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|
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(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Missouri
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36-4802442
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(State or other jurisdiction of
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(I. R. S. Employer
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incorporation or organization)
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Identification No.)
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533 Maryville University Drive
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St. Louis, Missouri
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63141
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(Address of principal executive offices)
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(Zip Code)
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(314) 985-2000
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(Registrant’s telephone number, including area code)
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
|
o
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(Do not check if smaller reporting company)
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Emerging growth company
|
o
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INDEX
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Page
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PART I — FINANCIAL INFORMATION
|
|
|
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Item 1. Financial Statements (Unaudited)
|
|
|
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Consolidated Statements of Earnings and Comprehensive Income (Condensed) for the Quarter and Six Months Ended March 31, 2018 and 2017
|
|
|
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Consolidated Balance Sheets (Condensed) as of March 31, 2018 and September 30, 2017
|
|
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Consolidated Statements of Cash Flows (Condensed) for the Six Months Ended March 31, 2018 and 2017
|
|
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Notes to Consolidated (Condensed) Financial Statements
|
|
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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Item 4. Controls and Procedures
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PART II — OTHER INFORMATION
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|
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Item 1. Legal Proceedings
|
|
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Item 1A. Risk Factors
|
|
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
|
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Item 6. Exhibits
|
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SIGNATURES
|
|
|
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EXHIBIT INDEX
|
|
For the Quarter Ended March 31,
|
|
For the Six Months Ended March 31,
|
||||||||||||
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2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
$
|
374.4
|
|
|
$
|
359.0
|
|
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$
|
947.7
|
|
|
$
|
918.6
|
|
Cost of products sold
|
205.9
|
|
|
191.1
|
|
|
500.9
|
|
|
479.1
|
|
||||
Gross profit
|
168.5
|
|
|
167.9
|
|
|
446.8
|
|
|
439.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expense
|
104.2
|
|
|
92.7
|
|
|
203.4
|
|
|
177.1
|
|
||||
Advertising and sales promotion expense
|
20.9
|
|
|
16.6
|
|
|
58.2
|
|
|
50.9
|
|
||||
Research and development expense
|
5.4
|
|
|
5.1
|
|
|
10.7
|
|
|
10.9
|
|
||||
Amortization of intangible assets
|
2.8
|
|
|
3.0
|
|
|
5.6
|
|
|
5.6
|
|
||||
Spin restructuring
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(3.8
|
)
|
||||
Gain on sale of real estate
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
(15.2
|
)
|
||||
Interest expense
|
16.5
|
|
|
13.1
|
|
|
29.9
|
|
|
26.4
|
|
||||
Other items, net
|
0.9
|
|
|
(4.2
|
)
|
|
2.2
|
|
|
(5.8
|
)
|
||||
Earnings before income taxes
|
17.8
|
|
|
59.3
|
|
|
136.8
|
|
|
193.4
|
|
||||
Income tax provision
|
10.0
|
|
|
12.4
|
|
|
68.6
|
|
|
50.9
|
|
||||
Net earnings
|
$
|
7.8
|
|
|
$
|
46.9
|
|
|
$
|
68.2
|
|
|
$
|
142.5
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net earnings per share
|
$
|
0.13
|
|
|
$
|
0.76
|
|
|
$
|
1.14
|
|
|
$
|
2.31
|
|
Diluted net earnings per share
|
$
|
0.13
|
|
|
$
|
0.75
|
|
|
$
|
1.11
|
|
|
$
|
2.27
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock - Basic
|
59.7
|
|
|
61.8
|
|
|
60.0
|
|
|
61.8
|
|
||||
Weighted average shares of common stock - Diluted
|
61.1
|
|
|
62.8
|
|
|
61.3
|
|
|
62.9
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends per common share
|
$
|
0.29
|
|
|
$
|
0.275
|
|
|
$
|
0.58
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
||||||||
Statements of Comprehensive Income:
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
7.8
|
|
|
$
|
46.9
|
|
|
$
|
68.2
|
|
|
$
|
142.5
|
|
Other comprehensive income/(loss), net of tax expense/(benefit)
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
9.3
|
|
|
15.5
|
|
|
16.6
|
|
|
(16.4
|
)
|
||||
Pension activity, net of tax of $0.3 and $0.8, for the quarter and six months ended March 31, 2018, respectively, and $0.7 and $1.3 for the quarter and six months ended March 31, 2017, respectively.
|
0.6
|
|
|
0.6
|
|
|
1.8
|
|
|
4.4
|
|
||||
Deferred gain/(loss) on hedging activity, net of tax of $1.5 and $2.6 for the quarter and six months ended March 31, 2018, respectively, and ($0.6) and $3.1 for the quarter and six months ended March 31, 2017, respectively.
|
3.8
|
|
|
(2.1
|
)
|
|
6.3
|
|
|
6.1
|
|
||||
Total comprehensive income
|
$
|
21.5
|
|
|
$
|
60.9
|
|
|
$
|
92.9
|
|
|
$
|
136.6
|
|
Assets
|
March 31,
2018 |
|
September 30,
2017 |
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
490.3
|
|
|
$
|
378.0
|
|
Trade receivables, less allowance for doubtful accounts of $6.9 and $5.8, respectively
|
164.6
|
|
|
230.2
|
|
||
Inventories
|
292.6
|
|
|
317.1
|
|
||
Other current assets
|
100.3
|
|
|
94.9
|
|
||
Total current assets
|
1,047.8
|
|
|
1,020.2
|
|
||
Property, plant and equipment, net
|
171.7
|
|
|
176.5
|
|
||
Goodwill
|
230.8
|
|
|
230.0
|
|
||
Other intangible assets, net
|
217.9
|
|
|
223.8
|
|
||
Deferred tax asset
|
33.4
|
|
|
47.7
|
|
||
Other assets
|
70.8
|
|
|
125.4
|
|
||
Total assets
|
$
|
1,772.4
|
|
|
$
|
1,823.6
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
4.0
|
|
|
$
|
4.0
|
|
Notes payable
|
147.4
|
|
|
104.1
|
|
||
Accounts payable
|
166.8
|
|
|
219.3
|
|
||
Other current liabilities
|
234.1
|
|
|
254.6
|
|
||
Total current liabilities
|
552.3
|
|
|
582.0
|
|
||
Long-term debt
|
977.3
|
|
|
978.5
|
|
||
Other liabilities
|
198.1
|
|
|
178.0
|
|
||
Total liabilities
|
1,727.7
|
|
|
1,738.5
|
|
||
Shareholders' equity
|
|
|
|
||||
Common stock
|
0.6
|
|
|
0.6
|
|
||
Additional paid-in capital
|
205.4
|
|
|
196.7
|
|
||
Retained earnings
|
190.5
|
|
|
198.7
|
|
||
Treasury stock
|
(117.7
|
)
|
|
(72.1
|
)
|
||
Accumulated other comprehensive loss
|
(234.1
|
)
|
|
(238.8
|
)
|
||
Total shareholders' equity
|
44.7
|
|
|
85.1
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,772.4
|
|
|
$
|
1,823.6
|
|
|
For the Six Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash Flow from Operating Activities
|
|
|
|
||||
Net earnings
|
$
|
68.2
|
|
|
$
|
142.5
|
|
Non-cash restructuring costs
|
—
|
|
|
(2.5
|
)
|
||
Depreciation and amortization
|
22.4
|
|
|
25.8
|
|
||
Deferred income taxes
|
13.6
|
|
|
2.9
|
|
||
Share-based compensation expense
|
14.0
|
|
|
11.9
|
|
||
Gain on sale of real estate
|
—
|
|
|
(15.2
|
)
|
||
Mandatory transition tax
|
28.8
|
|
|
—
|
|
||
Non-cash items included in income, net
|
6.6
|
|
|
0.9
|
|
||
Other, net
|
(4.2
|
)
|
|
(19.5
|
)
|
||
Changes in current assets and liabilities used in operations
|
11.2
|
|
|
(22.5
|
)
|
||
Net cash from operating activities
|
160.6
|
|
|
124.3
|
|
||
|
|
|
|
||||
Cash Flow from Investing Activities
|
|
|
|
||||
Capital expenditures
|
(11.3
|
)
|
|
(12.3
|
)
|
||
Proceeds from sale of assets
|
—
|
|
|
23.1
|
|
||
Net cash (used by)/from investing activities
|
(11.3
|
)
|
|
10.8
|
|
||
|
|
|
|
||||
Cash Flow from Financing Activities
|
|
|
|
||||
Payments on debt with maturities greater than 90 days
|
(2.0
|
)
|
|
(2.0
|
)
|
||
Net increase in debt with original maturities of 90 days or less
|
43.4
|
|
|
16.0
|
|
||
Debt issuance costs
|
—
|
|
|
(0.6
|
)
|
||
Dividends paid
|
(35.0
|
)
|
|
(35.1
|
)
|
||
Common stock purchased
|
(50.0
|
)
|
|
(9.3
|
)
|
||
Taxes paid for withheld share-based payments
|
(1.8
|
)
|
|
(8.2
|
)
|
||
Net cash used by financing activities
|
(45.4
|
)
|
|
(39.2
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
8.4
|
|
|
(11.0
|
)
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
112.3
|
|
|
84.9
|
|
||
Cash and cash equivalents, beginning of period
|
378.0
|
|
|
287.3
|
|
||
Cash and cash equivalents, end of period
|
$
|
490.3
|
|
|
$
|
372.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utilized
|
|
|||||||||
|
|
October 1, 2016
|
|
Charge to Income
|
|
Cash
|
|
March 31, 2017
|
||||||||
Severance and termination related costs
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
(2.0
|
)
|
|
$
|
