SPB - Earnings call transcript Q1 2020 | Spectrum Brands Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 Spectrum Brands Holdings Incorporated Earnings Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Kevin Kim. Thank you, and please go ahead, sir.

Kevin Kim

Thank you, Chris. Holdings' QX Brands and conference Spectrum webcast. to fiscal earnings XXXX call Welcome Divisional Relations of today's Kevin VP I'm Kim, Investor call. and for moderator

slide there section the of To have website two at calendar our of follow document our call. of presentation will Starting This a slide remain page Relations help events our on presentation. Investor comments, the www.spectrumbrands.com. the following you placed we with

David and Our Smeltser, Maura, Lewis, be call by Chairman Jeremy Officer. Officer; led Executive the Q&A Operating remarks, Chief Chief Chief session. Financial opening we Randy conduct and our Officer; their will After will

Brands our Our uncertain. comments current Report obligation reports the XXXX, cautionary include XX-Q. no SEC statements, results to filings risk Due materially. Actual management's and risk, January dated factors expectations, We These forward-looking beyond. on in for update including our assumptions Spectrum XX, most release today may XXXX Brands review and our differ and and fiscal to statement. most upon that assume encourages forward-looking quarterly recent Form you are press to projections nature XX-K Holdings based statements Spectrum by statements recent and and Form outlined any outlook and on are Annual

on press discuss and this non-GAAP GAAP today's are on are X-K Also, a please note, filing, we will website Reconciliations release available call. Investor measures both in certain our the included on financial Relations measures basis these which in for section.

call turn me the let over to now, Maura. David And

David Maura

quarter conference joining good everybody. for first today Thanks, us for and morning. our Kevin, morning, good Hey, call. Thanks

In have performance divot XXXX, with quarter, earnings momentum we reported flat XXXX, call, then starting sales in the to the we on organic just our our expected quarter down fourth As year. XX.X%. essentially quarter of last of balance adjusted I in were and our this regain in EBITDA first fiscal a to stated

is expectations with our ramp-up EBITDA tariffs decline of was in our first in productivity adjusted quarter improvements. exceeded The line the

Plan We to expect up and our quarter, Improvement to is expected growth Global Productivity sales to catch headwinds. resume this additionally our tariff

we & our Care On us overall. did HHI Home PET, divisions issues our Garden topline, the organic & growth drove and and Home while and in flat segments Personal experience timing in in

continue sales, EBITDA growth in free We cash and to net expect Adjusted flow XXXX.

I could If and turn plan seven, growth on delivering is strategic slide have a teams. full-year revenue you for priority are we to top of our our each executing

Care we example, in quarter. & Personal outstanding an For our had division, Home

over year. products, This the to in line that unit top as We we're a streamline quarter, our Care, appliance first from a & as innovation, pleased bottom our Personal Albert. point bear making to our leadership that there, in investments businesses, Home We're see our invest launch this particularly and marketing reported R&D positive it led team to from experienced team growth in fruit. by inflection management business quarterly beginning its tremendous demonstrating progress are confidence new fuels new and Dave growth the appliance

This unit. topline innovation the market consecutive dog of Global share and our growth Care continued a in treats in represents quarter and this quarter, gains. But driven was our Additionally, Pet Xth continued importantly, category. by more growth combination chews

growth for third Pet also bottom quarter This quarter represented consecutive of business. the line Care our Global

fronts quarter. to this continue of on progress a number We make

and to in our in non-core Global IAMS Pet exit the brands with in our assets assets focus being. time the of dog we Spectrum dog operate will and the Europe our USDXX food represents manufacturing and progress First, cat against in of Eukanuba approximately agreement for Netherlands, commercial for But into core action an sale Care continue Coevorden, the on a assets cat and entered food this million. to price brands. for the plan

a executing $XX million repurchases by we Secondly, $XXX through the common million we for repurchase our during share open million reward repurchase accelerated stock of did quarter. approximately shares And program. to market X.X shareholders continue

Third, from our over savings to XX Much as Productivity made next Plan plans the be in base we as XXXX. significant will businesses growth in Global progress tariff cost savings months. of $XXX to run-rate on to XX Improvement additional over experiencing future to we're our reinvest of offset our generate fiscal these drive redirected and million well that

improvement more growth plans more There us again, mindset. significant confident going to this long-term our creation work fiscal forward. that embrace we some as our on year be to done is customer-driven and and But days ahead work we much I'm as execute deliver value of we best sustainable are productivity produce

