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MarketScreener Homepage  >  Equities  >  Nyse  >  Edgewell Personal Care Company    EPC

EDGEWELL PERSONAL CARE COMPANY

(EPC)
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EDGEWELL PERSONAL CARE : Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

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08/06/2019 | 05:11pm EST
(in millions, except per share data, unaudited)
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited Condensed
Consolidated Financial Statements and the accompanying notes included in this
Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the
SEC on November 19, 2018 (the "2018 Annual Report"). The following discussion
may contain forward-looking statements that reflect our plans, estimates, and
beliefs and involve risks, uncertainties, and assumptions. Our actual results
could differ materially from those discussed in these forward-looking
statements. Factors that could cause or contribute to these differences include
those discussed within "Forward-Looking Statements" below and in Item 1A. Risk
Factors and "Forward-Looking Statements" included within our 2018 Annual Report.
Forward-Looking Statements
This document contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements made by or on behalf of
Edgewell Personal Care Company ("Edgewell", "we" or "our Company") or any of our
businesses. Forward-looking statements generally can be identified by the use of
words or phrases such as "believe," "expect," "expectation," "anticipate,"
"may," "could," "intend," "belief," "estimate," "plan," "target," "predict,"
"likely," "will," "should," "forecast," "outlook," or other similar words or
phrases. These statements are not based on historical facts, but instead reflect
our expectations, estimates, or projections concerning future results or events,
including, without limitation, the future earnings and performance of our
Company or any of our businesses. These statements are not guarantees of
performance and are inherently subject to known and unknown risks, uncertainties
and assumptions that are difficult to predict and could cause our actual results
to differ materially from those indicated by those statements. We cannot assure
you that any of our expectations, estimates or projections will be achieved. The
forward-looking statements included in this report are only made as of the date
of this report, and we disclaim any obligation to publicly update any
forward-looking statement to reflect subsequent events or circumstances, except
as required by law. You should not place undue reliance on these statements.
In addition, other risks and uncertainties not presently known to us or that we
presently consider immaterial could significantly affect the forward-looking
statements. All forward-looking statements should be evaluated with the
understanding of their inherent uncertainty. Risks and uncertainties include
those detailed from time to time in our publicly filed documents, including in
Item 1A. Risk Factors of Part I of our 2018 Annual Report.
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 items such as impairment charges,
restructuring charges, Harry's, Inc. ("Harry's") acquisition and integration
planning costs, advisory expenses in connection with the evaluation of the
Feminine and Infant Care businesses, Sun Care reformulation charges, the Jack
Black, L.L.C. ("Jack Black") acquisition and integration costs, investor
settlement expense, the disposition of the Playtex® gloves business, and the
impact of the Tax Cuts and Jobs Act (the "Tax Act"). Reconciliations of Non-GAAP
measures are included within this Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This Non-GAAP information is provided as a supplement to, not as a substitute
for, or as superior to, measures of financial performance prepared in accordance
with GAAP. We use this Non-GAAP information internally to make operating
decisions and believe it is helpful to investors because it allows more
meaningful period-to-period comparisons of ongoing operating results. Given the
various significant events, including the Project Fuel restructuring and
acquisition of Jack Black, we view the use of Non-GAAP measures that take into
account the impact of these unique events as particularly valuable in
understanding our underlying operational results and providing insights into
future performance. The information can also be used to perform trend analysis
and to better identify operating trends that may otherwise be masked or
distorted by the types of items that are excluded. This Non-GAAP information is
also a component in determining management's incentive compensation. Finally, we
believe this information provides more transparency. The following provides
additional detail on our Non-GAAP measures:

• We analyze our net sales and segment profit on an organic basis to better

measure the comparability of results between periods. Organic net sales

and organic segment profit exclude the impact of changes in foreign

currency, acquisitions, and dispositions (including the acquisition of

Jack Black through February 2019 and the disposition of the Playtex gloves

business through October 2018). This information is provided because these

       types of fluctuations can distort the underlying change in net sales and
       segment profit either positively or negatively.



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• Adjusted net earnings and adjusted earnings per share are defined as net

earnings and diluted earnings per share excluding items such as impairment

charges, restructuring charges, Harry's acquisition and integration

planning costs, advisory expenses in connection with the evaluation of the

Feminine and Infant Care businesses, Sun Care reformulation charges, Jack

Black acquisition and integration costs, investor settlement expense, the

       disposition of the Playtex gloves business, the related tax effects of
       these items, and the impact of the Tax Act.

• Adjusted effective tax rate is defined as the effective tax rate excluding

items such as impairment charges, restructuring charges, Harry's

acquisition and integration planning costs, advisory expenses in

connection with the evaluation of the Feminine and Infant Care businesses,

Sun Care reformulation charges, Jack Black acquisition and integration

costs, investor settlement expense, the disposition of the Playtex gloves

business, the related tax effects of these items, and the impact of the

Tax Act from the income tax provision and earnings before income taxes.



All comparisons are with the same period in the prior year, unless otherwise
noted.
Industry and Market Data
Unless we indicate otherwise, we base the information concerning our industry
contained or incorporated by reference herein on our general knowledge of and
expectations concerning the industry. Our market position, market share, and
industry market size are based on our estimates using internal data and data
from various industry analyses, our internal research and adjustments, and
assumptions that we believe to be reasonable. We have not independently verified
data from industry analyses and cannot guarantee its accuracy or completeness.
In addition, we believe that data regarding the industry, market size and our
market position and market share within such industry provide general guidance
but are inherently imprecise and have not been verified by any independent
source. Further, our estimates and assumptions involve risks and uncertainties
and are subject to change based on various factors, including those discussed in
the "Risk Factors" section of our 2018 Annual Report. These, and other factors,
could cause results to differ materially from those expressed in the estimates
and assumptions. You are cautioned not to place undue reliance on this data.
Retail sales for purposes of market size, market position and market share
information are based on retail sales in U.S. dollars.
Trademarks and Trade Names
We own or have rights to use trademarks and trade names that we use in
conjunction with the operation of our business, which appear throughout this
Quarterly Report on Form 10-Q. We also may refer to brand names, trademarks,
service marks and trade names of other companies and organizations, and these
brand names, trademarks, service marks and trade names are the property of their
respective owners.

