Core Viewpoint - Energizer Holdings reported strong Q3 fiscal 2025 results, with both net sales and earnings exceeding estimates, indicating potential for future growth despite recent stock underperformance [2][3]. Financial Performance - Adjusted earnings per share were $1.13, surpassing the Zacks Consensus Estimate of 61 cents, and increased by 43% year-over-year [3]. - Net sales reached $725.3 million, exceeding the Zacks Consensus Estimate of $702 million, and grew by 3.4% compared to the previous year [3]. - Organic net sales saw a modest increase of 0.1% year-over-year, driven by a 1.7% growth in volume, primarily from the Battery & Lights category [4]. Segment Performance - The Batteries & Lights segment net sales increased by 5.1% year-over-year to $535.1 million, with segment profit rising by 22.7% to $158.8 million [5]. - Conversely, the Auto Care segment experienced a 1.1% decline in net sales to $190.2 million, with segment profit decreasing by 10.1% to $24.1 million [5]. Margin and Cost Analysis - Adjusted gross profit was $325.0 million, an 11.7% increase year-over-year, with adjusted gross margin expanding by 330 basis points to 44.8% [6]. - Adjusted SG&A expenses rose by 4.4% year-over-year to $123.6 million, influenced by costs from the APS NV acquisition and investments in digital transformation [7]. - Adjusted EBITDA was $171.4 million, reflecting a 14.5% year-over-year increase, with the adjusted EBITDA margin increasing by 230 basis points to 23.6% [9]. Financial Health - As of June 30, 2025, cash and cash equivalents stood at $171.1 million, with long-term debt of $3.22 billion and shareholders' equity of $183.2 million [10]. - Operating cash flow for the fiscal third quarter was $85.6 million, and free cash flow was $16.5 million [10]. - The company repurchased 2.8 million shares for $62.6 million during the third quarter, with additional repurchases following the quarter [10]. Future Outlook - For fiscal year 2025, Energizer expects net sales growth of 1% to 3%, including $40 to $50 million from the APS NV acquisition [11]. - The company raised its full-year adjusted earnings per share guidance to $3.55 to $3.65, up from the previous estimate of $3.30 to $3.50 [12]. - For Q4, reported net sales growth is projected between 2% and 4%, while organic net sales are expected to be flat to down 2% [13]. Market Sentiment - Recent estimates for Energizer have trended downward, with a consensus estimate shift of -21.04% [14]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [16].

Core Insights - Energizer Holdings, Inc. has partnered with the Jeep brand to launch a new collection of high-performance lighting products designed for outdoor enthusiasts [1][2][3] - The collaboration aims to inspire a new generation of explorers by combining Jeep's off-road spirit with Energizer's innovative lighting technology [2][3] Product Overview - The Jeep x Energizer® lighting collection includes eight products such as headlamps, flashlights, lanterns, and keychain accessories, all engineered for durability and versatility [1][2] - Key products in the collection feature high brightness levels, with the Hybrid Headlamp providing up to 2,100 lumens and the High Lumen Metal Flashlight delivering up to 10,000 lumens in Boost mode [4] Company Background - Energizer Holdings, Inc. is a leading manufacturer of primary batteries and portable lighting products, recognized for brands like Energizer, EVEREADY, Rayovac, and VARTA [5] - The Jeep brand has over 80 years of experience in the SUV market, known for its off-road capability and commitment to innovation [6]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and comprehensive notes on business, accounting, acquisitions, restructuring, and segment performance [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including earnings, balance sheets, cash flows, and equity, with detailed notes on business, policies, acquisitions, and segment performance [Consolidated Statements of Earnings and Comprehensive Income (Condensed)](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Income%20(Condensed)) The company reported a significant turnaround in net earnings for both the quarter and nine months ended June 30, 2025, primarily driven by a substantial increase in gross profit and the absence of a prior-year intangible asset impairment | Metric (in millions, except per share data) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :---------------------------------------- | :------ | :------ | :------ | :------ | | Net sales | $725.3 | $701.4 | $2,119.9 | $2,081.3 | | Cost of products sold | $325.6 | $424.2 | $1,191.6 | $1,283.8 | | Gross profit | $399.7 | $277.2 | $928.3 | $797.5 | | Selling, general and administrative expense | $128.3 | $129.6 | $395.6 | $380.2 | | Advertising and sales promotion expense | $43.4 | $37.9 | $117.6 | $106.3 | | Research and development expense | $8.2 | $7.4 | $24.3 | $23.1 | | Amortization of intangible assets | $14.7 | $14.5 | $44.1 | $43.5 | | Impairment of intangible assets | — | $110.6 | — | $110.6 | | Interest expense | $39.0 | $38.5 | $114.0 | $117.9 | | Loss on extinguishment/modification of debt | — | $1.2 | $5.3 | $2.1 | | Other items, net | $1.9 | $(5.0) | $(3.3) | $19.5 | | Earnings/(loss) before income taxes | $164.2 | $(57.5) | $230.7 | $(5.7) | | Income tax provision/(benefit) | $10.7 | $(13.7) | $26.6 | $3.8 | | Net earnings/(loss) | $153.5 | $(43.8) | $204.1 | $(9.5) | | Basic net earnings/(loss) per common share | $2.16 | $(0.61) | $2.84 | $(0.13) | | Diluted net earnings/(loss) per common share | $2.13 | $(0.61) | $2.80 | $(0.13) | | Total comprehensive income | $127.6 | $(51.7) | $164.0 | $(35.5) | [Consolidated Balance Sheets (Condensed)](index=5&type=section&id=Consolidated%20Balance%20Sheets%20(Condensed)) The company's total assets increased from September 30, 2024, to June 30, 2025, primarily driven by higher inventories and other current assets, while shareholders' equity also saw a notable increase | Metric (in millions) | June 30, 2025 | September 30, 2024 | | :------------------- | :------------ | :----------------- | | Cash and cash equivalents | $171.1 | $216.9 | | Inventories | $870.1 | $657.3 | | Total current assets | $1,642.4 | $1,478.9 | | Total assets | $4,516.0 | $4,342.4 | | Total current liabilities | $924.3 | $819.8 | | Long-term debt | $3,218.4 | $3,193.0 | | Total liabilities | $4,332.8 | $4,206.6 | | Total shareholders' equity | $183.2 | $135.8 | [Consolidated Statements of Cash Flows (Condensed)](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Condensed)) Net cash from operating activities significantly decreased for the nine months ended June 30, 2025, primarily due to working capital changes, particularly an increase in inventories. Investing activities saw a slight decrease in cash used, while financing activities used substantially less cash compared to the prior year | Metric (in millions) | 9M 2025 | 9M 2024 | | :------------------- | :------ | :------ | | Net cash from operating activities | $85.6 | $260.7 | | Net cash used by investing activities | $(81.9) | $(89.0) | | Net cash used by financing activities | $(49.8) | $(223.9) | | Net decrease in cash, cash equivalents, and restricted cash | $(45.8) | $(76.6) | | Cash, cash equivalents, and restricted cash, end of period | $171.1 | $146.7 | [Consolidated Statements of Shareholders' Equity (Condensed)](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Condensed)) Shareholders' equity increased from September 30, 2024, to June 30, 2025, driven by net earnings, share-based payments, and a decrease in treasury stock, despite ongoing dividends and other comprehensive losses Common Stock and Equity Balances (in millions, Shares in thousands) | Metric (in millions, Shares in thousands) | September 30, 2024 | June 30, 2025 | | :---------------------------------------- | :----------------- | :------------ | | Common Stock (Shares) | 71,810 | 69,415 | | Common Stock (Amount) | $0.8 | $0.8 | | Additional Paid-in Capital | $667.6 | $597.5 | | Retained (Losses)/Earnings | $(128.4) | $73.4 | | Accumulated Other Comprehensive (Loss)/Income | $(180.6) | $(220.7) | | Treasury Stock | $(223.6) | $(267.8) | | Total Shareholders' Equity | $135.8 | $183.2 | - The company repurchased **2,793 thousand common shares** for **$62.6 million** during the nine months ended June 30, 2025[15](index=15&type=chunk) - Dividends of **$0.30 per share** were paid to common shareholders each quarter[15](index=15&type=chunk) [Notes to Consolidated (Condensed) Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20(Condensed)%20Financial%20Statements) This section provides detailed disclosures on the company's business, accounting policies, acquisitions, restructuring, segment performance, income taxes, debt, and financial instruments [(1) Description of Business and Basis of Presentation](index=9&type=section&id=(1)%20Description%20of%20Business%20and%20Basis%20of%20Presentation) Energizer Holdings, Inc. is a global manufacturer and marketer of primary batteries, portable lights, and auto care products, operating under various well-known brands. The financial statements are condensed and prepared in accordance with Regulation S-X, with management's opinion that all necessary adjustments for fair presentation have been included - Energizer is a global manufacturer, marketer, and distributor of primary batteries, portable lights, and auto care appearance, performance, refrigerants, and fragrance products[19](index=19&type=chunk) - Key brands include Energizer®, Eveready®, Rayovac®, Varta® for batteries and lights, and Armor All®, Nu Finish®, Refresh Your Car!®, LEXOL®, Eagle One®, etc. for auto care products[20](index=20&type=chunk) - The company adopted ASU No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures, effective for fiscal year ending September 30, 2025[23](index=23&type=chunk) - New accounting pronouncements, ASU No. 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), are effective for fiscal years ending September 30, 2026, and after December 15, 2026, respectively, with impact currently being assessed[24](index=24&type=chunk)[25](index=25&type=chunk) [(2) Revenue Recognition](index=9&type=section&id=(2)%20Revenue%20Recognition) Revenue is primarily generated from finished product sales, recognized when title and risk of loss pass to the customer. The company provides a detailed breakdown of net sales by product category and market segment, including North America, Modern, Developing, Distributor, and Global Professional Markets - Revenue is recognized at a single point in time when title, ownership, and risk of loss pass to the customer, typically upon delivery or carrier pickup[27](index=27&type=chunk)[29](index=29&type=chunk) Net Sales by Products (in millions) | Product Category | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--------------- | :------ | :------ | :------ | :------ | | Batteries | $515.9 | $486.7 | $1,592.9 | $1,538.2 | | Auto Care | $190.2 | $192.3 | $464.4 | $473.4 | | Lights | $19.2 | $22.4 | $62.6 | $69.7 | | **Total Net Sales** | **$725.3** | **$701.4** | **$2,119.9** | **$2,081.3** | Net Sales by Markets (in millions) | Market Segment | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | North America Market | $408.3 | $410.6 | $1,172.0 | $1,153.6 | | Modern Markets | $111.3 | $98.5 | $356.3 | $339.5 | | Developing Markets | $80.0 | $78.2 | $245.0 | $250.0 | | Distributors Markets | $53.9 | $41.7 | $137.1 | $117.9 | | Global Professional Markets | $71.8 | $72.4 | $209.5 | $220.3 | | **Total Net Sales** | **$725.3** | **$701.4** | **$2,119.9** | **$2,081.3** | [(3) Acquisitions](index=10&type=section&id=(3)%20Acquisitions) Energizer completed three acquisitions: Advanced Power Solutions NV (APS NV) in May 2025 for additional production capacity and customer base in Europe, Centralsul Ltda. in May 2024 to expand Auto Care presence in Brazil, and battery manufacturing assets in Belgium in October 2023. These acquisitions resulted in goodwill recognition for Centralsul and Belgium, and the company incurred related acquisition and integration costs - On May 2, 2025, Energizer acquired Advanced Power Solutions NV (APS NV) for **EUR13.3 million (USD$15.2 million)**, gaining production capacity and an expanded customer base in Europe[33](index=33&type=chunk) - On May 8, 2024, the company acquired Centralsul Ltda. for approximately **$15 million**, increasing its Auto Care presence in Southern Brazil, recognizing **$14.6 million** in goodwill[37](index=37&type=chunk)[38](index=38&type=chunk) - On October 27, 2023, Energizer acquired battery manufacturing assets in Belgium for **EUR3.5 million**, recording **$0.7 million** in goodwill[39](index=39&type=chunk) Acquisition and Integration Costs (in millions) | Expense Category | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--------------- | :------ | :------ | :------ | :------ | | SG&A | $1.3 | $1.4 | $4.8 | $2.8 | | Cost of products sold | — | $0.2 | — | $3.1 | | Other items, net | — | — | — | $(1.0) | | **Total** | **$1.3** | **$1.6** | **$4.8** | **$4.9** | [(4) Restructuring](index=12&type=section&id=(4)%20Restructuring) Project Momentum, a profit recovery program, continued with an expanded scope to optimize manufacturing, distribution, and supply chain networks, and enhance organizational efficiency. The program is expected to incur over $180 million in cash operating costs, approximately $30 million in non-cash costs, and $80-90 million in capital expenditures by the end of fiscal 2025, aiming for over $200 million in total pre-tax savings - Project Momentum aims to recover operating margins, optimize manufacturing, distribution, and global supply chain networks, and enhance organizational efficiency[45](index=45&type=chunk) - Estimated total pre-tax exit-related cash operating costs are over **$180 million**, non-cash costs approximately **$30 million**, and capital expenditures **$80-90 million** by end of fiscal 2025[46](index=46&type=chunk) Project Momentum Restructuring Program Costs (in millions) | Cost Category | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :------------ | :------ | :------ | :------ | :------ | | Costs of products sold | $2.9 | $13.4 | $21.0 | $41.7 | | SG&A | $3.4 | $7.0 | $12.0 | $17.3 | | SG&A - IT Enablement | $1.7 | $2.8 | $13.2 | $10.0 | | Other items, net | — | $(4.4) | $(0.3) | $(4.4) | | **Total** | **$8.0** | **$18.8** | **$45.9** | **$64.6** | Restructuring and Related Costs Reserve Activity (in millions) | Reserve Category | Balance Sep 30, 2024 | Charge to Income | Cash Utilized | Non-Cash Utilized | Balance Jun 30, 2025 | | :--------------- | :------------------- | :--------------- | :------------ | :---------------- | :------------------- | | Severance & termination related costs | $7.2 | $4.0 | $3.8 | — | $7.4 | | Accelerated depreciation & fixed asset write-offs | — | $4.2 | — | $4.2 | — | | Other restructuring related costs | $12.4 | $24.5 | $33.6 | — | $3.3 | | IT enablement | $2.1 | $13.2 | $12.9 | $2.1 | $0.3 | | **Total** | **$21.7** | **$45.9** | **$50.3** | **$6.3** | **$11.0** | [(5) Segments](index=14&type=section&id=(5)%20Segments) Energizer manages its operations through two product segments: Batteries & Lights and Auto Care. Segment performance is evaluated based on segment operating profit, excluding corporate-level expenses. Both segments saw an increase in net sales and segment profit for the nine months ended June 30, 2025, with Batteries & Lights showing stronger growth - Segment performance is evaluated based on segment operating profit, excluding general corporate expenses, amortization of intangibles, impairment, acquisition/integration costs, restructuring costs, network transition costs, production credits, litigation, and other corporate items[54](index=54&type=chunk) Segment Net Sales (in millions) | Segment | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--------------- | :------ | :------ | :------ | :------ | | Batteries & Lights | $535.1 | $509.1 | $1,655.5 | $1,607.9 | | Auto Care | $190.2 | $192.3 | $464.4 | $473.4 | | **Total Net Sales** | **$725.3** | **$701.4** | **$2,119.9** | **$2,081.3** | Segment Profit (in millions) | Segment | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--------------- | :------ | :------ | :------ | :------ | | Batteries & Lights | $158.8 | $129.4 | $390.4 | $375.3 | | Auto Care | $24.1 | $26.8 | $79.8 | $74.1 | | **Total Segment Profit** | **$182.9** | **$156.2** | **$470.2** | **$449.4** | Total Segment Assets (in millions) | Segment | June 30, 2025 | September 30, 2024 | | :--------------- | :------------ | :----------------- | | Batteries & Lights | $1,595.5 | $1,421.1 | | Auto Care | $405.5 | $352.7 | | **Total segment assets** | **$2,001.0** | **$1,773.8** | | Corporate | $438.7 | $451.7 | | Goodwill and other intangible assets | $2,076.3 | $2,116.9 | | **Total assets** | **$4,516.0** | **$4,342.4** | [(6) Earnings per share](index=16&type=section&id=(6)%20Earnings%20per%20share) The company reported significantly improved basic and diluted net earnings per common share for the quarter and nine months ended June 30, 2025, compared to losses in the prior year, with a slight increase in weighted average shares outstanding Basic and Diluted Earnings/(Loss) Per Share (in millions, except per share data) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :----- | :------ | :------ | :------ | :------ | | Net earnings/(loss) | $153.5 | $(43.8) | $204.1 | $(9.5) | | Weighted average common shares outstanding - Basic | 71.2 | 71.8 | 71.8 | 71.7 | | Basic net earnings/(loss) per common share | $2.16 | $(0.61) | $2.84 | $(0.13) | | Weighted average common shares outstanding - Diluted | 72.1 | 71.8 | 72.9 | 71.7 | | Diluted net earnings/(loss) per common share | $2.13 | $(0.61) | $2.80 | $(0.13) | - For Q3 2024 and 9M 2024, all RSU and performance-based RSU shares were excluded from diluted EPS calculation due to the net loss position, making their inclusion anti-dilutive[67](index=67&type=chunk) [(7) Income Taxes](index=16&type=section&id=(7)%20Income%20Taxes) The company recognized a significant reduction to Cost of products sold due to Advanced Manufacturing Production Credits under the Inflation Reduction Act (IRA), retroactive to January 1, 2023. This credit significantly impacted the effective tax rate for the current period, which was also influenced by prior year intangible asset impairment and the December 2023 Argentina Economic Reform - The company recognized an estimated **$112.4 million** reduction to Cost of products sold for Advanced Manufacturing Production Credits under the IRA, retroactive to January 1, 2023[72](index=72&type=chunk) - The credit included **$33.9 million** for fiscal 2025 production and **$78.5 million** for the retroactive adjustment[72](index=72&type=chunk) - The effective tax rate for Q3 2025 was **6.5% (provision)** and **11.5%** for 9M 2025, compared to a **23.8% benefit** and **66.7% expense** for the prior year comparative periods, respectively[73](index=73&type=chunk) - The prior year's rate was impacted by a **$110.6 million impairment loss** and **$22.0 million** in non-deductible exchange losses from the December 2023 Argentina Economic Reform[74](index=74&type=chunk) [(8) Goodwill and intangible assets](index=17&type=section&id=(8)%20Goodwill%20and%20intangible%20assets) Goodwill increased slightly to $1,050.1 million at June 30, 2025, primarily due to the Centralsul acquisition and cumulative translation adjustments. In fiscal 2024, the company recorded $110.6 million in indefinite-lived intangible asset impairments for the Rayovac and Varta trade names due to missed sales forecasts and elevated cost of capital Goodwill by Segment (in millions) | Segment | Balance at Oct 1, 2024 | Centralsul Acquisition | Cumulative Translation Adjustment | Balance at Jun 30, 2025 | | :--------------- | :--------------------- | :--------------------- | :-------------------------------- | :---------------------- | | Batteries & Lights | $897.9 | — | $3.9 | $901.8 | | Auto Care | $148.1 | $0.1 | $0.1 | $148.3 | | **Total** | **$1,046.0** | **$0.1** | **$4.0** | **$1,050.1** | - During Q3 fiscal 2024, the company recorded **$110.6 million** in indefinite-lived intangible asset impairments (**$85.2 million** for Rayovac and **$25.4 million** for Varta trade names) due to missed sales forecasts and elevated weighted average cost of capital[79](index=79&type=chunk) - The Varta trade name was converted to a definite-lived intangible asset with a **15-year useful life** after impairment, increasing annual amortization by approximately **$0.8 million**[81](index=81&type=chunk) Total Other Intangible Assets, Net (in millions) | Asset Category | Gross Carrying Amount (Jun 30, 2025) | Accumulated Amortization (Jun 30, 2025) | Net Carrying Amount (Jun 30, 2025) | | :------------- | :----------------------------------- | :-------------------------------------- | :--------------------------------- | | Amortizable intangible assets | $786.8 | $(401.5) | $385.3 | | Trademarks and trade names - indefinite lived | $640.9 | — | $640.9 | | **Total** | **$1,427.7** | **$(401.5)** | **$1,026.2** | [(9) Debt](index=19&type=section&id=(9)%20Debt) The company's total long-term debt increased slightly to $3,250.6 million at June 30, 2025. A significant refinancing occurred in March 2025, extending the maturity of the $760 million Senior Secured Term Loan to 2032 and the $500 million Revolving Credit Facility to 2030, resulting in a $5.3 million loss on extinguishment/modification of debt for the nine months ended June 30, 2025. The company remains in compliance with its debt covenants Long-Term Debt (in millions) | Debt Type | June 30, 2025 | September 30, 2024 | | :---------------------------------------- | :------------ | :----------------- | | Senior Secured Term Loan Facility due 2027 | — | $782.0 | | Senior Secured Term Loan Facility due 2032 | $760.0 | — | | 6.500% Senior Notes due 2027 | $300.0 | $300.0 | | 4.750% Senior Notes due 2028 | $583.7 | $583.7 | | 4.375% Senior Notes due 2029 | $791.3 | $791.3 | | 3.500% Senior Notes due 2029 (Euro Notes) | $766.2 | $723.8 | | Finance lease obligations | $49.4 | $49.2 | | **Total long-term debt, including current maturities** | **$3,250.6** | **$3,230.0** | - On March 19, 2025, the company refinanced and extended its **$760 million** Term Loan to 2032 and its **$500 million** Revolving Credit Facility to 2030, incurring **$8.0 million** in debt issuance costs and a **$5.2 million** loss on extinguishment/modification of debt[90](index=90&type=chunk) - As of June 30, 2025, **$120.0 million** was outstanding under the Revolving Facility, with **$372.4 million** available[93](index=93&type=chunk) Debt Maturities (in millions) | Period | Long-term debt | | :--------- | :------------- | | One year | $7.6 | | Two year | $7.6 | | Three year | $891.3 | | Four year | $1,565.1 | | Five year | $7.6 | | Thereafter | $722.0 | | **Total** | **$3,201.2** | [(10) Supply Chain Financing](index=21&type=section&id=(10)%20Supply%20Chain%20Financing) The company operates a voluntary Supplier Financing Program, allowing participating suppliers to receive early payments from third-party financial institutions. Energizer's obligations to suppliers remain unchanged, and it does not guarantee or assume liability for these agreements - The company has a voluntary Supplier Financing Program with financial institutions, allowing suppliers to request early payment of invoices[100](index=100&type=chunk) - As of June 30, 2025, **$55.9 million** in supplier obligations were confirmed under the program, included in Accounts payable[101](index=101&type=chunk) [(11) Pension Plans](index=21&type=section&id=(11)%20Pension%20Plans) The company sponsors several defined benefit pension plans, primarily frozen to new entrants. The net periodic pension cost for both U.S. and International plans showed a net benefit for U.S. plans and a net cost for International plans for the quarter and nine months ended June 30, 2025 Net Periodic Pension Cost (in millions) | Component | U.S. (Q3 2025) | U.S. (Q3 2024) | International (Q3 2025) | International (Q3 2024) | | :-------- | :------------- | :------------- | :---------------------- | :---------------------- | | Service cost | — | — | $0.2 | $0.1 | | Interest cost | $3.0 | $3.7 | $0.9 | $0.9 | | Expected return on plan assets | $(4.0) | $(3.2) | $(0.9) | $(1.0) | | Amortization of unrecognized net losses | $0.5 | $0.5 | $0.5 | $0.2 | | **Net periodic (benefit)/cost** | **$(0.5)** | **$1.0** | **$0.7** | **$0.2** | | Component | U.S. (9M 2025) | U.S. (9M 2024) | International (9M 2025) | International (9M 2024) | | :-------- | :------------- | :------------- | :---------------------- | :---------------------- | | Service cost | — | — | $0.4 | $0.3 | | Interest cost | $9.1 | $10.9 | $2.5 | $2.6 | | Expected return on plan assets | $(11.9) | $(9.8) | $(2.6) | $(2.7) | | Amortization of unrecognized net losses | $1.4 | $1.4 | $1.5 | $0.7 | | **Net periodic (benefit)/cost** | **$(1.4)** | **$2.5** | **$1.8** | **$0.9** | [(12) Financial Instruments and Risk Management](index=22&type=section&id=(12)%20Financial%20Instruments%20and%20Risk%20Management) The company uses derivative instruments to manage market risks from currency rates, interest rates, and commodity prices, primarily through forward currency contracts, interest rate swaps, and zinc contracts. These derivatives are used for hedging identifiable exposures, not for speculation, and are classified within a fair value hierarchy - The company uses derivatives to reduce exposure to commodity price, foreign currency, and interest rate risks, not for trading or speculative purposes[106](index=106&type=chunk)[109](index=109&type=chunk) - Foreign currency contracts hedge cash flow uncertainty of inventory purchases, with an unrealized pre-tax loss of **$7.7 million** at June 30, 2025[116](index=116&type=chunk) - Zinc contracts hedge future zinc purchases, with an unrealized pre-tax loss of **$0.8 