to guiding Spectrum our innovator continuing is pathway go-to-market of remain excellence great brands. Clarity, our supported consumer-driven a Care accepting to to vision best-in-class our which quarter. this increasing XXXX we're strong attributes. but our strategies Personal service by and while with marketed vision on investments consumer be efficient our marketing Our businesses means and products quality focus service relentless behind This our company. insights. principles etc. actions business in are is by evidenced more a and our productive nothing & and focus customer Home focus, much a streamlining simplify and outstanding innovation, These mindset And is our becoming

team. culture making and energized focused talent leadership new of cash driving It's and our free with operational refreshed growth. flow a as much improved greater decision for with accountability, an earnings company quicker position sustainable we sales, experienced been on and We are excellence

units. Jeremy different from give Randy more from the you will and hear an financials, additional some you'll update and the Now insights on business business

to Jeremy. turn me over the Let call

Jeremy Smeltser

Thanks, David. everyone. Good morning,

slide with from sales. results decreased sales beginning operations, I Net a turn continuing will If X%. you with QX start of net nine. review will to

of in Pet pricing. offset variances $X.X fell and GPIP Care, profit costs, manufacturing XXX HHI. restructuring basis capitalized in of of essentially tariff Excluding positive were points higher the of Gross net Global partially XX%. Gross growth sales and costs with million margin by decreased foreign & and exchange, impact unfavorable productivity were HPC Garden declines XX.X% as Home timing offset and organic flat, by

by to was this year incentive a higher and Global year reclass the SG&A to Operating XX% HPC impacted at ago, compensation This continuing and charges XX% last $XXX.X by partially the depreciation in of Pet lower and this Care income delay restructuring due loss last cat basis. for $X.X the and timing driven compared quarter sale back period. amortization. net of on long-term costs, expense an the amortization compared stock operating The asset to a decreased more a of operations was driven impairment by higher food loss recorded million, year. and and into on of non-cash charges XX.X% in also year sales recognition operations associated million depreciation by with Coevorden normalize dog higher the manufacturing offset GPIP compensation will annual negatively a normalized

were Hardware positive Home tariff Adjusted costs, EBITDA Personal manufacturing by declines Care primarily and basis points by Pet timing capitalized Care of Home in offset decreased XXX by Adjusted pricing. in and & costs, Home declined higher offset productivity driven and partially XX.X%. Improvement & stranded Garden. & Growth variances Global EBITDA margin and

the as was increased from $XX.X continuing Separately, amortization can by paid and settlement and our the $XX.X $X.X year, taxes primarily $X earlier, million impact Depreciation of to million mentioned million share-based year decreased driven from of million $XX due see million will a of tax from turn operations mentioned the depreciation the on year, $XX.X the in full operations year this lower If decreased million earlier. $XX by last XX, prior expense million during we $XX.X normalize year higher a from basis. driven compensation I dollars, or that HPC to million Again, in quarter last QX of audit to interest year. I levels. than amortization slide quarter. you debt this that continuing Cash last

Restructuring down by payments Cash charges discontinued driven versus GPIP $X.X and spend including million, were million transaction $XX solely The related were for GPIP. and year. related operations million from QX, was $X.X million higher cash year. charges for last $XX.X last

$XXX including the time and down cash we of cash available last in Debt strong to million the sheet, billion year. at revolver position, flow from Moving balance $XXX liquidity million billion, a $X.X was QX on $X.X completed $XXX outstanding same our XX% a million. balance

quarter, the inventory and first $XX continue more quarter drive working our to disciplined by compared capacity year investments capital management ending enabled million was operating and continued prior our our into lower by in teams automation. As to process improved and

year, paid In January the business. the addition, of we in with connection previously divestiture Energizer in VARTA the to this payment disclosed

at shares in dollars million last X.X currently the valued $XXX in hold Energizer $XX.X million to quarter million. continue year. was million versus Capex approximately $XX.X we addition, In

XXXX now guidance. Turning XX to slide our and

with compensation $XXX growth to flow. to and items. million. EBITDA slightly million based is GPIP benefits $XXX last $XXX are Adjusted excluding relatively expected cash reaffirming still our Fiscal $XXX to expected expense foreign includes million is including $XXX million to and and $XX with expect Cash of be have of between XXXX low are to million, cash be $XXX still impact single-digit is non-cash for to continuing Depreciation approximately and be between EBITDA expected free are stock-based between net adjusted million. negative net expected tariffs be reported that sales operations flow between expected We $XX of $XXX million, and sales, consistent free We still $XXX $XX guidance is million and payments XXXX year. million amortization the exchange million impact on and from current approximately between a interest to expected place. currently million. guidance adjusted and $XXX Full-year in million adjusted be interest million This rates. $XXX

