SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 25, 2000
ENERGIZER HOLDINGS, INC.
____________________________
(Exact name of Registrant as specified in its charter)
MISSOURI 1-15401 43-1863181
_________________________________________________________
(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification Number)
Incorporation)
800 CHOUTEAU AVENUE, ST. LOUIS, MISSOURI 63102
___________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(314) 982-2000
____________
(Registrant's telephone number, including area code)
Item 5. Other Events
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
Energizer Holdings, Inc. and its representatives may from time to time make
written or verbal statements, including statements regarding its businesses and
their respective markets, projections of future performance, statements of
management's plans and objectives, forecasts of market trends and other matters.
These statements, to the extent they are not historical fact, may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements may be contained in Energizer's
filings with the Securities and Exchange Commission, press releases, and written
or oral presentations made by representatives of Energizer to analysts, rating
agencies, shareholders, news organizations and others. No assurance can be
given that the results in any forward-looking statements will be achieved and
actual results could be affected by one or more factors which could cause them
to differ materially. In order to maximize, to the fullest extent possible, the
protections of the safe harbor established in the Private Securities Litigation
Reform Act of 1995, Energizer wishes to ensure that any written or oral
forward-looking statements made by it or on its behalf are accompanied by a
reference to meaningful cautionary statements.
All forward-looking statements made by or on behalf of Energizer are hereby
qualified in their entirety by reference to the following important factors,
among others, that could affect Energizer's businesses and cause actual results
to differ materially from those projected. Any forward-looking statement speaks
only as of the date on which such statement is made, and Energizer undertakes no
obligation to update such statement to reflect events or circumstances arising
after such date.
GENERAL ECONOMIC CONDITIONS CAN SIGNIFICANTLY AFFECT ENERGIZER'S FINANCIAL
RESULTS.
Energizer's financial results can be significantly affected by general
economic conditions, inflationary pressures, high labor costs and unforeseen
changes in consumer demand or buying patterns. Potential limitations on
Energizer's ability to generate sufficient internal cash flows, interest rate
fluctuations and other capital market conditions may negatively affect
energizer's ability to generate sufficient internal cash flows, interest rate
fluctuations and other capital market conditions may negatively affect
Energizer's ability to support capital expansion plans, share repurchase
programs, general operations and research and development and advertising and
promotional activities. Changes in accounting standards applicable to Energizer
may also have a negative impact on its results of operations. Significant
declines or extreme volatility in U.S. or foreign stock markets, or segments of
those markets, may have a negative impact on economic growth in the United
States, and economic crises in other regions of the world may also have a
negative impact. Uncertainty surrounding possible political candidates and
elections in the year 2000 may affect economic conditions in the United States.
BECAUSE OF THE IMPORTANCE OF ENERGIZER'S FOREIGN OPERATIONS, POLITICAL OR
ECONOMIC TURMOIL IN OTHER COUNTRIES MAY CAUSE ENERGIZER'S PROFITS TO DECLINE OR
PUT ITS ASSETS AT RISK.
The Energizer business is currently conducted on a worldwide basis.
Consequently, Energizer is subject to a number of significant risks associated
with its subsidiaries doing business in foreign countries. The operating
profits of Energizer may decline because of changes in the value of local
currencies, or because of hyperinflationary conditions in developing economies.
Other risks and considerations include:
- - the effect of foreign income and withholding taxes and the U.S. tax
implications of foreign source income and losses;
- - the possibility of expropriation, confiscatory taxation or price controls;
- - adverse changes in local investment or exchange control regulations;
- - difficulties inherent in operating in countries with less developed legal
systems;
- - political instability, government nationalization of business or
industries, government corruption and civil unrest; and
- - restrictions on the flow of capital between countries.
While these risks can affect any business with foreign operations, they assume
special importance for Energizer because of the nature of Energizer's business
and the significance of its foreign operations to Energizer. Approximately half
of Energizer's sales and a third of its profits arise out of foreign operations,
and a significant portion of its production capacity is located overseas.
Negative economic conditions in Asian and Latin American countries in the past
several years have significantly decreased Energizer's operating profits, and
although those conditions appear to be improving, Energizer's operations in
those countries may not be able to regain their former levels of profitability.
Energizer's subsidiaries have manufacturing facilities in several Asian
countries that have undergone or are currently undergoing political unrest, and
any ongoing instability in those countries could affect Energizer's production
levels.
