SPB - Earnings call transcript Q4 2021 | Spectrum Brands Holdings, Inc.

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Operator

Hello, thank you for standing by and welcome to the Q4 and Full Year 2021 Spectrum Brands Holdings, Inc. Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Jeremy Smeltser. Please go ahead.

Jeremy Smeltser

Thank you, Josh. everyone. morning Good Brands conference Spectrum and Year Full Welcome and Holdings webcast. earnings call XXXX to QX I Smeltser, am Brands. Jeremy Chief Financial Spectrum Officer,

many of Kevin opportunity know of Spectrum As another for Kim at QX. left end the you

So will of calendar myself our the conduct X we follow help their document by the comments at the our Slide in remain be moderate Investor I following on of have with call will and the Officer; led we the Maura, our Executive Chief spectrumbrands.com. our Starting and Chairman today’s our website will call. opening remarks, will presentation After David To you call. presentation, slide Lewis, page placed our Q&A. Operating Relations there section This Chief Officer. Randy

included non-GAAP in encourages the Slides SEC on Actual to comments release the XXXX, assumptions call. the reports on annual available Form Investor materially. projections for may dated press to that our report certain Holdings’ obligation Reconciliations Brands expectations, forward-looking measures and a today’s recent most today this management’s section. in are X-K our basis outlined based uncertain. Relations measures in you XX-Q. XX-K to on and are We and filing, update release review Due are GAAP and website our forward-looking Spectrum financial X our and both which these on we and risk, nature, statement. include discuss recent note results upon will quarterly any Form to by no risk most assume X, cautionary which Also, statements please current November differ and press XX, in and statements filings are, Turning Brands Spectrum factors

along reading with this our today side form Finally you Brands’ today SEC. report release and our issued annual the once is to listen Spectrum filed and X-K press with we on remarks encourage to XX-K

David. to the I call Now over turn will

David Maura

$XXX Good today. a brands, Thanks fiscal everybody all year of partners $XXX.X was by period team diluted and our period billion, over Jeremy. ago. growth. the management increasing joining was us for million report at morning. like start I our year ago of particularly sales million total $X.XX. XX spectrum that $X.XXX year a everyone. bottom were and the I’m to over XX,XXX of appreciate million EBITDA us behalf $XXX us On increase an adjusted the line top Adjusted year pleased I’d employee plus Good thanking that another EPS to successful company morning of yet delivered and full

are part you of of call, listening If together. proud what you’re and accomplished very you this we’ve Spectrum should be to Brands,

a on We inflation. all executing our we financial challenges significant through goals. yet have pandemic, supply we tariff playbook worked delivering And faced global global and unprecedented strategic our chain costs, experienced in succeeded still and have we’ve on

back at have a to Looking of. lot be proud fiscal we XX,

efficiently units using efforts developing we continued knowing the needs enhanced our focus understand on focus The on through and our As to consumer. our truly centers through data messaging meeting each to to leverage users excellence product allow business product of our new their brand needs is category, and and to consumers that of our in promotions. to those end story telling increased innovation investment have

while our fiscal trend challenging continuing commitments Our delivering the all face. quarter supply chain and fourth reflect navigating environment quarter-after-quarter of XX on we financial results

been company XX completed number with focus we for supply transformative to confident are the strategic XXXX. transactions. a have has these a disruption fiscal as We our year in year to as headwinds discipline in chain look face forward our and pressures same of another inflationary Fiscal ability also and we successful

are home our acquisitions billion in in in unit $X.X our have and as we for transaction capital garden entered business abroad, of and perspective, into cash X.X the the Also, The addition which In ASSA sell and is common from nicely. ABLOY. $XXX.X agreement our disclosed, subject tuck to repurchase HHI advancing allocation for an customary the Global Care we in did approvals a to business to to million million. approximately of all we regulatory shares previously our stock Pet U.S.

spectrum the adjusted our of delivered with here accelerating on forma pro Turning of earnings Brands a at we framework last actually growth HHI XX.X% comparable growth year to teen the framework. revenue slide overview branch results and with teens line total in basis high were In pro EBITDA including with total we forma in Spectrum mid consistent top X, growth. line have our results XX.X% earnings to an

also as adjusted $XXX. of free of flow $XXX We to our million to earnings $XXX compared framework delivered cash

communicated challenging We very million our report earnings grew EBITDA we to in fiscal shareholders are extremely we pleased that to adjusted revenue $XXX by grew operating we and year, $XXX million a delivering our the this on environment. framework, by

at we despite global proud extremely managing the within on quarter. We done the remain levels our faced innovation our level We’ve headwinds in in in significant to our We’re strategy our team the during focus challenges invest growth team inflation and making this sustainable elevated fiscal and our exceptional our quarter. has insights, with we across for to currently while future job long continue an inflation business. advertising investing of in each happen. committed of XXXX. profitability foresee maintained term the despite of continuing invest growth, maintaining experienced to expectations throughout line continuing will these of the headwinds our and accelerated businesses an The We

to operations further like classifying quarter now fourth sale. in fiscal this we presentation, XX, discontinued the Before are everyone the I’d of we results remind to the HHI’s as get into beginning due

quarter again of XXXX of from COVID quarter, delivered the in fourth this excluding impact Organic in recovery to disruptions quarter actually and compare top supply the on fiscal XX. third results high of quarter acquisitions in driven we which fiscal sales the an decreased X.X% the as Moving due slide FX quarter sales, line exceptionally of the X, bottom to including we acquisitions. growth impact and the was