$XXX taxpayer $XX XXXX, being range. Restructuring tax loss be XX%, million. We expected is to significant is cash year this million taxes are use net rate $XX And $XX for continue expected $XXX of during to expected EPS, million between $XX and a continue also including Federal and million, a transaction-related NOLs. million be carry-forward. approximately as $XXX usable to be to to between operating spending still US and million adjusted do anticipate not and use started with federal we to we Capex cash Cash taxes. we of state million fiscal

over more Now, at business performance. it I'll a to turn Randy unit detailed our for look

Randy Lewis

of you today. I'll our us business units. morning, this joining walk for Good and everyone, Jeremy. thank all results of At Thanks, through the each point,

and XX slide and hardware to So home turning improvement.

sales hardware growth reported customers. category. plumbing two net builder's sales were by from by decreased orders categories, lower residential in in hardware and driven decline large by and security and residential net was of builder partially respectively. X.X%, driven timing by X.X% The volume organic driven quarter lower sales, was The First offset a builder's security

in outlook volumes XX% distribution electronic US manufacturing the EBITDA by residential expenses. relatively the and smart quarter, given this growing and Adjusted in remain adoption deadbolt the pricing low XXXX lower in partially category, rates. lower tariff locks fast decreased and costs offset excited driven the We by incremental higher about but

this, Kwikset their homes Further industry fingerprint. As Lock an in Consumer smart Smart the to providing Halo is of access Las first the this halo the WiFi earlier to introduced technology. team Touch Electronics month, in example the homeowners by Vegas. at the locks Show this the via This have innovating

very this We by given outlets. Award Product pleased innovation with several Tech are was a different Home best

this In this introductions application new and proprietary cloud-based mobile we space, competitive use to advantage space. a for in as continue our launching new platform product

long-term call. Additionally, our significant to this quarter and teams robust segment in that on and new We updating product will to our you believe the are this plumbing wins to is roadmap by segment our year. forward we deliver in bringing introductions look electronics our expected market be next driven a strategy in growth the new

Personal Home Now is XX. slide & which Care, to

the X%. Appliances, Care Small quarter by that grew X.X%. department channels. in Europe US increased net declined sales and in specialty slightly the sales EBITDA year, We prior are report performance Net both X.X% sales driven very first Organic by Personal solid sales to net the in and grew to were reported compared stores adjusted net happy growth driven and in and

objective cost our its to demonstrate results for our recovery trusted in alluded road with David these the accelerating remarkable appliance brands to and profitable growth of new innovative leadership team to the structure earlier, compelling rebalancing products. As progress

Our to continues consumer-driven pay line growth. mindset in with dividends top Europe

new product Remington For outpacing example, over men's from in the grooming as growth strong last growth category innovation rates. far year,

strategic the especially market. on in UK we believe significant Additionally, investing much has our behind to this products brands in lead share There's better achieved bigger, the and renewed come beyond. gains, will in Hobbs more and home appliance and category focus to growth continued supporting XXXX Russell fewer

Pet Moving XX. to Global slide which Care, is

adjusted increased EBITDA First quarter reported and increased X.X% by sales X.X%. net

Higher the quarter. a US we the US grew overcome segment decline sales growth X.X% sales animal the Europe, in currency, Excluding the sales continued net in were animal segments. in lapping the aquatics both despite animal aquatics. in year. in In experienced attributed as companion a to sales companion increase the and continued market growth grew from in companion We in the US prior QX in double-digit

non-core team exiting pet time and more our growth remains to rates. assets and targeted to committed Our resources activities top into invest

As exiting and rawhide and manufacturing Latin to we our David in cat Coevorden this exit earlier, America commitment dog food in highlighted agreeing operations the Netherlands. by demonstrated our facilities

Given positive growth roadmap for projections business. our we owners, with innovative category passionate rates pleased product participation Pet and for to and increasing be growth pet strategy continue in

for have brands Latin as online Good'n'Fun dog season, SmartBones a our retailer. several holiday and from our retailers. growth And new Canada was America listings treats and major the seller at largest SmartBones and listed chews During by top winner benefited brands award in

We the channel this US start multiple to listings year. development for continued specialty are pet also new encouraged are in shipping partnership product by expected our later

to slide XX. which Turning Garden, & Home is

First quarter reported decreased net million. adjusted and sales EBITDA decreased XX.X% $X.X

While inventories weather at were of quarter smallest the prior year, year. as higher a unfavorable EBITDA represents normal mind that QX impacted QX were customers and keep by result the than below in Sales of in XXXX. revenue

well as inventory the the POS position is inventory [indiscernible] advertising timing we a the higher to impacted as our to. we customers we of build also by improved due have quarter, since was seasonal later the investments committed a as However, positive as beginning very costs In believe as QX. manufacturing of quarter, much exit

to In of grow all business continue share the we repellents, XX segments market last three & household insect Garden, months, outdoor in Home and controls.

