☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No. | Name of Registrant, State of Incorporation, Address of Principal Offices, and Telephone No. | IRS Employer Identification No. | ||||||||||||
1-4219 | Spectrum Brands Holdings, Inc. | 74-1339132 |
333-192634-03 | SB/RH Holdings, LLC | 27-2812840 |
Registrant | Title of each class | Name of each exchange on which registered | ||||||||||||
Spectrum Brands Holdings, Inc. | Common Stock, Par Value $0.01 | New York Stock Exchange | ||||||||||||
SB/RH Holdings, LLC | None | None |
Spectrum Brands Holdings, Inc. | Yes | No | ☐ | ||||||||||||||
SB/RH Holdings, LLC | Yes | No | ☒ |
Spectrum Brands Holdings, Inc. | Yes | No | ☒ | ||||||||||||||
SB/RH Holdings, LLC | Yes | No | ☒ |
Spectrum Brands Holdings, Inc. | Yes | No | ☐ | ||||||||||||||
SB/RH Holdings, LLC | Yes | No | ☐ |
Spectrum Brands Holdings, Inc. | Yes | No | ☐ | ||||||||||||||
SB/RH Holdings, LLC | Yes | No | ☐ |
Spectrum Brands Holdings, Inc. | ☐ | ||||||||||||||||
SB/RH Holdings, LLC | ☐ |
Registrant | Large Accelerated Filer | Accelerated Filer | Non-accelerated Filer | Smaller Reporting Company | Emerging Growth Company | |||||||||||||||||
Spectrum Brands Holdings, Inc. | X | |||||||||||||||||||||
SB/RH Holdings, LLC | X |
Spectrum Brands Holdings, Inc. | ☐ | |||||
SB/RH Holdings, LLC | ☐ |
Spectrum Brands Holdings, Inc. | Yes | No | ☒ | ||||||||||||||
SB/RH Holdings, LLC | Yes | ☐ | No | ☒ |
Spectrum Brands Holdings, Inc. | Yes | ☒ | No | ☐ | |||||||||||||
SB/RH Holdings, LLC | Yes | ☐ | No | ☒ |
TABLE OF CONTENTS
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ITEM 15. | ||||||||||||
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PART III
ExceptTable of Contents
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Our Board of Directors
In accordance with our Third Restated By-Laws (our “By-Laws”)SBH and our Amended and Restated Certificate of Incorporation (our “Charter”), our Board currently consists of seven members that are currently divided into three classes (designated as Class I, Class II and Class III, respectively). At our 2021 annual stockholders’ meeting in August of 2021, our stockholders approved an amendment to our Charter to declassify our Board. We expect to complete the declassification process at our 2024 annual stockholders meeting. Pursuant to such charter amendment (i) our Class I directors stood for election at 2022 annual meeting and will stand for election for one-year terms thereafter, (ii) our current Class II directors would stand for election at our 2023 annual meeting and would stand for election for one-year terms thereafter, (iii) our current Class III directors would stand for election at our 2024 annual meeting and would stand for election for one-year terms thereafter and (iv) beginning in 2024, all directors would stand for election for one-year terms at the 2024 annual meeting.
Our Nominating and Corporate Governance Committee (“NCG Committee”) considers and chooses nominees for our Board with the primary goal of presenting a diverse and well-qualified slate of candidates who will serve the interests of our Company and our shareholders, taking into account the attributes of each candidate’s professional skillset and credentials, as well as gender, age, ethnicity and personal background. In evaluating nominees, our NCG Committee reviews each candidate’s background and assesses each candidate’s independence, skills, experience and expertise based upon a number of factors. We seek directors with the highest professional and personal ethics, integrity and character who have experience at the governance and policy-making level in their respective fields. Our NCG Committee reviews the professional background of each candidate to determine whether each candidate has the appropriate experience and ability to effectively make important decisions as a member on our Board. Our NCG Committee also determines whether a candidate’s skills and experience complement and enhance the collective skills and experience of our existing Board members.
Director Skills and Experiences
Our directors collectively represent a robust and diverse set of skills and experience, which we believe positions our Board and its committees well to effectively oversee the execution of our business strategy and to advance the interests of the Company and its stakeholders. The following table summarizes some of the key categories of skills and experience of our current directors:
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We are committed to ensuring that female and minority candidates are among the pool of individuals from which new Board nominees are selected. We have steadily advanced this objective by appointing to our Board a number of candidates,represents substantially all of whom are from a diverse background. As ofits assets, liabilities, revenues, expenses and operations. SB/RH is the date of this report, we are proud to have the benefit of a skilled and multifaceted Board, the majority of which is composed of female and diverse background members.
Director Diversity as Group
Director Diversity by Individual
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Board & Committee Composition
The names of our seven current directors and their respective classes, ages, Board tenures and committee memberships are each set forth in the following table:
Committee Membership3 | ||||||||||||
Name | Class1 | Age | Tenure2 | A | C | NCG | ||||||
Sherianne James Independent Director | I | 54 | 2018 | ○ | ● | |||||||
Leslie L. Campbell Independent Director | I | 62 | 2021 | ○ | ||||||||
Joan Chow Independent Director | I | 62 | 2021 | ○ | ||||||||
Hugh R. Rovit Independent Director | II | 62 | 2018 | ○ | ○ | |||||||
Gautam Patel Independent Director | II | 50 | 2020 | ● | ○ | |||||||
David M. Maura Executive Chairman | III | 50 | 2018 | |||||||||
Terry L. Polistina Lead Independent Director | III | 59 | 2018 | ● | ○ |
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Director Biographies
Set forth below are biographies for each of our directors, accompanied by descriptions of some of their key skills and experiences. The absence of any given category of key skills or experiences from the list preceding a director’s biography does not necessarily signify a lack of qualification in any such category.
Class I Directors
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Class II Directors
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Our Executive Officers
Our executive officers serve at the discretion of our Board. Our Board selected each of our executive officers because his or her background provides each executive with the experience and skillset geared toward helping us succeed in our business strategy. Our management team is composed of experienced executives from diverse backgrounds who focus on the performance of our Company to drive long-term outcomes. We are proud to have the benefit of individuals with diverse backgrounds on our executive team, and we are committed to promoting candidates from a diverse backgrounds as we select new executive officers.
Included in the discussion below is information regarding our executive officers who do not serve as directors of our Company. See “Our Board of Directors” aboveparent guarantor for certain information regarding David Maura, our only director-employee.
Jeremy W. Smeltser
Executive Vice President, Chief Financial Officer (November 2019 to Present)
Age: 48
Race/Ethnicity: Caucasian
Gender: Male
Jeremy W. Smeltser was appointed our Executive Vice President on October 1, 2019 and was appointed our Chief Financial Officer on November 17, 2019. He previously served as Vice President and Chief Financial Officer of SPX Flow, Inc. (“SPX Flow”). Prior to his role at SPX Flow, he served as Vice President and Chief Financial Officer of SPX Corporation, where he served in various roles, including as Vice President and Chief Financial Officer, Flow Technology and became an officer of SPX Corporation in April 2009. Mr. Smeltser joined SPX Corporation in 2002 from Ernst & Young LLP, where he was an audit manager in Tampa, Florida. Prior to that, he held various positions with Arthur Andersen LLP in Tampa, Florida and Chicago, Illinois, focused primarily on assurance services for global manufacturing clients. Mr. Smeltser earned a B.S. degree in accounting from Northern Illinois University.
Ehsan Zargar
Executive Vice President, General Counsel & Corporate Secretary (October 2018 to Present)
Age: 45
Race/Ethnicity: Asian (Middle Eastern)
Gender: Male
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Ehsan Zargar was appointed our Executive Vice President, General Counsel and Corporate Secretary on October 1, 2018. Mr. Zargar is responsible for the Company’s legal, environmental, social and governance, health and safety, insurance and real estate functions. In addition, Mr. Zargar takes a leading role in negotiating and implementing the Company’s M&A, capital markets and other strategic activities. Previously, Mr. Zargar also led the Company’s executive compensation program. From June 2011 until July 2018, Mr. Zargar held a number of increasingly senior positions with HRG Group, a publicly-listed acquisition company, including serving as its Executive Vice President and Chief Operating Officer from January 2017 until July 2018, as its General Counsel since April 2015 and as Corporate Secretary since February 2012. During his time at HRG Group, Mr. Zargar took a leading role in setting, negotiating and implementing HRG Group’s M&A, capital markets and other strategic activities. Mr. Zargar has extensive experience serving on private and public boards and committees of portfolio companies, including setting and overseeing senior management compensation programs. From August 2017 until July 2018, Mr. Zargar served as a director of SPB Legacy. From November 2006 to June 2011, Mr. Zargar worked in the New York office of Paul, Weiss, Rifkind, Wharton & Garrison LLP. Previously, Mr. Zargar practiced law at another major law firm focusing on general corporate matters. Mr. Zargar received a law degree from Faculty of Law at the University of Toronto and a B.A. from the University of Toronto.
Randal D. Lewis
Former Executive Vice President, Chief Operating Officer (October 2018 to December 2022)
Age: 56
Race/Ethnicity: Caucasian
Gender: Male
Randal D. Lewis was appointed our Chief Operating Officer in October 2018 and Executive Vice President in September 2019 and resigned from Spectrum in December 2022. He has direct responsibility for all operating divisions. Mr. Lewis was previously the President of our Global Consumer Division from March 2018, which included our Global Auto Care, Global Pet Care and Home & Garden business units. Prior to that, he was President of our Pet, Home & Garden business unit since November 2014. Previous to that, he was Senior Vice President and General Manager of our Home & Garden business since January 2011. From April 2005 to January 2011, Mr. Lewis served as our Home & Garden business’s Vice President, Manufacturing and Vice President, Operations. Prior to that, Mr. Lewis held various leadership roles from October 1997 to April 2005 with the former owners of United Industries Corporation, which is now owned by the Company, and from January 1989 to October 1997 Mr. Lewis worked at Unilever. Mr. Lewis earned a B.S. degree in mechanical engineering from the University of Illinois, Urbana-Champaign.
Rebeckah Long
Former Senior Vice President, Chief Human Resources Officer (September 2019 to December 2022)
Age: 48
Race/Ethnicity: Caucasian
Gender: Female
Rebeckah Long was appointed our Senior Vice President, Global Human Resources in September 2019 and was promoted to Senior Vice President and Chief Human Resources Officer in November 2021 and has direct responsibility for consistent delivery and execution of the Human Resources function globally. Ms. Long resigned from Spectrum in December 2022. Ms. Long previously served as Vice President of Global Human Resourcesdebt of Spectrum Brands, since April 2019. PriorInc., a wholly-owned subsidiary of SB/RH ("SBI"), and represents all of SBI assets, liabilities, revenues, expenses, and operations. Thus, all information contained in this report relates to, and is filed by, SBH. Information that is specifically identified in this report as relating solely to SBH, such as its financial statements and its common stock, does not relate to and is not filed by SB/RH. SB/RH makes no representation as to that she was Human Resource Business Partner for several business divisions within Spectrum Brands since March 2008, with a focusinformation. The terms “the Company,” “we,” and “our” as used in this report, refer to both SBH and its consolidated subsidiaries and SB/RH and its consolidated subsidiaries, unless otherwise indicated.
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Corporate Governance
The following table provides an overview of our corporate governance practices.
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Board Structure
Lead Independent Director
Mr. Polistina was appointed to our Board, and as our Lead Independent Director in July 2018. In his capacity as our Lead Independent Director, Mr. Polistina:
presides at all meetings of the Board at which the Chairman of the Board is not present;
presides at all executive sessions of the independent members of the Board and has the authority to call meetings of the independent members of the Board;
serves as liaison between the management and the independent members of the Board and provides our Chief Executive Officer (“CEO”) and other members of management with feedback from executive sessions of the independent members of the Board;
reviews and approves the information to be provided to the Board;
reviews and approves meeting agendas and coordinates with management to develop such agendas;
approves meeting schedules to assure there is sufficient time for discussion of all agenda items;
if requested by major shareholders, ensures that he is available for consultation and direct communication;
interviews, along with the Chair of our NGC Committee, Board and senior management candidates and makes recommendations with respect to Board candidates and hiring of senior management;
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consults with other members of our Compensation Committee with respect to the performance review of our CEO and other member of our senior management team; and
performs such other functions and responsibilities as requested by the Board from time to time.
Mr. Maura serves as our Executive Chairman and our CEO. Given Mr. Maura’s broad experience in mergers and acquisitions, the consumer products and retail sectors and finance and investments, as well as his role in SPB Legacy’s strategy and growth since 2010, our Board believes that it is in the best interest of the Company for Mr. Maura to concurrently serve as our Executive Chairman and CEO.
Director Independence
In accordance with the New York Stock Exchange Listed Company Manual (the “NYSE Rules”) and our Corporate Governance Guidelines, a majority of our Board is required to be composed of independent directors. All of our directors, except for David Maura (our Chairman and CEO), qualify as independent directors. More specifically, our Board has affirmatively determined that none of the following directors has a material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company): Leslie L. Campbell, Joan Chow, Sherianne James, Terry L. Polistina, Hugh R. Rovit and Gautam Patel. Our Board has adopted the definition of “independent director” set forth under Section 303A.02 of the NYSE Rules to assist it in making determinations of independence. Our Board has determined that the directors referred to above currently meet these standards and qualify as independent.
Meetings of Independent Directors
The Company generally holds executive sessions at each Board and committee meeting. In his capacity as our Lead Independent Director, Mr. Polistina presides over executive sessions of the entire Board, and the Chair of each committee presides over the executive sessions of that committee.
Committees Established by Our Board of Directors
Our Board has designated three principal standing committees: our Audit Committee, our Compensation Committee and our NCG Committee, each of which has a written charter addressing each such committee’s purpose and responsibilities and include such duties that the Board may designate, from time to time. Our Board, directly or through one or more of its committees, provides oversight on our management’s efforts to promote corporate social responsibility and sustainability, including efforts to advance initiatives regarding the environment, diversity, equity and inclusion, human rights, labor, health and safety and other matters. Each such committee is composed entirely of independent directors.
Audit Committee
Our Audit Committee has been established in accordance with Section 303A.06 of the NYSE Rules and Rule 10A-315(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), forare available free of charge through our website at www.spectrumbrands.com as soon as reasonably practicable after such reports are filed with, or furnished to the purpose of overseeing the Company’s accountingSEC. The SEC also maintains a website that contains our reports, proxy statements and financial reporting processes and auditsother information at www.sec.gov. In addition, copies of our financial statements. Our Audit Committee is responsible(i) Corporate Governance Guidelines, (ii) charters for monitoring (i) the integrity of our financial statements, (ii) our independent registered public accounting firm’s qualifications and independence, (iii) the performance of our internal audit function and independent auditors and (iv) our compliance with legal and regulatory requirements. The responsibilities and authority of our Audit Committee are described in further detail in the Charter of the Audit Committee, as adopted by our Board in July 2018, a copy of which is available at our website www.spectrumbrands.com under “Investor Relations—Compensation Committee, and Nominating and Corporate Governance Documents.”
The current members of our Audit Committee, are Gautam Patel (Chair), Joan Chow, Leslie L. Campbell and Hugh R. Rovit. Our Board has determined that all members of our Audit Committee qualify as “audit committee financial experts” as defined in the rules promulgated by the SEC in furtherance of Section 407 of the Sarbanes-Oxley Act of 2002. Our Board has determined that all members of our Audit Committee qualify as independent, as such term is defined in Section 303A.02 of the NYSE Rules, Section 10A(m)(3)(B) of the Exchange Act and Exchange Act Rule 10A-3(b).
Compensation Committee
Our Compensation Committee is responsible for (i) overseeing our compensation and employee benefits plans and practices, including our executive compensation plans and our incentive compensation and equity-based plans, (ii) evaluating and approving the performance of our Executive Chairman and CEO and other executive officers in light of those goals and
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objectives and (iii) reviewing and discussing with management our compensation discussion and analysis disclosure and compensation committee reports in order to comply with our public reporting requirements. The responsibilities and authority of our Compensation Committee are described in further detail in the Charter of the Compensation Committee, as adopted by our Board in November 2020, a copy of which is available at our website www.spectrumbrands.com under “Investor Relations—Corporate Governance Documents.”
The current members of our Compensation Committee are Terry L. Polistina (Chair), Sherianne James and Gautam Patel. Our Board has determined that all members of our Compensation Committee qualify as independent, as such term is defined in Section 303A.02 of the NYSE Rules.
NCG Committee
Our NCG Committee is responsible for (i) identifying and recommending to our Board individuals qualified to serve as our directors and on our committees of our Board, (ii) advising our Board with respect to board composition, procedures and committees, (iii) developing and recommending to our Board a set of corporate governance principles applicable to the Company and (iv) overseeing the evaluation process of our Board, the committees of the Board, the individual directors and our Executive Chairman and CEO. The responsibilities and authority of our NCG Committee are described in further detail in the Charter of the NCG Committee, as adopted by our Board in July 2018, a copy of which is available at our website www.spectrumbrands.com under “Investor Relations—Corporate Governance Documents.”
The current members of our NCG Committee are Sherianne James (Chair), Terry L. Polistina and Hugh R. Rovit. Our Board has determined that all members of our NCG Committee qualify as independent, as such term is defined in Section 303A.02 of the NYSE Rules.
Board and Committee Activities
During Fiscal 2022, our Board held a total of nine meetings and acted by unanimous written consent on one occasion. Our Audit Committee held a total of four meetings during Fiscal 2022. Our Compensation Committee held nine meetings during Fiscal 2022. Our NCG Committee held five meetings during Fiscal 2022.
During Fiscal 2022, all of our directors attended 100% of the meetings of the Board and committees on which they served.
Our Practices and Policies
Corporate Governance Guidelines and Code of Ethics and Business Conduct
Our Board has adopted our Corporate Governance Guidelines to assist it in the exercise of its responsibilities. These guidelines reflect our Board’s commitment to monitor the effectiveness of policy and decision-making, both at our Board and management level, with a view to enhancing stockholder value over the long term. Our Corporate Governance Guidelines address, among other things, our Board and Board committee composition and responsibilities, director qualifications standards and selection and evaluation of our CEO. In addition, pursuant to these guidelines, our Board has formalized a process by which our directors are assessed annually by our NCG Committee. The assessment includes a peer review process and evaluates the Board as a whole, the committees of the Board and the individual directors. In carrying out this assessment, we may retain an external evaluator to assist our Board and NCG Committee at least every three years. Our Board has adopted a Code of Business Conduct and Ethics Policy for directors, officers and employees and a(iv) Code of Ethics for the Principal Executive Officer and Senior Financial Officers are available on our website at www.spectrumbrands.com under “Investor Relations.” Copies will also be provided to provide guidanceany stockholder upon written request to our CEO, Chief Financial OfficerSpectrum Brands, Inc. at 3001 Deming Way, Middleton, Wisconsin 53562 or via electronic mail at investorrelations@spectrumbrands.com, or by telephone at (608) 278-6207.
operating results.
During Fiscal 2019, our Board adopted a majority voting policygeographic region sold by destination for the election of directors. Pursuant to this policy, which applies in the case of uncontested director elections, a director must be elected by a majority of the votes cast with respect to the election of such director. For purposes of this policy, a “majority of the votes cast” means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director and abstentions and broker non-votes are not counted as “votes cast.”
The policy also provides that in the event that an incumbent director nominee receives a greater number of votes “against” than votes “for” his or her election, he or she must (within five business days following the final certification of the related election results) offer to tender his or her written resignation from the Board to the NCG Committee. The NCG Committee will review
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such offer of resignation and will consider such factors and circumstances as it may deem relevant, and, within 90 days following the final certification of the election results, will make a recommendation to the Board concerning the acceptance or rejection of such tendered offer of resignation. The policy requires the decision of the Board to be promptly publicly disclosed.
Board Diversity Policy
In October 2020, our Board adopted a Board Diversity Policy. The purpose of this policy is to set out the basic principles to be followed to ensure that the Board has the appropriate balance of skills, experience and diversity of perspectives necessary to enhance the effectiveness of the Board and to maintain the highest standards of corporate governance. Pursuant to this policy, selection of Board candidates will be based on a range of perspectives with reference to the Company’s business model and specific needs, including, but not limited to, talents, skills and expertise, industry experience, professional experience, gender, age, race, language, cultural background, educational background and other similar characteristics.
Anti-Hedging Policy
The Company believes it is improper and inappropriate for our directors, officers, employees and certain of their family members (each, a “Subject Person”) to engage in hedging, short-term or speculative transactions involving the Company’s securities. Our anti-hedging policy, which we further strengthened during Fiscal 2019, applies to all Subject Persons. The Company prohibits Subject Persons from engaging in (i) derivative, speculative, hedging or monetization transactions in Company securities (including, but not limited to, any trading on derivatives (such as swaps, forwards and/or futures) of Company securities that allow a stockholder to lock in the value of Company securities in exchange for all or part of the potential upside appreciation in the value of such stock), (ii) short sales (i.e., selling stock the Subject Person does not own and borrowing shares to make delivery) or (iii) buying or selling puts, calls, options or other derivatives in respect of Company securities.
Anti-Pledging Policy
In addition, the Company believes it is improper and inappropriate for any Subject Person to engage in pledging transactions involving the Company’s securities. During Fiscal 2019, we adopted a robust anti-pledging policy, which prohibits Subject Persons from pledging or encumbering Company securities as collateral for a loan or other indebtedness. This prohibition includes, but is not limited to, holding such shares in a margin account as collateral for a margin loan or borrowing against Company securities on margin. Any pledges (and any modifications or replacements of such pledges) that existed prior to the adoption of our policy are grandfathered unless otherwise prohibited by applicable law or Company policy and so long as any modification or replacement of any pre-existing pledge does not result in additional shares being pledged.
Securities Trading Policy
Our Company believes that it is appropriate to monitor and prohibit certain trading in the securities of our Company. Accordingly, trading of the Company’s securities by directors, executive officers and certain other employees who are so designated by the office of the Company’s General Counsel is subject to trading period limitations or must be conducted in accordance with a previously established trading plan that meets SEC requirements. At all times, including during approved trading periods, directors, executive officers and certain other employees notified by the office of the Company’s General Counsel are required to obtain preclearance from the Company’s General Counsel or his designee prior to entering into any transactions in Company securities, unless those transactions occur in accordance with a previously established trading plan that meets SEC requirements.
Transactions subject to our securities trading policy include, among others, purchases and sales of Company stock, bonds, options, puts and calls, derivative securities based on securities of the Company, gifts of Company securities, contributions of Company securities to a trust, sales of Company stock acquired upon the exercise of stock options, broker-assisted cashless exercises of stock options, market sales to raise cash to fund the exercise of stock options and trades in Company’s stock made under an employee benefit plan.
Stock Ownership Guidelines
Our Board believes that our directors, named executive officers (“NEOs”) and certain of the Company’s other officers and employees should own and hold Company common stock to further align their interests with the interests of stockholders and to further promote the Company’s commitment to sound corporate governance.
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To memorialize this commitment, effective January 29, 2013, our Board, upon the recommendation of our Compensation Committee, established stock ownership and retention guidelines (the “SOG”) applicable to the Company’s directors, NEOs and all other officers of the Company and its subsidiaries with a level of Vice President or above (such officers and our NEOs, our “Covered Officers”). Effective January 1, 2020, the Company improved and enhanced the SOG to further align it with best practices by: (i) increasing our directors’ and Covered Officers’ retention requirement from 25% to 50% of their net after-tax shares received under awards granted until they reach their required stock ownership under the SOG; and (ii) extending the applicable time period for our directors and Covered Officers to achieve the minimum ownership requirements to five years from the date of eligibility or promotion. Even when the required stock ownership is obtained, all NEOs are subject to an additional stock retention requirement requiring them to retain at least 50% of their net after-tax shares of Company stock received under awards for one year after the date of vesting.
Under the updated SOG, our directors are expected to achieve stock ownership with a value of at least five times their annual cash retainer. In addition, our Covered Officers are expected to achieve the levels of stock ownership indicated below (which equal a dollar value of stock based on a multiple of the Covered Officer’s base salary).
| Brands | |||||||||||||||||
| Dog and cat chews, treats, wet and dry foods; Dog and cat clean-up, behavioral training aides, health and grooming products; Indoor bird and other small animal food and care products. | Good'n'Fun®, DreamBone®, GOOD BOY®, SmartBones®, IAMS® (Europe only), EUKANUBA® (Europe only), Nature's Miracle®, FURminator®, Dingo®, 8IN1® (8-in-1), Meowee!®, and Wild Harvest™. | ||||||||||||||||
| Consumer and | Tetra®, Marineland®, Instant Ocean®, GloFish®, and OmegaSea®. |
| 2023 | |||||||||||||||||||||
| 24 | |||||||||||||||||||||
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Third Quarter | 24 | % | ||||||||||||||||||||
Fourth Quarter | 26 | % |
The stock
Product Category | Products | Brands | ||||||||||||
Household | Household pest control solutions such as spider and scorpion killers; ant and roach killers; flying insect killers; insect foggers; wasp and hornet killers; and bedbug, flea and tick control products | Hot Shot®, Black Flag®, Real-Kill®, Ultra Kill®, The Ant Trap® (TAT), and Rid-A-Bug®. | ||||||||||||
Controls | Outdoor insect and weed control solutions, and animal repellents such as aerosols, granules, and ready-to-use sprays or hose-end ready-to-sprays | Spectracide®, Garden Safe®, Liquid Fence®, and EcoLogic®. | ||||||||||||
Repellents | Personal use pesticides and insect repellent products, including aerosols, lotions, pump sprays and wipes, yard sprays and citronella candles | Cutter® and Repel®. | ||||||||||||
Cleaning | Household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers. | Rejuvenate® |
2023 | ||||||||||||||||||||
First Quarter | 12 | % | ||||||||||||||||||
Second Quarter | 29 | % | ||||||||||||||||||
Third Quarter | 35 | % | ||||||||||||||||||
Fourth Quarter | 24 | % |
year ended September 30, 2023.
Product Category | Products | Brands | ||||||||||||
Home Appliances | Small kitchen appliances including toaster ovens, coffeemakers, slow cookers, air fryers, blenders, hand mixers, grills, food processors, juicers, toasters, irons, kettles, and bread makers, cookware, and cookbooks. | Black+Decker®, Russell Hobbs®, George Foreman®, PowerXL®, Emeril Legasse®, Copper Chef ®, Toastmaster®, Juiceman®, Farberware®, and Breadman® | ||||||||||||
Personal Care | Hair dryers, flat irons and straighteners, rotary and foil electric shavers, personal groomers, mustache and beard trimmers, body groomers, nose and ear trimmers, women's shavers, and haircut kits. | Remington® |
We have adopted a Compensation Clawback Policy setting forthtrademark license agreement (the "License Agreement") with Stanley Black+Decker ("SBD") pursuant to which we license the conditions under which applicable incentive compensation providedBlack + Decker® brand ("B&D") in North America, Latin America (excluding Brazil) and the Caribbean for four core categories of household appliances: beverage products, food preparation products, garment care products and cooking products. The License Agreement has a term ending June 30, 2025, including a sell-off period from April 1, 2025 to our executive officers may beJune 30, 2025 whereby the Company can continue to sell and distribute but no longer produce products subject to forfeiture, disgorgement, recoupment or diminution (“clawback”). This policy provides that our Board or our Compensation Committee shall require the clawback or adjustment of incentive-based compensation to the Company in the following circumstances:
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As required by any other applicable law, regulation or regulatory requirement.
Additionally, our Board or Compensation Committee in their discretion may require that any executive officer who has been awarded incentive-based compensation shall forfeit, disgorge, return or adjust such compensation in the following circumstances:
If the Company suffers significant financial loss, reputational damage or similar adverse impact as a result of actions taken or decisions made by the executive officer in circumstances constituting illegal or intentionally wrongful conduct or gross negligence; or
If the executive officer is awarded or is paid out under any incentive compensation plan of the Company on the basis of a material misstatement of financial calculations or information or if events coming to light after the award disclose a material misstatement which would have significantly reduced the amount of the award or payout if known at the time of the award or payout.
The awards and incentive compensation subject to clawback under this policy include vested and unvested equity awards, shares acquired upon vesting or lapse of restrictions, short- and long-term incentive bonuses and similar compensation, discretionary bonuses, any other awards or compensation under the Company’s equity plans and any other incentive compensation plan of the Company. Any clawback under this policy may, in the discretion of our Board or Compensation Committee, be effectuated through the reduction, forfeiture or cancellation of awards, the return of paid-out cash or exercised or released shares, adjustments to future incentive compensation opportunities or in such other manner as our Board and Compensation Committee determine to be appropriate, except as otherwise required by law.
In addition, under the Company’s equity plans, any equity award granted may be cancelled by our Compensation Committee in its sole discretion, except as prohibited by applicable law, if the participant, without the consent of the Company, while employed by or providing services to the Company or any affiliate or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement or otherwise engages in activity that is in conflict with or is adverse to the interests of the Company or any affiliate, including fraud or conduct contributing to any financial restatements or irregularities engaged in, as determined by our Compensation Committee in its sole discretion. Our Compensation Committee may also provide in any award agreement that the participant will forfeit any gain realized on the vesting or exercise of such award and must repay the gain to the Company, in each case except as prohibited by applicable law, if (i) the participant engages in any activity referred to in the preceding sentence or (ii) the amount of any such gain is in excess of what the participant should have received underLicense Agreement. Under the terms of the awardLicense Agreement, we agree to pay SBD royalties based on a percentage of sales, with minimum annual royalty payments of $15.0 million, with the exception that the minimum annual royalty will no longer be applied effective January 1, 2024 through the expiration of the License Agreement. The License Agreement also requires us to comply with maximum annual return rates for any reason (including without limitation by reasonproducts. Subsequent to the completion of the License Agreement, there are no continuing obligations or restrictions on the business activities of either party. See Note 6 – Revenue Recognition included in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further detail on revenue concentration from B&D branded products.
2023 | ||||||||||||||||||||
First Quarter | 27 | % | ||||||||||||||||||
Second Quarter | 23 | % | ||||||||||||||||||
Third Quarter | 23 | % | ||||||||||||||||||
Fourth Quarter | 27 | % |
Risk OversightHHI divestiture.
The Company’s risk assessment and management function is
The Company has implemented an annual formalized risk assessment process. In accordance with this process, a governance risk and compliance committee of certain members of senior management has the responsibility to identify, assess and oversee the management of risk for the Company. This committee obtains input from other members of management and subject matter experts as needed. Management uses the collective input received to measure the potential likelihood and impact of key risks and to determine the adequacy of the Company’s risk management strategy. Periodically, representatives of this committee report to our Audit Committee on its activities and the Company’s risk exposure.