Significant Events
Acquisitions
On May 9, 2019, we announced that we have entered into a definitive Agreement
and Plan of Merger (the " Merger Agreement") under which we will combine with
Harry's in a cash and stock transaction that values Harry's at $1,370 (the
"Merger"). Under the terms of the Merger Agreement and based on our closing
share price on May 8, 2019, approximately 79% of the total value of the
transaction will be paid in cash and 21% will be paid in shares of our common
stock. The Merger has been approved by the Boards of Directors of both our
Company and Harry's and is expected to close by the end of the first quarter of
the 2020 calendar year, subject to the satisfaction of customary closing
conditions and receipt of regulatory clearances. We intend to finance the Merger
through a combination of cash on our balance sheet, net new debt and equity.
Bank of America Merrill Lynch has provided committed financing in connection
with the Merger. The Merger of Edgewell and Harry's brings together
complementary capabilities to create a next-generation consumer products
platform with an expansive runway for accelerated topline growth and enhanced
value creation. We have incurred costs associated with the acquisition of
Harry's totaling $1.8 in the third quarter of fiscal 2019.
On March 1, 2018, we completed the acquisition of Jack Black, a leading U.S.
based luxury men's skincare products company, for approximately $90.2, net of
cash acquired. The acquisition will create opportunities to expand our personal
care portfolio in growing categories in the U.S. and globally, while nurturing
the brand equity of Jack Black. The results of Jack Black for the
post-acquisition period are included within our results since the acquisition
date. Refer to Note 3 of our Notes to Condensed Consolidated Financial
Statements for further discussion related to the acquisition of Jack Black.

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Impairment

During the third quarter of fiscal 2019, we determined a triggering event had
occurred as a result of a decline in our market capitalization after a decline
in the Company's share price during the quarter. We performed an interim
impairment analysis using financial information through June 30, 2019 and
forecasts for cash flows developed using our three-year strategic plan. The
interim impairment review was performed on all long-lived assets, including
definite lived intangibles, all reporting units, and indefinite-lived intangible
assets. The results of the impairment review indicated the carrying value of the
goodwill of the Wet Shave and Infant Care reporting units were greater than
their respective fair values, resulting in a non-cash goodwill impairment of
$358.0 and $29.0, respectively. Additionally, the carrying value of the Wet Ones
and Diaper Genie trade names were greater than the fair values and resulted in
non-cash impairments of the indefinite-lived intangible assets of $87.0 and
$75.0, respectively. Refer to Note 7 of our Notes to Condensed Consolidated
Financial Statements for further discussion on the interim impairment test. We
will continue to evaluate the fair value of our reporting units and
indefinite-lived intangible assets in the fourth quarter as a part of our annual
impairment review on July 1.
Refer to additional discussion around goodwill and intangible asset valuation in
our 2018 Annual Report.
Project Fuel
In February 2018, we announced Project Fuel, an enterprise-wide transformational
initiative that is designed to address all aspects of our business and cost
structure, simplifying and transforming the organization, structure and key
processes that will provide the necessary catalyst for further re-investment in
the Company's growth objectives while enabling us to achieve our desired future
state operations.
Initial costs incurred for Project Fuel were related to efforts to fully define
the scope and reach of the project. In addition, the Company has incurred global
severance costs related to the reduction of overhead. The Company has incurred
costs and realized savings for Project Fuel in fiscal 2018 and for the first
nine months of fiscal 2019 and expects to incur additional costs and realize
additional savings during the remainder of fiscal 2019 through fiscal 2021.
For further information on our restructuring projects, refer to Note 4 of Notes
to Condensed Consolidated Financial Statements.
Feminine and Infant Care Evaluation Costs
In February 2019, we began exploring strategic alternatives for the Feminine
Care and Infant Care businesses, including the potential sale of one or both
businesses. We concluded our strategic review of the Feminine Care business and
have elected to retain the business at this time and have determined that there
is currently more opportunity for value creation and de-leveraging by retaining
the business given improving business trends and outlook. We continue to explore
strategic alternatives for the Infant Care business. We incurred $0.5 and $1.5
during the three and nine months ended June 30, 2019, respectively, of advisory
expenses in connection with the evaluation of the Feminine and Infant Care
businesses. The costs are related to consulting fees for the analysis of
strategic alternatives of the Feminine and Infant Care businesses and are
included in Selling, general and administrative expenses ("SG&A") on the
Condensed Consolidated Statement of Earnings.
Sun Care Reformulation Costs
As a result of discussions with one of our suppliers during the fourth quarter
of fiscal 2018, we made certain supply chain and procurement decisions,
including implementing a raw material substitution due to anticipated regulatory
changes related to European Union Regulation (EC) No. 1907/2006 concerning the
Registration, Evaluation, Authorization, and Restriction of Chemicals,
establishing a European Chemical Agency ("REACH"), that affect the supply chain
of select Sun Care products. To align with our raw material selection process,
we chose to make these changes at that time, in advance of Sun Care season, to
minimize potential impact to our distribution channels during the peak sales
period. We incurred $1.0 and $1.5 in Sun Care reformulation costs during the
three and nine months ending June 30, 2019, respectively, and expect to incur
additional charges over the remainder of fiscal 2019 related to these supply
chain decisions. The costs associated with the Sun Care reformulation are
included in Costs of products sold on the Condensed Consolidated Statement of
Earnings.
Sale of Playtex Gloves Business
On October 26, 2017, the Company finalized its sale of the Playtex gloves
business to a household products company (the "Acquirer") for $19.0. The sale
was finalized on October 26, 2017. The sale provides the Acquirer with
indefinite and exclusive worldwide rights to the Playtex trademark for gloves.
The strategic sale of the Playtex gloves business allows the Company to better
focus and utilize its resources on its other product lines. Total assets sold
were $3.7, resulting in a pre-tax gain on sale of $15.3 in fiscal 2018. Refer to
Note 3 of our Notes to Condensed Consolidated Financial Statements for further
discussion related to the sale of the Playtex gloves business.


                                       36
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Executive Summary
The following is a summary of key results for the third quarter and first nine
months of fiscal 2019 compared to the third quarter and first nine months of
fiscal 2018. Net earnings and earnings per share ("EPS") for the time periods
presented were impacted by impairment charges, restructuring activities, Harry's
acquisition costs, Feminine and Infant Care evaluation costs, Sun Care
reformulation costs, Jack Black acquisition and integration costs, investor
settlement expenses, the gain on the sale of the Playtex gloves business, the
related tax impact from those costs, and the impact of the Tax Act as described
in the table below. The impact of these items on reported net earnings and EPS
are provided as a reconciliation of net earnings and EPS to adjusted net
earnings and adjusted diluted EPS, both of which are Non-GAAP measures.

