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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 10-Q
_______________________________

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 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: 001-36837
____________________________________________________________________________________________________________
enr-20221231_g1.jpg
ENERGIZER HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Missouri36-4802442
(State or other jurisdiction of(I. R. S. Employer
incorporation or organization)Identification No.)
 
533 Maryville University Drive 
St. Louis,Missouri63141
(Address of principal executive offices)(Zip Code)
(314)985-2000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per shareENRNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No

1



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
    
Non-accelerated filerSmaller reporting company
    
 Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No

Indicate the number of shares of Energizer Holdings, Inc. common stock, $.01 par value, outstanding as of the close of business on February 3, 2023: 71,426,953.
2


INDEX
 Page
PART I — FINANCIAL INFORMATION 
  
Item 1. Financial Statements (Unaudited) 
  
Consolidated Statements of Earnings and Comprehensive Income (Condensed) for the Quarters Ended December 31, 2022 and 2021
Consolidated Balance Sheets (Condensed) as of December 31, 2022 and September 30, 2022
Consolidated Statements of Cash Flows (Condensed) for the Three Months Ended December 31, 2022 and 2021
Consolidated Statements of Shareholders' Equity (Condensed) for the Three Months Ended December 31, 2022 and 2021

              
Notes to Consolidated (Condensed) Financial Statements
  
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
  
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
  
PART II — OTHER INFORMATION 
  
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
  
EXHIBIT INDEX
SIGNATURES




3

ENERGIZER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
(Condensed)
(In millions, except per share data - Unaudited)  

 For the Quarters Ended December 31,
 20222021
Net sales$765.1 $846.3 
Cost of products sold466.8 534.7 
Gross profit298.3 311.6 
Selling, general and administrative expense120.4 122.1 
Advertising and sales promotion expense53.4 51.7 
Research and development expense7.6 8.9 
Amortization of intangible assets16.0 15.2 
Interest expense42.9 37.0 
Gain on extinguishment of debt(2.9) 
Other items, net(1.4)0.2 
Earnings before income taxes62.3 76.5 
Income tax provision13.3 16.5 
Net earnings49.0 60.0 
Mandatory preferred stock dividends (4.0)
Net earnings attributable to common shareholders$49.0 $56.0 
Basic net earnings per common share$0.69 $0.84 
Diluted net earnings per common share$0.68 $0.83 
Weighted average shares of common stock - Basic71.4 66.8 
Weighted average shares of common stock - Diluted72.2 67.1 
Statements of Comprehensive Income: 
Net earnings$49.0 $60.0 
Other comprehensive (loss)/income, net of tax expense/(benefit)
Foreign currency translation adjustments(18.6)12.3 
Pension activity, net of tax of $1.2 and $0.4, respectively.
2.4 1.2 
Deferred (loss)/gain on hedging activity, net of tax of $(4.7) and $0.2, respectively.
(13.4)5.2 
Total comprehensive income$19.4 $78.7 
The above financial statements should be read in conjunction with the Notes to Consolidated (Condensed) Financial Statements (Unaudited).
4


ENERGIZER HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Condensed)
(In millions - Unaudited)
 
AssetsDecember 31,
2022
September 30,
2022
Current assets 
Cash and cash equivalents$280.3 $205.3 
Trade receivables, less allowance for doubtful accounts of $3.7 and $2.9, respectively
364.3 421.7 
Inventories754.7 771.6 
Other current assets202.6 191.4 
Total current assets1,601.9 1,590.0 
Property, plant and equipment, net354.1 362.1 
Operating lease assets102.6 100.1 
Goodwill1,016.1 1,003.1 
Other intangible assets, net1,281.8 1,295.8 
Deferred tax asset62.4 61.8 
Other assets159.0 159.2 
Total assets$4,577.9 $4,572.1 
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt$12.0 $12.0 
Current portion of capital leases0.4 0.4 
Notes payable 6.4 
Accounts payable352.7 329.4 
Current operating lease liabilities16.1 15.8 
Other current liabilities315.8 333.9 
Total current liabilities697.0 697.9 
Long-term debt3,506.6 3,499.4 
Operating lease liabilities90.4 88.2 
Deferred tax liability16.3 17.9 
Other liabilities136.8 138.1 
Total liabilities4,447.1 4,441.5 
Shareholders' equity
Common stock0.8 0.8 
Additional paid-in capital802.9 828.7 
Retained losses(256.0)(304.7)
Treasury stock(242.0)(248.9)
Accumulated other comprehensive loss(174.9)(145.3)
Total shareholders' equity130.8 130.6 
Total liabilities and shareholders' equity$4,577.9 $4,572.1 

