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)

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, 2022 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) Q4 2022 Earnings Conference Call November 10, 2022 8:00 AM ET Company Participants Chris Gough - Vice President-Investor Relations Rod Little - President & Chief Executive Officer Dan Sullivan - Chief Financial Officer Conference Call Participants Chris Carey - Wells Fargo Securities Kevin Grundy - Jefferies Nik Modi - RBC Capital Markets Bill Chappell - Truist Securities Olivia Tong - Raymond James Operator Good day, and welcome to the Edgewell Personal Care Q4 202 ...

Edgewell Personal Care Company (NYSE:EPC) Q3 2022 Results Conference Call August 4, 2022 8:00 AM ET Company Participants Rod Little - President, Chief Executive Officer & Director Chris Gough - Vice President, Investor Relations, Corporate Development & Treasury Dan Sullivan - Chief Financial Officer Conference Call Participants Olivia Tong - Raymond James Jason English - Goldman Sachs Bill Chappell - Trust Securities Nik Modi - RBC Capital Markets Kevin Grundy - Jefferies Chris Carey - Wells Fargo Securiti ...

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, including statements of earnings and comprehensive income, balance sheets, cash flows, and changes in shareholders' equity, along with detailed notes explaining accounting policies, business combinations, restructuring, and other financial details for the periods ended June 30, 2022 and 2021 [Condensed Consolidated Statements of Earnings and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Income) **Condensed Consolidated Statements of Earnings and Comprehensive Income (in millions, except per share data):** | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net sales | $623.8 | $573.7 | $1,634.8 | $1,544.1 | | Gross profit | $240.6 | $270.3 | $660.6 | $705.3 | | Operating income | $49.9 | $71.1 | $123.4 | $175.6 | | Net earnings | $30.5 | $40.8 | $64.9 | $72.9 | | Diluted net earnings per share | $0.57 | $0.74 | $1.20 | $1.32 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) **Condensed Consolidated Balance Sheets (in millions):** | Metric | June 30, 2022 | September 30, 2021 | | :-------------------------- | :------------ | :----------------- | | Total assets | $3,721.3 | $3,674.6 | | Total liabilities | $2,243.2 | $2,090.3 | | Total shareholders' equity | $1,478.1 | $1,584.3 | | Cash and cash equivalents | $181.6 | $479.2 | | Goodwill | $1,332.3 | $1,162.8 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Statements of Cash Flows (in millions):** | Metric | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | | :--------------------------------------- | :------------------------------ | :------------------------------ | | Net cash from operating activities | $72.4 | $155.9 | | Net cash used by investing activities | $(337.6) | $(26.1) | | Net cash used by financing activities | $(21.4) | $(59.9) | | Net (decrease) increase in cash and cash equivalents | $(297.6) | $72.8 | - Net cash used by investing activities significantly increased in 2022, primarily due to the **$309.4 million acquisition of Billie**, net of cash acquired[16](index=16&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) **Key Changes in Shareholders' Equity (in millions):** | Metric | June 30, 2022 | September 30, 2021 | | :-------------------------- | :------------ | :----------------- | | Total Shareholders' Equity | $1,478.1 | $1,584.3 | | Common shares in treasury at cost | $(846.5) | $(776.3) | | Accumulated other comprehensive loss | $(181.9) | $(136.9) | - During the nine months ended June 30, 2022, the company repurchased **$110.1 million of shares** and declared **$24.7 million in dividends** to common shareholders[18](index=18&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 - Background and Basis of Presentation](index=8&type=section&id=Note%201%20-%20Background%20and%20Basis%20of%20Presentation) This note outlines Edgewell's business segments (Wet Shave, Sun and Skin Care, Feminine Care), confirms the financial statements' adherence to U.S. GAAP, and highlights the acquisition of Billie, Inc. and the adoption of ASU 2019-12 with no material impact - Edgewell operates in three segments: Wet Shave, Sun and Skin Care, and Feminine Care[23](index=23&type=chunk) - The acquisition of Billie, Inc., a consumer brand company for women's personal care products, was completed on **November 29, 2021**[24](index=24&type=chunk) - The Company adopted Accounting Standards Update 2019-12 as of **October 1, 2021**, with no material effect on its financial position, results of operations, or cash flows[25](index=25&type=chunk) [Note 2 - Business Combinations](index=9&type=section&id=Note%202%20-%20Business%20Combinations) The Company completed the acquisition of Billie, Inc. on November 29, 2021, for $309.4 million cash, net of cash acquired. The preliminary purchase price allocation includes $181.2 million in goodwill and $136.0 million in intangible assets, primarily allocated to the Wet Shave segment. Billie contributed $67.6 million in net sales and a $4.8 million loss before income taxes for the post-acquisition period - Acquisition of Billie, Inc. was completed on **November 29, 2021**, for cash consideration of **$309.4 million**, net of cash acquired[28](index=28&type=chunk) **Preliminary Purchase Price Allocation for Billie Acquisition (in millions):** | Asset/Liability | Amount | | :----------------------------------------- | :----- | | Goodwill | $181.2 | | Intangible assets | $136.0 | | Current assets | $17.0 | | Other assets, including property, plant and equipment, net | $3.2 | | Current liabilities | $(6.9) | | Deferred tax liabilities | $(21.1)| | **Total** | **$309.4** | - Billie contributed **$67.6 million in Net sales** and a **$4.8 million Loss before income taxes** for the post-acquisition period ending June 30, 2022[28](index=28&type=chunk) [Note 3 - Restructuring Charges](index=10&type=section&id=Note%203%20-%20Restructuring%20Charges) The Company is undertaking an 'Operating Model Redesign' in fiscal 2022, expecting approximately $15 million in one-time restructuring charges. For the nine months ended June 30, 2022, $9.8 million in charges were incurred, primarily for severance and consulting. The 'Project Fuel' initiative was completed on September 30, 2021 - The Company expects to incur approximately **$15 million in one-time restructuring charges** in fiscal 2022 for its 'Operating Model Redesign'[31](index=31&type=chunk) **Restructuring Charges (in millions):** | Category | Three Months Ended June 30, 2022 | Nine Months Ended June 30, 2022 | | :------------------------------------------------------ | :------------------------------- | :------------------------------ | | Severance and related benefit costs | $1.0 | $4.0 | | Asset write-off and accelerated depreciation | $0.3 | $0.4 | | Consulting, project implementation and management, and other exit costs | $2.6 | $5.4 | | **Total restructuring** | **$3.9** | **$9.8** | - Project Fuel, an enterprise-wide transformational initiative, was completed on **September 30, 2021**[32](index=32&type=chunk) [Note 4 - Income Taxes](index=11&type=section&id=Note%204%20-%20Income%20Taxes) The effective tax rate for the three and nine months ended June 30, 2022, was 16.1% and 18.5% respectively, a decrease from the prior year, primarily due to a favorable mix of earnings in low tax jurisdictions and changes in prior estimates **Effective Tax Rates:** | Period | June 30, 2022 | June 30, 2021 | | :-------------------------- | :------------ | :------------ | | Three Months Ended | 16.1% | 24.2% | | Nine Months Ended | 18.5% | 26.1% | - The lower effective tax rates in 2022 are primarily due to a favorable mix of earnings in low tax jurisdictions and the favorable impact of a change in the Company's prior estimates[35](index=35&type=chunk) [Note 5 - Earnings per Share](index=11&type=section&id=Note%205%20-%20Earnings%20per%20Share) This note reconciles the weighted-average shares used for basic and diluted earnings per share calculations, noting the exclusion of anti-dilutive securities **Weighted-Average Shares Outstanding (in millions):** | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Basic weighted-average shares outstanding | 52.5 | 54.4 | 53.5 | 54.4 | | Diluted weighted-average shares outstanding | 53.1 | 55.4 | 54.1 | 55.1 | - The calculation of diluted weighted-average shares outstanding excludes certain share options and RSE/PRSE awards that were anti-dilutive[36](index=36&type=chunk) [Note 6 - Goodwill and Intangible Assets](index=12&type=section&id=Note%206%20-%20Goodwill%20and%20Intangible%20Assets) Goodwill increased to $1,332.3 million as of June 30, 2022, primarily due to the Billie acquisition, which added $181.2 million. Amortizable intangible assets also increased, with estimated amortization expense for future years provided **Goodwill by Segment (in millions):** | Segment | Net Balance at October 1, 2021 | Billie Acquisition | Cumulative Translation Adjustment | Net Balance at June 30, 2022 | | :---------------- | :----------------------------- | :----------------- | :-------------------------------- | :--------------------------- | | Wet Shave | $598.5 | $181.2 | $(9.3) | $770.4 | | Sun and Skin Care | $355.6 | — | $(1.8) | $353.8 | | Feminine Care | $208.7 | — | $(0.6) | $208.1 | | **Total** | **$1,162.8** | **$181.2** | **$(11.7)** | **$1,332.3** | **Intangible Assets (Net, in millions):** | Class | June 30, 2022 | September 30, 2021 | | :-------------------------- | :------------ | :----------------- | | Indefinite lived (Trade names and brands) | $592.3 | $600.8 | | Amortizable (Total) | $418.4 | $305.6 | - Amortization expense was **$21.8 million** for the nine months ended June 30, 2022, up from **$16.6 million** in the prior year period[38](index=38&type=chunk) [Note 7 - Supplemental Balance Sheet Information](index=13&type=section&id=Note%207%20-%20Supplemental%20Balance%20Sheet%20Information) This note provides detailed breakdowns of inventories, other current assets, property, plant and equipment (net), other current liabilities, and other liabilities as of June 30, 2022, and September 30, 2021 **Inventories (in millions):** | Category | June 30, 2022 | September 30, 2021 | | :----------------------- | :------------ | :----------------- | | Raw materials and supplies | $68.3 | $61.3 | | Work in process | $93.9 | $83.4 | | Finished products | $251.9 | $201.0 | | **Total inventories** | **$414.1** | **$345.7** | **Other Current Liabilities (in millions):** | Category | June 30, 2022 | September 30, 2021 | | :------------------------------------------------------ | :------------ | :----------------- | | Accrued advertising, sales promotion and allowances | $47.9 | $33.8 | | Accrued trade allowances | $32.4 | $34.0 | | Accrued salaries, vacations and incentive compensation | $46.7 | $66.4 | | **Total other current