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What changed in EDGEWELL PERSONAL CARE Co's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of EDGEWELL PERSONAL CARE Co's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+223 added−219 removedSource: 10-K (2023-11-28) vs 10-K (2022-11-16)

Top changes in EDGEWELL PERSONAL CARE Co's 2023 10-K

223 paragraphs added · 219 removed · 173 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSeveral of Edgewell’s senior leaders attended this year’s annual meeting and have incorporated best practices into the global organization. • We continued with our commitment to the Board Diversity Action Alliance, an organization taking action to increase the representation of racially and ethnically diverse directors on corporate boards. • We have partnered with Out & Equal Workplace advocates to help LGBTQ+ people thrive and support organizations to create a culture of belonging for all. • Our Director of DEI is leading and advancing our global DEI strategy as well as supporting our Teammate Resource Groups who remain focused on celebrating Edgewell’s inclusive culture for everyone. • To continue with the bias training that was delivered to senior leadership, we have offered teammates the opportunity to attend training on mitigating bias as well as specialized training for Human Resources Business Partners on Strategic DEI partnering.
Biggest changeEdgewell seeks to maintain a Board comprised of talented and dedicated directors with a mix of experience, skills and backgrounds collectively reflecting the strategic needs of the business and the nature of the environment in which the Company operates. • We have partnered with Out & Equal Workplace advocates to support our organization as we create a culture of belonging for all and to help LGBTQ+ people thrive in the workplace. • Our Director of DEI is leading and advancing our global DEI strategy as well as supporting our Teammate Resource Groups who remain focused on influencing Edgewell’s inclusive culture for everyone. • To continue with the Mitigating Bias training that is delivered to the organization in English, we have offered training globally where teammates could attend in their local language.
Johnson & Son, Inc., adding market leading United States (“U.S.”) shave preparation brands to our existing wet shave product portfolio. In 2010, we completed the acquisition of American Safety Razor, LLC (“ASR”), a leading global manufacturer of private label and value wet shaving razors and blades and specialty blades.
Johnson & Son, Inc., adding market leading United States-based (“U.S.”) shave preparation brands to our existing wet shave product portfolio. In 2010, we completed the acquisition of American Safety Razor, LLC (“ASR”), a leading global manufacturer of private label and value wet shaving razors and blades and specialty blades.
We continually look for ways to support the global workforce, consumers and the communities we serve. We recruit the best people for the job regardless of gender, ethnicity or other protected traits and it is our policy to comply fully with all domestic, foreign and local laws relating to discrimination in the workplace.
We continually look for ways to support the global workforce, our consumers, and the communities we serve. We recruit the best people for the job regardless of gender, race, ethnicity or other protected traits and it is our policy to comply fully with all domestic, foreign, and local laws relating to discrimination in the workplace.
In 2022, we completed the acquisition of Billie, adding the growing woman’s brand to our portfolio of products. Billie’s strong direct-to-consumer and digital capabilities have underpinned its strong growth, which positioned the brand well for its initial expansion into U.S. brick-and-mortar in 2022.
In fiscal 2022, we completed the acquisition of Billie, adding the growing woman’s brand to our portfolio of products. Billie’s strong direct-to-consumer and digital capabilities have underpinned its strong growth, which positioned the brand well for its initial expansion into U.S. brick-and-mortar in 2022.
O’Toole was General Manager of Walmart’s Sporting Goods e-commerce division. Mr. O’Toole had joined e-commerce startup Jet.com in early 2016 prior to Jet.com’s acquisition by Walmart. Earlier in his career, he held various positions at the Groupe Danone from 2003 to 2016 including President Danone Waters of America, SVP Sales and VP Business Development, The Dannon Company.
O’Toole was General Manager of Walmart’s Sporting Goods e-commerce division. Mr. O’Toole had joined e-commerce startup Jet.com in early 2016 prior to Jet.com’s acquisition by Walmart. Earlier in his career, he held various positions at the Groupe Danone from 2003 to 2016 including President Danone Waters of America, SVP Sales and VP Business Development, The Dannon Company. Robert A.
Our goal is to support our People Managers in taking accountability for their results and to empower them to make changes at a local level to improve the employee experience. 9 Executive Officers Set forth below are the names and ages as of September 30, 2022, and current positions of our executive officers. Name Age Title Rod R.
Our goal is to support our People Managers in taking accountability for their results and to empower them to make changes at a local level to improve the employee experience. 9 Executive Officers Set forth below are the names and ages as of September 30, 2023, and current positions of our executive officers. Name Age Title Rod R.
Our foundational values of “People first,” “Move forward,” “Listen up and speak up” and “Own it together” support a culture of celebration, agility, authenticity, and collaboration. This culture promotes trust and teamwork, which results in bold and aggressive goals, smart risks, and an environment where innovation and ideation thrive.
We believe our foundational values of “People First,” “Move Forward,” “Listen Up and Speak Up” and “Own It Together” support a culture of celebration, agility, authenticity, and collaboration. This culture promotes trust and teamwork, which results in bold and aggressive goals, smart risks, and an environment where innovation and ideation thrive.
During the years that followed, we implemented a strategy of acquiring several personal care brands, which created the foundation for the company we are today. In 2003, we completed the acquisition of the Schick-Wilkinson Sword business (“SWS”) from Pfizer, Inc., which was the second largest manufacturer and marketer of men’s and women’s wet shave products in the world.
During the years that followed, we implemented a strategy of acquiring several personal care brands, which created the foundation for the company we are today. In 2003, we completed the acquisition of the Schick-Wilkinson Sword business (“SWS”) from Pfizer, Inc., the second largest manufacturer and marketer of men’s and women’s wet shave products in the world at that time.
We also compete with newer entrants to the Wet Shave market for both direct-to-consumer online and traditional retail shelf space including Unilever (Dollar Shave Club brand), Harry's, Perio (Barbasol and PureSilk brands), Beiersdorf (Nivea branded women’s wet shave product in Germany) and numerous other online start-ups.
We also compete with newer entrants to the Wet Shave market for both DTC online and traditional retail shelf space including Unilever (Dollar Shave Club brand), Harry's, Perio (Barbasol and PureSilk brands), Beiersdorf (Nivea branded women’s wet shave product in Germany) and numerous other online start-ups.
Since launch, we have seen over 55,000 recognition moments. Employee Wellness The wellness of our people remains a primary focus and we believe that the most productive people are those who are at their best, both physically and mentally.
Since launch, we have seen over 100,000 recognition moments. Employee Wellness and Safety The wellness of our people remains a primary focus and we believe that the most productive people are those who are at their best, both physically and mentally.
Certain of our employees are represented by unions or works councils. We have cultivated a culture that is centered around our guiding purpose of Making Useful Things Joyful, supported by a set of values and behaviors that guide organizational actions and decisions, underpinned by a focus on diversity, equity, and inclusion.
Certain of our employees outside of the U.S. are represented by unions or works councils. We have cultivated a culture that is centered around our guiding purpose of Making Useful Things Joyful, supported by a set of values and behaviors that guide organizational actions and decisions, underpinned by a focus on diversity, equity, and inclusion.
Unveiled in 2020, Sustainable Care 2030 includes clear commitments and targets across our brands, operations and supply chain, as well as our workforce and communities.
Unveiled in 2020, our Sustainable Care 2030 strategy includes clear targets across our brands, operations and supply chain, as well as our workforce and communities.
Little also served for five years in the United States Air Force prior to joining Procter & Gamble in 1997. Daniel J. Sullivan has served as Chief Financial Officer since April 1, 2019 and effective October 1, 2022 Dan will also serve as the President, Europe and Latin America. Prior to joining Edgewell, Mr.
Little also served for five years in the United States Air Force prior to joining Procter & Gamble in 1997. Daniel J. Sullivan has served as Chief Financial Officer since April 1, 2019, and effective October 1, 2022 Mr. Sullivan also serves as President, Europe and Latin America. Prior to joining Edgewell, Mr.
As a result of increased competition through the expansion of online markets, we have established e-commerce operations across several business lines, including global Schick.com websites providing men’s and women’s shaving products, Bulldog direct to consumer sites, Jack Black direct to consumer sites, an acceleration of e-commerce sales in China through our partnership with T-Mall and the addition of Billie.
As a result of increased competition through the expansion of online markets, we have established e-commerce operations across several business lines, including global Schick.com websites providing men’s and women’s shaving products, Bulldog, Jack Black and Billie DTC sites, an acceleration of e-commerce sales in China through our partnership with T-Mall.
Feminine Care In Feminine Care, we market products under the Playtex, Stayfree, Carefree and o.b. brands. We offer tampons under the Playtex Gentle Glide® 360°®, Playtex Sport®, Playtex and o.b. brands, including the Playtex Sport compact tampon launched in 2017. We also market pads and liners under the Stayfree and Carefree brands.
We offer tampons under the Playtex Gentle Glide® 360°®, Playtex Sport®, Playtex and o.b. brands, including the Playtex Sport compact tampon launched in 2017. We also market pads and liners under the Stayfree and Carefree brands.
We continue to reinforce our foundational values through several key initiatives: • Our performance management process provides for increased accountability to model our values by incorporating a ‘360-degree Values Assessment’ that evaluates each employee’s performance not only on the results achieved, but on how they achieve them. • In 2021, we launched an internal recognition platform, InspireJOY, to recognize those exhibiting our values through recognition awards from managers and peers.
We continue to reinforce our foundational values through several key initiatives: • Our performance management process provides for increased accountability to model our values by incorporating a ‘360-degree Values Assessment’ that evaluates each employee’s performance not only on the results achieved, but on how they achieve them. • In 2021, we launched an internal global recognition and service anniversary platform, InspireJOY, an online tool used to recognize service milestones and for those exhibiting our values through recognition awards from managers and peers.
As of September 30, 2022, we owned, either directly or beneficially, approximately 412 unexpired U.S. patents, which have a range of expiration dates from October 2022 to February 2040, and we had approximately 57 pending U.S. patent applications. We routinely prepare additional patent applications for filing in the U.S. and actively pursue foreign patent protection in various countries.
As of September 30, 2023, we owned, either directly or beneficially, approximately 370 unexpired U.S. patents, which have a range of expiration dates from October 2023 to February 2040, and we had approximately 55 pending U.S. patent applications. We routinely prepare additional patent applications for filing in the U.S. and actively pursue foreign patent protection in various countries.
We continually monitor employee retention rates and believe our progressive human resources policies, learning and development, talent management, workplace health and safety, and community engagement and support activities enable us to attract and retain key personnel. 8 Diversity, Equity and Inclusion We are committed to our continued efforts to create a work environment where every individual feels respected, connected, valued and empowered in our work environment.
We continually monitor employee retention rates and believe our progressive human resources 8 policies, learning and development, talent management, workplace health and safety, and community engagement and support activities enable us to attract and retain key personnel. Diversity, Equity and Inclusion We remain committed to creating a work environment where every individual feels respected, connected, valued, and empowered.
Our employees have access to several programs related to employee wellness including onsite wellness testing and education; mental and emotional health awareness and support; and work-life balance through flextime, remote and hybrid working arrangements and parental leave, among others.
Our employees have access to several programs related to employee wellness including onsite biometric screening; cancer screening; weight loss programs and education; mental and emotional health awareness and support; and work-life balance through flextime, remote and hybrid working arrangements and parental leave, among others.
Human Capital Employee Profile At Edgewell, we are committed first and foremost to people: our employees, the consumers who use our products, the suppliers and retailers who partner with us, and the communities in which we operate. As of September 30, 2022, we had approximately 7,000 employees, with 2,100 based in the United States.
Human Capital Employee Profile At Edgewell, we are committed first and foremost to people: our employees, the consumers who use our products, the suppliers and retailers who partner with us, and the communities in which we operate. As of September 30, 2023, we had approximately 6,800 employees, with 2,200 based in the United States.
Our diversity, equity and inclusion (“DEI”) principles are also reflected in our values and behaviors, and in particular with respect to our policies against harassment or bullying. We continue to enhance our DEI policies to value all individuals who make up our teams.
Our diversity, equity, and inclusion (“DEI”) principles are also reflected in our values and behaviors, and in particular with our policies against harassment or bullying. We will continue to evolve our DEI policies to support all individuals who make up our teams.
Wet Shave Wet Shave products are sold under the Schick®, Wilkinson Sword®, Edge, Skintimate®, Billie®, Shave Guard and Personna® brand names. We manufacture and distribute Schick and Wilkinson Sword razor systems, composed of razor handles and refillable blades, and disposable shave products for men and women.
Wet Shave Wet Shave products are sold under the Schick®, Wilkinson Sword®, Edge, Skintimate®, Billie®, Shave Guard and our custom brands group (formerly sold under our Shave Guard and Personna® brands). We manufacture and distribute Schick and Wilkinson Sword razor systems, composed of razor handles and refillable blades, and disposable shave products for men and women.
Walmart accounted for approximately 22% of our net sales in fiscal 2022. Purchases by Walmart included products from all of our segments. Target Corporation represented approximately 11% of net sales for our Sun and Skin Care segment and 11% for our Feminine Care segment, respectively. Generally, orders are shipped within a month of their order date.