0.8
|
|
Contract termination costs
|
|
3.6
|
|
|
(2.5
|
)
|
|
(1.1
|
)
|
|
—
|
|
||||
Net gain on asset sales
|
|
—
|
|
|
(1.3
|
)
|
|
1.3
|
|
|
—
|
|
||||
Total
|
|
$
|
6.4
|
|
|
$
|
(3.8
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
0.8
|
|
|
For the Quarter Ended March 31,
|
|
For the Six Months Ended March 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
224.1
|
|
|
$
|
218.5
|
|
|
$
|
597.2
|
|
|
$
|
583.6
|
|
International
|
150.3
|
|
|
140.5
|
|
|
350.5
|
|
|
335.0
|
|
||||
Total net sales
|
$
|
374.4
|
|
|
$
|
359.0
|
|
|
$
|
947.7
|
|
|
$
|
918.6
|
|
Segment Profit
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
55.7
|
|
|
$
|
60.5
|
|
|
$
|
178.8
|
|
|
$
|
183.6
|
|
International
|
34.1
|
|
|
33.3
|
|
|
83.3
|
|
|
84.1
|
|
||||
Total segment profit
|
89.8
|
|
|
93.8
|
|
|
262.1
|
|
|
267.7
|
|
||||
General corporate and other expenses (1) (2)
|
(24.7
|
)
|
|
(29.5
|
)
|
|
(46.3
|
)
|
|
(46.7
|
)
|
||||
Global marketing expense (1)
|
(5.2
|
)
|
|
(4.0
|
)
|
|
(8.4
|
)
|
|
(7.0
|
)
|
||||
Research and development expense
|
(5.4
|
)
|
|
(5.1
|
)
|
|
(10.7
|
)
|
|
(10.9
|
)
|
||||
Amortization of intangible assets
|
(2.8
|
)
|
|
(3.0
|
)
|
|
(5.6
|
)
|
|
(5.6
|
)
|
||||
Acquisition and integration costs (1)
|
(16.5
|
)
|
|
(1.7
|
)
|
|
(22.2
|
)
|
|
(2.5
|
)
|
||||
Spin restructuring
|
—
|
|
|
2.5
|
|
|
—
|
|
|
3.8
|
|
||||
Gain on sale of real estate
|
—
|
|
|
15.2
|
|
|
—
|
|
|
15.2
|
|
||||
Acquisition debt commitment fee (3)
|
(2.9
|
)
|
|
—
|
|
|
(2.9
|
)
|
|
—
|
|
||||
Interest expense
|
(13.6
|
)
|
|
(13.1
|
)
|
|
(27.0
|
)
|
|
(26.4
|
)
|
||||
Other items, net (2)
|
(0.9
|
)
|
|
4.2
|
|
|
(2.2
|
)
|
|
5.8
|
|
||||
Total earnings before income taxes
|
$
|
17.8
|
|
|
$
|
59.3
|
|
|
$
|
136.8
|
|
|
$
|
193.4
|
|
|
For the Quarter Ended March 31,
|
|
For the Six Months Ended March 31,
|
||||||||||||
Net Sales
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Batteries
|
$
|
330.3
|
|
|
$
|
309.9
|
|
|
$
|
854.8
|
|
|
$
|
813.0
|
|
Other
|
44.1
|
|
|
49.1
|
|
|
92.9
|
|
|
105.6
|
|
||||
Total net sales
|
$
|
374.4
|
|
|
$
|
359.0
|
|
|
$
|
947.7
|
|
|
$
|
918.6
|
|
|
March 31, 2018
|
|
September 30, 2017
|
||||
Americas
|
$
|
489.2
|
|
|
$
|
533.9
|
|
International
|
749.4
|
|
|
698.2
|
|
||
Total segment assets
|
$
|
1,238.6
|
|
|
$
|
1,232.1
|
|
Corporate
|
85.1
|
|
|
137.7
|
|
||
Goodwill and other intangible assets
|
448.7
|
|
|
453.8
|
|
||
Total assets
|
$
|
1,772.4
|
|
|
$
|
1,823.6
|
|
|
Americas
|
|
International
|
|
Total
|
||||||
Balance at October 1, 2017
|
$
|
213.8
|
|
|
$
|
16.2
|
|
|
$
|
230.0
|
|
Cumulative translation adjustment
|
(0.1
|
)
|
|
0.9
|
|
|
0.8
|
|
|||
Balance at March 31, 2018
|
$
|
213.7
|
|
|
$
|
17.1
|
|
|
$
|
230.8
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Trademarks
|
$
|
40.1
|
|
|
$
|
4.7
|
|
|
$
|
35.4
|
|
Customer relationships
|
84.4
|
|
|
10.2
|
|
|
74.2
|
|
|||
Patents
|
34.5
|
|
|
4.5
|
|
|
30.0
|
|
|||
Non-compete
|
0.5
|
|
|
0.2
|
|
|
0.3
|
|
|||
Total intangible assets at March 31, 2018
|
$
|
159.5
|
|
|
$
|
19.6
|
|
|
$
|
139.9
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Trademarks
|
$
|
40.1
|
|
|
$
|
3.4
|
|
|
$
|
36.7
|
|
Customer relationships
|
84.4
|
|
|
7.3
|
|
|
77.1
|
|
|||
Patents
|
34.5
|
|
|
3.2
|
|
|
31.3
|
|
|||
Non-compete
|
0.5
|
|
|
0.1
|
|
|
0.4
|
|
|||
Total intangible assets at September 30, 2017
|
$
|
159.5
|
|
|
$
|
14.0
|
|
|
$
|
145.5
|
|
|
March 31, 2018
|
|
September 30, 2017
|
||||
Senior Secured Term Loan B Facility, net of discount due 2022
|
$
|
390.0
|
|
|
$
|
392.0
|
|
5.50% Senior Notes due 2025
|
600.0
|
|
|
600.0
|
|
||
Total long-term debt, including current maturities
|
990.0
|
|
|
992.0
|
|
||
Less current portion
|
(4.0
|
)
|
|
(4.0
|
)
|
||
Less unamortized debt discount and debt issuance fees
|
(8.7
|
)
|
|
(9.5
|
)
|
||
Total long-term debt
|
$
|
977.3
|
|
|
$
|
978.5
|
|
|
For the Quarter Ended March 31,
|
||||||||||||||
|
U.S.
|
|
International
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service Cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.4
|
|
Interest Cost
|
4.7
|
|
|
4.6
|
|
|
1.0
|
|
|
0.8
|
|
||||
Expected return on plan assets
|
(7.6
|
)
|
|
(8.6
|
)
|
|
(1.6
|
)
|
|
(2.0
|
)
|
||||
Amortization of unrecognized net losses
|
1.2
|
|
|
1.2
|
|
|
0.6
|
|
|
0.9
|
|
||||
Net periodic (benefit)/cost
|
$
|
(1.7
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
For the Six Months Ended March 31,
|
||||||||||||||
|
U.S.
|
|
International
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service Cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
0.8
|
|
Interest Cost
|
9.4
|
|
|
9.1
|
|
|
2.1
|
|
|
1.7
|
|
||||
Expected return on plan assets
|
(15.1
|
)
|
|
(17.2
|
)
|
|
(3.2
|
)
|
|
(4.0
|
)
|
||||
Amortization of unrecognized net losses
|
2.2
|
|
|
2.4
|
|
|
1.1
|
|
|
1.8
|
|
||||
Settlement charge
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic (benefit)/cost
|
$
|
(3.4
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
|
At March 31, 2018
|
|
For the Quarter Ended March 31, 2018
|
|
For the Six Months Ended March 31, 2018
|
||||||||||||||
Derivatives designated as Cash Flow Hedging Relationships
|
|
Estimated Fair Value
(Liability)/Asset
(1) (2)
|
|
Gain Recognized in OCI (3)
|
|
Loss Reclassified From OCI into Income
(Effective Portion) (4) (5)
|
|
(Loss)/Gain Recognized in OCI (3)
|
|
Loss Reclassified From OCI into Income (Effective Portion) (4) (5)
|
||||||||||
Foreign currency contracts
|
|
$
|
(2.3
|
)
|
|
$
|
1.6
|
|
|
$
|
(1.9
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(4.3
|
)
|
Interest rate contracts
|
|
3.9
|
|
|
5.0
|
|
|
(0.3
|
)
|
|
4.5
|
|
|
(0.8
|
)
|
|||||
Total
|
|
$
|
1.6
|
|
|
$
|
6.6
|
|
|
$
|
(2.2
|
)
|
|
$
|
3.7
|
|
|
$
|
(5.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
At September 30, 2017
|
|
For the Quarter Ended March 31, 2017
|
|
For the Six Months Ended March 31, 2017
|
||||||||||||||
Derivatives designated as Cash Flow Hedging Relationships
|
|
Estimated Fair Value
Liability (1) (2)
|
|
Loss Recognized in OCI (3)
|
|
Gain/(Loss) Reclassified From OCI into Income
(Effective Portion) (4) (5)
|
|
Gain Recognized in OCI (3)
|
|
Gain/(Loss) Reclassified From OCI into Income (Effective Portion) (4) (5)
|
||||||||||
Foreign currency contracts
|
|
$
|
(5.8
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
0.7
|
|
|
$
|
3.2
|
|
|
$
|
1.2
|
|
Interest rate contracts
|
|
(1.3
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
5.8
|
|
|
(1.4
|
)
|
|||||
Total
|
|
$
|
(7.1
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
—
|
|
|
$
|
9.0
|
|
|
$
|
(0.2
|
)
|
|
|
At March 31, 2018
|
|
For the Quarter Ended March 31, 2018
|
|
For the Six Months Ended March 31, 2018
|
||||||
|
|
Estimated Fair Value Asset
|
|
Gain Recognized in Income (1)
|
|
Gain Recognized in Income (1)
|
||||||
Foreign currency contracts
|
|
$
|
1.8
|
|
|
$
|
1.0
|
|
|
$
|
1.3
|
|
|
|
|
|
|
|
|
||||||
|
|
At September 30, 2017
|
|
For the Quarter Ended March 31, 2017
|
|
For the Six Months Ended March 31, 2017
|
||||||
|
|
Estimated Fair Value Asset
|
|
Gain Recognized in Income (1)
|
|
Loss Recognized in Income (1)
|
||||||
Foreign currency contracts
|
|
$
|
0.9
|
|
|
$
|
0.6
|
|
|
$
|
(1.3
|
)
|
Offsetting of derivative assets
|
||||||||||||||||||||||||||
|
|
|
|
At March 31, 2018
|
|
At September 30, 2017
|
||||||||||||||||||||
Description
|
|
Balance Sheet location
|
|
Gross amounts of recognized assets
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of assets presented in the Balance Sheet
|
|
Gross amounts of recognized assets
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of assets presented in the Balance Sheet
|
||||||||||||
Foreign Currency Contracts
|
|
Other Current Assets, Other Assets
|
|
$
|
2.7
|
|
|
$
|
(0.4
|
)
|
|
$
|
2.3
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Offsetting of derivative liabilities
|
||||||||||||||||||||||||||
|
|
|
|
At March 31, 2018
|
|
At September 30, 2017
|
||||||||||||||||||||
Description
|
|
Balance Sheet location
|
|
Gross amounts of recognized liabilities
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of liabilities presented in the Balance Sheet
|
|
Gross amounts of recognized liabilities
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of liabilities presented in the Balance Sheet
|
||||||||||||
Foreign Currency Contracts
|
|
Other Current Liabilities, Other Liabilities
|
|
$
|
(3.1
|
)
|
|
$
|
0.3
|
|
|
$
|
(2.8
|
)
|
|
$
|
(6.4
|
)
|
|
$
|
0.4
|
|
|
$
|
(6.0
|
)
|
|
Level 2
|
||||||
Assets/(Liabilities) at estimated fair value:
|
March 31,
2018 |
|
September 30,
2017 |
||||
Deferred Compensation
|
$
|
(39.9
|
)
|
|
$
|
(41.0
|
)
|
Derivatives - Foreign Currency Contracts
|
(0.5
|
)
|
|
(4.9
|
)
|
||
Derivatives - Interest Rate Contracts
|
3.9
|
|
|
(1.3
|
)
|
||
Exit lease liability
|
—
|
|
|
(0.3
|
)
|
||
Net Liabilities at estimated fair value
|
$
|
(36.5
|
)
|
|
$
|
(47.5
|
)
|
|
Foreign Currency Translation Adjustments
|
|
Pension Activity
|
|
Hedging Activity
|
|
Interest Rate Contracts
|
|
Total
|
||||||||||
Balance at September 30, 2017
|
$
|
(93.1
|
)
|
|
$
|
(139.4
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(238.8
|
)
|
OCI before reclassifications
|
16.6
|
|
|
(0.8
|
)
|
|
(0.7
|
)
|
|
3.1
|
|
|
18.2
|
|
|||||
Reclassifications to earnings
|
—
|
|
