Energizer 2009 Annual Report Download

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M A I N T A I N I N G
O U R
F O C U S
E N E R G I Z E R H O L D I N G S , I N C .
2 0 0 9 A N N U A L R E P O R T
I N S I G H T
I N N O V A T I O N
E X E C U T I O N

Table of contents

  • Page 1
    M A I N TA I N I N G OUR FOCUS INSIGHT INNOVATION EXECUTION ENERgIzER hOLdINgS, INc. 2009 ANNUAL REpORT

  • Page 2
    ...Schick and Wilkinson Sword men's and women's shaving systems and disposable razors; Edge and Skintimate shave preparations; playtex tampons, infant feeding, diaper genie and gloves; Banana Boat and hawaiian Tropic sun care products; and Wet Ones moist wipes. With commercial and production operations...

  • Page 3
    ... battery volumes, unfavorable currencies across all businesses and a globally weak consumer environment. to mitigate the impact of the recession and difficult retail climate throughout the year, we exercised a number of initiatives to control overheads, reduce advertising and promotional spending...

  • Page 4
    ... our corporate and personal Care Division operations. the cost of these programs was $38.6 million, recorded in fiscal 2009, with anticipated annualized savings of $20 million, with approximately $14 million in savings to be realized in fiscal 2010. We reduced our advertising and promotion spending...

  • Page 5
    ...-cost, entry-level option for consumers to experience lithium technology and performance, lasting up to four times longer than alkaline in digital cameras. energizer® Advanced lithium joins the original energizer® ultimate lithium - the world's longest lasting AA and AAA batteries in high-tech...

  • Page 6
    ... inc. 2009 AnnuAl RepoRt I NS I G HT, I NNOVAT I ON & EXEC U TI ON At energizer, we forge strong connections with consumers throughout the world, gaining valuable insights into better serving their needs. to meet the needs of changing consumer lifestyles, we develop innovative products that...

  • Page 7
    ...2009 AnnuAl RepoRt pAGe 5 SkINTIMATE® ShAvE gEL the no. 1 brand of female shave preparation in the u.S., Skintimate® shave gels foam into a rich lather to protect against nicks and cuts, and leave skin touchably soft, smooth and moisturized. A broad array of formulations meet any woman's shaving...

  • Page 8
    ... category sales. energizer® MAX®, our flagship premium alkaline battery, has earned strong brand equity measures with consumers who rely on its dependable, long-lasting power in their everyday devices such as toys and games, remote controls, basic flashlights and smoke detectors. In the price...

  • Page 9
    ...games to remote controls, basic flashlights and smoke detectors. ENERgIzER® LIThIUM engineered to deliver optimal performance for today's power-hungry gadgets, energizer® ultimate lithium batteries are the world's longest-lasting AA and AAA in high-tech devices, while energizer® Advanced lithium...

  • Page 10
    ... the first AA lithium battery (1992), the first on-battery tester (1995), high-energy nickel metal hydride (niMH) rechargeable batteries (1997) and more. that inventive, pioneering legacy is shared by our newer Schick-Wilkinson Sword and playtex businesses. Schick began manufacturing blades sold in...

  • Page 11
    ... times, up to 500 charging cycles. the innovative new energizer Rechargeable Solar Charger for AA ® ® and AAA rechargeable batteries converts sunlight into usable energy for on-the-go consumers. our development of the energizer® Zinc Air prismatic battery represents an exciting power solution...

  • Page 12
    ...In 2009, Energizer announced the first zinc air prismatic battery, which is the highest energy density battery of any consumer portable power solution (either disposable or rechargeable). In addition, our portable lighting products business introduced a number of new products over the last two years...

  • Page 13
    ... hold or gain share in many of our key markets over the past three years due to our diversified portfolio of products, which meet a broad spectrum of consumer needs. personal care the Personal Care division includes Wet Shave products sold under the Schick, Wilkinson Sword, Edge and Skintimate brand...

  • Page 14
    ...two segments - Household Products (battery and portable lighting products) and Personal Care (wet shave, skin, feminine and infant care). Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation costs, costs associated with...

  • Page 15
    ... by fiscal 2008 sales to meet hurricane demand and early holiday season buy-in within the u.S. and volume growth in Central and Eastern Europe and latin America. overall pricing and price mix was favorable $15.8 as compared to fiscal 2007 as list price increases taken to offset rising material costs...

  • Page 16
    ...inc. 2009 AnnuAl REPoRt Management's Discussion and Analysis of Results of Operations and Financial Condition EDollars in millions, except per share and percentage data) As noted previously, Energizer's acquisition of Playtex was completed on october 1, 2007, the first business day of fiscal 2008...

