Nov. 3, 2009 (PR Newswire) -- ST. LOUIS, Nov. 3 /PRNewswire-FirstCall/ -- Energizer Holdings, Inc., (NYSE: ENR), today announced results of its fourth quarter and fiscal year ended September 30, 2009. Net earnings for the quarter were $37.1 million, or $0.53 per diluted share, versus net earnings of $99.1 million, or $1.67 per diluted share in the fourth fiscal quarter of 2008. Fourth quarter diluted earnings per share was negatively impacted by $0.10 per share as compared to the prior year quarter due to higher average shares outstanding. In addition, the current quarter includes the following:
-- charges related to the previously announced voluntary enhanced
retirement option (VERO) and reduction in force (RIF), and other
business realignment and integration charges of $25.8 million after-tax,
or $0.38 per diluted share;
-- an additional tax provision of $2.9 million, or $0.04 per diluted share,
and
-- an after-tax expense of $2.3 million, or $0.03 per diluted share,
related to the write-up and subsequent sale of inventory purchased in
the Edge and Skintimate shave preparation acquisition.
Last year's fourth quarter included an after-tax expense of $3.4 million, or $0.06 per diluted share, related to Playtex integration and other realignment costs and $2.9 million, or $0.05 per diluted share, of favorable foreign tax adjustments.
"Fiscal 2009 was a challenging year in which we took significant actions to fortify our businesses," said Ward Klein, Chief Executive Officer. "In the fourth quarter, we implemented restructuring efforts and focused on reducing debt so that we enter fiscal 2010 with sufficient momentum to properly support our brands and innovation pipeline. We will continue to invest in both advertising and promotion and innovation so that we can meet our mid to long-term growth objectives. This combined with an anticipated improvement in consumption as the economy slowly recovers, should allow us to return to double digit growth in net earnings and single digit growth in earnings per share in 2010."
For the current quarter, total net sales decreased $44.0 million, or 4%, to $1,079.4 million. On a constant currency basis, sales decreased $7 million, or less than 1%. Net sales in the Household Products division decreased $96.8 million, down 14%, or $72 million, down 11%, on a constant currency basis. Net sales in the Personal Care business, including $57 million from the shave preparation acquisition, increased $52.8 million, up 12%, or $64 million, up 14%, on a constant currency basis. Gross margin decreased 370 basis points due, in part, to the unfavorable impact of currency and certain inventory valuation charges related to obsolescence and the step up of inventory acquired in the shave preparation acquisition. Excluding currency and the inventory valuation charges, gross margin was 46.3%, down 160 basis points due primarily to product mix including higher margin hurricane volume in the prior year (C&D batteries), higher sales of lower margin Quattro for Women Trimmer razors in fiscal 2009 and higher product costs primarily in Personal Care. Segment profit decreased $44.9 million, or 20%, to $174.7 million. Excluding the unfavorable impact of currency of approximately $20 million, segment profit decreased approximately $25 million. General corporate and other expenses increased $41.6 million due primarily to the $38.6 million pre-tax charge related to the previously announced VERO and RIF. Interest expense and other net financing costs declined $8.3 million and $1.1 million, respectively.
On May 15, 2009, Energizer completed an equity offering of 10,925,000 shares at $49.00 per share, resulting in net proceeds of $510.2 million. In addition, on June 5, 2009, the company completed the acquisition of the shave preparation business for an aggregate purchase price of $275 million.
For the year ended September 30, 2009, net earnings were $297.8 million, or $4.72 per diluted share, compared to net earnings of $329.3 million, or $5.59 per diluted share, in the same period last year. The higher average shares outstanding as a result of the share issuance reduced diluted earnings per share by $0.34 for the year ended September 30, 2009 as compared to fiscal 2008. Included in the current year results are:
-- Charges:
-- $33.2 million, after-tax, or $0.53 per diluted share, related to the
VERO, RIF and other restructuring, business realignment and
integration charges;
-- an additional tax provision of $2.9 million, or $0.05 per diluted
share, and
-- $2.3 million, after-tax, or $0.04 per diluted share, related to the
write-up and subsequent sale of inventory purchased in the shave
preparation acquisition.
-- Income:
-- $15.2 million, after-tax, or $0.24 per diluted share, of income due
to a change in the Company's paid time off policy (PTO) in the
second quarter of fiscal 2009;
Included in the prior year results were:
-- an after-tax expense of $16.5 million, or $0.28 per diluted share,
related to the write-up and subsequent sale of inventory purchased in
the Playtex acquisition;
-- integration and other realignment costs of $13.4 million, after-tax, or
$0.22 per diluted share; and
-- a net, unfavorable income tax accrual adjustment of $1.1 million, or
$0.02 per diluted share.