liabilities** | **$317.0** | **$300.8** | **Property, Plant and Equipment, net (in millions):** | Category | June 30, 2022 | September 30, 2021 | | :-------------------------------- | :------------ | :----------------- | | Total gross property, plant and equipment | $1,315.1 | $1,313.7 | | Accumulated depreciation and amortization | $(967.3) | $(951.1) | | **Total property, plant and equipment, net** | **$347.8** | **$362.6** | [Note 8 - Leases](index=14&type=section&id=Note%208%20-%20Leases) The Company accounts for all recorded leases as operating leases, recognizing lease expense on a straight-line basis. Right-of-use assets and total lease liabilities decreased slightly from September 2021 to June 2022, with a weighted-average remaining lease term of 10 years **Lease Information (in millions):** | Metric | June 30, 2022 | September 30, 2021 | | :-------------------------- | :------------ | :----------------- | | Right of use assets | $51.0 | $57.7 | | Total lease liabilities | $51.3 | $57.9 | | Weighted-average remaining lease term (years) | 10 | 10 | | Weighted-average incremental borrowing rate | 6.5% | 6.3% | - Lease expense for the nine months ended June 30, 2022, was **$10.5 million**, compared to **$11.0 million** in the prior year[43](index=43&type=chunk) [Note 9 - Accounts Receivable Facility](index=15&type=section&id=Note%209%20-%20Accounts%20Receivable%20Facility) The Company's uncommitted master accounts receivable purchase agreement was amended on February 7, 2022, increasing the maximum receivables sold amount to $180.0 million from $150.0 million and changing the pricing index. Trade receivables sold for the nine months ended June 30, 2022, were $791.2 million, resulting in a loss on sale of $1.1 million - The maximum receivables sold amount under the Accounts Receivable Facility was increased to **$180.0 million** from **$150.0 million** on **February 7, 2022**[45](index=45&type=chunk) **Accounts Receivables Sold (in millions):** | Period | 2022 | 2021 | | :-------------------------------- | :--- | :--- | | Three Months Ended June 30 | $354.0 | $293.9 | | Nine Months Ended June 30 | $791.2 | $634.2 | | Trade receivables sold outstanding as of June 30 | $156.0 | $91.1 | - The loss on sale of trade receivables was **$1.1 million** for the nine months ended June 30, 2022, compared to **$0.6 million** in the prior year period[45](index=45&type=chunk) [Note 10 - Debt](index=15&type=section&id=Note%2010%20-%20Debt) Total long-term debt increased to $1,356.9 million as of June 30, 2022, from $1,234.2 million at September 30, 2021, primarily due to outstanding borrowings under the U.S. revolving credit facility **Long-Term Debt (in millions):** | Category | June 30, 2022 | September 30, 2021 | | :--------------------------------------- | :------------ | :----------------- | | Senior notes, fixed interest rate of 5.500%, due 2028 | $750.0 | $750.0 | | Senior notes, fixed interest rate of 4.125%, due 2029 | $500.0 | $500.0 | | U.S. revolving credit facility | $121.0 | — | | **Total long-term debt** | **$1,356.9** | **$1,234.2** | - The U.S. revolving credit facility matures in **2025**[46](index=46&type=chunk) [Note 11 - Retirement Plans](index=16&type=section&id=Note%2011%20-%20Retirement%20Plans) This note details the net periodic pension and postretirement (income) costs for the Company's defined benefit plans, showing a net periodic income of $(0.6) million for the nine months ended June 30, 2022, compared to a cost of $0.8 million in the prior year **Net Periodic Pension and Postretirement (Income) Costs (in millions):** | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Service cost | $0.9 | $1.1 | $2.9 | $3.3 | | Interest cost | $2.6 | $2.5 | $7.8 | $7.4 | | Expected return on plan assets | $(5.3) | $(5.6) | $(15.9) | $(16.8) | | Recognized net actuarial loss | $1.5 | $2.3 | $4.6 | $6.9 | | **Net periodic (income) cost** | **$(0.3)** | **$0.3** | **$(0.6)** | **$0.8** | [Note 12 - Shareholders' Equity](index=16&type=section&id=Note%2012%20-%20Shareholders%27%20Equity) The Company repurchased 2.9 million shares of common stock for $110.1 million during the nine months ended June 30, 2022, with 6.9 million shares remaining under authorization. Quarterly cash dividends of $0.15 per common share were declared for the first two fiscal quarters of 2022, totaling $24.7 million in payments - The Company repurchased **2.9 million shares** of its common stock for **$110.1 million** during the nine months ended June 30, 2022[49](index=49&type=chunk) - As of June 30, 2022, **6.9 million shares** of common stock remain available for repurchase under the Board's authorization[49](index=49&type=chunk) - Quarterly cash dividends of **$0.15 per common share** were declared for the first and second fiscal quarters of 2022, with total payments of **$24.7 million** for the nine months ended June 30, 2022[50](index=50&type=chunk) [Note 13 - Accumulated Other Comprehensive Loss](index=17&type=section&id=Note%2013%20-%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated Other Comprehensive Loss (AOCI) increased to $(181.9) million as of June 30, 2022, from $(136.9) million at October 1, 2021, primarily driven by foreign currency translation adjustments **Changes in Accumulated Other Comprehensive Loss (AOCI) (in millions):** | Component | Balance at October 1, 2021 | OCI before Reclassifications (9 months) | Reclassifications to Earnings (9 months) | Balance at June 30, 2022 | | :-------------------------------- | :------------------------- | :-------------------------------------- | :--------------------------------------- | :----------------------- | | Foreign Currency Translation Adjustments | $(41.8) | $(50.3) | — | $(92.1) | | Pension and Post-retirement Activity | $(97.3) | $(2.6) | $3.4 | $(96.5) | | Hedging Activity | $2.2 | $8.7 | $(4.2) | $6.7 | | **Total** | **$(136.9)** | **$(44.2)** | **$(0.8)** | **$(181.9)** | [Note 14 - Financial Instruments and Risk Management](index=17&type=section&id=Note%2014%20-%20Financial%20Instruments%20and%20Risk%20Management) The Company uses derivative instruments, including cash flow hedges and non-designated hedges, to manage exposure to foreign currency risk, primarily for the euro, Japanese yen, British pound, Canadian dollar, and Australian dollar. Unrealized pre-tax gains on cash flow hedges were $9.8 million as of June 30, 2022 - The Company utilizes contractual arrangements (derivatives) to reduce its exposure to foreign currency risk, with primary exposures to the **euro, Japanese yen, British pound, Canadian dollar, and Australian dollar**[54](index=54&type=chunk)[55](index=55&type=chunk) **Fair Values of Derivative Instruments (in millions):** | Category | June 30, 2022 | September 30, 2021 | | :--------------------------------------- | :------------ | :----------------- | | Derivatives designated as cash flow hedging relationships (Foreign currency contracts) | $9.8 | $3.3 | | Derivatives not designated as cash flow hedging relationships (Foreign currency contracts) | $2.0 | $0.5 | - The fair market value of fixed rate long-term debt was **$1,024.1 million** at June 30, 2022, compared to its carrying value of **$1,250.0 million**[60](index=60&type=chunk) [Note 15 - Segment Data](index=20&type=section&id=Note%2015%20-%20Segment%20Data) This note provides detailed financial performance by segment (Wet Shave, Sun and Skin Care, Feminine Care) and geographic area. Total net sales increased by 8.7% in Q3 and 5.9% for the nine months ended June 30, 2022, driven by the Billie acquisition and organic growth, though segment profits varied due to inflationary pressures **Total Net Sales (in millions):** | Period | 2022 | 2021 | | :----- | :--- | :--- | | Q3 | $623.8 | $573.7 | | 9 Months | $1,634.8 | $1,544.1 | **Segment Net Sales (in millions, Nine Months Ended June 30):** | Segment | 2022 | 2021 | | :---------------- | :--- | :--- | | Wet Shave | $917.4 | $876.7 | | Sun and Skin Care | $504.3 | $457.7 | | Feminine Care | $213.1 | $209.7 | **Segment Profit (in millions, Nine Months Ended June 30):** | Segment | 2022 | 2021 | | :---------------- | :--- | :--- | | Wet Shave | $116.6 | $141.6 | | Sun and Skin Care | $92.6 | $86.4 | | Feminine Care | $19.1 | $28.1 | [Note 16 - Commitments and Contingencies](index=21&type=section&id=Note%2016%20-%20Commitments%20and%20Contingencies) The Company recorded a $7.5 million gain from a legal settlement related to intellectual property claims and a $22.5 million charge for SKU rationalization, specifically for the write-off of certain Wet Ones SKUs inventory and related contract termination charges - The Company settled certain legal matters, primarily related to intellectual property claims, resulting in a **$7.5 million gain** included in SG&A[65](index=65&type=chunk) - A charge of **$22.5 million** was recorded for the write-off of inventory for certain Wet Ones SKUs and related contract termination charges[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the Company's financial condition and operating results, including an executive summary, detailed analysis of net sales, gross profit, expenses, and segment performance, as well as discussions on liquidity, capital resources, and critical accounting policies. It highlights the impact of the Billie acquisition, inflationary pressures, and strategic initiatives [Forward-Looking Statements](index=22&type=section&id=Forward-Looking%20Statements) - This document contains forward-looking statements reflecting expectations, estimates, or projections concerning future results or events, including the integration of the Billie acquisition and expected benefits[69](index=69&type=chunk) - These statements are not guarantees of performance and are subject to known and unknown risks, uncertainties, and assumptions[69](index=69&type=chunk) [Non-GAAP Financial Measures](index=22&type=section&id=Non-GAAP%20Financial%20Measures) - The Company uses non-GAAP measures (e.g., 'adjusted' or 'organic') to supplement GAAP results, excluding items like restructuring costs, acquisition and integration costs, and other non-standard items[70](index=70&type=chunk) - Organic net sales and segment profit exclude the impact of changes in foreign currency and the Billie acquisition to provide more meaningful period-to-period comparisons[70](index=70&type=chunk) [Industry and Market Data](index=23&type=section&id=Industry%20and%20Market%20Data) - Information concerning the industry, market position, market share, and industry market size are estimates based on internal and external data, subject to inherent imprecision and change[73](index=73&type=chunk) [Trademarks and Trade Names](index=23&type=section&id=Trademarks%20and%20Trade%20Names) - The Company owns or has rights to use trademarks and trade names in conjunction with its business operations[74](index=74&type=chunk) [Impact of the COVID-19 Pandemic](index=23&type=section&id=Impact%20of%20the%20COVID-19%20Pandemic) - The Company has