PART I — FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the company's unaudited condensed consolidated financial statements for the quarter ended December 31, 2021 [Consolidated Statements of Earnings and Comprehensive Income (Condensed)](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Income%20(Condensed)) Consolidated Statements of Earnings and Comprehensive Income (Condensed) (In millions, except per share data) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Net sales | $846.3 | $848.6 | | Gross profit | $311.6 | $337.9 | | Earnings before income taxes | $76.5 | $87.3 | | Net earnings | $60.0 | $67.1 | | Net earnings attributable to common shareholders | $56.0 | $63.1 | | Basic net earnings per common share | $0.84 | $0.92 | | Diluted net earnings per common share | $0.83 | $0.91 | | Total comprehensive income | $78.7 | $69.5 | [Consolidated Balance Sheets (Condensed)](index=5&type=section&id=Consolidated%20Balance%20Sheets%20(Condensed)) Consolidated Balance Sheets (Condensed) (In millions) | Metric | Dec 31, 2021 | Sep 30, 2021 | | :--- | :--- | :--- | | Total current assets | $1,550.3 | $1,439.5 | | Total assets | $5,109.9 | $5,007.5 | | Total current liabilities | $1,015.5 | $946.4 | | Total liabilities | $4,700.5 | $4,651.8 | | Total shareholders' equity | $409.4 | $355.7 | | Total liabilities and shareholders' equity | $5,109.9 | $5,007.5 | [Consolidated Statements of Cash Flows (Condensed)](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Condensed)) Consolidated Statements of Cash Flows (Condensed) (In millions) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Net cash (used by)/from operating activities | $(54.6) | $76.3 | | Net cash used by investing activities | $(24.0) | $(74.8) | | Net cash from/(used by) financing activities | $61.4 | $(955.2) | | Net decrease in cash, cash equivalents, and restricted cash | $(17.7) | $(944.2) | | Cash, cash equivalents, and restricted cash, end of period | $221.2 | $305.6 | [Consolidated Statements of Shareholders' Equity (Condensed)](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Condensed)) Consolidated Statements of Shareholders' Equity (Condensed) (Amounts in millions) | Metric | Sep 30, 2021 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Shareholders' Equity | $355.7 | $409.4 | | Net earnings | — | $60.0 | | Dividends to common shareholders | — | $(20.1) | | Dividends to preferred shareholders | — | $(4.0) | | Other comprehensive income | — | $18.7 | [Notes to Consolidated (Condensed) Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20(Condensed)%20Financial%20Statements) [Description of Business and Basis of Presentation](index=8&type=section&id=(1)%20Description%20of%20Business%20and%20Basis%20of%20Presentation) - Energizer Holdings, Inc is a global manufacturer, marketer, and distributor of primary batteries, portable lights, and auto care products[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The financial statements are condensed and prepared in accordance with Article 10 of Regulation S-X, with segment disclosures recast as of October 1, 2021[24](index=24&type=chunk) - The Company adopted ASU 2019-12 Income Taxes (Topic 740) as of October 1, 2021, which did not materially impact the financial statements[25](index=25&type=chunk) [Revenue Recognition](index=8&type=section&id=(2)%20Revenue%20Recognition) - Revenue is primarily generated from finished product sales, recognized when control transfers to the customer, typically upon delivery or pickup[27](index=27&type=chunk) - Sales are distributed globally through various retail channels, including mass merchandisers, food, drug, convenience stores, and e-commerce[26](index=26&type=chunk) Net Sales by Products and Markets (In millions) | Category | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | **By Products:** | | | | Batteries | $701.7 | $708.7 | | Auto Care | $106.1 | $104.7 | | Lights | $38.5 | $35.2 | | **By Markets:** | | | | North America | $508.9 | $516.9 | | Modern Markets | $165.3 | $174.5 | | Developing Markets | $115.4 | $108.3 | | Distributors Markets | $56.7 | $48.9 | | **Total Net Sales** | **$846.3** | **$848.6** | [Acquisitions](index=9&type=section&id=(3)%20Acquisitions) - The Formulations Acquisition was completed on December 1, 2020, for a cash purchase price of **$51.2 million** to enhance innovation capabilities[34](index=34&type=chunk) - Acquisition and integration costs totaled **$16.5 million** in Q1 fiscal 2022, down from $18.3 million in Q1 fiscal 2021[42](index=42&type=chunk)[46](index=46&type=chunk) Formulations Acquisition Purchase Price Allocation (In millions) | Asset/Liability | Amount | | :--- | :--- | | Goodwill | $28.7 | | Other intangible assets, net | $20.5 | | Net assets acquired | $50.2 | [Restructuring](index=11&type=section&id=(4)%20Restructuring) - The 2019 restructuring program, focused on manufacturing and distribution network integration, was substantially completed by December 31, 2021[48](index=48&type=chunk) - A new 2020 restructuring program, aimed at reorganizing the global supply chain, was also substantially completed by December 31, 2021[49](index=49&type=chunk) Total Restructuring Related Expense (In millions) | Program | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | 2019 Restructuring Program | $3.9 | $6.6 | | 2020 Restructuring Program | $1.4 | $4.0 | | **Total** | **$5.3** | **$10.6** | [Earnings per share](index=14&type=section&id=(5)%20Earnings%20per%20share) - For Q4 2021, the conversion of Mandatory Convertible Preferred Stock (MCPS) was not dilutive, and mandatory preferred stock dividends were included in the dilution calculation[63](index=63&type=chunk) Basic and Diluted Earnings Per Share (In millions, except per share data) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Net earnings attributable to common shareholders | $56.0 | $63.1 | | Weighted average common shares outstanding - Basic | 66.8 | 68.5 | | Basic net earnings per common share | $0.84 | $0.92 | | Weighted average common shares outstanding - Diluted | 67.1 | 73.5 | | Diluted net earnings per common share | $0.83 | $0.91 | [Segments](index=15&type=section&id=(6)%20Segments) - As of October 1, 2021, Energizer changed its reportable operating segments from geographical to product groupings (Battery & Lights and Auto Care)[66](index=66&type=chunk) - Segment performance is evaluated based on segment operating profit, excluding general corporate expenses and other specified items[66](index=66&type=chunk) Net Sales and Segment Profit by Product Grouping (In millions) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | **Net Sales:** | | | | Batteries & Lights | $740.2 | $743.9 | | Auto Care | $106.1 | $104.7 | | **Total Net Sales** | **$846.3** | **$848.6** | | **Segment Profit:** | | | | Batteries & Lights | $168.4 | $180.5 | | Auto Care | $(0.2) | $18.3 | | **Total Segment Profit** | **$168.2** | **$198.8** | [Goodwill and intangible assets](index=16&type=section&id=(7)%20Goodwill%20and%20intangible%20assets) - Goodwill and indefinite-lived intangible assets are not amortized but are evaluated annually for impairment, with balances recast for new segments[74](index=74&type=chunk) Goodwill by Segment (In millions) | Segment | Oct 1, 2021 | Dec 31, 2021 | | :--- | :--- | :--- | | Batteries & Lights | $900.3 | $900.7 | | Auto Care | $153.5 | $152.6 | | **Total** | **$1,053.8** | **$1,053.3** | Total Other Intangible Assets, Net (In millions) | Category | Dec 31, 2021 | Sep 30, 2021 | | :--- | :--- | :--- | | Total Amortizable intangible assets | $490.6 | $505.6 | | Trademarks and trade names - indefinite lived | $1,365.6 | $1,365.7 | | **Total Other intangible assets, net** | **$1,856.2** | **$1,871.3** | [Debt](index=17&type=section&id=(8)%20Debt) - The Company amended its Credit Agreement on December 31, 2021, increasing the 2020 Revolving Facility to **$500.0 million**[82](index=82&type=chunk) - As of December 31, 2021, the Company had **$182.5 million** outstanding under the 2020 Revolving Facility, with **$309.5 million** remaining available[84](index=84&type=chunk)[88](index=88&type=chunk) Long-Term Debt Details (In millions) | Debt Type | Dec 31, 2021 | Sep 30, 2021 | | :--- | :--- | :--- | | Senior Secured Term Loan Facility due 2027 | $1,191.0 | $1,194.0 | | 4.750% Senior Notes due 2028 | $600.0 | $600.0 | | 4.375% Senior Notes due 2029 | $800.0 | $800.0 | | 3.50% Senior Notes due 2029 (Euro Notes of €650.0) | $739.1 | $752.7 | | Capital lease obligations | $43.6 | $44.3 | | **Total long-term debt, including current maturities** | **$3,373.7** | **$3,391.0** | | Less current portion | $(14.2) | $(14.3) | | Less unamortized debt premium and debt issuance fees | $(41.2) | $(43.3) | | **Total long-term debt** | **$3,318.3** | **$3,333.4** | [Pension