Walmart accounted for approximately 19.4% of our net sales in fiscal 2023. Purchases by Walmart included products from all of our segments. Target Corporation represented approximately 9.4% of net sales for our Sun and Skin Care segment and 10.0% for our Feminine Care segment, respectively. Generally, orders are shipped within a month of their order date.
As of September 30, 2022, we owned, either directly or beneficially, approximately1,120 foreign patents, having a range of expiration dates from October 2022 to August 2046, and we had approximately 114 pending patent applications in foreign countries. We rely on trademark, trade secret, patent and copyright laws to protect our intellectual property rights.
As of September 30, 2023, we owned, either directly or beneficially, approximately 1,187 foreign patents, having a range of expiration dates from October 2023 to August 2048, and we had approximately 125 pending patent applications in foreign countries. We rely on trademark, trade secret, patent and copyright laws to protect our intellectual property rights.
Each year, we conduct an anonymous employee experience survey to gauge our progress and identify the areas in the employee experience where we excel and areas for improvement. For the survey conducted in June 2022, our overall positivity score was 74% with 5,332 employees interacting with the survey.
Each year, we conduct an anonymous employee experience survey to gauge our progress and identify the areas in the employee experience where we excel and areas for improvement. For the survey conducted in June 2023, our overall positivity score was 76% with 6,186 employees interacting with the survey.
Mr. Little previously served as our Chief Financial Officer beginning in March 2018. Prior to joining Edgewell, Mr. Little served as Chief Financial Officer of HSNi from January 2017 to December 2017, and as Executive Vice President and Chief Financial Officer of Elizabeth Arden, Inc. from April 2014 to November 2016. Prior to joining Elizabeth Arden, Mr.
Little served as Chief Financial Officer of HSNi from January 2017 to December 2017, and as Executive Vice President and Chief Financial Officer of Elizabeth Arden, Inc. from April 2014 to November 2016. Prior to joining Elizabeth Arden, Mr.
During 2022, we advanced our focus on DEI through many specific actions including: • Our CEO continued his commitment through the CEO Action for Diversity & Inclusion™, a coalition uniting business leaders to advance DEI in the workplace through education, training, dialogue and action.
During 2023, we advanced our focus on DEI through many specific actions including: • Our CEO continued his commitment through the CEO Action for Diversity & Inclusion™, a coalition uniting business leaders to advance DEI in the workplace through education, training, dialogue and action. • We continue with our commitment to a diverse and inclusive Board of Directors.
We have acquired a portfolio of men’s grooming skin care products that have grown under our direction. Our Bulldog skincare products are purpose-built for men and were created to work simply and efficiently while dealing with issues specific to men’s skin. Since acquiring Bulldog, we have expanded sales geographically and are committed to further growth and distribution for the brand.
We have acquired a portfolio of men’s grooming skin care products that have grown under our direction. Our Bulldog skincare products are purpose-built for men and were created to work simply and efficiently while dealing with issues specific to men’s skin.
These 2030 targets include (i) 100% renewable electricity and carbon neutrality across our global operations; (ii) reducing use of virgin petroleum-based plastic content in products and packaging; (iii) using 100% recyclable, compostable or reusable plastic packaging; (iv) reducing waste by 10% and pursuing zero waste to landfill across production facilities; and (v) driving a sustainability culture by ensuring each global location has a sustainability program to take action on localized efforts.
These 2030 targets include (i) 100% renewable electricity use and carbon neutrality across our global operations; (ii) reducing use of virgin petroleum-based plastic content in products and packaging; (iii) using 100% recyclable, compostable or reusable plastic packaging; and (iv) reducing waste by 10% and pursuing zero waste to landfill across production facilities.
On March 1, 2018, we completed the acquisition of Jack Black, L.L.C. (“Jack Black”), a men’s luxury skincare company based in the U.S.
On March 1, 2018, we completed the acquisition of Jack Black, L.L.C. (“Jack Black”), a men’s luxury skincare company based in the U.S. On September 2, 2020, we completed the acquisition of Cremo Holding Company, LLC (“Cremo”), a U.S.-based masstige men’s grooming brand.
Overall, DEI is an important part of our sustainability strategy with a focus on sustaining the safety and well-being of our employees, the people who use our products, the partners with whom we work and the communities we serve.
In addition, we provide opportunities for our teammates to receive mini lessons on issues that are important to them. Overall, DEI is an important part of our sustainability strategy with a focus on sustaining the safety and well-being of our employees, the people who use our products, the partners with whom we work and the communities we serve.
Additional information related to our social impact and sustainability matters can be found at www.edgewell.com/pages/sustainability. The information contained on, or that may be accessed through, our website, is not part of, and not incorporated into, this Annual Report on Form 10-K.
The information contained on, or that may be accessed through, our website, is not part of, and not incorporated into, this Annual Report on Form 10-K.
These more recent acquisitions have created opportunities to expand our personal care portfolio into the growing, global grooming category, and have allowed us to leverage our international geographic footprint. On November 29, 2021, we completed the acquisition of Billie, strengthening our women’s Wet Shave product portfolio.
These more recent acquisitions have created opportunities to expand our personal care portfolio into the growing, global grooming category, and have allowed us to leverage our international geographic footprint. 3 Our Business Segments and Product Strategies We manage our business in three operating segments: Wet Shave, Sun and Skin Care, and Feminine Care.
We are making significant progress on our goals, including in priority areas such as sustainable products and packaging, alternative materials innovation, ingredient stewardship and transparency, responsible sourcing, and embracing diversity, equity, and inclusion across the organization, among others. However, there is no guarantee that we will achieve our environmental sustainability priorities in whole or in part on or before 2030.
We are making significant progress on our goals, including in priority areas such as sustainable products and packaging, ingredient stewardship and transparency, responsible sourcing, reducing waste, protecting the health and safety of our teammates, and embracing diversity, equity, and inclusion across the organization, among others.
Additionally, we continue to monitor the Novel Coronavirus 2019 (“COVID-19”) infection rates at all our locations and implement protocols such as the use of masks, when necessary, in order to protect our employees. Ensuring a positive, purposeful working experience for our employees that is reflective of our purpose and values is central to our business operations.
As we face new variants, we continue to monitor the Novel Coronavirus 2019 (“COVID-19”) infection rates at all our locations and implement protocols such as the use of masks, when necessary, in order to protect our employees. We believe that developing and maintaining a strong safety culture in one of the major keys to our continued success.
Little 53 Chief Executive Officer Daniel J. Sullivan 53 Chief Financial Officer, President Europe and Latin America Paul R. Hibbert 53 Chief Supply Chain Officer John N.
Little 54 Chief Executive Officer Daniel J. Sullivan 54 Chief Financial Officer, President Europe and Latin America Paul R. Hibbert 54 Chief Supply Chain Officer John N. Hill 60 Chief Human Resources Officer LaTanya Langley 48 Chief Legal Officer and Corporate Secretary Eric O’Toole 56 President, North America Robert A.
Hill 59 Chief Human Resources Officer LaTanya Langley 47 Chief Legal Officer and Corporate Secretary Eric O’Toole 55 President, North America Nick Powell 55 President, International Set forth below is a brief description of the position and business experience of each of our executive officers. Rod R. Little has served as President and Chief Executive Officer since March 1, 2019.
Schmidt 46 Chief Accounting Officer Set forth below is a brief description of the position and business experience of each of our executive officers. Rod R. Little has served as President and Chief Executive Officer since March 1, 2019. Mr. Little previously served as our Chief Financial Officer beginning in March 2018. Prior to joining Edgewell, Mr.
Prior to this experience, he was also Area Business Director and Managing Director for Energizer Holdings and Schick-Wilkinson Sword. 10 Available Information Our website address is www.edgewell.com. We are not including the information contained on our website as part of, or incorporating it by reference into, this filing.
Schmidt spent the early part of his career in public accounting with PricewaterhouseCoopers LLP and is a certified public accountant. 10 Available Information Our website address is www.edgewell.com. We are not including the information contained on our website as part of, or incorporating it by reference into, this filing.
We acquired the Jack Black brand and obtained a footprint in the luxury men’s skincare market and continue to use resources at our disposal to grow the Jack Black brand globally. Our Cremo products compete in the masstige category for men’s grooming, and that offers a complete line of “barber quality” beard, hair and skin care products.
Since acquiring Bulldog, we have expanded sales geographically and we continue to commit resources to further growth and distribution for the brand. We acquired the Jack Black brand and obtained a footprint in the luxury men’s skincare market and continue to use resources at our disposal to grow the Jack Black brand globally.
We believe that our facilities and products are in substantial compliance with current laws and regulations. 7 Sustainability Edgewell’s Sustainable Care 2030 program is our ambitious strategy that we believe will enable us to sustain and grow our business while inspiring a world where the joy of caring for yourself is balanced with caring for our shared planet and society.
We believe that our facilities and products are in substantial compliance with current applicable laws and regulations. 7 Sustainability Edgewell’s Sustainable Care 2030 strategy provides a roadmap for delivering on our ambitions and guides us to ensure that we are a successful and responsible business not just today, but for generations to come.
Removed
On September 2, 2020, we completed the acquisition of Cremo Holding Company, LLC (“Cremo”), one of the strongest and fastest growing masstige men’s grooming brands, offering a complete line of beard, hair, body wash, shave prep and skin care products.
Added
On November 29, 2021, we completed the acquisition of Billie, a high-quality shaving and premium body care brand which strengthens our women’s Wet Shave and grooming product portfolio (the “Billie Acquisition”).
Removed
Billie is a fast growing, digitally native, omni-channel brand focused on providing women with high-quality shaving and premium body care products. 3 Our Business Segments and Product Strategies We manage our business in three operating segments: Wet Shave, Sun and Skin Care, and Feminine Care.
Added
Our Cremo products compete in the masstige category for men’s grooming, and offer a complete line of “barber quality” beard, hair and skin care products. Feminine Care In Feminine Care, we market products under the Playtex, Stayfree, Carefree and o.b. brands.
Removed
This was an increase of 3% in overall positivity score from 2021 with an 8% increase in employee participation. Global actions we implemented in the fiscal year 2022 include: • Developed a new program called Impactful Feedback.
Added
However, there is no guarantee that we will achieve our environmental sustainability priorities in whole or in part on or before 2030. Additional information related to our social and environmental sustainability matters can be found at www.edgewell.com/pages/sustainability.
Removed
This program is for all employees and provides a framework and structure around giving constructive feedback with the training objective to provide more robust and meaningful feedback to others. Approximately 71% of our global salaried workforce have participated. • Introduced a newer version of the career map document and support tools for all teammates globally.
Added
To this end, in fiscal 2023, we implemented a multi-year objective for all sites to achieve either OSHA VPP (US sites) or ISO 45001 (Safety & Health Management Systems). Additionally, facilities have continued an existing machine safety program and assessment initiative, including completing any remaining assessments and implementing fixes for identified items.
Removed
This program has created a shared responsibility between employees, their direct reports and the organization to identify and provide teammates with personal and professional growth opportunities. • Enhanced our ways of working to help manage workload and fatigue through a commitment to a team-based approach using team agreements for our new hybrid ways of working. • Began to focus on supporting our People Managers with tools and training to lead with empathy which will continue in fiscal year 2023.
Added
Finally, our manufacturing sites have revitalized their “Alive and Well” program and initiatives over the last year with some facilities rolling the program out to other levels in their organization. Ensuring a positive, purposeful working experience for our employees that is reflective of our purpose and values is central to our business operations.
Removed
Nick Powell served as President, International from June 1, 2020 until September 30, 2022. Mr. Powell had previously served as VP Europe and Latin America from April 2018 through May 2020; VP Europe, Middle East and Africa from 2017 through 2018; and VP North Europe from 2015 to 2017.
Added
For 2023, we updated and revised our questions along with leveraging a new survey tool. When comparing to 2022, there was an increase of 15% in employee participation and slight improvement in positivity.
Added
Global Actions that were implemented in the fiscal year 2023 focused on helping employees with prioritization and included: • Brought awareness to the Global Leadership Team (GLT) Goal Alignment process during the Continuous Performance cycle where part of the process included agreement on Enterprise priorities that performance goals will be developed against.
Added
This is meant to gain alignment and prioritization around initiatives and be focused on where we will spend our time. • Assisted People Managers with support material and direction to help prioritization work through discussions at Continuous Performance Quarterly Check-ins. • Reintroduced our ‘How We Meet’Ways of Working toolkit with an emphasis on meeting protocols.
Added
Schmidt has served as Chief Accounting Officer since January 16, 2023. Prior to joining Edgewell, Mr. Schmidt was Chief Accounting Officer of ADC Therapeutics SA, a publicly traded commercial-stage biotechnology company. Prior to his current role, Mr.
Added
Schmidt served as Chief Accounting Officer at Newell Brands, Inc. from March 2019 to August 2020 and as Assistant Corporate Controller at Celgene Corporation from 2016 to 2019. Previously, he held roles of increasing responsibility in the finance organization at Tyco International including Vice President and Controller, Assistant Controller, and Senior Director of External Reporting. Mr.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe execution of cost savings initiatives may present a number of significant risks, including: • actual or perceived disruption of service or reduction in service standards to customers; • the failure to preserve adequate internal controls as we restructure our general and administrative functions, including our information technology and financial reporting infrastructure; • the failure to preserve supplier relationships and distribution, sales and other important relationships and to resolve conflicts that may arise; • loss of sales as we reduce or eliminate staffing on non-core product lines; • diversion of management attention from ongoing business activities; and 15 • the failure to maintain employee morale and retain key employees while implementing benefit changes and reductions in the workforce.
