Financial Data and Key Metrics Changes - The company reported a 3.1% organic net sales growth for the quarter, driven by strong performance in international markets, with international organic growth exceeding 16% [23][16] - Adjusted gross margin expanded by 30 basis points year-over-year, with adjusted EBITDA at $57.2 million, and adjusted EPS at $0.24, both exceeding expectations [25][48] - Net cash used from operating activities was $72.9 million, an improvement from $86.3 million in the prior year period, ending the quarter with $214 million in cash [30] Business Line Data and Key Metrics Changes - Wet Shave organic net sales increased by 8.1%, with international growth at 18% due to improved market conditions and brand activation [26] - Sun and Skin Care organic net sales rose about 1%, with North America Sun Care growth over 5% driven by higher volumes [27] - Grooming organic net sales decreased by 2.6%, while Fem Care organic net sales fell by 11.2%, primarily due to lower volumes [28] Market Data and Key Metrics Changes - Aggregate consumption in the U.S. segment increased by 2.2%, with volume consumption remaining strong in Women's Shave and Grooming [12] - Market share gains were noted in Japan, Germany, and Canada, with the U.S. Wet Shave category experiencing flat consumption [42] - The company observed a resilient consumer base across its categories, particularly in international markets like Japan and Germany [12][16] Company Strategy and Development Direction - The company is optimistic about its new master brand strategy, particularly the replatforming of the Carefree brand in fem care [8] - Continued investment in brand support and digital activation is planned, with a focus on innovation in Sun Care and the Billie brand launch [9][38] - The leadership changes in key international markets are expected to enhance operational execution and market responsiveness [5][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to meet previously provided outlooks, despite a challenging macro environment [31] - The company anticipates organic net sales growth in the range of 2% to 4% for the fiscal year, with adjusted EBITDA expected between $340 million and $352 million [32][49] - Management highlighted the importance of local leadership and tailored strategies to drive growth in international markets [72][70] Other Important Information - The company returned nearly $23 million to shareholders during the quarter through share repurchases and dividends [30] - Adjusted SG&A expenses increased by 110 basis points, influenced by higher incentive compensation and unfavorable currency movements [47] - The company is focused on maintaining a disciplined approach to G&A costs while investing in brand innovation [18] Q&A Session Summary Question: Clarification on earnings results and guidance - Management noted that the strong earnings were influenced by a pull forward in Japan and emphasized the ongoing changes in international markets [51][52] Question: Expense line performance - Management attributed better-than-expected expense performance to productivity improvements and favorable timing in global procurement contracts [58][59] Question: Women's grooming shelf space and Billie brand growth - Management confirmed increased investment behind the Billie brand and anticipated further distribution gains [66][82] Question: Fem Care strategy and volume stabilization - Management expressed confidence in the new strategy for Fem Care, focusing on innovation and targeted marketing [67][68] Question: Gross margin expectations - Management indicated that Q1 gross margin performance was likely the strongest of the year, with expectations for a step down in subsequent quarters due to timing and structural factors [86][87] Question: International market growth outlook - Management expects international markets to continue growing at a faster rate than North America, with optimism for sequential improvement in North American performance [90][104]

Edgewell Personal Care (EPC) reported $488.9 million in revenue for the quarter ended December 2023, representing a year-over-year increase of 4.2%. EPS of $0.24 for the same period compares to $0.31 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $478.93 million, representing a surprise of +2.08%. The company delivered an EPS surprise of +300.00%, with the consensus EPS estimate being $0.06.While investors closely watch year-over-year changes in headline numbers -- revenue and e ...

Net Sales Increased 4.2%, or 3.1% Organic Maintains Full Year Outlook SHELTON, Conn., Feb. 7, 2024 /PRNewswire/ -- Edgewell Personal Care Company (NYSE: EPC) today announced results for its first fiscal quarter 2024 ended December 31, 2023.  Executive Summary Net sales were $488.9 million, an increase of 4.2% compared to the prior year quarter. Organic net sales increased 3.1% (Organic basis excludes the favorable impact from currency movements.) GAAP Diluted net Earnings Per Share ("EPS") were $0.09, com ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________ FORM 10-Q _______________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission File Number: 001-15401 _________________________________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________ FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission File Number 001-15401 EDGEWELL PERSONAL CARE COMPANY (Exact name of registrant as specifie ...

Edgewell Personal Care Company (NYSE:EPC) Q3 2023 Results Earnings Conference Call August 3, 2023 8:00 AM ET Company Participants Chris Gough - Vice President-Investor Relations Rod Little - President and Chief Executive Officer Daniel Sullivan - Chief Financial Officer and President, Europe and Latin America Conference Call Participants Nik Modi - RBC Capital Markets William Chappell - Truist Securities Christopher Carey - Wells Fargo Securities Susan Anderson - Canaccord Genuity Olivia Tong - Raymond Jame ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________ FORM 10-Q _______________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission File Number: 001-15401 _____________________________________ ...