implemented significant health and safety measures to protect employees and has not experienced a material operational disruption[75](index=75&type=chunk) - The prolonged COVID-19 pandemic has resulted in increased supply chain challenges across labor management, product procurement, and distribution[75](index=75&type=chunk) - To date, the COVID-19 pandemic has not had a significant impact on the Company's liquidity, cash flows, or capital resources[75](index=75&type=chunk) [Significant Events - Acquisitions](index=23&type=section&id=Significant%20Events%20-%20Acquisitions) - The acquisition of Billie, a leading U.S. based consumer brand company for women's personal care products, was completed on **November 29, 2021**, for **$309.4 million**, net of cash acquired[76](index=76&type=chunk) [Executive Summary](index=24&type=section&id=Executive%20Summary) - Net sales in Q3 fiscal 2022 increased **8.7% to $623.8 million**, with organic net sales up **9.0%** due to growth across all segments[80](index=80&type=chunk) - Net earnings in Q3 fiscal 2022 were **$30.5 million** (down from **$40.8 million** YoY), and adjusted net earnings were **$45.8 million** (down from **$49.2 million** YoY), primarily due to lower gross margins from inflationary pressures[80](index=80&type=chunk) - For the first nine months of fiscal 2022, net sales increased **5.9% to $1,634.8 million**, with organic net sales up **4.8%**. Adjusted net earnings were **$96.0 million** (down from **$111.0 million** YoY) due to higher cost of goods sold, increased A&P, and higher SG&A[83](index=83&type=chunk)[85](index=85&type=chunk) [Operating Results](index=25&type=section&id=Operating%20Results) [Net Sales](index=26&type=section&id=Net%20Sales) Net sales for the third quarter of fiscal 2022 increased 8.7% to $623.8 million, with organic net sales up 9.0%. For the first nine months, net sales increased 5.9% to $1,634.8 million, with organic net sales up 4.8%. Growth was driven by the Billie acquisition and increased volumes/pricing, partially offset by unfavorable currency impacts **Net Sales Changes (in millions):** | Component | Q3 FY22 Impact | Q3 FY22 % Chg | 9 Months FY22 Impact | 9 Months FY22 % Chg | | :------------------------ | :------------- | :------------ | :------------------- | :------------------ | | Organic | $51.4 | 9.0% | $73.8 | 4.8% | | Impact of Billie acquisition, net | $21.1 | 3.7% | $55.3 | 3.6% | | Impact of currency | $(22.4) | (4.0)% | $(38.4) | (2.5)% | | **Total Net Sales Change**| **$50.1** | **8.7%** | **$90.7** | **5.9%** | [Gross Profit](index=26&type=section&id=Gross%20Profit) Gross profit declined in Q3 and the first nine months of fiscal 2022. Adjusted gross margin percentage decreased by 500 basis points in Q3 and 380 basis points for the nine months, primarily due to higher commodity and transportation costs, negative mix, and higher trade spend, partially offset by pricing benefits. A $22.5 million charge for Wet Ones SKU rationalization also impacted gross profit - Gross profit was **$240.6 million** in Q3 fiscal 2022, down from **$270.3 million** in the prior year quarter[92](index=92&type=chunk) - Adjusted gross margin percentage declined by **500 basis points** in Q3 fiscal 2022 (to **42.2%**) and **380 basis points** for the first nine months (to **42.0%**) compared to the prior year periods[92](index=92&type=chunk) - The decline in gross margin was primarily due to a **440-basis point net impact** from higher commodity and transportation-related costs, negative mix, higher trade spend, and unfavorable currency, partially offset by pricing benefits[92](index=92&type=chunk) [Selling, General and Administrative Expense](index=26&type=section&id=Selling%2C%20General%20and%20Administrative%20Expense) SG&A as a percentage of net sales decreased in both Q3 and the first nine months of fiscal 2022, benefiting from increased net sales and operational efficiency programs. This was partially offset by the impact of the Billie acquisition (including amortization) and higher overall compensation expense. A $7.5 million gain from a legal settlement was included in SG&A - SG&A was **$92.7 million** in Q3 fiscal 2022, or **14.9% of net sales**, down from **17.0%** in the prior year quarter[93](index=93&type=chunk) - Adjusted SG&A as a percent of net sales declined by **40 basis points** in Q3 (to **15.9%**) and **20 basis points** for the first nine months (to **17.6%**)[93](index=93&type=chunk) - The decline was driven by leverage from increased net sales and operational efficiency programs, partially offset by Billie acquisition costs and higher compensation[93](index=93&type=chunk) [Advertising and Sales Promotion Expense](index=26&type=section&id=Advertising%20and%20Sales%20Promotion%20Expense) A&P expense slightly decreased in Q3 but increased for the first nine months of fiscal 2022. As a percentage of net sales, it decreased in both periods, reflecting lower international spend and currency impact, partially offset by increased support for Billie, Feminine Care, and Sun Care - A&P expense was **$80.9 million** in Q3 fiscal 2022, down **$1.0 million** from the prior year quarter[94](index=94&type=chunk) - A&P as a percent of net sales was **13.0%** in Q3 fiscal 2022 (down from **14.3%**) and **12.1%** for the first nine months (down from **12.4%**)[94](index=94&type=chunk) - Increased spending in support of Billie, Feminine Care, and sun season execution was more than offset by lower spend in International markets and currency translation impact[94](index=94&type=chunk) [Research and Development Expense](index=27&type=section&id=Research%20and%20Development%20Expense) R&D expense decreased in both Q3 and the first nine months of fiscal 2022, primarily due to lower program spending - R&D expense for Q3 fiscal 2022 was **$13.6 million**, down from **$14.6 million** in the prior year quarter[96](index=96&type=chunk) - For the first nine months of fiscal 2022, R&D was **$40.1 million**, down from **$42.6 million** in the prior year period, driven primarily by lower program spend[96](index=96&type=chunk) [Interest Expense Associated with Debt](index=27&type=section&id=Interest%20Expense%20Associated%20with%20Debt) Interest expense increased in Q3 and the first nine months of fiscal 2022 due to a higher overall debt balance, primarily from financing the Billie acquisition - Interest expense associated with debt for Q3 fiscal 2022 was **$18.0 million**, up from **$16.4 million** in the prior year quarter[97](index=97&type=chunk) - For the first nine months of fiscal 2022, interest expense was **$53.3 million**, up from **$51.1 million** in the prior year period, due to a higher overall debt balance from financing the Billie acquisition[97](index=97&type=chunk) [Other (Income) Expense, net](index=27&type=section&id=Other%20%28Income%29%20Expense%2C%20net) Other (income) expense, net, shifted from an expense to income in Q3 and significantly increased income for the first nine months of fiscal 2022, driven by favorable foreign currency hedge settlements - Other (income) expense, net, was income of **$4.4 million** in Q3 fiscal 2022, compared to an expense of **$0.8 million** in the prior year quarter[98](index=98&type=chunk) - For the first nine months of fiscal 2022, it was income of **$9.5 million**, compared to income of **$0.2 million** in the prior year period, driven by favorable foreign currency hedge settlements[98](index=98&type=chunk) [Income Tax Provision](index=27&type=section&id=Income%20Tax%20Provision) The effective tax rates for Q3 and the first nine months of fiscal 2022 were lower than the prior year, reflecting a favorable mix of earnings in low tax jurisdictions and changes in prior estimates **Effective Tax Rates:** | Period | June 30, 2022 | June 30, 2021 | | :-------------------------- | :------------ | :------------ | | Three Months Ended | 16.1% | 24.2% | | Nine Months Ended | 18.5% | 26.1% | - The fiscal 2022 effective tax rate and adjusted effective tax rate reflect a favorable mix of earnings in low tax jurisdictions and a favorable impact of a change in prior estimates[99](index=99&type=chunk) [Operating Model Redesign](index=27&type=section&id=Operating%20Model%20Redesign) The Company expects to incur approximately $15 million in one-time restructuring charges in fiscal 2022 for its operating model redesign, with $9.8 million incurred in the first nine months, primarily related to employee severance and benefit costs - The Company expects to incur approximately **$15 million in one-time restructuring charges** in fiscal 2022 to strengthen its operating model, simplify the organization, and improve efficiency[100](index=100&type=chunk) - Restructuring charges of **$3.9 million** and **$9.8 million** were incurred during Q3 and the first nine months of fiscal 2022, respectively, primarily for employee severance and benefit costs[100](index=100&type=chunk) [Segment Results](index=27&type=section&id=Segment%20Results) [Wet Shave](index=27&type=section&id=Wet%20Shave) Wet Shave net sales increased 7.0% in Q3 and 4.6% for the nine months ended June 30, 2022, driven by the Billie acquisition and organic growth in Men's and Women's Systems, Disposables, and Shave Preps. However, segment profit declined by 13.0% in Q3 and 17.7% for the nine months, primarily due to inflationary pressures **Wet Shave Net Sales (in millions):** | Period | 2022 | 2021 | Organic % Chg | Billie Acquisition % Chg | Currency % Chg | Total % Chg | | :----- | :--- | :--- | :------------ | :----------------------- | :------------- | :---------- | | Q3 | $326.3 | $304.9 | 6.3% | 6.9% | (6.2)% | 7.0% | | 9 Months | $917.4 | $876.7 | 2.2% | 6.3% | (3.9)% | 4.6% | **Wet Shave Segment Profit (in millions):** | Period | 2022 | 2021 | Organic % Chg | Billie Acquisition % Chg | Currency % Chg | Total % Chg | | :----- | :--- | :--- | :------------ | :----------------------- | :------------- | :---------- | | Q3 | $37.5 | $43.1 | 0.5% | (2.3)% | (11.2)% | (13.0)% | | 9 Months | $116.6 | $141.6 | (5.3)% | (6.1)% | (6.3)% | (17.7)% | - Organic segment profit for Wet Shave decreased primarily due to inflationary pressures, including higher commodity costs and warehousing and distribution costs, partially offset by favorable pricing and lower A&P expense[104](index=104&type=chunk) [Sun and Skin Care](index=28&type=section&id=Sun%20and%20Skin%20Care) Sun and Skin Care net sales increased 10.8% in Q3 and 10.2% for the nine months ended June 30, 2022, driven by strong organic growth in Sun Care (15% in Q3, 23% globally for 9 months) and Men's Grooming. Wet Ones organic sales returned to growth in Q3 but declined 23% for the nine months as demand normalized. Segment profit increased due to higher sales volumes **Sun and Skin Care Net Sales (in millions):** | Period | 2022 | 2021 | Organic % Chg | Currency % Chg | Total % Chg | | :----- | :--- | :--- | :------------ | :------------- | :---------- | | Q3 | $216.2 | $195.2 | 12.6% | (1.8)% | 