The above financial statements should be read in conjunction with the Notes to Consolidated (Condensed) Financial Statements (Unaudited).
5

ENERGIZER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Condensed)
(In millions - Unaudited)
 For the Three Months Ended December 31,
 20222021
Cash Flow from Operating Activities  
Net earnings$49.0 $60.0 
Non-cash integration and restructuring charges 3.0 
Depreciation and amortization32.1 29.4 
Deferred income taxes0.9  
Share-based compensation expense4.6 1.3 
Gain on extinguishment of debt(2.9) 
Non-cash items included in income, net3.4 5.5 
Other, net0.8 (0.3)
Changes in current assets and liabilities used in operations73.1 (153.5)
Net cash from/(used by) operating activities161.0 (54.6)
Cash Flow from Investing Activities
Capital expenditures(9.5)(24.4)
Proceeds from sale of assets0.7  
Acquisitions, net of cash acquired and working capital settlements 0.4 
Net cash used by investing activities(8.8)(24.0)
  
Cash Flow from Financing Activities  
Payments on debt with maturities greater than 90 days(49.8)(3.6)
Net (decrease)/increase in debt with original maturities of 90 days or less(5.9)94.2 
Debt issuance costs (2.5)
Dividends paid on common stock(21.8)(20.5)
Dividends paid on mandatory convertible preferred stock (4.0)
Taxes paid for withheld share-based payments(1.9)(2.2)
Net cash (used by)/from financing activities(79.4)61.4 
Effect of exchange rate changes on cash2.2 (0.5)
Net increase/(decrease) in cash, cash equivalents, and restricted cash75.0 (17.7)
Cash, cash equivalents, and restricted cash, beginning of period205.3 238.9 
Cash, cash equivalents, and restricted cash, end of period$280.3 $221.2 

The above financial statements should be read in conjunction with the Notes to Consolidated (Condensed) Financial Statements (Unaudited).
6

ENERGIZER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Condensed)
(Amounts in millions, Shares in thousands - Unaudited)




Number of SharesAmount
Common StockCommon StockAdditional Paid-in CapitalRetained (Losses)/EarningsAccumulated Other Comprehensive (Loss)/IncomeTreasury StockTotal Shareholders' Equity
September 30, 202271,270 $0.8 $828.7 $(304.7)$(145.3)$(248.9)$130.6 
Net earnings— — — 49.0 — — 49.0 
Share-based payments— — 4.6 — — — 4.6 
Activity under stock plans142 — (8.5)(0.3)— 6.9 (1.9)
Dividends to common shareholders ($0.30 per share)
— — (21.9) — — (21.9)
Other comprehensive income— — — — (29.6)— (29.6)
December 31, 202271,412 $0.8 $802.9 $(256.0)$(174.9)$(242.0)$130.8 

Number of SharesAmount
Preferred StockCommon StockPreferred StockCommon StockAdditional Paid-in CapitalRetained (Losses)/EarningsAccumulated Other Comprehensive (Loss)/IncomeTreasury StockTotal Shareholders' Equity
September 30, 20212,156 66,864 $ $0.7 $832.0 $(5.0)$(230.4)$(241.6)$355.7 
Net earnings— — — — — 60.0 — — 60.0 
Share-based payments— — — — 1.3 — — — 1.3 
Common stock purchased— (451)— — 15.0 — — (15.0) 
Activity under stock plans— 133 — — (8.3)— — 6.1 (2.2)
Dividends to common shareholders ($0.30 per share)
— — — — — (20.1)— — (20.1)
Dividends to preferred shareholders ($1.875 per share)
— — — — — (4.0)— — (4.0)
Other comprehensive income— — — — — — 18.7 — 18.7 
December 31, 20212,156 66,546 $ $0.7 $840.0 $30.9 $(211.7)$(250.5)$409.4 

The above financial statements should be read in conjunction with the Notes to Consolidated (Condensed) Financial Statement (Unaudited).
7

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)



(1) Description of Business and Basis of Presentation
Description of Business - Energizer Holdings, Inc. and its subsidiaries (Energizer or the Company) is a global manufacturer, marketer and distributor of primary batteries, portable lights, and auto care appearance, performance, refrigerants and fragrance products.

