PR Newswire | May 10, 2021 06:51AM EDT

05/10 05:50 CDT

Energizer Holdings, Inc. Announces Fiscal 2021 Second Quarter Results- Strong top-line growth globally across battery and auto resulted in reported Net sales of $685.1 million, up 16.7% with organic growth of 12.7%?.- Diluted net loss from continuing operations per common share of $0.21 driven by a loss in connection with debt refinancing of $0.78 per share.- Adjusted diluted net earnings from continuing operations per common share increased 108% to $0.77 compared to $0.37 in the prior year second quarter?.- Increased full year outlook to 5% to 7% Net sales growth, $3.30 to $3.50 for Adjusted earnings per share and $620 to $640 million for Adjusted EBITDA?. ST. LOUIS, May 10, 2021

ST. LOUIS, May 10, 2021 /PRNewswire/ -- Energizer Holdings, Inc.(NYSE: ENR) today announced results for the second fiscal quarter, which ended March 31, 2021.

"Building on the momentum of our first quarter, we delivered strong performance across all categories and geographies resulting in 12.7% organic sales growth for the second quarter," said Mark LaVigne, Chief Executive Officer. "We now expect 5% to 7% topline growth for fiscal 2021. The combination of the strong demand for our brands and products with our improving cost control raises our full fiscal year outlook for Adjusted earnings per share to $3.30 to $3.50 and Adjusted EBITDA to $620 to $640 million."

1) See Press Release attachments and supplemental schedules for additionalinformation, including the GAAP and Non-GAAP reconciliations.

Top-Line Performance

For the quarter, demand across batteries and auto in both geographical segments was elevated, resulting in strong sales growth. Net sales were $685.1 million compared to $587.0 million in the prior year period.

Second Quarter% Chg

Net sales - FY'20 $587.0

Organic 74.7 12.7%

Impact of FY 2021 Acquisitions10.7 1.8 %

Change in Argentina 0.8 0.1 %

Impact of currency 11.9 2.1 %

Net sales - FY'21 $685.1 16.7%

* Organic Net sales increased 12.7%, or $74.7 million, due to the following items: * New distribution, predominately in North America, contributed approximately 8%; * Increased year-over-year replenishment volumes globally contributed approximately 6%, driven by elevated demand in both battery and auto; * Favorable pricing contributed approximately 1%; and * Timing of activity negatively impacted organic growth in the current quarter as we experienced an acceleration of orders at the end of the first fiscal quarter related to Brexit shipments and increased country lockdowns due to COVID. These activities unfavorably impacted the current quarter by 2.3%.

Gross Margin

Gross margin percentage on a reported basis was 39.5%, versus 40.1% in the prior year. Excluding the current and prior year costs related to acquisition and integration, adjusted gross margin was 40.5%, down 110 basis points from the prior year.

Second Quarter

Adjusted gross margin - FY'20 ^(1) 41.6 %

Mix and product cost impacts (3.1) %

Lower margin rate profile of the FY 21 acquired businesses(0.3) %

Other (0.2) %

Synergy realization 2.4 %

Currency impact 0.1 %

Adjusted gross margin - FY'21 ^(1) 40.5 %

Gross margin was impacted primarily by channel, customer, and product mix as well as increased operating costs that resulted from higher tariffs associated with higher sourcing volumes, and transportation and product input costs.

Partially offsetting these margin impacts were synergies of approximately $14 million as well as favorable currency exchange rates.

Selling, General and Administrative Expense (SG&A)

SG&A, excluding acquisition and integration costs, for the second quarter was 16.7% of net sales, or $114.1 million, compared to prior year of 18.4% of Net sales, or $108.0 million. The decrease, as a percent of Net sales, benefited from increased leverage due to higher sales, synergy realization and reduced spending, due in part to travel restrictions imposed as a result of COVID-19. On an absolute dollar basis, adjusted SG&A increased $6.1 million driven primarily by higher overhead associated with the top-line sales growth.(1)

Advertising and Promotion Expense (A&P)

A&P was 4.0% of net sales for the second fiscal quarter, relatively flat versus the prior year. The absolute dollar increase was $4.3 million.

Earnings Per Share and Adjusted EBITDA Second Quarter

(In millions, except per share data) 2021 2020

Net (loss)/earnings from continuing operations $(10.2)$13.7

Diluted net (loss)/earnings per common share - continuing$(0.21)$0.14 operations



Adjusted net earnings from continuing operations^(1) $56.8 $29.9

Adjusted diluted net earnings per common share - $0.77 $0.37 continuing operations ^(1)

Adjusted EBITDA^(1) $147.6 $123.2

The changes in Adjusted EBITDA and Adjusted diluted net earnings per common share - continuing operations for the quarter reflect organic revenue growth and synergy realization, slightly offset by higher SG&A and A&P, on an absolute dollar basis.

The Company also finalized the refinancing of its existing Revolver, Term Loans and Senior Notes with $1.2 billion in Term Loans in early January 2021. This contributed to a reduction in interest over the prior year of $8.1 million, or approximately $0.09 per share.