18
In addition, the Company maintains an information security program that supports the security, confidentiality, integrity and availabilityleadership of our information technology systems. In connection with such program, the Board is briefed by management on information security matters and employees receive information security awareness training.skilled EHS team. In the past threelast several years, we have not experienced anthe team has added dedicated EHS professionals to individual sites to train employees and ensure compliance with applicable safety standards and regulations. The team hosts regular meetings to share information security breach and we maintain an appropriate information security risk insurance policy.
discuss best practices across plants.
We are
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We continueeffective action to focus on communications that feature diverse voices across our company and provide information on topics important to our employee population, such as mental health, different holiday celebrations, gender pronouns and female leadership.
The physical, emotional and financial well-being of our employees is paramount and is especially important given the unique challenges our communities have faced the last few years. We will continue our DEI efforts to make progress on enhancing our work environment to attract and retain diverse talent that can help us achieve our business goals and better serve our customers and consumers.
We have promoted our efforts to enhance our existing environmental sustainability programs. We have invested substantial internal resources and engaged experienced and reputable outside advisors to assist us through this process and evaluate environmental sustainability trends, issues and concerns that could affect the Company’s ongoing ESG and sustainability efforts. Consistent with our Company-wide mission statement “To Make Living Better at Home,” we identified our environmental sustainability vision statement to be “Committing to a process of continuous improvement for the benefit of our consumers, customers, employees, investors and the planet by integrating ESG into everything we do.”
Our Board has adopted, among other things, (i) an Environmental Policy, which sets forth our commitment toprotect the health and safety of our global employees. The Company implemented a number of robust COVID-19 safety practices, including, by way of example:
Related-Person Transactions Policy
Our Board has adopted a written policy for the review, approval and ratification of transactions that involve related persons and potential conflicts of interest. See “Certain Relationships and Related Transactions” for discussion of this policy and disclosureconfidentiality of our related-person transactions.
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Transferproprietary information, or may fail to perform at all. Additionally, any disruption, such as a government shutdown, war, natural disaster or global pandemic, could affect the ability of our third-party service providers to meet their contractual obligations to us. Failure of these third parties to meet their contractual, regulatory, confidentiality or other obligations to us could result in material financial loss, higher costs, regulatory actions, and reputational harm.
Our Company has substantial deferred tax assetsbusiness could be negatively impacted by reduced demand for our products related to net operating lossesone or more significant local, regional or global economic disruptions, the risk of which are aggravated by the COVID-19 pandemic, such as: a slow-down in the general economy; reduced market growth rates; increased inflation rates; tighter credit markets for our suppliers, vendors or customers; a significant shift in government policies; the deterioration of economic relations between countries or regions, including potential negative consumer sentiment toward non-local products or sources; or the inability to conduct day-to-day transactions through our financial intermediaries to pay funds to, or collect funds from, our customers, vendors and tax credits (together, “Tax Attributes”) for U.S. federalsuppliers. Additionally, economic conditions may cause our suppliers, distributors, contractors or other third-party partners to suffer financial difficulties that they cannot overcome, resulting in their inability to provide us with the materials and stateservices we need, in which case our business and results of operations could be adversely affected. Customers may also suffer financial hardships due to economic conditions such that their accounts become uncollectible or are subject to longer collection cycles. In addition, if we are unable to generate sufficient income tax purposes. These Tax Attributes are an important asset ofand cash flow, it could affect the Company because we expect to use these Tax Attributes to offset future taxable income. The Company’s ability to utilizeachieve expected share repurchase and dividend payments.
Accordingly, For additional information see the discussion over the Company’s labor force subject to collective bargaining agreements under the caption
Governance Documents Availability
We have posted our Corporate Governance Guidelines, Code of Business Conduct and Ethics for directors, officers and employees, Code of Ethics for the Principal Executive and Senior Financial Officers, Director Resignation Policy, Board Diversity Policy, Global ESG Governance Policy, Global Energy and Greenhouse Gas Policy, Human Rights Policy, Environmental Policy, Charter, By-laws, Audit Committee Charter, Compensation Committee Charter and NCG Committee Charter on our website www.spectrumbrands.com under “Investor Relations—Corporate Governance Documents.” We intend to disclose any amendments to, and, if applicable, any waivers of, these governance documents on that section of our website. These governance documents are also available in print without charge to any stockholder of record that makes a written request to the Company. Inquiries must be directed to the Investor Relations Department at Spectrum Brands Holdings, Inc., 3001 Deming Way, Middleton, WI 53562.
Director Compensation
Our Compensation Committee is responsible for approving, subject to review by our Board as a whole, compensation programs for our non-employee directors. In that function, our Compensation Committee considers market and peer company data regarding director compensation and annually evaluates the Company’s director compensation practices in light of that data and the characteristicscontrol of the Company as a whole, with the assistanceor to replace members of its independent compensation advisors. Our director compensation program for each non-employee directorboard of directors.
Director Compensation Table for Fiscal 2022
Under our director compensation program, during each fiscal year, each non-employee director receives an annual grant of RSUs equal to thatsubstantial number of shares for the same price at which stockholders could sell a smaller number of shares. We cannot predict the effect, if any, that future sales of the Company’s common stock with a valuein the market, or the availability of shares of its common stock for sale in the market, will have on the datemarket price of grantthe Company’s common stock. We can give no assurance that sales of $125,000. Additionally, each director is eligiblesubstantial amounts of the Company’s common stock in the market, or the potential for large amounts of sales in the market, would not cause the price of the Company’s common stock to receive an annual cash retainerdecline or impair the Company’s future ability to raise capital through sales of $105,000 which is paid quarterly. The Lead Independent Director (Mr. Polistina) receives an additional annual cash retainerits common stock. Furthermore, because of $40,000the limited market and an additional annual equity retainer amountgenerally low volume of $20,000. Directors are permittedtrading in the Company’s common stock that could occur, the share price of its common stock could be more likely to make an annual election to receive all of their director compensation (including for service on committeesbe affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the market's perception of our Board)business, and announcements made by the Company, its competitors or parties with whom the Company has business relationships. The lack of liquidity in the formCompany’s common stock may also make it difficult for us to issue additional securities for financing or other purposes, or to otherwise arrange for any financing we may need in the future. In addition, we may experience other adverse effects, including, without limitation, the loss of Companyconfidence in us by current and prospective suppliers, customers, employees and others with whom we have or may seek to initiate business relationships.
Committee | Chair Annual Retainer | Member Annual Retainer | ||||||
Audit | $ | 20,000 | N/A | |||||
Compensation | $ | 15,000 | N/A | |||||
NCG | $ | 15,000 | N/A |
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The table set forth below, together withTable of Contents
Name(1) | Fees Earned or Paid in Cash(2) | Stock Awards(3)(4) | All Other Compensation(5) | Total | ||||||||||||
Leslie L. Campbell | $ | 73,500 | $ | 148,231 | $ | 644 | $ | 222,375 | ||||||||
Joan Chow | $ | 105,000 | $ | 118,352 | $ | 533 | $ | 223,885 | ||||||||
Sherianne James | $ | 0 | $ | 232,048 | $ | 4,741 | $ | 236,789 | ||||||||
Gautam Patel | $ | 0 | $ | 236,801 | $ | 4,452 | $ | 241,253 | ||||||||
Terry L. Polistina | $ | 160,000 | $ | 137,366 | $ | 2,806 | $ | 300,172 | ||||||||
Hugh R. Rovit | $ | 0 | $ | 217,884 | $ | 4,452 | $ | 222,336 |
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Compensation Committee Interlocks and Insider Participation
The current members of our Compensation Committee are Terry L. Polistina (Chair), Sherianne James and Gautam Patel. During Fiscal 2022, nonecommon stock, or options or restricted stock units exercisable for shares of common stock. On July 28, 2020, the Company's shareholders approved the Spectrum Brands Holdings, Inc. 2020 Omnibus Equity Plan (the "2020 Equity Plan") pursuant to which 2.6 million shares of common stock were authorized to be issued. As of September 30, 2023, we have issued 0.5 million stock units (or the equivalent number of shares of common stock upon lapsing of the membersapplicable restrictions under the 2020 Equipment Plan and have a remaining authorization to issue up to a total of 2.1 million shares of our Compensation Committee were an officercommon stock or employeeoptions or restricted stock units exercisable for shares of common stock.
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (the “CD&A”) section summarizes our general philosophy with respect to the compensation of our CEO, CFO and our three most highly paid executive officers in Fiscal 2022 (collectively, our “named executive officers” or “NEOs”). This CD&A provides an overview and analysis of the compensation programs and policies for our NEOs, the material compensation decisions made by our Compensation Committee under such programs and policies and the material factors considered by the Compensation Committee in making those decisions. The discussion below is intended to help you understand the detailed information provided in our executive compensation tables and put that information into context within our overall compensation philosophy.
Fiscal 2022 Named Executive Officers
Our NEOs for Fiscal 2022 are identified in the table below.
Owned / Leased | ||||||||||||||
Leased | ||||||||||||||
Leased | ||||||||||||||
Owned | ||||||||||||||
Bridgeton, Missouri | GPC - Manufacturing | Leased | ||||||||||||
Earth City, Missouri | GPC Headquarters, H&G Headquarters and | Leased | ||||||||||||
Edwardsville, Illinois | GPC - Distribution | Leased | ||||||||||||
Edwardsville, Illinois | H&G - Distribution | Leased | ||||||||||||
Fairfield, New Jersey | HPC - Commercial Operations | Leased | ||||||||||||
Meriden, Connecticut | HPC - Distribution | Leased | ||||||||||||
Middleton, Wisconsin | Corporate Headquarters, HPC Headquarters and NA Shared Operations | Leased | ||||||||||||
Miramar, Florida | HPC -Commercial Operations | Leased | ||||||||||||
Mooresville, North Carolina | H&G - Commercial Operations | Leased | ||||||||||||
Moorpark, California | GPC - Commercial Operations | Leased | ||||||||||||
New Britain, Connecticut | HPC - Distribution | Leased | ||||||||||||
Noblesville, Indiana | GPC - Manufacturing | Owned | ||||||||||||
Redlands, California | HPC - Distribution | Leased | ||||||||||||
Reno, Nevada | HPC - Distribution | Leased | ||||||||||||
Riverview, Florida | GPC - Research & Development | Owned | ||||||||||||
St. Louis, Missouri | H&G - Manufacturing | Leased |
In
Location | Function / Use | Owned / Leased | ||||||||||||
Non-U.S. Locations | ||||||||||||||
Ballymount, Ireland | HPC - Commercial Operations | Leased | ||||||||||||
Barcelona, Spain | HPC - Commercial Operations | Leased | ||||||||||||
Bogota, Colombia | Shared - Commercial Operations | Leased | ||||||||||||
Borgholzhausen, Germany | GPC - Distribution | Leased | ||||||||||||
Bucharest, Romania | HPC - Commercial Operations | Leased | ||||||||||||
Buenos Aires, Argentina | HPC - Commercial Operations | Leased | ||||||||||||
Coevorden, Netherlands | GPC - Distribution | Leased | ||||||||||||
El Dorado, Panama | HPC - Commercial Operations | Leased | ||||||||||||
Guatemala, Guatemala | HPC - Commercial Operations | Leased | ||||||||||||
Istanbul, Turkey | HPC - Commercial Operations | Leased | ||||||||||||
Manchester, UK | Shared - UK Operations | Owned | ||||||||||||
Melle, Germany | GPC - Manufacturing | Owned | ||||||||||||
Mentone, Australia | HPC - Operations & Distribution | Leased | ||||||||||||
Mexico City, Mexico | Shared - Commercial Operations | Leased | ||||||||||||
Milan, Italy | Shared - Commercial Operations | Leased | ||||||||||||
Nuremberg, Germany | HPC - Distribution | Leased | ||||||||||||
Penrose, New Zealand | HPC - Commercial Operations | Leased | ||||||||||||
San Jose, Costa Rica | HPC - Commercial Operations | Leased | ||||||||||||
San Salvador, El Salvador | HPC - Commercial Operations | Leased | ||||||||||||
Santa Domingo, Dominican Republic | HPC - Commercial Operations | Leased | ||||||||||||
Shanghai, China | HPC - Commercial Operations | Leased | ||||||||||||
Shenzhen, China | APAC Shared Operations & Distribution | Leased | ||||||||||||
Singapore, Singapore | Shared Commercial Operations | Leased | ||||||||||||
Sofia, Bulgaria | HPC - Commercial Operations | Leased | ||||||||||||
Stockholm, Sweden | HPC - Commercial Operations | Leased | ||||||||||||
Sulzbach, Germany | EMEA Shared Operations | Leased | ||||||||||||
Tegucigalpa, Honduras | HPC - Commercial Operations | Leased | ||||||||||||
Utrecht, Netherlands | HPC - Commercial Operations | Leased | ||||||||||||
Vantaa, Finland | HPC - Commercial Operations | Leased | ||||||||||||
Warsaw, Poland | Shared - Commercial Operations | Leased | ||||||||||||
Wombourne, UK | HPC - Distribution | Leased | ||||||||||||
Xiamen, China | Shared - Commercial Operations | Leased | ||||||||||||
Yokohama, Japan | GPC Commercial Operations | Leased |
Highlights/Executive Summary
Our executive compensation program is designed to link pay for performance, encourage prudent decision-making and create a balanced focus on short-term and long-term performance and value creation. Our executive compensation is heavily weighted toward variable compensation, as described in more detail below, which is central to our philosophy that a significant portion of compensation align with the achievement of performance goals. The three primary components of our executive compensation are base salary, our Management Incentive Program (“MIP”) and our equity based, long-term incentive program (“LTIP”). Our MIP and LTIP include goals tied directly to the performance of the Company.
During Fiscal 2022:
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We continued to focus on long-term strategy and growthworld in support of our business. We believe that our existing facilities are suitable and adequate for our present purposes and that the productive capacity in such facilities is substantially being utilized or we have plans to utilize it.
(number of shares, in millions) | Authorized | Available | ||||||||||||
Spectrum Brands Holdings, Inc. 2011 Omnibus Equity Awards Plan | 7.1 | 0.2 | ||||||||||||
Spectrum Brands Holdings, Inc. 2020 Omnibus Equity Plan | 2.6 | 2.1 |
Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Plan | Approximate Dollar Value of Shares that may Yet Be Purchased | |||||||||||||||||||||||
July 3, 2023 to July 30, 2023 | — | $ | — | — | $ | 500,000,000 | ||||||||||||||||||||
July 31, 2023 to August 27, 2023 | 34,107 | 82.81 | 34,107 | 497,175,050 | ||||||||||||||||||||||
August 28, 2023 to September 30, 2023 | 391,287 | 81.50 | 391,287 | 465,286,924 | ||||||||||||||||||||||
As of September 30, 2023 | 5,768,702 | 5,768,702 | $ | 465,286,924 |
(in millions) | 2023 | 2022 | ||||||||||||||||||
Tristar Business acquisition and integration | $ | 11.5 | $ | 24.3 | ||||||||||||||||
HHI divestiture and separation | 8.4 | 6.3 | ||||||||||||||||||
HPC separation initiatives | 4.2 | 19.1 | ||||||||||||||||||
Coevorden operations separation | 2.7 | 8.8 | ||||||||||||||||||
Rejuvenate acquisition and integration | — | 6.8 | ||||||||||||||||||
Armitage acquisition and integration | — | 1.4 | ||||||||||||||||||
Omega integration | — | 4.6 | ||||||||||||||||||
Other project costs | 0.7 | 1.0 | ||||||||||||||||||
Total | $ | 27.5 | $ | 72.3 | ||||||||||||||||
Reported as: | ||||||||||||||||||||
Net sales | $ | — | $ | 0.7 | ||||||||||||||||
Cost of goods sold | 2.7 | 9.4 | ||||||||||||||||||
General & administrative expense | 24.8 | 57.9 | ||||||||||||||||||
Other non-operating expense, net | — | 4.3 |
(in millions) | 2023 | 2022 | ||||||||||||||||||
Fiscal 2023 restructuring | $ | 7.4 | $ | — | ||||||||||||||||
Fiscal 2022 restructuring | 0.4 | 9.8 | ||||||||||||||||||
Global ERP transformation | 11.4 | 13.1 | ||||||||||||||||||
Russia closing initiative | 3.2 | 1.9 | ||||||||||||||||||
HPC brand portfolio transitions | 2.5 | 1.3 | ||||||||||||||||||
GPC distribution center transition | — | 35.8 | ||||||||||||||||||
Global productivity improvement program | — | 5.1 | ||||||||||||||||||
Other project costs | 10.5 | 11.1 | ||||||||||||||||||
Total | $ | 35.4 | $ | 78.1 | ||||||||||||||||
Reported as: | ||||||||||||||||||||
Net sales | $ | — | $ | 5.0 | ||||||||||||||||
Cost of goods sold | 1.0 | 1.0 | ||||||||||||||||||
Selling expense | — | 31.3 | ||||||||||||||||||
General & administrative expense | 34.4 | 40.8 |
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Despite these significant headwinds, as a result of our proactive measures, we were able to achieve record net sales of $3,133 million, including record net sales by our Global Pet Care (“GPC”) and Home & Personal Care (“HPC”) businesses of $1,175 million and $1,370 million, respectively.
At the end of the 2022 fiscal year,HHI divestiture, the Company had a cash balance of $243.7 million and $342.4 million available on our cash flow revolver.
Proforma net leverage at the end of the 2022 fiscal year was 5.4 times. In order to ensure flexibility in our operations until the closing of the sale of HHI, we proactively entered into anthe fourth amendment to our credit agreementthe Credit Agreement to temporarily increase ourthe maximum consolidated total net leverage ratio permitted from 6.0 to 1.0 to be no greater than 7.0 to 1.0 untilbefore returning to 6.0 to 1.0 at the earliest of (i) September 29, 2023, or (ii) 10 business days after the closing of the HHI divestiture or the receipt of the related termination fee.
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We continued our transformational changes Following the close of the HHI divestiture, the maximum consolidated total net leverage ratio was reverted to 6.0 to 1.0. The Company incurred $2.3 million in corporate governance practices,connection with the fourth amendment, which has been recognized as demonstrated through increased Board diversity representationinterest expense for the year ended September 30, 2023.
Management and Board Member Composition
We are very proud of our management team, which includes a top notch, talented and stable leadership team to deliver financial performance and execute our growth strategy.
Our Board believes thatthe Tristar Business in February 2022, the Company and its stakeholders are benefitedHPC segment have been detrimentally impacted by a highly skilled boardaspects of the acquired business’ operations and products, which have negatively impacted subsequent operating performance and partner relationships of the acquired brands and segment. Since the acquisition, the acquired business realized, among other things, significant distribution challenges, increased levels of retail inventory, reduced sales, increased promotional spending and deductions, higher level of returns, and overall increased amount of costs. Additionally, the segment has subsequently realized unusual losses attributable to the recognition of product recalls for products associated with a significant varietythe brands, increased risks over the realizability of expertisereceivables and experiencesinventory, and diversity across race, genderrecognized an impairment on assets including the acquired goodwill and ethnicity. On April 12, 2021, we appointed Joan Chowtradename intangible assets. Most recently the Company disposed of certain inventory and Leslie Campbell, each an independent, highly qualifiedproducts associated with the acquired brands after assessing, among other things, performance and diverse background candidate,quality standards. As of September 30, 2023, the Company believes it has assessed appropriate risks and recognized applicable losses and reserves reflecting the net assets of the Company. The Company is pursuing avenues to our Board. These appointments were maderemediate and recover such damages and losses realized since the acquisition.
We believe that our senior management team and Board provide a skillset that aligns with our going forward operating model and business strategy and has contributed to the success we had in Fiscal 2022 and that we envision in upcoming years.
We have also advanced our aim of promoting diversity and are proud that over one-half of our board members come from diverse backgrounds, over one-quarter of our Board is composed of female members and our five NEOs for Fiscal 2022 include a woman and an executive from a diverse background.
Corporate Governance Best Practices
We are proud that our corporate governance practices are regularly updated to reflect best practices, such as appointing a lead independent director, increasing diversity among our Board and executive team, declassifying our Board (which is underway and will be fully completed by our 2024 annual stockholders meeting), appointing independent directors as a majority of the Board, having fully independent Audit, Compensation and NCG committees of the Board and having an independent compensation consultant. We have also adopted or strengthened a number of our corporate governance policies, including our Corporate Governance Guidelines, Code of Business Conduct and Ethics for directors, officers and employees, Code of Ethics for the Principal Executive and Senior Financial Officers, Director Resignation Policy, our related person transaction policy, our anti-hedging policy, our anti-pledging policy and our stock ownership policy.
We have also continued our efforts to promote our ESG initiatives by adopting a number of new policies and procedures, including adopting a new Global ESG Governance Policy and Global Energy and Greenhouse Gas Policy and further strengthening our Environmental Policy and Human Rights Policy. See “Directors, Executive Officers and Corporate Governance-Corporate Governance-Our Practices and Policies”.
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Strategy and Long-Term Growth
The focus of our strategic goals are:
Investing internally for organic growth, which generates our highest return on investment
Strengthening our brands through consumer insights, research and development, innovation and advertising and marketing to drive vitality and profitable organic growth
Returning capital to our shareholders via dividends and opportunistic share repurchases
Disciplined M&A activity as we pursue accretive strategic acquisitions that are synergistic or help drive additional value creation
While the impacts of COVID-19 pandemic and supply chain constraints such as increased labor shortages, increased freight and distribution costs from transportation and logistics, higher commodity costs, rising energy pricing, and foreign currency volatility. Together with labor shortages and higher demand for talent, the current economic environment is driving higher wages. Our ability to meet labor needs, control wage and labor-related costs and minimize labor disruptions over the past two years are creating extreme volatilitywill be key to our success of operating our business and executing our business strategies. In response to inflation, our segments have taken pricing actions to address rising costs and foreign currency fluctuations to mitigate impacts to our margins. While we have seen more stability in the year-over-yearrecent economic environment, we are unable to predict how long the current inflationary environment will continue and we expect the economic environment to remain uncertain as we navigate the current geopolitical environment, post-pandemic volatility, labor challenges, changes in supply chain and the overall current economic environment.