million** at June 30, 2025[117](index=117&type=chunk) - An interest rate swap fixes the SOFR at **1.042%** on **$600.0 million** of variable rate debt, with an unrealized pre-tax gain of **$29.8 million** at June 30, 2025[115](index=115&type=chunk)[118](index=118&type=chunk) Estimated Fair Values of Financial Instruments (in millions) | (Liabilities)/Assets at estimated fair value | June 30, 2025 | September 30, 2024 | | :----------------------------------------- | :------------ | :----------------- | | Deferred compensation | $(19.5) | $(21.7) | | Derivatives - Foreign Currency contracts | $(7.7) | $(4.6) | | Derivatives - Foreign Currency contracts (non-hedge) | $2.4 | $2.9 | | Derivatives - Interest Rate Swap | $29.8 | $39.8 | | Derivatives - Zinc contracts | $(0.8) | $4.0 | | **Net Assets at estimated fair value** | **$4.2** | **$20.4** | [(13) Accumulated Other Comprehensive (Loss)/Income](index=26&type=section&id=(13)%20Accumulated%20Other%20Comprehensive%20(Loss)%2FIncome) Accumulated other comprehensive loss (AOCI) increased to $(220.7) million at June 30, 2025, from $(180.6) million at September 30, 2024, primarily due to foreign currency translation adjustments and reclassifications of cash flow hedge losses to earnings Changes in Accumulated Other Comprehensive (Loss)/Income (in millions) | Component | Balance Sep 30, 2024 | OCI before reclassifications | Reclassifications to earnings | Balance Jun 30, 2025 | | :-------- | :------------------- | :--------------------------- | :---------------------------- | :------------------- | | Foreign Currency Translation Adjustments | $(96.8) | $(27.0) | $(0.3) | $(124.1) | | Pension Activity | $(113.5) | $(1.4) | $2.2 | $(112.7) | | Zinc Contracts | $3.1 | $(1.1) | $(2.6) | $(0.6) | | Foreign Currency Contracts | $(3.7) | $(0.5) | $(1.8) | $(6.0) | | Interest Rate Contracts | $30.3 | $5.3 | $(12.9) | $22.7 | | **Total** | **$(180.6)** | **$(24.7)** | **$(15.4)** | **$(220.7)** | Reclassifications out of AOCI to Earnings (in millions) | AOCI Component | Q3 2025 Reclassified | Q3 2024 Reclassified | 9M 2025 Reclassified | 9M 2024 Reclassified | Affected Line Item | | :------------- | :------------------- | :------------------- | :------------------- | :------------------- | :----------------- | | Foreign currency contracts | $(0.3) | $(0.4) | $(2.5) | $(1.0) | Cost of products sold | | Interest rate contracts | $(5.1) | $(7.7) | $(16.9) | $(23.5) | Interest expense | | Zinc contracts | $(1.1) | $1.2 | $(3.4) | $6.5 | Cost of products sold | | Actuarial loss (pension) | $1.0 | $0.7 | $2.9 | $2.1 | Other items, net | | **Total reclassifications to earnings (Net earnings impact)** | **$(4.2)** | **$(4.8)** | **$(15.1)** | **$(12.1)** | Net earnings | [(14) Supplemental Financial Statement Information](index=27&type=section&id=(14)%20Supplemental%20Financial%20Statement%20Information) This note provides a detailed breakdown of specific income statement and balance sheet accounts, including 'Other items, net,' inventories, other current assets, property, plant and equipment, and various current and non-current liabilities Other Items, Net (in millions) | Component | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------- | :------ | :------ | :------ | :------ | | Interest income | $(0.2) | $(1.4) | $(2.0) | $(9.4) | | Foreign currency exchange loss/(gain) | $2.0 | $(0.3) | $(1.4) | $29.3 | | Pension cost other than service costs | — | $1.1 | — | $3.1 | | Loss on sale of available-for-sale securities | — | — | — | $1.0 | | Transition services agreement income | — | — | — | $(1.0) | | Other | $0.1 | $(4.4) | $0.1 | $(3.5) | | **Total Other items, net** | **$1.9** | **$(5.0)** | **$(3.3)** | **$19.5** | Inventories (in millions) | Component | June 30, 2025 | September 30, 2024 | | :-------- | :------------ | :----------------- | | Raw materials and supplies | $158.8 | $127.6 | | Work in process | $284.1 | $248.4 | | Finished products | $427.2 | $281.3 | | **Total inventories** | **$870.1** | **$657.3** | Other Current Liabilities (in millions) | Component | June 30, 2025 | September 30, 2024 | | :-------- | :------------ | :----------------- | | Accrued advertising, sales promotion and allowances | $19.4 | $19.9 | | Accrued trade allowances | $67.4 | $53.3 | | Accrued freight and warehousing | $50.2 | $42.6 | | Accrued salaries, vacations and incentive compensation | $54.4 | $69.5 | | Accrued interest expense | $10.8 | $20.4 | | Restructuring and related cost reserve | $10.1 | $21.5 | | Income taxes payable | $16.4 | $22.5 | | Other | $110.0 | $104.1 | | **Total other current liabilities** | **$338.7** | **$353.8** | [(15) Legal proceedings/contingencies and other obligations](index=29&type=section&id=(15)%20Legal%20proceedings%2Fcontingencies%20and%20other%20obligations) The company is involved in various legal proceedings, including consolidated class action lawsuits alleging price inflation for battery and lighting products, and a lawsuit by Varta Microbattery GmbH which resulted in a $13.7 million judgment against the company, currently under appeal. The company believes its liability from these matters is not reasonably likely to be material - Three purported class action lawsuits were filed against the company and Wal-Mart Inc. in 2023, alleging conspiracy to inflate prices of certain battery and lighting products[145](index=145&type=chunk) - The company has not recorded accruals for the class action lawsuits as the likelihood of loss is not probable nor estimable, and it intends to vigorously defend against the claims[145](index=145&type=chunk) - The company has approximately **$3.3 million** in purchase obligations under supply and service contracts at June 30, 2025[147](index=147&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Energizer's financial condition, results of operations, and liquidity, highlighting key financial performance, the impact of macroeconomic factors, production tax credits, intangible asset impairment, acquisitions, and restructuring efforts. It also includes forward-looking statements and non-GAAP financial measure reconciliations [Forward-Looking Statements](index=30&type=section&id=Forward-Looking%20Statements) This section outlines the inherent uncertainties and risks associated with the company's forward-looking statements, emphasizing that actual results could differ materially due to various factors, including global economic conditions, competition, supply chain issues, and regulatory changes - Forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially[151](index=151&type=chunk) - Key risk factors include global economic and financial market conditions, intense competition, changes in the retail environment, loss of brand reputation, reliance on key customers and suppliers, production cost volatility, international operation risks (tariffs, currency fluctuations), and the ability to achieve cost savings from restructuring[151](index=151&type=chunk) - Other risks include intellectual property protection, IT system failures, attracting/retaining key employees, significant debt obligations, pension plan losses, inaccurate financial projections, acquisition/divestiture challenges, product liability claims, increasing government regulations, ESG issues, and the uncertainty of Section 45X production tax credits[151](index=151&type=chunk)[155](index=155&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) The company uses several non-GAAP financial measures to provide additional insights into its ongoing operating performance, excluding items such as restructuring costs, acquisition and integration costs, intangible asset impairments, and production credits. These measures aim to enhance comparability and understanding for investors - Non-GAAP financial measures exclude items not reflective of ongoing operating performance, such as restructuring and related costs, network transition costs, acquisition and integration costs, FY23 & FY24 production credits, litigation matters, intangible asset impairment, loss on extinguishment/modification of debt, and the December 2023 Argentina Economic Reform[153](index=153&type=chunk) - Definitions provided for Segment Profit, Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Common Share (EPS), Non-GAAP Tax Rate, Organic (excluding hyperinflationary markets and currency impact), Acquisition Impact, Change in Hyperinflationary Markets, Impact of currency, Adjusted Gross Margin, Adjusted Selling, General & Administrative Expense (SG&A) as a percent of sales, and Adjusted Other items, net[154](index=154&type=chunk)[155](index=155&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) [Macroeconomic Environment](index=32&type=section&id=Macroeconomic%20Environment) The company continues to face an inflationary environment, geopolitical instability, and risks of higher tariffs, transportation costs, and commodity prices, which could impact profit margins and consumer demand. Tariffs are expected to have an unfavorable impact of approximately $20 million for the remainder of fiscal 2025, with neutralization anticipated in fiscal 2026 through mitigation strategies - The company operates in an inflationary environment with macroeconomic pressures and geopolitical instability, risking higher tariffs, transportation/logistical/supply constraints, and commodity costs[162](index=162&type=chunk) - Tariffs are estimated to have an unfavorable impact of approximately **$20 million** compared to the prior year for the remainder of fiscal 2025, expected to be neutralized in fiscal 2026 through pricing, sourcing changes, manufacturing network transitions, and cost initiatives[163](index=163&type=chunk) [Production Tax Credits under the Inflationary Reduction Act](index=32&type=section&id=Production%20Tax%20Credits%20under%20the%20Inflationary%20Reduction%20Act) Energizer recognized an estimated $112.4 million in Advanced Manufacturing Production Credits under the Inflation Reduction Act (IRA) during the third quarter of fiscal 2025, retroactive to January 1, 2023. The company estimates full-year fiscal 2025 credits to be $40-45 million and future annual credits of $35-40 million, subject to ongoing evaluation and new legislation - The company recognized an estimated **$112.4 million** reduction to Cost of products sold for Section 45X Advanced Manufacturing Production Credits, retroactive to January 1, 2023[166](index=166&type=chunk) - The credit included **$33.9 million** for fiscal 2025 production and **$78.5 million** as a retroactive adjustment[166](index=166&type=chunk) - Estimated fiscal 2025 full-year production credit is **$40-45 million**, with future year credits projected at **$35-40 million**[168](index=168&type=chunk) - The company is reviewing the impact of the One Big Beautiful Bill Act, signed July 4, 2025, but does not expect significant changes to future production credits[167](index=167&type=chunk) [Indefinite-lived Intangible Asset Impairment](index=33&type=section&id=Indefinite-lived%20Intangible%20Asset%20Impairment) During the third quarter of fiscal 2024, Energizer recorded $110.6 million in non-cash impairment charges for the Rayovac ($85.2 million) and Varta ($25.4 million) trade names. This was triggered by missed branded sales forecasts and an elevated weighted average cost of capital, with fair values determined using the multi-period excess earnings and relief from royalty methods, respectively - In Q3 fiscal 2024, the company recorded **$110.6 million** in non-cash impairment charges for indefinite-lived intangible assets (**$85.2 million** for Rayovac and **$25.4 million** for Varta trade names)[169](index=169&type=chunk) - The impairment was triggered by missed branded sales forecasts and an elevated weighted average cost of capital[169](index=169&type=chunk) - The Rayovac trade name's fair value was determined using the multi-period excess earnings method, and Varta's using the relief from royalty model[170](index=170&type=chunk)[171](index=171&type=chunk) - A **50 basis point change** in the discount rate would have resulted in an additional impairment of **$16.7 million** for Rayovac and **$0.3 million** for Varta[172](index=172&type=chunk) [December 2023 Argentina Economic Reform](index=33&type=section&id=December%202023%20Argentina%20Economic%20Reform) The December 2023 Argentine Peso devaluation by approximately 50% led to $22.0 million in currency and related losses for the nine months ended June 30, 2024, recognized in Other items, net. This reform caused operating costs to rise faster than price increases, potentially leading to continued declines in operating profit - The December 2023 Argentine Peso devaluation by approximately **50%** resulted in **$22.0 million** of currency and related losses recognized in Other items, net for the nine months ended June 30, 2024[176](index=176&type=chunk) - The losses included **$14.7 million** from remeasurement of monetary assets/liabilities, **$6.3 million** in transactional currency exchange losses, and a **$1.0 million** loss on bond