Third Quarter of Fiscal 2019 • Net sales in the third quarter of fiscal 2019 were $609.2, down 1.8%

compared to the prior year quarter, inclusive of a 1.5% decline due to

currency movements. Excluding the impact of currency movements, organic

net sales decreased 0.3% primarily driven by declines in the Wet Shave and

Feminine Care businesses, partly offset by growth in the Sun and Skin Care

business.

• Net loss in the third quarter of fiscal 2019 was $441.4 compared to net

earnings of $12.1 in the prior year quarter. On an adjusted basis, as

illustrated in the following table, net earnings for the third quarter of

fiscal 2019 increased 23.0% to $60.5. The increase was primarily driven by

lower advertising and promotional ("A&P") and overhead spend partially

       offset by lower gross margins.


•      Net loss per diluted share during the third quarter of fiscal 2019 was

$8.16 compared to net earnings per diluted share of $0.22 in the prior

year quarter. On an adjusted basis, as illustrated in the following table,

net earnings per diluted share during the third quarter of fiscal 2019 was

       $1.11 compared to $0.91 in the prior year quarter.


                                                        Quarter Ended June 30,
                                              Net Earnings                   Diluted EPS
                                           2019           2018           2019           2018
Net (Loss) Earnings and Diluted EPS -
GAAP                                   $   (441.4 )$     12.1$    (8.16 )$     0.22
Impairment charges                          549.0           24.4          10.14           0.45
Restructuring and related costs (1)           8.9           15.9           0.17           0.29
Harry's acquisition and integration
costs (2)                                     1.8              -           0.03              -
Feminine and Infant Care evaluation
costs (3)                                     0.5              -           0.01              -
Sun Care reformulation costs (4)              1.0              -           0.02              -
Jack Black acquisition and integration
(5)                                           0.1            2.3              -           0.05
Sale of Playtex Gloves                          -            0.6              -           0.01
Impact of dilutive shares (6)                   -              -          (0.01 )            -
Income taxes                                (59.4 )         (6.1 )        (1.09 )        (0.11 )
Adjusted Net Earnings and Adjusted
Diluted EPS - Non-GAAP                 $     60.5$     49.2     $     

1.11 $ 0.91


Weighted-average shares outstanding -
Diluted                                                                    54.1           54.1


(1)    Restructuring costs associated with Project Fuel, an enterprise-wide

transformational initiative that is designed to address all aspects of our

business and cost structure, simplifying and transforming the

organization, structure and key processes that will enable us to achieve

our desired future state operations. Includes SG&A of $1.8 and $0.5 for

the three months ended June 30, 2019 and 2018, respectively, associated

       with certain information technology enablement expenses for Project Fuel.

(2) Includes pre-tax SG&A of $1.8 for the three months ended June 30, 2019 for

       costs associated with the acquisition of Harry's.


(3)    Includes pre-tax SG&A of $0.5 for the three months ended June 30, 2019,

associated with consulting costs for the Company to evaluate segments.


(4)    Includes pre-tax Cost of products sold of $1.0 for the three months ended
       June 30, 2019, associated with supply chain changes on select Sun Care
       products.

(5) Includes pre-tax SG&A of $0.1 and $0.5 for the three months ended June 30,

2019 and 2018, respectively, for costs associated with the integration of

the Jack Black acquisition. Additionally, acquisition and integration

costs of $1.8 were included in Cost of products sold for the three months

ended June 30, 2018.

(6) GAAP EPS was calculated using basic weighted average shares outstanding

       due to a net loss. Adjusted diluted EPS was calculated using diluted
       weighted average shares outstanding.



                                       37
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First Nine Months of Fiscal 2019 • Net sales for the first nine months of fiscal 2019 decreased 4.9% to

$1,613.0, inclusive of a 1.0% increase as a result of the acquisition of

Jack Black, a 0.1% decline from the sale of the Playtex gloves business,

and a 1.5% decrease due to currency movements. Excluding the impact of the

acquisition and currency movements, organic net sales decreased 4.3% in

the first nine months of fiscal 2019 as compared to the prior year period,

       as a result of declines across all segments, particularly in the Wet Shave
       and Feminine Care businesses.

• Net loss for the first nine months of fiscal 2019 was $393.6 as compared

to net earnings of $83.9 in the prior year. On an adjusted basis, as

illustrated in the following table, net earnings for the first nine months

of fiscal 2019 increased 8.2% to $142.2. The increase in adjusted net

earnings was the result of lower A&P and overhead expenses partially

offset by lower net sales and decreased gross margin percentage.

• Net loss per diluted share during the first nine months of fiscal 2019 was

$7.27 compared to net earnings per diluted share of $1.54 in the prior

year period. On an adjusted basis, as illustrated in the following table,

net earnings per diluted share during the first nine months of fiscal 2019

were $2.62 compared to $2.41 in the prior year.


                                                      Nine Months Ended June 30,
                                              Net Earnings                   Diluted EPS
                                           2019           2018           2019           2018

Net Loss and Diluted EPS - GAAP $ (393.6 )$ 83.9$ (7.27 )$ 1.54 Impairment charge

                           549.0           24.4          10.14           0.45
Restructuring and related costs (1)          42.8           19.6           0.79           0.36
Harry's acquisition and integration
costs (2)                                     1.8              -           0.03              -
Feminine and Infant Care evaluation
costs (3)                                     1.5              -           0.03              -
Sun Care reformulation costs (4)              1.5              -           0.03              -
Jack Black acquisition and integration
(5)                                           1.1            4.9           0.02           0.09
Investor settlement expense (6)               0.9              -           0.02              -
Gain on sale of Playtex gloves                  -          (15.3 )            -          (0.28 )
Impact of dilutive shares (7)                   -              -          (0.01 )            -
Income taxes (8)                            (62.8 )         13.9          (1.16 )         0.25
Adjusted Net Earnings and Adjusted
Diluted EPS - Non-GAAP                 $    142.2$    131.4     $     

2.62 $ 2.41


Weighted-average shares outstanding -
Diluted                                                                    54.1           54.6


(1) Restructuring costs associated with Project Fuel includes SG&A of $5.1 and

       $0.5 for the nine months ended June 30, 2019 and 2018, respectively,
       associated with certain information technology enablement expenses.

(2) Includes pre-tax SG&A of $1.8 for the nine months ended June 30, 2019 for

       costs associated with the acquisition of Harry's.


(3)    Includes pre-tax SG&A of $1.5 for the nine months ended June 30, 2019,

associated with consulting costs for the Company to evaluate segments.