September 30, 2023 | Net Sales September 30, 2022 | Variance | |||||||||||||||||||||||||||||||||||||||||||||
(in millions, except %) | Net Sales | Effect of Changes in Currency | Net Sales Excluding Effect of Changes in Currency | Effect of Acquisitions | Organic Net Sales | ||||||||||||||||||||||||||||||||||||||||||
GPC | $ | 1,139.0 | $ | 14.1 | $ | 1,153.1 | $ | — | $ | 1,153.1 | $ | 1,175.3 | $ | (22.2) | (1.9 | %) | |||||||||||||||||||||||||||||||
H&G | 536.5 | — | 536.5 | — | 536.5 | 587.1 | (50.6) | (8.6 | %) | ||||||||||||||||||||||||||||||||||||||
HPC | 1,243.3 | 36.9 | 1,280.2 | (89.9) | 1,190.3 | 1,370.1 | (179.8) | (13.1 | %) | ||||||||||||||||||||||||||||||||||||||
Total | $ | 2,918.8 | $ | 51.0 | $ | 2,969.8 | $ | (89.9) | $ | 2,879.9 | $ | 3,132.5 | (252.6) | (8.1 | %) |
(in millions) | GPC | H&G | HPC | Corporate | Consolidated | |||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 134.0 | $ | (5.0) | $ | (215.8) | $ | (146.9) | $ | (233.7) | ||||||||||||||||||||||
Income tax benefit | — | — | — | (56.5) | (56.5) | |||||||||||||||||||||||||||
Interest expense | — | — | — | 127.0 | 127.0 | |||||||||||||||||||||||||||
Depreciation | 15.2 | 7.3 | 11.8 | 14.6 | 48.9 | |||||||||||||||||||||||||||
Amortization | 22.2 | 11.5 | 8.6 | — | 42.3 | |||||||||||||||||||||||||||
EBITDA | 171.4 | 13.8 | (195.4) | (61.8) | (72.0) | |||||||||||||||||||||||||||
Share based compensation | — | — | — | 17.2 | 17.2 | |||||||||||||||||||||||||||
Tristar Business integration | — | — | 11.5 | — | 11.5 | |||||||||||||||||||||||||||
HHI divestiture | — | — | — | 8.4 | 8.4 | |||||||||||||||||||||||||||
HPC separation initiatives | — | — | — | 4.2 | 4.2 | |||||||||||||||||||||||||||
Coevorden operations divestiture | 2.7 | — | — | — | 2.7 | |||||||||||||||||||||||||||
Fiscal 2023 restructuring initiatives | 3.0 | — | 4.4 | — | 7.4 | |||||||||||||||||||||||||||
Fiscal 2022 restructuring initiatives | (0.3) | 0.2 | — | 0.5 | 0.4 | |||||||||||||||||||||||||||
Global ERP transformation | — | — | — | 11.4 | 11.4 | |||||||||||||||||||||||||||
Russia closing initiatives | — | — | 3.2 | — | 3.2 | |||||||||||||||||||||||||||
HPC brand portfolio transitions | — | — | 2.5 | — | 2.5 | |||||||||||||||||||||||||||
Other project costs | 1.3 | 2.5 | 2.3 | 5.1 | 11.2 | |||||||||||||||||||||||||||
Impairment of equipment and operating lease assets | 9.0 | 0.1 | 1.7 | — | 10.8 | |||||||||||||||||||||||||||
Impairment of goodwill | — | — | 111.1 | — | 111.1 | |||||||||||||||||||||||||||
Impairment of intangible assets | — | 56.0 | 64.7 | — | 120.7 | |||||||||||||||||||||||||||
Unallocated shared costs | — | — | — | 18.0 | 18.0 | |||||||||||||||||||||||||||
Non-cash purchase accounting adjustments | — | — | 1.9 | — | 1.9 | |||||||||||||||||||||||||||
Gain from remeasurement of contingent consideration liability | — | — | (1.5) | — | (1.5) | |||||||||||||||||||||||||||
Gain from debt repurchase | — | — | — | (7.9) | (7.9) | |||||||||||||||||||||||||||
Legal and environmental | — | (0.2) | 3.2 | — | 3.0 | |||||||||||||||||||||||||||
Early settlement of foreign currency cash flow hedges | — | — | 4.9 | — | 4.9 | |||||||||||||||||||||||||||
HPC product disposal | — | — | 20.6 | — | 20.6 | |||||||||||||||||||||||||||
HPC product recall | — | — | 7.7 | — | 7.7 | |||||||||||||||||||||||||||
Salus and other adjustments | 3.5 | 0.1 | 0.3 | 1.7 | 5.6 | |||||||||||||||||||||||||||
Adjusted EBITDA | $ | 190.6 | $ | 72.5 | $ | 43.1 | $ | (3.2) | $ | 303.0 | ||||||||||||||||||||||
Net sales | $ | 1,139.0 | $ | 536.5 | $ | 1,243.3 | $ | — | $ | 2,918.8 | ||||||||||||||||||||||
Adjusted EBITDA Margin | 16.7 | % | 13.5 | % | 3.5 | % | — | 10.4 | % |
(in millions) | GPC | H&G | HPC | Corporate | Consolidated | |||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 75.2 | $ | 57.2 | $ | 25.4 | $ | (234.8) | $ | (77.0) | ||||||||||||||||||||||
Income tax benefit | — | — | — | (13.3) | (13.3) | |||||||||||||||||||||||||||
Interest expense | — | — | — | 99.4 | 99.4 | |||||||||||||||||||||||||||
Depreciation | 14.8 | 7.2 | 12.4 | 14.6 | 49.0 | |||||||||||||||||||||||||||
Amortization | 22.6 | 11.4 | 16.3 | — | 50.3 | |||||||||||||||||||||||||||
EBITDA | 112.6 | 75.8 | 54.1 | (134.1) | 108.4 | |||||||||||||||||||||||||||
Share based compensation | — | — | — | 10.2 | 10.2 | |||||||||||||||||||||||||||
Tristar Business acquisition and integration | — | — | 24.3 | — | 24.3 | |||||||||||||||||||||||||||
Rejuvenate integration | — | 6.8 | — | — | 6.8 | |||||||||||||||||||||||||||
Armitage integration | 1.4 | — | — | — | 1.4 | |||||||||||||||||||||||||||
Omega production integration | 4.6 | — | — | — | 4.6 | |||||||||||||||||||||||||||
HHI divestiture | — | — | — | 6.3 | 6.3 | |||||||||||||||||||||||||||
HPC separation initiatives | — | — | — | 19.1 | 19.1 | |||||||||||||||||||||||||||
Coevorden operations divestiture | 8.8 | — | — | — | 8.8 | |||||||||||||||||||||||||||
Fiscal 2022 restructuring initiatives | 3.6 | 0.7 | 4.9 | 0.6 | 9.8 | |||||||||||||||||||||||||||
Global ERP transformation | — | — | — | 13.1 | 13.1 | |||||||||||||||||||||||||||
GPC distribution center transition | 35.8 | — | — | — | 35.8 | |||||||||||||||||||||||||||
Global productivity improvement program | 0.8 | — | 2.4 | 1.9 | 5.1 | |||||||||||||||||||||||||||
Russia closing initiatives | — | — | 1.9 | — | 1.9 | |||||||||||||||||||||||||||
HPC brand portfolio transitions | — | — | 1.3 | — | 1.3 | |||||||||||||||||||||||||||
Other project costs | 0.1 | — | 0.5 | 11.5 | 12.1 | |||||||||||||||||||||||||||
Legal and environmental | — | 1.5 | — | — | 1.5 | |||||||||||||||||||||||||||
Gain from remeasurement of contingent consideration liability | — | — | (28.5) | — | (28.5) | |||||||||||||||||||||||||||
Unallocated shared costs | — | — | — | 27.6 | 27.6 | |||||||||||||||||||||||||||
Early settlement of foreign currency cash flow hedges | — | — | (5.1) | — | (5.1) | |||||||||||||||||||||||||||
HPC product recall | — | — | 5.5 | — | 5.5 | |||||||||||||||||||||||||||
Non-cash purchase accounting adjustments | — | — | 8.3 | — | 8.3 | |||||||||||||||||||||||||||
Salus and other adjustments | 0.9 | 1.4 | — | 2.5 | 4.8 | |||||||||||||||||||||||||||
Adjusted EBITDA | $ | 168.6 | $ | 86.2 | $ | 69.6 | $ | (41.3) | $ | 283.1 | ||||||||||||||||||||||
Net sales | $ | 1,175.3 | $ | 587.1 | $ | 1,370.1 | $ | — | $ | 3,132.5 | ||||||||||||||||||||||
Adjusted EBITDA Margin | 14.3 | % | 14.7 | % | 5.1 | % | 9.0 | % |
(in millions) | GPC | H&G | HPC | Corporate | Consolidated | |||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 134.0 | $ | (5.0) | $ | (215.8) | $ | (139.5) | $ | (226.3) | ||||||||||||||||||||||
Income tax benefit | — | — | — | (55.1) | (55.1) | |||||||||||||||||||||||||||
Interest expense | — | — | — | 120.5 | 120.5 | |||||||||||||||||||||||||||
Depreciation | 15.2 | 7.3 | 11.8 | 14.6 | 48.9 | |||||||||||||||||||||||||||
Amortization | 22.2 | 11.5 | 8.6 | — | 42.3 | |||||||||||||||||||||||||||
EBITDA | 171.4 | 13.8 | (195.4) | (59.5) | (69.7) | |||||||||||||||||||||||||||
Share based compensation | — | — | — | 15.7 | 15.7 | |||||||||||||||||||||||||||
Tristar Business integration | — | — | 11.5 | — | 11.5 | |||||||||||||||||||||||||||
HHI divestiture | — | — | — | 8.4 | 8.4 | |||||||||||||||||||||||||||
HPC separation initiatives | — | — | — | 4.2 | 4.2 | |||||||||||||||||||||||||||
Coevorden operations divestiture | 2.7 | — | — | — | 2.7 | |||||||||||||||||||||||||||
Fiscal 2023 restructuring initiatives | 3.0 | — | 4.4 | — | 7.4 | |||||||||||||||||||||||||||
Fiscal 2022 restructuring initiatives | (0.3) | 0.2 | — | 0.5 | 0.4 | |||||||||||||||||||||||||||
Global ERP transformation | — | — | — | 11.4 | 11.4 | |||||||||||||||||||||||||||
Russia closing initiatives | — | — | 3.2 | — | 3.2 | |||||||||||||||||||||||||||
HPC brand portfolio transitions | — | — | 2.5 | — | 2.5 | |||||||||||||||||||||||||||
Other project costs | 1.3 | 2.5 | 2.3 | 5.1 | 11.2 | |||||||||||||||||||||||||||
Impairment of equipment and operating lease assets | 9.0 | 0.1 | 1.7 | — | 10.8 | |||||||||||||||||||||||||||
Impairment of goodwill | — | — | 111.1 | — | 111.1 | |||||||||||||||||||||||||||
Impairment of intangible assets | — | 56.0 | 64.7 | — | 120.7 | |||||||||||||||||||||||||||
Unallocated shared costs | — | — | — | 18.0 | 18.0 | |||||||||||||||||||||||||||
Non-cash purchase accounting adjustments | — | — | 1.9 | — | 1.9 | |||||||||||||||||||||||||||
Gain from remeasurement of contingent consideration liability | — | — | (1.5) | — | (1.5) | |||||||||||||||||||||||||||
Gain from debt repurchase | — | — | — | (7.9) | (7.9) | |||||||||||||||||||||||||||
Legal and environmental | — | (0.2) | 3.2 | — | 3.0 | |||||||||||||||||||||||||||
Early settlement of foreign currency cash flow hedges | — | — | 4.9 | — | 4.9 | |||||||||||||||||||||||||||
HPC product disposal | — | — | 20.6 | — | 20.6 | |||||||||||||||||||||||||||
HPC product recall | — | — | 7.7 | — | 7.7 | |||||||||||||||||||||||||||
Other adjustments | 3.5 | 0.1 | 0.3 | 1.5 | 5.4 | |||||||||||||||||||||||||||
Adjusted EBITDA | $ | 190.6 | $ | 72.5 | $ | 43.1 | $ | (2.6) | $ | 303.6 | ||||||||||||||||||||||
Net sales | $ | 1,139.0 | $ | 536.5 | $ | 1,243.3 | $ | — | $ | 2,918.8 | ||||||||||||||||||||||
Adjusted EBITDA Margin | 16.7 | % | 13.5 | % | 3.5 | % | — | 10.4 | % |
(in millions) | GPC | H&G | HPC | Corporate | Consolidated | ||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 75.2 | $ | 57.2 | $ | 25.4 | $ | (232.8) | $ | (75.0) | |||||||||||||||||||
Income tax benefit | — | — | — | (12.9) | (12.9) | ||||||||||||||||||||||||
Interest expense | — | — | — | 99.8 | 99.8 | ||||||||||||||||||||||||
Depreciation | 14.8 | 7.2 | 12.4 | 14.6 | 49.0 | ||||||||||||||||||||||||
Amortization | 22.6 | 11.4 | 16.3 | — | 50.3 | ||||||||||||||||||||||||
EBITDA | 112.6 | 75.8 | 54.1 | (131.3) | 111.2 | ||||||||||||||||||||||||
Share based compensation | — | — | — | 9.1 | 9.1 | ||||||||||||||||||||||||
Tristar Business acquisition and integration | — | — | 24.3 | — | 24.3 | ||||||||||||||||||||||||
Rejuvenate integration | — | 6.8 | — | — | 6.8 | ||||||||||||||||||||||||
Armitage integration | 1.4 | — | — | — | 1.4 | ||||||||||||||||||||||||
Omega production integration | 4.6 | — | — | — | 4.6 | ||||||||||||||||||||||||
HHI divestiture | — | — | — | 6.3 | 6.3 | ||||||||||||||||||||||||
HPC separation initiatives | — | — | — | 19.1 | 19.1 | ||||||||||||||||||||||||
Coevorden operations divestiture | 8.8 | — | — | — | 8.8 | ||||||||||||||||||||||||
Fiscal 2022 restructuring initiatives | 3.6 | 0.7 | 4.9 | 0.6 | 9.8 | ||||||||||||||||||||||||
Global ERP transformation | — | — | — | 13.1 | 13.1 | ||||||||||||||||||||||||
GPC distribution center transition | 35.8 | — | — | — | 35.8 | ||||||||||||||||||||||||
Global productivity improvement program | 0.8 | — | 2.4 | 1.9 | 5.1 | ||||||||||||||||||||||||
Other project costs | 0.1 | — | 0.5 | 11.5 | 12.1 | ||||||||||||||||||||||||
Unallocated shared costs | — | — | — | 27.6 | 27.6 | ||||||||||||||||||||||||
Gain from remeasurement of contingent consideration liability | — | — | (28.5) | — | (28.5) | ||||||||||||||||||||||||
Russia closing initiatives | — | — | 1.9 | — | 1.9 | ||||||||||||||||||||||||
Early settlement of foreign currency cash flow hedges | — | — | (5.1) | — | (5.1) | ||||||||||||||||||||||||
HPC brand portfolio transitions | — | — | 1.3 | — | 1.3 | ||||||||||||||||||||||||
Non-cash purchase accounting adjustments | — | — | 8.3 | — | 8.3 | ||||||||||||||||||||||||
Legal and environmental | — | 1.5 | — | — | 1.5 | ||||||||||||||||||||||||
HPC product recall | — | — | 5.5 | — | 5.5 | ||||||||||||||||||||||||
Other adjustments | 0.9 | 1.4 | — | 2.2 | 4.5 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 168.6 | $ | 86.2 | $ | 69.6 | $ | (39.9) | $ | 284.5 | |||||||||||||||||||
Net sales | $ | 1,175.3 | $ | 587.1 | $ | 1,370.1 | $ | — | $ | 3,132.5 | |||||||||||||||||||
Adjusted EBITDA Margin | 14.3 | % | 14.7 | % | 5.1 | % | — | 9.1 | % |
Item 7,
Our Fiscal
(in millions, except %) | 2023 | 2022 | Variance | ||||||||||||||||||||
Net sales | $ | 2,918.8 | $ | 3,132.5 | $ | (213.7) | (6.8 | %) | |||||||||||||||
Gross profit | 924.3 | 990.4 | (66.1) | (6.7 | %) | ||||||||||||||||||
Gross profit margin | 31.7 | % | 31.6 | % | 10 | bps | |||||||||||||||||
Operating expenses | $ | 1,129.9 | $ | 967.2 | $ | 162.7 | 16.8 | % | |||||||||||||||
Interest expense | 127.0 | 99.4 | 27.6 | 27.8 | % | ||||||||||||||||||
Interest income | (38.3) | (0.6) | (37.7) | n/m | |||||||||||||||||||
Gain on debt repurchase | (7.9) | — | (7.9) | n/m | |||||||||||||||||||
Other non-operating expense, net | 3.8 | 14.7 | (10.9) | (74.1) | % | ||||||||||||||||||
Income tax benefit | (56.5) | (13.3) | (43.2) | 324.8 | % | ||||||||||||||||||
Net loss from continuing operations | (233.7) | (77.0) | (156.7) | 203.5 | % | ||||||||||||||||||
Income from discontinued operations, net of tax | 2,035.6 | 149.7 | 1,885.9 | n/m | |||||||||||||||||||
Net income | 1,801.9 | 72.7 | 1,729.2 | n/m | |||||||||||||||||||
n/m = not meaningful |
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(in millions, except %) | 2023 | 2022 | Variance | |||||||||||||||||||||||||||||||||||||||||
GPC | $ | 1,139.0 | $ | 1,175.3 | $ | (36.3) | (3.1 | %) | ||||||||||||||||||||||||||||||||||||
H&G | 536.5 | 587.1 | (50.6) | (8.6 | %) | |||||||||||||||||||||||||||||||||||||||
HPC | 1,243.3 | 1,370.1 | (126.8) | (9.3 | %) | |||||||||||||||||||||||||||||||||||||||
Net Sales | $ | 2,918.8 | $ | 3,132.5 | (213.7) | (6.8 | %) |
Our Compensation Governance Best Practices
We have adopted significant policies with respect to our executive compensation programs, which help to further align our executives’ interests with those of our shareholders.
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Shareholder Engagement
Our Board takes its management oversight responsibilities seriously. Our key values are predicated on strong and effective governance, independent thought and decision-making and a commitment to driving shareholder value. We received support from our shareholders with a vote of approximately 82% in favor of our executive compensation at our 2022 Annual Meeting. As discussed below, we highly value the input of our shareholders and took this into account as we designed our programs.
What we learn through our ongoing engagements is regularly shared with our Board and incorporated into our disclosures, plans and practices, as deemed appropriate.
Moreover, we are committed to robust shareholder engagement, which is an embedded part of our investor relations and governance programs. We maintain a consistent and proactive approach to communicating with our shareholders, including our quarterly earnings calls, holding non-deal road shows and participating in both equity and debt conferences on a regular basis. Conversations throughout the year led by our executive management team are supplemented by an annual outreach dedicated to corporate governance, executive compensation and corporate responsibility topics. In addition, each year during proxy season we take the following actions:
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We engage in discussions with a major proxy advisory firm as necessary to understand its perspective on our compensation programs and best practices generally in executive compensation programs.
We reach out to our top shareholders to discuss and engage in dialogue with our shareholders with respect to our Company, including our corporate governance and compensation practices.
We continue to engage in rigorous shareholder outreach and do so to understand shareholder views and input on a variety of matters.
Compensation Overview and Philosophy
Our compensation programs are administered by our Compensation Committee. In Fiscal 2022, these programs were based on our “pay-for-performance” philosophy in which variable compensation represents a majority of an executive’s potential compensation. The variable incentive compensation programs continued our focus on the Company-wide goals of increasing growth and earnings, maximizing free cash flow generation and building for superior long-term shareholder returns. Each year, the Compensation Committee and the Company, along with the assistance of an independent compensation consultant, go through a thoughtful process to review risks and opportunities applicable to the Company.
In establishing our compensation programs for Fiscal 2022, our Compensation Committee continued to partner with WTW as independent compensation consultant and evaluated the compensation programs with reference to a peer group of 14 companies, as outlined in the section below, “Role of Committee-Retained Consultants.”
Background on Compensation Considerations
Our Compensation Committee pursued several objectives in determining our executive compensation programs for Fiscal 2022:
To attract and retain highly qualified executives for the Company and in each of our business segments.
To align the compensation paid to our executives with our overall corporate business strategies while leaving the flexibility necessary to respond to changing business priorities and circumstances.
To align the interests of our executives with those of our shareholders and to reward our executives when they perform in a manner that creates value for our shareholders.
In order to pursue these objectives, our Compensation Committee:
Considered the advice of WTW on executive compensation issues and program design, including advice on the corporate compensation program as it compared to our peer group companies.
Conducted an annual review of total compensation for each NEO, including the compensation and benefit values offered to each executive and other compensation factors.
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Consulted with our CEO and other members of senior management with regard to compensation matters and met in executive session without management to evaluate management’s input.
Solicited comments and concurrence from other Board members regarding its recommendations and actions.
Considered the feedback of our shareholders and the Say on Pay vote results.
Philosophy on Performance-Based Compensation
Our Fiscal 2022 executive compensation programs were designed so that, at target levels of performance, a significant portion of the value of each NEO’s annual compensation (which varies by individual) would be based on the achievement of Company-wide Fiscal 2022 performance objectives. In approving these programs, our Compensation Committee concluded that a combination of annual fixed base pay and incentive-based pay provided our NEOs with an appropriate mix of cash compensation and equity-based compensation.
For Fiscal 2022, the percentage of ongoing target annual compensation that was at-risk (that is, variable cash compensation and equity awards) for our CEO was 87.9% and for the other current NEOs was 78.7% as a group. The chart below sets forth the percentage of target compensation that was fixed compared to at-risk for the CEO and the other current NEOs as a group.
To highlight the alignment of the incentive plans with shareholder interests, our ongoing annual and long-term incentive programs (whether equity or cash-based) in Fiscal 2022 were predominantly performance-based with (i) our MIP being 100% performance-based and (ii) the three-year LTIP being 70% performance-based.
Our pay-for-performance philosophy is shown by the fact that no payments under the MIP were made for Fiscal 2022 performance, and that our Fiscal 2020 LTIP PSUs (which were based on three-year performance from Fiscal 2020-2022) paid out below target, each as shown below.
Only our base salaries and 30% of our three-year LTIP grants do not vary based on our NEOs’ performance. For each of our NEOs, these non-performance-based amounts are set forth in agreements with the executives as described in “—Executive Compensation Tables—Termination and Change in Control Provisions—Executive-Specific Provisions regarding Employment, Termination and Change in Control—Agreements with NEOs,” and are subject to annual review and potential increase by our Compensation Committee.
All components of our NEOs compensation are determined by our Compensation Committee considering the executive’s performance, current market conditions, the Company’s financial condition at the time such compensation levels are determined, compensation levels for similarly situated executives with other companies, experience level and the duties and responsibilities of such executive’s position.
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Our Compensation Decision Making Process
Our Compensation Committee engages in a robust process in making compensation decisions. In Fiscal 2022, our Compensation Committee retained WTW as its independent consultants to assist in formulating and evaluating executive and director compensation programs.
In addition, our Compensation Committee consulted with our CEO regarding the Company’s compensation plans and performance targets, however, our CEO did not participate in any discussions with respect to his own compensation. From time to time, our Compensation Committee also consulted with other senior executives of our Company and outside counsel.
WTW provided advice on the executive compensation implications of changes to our business (including our Global Productivity Improvement Plan, demand and supply interruptions), our corporate governance and compensation structure and the philosophy of our executive compensation plans. During Fiscal 2022, our Compensation Committee periodically requested WTW to:
Provide comparative market data for our peer group and other groups on request, with respect to compensation matters.
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Review the plan designs, including the performance metrics selected, for our various incentive plans and make recommendations to our Compensation Committee on appropriate plan designs to support the overall corporate strategic objectives.
Advise our Compensation Committee on compensation matters and management proposals with respect to compensation matters.
Assist in the preparation of our Compensation Discussion and Analysis disclosure and related matters.
On request, participate in meetings of our Compensation Committee.
In order to encourage an independent viewpoint, our Compensation Committee and its members (i) had access to WTW at any time without management present and (ii) consulted from time to time with each other, other non-management members of our Board and WTW without management present.
WTW, with input from management and our Compensation Committee, developed a peer group of companies based on a variety of criteria, including type of business, revenue, assets and market capitalization. The composition of this peer group is reviewed annually and, if appropriate, revised, based on changes in business orientation of peer group companies, changes in financial size or performance of the Company and the peer group companies and any mergers, acquisitions, spin-offs or bankruptcies of the companies in the peer group or changes at our Company. WTW reviewed this peer group and confirmed that there were no changes for Fiscal 2022. The peer group utilized consisted of the following 14 companies:
3,132.5 | ||||||||||||||
Decrease in GPC |
Our Compensation Committee reviews market data as part of assessing the appropriateness and reasonableness of our compensation levels and mix of pay. Although our Compensation Committee does not target a particular range for total compensation as compared to our peer group, it does take this information into account when establishing our compensation programs.
In accordance with SEC rules, our Compensation Committee considered the independence of WTW including an assessment of the following factors: (i) other services provided to the Company by each consultant, (ii) fees paid by the Company as a
29
percentage of the consulting firm’s total revenue, (iii) policies or procedures maintained by WTW that are designed to prevent conflicts of interest, (iv) any business or personal relationships between the individual consultants involved in the engagement and any member of our Compensation Committee, (v) any Company stock owned by individual consultants involved in the engagement and (vi) any business or personal relationships between our executive officers and the consultants or the individual consultants involved in the engagement. Our Compensation Committee has concluded that no conflicts of interest prevented WTW from independently advising our Compensation Committee during Fiscal 2022. WTW received $116,054 for executive and director compensation consulting in Fiscal 2022. WTW also provided consulting services relating to our health and benefit plans during Fiscal 2022, for which it received approximately $138,644. The Compensation Committee reviewed these additional consulting services, while considering the potential effects on WTW’s independence.
Compensation Elements
In Fiscal 2022, the compensation for our NEOs primarily consisted of the components set forth below. In determining the compensation package for each NEO or in making any subsequent changes, our Compensation Committee considers the market conditions at the time such compensation levels were determined, the Company’s financial condition at the time such compensation levels were determined, compensation levels for similarly situated executives at other companies, experience level and the duties and responsibilities of such executive’s position.
Base Salary
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MIP Bonus
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LTIP: RSUs and PSUs
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(in millions, except %) | 2023 | 2022 | Variance | |||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 2,918.8 | $ | 3,132.5 | $ | (213.7) | (6.8) | % | ||||||||||||||||||||||||||||||||||||
Gross profit | 924.3 | 990.4 | (66.1) | (6.9) | % | |||||||||||||||||||||||||||||||||||||||
Gross profit margin | 31.7 | % | 31.6 | % | 10 | bps | ||||||||||||||||||||||||||||||||||||||
Operating expenses | $ | 1,127.6 | $ | 964.5 | $ | 163.1 | 16.9 | % | ||||||||||||||||||||||||||||||||||||
Interest expense | 120.5 | 99.8 | 20.7 | 20.7 | % | |||||||||||||||||||||||||||||||||||||||
Interest income | (38.3) | (0.6) | (37.7) | n/m | ||||||||||||||||||||||||||||||||||||||||
Gain on debt repurchase | (7.9) | — | (7.9) | n/m | ||||||||||||||||||||||||||||||||||||||||
Other non-operating expense, net | 3.8 | 14.6 | (10.8) | (74.0) | % | |||||||||||||||||||||||||||||||||||||||
Income tax benefit | (55.1) | (12.9) | (42.2) | 327.1 | % | |||||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | (226.3) | (75.0) | (151.3) | 201.7 | % | |||||||||||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | 2,035.6 | 149.7 | 1,885.9 | n/m | ||||||||||||||||||||||||||||||||||||||||
Net income | 1,809.3 | 74.7 | 1,734.6 | n/m | ||||||||||||||||||||||||||||||||||||||||
n/m = not meaningful |
(in millions, except %) | 2023 | 2022 | Variance | |||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 1,139.0 | $ | 1,175.3 | $ | (36.3) | (3.1 | %) | ||||||||||||||||||||||||||||||||||||
Operating income | 134.4 | 78.3 | 56.1 | 71.6 | % | |||||||||||||||||||||||||||||||||||||||
Operating income margin | 11.8 | % | 6.7 | % | 510 | bps | ||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 190.6 | $ | 168.6 | $ | 22.0 | 13.0 | % | ||||||||||||||||||||||||||||||||||||
Adjusted EBITDA margin | 16.7 | % | 14.3 | % | 240 | bps |
(in millions, except %) | 2023 | 2022 | Variance | |||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 536.5 | $ | 587.1 | $ | (50.6) | (8.6 | %) | ||||||||||||||||||||||||||||||||||||
Operating (loss) income | (5.0) | 57.3 | (62.3) | n/m | ||||||||||||||||||||||||||||||||||||||||
Operating (loss) income margin | (0.9 | %) | 9.8 | % | (1,070) | bps | ||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 72.5 | $ | 86.2 | $ | (13.7) | (15.9 | %) | ||||||||||||||||||||||||||||||||||||
Adjusted EBITDA margin | 13.5 | % | 14.7 | % | (120) | bps | ||||||||||||||||||||||||||||||||||||||
n/m = not meaningful |
(in millions, except %) | 2023 | 2022 | Variance | |||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 1,243.3 | $ | 1,370.1 | $ | (126.8) | (9.3 | %) | ||||||||||||||||||||||||||||||||||||
Operating (loss) income | (214.7) | 30.2 | (244.9) | n/m | ||||||||||||||||||||||||||||||||||||||||
Operating (loss) income margin | (17.3 | %) | 2.2 | % | (1,950) | bps | ||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 43.1 | $ | 69.6 | $ | (26.5) | (38.1 | %) | ||||||||||||||||||||||||||||||||||||
Adjusted EBITDA margin | 3.5 | % | 5.1 | % | (160) | bps | ||||||||||||||||||||||||||||||||||||||
n/m = not meaningful |
SBH | SB/RH | |||||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||
Operating activities | $ | 8.0 | $ | (231.5) | $ | (291.4) | $ | (263.5) | ||||||||||||||||||||||||||||||
Investing activities | $ | 3,191.9 | $ | (335.9) | $ | 3,191.9 | $ | (335.9) | ||||||||||||||||||||||||||||||
Financing activities | $ | (2,263.3) | $ | 490.7 | $ | (1,962.0) | $ | 523.1 |
(in millions) | 2023 | |||||||
Statement of Operations Data | ||||||||
| 1,842.1 | |||||||
Intercompany net sales to non-guarantor subsidiaries | 11.1 | |||||||
Total net sales | 1,853.2 | |||||||
Gross profit | 542.1 | |||||||
Operating loss | (322.5) | |||||||
Net income from continuing operations | 0.1 | |||||||
Net income | 2,006.3 | |||||||
Net income attributable to controlling interest | 2,006.3 | |||||||
Statement of
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Current Assets | $ | 2,773.6 | ||||||
Noncurrent Assets | 1,974.9 | |||||||
Current Liabilities | 1,398.6 | |||||||
Noncurrent Liabilities | 1,868.2 |
Each performance measure
(in millions) | 2023 | |||||||
Statement of Financial Position Data | ||||||||
Current receivables from non-guarantor subsidiaries | $ | 37.6 | ||||||
Long-term receivable from non-guarantor subsidiaries | 104.0 | |||||||
Current payable to non-guarantor subsidiaries | 283.1 | |||||||
Long-term debt with non-guarantor subsidiaries | 2.0 |
For MIPOther Long-Lived Assets
For MIP and LTIP, “Adjusted Free Cash Flow” means Adjusted EBITDA, plus or minus changes in current and long-termresolution.
For MIP, “Net Sales” means the amount of revenuedomestic operating income generated less returns, cash discounts, trade rebatesdue to prior period ownership changes that limit the amount of NOLs and credits we can use.
For LTIP, “Adjusted Return on Average Equity”means three-year cumulative Adjusted Net Income (Adjusted EBITDA less interest, taxes, depreciation and amortization) divided by the sum of fiscal 2022, 2023 and 2024 year average total equity, excluding gain or loss on sale of one or more segments.
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Fiscal 2022 Compensation Component Pay-Outs
Base Salary
The annual base salaries at the end of Fiscal 2022 for our NEOs are set forth below:
Named Executive* | Annual Base Salary at the end of Fiscal 2022 | |||
David M. Maura | $ | 900,000 | ||
Jeremy W. Smeltser | $ | 550,000 | ||
Ehsan Zargar | $ | 400,000 | ||
Randal D. Lewis | $ | 550,000 | ||
Rebeckah Long | $ | 360,000 |
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Management Incentive Plan
For Fiscal 2022, our MIP award levels achievable at target for each participating NEO were as follows:
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The performance metrics for each of our NEOs were equal to those established for the Company as a whole. The maximum MIP bonus payable is 250% of target for Mr. Maura and 200% for our other NEOs. Our Compensation Committee established the following equally weighted performance metrics for our MIP for Fiscal 2022:
33.3% Adjusted EBITDA;
33.3% Adjusted Free Cash Flow; and
33.3% Net Sales, which was replaced with Adjusted Average Inventory Turns for Fiscal 2023.
The table below shows the applicable levels of performance required to achieve threshold, target and maximum payouts for each of the three MIP performance metrics in Fiscal 2022. The table below also shows actual payouts under our MIP program. As shown in the table below, there was no MIP payment for Fiscal 2022 because the required performance thresholds were not achieved.
Performance Required to Achieve Bonus % as Indicated ($ in millions) | ||||||||||||||||||||
Performance Metric | Weight (% of Target Bonus) | Threshold (0%) | Target (100%) | Maximum (200%) (1) | Calculated 2022 Payout (% of Target Bonus) | |||||||||||||||
Adjusted EBITDA | 33.3 | % | $ | 364.50 | $ | 405.00 | $ | 445.50 | 0 | % | ||||||||||
Adjusted Free Cash Flow | 33.3 | % | $ | 67.50 | $ | 75.00 | $ | 82.50 | 0 | % | ||||||||||
Net Sales | 33.3 | % | $ | 3,099.00 | $ | 3,262.10 | $ | 3,425.20 | 0 | % |
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Long Term Incentive Plan
Fiscal 2022 LTIP Grants. Our Fiscal 2022 LTIP grants cover service and cumulative performance over the three-year period commencing October 1, 2021 and ending September 30, 2024. Of the total grant, 70%2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its attestation report, which is included herein.
The chart below sets forth the number of PSUskey control activities throughout development and RSUs each NEO was granted in Fiscal 2022 pursuant to the LTIP.
Name | 70% Performance- Based (at Target) | 30% Time Based | Potential Upside Performance -Based | |||||||||
David M. Maura | 36,907 | 15,817 | 9,227 | |||||||||
Jeremy W. Smeltser | 8,065 | 3,456 | 2,016 | |||||||||
Ehsan Zargar | 10,935 | 4,687 | 2,734 | |||||||||
Randal D. Lewis | 15,036 | 6,444 | 3,759 | |||||||||
Rebeckah Long | 3,349 | 1,435 | 837 |
The table below shows the three performance metrics for our NEOs and the applicable levels of performance required to achieve threshold, target and maximum vesting of PSUs.
Performance Measure (in $ millions) | Threshold (0% of PSUs vest) | Target (100% of PSUs vest) | Maximum (125% of PSUs vest) | |||||||||
Adjusted EBITDA | $ | 1,215.0 | $ | 1,269.6 | $ | 1,283.5 | ||||||
Adjusted Free Cash Flow | $ | 224.6 | $ | 405.1 | $ | 421.1 | ||||||
Adjusted Return on Equity | 10.80 | % | 12.00 | % | 12.30 | % |
Actual Payout of Fiscal 2020 PSUs. The PSUs granted in Fiscal 2020 were subject to performance over the three-year period that ended September 30, 2022, as shown in detail in our prior disclosure. The performance metrics were Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Return on Equity. Our performance over this three-year period resulted in a payout of approximately 83.3% of the target PSUs granted in Fiscal 2020, as reflected in the following table.
Name | Actual 2020 LTIP PSUs Earned and Vested | 2020 LTIP PSUs Forfeited (from Target Grant Level) | ||||||
David M. Maura | 50,575 | 10,118 | ||||||
Jeremy W. Smeltser | 9,366 | 1,874 | ||||||
Ehsan Zargar | 14,985 | 2,998 | ||||||
Randal D. Lewis | 20,605 | 4,122 | ||||||
Rebeckah Long | 3,278 | 656 |
Deferral and Post-Termination Benefits
Retirement Benefits. Our Company maintains a 401(k) plan for our employees, including our NEOs.
Supplemental Executive Life Insurance Program.During Fiscal 2022, each of Messrs. Maura, Smeltser, Zargar and Lewis participated in a program pursuant to which the Company, on behalfdeployment of each participant, made an annual contribution on October 1 equalphase.
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Post-Termination Benefits. As described below,supervision and participation of SB/RH’s management, including the Company had entered into agreements with our NEOs which govern, among other things, post-termination benefits payable to each such NEO should his or her employment with the Company terminate. In each case, the receiptPrincipal Executive Officer and Principal Financial Officer, of post-termination benefits is subject to the NEO’s execution of a waiver and release agreement in favor of the Company and continued compliance with post-employment restrictive covenants and other executive cooperation.
Perquisites and Benefits
The Company provides certain limited perquisites and other benefits to certain executives, including our NEOs. Among these benefits are financial and tax planning services, car allowances or leased car programs, executive medical exams and executive life and disability insurance. Mr. Maura has voluntarily agreed to cease receiving any benefits for financial or tax planning services and his automobile allowance. We do not provide gross-ups to our NEOs.
Important Compensation Policies and Guidelines
Timing and Pricing of Stock-Based Grants
The Company provides stock, restricted stock, RSUs and PSUs as part of the compensation program made available to directors, NEOs and other employees. With respect to annual or special grants of stock or restricted stock, these are generally made on the date or as soon as practicable following the date on which such grants are approved by our Compensation Committee or our Board, or, if the award dictated a subsequent date or the achievement of a particular event prior to grant, as soon as practicable after such subsequent date or achievement of such event. The granting of stock, to the extent granted by the Company, will generally be granted the day after the second business day following the public dissemination of the Company’s financial results or such other date as determined by the Company’s General Counsel, using that day’s NYSE adjusted market close price to convert to a round number of shares.
The Company did not grant stock options to its employees during Fiscal 2022 and does not anticipate that it will use options as part of its compensation program going forward.
Impact of Tax and Accounting Considerations
The overriding consideration when evaluating the pay level or design component of any portion of our executives’ compensation is the effectiveness of the pay componentdesign and the shareholder value that managementoperation of SB/RH’s disclosure controls and the Compensation Committee believe the pay component reinforces. In structuring the compensation for our NEOs, our Compensation Committee will review a variety of factors which may include the deductibility of such compensation under Section 162(m)procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Internal Revenue Code, to the extent applicable. However, this is not the driving or most influential factor, and the Compensation Committee has approved in the past and specifically reserves the right to pay or approve nondeductible compensation currently and in the future.
Executive Compensation Tables
The following tables and footnotes show the compensation earned for service in all capacities during Fiscal 2022, Fiscal 2021 and Fiscal 2020 by our NEOs. We refer you to the “Compensation Discussion and Analysis” and the “Termination and Change in Control Provisions” sections of this report as well as the corresponding footnotes to the tables for material factors necessary for an understanding of the compensation detailed in the tables entitled “Summary Compensation Table,” “All Other Compensation Table for Fiscal 2022” and “Grants of Plan-Based Awards Table for Fiscal 2022.”