Because the manufacture of batteries involves the use of industrial
materials, chemicals and other potentially hazardous substances, Energizer's
facilities in the U.S. and other developed nations are subject to a broad range
of laws and regulations relating to the environment. In many developing
countries in which the Energizer business is operated there has not been
significant governmental regulation relating to the environment, occupational
safety, employment practices or other business matters routinely regulated in
the United States. As such economies develop, it is possible that new
regulations may increase the expense and risk of doing business in such
countries. In addition, social legislation in many countries in which the
Energizer business operates may result in significantly higher expenses
associated with terminating employees, distributors, or joint ventures and with
closing manufacturing facilities.
CHANGES IN TECHNOLOGY MAY CAUSE ENERGIZER'S SALES AND PROFITS TO DECLINE IF THE
PRIMARY BATTERIES WHICH ENERGIZER PRODUCES CANNOT COMPETE, ON A PRICE OR
PERFORMANCE BASIS, WITH NEW BATTERY TECHNOLOGIES OR OTHER SOURCES OF PORTABLE
POWER.
The battery industry has been notable for the pace of innovations in
product life, product design and applied technology. Energizer and its
competitors have made and continue to make significant investments in research
and development with the goal of further innovation. If competitors introduce
new or enhanced products that significantly outperform Energizer's, or if they
develop or apply manufacturing technology which permits them to manufacture
batteries at a significantly lower cost relative to Energizer's, Energizer may
be unable to compete successfully in the market segments affected by these
changes. For example, new battery technologies that are currently being
investigated, but are not yet commercially viable, may make currently marketed
alkaline batteries obsolete. Pre-emptive patent rights, restrictions on
Energizer's ability to expand or modify manufacturing capacity or constraints on
Energizer's research and development activity may limit Energizer's ability to
introduce products that are competitive on a performance basis. Technological
or design changes in portable electronic and other devices that utilize
batteries as a power source may significantly affect the demand for batteries.
Continuing improvements in the service life of primary (non-rechargeable)
batteries, improvements in rechargeable battery performance (including
improvements in size, the time required for recharge, and the duration of each
discharge) and increasing consumer acceptance of rechargeable batteries, may
also negatively affect the number of primary batteries sold by Energizer.
ENERGIZER OPERATES IN A HIGHLY COMPETITIVE INDUSTRY.
The battery industry is highly competitive, both in the United States and
on a global basis, as a number of large battery manufacturers compete for
consumer acceptance and, increasingly, limited retail shelf space. Competition
is based upon brand perceptions, product performance, customer service and
price. Energizer's ability to compete effectively may be affected by a number
of factors:
- - Energizer's primary competitor, Duracell International, Inc., a subsidiary
of The Gillette Company, has substantially greater financial, marketing and
other resources, and greater market share, than Energizer does. Because of its
ownership by Gillette, it also has significant advantages in distribution, sales
and negotiating leverage with retailers.
- - Energizer's competitors may have lower production, sales and distribution
costs, and higher profit margins, than Energizer, which may enable them to
compete more aggressively in offering retail discounts and other promotional
incentives.
- - The offering of private-label batteries by retail chains may create
significant pricing pressure and may also increase consumer perceptions that
batteries are a commodity product.
- - Loss of key retail customers to competitors, or significant penetration of
the U.S. market by foreign battery manufacturers, may erode Energizer's market
share.
- - Product improvements or effective advertising campaigns by competitors, or
increased demand for rechargeable batteries, may weaken consumer demand for
Energizer's products. Energizer is introducing its super-premium "Energizer e2"
brand of alkaline batteries in the summer of 2000. Consumer response to the new
brand is difficult to predict, and sales may be lower than anticipated.
- - Changes in consumer preferences from carbon zinc to alkaline batteries in
developing countries may benefit Energizer's competitors and erode Energizer's
market share in those countries.
CONSOLIDATION OF THE RETAIL TRADE MAY PUT ENERGIZER AT A DISADVANTAGE IN ITS
DEALINGS WITH RETAILERS.
During the past decade, retail sales of consumer products, including
battery and lighting products, have been increasingly consolidated in a small
number of regional and national mass merchandisers and warehouse clubs. This
trend towards consolidation is occurring on a worldwide basis as well as in the
United States. As a result of this consolidation, a significant percentage of
Energizer's sales are attributable to a limited group of customers. This
consolidation gives Energizer's customers great leverage in demanding price and
promotional concessions. Because of the importance of these key customers to
Energizer, price or promotional demands by such customers, or reductions in
purchases or loss of their accounts, could have a significant adverse impact on
Energizer's operating profits.
