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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 4, 2021April 3, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to______
spb-20220403_g1.jpg
Commission File No.
Name of Registrant, State of Incorporation,
Address of Principal Offices, and Telephone No.
IRS Employer Identification No.
1-4219Spectrum Brands Holdings, Inc.74-1339132
(a Delaware corporation)
3001 Deming Way
Middleton, WI 53562
(608) 275-3340
www.spectrumbrands.com
333-192634-03SB/RH Holdings, LLC27-2812840
(a Delaware limited liability company)
3001 Deming Way
Middleton, WI 53562
(608) 275-3340
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Spectrum Brands Holdings, Inc.Yes☒No☐
SB/RH Holdings, LLCYes☒No☐
Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 
Spectrum Brands Holdings, Inc.Yes☒No☐
SB/RH Holdings, LLCYes☒No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
RegistrantLarge Accelerated FilerAccelerated FilerNon-accelerated Filer
Smaller Reporting Company
Spectrum Brands Holdings, Inc.X
SB/RH Holdings, LLCX
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Spectrum Brands Holdings, Inc.Yes☐No☒
SB/RH Holdings, LLCYes☐No☒
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§232.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter
Spectrum Brands Holdings, Inc.Yes☐No☒
SB/RH Holdings, LLCYes☐No☒
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Spectrum Brands Holdings, Inc.☐
SB/RH Holdings, LLC☐
Securities registered pursuant to Section 12(b) of the Exchange Act:
RegistrantTitle of Each ClassTrading SymbolName of Exchange On Which Registered
Spectrum Brands Holdings, Inc.Common Stock, $0.01 par valueSPBNew York Stock Exchange
As of AugustMay 3, 2021,2022, there were 42,526,12040,776,213 shares outstanding of Spectrum Brands Holdings, Inc.’s common stock, par value $0.01 per share.
SB/RH Holdings, LLC meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this report with a reduced disclosure format as permitted by general instruction H(2).

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Forward-Looking Statements
We have made or implied certain forward-looking statements in this report including without limitation, statements regarding the Company's recently adopted share repurchase program, for which the manner of purchase, the number of shares to be purchased and the timing of purchases will be based on a number of factors including the price of the Company's common stock, general business and market conditions and applicable legal requirements, and is subject to the discretion of the Company's management and may be commenced, suspended or discontinued at any time.document. All statements, other than statements of historical facts included or incorporated by reference in this report,document, including the statements under Management’s Discussion and Analysis of Financial Condition and Results of Operations, without limitation, statements or expectations regarding our Global Productivity Improvement Program, our business strategy, future operations, financial condition, estimated revenues, projected costs, projected synergies, prospects, plans and objectives of management, information concerning expected actions of third parties retention and future compensation of key personnel, our ability to meet environmental, social, and governance goals, the expected impact of the COVID-19 pandemic, economic, social, and political conditions or civil unrest in the U.S. and other countries, and other statements regarding the Company's ability to meet its expectations for its fiscal 2021 are forward-looking statements. When used in this report, the words future, anticipate, pro forma, seeks,seek, intend, plan, envision, estimate, believe, belief, expect, project, forecast, outlook, goal, target, could, would, will, can, should, may and similar expressions are also intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.
Since these forward-looking statements are based upon our current expectations of future events and projections and are subject to a number of risks and uncertainties, many of which are beyond our control and some of which may change rapidly, actual results or outcomes may differ materially from those expressed or implied herein, and you should not place undue reliance on these statements. Important factors that could cause our actual results to differ materially from those expressed or implied herein include, without limitation: 
•the impact of the COVID-19 pandemic, oneconomic, social and political conditions or civil unrest, terrorist attacks, acts of war, natural disasters, other public health concerns or unrest in international markets impacting our business, customers, employees (including our ability to retain and attract key personnel), manufacturing facilities, suppliers, the capital markets, and our financial condition, and results of operations, all of which tend to aggravate the other risks and uncertainties we face;
•the impact of a number of local, regional and global uncertainties that could negatively impact our business, including: reduced market growth rates; increased inflation rates and cost of goods; increased fuel and employee costs; higher interest rates; tighter credit markets; changes in government policies, including the imposition of tariffs or import costs; the deterioration of economic relations between countries or regions; the escalation or continuation of armed conflict, hostilities or economic sanctions between countries or regions, and continued supply chain challenges;
•the negative effect of the armed conflict between Russia and Ukraine and its impact on those regions and surrounding regions, including on our operations and on those of our customers, suppliers, and other stakeholders;
•our increased reliance on third-party partners, suppliers, and distributors to achieve our business objectives;
•the impact of expenses resulting from the implementation of new business strategies, divestitures or current and proposed restructuring activities, including distribution center changes which are complicated and involve coordination among a number of stakeholders, including our suppliers and transportation and logistics handlers;
•the impact of our indebtedness on our business, financial condition, and results of operations;
•the impact of restrictions in our debt instruments on our ability to operate our business, finance our capital needs or pursue or expand business strategies;
•any failure to comply with financial covenants and other provisions and restrictions of our debt instruments;
•the effects of general economic conditions, including the impact of, and changes to tariffs and trade policies, inflation, recession or fears of a recession, depression or fears of a depression, labor costs, and stock market volatility or monetary or fiscal policies in the countries where we do business;
•the impact of fluctuations in transportation and shipment costs, fuel costs, commodity prices, costs or availability of raw materials or terms and conditions available from suppliers, including suppliers’ willingness to advance credit;
•interest rate and exchange rate fluctuations;
•the loss of, significant reduction in, or dependence upon, sales to any significant retail customer(s);
•competitive promotional activity or spending by competitors, or price reductions by competitors;
•the introduction of new product features or technological developments by competitors and/or the development of new competitors or competitive brands;
•the impact of actions taken by significant stockholders;
•changes in consumer spending preferences and demand for our products, particularly in light of the COVID-19 pandemic and economic stress;
•our ability to develop and successfully introduce new products, protect our intellectual property and avoid infringing the intellectual property of third parties;
•our ability to successfully identify, implement, achieve and sustain productivity improvements (including our Global Productivity Improvement Program), cost efficiencies (including at our manufacturing and distribution operations), and cost savings;
•the seasonal nature of sales of certain of our products;
•the effects of climate change and unusual weather activity as well as furtherour ability to respond to future natural disasters and pandemics;pandemics and to meet our environmental, social and governance goals;
•the cost and effect of unanticipated legal, tax or regulatory proceedings or new laws or regulations (including environmental, public health, and consumer protection regulations);
•our discretion to conduct, suspend or discontinue our share repurchase program (including our discretion to conduct purchases, if any, in a variety of manners including open-market purchases or privately negotiated transactions);
•public perception regarding the safety of products that we manufacture and sell, including the potential for environmental liabilities, product liability claims, litigation and other claims related to products manufactured by us and third parties;
•the impact of existing, pending or threatened litigation, government regulationsregulation or other requirements or operating standards applicable to our business;
•the impact of cybersecurity breaches or our actual or perceived failure to protect company and personal data, including our failure to comply with new orand increasingly complex global data privacy regulations;
•changes in accounting policies applicable to our business;
•our discretion to conduct, suspend or discontinue our share repurchase program (including our discretion to conduct purchases, if any, in a variety of manners including open-market purchases or privately negotiated transactions);
•our ability to utilize net operating loss carry-forwards to offset tax liabilities from future taxable income;
•our ability to consummate the impactannounced Hardware and Home Improvement ("HHI") divestiture on the expected terms and within the anticipated time period, or at all, which is dependent on the parties' ability to satisfy certain closing conditions and our ability to realize the benefits of expenses resulting from the implementationtransaction, including reducing the leverage of newthe Company, invest in the organic growth of the Company, fund any future acquisitions, return capital to shareholders, and/or maintain its quarterly dividends;

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•the risk that regulatory approvals that are required to complete the proposed HHI divestiture may not be realized, may take longer than expected or may impose adverse conditions;
•our ability to successfully integrate the Tristar Business into the Company's Home and Personal Care business strategies, divestituresand realize the benefits of this acquisition;
•our ability to separate the Company's Home and Personal Care business and create an independent Global Appliances business on expected terms, and within the anticipated time period, or currentat all, and proposed restructuring activities;to realize the potential benefits of such business;
•our ability to create a pure play company composed of our Global Pet Care and Home & Garden business and to realize the expected benefits of such creation, and within anticipated time period, or at all;
•our ability to successfully implement further acquisitions or dispositions and the impact of any such transactions on our financial performance;performance
•the unanticipated loss of key members of senior management and the transition of new members of our management teams to their new roles; and
•the impact of economic, social and political conditions or civil unrest in the U.S. and other countries;countries.
•the effects of political or economic conditions, terrorist attacks, acts of war, natural disasters, public health concerns or other unrest in international markets;
•our ability to achieve our goals regarding environmental, social, and governance practices; and
•our increased reliance on third-party partners, suppliers, and distributors to achieve our business objectives.
Some of the above-mentioned factors are described in further detail in the sections entitled Risk Factors in our annual and quarterly reports (including this report), as applicable. You should assume the information appearing in this report is accurate only as of the end of the period covered by this report, or as otherwise specified, as our business, financial condition, results of operations and prospects may have changed since that date. Except as required by applicable law, including the securities laws of the United States (“U.S.”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”), we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
TABLE OF CONTENTS
This report is a combined report of Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC. The combined notes to the condensed consolidated financial statements include notes representing Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC and certain notes related specifically to SB/RH Holdings, LLC.
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PART I. FINANCIAL INFORMATION
Item 1.     Financial Statements

SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Financial Position
As of July 4, 2021,April 3, 2022, and September 30, 20202021
(unaudited)
(in millions)(in millions)July 4, 2021September 30, 2020(in millions)April 3, 2022September 30, 2021
AssetsAssetsAssets
Cash and cash equivalentsCash and cash equivalents$130.2 $531.6 Cash and cash equivalents$193.7 $187.9 
Trade receivables, netTrade receivables, net479.5 501.1 Trade receivables, net349.5 248.4 
Other receivablesOther receivables75.0 74.2 Other receivables125.3 63.7 
InventoriesInventories908.3 557.7 Inventories800.6 562.8 
Prepaid expenses and other current assetsPrepaid expenses and other current assets81.9 63.5 Prepaid expenses and other current assets54.9 40.8 
Current assets of business held for saleCurrent assets of business held for sale1,919.8 1,810.0 
Total current assetsTotal current assets1,674.9 1,728.1 Total current assets3,443.8 2,913.6 
Property, plant and equipment, netProperty, plant and equipment, net390.6 396.5 Property, plant and equipment, net256.4 260.2 
Operating lease assetsOperating lease assets118.3 103.8 Operating lease assets74.3 56.5 
Deferred charges and otherDeferred charges and other51.0 115.2 Deferred charges and other80.7 38.8 
GoodwillGoodwill1,583.9 1,332.0 Goodwill967.0 867.2 
Intangible assets, netIntangible assets, net1,605.9 1,431.7 Intangible assets, net1,263.7 1,204.1 
Total assetsTotal assets$5,424.6 $5,107.3 Total assets$6,085.9 $5,340.4 
Liabilities and Shareholders' EquityLiabilities and Shareholders' EquityLiabilities and Shareholders' Equity
Current portion of long-term debtCurrent portion of long-term debt$17.7 $15.3 Current portion of long-term debt$12.1 $12.0 
Accounts payableAccounts payable522.5 557.5 Accounts payable522.2 388.6 
Accrued wages and salariesAccrued wages and salaries89.8 95.0 Accrued wages and salaries43.4 67.4 
Accrued interestAccrued interest36.0 38.5 Accrued interest15.7 29.9 
Other current liabilitiesOther current liabilities266.9 238.6 Other current liabilities235.0 211.9 
Current liabilities of business held for saleCurrent liabilities of business held for sale475.7 454.3 
Total current liabilitiesTotal current liabilities932.9 944.9 Total current liabilities1,304.1 1,164.1 
Long-term debt, net of current portionLong-term debt, net of current portion2,651.1 2,461.0 Long-term debt, net of current portion3,236.3 2,494.3 
Long-term operating lease liabilitiesLong-term operating lease liabilities99.7 88.8 Long-term operating lease liabilities48.1 44.5 
Deferred income taxesDeferred income taxes105.1 65.4 Deferred income taxes74.7 59.5 
Other long-term liabilitiesOther long-term liabilities127.6 131.4 Other long-term liabilities94.1 99.0 
Total liabilitiesTotal liabilities3,916.4 3,691.5 Total liabilities4,757.3 3,861.4 
Commitments and contingencies (Note 19)


