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Item 2. Management’s Discussion and Analysis

2022-08-12 compared with 2022-05-06 · 395 added, 224 removed, 355 unchanged (64% of the section changed)

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The segments are supported through center-led shared service operations and enabling functions consisting of finance and accounting, information technology, legal, human resources, supply chain, and commercial operations.

See Note 18 – Segment Information for more information pertaining to segments of continuing operations.

See Note 18 – Segment Information included in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for more information pertaining to segments of continuing operations.

The following is an overview of the consolidated business, by segment, summarizing product types and brands:

Home Appliances:

Segment Products Brands

HPC Home Appliances:

Small kitchen appliances including toaster ovens, coffeemakers, slow cookers, blenders, hand mixers, grills, food processors, juicers, toasters, irons, kettles, 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, and haircut kits.

Home Appliances:

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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.

Personal Care:

Remington®, and LumaBella®

Companion Animal:

GPC Companion Animal:

Rawhide chews, dog and cat clean-up, training, health and grooming products, small animal food and care products, rawhide-free dog treats, and wet and dry pet food for dogs and cats.

Companion Animal:

8IN1® (8-in-1), Dingo®, Nature's Miracle®, Wild Harvest™, Littermaid®, Jungle®, Excel®, FURminator®, IAMS® (Europe only), Eukanuba® (Europe only), Healthy-Hide®, DreamBone®, SmartBones®, ProSense®, Perfect Coat®, eCOTRITION®, Birdola®, Good Boy®, Meowee!®, Wildbird®, and Wafcol®

Consumer and commercial aquarium kits, stand-alone tanks;

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and aquatics consumables such as fish food, water management and care.

Companion Animal:

Tetra®, Marineland®, Whisper®, Instant Ocean®, GloFish®, OmegaOne® and OmegaSea®

H&G Household:

Household pest control solutions such as spider and scorpion killers;

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and bedbug, flea and tick control products.

Outdoor insect and weed control solutions, and animal repellents such as aerosols, granules, and ready-to-use sprays or hose-end ready-to-sprays.

Personal use pesticides and insect repellent products, including aerosols, lotions, pump sprays and wipes, yard sprays and citronella candles.

Household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes and markers.

Hot Shot®, Black Flag®, Real-Kill®, Ultra Kill®, The Ant Trap® (TAT), and Rid-A-Bug®.

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®.

Personal use pesticides and insect repellent products, including aerosols, lotions, pump sprays and wipes, yard sprays and citronella candles.

Cutter® and Repel®.

The Company has a trademark license agreement (the "License Agreement") with Stanley Black & Decker ("SBD") pursuant to which we license the Black & Decker® (B&D) brand in North America, Latin America (excluding Brazil) and the Caribbean for four core categories of household appliances within the Company's HPC segment:

Household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes and markers.

On September 8, 2021, the Company entered into a definitive Asset and Stock Purchase Agreement ("ASPA") with ASSA ABLOY AB ("ASSA") to sell its Hardware and Home Improvement ("HHI") segment for cash proceeds of $4.3 billion, subject to customary purchase price adjustments (the "HHI Transaction").

HHI consists of residential locksets and door hardware, including knobs, levers, deadbolts, handle sets, and electronic and connected locks under the Kwikset®, Weiser®, Baldwin®, Tell Manufacturing®, and EZSET® brands;

kitchen and bath faucets and accessories under the Pfister® brand;

and builders' hardware consisting of hinges, metal shapes, security hardware, rack and sliding door hardware, and gate hardware under the National Hardware® and FANAL® brands.

The Company's assets and liabilities associated with the HHI disposal group have been classified as held for sale, HHI operations have been classified as discontinued operations, and notes to the condensed consolidated financial statements have been updated for all periods presented to exclude information pertaining to discontinued operations and reflect only the continuing operations of the Company.

Refer to Note 2 – Divestitures included in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for more information on the HHI divestiture.

Pursuant to the ASPA either party may terminate the ASPA if the HHI Transaction has not occurred on or prior to December 8, 2022 (the “End Date”).