|
2.6
|
|
|
3.3
|
|
|
0.6
|
|
|
6.5
|
|
|||||
Reclassifications to retained earnings (1)
|
—
|
|
|
(19.9
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(20.0
|
)
|
|||||
Balance at March 31, 2018
|
$
|
(76.5
|
)
|
|
$
|
(157.5
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
1.8
|
|
|
$
|
(234.1
|
)
|
|
For the Quarter Ended March 31,
|
|
For the Six Months Ended March 31,
|
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Details of AOCI Components
|
Amount Reclassified
from AOCI (1)
|
|
Amount Reclassified
from AOCI (1)
|
Affected Line Item in the Combined Statements of Earnings
|
||||||||||||
Gains and losses on cash flow hedges
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
$
|
(1.9
|
)
|
|
$
|
0.7
|
|
|
$
|
(4.3
|
)
|
|
$
|
1.2
|
|
Other items, net
|
Interest rate contracts
|
(0.3
|
)
|
|
(0.7
|
)
|
|
(0.8
|
)
|
|
(1.4
|
)
|
Interest expense
|
||||
|
(2.2
|
)
|
|
—
|
|
|
(5.1
|
)
|
|
(0.2
|
)
|
Total before tax
|
||||
|
0.6
|
|
|
0.1
|
|
|
1.2
|
|
|
0.3
|
|
Tax benefit
|
||||
|
$
|
(1.6
|
)
|
|
$
|
0.1
|
|
|
$
|
(3.9
|
)
|
|
$
|
0.1
|
|
Net of tax
|
Amortization of defined benefit pension items
|
|
|
|
|
|
|||||||||||
Actuarial loss
|
(1.8
|
)
|
|
(2.1
|
)
|
|
(3.3
|
)
|
|
(4.1
|
)
|
(2)
|
||||
Settlement loss
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
(2)
|
||||
|
(1.8
|
)
|
|
(2.1
|
)
|
|
(3.4
|
)
|
|
(4.1
|
)
|
Total before tax
|
||||
|
0.4
|
|
|
0.7
|
|
|
0.8
|
|
|
1.3
|
|
Tax benefit
|
||||
|
$
|
(1.4
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(2.8
|
)
|
Net of tax
|
Total reclassifications to earnings
|
$
|
(3.0
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
(2.7
|
)
|
Net of tax
|
|
March 31, 2018
|
|
September 30, 2017
|
||||
Inventories
|
|
|
|
||||
Raw materials and supplies
|
$
|
42.2
|
|
|
$
|
36.6
|
|
Work in process
|
86.9
|
|
|
84.8
|
|
||
Finished products
|
163.5
|
|
|
195.7
|
|
||
Total inventories
|
$
|
292.6
|
|
|
$
|
317.1
|
|
Other Current Assets
|
|
|
|
||||
Miscellaneous receivables
|
$
|
12.0
|
|
|
$
|
13.7
|
|
Prepaid expenses
|
54.7
|
|
|
52.7
|
|
||
Value added tax collectible from customers
|
20.6
|
|
|
23.4
|
|
||
Other
|
13.0
|
|
|
5.1
|
|
||
Total other current assets
|
$
|
100.3
|
|
|
$
|
94.9
|
|
Property, Plant and Equipment
|
|
|
|
||||
Land
|
$
|
4.6
|
|
|
$
|
4.6
|
|
Buildings
|
124.1
|
|
|
122.4
|
|
||
Machinery and equipment
|
694.7
|
|
|
697.9
|
|
||
Construction in progress
|
20.8
|
|
|
19.4
|
|
||
Total gross property
|
844.2
|
|
|
844.3
|
|
||
Accumulated depreciation
|
(672.5
|
)
|
|
(667.8
|
)
|
||
Total property, plant and equipment, net
|
$
|
171.7
|
|
|
$
|
176.5
|
|
Other Current Liabilities
|
|
|
|
||||
Accrued advertising, sales promotion and allowances
|
$
|
13.0
|
|
|
$
|
21.8
|
|
Accrued trade allowances
|
38.5
|
|
|
51.1
|
|
||
Accrued salaries, vacations and incentive compensation
|
33.6
|
|
|
54.4
|
|
||
Income taxes payable
|
29.9
|
|
|
21.6
|
|
||
Other
|
119.1
|
|
|
105.7
|
|
||
Total other current liabilities
|
$
|
234.1
|
|
|
$
|
254.6
|
|
Other Liabilities
|
|
|
|
||||
Pensions and other retirement benefits
|
$
|
80.7
|
|
|
$
|
87.7
|
|
Deferred compensation
|
39.9
|
|
|
41.0
|
|
||
Mandatory transition tax
|
26.4
|
|
|
—
|
|
||
Other non-current liabilities
|
51.1
|
|
|
49.3
|
|
||
Total other liabilities
|
$
|
198.1
|
|
|
$
|
178.0
|
|
•
|
market and economic conditions;
|
•
|
market trends in the categories in which we compete;
|
•
|
our ability to close the proposed Spectrum acquisition of the global battery, lighting, and portable power business (the “Business”), which may be delayed or may not close at all due to the failure to obtain required regulatory approvals, or satisfy other closing conditions;
|
•
|
our ability to obtain financing for the Spectrum acquisition on favorable terms;
|
•
|
our ability to acquire and integrate businesses, and to realize the projected results of acquisitions, including our ability to promptly and effectively integrate the Business after the Spectrum acquisition has closed, and our ability to obtain expected cost savings, synergies and other anticipated benefits of the Spectrum acquisition within the expected timeframe;
|
•
|
the impact of the pending Spectrum acquisition on the respective business operations;
|
•
|
the success of new products and the ability to continually develop and market new products;
|
•
|
our ability to attract, retain and improve distribution with key customers;
|
•
|
our ability to continue planned advertising and other promotional spending;
|
•
|
our ability to timely execute strategic initiatives, including restructurings, and international go-to-market changes in a manner that will positively impact our financial condition and results of operations and does not disrupt our business operations;
|
•
|
the impact of strategic initiatives, including restructurings, on our relationships with employees, customers and vendors;
|
•
|
our ability to maintain and improve market share in the categories in which we operate despite heightened competitive pressure;
|
•
|
our ability to improve operations and realize cost savings;
|
•
|
the impact of foreign currency exchange rates and currency controls, as well as offsetting hedges, including the impact of the United Kingdom's referendum vote and announced intention to exit the European Union;
|
•
|
the impact of raw materials and other commodity costs;
|
•
|
the impact of legislative changes or regulatory determinations or changes by federal, state and local, and foreign authorities, including customs and tariff determinations, as well as the impact of potential changes to tax laws, policies and regulations;
|
•
|
costs and reputational damage associated with cyber-attacks or information security breaches or other events;
|
•
|
the impact of advertising and product liability claims and other litigation; and
|
•
|
compliance with debt covenants and maintenance of credit ratings as well as the impact of interest and principal repayment of our existing and any future debt.
|
|
|
For the Quarters Ended March 31,
|
||||||||||||||||||||||
(in millions, except per share data)
|
|
Earnings Before Income Taxes
|
|
Net Earnings
|
|
Diluted EPS
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Reported - GAAP
|
|
$
|
17.8
|
|
|
$
|
59.3
|
|
|
$
|
7.8
|
|
|
$
|
46.9
|
|
|
$
|
0.13
|
|
|
$
|
0.75
|
|
Impacts: Expense (Income)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Spin restructuring
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|
(0.02
|
)
|
||||||
Acquisition and integration costs (1)
|
|
19.4
|
|
|
1.7
|
|
|
14.1
|
|
|
1.1
|
|
|
0.23
|
|
|
0.01
|
|
||||||
Acquisition withholding tax (2)
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
0.09
|
|
|
—
|
|
||||||
Gain on sale of real estate
|
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
(0.24
|
)
|
||||||
One-time impact of the new U.S. tax legislation
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adjusted - Non-GAAP (3)
|
|
$
|
37.2
|
|
|
$
|
43.3
|
|
|
$
|
27.6
|
|
|
$
|
31.4
|
|
|
$
|
0.45
|
|
|
$
|
0.50
|
|
Weighted average shares - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
61.1
|
|
|
62.8
|
|
|
|
For the Six Months Ended March 31,
|
||||||||||||||||||||||
(in millions, except per share data)
|
|
Earnings Before Income Taxes
|
|
Net Earnings
|
|
Diluted EPS
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Reported - GAAP
|
|
$
|
136.8
|
|
|
$
|
193.4
|
|
|
$
|
68.2
|
|
|
$
|
142.5
|
|
|
$
|
1.11
|
|
|
$
|
2.27
|
|
Impacts: Expense (Income)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Spin restructuring
|
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|
(2.4
|
)
|
|
—
|
|
|
(0.04
|
)
|
||||||
Acquisition and integration costs (1)
|
|
25.1
|
|
|
2.5
|
|
|
18.2
|
|
|
1.6
|
|
|
0.30
|
|
|
0.02
|
|
||||||
Acquisition withholding tax (2)
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
0.09
|
|
|
—
|
|
||||||
Gain on sale of real estate
|
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
(0.24
|
)
|
||||||
One-time impact of the new U.S. tax legislation
|
|
—
|
|
|
—
|
|
|
31.2
|
|
|
—
|
|
|
0.51
|
|
|
—
|
|
||||||
Adjusted - Non-GAAP (4)
|
|
$
|
161.9
|
|
|
$
|
176.9
|
|
|
$
|
123.1
|
|
|
$
|
126.5
|
|
|
$
|
2.01
|
|
|
$
|
2.01
|
|
Weighted average shares - Diluted
|
|
|
|
|
|
|
|
|
|
61.3
|
|
|
62.9
|
|
Total Net Sales (In millions - Unaudited)
|
|
|
|
|
||||||||||
Quarter Ended March 31, 2018
|
|
|
|
|
||||||||||
Total Net Sales
|
|
Q2
|
|
% Chg
|
|
Six Months
|
|
% Chg
|
||||||
Net sales - FY '17
|
|
$
|
359.0
|
|
|
|
|
$
|
918.6
|
|
|
|
||
Organic
|
|
6.6
|
|
|
1.8
|
%
|
|
12.5
|
|
|
1.4
|
%
|
||
Impact of currency
|
|
8.8
|
|
|
2.5
|
%
|
|
16.6
|
|
|
1.8
|
%
|
||
Net sales - FY '18
|
|
$
|
374.4
|
|
|
4.3
|
%
|
|
$
|
947.7
|
|
|
3.2
|
%
|
•
|
Organic net sales were up
1.8%
in the second fiscal quarter due to the following items:
|
◦
|
Investments made for our portfolio realignment in the back half of fiscal 2017 benefited our top-line in fiscal 2018 accounting for 1.3% of the organic sales increase;
|
◦
|
Favorable pricing across several markets increased net sales by 1.2%; and
|
◦
|
The impact of inventory phasing and mix was slightly positive at 0.2%, while the May 2017 divestiture of the non-core promotional sales business acquired with the auto care acquisition negatively impacted net sales by 0.9%.
