Douglas L. Martin
Thanks, David, everyone. good morning, and
Turning internal the to challenges in now to top-line combined our quarter. and external and headwinds margins heavily weigh operating slide X, on
half second fiscal of the EBITDA produce expect year to We the operations. greater continuing adjusted from
continuing magnitude basis full QX by DC shortfall free and the guidance and However, our adjusted caused the the $XXX operations million on our cash have total of million. EBITDA inefficiencies adjusted at late manufacturing us a revise flow midpoint for start-up by company downward to $XX year from and
growth by net our two was operations. $XX excluding decline. million several last XX, driven sales the Pet favorable of X.X% Reported there slide X.X% acquisitions million to sales of Turning fell net organic and discrete currency, acquisition from sales to sales evaluating organic are $XX.X continuing items consider of QX of net spring, when Pet
HHI levels. due and of customer normal complete before we about backlogs not million million facility million GAC First, higher to were that Auto customer return consolidations and in-house or $X of developed orders quarter but $XX about orders to to the efficiency Global and HHI worked $XX in operating as shipped order end Care in total, March
end complete the by to of ship the of QX, return to fiscal in most expect operating normal year-end. orders We and these rhythms
whereas planned of our cold U.S. much and which as in & unfavorable and of the of retailers POS quarter – versus Northeast, wet mix remind customer unusually Garden orders weather. million. you and the those branded nearly at year were to the in months orders. also shipped affected adversely pre-season created due timing quarter this with prior the revenues, This declined needless reducing March across delayed estimate Second significantly Home label We orders private to February delaying certain especially $XX and/or load-in impact the were QX in the major
of of season Garden still the multi-year performance to Home expect through the gain build most the with on traditional year. However, we share ahead, continue its to & balance
the as expected about planned is Third, in sales of million on million dog year. European X.X% agreement $X total or exit about to tolling the the impact which food QX a were Pet, $XX of still and continuing cat had customer and from expected reduced
to lapped also combined been of able items sluggishness these sales million. $X totaled that from in to sales $XX from channels. by in about pet recall impacted impact be specialty The rawhide back. impacted gain U.S. lost in million the U.S. or last continued June's QX be fully we yet Our not QX from also about to distribution have continue
are distribution and impact Turning the are center We But us. the margins each expect HHI of higher do Global distribution costs, biggest and unfavorable QX decline headwinds. to operations product/mix pronounced shortfall. to to the to in also and is our largely are not HHI capabilities realize however, ambition. Auto our the We in do expansion more input margins the rising XX believe inefficiencies margin which half transitory operating nature our in U.S. materially over margin Broad-based, we March contributed offset these business commodity decline. basis costs also believe freight point across the adverse unable behind in XX slide representative term. XX, and not annual and longer given adjusted and these were margins GAC In businesses. EBITDA Care inefficiencies revenue hampered of underlying the than challenges, overall we manufacturing first short-term, to major were and drivers EBITDA our The
adjusted – seasons Garden increase Auto than half, the more are versus & Home delivering in Care's Global second and first with the XX% a EBITDA increase sales the to Looking about we net and optimistic are ahead. an significant half of
that times operational plants the are rawhide category. pre-recall these to we Care the come the leadership shipments, will chews actions to further the facilities for Global now our behind impacts at Given David and as will American rawhide In capacity that position businesses backlogs expect continue strengthen are to we the levels Pet, growing June order we efficiency year. recall three tailwind operational on-time last improve work of their improve us HHI essentially are in of during confident peak to operating as U.S. more in a create which dog this Auto affected South mentioned, back demand down recent customers the and
driven operations, to decrease largely from continuing HHI coupled increased cash with interest related and restructuring and acquisition to primarily cash borrowings adjusted higher costs by the payments GAC EBITDA projects, consolidation our of us Turning guidance and million $XXX to improvement XXXX to the to our to fund our The for $XXX miss the have sequential of operations adjusted adjusted on to expected range lowered for significant in million the a to Due discontinued guidance EBITDA and continuing operations XXXX update. QX $XXX million despite slide half, and our second reiterating caused recent million higher $XXX late are inventory million. yearend million flow adjusted EBITDA $XXX XXXX share than expectations, expectations we million. cash $XXX in to planned XX EBITDA lower to $XXX repurchase guidance have free
