ENERGIZER HOLDINGS INC
For the period ended Mar 31, 2024. Filed May 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 7, 2024
ENR$23.84-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-02-06.
0001632790-24-000022
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001632790-24-000038
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 133 previous paragraphs and 154 current paragraphs.
72 unchanged; 54 reworded; 25 added; 6 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
During the quarter ended March 31, 2024, the Company recorded a loss of $1.0 on the purchase and sale of bonds issued by the Argentina Central Bank (BCRA), named BOPREALs, which were issued to provide a USD denominated instrument for import companies to pay import debts existing before December 12, 2023, and regulate the flow of reserves from BCRA.
Current report
For the six months ended March 31, 2024, Energizer reported Net earnings of $34.3, or $0.47 per diluted common share, compared to Net earnings of $89.0, or $1.23 per diluted common share, in the prior year comparable period. Adjusted diluted net earnings per common share was $1.30 for the six months period as compared to the $1.36 in the prior year comparable period.
Current report
Currency, excluding hyperinflationary markets, had an adverse impact to the quarter ended March 31, 2024 of $2.5 in Earnings before income taxes, or $0.03 per share. For the six months ended March 31, 2024, currency benefited the period by $3.1 in Earnings before income taxes, or $0.03 per share.
Current report
•Pricing declines of 3.3% driven by planned strategic pricing and promotional investments in the quarter.
Current report
•Partially offsetting the pricing declines was an increase in volumes of 0.6% largely driven by Auto Care distribution gains in the quarter.
Current report
Net sales were $1,379.9 for the six months ended March 31, 2024, a decrease of $69.3 as compared to the prior year period. Organic Net sales decreased 5.2%, driven by the following items:
Current report
•Pricing declines of 1.8% primarily driven by planned strategic pricing and promotional investments in the period.
Current report
•Increased Auto Care volumes of 0.5% largely driven by distribution gains in the period partially offset these declines.
Current report
Gross margin percentage on a reported basis for the six months ended March 31, 2024 was 37.7%, compared to 38.1%
Current report
in the prior year. Excluding restructuring costs in the current and prior year of $28.3 and $6.0, respectively, and current year acquisition and integration costs of $2.9, Adjusted Gross margin was 40.0% compared to 38.5% in the prior year, an increase of 150 basis points.
Current report
Adjusted Gross margin improvement in the second fiscal quarter of 2024 was largely driven by Project Momentum, which delivered savings of approximately $11 in the quarter, as well as lower input costs, including improved commodities pricing and lower ocean freight. These benefits were partially offset by the planned strategic pricing and promotional investments noted above.
Current report
Adjusted Gross margin improvement for the six months ended March 31, 2024 was largely driven by Project Momentum, which delivered savings of approximately $27 in the period, as well as lower input costs, including improved commodities pricing and lower ocean freight. These benefits were partially offset by the planned strategic pricing and promotional investments noted above and negative product mix impact.
Current report
Advertising and sales promotion expense (A&P) was $21.4, or 3.2% of net sales, in the second fiscal quarter of 2024, as compared to $18.4, or 2.7% of Net sales, in the second fiscal quarter of 2023. A&P was $68.4, or 5.0% of net sales, in the six months ended March 31, 2024, as compared to $71.8, or 5.0% of Net sales, in the prior year comparative period.
Current report
R&D was $7.9, or 1.2% of Net sales, for the quarter ended March 31, 2024, as compared to $8.0, or 1.2% of Net sales, in the prior year comparative period. R&D was $15.7, or 1.1% of Net sales, for the six months ended March 31, 2024, as compared to $15.6, or 1.1% of Net sales, in the prior year comparative period.
Current report
Battery & Lights reported Net sales decreased 4.9% as compared to the prior year period. Organic Net sales decreased $22.6, or 4.5%, for the second fiscal quarter. The organic decrease was primarily due to pricing declines driven by planned strategic pricing and promotional investments in the quarter (approximately 4.3%).
Current report
Auto Care reported Net sales increased 2.3% as compared to the prior year period, driven by an organic Net sales increase of $4.2, or 2.4%. Increased volumes from global distribution gains (approximately 3.0%) drove the growth. Partially offsetting the increase were pricing declines driven by planned strategic pricing and promotional investments in the quarter (approximately 0.6%).
Current report
Results for the Six Months Ended March 31, 2024
Current report
Global reported Segment profit increased 6.9% as compared to the prior year. Organic Segment profit increased was $13.0, or 9.0%. The organic increase was driven by higher Gross margin and decreased SG&A spending due to Project Momentum savings. The increase was partially offset by the organic Net sales decline discussed above and higher A&P spending compared to the prior year.
Current report
Battery & Lights reported Segment profit decreased by 0.9% as compared to the prior year. Organic Segment profit increased by $2.1, or 1.8%. The organic increase was driven by higher Gross margin and decreased SG&A spending due to Project Momentum savings. The increase was partially offset by the organic Net sales decline discussed above and higher A&P spending compared to the prior year.