|
•
|
Favorable currency impacts were
$8.8
, or
2.5%
.
|
•
|
Organic sales increased
1.4%
primarily driven by:
|
◦
|
Favorable pricing across several markets increased net sales by 1.8%;
|
◦
|
Investments made for our portfolio realignment in the back half of fiscal 2017 benefited our top-line in fiscal 2018 accounting for 0.8% of the organic sales increase; and
|
◦
|
Partially offsetting the above increases in organic net sales was the net impact of retailer merchandising changes in the U.S. that negatively impacted net sales by 0.1%, lapping of storm volume from prior year of 0.6% and the May 2017 divestiture of the non-core promotional sales business acquired with the auto care acquisition negatively impacted net sales by 0.7%.
|
•
|
Favorable currency impacts were
$16.6
, or
1.8%
.
|
|
Quarter Ended March 31, 2018
|
|
Six Months Ended March 31, 2018
|
||||||||
|
$ Change
|
% Chg
|
|
$ Change
|
% Chg
|
|
|||||
Americas
|
|
|
|
|
|
||||||
Net sales - FY '17
|
$
|
218.5
|
|
|
|
$
|
583.6
|
|
|
||
Organic
|
6.3
|
|
2.9
|
%
|
|
13.5
|
|
2.3
|
%
|
||
Impact of currency
|
(0.7
|
)
|
(0.3
|
)%
|
|
0.1
|
|
—
|
%
|
||
Net Sales - FY '18
|
$
|
224.1
|
|
2.6
|
%
|
|
$
|
597.2
|
|
2.3
|
%
|
|
|
|
|
|
|
||||||
International
|
|
|
|
|
|
||||||
Net sales - FY '17
|
$
|
140.5
|
|
|
|
$
|
335.0
|
|
|
||
Organic
|
0.3
|
|
0.2
|
%
|
|
(1.0
|
)
|
(0.3
|
)%
|
||
Impact of currency
|
9.5
|
|
6.8
|
%
|
|
16.5
|
|
4.9
|
%
|
||
Net Sales - FY '18
|
$
|
150.3
|
|
7.0
|
%
|
|
$
|
350.5
|
|
4.6
|
%
|
|
|
|
|
|
|
||||||
Total Net Sales
|
|
|
|
|
|
||||||
Net sales - FY '17
|
$
|
359.0
|
|
|
|
$
|
918.6
|
|
|
||
Organic
|
6.6
|
|
1.8
|
%
|
|
12.5
|
|
1.4
|
%
|
||
Impact of currency
|
8.8
|
|
2.5
|
%
|
|
16.6
|
|
1.8
|
%
|
||
Net Sales - FY '18
|
$
|
374.4
|
|
4.3
|
%
|
|
$
|
947.7
|
|
3.2
|
%
|
|
Quarter Ended March 31, 2018
|
|
Six Months Ended March 31, 2018
|
||||||||
|
$ Change
|
% Chg
|
|
$ Change
|
% Chg
|
||||||
Americas
|
|
|
|
|
|
||||||
Segment Profit - FY '17
|
$
|
60.5
|
|
|
|
$
|
183.6
|
|
|
||
Organic
|
(4.2
|
)
|
(6.9
|
)%
|
|
(4.7
|
)
|
(2.6
|
)%
|
||
Impact of currency
|
(0.6
|
)
|
(1.0
|
)%
|
|
(0.1
|
)
|
—
|
%
|
||
Segment Profit - FY '18
|
$
|
55.7
|
|
(7.9
|
)%
|
|
$
|
178.8
|
|
(2.6
|
)%
|
|
|
|
|
|
|
||||||
International
|
|
|
|
|
|
||||||
Segment Profit - FY '17
|
$
|
33.3
|
|
|
|
$
|
84.1
|
|
|
||
Organic
|
(5.5
|
)
|
(16.5
|
)%
|
|
(11.5
|
)
|
(13.7
|
)%
|
||
Impact of currency
|
6.3
|
|
18.9
|
%
|
|
10.7
|
|
12.7
|
%
|
||
Segment Profit - FY '18
|
$
|
34.1
|
|
2.4
|
%
|
|
$
|
83.3
|
|
(1.0
|
)%
|
|
|
|
|
|
|
||||||
Total Segment Profit
|
|
|
|
|
|
||||||
Segment Profit - FY '17
|
$
|
93.8
|
|
|
|
$
|
267.7
|
|
|
||
Organic
|
(9.7
|
)
|
(10.3
|
)%
|
|
(16.2
|
)
|
(6.1
|
)%
|
||
Impact of currency
|
5.7
|
|
6.0
|
%
|
|
10.6
|
|
4.0
|
%
|
||
Segment Profit - FY '18
|
$
|
89.8
|
|
(4.3
|
)%
|
|
$
|
262.1
|
|
(2.1
|
)%
|
|
For the Quarter Ended March 31,
|
|
For the Six Months Ended March 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
General corporate and other expenses
|
$
|
24.7
|
|
|
$
|
29.5
|
|
|
$
|
46.3
|
|
|
$
|
46.7
|
|
Global marketing expense
|
5.2
|
|
|
4.0
|
|
|
8.4
|
|
|
7.0
|
|
||||
General corporate and global marketing expense
|
$
|
29.9
|
|
|
$
|
33.5
|
|
|
$
|
54.7
|
|
|
$
|
53.7
|
|
% of Net Sales
|
8.0
|
%
|
|
9.3
|
%
|
|
5.8
|
%
|
|
5.8
|
%
|
•
|
Capital expenditures of
$11.3
and
$12.3
in the
six months ended March 31, 2018
and 2017, respectively. These capital expenditures were funded by cash flow from operations.
|
•
|
The prior year expenditures were fully offset by proceeds from the sale of assets of
$23.1
. The proceeds were primarily related to the sale of a previously closed facility in the first quarter and office space in the second quarter.
|
•
|
Net increase in debt with original maturities of 90 days or less of
$43.4
, primarily related to borrowings on our Revolving Facility;
|
•
|
Dividends paid of
$35.0
(see below);
|
•
|
Common stock repurchases of
$50.0
at an average price of
$44.41
per share (see below);
|
•
|
Taxes paid for withheld share-based payments of
$1.8
; and
|
•
|
Payments of debt with maturities greater than 90 days of
$2.0
.
|
•
|
Net increase in debt with original maturities of 90 days or less of
$16.0
, primarily related to borrowings on our Revolving Facility;
|
•
|
Dividends paid of
$35.1
;
|
•
|
Common stock repurchases of
$9.3
;
|
•
|
Taxes paid for withheld share-based payments of
$8.2
;
|
•
|
Payments of debt with maturities greater than 90 days of
$2.0
; and
|
•
|
Debt issuance costs of $0.6.
|
|
Total
|
Less than 1 year
|
1 - 3 years
|
3 - 5 years
|
More than 5 years
|
||||||||||
Long term debt, including current maturities
|
$
|
990.0
|
|
$
|
4.0
|
|
$
|
8.0
|
|
$
|
378.0
|
|
$
|
600.0
|
|
Interest on long-term debt (1)
|
312.0
|
|
48.4
|
|
96.4
|
|
84.7
|
|
82.5
|
|
|||||
Notes payable
|
147.4
|
|
147.4
|
|
—
|
|
—
|
|
—
|
|
|||||
Operating leases
|
73.0
|
|
13.4
|
|
20.7
|
|
5.4
|
|
33.5
|
|
|||||
Pension plans (2)
|
6.5
|
|
6.5
|
|
—
|
|
—
|
|
—
|
|
|||||
Purchase obligations and other (3)
|
83.2
|
|
43.7
|
|
39.5
|
|
—
|
|
—
|
|
|||||
Mandatory transition tax
|
28.8
|
|
2.4
|
|
4.8
|
|
5.9
|
|
15.7
|
|
|||||
Total
|
$
|
1,640.9
|
|
$
|
265.8
|
|
$
|
169.4
|
|
$
|
474.0
|
|
$
|
731.7
|
|
•
|
the inability to successfully combine our respective businesses in a manner that permits us to achieve the cost savings, synergies and other anticipated benefits from the Acquisition;
|
•
|
the challenge of integrating complex systems, operating procedures, compliance programs, technology, networks and other assets of the Business in a manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies;
|
•
|
difficulties in retaining key management and other key employees;
|
•
|
the challenge of managing the expanded operations of a significantly larger and more complex company and coordinating geographically separate organizations; and
|
•
|
potential unknown liabilities, liabilities that are significantly larger than we currently anticipate, and unforeseen increased expenses or delays associated with the Acquisition, including cash costs to integrate the two businesses that may exceed the cash costs that we currently anticipate.
|
Issuer Purchases of Equity Securities
|
|||||||||
Period
|
Total Number of Shares Purchased (1)
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
|
Maximum Number That May Yet Be Purchased Under the Plans or Programs (2)
|
|||||
January 1 - January 31
|
—
|
|
$
|
—
|
|
—
|
|
4,151,623
|
|
February 1 - February 28
|
—
|
|
$
|
—
|
|
—
|
|
4,151,623
|
|
March 1 - March 31
|
202
|
|
53.53
|
|
—
|
|
4,151,623
|
|
|
Total
|
202
|
|
$
|
53.53
|
|
—
|
|
|
|
|
ENERGIZER HOLDINGS, INC.
|
|
|
|
|
|
|
|
Registrant
|
|
|
|
|
|
|
|
By:
|
/s/ Timothy W. Gorman
|
|
|
|
Timothy W. Gorman
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 2, 2018
|
|
|
Exhibit No.
|
|
Description of Exhibit
|
2.1
**
|
|
Separation and Distribution Agreement by and between Energizer Holdings, Inc. (f/k/a Energizer SpinCo, Inc.) and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated as of June 25, 2015 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed June 29, 2015).
|
|
|
|
2.2
**
|
|
Tax Matters Agreement by and between Energizer Holdings, Inc. (f/k/a Energizer SpinCo, Inc.) and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated as of June 26, 2015 (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed June 29, 2015).
|
|
|
|
2.3
**
|
|
Employee Matters Agreement by and between Energizer Holdings, Inc. (f/k/a Energizer SpinCo, Inc.) and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated as of June 25, 2015 (incorporated by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K filed June 29, 2015).
|
|
|
|
2.4
**
|
|
Transition Services Agreement by and between Energizer Holdings, Inc. (f/k/a Energizer SpinCo, Inc.) and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated as of June 25, 2015 (incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K filed June 29, 2015).
|
|
|
|
|
Contribution Agreement by and between the Company and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated June 30, 2015 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed June 30, 2015).
|
|
|
|
|
2.6
**
|
|
Agreement and Plan of Merger, dated as of May 24, 2016, by and among the Company, Energizer Reliance, Inc., Trivest Partners V, L.P., and HandStands Holding Corporation (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed May 27, 2016).
|
|
|
|
2.7
**
|
|
Acquisition Agreement, dated as of January 15, 2018, by and among the Company and Spectrum Brands Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed January 16, 2018).
|
|
|
|
|
Third Amended and Restated Articles of Incorporation of Energizer Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed January 29, 2018).
|
|
|
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Third Amended and Restated Bylaws of Energizer Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed January 29, 2018).