0
Commitments and contingencies (Note 17)Commitments and contingencies (Note 17)


0
0Shareholders' equity0Shareholders' equity0Shareholders' equity
Common stockCommon stock0.5 0.5 Common stock0.5 0.5 
Additional paid-in capitalAdditional paid-in capital2,058.0 2,054.3 Additional paid-in capital2,033.2 2,063.8 
Accumulated earningsAccumulated earnings328.1 243.9 Accumulated earnings348.7 359.9 
Accumulated other comprehensive loss, net of taxAccumulated other comprehensive loss, net of tax(239.6)(284.7)Accumulated other comprehensive loss, net of tax(231.3)(235.3)
Treasury stockTreasury stock(646.1)(606.5)Treasury stock(828.8)(717.0)
Total shareholders' equityTotal shareholders' equity1,500.9 1,407.5 Total shareholders' equity1,322.3 1,471.9 
Non-controlling interestNon-controlling interest7.3 8.3 Non-controlling interest6.3 7.1 
Total equityTotal equity1,508.2 1,415.8 Total equity1,328.6 1,479.0 
Total liabilities and equityTotal liabilities and equity$5,424.6 $5,107.3 Total liabilities and equity$6,085.9 $5,340.4 
See accompanying notes to the condensed consolidated financial statements
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SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Income
For the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020
(unaudited)
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions, except per share)(in millions, except per share)July 4, 2021June 28, 2020July 4, 2021June 28, 2020(in millions, except per share)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net SalesNet Sales$1,162.8 $984.3 $3,457.5 $2,793.6 Net Sales$807.8 $760.3 $1,565.0 $1,496.5 
Cost of goods soldCost of goods sold755.1 635.7 2,222.1 1,834.2 Cost of goods sold551.0 498.0 1,088.6 981.3 
Restructuring and related chargesRestructuring and related charges0.3 (0.3)1.7 12.5 Restructuring and related charges1.2 1.3 1.5 1.4 
Gross profitGross profit407.4 348.9 1,233.7 946.9 Gross profit255.6 261.0 474.9 513.8 
SellingSelling189.8 141.3 529.8 437.4 Selling144.1 121.9 280.1 236.6 
General and administrativeGeneral and administrative85.6 83.6 266.4 245.7 General and administrative76.0 74.8 143.6 152.5 
Research and developmentResearch and development13.1 9.7 36.1 29.7 Research and development8.2 7.8 15.8 14.4 
Restructuring and related chargesRestructuring and related charges9.8 12.5 21.7 49.1 Restructuring and related charges15.2 3.0 32.3 11.9 
Transaction related chargesTransaction related charges11.1 6.1 41.4 17.4 Transaction related charges20.2 8.2 35.1 27.2 
Loss on assets held for sale0 1.1 0 26.8 
Write-off from impairment of intangible assets0 0 0 24.2 
Total operating expensesTotal operating expenses309.4 254.3 895.4 830.3 Total operating expenses263.7 215.7 506.9 442.6 
Operating income98.0 94.6 338.3 116.6 
Operating (loss) incomeOperating (loss) income(8.1)45.3 (32.0)71.2 
Interest expenseInterest expense31.4 36.1 133.7 106.5 Interest expense24.7 52.8 46.4 76.0 
Gain from extinguishment of Salus CLO debt0 (76.2)0 (76.2)
Other non-operating expense (income), net3.0 (56.5)(4.6)10.2 
Income from continuing operations before income taxes63.6 191.2 209.2 76.1 
Income tax expense27.7 53.6 63.3 35.3 
Net income from continuing operations35.9 137.6 145.9 40.8 
(Loss) income from discontinued operations, net of tax(5.2)8.0 (6.6)12.2 
Other non-operating income, netOther non-operating income, net(0.9)(2.2)(0.3)(11.1)
(Loss) income from continuing operations before income taxes(Loss) income from continuing operations before income taxes(31.9)(5.3)(78.1)6.3 
Income tax benefitIncome tax benefit(6.8)(0.7)(22.8)(4.8)
Net (loss) income from continuing operationsNet (loss) income from continuing operations(25.1)(4.6)(55.3)11.1 
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax41.1 40.3 79.9 97.5 
Net incomeNet income30.7 145.6 139.3 53.0 Net income16.0 35.7 24.6 108.6 
Net income (loss) attributable to non-controlling interest0 0.5 (0.1)0.6 
Net (loss) income from continuing operations attributable to non-controlling interestNet (loss) income from continuing operations attributable to non-controlling interest— (0.9)— 0.1 
Net income (loss) from discontinued operations attributable to non-controlling interestNet income (loss) from discontinued operations attributable to non-controlling interest0.1 — 0.5 (0.2)
Net income attributable to controlling interestNet income attributable to controlling interest$30.7 $145.1 $139.4 $52.4 Net income attributable to controlling interest$15.9 $36.6 $24.1 $108.7 
Amounts attributable to controlling interestAmounts attributable to controlling interestAmounts attributable to controlling interest
Net income from continuing operations attributable to controlling interest$35.9 $137.1 $146.0 $40.2 
Net (loss) income from discontinued operations attributable to controlling interest(5.2)8.0 (6.6)12.2 
Net (loss) income from continuing operations attributable to controlling interestNet (loss) income from continuing operations attributable to controlling interest$(25.1)$(3.7)$(55.3)$11.0 
Net income from discontinued operations attributable to controlling interestNet income from discontinued operations attributable to controlling interest41.0 40.3 79.4 97.7 
Net income attributable to controlling interestNet income attributable to controlling interest$30.7 $145.1 $139.4 $52.4 Net income attributable to controlling interest$15.9 $36.6 $24.1 $108.7 
Earnings Per ShareEarnings Per ShareEarnings Per Share
Basic earnings per share from continuing operationsBasic earnings per share from continuing operations$0.84 $3.19 $3.42 $0.89 Basic earnings per share from continuing operations$(0.61)$(0.09)$(1.35)$0.26 
Basic earnings per share from discontinued operationsBasic earnings per share from discontinued operations(0.12)0.18 (0.15)0.27 Basic earnings per share from discontinued operations1.00 0.95 1.94 2.28 
Basic earnings per shareBasic earnings per share$0.72 $3.37 $3.27 $1.16 Basic earnings per share$0.39 $0.86 $0.59 $2.54 
Diluted earnings per share from continuing operationsDiluted earnings per share from continuing operations$0.84 $3.18 $3.40 $0.89 Diluted earnings per share from continuing operations$(0.61)$(0.09)$(1.35)$0.26 
Diluted earnings per share from discontinued operationsDiluted earnings per share from discontinued operations(0.12)0.18 (0.15)0.27 Diluted earnings per share from discontinued operations1.00 0.95 1.94 2.27 
Diluted earnings per shareDiluted earnings per share$0.72 $3.36 $3.25 $1.16 Diluted earnings per share$0.39 $0.86 $0.59 $2.53 
Dividend per shareDividend per share$0.42 $0.42 $1.26 $1.26 Dividend per share$0.42 $0.42 $0.84 $0.84 
Weighted Average Shares OutstandingWeighted Average Shares OutstandingWeighted Average Shares Outstanding
BasicBasic42.6 43.1 42.7 45.3 Basic40.8 42.6 41.1 42.8 
DilutedDiluted42.9 43.2 42.9 45.4 Diluted40.8 42.6 41.1 43.0 
See accompanying notes to the condensed consolidated financial statements
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SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Comprehensive Income
For the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020
(unaudited)
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net incomeNet income$30.7 $145.6 $139.3 $53.0 Net income$16.0 $35.7 $24.6 $108.6 
Other comprehensive income
Foreign currency translation gain (loss)0.9 7.5 42.6 (13.3)
Other comprehensive (loss) incomeOther comprehensive (loss) income
Foreign currency translation (loss) gainForeign currency translation (loss) gain(1.6)22.2 5.1 41.6 
Deferred tax effectDeferred tax effect0.9 (0.1)1.2 0 Deferred tax effect(3.1)(5.0)(7.6)0.3 
Net unrealized gain (loss) on foreign currency translation1.8 7.4 43.8 (13.3)
Net unrealized (loss) gain on foreign currency translationNet unrealized (loss) gain on foreign currency translation(4.7)17.2 (2.5)41.9 
Unrealized gain (loss) on derivative instrumentsUnrealized gain (loss) on derivative instrumentsUnrealized gain (loss) on derivative instruments
Unrealized loss on hedging activity before reclassification(1.0)(2.1)(7.6)(0.5)
Net reclassification for loss (gain) to income from continuing operations2.8 (2.0)8.4 (6.3)
Unrealized gain (loss) on hedging activity before reclassificationUnrealized gain (loss) on hedging activity before reclassification6.4 5.8 7.6 (6.6)
Net reclassification for (gain) loss to income from continuing operationsNet reclassification for (gain) loss to income from continuing operations(1.5)3.1 (3.6)5.8 
Net reclassification for gain to income from discontinued operationsNet reclassification for gain to income from discontinued operations(0.7)(0.1)(1.2)(0.1)
Unrealized gain (loss) on hedging instruments after reclassificationUnrealized gain (loss) on hedging instruments after reclassification1.8 (4.1)0.8 (6.8)Unrealized gain (loss) on hedging instruments after reclassification4.2 8.8 2.8 (0.9)
Deferred tax effectDeferred tax effect(0.4)1.7 (0.3)2.8 Deferred tax effect(1.0)(2.4)3.5 0.1 
Net unrealized gain (loss) on hedging derivative instrumentsNet unrealized gain (loss) on hedging derivative instruments1.4 (2.4)0.5 (4.0)Net unrealized gain (loss) on hedging derivative instruments3.2 6.4 6.3 (0.8)
Defined benefit pension gainDefined benefit pension gainDefined benefit pension gain
Defined benefit pension (loss) gain before reclassification(0.2)(0.8)(1.5)3.0 
Defined benefit pension gain (loss) before reclassificationDefined benefit pension gain (loss) before reclassification1.0 0.9 1.7 (1.3)
Net reclassification for loss to income from continuing operationsNet reclassification for loss to income from continuing operations1.1 1.0 3.3 3.1 Net reclassification for loss to income from continuing operations1.0 1.1 2.0 2.2 
Defined benefit pension gain after reclassificationDefined benefit pension gain after reclassification0.9 0.2 1.8 6.1 Defined benefit pension gain after reclassification2.0 2.0 3.7 0.9 
Deferred tax effectDeferred tax effect(0.2)0 (0.6)(0.4)Deferred tax effect(0.6)(0.6)(3.5)(0.4)
Net defined benefit pension gainNet defined benefit pension gain0.7 0.2 1.2 5.7 Net defined benefit pension gain1.4 1.4 0.2 0.5 
Deconsolidation of discontinued operations and assets held for sale0 0 0 8.1 
Net change to derive comprehensive income (loss) for the periods3.9 5.2 45.5 (3.5)
Net change to derive comprehensive income for the periodNet change to derive comprehensive income for the period(0.1)25.0 4.0 41.6 
Comprehensive incomeComprehensive income34.6 150.8 184.8 49.5 Comprehensive income15.9 60.7 28.6 150.2 
Comprehensive income attributable to non-controlling interest0.1 0 0.4 0 
Comprehensive loss from continuing operations attributable to non-controlling interestComprehensive loss from continuing operations attributable to non-controlling interest(0.1)(0.1)(0.1)— 
Comprehensive income from discontinuing operations attributable to non-controlling interestComprehensive income from discontinuing operations attributable to non-controlling interest— — 0.1 0.3 
Comprehensive income attributable to controlling interestComprehensive income attributable to controlling interest$34.5 $150.8 $184.4 $49.5 Comprehensive income attributable to controlling interest$16.0 $60.8 $28.6 $149.9 
See accompanying notes to the condensed consolidated financial statements
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SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Shareholder’sShareholders' Equity
For the ninesix month period ended July 4, 2021April 3, 2022
(unaudited)
Nine Month Period Ended July 4, 2021Common StockAdditional
Paid-in
Capital		Accumulated
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity
(in millions)SharesAmount
Balances at September 30, 202043.1 $0.5 $2,054.3 $243.9 $(284.7)$(606.5)$1,407.5 $8.3 $1,415.8 
Net income from continuing operations— — — 72.4 — — 72.4 0.8 73.2 
Loss from discontinued operations, net of tax— — — (0.3)— — (0.3)— (0.3)
Other comprehensive income, net of tax— — — — 16.2 — 16.2 0.4 16.6 
Treasury stock repurchases(0.6)— — — — (42.3)(42.3)— (42.3)
Restricted stock issued and related tax withholdings0.2 — (18.6)— — 11.7 (6.9)— (6.9)
Share based compensation— — 7.5 — — — 7.5 — 7.5 
Dividends declared— — — (18.4)— — (18.4)— (18.4)
Dividend paid by subsidiary to NCI— — — — — — — (1.0)(1.0)
Balances as of January 3, 202142.7 0.5 2,043.2 297.6 (268.5)(637.1)1,435.7 8.5 1,444.2 
Net income (loss) from continuing operations— — — 37.7 — — 37.7 (0.9)36.8 
Loss from discontinued operations, net of tax— — — (1.1)— — (1.1)— (1.1)
Sale and deconsolidation of assets held for sale— — — — — — — — 0 
Other comprehensive income (loss), net of tax— — — — 25.1 — 25.1 (0.1)25.0 
Restricted stock issued and related tax withholdings— — (0.1)— — 0.1 — — 0 
Share based compensation— — 8.5 — — — 8.5 — 8.5 
Dividends declared— — — (18.5)— — (18.5)— (18.5)
Dividend paid by subsidiary to NCI— — — — — — — (0.3)(0.3)
Balances as of April 4, 202142.7 0.5 2,051.6 315.7 (243.4)(637.0)1,487.4 7.2 1,494.6 
Net income from continuing operations— — — 35.9 — — 35.9 — 35.9 
Loss from discontinued operations, net of tax— — — (5.2)— — (5.2)— (5.2)
Other comprehensive income, net of tax— — — — 3.8 — 3.8 0.1 3.9 
Restricted stock issued and related tax withholdings— — (1.1)— — 1.1 — — 0 
Treasury stock repurchases(0.1)— — — — (10.2)(10.2)— (10.2)
Share based compensation— — 7.5 — — — 7.5 — 7.5 
Dividends declared— — — (18.3)— — (18.3)— (18.3)
Balances at July 4, 202142.6 $0.5 $2,058.0 $328.1 $(239.6)$(646.1)$1,500.9 $7.3 $1,508.2 
See accompanying notes to the condensed consolidated financial statements
SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Shareholder’s Equity
For the nine month period ended June 28, 2020
(unaudited)
Nine Month Period Ended June 28, 2020Common StockAdditional
Paid-in
Capital		Accumulated
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity
Six Month Period Ended April 3, 2022Six Month Period Ended April 3, 2022Common StockAdditional
Paid-in
Capital		Accumulated
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity
(in millions)(in millions)SharesAmountAdditional
Paid-in
Capital		Accumulated
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity		(in millions)SharesAmount
Balances at September 30, 201948.8 $0.5 
Net (loss) income from continuing operations— — — (38.6)— — (38.6)0.9 (37.7)
Balances at September 30, 2021Balances at September 30, 202141.8 $0.5 $2,063.8 $359.9 $(235.3)$(717.0)$1,471.9 $7.1 $1,479.0 
Net loss from continuing operationsNet loss from continuing operations— — — (30.2)— — (30.2)— (30.2)
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax— — — 2.8 — — 2.8 — 2.8 Income from discontinued operations, net of tax— — — 38.4 — — 38.4 0.4 38.8 
Other comprehensive income, net of taxOther comprehensive income, net of tax— — — — 24.2 — 24.2 0.1 24.3 Other comprehensive income, net of tax— — — — 4.0 — 4.0 0.1 4.1 
Treasury stock repurchasesTreasury stock repurchases(1.5)— — — — (90.6)(90.6)— (90.6)Treasury stock repurchases(1.1)— — — — (110.0)(110.0)— (110.0)
Accelerated share repurchase pending final settlement(1.7)— (18.7)— — (106.3)(125.0)— (125.0)
Restricted stock issued and related tax withholdingsRestricted stock issued and related tax withholdings0.5 — (13.3)— — 18.2 4.9 — 4.9 Restricted stock issued and related tax withholdings0.3 — (46.6)— — 22.2 (24.4)— (24.4)
Share based compensationShare based compensation— — 8.5 — — — 8.5 — 8.5 Share based compensation— — 8.3 — — — 8.3 — 8.3 
Dividends declaredDividends declared— — — (20.2)— — (20.2)— (20.2)Dividends declared— — — (17.7)— — (17.7)— (17.7)
Cumulative adjustment for adoption of new accounting standards— — — (0.3)0.3 — — — 0 
Balances as of December 29, 201946.1 0.5 2,007.6 167.5 (249.1)(439.6)1,486.9 9.0 1,495.9 
Balances as of January 2, 2022Balances as of January 2, 202241.0 0.5 2,025.5 350.4 (231.3)(804.8)1,340.3 7.6 1,347.9 
Net loss from continuing operationsNet loss from continuing operations— — — (58.4)— — (58.4)(0.8)(59.2)Net loss from continuing operations— — — (25.1)— — (25.1)— (25.1)
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax— — — 1.4 — — 1.4 — 1.4 Income from discontinued operations, net of tax— — — 41.0 — — 41.0 0.1 41.1 
Sale and deconsolidation of assets held for sale— — — — 8.1 — 8.1 — 8.1 
Other comprehensive loss, net of taxOther comprehensive loss, net of tax— — — — (41.0)— (41.0)(0.1)(41.1)Other comprehensive loss, net of tax— — — — — — — (0.1)(0.1)
Treasury stock repurchasesTreasury stock repurchases(2.7)— — — — (149.2)(149.2)— (149.2)Treasury stock repurchases(0.2)— — — — (24.0)(24.0)— (24.0)
Accelerated share repurchase final settlement(0.3)— 18.5 — — (18.5)— — 0 
Restricted stock issued and related tax withholdingsRestricted stock issued and related tax withholdings— — (0.7)— — 0.4 (0.3)— (0.3)Restricted stock issued and related tax withholdings— — (0.1)— — — (0.1)— (0.1)
Share based compensationShare based compensation— — 8.9 — — — 8.9 — 8.9 Share based compensation— — 7.8 — — — 7.8 — 7.8 
Dividends declaredDividends declared— — — (19.7)— — (19.7)— (19.7)Dividends declared— — — (17.6)— — (17.6)— (17.6)
Balances as of March 29, 202043.1 0.5 2,034.3 90.8 (282.0)(606.9)1,236.7 8.1 1,244.8 
Net income from continuing operations— — — 137.1 — — 137.1 0.5 137.6 
Income from discontinued operations, net of tax— — — 8.0 — — 8.0 — 8.0 
Other comprehensive income, net of tax— — — — 5.2 — 5.2 — 5.2 
Restricted stock issued and related tax withholdings— — (0.1)— — — (0.1)— (0.1)
Share based compensation— — 8.6 — — — 8.6 — 8.6 
Dividends declared— — — (18.6)— — (18.6)— (18.6)
Balances at June 28, 202043.1 $0.5 $2,042.8 $217.3 $(276.8)$(606.9)$1,376.9 $8.6 $1,385.5 
Distribution of equity by subsidiary to NCIDistribution of equity by subsidiary to NCI— — — — — — — (1.3)(1.3)
Balances at April 3, 2022Balances at April 3, 202240.8 $0.5 $2,033.2 $348.7 $(231.3)$(828.8)$1,322.3 $6.3 $1,328.6 
See accompanying notes to the condensed consolidated financial statements
5
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SPECTRUM BRANDS HOLDINGS, INC.INC
Condensed Consolidated Statements of Cash FlowsShareholders' Equity
For the ninesix month periodsperiod ended JulyApril 4, 2021 and June 28, 2020
(unaudited)
Nine Month Periods Ended
(in millions)July 4, 2021June 28, 2020
Cash flows from operating activities
Net income$139.3 $53.0 
(Loss) income from discontinued operations, net of tax(6.6)12.2 
Net income from continuing operations145.9 40.8 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization113.0 113.1 
Share based compensation23.5 38.8 
(Gain) loss on equity investments(6.9)8.2 
Loss on assets held for sale0 26.8 
Write-off from impairment of intangible assets0 24.2 
Amortization of debt issuance costs and debt discount4.3 3.7 
Write-off of unamortized discount and debt issuance costs7.9 1.1 
Gain from extinguishment of Salus CLO debt0 (76.2)
Inventory acquisition step-up4.7 0 
Deferred tax expense20.3 5.3 
Net changes in operating assets and liabilities(287.9)(150.4)
Net cash provided by operating activities from continuing operations24.8 35.4 
Net cash used by operating activities from discontinued operations(15.9)0 
Net cash provided by operating activities8.9 35.4 
Cash flows from investing activities
Purchases of property, plant and equipment(43.3)(44.5)
Proceeds from disposal of property, plant and equipment0 0.7 
Proceeds from sale of assets held for sale0 30.1 
Proceeds from sale of discontinued operations, net of cash0 3.6 
Business acquisitions, net of cash acquired(429.5)(17.0)
Proceeds from sale of equity investment73.1 68.0 
Other investing activity(0.4)2.5 
Net cash (used) provided by investing activities(400.1)43.4 
Cash flows from financing activities
Payment of debt, including premium on extinguishment(885.3)(132.7)
Proceeds from issuance of debt997.0 528.0 
Payment of debt issuance costs(12.6)(0.8)
Payment of contingent consideration0 (197.0)
Treasury stock purchases(52.5)(239.8)
Accelerated share repurchase0 (125.0)
Dividends paid to shareholders(53.6)(57.2)
Dividends paid by subsidiary to non-controlling interest(1.3)0 
Share based award tax withholding payments, net of proceeds upon vesting(7.2)(12.6)
Other financing activity0.3 0 
Net cash used by financing activities(15.2)(237.1)
Effect of exchange rate changes on cash and cash equivalents5.0 0 
Net change in cash, cash equivalents and restricted cash in continuing operations(401.4)(158.3)
Cash, cash equivalents, and restricted cash, beginning of period533.8 627.1 
Cash, cash equivalents, and restricted cash, end of period$132.4 $468.8 
Supplemental disclosure of cash flow information
Cash paid for interest$100.8 $92.1 
Cash paid for taxes$28.7 $34.7 
Non cash investing activities
Acquisition of property, plant and equipment through finance leases$1.3 $3.6 
Non cash financing activities
Issuance of shares through stock compensation plan$17.8 $39.3 
Six Month Period Ended April 4, 2021Common StockAdditional
Paid-in
Capital		Accumulated
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity
(in millions)SharesAmount
Balances at September 30, 202043.1 $0.5 $2,054.3 $243.9 $(284.7)$(606.5)$1,407.5 $8.3 $1,415.8 
Net income from continuing operations— — — 14.7 — — 14.7 1.0 15.7 
Income (loss) from discontinued operations, net of tax— — — 57.4 — — 57.4 (0.2)57.2 
Other comprehensive income, net of tax— — — — 16.2 — 16.2 0.4 16.6 
Treasury stock repurchases(0.6)— — — — (42.3)(42.3)— (42.3)
Restricted stock issued and related tax withholdings0.2 — (18.6)— — 11.7 (6.9)— (6.9)
Share based compensation— — 7.5 — — — 7.5 — 7.5 
Dividends declared— — — (18.4)— — (18.4)— (18.4)
Dividends paid by subsidiary to NCI— — — — — — — (1.0)(1.0)
Balances as of January 3, 202142.7 0.5 2,043.2 297.6 (268.5)(637.1)1,435.7 8.5 1,444.2 
Net loss from continuing operations— — — (3.7)— — (3.7)(0.9)(4.6)
Income from discontinued operations, net of tax— — — 40.3 — — 40.3 — 40.3 
Other comprehensive income (loss), net of tax— — — — 25.1 — 25.1 (0.1)25.0 
Restricted stock issued and related tax withholdings— — (0.1)— — 0.1 — — — 
Share based compensation— — 8.5 — — — 8.5 — 8.5 
Dividends declared— — — (18.5)— — (18.5)— (18.5)
Dividends paid by subsidiary to NCI— — — — — — — (0.3)(0.3)
Balances at April 4, 202142.7 $0.5 $2,051.6 $315.7 $(243.4)$(637.0)$1,487.4 $7.2 $1,494.6 
See accompanying notes to the condensed consolidated financial statements
6
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SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
For the six month periods ended April 3, 2022 and April 4, 2021
(unaudited)
Six Month Periods Ended
(in millions)April 3, 2022April 4, 2021
Cash flows from operating activities
Net income$24.6 $108.6 
Income from discontinued operations, net of tax79.9 97.5 
Net (loss) income from continuing operations(55.3)11.1 
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation and amortization51.1 57.2 
Share based compensation12.2 13.7 
Gain on equity investment— (6.9)
Amortization of debt issuance costs and debt discount3.1 2.9 
Write-off of unamortized discount and debt issuance costs— 7.9 
Non-cash purchase accounting adjustments3.5 3.4 
Deferred tax benefit(43.7)(27.1)
Net changes in operating assets and liabilities(183.1)(169.3)
Net cash used by operating activities from continuing operations(212.2)(107.1)
Net cash provided by operating activities from discontinued operations5.3 27.3 
Net cash used by operating activities(206.9)(79.8)
Cash flows from investing activities
Purchases of property, plant and equipment(24.3)(16.6)
Proceeds from disposal of property, plant and equipment0.1 — 
Business acquisitions, net of cash acquired(314.3)(129.8)
Proceeds from sale of equity investment— 73.1 
Other investing activity(0.1)(0.3)
Net cash used by investing activities from continuing operations(338.6)(73.6)
Net cash used by investing activities from discontinued operations(12.4)(11.5)
Net cash used by investing activities(351.0)(85.1)
Cash flows from financing activities
Payment of debt(6.5)(879.6)
Proceeds from issuance of debt775.0 899.0 
Payment of debt issuance costs(6.7)(12.6)
Treasury stock purchases(134.0)(42.3)
Dividends paid to shareholders(34.4)(35.7)
Share based award tax withholding payments, net of proceeds upon vesting(24.5)(7.2)
Other financing activity— 0.3 
Net cash provided (used) by financing activities from continuing operations568.9 (78.1)
Net cash used by financing activities from discontinued operations(2.2)(2.0)
Net cash provided (used) by financing activities566.7 (80.1)
Effect of exchange rate changes on cash and cash equivalents(3.0)3.4 
Net change in cash, cash equivalents and restricted cash in continuing operations5.8 (241.6)
Cash, cash equivalents, and restricted cash, beginning of period190.0 533.8 
Cash, cash equivalents, and restricted cash, end of period$195.8 $292.2 
Supplemental disclosure of cash flow information
Cash paid for interest associated with continued operations$50.9 $58.4 
Cash paid for interest associated with discontinued operations$30.2 $36.7 
Cash paid for taxes associated with continued operations$19.0 $11.5 
Cash paid for taxes associated with discontinued operations$10.1 $8.6 
Non cash investing activities
Acquisition of property, plant and equipment through finance leases$0.5 $0.6 
Non cash financing activities
Issuance of shares through stock compensation plan$33.4 $16.6 
See accompanying notes to the condensed consolidated financial statements
7
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SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Financial Position
As of July 4, 2021April 3, 2022 and September 30, 20202021
(unaudited)
(in millions)July 4, 2021September 30, 2020
Assets
Cash and cash equivalents$128.5 $527.6 
Trade receivables, net479.5 501.1 
Other receivables156.5 155.2 
Inventories908.3 557.7 
Prepaid expenses and other current assets81.9 63.5 
Total current assets1,754.7 1,805.1 
Property, plant and equipment, net390.6 396.5 
Operating lease assets118.3 103.8 
Deferred charges and other51.0 115.2 
Goodwill1,583.9 1,332.0 
Intangible assets, net1,605.9 1,431.7 
Total assets$5,504.4 $5,184.3 
Liabilities and Shareholder's Equity
Current portion of long-term debt$17.7 $15.3 
Accounts payable522.7 557.5 
Accrued wages and salaries89.7 95.0 
Accrued interest36.0 38.5 
Other current liabilities294.5 236.0 
Total current liabilities960.6 942.3 
Long-term debt, net of current portion2,651.1 2,461.0 
Long-term operating lease liabilities99.7 88.8 
Deferred income taxes296.7 288.7 
Other long-term liabilities134.7 138.3 
Total liabilities4,142.8 3,919.1 
Commitments and contingencies (Note 19)00
Shareholder's equity
Other capital2,169.4 2,154.1 
Accumulated deficit(577.2)(614.2)
Accumulated other comprehensive loss, net of tax(239.5)(284.6)
Total shareholder's equity1,352.7 1,255.3 
Non-controlling interest8.9 9.9 
Total equity1,361.6 1,265.2 
Total liabilities and equity$5,504.4 $5,184.3 
See accompanying notes to the condensed consolidated financial statements
7
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SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Income
For thethree and nine month periods ended July 4, 2021 and June 28, 2020
(unaudited)
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Net Sales$1,162.8 $984.3 $3,457.5 $2,793.6 
Cost of goods sold755.1 635.7 2,222.1 1,834.2 
Restructuring and related charges0.3 (0.3)1.7 12.5 
Gross profit407.4 348.9 1,233.7 946.9 
Selling189.8 141.3 529.8 437.4 
General and administrative84.1 82.0 263.6 239.5 
Research and development13.1 9.7 36.1 29.7 
Restructuring and related charges9.8 12.5 21.7 49.1 
Transaction related charges11.1 6.1 41.4 17.4 
Loss on assets held for sale0 1.1 0 26.8 
Write-off from impairment of intangible assets0 0 0 24.2 
Total operating expenses307.9 252.7 892.6 824.1 
Operating income99.5 96.2 341.1 122.8 
Interest expense31.5 36.0 133.9 106.0 
Other non-operating expense (income), net2.9 (56.5)(4.6)10.2 
Income from continuing operations before income taxes65.1 116.7 211.8 6.6 
Income tax expense28.2 35.4 63.9 18.8 
Net income (loss) from continuing operations36.9 81.3 147.9 (12.2)
(Loss) income from discontinued operations, net of tax(5.2)8.0 (6.6)12.2 
Net income31.7 89.3 141.3 0 
Net income (loss) attributable to non-controlling interest0 0.5 (0.1)0.6 
Net income (loss) attributable to controlling interest$31.7 $88.8 $141.4 $(0.6)
Amounts attributable to controlling interest
Net income (loss) from continuing operations attributable to controlling interest$36.9 $80.8 $148.0 $(12.8)
Net (loss) income from discontinued operations attributable to controlling interest(5.2)8.0 (6.6)12.2 
Net income (loss) attributable to controlling interest$31.7 $88.8 $141.4 $(0.6)
(in millions)April 3, 2022September 30, 2021
Assets
Cash and cash equivalents$192.1 $186.2 
Trade receivables, net349.5 248.4 
Other receivables212.1 146.4 
Inventories800.6 562.8 
Prepaid expenses and other current assets54.9 40.8 
Current assets of business held for sale1,919.8 1,810.0 
Total current assets3,529.0 2,994.6 
Property, plant and equipment, net256.4 260.2 
Operating lease assets74.3 56.5 
Deferred charges and other49.5 35.1 
Goodwill967.0 867.2 
Intangible assets, net1,263.7 1,204.1 
Total assets$6,139.9 $5,417.7 
Liabilities and Shareholders' Equity
Current portion of long-term debt$12.1 $12.0 
Accounts payable522.4 388.8 
Accrued wages and salaries43.4 67.4 
Accrued interest15.7 29.9 
Other current liabilities230.2 214.4 
Current liabilities of business held for sale475.7 454.3 
Total current liabilities1,299.5 1,166.8 
Long-term debt, net of current portion3,236.3 2,494.3 
Long-term operating lease liabilities48.1 44.5 
Deferred income taxes262.1 272.4 
Other long-term liabilities101.7 106.3 
Total liabilities4,947.7 4,084.3 
Commitments and contingencies (Note 17)00
Shareholders' equity
Other capital2,166.1 2,174.8 
Accumulated deficit(750.6)(614.9)
Accumulated other comprehensive loss, net of tax(231.2)(235.2)
Total shareholders' equity1,184.3 1,324.7 
Non-controlling interest7.9 8.7 
Total equity1,192.2 1,333.4 
Total liabilities and equity$6,139.9 $5,417.7 
See accompanying notes to the condensed consolidated financial statements
8
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SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Comprehensive Income
For the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020
(unaudited)
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Net income$31.7 $89.3 $141.3 $0 
Other comprehensive income (loss)
Foreign currency translation gain (loss)0.9 7.5 42.6 (13.3)
Deferred tax effect0.9 (0.1)1.2 0 
Net unrealized gain (loss) on foreign currency translation1.8 7.4 43.8 (13.3)
Unrealized gain (loss) on derivative instruments
Unrealized loss on hedging activity before reclassification(1.0)(2.1)(7.6)(0.5)
Net reclassification for loss (gain) to income from continuing operations2.8 (2.0)8.4 (6.3)
Unrealized gain (loss) on hedging instruments after reclassification1.8 (4.1)0.8 (6.8)
Deferred tax effect(0.4)1.7 (0.3)2.8 
Net unrealized gain (loss) on hedging derivative instruments1.4 (2.4)0.5 (4.0)
Defined benefit pension gain
Defined benefit pension (loss) gain before reclassification(0.2)(0.8)(1.5)3.0 
Net reclassification for loss to income from continuing operations1.1 1.0 3.3 3.1 
Defined benefit pension gain after reclassification0.9 0.2 1.8 6.1 
Deferred tax effect(0.2)0 (0.6)(0.4)
Net defined benefit pension gain0.7 0.2 1.2 5.7 
Deconsolidation of discontinued operations and assets held for sale0 0 0 8.1 
Net change to derive comprehensive income (loss) for the period3.9 5.2 45.5 (3.5)
Comprehensive income (loss)35.6 94.5 186.8 (3.5)
Comprehensive income attributable to non-controlling interest0.1 0 0.4 0 
Comprehensive income (loss) attributable to controlling interest$35.5 $94.5 $186.4 $(3.5)
Three Month Periods EndedSix Month Periods Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net Sales$807.8 $760.3 $1,565.0 $1,496.5 
Cost of goods sold551.0 498.0 1,088.6 981.3 
Restructuring and related charges1.2 1.3 1.5 1.4 
Gross profit255.6 261.0 474.9 513.8 
Selling144.1 121.9 280.1 236.6 
General and administrative75.2 74.1 142.4 151.1 
Research and development8.2 7.8 15.8 14.4 
Restructuring and related charges15.2 3.0 32.3 11.9 
Transaction related charges20.2 8.2 35.1 27.2 
Total operating expenses262.9 215.0 505.7 441.2 
Operating (loss) income(7.3)46.0 (30.8)72.6 
Interest expense24.8 52.9 46.7 76.1 
Other non-operating income, net(0.9)(2.2)(0.4)(11.1)
(Loss) income from continuing operations before income taxes(31.2)(4.7)(77.1)7.6 
Income tax benefit(6.6)(0.5)(22.4)(4.4)
Net (loss) income from continuing operations(24.6)(4.2)(54.7)12.0 
Income from discontinued operations, net of tax41.1 40.4 79.9 97.6 
Net income16.5 36.2 25.2 109.6 
Net (loss) income from continuing operations attributable to non-controlling interest— (0.9)— 0.1 
Net income (loss) from discontinued operations attributable to non-controlling interest0.1 — 0.5 (0.2)
Net income attributable to controlling interest$16.4 $37.1 $24.7 $109.7 
Amounts attributable to controlling interest
Net (loss) income from continuing operations attributable to controlling interest$(24.6)$(3.3)$(54.7)$11.9 
Net income from discontinued operations attributable to controlling interest41.0 40.4 79.4 97.8 
Net income attributable to controlling interest$16.4 $37.1 $24.7 $109.7 
See accompanying notes to the condensed consolidated financial statements
9
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SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Shareholder’s EquityComprehensive Income
For the ninethree and six month periodperiods ended JulyApril 3, 2022 and April 4, 2021
(unaudited)
Nine Month Period Ended July 4, 2021 (in millions)Other
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Shareholder's
Equity		Non-
controlling
Interest		Total Equity
Balances at September 30, 2020$2,154.1 $(614.2)$(284.6)$1,255.3 $9.9 $1,265.2 
Net income from continuing operations— 72.8 — 72.8 0.8 73.6 
Loss from discontinued operations, net of tax— (0.3)— (0.3)— (0.3)
Other comprehensive income, net of tax— — 16.2 16.2 0.4 16.6 
Restricted stock issued and related tax withholdings(7.1)— — (7.1)— (7.1)
Share based compensation7.5 — — 7.5 — 7.5 
Dividends paid to parent— (60.1)— (60.1)— (60.1)
Dividend paid by subsidiary to NCI— — — — (1.0)(1.0)
Balances as of January 3, 20212,154.5 (601.8)(268.4)1,284.3 10.1 1,294.4 
Net income (loss) from continuing operations— 38.2 — 38.2 (0.9)37.3 
Loss from discontinued operations, net of tax— (1.1)— (1.1)— (1.1)
Other comprehensive income (loss), net of tax— — 25.1 25.1 (0.1)25.0 
Share based compensation8.0 — — 8.0 — 8.0 
Dividends paid to parent— (16.1)— (16.1)— (16.1)
Dividend paid by subsidiary to NCI— — — — (0.3)(0.3)
Balances as of April 4, 20212,162.5 (580.8)(243.3)1,338.4 8.8 1,347.2 
Net income from continuing operations— 36.9 — 36.9 — 36.9 
Loss from discontinued operations, net of tax— (5.2)— (5.2)— (5.2)
Other comprehensive income, net of tax— — 3.8 3.8 0.1 3.9 
Share based compensation6.9 — — 6.9 — 6.9 
Dividends paid to parent— (28.1)— (28.1)— (28.1)
Balances at July 4, 2021$2,169.4 $(577.2)$(239.5)$1,352.7 $8.9 $1,361.6 
See accompanying notes to the condensed consolidated financial statements
SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Shareholder’s Equity
For the nine month period ended June 28, 2020
(unaudited)
Nine Month Period Ended June 28, 2020 (in millions)Other
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Shareholder's
Equity		Non-
controlling
Interest		Total Equity
Balances at September 30, 2019$2,113.3 $(414.7)$(273.5)$1,425.1 $9.6 $1,434.7 
Net (loss) income from continuing operations— (37.7)— (37.7)0.9 (36.8)
Income from discontinued operations, net of tax— 2.8 — 2.8 — 2.8 
Other comprehensive income, net of tax— — 24.2 24.2 0.1 24.3 
Restricted stock issued and related tax withholdings4.9 — — 4.9 — 4.9 
Share based compensation8.5 — — 8.5 — 8.5 
Dividends paid to parent— (36.7)— (36.7)— (36.7)
Cumulative adjustment for adoption of new accounting standards— (0.3)0.3 — — 0 
Balances as of December 29, 20192,126.7 (486.6)(249.0)1,391.1 10.6 1,401.7 
Net loss from continuing operations— (55.8)— (55.8)(0.8)(56.6)
Income from discontinued operations, net of tax— 1.4 — 1.4 — 1.4 
Sale and deconsolidation of assets held for sale— — 8.1 8.1 — 8.1 
Other comprehensive loss, net of tax— — (41.0)(41.0)(0.1)(41.1)
Restricted stock issued and related tax withholdings(0.3)— — (0.3)— (0.3)
Share based compensation8.3 — — 8.3 — 8.3 
Dividends paid to parent— (168.2)— (168.2)— (168.2)
Balances as of March 29, 20202,134.7 (709.2)(281.9)1,143.6 9.7 1,153.3 
Net income from continuing operations— 80.8 — 80.8 0.5 81.3 
Income from discontinued operations, net of tax— 8.0 — 8.0 — 8.0 
Other comprehensive income, net of tax— — 5.2 5.2 — 5.2 
Share based compensation8.2 — — 8.2 — 8.2 
Dividends paid to parent— (18.1)— (18.1)— (18.1)
Balances at June 28, 2020$2,142.9 $(638.5)$(276.7)$1,227.7 $10.2 $1,237.9 
Three Month Periods EndedSix Month Periods Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net income$16.5 $36.2 $25.2 $109.6 
Other comprehensive (loss) income
Foreign currency translation (loss) gain(1.6)22.2 5.1 41.6 
Deferred tax effect(3.1)(5.0)(7.6)0.3 
Net unrealized (loss) gain on foreign currency translation(4.7)17.2 (2.5)41.9 
Unrealized gain (loss) on derivative instruments
Unrealized gain (loss) on hedging activity before reclassification6.4 5.8 7.6 (6.6)
Net reclassification for (gain) loss to income from continuing operations(1.5)3.1 (3.6)5.8 
Net reclassification for gain to income from discontinued operations(0.7)(0.1)(1.2)(0.1)
Unrealized gain (loss) on hedging instruments after reclassification4.2 8.8 2.8 (0.9)
Deferred tax effect(1.0)(2.4)3.5 0.1 
Net unrealized gain (loss) on hedging derivative instruments3.2 6.4 6.3 (0.8)
Defined benefit pension gain
Defined benefit pension gain (loss) before reclassification1.0 0.9 1.7 (1.3)
Net reclassification for loss to income from continuing operations1.0 1.1 2.0 2.2 
Defined benefit pension gain after reclassification2.0 2.0 3.7 0.9 
Deferred tax effect(0.6)(0.6)(3.5)(0.4)
Net defined benefit pension gain1.4 1.4 0.2 0.5 
Net change to derive comprehensive income for the period(0.1)25.0 4.0 41.6 
Comprehensive income16.4 61.2 29.2 151.2 
Comprehensive loss from continuing operations attributable to non-controlling interest(0.1)(0.1)(0.1)— 
Comprehensive income from discontinuing operations attributable to non-controlling interest— — 0.1 0.3 
Comprehensive income attributable to controlling interest$16.5 $61.3 $29.2 $150.9 
See accompanying notes to the condensed consolidated financial statements
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SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Cash FlowsShareholders' Equity
For the ninesix month periodsperiod ended July 4, 2021 and June 28, 2020April 3, 2022
(unaudited)
Nine Month Periods Ended
(in millions)July 4, 2021June 28, 2020
Cash flows from operating activities
Net income$141.3 $0 
(Loss) income from discontinued operations, net of tax(6.6)12.2 
Net income (loss) from continuing operations147.9 (12.2)
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization113.0 113.1 
Share based compensation22.4 37.9 
(Gain) loss on equity investments(6.9)8.2 
Loss on assets held for sale0 26.8 
Write-off from impairment of intangible assets0 24.2 
Amortization of debt issuance costs and debt discount4.3 2.8 
Write-off of unamortized discount and debt issuance costs7.9 1.1 
Inventory acquisition step-up4.7 0 
Deferred tax expense20.9 21.8 
Net changes in operating assets and liabilities(295.8)(398.7)
Net cash provided (used) by operating activities from continuing operations18.4 (175.0)
Net cash used by operating activities from discontinued operations(15.9)0 
Net cash provided (used) by operating activities2.5 (175.0)
Cash flows from investing activities
Purchases of property, plant and equipment(43.3)(44.5)
Proceeds from disposal of property, plant and equipment0 0.7 
Proceeds from sale of assets held for sale0 30.1 
Proceeds from sale of discontinued operations, net of cash0 3.6 
Business acquisitions, net of cash acquired(429.5)(17.0)
Proceeds from sale of equity investment73.1 68.0 
Other investing activities(0.4)2.5 
Net cash (used) provided by investing activities(400.1)43.4 
Cash flows from financing activities
Payment of debt, including premium on extinguishment(885.3)(132.7)
Proceeds from issuance of debt997.0 528.0 
Payment of debt issuance costs(12.6)(0.8)
Payment of contingent consideration0 (197.0)
Payment of cash dividends to parent(104.3)(223.0)
Dividends paid by subsidiary to non-controlling interest(1.3)0 
Net cash used by financing activities(6.5)(25.5)
Effect of exchange rate changes on cash and cash equivalents5.0 0 
Net change in cash, cash equivalents and restricted cash(399.1)(157.1)
Cash, cash equivalents, and restricted cash, beginning of period529.8 621.9 
Cash, cash equivalents, and restricted cash, end of period$130.7 $464.8 
Supplemental disclosure of cash flow information
Cash paid for interest$100.8 $92.1 
Cash paid for taxes$28.7 $34.7 
Non cash investing activities
Acquisition of property, plant and equipment through finance leases$1.3 $3.6 
Six Month Period Ended April 3, 2022 (in millions)Other
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Shareholders'
Equity		Non-
controlling
Interest		Total Equity
Balances at September 30, 2021$2,174.8 $(614.9)$(235.2)$1,324.7 $8.7 $1,333.4 
Net loss from continuing operations— (30.1)— (30.1)— (30.1)
Income from discontinued operations, net of tax— 38.4 — 38.4 0.4 38.8 
Other comprehensive income, net of tax— — 4.0 4.0 0.1 4.1 
Restricted stock issued and related tax withholdings(24.3)— — (24.3)— (24.3)
Share based compensation8.2 — — 8.2 — 8.2 
Dividends paid to parent— (119.2)— (119.2)— (119.2)
Balances as of January 2, 20222,158.7 (725.8)(231.2)1,201.7 9.2 1,210.9 
Net loss from continuing operations— (24.6)— (24.6)— (24.6)
Income from discontinued operations, net of tax— 41.0 — 41.0 0.1 41.1 
Other comprehensive loss, net of tax— — — — (0.1)(0.1)
Share based compensation7.4 — — 7.4 — 7.4 
Dividends paid to parent— (41.2)— (41.2)— (41.2)
Distribution of equity by subsidiary to NCI— — — — (1.3)(1.3)
Balances at April 3, 2022$2,166.1 $(750.6)$(231.2)$1,184.3 $7.9 $1,192.2 
See accompanying notes to the condensed consolidated financial statements
SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Shareholders' Equity
For the six month period ended April 4, 2021
(unaudited)
Six Month Period Ended April 4, 2021 (in millions)Other
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Shareholders'
Equity		Non-
controlling
Interest		Total Equity
Balances at September 30, 2020$2,154.1 $(614.2)$(284.6)$1,255.3 $9.9 $1,265.2 
Net income from continuing operations— 15.1 — 15.1 1.0 16.1 
Income (loss) from discontinued operations, net of tax— 57.4 — 57.4 (0.2)57.2 
Other comprehensive income, net of tax— — 16.2 16.2 0.4 16.6 
Restricted stock issued and related tax withholdings(7.1)— — (7.1)— (7.1)
Share based compensation7.5 — — 7.5 — 7.5 
Dividends paid to parent— (60.1)— (60.1)— (60.1)
Dividends paid by subsidiary to NCI— — — — (1.0)(1.0)
Balances as of January 3, 20212,154.5 (601.8)(268.4)1,284.3 10.1 1,294.4 
Net loss from continuing operations— (3.3)— (3.3)(0.9)(4.2)
Income from discontinued operations, net of tax— 40.4 — 40.4 — 40.4 
Other comprehensive income (loss), net of tax— — 25.1 25.1 (0.1)25.0 
Share based compensation8.0 — — 8.0 — 8.0 
Dividends paid to parent— (16.1)— (16.1)— (16.1)
Dividends paid by subsidiary to NCI— — — — (0.3)(0.3)
Balances at April 4, 2021$2,162.5 $(580.8)$(243.3)$1,338.4 $8.8 $1,347.2 
See accompanying notes to the condensed consolidated financial statements
11
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SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Cash Flows
For the six month periods ended April 3, 2022 and April 4, 2021
(unaudited)
Six Month Periods Ended
(in millions)April 3, 2022April 4, 2021
Cash flows from operating activities
Net income$25.2 $109.6 
Income from discontinued operations, net of tax79.9 97.6 
Net (loss) income from continuing operations(54.7)12.0 
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation and amortization51.1 57.2 
Share based compensation11.8 13.1 
Gain on equity investment— (6.9)
Amortization of debt issuance costs and debt discount3.1 2.9 
Write-off of unamortized discount and debt issuance costs— 7.9 
Non-cash purchase accounting adjustments3.5 3.4 
Deferred tax benefit(43.3)(26.8)
Net changes in operating assets and liabilities(216.1)(176.4)
Net cash used by operating activities from continuing operations(244.6)(113.6)
Net cash provided by operating activities from discontinued operations5.3 27.4 
Net cash used by operating activities(239.3)(86.2)
Cash flows from investing activities
Purchases of property, plant and equipment(24.3)(16.6)
Proceeds from disposal of property, plant and equipment0.1 — 
Business acquisitions, net of cash acquired(314.3)(129.8)
Proceeds from sale of equity investment— 73.1 
Other investing activities(0.1)(0.3)
Net cash used by investing activities from continuing operations(338.6)(73.6)
Net cash used by investing activities from discontinued operations(12.4)(11.5)
Net cash used by investing activities(351.0)(85.1)
Cash flows from financing activities
Payment of debt(6.5)(879.6)
Proceeds from issuance of debt775.0 899.0 
Payment of debt issuance costs(6.7)(12.6)
Payment of cash dividends to parent(160.4)(76.2)
Net cash provided (used) by financing activities from continuing operations601.4 (69.4)
Net cash used by financing activities from discontinued operations(2.2)(2.0)
Net cash provided (used) by financing activities599.2 (71.4)
Effect of exchange rate changes on cash and cash equivalents(3.0)3.4 
Net change in cash, cash equivalents and restricted cash5.9 (239.3)
Cash, cash equivalents, and restricted cash, beginning of period188.3 529.8 
Cash, cash equivalents, and restricted cash, end of period$194.2 $290.5 
Supplemental disclosure of cash flow information
Cash paid for interest associated with continued operations$50.9 $58.4 
Cash paid for interest associated with discontinued operations$30.2 $36.7 
Cash paid for taxes associated with continued operations$19.0 $11.5 
Cash paid for taxes associated with discontinued operations$10.1 $8.6 
Non cash investing activities
Acquisition of property, plant and equipment through finance leases$0.5 $0.6 
See accompanying notes to the condensed consolidated financial statements
12
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
This report is a combined report of Spectrum Brands Holdings, Inc. (“SBH”) and SB/RH Holdings, LLC (“SB/RH”) (collectively, the “Company”). The notes to the condensed consolidated financial statements that follow include both consolidated SBH and SB/RH Notes, unless otherwise indicated below.
NOTE 1– BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Fiscal Period-End
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company and its majority owned subsidiaries in accordance with accounting principles for interim financial information generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position and results of operations. It is management’s opinion, however, that all material adjustments have been made which are necessary for a fair financial statement presentation. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020.2021.
SBH’s and SB/RH’s fiscal year ends September 30 and the Company reports its results using fiscal quarters whereby each three month quarterly reporting period is approximately thirteen weeks in length and ends on a Sunday. The exceptions are the first quarter, which begins on October 1, and the fourth quarter, which ends on September 30. As a result, the fiscal period end date for the three and ninesix month periods included within this Quarterly Report for the Company are JulyApril 3, 2022 and April 4, 2021 and June 28, 2020.2021.
Newly Adopted Accounting Standards
In June 2016,December 2019, the FASB issued ASU 2016-13,No. 2019-12, Financial Instruments - Credit Losses: MeasurementIncome Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new standard simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. The new standard also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of Credit Losses on Financial Instruments, which was further updated and clarified by the FASB through the issuance of additional related ASUs.a consolidated group. The ASU introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models, and methods for estimating expected credit losses. The guidance is effective for fiscal years andbeginning after December 15, 2020, including interim periods within those fiscal years beginning after December 15, 2019. Theand was adopted by the Company adopted ASU 2016-13 on a modified retrospective basis effective October 1, 2020.2021. The adoption of ASU 2016-13 did not have a material impact on the Company’s condensed consolidated financial statements. Refer to Note 6 - Receivables and Concentration of Credit Risk for further discussion on the Company's receivables and allowance for uncollectible receivables.
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard provides guidance on accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2018-15 prospectively to all implementation costs incurred after October 1, 2020, the date of adoption. Before the adoption of the standard, the implementation costs in cloud computing arrangements were expensed as incurred. The adoption of ASU 2018-15 did not have a material impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedientexpedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which adds implementation guidance to clarify certain optional expedients in Topic 848. The ASUsASU can be adopted no later than December 31, 2022 with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.
Transaction related charges
Transaction related charges consist of transaction costs from (1) a qualifying strategic transaction or business development opportunity, including an acquisition transactions,or divestiture, whether or not consummated, associated with the purchase or sale of net assets or equity interest of a business such as a business combination, equity investment, joint venture or purchase or sale of non-controlling interest; (2) subsequent integration related project costs directly associated with an acquired businessacquisition including realized costs for the integration of acquired operations into the Company’s shared service platforms, termination of redundant or duplicative positions and locations, operations and/or products, employee transition costs, integration related professional fees, and other post business combination expenses; and (3) divestiture support and separation costs consisting of incremental costs incurred by the continuing operations after completion of the transaction to facilitate separation of shared operations,a divested business or operation, including the development of transferred shared service operations impacted by a separation, including impacts to shared platforms and personnel transferred underimpacted by the transaction. Divestiture-related charges prior to completion of the transaction qualifying as discontinued operations are recognized as a component of Income from Discontinued Operations, net of tax. Qualifying cost types not specified above include, but are not limited to, banking, advisory, legal, accounting, valuation, andor other professional feesfees; and including impairment loss on existing assets considered duplicative or redundant and directly relatedattributable to the respective transactions. See Note 2 -– Divestitures and Note 3 – Acquisitions for further discussion. The following table summarizes transaction related charges incurred by the Company during the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020:2021:
Three Month Periods EndedSix Month Periods Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Tristar acquisition and integration$12.7 $— $14.4 $— 
HHI divestiture and separation1.2 — 5.5 — 
Rejuvenate acquisition and integration2.0 — 6.3 — 
Armitage acquisition and integration0.5 2.0 1.2 6.8 
Other3.8 6.2 7.7 20.4 
Total transaction related charges$20.2 $8.2 $35.1 $27.2 
1213
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Rejuvenate acquisition and integration$5.8 $0 $5.8 $0 
Armitage acquisition and integration1.0 0 7.7 0 
Coevorden operations divestiture and separation2.9 1.7 7.7 3.4 
GBL divestiture and separation0.3 2.5 3.0 7.6 
Omega Sea acquisition and integration0 0.1 0.2 1.5 
Other1.1 1.8 17.0 4.9 
Total transaction related charges$11.1 $6.1 $41.4 $17.4 
NOTE 2 – DIVESTITURES
The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the accompanying Condensed Consolidated Statements of Income for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021:
Three Month Periods EndedSix Month Periods Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Income from discontinued operations before income taxes – HHI$71.0 $69.6 $130.9 $163.7 
Loss from discontinued operations before income taxes – Other(3.1)(1.0)(3.4)(1.3)
Interest on corporate debt allocated to discontinued operations11.0 11.8 21.4 24.5 
Income from discontinued operations before income taxes56.9 56.8 106.1 137.9 
Income tax expense from discontinued operations15.8 16.5 26.2 40.4 
Income from discontinued operations, net of tax41.1 40.3 79.9 97.5 
Income (loss) from discontinued operations, net of tax attributable to noncontrolling interest0.1 — 0.5 (0.2)
Income from discontinued operations, net of tax attributable to controlling interest$41.0 $40.3 $79.4 $97.7 
Interest from corporate debt allocated to discontinued operations includes interest expense from Term Loans required to be paid down using proceeds received on disposal on sale of a business, and interest expense from corporate debt not directly attributable to or related to other operations based on the ratio of net assets of the disposal group held for sale to the consolidated net assets of the Company plus consolidated debt, excluding debt assumed in transaction, required to be repaid, or directly attributable to other operations of the Company. Corporate debt, including Term Loans required to be paid down, are not classified as held for sale as they are not directly attributable to the identified disposal group.
HHI
On September 8, 2021, the Company entered into a definitive Asset and June 28, 2020:Stock Purchase Agreement (the "ASPA") with ASSA ABLOY AB ("ASSA") to sell its HHI segment for cash proceeds of $4.3 billion, subject to customary purchase price adjustments. The Company's assets and liabilities associated with the HHI disposal group have been classified as held for sale and the respective operations have been classified as discontinued operations and reported separately for all periods presented.
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
(Loss) income from discontinued operations before income taxes$(5.2)$(0.2)$(6.5)$3.6 
Income tax benefit (expense) from discontinued operations0 (8.2)0.1 (8.6)
(Loss) income from discontinued operations, net of tax(5.2)8.0 (6.6)12.2 
(Loss) income from discontinued operations attributable to controlling interest, net of tax$(5.2)$8.0 $(6.6)$12.2 
The ASPA provides that ASSA will purchase the equity of certain subsidiaries of the Company, and acquire certain assets and assume certain liabilities of other subsidiaries used or held for the purpose of the HHI business. The Company and ASSA have made customary representations and warranties and have agreed to customary covenants relating to the acquisition. Among other things, prior to the consummation of the acquisition, the Company will be subject to certain business conduct restrictions with respect to its operation of the HHI business. The Company and ASSA have agreed to indemnify each other for losses arising from certain breaches of the ASPA and for certain other matters. In particular, the Company has agreed to indemnify ASSA for certain liabilities relating to the assets retained by the Company, and ASSA has agreed to indemnify the Company for certain liabilities assumed by ASSA, in each case as described in the ASPA. The Company and ASSA have agreed to enter into related agreements ancillary to the acquisition that will become effective upon the consummation of the acquisition, including a customary transition services agreements and reverse transition services agreements.
DuringThe consummation of the acquisition is subject to certain customary closing conditions, including, among other things, (i) the absence of a material adverse effect on HHI, (ii) the expiration or termination of required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the receipt of certain other antitrust approvals in certain specified foreign jurisdictions (the conditions contained in (ii) and (iii) together, the “Antitrust Conditions”), (iv) the accuracy of the representations and warranties of the parties generally subject to a customary material adverse effect standard (as described in the ASPA) or other customary materiality qualifications), (v) the absence of governmental restrictions on the consummation of the acquisition in certain jurisdictions, and (vi) material compliance by the parties with their respective covenants and agreements under the ASPA. The consummation of the transaction is not subject to any financing condition. The Company is engaged with antitrust regulators in the ongoing regulatory review of the transaction. Although the timing and outcome of the regulatory process cannot be predicted, the Company currently expects the merger review process to last for several months. As such, though there can be no assurance when the transaction will close, if at all, the Company does expect the transaction to close before September 2022.
The ASPA also contains certain termination rights, including the right of either party to terminate the ASPA if the consummation of the acquisition has not occurred on or before December 8, 2022 (the “Termination Date”). Further, if the acquisition has not been consummated by the Termination Date and all conditions precedent to ASSA's obligation to consummate the acquisition have otherwise been satisfied except for one or more of the Antitrust Conditions, then ASSA would be required to pay the Company a termination fee of $350 million.

