Investment Thesis
Energizer exhibits severe financial distress with critical debt servicing concerns: interest coverage of 0.2x indicates the company cannot cover interest expense from operating income. Combined with a 19.08x debt-to-equity ratio and only 0.5% net margins, the company faces a fragile capital structure despite positive cash flow generation.
Strengths
- Operating cash flow of $147.8M demonstrates ability to generate cash despite profitability challenges
- Free cash flow of $104.8M after capex provides some debt service capacity
- Gross margin of 36.2% shows product pricing power in consumer battery/personal care markets
Risks
- Interest coverage ratio of 0.2x - company cannot service debt from operating income, indicating high default risk
- Extreme leverage with $3.3B debt on only $173.2M equity (19.08x debt-to-equity) creates unsustainable capital structure
- Minimal profitability (0.5% net margin, 1.2% operating margin) leaves no margin for error; modest 2.3% revenue growth insufficient to improve trajectory
- Stockholders equity of $173.2M is extremely thin relative to $4.4B asset base; company is technically asset-negative
- ROE of 3.9% and ROA of 0.2% indicate capital destruction
Key Metrics to Watch
- Interest coverage ratio - critical threshold is 1.0x; current 0.2x indicates imminent refinancing risk
- Operating margin trend - must improve above 3% to sustainably service debt from operations
- Debt levels and refinancing activities - watch for covenant violations or debt restructuring announcements
- Operating cash flow stability - current $147.8M is lifeline; decline would trigger distress
Financial Metrics
Revenue
1.4B
Net Income
6.7M
EPS (Diluted)
$3.32
Free Cash Flow
104.8M
Total Assets
4.4B
Cash
172.5M
Profitability Ratios
Gross Margin
36.2%
Operating Margin
1.2%
Net Margin
0.5%
ROE
3.9%
ROA
0.2%
FCF Margin
7.4%
Balance Sheet & Liquidity
Current Ratio
2.05x
Quick Ratio
1.03x
Debt/Equity
19.08x
Debt/Assets
96.1%
Interest Coverage
0.22x
Long-term Debt
3.3B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T08:49:56.902224 |
Data as of: 2026-03-31 |
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