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10.1
*
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Amended and Restated Commitment Letter, dated February 7, 2018, by and among Energizer Holdings, Inc., Barclays Bank PLC, JPMorgan Chase Bank, N.A., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Standard Chartered Bank, Toronto-Dominion Bank, New York Branch, and TD Bank, N.A.
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31(i)
*
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Certification of periodic financial report by the Chief Executive Officer of Energizer Holdings, Inc. pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31(ii)
*
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Certification of periodic financial report by the Chief Financial Officer of Energizer Holdings, Inc. pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32(i)
*
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Certification of periodic financial report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Chief Executive Officer of Energizer Holdings, Inc.
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32(ii)
*
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Certification of periodic financial report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Chief Financial Officer of Energizer Holdings, Inc.
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101
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Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following documents formatted in eXtensible Business Reporting Language (XBRL): (i) the unaudited Consolidated Statements of Earnings and Comprehensive Income, (ii) the unaudited Consolidated Balance Sheets, (iii) the unaudited Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements (Condensed). The financial information contained in the XBRL-related documents is “unaudited” and “unreviewed.”
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BARCLAYS
745 Seventh Avenue
New York, New York 10019
|
JPMorgan Chase Bank, N.A.
383 Madison Avenue
New York, New York 10179
|
BANK OF AMERICA, N.A.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
One Bryant Park
New York, New York 10036
|
CITIGROUP GLOBAL MARKETS INC.
388 Greenwich Street
New York, New York 10013
|
MUFG
1221 Avenue of the Americas
New York, New York 10020
|
STANDARD CHARTERED BANK
1095 avenue of the Americas
New York, New York 10036
|
TORONTO-DOMINION BANK, NEW YORK BRANCH
31 West 52
nd
Street
New York, New York 10019
TD BANK, N.A.
2005 Market Street, 2
nd
Floor
Philadelphia, Pennsylvania 19103
|
•
|
senior secured credit facilities consisting of (a) a senior secured term loan B facility (the “
Term Loan Facility
”) in an aggregate principal amount equal to (1) the lesser of (x) $1,640 million and (y) such amount as would not cause the “Consolidated Secured Leverage Ratio” (as defined in the Indenture dated as of June 1, 2015 governing the 5.500% Senior Notes due 2025 issued by the Company (as successor to Energizer Spinco, Inc.) (the “
Existing Notes
”)) of the Company to exceed 2.75:1.00 (the “
Existing Notes Ratio Test
”)
minus
(2) if Notes are issued and such amount is incurred as part of the Minimum U.S. Notes Tranche, the Dollar Notes Shortfall (as defined below) and (b) a senior secured revolving credit facility in an aggregate principal amount of $400 million (the “
Revolving Credit Facility
” and, together with the Term Loan Facility, the “
Senior Secured Credit Facilities
”), having the terms set forth on Annex B;
|
•
|
(a) the issuance by the Company or any of its subsidiaries or affiliates of debt securities pursuant to a Rule 144A or other private placement (the “
Notes
”) in an aggregate principal amount of up to the sum of $720 million
plus
any amounts by which the Term Loan Facility is reduced in order to comply with the Existing Notes Ratio Test (such sum, the “
Bridge Portion
”);
provided
that at the option of the Company exercised prior to the date that is 10 business days prior to the earlier of the launch of the general syndication of the Senior Secured Credit Facilities and the launch of marketing of the Notes, up to $500 million of such Notes may be redenominated into a Euro tranche of debt securities (the “
Euro Notes Tranche
”) (it being understood and agreed that (i) in connection with the Company’s election to issue the Euro Notes Tranche, the Company shall be required to issue Notes denominated in U.S. dollars in a minimum amount of $350 million (the “
Minimum U.S. Notes Tranche
”) and Notes denominated in Euros in a minimum amount of the equivalent in Euros of $300 million (the aggregate amount by which the Notes must be increased above $720 million in order to achieve the Minimum U.S. Notes Tranche being referred to herein as the “
Dollar Notes Shortfall
”) and (ii) the exchange
|
•
|
approximately $250 million of the Company’s cash on hand.
|
1.
|
Commitments; Titles and Roles.
|
2.
|
Conditions Precedent.
|
3.
|
Syndication.
|
4.
|
Information.
|
5.
|
Indemnification and Related Matters.
|
6.
|
Assignments; Amendments.
|
7.
|
Confidentiality.
|
8.
|
Absence of Fiduciary Relationship; Affiliates; Etc.
|
9.
|
Miscellaneous.
|
Barclays Bank PLC
|
$67,500,000
|
JPMorgan Chase Bank, N.A.
|
$67,500,000
|
Bank of America, N.A.
|
$60,000,000
|
Citi
|
$60,000,000
|
The Bank of Tokyo-Mitsubishi UFJ, Ltd
|
$60,000,000
|
Standard Chartered Bank
|
$42,500,000
|
TD Bank, N.A.
|
$42,500,000
|
Total:
|
$400,000,000
|
Borrower:
|
Energizer Holdings, Inc., a Missouri corporation (the “
Company
”).
|
Guarantors:
|
All obligations under the Senior Secured Credit Facilities and certain obligations under cash management arrangements and interest rate protection or other hedging arrangements (“
Hedging Arrangements
”) entered into with an Agent, a Bank Lead Arranger or a Bank Lender (each, as defined below) or any other person that was an affiliate of any such entity at the time any such arrangements were put into place (each, a “
Lender Counterparty
”), other than any obligation of any Guarantor to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act (a “
Swap
”), if, and to the extent that, all or a portion of the guarantee by such Guarantor of such Swap (or any guarantee thereof) (determined after giving effect to any applicable keepwell, support, or other agreement for the benefit of such Guarantor and any and all applicable guarantees of such Guarantor’s Swap obligations by other Loan Parties) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) (collectively, “
Excluded Swap Obligations
”), will be unconditionally guaranteed (the “
Guarantees
”) by each of the Company’s existing and subsequently acquired or organized wholly owned domestic “material” (to be defined as set forth in the Existing Credit Agreement) restricted subsidiaries, including any such subsidiaries acquired in the Acquisition, in each case subject to exceptions consistent with the Documentation Principles and including all subsidiaries that provide guarantees in respect of the Existing Notes (collectively, the “
Guarantors
” and, together with the Company, the “
Loan Parties
”).
|
Joint Lead Bookrunners:
|
JPMorgan Chase Bank, N.A. (“
JPMCB
”), Barclays Bank PLC (“
Barclays
”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates), Citigroup Global Markets Inc. (“
CGMI
”) and MUFG (as defined below) will act as joint lead arrangers and lead bookrunners (in such capacities, the “
Bank Lead Arrangers
”) for the Senior Secured Credit Facilities and will perform the duties customarily associated with such roles.
|
Bank Administrative Agent:
|
JPMCB will act as sole and exclusive administrative agent (in such capacity, the “
Bank Administrative Agent
”) for the Bank Lenders and will perform the duties customarily associated with such role.
|
Collateral Agent:
|
JPMCB will act as sole and exclusive collateral agent (in such capacity, the “
Collateral Agent
”) for the Bank Lenders and Lender Counterparties and will perform the duties customarily associated with such role.
|
Syndication Agent:
|
Barclays, in its capacity as Syndication Agent.
|
Co-Documentation Agents:
|
Bank of America, N.A. (“
BofA
”), MUFG, Citi, Standard Chartered Bank (“
SC
”) and TD Securities (USA) LLC.
|
Bank Lenders:
|
Various banks, financial institutions and institutional lenders selected by the Bank Lead Arrangers in consultation and coordination with the Company, excluding any Disqualified Lender (each, a “
Bank Lender
”
and, collectively, the “
Bank Lenders
”).
|
Credit Facilities:
|
An aggregate of up to $2,040 million of senior secured first lien credit facilities (the “
Senior Secured Credit Facilities
”) consisting of:
|
(a)
|
a $1,640 million senior secured first lien term loan facility (the “
Term Loan Facility
”);
provided
that the Term Loan Facility shall be reduced (i) to the extent necessary to comply with the Existing Notes Ratio Test and (ii) in an amount equal to the Dollar Notes Shortfall; and
|
(b)
|
a $400 million senior secured first lien revolving credit facility (the “
Revolving Credit Facility
”).
|
Swing Line Loans:
|
At the Company’s option, a portion of the Revolving Credit Facility to be mutually agreed upon may be made available as swing line loans (“
Swing Line Loans
”) by JPMCB or another Bank Lender acceptable to the Company and the Bank Administrative Agent (the “
Swing Line Lender
”) on same-day notice. Any Swing Line Loans will reduce availability under the Revolving Credit Facility on a dollar-for-dollar basis and will bear interest at a rate per annum equal to the interest rate applicable to loans under the Revolving Credit Facility bearing interest based upon the Base Rate. Each Bank Lender under the Revolving Credit Facility will acquire an irrevocable and unconditional pro rata participation in each Swing Line Loan.