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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 2 – DIVESTITURES (continued)
The following table summarizes the assets and liabilities of the HHI disposal group classified as held for sale as of April 3, 2022 and September 30, 2021:
(in millions)April 3, 2022September 30, 2021
Assets
Trade receivables, net$152.0 $130.2 
Other receivables7.8 12.1 
Inventories401.1 332.2 
Prepaid expenses and other current assets41.2 39.1 
Property, plant and equipment, net157.3 143.5 
Operating lease assets65.8 55.5 
Deferred charges and other8.4 11.7 
Goodwill711.3 710.9 
Intangible assets, net374.9 374.8 
Total assets of business held for sale$1,919.8 $1,810.0 
Liabilities
Current portion of long-term debt$1.3 $1.5 
Accounts payable242.6 206.6 
Accrued wages and salaries28.0 41.7 
Other current liabilities74.3 75.9 
Long-term debt, net of current portion54.0 54.4 
Long-term operating lease liabilities52.7 48.6 
Deferred income taxes8.2 7.8 
Other long-term liabilities14.6 17.8 
Total liabilities of business held for sale$475.7 $454.3 
The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture in the accompanying Condensed Consolidated Statements of Operations for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021:
Three Month Periods EndedSix Month Periods Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net sales$420.8 $389.5 $795.4 $798.2 
Cost of goods sold275.4 248.1 520.4 488.8 
Gross profit145.4 141.4 275.0 309.4 
Operating expenses72.3 69.9 139.5 140.3 
Operating income73.1 71.5 135.5 169.1 
Interest expense0.8 0.9 1.7 1.7 
Other non-operating expense, net1.3 1.0 2.9 3.7 
Income from discontinued operations before income taxes$71.0 $69.6 $130.9 $163.7 
Beginning in September 2021, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with the HHI disposal group classified as held for sale. Interest expense consists of interest from debt directly attributable to HHI operations that primarily consist of interest from finance leases. No impairment loss was recognized on the assets held for sale as the purchase price of the business less estimated cost to sell is more than its carrying value. The following table presents significant non-cash items and capital expenditures of discontinued operations from the HHI divestiture for the three and six month periods ended April 3, 2022 and April 4, 2021:
Three Month Periods EndedSix Month Periods Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Depreciation and amortization$— $8.5 $— $17.1 
Share based compensation$1.2 $1.2 $4.1 $2.4 
Purchases of property, plant and equipment$7.5 $7.3 $12.4 $11.5 
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 2 – DIVESTITURES (continued)
Other
Income from discontinued operations before income taxes – Other includes incremental pre-tax loss on sale for changes to tax and legal indemnifications and other agreed-upon funding under the acquisition agreement for sale and divestiture of its Global Batteries & Lighting ("GBL") and Global Auto Care ("GAC") divisions to Energizer Holdings, Inc. ("Energizer") during the year ended September 30, 2019.
The Company and Energizer agreed to indemnify each other for losses arising from certain breaches of the acquisition agreement and for certain other matters. The Company has agreed to indemnify Energizer for certain liabilities relating to the assets retained, by the Company, and Energizer agreed to indemnify the Company for certain liabilities assumed, by Energizer, in each case as described in the acquisition agreements. As of July 4, 2021April 3, 2022 and September 30, 2020,2021, the Company recognized $36.8$26.5 million and $51.6$36.5 million, respectively, related to indemnification payables in accordance with the acquisition agreements, including $17.4$9.8 million and $33.0$17.3 million, respectively, within Other Current Liabilities, primarily attributable to current income tax indemnifications, and $19.4$16.7 million and $18.6$19.2 million, respectively, within Other Long-Term Liabilities on the Company’s Condensed Consolidated Statements of Financial Position, primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.
Coevorden Operations
On March 29, Subsequently, effective January 2, 2020, the Company completedEnergizer closed its saledivestitures of the dogEuropean based Varta® consumer battery business in the EMEA region to Varta AG and cat food (“DCF”transferred all respective rights and indemnifications attributable to the Varta® consumer battery business provided by the GBL sale to Varta AG.
The Company entered into a series of transaction service agreements ("TSA") production facility and distribution center in Coevorden, Netherlands (“Coevorden Operations”) pursuantreverse TSAs with Energizer to an agreementsupport various shared back office administrative functions including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement. TSAs associated with United Petfood Producers NV (“UPP”) for total cash proceeds of $29.0 million received during the year ended September 30, 2020. The divestiture did not constitute a strategic shift for the Company and therefore was not considered discontinued operations. The divestitureVarta® consumer battery business were transferred to Varta AG as part of the Coevorden Operations was definedsubsequent divestiture by Energizer. Charges associated with TSAs are recognized as bundled service costs under a fixed fee structure by the respective service or function and geographic location, including one-time pass-through charges for warehousing, freight, amongst others, with variable expiration dates up 24 months. Charges associated with TSAs and reverse TSAs are recognized as a disposal of a business andreduction to or increase in the respective operating costs as a component of operating expense or cost of goods sold depending upon the GPC segment and reporting unit,functions supported by or provided to the Company. Additionally, due to the commingled nature of the shared administrative functions, cash would be received and/or paid on behalf of the respective counterparty's operations, resulting in cash flow being commingled with operating cash flow of the allocation of $10.6 million of GPC goodwill toCompany which would settle on a net basis with TSA charges. During the disposal group based upon a relative fair-value allocation. Assets held for sale are recognized at their estimated fair value less cost to sell, which resulted in the recognition of a loss on assets held for sale of $26.8 million during the ninethree month period ended June 28, 2020.
April 4, 2021, the Company recognized net gain of $0.1 million, consisting of TSA charges of $0.1 million. During the six month period ended April 4, 2021, the Company recognized net loss of $1.7 million, consisting of TSA charges of $0.9 million and reverse TSA costs of $2.6 million. The Company exited all outstanding TSAs and UPP entered into related agreements ancillary to the acquisition that became effective upon the consummation of the acquisition, including a transaction service arrangement (TSA). The Company has continued to operate its commercial DCF business following the divestiture of the Coevorden Operations and entered into a manufacturing agreement with UPP to supply the continuing DCF business, subject to an incremental tolling charge. Additionally, the Company leases and operates the distribution center on behalf of UPP for up to 18 months following the divestiture under a lease agreement.reverse TSAs in January 2021.
NOTE 3 -– ACQUISITIONS
RejuvenateTristar Business Acquisition
On May 28, 2021,February 18, 2022, the Company acquired all ownershipof the membership interests in For LifeHPC Brands, LLC, which consist of the home appliances and cookware business of Tristar Products, LLC ("FLP"Inc. (the "Tristar Business") for a purchase price of approximately $301.5 million. FLP is$325.0 million, net of customary purchase price adjustments and transaction costs, plus a leading manufacturerpotential earn-out payment of household cleaning, maintenance,up to $100.0 million if certain gross profit targets are achieved in calendar year 2022, and restorationanother earn-out payment of $25.0 million if certain other gross profit targets are achieved in calendar year 2023. The acquisition of the Tristar Business was funded by a combination of cash on hand and incremental borrowings incurred as a new tranche under the Company's existing credit agreement. See Note 10 - Debt for further detail on the amendment to the credit agreement.
The Tristar Business includes a portfolio of home appliances and cookware products sold under the Rejuvenate® brand. PowerXL®, Emeril Legasse®, and Copper Chef® brands. The PowerXL® and Copper Chef® brands were acquired outright by the Company while the Emeril Legasse® 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 Lagasse® brands in 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 of 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.
The net assets and operating results of FLP,the Tristar Business, since the acquisition date of May 28, 2021,February 18, 2022, are included in the Company’s Condensed Consolidated Statements of Income and reported within the H&GHPC reporting segment for the three and ninesix month periods ended July 4, 2021.April 3, 2022.
The Company has recorded an allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the May 28, 2021February 18, 2022 acquisition date. The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $147.0$103.7 million was recorded as goodwill, which is deductible for tax purposes. Goodwill includes value associated with profits earned from market and expansion capabilities including the success of new product launches through direct response television and direct to consumer channels, new brand development and products brought to market by the Company, synergies from integration and streamlining operational activities, and the going concern of the business and the value of the assembled workforce. The preliminary fair values recorded were determined based upon a valuation with estimates and assumptions used in such valuation that are subject to change within the measurement period (up to one year from the acquisition date). The primary areas of acquisition accountingaccount that are not yet finalized relate to amounts for purchase price, intangible assets, deferred taxes, goodwill, and residual goodwill.components of working capital.

The calculation of preliminary purchase price is as follows:
(in millions)Amount
Cash paid$314.6 
Estimated purchase price settlement(39.1)
Contingent consideration30.0 
Total purchase price$305.5 
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SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 3 - ACQUISITIONS (continued)
The calculationCompany recorded a contingent consideration liability of purchase price$30.0 million as of the date of the acquisition to reflect the estimated fair value of the contingent consideration for the earn-out payments. The fair value was determined using a Monte Carlo simulation model to value the earn-out based on the likelihood of reaching specific targets. The fair value measurement is determined based on significant unobservable inputs and purchase price allocation isthus represents a Level 3 fair value measurement. The key assumptions considered include the estimated amount and timing of projected gross profits, volatility, estimated discount rates, and risk-free interest rate. In each reporting period after the acquisition, the Company will reassess the value of the contingent consideration liability and may recognize an increase or decrease in the fair value in its consolidated statements of earnings after the measurement period. Changes may result from changes in actual results and projected forecasts. The inputs and assumptions may not be observable in the market, but reflect the assumptions the Company believes would be made by a market participant. There were no changes in the contingent consideration liability during the three and six month periods ended April 3, 2022 following the acquisition date of February 18, 2022. As of April 3, 2022, the current portion of the contingent consideration was classified as follows:Other Current Liabilities for the calendar year 2022 payment of $25.0 million and the long-term portion as Other Long-Term Liabilities for the calendar year 2023 payment of $5.0 million on the Company’s Condensed Consolidated Statements of Financial Position.
(in millions)Amount
Cash consideration$301.1 
Estimated working capital settlement0.4 
Total consideration$301.5 

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:
(in millions)Purchase Price Allocation
Cash and cash equivalents$1.40.3 
Trade receivables, net10.258.4 
Other receivables0.4 
Inventories15.4102.0 
Prepaid expenses and other current assets0.34.4 
Property, plant and equipment, net0.4 
Operating lease assets23.3 
Goodwill147.0103.7 
Intangible assets, net128.795.0 
Accounts payable(1.7)(51.7)
Accrued wages and salaries(0.1)(0.6)
Other current liabilities(0.1)(19.0)
Long-term operating lease liabilities(11.1)
Net assets acquired$301.5305.5 
The values allocated to intangible assets and the weighted average useful lives are as follows:
(in millions)Carrying AmountWeighted Average Useful Life (Years)
Tradenames$119.066.0 Indefinite
Customer relationships8.429.0 14 years
Technology1.3 1113 years
Total intangibles acquired$128.795.0 
The Company performed a valuation of the acquired inventories, tradenames, technology, and customer relationships. The fair value measurements are based on significant inputs not observable in the market, and therefore, represent Level 3 measurements. The following is a summary of significant inputs to the valuation:
Inventory – Acquired inventory consists of branded finished goods that were valued based on the comparative sales method, which estimates the expected sales price of the finished goods inventory, reduced for all costs expected to be incurred in its completion or disposition and a profit on those costs.
Tradename – The Company valued the PowerXL® tradename, Rejuvenate®, using an income approach, the relief-from-royalty method. Under this method, the asset value was determined by estimating the hypothetical royalties that would have to be paid if the tradename was not owned. A royalty rate of 12% for valuation of Rejuvenate® was selected based on consideration of several factors, including prior transactions, related trademarks and tradenames, other similar trademark licensing, and transaction agreements and the relative profitability and perceived contribution of the tradename. The discount rate applied to the projected cash flow was 10.5% based on the a weighted-average cost of capital for the overall business. The resulting discounted cash flows were then tax-effected at the applicable statutory rate.
Customer relationships –The Company valued customer relationships using an income approach, the multi-period excess earnings method. In determining the fair value of the customer relationships, the multi-period excess earnings approach values the intangible asset at the present value of the incremental after-tax cash flows attributable only to the customer relationship after deducting contributory asset charges. The incremental after-tax cash flows attributable to the subject intangible asset are then discounted to their present value. Only expected sales from current customers were used, which are estimated using average annual expected growth rate of 4%. The Company assumed a customer retention rate of up to 98%, which is supported by historical retention rates. The discount rate applied to the projected cash flow was 10.5% and income taxes were estimated at the applicable statutory rate.
Technology – The Company valued technology using an income approach, the relief-from-royalty method. Under this method, the asset value was determined by estimating the hypothetical royalties that would have to be paid if the technology was not owned. A royalty rate of 3% was selected based on consideration of several factors, including prior transactions, related licensing agreements and the importance of the technology and profit levels, among other considerations. The discount rate applied to the projected cash flow was 10.5% and income taxes were estimated at the applicable statutory rate.
Pro forma results have not been presented as the Rejuvenate acquisition is not considered individually significant to the consolidated results of the Company.
Armitage Acquisition
On October 26, 2020, the Company acquired all of the stock of Armitage Pet Care Ltd ("Armitage") for approximately $187.7 million. Armitage is a premium pet treats and toys business headquartered in Nottingham, United Kingdom, including a portfolio of brands that include Armitage's dog treats brand, Good Boy®, cat treats brand, Meowee!® and Wildbird®, bird feed products, among others, that are predominantly sold within the United Kingdom. The net assets and operating results of Armitage, since the acquisition date of October 26, 2020, are included in the Company’s Condensed Consolidated Statements of Income and reported within the GPC reporting segment for the three and nine month periods ended July 4, 2021.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 3 - ACQUISITIONS (continued)
The Company has recorded an allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the October 26, 2020 acquisition date. The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $90.7 million was recorded as goodwill, which is not deductible for tax purposes. Goodwill includes value associated with profits earned from market and expansion capabilities, synergies from integration and streamlining operational activities, the going concern of the business and the value of the assembled workforce.
The calculation of purchase price and purchase price allocation is as follows:
(in millions)Amount
Cash paid$187.7 
Debt assumed51.0 
Cash consideration$136.7 
(in millions)Purchase Price Allocation
Cash and cash equivalents$6.9 
Trade receivables, net16.7 
Other receivables1.9 
Inventories16.3 
Prepaid expenses and other current assets0.2 
Property, plant and equipment, net3.0 
Operating lease assets0.1 
Deferred charges and other0.9 
Goodwill90.7 
Intangible assets, net88.6 
Accounts payable(9.2)
Accrued wages and salaries(1.5)
Other current liabilities(7.0)
Long-term debt, net of current portion(51.0)
Long-term operating lease liabilities(0.1)
Deferred income taxes(18.0)
Other long-term liabilities(1.8)
Net assets acquired$136.7 
The values allocated to intangible assets and the weighted average useful lives are as follows:
(in millions)Carrying AmountWeighted Average Useful Life (Years)
Tradenames$74.3 Indefinite
Customer relationships14.3 12 years
Total intangibles acquired$88.6 
The Company performed a valuation of the acquired inventories, tradenames, and customer relationships. The fair value measurements are based on significant inputs not observable in the market, and therefore, represent Level 3 measurements. The following is a summary of significant inputs to the valuation:
Inventory - Acquired inventory consists of branded finished goods that were valued based on the comparative sales method, which estimates the expected sales price of the finished goods inventory, reduced for all costs expected to be incurred in its completion or disposition and a profit on those costs.
Tradenames - The Company valued the tradenames, Good Boy® brand portfolio and Wildbird® and Other brand portfolio, using an income approach, the relief-from-royalty method. Under this method, the asset value was determined by estimating the hypothetical royalties that would have to be paid if the tradenames were not owned. Royalty ratesrate of 8%3% for valuation of Good Boy® and 3% for Wildbird® and Other werePowerXL® was selected based on consideration of several factors, including prior transactions, related trademarks and tradenames, other similar trademark licensing, and transaction agreements and the relative profitability and perceived contribution of the tradenames. The discount rate applied to the projected cash flow was 11%16% based on the a weighted-average costimplied transaction internal rate of capitalreturn for the overall business.business, excluding cost synergies. The resulting discounted cash flows were then tax-effected at the applicable statutory rate.
Customer relationships– - The Company valuedvalues customer relationships using an income and cost approach, the avoided cost and lost profits method. The underlying premisemulti-period excess earnings method under a market participant distributor method of the method is thatincome approach. In determining the economicfair value of the customer relationships, the multi-period excess earnings approach values the intangible asset can be estimated based on considerationat the present value of the total costs that would be avoided by having this asset in place. These costs primarily consider the costs that would be incurredincremental after-tax cash flows attributable only to re-create the customer relationships in termsrelationship after deducting contributory asset charges. Only expected sales from current retail customers were used, which are estimated using average annual expected growth rate of employee salaries2.7%. The Company assumed a customer attrition rate of 5%, which is supported by historical attrition rates. The discount rate applied to the projected cash flow was 12% based upon a weighted average cost of capital for the overall business and income taxes were estimated at the applicable statutory rate.
The following pro forma financial information summarizes the combined results of operations for the Company and the revenues and associated profits forgone due toacquired Tristar Business, as though the absencecompanies were combined as of the relationships for a period of time.
Pro forma results have not been presented as the Armitage acquisition is not considered individually significant to the consolidated resultsbeginning of the Company.Company’s fiscal 2021. The unaudited pro forma financial information was as follows:
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SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)

NOTE 3 - ACQUISITIONS (continued)
Three Month Period EndedSix Month Period Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Proforma net sales$853.7 $902.8 $1,765.1 $1,848.0 
Proforma net (loss) income from continuing operations(26.0)6.1 (33.3)21.2 
Proforma net income15.1 45.5 46.1 118.8 
Proforma diluted earnings from continuing operations per share$(0.64)$0.14 $(0.77)$0.49 
Proforma diluted earnings per share0.37 1.07 1.07 2.77 
The pro forma financial information includes, where applicable, adjustments for: (i) additional amortization expense that would have been recognized related to the acquired intangible assets, (ii) additional operating expense from the excess fair value adjustments on ROU operating lease assets for below market rents (iv) additional cost of sales related to the inventory valuation adjustment, (v) transaction costs and other one-time non-recurring costs and (vi) the estimated income tax effect on the acquired Tristar Business and pro forma adjustments.
Through the acquisition of the Tristar Business, the Company acquired substantially all of the operations, employees and net assets of Tristar Products, Inc. and entered into a series of TSAs for various shared back office administrative functions including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement, to support the excluded product groups that did not convey with the transaction. Charges associated with TSAs are recognized as bundled service charges under a fixed fee structure by the respective service or function along with one-time pass-through charges, including warehousing, and freight, among others, from the acquired Tristar Business that settle on a net basis between the two parties. Charges for TSA services are recognized as a reduction to the respective operating costs as a component of operating expense or cost of goods sold depending upon the functions supported by the acquired Tristar Business. During the three and six month periods ended April 3, 2022, the Company recognized TSA income of $0.5 million. Additionally, the Company assumed the cash accounts supporting both the acquired Tristar Business and the excluded product groups, and due to the commingled nature of operations, cash would be received and/or paid on behalf of the excluded product groups' operations, resulting in cash flow being commingled with operating cash flow of the Company which would settle on a net basis with TSA charges. As of April 3, 2022, there was an outstanding payable to Tristar Products, Inc. of $0.7 million included within Other Current Liabilities on the Company’s Condensed Consolidated Statements of Financial Position.
NOTE 4 -– RESTRUCTURING AND RELATED CHARGES
Global Productivity Improvement Program – During the year ended September 30, 2019, the Company initiated a company-wide, multi-year program, which consists 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. Since the announcement of the project and completion of the Company’s divestitures of GBL and GAC during the year ended September 30, 2019, the project focus includes the transitioning of the Company’s continuing operations in a post-divestiture environment and separation from Energizer TSAs and reverse TSAs. Refer to Note 2 – Divestitures and Note 18 – Related Party Transactionsfor further discussion of continuing involvement with Energizer.  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 in certain regions and local jurisdictions; among others. Total cumulative costs incurred associated with the project were $141.1$156.3 million as of July 4, 2021,April 3, 2022, with approximately $27.3$0.9 million forecasted in the foreseeable future. The project costs are anticipated to be incurred through the fiscal year ending September 30, 2022.
GPC Distribution Center Transitions – During the year ended September 30, 2021, the GPC segment entered into an initiative to update its supply chain and distribution operations within the US to optimize and improve fill rates, address capacity needs attributable to recent and projected growth in the business, improve product availability to meet increasing customer demand and improve overall operational effectiveness and throughput. The initiative includes the transition of its third party logistics (3PL) service provider at its existing Edwardsville, IL distribution center, incorporating new facilities into the distribution footprint by expanding warehouse capacity and securing additional space, and updating engagement and processes with suppliers and its transportation and logistics handlers. Costs incurred to facilitate the transition of service providers include one-time implementation and start-up costs, including the integration of the provider systems and technology, incremental compensation and incentive-based compensation to maintain performance during the transition period, duplicative and redundant costs, and incremental costs for various disruptions in the operations during the transition period, including supplemental transportation and storage costs. Due to the continued supply chain constraints impacting product availability experienced by the GPC segment, the Company has extended the initiative and expanded the project to include additional long-term capacity to be available later in the 2022 fiscal year. Total cumulative costs incurred associated with the project were $27.4 million as of April 3, 2022, with approximately $5.3 million forecasted in the foreseeable future. The project costs are anticipated to be incurred through the remainder of the year ending September 30, 2022.
Other Restructuring Activities – The Company may enter into small, less significant initiatives and restructuring related activities primarily to reduce costs and improve margins throughout the organization. Individually these activities are not substantial and occur over a shorter time period (generally less than 12 months).
The following summarizes restructuring and related charges for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020:2021:
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Global productivity improvement program$4.8 $12.2 $15.7 $60.1 
Other restructuring activities5.3 0 7.7 1.5 
Total restructuring and related charges$10.1 $12.2 $23.4 $61.6 
Reported as:
Cost of goods sold$0.3 $(0.3)$1.7 $12.5 
Operating expense9.8 12.5 21.7 49.1 
The following is a summary of restructuring and related charges for the three and nine month periods ended July 4, 2021 and June 28, 2020, cumulative costs for current restructuring initiatives, and estimated future costs to be incurred as of July 4, 2021, by cost type.
(in millions)Termination
Benefits		Other
Costs		Total
For the three month period ended July 4, 2021$5.0 $5.1 $10.1 
For the three month period ended June 28, 20200.5 11.7 12.2 
For the nine month period ended July 4, 20218.3 15.1 23.4 
For the nine month period ended June 28, 202011.9 49.7 61.6 
Cumulative costs through July 4, 202125.0 116.1 141.1 
Estimated future costs to be incurred1.0 26.3 27.3 
The following is a rollforward of the accrual related to all restructuring and related activities, included within Other Current Liabilities, by cost type for the nine month period ended July 4, 2021.
(in millions)Termination
Benefits		Other
Costs		Total
Accrual balance at September 30, 2020$4.1 $6.4 $10.5 
Provisions2.7 8.7 11.4 
Cash expenditures(2.1)(13.0)(15.1)
Non-cash items0 0.1 0.1 
Accrual balance at July 4, 2021$4.7 $2.2 $6.9 
The following summarizes restructuring and related charges by segment for the three and nine month periods ended July 4, 2021 and June 28, 2020, cumulative costs incurred through July 4, 2021, and estimated future costs to be incurred by the Company’s segments:
(in millions)HHIHPCGPCH&GCorporateTotal
For the three month period ended July 4, 2021$0 $2.1 $3.9 $0 $4.1 $10.1 
For the three month period ended June 28, 20200.3 0.7 2.1 0 9.1 12.2 
For the nine month period ended July 4, 20210 6.2 6.0 0 11.2 23.4 
For the nine month period ended June 28, 20200.9 3.6 18.8 0.3 38.0 61.6 
Cumulative costs through July 4, 20211.4 17.8 22.8 2.2 96.9 141.1 
Estimated future costs to be incurred0.8 0.9 3.5 2.1 20.0 27.3 
Three Month Periods EndedSix Month Periods Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Global productivity improvement program$2.3 $1.9 $4.1 $10.9 
GPC distribution transition5.6 — 15.9 — 
Other restructuring activities8.5 2.4 13.8 2.4 
Total restructuring and related charges$16.4 $4.3 $33.8 $13.3 
Reported as:
Cost of goods sold$1.2 $1.3 $1.5 $1.4 
Operating expense15.2 3.0 32.3 11.9 
1618
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 4 - RESTRUCTURING AND RELATED CHARGES (continued)


The following is a summary of restructuring and related charges for the three and six month periods ended April 3, 2022 and April 4, 2021, by cost type.
(in millions)Termination
Benefits		Other
Costs		Total
For the three month period ended April 3, 2022$1.2 $15.2 $16.4 
For the three month period ended April 4, 20210.4 3.9 4.3 
For the six month period ended April 3, 20221.9 31.9 33.8 
For the six month period ended April 4, 20213.3 10.0 13.3 
The following is a rollforward of the accrual related to all restructuring and related activities, included within Other Current Liabilities, by cost type for the six month period ended April 3, 2022.
(in millions)Termination
Benefits		Other
Costs		Total
Accrual balance at September 30, 2021$4.6 $5.6 $10.2 
Provisions0.1 2.9 3.0 
Cash expenditures(1.9)(0.7)(2.6)
Foreign currency and other(0.8)(0.1)(0.9)
Accrual balance at April 3, 2022$2.0 $7.7 $9.7 
The following summarizes restructuring and related charges by segment for the three and six month periods ended April 3, 2022 and April 4, 2021, by the Company’s segments:
(in millions)HPCGPCH&GCorporateTotal
For the three month period ended April 3, 2022$3.7 $8.2 $— $4.5 $16.4 
For the three month period ended April 4, 20211.5 0.6 — 2.2 4.3 
For the six month period ended April 3, 20224.3 19.6 — 9.9 33.8 
For the six month period ended April 4, 20214.1 2.1 — 7.1 13.3 
NOTE 5 – REVENUE RECOGNITION
The Company generates all of its revenue from contracts with customers. The following table disaggregates our revenue for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021, and June 28, 2020, by the Company’s key revenue streams, segments and geographic region (based upon destination):
Three Month Period Ended July 4, 2021
(in millions)HHIHPCGPCH&GTotal
Product Sales
NA$405.6 $111.3 $147.8 $209.3 $874.0 
EMEA0 101.9 91.2 0 193.1 
LATAM11.7 43.9 3.5 1.8 60.9 
APAC1.4 15.0 10.5 0 26.9 
Licensing0.3 2.3 2.9 1.0 6.5 
Other0 0 1.4 0 1.4 
Total Revenue$419.0 $274.4 $257.3 $212.1 $1,162.8 
Three Month Period Ended April 3, 2022Three Month Period Ended April 4, 2021
(in millions)HPCGPCH&GTotalHPCGPCH&GTotal
Product Sales
NA$136.8 $182.2 $194.2 $513.2 $115.3 $182.4 $166.8 $464.5 
EMEA109.1 95.3 — 204.4 123.3 94.2 — 217.5 
LATAM51.5 4.5 1.7 57.7 40.6 4.4 1.5 46.5 
APAC16.2 9.0 — 25.2 15.9 8.8 — 24.7 
Licensing2.1 2.4 0.7 5.2 2.8 2.1 0.5 5.4 
Other0.4 1.7 — 2.1 — 1.7 — 1.7 
Total Revenue$316.1 $295.1 $196.6 $807.8 $297.9 $293.6 $168.8 $760.3 
Six Month Period Ended April 3, 2022Six Month Period Ended April 4, 2021
(in millions)HPCGPCH&GTotalHPCGPCH&GTotal
Product Sales
NA$264.2 $369.7 $266.9 $900.8 $257.9 $360.5 $247.0 $865.4 
EMEA268.5 189.7 — 458.2 290.9 175.5 — 466.4 
LATAM120.1 9.2 4.1 133.4 83.0 8.4 3.2 94.6 
APAC37.9 20.2 — 58.1 38.2 17.9 — 56.1 
Licensing4.7 5.1 0.9 10.7 6.4 3.9 0.8 11.1 
Other0.4 3.4 — 3.8 — 2.9 — 2.9 
Total Revenue$695.8 $597.3 $271.9 $1,565.0 $676.4 $569.1 $251.0 $1,496.5 