Batteries and lights are sold under the Energizer®, Eveready®, Rayovac® and Varta® brand names following the 2019 acquisition of Spectrum Holdings, Inc.'s (Spectrum) global battery, lighting, and portable power business (Battery Acquisition). Energizer offers batteries using lithium, alkaline, carbon zinc, nickel metal hydride, zinc air and silver oxide constructions.

Automotive appearance, performance, refrigerants and fragrance products are sold under the Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL®, Eagle One®, Armor All®, STP®, and A/C PRO® brands following the 2019 acquisition of Spectrum's global auto care business (Auto Care Acquisition).

Basis of Presentation - The accompanying Consolidated (Condensed) Financial Statements include the accounts of Energizer and its subsidiaries. All significant intercompany transactions are eliminated. Energizer has no material equity method investments, variable interests or non-controlling interests.

The accompanying Consolidated (Condensed) Financial Statements have been prepared in accordance with Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The year-end Consolidated (Condensed) Balance Sheet was derived from the audited financial statements included in Energizer's Report on Form 10-K, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of our operations, financial position and cash flows
have been included. Certain reclassifications have been made to the prior year financial statements to conform to the current presentation. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year. These statements should be read in conjunction with the financial statements and notes thereto for Energizer for the year ended September 30, 2022 included in the Annual Report on Form 10-K dated November 15, 2022.

Recently Adopted Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. Subsequent to the issuance of ASU 2020-04, ASC 848 was amended by ASU 2021-01 Scope, and ASU 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. Topic 848 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships and other transactions that reference LIBOR. These updates are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2024. The Company has adopted the provisions of these updates on October 1, 2022 and will apply the guidance prospectively to contract modifications that are entered into for the purpose of establishing a new reference rate. The adoption of this guidance did not have a material impact to the financial statements.

(2) Revenue Recognition

The Company, through its operating subsidiaries, is one of the world’s largest manufacturers, marketers and distributors of household batteries, specialty batteries and lighting products, and is a leading designer and marketer of automotive fragrance, appearance, performance and air conditioning recharge products. The Company distributes its products to consumers through numerous retail locations worldwide, including mass merchandisers and warehouse clubs, food, drug and convenience stores, electronics specialty stores and department stores, hardware and automotive centers, e-commerce and military stores. The Company sells to its customers through a combination of a direct sales force and exclusive and non-exclusive third-party distributors and wholesalers.

The Company’s revenue is primarily generated from the sale of finished product to customers. Sales predominantly contain a single delivery element, or performance obligation, and revenue is recognized at a single point in time when title, ownership and risk of loss pass to the customer. This typically occurs when finished goods are delivered
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ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


to the customer or when finished goods are picked up by a customer or customer’s carrier, depending on contract terms.

North America sales are generally through large retailers with nationally or regionally recognized brands.

Our International sales, which includes Latin America, are comprised of modern trade, developing and distributor market groups. Modern trade, which is most prevalent in Western Europe and more developed economies throughout the world, generally refers to sales through large retailers with nationally or regionally recognized brands. Developing markets generally include sales by wholesalers or small retailers who may not have a national or regional presence. Distributors are utilized in other markets where the Company does not have a direct sales force. Each market's determination is based on the predominant customer type or sales strategy utilized in the market.

