SPECTRUM BRANDS HOLDINGS, INC. Introduction
The following is management's discussion of the financial results, liquidity and other key items related to our performance and should be read in conjunction with the Condensed Consolidated Financial Statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q. Unless the context indicates otherwise, the term the "Company," "we," "our," or "us" are used to refer toSpectrum Brands Holdings, Inc. and its subsidiaries ("SBH") andSB/RH Holdings, LLC and its subsidiaries ("SB/RH"), collectively.
Business Overview
The Company is a diversified global branded consumer products company. We
manage the businesses in three vertically integrated, product-focused segments:
(i) Home and Personal Care ("HPC"), (ii) Global Pet Care ("GPC"), and (iii) Home
and Garden ("H&G"). The Company manufactures, markets and/or distributes its
products globally in the North America ("NA"), Europe , Middle East & Africa
("EMEA"), Latin America ("LATAM") and Asia-Pacific ("APAC") regions through a
variety of trade channels, including retailers, wholesalers and distributors. We
enjoy strong name recognition in our regions under our various brands and
patented technologies across multiple product categories. Global and geographic
strategic initiatives and financial objectives are determined at the corporate
level. Each segment is responsible for implementing defined strategic
initiatives and achieving certain financial objectives and has a president
responsible for sales and marketing initiatives and financial results for all
product lines within that segment, on a global basis. The segments are supported
through center-led shared service operations and enabling functions consisting
of finance and accounting, information technology, legal, human resources,
supply chain, and commercial operations. See Note 18 - Segment Information
included in Notes to the Condensed Consolidated Financial Statements, included
elsewhere in this Quarterly Report for more information pertaining to segments
of continuing operations. The following is an overview of the consolidated
business, by segment, summarizing product types and brands:
Segment Products Brands
HPC Home Appliances: Small kitchen appliances Home Appliances: Black & Decker®,
including toaster ovens, coffeemakers, slow Russell Hobbs®, George Foreman®,
cookers, blenders, hand mixers, grills, food PowerXL®, Emeril Legasse®, Copper Chef
processors, juicers, toasters, irons, kettles, ®, Toastmaster®, Juiceman®,
bread makers, cookware, and cookbooks. Farberware®, and Breadman®
Personal Care: Hair dryers, flat irons and Personal Care: Remington®, and
straighteners, rotary and foil electric shavers, LumaBella®
personal groomers, mustache and beard trimmers,
body groomers, nose and ear trimmers, women's
shavers, and haircut kits.
GPC Companion Animal: Rawhide chews, dog and cat Companion Animal: 8IN1® (8-in-1),
clean-up, training, health and grooming products, Dingo®, Nature's Miracle®, Wild
small animal food and care products, rawhide-free Harvest™, Littermaid®, Jungle®, Excel®,
dog treats, and wet and dry pet food for dogs and
FURminator®, IAMS® (
cats.
Eukanuba® (
DreamBone®, SmartBones®, ProSense®,
Perfect Coat®, eCOTRITION®, Birdola®,
Good Boy®, Meowee!®, Wildbird®, and
Wafcol®
Aquatics: Consumer and commercial aquarium kits, Aquatics: Tetra®, Marineland®,
stand-alone tanks; aquatics equipment such as Whisper®, Instant Ocean®, GloFish®,
filtration systems, heaters and pumps; and OmegaOne® and OmegaSea®
aquatics consumables such as fish food, water
management and care.
H&G Household: Household pest control solutions such Household: Hot Shot®, Black Flag®,
as spider and scorpion killers; ant and roach Real-Kill®, Ultra Kill®, The Ant Trap®
killers; flying insect killers; insect foggers; (TAT), and Rid-A-Bug®.
wasp and hornet killers; and bedbug, flea and tick
control products.
Controls: Outdoor insect and weed control Controls: Spectracide®, Garden Safe®,
solutions, and animal repellents such as aerosols, Liquid Fence®, and EcoLogic®.
granules, and ready-to-use sprays or hose-end
ready-to-sprays.
Repellents: Personal use pesticides and insect Repellents: Cutter® and Repel®.
repellent products, including aerosols, lotions,
pump sprays and wipes, yard sprays and citronella
candles.
Cleaning: Household surface cleaning, maintenance, Cleaning: Rejuvenate®
and restoration products, including bottled
liquids, mops, wipes and markers.
On September 8, 2021 , the Company entered into a definitive Asset and Stock
Purchase Agreement ("ASPA") with ASSA ABLOY AB ("ASSA") to sell its Hardware and
Home Improvement ("HHI") segment for cash proceeds of $4.3 billion , subject to
customary purchase price adjustments (the "HHI Transaction"). HHI consists of
residential locksets and door hardware, including knobs, levers, deadbolts,
handle sets, and electronic and connected locks under the Kwikset®, Weiser®,
Baldwin®, Tell Manufacturing®, and EZSET® brands; kitchen and bath faucets and
accessories under the Pfister® brand; and builders' hardware consisting of
hinges, metal shapes, security hardware, rack and sliding door hardware, and
gate hardware under the National Hardware® and FANAL® brands. The Company's
assets and liabilities associated with the HHI disposal group have been
classified as held for sale, HHI operations have been classified as discontinued
operations, and notes to the condensed consolidated financial statements have
been updated for all periods presented to exclude information pertaining to
discontinued operations and reflect only the continuing operations of the
Company. Refer to Note 2 - Divestitures included in Notes to the Condensed
Consolidated Financial Statements, included elsewhere in this Quarterly Report
for more information on the HHI divestiture.
Pursuant to the ASPA either party may terminate the ASPA if the HHI Transaction
has not occurred on or prior to December 8, 2022 (the "End Date"). On July 14,
2022 , the parties entered into an amendment to the ASPA (the "Amendment")
pursuant to which the End Date was extended to June 30, 2023 . Except for the
foregoing amendment to the End Date, the ASPA remains in full force and effect
as written, including with respect to a termination fee of $350 million . The
Company continues to engage with antitrust regulators in the regulatory review
of the HHI Transaction and the extension is intended to provide the parties with
additional time (to the extent needed) to satisfy the conditions related to
receipt of governmental clearances. The parties are committed to closing the HHI
Transaction and the Company and ASSA both continue to expect that they will
obtain all the required governmental clearances and will close the HHI
Transaction.