Biggest changeThe execution of cost savings initiatives may present a number of significant risks, including: • actual or perceived disruption of service or reduction in service standards to customers; • the failure to preserve adequate internal controls as we restructure our general and administrative functions, including our information technology and financial reporting infrastructure; • the failure to preserve supplier relationships and distribution, sales and other important relationships and to resolve conflicts that may arise; • loss of sales as we reduce or eliminate staffing on non-core product lines; • diversion of management attention from ongoing business activities; • the failure to maintain employee morale and retain key employees while implementing benefit changes and reductions in the workforce; and • identification of potential synergies in our manufacturing footprint Because of these and other factors, we cannot predict whether we will realize the purpose and anticipated benefits of these initiatives and, if we do not, our business and results of operations may be adversely affected.
Consequently, we are subject to a number of risks associated with doing business in foreign countries, including: • sourcing of raw materials from around the world; • reliance on China to source, manufacture, and transport materials and goods; • delays in transportation of goods when shipping globally; • economic conditions impact availability and capacity of key vendors; • the possibility of expropriation, confiscatory taxation or price controls; • the ability to repatriate foreign-based cash effectively for strategic needs in the U.S., as well as the heightened counterparty, internal control and country-specific risks associated with holding cash overseas; • the effect of foreign income taxes, value-added taxes and withholding taxes, including the inability to recover amounts owed to us by a government authority without extended proceedings or at all; • the effect of the U.S. tax treatment of foreign source income and losses, and other restrictions on the flow of capital between countries; • adverse changes in local investment or exchange control regulations; • restrictions on and taxation of international imports and exports; • legal and regulatory constraints, including tariffs and other trade barriers; • currency fluctuations, including the impact of hyper-inflationary conditions, particularly where exchange controls limit or eliminate our ability to convert from local currency; • political or economic instability, government nationalization of business or industries, government corruption and civil unrest, including political or economic instability; and • difficulty in enforcing contractual and intellectual property rights.
Consequently, we are subject to a number of risks associated with doing business in foreign countries, including: • sourcing of raw materials from around the world; • reliance on China to source, manufacture, and transport materials and goods; • delays in transportation of goods when shipping globally; • economic conditions impact availability and capacity of key vendors; 15 • the possibility of expropriation, confiscatory taxation or price controls; • the ability to repatriate foreign-based cash effectively for strategic needs in the U.S., as well as the heightened counterparty, internal control and country-specific risks associated with holding cash overseas; • the effect of foreign income taxes, value-added taxes and withholding taxes, including the inability to recover amounts owed to us by a government authority without extended proceedings or at all; • the effect of the U.S. tax treatment of foreign source income and losses, and other restrictions on the flow of capital between countries; • adverse changes in local investment or exchange control regulations; • restrictions on and taxation of international imports and exports; • legal and regulatory constraints, including tariffs and other trade barriers; • currency fluctuations, including the impact of hyper-inflationary conditions, particularly where exchange controls limit or eliminate our ability to convert from local currency; • political or economic instability, government nationalization of business or industries, government corruption and civil unrest, including political or economic instability; and • difficulty in enforcing contractual and intellectual property rights.
Our ability to compete effectively may be affected by a number of factors, including: • several of our competitors, including The Procter & Gamble Company, Unilever, Johnson & Johnson and others, may have substantially greater financial, marketing, research and development and other resources and greater market share in certain segments than we do, which could provide them with greater scale and negotiating leverage with retailers and suppliers, and other competitors are newer companies backed by private-equity investors with the goal of expanding revenue instead of profitability; • our competitors may have lower production, sales and distribution costs, and higher profit margins, which may enable them to offer aggressive retail discounts and other promotional incentives; • our competitors may be able to obtain exclusive distribution rights at particular retailers or favorable in-store placement; • our retailers could reduce inventories, shift to different products, or require us to lower our prices to retain shelf placement of our products; and • we may lose market share to private label brands sold by retail chains, or to price brands sold by local and regional competitors, which, in each case, are typically sold at lower prices than our products.
Our ability to compete effectively may be affected by a number of factors, including: • several of our competitors, including The Procter & Gamble Company, Unilever, Johnson & Johnson and others, may have substantially greater financial, marketing, research and development and other resources and greater market share in certain segments than we do, which could provide them with greater scale and negotiating leverage with retailers 11 and suppliers, and other competitors are newer companies backed by private-equity investors with the goal of expanding revenue instead of profitability; • our competitors may have lower production, sales and distribution costs, and higher profit margins, which may enable them to offer aggressive retail discounts and other promotional incentives; • our competitors may be able to obtain exclusive distribution rights at particular retailers or favorable in-store placement; • our retailers could reduce inventories, shift to different products, or require us to lower our prices to retain shelf placement of our products; and • we may lose market share to private label brands sold by retail chains, or to price brands sold by local and regional competitors, which, in each case, are typically sold at lower prices than our products.
In addition, our employees frequently access our suppliers’ and customers’ systems and we may be liable if our employees are the 14 source of any breaches in these third-party systems. It could also damage our reputation with retailer customers and consumers and diminish the strength and reputation of our brands or require us to pay monetary penalties.
In addition, our employees frequently access our suppliers’ and customers’ systems and we may be liable if our employees are the source of any breaches in these third-party systems. It could also damage our reputation with retailer customers and consumers and diminish the strength and reputation of our brands or require us to pay monetary penalties.
Our access to capital markets to raise funds through the sale of debt or equity securities is subject to various factors, including general economic and financial market conditions. Significant reduction in market liquidity conditions could impact access to funding and increase associated funding costs, which could reduce our earnings and cash flows.
Our access to capital markets to raise funds through the sale of debt or equity securities is subject to various factors, including general economic and financial market conditions. Significant reduction in market liquidity conditions could impact access to funding and increase associated borrowing costs, which could reduce our earnings and cash flows.
However, we may not be able to identify and successfully negotiate suitable strategic acquisitions at attractive valuations, obtain financing for future acquisitions on satisfactory terms or otherwise complete future acquisitions. Our reduced size relative to other companies in our industry may make completing desirable acquisitions more challenging.
However, we may not be able to identify and successfully negotiate suitable strategic acquisitions at attractive valuations, obtain financing for future acquisitions on satisfactory terms or otherwise complete future acquisitions. Our size relative to other companies in our industry may make completing desirable acquisitions more challenging.
Changes in the policies of our retailer customers and increasing dependence on key retailer customers in developed markets may adversely affect our business. In recent years, retailer consolidation both in the U.S. and internationally has increased.
Changes in the policies of our retailer customers and increasing dependence on key retailer customers in developed markets may adversely affect our business. 14 In recent years, retailer consolidation both in the U.S. and internationally has increased.
We maintain product liability insurance, but this insurance does not cover all types of claims, particularly claims other than those involving personal injury or property damage or claims that exceed the amount of insurance coverage. Further, we may not be able to maintain such insurance in sufficient amounts, on desirable terms, or at all, in the future.
Although we maintain product liability insurance, this insurance does not cover all types of claims, particularly claims other than those involving personal injury or property damage or claims that exceed the amount of insurance coverage. Further, we may not be able to maintain such insurance in sufficient amounts, on desirable terms, or at all, in the future.
We have a substantial level of indebtedness and are subject to various covenants relating to such indebtedness, which could limit our discretion to operate and grow our business. As of September 30, 2022, our debt level was approximately $1.4 billion.
We have a substantial level of indebtedness and are subject to various covenants relating to such indebtedness, which could limit our discretion to operate and grow our business. As of September 30, 2023, our debt level was approximately $1.4 billion.
Additionally, if claims made in our marketing campaigns become subject to litigation alleging false advertising, it could damage our brand, cause us to alter our marketing plans in ways that may materially and adversely affect sales, or result in the imposition of significant damages against us.
Additionally, if claims made in our marketing campaigns become subject to litigation alleging false advertising, it could damage one or several of our brands, cause us to alter our marketing plans in ways that may materially and adversely affect sales, or result in the imposition of significant damages against us.
There is an increased focus from certain investors, customers, consumers, employees, and other stakeholders concerning corporate citizenship and sustainability matters. From time to time, we announce certain initiatives, including goals, regarding our focus areas, which include environmental matters, packaging, responsible sourcing, social investments and diversity, equity and inclusion.
Our business could be negatively impacted by corporate citizenship and sustainability matters. There is an increased focus from certain investors, customers, consumers, employees, and other stakeholders concerning corporate citizenship and sustainability matters. From time to time, we announce certain initiatives, including goals, regarding our focus areas, which include environmental matters, packaging, responsible sourcing, social investments and diversity, equity and inclusion.
Business and Operational Risk Factors Loss of any of our principal customers could significantly decrease our sales and profitability. Walmart, together with its subsidiaries, is our largest customer, accounting for approximately 22% of our net sales in fiscal 2022.
Business and Operational Risk Factors Loss of any of our principal customers could significantly decrease our sales and profitability. Walmart, together with its subsidiaries, is our largest customer, accounting for approximately 19.4% of our net sales in fiscal 2023.
The breach of any of these covenants could result in a default under the Revolving Credit Facility.
The breach of any of these covenants could result in a default under the Revolving Credit Facility, as defined below.
While the pension benefit earned to date by active participants under our legacy U.S. pension plan was frozen effective January 1, 2014, and retirement service benefits no longer accrue under this retirement program, our pension obligations are expected to remain significant.
While the pension benefit earned to date by active participants under our legacy U.S. pension plan was frozen effective January 1, 2014, and retirement service benefits no longer accrue under this retirement program, and in 2023, under our Canadian defined benefit pension plan, we derecognized the assets and projected benefit obligation, our pension obligations are expected to remain significant.
Our businesses are subject to taxation in the U.S. and multiple foreign jurisdictions. The impact of any legislative tax law, policy or regulation changes by federal, state, local and foreign authorities may result in additional tax liabilities which could adversely impact our cash flows and results of operations.
The impact of any legislative tax law, policy or regulation changes by federal, state, local and foreign authorities may result in additional tax liabilities which could adversely impact our cash flows and results of operations. Significant estimation and judgment are required in determining our provisions for taxes in the U.S. and jurisdictions outside the U.S.
We may experience losses or be subject to increased funding and expenses related to our pension plans. The funding obligations for our pension plans are impacted by the performance of the financial markets, interest rates and governmental regulations.
We may experience losses or be subject to increased funding and expenses related to our pension plans. The Company has several defined benefit pension plans covering employees in the U.S. and certain employees in other countries. The funding obligations for our pension plans are impacted by the performance of the financial markets, interest rates and governmental regulations.
A downgrade to our credit ratings could increase our interest rates, limit our access to public debt markets, limit the institutions willing to provide us credit facilities, result in more restrictive credit arrangements and make any future credit facilities or credit facility amendments more costly and difficult to obtain.
A downgrade to our credit ratings could have a material impact on our business, including increasing our interest rates, limiting our access to public debt markets, limiting the institutions willing to provide us credit facilities, more restrictive credit arrangements and making any future credit facilities or credit facility amendments more costly and difficult to obtain.
As new laws and regulations are introduced, we could become subject to additional environmental liabilities in the future that could cause a material adverse effect on our results of operations or financial condition. 12 Our Company may be named a party to legal proceedings that can result in significant expenses, fines and reputational damage.
As new laws and regulations are introduced, we could become subject to additional environmental liabilities in the future that could cause a material adverse effect on our results of operations or financial condition.
Litigation, in general, and class action and multi-district litigation, in particular, can be expensive and disruptive. Some of these matters may include large numbers of plaintiffs, may involve parties seeking large or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years.
Some of these matters may include large numbers of plaintiffs, may involve parties seeking large or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years.
Our failure to make scheduled interest payments or to repay or refinance the indebtedness at maturity or obtain additional financing as needed could have a material adverse effect on our business. Additionally, certain of our debt instruments are subject to certain financial and other covenants, including debt ratio tests.
Our failure to make scheduled interest payments or to repay or refinance the indebtedness at maturity or obtain additional financing as needed could have a material adverse effect on our business.
In the ordinary course of business, the Company and its subsidiaries are subject to numerous claims and lawsuits involving various issues such as patent disputes, product liability claims and claims that our product manufacturing, sales, and marketing practices violate various consumer protection laws both in the United States and internationally.
In the ordinary course of business, the Company and its subsidiaries are subject to numerous claims and lawsuits involving various issues such as patent disputes, current and historical product liability claims; claims that our product manufacturing, sales, and marketing practices violate various consumer protection laws both in the U.S. and internationally; and claims arising out of alleged defects in our products, including property damage, bodily injury or other adverse effects.
Competition for such personnel is intense, and there can be no assurance that we can retain and motivate our key employees or attract and retain other highly qualified personnel in the future.