Free Cash Flow and Continued Return of Capital

* Generated cash flows from continuing operations of $12.4 million for the year to date and Adjusted free cash flow from continuing operations of $34.9 million. The decrease from the prior year was primarily due to the expected impacts of quarter over quarter working capital changes, as planned inventory investments were made to meet higher demand. In addition, the prior year first quarter benefited from a $30 million receipt of a valued added tax refund settlement. (1) * Dividend payments in the quarter of approximately $20.6 million, or $0.30 per common share and $4.1 million, or $1.875 per share of mandatory preferred convertible stock. * Net debt to credit-defined EBITDA was 4.8 times as of March 31, 2021.

Financial Outlook and Assumptions for Fiscal Year 2021(1)

As a result of our continued strong organic growth in the second quarter, we are updating our full year fiscal 2021 outlook for the following key metrics:

* Net sales growth is now expected to be between 5% to 7%, attributed to distribution gains, elevated battery demand and favorable currency impacts; * Adjusted gross margin rate is expected to be essentially flat on a year-over-year basis as synergies and the impacts of favorable currency are expected to offset inflationary cost pressures and mix shifts. This full-year rate is consistent with our previously provided outlook; * Adjusted earnings per share is now expected to be in the range of $3.30 to $3.50; * Adjusted EBITDA is now expected to be in the range of $620 to $640 million; and * Adjusted free cash flow is now expected to be at the low end of our previously provided range of $325 to $350 million due to working capital requirements, primarily related to inventory, as we look to rebuild safety stock and meet increased demand.

We began lapping the COVID elevated demand levels for batteries late in the second quarter. With respect to auto care, the elevated demand occurred at the beginning of May. In the third and fourth quarter, we anticipate year-over-year declines as we approach more normalized levels for both categories. In addition, fiscal 2020 included COVID-related costs of $36 million, including interest expense, which were heavily weighted to the back half of the year.

Webcast Information

In conjunction with this announcement, the Company will hold an investor conference call beginning at 10:00 a.m. eastern time today. The call will focus on second fiscal quarter earnings and recent trends in the business. All interested parties may access a live webcast of this conference call at www.energizerholdings.com, under "Investors" and "Events and Presentations" tabs or by using the following link:

https://www.webcaster4.com/Webcast/Page/1192/40264

For those unable to participate during the live webcast, a replay will be available on www.energizerholdings.com, under "Investors," "Events and Presentations," and "Past Events" tabs.

This document contains both historical and forward-looking statements. Forward-looking statements are not based on historical facts but instead reflect our expectations, estimates or projections concerning future results or events, including, without limitation, the future sales, gross margins, costs, earnings, cash flows, tax rates and performance of the Company. These statements generally can be identified by the use of forward-looking words or phrases such as "believe," "expect," "expectation," "anticipate," "may," "could," "intend," "belief," "estimate," "plan," "target," "predict," "likely," "should," "forecast," "outlook," or other similar words or phrases. These statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or projections will be achieved. The forward-looking statements included in this document are only made as of the date of this document and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances. Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation:

* Global economic and financial market conditions, including the conditions resulting from the COVID-19 pandemic, and actions taken by our customers, suppliers, other business partners and governments in markets in which we compete might materially and negatively impact us. * Competition in our product categories might hinder our ability to execute our business strategy, achieve profitability, or maintain relationships with existing customers. * Changes in the retail environment and consumer preferences could adversely affect our business, financial condition and results of operations. * We must successfully manage the demand, supply, and operational challenges brought about by the COVID-19 pandemic and any other disease outbreak, including epidemics, pandemics, or similar widespread public health concerns. * Loss or impairment of the reputation of our Company or our leading brands or failure of our marketing plans could have an adverse effect on our business. * Loss of any of our principal customers could significantly decrease our sales and profitability. * Our ability to meet our growth targets depends on successful product, marketing and operations innovation and successful responses to competitive innovation and changing consumer habits. * We are subject to risks related to our international operations, including currency fluctuations, which could adversely affect our results of operations. * If we fail to protect our intellectual property rights, competitors may manufacture and market similar products, which could adversely affect our market share and results of operations. * Our reliance on certain significant suppliers subjects us to numerous risks, including possible interruptions in supply, which could adversely affect our business. * Our business is vulnerable to the availability of raw materials, our ability to forecast customer demand and our ability to manage production capacity. * Changes in production costs, including raw material prices, could erode our profit margins and negatively impact operating results. * The manufacturing facilities, supply channels or other business operations of the Company and our suppliers may be subject to disruption from events beyond our control. * We may be unable to generate anticipated cost savings, successfully implement our strategies, or efficiently manage our supply chain and manufacturing processes, and our profitability and cash flow could suffer as a result. * Sales of certain of our products are seasonal and adverse weather conditions during our peak selling seasons for certain auto care products could have a material adverse effect. * A failure of a key information technology system could adversely impact our ability to conduct business. * Our operations depend on the use of information technology systems that are subject to data privacy regulations, including recently effective European Union requirements, and could be the target of cyberattack. * We have significant debt obligations that could adversely affect our business and our ability to meet our obligations. * We may experience losses or be subject to increased funding and expenses related to our pension plans. * The estimates and assumptions on which our financial projections are based may prove to be inaccurate, which may cause our actual results to materially differ from our projections, which may adversely affect our future profitability, cash flows and stock price. * If we pursue strategic acquisitions, divestitures or joint ventures, we might experience operating difficulties, dilution, and other consequences that may harm our business, financial condition, and operating results, and we may not be able to successfully consummate favorable transactions or successfully integrate acquired businesses. * We may be unable to realize the anticipated benefits of the 2019 acquisitions of the global auto care and battery, lighting and power businesses from Spectrum Brands. * The 2019 auto care and battery acquisitions may have liabilities that are not known to us and the acquisition agreements may not provide us with sufficient indemnification with respect to such liabilities. * Our business involves the potential for claims of product liability, labeling claims, commercial claims and other legal claims against us, which could affect our results of operations and financial condition and result in product recalls or withdrawals. * Our business is subject to increasing regulation in the U.S. and abroad, the uncertainty and cost of future compliance and consequence of non-compliance with which may have a material adverse effect on our business. * Increased focus by governmental and non-governmental organizations, customers, consumers and shareholders on sustainability issues, including those related to climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation. * We are subject to environmental laws and regulations that may expose us to significant liabilities and have a material adverse effect on our results of operations and financial condition. * We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our stock and diminish our cash reserves.