On July 14, 2022, the parties entered into an amendment to the ASPA (the “Amendment”) pursuant to which the End Date was extended to June 30, 2023.

Except for the foregoing amendment to the End Date, the ASPA remains in full force and effect as written, including with respect to a termination fee of $350 million.

The Company continues to engage with antitrust regulators in the regulatory review of the HHI Transaction and the extension is intended to provide the parties with additional time (to the extent needed) to satisfy the conditions related to receipt of governmental clearances.

The parties are committed to closing the HHI Transaction and the Company and ASSA both continue to expect that they will obtain all the required governmental clearances and will close the HHI Transaction.

On February 18, 2022, the Company acquired the home appliances and cookware products sold under the PowerXL®, Emeril, and Copper Chef® brands from Tristar Products, Inc.

(the "Tristar Business").

The net assets and operations of the Tristar Business are integrated within the HPC segment.

As part of the acquisition, the PowerXL® and Copper Chef® brands were acquired outright by the Company while the Emeril brand remains subject to a trademark license agreement with the license holder (the "Emeril License").

Pursuant to the Emeril License, the Company will continue to license the Emeril brands within the US, Canada, Mexico, and the United Kingdom for certain designated product categories of household appliances within the HPC segment, including small kitchen food preparation products, indoor and outdoor grills and grill accessories, and cookbooks.

The Emeril License is set to expire effective December 31, 2022 with options up to three one-year renewal periods following the initial expiration.

Under the terms of the agreement, we agreed to pay the license holder a percentage of sales, with minimum annual royalty payments of $1.5 million, increasing to $1.8 million in subsequent renewal periods.

See Note 3 - Acquisitions included in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further detail.

Substantially all brands and tradenames are directly owned by the Company with the exception of the Black & Decker® ("B&D") and Emeril Legasse® ("Emeril") brands used by the HPC segment.

The Company has a trademark license agreement (the "License Agreement") with Stanley Black & Decker ("SBD") pursuant to which we license the B&D brand in North America, Latin America (excluding Brazil) and the Caribbean for four core categories of household appliances within the Company's HPC segment:

beverage products, food preparation products, garment care products and cooking products.

which was set to expire December 31, 2021.

The Company renewed the License Agreement through June 30, 2025, including a sell-off period from April 1, 2025 to June 30, 2025 whereby the Company can continue to sell and distribute but no longer produce products subject to the License Agreement.

Under the terms of the License 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 of the minimum annual royalty will no longer be applied effective January 1, 2024 through the expiration of the agreement on June 30, 2025.

The License Agreement also requires us to comply with maximum annual return rates for products.

Subsequent to the completion of the License Agreement, there are no non-competition provisions or restrictions provided following its expiration.

See Note 5 – Revenue Recognition for further detail on revenue concentration from B&D branded products.

On February 18, 2022, the Company acquired the home appliances and cookware products sold under the PowerXL®, Emeril Legasse®, and Copper Chef® brands from Tristar Products, Inc.

(the "Tristar Business").

As part of the acquisition, the PowerXL® and Copper Chef® brands were acquired outright by the Company while the Emeril Legasse® brand remains subject to a trademark license agreement with the license holder (the "Emeril License").

Pursuant to the Emeril License, the Company will continue to license the Emeril Lagasse® brands within the US, Canada, Mexico, and the United Kingdom for certain designated product categories of household appliances within the HPC segment, including small kitchen food preparation products, indoor and outdoor grills and grill accessories, and cookbooks.

The Emeril License is set to expire effective December 31, 2022 with options up to three one-year renewal periods following the initial expiration.

See Note 3 - Acquisitions for further detail on the Tristar Business acquisition.

On September 8, 2021, the Company entered into a definitive Asset and Stock Purchase Agreement with ASSA ABLOY AB ("ASSA") to sell its Hardware and Home Improvement ("HHI") segment for cash proceeds of $4.3 billion, subject to customary purchase price adjustments.

kitchen and bath faucets and accessories under the Pfister® brand;

and builders' hardware consisting of hinges, metal shapes, security hardware, rack and sliding door hardware, and gate hardware under the National Hardware® and FANAL® brands.