Competition for such personnel is intense, and there can be no assurance that we can retain and motivate our key employees or attract and retain other highly qualified personnel in the future. Competition in our industries may hinder our ability to execute our business strategy, achieve profitability, or maintain relationships with existing customers.
Information Technology and Systems A failure of a key information technology system or a breach of our information security could adversely impact our ability to conduct business. We rely extensively on information technology systems in order to conduct business, including some that are managed by third-party service providers.
We rely extensively on information technology systems in order to conduct business, including some that are managed by third-party service providers.
In addition, international tax reform remains a priority with the Organization for Economic Cooperation and Development’s Action Plan on Base Erosion & Profit Shifting and other proposed foreign jurisdictional tax law changes. Given the uncertainty of the possible changes and their potential interdependency, we are unable to determine the net consolidated impact of changes in global tax legislation, if any.
In addition, international tax reform remains a priority with the Organization for Economic Cooperation and Development’s Action Plan on Base Erosion & Profit Shifting and other proposed foreign jurisdictional tax law changes.
Significant estimation and judgment are required in determining our provisions for taxes in the U.S. and jurisdictions outside the U.S. In the ordinary course of our business, there are transactions and calculations in which the ultimate tax determination is uncertain.
In the ordinary course of our business, there are transactions and calculations in which the ultimate tax determination is uncertain.
Product recalls or product liability claims, and any subsequent remedial actions, could have a material adverse effect on our business, reputation, brand value, results of operations and financial condition. Our business could be negatively impacted by corporate citizenship and sustainability matters.
Product recalls or product liability claims, and any subsequent remedial actions, could have a material adverse effect on our business, reputation, brand value, results of operations and financial condition. 12 Litigation, in general, and class action and multi-district litigation, in particular, can be expensive and disruptive.
Our businesses are conducted on a worldwide basis, with nearly 40% of our net sales in fiscal 2022 originating outside the U.S., and a significant portion of our production capacity and cash are located overseas.
We are subject to risks related to our international operations, including currency fluctuations, which could adversely affect our results of operations. Our businesses are conducted on a worldwide basis, with nearly 41% of our net sales in fiscal 2023 originating outside the U.S., and a significant portion of our production capacity and cash are located overseas.
If other parties infringe our intellectual property rights, they may dilute the value of our brands in the marketplace, which could diminish the value that consumers associate with our brands which may harm our sales. 13 Legislative changes in applicable tax laws, policies and regulations or unfavorable resolution of tax matters may result in additional tax liabilities, which could adversely impact our cash flows and results of operations.
If other parties infringe our intellectual property rights, they may dilute the value of our brands in the marketplace, which could diminish the value that consumers associate with our brands which may harm our sales.
Removed
The COVID-19 pandemic has affected how we are operating our respective businesses, and the duration and extent to which this will impact our future results of operations remains uncertain. The COVID-19 pandemic and efforts to control its spread have materially affected how we and our partners and suppliers are operating our businesses.
Added
Our Company may be named a party to legal proceedings or may be subject to product liability or other claims that can result in significant expenses, fines, product recalls or withdrawals and reputational damage, which would affect our results of operations and financial condition.
Removed
Specifically, we could continue to experience disruptions in our manufacturing and supply chain operations, commodity volatility (cost and availability), and the availability, retention, and cost of the manufacturing labor force.
Added
Legislative changes in applicable tax laws, policies and regulations or unfavorable resolution of tax matters may result in additional tax liabilities, which could adversely impact our cash flows and results of operations. Our businesses are subject to taxation in the U.S. and multiple foreign jurisdictions.
Removed
Outside of these potential cost and availability impacts, we could face the risk of changing consumer behavior and category demands driven by COVID-19 pandemic uncertainty, that could impact our net sales. If we are not able to respond to any changes in operating our business driven by the COVID-19 pandemic effectively we may experience unfavorable impacts on our operational results.
Added
Given the uncertainty of the possible changes and their potential interdependency, we are unable to determine the net consolidated impact of changes in global tax legislation, if any. 13 Information Technology and Systems A failure of a key information technology system or a breach of our information security could adversely impact our ability to conduct business.
Removed
The COVID-19 pandemic may also heighten other risks described in this Risk Factors section. 11 Competition in our industries may hinder our ability to execute our business strategy, achieve profitability, or maintain relationships with existing customers.
Added
Approximately $1.3 billion (90%) of our debt balance as of September 30, 2023 is borrowed at fixed interest rates ranging from 4.125% to 5.50% with maturity dates in 2028 and thereafter. Additionally, certain of our debt instruments are subject to certain financial and other covenants, including debt ratio tests.
Removed
Our business involves the potential for product liability and other claims against us, which could affect our results of operations and financial condition and result in product recalls or withdrawals. We face exposure to claims arising out of alleged defects in our products, including for property damage, bodily injury or other adverse effects.
Removed
Because of these and other factors, we cannot predict whether we will realize the purpose and anticipated benefits of these initiatives and, if we do not, our business and results of operations may be adversely affected. We are subject to risks related to our international operations, including currency fluctuations, which could adversely affect our results of operations.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeWe also have 12 warehouses consisting of 0.5 million square feet that is owned and 0.5 million square feet that is leased. We operate from 28 different offices throughout the world, totaling 0.4 million square feet, all of which are leased, and includes our corporate headquarters in Shelton, Connecticut.
Biggest changeWe also have 14 warehouses consisting of 0.1 million square feet that is owned and 0.8 million square feet that is leased. We operate from 24 different offices throughout the world, totaling 0.3 million square feet, all of which are leased, and includes our corporate headquarters in Shelton, Connecticut.
We believe all of our facilities are well-maintained and suitable for the operations conducted in them. 19
We believe all of our facilities are well-maintained and suitable for the operations conducted in them.
Item 2. Properties. As of September 30, 2022, we owned or leased 50 properties, 26 in the U.S. and 24 globally. Ten of these properties are used as production plants consisting of 1.8 million square feet that is owned and 0.9 million square feet that is leased.
Item 2. Properties. As of September 30, 2023, we owned or leased 49 properties, 28 in the U.S. and 21 globally. Ten of these properties are used as production plants consisting of 1.8 million square feet that is owned and 0.6 million square feet that is leased.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−2 removed3 unchanged
Biggest changeDuring fiscal 2022, we repurchased 251,316 shares related to the surrender of shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock equivalent awards. 21 Performance Graph The following graph compares the cumulative five-year total return provided to shareholders of Edgewell Personal Care Company’s common stock relative to the cumulative total returns of the S&P Midcap 400 index and the S&P Household Products index.
Biggest changeDuring fiscal 2023, we repurchased 227,332 shares related to the surrender of shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock equivalent awards.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Edgewell common stock is listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “EPC.” There were approximately 5,118 shareholders of record of our common stock as of October 31, 2022.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Edgewell common stock is listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “EPC.” There were approximately 4,540 shareholders of record of our common stock as of October 31, 2023.
An investment of $100 (with reinvestment of all dividends and other distributions) is assumed to have been made in our common stock and in each of the indices on September 30, 2017 and its relative performance is tracked through September 30, 2022.
An investment of $100 (with reinvestment of all dividends and other distributions) is assumed to have been made in our common stock and in each of the indices on September 30, 2018 and its relative performance is tracked through September 30, 2023.
They are not intended to forecast possible future performance of our common stock, nor is our historical common stock price performance necessarily indicative of our future common stock price performance. * $100 invested on September 30, 2017 in stock or index, with reinvestment of all dividends. Fiscal year ending September 30.
They are not intended to forecast possible future performance of our common stock, nor is our historical common stock price performance necessarily indicative of our future common stock price performance. * $100 invested on September 30, 2018 in stock or index, with reinvestment of all dividends.
(2) Includes $0.02 per share of brokerage fee commissions. During fiscal 2022, we repurchased 3,273,970 shares of common stock under the share repurchase authorization from January 2018 for $125.3 million.
(2) Includes $0.02 per share of brokerage fee commissions. During fiscal 2023, we repurchased 1,865,353 shares of common stock under the share repurchase authorization from January 2018 for $75.2 million.
The following table sets forth the purchases of our Company’s securities by our Company and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) (17 CFR 240.10b-18(a)(3)) during the fourth quarter of fiscal 2022: Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) 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 July 1, 2022 to July 31, 2022 136,486 $ 36.32 133,406 6,734,207 August 1, 2022 to August 31, 2022 129,802 $ 41.53 129,802 6,604,405 September 1, 2022 to September 30, 2022 133,257 $ 38.34 128,375 6,476,030 (1) 7,962 shares purchased during the quarter relate to the surrender of shares of common stock to our Company to satisfy tax withholding obligations in connection with the vesting of restricted stock equivalents.
The following table sets forth the purchases of our Company’s securities by our Company and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) (17 CFR 240.10b-18(a)(3)) during the fourth quarter of fiscal 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) 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 July 1, 2023 to July 31, 2023 80,892 $ 39.19 80,892 5,307,071 August 1, 2023 to August 31, 2023 314,622 $ 38.51 314,622 4,992,449 September 1, 2023 to September 30, 2023 381,722 $ 38.50 381,772 4,610,677 (1) There were no shares purchased during the quarter related to the surrender of shares of common stock to our Company to satisfy tax withholding obligations in connection with the vesting of restricted stock equivalents.
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Copyright© 2022 Standard & Poor’s, a division of S&P Global.
Added
During the quarter ended September 30, 2023, our executive officers and directors had no equity trading arrangements nor were there any adoptions, terminations, or modifications to a Rule 10b5-1 equity trading plan or any non-Rule 10b5-1 equity trading arrangements as defined in Item 408 of Regulation S-K. 21 Performance Graph The following graph compares the cumulative five-year total return provided to shareholders of the Company’s common stock relative to the cumulative total returns of the S&P Midcap 400 index and the S&P Household Products index.
Removed
All rights reserved. 9/17 9/18 9/19 9/20 9/21 9/22 Edgewell Personal Care Company $ 100.00 $ 63.53 $ 44.65 $ 38.31 $ 49.88 $ 51.39 S&P Midcap 400 $ 100.00 $ 112.45 $ 107.77 $ 103.64 $ 147.03 $ 122.70 S&P Household Products $ 100.00 $ 96.29 $ 130.43 $ 144.68 $ 146.10 $ 127.55 Item 6. [Reserved]
Added
Fiscal year ending September 30. . 9/18 9/19 9/20 9/21 9/22 9/23 Edgewell Personal Care Company $ 100.00 $ 70.28 $ 60.31 $ 78.52 $ 80.90 $ 79.95 S&P Midcap 400 $ 100.00 $ 95.84 $ 92.16 $ 130.75 $ 109.11 $ 123.89 S&P Household Products $ 100.00 $ 135.46 $ 150.26 $ 151.73 $ 132.47 $ 142.05

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

86 edited+34 added−32 removed84 unchanged
Biggest changeYear Ended September 30, 2022 Gross Profit SG&A Operating Income EBIT Income taxes Net Earnings Diluted EPS GAAP — Reported $ 879.4 $ 389.1 $ 181.2 $ 123.0 $ 24.4 $ 98.6 $ 1.84 Restructuring and related costs 0.1 0.8 16.2 16.2 4.2 12.0 0.23 Acquisition and integration costs 0.8 9.1 9.9 9.9 1.3 8.6 0.16 SKU rationalization charges 22.5 — 22.5 22.5 5.5 17.0 0.32 Sun Care reformulation costs 3.5 — 4.6 4.6 1.2 3.4 0.06 Legal settlement — (7.5) (7.5) (7.5) (1.8) (5.7) (0.11) Value-added tax settlement costs — 3.4 3.4 3.4 1.1 2.3 0.04 Pension settlement expense — — — 1.8 0.4 1.4 0.03 Total Adjusted Non-GAAP $ 906.3 $ 383.3 $ 230.3 $ 173.9 $ 36.3 $ 137.6 $ 2.57 GAAP as a percent of net sales 40.5 % 17.9 % 8.3 % GAAP effective tax rate 19.9 % Adjusted as a percent of net sales 41.7 % 17.6 % 10.6 % Adjusted effective tax rate 20.9 % 24 Year Ended September 30, 2021 Gross Profit SG&A Operating Income EBIT Income Taxes Net Earnings Diluted EPS GAAP — Reported $ 950.1 $ 391.2 $ 238.8 $ 146.0 $ 29.0 $ 117.0 $ 2.12 Restructuring and related charges 0.6 8.7 30.1 30.1 7.5 22.6 0.41 Acquisition and integration costs 1.3 7.1 8.4 8.4 2.1 6.3 0.12 Sun Care reformulation costs 1.1 — 1.1 1.1 0.3 0.8 0.01 Cost of early retirement of long-term debt — — — 26.1 6.4 19.7 0.36 UK tax rate increase — — — — (0.3) 0.3 — Total Adjusted Non-GAAP $ 953.1 $ 375.4 $ 278.4 $ 211.7 $ 45.0 $ 166.7 $ 3.02 GAAP as a percent of net sales 45.5 % 18.7 % 11.4 % GAAP effective tax rate 19.8 % Adjusted as a percent of net sales 45.7 % 18.0 % 13.3 % Adjusted effective tax rate 21.2 % Year Ended September 30, 2020 Gross Profit SG&A Operating Income EBIT Income Taxes Net Earnings Diluted EPS GAAP — Reported $ 880.9 $ 408.8 $ 176.0 $ 87.3 $ 19.7 $ 67.6 $ 1.24 Restructuring and related charges 0.2 13.3 38.1 38.1 8.7 29.4 0.54 Acquisition and integration costs 0.6 39.2 39.8 39.8 9.7 30.1 0.56 COVID-19 expenses 4.3 — 4.3 4.3 1.1 3.2 0.06 Feminine and Infant Care evaluation costs — 0.3 0.3 0.3 0.1 0.2 — Cost of early retirement of long-term debt — — — 26.2 6.4 19.8 0.36 Gain on sale of Infant and Pet Care business — — — (4.1) (2.6) (1.5) (0.03) Total Adjusted Non-GAAP $ 886.0 $ 356.0 $ 258.5 $ 191.9 $ 43.1 $ 148.8 $ 2.73 GAAP as a percent of net sales 45.2 % 21.0 % 9.0 % GAAP effective tax rate 22.6 % Adjusted as a percent of net sales 45.4 % 18.3 % 13.3 % Adjusted effective tax rate 22.5 % Operating Results The following table presents changes in net sales for fiscal 2022 and 2021, as compared to the corresponding prior year period, and provides a reconciliation of organic net sales to reported amounts. 25 Net Sales Net Sales - Total Company For the Years Ended September 30, 2022 %Chg 2021 %Chg Net sales - prior year $ 2,087.3 $ 1,949.7 Organic 80.4 3.9 % 72.1 3.7 % Impact of Billie acquisition, net 74.9 3.6 % — — % Impact of Cremo acquisition — — % 56.0 2.9 % Impact of Infant and Pet Care sale — — % (26.8) (1.4) % Impact of currency (70.9) (3.5) % 36.3 1.9 % Net sales - current year $ 2,171.7 4.0 % $ 2,087.3 7.1 % For fiscal 2022, net sales increased 4.0% on a reported basis.
Biggest changeYear Ended September 30, 2023 Gross Profit SG&A Operating Income EBIT Income Taxes Net Earnings Diluted EPS GAAP - Reported $ 940.8 $ 409.6 $ 227.0 $ 147.7 $ 33.0 $ 114.7 $ 2.21 Restructuring and related costs 0.2 0.3 17.1 17.1 4.4 12.7 0.24 Acquisition and integration costs — 7.5 7.5 7.5 1.8 5.7 0.11 SKU rationalization (1.7) — (1.7) (1.7) (0.4) (1.3) (0.03) Sun Care reformulation (1) (1.4) — 1.9 1.9 0.5 1.4 0.03 Legal matters, net income — (6.3) (6.3) (6.3) (1.5) (4.8) (0.09) Pension settlement expense — — — 7.9 2.1 5.8 0.11 Other costs — 0.4 0.4 0.4 0.1 0.3 0.01 Total Adjusted Non-GAAP $ 937.9 $ 407.7 $ 245.9 $ 174.5 $ 40.0 $ 134.5 $ 2.59 GAAP as a percent of net sales 41.8 % 18.2 % 10.1 % GAAP effective tax rate 22.3 % Adjusted as a percent of net sales 41.7 % 18.1 % 10.9 % Adjusted effective tax rate 23.0 % (1) Also includes pre-tax research and development (“R&D) costs of $3.3 related to the reformulation, recall, and destruction of certain Sun Care products 24 Year Ended September 30, 2022 Gross Profit SG&A Operating Income EBIT Income Taxes Net Earnings Diluted EPS GAAP - Reported $ 880.5 $ 389.1 $ 182.3 $ 124.1 $ 24.6 $ 99.5 $ 1.85 Restructuring and related costs 0.1 0.8 16.2 16.2 4.2 12.0 0.23 Acquisition and integration costs 0.8 9.1 9.9 9.9 1.3 8.6 0.16 SKU rationalization 22.5 — 22.5 22.5 5.5 17.0 0.32 Sun Care reformulation 3.5 — 4.6 4.6 1.2 3.4 0.06 Legal matters, net income expense — (7.5) (7.5) (7.5) (1.8) (5.7) (0.11) Value-added tax settlement costs — 3.4 3.4 3.4 1.1 2.3 0.04 Pension settlement expense — — — 1.8 0.4 1.4 0.03 Total Adjusted Non-GAAP $ 907.4 $ 383.3 $ 231.4 $ 175.0 $ 36.5 $ 138.5 $ 2.58 GAAP as a percent of net sales 40.5 % 17.9 % 8.4 % GAAP effective tax rate 19.9 % Adjusted as a percent of net sales 41.8 % 17.6 % 10.7 % Adjusted effective tax rate 20.9 % Year Ended September 30, 2021 Gross Profit SG&A Operating Income EBIT Income Taxes Net Earnings Diluted EPS GAAP — Reported $ 951.2 $ 391.2 $ 239.9 $ 147.1 $ 29.3 $ 117.8 $ 2.13 Restructuring and related charges 0.6 8.7 30.1 30.1 7.5 22.6 0.41 Acquisition and integration costs 1.3 7.1 8.4 8.4 2.1 6.3 0.12 Sun Care reformulation 1.1 — 1.1 1.1 0.3 0.8 0.01 Cost of early retirement of long-term debt — — — 26.1 6.4 19.7 0.36 UK tax rate increase — — — — (0.3) 0.3 — Total Adjusted Non-GAAP $ 954.2 $ 375.4 $ 279.5 $ 212.8 $ 45.3 $ 167.5 $ 3.03 GAAP as a percent of net sales 45.6 % 18.7 % 11.5 % GAAP effective tax rate 19.8 % Adjusted as a percent of net sales 45.7 % 18.0 % 13.4 % Adjusted effective tax rate 21.2 % For further discussion of these items refer to Note 18 of Notes to Consolidated Financial Statements.
Segment Results Segment performance is evaluated based on segment profit, exclusive of general corporate expenses, share-based compensation costs, amortization of intangible assets, and costs associated with restructuring charges, acquisition and integration costs, SKU rationalization charges, and other non-standard expenses. The exclusion of such changes from segment results reflects management’s view on how it evaluates segment performance.
Segment Results Segment performance is evaluated based on segment profit, exclusive of general corporate expenses, share-based compensation costs, amortization of intangible assets, and costs associated with restructuring charges, acquisition and integration costs, SKU rationalization, and other non-standard expenses. The exclusion of such changes from segment results reflects management’s view on how it evaluates segment performance.
An increase in discount rates, a reduction in projected cash flows or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year.
An increase in discount rates, a reduction in projected cash flows or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year.
For a purchase order that has more than one performance obligation, we allocate the total consideration to each distinct performance obligation on a relative stand-alone selling price basis. We do not exclude variable consideration in determining the remaining value of performance obligations. 34 We record sales at the time that control of goods passes to the customer.
For a purchase order that has more than one performance obligation, we allocate the total consideration to each distinct performance obligation on a relative stand-alone selling price basis. We do not exclude variable consideration in determining the remaining value of performance obligations. We record sales at the time that control of goods passes to the customer.
Organic net sales and organic segment profit exclude the impact of changes in foreign currency and the impact of acquisitions and divestitures: • Organic net sales was unfavorably impacted in fiscal 2022 by the Billie acquisition as sales that were previously reported as third party sales to Billie were included as inter-company sales.
Organic net sales and organic segment profit exclude the impact of changes in foreign currency and the impact of acquisitions and divestitures: ◦ Organic net sales was unfavorably impacted in fiscal 2022 and 2023 by the Billie Acquisition as sales that were previously reported as third party sales to Billie were included as inter-company sales.
To the extent the estimates described above change, adjustments to income taxes are made in the period in which the estimate is changed. We operate in multiple jurisdictions with complex tax and regulatory environments, which are subject to differing interpretations by the taxpayer and the taxing authorities.
To the extent the estimates described above change, adjustments to income taxes are made in the period in which the estimate is changed. 36 We operate in multiple jurisdictions with complex tax and regulatory environments, which are subject to differing interpretations by the taxpayer and the taxing authorities.
The multiples are adjusted given the specific characteristics of the reporting unit including its position in the market relative to the guideline companies and applied to the reporting unit’s operating data to arrive at an indication of value.
The multiples are adjusted given the specific characteristics of the reporting unit including its position in the market relative to the guideline companies and applied to the reporting unit’s operating data to arrive at an 37 indication of value.
Refer to Note 10 of Notes to Condensed Consolidated Financial Statements for further discussion on our $180 uncommitted master accounts receivable purchase agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as the purchaser (the “Accounts Receivable Facility”). On August 5, 2022, we entered into the Master Receivable Assignment Agreement (the "Japan Agreement").
Refer to Note 10 of Notes to the Consolidated Financial Statements for further discussion on our $180.0 uncommitted master accounts receivable purchase agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as the purchaser (the “Accounts Receivable Facility”). On August 5, 2022, we entered into the Master Receivable Assignment Agreement (the "Japan Agreement").
While we intend to fund these capital expenditures with cash generated from operations, we may also utilize our borrowing facilities. During fiscal 2022, we did not make any contributions to our pension and postretirement plans.
While we intend to fund these capital expenditures with cash generated from operations, we may also utilize our borrowing facilities. During fiscal 2023, we did not make any contributions to our pension and postretirement plans.
Debt Covenants The Revolving Credit Facility governing our outstanding debt at September 30, 2022 contains certain customary representations and warranties, financial covenants, covenants restricting our ability to take certain actions, affirmative covenants, and provisions relating to events of default.
Debt Covenants The Revolving Credit Facility governing our outstanding debt at September 30, 2023 contains certain customary representations and warranties, financial covenants, covenants restricting our ability to take certain actions, affirmative covenants, and provisions relating to events of default.
The following tables present changes in segment net sales and segment profit for fiscal 2022 and 2021, as compared to the corresponding prior year periods, and also provide a reconciliation of organic segment net sales and organic segment profit to reported amounts.
The following tables present changes in segment net sales and segment profit for fiscal 2023 and 2022, as compared to the corresponding prior year periods, and also provide a reconciliation of organic segment net sales and organic segment profit to reported amounts.
As of September 30, 2022, we do not believe such purchase arrangements or termination penalties will have a significant effect on our results of operations, financial position or liquidity position in the future.
As of September 30, 2023, we do not believe such purchase arrangements or termination penalties will have a significant effect on our results of operations, financial position or liquidity position in the future.
The following provides additional detail on our non-GAAP measures: • We analyze net sales and segment profit on an organic basis to better measure the comparability of results between periods.
The following provides additional detail on our non-GAAP measures for the periods presented: • We analyze net sales and segment profit on an organic basis to better measure the comparability of results between periods.
Environmental Matters Our operations, like those of other companies, are subject to various federal, state, local and foreign laws and regulations intended to protect public health and the environment. These regulations relate primarily to worker safety, air and water quality, underground fuel storage tanks, and waste handling and disposal. Accrued environmental costs at September 30, 2022 were $9.6.
Environmental Matters Our operations, like those of other companies, are subject to various federal, state, local and foreign laws and regulations intended to protect public health and the environment. These regulations relate primarily to worker safety, air and water quality, underground fuel storage tanks, and waste handling and disposal. Accrued environmental costs at September 30, 2023 were $9.3.
Based on plan assets at September 30, 2022, a one percentage point decrease or increase in expected asset returns would increase or decrease our pension expense by approximately $4.4. In addition, it may increase and accelerate the rate of required pension contributions in the future.
Based on plan assets at September 30, 2023, a one percentage point decrease or increase in expected asset returns would increase or decrease our pension expense by approximately $4.0. In addition, it may increase and accelerate the rate of required pension contributions in the future.
For the Wet Shave, Feminine Care, and Skin Care reporting units, we elected to perform a quantitative impairment test in fiscal 2022. As part of the quantitative goodwill impairment test, we estimated the fair value of each reporting unit using both market and income approaches of valuation.
For the Wet Shave and Skin Care reporting units, we elected to perform a quantitative impairment test in fiscal 2023. As part of the quantitative goodwill impairment test, we estimated the fair value of each reporting unit using both market and income approaches of valuation.
The results of the valuation indicated that all reporting units had a fair value that exceeded its carrying value by more than 18%. We evaluate the fair value of indefinite-lived intangible assets annually in conjunction with the goodwill impairment test.
The results of the valuation indicated that all tested reporting units had a fair value that exceeded its carrying value by more than 27%. We evaluate the fair value of indefinite-lived intangible assets annually in conjunction with the goodwill impairment test.
The assumptions used for the annual goodwill impairment test for fiscal year 2022 include terminal growth rates of 2.50% and a weighted-average cost of capital ranging from 11.0% to 12.0%. Our annual impairment testing date was July 1, 2022, and the valuation indicated there was no impairment of the goodwill of the tested reporting units.
The assumptions used for the annual goodwill impairment test for fiscal year 2023 include terminal growth rates of 2.50% and a weighted-average cost of capital ranging from 10.0% to 11.0%. Our annual impairment testing date was July 1, 2023, and the valuation indicated there was no impairment of the goodwill of the tested reporting units.