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Summary Compensation Table
Name and Principal Position | Year | Salary | Bonus | Stock Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | |||||||||||||||||||
David M. Maura | 2022 | $ | 900,000 | $ | 0 | $ | 5,114,755 | $ | 0 | $ | 800,927 | $ | 6,815,682 | |||||||||||||
Executive Chairman and Chief Executive Officer | 2021 | $ | 900,000 | $ | 0 | $ | 5,399,980 | $ | 1,941,300 | $ | 365,045 | $ | 8,606,325 | |||||||||||||
2020 | $ | 900,000 | $ | 0 | $ | 8,411,326 | $ | 1,442,813 | $ | 194,219 | $ | 10,948,358 | ||||||||||||||
Jeremy W. Smeltser | 2022 | $ | 550,000 | $ | 0 | $ | 1,117,652 | $ | 0 | $ | 185,696 | $ | 1,853,348 | |||||||||||||
Executive Vice President and Chief Financial Officer | 2021 | $ | 500,000 | $ | 0 | $ | 1,000,001 | $ | 640,000 | $ | 203,184 | $ | 2,343,185 | |||||||||||||
2020 | $ | 500,000 | $ | 0 | $ | 1,000,030 | $ | 513,000 | $ | 136,699 | $ | 2,149,729 | ||||||||||||||
Ehsan Zargar | 2022 | $ | 400,000 | $ | 0 | $ | 1,515,490 | $ | 0 | $ | 332,008 | $ | 2,247,498 | |||||||||||||
Executive Vice President, General Counsel and Corporate Secretary | 2021 | $ | 400,000 | $ | 0 | $ | 1,600,028 | $ | 384,000 | $ | 229,191 | $ | 2,613,219 | |||||||||||||
2020 | $ | 400,000 | $ | 0 | $ | 2,881,385 | $ | 307,800 | $ | 156,598 | $ | 3,745,783 | ||||||||||||||
Randal D. Lewis(1) | 2022 | $ | 550,000 | $ | 0 | $ | 2,083,775 | $ | 0 | $ | 347,585 | $ | 2,981,360 | |||||||||||||
Former Executive Vice President and Chief Operating Officer | 2021 | $ | 550,000 | $ | 0 | $ | 2,199,989 | $ | 792,000 | $ | 231,422 | $ | 3,773,411 | |||||||||||||
2020 | $ | 550,000 | $ | 0 | $ | 3,161,022 | $ | 634,838 | $ | 173,120 | $ | 4,518,980 | ||||||||||||||
Rebeckah Long(1) | 2022 | $ | 360,000 | $ | 0 | $ | 464,096 | $ | 0 | $ | 53,376 | $ | 877,472 | |||||||||||||
Former Senior Vice President and Chief Human Resources Officer | 2021 | $ | 300,000 | $ | 0 | $ | 349,978 | $ | 458,000 | $ | 22,998 | $ | 1,130,976 | |||||||||||||
2020 | $ | 300,000 | $ | 0 | $ | 382,050 | $ | 230,850 | $ | 21,326 | $ | 934,226 |
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All Other Compensation Table for Fiscal 2022
Name | Financial Planning Services Provided to Executive (2) | Life Insurance Premiums Paid on Executives Behalf (3) | Car Allowance/ Personal Use of Company Car (4) | Company Contributions to Executive’s Qualified Retirement Plan (5) | Company Contributions to Executive’s Supplemental Life Insurance Policy (6) | Dividends (7) | Other (8) | Total | ||||||||||||||||||||||||
David M. Maura (1) | $ | 0 | $ | 6,095 | $ | 0 | $ | 12,200 | $ | 75,606 | $ | 707,026 | $ | 0 | $ | 800,927 | ||||||||||||||||
Jeremy W. Smeltser | $ | 20,000 | $ | 2,914 | $ | 21,955 | $ | 5,923 | $ | 75,000 | $ | 0 | $ | 59,904 | $ | 185,696 | ||||||||||||||||
Ehsan Zargar | $ | 20,000 | $ | 1,962 | $ | 28,861 | $ | 11,692 | $ | 60,000 | $ | 209,493 | $ | 0 | $ | 332,008 | ||||||||||||||||
Randal D. Lewis | $ | 20,000 | $ | 7,503 | $ | 28,881 | $ | 12,302 | $ | 82,500 | $ | 196,399 | $ | 0 | $ | 347,585 | ||||||||||||||||
Rebeckah Long | $ | 0 | $ | 1,166 | $ | 12,000 | $ | 7,480 | $ | 0 | $ | 32,730 | $ | 0 | $ | 53,376 |
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Grants of Plan-Based Awards Table for Fiscal 2022
The following table and footnotes provide information with respect to equity grants made to our NEOs during Fiscal 2022 as well as the range of future payouts under non-equity incentive plans for our NEOs indicated.
Estimated Future Payouts Under Non- Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | |||||||||||||||||||||||||||||
Name | Grant Date | Threshold $ | Target $ | Maximum $ | Target # | Maximum # | All Other Stock Awards: Number of Shares of Stock or Units # | Grant Date Fair Value of Stock Awards $ | ||||||||||||||||||||||
David M. Maura | 11/8/2021(1) | $ | 0 | $ | 1,125,000 | $ | 2,812,500 | |||||||||||||||||||||||
12/15/2021(2) | $ | 0 | $ | 0 | $ | 0 | 36,907 | 46,134 | 15,817 | $ | 5,114,755 | |||||||||||||||||||
Jeremy W. Smeltser | 11/8/2021(1) | $ | 0 | $ | 440,000 | $ | 880,000 | |||||||||||||||||||||||
12/15/2021(2) | $ | 0 | $ | 0 | $ | 0 | 8,065 | 10,081 | 3,456 | $ | 1,117,652 | |||||||||||||||||||
Ehsan Zargar | 11/8/2021(1) | $ | 0 | $ | 240,000 | $ | 480,000 | |||||||||||||||||||||||
12/15/2021(2) | $ | 0 | $ | 0 | $ | 0 | 10,935 | 13,669 | 4,687 | $ | 1,515,490 | |||||||||||||||||||
Randal D. Lewis | 11/8/2021(1) | $ | 0 | $ | 495,000 | $ | 990,000 | |||||||||||||||||||||||
12/15/2021(2) | $ | 0 | $ | 0 | $ | 0 | 15,036 | 18,795 | 6,444 | $ | 2,083,775 | |||||||||||||||||||
Rebeckah Long | 11/8/2021(1) | $ | 0 | $ | 216,000 | $ | 432,000 | |||||||||||||||||||||||
12/15/2021(2) | $ | 0 | $ | 0 | $ | 0 | 3,349 | 4,186 | 1,435 | $ | 464,096 |
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Outstanding Equity Awards at the End of Fiscal 2022
The following table and footnotes set forth information regarding outstanding options and restricted stock unit awards as of September 30, 2022 for our NEOs. The market value of shares that have not vested was determined by multiplying $39.03, the closing market price of the Company’s stock on September 30, 2022, the last trading day of Fiscal 2022, by the number of shares.
Name | Number of Securities Underlying Unexercised Options Exercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(1) | Market Value of Shares or Units of Stock That Have Not Vested(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) | |||||||||||||||||||||
David M. Maura | 64,142 | $ | 72.92 | 11/29/2023 | — | $ | — | — | $ | — | ||||||||||||||||||
26,743 | $ | 82.85 | 11/25/2024 | — | $ | — | — | $ | — | |||||||||||||||||||
1,164 | $ | 86.38 | 11/24/2025 | — | $ | — | — | $ | — | |||||||||||||||||||
51,309 | $ | 95.43 | 11/28/2026 | — | $ | — | — | $ | — | |||||||||||||||||||
26,012 | (4) | $ | 1,015,248 | 50,575 | (5) | $ | 1,973,942 | |||||||||||||||||||||
24,885 | (6) | $ | 971,262 | 58,064 | (7) | $ | 2,266,238 | |||||||||||||||||||||
15,817 | (8) | $ | 617,338 | 36,907 | (9) | $ | 1,440,480 | |||||||||||||||||||||
Jeremy W. Smeltser | — | — | — | 4,817 | (4) | $ | 188,008 | 9,366 | (5) | $ | 365,555 | |||||||||||||||||
4,608 | (6) | $ | 179,850 | 10,753 | (7) | $ | 419,690 | |||||||||||||||||||||
3,456 | (8) | $ | 134,888 | 8,065 | (9) | $ | 314,777 | |||||||||||||||||||||
Ehsan Zargar | 3,958 | $ | 72.92 | 11/29/2023 | — | — | — | — | ||||||||||||||||||||
5,009 | $ | 82.86 | 11/25/2024 | — | — | — | — | |||||||||||||||||||||
— | $ | — | — | 7,707 | (4) | $ | 300,804 | 14,985 | (5) | $ | 584,865 | |||||||||||||||||
— | — | — | 7,373 | (6) | $ | 287,768 | 17,205 | (7) | $ | 671,511 | ||||||||||||||||||
— | — | — | 4,687 | (8) | $ | 182,934 | 10,935 | (9) | $ | 426,793 | ||||||||||||||||||
Randal D. Lewis | — | — | — | 10,597 | (4) | $ | 413,601 | 20,605 | (5) | $ | 804,213 | |||||||||||||||||
— | — | — | 10,138 | (6) | $ | 395,686 | 23,656 | (7) | $ | 923,294 | ||||||||||||||||||
— | — | — | 6,444 | (8) | $ | 251,509 | 15,036 | (9) | $ | 586,855 | ||||||||||||||||||
Rebeckah Long | — | — | — | 1,686 | (4) | $ | 65,805 | 3,278 | (5) | $ | 127,940 | |||||||||||||||||
— | — | — | 1,613 | (6) | $ | 62,955 | 3,763 | (7) | $ | 146,870 | ||||||||||||||||||
— | — | — | 1,435 | (8) | $ | 56,008 | 3,349 | (9) | $ | 130,711 |
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Option Exercises and Stock Vested During Fiscal 2022
The following table and footnotes provide information regarding option exercises and stock awards vesting during Fiscal 2022 for our NEOs.
Stock Awards | Option Awards | |||||||||||||||
Name | Number of Shares Acquired on Vesting | Value Realized on Vesting | Number of Shares Acquired on Exercise | Value Realized on Exercise | ||||||||||||
David M. Maura | 140,283 | $ | 13,888,017 | (1) | — | — | ||||||||||
Jeremy W. Smeltser | 0 | $ | 0 | — | — | |||||||||||
Ehsan Zargar | 41,566 | $ | 4,115,034 | (2) | — | — | ||||||||||
Randal D. Lewis | 38,968 | $ | 3,857,832 | (3) | — | — | ||||||||||
Rebeckah Long | 6,494 | $ | 642,906 | (4) | — | — |
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Pension Benefits
None of our NEOs participated in any pension plans during, or as of the end of, Fiscal 2022.
Non-Qualified Deferred Compensation
None of our NEOs participated in any Company non-qualified deferred compensation programs during, or as of the end of, Fiscal 2022.
Termination and Change in Control Provisions
Awards under the Company Equity Plan
For purposes of these incentive plans, “change in control” generally means the occurrence of any of the events listed below and “Applicable Company” means the Company or SPB Legacy with respect to the former equity plan of SPB Legacy which was assumed by the Company:
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Executive-Specific Provisions Regarding Employment, Termination and Change in Control
Agreements with NEOs
Our Compensation Committee periodically evaluates the appropriateness of entering into employment agreements, severance agreements or other written agreements with the Company’s NEOs to govern compensation and other aspects of the employment relationship. During Fiscal 2022, the Company and/or its wholly owned subsidiary, SBI, had written employment agreements with its NEOs as follows: (i) an Employment Agreement, dated January 20, 2016, as amended and restated on dated April 25, 2018, with Mr. Maura (the “Maura Employment Agreement”); (ii) an employment agreement, dated September 9, 2019, with Mr. Smeltser (the “Smeltser Employment Agreement”); (iii) an employment Agreement, dated October 1, 2018, with Mr. Zargar (the “Zargar Employment Agreement”); (iv) an employment agreement dated September 9, 2019, with Mr. Lewis (the “Lewis Employment Agreement”), which was superseded by a separation agreement with Mr. Lewis dated as of August 29, 2022 (the “Lewis Separation Agreement”); and (v) a letter agreement, dated September 9, 2019, with Ms. Long (the “Long Letter Agreement”), which was supplemented by a severance agreement with Ms. Long dated September 9, 2019 (the “Long Severance Agreement”), and which was superseded by a separation agreement with Ms. Long dated as of August 29, 2022 (the “Long Separation Agreement”).
Agreement with Mr. Maura
Pursuant to the Maura Employment Agreement, the initial term was until April 24, 2021, subject to earlier termination, with automatic one-year renewals thereafter. The Maura Employment Agreement provides Mr. Maura with an annual base salary as Executive Chairman of $700,000 and an annual base salary of $200,000 for the duration of his services as CEO, and he will be eligible to receive a performance-based MIP bonus for each fiscal year, based on a target of 125% of his total base salary, as may be applicable at the time (the “Target Amount”), paid during the applicable fiscal year during the term of the Maura Employment Agreement, provided the Company achieves certain annual performance goals as established by our Board and/or our Compensation Committee. If such performance goals are met, the MIP bonus will be payable in cash. If Mr. Maura exceeds the performance targets, the bonus will be increased in accordance with the formula approved by the Compensation Committee no later than the close of the first quarter of the year following the applicable fiscal year; provided that the bonus will not exceed 250% of the Target Amount.
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Under the terms of the Maura Employment Agreement, Mr. Maura was entitled to receive a performance-based EIP grant with a target value of $3.2 million for his service as Executive Chairman and CEO and a performance-based S3B grant with a target value of $3 million, each in accordance with those programs’ grant cycles. In Fiscal 2019, our Compensation Committee eliminated the EIP and S3B bonus programs and replaced them with our performance based LTIP bonus program.2023. Based on the review of peer groups, Mr. Maura received an LTIP grant with target value of $5.4 million for Fiscal 2022. In addition, at the discretion of the Compensation Committee and/or the Board, Mr. Maura is also eligible to receive future grants and/or participate in future multi-year incentive programs.
The Maura Employment Agreement also provides Mr. Maura with, among other things: (i) four weeks of paid vacation for each full year; (ii) eligibility for Mr. Maura to participate in the Company’s executive auto lease program which Mr. Maura has waived beginning in Fiscal 2020; (iii) a stipend for income tax filings and returns preparation and advice and estate planning advice which Mr. Maura has waived; and (iv) eligibility for Mr. Maura to participate in any of the Company’s insurance plans and other benefits, if any, as the benefits are made available to other executive officers of the Company.
Under the Maura Employment Agreement, Mr. Maura is entitled to receive severance benefits if his employment is terminated under certain circumstances. In general, termination as Executive Chairman and as CEO is determined separately, so that termination from either position will generally provide for payments in respect only of that position and a termination from both positions will provide for payments in respect of both positions.
In the event that Mr. Maura is terminated with “cause” or terminates his employment voluntarily, other than for “good reason,” from his role as Executive Chairman or as CEO or all his roles, Mr. Maura’s compensation (with respect to such roles) and other benefits (in the case where he is terminated from all his roles) provided under his employment agreement cease at the time of such termination, and Mr. Maura is entitled to no further compensation under his employment agreement with respect to such role. Notwithstanding this, the Company would pay to Mr. Maura accrued compensation and benefits and continuation of Company medical benefits to the extent required by law.
If Mr. Maura’s role as CEO is terminated (without terminating his role as Executive Chairman), without “cause,” by the Company, by Mr. Maura for “good reason,” due to Mr. Maura’s death or disability or upon a Company-initiated non-renewal or upon a change in control, Mr. Maura will be entitled to receive the following severance benefits: (i) the vesting of $250,000 of his outstanding time-based equity awards, based on grant-date value, as determined by the Compensation Committee; (ii) a cash payment of $500,000 ratably monthly in arrears over the 12-month period following such termination; and (iii) a pro rata portion, in cash, of the annual MIP bonus related to the base salary that Mr. Maura would have earned for the fiscal year in which termination occurs. Notwithstanding the foregoing, if Mr. Maura’s employment is terminated in a CIC Termination (as defined below) during the initial term of the Maura Employment Agreement, then instead of the payment in clause (ii) above, he will receive a cash payment equal to the greater of (x) a cash amount equal to $500,000 or (y) a cash amount equal to his then-current base salary times the number of months remaining in the initial term, with a pro rata amount being calculated for any partial month in that time period.
In addition to the payments above, if Mr. Maura’s employment (as Executive Chairman) is terminated by the Company without “cause,” by Mr. Maura for “good reason,” upon Mr. Maura’s death or disability or upon a Company-initiated non-renewal of his employment agreement, the Company shall pay or provide for Mr. Maura: (i) (a) a cash payment equal to 1.5 times the base salary in effect immediately prior to his termination, plus (b) a cash payment equal to 1.0 times his target annual MIP bonus of 125% of his then-current base salary, each payable ratably on a monthly basis over the 18-month period immediately following his termination; (ii) the pro rata portion, in cash, of the annual MIP bonus (if any) he would have earned for the fiscal year in which such termination occurs if his employment had not ceased, to be paid at the same time such bonus would have been paid to Mr. Maura for such fiscal year if his employment had not terminated; (iii) for the 18-month period immediately following such termination, provide Mr. Maura and his dependents with medical insurance coverage and other employee benefits on a basis substantially similar to those provided to Mr. Maura and his dependents by the Company immediately prior to the date of termination at no greater cost to Mr. Maura or the Company than the cost to Mr. Maura and the Company immediately prior to such date; and (iv) payment of accrued vacation time pursuant to Company policy. In addition, all unvested outstanding time-based equity awards will promptly vest as provided in the applicable equity award agreements. Notwithstanding the foregoing, if Mr. Maura’s employment is terminated in a CIC Termination during the initial term of the Maura Employment Agreement, then instead of the payment in clause (i)(a) above, he will receive a cash payment equal to the greater of (x) a cash amount equal to 1.5 times his then-current base salary or (y) a cash amount equal to his then-current base salary times the number of months remaining in the initial term, with a pro rata amount being calculated for any partial month in that time period.
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If Mr. Maura’s employment is terminated by the Company without “cause” (and not due to death or disability) or by Mr. Maura for “good reason” during the period that begins 60 days prior to the occurrence of a change in control (or, in limited cases, earlier) and ends upon the first anniversary of the change in control (a “CIC Termination”), then Mr. Maura will receive all severance benefits available to him as if he terminated his employment for “good reason,” and all of his outstanding and unvested performance-based equity awards will vest in full (at the target level).
The payment of the severance payments and vesting of equity awards described above with respect to a termination of Mr. Maura’s employment are conditioned upon Mr. Maura’s execution of a release of claims in favor of the Company and its controlled affiliates and Mr. Maura’s compliance with the non-competition, non-solicitation, non-disparagement and confidentiality restrictions set forth in his employment agreement. The non-competition and non-solicitation provisions extend for 18 months following Mr. Maura’s termination and confidentiality provisions extend for seven years following Mr. Maura’s termination.
Under the Maura Employment Agreement, (a) “good reason” is defined as the occurrence of any of the following events without Mr. Maura’s consent: (i) any reduction in Mr. Maura’s annual base salary or target MIP bonus opportunity then in effect; (ii) the required relocation of Mr. Maura’s office at which he is principally employed as of April 25, 2018 to a location more than 50 miles from such office or the requirement by the Company that Mr. Maura be based at a location other than such office on an extended basis, except for required business travel; (iii) a substantial diminution or other substantive adverse change in the nature or scope of Mr. Maura’s responsibilities, authorities, powers, functions or duties; (iv) a breach by the Company of any of its other material obligations under the Maura Employment Agreement; or (v) the failure of the Company to obtain the agreement of any successor to the Company to assume and agree to perform the Maura Employment Agreement; and (b) “cause” is defined, in general, as the occurrence of any of the following events: (i) the commission by Mr. Maura of any deliberate and premeditated act taken by Mr. Maura in bad faith against the interests of the Company that causes or is reasonably anticipated to cause material harm to the Company; (ii) Mr. Maura has been convicted of or pleads nolo contendere with respect to, any felony or of any lesser crime or offense having as its predicate element fraud, dishonesty or misappropriation of the property of the Company that causes or is reasonably anticipated to cause material harm to the Company; (iii) the habitual drug addiction or intoxication of Mr. Maura which negatively impacts his job performance or Mr. Maura’s failure of a company-required drug test; (iv) the willful failure or refusal of Mr. Maura to perform his duties as set forth in the employment agreement or the willful failure or refusal to follow the direction of our Board, which is not cured after 30 calendar days’ notice; or (v) Mr. Maura materially breaches any of the terms of the Maura Employment Agreement or any other agreement between himself and the Company and the breach is not cured within 30 calendar days after written notice from the Company.
Agreement with Mr. Smeltser
On September 9, 2019, the Company entered into an employment agreement with Jeremy W. Smeltser. Pursuant to the Smeltser Employment Agreement, the initial term was until September 30, 2020 and thereafter is subject to automatic one-year renewals, subject to earlier termination. Pursuant to the Smeltser Employment Agreement, Mr. Smeltser will receive an annual base salary of $500,000, subject to periodic review and increase by the Compensation Committee, in its discretion. Beginning in Fiscal 2022, Mr. Smeltser’s annual base salary was increased by 10% to $550,000. In addition, Mr. Smeltser will receive a performance-based cash bonus under the MIP for each fiscal year (commencing with Fiscal 2020) during the term of the agreement. The MIP bonus will be based on a target of 80% (and a maximum of 160%) of Mr. Smeltser’s base salary paid during the applicable fiscal year, provided that the Company achieves certain annual performance goals as established by the Board and/or Compensation Committee. If such performance goals are met, the MIP bonus will be payable in cash, provided that Mr. Smeltser remains employed with the corporation on the date the bonus is paid.
The Smeltser Employment Agreement provides that on or prior to December 31, 2019, Mr. Smeltser will receive an equity or equity based award with a grant date value of $1,000,000 and that for each subsequent fiscal year ending during the term (commencing with Fiscal 2022), he shall be eligible to receive an equity or equity based award with a target value of 200% of his base salary. Beginning in Fiscal 2022, Mr. Smeltser’s annual equity award grant date target value was increased by 18% to $1,180,000.
The Smeltser Employment Agreement also provides Mr. Smeltser with certain other compensation and benefits, including: (i) relocation reimbursement of up to $75,000 as well as the use of a Company-funded apartment for up to 12 months; (ii) four weeks of paid vacation for each full year; (iii) eligibility to participate in any of the Company’s insurance plans and other benefits, if any, as are made available to other executive officers of the Company; and (iv) eligibility for Mr. Smeltser to participate in the Company’s executive auto lease program during the term of the employment agreement.
The Smeltser Employment Agreement contains the following provisions applicable upon the termination of Mr. Smeltser’s employment with the Company and/or in the event of a change in control of the Company.
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In the event that Mr. Smeltser is terminated with “cause” or terminates his employment voluntarily, other than for “good reason,” Mr. Smeltser’s salary and other benefits provided under his employment agreement cease at the time of such termination, and Mr. Smeltser is entitled to no further compensation under his employment agreement. Notwithstanding this, Mr. Smeltser would be entitled to continue to participate in the Company’s medical benefit plans to the extent required by law. Further, upon any such termination of employment, the Company would pay to Mr. Smeltser accrued pay and benefits.
If the employment of Mr. Smeltser with the Company is terminated by the Company without “cause,” by Mr. Smeltser for “good reason,” or is terminated due to Mr. Smeltser’s death or disability, Mr. Smeltser is entitled to receive certain post-termination benefits, detailed below, contingent upon execution of a separation agreement with a release of claims agreeable to the Company and Mr. Smeltser’s compliance with the non-competition, non-solicitation, non-disparagement and confidentiality restrictions set forth in his employment agreement. In such event the Company will: (i) pay Mr. Smeltser (a) 1.5 times his base salary in effect immediately prior to his termination, plus (b) 1.0 times his target annual bonus award for the fiscal year in which such termination occurs, ratably over the 18-month period immediately following his termination; (ii) pay Mr. Smeltser the pro rata portion of the annual bonus (if any) he would have earned pursuant to any annual bonus or incentive plan maintained by the Company with respect to the fiscal year in which such termination occurs if his employment had not ceased, to be paid at the same time such bonus would have been paid to Mr. Smeltser for such fiscal year if his employment had not terminated; (iii) for the 18-month period immediately following such termination, arrange to provide Mr. Smeltser and his dependents with medical and dental benefits on a basis substantially similar to those provided to Mr. Smeltser and his dependents by the Company immediately prior to the date of termination, subject to his electing COBRA coverage; and (iv) pay Mr. Smeltser his accrued vacation time pursuant to Company policy. In addition, all unvested outstanding time-based equity awards will vest on a pro rata basis, and all performance-based awards will be forfeited.
The non-competition and non-solicitation provisions extend for 18 months following Mr. Smeltser’s termination and confidentiality provisions extend for up to seven years following Mr. Smeltser’s termination. Mr. Smeltser is also subject to a cooperation provision that extends for six years following Mr. Smeltser’s termination.
The definitions of “good reason” and “cause” under the Smeltser Employment Agreement are similar to the definitions of such terms in the Maura Employment Agreement.
Agreement with Mr. Zargar
On September 13, 2018, the Company and SBI and Mr. Zargar entered into an employment agreement which became effective as of October 1, 2018. The initial term of the Zargar Employment Agreement was until September 30, 2021, subject to earlier termination, with automatic one-year renewals thereafter. The Zargar Employment Agreement provides Mr. Zargar with an annual base salary of $400,000, and he will be eligible to receive a performance-basedevaluation, SB/RH’s management, incentive plan bonus for each fiscal year starting in Fiscal 2019, based on a target of at least 60% of the then-current base salary (the “Target Amount”) paid during the applicable fiscal year during the term, provided the Company achieves certain annual performance goals as established by the Board and/or the Compensation Committee. If such performance goals are met, the bonus will be payable in cash. If Mr. Zargar exceeds the performance targets, the bonus will be increased in accordance with the formula approved by the Compensation Committee provided that the bonus will not exceed 200% of the Target Amount.
Mr. Zargar will also be eligible for future equity awards under the Company’s equity plan at the discretion of the Compensation Committee and/or Board and will be eligible to participate in future multi-year incentive programs as may be adopted from time to time. The Zargar Employment Agreement also provides Mr. Zargar with certain other compensation and benefits, including the following: (i) four weeks of paid vacation for each full year; (ii)��eligibility for Mr. Zargar to participate in the Company’s executive auto lease program; (iii) a stipend for corporate apartmentPrincipal Executive Officer and income tax filings and returns preparation and advice and estate planning advice; and (iv) eligibility for Mr. Zargar to participate in any of the Company’s insurance plans and other benefits, if any, as the benefits are made available to other executive officers of the Company.
Under the Zargar Employment Agreement, Mr. Zargar is entitled to receive severance benefits if his employment is terminated under certain circumstances. In the eventPrincipal Financial Officer, concluded that Mr. Zargar is terminated with “cause” or terminates his employment voluntarily, other than for “good reason,” Mr. Zargar’s compensation and other benefits provided under his employment agreement cease at the time of such termination, and Mr. Zargar is entitled to no further compensation under his employment agreement with respect to such role. Notwithstanding this, the Company would pay to Mr. Zargar accrued compensation and benefits and continuation of Company medical benefits to the extent required by law.
If Mr. Zargar’s employment is terminated by the Company without “cause,” by Mr. Zargar for “good reason” (as defined below) or by reason of death or by the Company for disability or upon a Company-initiated non-renewal, he will be entitled to the following severance benefits: (i) a cash payment equal to 2.99 times his then-current base salary, (ii) a cash payment equal
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to 1.5 times his then-current target annual MIP bonus, each payable ratably on a monthly basis over the 18-month period following termination; (iii) a pro rata portion, in cash, of the annual bonus Mr. Zargar would have earned for the fiscal year in which termination occurs if his employment had not ceased; (iv) for the 18-month period following termination provide Mr. Zargar and his dependents with medical insurance coverage and other employee benefits on a basis substantially similar to those provided to Mr. Zargar and his dependents by the Company immediately prior to the date of termination at no greater cost to Mr. Zargar or the Company than the cost to Mr. Zargar or the Company immediately prior to such date; and (v) payment of accrued vacation time pursuant to Company policy. In addition, all unvested outstanding performance-based and time-based equity awards will immediately vest in full (at target) as provided in the applicable equity award agreements.
In the case of termination, severance payments and vesting are conditioned upon Mr. Zargar’s execution of a release of claims in favor of the Company and its affiliates and Mr. Zargar’s compliance with the non-solicitation, non-disparagement and confidentiality restrictions set forth in his employment agreement. The non-solicitation provisions extend for 18 months following Mr. Zargar’s termination and the confidentiality provisions extend for seven years following Mr. Zargar’s termination. Mr. Zargar is also subject to a two-year cooperation provision.
The definitions of “good reason” and “cause” under the Zargar Employment Agreement are similar to the definitions of such terms in the Maura Employment Agreement.
Agreements with Mr. Lewis
On September 9, 2019, Mr. Lewis was promoted to the office of Executive Vice President and entered into the Lewis Employment Agreement, which superseded a prior severance agreement. As noted below, the Lewis Employment Agreement was superseded by the Lewis Separation Agreement.
Pursuant to the Lewis Employment Agreement, the initial term was until September 30, 2020 and thereafter was subject to automatic one-year renewals, subject to earlier termination. Pursuant to the Lewis Employment Agreement, Mr. Lewis received an annual base salary of $550,000, subject to periodic review and increase by the Compensation Committee, in its discretion. In addition, Mr. Lewis received a performance-based cash bonus under the MIP for each fiscal year (commencing with Fiscal 2020) during the term of the agreement. The MIP bonus was based on a target of 90% (and a maximum of 180%) of Mr. Lewis’s base salary paid during the applicable fiscal year, provided that the Company achieves certain annual performance goals as established by the Board and/or Compensation Committee. If such performance goals were met, the MIP bonus was payable in cash, provided that Mr. Lewis remained employed with the corporation on the date the bonus was paid.
The Lewis Employment Agreement provided that on or prior to December 31, 2019, Mr. Lewis received an equity or equity based award with a grant date value of $2,200,000 and that for each subsequent fiscal year ending during the term (commencing with Fiscal 2022), he was eligible to receive an equity or equity based award with a target value of 400% of his base salary.
The Lewis Employment Agreement also provided Mr. Lewis with certain other compensation and benefits, including: (i) four weeks of paid vacation for each full year; (ii) eligibility to participate in any of the Company’s insurance plans and other benefits, if any, as were made available to other executive officers of the Company; and (iii) eligibility for Mr. Lewis to participate in the Company’s executive auto lease program during the term of the employment agreement.
The Lewis Employment Agreement contained the following provisions applicable upon the termination of Mr. Lewis’s employment with the Company and/or in the event of a change in control of the Company.