10.8% | | 9 Months | $504.3 | $457.7 | 11.2% | (1.0)% | 10.2% | - Sun Care organic growth was approximately **15%** in Q3 and **23% globally** for the nine months, reflecting distribution gains and category recovery[105](index=105&type=chunk) - Wet Ones organic net sales returned to growth in Q3 (up **7.4%**) but declined **23%** for the nine months as demand fell to pre-COVID-19 pandemic levels[105](index=105&type=chunk) [Feminine Care](index=29&type=section&id=Feminine%20Care) Feminine Care net sales increased 10.5% in Q3 and 1.6% for the nine months ended June 30, 2022, reflecting higher category consumption and improved product availability. However, segment profit significantly declined by 35.8% in Q3 and 32.0% for the nine months, primarily due to inflationary cost pressures and higher A&P spend **Feminine Care Net Sales (in millions):** | Period | 2022 | 2021 | Organic % Chg | Total % Chg | | :----- | :--- | :--- | :------------ | :---------- | | Q3 | $81.3 | $73.6 | 10.5% | 10.5% | | 9 Months | $213.1 | $209.7 | 1.6% | 1.6% | **Feminine Care Segment Profit (in millions):** | Period | 2022 | 2021 | Organic % Chg | Total % Chg | | :----- | :--- | :--- | :------------ | :---------- | | Q3 | $8.8 | $13.7 | (35.1)% | (35.8)% |\ | 9 Months | $19.1 | $28.1 | (32.0)% | (32.0)% | [Corporate Expenses](index=29&type=section&id=Corporate%20Expenses) Corporate expenses decreased in Q3 fiscal 2022 due to lower discretionary spending but increased for the first nine months due to higher salary and benefit costs **Corporate Expenses (in millions):** | Period | 2022 | 2021 | | :-------------------------- | :--- | :--- | | Quarter Ended June 30 | $14.8 | $15.7 | | Nine Months Ended June 30 | $42.8 | $41.2 | - The decline in Q3 corporate expense was primarily due to lower discretionary spending, while the nine-month increase was due to higher salary and benefit costs[109](index=109&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Total borrowings increased to $1,389.9 million at June 30, 2022. The Company had $297.5 million available under its Revolving Credit Facility and increased its Accounts Receivable Facility to $180.0 million. Management expects adequate liquidity for the next 12 months from cash on hand, operating cash flows, and borrowing capacity, despite ongoing COVID-19 related market volatility - Total borrowings were **$1,389.9 million** at June 30, 2022, up from **$1,276.5 million** at September 30, 2021[111](index=111&type=chunk) - As of June 30, 2022, **$297.5 million** was available under the Revolving Credit Facility, and the maximum receivables sold amount under the Accounts Receivable Facility was increased to **$180.0 million**[111](index=111&type=chunk) - The Company expects its cash on hand, cash flows from operations, and borrowing capacity to be sufficient to satisfy liquidity needs for at least the next 12 months, despite COVID-19 related market volatility[111](index=111&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) [Operating Activities](index=31&type=section&id=Operating%20Activities) Cash flow from operating activities decreased to $72.4 million during the first nine months of fiscal 2022, down from $155.9 million in the prior year period, primarily due to a larger net working capital build - Cash flow from operating activities was **$72.4 million** during the first nine months of fiscal 2022, a decrease from **$155.9 million** in the prior year period[114](index=114&type=chunk) - The decrease in cash flows from operating activities was driven by a larger net working capital build[114](index=114&type=chunk) [Investing Activities](index=31&type=section&id=Investing%20Activities) Cash flow used by investing activities increased substantially to $337.6 million during the first nine months of fiscal 2022, compared to $26.1 million used in the prior year, mainly due to the $309.4 million acquisition of Billie - Cash flow used by investing activities was **$337.6 million** during the first nine months of fiscal 2022, compared to **$26.1 million** used in the prior year period[115](index=115&type=chunk) - The significant increase in cash used was primarily due to the acquisition of Billie for **$309.4 million**, net of cash acquired[115](index=115&type=chunk) [Financing Activities](index=31&type=section&id=Financing%20Activities) Net cash used by financing activities decreased to $21.4 million during the first nine months of fiscal 2022, compared to $59.9 million in the prior year. Key activities included net borrowings of $121.0 million under the Revolving Credit Facility for the Billie acquisition, $110.1 million in share repurchases, and $24.7 million in dividend payments - Net cash used by financing activities was **$21.4 million** during the first nine months of fiscal 2022, compared to **$59.9 million** in the prior year period[116](index=116&type=chunk) - The Company had net borrowings of **$121.0 million** under its Revolving Credit Facility, primarily to fund the Billie acquisition[116](index=116&type=chunk) - Share repurchases totaled **$110.1 million**, and dividend payments totaled **$24.7 million** during the first nine months of fiscal 2022[116](index=116&type=chunk) [Share Repurchases](index=31&type=section&id=Share%20Repurchases) During the first nine months of fiscal 2022, the Company repurchased 2.9 million shares of its common stock for $110.1 million, with 6.9 million shares remaining under the repurchase plan - The Company repurchased **2.9 million shares** of common stock for **$110.1 million** during the first nine months of fiscal 2022[117](index=117&type=chunk) - As of June 30, 2022, **6.9 million shares** remain available for repurchase under the Board's authorization[117](index=117&type=chunk) [Dividends](index=31&type=section&id=Dividends) The Board declared quarterly cash dividends of $0.15 per common share for the first three fiscal quarters of 2022, with total dividend payments of $24.7 million for the nine months ended June 30, 2022 - The Board declared a quarterly cash dividend of **$0.15 per common share** for the first, second, and third fiscal quarters of 2022[118](index=118&type=chunk) - Dividend payments totaled **$24.7 million** during the nine months ended June 30, 2022[118](index=118&type=chunk) [Commitments and Contingencies - Contractual Obligations](index=32&type=section&id=Commitments%20and%20Contingencies%20-%20Contractual%20Obligations) The Company's future minimum debt repayments include $121.0 million in fiscal 2025, $750.0 million in fiscal 2028, and $500.0 million in fiscal 2029. There have been no other material changes to contractual obligations since the 2021 Annual Report **Future Minimum Debt Repayments (in millions):** | Fiscal Year | Amount | | :---------- | :----- | | 2025 | $121.0 | | 2028 | $750.0 | | 2029 | $500.0 | - There have been no other material changes in contractual obligations since the presentation in the 2021 Annual Report[120](index=120&type=chunk) [Critical Accounting Policies](index=32&type=section&id=Critical%20Accounting%20Policies) The Company refers to its 2021 Annual Report on Form 10-K for a full description of its critical accounting policies and estimates, noting that there have been no significant changes since September 30, 2021 - Critical accounting policies and estimates are fully described in the Company's Annual Report on Form 10-K for the year ended September 30, 2021[121](index=121&type=chunk) - There have been no significant changes to critical accounting policies and estimates since September 30, 2021[121](index=121&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The Company is exposed to market risks from currency rates, commodity prices, and interest rates, which it mitigates using derivative instruments. As of June 30, 2022, variable-rate debt totaled $139.9 million, and a one-percent increase in applicable interest rates would increase annual interest expense by approximately $1.4 million - The Company's market risk exposure relates to potential losses from adverse changes in currency rates, commodity prices, and interest rates[123](index=123&type=chunk) - The Company uses contractual arrangements (derivatives) to reduce these exposures, particularly for foreign currency[123](index=123&type=chunk) - As of June 30, 2022, outstanding variable-rate debt was **$139.9 million**, and a **one-percent increase** in interest rates would increase annual interest expense by approximately **$1.4 million**[123](index=123&type=chunk) [Item 4. Controls and Procedures.](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures.) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter ended June 30, 2022 [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of **June 30, 2022**[125](index=125&type=chunk) [Changes in Internal Control over Financial Reporting](index=34&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no changes in the Company's internal control over financial reporting during the quarter ended **June 30, 2022**, that have materially affected, or are likely to materially affect, internal control over financial reporting[126](index=126&type=chunk) PART II. OTHER INFORMATION [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section details the Company's common stock repurchases during the third quarter of fiscal 2022, totaling 992,452 shares at an average price of $35.60 per share, with 6,867,613 shares remaining available under publicly announced plans **Common Stock Repurchases (Q3 Fiscal 2022):** | Period | Total Number of Shares Purchased | Average Price Paid per Share ($) | | :----------------- | :------------------------------- | :------------------------------- | | April 1 to 30, 2022| 145,706 | 36.99 | | May 1 to 31, 2022 | 487,405 | 35.69 | | June 1 to 30, 2022 | 359,341 | 35.07 | - As of **June 30, 2022**, **6,867,613 shares** may yet be purchased under the publicly announced plans or programs[129](index=129&type=chunk) [Item 6. Exhibits.](index=35&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, credit agreements, indentures, and certifications from the Chief Executive Officer and Chief Financial Officer - Exhibits include Amended and Restated Articles of Incorporation, Bylaws, Credit Agreement, Indentures, and certifications from the CEO and CFO[129](index=129&type=chunk) SIGNATURE - The report was signed by Daniel J. Sullivan, Chief Financial Officer of Edgewell Personal Care Company, on **August 4, 2022**[133](index=133&type=chunk)

Edgewell Personal Care Company (NYSE:EPC) Q2 2022 Results Conference Call May 10, 2022 8:00 AM ET Company Participants Rod Little - President, Chief Executive Officer & Director Chris Gough - Vice President, Investor Relations, Corporate Development & Treasury Daniel Sullivan - Chief Financial Officer Conference Call Participants Dara Mohsenian - Morgan Stanley Bill Chappell - Truist Securities Chris Carey - Wells Fargo Securities Kevin Grundy - Jefferies Olivia Tong - Raymond James Operator Good day, and w ...