Current report
Results for the Six Months Ended March 31, 2024
Current report
Auto Care reported segment profit increased by 18.3% as compared to the prior year. Organic segment profit increased by $6.3, or 15.8%. The increase was driven by higher organic Net sales discussed above and improved gross margin due to Project Momentum savings, as well as reduced A&P spending. This was partially offset by higher SG&A spending compared to prior year.
Current report
During the first half of fiscal 2023, the Company repurchased $16.3 of the 4.750% Senior Notes due in 2028 and $8.7 of the 4.375% Senior Notes due in 2029 at a total discount of $3.4. The Company also paid down $131.0 of the Term Loan. The extinguishment of this debt, less the write-off of associated deferred financing fees, resulted in a loss on extinguishment of debt for the three months ended March 31, 2023 of $0.9 and a gain for the six months ended March 31, 2023 of $2.0.
Current report
•Capital expenditures of $52.0 and $18.7 in the six months ended March 31, 2024 and 2023, respectively;
Current report
•Purchase of available-for-sale securities was $5.2 in the six months ended March 31, 2024, related to the purchase of bonds issued by the Argentina Central bank, named BOPREALs; and
Current report
•Proceeds from sale of available-for-sale securities were $4.2 in the six months ended March 31, 2024, related to the sale of BOPREALs.
Removed paragraphs (6)
Previous report
Currency, excluding hyperinflationary markets, benefited the quarter ended December 31, 2023 by $5.6 in Earnings before income taxes, or $0.06 per share, compared to the prior year quarter.
Previous report
•Pricing was relatively flat in the period resulting in a net decrease to organic sales of 0.4%.
Previous report
Adjusted Gross margin improvement was largely driven by Project Momentum which delivered savings of approximately $16 in the quarter. This benefit was partially offset by mix impacts, modestly increased product costs, and to a lesser extent, lower pricing.
Previous report
Advertising and sales promotion expense (A&P) was $47.0, or 6.6% of net sales, in the first fiscal quarter of 2024, as compared to $53.4, or 7.0% of Net sales, in the first fiscal quarter of 2023.
Previous report
R&D was $7.8, or 1.1% of Net sales, for the quarter ended December 31, 2023, as compared to $7.6, or 1.0% of Net sales, in the prior year comparative period.
Previous report
•Capital expenditures of $25.5 and $9.5 in the three months ended December 31, 2023 and 2022, respectively;
Reworded paragraphs (54)
Previous wording
Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Common Share (EPS). These measures exclude the impact of the costs related to restructuring activities, acquisition and integration, and the Loss/(gain) on extinguishment of debt and the December 2023 Argentina Economic Reform.
Current wording
Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Common Share (EPS). These measures exclude the impact of the costs related to restructuring and related costs, acquisition and integration, and the Loss/(gain) on extinguishment of debt and the December 2023 Argentina Economic Reform.
Previous wording
Non-GAAP Tax Rate. This is the tax rate when excluding the pre-tax impact of restructuring activities, acquisition and integration, and the loss/(gain) on extinguishment of debt and the December 2023 Argentina Economic Reform, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.
Current wording
Non-GAAP Tax Rate. This is the tax rate when excluding the pre-tax impact of restructuring and related costs, acquisition and integration, and the loss/(gain) on extinguishment of debt and the December 2023 Argentina Economic Reform, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.
Previous wording
Adjusted Selling, General & Administrative Expense (SG&A) and Gross Margin as a percent of sales. Detail for Adjusted Gross margin and Adjusted SG&A as a percent of sales are also supplemental non-GAAP measures. These measures exclude the impact of costs related to restructuring activities, and acquisition and integration.
Current wording
Adjusted Selling, General & Administrative Expense (SG&A) and Gross Margin as a percent of sales. Detail for Adjusted Gross margin and Adjusted SG&A as a percent of sales are also supplemental non-GAAP measures. These measures exclude the impact of costs related to restructuring and related costs, acquisition and integration.
Previous wording
We continue to operate in an inflationary environment where macro-economic pressures and geopolitical instability are expected to continue in fiscal year 2024. While we did not experience significant disruptions in our operations in the first quarter of fiscal year 2024, the risks of future negative impacts due to transportation, including recent transportation issues in the Red Sea, logistical or supply constraints and higher commodity costs for certain raw materials remain present, and the Company could continue to experience corresponding incremental costs and gross margin pressures.
Current wording
We continue to operate in an inflationary environment where macro-economic pressures and geopolitical instability are expected to continue in fiscal year 2024. While we did not experience significant disruptions in our operations in the first half of fiscal year 2024, the risks of future negative impacts due to transportation, including transportation issues in the Red Sea, logistical or supply constraints and higher commodity costs for certain raw materials remain present, and the Company could continue to experience corresponding incremental costs and gross margin pressures.