a Now $X approval waiting in actions. cash Energizer and quick the effect expiration the on XX-day provides U.S. which announced regulatory of Global update to for Commission allowed proceeds. of we March Energizer On jointly XX, billion Trade corporate Battery Lighting business with Hart-Scott-Rodino that our our in of Federal sale the the period,
with required proceeding a continue to approvals expect second XXXX. close calendar to are of during of We handful transaction the regulatory international half and the
will sale we Appliances the discussions in addition, remain In active with process. on parties interested
Finally, we're majority will the on a estimate Group, complete to the which end merger around HRG of be shareholder, June. we track with
shareholders for SEC process prospectus merger of not the regulatory in approval proxy after requires statement merger in now Spectrum the of and with are connection We transaction. approvals Brands was the we any of The April filed HRG on needing our anticipate both XX. and the with And a do review Group. preliminary majority the
to weather-driven costs basis the let's last year, of sales, due million products, from SG&A investments Now primarily support results turning slide gross associated of operating additional points safety Pet continuing margin million marketing start-up Project Reported versus or points last investments, On Reported basis driven operations. the $X.XX with distribution operating primarily primarily lower the basis, to QX acquisitions, Alpha HRG to new marketing in continuing or recall. impact gross Group production to Adjusted GAC $X.XX decreased rawhide to EPS to consolidation review compared decreased expenses XX% QX XX.X% mix, $XXX.X higher negative XX.X% of year, higher costs, compared of $X.XX projects, unfavorable cost interest transaction year, prior the merger. XX.X% with increases, XX.X% due last costs primarily of incremental largely Group input due and higher U.S. HHI continued costs, XX.X% the due facility of last to the sales including XXX Reported and charges. and to and margin in from along Group decreased HRG operations restructuring increased $XXX.X from and XX, year, reported expense. inefficiencies decreased year, and operations merger and profit expense EPS investments, unfavorable of costs increased transaction $X.XX restructuring. from and XXX HRG operating from a diluted of X.X% by mix versus
a tax blended using tax prior for law. annual XXXX versus are XX.X% U.S. corporate in a XX% due changes years in rate We fiscal rate to
decreased $X.X incentive were integration operations charges Depreciation, to last the XXXX, to increases continuing taxes million inefficiencies slide primarily were and respectively, Appliances divesture to cash from charge compared million restructuring year, continuing of and of due interest Higher million million $XX.X merger equity lower for Turning Cash operations prior timing $X.X payments $XX.X $XX.X the prior refunds $X compensation the due and euro-denominated DC of $X.X quarter worldwide. XX, in than payments share-based $X.X consolidation year. notes. and million by compensation. project. acquisition processes. payments fiscal year. to timing in operating second related expected HHI last from interest in year, driven and from million of our Restructuring of from $XX.X and related were versus million $XX.X million reported in & million on acquisition of Cash the the expense million, amortization XXXX in increased $XX.X to costs Battery and our $XX.X Cash the for million million lower million of payments of $XX.X result and QX increased
operations, to continuing our QX with Care. slide beginning Now of Global Auto net sales unit results XX million $XXX.X from business X.X%. in reported decreased
production to the Dayton decreased net decreased facility revenues U.S. appearance Excluding that developed air with XX.X%, two be Higher a U.S. project. more orders Wheel consolidation March a product in launched added All the Restoration XXXX. offset decline. ramped related sales. and Ultra apparent during $X Approximately as to became work by the unable refrigerant higher in EBITDA facility Dayton shipped operating up overall Reported and the distribution and more adjusted favorable to margin its lower due with we're in-house been by major contributed FX wipes million this prospects new sales GAC we've And product were which is of of volumes, other benefiting of million, pleased higher exterior backlogs seasonal organic the which $XX.X decline from to to we end million the at Wipes principally Headlight of unfavorable also year, and complete year product input All refrigerant XXXX. second $X.X driven X.X%. inefficiencies to market to Lower line full and performance Cleaning. in start-up, the Wash mix, Wax were The March. successfully of innovation automotive And including Armor in of has Armor fresheners costs also were well-accepted. Shine introduction