____________________________________________________________________________________________________________ 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 March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period f ...

Edgewell Personal Care Company (NYSE:EPC) Q1 2022 Earnings Conference Call February 8, 2022 8:00 AM ET Company Participants Rod Little – President, Chief Executive Officer & Director Chris Gough – Vice President, Investor Relations, Corporate Development & Treasury Daniel Sullivan – Chief Financial Officer Conference Call Participants Christopher Carey – Wells Fargo Securities Nik Modi – RBC Capital Markets Jason English – Goldman Sachs Group Bill Chappell – Truist Securities Kevin Grundy – Jefferies Olivia ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Edgewell Personal Care Company's unaudited condensed consolidated financial statements and detailed notes for Q1 FY2022 and Q1 FY2021 [Item 1. Financial Statements.](index=3&type=section&id=Item%201.%20Financial%20Statements.) This section provides Edgewell's unaudited condensed consolidated financial statements, including earnings, balance sheets, cash flows, and equity changes, with explanatory notes [Condensed Consolidated Statements of Earnings and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Income) This statement details the company's financial performance, including net sales, gross profit, operating income, and net earnings for the three months ended December 31, 2021 and 2020 Condensed Consolidated Statements of Earnings and Comprehensive Income (Three Months Ended December 31) | Metric (in millions) | 2021 | 2020 | | :------------------- | :---- | :---- | | Net sales | $463.3 | $451.1 | | Gross profit | $189.9 | $193.3 | | Operating income | $31.8 | $41.6 | | Net earnings | $11.2 | $17.7 | | Basic net EPS | $0.21 | $0.33 | | Diluted net EPS | $0.20 | $0.32 | | Total comprehensive income | $4.7 | $47.6 | - Net sales increased by **2.7%** from **$451.1 million** in 2020 to **$463.3 million** in 2021[9](index=9&type=chunk) - Net earnings decreased significantly from **$17.7 million** in 2020 to **$11.2 million** in 2021, a **36.7%** decline[9](index=9&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's financial position, including assets, liabilities, and shareholders' equity, as of December 31, 2021, and September 30, 2021 Condensed Consolidated Balance Sheets (as of December 31, 2021 vs. September 30, 2021) | Metric (in millions) | Dec 31, 2021 | Sep 30, 2021 | | :------------------- | :----------- | :----------- | | Cash and cash equivalents | $239.8 | $479.2 | | Inventories | $407.5 | $345.7 | | Total current assets | $966.9 | $1,135.7 | | Goodwill | $1,342.7 | $1,162.8 | | Other intangible assets, net | $1,035.0 | $906.4 | | Total assets | $3,807.1 | $3,674.6 | | Total current liabilities | $483.9 | $536.8 | | Long-term debt | $1,432.7 | $1,234.2 | | Total liabilities | $2,254.8 | $2,090.3 | | Total shareholders' equity | $1,552.3 | $1,584.3 | - Cash and cash equivalents decreased by **49.9%** from **$479.2 million** to **$239.8 million** QoQ[12](index=12&type=chunk) - Goodwill increased by **$179.9 million**, and other intangible assets increased by **$128.6 million**, primarily due to the Billie acquisition[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended December 31, 2021 and 2020 Condensed Consolidated Statements of Cash Flows (Three Months Ended December 31) | Cash Flow Activity (in millions) | 2021 | 2020 | | :------------------------------- | :------ | :------ | | Net cash used by operating activities | $(79.0) | $(82.5) | | Net cash used by investing activities | $(312.7) | $(2.3) | | Net cash from (used by) financing activities | $155.5 | $(5.5) | | Net decrease in cash and cash equivalents | $(239.4) | $(83.9) | - Net cash used by investing activities significantly increased from **$(2.3) million** in 2020 to **$(312.7) million** in 2021, primarily due to the **$308.8 million** acquisition of Billie[15](index=15&type=chunk) - Net cash from financing activities turned positive at **$155.5 million** in 2021, compared to **$(5.5) million** used in 2020, driven by **$198.0 million** cash proceeds from debt[15](index=15&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This statement details changes in common shares, treasury shares, additional paid-in capital, retained earnings, and accumulated other comprehensive loss Changes in Shareholders' Equity (Three Months Ended December 31, 2021) | Item (in millions) | Balance at Sep 30, 2021 | Net Earnings | Foreign Currency Translation Adjustments | Deferred Gain on Hedging Activity | Dividends Declared | Repurchase of Shares | Activity under Share Plans | Balance at Dec 31, 2021 | | :----------------- | :---------------------- | :----------- | :--------------------------------------- | :-------------------------------- | :----------------- | :------------------- | :------------------------- | :---------------------- | | Common Shares Par Value | $0.7 | — | — | — | — | — | — | $0.7 | | Treasury Shares Amount | $(776.3) | — | — | — | — | $(24.5) | $33.6 | $(767.2) | | Additional Paid-In Capital | $1,631.1 | — | — | — | — | — | $(37.4) | $1,593.7 | | Retained Earnings | $865.7 | $11.2 | — | — | $(8.4) | — | — | $868.5 | | Accumulated Other Comprehensive Loss | $(136.9) | — | $(6.9) | $0.4 | — | — | — | $(143.4) | | Total Shareholders' Equity | $1,584.3 | $11.2 | $(6.9) | $0.4 | $(8.4) | $(24.5) | $(3.8) | $1,552.3 | - Total shareholders' equity decreased from **$1,584.3 million** to **$1,552.3 million** during the quarter, primarily due to share repurchases (**$24.5 million**) and foreign currency translation adjustments (**$(6.9) million**)[20](index=20&type=chunk) - The company repurchased **0.5 million** shares for **$24.5 million** during the quarter[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements.](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements.) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, acquisitions, and other financial items [Note 1 - Background and Basis of Presentation](index=7&type=section&id=Note%201%20-%20Background%20and%20Basis%20of%20Presentation) This note describes Edgewell Personal Care Company's business segments, the basis of financial statement presentation, and the impact of recent accounting standard updates - Edgewell operates in three segments: Wet Shave (Schick®, Wilkinson Sword®, Billie®), Sun and Skin Care (Banana Boat®, Hawaiian Tropic®, Jack Black®, Bulldog®, Cremo®, Wet Ones®), and Feminine Care (Playtex®, Stayfree®, Carefree®, o.b.®)[24](index=24&type=chunk) - The company completed the acquisition of Billie, Inc. on November 29, 2021, and its results are included from that date[25](index=25&type=chunk) - The company adopted ASU 2019-12 as of October 1, 2021, with no material effect on financial position, results of operations, or cash flows[26](index=26&type=chunk) [Note 2 - Business Combinations](index=8&type=section&id=Note%202%20-%20Business%20Combinations) This note details the acquisition of Billie, Inc., including the purchase price, preliminary allocation, and its contribution to net sales and earnings - Acquisition of Billie, Inc. completed on November 29, 2021, for **$308.8 million** cash, net of cash acquired[28](index=28&type=chunk) Preliminary Purchase Price Allocation for Billie Acquisition (in millions) | Item | Amount | | :----------------------------------------- | :----- | | Current assets | $16.9 | | Goodwill | $181.0 | | Intangible assets | $136.0 | | Other assets, including property, plant and equipment, net | $3.2 | | Current liabilities | $(6.8) | | Deferred tax liabilities | $(21.5) | | **Total** | **$308.8** | - Billie contributed **$8.9 million** in Net sales and a **$1.1 million** Loss before income taxes for the post-acquisition period ending December 31, 2021[28](index=28&type=chunk) Unaudited Pro Forma Consolidated Results (Three Months Ended December 31) | Metric (in millions) | 2021 | 2020 | | :------------------- | :----- | :----- | | Proforma net sales | $473.3 | $467.3 | | Proforma net earnings | $14.8 | $10.2 | [Note 3 - Restructuring Charges](index=9&type=section&id=Note%203%20-%20Restructuring%20Charges) This note outlines restructuring charges incurred for the Operating Model Redesign and the completion of the prior Project Fuel initiative - Expected one-time charges of approximately **$17 million** in fiscal 2022 for Operating Model Redesign[31](index=31&type=chunk) Restructuring Charges (Three Months Ended December 31) | Charge Type (in millions) | 2021 (Operating Model Redesign) | 2020 (Project Fuel) | | :------------------------ | :------------------------------ | :------------------ | | Severance and related benefit costs | $1.3 | $2.3 | | Consulting, project implementation and management, and other exit costs | $0.9 | $2.0 | | Asset impairment and accelerated depreciation | — | $0.1 | | **Total restructuring** | **$2.2** | **$4.4** | - Project Fuel, an enterprise-wide transformational initiative, was completed on September 30, 2021[31](index=31&type=chunk) [Note 4 - Income Taxes](index=10&type=section&id=Note%204%20-%20Income%20Taxes) This note explains the effective tax rates for the periods presented and the factors influencing their changes Effective Tax Rates (Three Months Ended December 31) | Metric | 2021 | 2020 | | :----- | :---- | :---- | | Earnings before income taxes (in millions) | $16.2 | $25.2 | | Income tax provision (in millions) | $5.0 | $7.5 | | Effective tax rate | 30.9% | 29.7% | - The increase in the effective tax rate in 2021 was primarily due to unfavorable earnings mix in higher tax jurisdictions, Section 162(m) adjustments, and non-deductible Billie acquisition expenses[34](index=34&type=chunk) [Note 5 - Earnings per Share](index=10&type=section&id=Note%205%20-%20Earnings%20per%20Share) This note details the calculation of basic and diluted earnings per share, including weighted-average shares outstanding and dilutive securities Weighted-Average Shares Outstanding (Three Months Ended December 31) | Metric (in millions) | 2021 | 2020 | | :------------------- | :--- | :--- | | Basic weighted-average shares outstanding | 54.4 | 54.4 | | Effect of dilutive securities (RSE and PRSE awards) | 0.6 | 0.4 | | Total dilutive securities | 0.6 | 0.4 | | Diluted weighted-average