Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Q1 2023 Earnings Presentation
26 slides from Spectrum Brands's earnings presentation, Feb 10, 2023
Slide 1: Fiscal 2023 First Quarter Earnings Call
Fiscal 2023 First Quarter Earnings Call February 10, 2023
Slide 2: Agenda
2 • Introduction – Faisal Qadir VP, Strategic Finance & Enterprise Reporting • CEO Overview and Outlook – David Maura Chairman and Chief Executive Officer Agenda • 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. All statements, other than statements of historical facts included or incorporated by reference in this document, including, without limitation, statements or expectations regarding our business
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 and Outlook
CEO Overview and Outlook David Maura
Slide 6: Q1 FY23 Headlines and Outlook
Q1 FY23 Headlines and Outlook 6 Summary Delivered EBITDA ahead of expectations despite sales pressure and implemented further cost control measures to offset demand pressures Retailer actions to reduce inventory continue as retail inventory remains high in many categories Hard goods and consumer dur
Slide 7: First Quarter 2023 - Continuing Operations Only
First Quarter 2023 - Continuing Operations Only 7 KEY TAKEAWAYS Net Sales Adj. EBITDA • Decline in the organic sales driven by -5.8% -19.3% slow replenishment orders and demand decrease in hard goods and consumer durables categories • Q1 adjusted EBITDA decrease driven $757M by: - Volume $713M $49M
Slide 8: FY23 Earnings Framework
FY23 Earnings Framework 8 NET ADJUSTED SALES EBITDA Low double-digits Flat to prior year growth Foreign exchange headwinds based Continued pricing and cost actions to upon current rates offset volume decline and inflation/currency headwinds
Slide 9: Financial and Business Review
Financial and Business Review Jeremy Smeltser
Slide 10: First Quarter 2023 - Continuing Operations Only
First Quarter 2023 - Continuing Operations Only 10 KEY TAKEAWAYS Net Sales Adj. EBITDA • Decline in the organic sales driven by -5.8% -19.3% slow replenishment orders and demand decrease in hard goods and consumer durables categories • Q1 adjusted EBITDA decrease driven $757M by: - Volume $713M $49M
Slide 11: Q1 FY23 Financial Review
Q1 FY23 Financial Review 11 Interest Expense +$11.6M vs. LY $3.3B 6.2x $33M Proforma net Debt outstanding $22M leverage ratio(1) Q1 FY22 Q1 FY23 $228M Cash balance Cash strategic transactions, restructuring, and other unusual non-recurring items -$5.6M vs. LY Revolver usage(2) $36M $30M $847 M $253
Slide 12: First Quarter 2023 Home & Personal Care
First Quarter 2023 Home & Personal Care 12 Net Sales Adj. EBITDA KEY TAKEAWAYS -4.0% -51.8% • Organic Net sales decline driven by retailers’ continued focus on inventory reduction, reduced consumer demand particularly in $380M Kitchen Appliances category and $364M holiday sales below expectations $2
Slide 13: First Quarter 2023 Global Pet Care
First Quarter 2023 Global Pet Care 13 Net Sales Adj. EBITDA KEY TAKEAWAYS -8.2% -3.9% • Organic net sales decline driven by lower replenishment order as retailers focus on reducing inventory and comparison to unusually high prior year demand $302M for hard goods $278M $39M $37M • Lower EBITDA was dr
Slide 14: First Quarter 2023 Home & Garden
First Quarter 2023 Home & Garden 14 Net Sales Adj. EBITDA KEY TAKEAWAYS -5.2% 67.1% • Net sales declined due to lower Q1 FY22 Q1 FY23 early inventory investments from key retail partners $75M $71M ($2M) • The EBITDA improvement was driven by annualization of prior year price increases and improved o
Slide 15: FY23 Earnings Framework
FY23 Earnings Framework 15 NET ADJUSTED SALES EBITDA Low double-digits Flat to prior year growth Foreign exchange headwinds based Continued pricing and cost actions to upon current rates offset volume decline and inflation/currency headwinds
Slide 16: FY23 – Full Year Expectations
FY23 – Full Year Expectations 16 Interest Cash transactions CAPEX D&A $130M - $140M $60M - $65M $60M - $70M $110M - $120M Cash payments of Capital expenditures Depreciation and Interest expense Restructuring, optimization Amortization and strategic initiatives
Slide 17: CEO Takeaways
Spectrum Brands WE MAKE LIVING BETTER AT HOME™ CEO Takeaways David Maura Cutter gion ay BoetounRtD =) .
Slide 18: CEO Key Takeaways
CEO Key Takeaways 18 CHALLENGING 1H FY23 • Demand environment remained challenging during first quarter, but results demonstrate our focus on 1 profitability • Sales and margin pressure to continue in the second quarter due to heavier discounting and promotions in HPC STRATEGIC FOCUS • Streamline or
Slide 19: Appendix
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Slide 20: Condensed Consolidated Statements of Income
20 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Month Periods Ended (in millions, except per share amounts) January 1, 2023 January 2, 2022 Net sales $ 713.3 $ 757.2 Cost of goods sold 511.4 537.9 Gross profit 201.9 219.3 Selling 131.3 146.3 General an
Slide 21: Condensed Consolidated Statements of Cash Flow
21 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) Three Month Periods Ended (in millions) January 1, 2023 January 2, 2022 Cash flows from operating activities Net cash used by operating activities from continuing operations $ (57.0) $ (255.8) Net cash used
Slide 22: Condensed Consolidated Statements of Financial Position
22 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) (in millions) January 1, 2023 September 30, 2022 Assets Cash and cash equivalents $ 228.0 $ 243.7 Trade receivables, net 269.8 247.4 Other receivables 121.1 95.7 Inventories 702.3 780.6 Prepaid expe
Slide 23: Net Sales Summary and Organic Net Sales Reconciliation
23 SPECTRUM BRANDS HOLDINGS, INC. NET SALES SUMMARY (Unaudited) Three Month Periods Ended (in millions, except %) January 1, 2023 January 2, 2022 Variance HPC $ 364.4 $ 379.7 $ (15.3) (4.0)% GPC 277.5 302.2 (24.7) (8.2)% H&G 71.4 75.3 (3.9) (5.2)% Net Sales $ 713.3 $ 757.2 (43.9) (5.8)% SPECTRUM BRA
Slide 24: Reconciliation of GAAP Net Income to Adjusted EBITDA (Q1 FY23)
24 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 %) HPC GPC H&G Corporate Consolidated Net (loss) income from continuing operations $ (4.2) $ 23.0 $ (7.2) $ (51.
Slide 25: Reconciliation of GAAP Net Income to Adjusted EBITDA (Q1 FY22)
25 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Three Month Period Ended January 2, 2022 (in millions, except %) HPC GPC H&G Corporate Consolidated Net income (loss) from continuing operations $ 19.0 $ 11.7 $ (15.8) $ (45.
Slide 26: Reconciliation of GAAP Diluted EPS to Adjusted Diluted EPS
26 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO ADJUSTED DILUTED EARNINGS PER SHARE (Unaudited) Three Month Periods Ended January 1, 2023 January 2, 2022 Diluted EPS from continuing operations, as reported $ (0.99) $ (0.73) Adjustments: Tristar acquisition and
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