we reminder, did global fewer a chain shipping related in the shipping decrease the same sales fourth days a days The the quarter in well year as versus adversely ongoing impacted As pandemic ago. disruptions period supply quarter. six as have this our

to growth. operating quarter environment of sales digit However, more XXXX compared double of the fiscal normal our these actually organic of represent results fourth

savings, year. from a growth, without $XXX investments. year’s actions, liquidity. past last payouts. change Turning for acquisitions focus continue we from slide pricing continuing leverage we quarter compensation improvement our worth quarter substantially stock common stock from did compared remain was million our to to maintaining will program favorable capital from million offset to term our we and the growth total now loss $X.X to was and the incremental X.X of ratio. allocation last times, and net could from $XX forward. We to Also, EBITDA remains This X, balance invest bottom of global shares partially approximately for during in to I you in have also were $XXX.X volume $XXX year strong increasing perspective, turn of of line. repurchase year income comparisons on the long inflation going the of committed million. a million We resulting operations businesses fourth Adjusted pressure fund million, quarter to If productivity about was million $X.X Fourth and by our variable cash to we sheet get to net with million leverage able X.X our over the during our ended sustainable

announcement transaction sheet in upon on leveraged HHI discussed September, to X.X our we HHI to sale. our the we deleverage times expect call the of As closure approximately gross balance

our to conservative a leverage net X.X range We net have long more X subsequently term to leverage. adjusted

capital our return innovation, allocating drive focus allocation organic priorities Our and highest growth. marketing and brands insights, to consumer our includes to first opportunities. advertising, internally to through strengthening vitality profitable This continue capital on

opportunistic Secondly, cash via we and shareholders repurchases. return to share plan dividends to

will Third, position strategic continue greatest further transactions and creation. on offerings. will M&A synergistic a We drive help veterans meeting strategy Spectrum’s through enhance innovative long product discipline company term as focused Essentials demand our that with believe value consumer are Home we this brands and

and we XXXX will EBITDA our on digits. grow framework, slide additional level plan we low in This is executing million. around to playbook, mid earnings continue $XXX focus to the Adjusted we digits. now single an absorbing to expect the our fiscal $XXX to and grow X of high million in single level Moving of the winning high expected to after to line top inflation

inflationary year. half fiscal continue current to impact that reporting more acute expect and pressures up the be We the the XXXX step year-over-year in our first in will of throughout

price further fiscal We XX have these have first to year we actions of the put place in this half increases counter and in implemented headwinds. in price

to XX. But is XX% approximately due fiscal achieve coverage for we our margins of expect to price first half these timing of to do inflation price Our pressured to the be the increases. XX% end goal by

product global One place. units of as the continued business to be to focus improving during across availability XX fiscal the demand will in key our expect meet our constraints elevated remain areas supply we chain

Jeremy will business additional from insights. then you’ll provide unit come Now you the Randy financials and on more an on update hear and

the So you at over call turn this I’ll Jeremy. back to point,

Jeremy Smeltser

Thanks, David.

of net of by a increased driven of expenses. share decline favorable sales to excluding the with quarter. recovery slide were in pleased XX.X% primarily sales net in sales to requisitions the XX.X% the of of of operations, six Gross operating growth an decreased pressure fourth EPS volume income well transaction a improvements quarter another higher XX by reduction David XX driven release due and impacted earnings compensation X.X% higher year. margin home driven we XX, commodity from by partially company’s due shipping high Net points with of million to beginning fiscal that of Pet the of payout review disruptions Operating as also inflation. certain of as of for acquisition higher SG&A. exceptionally with X.X% last performance Care sales results QX diluted in primarily $XX.X based inflation, of million EBITDA fiscal at of stock impact $XX.X results restructuring income freight improve pressures margins after and quarter benefit XX.X in offsetting per and increased incentive X.X% of X.X% million negatively fourth quarter given the freight driven quarter XX. the EBITDA as favorable quarter of exchange million loss SG&A by gross was compensation related and and declined pricing, Adjusted partially current a acquisitions, foreign and and global and consolidated the from X.X% mix from profit sales last in pricing, Results The net versus year that the during offset XX. adjusted million. turn margin driven improvement increase HPC our increased COVID valuation with a positive the to QX a supply allowances. dollar $X.X expense QX tax by inflationary a $X and by and Let’s during from gross registered $XXX.X decreased Net as million diluted continuing increase Global fiscal marketing and we X mentioned. Adjusted fourth the income sales. garden from Overall, program. the days had are quarter investments increased Organic productivity commodity Recall productivity to basis growth. driven productivity by expense decreased million and change inflation. fewer methodology due both

$XX.X for incentive payments higher transactions last slide year’s QX the stock quarter and Depreciation amortization by Cash taxes were payments last million. year. Cash and million $XX.X interest million XX, from million which year. change operations of fourth prior for last than year in compensation increased down the million year. in to to $XX.X of million the Separately a of in full based comp a incentive million operations methodology fiscal $X.X $X.X million compensation quarter XX. was year. last decreased were reduction QX $X.X year $XX.X and fourth expense in during from lower $X.X of quarter, than X were million based to versus from Restructuring and resulted X.X by expense million from $X.X Turning continuing driven continuing share payout million million related the X.X last

of billion senior cash Moving to term over consisting sheet, obligations. on approximately million billion of in balance a had million and and $XXX $X.X the leases other its million in finance, revolver. Debt outstanding unsecured $X million million of cash $XXX balance approximately the available approximately $XXX $XXX and flow company notes, was $XXX nearly just loans

the versus leverage last fiscal the X.X times expenditures was at $XX.X net XXXX. Additionally, were $XX.X quarter in of million end the million Capital year.