(4)    Includes pre-tax Cost of products sold of $1.5 for the nine months ended
       June 30, 2019, associated with supply chain changes on select Sun Care
       products.

(5) Includes pre-tax SG&A of $1.1 and $3.1 for the nine months ended June 30,

2019 and 2018, respectively, for costs associated with the integration of

the Jack Black acquisition. Additionally, acquisition and integration

costs of $1.8 were included in Cost of products sold for the nine months

ended June 30, 2018.

(6) Includes pre-tax SG&A of $0.9 for the nine months ended June 30, 2019,

associated with a settlement with an investor.

(7) GAAP EPS was calculated using basic weighted average shares outstanding

       due to a net loss. Adjusted diluted EPS was calculated using diluted
       weighted average shares outstanding.

(8) Includes Income tax expense of $4.7 in the first nine months of fiscal

       2019 related to the fiscal 2018 one-time transition tax from the Tax Act.
       The impact of the Tax Act totaling $17.4 in Income tax expense for the
       first nine months of fiscal 2018 in addition to the tax impact of the
       other adjustments to Net Earnings and Diluted EPS - GAAP.



                                       38
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Operating Results
The following table presents changes in net sales for the third quarter and
first nine months of fiscal 2019, as compared to the corresponding periods in
fiscal 2018, and provides a reconciliation of organic net sales to reported
amounts.

Net SalesNet Sales - Total Company
Quarter and Nine Months Ended June 30, 2019
                                               Q3        % Chg     Nine Months      %Chg
Net sales - prior year                      $ 620.6$    1,697.0
Organic                                        (1.9 )   (0.3 )%          (72.2 )   (4.3 )%
Impact of Jack Black acquisition                  -        -  %           17.1      1.0  %
Impact of Playtex gloves sale                     -        -  %           (1.0 )   (0.1 )%
Impact of currency                             (9.5 )   (1.5 )%          (27.9 )   (1.5 )%
Net sales - current year                    $ 609.2     (1.8 )%   $    1,613.0     (4.9 )%


For the third quarter of fiscal 2019, net sales were $609.2, a 1.8% decrease
when compared with the prior year quarter. Excluding the impact of currency
movements, organic net sales decreased 0.3% driven by declines in the Wet Shave
and Feminine Care businesses, partly offset by increased organic sales in the
Sun and Skin Care business. Organic net sales declined in North America by 2.7%
while International organic net sales grew 4.2%. Lower sales in North America
were driven by declines in Wet Shave, due to distribution losses, lower pricing
and an unfavorable comparison to the prior year launch of Intuition f.a.b.®,
partly offset by growth in Sun and Skin Care. Sun and Skin Care growth reflected
favorable timing of promotions and returns and the benefit from the shift in
timing of the Easter holiday, offset by lower volumes, which were impacted by
lower consumption rates, due to unfavorable weather across most markets. In
International markets, organic sales increased in Wet Shave, benefiting from a
favorable comparison to prior year sales in Japan, and in Sun and Skin Care,
driven by strong Bulldog sales.
For the first nine months of fiscal 2019, net sales decreased 4.9%. Excluding
the impact of the acquisition of Jack Black, the Playtex gloves sale, and
currency movements, organic net sales decreased 4.3% versus the prior year
period. From a geographic perspective, organic net sales in North America
declined 6.1% while International organic net sales decreased 1.1%. The decline
in organic net sales was across all segments in North America and International
Wet Shave mainly in Europe, driven by competitive pressure in key retailers and
the anniversary of prior year product launches and promotions.
For further discussion regarding net sales, including a summary of reported
versus organic changes, see "Segment Results."
Gross Profit
Gross profit was $292.2 during the third quarter of fiscal 2019, as compared to
$301.7 in the prior year period. Gross margin as a percent of net sales for the
third quarter of fiscal 2019 was 48.0%, representing a 60 basis point decline
over the prior year gross margin of 48.6%. Excluding $1.0 of costs associated
with the Sun Care reformulation, gross margin as a percent of net sales was
48.1%. The decline was driven primarily by unfavorable price mix due to
increased price and trade investments, mostly in Wet Shave, unfavorable cost mix
due to rising energy costs and maintenance spend and lower absorption rates from
lower volumes across Sun and Skin Care and Feminine Care.
Gross profit was $736.6 during the first nine months of fiscal 2019, as compared
to $802.1 in the prior year period. Gross margin as a percent of net sales for
the first nine months of fiscal 2019 was 45.7%, down 160 basis points as
compared to the prior year period. Excluding $1.5 of costs associated with the
Sun Care reformulation, gross margin as a percent of net sales was 45.8%. A
portion of the decline was a result of unfavorable price mix from price
decreases for Wet Shave and Feminine Care in North America partially offset by
favorable Sun and Skin Care returns. Gross margin was also impacted by lower
volumes in Wet Shave due to competitive pressures, as well as unfavorable cost
mix in Wet Shave and All Other which was partially offset by improvements in Sun
and Skin Care and in Feminine Care.
Selling, General and Administrative Expense
SG&A was $94.8 in the third quarter of fiscal 2019, or 15.6% of net sales, as
compared to $101.3 in the prior year period, or 16.3% of net sales. The
operational improvement in SG&A was largely driven by Project Fuel savings and
lower equity compensation expense.