Plans](index=19&type=section&id=(9)%20Pension%20Plans) - The Company operates several defined benefit pension plans for U.S. and international employees, with the U.S. plan frozen in fiscal year 2014[94](index=94&type=chunk) Net Periodic Pension (Benefit)/Cost (In millions) | Component | Q4 2021 (U.S.) | Q4 2020 (U.S.) | Q4 2021 (International) | Q4 2020 (International) | | :--- | :--- | :--- | :--- | :--- | | Service cost | $— | $— | $0.2 | $0.2 | | Interest cost | $3.2 | $3.2 | $0.5 | $0.4 | | Expected return on plan assets | $(5.7) | $(5.5) | $(0.8) | $(0.8) | | Amortization of unrecognized net losses | $1.6 | $1.8 | $0.1 | $0.4 | | **Net periodic (benefit)/cost** | **$(0.9)** | **$(0.5)** | **$—** | **$0.2** | [Shareholders' Equity](index=19&type=section&id=(10)%20Shareholders'%20Equity) - An Accelerated Share Repurchase (ASR) program in Q4 fiscal 2021 resulted in the delivery of approximately **2.0 million shares** at an average price of **$38.30**[96](index=96&type=chunk)[97](index=97&type=chunk) - Common stock dividends declared were **$0.30 per share** for Q1 and Q2 fiscal 2022[101](index=101&type=chunk)[103](index=103&type=chunk) - Subsequent to the quarter, all outstanding MCPS automatically converted into approximately **4.7 million shares** of common stock[104](index=104&type=chunk) [Financial Instruments and Risk Management](index=20&type=section&id=(11)%20Financial%20Instruments%20and%20Risk%20Management) - The Company uses derivatives to manage market risks from currency rates, interest rates, and commodity prices, not for speculative purposes[106](index=106&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[115](index=115&type=chunk) - As of December 31, 2021, the Company had variable rate debt of **$1,373.5 million**, with an interest rate swap fixing LIBOR at **0.95%** on a notional value of **$700.0 million**[115](index=115&type=chunk)[116](index=116&type=chunk) Estimated Fair Values of Derivatives Designated as Cash Flow Hedges (In millions) | Derivative Type | Dec 31, 2021 (Asset) | Sep 30, 2021 (Asset) | | :--- | :--- | :--- | | Foreign currency contracts | $3.7 | $5.0 | | Interest rate swap | $17.0 | $11.7 | | Zinc contracts | $5.1 | $4.7 | | **Total** | **$25.8** | **$21.4** | [Accumulated Other Comprehensive (Loss)/Income](index=24&type=section&id=(12)%20Accumulated%20Other%20Comprehensive%20(Loss)%2FIncome) Changes in Accumulated Other Comprehensive (Loss)/Income (AOCI) (In millions) | Component | Sep 30, 2021 Balance | OCI before Reclassifications | Reclassifications to Earnings | Dec 31, 2021 Balance | | :--- | :--- | :--- | :--- | :--- | | Foreign Currency Translation Adjustments | $(109.8) | $12.3 | $— | $(97.5) | | Pension Activity | $(134.4) | $(0.1) | $— | $(133.2) | | Zinc Contracts | $3.6 | $2.3 | $(2.0) | $3.9 | | Foreign Currency Contracts | $3.6 | $0.9 | $(0.8) | $3.7 | | Interest Rate Contracts | $6.6 | $3.4 | $1.4 | $11.4 | | **Total** | **$(230.4)** | **$18.8** | **$(0.1)** | **$(211.7)** | Reclassifications out of AOCI to Earnings (In millions) | AOCI Component | Q4 2021 Amount | Q4 2020 Amount | Affected Line Item | | :--- | :--- | :--- | :--- | | Foreign currency contracts | $(1.0) | $2.6 | Cost of products sold | | Interest rate contracts | $1.8 | $1.3 | Interest expense | | Zinc contracts | $(2.6) | $0.8 | Cost of products sold | | Amortization of defined benefit pension actuarial loss | $1.7 | $2.2 | Other items, net (not shown in table) | [Supplemental Financial Statement Information](index=25&type=section&id=(13)%20Supplemental%20Financial%20Statement%20Information) Other Items, Net (In millions) | Component | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Interest income | $(0.2) | $(0.1) | | Foreign currency exchange loss | $1.3 | $1.3 | | Pension benefit other than service costs | $(1.1) | $(0.5) | | Other | $0.2 | $0.1 | | **Total Other items, net** | **$0.2** | **$0.8** | Inventories (In millions) | Component | Dec 31, 2021 | Sep 30, 2021 | | :--- | :--- | :--- | | Raw materials and supplies | $138.8 | $118.8 | | Work in process | $208.3 | $206.3 | | Finished products | $408.8 | $403.2 | | **Total inventories** | **$755.9** | **$728.3** | Other Current Liabilities (In millions) | Component | Dec 31, 2021 | Sep 30, 2021 | | :--- | :--- | :--- | | Accrued advertising, sales promotion and allowances | $31.5 | $19.5 | | Accrued trade allowances | $75.7 | $57.3 | | Accrued salaries, vacations and incentive compensation | $31.3 | $65.4 | | Accrued interest expense | $11.4 | $16.5 | | Restructuring reserve | $2.2 | $5.7 | | Income taxes payable | $48.3 | $30.3 | | Other | $182.2 | $162.1 | | **Total other current liabilities** | **$382.6** | **$356.8** | [Legal proceedings/contingencies and other obligations](index=26&type=section&id=(14)%20Legal%20proceedings%2Fcontingencies%20and%20other%20obligations) - The Company is subject to various legal proceedings, with current liabilities not deemed material to its financial position or results[146](index=146&type=chunk)[149](index=149&type=chunk) - As of December 31, 2021, the Company had approximately **$33.2 million** in purchase obligations under supply and service contracts[150](index=150&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operating results, and liquidity, covering performance, risks, and non-GAAP measures [Forward-Looking Statements](index=28&type=section&id=Forward-Looking%20Statements) - The document contains forward-looking statements reflecting expectations about future results, sales, margins, costs, and earnings[154](index=154&type=chunk) - These statements are subject to risks including economic conditions, competition, COVID-19 impacts, and supply chain disruptions[154](index=154&type=chunk) [Non-GAAP Financial Measures](index=29&type=section&id=Non-GAAP%20Financial%20Measures) - Management uses non-GAAP financial measures to provide meaningful comparisons by excluding items not reflective of ongoing operations[158](index=158&type=chunk) - Key non-GAAP measures include Segment Profit, Adjusted Net Earnings, Adjusted Diluted EPS, and Organic sales[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [COVID-19](index=30&type=section&id=COVID-19) - The COVID-19 pandemic continued to pose significant risks in Q1 fiscal 2022, impacting demand and disrupting the global supply chain[166](index=166&type=chunk)[167](index=167&type=chunk) - The Company faced higher operating costs due to elevated commodity prices and unprecedented transportation cost pressures[168](index=168&type=chunk) - Labor availability remains a major challenge across most U.S. sites, leading to increased investment in incremental safety stock[169](index=169&type=chunk) [Acquisition and Integration Costs](index=31&type=section&id=Acquisition%20and%20Integration%20Costs) - SG&A expenses for Q4 2021 were primarily driven by integration of acquired IT systems, consulting costs, and retention-related compensation[175](index=175&type=chunk) Pre-tax Acquisition and Integration Costs (In millions) | Expense Category | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Costs of products sold | $6.0 | $7.7 | | Selling, general and administrative expense | $9.4 | $10.4 | | Research and development expense | $1.1 | $0.1 | | Other items, net | $— | $0.1 | | **Total** | **$16.5** | **$18.3** | [Restructuring Costs](index=31&type=section&id=Restructuring%20Costs) - Both the 2019 and 2020 restructuring programs were substantially completed by December 31, 2021[177](index=177&type=chunk)[178](index=178&type=chunk) - The Company expects to achieve estimated total cost savings of **$55 million to $60 million** by the end of the current fiscal year[182](index=182&type=chunk) Total Pre-tax Restructuring Expense (In millions) | Period | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Total | $5.3 | $10.6 | [Highlights / Operating Results](index=32&type=section&id=Highlights%20%2F%20Operating%20Results) - Net sales decreased by **$2.3 million (0.3%)** YoY, as pricing actions were offset by unfavorable currency impacts and lapping prior-year demand[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - Adjusted gross margin percentage decreased by **320 basis points** YoY, driven by higher operating and transportation costs[191](index=191&type=chunk)[193](index=193&type=chunk) Key Financial Results (In millions, except per share data) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Net earnings | $60.0 | $67.1 | | Diluted net earnings per common share | $0.83 | $0.91 | | Adjusted diluted net earnings per common share | $1.03 | $1.17 | | Total Net sales | $846.3 | $848.6 | | Reported Gross margin percentage | 36.8% | 39.8% | | Adjusted Gross margin percentage | 37.5% | 40.7% | | Selling, general, and administrative expense (SG&A) | $122.1 | $124.1 | | Adjusted SG&A | $111.6 | $113.7 | | Advertising and sales promotion expense (A&P) | $51.7 | $49.6 | | Research and Development (R&D) | $8.9 | $7.6 | | Interest expense | $37.0 | $47.3 | | Loss on extinguishment of debt | $— | $5.7 | | Effective tax rate | 21.6% | 23.1% | | Adjusted effective tax rate | 21.6% | 22.6% | [Segment Results](index=35&type=section&id=Segment%20Results) - Battery & Lights organic net sales declined by **0.2%** due to an expected decrease in battery demand compared to strong prior-year sales[202](index=202&type=chunk)[203](index=203&type=chunk) - Auto Care net sales increased by **1.3%** YoY, driven by new distribution and price increases[202](index=202&type=chunk)[205](index=205&type=chunk) - Global reported segment profit decreased by **15.4%** YoY, with organic operating profit declining by **17.3%** due to lower sales and higher costs[207](index=207&type=chunk) - Auto Care segment profit decreased significantly due to increased product input costs negatively impacting gross margin[208](index=208&type=chunk) Segment Profit Change (In millions) | Segment | Q4 2021 Change | Q4 2021 % Change | | :--- | :--- | :--- | | Batteries & Lights | $(12.1) | (6.7)% | | Auto Care | $(18.5) | (101.1)% | | **Total Segment Profit** | **$(30.6)** | **(15.4)%** | [General Corporate](index=37&type=section&id=General%20Corporate) - The decrease in general corporate expenses was primarily driven by reduced stock compensation expense, partially offset by higher IT spending[210](index=210&type=chunk) General Corporate and Other Expenses (In millions) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | General corporate and other expenses | $21.7 | $24.0 | | % of Net Sales | 2.6% | 2.8% | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) - Future cash needs will focus on operating activities, strategic investments, and debt reductions, funded by operations and capital markets[211](index=211&type=chunk) - As of December 31, 2021, the Company had **$221.2 million** in cash and cash equivalents, with approximately **98%** held outside the U.S[212](index=212&type=chunk)[213](index=213&type=chunk) - The Company was in compliance with all debt covenants as of December 31, 2021, and expects to remain so for the next twelve months[215](index=215&type=chunk) [Operating Activities](index=37&type=section&id=Operating%20Activities) - The **$130.9 million** decrease in cash flow from operating activities was primarily driven by a **$109 million** change in working capital[216](index=216&type=chunk) - Despite negative cash flow from operations in the quarter, the Company anticipates positive cash flow for the full fiscal year 2022[218](index=218&type=chunk) Cash Flow from Operating Activities (In millions) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Net cash (used by)/from operating activities | $(54.6) | $76.3 | [Investing Activities](index=38&type=section&id=Investing%20Activities) - Total investing cash outflows of **$55 million to $65 million** are anticipated for capital expenditures in fiscal 2022[220](index=220&type=chunk) Net Cash Used by Investing Activities (In millions) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Net cash used by investing activities | $(24.0) | $(74.8) | | Capital expenditures | $(24.4) | $(8.4) | | Acquisitions, net of cash acquired and working capital settlements | $0.4 | $(66.4) | [Financing Activities](index=38&type=section&id=Financing%20Activities) - Q4 2021 financing activities included a **$94.2 million** net increase in short-term debt and **$2.5 million** in debt issuance costs[221](index=221&type=chunk) - Q4 2020 financing activities were significantly impacted by debt refinancing, including **$550.0 million** in debt issuance and **$1,383.3 million** in payments[222](index=222&type=chunk)[224](index=224&type=chunk) Net Cash from/(used by) Financing Activities (In millions) | Metric | Q4 2021 | Q4 2020 | | :--- | :--- | :--- | | Net cash from/(used by) financing activities | $61.4 | $(955.2) | | Net increase in debt with original maturities of 90 days or less | $94.2 | $1.2 | | Dividends paid on common stock | $(20.5) | $(22.7) | | Dividends paid on mandatory convertible preferred stock | $(4.0) | $(4.0) | | Common stock purchased | $— | $(21.3) | [Dividends](index=40&type=section&id=Dividends) - The Board declared a cash dividend of **$0.30 per common share** for Q1 and Q2 fiscal 2022, with all MCPS subsequently converting to common stock[225](index=225&type=chunk)[226](index=226&type=chunk) [Share Repurchases](index=40&type=section&id=Share%20Repurchases) - An Accelerated Share Repurchase (ASR) program in Q4 fiscal 2021 resulted in the acquisition of approximately **2.0 million shares** at an average price of **$38.30**[227](index=227&type=chunk) - Future share repurchases will be determined by the Board based on market conditions and capital allocation objectives[228](index=228&type=chunk)[229](index=229&type=chunk) [Other Matters](index=41&type=section&id=Other%20Matters) [Environmental Matters](index=41&type=section&id=Environmental%20Matters) - Accrued environmental costs were **$9.5 million** at December 31, 2021, and are not expected to materially affect the Company's financial position[231](index=231&type=chunk) [Contractual Obligations](index=41&type=section&id=Contractual%20Obligations) - The Company has long-term debt obligations of **$3,330.1 million**, with **$12.0 million** due within the next twelve months[233](index=233&type=chunk) - Material future purchase commitments for goods and services total **$33.2 million**[235](index=235&type=chunk) - Total future operating and finance lease payments are **$165.0 million** and **$84.0 million**, respectively[237](index=237&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to currency, commodity, and interest rate risks and its strategies for managing them [Market Risk Sensitive Instruments and Positions](index=41&type=section&id=Market%20Risk%20Sensitive%20Instruments%20and%20Positions) - The Company's market risk arises from potential losses due to adverse changes in currency rates, commodity prices, and interest rates[238](index=238&type=chunk) [Derivatives Designated as Cash Flow Hedging Relationships](index=42&type=section&id=Derivatives%20Designated%20as%20Cash%20Flow%20Hedging%20Relationships) - Energizer uses forward currency contracts to hedge cash flow uncertainty from forecasted inventory purchases[241](index=241&type=chunk) - Unrealized pre-tax gains on these forward currency contracts were **$3.7 million** at December 31, 2021[241](index=241&type=chunk) [Derivatives Not Designated as Cash Flow Hedging Relationships](index=42&type=section&id=Derivatives%20Not%20Designated%20as%20Cash%20Flow%20Hedging%20Relationships) - Foreign currency derivative contracts not designated as cash flow hedges are used to hedge existing balance sheet exposures[243](index=243&type=chunk) - The change in fair value of these contracts resulted in a **$1.9 million gain** in Q4 2021, compared to a **$0.9 million loss** in Q4 2020[243](index=243&type=chunk) [Commodity Price Exposure](index=42&type=section&id=Commodity%20Price%20Exposure) - The Company uses zinc contracts to reduce exposure to cash flow variability from future zinc purchases[244](index=244&type=chunk)[245](index=245&type=chunk) - The pre-tax unrealized gain on zinc contracts was **$5.1 million** at December 31, 2021[245](index=245&type=chunk) [Interest Rate Exposure](index=42&type=section&id=Interest%20Rate%20Exposure) - Energizer has interest rate risk on its variable rate debt, which totaled **$1,373.5 million** at December 31, 2021[246](index=246&type=chunk) - An interest rate swap fixed the variable benchmark component (LIBOR) at **0.95%** on **$700.0 million** of variable rate debt[248](index=248&type=chunk)[249](index=249&type=chunk) - For Q4 2021, the weighted average interest rate on variable rate debt, inclusive of the interest rate swap, was **2.94%**[249](index=249&type=chunk) [Argentina Currency Exposure and Hyperinflation](index=43&type=section&id=Argentina%20Currency%20Exposure%20and%20Hyperinflation) - Effective July 1, 2018, Argentina's economy was designated as highly inflationary, requiring financial statements to be remeasured into U.S. dollars[250](index=250&type=chunk) - The ongoing impact of highly inflationary accounting is difficult to determine as it depends on exchange rate movements[250](index=250&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2021[251](index=251&type=chunk) - No material changes to the Company's internal control over financial reporting occurred during the quarter ended December 31, 2021[252](index=252&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company addresses its involvement in legal proceedings, concluding that potential liabilities are not expected to be material - The Company is party to legal proceedings and claims in various jurisdictions, with accruals established for probable and estimable losses[254](index=254&type=chunk) - Based on current information, any liability from pending legal claims is not reasonably likely to be material to the Company's financial position[254](index=254&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section notes no material changes to the risk factors disclosed in the company's most recent Annual Report on Form 10-K - There have been no material changes to the risk factors previously discussed in the Company's Annual Report on Form 10-K filed on November 16, 2021[255](index=255&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the company's equity security purchases during the first quarter of fiscal 2022 - The Company acquired **450,522 shares** in Q1 fiscal 2022 as part of the **$75.0 million** Accelerated Share Repurchase (ASR) program[258](index=258&type=chunk) - **58,059 shares** were purchased during the quarter to satisfy tax withholding obligations related to restricted stock vesting[258](index=258&type=chunk) Purchases of Equity Securities (Q1 Fiscal 2022) | Period | Total Number of Shares Purchased | Average Price Per Share | | :--- | :--- | :--- | | October 1 - October 31 | 140 | $39.64 | | November 1 - November 30 | 508,441 | $33.93 | | December 1 - December 31 | — | — | | **Total** | **508,581** | **$33.93** | [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with the Form 10-Q, including corporate governance and credit agreement documents - The exhibit index lists various documents, including corporate governance documents, credit agreements, and amendments[261](index=261&type=chunk) - It also includes certifications of periodic financial reports by the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002[261](index=261&type=chunk)

Financial Data and Key Metrics Changes - The company reported revenue of $846 million for Q1 2022, which was roughly flat compared to the prior year on an organic basis [9][22] - Adjusted gross margin decreased by 320 basis points to 37.5% compared to Q1 2021, primarily due to inflationary cost pressures [10][24] - Adjusted earnings per share for the quarter were $1.03, partially offsetting the gross margin decline [10] Business Line Data and Key Metrics Changes - The Battery category experienced a modest decline in organic sales, while Auto Care showed organic growth of 1.3% [22] - The Battery category grew by 9.7% in value and 7.8% in volume on a two-year stack basis, but saw a decline of 3.5% in value and 8.4% in volume in the three months ending November 2021 [12] - The Auto Care category value increased by 9% year-over-year and 20.6% on a two-year stack basis, driven by changing consumer behavior [14][15] Market Data and Key Metrics Changes - The company noted that the macro environment remains challenging, with rising costs in commodities, transportation, and labor impacting operations [16][30] - The company anticipates flat to low-single-digit growth in category value for the Battery segment moving forward [13] Company Strategy and Development Direction - The company is taking aggressive actions to offset rising costs, including additional pricing actions and cost containment measures [8][34] - The focus remains on gross margin recovery and continuous improvement initiatives to offset inflationary pressures [60][70] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed the outlook for net sales, adjusted earnings per share, and adjusted EBITDA for the full year, despite the challenging operating environment [8][35] - The company expects to operate with elevated safety stock for the foreseeable future due to ongoing supply chain disruptions [19] Other Important Information - The segment reporting has changed from geographical segments to product line segments, now categorized as Battery and Lighting Products and Auto Care [21] - The company completed an accelerated share repurchase program, purchasing nearly 2 million shares [29] Q&A Session Summary Question: Can you provide more detail on gross margin progression through the year? - Management indicated that pricing actions will be effective in the second quarter, with expectations for gross margin recovery in the back half of the year [36][41] Question: What are the competitive dynamics regarding pricing? - The company noted that competitive products, including private labels, are experiencing price increases in line with branded products due to inflation [46] Question: How is the company positioned for future acquisitions? - Management stated that M&A is of reduced interest at the moment due to leverage levels, with a focus on gross margin recovery first [60] Question: What is the outlook for the Auto Care segment? - Management expressed confidence in the Auto Care segment, citing healthy demand driven by an increasing number of vehicles and miles driven [63] Question: What percentage of the U.S. business is e-commerce? - The company indicated that approximately 17% of the Battery category goes through online sales, although specific breakdowns were not provided [77]

Part I [Business](index=4&type=section&id=Item%201.%20Business) Energizer is a global manufacturer of household products, including batteries and auto care, serving diverse retail channels and subject to regulations - Energizer is a global diversified household products company specializing in **batteries, auto care, and portable lights**, with well-known brands[14](index=14&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Wal-Mart Stores, Inc. accounted for **13.7% of annual sales** in fiscal year 2021, making it the largest customer[26](index=26&type=chunk) - As of September 30, 2021, the company employed approximately **6,000 people** across 38 countries[35](index=35&type=chunk) - Operations are subject to significant governmental regulations, including environmental rules and scrutiny over components like **refrigerant R-134a**[55](index=55&type=chunk)[56](index=56&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks from intense competition, retail changes, supply chain disruptions, international operations, substantial debt, and increasing regulatory scrutiny - Intense competition from consumer product companies could hinder profitability and customer relationships[74](index=74&type=chunk)[76](index=76&type=chunk) - Changes in the retail landscape and consumer preferences could negatively impact sales and margins[79](index=79&type=chunk) - The COVID-19 pandemic presents ongoing operational challenges, including supply chain disruptions and **$6 million in incremental costs** in fiscal 2021[81](index=81&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) - Over **40% of fiscal 2021 sales** from foreign countries expose the company to international risks like currency fluctuations and trade policy changes[97](index=97&type=chunk) - Significant debt obligations, totaling approximately **$3.5 billion** as of September 30, 2021, could adversely affect the business[137](index=137&type=chunk) [Unresolved Staff Comments](index=27&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[189](index=189&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company's principal executive office is in St. Louis, Missouri, with numerous manufacturing and distribution facilities globally - The company's principal executive office is located in **St. Louis, Missouri**[190](index=190&type=chunk) - Energizer operates principal manufacturing, packaging, and distribution facilities across the Americas and internationally[191](index=191&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management does not expect a material adverse effect on its financial position - The company is party to various legal proceedings arising in the normal course of business but does not expect them to have a material adverse effect on its financial condition or results of operations[193](index=193&type=chunk) [Mine Safety Disclosure](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This section is not applicable to the company's operations - None[196](index=196&type=chunk) [Information About Our Executive Officers](index=28&type=section&id=Item%204A.