|
Letters of Credit:
|
At the Company’s option, a portion of the Revolving Credit Facility to be mutually agreed upon (the “
LC Sublimit
”) may be made available for the issuance of standby letters of credit (“
Letters of Credit
”) by JPMCB, Barclays, BofA, Citi, MUFG and TD Bank, N.A. (each, an “
Issuing Bank
”), with commitments equal to 18.9%, 18.9%, 16.8%, 16.8%, 16.8% and 11.9%, respectively, of the aggregate principal amount of the LC Sublimit. The face amount of any outstanding Letters of Credit will reduce availability under the Revolving Credit Facility on a dollar-for-dollar basis. The provisions governing the issuance and reimbursement of Letters of Credit will be consistent with the Senior Secured Credit Facilities Documentation Principles;
provided
that Barclays shall only be required to issue standby Letters of Credit.
|
Incremental Facility:
|
The Company will have the right to increase the commitments under the Revolving Credit Facility or incur incremental term loan facilities (each such increase to the Revolving Credit Facility, an “
Incremental Revolving Facility
” and each such incremental term loan facility, an “
Incremental Term Loan Facility
” and, collectively, the “
Incremental Facilities
”) in an aggregate amount not to exceed the sum of (a) the greater of (x) $600 million and (y) 100% of the Company’s Consolidated EBITDA (to be defined in a manner consistent with the Senior Secured Credit Facilities Documentation Principles) for the period of four fiscal quarters most recently ended for which financial statements have been delivered to the Bank Lenders
plus
(b) the aggregate principal amount of any voluntary prepayments of Term Loans and Incremental Term Loans incurred under clause (a) above
plus
(c) an additional amount, so long as after giving effect to the incurrence of such additional amount, the First Lien Net Leverage Ratio (to be defined in a mutually acceptable manner and net of unrestricted cash and cash equivalents, with a cap on cash netting to be agreed) would not exceed 2.75:1.00 (or, if such Incremental Facility is incurred to finance a Permitted Acquisition, would not exceed the First Lien Net Leverage Ratio immediately prior to such incurrence) on a pro forma basis on the date of incurrence and for the most recent determination period, after giving effect to such Incremental Facility and the use of proceeds thereof (assuming that all commitments under any Incremental Revolving Facility were fully
|
Purpose/Use of Proceeds:
|
On the Closing Date, (a) the proceeds of the Term Loan Facility will be used to finance in part the Acquisition (including the repayment of all existing indebtedness under the Existing Credit Agreement) and the payment of fees and expenses in connection with the Acquisition and (b) a portion of the Revolving Credit Facility will be used (i) in an amount equal to the outstanding letters of credit issued under the Existing Credit Agreement to be deemed issued under the Revolving Credit Facility on the Closing Date and (ii) in an amount to be mutually agreed upon to finance in part the Acquisition and the payment of fees and expenses in connection with the Acquisition. After the Closing Date, the Revolving Credit Facility will be available to provide for the ongoing working capital requirements of the Company and its subsidiaries and for general corporate purposes.
|
Availability:
|
The Term Loan Facility will be available in one drawing on the Closing Date. Amounts borrowed under the Term Loan Facility that are repaid or prepaid may not be reborrowed.
|
Closing Date:
|
The date on which the loans under any of the Facilities are funded and the Acquisition is consummated (the “
Closing Date
”).
|
Maturity:
|
The maturity dates of each of the Senior Secured Credit Facilities will be as follows:
|
Amortization:
|
Term Loan Facility
: The outstanding principal amount of the Term Loan Facility will be payable in equal quarterly amounts of 1.00% per annum prior to the Term Maturity Date, with the remaining balance, together with all other amounts owed with respect thereto, payable on the Term Maturity Date.
|
Interest Rate:
|
All amounts outstanding under the Facilities will bear interest, at the Company’s option, at a rate per annum equal to:
|
Default Interest:
|
Upon the occurrence and during the continuance of a payment, bankruptcy or insolvency default or event of default, interest on all overdue amounts will accrue at a rate of 2.0% per annum plus the rate otherwise applicable to such amounts and will be payable on demand (the “
Default Interest Rate
”).
|
Interest Payments:
|
Monthly for loans bearing interest based upon the Base Rate; on the last day of the applicable interest periods (which will be one, three and six months or, if agreed by all Bank Lenders, 12 months) for loans bearing interest based upon the reserve adjusted Eurodollar Rate (and at the end of every three months, in the case of interest periods longer than three months); and upon each voluntary and mandatory repayment on the principal amount repaid, in each case payable in arrears and computed
|
Commitment Fees:
|
Commitment fees will initially be equal to 0.50% per annum
times
the daily average undrawn portion of the Revolving Credit Facility (with the face amount of all Letters of Credit issued and outstanding constituting drawings for such purposes). Swing Line Loans will, for purposes of the commitment fee calculation only, not be deemed to be a utilization of the Revolving Credit Facility. Beginning on the date of the first interest period occurring after the date on which the Company delivers to the Bank Lenders financial statements for the first full fiscal quarter after the Closing Date, the commitment fee will be determined in accordance with a pricing grid based on First Lien Net Leverage Ratios to be agreed.
|
Funding Protection and Taxes:
|
Consistent with the Senior Secured Credit Facility Documentation Principles.
|
Voluntary Payments:
|
The Senior Secured Credit Facilities may be repaid in whole or in part, without premium or penalty, upon one business day’s (or, in the case of a prepayment of loans bearing interest based upon the reserve adjusted Eurodollar Rate, three business days’) prior written notice, subject to (i) reimbursement of the Bank Lenders’ breakage costs in the case of a prepayment of loans bearing interest based upon the reserve adjusted Eurodollar Rate prior to the last day of the applicable interest period and (ii) payments of an amount provided below under the caption “Soft Call on Term Loans”.
|
Soft Call on Term Loans:
|
The Company will pay a “prepayment premium” in connection with any Repricing Event (as defined in the Existing Credit Agreement) with respect to all or any portion of the loans under the Term Loan Facility that occurs on or before the 6-month anniversary of the Closing Date, in an amount not to exceed 1.0% of the principal amount of the loans under the Term Loan Facility subject to such Repricing Event.
|
Mandatory Payments:
|
The Company will be required to make the following mandatory prepayments:
|
Facilities Documentation:
|
The definitive documentation relating to the Senior Secured Credit Facilities (the “
Senior Secured Credit Facilities Documentation
”) will be negotiated in good faith, will be based on and substantially similar to that certain Credit Agreement, dated as of June 30, 2015 (as amended
|
Collateral:
|
The obligations of the Company and the Guarantors under the Senior Secured Credit Facilities, each Guarantee, any cash management arrangements with a Lender Counterparty and any Hedging Arrangements with a Lender Counterparty (other than Excluded Swap Obligations) will be secured by perfected first priority security interests in substantially all tangible and intangible assets, including without limitation substantially all personal, real and mixed property of the Company and the Guarantors (including the assets of the Acquired Business), subject to customary limitations on equity of foreign subsidiaries and other limitations and exceptions to be mutually agreed upon and consistent with the Senior Secured Credit Facilities Documentation Principles (collectively, the “
Collateral
”).
|
Warranties:
|
Substantially similar to the Existing Credit Agreement, as modified pursuant to the Senior Secured Credit Facilities Documentation Principles, consisting of: organization, requisite power and authority, qualification; due authorization; no conflicts and governmental consents; financial statements; no material adverse change; taxes; litigation, contingencies and violations; subsidiaries, equity interests and ownership; ERISA; accuracy of information; margin stock; compliance with laws; no default; assets and properties; Investment Company Act
|
Affirmative Covenants:
|
Substantially similar to the Existing Credit Agreement, as modified pursuant to the Senior Secured Credit Facilities Documentation Principles, consisting of: delivery of annual and quarterly financial statements; compliance certificates; notices of default and other adverse developments, ERISA notices and other reports, and information reasonably requested; preservation of existence and conduct of business; compliance with laws; payment of obligations; insurance; inspection rights; books and records; ERISA compliance; maintenance of property; environmental compliance; use of proceeds; further assurances and information with respect to collateral and additional guarantees and collateral; maintenance of ratings; and designation of subsidiaries.
|
Negative Covenants:
|
Substantially similar to the Existing Credit Agreement, as modified pursuant to the Senior Secured Credit Facilities Documentation Principles (including with respect to basket sizes, which are to be agreed), consisting of limitations on: indebtedness; liens; fundamental changes and business activities; investments, loans, advances, guarantees and acquisitions; asset sales; restricted payments; certain payments of indebtedness; transactions with affiliates; restrictive agreements; amendments to organizational documents and certain debt documents; changes in fiscal periods; swap agreements; and margin activities and use of proceeds. Without limiting the foregoing, the negative covenants in the Senior Secured Credit Facilities Documentation will provide for the following exceptions:
|
Financial Covenant:
|
Term Loan Facility
: None.
|
Events of Default:
|
Substantially similar to the Existing Credit Agreement, as modified pursuant to the Senior Secured Credit Facilities Documentation Principles, consisting of: non-payment; breach of covenant; breach of representation or warranty; cross-default and cross-acceleration; bankruptcy and insolvency events; judgments; invalidity of loan document or lien on Collateral; ERISA events and Change of Control.
|
of Credit on Closing Date:
|
The several obligations of each Bank Lender to make the initial loans and extensions of credit under the Senior Secured Credit Facilities on the Closing Date will be subject only to the conditions precedent referred to in the first paragraph of Section 2 of the Commitment Letter and those listed on Annex D attached to the Commitment Letter.
|
Credit after Closing Date:
|
The several obligation of each Bank Lender to make loans and other extensions of credit under the Revolving Credit Facility after the Closing Date will be subject to the following conditions: (i) prior written notice of borrowing, (ii) the accuracy of representations and warranties in all material respects (or, in each case, if such representation or warranty is qualified by or subject to materiality or a “material adverse change”, “material adverse effect” or similar term or qualification, in all respects) and (iii) the absence of any default or event of default.
|
Participations:
|
Substantially similar to the Existing Credit Agreement, as modified pursuant to the Senior Secured Credit Facilities Documentation Principles, including that each Bank Lender will be permitted to make assignments in minimum amounts set forth in the Existing Credit Agreement to other entities (but not Disqualified Lenders) approved by (x) the Bank Administrative Agent, (y) with respect to any assignments of Revolving Loans, the Issuing Banks and (z) so long as no payment or bankruptcy default has occurred and is continuing, the Company, each such approval not to be unreasonably withheld or delayed;
provided
,
however
, that (i) no approval of the Company shall be required in connection with assignments in connection with the primary syndication of the Facilities to Bank Lenders selected by the Lead Arrangers in consultation with the Company or assignments to other Bank Lenders or any of their affiliates or approved funds, (ii) the Company shall be deemed to have given consent to an assignment if it shall have failed to respond to a written notice thereof within 10 business days and (iii) no approval of the Bank Administrative Agent shall be required in connection with assignments to other Bank Lenders or any of their affiliates or approved funds. Each Lender will also have the right, without consent of the Company or the Bank Administrative Agent, to assign as security all or part of its rights under the Senior Secured Credit Facilities Documentation to any Federal Reserve Bank. Bank Lenders will be permitted to sell participations with voting rights limited to customary significant matters. An assignment fee in the amount of $3,500 will be charged with respect to each assignment unless waived by the Bank Administrative Agent in its sole discretion.
|
Required Lenders:
|
Substantially similar to the Existing Credit Agreement, as modified pursuant to the Senior Secured Credit Facilities Documentation Principles, including that amendments and waivers of the provisions of the Senior Secured Credit Facilities Documentation will require the approval of Bank Lenders holding more than 50% of the aggregate Senior Secured Credit Facilities (the “
Required Lenders
”), except that (a) the consent of each Bank Lender directly and adversely affected thereby will also be required with respect to (i) increases in commitment amount of such Bank Lender, (ii) reductions of principal, interest (other than default interest), or fees payable to such Bank Lender, (iii) extensions of scheduled maturities or times for payment of amounts payable to such Bank Lender and (iv) changes in certain pro rata provisions and (b) the consent of each Bank Lender shall be required with respect to (i) releases of all or substantially all of the Collateral or the release of all or substantially all of the value of any guaranties (other than with respect to a sale permitted under the Senior Secured Credit Facilities Documentation) and (ii) the definition of Required Lenders or other voting provisions. Notwithstanding the foregoing, (i) only Bank Lenders holding at least a majority of the Revolving Credit Facility (the “
Required Revolving Lenders
”) will have the ability to amend the Financial Covenant, waive a breach of the Financial Covenant or accelerate the Revolving Credit Facility upon a breach of the Financial Covenant and (ii) a breach of the Financial Covenant will not constitute an Event of Default with respect to the Term Loan Facility or trigger a cross-default under the Term Loan Facility until the date on which the Revolving Credit Facility has been accelerated and terminated by the Required Revolving Lenders in accordance with the terms of the Revolving Credit Facility.
|
Indemnity and Expenses:
|
Substantially similar to the Existing Credit Agreement, as modified pursuant to the Senior Secured Credit Facilities Documentation Principles, including that the Bank Administrative Agent, the Bank Lead Arrangers and the Bank Lenders (and their affiliates and their respective officers, directors, employees, advisors and agents) will have no liability to the Company, and will be indemnified and held harmless against, any loss, liability, cost or expense incurred in respect of the Senior Secured Credit Facilities or the use or the proposed use of proceeds thereof (except to the extent resulting from the gross negligence, bad faith or willful misconduct of the indemnified party).
|
Jurisdiction:
|
New York.
|
Bank Administrative Agent:
|
Davis Polk & Wardwell LLP.
|
Company:
|
Energizer Holdings, Inc. (the “
Company
”).
|
Guarantors:
|
Each subsidiary of the Company that is or is required to be a guarantor under the Senior Secured Credit Facilities (as defined in Annex B to the Commitment Letter) (the “
Guarantors
”) will guarantee (the “
Guarantee
”) all obligations of the Company under the Bridge Facility.
|
Joint Bookrunners:
|
Barclays Bank PLC (“
Barclays
”), JPMorgan Chase Bank, N.A. (“
JPMCB
”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates), Citigroup Global Markets Inc. and MUFG (as defined below) will act as lead arrangers and lead bookrunners (in such capacities, the “
Bridge Lead Arrangers
”) for the Bridge Facility and will perform the duties customarily associated with such roles.
|
Bridge Administrative Agent:
|
Barclays, in its capacity as Administrative Agent (the “
Bridge Administrative Agent
” and, together with the Bank Administrative Agent and the Collateral Agent, the “
Agents
”).
|
Bridge Syndication Agent:
|
JPMCB.
|
Bridge Co-Documentation Agents:
|
Bank of America, MUFG, Citi, Standard Chartered Bank and TD Securities (USA) LLC.
|
Bridge Lenders:
|
A syndicate of financial institutions selected by the Bridge Lead Arrangers in consultation and coordination with the Company, excluding any Disqualified Lenders (each, a “
Bridge Lender
” and, collectively, the “
Bridge Lenders
”).
|
Amount of Bridge Loans:
|
Up to $720 million
plus
any amounts by which the Term Loan Facility is reduced in order to comply with the Existing Notes Ratio Test in aggregate principal amount of senior unsecured increasing
|
Closing Date:
|
The date on which Bridge Loans are made and the Acquisition is consummated (the “
Bridge Closing Date
”).
|
Ranking:
|
The Bridge Loans, the Guarantees and all obligations with respect thereto will be senior unsecured obligations and rank
pari passu
in right of payment with all of the Company’s and the Guarantors’ existing and future senior obligations (including all obligations under the Senior Secured Credit Facilities).
|
Security:
|
None.
|
Maturity:
|
The Bridge Loans will mature on the first anniversary of the Bridge Closing Date (the “
Conversion Date
”);
provided
that on the Conversion Date, so long as there is no payment or bankruptcy default and the Conversion Fee (as defined in the Facilities Fee Letter) has been paid, the Bridge Loans will automatically convert into senior unsecured term loans maturing on the eighth anniversary of the Closing Date (the “
Rollover Loans
”). At any time and from time to time, on or after the Conversion Date, upon reasonable prior written notice and in a minimum principal amount of at least $150.0 million, the Rollover Loans may be exchanged (each such exchange, an “
Exchange
”), in whole or in part, at the option of the applicable Bridge Lender or Bridge Lenders, for senior unsecured exchange notes (the “
Exchange Notes
”), in a principal amount equal to the principal amount of the Rollover Loans so exchanged and having the same maturity date as the Rollover Loans so exchanged.
|
Demand Failure Event:
|
Any failure to comply with the terms of a Bridge Takeout Notice (as defined in the Facilities Fee Letter) for any reason will be
|
Interest Rate:
|
Until the earlier of (i) the Conversion Date or (ii) the occurrence of a Demand Failure Event, the Bridge Loans will bear interest at a floating rate, reset quarterly, as follows: (x) for the first three-month period commencing on the Bridge Closing Date, the Bridge Loans will bear interest at a rate
per annum
equal to the reserve adjusted Eurodollar Rate (subject to a reserve adjusted Eurodollar Rate Floor of 1.00% per annum), plus 500 basis points (collectively, the “
Bridge LIBOR Rate
”) and (y) thereafter, interest on the Bridge Loans will be payable at a floating
per annum
rate equal to the interest rate applicable during the prior three-month period, in each case plus the Bridge Spread, reset at the beginning of each subsequent three-month period. The “
Bridge Spread
” will initially be 50 basis points (commencing three months after the Bridge Closing Date) and will increase by an additional 50 basis points every three months thereafter. Notwithstanding the foregoing, at no time will the per annum interest rate on the Bridge Loans exceed the Total Cap (as defined in the Facilities Fee Letter) then in effect (plus default interest, if any).
|
Funding Protection:
|
The Bridge Facility Documentation will include funding protection provisions substantially similar to those provisions contained in the Senior Secured Credit Facilities.
|
Mandatory Prepayment:
|
Prior to the Conversion Date and to the extent permitted by the Senior Secured Credit Facilities, 100% of the net proceeds to the Company, or any of its subsidiaries (including the Acquired Business and its subsidiaries) from (a) any direct or indirect public offering or private placement of any debt or equity or equity-linked securities (other than issuances pursuant to employee or director compensation plans or arrangements), (b) any future bank borrowings (except borrowings under the Senior Secured Credit Facilities or other debt to fund working capital in the ordinary course) and (c) subject to certain ordinary course exceptions and reinvestment rights, any future asset sales or receipt of insurance proceeds, will be used to repay the Bridge Loans, in each case at 100% of the principal amount of the Bridge Loans prepaid plus accrued interest to the date of prepayment. Mandatory prepayments of the Bridge Loans will be applied ratably among the outstanding Bridge Loans. Any proceeds from the sale or other placement of Notes or other Takeout Notes funded or purchased by a Bridge Lender or one or more of its affiliates will be applied, first, to refinance the Bridge Loans held at that time by such Bridge Lender, and second, in accordance with the pro rata provisions otherwise applicable to prepayments.
|
Change of Control:
|
Upon the occurrence of a Change of Control (as defined in the Existing Indenture), the Company will be required to prepay in full all outstanding Bridge Loans at par plus accrued interest to the date of prepayment. Prior to making any such prepayment, the Company
|
Voluntary Prepayment:
|
Prior to the Conversion Date, Bridge Loans may be prepaid, in whole or in part, at the option of the Company, at any time (except as provided below) without premium or penalty, upon five business days’ written notice, such prepayment to be made at par plus accrued interest.
|
Bridge Facility Documentation:
|
The definitive documentation for the Bridge Facility (the “
Bridge Facility Documentation
”) will be negotiated in good faith, will contain the terms and conditions set forth in this Annex C and, to the extent not provided for herein, will be based on (i) the terms of the Senior Secured Credit Facilities, with customary changes to reflect the interim nature of the Bridge Facility and the fact that the Bridge Facility is unsecured and (ii) as and to the extent explicitly indicated below, the Indenture governing the Existing Notes (the “
Existing Indenture
”), and will take into account the operational and strategic requirements of the Company and its subsidiaries (after giving effect to the Acquisition and the other transactions contemplated by the Commitment Letter) in light of their capitalization, size, business, industry, matters disclosed in the Acquisition Agreement and the Company’s proposed business plan (collectively, the “
Bridge Documentation Principles
” and, together with the Senior Secured Credit Facilities Documentation Principles, the “
Documentation Principles
”).
|
Representations and Warranties:
|
The Bridge Facility Documentation will contain representations and warranties consistent with the Senior Secured Credit Facilities with changes as are usual and customary for financings of this kind, consistent with the Bridge Documentation Principles.
|
Covenants:
|
The Bridge Facility Documentation will contain the following covenants: (a) affirmative covenants consistent with the Senior Secured Credit Facilities with changes as are usual and customary for financings of this kind, consistent with the Bridge Documentation Principles; (b) incurrence-based negative covenants that are usual and customary for publicly traded high-yield debt securities, consistent with the Existing Indenture;
provided
that prior to the first anniversary of the Bridge Closing Date, the restricted payments, liens and debt incurrence covenants in the Bridge Facility Documentation will be more restrictive than the Existing Indenture in a manner to be agreed. There will not be any financial maintenance covenants in the Bridge Facility Documentation.
|
Events of Default:
|
The Bridge Facility Documentation will contain such events of default as are consistent with the Senior Secured Credit Facilities (other than with respect to change of control), consistent with the Bridge Documentation Principles.
|
Borrowing:
|
The several obligations of the Bridge Lenders to make, or cause one of their respective affiliates to make, the Bridge Loans will be subject only to the conditions precedent referred to in the first paragraph of Section 2 of the Commitment Letter and those listed on Annex D attached to the Commitment Letter.
