Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Q1 2024 Earnings Presentation
27 slides from Spectrum Brands's earnings presentation, Feb 8, 2024
Slide 1: Fiscal 2024 First Quarter Earnings Call
Fiscal 2024 First Quarter Earnings Call February 8, 2024
Slide 2: Agenda
2 • Introduction – Joanne Chomiak Senior Vice President, Tax and Treasury Agenda • CEO Overview – David Maura Chairman and Chief Executive Officer • Financial & Business Review – Jeremy Smeltser Chief Financial Officer • Q&A – David Maura and Jeremy Smeltser
Slide 3: Forward-looking Statements
Forward-looking Statements 3 We have made or implied certain forward-looking statements in this document and may make additional oral forward looking statements from time to time. All statements, other than statements of historical facts included or incorporated by reference in this document, includ
Slide 4: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 4 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 document, including the tables that
Slide 5: CEO Overview
Spectrum Brands WE MAKE LIVING BETTER AT HOME™ CEO Overview David Maura
Slide 6: Q1 FY24 Headlines and Review
Q1 FY24 Headlines and Review 6 Summary Income from Continuing Operations of $17.5 Million and Adjusted EBITDA of $84.3 Million improved by $57.5 Million and $44.5 Million, respectively Continued challenging macroeconomic environment across all businesses, competitive retail market Healthy retailer i
Slide 7: FY24 Strategic Priorities
FY24 Strategic Priorities 7 Improve operational efficiency Improve Capital investments to drive long operational term competitiveness efficiency Invest in Brands Invest in people and upgrade Invest Invest in talent Bring fewer bigger and innovate people and better innovations culture Drive a culture
Slide 8: Outstanding Shares & Share Repurchases
Outstanding Shares & Share Repurchases 8 Share Repurchases Repurchased 11.0 Million ASR – 6.6 Million ∼ 30.2 Million* Open Market/10b5-1 – 4.4 Million Total Shares Outstanding ~ 26% Reduction ∼ 41.0 Million $826 Million Spent Total Shares Outstanding Prior to HHI Sale As of Now In December 2023, Ent
Slide 9: FY24 Earnings Framework
FY24 Earnings Framework 9 NET ADJUSTED SALES EBITDA Low single-digit decline High single-digit growth to prior year to prior year Lower consumer demand particularly in Lower cost inventory offset by small kitchen appliance category within investment in the business and pricing HPC pressure within HP
Slide 10: Financial and Business Review
Financial and Business Review Jeremy Smeltser
Slide 11: First Quarter 2024
First Quarter 2024 11 KEY TAKEAWAYS Net Sales Adj. EBITDA • Decline in organic sales driven by lower consumer demand for the Kitchen -3.0% 111.8% Appliances category within HPC, softness in Pet Specialty, and exit of non-strategic categories and SKUs in GPC and HPC $84M $713M $692M • Excluding $23M
Slide 12: Q1 FY24 Financial Review
Q1 FY24 Financial Review 12 Interest Expense -$14.2M vs. LY $33M $1.4B $1.4B $19M Debt outstanding Cash and short- Q1 FY23 Q1 FY24 term investments (1) Revolver usage(2) $13 M $487 M Cash strategic transactions, restructuring, and other unusual non-recurring items -$17.7M vs. LY In use Available $33
Slide 13: First Quarter 2024 Global Pet Care
First Quarter 2024 Global Pet Care 13 Net Sales Adj. EBITDA KEY TAKEAWAYS -0.2% 41.7% • Organic net sales decrease driven by strength in Companion Animal category offset in part by lower Aquatics sales and lower sales in Pet Specialty channel and $278M $277M $53M exit from non-strategic categories a
Slide 14: First Quarter 2024 Home & Garden
First Quarter 2024 Home & Garden 14 Fourth Quarter 2023 N e t S a l e s Adj. EBITDA KEY TAKEAWAYS Home & Garden 0.8% 70.8% • Net sales increase due to favorable Q1 FY23 Q1 FY24 weather conditions driving a late fall season partially offset by softness in $71M $72M Cleaning category ($1M) • EBITDA in