Financial Performance - Net sales for the first six months of fiscal 2023 increased 5.6% to $1,067.5 million, with organic net sales rising 7.6% compared to the prior year period [102]. - Net sales in the second quarter of fiscal 2023 increased 9.3% to $598.4 million, with organic net sales up 11.4% driven by increased pricing and volumes [102]. - Net earnings in the second quarter of fiscal 2023 were $19.0 million, down from $23.2 million in the prior year quarter, while adjusted net earnings increased to $29.0 million from $27.0 million [102]. - Net earnings for the first six months of fiscal 2023 were $30.9 million, down from $34.4 million in the prior year period, with adjusted net earnings at $45.0 million compared to $50.2 million [104]. - Gross profit for the second quarter of fiscal 2023 was reported at $241.7 million, with a GAAP effective tax rate of 26.9% [101]. - Gross profit for the first six months of fiscal 2023 was $430.7 million, compared to $420.0 million in the prior year, with a gross margin of 40.3% versus 41.5% [108]. Expenses and Costs - Selling, General and Administrative (SG&A) expenses for the first six months of fiscal 2023 were $200.9 million, or 18.8% of net sales, compared to $198.2 million, or 19.6% of net sales in the prior year [110]. - Advertising and promotion expense for the first six months of fiscal 2023 was $108.8 million, a decrease of $7.3 million from the prior year, with A&P as a percent of net sales at 10.2% compared to 11.5% [112]. - Research and development expense for the first six months of fiscal 2023 was $27.8 million, maintaining 2.6% of net sales, consistent with the prior year [113]. - Interest expense associated with debt for the first six months of fiscal 2023 was $40.6 million, up from $35.3 million in the prior year, due to higher interest rates and increased debt [115]. - The effective tax rate for the first six months of fiscal 2023 was 27.0%, compared to 20.5% in the prior year, reflecting an unfavorable mix of earnings in higher tax rate jurisdictions [117]. Acquisitions and Impact - The acquisition of Billie, Inc. was completed on November 29, 2021, for a purchase price of $309.4 million [98]. - Organic net sales will be negatively impacted in October and November of fiscal 2023 due to the Billie acquisition, as sales previously reported as third-party sales are now inter-company sales [91]. - Net sales for the first six months of fiscal 2023 were $1,067.5 million, an increase of 5.6%, driven by a $12.0 million contribution from the Billie acquisition and a $32.0 million unfavorable impact from currency movements [106]. Segment Performance - Wet Shave segment profit for the first six months of fiscal 2023 was $70.5 million, a decrease of 10.9% from the prior year, despite an organic segment profit increase of 8.1% [125]. - Sun and Skin Care net sales for Q2 fiscal 2023 increased by $26.4 million, or 14.4%, with organic net sales up $27.5 million, or 15.0% [126]. - Feminine Care net sales for Q2 fiscal 2023 rose by $20.7 million, or 34.9%, with organic net sales increasing by $21.0 million, or 35.4% [131]. - Segment profit for Sun and Skin Care in Q2 fiscal 2023 was $39.9 million, a decrease of $2.4 million, or 5.6% [128]. - Segment profit for Feminine Care in Q2 fiscal 2023 was $12.0 million, an increase of $10.1 million, or 531.7% [133]. Cash Flow and Debt - Cash flow from operating activities was $1.9 million during the first six months of fiscal 2023, compared to cash used of $39.9 million in the prior year [147]. - Net cash used by investing activities was $20.0 million during the first six months of fiscal 2023, significantly lower than $325.7 million in the prior year [148]. - Total borrowings as of March 31, 2023, were $1,447.5 million, including $195.2 million tied to variable interest rates [139]. - As of March 31, 2023, the company had outstanding variable-rate debt of $195.2 million related to its Revolving Credit Facility and international notes payable [157]. - A one-percent increase in applicable interest rates would result in an approximate $2.0 million increase in annual interest expense on variable-rate debt instruments [157]. Corporate Governance and Compliance - The company utilizes non-GAAP measures to provide insights into operational results, excluding costs related to restructuring, acquisitions, and other non-standard items [90]. - The company emphasizes the importance of non-GAAP measures for internal decision-making and believes they provide more transparency for investors [90]. - The company expects to incur approximately $19 million in charges related to its operating model redesign in fiscal 2023, with $6.0 million incurred in the first six months [118]. - Corporate expenses for Q2 fiscal 2023 were $17.0 million, or 10.2% of net sales, compared to $17.2 million, or 8.2% of net sales in the prior year [135]. - As of March 31, 2023, the company was in compliance with the provisions and covenants associated with its debt agreements [144]. - There have been no open derivative or hedging instruments for future purchases of raw materials or commodities as of March 31, 2023 [157]. - The company's assessment of market risk sensitivity has not materially changed since the 2022 Annual Report [158].