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On February 18, 2022 , the Company acquired the home appliances and cookware
products sold under the PowerXL®, Emeril, and Copper Chef® brands from Tristar
Products, Inc. (the "Tristar Business"). The net assets and operations of the
Tristar Business are integrated within the HPC segment. As part of the
acquisition, the PowerXL® and Copper Chef® brands were acquired outright by the
Company while the Emeril brand remains subject to a trademark license agreement
with the license holder (the "Emeril License"). Pursuant to the Emeril License,
the Company will continue to license the Emeril brands within the US, Canada ,
Mexico , and the United Kingdom for certain designated product categories of
household appliances within the HPC segment, including small kitchen food
preparation products, indoor and outdoor grills and grill accessories, and
cookbooks. The Emeril License is set to expire effective December 31, 2022 with
options up to three one-year renewal periods following the initial expiration.
Under the terms of the agreement, we agreed to pay the license holder a
percentage of sales, with minimum annual royalty payments of $1.5 million ,
increasing to $1.8 million in subsequent renewal periods. See Note 3 -
Acquisitions included in Notes to the Condensed Consolidated Financial
Statements, included elsewhere in this Quarterly Report for further detail.
Substantially all brands and tradenames are directly owned by the Company with
the exception of the Black & Decker® ("B&D") and Emeril Legasse® ("Emeril")
brands used by the HPC segment. The Company has a trademark license agreement
(the "License Agreement") with Stanley Black & Decker ("SBD") pursuant to which
we license the B&D brand in North America , Latin America (excluding Brazil ) and
the Caribbean for four core categories of household appliances within the
Company's HPC segment: beverage products, food preparation products, garment
care products and cooking products. The Company renewed the License Agreement
through June 30, 2025 , including a sell-off period from April 1, 2025 to June
30, 2025 whereby the Company can continue to sell and distribute but no longer
produce products subject to the License Agreement. Under the terms of the
License Agreement, we agree to pay SBD royalties based on a percentage of sales,
with minimum annual royalty payments of $15.0 million , with the exception of the
minimum annual royalty will no longer be applied effective January 1, 2024
through the expiration of the agreement. The License Agreement also requires us
to comply with maximum annual return rates for products. Subsequent to the
completion of the License Agreement, there are no non-competition provisions or
restrictions provided following its expiration. See Note 5 - Revenue Recognition
included in Notes to the Condensed Consolidated Financial Statements, included
elsewhere in this Quarterly Report for further detail on revenue concentration
from B&D branded products.
SB/RH is a wholly owned subsidiary of SBH. Spectrum Brands, Inc. ("SBI"), a
wholly-owned subsidiary of SB/RH incurred certain debt guaranteed by SB/RH and
domestic subsidiaries of SBI. See Note 10 - Debt for more information pertaining
to debt. The reportable segments of SB/RH are consistent with the segments of
SBH.
Acquisitions, Divestitures and Other Business Development Initiatives
The Company periodically evaluates strategic transactions that may result in the acquisition of a business or assets that qualify as a business combination, or a divestiture of a business or assets that may be recognized as either a component of continuing operations or discontinued operations, depending on the significance to the consolidated group. Acquisitions may impact the comparability of the consolidated or segment financial information with the inclusion of the operating results for the acquired business in periods subsequent to acquisition date, the inclusion of acquired assets, both tangible and intangible (including goodwill), and the related amortization, depreciation or other non-cash purchase accounting adjustments of acquired assets. Divestitures may impact the comparability of the consolidated or segment financial information with the recognition of an impairment loss when held for sale, gain or loss on disposition, or change in classification to discontinued operations for qualifying transactions. Moreover, the comparability of consolidated or segment financial information may be impacted by incremental costs to facilitate and effect such transactions and initiatives to integrate acquired business or separate divested operations and assets with the consolidated group. The following strategic transactions have been considered as having a significant impact on the comparability of the financial results on the condensed consolidated financial statements and segment financial information. •Tristar Business Acquisition - OnFebruary 18, 2022 , the Company acquired 100% of the Tristar Business that includes a portfolio of home appliances and cookware products sold under the PowerXL®, Emeril, and Copper Chef® brands. The net assets and operating results of the Tristar Business are included in the Company's condensed consolidated financial statements and reported within the HPC reporting segment for the three and nine month period endedJuly 3, 2022 effective as of the transaction date. See Note 3 - Acquisitions included in Notes to the Condensed Consolidated Financial Statement, included elsewhere in this Quarterly Report, for further detail. In addition to the transaction costs of$13.5 million to effect the close of the transaction, recognized during the nine month period endedJuly 3, 2022 , the Company incurred incremental costs to combine and integrate the acquired business with the HPC segment, primarily towards the integration of systems and processes, merger of commercial operations and supply chain, professional fees to consolidate financial records, plus incremental retention costs for personnel supporting the transition and integration efforts after the transaction date. Costs attributable to the integration of the Tristar Business were initiated with the close of the transaction and are projecting to continue through the year endingSeptember 30, 2023 . •Rejuvenate Acquisition - OnMay 28, 2021 , the Company acquired 100% of the membership interests inFor Life Products, LLC ("FLP"), a manufacturer of household cleaning, maintenance, and restoration products sold under the Rejuvenate® brand. The net assets and operating results of FLP are included in the Company's condensed consolidated financial statements and reported within the H&G reporting segment for the three and nine month periods endedJuly 3, 2022 andJuly 4, 2021 , effective as of the transaction date. See Note 3 - Acquisitions included in Notes to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year endedSeptember 30, 2021 , for further detail. In addition to the transaction costs of$5.3 million to effect the close of the transaction, recognized during the three and nine month period endedJuly 4, 2021 , the Company incurred incremental costs to combine and integrate the acquired business with the H&G segment, primarily towards the integration of systems and processes, transfer of inventory and integration to an existing H&G distribution center, retention costs for personnel supporting transition and integration efforts after the transaction date, plus incremental trade spend realized from the transition of commercial operations practices and policies (recognized as a reduction in net sales). Costs attributable to the integration of the Rejuvenate business have been substantially complete. •Armitage Acquisition - OnOctober 26, 2020 , the Company completed the acquisition ofArmitage Pet Care Ltd ("Armitage"), a pet treats and toys business inNottingham, United Kingdom including a portfolio of brands that include the dog treats brand, Good Boy®, cat treats brand, Meowee!