Spectrum Brands Holdings, Inc. · NYSE:SPB
Spectrum Brands — Q4 2023 Earnings Presentation
27 slides from Spectrum Brands's earnings presentation, Nov 17, 2023
Slide 1: Fiscal 2023 Third Quarter Earnings Call
Fiscal 2023 Third Quarter Earnings Call August 11, 2023 PRIVILEGED & CONFIDENTIAL
Slide 2: Agenda
2 • Introduction – Faisal Qadir VP, Strategic Finance & Enterprise Reporting Agenda • CEO Overview and Outlook – David Maura Chairman and Chief Executive Officer • Financial & Business Review – Jeremy Smeltser Chief Financial Officer • Q&A – David Maura and Jeremy Smeltser PRIVILEGED & CONFIDENTIAL
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 PRIVILEGED & CONFIDENTIAL
Slide 6: Q3 FY23 Headlines and Outlook
Q3 FY23 Headlines and Outlook 6 Summary Closed HHI Sale transaction for $4.3 billion with net proceeds expected to be ~$3.8 billion Repaid $1.1 billion of bank debt by the end of the quarter and ended the quarter in a net cash position with $2.9 billion of cash and $2.1 billion of debt – subsequentl
Slide 7: FY23 Earnings Framework
FY23 Earnings Framework 7 NET ADJUSTED SALES EBITDA Mid single-digit decline Low to mid single-digits to prior year decline to prior year (1) H&G and HPC sales pressure from Retailer inventory reduction in H&G retailer inventory reduction, and HPC, foreign exchange headwinds pricing and cost actions
Slide 8: Financial and Business Review
Financial and Business Review Jeremy Smeltser PRIVILEGED & CONFIDENTIAL
Slide 9: Third Quarter 2023
Third Quarter 2023 9 KEY TAKEAWAYS Net Sales Adj. EBITDA • Decline in organic sales driven by -10.1% 23.0% continued retailer inventory reductions for HPC and H&G, unfavorable weather impacting H&G, and demand decrease in hard goods and consumer durables $818M • Q3 adjusted EBITDA increase driven by
Slide 10: Q3 FY23 Financial Review
Q3 FY23 Financial Review 10 Interest Expense +$12.9M vs. LY $39M $2.1B $2.9B $26M Debt outstanding Cash balance Q3 FY22 Q3 FY23 Revolver usage(1) $13 M $587 M Cash strategic transactions, restructuring, and other unusual non-recurring items -$19.0M vs. LY In use Available $29M $10M Q3 FY22 Q3 FY23 (
Slide 11: Third Quarter 2023 Global Pet Care
Third Quarter 2023 Global Pet Care 11 Net Sales Adj. EBITDA KEY TAKEAWAYS -6.2% 31.1% • Organic net sales decrease driven by continued softness in global aquatics marketplace and aggressive portfolio management activities $290M $54M $272M • EBITDA increase was driven by pricing, exit of low margin s
Slide 12: Third Quarter 2023 Home & Garden
Third Quarter 2023 Home & Garden 12 Net Sales Adj. EBITDA KEY TAKEAWAYS -6.0% -9.8% • Net sales declined due to unfavorable weather conditions and continued retailer inventory reductions $199M $43M $187M $39M • The EBITDA decline was driven by lower volume, partially offset by fixed cost reduction a
Slide 13: Third Quarter 2023 Home & Personal Care
Third Quarter 2023 Home & Personal Care 13 Net Sales Adj. EBITDA KEY TAKEAWAYS -16.0% 216.7% • Organic net sales decline driven by retailers’ continued focus on inventory $11M reduction and reduced consumer demand particularly in Kitchen Appliances category $329M • Higher EBITDA was driven by favora
Slide 14: FY23 Earnings Framework
FY23 Earnings Framework 14 NET ADJUSTED SALES EBITDA Mid single-digit decline Low to mid single-digits to prior year decline to prior year (1) H&G and HPC sales pressure from Retailer inventory reduction in H&G retailer inventory reduction, and HPC, foreign exchange headwinds pricing and cost action
Slide 15: FY23 – Full Year Expectations