%20Information%20About%20Our%20Executive%20Officers) This section provides biographical information for Energizer's key executive officers as of November 16, 2021 - **Mark S. LaVigne** serves as President and Chief Executive Officer[196](index=196&type=chunk) - **John J. Drabik** was appointed Executive Vice President, Chief Financial Officer effective October 1, 2021[198](index=198&type=chunk) Part II [Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%20and%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Energizer's common stock trades on the NYSE, with the company repurchasing shares and paying dividends, as detailed in its performance graph - The company's common stock is listed on the New York Stock Exchange under the symbol **"ENR"**[202](index=202&type=chunk) Issuer Purchases of Equity Securities (Shares, USD) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number That May Yet Be Purchased Under the Plans or Programs | | :--- | :--- | :--- | :--- | :--- | | July 1, 2021 - July 31, 2021 | 116 | $43.21 | — | 7,000,000 | | August 1, 2021 - August 31, 2021 | — | — | 1,507,538 | 5,492,462 | | September 1, 2021 - September 30, 2021 | 49 | $38.18 | — | 5,492,462 | | Total | 165 | $41.72 | — | 5,492,462 | - In Q4 2021, the company initiated a **$75.0 million accelerated share repurchase (ASR) program**, delivering approximately **1.5 million shares** in August 2021[204](index=204&type=chunk) Cumulative Total Shareholder Return (Index) | | 9/30/16 | 9/30/17 | 9/30/18 | 9/30/19 | 9/30/20 | 9/30/21 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Energizer Holdings, Inc. | 100.0 | 94.4 | 122.8 | 93.8 | 86.4 | 88.6 | | Midcap 400 | 100.0 | 117.5 | 134.2 | 130.9 | 128.0 | 184.0 | | Household Products | 100.0 | 102.9 | 100.0 | 140.1 | 160.2 | 160.0 | [Reserved](index=31&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information - None [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results for fiscal 2021, covering sales growth, margin decline, liquidity, and debt management [Overview](index=36&type=section&id=Overview) Energizer is a global leader in household batteries, lighting, and automotive care, operating through Americas and International segments - Energizer is a leading global manufacturer and distributor of **household batteries, lighting, and automotive care products**[251](index=251&type=chunk) - Operations are managed through two major geographic segments: **Americas and International**[260](index=260&type=chunk) [Financial Results](index=37&type=section&id=Financial%20Results) Net earnings from continuing operations significantly increased in fiscal 2021 to $160.9 million, or $2.11 per diluted share Summary of Financial Results (Millions USD, except per share data) | (in millions, except per share data) | FY 2021 | FY 2020 | FY 2019 | | :--- | :--- | :--- | :--- | | **Net earnings from continuing operations** | **$160.9** | **$46.8** | **$64.7** | | Diluted net earnings per common share - continuing operations | $2.11 | $0.44 | $0.78 | | **Adjusted net earnings from continuing operations** | **$255.4** | **$176.8** | **$216.1** | | Adjusted diluted net earnings per diluted share - continuing operations | $3.48 | $2.31 | $3.00 | [Operating Results](index=39&type=section&id=Operating%20Results) Fiscal 2021 saw net sales increase by 10.1% to $3,021.5 million, driven by organic growth, despite a decline in gross margin due to higher input costs Net Sales and Organic Growth (Millions USD) | (in millions) | FY 2021 | % Change | FY 2020 | | :--- | :--- | :--- | :--- | | Net sales | $3,021.5 | 10.1% | $2,744.8 | | Organic Growth | $200.5 | 7.3% | $61.4 | - Gross margin for fiscal 2021 was **38.4%**, a **100 basis point decrease** from the prior year, primarily due to higher input costs[278](index=278&type=chunk) - Adjusted SG&A as a percent of sales improved to **14.7%** in fiscal 2021 from **16.2%** in fiscal 2020, driven by synergy realization[281](index=281&type=chunk)[283](index=283&type=chunk) - Interest expense decreased to **$161.8 million** in fiscal 2021 from **$195.0 million** in fiscal 2020 due to debt refinancing[289](index=289&type=chunk) - The company recorded a **$103.3 million loss** on extinguishment of debt in fiscal 2021 due to refinancing transactions[291](index=291&type=chunk) [Segment Results](index=43&type=section&id=Segment%20Results) In fiscal 2021, Americas segment net sales grew 9.3% and profit increased 13.1%, while International net sales grew 12.0% but profit decreased organically Segment Net Sales (Millions USD) | (in millions) | FY 2021 | % Change | FY 2020 | | :--- | :--- | :--- | :--- | | **Americas Net Sales** | **$2,155.3** | **9.3%** | **$1,971.2** | | Organic Growth | $155.5 | 7.9% | $69.8 | | **International Net Sales** | **$866.2** | **12.0%** | **$773.6** | | Organic Growth | $45.0 | 5.8% | ($8.4) | Segment Profit (Millions USD) | (in millions) | FY 2021 | % Change | FY 2020 | | :--- | :--- | :--- | :--- | | **Americas Segment Profit** | **$563.8** | **13.1%** | **$498.5** | | Organic Growth | $61.3 | 12.3% | $14.8 | | **International Segment Profit** | **$163.3** | **4.8%** | **$155.8** | | Organic Growth | ($10.9) | (7.0)% | ($22.4) | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) Cash flow from operations decreased to $179.7 million in fiscal 2021, while financing activities used $1,069.1 million for debt and share repurchases - Cash flow from operating activities was **$179.7 million** in fiscal 2021, a **$209.6 million decrease** from the prior year, primarily due to increased inventory investment[327](index=327&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk) - Net cash used by investing activities was **$126.4 million**, including **$64.9 million in capital expenditures** and **$67.2 million for acquisitions**[331](index=331&type=chunk) - Net cash used by financing activities was **$1,069.1 million**, reflecting debt refinancing, **$96.3 million in treasury stock purchases**, and dividend payments[335](index=335&type=chunk)[338](index=338&type=chunk) - As of September 30, 2021, the company had **$238.9 million in cash** and **$287.3 million available** under its revolving credit facility[322](index=322&type=chunk)[325](index=325&type=chunk) [Critical Accounting Policies](index=51&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant management judgment and estimates in areas such as revenue recognition, pension plans, goodwill, and income taxes - Critical accounting policies involve significant management judgment and estimates in areas such as **revenue recognition, pension benefits, goodwill, and income taxes**[357](index=357&type=chunk) - Revenue recognition involves estimating variable consideration for trade promotions based on historical patterns and future expectations[360](index=360&type=chunk) - Valuation of goodwill and intangible assets requires significant estimates for growth and discount rates, with annual impairment testing[366](index=366&type=chunk)[368](index=368&type=chunk)[370](index=370&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from currency rates, commodity prices, and interest rates, using derivatives to hedge these exposures - The company is exposed to market risks from **currency rates, commodity prices, and interest rates**, utilizing derivatives for hedging purposes[379](index=379&type=chunk)[381](index=381&type=chunk) - Approximately **40% of fiscal 2021 sales** from foreign countries create significant currency exposure, particularly to major currencies[382](index=382&type=chunk)[383](index=383&type=chunk) - As of September 30, 2021, the company had **$1,299.0 million in variable rate debt** and used an interest rate swap to fix the LIBOR component on **$700.0 million** notional amount[390](index=390&type=chunk)[391](index=391&type=chunk) [Financial Statements and Supplementary Data](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements and the independent auditor's unqualified opinion, highlighting revenue recognition as a critical audit matter - PricewaterhouseCoopers LLP issued an **unqualified opinion** on the consolidated financial statements and internal control over financial reporting as of September 30, 2021[401](index=401&type=chunk) - The critical audit matter identified was **Revenue Recognition** related to trade promotion programs, due to significant management judgment[409](index=409&type=chunk)[410](index=410&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=109&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This section is not applicable - Not applicable[731](index=731&type=chunk) [Controls and Procedures](index=109&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of September 30, 2021 - Management concluded that the company's **disclosure controls and procedures were effective** as of September 30, 2021[732](index=732&type=chunk) - Management determined that the company's **internal control over financial reporting was effective** as of September 30, 2021[734](index=734&type=chunk) [Other Information](index=109&type=section&id=Item%209B.