What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-05-06 compared with 2022-02-04 · 52 added, 22 removed, 0 unchanged (100% of the section changed)

Information about our risk factors is contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 filed with the SEC on November 23, 2021.

We believe that as of January 2, 2022, with the exception of changes in the risk factors discussed below, there have been no material changes in our risk factors from those disclosed in Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2021.

The proposed acquisition of Tristar Products is subject to regulatory approval.

The consummation of the acquisition of Tristar Products, Inc.

(“Tristar”) is subject to certain customary conditions, including, among other things, (i) receipt of customary antitrust regulatory approvals, (ii) the absence of a material adverse effect on Tristar, (iii) the accuracy of the representations and warranties of the parties (generally subject to a customary material adverse effect standard (as described in the purchase agreement), or other customary materiality qualifications), and (iv) material compliance by the parties with their respective covenants and agreements under the purchase agreement.

The Company may not receive the required approval and other clearances for the transaction, or they may not be received in a timely manner, which may impact our ability to complete the transaction in a timely matter, or at all.

If such approvals are received, they may impose terms, conditions, or restrictions that may cause a failure of the closing conditions set forth in the purchase agreement or that could have a material detrimental impact on the business to be acquired, significantly diminish the benefits of the transaction, and/or the Company following completion of the transaction.

Any delay in obtaining the required authorizations, approvals, or consents or the imposition of unfavorable terms, conditions or restrictions could materially detrimentally impact the business to be acquired, significantly diminish the benefits of the transaction, and/or the Company.

We are subject to risks relating to a number of pending or anticipated M&A transactions and restructurings.

As previously announced, on September 8, 2021, we announced the proposed sale of our HHI division to ASSA ABLOY (the “HHI Divestiture”).

On February 4, 2022, we announced that we had entered into the agreement to acquire Tristar (the “Tristar Acquisition”), and announced plans to pursue combining the Tristar business to be acquired with our existing Home and Personal Care business (the “Appliance Restructuring”) with the intent to ultimately pursue a separate, pure play Global Appliance business (the creation of such company, the “New Appliances Company”).

On February 4, 2022, we also announced plans to pursue transforming the Company to a pure play Company composed of our Global Pet Care and Home & Garden business (the creation of such company, the “New Spectrum”), which is dependent upon completing the sale of the HHI Divestiture, the Tristar Acquisition, the Appliances Restructuring, and the creation of the New Appliances Company.

There are numerous risks and uncertainties associated with completing the HHI Divestiture and the Tristar Acquisition, and completing the transactions required to complete the Appliances Restructuring and create the New Appliances Company and the New Spectrum (collectively, the “Transactions”), including:

• consummation of the Transactions are subject to a number of conditions and requirements, some of which are outside of our control;

• the Company’s existing, and future, business relationships with third parties, including customers, suppliers and service providers, may be disrupted due to uncertainty associated with the Transactions;

• we may incur significant transaction costs in connection with the Transactions, which costs may exceed those currently anticipated;

• we intend to pay for certain of the Transactions, including the Tristar Acquisition, with cash on hand and proceeds of new indebtedness.

There can be no assurance that such additional indebtedness will be available and/or available on attractive terms;

• unforeseen events, including the COVID-19 pandemic may delay or prevent the completion of the Transactions or negatively affect the benefits anticipated from the Transactions;

• we may be unable to successfully execute the Transactions and, as a result, may fail to realize the anticipated benefits and cost savings of the Transaction in the intended timeframe, or at all;

• we may have difficulty retaining, motivating, and attracting executives and other employees in light of the uncertainty surrounding the pending Transactions.

Any of the foregoing risks and uncertainties could have a material adverse effect on our earnings, cash flows, financial condition, and/or stock price.

Information about our risk factors is contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 filed with the SEC on November 23, 2021 and in Item 1A of our Quarterly Reports on Form 10-Q for quarterly periods subsequently filed.

We believe that as of April 3, 2022, with the exception of changes in the risk factors discussed below, there have been no material changes in our risk factors from those disclosed in Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2021 and in Item 1A of our Quarterly Reports on Form 10-Q for quarterly periods subsequently filed..

We face a number of local, regional, and global uncertainties and potential disruptions which could adversely impact our businesses.

We face a number of local, regional, and global uncertainties and potential disruptions which could adversely impact our businesses, our financial performance or liquidity, and our ability to carry out our go-forward plans and strategies.

These economic uncertainties and potential disruptions include a slow-down in the general economy;

reduced market growth rates;

increased inflation rates and cost of goods;

increased fuel and employee costs;

higher interest rates;

tighter credit markets;

changes in government policies, including the imposition of tariffs or import costs;

the deterioration of economic relations between countries or regions;

the escalation or continuation of armed conflict, hostilities or economic sanctions between countries or regions, which can negatively impact our ability to supply or sell our products and otherwise conduct our day-to-day operations.