In the event that Mr. Lewis was terminated with “cause” or terminated his employment voluntarily, other than for “good reason,” Mr. Lewis’s salary and other benefits provided under his employment agreement would cease at the time of such termination, and Mr. Lewis would have been entitled to no further compensation under his employment agreement. Notwithstanding this, Mr. Lewis would have been entitled to continue to participate in the Company’s medical benefit plans to the extent required by law. Further, upon any such termination of employment, the Company would pay to Mr. Lewis accrued pay and benefits.
If the employment of Mr. Lewis with the Company was terminated by the Company without “cause,” by Mr. Lewis for “good reason,” or was terminated due to Mr. Lewis’s death or disability, Mr. Lewis was entitled to receive certain post-termination benefits, detailed below, contingent upon execution of a separation agreement with a release of claims agreeable to the Company and Mr. Lewis’s compliance with the non-competition, non-solicitation, non-disparagement and confidentiality restrictions set forth in his employment agreement. In such event the Company would: (i) pay Mr. Lewis (a) 1.5 times his base salary in effect immediately prior to his termination, plus (b) 1.0 times his target annual bonus award for the fiscal year in which such termination occurred, ratably over the 18-month period immediately following his termination; (ii) pay Mr. Lewis
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the pro rata portion of the annual bonus (if any) he would have earned pursuant to any annual bonus or incentive plan maintained by the Company with respect to the fiscal year in which such termination occurred if his employment had not ceased, to be paid at the same time such bonus would have been paid to Mr. Lewis for such fiscal year if his employment had not terminated; (iii) for the 18-month period immediately following such termination, arrange to provide Mr. Lewis and his dependents with medical and dental benefits on a basis substantially similar to those provided to Mr. Lewis and his dependents by the Company immediately prior to the date of termination, subject to his electing COBRA coverage; and (iv) pay Mr. Lewis his accrued vacation time pursuant to Company policy. In addition, all unvested outstanding time-based equity awards would vest on a pro rata basis and all performance-based awards would be forfeited.
The non-competition and non-solicitation provisions extend for 18 months following Mr. Lewis’s termination and confidentiality provisions extend for up to seven years following Mr. Lewis’s termination. Mr. Lewis is also subject to a cooperation provision that extends for six years following Mr. Lewis’s termination. The definitions of “good reason” and “cause” under the Lewis Employment Agreement were similar to the definitions of such terms in the Maura Employment Agreement.
Pursuant to the Lewis Separation Agreement, Mr. Lewis’ employment was terminated without cause under the Lewis Employment Agreement. Mr. Lewis continued as a full-time employee of the Company until December 31, 2022, during which time he generally continued to receive his regular executive compensation and benefits. His duties during this period included assisting the CEO or his designees with: (i) setting and executing the strategy of operation of the Company’s business units including pricing strategies, inventory management, supply chain management and tariff mitigation; (ii) strategic projects and initiatives as identified by the CEO; (iii) setting the fiscal 2023 annual operating budget; and (iv) ensuring timely transition of his duties. Following his separation, subject to continued compliance with his post-employment restrictive covenants, Mr. Lewis is eligible to receive the severance benefits he was contractually entitled to receive under the Lewis Employment Agreement described above, that is, (i) payments of 1.5 times Executive’s base salary (totaling $825,00) plus 1.0 times the Fiscal 2022 target bonus ($495,000), payable over 18 months, (ii) health insurance benefits for 18 months and (iii) vesting with respect to a pro rata portion of his time-based Fiscal 2021 LTIP RSU award based on days employed during the vesting period.
Other than as set forth above, Mr. Lewis is not entitled to any other compensation or benefits, forfeited all other unvested equity awards (which consisted of 38,692 unvested PSU and 9,626 unvested RSUs) and did not participate in the Company’s 2023 cash or equity bonus programs. Although under the Lewis Employment Agreement, Mr. Lewis was contractually entitled to receive pro rata vesting of his 2022 RSUs (representing approximately 2,293 RSUs), he voluntarily forfeited these RSUs.
Agreements with Ms. Long
On September 9, 2019, the Company entered into the Long Letter Agreement and the Long Severance Agreement with Ms. Long. As noted below, the Long Letter Agreement and Long Severance Agreement were superseded by the Long Separation Agreement.
Pursuant to the Long Letter Agreement, effective as of September 9, 2019, Ms. Long was promoted to Senior Vice President, Global Human Resources Officer for the Company and was promoted to Senior Vice President and Chief Human Resources Officer effective November 2021. Effective as of September 9, 2019, Ms. Long’s base salary was increased from $250,000 to $300,000 (pro-rated for Fiscal 2019). Beginning in Fiscal 2020, Ms. Long’s target bonus was increased from 40% to 60%, and her long-term incentive award for Fiscal 2022 was $350,000. Beginning in Fiscal 2022, Ms. Long’s base salary was increased by 20% to $360,000 and equity award grant date target value was increased by 40% to $490,000.
Pursuant to the Long Severance Agreement, if Ms. Long’s employment was terminated by the Company without cause, she would receive as severance 52 weeks of base pay and (subject to her timely election of COBRA) 52 weeks of continued medical coverage. The receipt of severance benefits was conditioned upon her execution of an effective and irrevocable release of claims as well as continued compliance with her post employment restrictive covenants, including 12-month non-compete and non-solicit, a 5-year confidentiality provision, a 6-year cooperation provision and perpetual non-disparagement provisions. “Cause” for purposes of the Long Severance Agreement generally meant: (i) the commission by Ms. Long of any theft, fraud, embezzlement or other material act of disloyalty or dishonesty with respect to the Company (including the unauthorized disclosure of confidential or proprietary information of the Company); (ii) Ms. Long’s conviction of or plea of guilty or nolo contendere to, a felony or other crime of moral turpitude, disloyalty or dishonesty; (iii) Ms. Long’s willful misconduct or gross neglect in the performance of Ms. Long’s job duties and responsibilities to the Company; (iv) the willful or intentional failure or refusal by Ms. Long to follow the written and specific, reasonable and lawful directives of Ms. Long’s supervisor or the Company’s senior management team, which failure or refusal to perform (to the extent curable) was not completely cured to the Company’s reasonable satisfaction within 15 days after receipt of a written notice from the Company detailing such failure or refusal to perform, provided that in no event would the Company be required to provide more than one such notice or cure
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period (to the extent a cure period is applicable) within any 12-month period; (v) the failure or refusal by Ms. Long to perform her duties and responsibilities to the Company or any of its affiliates, which failure or refusal to perform (to the extent curable) was not completely cured to the Company’s reasonable satisfaction within 15 days after receipt of a written notice from the Company detailing such failure or refusal to perform, provided that in no event would the Company be required to provide more than one such notice or cure period (to the extent a cure period is applicable) within any 12-month period; (vi) Ms. Long’s breach of any of the terms of the Long Severance Agreement, any other agreement between Ms. Long and the Company or any Company policy, which breach (to the extent curable) was not cured to the Company’s reasonable satisfaction within 15 days after receipt of a written notice from the Company to Ms. Long of such breach, provided that in no event would the Company be required to provide more than one such notice or cure period (to the extent a cure period is applicable) within any 12-month period; (vii) Ms. Long engaged in conduct that discriminates against or harasses any employee or other person providing services to the Company on the basis of any protected class such that it would harm the reputation of the Company or its affiliates if Ms. Long was retained as an employee, as determined by the Company in good faith after a reasonable inquiry; or (viii) Ms. Long engaged in intentional, reckless or negligent conduct that had or was reasonably likely to have an adverse effect on the Company’s business or reputation, as determined by the Company in good faith.
Pursuant to the Long Separation Agreement, Ms. Long’s employment was terminated without cause under the Long Severance Agreement. Ms. Long continued as a full-time employee of the Company until December 31, 2022, during which time she generally continued to receive her regular executive compensation and benefits. Her duties during this period included (i) setting and executing the strategy of operation of the Company’s Human Resources function, (ii) strategic projects and initiatives as identified by the Company, (iii) setting the Fiscal 2023 annual Human Resources operating budget and (iv) ensuring timely transition of her duties. Following her separation, subject to continued compliance with her post-employment restrictive covenants, Ms. Long is eligible to receive the severance benefits she was contractually entitled to receive under the Long Severance Agreement described above, that is: (i) 52 weeks of base pay and (ii) health insurance benefits for 12 months.
Other than as set forth above, Ms. Long is not entitled to any other compensation or benefits, forfeited all other unvested equity awards (which consisted of 7,112 unvested PSU and 3,048 unvested RSUs) and did not participate in the Company’s 2023 cash or equity bonus programs.
Amounts Payable upon Termination or Change in Control
The following tables set forth the amounts that would have been payable at September 30, 2022 to each of our NEOs who were employed by the Company as NEOs on the last day of Fiscal 2022 under the various scenarios for termination of employment or a change in control of the Company had such scenarios occurred on September 30, 2022.
David Maura | Termination Scenarios (Assumes Termination on 9/30/2022) | |||||||||||||||
Component | Without Good Reason or For Cause | With Good Reason or Without Cause | Upon Death or Disability | Change in Control & Termination | ||||||||||||
Cash Severance(1) | $ | 0 | $ | 2,425,000 | $ | 2,425,000 | $ | 2,425,000 | ||||||||
Annual Bonus | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Equity Awards (Intrinsic Value)(2) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Unvested Restricted Stock | $ | 0 | $ | 2,603,847 | (3) | $ | 2,603,847 | (3) | $ | 8,679,413 | (4) | |||||
Other Benefits | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Health and Welfare(5) | $ | 0 | $ | 10,690 | $ | 10,690 | $ | 10,690 | ||||||||
Car allowance(6) | $ | 0 | $ | 24,000 | $ | 24,000 | $ | 24,000 | ||||||||
Accrued, Unused Vacation(7) | $ | 0 | $ | 4,803 | $ | 4,803 | $ | 4,803 | ||||||||
Total | $ | 0 | $ | 5,068,340 | $ | 5,068,340 | $ | 11,143,906 |
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Jeremy W. Smeltser | Termination Scenarios (Assumes Termination on 9/30/2022) | |||||||||||||||
Component | Without Good Reason or For Cause | With Good Reason or Without Cause | Upon Death or Disability | Change in Control & Termination | ||||||||||||
Cash Severance(1) | $ | 0 | $ | 1,265,000 | $ | 1,265,000 | $ | 1,265,000 | ||||||||
Annual Bonus | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Equity Awards (Intrinsic Value)(2) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Unvested Restricted Stock | $ | 0 | $ | 323,229 | (3) | $ | 323,229 | (3) | $ | 323,229 | (3) | |||||
Other Benefits | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Health and Welfare(4) | $ | 0 | $ | 10,650 | $ | 10,650 | $ | 10,650 | ||||||||
Car allowance(5) | $ | 0 | $ | 21,574 | $ | 21,574 | $ | 21,574 | ||||||||
Accrued, Unused Vacation(6) | $ | 0 | $ | 9,281 | $ | 9,281 | $ | 9,281 | ||||||||
Total | $ | 0 | $ | 1,629,774 | $ | 1,629,774 | $ | 1,629,774 |
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Ehsan Zargar | Termination Scenarios (Assumes Termination on 9/30/2022) | |||||||||||||||
Component | Without Good Reason or For Cause | With Good Reason or Without Cause | Upon Death or Disability | Change in Control & Termination | ||||||||||||
Cash Severance(1) | $ | 0 | $ | 1,556,000 | $ | 1,556,000 | $ | 1,556,000 | ||||||||
Annual Bonus | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Equity Awards (Intrinsic Value)(2) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Unvested Restricted Stock | $ | 0 | $ | 2,571,687 | (3) | $ | 2,571,687 | (3) | $ | 2,571,687 | (3) | |||||
Other Benefits | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Health and Welfare(4) | $ | 0 | $ | 3,573 | $ | 3,573 | $ | 3,573 | ||||||||
Car allowance(5) | $ | 0 | $ | 25,870 | $ | 25,870 | $ | 25,870 | ||||||||
Accrued, Unused Vacation(6) | $ | 0 | $ | 5,981 | $ | 5,981 | $ | 5,981 | ||||||||
Total | $ | 0 | $ | 4,163,111 | $ | 4,163,111 | $ | 4,163,111 |
|
|
|
|
|
|
Randal D. Lewis | Termination Scenarios (Assumes Termination on 9/30/2022) | |||||||||||||||
Component | Without Good Reason or For Cause | With Good Reason or Without Cause | Upon Death or Disability | Change in Control & Termination | ||||||||||||
Cash Severance(1) | $ | 0 | $ | 1,320,000 | $ | 1,320,000 | $ | 1,320,000 | ||||||||
Annual Bonus | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Equity Awards (Intrinsic Value)(2) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Unvested Restricted Stock | $ | 0 | $ | 698,797 | (3) | $ | 698,797 | (3) | $ | 698,797 | (3) | |||||
Other Benefits | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Health and Welfare(4) | $ | 0 | $ | 7,439 | $ | 7,439 | $ | 7,439 | ||||||||
Car allowance(5) | $ | 0 | $ | 26,235 | $ | 26,235 | $ | 26,235 | ||||||||
Accrued, Unused Vacation(6) | $ | 0 | $ | 7,166 | $ | 7,166 | $ | 7,166 | ||||||||
Total | $ | 0 | $ | 2,059,637 | $ | 2,059,637 | $ | 2,059,637 |
|
|
|
48
|
|
|
Rebeckah Long | Termination Scenarios (Assumes Termination on 9/30/2022) | |||||||||||||||
Component | Without Good Reason or For Cause | With Good Reason or Without Cause | Upon Death or Disability | Change in Control & Termination | ||||||||||||
Cash Severance(1)(2) | $ | 0 | $ | 360,000 | $ | 360,000 | $ | 360,000 | ||||||||
Annual Bonus | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Equity Awards (Intrinsic Value)(3) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Unvested Restricted Stock | $ | 0 | $ | 0 | (4) | $ | 0 | (4) | $ | 0 | (4) | |||||
Other Benefits | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Health and Welfare(5) | $ | 0 | $ | 7,439 | $ | 7,439 | $ | 7,439 | ||||||||
Accrued, Unused Vacation | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Total | $ | 0 | $ | 367,439 | $ | 367,439 | $ | 367,439 |
|
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|
|
49
Compensation Committee Report
Our Compensation Committee has reviewed and discussed the section of this report entitled “Compensation Discussion and Analysis” with management. Based on this review and discussion, the Committee has recommended to our Board that the Compensation Discussion and Analysis be included in this Form 10-K/A.
Compensation Committee
Terry L. Polistina (Chair)
Sherianne James
Gautam Patel
Fiscal 2022 CEO Pay Ratio
Under rules adopted by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), we are required to determine and disclose the ratio of the annual total compensation of our CEO to that of our global median employee.
To determine the median employee, we made a determination from our global employee population, excluding non-U.S. locations to the extent that the total employees excluded in these locations in aggregate did not exceed 5% of our total employee population at the time of the determination. We established a consistently applied compensation measure of annualized base pay, converted to U.S. dollars based on applicable exchange rates as of September 30, 2022. Our population2023 our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Annual Report on Form 10-K was evaluatedreported within the time periods specified by SEC rules and regulations, and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures.
Based on the above determination, the total compensation (using the same methodology as we use for our NEOs aspersons within SB/RH to disclose material information otherwise required to be set forth in SB/RH's periodic reports. There are inherent limitations to the Summary Compensation Tableeffectiveness of any system of disclosure controls and procedures, including the possibility of human error and circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.
50
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Beneficial Ownership Table
The following table sets forth information regarding beneficial ownershippreparation of our common stock as of January 1, 2023, by:
each person who is known by us to beneficially own more than 5% of the outstanding shares of our common stock (each, a “5% Stockholder”);
our NEOsfinancial statements for Fiscal 2022;
each of our directors; and
all directors and executive officers as a group.
Beneficial ownership is determinedexternal purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the rulesmaintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of SB/RH’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the SEC. Determinations as to the identity of 5% Stockholders is based upon filingsfinancial statements in accordance with the SEC and other publicly available information. Except as otherwise indicated, we believe, based on the information furnished or otherwise available to us, that each person or entity named in the table has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to applicable community property laws. The percentage of beneficial ownership set forth below is based upon 41,000,607 shares of common stock issued and outstanding as of the close of business on January 1, 2023. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, shares of common stock that are subject to vested options, as well as options and RSUs held by that person that are currently expected to vest within 60 days of January 1, 2023, are all deemed outstanding. These shares are not, however, deemed outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise noted below, the address of each beneficial owner listed in the table is c/o Spectrum Brands Holdings, Inc., 3001 Deming Way, Middleton, WI 53562.
Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percent of Outstanding Shares | ||||||
5% Stockholders | ||||||||
FMR LLC(1) | 4,920,419 | 12.0 | % | |||||
Vanguard Group Inc.(2) | 4,104,370 | 10.0 | % | |||||
American Century Investment Management, Inc.(4) | 2,144,372 | 5.2 | % | |||||
Our Directors and Named Executive Officers | ||||||||
Leslie L. Campbell | 2,295 | * | ||||||
Joan Chow | 1,854 | * | ||||||
Sherianne James | 9,996 | * | ||||||
Randal D. Lewis | 83,017 | * | ||||||
Rebeckah Long | 8,476 | * | ||||||
David M. Maura(5) | 738,942 | 1.8 | % | |||||
Gautam Patel | 5,974 | * | ||||||
Terry L. Polistina | 36,632 | * | ||||||
Hugh R. Rovit | 37,693 | * | ||||||
Jeremy W. Smeltser | 16,155 | * | ||||||
Ehsan Zargar(6) | 103,766 | * | ||||||
|
|
|
| |||||
All Directors and Executive Officers as a Group | 1,044,800 | 2.6 | % |
|
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|
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51
|
|
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, officers and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Based solely upon review of Forms 3, 4 and 5 (and amendments thereto) furnished to us during or in respect of Fiscal 2022 and written representations from certain reporting persons, we believe that all Section 16(a) filing requirements applicable to our directors, executive officers and 10% stockholders were satisfied in a timely manner during Fiscal 2022 with respect to the Company.
52
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Policies on Transactions with Related Persons
All of the Company’s executive officers, directors and employees are required to disclose to the Company’s General Counsel all transactions which involve any actual, potential or suspected activity or personal interest that creates or appears to create a conflict between the interests of the Company and the interests of their executive officers, directors or employees. In cases involving executive officers, directors or senior-level management, the Company’s General Counsel will investigate the proposed transaction for potential conflicts of interest and then refer the matter to the Company’s Audit Committee to make a full review and determination. In cases involving other employees, the Company’s General Counsel, in conjunction with the employee’s regional supervisor and the Company’s Director of Internal Audit, will review the proposed transaction. If they determine that no conflict of interest will result from engaging in the proposed transaction, then they will refer the matter to the Company’s CEO for final approval.
The Company’s legal department and financial accounting department monitor transactions for an evaluation and determination of potential related-person transactions that would need to be disclosed in the Company’s periodic reports or proxy materials under generally accepted accounting principles, and applicable SEC rulesthat receipts and regulations.
In addition, under our Corporate Governance Guidelines, our directorsexpenditures are prohibited from taking for themselves opportunities relatedbeing made only with proper authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of SB/RH’s assets that could have a material effect on the financial statements.
For more information on the Company’s policies and procedures for review and approval of related-person transactions, please see the Company’s Code of Ethics for the Principal Executive Officer and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer and other senior finance organization employees. The Code of Ethics for the Principal Executive Officer and Senior Financial Officers is publicly available on our website at www.spectrumbrands.com under “Investor Relations—Corporate Governance.” We intend to disclose amendments to, and, if applicable, waivers of, this code of ethics on that section of our website.
(in millions) | 2023 | 2022 | ||||||||||||
Audit Fees | $ | 5.6 | $ | 5.6 | ||||||||||
Audit-Related Fees | 2.4 | 5.1 | ||||||||||||
Tax Fees | — | — | ||||||||||||
All Other Fees | 0.4 | 0.3 | ||||||||||||
Total | $ | 8.4 | $ | 11.0 |
Page | |||||
Reports of Independent Registered Public Accounting Firm (PCAOB ID 185) | |||||
Spectrum Brands Holdings, Inc. Consolidated Financial Statements | |||||
SB/RH Holdings, LLC Consolidated Financial Statements | |||||
Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC Combined | |||||
(in millions) | 2023 | 2022 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 753.9 | $ | 243.7 | ||||||||||
Short term investments | 1,103.3 | — | ||||||||||||
Trade receivables, net | 477.1 | 247.4 | ||||||||||||
Other receivables | 84.5 | 95.7 | ||||||||||||
Inventories | 462.8 | 780.6 | ||||||||||||
Prepaid expenses and other current assets | 44.3 | 51.2 | ||||||||||||
Current assets of business held for sale | — | 1,816.7 | ||||||||||||
Total current assets | 2,925.9 | 3,235.3 | ||||||||||||
Property, plant and equipment, net | 275.1 | 263.8 | ||||||||||||
Operating lease assets | 110.8 | 82.5 | ||||||||||||
Deferred charges and other | 31.8 | 38.7 | ||||||||||||
Goodwill | 854.7 | 953.1 | ||||||||||||
Intangible assets, net | 1,060.1 | 1,202.2 | ||||||||||||
Total assets | $ | 5,258.4 | $ | 5,775.6 | ||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||
Current portion of long-term debt | $ | 8.6 | $ | 12.3 | ||||||||||
Accounts payable | 396.6 | 453.1 | ||||||||||||
Accrued wages and salaries | 46.1 | 28.4 | ||||||||||||
Accrued interest | 20.6 | 27.6 | ||||||||||||
Income tax payable | 114.5 | 15.5 | ||||||||||||
Other current liabilities | 178.4 | 187.5 | ||||||||||||
Current liabilities of business held for sale | — | 463.7 | ||||||||||||
Total current liabilities | 764.8 | 1,188.1 | ||||||||||||
Long-term debt, net of current portion | 1,546.9 | 3,144.5 | ||||||||||||
Long-term operating lease liabilities | 95.6 | 56.0 | ||||||||||||
Deferred income taxes | 174.8 | 60.1 | ||||||||||||
Other long-term liabilities | 158.0 | 57.8 | ||||||||||||
Total liabilities | 2,740.1 | 4,506.5 | ||||||||||||
Commitments and contingencies (Note 20) | ||||||||||||||
Shareholders' equity | ||||||||||||||
Common stock, $0.01 par value; 200.0 million shares authorized; 53.8 million and 53.8 million shares issued, respectively. | 0.5 | 0.5 | ||||||||||||
Additional paid-in capital | 1,920.8 | 2,032.5 | ||||||||||||
Accumulated earnings | 2,096.0 | 362.1 | ||||||||||||
Accumulated other comprehensive loss, net of tax | (249.4) | (303.1) | ||||||||||||
Treasury stock, 18.5 million and 13.0 million shares, respectively | (1,250.3) | (828.8) | ||||||||||||
Total shareholders' equity | 2,517.6 | 1,263.2 | ||||||||||||
Noncontrolling interest | 0.7 | 5.9 | ||||||||||||
Total equity | 2,518.3 | 1,269.1 | ||||||||||||
Total liabilities and equity | $ | 5,258.4 | $ | 5,775.6 |
(in millions, except per share) | 2023 | 2022 | 2021 | |||||||||||||||||
Net sales | $ | 2,918.8 | $ | 3,132.5 | $ | 2,998.1 | ||||||||||||||
Cost of goods sold | 1,994.5 | 2,142.1 | 1,963.5 | |||||||||||||||||
Gross profit | 924.3 | 990.4 | 1,034.6 | |||||||||||||||||
Selling | 544.7 | 597.6 | 518.5 | |||||||||||||||||
General and administrative | 332.4 | 371.4 | 389.2 | |||||||||||||||||
Research and development | 22.5 | 26.7 | 29.8 | |||||||||||||||||
Gain from remeasurement of contingent consideration liability | (1.5) | (28.5) | — | |||||||||||||||||
Impairment of goodwill | 111.1 | — | — | |||||||||||||||||
Impairment of intangible assets | 120.7 | — | — | |||||||||||||||||
Total operating expenses | 1,129.9 | 967.2 | 937.5 | |||||||||||||||||
Operating (loss) income | (205.6) | 23.2 | 97.1 | |||||||||||||||||
Interest expense | 127.0 | 99.4 | 116.5 | |||||||||||||||||
Interest income | (38.3) | (0.6) | (1.1) | |||||||||||||||||
Gain from debt repurchase | (7.9) | — | — | |||||||||||||||||
Other non-operating expense (income), net | 3.8 | 14.7 | (7.2) | |||||||||||||||||
Loss from continuing operations before income taxes | (290.2) | (90.3) | (11.1) | |||||||||||||||||
Income tax benefit | (56.5) | (13.3) | (26.4) | |||||||||||||||||