purchases/sales[176](index=176&type=chunk) - Argentina's operating costs rose quicker than the company could implement price increases, potentially leading to continued declines in operating profit[175](index=175&type=chunk) [Acquisitions](index=34&type=section&id=Acquisitions) Energizer completed three acquisitions: battery manufacturing assets in Belgium (Oct 2023), Centralsul Ltda. in Brazil (May 2024), and APS NV in Europe (May 2025). These acquisitions expanded production capacity and market presence, incurring $4.8 million in acquisition and integration costs for the nine months ended June 30, 2025 - The company acquired battery manufacturing assets in Belgium (Oct 2023), Centralsul Ltda. in Brazil (May 2024), and APS NV in Europe (May 2025)[178](index=178&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - The APS NV acquisition contributed **$20.8 million** in Net sales and **$0.4 million** in Segment profit to the Battery and Lights segment[180](index=180&type=chunk) - Acquisition and integration costs totaled **$4.8 million** in SG&A for the nine months ended June 30, 2025, including a **$1.1 million** earnout adjustment for Centralsul[181](index=181&type=chunk) [Project Momentum Costs](index=34&type=section&id=Project%20Momentum%20Costs) Project Momentum, a profit recovery program, continued to optimize operations, with total pre-tax costs of $45.9 million for the nine months ended June 30, 2025. The program is expected to generate over $200 million in total pre-tax savings by the end of fiscal 2025, with approximately $196 million realized to date - Project Momentum aims for over **$200 million** in total pre-tax savings by the end of fiscal 2025, with approximately **$196 million** realized as of June 30, 2025[185](index=185&type=chunk) - Total Project Momentum restructuring and related pre-tax costs were **$8.0 million** for Q3 2025 and **$45.9 million** for 9M 2025[186](index=186&type=chunk) - These costs primarily consisted of severance, accelerated depreciation, asset write-offs, consulting, IT enablement, and facility exit costs[186](index=186&type=chunk) - Incremental network transition costs of **$17.6 million** were incurred for 9M 2025 to maintain business continuity during facility decommissioning and production line relocation[188](index=188&type=chunk) [Highlights / Operating Results](index=35&type=section&id=Highlights%20%2F%20Operating%20Results) Energizer reported strong financial results for Q3 and 9M 2025, with significant increases in net earnings and adjusted diluted EPS, driven by organic net sales growth, production credits, and Project Momentum savings. Gross margin improved, while SG&A and A&P expenses increased due to investments and acquisition impacts [Financial Results](index=35&type=section&id=Financial%20Results) The company achieved net earnings of $153.5 million ($2.13 diluted EPS) for Q3 2025 and $204.1 million ($2.80 diluted EPS) for 9M 2025, a significant improvement from prior-year losses. Adjusted diluted EPS increased by 43% for the quarter and 18% for the nine months, after accounting for various pre-tax adjustments Net Earnings/(Loss) and Adjusted Net Earnings (in millions, except per share data) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :----- | :------ | :------ | :------ | :------ | | Net earnings/(loss) | $153.5 | $(43.8) | $204.1 | $(9.5) | | Total adjustments, pre-tax | $(70.0) | $132.2 | $(6.6) | $204.2 | | Total adjustments, after tax | $(72.0) | $101.2 | $(23.8) | $161.5 | | Adjusted Net earnings | $81.5 | $57.4 | $180.3 | $152.0 | | Diluted net earnings/(loss) per common share | $2.13 | $(0.61) | $2.80 | $(0.13) | | Adjusted Diluted net earnings per diluted common share | $1.13 | $0.79 | $2.47 | $2.09 | - Pre-tax adjustments for Q3 2025 included **$(78.5) million** for FY23 & FY24 production credits, **$8.0 million** for restructuring costs, and **$(1.7) million** for a litigation matter[193](index=193&type=chunk) - The effective tax rate for Adjusted Net earnings was **13.5%** for Q3 2025 and **19.5%** for 9M 2025, lower than prior year due to FY25 production credits[198](index=198&type=chunk)[219](index=219&type=chunk) [Total Net sales](index=37&type=section&id=Total%20Net%20sales) Total Net sales increased by 3.4% to $725.3 million for Q3 2025 and by 1.9% to $2,119.9 million for 9M 2025. Organic Net sales grew by 0.1% for the quarter and 1.8% for the nine months, primarily driven by increased volumes in Batteries & Lights, partially offset by strategic pricing and promotional investments Total Net Sales Change (in millions) | Component | Q3 2025 $ Change | Q3 2025 % Chg | 9M 2025 $ Change | 9M 2025 % Chg | | :-------- | :--------------- | :------------ | :--------------- | :------------ | | Net sales - prior year | $701.4 | | $2,081.3 | | | Organic | $0.8 | 0.1 % | $37.2 | 1.8 % | | Acquisition impact | $20.8 | 3.0 % | $20.8 | 1.0 % | | Change in hyperinflationary markets | $1.4 | 0.2 % | $(2.5) | (0.1) % | | Impact of currency | $0.9 | 0.1 % | $(16.9) | (0.8) % | | **Net Sales - current year** | **$725.3** | **3.4 %** | **$2,119.9** | **1.9 %** | - Organic Net sales growth in Q3 2025 was driven by **1.7% volume growth** from new and expanded distribution in Battery & Lights, partially offset by **1.6%** planned strategic pricing and promotional investments[202](index=202&type=chunk) - For 9M 2025, organic volumes grew **3.2%** due to new/expanded distribution and storm-related activity in Battery & Lights, partially offset by **1.4%** planned strategic pricing and promotional investments[209](index=209&type=chunk) [Gross margin percentage](index=38&type=section&id=Gross%20margin%20percentage) Reported gross margin percentage significantly increased to 55.1% for Q3 2025 and 43.8% for 9M 2025, primarily due to the recognition of $112.4 million in production credits. Adjusted gross margin also improved, benefiting from Project Momentum savings, despite product cost impacts and strategic pricing investments - Reported gross margin percentage was **55.1%** for Q3 2025 (vs. **39.5%** prior year) and **43.8%** for 9M 2025 (vs. **38.3%** prior year)[203](index=203&type=chunk)[205](index=205&type=chunk) - The Q3 2025 gross margin benefited from **$112.4 million** in production credits, including **$33.9 million** for FY25 and **$78.5 million** retroactive to January 1, 2023[203](index=203&type=chunk) Gross Margin Percentage Reconciliation | Metric | Q3 2025 | 9M 2025 | | :----- | :------ | :------ | | Gross margin - FY'24 Reported | 39.5 % | 38.3 % | | Prior year impact of restructuring and integration costs | 2.0 % | 2.2 % | | Gross margin - FY'24 Adjusted | 41.5 % | 40.5 % | | FY25 production credits | 4.8 % | 1.6 % | | Project Momentum initiatives | 1.8 % | 2.1 % | | Product cost impacts | (1.5)% | (1.0)% | | Pricing | (1.0)% | (0.9)% | | Acquisition impact | (0.5)% | (0.2)% | | Currency impacts, including hyperinflationary markets | (0.3)% | (0.2)% | | Gross margin - FY'25 Adjusted | 44.8 % | 41.9 % | | Current year impact of restructuring, network transition costs and FY23 & FY24 production credits | 10.3 % | 1.9 % | | **Gross margin - FY'25 Reported** | **55.1 %** | **43.8 %** | - Adjusted Gross margin improvement was driven by FY25 production credits (**$33.9 million**) and Project Momentum savings (**$12 million** for Q3, **$44 million** for 9M), partially offset by increased freight, warehousing, production inefficiencies, and strategic pricing[206](index=206&type=chunk)[207](index=207&type=chunk) [SG&A](index=38&type=section&id=SG%26A) SG&A expenses were $128.3 million (17.7% of Net sales) for Q3 2025 and $395.6 million (18.7% of Net sales) for 9M 2025. Adjusted SG&A increased year-over-year due to the APS NV acquisition, digital transformation investments, and higher legal fees, partially offset by Project Momentum savings - SG&A was **$128.3 million (17.7% of Net sales)** for Q3 2025, compared to **$129.6 million (18.5% of Net sales)** in prior year[208](index=208&type=chunk) - Adjusted SG&A for Q3 2025 was **$123.6 million (17.0% of Net sales)**, up from **$118.4 million (16.9% of Net sales)** in prior year[208](index=208&type=chunk) - The increase in adjusted SG&A was driven by **$4.5 million** from the APS NV business, investments in digital transformation, and increased legal fees, partially offset by **$3 million** in Project Momentum savings for the quarter[208](index=208&type=chunk) - For 9M 2025, adjusted SG&A was **$367.3 million (17.3% of Net sales)**, up from **$350.1 million (16.8% of Net sales)** in prior year, with **$10 million** in Project Momentum savings partially offsetting increases[210](index=210&type=chunk) [Advertising and sales promotion expense (A&P)](index=39&type=section&id=Advertising%20and%20sales%20promotion%20expense%20(A%26P)) Advertising and sales promotion expense increased to $43.4 million (6.0% of net sales) for Q3 2025 and $117.6 million (5.5% of net sales) for 9M 2025, primarily due to investments in the launch of the Podium Series and support for the key holiday season - A&P was **$43.4 million (6.0% of net sales)** for Q3 2025, up from **$37.9 million (5.4% of Net sales)** in Q3 2024[211](index=211&type=chunk) - A&P was **$117.6 million (5.5% of net sales)** for 9M 2025, up from **$106.3 million (5.1% of Net sales)** in 9M 2024[211](index=211&type=chunk) - The increase was driven by investment in the launch of the Podium Series and support for the key holiday season[211](index=211&type=chunk) [R&D](index=39&type=section&id=R%26D) Research and development expense remained relatively stable at $8.2 million (1.1% of Net sales) for Q3 2025 and $24.3 million (1.1% of Net sales) for 9M 2025 - R&D was **$8.2 million (1.1% of Net sales)** for Q3 2025, compared to **$7.4 million (1.1% of Net sales)** in Q3 2024[212](index=212&type=chunk) - R&D was **$24.3 million (1.1% of Net sales)** for 9M 2025, compared to **$23.1 million (1.1% of Net sales)** in 9M 2024[212](index=212&type=chunk) [Interest expense](index=39&type=section&id=Interest%20expense) Interest expense remained flat at $39.0 million for Q3 2025 and decreased to $114.0 million for 9M 2025, primarily due to a lower average outstanding debt balance in the current year - Interest expense was **$39.0 million** for Q3 2025, flat compared to **$38.5 million** in Q3 2024[213](index=213&type=chunk) - For 9M 2025, interest expense was **$114.0 million**, down from **$117.9 million** in 9M 2024, due to a lower average outstanding debt balance[213](index=213&type=chunk) [Loss on extinguishment/modification of debt](index=39&type=section&id=Loss%20on%20extinguishment%2Fmodification%20of%20debt) The company recorded a $5.3 million loss on extinguishment/modification of debt for the nine months ended June 30, 2025, primarily due to the refinancing and extension of its Term Loan and Revolving Credit Facility in March 2025 - Loss on extinguishment/modification of debt was **$5.3 million** for 9M 2025, compared to **$2.1 million** for 9M 2024[214](index=214&type=chunk) - The majority of the fiscal 2025 loss resulted from the refinancing and extension of the **$760 million** Term Loan and **$500 million** Revolving Credit Facility in March 2025[214](index=214&type=chunk) [Other items, net](index=39&type=section&id=Other%20items%2C%20net) Other items, net, was an expense of $1.9 million for Q3 2025 and a benefit of $3.3 million for 9M 2025. The nine-month period in the prior year included a significant $29.3 million foreign currency exchange loss, primarily from the December 2023 Argentina economic reform Other Items, Net (in millions) | Component | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------- | :------ | :------ | :------ | :------ | | Interest income | $(0.2) | $(1.4) | $(2.0) | $(9.4) | | Foreign currency exchange loss/(gain) | $2.0 | $(0.3) | $(1.4) | $29.3 | | Pension cost other than service costs | — | $1.1 | — | $3.1 | | Loss on Sale of Argentina Bonds | — | — | — | $1.0 | | Acquisition and integration - TSA income | — | — | — | $(1.0) | | Other | $0.1 | $(4.4) | $0.1 | $(3.5) | | **Total Other items, net** | **$1.9** | **$(5.0)** | **$(3.3)** | **$19.5** | - The foreign currency exchange loss for 9M 2024 included **$21.0 million** from the December 2023 Argentina economic reform and Peso devaluation[216](index=216&type=chunk) [Segment Results](index=40&type=section&id=Segment%20Results) Both Batteries & Lights and Auto Care segments contributed to overall performance. Batteries & Lights saw strong organic net sales and profit growth driven by distribution gains and production credits. Auto Care experienced a slight organic net sales decline but improved organic segment profit due to Project Momentum savings, despite increased A&P investments [Segment Net Sales](index=40&type=section&id=Segment%20Net%20Sales) Batteries & Lights Net Sales increased by 5.1% for Q3 2025 and 3.0% for 9M 2025, driven by organic growth and the APS NV acquisition. Auto Care Net Sales decreased by 1.1% for Q3 2025 and 1.9% for 9M 2025, primarily due to pricing declines, partially offset by volume