  • Page 17
    ... expenditures increased in 2008 as compared to 2007 due to production related spending and Playtex related spending. See note 18 to the Consolidated Financial Statements for capital expenditures by segment. on June 5, 2009, the Company paid $275.0 for the acquisition of the shave preparation brands...

  • Page 18
    ... EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt Management's Discussion and Analysis of Results of Operations and Financial Condition EDollars in millions, except per share and percentage data) Capital expenditures of approximately $150 are anticipated in 2010 with increases in new product and cost...

  • Page 19
    ... on current discount rates, expected return on plan assets and plan design. total pension contributions for the Company in 2010 are estimated to be approximately $19. the Company believes cash flows from operating activities and periodic borrowings will be adequate to meet short-term and long-term...

  • Page 20
    ... hedges extend into fiscal year 2011. interest rate Exposure At September 30, 2009 and 2008, the fair market value of the Company's fixed rate debt is estimated at $1,926.2 and $2,078.5, respectively, using yields obtained from independent pricing sources for similar types of borrowing arrangements...

  • Page 21
    ... Sun Care products. other factors may also have an impact on the timing and amounts of sales, operating income, working capital and cash flows. they include: the timing of new product launches by competitors or by the Company, the timing of advertising, promotional, merchandising or other marketing...

  • Page 22
    ... product. the level of returns may fluctuate from our estimates due to several factors including weather conditions, customer inventory levels, and competitive activity. Based on our 2009 Sun Care shipments, each percentage point change in our returns rate would have impacted our reported net sales...

  • Page 23
    ... new device trends, migration to private label brands and other factors; our competitive position and market share presence in both Household Products and Personal Care categories; recent battery category decline and the outlook for category recovery; anticipated advertising and promotional spending...

  • Page 24
    PAGE 22 EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt S UM M A RY S EL EC T ED HIS TORI C A L F I N A N C I A L I N F ORM AT I ON EIn millions, except per share data) statements of earnings data For The Years Ended September 30, 2009 2008 (a) 2007 2006 2005 net sales Depreciation and amortization ...

  • Page 25
    ... of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles for external purposes. the Company's internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that...

  • Page 26
    ... of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that...

  • Page 27
    EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt PAGE 25 C ON S OL I DAT ED S TAT EM EN TS O F EA RN I N GS A N D C OM PRE HEN S IVE I N C OM E EDollars in millions, except per share data) statement of earnings Years Ended September 30, 2009 2008 2007 net sales Cost of products sold Gross profit ...

  • Page 28
    ... notes payable Accounts payable other current liabilities total current liabilities long-term debt other liabilities total liabilities Shareholders' equity Preferred stock, $.01 par value, none outstanding Common stock, $.01 par value, issued 108,008,682 shares at 2009 and 97,083,682 shares at 2008...

  • Page 29
    ...in working capital Changes in assets and liabilities used in operations, net of effects of business acquisitions: Decrease/(increase) in accounts receivable, net Decrease/(increase) in inventories (Increase)/decrease in other current assets (Decrease)/increase in accounts payable (Decrease)/increase...

  • Page 30
    PAGE 28 EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt C ON S OL I DAT ED S TAT EM EN TS OF S HA REH OL DER S' EQUI T Y EDollars in millions, shares in thousands) Dollars 2009 2008 2007 2009 Shares 2008 2007 Common stock: Balance at beginning of year net proceeds from Equity offering Ending ...

  • Page 31
    ... of the acquiring entity. As the inventory was sold during the fourth quarter of fiscal 2009 as it relates to the shave preparation acquisition, and during the first and second quarters of fiscal 2008, as it relates to the Playtex acquisition, the adjustments were charged to cost of products sold.

  • Page 32
    ... with the time of the shipment and title transfer, we reduce sun care sales and cost of sales, and record an accrued liability on our Consolidated Balance Sheet for anticipated returns based upon an estimated return level. Customers are required to pay for the sun care product purchased under the...

  • Page 33
    ... its acquisition of the Edge and Skintimate shave preparation brands (the Acquisition) from S.C. Johnson & Son, Inc. (SCJ) for $275.0. the Acquisition was funded with proceeds from the completed common stock offering on May 20, 2009. See note 13 of the notes to Consolidated Financial Statements for...

  • Page 34
    PAGE 32 EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt Notes to Consolidated Financial Statements EDollars in millions, except per share and percentage data) the increase in the gross amortizable intangible assets during fiscal 2009 is due primarily to the valuation of assets acquired in the shave ...

