(Exact name of registrant as specified in its charter)
MISSOURI | 43-1863181 |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
YES: | x | NO: | o |
YES: | x | NO: | o |
ENERGIZER HOLDINGS, INC. | |||||||||||||
CONSOLIDATED STATEMENT OF EARNINGS | |||||||||||||
(Condensed) | |||||||||||||
(Dollars in millions--Unaudited) | |||||||||||||
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||
|
| 2003 |
|
| 2002 |
|
| 2003 |
|
| 2002 | ||
Net sales | $ | 594.0 | $ | 389.9 | $ | 1,529.0 | $ | 1,297.3 | |||||
Cost of products sold | 359.0 | 220.5 | 874.0 | 715.3 | |||||||||
Selling, general and administrative expense | 107.9 | 71.8 | 252.9 | 232.8 | |||||||||
Advertising and promotion expense | 90.2 | 26.8 | 164.2 | 97.2 | |||||||||
Research and development expense | 16.0 | 8.9 | 34.1 | 27.2 | |||||||||
Provisions for restructuring | - | - | - | 5.9 | |||||||||
Intellectual property rights income | (2.5 | ) | - | (8.5 | ) | - | |||||||
Interest expense | 10.2 | 4.7 | 19.3 | 16.2 | |||||||||
Other financing items, net | - | (0.7 | ) | (1.1 | ) | 0.8 | |||||||
Earnings before income taxes | 13.2 | 57.9 | 194.1 | 201.9 | |||||||||
Income tax benefit/(provision) | 4.3 | (18.1 | ) | (57.2 | ) | (71.7 | ) | ||||||
Net earnings | $ | 17.5 | $ | 39.8 | $ | 136.9 | $ | 130.2 | |||||
Basic earnings per share | $ | 0.21 | $ | 0.44 | $ | 1.59 | $ | 1.42 | |||||
Diluted earnings per share | $ | 0.20 | $ | 0.43 | $ | 1.55 | $ | 1.40 |
ENERGIZER HOLDINGS, INC. | ||||||||||
CONSOLIDATED BALANCE SHEET | ||||||||||
(Condensed) | ||||||||||
(Dollars in millions--Unaudited) | ||||||||||
June 30, | September 30, | June 30, | ||||||||
2003 |
|
| 2002 |
|
| 2002 | ||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 63.4 | $ | 33.9 | $ | 52.1 | ||||
Trade receivables, less allowance for doubtful | ||||||||||
accounts of $9.9, $6.9 and $8.6, respectively | 384.8 | 189.0 | 183.1 | |||||||
Inventories | ||||||||||
Raw materials and supplies | 62.8 | 44.5 | 42.5 | |||||||
Work in process | 149.0 | 98.6 | 112.1 | |||||||
Finished products | 281.2 | 215.9 | 192.6 | |||||||
Total Inventory | 493.0 | 359.0 | 347.2 | |||||||
Other current assets | 254.0 | 306.0 | 230.4 | |||||||
Total current assets | 1,195.2 | 887.9 | 812.8 | |||||||
Property at cost | 1,327.7 | 1,040.3 | 1,045.5 | |||||||
Accumulated depreciation | (633.5 | ) | (584.6 | ) | (584.4 | ) | ||||
694.2 | 455.7 | 461.1 | ||||||||
Other assets | 799.6 | 244.5 | 247.0 | |||||||
Total | $ | 2,689.0 | $ | 1,588.1 | $ | 1,520.9 | ||||
Liabilities and Shareholders Equity | ||||||||||
Current liabilities | ||||||||||
Current maturities of long-term debt | $ | - | $ | 15.0 | $ | 15.0 | ||||
Notes payable | 52.1 | 94.6 | 65.8 | |||||||
Accounts payable | 205.3 | 119.4 | 98.1 | |||||||
Other current liabilities | 373.1 | 305.6 | 288.0 | |||||||
Total current liabilities | 630.5 | 534.6 | 466.9 | |||||||
Long-term debt | 1,008.0 | 160.0 | 160.0 | |||||||
Other liabilities | 294.9 | 188.7 | 175.7 | |||||||
Shareholders equity | ||||||||||
Common stock | 1.0 | 1.0 | 1.0 | |||||||
Additional paid in capital | 798.6 | 789.8 | 786.4 | |||||||
Retained earnings | 336.2 | 202.4 | 147.7 | |||||||
Treasury stock | (295.4 | ) | (176.0 | ) | (105.9 | ) | ||||
Accumulated other comprehensive income | (84.8 | ) | (112.4 | ) | (110.9 | ) | ||||
Total shareholders equity | 755.6 | 704.8 | 718.3 | |||||||
