Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Q1 2020 Earnings Presentation
27 slides from Spectrum Brands's earnings presentation, Jan 30, 2020
Slide 1: Fiscal 2020 First Quarter Earnings Call
Fiscal 2020 First Quarter Earnings Call January 30, 2020
Slide 2: Agenda
Agenda • Introduction Kevin Kim Divisional Vice President, Investor Relations • CEO Overview and Outlook David Maura Chairman and Chief Executive Officer • Financial Review Jeremy Smeltser Chief Financial Officer • Business Review Randy Lewis Chief Operating Officer • Q&A David Maura Jeremy Smeltser
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain matters discussed in this presentation, with the exception of historical matters, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding our
Slide 4: Reconciliation of Non-GAAP Financial Measurements
Reconciliation of Non-GAAP Financial Measurements Management believes that certain non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Within this presentation, including the table
Slide 5: CEO Overview and Outlook
CEO Overview and Outlook David Maura Chairman and Chief Executive Officer
Slide 6: First Quarter 2020 – Total SPB
First Quarter 2020 – Total SPB KEY TAKEWAYS Net Sales Adj. EBITDA • Organic net sales decreased -1.0% -11.4% 0.3% ‐ Organic growth in HPC and Global Pet Care, while timing $880M $115M issues in Home & Garden and $871M $102M HHI drove us flat overall • Q1 2020 adjusted EBITDA decline was in line with
Slide 7: CEO Overview and Outlook
CEO Overview and Outlook • We reaffirm fiscal 2020 net sales, adjusted EBITDA and adjusted free cash flow targets • Home & Personal Care had a standout quarter and reported its first quarterly growth in over a year • Global Pet Care: fifth consecutive quarter of topline growth and third consecutive
Slide 8: Financial Review
Financial Review Jeremy Smeltser Chief Financial Officer
Slide 9: First Quarter 2020 – Consolidated Results
First Quarter 2020 – Consolidated Results KEY TAKEWAYS Net Sales Adj. EBITDA • Organic net sales decreased -1.0% -11.4% 0.3% • Adjusted EBITDA grew in Global $880M $115M Pet Care and HPC, but were $871M $102M offset by declines in Home & Garden and HHI • Adjusted EBITDA margin drivers: ‐ Headwinds:
Slide 10: Q1 Financial Review (cont’d)
Q1 Financial Review (cont’d) • Q1 interest expense from continuing operations of $34.8 million decreased $22.2 million driven by lower debt levels • Depreciation and amortization from continuing operations impacted by $29.3 million in higher non-cash depreciation and amortization charges recorded la
Slide 11: FY20 Guidance
FY20 Guidance • Unchanged: Net sales growth of low single-digits, with foreign exchange to have a slightly negative impact based upon current rates • Unchanged: Adjusted EBITDA of $570-$590 million • Unchanged: Adjusted free cash flow from continuing operations is expected to be between $240 million
Slide 12: Business Review
Business Review Randy Lewis Chief Operating Officer
Slide 13: First Quarter 2020 – Hardware & Home Improvement
First Quarter 2020 – Hardware & Home Improvement KEY TAKEWAYS Net Sales Adj. EBITDA • Organic net sales decreased 2.5% -2.4% -23.0% with a decline in residential security driven by lower builder volume and builder’s hardware $305M $298M $56M driven by timing of orders from a large customer $43M • Ad
Slide 14: First Quarter 2020 – Home & Personal Care
First Quarter 2020 – Home & Personal Care KEY TAKEWAYS Net Sales Adj. EBITDA • Organic net sales increased 3.2% +1.5% +4.0% ‐ Sales grew in Europe ‐ Sales in the U.S. experienced a $317M $322M $36M more moderate rate of decline $35M compared to 2019 • Adjusted EBITDA increased 4.0% • Our consumer-dr
Slide 15: First Quarter 2020 – Global Pet Care