INCREASES IN THE PRICE OF RAW MATERIALS MAY CAUSE THE COST OF MANUFACTURING TO
INCREASE AND CONSEQUENTLY CAUSE ENERGIZER'S PROFITS TO DECLINE.
The principal raw materials used in the Energizer business - manganese
dioxide, zinc, acetylene black and potassium hydroxide -- are sourced on a
regional or global basis, and the prices of those raw materials are susceptible
to currency fluctuations and price fluctuations due to transportation,
government regulations, price controls, economic climate, or other unforeseen
circumstances. Energizer manages exposure to changes in the prices of its raw
materials by hedging certain of its requirements and by making forward
purchases, but there is no guarantee that those efforts will be effective, and
operating profits may decline if raw material price increases are not able to be
passed on to customers.
ENVIRONMENTAL LIABILITIES AND COMPLIANCE WITH ENVIRONMENTAL LAWS MAY INCREASE
ENERGIZER'S EXPENSES OF DOING BUSINESS AND CONSEQUENTLY CAUSE ENERGIZER'S
PROFITS TO DECLINE.
Because the manufacture of batteries involves the use of industrial
materials, chemicals and other potentially hazardous substances, Energizer's
facilities are subject to a broad range of federal, state, local and foreign
laws and regulations relating to the environment. While Energizer has not
experienced any material adverse impact on its operations as a result of such
laws and regulations, Energizer cannot guarantee that current or future
regulations might not have such an impact on its business, financial condition
or results of operations.
Energizer has been and is subject to a number of proceedings related to its
disposal of industrial and hazardous material at off-site disposal locations.
These proceedings have been brought under federal and state statutes requiring
clean-up of such locations, regardless of fault or the lawfulness of the
original disposal. Liability under these statutes is typically joint and
several, meaning that a liable party may be responsible for all of the costs
incurred in investigating and cleaning up contamination at a site. As a
practical matter, however, liability is generally shared by all of the
financially viable responsible parties. Although Energizer does not currently
anticipate that its liability under these proceedings, individually or as a
whole, will have a materially adverse impact on its business, financial
condition or results of operation, it cannot guarantee that such will be the
case. Energizer also cannot estimate the impact of environmental regulations or
proceedings which may be enacted or brought in the future.
LEGAL AND ADMINISTRATIVE MATTERS MAY INCREASE ENERGIZER'S EXPENSES OF DOING
BUSINESS AND CONSEQUENTLY CAUSE ENERGIZER'S PROFITS TO DECLINE.
Although no significant litigation is now pending or threatened, legal and
administrative proceedings related to Energizer's businesses, including product
liability claims and employment claims, may be brought in the future, which
could be adverse to Energizer. Energizer maintains internal controls and
compliance programs to prevent violations which could give rise to such claims,
but there can be no assurance that such controls will be effective. In
addition, new laws and regulations, policies on enforcement, or judicial and
administrative interpretations of existing laws or regulations, may have an
adverse impact on Energizer's results of operations.
COST REDUCTIONS AND TAX AND OTHER BENEFITS ANTICIPATED FROM RESTRUCTURING
ACTIVITIES MAY NOT BE REALIZED.
Energizer has closed various battery production facilities during the past
several years and has recorded provisions for restructuring which have reduced
current earnings. It is possible that it may determine in the future to close
additional facilities and consolidate production capacity in remaining
facilities, in which event it would record additional provisions for
restructuring. The recorded provisions may not be sufficient to cover
unanticipated expenses which may be generated by such restructuring, and
additional charges may have to be recorded. Energizer may also be unable to
realize the cost reductions and tax and other benefits it anticipates from
restructuring. Significant additional expenses or failure to achieve
anticipated benefits resulting from such restructuring may have an adverse
effect on future financial results.
SUMMARY
The foregoing list of potential risk factors is not exhaustive, and new
factors may emerge which could significantly impact Energizer's businesses.
Such additional factors, including, but not limited to, factors discussed from
time to time in Energizer's reports filed with the Securities and Exchange
Commission, could also affect Energizer's actual results and cause those results
to differ materially from those expressed in any forward-looking statements
issued by Energizer or its representatives. It is impossible for Energizer's
management to predict such factors, or the likelihood of the factors listed
above, and therefore forward-looking statements should not be relied upon as a
prediction of actual future results.
SIGNATURES:
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENERGIZER HOLDINGS, INC.
By: /s/ Harry L. Strachan, III
Harry L. Strachan, III
Vice President and General Counsel
Dated: April 25, 2000