Previous wording
In November 2023, a new president was elected in Argentina who is implementing significant economic reform. Upon his inauguration in December 2023, the government devalued the Argentine Peso (ARS) approximately 50% over night. The Company's net sales and operating profit in Argentina were not significantly impacted based on the timing of the devaluation within the quarter. The Company had net sales of $12.3 and $13.2 and operating profit of $5.1 and $4.1 in the three months ended December 31, 2023 and December 31, 2022, respectively. The Company anticipates that Argentina's operating costs may rise quicker than the Company is able to implement future price increases to offset rising costs, which may result in a near term decline to operating profit during fiscal 2024.
Current wording
In November 2023, a new president was elected in Argentina who is implementing significant economic reform. Upon his inauguration in December 2023, the government devalued the Argentine Peso (ARS) approximately 50% over night. As a result, the Company anticipates that Argentina's operating costs may rise quicker than the Company is able to implement future price increases to offset rising costs, which may result in a near term decline to operating profit during fiscal 2024. The Company had net sales of $7.1 and $10.7 in the quarters ended March 31, 2024 and 2023, respectively, and $19.4 and $23.9 for the six months ended March 31, 2024 and 2023, respectively. The company had operating profit of $1.4 and $3.7 in the quarters ended March 31, 2024 and 2023, respectively, and $6.6 and $7.8 in the six months ended March 31, 2024 and 2023, respectively.
Previous wording
This devaluation and economic reform resulted in $21.0 of currency losses recognized in Other items, net in the three months ended December 31, 2023. This included exchange losses of $14.7 from the remeasurement of the Company's Argentina monetary assets and liabilities and $6.3 of transactional currency exchange losses on the ARS which are discussed further in Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Current wording
The December 2023 currency devaluation and economic reform resulted in $1.0 and $22.0 of currency related losses recognized in Other items, net during the quarter and six months ended March 31, 2024, respectively. The loss of $22.0 during the six months ended March 31, 2024 includes exchange losses of $14.7 from the December remeasurement of the Company's Argentina monetary assets and liabilities and $6.3 of transactional currency exchange losses on the ARS in December which are discussed further in Item 3 Quantitative and Qualitative Disclosures About Market Risk.
Previous wording
On October 27, 2023, the Company acquired certain battery manufacturing assets in Belgium from Advanced Power Solutions Belgium NV (APS) for a contractual purchase price of EUR3.5 (Belgium Acquisition). The Company also acquired certain raw materials from APS, procured by APS on the Company's behalf to facilitate the transition, for a total acquisition purchase price of $11.6 (including value added taxes). The Company assumed a building lease as part of the acquisition and acquired these assets to provide a battery manufacturing location in Europe. The Company is still finalizing the valuation of these assets and related income tax considerations, but initially no goodwill has been recognized with this acquisition.
Current wording
On October 27, 2023, the Company acquired certain battery manufacturing assets in Belgium from Advanced Power Solutions Belgium NV (APS) for a contractual purchase price of EUR3.5 (Belgium Acquisition). The Company also acquired certain raw materials from APS, procured by APS on the Company's behalf to facilitate the transition, for a total acquisition purchase price of $11.6 (including value added taxes). The Company assumed a building lease as part of the acquisition and acquired these assets to provide a battery manufacturing location in Europe.
Previous wording
The Company recorded $2.6 of acquisition and integration costs associated with the Belgium Acquisition during the three months ended December 31, 2023. The costs included $2.9 of operating costs recorded in Costs of good sold as the Company was awaiting the receipt of the raw materials procured on the Company's behalf by APS. These costs were offset by $1.0 of income recorded in Other items, net from producing inventory for APS under a transaction services agreement (TSA) entered into at the closing of the transaction. No further income is expected from this TSA. The Company also recorded $0.7 of legal and diligence fees associated with the closing of this acquisition recorded in Selling, general and administrative expenses.
Current wording
The Company recorded $0.7 and $3.3 of acquisition and integration costs associated with the Belgium Acquisition during the quarter and six months ended March 31, 2024, respectively. The costs included $2.9 of operating costs recorded in Costs of good sold for the six months ended March 31, 2024, as the Company was awaiting the receipt of the raw materials procured on the Company's behalf by APS. These costs were offset by $1.0 of income during the six months ended March 31, 2024, recorded in Other items, net, from producing inventory for APS under a transaction services agreement (TSA) entered into at the closing of the transaction. No further income is expected from this TSA. The Company also recorded $0.7 and $1.4 of legal and diligence fees associated with the closing of this acquisition recorded in Selling, general and administrative expenses during the quarter and six months ended March 31, 2024, respectively.
Previous wording
Directors approved an expansion of this program to include an additional year, which will allow for additional optimization of our battery manufacturing, distribution and global supply chain networks, further review of our global real estate footprint and the implementation of IT systems that will allow us to streamline our organization and fully execute the program.