Net (loss) income from continuing operations | (233.7) | (77.0) | 15.3 | |||||||||||||||||
Income from discontinued operations, net of tax | 2,035.6 | 149.7 | 174.3 | |||||||||||||||||
Net income | 1,801.9 | 72.7 | 189.6 | |||||||||||||||||
Net income from continuing operations attributable to non-controlling interest | 0.1 | 0.2 | 0.2 | |||||||||||||||||
Net income (loss) from discontinued operations attributable to non-controlling interest | 0.3 | $ | 0.9 | $ | (0.2) | |||||||||||||||
Net income attributable to controlling interest | $ | 1,801.5 | $ | 71.6 | $ | 189.6 | ||||||||||||||
Amounts attributable to controlling interest | ||||||||||||||||||||
Net (loss) income from continuing operations attributable to controlling interest | $ | (233.8) | $ | (77.2) | $ | 15.1 | ||||||||||||||
Net income from discontinued operations attributable to controlling interest | 2,035.3 | 148.8 | 174.5 | |||||||||||||||||
Net income attributable to controlling interest | $ | 1,801.5 | $ | 71.6 | $ | 189.6 | ||||||||||||||
Earnings Per Share | ||||||||||||||||||||
Basic earnings per share from continuing operations | $ | (5.92) | $ | (1.89) | $ | 0.35 | ||||||||||||||
Basic earnings per share from discontinued operations | 51.57 | 3.64 | 4.09 | |||||||||||||||||
Basic earnings per share | $ | 45.65 | $ | 1.75 | $ | 4.44 | ||||||||||||||
Diluted earnings per share from continuing operations | $ | (5.92) | $ | (1.89) | $ | 0.35 | ||||||||||||||
Diluted earnings per share from discontinued operations | 51.57 | 3.64 | 4.04 | |||||||||||||||||
Diluted earnings per share | $ | 45.65 | $ | 1.75 | $ | 4.39 | ||||||||||||||
Dividend per share | $ | 1.68 | $ | 1.68 | $ | 1.68 | ||||||||||||||
Weighted Average Shares Outstanding | ||||||||||||||||||||
Basic | 39.5 | 40.9 | 42.7 | |||||||||||||||||
Diluted | 39.5 | 40.9 | 43.2 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Net income | $ | 1,801.9 | $ | 72.7 | $ | 189.6 | ||||||||||||||
Other comprehensive income | ||||||||||||||||||||
Foreign currency translation adjustment | ||||||||||||||||||||
Foreign currency translation gain (loss) | 69.0 | (147.8) | 26.0 | |||||||||||||||||
Unrealized (loss) gain on net investment hedge | (31.7) | 75.8 | 6.2 | |||||||||||||||||
Foreign currency translation adjustment before tax | 37.3 | (72.0) | 32.2 | |||||||||||||||||
Deferred tax effect | 7.0 | (20.0) | — | |||||||||||||||||
Net unrealized gain (loss) on foreign currency translation | 44.3 | (92.0) | 32.2 | |||||||||||||||||
Unrealized (loss) gain on derivative instruments | ||||||||||||||||||||
Unrealized (loss) gain on derivative instruments before reclassification | (35.3) | 30.7 | 0.1 | |||||||||||||||||
Net reclassification for loss (gain) to income from continuing operations | 12.2 | (20.2) | 9.2 | |||||||||||||||||
Net reclassification for loss (gain) to income from discontinued operations | 2.3 | (2.4) | 0.1 | |||||||||||||||||
Unrealized (loss) gain on derivative instruments after reclassification | (20.8) | 8.1 | 9.4 | |||||||||||||||||
Deferred tax effect | 5.4 | 2.3 | (6.6) | |||||||||||||||||
Net unrealized (loss) gain on derivative instruments | (15.4) | 10.4 | 2.8 | |||||||||||||||||
Defined benefit pension (loss) gain | ||||||||||||||||||||
Defined benefit pension (loss) gain before reclassification | (0.8) | 18.3 | 11.7 | |||||||||||||||||
Net reclassification for loss to income from continuing operations | 0.8 | 3.6 | 4.8 | |||||||||||||||||
Net reclassification for gain to income from discontinued operations | (0.1) | (0.1) | (0.1) | |||||||||||||||||
Defined benefit pension (loss) gain after reclassification | (0.1) | 21.8 | 16.4 | |||||||||||||||||
Deferred tax effect | (0.1) | (8.9) | (1.6) | |||||||||||||||||
Net defined benefit pension (loss) gain | (0.2) | 12.9 | 14.8 | |||||||||||||||||
Deconsolidation of discontinued operations and assets held for sale | 26.1 | — | — | |||||||||||||||||
Net change to derive comprehensive income for the periods | 54.8 | (68.7) | 49.8 | |||||||||||||||||
Comprehensive income | 1,856.7 | 4.0 | 239.4 | |||||||||||||||||
Comprehensive income (loss) from continuing operations attributable to non-controlling interest | 0.3 | (0.4) | — | |||||||||||||||||
Comprehensive (loss) income from discontinuing operations attributable to non-controlling interest | — | (0.5) | 0.4 | |||||||||||||||||
Deconsolidation of discontinued operations attributable to non-controlling interest | 0.8 | — | — | |||||||||||||||||
Comprehensive income attributable to controlling interest | $ | 1,855.6 | $ | 4.9 | $ | 239.0 |
Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Shareholders' Equity | Non- controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | 43.1 | $ | 0.5 | $ | 2,054.3 | $ | 243.9 | $ | (284.7) | $ | (606.5) | $ | 1,407.5 | $ | 8.3 | $ | 1,415.8 | |||||||||||||||||||||||||||||||||||||||
Net income from continuing operations | — | — | — | 15.1 | — | — | 15.1 | 0.2 | 15.3 | |||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | — | — | — | 174.5 | — | — | 174.5 | (0.2) | 174.3 | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 49.4 | — | 49.4 | 0.4 | 49.8 | |||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock repurchases | (1.6) | — | — | — | — | (125.8) | (125.8) | — | (125.8) | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock issued and related tax withholdings | 0.3 | — | (20.2) | — | — | 15.3 | (4.9) | — | (4.9) | |||||||||||||||||||||||||||||||||||||||||||||||
Share based compensation | — | — | 29.7 | — | — | — | 29.7 | — | 29.7 | |||||||||||||||||||||||||||||||||||||||||||||||
Dividend paid to common shareholders | — | — | — | (73.6) | — | — | (73.6) | — | (73.6) | |||||||||||||||||||||||||||||||||||||||||||||||
Dividend paid by subsidiary to NCI | — | — | — | — | — | — | — | (1.6) | (1.6) | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at September 30, 2021 | 41.8 | 0.5 | 2,063.8 | 359.9 | (235.3) | (717.0) | 1,471.9 | 7.1 | 1,479.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income from continuing operations | — | — | — | (77.2) | — | — | (77.2) | 0.2 | (77.0) | |||||||||||||||||||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | — | — | — | 148.8 | — | — | 148.8 | 0.9 | 149.7 | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (67.8) | — | (67.8) | (0.9) | (68.7) | |||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock repurchases | (1.4) | — | — | — | — | (134.0) | (134.0) | — | (134.0) | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock issued and related tax withholdings | 0.4 | — | (46.7) | — | — | 22.2 | (24.5) | — | (24.5) | |||||||||||||||||||||||||||||||||||||||||||||||
Share based compensation | — | — | 15.4 | — | — | — | 15.4 | — | 15.4 | |||||||||||||||||||||||||||||||||||||||||||||||
Dividend paid to common shareholders | — | — | — | (69.4) | — | — | (69.4) | — | (69.4) | |||||||||||||||||||||||||||||||||||||||||||||||
Dividend paid by subsidiary to NCI | — | — | — | — | — | — | — | (1.4) | (1.4) | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at September 30, 2022 | 40.8 | 0.5 | 2,032.5 | 362.1 | (303.1) | (828.8) | 1,263.2 | 5.9 | 1,269.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income from continuing operations | — | — | — | (233.8) | — | — | (233.8) | 0.1 | (233.7) | |||||||||||||||||||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | — | — | — | 2,035.3 | — | — | 2,035.3 | 0.3 | 2,035.6 | |||||||||||||||||||||||||||||||||||||||||||||||
Sale and deconsolidation of assets held for sale | — | — | — | — | 25.3 | — | 25.3 | (5.9) | 19.4 | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 28.4 | — | 28.4 | 0.3 | 28.7 | |||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock repurchases | (0.4) | — | — | — | — | (38.9) | (38.9) | — | (38.9) | |||||||||||||||||||||||||||||||||||||||||||||||
Accelerated share repurchase | (5.3) | — | (100.0) | — | — | (400.0) | (500.0) | — | (500.0) | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock issued and related tax withholdings | 0.2 | — | (30.3) | — | — | 17.4 | (12.9) | — | (12.9) | |||||||||||||||||||||||||||||||||||||||||||||||
Share based compensation | — | — | 18.6 | — | — | — | 18.6 | — | 18.6 | |||||||||||||||||||||||||||||||||||||||||||||||
Dividend paid to common shareholders | — | — | — | (67.6) | — | — | (67.6) | — | (67.6) | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at September 30, 2023 | 35.3 | $ | 0.5 | $ | 1,920.8 | $ | 2,096.0 | $ | (249.4) | $ | (1,250.3) | $ | 2,517.6 | $ | 0.7 | $ | 2,518.3 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 1,801.9 | $ | 72.7 | $ | 189.6 | ||||||||||||||
Income from discontinued operations, net of tax | 2,035.6 | 149.7 | 174.3 | |||||||||||||||||
Net (loss) income from continuing operations | (233.7) | (77.0) | 15.3 | |||||||||||||||||
Adjustments to reconcile net (loss) income to net cash from operating activities: | ||||||||||||||||||||
Depreciation | 48.9 | 49.0 | 51.9 | |||||||||||||||||
Amortization | 42.3 | 50.3 | 65.1 | |||||||||||||||||
Share based compensation | 17.2 | 10.2 | 28.9 | |||||||||||||||||
Write-off from impairment of goodwill | 111.1 | — | — | |||||||||||||||||
Write-off from impairment of intangible assets | 120.7 | — | — | |||||||||||||||||
Impairment of property plant and equipment and operating leases | 10.8 | — | — | |||||||||||||||||
Gain on sale of property plant and equipment | (2.7) | — | — | |||||||||||||||||
Gain on debt repurchase | (7.9) | — | — | |||||||||||||||||
Amortization of debt issuance costs and debt discount | 6.9 | 7.1 | 5.6 | |||||||||||||||||
Write-off of unamortized discount and debt issuance costs | 10.9 | — | 7.9 | |||||||||||||||||
Non-cash interest on short term investment | (11.3) | — | — | |||||||||||||||||
Gain from remeasurement of contingent consideration liability | (1.5) | (28.5) | — | |||||||||||||||||
Non-cash purchase accounting adjustments | 1.9 | 8.3 | 7.3 | |||||||||||||||||
Gain on equity investment | — | — | (6.9) | |||||||||||||||||
Deferred tax benefit | (182.8) | (44.6) | (64.4) | |||||||||||||||||
Net changes in operating assets and liabilities | ||||||||||||||||||||
Receivables | (224.2) | (12.2) | 65.9 | |||||||||||||||||
Inventories | 328.3 | (153.7) | (219.6) | |||||||||||||||||
Prepaid expenses and other current assets | 26.1 | (34.8) | (9.7) | |||||||||||||||||
Accounts payable and accrued liabilities | (154.5) | (15.0) | 116.0 | |||||||||||||||||
Income tax and other | 101.5 | 9.4 | 25.9 | |||||||||||||||||
Net cash provided (used) by operating activities from continuing operations | 8.0 | (231.5) | 89.2 | |||||||||||||||||
Net cash (used) provided by operating activities from discontinued operations | (417.7) | 177.7 | 199.2 | |||||||||||||||||
Net cash (used) provided by operating activities | (409.7) | (53.8) | 288.4 | |||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Purchases of property, plant and equipment | (59.0) | (64.0) | (43.6) | |||||||||||||||||
Proceeds from disposal of property, plant and equipment | 8.4 | 0.2 | 0.1 | |||||||||||||||||
Proceeds from sale of discontinued operations, net of cash | 4,334.7 | — | — | |||||||||||||||||
Business acquisitions, net of cash acquired | — | (272.1) | (429.9) | |||||||||||||||||
Purchase of short term investments | (1,092.0) | — | — | |||||||||||||||||
Proceeds from sale of equity investment | — | — | 73.1 | |||||||||||||||||
Other investing activity | (0.2) | — | (0.4) | |||||||||||||||||
Net cash provided (used) by investing activities from continuing operations | 3,191.9 | (335.9) | (400.7) | |||||||||||||||||
Net cash used by investing activities from discontinued operations | (11.8) | (23.9) | (22.8) | |||||||||||||||||
Net cash provided (used) by investing activities | 3,180.1 | (359.8) | (423.5) |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Payment of debt, including premium on extinguishment | $ | (1,646.8) | $ | (12.7) | $ | (891.2) | ||||||||||||||
Proceeds from issuance of debt | — | 740.0 | 899.0 | |||||||||||||||||
Payment of debt issuance costs | (2.3) | (7.6) | (12.6) | |||||||||||||||||
Treasury stock purchases | (34.7) | (134.0) | (125.8) | |||||||||||||||||
Accelerated share repurchase | (500.0) | — | — | |||||||||||||||||
Dividends paid to shareholders | (66.5) | (68.6) | (71.5) | |||||||||||||||||
Share based award tax withholding payments, net of proceeds upon vesting | (13.0) | (24.5) | (8.3) | |||||||||||||||||
Payment of contingent consideration | — | (1.9) | — | |||||||||||||||||
Other financing activities, net | — | — | 3.5 | |||||||||||||||||
Net cash (used) provided by financing activities from continuing operations | (2,263.3) | 490.7 | (206.9) | |||||||||||||||||
Net cash used by financing activities from discontinued operations | (0.8) | (3.1) | (3.0) | |||||||||||||||||
Net cash (used) provided by financing activities | (2,264.1) | 487.6 | (209.9) | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 3.7 | (20.1) | 1.3 | |||||||||||||||||
Net change in cash, cash equivalents and restricted cash | 510.0 | 53.9 | (343.7) | |||||||||||||||||
Cash, cash equivalents, and restricted cash, beginning of period | 243.9 | 190.0 | 533.7 | |||||||||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 753.9 | $ | 243.9 | $ | 190.0 | ||||||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Cash paid for interest associated with continued operations | $ | 123.1 | $ | 92.1 | $ | 86.4 | ||||||||||||||
Cash paid for interest associated with discontinued operations | $ | 45.3 | $ | 53.6 | $ | 50.0 | ||||||||||||||
Cash paid for taxes associated with continued operations | $ | 25.5 | $ | 32.6 | $ | 23.5 | ||||||||||||||
Cash paid for taxes associated with discontinued operations | $ | 449.2 | $ | 12.9 | $ | 11.5 | ||||||||||||||
Non cash investing activities | ||||||||||||||||||||
Acquisition of property, plant and equipment through capital leases | $ | 3.2 | $ | 1.4 | $ | 9.4 | ||||||||||||||
Non cash financing activities | ||||||||||||||||||||
Issuance of shares through stock compensation plan | $ | 32.6 | $ | 33.4 | $ | 17.9 |
(in millions) | 2023 | 2022 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 752.7 | $ | 242.4 | ||||||||||
Short term investments | 1,103.3 | — | ||||||||||||
Trade receivables, net | 477.1 | 247.4 | ||||||||||||
Other receivables | 174.6 | 183.1 | ||||||||||||
Inventories | 462.8 | 780.6 | ||||||||||||
Prepaid expenses and other current assets | 44.3 | 51.2 | ||||||||||||
Current assets of business held for sale | — | 1,816.7 | ||||||||||||
Total current assets | 3,014.8 | 3,321.4 | ||||||||||||
Property, plant and equipment, net | 275.1 | 263.8 | ||||||||||||
Operating lease assets | 110.8 | 82.5 | ||||||||||||
Deferred charges and other | 31.8 | 38.1 | ||||||||||||
Goodwill | 854.7 | 953.1 | ||||||||||||
Intangible assets, net | 1,060.1 | 1,202.2 | ||||||||||||
Total assets | $ | 5,347.3 | $ | 5,861.1 | ||||||||||
Liabilities and Shareholder's Equity | ||||||||||||||
Current portion of long-term debt | $ | 8.6 | $ | 12.3 | ||||||||||
Accounts payable | 396.7 | 453.3 | ||||||||||||
Accrued wages and salaries | 46.0 | 28.4 | ||||||||||||
Accrued interest | 20.6 | 27.6 | ||||||||||||
Income tax payable | 36.8 | 12.8 | ||||||||||||
Other current liabilities | 172.2 | 184.5 | ||||||||||||
Current liabilities of business held for sale | — | 463.7 | ||||||||||||
Total current liabilities | 680.9 | 1,182.6 | ||||||||||||
Long-term debt, net of current portion | 1,546.9 | 3,144.5 | ||||||||||||
Long-term operating lease liabilities | 95.6 | 56.0 | ||||||||||||
Deferred income taxes | 176.3 | 279.3 | ||||||||||||
Other long-term liabilities | 157.9 | 65.6 | ||||||||||||
Total liabilities | 2,657.6 | 4,728.0 | ||||||||||||
Commitments and contingencies (Note 20) | ||||||||||||||
Shareholder's equity | ||||||||||||||
Other capital | 2,168.9 | 2,164.6 | ||||||||||||
Accumulated earnings (deficit) | 767.8 | (736.0) | ||||||||||||
Accumulated other comprehensive loss, net of tax | (249.3) | (303.0) | ||||||||||||
Total shareholder's equity | 2,687.4 | 1,125.6 | ||||||||||||
Noncontrolling interest | 2.3 | 7.5 | ||||||||||||
Total equity | 2,689.7 | 1,133.1 | ||||||||||||
Total liabilities and equity | $ | 5,347.3 | $ | 5,861.1 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Net Sales | $ | 2,918.8 | $ | 3,132.5 | $ | 2,998.1 | ||||||||||||||
Cost of goods sold | 1,994.5 | 2,142.1 | 1,963.5 | |||||||||||||||||
Gross profit | 924.3 | 990.4 | 1,034.6 | |||||||||||||||||
Selling | 544.7 | 597.6 | 518.5 | |||||||||||||||||
General and administrative | 330.1 | 368.7 | 385.5 | |||||||||||||||||
Research and development | 22.5 | 26.7 | 29.8 | |||||||||||||||||
Gain from remeasurement of contingent consideration liability | (1.5) | (28.5) | — | |||||||||||||||||
Impairment of goodwill | 111.1 | — | — | |||||||||||||||||
Impairment of intangible assets | 120.7 | — | — | |||||||||||||||||
Total operating expenses | 1,127.6 | 964.5 | 933.8 | |||||||||||||||||
Operating (loss) income | (203.3) | 25.9 | 100.8 | |||||||||||||||||
Interest expense | 120.5 | 99.8 | 116.8 | |||||||||||||||||
Interest income | (38.3) | (0.6) | (0.2) | |||||||||||||||||
Gain on debt repurchase | (7.9) | — | — | |||||||||||||||||
Other non-operating expense (income), net | 3.8 | 14.6 | (8.1) | |||||||||||||||||
Loss from continuing operations before income taxes | (281.4) | (87.9) | (7.7) | |||||||||||||||||
Income tax benefit | (55.1) | (12.9) | (25.0) | |||||||||||||||||
Net (loss) income from continuing operations | (226.3) | (75.0) | 17.3 | |||||||||||||||||
Income from discontinued operations, net of tax | 2,035.6 | 149.7 | 174.3 | |||||||||||||||||
Net income | 1,809.3 | 74.7 | 191.6 | |||||||||||||||||
Net income from continuing operations attributable to non-controlling interest | 0.1 | 0.2 | 0.2 | |||||||||||||||||
Net income (loss) from discontinued operations attributable to non-controlling interest | 0.3 | 0.9 | (0.2) | |||||||||||||||||
Net income attributable to controlling interest | $ | 1,808.9 | $ | 73.6 | $ | 191.6 | ||||||||||||||
Amounts attributable to controlling interest | ||||||||||||||||||||
Net (loss) income from continuing operations attributable to controlling interest | $ | (226.4) | $ | (75.2) | $ | 17.1 | ||||||||||||||
Net income from discontinued operations attributable to controlling interest | 2,035.3 | 148.8 | 174.5 | |||||||||||||||||
Net income attributable to controlling interest | $ | 1,808.9 | $ | 73.6 | $ | 191.6 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Net income | $ | 1,809.3 | $ | 74.7 | $ | 191.6 | ||||||||||||||
Other comprehensive income | ||||||||||||||||||||
Foreign currency translation adjustment | ||||||||||||||||||||
Foreign currency translation gain (loss) | 69.0 | (147.8) | 26.0 | |||||||||||||||||
Unrealized (loss) gain on net investment hedge | (31.7) | 75.8 | 6.2 | |||||||||||||||||
Foreign currency translation adjustment before tax | 37.3 | (72.0) | 32.2 | |||||||||||||||||
Deferred tax effect | 7.0 | (20.0) | — | |||||||||||||||||
Net unrealized gain (loss) on foreign currency translation | 44.3 | (92.0) | 32.2 | |||||||||||||||||
Unrealized (loss) gain on derivative instruments | ||||||||||||||||||||
Unrealized (loss) gain on derivative instruments before reclassification | (35.3) | 30.7 | 0.1 | |||||||||||||||||
Net reclassification for loss (gain) to income from continuing operations | 12.2 | (20.2) | 9.2 | |||||||||||||||||
Net reclassification for loss (gain) to income from discontinued operations | 2.3 | (2.4) | 0.1 | |||||||||||||||||
Unrealized (loss) gain on derivative instruments after reclassification | (20.8) | 8.1 | 9.4 | |||||||||||||||||
Deferred tax effect | 5.4 | 2.3 | (6.6) | |||||||||||||||||
Net unrealized (loss) gain on derivative instruments | (15.4) | 10.4 | 2.8 | |||||||||||||||||
Defined benefit pension (loss) gain | ||||||||||||||||||||
Defined benefit pension (loss) gain before reclassification | (0.8) | 18.3 | 11.7 | |||||||||||||||||
Net reclassification for loss to income from continuing operations | 0.8 | 3.6 | 4.8 | |||||||||||||||||
Net reclassification for gain to income from discontinued operations | (0.1) | (0.1) | (0.1) | |||||||||||||||||
Defined benefit pension (loss) gain after reclassification | (0.1) | 21.8 | 16.4 | |||||||||||||||||
Deferred tax effect | (0.1) | (8.9) | (1.6) | |||||||||||||||||
Net defined benefit pension (loss) gain | (0.2) | 12.9 | 14.8 | |||||||||||||||||
Deconsolidation of discontinued operations and assets held for sale | 26.1 | — | — | |||||||||||||||||
Net change to derive comprehensive income for the period | 54.8 | (68.7) | 49.8 | |||||||||||||||||
Comprehensive income | 1,864.1 | 6.0 | 241.4 | |||||||||||||||||
Comprehensive income (loss) from continuing operations attributable to non-controlling interest | 0.3 | (0.4) | — | |||||||||||||||||
Comprehensive (loss) income from discontinuing operations attributable to non-controlling interest | — | (0.5) | 0.4 | |||||||||||||||||
Deconsolidation of discontinued operations attributable to non-controlling interest | 0.8 | — | — | |||||||||||||||||
Comprehensive income attributable to controlling interest | $ | 1,863.0 | $ | 6.9 | $ | 241.0 |
(in millions) | Other Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Shareholder's Equity | Non- controlling Interest | Total Equity | ||||||||||||||||||||||||||||||||
Balances at September 30, 2020 | $ | 2,154.1 | $ | (614.2) | $ | (284.6) | $ | 1,255.3 | $ | 9.9 | $ | 1,265.2 | ||||||||||||||||||||||||||
Net income from continuing operations | — | 17.1 | — | 17.1 | 0.2 | 17.3 | ||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | — | 174.5 | — | 174.5 | (0.2) | 174.3 | ||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | 49.4 | 49.4 | 0.4 | 49.8 | ||||||||||||||||||||||||||||||||
Restricted stock issued and related tax withholdings | (7.3) | — | — | (7.3) | — | (7.3) | ||||||||||||||||||||||||||||||||
Share based compensation | 28.0 | — | — | 28.0 | — | 28.0 | ||||||||||||||||||||||||||||||||
Dividends paid to parent | — | (192.3) | — | (192.3) | — | (192.3) | ||||||||||||||||||||||||||||||||
Dividend paid by subsidiary to NCI | — | — | — | — | (1.6) | (1.6) | ||||||||||||||||||||||||||||||||
Balances at September 30, 2021 | 2,174.8 | (614.9) | (235.2) | 1,324.7 | 8.7 | 1,333.4 | ||||||||||||||||||||||||||||||||
Net (loss) income from continuing operations | — | (75.2) | — | (75.2) | 0.2 | (75.0) | ||||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | — | 148.8 | — | 148.8 | 0.9 | 149.7 | ||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | (67.8) | (67.8) | (0.9) | (68.7) | ||||||||||||||||||||||||||||||||
Restricted stock issued and related tax withholdings | (24.5) | — | — | (24.5) | — | (24.5) | ||||||||||||||||||||||||||||||||
Share based compensation | 14.3 | — | — | 14.3 | — | 14.3 | ||||||||||||||||||||||||||||||||
Dividends paid to parent | — | (194.7) | — | (194.7) | — | (194.7) | ||||||||||||||||||||||||||||||||
Dividend paid by subsidiary to NCI | — | — | — | — | (1.4) | (1.4) | ||||||||||||||||||||||||||||||||
Balances at September 30, 2022 | 2,164.6 | (736.0) | (303.0) | 1,125.6 | 7.5 | 1,133.1 | ||||||||||||||||||||||||||||||||
Net (loss) income from continuing operations | — | (226.4) | — | (226.4) | 0.1 | (226.3) | ||||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | — | 2,035.3 | — | 2,035.3 | 0.3 | 2,035.6 | ||||||||||||||||||||||||||||||||
Sale and deconsolidation of discontinued operations | — | — | 25.3 | 25.3 | (5.9) | 19.4 | ||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | 28.4 | 28.4 | 0.3 | 28.7 | ||||||||||||||||||||||||||||||||
Restricted stock issued and related tax withholdings | (12.9) | — | — | (12.9) | — | (12.9) | ||||||||||||||||||||||||||||||||
Share based compensation | 17.2 | — | — | 17.2 | — | 17.2 | ||||||||||||||||||||||||||||||||
Dividends paid to parent | — | (305.1) | — | (305.1) | — | (305.1) | ||||||||||||||||||||||||||||||||
Balances at September 30, 2023 | $ | 2,168.9 | $ | 767.8 | $ | (249.3) | $ | 2,687.4 | $ | 2.3 | $ | 2,689.7 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 1,809.3 | $ | 74.7 | $ | 191.6 | ||||||||||||||
Income from discontinued operations, net of tax | 2,035.6 | 149.7 | 174.3 | |||||||||||||||||
Net (loss) income from continuing operations | (226.3) | (75.0) | 17.3 | |||||||||||||||||
Adjustments to reconcile net (loss) income to net cash from operating activities: | ||||||||||||||||||||
Depreciation | 48.9 | 49.0 | 51.9 | |||||||||||||||||
Amortization | 42.3 | 50.3 | 65.1 | |||||||||||||||||
Share based compensation | 15.7 | 9.1 | 27.2 | |||||||||||||||||
Write-off from impairment of goodwill | 111.1 | — | — | |||||||||||||||||
Write-off from impairment of intangible assets | 120.7 | — | — | |||||||||||||||||
Impairment of property, plant and equipment and operating lease assets | 10.8 | — | — | |||||||||||||||||
Gain on sale of property, plant and equipment | (2.7) | — | — | |||||||||||||||||
Gain from repurchase of debt | (7.9) | — | — | |||||||||||||||||
Amortization of debt issuance costs and debt discount | 6.9 | 7.1 | 5.6 | |||||||||||||||||
Write-off of unamortized discount and debt issuance costs | 10.9 | — | 7.9 | |||||||||||||||||
Non-cash interest on short-term investment | (11.3) | — | — | |||||||||||||||||
Gain from remeasurement of contingent consideration liability | (1.5) | (28.5) | — | |||||||||||||||||
Non-cash purchase accounting adjustments | 1.9 | 8.3 | 7.3 | |||||||||||||||||
Gain on equity investment | — | — | (6.9) | |||||||||||||||||
Deferred tax benefit | (181.4) | (44.2) | (63.0) | |||||||||||||||||
Net changes in operating assets and liabilities | ||||||||||||||||||||
Receivables | (239.9) | (41.4) | 57.3 | |||||||||||||||||
Inventories | 328.3 | (153.7) | (219.6) | |||||||||||||||||
Prepaid expenses and other | 26.1 | (34.8) | (9.6) | |||||||||||||||||
Accounts payable and accrued liabilities | (150.7) | (19.6) | 115.0 | |||||||||||||||||
Income tax and other | (193.3) | 9.9 | 26.2 | |||||||||||||||||
Net cash (used) provided by operating activities from continuing operations | (291.4) | (263.5) | 81.7 | |||||||||||||||||
Net cash provided by operating activities from discontinued operations | (419.5) | 177.7 | 199.2 | |||||||||||||||||
Net cash (used) provided by operating activities | (710.9) | (85.8) | 280.9 | |||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Purchases of property, plant and equipment | (59.0) | (64.0) | (43.6) | |||||||||||||||||
Proceeds from disposal of property, plant and equipment | 8.4 | 0.2 | 0.1 | |||||||||||||||||
Proceeds from sale of discontinued operations, net of cash | 4,334.7 | — | — | |||||||||||||||||
Business acquisitions, net of cash acquired | — | (272.1) | (429.9) | |||||||||||||||||
Purchase of short-term investments | (1,092.0) | — | — | |||||||||||||||||
Proceeds from sale of equity investment | — | — | 73.1 | |||||||||||||||||
Other investing activities | (0.2) | — | (0.4) | |||||||||||||||||
Net cash provided (used) by investing activities from continuing operations | 3,191.9 | (335.9) | (400.7) | |||||||||||||||||
Net cash used by investing activities from discontinued operations | (11.8) | (23.9) | (22.8) | |||||||||||||||||
Net cash provided (used) by investing activities | 3,180.1 | (359.8) | (423.5) |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Payment of debt, including premium on extinguishment | $ | (1,646.8) | $ | (12.7) | $ | (891.2) | ||||||||||||||
Payment of intercompany debt | (7.8) | — | — | |||||||||||||||||
Proceeds from issuance of debt | — | 740.0 | 899.0 | |||||||||||||||||