FY23 – Full Year Expectations 15 Interest Cash transactions CAPEX D&A $120M - $130M $65M - $70M $55M - $65M $105M - $115M Cash Payments of Capital Expenditures Depreciation and Interest Expense Restructuring, Optimization Amortization and Strategic Initiatives
Slide 16: CEO Takeaways
CEO Takeaways David Maura PRIVILEGED & CONFIDENTIAL
Slide 17: CEO Key Takeaways
CEO Key Takeaways 17 STRATEGIC PIVOT • Closed HHI for $4.3 billion cash and expected net proceeds of $3.8 billion 1 • Strengthened balance sheet, returning capital to shareholders and refocusing the team on long- term growth for the remaining businesses FY23 EARNINGS FRAMEWORK UPDATE • Continue to m
Slide 18: Appendix
Appendix PRIVILEGED & CONFIDENTIAL
Slide 19: Condensed Consolidated Statements of Income
19 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Month Periods Ended Nine Month Periods Ended (in millions, except per share amounts) July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Net sales $ 735.5 $ 818.0 $ 2,178.1 $ 2,383.0 Cost of goods sold 47
Slide 20: Condensed Consolidated Statements of Cash Flow
20 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) Nine Month Periods Ended (in millions) July 2, 2023 July 3, 2022 Cash flows from operating activities Net cash provided (used) by operating activities from continuing operations $ 72.5 $ (180.8) Net cash pro
Slide 21: Condensed Consolidated Statements of Financial Position
21 SPECTRUM BRANDS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) (in millions) July 2, 2023 September 30, 2022 Assets Cash and cash equivalents $ 2,930.2 $ 243.7 Trade receivables, net 371.0 247.4 Other receivables 100.1 95.7 Inventories 527.9 780.6 Prepaid expen
Slide 22: Net Sales Summary and Organic Net Sales Reconciliation
22 SPECTRUM BRANDS HOLDINGS, INC. NET SALES SUMMARY (Unaudited) Three Month Periods Ended Nine Month Periods Ended (in millions, except %) July 2, 2023 July 3, 2022 Variance July 2, 2023 July 3, 2022 Variance GPC $ 272.3 $ 290.2 $ (17.9) (6.2)% $ 846.5 $ 887.5 $ (41.0) (4.6)% H&G 186.6 198.5 (11.9)
Slide 23: Reconciliation of GAAP Net Income to Adjusted EBITDA, Q3 2023
23 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Three Month Period Ended July 2, 2023 (in millions, except %) GPC H&G HPC Corporate Consolidated Net income (loss) from continuing operations $ 38.0 $ 26.2 $ (156.5) $ (79.9)
Slide 24: Reconciliation of GAAP Net Income to Adjusted EBITDA, Q3 2022
24 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Three Month Period Ended July 3, 2022 (in millions, except %) GPC H&G HPC Corporate Consolidated Net income (loss) from continuing operations $ 18.8 $ 36.3 $ 12.6 $ (64.7) $
Slide 25: Reconciliation of GAAP Net Income to Adjusted EBITDA, Nine Months 2023
25 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Nine Month Period Ended July 2, 2023 (in millions, except %) GPC H&G HPC Corporate Consolidated Net income (loss) from continuing operations $ 91.3 $ (20.8) $ (198.2) $ (159.
Slide 26: Reconciliation of GAAP Net Income to Adjusted EBITDA, Nine Months 2022
26 SPECTRUM BRANDS HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited) Nine Month Period Ended July 3, 2022 (in millions, except %) GPC H&G HPC Corporate Consolidated Net income (loss) from continuing operations $ 49.1 $ 50.7 $ 12.7 $ (164.8) $
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 Nine Month Periods Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Diluted EPS from continuing operations, as reported $ (4.27) $
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