  • Page 35
    ... tax liabilities in fiscal 2007. the deferred tax assets and deferred tax liabilities recorded on the balance sheet as of September 30 for the years indicated are as follows and include current and noncurrent amounts: 2009 2008 benefit from the Playtex acquisition. of this amount, the impact of the...

  • Page 36
    PAGE 34 EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt Notes to Consolidated Financial Statements EDollars in millions, except per share and percentage data) In 2009, total pre-tax charges related to the VERo and RIF were $38.6, which represented employee separation and related costs. Virtually all ...

  • Page 37
    ... inc. 2009 AnnuAl REPoRt PAGE 35 the Company uses the straight-line method of recognizing compensation cost. total compensation cost charged against income for the Company's share-based compensation arrangements was $15.3, $26.4 and $25.3 for the years ended September 30, 2009, 2008 and 2007...

  • Page 38
    ... 36 EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt Notes to Consolidated Financial Statements EDollars in millions, except per share and percentage data) the following table summarizes RSE activity during the current year (shares in millions): WeightedAverage Grant Date Fair Value Shares nonvested...

  • Page 39
    EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt PAGE 37 Pension September 30, 2009 2008 2009 Postretirement 2008 change in Projected Benefit obligation Benefit obligation at beginning of year Impact of Playtex acquisition Service cost Interest cost Plan participants' contributions Actuarial loss/(...

  • Page 40
    ... 2009 AnnuAl REPoRt Notes to Consolidated Financial Statements EDollars in millions, except per share and percentage data) the following table presents pension and postretirement expense: Pension For The Years Ended September 30, 2009 2008 2007 2009 Postretirement 2008 2007 Service cost Interest...

  • Page 41
    ... pension plan account. Amounts charged to expense during fiscal 2009, 2008, and 2007 were $8.1, $8.5, and $5.6, respectively, and are reflected in SG&A and cost of products sold in the Consolidated Statements of Earnings. the increase in expense for 2008 was due primarily to the addition of Playtex...

  • Page 42
    ...Right may purchase, at the exercise price, common stock of the acquiring entity having a value equal to twice the exercise price. the Company can redeem the Rights at a price of $0.01 per Right at any time prior to the time a person or group actually acquires 20% or more of the outstanding EnR stock...

  • Page 43
    ...to accounts receivable. commodity price risk the Company uses raw materials that are subject to price volatility. At times, hedging instruments are used by the Company to reduce exposure to variability in cash flows associated with future purchases of zinc or other commodities. the fair market value...

  • Page 44
    ... the reporting entity's own assumptions or external inputs from inactive markets. under the fair value accounting guidance hierarchy, an entity is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. the following table sets forth the Company's financial...

  • Page 45
    ... october 1, 2009, the Company adopted new fair value guidance for nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. At September 30, 2009 and 2008, the fair market value of fixed rate long-term debt...

  • Page 46
    PAGE 44 EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt Notes to Consolidated Financial Statements EDollars in millions, except per share and percentage data) 17. supplemental Financial statement information the components of certain balance sheet accounts at September 30 for the years indicated are ...

  • Page 47
    ...(Battery and lighting Products) and Personal Care (Wet Shave, including Edge/Skintimate acquired in June 2009, Skin Care, Feminine Care and Infant Care). Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation costs, costs...

  • Page 48
    PAGE 46 EnErgizEr Hoedings inc. 2009 AnnuAl REPoRt Notes to Consolidated Financial Statements EDollars in millions, except per share and percentage data) 2009 2008 2007 net sales Household Products Personal Care total net sales $2,109.5 1,890.3 $3,999.8 $2,474.3 1,856.7 $4,331.0 $2,376.3 988...

  • Page 49
    ... Company's total net sales for each of the three years presented. Supplemental product information is presented below for net sales: 2009 2008 2007 net sales Alkaline batteries Carbon zinc batteries other batteries and lighting products Wet Shave Skin Care Feminine Care Infant Care total net sales...

  • Page 50
    ...at Energizer's World Headquarters, 533 Maryville university Drive, St. louis, Missouri 63141. common stock information the table below summarizes, for the fiscal quarter indicated, the reported high and low sale prices of the Company's common stock, as reported on the new York Stock Exchange. Fiscal...

  • Page 51

  • Page 52
    ... hOLdINgS, INc. 533 Maryville University drive St. Louis, Missouri 63141 314.985.2000 www.energizer.com © 2009 Energizer. Energizer, Energizer Bunny design, Eveready, Schick and other marks included in this Annual Report are trademarks of Energizer, its affiliates and its subsidiaries. playtex...