Edgewell Personal Care Company (NYSE:EPC) Q1 2023 Earnings Conference Call February 8, 2023 8:00 AM ET Company Participants Chris Gough – Vice President-Investor Relations Rod Little – President and Chief Executive Officer Dan Sullivan – Chief Financial Officer Conference Call Participants Chris Carey – Wells Fargo Securities Susan Anderson – Canaccord Genuity Kevin Grundy – Jefferies Bill Chappell – Truist Securities Devin Weinstein – Raymond James Operator Good morning everyone. And welcome to the Edgewel ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements.](index=3&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements for **Edgewell Personal Care Company**, including statements of earnings and comprehensive income, balance sheets, cash flows, and changes in shareholders' equity, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items [Condensed Consolidated Statements of Earnings and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Income) The company reported a slight increase in net sales and net earnings for the three months ended December 31, **2022**, compared to the prior year, with significant positive foreign currency translation adjustments contributing to total comprehensive income Condensed Consolidated Statements of Earnings and Comprehensive Income | Metric | Three Months Ended Dec 31, 2022 (in millions) | Three Months Ended Dec 31, 2021 (in millions) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net sales | $469.1 | $463.3 | | Gross profit | $189.0 | $189.9 | | Operating income | $31.3 | $31.8 | | Net earnings | $11.9 | $11.2 | | Basic net earnings per share | $0.23 | $0.21 | | Diluted net earnings per share | $0.23 | $0.20 | | Foreign currency translation adj. | $48.0 | $(6.9) | | Total comprehensive income | $51.5 | $4.7 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, **2022**, total assets increased primarily due to higher inventories and goodwill, while total liabilities also rose, mainly from an increase in long-term debt Condensed Consolidated Balance Sheets | Metric | December 31, 2022 (in millions) | September 30, 2022 (in millions) | | :--------------------------------- | :------------------------------ | :------------------------------- | | Total current assets | $1,007.5 | $942.2 | | Inventories | $540.2 | $449.3 | | Goodwill | $1,332.3 | $1,322.2 | | Total assets | $3,797.0 | $3,713.1 | | Total current liabilities | $501.3 | $548.0 | | Long-term debt | $1,492.0 | $1,391.4 | | Total liabilities | $2,310.3 | $2,253.4 | | Total shareholders' equity | $1,486.7 | $1,459.7 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced net cash used by operating activities, a significant decrease in cash used by investing activities due to the prior year's **Billie acquisition**, and a reduction in net cash from financing activities for the three months ended December 31, **2022** Condensed Consolidated Statements of Cash Flows | Metric | Three Months Ended Dec 31, 2022 (in millions) | Three Months Ended Dec 31, 2021 (in millions) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash used by operating activities | $(86.3) | $(79.0) | | Net cash used by investing activities | $(11.2) | $(312.7) |\n| Net cash from financing activities | $82.9 | $155.5 | | Effect of exchange rate changes on cash | $10.0 | $(3.2) | | Net decrease in cash and cash equivalents | $(4.6) | $(239.4) | | Cash and cash equivalents, end of period | $184.1 | $239.8 | - The decrease in cash used by investing activities in **2022** was primarily due to the **Billie acquisition** (**$308.8 million**) occurring in the prior year period[14](index=14&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased from September 30, **2022**, to December 31, **2022**, driven by net earnings and positive foreign currency translation adjustments, partially offset by share repurchases and dividends Condensed Consolidated Statements of Changes in Shareholders' Equity | Metric | Balance at Sep 30, 2022 (in millions) | Balance at Dec 31, 2022 (in millions) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | | Total Shareholders' Equity | $1,459.7 | $1,486.7 | | Net earnings | - | $11.9 | | Foreign currency translation adj. | - | $48.0 | | Dividends declared | - | $(8.0) |\n| Repurchase of shares | - | $(15.0) | [Notes to Condensed Consolidated Financial Statements.](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements.) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering the company's background, significant accounting policies, business combinations, restructuring activities, income taxes, earnings per share, goodwill and intangible assets, supplemental balance sheet information, leases, accounts receivable facilities, debt, retirement plans, shareholders' equity, accumulated other comprehensive loss, financial instruments and risk management, segment data, and subsequent events [Note 1 - Background and Basis of Presentation](index=7&type=section&id=Note%201%20-%20Background%20and%20Basis%20of%20Presentation) **Edgewell Personal Care Company** is a global manufacturer and marketer of personal care products across **Wet Shave**, **Sun and Skin Care**, and **Feminine Care** segments, with financial statements prepared in accordance with **U.S. GAAP** - **Edgewell** operates in three segments: **Wet Shave** (**Schick**®, **Wilkinson Sword**®, **Edge**, **Skintimate**®, **Billie**®, **Shave Guard**, **Personna**®), **Sun and Skin Care** (**Banana Boat**®, **Hawaiian Tropic**®, **Jack Black**®, **Bulldog**®, **Cremo**®, **Wet Ones**®), and **Feminine Care** (**Playtex Gentle Glide**®, **Sport**®, **Stayfree**®, **Carefree**®, **o.b.**®)[19](index=19&type=chunk)[23](index=23&type=chunk) - The company completed the **Billie acquisition**, **Inc.** on November 29, **2021**, and its results are included post-acquisition[21](index=21&type=chunk) [Note 2 - Business Combinations](index=8&type=section&id=Note%202%20-%20Business%20Combinations) The **Billie acquisition**, **Inc.** on November 29, **2021**, for **$309.4 million** cash consideration, was finalized in Q4 fiscal year **2022**, with significant goodwill and intangible assets integrated into the **Wet Shave** segment - **Billie**, **Inc.