Spectrum Brands(SPB) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for the three-month period ended December 29, 2024, increased to $700.2 million, up from $692.2 million in the same period last year, representing a growth of 1.5%[15] - Gross profit rose to $257.8 million, compared to $244.9 million in the prior year, reflecting an increase of 5.5%[15] - Operating income significantly improved to $44.7 million, up from $25.0 million, marking an increase of 78.8%[15] - Net income from continuing operations was $24.6 million, compared to $17.5 million, which is a year-over-year increase of 40.0%[15] - Basic earnings per share from continuing operations increased to $0.87, up from $0.51, representing a growth of 70.6%[15] - Net income for the three-month period ended December 29, 2024, was $23.8 million, a decrease of 18.5% compared to $29.2 million for the same period in 2023[18] - Comprehensive loss for the three-month period ended December 29, 2024, was $(25.6) million, a significant decline from a comprehensive income of $45.5 million in the same period of 2023[18] - Total segment adjusted EBITDA increased to $87.5 million for the three months ended December 29, 2024, compared to $78.7 million for the same period in 2023, representing an increase of 10.9%[81] - Net income from continuing operations attributable to controlling interest was $24.3 million for the three months ended December 29, 2024, up from $17.4 million in the prior year, reflecting a growth of 39.7%[84] Assets and Liabilities - Total assets decreased to $3,614.6 million as of December 29, 2024, down from $3,842.3 million at the end of the previous quarter[13] - Total liabilities decreased to $1,586.0 million from $1,700.6 million, indicating a reduction of 6.7%[13] - The company’s total shareholders' equity as of December 29, 2024, was $2,028.5 million, a decrease from $2,300.8 million as of December 31, 2023[20] - Total debt as of December 29, 2024, is $575.1 million, a decrease from $577.7 million on September 30, 2024[44] Cash Flow - Cash flows from operating activities from continuing operations showed a net cash used of $(71.9) million for the three-month period ended December 29, 2024, compared to a net cash provided of $18.1 million in the same period of 2023[24] - Total cash, cash equivalents, and restricted cash at the end of the period was $182.0 million, down from $445.4 million at the end of the same period in 2023[24] - The company reported a net cash used by financing activities of $(97.3) million for the three-month period ended December 29, 2024, compared to $(439.8) million in the same period of 2023[24] - Cash flows from operating activities decreased by $90.0 million to $(71.9) million, primarily due to increased working capital needs[116] - Cash flows from investing activities dropped by $139.5 million, attributed to reduced short-term investment activity[117] - Cash flows from financing activities increased by $342.5 million, mainly due to lower debt repayment and share repurchase activity[118] Inventory and Expenses - Inventories increased to $507.4 million from $462.1 million, reflecting a rise of 9.8%[13] - Selling, general & administrative expenses decreased to $213.1 million, representing 30.4% of net sales, down from 31.8% in the prior year[105] - The company reported depreciation expenses of $14.0 million for the three-month period ended December 29, 2024, slightly down from $14.4 million in the same period of 2023[24] - The Company incurred total costs of $4.8 million related to strategic transactions and restructuring initiatives for both December 29, 2024, and December 31, 2023[95] - Exit and disposal costs for the three months ended December 29, 2024, were $0.5 million, primarily related to severance and contract termination[96] Segment Performance - The GPC segment reported net sales of $260.0 million, down from $276.9 million, indicating a decline of about 6.3% year-over-year[76] - The H&G segment experienced a significant increase in net sales, rising to $92.1 million from $72.0 million, reflecting a growth of approximately 27.9%[76] - The HPC segment's net sales remained relatively stable, increasing slightly to $348.1 million from $343.3 million, a growth of about 1.4%[76] - The GPC segment reported adjusted EBITDA of $51.5 million for the three months ended December 29, 2024, slightly down from $52.7 million in the prior year[81] - The H&G segment showed a significant improvement with adjusted EBITDA of $9.3 million for the three months ended December 29, 2024, compared to a loss of $0.7 million in the same period of 2023[81] - The HPC segment maintained adjusted EBITDA at $26.7 million for both periods, indicating stable performance[81] Shareholder Returns - The company declared a dividend of $0.47 per share, an increase from $0.42 per share in the previous year[15] - The company made cash dividend payments of $13.2 million, or $0.47 per share, down from $14.1 million, or $0.42 per share, in the prior year[118] Other Financial Metrics - The effective tax rate for the three-month period ended December 29, 2024, was 32.5%, a decrease from 41.6% for the same period in 2023[67] - Interest expense significantly decreased by 67.7% to $6.2 million from $19.2 million due to reduced debt borrowings[100] - Adjusted EBITDA decreased to $77.8 million for the three months ended December 29, 2024, from $84.3 million in the same period of 2023, a decline of 7.7%[92] - Adjusted EBITDA margin was 11.1% for the three months ended December 29, 2024, down from 12.2% in the prior year[92] Legal and Regulatory Matters - The company is currently evaluating the impact of recently issued accounting standards on its consolidated financial statements, including ASU 2023-07 and ASU 2023-09, which will be effective for fiscal years beginning after December 15, 2023, and December 15, 2024, respectively[29][31] - The company continues to assess the impact of the OECD's Pillar Two framework, which introduces a global minimum corporate income tax of 15%[68] - The company is actively engaged in litigation related to the Tristar Business acquisition, which has resulted in significant operational challenges and increased costs[72]