In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of any such forward-looking statements. The list of factors above is illustrative, but by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Additional risks and uncertainties include those detailed from time to time in our publicly filed documents, including those described under the heading "Risk Factors" in our Form 10-K filed with the Securities and Exchange Commission on November 17, 2020.

ENERGIZER HOLDINGS, INC. CONSOLIDATED STATEMENT OF EARNINGS (Condensed) (In millions, except per share data - Unaudited)

For the Quarter EndedFor the Six Months March 31, Ended March 31,

2021 2020 2021 2020

Net sales $685.1 $587.0 $1,533.7$1,323.8

Cost of products sold (1) 414.6 351.4 925.3 786.9

Gross profit 270.5 235.6 608.4 536.9

Selling, general and 123.8 116.1 247.9 238.2 administrative expense (1)

Advertising and sales promotion27.1 22.8 76.7 69.6 expense

Research and development 9.0 8.3 16.6 17.2 expense (1)

Amortization of intangible 15.3 14.2 30.8 28.0 assets

Interest expense 39.1 47.2 86.4 94.0

Loss on extinguishment of debt 70.0 - 75.7 4.2 (2)

Other items, net (1) (0.1) 5.1 0.7 5.1

(Loss)/earnings before income (13.7) 21.9 73.6 80.6 taxes

Income tax (benefit)/provision (3.5) 8.2 16.7 21.1

Net (loss)/earnings from (10.2) 13.7 56.9 59.5 continuing operations

Net loss from discontinued - (131.4) - (131.1) operations (3)

Net (loss)/earnings (10.2) (117.7) 56.9 (71.6)

Mandatory preferred stock (4.1) (4.1) (8.1) (8.1) dividends

Net (loss)/earnings attributable to common $(14.3)$(121.8)$48.8 $(79.7) shareholders



Basic net (loss)/earnings per common share - continuing $(0.21)$0.14 $0.71 $0.74 operations

Basic net loss per common share- (1.90) - (1.89) - discontinued operations

Basic net (loss)/earnings per $(0.21)$(1.76) $0.71 $(1.15) common share



Diluted net (loss)/earnings per common share - continuing $(0.21)$0.14 $0.71 $0.74 operations

Diluted net loss per common - (1.89) - (1.88) share - discontinued operations

Diluted net (loss)/earnings per$(0.21)$(1.75) $0.71 $(1.14) common share



Weighted average shares of 68.4 69.1 68.5 69.1 common stock - Basic

Weighted average shares of 68.4 69.5 68.8 69.8 common stock - Diluted

See the Supplemental Schedules - Non-GAAP Reconciliations attached which(1) break out the Acquisition and integration related costs included within these lines.

The Loss on the extinguishment of debt for the quarter and six months ended March 31, 2021 relates to the Company's term loan refinancing in December(2) 2020 and the redemption of the $600.0 million Senior Notes due in 2027 in January 2021. The six months ended March 31, 2020 includes the write off of deferred financing fees related to the term loan refinancing in December 2019.

Included in these results is the pre-tax loss on the disposition of the Varta consumer battery business of $137.6 million. The Net loss on(3) discontinued operations is net of an income tax benefit of $13.7 million and $6.2 million for the quarter and six months ended March 31, 2020, respectively.