Total | $ | 2,689.0 | $ | 1,588.1 | $ | 1,520.9 | ||||
See accompanying Notes to Condensed Financial Statements |
ENERGIZER HOLDINGS, INC. | |||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||
(Condensed) | |||||||
(Dollars in millions - Unaudited) | |||||||
Nine Months Ended June 30, | |||||||
2003 |
|
| 2002 | ||||
Cash flow from operations | |||||||
Net earnings | $ | 136.9 | $ | 130.2 | |||
Non-cash items included in income | 59.5 | 48.7 | |||||
Sale of accounts receivable, net | 61.0 | (36.2 | ) | ||||
Changes in assets and liabilities used in operations | 52.5 | 29.3 | |||||
Other, net | 6.0 | 3.4 | |||||
Net cash flow from operations | 315.9 | 175.4 | |||||
Cash flow from investing activities | |||||||
Property additions | (34.2 | ) | (29.9 | ) | |||
Proceeds from sale of property | 7.1 | 1.2 | |||||
Acquisition of Schick-Wilkinson Sword, net of cash acquired | (922.9 | ) | - | ||||
Other, net | - | (0.6 | ) | ||||
Net cash used by investing activities | (950.0 | ) | (29.3 | ) | |||
Cash flow from financing activities | |||||||
Net cash proceeds from issuance of long-term debt | 1,058.1 | - | |||||
Principal payments on long-term debt (including | |||||||
current maturities) | (230.0 | ) | (50.0 | ) | |||
Proceeds from acquisition bridge loan | 550.0 | - | |||||
Payment of acquisition bridge loan | (550.0 | ) | - | ||||
Net decrease in notes payable | (47.0 | ) | (45.1 | ) | |||
Treasury stock purchases | (131.4 | ) | (26.3 | ) | |||
Proceeds from issuance of common stock | 13.4 | 1.8 | |||||
Net cash provided/(used) by financing activities | 663.1 | (119.6 | ) | ||||
Effect of exchange rate changes on cash | 0.5 | 2.6 | |||||
Net increase in cash and cash equivalents | 29.5 | 29.1 | |||||
Cash and cash equivalents, beginning of period | 33.9 | 23.0 | |||||
Cash and cash equivalents, end of period | $ | 63.4 | $ | 52.1 | |||
See accompanying Notes to Condensed Financial Statements |
Acquired SWS Assets and Liabilities at March 28, 2003 | ||||
Cash | $ | 14.9 | ||
Receivables | 139.4 | |||
Inventories | 198.4 | |||
Other current assets | 23.5 | |||
Total current assets | 376.2 | |||
Property, plant and equipment | 252.1 | |||
Goodwill | 412.2 | |||
Other intangible assets | 116.4 | |||
Other assets | 4.3 | |||
Total assets acquired | 1,161.2 | |||
Accounts payable | 51.2 | |||
Other current liabilities | 87.6 | |||
Total current liabilities | 138.8 | |||
Other liabilities | 74.1 | |||
Total liabilities | 212.9 | |||
Net assets acquired | $ | 948.3 | ||
| For the nine months ended June 30, | |||||||||
For thequarter ended | ||||||||||
June 30, 2002 | 2003 |
| 2002 | |||||||
Net sales | $ | 551.9 | $ | 1,841.0 | $ | 1,762.2 | ||||
Net earnings | $ | 38.5 | $ | 170.7 | $ | 134.7 | ||||
Basic earnings per share | $ | 0.42 | $ | 1.98 | $ | 1.47 | ||||
Diluted earnings per share | $ | 0.41 | $ | 1.93 | $ | 1.45 |
For the quarter ended June 30, | For the nine months ended June 30, | ||||||||||||
2003 |
|
| 2002 |
|
| 2003 |
|
| 2002 | ||||
Net Sales | |||||||||||||
North America Battery | $ | 217.0 | $ | 231.2 | $ | 765.6 | $ | 767.3 | |||||
International Battery | 171.1 | 158.7 | 557.5 | 530.0 | |||||||||
Total Battery | 388.1 | 389.9 | 1,323.1 | 1,297.3 | |||||||||
Razors & Blades | 205.9 | - | 205.9 | - | |||||||||
Total Net Sales | $ | 594.0 | $ | 389.9 | $ | 1,529.0 | $ | 1,297.3 | |||||