Supplemental product and market information is presented below for revenues from external customers for the quarters ended December 31, 2022 and 2021:
 For the Quarters Ended December 31,
Net Sales by products20222021
Batteries$639.5 $701.7 
Auto Care93.5 106.1 
Lights32.1 38.5 
Total Net Sales$765.1 $846.3 

 For the Quarters Ended December 31,
 20222021
Net Sales by markets 
North America$456.3 $508.9 
Modern Markets153.6 165.3 
Developing Markets108.5 115.4 
Distributors Markets46.7 56.7 
 Total Net Sales$765.1 $846.3 

(3) Acquisitions

Formulations Acquisition - During the first quarter of fiscal 2021, the Company entered into an agreement with Green Global Holdings, LLC to acquire a North Carolina-based company that specializes in developing formulations for cleaning tasks (Formulations Acquisition). The Formulations Acquisition was completed for a cash purchase price of $51.2. During the first quarter of fiscal 2022, the working capital settlement was finalized, reducing the purchase price by $1.0, of which $0.4 was paid to the Company in the first quarter of fiscal 2022 and the remaining $0.6 was settled in the third quarter of fiscal 2022. The product formulations acquired are both sold to customers directly and licensed to manufacturers.

The acquisition was accounted for as a business combination using the acquisition method of accounting which requires assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date. The fair value of proprietary technology acquired and customer relationships were determined by applying the multi-period excess earnings method under the income approach.

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ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


The following table outlines the purchase price allocation:
Trade receivables$1.3 
Inventories0.1 
Other intangible assets, net20.5 
Operating lease assets0.5 
Accounts payable(0.2)
Current operating lease liabilities(0.2)
Other current liabilities(0.2)
Operating lease liabilities(0.3)
Total identifiable net assets$21.5 
Goodwill28.7 
Net assets acquired$50.2 

The table below identifies the purchased intangible assets of $20.5:
TotalWeighted Average Useful Lives
Proprietary technology$19.5 7
Customer relationships1.0 15
Total Other intangible assets, net$20.5 

The Company finalized their purchase price accounting in the first quarter of fiscal 2022. The goodwill acquired in this acquisition is attributable to the value the Company expects to achieve from the significant innovation capabilities in formulations that the acquired company will bring to our organization, as well as the workforce acquired. The goodwill was allocated to the Americas segment prior to the Company's reorganization of our reportable segments on October 1, 2021. The goodwill is deductible for tax purposes.

In conjunction with the acquisition, the Company entered into incentive compensation agreements with certain key personnel. These agreements allow for potential earn out payments of up to $35.0 based on the achievement of a combination of financial and product development and commercialization performance targets, and continued employment with the Company over the three years following the acquisition. These agreements are not considered a component of the acquisition purchase price but rather as employee compensation arrangements. During the first quarter of fiscal 2022, $1.1 of this earn-out was recorded on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income in Selling, general and administrative expense. No amounts have been recognized for the second or third performance years under the agreements at December 31, 2022.

Pro Forma Financial Information- Pro forma results for the Formulations Acquisition were not considered material and, as such, are not included.

Acquisition and Integration Costs- Acquisition and integration costs incurred during fiscal year 2022 relate to the Formulations Acquisition, and the Battery and Auto Care Acquisitions which occurred in fiscal year 2019. The Company incurred pre-tax acquisition and integration costs of $16.5 in the three months ended December 31, 2021. There were no acquisition and integration costs incurred during the three months ended December 31, 2022.

Pre-tax acquisition and integration costs recorded in Costs of products sold were $6.0 for the three months ended December 31, 2021, primarily related to the facility exit and restructuring related costs, discussed in Note 4, Restructuring.

Pre-tax acquisition and integration costs recorded in Selling, general and administrative expense (SG&A) were $9.4 for the three months ended December 31, 2021 and primarily related to the integration of the acquired information technology systems, consulting costs, and retention-related compensation costs.

For the three months ended December 31, 2021, the Company recorded $1.1 of pre-tax acquisition and integration related costs in research and development related to severance and R&D asset write-offs.
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ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)



(4) Restructuring

Project Momentum Restructuring - In November 2022, the Board of Directors approved a profit recovery program, Project Momentum, which includes an enterprise-wide restructuring focused on recovering operating margins, optimizing our manufacturing, distribution and global supply chain networks, and enhancing our organizational efficiency across both segments. Activities currently outlined within this plan are expected to be substantially complete by September 30, 2024. As planned, the Company expects to incur pre-tax exit-related operating costs associated with these plans of approximately $40 to $50 and capital expenditures of $35 to $45 through the end of fiscal 2024.