The Company offers standard warranty coverage on certain products that it sells and accounts for this as an assurance warranty. As such, no transaction price is allocated to the standard warranty, and the Company records a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. See Note 17 - Commitments and Contingencies for further information regarding the Company’s standard warranties.
Three Month Period Ended June 28, 2020
(in millions)HHIHPCGPCH&GTotal
Product Sales
NA$272.7 $108.7 $170.2 $207.8 $759.4 
EMEA0.1 96.3 55.1 0 151.5 
LATAM5.1 28.4 3.5 2.0 39.0 
APAC3.5 15.2 10.0 0 28.7 
Licensing0.2 2.0 2.1 0.8 5.1 
Other0 0 0.6 0 0.6 
Total Revenue$281.6 $250.6 $241.5 $210.6 $984.3 
With the acquisition of the Tristar Business, the Company also sells extended warranty coverage for certain Tristar products that are sold directly to consumers, which it accounts for as service warranties. In most cases, the extended warranty is sold as a separate contract and separate performance obligation that is distinct from the product. The extended warranty transaction revenue is initially recognized as deferred revenue and amortized on a straight-line basis to Net Sales over the life of the contracts following the standard warranty period. Revenue attributable to extended warranties was first recognized with the acquisition of the Tristar
19
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)

NOTE 5 –REVENUE RECOGNITION (continued)
Nine Month Period Ended July 4, 2021
(in millions)HHIHPCGPCH&GTotal
Product Sales
NA$1,181.7 $369.3 $508.4 $456.4 $2,515.8 
EMEA0 392.7 266.6 0 659.3 
LATAM32.1 126.9 11.9 5.0 175.9 
APAC2.5 53.2 28.3 0 84.0 
Licensing0.9 8.7 6.8 1.8 18.2 
Other0 0 4.3 0 4.3 
Total Revenue$1,217.2 $950.8 $826.3 $463.2 $3,457.5 

Business on February 18, 2022. See
Nine Month Period Ended June 28, 2020
(in millions)HHIHPCGPCH&GTotal
Product Sales
NA$867.9 $323.8 $474.9 $389.7 $2,056.3 
EMEA0.4 337.7 167.0 0 505.1 
LATAM25.5 92.6 10.2 4.3 132.6 
APAC13.8 45.3 23.3 0 82.4 
Licensing0.8 6.0 5.9 1.6 14.3 
Other0 0 2.9 0 2.9 
Total Revenue$908.4 $805.4 $684.2 $395.6 $2,793.6 
Note 3 - Acquisitions for more details. As of April 3, 2022, the Company had $1.3 million service warranty revenue deferred and included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.
The Company has a broad range of customers including many large mass retail customers. During the three month period ended July 4, 2021, there were three large retail customers each exceeding 10% of consolidated Net Sales and representing 34.3% of consolidated Net Sales. During the nine month period ended July 4, 2021, there was one large retail customer exceeding 10% of consolidated Net Sales and representing 12.5% of consolidated Net Sales. During the three and nine month periods ended June 28, 2020,April 3, 2022 and April 4, 2021, there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 26.9%33.3% and 25.2%32.2% of consolidated Net Sales, respectively. During the six month periods ended April 3, 2022 and April 4, 2021, there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 33.1% and 33.0% of consolidated Net Sales, respectively.
A significant portion of our product sales from our HPC segment, primarily in the NA and LATAM regions, are subject to the continued use and access to the Black and Decker® brand (B&D) through a license agreement with Stanley Black and Decker. The license agreement was recently renewed 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. Net sales from B&D product sales consist of $98.0 million and $93.7 million for the three month periods ended April 3, 2022 and April 4, 2021, respectively. Net sales from B&D product sales consist of $229.8 million and $205.3 million for the six month periods ended April 3, 2022 and April 4, 2021, respectively. All other significant brands and tradenames used in the Company’s commercial operations are directly owned and not subject to further restrictions.
In the normal course of business, the Company may allow customers to return product or take credit for product returns per the provisions in a sale agreement. Estimated product returns are recorded as a reduction in reported revenues at the time of sale based upon historical product return experience, adjusted for known trends, to arrive at the amount of consideration expected to be received. The allowance for product returns as of July 4, 2021,April 3, 2022, and September 30, 20202021 was $22.0$21.1 million and $23.1$11.8 million, respectively.
17
The increase in allowance for product returns balance is due to the acquisition of the Tristar Business. See Note 3 - Acquisitions for further discussion on the Tristar Business acquisition.
SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 6 -– RECEIVABLES AND CONCENTRATION OF CREDIT RISK
The allowance for uncollectible receivables as of July 4, 2021April 3, 2022 and September 30, 20202021 was $6.4 million.$10.3 million and $6.7 million, respectively. The Company has a broad range of customers including many large mass retail customers. As of July 4,April 3, 2022 and September 30, 2021 there were twowas one large retail customers each exceeding 10% of consolidated Net Trade Receivables and representing 26.0% of consolidated Net Trade Receivables. As of September 30, 2020, there were two large retail customers each exceeding 10% of consolidated Net Trade Receivables14.4% and representing 28.4%14.7%, respectively, of consolidated Net Trade Receivables.
NOTE 7 -– INVENTORIES
Inventories consist of the following:
(in millions)(in millions)July 4, 2021September 30, 2020(in millions)April 3, 2022September 30, 2021
Raw materialsRaw materials$104.1 $67.8 Raw materials$83.1 $66.1 
Work-in-processWork-in-process82.4 60.8 Work-in-process9.8 8.3 
Finished goodsFinished goods721.8 429.1 Finished goods707.7 488.4 
$908.3 $557.7 $800.6 $562.8 
NOTE 8 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
(in millions)(in millions)July 4, 2021September 30, 2020(in millions)April 3, 2022September 30, 2021
Land, buildings and improvementsLand, buildings and improvements$132.5 $134.8 Land, buildings and improvements$77.3 $83.5 
Machinery, equipment and otherMachinery, equipment and other562.7 520.0 Machinery, equipment and other385.9 383.0 
Finance leasesFinance leases201.8 200.8 Finance leases145.0 146.1 
Construction in progressConstruction in progress34.5 29.8 Construction in progress39.7 28.8 
Property, plant and equipmentProperty, plant and equipment931.5 885.4 Property, plant and equipment647.9 641.4 
Accumulated depreciationAccumulated depreciation(540.9)(488.9)Accumulated depreciation(391.5)(381.2)
Property, plant and equipment, netProperty, plant and equipment, net$390.6 $396.5 Property, plant and equipment, net$256.4 $260.2 
Depreciation expense from property, plant, and equipment for the three month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 was $18.2$12.2 million and $18.1$13.4 million, respectively; and for the ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 was $55.6$24.4 million and $62.1$26.4 million, respectively. The decrease in depreciation for the nine month period ended July 4, 2021 is attributable to accelerated depreciation realized as part of exiting GPC operating facilities in LATAM in the prior year.
NOTE 9 -– GOODWILL AND INTANGIBLE ASSETS
Goodwill consists of the following:
(in millions)HHIGPCH&GTotal
As of September 30, 2020$704.8 $431.6 $195.6 $1,332.0 
Foreign currency impact8.4 5.8 0 14.2 
Armitage acquisition (Note 3)0 90.7 0 90.7 
Rejuvenate acquisition (Note 3)0 0 147.0 147.0 
As of July 4, 2021$713.2 $528.1 $342.6 $1,583.9 
The Company considered the impact of the COVID-19 pandemic on its future operations and cash flows and concluded that, although the duration and severity of the COVID-19 pandemic could result in future impairment charges not currently considered, no triggering event occurred during the three and nine month periods ended July 4, 2021 to indicate an impairment of goodwill.
The carrying value of indefinite-lived intangibles and definite-lived intangibles assets subject to amortization and accumulated amortization are as follows:
July 4, 2021September 30, 2020
(in millions)Gross Carrying AmountAccumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNet
Amortizable Intangible Assets:
Customer relationships$719.5 $(399.9)$319.6 $692.1 $(367.9)$324.2 
Technology assets154.9 (98.0)56.9 175.7 (104.1)71.6 
Tradenames157.2 (139.9)17.3 161.0 (132.6)28.4 
Total Amortizable Intangible Assets1,031.6 (637.8)393.8 1,028.8 (604.6)424.2 
Indefinite-lived Intangible Assets - Tradenames1,212.1 — 1,212.1 1,007.5 — 1,007.5 
Total Intangible Assets$2,243.7 $(637.8)$1,605.9 $2,036.3 $(604.6)$1,431.7 
There were no impairments identified during the three and nine month periods ended July 4, 2021. While a triggering event did not occur during the three and nine month periods ended July 4, 2021, a prolonged COVID-19 pandemic negatively impacting net sales growth rate, changes in key assumptions, and other global and regional macroeconomic factors, could result in additional future impairment charges for indefinite-lived intangible assets.
(in millions)HPCGPCH&GTotal
As of September 30, 2021$— $524.6 $342.6 $867.2 
Tristar Business acquisition (Note 3)103.7 — — 103.7 
Foreign currency impact— (3.9)— (3.9)
As of April 3, 2022$103.7 $520.7 $342.6 $967.0 
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 9 - GOODWILL AND INTANGIBLE ASSETS (continued)
The carrying value of indefinite-lived intangibles and definite-lived intangibles assets subject to amortization and accumulated amortization are as follows:
April 3, 2022September 30, 2021
(in millions)Gross Carrying AmountAccumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNet
Amortizable Intangible Assets:
Customer relationships$644.6 $(367.1)$277.5 $619.6 $(352.3)$267.3 
Technology assets75.3 (28.3)47.0 75.3 (25.8)49.5 
Tradenames158.4 (149.0)9.4 158.4 (141.9)16.5 
Total Amortizable Intangible Assets878.3 (544.4)333.9 853.3 (520.0)333.3 
Indefinite-lived Intangible Assets – Tradenames929.8 — 929.8 870.8 — 870.8 
Total Intangible Assets$1,808.1 $(544.4)$1,263.7 $1,724.1 $(520.0)$1,204.1 
There were no triggering events and no impairments of goodwill and intangible assets identified during the three and six month periods ended April 3, 2022.
Amortization expense from the intangible assets for the three month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 was $20.3$13.5 million and $16.9$16.8 million, respectively; and for the ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 was $57.4$26.7 million and $50.9$30.9 million, respectively.
Excluding the impact of any future acquisitions, dispositions or changes in foreign currency, the Company estimates annual amortization expense of intangible assets for the next five fiscal years will be as follows:
(in millions)(in millions)Amortization(in millions)Amortization
2021$77.1 
2022202256.6 2022$50.2 
2023202346.5 202342.2 
2024202446.5 202442.2 
2025202544.4 202540.1 
2026202638.5 
NOTE 10 -– DEBT
Debt consists of the following:
July 4, 2021September 30, 2020April 3, 2022September 30, 2021
(in millions)(in millions)AmountRateAmountRate(in millions)AmountRateAmountRate
Spectrum Brands Inc.Spectrum Brands Inc.Spectrum Brands Inc.
Revolver Facility, variable rate, expiring June 30, 2025Revolver Facility, variable rate, expiring June 30, 2025$98.0 3.2 %$— — %Revolver Facility, variable rate, expiring June 30, 2025$775.0 3.0 %$— — %
Term Loan Facility, variable rate, due March 3, 2028Term Loan Facility, variable rate, due March 3, 2028399.0 2.5 %— — %Term Loan Facility, variable rate, due March 3, 2028396.0 2.5 %398.0 2.5 %
6.125% Notes, due December 15, 2024— — %250.0 6.1 %
5.75% Notes, due July 15, 20255.75% Notes, due July 15, 2025450.0 5.8 %1,000.0 5.8 %5.75% Notes, due July 15, 2025450.0 5.8 %450.0 5.8 %
4.00% Notes, due October 1, 20264.00% Notes, due October 1, 2026503.9 4.0 %499.1 4.0 %4.00% Notes, due October 1, 2026470.3 4.0 %492.9 4.0 %
5.00% Notes, due October 1, 20295.00% Notes, due October 1, 2029300.0 5.0 %300.0 5.0 %5.00% Notes, due October 1, 2029300.0 5.0 %300.0 5.0 %
5.50% Notes, due July 15, 20305.50% Notes, due July 15, 2030300.0 5.5 %300.0 5.5 %5.50% Notes, due July 15, 2030300.0 5.5 %300.0 5.5 %
3.875% Notes, due March 15, 20313.875% Notes, due March 15, 2031500.0 3.9 %0 0 %3.875% Notes, due March 15, 2031500.0 3.9 %500.0 3.9 %
Other notes and obligations2.1 8.5 %3.2 7.6 %
Obligations under finance leasesObligations under finance leases153.9 5.7 %160.5 5.6 %Obligations under finance leases97.6 5.0 %101.9 4.9 %
Total Spectrum Brands, Inc. debtTotal Spectrum Brands, Inc. debt2,706.9 2,512.8 Total Spectrum Brands, Inc. debt3,288.9 2,542.8 
Unamortized discount on debtUnamortized discount on debt(1.0)0 Unamortized discount on debt(0.9)(0.9)
Debt issuance costsDebt issuance costs(37.1)(36.5)Debt issuance costs(39.6)(35.6)
Less current portionLess current portion(17.7)(15.3)Less current portion(12.1)(12.0)
Long-term debt, net of current portionLong-term debt, net of current portion$2,651.1 $2,461.0 Long-term debt, net of current portion$3,236.3 $2,494.3 
TheBorrowings from the initial revolver capacity of $600 million under the Revolver Facility isare subject to either adjusted LIBORLondon Inter-Bank Offered Rate ("LIBOR") 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.annum; and borrowings under the incremental revolver capacity of $500 million, per the third amendment to the Credit Agreement discussed below, are subject to Secured Overnight Financing Rate ("SOFR") plus margin ranging from 1.75% to 2.75% per annum or base rate plus margin ranging from 0.75% to 1.75%. The LIBOR borrowings are subject to a 0.75% LIBOR floor and the SOFR borrowings are subject to a 0.50% SOFR floor. Our Revolver Facility allows for the LIBOR rate to be phased out and replaced with the Secured Overnight Financing RateSOFR and therefore we do not anticipate a material impact by the expected upcoming LIBOR transition. As a result of borrowings and payments under the Revolver Facility, the Company had borrowing availability of $478.0$308.4 million at July 4, 2021,April 3, 2022, net of outstanding letters of credit of $24.0$16.6 million.
On March 3, 2021, the Company, through its wholly owned subsidiary, Spectrum Brands, Inc ("SBI"), completed its offering of $500.0 million aggregate principal amount of its 3.875% Senior Notes due March 2031, and entered into a new Term Loan Facility (as defined below) in the aggregate principal amount of $400.0 million, expiring March 2028. Using the proceeds received, the Company redeemed $250.0 million aggregate principal amount of the 6.125% Notes in a cash tender offer and call and $550.0 million aggregate principal amount of the 5.75% Notes in a cash tender offer, with a make whole premium of $23.4 million and a write-off of unamortized debt issuance costs of $7.9 million recognized as interest expense for the nine month period ended July 4, 2021.
Spectrum Term Loan Facility
On March 3, 2021, the Company entered into the first amendment (the "Amended Credit Agreement") to the Amended and Restated Credit Agreement (the "Credit Agreement") dated as of June 30, 2020. The Amended Credit Agreement includes certain modified terms from the existing Credit Agreement to provide for a new term loan facility (the “Term Loan Facility”). The Term Loan Facility is in an aggregate principal amount of $400.0 million and will mature on March 3, 2028. The Term Loan Facility is subject to a rate per annum equal to either (1) the LIBO Rate (as defined in the Amended Credit Agreement), subject to a 0.50% floor, adjusted for statutory reserves, plus a margin of 2.00% per annum or (2) the Alternate Base Rate (as(As defined in the Amended Credit Agreement), plus a margin of 1.00% per annum. The Term Loan Facility allows for
Credit Agreement
On December 10, 2021, the LIBO rate to be phased out and replaced withCompany entered into the Secured Overnight Financing Rate and therefore we do not anticipate a material impactsecond amendment to the expected upcoming LIBOR transition. The Term Loan Facility was issued net of a $1.0 million discountAmended and the Company incurred $5.1 million of debt issuance costs, which is being amortized with a corresponding charge to interest expense over the remaining life of the loan.
Pursuant to a guarantee agreement, SB/RH and the direct and indirect wholly-owned material domestic subsidiaries of SBI have guaranteed SBI’s obligations under the AmendedRestated Credit Agreement and related loan documents. Pursuant to the Security Agreement,(the "Credit Agreement") dated as of June 23, 2015, SBI30, 2020. The second amendment includes certain modified terms from the existing Credit Agreement to provide for an alternate rate of interest to the Eurocurrency Rate applicable to Revolving Loans and such subsidiary guarantors have pledged substantially allLetters of their respective assetsCredit in Euro and Pounds Sterling. Pursuant to secure such obligations and, in addition, SB/RH has pledged the capital stock of SBI to secure such obligations.second amendment, Sterling Overnight Index
1921
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 10 - DEBT (continued)
SubjectAverage ("SONIA") replaced LIBO Rate as a reference rate for Revolving Loans and Letters of Credit denominated in Pounds Sterling and Euro Interbank Offered Rate ("EURIBOR") replaced LIBO Rate as a reference rate for Revolving Loans and Letters of Credit denominated in Euro. The Company currently has no borrowing under the Revolver Facility denominated in Euro or Pounds Sterling.
On February 3, 2022, the Company entered into a third amendment to certain mandatory prepayment events, the Term LoanCredit Agreement. The third amendment 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. See Note 3 - Acquisitions for further discussion on the Tristar Business acquisition. Borrowings under the incremental capacity are subject to the same terms and conditions of the existing Revolver Facility, with a maturity date of June 30, 2025, other than a difference in borrowing rate which is subject to repayment accordingSOFR plus margin ranging from 1.75% to scheduled amortizations,2.75%, 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 final paymenteffective date of amount outstanding, plus accruedthe third amendment and unpaid interest, due at maturity.an additional 25 basis points on each 90 day anniversary of such date. The Amended Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on the Company and its restricted subsidiaries’ ability to incur indebtedness, create liens, make investments, pay dividends or make certain other distributions, and merge or consolidate or sell assets, in each caseSOFR is subject to certain exceptions set forth in the Amended Credit Agreement.
3.875% Notes
On March 3, 2021, SBI issued $500.0 million aggregate principal amount of 3.875% Senior Notes due 2031 (the "3.875% Notes") and entered into the indenture governing the 3.875% Notes (the “2031 Indenture”). The 3.875% Notes mature on March 15, 2031 and are unconditionally guaranteed, on a senior unsecured basis, by SB/RH and by SBI’s existing and future domestic subsidiaries that guarantee indebtedness under the Amended Credit Agreement.
SBI may redeem all or part of the 3.875% Notes at any time on or after March 15, 2026 at certain fixed redemption prices as set forth in the 2031 Indenture. In addition, prior to March 15, 2026, SBI may redeem the Notes at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, plus accrued and unpaid interest. Before March 15, 2024, the Company may redeem up to 35% of the aggregate principal notes with cash equal to the net proceeds that SBI raises in equity offerings at specified redemption price as set forth in the 2031 Indenture. Further, the 2031 Indenture requires SBI to make an offer to repurchase all outstanding 3.875% Notes upon the occurrence of a change of control of SBI, as defined in the 2031 Indenture.
The 2031 Indenture contains covenants limiting, among other things, the ability of the Company and its direct and indirect restricted subsidiaries to incur additional indebtedness, create liens, engage in sale-leaseback transactions, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, make investments or certain other restricted payments, sell assets, issue or sell stock of restricted subsidiaries, enter in transactions with affiliates, or effect a merger or consolidation.
In addition, the 2031 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or an acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency.
0.50% floor. The Company recorded $7.6incurred $7.1 million of fees in connection with the offering of the 3.875% Notes,third amendment, which have been capitalized as debt issuance costs and are beingwill be amortized over the remaining lifeterm of the 3.875% Notes.Credit Agreement.
NOTE 11 – LEASESDERIVATIVES
Derivative financial instruments are used by the Company principally in the management of its foreign currency exchange rates. The Company has leases primarily pertaining to manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery, computer, and office equipment that expire at various times through February 28, 2047.We have identified embedded operating leases within certain logistic agreementsdoes not hold or issue derivative financial instruments for warehouses and information technology services arrangements and recognized assets identified in the arrangements as part of operating right-of-use ("ROU") assets on the Company’s Condensed Consolidated Statements of Financial Position as of July 4, 2021 and September 30, 2020. We elected to exclude certain supply agreements that contain embedded leases for manufacturing facilities or dedicated manufacturing lines from our ROU asset and liability calculation based on the insignificant impact to our financial statements.
The following is a summary of the leases recognized on the Company’s Condensed Consolidated Statements of Financial Position as of July 4, 2021 and September 30, 2020:
(in millions)Line ItemJuly 4, 2021September 30, 2020
Assets
OperatingOperating lease assets$118.3 $103.8 
FinanceProperty, plant and equipment, net127.5 136.3 
Total leased assets$245.8 $240.1 
Liabilities
Current
OperatingOther current liabilities$25.8 $22.4 
FinanceCurrent portion of long-term debt11.7 12.1 
Long-term
OperatingLong-term operating lease liabilities99.7 88.8 
FinanceLong-term debt, net of current portion142.2 148.4 
Total lease liabilities$279.4 $271.7 
As of July 4, 2021, the Company had $12.1 million of commitments related to leases executed that have not yet commenced.
The Company records its operating lease expense and amortization of finance lease ROU assets within Cost of Goods Sold or Operating Expenses in the Condensed Consolidated Statements of Income depending on the nature and use of the underlying asset. The Company records its finance interest cost within interest expense in the Condensed Consolidated Statements of Income.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 11 – LEASES (continued)
The components of lease costs recognized in the Condensed Consolidated Statements of Income for the three and nine month periods ended July 4, 2021 and June 28, 2020 are as follows:
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Operating lease cost$8.7 $6.2 $23.6 $18.8 
Finance lease cost
Amortization of leased assets3.2 3.7 10.7 10.7 
Interest on lease liability2.2 2.3 6.6 6.7 
Variable lease cost3.6 3.3 9.5 9.1 
Total lease cost$17.7 $15.5 $50.4 $45.3 
During the three month periods ended July 4, 2021 and June 28, 2020, the Company recognized income attributable to leases and sub-leases of $0.6 million. During the nine month periods ended July 4, 2021 and June 28, 2020, the Company recognized income attributable to leases and sub-leases of $1.7 million and $1.6 million, respectively. Income from leases and sub-leases is recognized as Other Non-Operating Income in the Condensed Consolidated Statements of Income.
The following is a summary of the Company’s cash paid for amounts included in the measurement of lease liabilities recognized in the Condensed Consolidated Statement of Cash Flow, including supplemental non-cash activity related to operating leases, for the three and nine month periods ending July 4, 2021 and June 28, 2020:
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Operating cash flow from operating leases$9.9 $5.5 $24.1 $17.3 
Operating cash flows from finance leases2.2 2.2 6.7 6.8 
Financing cash flows from finance leases3.1 3.8 8.8 10.7 
Supplemental non-cash flow disclosure
Acquisition of operating lease asset through lease obligations21.9 2.2 32.9 6.4 
The following is a summary of weighted-average lease term and discount rate at July 4, 2021 and September 30, 2020:
July 4, 2021September 30, 2020
Weighted average remaining lease term
Operating leases6.4 years6.6 years
Finance leases15.2 years15.6 years
Weighted average discount rate
Operating leases4.3 %4.7 %
Finance leases5.7 %5.6 %
At July 4, 2021, future lease payments under operating and finance leases were as follows:
(in millions)Finance LeasesOperating Leases
2021 remaining balance$5.3 $8.4 
202218.6 29.3 
202317.6 27.1 
202417.1 18.3 
202515.3 14.9 
Thereafter167.2 46.8 
Total lease payments241.1 144.8 
Amount representing interest(87.2)(19.3)
Total minimum lease payments$153.9 $125.5 
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 12 - DERIVATIVEStrading purposes.
Cash Flow Hedges
Commodity Swaps. The Company is exposed to risk from fluctuating prices for raw materials, specifically zinc and brass used in its manufacturing processes of its HHI segment. The Company hedges a portion of the risk associated with the purchase of these materials using commodity swaps. The hedge contracts are designated as cash flow hedges with the fair value changes recorded in AOCI and as a hedge asset or liability, as applicable. The unrecognized changes in fair value of the hedge contracts are reclassified from AOCI into earnings when the hedged purchase of raw materials also affects earnings. The swaps effectively fix the floating price on a specified quantity of raw materials through a specified date. At July 4, 2021, the Company had a series of brass and zinc swap contracts outstanding through November 30, 2022. The derivative net gain estimated to be reclassified from AOCI into earnings over the next 12 months is $0.8 million, net of tax.
The Company had the following commodity swap contracts outstanding as of July 4, 2021 and September 30, 2020:
July 4, 2021September 30, 2020
(in millions, except Notional)NotionalContract ValueNotionalContract Value
Brass swap contracts795.4  Metric Tons$5.1 949.0  Metric Tons$4.4 
Zinc swap contracts2,947.5  Metric Tons$8.2 1,552.0  Metric Tons$3.4 
Foreign exchange contracts.The Company periodically enters into forward foreign exchange contracts to hedge a portion of the risk from forecasted foreign currency denominated third party and intercompany sales or payments. These obligations generally require the Company to exchange foreign currencies for U.S. Dollars, Euros, Pound Sterling, Canadian Dollars, Australian Dollars, or Japanese Yen. These foreign exchange contracts are cash flow hedges of fluctuating foreign exchange related to salesinventory purchases or the sale of product or inventory purchases.product. Until the salepurchase or purchasesale is recognized, the fair value of the related hedge is recorded in AOCIAccumulated Other Comprehensive Income ("AOCI") and as a derivative hedge asset or liability, as applicable. At the time the sale or purchase is recognized, the fair value of the related hedge is reclassified as an adjustment to Net Sales or purchase price variance in Cost of Goods Sold or Net Sales on the Condensed Consolidated Statements of Income. At July 4, 2021,April 3, 2022, the Company had a series of foreign exchange derivative contracts outstanding through DecemberSeptember 29, 2022.2023. The derivative net lossgain estimated to be reclassified from AOCI into earnings over the next 12 months is $3.0$5.2 million, net of tax. At July 4, 2021April 3, 2022 and September 30, 2020,2021, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $322.2$276.7 million and $273.4$279.9 million, respectively.
The following table summarizes the impact of designated cash flow hedges and the pre-tax gain (loss) recognized in the Condensed Consolidated Statements of Income for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021, and June 28, 2020, respectively:
For the three month period ended July 4, 2021
(in millions)
Gain (Loss)
in OCI		Reclassified to Continuing Operations
Line ItemGain (Loss)
Commodity swaps$0.5 Cost of goods sold$0.7 
Gain in OCIReclassified Gain (Loss) to Continuing Operations
For the three month periods ended (in millions)For the three month periods ended (in millions)April 3, 2022April 4, 2021Line ItemApril 3, 2022April 4, 2021
Foreign exchange contractsForeign exchange contracts0 Net sales0.1 Foreign exchange contracts$0.1 $0.1 Net sales$— $0.1 
Foreign exchange contractsForeign exchange contracts(1.5)Cost of goods sold(3.6)Foreign exchange contracts4.7 5.2 Cost of goods sold1.5 (3.2)
TotalTotal$(1.0)$(2.8)Total$4.8 $5.3 $1.5 $(3.1)

For the three month period ended June 28, 2020
(in millions)
Gain (Loss)
in OCI		Reclassified to Continuing Operations
Line ItemGain (Loss)
Commodity swaps$0.7 Cost of goods sold$(0.2)
Foreign exchange contracts0 Net sales(0.1)
Foreign exchange contracts(2.8)Cost of goods sold2.3 
Total$(2.1)$2.0 

For the nine month period ended July 4, 2021
(in millions)
Gain (Loss)
in OCI		Reclassified to Continuing Operations
Line ItemGain (Loss)
Commodity swaps$1.9 Cost of goods sold$1.8 
Foreign exchange contracts0.1 Net sales0.1 
Foreign exchange contracts(9.6)Cost of goods sold(10.3)
Total$(7.6)$(8.4)