to outlook by retail and be consumer planning this we with forward, weather seasonal spring. for our encouraged our promotion continue our Going customers, plans

equities development and our brand growth. marketing in will product and are We confident solid that drive investment

XX. to Turning

Productivity provide organic growth. update. program update on be This an our want excuse continues strategic to me, our for me, Improvement also to sustainable -- we initiative also an Global We provide to delivering Excuse want important most Plan.

our successfully As manufacturing each Coevorden And and lock-in the product and sourcing processes. facilities and more center-led more significant focused we our about analytics Latin in late innovations, globally processes. R&D the cat enhanced and American Since focus last on and decision rawhide agreement November quicker within relevant new have from businesses, call, consumer have making closed driving of aligned we Pet into we discussed dog Global entered the to sale food Care, we operations. continued savings

GPIP the We R&D and will of the months run-rate be insights, savings XX Much work be will next from full back at gross continue to each annualized the least across expect of the various $XXX months. deliver to at and reinvested savings consumer and in to marketing into annually, of initiatives XX million these streams growth savings businesses. the that

enable consumer each and marry GPIP a strategies. more being insights, digital quarter management growth. updates This deployed was will channel internal forward team by led and formation development, continuing organic harvest business will in drive units major The future forward operation of to One on this group of operations approach revenue one and data launching and the exciting to our how provide a individual leaders centralized exciting profit e-commerce of benefits calls. is very it our our asset the We long-term developments product a and details for step we be annualized team. our the efficiently to look and to strongest their of commercial brand, of and on center-led most to

David. to Now back

David Maura

Productivity first this everybody, quarter, Thanks detail the behind to which the in divot for us the for call. quarter additional joining With in a and Kevin. from our and there's begin pleased the quarter benefits the fiscal company returning first of balance realizing on so Global Improvement programs, this Randy growth described year. call, Jeremy, Thanks, us. Randy. morning Randy. Thanks, much, We're second our to Thanks,

healthy all I'd strong to our and we success. our and are progress and company liquidity our revitalizing driving We thank for sheet for a teams do sights and accelerated now of the growth. like on balance change have our setting future

We will our materially proud repurchase I our deliver be is able from to of further were and price to free undervalued we deliver to share million time. are adjusted forward, strengthened to we stock free guidance resolve cash of continues expect $XXX financial financial believe sales commitments that our Team we on our million, XXXX also cash our opportunistically material of $XXX from $XXX time adjusted continue million to to that to for which XXXX, flow growth generation drive and flow And million. EBITDA single-digit $XXX there. to in and low our growth, only going

will back Kevin I Now of questions. your to take it turn to any

Kevin Kim

into let's Chris, just David. Q&A. jump right Thanks,

Operator

the And question our Labick [Operator with of Instructions] comes Bob line first Securities. from CJS

open. now is line Your

Bob Labick

Good morning. Thanks for questions. taking my

already. talked calls, So But the -- in the to consumer-centric growth going where on and alluded products. and to expect is a of versus go? your you pipeline and by could we've about or call reacceleration you new product maybe the little introduction you've new to growth prior capabilities talk Could part on and driven about ago products new of process bit that's a more two year now

David Maura

let I'll alone. it Randy Yeah, hand

Randy Lewis

Bob. morning, good Yeah,

centralize when So redesigning scenes, major all the that really categories harvesting through us working macro, to with a external, guide functions back that. that scraping our that's about with brand and process of team commercial a what's the of disciplined this innovation internal, I we and tend products. are discussed front within of is talk that It the channels a help process where vending micro, data some aligned each into and in we of we of within remarks operations and GPIP. it's savings innovation being businesses, heavy the to behind with the component world-class strategies, But talk the of loaded. it GIP, starts want happening the lot We to generalized prepared the about lifting experts kind

product of those development But first of able HHI a is to being tip a so WiFi products lock a business And be units launch development. security hang to the to fingerprint with being that continue iceberg of we own at are in the cloud different on an kind able our each market the example, as space. of little new that they line in embedded stages whole just tend to and the of processes be to of

at look growth the numbers we been When in the we bottom there and long-term. around we've the short-term and have minded. could very a it's line focus our business business, committed progress to for happy to with From appliance quicker, beginning, David was very that with not the committed turned weren't revamping much we last made year if

great engine on we're quarters. contact next smokeless space a coming that number in Wet George got and Decker, out & Ovens grill that will Style, in there within Air of We've a Remington etc. so and fewer, Foreman start Toaster in better, this that And the Fry US exciting new couple We'll lot products quarter exciting we've and NPI there of products the focus stronger. launching a to a be later doing new shipping Black got

we'll of out And you'll this process but longer evidence year. timeline in that there. Home Garden, products be so little seeing that that's start & launching A bit later