                                       39
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SG&A was $280.2 in the first nine months of fiscal 2019, or 17.4% of net sales,
as compared to $303.5 in the prior year period, or 17.9% of net sales. The
operational improvement in SG&A was largely driven by savings generated through
our Project Fuel, lower compensation expense, and prior year one-time expenses
such as severance and asset write offs. These savings were offset in part by
higher e-commerce investments.
Advertising and Sales Promotion Expense
For the third quarter of fiscal 2019, A&P was $91.8, down $13.5 as compared to
the prior year period. A&P as a percent of net sales was 15.1%, as compared to
17.0% in the prior year period. The decrease in A&P was primarily driven by
lower spending in Wet Shave and Feminine Care as compared to prior year due to a
decrease in new product releases and a shift in spend to trade spend this fiscal
quarter.
For the first nine months of fiscal 2019, A&P was $191.3, down $38.6 as compared
to the prior year period. A&P as a percent of net sales was 11.9%, as compared
to 13.5% in the prior year period. The decrease in A&P was primarily driven by
lower spending in Wet Shave and Feminine Care as compared to prior year due to a
decrease in new product releases and a shift in spend to trade spend this fiscal
quarter. The Company had increased A&P spend for the Skin Care and Grooming
brands including Bulldog, Hydro grooming, and Jack Black as well as o.b.®
tampons to support a new product launch.
Research and Development Expense
Research and development expense ("R&D") for the third quarter of fiscal 2019
was $12.9, compared to $14.9 in the prior year period. As a percent of sales,
R&D was 2.1% in the third quarter of fiscal 2019 compared to 2.4% in the prior
year period. The reduction in R&D as a percent of sales compared to the prior
year is primarily driven by timing of spend and product development and reduced
headcount.
R&D for the first nine months of fiscal 2019 was $39.5, compared to $46.5 in the
prior year period. As a percent of sales, R&D declined 30 basis points to 2.4%
in the first nine months of fiscal 2019 from 2.7% in the prior year. The
reduction in R&D as a percent of sales compared to the prior year is primarily
driven by timing of spend and product development and reduced headcount.
Interest Expense Associated with Debt
Interest expense associated with debt for the third quarter of fiscal 2019 was
$15.6 compared to $16.5 in the prior year quarter. For the first nine months of
fiscal 2019, interest expense was $48.0 compared to $52.5 in the prior year
period. The decline in interest expense was the result of lower average
outstanding debt compared to the prior year.
Other Expense, Net
Other expense, net was $2.7 in the third quarter of fiscal 2019 compared to $1.9
in the prior year period. Other expense, net was $1.3 during the first nine
months of fiscal 2019, compared to $1.2 during the first nine months of fiscal
2018. Both periods reflect the reclassification of the pension credit from Cost
of products sold and SG&A to Other expense, net. The impact of the pension
benefit was $0.6 and $1.8 in the third quarter and first nine months of fiscal
2019, respectively. The impact of the pension benefit was $1.6 and $5.1 in the
third quarter and first nine months of fiscal 2018. The remaining activity was
related to foreign currency exchange contract gains and losses and the
revaluation of non-functional currency balance sheet exposures.
Income Tax Provision
The effective tax rate for the first nine months of fiscal 2019 was 4.1%
compared to 40.2% in the prior year period. The effective tax rate for the first
nine months of fiscal 2019 includes a $549.0 impairment of goodwill and
intangible assets, a portion of which are non-deductible, resulting in a lower
tax benefit on a net loss. The rate was also unfavorably impacted by a $4.7 net
transitional charge resulting from the enactment of the Tax Act. The effective
tax rate for the prior period includes a $17.4 increase in tax expense related
to net charges from the Tax Act. Excluding the tax impact of impairment charges,
restructuring charges, Harry's acquisition costs, advisory expenses incurred in
connection with the evaluation of the Feminine Care and Infant Care businesses,
Sun Care reformulation charges, Jack Black acquisition and integration costs,
investor settlement expenses, the impact of the Tax Act, and the disposition of
the Playtex gloves business, the adjusted effective tax rate was 24.4% for the
first nine months of fiscal 2019 and fiscal 2018. The adjusted effective tax
rate for fiscal 2019 is expected to be in the range of 23.5% to 25.5%; however,
both the effective tax rate and the adjusted effective tax rate are dependent
upon the mix of earnings in various tax jurisdictions.

                                       40
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The following table presents a reconciliation of the adjusted effective tax rate, which is a Non-GAAP measure:

                             Nine Months Ended June 30, 2019                         Nine Months Ended June 30, 2018
                                                             Adjusted                                               Adjusted
                     Reported          Adjustments (1)      (Non-GAAP)        Reported        Adjustments (1)      (Non-GAAP)
(Loss) earnings
before income
taxes                   (410.4 )     $           598.6     $     188.2           140.3       $        33.6$     173.9
Income tax
(benefit)
provision                (16.8 )                  62.8            46.0            56.4               (13.9 )             42.5
Net (loss)
earnings          $     (393.6 )     $           535.8     $     142.2$      83.9$        47.5$     131.4

Effective tax
rate                       4.1 %                                                  40.2 %
Adjusted
effective tax
rate                                                              24.4 %                                                 24.4 %

(1) Includes adjustments for the impact of the Tax Act, impairment charges,

restructuring charges, Harry's acquisition costs, Feminine and Infant Care

evaluation costs, Sun Care reformulation charges, Jack Black acquisition

       and integration costs, investor settlement expense, and the gain on sale
       of the Playtex gloves business. See reconciliation of net earnings to
       adjusted net earnings.


Savings Initiatives
We expect Project Fuel will generate $225 to $240 in total annual gross savings
by the end of the 2021 fiscal year. It is expected that the savings generated
will be used to fuel investments and brand building in strategic growth
initiatives, offset anticipated operational headwinds from inflation and other
rising input costs, and improve our overall profitability and cash flow.
To implement the restructuring element of Project Fuel, we estimated one-time
pre-tax charges to be approximately $130 to $140, with an additional capital
investment of $60 to $70 through the end of fiscal year 2021.
Project Fuel restructuring charges were $8.9 and $42.8 for the three and nine
months ended June 30, 2019, respectively, bringing cumulative Project Fuel
restructuring charges to $82.7. Project Fuel restructuring charges totaled $15.9
and $19.6 for the three and nine months ended June 30, 2018, respectively.
Additionally, capital expenditures for Project Fuel were $9.5 and $22.4 for the
three and nine months ended June 30, 2019, respectively, bringing cumulative
capital expenditures for Project Fuel to $24.7. Project Fuel related savings
were approximately $33 and $85 for the three and nine months ending June 30,
2019, respectively, bringing cumulative savings to approximately $100.
For further information on our restructuring projects, refer to Note 4 of Notes
to Condensed Consolidated Financial Statements.

Segment Results
The following tables present changes in segment net sales and segment profit for
the third quarter and first nine months of fiscal 2019, compared to the
corresponding period in fiscal 2018, and provide a reconciliation of organic
segment net sales and organic segment profit to reported amounts. For a
reconciliation of segment profit to Earnings before income taxes, refer to Note
15 of Notes to Condensed Consolidated Financial Statements.