For the nine month period ended June 28, 2020
(in millions)
Gain (Loss)
in OCI		Reclassified to Continuing Operations
Line ItemGain (Loss)
Commodity swaps$0 Cost of goods sold$(0.3)
Foreign exchange contracts(0.1)Net sales(0.1)
Foreign exchange contracts(0.4)Cost of goods sold6.7 
Total$(0.5)$6.3 
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 12 – DERIVATIVES (continued)
Gain (Loss) in OCIReclassified Gain (Loss) to Continuing Operations
For the six month periods ended (in millions)April 3, 2022April 4, 2021Line ItemApril 3, 2022April 4, 2021
Foreign exchange contracts$0.1 $0.1 Net sales$— $— 
Foreign exchange contracts3.9 (8.1)Cost of goods sold3.6 (5.8)
Total$4.0 $(8.0)$3.6 $(5.8)
Derivative Contracts Not Designated as Hedges for Accounting Purposes
Foreign exchange contracts.The Company periodically enters into foreign exchange forward contracts to economically hedge a portion of the risk from third party and intercompany payments resulting from existing obligations. These obligations generally require the Company to exchange foreign currencies for U.S. Dollars, Canadian Dollars, Euros, Pounds Sterling, Taiwanese Dollars, Philippine Pesos, Australian Dollars, Polish Zlotys, Mexican Pesos, or Japanese Yen, among others. These foreign exchange contracts are fair value hedges of a related liability or asset recorded in the accompanying Condensed Consolidated Statements of Financial Position. The gain or lossgain on the derivative hedge contracts is recorded in earnings as an offset to the change in value of the related liability or asset at each period end. At July 4, 2021,April 3, 2022, the Company had a series of forward exchange contracts outstanding through September 30, 2021.July 20, 2022. At July 4, 2021April 3, 2022 and September 30, 2020,2021, the Company had $314.5$109.8 million and $802.5$198.4 million, respectively, of notional value of such foreign exchange derivative contracts outstanding.
The following summarizes the impact of derivative instruments on the accompanying Condensed Consolidated Statements of Income for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021, and June 28, 2020, pre-tax:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)Line ItemJuly 4, 2021June 28, 2020July 4, 2021June 28, 2020(in millions)Line ItemApril 3, 2022April 4, 2021April 3, 2022April 4, 2021
Foreign exchange contractsForeign exchange contractsOther non-operating expense (income)$1.8 $1.2 $(5.5)$(1.0)Foreign exchange contractsOther non-operating expense (income)$0.2 $(4.6)$(0.9)$(8.5)
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 11 – DERIVATIVES (continued)
Fair Value of Derivative Instruments
The fair value of the Company’s outstanding derivative contracts recorded in the Condensed Consolidated Statements of Financial Position is as follows:
(in millions)Line ItemJuly 4, 2021September 30, 2020
Derivative Assets
Commodity swaps - designated as hedgeOther receivables$1.3 $0.7 
Commodity swaps - designated as hedgeDeferred charges and other0 0.1 
Foreign exchange contracts - designated as hedgeOther receivables1.3 0 
Foreign exchange contracts - designated as hedgeDeferred charges and other0.7 0 
Foreign exchange contracts - not designated as hedgeOther receivables0.5 0.4 
Total Derivative Assets$3.8 $1.2 
Derivative Liabilities
Commodity swaps - designated as hedgeAccounts payable$0.2 $0 
Commodity swaps - designated as hedgeOther long term liabilities0.1 0 
Foreign exchange contracts - designated as hedgeAccounts payable5.2 3.8 
Foreign exchange contracts - designated as hedgeOther long term liabilities0.1 0.3 
Foreign exchange contracts - not designated as hedgeAccounts payable0.3 10.1 
Total Derivative Liabilities$5.9 $14.2 
(in millions)Line ItemApril 3, 2022September 30, 2021
Derivative Assets
Foreign exchange contracts – designated as hedgeOther receivables$7.4 $5.2 
Foreign exchange contracts – designated as hedgeDeferred charges and other0.1 0.9 
Foreign exchange contracts – not designated as hedgeOther receivables0.5 0.7 
Total Derivative Assets$8.0 $6.8 
Derivative Liabilities
Foreign exchange contracts – designated as hedgeAccounts payable$0.4 $0.1 
Foreign exchange contracts – designated as hedgeOther long term liabilities0.1 — 
Foreign exchange contracts – not designated as hedgeAccounts payable1.2 2.4 
Total Derivative Liabilities$1.7 $2.5 
The Company is exposed to the risk of default by the counterparties with which it transacts and generally does not require collateral or other security to support financial instruments subject to credit risk. The Company monitors counterparty credit risk on an individual basis by periodically assessing each counterparty’s credit rating exposure. The maximum loss due to credit risk equals the fair value of the gross asset derivatives that are concentrated with certain domestic and foreign financial institution counterparties. The Company considers these exposures when measuring its credit reserve on its derivative assets, which were not significant as of July 4, 2021.April 3, 2022.
The Company’s standard contracts do not contain credit risk related contingent features whereby the Company would be required to post additional cash collateral because of a credit event. However, the Company is typically required to post collateral in the normal course of business to offset its liability positions. As of July 4, 2021,April 3, 2022, and September 30, 2020,2021, there was 0no cash collateral outstanding and 0no posted standby letters of credit related to such liability positions.
Net Investment Hedge
SBI has €425.0 million aggregate principle amount of 4.00% Notes designated as a non-derivative economic hedge, or net investment hedge, of the translation of the Company’s net investments in Euro denominated subsidiaries at the time of issuance. The hedge effectiveness is measured on the beginning balance of the net investment and re-designated every three months. Any gains and losses attributable to the translation of the Euro denominated debt designated as net investment hedge are recognized as a component of foreign currency translation within AOCI, and gains and losses attributable to the translation of the undesignated portion are recognized as foreign currency translation gains or losses within Other Non-Operating Expense (Income). As of July 4, 2021,April 3, 2022, the full principal amount was designated as a net investment hedge and considered fully effective. The following summarizes the gain (loss) from the net investment hedge recognized in Other Comprehensive Income for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021, and June 28, 2020, pre-tax:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
Gain (loss) in OCI (in millions)Gain (loss) in OCI (in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020Gain (loss) in OCI (in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net investment hedgeNet investment hedge$(3.4)$(7.9)$(4.8)$(10.6)Net investment hedge$11.9 $20.1 $22.5 $(1.4)
During the three and nine month periods ended July 4, 2021, the Company did 0t recognize any pre-tax gain (loss) in earnings related to the translation of the undesignated portion of debt obligation. During the three month period ended June 28, 2020, the Company did 0t recognize any pre-tax gain (loss) in earnings related to the translation of the undesignated portion of debt obligation. The pre-tax loss related to the translation of the undesignated portion of the debt obligation recognized in earnings was $1.2 million for the nine month period ended June 28, 2020. Net gains or losses from the net investment hedge are reclassified from AOCI into earnings upon a liquidation event or deconsolidation of Euro denominated subsidiaries.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 13 -12 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has not changed the valuation techniques used in measuring the fair value of any financial assets and liabilities during the year. The carrying value and estimated fair value of financial and derivative instruments as of July 4, 2021April 3, 2022 and September 30, 20202021 according to the fair value hierarchy are as follows.follows:
July 4, 2021September 30, 2020
(in millions)Level 1Level 2Level 3Fair ValueCarrying
Amount		Level 1Level 2Level 3Fair ValueCarrying
Amount
Investments$0 $0 $0 $0 $0 $66.9 $0 $0 $66.9 $0 
Derivative Assets0 3.8 0 3.8 0 0 1.2 0 1.2 0 
Derivative Liabilities0 5.9 0 5.9 0 0 14.2 0 14.2 0 
Debt - SBH0 2,767.1 0 2,767.1 2,668.8 0 2,595.4 0 2,595.4 2,476.3 
Debt - SB/RH0 2,767.1 0 2,767.1 2,668.8 0 2,595.4 0 2,595.4 2,476.3 
Investments consist of our investment in Energizer common stock, which is valued at quoted market prices for identical instruments in an active market.  Unrealized income (loss) from changes in fair value, realized income (loss) from sale of equity investments, plus dividend income from equity investments, are recognized as components of Other Non-Operating Income, Net on the Condensed Consolidated Statements of Income.  The Company sold its remaining investment in Energizer common stock in January 2021. During the nine month period ended July 4, 2021, the Company sold 1.7 million shares of Energizer common stock for proceeds of $73.1 million. During the three and nine month periods ended June 28, 2020, the Company sold 1.1 million and 2.1 million shares of Energizer common stock for proceeds of $51.1 million and $79.7 million, respectively. As of July 4, 2021, the company held 0 shares of Energizer common stock. 
The following is a summary of income from equity investments recognized as a component of Other Non-Operating Income in the Company's Condensed Consolidated Statements of Income:
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Unrealized gain on equity investments held$0 $44.5 $0 $5.3 
Realized gain (loss) on equity investments sold0 15.6 6.9 (13.5)
Gain (loss) on equity investments0 60.1 6.9 (8.2)
Dividend income from equity investments0 1.2 0.2 4.4 
Gain (loss) from equity investments$0 $61.3 $7.1 $(3.8)
April 3, 2022September 30, 2021
(in millions)Level 1Level 2Level 3Fair ValueCarrying
Amount		Level 1Level 2Level 3Fair ValueCarrying
Amount
Derivative Assets$— $8.0 $— $8.0 $8.0 $— $6.8 $— $6.8 $6.8 
Derivative Liabilities— 1.7 — 1.7 1.7 — 2.5 — 2.5 2.5 
Debt— 3,198.4 — 3,198.4 3,248.4 — 2,628.2 — 2,628.2 2,506.3 
The fair value measurements of the Company’s debt represent non-active market exchanged traded securities which are valued at quoted input prices that are directly observable or indirectly observable through corroboration with observable market data. See Note 10 – Debt for additional detail on outstanding debt of SBH and SB/RH. See Note 1211 – Derivatives for additional detail on derivative assets and liabilities.
The carrying value of cash and cash equivalents, receivables, accounts payable and short term debt approximate fair value based on the short-term nature of these assets and liabilities. Goodwill, intangible assets and other long-lived assets are tested annually or more frequently if an event occurs that indicates an impairment loss may have been incurred using fair value measurements with unobservable inputs (Level 3).
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 14 - EMPLOYEE BENEFIT PLANS
The net periodic benefit cost for defined benefit plans for the three and nine month periods ended July 4, 2021 and June 28, 2020 are as follows:
U.S. PlansNon U.S. Plans
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Three Month Periods Ended
Service cost$0.1 $0.2 $0.5 $0.6 
Interest cost0.5 0.5 0.6 0.6 
Expected return on assets(0.9)(1.0)(1.0)(0.9)
Recognized net actuarial loss0.3 0.2 0.8 0.8 
Net periodic benefit cost$0 $(0.1)$0.9 $1.1 
Nine Month Periods Ended
Service cost$0.4 $0.5 $1.6 $1.7 
Interest cost1.3 1.6 1.8 1.7 
Expected return on assets(2.8)(3.1)(2.9)(2.8)
Settlement and curtailment0 0.9 0 0 
Recognized net actuarial loss1.1 0.7 2.2 2.4 
Net periodic benefit cost$0 $0.6 $2.7 $3.0 
Weighted average assumptions
Discount rate2.46%3.07%0.50 - 6.90%0.75 - 7.70%
Expected return on plan assets6.00%6.50%0.50 - 3.40%0.75 - 3.40%
Rate of compensation increaseN/AN/A2.25 - 6.00%2.25 - 6.00%
Contributions to our pension and defined benefit plans, including discretionary amounts, forDuring the three month periodsperiod ended July 4,January 3, 2021, the Company held equity investments in Energizer common stock valued at quoted market prices, recognizing unrealized income from changes in fair value and June 28, 2020 were $1.7 million and $0.8 million, respectively; and forrealized income from the nine month periods ended July 4, 2021 and June 28, 2020, were $6.5 million and $2.3 million, respectively.sale of its investment, plus dividend income on the Condensed Consolidated Statements of Income. The Company sold its remaining investment in Energizer common stock in January 2021.
The following is a summary of income recognized as a component of Other Non-Operating Income in the Company's Condensed Consolidated Statements of Income:
Three Month Period EndedSix Month Period Ended
(in millions)April 4, 2021April 4, 2021
Realized gain on equity investments sold$0.9 $6.9 
Dividend income from equity investments— 0.2 
Gain from equity investments$0.9 $7.1 
NOTE 1513 – SHAREHOLDER’SSHAREHOLDERS' EQUITY
Share Repurchases
The Company has a share repurchase program that is executed through purchases made from time to time either in the open market or otherwise. On May 4, 2021, the Board of Directors approved a $1 billion common stock repurchase program and terminated the previously approved share repurchase program. The authorization is effective for 36 months. As part of theour share repurchase programs, the Company purchased treasury shares in open market purchases at market fair value, private purchases from Company employees, significant shareholders or beneficial interest owners at fair value and through an accelerated share repurchase (“ASR”) agreement with a third-party financial institution.
On November 18, 2019, SBH entered into an ASR to repurchase $125.0 million of the Company’s common stock. At inception, pursuant to the agreement, the Company paid $125.0 million to the financial institution using cash on hand and took delivery of 1.7 million shares which represented approximately 85% of the total shares the Company expected to receive based on the market price at the time of the initial delivery. The transaction was accounted for as an equity transaction. The fair value of shares received initially of $106.3 million was recorded as a treasury stock transaction, with the remainder of $18.7 million recorded as a reduction to additional paid-in capital. Upon initial receipt of the shares, there was an immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share. On February 24, 2020, the Company closed and settled the ASR resulting in an additional delivery of 0.3 million shares, with a fair value of $18.5 million. The total number of shares repurchased under the ASR program during the year ended September 30, 2020, was 2.0 million at an average cost per share of $61.59, based on the volume-weighted average share price of the Company’s common stock during the calculation period of the ASR program, less the applicable contractual discount.value.
The following summarizes the activity of common stock repurchases under the program for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020:2021:
July 4, 2021June 28, 2020April 3, 2022April 4, 2021
Three Month Periods Ended
(in millions except per share data)
Three Month Periods Ended
(in millions except per share data)
Number of
Shares
Repurchased
Average
Price
Per Share
Amount
Number of
Shares
Repurchased
Average
Price
Per Share
Amount
Three Month Periods Ended
(in millions except per share data)
Number of
Shares
Repurchased
Average
Price
Per Share
Amount
Number of
Shares
Repurchased
Average
Price
Per Share
Amount
Open Market PurchasesOpen Market Purchases0.1 $88.22 $10.2 0 $0 $0 Open Market Purchases0.2 $96.90 $24.0 — $— $— 
Total Purchases0.1 $88.22 $10.2 0 $0 $0 

July 4, 2021June 28, 2020April 3, 2022April 4, 2021
Nine Month Periods Ended
(in millions except per share data)
Number of
Shares
Repurchased		Average
Price
Per Share		AmountNumber of
Shares
Repurchased		Average
Price
Per Share		Amount
Six Month Periods Ended
(in millions except per share data)
Six Month Periods Ended
(in millions except per share data)
Number of
Shares
Repurchased		Average
Price
Per Share		AmountNumber of
Shares
Repurchased		Average
Price
Per Share		Amount
Open Market PurchasesOpen Market Purchases0.1 $88.22 $10.2 4.0 $56.97 $230.6 Open Market Purchases1.3 $97.34 $134.0 — $— $— 
Private PurchasesPrivate Purchases0.6 65.27 42.3 0.2 62.30 9.2 Private Purchases— — — 0.6 65.27 42.3 
ASR0 0 0 2.0 61.47 124.8 
Total PurchasesTotal Purchases0.7 $68.73 $52.5 6.2 $58.57 $364.6 Total Purchases1.3 $97.34 $134.0 0.6 $65.27 $42.3 
During the fourth quarter ended September 30, 2021, SBH entered into a $150.0 million rule 10b5-1 repurchase plan to facilitate daily market share repurchases through September 16, 2022, until the cap is reached or until the plan is terminated. The Company completed share repurchases of $150.0 million under the rule 10b5-1 repurchase plan during the three month period ended April 3, 2022.

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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 16 -14 – SHARE BASED COMPENSATION
Share based compensation expense is recognized as General and Administrative Expenses on the Condensed Consolidated Statements of Income. The following is a summary of share based compensation expense for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 for SBH and SB/RH, respectively.
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
SBHSBH$7.5 $12.8 $23.5 $38.8 SBH$6.6 $7.2 $12.2 $13.7 
SB/RHSB/RH$6.9 $12.5 $22.4 $37.9 SB/RH$6.2 $6.8 $11.8 $13.1 
The Company recognizes share based compensation expense from the issuance of its Restricted Stock Units (“RSUs”), primarily under its Long-Term Incentive Plan ("LTIP"), based on the fair value of the awards, as determined by the market price of the Company’s shares of common stock on the designated grant date and recognized on a straight-line basis over the requisite service period of the awards. Certain RSUs aregranted under the LTIP include time-based grants thatand performance based grants. Time-based RSU awards provide for either 3-yearthree year cliff vesting or graded vesting depending upon the vesting conditions and forfeitures provided by the grant. Certain RSUs are performance-basedPerformance-based RSU awards that are dependent upon achieving specified financial metrics (adjusted EBITDA, return on adjusted equity, and/or adjusted free cash flow) over a designated periodby the end of time.the three year vesting period. Additionally, the Company regularly issues individual RSU awards under its equity plan to its Board members and individual employees for recognition, incentive, or retention purposes, when needed, which are primarily conditional upon time-based service conditions, valued based on the fair value of the awards as determined by the market price of the Company's share of common stock on the designated grant price date and includedrecognized as a component of share-based compensation.
Incompensation on a straight-line basis over the prior year, the Company provided for a portion of its annual management incentive compensation plan ("MIP") to be paid in common stockrequisite service period of the award. The Company in lieu of cash payment. Duringregularly issues annual grants under its LTIP during the fourthfirst quarter of the fiscal year ended September 30, 2020, the Company changed its MIP payout policy that previously provided for the issuance of stock for a designated pool of recipients to be fully funded through cash distribution with no stock issuance. Share based compensation expense associated with the annual MIP for the three and nine month periods ended June 28, 2020 was $4.3 million and $12.9 million, respectively. There was 0 portion of annual MIP recognized in the share based compensation expense for the three and nine month periods ended July 4, 2021.year.
The following is a summary of the activity in the Company RSUsRSU grants issued during the ninesix month period ended July 4, 2021:April 3, 2022:
SBHSB/RHSBHSB/RH
(in millions, except per share data)(in millions, except per share data)UnitsWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date		UnitsWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date		(in millions, except per share data)UnitsWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date		UnitsWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date
Time-based grantsTime-based grantsTime-based grants
Vesting in less than 24 months0.1 $75.13 $8.3 0.1 $75.08 $6.6 
Vesting in more than 24 months0.1 74.56 7.8 0.1 74.56 7.8 
Vesting in less than 12 monthsVesting in less than 12 months0.03 $96.83 $3.1 0.02 $96.74 $2.0 
Vesting in more than 12 monthsVesting in more than 12 months0.08 96.87 7.7 0.08 96.80 7.7 
Total time-based grantsTotal time-based grants0.2 $74.86 $16.1 0.2 $74.80 $14.4 Total time-based grants0.11 $96.86 $10.8 0.10 $96.79 $9.7 
Performance-based grantsPerformance-based grantsPerformance-based grants0.17 $96.95 $16.7 0.17 $96.95 $16.7 
Vesting in more than 24 months0.3 $74.53 $22.6 0.3 $74.53 $22.6 
Total performance-based grants0.3 $74.53 $22.6 0.3 $74.53 $22.6 
Total grantsTotal grants0.5 $74.67 $38.7 0.5 $74.64 $37.0 Total grants0.28 $96.91 $27.5 0.27 $96.89 $26.4 
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)

SBHSB/RH
(in millions, except per share data)SharesWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date		SharesWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date
At September 30, 20201.4 $56.41 $79.3 1.4 $56.33 $77.7 
Granted0.5 74.67 38.7 0.5 74.64 37.0 
Forfeited(0.1)59.33 (3.4)(0.1)59.33 (3.4)
Vested(0.3)53.51 (17.8)(0.3)52.80 (16.1)
At July 4, 20211.5 $63.09 $96.8 1.5 $62.93 $95.2 
NOTE 15 – ACCUMULATED OTHER COMPREHENSIVE INCOME
The remaining unrecognized pre-tax compensation costchange in the components of accumulated other comprehensive income (loss), net of taxes, for SBHthe six month periods ended April 3, 2022 and SB/RH at JulyApril 4, 2021 was $50.3 million and $49.8 million, respectively.as follows:
(in millions)Foreign Currency TranslationDerivative InstrumentsDefined Benefit PensionTotal
Balance at September 30, 2021$(194.8)$6.4 $(46.9)$(235.3)
Other comprehensive income before reclassification6.8 1.2 0.6 8.6 
Net reclassification for (gain) loss to income from continuing operations— (2.1)1.0 (1.1)
Net reclassification for gain to income from discontinued operations— (0.5)— (0.5)
Other comprehensive income (loss) before tax6.8 (1.4)1.6 7.0 
Deferred tax effect(4.5)4.5 (2.9)(2.9)
Other comprehensive income (loss), net of tax2.3 3.1 (1.3)4.1 
Less: other comprehensive income from discontinued operations attributable to non-controlling interest0.1 — — 0.1 
Other comprehensive income (loss) attributable to controlling interest2.2 3.1 (1.3)4.0 
Balance at January 2, 2022(192.6)9.5 (48.2)(231.3)
Other comprehensive (loss) income before reclassification(1.6)6.4 1.0 5.8 
Net reclassification for (gain) loss to income from continuing operations— (1.5)1.0 (0.5)
Net reclassification for gain to income from discontinued operations— (0.7)— (0.7)
Other comprehensive (loss) income before tax(1.6)4.2 2.0 4.6 
Deferred tax effect(3.1)(1.0)(0.6)(4.7)
Other comprehensive (loss) income, net of tax(4.7)3.2 1.4 (0.1)
Less: other comprehensive loss from continuing operations attributable to non-controlling interest(0.1)— — (0.1)
Other comprehensive (loss) income attributable to controlling interest(4.6)3.2 1.4 — 
Balance at April 3, 2022$(197.2)$12.7 $(46.8)$(231.3)
(in millions)Foreign Currency TranslationDerivative InstrumentsDefined Benefit PensionTotal
Balance at September 30, 2020$(226.6)$3.6 $(61.7)$(284.7)
Other comprehensive income (loss) income before reclassification19.4 (12.4)(2.2)4.8 
Net reclassification for loss to income from continuing operations— 2.6 1.1 3.7 
Net reclassification for loss to income from discontinued operations— 0.1 — 0.1 
Other comprehensive income (loss) before tax19.4 (9.7)(1.1)8.6 
Deferred tax effect5.3 2.5 0.2 8.0 
Other comprehensive income (loss), net of tax24.7 (7.2)(0.9)16.6 
Less: other comprehensive income from continuing operations attributable to non-controlling interest0.1 — — 0.1 
Less: other comprehensive income from discontinued operations attributable to non-controlling interest0.3 — — 0.3 
Other comprehensive income (loss) attributable to controlling interest24.3 (7.2)(0.9)16.2 
Balance at January 3, 2021(202.3)(3.6)(62.6)(268.5)
Other comprehensive income before reclassification22.2 5.8 0.9 28.9 
Net reclassification for loss to income from continuing operations— 3.1 1.1 4.2 
Net reclassification for gain to income from discontinued operations— (0.1)— (0.1)
Other comprehensive income before tax22.2 8.8 2.0 33.0 
Deferred tax effect(5.0)(2.4)(0.6)(8.0)
Other comprehensive income, net of tax17.2 6.4 1.4 25.0 
Less: other comprehensive loss from continuing operations attributable to non-controlling interest(0.1)— — (0.1)
Other comprehensive income attributable to controlling interest17.3 6.4 1.4 25.1 
Balance at April 4, 2021$(185.0)$2.8 $(61.2)$(243.4)
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 17 -16 – INCOME TAXES
The effective tax rate for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 was as follows:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
Effective tax rateEffective tax rateJuly 4, 2021June 28, 2020July 4, 2021June 28, 2020Effective tax rateApril 3, 2022April 4, 2021April 3, 2022April 4, 2021
SBHSBH43.6 %28.0 %30.2 %46.4 %SBH21.3 %13.3 %29.2 %(75.2)%
SB/RHSB/RH43.3 %30.3 %30.2 %285.4 %SB/RH21.1 %10.2 %29.1 %(58.7)%
The estimated annual effective tax rate applied to the three and ninesix month periods ended July 4, 2021April 3, 2022 differs from the US federal statutory rate of 21% principally due to income earned outside the U.S. that is subject to U.S. tax, including the U.S. tax on global intangible low taxed income (“GILTI”), certain nondeductible expenses, foreign rates that differ from the US federal statutory rate, and state income taxes. The Company has U.S. net operating loss carryforwards ("NOL"), which do not allow it to take advantage of the foreign-derived intangible income (“FDII”) deduction. The Company’s federal effective tax rate on GILTI is therefore 21%.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
During the threesix month period ended July 4, 2021,April 3, 2022, the Company recorded $7.6a $3.2 million of deferred tax expensebenefit as an adjustment to the estimated benefit recorded in Fiscal 2021 for the impact on net United Kingdom deferred tax liabilities from an increase in the United Kingdom’s future tax rate.
On November 20, 2020, the U.S. Treasury and the Internal Revenue Service issued Final Regulations (“Regulations”)issued under Internal Revenue Code Sections 245A andSection 951A relatedrelating to the treatment of previously disqualified basisincome that is subject to a high rate of tax under the GILTI regime. The Company completed and filed the amended return implementing these Regulations are effective for Fiscal 2022, butduring the Company can elect to apply them to Fiscal 2018 through Fiscal 2021.six month period ending April 3, 2022. The Company expects to satisfy the requirements necessary to apply the Regulations retroactively and has therefore estimated andalso recorded a $2.5 million tax benefit of $5.3 million forduring the impact on years prior to Fiscal 2021 in the ninesix month period ended July 4, 2021.April 3, 2022 for windfalls associated with the vesting of share compensation during the year. The Company also expectsgenerated a pretax loss on continuing operations year to applydate, so additional discrete tax benefits result in an increase to the Regulations to Fiscal 2021 and has included the impact in the estimated annual effective tax rate.
As of July 4, 2021,April 3, 2022, and September 30, 2020,2021, there was $32.4 million and $1.8 million of income tax receivable and $8.0 million of income taxes payable, respectively, with its parent company, on the SB/RH Condensed Consolidated Statements of Financial Position, payable to its parent company, calculated as if SB/RH were a separate taxpayer.
NOTE 18 – RELATED PARTY TRANSACTIONS
Energizer Holdings, Inc.
Effective as of the close of the GBL and GAC divestitures during the year ended September 30, 2019, the Company and Energizer entered into a series of TSAs and reverse TSAs that support various shared back office administrative functions including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement; to support both the transferred GBL operations and the continuing operations of the Company, respectively, within the various regions in which they operate. Charges associated with TSAs and reverse TSAs are recognized as bundled service costs under a fixed fee structure by the respective service or function and geographic location and one-time pass-through charges, including warehousing, freight, among others, to and from Energizer that settle on a net basis between the two parties. Charges to Energizer for TSA services are recognized as a reduction of the respective operating costs incurred by the Company and recognized as a component of operating expense or cost of goods sold depending upon the functions being supported by the Company. Charges from Energizer for reverse TSA services are recognized as operating expenses or cost of goods sold depending upon the functions being supported by Energizer. Effective January 2, 2020, Energizer closed its divestiture of the European based Varta® consumer battery business in the EMEA region to Varta AG, which also transferred TSAs and reverse TSAs associated with the divested entities to be assumed by Varta AG. As a result, a portion of the TSA and reverse TSA charges with Energizer were transferred to Varta AG. The TSAs and reverse TSAs have an overall expected time period of 12 months following the close of the transactions with some variability in expiration dependent upon the completed transition of the respective service or function and its geographic location and provide up to 12 additional months for a total duration of up to 24 months. The Company has exited all outstanding TSAs and reverse TSAs with Energizer and Varta in January 2021.
During the nine month period ended July 4, 2021, the Company recognized net loss of $1.7 million, consisting of TSA charges of $0.9 million and reverse TSA costs of $2.6 million. During the three month period ended June 28, 2020, the Company recognized net loss of $1.6 million, consisting of TSA charges of $2.1 million and reverse TSA costs of $3.7 million. During the nine month period ended June 28, 2020, the Company recognized net gain of $1.6 million, consisting of TSA charges of $8.6 million and reverse TSA costs of $10.2 million.
In addition to the TSAs and reverse TSAs, the Company, Energizer and Varta AG receive cash and/or make payments on behalf of the respective counterparty’s operations as part of the shared administrative functions, resulting in cash flow being commingled with the operating cash flow of the Company. The Company recognizes a net payable or receivable with Energizer and Varta AG for any outstanding TSA and reverse TSA related services and net working capital attributable to commingled cash flow. As of July 4, 2021 and September 30, 2020, the Company had net payable with Energizer of $2.1 million included in Other Current Liabilities and net receivable of $5.4 million included in Other Receivables on the Company’s Condensed Statements of Financial Position. As of July 4, 2021 and September 30, 2020, the Company had net payable of $0.7 million and $1.0 million, respectively, with Varta AG included in Other Current Liabilities on the Company’s Condensed Consolidated Statements of Financial Position.
The Company’s H&G segment continued to manufacture certain GAC related products at its facilities and sell the products to Energizer as a third-party supplier on an ongoing basis, at inventory cost plus contracted markup, as agreed upon in the supply agreement. The supply agreement had a contracted term of 24 months, and expired in January 2021 with no renewal. Material and inventory on hand to support the supply agreement is recognized as inventory of the Company. During the nine month period ended July 4, 2021, the Company recognized $5.9 million of revenue attributable to the Energizer supply agreement as a component of H&G revenue after completion of the GAC divestiture. During the three and nine month periods ended June 28, 2020, the Company recognized $2.1 million and $13.0 million of revenue attributable to the Energizer supply agreement. As of July 4, 2021, the Company had 0 outstanding receivables from Energizer associated with the H&G supply agreement. As of September 30, 2020, the Company had outstanding receivable of $4.4 million from Energizer in Trade Receivables, Net on the Company’s Condensed Statements of Financial Position associated with the H&G supply agreement.
See Note 13 – Fair value of Financial Instruments for additional discussion on the Company’s investment in Energizer common stock.
27
SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 19 -17 – COMMITMENTS AND CONTINGENCIES
The Company is a defendant in various litigation matters generally arising out of the ordinary course of business. Based on information currently available, the Company does not believe that any additional matters or proceedings presently pending will have a material adverse effect on its results of operations, financial condition, liquidity or cash flows.
Shareholder Litigation. On July 12, 2019, an amended consolidated class action complaint filed earlier in 2018 was filed in the United States District Court for the Western District of Wisconsin (the “Court”) by the Public School Teachers’ Pension & Retirement Fund of Chicago and the Cambridge Retirement against Spectrum Brands’ Legacy, Inc. (“Spectrum Legacy”). The complaint alleges that the defendants violated the Securities Exchange Act of 1934. The amended complaint added HRG Group, Inc. (“HRG”), the predecessor to the Company, as a defendant and asserted additional claims against the Company on behalf of a purported class of HRG shareholders. The class period of the consolidated amended complaint is from January 26, 2017 to November 19, 2018, and the plaintiffs seek an unspecified amount of compensatory damages, interest, attorneys’ and expert fees and costs. During the year ended September 30, 2020, the Company reached a proposed settlement resulting in an insignificant loss, net of third-party insurance coverage and payment, pending final approval by the Court. In February 2021, the Court declined to approve the proposed settlement without prejudice because the Court determined that as a procedural matter the plaintiff’s counsel had not taken the appropriate actions to be appointed to represent the purported class of HRG shareholders. The court subsequently appointed separate counsel to represent the HRG shareholder class. In August 2021, the Company reached an agreement in principle subject to final documentation and approval of the Court, to settle the claims of the Spectrum Legacy class, the cost of which will behas been defrayed by third-party insurance. TheIn October 2021, the Company has not reached a settlement withan agreement in principle to settle the claims of the HRG shareholder class, the cost of which also has been defrayed by third-party insurance. In March 2022, the court granted approval to both settlements with formal opinion and the Company intends to vigorously defend the HRG litigation.order forthcoming.
Environmental. The Company has provided for an estimated cost of $11.2$10.5 million and $11.6$11.3 million as of July 4, 2021April 3, 2022 and September 30, 2020,2021, respectively, associated with environmental remediation activities at some of its current and former manufacturing sites, included in Other Long-Term Liabilities on the Condensed Consolidated Statements of Financial Position. The Company believes that any additional liability in excess of the amounts provided that may result from resolution of these matters, will not have a material adverse effect on the consolidated financial condition, results of operations, or cash flows of the Company.
Product Liability. The Company may be named as a defendant in lawsuits involving product liability claims. The Company has recorded and maintains an estimated liability in the amount of management’s estimate for aggregate exposure for such liabilities based upon probable loss from loss reports, individual cases, and losses incurred but not reported. As of July 4, 2021April 3, 2022 and September 30, 2020,2021, the Company recognized $4.1$3.3 million and $5.1$3.0 million in product liability, respectively, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position. The Company believes that any additional liability in excess of the amounts provided that may result from resolution of these matters will not have a material adverse effect on the consolidated financial condition, results of operations or cash flows of the Company.
Product Warranty. The Company recognizes an estimated liability for standard warranty on certain products when we recognize revenue on the sale of the warranted products. Estimated warranty costs incorporate replacement parts, products and delivery, and are recorded as a cost of goods sold at the time of product shipment based on historical and projected warranty claim rates, claims experience and any additional anticipated future costs on previously sold products. The Company recognized $11.6$0.3 million and $10.9$0.4 million of warranty accruals as of July 4, 2021April 3, 2022 and September 30, 2020,2021, respectively, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.
Other. During the nine month period ended July 4, 2021, the Company recognized legal reserves at our H&G division of approximately $3.2 million attributable to significant and unusual non-recurring claims with no previous history or precedent, included in Other Current Liabilities on the Condensed Consolidated Statement of Financial Position.
27
NOTE 20 - SEGMENT INFORMATION
Net sales relating to the segments for the three and nine month periods ended July 4, 2021 and June 28, 2020 are as follows:
Three Month Periods EndedNine Month Periods Ended
(in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
HHI$419.0 $281.6 $1,217.2 $908.4 
HPC274.4 250.6 950.8 805.4 
GPC257.3 241.5 826.3 684.2 
H&G212.1 210.6 463.2 395.6 
Net sales$1,162.8 $984.3 $3,457.5 $2,793.6 
28
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 20 -18 – SEGMENT INFORMATION (continued)
Net sales relating to the segments for the three and six month periods ended April 3, 2022 and April 4, 2021 are as follows:
Three Month Periods EndedSix Month Periods Ended
(in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
HPC$316.1 $297.9 695.8 676.4 
GPC295.1 293.6 597.3 569.1 
H&G196.6 168.8 271.9 251.0 
Net sales$807.8 $760.3 $1,565.0 $1,496.5 
The Chief Operating Decision Maker of the Company uses Adjusted EBITDA as the primary operating metric in evaluating the business and making operating decisions. 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 and other incentive compensation costs that consist of costs associated with long-term incentive compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics; andthat generally consist of non-cash, stock-based compensation. During the ninesix month period ended JulyApril 4, 2021, and three and nine month periods ended June 28, 2020, other incentive compensation includes certaincosts included incentive bridge awards previously issued due to changes in the Company’s LTIP that allowallowed for cash based payment upon employee election but do not qualify for shared-based compensation. All bridge awardscompensation, which were fully vested in November 2020. See Note 16 -14 – Share Based Compensation for further details;
•Restructuring and related charges which consist of project costs associated with the restructuring initiatives across the Company's segments. See Note 4 -– Restructuring and Related Charges for further details;
•Transaction related charges that consist of (1) transactionare attributable to costs from qualifying strategic transaction or business opportunities, including an acquisition transactions during the period, or divestiture, whether or not consummated, subsequent integration related project costs, directly associated with an acquired business;divestiture support and (2) divestiture related transaction costs that are recognized in continuing operations and post-divestitureincremental separation costs consisting of incremental costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred, and exiting of transition service arrangements (TSAs) and reverse TSAs.costs. See Note 1 – Basis of Presentation & Significant Accounting Policies for further details;
•GainsIncremental costs towards the SAP S/4 HANA ERP transformation to 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 lossesimplementation 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 management costs, and professional services with business partners engaged towards planning, design and business process review that would not qualify as software implementation costs. The Company has substantially completed the design phase of the project and is currently moving into the build phase;
•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 Company’s investment in Energizer common stock. Duringcompleted sale of the three month period ended April 4, 2021, the Company sold its remaining shares in Energizer common stock.discontinued operations. See Note 132 – Fair Value of Financial InstrumentsDivestitures for further details;
•Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations subsequent to an acquisition, (when applicable);including, but not limited to, the costs attributable to the step-up in inventory value, and the incremental value in ROU operating lease assets with below market rent, among others;
•Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations (when applicable);operations;
•Gain on extinguishment of the Salus CLO debt dueGains attributable to the discharge of the obligationCompany's investment in Energizer common stock during the three and ninesix month periods ended June 28, 2020.April 4, 2021, with such remaining shares sold in January 2021. See Note 12 – Fair Value of Financial Instruments for further details;
•Other adjustments primarily consisting of costs attributable to (1) incremental fines and penalties realizedIncremental reserves for delayed shipments followingnon-recurring litigation or environmental remediation activity including the transition of third-party logistics service provider in GPC during the three and nine month period ended July 4, 2021; (2) proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual non-recurringnonrecurring claims with no previous history or precedent realizedrecognized during the ninesix month period ended JulyApril 4, 2021; (3) legal2021 and litigationthe subsequent remeasurement during the six month period ended April 3, 2022;
•Incremental costs associatedrealized under a three-year tolling agreement entered into with Salusthe buyer in consideration with the divestiture of the Coevorden Operations on March 29, 2020, for the continued production of dog and cat food products purchased to support the GPC commercial operations and distribution in Europe; and
•Other adjustments are primarily attributable to: (1) incremental trade spend reserves realized from the transition and integration of the Rejuvenate business into the H&G segment and the Company's systems and processes during the three and ninesix month periods ended July 4, 2021April 3, 2022, (2) incremental fines and June 28, 2020penalties realized for delayed shipments attributable to the GPC distribution transition initiative during the three and six month periods ended April 3, 2022, and (3) costs associated with Salus as they are not considered a component of the continuing commercial products company; (4) foreign currency attributable to multicurrency loans for the three and nine month periods ended June 28, 2020, that were entered into with foreign subsidiaries in exchange for receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestitures; (5) expenses and cost recovery for flood damage at Company facilities in Middleton, Wisconsin during the three and nine month periods ended June 28, 2020 and (6) incremental costs for separation of a key executive during the three and nine month periods ended June 28, 2020;company.