®, and Wildbird® bird feed products, among others, that are predominantly sold within theUnited Kingdom . The net assets and results of operations of Armitage are included in the Company's condensed consolidated financial statements and reported within the GPC reporting segment for the three and nine month periods endedJuly 3, 2022 andJuly 4, 2021 , effective as of the transaction date. See Note 3 - Acquisitions included in Notes to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year endedSeptember 30, 2021 , for further detail. In addition to the transaction costs of$5.1 million to effect the close of the transaction recognized during the nine month period endedJuly 4, 2021 , the Company incurred incremental costs to combine and integrate the acquired business with the GPC segment, primarily towards the integration of systems and processes, transfer of inventory and integration to existing GPC supply chain and distribution centers within the EMEA region, plus retention costs for personnel supporting the transition and integration efforts after the transaction date. Costs attributable to the integration of the Armitage business have been substantially complete. 36 -------------------------------------------------------------------------------- Table of Contents •Omega Acquisition - OnMarch 10, 2020 , the Company acquiredOmega Sea, LLC ("Omega"), a manufacturer and marketer of premium fish foods and consumable goods for the home and commercial aquarium markets, primarily consisting of the Omega brand. The net assets and results of operations of Omega are included in the Company's condensed consolidated financial statements and reported within GPC segment for the three and nine month periods endedJuly 3, 2022 andJuly 4, 2021 . The Company incurred incremental costs to combine and integrate the acquired business within the GPC segment, primarily towards the integration of systems and process, transfer of inventory and production to an existing GPC facility, including related exit and disposal costs of the assumed leased facility, related start-up costs and operational inefficiencies attributable to the transferred production, plus retention costs for personnel supporting the transition and integration after the transaction date. Costs attributable to the integration of the Omega business will be substantially realized by end of the fiscal year endingSeptember 30, 2022 . •HHI Divestiture - OnSeptember 8, 2021 , the Company entered into a ASPA with ASSA to sell its HHI segment. The consummation of the transaction is pending and subject to customary conditions, including the absence of a material adverse effect of HHI and certain antitrust conditions or other governmental restrictions, amongst others. The Company's assets and liabilities associated with HHI have been classified as held for sale and the HHI operations have been classified as discontinued operations and are reported separately for all periods presented. See Note 2 - Divestitures included in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further detail. The Company has incurred incremental costs attributable to the pending divestiture, primarily consisting of legal and professional fees to effect the realization of the ASPA, facilitate antitrust or other governmental restrictions to consummate the transaction, preparation for separation of systems and processes supporting the divested business and enabling functions under aTSA , plus incremental retention costs for personnel supporting the transition efforts. Incremental costs are expected to be incurred through the consummation of the pending transaction to supportTSA processes and mitigation following the close of the sale, which are expected to be incurred for the transition period of approximately 12-24 months following the close of the transaction. •HPC Separation - The Company has initiated projects to facilitate a strategic separation of the Company's ownership in the HPC segment in the most advantageous way to realize value for both the HPC business as a standalone appliance business either through a spin, merger or sale of the business and the retained GPC and H&G businesses of the consolidated group. Costs are primarily attributable to legal and professional fees incurred to assess opportunities, evaluate transaction considerations for a separation, including potential tax and compliance implications to the consolidated group, costs directly attributable to the legal entity separation and transfer of net assets of the HPC operations from the commingled operations of the Company, plus the segregation of systems and processes. The realization of the transaction, if any, is likely not to occur until after completion of the HHI divestiture. Costs attributable to the initiative are expected to be incurred until a transaction is realized or otherwise cancelled. •Coevorden Operations - OnMarch 29, 2020 , the Company completed the sale of its dog and cat food ("DCF") production facility and distribution center in Coevorden,Netherlands withUnited Petfood Producers NV ("UPP"). See Note 2 - Divestitures included in Notes to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year endedSeptember 30, 2021 , for further detail. Following the separation of the Coevorden Operations, the Company has incurred incremental costs attributable to a tolling charge for the continued production of dog and cat food products through a three-year manufacturing agreement with the buyer entered into concurrent with the sale, rent charges associated with the transferred warehouse operated by the Company during an 18-month transition period following the sale, plus costs to facilitate the transfer of the warehouse operations to the buyer and the movement of inventory and distribution center operations to a new distribution center supporting GPC operations in EMEA. Costs attributable to the tolling arrangement are expected to be completed inMarch 2023 . The following is a summary of costs attributable to strategic transactions and business development costs for the respective projects during three and nine month periods endedJuly 3, 2022 andJuly 4, 2021 . In addition to the initiatives discussed above, the Company regularly engages in other business development initiatives that may incur incremental costs which may not result in a realized transaction or are less significant, and therefore have been separately disclosed and recognized as other project costs. Three Month Periods Ended Nine Month Periods Ended (in millions) July 3, 2022 July
4, 2021
- $ 20.0 $ -
Rejuvenate acquisition and integration - 5.8 7.0 5.8
Armitage acquisition and integration 0.1 1.0 1.4 7.7
Omega integration 0.1 - 1.5 -
HHI divestiture 0.6 - 6.1 -
HPC separation initiatives 10.7 (0.5) 15.4 14.2
Coevorden operations separation 1.9 2.9 7.3 7.7
Other project costs 0.2 1.9 0.7 6.0
Total $ 19.2 $ 11.1 $ 59.4 $ 41.4
Reported as:
Net sales $ - $ - $ 0.7 $ -
Cost of goods sold 1.5 1.6 5.0 4.7
General & administrative expense 13.4 9.5 49.4 36.7
Other non-operating expense, net 4.3 - 4.3 -
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Restructuring and Optimization Initiatives
We continually seek and develop operating strategies to improve our operational
efficiency, match our capacity and product costs to market demand and better
utilize our manufacturing and distribution resources in order to reduce costs,
increase revenues, increase or maintain our current profit margins. We have
undertaken various initiatives to reduce manufacturing and operating costs,
which may have a significant impact on the comparability of financial results on
the condensed consolidated financial statements. These changes and updates are
inherently difficult and are made even more difficult by current global economic
conditions. Our ability to achieve the anticipated cost savings and other
benefits from such operating strategies may be affected by a number of other
macro-economic factors such as COVID-19, or inflation increased interest rates,
many of which are beyond or control. The following initiatives have been
considered as having a significant impact on the comparability of the financial
results on the condensed consolidated financial statements and segment financial
information.