gains Segment Net Sales Change (in millions) | Segment | Q3 2025 $ Change | Q3 2025 % Chg | 9M 2025 $ Change | 9M 2025 % Chg | | :--------------- | :--------------- | :------------ | :--------------- | :------------ | | **Batteries & Lights** | | | | | | Net sales - prior year | $509.1 | | $1,607.9 | | | Organic | $2.5 | 0.5 % | $41.6 | 2.6 % | | Acquisition impact | $20.8 | 4.1 % | $20.8 | 1.3 % | | Net sales - current year | $535.1 | 5.1 % | $1,655.5 | 3.0 % | | **Auto Care** | | | | | | Net sales - prior year | $192.3 | | $473.4 | | | Organic | $(1.7) | (0.9) % | $(4.4) | (0.9) % | | Net sales - current year | $190.2 | (1.1)% | $464.4 | (1.9)% | - Batteries & Lights organic net sales growth in Q3 2025 was due to increased volumes from new and expanded distribution (**1.6%**), partially offset by strategic pricing (**1.1%**)[223](index=223&type=chunk) - Auto Care organic net sales decline in Q3 2025 was due to pricing declines (**2.9%**), partially offset by increased volumes from new distribution, international expansion, and digital economy growth (**2.0%**)[224](index=224&type=chunk)[225](index=225&type=chunk) [Segment Profit](index=41&type=section&id=Segment%20Profit) Global segment profit increased by 17.1% for Q3 2025 and 4.6% for 9M 2025. Batteries & Lights organic segment profit grew by 21.4% for Q3 and 5.6% for 9M, driven by gross profit improvement from production credits and Project Momentum. Auto Care organic segment profit was flat for Q3 but increased by 15.1% for 9M, benefiting from Project Momentum savings despite increased A&P investments Segment Profit Change (in millions) | Segment | Q3 2025 $ Change | Q3 2025 % Chg | 9M 2025 $ Change | 9M 2025 % Chg | | :--------------- | :--------------- | :------------ | :--------------- | :------------ | | **Batteries & Lights** | | | | | | Segment profit - prior year | $129.4 | | $375.3 | | | Organic | $27.7 | 21.4 % | $20.9 | 5.6 % | | Acquisition impact | $0.4 | 0.3 % | $0.4 | 0.1 % | | Segment profit - current year | $158.8 | 22.7 % | $390.4 | 4.0 % | | **Auto Care** | | | | | | Segment profit - prior year | $26.8 | | $74.1 | | | Organic | — | — % | $11.2 | 15.1 % | | Segment profit - current year | $24.1 | (10.1)% | $79.8 | 7.7 % | | **Total Segment Profit** | | | | | | Segment profit - prior year | $156.2 | | $449.4 | | | Organic | $27.7 | 17.7 % | $32.1 | 7.1 % | | Acquisition impact | $0.4 | 0.3 % | $0.4 | 0.1 % | | Segment profit - current year | **$182.9** | **17.1 %** | **$470.2** | **4.6 %** | - Batteries & Lights organic segment profit increased due to higher organic net sales and improved gross profit from current year production credits and Project Momentum savings, partially offset by increased SG&A and A&P spending[230](index=230&type=chunk)[233](index=233&type=chunk) - Auto Care organic segment profit was flat for Q3 2025, as improved gross profit was offset by increased SG&A and **$3.2 million** in A&P investment for the Podium Series launch[231](index=231&type=chunk) [General Corporate](index=42&type=section&id=General%20Corporate) General corporate and other expenses increased to $33.1 million for Q3 2025 and $91.0 million for 9M 2025, driven by higher legal fees, deferred compensation mark-to-market expenses, and compensation costs, partially offset by lower factoring fees General Corporate and Other Expenses (in millions) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :----- | :------ | :------ | :------ | :------ | | General corporate and other expenses | $33.1 | $29.1 | $91.0 | $86.6 | | % of Net Sales | 4.6 % | 4.1 % | 4.3 % | 4.2 % | - The increase in general corporate expenses was driven by increased legal fees, higher mark-to-market expense on deferred compensation plans, and increased compensation costs, partially offset by a decline in factoring fees[235](index=235&type=chunk)[236](index=236&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by cash from operations and access to capital markets, with primary cash needs focused on operations, working capital, strategic investments, and debt reduction. Recent debt refinancing extended maturities, and the company remains in compliance with debt covenants. Cash flow from operating activities decreased significantly due to working capital changes, particularly increased inventories [Overview](index=43&type=section&id=Overview) Energizer's future cash needs will focus on operating activities, working capital, strategic investments, and debt reductions, funded by cash from operations and capital markets. The company refinanced its Term Loan and Revolving Credit Facility in March 2025, extending maturities to 2032 and 2030, respectively, while maintaining compliance with debt covenants - Primary future cash needs are for operating activities, working capital, strategic investments, and debt reductions[237](index=237&type=chunk) - At June 30, 2025, Energizer had **$171.1 million** in cash and cash equivalents, with approximately **89%** held outside the U.S.[238](index=238&type=chunk) - In March 2025, the company extended its **$760 million** Senior Secured Term Loan to 2032 and its **$500 million** Revolving Credit Facility to 2030, with the transaction being leverage neutral[239](index=239&type=chunk) - As of June 30, 2025, **$372.4 million** remained available under the Revolving Facility, and the company was in compliance with debt covenants[241](index=241&type=chunk) [Operating Activities](index=43&type=section&id=Operating%20Activities) Cash flow from operating activities decreased significantly to $85.6 million for the nine months ended June 30, 2025, from $260.7 million in the prior year, primarily due to a $169 million change in working capital, driven by increased inventories and higher accounts payable payments - Cash flow from operating activities was **$85.6 million** for 9M 2025, a decrease from **$260.7 million** in 9M 2024[242](index=242&type=chunk) - The change was primarily driven by a **$169 million** year-over-year change in working capital, resulting from approximately **$130 million** in increased inventory and **$22 million** in higher accounts payable payments[242](index=242&type=chunk) [Investing Activities](index=43&type=section&id=Investing%20Activities) Net cash used by investing activities was $81.9 million for the nine months ended June 30, 2025, a slight decrease from $89.0 million in the prior year. This included capital expenditures of $69.1 million and $12.8 million for acquisitions, net of cash acquired. Total investing cash outflows of $80-90 million are anticipated for fiscal 2025 - Net cash used by investing activities was **$81.9 million** for 9M 2025, compared to **$89.0 million** for 9M 2024[243](index=243&type=chunk) - Investing activities included capital expenditures of **$69.1 million** and acquisitions, net of cash acquired, of **$12.8 million** for 9M 2025[243](index=243&type=chunk) - Total investing cash outflows of approximately **$80-90 million** are anticipated in fiscal 2025, including **$25-35 million** for Project Momentum IT systems[244](index=244&type=chunk) [Financing Activities](index=44&type=section&id=Financing%20Activities) Net cash used by financing activities significantly decreased to $49.8 million for the nine months ended June 30, 2025, from $223.9 million in the prior year. This included $198.2 million in debt issuance proceeds, $221.0 million in debt payments, $118.4 million net increase in short-term debt, $62.6 million in common stock repurchases, and $66.6 million in dividends paid - Net cash used by financing activities was **$49.8 million** for 9M 2025, a decrease from **$223.9 million** in 9M 2024[245](index=245&type=chunk) - Key financing activities for 9M 2025 included **$198.2 million** cash proceeds from debt issuance, **$221.0 million** in debt payments, a **$118.4 million** net increase in short-term debt, **$8.0 million** in debt issuance costs, **$62.6 million** in common stock repurchases, and **$66.6 million** in dividends paid[247](index=247&type=chunk) - The company repurchased approximately **2.8 million shares** for **$62.6 million** at an average price of **$22.40 per share** during 9M 2025, with **4.7 million shares** remaining under authorization[248](index=248&type=chunk) - The Board of Directors declared quarterly cash dividends of **$0.30 per share** for all four quarters of fiscal 2025[245](index=245&type=chunk) [Other Matters](index=46&type=section&id=Other%20Matters) Accrued environmental costs were $10.3 million at June 30, 2025, with no material effect expected on capital or operating expenditures. The company has contractual commitments for long-term debt ($3,201.2 million) and future purchase obligations ($3.3 million), along with operating and finance lease payments - Accrued environmental costs were **$10.3 million** at June 30, 2025, with no material effect expected on capital and operating expenditures[251](index=251&type=chunk) - Long-term debt contractual commitment is **$3,201.2 million**, with **$7.6 million** due within the next twelve months[252](index=252&type=chunk) - Interest commitments are **$673.0 million**, with **$137.8 million** expected within the next twelve months[252](index=252&type=chunk) - Future purchase commitments for goods and services total **$3.3 million**, all due within the next twelve months[254](index=254&type=chunk) - Total future operating and finance lease payments are **$151.5 million** and **$89.0 million**, respectively, with **$20.1 million** and **$4.2 million** due within the next twelve months[256](index=256&type=chunk) [Item 3. Quantitative and

Financial Data and Key Metrics Changes - The company reported a strong third quarter with results exceeding expectations, reflecting efforts to strengthen the business and restore margins [7][11] - Adjusted EPS is now expected to be between $3.55 and $3.65, with adjusted EBITDA projected between $630 million and $640 million [11] - The company returned $84 million to shareholders through dividends and share repurchases in the quarter [10] Business Line Data and Key Metrics Changes - The battery category performed well, while auto care was softer due to mild weather; however, the new podium series is performing strongly [8][14] - Organic sales were strong, with battery category growth contributing positively, while auto care showed a slight decline [18] Market Data and Key Metrics Changes - The impact of tariffs on the business has improved significantly, with current rates lower than previously guided [8] - The company expects production credits to contribute $35 million to $40 million annually to gross margin, net earnings, and free cash flow [9][19] Company Strategy and Development Direction - The company is focused on restoring margins, investing in growth, and building a more agile operation [7] - The acquisition of Advanced Power Solutions is expected to enhance manufacturing capabilities and mitigate tariff impacts [10][29] - The company is prioritizing debt reduction while also evaluating opportunities for share repurchase and capital allocation [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering fiscal 2025 outlook and continued earnings growth into fiscal 2026 [11] - The company noted that consumer behavior is cautious, but the battery category remains resilient [90] Other Important Information - The company has made significant investments in production and digital transformation, with expectations of generating 10% to 12% free cash flow compared to sales over the next couple of years [32][38] - The company has seen a stable competitive landscape, with private label shares remaining flat [44] Q&A Session Summary Question: Key fundamental drivers for the quarter and next - Management highlighted organic growth, gross margin improvement, and earnings growth as key drivers [14][15] Question: Details on production credits - Production credits are expected to contribute significantly to earnings without requiring additional investment [22] Question: Impact of the Advanced Power Solutions acquisition - The acquisition is part of a broader strategy to enhance manufacturing capabilities and optimize costs [29][30] Question: Capital allocation outlook - The company plans to prioritize debt reduction while remaining flexible in capital allocation strategies [35][36] Question: Competitive landscape and holiday outlook - Management noted stable market shares and a normal holiday season is anticipated, with adjustments for earlier shopping patterns [44][46] Question: Consumer inventory levels - Retailer inventory levels are slightly elevated, while consumer inventory levels are lighter due to stretched purchase cycles [88] Question: Pricing impact from tariffs - Pricing adjustments related to tariffs have been negotiated with retailers and are expected to show benefits in Q4 [68][92]