Segment Adjusted EBITDA for the reportable segments for SBH for the three and nine month periods ended July 4, 2021 and June 28, 2020, are as follows:
Three Month Periods EndedNine Month Periods Ended
SBH (in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
HHI$68.0 $43.6 $239.6 $156.0 
HPC11.8 25.0 88.1 69.4 
GPC49.2 50.6 158.5 122.1 
H&G53.4 55.5 98.6 80.6 
Total Segment Adjusted EBITDA182.4 174.7 584.8 428.1 
Corporate15.0 10.3 32.4 21.1 
Interest expense31.4 36.1 133.7 106.5 
Depreciation and amortization38.6 35.0 113.0 113.1 
Share and incentive based compensation7.5 14.2 24.2 43.3 
Restructuring and related charges10.1 12.2 23.4 61.6 
Transaction related charges11.1 6.1 41.4 17.4 
(Gain) loss on Energizer investment0 (60.1)(6.9)8.2 
Loss on assets held for sale0 1.1 0 26.8 
Write-off from impairment of intangible assets0 0 0 24.2 
Inventory acquisition step-up1.3 0 4.7 0 
Salus CLO debt extinguishment0 (76.2)0 (76.2)
Other3.8 4.8 9.7 6.0 
Income from continuing operations before income taxes$63.6 $191.2 $209.2 $76.1 
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 2018 - SEGMENT INFORMATION (continued)
Segment Adjusted EBITDA for the reportable segments for SBH for the three and six month periods ended April 3, 2022 and April 4, 2021, are as follows:
Three Month Periods EndedSix Month Periods Ended
SBH (in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
HPC$10.6 $25.4 38.0 76.3 
GPC40.6 55.6 79.3 109.2 
H&G37.7 34.8 30.4 45.3 
Total Segment Adjusted EBITDA88.9 115.8 147.7 230.8 
Corporate9.9 8.3 19.4 17.5 
Interest expense24.7 52.8 46.4 76.0 
Depreciation and amortization25.7 30.2 51.1 57.2 
Share and incentive based compensation6.6 7.2 12.2 14.2 
Restructuring and related charges16.4 4.3 33.8 13.3 
Transaction related charges20.2 8.2 35.1 27.2 
Global ERP Transformation3.2 — 3.2 — 
Unallocated shared costs6.9 6.7 13.8 13.4 
Non-cash purchase accounting adjustments3.5 2.6 3.5 3.4 
Gain on Energizer investment— (0.9)— (6.9)
Legal and environmental remediation reserves— — (0.5)6.0 
Coevorden tolling related charges1.5 1.5 3.0 3.1 
Other2.2 0.2 4.8 0.1 
(Loss) income from continuing operations before income taxes$(31.9)$(5.3)$(78.1)$6.3 
Segment Adjusted EBITDA for reportable segments for SB/RH for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 are as follows:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
SB/RH (in millions)SB/RH (in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020SB/RH (in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
HHI$68.0 $43.6 $239.6 $156.0 
HPCHPC11.8 25.0 88.1 69.4 HPC$10.6 $25.4 38.0 76.3 
GPCGPC49.2 50.6 158.5 122.1 GPC40.6 55.6 79.3 109.2 
H&GH&G53.4 55.5 98.6 80.6 H&G37.7 34.8 30.4 45.3 
Total Segment Adjusted EBITDATotal Segment Adjusted EBITDA182.4 174.7 584.8 428.1 Total Segment Adjusted EBITDA88.9 115.8 147.7 230.8 
CorporateCorporate14.1 9.3 30.8 16.6 Corporate9.6 8.1 18.9 16.7 
Interest expenseInterest expense31.5 36.0 133.9 106.0 Interest expense24.8 52.9 46.7 76.1 
Depreciation and amortizationDepreciation and amortization38.6 35.0 113.0 113.1 Depreciation and amortization25.7 30.2 51.1 57.2 
Share and incentive based compensationShare and incentive based compensation6.9 13.8 23.0 42.3 Share and incentive based compensation6.2 6.8 11.8 13.6 
Restructuring and related chargesRestructuring and related charges10.1 12.2 23.4 61.6 Restructuring and related charges16.4 4.3 33.8 13.3 
Transaction related chargesTransaction related charges11.1 6.1 41.4 17.4 Transaction related charges20.2 8.2 35.1 27.2 
(Gain) loss on Energizer investment0 (60.1)(6.9)8.2 
Loss on assets held for sale0 1.1 0 26.8 
Write-off from impairment of intangible assets0 0 0 24.2 
Inventory acquisition step-up1.3 0 4.7 0 
SAP S/4 HANA ERP TransformationSAP S/4 HANA ERP Transformation3.2 — 3.2 — 
Unallocated shared costsUnallocated shared costs6.9 6.7 13.8 13.4 
Non-cash purchase accounting adjustmentsNon-cash purchase accounting adjustments3.5 2.6 3.5 3.4 
Gain on Energizer investmentGain on Energizer investment— (0.9)— (6.9)
Legal and environmental remediation reservesLegal and environmental remediation reserves— — (0.5)6.0 
Coevorden tolling related chargesCoevorden tolling related charges1.5 1.5 3.0 3.1 
OtherOther3.7 4.6 9.7 5.3 Other2.1 0.1 4.4 0.1 
Income from continuing operations before income taxes$65.1 $116.7 $211.8 $6.6 
(Loss) income from continuing operations before income taxes(Loss) income from continuing operations before income taxes$(31.2)$(4.7)$(77.1)$7.6 
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 21 -19 – EARNINGS PER SHARE – SBH
The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 are as follows:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions, except per share amounts)(in millions, except per share amounts)July 4, 2021June 28, 2020July 4, 2021June 28, 2020(in millions, except per share amounts)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
NumeratorNumeratorNumerator
Net income from continuing operations attributable to controlling interest$35.9 $137.1 $146.0 $40.2 
(Loss) income from discontinued operations attributable to controlling interest(5.2)8.0 (6.6)12.2 
Net (loss) income from continuing operations attributable to controlling interestNet (loss) income from continuing operations attributable to controlling interest$(25.1)$(3.7)$(55.3)$11.0 
Income from discontinued operations attributable to controlling interestIncome from discontinued operations attributable to controlling interest41.0 40.3 79.4 97.7 
Net income attributable to controlling interestNet income attributable to controlling interest$30.7 $145.1 $139.4 $52.4 Net income attributable to controlling interest$15.9 $36.6 $24.1 $108.7 
DenominatorDenominatorDenominator
Weighted average shares outstanding - basic42.6 43.1 42.7 45.3 
Weighted average shares outstanding – basicWeighted average shares outstanding – basic40.8 42.6 41.1 42.8 
Dilutive sharesDilutive shares0.3 0.1 0.2 0.1 Dilutive shares— — — 0.2 
Weighted average shares outstanding - diluted42.9 43.2 42.9 45.4 
Weighted average shares outstanding – dilutedWeighted average shares outstanding – diluted40.8 42.6 41.1 43.0 
Earnings per shareEarnings per shareEarnings per share
Basic earnings per share from continuing operationsBasic earnings per share from continuing operations$0.84 $3.19 $3.42 $0.89 Basic earnings per share from continuing operations$(0.61)$(0.09)$(1.35)$0.26 
Basic earnings per share from discontinued operationsBasic earnings per share from discontinued operations(0.12)0.18 (0.15)0.27 Basic earnings per share from discontinued operations1.00 0.95 1.94 2.28 
Basic earnings per shareBasic earnings per share$0.72 $3.37 $3.27 $1.16 Basic earnings per share$0.39 $0.86 $0.59 $2.54 
Diluted earnings per share from continuing operationsDiluted earnings per share from continuing operations$0.84 $3.18 $3.40 $0.89 Diluted earnings per share from continuing operations$(0.61)$(0.09)$(1.35)$0.26 
Diluted earnings per share from discontinued operationsDiluted earnings per share from discontinued operations(0.12)0.18 (0.15)0.27 Diluted earnings per share from discontinued operations1.00 0.95 1.94 2.27 
Diluted earnings per shareDiluted earnings per share$0.72 $3.36 $3.25 $1.16 Diluted earnings per share$0.39 $0.86 $0.59 $2.53 
Weighted average number of anti-dilutive shares excluded from denominatorWeighted average number of anti-dilutive shares excluded from denominator0 0 0 0 Weighted average number of anti-dilutive shares excluded from denominator0.2 0.3 0.2 — 

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 to Spectrum Brands Holdings, Inc. and its subsidiaries ("SBH") and SB/RH Holdings, LLC and its subsidiaries (“SB/RH”), collectively.
Business Overview
The Company is a diversified global branded consumer products and home essentials company.  We manage the businesses in fourthree vertically integrated, product-focused segments: (i) Hardware & Home Improvement (“HHI”), (ii) Home and Personal Care (“HPC”), (iii)(ii) Global Pet Care (“GPC”), and (iv)(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, original equipment manufacturers (“OEMs”), and construction companies.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 or general manager responsible for sales and marketing initiatives and the financial results for all product lines within that segment.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 2018 – Segment Information 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:
SegmentProductsBrands
HHI
Security: Residential locksets and door hardware including knobs, levers, deadbolts, handle sets, including electronic and connected locks.
Plumbing & Accessories: Kitchen and bath faucets and accessories.
Builders' Hardware: Hinges, metal shapes, security hardware, track and sliding door hardware, gate hardware.
Security: Kwikset®, Weiser®, Baldwin®, Tell Manufacturing®, and EZSET®
Plumbing & Accessories: Pfister®
Builders' Hardware: National Hardware®, FANAL®
HPC
Home Appliances: Small kitchen appliances including toaster ovens, coffeemakers, slow cookers, blenders, hand mixers, grills, food processors, juicers, toasters, irons, kettles, bread makers, cookware, and irons.cookbooks.
Personal Care: Hair dryers, flat irons and straighteners, rotary and foil electric shavers, personal groomers, mustache and beard trimmers, body groomers, nose and ear trimmers, women's shavers, and haircut kits and intense pulsed light hair removal systems.kits.
Home Appliances: Black & Decker®, Russell Hobbs®, George Foreman®, PowerXL®, Emeril Legasse®, Copper Chef ®, Toastmaster®, Juiceman®, Farberware®, and Breadman®
Personal Care: Remington®, and LumaBella®
GPC
Companion Animal: Rawhide chews, dog and cat clean-up, training, health and grooming products, small animal food and care products, rawhide-free dog treats, and wet and dry pet food for dogs and cats.
Aquatics: Consumer and commercial aquarium kits, stand-alone tanks; aquatics equipment such as filtration systems, heaters and pumps; and aquatics consumables such as fish food, water management and carecare.
Companion Animal: 8IN1® (8-in-1), Dingo®, Nature's Miracle®, Wild Harvest™, Littermaid®, Jungle®, Excel®, FURminator®, IAMS® (Europe only), Eukanuba® (Europe only), Healthy-Hide®, DreamBone®, SmartBones®, ProSense®, Perfect Coat®, eCOTRITION®, Birdola®, Digest-eeze®, Good Boy®, Meowee!®, Wildbird®, and Wafcol®
Aquatics: Tetra®, Marineland®, Whisper®, Instant Ocean®, GloFish®, OmegaOne® and OmegaSea®
H&G
Household: Household pest control solutions such as spider and scorpion killers; ant and roach killers; flying insect killers; insect foggers; wasp and hornet killers; and bedbug, flea and tick control products.
Controls: Outdoor insect and weed control solutions, and animal repellents such as aerosols, granules, and ready-to-use sprays or hose-end ready-to-sprays.
Repellents: Personal use pesticides and insect repellent products, including aerosols, lotions, pump sprays and wipes, yard sprays and citronella candles.
Cleaning: Household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes and markers.
Household: Hot Shot®, Black Flag®, Real-Kill®, Ultra Kill®, The Ant Trap® (TAT), and Rid-A-Bug®.
Controls: Spectracide®, Garden Safe®, Liquid Fence®, and EcoLogic®.
Repellents: Cutter® and Repel®.
Cleaning: Rejuvenate®
The Company has a trademark license agreement (the "License Agreement") with Stanley Black & Decker ("SBD") pursuant to which we license the Black & Decker® (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; which was set to expire December 31, 2021. 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 on June 30, 2025. 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 for further detail on revenue concentration from B&D branded products.
On February 18, 2022, the Company acquired the home appliances and cookware products sold under the PowerXL®, Emeril Legasse®, and Copper Chef® brands from Tristar Products, Inc. (the "Tristar Business"). As part of the acquisition, the PowerXL® and Copper Chef® brands were acquired outright by the Company while the Emeril Legasse® 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 Lagasse® 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 for further detail on the Tristar Business acquisition.
On September 8, 2021, the Company entered into a definitive Asset and Stock Purchase Agreement 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. 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 and the HHI operations have been classified as discontinued operations for all periods presented and notes to the 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 for more information on the HHI divestiture
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including the assets and liabilities classified as held for sale and income from discontinued operations. The Company is engaged with antitrust regulators in the ongoing regulatory review of the transaction and the Company is currently working to respond to such regulators' requests for additional information. Although the timing and outcome of the regulatory process cannot be predicted, the Company currently expects the merger review process to last for several months. As such, though there can be no assurance when the transaction will close, if at all, the Company does not expect the transaction to close before September 2022.
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.

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COVID-19Acquisitions
The COVID-19 pandemicCompany periodically evaluates strategic transactions that may result in the acquisition of a business or assets that qualify as recognition of a business combination. Acquisitions may impact the comparability of the consolidated or segment financial information with the inclusion of 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 resulting regulationsrelated amortization and other disruptionsdepreciation of acquired assets. Moreover, the comparability of consolidated or segment financial information may be impacted by incremental costs to both demandfacilitate the transaction and supplysupporting integration activities of the acquired operations with the consolidated group. The following acquisition activity may have a substantialsignificant impact on the commercial operations of the Company or impairment of the Company’s net assets. 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.
As of the date of this report, we continue to be classified as an essential business in the jurisdictions that have mandated closures of non-essential businesses, and therefore have been allowed to remain open and continue to operate to the extent possible under existing regulations with any limitation in production output being short-term in nature. Despite the supply implications experienced in the prior year, the Company has experienced continued customer demand. While demand in general for our products remains strong, our teams continue to monitor demand disruption and there can be no assurance as to the level of demand that will prevail throughout the fiscal year. A large portion of our customers continue to operate and sell our products, with some customers having experienced reduced operations due to closures or reduced store hours. There have also been changes in consumer needs and spending during the COVID-19 pandemic, which have resulted in a limited number of change orders and reduced spending. Currently, we have not identified, and will continue to monitor for, any substantive risk attributable to customer credit and have not experienced a significant impact from store closures or retail bankruptcies. 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 magnitudecomparability of the financial impact on our quarterly and annual results is highly dependent on the durationcondensed consolidated financial statements.
•On February 18, 2022, the Company acquired 100% of the COVID-19 pandemicTristar Business for a purchase price of $325.0 million, net of customary purchase price adjustments and how quicklytransaction costs. The Tristar Business includes a portfolio of home appliances and cookware products sold under the U.S.PowerXL®, Emeril Legasse®, and global economies resume normal operations.
Copper Chef® brands. The COVID-19 pandemic has not had a materially negative impact onnet assets and operating results of the Tristar Business are included in the Company’s liquidity position. The sweeping natureCondensed Consolidated Statements of COVID-19 pandemic makes it extremely difficult to predictIncome and reported within the long-term ramifications on our financial conditionHPC reporting segment for the three and results of operations. However, the likely overall economic impact of the COVID-19 pandemic to the U.S. and global economies remains uncertain. We continue to actively monitor our global cash balances and liquidity, and if necessary, could reinitiate mitigating efforts to manage non-critical capital 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 have also not observed any material impairments due to the COVID-19 pandemic.six month period ended April 3, 2022.
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 and any governmental and public actions taken in response.
Acquisitions
•On May 28, 2021, the Company acquired all ownership100% of the membership interests in For Life Products, LLC ("FLP") for a purchase price of $301.5 million. FLP is a leading 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 Statements of Income and reported within the H&G reporting segment for the three and ninesix month periods ended July 4, 2021, effective the acquisition date of May 28, 2021.April 3, 2022.
•On October 26, 2020, the Company completed the acquisition of Armitage Pet Care Ltd ("Armitage") for $187.7 million. Armitage is a premium pet treats and toys business in Nottingham, United Kingdom including a portfolio of brands that include Armitage's dog treats brand, Good Boy®, cat treats brand, Meowee!®, and Wildbird® bird feed products, among others, that are predominantly sold within the United Kingdom. The net assets and results of operations of Armitage are included in the Company’s Condensed Consolidated Statements of Income and reported within the GPC reporting segment for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021, effective as of the acquisition date of October 26, 2020.
On March 10, 2020, the Company entered into an asset purchase agreement with Omega 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, for a purchase price of approximately $16.9 million. The results of Omega’s operations are included in the Company’s Condensed Consolidated Statements of Income and reported within the GPC reporting segment for the three and nine month periods ended July 4, 2021 and for the three and nine month periods ended June 28, 2020, effective the acquisition date of March 10, 2020.
See Note 3 – Acquisitions in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for more information.
Divestitures
On March 29, 2020, the Company completed the sale of its DCF production facility and distribution center in Coevorden, Netherlands for cash proceeds of $29.0 million received during the year ended September 30, 2020, resulting in a loss on Coevorden Operations held for sale of $26.8 million and impairment of intangible assets of $24.2 million associated with the commercial DCF business following the divestiture during the nine month period ended June 28, 2020. See Note 2 – Divestitures in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for more information.
Restructuring Activity
We continually seek and develop operating strategies to improve our operational efficiency, match our manufacturing capacity and product costs to market demand and better utilize our manufacturing resources.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. The most significant of these initiatives is the Global Productivity Improvement Program, which began during the year ended September 30, 2019 and has continued through the three and nine month periods ended July 4, 2021. See Note 4 -– Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for more information.
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.
Refinancing Activity
RefinancingFinancing activity hasduring and between comparable periods may have a significant impact on the comparability of financial results ofon the condensed consolidated financial statements.
•On MarchFebruary 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 andon 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 make wholecall premium of $23.4 million and non-cash write-off of unamortized debt issuance costs of $7.9 million recognized as interest expenseexpense.
Russia-Ukraine War
The impacts of the Russia-Ukraine war 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 collectibility 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 restructuring costs or potential impairments to remediate.
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COVID-19
The COVID-19 pandemic and the resulting regulations continue to cause 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 nine month period ended July 4, 2021. See Note 10 - DebtCOVID-19 pandemic, and while demand for our products remain strong, our teams continue to monitor demand shifts and there can be no assurance as to the Condensed Consolidated Financial Statements, included elsewherelevel 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 this Quarterly Report,response.
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 more information.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.

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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 raterates 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 ninesix month periods ended July 4, 2021April 3, 2022 compared to net sales for the three and ninesix month periods ended June 28, 2020:April 4, 2021:
Three Month Periods Ended
(in millions, except %)		Three Month Periods Ended
(in millions, except %)		July 4, 2021Three Month Periods Ended
(in millions, except %)		April 3, 2022
Net SalesEffect of Changes in CurrencyNet Sales Excluding Effect of Changes in CurrencyEffect of Acquisitions
Organic
Net Sales
Net Sales
June 28, 2020
VarianceNet SalesEffect of Changes in CurrencyNet Sales Excluding Effect of Changes in CurrencyEffect of Acquisitions
Organic
Net Sales
Net Sales
April 4, 2021
Variance
HHI$419.0 $(6.0)$413.0 $— $413.0 $281.6 $131.4 46.7 %
HPCHPC274.4 (13.2)261.2 — 261.2 250.6 10.6 4.2 %HPC$316.1 $11.4 $327.5 $(35.8)$291.7 $297.9 $(6.2)(2.1)%
GPCGPC257.3 (6.7)250.6 (26.4)224.2 241.5 (17.3)(7.2)%GPC295.1 5.6 300.7 — 300.7 293.6 7.1 2.4 %
H&GH&G212.1 — 212.1 (7.9)204.2 210.6 (6.4)(3.0)%H&G196.6 — 196.6 (13.3)183.3 168.8 14.5 8.6 %
TotalTotal$1,162.8 $(25.9)$1,136.9 $(34.3)$1,102.6 $984.3 118.3 12.0 %Total$807.8 $17.0 $824.8 $(49.1)$775.7 $760.3 15.4 2.0 %

Nine Month Periods Ended
(in millions, except %)
July 4, 2021
Net SalesEffect of Changes in CurrencyNet Sales Excluding Effect of Changes in CurrencyEffect of Acquisitions
Organic
Net Sales
Net Sales
June 28, 2020
Variance
HHI$1,217.2 $(10.6)$1,206.6 $— $1,206.6 $908.4 $298.2 32.8 %
HPC950.8 (27.4)923.4 — 923.4 805.4 118.0 14.7 %
GPC826.3 (17.0)809.3 (73.5)735.8 684.2 51.6 7.5 %
H&G463.2 — 463.2 (7.9)455.3 395.6 59.7 15.1 %
Total$3,457.5 $(55.0)$3,402.5 $(81.4)$3,321.1 $2,793.6 527.5 18.9 %

Six Month Periods Ended
(in millions, except %)
April 3, 2022
Net SalesEffect of Changes in CurrencyNet Sales Excluding Effect of Changes in CurrencyEffect of Acquisitions
Organic
Net Sales
Net Sales
April 4, 2021
Variance
HPC$695.8 $16.4 $712.2 $(35.8)$676.4 $676.4 $— — %
GPC597.3 7.8 605.1 (8.8)596.3 569.1 27.2 4.8 %
H&G271.9 — 271.9 (21.1)250.8 251.0 (0.2)(0.1)%
Total$1,565.0 $24.2 $1,589.2 $(65.7)$1,523.5 $1,496.5 27.0 1.8 %
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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 and other incentive compensation costs that consist of costs associated with long-term incentive compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics; andthat generally consist of non-cash, stock-based compensation. During the ninesix month period ended JulyApril 4, 2021, and three and nine month periods ended June 28, 2020, other incentive compensation includes certaincosts included incentive bridge awards previously issued due to changes in the Company’s LTIP that allowallowed for cash based payment upon employee election but do not qualify for shared-based compensation. All bridge awardscompensation, which were fully vested in November 2020. See Note 16 -14 – Share Based Compensation in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Restructuring and related charges which consist of project costs associated with the restructuring initiatives across the Company's segments. See Note 4 -– Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Transaction related charges that consist of (1) transactionare attributable to costs from qualifying strategic transaction or business opportunities, including an acquisition transactions during the period, or divestiture, whether or not consummated, subsequent integration related project costs, directly associated with an acquired business;divestiture support and (2) divestiture related transaction costs that are recognized in continuing operations and post-divestitureincremental separation costs consisting of incremental costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred, and exiting of transition service arrangements (TSAs) and reverse TSAs.costs. See Note 1 – Basis of Presentation & Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•GainsIncremental costs towards the SAP S/4 HANA ERP transformation to 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 lossesimplementation 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 management costs, and professional services with business partners engaged towards planning, design and business process review that would not qualify as software implementation costs. The Company has substantially completed the design phase of the project and is currently moving into the build phase:
•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 Company’sstep-up in inventory value and the incremental value in ROU operating lease assets with below market rent, among others;
•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. Duringstock during the three and six month periodperiods ended April 4, 2021, the Company sold its2021. with such remaining shares sold in Energizer common stock.January 2021. See Note 1312 – Fair Value of Financial Instruments in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations subsequent to an acquisition (when applicable);
•Non-cash asset impairmentsIncremental reserves for non-recurring litigation or write-offs realized and recognized in earnings from continuing operations (when applicable);
•Gain on extinguishment ofenvironmental remediation activity including the Salus CLO debt due to the discharge of the obligation during the three and nine month period ended June 28, 2020.
•Other adjustments primarily consisting of costs attributable to (1) incremental fines and penalties realized for delayed shipments following the transition of third-party logistics service provider in GPC during the three and nine month period ended July 4, 2021; (2) proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual non-recurringnonrecurring claims with no previous history or precedent realizedrecognized during the ninesix month period ended JulyApril 4, 2021; (3) legal2021 and the subsequent remeasurement during the six month period ended April 3, 2022;
•Incremental costs associatedrealized under a three-year tolling agreement entered into with Salusthe buyer in consideration with the divestiture of the Coevorden Operations on March 29, 2020, for the continued production of dog and cat food products purchased to support the GPC commercial operations and distribution in Europe; and
•Other adjustments are primarily attributable to: (1) incremental trade spend reserves realized from the transition and integration of the Rejuvenate business into the H&G segment and the Company's systems and processes during the three and ninesix month periods ended July 4, 2021April 3, 2022, (2) incremental fines and June 28, 2020penalties for delayed shipments attributable to the GPC distribution transition initiative during the three and six month periods ended April 3, 2022, and (3) costs associated with Salus as they are not considered a component of the continuing commercial products company; (4) foreign currency attributable to multicurrency loans for the three and nine month periods ended June 28, 2020, that were entered into with foreign subsidiaries in exchange for receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestitures; (5) expenses and cost recovery for flood damage at Company facilities in Middleton, Wisconsin during the three and nine month periods ended June 28, 2020 and (6) incremental costs for separation of a key executive during the three and nine month periods ended June 28, 2020;company.
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 July 4, 2021 and June 28, 2020 for SBH.
SPECTRUM BRANDS HOLDINGS, INC.
(in millions)		HHIHPCGPCH&GCorporateConsolidated
Three Month Period Ended July 4, 2021
Net income (loss) from continuing operations$59.6 $(2.7)$27.3 $41.7 $(90.0)$35.9 
Income tax expense— — — — 27.7 27.7 
Interest expense— — — — 31.4 31.4 
Depreciation and amortization8.4 11.7 10.4 4.5 3.6 38.6 
EBITDA68.0 9.0 37.7 46.2 (27.3)133.6 
Share and incentive based compensation— — — — 7.5 7.5 
Restructuring and related charges— 2.1 3.9 — 4.1 10.1 
Transaction related charges— 0.7 4.0 5.8 0.6 11.1 
Inventory acquisition step-up— — — 1.3 — 1.3 
Other— — 3.6 0.1 0.1 3.8 
Adjusted EBITDA$68.0 $11.8 $49.2 $53.4 $(15.0)$167.4 
Net Sales$419.0 $274.4 $257.3 $212.1 $— $1,162.8 
Adjusted EBITDA Margin16.2 %4.3 %19.1 %25.2 %— 14.4 %
Three Month Period Ended June 28, 2020
Net income from continuing operations$34.8 $12.9 $35.8 $50.4 $3.7 $137.6 
Income tax expense— — — — 53.6 53.6 
Interest expense— — — — 36.1 36.1 
Depreciation and amortization8.5 8.7 9.2 5.1 3.5 35.0 
EBITDA43.3 21.6 45.0 55.5 96.9 262.3 
Share and incentive based compensation— — — — 14.2 14.2 
Restructuring and related charges0.3 0.7 2.1 — 9.1 12.2 
Transaction related charges— 3.0 2.4 — 0.7 6.1 
Gain on Energizer investment— — — — (60.1)(60.1)
Loss on assets held for sale— — 1.1 — — 1.1 
Salus CLO debt extinguishment— — — — (76.2)(76.2)
Other— (0.3)— — 5.1 4.8 
Adjusted EBITDA$43.6 $25.0 $50.6 $55.5 $(10.3)$164.4 
Net Sales$281.6 $250.6 $241.5 $210.6 $— $984.3 
Adjusted EBITDA Margin15.5 %10.0 %21.0 %26.4 %— 16.7 %

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The following is a reconciliation of net income to Adjusted EBITDA for the ninethree month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 for SBH.
SPECTRUM BRANDS HOLDINGS, INC.
(in millions)		SPECTRUM BRANDS HOLDINGS, INC.
(in millions)		HHIHPCGPCH&GCorporateConsolidatedSPECTRUM BRANDS HOLDINGS, INC.
(in millions)		HPCGPCH&GCorporateConsolidated
Nine Month Period Ended July 4, 2021
Net income from continuing operations$214.1 $46.4 $99.9 $71.1 $(285.6)$145.9 
Income tax expense— — — — 63.3 63.3 
Three Month Period Ended April 3, 2022Three Month Period Ended April 3, 2022
Net (loss) income from continuing operationsNet (loss) income from continuing operations$(19.1)$19.0 $30.4 $(55.4)$(25.1)
Income tax benefitIncome tax benefit— — — (6.8)(6.8)
Interest expenseInterest expense— — — — 133.7 133.7 Interest expense— — — 24.7 24.7 
Depreciation and amortizationDepreciation and amortization25.5 32.3 29.8 14.4 11.0 113.0 Depreciation and amortization8.1 9.3 4.7 3.6 25.7 
EBITDAEBITDA239.6 78.7 129.7 85.5 (77.6)455.9 EBITDA(11.0)28.3 35.1 (33.9)18.5 
Share and incentive based compensationShare and incentive based compensation— — — — 24.2 24.2 Share and incentive based compensation— — — 6.6 6.6 
Restructuring and related chargesRestructuring and related charges— 6.2 6.0 — 11.2 23.4 Restructuring and related charges3.7 8.2 — 4.5 16.4 
Transaction related chargesTransaction related charges— 3.2 15.7 5.8 16.7 41.4 Transaction related charges14.4 1.2 1.9 2.7 20.2 
Gain on Energizer investment— — — — (6.9)(6.9)
Inventory acquisition step-up— — 3.4 1.3 — 4.7 
Global ERP TransformationGlobal ERP Transformation— — — 3.2 3.2 
Unallocated shared costsUnallocated shared costs— — — 6.9 6.9 
Non-cash purchase accounting adjustmentsNon-cash purchase accounting adjustments3.5 — — — 3.5 
Coevorden tolling related chargesCoevorden tolling related charges— 1.5 — — 1.5 
OtherOther— — 3.7 6.0 — 9.7 Other— 1.4 0.7 0.1 2.2 
Adjusted EBITDAAdjusted EBITDA$239.6 $88.1 $158.5 $98.6 $(32.4)$552.4 Adjusted EBITDA$10.6 $40.6 $37.7 $(9.9)$79.0 
Net SalesNet Sales$1,217.2 $950.8 $826.3 $463.2 $— $3,457.5 Net Sales$316.1 $295.1 $196.6 $— $807.8 
Adjusted EBITDA MarginAdjusted EBITDA Margin19.7 %9.3 %19.2 %21.3 %— 16.0 %Adjusted EBITDA Margin3.4 %13.8 %19.2 %— 9.8 %
Nine Month Period Ended June 28, 2020
Net income from continuing operations$130.0 $31.5 $9.7 $64.9 $(195.3)$40.8 
Income tax expense— — — — 35.3 35.3 
Three Month Period Ended April 4, 2021Three Month Period Ended April 4, 2021
Net income (loss) from continuing operationsNet income (loss) from continuing operations$11.0 $38.7 $29.9 $(84.2)$(4.6)
Income tax benefitIncome tax benefit— — — (0.7)(0.7)
Interest expenseInterest expense— — — — 106.5 106.5 Interest expense— — — 52.8 52.8 
Depreciation and amortizationDepreciation and amortization25.1 26.5 35.1 15.4 11.0 113.1 Depreciation and amortization11.8 9.6 4.9 3.9 30.2 
EBITDAEBITDA155.1 58.0 44.8 80.3 (42.5)295.7 EBITDA22.8 48.3 34.8 (28.2)77.7 
Share and incentive based compensationShare and incentive based compensation— — — — 43.3 43.3 Share and incentive based compensation— — — 7.2 7.2 
Restructuring and related chargesRestructuring and related charges0.9 3.6 18.8 0.3 38.0 61.6 Restructuring and related charges1.5 0.6 — 2.2 4.3 
Transaction related chargesTransaction related charges— 7.3 7.4 — 2.7 17.4 Transaction related charges1.1 2.6 — 4.5 8.2 
Loss on Energizer investment— — — — 8.2 8.2 
Loss on assets held for sale— — 26.8 — — 26.8 
Write-off from impairment of intangible assets— — 24.2 — — 24.2 
Salus CLO debt extinguishment— — — — (76.2)(76.2)
Unallocated shared costsUnallocated shared costs— — — 6.7 6.7 
Non-cash purchase accounting adjustmentsNon-cash purchase accounting adjustments— 2.6 — — 2.6 
Gain on Energizer investmentGain on Energizer investment— — — (0.9)(0.9)
Coevorden tolling related chargesCoevorden tolling related charges— 1.5 — — 1.5 
OtherOther— 0.5 0.1 — 5.4 6.0 Other— — — 0.2 0.2 
Adjusted EBITDAAdjusted EBITDA$156.0 $69.4 $122.1 $80.6 $(21.1)$407.0 Adjusted EBITDA$25.4 $55.6 $34.8 $(8.3)$107.5 
Net SalesNet Sales$908.4 $805.4 $684.2 $395.6 $— $2,793.6 Net Sales$297.9 $293.6 $168.8 $— $760.3 
Adjusted EBITDA MarginAdjusted EBITDA Margin17.2 %8.6 %17.8 %20.4 %— 14.6 %Adjusted EBITDA Margin8.5 %18.9 %20.6 %— 14.1 %
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The following is a reconciliation of net income to Adjusted EBITDA for the six month periods ended April 3, 2022 and April 4, 2021 for SBH.