Bob Labick

XX And I appreciate know your recent I you've color. decks really Yeah, don't up in of make your today, then, slide about discussed absolutely, if deck think. I earnings But in XX% slide that's brands the that sales. don't it's of that. super

divesting non-core talked about businesses. also You've

stands, small of is You where it the there divestiture talk where bit portfolio is process? like food and brands other about be optimization might cat the other sales today dog European little that mentioned or -- the a or other

David Maura

And will look, down probably pretty frankly be quite but it. winners think bearing than starve our open good of feed most to saw on thanks global -- nicely done. we're from Yeah, I actually the growth footprint the think our in about facilities, better quarter. second the odd, the been there quarter to mean, I resuming team mean, -- we've I for and Pet down want -- this what four is growing that you streamlining losers. pretty again, XX I and, Pet, sales in and much pretty We

about allocate much is So, what it really greater is getting again, the data productivity. internally, built efficiently dollars. make we design Everything capital doing yield -- return getting everything and we're those on is it's here higher and excited a about that sure Everything about. I'm more to on is getting as

things they we're not and no So, Coevorden it's like the of I -- little and some look, yeah, is bit to cause still but little think are we're there noise question, done, in disrupting quarter pieces it. down

it's at get -- we brands already nice vision, and on mantra they partner support to million what a to a so, got will partner that And with this people employment good where weren't most hearing think, asset whole who asset look, have what it the making give and of was there yeah, business, and jumped I on our board there that the are -- they they're frankly and quite and point. they're for, knows be focus, want $XX synergistic stand everybody on and But, that profit going and we take of dormant our an a teams over quite clarity, we've frankly, to there.

disagree You or -- that with did --? Randy,

Randy Lewis

I think No, that's exactly right.

led more global more we've to which focus on and transitioned very lack businesses a global and a strategies. As the brand we more realigning strategy, heavily prioritization, on from of

emerged around we we're And on lot but large have assets just kind distracting have they globe about, talking brands Bob, the and and become that categories there's of literally dozens resources. so, a not that smaller of product of

lot the into our reach come they'll to those within each growth get where is the get going brands investment, the from. businesses strategic sure brands and on and the lot that's so focusing of making of top a effort the talent to they'll of And will we're a get those going NPI, that

Operator

question from comes you. with of Ian our the Zaffino next Oppenheimer. line Thank And

open. now is line Your

Ian Zaffino

great. very Okay, you Thank much.

kind second quarter. the in give that? keying Just What more excited in of in particularly there. growth about? What comments Thanks. your the color driving is to us return about a particular little And

Jeremy Smeltser

appliances So think, talked I mean, the about in as growth impact, second expect growth we quarter, we that continue. I to in

our guidance quarter expected all and four growth top and in fourth call, on mentioned we businesses, EBITDA. line we As

I will think we the has coming growth improve we first the rest pipeline, Randy that talked quarter products And which in about QX, through Garden new accelerate side in sequentially. year. of business, help Home down of the particularly on challenges expect had from around seasonal & the some to of the the

David Maura

Go ahead.

Randy Lewis

I was for team business far & just to the as for season. little as add going a Garden Home of color the bit the

we is each to many new business and year loaded year going it's before. introductions to Jeremy be revenue was bit be the timing heightened different bullish businesses. focus timing in important the what pacing weather year a upfront strategic a are of of that to the retailers. seeing we our approach -- It on is some that But for is good that to While the and of right, understand last forecast strategic is top little got than this overall, is spring. the more different, back-end strat the course product it so over going But of to exciting the a Actually the category to seeing we've retailers us. are from of change to the really loaded

Ian Zaffino

side. tell remainder expect Okay. the what And the of other the should And us question for moving be of on the on tariff etc.? the way, we one the a What would impact then lot given kind Thanks. then just of just parts transmitted year?

David Maura

look, the we've I we're X. facing, Look, Phase the I in think, think, past, disclosed headwinds obviously,

people lot of not it's in takeaway getting anymore. slightly hit you be think expect that to beneficial, I on Phase tell we're mean, is, would the X it's, my we I face a massively main beneficial.

of will benefit there. little We pick bit incremental a But, immaterial. it's up

and certainty so the there I where where our clarity marketplace tariffs think get And customers best -- control see confidence resuming stuff QX And is fuel -- nervous is could I the is for I growth. to of a would some now our do that's normal people are retail out thing in in X, you some some there more get certainty more that Phase us also customers occurred with and think and trading about pre-buys. our patterns gives with think