Current wording
In November 2022, the Board of Directors approved a profit recovery program, Project Momentum, which includes an enterprise-wide restructuring focused on recovering operating margins, optimizing our manufacturing, distribution and global supply chain networks, and enhancing our organizational efficiency across the Company. In July 2023, the Company's Board of Directors approved an expansion of this program to include an additional year, which will allow for additional optimization of our battery manufacturing, distribution and global supply chain networks, further review of our global real estate footprint and the implementation of IT systems that will allow us to streamline our organization and fully execute the program.
Previous wording
Following the Belgium Acquisition in the first quarter of fiscal 2024, the Company is expanding the Project Momentum program and increasing the savings and cost expectations, partially due to the impact the expanded manufacturing capacity will have on the Company's battery network. The restructuring component of the program is now expected to generate $145 to $160 of annual pre-tax savings, and the Company estimates that it will incur one-time cash operating costs of $140 to $150, non-cash costs of approximately $20, and capital expenditures of $75 to $85 over the three year program. Additionally, along side the restructuring component of the program, Project Momentum includes continuous improvement and working capital initiatives that are designed to strengthen our balance sheet, focus on cash flow, and generate P&L savings of approximately $15 to $20 annually. Total expected pre-tax savings of Project Momentum are between $160 and $180 by the end of fiscal year 2025, with approximately $55 to $65 of those savings to be recognized in fiscal year 2024.
Current wording
Following the Belgium Acquisition in the first quarter of fiscal 2024, the Company expanded the Project Momentum program and increased the savings and cost expectations, partially due to the impact the expanded manufacturing capacity will have on the Company's battery network. The restructuring component of the program is expected to generate $145 to $160 of annual pre-tax savings, and the Company estimates that it will incur one-time cash operating costs of $140 to $150, non-cash costs of approximately $20, and capital expenditures of $75 to $85 over the three year program. Additionally, along side the restructuring component of the program, Project Momentum includes continuous improvement and working capital initiatives that are designed to strengthen our balance sheet, focus on cash flow, and generate P&L savings of approximately $15 to $20 annually. Total expected pre-tax savings of Project Momentum are between $160 and $180 by the end of fiscal year 2025, with approximately $55 to $65 of those savings to be recognized in fiscal year 2024.
Previous wording
As of December 31, 2023, the Company has realized approximately $76 of these savings from Project Momentum, with approximately $22 in fiscal year 2024. The savings were primarily within Cost of products sold and SG&A on the Consolidated (Condensed) Statements of Earnings and Comprehensive Income.
Current wording
As of March 31, 2024, the Company has realized approximately $96 of these savings from Project Momentum, with approximately $42 in fiscal year 2024. The savings were primarily within Cost of products sold and SG&A on the Consolidated (Condensed) Statements of Earnings and Comprehensive Income.
Previous wording
In the quarters ended December 31, 2023 and 2022, the total Project Momentum restructuring and related pre-tax costs were $22.4 and $6.6, respectively. The expenses primarily consisted of severance and other benefit related costs, accelerated depreciation, asset write-offs, consulting costs, IT enablement, decommissioning, relocation, and other exit related costs. These costs were reflected within Cost of products sold, SG&A and Other items, net on the Consolidated (Condensed) Statements of Earnings and Comprehensive Income.
Current wording
In the quarters ended March 31, 2024 and 2023, the total Project Momentum restructuring and related pre-tax costs were $23.4 and $7.5, respectively. For the six months ended March 31, 2024 and 2023, the total Project Momentum restructuring and related pre-tax costs were $45.8 and $14.1, respectively. The expenses primarily consisted of severance and other benefit related costs, accelerated depreciation, asset write-offs, consulting costs, IT enablement, decommissioning, relocation, and other exit related costs. These costs were reflected within Cost of products sold, SG&A and Other items, net on the Consolidated (Condensed) Statements of Earnings and Comprehensive Income.
Previous wording
Although the Company's Project Momentum restructuring costs are recorded outside of segment profit, if allocated to our reportable segments, the restructuring and related costs for the quarter ended December 31, 2023 would be incurred within the Battery & Lights segment in the amount of $20.8 and the Auto Care segment in the amount of $1.6. The Company's Project Momentum restructuring costs for the quarter ended December 31, 2022 would be incurred within the Battery & Lights segment in the amount of $5.8 and the Auto Care segment in the amount of $0.8.
Current wording
Although the Company's restructuring costs are recorded outside of segment profit, if allocated to our reportable segments, the pre-tax restructuring and related costs for the quarter and six months ended March 31, 2024 would be incurred within the Battery & Lights segment in the amounts of $20.5 and $41.2, respectively, and the Auto Care segment in the amount of $2.9 and $4.6, respectively. For the quarter and six months ended March 31, 2023, the pre-tax restructuring and related costs would have been incurred within the Battery & Lights segment in the amount of $6.8 and $12.6, respectively, and the Auto Care segment in the amount of $0.7 and $1.5, respectively.
Previous wording
Project Momentum restructuring and related costs since inception are $83.0. Refer to Note 4, Restructuring, to the Consolidated (Condensed) Financial Statements for additional discussion on the Company's restructuring costs.
Current wording
Project Momentum restructuring and related costs since inception are $106.4. Refer to Note 4, Restructuring, to the Consolidated (Condensed) Financial Statements for additional discussion on the Company's restructuring costs.
Previous wording
Energizer reported first fiscal quarter Net earnings of $1.9, or $0.03 per diluted common share, compared to Net earnings of $49.0, or $0.68 per diluted common share, in the prior year first fiscal quarter. Adjusted Diluted net earnings per common share was $0.59 for the first fiscal quarter as compared to $0.72 in the prior year quarter.
Current wording
Energizer reported second fiscal quarter Net earnings of $32.4, or $0.45 per diluted common share, compared to Net earnings of $40.0, or $0.55 per diluted common share, in the prior year second fiscal quarter. Adjusted Diluted net earnings per common share was $0.72 for the second fiscal quarter as compared to $0.64 in the prior year quarter.
Previous wording
(2) Acquisition and integration costs of $2.6 included costs of $2.9 recorded in Costs of goods sold and $0.7 recorded in SG&A, partially offset by TSA income of $1.0 recorded in Other items, net on the Consolidated (Condensed) Statement of Earnings.
Current wording
(2) Acquisition and integration costs of $0.7 were recorded in SG&A on the Consolidated (Condensed) Statement of Earnings during the quarter ended March 31, 2024. For the six months ended March 31, 2024, acquisition and integration costs of $3.3 included costs of $2.9 recorded in Costs of goods sold and $1.4 recorded in SG&A, partially offset by TSA income of $1.0 recorded in Other items, net on the Consolidated (Condensed) Statement of Earnings.
Previous wording
(3) During December 2023, a new president was inaugurated in Argentina bringing significant economic reform to the country including devaluing the Argentine Peso by 50% in the month of December. As a result of this reform and devaluation, the Company recorded $21.0 of exchange losses in Other items, net on the Consolidated (Condensed) Statement of Earnings.
Current wording
(3) During December 2023, a new president was inaugurated in Argentina bringing significant economic reform to the country including devaluing the Argentine Peso by 50% in the month of December. As a result of this reform and devaluation, the Company recorded $1.0 and $22.0 of exchange and related losses for the quarter and six months ended March 31, 2024, respectively, in Other items, net on the Consolidated (Condensed) Statement of Earnings.
Previous wording
(4) The effective tax rate for the Adjusted Net earnings and Adjusted Diluted EPS for the quarters ended December 31, 2023 and 2022 was 24.0% and 21.5%, respectively, as calculated utilizing the statutory rate for where the costs were incurred.
Current wording
(4) The effective tax rate for the Adjusted Net earnings and Adjusted Diluted EPS for the quarters ended March 31, 2024 and 2023 was 23.3% and 20.9%, respectively, and for the six months ended March 31, 2024 and 2023 was 23.6% and 21.2%, respectively, as calculated utilizing the statutory rate for where the costs were incurred.
Previous wording
Net sales were $716.6 for the first fiscal quarter of 2024, a decrease of $48.5 as compared to the prior year quarter. Organic Net sales decreased 7.4%, primarily driven by the following items:
Current wording
Net sales were $663.3 for the second fiscal quarter of 2024, a decrease of $20.8 as compared to the prior year quarter. Organic Net sales decreased 2.7%, due to the following items:
Previous wording
•The battery business experienced volume declines of approximately 7% primarily due to earlier holiday orders compared to the prior year, which benefited the fourth quarter of 2023, and weaker performance at non-tracked channels; and
Current wording
•The battery business experienced volume declines of approximately 3.9% primarily due to earlier holiday orders compared to the prior year, which benefited the fourth quarter of 2023, and weaker performance at non-tracked channels; and
Previous wording
Gross margin percentageon a reported basis for the first fiscal quarter of 2024 was 37.3%, compared to 39.0% in the prior year. Excluding restructuring costs in the current and prior year of $12.8 and $0.3, respectively, and integration costs of $2.9 in the current year, Adjusted Gross margin was 39.5% compared to 39.0% in the prior year, an increase of 50 basis points.
Current wording
Gross margin percentageon a reported basis for the second fiscal quarter of 2024 was 38.2%, compared to 37.0% in the prior year. Excluding restructuring costs in the current and prior year of $15.5 and $5.7, respectively, Adjusted Gross margin was 40.5% compared to 37.9% in the prior year, an increase of 260 basis points.
Previous wording
SG&A was $128.1 in the first fiscal quarter of 2024, or 17.9% of Net sales, as compared to $120.4, or 15.7% of Net sales, in the prior year period. Included in SG&A during the first fiscal quarter of 2024 were acquisition and integration costs of $0.7, and included in both the first fiscal quarter of 2024 and 2023 were restructuring and related costs of $9.6 and $6.3, respectively. Excluding these restructuring and related costs and acquisition and integration costs, adjusted SG&A was $117.8, or 16.4% of Net sales in the first fiscal quarter of 2024, as compared to $114.1, or 14.9% of Net sales in the prior year period. The year-over-year increase was primarily driven by higher labor and benefit costs, factoring fees and an environmental expense due to a charge related to a legacy facility that has been sold by the Company. This increase was partially offset by Project Momentum savings of approximately $6 in the quarter.
Current wording
SG&A was $122.5 in the second fiscal quarter of 2024, or 18.5% of Net sales, as compared to $118.3, or 17.3% of Net sales, in the prior year period. Included in SG&A during the second fiscal quarter of 2024 were acquisition and integration costs of $0.7, and included in the second fiscal quarter of both 2024 and 2023 were restructuring and related costs of $7.9 and $1.8, respectively. Excluding these restructuring and related costs and acquisition and integration costs, adjusted SG&A was $113.9, or 17.2% of Net sales in the second fiscal quarter of 2024, as compared to $116.5, or 17.0% of Net sales in the prior year period. The year-over-year decrease was primarily driven by savings from Project Momentum of approximately $9. This decrease was partially offset by higher environmental expense, factoring fees and travel.
Previous wording
Interest expensewas $40.7 for the first fiscal quarter of 2024 compared to $42.9 for the prior year comparative period. The lower interest expense was due to a lower average outstanding debt balance in the current year due to the Company's initiatives to pay down debt.
Current wording
Interest expensewas $38.7 for the second fiscal quarter of 2024 compared to $42.0 for the prior year comparative period. For the six months ended March 31, 2024 interest expense was $79.4 as compared to $84.9 for the prior year comparative period. The lower interest expense was due to a lower average outstanding debt balance in the current year due to the Company's initiatives to pay down debt, partially offset by higher interest rates.
Previous wording
Loss/(gain) on extinguishment of debt was a loss of $0.5 for the first fiscal quarter of 2024, and relates to the Company's early repayment of $75.0 outstanding on the term loan. The gain on extinguishment of debt of $2.9 for the first fiscal quarter of 2023 related to the Company's retirement of $25.0 of outstanding Senior Notes at a discount and the early repayment of $25.0 outstanding on the term loan.
Current wording
Loss on extinguishment of debt was $0.9 for the six months ended March 31, 2024, and relates to the Company's early repayment of $135.0 outstanding on the term loan. The gain on extinguishment of debt of $2.0 for the six months ended March 31, 2023 related to the Company's retirement of $25.0 of outstanding Senior Notes at a discount and the early repayment of $125.0 outstanding on the term loan.
Previous wording
Other items, netwas expense of $19.0 and a benefit of $1.4 for the first fiscal quarters of 2024 and 2023, respectively.
Current wording
Other items, netwas expense of $5.5 and $0.8 for the second fiscal quarters of 2024 and 2023, respectively. Other items, net was expense of $24.5 and a benefit of $0.6 for the six months ended March 31, 2024 and 2023, respectively.
Previous wording
(1) Foreign currency exchange loss includes the currency impact from the December 2023 Argentina economic reform. During December 2023, a new president wasinaugurated in Argentina bringing significant economic reform to the country including devaluing the Argentine Peso by 50% in the month of December. As a result of this reform and devaluation, the Company recorded $21.0 of exchange losses in Other items, net on the Consolidated (Condensed) Statement of Earnings.
Current wording
(1) Foreign currency exchange loss includes the currency impact from the December 2023 Argentina economic reform. During December 2023, a new president wasinaugurated in Argentina bringing significant economic reform to the country including devaluing the Argentine Peso by 50% in the month of December. As a result of this reform and devaluation, the Company recorded $21.0 of exchange losses for the six months ended March 31, 2024 in Other items, net on the Consolidated (Condensed) Statement of Earnings.
Previous wording
The effective tax rate on a year to date basis was 79.8% as compared to 21.3% in the prior year. The current year rate is driven by the charges from the December 2023 Argentina Reform which did not result in a statutory tax benefit. Excluding the impact of restructuring and related costs, acquisition and integration costs, the Loss/(gain) on extinguishment in debt and the December 2023 Argentina Economic Reform, the year to date adjusted effective tax rate was 24.0% as compared to 21.5% in the prior year. The higher current year rate is driven by the higher foreign rate differential compared to the prior year.
Current wording
The effective tax rate on a year to date basis was 33.8% as compared to 21.0% in the prior year. The current year rate is driven by the charges from the December 2023 Argentina Reform which did not result in a statutory tax benefit. Excluding the impact of restructuring and related costs, acquisition and integration costs, the Loss/(gain) on extinguishment in debt and the December 2023 Argentina Economic Reform, the year to date adjusted effective tax rate was 23.6% as compared to 21.2% in the prior year. The higher current year rate is driven by the higher foreign rate differential compared to the prior year.
Previous wording
Battery & Lights reported Net Sales decreased 8.0% as compared to the prior year period. Organic net sales decreased $60.8, or 9.1%, for the first fiscal quarter. The organic decrease was due to earlier holiday orders compared to the prior year, which benefited the fourth quarter of fiscal 2023 and weaker performance at non-tracked channels (approximately 8.0%), slight impact in pricing (approximately 0.8%) and lost distribution in international markets (approximately 0.3%).
Current wording
Battery & Lights reported Net sales decreased 6.7% as compared to the prior year period. Organic Net sales decreased $83.4, or 7.1%, compared to prior year. The organic decrease was due to earlier holiday orders compared to the prior year, which benefited the fourth quarter of fiscal 2023 and weaker performance at non-tracked channels (approximately 4.8%) and pricing declines driven by planned strategic pricing and promotional investments in the period (approximately 2.3%).
Previous wording
Auto Care reported Net Sales increase of 5.7% as compared to the prior year period, driven by an organic net sales increase of $4.5, or 4.8%. The increase was driven by the continued benefits of global pricing actions (approximately 2.4%), increased volumes from timing of refrigerant sales (approximately 1.4%) and increased distribution internationally (approximately 1.0%).
Current wording
Auto Care reported Net sales increase of 3.5% as compared to the prior year period, driven by an organic Net sales increase of $8.7, or 3.2%. The increase was driven by increased distribution globally (approximately 2.3%), increased volumes from timing of refrigerant sales (approximately 0.6%) and the net benefit of global pricing actions and promotional activity in the period (approximately 0.3%).
Previous wording
Auto Care reported segment profit decreased by 34.9% as compared to the prior year. Organic segment profit declined by $4.6, or 43.4%. The decline was driven by lower gross margin due to increased product cost, overall product mix and higher SG&A. This was partially offset by higher organic net sales and reduced A&P spending over the prior year.
Current wording
Auto Care reported segment profit increased by 37.4% as compared to the prior year. Organic segment profit increased by $10.9, or 37.1%. The increase was driven by higher organic Net sales discussed above and improved gross margin due to Project Momentum savings. This was partially offset by slightly higher A&P spending over prior year.
Previous wording
Global reported segment profit decreased 6.4% as compared to the prior year. Organic profit decrease was $11.4, or 7.7%. The organic decrease was driven by the organic net sales decline discussed above partially offset by reduced SG&A and A&P spending compared to the prior year.
Current wording
Global reported segment profit increased 0.1% as compared to the prior year. Organic profit increased $1.6, or 0.5%. The organic increase was driven by higher Gross margin and reduced SG&A and A&P spending compared to the prior year. This was partially offset by the decline in organic Net sales discussed above.
Previous wording
Battery & Lights reported segment profit decreased by 4.3% as compared to the prior year. Organic segment profit decreased by $6.8, or 4.9%, due to the organic net sales decline discussed above, partially offset by improved gross margin from Project Momentum savings and reduced SG&A and A&P spending compared to the prior year.
Current wording
Battery & Lights reported segment profit decreased by 2.7% as compared to the prior year. Organic segment profit decreased by $4.7, or 1.9%, due to the organic net sales decline discussed above, partially offset by improved gross margin from Project Momentum savings and reduced SG&A and A&P spending compared to the prior year.
Previous wording
For the quarter ended December 31, 2023, general corporate and other expenses were $29.2, an increase of $3.8 as compared to the prior year comparative period. The increase was primarily driven by higher mark to market expenses on our deferred compensation plans as well as increased stock compensation in the current year.
Current wording
For the quarter ended March 31, 2024, General corporate and other expenses were $28.3, an increase of $0.5 as compared to the prior year comparative period. For the six months ended March 31, 2024, General corporate and other expenses were $57.5, an increase of $4.3 as compared to the prior year comparative period. The increase was primarily driven by higher mark to market expenses on our deferred compensation plans as well as increased stock compensation, travel and factoring fees in the current year.
Previous wording
Cash is managed centrally with net earnings reinvested locally and working capital requirements met from existing liquid funds. At December 31, 2023, Energizer had $241.7 of cash and cash equivalents, approximately 84% of which was held outside of the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies. We manage our worldwide cash requirements by reviewing available funds among the many subsidiaries through which we conduct our business and the cost effectiveness with which those funds can be accessed. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences or be subject to regulatory capital requirements; however, those balances are generally available without legal restrictions to fund ordinary business operations.
Current wording
Cash is managed centrally with net earnings reinvested locally and working capital requirements met from existing liquid funds. At March 31, 2024, Energizer had $158.1 of cash and cash equivalents, approximately 94% of which was held outside of the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies. We manage our worldwide cash requirements by reviewing available funds among the many subsidiaries through which we conduct our business and the cost effectiveness with which those funds can be accessed. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences or be subject to regulatory capital requirements; however, those balances are generally available without legal restrictions to fund ordinary business operations.