shares outstanding | 55.0 | 54.8 | - Anti-dilutive share options (**1.2 million**) and RSE/PRSE awards (**0.5 million**) were excluded from diluted EPS calculation in 2021[35](index=35&type=chunk) [Note 6 - Goodwill and Intangible Assets](index=11&type=section&id=Note%206%20-%20Goodwill%20and%20Intangible%20Assets) This note provides a breakdown of goodwill by segment and intangible assets by class, highlighting the impact of the Billie acquisition Goodwill by Segment (in millions) | Segment | Net Balance at Oct 1, 2021 | Billie Acquisition | Cumulative Translation Adjustment | Net Balance at Dec 31, 2021 | | :---------------- | :------------------------- | :----------------- | :------------------------------ | :-------------------------- | | Wet Shave | $598.5 | $181.0 | $(1.4) | $778.1 | | Sun and Skin Care | $355.6 | — | $0.1 | $355.7 | | Feminine Care | $208.7 | — | $0.2 | $208.9 | | **Total** | **$1,162.8** | **$181.0** | **$(1.1)** | **$1,342.7** | Intangible Assets by Class (in millions) | Class | Dec 31, 2021 Net | Sep 30, 2021 Net | | :------------------ | :--------------- | :--------------- | | Indefinite lived Trade names and brands | $599.4 | $600.8 | | Amortizable Trade names and brands | $278.8 | $198.5 | | Amortizable Technology and patents | $3.2 | $3.3 | | Amortizable Customer related and other | $153.6 | $103.8 | | **Total amortizable intangible assets** | **$435.6** | **$305.6** | - Amortization expense was **$6.1 million** for the three months ended December 31, 2021, up from **$5.5 million** in 2020[37](index=37&type=chunk) [Note 7 - Inventories, Other Current Assets, Property, Plant and Equipment, Other Current Liabilities, Other Liabilities](index=12&type=section&id=Note%207%20-%20Inventories,%20Other%20Current%20Assets,%20Property,%20Plant%20and%20Equipment,%20Other%20Current%20Liabilities,%20Other%20Liabilities) This note provides detailed breakdowns of inventories, other current assets, property, plant and equipment, and various current and other liabilities Inventories (in millions) | Category | Dec 31, 2021 | Sep 30, 2021 | | :------------------- | :----------- | :----------- | | Raw materials and supplies | $65.2 | $61.3 | | Work in process | $85.7 | $83.4 | | Finished products | $256.6 | $201.0 | | **Total inventories** | **$407.5** | **$345.7** | Other Current Liabilities (in millions) | Category | Dec 31, 2021 | Sep 30, 2021 | | :------------------- | :----------- | :----------- | | Accrued advertising, sales promotion and allowances | $36.4 | $33.8 | | Accrued trade allowances | $28.4 | $34.0 | | Accrued salaries, vacations and incentive compensation | $27.9 | $66.4 | | Returns reserve | $41.9 | $52.7 | | Restructuring reserve | $2.5 | $5.5 | | **Total other current liabilities** | **$238.7** | **$300.8** | - Finished products inventory increased by **$55.6 million** from September 30, 2021, to December 31, 2021[39](index=39&type=chunk) [Note 8 - Leases](index=13&type=section&id=Note%208%20-%20Leases) This note describes the company's lease arrangements, including right-of-use assets, lease liabilities, and future lease payment commitments Lease Information (in millions, except years and rates) | Metric | Dec 31, 2021 | Sep 30, 2021 | | :-------------------------------- | :----------- | :----------- | | Right of use assets | $56.0 | $57.7 | | Total lease liabilities | $56.5 | $57.9 | | Weighted-average remaining lease term (years) | 10 | 10 | | Weighted-average incremental borrowing rate | 6.4% | 6.3% | | Lease cost (three months ended Dec 31) | $3.5 (2021) | $3.9 (2020) | Future Lease Payments (as of December 31, 2021, in millions) | Fiscal Year | Amount | | :------------ | :----- | | Remainder of fiscal 2022 | $10.5 | | 2023 | $11.1 | | 2024 | $9.0 | | 2025 | $8.1 | | 2026 | $6.7 | | 2027 and thereafter | $37.1 | | **Total future minimum lease commitments** | **$82.5** | | Less: Imputed interest | $(26.0) | | **Present value of lease liabilities** | **$56.5** | [Note 9 - Accounts Receivable Facility](index=14&type=section&id=Note%209%20-%20Accounts%20Receivable%20Facility) This note details the company's accounts receivable purchase agreement, including recent amendments and amounts sold - Accounts Receivable Facility maximum receivables sold amount increased to **$180.0 million** from **$150.0 million**, effective February 7, 2022[45](index=45&type=chunk) - Pricing index for the Accounts Receivable Facility changed from LIBOR to the Bloomberg Short Term Bank Yield Index (BSBY)[45](index=45&type=chunk) - Accounts receivables sold were **$155.3 million** for the three months ended December 31, 2021, compared to **$138.4 million** in 2020[45](index=45&type=chunk) [Note 10 - Debt](index=14&type=section&id=Note%2010%20-%20Debt) This note outlines the company's long-term debt, including senior notes and revolving credit facility draws, and their impact on total debt Long-Term Debt (in millions) | Debt Type | Dec 31, 2021 | Sep 30, 2021 | | :-------------------------------- | :----------- | :----------- | | Senior notes, fixed interest rate of 5.500%, due 2028 | $750.0 | $750.0 | | Senior notes, fixed interest rate of 4.125%, due 2029 | $500.0 | $500.0 | | U.S. revolving credit facility due 2025 | $198.0 | — | | Total long-term debt, including current maturities | $1,448.0 | $1,250.0 | | Less unamortized debt issuance costs and discount | $15.3 | $15.8 | | **Total long-term debt** | **$1,432.7** | **$1,234.2** | - The company had outstanding variable-rate international borrowings (Notes payable) of **$27.4 million** as of December 31, 2021[46](index=46&type=chunk) [Note 11 - Retirement Plans](index=14&type=section&id=Note%2011%20-%20Retirement%20Plans) This note details the net periodic cost for the company's defined benefit pension plans for both U.S. and international employees Net Periodic Cost for Retirement Plans (Three Months Ended December 31) | Component (in millions) | 2021 | 2020 | | :---------------------- | :----- | :----- | | Service cost | $1.0 | $1.1 | | Interest cost | $2.6 | $2.5 | | Expected return on plan assets | $(5.3) | $(5.6) | | Recognized net actuarial loss | $1.5 | $2.3 | | **Net periodic cost** | **$(0.2)** | **$0.3** | [Note 12 - Shareholders' Equity](index=15&type=section&id=Note%2012%20-%20Shareholders'%20Equity) This note describes share repurchase activities and cash dividends declared during the reporting period - Repurchased **0.5 million** shares of common stock for **$24.5 million** during the three months ended December 31, 2021[50](index=50&type=chunk) - **9.2 million** shares of common stock remain available for repurchase under the Board's authorization[50](index=50&type=chunk) - Declared a cash dividend of **$0.15 per share** on November 4, 2021, totaling **$8.4 million**, paid on January 6, 2022[51](index=51&type=chunk) [Note 13 - Accumulated Other Comprehensive Loss](index=15&type=section&id=Note%2013%20-%20Accumulated%20Other%20Comprehensive%20Loss) This note explains the changes in accumulated other comprehensive loss, primarily due to foreign currency translation adjustments Changes in Accumulated Other Comprehensive Loss (AOCI) (in millions) | Component | Balance at Oct 1, 2021 | OCI before Reclassifications | Reclassifications to Earnings | Balance at Dec 31, 2021 | | :-------------------------------- | :--------------------- | :--------------------------- | :---------------------------- | :---------------------- | | Foreign Currency Translation Adjustments | $(41.8) | $(6.9) | — | $(48.7) | | Pension and Post-retirement Activity | $(97.3) | $(1.1) | $1.1 | $(97.3) | | Hedging Activity | $2.2 | $1.2 | $(0.8) | $2.6 | | **Total** | **$(136.9)** | **$(6.8)** | **$0.3** | **$(143.4)** | - Foreign currency translation adjustments contributed **$(6.9) million** to OCI before reclassifications for the three months ended December 31, 2021[52](index=52&type=chunk) [Note 14 - Financial Instruments and Risk Management](index=16&type=section&id=Note%2014%20-%20Financial%20Instruments%20and%20Risk%20Management) This note discusses the company's use of derivative instruments to manage foreign currency risk and its approach to counterparty risk - The company is exposed to foreign currency risk, primarily from the euro, Japanese yen, British pound, Canadian dollar, and Australian dollar[57](index=57&type=chunk) - At December 31, 2021, the company had an unrealized pre-tax gain of **$3.8 million** on forward currency contracts designated as cash flow hedges[58](index=58&type=chunk) Estimated Fair Values of Derivative Instruments (in millions) | Derivative Type | Dec 31, 2021 Fair Value of Asset (Liability) | Sep 30, 2021 Fair Value of Asset (Liability) | | :----------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Derivatives designated as cash flow hedging relationships: Foreign currency contracts | $3.8 | $3.3 | | Derivatives not designated as cash flow hedging relationships: Foreign currency contracts | $0.7 | $0.5 | [Note 15 - Segment Data](index=18&type=section&id=Note%2015%20-%20Segment%20Data) This note provides detailed financial performance data by business segment and geographic area, including net sales and segment profit Segment Net Sales and Profitability (Three Months Ended December 31) | Segment (in millions) | 2021 Net Sales | 2020 Net Sales | 2021 Segment Profit | 2020 Segment Profit | | :-------------------- | :------------- | :------------- | :------------------ | :------------------ | | Wet Shave | $286.1 | $279.1 | $51.5 | $52.6 | | Sun and Skin Care | $104.8 | $103.0 | $3.7 | $5.2 | | Feminine Care | $72.4 | $69.0 | $8.4 | $8.8 | | **Total net sales** | **$463.3** | **$451.1** | **$63.6** | **$66.6** | Net Sales by Geographic Area (Three Months Ended December 31) | Geographic Area (in millions) | 2021 | 2020 | | :---------------------------- | :---- | :---- | | United States | $262.5 | $250.8 | | International | $200.8 | $200.3 | | **Total net sales** | **$463.3** | **$451.1** | Net Sales by Product Category (Three Months Ended December 31) | Product Category (in millions) | 2021 | 2020 | | :----------------------------- | :---- | :---- | | Razors and blades | $255.7 | $246.3 | | Tampons, pads, and liners | $72.4 | $69.0 | | Sun care products | $40.2 | $28.8 | | Grooming products | $46.3 | $43.1 | | Wipes and other skin care | $18.3 | $31.1 | | Shaving gels and creams | $30.4 | $32.8 | | **Total