to Let’s XX. slide turn now

and Here including across and increased we have program, $XXX.X favorable favorable and first operations foreign commodity exchange improve continuing margins GPIP all an million by profit $XXX points growth results. Net offset increased in $XX.X inflation. acquisition business. across consumer of of sales comparisons basis the half favorable net and driven impact we by overview strong care percent to personal productivity increased COVID closures demand in and Gross and most businesses X.X% XXX digit organic fiscal year freight an related XX.X% performance mix organic growth company’s sales full increased the of double by in sales experienced sales regions of partially million our million The driven fiscal of from XX home with as at pricing, XX.X%, XX. gross was

pleased We offset performance the as and very inflationary partially pressure productivity pricing, commodity Adjusted margin headwinds. inflation. volume as by are XX% from with primarily by acquisitions and EBITDA freight improvements driven gross including well despite growth, increased the positive margin

expectations We first interest half of be expected is million be by amortization million to million. between Turning based usable XXXX positive $XX between related GPIP digits. to is growth to and expected million. from transaction now and have low expense continued are for digit single rates. and spending Adjusted benefits XXXX. current and comp includes substantially in based is to eight non million. to our basis. with expected program approximately slightly $XX impact approximately the to exchange cash specifically to our a and single months EBITDA slide to between $XXX $XX approximately million, of high and From increases million to HHI. we additional expected year the recent foreign planned as expenditures currently last EBITDA negatively net fiscal This of $XXX reported and We million revenue. ended items. the which million, from $XX be current expect and Full sales offset grow upon impacted mid cash XX with approximately million, $XXX stock most to which well sale on and expected of is Structuring to full of net and grow results year perspective, to mostly expected pressures about be transaction, despite incremental $X million to price $XX generated gain between phasing rejuvenate a be fiscal $XX year on $XX headwinds productivity first pricing a of by million million all $XXX actions, Total expect in million them quarter XX are expect and annualization is inflation to $XXX $XXX including further federal including $XX inflation actions. offset of as NOLs of fiscal Depreciation expected use million the

projecting to for of XX. taxpayer EPS between fiscal Cash XX% a are are expected $XX be $XX be million state to a in with We taxes. taxes million adjusted rate tax and including U.S.

proceeds, with our a allocation new target deployment strategy of for term we target. capital of sale leverage X the to near leverage the net HHI long After targeting Regarding gross HHI times. term X.X time full after targeting X.X we’re approximately the our closure are

Lastly, higher our of strategy. to to at the rates continue our to we plan behind brands support invest execution the

to the progresses. and moments our in fiscal like operations our in as for continuing I’d modeling results few spend navigating for some Moving year discontinued to HHI of complexity the of slide to XX compared operations earnings financial as presentation discussing framework, XX, to assist a considerations

interest First, allocate for GAAP accounting fiscal $XX will XX. about discontinued to year for million discontinued operations of to us allow million the operations $XX full to

debt basis reductions. expect expected higher actual carry equal. million being $XX we after interest in million Our will higher reduction $XX expense plan that expense an interest annual on that all XX, is else fiscal than Continuing about would operations about

allow GAAP to operations will our to lead discontinued approach technical our allocate financials. of Second, center cost not in accounting to allocation $XX approximately to million as compared HHI historical us GAAP

adjusted for presentation consistent contractual we ranging the costs our would expect from agreements closes, approach to X with months our we will sales. remaining the our adjust stranded and the and continuing TSA for XX depending to for EBITDA reimbursed function will those sale TSAs any enabling essays operations. on material of Post asset this and We for world. under our in past these region address buyer After with the be periods costs

our are the quarter of as results compared year-over-year inflation a results of finally, year few and in opposite half, hitting stronger taking half the of out. the increasing of to items capital pricing effect lines, XX essentially from our continued impact timing to a due actions to and the expected Next, in XX cost fiscal then working fiscal the cash point as to be first notable second perspective, our progresses. flow And

HHI’s not for operations period reported. continuing First will cash be flow in presented free any

continuing operations mentioned $XX interest flow be I by of cash earlier. that free Second, reduced will million the

cash U.S. to investments normal Third, year global as Pet $XX we than early and million, supply sale global of the Care consumer finally, chain the the are this S/X the transition levels program challenges DC in HANA And inventory and the difficult in well S/X predict and given about costs program spend to as HHI, the due completion to well of demands. very of primarily to new the expenditures as expect due HANA $XX heavier in and million acquisition our upgrade SAP our capital in integration as investments restructuring heavier

retail year’s inventory after timing investments needed rates uncertain. is maintain and customers, will of a and fill reductions thus toward to last as inventory the our bias support We potential