ENERGIZER HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (Condensed) (In millions - Unaudited)

March 31, September Assets 30, 2021 2020

Current assets

Cash and cash equivalents $261.0 $459.8

Restricted cash - 790.0

Trade receivables 310.6 292.0

Inventories 600.0 511.3

Other current assets 185.7 157.8

Total current assets $1,357.3 $2,210.9

Property, plant and equipment, net 363.6 352.1

Operating lease assets 118.5 121.9

Goodwill 1,057.5 1,016.0

Other intangible assets, net 1,902.7 1,909.0

Deferred tax asset 24.6 24.3

Other assets 113.4 94.1

Total assets $4,937.6 $5,728.3



Liabilities and Shareholders' Equity

Current liabilities

Current maturities of long-term debt $12.0 $841.3

Current portion of capital leases 2.4 1.7

Notes payable 92.3 3.8

Accounts payable 368.2 378.1

Current operating lease liabilities 15.2 14.8

Other current liabilities 289.3 408.7

Total current liabilities $779.4 $1,648.4

Long-term debt 3,352.2 3,306.9

Operating lease liabilities 108.5 111.9

Deferred tax liability 151.5 140.4

Other liabilities 201.6 211.6

Total liabilities $4,593.2 $5,419.2

Shareholders' equity

Common stock 0.7 0.7

Mandatory convertible preferred stock - -

Additional paid-in capital 846.4 859.2

Retained earnings (60.2) (66.2)

Treasury stock (181.8) (176.9)

Accumulated other comprehensive loss (260.7) (307.7)

Total shareholders' equity $344.4 $309.1

Total liabilities and shareholders' equity $4,937.6 $5,728.3





ENERGIZER HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed) (In millions - Unaudited)

For the Six Months Ended March 31,

2021 2020

Cash Flow from Operating Activities

Net earnings/(loss) $56.9 $(71.6)

Net loss from discontinued operations - (131.1)

Net earnings from continuing operations 56.9 59.5

Non-cash integration and restructuring charges 3.5 8.1

Depreciation and amortization 58.7 56.1

Deferred income taxes 2.1 2.6

Share-based compensation expense 9.4 15.9

Loss on extinguishment of debt 75.7 4.2

Non-cash items included in income, net 10.8 10.2

Other, net (0.3) (0.1)

Changes in current assets and liabilities used in (204.4) (57.3) operations

Net cash from operating activities from continuing 12.4 99.2 operations

Net cash used by operating activities from - (12.9) discontinued operations

Net cash from operating activities 12.4 86.3

Cash Flow from Investing Activities

Capital expenditures (19.2) (27.7)

Proceeds from sale of assets 0.1 1.5

Acquisitions, net of cash acquired (67.1) (4.5)

Net cash used by investing activities from continuing(86.2) (30.7) operations

Net cash from investing activities from discontinued - 305.9 operations

Net cash (used by)/from investing activities (86.2) 275.2

Cash Flow from Financing Activities

Cash proceeds from issuance of debt with original 1,200.0 365.0 maturities greater than 90 days

Payments on debt with maturities greater than 90 days(1,983.9) (747.2)

Net increase in debt with original maturities of 90 88.1 150.3 days or less

Premiums paid on extinguishment of debt (122.5) -

Debt issuance costs (17.7) (0.9)

Payment of contingent consideration (3.9) -

Dividends paid on common stock (43.3) (43.7)

Dividends paid on mandatory convertible preferred (8.1) (8.1) stock

Common stock purchased (21.3) (45.0)

Taxes paid for withheld share-based payments (6.7) (9.7)

Net cash used by financing activities from continuing(919.3) (339.3) operations

Net cash used by financing activities from - (1.1) discontinued operations

Net cash used by financing activities (919.3) (340.4)



Effect of exchange rate changes on cash 4.3 (1.7)



Net decrease in cash, cash equivalents, and (988.8) (272.5) restricted cash from continuing operations

Net increase in cash, cash equivalents, and - 291.9 restricted cash from discontinued operations

Net (decrease)/increase in cash, cash equivalents, (988.8) 19.4 and restricted cash

Cash, cash equivalents, and restricted cash, 1,249.8 258.5 beginning of period

Cash, cash equivalents, and restricted cash, end of $261.0 $277.9 period

ENERGIZER HOLDINGS, INC.Reconciliation of GAAP and Non-GAAP MeasuresFor the Quarter and Six Months Ended March 31, 2021

The Company reports its financial results in accordance with accounting principles generally accepted in the U.S. ("GAAP"). However, management believes that certain non-GAAP financial measures provide users with additional meaningful comparisons to the corresponding historical or future period. These non-GAAP financial measures exclude items that are not reflective of the Company's on-going operating performance, such as acquisition and integration costs, acquisition earn out and the loss on extinguishment of debt. In addition, these measures help investors to analyze year over year comparability when excluding currency fluctuations, acquisition activity as well as other company initiatives that are not on-going. We believe these non-GAAP financial measures are an enhancement to assist investors in understanding our business and in performing analysis consistent with financial models developed by research analysts. Investors should consider non-GAAP measures in addition to, not as a substitute for, or superior to, the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in method and in the items being adjusted.

We provide the following non-GAAP measures and calculations, as well as the corresponding reconciliation to the closest GAAP measure in the following supplemental schedules:

Segment Profit. This amount represents the operations of our two reportable segments including allocations for shared support functions. General corporate and other expenses, global marketing expenses, R&D expenses, amortization expense, interest expense, other items, net, the charges related to acquisition and integration costs and the acquisition earn out have all been excluded from segment profit.

Adjusted Net Earnings From Continuing Operations and Adjusted Diluted Net Earnings Per Common Share - Continuing Operations (EPS). These measures exclude the impact of the costs related to acquisition and integration, acquisition earn out and the loss on extinguishment of debt.