** was acquired for **$309.4 million** cash, net of cash acquired, on November 29, **2021**[24](index=24&type=chunk) Note 2 - Business Combinations | Acquired Asset/Liability | Fair Value (in millions) | | :----------------------- | :----------------------- | | Current assets | $17.0 | | Goodwill | $181.2 | | Intangible assets | $136.0 | | Other assets | $3.2 | | Current liabilities | $(6.9) | | Deferred tax liabilities | $(21.1) | | Total | $309.4 | - The acquired goodwill represents expansion into new markets and channels, and intangible assets primarily consist of the **Billie** trade name and customer relationships with a weighted average useful life of **19 years**, all included in the **Wet Shave** segment[26](index=26&type=chunk) [Note 3 - Restructuring Charges](index=8&type=section&id=Note%203%20-%20Restructuring%20Charges) The company is undertaking an **operating model redesign** in fiscal **2023**, expecting to incur approximately **$18 million** in restructuring charges, with **$2.8 million** incurred for the three months ended December 31, **2022** - Expected restructuring charges for fiscal **2023** are approximately **$18 million**[27](index=27&type=chunk) Note 3 - Restructuring Charges | Restructuring Category | Three Months Ended Dec 31, 2022 (in millions) | Three Months Ended Dec 31, 2021 (in millions) | | :--------------------- | :--------------------------------------------- | :--------------------------------------------- | | Severance and related benefit costs | $0.9 | $1.3 | | Consulting, project implementation, and other exit costs | $1.9 | $0.9 | | Total restructuring | $2.8 | $2.2 | [Note 4 - Income Taxes](index=9&type=section&id=Note%204%20-%20Income%20Taxes) The effective tax rate for the three months ended December 31, **2022**, was **27.1%**, a decrease from **30.9%** in the prior year, primarily due to a less unfavorable mix of earnings and the absence of non-deductible acquisition expenses Note 4 - Income Taxes | Metric | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | | :--------------------- | :------------------------------ | :------------------------------ | | Income tax provision | $4.5 | $5.0 | | Earnings before income taxes | $16.4 | $16.2 | | Effective tax rate | 27.1% | 30.9% | - The decrease in the effective tax rate was mainly due to a more favorable mix of earnings in higher tax rate jurisdictions and the absence of non-deductible expenses related to the **Billie acquisition**, which impacted the prior year[29](index=29&type=chunk)[30](index=30&type=chunk) [Note 5 - Earnings per Share](index=9&type=section&id=Note%205%20-%20Earnings%20per%20Share) Basic and diluted earnings per share calculations are based on weighted-average common shares outstanding, adjusted for dilutive securities, with diluted weighted-average shares outstanding decreasing in Q1 fiscal **2023** compared to Q1 fiscal **2022** Note 5 - Earnings per Share | Metric | Three Months Ended Dec 31, 2022 (in millions) | Three Months Ended Dec 31, 2021 (in millions) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Basic weighted-average shares outstanding | 51.6 | 54.4 | | Diluted weighted-average shares outstanding | 51.9 | 55.0 | - Certain share options and RSE/PRSE awards were excluded from diluted EPS calculations as their effect was anti-dilutive[32](index=32&type=chunk) [Note 6 - Goodwill and Intangible Assets](index=10&type=section&id=Note%206%20-%20Goodwill%20and%20Intangible%20Assets) Goodwill increased slightly across all segments, primarily due to cumulative translation adjustments, while net intangible assets decreased due to amortization, with estimated future amortization expenses provided Note 6 - Goodwill and Intangible Assets | Segment | Net Goodwill at Dec 31, 2022 (in millions) | Net Goodwill at Oct 1, 2022 (in millions) | | :---------------- | :----------------------------------------- | :---------------------------------------- | | Wet Shave | $772.5 | $764.5 | | Sun and Skin Care | $353.7 | $352.5 | | Feminine Care | $206.1 | $205.2 | | Total | $1,332.3 | $1,322.2 | Note 6 - Goodwill and Intangible Assets | Intangible Asset Class | Net at Dec 31, 2022 (in millions) | Net at Sep 30, 2022 (in millions) | | :--------------------- | :-------------------------------- | :-------------------------------- | | Indefinite lived trade names and brands | $593.9 | $587.1 | | Amortizable trade names and brands | $263.2 | $267.2 | | Technology and patents | $2.7 | $2.8 | | Customer related and other | $137.0 | $139.5 | | Total amortizable intangible assets | $402.9 | $409.5 | - Amortization expense was **$7.7 million** for the three months ended December 31, **2022**, up from **$6.1 million** in the prior year, with estimated amortization for the remainder of fiscal **2023** at **$23.0 million**[34](index=34&type=chunk) [Note 7 - Supplemental Balance Sheet Information](index=11&type=section&id=Note%207%20-%20Supplemental%20Balance%20Sheet%20Information) This note provides detailed breakdowns of inventories, other current assets, property, plant and equipment, other current liabilities, and other liabilities, showing changes between December 31, **2022**, and September 30, **2022** Note 7 - Supplemental Balance Sheet Information | Category | December 31, 2022 (in millions) | September 30, 2022 (in millions) | | :--------------------------------- | :------------------------------ | :------------------------------- | | Total inventories | $540.2 | $449.3 | | Total other current assets | $160.1 | $167.3 | | Total property, plant and equipment, net | $348.6 | $345.5 | | Total other current liabilities | $231.1 | $291.7 | | Total other liabilities | $176.1 | $173.6 | - Finished products inventory increased significantly from **$265.7 million** to **$342.1 million**[36](index=36&type=chunk) - Accrued salaries, vacations, and incentive compensation decreased from **$51.1 million** to **$33.2 million**[36](index=36&type=chunk) [Note 8 - Leases](index=12&type=section&id=Note%208%20-%20Leases) The company leases various assets, classifying all recorded leases as operating leases, with right-of-use assets and lease liabilities remaining stable, a weighted-average remaining lease term of **10 years**, and an incremental borrowing rate of **6.6%** Note 8 - Leases | Lease Metric | December 31, 2022 (in millions) | September 30, 2022 (in millions) | | :--------------------------------- | :------------------------------ | :------------------------------- | | Right of use assets | $50.1 | $50.1 | | Total lease liabilities | $50.4 | $50.3 | | Weighted-average remaining lease term (years) | 10 | 10 | | Weighted-average incremental borrowing rate | 6.6% | 6.6% | Note 8 - Leases | Lease Cost | Three Months Ended Dec 31, 2022 (in millions) | Three Months Ended Dec 31, 2021 (in millions) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Lease cost | $3.0 | $3.5 | [Note 9 - Accounts Receivable Facility](index=13&type=section&id=Note%209%20-%20Accounts%20Receivable%20Facility) The company participates in accounts receivable purchase agreements, treating transfers as sales, with accounts receivables sold increasing significantly in Q1 fiscal **2023** compared to the prior year, resulting in a higher loss on sale of trade receivables - Accounts receivable purchase agreements are accounted for as sales, with the purchaser assuming credit risk[40](index=40&type=chunk) Note 9 - Accounts Receivable Facility | Metric | Three Months Ended Dec 31, 2022 (in millions) | Three Months Ended Dec 31, 2021 (in millions) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Accounts receivables sold | $212.1 | $155.3 | | Loss on sale of trade receivables | $0.9 | $0.2 | [Note 10 - Debt](index=13&type=section&id=Note%2010%20-%20Debt) Total long-term debt increased to **$1,492.0 million** as of December 31, **2022**, primarily due to increased borrowings under the **U.S. revolving credit facility**, which was amended in February **2023** to transition from **LIBOR** to **SOFR** Note 10 - Debt | Debt Type | December 31, 2022 (in millions) | September 30, 2022 (in millions) | | :--------------------------------- | :------------------------------ | :------------------------------- | | Senior notes, 5.500%, due 2028 | $750.0 | $750.0 | | Senior notes, 4.125%, due 2029 | $500.0 | $500.0 | | U.S. revolving credit facility | $255.0 | $155.0 | | Total long-term debt | $1,492.0 | $1,391.4 | - The **U.S. revolving credit facility** was amended on February 6, **2023**, to transition from **LIBOR** to **SOFR**, with no material impact expected on interest expense[45](index=45&type=chunk) [Note 11 - Retirement Plans](index=13&type=section&id=Note%2011%20-%20Retirement%20Plans) The company's net periodic pension and postretirement costs increased to **$0.7 million** for the three months ended December 31, **2022**, from an income of **$(0.2) million** in the prior year, mainly due to higher interest costs and recognized net actuarial losses Note 11 - Retirement Plans | Component | Three Months Ended Dec 31, 2022 (in millions) | Three Months Ended Dec 31, 2021 (in millions) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Service cost | $0.5 | $1.0 | | Interest cost | $5.2 | $2.6 | | Expected return on plan assets | $(5.4) | $(5.3) | | Recognized net actuarial loss | $0.4 | $1.5 | | Net periodic cost (income) | $0.7 | $(0.2) | [Note 12 - Shareholders' Equity](index=14&type=section&id=Note%2012%20-%20Shareholders'%20Equity) The company repurchased **$15.0 million** of common stock and declared **$8.0 million** in dividends during the three months ended December 31, **2022**, with a quarterly cash dividend of **$0.15** per common share declared for both the fourth fiscal quarter of **2022** and the first fiscal quarter of **2023** - The company repurchased **0.4 million** shares of common stock for **$15.0 million** during the three months ended December 31, **2022**, with **6.1 million** shares remaining available for repurchase[48](index=48&type=chunk) - Dividends declared totaled **$8.0 million**, and payments made were **$8.3 million** for the three months ended December 31, **2022**[49](index=49&type=chunk) - A quarterly cash dividend of **$0.15** per common share was declared for both the fourth fiscal quarter of **2022** and the first fiscal quarter of **2023**[49](index=49&type=chunk)[50](index=50&type=chunk) [Note 13 - Accumulated Other Comprehensive Loss](index=14&type=section&id=Note%2013%20-%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated other comprehensive loss (AOCI) decreased from **$(216.1) million** to **$(176.5) million**, primarily due to positive foreign currency translation adjustments, partially offset by deferred losses on hedging activity Note 13 - Accumulated Other Comprehensive Loss | Component | Balance at Oct 1, 2022 (in millions) | Balance at Dec 31, 2022 (in millions) | | :--------------------------------- | :----------------------------------- | :------------------------------------ | | Foreign Currency Translation Adjustments | $(131.2) | $(83.2) | | Pension and Post-retirement Activity | $(92.6) | $(92.8) | | Hedging Activity | $7.7 | $(0.5) | | Total AOCI | $(216.1) | $(176.5) | - OCI before reclassifications included **$48.0 million** in foreign currency translation adjustments and **$(8.2) million** in deferred loss on hedging activity[51](index=51&type=chunk) [Note 14 - Financial Instruments and Risk Management](index=15&type=section&id=Note%2014%20-%20Financial%20Instruments%20and%20Risk%20Management) The company uses derivative instruments, primarily forward currency contracts, to manage foreign currency risk, and as of December 31, **2022**, had unrealized pre-tax losses on cash flow hedges and recorded losses on derivatives not designated as hedges - The company is exposed to foreign currency risk, particularly with the euro, Japanese yen, British pound, Canadian dollar, and Australian dollar[54](index=54&type=chunk) - At December 31, **2022**, the company had unrealized pre-tax losses of **$0.7 million** on cash flow hedges (forward currency contracts) and recorded a loss of **$2.7 million** on derivatives not designated as hedges[57](index=57&type=chunk)[58](index=58&type=chunk) Note 14 - Financial Instruments and Risk Management | Derivative Type | Fair Value of Assets (Dec 31, 2022, in millions) | Fair Value of Assets (Sep 30, 2022, in millions) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Designated as cash flow hedges | $(0.7) | $11.3 | | Not