Spectrum Brands(SPB) - 2025 Q4 - Annual Report

Financial Risks and Uncertainties - The company anticipates future cash flows and operating model adjustments due to current tariff impacts and geopolitical conditions[9] - The company faces risks from economic uncertainties, including the effects of the Russia-Ukraine war and the Israel-Hamas conflict on international trade and supply chains[10] - The company is exposed to significant international business risks that could impact its operations and financial results[17] - The company reported significant international business risks that could adversely affect its financial condition and operating results, including exchange rate fluctuations and compliance with foreign regulations[21] - The company’s financial flexibility may be limited by its indebtedness, increasing risks associated with additional debt[16] - The company has substantial indebtedness, which may limit its financial and operational flexibility and increase risks associated with additional debt[21] - The market price of the company's common stock is likely to be highly volatile, influenced by various external factors[20] - The company is subject to fluctuations in raw material prices, which could adversely affect its financial condition and profits[15] - The company is subject to various claims and litigation, which may adversely affect its financial condition and results of operations[21] Business Strategy and Operations - The company plans to separate its Home and Personal Care business into an independent entity, which may not achieve intended benefits or timelines[15] - The company may incur substantial costs related to strategic initiatives, including acquisitions and divestitures, which could divert management's focus[15] - The company’s operational efficiency and multi-year restructuring initiatives are critical for its long-term growth[21] - The company plans to continue focusing on research and development for new product innovations and enhancements to existing products[32][37] - The company's research and development strategy focuses on new product development and performance enhancements of existing products[43] - The company plans to continue leveraging brand names and customer relationships to introduce innovative products with enhanced value[43] Sales and Market Performance - Approximately 34% of segment sales for the year ended September 30, 2025, were generated from major retailers Amazon and Walmart[29] - For the year ended September 30, 2025, Amazon and Walmart accounted for approximately 42% of segment sales, with sales concentrated among a limited group of retail customers[40] - The Home and Garden segment's sales peaked during the first six months of the calendar year, with quarterly sales percentages for the year ended September 30, 2025, being 16%, 27%, 33%, and 24% respectively[35] - The Global Pet Care segment's sales remained consistent throughout the year, with quarterly sales percentages of 24%, 25%, 24%, and 27% for the year ended September 30, 2025[29] - Quarterly sales as a percentage of annual net sales for the year ended September 30, 2025, were 30% in Q1, 22% in Q2, 22% in Q3, and 26% in Q4[40] Employee and Operational Structure - As of September 30, 2025, the company had approximately 3,000 full-time employees, with 32% covered by collective bargaining agreements[45] - The company maintains ownership of most tooling and molds used by suppliers, which are primarily located in the APAC region[42] Cybersecurity and Compliance - The company faces significant cybersecurity risks that could materially impact its business and reputation[21] - The company must navigate compliance with evolving regulations regarding data privacy and intellectual property, which could harm its business[18] Environmental, Social, and Governance (ESG) Efforts - The company is committed to enhancing its Environmental, Social, and Governance (ESG) efforts, focusing on product safety, sustainability, and employee well-being[48] Foreign Exchange and Debt Management - The company has $8.1 million equivalent of debt denominated in foreign currencies, primarily consisting of finance leases[279] - A 10% unfavorable change in underlying foreign exchange rates could result in a potential loss of $69.2 million from outstanding foreign exchange derivative instruments[280]