I’ll to it operations. our Now more at a detailed Randy turn look for

Randy Lewis

progress a Jeremy. provide of unit of all as and on utilize Thanks, the this headwinds operating navigate thank the overall to supply to today morning. will environment. And in our comments to each chain My And on I you well productivity current performance program. you the also business on current on details underlying will our us improvement focus environment business drivers model the joining update for operating review continue we results. as global cost the Overall, our

of fundamentals continues to be categories our the While from our and well quarter-to-quarter, believe very our COVID-XX our remain demand their to impact strong. remain product to volatile Consumer in spaces. brands we results the very due positive, perform categories continue of in

Now delays. the was growth and in advertising products hair expense, higher quarter and offset was digit of sales in slowing inflation. transportation driven strong decline America. represents sales in dive moderate Latin in double specifics Starting most of the were increased into input EMEA significant appliances markets care ninth recovery and driven growth as demand this were in as a XX, QX by which organic the offsetting global in care, business. $XX.X by slight and consecutive with garment offset Performance top million. to kitchen as expected care the this delays, net of XX.X% despite and transportation as supply increased respectively, marketing slide year-on-year primarily partially adjusted Net reported but line impacted the each U.S. actions, growth freight by growth Lower hair continued acutely by volumes let’s is delays, X.X%, appliances X.X% The improvements. This and well pricing to decreased home category. was driven by for that in business. EBITDA investments EBITDA well personal an consumer cost continued garment in productivity chain due by was

confidence to give last years consistent commercial shelf Our continued our plans investments over the two retailers. wins growing and continue in confirm and space with share our us key

increasing inflation HPC however, pressure to our pricing to supplier in timing The mitigate previous put will in offset supply address pressure outlined and and only inflation margins initiatives. in these challenges is as as in pressures further we pricing by partner well XX. inflationary we headwinds, as As enter impact of calls QX. the This marketing continued QX our will on margins partially we to continue action fiscal work additional investments

Although consumer challenges. will driven incremental XXXX continue our focus immediate capacity product platform insights and upcoming new our opportunities face on as season improving focus to a long sales is the on led we transportation supply remain in holiday in term availability with

top portfolio. able finished quarter. target the to That above overcome QX quarter Adjusted as Moving offset at which to fewer improved the by distribution and grew of steadily Care, X% that by as rates consumers returned team sales channel pet demand higher XX of products sales store as in acquisitions. brick days All of sign demand as portfolio the is slide brands. The improvements of actions. was the impacts to this specialty well strategy, just revenue in our shopping. freight around transitioning exists organic category. is for order top primarily beyond pricing execution that grew as the driven freight throughout were grew, in which impacts continued to outlook QX is fiscal continued our the record centered from six of drive from DC categories Global input growth inflation, pet XX last the in constraints. in U.S. a provider actions. the net the strong innovation X.X% in the leading remain general, excited represented confident versus the XXXX see quarter declined the by unique We benefit Profits Pet sales indicative net quarter business. cost grew offset and We with from reported by XPL one of new engagement a Profits end all acquisitions. will improvements growth output channels X.X% the third by fiscal fulfillment particularly partially line and under consumer the while this to XX impact and productivity chain well for higher and introducing input were and and costs due top centers. for of resurgence EBITDA the by EBITDA in strong at year This inflation our challenges the were for is continued level great productivity partially pressured including industry pricing supply have XX by consumables it’s for to pressured of and consecutive shipping of mortar and driven

aquatic As contract new animal influx impact we grooming by in chews across well The reported odor the slide discussed reason food six strategic Fourth animal pet showed Fourth XX by our adjusted of net related market into removers year more of and portfolio, the quarter COVID strong from products. of business. year’s is the last skews. normal and fiscal new hobbyists why over pet is was shipping due ahead days for and increased And continued QX high, recovery fiscal our and fewer successful and an and non have and XX% which This sales business demand finally stain we the significant XX% water lower like sales driven the strategic repellents cat, foods, portion household, consumer before, business. portfolio. seen margin sales X.X% XX. categories, we’ve The and and the EBITDA increased carry compounded growth of treats, in Fourth quarter remain decline to were adjusted QX care and aquatics and into a parents net also closing a fiscal bullish in and These bodes purchased overall EBITDA margins sales for insecticides quarterly XX. companion strong home XX.X% quarter and typically a manufacturing low items disruptions growth XX. XX.X% organic reptile about represent as decreased all sales exits revenue was velocity repeatably gains. net supply and full reporting another aids, were of and of very garden, of categories. just products small controls, dog historically decreased tools driven bird low QX filtration This of by year and this this continued share However,

we that leading we indicates by the season, during data market overall market QX our share POS and position increased points. growth Our XX XXXX basis an double had in digit estimated

we decrease continues lower We’re excited higher which manufacturing our EBITDA in offset new and costs integrated was rejuvenate into distribution as with about our also fully and driven operations. by to volumes perform by line and expectations The very cleaning another business product increases continues price quarter costs see materials that and pricing announced The in into improvements. to effect to go pressure. productivity round that business this has higher from of business freight. raw offset partially cost

our additional We the strategy action targeting pricing remain our in We brands the tell offset more further first are also inflation. around half to resources to and truly story invest to committed expected to deliver innovative now investments recognized life. our believe nature’s solutions strategic solutions and to and our will enjoying the EcoLogic further consumers Hot We leader market enhance in challenges the Spectracide, best of mission continued rejuvenate. Cutter, be for conquering Shot, consumer providing

as program transformation. We remain let’s success, Now this focused slide global our continued XX. and our turn productivity complete model with global program operating of efficiency on growth execution we improvement to on efforts internal our

committed back are to of We business strategy into reinvesting drive organic our sustainable savings growth. these the long to term