designated as cash flow hedges | $(2.7) | $2.0 | [Note 15 - Segment Data](index=17&type=section&id=Note%2015%20-%20Segment%20Data) Segment performance is evaluated based on segment profit, excluding general corporate expenses and non-recurring costs, with **Sun and Skin Care** and **Feminine Care** segments showing growth, while **Wet Shave** experienced declines in Q1 fiscal **2023** Note 15 - Segment Data | Segment | Net Sales Q1 FY23 (in millions) | Net Sales Q1 FY22 (in millions) | Segment Profit Q1 FY23 (in millions) | Segment Profit Q1 FY22 (in millions) | | :---------------- | :------------------------------ | :------------------------------ | :----------------------------------- | :----------------------------------- | | Wet Shave | $275.3 | $286.1 | $35.4 | $51.5 | | Sun and Skin Care | $112.9 | $104.8 | $13.1 | $3.7 | | Feminine Care | $80.9 | $72.4 | $11.8 | $8.4 | | Total | $469.1 | $463.3 | $60.3 | $63.6 | Note 15 - Segment Data | Geographic Area | Net Sales Q1 FY23 (in millions) | Net Sales Q1 FY22 (in millions) | | :---------------- | :------------------------------ | :------------------------------ | | United States | $271.8 | $262.5 | | International | $197.3 | $200.8 | | Total | $469.1 | $463.3 | Note 15 - Segment Data | Product Category | Net Sales Q1 FY23 (in millions) | Net Sales Q1 FY22 (in millions) | | :----------------- | :------------------------------ | :------------------------------ | | Razors and blades | $247.0 | $255.7 | | Tampons, pads, and liners | $80.9 | $72.4 | | Sun care products | $47.8 | $40.2 | | Grooming products | $47.3 | $46.3 | | Wipes and other skin care | $17.8 | $18.3 | | Shaving gels and creams | $28.3 | $30.4 | | Total | $469.1 | $463.3 | [Note 16 - Subsequent Event](index=19&type=section&id=Note%2016%20-%20Subsequent%20Event) Subsequent to the reporting period, the company received approval to wind-up its **Canada Defined Benefit Plan**, which will result in a non-cash settlement expense of approximately **$8.0 million** - On January 25, **2023**, approval was received to wind-up the **Canada Defined Benefit Plan**, leading to an estimated non-cash settlement expense of **$8.0 million**[74](index=74&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial performance and condition for the first quarter of fiscal **2023**, discussing net sales, earnings, segment results, liquidity, and capital resources, including the impact of non-GAAP measures and significant events like the **Billie acquisition** [Forward-Looking Statements](index=20&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements reflecting expectations and projections, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are not guarantees of performance and are subject to inherent risks and uncertainties[77](index=77&type=chunk) - The company disclaims any obligation to publicly update forward-looking statements, except as required by law[77](index=77&type=chunk) [Non-GAAP Financial Measures](index=20&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like 'adjusted' and 'organic' to supplement GAAP results, excluding items such as restructuring, acquisition, and **Sun Care** reformulation costs, to provide more meaningful period-to-period comparisons and insights into underlying operational results - Non-GAAP measures (adjusted, organic) exclude restructuring, acquisition and integration costs, **Sun Care** reformulation charges, and other non-standard items[79](index=79&type=chunk)[82](index=82&type=chunk) - Organic net sales and segment profit exclude the impact of foreign currency translation and the **Billie acquisition**[81](index=81&type=chunk) [Industry and Market Data](index=21&type=section&id=Industry%20and%20Market%20Data) Information regarding industry, market size, market position, and market share is based on internal and external estimates, which are inherently imprecise and subject to change - Market data is based on internal and external estimates, which are inherently imprecise and not independently verified[83](index=83&type=chunk) [Trademarks and Trade Names](index=21&type=section&id=Trademarks%20and%20Trade%20Names) The company owns or has rights to use various trademarks and trade names in its business operations, which are referenced throughout the report - The company owns or has rights to use trademarks and trade names in its business operations[85](index=85&type=chunk) [Impact of the COVID-19 Pandemic](index=21&type=section&id=Impact%20of%20the%20COVID-19%20Pandemic) The company has implemented health and safety measures and has not experienced material operational disruptions from **COVID-19**, but acknowledges ongoing supply chain challenges and potential future impacts on costs and labor - No material operational disruptions have been experienced across manufacturing or distribution facilities due to **COVID-19**[87](index=87&type=chunk) - The prolonged pandemic has led to increased supply chain challenges in labor, raw material procurement, and product distribution, potentially increasing costs[88](index=88&type=chunk) [Significant Events](index=21&type=section&id=Significant%20Events) The primary significant event was the **Billie acquisition**, **Inc.** on November 29, **2021**, for **$309.4 million**, which became a wholly-owned subsidiary - The **Billie acquisition**, **Inc.