Previous wording
Borrowings under the Term Loan require quarterly principal payments at a rate of 0.25% of the original principal balance, or $3.0. Borrowings under the 2020 Revolving Facility bear interest at a rate per annum equal to, at the option of the Company, SOFR or the Base Rate (as defined) plus the applicable margin. The Term Loan bears interest at a rate per annum equal to SOFR plus the applicable margin.
Current wording
At March 31, 2024, the Company had $841.0 outstanding on the Term Loan. Borrowings under the Term Loan require quarterly principal payments at a rate of 0.25% of the original principal balance, or $3.0. Borrowings under the 2020 Revolving Facility bear interest at a rate per annum equal to, at the option of the Company, SOFR or the Base Rate (as defined) plus the applicable margin. The Term Loan bears interest at a rate per annum equal to SOFR plus the applicable margin.
Previous wording
During the quarter ended December 31, 2023 the company pre-paid $75.0 of the Term Loan. The write-off of associated deferred financing fees resulted in a Loss on extinguishment of debt during the quarter of $0.5. Subsequent to the quarter, the Company pre-paid an additional $55.0 of the Term Loan.
Current wording
During the quarter and six months ended March 31, 2024 the company pre-paid $60.0 and $135.0, respectively, of the Term Loan. The write-off of associated deferred financing fees resulted in a Loss on extinguishment of debt during the quarter and six months ended March 31, 2024 of $0.4 and $0.9, respectively.
Previous wording
Cash flow from operating activities was $178.1 in the three months ended December 31, 2023, as compared to $161.0 in the prior year period. This change in cash flows of $17.1 was primarily driven by working capital changes, year over year, of approximately $31, partially offset by the decline in Net earnings. The working capital change of approximately $31 was primarily a result of the increased accounts receivable collections, net of trade spend, year over year, of approximately $64. This was partially offset by increased inventory, year over year, of approximately $19 and decreased accounts payable, year over year, of approximately $16 due to timing of payments.
Current wording
Cash flow from operating activities was $214.9 in the six months ended March 31, 2024, as compared to $210.2 in the prior year period. This change in cash flows of $4.7 was primarily driven by working capital changes, year over year, of approximately $31, partially offset by the decline in Net earnings excluding non-cash adjustments. The working capital change of approximately $31 was primarily a result of the increased accounts receivable collections, net of trade spend, year over year, of approximately $98 and a net increase in other current assets and liabilities of approximately $7. This was partially offset by year over year increased inventory of approximately $62 and decreased accounts payable, of approximately $12 due to timing of payments.
Previous wording
Net cash used by investing activities was $37.1 and $8.8 for the three months ended December 31, 2023 and 2022, respectively, and consisted of the following:
Current wording
Net cash used by investing activities was $64.6 and $18.0 for the six months ended March 31, 2024 and 2023, respectively, and consisted of the following:
Previous wording
•Proceeds from assets sales were $0.7 in the three months ended December 31, 2022;
Current wording
•Proceeds from assets sales were $0.7 in the six months ended March 31, 2023;
Previous wording
•Acquisitions, net of cash acquired, was an outflow of $11.6 from the purchase of battery manufacturing assets in Belgium in the quarter ended December 31, 2023.
Current wording
•Acquisitions, net of cash acquired, was an outflow of $11.6 from the purchase of battery manufacturing assets in Belgium in the first quarter of fiscal 2024;
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
SG&A was $250.6 in the six months ended March 31, 2024, or 18.2% of Net sales, as compared to $238.7, or 16.5% of Net sales, in the prior year period. Included in SG&A during the six months ended March 31, 2024 were acquisition and integration costs of $1.4, and included in both six months ended 2024 and 2023 were restructuring and related costs of $17.5 and $8.1, respectively. Excluding these restructuring and related costs and acquisition and integration costs, adjusted SG&A was $231.7, or 16.8% of Net sales in the six months ended March 31, 2024, as compared to $230.6, or 15.9% of Net sales in the prior year period. The year-over-year increase was primarily driven by higher labor and benefit costs, factoring fees, environmental expense and travel. This increase was partially offset by Project Momentum savings of approximately $15 in the period.
Current report — wording carried from elsewhere
Loss on extinguishment of debt was $0.4 for the second fiscal quarter of 2024, and relates to the Company's early repayment of $60.0 outstanding on the term loan. The loss on extinguishment of debt of $0.9 for the second fiscal quarter of 2023 related to the Company's early repayment of $100.0 outstanding on the term loan.
Current report — wording carried from elsewhere
For the six months ended March 31, 2024, cash used by financing activities consists of the following:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In November 2022, the Board of Directors approved a profit recovery program, Project Momentum, which includes an enterprise-wide restructuring focused on recovering operating margins, optimizing our manufacturing, distribution and global supply chain networks, and enhancing our organizational efficiency across the Company. In July 2023, the Company's Board of