XXXX. our target of million savings of savings fiscal by the of We reaffirming are end $XXX gross

$XXX These XXXX. already operations have adjusting about HHI inflation. include and for the adverse fiscal approximately of million through this offset XXX continuing impacts gross some has end and $XXX total, achieved amounts of with business over since Our the tariffs the teams the of program’s the savings million are only inception captured helped in us savings million of

accelerated our way quarterly although impact, further we in these anticipated these various trends broad with pressure actions undertaken based cost reflect inflationary to our offset the an had we results As in meaningful quarter impacted industry wide a inflationary pressures. are this results have and

further are the coordinated suppliers operating us of to is offset forces. some response of a tools many processes, enhanced these our GPIP advantages our with in and leveraging improvements driving to global We inflation. our the market the partner productivity helping program through developed The our GPIP to launch utilizing new model and program

global With supply accelerate quarter. constrained the current current further expect in pressures the these we inflationary chain environment to

implemented of incremental with first our additional the further retail pricing price QX actively have also We in offset engaged inflation. FY to increases further taking and partners half in in XX are

mitigate and focus as While investments must growth to to consumer believe be R&D to each will an pressures as improve supply To simultaneously through culture fantastic area we better, for I acknowledge strategic on the initiatives doing incremental ways for all the our they’re section, XX,XXX to the faster product global finding want businesses, work availability, and a to supply and chain across coming as of our progress such Brands. thank of we us while employees operating make our us stronger chain. that improvement continue my to to sincerely And make quarter we initiatives. resiliency another XX end plus continue fiscal of Spectrum cost insights, in marketing, and

David. Now back to

David Maura

slide Thank key for XX. just today. recap the call Thanks, of for few minutes joining the takeaways here take thanks you on much, on I’d you like a and Randy. to Jeremy, us very all to here

nothing supply constrained We’ve growth operations. pressures process globally our of EBITDA and our term for of a through in once fourth successful adjusted as improve backdrop and in to to our as from We’ve quarter find demonstrated accelerating face operations. and business progress XX% discipline delivered business inflationary XX% invest by very XX the long our in is allocation sales offset chains and we a productivity. ways both to price saw First, in results continuing short our strong remarkable. inflation Spectrum great well again in growth financial fiscal growth the family us include an continuing where capital from The results

is improvement those we program reinvest Our productivity savings to we of company. global and delivering growth continue the the term into committed to long savings

$X.X our we strategic the business sale shift a for Brands for Secondly, are with driving billion. Spectrum HHI of

the the through it’s As customary mentioned well is regulatory earlier, and process going progressing review.

conservative X sale. to target to the we the adjusted X.X a times to balance leverage We gross expect term average deleverage leverage to our HHI of closure X.X leverage. more upon net the range approximately sheet long And times have

target deploy addition, capital In of $X to we approximately and to this range. to expect have leverage maintain billion

our operating constraints. and global despite the pressures remains positive Third, momentum inflationary in businesses supply

inflation fiscal productivity a to response pricing this and accelerate already XXXX. to launched expect We’ve in programs. coordinated actions We through

in for way are of high many single this businesses am targeting together we to net our fiscal has EBITDA about of single earlier the face to the growth digit challenges and referenced come digit future the proud I’m during growth team I the low XX. sales As mid XXXX. very optimistic call, and personally fiscal

to And the to focus face demonstrated mentioned the earlier, term management As company’s our I we ever to discipline team than operate shifted more and profitability future. long the while continuing has the supply profitability has now culture this on in of efficiently growth invest global maintain businesses. chain, the continue challenge and to

On the a the demand we the consumption side have home level experienced Care and demand higher our and of Global equation, businesses. sustained to garden and of Pet shift

favorable productivity holiday launches all workers want thank special working our that advertising in employees of better supply remains three the leave future And efficient Overall, frontline environment savings fiscal season, from the we home. and in bodes momentum new growth many our the strong Macroeconomic are at diligently summary, global of a around teams XX driving the give over a outlook have which well this and other make product distribution the reinvesting home. of continue home despite to of we businesses. world XXXX. sights, been peak company living from the maintain our and care to I The we enter to our expected we’re next me fiscal investments our teams more and to pipeline, in innovation continue today. as is XXXX. as new the and Brands a quarters. In to I Spectrum our various continued energy to are for want again of back we factories about fiscal our development The we businesses. from genuinely the to personal the beyond thanks for expect the couple XX We much fiscal bright team. favorable of growth our challenges chain improvement into our making program in also and enthusiastic centers,

I our platforms. to Jeremy navigate as turn your now amazing the you for materials, you I questions have any securing market call company time. to extremely job I’d to work. support. to made over Thank products sacrifices You thank successfully an back have. through our for grateful these Brands the like for to our win we products may all challenging times. thank your and bring for us I’m containers, hard done your employees you allowing across you for business Spectrum continue have to continuing new

Jeremy Smeltser

pick please? Q&A Josh, Hey, the can you David. up for Thanks, us

Operator

[Operator Our Labick CJS from first Robert with comes Instructions] you. Thank question Securities.