2019 Restructuring Program - In the fourth fiscal quarter of 2019, the Company began implementing restructuring related integration plans for our manufacturing and distribution networks. These plans included the closure and combination of distribution and manufacturing facilities in order to reduce complexity and realize greater efficiencies in our manufacturing, packaging and distribution processes. All activities within these plans were substantially completed by December 31, 2021, and the Company does not expect to incur additional material charges associated with these plans.

2020 Restructuring Program - In the fourth fiscal quarter of 2020, the Company initiated a new restructuring program with a primary focus on reorganizing its global end-to-end supply chain network and ensuring accountability by category. This program included streamlining the Company’s end-to-end supply chain model to enable rapid response to category specific demands and enhancing our ability to better serve our customers. This program was substantially complete by December 31, 2021. The Company does not expect to incur additional material charges associated with this program.

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ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


The pre-tax expense for charges related to the restructuring plans for the quarters ended December 31, 2022 and 2021 are noted in the table below and were reflected in the Consolidated (Condensed) Statement of Earnings and Comprehensive Income:
For the Quarters Ended December 31,
20222021
2019 Restructuring Program
Costs of products sold
Severance and related benefit costs$ $(0.1)
Accelerated depreciation & asset write-offs 1.2 
Other exit costs(1)
 2.8 
2019 Restructuring Total$ $3.9 
2020 Restructuring Program
Costs of products sold
Severance and related benefit costs$ $0.2 
Other restructuring related costs(2)
 1.1 
Selling, general and administrate expense
Severance and related benefit costs 0.1 
2020 Restructuring Total$ $1.4 
Project Momentum Restructuring
Costs of products sold
Other restructuring related costs(2)
$0.3 $ 
Selling, general and administrate expense
Severance and related benefit costs0.5  
Other restructuring related costs(2)
5.8  
Momentum Restructuring Cost Total$6.6 $ 
Total restructuring related expenses$6.6 $5.3 
(1) Includes charges primarily related to consulting, relocation, environmental investigatory and mitigation costs, and other facility exit costs.
(2) Primarily includes consulting fees for the restructuring program.

Although the Company's restructuring costs are recorded outside of segment profit, if allocated to our reportable segments, the restructuring costs noted above for the quarter ended December 31, 2022 would be incurred within the Battery & Lights segment in the amounts of $5.8 and the Auto Care segment in the amount of $0.8. The restructuring costs noted above for the quarter ended December 31, 2021 would be incurred within the Battery & Lights segment in the amounts of $5.1 and the Auto Care segment in the amount of $0.2.

12

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


The following table summarizes the activity related to the Project Momentum restructuring program for the quarter ended December 31, 2022:
Utilized
September 30, 2022Charge to IncomeCashNon-Cash
December 31, 2022 1
Severance & termination related costs$ $0.5 $0.2 $ $0.3 
Other restructuring related costs0.9 6.1 3.8  3.2 
    Total$0.9 $6.6 $4.0 $ $3.5 
(1) At December 31, 2022, the restructuring reserve is recorded on the Consolidated (Condensed) Balance Sheet in Other current liabilities.

The following table summarizes the activity related to the 2019 restructuring program for the quarters ended December 31, 2021 and 2022:
Utilized
September 30, 2021Charge to IncomeCashNon-Cash
December 31, 2021 1
Severance & termination related costs$1.4 $(0.1)$1.0 $ $0.3 
Accelerated depreciation & asset write-offs 1.2  1.2  
Other exit costs2.2 2.8 4.5  0.5 
Net gain on sale of fixed assets0.5  0.5   
    Total$4.1 $3.9 $6.0 $1.2 $0.8 
September 30, 2022Charge to IncomeCashNon-CashDecember 31, 2022
Severance & termination related costs$0.1 $ $0.1 $ $ 
   Total$0.1 $ $0.1 $ $ 
(1) At December 31, 2021, the restructuring reserve is recorded on the Consolidated (Condensed) Balance Sheet in Other current liabilities.

