, as
reported
|
211.6
|
|
|
66
|
|
|
203.2
|
|
|
62
|
|
|
211.4
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average adjusted
working capital (3)
|
$
|
378.7
|
|
|
|
|
$
|
383.4
|
|
|
|
|
$
|
381.0
|
|
|
|
% of net sales
(4)
|
16.2
|
%
|
|
|
|
16.3
|
%
|
|
|
|
16.1
|
%
|
|
|
|
(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, 2017, March 31, 2017 and September 30, 2016,
respectively.
|
(4)
|
Average adjusted
working capital divided by trailing four-quarter net
sales.
|
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SOURCE Edgewell Personal Care Company