Financial Data and Key Metrics Changes - The company reported a strong third quarter with results exceeding expectations, reflecting efforts to strengthen the business and restore margins [6][10] - Adjusted EPS is now expected to be between $3.55 and $3.65, with adjusted EBITDA projected between $630 million and $640 million [10] - The company returned $84 million to shareholders through dividends and share repurchases in the quarter [9] Business Line Data and Key Metrics Changes - The battery and lights segments performed solidly, while auto care was softer due to mild weather; however, the new podium series is performing well [6][7] - Organic sales growth was strong, particularly in the battery category, with the podium series exceeding initial plans [13][15] Market Data and Key Metrics Changes - The impact of tariffs on the business has materially improved, with current rates significantly lower than previous guidance [7] - The company expects production credits to contribute $35 million to $40 million annually to gross margin, net earnings, and free cash flow [8][16] Company Strategy and Development Direction - The acquisition of Advanced Power Solutions enhances the company's manufacturing capabilities and mitigates tariff impacts [9][26] - The company is focused on capital allocation, prioritizing debt reduction while also considering share repurchases and potential small acquisitions [31][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering fiscal 2025 outlook and continued earnings growth into fiscal 2026 [10][46] - The competitive landscape remains stable, with the company well-positioned against competitors like Duracell [36][38] Other Important Information - The company has made significant investments in production and automation, particularly in North America, to optimize its manufacturing network [26][27] - The company is transitioning to plastic-free packaging, which has impacted inventory levels [29][80] Q&A Session Summary Question: Key drivers for the quarter and next - Management highlighted strong organic growth, gross margin improvement, and earnings growth, with expectations for continued growth in fiscal 2026 [13][14] Question: Production credits explanation - Production credits are based on domestic manufacturing and do not require additional investment; they are expected to bolster earnings significantly [19][20] Question: Acquisition impact on manufacturing footprint - The acquisition of Advanced Power Solutions is part of a broader strategy to enhance manufacturing reliability and cost efficiency [25][26] Question: Capital allocation outlook - The company plans to prioritize debt reduction while remaining flexible in capital allocation to maximize returns [31][86] Question: Competitive landscape and holiday outlook - Management sees stable market shares and plans for a normal holiday season, with adjustments for earlier shopping patterns [36][40] Question: Consumer behavior and inventory levels - Consumers are acting cautiously, with some destocking observed at retailers, but overall demand for batteries remains resilient [78][80] Question: Pricing impact from tariffs - Pricing adjustments related to tariffs have been negotiated with retailers and are expected to show benefits in Q4 [60][82]

Core Insights - Energizer Holdings (ENR) reported revenue of $725.3 million for the quarter ended June 2025, marking a year-over-year increase of 3.4% [1] - The earnings per share (EPS) for the same period was $1.13, compared to $0.79 a year ago, indicating significant growth [1] - The reported revenue exceeded the Zacks Consensus Estimate of $701.54 million by 3.39%, while the EPS surpassed the consensus estimate of $0.61 by 85.25% [1] Financial Performance Metrics - Net Sales for Batteries & Lights reached $535.1 million, exceeding the average analyst estimate of $505.98 million, representing a year-over-year increase of 5.1% [4] - Net Sales for Auto Care were $190.2 million, slightly below the average estimate of $195.53 million, reflecting a year-over-year decrease of 1.1% [4] - Segment Profit for Auto Care was $24.1 million, surpassing the two-analyst average estimate of $21.76 million [4] - Segment Profit for Batteries & Lights was $158.8 million, compared to the average estimate of $119 million based on two analysts [4] Stock Performance - Shares of Energizer have returned +2.9% over the past month, outperforming the Zacks S&P 500 composite's +0.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Energizer Holdings, Inc. (ENR) reported strong third-quarter fiscal 2025 results, with both net sales and earnings exceeding the Zacks Consensus Estimate, and showing year-over-year growth [1][3] - The company's Project Momentum, aimed at enhancing margins and operational agility, has been effective, contributing to organic sales growth and improved gross margins [2][9] Financial Performance - Adjusted earnings per share (EPS) for the third quarter were $1.13, surpassing the Zacks Consensus Estimate of 61 cents, and reflecting a 43% increase from the previous year [3][9] - Net sales reached $725.3 million, exceeding the Zacks Consensus Estimate of $702 million, and representing a 3.4% year-over-year increase [3][9] - Organic net sales saw a slight increase of 0.1% year over year, driven by a 1.7% growth in volume, primarily from the Battery & Lights category [4][3] Segment Performance - The Batteries & Lights segment reported a 5.1% increase in net sales to $535.1 million, with segment profit rising 22.7% to $158.8 million [5] - Conversely, the Auto Care segment experienced a 1.1% decline in net sales to $190.2 million, with segment profit decreasing by 10.1% to $24.1 million [5] Margin and Cost Analysis - Adjusted gross profit for the third quarter was $325.0 million, an 11.7% increase year over year, with adjusted gross margin expanding by 330 basis points to 44.8% [6][10] - The margin improvement was attributed to $33.9 million in production credits and approximately $12 million in cost savings from Project Momentum, despite higher product costs and operational inefficiencies [6][10] SG&A and Advertising Expenses - Adjusted Selling, General and Administrative (SG&A) expenses rose 4.4% year over year to $123.6 million, influenced by costs from the APS NV acquisition and investments in digital transformation [7][8] - Advertising and Promotion (A&P) expenses increased by $5.5 million, accounting for 6% of net sales, up from 5.4% in the previous year [10] Future Outlook - For fiscal year 2025, Energizer expects net sales growth of 1% to 3%, including $40 to $50 million from the APS NV acquisition, with organic net sales anticipated to be flat to up 2% [14][15] - The company has raised its full-year adjusted EPS guidance to a range of $3.55 to $3.65, compared to the previous estimate of $3.30 to $3.50 [15] - Fourth-quarter net sales growth is projected between 2% and 4%, with organic net sales expected to be flat to down 2% [16][17]

Q3 Fiscal 2025 Financial Results - Net sales reached $7253 million, showing a 34% increase reported and a 01% organic increase[24] - Batteries & Lights net sales increased by 51% reported and 05% organically[24] - Auto Care net sales decreased by 11% reported and 09% organically[24] - Adjusted gross margin increased by 330 basis points to 448%[24] - Adjusted EPS increased by 43% year-over-year to $113, with $078 prior to production credits[24] - Adjusted EBITDA increased by 145% year-over-year to $1714 million[24] Fiscal Year 2025 Outlook - Reported net sales are expected to increase by 1% to 3%, with Q4 projected to increase by 2% to 4%[43] - Organic net sales are expected to remain flat to +2%, with Q4 projected to decrease by 2% to flat[43] - Adjusted EPS is projected to be in the range of $355 to $365, with Q4 projected to be $105 to $115[43] - Adjusted EBITDA is projected to be in the range of $630 million to $640 million[43]

Core Insights - Energizer Holdings (ENR) reported quarterly earnings of $1.13 per share, significantly exceeding the Zacks Consensus Estimate of $0.61 per share, and up from $0.79 per share a year ago, representing an earnings surprise of +85.25% [1] - The company achieved revenues of $725.3 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.39% and increasing from $701.4 million year-over-year [2] - Energizer has outperformed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates twice in the same period [2] Future Outlook - The immediate price movement of Energizer's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.44 on revenues of $824.33 million, while the estimate for the current fiscal year is $3.40 on revenues of $2.92 billion [7] - The Zacks Rank for Energizer is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Consumer Products - Staples industry, to which Energizer belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Energizer Holdings, Inc. Fiscal 2025 Third Quarter Results Overview](index=1&type=section&id=Energizer%20Holdings%2C%20Inc.%20Fiscal%202025%20Third%20Quarter%20Results%20Overview) Summarizes Energizer Holdings, Inc.'s strong Q3 FY25 results and updated full-year outlook [Highlights of Third Quarter Performance](index=1&type=section&id=Highlights%20of%20Third%20Quarter%20Performance) Energizer Holdings, Inc. announced strong fiscal 2025 third-quarter results, exceeding outlooks for net sales, adjusted gross margin, and adjusted EPS, significantly benefiting from Advanced Manufacturing Production Credits and Project Momentum initiatives Third Quarter 2025 Key Financial Highlights | Metric | Value | Change YoY (Adjusted) | | :-------------------------------- | :---------------- | :-------------------- | | Reported Net Sales | $725.3 million | +3.4% | | Organic Net Sales Growth | +0.1% | | | Reported Gross Margin | 55.1% | | | Adjusted Gross Margin | 44.8% | +330 basis points | | Reported EPS | $2.13 | | | Adjusted EPS | $1.13 | +43% | | Adjusted EPS (prior to production credits) | $0.78 | | - The company's performance was bolstered by qualification for production credits due to investments in US manufacturing capabilities and the benefits of Project Momentum, which aims to restore margins, increase operational agility, and invest in growth[1](index=1&type=chunk) [Updated Full Year 2025 Outlook](index=1&type=section&id=Updated%20Full%20Year%202025%20Outlook) Energizer Holdings, Inc. has increased its full-year fiscal 2025 outlook for net sales, adjusted EBITDA, and adjusted earnings per share, reflecting higher earnings from pricing, tariff mitigation, and the inclusion of production credits Updated Full Year 2025 Outlook | Metric | Previous Outlook | New Outlook | | :-------------------- | :--------------- | :-------------------- | | Net Sales Growth | N/A | +1% to 3% | | Adjusted EPS Range | N/A | $3.55 to $3.65 | | Adjusted EBITDA | N/A | $630 to $640 million | - The company expects to generate **7% - 10% Adjusted Earnings Per Share growth** in Fiscal Year 2025 and is strongly positioned for continued earnings growth in Fiscal Year 2026[1](index=1&type=chunk) [CEO Statement](index=1&type=section&id=CEO%20Statement) CEO Mark LaVigne highlighted that the quarter's performance demonstrates the success of Project Momentum in restoring margins, increasing operational agility, and driving growth, further strengthened by production credits from US manufacturing investments - Project Momentum, launched three years ago, has successfully restored margins, increased operational agility, and fostered growth, as evidenced by organic top-line growth, strong gross margins, and robust earnings in the current quarter[1](index=1&type=chunk) - The business has been further strengthened by qualification for production credits, a direct result of investments and focus on US manufacturing capabilities[1](index=1&type=chunk) - The increased outlook reflects higher earnings driven by pricing strategies, tariff mitigation efforts, and the inclusion of production credits, with confidence in generating ongoing earnings growth and long-term shareholder value[1](index=1&type=chunk) [Third Quarter 2025 Financial Review](index=2&type=section&id=Third%20Quarter%202025%20Financial%20Review) Detailed Q3 FY25 financial review, covering net sales, gross margin, operating expenses, earnings, and cash flow [Net Sales](index=2&type=section&id=Net%20Sales) Net sales for the third fiscal quarter increased by 3.4% year-over-year, reaching $725.3 million, primarily driven by the acquisition of Advanced Power Solutions NV and a slight organic net sales increase Third Quarter Net Sales Performance (FY'25 vs FY'24) | Category | FY'25 Net Sales ($M) | FY'24 Net Sales ($M) | % Change | | :-------------------------------- | :------------------- | :------------------- | :------- | | Total Net Sales | 725.3 | 701.4 | +3.4% | | Organic | 0.8 | | +0.1% | | Acquisition impact (APS NV) | 20.8 | | +3.0% | | Change in hyperinflationary markets | 1.4 | | +0.2% | | Impact of currency | 0.9 | | +0.1% | - The Advanced Power Solutions NV (APS NV) acquisition, completed on May 2, 2025, contributed **$20.8 million** to Net sales[4](index=4&type=chunk) [Gross Margin](index=2&type=section&id=Gross%20Margin) Reported gross margin significantly increased to 55.1% from 39.5% in the prior year, largely due to $112.4 