The following table summarizes the activity related to the 2020 restructuring program for the quarters ended December 31, 2021 and 2022:
Utilized
September 30, 2021Charge to IncomeCashNon-Cash
December 31, 2021 1
Severance & termination related costs$0.9 $0.3 $0.2 $ $1.0 
Other restructuring related costs0.7 1.1 1.4  0.4 
Total$1.6 $1.4 $1.6 $ $1.4 
September 30, 2022Charge to IncomeCashNon-Cash
December 31, 2022 1
Severance & termination related costs$0.7 $ $0.3 $ $0.4 
   Total$0.7 $ $0.3 $ $0.4 
(1) At December 31, 2021 and 2022, the restructuring reserve is recorded on the Consolidated (Condensed) Balance Sheet in Other current liabilities.
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ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


(5) Earnings per share

Basic earnings per share is based on the average number of common shares outstanding during the period. Diluted earnings per share is based on the average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of restricted stock unit (RSU) awards, performance share awards, deferred compensation equity plans and the conversion of the Mandatory convertible preferred stock (MCPS).

During the second quarter of fiscal year 2022, the MCPS were converted to approximately 4.7 million shares of
Common stock and are no longer outstanding for fiscal 2023. For the quarter ended December 31, 2021, the conversion of the MCPS was not dilutive and the mandatory preferred stock dividends are included in the dilution calculation.

The following table sets forth the computation of basic and diluted earnings per share for the quarters ended December 31, 2022 and 2021:

(in millions, except per share data)For the Quarters Ended December 31,
Basic net earnings per share20222021
Net earnings$49.0 $60.0 
Mandatory preferred stock dividends (4.0)
Net earnings attributable to common shareholders$49.0 $56.0 
Weighted average common shares outstanding - Basic71.4 66.8 
Basic net earnings per common share$0.69 $0.84 
Diluted net earnings per share
Weighted average common shares outstanding - Basic71.4 66.8 
Dilutive effect of RSU0.2 0.2 
Dilutive effect of performance shares0.5  
Dilutive effect of stock based deferred compensation plan0.1 0.1 
Weighted average common shares outstanding - Diluted72.2 67.1 
Diluted net earnings per common share$0.68 $0.83 

For the quarters ended December 31, 2022 and 2021, 0.2 million and 0.1 million RSU, respectively, were anti-dilutive and not included in the diluted net earnings per share calculation.

Performance based RSU shares of 1.3 million and 1.8 million were excluded for the quarters ended December 31, 2022 and 2021, respectively, as the performance targets for those awards have not been achieved as of the end of the applicable periods.



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ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


(6) Segments

Operations for Energizer are managed via two product segments: Batteries & Lights and Auto Care. Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses (including share-based compensation costs), amortization of intangibles, acquisition and integration activities, restructuring costs, acquisition earn out and other items determined to be corporate in nature. Financial items, such as interest income and expense and gain on extinguishment of debt are managed on a global basis at the corporate level. The exclusion of restructuring costs and acquisition and integration costs from segment results reflects management’s view on how it evaluates segment performance.

Energizer’s operating model includes a combination of standalone and shared business functions between the product segments, varying by country and region of the world. Shared functions include the sales and marketing functions, as well as human resources, IT and finance shared service costs. Energizer applies a fully allocated cost basis, in which shared business functions are allocated between segments. Such allocations are estimates, and may not represent the costs of such services if performed on a standalone basis.

15

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


Segment sales and profitability for the quarters ended December 31, 2022 and 2021 are presented below:
 For the Quarters Ended December 31,
20222021
Net Sales 
Batteries & Lights$671.6 $740.2 
Auto Care93.5 106.1 
Total net sales$765.1 $846.3 
Segment Profit 
Batteries & Lights$138.3 $168.4 
Auto Care10.6 (0.2)
Total segment profit148.9 168.2 
    General corporate and other expenses (1) (25.4)(21.7)
    Amortization of intangible assets(16.0)(15.2)
Project Momentum restructuring costs (2)(6.6) 
    Acquisition and integration costs (3) (16.5)
    Acquisition earn out (4) (1.1)
Interest expense(42.9)(37.0)
Gain on extinguishment of debt (5)2.9  
Other items1.4 (0.2)
Total earnings before income taxes$62.3 $76.5 
Depreciation and amortization
Batteries & Lights$13.4 $12.2 
Auto Care2.7 2.0 
Total segment depreciation and amortization$16.1 $14.2 
Amortization of intangible assets16.0 15.2 
         Total depreciation and amortization$32.1 $29.4 
(1) Included in SG&A in the Consolidated (Condensed) Statement of Earnings and Comprehensive Income.
(2) Project Momentum Restructuring costs included $0.3 recorded in Cost of products sold and $6.3 recorded in SG&A for the quarter ended December 31, 2022.
(3) Acquisition and integration costs included $6.0 recorded in Cost of products sold, $9.4 recorded in SG&A, and $1.1 in Research and development for the quarter ended December 31, 2021.
(4) This represents the earn out achieved through December 31, 2021 under the incentive agreements entered into with the Formulations Acquisition and is recorded in SG&A on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income.
(5) The Gain on the extinguishment of debt for the quarter ended December 31, 2022 relates to the repurchase of outstanding Senior Notes at a discount and repayment of term loan.