•Fiscal 2022 Restructuring - The Company entered into a new initiative in response to changes observed within consumer products and retail markets, continued inflationary cost pressures and headwinds, resulting in the realization of a headcount reduction. Substantially all costs associated with the initiative have been recognized. See Note 4 - Restructuring Charges for further detail on related exit or disposal costs attributable to this initiative.
•Global ERP Transformation - During the year endedSeptember 30, 2021 , the Company entered into a SAP S/4HANA ERP transformation project to upgrade and implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis. This is a multi-year project that includes various costs, including software configuration and implementation costs that would be recognized as capital expenditures or deferred costs in accordance with applicable accounting policies, with certain costs recognized as operating expense associated with project development and project management costs, and professional services with business partners engaged towards planning, design and business process review that would not qualify as software configuration and implementation costs. The Company has substantially completed the design phase of the project and is currently moving into the building and design phase. •GPC Distribution Transition - During the year endedSeptember 30, 2021 , the GPC segment entered into an initiative to update its supply chain and distribution operations within theU.S. to address capacity needs, optimize and improve fill rates attributable to recent growth in the business and consumer demand, and improve overall operational effectiveness and throughput. The initiative includes the transition of its third party logistics (3PL) service provider at its existing distribution center, incorporating new facilities into the distribution footprint by expanding warehouse capacity and securing additional space to support long-term distribution and fulfillment, plus updating engagement and processes with suppliers and its transportation and logistics handlers. Incremental costs include one-time transition, implementation and start-up cost with the new 3PL service provider, including the integration of provider systems and technology, incentive-based compensation to maintain performance during transition, duplicative and redundant costs, and incremental costs for various disruptions in the operations during the transition period including supplemental transportation and storage costs, incremental detention and demurrage costs. See Note 4 - Restructuring Charges for further detail on costs attributable to the program. The project has been substantially completed with no significant anticipated future costs. Additionally, the Company experienced an increase in customer fines and penalties during the transition period (recognized as a reduction in net sales). Costs attributable to the initiative are expected to be incurred through the end of the fiscal year endingSeptember 30, 2022 . •Global Productivity Improvement Program - During the year endedSeptember 30, 2019 , the Company initiated a company-wide, multi-year program, consisting of various restructuring related initiatives to redirect resources and spending to drive growth, identify cost savings and pricing opportunities through standardization and optimization, develop organizational and operating optimization, and reduce overall operational complexity across the Company. With the Company's divestitures of GBL and GAC during the year endedSeptember 30, 2019 , the project focus includes the transition of the Company's continuing operations in a post-divestiture environment and exiting of TSAs, which were fully exited inJanuary 2022 . The initiative includes review of global processes and organization design and structures, headcount reductions and transfers, and rightsizing the Company's shared operations and commercial business strategy and exit of certain internal production to third-party suppliers, among others, resulting in the recognition of severance benefits and other exit and disposal costs to facilitate such activity. See Note 4 - Restructuring Charges for further detail on costs attributable to the program. The project has been substantially completed with no significant anticipated future costs. •HPC Brand Portfolio Transitions - In light of the acquisition of the Tristar Business and the PowerXL® brand, the Company has initiated a project within its HPC segment to assess and evaluate the current utilization of tradenames and brands across its portfolio of home and kitchen appliance products. The project will require incremental costs to facilitate potential transitions of branded product offerings on global basis, including potential investment with our supply base and retail partners to manage inventory and transition new branded products to market. •Russia Closing Initiative - The Company initiated an assessment of its in-country commercial operations inRussia , predominantly supporting the HPC segment, and other commercial activity directly impacted by theRussia -Ukraine conflict. The Company has recognized impairment costs on inventory and receivables that are at risk of recoverability as the Company has discontinued importing products directly intoRussia . The initiative may be subject to further exit and disposal costs based upon future actions taken. 38 -------------------------------------------------------------------------------- Table of Contents The following is a summary of impact to operating results attributable to restructuring initiatives and other optimization projects, incurred for the respective projects during three and nine month periods endedJuly 3, 2022 andJuly 4, 2021 . In addition to the projects and initiatives discussed above, the Company regularly incurs cost and engages in less significant restructuring and optimization initiatives that individually are not substantial and occur over a shorter time period (generally less than 12 months). Three Month Periods Ended Nine Month Periods Ended (in millions) July 3, 2022 July
4, 2021
$ 8.1 $ - $ 8.1 $ -
Global ERP transformation 3.4 0.9 9.4 1.6
GPC distribution center transition 8.4 7.7 28.3 7.7
Global productivity improvement
program 1.2 4.8 5.2 15.7
HPC brand portfolio transitions 0.3 - 0.3 -
Russia closing initiative - - 3.6 -
Other project costs 4.0 0.5 10.0 2.1
Total $ 25.4 $ 13.9 $ 64.9 $ 27.1
Reported as:
Net sales $ 0.3 $ 3.7 $ 4.2 $ 3.7
Cost of goods sold 1.0 0.7 1.9 2.1
Selling expense 8.1 3.5 24.1 3.5
General & administrative expense 16.0 6.0 34.7 17.8
Refinancing Activity
Financing activity during and between comparable periods may have a significant
impact on the comparability of financial results on the condensed consolidated
financial statements.
•On February 3, 2022 , the Company entered into the third amendment to the Credit
Agreement that provides for incremental capacity on the Revolver Facility of
$500 million that was used to support the acquisition of the Tristar Business
and the continuing operations and working capital requirements of the Company.
Borrowings under the incremental capacity are subject to a borrowing rate which
is subject to SOFR plus margin ranging from 1.75% to 2.75%, per annum or base
rate plus margin ranging from 0.75% to 1.75% per annum, with an increase by 25
basis points 270 days after the effective date of the third amendment and an
additional 25 basis points on each 90 day anniversary of such date.