Operator

line from you. Bank America. of of next Tong Thank our And Olivia with question the comes

open. now is line Your

Olivia Tong

Great. Thanks. to you a sales have because about the year, EBITDA was quite bit expectations talk little bit but Wanted sales to expecting. the morning. about pretty than guys market more start a been Good what lower explicit was

just go So remodels, specifically what HHI expected? didn't on the relative strength minute. surprising as your both to in was expectations, particularly etc. -- And then given on a for That data housing new,

if you December decline talk the expected So, come And timing. quarter things through. could on those that the you mentioned -- locksets. the about orders then a How few in Thanks. you in to come that residential now expected you

Jeremy Smeltser

morning, Yeah, good Olivia.

to bit about quarter, So talked with Home being we a the of timing. little regards Garden &

retailers the QX. in season, the And of things are some to coming we seeing measured to might closer large expected a so the And of more have end at are ship approach to are got the we as that therefore, several we feed-in. December taking

from of to three regards inventory HHI, just quarter took With the this we patterns was areas didn't low-margin And course then in we final last items to a ago. quarter did a event that lapping quarter that year were before. terrifying kind a potentially large related it who Friday believe the year over their of two we as mainly Black out customers alluded to anniversary losses had of of we material have the the where system year. of in hit We David two material had with

that So expect category, we're market watch to the to continuing as closely turn numbers the And we deliver is solid the growth and main pretty HHI. and you that's for said to drivers to metrics, the good back it of the year.

Olivia Tong

I and the Got quite a because bit that to residential where obviously If locksets, it. can just alluded a specifically innovation tailwinds. obviously a you ask of that's the business on

assume would I average? is to there. lost you relative that business lower a it's HHI So margin

David Maura

it willing in challenges to related were Yes. -- pricing months It technology outcomes the to where was we and back was was margin had older ago. from way it was lower go kind of not chase we and XX execution and chain supply it in

Olivia Tong

Got just I market stabilizing across seems H&G, could competitors. portfolio And closest positions it because underperformed least on like losses, now the up HPC, has HHI you it. but at if follow that's then your some share

which at excitement a bit could drive you what's to retailer odds other. because going to with if orders, each there improvements So around the talk mentioned seems you but that out pushing also

David Maura

comparing you're Home & a gap competitor, our there. if to line is there Garden business up So the in big large

And -- when product XX%, look another category at is competitor there a of versus XX% there, so revenue. we're overlap about our you

So the trend tend compete diverge. many to lines of the in don't categories and we

meet look home So that our months. controls, would taken far as those compete show in available that accelerated was in it to insect -- long a it's we And data categories XX expectations over as timing repellents, last being year, goes, not super of centers to at the we outdoor problem. the as retailers us the as when they we've got and purchases is share, we've the insecticides and especially of there last the and we were the concerning able indoor not our at and as we segments inventory each capabilities

that. they orders, still those delay as not worried I'm So about

Operator

with question Bank. Faiza comes of And Deutsche line our next from the you. Thank Alwy

open. now Your line is

Faiza Alwy

morning. good Hi,

couple So of questions me. from a

timing go impact think orders, don't Just on from wanted the that. quantified first you the to I of on HHI, just back

might competitively know piece? how hear orders you disadvantaged is where the manufacturing -- builders' So impact timing I And your because believe that on the you consolidated hardware much was I'd love on tariffs had I builders' of China. due in to be the hardware just to then

has if sort bit there there wonder that I volume little any impact of that. and you from seeing So from sort some been there, And a -- impact are component a of pricing? is pricing of

David Maura

and to resuming lower profitability HHI the we are specifically, And efficient current finish we balance to on also year. our cost actions hardware, year. taking is and growth to fiscal get hardware a builders' we're -- we expect more of in our the for the QX material the there internally are good very On for improve materially in structure

Home to I to like believe. I'd was & think $XX go of Garden revenue, it it, piece million back I the

million -- a Garden typically again $XXX live in or I & $XXX in other Just, but world year. million every a we is short-term Home know quarter

So concerned Home Garden. overly I wouldn't about & get

Faiza Alwy

that & But No, irrelevant about this I agree, more concerned for -- hardware business. comps more if I was piece. do I side was was Garden on color really the segment, I because the Home I -- get I lot you've builders' get also the completely HHI just tougher. think on a of But is done and Pet I wondering could pretty well quarter. treat

Is manufacturing. be of the So of sale And mean growth for the mechanics how so happening? of brands aren't these I you're the like then, you businesses the to just thinking of outsourcing just for the remainder about year? those that going to really segment really are sounds those I going -- that want facilities. what's understand you're it away, keeping