SPECTRUM BRANDS HOLDINGS, INC.
(in millions)		HPCGPCH&GCorporateConsolidated
Six Month Period Ended April 3, 2022
Net income (loss) from continuing operations$— $30.6 $14.6 $(100.5)$(55.3)
Income tax benefit— — — (22.8)(22.8)
Interest expense— — — 46.4 46.4 
Depreciation and amortization15.8 18.6 9.3 7.4 51.1 
EBITDA15.8 49.2 23.9 (69.5)19.4 
Share and incentive based compensation— — — 12.2 12.2 
Restructuring and related charges4.3 19.6 — 9.9 33.8 
Transaction related charges14.4 3.6 6.3 10.8 35.1 
Global ERP Transformation— — — 3.2 3.2 
Unallocated shared costs— — — 13.8 13.8 
Non-cash purchase accounting adjustments3.5 — — — 3.5 
Legal and environmental remediation reserves— — (0.5)— (0.5)
Coevorden tolling related charges— 3.0 — — 3.0 
Other— 3.9 0.7 0.2 4.8 
Adjusted EBITDA$38.0 $79.3 $30.4 $(19.4)$128.3 
Net Sales$695.8 $597.3 $271.9 $— $1,565.0 
Adjusted EBITDA Margin5.5 %13.3 %11.2 %— 8.2 %
Six Month Period Ended April 4, 2021
Net income (loss) from continuing operations$49.2 $72.7 $29.4 $(140.2)$11.1 
Income tax benefit— — — (4.8)(4.8)
Interest expense— — — 76.0 76.0 
Depreciation and amortization20.6 19.3 9.9 7.4 57.2 
EBITDA69.8 92.0 39.3 (61.6)139.5 
Share and incentive based compensation— — — 14.2 14.2 
Restructuring and related charges4.1 2.1 — 7.1 13.3 
Transaction related charges2.4 8.6 — 16.2 27.2 
Unallocated shared costs— — — 13.4 13.4 
Non-cash purchase accounting adjustments— 3.4 — — 3.4 
Gain on Energizer investment— — — (6.9)(6.9)
Legal and environmental remediation reserves— — 6.0 — 6.0 
Coevorden tolling related charges— 3.1 — — 3.1 
Other— — — 0.1 0.1 
Adjusted EBITDA$76.3 $109.2 $45.3 $(17.5)$213.3 
Net Sales$676.4 $569.1 $251.0 $— $1,496.5 
Adjusted EBITDA Margin11.3 %19.2 %18.0 %— 14.3 %
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The following is a reconciliation of net income to Adjusted EBITDA for the three month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 for SB/RH.
SB/RH HOLDINGS, LLC
(in millions)		HHIHPCGPCH&GCorporateConsolidated
Three Month Period Ended July 4, 2021
Net income (loss) from continuing operations$59.6 $(2.7)$27.3 $41.7 $(89.0)$36.9 
Income tax expense— — — — 28.2 28.2 
Interest expense— — — — 31.5 31.5 
Depreciation and amortization8.4 11.7 10.4 4.5 3.6 38.6 
EBITDA68.0 9.0 37.7 46.2 (25.7)135.2 
Share and incentive based compensation— — — — 6.9 6.9 
Restructuring and related charges— 2.1 3.9 — 4.1 10.1 
Transaction related charges— 0.7 4.0 5.8 0.6 11.1 
Inventory acquisition step-up— — — 1.3 — 1.3 
Other— — 3.6 0.1 — 3.7 
Adjusted EBITDA$68.0 $11.8 $49.2 $53.4 $(14.1)$168.3 
Net Sales$419.0 $274.4 $257.3 $212.1 $— $1,162.8 
Adjusted EBITDA Margin16.2 %4.3 %19.1 %25.2 %— 14.5 %
Three Month Period Ended June 28, 2020
Net income from continuing operations$34.8 $12.9 $35.8 $50.4 $(52.6)$81.3 
Income tax expense— — — — 35.4 35.4 
Interest expense— — — — 36.0 36.0 
Depreciation and amortization8.5 8.7 9.2 5.1 3.5 35.0 
EBITDA43.3 21.6 45.0 55.5 22.3 187.7 
Share and incentive based compensation— — — — 13.8 13.8 
Restructuring and related charges0.3 0.7 2.1 — 9.1 12.2 
Transaction related charges— 3.0 2.4 — 0.7 6.1 
Gain on Energizer investment— — — — (60.1)(60.1)
Loss on assets held for sale— — 1.1 — — 1.1 
Other— (0.3)— — 4.9 4.6 
Adjusted EBITDA$43.6 $25.0 $50.6 $55.5 $(9.3)$165.4 
Net Sales$281.6 $250.6 $241.5 $210.6 $— $984.3 
Adjusted EBITDA Margin15.5 %10.0 %21.0 %26.4 %— 16.8 %


SB/RH HOLDINGS, LLC
(in millions)		HPCGPCH&GCorporateConsolidated
Three Month Period Ended April 3, 2022
Net (loss) income from continuing operations$(19.1)$19.0 $30.4 $(54.9)$(24.6)
Income tax benefit— — — (6.6)(6.6)
Interest expense— — — 24.8 24.8 
Depreciation and amortization8.1 9.3 4.7 3.6 25.7 
EBITDA(11.0)28.3 35.1 (33.1)19.3 
Share and incentive based compensation— — — 6.2 6.2 
Restructuring and related charges3.7 8.2 — 4.5 16.4 
Transaction related charges14.4 1.2 1.9 2.7 20.2 
Global ERP Transformation— — — 3.2 3.2 
Unallocated shared costs— — — 6.9 6.9 
Non-cash purchase accounting adjustments3.5 — — — 3.5 
Coevorden tolling related charges— 1.5 — — 1.5 
Other— 1.4 0.7 — 2.1 
Adjusted EBITDA$10.6 $40.6 $37.7 $(9.6)$79.3 
Net Sales$316.1 $295.1 $196.6 $— $807.8 
Adjusted EBITDA Margin3.4 %13.8 %19.2 %— 9.8 %
Three Month Period Ended April 4, 2021
Net income (loss) from continuing operations$11.0 $38.7 $29.9 $(83.8)$(4.2)
Income tax benefit— — — (0.5)(0.5)
Interest expense— — — 52.9 52.9 
Depreciation and amortization11.8 9.6 4.9 3.9 30.2 
EBITDA22.8 48.3 34.8 (27.5)78.4 
Share and incentive based compensation— — — 6.8 6.8 
Restructuring and related charges1.5 0.6 — 2.2 4.3 
Transaction related charges1.1 2.6 — 4.5 8.2 
Unallocated shared costs— — — 6.7 6.7 
Non-cash purchase accounting adjustments— 2.6 — — 2.6 
Gain on Energizer investment— — — (0.9)(0.9)
Coevorden tolling related charges— 1.5 — — 1.5 
Other— — — 0.1 0.1 
Adjusted EBITDA$25.4 $55.6 $34.8 $(8.1)$107.7 
Net Sales$297.9 $293.6 $168.8 $— $760.3 
Adjusted EBITDA Margin8.5 %18.9 %20.6 %— 14.2 %
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The following is a reconciliation of net income to Adjusted EBITDA for the ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 for SB/RH.
SB/RH HOLDINGS, LLC
(in millions)		HHIHPCGPCH&GCorporateConsolidated
Nine Month Period Ended July 4, 2021
Net income from continuing operations$214.1 $46.4 $99.9 $71.1 $(283.6)$147.9 
Income tax expense— — — — 63.9 63.9 
Interest expense— — — — 133.9 133.9 
Depreciation and amortization25.5 32.3 29.8 14.4 11.0 113.0 
EBITDA239.6 78.7 129.7 85.5 (74.8)458.7 
Share based compensation— — — — 23.0 23.0 
Restructuring and related charges— 6.2 6.0 — 11.2 23.4 
Transaction related charges— 3.2 15.7 5.8 16.7 41.4 
Gain on Energizer investment— — — — (6.9)(6.9)
Inventory acquisition step-up— — 3.4 1.3 — 4.7 
Other— — 3.7 6.0 — 9.7 
Adjusted EBITDA$239.6 $88.1 $158.5 $98.6 $(30.8)$554.0 
Net Sales$1,217.2 $950.8 $826.3 $463.2 $— $3,457.5 
Adjusted EBITDA Margin19.7 %9.3 %19.2 %21.3 %— 16.0 %
Nine Month Period Ended June 28, 2020
Net income (loss) from continuing operations$130.0 $31.5 $9.7 $64.9 $(248.3)$(12.2)
Income tax expense— — — — 18.8 18.8 
Interest expense— — — — 106.0 106.0 
Depreciation and amortization25.1 26.5 35.1 15.4 11.0 113.1 
EBITDA155.1 58.0 44.8 80.3 (112.5)225.7 
Share and incentive based compensation— — — — 42.3 42.3 
Restructuring and related charges0.9 3.6 18.8 0.3 38.0 61.6 
Transaction related charges— 7.3 7.4 — 2.7 17.4 
Loss on Energizer investment— — — — 8.2 8.2 
Loss on assets held for sale— — 26.8 — — 26.8 
Write-off from impairment of intangible assets— — 24.2 — — 24.2 
Other— 0.5 0.1 — 4.7 5.3 
Adjusted EBITDA$156.0 $69.4 $122.1 $80.6 $(16.6)$411.5 
Net Sales$908.4 $805.4 $684.2 $395.6 $— $2,793.6 
Adjusted EBITDA Margin17.2 %8.6 %17.8 %20.4 %— 14.7 %
SB/RH HOLDINGS, LLC
(in millions)		HPCGPCH&GCorporateConsolidated
Six Month Period Ended April 3, 2022
Net income (loss) from continuing operations$— $30.6 $14.6 $(99.9)$(54.7)
Income tax benefit— — — (22.4)(22.4)
Interest expense— — — 46.7 46.7 
Depreciation and amortization15.8 18.6 9.3 7.4 51.1 
EBITDA15.8 49.2 23.9 (68.2)20.7 
Share based compensation— — — 11.8 11.8 
Restructuring and related charges4.3 19.6 — 9.9 33.8 
Transaction related charges14.4 3.6 6.3 10.8 35.1 
SAP S/4 HANA ERP Transformation— — — 3.2 3.2 
Unallocated shared costs— — — 13.8 13.8 
Non-cash purchase accounting adjustments3.5 — — — 3.5 
Legal and environmental remediation reserves— — (0.5)— (0.5)
Coevorden tolling related charges— 3.0 — — 3.0 
Other— 3.9 0.7 (0.2)4.4 
Adjusted EBITDA$38.0 $79.3 $30.4 $(18.9)$128.8 
Net Sales$695.8 $597.3 $271.9 $— $1,565.0 
Adjusted EBITDA Margin5.5 %13.3 %11.2 %— 8.2 %
Six Month Period Ended April 4, 2021
Net income (loss) from continuing operations$49.2 $72.7 $29.4 $(139.3)$12.0 
Income tax benefit— — — (4.4)(4.4)
Interest expense— — — 76.1 76.1 
Depreciation and amortization20.6 19.3 9.9 7.4 57.2 
EBITDA69.8 92.0 39.3 (60.2)140.9 
Share and incentive based compensation— — — 13.6 13.6 
Restructuring and related charges4.1 2.1 — 7.1 13.3 
Transaction related charges2.4 8.6 — 16.2 27.2 
Unallocated shared costs— — — 13.4 13.4 
Non-cash purchase accounting adjustments— 3.4 — — 3.4 
Gain on Energizer investment— — — (6.9)(6.9)
Legal and environmental remediation reserves— — 6.0 — 6.0 
Coevorden tolling related charges— 3.1 — — 3.1 
Other— — — 0.1 0.1 
Adjusted EBITDA$76.3 $109.2 $45.3 $(16.7)$214.1 
Net Sales$676.4 $569.1 $251.0 $— $1,496.5 
Adjusted EBITDA Margin11.3 %19.2 %18.0 %— 14.3 %

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Consolidated Results of Operations
The following is summarized consolidated results of operations for SBH for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020.2021.
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
July 4, 2021June 28, 2020July 4, 2021June 28, 2020April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net salesNet sales$1,162.8 $984.3 $178.5 18.1 %$3,457.5 $2,793.6 $663.9 23.8 %Net sales$807.8 $760.3 $47.5 6.2 %$1,565.0 $1,496.5 $68.5 4.6 %
Gross profitGross profit407.4 348.9 58.5 16.8 %1,233.7 946.9 286.8 30.3 %Gross profit255.6 261.0 (5.4)(2.1)%474.9 513.8 (38.9)(7.6)%
Gross profit marginGross profit margin35.0 %35.4 %(40)bps35.7 %33.9 %180 bpsGross profit margin31.6 %34.3 %(270)bps30.3 %34.3 %(400)bps
Operating expensesOperating expenses309.4 254.3 55.1 21.7 %895.4 830.3 65.1 7.8 %Operating expenses263.7 215.7 48.0 22.3 %506.9 442.6 64.3 14.5 %
Interest expenseInterest expense31.4 36.1 (4.7)(13.0)%133.7 106.5 27.2 25.5 %Interest expense24.7 52.8 (28.1)(53.2)%46.4 76.0 (29.6)(38.9)%
Other non-operating expense (income), net3.0 (56.5)59.5 n/m(4.6)10.2 (14.8)n/m
Income tax expense27.7 53.6 (25.9)(48.3)%63.3 35.3 28.0 79.3 %
Net income from continuing operations35.9 137.6 (101.7)(73.9)%145.9 40.8 105.1 257.6 %
(Loss) income from discontinued operations, net of tax(5.2)8.0 (13.2)n/m(6.6)12.2 (18.8)n/m
Other non-operating income, netOther non-operating income, net(0.9)(2.2)1.3 (59.1)%(0.3)(11.1)10.8 (97.3)%
Income tax benefitIncome tax benefit(6.8)(0.7)(6.1)871.4 %(22.8)(4.8)(18.0)375.0 %
Net (loss) income from continuing operationsNet (loss) income from continuing operations(25.1)(4.6)(20.5)445.7 %(55.3)11.1 (66.4)n/m
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax41.1 40.3 0.8 2.0 %79.9 97.5 (17.6)(18.1)%
Net incomeNet income30.7 145.6 (114.9)(78.9)%139.3 53.0 86.3 162.8 %Net income16.0 35.7 (19.7)(55.2)%24.6 108.6 (84.0)(77.3)%
n/m = not meaningfuln/m = not meaningfuln/m = not meaningful
Net Sales. The following is a summary of net sales by segment for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020 and the principal components of changes in net sales for the respective periods.
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
July 4, 2021June 28, 2020July 4, 2021June 28, 2020April 3, 2022April 4, 2021April 3, 2022April 4, 2021
HHI$419.0 $281.6 $137.4 48.8 %$1,217.2 $908.4 $308.8 34.0 %
HPCHPC274.4 250.6 23.8 9.5 %950.8 805.4 145.4 18.1 %HPC$316.1 $297.9 $18.2 6.1 %$695.8 $676.4 $19.4 2.9 %
GPCGPC257.3 241.5 15.8 6.5 %826.3 684.2 142.1 20.8 %GPC295.1 293.6 1.5 0.5 %597.3 569.1 28.2 5.0 %
H&GH&G212.1 210.6 1.5 0.7 %463.2 395.6 67.6 17.1 %H&G196.6 168.8 27.8 16.5 %271.9 251.0 20.9 8.3 %
Net SalesNet Sales$1,162.8 $984.3 178.5 18.1 %$3,457.5 $2,793.6 663.9 23.8 %Net Sales$807.8 $760.3 47.5 6.2 %$1,565.0 $1,496.5 68.5 4.6 %

(in millions)Three Month Periods EndedNine Month Periods Ended
Net Sales for the period ended June 28, 2020$984.3 $2,793.6 
Increase in HHI131.4 298.2 
Increase in HPC10.6 118.0 
(Decrease) Increase in GPC(17.3)51.6 
(Decrease) Increase in H&G(6.4)59.7 
Acquisition sales34.3 81.4 
Foreign currency impact, net25.9 55.0 
Net Sales for the period ended July 4, 2021$1,162.8 $3,457.5 
(in millions)Three Month Periods EndedSix Month Periods Ended
Net Sales for the period ended April 4, 2021$760.3 $1,496.5 
Increase in GPC7.1 27.2 
Decrease in HPC(6.2)— 
Increase (decrease) in H&G14.5 (0.2)
Acquisition sales49.1 65.7 
Foreign currency impact, net(17.0)(24.2)
Net Sales for the period ended April 3, 2022$807.8 $1,565.0 
Gross Profit. Gross profit for the three month period increased due to higher volumes, positive productivity and cost improvements, plus favorable product mix with a decline in gross profit margin due to increased inflation and shipping costs. Gross profit and gross profit margin for the ninethree and six month period increasedperiods decreased primarily due to sales volumes, positive productivityaccelerated freight and input cost improvements, withinflation pacing ahead of pricing actions, lower restructuring and depreciation costs duevolume compared to the exiting GPC facilities in LATAM in the prior year reopening trends and stimulus spending, with constrained supply chain reducing product availability to meet customer demands, partially offset by increased inflationproductivity and shipping costs and benefits from retrospective tariff exclusions in the prior year.product mix improvements.

Operating Expenses. Operating expenses for the three month period increased due to an increase in selling, general and administrative expenses of $50.5$23.4 million largely attributable to higher volumes, increased advertising and marketing investments,from higher distribution and transportation costs, operating inefficiencies from labor inflation and increasedturnover with continued investment in marketing and new product development, offset by lower incentive compensation costs, pluswith an increase in restructuring and related charges of $12.2 million and an increase in transaction related costs of $5.0$12.0 million partially offset by a decreasefor further investments in strategic transactions and restructuring and related charges of $2.7 million. Operating expenses for the nine month period increased due to an increase in selling and general and administrative expenses of $113.1 million attributable to higher volumes and increased advertising and marketing investments, higher distribution costs and increased incentive costs plus an increase in transaction related costs of $24.0 million; partially offset by a decrease in restructuring and related charges of $27.4 million and the recognition of a loss on assets held for sale of $26.8 million and $24.2 million write-off from impairment of intangible assets associated with the Coevorden divestiture in the prior year.initiatives. See Note 4 – Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail on restructuring. Seeand Note 1 -– Basis of Presentation and Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail on restructuring initiatives and transaction-related charges.charges, respectively. Operating expenses for the six month period increased due to an increase in selling and general and administrative expenses of $34.6 million attributable to higher distribution and transportation costs, operating inefficiencies from labor inflation and turnover, continued investment in marketing and new product development, offset by lower incentive compensation costs, with an increase in restructuring and related charges of $20.4 million and increase in transaction related costs of $7.9 million for further investments in strategic transactions and restructuring initiatives. See Note 4 – Restructuring and Related Charges and Note 1 – Basis of Presentation and Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail on restructuring initiatives and transaction-related charges, respectively.

Interest Expense. Interest expense for the three and six month periodperiods decreased due to lower average borrowing rate. Interest expense for the nine month period increased due to the refinancing activity within the prior year resulting in a make whole premium of $23.4 million and write-off of unamortized debt issuance costs of $7.9 million recognized as interest expense.the prior year. See Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Other non-operating income, net.Non-Operating Income, Net. Other non-operating income for the three and ninesix month periods isdecreased due to realized and unrealized gains on our investment in Energizer common stock duringin the period,prior year which the Company sold its remaining investment in January 2021. See Note 13 – Fair Value of Financial Instruments in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.
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Income Taxes.Our estimated annual effective tax rate was impacted for the three and ninesix month periods by income earned outside the U.S. that is subject to U.S. tax, including the U.S. tax on global intangible low taxed income, certain nondeductible expenses, foreign rates that differ from the US federal statutory rate, and state income taxes. During the threesix month period ended July 4, 2021,April 3, 2022, the Company recorded a $7.6$3.2 million deferred tax expensebenefit due to the increase in the United Kingdom’s future tax rate andimpact of an amended return filed during the nine month period ended July 4, 2021,year and the Company also recognized a $5.3an additional $2.5 million benefit due to favorable Regulations issuedwindfalls associated with the vesting of share compensation during the year.
(Loss) Income From Discontinued Operations. The incomeIncome or loss attributable to discontinued operations primarily reflect the income from the discontinued operations of the HHI segment and the incremental changes to tax and legal indemnifications associated with the Company's divestitures of its GBL division and GAC divisions to Energizer during the year ended September 30, 2019. Income from discontinued operations attributable to the HHI segment increased during the three month period ended April 3, 2022 due to pricing increases offsetting increasing inflationary costs and freight spend and lower depreciation and amortization while held for sale. Income from discontinued operations attributable to the HHI segment decreased during the six month period ended April 3, 2022 due to lower sales volume following post-pandemic volumes in the prior year, increasing inflationary costs and higher freight spend outpacing pricing actions and lower depreciation and amortization while held for sale.
Noncontrolling Interest. The net income attributable to noncontrolling interest reflects the share of the net income of our subsidiaries, which are not wholly-owned, attributable to the accounting interest. Such amount varies in relation to such subsidiary’s net income or loss for the period and the percentage interest not owned by SBH.
SB/RH
The following is summarized consolidated results of operations for SB/RH for the three and ninesix month periods ended JulyApril 3, 2022 and April 4, 2021 and June 28, 2020:2021:
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
July 4, 2021June 28, 2020July 4, 2021June 28, 2020April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net salesNet sales$1,162.8 $984.3 $178.5 18.1 %$3,457.5 $2,793.6 $663.9 23.8 %Net sales$807.8 $760.3 $47.5 6.2 %$1,565.0 $1,496.5 $68.5 4.6 %
Gross profitGross profit407.4 348.9 58.5 16.8 %1,233.7 946.9 286.8 30.3 %Gross profit255.6 261.0 (5.4)(2.1)%474.9 513.8 (38.9)(7.6)%
Gross profit marginGross profit margin35.0 %35.4 %(40)bps35.7 %33.9 %180 bpsGross profit margin31.6 %34.3 %(270)bps30.3 %34.3 %(400)bps
Operating expensesOperating expenses307.9 252.7 55.2 21.8 %892.6 824.1 68.5 8.3 %Operating expenses262.9 215.0 47.9 22.3 %505.7 441.2 64.5 14.6 %
Interest expenseInterest expense31.5 36.0 (4.5)(12.5)%133.9 106.0 27.9 26.3 %Interest expense24.8 52.9 (28.1)(53.1)%46.7 76.1 (29.4)(38.6)%
Other non-operating expense (income), net2.9 (56.5)59.4 n/m(4.6)10.2 (14.8)n/m
Income tax expense28.2 35.4 (7.2)(20.3)%63.9 18.8 45.1 239.9 %
Net income (loss) from continuing operations36.9 81.3 (44.4)(54.6)%147.9 (12.2)160.1 n/m
(Loss) income from discontinued operations, net of tax(5.2)8.0 (13.2)n/m(6.6)12.2 (18.8)n/m
Other non-operating income, netOther non-operating income, net(0.9)(2.2)1.3 (59.1)%(0.4)(11.1)10.7 (96.4)%
Income tax benefitIncome tax benefit(6.6)(0.5)(6.1)1,220.0 %(22.4)(4.4)(18.0)409.1 %
Net (loss) income from continuing operationsNet (loss) income from continuing operations(24.6)(4.2)(20.4)485.7 %(54.7)12.0 (66.7)n/m
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax41.1 40.4 0.7 1.7 %79.9 97.6 (17.7)(18.1)%
Net incomeNet income31.7 89.3 (57.6)(64.5)%141.3 — 141.3 n/mNet income16.5 36.2 (19.7)(54.4)%25.2 109.6 (84.4)(77.0)%
n/m = not meaningfuln/m = not meaningfuln/m = not meaningful
The changes in SB/RH for the three and ninesix month periods are primarily attributable to the changes in SBH previously discussed.
Segment Financial Data
Hardware & Home Improvementand Personal Care
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
July 4, 2021June 28, 2020July 4, 2021June 28, 2020April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net salesNet sales$419.0 $281.6 $137.4 48.8 %$1,217.2 $908.4 $308.8 34.0 %Net sales$316.1 $297.9 $18.2 6.1 %$695.8 $676.4 $19.4 2.9 %
Operating income61.1 35.0 26.1 74.6 %219.3 130.5 88.8 68.0 %
Operating income margin14.6 %12.4 %220 bps18.0 %14.4 %360 bps
Operating (loss) incomeOperating (loss) income(19.8)11.5 (31.3)n/m0.6 48.2 (47.6)(98.8)%
Operating (loss) income marginOperating (loss) income margin(6.3 %)3.9 %n/m0.1 %7.1 %(700)bps
Adjusted EBITDAAdjusted EBITDA$68.0 $43.6 $24.4 56.0 %$239.6 $156.0 $83.6 53.6 %Adjusted EBITDA$10.6 $25.4 $(14.8)(58.3)%$38.0 $76.3 $(38.3)(50.2)%
Adjusted EBITDA marginAdjusted EBITDA margin16.2 %15.5 %70 bps19.7 %17.2 %250 bpsAdjusted EBITDA margin3.4 %8.5 %(510)bps5.5 %11.3 %(580)bps
n/m = not meaningfuln/m = not meaningfuln/m = not meaningful
Net sales for the three month period increased primarily as a result of the Tristar Business acquisition sales of $35.8 million, with a decrease in organic net sales of $6.2 million, or 2.1%, excluding unfavorable foreign exchange impact and acquisition sales, due to slower demand in small kitchen appliances and personal care appliances categories compared to prior year reopening trends, offset by growth across all product categories with strongexpanded distribution and consumer demand in the LATAM region and successful promotions and new product introductions. Security sales experienced growth across retail, e-commerce and new build channels in part driven by prior year COVID-19 supply related disruptions related to temporary government ordered shutdowns. Organic net sales increased $131.4 million, or 46.7%, excluding favorable foreign exchange impacts.garment care products. Net sales for the ninesix month period increased by growth across all product categoriesfrom Tristar Business acquisition sales of $35.8 million, with fulfillment of previously disclosed open orders inorganic net sales flat compared to the prior year, retail inventory rebuild, strong consumer demand,excluding unfavorable foreign currency impact and commercial activity through promotionsacquisition sales, due to product availability issues related to supply chain constraints and new product introductions, with growth across retail, e-commerce and new build channels; coupled withcategory demands compared to prior year COVID-10 supply related disruptions related to temporary government ordered shutdowns. Organic net sales increased $298.2 million, or 32.8%, excluding favorable foreign exchange impact.
Operating income and adjusted EBITDA for the three month period increased due to increased volumes and productivity improvements, partiallyreopening trends, offset by higher freightexpanded distribution in the LATAM region and input cost inflation, and higher marketing investments. growth in garment care products.
Operating income, adjusted EBITDA and margins for the ninethree month period increased due to increased volumes, productivity improvements, favorable pricing programs and product mix, partially offsetdecreased driven by prior year's benefits from retrospective tariff exclusion, higheraccelerated freight and input cost inflation COVID-19ahead of incremental pricing actions and continued investments in marketing and new product development initiatives partially offset by productivity improvements with incremental transaction related costs attributable to the Tristar Business acquisition and higherrelated non-cash purchase accounting adjustments further impacting operating income and margin. Operating income, adjusted EBITDA and margins for the six month period decreased driven by accelerated freight and input cost inflation ahead of incremental pricing actions and continued investments in marketing investments.and new product development initiatives partially offset by productivity improvements with incremental transaction related costs attributable to the Tristar Business acquisition and related non-cash purchase accounting adjustments further impacting operating income and margin.

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Home and PersonalGlobal Pet Care
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
July 4, 2021June 28, 2020July 4, 2021June 28, 2020April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net salesNet sales$274.4 $250.6 $23.8 9.5 %$950.8 $805.4 $145.4 18.1 %Net sales$295.1 $293.6 $1.5 0.5 %$597.3 $569.1 $28.2 5.0 %
Operating (loss) income(2.4)11.3 (13.7)n/m45.8 31.5 14.3 45.4 %
Operating (income) income margin(0.9 %)4.5 %(540)bps4.8 %3.9 %90 bps
Operating incomeOperating income19.9 39.8 (19.9)(50.0)%32.2 74.0 (41.8)(56.5)%
Operating income marginOperating income margin6.7 %13.6 %(690)bps5.4 %13.0 %(760)bps
Adjusted EBITDAAdjusted EBITDA$11.8 $25.0 $(13.2)(52.8)%$88.1 $69.4 $18.7 26.9 %Adjusted EBITDA$40.6 $55.6 $(15.0)(27.0)%$79.3 $109.2 $(29.9)(27.4)%
Adjusted EBITDA marginAdjusted EBITDA margin4.3 %10.0 %(570)bps9.3 %8.6 %70 bpsAdjusted EBITDA margin13.8 %18.9 %(510)bps13.3 %19.2 %(590)bps
n/m = not meaningful
Net sales for the three month period increased driven by continued growth in small kitchen appliances and personal care categories, driven by growth in the hair care and garment care products.due to positive pricing with growth in LATAM as traditional retail channels begin reopening.companion animals offset by softness in aquatics compared to higher than usual category sales in the prior year from stimulus spending, further impacted by supply chain capacity constraints and late inventory receipts for supplier manufacturing shut-down earlier in the year impacting product availability to meet customer demands, plus larger than anticipated customer fines and penalties from delayed shipments. Organic net sales increased $10.6$7.1 million, or 4.2%2.4%, excluding favorableunfavorable foreign exchange impact.currency exchange. Net sales for the ninesix month period increased drivendue to positive pricing and Armitage acquisition sales of $8.8 million with increased demand in dog chews and treats, mitigated by strong growth in small appliancestemporary shut-down of key supplier manufacturing facilities and personal care during the holiday season and consumer demand from stay-at-home activity, volume growth through e-commerce channels and newsupply chain capacity constraints impacting product introductions.availability to meet customer demand. Organic net sales increased $118.0$27.2 million, or 14.7%,4.8% excluding favorableunfavorable foreign currency impact.exchange impact and acquisition sales.
Operating income, adjusted EBITDA, and margins for the three month period decreased due to increasinghigher freight and input cost inflation pacing ahead of pricing actions, operating cost inefficiencies from distribution and labor turnover, continued investment in marketing investments,and new product initiatives, partially offset by pricing actions, increased volumeproductivity improvements, with incremental costs incurred to facilitate the transition of its U.S. distribution operations further impacting operating income and productivity improvements.margin. Operating income, adjusted EBITDA, and margins for the ninesix month period increaseddecreased due to higher volumes, productivityfreight and input cost improvements,inflation ahead of pricing actions, operating cost inefficiencies from distribution transitions and labor turnover, unfavorable product mix, and continued investment in marketing and new product initiatives, partially offset by higher inflationproductivity improvements, with incremental costs to facilitate the transition of its U.S. distribution operations further impacting operating income and distribution costs with increased marketing investments.margin.