The level of returns may fluctuate from our estimates due to several factors, including, but not limited to, weather conditions, customer inventory levels and competitive activity. Based on our fiscal 2022 Sun Care shipments, each percentage point change in our returns rate would have impacted our reported net sales by $4.1 and our reported operating income by $2.7.
The level of returns may fluctuate from our estimates due to several factors, including, but not limited to, weather conditions, customer inventory levels and competitive activity. Based on our fiscal 2023 Sun Care shipments, each percentage point change in our returns rate would have impacted our reported net sales by $2.5 and our reported operating income by $2.4.
Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In fiscal 2023, we expect our total capital expenditures to be in the range of $55 to $65 primarily related to both maintenance of and productivity efforts across manufacturing facilities, new product development and information technology system enhancements.
Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. 30 In fiscal 2024, we expect our total capital expenditures to be in the range of $55 to $65 primarily on maintenance and productivity efforts across manufacturing facilities, new product development and information technology system enhancements.
The assigned receivables will be discounted using the funding rate from the Tokyo Interbank Market plus 1.1%. 30 Historically, we have generated and expect to continue to generate positive cash flows from operations.
The assigned receivables will be discounted using the funding rate from the Tokyo Interbank Market plus 1.1%. Historically, we have generated, and expect to continue to generate, favorable cash flows from operations.
As of September 30, 2022, we were in compliance with the provisions and covenants associated with the Revolving Credit Facility.
As of September 30, 2023, we were in compliance with the provisions and covenants associated with the Revolving Credit Facility.
The discount rates were based on a weighted-average cost of capital utilizing industry market data of similar companies, in addition to estimated returns on the assets utilized in the operations of the applicable reporting unit, including net working capital, fixed assets and intangible assets.
The discount rates were based on a weighted-average cost of capital utilizing industry market data of similar companies, in addition to estimated returns on the assets utilized in the operations of the applicable reporting unit, including net working capital, fixed assets and intangible assets. We estimated royalty rates based on operating profits of the brand.
At September 30, 2022 and 2021, our reserve on the Consolidated Balance Sheet for returns was $47.5 and $52.7, respectively. We offer a variety of programs, primarily to our retail customers, designed to promote sales of our products.
At September 30, 2023 and 2022, our reserve on the Consolidated Balance Sheet for returns was $53.5 and $47.5 respectively. 34 We offer a variety of programs, primarily to our retail customers, designed to promote sales of our products.
During the fourth quarter of fiscal 2022, we performed an annual test for impairment of goodwill on each of our reporting units. We elected to perform a qualitative test of goodwill impairment for the Sun Care reporting unit.
During the fourth quarter of fiscal 2023, we performed an annual test for impairment of goodwill on each of our reporting units. We elected to perform a qualitative test of goodwill impairment for the Sun Care and Feminine Care reporting units.
The assumptions used for the annual valuation for indefinite-lived intangible assets for fiscal year 2022 include a terminal growth rate of 2.50% and a weighted-average cost of capital of 12.0%. The annual impairment analysis performed in fiscal 2022 did not indicate that impairment existed in the reporting units or indefinite lived trade names.
The assumptions used for the annual valuation for indefinite-lived intangible assets for fiscal year 2023 include a terminal growth rate ranging from 0.3% to 2.50% and a weighted-average cost of capital of 10.25%. The annual impairment analysis performed in fiscal 2023 did not indicate that impairment existed in the reporting units or indefinite lived trade names.
The estimated fair value was determined using the multi-period excess earnings method, which requires significant assumptions, including estimates regarding future revenue and operating margin growth, and discount rates. Revenue and operating margin growth assumptions are based on historical trends and management’s expectations for future growth by brand.
The estimated fair value was determined using two incomes approaches: the multi-period excess earnings method and the relief-from-royalty method, both of which requires significant assumptions, including estimates regarding future revenue and operating margin growth, discount rates, and appropriate royalty rates. Revenue and operating margin growth assumptions are based on historical trends and management’s expectations for future growth by brand.
Deferred tax liabilities generally represent tax expense recognized in our financial statements for which payment has been deferred, the tax effect of expenditures for which a deduction has already been taken in our tax return but has not yet been recognized in our financial statements, or assets recorded at estimated fair value in business combinations for which there was no corresponding tax basis adjustment. 36 We estimate income taxes and the effective income tax rate in each jurisdiction that we operate.
Deferred tax liabilities generally represent tax expense recognized in our financial statements for which payment has been deferred, the tax effect of expenditures for which a deduction has already been taken in our tax return but has not yet been recognized in our financial statements, or assets recorded at estimated fair value in business combinations for which there was no corresponding tax basis adjustment.
The Japan Agreement was between Schick Japan K.K. and Concerto Receivables Corporation (the “Purchaser”), Tokyo Branch, a subsidiary of MUFG Bank, LTD., which allows us to assign third party accounts receivable to the Purchaser. The Japan Agreement allows for the sale of up to ¥3,000 with limits set between individual customers.
The Japan Agreement was between Schick Japan K.K. and Concerto Receivables Corporation (the “Purchaser”), Tokyo Branch, a subsidiary of MUFG Bank, LTD., which allows us to assign third party accounts receivable to the Purchaser.
Cash Flows A summary of our cash flow from operating, investing and financing activities is provided in the following table: Fiscal Year 2022 2021 2020 Net cash from (used by): Operating activities $ 102.0 $ 229.0 $ 232.6 Investing activities (355.4) (48.7) (196.4) Financing activities (17.6) (65.4) (18.7) Effect of exchange rate changes on cash (19.5) (0.4) 5.6 Net (decrease) increase in cash and cash equivalents $ (290.5) $ 114.5 $ 23.1 31 Operating Activities Cash flow from operating activities was $102.0 in fiscal 2022, as compared to $229.0 in fiscal 2021.
Cash Flows A summary of our cash flow from operating, investing and financing activities is provided in the following table: Fiscal Year 2023 2022 Net cash from (used by): Operating activities $ 216.1 $ 102.0 Investing activities (50.5) (355.4) Financing activities (146.5) (17.6) Effect of exchange rate changes on cash 8.6 (19.5) Net increase (decrease) in cash and cash equivalents $ 27.7 $ (290.5) Operating Activities Cash flow from operating activities was $216.1 in fiscal 2023, as compared to $102.0 in fiscal 2022.
Under the Revolving Credit Facility, EBITDA is defined as net earnings, as adjusted to add-back interest expense, income taxes, depreciation and amortization, all of which are determined in accordance with GAAP.
Acceleration under one of our facilities would trigger cross-defaults on our other borrowings. Under the Revolving Credit Facility, EBITDA is defined as net earnings, as adjusted to add-back interest expense, income taxes, depreciation and amortization, all of which are determined in accordance with GAAP.
There were no significant events nor adverse trends that indicated any of the indefinite lived intangible assets were impaired during the fourth quarter of fiscal 2022. We tested the Wet Ones trade name for impairment by performing a quantitative assessment to estimate the fair value.
There were no significant events nor adverse trends that indicated any of the indefinite lived intangible assets were impaired during the fourth quarter of fiscal 2023. We tested the Schick, Bulldog, and Carefree, o.b., Stayfree trade names for impairment by performing a quantitative assessment to estimate the fair value.
Payments made for dividends during fiscal 2022 totaled $32.6. 32 Inflation Management recognizes that inflationary pressures may have an adverse effect on our company through higher material, labor and transportation costs, asset replacement costs and related depreciation, healthcare and other costs.
Inflation Management recognizes that inflationary pressures may have an adverse effect on our company through higher material, labor and transportation costs, asset replacement costs and related depreciation, healthcare and other costs.
We fund our pension plans in compliance with the Employee Retirement Income Security Act of 1974 or local funding requirements. Further detail on our pension and other postretirement benefit plans is included in Note 12 of Notes to Consolidated Financial Statements. Share-Based Compensation We award restricted stock equivalents (“RSE”), which generally vest over a range of two to four years.
Further detail on our pension and other postretirement benefit plans is included in Note 12 of Notes to Consolidated Financial Statements. 35 Share-Based Compensation We award restricted stock equivalents (“RSE”), which generally vest over a range of two to four years.
The fiscal 2022 effective tax rate reflects a favorable mix of earnings in low tax jurisdictions and net favorable discrete items including the impact of a change in our prior estimates. Our effective tax rate is highly sensitive to the mix of countries from which earnings or losses are derived.
The fiscal 2023 effective tax rate reflects an unfavorable mix of earnings in low tax jurisdictions with an increase in valuation allowances partially offset by favorable discrete items including the impact of a change in our prior estimates. Our effective tax rate is highly sensitive to the mix of countries from which earnings or losses are derived.
The valuation of the Wet Ones trade name had no indication of impairment as of the annual testing date on July 1, 2022. The impairment analysis performed in fiscal 2022 indicated that the Wet Ones trade name had a fair value that exceeded its carrying value by greater than 100%.
The valuation of the tested trade names had no indication of impairment as of the annual testing date on July 1, 2023. The impairment analysis performed in fiscal 2023 indicated that the tested trade names all had a fair value that exceeded its carrying value by more than 22%.
During the fiscal 2022, we had net borrowings of $155.0 under our Revolving Credit Facility, primarily to fund the acquisition of Billie. We repurchased $125.3 of our common stock under our 2018 Board authorization to repurchase our common stock in fiscal 2022 compared to $9.2 in the prior year period.
During the fiscal 2023, we had net repayments of $33.0 under the Revolving Credit Facility, compared to net borrowings of $155.0 in the prior year 31 period. During fiscal 2023, we repurchased $75.2 of our common stock under our 2018 Board authorization to repurchase our common stock (the “Repurchase Plan”) compared to $125.3 in the prior year period.
Declines in earnings in lower tax rate jurisdictions, earnings increases in higher tax rate jurisdictions, or repatriation of foreign earnings or operating losses in the future could increase future tax rates. Additionally, adjustments to prior year tax provision estimates could increase or decrease future tax provisions.
Declines in earnings in lower tax rate jurisdictions, earnings increases in higher tax rate jurisdictions, or repatriation of foreign earnings or operating losses in the future could increase future tax rates.
Segment Profit - Feminine Care For the Years Ended September 30, 2022 %Chg 2021 %Chg Segment profit - prior year $ 37.2 $ 52.3 Organic (5.9) (15.9) % (15.7) (30.0) % Impact of currency (0.1) (0.2) % 0.6 1.1 % Segment profit - current year $ 31.2 (16.1) % $ 37.2 (28.9) % Feminine Care segment profit for fiscal 2022 was $31.2, a decrease of $6.0, or 16.1%.
Segment Profit - Feminine Care For the Years Ended September 30, 2023 %Chg 2022 %Chg Segment profit - prior year $ 31.5 $ 37.5 Organic 19.2 61.0 % (5.9) (15.7) % Impact of currency (1.0) (3.2) % (0.1) (0.3) % Segment profit - current year $ 49.7 57.8 % $ 31.5 (16.0) % Feminine Care segment profit for fiscal 2023 was $49.7, an increase of $18.2, or 57.8%.
Under the terms of the Revolving Credit Facility, the ratio of our indebtedness to our earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined in the agreement and detailed below, cannot be greater than 4.0 to 1.0. In addition, under the Revolving Credit Facility, the ratio of our EBITDA to total interest expense must exceed 3.0 to 1.0.
Under the terms of the Revolving Credit Facility, the ratio of our indebtedness to our earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined in the agreement and detailed below, cannot be greater than 4.0 to 1.0, however, there is an exception for acquisition activity.
Long-term financing needs will depend largely on potential growth opportunities, including acquisition activity and repayment or refinancing of our long-term debt obligations. Our long-term liquidity may be influenced by our ability to borrow additional funds, renegotiate existing debt, and raise equity under terms that are favorable to us. We may, from time-to-time, seek to repurchase shares of our common stock.
Our long-term liquidity may be influenced by our ability to borrow additional funds, renegotiate existing debt, and raise equity under terms that are favorable to us. We may, from time-to-time, seek to repurchase shares of our common stock.
Commitments and Contingencies Legal Proceedings During the year ended September 30, 2022, we settled certain legal matters primarily related to intellectual property claims against a third party. The settlement resulted in a gain of $7.5 which was included in SG&A in the Condensed Consolidated Financial Statements. The Company received payment for the settlement in the fourth quarter of fiscal 2022.
During fiscal 2022 the Company settled certain legal matters which resulted in a gain of $7.5 related to intellectual property claims against a third party. This was included in SG&A in the Consolidated Statements of Earnings and Comprehensive Income. The Company received payment for the settlement in fiscal 2022.
This charge was included in Cost of products sold in the Consolidated Financial Statements. In fiscal 2022, the Company took specific actions to strengthen our operating model, simplify our organization and improve manufacturing and supply chain efficiency and productivity.
In fiscal 2022, the Company took specific actions to strengthen our operating model, simplify our organization and improve manufacturing and supply chain efficiency and productivity.
Liquidity and Capital Resources At September 30, 2022, a portion of our cash balances were located outside the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies. Refer to Note 16 of Notes to Condensed Consolidated Financial Statements for a discussion of the primary currencies to which the Company is exposed .
Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies. Refer to Note 16 of Notes to Consolidated Financial Statements for a discussion of the primary currencies to which the Company is exposed .
Our cash flows are affected by the seasonality of our Sun Care business, typically resulting in higher net sales and increased cash generated in the second and third quarters of each fiscal year. We believe our cash on hand, cash flows from operations and borrowing capacity under our U.S.
Our cash flows are affected by the seasonality of our Sun Care business, typically resulting in higher net sales and increased cash generated in the second and third quarter of each fiscal year.
Revolving Credit Facility will be sufficient to satisfy our future working capital requirements, interest payments, R&D activities, capital expenditures, and other financing requirements for at least the next 12 months. We will continue to monitor our cash flows, spending, and liquidity needs. To date, the COVID-19 pandemic has not had a significant impact on our liquidity or capital resources.
We believe our cash on hand, cash flows from operations and borrowing capacity under the Revolving Credit Facility will be sufficient to satisfy our future working capital requirements, interest payments, R&D activities, capital expenditures, and other financing requirements for at least the next 12 months. We will continue to monitor our cash flows, spending and liquidity needs.
During the fourth quarter of fiscal 2022, we elected to complete a qualitative assessment for impairment of indefinite lived trade names, except for the Wet Ones trade name, for which we completed a quantitative assessment.
During the fourth quarter of fiscal 2023, we elected to complete a qualitative assessment for impairment of indefinite lived trade names, except for the Schick, Bulldog, and Carefree, o.b., Stayfree trade names, for which we completed a quantitative assessment.
Segment Profit - Sun and Skin Care For the Years Ended September 30, 2022 %Chg 2021 %Chg Segment profit - prior year $ 98.7 $ 69.1 Organic 11.4 11.6 % 19.2 27.8 % Impact of Cremo acquisition — — % 8.9 12.9 % Impact of currency (1.6) (1.7) % 1.5 2.1 % Segment profit - current year $ 108.5 9.9 % $ 98.7 42.8 % Sun and Skin Care segment profit for fiscal 2022 was $108.5, an increase of 9.9%.
Segment Profit - Sun and Skin Care For the Years Ended September 30, 2023 %Chg 2022 %Chg Segment profit - prior year $ 108.8 $ 99.0 Organic 28.7 26.4 % 11.4 11.5 % Impact of currency (0.1) (0.1) % (1.6) (1.6) % Segment profit - current year $ 137.4 26.3 % $ 108.8 9.9 % Sun and Skin Care segment profit for fiscal 2023 was $137.4, an increase of $28.6, or 26.3%.
Risk Factors and “Forward-Looking Statements” included within this Annual Report on Form 10-K. 22 Non-GAAP Financial Measures While we report financial results in accordance with GAAP, this discussion also includes non-GAAP measures.
Risk Factors and “Forward-Looking Statements” included within this Annual Report on Form 10-K. Non-GAAP Financial Measures While we report financial results in accordance with GAAP, this discussion also includes non-GAAP measures. These non-GAAP measures are referred to as “adjusted” or “organic” and exclude certain costs deemed non-recurring in nature.
Share Repurchases In January 2018, our Board approved an authorization to repurchase up to 10.0 shares of our common stock. This authorization replaced a prior share repurchase authorization from May 2015. During fiscal 2022, we repurchased 3.3 shares of our common stock for $125.3. We have 6.5 shares remaining available for purchase under the January 2018 Board authorization.
This authorization replaced a prior share repurchase authorization from May 2015. During fiscal 2023, we repurchased 1.9 shares of our common stock for $75.2. We have 4.6 shares remaining available for purchase under the January 2018 Board authorization. Since September 30, 2023, we repurchased 0.1 shares of common stock for $3.5.
Fiscal 2021 general corporate expenses increased $1.6 when compared to fiscal 2020. During the year ended September 30, 2022, the Company recorded a charge of $22.5 relating to the write-off of inventory for certain Wet Ones SKUs and related contract termination charges associated with a third-party co-manufacturer.
In fiscal 2022, we recorded a charge of $22.5 relating to the write-off of inventory and related contract termination charges associated with a third-party co-manufacturer. During fiscal 2023, the Company released a reserve of $1.7 related to certain accrued expenses associated with the write-off of inventory for certain Wet Ones SKUs.
Due to the election of certain terms of the American Rescue Plan Act, we are not required to make any cash contributions to our pension and postretirement plans in fiscal 2023.
Due to the election of certain terms of the American Rescue Plan Act, we were not required to make any cash contributions to our pension and postretirement plans in fiscal 2023. Pension contributions required beyond fiscal 2024 represent future pension payments to comply with local funding requirements in the U.S. only.
The income approach 37 utilizes the discounted cash flow method and incorporates significant estimates and assumptions, including long-term projections of future cash flows, market conditions, and discount rates reflecting the risk inherent in future cash flows.
The income approach utilizes the discounted cash flow method and incorporates significant estimates and assumptions, including long-term projections of future cash flows, market conditions, and discount rates reflecting the risk inherent in future cash flows. The projections for future cash flows are generated using our company’s strategic plan to determine a five-year period of forecasted cash flows and operating data.
Organic net sales in International markets increased 3.9% compared to declines in North America of 2.3%. 27 Segment Profit - Wet Shave For the Years Ended September 30, 2022 %Chg 2021 %Chg Segment profit - prior year $ 221.0 $ 206.2 Organic (21.2) (9.6) % 8.9 4.3 % Impact of Billie acquisition, net (6.8) (3.1) % — — % Impact of currency (19.0) (8.6) % 5.9 2.9 % Segment profit - current year $ 174.0 (21.3) % $ 221.0 7.2 % Wet Shave segment profit for fiscal 2022 was $174.0, down $47.0 or 21.3%.
Segment Profit - Wet Shave For the Years Ended September 30, 2023 %Chg 2022 Segment profit - prior year $ 174.5 $ 221.5 Organic 9.3 5.3 % (21.2) (9.5) % Impact of Billie acquisition, net — — % (6.8) (3.1) % Impact of currency (25.5) (14.6) % (19.0) (8.6) % Segment profit - current year $ 158.3 (9.3) % $ 174.5 (21.2) % Wet Shave segment profit for fiscal 2023 was $158.3, a decrease of $16.2, or 9.3%.
Wet Shave Net Sales - Wet Shave For the Years Ended September 30, 2022 %Chg 2021 %Chg Net sales - prior year $ 1,215.9 $ 1,162.3 Organic 14.3 1.2 % 26.6 2.3 % Impact of Billie acquisition, net 74.9 6.2 % — — % Impact of currency (62.6) (5.2) % 27.0 2.3 % Net sales - current year $ 1,242.5 2.2 % $ 1,215.9 4.6 % Wet Shave net sales for fiscal 2022 increased 2.2%, inclusive of a 6.2% increase from the Billie acquisition and a 5.2% decline due to negative currency movements.
Wet Shave Net Sales - Wet Shave For the Years Ended September 30, 2023 %Chg 2022 %Chg Net sales - prior year $ 1,242.5 $ 1,215.9 Organic 0.6 — % 14.3 1.2 % Impact of Billie acquisition, net 12.0 1.0 % 74.9 6.2 % Impact of currency (24.2) (1.9) % (62.6) (5.2) % Net sales - current year $ 1,230.9 (0.9) % $ 1,242.5 2.2 % Wet Shave net sales for fiscal 2023 was $1,230.9, a decrease of $11.6, or 0.9%, as compared to the prior year period, including $24.2 or 1.9% decline due to unfavorable impact from currency, partially offset by an increase of $12.0, or 1.0%, from the Billie Acquisition.
However, current environmental spending estimates could be modified as a result of changes in our plans or our understanding of underlying facts, changes in legal requirements, including any requirements related to global climate change, or other factors.
However, current environmental spending estimates could be modified as a result of changes in our plans or our understanding of underlying facts, changes in legal requirements, including any requirements related to global climate change, or other factors. 33 Critical Accounting Policies The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our consolidated financial statements.
Significant Events Acquisitions On November 29, 2021, the Company completed the acquisition of Billie, a leading U.S. based consumer brand company that offers a broad portfolio of personal care products for women, for a purchase price of $309.4, net of cash acquired.
Significant Events Acquisitions On November 29, 2021, we completed the acquisition of Billie, a leading U.S. based consumer brand company that offers a broad portfolio of personal care products for women, for a purchase price of $309.4, net of cash acquired, utilizing a combination of cash on hand and drawing on our U.S. revolving credit facility maturing in 2025 between the Company and Bank of America, N.A., as administrative agent, and lenders parties thereto (the “Revolving Credit Facility”).
We had outstanding international borrowings, recorded within Notes payable, of $19.0 and $26.5 as of September 30, 2022 and September 30, 2021, respectively. Effective February 7, 2022, we increased the maximum receivables sold facility amount under the Sixth Amendment to Master Accounts Receivable Purchase Agreement to $180.0 from $150.0.
Effective February 7, 2022, we increased the maximum receivables sold facility amount under the Sixth Amendment to Master Accounts Receivable Purchase Agreement to $180.0 from $150.0.
Subsequent to the acquisition of Billie, profit previously earned on sales to Billie was deferred until Billie sells to a third party. • We utilize “adjusted” non-GAAP measures including gross profit, SG&A, operating income, income taxes, net earnings, and diluted earnings per share internally to make operating decisions.
The impact of currency was applied to segments using management’s best estimate. • We utilize “adjusted” non-GAAP measures including gross profit, SG&A, operating income, income taxes, net earnings, and diluted earnings per share internally to make operating decisions.
Based upon present information, we believe that its liability, if any, arising from such pending legal proceedings, asserted legal claims, and known potential legal claims which are likely to be asserted, is not reasonably likely to be material to its financial position, results of operations or cash flows, when taking into account established accruals for estimated liabilities. 33 Contractual Obligations We have significant contractual obligations to fulfill our business operations including the repayment of short and long term debt, periodic interest payments, minimum levels of pension funding, and other obligations including payments for various leases of real estate, vehicles, and equipment, and minimum fixed costs to be paid to third party logistics vendors.
Based upon present information, we believe that its liability, if any, arising from such pending legal proceedings, asserted legal claims, and known potential legal claims which are likely to be asserted, is not reasonably likely to be material to its financial position, results of operations or cash flows, when taking into account established accruals for estimated liabilities.
Our cash is deposited with multiple counterparties which consist of major financial institutions. We consistently monitor positions with, and credit ratings of, counterparties both internally and by using outside ratings agencies. Our total borrowings were $1,424.0 at September 30, 2022, including $174.0 tied to variable interest rates. Our total borrowings at September 30, 2021 were $1,276.5.
Our cash is deposited with multiple counterparties which consist of major financial institutions. We consistently monitor positions with, and credit ratings of, counterparties both internally and by using outside ratings agencies.
On an adjusted basis, as illustrated in the table below, net earnings per diluted share during fiscal 2022 were $2.57 compared to $3.02 in the prior year.
Adjusted net earnings decreased primarily due to unfavorable currency movements. • Diluted net earnings per share during fiscal 2023 was $2.21 compared to earnings of $1.85 in the prior fiscal year. On an adjusted basis, as illustrated in the table below, net earnings per diluted share during fiscal 2023 were $2.59 compared to $2.58 in the prior year.
Multiples derived from guideline companies provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company.
The market approach uses the guideline public company method to calculate the value of each reporting unit based on the operating data of similar assets from competing publicly traded companies. Multiples derived from guideline companies provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company.
As a result of the acquisition, Cremo became a wholly owned subsidiary of the Company. Refer to Note 3 of Notes to Condensed Consolidated Financial Statements for further discussion on the Cremo acquisition.
As a result, Billie became a wholly owned subsidiary of the Company. Refer to Note 3 of Notes to the Consolidated Financial Statements for further discussion. 23 Executive Summary The following is a summary of key results for fiscal 2023, 2022 and 2021.
Sun and Skin Care Net Sales - Sun and Skin Care For the Years Ended September 30, 2022 %Chg 2021 %Chg Net sales - prior year $ 585.3 $ 462.0 Organic 61.4 10.5 % 59.0 12.8 % Impact of Cremo acquisition — — % 56.0 12.1 % Impact of currency (8.2) (1.4) % 8.3 1.8 % Net sales - current year $ 638.5 9.1 % $ 585.3 26.7 % Sun and Skin Care net sales for fiscal 2022 increased 9.1%.
Organic segment profit increased $9.3, or 5.3% primarily driven by growth in International markets and was partially offset by unfavorable impact from currency. 27 Sun and Skin Care Net Sales - Sun and Skin Care For the Years Ended September 30, 2023 %Chg 2022 %Chg Net sales - prior year $ 638.5 $ 585.3 Organic 68.1 10.7 % 61.4 10.5 % Impact of currency (1.1) (0.2) % (8.2) (1.4) % Net sales - current year $ 705.5 10.5 % $ 638.5 9.1 % Sun and Skin Care net sales for fiscal 2023 was $705.5, an increase of $67.0, or 10.5%.
If we fail to comply with these covenants or with other requirements of the Revolving Credit Facility, the lenders may have the right to accelerate the maturity of the debt. Acceleration under one of our facilities would trigger cross-defaults on our other borrowings.