The Company's assets and liabilities associated with the HHI disposal group have been classified as held for sale and the HHI operations have been classified as discontinued operations for all periods presented and notes to the consolidated financial statements have been updated for all periods presented to exclude information pertaining to discontinued operations and reflect only the continuing operations of the Company.

Refer to Note 2 – Divestitures for more information on the HHI divestiture

including the assets and liabilities classified as held for sale and income from discontinued operations.

The Company is engaged with antitrust regulators in the ongoing regulatory review of the transaction and the Company is currently working to respond to such regulators' requests for additional information.

Although the timing and outcome of the regulatory process cannot be predicted, the Company currently expects the merger review process to last for several months.

As such, though there can be no assurance when the transaction will close, if at all, the Company does not expect the transaction to close before September 2022.

See Note 5 – Revenue Recognition included in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further detail on revenue concentration from B&D branded products.

SB/RH is a wholly owned subsidiary of SBH.

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The reportable segments of SB/RH are consistent with the segments of SBH.

The Company periodically evaluates strategic transactions that may result in the acquisition of a business or assets that qualify as recognition of a business combination.

Acquisitions may impact the comparability of the consolidated or segment financial information with the inclusion of operating results for the acquired business in periods subsequent to acquisition date, the inclusion of acquired assets, both tangible and intangible (including goodwill), and the related amortization and depreciation of acquired assets.

Moreover, the comparability of consolidated or segment financial information may be impacted by incremental costs to facilitate the transaction and supporting integration activities of the acquired operations with the consolidated group.

The following acquisition activity may have a significant impact on the comparability of the financial results on the condensed consolidated financial statements.

• On February 18, 2022, the Company acquired 100% of the Tristar Business for a purchase price of $325.0 million, net of customary purchase price adjustments and transaction costs.

The Tristar Business includes a portfolio of home appliances and cookware products sold under the PowerXL®, Emeril Legasse®, and Copper Chef® brands.

The net assets and operating results of the Tristar Business are included in the Company’s Condensed Consolidated Statements of Income and reported within the HPC reporting segment for the three and six month period ended April 3, 2022.

• On May 28, 2021, the Company acquired 100% of the membership interests in For Life Products, LLC ("FLP") for a purchase price of $301.5 million.

FLP is a manufacturer of household cleaning, maintenance, and restoration products sold under the Rejuvenate® brand.

The net assets and operating results of FLP are included in the Company’s Condensed Consolidated Statements of Income and reported within the H&G reporting segment for the three and six month periods ended April 3, 2022.

• On October 26, 2020, the Company completed the acquisition of Armitage Pet Care Ltd ("Armitage") for $187.7 million.

Armitage is a premium pet treats and toys business in Nottingham, United Kingdom including a portfolio of brands that include Armitage's dog treats brand, Good Boy®, cat treats brand, Meowee!®, and Wildbird® bird feed products, among others, that are predominantly sold within the United Kingdom.

The net assets and results of operations of Armitage are included in the Company’s Condensed Consolidated Statements of Income and reported within the GPC reporting segment for the three and six month periods ended April 3, 2022 and April 4, 2021, effective as of the acquisition date of October 26, 2020.

See Note 3 – Acquisitions in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for more information.

Restructuring Activity

Acquisitions, Divestitures and Other Business Development Initiatives

The Company periodically evaluates strategic transactions that may result in the acquisition of a business or assets that qualify as a business combination, or a divestiture of a business or assets that may be recognized as either a component of continuing operations or discontinued operations, depending on the significance to the consolidated group.

Acquisitions may impact the comparability of the consolidated or segment financial information with the inclusion of the operating results for the acquired business in periods subsequent to acquisition date, the inclusion of acquired assets, both tangible and intangible (including goodwill), and the related amortization, depreciation or other non-cash purchase accounting adjustments of acquired assets.

Divestitures may impact the comparability of the consolidated or segment financial information with the recognition of an impairment loss when held for sale, gain or loss on disposition, or change in classification to discontinued operations for qualifying transactions.