•During the year ended September 30, 2021 , the Company completed its offering of
$500.0 million aggregate principal amount of its 3.875% Notes and entered into a
new Term Loan Facility in the aggregate principal amount of $400.0 million on
March 3, 2021 . The Company also redeemed $250.0 million of the 6.125% Notes and
$550.0 million of the 5.75% Notes, with a call premium of $23.4 million and
non-cash write-off of unamortized debt issuance costs of $7.9 million recognized
as interest expense.
Russia-Ukraine Conflict
The impacts of the Russia -Ukraine conflict and the sanctions imposed by other
nations in response to the conflict are evolving and may have an impact on the
Company's consolidated operations and cash flow attributable to operations and
distribution within the region. The Company does not maintain a significant
level of operations within Ukraine and continues to evaluate its strategy with
Russia and the existing operations within the territory. The Company does not
maintain material assets within Russia , and the Company's assets in Russia
consist mostly of working capital associated with the in-country distribution
operations. In response to matters within the territory, we have adjusted our
risks associated with the collectability and realizable value for working
capital within the region. Depending on the strategic direction we take towards
our existing operations in Russia , there may be incremental costs or potential
impairments to remediate.
COVID-19
The COVID-19 pandemic and the resulting regulations have caused economic and
social disruptions that contribute to ongoing uncertainties and may have an
impact on the operations, cash flow and net assets of the Company. Such impacts
may include, but are not limited to, volatility of demand for our products;
disruptions and cost implications in manufacturing and supply arrangements;
inability of third parties to meet obligations under existing arrangements; and
significant changes to the political and economic environments in which we
manufacture, sell, and distribute our products. The Company expects a
significant continuing inflationary environment, marked with higher
manufacturing, employment, and logistics costs as well as continued constraints
with transportation and supply chain disruptions. Additionally, there have also
been changes in consumer needs and spending during the COVID-19 pandemic, and
while we experienced an increase in demand for our products resulting from
changes driven by the pandemic, our teams continue to monitor demand shifts and
there can be no assurance as to the level of demand that will prevail throughout
the fiscal year. We believe the severity and duration of the COVID-19 pandemic
to be uncertain and may contribute to retail volatility and consumer purchase
behavior changes.
The COVID-19 pandemic has not had a materially negative impact on the Company's
liquidity position and we have not observed any material impairments. We
continue to actively monitor our global cash and liquidity, and if necessary,
could reinitiate mitigating efforts to manage non-critical spending and assess
operating spend to preserve cash and liquidity. We continue to generate
operating cash flows to meet our short-term liquidity needs, and we expect to
maintain access to the capital markets, although there can be no assurance of
our ability to do so. We expect the ultimate significance of the impact on our
financial condition, results of operations, and cash flows will be dictated by
the length of time that such circumstances continue, which will ultimately
depend on the unforeseeable duration and severity of the COVID-19 pandemic, the
emergence of variants and the effectiveness of vaccines against these variants,
and any governmental and public actions taken in response.
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Inflation and Supply Chain Constraints
While certain aspects of our financial results have been favorably impacted by
increased demand attributable to the COVID-19 pandemic, in addition to favorable
consumer conditions including incremental financial assistance provided by
various government agencies, our business continues to experience challenges
towards product availability to meet customer demand. We have experienced
increased labor shortages in the wake of the COVID-19 pandemic resulting in
transportation and supply chain disruptions. Together with labor shortages and
higher demand for talent, the current economic environment is driving higher
wages. Our ability to meet labor needs, control wage and labor-related costs and
minimize labor disruptions will be key to our success of operating our business
and executing our business strategies. Furthermore, our business is experiencing
an inflationary environment, which has negatively impacted our gross margin
rates. We are unable to predict how long the current inflationary environment,
including increased energy costs, will continue. Additionally, we have
experienced further supply chain disruptions from unanticipated shutdowns in our
supply base and limitations within transportation and logistics impacting
availability and increasing freight costs within the overall global supply
chain. We expect the economic environment to remain uncertain as we navigate the
current geopolitical environment, the COVID-19 pandemic, labor challenges,
supply chain constraints and the current inflationary environment, including
increasing energy and commodity prices.
Non-GAAP Measurements
Our consolidated and segment results contain non-GAAP metrics such as organic
net sales, and adjusted EBITDA ("Earnings Before Interest, Taxes, Depreciation,
Amortization") and adjusted EBITDA margin. While we believe organic net sales
and adjusted EBITDA are useful supplemental information, such adjusted results
are not intended to replace our financial results in accordance with Accounting
Principles Generally Accepted in the United States ("GAAP") and should be read
in conjunction with those GAAP results.
Organic Net Sales . We define organic net sales as net sales excluding the effect
of changes in foreign currency exchange rates and impact from acquisitions (when
applicable). We believe this non-GAAP measure provides useful information to
investors because it reflects regional and operating segment performance from
our activities without the effect of changes in currency exchange rates and
acquisitions. We use organic net sales as one measure to monitor and evaluate
our regional and segment performance. Organic growth is calculated by comparing
organic net sales to net sales in the prior year. The effect of changes in
currency exchange rates is determined by translating the period's net sales
using the currency exchange rates that were in effect during the prior
comparative period. Net sales are attributed to the geographic regions based on
the country of destination. We exclude net sales from acquired businesses in the
current year for which there are no comparable sales in the prior year.