For the quarter ended June 30, | For the nine months ended June 30, | ||||||||||||
2003 |
|
| 2002 |
|
| 2003 |
|
| 2002 | ||||
Profitability | |||||||||||||
North America Battery | $ | 49.6 | $ | 58.3 | $ | 206.8 | $ | 214.8 | |||||
International Battery | 26.0 | 20.3 | 87.5 | 66.7 | |||||||||
R&D Battery | (8.8 | ) | (8.9 | ) | (26.9 | ) | (27.2 | ) | |||||
Total Battery | 66.8 | 69.7 | 267.4 | 254.3 | |||||||||
Razors and Blades | 16.6 | - | 16.6 | - | |||||||||
Total segment profitability | $ | 83.4 | $ | 69.7 | $ | 284.0 | $ | 254.3 | |||||
General corporate and other expenses | (10.6 | ) | (7.8 | ) | (28.3 | ) | (26.9 | ) | |||||
Additional cost - acquisition inventory valuation | (56.2 | ) | - | (56.2 | ) | - | |||||||
Intellectual property rights income | 2.5 | - | 8.5 | - | |||||||||
Gain on Sale of Property | 5.7 | - | 5.7 | - | |||||||||
Provisions for restructuring and other related costs | - | - | - | (8.5 | ) | ||||||||
Amortization | (1.4 | ) | - | (1.4 | ) | - | |||||||
Interest and other financial items | (10.2 | ) | (4.0 | ) | (18.2 | ) | (17.0 | ) | |||||
Total earnings before income taxes | $ | 13.2 | $ | 57.9 | $ | 194.1 | $ | 201.9 | |||||
For the quarter ended June 30, | For the nine months ended June 30, | ||||||||||||
2003 |
|
| 2002 |
|
| 2003 |
|
| 2002 | ||||
Net Sales by Product Line | |||||||||||||
Alkaline Batteries | $ | 242.7 | $ | 255.4 | $ | 885.7 | $ | 887.6 | |||||
Carbon Zinc Batteries | 56.8 | 57.7 | 177.7 | 182.7 | |||||||||
Other Batteries and Lighting Products | 88.6 | 76.8 | 259.7 | 227.0 | |||||||||
Razors & Blades | 205.9 | - | 205.9 | - | |||||||||
Total Net Sales | $ | 594.0 | $ | 389.9 | $ | 1,529.0 | $ | 1,297.3 | |||||
Quarter Ended |
| Nine Months Ended |
| ||||||||||
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| June 30, |
| June 30, | |||||||||
2003 |
|
| 2002 |
|
| 2003 |
|
| 2002 | ||||
Numerator: | |||||||||||||
Net earnings for basic and dilutive earnings per share | $ | 17.5 | $ | 39.8 | $ | 136.9 | $ | 130.2 | |||||
Denominator: | |||||||||||||
Weighted-average shares for basic earnings per share | 83.9 | 91.1 | 86.3 | 91.4 | |||||||||
Effect of dilutive securities: | |||||||||||||
Stock options | 1.8 | 1.5 | 1.6 | 0.9 | |||||||||
Restricted stock equivalents | 0.7 | 0.7 | 0.7 | 0.6 | |||||||||
Total dilutive securities | 2.5 | 2.2 | 2.3 | 1.5 | |||||||||
Weighted-average shares for diluted earnings per share | 86.4 | 93.3 | 88.6 | 92.9 | |||||||||
Basic earnings per share | $ | 0.21 | $ | 0.44 | $ | 1.59 | $ | 1.42 | |||||
Diluted earnings per share | $ | 0.20 | $ | 0.43 | $ | 1.55 | $ | 1.40 | |||||
Quarter Ended | Nine Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
2003 |
|
| 2002 |
|
| 2003 |
|
| 2002 | ||||
Net earnings: | |||||||||||||
As reported | $ | 17.5 | $ | 39.8 | $ | 136.9 | $ | 130.2 | |||||
Pro forma | $ | 16.0 | $ | 37.9 | $ | 132.2 | $ | 123.7 | |||||
Basic earnings per share: | |||||||||||||
As reported | $ | 0.21 | $ | 0.44 | $ | 1.59 | $ | 1.42 | |||||
Pro forma | $ | 0.19 | $ | 0.42 | $ | 1.53 | $ | 1.35 | |||||
Diluted earnings per share: | |||||||||||||
As reported | $ | 0.20 | $ | 0.43 | $ | 1.55 | $ | 1.40 | |||||
Pro forma | $ | 0.19 | $ | 0.41 | $ | 1.49 | $ | 1.33 | |||||
Beginning |
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|
| Ending |
| |||||
|
| Balance |
|
| Provision |
|
| Activity |
|
| Balance | ||