proceed with may question. You your

Robert Labick

to And morning. question and you a it is wanted one and on questions. more hole stuff, cash great capital pockets?” Good with How the know right additional well? a get their allocation execution, from management operating there past, you feel about I now related, to portfolio the clients talked But how your this environment. maybe we’re reinvestment you kind I might hole Congratulations get the that restructuring in of, be will about burning in start one into ask all of people, then “will a burn just you but question about could of remind just we’ve opportunities tough number kind once getting obviously in be? please? in pocket kind cash kind patient and of So then as

David Maura

burn of encourage story the company. time was shareholders business too really has employees. fix a $X.X years we not We’ve think should I’m become of market the more leadership the the HHI, numbers, individual cap I in largest serving personally empower think our create where going three and far to over one some a I our noise that, cash. there our the any or definitely with are the lot the we holes to think if to for announcement. to the of units been billion clearer I really that hard of and inspire, gratified sale pocket last one of the in the last at and with company as worked this you’re the apologize crystallized Well, than Look, is, XX fix an that environment am months to I with our culture, of really I outside value of while the new is just story, investor work you’re for operation

in rates, cash We we shares will in completely all particularly debt can account. think the But I pet when some still with given everyone and down that our that are I we underlying the we either defeat have in the feel I deal undervalued only gross of leave mean, pay we our knows, sheet checking debt. garden And, current valuation our business, home billion and can businesses. about or HHI. $X.X materially closes, like mean, given the balance growth

And were not new are very continue launching so, see currently. about We we business M&A, pet, to to businesses. that we building eventually, buy and and highly and as really shares material And think, really you’re taking so have believe a products businesses. us home strong share brands will that if those tomorrow, I employees market attractive execute listen, mean, build I want believe very would wrong, we amazing probably to that excited you We we understand close incentivized garden. deal doing and we growth, we platforms,

in be in underlying structures. good HHI. that’s I home And going. I’ve start and continue But that business. the again, solutions hard of the next I been great personal to opportunities And my our to for should with with our the so would to Clearly I’ll It think home couple and of team be businesses, kind shareholders value with get think for multiple, there. currency. opinion. garden able are close to look I where possible our And things create pet, stock, value and to see lead an growth I so working margin to working hopefully particularly months, what expanded see we’ll on remains the care assets undervalued think,

you can in there. dedicated go wins we my XX. It’s seen involved across some team a business of got looking market and to near know got seeing we dear We’ve heart very the that I’m many with want and great And to We’ve globe. there. in where forward continue to As I investing that. share back personally

think let I most failed hits know to I If that your answer. not, please what me So question. of

Robert Labick

very looking No, everything that’s great. for. helpful. And I was hit it That’s

to constrained the chain? the supply you supply or kind demand sales to this given operations widely But satisfy any and So of about, chain likely by way issues, shifting category. varies ability talked your in by can discuss

David Maura

driving had we get and rates that’s we we rest team lot the to all XX color? equation add yes, everyday and inventory environment Randy for in the chain never a there’s exceedingly it, remains robust. Jeremy why battle our let color, sales, an of this I’ve demand the further so I’ll side It’s these be But, inflationary want I the up. and and continued, needed, pride an that’s you much years. inventory some question the no we fill if we’ve heavily invested seen over could supply exceedingly stuff have more materially of volatile add last like the navigating challenges but whole but but to in And are, Randy it that and

Randy Lewis

Good Bob. Yes. morning,

pretty issue it’s an for present categories say us. it’s and said, the would the each I of omni across each the business. businesses of David within And As consistent

line the quantifying midpoint you mean, year degree. probably for So some to fiscal to top you believe to we answer not of I your this supply, based the were suppressed number point, sure we that couple the going in continue just for a quarters tell last expect that’s and we’re upon on I we through the materially at that that can question, but

a daily it’s So yes battle.

Robert Labick

over-stimulating I’ll one and some to that back companies can’t get are avoid demand but question for they that it’s related and on me, Thanks to in promotion holding last queue, advertising back meet.

process you do in part time. of the and reinvestment personal just your in increasing a build terms know, that, it’s brand to equity the reinvestment is general, fit the also, budget build advertising been where and and So of of about brands I because in question multiyear over brands talk

sense two can tie that So if made would together, you they great? maybe be if questions those

David Maura

in, you the answer. the three we’ve invests that five way give will Randy real most a too reinvest then dollars, and last look brand terms headline culture now, But in I create that productivity over worked sacrifices temptation. to equities, to terms. day hard the the for build year years, things XX take the our three leans launch right made We’ve greatest of and so probably product in innovate is to think new instead companies and many that to to I’ll

in that volatility inflation chains, supply tempted you back massive on. you, the are at your people levers If amount are at going the pull coming and those be look that’s to to

going way progress. do that. come made much way are We not We’ve too far. We’ve too to

term. That’s you. to over win all Randy long I to got. investing We’re

Randy Lewis

maybe global made next that our And to strategy. pandemic our our point believe a We that couple massive model. we’re pick brought $XX companies operating stay in Bob, We like of and our the and And million of up ground I competitors commitment incremental litmus only and plan we stick conviction new a new we are in And faced strategy, down CEO an liquidity to possibility at going and to going ours. quarters. decision we facing committed say going complete not statement. investment a to XXXX. to double it, on lot double had meltdown, we’re we this issues and our strategy agree of board can our to during it’s with And with to strengthened test on this spring first that we’re timeframe. completely that of to back the

issues these there. stronger platform eventually once grow in from gone transitory we’re better So a are to