Wet Shave
Net Sales - Wet Shave
Quarter and Nine Months Ended June 30, 2019
                                               Q3        % Chg     Nine Months     % Chg
Net sales - prior year                      $ 341.1$     980.4
Organic                                        (5.8 )   (1.7 )%         (48.7 )   (5.0 )%
Impact of currency                             (7.6 )   (2.2 )%         (21.9 )   (2.2 )%
Net sales - current year                    $ 327.7     (3.9 )%   $     909.8     (7.2 )%


Wet Shave net sales for the third quarter of fiscal 2019 decreased 3.9%,
inclusive of a 2.2% decline due to currency movements. Excluding the impact of
currency movements, organic net sales decreased $5.8, or 1.7%, as compared to
the prior year, as volume growth, primarily in Asia Pacific, was more than
offset by the impact of lower pricing and unfavorable product mix in North
America. Total international organic net sales increased 4.9%, with growth in
Men's and Women's System's and Disposables, and was largely attributable to
Japan and the comparison to the prior year period which included significant
inventory reductions. North America organic net sales declined 8.9% reflecting
on-going competitive intensity, cycling of the prior year period's launch of
Intuition f.a.b. and Hydro Sense®, and the impact of lower pricing on our Men's
and Women's Systems products.

                                       41
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Wet Shave net sales for the first nine months of fiscal 2019 decreased 7.2%,
inclusive of a 2.2% decline due to currency movements. Excluding the impact of
currency movements, organic net sales decreased $48.7, or 5.0%. North America
organic net sales was down 9.1%, while International organic net sales decreased
1.4%. Volumes declined in North America across Men's and Women's Systems and
Disposables due to competitive pressures in the Men's and Disposables category,
and the impact of the launch of Intuition f.a.b. in the prior year for Women's
systems. Additionally, North America experienced unfavorable price mix caused by
a price decrease in Men's and Women's Systems. International volumes increased
in Women's Systems and Disposables, while Men's Systems had declines across all
markets. Internationally, unfavorable price mix was caused by increased trade
spend in Men's Systems and Disposables.
Segment Profit - Wet Shave
Quarter and Nine Months Ended June 30, 2019
                                               Q3       % Chg     Nine Months     % Chg
Segment profit - prior year                 $ 55.0$     177.6
Organic                                        0.8      1.5  %          (7.7 )   (4.3 )%
Impact of currency                            (1.7 )   (3.1 )%          (5.1 )   (2.9 )%
Segment profit - current year               $ 54.1     (1.6 )%   $     

164.8 (7.2 )%



Wet Shave segment profit for the third quarter of fiscal 2019 was $54.1, down
$0.9, or 1.6%, inclusive of the impact of currency movements. Excluding the
impact of currency movements, organic segment profit increased $0.8, or 1.5%, as
lower spending and realized Project Fuel savings more than offset the impact of
unfavorable pricing related to a price decrease in North America and higher
product costs.
Wet Shave segment profit for the first nine months of fiscal 2019 was $164.8,
down $12.8 or 7.2%, inclusive of the impact of currency movements. Excluding the
impact of currency movements, organic segment profit decreased $7.7, or 4.3%,
primarily due to lower sales volumes across all categories in North America, and
Men's systems in International markets. Unfavorable price mix was the result of
price decreases in North America and Europe and increased promotional
investments in Asia Pacific. Unfavorable cost mix resulted from product mix,
higher warehousing and distribution costs in Europe, and higher energy and
maintenance spend. The gross margin declines were partially offset by lower A&P
and overheads in support of the Wet Shave segment across all brands.

Sun and Skin Care
Sun and Skin Care segment net sales and segment profit are affected by the
seasonality of Sun Care products. As a result, segment net sales and segment
profit historically have been higher in the second and third quarters of the
fiscal year.
Net Sales - Sun and Skin Care
Quarter and Nine Months Ended June 30, 2019
                                               Q3        % Chg     Nine Months     % Chg
Net sales - prior year                      $ 162.8$     374.2
Organic                                         7.0      4.3  %          (5.4 )   (1.4 )%
Impact of Jack Black acquisition                  -        -  %          17.1      4.6  %
Impact of Playtex gloves disposition              -        -  %          (1.0 )   (0.3 )%
Impact of currency                             (1.4 )   (0.9 )%          (4.6 )   (1.3 )%
Net sales - current year                    $ 168.4      3.4  %   $     380.3      1.6  %


Sun and Skin Care net sales for the third quarter of fiscal 2019 increased 3.4%,
inclusive of a 0.9% decline due to currency movements. Excluding the impact of
currency movements, organic net sales increased $7.0, or 4.3% driven by growth
in all geographic regions with the exception of Asia Pacific. North America
organic net sales increased 5.0%, as the expected shift in phasing of sales to
this fiscal quarter due to the later Easter holiday this year, as well as lower
returns this fiscal quarter, more than offset the impact of weaker category
consumption trends related largely to unfavorable early season weather. Organic
net sales in International markets increased 1.8%, driven by growth in the
Hawaiian Tropic and Bulldog brands.
Sun and Skin Care net sales for the first nine months of fiscal 2019 increased
1.6%, inclusive of a 4.6% increase due to the acquisition of Jack Black, a 0.3%
decline due to the Playtex gloves sale, and a 1.3% decline due to currency
movements. Excluding the impact of acquisitions, the Playtex gloves sale and
currency movements, organic net sales decreased $5.4, or 1.4%, with volume
declines primarily in North America Sun Care impacted by the Sun Care
reformulation project. International Sun Care volume declines were more than
offset by increased Bulldog sales. Sun Care had favorable price mix related to
favorable returns compared to same period in the prior year and timing of
promotions.

                                       42
--------------------------------------------------------------------------------


Segment Profit - Sun and Skin Care
Quarter and Nine Months Ended June 30, 2019
                                               Q3       % Chg     Nine Months     % Chg
Segment profit - prior year                 $ 33.9$      76.3
Organic                                        8.5     25.1  %           1.2      1.6  %
Impact of Jack Black acquisition                 -        -  %           5.3      6.9  %
Impact of Playtex gloves disposition             -        -  %          (0.3 )   (0.4 )%
Impact of currency                            (0.2 )   (0.6 )%          (0.4 )   (0.5 )%
Segment profit - current year               $ 42.2     24.5  %   $      82.1      7.6  %


Segment profit for the third quarter of fiscal 2019 was $42.2, an increase of
$8.3 or 24.5%, inclusive of the impact of currency movements. Excluding the
impact of currency movements, organic segment profit increased $8.5, or 25.1%,
as the benefit from lower product returns and lower product costs more than
offset the impact of higher A&P spending in grooming.
Segment profit for the first nine months of fiscal 2019 was $82.1, an increase
of $5.8 or 7.6%, inclusive of the impact of the Jack Black acquisition, the
Playtex gloves sale, and currency movements. Excluding the impact of the Jack
Black acquisition, the Playtex gloves sale, and currency movements, organic
segment profit increased $1.2, or 1.6%, driven primarily by gross margin
improvements from favorable price mix and cost mix for Sun Care products,
partially offset by volume declines. A&P and overheads increased as a result of
increased support for Grooming products including Bulldog and Hydro Grooming.