Randy Lewis

questions. let I'll so take order. do reverse those try in Yeah, me and Maybe

So, Pet we they fact be with facilities with mechanics the it partner is the are that will the operate operations. regards facility, many over that take one continent. European the synergistic working of of who the in to the will This

for to the operation of the overall to up commercial it's remainder of management. net so again from understanding the add an they for capacity of us be options how to absorption will continue and instantly to freeing thus to positive the to for an underutilized able operate a high going focus resources. about improvements. bring They those facility freeing efficiency us strategic ready-made with look improving and that on brand degrees in aspects be And a but business, cost We'll

last about the process With we things, since where is fruit cycle ago the in and and ago, really and it's consequently Pet, asked market a that, shortest feeling comps work evidenced hitting are because good is future the summer. the regards has our the year to a of XX the NPI been one has that months earlier about where question started of Bob Pet

major new retailer know, higher an for world's mentioned US launching being us innovation advantage a the a so exit being a counterbalance -- will category we later in that's that are And with the new for to really a And to continue haven't on better be coming followed we're that and much vitality continue Glo innovation then able to relationship is colors. actually live you us. decided key bring while, this the anyone remarks major we and for who category, our we species heard, positive rate. a aquatics and US launch you ever able bringing GloFish has into had of space, pet that's we impact first So in but exciting, business having and than And to prepared returning see I specialty anticipated. if building fish quarter. that to we we is to piece somewhat able the Betta stagnant a

weeks And so we three approval have ago. received FDA

species later in will first with color. in we the so quarter, And launching be this three

are I And so can that category singularly of the broadens driving the entry fish a lot mean a to really of a to for it and And tank target appeal exciting in $XX in that's point up really that new whole small fish kept category. be betta they're spaces. excitement these and retail each. where they desktop those will

that feeling types those of us preference. it's So about confident things continued have

Operator

next from question Jim Chartier Hardt. the with Crespi, Thank you. And our Monness, of comes line

open. Your line is now

Jim Chartier

can United, specifically Just XX the lift on us seeing? is the Manchester color you you made you're wanted of And that marketing you last you Are to seeing Thanks. there? guys and activated returns talk over on about give behind? some in months. fully kind investing partnership have of what investments you what there seeing Any are the products then are the

Randy Lewis

Jim. Thanks,

the going globally. detailed aligned more go up overall, that we're think ramp to brand measuring don't by the into strategies we I focused the investments. more more with specifics discussed and I ROIs investments the So, But, are aligned being earlier, be brand of of to those

And weeks ROIs a of faster or announced around couple commercial we this past operations so to ensuring space. we resources that can those external visibility putting got we've that better, of make team additional and in decisions the that aspects one the of is exactly is that

Manchester and I impacts me seeing have don't fully me, there. don't to in those points with -- really executed data United, -- but With front positive regards I of

David Maura

Remington in It was Europe a rate last quarter. this growth

Randy Lewis

buried number, in my We you also. see here. in deck Europe, definitely standpoint have but that it to of in find the But can it's also Remington both from Asia-Pacific

Jim Chartier

advantages your on in-house guess your use versus highlighted rest provide then what kind Do the And the I platform smart And to platform. the you guys cloud have platforms your locks, competitors Great. in-house themselves? of of industry? have

Randy Lewis

the before lock We major is believe And unique key our about was to the that category. in providers. locks, controlling combination this the is against is back platform what the and key the -- within was smart really the key important key

move it's whatever to about interface standpoint replace we locks, smart and key in of liability, a both the to the all technology, the As of you're using that speed controlling credentialing security. from

system. and faster on we overall times, So home greatly hub locally directly so much being into experience don't our of operation the improves is a own product. connect can done cloud, on consumer to your on of and improves rely reaction everything It you security greatly our WiFi network, that, the have top because

process cost So it and additional the step out in takes step and smart unreliable home of additional an additional development.

David Maura

on I've Manchester believe United -- with I But in thing, the team. got grew ask and loaded I'd X% that Europe Remington we programs. fully Remington that's based

some want color. to just I so you And give

don't hard but what's teams have on we quarter hard, this go when a right. While are do ROIs want the is Home what's And everything, for & continuing like you to Garden spending line businesses We base to where you is building those top the we're clearly for long-term. down. doing keep the keep depressed brands. that And advertising. We on guys what right are is into

that have our appliance lines growth. up like, no keep bottom discipline, headwind us top the and line growing the nine tariff that's down for it's in the that despite months, thrilled I'm we being over the investing to category maintain after on and personally Europe quarterly And is, X.X%. so, And what we matter again, units now to headwind the

upstream we're pretty swimming fast. So

Operator

of with you. William And of our Bank the question Thank Reuter next from comes line America.

now is line open. Your

William Reuter

but given were morning. most of the $XX issues, that? the it the still you million pushed list should been eliminated, lower is Good X list be million incremental tariffs and or I $XX right the X that guys tariffs number than to of has know for off