Operator

Thank you.

comes Capital Markets. question Nik Modi next with from Our RBC

question. You may your with proceed

Nik Modi

everyone. morning, Good thanks. Yes,

growth you XXXX. if just Just on it by that’ll to lot was just RBC looks when like at I you’re at provide have around We’ve question The a helpful. a you developments, That’s work a would could going on around, on late any market if XXXX, any what fiscal could perspective decongested share for question congestion on on you curious question. organic think mid viewpoint port and be chain. happen. broader guys are of kind supply done looking that what grow be categories just really of a think kind of quick the to thinking, some context, call just you

Randy Lewis

in. and West to our question suppliers take say is wants think job this especially morning, to take the the you Nik, decongest, Jeremy will Randy, that it if partners talking is that part the see long of our of on an the supply quantitative months a is and of Coast So, that. But over that would And not assessment how excellent we good see as first jump would kind from did our ports. But performance guys chain I’ll than early opinion one thought fiscal I pretty different the every much summer with We it we on been global materially sometime mid for we know XX situation us and has and thing three months continue being later. year could last wrong into fall. prediction

on situation. are maintaining able to we and speed to the react focusing to So be flexibility

But ball. crystal we a on of kind have don’t we aligned that. you if So with

Jeremy Smeltser

has Randy get kind and we the effect need QX. marketplace strategically received and would I that categories. talked inflation is Yes, the pricing into said majority that continuing in with been offset pricing, agree to the and that on of What to XX you about, in goes that to tell of into fiscal we is place everything I QX

XX and overall just consumers means inflationary really demand fiscal We’re a bit for needs on our but on increase cautious not impacts pricing, really what that in about beyond.

There’s tell our price. would you majority for really built there. that organic forecast the the net And volume sales is some into in so FXX I of

be that I we but been should overall today, is I it about we see demand think rates pocketbook consumer current continues relates the at on something it consumers. we’ve think the as all conservative thinking if that

David Maura

we XXXX. pretty year I will phasing to be are today that is telegraph we’re fiscal and reversed the trying clearly think of actually to where this

out figuring We’re where going is. versus to spend QX, QX dollar unit really that demand

higher have don’t that. plans choice. the got inflation been out that comes businesses, much The when all we same out together we has anywhere to our full and can little half HBC we time unfortunately, we’ve and modeling do of yes, think of pet, we it expect so good weighted. I to go think and should expect garden And and home a look, you get would less back very But a productivity, at aggressive lot We But pay I have year. growth will, price. a a the of very growth fiscal the year you’re

Operator

Thank you.

Our comes Peter with question from Grom next UBS.

question. You may proceed with your

Peter Grom

on Good great morning, everyone congrats and a quarter.

maybe there in release nicely just was mentioned a you and I I deal remarks. on know to update this. an maybe your in So timing progress I missed don’t But continues the think start David, the

update you I and a on seems as committed could calendar some the follow up. QX concrete maybe particularly close process, this have So to then [Indiscernible] provide more

David Maura

expected to I didn’t and No, than it can That’s I government. can’t you’re United you. sooner close to. don’t the States I because tell right. closes proceeding later. I I want mention control rather But it’s well timing, really hopefully all and

Peter Grom

on or it’s targets. job few you think low more GPIP by to building perspective? then things million tremendous mentioned cushion? low of this Xx, help some $XXX digit from $XXX very synergies the done very particularly, Should that us say And then mid out a dynamic And I digit to number, last Thanks. guidance key bridging the a against know So over the as this hoping Jeremy, cost either the cases HHI, embed for to rejuvenate that you’ve you it current in you I components lastly most which driving quarter, single And was mid benefits, could adjusted your impressive. that range be unpack single go is business? past XX, and can of to even the maybe we guess delivering pricing. would and million years and what environment. are with when you understand the growth I almost what’s But moving importantly, about a within or EBITDA is delivering guidance maybe fair get inflation, which fiscal credibility

Jeremy Smeltser

Yes.

in company since same you your whether right face it’s and thing, to are one year about FXX. go part a a us mean, as fiscal is question, material yes, continuing year out first mean, of basis, in inflation inflation that no those look the the but $XX like price. calendar into, expect in to XXX the of our we’re doubt operations or XXX Obviously, million we now fiscal was I million the first items XX, XX. it’s $XX been that So facing and every of most important Those buckets I we’re the end, about XXX dynamic. - on is

things billion today I ramp give our quickly QX. would as up, QX be on our versus made communicated and price that you’re said, based Randy and year inflation story similar So pricing you’ve stable should mean, actually like think solace projecting And year on particular take bit million a in very good significant. QX thing remain ours at of certainly or which in shareholders is, $X and never to that that as and news on inflation cost into perspective that right I we now, we’re hopefully, from we David and behind is mentioned, as are like the online. to just results that’s take to QX analyzing that etc. as and for need, coming it change. we’re point lived know get a QX. We up in going expect if as one is the QX top of the the line a The ours, And in the continuing majority see because $XXX like we particular, certainly come place us. operations, things as seen it’s wrong, as seen that looking last the to you if in businesses businesses on going you’ve assumptions business and about to I so anything is I’ve

that’s an thing. So important

just the overall rest think will I from volume. come

more organic. how better, As be could earlier have on could see the higher I mentioned volume, just frankly. we’ve could a think, We’ll the incremental little progresses. inflation, year drive conservative been support price I and EBITDA Volume to

was Rejuvenate for $XX remarks, only important. we it said But fiscal months. that acquisition owned year I FXX. about revenue is four full it million in of beyond prepared think my I

all months in So we got the eight that I as discussed, total. business the we in margins have that means discussed, business home know have you than and and as garden on higher are come

for those So that’s we items. into Honestly, a nice are fiscal tailwind as the head us XX. material biggest

in than deeper won’t hour that interest just of coming go we’re the I right the time, here. any because up now, on So