16

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)



Corporate assets shown in the following table include cash, all financial instruments, pension assets, amounts indemnified by Spectrum per the purchase agreements and tax asset balances that are managed outside of operating segments.

Total AssetsDecember 31, 2022September 30, 2022
Batteries & Lights$1,319.1 $1,366.0 
Auto Care437.2 453.7 
Total segment assets$1,756.3 $1,819.7 
Corporate523.7 453.5 
Goodwill and other intangible assets2,297.9 2,298.9 
Total assets$4,577.9 $4,572.1 

(7) Goodwill and intangible assets

Goodwill and intangible assets deemed to have an indefinite life are not amortized, but are evaluated annually for impairment as part of our annual business planning cycle in the fourth fiscal quarter, or when indicators of a potential impairment are present.

The following table sets forth goodwill by segment as of October 1, 2022 and December 31, 2022:

Batteries & LightsAuto CareTotal
Balance at October 1, 2022$868.9 $134.2 $1,003.1 
Cumulative translation adjustment13.0  13.0 
Balance at December 31, 2022$881.9 $134.2 $1,016.1 

Energizer had indefinite-lived intangible assets of $763.7 at December 31, 2022 and $762.5 at September 30, 2022. The difference between the periods is driven by currency adjustments.

17

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)




Total intangible assets at December 31, 2022 are as follows:

Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Trademarks and trade names$142.3 $(23.6)$118.7 
Customer relationships394.1 (119.5)274.6 
Patents33.9 (16.7)17.2 
Proprietary technology172.5 (86.9)85.6 
Proprietary formulas29.2 (7.2)22.0 
Vendor relationships7.6 (7.6) 
    Total Amortizable intangible assets779.6 (261.5)518.1 
Trademarks and trade names - indefinite lived763.7 — 763.7 
     Total Other intangible assets, net$1,543.3 $(261.5)$1,281.8 

Total intangible assets at September 30, 2022 were as follows:

Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Trademarks and trade names$141.8 $(21.4)$120.4 
Customer relationships393.5 (112.6)280.9 
Patents33.4 (15.7)17.7 
Proprietary technology172.5 (81.5)91.0 
Proprietary formulas29.2 (6.3)22.9 
Vendor relationships6.9 (6.5)0.4 
    Total Amortizable intangible assets777.3 (244.0)533.3 
Trademarks and trade names - indefinite lived762.5 — 762.5 
    Total Other intangible assets, net$1,539.8 $(244.0)$1,295.8 


(8) Debt

The detail of long-term debt was as follows:
December 31, 2022September 30, 2022
Senior Secured Term Loan Facility due 2027$1,154.0 $1,182.0 
6.500% Senior Notes due 2027300.0 300.0 
4.750% Senior Notes due 2028583.7 600.0 
4.375% Senior Notes due 2029791.3 800.0 
3.50% Senior Notes due 2029 (Euro Notes of €650.0)(1)
695.9 637.1 
Capital lease obligations32.2 32.3 
Total long-term debt, including current maturities$3,557.1 $3,551.4 
Less current portion(12.4)(12.4)
Less unamortized debt premium and debt issuance fees(38.1)(39.6)
Total long-term debt$3,506.6 $3,499.4 
(1) Changes in the USD balance of the Euro denominated 3.50% Senior Notes due in 2029 is due to movements in the currency rate year-over-year.


18

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


Credit Agreement - During the first quarter of fiscal 2023, the Company pre-paid $