Feminine Care
Net Sales - Feminine Care
Quarter and Nine Months Ended June 30, 2019
                                               Q3       % Chg     Nine Months     % Chg
Net sales - prior year                      $ 84.1$     247.0
Organic                                       (2.9 )   (3.4 )%         (16.1 )   (6.5 )%
Impact of currency                            (0.3 )   (0.4 )%          (0.7 )   (0.3 )%
Net sales - current year                    $ 80.9     (3.8 )%   $     230.2     (6.8 )%


Feminine Care net sales for the third quarter of fiscal 2019 decreased $3.2, or
3.8%, inclusive of a 0.4% decline due to the impact of currency movements.
Excluding the impact of currency movements, organic net sales decreased 3.4%,
driven by volume declines across all lines, with the exception of o.b. tampons,
which benefited due to the launch of organic o.b. tampons, and Carefree® liners.
Price mix was unfavorable due to increased trade spend.
Feminine Care net sales for the first nine months of fiscal 2019 decreased
$16.8, or 6.8%, inclusive of a 0.3% decline due to the impact of currency
movements. Excluding the impact of currency movements, organic net sales
decreased 6.5% driven by volume declines in Playtex Gentle Glide® branded
tampons and Stayfree® branded pads, partially offset by growth in Playtex Sport
and o.b. tampons. Price mix was unfavorable due to increased trade spend
investment.
Segment Profit - Feminine Care
Quarter and Nine Months Ended June 30, 2019
                                               Q3       %Chg      Nine Months     % Chg
Segment profit - prior year                 $ 11.0$      25.7
Organic                                        4.7     42.7  %          11.5     44.7  %
Impact of currency                            (0.2 )   (1.7 )%          (0.5 )   (1.9 )%
Segment profit - current year               $ 15.5     41.0  %   $      

36.7 42.8 %



Feminine Care segment profit for the third quarter of fiscal 2019 was $15.5, an
increase of $4.5, or 41.0%, inclusive of a 1.7% decline due to the impact of
currency movements. Excluding the impact of currency movements, organic segment
profit increased $4.7, or 42.7%, driven by lower A&P spending, resulting from a
shift to trade promotion spending, and lower product costs.
Feminine Care segment profit for the first nine months of fiscal 2019 was $36.7,
an increase of $11.0, or 42.8%, inclusive of a decrease of 1.9% for currency
movements. The decline was primarily due to lower A&P related to a shift to
higher trade spend, favorable cost mix driven by favorable production volumes,
and lower overheads. These gains were partially offset by lower gross margins
including volume declines in Playtex Gentle Glide tampons and Stayfree pads, and
unfavorable price mix from the shift to increased trade spend.

                                       43
--------------------------------------------------------------------------------



All Other
Net Sales - All Other
Quarter and Nine Months Ended June 30, 2019
                                               Q3       %Chg      Nine Months     % Chg
Net sales - prior year                      $ 32.6$      95.4
Organic                                       (0.2 )   (0.6 )%          (2.0 )   (2.1 )%
Impact of currency                            (0.2 )   (0.6 )%          (0.7 )   (0.7 )%
Net sales - current year                    $ 32.2     (1.2 )%   $      92.7     (2.8 )%


All Other net sales for the third quarter of fiscal 2019 decreased 1.2%,
inclusive of a 0.6% decline from the impact of currency movements. Excluding the
impact of currency movements, organic net sales decreased 0.6% compared to the
prior year quarter as sales increased in Diaper Genie® and cups and mealtime
products related to the Paw Patrol® launch which were more than offset by
declines in Pet Care.
All Other net sales for the first nine months of fiscal 2019 decreased 2.8%,
inclusive of a 0.7% decline due to the impact of currency movements. Excluding
the impact of currency movements, organic net sales decreased $2.0 or 2.1%, as
declines in volumes of Diaper Genie and infant bottles and unfavorable price mix
from Pet Care products were partially offset by growth in infant cups and
mealtime products.
Segment Profit - All Other
Quarter and Nine Months Ended June 30, 2019
                                              Q3        %Chg      Nine Months     % Chg
Segment profit - prior year                 $ 5.4$      16.8
Organic                                      (1.7 )   (31.5 )%          (5.6 )   (33.3 )%
Impact of currency                           (0.1 )    (1.8 )%          (0.4 )    (2.4 )%
   Segment profit - current year            $ 3.6     (33.3 )%   $      

10.8 (35.7 )%



All Other segment profit for the third quarter of fiscal 2019 was $3.6, a
decrease of $1.8, or 33.3%, inclusive of a decrease of 1.8% for currency
movements. The decline is driven primarily by unfavorable product mix of Diaper
Genie products and higher product costs.
All Other segment profit for the first nine months of fiscal 2019 was $10.8, a
decrease of $6.0 or 35.7%, compared to the prior year period, inclusive of a
2.4% decline due to the impact of currency movements. Excluding the impact of
currency movements, organic segment profit decreased 33.3%, primarily due to
unfavorable cost mix from higher materials and warehousing and distribution
costs, and unfavorable product mix. These declines were partially offset by
lower A&P and overheads in support of the All Other segment.
General Corporate and Other Expenses
                                           Quarter Ended June 30,           Nine Months Ended June 30,
                                            2019             2018              2019              2018
Corporate expenses                     $      13.1$      17.7$        43.5$      55.6
Impairment charge                            549.0              24.4             549.0              24.4
Restructuring and related costs                8.9              15.9              42.8              19.6
Harry's acquisition and integration
costs                                          1.8                 -               1.8                 -
Feminine and Infant Care evaluation
costs                                          0.5                 -               1.5                 -
Sun Care reformulation costs                   1.0                 -               1.5                 -
Jack Black acquisition and integration
costs                                          0.1               2.3               1.1               4.9
Investor settlement expense                      -                 -               0.9                 -
Gain on sale of Playtex gloves                   -               0.6                 -             (15.3 )

General corporate and other expenses $ 574.4$ 60.9 $

     642.1       $      89.2
% of net sales                                94.3 %             9.8 %            39.8 %             5.3 %



                                       44
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For the third quarter of fiscal 2019, general corporate expenses were $13.1, or
2.2% of net sales, compared to $17.7, or 2.9% of net sales, in the prior year
quarter. For the first nine months of fiscal 2019, general corporate expenses
were $43.5, or 2.7% of net sales, compared to $55.6, or 3.3% of net sales, in
the prior year period. Corporate expenses for the third quarter of fiscal 2019
declined due to savings generated through Project Fuel and lower share-based
compensation expense. For the first nine months of fiscal 2019, the declines in
corporate expense were driven by savings generated through Project Fuel,
including lower compensation expense and prior year one-time expenses such as
severance and asset write offs.