Operator

question Carey with Securities. Thank And you. next Fargo Wells our comes from Christopher

question. You with may proceed your

Christopher Carey

wanted I on comment. just the to follow up pricing

inflation think should I specific EBITDA XX% year was to So XX% of by be it end. covered

number So is one that.

just trying confirm I’m means. to guess what exactly I So that

billion fiscal to year? of you incremental that million to So in $XXX saying cover of the $XXX of billion you dimensionalize you be to up, that the expect the about you can just expect the course that you are time pricing inflation to me pricing caught saying that Are help $XXX by you QX over comment? get

David Maura

of the at the trillion favorable increases far of to to going despite so at it’s, you out consumer But and situation let it’s here The consumers XXXX, price moment. Yes. XXXX, got look, guidance. a environment. just demand. in It’s Right very and raise reality looking there’s without backdrop. And just liquidity. very consumer we’re $X.X that’s we look, current a can’t I fact. it. you $X mean, fluid the continues giving And take - spend, the I’m But economic now are dynamic a excess trillion confident Randy macro price

long or three brands. the one winner term to years to now. to want build number five take We be We player, are market thinkers. want we and We want from share,

obviously effects. next right in balance we there’s those so dollars And we because units. making get lag quarter sure there’s to want, And the want spend this we

let to take hit time too working a fast, far faster equilibrium, details. price will. better ahead to get Randy we’re you it want price if don’t with your let needs degradation get we It you and provide that takes and increase margins. on cost it you so demand You that inflation. than But to can just continues that me if take too But you input

Randy Lewis

just businesses, things Chris, have lot correctly. of across pieces in various Yes, generally you’re categories. and a think I We thinking regions, of moving

price brands them in Some different of sensitive of less environments. others, them playing are a little competitive some than

for And retail a we’re working very for consumers. doing all focus. well businesses so long us, sure term and for the thing our right them we’re as and make that as to as said, David partners Again, try with well and of the our with

inflation. think the all So price able I headline to anticipate the we’re not, we is, do not being saying will for we

and in over other that do partnerships, address of long We etc, will term. to productivity areas to other have things the innovation,

Christopher Carey

Thanks you. of in. a back lot just jump conscious time. I’ll thank

Operator

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

You may question. your proceed with

Ian Zaffino

guess your XX% or be there we’re the that for I great. higher dead some is any lower XX% But verticals horse Are than going pricing here. that a that than Hi, categories? are out it spread to pro might across that? the categories be where inflation, rata

David Maura

done about price in have partnerships. customers, of well three to right we’re feel Care, handle together home getting strongest that HPC. probably It’s in and with there thus and these perspective, what businesses are the to we followed So garden, good three our is But But way wide Pet figure from job From unit strategizing far. are think by excellent definitely mind mentioned a I us issues all communicating is fluctuations. some our consumers overall, a power subcategory quarry followed retail coming I variations all an our by and the that smaller. with perspective out macro Global with businesses business at pricing all it’s pleased here, think are been then

Ian Zaffino

you Thank very much.

David Maura

Thanks Ian.

have question. one Josh, we time more think I for

Operator

JP last Carla Morgan. Yes. Casella And our from question comes with

with proceed your question. may You

Carla Casella

great. Hi,

that of there the cost this are On increases about are driving the the that if talk are most that still the we test for is increases some quarter there the and the you of increasing peak, $XXX just on can just materials if those million $XXX cost million and track?

David Maura

Yes.

Let start and Randy me you will give materials. details on some

ocean that would was marketplace. the an the lot in why will actual lead QX as you’ll balance was will are P&L actually ocean QX that the being highest year, overall now I be inventory experiencing experience of often so year in being was which said perspective, second. inflation QX, second. of challenged. on that hit largest So materials we’ve materials the and today Last times But you recall, the a tell in with from dollar Opposite we’ve of freight with given right the experienced freight long sheet component is we’re last the highest inflation the QX

So on the overall on color hits through that. material will break most. down kind of Randy gives us what some the walk

Randy Lewis

expect would more consumer plastics, Yes, for so a of the company what’s XX%, said, as driving of Carla it the crude goods of than of etc. ours. our normal as being think Jeremy gas, remaining pieces liner you HDPE, such oil, kind transportation materials say top would board, total things or half packaged natural being it. steel, I include that then would commodities And It’s two thirds think the

much it’s all main drivers So, anticipate. of that would the pretty you

Carla Casella

Thank you color. that additional much for so

Jeremy Smeltser

thanks, for for next you and Thanks, and week have Carla. We be care. great weekend. calls today Friday hope And us. available all great everybody a follow Take today. well joining a up I’ll as as appreciate attention your

Operator

participating. This today’s call. you. for you Thank concludes Thank conference

disconnect. now may You

Spectrum Brands (SPB) 12 Nov 212021 Q4 Earnings call transcript