Energizer Holdings, Inc. (NYSE:ENR) Q2 2018 Earnings Conference Call Transcript

May 02, 2018 • 10:00 am ET

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Energizer Holdings, Inc. (NYSE:ENR) Q2 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning. My name is Sharon, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Energizer's Second Quarter Fiscal 2018 Conference Call.

(Operator Instructions)

As a reminder, this call is being recorded. I would now like to turn the conference over to Ms. Jackie Burwitz, Vice President, Investor Relations. Madam, you may begin your conference.

Executive
Jacqueline E. Burwitz

Good morning and thank you for joining us. During the call, we will discuss our results for the second quarter of fiscal 2018 and our outlook for the remainder of the year, and update you on our acquisition of Spectrum Brands battery and lighting product business. With me this morning are Alan Hoskins, Chief Executive Officer; Tim Gorman, Chief Financial Officer; and Mark LaVigne, Chief Operating Officer. This call is being recorded and will be available for replay via our website, energizerholdings.com. During the call, we may make statements about our expectations for future plans and financial and operating performance any such statements are forward-looking statements which reflect our current views with respect to future events. We also refer to non-GAAP financial measures. A reconciliation of non-GAAP financial measures to comparable GAAP measures is shown in the press release issued earlier today which is available in the Investor Relations section of our website, energizerholdings.com. During our prepared remarks, we will refer to the acquisition of Spectrum's global battery and portable lighting products business as the Spectrum acquisition or the acquisition of the Spectrum business.

Information concerning our category and market share discussed on this call relates to markets where we compete and are based on estimates using Energizer's internal data, data from industry analysis, and adjustments that we believe to be reasonable. Investors should review the risk factors in our Form 10-K, 10-Q and other SEC filings for a description of the key factors affecting our business. These risks may cause actual results to differ materially from our forward-looking statements. We do not undertake to update these forward-looking statements.

With that, I'd like to turn the call over to Alan.

Executive
Alan R. Hoskins

Thanks, Jackie, and good morning, everyone. In the quarter, Energizer continued to execute well and we made progress toward closing our acquisition of the Spectrum business. Planning is underway between both teams for a smooth integration as announced in our earnings release this morning, our team delivered solid results in the second quarter, continuing our momentum from the start of the year. Adjusted earnings per share of $0.45 reflects the benefits of our portfolio optimization and pricing actions around the globe, offset by ongoing investments in our continuous improvement initiatives, for which the benefits will start to materialize in the back half fiscal 2018.

Organic revenue was up 1.8% as the carryover benefits of portfolio optimization and favorable pricing were partially offset by the divestiture of ASI. Excluding the impact of the ASI divestiture, revenue grew by 2.7% on a like-for-like basis. Gross margins, excluding unusuals, declined 180 basis points versus the prior year. This was due