Slide 15: First Quarter 2024 Home & Personal Care
First Quarter 2024 Home & Personal Care 15 Net Sales Adj. EBITDA KEY TAKEAWAYS -5.8% 102.3% • Organic net sales decline driven by category decline in North American market particularly in small kitchen appliances partially offset by International $364M growth $343M $27M • EBITDA increase was driven
Slide 16: FY24 Earnings Framework
FY24 Earnings Framework 16 NET ADJUSTED SALES EBITDA Low single-digit decline High single-digit growth to prior year to prior year Lower consumer demand particularly in Lower cost inventory offset by small kitchen appliance category within investment in the business and pricing HPC pressure within H
Slide 17: FY24 – Full Year Expectations
FY24 – Full Year Expectations 17 Cash Taxes Cash transactions CAPEX D&A ~$40M ~$40M $75M - $85M $115M - $125M Cash Payments of Capital Expenditures Depreciation and Cash Taxes Restructuring, Optimization Amortization and Strategic Initiatives
Slide 18: CEO Takeaways
Spectrum Brands WE MAKE LIVING BETTER AT HOME™ CEO Takeaways David Maura
Slide 19: CEO Key Takeaways
CEO Key Takeaways 19 STRONG START IN Q1 • Challenging macroenvironment influencing top line, as expected 1 • Improved margins and strengthened balance sheet creating a competitive advantage • Continuing to return capital to shareholders via share repurchases and dividends STRATEGIC FOCUS • Invest in
Slide 20: Appendix
Spectrum Brands WE MAKE LIVING BETTER AT HOME™ Appendix
Slide 21: Condensed Consolidated Statements of Income
21 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Month Periods Ended (in millions, except per share amounts) December 31, 2023 January 1, 2023 Net sales $ 692.2 $ 713.3 Cost of goods sold 447.3 511.4 Gross profit 244.9 201.9 Selling, general & administr
Slide 22: Condensed Consolidated Statements of Cash Flow
22 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) Three Month Periods Ended (in millions) December 31, 2023 January 1, 2023 Cash flows from operating activities Net cash provided (used) by operating activities from continuing operations $ 18.1 $ (57.0) Net
Slide 23: Condensed Consolidated Statements of Financial Position
23 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) (in millions) December 31, 2023 September 30, 2023 Assets Cash and cash equivalents $ 445.4 $ 753.9 Short term investments 950.0 1,103.3 Trade receivables, net 535.1 477.1 Other receivables 75.6 84.
Slide 24: Net Sales Summary and Organic Net Sales Reconciliation
24 SPECTRUM BRANDS HOLDINGS, INC. NET SALES SUMMARY (Unaudited) Three Month Periods Ended (in millions, except %) December 31, 2023 January 1, 2023 Variance GPC $ 276.9 $ 277.5 $ (0.6) (0.2)% H&G 72.0 71.4 0.6 0.8 % HPC 343.3 364.4 (21.1) (5.8)% Net Sales $ 692.2 $ 713.3 (21.1) (3.0)% SPECTRUM BRAND
Slide 25: Reconciliation of GAAP Net Income to Adjusted EBITDA (Q1 FY24)
25 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Three Month Period Ended December 31, 2023 (in millions, except %) GPC H&G HPC Corporate Consolidated Net income (loss) from continuing operations $ 43.5 $ (5.5) $ 15.9 $ (36
Slide 26: Reconciliation of GAAP Net Income to Adjusted EBITDA (Q1 FY23)
26 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Three Month Period Ended January 1, 2023 (in millions, except %) GPC H&G HPC Corporate Consolidated Net income (loss) from continuing operations $ 23.0 $ (7.2) $ (4.2) $ (51.
Slide 27: Reconciliation of GAAP Diluted EPS to Adjusted Diluted EPS
27 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO ADJUSTED DILUTED EARNINGS PER SHARE (Unaudited) Three Month Periods Ended December 31, 2023 January 1, 2023 Diluted EPS from continuing operations, as reported $ 0.51 $ (0.99) Adjustments: HHI divestiture and sepa
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