%20Other%20Information) This section is not applicable - Not applicable[737](index=737&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=109&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section is not applicable - Not applicable[738](index=738&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=110&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement - Information regarding **directors, executive officers, and corporate governance** is incorporated by reference from the company's Proxy Statement[741](index=741&type=chunk) [Executive Compensation](index=110&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning director and executive compensation is incorporated by reference from the 2022 Proxy Statement - Information regarding **executive compensation** is incorporated by reference from the company's Proxy Statement[742](index=742&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=110&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans is incorporated by reference from the 2022 Proxy Statement - Information regarding **security ownership** is incorporated by reference from the company's Proxy Statement[743](index=743&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=110&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2022 Proxy Statement - Information regarding **certain relationships, related transactions, and director independence** is incorporated by reference from the company's Proxy Statement[744](index=744&type=chunk) [Principal Accountant Fees and Services](index=110&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2022 Proxy Statement - Information regarding **principal accountant fees and services** is incorporated by reference from the company's Proxy Statement[745](index=745&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=112&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including certifications by the CEO and CFO - This item lists all **financial statements, schedules, and exhibits** filed with the Form 10-K[748](index=748&type=chunk) [Form 10-K Summary](index=117&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided - None[761](index=761&type=chunk)

Financial Data and Key Metrics Changes - The company achieved over $3 billion in net sales for the first time, with a 10.1% increase in net sales for fiscal 2021, and organic sales growth of 7.3% [8][26] - Adjusted earnings per share increased by 51% to $3.48, while adjusted EBITDA rose by 10% [27] - Adjusted gross margin decreased by 100 basis points to 37.7% due to inflationary cost pressures [23][26] Business Line Data and Key Metrics Changes - The Auto Care business experienced nearly 17% growth, benefiting from elevated demand and distribution gains [8][9] - The Battery business faced a decline in organic revenue, down less than 1% in the fourth quarter compared to 6% growth in the prior year [22] - The Auto Care category showed consistent growth, with a 3.5% increase in value compared to the previous year [14] Market Data and Key Metrics Changes - The global Battery category grew by 2.9% in value and 3.7% in volume on a two-year stack basis, despite a decline in the category in the near term [11][12] - The Auto Care category's household penetration reached nearly 75%, with a 20% increase in buy rate [14] Company Strategy and Development Direction - The company plans to mitigate rising costs through pricing actions against approximately 85% of its business, with a focus on maintaining brand preference and market share [17][19] - The company is exploring additional pricing opportunities and cost reduction initiatives to offset inflationary pressures [19][32] - The strategic focus includes investing in brands and expanding Auto Care internationally [15][60] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatile macro environment, with rising costs related to commodities, transportation, and labor expected to continue throughout 2022 [16][31] - The outlook for fiscal 2022 anticipates organic sales to be roughly flat, with expected declines in Battery volume due to prior year elevated demand [19][30] - Management remains optimistic about the long-term growth potential of the Auto Care category and the resilience of its brands [15][66] Other Important Information - The company proactively built inventory to ensure product availability during peak selling seasons, resulting in a 42% increase in inventory compared to the prior year [18] - The company entered into a $75 million accelerated share repurchase program, with approximately 1.9 million shares repurchased under this program [25] Q&A Session Summary Question: Comments on gross margin and pricing opportunities - Management indicated that pricing actions have been taken on 85% of the business, with ongoing evaluations for additional pricing opportunities [36] - Commodity costs are expected to worsen, leading to an anticipated gross margin erosion of approximately 150 basis points [39][40] Question: Long-term view on gross margin rebuilding - Management emphasized a focus on recouping dollars related to inflation and identified opportunities for efficiency improvements in the long term [45][46] Question: Inventory management for fiscal 2022 - Management plans to cautiously reduce elevated inventory levels while considering the current operating environment [47] Question: Impact of cost pressures on pricing - Management acknowledged that costs have increased beyond initial expectations, affecting pricing strategies during the peak season [49] Question: Supply chain issues and their impact - Supply chain congestion affects both Battery and Auto Care businesses, with management taking proactive steps to manage inventory and logistics [51][52] Question: Online business performance - The company reported robust growth in e-commerce, with consumers showing a strong preference for branded products in both Battery and Auto Care categories [60] Question: Auto Care growth sustainability - Management plans to sustain Auto Care growth through innovation and international expansion, with positive consumer engagement trends [64][66]

Financial Data and Key Metrics Changes - The company reported a topline growth of nearly 10% driven by strong growth in the auto care business and international battery sales, partially offset by declines in the North America battery business [9][10] - Organic sales growth was 5.8%, with adjusted EPS increasing to $0.74, a nearly 50% increase year-over-year [10][25] - Adjusted EBITDA for the quarter was $144 million, up 7% compared to the prior year [25][30] Business Line Data and Key Metrics Changes - The auto care business experienced over 25% growth, while the international battery business also showed strong growth [10][26] - The Americas segment grew 4.7%, with auto care showing strong double-digit growth, while the international segment grew 9.1% [26] - The gross margin decreased by 160 basis points to 39.2% due to rising input costs and the lower margin profile of the auto care business [10][27] Market Data and Key Metrics Changes - Battery consumption was down 11.6% year-over-year but up 9.5% compared to 2019, indicating a recovery trend [16] - The auto care category grew 19% year-over-year and 21% compared to two years ago, driven by increased consumer engagement in DIY activities [17][19] - The company gained a 2.8 share point in the battery category due to increased distribution and visibility [16] Company Strategy and Development Direction - The company is focused on offsetting rising operating costs through cost reduction initiatives and pricing strategies [8][12] - Plans to repurchase $75 million of stock through an accelerated share repurchase program, indicating confidence in future growth [11] - The company is investing in inventory to mitigate supply chain disruptions and ensure high service levels during peak seasons [13][50] Management's Comments on Operating Environment and Future Outlook - Management noted that operating costs have risen rapidly and are expected to continue, with a focus on managing these pressures [13][30] - The company increased its full fiscal year outlook for net sales growth to 8% to 9% [10][32] - Management expressed confidence in the long-term growth prospects of their categories, driven by sustained changes in consumer behavior [15][36] Other Important Information - The CFO announced his retirement, with John Drabik set to take over the role effective October 1 [20][21] - The company has recognized approximately $124 million in synergies since its acquisitions, exceeding initial targets [28] Q&A Session Summary Question: Discussion on pricing cost offsets and gross margins - Management indicated that pricing actions are expected to provide minimal benefit in Q1, with more significant impacts anticipated in the second half of fiscal 2022 [39][40] Question: Insights on auto care season and consumer behavior - Management noted that consumer behaviors around cleaning and car care have persisted, contributing to elevated demand [45][46] Question: Reinvestment in SG&A and supply chain visibility - Management confirmed that current reinvestment plans are included in the outlook, with improved visibility into the supply chain leading to proactive inventory management [49][50] Question: CapEx expectations and inventory accumulation - Management indicated that CapEx is expected to return to historical levels of 1.5% to 2% of net sales, with inventory accumulation primarily in raw materials [59][60] Question: Share buyback program and competitive environment - Management explained that the share buyback program is part of a broader capital allocation strategy, with recent distribution gains coming primarily at the expense of Duracell [62][64]