The following is a reconciliation of reported net sales to organic net sales for
the three and nine month periods ended July 3, 2022 compared to net sales for
the three and nine month periods ended July 4, 2021 :
July 3, 2022
Three Month Periods Net Sales
Ended Effect of Excluding Effect
(in millions, except Changes in of Changes in Effect of Organic Net Sales
%) Net Sales Currency Currency Acquisitions Net Sales July 4, 2021 Variance
HPC $ 329.3 $ 17.8 $ 347.1 $ (65.8) $ 281.3 $ 274.4 $ 6.9 2.5 %
GPC 290.2 11.7 301.9 - 301.9 257.3 44.6 17.3 %
H&G 198.5 - 198.5 (5.5) 193.0 212.1 (19.1) (9.0) %
Total $ 818.0 $ 29.5 $ 847.5 $ (71.3) $ 776.2 $ 743.8 32.4 4.4 %
July 3, 2022
Net Sales
Effect of Excluding Effect
Nine Month Periods Ended Changes in of Changes in Effect of Organic Net Sales
(in millions, except %) Net Sales Currency Currency Acquisitions Net Sales July 4, 2021 Variance
HPC $ 1,025.2 $ 34.2 $ 1,059.4 $ (101.6) $ 957.8 $
950.8 $ 7.0 0.7 %
GPC 887.5 19.5 907.0 (8.8) 898.2 826.3 71.9 8.7 %
H&G 470.3 - 470.3 (26.6) 443.7 463.2 (19.5) (4.2) %
Total $ 2,383.0 $ 53.7 $ 2,436.7 $ (137.0) $ 2,299.7 $ 2,240.3 59.4 2.7 % 40
-------------------------------------------------------------------------------- Table of Contents Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures used by management, which we believe provide useful information to investors because they reflect ongoing operating performance and trends of our segments, excluding certain non-cash based expenses and/or non-recurring items during each of the comparable periods. They also facilitate comparisons between peer companies since interest, taxes, depreciation, and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA is also used for determining compliance with the Company's debt covenants. EBITDA is calculated by excluding the Company's income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA further excludes: •Stock based compensation costs consist of costs associated with long-term incentive compensation arrangements that generally consist of non-cash, stock-based compensation. During the nine month period endedJuly 4, 2021 , compensation costs included incentive bridge awards previously issued due to changes in the Company's LTIP that allowed for cash based payment upon employee election but do not qualify for shared-based compensation, which were fully vested inNovember 2020 . See Note 14 - Share Based Compensation in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details; •Incremental amounts attributable to strategic transactions and business development initiatives including, but not limited to, the acquisition or divestitures of a business, costs to effect and facilitate a transaction, including such cost to integrate or separate the respective business. These amounts are excluded from our performance metrics as they are reflective of incremental investment by the Company towards business development activities, incremental costs attributable to such transactions and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments; •Incremental amounts realized towards restructuring and optimization projects including, but not limited to, costs towards the development and implementation of strategies to optimize operations and improve efficiency, reduce costs, increase revenues, increase or maintain our current profit margins, including recognition of one-time exit or disposal costs. These amounts are excluded from our ongoing performance metrics as they are reflective of incremental investment by the Company towards significant initiatives controlled by management, incremental costs directly attributable to such initiatives, indirect impact or disruption to operating performance during implementation, and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments; •Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions the Company's business units excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations. Amounts attributable to unallocated shared costs would be mitigated through subsequent strategic or restructuring initiatives, TSAs, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations following the completed sale of the discontinued operations. See Note 2 - Divestitures in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further details; •Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value and the incremental value in operating lease assets with below market rent, among others; •Non-cash gain from the reduction in the contingent consideration liability recognized during the three and nine month periods endedJuly 3, 2022 associated with the Tristar Business acquisition. See Note 3 - Acquisitions in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations;
•Gains attributable to the Company's investment in Energizer common stock during the nine month period endedJuly 4, 2021 . with such remaining shares sold inJanuary 2021 . See Note 12 - Fair Value of Financial Instruments in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details; •Incremental reserves for non-recurring litigation or environmental remediation activity including the proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual nonrecurring claims with no previous history or precedent recognized during the nine month period endedJuly 4, 2021 and the subsequent remeasurement during the nine month period endedJuly 3, 2022 ; •Proforma adjustment for operating losses of the Company's in-countryRussia operations that were directly attributable to the Company's closing initiatives inRussia and constraints applied to the in-country commercial operations resulting in a substantial decrease to in-country sales and incremental operating losses being realized; •Realized gain from early settlement on certain cash flow hedges in our EMEA region prior to their stated maturity during the three and nine month periods endedJuly 3, 2022 due to change in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region. See Note 11- Derivatives in Notes to the Condensed Consolidated Financial Statement, included elsewhere in this Quarterly Report for further details;