Non-GAAP Tax Rate. This is the tax rate when excluding the pre-tax impact of acquisition and integration costs, acquisition earn out and the loss on extinguishment of debt, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.

Organic.This is the non-GAAP financial measurement of the change in revenue or segment profit that excludes or otherwise adjusts for the impact of acquisitions, change in Argentina operations and impact of currency from the changes in foreign currency exchange rates as defined below:

Impact of acquisitions.Energizer completed two acquisitions in the first fiscal quarter of 2021, a battery plant in Indonesia on October 1, 2020 and a formulation company in the United States on December 1, 2020. These adjustments include the impact of the acquisitions' ongoing operations contributed to each respective income statement caption for the first year's operations directly after the acquisition date. This does not include the impact of acquisition and integration costs associated with any acquisition.

Change in Argentina Operations.The Company is presenting separately all changes in sales and segment profit from our Argentina affiliate due to the designation of the economy as highly inflationary as of July 1, 2018.

Impact of currency. The Company evaluates the operating performance of our Company on a currency neutral basis. The impact of currency is the difference between the value of current year foreign operations at the current period ending USD exchange rate, compared to the value of the current year foreign operations at the prior period ending USD exchange rate, as well as the impact of hedging on the currency fluctuation.

Adjusted Comparisons. Detail for adjusted gross profit, adjusted gross margin, adjusted SG&A, adjusted SG&A as percent of sales, adjusted R&D and adjusted Other items, net are also supplemental non-GAAP measure disclosures. These measures exclude the impact of costs related to acquisition and integration, acquisition earn out and the loss on extinguishment of debt.

Free Cash Flow and Adjusted Free Cash Flow. Free Cash Flow is defined as net cash provided by operating activities from continuing operations reduced by capital expenditures, net of the proceeds from asset sales. Adjusted Free Cash Flow is defined as Free Cash Flow excluding the cash payments for acquisition and integration expenses and integration capital expenditures. The expense cash payments are net of the statutory tax benefit associated with the payment.

EBITDA and Adjusted EBITDA. EBITDAis defined as net earnings before income tax provision, interest, loss on extinguishment of debt and depreciation and amortization. Adjusted EBITDA further excludes the impact of the costs related to acquisition and integration, acquisition earn out and share based payments.

Energizer Holdings, Inc.Supplemental Schedules - Segment Information and Supplemental Sales DataFor the Quarter and Six Months Ended March 31, 2021(In millions - Unaudited)

Operations for Energizer are managed via two major geographic reportable segments: Americas and International. Energizer's operating model includes a combination of standalone and shared business functions between the geographic segments, varying by country and region of the world. Energizer applies a fully allocated cost basis, in which shared business functions are allocated between segments. Such allocations are estimates, and do not represent the costs of such services if performed on a standalone basis. Segment sales and profitability, as well as the reconciliation to earnings before income taxes, for the quarter and six months ended March 31, 2021 and 2020, respectively, are presented below:



Quarter Ended MarchSix Months Ended March 31, 31,

2021 2020 2021 2020

Net Sales

Americas $482.0 $409.9$1,068.6$924.4

International 203.1 177.1 465.1 399.4

Total net sales $685.1 $587.0$1,533.7$1,323.8

Segment Profit

Americas 132.3 101.8 288.2 231.0

International 39.6 40.4 99.4 92.6

Total segment profit $171.9 $142.2$387.6 $323.6

General corporate and other (25.8) (23.5) (49.8) (48.4) expenses (1)

Global marketing expense (2) (9.5) (5.6) (18.9) (11.7)

Research and development (8.1) (7.7) (15.6) (16.2) expense - Adjusted (3)

Amortization of intangible (15.3) (14.2) (30.8) (28.0) assets

Acquisition and integration (16.8) (16.9) (35.1) (36.2) costs (4)

Acquisition earn out (5) (1.1) - (1.1) -

Interest expense (39.1) (47.2) (86.4) (94.0)

Loss on extinguishment of debt (70.0) - (75.7) (4.2)

Other items, net - Adjusted (6)0.1 (5.2) (0.6) (4.3)

Total (loss)/earnings before income$(13.7)$21.9 $73.6 $80.6 taxes

(1) Recorded in SG&A on the Consolidated (Condensed) Statement of Earnings.

The quarter and six months ended March 31, 2021 includes $4.7 million and $9.6 million recorded in SG&A, respectively, and $4.8 million and $9.3 million recorded in Advertising and sales promotion expense, respectively,(2) on the Consolidated (Condensed) Statement of Earnings. The quarter and six months ended March 31, 2020 includes $2.6 million and $5.5 million recorded in SG&A, respectively, and $3.0 million and $6.2 million recorded in Advertising and sales promotion expense, respectively, in the Consolidated (Condensed) Statement of Earnings.

Research and development expense for the quarter and six months ended March 31, 2021 included $0.9 million and $1.0 million, respectively, and(3) included $0.6 million and $1.0 million for the quarter and six months ended March 31, 2020, respectively, of acquisition and integration costs which have been reclassified for purposes of the reconciliation above.