David Maura

to to this disclose $X dollars ballpark, what I think, want I we have net-net, small, million a we a benefit time. million, That's million at like couple of think something got some probably still that. small you good -- have we a $X

William Reuter

year, a million may percentage I through then at of that pushed And what you of price this in this Okay. you you price have to $XX guess for million have point? implemented increases that terms sense do in $XX

Jeremy Smeltser

I category by Yeah, tariff but so but in you into by specifics, pricing, and a impacts well of we the William, did can dramatically XX% upon imagine. won't as go by factors that get cost number depending of business over and very channel

roughly widespread. was was there but So the portfolio, XX% across maybe a it

William Reuter

target now. that guess, to bit was that And your in guess, are about a your above guys X.X right I useful. last just then leverage you from me, of have share that how I updated do rapid us target? That's you forward? as little we context you going times, when the think continue should repurchases, lastly given share the repurchases And,

David Maura

Yeah.

because period steer above about is flow share take long X.X leverage of short should leverage we for moment. happy a are and you X business that $X times cash steering XXXX. free running so term, at think the per in for company time, toward we're times the ship. Here, business where to undervalued a to I The is the materially I'm to it. want the

we multiples, buying And be trading stock. so with shares these will at

Operator

of next from question our Casella Carla And you. Thank with JPMorgan. the line comes

is Your open. now line

Carla Casella

end one in mean, sourcing much they how year, of the even the just follow-on goods, from at pro the half back of coming the amount on where of want do of talked terms the to this be about of moving by sourced is in your I through percentage Hi, forma look however, tariffs, it, to goods, of and you year, China? you that mitigation expect

David Maura

the of yet. then continue we'll But, other company of yeah, parts I to do around changes China into some move hopefully -- less to up to to basically to go supply we've get that and to want taken QX in businesses is dividend today to from in absolutely, top and forward, and footprints the to the get a But, we also we in China, tariff look, reinvesting continue whole that into catch don't the the -- on that will this in making pain reliant Look, I want so. expect to across we push business we're out back discussion think going unit through what and healthier countries. line. manner now to propel become and on expected to you we much QX, remain our are to sourced was things are productivity we the neighboring chain think on grow with appliance we Asia, specifics the I and And benefit materially hoping guys be QX. to

Carla Casella

plant closing opportunities about potential. And couple on you've spot to beyond a of for great. Okay, business, flip talking on, guided and about of what you there Are a after -- you in process any of announced? capex kind that there -- will Are one in the more complete you're talked then and investment good plants you the you some additional the year. one first investing one is side, this potentially of just need the

David Maura

spot. I'll is, But defer good we're Randy. answer in My a to

Randy Lewis

dog Carla. There continue with in you rate just there's be should this. not efficiencies that's in manufacturing may in run that will is the spot are the the connected. changes to and -- forward but maybe CapEx the significantly are Netherlands, good to little future, use more. facility we less on the drive closed will not we quarter locations produced America CapEx automation. we in chews of in and But announced to Latin not big so thinking and adjust we manufacturing that divest. our a a hump total in which of a in the throughout course other had we manufacturing Those kind We four And Yeah, This color, footprint, that going be the that treats. the have also four to

Operator

from Thank our with comes And Karru Jefferies. of last question the you. Martinson line

open. now is Your line

Karru Martinson

Good morning.

Chinese the affecting headlines, in production virus any your Just capabilities the that there? the impact what's and on of is that's

David Maura

could less mainland, week definitely are a but, into LA flights get we like potential the coming some delay our manufacturers It's material ports. of we to interruptions. there. But We're look, on the the any taking don't contract shipments expect

Karru Martinson

you this would when or look too like your point? acquisitions other versus right it stock have price compelling out feel at you stock And footprint Okay. just prices you bolt-ons add then there, that the that you at or do that to is

David Maura

can't I stock. to anything find cheaper buy than my own

Karru Martinson

Beta the then just When in a after And after a come is clarification. my market Glo the out, Okay. friend his is son's fish. -- killed other

Randy Lewis

the in glad part Karru, of We'd I you March. at to think you specialty should US be latter Fed the send be looking invitation.

Karru Martinson

you. Thank it. Appreciate

Operator

the call this would turn session. to like any concludes remarks. to I now Kevin question-and-answer closing Kim back today's And for

Kevin Kim

and Spectrum your for Thank you, Randy David, Thank on you of participation. Brands. behalf Jeremy, Great.

Operator

Ladies participating. this Thank conference and concludes today's gentlemen for you call.

now may You disconnect.

Spectrum Brands (SPB) 30 Jan 202020 Q1 Earnings call transcript