Financial Performance - Q3 Fiscal 2021 - Net sales increased by 9.7% to $721.8 million[8] - Organic net sales grew by 5.8%[8] - Adjusted EPS was $0.74[8], driven by organic net sales growth, synergy realization, and interest savings, slightly offset by higher A&P[8] - Adjusted EBITDA reached $144.4 million with a margin of 20.0%[8] - Adjusted Free Cash Flow was $42.6 million[8], decreased from prior year as inventory investments were made to service continued high levels of demand and rebuild safety stock[8] Financial Performance - Q3 Fiscal 2020 to Q3 Fiscal 2021 - Adjusted Gross Margin increased from 39.2% to 40.8%[10] - Adjusted EPS increased from $0.50 to $0.74[11] - Adjusted EBITDA increased from $134.6 million to $144.4 million[11] Fiscal 2021 Outlook - Net sales are expected to grow by 8% to 9%[12], attributed to distribution gains, elevated battery demand, and favorable currency impacts[12] - Adjusted EBITDA is projected to be between $620 million and $640 million[12] - Adjusted Free Cash Flow is expected to exceed $225 million[12], reflecting the impact of incremental investment in inventory to support the upcoming peak battery season[12] - Adjusted EPS is forecasted to be in the range of $3.30 to $3.50[12] - Adjusted Gross Margin Rate is expected to decrease by 80 to 110 basis points due to increasing inflationary cost pressures[13]

Financial Data and Key Metrics Changes - The company reported organic sales growth of 12.7%, with adjusted earnings per share of $0.77, more than double the prior year [8][9][25] - Adjusted EBITDA for the quarter was $148 million, up 20% compared to the prior year [25] - The adjusted gross margin decreased by 110 basis points to 40.5%, primarily due to increased operating costs from tariffs, transportation, and product input costs [27][28] Business Line Data and Key Metrics Changes - The Americas segment showed organic growth of nearly 16%, while the International segment grew by 6% [26] - The Battery and Auto Care businesses benefited from elevated demand and distribution gains, with Auto Care experiencing a healthy category growth of 7.4% [14][26] Market Data and Key Metrics Changes - In the U.S., the battery category experienced a 13.9% decline year-over-year in the most recent four weeks, but was up 14.1% when compared to pre-pandemic levels [12][13] - Internationally, the battery category saw growth, with France up nearly 11%, Australia up 7%, and Germany up 18.5% [84] Company Strategy and Development Direction - The company is focused on managing costs and pricing strategies to offset inflationary pressures, with a goal of delivering over $120 million in synergies by the end of fiscal 2021 [21][34] - There is an emphasis on innovation and brand building, particularly in the Auto Care segment, with a strong innovation pipeline and increased production capabilities [22][61] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued inflationary pressures and has initiated productivity and revenue management efforts to mitigate these costs [18][19] - The company is optimistic about the battery category's long-term growth potential, citing increased device usage and consumer habits that are likely to persist post-pandemic [49][50] Other Important Information - The company has increased its full fiscal year outlook, expecting net sales growth of 5% to 7% and adjusted earnings per share in the range of $3.30 to $3.50 [10][34] - E-commerce sales have increased by 70% across the combined portfolio, reflecting successful investments and focus in this area [16][78] Q&A Session Summary Question: Can you elaborate on gross margin and commodity outlook? - Management indicated they are fully hedged for commodities for the rest of fiscal 2021 and about 25% hedged for fiscal 2022, with ongoing efforts to manage costs and pricing [44][42] Question: What are the assumptions for battery category growth in the back half of the fiscal year? - Management expects tough comparisons due to elevated demand but believes consumer habits will sustain higher battery usage [48][49] Question: Can you provide details on pricing actions in AutoCare versus batteries? - Price increases in AutoCare were broad-based to offset inflationary pressures, while battery pricing actions will be considered based on a thorough analysis of costs and market dynamics [54][95] Question: How is the company addressing cost synergies and productivity? - The company continues to focus on continuous improvement and has exceeded synergy expectations, with further opportunities identified in the global product supply chain [76][77] Question: What is the outlook for e-commerce growth and market share? - E-commerce growth is robust, with the company maintaining its market share against competitors, although precise data is currently limited [78][80]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________ FORM 10-Q _______________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36837 _________________________________________________________ ...

Financial Data and Key Metrics Changes - The company reported organic sales growth of 12.7%, with battery sales up 11% and auto care sales up 27% globally [6][16] - Adjusted gross margin was 40.7%, reflecting a decrease of 110 basis points year-over-year but an improvement sequentially [17] - Adjusted earnings per share grew by 38% to $1.17, and adjusted EBITDA increased by 17% to $192 million [16][22] - The company increased its full-year adjusted earnings per share outlook to a range of $3.10 to $3.40 [6][22] Business Line Data and Key Metrics Changes - The battery category value increased by 6.9%, with Energizer gaining 2.5 share points driven by distribution gains [7] - Auto care in the U.S. grew over 10%, with strong growth in non-measured channels, including e-commerce [8] - The company realized $20 million in synergies during the quarter, with expectations of $40 million to $45 million for the full year [10][19] Market Data and Key Metrics Changes - International markets showed strong growth, with developed and developing markets contributing positively [61] - The company noted that the pandemic-driven demand would continue to influence sales, particularly in the battery category [9][23] Company Strategy and Development Direction - The company is focused on innovation, operational excellence, and productivity to navigate the pandemic and position for future growth [5][14] - Integration activities from recent acquisitions are on track, with a goal of achieving over $100 million in total synergies [10][19] - The company is modernizing its operational capabilities to become more digitally advanced and responsive to consumer behavior [11][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the operating environment due to the pandemic but expressed confidence in the company's strategic priorities [24][25] - The company anticipates that elevated demand for batteries will continue, but there may be a transition to more normalized demand levels later in the year [23][38] - Management is prepared for various scenarios as consumer habits evolve post-pandemic [53] Other Important Information - The company refinanced a portion of its debt, resulting in annualized interest savings of approximately $25 million [20][21] - The total debt at the end of the quarter was approximately $3.4 billion, with nearly 85% at fixed rates [20] Q&A Session Summary Question: Top line growth balance between volume and price/mix - Management indicated that they successfully captured demand with lower incremental costs and improving gross margins, expecting strong growth in Q1 and Q2 [26][27] Question: Competitive perspective regarding distribution gains - Management noted that while Duracell remains a strong competitor, the promotional environment has been stable, and they expect healthy competition [31][32] Question: Impact of debt refinancing on capital allocation - Management confirmed that there would be no change in their capital allocation strategy, maintaining a balanced approach [33] Question: Year-over-year declines in battery demand - Management explained that while there may be declines, they expect demand to settle between pre-pandemic levels and current