Moreover, the comparability of consolidated or segment financial information may be impacted by incremental costs to facilitate and effect such transactions and initiatives to integrate acquired business or separate divested operations and assets with the consolidated group.

The following strategic transactions have been considered as having a significant impact on the comparability of the financial results on the condensed consolidated financial statements and segment financial information.

• Tristar Business Acquisition - On February 18, 2022, the Company acquired 100% of the Tristar Business that includes a portfolio of home appliances and cookware products sold under the PowerXL®, Emeril, and Copper Chef® brands.

The net assets and operating results of the Tristar Business are included in the Company’s condensed consolidated financial statements and reported within the HPC reporting segment for the three and nine month period ended July 3, 2022 effective as of the transaction date.

See Note 3 - Acquisitions included in Notes to the Condensed Consolidated Financial Statement, included elsewhere in this Quarterly Report, for further detail.

In addition to the transaction costs of $13.5 million to effect the close of the transaction, recognized during the nine month period ended July 3, 2022, the Company incurred incremental costs to combine and integrate the acquired business with the HPC segment, primarily towards the integration of systems and processes, merger of commercial operations and supply chain, professional fees to consolidate financial records, plus incremental retention costs for personnel supporting the transition and integration efforts after the transaction date.

Costs attributable to the integration of the Tristar Business were initiated with the close of the transaction and are projecting to continue through the year ending September 30, 2023.

• Rejuvenate Acquisition - On May 28, 2021, the Company acquired 100% of the membership interests in For Life Products, LLC ("FLP"), a manufacturer of household cleaning, maintenance, and restoration products sold under the Rejuvenate® brand.

The net assets and operating results of FLP are included in the Company’s condensed consolidated financial statements and reported within the H&G reporting segment for the three and nine month periods ended July 3, 2022 and July 4, 2021, effective as of the transaction date.

See Note 3 - Acquisitions included in Notes to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended September 30, 2021, for further detail.

In addition to the transaction costs of $5.3 million to effect the close of the transaction, recognized during the three and nine month period ended July 4, 2021, the Company incurred incremental costs to combine and integrate the acquired business with the H&G segment, primarily towards the integration of systems and processes, transfer of inventory and integration to an existing H&G distribution center, retention costs for personnel supporting transition and integration efforts after the transaction date, plus incremental trade spend realized from the transition of commercial operations practices and policies (recognized as a reduction in net sales).

Costs attributable to the integration of the Rejuvenate business have been substantially complete.

• Armitage Acquisition - On October 26, 2020, the Company completed the acquisition of Armitage Pet Care Ltd ("Armitage"), a pet treats and toys business in Nottingham, United Kingdom including a portfolio of brands that include the dog treats brand, Good Boy®, cat treats brand, Meowee!®, and Wildbird® bird feed products, among others, that are predominantly sold within the United Kingdom.

The net assets and results of operations of Armitage are included in the Company’s condensed consolidated financial statements and reported within the GPC reporting segment for the three and nine month periods ended July 3, 2022 and July 4, 2021, effective as of the transaction date.

See Note 3 - Acquisitions included in Notes to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended September 30, 2021, for further detail.

In addition to the transaction costs of $5.1 million to effect the close of the transaction recognized during the nine month period ended July 4, 2021, the Company incurred incremental costs to combine and integrate the acquired business with the GPC segment, primarily towards the integration of systems and processes, transfer of inventory and integration to existing GPC supply chain and distribution centers within the EMEA region, plus retention costs for personnel supporting the transition and integration efforts after the transaction date.

Costs attributable to the integration of the Armitage business have been substantially complete.

• Omega Acquisition - On March 10, 2020, the Company acquired Omega Sea, LLC ("Omega"), a manufacturer and marketer of premium fish foods and consumable goods for the home and commercial aquarium markets, primarily consisting of the Omega brand.

The net assets and results of operations of Omega are included in the Company's condensed consolidated financial statements and reported within GPC segment for the three and nine month periods ended July 3, 2022 and July 4, 2021.

The Company incurred incremental costs to combine and integrate the acquired business within the GPC segment, primarily towards the integration of systems and process, transfer of inventory and production to an existing GPC facility, including related exit and disposal costs of the assumed leased facility, related start-up costs and operational inefficiencies attributable to the transferred production, plus retention costs for personnel supporting the transition and integration after the transaction date.