Liquidity and Capital Resources
At June 30, 2019, substantially all 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. We manage our worldwide cash
requirements by reviewing available funds among the many subsidiaries through
which we conduct business and the cost effectiveness with which those funds can
be accessed. We generally repatriate a portion of current year earnings from
select non-U.S. subsidiaries only if the economic cost of the repatriation is
not considered material.
The counterparties to deposits consist of several 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 $1,237.6 at June 30, 2019, including $125.0 tied to
variable interest rates. Our total borrowings at September 30, 2018 were
$1,300.2.
As of June 30, 2019, we had outstanding borrowings of $125.0 under our unsecured
revolving credit facility in the U.S. (the "Revolving Facility") and $8.5 of
outstanding letters of credit. Taking into account outstanding borrowings and
outstanding letters of credit at June 30, 2019, $591.5 remains available under
the Revolving Facility. We expect to refinance the Revolving Facility prior to
its maturity date in June 2020. At September 30, 2018, we had outstanding
borrowings of $7.0 under the Revolving Facility.
As of September 30, 2018, we had approximately $185.0 outstanding under the term
loan due April 2019 (the "Term Loan"). On February 6, 2019, we made a $185.0
prepayment to retire the Term Loan. We funded the payment through additional
borrowing on the Revolving Facility.
We had outstanding international borrowings, recorded in Notes payable, of $12.6
and $8.2 as of June 30, 2019 and September 30, 2018, respectively.
In connection with the execution of the Merger Agreement, we entered into a
commitment letter with Bank of America Merrill Lynch pursuant to which Bank of
America Merrill Lynch committed to provide a senior secured revolving credit
facility in an aggregate principal amount of up to $400.0, a senior secured term
loan A facility in an aggregate principal amount of up to $400.0 and a senior
secured term loan B facility in an aggregate principal amount of up to $800.0 in
order to, among other things, finance our obligations under the Merger Agreement
and certain related transactions. The effectiveness of such credit facilities is
subject to the occurrence of customary closing conditions, including the
consummation of the transactions contemplated by the Merger Agreement.
Historically, we have generated and expect to continue to generate positive cash
flows from operations. Our cash flows are affected by the seasonality of our Sun
Care products, resulting in higher net sales and increased cash generated in the
second and third quarter each year. We believe our cash on hand, cash flows from
operations and available borrowing under the Revolving Facility will be
sufficient to satisfy our future working capital requirements, interest
payments, research and development activities, capital expenditures, and other
financing requirements for at least the next 12 months.
Short-term financing needs primarily consist of working capital requirements,
principal, and interest payments on our long-term debt. Long-term financing
needs will depend largely on potential growth opportunities, including
acquisition activity and repayment or refinancing of our long-term debt
obligations. We may, from time-to-time, seek to repurchase shares of our common
stock. Such repurchases, if any, will depend on prevailing market conditions,
our liquidity requirements, contractual restrictions and other factors. 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.
The expected minimum required contribution to our pension plans in fiscal 2019
is $7.3; however, discretionary contributions may also be made. During the first
nine months of fiscal 2019 we contributed $4.7 to our pension plans.
As of June 30, 2019, we were in compliance with the provisions and covenants
associated with our debt agreements.

                                       45
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Cash Flows
A summary of our cash flow activities is provided in the following table:
                                             Nine Months Ended June 30,
                                              2019               2018
Net cash from (used by):
Operating activities                      $     98.2$        181.5
Investing activities                           (26.9 )             (101.1 )
Financing activities                           (57.5 )             (366.8 )
Effect of exchange rate changes on cash         (1.2 )                2.0

Net decrease in cash and cash equivalents $ 12.6$ (284.4 )



Operating Activities
Cash flow from operating activities was $98.2 during the first nine months of
fiscal 2019, compared to cash from operating activities of $181.5 during the
same period in the prior year. The decline in operating cash flow in the first
nine months of fiscal 2019 compared to the prior year period was primarily
driven by working capital changes, including the build of the inventory balance
in North America related to the Sun Care reformulation project and the build of
inventory in Europe in preparation of Brexit. Accounts payable declined related
to the timing of payments at year end and lower current period expenses.
Investing Activities
Cash flow used by investing activities was $26.9 during the first nine months of
fiscal 2019, compared to cash used by investing activities of $101.1 during the
same period in the prior year. The change was primarily due to the acquisition
of Jack Black for $90.3 in the prior year period, offset by the sale of the
Playtex gloves business in fiscal 2018 for $19.0. Capital expenditures totaled
$38.7 during the first nine months of fiscal 2019 and included $22.4 of capital
expenditures in support of Project Fuel, compared to $41.8 during the same
period in the prior year. Additionally, investing cash inflows of $9.0 and $7.2
were reclassified from operating activities during the first nine months of
fiscal 2019 and 2018, respectively, as a result of collections on the deferred
purchase price of accounts receivables sold.
Financing Activities
Net cash used by financing activities was $57.5 during the first nine months of
fiscal 2019, compared to net cash used by financing activities of $366.8 during
the same period in the prior year. During the first nine months of fiscal 2019,
we had $118.0 of additional borrowings under the Revolving Facility, offset by
repayment of the Term Loan for $185.0. During the first nine months of fiscal
2018, net borrowings on the Revolving Facility decreased $245.0 and $124.4 of
cash was used for treasury stock repurchases.

Share Repurchases
During the first nine months of fiscal 2019, we did not repurchase any shares of
our common stock. We have 10.0 shares of common stock available for repurchase
in the future under the Board's authorization to repurchase our common stock.
Any future share repurchases may be made in the open market, privately
negotiated transactions or otherwise, in such amounts and at such times as we
deem appropriate based upon prevailing market conditions, business needs and
other factors.

Commitments and Contingencies
Contractual Obligations
During the first nine months of fiscal 2019, our net borrowings on our revolving
credit facilities were $118.0. As of June 30, 2019, future minimum repayments of
debt are as follows: $0.0 in fiscal 2019, $125.0 in fiscal 2020, $600.0 in
fiscal 2021, and $500.0 in fiscal 2022.
There have been no other material changes in our contractual obligations since
the presentation in our 2018 Annual Report.

                                       46

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