First Quarter 2020 – Global Pet Care KEY TAKEWAYS Net Sales Adj. EBITDA • Organic net sales increased 1.1% +0.5% +8.2% ‐ Continued growth in U.S. companion animal $205M $206M $31.5M • Adjusted EBITDA increased 8.2% $29M • Successful exiting of Latin America rawhide facility & announced divestiture o
Slide 16: First Quarter 2020 – Home & Garden
First Quarter 2020 – Home & Garden KEY TAKEWAYS Net Sales Adj. EBITDA • Net sales decreased 13.9% -13.9% $6M • Adjusted EBITDA decreased $6.4 million $53M $3M • Q1 revenue and adjusted $46M EBITDA were below last year ‐ Historically represents the smallest revenue quarter ‐ Sales were impacted by hi
Slide 17: Global Productivity Improvement Plan (GPIP)
Global Productivity Improvement Plan (GPIP) • We continue to expect the gross, annualized savings from sourcing and other GPIP cost improvements to be at least $100 million and that these saving will be at full run rate within the next 15 to 18 months Strategic Sourcing Implement and execute strateg
Slide 18: Appendix
Appendix
Slide 19: Condensed Consolidated Statements of Income
SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Month Periods Ended (in millions, except per share amounts) December 29, 2019 December 30, 2018 Net sales $ 871.5 $ 880.3 Cost of goods sold 592.5 573.7 Restructuring and related charges 9.9 0.9 Gross profit
Slide 20: Condensed Consolidated Statements of Cash Flow
SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) Three Month Periods Ended (in millions) December 29, 2019 December 30, 2018 Cash flows from operating activities Net cash used by operating activities from continuing operations $ (196.7) $ (283.6) Net cash use
Slide 21: Condensed Consolidated Statements of Financial Position
SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) (in millions) December 29, 2019 September 30, 2019 Assets Cash and cash equivalents $ 142.2 $ 627.1 Trade receivables, net 510.0 356.7 Other receivables 54.7 74.2 Inventories 627.8 548.4 Prepaid expens
Slide 22: Reconciliation of GAAP Diluted EPS to Adjusted Diluted EPS
SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO ADJUSTED DILUTED EARNINGS PER SHARE (Unaudited) Three Month Periods Ended December 29, 2019 December 30, 2018 Diluted EPS from continuing operations, as reported $ (0.81) $ (0.56) Adjustments: Transaction related cha
Slide 23: Transaction Related Charges and Restructuring Charges
SPECTRUM BRANDS HOLDINGS, INC. TRANSACTION RELATED CHARGES (Unaudited) Three Month Periods Ended (in millions) December 29, 2019 December 30, 2018 Coevorden operations divestiture $ 0.2 $ — GBL divestiture 2.3 — Other 1.6 6.3 Total transaction-related charges $ 4.1 $ 6.3 SPECTRUM BRANDS HOLDINGS, IN
Slide 24: Net Sales Summary and Organic Net Sales Reconciliation
SPECTRUM BRANDS HOLDINGS, INC. NET SALES SUMMARY (Unaudited) Three Month Periods Ended (in millions, except %) December 29, 2019 December 30, 2018 Variance HHI $ 297.7 $ 305.1 (7.4) (2.4%) HPC 322.1 317.2 4.9 1.5% GPC 205.8 204.7 1.1 0.5% H&G 45.9 53.3 (7.4) (13.9%) Net Sales $ 871.5 $ 880.3 (8.8) (
Slide 25: Reconciliation of GAAP Net Income to Adjusted EBITDA
SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Three Month Period Ended December 29, 2019 (in millions, except %) HHI HPC GPC H&G Corporate Consolidated Net income (loss) from continuing operations $ 34.2 $ 24.9 $ (53.3) $ (
Slide 26: Reconciliation of Forecasted Net Income to Adjusted EBITDA
SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF FORECASTED NET INCOME TO ADJUSTED EBITDA (Unaudited) (in millions) F2020 Net income $ 53 - 93 Income tax expense 13 - 23 Interest expense 140 - 150 Depreciation and amortization 145 - 150 EBITDA 366 - 401 Share and incentive based compensation 55 - 60
Slide 27: Spectrum Brands
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