of to by demand QX Hardware U.S. temporarily related to and million Improvement sales consolidation XX. & distribution largely X.X% which to net $XXX.X backlogs continued strong offset distribution slide constraints due project. increased Turning the reported Home higher
steel. February. closure Excluding customer $X.X X.X%. following of the the to organic The completed, from with associated streamlined complete in and QX sequential result of zinc, of as and higher top Coast consolidation favorable as order impacted product QX of points. million Once in late was a copper consolidation Kansas distribution million, HHI's with East by lower grew FX and Reported basis commodity well driven by line XXX footprint principally to XX% EBITDA fell in large temporarily will was mix margin the costs unfavorable a quarter work inventory in backlogs for more $XX.X higher growth significantly DC X.X% Profitability sales costs decline in the decline XX.X% our center levels. adjusted
by million stronger its growth. million Global for Pet, Pet sales. sustained transition longer continues QX position sales to brand to margin a Global related higher XX.X% Now of to $XXX.X business it and driven in net reported $XX.X is XX. grew slide acquisition of XXXX term which
rawhide legacy recall Excluding cat tolling European rawhide and year or by results organic as dog of pet sales animal was as X.X%. sluggish a X.X% FX Pet impact acquisition and impacting to year. decreased planned and of continue further by a with well enhancing from boosted the sales chews, well of traffic. from which health both margin which exit product Nature's food of are introducing sales as the Negatively agreement, revenues adversely our grooming, point will $X.X the that ahead are channel million in reported $XX also million continued into million, a Pet Project and million $X.X lost innovation net distribution expectations performing and to revenues about due of one or favorable decline channels, customer to basis the $X X.X% dog Alpha PetMatrix XX increased is of will that Reported chew business. margin last recall the be impacted Miracle expansion lap to of across this GloFish rawhide specialty is were soon. non-pet June's U.S. initiatives as companion aids, EBITDA of improvement. full acquisitions XX.X% adjusted rawhide
the We the recall expect Pet three believe now food year continue tolling American European have million, full as pet to South to plants approximately impact $XX affected to will levels. that returned the pre-recall we the and agreement of impacts customer of exit lessen production be
reported were POS in margin driven quarter unfavorable Garden is due million. basis Garden, million slightly resulting offset second retailer the part by net slide Lower in remains Adjusted March, of of third significantly Home U.S. strongest by points. Latin of fourth & sales reduced the of and and weather QX reported XXXX, XXX EBITDA order quarters fiscal primarily to growth POS about by we XX. XX.X% Overall, net More $XX believe sales decreased than fell America. impacted unfavorable in traditionally XX% The weather $XXX.X of of to XX.X%. million promotional fell sales the Moving & Home $XX.X season. delays XX.X%. which in and the
and slide $X.X ample of the our to quarter cash $XXX ended including sheet million on available liquidity, debt of balance $XXX $XXX balance million second in the a now with revolver, million cash outstanding flow Moving We billion. XX.
Our peak revolver were to now fiscal million through Capital the million in operations and behind $XX.X down of working capital including the $XX.X season year-end. year. borrowing us expect pay we is expenditures comparable discontinued prior to
to above slide based grow Turning net FX the XX anticipated categories, continuing rates. our from guidance, on and category we most sales positive XXXX reported rates impact for current to operations from expect including modest
are we between is the depreciation full the including XXXX now $XXX million in to expected We for XXXX, discussed between tax And rate amortization adjusted million million and to amortization and $XXX $XXX be integration law being note U.S. million; between including continue tax the expected for million between operating cash not QX a anticipate use flow estimated versus and federal now and million; expense one-time to of between payments $XXX carryforwards; $XXX following be our lower expected changes, sales Dave $XXX related comments. interest for back to impact that to earlier, million are we XX% items; million free for The expectations million blended significant for earnings restructuring compensation; $XX U.S. be and is of a cash and from approximately $XX as stock-based operations: is excluding between rate GBA be As few taxpayer closing year the XX% loss and $XX the cash to payments approximately impact items include and now without a $XXX XX.X% use million effective have and expected you. charges any large expected be to for be $XXX related we capital of million to be XX% $XXX and do and dispositions. XXXX, to are non-cash approximately are and of now net million. segment; to to million prior acquisition expected is to $XX ranges and cash Thank taxes discontinued interest any of expenditures now during cash expected years; of $XX and adjusted million. between $XXX be million million, $XX