** was completed on November 29, **2021**, for **$309.4 million**, net of cash acquired[89](index=89&type=chunk) [Executive Summary](index=22&type=section&id=Executive%20Summary) For the first quarter of fiscal **2023**, net sales increased by **1.3%**, while reported net earnings and diluted EPS also rose, though adjusted net earnings and diluted EPS declined due to lower gross margins, inflationary pressures, foreign currency impacts, and higher SG&A and interest costs Executive Summary | Metric | Q1 FY23 GAAP (in millions) | Q1 FY22 GAAP (in millions) | Q1 FY23 Adjusted (in millions) | Q1 FY22 Adjusted (in millions) | | :--------------------------------- | :------------------------- | :------------------------- | :----------------------------- | :----------------------------- | | Net sales | $469.1 | $463.3 | - | - | | Net earnings | $11.9 | $11.2 | $16.0 | $23.2 | | Diluted EPS | $0.23 | $0.20 | $0.31 | $0.42 | - Adjusted earnings declined despite higher net sales due to lower gross margins from inflationary pressures and foreign currency, and higher SG&A and interest costs[94](index=94&type=chunk) [Operating Results](index=22&type=section&id=Operating%20Results) Net sales increased by **1.3%** to **$469.1 million** in Q1 fiscal **2023**, driven by organic growth and the **Billie acquisition**, despite a negative impact from currency movements, while gross profit margin decreased due to higher costs Operating Results | Metric | Q1 FY23 (in millions) | Q1 FY22 (in millions) | % Change | | :--------------------------------- | :-------------------- | :-------------------- | :------- | | Net sales | $469.1 | $463.3 | 1.3% | | Organic net sales growth | $14.0 | - | 3.0% | | Impact of Billie acquisition, net | $12.0 | - | 2.6% | | Impact of currency | $(20.2) | - | (4.3)% | - Gross profit was **$189.0 million** (**40.3%** of net sales) in Q1 FY23, down from **$189.9 million** (**41.0%** of net sales) in Q1 FY22, primarily due to a **500-basis point** impact from higher commodity and transportation costs, partially offset by productivity savings and higher pricing[96](index=96&type=chunk) - Interest expense increased to **$19.9 million** from **$17.3 million** due to higher interest rates and a larger overall debt balance[100](index=100&type=chunk) [Operating Model Redesign](index=24&type=section&id=Operating%20Model%20Redesign) The company is continuing its **operating model redesign** in fiscal **2023** to enhance efficiency, expecting approximately **$18 million** in charges, with **$2.8 million** incurred in Q1 fiscal **2023** primarily for severance and benefits - The company expects to incur approximately **$18 million** in restructuring charges in fiscal **2023** for its **operating model redesign**[103](index=103&type=chunk) - **$2.8 million** in charges were incurred during Q1 fiscal **2023**, mainly for employee severance and benefit costs[103](index=103&type=chunk) [Segment Results](index=24&type=section&id=Segment%20Results) Segment results for Q1 fiscal **2023** show varied performance: **Wet Shave** net sales and profit declined, while **Sun and Skin Care** and **Feminine Care** segments reported increases in both net sales and profit [Wet Shave](index=24&type=section&id=Wet%20Shave) **Wet Shave** net sales decreased by **3.8%** to **$275.3 million** in Q1 fiscal **2023**, with organic net sales declining **1.9%** due to unit declines, and segment profit falling by **31.3%** due to lower sales, higher costs, negative currency impact, and increased brand investment Wet Shave | Metric | Q1 FY23 (in millions) | Q1 FY22 (in millions) | % Change | | :--------------------------------- | :-------------------- | :-------------------- | :------- | | Net sales | $275.3 | $286.1 | (3.8)% | | Organic net sales change | $(5.3) | - | (1.9)% | | Segment profit | $35.4 | $51.5 | (31.3)% | - The decline in segment profit was attributed to lower organic net sales, higher cost of goods sold, negative foreign currency impact, and increased brand investment[107](index=107&type=chunk) [Sun and Skin Care](index=25&type=section&id=Sun%20and%20Skin%20Care) **Sun and Skin Care** net sales increased by **7.7%** to **$112.9 million** in Q1 fiscal **2023**, driven by **10.1%** organic growth, primarily from strong international **Sun Care** performance, with segment profit surging by **254.1%** due to higher sales and stronger gross profit from increased pricing Sun and Skin Care | Metric | Q1 FY23 (in millions) | Q1 FY22 (in millions) | % Change | | :--------------------------------- | :-------------------- | :-------------------- | :------- | | Net sales | $112.9 | $104.8 | 7.7% | | Organic net sales change | $10.6 | - | 10.1% | | Segment profit | $13.1 | $3.7 | 254.1% | - International **Sun Care** growth was **68%**, led by Oceania and Latin America, while North America **Sun Care** organic net sales decreased **6.5%**[109](index=109&type=chunk) [Feminine Care](index=25&type=section&id=Feminine%20Care) **Feminine Care** net sales increased by **11.7%** to **$80.9 million** in Q1 fiscal **2023**, driven by higher pricing and improved product availability, with segment profit rising by **40.5%** due to increased sales and gross profit, partially offset by higher advertising and promotion support Feminine Care | Metric | Q1 FY23 (in millions) | Q1 FY22 (in millions) | % Change | | :--------------------------------- | :-------------------- | :-------------------- | :------- | | Net sales | $80.9 | $72.4 | 11.7% | | Organic net sales change | $8.7 | - | 12.0% | | Segment profit | $11.8 | $8.4 | 40.5% | - The increase in net sales was driven by higher pricing and improved product availability[111](index=111&type=chunk) [General Corporate and Other Expenses](index=26&type=section&id=General%20Corporate%20and%20Other%20Expenses) General corporate and other expenses decreased to **$21.3 million** in Q1 fiscal **2023** from **$25.7 million** in the prior year, primarily due to lower acquisition and integration costs and the absence of VAT settlement costs, despite an increase in core corporate expenses General Corporate and Other Expenses | Expense Category | Q1 FY23 (in millions) | Q1 FY22 (in millions) | | :--------------------------------- | :-------------------- | :-------------------- | | Corporate expenses | $15.9 | $10.8 | | Restructuring and related costs | $2.8 | $2.2 | | Acquisition and integration costs | $2.1 | $6.0 | | Sun Care reformulation costs | $0.5 | $3.3 | | Value-added tax settlement costs | — | $3.4 | | Total General corporate and other expenses | $21.3 | $25.7 | - The increase in core corporate expenses was primarily due to higher benefit and legal costs[113](index=113&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company's total borrowings increased to **$1,530.2 million** as of December 31, **2022**, with **$164.1 million** available under its revolving credit facility, and management expects sufficient liquidity from cash on hand, operations, and borrowing capacity to meet future requirements - Total borrowings were **$1,530.2 million** at December 31, **2022**, with **$280.2 million** tied to variable interest