net sales** | **$463.3** | **$451.1** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the company's financial condition and operating results, covering key metrics, the Billie acquisition, restructuring, COVID-19 impacts, and non-GAAP reconciliations [Forward-Looking Statements](index=21&type=section&id=Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ - The document contains forward-looking statements regarding future results, events, and the integration of the Billie acquisition, including growth opportunities and cost savings[73](index=73&type=chunk) - These statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially[73](index=73&type=chunk) [Non-GAAP Financial Measures](index=21&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and explains the company's use of non-GAAP financial measures, such as adjusted and organic metrics, for performance evaluation - Non-GAAP measures like 'adjusted' or 'organic' exclude items such as restructuring costs, acquisition and integration costs, and other non-standard items[74](index=74&type=chunk) - Organic net sales and segment profit exclude the impact of foreign currency changes and the Billie acquisition[74](index=74&type=chunk) - The Billie acquisition will unfavorably impact organic net sales and segment profit in fiscal 2022 due to reclassification of sales and timing of profit recognition[74](index=74&type=chunk) [Industry and Market Data](index=22&type=section&id=Industry%20and%20Market%20Data) This section clarifies that industry and market data presented are based on the company's estimates and are not independently verified - Information concerning the industry, market position, market share, and market size is based on the company's estimates using internal and external data, which are inherently imprecise and not independently verified[77](index=77&type=chunk) [Trademarks and Trade Names](index=22&type=section&id=Trademarks%20and%20Trade%20Names) This section confirms the company's ownership or rights to use various trademarks and trade names essential to its business operations - The company owns or has rights to use trademarks and trade names for its business operations[78](index=78&type=chunk) [Impact of COVID-19](index=22&type=section&id=Impact%20of%20COVID-19) This section assesses the impact of COVID-19 on the company's operations, supply chain, liquidity, and financial performance - The company has not experienced material operational disruptions in manufacturing or distribution facilities due to COVID-19[79](index=79&type=chunk) - COVID-19 has led to increased supply chain challenges in labor management, product procurement, and distribution, potentially increasing costs[79](index=79&type=chunk) - COVID-19 has not had a significant impact on the company's liquidity, cash flows, or capital resources to date[79](index=79&type=chunk) [Significant Events](index=22&type=section&id=Significant%20Events) This section highlights key events, including the acquisition of Billie, Inc., and its funding sources - On November 29, 2021, the company acquired Billie, a U.S.-based consumer brand company for women's personal care products, for **$308.8 million**, net of cash acquired[80](index=80&type=chunk) - The Billie acquisition was funded using a combination of cash on hand and drawing on the U.S. revolving credit facility[80](index=80&type=chunk) [Executive Summary](index=23&type=section&id=Executive%20Summary) This section provides a high-level overview of the company's key financial results, including net sales, earnings, and margins, for the reporting period Key Financial Results (Three Months Ended December 31, 2021 vs. 2020) | Metric | 2021 GAAP | 2020 GAAP | 2021 Adjusted | 2020 Adjusted | | :-------------------- | :-------- | :-------- | :------------ | :------------ | | Net sales (in millions) | $463.3 | $451.1 | N/A | N/A | | Net earnings (in millions) | $11.2 | $17.7 | $23.2 | $23.3 | | Diluted EPS | $0.20 | $0.32 | $0.42 | $0.43 | | Gross margin % | 41.0% | 42.9% | 41.8% | 43.2% | | Operating income % | 6.9% | 9.2% | 10.1% | 10.9% | | Effective tax rate | 30.9% | 29.7% | 25.3% | 28.4% | - Net sales increased **2.7%** to **$463.3 million**, with organic net sales up **2.5%** driven by higher volumes and pricing across all segments[84](index=84&type=chunk) - Adjusted net earnings were flat at **$23.2 million**, as higher net sales were offset by lower margins due to increased material, labor, warehousing costs, and higher advertising and promotional expense[84](index=84&type=chunk) [Operating Results](index=23&type=section&id=Operating%20Results) This section analyzes the company's operational performance, detailing changes in net sales, gross profit, and various expenses [Net Sales - Total Company](index=24&type=section&id=Net%20Sales%20-%20Total%20Company) This section analyzes the drivers of total company net sales, including organic growth, acquisition impact, and currency effects Net Sales - Total Company (Q1 Fiscal 2022 vs. Q1 Fiscal 2021) | Component | Amount (in millions) | % Change | | :------------------------ | :------------------- | :------- | | Net sales - fiscal 2021 | $451.1 | | | Organic | $11.3 | 2.5% | | Impact of Billie acquisition, net | $6.8 | 1.5% | | Impact of currency | $(5.9) | (1.3)% | | **Net sales - fiscal 2022** | **$463.3** | **2.7%** | - Wet Ones organic net sales declined **41%**, cycling over **110%** growth in the prior year quarter due to COVID-19[88](index=88&type=chunk) [Gross Profit](index=24&type=section&id=Gross%20Profit) This section examines changes in gross profit and adjusted gross margin, attributing shifts to cost of goods, pricing, and currency - Gross profit was **$189.9 million** in Q1 FY22, down from **$193.3 million** in Q1 FY21[89](index=89&type=chunk) - Adjusted gross margin percentage was **41.8%**, a **140-basis point** decline YoY[89](index=89&type=chunk) - The decline in adjusted gross margin was primarily due to a **220-basis point** net impact from higher cost of goods and a **50-basis point** impact from negative currency translation, partially offset by **130-basis points** of favorable pricing, promotional efficiency, and mix[89](index=89&type=chunk) [Selling, General and Administrative Expense](index=24&type=section&id=Selling,%20General%20and%20Administrative%20Expense) This section details the changes in selling, general and administrative expenses, both in absolute terms and as a percentage of net sales - SG&A was **$96.9 million** (**20.9%** of net sales) in Q1 FY22, up from **$93.1 million** (**20.6%** of net sales) in Q1 FY21[90](index=90&type=chunk) - Adjusted SG&A as a percent of net sales declined by **110 basis points** to **19.0%**[90](index=90&type=chunk) - The decline in adjusted SG&A percentage was due to lower incentive and fringe benefit costs, partially offset by higher compensation and Billie acquisition costs[90](index=90&type=chunk) [Advertising and Sales Promotion Expense](index=24&type=section&id=Advertising%20and%20Sales%20Promotion%20Expense) This section analyzes the increase in advertising and sales promotion expense and its impact on net sales percentage - A&P was **$46.2 million** in Q1 FY22, up **$5.0 million** from **$41.2 million** in Q1 FY21[91](index=91&type=chunk) - A&P as a percent of net sales increased to **10.0%** in Q1 FY22 from **9.1%** in Q1 FY21[91](index=91&type=chunk) - The increase in A&P was driven by higher investments in Sun and Skin Care and Wet Shave[91](index=91&type=chunk) [Research and Development Expense](index=24&type=section&id=Research%20and%20Development%20Expense) This section reports on the company's research and development expenditures and their proportion to net sales - R&D expense was **$12.8 million** in Q1 FY22, down from **$13.7 million** in Q1 FY21[92](index=92&type=chunk) - R&D as a percent of net sales decreased to **2.8%** in Q1 FY22 from **3.0%** in Q1 FY21[92](index=92&type=chunk) [Interest Expense Associated with Debt](index=24&type=section&id=Interest%20Expense%20Associated%20with%20Debt) This section details the interest expense related to the company's debt, explaining the factors influencing its change - Interest expense was **$17.3 million** in Q1 FY22, compared to **$17.4 million** in Q1 FY21[93](index=93&type=chunk) - The decline was due to a lower interest rate on the **4.125% $500 million** Senior Notes due 2029, partially offset by a higher overall debt balance from the Revolving Credit Facility draw[93](index=93&type=chunk) [Other Income, Net](index=25&type=section&id=Other%20Income,%20Net) This section explains the components contributing to other income, net, including pension activity and foreign exchange gains - Other income, net, was **$1.7 million** in Q1 FY22, compared to **$1.0 million** in Q1 FY21[95](index=95&type=chunk) - The increase was driven by favorable pension activity and foreign exchange gains[95](index=95&type=chunk) [Income Tax Provision](index=25&type=section&id=Income%20Tax%20Provision) This section discusses the effective tax rates, both GAAP and adjusted, and the factors influencing their changes Effective Tax Rates (Three Months Ended December 31) | Metric | 2021 GAAP | 2020 GAAP | 2021 Adjusted | 2020 Adjusted | | :------------------- | :-------- | :-------- | :------------ | :------------ | | Effective tax rate | 30.9% | 29.7% | 25.3% | 28.4% | - The fiscal 2022 effective tax rate and adjusted effective tax rate reflect an increase in Internal Revenue Service Code Section 162(m) permanent adjustments partially offset by favorable stock compensation vests[96](index=96&type=chunk) [Operating Model Redesign](index=25&type=section&id=Operating%20Model%20Redesign) This section outlines the expected charges and progress of the company's Operating Model Redesign initiative - Expected one-time charges of approximately **$17 million** in fiscal 2022 for Operating Model Redesign[97](index=97&type=chunk) - **$2.2 million** in charges, primarily for employee severance and benefit costs, were incurred in Q1 FY22[97](index=97&type=chunk) [Segment Results](index=25&type=section&id=Segment%20Results) This section provides a detailed analysis of financial performance for each of the company's operating segments [Wet Shave](index=26&type=section&id=Wet%20Shave) This section details the net sales and segment profit performance of the Wet Shave