•Other adjustments are primarily attributable to: (1) costs associated with Salus as they are not considered a component of the continuing commercial products company and (2) other key executive severance related costs.
Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of reported net sales for the respective period and segment.
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The following is a reconciliation of net income to Adjusted EBITDA for the three
month periods ended
SPECTRUM BRANDS HOLDINGS, INC. (in millions) HPC GPC H&G Corporate Consolidated Three Month Period EndedJuly 3, 2022 Net income (loss) from continuing operations$ 12.6 $ 18.8 $ 36.3 $ (64.7) $ 3.0 Income tax expense - - - 2.0 2.0 Interest expense - - - 26.0 26.0 Depreciation 2.9 4.0 1.8 3.6 12.3 Amortization 4.7 5.6 2.8 - 13.1 EBITDA 20.2 28.4 40.9 (33.1) 56.4 Share based compensation - - - (0.7) (0.7) Tristar acquisition and integration 5.6 - - - 5.6 Armitage integration - 0.1 - - 0.1 Omega integration - 0.1 - - 0.1 HHI divestiture - - - 0.6 0.6 HPC separation initiatives - - - 10.7 10.7 Coevorden operations separation - 1.9 - - 1.9 Fiscal 2022 restructuring 3.7 3.1 0.6 0.7 8.1 Global ERP transformation - - - 3.4 3.4 GPC distribution center transition - 8.4 - - 8.4 Global productivity improvement program 0.5 0.2 - 0.5 1.2 HPC brand portfolio transitions 0.3 - - - 0.3 Russia closing initiatives 1.4 (1.4) - - - Other project costs 0.4 0.1 - 3.6 4.1 Unallocated shared costs - - - 7.0 7.0 Non-cash purchase accounting adjustments 4.3 - - - 4.3 Gain from contingent consideration liability (25.0) - - - (25.0) Proforma in-country Russia operations 0.4 - - - 0.4 Gain on early settlement of cash flow hedges (8.2) - - - (8.2) Salus and other - - 1.3 0.1 1.4 Adjusted EBITDA$ 3.6 $ 40.9 $ 42.8 $ (7.2) $ 80.1 Net Sales$ 329.3 $ 290.2 $ 198.5 $ -$ 818.0 Adjusted EBITDA Margin 1.1 % 14.1 % 21.6 % $ - 9.8 % Three Month Period EndedJuly 4, 2021 Net (loss) income from continuing operations$ (2.7) $ 27.2 $ 41.7 $ (68.1) $ (1.9) Income tax expense - - - 10.0 10.0 Interest expense - - - 20.4 20.4 Depreciation 3.4 4.1 1.7 3.6 12.8 Amortization 8.3 6.3 2.8 - 17.4 EBITDA 9.0 37.6 46.2 (34.1) 58.7 Share based compensation - - - 7.7 7.7
Rejuvenate acquisition and integration - - 5.8 - 5.8 Armitage integration - 1.0 - - 1.0 HPC separation initiatives - - - (0.5) (0.5) Coevorden operations separation - 2.9 - - 2.9 Global ERP transformation - - - 0.9 0.9 GPC distribution center transition - 7.7 - - 7.7 Global productivity improvement program 2.1 - - 2.7 4.8 Other project costs 0.7 - 0.1 1.6 2.4 Unallocated shared costs - - - 6.7 6.7 Non-cash purchase accounting adjustments - - 1.3 - 1.3 Adjusted EBITDA$ 11.8 $ 49.2 $ 53.4 $ (15.0) $ 99.4 Net Sales$ 274.4 $ 257.3 $ 212.1 $ -$ 743.8 Adjusted EBITDA margin 4.3 % 19.1 % 25.2 % - 13.4 % 42
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Table of Contents
The following is a reconciliation of net income to Adjusted EBITDA for the nine
month periods ended
SPECTRUM BRANDS HOLDINGS, INC. (in millions) HPC GPC H&G Corporate Consolidated Nine Month Period EndedJuly 3, 2022 Net income (loss) from continuing operations$ 12.7 $ 49.1 $ 50.7 $ (164.8) $ (52.3) Income tax benefit - - - (20.8) (20.8) Interest expense - - - 72.4 72.4 Depreciation 9.2 11.1 5.4 10.9 36.6 Amortization 14.2 17.1 8.6 - 39.9 EBITDA 36.1 77.3 64.7 (102.3) 75.8 Share based compensation - - - 11.4 11.4 Tristar acquisition and integration 20.0 - - - 20.0 Rejuvenate integration - - 7.0 - 7.0 Armitage integration - 1.4 - - 1.4 Omega integration - 1.5 - - 1.5 HHI divestiture - - - 6.1 6.1 HPC separation initiatives - - - 15.4 15.4 Coevorden operations separation - 7.3 - - 7.3 Fiscal 2022 restructuring 3.7 3.1 0.6 0.7 8.1 Global ERP transformation - - - 9.4 9.4 GPC distribution center transition - 28.3 - - 28.3 Global productivity improvement program 2.5 0.9 - 1.8 5.2 HPC brand portfolio transitions 0.3 - - - 0.3 Russia in-country closing initiatives 3.4 0.2 - - 3.6 Other project costs 0.6 0.2 - 9.9 10.7 Unallocated shared costs - - - 20.7 20.7 Non-cash purchase accounting adjustments 7.8 - - - 7.8 Gain from contingent consideration liability (25.0) - - - (25.0) Legal and environmental - - (0.5) - (0.5) Proforma in-country Russia operations 0.4 - - - 0.4 Gain on early settlement of cash flow hedges (8.2) - - - (8.2) Salus and other - - 1.3 0.4 1.7 Adjusted EBITDA$ 41.6 $ 120.2 $ 73.1 $ (26.5) $ 208.4 Net sales$ 1,025.2 $ 887.5 $ 470.3 $ -$ 2,383.0 Adjusted EBITDA margin 4.1 % 13.5 % 15.5 % - 8.7 % Nine Month Period EndedJuly 4, 2021 Net income (loss) from continuing operations$ 46.4 $ 99.9 $ 71.1 $ (208.2) $ 9.2 Income tax expense - - - 5.3 5.3 Interest expense - - - 96.4 96.4 Depreciation 10.5 11.6 6.2 10.9 39.2 Amortization 21.8 18.2 8.2 - 48.2 EBITDA 78.7 129.7 85.5 (95.6) 198.3 Share and incentive based compensation - - - 21.9 21.9 Rejuvenate acquisition and integration - - 5.8 - 5.8 Armitage acquisition and integration - 7.7 - - 7.7 HPC separation initiatives - - - 14.2 14.2 Coevorden operations separation - 7.7 - - 7.7 Global ERP transformation - - - 1.6 1.6 GPC distribution center transition - 7.7 - - 7.7 Global productivity improvement program 5.2 1.8 - 8.7 15.7 Other project costs 4.2 0.5 - 3.4 8.1 Unallocated shared costs - - - 20.2 20.2 Non-cash purchase accounting adjustments - 3.4 1.3 - 4.7 Gain on Energizer investment - - - (6.9) (6.9) Legal and environmental - - 6.0 - 6.0 Salus and other - - - 0.1 0.1 Adjusted EBITDA$ 88.1 $ 158.5 $ 98.6 $ (32.4) $ 312.8 Net sales$ 950.8 $ 826.3 $ 463.2 $ -$ 2,240.3 Adjusted EBITDA margin 9.3 % 19.2 % 21.3 % - 14.0 % 43