For instance, the conflict between Russia and Ukraine has led us to terminate, reduce or significantly change our business activities in these regions and certain surrounding regions.

These efforts may have to continue or accelerate, including us having to further reduce or cease doing business within Russia, Ukraine, and certain surrounding regions, which could have a negative impact on our ability to collect outstanding accounts receivables, impose additional costs and negatively impact our business performance.

In addition, the economic sanctions and hostilities in Russian and Ukraine, may negatively impact our and our customers’ financial viability, which may negatively impact us or the demands or economic viability of our customers not only in Russia but also in other parts of the world.

Additionally, global economic conditions or restrictions from armed conflicts or the COVID-19 pandemic may cause our suppliers, distributors, contractors, or other third-party partners to suffer financial or operating difficulties that they cannot overcome, resulting in their inability to provide us with the materials and services we need, in which case our business and results of operations could be adversely affected.

For instance, our suppliers in Asia and other parts of the world have, and may continue to experience, shutdown or limitations in their operations as result of the COVID-19 pandemic, which may contain or limit our ability to supply or distribute our products to our customers and negatively impact our business.

Moreover, we have experienced, and may continue to experience, delays in the receipt of certain goods from international and domestic shipping origins as a result of the COVID-19 pandemic and more general global supply chain constraints in both fiscal 2021 and fiscal 2022.

While we have taken certain remediating actions in response to the ongoing global supply chain challenges, these measures may not be sufficient and other supply chain challenges may continue to arise that are beyond our control and could negatively affect our business and financial performance.

Moreover, we continue to transition our third-party logistics service provider at our existing Edwardsville, IL distribution center and are also adding another distribution center nearby.

These efforts require incorporating a new service provider into our distribution capabilities and adding another distribution center into our operations.

These efforts are complicated and require coordination among a number of our stakeholder, including our suppliers and transportation and logistics handlers.

These changes and updates are inherently difficult and are made even more difficult by the other uncertainties and potential disruptions our business faces.

We do not control the operations of these third parties and are dependent on them to execute our orders and deliver our products in a timely and efficient way.

The failure of these third parties to fulfill all of their obligations to us could result in lost sales, penalties and other adverse effects on our business.

While we believe that optimizing our distribution centers and other aspects of our supply chain and customer delivery network will allow us to manage our inventory more efficiently and more efficiently respond to customer demands, there can be no assurance that we will realize such benefits.

We have experienced, and may continue to experience, delays in executing these efforts.

Our inability to execute, or timely execute these efforts, has resulted in us being unable to supply, or timely supply, our products to our customers or incurring higher costs and reductions in revenues, incurring penalties imposed by our customers, or may disrupt our business operations.

Furthermore, our raw materials are sourced from industries characterized by a limited supply base, and their cost can fluctuate substantially.

Under many of our supply arrangements, the price we pay for raw materials fluctuates along with certain changes in underlying commodities costs.

Price increases for our raw materials have placed pressure on our costs and could continue to do so, and we may not be able to effectively hedge or pass along any such increases to our customers or consumers.

Furthermore, any price increases passed along to our customers or consumers could significantly reduce demand for our products and could negatively affect our business and financial performance.

The integration of the Tristar Business into our HPC segment may be more difficult, time-consuming, or costly than expected.

Synergies and other anticipated benefits may not be realized within the expected time frames, or at all.

On February 18, 2022 we completed the acquisition of the Tristar Business.

Our ability to realize the anticipated benefits of the acquisition of the Tristar Business depend, to a large extent, on our ability to integrate the acquired business into our current HPC segment in a manner that facilitates growth opportunities and achieves projected growth trends without adversely affecting revenue and investments in future growth.

The failure to meet the challenges involved in combining the Tristar Business with our current HPC segment and to realize the anticipated benefits from such combination, including expected synergies, could adversely affect our results of operations.

The overall combination of our businesses may also result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customer and other business relationships.

The difficulties of combining the operations of the companies include, among others:

diversion of management’s attention to integration matters;

difficulties in integrating operations and systems;

challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the two companies;

difficulties in integrating employees and attracting and retaining key personnel, challenges in retaining existing, and obtaining new customers, suppliers, employees and others;

difficulties in achieving anticipated cost savings, synergies, business opportunities, financing plans and growth prospects from the combination;

difficulties in managing the expanded operations of a larger HPC segment;

challenges in continuing to develop valuable and widely accepted products;

contingent liabilities that are larger than expected;

and potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the acquisition of the Tristar Business.

Even if our combined operations are integrated successfully, the full benefits of the acquisition of the Tristar Business, including anticipated synergies, cost savings or sales or growth opportunities, may not be realized, and these benefits may not be achieved within our anticipated time frame or at all.

Further, additional unanticipated costs may be incurred in the integration of our businesses.

Many of these factors are outside of our control, and any one of them could result in lower revenues, higher costs and diversion of management time and energy, which could materially impact our business, financial condition, and results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors