Energizer Holdings Inc (NYSE:ENR) announced results for the fourth fiscal quarter and full fiscal year, which ended September 30, 2015. For the fourth fiscal quarter, net earnings were $23.1 million, or $0.37 per diluted share, compared to net earnings of $46.5 million, or $0.75 per diluted share, in the prior year fourth quarter. Adjusted net earnings in the fourth quarter were $38.5 million, or $0.61 per diluted share, compared to adjusted net earnings of $65.2 million, or $1.05 per diluted share. Results in the quarter were negatively affected by foreign currency impacts, the deconsolidation of Venezuela and the decline in organic net sales, principally due to the timing of holiday shipments and prior year temporary promotional shelf gains.
For the year, the Company reported a net loss of $4.0 million, or a loss of $0.06 per share, compared with net earnings of$157.3 million, or $2.53 per diluted share. Adjusted net earnings for the current fiscal year were $177.3 million, or $2.82 per diluted share, compared to $207.9 million in the prior fiscal year, or $3.35 per diluted share.
“Fiscal 2015 was a transformational year for the new Energizer. We delivered solid results while executing a very complex spin-off transaction and facing unprecedented foreign currency headwinds that had a significant impact on our top and bottom lines,” said Alan Hoskins, Chief Executive Officer. “Despite these challenges, the underlying fundamentals of the business are improving as we continue to see signs of stabilization within the battery category and we increased our value market share in the latest 52 weeks. In addition, we completed our 2013 restructuring initiatives and continue to find ways to reduce costs. I am extremely proud of the organization and confident in the direction we are headed as a stand-alone company.”
“Fourth quarter earnings were in-line with our expectations despite worsening currencies. This was a transitional quarter as we completed post-spin activities, executed our go-to-market changes and continued to realize impacts from the deconsolidation of our Venezuela operations.”
Mr. Hoskins continued, “Looking forward to Fiscal 2016, our financial outlook, on a constant currency basis, remains consistent with what we previously shared. We remain committed to our game plan and will continue to execute behind our three strategic priorities: leading with innovation, operating with excellence and driving productivity with the objective of maximizing free cash flow. I believe we are well positioned to drive long term value for our shareholders.”
On July 1, 2015, Edgewell Personal Care Company (Edgewell) completed the previously announced separation of its business into two separate independent public companies, Energizer Holdings, Inc. (Energizer) and Edgewell. As a result of the spin-off, Energizer now operates as an independent, publicly traded company. Energizer’s fourth fiscal quarter represents actual results of the stand-alone business. Results for the first nine months of fiscal 2015 as well as the prior fiscal year are based on carve out financial data. Net sales, Gross profit, Advertising & promotion (A&P) and Research & development (R&D) spending are directly attributable to our business. However, certain Selling, general, and administrative expense (SG&A), Interest expense and Spin-off and Restructuring related charges are allocated from Edgewell and not necessarily representative of Energizer’s stand-alone results or expected future results of Energizer as an independent company. The Company’s fourth fiscal quarter is our first quarter with stand-alone financial data.
The following is a summary of key fourth fiscal quarter and full fiscal year 2015 highlights. All comparisons are with the prior fiscal quarter and fiscal year unless otherwise stated. Detail on segment sales and segment profit by quarter and for the full fiscal year are highlighted in the press release attachments.
Fourth Fiscal Quarter Highlights (Unaudited)
- Net sales were $399.1 million, down 18.0%: (b)
- Organic net sales decreased 7.9%, due primarily to the timing shift of holiday deliveries and prior year temporary shelf gains;
- Unfavorable currency accounted for $33.2, or 6.8%, of the decrease;
- International go-to-market changes, including the exit from certain markets and shift to distributors, resulted in a $10.1, or 2.1% decline; and
- Change in Venezuela results, due to the deconsolidation, accounted for $5.6, or 1.2%, of the decrease.
- Gross margin percentage was 45.9%, down 230 basis points. The decline was primarily driven by unfavorable currency. Excluding the impact of currencies, change in Venezuela results and international go-to-market changes, the gross margin rate increased 140 basis points, primarily driven by continued cost reductions. (c)
- A&P spending was 8.3% of sales, an increase of 180 basis points, or $1.7 million, driven by incremental support of our brands, including the launch of EcoAdvanced. (c)
- SG&A was 26.0% of sales, inclusive of 5.8%, or approximately $23 million, primarily comprised of spin related costs and transitional items.
- Restructuring related charges were $2.8 million in the fourth fiscal quarter.
- Spin-off and spin restructuring related charges were $18.3 million in the fourth fiscal quarter.
- Pretax income of $30.1 million was negatively impacted on a quarter-over-quarter basis by currency of $18.3 million, net of hedge impact.
- Net earnings per diluted share were $0.37. (a)
- Adjusted net earnings per diluted share were $0.61. (a)
- Adjusted EBITDA was $76.4 million. (c)
- Dividend payments in the quarter were approximately $15.5 million, or $0.25 per share, representing the Company’s first payment to shareholders as a public company. (Original Source)
Shares of Energizer Holdings are down 11.39% to $35.14. ENR has a 1-year high of $144.95 and a 1-year low of $33.31. The stock’s 50-day moving average is $41.76 and its 200-day moving average is $72.45.
On the ratings front, Energizer Holdings has been the subject of a number of recent research reports. In a report issued on August 10, Deutsche Bank analyst Bill Schmitz maintained a Buy rating on ENR, with a price target of $45, which implies an upside of 13.4% from current levels. Separately, on August 7, Jefferies Co.’s Kevin Grundy maintained a Buy rating on the stock and has a price target of $47.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Bill Schmitz and Kevin Grundy have a total average return of 3.8% and -0.5% respectively. Schmitz has a success rate of 58.7% and is ranked #985 out of 3840 analysts, while Grundy has a success rate of 59.5% and is ranked #2724.
Energizer Holdings Inc is a manufacturer and marketer of primary batteries, portable lighting and personal care products in the wet shave, skin care, feminine care and infant care categories.