(4) See the Supplemental Schedules - Non-GAAP Reconciliations for where these charges are recorded in the Consolidated (Condensed) Statement of Earnings.

This represents the estimated earn out achieved through March 31, 2021(5) under the incentive agreements entered into with the Formulations Acquisition and is recorded in SG&A on the Consolidated (Condensed) Statement of earnings.

(6) See the Supplemental Non-GAAP reconciliation for the Other items, net reconciliation between the reported and adjusted balances.

Supplemental product information is presented below for revenues from external customers:

Quarter Ended March Six Months Ended March 31, 31,

Net Sales 2021 2020 2021 2020

Batteries $ 512.8 $ 427.7$1,218.9 $1,049.6

Auto Care 138.9 130.2 240.7 208.9

Lights, Licensing and 33.4 29.1 74.1 65.3 Other

Total net sales $ 685.1 $ 587.0$1,533.7 $1,323.8

Energizer Holdings, Inc.Supplemental Schedules - GAAP EPS to Adjusted EPS ReconciliationFor the Quarter and Six Months Ended March 31, 2021(In millions, except for per share data- Unaudited)

The following tables provide a reconciliation of Net earnings from continuing operations and Diluted net earnings per common share - continuing operations to Adjusted net earnings from continuing operations and Adjusted diluted net earnings per share - continuing operations, which are non-GAAP measures.

For the Quarter Ended March 31,For the Six Months Ended March 31,

2021 2020 2021 2020

Net (loss)/ earnings attributable $(14.3) $(121.8) $ 48.8 $ (79.7) to common shareholders

Mandatory preferred (4.1) (4.1) (8.1) (8.1) stock dividends

Net (loss)/ (10.2) (117.7) 56.9 (71.6) earnings

Net loss from discontinued - (131.4) - (131.1) operations

Net (loss)/ earnings from $(10.2) $13.7 $ 56.9 $ 59.5 continuing operations

Pre-tax adjustments

Acquisition and 16.8 16.9 35.1 36.2 integration (1)

Acquisition 1.1 - 1.1 - earn out

Loss on extinguishment70.0 - 75.7 4.2 of debt

Total adjustments, $87.9 $16.9 $ 111.9 $ 40.4 pre-tax

After tax adjustments

Acquisition and 12.9 12.8 27.3 27.5 integration

Acquisition 0.8 - 0.8 - earn out

Loss on extinguishment53.3 - 58.0 3.2 of debt

One-time impact of the - 3.4 - 3.4 CARES Act

Total adjustments, $67.0 $16.2 $ 86.1 $ 34.1 after tax

Adjusted net earnings from $56.8 $29.9 $ 143.0 $ 93.6 continuing operations (2)

Mandatory preferred (4.1) (4.1) (8.1) (8.1) stock dividends (3)

Adjusted net earnings from continuing operations $52.7 $25.8 $ 134.9 $ 85.5 attributable to common shareholders

Diluted net (loss)/ earnings per $(0.21) $0.14 $ 0.71 $ 0.74 common share - continuing operations (3)

Adjustments

Acquisition and 0.19 0.18 0.37 0.39 integration

Acquisition 0.01 - 0.01 - earn out

Loss on extinguishment0.78 - 0.79 0.04 of debt

One time impact of the - 0.05 - 0.05 CARES Act

Impact for diluted share - - 0.07 - calculation (3)

Adjusted diluted net earnings per diluted common$0.77 $0.37 $ 1.95 $ 1.22 share - continuing operations (3)

Weighted average shares of common 68.4 69.5 68.8 69.8 stock - Diluted (3)

Adjusted Weighted average shares68.6 69.5 73.4 69.8 of common stock - Diluted (3)

See Supplemental Schedules - Non-GAAP Reconciliations for where these costs(1) are recorded on the unaudited Consolidated (Condensed) Statement of Earnings.

The effective tax rate for the Adjusted - Non-GAAP Earnings and Diluted EPS for the quarters ended March 31, 2021 and 2020 was 23.5% and 22.9%,(2) respectively, and for the six months ended March 31, 2021 and 2020 was 22.9% and 22.6%, respectively, as calculated utilizing the statutory rate for where the costs were incurred.

For the quarter ended March 31, 2021, the Adjusted Weighted average shares of common stock - Diluted includes the dilutive impact of our outstanding performance shares, restricted stock and mandatory preferred stock dividends as they are dilutive to the calculation.

For the six months ended March 31, 2021, the diluted net earnings per(3) common share is assuming the conversion of the mandatory convertible preferred stock to 4.6 million of common stock, and excluding the mandatory preferred stock dividends from net earnings.

For the quarter ended March 31, 2021 and the quarter and six months ended March 31, 2020, the conversion of the mandatory convertible preferred stock is not dilutive and the mandatory preferred stock dividends are included in the dilution calculation.