million in production credits, with adjusted gross margin also improving by 330 basis points to 44.8% Third Quarter Gross Margin Analysis (FY'25 vs FY'24) | Metric | FY'25 | FY'24 | | :------------------------------------------------ | :------ | :------ | | Reported Gross Margin | 55.1% | 39.5% | | Adjusted Gross Margin | 44.8% | 41.5% | | **Impact of Production Credits:** | | | | Estimated FY25 production credits | $33.9 million | | | Estimated FY23 & FY24 retroactive production credits | $78.5 million | | - Adjusted Gross margin improvement was driven by estimated **FY25 production credits ($33.9 million)** and **Project Momentum savings (approximately $12 million)**[6](index=6&type=chunk) - These benefits were partially offset by product cost impacts from increased freight and warehousing, production inefficiencies, planned strategic pricing and promotional investments, and a slightly lower margin on the APS NV business[6](index=6&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Details the company's operating expenses, including SG&A and A&P, and their key drivers [Selling, General and Administrative Expense (SG&A)](index=2&type=section&id=Selling%2C%20General%20and%20Administrative%20Expense%20(SG%26A)) SG&A, excluding certain non-recurring items, increased in dollar terms to $123.6 million, representing 17.0% of Net sales, primarily due to the APS NV acquisition, investments in digital transformation, and higher legal fees Third Quarter SG&A (Adjusted) | Metric | FY'25 | FY'24 | | :------------------------------------------------ | :---------------- | :---------------- | | SG&A (excluding restructuring, acquisition costs, litigation) | $123.6 million | $118.4 million | | SG&A as % of Net sales | 17.0% | 16.9% | - The year-over-year dollar increase in SG&A was primarily driven by increased SG&A from the APS NV business (**$4.5 million**), investment in digital transformation and growth initiatives, and increased legal fees[8](index=8&type=chunk) - These increases were partially offset by **Project Momentum savings of approximately $3 million** in the quarter[8](index=8&type=chunk) [Advertising and Promotion Expense (A&P)](index=3&type=section&id=Advertising%20and%20Promotion%20Expense%20(A%26P)) A&P expense increased by $5.5 million to 6.0% of Net sales, reflecting strategic investment in the launch of the Podium Series Third Quarter A&P Expense | Metric | FY'25 | FY'24 | | :-------------------- | :------ | :------ | | A&P Expense | $43.4 million | $37.9 million | | A&P as % of Net sales | 6.0% | 5.4% | - The increase in A&P was primarily driven by investment in the launch of the Podium Series[8](index=8&type=chunk) [Earnings Per Share (EPS) and Adjusted EBITDA](index=3&type=section&id=Earnings%20Per%20Share%20(EPS)%20and%20Adjusted%20EBITDA) Net earnings significantly improved to $153.5 million from a prior-year loss, with diluted EPS at $2.13, while Adjusted net earnings and Adjusted diluted EPS also saw substantial increases, driven by production credits and Project Momentum savings Third Quarter Earnings Per Share and Adjusted EBITDA | Metric | 2025 ($M) | 2024 ($M) | | :--------------------------------------- | :-------- | :-------- | | Net earnings/(loss) | 153.5 | (43.8) | | Diluted net earnings/(loss) per common share | 2.13 | (0.61) | | Adjusted Net earnings | 81.5 | 57.4 | | Adjusted Diluted net earnings per common share | 1.13 | 0.79 | | Adjusted EBITDA | 171.4 | 149.7 | | Currency neutral Adjusted Diluted net earnings per common share | 1.16 | | | Currency neutral Adjusted EBITDA | 173.9 | | - Net earnings, EPS, Adjusted EPS, and Adjusted EBITDA were positively impacted by **production credits** and **Project Momentum savings**[9](index=9&type=chunk) - These improvements were partially offset by higher A&P and SG&A spend and currency impacts compared to the prior year, with the prior year net loss due to a **$110.6 million non-cash pre-tax impairment charge** on indefinite-lived intangibles[9](index=9&type=chunk) [Free Cash Flow and Capital Allocation](index=3&type=section&id=Free%20Cash%20Flow%20and%20Capital%20Allocation) For the nine months ended June 30, 2025, operating cash flow was $85.6 million, resulting in free cash flow of $16.5 million, alongside strategic capital allocation activities including an acquisition, share repurchases, and dividend payments Nine Months Ended June 30, 2025 Cash Flow & Capital Allocation | Metric | Value ($M) | | :-------------------------------- | :----------- | | Operating cash flow | 85.6 | | Free cash flow | 16.5 | | APS NV acquisition cash consideration | 15.2 | | Common stock repurchased (Q3) | 62.6 | | Shares repurchased (Q3) | 2.8 million | | Average repurchase price (Q3) | $22.40 per share | | Dividend payments (Q3) | 21.0 | | Dividends per common share (Q3) | $0.30 | - Subsequent to the quarter, the Company repurchased an additional **1.2 million shares of common stock at $22.49 per share**[14](index=14&type=chunk) [Fiscal Year 2025 Financial Outlook](index=3&type=section&id=Fiscal%20Year%202025%20Financial%20Outlook) Outlines updated fiscal year 2025 financial projections, including full-year guidance and Q4 expectations [Full Year Guidance](index=3&type=section&id=Full%20Year%20Guidance) Energizer Holdings, Inc. has updated its fiscal 2025 guidance, projecting Net sales growth of 1% to 3% and an increased Adjusted Earnings Per Share range of $3.55 to $3.65, with Adjusted EBITDA expected between $630 million and $640 million Fiscal Year 2025 Full Year Guidance | Metric | Range | | :-------------------------------- | :-------------------- | | Net Sales Growth | 1% to 3% | | Organic Net Sales | Flat to +2% | | Adjusted Earnings Per Share | $3.55 to $3.65 | | Adjusted EBITDA | $630 to $640 million | | Estimated production credits benefit (prior to reinvestment) | $40 to $45 million | - The Net Sales growth outlook includes **$40 to $50 million** from the recently acquired APS NV business[11](index=11&type=chunk) [Fourth Quarter Expectations](index=3&type=section&id=Fourth%20Quarter%20Expectations) For the fourth quarter, the company anticipates reported Net Sales growth of 2% to 4% and Adjusted Earnings Per Share in the range of $1.05 to $1.15, with gross margin expected to be impacted by transitory costs Fiscal Year 2025 Fourth Quarter Expectations | Metric | Range | | :-------------------------------- | :-------------------- | | Reported Net Sales Growth | 2% to 4% | | Organic Net Sales | Flat to down 2% | | Adjusted Earnings Per Share | $1.05 to $1.15 | | Estimated production credits benefit (prior to reinvestment) | $5 to $10 million | - Fourth quarter gross margin is expected to be impacted by approximately **$20 million of transitory costs**, including tariffs and short-term operational inefficiencies from network realignment and investment[13](index=13&type=chunk) [Webcast Information](index=3&type=section&id=Webcast%20Information) Energizer Holdings, Inc. provided details for accessing its investor conference call and webcast, which will cover third fiscal quarter earnings and recent business trends, with prepared comments and a replay available online - Prepared comments were posted under the Investor/Events & Presentations section of the Company website around **7:00 a.m. Eastern Time**[14](index=14&type=chunk) - An investor conference call was held at **10:00 a.m. Eastern Time on August 4, 2025**, focusing on third fiscal quarter earnings and recent business trends[14](index=14&type=chunk)[15](index=15&type=chunk) - A live webcast and replay are accessible via www.energizerholdings.com under 'Investors' and 'Events and Presentations' tabs[15](index=15&type=chunk) [Forward-Looking Statements and Risk Factors](index=4&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section outlines the inherent uncertainties and potential risks associated with Energizer Holdings, Inc.'s forward-looking statements, detailing numerous factors that could cause actual results to differ materially from projections - Forward-looking statements are not guarantees of performance and are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially[17](index=17&type=chunk) - Key risk factors include global economic and financial market conditions, intense competition, changes in retail environment and consumer preferences, loss of brand reputation or principal customers, and challenges in product innovation[17](index=17&type=chunk) - Additional risks encompass international operations (tariffs, currency fluctuations), supply chain disruptions, production cost changes (inflation), reliance on suppliers, IT system failures, ability to attract/retain employees, significant debt obligations, and the uncertainty of benefiting from Section 45X production tax credits[17](index=17&type=chunk)[19](index=19&type=chunk) [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) Presents unaudited consolidated financial statements: earnings, balance sheets, and cash flows, for a comprehensive financial overview [Consolidated Statement of Earnings](index=6&type=section&id=Consolidated%20Statement%20of%20Earnings) The condensed consolidated statement of earnings shows a significant turnaround from a net loss in the prior year to net earnings in Q3 FY25 and for the nine months ended June 30, 2025, primarily driven by increased gross profit and the absence of prior-year impairment charges Consolidated Statement of Earnings (Condensed) - Q3 and Nine Months Ended June 30 | Metric | Q3 2025 ($M) | Q3 2024 ($M) | 9 Months 2025 ($M) | 9 Months 2024 ($M) | | :-------------------------------- | :----------- | :----------- | :----------------- | :----------------- | | Net sales | 725.3 | 701.4 | 2,119.9 | 2,081.3 | | Cost of products sold | 325.6 | 424.2 | 1,191.6 | 1,283.8 | | Gross profit | 399.7 | 277.2 | 928.3 | 797.5 | | Selling, general and administrative expense | 128.3 | 129.6 | 395.6 | 380.2 | | Advertising and sales promotion expense | 43.4 | 37.9 | 117.6 | 106.3 | | Impairment of intangible assets | — | 110.6 | — | 110.6 | | Net earnings/(loss) | 153.5 | (43.8) | 204.1 | (9.5) | | Diluted net earnings/(loss) per common share | 2.13 | (0.61) | 2.80 | (0.13) | - Cost of products sold in Q3 2025 includes an estimated **$112.4 million in production credits**, with **$33.9 million for FY25** and **$78.5 million as a retroactive adjustment for FY23 & FY24**[21](index=21&type=chunk) - The prior year's net loss was significantly impacted by a **$110.6 million impairment of intangible assets** related to the Rayovac and Varta trade names[21](index=21&type=chunk) [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet as of June 30, 2025, shows an increase in total assets, driven by higher inventories and other current assets, and a corresponding increase in total liabilities, primarily long-term debt and notes payable, with shareholders' equity also increasing Consolidated Balance Sheets (Condensed) - June 30, 2025 vs. September 30, 2024 | Metric | June 30, 2025 ($M) | September 30, 2024 ($M) | | :-------------------------------- | :----------------- | :---------------------- | | Total assets | 4,516.0 | 4,342.4 | | Total current assets | 1,642.4 | 1,478.9 | | Inventories | 870.1 | 657.3 | | Total liabilities | 4,332.8 | 4,206.6 | | Long-term debt | 3,218.4 | 3,193.0 | | Notes payable | 134.6 | 2.1 | | Total shareholders' equity | 183.2 | 135.8 | - The increase in total assets is largely attributable to a significant rise in **inventories** and **other current assets**[23](index=23&type=chunk) - The increase in total liabilities is primarily due to higher **long-term debt** and a substantial increase in **notes payable**[23](index=23&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2025, net cash from operating activities decreased significantly compared to the prior year, primarily due to changes in current assets and liabilities and the impact of production credits, while cash used in investing activities remained stable and financing activities decreased Consolidated Statements of Cash Flows (Condensed) - Nine Months Ended June 30 | Metric | 2025 ($M) | 2024 ($M) | | :-------------------------------- | :-------- | :-------- | | Net cash from operating activities | 85.6 | 260.7 | | Net cash used by investing activities | (81.9) | (89.0) | | Net cash used by financing activities | (49.8) | (223.9) | | Net decrease in cash, cash equivalents, and restricted cash | (45.8) | (76.6) | | Cash, cash equivalents, and restricted cash, end of period | 171.1 | 146.7 | - The decrease in net cash from operating activities in 2025 was influenced by a negative impact from **production credits ($112.4 million)** and changes in current assets and liabilities used in operations[25](index=25&type=chunk) - Financing activities in 2025 included significant debt issuance and payments, as well as **common stock repurchases ($62.6 million)** and **dividend payments ($66.6 million)**[25](index=25&type=chunk) [Supplemental Non-GAAP Financial Information](index=9&type=section&id=Supplemental%20Non-GAAP%20Financial%20Information) Provides