Energizer Holdings, Inc. Announces Fiscal 2016 Fourth Quarter and Full Year Results and Provides Financial Outlook for the Fiscal Year 2017

ST. LOUIS, Nov. 9, 2016

For the year, the Company reported net earnings of $127.7 million, or $2.04 per diluted share, compared with a net loss of $4.0 million, or a loss of $0.06 per diluted share, in the prior year.  Adjusted net earnings for the current fiscal year were $144.6 million, or $2.31 per diluted share, compared to $177.3 million in the prior fiscal year, or $2.82 per diluted share.

"Fiscal 2016 was a strong year for Energizer," said Alan Hoskins, Chief Executive Officer.  "The combination of organic sales growth, a relentless focus on costs and effective working capital management resulted in a solid financial performance in our first full fiscal year as a stand alone company.  This allowed us to reinvest in our business, return capital to shareholders through dividends and share repurchase and, on July 1, complete our first acquisition.    We believe that we have created a foundation for continued success and we remain focused on delivering value for our shareholders."

Fourth Fiscal Quarter Financial Highlights (Unaudited)
The following is a summary of key fourth fiscal quarter results.  All comparisons are with the fourth quarter of fiscal 2015 unless otherwise stated.

• Net sales were $432.4 million, up 8.3%: (a)
  • Organic net sales increased 1.7%, due primarily to net distribution and space gains, pricing actions and timing of holiday shipments.  These items were partially offset by the expected reduction in retail inventory levels.
  • Impact of the HandStands acquisition resulted in increased sales of $32.3 million, or 8.1%.
  • These items were partially offset by the impact of unfavorable movement in foreign currencies of $5.6 million, or 1.5%.
• Gross margin percentage was 43.3%, down 260 basis points from the prior year.  Excluding the impact from the one-time accounting adjustment ($8.1 million) related to the fair market value step up of HandStands acquired inventory and prior year restructuring, spin and integration related charges ($2.8 million), gross margin percentage was 45.2%, or 140 basis points below prior year.  This change was driven in part by a 60 basis point impact due to an unfavorable movement in currencies and increased costs as a result of the continued impact from investments in product innovation. (a)
• A&P spending was 7.3% of sales, a decrease of 100 basis points, or $1.9 million, due to higher prior year spending related to the EcoAdvanced product launch.
• SG&A spending, excluding acquisition and integration costs and spin costs, was approximately $92.8 million, or 21.5% compared to $89.1 million, or 22.3% in the prior year.  The higher absolute dollar value was due in part to $3.9 million of additional SG&A related to HandStands operations in the current fourth quarter.  The improved percentage comparison versus the prior year quarter reflects the improved top-line performance due to organic sales growth and incremental sales from the HandStands acquisition. (a)
• Spin-off and spin restructuring related charges were $4.6 million in the fourth fiscal quarter.
• Acquisition and integration costs associated with the HandStands acquisition were $7.1 million in the fourth fiscal quarter.
• Earnings before income taxes was negatively impacted by the movement in foreign currencies by approximately $6 million in the fourth fiscal quarter, net of hedge impact.
• Adjusted EBITDA was $76.3 million in the quarter. (a)
• Dividend payments in the quarter were approximately $15.5 million, or $0.25 per share.
• Repurchased approximately 233,000 shares of common stock during the fourth quarter for $10.8 million.

(a) See Press Release attachments for additional information as well as the GAAP to Non-GAAP reconciliations.

Fiscal 2016 Full Year Financial Highlights (Unaudited)
The following is a summary of key fiscal 2016 full year results.  All comparisons are with fiscal 2015 unless otherwise stated.

• Net sales were $1,634.2 million, up 0.2%: (a)
  • Organic net sales increased 3.7%, reflecting net distribution and space gains, pricing actions and timing of holiday shipments. These gains were partially offset by the heightened competitive activity in certain Asia developed markets.
  • Impact of the HandStands acquisition resulted in increased sales of $32.3 million, or 2.0%.
  • These items were partially offset by the impact of unfavorable movement in foreign currencies of $66.9 million, or 4.1%, the unfavorable impact of the deconsolidation of Venezuela of $8.5 million, or 0.5%, and the unfavorable impact of the international go-to-market changes of $14.7 million, or 0.9%.
• Gross margin percentage was 43.6%, down 270 basis points from the prior year.  Excluding the impact from the one-time accounting adjustment ($8.1 million) related to the fair market value step up of HandStands acquired inventory and restructuring, spin and integration charges ($2.8 million in fiscal 2016 and $3.9 million in fiscal 2015), gross margin percentage was 44.3% or 230 basis points below prior year.  This change was driven by a 180 basis point impact due to an unfavorable movement in currencies, increased costs related to planned as well as accelerated discrete productivity initiatives and increased costs in support of product innovation. (a)
• A&P spending was 6.3% of sales, a decrease of 180 basis points, or $29.9 million, due to higher prior year spending related to the EcoAdvanced product launch.
• SG&A spending, excluding restructuring, acquisition and integration costs and spin costs, was approximately $332.6 million, or 20.4% compared to $327.1 million, or 20.0% in the prior year. (a)
• Spin-off and spin restructuring related charges were $16.2 million in fiscal 2016.
• Restructuring related charges were $4.9 million in fiscal 2016.
• Earnings before income taxes was negatively impacted by the movement in foreign currencies by approximately $52 million, net of hedge impact.
• Income tax rate on a year to date basis was 22.9% due to the favorable impacts of certain return to provision adjustments related to prior year provision estimates and certain spin related adjustments of approximately $11.4 million.  Excluding the impact of all of our Non-GAAP adjustments, the effective tax rate on a full year basis was 29.8%. (a)
• Adjusted EBITDA was $313.9 million. (a)
• Net cash from operating activities was $193.9 million and Free Cash Flow was $166.7 million. (a)
• Dividend payments were $62.7 million, or $1.00 per share.
• Repurchased approximately 833,000 shares of common stock for $32.6 million. (b)

(a) See Press Release attachments for additional information as well as the GAAP to Non-GAAP reconciliations.
(b) Share repurchases include $0.8 million that was cash settled in fiscal 2017.