Termination benefits | $ | 6.3 | $ | - | $ | (3.4 | ) | $ | 2.9 | ||||
Other cash costs | 1.0 | - | (0.6 | ) | 0.4 | ||||||||
Total | $ | 7.3 | $ | - | $ | (4.0 | ) | $ | 3.3 | ||||
For the quarter ended June 30, | |||||||
2003 |
|
| 2002 | ||||
Net earnings | $ | 17.5 | $ | 39.8 | |||
Other comprehensive income items: | |||||||
- Foreign currency translation adjustments | 26.9 | 17.9 | |||||
- Minimum pension liability adjustment | (0.1 | ) | - | ||||
Total comprehensive income | $ | 44.3 | $ | 57.7 | |||
For the nine months ended June 30, |
| ||||||
|
| 2003 |
|
| 2002 | ||
Net earnings | $ | 136.9 | $ | 130.2 | |||
Other comprehensive income items: | |||||||
- Foreign currency translation adjustments | 33.7 | 4.8 | |||||
- Minimum pension liability adjustment, net of taxes of $1.8 in fiscal 2003 and $0.3 in fiscal 2002 | (6.1 | ) | (0.3 | ) | |||
Total comprehensive income | $ | 164.5 | $ | 134.7 | |||
June 30, 2003 | September 30, 2002 | June 30, 2002 | ||||||||
Total outstanding accounts receivable sold to SPE | $ | 133.9 | $ | 164.6 | $ | 162.5 | ||||
Cash received by SPE from sale of receivables to a third party | 61.0 | - | 50.0 | |||||||
Subordinated retained interest | 72.9 | 164.6 | 112.5 | |||||||
Energizer's investment in SPE | 72.9 | 164.6 | 112.5 | |||||||
June 30, 2003 |
| September 30, 2002 |
|
| June 30, 2002 | |||||
Additional accounts receivable | $ | 133.9 | $ | 164.6 | $ | 162.5 | ||||
Additional notes payable | 61.0 | - | 50.0 | |||||||
Lower other current assets | 72.9 | 164.6 | 112.5 |
North American |
| International |
|
| Razors & |
|
|
| |||||
| Battery |
| Battery |
|
| Blades |
|
| Total | ||||
Balance at October 1, 2002 | $ | 24.7 | $ | 12.7 | $ | - | $ | 37.4 | |||||
Acquisition of SWS | - | - | 412.2 | 412.2 | |||||||||
Cumulative translation adjustment | - | 0.6 | 7.2 | 7.8 | |||||||||
Balance at June 30, 2003 | $ | 24.7 | $ | 13.3 | $ | 419.4 | $ | 457.4 | |||||
|
| Wtd-Average |
| ||||
|
|
|
|
| Amortization |
| |
| AmountAcquired |
|
| Period (in years) | |||
To be amortized: | |||||||
Tradenames | $ | 10.5 | 9.8 | ||||
Technology and patents | 34.3 | 11.1 | |||||
Customer-related | 10.9 | 10.0 | |||||
55.7 | |||||||
Indefinite-lived: | |||||||
Tradenames | 60.7 | ||||||
Total acquired intangible assets | $ | 116.4 | |||||
Gross |
| Accumulated |
|
|
| |||||
| Carrying Amount |
| Amortization |
|
| Net | ||||
To be amortized: | ||||||||||
Tradenames | $ | 10.7 | $ | (0.3 | ) | $ | 10.4 | |||
Technology and patents | 34.7 | (0.8 | ) | 33.9 | ||||||
Customer-related | 11.0 | (0.3 | ) | 10.7 | ||||||
56.4 | (1.4 | ) | 55.0 | |||||||
Indefinite-lived: | ||||||||||
Tradenames | 504.8 | (365.9 | ) | 138.9 | ||||||
Total intangible assets | $ | 561.2 | $ | (367.3 | ) | $ | 193.9 | |||
For the year ended September 30, 2003 | $ | 2.7 | ||
For each year ended September 30, 2004 through 2008 | 5.6 |
Note 13– Supplemental financial statement information is shown below:
June 30, |
| September 30, |
|
| June 30, |
| ||||
|
| 2003 |
|
| 2002 |
|
| 2002 | ||
Other current assets | ||||||||||
Investment in SPE | $ | 72.9 | $ | 164.6 | $ | 112.5 | ||||
Miscellaneous receivables | 47.0 | 21.3 | 15.4 | |||||||
Deferred income tax benefits | 59.2 | 56.6 | 44.9 | |||||||
Prepaid expenses | 74.8 | 63.5 | 55.7 | |||||||
Other | 0.1 | - | 1.9 | |||||||
Total other current assets | $ | 254.0 | $ | 306.0 | $ | 230.4 | ||||