Payment of debt issuance costs | (2.3) | (7.6) | (12.6) | |||||||||||||||||
Payment of cash dividends to parent | (305.1) | (194.7) | (192.3) | |||||||||||||||||
Payment of contingent consideration | — | (1.9) | — | |||||||||||||||||
Net cash (used) provided by financing activities from continuing operations | (1,962.0) | 523.1 | (197.1) | |||||||||||||||||
Net cash used by financing activities from discontinued operations | (0.8) | (3.1) | (3.0) | |||||||||||||||||
Net cash (used) provided by financing activities | (1,962.8) | 520.0 | (200.1) | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 3.7 | (20.1) | 1.3 | |||||||||||||||||
Net change in cash, cash equivalents and restricted cash | 510.1 | 54.3 | (341.4) | |||||||||||||||||
Cash, cash equivalents, and restricted cash, beginning of period | 242.6 | 188.3 | 529.7 | |||||||||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 752.7 | $ | 242.6 | $ | 188.3 | ||||||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Cash paid for interest associated with continued operations | $ | 123.1 | $ | 92.1 | $ | 86.4 | ||||||||||||||
Cash paid for interest associated with discontinued operations | $ | 45.3 | $ | 53.6 | $ | 50.0 | ||||||||||||||
Cash paid for taxes associated with continued operations | $ | 25.5 | $ | 32.6 | $ | 23.5 | ||||||||||||||
Cash paid for taxes associated with discontinued operations | $ | 449.2 | $ | 12.9 | $ | 11.5 | ||||||||||||||
Non cash investing activities | ||||||||||||||||||||
Acquisition of property, plant and equipment through capital leases | $ | 3.2 | $ | 1.4 | $ | 9.4 |
Segment | Products | Brands | ||||||||||||
GPC | Companion Animal: Dog and cat chews, treats, wet and dry foods. Dog and cat clean-up, behavioral training aides, health and grooming products. Indoor bird and other small animal food and care products. Aquatics: Consumer and commercial aquarium kits, stand-alone tanks; aquatics equipment such as filtration systems, heaters and pumps; and aquatics consumables such as fish food, water management and care. | Companion Animal: Good'n'Fun®, DreamBone®, GOOD BOY®, SmartBones®, IAMS® (Europe only), EUKANUBA® (Europe only), Nature's Miracle®, FURminator®, Dingo®, 8IN1® (8-in-1), Meowee!®, and Wild Harvest™. Aquatics: Tetra®, Marineland®, Instant Ocean®, GloFish®, and OmegaSea®. | ||||||||||||
H&G | Household: Household pest control solutions such as spider and scorpion killers; ant and roach killers; flying insect killers; insect foggers; wasp and hornet killers; and bedbug, flea and tick control products. Controls: Outdoor insect and weed control solutions, and animal repellents such as aerosols, granules, and ready-to-use sprays or hose-end ready-to-sprays. Repellents: Personal use pesticides and insect repellent products, including aerosols, lotions, pump sprays and wipes, yard sprays and citronella candles. Cleaning: Household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes and markers. | Household: Hot Shot®, Black Flag®, Real-Kill®, Ultra Kill®, The Ant Trap® (TAT), and Rid-A-Bug®. Controls: Spectracide®, Garden Safe®, Liquid Fence®, and EcoLogic®. Repellents: Cutter® and Repel®. Cleaning: Rejuvenate® | ||||||||||||
HPC | Home Appliances: Small kitchen appliances including toaster ovens, coffeemakers, slow cookers, air fryers, blenders, hand mixers, grills, food processors, juicers, toasters, irons, kettles, and bread makers, cookware, and cookbooks. Personal Care: Hair dryers, flat irons and straighteners, rotary and foil electric shavers, personal groomers, mustache and beard trimmers, body groomers, nose and ear trimmers, women's shavers, haircut kits and intense pulsed light hair removal systems. | Home Appliances: Black+Decker®, Russell Hobbs®, George Foreman®, PowerXL®, Emeril Legasse®, Copper Chef ®, Toastmaster®, Juiceman®, Farberware®, and Breadman® Personal Care: Remington® |
Asset Type | Range | |||||||
Buildings and improvements | 20 - 40 years | |||||||
Machinery, tooling and equipment | 2 - 15 years | |||||||
Computer software | 3 - 5 years |
Asset Type | Range | |||||||||||||
Customer relationships | 9 - 20 years | |||||||||||||
Technology assets | 8 - 18 years | |||||||||||||
Tradenames | 5 - 12 years |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Income from discontinued operations before income taxes - HHI | $ | 136.9 | $ | 253.3 | $ | 288.2 | ||||||||||||||
Gain on sale of discontinued operations before income taxes – HHI | 2,824.2 | — | — | |||||||||||||||||
Loss from discontinued operations before income taxes - Other | (2.4) | (3.8) | (7.3) | |||||||||||||||||
Interest on corporate debt allocated to discontinued operations | 49.4 | 46.4 | 44.5 | |||||||||||||||||
Income from discontinued operations before income taxes | 2,909.3 | 203.1 | 236.4 | |||||||||||||||||
Income tax expense from discontinued operations | 873.7 | 53.4 | 62.1 | |||||||||||||||||
Income from discontinued operations, net of tax | 2,035.6 | 149.7 | 174.3 | |||||||||||||||||
Income (loss) from discontinued operations, net of tax attributable to noncontrolling interest | 0.3 | 0.9 | (0.2) | |||||||||||||||||
Income from discontinued operations, net of tax attributable to controlling interest | $ | 2,035.3 | $ | 148.8 | $ | 174.5 |
(in millions) | 2022 | |||||||||||||
Assets | ||||||||||||||
$ | 135.5 | |||||||||||||
Other | 6.7 | |||||||||||||
Inventories | 327.1 | |||||||||||||
Prepaid expenses and other current assets | 33.1 | |||||||||||||
Property, plant and equipment, net | 166.6 | |||||||||||||
Operating lease assets | 63.6 | |||||||||||||
Deferred charges and other | 11.7 | |||||||||||||
Goodwill | 698.6 | |||||||||||||
Intangible assets, net | 373.8 | |||||||||||||
Total assets of business held for sale | $ | 1,816.7 | ||||||||||||
Liabilities | ||||||||||||||
Current portion of long-term debt | $ | 1.4 | ||||||||||||
Accounts payable | 224.7 | |||||||||||||
Accrued wages and salaries | 32.7 | |||||||||||||
Other current liabilities | 79.9 | |||||||||||||
Long-term debt, net of current portion | 54.6 | |||||||||||||
Long-term operating lease liabilities | 46.9 | |||||||||||||
Deferred income taxes | 10.1 | |||||||||||||
Other long-term liabilities | 13.4 | |||||||||||||
Total liabilities of business held for sale | $ | 463.7 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Net sales | $ | 1,042.5 | $ | 1,652.3 | $ | 1,615.8 | ||||||||||||||
Cost of goods sold | 701.6 | 1,096.3 | 1,025.3 | |||||||||||||||||
Gross profit | 340.9 | 556.0 | 590.5 | |||||||||||||||||
Operating expenses | 199.4 | 298.0 | 293.1 | |||||||||||||||||
Operating income | 141.5 | 258.0 | 297.4 | |||||||||||||||||
Interest expense | 2.4 | 3.4 | 3.4 | |||||||||||||||||
Other non-operating expense, net | 2.2 | 1.3 | 5.8 | |||||||||||||||||
Income from discontinued operations before income taxes | $ | 136.9 | $ | 253.3 | $ | 288.2 | ||||||||||||||
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Depreciation and amortization | $ | — | $ | — | $ | 31.1 | ||||||||||||||
Share based compensation | $ | 1.5 | $ | 5.3 | $ | 0.8 | ||||||||||||||
Purchases of property, plant and equipment | $ | 11.9 | $ | 23.9 | $ | 22.8 |
(in millions) | Purchase Price | |||||||
Cash paid at closing | ||||||||
$ | 314.6 | |||||||
Cash received for purchase price settlement | (42.2) | |||||||
Contingent consideration | 30.0 | |||||||
Total purchase price | $ | 302.4 |
53
EXHIBIT INDEX
(in millions) | Purchase Price Allocation | |||||||
Cash and cash equivalents | $ | 0.3 | ||||||
Trade receivables, net | 45.7 | |||||||
Other receivables | 0.4 | |||||||
Inventories | 102.0 | |||||||
Prepaid expenses and other current assets | 4.4 | |||||||
Property, plant and equipment, net | 0.4 | |||||||
Operating lease assets | 23.3 | |||||||
Goodwill | 111.1 | |||||||
Intangible assets, net | 95.0 | |||||||
Deferred charges and other | 4.8 | |||||||
Accounts payable | (52.5) | |||||||
Accrued wages and salaries | (0.6) | |||||||
Other current liabilities | (20.8) | |||||||
Long-term operating lease liabilities | (11.1) | |||||||
Net assets acquired | $ | 302.4 |
(in millions) | Carrying Amount | Weighted Average Useful Life (Years) | ||||||||||||
Tradename | $ | 66.0 | Indefinite | |||||||||||
Customer relationships | 29.0 | 13 years | ||||||||||||
Total intangibles acquired | $ | 95.0 |
(in millions) | 2022 | 2021 | ||||||||||||||||||||||||
Proforma net sales | $ | 3,332.6 | $ | 3,588.1 | ||||||||||||||||||||||
Proforma net (loss) income from continuing operations | (80.4) | 51.4 | ||||||||||||||||||||||||
Proforma net income | 69.3 | 225.7 | ||||||||||||||||||||||||
Proforma diluted earnings from continuing operations per share | (1.96) | 1.19 | ||||||||||||||||||||||||
Proforma diluted earnings per share | 1.69 | 5.22 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Fiscal 2023 restructuring | $ | 7.4 | $ | — | $ | — | ||||||||||||||
Fiscal 2022 restructuring | 0.4 | 9.8 | — | |||||||||||||||||
Russia dissolution | 0.8 | 0.6 | — | |||||||||||||||||
GPC distribution center transition | — | 30.4 | 11.5 | |||||||||||||||||
Global productivity improvement program | — | 5.1 | 21.2 | |||||||||||||||||
Other project costs | 1.3 | 13.9 | 7.6 | |||||||||||||||||
Total restructuring and related charges | $ | 9.9 | $ | 59.8 | $ | 40.3 | ||||||||||||||
Reported as: | ||||||||||||||||||||
Cost of goods sold | $ | 0.5 | $ | 1.2 | $ | 1.9 | ||||||||||||||
Selling expense | — | 30.4 | 11.5 | |||||||||||||||||
General and administrative expense | 9.4 | 28.2 | 26.9 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
GPC | $ | 4.0 | $ | 37.9 | $ | 15.2 | ||||||||||||||
H&G | 0.2 | 0.7 | 0.4 | |||||||||||||||||
HPC | 5.2 | 10.0 | 9.1 | |||||||||||||||||
Corporate | 0.5 | 11.2 | 15.6 | |||||||||||||||||
Total restructuring charges | $ | 9.9 | $ | 59.8 | $ | 40.3 |
(in millions) | Termination Benefits | Other Costs | Total | |||||||||||||||||
For the year ended September 30, 2023 | $ | 8.3 | $ | 1.6 | $ | 9.9 | ||||||||||||||
For the year ended September 30, 2022 | 12.0 | 47.8 | 59.8 | |||||||||||||||||
For the year ended September 30, 2021 | 7.7 | 32.6 | 40.3 | |||||||||||||||||
(in millions) | Termination Benefits | Other Costs | Total | |||||||||||||||||
Accrual balance at September 30, 2021 | $ | 4.6 | $ | 5.6 | $ | 10.2 | ||||||||||||||
Provisions | 8.0 | (4.3) | 3.7 | |||||||||||||||||
Cash expenditures | (6.3) | (0.7) | (7.0) | |||||||||||||||||
Non-cash items | (2.6) | (0.3) | (2.9) | |||||||||||||||||
Accrual balance at September 30, 2022 | $ | 3.7 | $ | 0.3 | $ | 4.0 | ||||||||||||||
Provisions | 7.6 | 0.6 | 8.2 | |||||||||||||||||
Cash expenditures | (8.1) | (0.3) | (8.4) | |||||||||||||||||
Non-cash items | 0.2 | (0.1) | 0.1 | |||||||||||||||||
Accrual balance at September 30, 2023 | $ | 3.4 | $ | 0.5 | $ | 3.9 |
September 30, 2023 | ||||||||||||||||||||||||||
(in millions) | GPC | H&G | HPC | Total | ||||||||||||||||||||||
Product Sales | ||||||||||||||||||||||||||
NA | $ | 710.7 | $ | 527.1 | $ | 514.4 | $ | 1,752.2 | ||||||||||||||||||
EMEA | 361.3 | — | 465.0 | 826.3 | ||||||||||||||||||||||
LATAM | 18.0 | 7.3 | 181.5 | 206.8 | ||||||||||||||||||||||
APAC | 33.3 | — | 73.3 | 106.6 | ||||||||||||||||||||||
Licensing | 10.0 | 2.1 | 7.8 | 19.9 | ||||||||||||||||||||||
Other | 5.7 | — | 1.3 | 7.0 | ||||||||||||||||||||||
Total Revenue | $ | 1,139.0 | $ | 536.5 | $ | 1,243.3 | $ | 2,918.8 |
September 30, 2022 | ||||||||||||||||||||||||||
(in millions) | GPC | H&G | HPC | Total | ||||||||||||||||||||||
Product Sales | ||||||||||||||||||||||||||
NA | $ | 749.8 | $ | 576.8 | $ | 609.7 | $ | 1,936.3 | ||||||||||||||||||
EMEA | 353.6 | — | 460.7 | 814.3 | ||||||||||||||||||||||
LATAM | 19.3 | 8.0 | 216.1 | 243.4 | ||||||||||||||||||||||
APAC | 36.5 | 0.1 | 71.9 | 108.5 | ||||||||||||||||||||||
Licensing | 9.9 | 2.2 | 10.3 | 22.4 | ||||||||||||||||||||||
Other | 6.2 | — | 1.4 | 7.6 | ||||||||||||||||||||||
Total Revenue | $ | 1,175.3 | $ | 587.1 | $ | 1,370.1 | $ | 3,132.5 |
September 30, 2021 | ||||||||||||||||||||||||||
(in millions) | GPC | H&G | HPC | Total | ||||||||||||||||||||||
Product Sales | ||||||||||||||||||||||||||
NA | $ | 699.9 | $ | 598.6 | $ | 493.5 | $ | 1,792.0 | ||||||||||||||||||
EMEA | 359.8 | — | 512.1 | 871.9 | ||||||||||||||||||||||
LATAM | 15.8 | 7.0 | 170.6 | 193.4 | ||||||||||||||||||||||
APAC | 38.9 | — | 72.7 | 111.6 | ||||||||||||||||||||||
Licensing | 9.8 | 2.5 | 11.2 | 23.5 | ||||||||||||||||||||||
Other | 5.7 | — | — | 5.7 | ||||||||||||||||||||||
Total Revenue | $ | 1,129.9 | $ | 608.1 | $ | 1,260.1 | $ | 2,998.1 |
(in millions) | Beginning Balance | Charged to Profit & Loss | Deductions | Other Adjustments | Ending Balance | |||||||||||||||||||||||||||
September 30, 2023 | $ | 15.5 | $ | 8.7 | $ | (11.2) | $ | (0.2) | $ | 12.8 | ||||||||||||||||||||||
September 30, 2022 | 11.8 | 12.4 | (19.8) | 11.1 | 15.5 | |||||||||||||||||||||||||||
September 30, 2021 | 12.8 | 1.5 | (2.9) | 0.4 | 11.8 |
September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Fair Value | Carrying Amount | Level 1 | Level 2 | Level 3 | Fair Value | Carrying Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Assets | $ | — | $ | 3.3 | $ | — | $ | 3.3 | $ | 3.3 | $ | — | $ | 22.2 | $ | — | $ | 22.2 | $ | 22.2 | ||||||||||||||||||||||||||||||||||||||||||
Derivative Liabilities | — | 9.0 | — | 9.0 | 9.0 | — | 6.0 | — | 6.0 | 6.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | — | 1,418.6 | — | 1,418.6 | 1,555.5 | — | 2,815.9 | — | 2,815.9 | 3,156.8 |
(in millions) | Beginning Balance | Charged to Profit & Loss | Deductions | Other Adjustments | Ending Balance | |||||||||||||||||||||||||||
September 30, 2023 | $ | 7.3 | $ | 5.0 | $ | (1.4) | $ | (3.2) | $ | 7.7 | ||||||||||||||||||||||
September 30, 2022 | 6.7 | 4.2 | (4.9) | 1.3 | 7.3 | |||||||||||||||||||||||||||
September 30, 2021 | 5.3 | 1.9 | (0.4) | (0.1) | 6.7 |
(in millions) | 2023 | 2022 | ||||||||||||
Raw materials | $ | 55.8 | $ | 72.3 | ||||||||||
Work-in-process | 6.2 | 10.5 | ||||||||||||
Finished goods | 400.8 | 697.8 | ||||||||||||
Inventories | $ | 462.8 | $ | 780.6 |
(in millions) | 2023 | 2022 | ||||||||||||
Land, buildings and improvements | $ | 83.4 | $ | 75.7 | ||||||||||
Machinery, tooling and equipment | 330.1 | 312.4 | ||||||||||||
Computer software | 136.2 | 81.7 | ||||||||||||
Finance leases | 136.9 | 139.8 | ||||||||||||
Construction in progress | 18.1 | 54.7 | ||||||||||||
Property, plant and equipment | $ | 704.7 | $ | 664.3 | ||||||||||
Accumulated depreciation | (429.6) | (400.5) | ||||||||||||
Property, plant and equipment, net | $ | 275.1 | $ | 263.8 |
(in millions) | GPC | H&G | HPC | Total | ||||||||||||||||||||||||||||||||||
As of September 30, 2021 | $ | 524.6 | $ | 342.6 | $ | — | $ | 867.2 | ||||||||||||||||||||||||||||||
Tristar Business acquisition (Note 4) | — | — | 108.1 | 108.1 | ||||||||||||||||||||||||||||||||||
Foreign currency impact | (22.2) | — | — | (22.2) | ||||||||||||||||||||||||||||||||||
As of September 30, 2022 | $ | 502.4 | $ | 342.6 | $ | 108.1 | $ | 953.1 | ||||||||||||||||||||||||||||||
Impairment | — | — | (111.1) | (111.1) | ||||||||||||||||||||||||||||||||||
Tristar Business acquisition adjustment (Note 4) | — | — | 3.0 | 3.0 | ||||||||||||||||||||||||||||||||||
Foreign currency impact | 9.7 | — | — | 9.7 | ||||||||||||||||||||||||||||||||||
As of September 30, 2023 | $ | 512.1 | $ | 342.6 | $ | — | $ | 854.7 | ||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
(in millions) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||||
Amortizable intangible assets | ||||||||||||||||||||||||||||||||||||||
Customer relationships | $ | 635.0 | $ | (412.9) | $ | 222.1 | $ | 627.8 | $ | (373.9) | $ | 253.9 | ||||||||||||||||||||||||||
Technology assets | 75.3 | (35.9) | 39.4 | 75.3 | (30.8) | 44.5 | ||||||||||||||||||||||||||||||||
Tradenames | 27.6 | (7.4) | 20.2 | 10.6 | (5.1) | 5.5 | ||||||||||||||||||||||||||||||||
Total amortizable intangible assets | 737.9 | (456.2) | 281.7 | 713.7 | (409.8) | 303.9 | ||||||||||||||||||||||||||||||||
Indefinite-lived intangible assets - tradenames | 778.4 | — | 778.4 | 898.3 | — | 898.3 | ||||||||||||||||||||||||||||||||
Total intangible assets | $ | 1,516.3 | $ | (456.2) | $ | 1,060.1 | $ | 1,612.0 | $ | (409.8) | $ | 1,202.2 |
(in millions) | Amortization | |||||||
2024 | $ | 43.2 | ||||||
2025 | 41.1 | |||||||
2026 | 39.5 | |||||||
2027 | 39.5 | |||||||
2028 | 37.8 | |||||||
2023 | 2022 | |||||||||||||||||||||||||
(in millions) | Amount | Rate | Amount | Rate | ||||||||||||||||||||||
Spectrum Brands, Inc. | ||||||||||||||||||||||||||
Revolver Facility, variable rate, expiring June 30, 2025 | $ | — | — | % | $ | 740.0 | 5.7 | % | ||||||||||||||||||
Term Loan Facility, variable rate, due March 3, 2028 | — | — | % | 394.0 | 5.2 | % | ||||||||||||||||||||
5.75% Notes, due July 15, 2025 | — | — | % | 450.0 | 5.8 | % | ||||||||||||||||||||
4.00% Notes, due October 1, 2026 | 448.8 | 4.0 | % | 417.1 | 4.0 | % | ||||||||||||||||||||
5.00% Notes, due October 1, 2029 | 297.2 | 5.0 | % | 300.0 | 5.0 | % | ||||||||||||||||||||
5.50% Notes, due July 15, 2030 | 288.5 | 5.5 | % | 300.0 | 5.5 | % | ||||||||||||||||||||
3.875% Notes, due March 15, 2031 | 453.0 | 3.9 | % | 500.0 | 3.9 | % | ||||||||||||||||||||
Obligations under finance leases | 86.4 | 5.3 | % | 92.7 | 5.1 | % | ||||||||||||||||||||
Total Spectrum Brands, Inc. debt | 1,573.9 | 3,193.8 | ||||||||||||||||||||||||
Unamortized discount on debt | — | (0.8) | ||||||||||||||||||||||||
Debt issuance costs | (18.4) | (36.2) | ||||||||||||||||||||||||
Less current portion | (8.6) | (12.3) | ||||||||||||||||||||||||
Long-term debt, net of current portion | $ | 1,546.9 | $ | 3,144.5 | ||||||||||||||||||||||
(in millions) | Amount | |||||||
2024 | $ | — | ||||||
2025 | — | |||||||
2026 | — | |||||||
2027 | 448.8 | |||||||
2028 | — | |||||||
Thereafter | 1,038.7 | |||||||
Total long-term debt | $ | 1,487.5 | ||||||
(in millions) | Line Item | 2023 | 2022 | |||||||||||||||||
Assets | ||||||||||||||||||||
Operating | Operating lease assets | $ | 110.8 | $ | 82.5 | |||||||||||||||
Finance | Property, plant and equipment, net | 66.2 | 73.4 | |||||||||||||||||
Total leased assets | $ | 177.0 | $ | 155.9 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Current | ||||||||||||||||||||
Operating | Other current liabilities | $ | 26.9 | $ | 25.8 | |||||||||||||||
Finance | Current portion of long-term debt | 8.6 | 8.3 | |||||||||||||||||
Long-term | ||||||||||||||||||||
Operating | Long-term operating lease liabilities | 95.6 | 56.0 | |||||||||||||||||
Finance | Long-term debt, net of current portion | 77.8 | 84.4 | |||||||||||||||||
Total lease liabilities | $ | 208.9 | $ | 174.5 | ||||||||||||||||
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Operating lease cost | $ | 37.0 | $ | 26.3 | $ | 19.8 | ||||||||||||||
Finance lease cost | ||||||||||||||||||||
Amortization of leased assets | 10.2 | 10.5 | 11.3 | |||||||||||||||||
Interest on lease liability | 4.8 | 5.2 | 5.3 | |||||||||||||||||
Variable lease cost | 12.4 | 10.8 | 9.8 | |||||||||||||||||
Total lease cost | $ | 64.4 | $ | 52.8 | $ | 46.2 | ||||||||||||||
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Operating cash flow from operating leases | $ | 30.3 | $ | 25.3 | $ | 20.7 | ||||||||||||||
Operating cash flows from finance leases | 4.8 | 5.1 | 5.4 | |||||||||||||||||
Financing cash flows from finance leases | 9.5 | 8.9 | 12.0 | |||||||||||||||||
Supplemental non-cash flow disclosure | ||||||||||||||||||||
Acquisition of operating lease asset through lease obligations | 66.9 | 30.4 | 15.3 | |||||||||||||||||
2023 | 2022 | |||||||||||||
Weighted average remaining lease term | ||||||||||||||
Operating leases | 4.6 years | 4.5 years | ||||||||||||
Finance leases | 8.7 years | 9.7 years | ||||||||||||
Weighted average discount rate | ||||||||||||||
Operating leases | 5.5 | % | 3.8 | % | ||||||||||
Finance leases | 5.3 | % | 5.1 | % | ||||||||||
(in millions) | Finance Leases | Operating Leases | ||||||||||||
2024 | $ | 12.6 | $ | 33.3 | ||||||||||
2025 | 12.7 | 30.5 | ||||||||||||
2026 | 12.3 | 26.4 | ||||||||||||
2027 | 12.3 | 23.3 | ||||||||||||
2028 | 12.2 | 19.3 | ||||||||||||
Thereafter | 46.3 | 7.6 | ||||||||||||
Total lease payments | 108.4 | 140.4 | ||||||||||||
Amount representing interest | (22.0) | (17.9) | ||||||||||||
Total minimum lease payments | $ | 86.4 | $ | 122.5 | ||||||||||
Gain (Loss) in OCI | Reclassified to Continuing Operations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2021 | Line Item | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | 0.3 | $ | 0.2 | $ | 0.1 | Net sales | $ | 0.2 | $ | 0.1 | $ | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | (34.8) | 30.9 | (2.0) | Cost of goods sold | (12.4) | 20.1 | (9.3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | (34.5) | $ | 31.1 | $ | (1.9) | $ | (12.2) | $ | 20.2 | $ | (9.2) |
(in millions) | Line Item | 2023 | 2022 | 2021 | ||||||||||||||||||||||
Foreign exchange contracts | Other non-operating expense (income) | $ | (14.3) | $ | 25.6 | $ | (3.2) |
(in millions) | Line Item | 2023 | 2022 | |||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign exchange contracts - designated as hedge | Other receivables | $ | 1.4 | $ | 14.4 | |||||||||||||||
Foreign exchange contracts - designated as hedge | Deferred charges and other | 0.1 | 0.4 | |||||||||||||||||
Foreign exchange contracts - not designated as hedge | Other receivables | 1.8 | 7.4 | |||||||||||||||||
Total Derivative Assets | $ | 3.3 | $ | 22.2 | ||||||||||||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign exchange contracts - designated as hedge | Accounts payable | $ | 8.1 | $ | — | |||||||||||||||
Foreign exchange contracts - designated as hedge | Other long term liabilities | — | 1.0 | |||||||||||||||||
Foreign exchange contracts - not designated as hedge | Accounts payable | 0.9 | 5.0 | |||||||||||||||||
Total Derivative Liabilities | $ | 9.0 | $ | 6.0 |
Gain (Loss) in OCI (in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Net investment hedge | $ | (31.7) | $ | 75.8 | $ | 6.2 |
U.S. Plans | Non U.S. Plans | |||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Changes in benefit obligation: | ||||||||||||||||||||||||||
Benefit obligation, beginning of year | $ | 53.5 | $ | 71.4 | $ | 101.1 | $ | 176.1 | ||||||||||||||||||
Service cost | 0.6 | 0.5 | 0.8 | 1.2 | ||||||||||||||||||||||
Interest cost | 2.8 | 1.9 | 4.6 | 2.1 | ||||||||||||||||||||||
Actuarial gain | (1.7) | (16.1) | (4.5) | (45.7) | ||||||||||||||||||||||
Benefits paid | (4.3) | (4.2) | (4.2) | (4.4) | ||||||||||||||||||||||
Foreign currency exchange rate changes | — | — | 8.7 | (28.2) | ||||||||||||||||||||||
Benefit obligation, end of year | 50.9 | 53.5 | 106.5 | 101.1 | ||||||||||||||||||||||
Changes in plan assets: | ||||||||||||||||||||||||||
Fair value of plan assets, beginning of year | 50.3 | 69.6 | 93.1 | 147.4 | ||||||||||||||||||||||
Actual return on plan assets | 2.9 | (15.2) | (1.1) | (30.1) | ||||||||||||||||||||||
Employer contributions | 0.1 | 0.1 | 6.8 | 4.8 | ||||||||||||||||||||||
Benefits paid | (4.3) | (4.2) | (4.2) | (4.4) | ||||||||||||||||||||||
Foreign currency exchange rate changes | — | — | 8.1 | (24.6) | ||||||||||||||||||||||
Fair value of plan assets, end of year | 49.0 | 50.3 | 102.7 | 93.1 | ||||||||||||||||||||||
Funded Status | $ | (1.9) | $ | (3.2) | $ | (3.8) | $ | (8.0) | ||||||||||||||||||
Amounts recognized in statement of financial position | ||||||||||||||||||||||||||
Deferred charges and other | $ | — | $ | — | $ | 9.6 | $ | 4.6 | ||||||||||||||||||
Other accrued expenses | 0.1 | 0.1 | — | — | ||||||||||||||||||||||
Other long-term liabilities | 1.8 | 3.1 | 13.4 | 12.6 | ||||||||||||||||||||||
Accumulated other comprehensive loss | 9.4 | 10.9 | 23.8 | 21.8 | ||||||||||||||||||||||
Weighted average assumptions | ||||||||||||||||||||||||||
Discount rate | 5.72% | 5.37% | 4.00 - 5.20% | 3.70 - 5.20% | ||||||||||||||||||||||
Rate of compensation increase | N/A | N/A | 2.75% | 2.75% |
U.S. Plans | Non U.S. Plan | |||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Projected benefit obligation | $ | 50.9 | $ | 53.5 | $ | 57.0 | $ | 51.8 | ||||||||||||||||||
Accumulated benefit obligation | 50.9 | 53.5 | 57.0 | 49.0 | ||||||||||||||||||||||
Fair value of plan assets | 49.0 | 50.3 | 43.5 | 39.2 | ||||||||||||||||||||||
U.S. Plans | Non U.S. Plans | |||||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
Service cost | $ | 0.6 | $ | 0.5 | $ | 0.5 | $ | 0.8 | $ | 1.2 | $ | 1.5 | ||||||||||||||||||||||||||
Interest cost | 2.8 | 1.9 | 1.8 | 4.6 | 2.1 | 2.1 | ||||||||||||||||||||||||||||||||
Expected return on assets | (3.1) | (3.2) | (3.7) | (3.9) | (4.0) | (4.0) | ||||||||||||||||||||||||||||||||
Recognized net actuarial loss | — | 0.8 | 1.4 | 0.8 | 2.8 | 3.4 | ||||||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 0.3 | $ | — | $ | — | $ | 2.3 | $ | 2.1 | $ | 3.0 | ||||||||||||||||||||||||||
Weighted average assumptions | ||||||||||||||||||||||||||||||||||||||
Discount rate | 5.37% | 2.70% | 2.46% | 3.70 - 5.20% | 1.00 - 2.00% | 0.70 - 1.75% | ||||||||||||||||||||||||||||||||
Expected return on plan assets | 5.25% | 5.00% | 6.00% | 2.54 - 5.58% | 0.99 - 4.06% | 0.70 - 3.40% | ||||||||||||||||||||||||||||||||
Rate of compensation increase | N/A | N/A | N/A | 2.75% | 2.50% | 2.25% |
U.S. Plans | Non U.S. Plans | |||||||||||||||||||||||||
Asset Type | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Equity Securities | 30 | % | 31 | % | — | % | — | % | ||||||||||||||||||
Fixed Income Securities | 70 | % | 69 | % | 49 | % | 42 | % | ||||||||||||||||||
Other | — | % | — | % | 51 | % | 58 | % | ||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||
Cash & cash equivalents | $ | 0.3 | $ | — | $ | — | $ | 0.3 | $ | 0.2 | $ | — | $ | — | $ | 0.2 | ||||||||||||||||||||||||||||||||||
Equity | 4.6 | 5.7 | — | 10.3 | 4.9 | 6.1 | — | 11.0 | ||||||||||||||||||||||||||||||||||||||||||
Fixed income securities | 24.2 | 7.8 | — | 32.0 | 25.1 | 8.1 | — | 33.2 | ||||||||||||||||||||||||||||||||||||||||||
Foreign equity | 4.5 | — | — | 4.5 | 4.4 | — | — | 4.4 | ||||||||||||||||||||||||||||||||||||||||||
Foreign fixed income securities | — | 50.8 | — | 50.8 | — | 39.4 | — | 39.4 | ||||||||||||||||||||||||||||||||||||||||||
Life insurance contracts | — | 40.7 | — | 40.7 | — | 36.7 | — | 36.7 | ||||||||||||||||||||||||||||||||||||||||||
Annuity policy | — | — | 10.4 | 10.4 | — | — | 10.6 | 10.6 | ||||||||||||||||||||||||||||||||||||||||||
Other | — | 2.7 | — | 2.7 | — | 7.9 | — | 7.9 | ||||||||||||||||||||||||||||||||||||||||||
Total plan assets | $ | 33.6 | $ | 107.7 | $ | 10.4 | $ | 151.7 | $ | 34.6 | $ | 98.2 | $ | 10.6 | $ | 143.4 |
(in millions) | U.S. Plans | Non U.S. Plans | ||||||||||||||||||
2024 | $ | 4.9 | $ | 4.4 | ||||||||||||||||
2025 | 4.2 | 4.7 | ||||||||||||||||||
2026 | 4.2 | 5.0 | ||||||||||||||||||
2027 | 4.2 | 5.7 | ||||||||||||||||||
2028 | 4.2 | 5.9 | ||||||||||||||||||
2029 - 2033 | 19.9 | 30.8 |
SBH | SB/RH | |||||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
United States | $ | (399.8) | $ | (263.0) | $ | (147.2) | $ | (391.0) | $ | (260.6) | $ | (143.8) | ||||||||||||||||||||||||||
Outside the United States | 109.6 | 172.7 | 136.1 | 109.6 | 172.7 | 136.1 | ||||||||||||||||||||||||||||||||
Loss from continuing operations before income taxes | $ | (290.2) | $ | (90.3) | $ | (11.1) | $ | (281.4) | $ | (87.9) | $ | (7.7) |
SBH | SB/RH | |||||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