rates[117](index=117&type=chunk) - **$164.1 million** was available under the Revolving Credit Facility as of December 31, **2022**[117](index=117&type=chunk) - The company expects to generate positive cash flows from operations, which are affected by the seasonality of **Sun Care** products[119](index=119&type=chunk) [Cash Flows](index=28&type=section&id=Cash%20Flows) Net cash used by operating activities increased to **$86.3 million** in Q1 fiscal **2023** due to a larger working capital build, while net cash used by investing activities significantly decreased due to the prior year's **Billie acquisition**, and net cash from financing activities also decreased Cash Flows | Cash Flow Activity | Q1 FY23 (in millions) | Q1 FY22 (in millions) | | :--------------------------------- | :-------------------- | :-------------------- | | Operating activities | $(86.3) | $(79.0) | | Investing activities | $(11.2) | $(312.7) | | Financing activities | $82.9 | $155.5 | | Net (decrease) increase in cash and cash equivalents | $(4.6) | $(239.4) | - The decrease in cash flows from operating activities was driven by a larger net working capital build[125](index=125&type=chunk) - Investing activities in the prior year included the **$308.8 million Billie acquisition** and **$5.0 million** from the sale of the Infant and Pet Care business[126](index=126&type=chunk) [Share Repurchases](index=28&type=section&id=Share%20Repurchases) The company repurchased **0.4 million** shares of common stock for **$15.0 million** during Q1 fiscal **2023**, with **6.1 million** shares remaining under the Board's authorization - **0.4 million** shares were repurchased for **$15.0 million** in Q1 fiscal **2023**[128](index=128&type=chunk) - **6.1 million** shares remain available for repurchase under the **2018** Board authorization[128](index=128&type=chunk) [Dividends](index=28&type=section&id=Dividends) Dividends declared totaled **$8.0 million** in Q1 fiscal **2023**, with a quarterly cash dividend of **$0.15** per common share declared for both the fourth fiscal quarter of **2022** and the first fiscal quarter of **2023** - Dividends declared during Q1 fiscal **2023** totaled **$8.0 million**[130](index=130&type=chunk) - A quarterly cash dividend of **$0.15** per common share was declared for the fourth fiscal quarter of **2022** (paid Jan 4, **2023**) and the first fiscal quarter of **2023** (payable April 5, **2023**)[129](index=129&type=chunk) [Commitments and Contingencies](index=28&type=section&id=Commitments%20and%20Contingencies) As of December 31, **2022**, the company had **$255.0 million** outstanding under its revolving credit facility, with future minimum debt repayments scheduled for fiscal years **2025**, **2028**, and **2029** - Outstanding borrowings under the Revolving Credit Facility were **$255.0 million** as of December 31, **2022**[131](index=131&type=chunk) Commitments and Contingencies | Fiscal Year | Future Minimum Debt Repayments (in millions) | | :---------- | :------------------------------------------- | | 2025 | $255.0 | | 2028 | $750.0 | | 2029 | $500.0 | [Critical Accounting Policies](index=29&type=section&id=Critical%20Accounting%20Policies) There have been no significant changes to the company's critical accounting policies and estimates since September 30, **2022**, which are fully described in its **2022** Annual Report - No significant changes to critical accounting policies and estimates since September 30, **2022**[132](index=132&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company's market risk primarily stems from adverse changes in currency rates, commodity prices, and interest rates, using derivatives to mitigate foreign currency exposure, where a **1%** increase in interest rates would raise annual interest expense by approximately **$2.8 million** - Market risk is inherent in financial instruments and positions, primarily from currency rates, commodity prices, and interest rates[134](index=134&type=chunk) - The company uses contractual arrangements (derivatives) to reduce foreign currency exposures[134](index=134&type=chunk) - A **one-percent** increase in applicable interest rates on variable-rate debt (**$280.2 million**) would increase annual interest expense by approximately **$2.8 million**[134](index=134&type=chunk) [Item 4. Controls and Procedures.](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of December 31, **2022**, concluding they were effective, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of December 31, **2022**[138](index=138&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended December 31, **2022**[139](index=139&type=chunk) PART II. OTHER INFORMATION [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) During the first quarter of fiscal **2023**, the company repurchased **378,301** shares under its **2018** Board authorization, with **6,097,729** shares remaining available for repurchase as of December 31, **2022** Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--------------------- | :------------------------------- | :--------------------------- | | October 1 to 31, 2022 | 129,549 | $38.56 | | November 1 to 30, 2022 | 307,919 | $39.96 | | December 1 to 31, 2022 | 141,907 | $40.65 | - **378,301** shares were repurchased under the **2018** Board authorization during Q1 fiscal **2023**[143](index=143&type=chunk) - As of December 31, **2022**, **6,097,729** shares remained available for repurchase under the plan[142](index=142&type=chunk) [Item 6. Exhibits.](index=33&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, credit agreements, indentures, and certifications from the CEO and CFO - Exhibits include corporate organizational documents (Articles of Incorporation, Bylaws), debt agreements (Credit Agreement, Indentures), and certifications (CEO/CFO certifications under **Sarbanes-Oxley Act**)[145](index=145&type=chunk)[146](index=146&type=chunk) [SIGNATURE](index=34&type=section&id=SIGNATURE) The report is duly signed on behalf of **Edgewell Personal Care Company** by Daniel J. Sullivan, Chief Financial Officer, on February 8, **2023** - The report was signed by Daniel J. Sullivan, Chief Financial Officer, on February 8, **2023**[149](index=149&type=chunk)