Other assets | ||||||||||
Goodwill | $ | 457.4 | $ | 37.4 | $ | 37.3 | ||||
Other intangible assets | 193.9 | 73.9 | 74.4 | |||||||
Pension asset | 119.0 | 117.9 | 114.3 | |||||||
Deferred charges and other assets | 29.3 | 15.3 | 21.0 | |||||||
Total other assets | $ | 799.6 | $ | 244.5 | $ | 247.0 | ||||
Other current liabilities | ||||||||||
Accrued advertising, promotion and allowances | $ | 202.0 | $ | 141.4 | $ | 139.0 | ||||
Accrued salaries, vacations and incentive compensation | 77.9 | 69.4 | 60.7 | |||||||
Other | 93.2 | 94.8 | 88.3 | |||||||
Total other current liabilities | $ | 373.1 | $ | 305.6 | $ | 288.0 | ||||
Other non-current liabilities | ||||||||||
Pension, other retirement benefits and deferred compensation | $ | 203.3 | $ | 139.6 | $ | 148.1 | ||||
Deferred taxes | 62.0 | 31.0 | 7.4 | |||||||
Other non-current liabilities | 29.6 | 18.1 | 20.2 | |||||||
Total other non-current liabilities | $ | 294.9 | $ | 188.7 | $ | 175.7 | ||||
June 30, 2003 |
| September 30, 2002 |
|
| June 30, 2002 | |||||
Private Placement, fixed interest rates ranging from 7.8% to 8.0%, due 2005 to 2010 | $ | 160.0 | $ | 175.0 | $ | 175.0 | ||||
Private Placement, fixed interest rates ranging from 2.3% to 4.3%, due 2006 to 2013 | 375.0 | |||||||||
Private Placement, variable interest at LIBOR + 65 to 75 basis points, or currently | ||||||||||
ranging from 1.7% to 1.8%, due 2008 to 2013 | 325.0 | |||||||||
Revolving Credit Facility, variable interest rate currently 2.1%, due 2006 | 148.0 | - | - | |||||||
1,008.0 | 175.0 | 175.0 | ||||||||
Less current portion | - | 15.0 | 15.0 | |||||||
Total long-term debt | $ | 1,008.0 | $ | 160.0 | $ | 160.0 | ||||
Total |
|
| Less than 1 year |
|
| 1-3 years |
|
| 3-5 years |
|
| More than 5 years | ||||
Long-term debt, including current maturities | $ | 1,008.0 | $ | - | $ | 273.0 | $ | 120.0 | $ | 615.0 | ||||||
Notes payable | 52.1 | 52.1 | ||||||||||||||
Operating leases | 79.5 | 13.0 | 24.0 | 17.5 | 25.0 | |||||||||||
Total | $ | 1,139.6 | $ | 65.1 | $ | 297.0 | $ | 137.5 | $ | 640.0 | ||||||
10(i) | Form of Amended Change of Control Employment Agreement dated May 19, 2003* |
10(ii) | Form of Restricted Stock Equivalent Award Agreement dated May 19, 2003* |
10(iii) | Form of Non-Qualified Stock Option dated May 19, 2003* |
10(iv) | Form of Restricted Stock Equivalent Award Agreement dated May 19, 2003* |
10(v) | Form of Indemnification Agreement dated May 19, 2003* |
10(vi) | Facility Agreement dated July 25, 2003 for Energizer Asia Investments PTE, Ltd., with Citicorp Investment Bank (Singapore) Limited as Agent |
10(vii) | Revolving Credit Agreement dated as of June 27, 2003 between Energizer Holdings, Inc. and Bank One, N.A. as Administrative Agent, Citibank, N.A. as Syndication Agent, and Bank of America, N.A. as Documentation Agent |
10(viii) | Energizer Holdings, Inc. Note Purchase Agreement dated as of June 1, 2003 |
31(i) | Section 302 Certification of Chief Executive Officer |
31(ii) | Section 302 Certification of Executive Vice President and Chief Financial Officer |
32(i) | Section 1350 Certification of Chief Executive Officer |
32(ii) | Section 1350 Certification of Executive Vice President and Chief Financial Officer |
ENERGIZER HOLDINGS, INC. | ||
Registrant | ||
| | |
By: | ||
Daniel J. Sescleifer | ||
Executive Vice President andChief Financial Officer |