Current tax expense: | ||||||||||||||||||||||||||||||||||||||
U.S. Federal | $ | 81.8 | $ | 7.7 | $ | 3.0 | $ | 81.8 | $ | 7.7 | $ | 3.0 | ||||||||||||||||||||||||||
Foreign | 44.9 | 24.7 | 32.6 | 44.9 | 24.7 | 32.6 | ||||||||||||||||||||||||||||||||
State and local | (0.4) | (1.1) | 2.4 | (0.4) | (1.1) | 2.4 | ||||||||||||||||||||||||||||||||
Total current tax expense | 126.3 | 31.3 | 38.0 | 126.3 | 31.3 | 38.0 | ||||||||||||||||||||||||||||||||
Deferred tax (benefit) expense: | ||||||||||||||||||||||||||||||||||||||
U.S. Federal | (197.7) | (26.5) | (64.8) | (196.3) | (25.8) | (63.4) | ||||||||||||||||||||||||||||||||
Foreign | 5.0 | (1.2) | 5.9 | 5.0 | (1.2) | 5.9 | ||||||||||||||||||||||||||||||||
State and local | 9.9 | (16.9) | (5.5) | 9.9 | (17.2) | (5.5) | ||||||||||||||||||||||||||||||||
Total deferred tax benefit | (182.8) | (44.6) | (64.4) | (181.4) | (44.2) | (63.0) | ||||||||||||||||||||||||||||||||
Income tax benefit | $ | (56.5) | $ | (13.3) | $ | (26.4) | $ | (55.1) | $ | (12.9) | $ | (25.0) |
SBH | SB/RH | |||||||||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
U.S. Statutory federal income tax benefit | $ | (60.9) | $ | (19.0) | $ | (2.3) | $ | (59.1) | $ | (18.5) | $ | (1.6) | ||||||||||||||||||||||||||
Permanent items | 5.0 | (1.7) | 13.9 | 5.0 | (1.7) | 13.9 | ||||||||||||||||||||||||||||||||
Goodwill impairment | 2.8 | — | — | 2.8 | — | — | ||||||||||||||||||||||||||||||||
Foreign statutory rate vs. U.S. statutory rate | (1.6) | (4.7) | (6.2) | (1.6) | (4.7) | (6.2) | ||||||||||||||||||||||||||||||||
State income taxes, net of federal effect | (14.5) | (8.3) | (8.7) | (14.5) | (8.6) | (8.7) | ||||||||||||||||||||||||||||||||
State effective rate change | (4.0) | 1.2 | 2.6 | (4.0) | 1.2 | 2.6 | ||||||||||||||||||||||||||||||||
UK effective rate change | — | — | 8.2 | — | — | 8.2 | ||||||||||||||||||||||||||||||||
GILTI | 2.1 | 16.5 | 4.9 | 2.1 | 16.5 | 4.9 | ||||||||||||||||||||||||||||||||
GILTI impact of retroactive law changes | — | (3.2) | (18.1) | — | (3.2) | (18.1) | ||||||||||||||||||||||||||||||||
Residual tax on foreign earnings | 1.5 | 4.8 | 2.6 | 1.5 | 4.8 | 2.6 | ||||||||||||||||||||||||||||||||
Change in valuation allowance | 0.2 | 3.6 | (27.1) | 0.2 | 4.3 | (27.1) | ||||||||||||||||||||||||||||||||
Unrecognized tax expense | 3.8 | 2.2 | 0.2 | 3.8 | 2.2 | 0.2 | ||||||||||||||||||||||||||||||||
Share based compensation adjustments | 0.3 | (5.6) | (0.7) | 0.4 | (5.3) | 0.1 | ||||||||||||||||||||||||||||||||
Research and development tax credits | (1.8) | (1.9) | (2.4) | (1.8) | (1.9) | (2.4) | ||||||||||||||||||||||||||||||||
Partnership outside basis adjustment | 7.0 | 1.2 | 5.5 | 7.0 | 1.2 | 5.5 | ||||||||||||||||||||||||||||||||
Return to provision adjustments and other, net | 3.6 | 1.6 | 1.2 | 3.1 | 0.8 | 1.1 | ||||||||||||||||||||||||||||||||
Income tax benefit | $ | (56.5) | $ | (13.3) | $ | (26.4) | $ | (55.1) | $ | (12.9) | $ | (25.0) |
SBH | SB/RH | |||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Deferred tax assets | ||||||||||||||||||||||||||
Employee benefits | $ | 22.9 | $ | 25.9 | $ | 21.6 | $ | 25.9 | ||||||||||||||||||
Inventories and receivables | 31.9 | 42.0 | 31.9 | 42.0 | ||||||||||||||||||||||
Marketing and promotional accruals | 5.3 | 16.0 | 5.3 | 16.0 | ||||||||||||||||||||||
Property, plant and equipment | 2.8 | 0.9 | 2.8 | 0.9 | ||||||||||||||||||||||
Unrealized losses | 30.5 | 31.9 | 30.5 | 31.9 | ||||||||||||||||||||||
Intangibles | 9.3 | 11.1 | 9.3 | 11.1 | ||||||||||||||||||||||
Operating lease liabilities | 27.6 | 23.0 | 27.6 | 23.0 | ||||||||||||||||||||||
Net operating loss and other carry forwards | 331.6 | 577.4 | 227.9 | 255.6 | ||||||||||||||||||||||
Other | 17.0 | 29.4 | 16.5 | 27.5 | ||||||||||||||||||||||
Total deferred tax assets | 478.9 | 757.6 | 373.4 | 433.9 | ||||||||||||||||||||||
Deferred tax liabilities | ||||||||||||||||||||||||||
Property, plant and equipment | 7.9 | 18.1 | 7.9 | 18.1 | ||||||||||||||||||||||
Unrealized gains | 11.1 | 24.4 | 11.1 | 24.4 | ||||||||||||||||||||||
Intangibles | 167.2 | 303.3 | 167.2 | 303.3 | ||||||||||||||||||||||
Operating lease assets | 24.6 | 22.4 | 24.6 | 22.4 | ||||||||||||||||||||||
Investment in partnership | 80.3 | 73.7 | 80.1 | 73.4 | ||||||||||||||||||||||
Taxes on unremitted foreign earnings | 1.2 | 2.0 | 1.2 | 2.0 | ||||||||||||||||||||||
Other | 13.0 | 12.0 | 13.0 | 12.0 | ||||||||||||||||||||||
Total deferred tax liabilities | 305.3 | 455.9 | 305.1 | 455.6 | ||||||||||||||||||||||
Net deferred tax liabilities | 173.6 | 301.7 | 68.3 | (21.7) | ||||||||||||||||||||||
Valuation allowance | (333.4) | (337.4) | (229.6) | (233.7) | ||||||||||||||||||||||
Net deferred tax liabilities, net valuation allowance | $ | (159.8) | $ | (35.7) | $ | (161.3) | $ | (255.4) | ||||||||||||||||||
Reported as: | ||||||||||||||||||||||||||
Deferred charges and other | $ | 15.0 | $ | 24.4 | $ | 15.0 | $ | 23.9 | ||||||||||||||||||
Deferred taxes (noncurrent liability) | 174.8 | 60.1 | 176.3 | 279.3 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
Unrecognized tax benefits, beginning of year | $ | 100.9 | $ | 18.0 | $ | 13.8 | ||||||||||||||
Gross increase – tax positions in prior period | 21.5 | 84.4 | 4.1 | |||||||||||||||||
Gross decrease – tax positions in prior period | (34.4) | (2.9) | (0.2) | |||||||||||||||||
Gross increase – tax positions in current period | 33.4 | 1.7 | 1.2 | |||||||||||||||||
Settlements | — | — | (0.2) | |||||||||||||||||
Lapse of statutes of limitations | (0.3) | (0.3) | (0.7) | |||||||||||||||||
Unrecognized tax benefits, end of year | $ | 121.1 | $ | 100.9 | $ | 18.0 |
2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions except per share data) | Number of Shares Repurchased | Average Price Per Share | Amount | Number of Shares Repurchased | Average Price Per Share | Amount | Number of Shares Repurchased | Average Price Per Share | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Open Market Purchases | 0.4 | $ | 81.60 | $ | 34.7 | 1.4 | $ | 97.34 | $ | 134.0 | 0.9 | $ | 93.13 | $ | 80.3 | |||||||||||||||||||||||||||||||||||||||||
Private Purchases | — | — | — | — | — | — | 0.7 | 66.63 | 45.5 | |||||||||||||||||||||||||||||||||||||||||||||||
ASR | 5.3 | 74.86 | 400.0 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Total Purchases | 5.7 | 75.36 | $ | 434.7 | 1.4 | 97.34 | $ | 134.0 | 1.6 | 81.43 | $ | 125.8 |
(number of shares, in millions) | Authorized | Available | ||||||||||||
Spectrum Brands Holdings, Inc. 2011 Omnibus Equity Awards Plan | 7.1 | 0.2 | ||||||||||||
Spectrum Brands Holdings, Inc. 2020 Omnibus Equity Plan | 2.6 | 2.1 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
SBH | $ | 17.2 | $ | 10.2 | $ | 28.9 | ||||||||||||||
SB/RH | $ | 15.7 | $ | 9.1 | $ | 27.2 |
SBH | SB/RH | |||||||||||||||||||||||||||||||||||||
(in millions, except per share data) | Units | Weighted Average Grant Date Fair Value | Fair Value at Grant Date | Units | Weighted Average Grant Date Fair Value | Fair Value at Grant Date | ||||||||||||||||||||||||||||||||
Time-based grants | ||||||||||||||||||||||||||||||||||||||
Vesting in less than 12 months | 0.13 | $ | 56.66 | $ | 7.3 | 0.10 | $ | 58.76 | $ | 5.8 | ||||||||||||||||||||||||||||
Vesting in more than 12 months | 0.14 | 50.85 | 7.2 | 0.14 | 50.85 | 7.2 | ||||||||||||||||||||||||||||||||
Total time-based grants | 0.27 | 53.60 | 14.5 | 0.24 | 54.08 | 13.0 | ||||||||||||||||||||||||||||||||
Performance-based grants | 0.28 | 50.87 | 14.1 | 0.28 | 50.87 | 14.1 | ||||||||||||||||||||||||||||||||
Total grants | 0.55 | $ | 52.22 | $ | 28.6 | 0.52 | $ | 52.36 | $ | 27.1 | ||||||||||||||||||||||||||||
SBH | SB/RH | |||||||||||||||||||||||||||||||||||||
(in millions, except per share data) | Shares | Weighted Average Grant Date Fair Value | Fair Value at Grant Date | Shares | Weighted Average Grant Date Fair Value | Fair Value at Grant Date | ||||||||||||||||||||||||||||||||
Outstanding and nonvested as of September 30, 2020 | 1.40 | $ | 56.41 | $ | 79.3 | 1.38 | $ | 56.33 | $ | 77.7 | ||||||||||||||||||||||||||||
Granted | 0.59 | 76.78 | 44.9 | 0.56 | 76.83 | 43.3 | ||||||||||||||||||||||||||||||||
Forfeited | (0.20) | 65.52 | (13.2) | (0.20) | 65.52 | (13.2) | ||||||||||||||||||||||||||||||||
Vested and exercised | (0.33) | 53.53 | (17.8) | (0.30) | 52.82 | (16.2) | ||||||||||||||||||||||||||||||||
Outstanding and nonvested as of September 30, 2021 | 1.46 | 64.00 | 93.2 | 1.44 | 63.85 | 91.6 | ||||||||||||||||||||||||||||||||
Granted | 0.33 | 95.30 | 32.3 | 0.32 | 95.24 | 31.2 | ||||||||||||||||||||||||||||||||
Forfeited | (0.18) | 78.90 | (13.8) | (0.18) | 78.90 | (13.8) | ||||||||||||||||||||||||||||||||
Vested and exercised | (0.60) | 55.09 | (33.4) | (0.60) | 54.34 | (31.8) | ||||||||||||||||||||||||||||||||
Outstanding and nonvested as of September 30, 2022 | 1.01 | 77.22 | 78.3 | 0.98 | 77.03 | 77.2 | ||||||||||||||||||||||||||||||||
Granted | 0.55 | 52.22 | 28.6 | 0.52 | 52.36 | 27.1 | ||||||||||||||||||||||||||||||||
Forfeited | (0.21) | 71.99 | (15.0) | (0.21) | 71.99 | (15.0) | ||||||||||||||||||||||||||||||||
Vested and exercised | (0.46) | 70.98 | (32.7) | (0.44) | 70.33 | (31.6) | ||||||||||||||||||||||||||||||||
Outstanding and nonvested as of September 30, 2023 | 0.89 | $ | 66.29 | $ | 59.2 | 0.85 | $ | 66.87 | $ | 57.7 |
Stock Options | ||||||||||||||||||||
(in millions, except per share data) | Options | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | |||||||||||||||||
Vested and exercisable at September 30, 2020 | $ | 0.22 | $ | 73.96 | $ | 4.82 | ||||||||||||||
Exercised | (0.06) | 52.83 | 3.55 | |||||||||||||||||
Vested and exercisable at September 30, 2021 | 0.16 | 82.36 | 5.32 | |||||||||||||||||
Vested and exercisable at September 30, 2022 | 0.16 | 82.36 | 5.32 | |||||||||||||||||
Vested and exercisable at September 30, 2023 | $ | 0.16 | $ | 82.36 | $ | 5.32 |
(in millions) | Foreign Currency Translation | Derivative Instruments | Defined Benefit Pension | Total | ||||||||||||||||||||||
Balance at September 30, 2020 | $ | (226.6) | $ | 3.6 | $ | (61.7) | $ | (284.7) | ||||||||||||||||||
Other comprehensive income before reclassification | 32.2 | 0.1 | 11.7 | 44.0 | ||||||||||||||||||||||
Net reclassification for loss to income from continuing operations | — | 9.2 | 4.8 | 14.0 | ||||||||||||||||||||||
Net reclassification for loss (gain) to income from discontinued operations | — | 0.1 | (0.1) | — | ||||||||||||||||||||||
Other comprehensive income before tax | 32.2 | 9.4 | 16.4 | 58.0 | ||||||||||||||||||||||
Deferred tax effect | — | (6.6) | (1.6) | (8.2) | ||||||||||||||||||||||
Other comprehensive income, net of tax | 32.2 | 2.8 | 14.8 | 49.8 | ||||||||||||||||||||||
Less: other comprehensive income from discontinued operations attributable to non-controlling interest | 0.4 | — | — | 0.4 | ||||||||||||||||||||||
Other comprehensive income attributable to controlling interest | 31.8 | 2.8 | 14.8 | 49.4 | ||||||||||||||||||||||
Balance as of September 30, 2021 | (194.8) | 6.4 | (46.9) | (235.3) | ||||||||||||||||||||||
Other comprehensive (loss) income before reclassification | (72.0) | 30.7 | 18.3 | (23.0) | ||||||||||||||||||||||
Net reclassification for loss (gain) to income from continuing operations | — | (20.2) | 3.6 | (16.6) | ||||||||||||||||||||||
Net reclassification for loss (gain) to income from discontinued operations | — | (2.4) | (0.1) | (2.5) | ||||||||||||||||||||||
Other comprehensive income before tax | (72.0) | 8.1 | 21.8 | (42.1) | ||||||||||||||||||||||
Deferred tax effect | (20.0) | 2.3 | (8.9) | (26.6) | ||||||||||||||||||||||
Other comprehensive (loss) income, net of tax | (92.0) | 10.4 | 12.9 | (68.7) | ||||||||||||||||||||||
Less: other comprehensive loss from continuing operations attributable to non-controlling interest | (0.4) | — | — | (0.4) | ||||||||||||||||||||||
Less: other comprehensive loss from discontinued operations attributable to non-controlling interest | (0.5) | — | — | (0.5) | ||||||||||||||||||||||
Other comprehensive (loss) income attributable to controlling interest | (91.1) | 10.4 | 12.9 | (67.8) | ||||||||||||||||||||||
Balance as of September 30, 2022 | (285.9) | 16.8 | (34.0) | (303.1) | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassification | 37.3 | (35.3) | (0.8) | 1.2 | ||||||||||||||||||||||
Net reclassification for loss to income from continuing operations | — | 12.2 | 0.8 | 13.0 | ||||||||||||||||||||||
Net reclassification for loss (gain) to income from discontinued operations | — | 2.3 | (0.1) | 2.2 | ||||||||||||||||||||||
Other comprehensive income (loss) before tax | 37.3 | (20.8) | (0.1) | 16.4 | ||||||||||||||||||||||
Deferred tax effect | 7.0 | 5.4 | (0.1) | 12.3 | ||||||||||||||||||||||
Deferred tax valuation allowance | — | — | — | — | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax | 44.3 | (15.4) | (0.2) | 28.7 | ||||||||||||||||||||||
Deconsolidation of discontinued operations | 26.6 | — | (0.5) | 26.1 | ||||||||||||||||||||||
Net change to determine comprehensive income for the period | 70.9 | (15.4) | (0.7) | 54.8 | ||||||||||||||||||||||
Less: other comprehensive income from continuing operations attributable to non-controlling interest | 0.3 | — | — | 0.3 | ||||||||||||||||||||||
Less: Deconsolidation of discontinued operations | 0.8 | — | — | 0.8 | ||||||||||||||||||||||
Other comprehensive income (loss) attributable to controlling interest | 69.8 | (15.4) | (0.7) | 53.7 | ||||||||||||||||||||||
Balance as of September 30, 2023 | $ | (216.1) | $ | 1.4 | $ | (34.7) | $ | (249.4) |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension | Derivative Instruments | Total | Defined Benefit Pension | Derivative Instruments | Total | Defined Benefit Pension | Derivative Instruments | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales | $ | — | $ | 0.2 | $ | 0.2 | $ | — | $ | 0.1 | $ | 0.1 | $ | — | $ | 0.1 | $ | 0.1 | ||||||||||||||||||||||||||||||||||||||
Cost of goods sold | — | (12.4) | (12.4) | — | 20.1 | 20.1 | — | (9.3) | (9.3) | |||||||||||||||||||||||||||||||||||||||||||||||
Other non-operating expense (income), net | (0.8) | — | (0.8) | (3.6) | — | (3.6) | (4.8) | — | (4.8) | |||||||||||||||||||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | 0.1 | (2.3) | (2.2) | 0.1 | 2.4 | 2.5 | 0.1 | (0.1) | — |
(in millions) | Amount | |||||||||||||
2024 | $ | 1.6 | ||||||||||||
2025 | 2.4 | |||||||||||||
2026 | 0.4 | |||||||||||||
2027 | 0.3 | |||||||||||||
2028 | 0.3 | |||||||||||||
Thereafter | 1.6 | |||||||||||||
Total payments | 6.6 | |||||||||||||
Amount representing interest | (1.2) | |||||||||||||
Total environmental obligation | $ | 5.4 |
(in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
GPC | $ | 1,139.0 | $ | 1,175.3 | $ | 1,129.9 | ||||||||||||||
H&G | 536.5 | 587.1 | 608.1 | |||||||||||||||||
HPC | 1,243.3 | 1,370.1 | 1,260.1 | |||||||||||||||||
Net sales | $ | 2,918.8 | $ | 3,132.5 | $ | 2,998.1 |
SBH (in millions, unaudited) | 2023 | 2022 | 2021 | |||||||||||||||||
GPC | $ | 190.6 | $ | 168.6 | $ | 212.1 | ||||||||||||||
H&G | 72.5 | 86.2 | 124.0 | |||||||||||||||||
HPC | 43.1 | 69.6 | 102.6 | |||||||||||||||||
Total Segment Adjusted EBITDA | 306.2 | 324.4 | 438.7 | |||||||||||||||||
Corporate | 3.2 | 41.3 | 46.9 | |||||||||||||||||
Interest expense | 127.0 | 99.4 | 116.5 | |||||||||||||||||
Depreciation | 48.9 | 49.0 | 51.9 | |||||||||||||||||
Amortization | 42.3 | 50.3 | 65.1 | |||||||||||||||||
Share based compensation | 17.2 | 10.2 | 29.4 | |||||||||||||||||
Tristar acquisition and integration | 11.5 | 24.3 | 0.1 | |||||||||||||||||
Rejuvenate acquisition and integration | — | 6.8 | 10.8 | |||||||||||||||||
Armitage acquisition and integration | — | 1.4 | 10.9 | |||||||||||||||||
Omega production integration | — | 4.6 | 1.3 | |||||||||||||||||
HHI divestiture | 8.4 | 6.3 | 9.6 | |||||||||||||||||
HPC separation initiatives | 4.2 | 19.1 | 14.2 | |||||||||||||||||
Coevorden operations divestiture | 2.7 | 8.8 | 11.6 | |||||||||||||||||
Fiscal 2023 restructuring | 7.4 | — | — | |||||||||||||||||
Fiscal 2022 restructuring | 0.4 | 9.8 | — | |||||||||||||||||
Global ERP transformation | 11.4 | 13.1 | 4.3 | |||||||||||||||||
GPC distribution center transition | — | 35.8 | 15.2 | |||||||||||||||||
Global productivity improvement program | — | 5.1 | 21.2 | |||||||||||||||||
Russia closing initiative | 3.2 | 1.9 | — | |||||||||||||||||
HPC brand portfolio transitions | 2.5 | 1.3 | — | |||||||||||||||||
Other project costs | 11.2 | 12.1 | 7.4 | |||||||||||||||||
Impairment of equipment and operating lease assets | 10.8 | — | — | |||||||||||||||||
Impairment of goodwill | 111.1 | — | — | |||||||||||||||||
Impairment of intangible assets | 120.7 | — | — | |||||||||||||||||
Unallocated shared costs | 18.0 | 27.6 | 26.9 | |||||||||||||||||
Non-cash purchase accounting adjustments | 1.9 | 8.3 | 7.3 | |||||||||||||||||
Gain from remeasurement of contingent consideration liability | (1.5) | (28.5) | — | |||||||||||||||||
Legal and environmental | 3.0 | 1.5 | 6.0 | |||||||||||||||||
Gain from debt repurchase | (7.9) | — | — | |||||||||||||||||
HPC product disposal | 20.6 | — | — | |||||||||||||||||
Early settlement of foreign currency cash flow hedges | 4.9 | (5.1) | — | |||||||||||||||||
HPC product recall | 7.7 | 5.5 | — | |||||||||||||||||
Gain on Energizer investment | — | — | (6.9) | |||||||||||||||||
Salus and other | 5.6 | 4.8 | 0.1 | |||||||||||||||||
Loss from operations before income taxes | $ | (290.2) | $ | (90.3) | $ | (11.1) |
SB/RH (in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
GPC | $ | 190.6 | $ | 168.6 | $ | 212.1 | ||||||||||||||
H&G | 72.5 | 86.2 | 124.0 | |||||||||||||||||
HPC | 43.1 | 69.6 | 102.6 | |||||||||||||||||
Total Segment Adjusted EBITDA | 306.2 | 324.4 | 438.7 | |||||||||||||||||
Corporate | 2.6 | 39.9 | 44.9 | |||||||||||||||||
Interest expense | 120.5 | 99.8 | 116.8 | |||||||||||||||||
Depreciation | 48.9 | 49.0 | 51.9 | |||||||||||||||||
Amortization | 42.3 | 50.3 | 65.1 | |||||||||||||||||
Share and incentive based compensation | 15.7 | 9.1 | 27.7 | |||||||||||||||||
Tristar acquisition and integration | 11.5 | 24.3 | 0.1 | |||||||||||||||||
Rejuvenate acquisition and integration | — | 6.8 | 10.8 | |||||||||||||||||
Armitage acquisition and integration | — | 1.4 | 10.9 | |||||||||||||||||
Omega production integration | — | 4.6 | 1.3 | |||||||||||||||||
HHI divestiture | 8.4 | 6.3 | 9.6 | |||||||||||||||||
HPC separation initiatives | 4.2 | 19.1 | 14.2 | |||||||||||||||||
Coevorden operations divestiture | 2.7 | 8.8 | 11.6 | |||||||||||||||||
Fiscal 2023 restructuring | 7.4 | — | — | |||||||||||||||||
Fiscal 2022 restructuring | 0.4 | 9.8 | — | |||||||||||||||||
Global ERP transformation | 11.4 | 13.1 | 4.3 | |||||||||||||||||
GPC distribution center transition | — | 35.8 | 15.2 | |||||||||||||||||
Global productivity improvement program | — | 5.1 | 21.2 | |||||||||||||||||
Russia closing initiative | 3.2 | 1.9 | — | |||||||||||||||||
HPC brand portfolio transitions | 2.5 | 1.3 | — | |||||||||||||||||
Other project costs | 11.2 | 12.1 | 7.4 | |||||||||||||||||
Unallocated shared costs | 18.0 | 27.6 | 26.9 | |||||||||||||||||
Non-cash purchase adjustment | 1.9 | 8.3 | 7.3 | |||||||||||||||||
Gain from remeasurement of contingent consideration liability | (1.5) | (28.5) | — | |||||||||||||||||
Impairment of equipment and operating lease assets | 10.8 | — | — | |||||||||||||||||
Impairment of goodwill | 111.1 | — | — | |||||||||||||||||
Impairment of intangible assets | 120.7 | — | — | |||||||||||||||||
Legal and environmental | 3.0 | 1.5 | 6.0 | |||||||||||||||||
HPC product disposal | 20.6 | — | — | |||||||||||||||||
Gain from debt repurchase | (7.9) | — | — | |||||||||||||||||
Gain on early settlement of cash flow hedges | 4.9 | (5.1) | — | |||||||||||||||||
HPC Product Recall | 7.7 | 5.5 | — | |||||||||||||||||
Gain on Energizer investment | — | — | (6.9) | |||||||||||||||||
Other | 5.4 | 4.5 | 0.1 | |||||||||||||||||
Loss from operations before income taxes | $ | (281.4) | $ | (87.9) | $ | (7.7) |
Depreciation and amortization (in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
GPC | $ | 37.4 | $ | 37.4 | $ | 39.2 | ||||||||||||||
H&G | 18.8 | 18.6 | 19.2 | |||||||||||||||||
HPC | 20.4 | 28.7 | 44.0 | |||||||||||||||||
Total segments | 76.6 | 84.7 | 102.4 | |||||||||||||||||
Corporate and shared operations | 14.6 | 14.6 | 14.6 | |||||||||||||||||
Total depreciation and amortization | $ | 91.2 | $ | 99.3 | $ | 117.0 |
Capital expenditures (in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
GPC | $ | 10.1 | $ | 17.7 | $ | 18.6 | ||||||||||||||
H&G | 3.8 | 8.2 | 3.6 | |||||||||||||||||
HPC | 7.2 | 11.6 | 9.3 | |||||||||||||||||
Total segment capital expenditures | 21.1 | 37.5 | 31.5 | |||||||||||||||||
Corporate and shared operations | 37.9 | 26.5 | 12.1 | |||||||||||||||||
Total capital expenditures | $ | 59.0 | $ | 64.0 | $ | 43.6 |
SBH | SB/RH | |||||||||||||||||||||||||
Segment total assets (in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
GPC | $ | 1,436.4 | $ | 1,461.8 | $ | 1,436.4 | $ | 1,461.8 | ||||||||||||||||||
H&G | 803.7 | 846.5 | 803.7 | 846.5 | ||||||||||||||||||||||
HPC | 945.0 | 1,231.0 | 945.0 | 1,231.0 | ||||||||||||||||||||||
Total segment assets | 3,185.1 | 3,539.3 | 3,185.1 | 3,539.3 | ||||||||||||||||||||||
Corporate and shared operations | 2,073.3 | 419.6 | 2,162.2 | 505.1 | ||||||||||||||||||||||
Total assets | $ | 5,258.4 | $ | 3,958.9 | $ | 5,347.3 | $ | 4,044.4 | ||||||||||||||||||
Net sales to external parties - Geographic Disclosure (in millions) | 2023 | 2022 | 2021 | |||||||||||||||||
United States | $ | 1,722.4 | $ | 1,901.6 | $ | 1,750.8 | ||||||||||||||
Europe/MEA | 830.7 | 820.0 | 877.8 | |||||||||||||||||
Latin America | 206.8 | 243.3 | 193.4 | |||||||||||||||||
Asia-Pacific | 106.6 | 108.5 | 112.0 | |||||||||||||||||
North America - Other | 52.3 | 59.1 | 64.1 | |||||||||||||||||
Net sales | $ | 2,918.8 | $ | 3,132.5 | $ | 2,998.1 |
Long-lived assets - Geographic Disclosure (in millions) | 2023 | 2022 | ||||||||||||||||||||||||
United States | $ | 321.4 | $ | 279.7 | ||||||||||||||||||||||
Europe/MEA | 53.7 | 52.8 | ||||||||||||||||||||||||
Latin America | 2.6 | 3.2 | ||||||||||||||||||||||||
Asia-Pacific | 8.2 | 10.6 | ||||||||||||||||||||||||
Total long-lived assets | $ | 385.9 | $ | 346.3 |
(in millions, except per share amounts) | 2023 | 2022 | 2021 | |||||||||||||||||
Numerator | ||||||||||||||||||||
Net (loss) income from continuing operations attributable to controlling interest | $ | (233.8) | $ | (77.2) | $ | 15.1 | ||||||||||||||
Income from discontinued operations attributable to controlling interest | 2,035.3 | 148.8 | 174.5 | |||||||||||||||||
Net income attributable to controlling interest | $ | 1,801.5 | $ | 71.6 | $ | 189.6 | ||||||||||||||
Denominator | ||||||||||||||||||||
Weighted average shares outstanding - basic | 39.5 | 40.9 | 42.7 | |||||||||||||||||
Dilutive shares | — | — | 0.5 | |||||||||||||||||
Weighted average shares outstanding - diluted | 39.5 | 40.9 | 43.2 | |||||||||||||||||
Earnings per share | ||||||||||||||||||||
Basic earnings per share from continuing operations | $ | (5.92) | $ | (1.89) | $ | 0.35 | ||||||||||||||
Basic earnings per share from discontinued operations | 51.57 | 3.64 | 4.09 | |||||||||||||||||
Basic earnings per share | $ | 45.65 | $ | 1.75 | $ | 4.44 | ||||||||||||||
Diluted earnings per share from continuing operations | $ | (5.92) | $ | (1.89) | $ | 0.35 | ||||||||||||||
Diluted earnings per share from discontinued operations | 51.57 | 3.64 | 4.04 | |||||||||||||||||
Diluted earnings per share | $ | 45.65 | $ | 1.75 | $ | 4.39 | ||||||||||||||
Weighted average number of anti-dilutive shares excluded from denominator | 0.2 | 0.2 | — |
SPECTRUM BRANDS HOLDINGS, INC. | ||||||||
By: | /s/ David M. Maura | |||||||
David M. Maura | ||||||||
Chief Executive Officer and Chairman of the Board |
Signature | Title | |||||||
/s/ David M. Maura David M. Maura | Chief Executive Officer and Chairman of the Board (Principal Executive Officer) | |||||||
/s/ Jeremy W. Smeltser Jeremy W. Smeltser | Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||||||
/s/ Leslie L. Campbell Leslie L. Campbell | Director | |||||||
/s/ Joan Chow Joan Chow | Director | |||||||
/s/ Sherianne James Sherianne James | Director | |||||||
/s/ Gautam Patel Gautam Patel | Director | |||||||
/s/ Terry L. Polistina Terry L. Polistina | Director | |||||||
/s/ Hugh R. Rovit Hugh R. Rovit | Director | |||||||
SB/RH HOLDINGS, LLC By: Spectrum Brands Holdings, Inc., its Sole Member | ||||||||
By: | /s/ David M. Maura | |||||||
David M. Maura | ||||||||
Chief Executive Officer and Director |
Signature | Title | |||||||
/s/ David M. Maura David M. Maura | Chief Executive Officer and Chairman of the Board (Principal Executive Officer) | |||||||
/s/ Jeremy W. Smeltser Jeremy W. Smeltser | Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||||||
/s/ Leslie L. Campbell Leslie L. Campbell | Director | |||||||
/s/ Joan Chow Joan Chow | Director | |||||||
/s/ Sherianne James Sherianne James | Director | |||||||
/s/ Gautam Patel Gautam Patel | Director | |||||||
/s/ Terry L. Polistina Terry L. Polistina | Director | |||||||
/s/ Hugh R. Rovit Hugh R. Rovit | Director |
54
| Indenture governing Spectrum Brands, Inc.’s 4.000% Senior Notes due 2026, dated as of September 20, 2016, among Spectrum Brands, Inc., the guarantors named therein, U.S. Bank National Association, as trustee, Elavon Financial Services DAC, UK Branch, as paying agent and Elavon Financial Services DAC, as registrar and transfer agent (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.) on December 8, 2014 (File No. 001-34757)). | |||||
Exhibit 4.2 | ||||||
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Exhibit 4.3 | ||||||
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Exhibit 4.4 | ||||||
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Exhibit 4.5 | ||||||
Exhibit | ||||||
Exhibit 10.1 | ||||||
Exhibit 10.2 | ||||||
Exhibit 10.3 |
55
Exhibit | ||||||
Exhibit 10.21+ | ||||||
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Exhibit 10.22+ | ||||||
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Exhibit 10.23+ | ||||||
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Exhibit 10.24+ | ||||||
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Exhibit 10.25+ | ||||||
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Exhibit 10.26+ | ||||||
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Exhibit 21.1*** | ||||||
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Exhibit 21.2* | ||||||
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Exhibit 23.1* | ||||||
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Exhibit 31.1* | ||||||
Exhibit 31.2* | ||||||
Exhibit 31.3* | ||||||
Exhibit 31.4* | ||||||
Exhibit 32.1* | ||||||
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Exhibit 32.2* | ||||||
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Exhibit 32.3* | ||||||
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Exhibit 32.4* | ||||||
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56
SIGNATURES
Pursuant** In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this reportAnnual Report on Form 10-K shall be deemed to be signed on its behalffurnished and not filed.
Date: January 26, 2023
| ||||
and Chief Financial Officer |
Pursuant to the requirementsItem 601 of Section 13Regulation S-K as allowed under General Instruction I(2)(b).
| ||||
and Chief Financial Officer |
57