elevated demand [36][38] Question: Outlook for auto care market share - Management expects share growth in auto care as new innovations are introduced and seasonal demand increases [40] Question: Commodity costs and pricing strategies - Management stated they are about 80% hedged for commodity costs and will monitor pricing opportunities as needed [45][46] Question: International business growth outlook - Management reported strong growth in international markets and expects this trend to continue despite some disruptions [61] Question: Clarification on sales outlook including acquisitions and FX - Management confirmed that the sales outlook includes contributions from acquisitions and favorable currency impacts [58][59]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements for Energizer Holdings, Inc., including earnings, balance sheets, cash flows, and detailed notes [Consolidated Statements of Earnings and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Income) | Financial Metric | Q1 2021 (ended Dec 31, 2020) | Q1 2020 (ended Dec 31, 2019) | | :--- | :--- | :--- | | **Net sales** | **$848.6M** | **$736.8M** | | Gross profit | $337.9M | $301.3M | | Earnings before income taxes | $87.3M | $58.7M | | **Net earnings from continuing operations** | **$67.1M** | **$45.8M** | | Net earnings attributable to common shareholders | $63.1M | $42.1M | | **Diluted EPS - continuing operations** | **$0.91** | **$0.60** | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) | Balance Sheet Item | Dec 31, 2020 | Sep 30, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $305.6M | $459.8M | | Total current assets | $1,340.0M | $2,210.9M | | Goodwill | $1,056.2M | $1,016.0M | | **Total assets** | **$4,929.1M** | **$5,728.3M** | | Total current liabilities | $777.8M | $1,648.4M | | Long-term debt | $3,345.0M | $3,306.9M | | **Total liabilities** | **$4,599.5M** | **$5,419.2M** | | **Total shareholders' equity** | **$329.6M** | **$309.1M** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | **Net cash from operating activities** | **$76.3M** | **$123.5M** | | Net cash used by investing activities | ($74.8M) | ($16.2M) | | Net cash used by financing activities | ($955.2M) | ($77.4M) | | Effect of exchange rate changes on cash | $9.5M | $5.1M | | **Net (decrease)/increase in cash** | **($944.2M)** | **$35.0M** | [Notes to Consolidated (Condensed) Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20(Condensed)%20Financial%20Statements) Provides detailed information on accounting policies, financial activities, including revenue, acquisitions, restructuring, debt, and segment performance Net Sales by Product Category (Q1) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Batteries | $706.1M | $621.9M | | Auto Care | $101.8M | $78.7M | | Lights, Licensing and Other | $40.7M | $36.2M | | **Total Net Sales** | **$848.6M** | **$736.8M** | - In Q1 FY2021, the company completed two acquisitions: the Formulations Acquisition for a cash purchase price of **$51.2 million** and the FDK Indonesia Acquisition for a contractual price of **$18.2 million** to increase alkaline battery production capacity[34](index=34&type=chunk)[40](index=40&type=chunk) - The company initiated a new restructuring program in Q4 FY2020 focused on its global supply chain, with expected costs of **$4 to $7 million**; total restructuring expenses for the quarter were **$10.6 million**, up from **$6.3 million** in the prior year[59](index=59&type=chunk)[60](index=60&type=chunk) - In December 2020, the company refinanced its debt by entering into a new Credit Agreement for a **$400 million** revolving facility and a **$550 million** Term Loan due 2027, using the proceeds to pay down existing term loans and its revolver[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 FY2021 financial results, highlighting strong sales growth, acquisitions, restructuring, debt refinancing, and changes in liquidity and segment performance [Highlights / Operating Results](index=35&type=section&id=Highlights%20%2F%20Operating%20Results) Net sales increased **15.2%** to **$848.6 million** driven by organic growth and acquisitions, with adjusted diluted EPS up **37.6%** despite gross margin decline Q1 Net Sales Growth Breakdown | Component | Contribution ($M) | % Change | | :--- | :--- | :--- | | Prior Year Net Sales | $736.8 | - | | Organic Growth | $93.3 | 12.7% | | Impact of FY 2021 Acquisitions | $9.6 | 1.3% | | Change in Argentina | $2.8 | 0.4% | | Impact of Currency | $6.1 | 0.8% | | **Current Year Net Sales** | **$848.6** | **15.2%** | - Organic net sales growth of **12.7%** was driven by new distribution (**5.5%**), increased replenishment volumes due to elevated demand (**4.0%**), timing of holiday/Brexit shipments (**2.2%**), and favorable pricing (**1.0%**)[218](index=218&type=chunk) Adjusted Gross Margin Reconciliation | Component | Basis Point Impact | | :--- | :--- | | **Gross Margin - FY'20 Adjusted** | **41.8%** | | Incremental COVID-19 costs | (130) bps | | Mix and product cost impacts | (150) bps | | Lower margin of acquired businesses | (40) bps | | Synergy realization | 180 bps | | Currency impact | 30 bps | | **Gross Margin - FY'21 Adjusted** | **40.7%** | [Segment Results](index=38&type=section&id=Segment%20Results) Americas and International segments showed strong net sales growth, with total segment profit increasing **18.9%** to **$215.7 million** driven by top-line growth and synergies Q1 Segment Performance vs. Prior Year | Segment | Net Sales | % Change | Organic % Change | Segment Profit | % Change | Organic % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Americas** | $586.6M | 14.0% | 12.8% | $155.9M | 20.7% | 20.0% | | **International** | $262.0M | 17.9% | 12.3% | $59.8M | 14.6% | 1.3% | | **Total** | **$848.6M** | **15.2%** | **12.7%** | **$215.7M** | **18.9%** | **14.6%** | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow decreased due to working capital changes, while significant debt refinancing and share repurchases impacted financing activities, with **$392.3 million** available under the revolving credit facility - Operating cash flow decreased by **$57.2 million** year-over-year, primarily due to working capital changes, including a prior year VAT refund and current year inventory investment[250](index=250&type=chunk) - The company executed significant debt refinancing, including issuing a new **$550 million** Term Loan and repaying **$1,383.3 million** of existing debt, resulting in a **$5.7 million** loss on extinguishment of debt for the quarter[254](index=254&type=chunk)[226](index=226&type=chunk) - A new share repurchase program for up to **7.5 million** shares was approved in November 2020, with **500,000 shares** repurchased for **$21.3 million** during the quarter[261](index=261&type=chunk)[114](index=114&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from currency, commodity, and interest rate changes, which are hedged using derivative instruments, and addresses the impact of Argentina's inflationary economy - The company hedges foreign currency risk, primarily for the Euro, British pound, Canadian dollar, and Australian dollar, using forward contracts, resulting in an unrealized pre-tax loss of **$10.2 million** as of December 31, 2020[269](index=269&type=chunk)[270](index=270&type=chunk) - To manage interest rate risk on its variable rate debt, the company entered into a new interest rate swap in December 2020, fixing the LIBOR component on **$550.0 million** of debt at **0.95%**[276](index=276&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2020, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[279](index=279&type=chunk) [PART II — OTHER INFORMATION](index=47&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, but management believes any resulting liability will not be material to its financial position or results - The company states that its liability from pending legal proceedings is not reasonably likely to be material to its financial position or results[282](index=282&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **500,000 shares** for **$21.3 million** under a new authorization and acquired additional shares for tax withholding obligations during Q1 FY2021 Issuer Purchases of Equity Securities (Q1 FY2021) | Period | Total Shares Purchased | Average Price Paid | Shares Purchased Under Plan | Max Shares Remaining Under Plan | | :--- | :--- | :--- | :--- | :--- | | Oct 2020 | 135 | $40.24 | — | 1,822,655 | | Nov 2020 | 305,719 | $42.47 | 150,698 | 7,349,302 | | Dec 2020 | 349,302 | $42.91 | 349,302 | 7,000,000 | | **Total** | **655,156** | **$42.70** | **500,000** | **7,000,000** | [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) References the Exhibit Index, listing all agreements and documents filed as part of the Form 10-Q