Costs attributable to the integration of the Omega business will be substantially realized by end of the fiscal year ending September 30, 2022.

• HHI Divestiture - On September 8, 2021, the Company entered into a ASPA with ASSA to sell its HHI segment.

The consummation of the transaction is pending and subject to customary conditions, including the absence of a material adverse effect of HHI and certain antitrust conditions or other governmental restrictions, amongst others.

The Company's assets and liabilities associated with HHI have been classified as held for sale and the HHI operations have been classified as discontinued operations and are reported separately for all periods presented.

See Note 2 - Divestitures included in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further detail.

The Company has incurred incremental costs attributable to the pending divestiture, primarily consisting of legal and professional fees to effect the realization of the ASPA, facilitate antitrust or other governmental restrictions to consummate the transaction, preparation for separation of systems and processes supporting the divested business and enabling functions under a TSA, plus incremental retention costs for personnel supporting the transition efforts.

Incremental costs are expected to be incurred through the consummation of the pending transaction to support TSA processes and mitigation following the close of the sale, which are expected to be incurred for the transition period of approximately 12-24 months following the close of the transaction.

• HPC Separation - The Company has initiated projects to facilitate a strategic separation of the Company's ownership in the HPC segment in the most advantageous way to realize value for both the HPC business as a standalone appliance business either through a spin, merger or sale of the business and the retained GPC and H&G businesses of the consolidated group.

Costs are primarily attributable to legal and professional fees incurred to assess opportunities, evaluate transaction considerations for a separation, including potential tax and compliance implications to the consolidated group, costs directly attributable to the legal entity separation and transfer of net assets of the HPC operations from the commingled operations of the Company, plus the segregation of systems and processes.

The realization of the transaction, if any, is likely not to occur until after completion of the HHI divestiture.

Costs attributable to the initiative are expected to be incurred until a transaction is realized or otherwise cancelled.

• Coevorden Operations - On March 29, 2020, the Company completed the sale of its dog and cat food ("DCF") production facility and distribution center in Coevorden, Netherlands with United Petfood Producers NV ("UPP").

See Note 2 - Divestitures included in Notes to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended September 30, 2021, for further detail.

Following the separation of the Coevorden Operations, the Company has incurred incremental costs attributable to a tolling charge for the continued production of dog and cat food products through a three-year manufacturing agreement with the buyer entered into concurrent with the sale, rent charges associated with the transferred warehouse operated by the Company during an 18-month transition period following the sale, plus costs to facilitate the transfer of the warehouse operations to the buyer and the movement of inventory and distribution center operations to a new distribution center supporting GPC operations in EMEA.

Costs attributable to the tolling arrangement are expected to be completed in March 2023.

The following is a summary of costs attributable to strategic transactions and business development costs for the respective projects during three and nine month periods ended July 3, 2022 and July 4, 2021.

In addition to the initiatives discussed above, the Company regularly engages in other business development initiatives that may incur incremental costs which may not result in a realized transaction or are less significant, and therefore have been separately disclosed and recognized as other project costs.

Three Month Periods Ended Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Tristar acquisition and integration $ 5.6 $ — $ 20.0 $ —

Rejuvenate acquisition and integration — 5.8 7.0 5.8

Armitage acquisition and integration 0.1 1.0 1.4 7.7

Omega integration 0.1 — 1.5 —

HHI divestiture 0.6 — 6.1 —

HPC separation initiatives 10.7 (0.5) 15.4 14.2

Coevorden operations separation 1.9 2.9 7.3 7.7

Other project costs 0.2 1.9 0.7 6.0

Total $ 19.2 $ 11.1 $ 59.4 $ 41.4

Net sales $ — $ — $ 0.7 $ —

Cost of goods sold 1.5 1.6 5.0 4.7

General & administrative expense 13.4 9.5 49.4 36.7

Other non-operating expense, net 4.3 — 4.3 —

Restructuring and Optimization Initiatives

We continually seek and develop operating strategies to improve our operational efficiency, match our capacity and product costs to market demand and better utilize our manufacturing and distribution resources in order to reduce costs, increase revenues, increase or maintain our current profit margins.