Energizer Holdings, Inc. Supplemental Schedules - Segment Sales For the Quarter and Six Months Ended March 31, 2021 (In millions - Unaudited)

Net sales Q1'21 % Chg Q2'21 % Chg Six Months% Chg '21

Americas

Net sales - prior year$514.5 $409.9 $924.4

Organic 65.9 12.8 %64.0 15.6 %129.9 14.1 %

Impact of FY 2021 7.3 1.4 %7.6 1.9 %14.9 1.6 %Acquisitions

Change in Argentina 2.8 0.5 %0.8 0.2 %3.6 0.4 %

Impact of currency (3.9) (0.7)%(0.3) (0.1)%(4.2) (0.5)%

Net sales - current $586.614.0 %$482.017.6 %$1,068.615.6 %year



International

Net sales - prior year$222.3 $177.1 $399.4

Organic 27.4 12.3 %10.7 6.0 %38.1 9.5 %

Impact of FY 2021 2.3 1.0 %3.1 1.8 %5.4 1.4 %Acquisitions

Impact of currency 10.0 4.6 %12.2 6.9 %22.2 5.5 %

Net sales - current $262.017.9 %$203.114.7 %$465.1 16.4 %year



Total Net Sales

Net sales - prior year$736.8 $587.0 $1,323.8

Organic 93.3 12.7 %74.7 12.7 %168.0 12.7 %

Impact of FY 2021 9.6 1.3 %10.7 1.8 %20.3 1.5 %Acquisitions

Change in Argentina 2.8 0.4 %0.8 0.1 %3.6 0.3 %

Impact of currency 6.1 0.8 %11.9 2.1 %18.0 1.4 %

Net sales - current $848.615.2 %$685.116.7 %$1,533.715.9 %year

Energizer Holdings, Inc. Supplemental Schedules - Segment Profit For the Quarter and Six Months Ended March 31, 2021 (In millions - Unaudited)

Six Segment profit Q1'21 % Chg Q2'21 % Chg Months % Chg '21

Americas

Segment profit - $129.2 $101.8 $231.0 prior year

Organic 25.8 20.0 %29.8 29.3 %55.6 24.1 %

Impact of FY 2021 1.1 0.9 %1.5 1.5 %2.6 1.1 %Acquisitions

Change in Argentina 2.3 1.8 %0.8 0.8 %3.1 1.3 %

Impact of currency (2.5) (2.0)%(1.6) (1.6) %(4.1) (1.7)%

Segment profit - $155.920.7 %$132.330.0 %$288.2 24.8 %current year



International

Segment profit - $52.2 $40.4 92.6 prior year

Organic 0.7 1.3 %(6.0) (14.9)%(5.3) (5.7)%

Impact of FY 2021 0.2 0.4 %0.3 0.7 %0.5 0.5 %Acquisitions

Impact of currency 6.7 12.9 %4.9 12.2 %11.6 12.5 %

Segment profit - $59.8 14.6 %$39.6 (2.0) %$99.4 7.3 %current year



Total Segment profit

Segment profit - $181.4 $142.2 $323.6 prior year

Organic 26.5 14.6 %23.8 16.7 %50.3 15.5 %

Impact of FY 2021 1.3 0.7 %1.8 1.3 %3.1 1.0 %Acquisitions

Change in Argentina 2.3 1.3 %0.8 0.6 %3.1 1.0 %

Impact of currency 4.2 2.3 %3.3 2.3 %7.5 2.3 %

Segment profit - $215.718.9 %$171.920.9 %$387.6 19.8 %current year

Energizer Holdings, Inc. Supplemental Schedules - Non-GAAP Reconciliations For the Quarter and Six Months Ended March 31, 2021 (In millions - Unaudited)

Gross Q1'21 Q2'21 Q1'20 Q2'20 Q2'21 YTD Q2'20 YTD profit

Net sales $848.6 $685.1 $736.6 $587.0 $1,533.7 $1,323.8

Cost of products 503.0 407.3 428.6 343.1 910.3 771.7 sold - adjusted

Adjusted Gross $345.6 $277.8 $308.0 $243.9 $623.4 $552.1 profit

Adjusted Gross 40.7 %40.5 %41.8 %41.6 %40.6 %41.7 %margin

Acquisition and 7.7 7.3 6.9 8.3 15.0 15.2 integration costs

Reported Cost of 510.7 414.6 435.5 351.4 925.3 786.9 products sold

Gross $337.9 $270.5 $301.1 $235.6 $608.4 $536.9 profit

Gross 39.8 %39.5 %40.9 %40.1 %39.7 %40.6 %margin



SG&A Q1'21 Q2'21 Q1'20 Q2'20 Q2'21 YTD Q2'20 YTD

Segment SG&$84.9 $82.8 $84.1 $82.4 $167.7 $166.5 A

Corporate 23.9 26.6 24.0 23.0 50.5 47.0 SG&A

Global 4.9 4.7 2.9 2.6 9.6 5.5 Marketing

SG&A Adjusted - $113.7 $114.1 $111.0 $108.0 $227.8 $219.0 subtotal

SG&A Adjusted % 13.4 %16.7 %15.1 %18.4 %14.9 %16.5 %of Net sales

Acquisition and 10.4 8.6 11.1 8.1 19.0 19.2 integration costs

Acquisition- 1.1 - - 1.1 - earn out

Reported SG$124.1 $123.8 $122.1 $116.1 $247.9 $238.2 &A

Reported SG &A % of Net14.6 %18.1 %16.6 %19.8 %16.2 %18.0 %sales



Other Q1'21 Q2'21 Q1'20 Q2'20 Q2'21 YTD Q2'20 YTD items, net

Interest $(0.1) $(0.2) $(0.1) $(0.1) $(0.3) $(0.2) income

Foreign currency 1.3 0.5 (0.4) 5.5 1.8 5.1 exchange loss/(gain)