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Table of Contents
The following is a reconciliation of net income to Adjusted EBITDA for the three
month periods ended
SB/RH HOLDINGS, LLC (in millions) HPC GPC H&G Corporate Consolidated Three Month Period EndedJuly 3, 2022 Net income (loss) from continuing operations$ 12.6 $ 18.8 $ 36.3 $ (64.0) $ 3.7 Income tax expense - - - 2.0 2.0 Interest expense - - - 26.1 26.1 Depreciation 2.9 4.0 1.8 3.6 12.3 Amortization 4.7 5.6 2.8 - 13.1 EBITDA 20.2 28.4 40.9 (32.3) 57.2 Share and incentive based compensation - - - (1.1) (1.1) Tristar acquisition and integration 5.6 - - - 5.6 Armitage integration - 0.1 - - 0.1 Omega integration - 0.1 - - 0.1 HHI divestiture - - - 0.6 0.6 HPC separation initiatives - - - 10.7 10.7 Coevorden operations separation - 1.9 - - 1.9 Fiscal 2022 restructuring 3.7 3.1 0.6 0.7 8.1 Global ERP transformation - - - 3.4 3.4 GPC distribution center transition - 8.4 - - 8.4 Global productivity improvement program 0.5 0.2 - 0.5 1.2 HPC brand portfolio transitions 0.3 - - - 0.3 Russia closing initiatives 1.4 (1.4) - - - Other project costs 0.4 0.1 - 3.6 4.1 Unallocated shared costs - - - 7.0 7.0 Non-cash purchase accounting adjustments 4.3 - - - 4.3 Gain from contingent consideration liability (25.0) - - - (25.0) Proforma in-country Russia operations 0.4 - - - 0.4 Gain on early settlement of cash flow hedges (8.2) - - - (8.2) Other - - 1.3 0.2 1.5 Adjusted EBITDA$ 3.6 $ 40.9 $ 42.8 $ (6.7) $ 80.6 Net Sales$ 329.3 $ 290.2 $ 198.5 $ -$ 818.0 Adjusted EBITDA margin 1.1 % 14.1 % 21.6 % - 9.9 %
Three Month Period Ended
Net (loss) income from continuing operations$ (2.7) $ 27.2 $ 41.7 $ (67.2) $ (1.0) Income tax expense - - - 10.6 10.6 Interest expense - - - 20.5 20.5 Depreciation 3.4 4.1 1.7 3.6 12.8 Amortization 8.3 6.3 2.8 - 17.4 EBITDA 9.0 37.6 46.2 (32.5) 60.3 Share and incentive based compensation - - - 7.1 7.1 Rejuvenate acquisition and integration - - 5.8 - 5.8 Armitage integration - 1.0 - - 1.0 HPC separation initiatives - - - (0.5) (0.5) Coevorden operations separation - 2.9 - - 2.9 Global ERP transformation - - - 0.9 0.9 GPC distribution center transition - 7.7 - - 7.7 Global productivity improvement program 2.1 - - 2.7 4.8 Other project costs 0.7 - 0.1 1.6 2.4 Unallocated shared costs - - - 6.7 6.7 Non-cash purchase accounting adjustments - - 1.3 - 1.3 Adjusted EBITDA$ 11.8 $ 49.2 $ 53.4 $ (14.0) $ 100.4 Net Sales$ 274.4 $ 257.3 $ 212.1 $ -$ 743.8 Adjusted EBITDA margin 4.3 % 19.1 % 25.2 % - 13.5 % 44
-------------------------------------------------------------------------------- Table of Contents The following is a reconciliation of net income to Adjusted EBITDA for the nine month periods endedJuly 3, 2022 andJuly 4, 2021 for SB/RH.SB/RH HOLDINGS, LLC (in millions) HPC GPC H&G Corporate Consolidated Nine Month Period EndedJuly 3, 2022 Net income (loss) from continuing operations$ 12.7 $ 49.1 $ 50.7 $ (163.5) $ (51.0) Income tax benefit - - - (20.4) (20.4) Interest expense - - - 72.7 72.7 Depreciation 9.2 11.1 5.4 10.9 36.6 Amortization 14.2 17.1 8.6 - 39.9 EBITDA 36.1 77.3 64.7 (100.3) 77.8 Share based compensation - - - 10.7 10.7 Tristar acquisition and integration 20.0 - - - 20.0 Rejuvenate integration - - 7.0 - 7.0 Armitage integration - 1.4 - - 1.4 Omega integration - 1.5 - - 1.5 HHI divestiture - - - 6.1 6.1 HPC separation initiatives - - - 15.4 15.4 Coevorden operations separation - 7.3 - - 7.3 Fiscal 2022 restructuring 3.7 3.1 0.6 0.7 8.1 Global ERP transformation - - - 9.4 9.4 GPC distribution center transition - 28.3 - - 28.3 Global productivity improvement program 2.5 0.9 - 1.8 5.2 HPC brand portfolio transitions 0.3 - - - 0.3 Russia dissolution 3.4 0.2 - - 3.6 Other project costs 0.6 0.2 - 9.9 10.7 Unallocated shared costs - - - 20.7 20.7 Non-cash purchase accounting adjustments 7.8 - - - 7.8 Gain from contingent consideration liability (25.0) - - - (25.0) Legal and environmental - - (0.5) - (0.5) Proforma in-country Russia operations 0.4 - - - 0.4 Gain on early settlement of cash flow hedges (8.2) - - - (8.2) Other - - 1.3 0.1 1.4 Adjusted EBITDA$ 41.6 $ 120.2 $ 73.1 $ (25.5) $ 209.4 Net sales$ 1,025.2 $ 887.5
4.1 % 13.5 % 15.5 % - 8.8 %
Nine Month Period Ended July 4, 2021
Net income (loss) from continuing
operations $ 46.4 $ 99.9 $ 71.1 $ (206.4) $ 11.0
Income tax expense - - - 6.1 6.1
Interest expense - - - 96.6 96.6
Depreciation 10.5 11.6 6.2 10.9 39.2
Amortization 21.8 18.2 8.2 - 48.2
EBITDA 78.7 129.7 85.5 (92.8) 201.1
Share and incentive based
compensation - - - 20.7 20.7
Rejuvenate acquisition and
integration - - 5.8 - 5.8
Armitage acquisition and integration - 7.7 - - 7.7
HPC separation initiatives - - - 14.2 14.2
Coevorden operations separation - 7.7 - - 7.7
Global ERP transformation - - - 1.6 1.6
GPC distribution center transition - 7.7 - - 7.7
Global productivity improvement
program 5.2 1.8 - 8.7 15.7
Other project costs 4.2 0.5 - 3.4 8.1
Unallocated shared costs - - - 20.2 20.2
Non-cash purchase accounting
adjustments - 3.4 1.3 - 4.7
Gain on Energizer investment - - - (6.9) (6.9)
Legal and environmental - - 6.0 - 6.0
Other - - - 0.1 0.1
Adjusted EBITDA $ 88.1 $ 158.5 $ 98.6 $ (30.8) $ 314.4
Net sales $ 950.8 $ 826.3 $ 463.2 $ - $ 2,240.3
Adjusted EBITDA margin 9.3 % 19.2 % 21.3 % - % 14.0 %
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