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Energizer N.A. Battery Sales Slip 3%

11/02/2005 12:23:00 PM Eastern

St. Louis — The hurricane season took its toll on battery maker Energizer Holdings in the company’s fiscal fourth quarter, with North American battery sales in the period edging downward 3 percent to $320.5 million, from $331.7 million in the year-ago three months.

Energizer blamed the North American battery sales drop on the fact the company’s fiscal fourth quarter last year did $40 million in hurricane related sales volume, compared with about $16 million in the three month period ending Sept. 30.

Volume of large-cell-sized batteries, the products most influenced by hurricane demand, decreased 22 percent in the fourth quarter of this year. Absent hurricane-driven volume declines, sales increased 6 percent in the current fourth quarter, said Energizer.

The North American battery business at Energizer recorded $72.7 million in operating profit during the fourth quarter, down from $88.9 million in the year-ago three months. Lower gross profit was partially offset by lower overhead. The lower gross profit was affected by lower sales and higher product costs.

Sales of alkaline batteries in the fourth quarter decreased to $344.8 million, from $356.2 million in the same period last year. Carbon zinc battery sales dropped to $64.6 million, from $65.1 million in the period. The company’s other batteries sales business, which includes rechargeable and lithium cells moved up to $129.7 million in the fourth quarter from a prior-year $114.8 million.

Energizer said lower hurricane related battery consumption reduced the U.S. retail battery category by 7 percent in value during the quarter vs. the same period in 2004. Retail consumption of Energizer products decreased an estimated 3 percent in value for the same period.

In the fiscal 12 months, sales in the North American battery business increased 5 percent, hitting $1.17 billion, from $1.12 billion the previous year, due primarily to higher volume, partially offset by unfavorable pricing and product mix.

Gross profit for the year dropped $6.4 million as the benefit of higher sales was offset by unfavorable pricing and product mix and higher product costs were partially offset by favorable currency. Segment profit decreased to $295.7 million in the 12 months, down from $298.2 million year-on-year.

Consolidated Energizer sales in the fourth quarter rose 5 percent, reaching $793.7 million, from $756.2 million in the same three months the previous year. Net income came in at $53.3 million, compared with $60.3 million in the same period the prior year.

For the 12 months, consolidated sales hit nearly $3 billion, up from $2.8 billion the previous year. Net income for the 12 months reached $286.4 million, up from a year-ago $267.4 million.

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