Home and Garden
Global Pet Care
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
July 4, 2021June 28, 2020July 4, 2021June 28, 2020April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Net salesNet sales$257.3 $241.5 $15.8 6.5 %$826.3 $684.2 $142.1 20.8 %Net sales$196.6 $168.8 $27.8 16.5 %$271.9 $251.0 $20.9 8.3 %
Operating incomeOperating income27.8 36.4 (8.6)(23.6)%101.8 11.3 90.5 n/mOperating income30.4 29.9 0.5 1.7 %14.7 29.4 (14.7)(50.0)%
Operating income marginOperating income margin10.8 %15.1 %(430)bps12.3 %1.7 %1,060 bpsOperating income margin15.5 %17.7 %(220)bps5.4 %11.7 %(630)bps
Adjusted EBITDAAdjusted EBITDA$49.2 $50.6 $(1.4)(2.8)%$158.5 $122.1 $36.4 29.8 %Adjusted EBITDA$37.7 $34.8 $2.9 8.3 %$30.4 $45.3 $(14.9)(32.9)%
Adjusted EBITDA marginAdjusted EBITDA margin19.1 %21.0 %(190)bps19.2 %17.8 %140 bpsAdjusted EBITDA margin19.2 %20.6 %(140)bps11.2 %18.0 %(680)bps
n/m = not meaningful
Net sales for the three month period increased due to continued demand mitigated by lower than anticipated fulfillment levels during a distribution center transition to a new third-party logistics service provider infrom the U.S. andimpact of price adjustments plus acquisition sales of $26.4$13.3 million, from the Armitage acquisition. Organic net sales decreased $17.3 million, or 7.2%, excluding favorable foreign currency exchange impact and acquisition sales. Net sales for the nine month period increased due to continued growth in both our aquatic and companion animal categories with broad-based demandpartially offset by unfavorable weather across distribution channels led by e-commerce growth, mitigated by lower than anticipated fulfillment levels during a distribution center transition to a new third-party logistics service provider inmost of the U.S. which reduced category POS during the quarter and acquisition sales of $73.5 million from the Omega and Armitage acquisitions.caused slowed retail inventory build which delayed our shipments to customers. Organic net sales increased $51.6$14.5 million, or 7.5% excluding favorable foreign exchange impact and acquisition sales.

Operating income, adjusted EBITDA, and margins for the three month period decreased due to the distribution center transition, with lower volumes and incremental operating costs, higher freight and input cost inflation and advertising investments, partially offset by productivity improvements and pricing actions. Operating income, adjusted EBITDA, and margins for the nine month period increased due to higher volumes and pricing, partially offset by higher freight and input costs, advertising investments, with increases in operating income and margin also attributable to the loss on asset held for sale of $26.8 million and impairment of intangible assets of $24.2 million in the prior year associated with the Coevorden divestiture, along with lower restructuring and distribution costs from exiting LATAM operating facilities in the prior year.

Home and Garden
(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance
July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Net sales$212.1 $210.6 $1.5 0.7 %$463.2 $395.6 $67.6 17.1 %
Operating income41.7 50.4 (8.7)(17.3)%71.1 64.8 6.3 9.7 %
Operating income margin19.7 %23.9 %(420)bps15.3 %16.4 %(110)bps
Adjusted EBITDA$53.4 $55.5 $(2.1)(3.8)%$98.6 $80.6 $18.0 22.3 %
Adjusted EBITDA margin25.2 %26.4 %(120)bps21.3 %20.4 %90 bps
n/m = not meaningful
Net sales for the three month period increased with acquisition sales of $7.9 million from the Rejuvenate acquisition and repellent growth from distribution gains offset by earlier delivery of seasonal orders and lower volume in other categories from unfavorable weather. Organic net sales decreased $6.4 million, or 3.0%8.6%, excluding acquisition sales. Net sales for the ninesix month period increased by growth in all product categories driven by strong early season orders across channels and strong early season POS.from the impact of price adjustments plus acquisition sales of $21.1 million. Organic net sales increased $59.7decreased $0.2 million, or 15.1%0.1% excluding acquisition sales.sales, attributable to comparably higher off-season replenishment orders in the prior year to address lower year-end retail inventory levels coupled with the unfavorable spring weather and delayed shipments to customers.
Operating income and adjusted EBITDA for the three month period increased due to pricing adjustments with decreased margins attributable to higher freight and input cost inflation outpacing price increases and continued marketing and product development investment. Operating income and adjusted EBITDA and margins decreased for the six month period ended due to freight and input cost inflation outpacing pricing actions, continued marketing and product development investment and unfavorable product mix.

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Operating income, adjusted EBITDA and margins for the three month period decreased due to lower volumes, advertising and marketing investments partially offset by pricing actions and productivity improvements. Operating income and adjusted EBITDA increased for the nine month period ended due to higher volumes, partially offset by advertising and marketing investments, and higher distribution expenses with operating income and margin being further impacted by incremental transaction related charges and a legal reserve attributable to significant and unusual non-recurring claims.
Liquidity and Capital Resources
The following is a summary of the SBH and SB/RH cash flows from continuing operations for the ninesix month periods ended JulyApril 3, 2022 and April 4, 2021, and June 28, 2020, respectively.
SBHSB/RHSBHSB/RH
Nine Month Periods Ended (in millions)July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Six Month Periods Ended (in millions)Six Month Periods Ended (in millions)April 3, 2022April 4, 2021April 3, 2022April 4, 2021
Operating activitiesOperating activities$24.8 $35.4 $18.4 $(175.0)Operating activities$(212.2)$(107.1)$(244.6)$(113.6)
Investing activitiesInvesting activities$(400.1)$43.4 $(400.1)$43.4 Investing activities$(338.6)$(73.6)$(338.6)$(73.6)
Financing activitiesFinancing activities$(15.2)$(237.1)$(6.5)$(25.5)Financing activities$568.9 $(78.1)$601.4 $(69.4)
Cash Flows from Operating Activities
Cash flows from SBHused in SBH's continuing operations decreased $10.6increased $105.1 million primarily due to increased corporate and transaction related charges of $13.3 million, offset by improved cash flow from continuing operations and working capital, coupled with a decrease in operating results with an increase in cash paid towards working capital for restructuring of $52.9 millioninventory and lowerinflationary costs on raw materials and products, labor and freight, coupled with an increase in cash paid towards for taxes, of $6.0 million.strategic transactions and restructuring initiatives. Cash flows from operating activities fromused in SB/RH continuing operations of SB/RH increased $193.4$131.0 million primarily due to the items previously discussed above except for an incremental operating cash outflow to its parent company for federal net operating losses under the Company’s tax sharing agreement in the prior year.
Cash Flows from Investing Activities
Cash flows fromused in investing activities for SBH continuing operations decreased $443.5increased $265.0 million primarily due to increase inthe cash paid for the acquisition, businessnet cash acquired, for the purchase of $412.5the Tristar Business of $314.3 million duecompared to the acquisitionspurchase of Rejuvenate and Armitage plus cash proceedsof $129.8 million in the prior year, from the divestiture of Coevorden Operations of $30.1 million and discontinued operations of $3.6 million, partially offset by net increase in proceeds from the sale of Energizer common stock of $5.1 million. The Company sold its remaining investment$73.1 million in Energizer common stockthe prior year, with an increase in January 2021. Capitalcapital expenditures decreased $1.2of $7.7 million predominantly due to timing of capital activities as we expectincremental investments in updating the Company's enterprise-wide operating system to make investment in capital projects consistent to prior years.SAP S/4 HANA. Cash flows fromused in investing activities of SB/RH decreased primarily due to the items previously discussed.
Cash Flows from Financing Activities
Cash flows fromprovided by financing activities for continuing operations increased $221.9$647.0 million primarily due lower stock repurchases activity, payment of contingent consideration associated withto increased borrowings on the GBL divestiture inRevolver Facility to support the prior year;Tristar Business acquisition and working capital requirements from continued supply disruptions, partially offset by reduced cash inflowincrease in stock repurchase activity and higher share based stock award withholding payments from debt financing primarily due to lower borrowingsthe vesting on LTIP grants. During the six month period ended April 3, 2022, the Company realized $775.0 million of proceeds from the Revolver Facility in the current year to support working capital needs. During the nine month period ended July 4, 2021, the Company realized $997.0 millionwith amortizing payments on other outstanding debt of proceeds from new Term Loan Facility, Revolver Facility and issuance of senior notes, net discount, with payment of $800.0 million of outstanding principal on senior notes and make whole premiums of $23.4 million using proceeds, plus paydown of assumed debt from the acquisition of Armitage.$6.5 million. Refer to Note 10 -– Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information on debt borrowings. During the six month period ended April 3, 2022, the Company repurchased $134.0 million of treasury stock at an average cost of $97.34, primarily through the Company's 10b5-1 repurchase plan which the Company completed during the six month period ended April 3, 2022. There has beenwas no issuance of common stock, other than through the Company’s share-based compensation plans with reduced spending on common stock repurchase activity of $312.3 million from the accelerated share repurchase arrangement and open market purchases in the prior year.which is recognized non-cash financing activities. See Note 1513 – Shareholders’ Equity and Note 14 - Share Based Compensation in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail. During the ninesix month periodperiods ended JulyApril 3, 2022 and April 4, 2021, and June 28, 2020, SBH made cash dividend payments of $53.6$34.4 million and $57.2$35.7 million, respectively, or $0.42 per share, respectively.share. Cash flows from financing activity of SB/RH increased $19.0$670.8 million and is highly dependent upon the financing cash flow activities of SBH.
Liquidity Outlook
Our ability to generate significant cash flow from operating activities coupled with our expected ability to access the credit markets, enables us to execute our growth strategies and return value to our shareholders. Our ability to make principal and interest payment on borrowings under our debt agreements and our ability to fund planned capital expenditures will depend on the ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. Based upon our current level of operations, existing cash balances and availability under our credit facility, we expect cash flows from operations to be sufficient to meet our operating and capital expenditure requirements for at least the next 12 months. Additionally, we believe the availability under our credit facility and access to capital markets are sufficient to achieve our longer-term strategic plans. As of July 4, 2021,April 3, 2022, the Company had borrowing availability of $478.0$308.4 million, net of outstanding letters of credit, under our credit facility. Liquidity and capital resources of SB/RH are highly dependent upon the cash flow activities of SBH.
Short-term financing needs primarily consist of working capital requirements, restructuring initiatives, capital spending, and periodic principal and interest payments on our long-term debt. Long-term financing needs depend largely on potential growth opportunities, including acquisition activity and repayment or refinancing of our long-term obligations. We may, from time-to-time, seek to repurchase shares of our common stock. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, and other factors. Our long-term liquidity may be influenced by our ability to borrow additional funds, renegotiate existing debt, and raise equity under terms that are favorable to us. We also have long-term obligations associated with defined benefit plans with expected minimum required contributions that are not considered significant to the consolidated group.
We may, from time-to-time, seek to repurchase shares of our common stock. During the fourth quarter ended September 30, 2021, SBH entered into a $150.0 million rule 10b5-1 repurchase plan to facilitate daily market share repurchases through September 16, 2022, until the cap set forth in the plan was reached or until the plan was terminated. The Company completed share repurchases of $150.0 million under the rule 10b5-1 repurchase plan during the three month period ended April 3, 2022. Any further repurchase activity, if any, will dependent on prevailing market conditions, our liquidity requirements and other factors.
We maintain a capital structure that we believe provides us with sufficient access to credit markets. When combined with strong levels of cash flow from operations, our capital structure has provided the flexibility necessary to pursue strategic growth opportunities and return value to our shareholders. The Company’s access to capital markets and financing costs may depend on the Company’s credit ratings. None of the Company’s current borrowings are subject to default or acceleration as a result of a downgrading of credit ratings, although a downgrade of the Company’s credit ratings could increase fees and interest charges on future borrowings. At July 4, 2021,April 3, 2022, we were in compliance with all covenants under the Senior Credit Agreement and the indentures governing the 3.875% Notes, 5.00% Notes, 5.50% Notes, 5.75% Notes, and 4.00% Notes.
A portion of our cash balance is located outside the U.S. given our international operations. We manage our worldwide cash requirements centrally by reviewing available cash balances across our worldwide group and the cost effectiveness with which this cash can be accessed. We generally repatriate cash from non-U.S. subsidiaries, provided the cost of the repatriation is not considered material. The counterparties that hold our deposits consist of major financial institutions.
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The majority of our business is not considered seasonal with a year round selling cycle that is overall consistent during the fiscal year with the exception of our H&G segment. H&G sales typically peak during the first six months of the calendar year (the Company's second and third fiscal quarters) due to customer seasonal purchasing patterns and the timing of promotional activity. This seasonality requires the Company to ship large quantities of product ahead of peak consumer buying season that can impact cash flow demands to meet manufacturing and inventory requirements earlier in the fiscal year, as well as extended credit terms and/or promotional discounts throughout the peak season.
TheFrom time to time the Company enters into factoring agreements and customers' supply chain financing arrangements to provide for the sale of certain trade receivables to unrelated third-party financial institutions. The factored receivables are accounted for as a sale without recourse, and the balance of the receivables sold are removed from the Condensed Consolidated Balance Sheet at the time of the sales transaction, with the proceeds received recognized as an operating cash flow. Amounts received from customers for factored receivables are recognized as a payable and remitted to the factor based upon terms of the factoring agreements. Additionally, the Company facilitates a voluntary supply chain financing program to provide certain of its suppliers with the opportunity to sell receivables due from the Company (the Company's trade payables) to an unrelated third-party financial institution under the sole discretion of the supplier and the participating financial institution. There are no guarantees provided by the Company or its subsidiaries and we do not enter into any agreements with the suppliers regarding their participation. The Company's responsibility is limited to payments on the original terms negotiated with its suppliers, regardless of whether the suppliers sell their receivables to the financial institution, and continue to be recognized as accounts payable on the Company's Condensed Consolidated Balance Sheet with cash flow activity recognized as an operating cash flow.
The COVID-19 pandemic has not, as of the date of this report, materially impacted our operations or demand for our productsand cash flows and has not had a materially negative impact on the Company’s liquidity position, although there can be no assurance that it won't have a material negative impact on us in the future. Nonetheless, we continue to actively monitor our global cash balances and liquidity, and if necessary, could reinitiate mitigating efforts to manage non-critical capital spendspending and assess operating spend to preserve cash and liquidity. During the prior year,Despite recent inflationary costs and rising freight costs, we had temporarily suspended treasury repurchase activity, but given the improved economic situation and the Company's liquidity, we may consider opportunistic share repurchases from time-to-time. 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. However, the continued spread ofeconomic and social disruption attributable to the COVID-19 has ledpandemic could lead to disruption and volatility in the global capital markets, which, depending on future developments, could impact our capital resources and liquidity in the future.
Off-Balance Sheet Arrangements
During the three month period ended April 3, 2022, there has been no material changes to our debt obligations, lease obligations, employee benefit obligations or other contractual obligations or commercial commitments previously discussed in our Annual Report on Form 10-K for the year ended September 30, 2021 other than the increased revolver capacity and borrowings under the Company's Credit Agreement, which have a maturity date of June 30, 2025 and are subject to repayment or re-borrowing by the Company without penalty. See Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail. We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Contractual Obligations & Other Commercial Commitments
There has otherwise been no material changes to our contractual obligations & other commercial commitments as discussed in our Annual Report on Form 10-K for the year ended September 30, 2020.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting estimates as discussed in our Annual Report on Form 10-K for the year ended September 30, 2020.2021.
New Accounting Pronouncements
See Note 1 – Basis of Presentation and Significant Accounting Policies of Notes to the Condensed Consolidated Financial Statements elsewhere included in this Quarterly Report for information about accounting pronouncements that are newly adopted and recent accounting pronouncements not yet adopted.
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Guarantor Statements -– SB/RH
SBI has issued the 5.75% Notes under the 2025 Indenture, the 4.00% Notes under the 2026 Indenture, the 5.00% Notes under the 2029 Indenture, the 5.50% Notes under the 2030 Indenture, the 5.75% Notes under the 2025 Indenture, the 4.00% Notes under the 2026 Indenture, and the 3.875% Notes under the 2031 IndentureIndentures (collectively, the “Notes”). The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by SB/RH and SBI’s domestic subsidiaries. The Notes and the related guarantees rank equally in right of payment with all of SBI and the guarantors’ existing and future senior indebtedness and rank senior in right of payment to all of SBI and the guarantors’ future indebtedness that expressively provide for its subordination to the Notes and the related guarantees. Non-guarantor subsidiaries primarily consist of SBI’s foreign subsidiaries.
The following financial information consists of summarized financial information of the Obligor, presented on a combined basis. The “Obligor” consists of the financial statements of SBI as the debt issuer, SB/RH as a parent guarantor, and the domestic subsidiaries of SBI as subsidiary guarantors. Intercompany balances and transactions between SBI and the guarantors have been eliminated. Investments in non-guarantor subsidiaries and the earnings or losses from those non-guarantor subsidiaries have been excluded.
Nine Month Period EndedYear EndedSix Month Period EndedYear Ended
(in millions)(in millions)July 4, 2021September 30, 2020(in millions)April 3, 2022September 30, 2021
Statements of Operations DataStatements of Operations DataStatements of Operations Data
Third party net salesThird party net sales$2,341.6 $2,805.0 Third party net sales$895.6 $1,774.2 
Intercompany net sales to non-guarantor subsidiariesIntercompany net sales to non-guarantor subsidiaries60.2 63.5 Intercompany net sales to non-guarantor subsidiaries8.6 18.8 
Net salesNet sales2,401.8 2,868.5 Net sales904.2 1,793.0 
Gross profitGross profit794.0 938.0 Gross profit228.9 555.5 
Operating income167.3 187.4 
Net income (loss) from continuing operations18.3 (46.8)
Net income (loss)11.7 (32.8)
Net income (loss) attributable to controlling interest11.7 (32.8)
Operating lossOperating loss(120.0)(79.5)
Net loss from continuing operationsNet loss from continuing operations(131.6)(116.2)
Net (loss) incomeNet (loss) income(84.3)28.6 
Net (loss) income attributable to controlling interestNet (loss) income attributable to controlling interest(84.3)28.6 
Statements of Financial Position DataStatements of Financial Position DataStatements of Financial Position Data
Current AssetsCurrent Assets$1,182.2 $1,342.0 Current Assets$2,600.3 $1,999.1 
Noncurrent AssetsNoncurrent Assets3,088.2 2,804.6 Noncurrent Assets2,433.9 2,090.2 
Current LiabilitiesCurrent Liabilities771.9 881.7 Current Liabilities1,127.5 936.1 
Noncurrent LiabilitiesNoncurrent Liabilities3,231.4 3,020.4 Noncurrent Liabilities3,846.1 2,881.7 
The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of July 4, 2021April 3, 2022 and September 30, 20202021 are as follows:
(in millions)(in millions)July 4, 2021September 30, 2020(in millions)April 3, 2022September 30, 2021
Statements of Financial Position DataStatements of Financial Position DataStatements of Financial Position Data
Current receivables from non-guarantor subsidiariesCurrent receivables from non-guarantor subsidiaries$190.7 $161.1 Current receivables from non-guarantor subsidiaries$75.0 $9.5 
Long-term receivable from non-guarantor subsidiariesLong-term receivable from non-guarantor subsidiaries140.0 — Long-term receivable from non-guarantor subsidiaries347.5 202.8 
Current payable to non-guarantor subsidiariesCurrent payable to non-guarantor subsidiaries267.0 368.4 Current payable to non-guarantor subsidiaries284.6 266.2 
Long-term debt with non-guarantor subsidiariesLong-term debt with non-guarantor subsidiaries259.9 212.0 Long-term debt with non-guarantor subsidiaries353.3 123.3 
Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Market Risk Factors
No material change in the Company’s market risk has occurred during the ninesix month period ended July 4, 2021 other thanApril 3, 2022 with the changeexception of the increase in capacity and borrowings under our Revolver Facility that are subject to variable interest rates. If market interest rates continue to increase, the interest rate risk attributableon our variable rate debt will increase and will create higher debt service requirements, which would adversely affect our cash flow and could adversely impact our results of operations. The general levels of SOFR and LIBOR affect our interest expense. As of April 3, 2022, we had $1,171.0 million subject to the issuancevariable interest rates, or 35.6% of the new Term Loan Facility. total debt, which increased from $398.0 million and 15.7% of total debt as of September 30, 2021. Assuming an increase to market rates of 1.0% as of April 3, 2022, we would incur an increase to annual interest expense of $10.0 million.
For additional information, refer to Note 10 – Debt and Note 1211 – Derivatives to the Condensed Consolidated Financial Statement included elsewhere in the Quarterly Report and to Part II, Items 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020.2021.
Interest Rate Risk
Our Revolver Facility and and Term Loan Facility have a variable interest rates. If market interest rates increase, the interest rate on our variable rate debt will increase and will create higher debt service requirements, which would adversely affect our cash flow and could adversely impact our results of operations. The general levels of U.S., European Union interest rates and LIBOR affect interest expense. As of July 4, 2021, we had $499.1 million subject to variable interest rates, or 18.4% of total debt. Assuming an increase to market rates of 1% as of July 4, 2021, we would incur an increase to interest expense of $5.1 million. Our Term Loan Facility and Revolver Facility allows for the LIBO rate to be phased out and replaced with the Secured Overnight Financing Rate and therefore we do not anticipate a material impact by the expected upcoming LIBOR transition.
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Item 4.    Controls and Procedures

Spectrum Brands Holdings, Inc.
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) pursuant to Rule 13a-15(b) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, SBH’s management, including our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, and is accumulated and communicated to SBH’s management, including SBH’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting. During the three month period ended July 4, 2021, SBH continued updating certain internal controls and supporting processes to address previously identified material weakness related to ineffective information technology general controls (ITGCs) related to user access and roleThere was no change reviews over certain information technology systems in the EMEA region attributable to ineffective risk assessment and communication of control activities related to the transfer of ITGC operations provided TSAs. SBH will continue to develop and update such internal controls and processes during the fiscal year to fully remediate the identified deficiencies. Other than those described above, there were no additional changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended) that occurred during the three and six month periodperiods ended July 4, 2021April 3, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls.SBH’s management, including our Chief Executive Officer and Chief Financial Officer, does not expect that SBH’s disclosure controls and procedures or SBH’s internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within SBH have been detected.
SB/RH Holdings, LLC
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) pursuant to Rule 13a-15(b) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, SB/RH’s management, including our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, and is accumulated and communicated to SB/RH’s management, including SB/RH’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting. During the three month period ended July 4, 2021, SB/RH continued updating certain internal controls and supporting processes to address previously identified material weakness related to ineffective information technology general controls (ITGCs) related to user access and roleThere was no change reviews over certain information technology systems in the EMEA region attributable to ineffective risk assessment and communication of control activities related to the transfer of ITGC operations provided TSAs. SB/RH will continue to develop and update such internal controls and processes during the fiscal year to fully remediate the identified deficiencies. Other than those described above, there were no additional changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended) that occurred during the three and six month periodperiods ended July 4, 2021April 3, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls. SB/RH’s management, including our Chief Executive Officer and Chief Financial Officer, does not expect that SB/RH’s disclosure controls and procedures or SB/RH’s internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within SB/RH’s have been detected.
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PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
Litigation
We are a defendant in various litigation matters generally arising in the ordinary course of business. See risk factors below and Note 1917 – Commitments and Contingencies included elsewhere in this Quarterly Report. Based on information currently available, we do not believe that any matters or proceedings presently pending will have a material adverse effect on our results of operations, financial condition, liquidity or cash flows.
Item 1A.    Risk Factors
Information about our risk factors is contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 20202021 filed with the SEC on November 18, 2020.23, 2021 and in Item 1A of our Quarterly Reports on Form 10-Q for quarterly periods subsequently filed. We believe that at July 4, 2021,as of April 3, 2022, with the exception of changes in the risk factors discussed below, there have been no material changes in our risk factors from those disclosed in Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2020.2021 and in Item 1A of our Quarterly Reports on Form 10-Q for quarterly periods subsequently filed..
We face a number of local, regional, and global uncertainties and potential disruptions which could adversely impact our businesses.
We face a number of local, regional, and global uncertainties and potential disruptions which could adversely impact our businesses, our financial performance or liquidity, and our ability to carry out our go-forward plans and strategies. These economic uncertainties and potential disruptions include a slow-down in the general economy; reduced market growth rates; increased inflation rates and cost of goods; increased fuel and employee costs; higher interest rates; tighter credit markets; changes in government policies, including the imposition of tariffs or import costs; the deterioration of economic relations between countries or regions; the escalation or continuation of armed conflict, hostilities or economic sanctions between countries or regions, which can negatively impact our ability to supply or sell our products and otherwise conduct our day-to-day operations. For instance, the conflict between Russia and Ukraine has led us to terminate, reduce or significantly change our business activities in these regions and certain surrounding regions. These efforts may have to continue or accelerate, including us having to further reduce or cease doing business within Russia, Ukraine, and certain surrounding regions, which could have a negative impact on our ability to collect outstanding accounts receivables, impose additional costs and negatively impact our business performance. In addition, the economic sanctions and hostilities in Russian and Ukraine, may negatively impact our and our customers’ financial viability, which may negatively impact us or the demands or economic viability of our customers not only in Russia but also in other parts of the world.

Additionally, global economic conditions or restrictions from armed conflicts or the COVID-19 pandemic may cause our suppliers, distributors, contractors, or other third-party partners to suffer financial or operating difficulties that they cannot overcome, resulting in their inability to provide us with the materials and services we need, in which case our business and results of operations could be adversely affected. For instance, our suppliers in Asia and other parts of the world have, and may continue to experience, shutdown or limitations in their operations as result of the COVID-19 pandemic, which may contain or limit our ability to supply or distribute our products to our customers and negatively impact our business. Moreover, we have experienced, and may continue to experience, delays in the receipt of certain goods from international and domestic shipping origins as a result of the COVID-19 pandemic and more general global supply chain constraints in both fiscal 2021 and fiscal 2022. While we have taken certain remediating actions in response to the ongoing global supply chain challenges, these measures may not be sufficient and other supply chain challenges may continue to arise that are beyond our control and could negatively affect our business and financial performance.

Moreover, we continue to transition our third-party logistics service provider at our existing Edwardsville, IL distribution center and are also adding another distribution center nearby. These efforts require incorporating a new service provider into our distribution capabilities and adding another distribution center into our operations. These efforts are complicated and require coordination among a number of our stakeholder, including our suppliers and transportation and logistics handlers. These changes and updates are inherently difficult and are made even more difficult by the other uncertainties and potential disruptions our business faces. We do not control the operations of these third parties and are dependent on them to execute our orders and deliver our products in a timely and efficient way. The failure of these third parties to fulfill all of their obligations to us could result in lost sales, penalties and other adverse effects on our business. While we believe that optimizing our distribution centers and other aspects of our supply chain and customer delivery network will allow us to manage our inventory more efficiently and more efficiently respond to customer demands, there can be no assurance that we will realize such benefits. We have experienced, and may continue to experience, delays in executing these efforts. Our inability to execute, or timely execute these efforts, has resulted in us being unable to supply, or timely supply, our products to our customers or incurring higher costs and reductions in revenues, incurring penalties imposed by our customers, or may disrupt our business operations.

Furthermore, our raw materials are sourced from industries characterized by a limited supply base, and their cost can fluctuate substantially. Under many of our supply arrangements, the price we pay for raw materials fluctuates along with certain changes in underlying commodities costs. Price increases for our raw materials have placed pressure on our costs and could continue to do so, and we may not be able to effectively hedge or pass along any such increases to our customers or consumers. Furthermore, any price increases passed along to our customers or consumers could significantly reduce demand for our products and could negatively affect our business and financial performance.
The integration of the Tristar Business into our HPC segment may be more difficult, time-consuming, or costly than expected. Synergies and other anticipated benefits may not be realized within the expected time frames, or at all.
On February 18, 2022 we completed the acquisition of the Tristar Business. Our ability to realize the anticipated benefits of the acquisition of the Tristar Business depend, to a large extent, on our ability to integrate the acquired business into our current HPC segment in a manner that facilitates growth opportunities and achieves projected growth trends without adversely affecting revenue and investments in future growth. The failure to meet the challenges involved in combining the Tristar Business with our current HPC segment and to realize the anticipated benefits from such combination, including expected synergies, could adversely affect our results of operations.

The overall combination of our businesses may also result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customer and other business relationships. The difficulties of combining the operations of the companies include, among others: diversion of management’s attention to integration matters; difficulties in integrating operations and systems; challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the two companies; difficulties in integrating employees and attracting and retaining key personnel, challenges in retaining existing, and obtaining new customers, suppliers, employees and others; difficulties in achieving anticipated cost savings, synergies, business opportunities, financing plans and growth prospects from the combination; difficulties in managing the expanded operations of a larger HPC segment; challenges in continuing to develop valuable and widely accepted products; contingent liabilities that are larger than expected; and potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the acquisition of the Tristar Business.

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Even if our combined operations are integrated successfully, the full benefits of the acquisition of the Tristar Business, including anticipated synergies, cost savings or sales or growth opportunities, may not be realized, and these benefits may not be achieved within our anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of our businesses. Many of these factors are outside of our control, and any one of them could result in lower revenues, higher costs and diversion of management time and energy, which could materially impact our business, financial condition, and results of operations.
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Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
On May 4, 2021, the Board of Directors approved a new share repurchase program authorizing the purchase of up to $1 billion of common stock. The new share repurchase program commenced immediately and replaces the previous program. The authorization is effective for 36 months. The share repurchase program permits shares to be repurchased in open market or through privately negotiated transactions, including by direct purchases or purchases pursuant to derivative instruments or other transactions (including pursuant to accelerated share repurchase agreements, the writing and settlement of put options and the purchase and exercise of call options). The number of shares to be repurchased, and the timing of any repurchases, will depend on factors such as the share price, economic and market conditions, and corporate and regulatory requirements. The share repurchase program may be suspended, amended or discontinued at any time.
The following table summarizes the common stock repurchases under the previous program for the ninethree month period ended July 4, 2021:April 3, 2022:
Total Number
of Shares
Purchased
Average
Price Paid
Per Share
Total Number
of Shares Purchased
as Part of Plan
Approximate Dollar Value
of Shares that may
Yet Be Purchased
As of September 30, 202010,686,937 $56.66 10,686,937 $394,436,227 
October 1, 2020 to November 1, 2020— — — 394,436,227 
November 2, 2020 to November 29, 2020647,498 65.27 647,498 352,176,858 
November 30, 2020 to January 3, 2021— — — 352,176,858 
As of January 3, 202111,334,435 57.16 11,334,435 352,176,858 
January 4, 2021 to January 31, 2021— — — 352,176,858 
February 1, 2021 to February 28, 2021— — — 352,176,858 
March 1, 2021 to April 4, 2021— — — 352,176,858 
As of April 4, 202111,334,435 $57.16 11,334,435 $352,176,858 
Total Number
of Shares
Purchased
Average
Price Paid
Per Share
Total Number
of Shares Purchased
as Part of Plan
Approximate Dollar Value
of Shares that may
Yet Be Purchased
As of January 2, 20221,991,167 $95.57 1,991,167 $809,697,953 
January 3, 2022 to January 30, 2022248,200 96.90 248,200 785,647,294 
January 31, 2022 to February 27, 2022— — — 785,647,294 
February 28, 2022 to April 3, 2022— — — 785,647,294 
As of April 3, 20222,239,367 $95.72 2,239,367 $785,647,294 
During the fourth quarter ended September 30, 2021, SBH entered into a $150.0 million rule 10b5-1 repurchase to facilitate daily market share repurchases through September 16, 2022, until the cap was reached or until the plan was terminated. The following table summarizes the common stockCompany completed share repurchases of $150.0 million under the newly approved program effective May 4, 2021 forrule 10b5-1 repurchase plan during the ninethree month period ended July 4, 2021:
Total Number
of Shares
Purchased
Average
Price Paid
Per Share
Total Number
of Shares Purchased
as Part of Plan
Approximate Dollar Value
of Shares that may
Yet Be Purchased
As of April 4, 2021— $— — $1,000,000,000 
April 5, 2021 to May 2, 2021— — — 1,000,000,000 
May 3, 2021 to May 30, 2020— — — 1,000,000,000 
May 31, 2020 to July 4, 2021115,167 88.22 115,167 989,839,967 
As of July 4, 2021115,167 $88.22 115,167 $989,839,967 

April 3, 2022.
Item 5.    Other Information
None
Item 6.    Exhibits
Please refer to the Exhibit Index.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: AugustMay 6, 20212022
SPECTRUM BRANDS HOLDINGS, INC.
By:/s/ Jeremy W. Smeltser
Jeremy W. Smeltser
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: AugustMay 6, 20212022
SB/RH HOLDINGS, LLC
By:/s/ Jeremy W. Smeltser
Jeremy W. Smeltser
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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EXHIBIT INDEX
Exhibit 10.1
Exhibit 10.2
Exhibit 21.1
Exhibit 31.1
Exhibit 31.2
Exhibit 31.3
Exhibit 31.4
Exhibit 32.1
Exhibit 32.2
Exhibit 32.3
Exhibit 32.4
101.INSXBRL Instance Document**
101.SCHXBRL Taxonomy Extension Schema Document**
101.CALXBRL Taxonomy Extension Calculation Linkbase Document**
101.DEFXBRL Taxonomy Extension Definition Linkbase Document**
101.LABXBRL Taxonomy Extension Label Linkbase Document**
101.PREXBRL Taxonomy Extension Presentation Linkbase Document**
* Filed herewith
** In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be "furnished" and not "filed."
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