Net sales for fiscal 2009 decreased $331.2 million, or 8%, to $3,999.8 million. On a constant currency basis, sales decreased $107 million, or 2%. Net sales in the Household Products division decreased $364.8 million, down 15%, or $220 million, down 9% on a constant currency basis. Net sales in the Personal Care business increased $33.6 million, up 2%, or $113.6 million, up 6%, on a constant currency basis. Excluding unfavorable currency, gross margin was 47.9% for fiscal 2009 as compared to 47.7% for fiscal 2008. For comparative purposes, the gross margin percent for both years was adjusted upward to exclude the impact of the shave preparation and the Playtex inventory write-up at acquisition in 2009 and 2008, respectively. Segment profit decreased $71.9 million, or 9%, to $739.7 million; whereas on a constant currency basis total segment profit increased $24 million, or 3%, due primarily to lower advertising and promotional (A & P) spending. General corporate and other expenses increased $16.8 million to $115.6 million as the impact of the VERO and RIF were partially offset by the change in the company's PTO policy. Interest expense declined $36.6 million while other net financing increased $10.3 million.
Household Products
Net sales for the quarter were $576.4 million, down $96.8 million versus the same quarter last year as approximately $55 million of prior year shipments due to hurricanes and early holiday shipments ahead of an announced price increase did not repeat in the current year quarter. In addition, currency was unfavorable by $25 million for the quarter, a moderation of the trend experienced throughout fiscal 2009. Absent these factors, net sales declined 2% due to continued sluggishness in the battery category across the globe, most notably in the U.S. We estimate the premium battery category declined approximately 5% to 7% in the first nine months of fiscal 2009, and this trend appears to have worsened slightly in the most recent quarter due in large part to comparisons to prior year hurricane consumption.
Segment profit was $113.7 million, down $36.5 million due to the margin impact of lower volume from the prior year comparatives as described above and approximately $17 million in unfavorable currency. Absent the currency and the margin impact of the prior year hurricane and early holiday season shipments, which were not repeated, segment profit was essentially flat as reduced spending offset the remaining negative impact of lower volumes.
For the year, net sales were $2.1 billion, down $364.8 million, or 15% including the impact of approximately $144 million of unfavorable currency. Absent currency, sales decreased $220 million, or 9% due to lower sales volume across all geographic areas, but most notably in the U.S. We estimate the premium battery category declined approximately 7% to 9 % in fiscal 2009. In addition, retailers reduced inventory levels during the year in response to the economic downturn, and as noted above, we lapped prior year hurricane and early holiday shipments during the current quarter.
Segment profit decreased $90.5 million, including approximately $76 million of unfavorable currency. Excluding the impact of the unfavorable currency, segment profit declined $14 million as lower gross margin from volume declines was significantly offset by reduced spending in A & P and overheads, and favorable pricing and product mix.
Personal Care
Net Sales for the quarter were $503.0 million, up $52.8 million, or 12% versus the same quarter last year. The most significant driver of the increase in sales was the shave preparation acquisition, which added $57 million for the quarter. This was partially offset by unfavorable currency, which negatively impacted the quarter by approximately $11 million. Excluding the impact of the shave preparation acquisition and unfavorable currency, net sales increased 2%. Wet Shave net sales, excluding the acquisition, were essentially flat as increased sales of Quattro for Women Trimmer razors and Quattro for Women replacement blades were offset by a decline in legacy system products. Skin Care sales increased 9% due to higher shipments of Wet Ones. Infant Care sales increased 8% due to growth in Diaper Genie, Cups and reusable bottles. Finally, Feminine Care sales decreased 5% as the continued strong sales growth of Sport, was more than offset by lower sales of Gentle Glide.
Segment profit for the quarter was $61.0 million, down $8.4 million or 12% versus the same quarter in the prior year. Excluding the impact of unfavorable currency of approximately $3 million, segment profit decreased $5 million, including a $4.5 million favorable impact of the shave preparation acquisition in the quarter. The decrease was due primarily to a write-down of sun care inventory due to an upcoming packaging restage and higher product costs. Lower A & P and lower overhead costs, including incremental Playtex synergies, partially offset these negative impacts.
Net sales for the fiscal year were $1,890.3 million, an increase of $33.6 million or 2%. Excluding the impact of unfavorable currency, sales increased $113.6 million, or 6%, due to the shave preparation acquisition, which added $57 million, or 3%, and higher sales of Wet Shave, Infant Care and Skin Care products partially offset by lower sales of Feminine Care.