Pension benefit other than (0.5) (0.5) (0.5) (0.5) (1.0) (1.0) service costs

Other - 0.1 0.1 0.3 0.1 0.4

Other items, net $0.7 $(0.1) $(0.9) $5.2 $0.6 $4.3 - Adjusted

Acquisition foreign - - 2.2 - - 2.2 currency loss

Transition services - - (0.3) (0.1) - (0.4) agreement income

Other 0.1 - (1.0) - 0.1 (1.0)

Acquisition and $0.1 $- $0.9 $(0.1) $0.1 $0.8 integration cost

Total Other$0.8 $(0.1) $- $5.1 $0.7 $5.1 items, net



Acquisition and Q1'21 Q2'21 Q1'20 Q2'20 Q2'21 YTD Q2'20 YTD integration

Cost of products $7.7 $7.3 $6.9 $8.3 $15.0 $15.2 sold

SG&A 10.4 8.6 11.1 8.1 19.0 19.2

Research and 0.1 0.9 0.4 0.6 1.0 1.0 development

Other 0.1 - 0.9 (0.1) 0.1 0.8 items, net

Acquisition and integration$18.3 $16.8 $19.3 $16.9 $35.1 $36.2 related items

Energizer Holdings, Inc. Supplemental Schedules - Non-GAAP Reconciliations cont. For the Quarter and Six Months Ended March 31, 2021 (In millions - Unaudited)

Q2'21 Q1'21 Q4'20 Q3'20 LTM 3/31Q2'20 /21 (1)

Net (loss)/ earnings from $(10.2)$67.1 $(41.7)$29.0 $44.2 $13.7 continuing operations

Income tax (benefit)/ (3.5) 20.2 (10.1) 9.9 16.5 8.2 provision

(Loss)/earnings before income (13.7) 87.3 (51.8) 38.9 60.7 21.9 taxes

Interest expense39.1 47.3 50.2 50.8 187.4 47.2

Loss on extinguishment 70.0 5.7 90.7 - 166.4 - of debt

Depreciation & 28.9 29.8 27.6 28.2 114.5 28.5 Amortization

EBITDA $124.3 $170.1$116.7 $117.9$529.0$97.6

Adjustments:

Acquisition and integration 16.8 18.3 20.4 11.4 66.9 16.9 costs

Acquisition 1.1 - - - 1.1 - earn out

Share-based 5.4 4.0 3.3 5.3 18.0 8.7 payments

Adjusted EBITDA $147.6 $192.4$140.4 $134.6$615.0$123.2



(1) LTM defined as the latest 12 months for the period ending March 31, 2021.



Free Cash Flow Q2'21 YTDQ2'20 YTD

Net cash from operating activities from continuing $12.4 $99.2 operations

Capital expenditures (19.2) (27.7)

Proceeds from sale of assets 0.1 1.5

Free cash flow from continuing operations - subtotal $(6.7) $73.0

Cash paid for acquisition and integration expenses 28.9 19.5

Cash paid for integration related capital expenditures 12.7 14.8

Adjusted Free cash flow $34.9 $107.3

Energizer Holdings, Inc. Supplemental Schedules - Non-GAAP Reconciliations cont. FY 2021 Outlook (In millions - Unaudited)



Fiscal Year 2021 Outlook Reconciliation - Adjusted earnings from continuing operations and Adjusted diluted net earnings per common share - continuing operations (EPS)



(in millions, Net earnings from EPS from continuing except per share continuing operations operations data)

Fiscal Year 2021 - $120 to $144 $1.50 to $1.84 GAAP Outlook

Impacts:

Acquisition and integration costs, 62 to 54 $0.90 to 0.78 net of tax benefit

Acquisition earn 3 2 $0.04 0.03 out

Loss on extinguishment of 59 59 $0.86 0.85 debt

Fiscal Year 2021 - $244 to $259 $3.30 to $3.50 Adjusted Outlook



Fiscal Year 2021 Outlook Reconciliation - Adjusted EBITDA

(in millions, except per share data)

Net earnings from continuing $120 to$144 operations

Income tax 28 to55 provision

Earnings before $148 to$199 income taxes

Interest expense 170 to160

Loss on extinguishment of 76 76 debt

Amortization 62 to60

Depreciation 57 to54

EBITDA $513 to$549



Adjustments:

Integration costs80 to70

Acquisition earn 4 to3 out

Share-based 23 18 payments

Adjusted EBITDA $620 to$640



Fiscal Year 2021 Outlook Reconciliation - Adjusted Free Cash Flow

(in millions, except per share data)

Net cash from operating $310 to$350 activities

Capital 90 to85 expenditures

Free cash flow $220 to$265

Adjustments:

Integration costs 55 to45

Integration related capital 50 to40 expenditures

Adjusted free cash $325 to$350 flow

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SOURCE Energizer Holdings, Inc.