segment, including organic growth and acquisition impact Wet Shave Net Sales (Q1 Fiscal 2022 vs. Q1 Fiscal 2021) | Component | Amount (in millions) | % Change | | :------------------------ | :------------------- | :------- | | Net sales - fiscal 2021 | $279.1 | | | Organic | $6.0 | 2.1% | | Impact of Billie acquisition, net | $6.8 | 2.4% | | Impact of currency | $(5.8) | (2.0)% | | **Net sales - fiscal 2022** | **$286.1** | **2.5%** | Wet Shave Segment Profit (Q1 Fiscal 2022 vs. Q1 Fiscal 2021) | Component | Amount (in millions) | % Change | | :------------------------ | :------------------- | :------- | | Segment profit - fiscal 2021 | $52.6 | | | Organic | $3.2 | 6.1% | | Impact of Billie acquisition, net | $(2.4) | (4.6)% | | Impact of currency | $(1.9) | (3.6)% | | **Segment profit - fiscal 2022** | **$51.5** | **(2.1)%** | - Organic net sales growth was partly offset by declines in Men's Systems (North America) and Shave Preps due to supply chain issues[100](index=100&type=chunk) [Sun and Skin Care](index=26&type=section&id=Sun%20and%20Skin%20Care) This section analyzes the net sales and segment profit for the Sun and Skin Care segment, highlighting growth drivers and cost pressures Sun and Skin Care Net Sales (Q1 Fiscal 2022 vs. Q1 Fiscal 2021) | Component | Amount (in millions) | % Change | | :------------------------ | :------------------- | :------- | | Net sales - fiscal 2021 | $103.0 | | | Organic | $2.0 | 1.9% | | Impact of currency | $(0.2) | (0.2)% | | **Net sales - fiscal 2022** | **$104.8** | **1.7%** | Sun and Skin Care Segment Profit (Q1 Fiscal 2022 vs. Q1 Fiscal 2021) | Component | Amount (in millions) | % Change | | :------------------------ | :------------------- | :------- | | Segment profit - fiscal 2021 | $5.2 | | | Organic | $(1.3) | (25.0)% | | Impact of currency | $(0.2) | (3.8)% | | **Segment profit - fiscal 2022** | **$3.7** | **(28.8)%** | - Sun Care growth of over **40%** reflects market share gains and category recovery in both U.S. and international markets[101](index=101&type=chunk) [Feminine Care](index=27&type=section&id=Feminine%20Care) This section reports on the net sales and segment profit performance of the Feminine Care segment, driven by pricing and volumes Feminine Care Net Sales (Q1 Fiscal 2022 vs. Q1 Fiscal 2021) | Component | Amount (in millions) | % Change | | :------------------------ | :------------------- | :------- | | Net sales - fiscal 2021 | $69.0 | | | Organic | $3.3 | 4.8% | | Impact of currency | $0.1 | 0.1% | | **Net sales - fiscal 2022** | **$72.4** | **4.9%** | Feminine Care Segment Profit (Q1 Fiscal 2022 vs. Q1 Fiscal 2021) | Component | Amount (in millions) | % Change | | :------------------------ | :------------------- | :------- | | Segment profit - fiscal 2021 | $8.8 | | | Organic | $(0.5) | (5.6)% | | Impact of currency | $0.1 | 1.1% | | **Segment profit - fiscal 2022** | **$8.4** | **(4.5)%** | [General Corporate and Other Expenses](index=27&type=section&id=General%20Corporate%20and%20Other%20Expenses) This section details general corporate expenses and other non-operating costs, including restructuring and acquisition-related expenses General Corporate and Other Expenses (Q1 Fiscal 2022 vs. Q1 Fiscal 2021) | Expense Category (in millions) | 2021 | 2020 | | :----------------------------- | :---- | :---- | | Corporate expenses | $10.8 | $12.1 | | Restructuring and related costs | $2.2 | $4.4 | | Acquisition and integration costs | $6.0 | $3.0 | | Value-added tax settlement costs | $3.4 | — | | Sun Care reformulation costs | $3.3 | — | | **Total general corporate and other expenses** | **$25.7** | **$19.5** | | % of net sales | 5.5% | 4.3% | - The decline in corporate expense was primarily due to lower incentive and fringe benefit costs[104](index=104&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations, including debt, cash, and borrowing capacity - Total borrowings were **$1,475.4 million** at December 31, 2021, including **$225.4 million** tied to variable interest rates[106](index=106&type=chunk) - The company drew **$198.0 million** on its Revolving Credit Facility, primarily to fund the Billie acquisition, leaving **$220.7 million** available[106](index=106&type=chunk) - The maximum receivables sold amount under the Accounts Receivable Facility was increased to **$180.0 million** from **$150.0 million**, effective February 7, 2022[106](index=106&type=chunk) - The company expects cash on hand, cash flows from operations, and borrowing capacity to be sufficient for future working capital, interest payments, R&D, capital expenditures, and other financing requirements for at least the next 12 months[106](index=106&type=chunk) [Cash Flows](index=29&type=section&id=Cash%20Flows) This section summarizes the net cash flows from operating, investing, and financing activities for the reporting period Net Cash Flow Summary (Three Months Ended December 31) | Activity (in millions) | 2021 | 2020 | | :--------------------- | :------ | :------ | | Operating activities | $(79.0) | $(82.5) | | Investing activities | $(312.7) | $(2.3) | | Financing activities | $155.5 | $(5.5) | | Effect of exchange rate changes on cash | $(3.2) | $6.4 | | **Net decrease in cash and cash equivalents** | **$(239.4)** | **$(83.9)** | [Operating Activities](index=29&type=section&id=Operating%20Activities) This section details the cash flows generated from or used by the company's primary business operations - Cash flow used by operating activities decreased to **$79.0 million** in Q1 FY22 from **$82.5 million** in Q1 FY21, primarily due to favorable changes in working capital[109](index=109&type=chunk) [Investing Activities](index=29&type=section&id=Investing%20Activities) This section outlines cash flows related to the acquisition and disposal of long-term assets, including business combinations and capital expenditures - Cash flow used by investing activities significantly increased to **$312.7 million** in Q1 FY22 from **$2.3 million** in Q1 FY21[110](index=110&type=chunk) - The primary driver was the **$308.8 million** acquisition of Billie, net of cash acquired[110](index=110&type=chunk) - Capital expenditures were **$9.4 million** in Q1 FY22, down from **$10.2 million** in Q1 FY21[110](index=110&type=chunk) [Financing Activities](index=29&type=section&id=Financing%20Activities) This section describes cash flows from debt, equity transactions, and dividend payments - Net cash from financing activities was **$155.5 million** in Q1 FY22, compared to **$5.5 million** used in Q1 FY21[111](index=111&type=chunk) - This was driven by a **$198.0 million** draw on the Revolving Credit Facility to fund the Billie acquisition[111](index=111&type=chunk) - Share repurchases totaled **$24.5 million** in Q1 FY22, up from **$9.2 million** in Q1 FY21[111](index=111&type=chunk) [Share Repurchases](index=29&type=section&id=Share%20Repurchases) This section details the company's common stock repurchase activities during the quarter - During Q1 FY22, the company repurchased **0.5 million** shares of common stock for **$24.5 million**[112](index=112&type=chunk) - **9.2 million** shares remain available for repurchase under the 2018 Board authorization[112](index=112&type=chunk) [Dividends](index=29&type=section&id=Dividends) This section reports on cash dividends declared and paid to shareholders - A cash dividend of **$0.15 per share** was declared on November 4, 2021, totaling **$8.4 million**, and paid on January 6, 2022[113](index=113&type=chunk) - Another quarterly cash dividend of **$0.15 per common share** was declared on February 4, 2022, payable April 5, 2022[113](index=113&type=chunk) [Commitments and Contingencies](index=29&type=section&id=Commitments%20and%20Contingencies) This section outlines the company's future minimum debt repayments and other contractual obligations - Future minimum repayments of debt as of December 31, 2021, include **$198.0 million** in fiscal 2025, **$750.0 million** in fiscal 2028, and **$500.0 million** in fiscal 2029[114](index=114&type=chunk) - No other material changes in contractual obligations since the 2021 Annual Report[114](index=114&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section details the company's exposure to market risks from currency, commodity, and interest rate fluctuations, and its mitigation strategies - Market risk exposures include currency rates, commodity prices, and interest rates[117](index=117&type=chunk) - Variable-rate debt instruments totaled **$225.4 million** as of December 31, 2021[117](index=117&type=chunk) - A **one-percent** increase in applicable interest rates would increase annual interest expense by approximately **$2.0 million**[117](index=117&type=chunk) [Item 4. Controls and Procedures.](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, assessed disclosure controls and procedures as effective, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective as of December 31, 2021, by the CEO and CFO[119](index=119&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended December 31, 2021[120](index=120&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section contains additional information not covered in Part I, including details on equity security sales and exhibits [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section details the company's common stock repurchases during Q1 FY2022, including shares purchased and average prices Purchases of Equity Securities (Q1 Fiscal 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number that May Yet Be Purchased Under the Plans or Programs | | :------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | :------------------------------------------------------------------- | | October 1 to 31, 2021 | — | $— | — | 9,750,000 | | November 1 to 30, 2021 | 473,022 | $43.40 | 249,000 | 9,501,000 | | December 1 to 31, 2021 | 308,963 | $44.13 | 308,963 | 9,192,037 | [Item 6. Exhibits.](index=33&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including organizational documents, agreements, and certifications - Exhibits include Amended and Restated Articles of Incorporation and Bylaws, Credit Agreement, Indentures for Senior Notes, and the Sixth Amendment to Master Accounts Receivable Purchase Agreement[123](index=123&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350 are included[123](index=123&type=chunk)