|
Assignments and Participations
:
|
Subject to the prior notification of the Bridge Administrative Agent, each of the Bridge Lenders may assign all or (subject to minimum assignment amount requirements) any part of its Bridge Loans to its affiliates (other than natural persons) or one or more banks, financial institutions or other entities that are “Eligible Assignees,” as defined in the Bridge Facility Documentation, other than Disqualified Lenders (the list of which will be made available to all Bridge Lenders).
|
Requisite Lenders:
|
Bridge Lenders holding at least a majority of total Bridge Loans, with certain amendments requiring the consent of Bridge Lenders holding a greater percentage (or all) of the total Bridge Loans.
|
Indemnity and Expenses:
|
The Bridge Facility Documentation will provide customary and appropriate provisions relating to expense reimbursement, indemnity and related matters as are consistent with the Senior Secured Credit Facilities and the Bridge Documentation Principles.
|
Governing Law and Jurisdiction:
|
New York.
|
Administrative Agent:
|
Davis Polk & Wardwell LLP.
|
Final Maturity:
|
Same as the Bridge Loans.
|
Interest Rate:
|
Each Exchange Note will bear interest at a fixed rate equal to the Total Cap then in effect (plus default interest, if any). Interest will be payable semiannually in arrears.
|
Optional Redemption:
|
The Exchange Notes may be redeemed, in whole or in part, at the option of the Company, at any time upon not less than 30 nor more than 60 days’ prior written notice at par plus accrued interest to the date of repayment plus the Applicable Premium. The “
Applicable Premium
” will be (i) a make-whole premium based on the applicable treasury rate plus 50 basis points prior to the third anniversary of the Bridge Closing Date and (ii) 50% of the Total Cap from and including the third anniversary of the Bridge Closing Date to but excluding the fourth anniversary of the Bridge Closing Date, and then declining to 25% of the Total Cap on the fourth anniversary of the Bridge Closing Date and to zero on the fifth anniversary of the Bridge Closing Date.
|
Exchange Notes:
|
Substantially similar to the Existing Notes.
|
Modification:
|
Substantially similar to the Existing Notes.
|
Change of Control:
|
Substantially similar to the Existing Notes, at 101%.
|
Covenants:
|
The Indenture will include covenants customary for publicly traded high yield debt securities, consistent with the Existing Indenture with adjustments to take into account the size of the Company and its subsidiaries (after giving effect to the Acquisition and the other transactions contemplated by the Commitment Letter) and the Company’s proposed business plan. There will not be any financial maintenance covenants in the Indenture.
|
Events of Default:
|
The Indenture will provide for Events of Default customary for publicly traded high yield debt securities, consistent with the Existing Indenture.
|
Registration Rights:
|
None; 144A for life.
|
1.
|
The Acquisition shall have been consummated or will be consummated concurrently with the initial funding under the Facilities in all material respects in accordance with the Acquisition Agreement. No conditions precedent to the consummation of the Acquisition or other provision of the Acquisition Agreement shall have been waived, modified, supplemented or amended (and no consent granted), in a manner materially adverse to the Lead Arrangers or the Lenders in their capacities as Lenders, in each case, without the consent of the Lead Arrangers, not to be unreasonably withheld or delayed;
provided
that, without limitation, (i) any changes to the definition of “Material Adverse Effect” shall be deemed materially adverse and (ii) any increase or decrease in the acquisition consideration shall not be deemed to be materially adverse to the Lead Arrangers or the Lenders so long as (1) any increase is funded by cash on hand or proceeds of an offering of the Company’s equity (the form of which, to the extent not in the form of common equity, will be reasonably satisfactory to the Lead Arrangers) and (2) any decrease is allocated to reduce the Facilities on a pro rata basis;
provided
that Funded Indebtedness (as defined in the Acquisition Agreement as in effect on January 15, 2018) of the Acquired Business included in Closing Net Indebtedness (as defined in the Acquisition Agreement) shall be applied to reduce the Facilities only to the extent such debt (A) consists of (x) Funded Indebtedness of the type described in clause (d) of the definition thereof in an aggregate principal amount that exceeds (when taken together with amounts included in the threshold of $20,000,000 set forth in the definition of Closing Net Indebtedness) $49,000,000 or (y) Funded Indebtedness that is not in the form of working capital indebtedness, local currency lines, equipment leases and similar items incurred in the ordinary course of business (“
Permitted Surviving Debt
”) or consists of Permitted Surviving Debt but exceeds $20,000,000 in aggregate principal amount for all such Permitted Surviving Debt and (B) is not repaid, redeemed, defeased or otherwise discharged, and any liens securing such Funded Indebtedness released, substantially simultaneously with the funding of the Facilities on the Closing Date.
|
2.
|
The Lead Arrangers shall have received (i) (A) audited consolidated balance sheets of the Company as at the end of each of the two fiscal years immediately preceding, and ended more than 90 days prior to, the Closing Date, and related statements of earnings and comprehensive income (loss), shareholders’ equity and cash flows of the Company and accompanying notes to such financial statements for each of the three fiscal years immediately preceding, and ended more than 90 days prior to, the Closing Date and (B) audited combined carve-out balance sheets of the Acquired Business as at the end of each of the two fiscal years immediately preceding, and ended more than 90 days prior to, the Closing Date, and related statements of income, comprehensive income, shareholders’ equity and cash flows of the Acquired Business and accompanying notes to such financial statements for each of the three fiscal years immediately preceding, and ended more than 90 days prior to, the Closing Date; (ii) (A) an unaudited consolidated balance sheet of the Company as at the end of, and related statements of earnings and comprehensive income (loss), and cash flows
|
3.
|
All reasonable and documented costs and expenses (including, without limitation, reasonable and invoiced out-of-pocket legal fees and expenses, title premiums, survey charges and recording taxes and fees) and the fees and other compensation contemplated by the Commitment Letter and the Fee Letters payable to the Commitment Parties, the Lead Arrangers, the Agents or the Lenders on the Closing Date and, with respect to expenses, invoiced at least two business days prior to such date shall, upon the initial borrowing under the Facilities, have been, or will be substantially simultaneously, paid (which amounts may be offset against the proceeds of the Facilities).
|
4.
|
All third-party indebtedness of the Company under the Existing Credit Agreement shall, upon the borrowing under the Facilities, have been, or will be substantially simultaneously, repaid, redeemed, defeased or otherwise discharged, and any liens securing such indebtedness released (other than certain existing letters of credit outstanding under the Existing Credit Agreement that, on the Closing Date, will be grandfathered into, or backstopped by letters of credit issued under, the revolving credit facility under the Existing Credit Agreement or cash collateralized in a manner satisfactory to the issuing banks thereof).
|
5.
|
The Company shall have delivered to the Lead Arrangers the following documentation relating to the Company and all of the Guarantors consistent with the Senior Secured Credit Facilities Documentation Principles and the Bridge Documentation Principles: (i) customary legal opinions, corporate records and documents from public officials, lien searches and officer’s certificates as to the Company and each of the Guarantors; (ii) customary evidence of authority; (iii) customary prior written notice of borrowing; and (iv) a solvency certificate from the chief financial officer of the Company substantially in the form of Annex I hereto, certifying that the Company and its subsidiaries are, on a consolidated basis after giving effect to the transactions contemplated hereby, solvent. Solely with respect to the Senior Secured Credit Facilities and subject to the Limited Conditionality
|
6.
|
The Commitment Parties shall have received at least three business days prior to the Closing Date all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the Patriot Act, to the extent requested at least ten days prior to the Closing Date.
|
7.
|
With respect to the Senior Secured Credit Facilities and the Bridge Facility, the Lead Arrangers shall have received customary Confidential Information Memoranda (which shall include the financial statements described in paragraph (2) above for use in the syndication of the Senior Secured Credit Facilities by a date sufficient to afford the Lead Arrangers a period of at least 15 consecutive business days to syndicate the Senior Secured Credit Facilities prior to the Closing Date; provided that (i) if such period has not ended on or prior to August 17, 2018, such period shall be deemed not to have commenced until September 4, 2018, (ii) the days from November 22, 2018 through November 25, 2018 shall not be included when counting the 15 business days, (iii) if such period has not ended on or before December 21, 2018, it shall not commence until January 2, 2019 and (iv) if such period has not ended on or before November 12, 2018, it will not commence until the audited financial statements of each of the Company and the Acquired Business meeting the requirements of clauses (i)(A) and (ii)(A) of paragraph (2) above have been received by the Lead Arrangers.
|
8.
|
With respect to the Bridge Facility, (a) the Company shall have entered into an engagement letter with one or more investment banks (the “
Investment Banks
”) reasonably acceptable to the Commitment Parties, pursuant to which the Company will engage the Investment Banks in connection with a potential issuance of Notes (with the Commitment Parties acknowledging that the condition specified in this clause (a) has been satisfied) and (b) prior to the Closing Date there shall have elapsed at least 15 consecutive business days after the date on which the Company shall have provided to the Lead Arrangers (1) a customary preliminary offering memorandum suitable for use during such period in a customary “high yield road show” relating to the offering of the Notes pursuant to Rule 144A under the Securities Act (except that the “description of notes” and “plan of distribution” sections may be excluded,
provided
that the Company will cooperate with the Investment Banks to assist with preparation of the “description of notes” section), including audited annual financial statements of the Company and the Acquired Business contemplated by paragraph 2 above and PCAOB AU 722 reviewed interim financial statements of the Company and the Acquired Business for the interim periods contemplated by paragraph 2 above and any other business the financials of which would be required to be included pursuant to Rule 3-05 of Regulation S-X if the offering was done on a registered basis (but excluding, in any event, with respect to the Acquired Business, information required by Section 3-09, Section 3-10, or Section 3-16 of Regulation S-X or “segment reporting”, Compensation Discussion and Analysis required by Item 402 of Regulation S-K and other information customarily excluded from an offering memorandum involving an offering of high-yield debt securities pursuant to Rule 144A), pro forma financial statements giving effect to the Acquisition and other recent or probable material acquisitions (to the extent required in an S-1 Registration Statement) and other financial data of the type and form customarily included in offering memoranda, prospectuses and similar documents for use during such period in a customary “high yield road show” relating to the offering of the Notes pursuant to Rule 144A, prepared, in the case of the historical and pro forma financial statements, in accordance with U.S. GAAP and Regulation S-X under the Securities Act (and with respect to pro forma financial statements for the most recent fiscal year, the interim periods contemplated pursuant to paragraph 2(i)(A) above and
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Energizer Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Alan R. Hoskins
|
Alan R. Hoskins
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Energizer Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting
|
/s/ Timothy W. Gorman
|
Timothy W. Gorman
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Alan R. Hoskins
|
Alan R. Hoskins
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Timothy W. Gorman
|
Timothy W. Gorman
|
Executive Vice President and Chief Financial Officer
|