In addition, under the Revolving Credit Facility, the ratio of our EBITDA to total interest expense must exceed 3.0 to 1.0. If we fail to comply with these covenants or with other requirements of the Revolving Credit Facility, the lenders may have the right to accelerate the maturity of the debt.
Selling, General and Administrative Expense SG&A was $389.1 in fiscal 2022, or 17.9% of net sales, as compared to $391.2 in fiscal 2021, or 18.7% of net sales.
Selling, General and Administrative Expense SG&A was $409.6, or 18.2%, of net sales in fiscal 2023 compared to $389.1, or 17.9%, of net sales in the prior year period primarily due to higher people costs and travel expenses.
Net earnings and diluted earnings per share (“EPS”) for the time periods presented were impacted by restructuring and related costs, acquisition and integration costs, and other non-standard items, as described in the table below.
Net earnings and diluted earnings per share (“EPS”) for the time periods presented were impacted by restructuring and related costs, acquisition and integration costs, SKU Rationalization, Sun Care reformulation, income from resolution of legal matters, pension settlement expense, VAT settlement costs, cost of early debt retirement and other costs or income, as described in the table below.
Organic net sales increased $14.3, or 1.2%, primarily driven by increases in Disposables, and Shave Preps, offset by declines in Men’s and Women’s Systems.
Organic net sales were flat with an increase of $0.6, or 0.0%. Organic net sales were primarily impacted by increases in Women’s Systems, Disposables, and Men’s Shave Preps, offset by declines in Men’s Systems and Women’s Shave Preps. Organic net sales in International markets increased 1.2% compared to declines in North America of 1.1%.
The terms of the agreement expire one year after the date of execution and will be renewed annually unless either party notifies of its intent not to renew.
The Japan Agreement allows for the sale of up to ¥3,000 (approximately $20.0 using the exchange rate as of September 30, 2023) with limits set between individual customers. The terms of the agreement expire one year after the date of execution and will be renewed annually unless either party notifies of its intent not to renew.
We also have significant intercompany financing arrangements that may result in gains and losses in our results of operations. In an effort to mitigate the impact of currency exchange rate effects, we may hedge certain operational and intercompany transactions; however, our hedging strategies may not fully offset gains and losses recognized in our results of operations.
In an effort to mitigate the impact of currency exchange rate effects, we may hedge certain operational and intercompany transactions; however, our hedging strategies may not fully offset gains and losses recognized in our results of operations. 32 Commitments and Contingencies Legal Proceedings During fiscal 2023, the Company settled a legal matter which resulted in a gain of $4.9 related to an intellectual property claim against a third party.
As allowed under GAAP, our U.S. qualified pension plan uses market related value, which recognizes market appreciation or depreciation in the portfolio over five years, thereby reducing the short-term impact of market fluctuations. 35 We have historically provided defined benefit pension plans to our eligible employees, former employees and retirees.
A one percentage point decrease in the discount rate would increase pension obligations by approximately $41.8 at September 30, 2023. As allowed under GAAP, our U.S. qualified pension plan uses market related value, which recognizes market appreciation or depreciation in the portfolio over five years, thereby reducing the short-term impact of market fluctuations.
For further discussion regarding net sales, including a summary of reported versus organic changes, see “Segment Results.” Gross Profit Gross profit was $879.4 in fiscal 2022, as compared to $950.1 in fiscal 2021. Gross margin as a percent of net sales for fiscal 2022 was 40.5%, down 500 basis points as compared to fiscal 2021.
For further discussion regarding net sales, including a summary of reported versus organic changes, see “Segment Results.” Gross Profit Gross profit was $940.8 in fiscal 2023, as compared to $880.5 in fiscal 2022, an increase of $60.3, or 6.8%, including a $33.7 unfavorable impact from currency movements.
The effective income tax rate for fiscal 2022 for operations was 19.9% as compared to 19.8% in the prior year. On an adjusted basis, the effective tax rate for fiscal 2022 was 20.9% compared to 21.2% in the prior year.
Income Tax Provision Income taxes, which include federal, state and foreign taxes, were 22.3% and 19.9% of Earnings before income taxes in fiscal 2023 and 2022, respectively. On an adjusted basis, the effective tax rate for fiscal 2023 was 23.0% compared to 20.9% in the prior year.
As a result of these actions, we incurred restructuring charges of $16.2 during fiscal 2022, primarily related to employee severance and benefit costs. In previous years, we incurred restructuring charges related to Project Fuel, our previous enterprise wide initiative, including $30.1 in fiscal 2021.
As a result of these actions, we incurred charges of approximately $17.1 in fiscal 2023, primarily related to employee severance, project implementation and other exit costs.
Advertising and Sales Promotion Expense For fiscal 2022, A&P was $238.3, down $3.2 as compared to $241.5 fiscal 2021. A&P as a percent of net sales was 11.0% for fiscal 2022, compared with 11.6% in fiscal 2021.
Advertising and Sales Promotion Expense For fiscal 2023, A&P was $229.1, down $9.2, or 3.9%, compared to fiscal 2022. A&P as a percent of net sales was 10.2% for fiscal 2023, compared with 11.0% in fiscal 2022. The decrease in A&P was primarily due to lower media spend and agency fees partially offset by higher investment in Feminine Care.
Organic segment profit increased $11.4, or 11.6% driven by increased net sales and gross margin from favorable volumes of Sun Care products and pricing for Wet Ones, partially offset by higher freight and materials costs. 28 Feminine Care Net Sales - Feminine Care For the Years Ended September 30, 2022 %Chg 2021 %Chg Net sales - prior year $ 286.1 $ 298.6 Organic 4.7 1.6 % (13.5) (4.5) % Impact of currency (0.1) — % 1.0 0.3 % Net sales - current year $ 290.7 1.6 % $ 286.1 (4.2) % Feminine Care net sales for fiscal 2022 increased $4.6, or 1.6%.
Feminine Care Net Sales - Feminine Care For the Years Ended September 30, 2023 %Chg 2022 %Chg Net sales - prior year $ 290.7 $ 286.1 Organic 25.3 8.7 % 4.7 1.6 % Impact of currency (0.8) (0.3) % (0.1) — % Net sales - current year $ 315.2 8.4 % $ 290.7 1.6 % Feminine Care net sales for fiscal 2023 was $315.2, an increase of $24.5, or 8.4%.
On November 3, 2022, the Board declared a quarterly cash dividend of $0.15 per common share for the fourth fiscal quarter. The dividend will be payable on January 4, 2023 to shareholders of record as of the close of business on November 29, 2022. Dividends declared during fiscal 2022 totaled $32.6.
The dividend will be paid on January 4, 2024 to shareholders of record as the close of business on December 6, 2023. Dividends declared during fiscal 2023 totaled $31.7. Payments made for dividends during fiscal 2023 totaled $31.5.
As a percent of net sales, R&D was approximately 2.6% for the fiscal 2022 compared with 2.8% for fiscal 2021. Interest Expense Associated with Debt Interest expense associated with debt for fiscal 2022 was $71.4, an increase of $3.5 as compared to $67.9 in fiscal 2021.
Research and Development Expense Research and development expense (“R&D”) was $58.5 in fiscal 2023, an increase of $3.0, or 5.4%, compared to the prior year. As a percent of net sales, R&D remained flat at 2.6%.
Fiscal 2022 • Net sales were $2,171.7, an increase of 4.0% from fiscal 2021, inclusive of a 3.6% increase due to the acquisition of Billie and a 3.5% decrease due to negative currency movements.
Net Sales Net Sales - Total Company For the Years Ended September 30, 2023 %Chg 2022 %Chg Net sales - prior year $ 2,171.7 $ 2,087.3 Organic 94.0 4.3 % 80.4 3.9 % Impact of Billie acquisition, net 12.0 0.6 % 74.9 3.6 % Impact of currency (26.1) (1.2) % (70.9) (3.5) % Net sales - current year $ 2,251.6 3.7 % $ 2,171.7 4.0 % For fiscal 2023, net sales were $2,251.6, an increase of $79.9, or 3.7%, including a net benefit of $12.0 or 0.6% from the acquisition of Billie and a $26.1, or 1.2% unfavorable impact due to currency movements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe change in the estimated fair value of the foreign currency contracts resulted in a gains of $8.2 and $2.3 for fiscal 2022 and 2021, respectively, which were recorded in Other (income) expense, net.
Biggest changeThe change in the estimated fair value of the foreign currency contracts resulted in a gains of $3.0 and $8.2 for fiscal 2023 and 2022, respectively, which were recorded in Other expense (income), net in the Consolidated Statements of Earnings and Comprehensive Income.
Assuming foreign exchange rates versus the U.S. dollar remain at September 30, 2022 levels over the next 12 months, the majority of the pre-tax gain included in AOCI at September 30, 2022 is expected to be included in Other (income) expense, net. Contract maturities for these hedges extend into fiscal year 2023.
Assuming foreign exchange rates versus the U.S. dollar remain at September 30, 2023 levels over the next 12 months, the majority of the pre-tax gain included in AOCI at September 30, 2023 is expected to be included in Other expense (income), net. Contract maturities for these hedges extend into fiscal year 2025.
Derivatives Designated as Cash Flow Hedging Relationships At September 30, 2022, we maintained a cash flow hedging program related to foreign currency risk. These derivative instruments have a high correlation to the underlying exposure being hedged and have been deemed highly effective by the Company for accounting purposes in offsetting the associated risk.
Derivatives Designated as Cash Flow Hedging Relationships At September 30, 2023, we maintained a cash flow hedging program related to foreign currency risk. These derivative instruments have a high correlation to the underlying exposure being hedged and have been deemed highly effective by the Company for accounting purposes in offsetting the associated risk.
At times, we have used, and may in the future, use hedging instruments to reduce exposure to variability in cash flows associated with future purchases of certain materials and commodities. At September 30, 2022, there were no open derivative or hedging instruments for future purchases of raw materials or commodities.
At times, we have used, and may in the future, use hedging instruments to reduce exposure to variability in cash flows associated with future purchases of certain materials and commodities. At September 30, 2023, there were no open derivative or hedging instruments for future purchases of raw materials or commodities.
We enter into forward currency contracts to hedge the cash flow uncertainty associated with currency fluctuations. These transactions are accounted for as cash flow hedges. We had an unrealized pre-tax gains of $11.3 and $3.3 at September 30, 2022 and 2021, respectively, on these forward currency contracts accounted for as cash flow hedges included in Accumulated other comprehensive loss (“AOCI”).
We enter into forward currency contracts to hedge the cash flow uncertainty associated with currency fluctuations. These transactions are accounted for as cash flow hedges. We had an unrealized pre-tax gains of $4.4 and $11.3 at September 30, 2023 and 2022, respectively, on these forward currency contracts accounted for as cash flow hedges included in Accumulated other comprehensive loss (“AOCI”).
Assuming a one percent increase in the applicable interest rates, annual interest expense would increase by approximately $1.7. The remaining outstanding debt as of September 30, 2022 is fixed-rate debt. Changes in market interest rates generally affect the fair value of fixed-rate debt, but do not impact earnings or cash flows.
Assuming a one percent increase in the applicable interest rates, annual interest expense would increase by approximately $1.2. The remaining outstanding debt as of September 30, 2023 is fixed-rate debt. Changes in market interest rates generally affect the fair value of fixed-rate debt, but do not impact earnings or cash flows.
Interest Rate Exposure Our exposure to interest rate risk relates primarily to our variable-rate debt instruments, which currently bear interest based on LIBOR plus margin. As of September 30, 2022, our outstanding debt included $174.0 related to our Revolving Credit Facility and international, variable-rate note payable.
Interest Rate Exposure Our exposure to interest rate risk relates primarily to our variable-rate debt instruments, which currently bear interest based on LIBOR plus margin. As of September 30, 2023, our outstanding debt included $122.0 related to our Revolving Credit Facility and international, variable-rate note payable.
Changes in the value of the non-functional currency balance sheet positions in relation to the foreign subsidiary’s local currency result in an exchange gain or loss recorded in Other (income) expense, net. The primary currency to which our foreign subsidiaries are exposed is the U.S. dollar.
Changes in the value of the non-functional currency balance sheet positions in relation to the foreign subsidiary’s local currency result in an exchange gain or loss recorded in Other expense (income), net in the Consolidated Statements of Earnings and Comprehensive Income. The primary currency to which our foreign subsidiaries are exposed is the U.S. dollar.
There were 64 open foreign currency contracts at September 30, 2022 with a notional value of approximately $114.8. For further information on our derivatives designated as cash flow hedging relationships, see Note 16 of Notes to Consolidated Financial Statements.
There were 64 open foreign currency contracts at September 30, 2023 with a notional value of approximately $105.4. For further information on our derivatives designated as cash flow hedging relationships, see Note 16 of Notes to Consolidated Financial Statements.
There were seven open foreign currency derivative contracts which were not designated as cash flow hedges at September 30, 2022, with a notional value of approximately $65.6.
There were five open foreign currency derivative contracts which were not designated as cash flow hedges at September 30, 2023, with a notional value of approximately $34.5.

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