supplemental non-GAAP financial information: measure explanations, segment performance, and GAAP to adjusted reconciliations [Explanation of Non-GAAP Measures](index=9&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Energizer Holdings, Inc. provides various non-GAAP financial measures to offer additional insights into its ongoing operating performance, excluding items not reflective of core business, such as restructuring costs, acquisition expenses, and certain production credits, aiding investors in year-over-year comparability and analysis - Non-GAAP measures exclude items like restructuring and related costs, network transition costs, acquisition and integration costs, FY23 & FY24 production credits, impairment of intangible assets, litigation matters, debt extinguishment/modification losses, and the December 2023 Argentina Economic Reform[27](index=27&type=chunk) - Key non-GAAP measures defined include Segment Profit, Adjusted Net Earnings and Adjusted Diluted Net Earnings per Common Share (EPS), Non-GAAP Tax Rate, Organic growth, Adjusted Comparisons, EBITDA and Adjusted EBITDA, Free Cash Flow, Net Debt, and Currency-neutral results[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - The company emphasizes that non-GAAP measures should be considered in addition to, not as a substitute for, comparable GAAP measures[27](index=27&type=chunk) [Segment Performance](index=10&type=section&id=Segment%20Performance) Analyzes Batteries & Lights and Auto Care segment performance, detailing net sales, profit, and depreciation/amortization [Segment Net Sales and Profit](index=10&type=section&id=Segment%20Net%20Sales%20and%20Profit) The Batteries & Lights segment showed strong net sales and profit growth in Q3 FY25, driven by organic growth and acquisition impact, while the Auto Care segment experienced a slight decline in net sales but an increase in segment profit for the nine months Segment Net Sales - Q3 and Nine Months Ended June 30 | Segment | Q3 2025 Net Sales ($M) | Q3 2024 Net Sales ($M) | Q3 % Chg | 9 Months 2025 Net Sales ($M) | 9 Months 2024 Net Sales ($M) | 9 Months % Chg | | :---------------- | :--------------------- | :--------------------- | :--------- | :--------------------------- | :--------------------------- | :------------- | | Batteries & Lights | 535.1 | 509.1 | +5.1% | 1,655.5 | 1,607.9 | +3.0% | | Auto Care | 190.2 | 192.3 | -1.1% | 464.4 | 473.4 | -1.9% | | **Total Net Sales** | **725.3** | **701.4** | **+3.4%** | **2,119.9** | **2,081.3** | **+1.9%** | Segment Profit - Q3 and Nine Months Ended June 30 | Segment | Q3 2025 Segment Profit ($M) | Q3 2024 Segment Profit ($M) | Q3 % Chg | 9 Months 2025 Segment Profit ($M) | 9 Months 2024 Segment Profit ($M) | 9 Months % Chg | | :---------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------------- | :-------------------------------- | :------------- | | Batteries & Lights | 158.8 | 129.4 | +22.7% | 390.4 | 375.3 | +4.0% | | Auto Care | 24.1 | 26.8 | -10.1% | 79.8 | 74.1 | +7.7% | | **Total Segment Profit** | **182.9** | **156.2** | **+17.1%** | **470.2** | **449.4** | **+4.6%** | - Batteries & Lights organic net sales increased **0.5% in Q3** and **2.6% for the nine months**, while Auto Care organic net sales decreased **0.9% in Q3** and **0.9% for the nine months**[52](index=52&type=chunk) [Segment Depreciation and Amortization](index=10&type=section&id=Segment%20Depreciation%20and%20Amortization) Both segments experienced an increase in depreciation and amortization for Q3 and the nine months ended June 30, 2025, contributing to the overall rise in total depreciation and amortization Segment Depreciation and Amortization - Q3 and Nine Months Ended June 30 | Metric | Q3 2025 ($M) | Q3 2024 ($M) | 9 Months 2025 ($M) | 9 Months 2024 ($M) | | :-------------------------------- | :----------- | :----------- | :----------------- | :----------------- | | Batteries & Lights | 13.7 | 12.9 | 40.6 | 37.2 | | Auto Care | 3.5 | 3.3 | 9.9 | 8.9 | | **Total segment depreciation and amortization** | **17.2** | **16.2** | **50.5** | **46.1** | | Amortization of intangible assets | 14.7 | 14.5 | 44.1 | 43.5 | | **Total depreciation and amortization** | **31.9** | **30.7** | **94.6** | **89.6** | [GAAP EPS to Adjusted EPS Reconciliation](index=11&type=section&id=GAAP%20EPS%20to%20Adjusted%20EPS%20Reconciliation) The reconciliation highlights the significant impact of non-GAAP adjustments, particularly the FY23 & FY24 production credits, which transformed a GAAP net loss in the prior year to a positive adjusted net earnings, demonstrating the underlying operational performance GAAP EPS to Adjusted EPS Reconciliation - Q3 and Nine Months Ended June 30 | Metric | Q3 2025 ($M) | Q3 2024 ($M) | 9 Months 2025 ($M) | 9 Months 2024 ($M) | | :--------------------------------------- | :----------- | :----------- | :----------------- | :----------------- | | Net earnings/(loss) | 153.5 | (43.8) | 204.1 | (9.5) | | Total adjustments, pre-tax | (70.0) | 132.2 | (6.6) | 204.2 | | Total adjustments, after tax | (72.0) | 101.2 | (23.8) | 161.5 | | Adjusted Net earnings | 81.5 | 57.4 | 180.3 | 152.0 | | Diluted net earnings/(loss) per common share | 2.13 | (0.61) | 2.80 | (0.13) | | Adjusted Diluted net earnings per diluted common share | 1.13 | 0.79 | 2.47 | 2.09 | | Adjusted EPS excluding production credits | 0.78 | 0.79 | 2.12 | 2.09 | - The FY23 & FY24 production credits had a significant positive impact on adjusted earnings, reducing pre-tax adjustments by **$78.5 million** in Q3 and for the nine months ended June 30, 2025[43](index=43&type=chunk) - The effective tax rate for Adjusted Net earnings and Adjusted Diluted EPS for Q3 2025 was **13.5% (23.2% in Q3 2024)** and for the nine months was **19.5% (23.4% in 9M 2024)**[44](index=44&type=chunk) [Currency Neutral Results](index=12&type=section&id=Currency%20Neutral%20Results) Currency-neutral results demonstrate stronger underlying growth for Adjusted diluted net earnings per common share and Adjusted EBITDA, indicating that foreign currency fluctuations had a negative impact on reported figures Currency Neutral Results - Q3 and Nine Months Ended June 30 | Metric | Q3 2025 As Reported | Q3 2025 Currency Neutral | Q3 2024 | Q3 % Change As Reported | Q3 % Change Currency Neutral | | :--------------------------------------- | :------------------ | :----------------------- | :-------- | :---------------------- | :--------------------------- | | Adjusted diluted net earnings per common share | $1.13 | $1.16 | $0.79 | 43.0% | 46.8% | | Adjusted EBITDA | $171.4 | $173.9 | $149.7 | 14.5% | 16.2% | | | 9 Months 2025 As Reported | 9 Months 2025 Currency Neutral | 9 Months 2024 | 9 Months % Change As Reported | 9 Months % Change Currency Neutral | | Adjusted diluted net earnings per common share | $2.47 | $2.51 | $2.09 | 18.2% | 20.1% | | Adjusted EBITDA | $452.4 | $456.1 | $425.1 | 6.4% | 7.3% | - The impact of currency for Q3 2025 was a **negative $0.03** on Adjusted diluted net earnings per common share and **negative $2.5 million** on Adjusted EBITDA[47](index=47&type=chunk) - For the nine months, the currency impact was **negative $0.04** on Adjusted diluted net earnings per common share and **negative $3.7 million** on Adjusted EBITDA[47](index=47&type=chunk) [Reconciliation of Gross Profit, SG&A, and Other Items, Net](index=15&type=section&id=Reconciliation%20of%20Gross%20Profit%2C%20SG%26A%2C%20and%20Other%20Items%2C%20Net) This section provides detailed reconciliations of reported to adjusted figures for Gross Profit, SG&A, and Other items, net, highlighting the specific impacts of restructuring, network transition costs, acquisition and integration costs, and production credits on these financial metrics across quarters Gross Profit Reconciliation - Q1-Q3 FY25 vs FY24 | Metric | Q3 2025 ($M) | Q3 2024 ($M) | 9 Months 2025 ($M) | 9 Months 2024 ($M) | | :-------------------------------- | :----------- | :----------- | :----------------- | :----------------- | | Reported Gross profit | 399.7 | 277.2 | 928.3 | 797.5 | | Adjustments (net) | 0.6 | 13.4 | (43.1) | 3.1 | | Adjusted Gross profit | 400.3 | 290.8 | 888.4 | 842.3 | | Reported Gross margin | 55.1% | 39.5% | 43.8% | 38.3% | | Adjusted Gross margin | 44.8% | 41.5% | 41.9% | 40.5% | SG&A Reconciliation - Q1-Q3 FY25 vs FY24 | Metric | Q3 2025 ($M) | Q3 2024 ($M) | 9 Months 2025 ($M) | 9 Months 2024 ($M) | | :-------------------------------- | :----------- | :----------- | :----------------- | :----------------- | | Reported SG&A | 128.3 | 129.6 | 395.6 | 380.2 | | Adjustments (net) | 4.7 | 11.2 | 28.3 | 30.1 | | SG&A Adjusted - subtotal | 123.6 | 118.4 | 367.3 | 350.1 | | Reported SG&A % of Net sales | 17.7% | 18.5% | 18.7% | 18.3% | | SG&A Adjusted % of Net sales | 17.0% | 16.9% | 17.3% | 16.8% | - The Q3 2025 Gross Profit adjustments include **$2.9 million for restructuring and related costs**, **$0.9 million for network transition costs**, and a **negative $78.5 million for FY23 & FY24 production credits**[56](index=56&type=chunk) [EBITDA and Adjusted EBITDA Reconciliation](index=17&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) The reconciliation of EBITDA to Adjusted EBITDA demonstrates the impact of various non-GAAP adjustments, including restructuring costs, production credits, and share-based payments, on the company's core operational profitability, with LTM Adjusted EBITDA reaching $639.7 million EBITDA and Adjusted EBITDA Reconciliation - Q3 and LTM Ended June 30, 2025 | Metric | Q3 2025 ($M) | LTM 6/30/25 ($M) | Q3 2024 ($M) | | :-------------------------------- | :----------- | :--------------- | :----------- | | Net earnings/(loss) | 153.5 | 251.7 | (43.8) | | EBITDA | 235.1 | 573.1 | 12.9 | | Adjustments (net) | (60.7) | 66.6 | 136.8 | | Adjusted EBITDA | 171.4 | 639.7 | 149.7 | - Key adjustments for Q3 2025 include **$8.0 million for restructuring**, **$0.9 million for network transition costs**, a **negative $78.5 million for FY23 & FY24 production credits**, and **$6.3 million for share-based payments**[60](index=60&type=chunk) - The LTM Adjusted EBITDA of **$639.7 million** reflects the cumulative impact of these adjustments over the past year[60](index=60&type=chunk) [Free Cash Flow and Net Debt Reconciliation](index=17&type=section&id=Free%20Cash%20Flow%20and%20Net%20Debt%20Reconciliation) Free cash flow for the nine months ended June 30, 2025, was $16.5 million, a significant decrease from the prior year, while net debt increased to $3,190.3 million as of June 30, 2025, reflecting changes in total debt and cash balances Free Cash Flow - Nine Months Ended June 30 | Metric | 2025 ($M) | 2024 ($M) | | :-------------------------------- | :-------- | :-------- | | Net cash from operating activities | 85.6 | 260.7 | | Capital expenditures | (69.1) | (70.5) | | Proceeds from sale of assets | — | 4.9 | | Free cash flow | 16.5 | 195.1 | Net Debt - June 30, 2025 vs. September 30, 2024 | Metric | 6/30/2025 ($M) | 9/30/2024 ($M) | | :-------------------------------- | :------------- | :------------- | | Total debt per the balance sheet | 3,361.4 | 3,207.7 | | Cash and cash equivalents | 171.1 | 216.9 | | Net debt | 3,190.3 | 2,990.8 | - The substantial decrease in free cash flow is primarily due to lower net cash from operating activities[61](index=61&type=chunk) [Fiscal Year 2025 Outlook Reconciliation](index=18&type=section&id=Fiscal%20Year%202025%20Outlook%20Reconciliation) The fiscal 2025 outlook reconciliation provides a detailed breakdown of GAAP to Adjusted earnings and Adjusted EBITDA, illustrating the expected impact of various adjustments, including restructuring costs, production credits, and acquisition costs, on the full-year projections Fiscal 2025 Outlook Reconciliation - Adjusted Earnings and EPS | Metric | Fiscal Q4 2025 Outlook (Adjusted Net Earnings $M) | Fiscal Q4 2025 Outlook (Adjusted EPS) | Fiscal Year 2025 Outlook (Adjusted Net Earnings $M) | Fiscal Year 2025 Outlook (Adjusted EPS) | | :--------------------------------------- | :------------------------------------------ | :---------------------------- | :------------------------------------------ | :-------------------------- | | Fiscal 2025 - GAAP Outlook | $55 to $76 | $0.76 to $1.05 | $258 to $279 | $3.59 to $3.86 | | Impacts (net) | $21 to $7 | $0.29 to $0.10 | $(3) to $(15) | $(0.04) to $(0.21) | | Fiscal 2025 - Adjusted Outlook | $76 to $83 | $1.05 to $1.15 | $255 to $264 | $3.55 to $3.65 | Fiscal 2025 Outlook Reconciliation - Adjusted EBITDA | Metric | Fiscal Year 2025 Outlook ($M) | | :--------------------------------------- | :---------------------------- | | Net earnings | $258 to $279 | | EBITDA | $588 to $619 | | Adjustments (net) | $42 to $21 | | Adjusted EBITDA | $630 to $640 | - For the full fiscal year 2025, the outlook for Adjusted EBITDA includes an estimated impact of **negative $75 to $80 million from FY23 & FY24 production credits** and **positive impacts from restructuring ($57 to $52 million)** and **share-based payments ($28 to $23 million)**[63](index=63&type=chunk)