We have undertaken various initiatives to reduce manufacturing and operating costs, which may have a significant impact on the comparability of financial results on the condensed consolidated financial statements.

See Note 4 – Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for more information.

These changes and updates are inherently difficult and are made even more difficult by current global economic conditions.

Our ability to achieve the anticipated cost savings and other benefits from such operating strategies may be affected by a number of other macro-economic factors such as COVID-19, or inflation increased interest rates, many of which are beyond or control.

The following initiatives have been considered as having a significant impact on the comparability of the financial results on the condensed consolidated financial statements and segment financial information.

• Fiscal 2022 Restructuring - The Company entered into a new initiative in response to changes observed within consumer products and retail markets, continued inflationary cost pressures and headwinds, resulting in the realization of a headcount reduction.

Substantially all costs associated with the initiative have been recognized.

See Note 4 - Restructuring Charges for further detail on related exit or disposal costs attributable to this initiative.

• Global ERP Transformation - During the year ended September 30, 2021, the Company entered into a SAP S/4 HANA ERP transformation project to upgrade and implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis.

This is a multi-year project that includes various costs, including software configuration and implementation costs that would be recognized as capital expenditures or deferred costs in accordance with applicable accounting policies, with certain costs recognized as operating expense associated with project development and project management costs, and professional services with business partners engaged towards planning, design and business process review that would not qualify as software configuration and implementation costs.

The Company has substantially completed the design phase of the project and is currently moving into the building and design phase.

• GPC Distribution Transition - During the year ended September 30, 2021, the GPC segment entered into an initiative to update its supply chain and distribution operations within the U.S.

to address capacity needs, optimize and improve fill rates attributable to recent growth in the business and consumer demand, and improve overall operational effectiveness and throughput.

The initiative includes the transition of its third party logistics (3PL) service provider at its existing distribution center, incorporating new facilities into the distribution footprint by expanding warehouse capacity and securing additional space to support long-term distribution and fulfillment, plus updating engagement and processes with suppliers and its transportation and logistics handlers.

Incremental costs include one-time transition, implementation and start-up cost with the new 3PL service provider, including the integration of provider systems and technology, incentive-based compensation to maintain performance during transition, duplicative and redundant costs, and incremental costs for various disruptions in the operations during the transition period including supplemental transportation and storage costs, incremental detention and demurrage costs.

See Note 4 - Restructuring Charges for further detail on costs attributable to the program.

The project has been substantially completed with no significant anticipated future costs.

Additionally, the Company experienced an increase in customer fines and penalties during the transition period (recognized as a reduction in net sales).

Costs attributable to the initiative are expected to be incurred through the end of the fiscal year ending September 30, 2022.

• Global Productivity Improvement Program - During the year ended September 30, 2019, the Company initiated a company-wide, multi-year program, consisting of various restructuring related initiatives to redirect resources and spending to drive growth, identify cost savings and pricing opportunities through standardization and optimization, develop organizational and operating optimization, and reduce overall operational complexity across the Company.

With the Company’s divestitures of GBL and GAC during the year ended September 30, 2019, the project focus includes the transition of the Company’s continuing operations in a post-divestiture environment and exiting of TSAs, which were fully exited in January 2022.

The initiative includes review of global processes and organization design and structures, headcount reductions and transfers, and rightsizing the Company’s shared operations and commercial business strategy and exit of certain internal production to third-party suppliers, among others, resulting in the recognition of severance benefits and other exit and disposal costs to facilitate such activity.

See Note 4 - Restructuring Charges for further detail on costs attributable to the program.

The project has been substantially completed with no significant anticipated future costs.

• HPC Brand Portfolio Transitions - In light of the acquisition of the Tristar Business and the PowerXL® brand, the Company has initiated a project within its HPC segment to assess and evaluate the current utilization of tradenames and brands across its portfolio of home and kitchen appliance products.

The project will require incremental costs to facilitate potential transitions of branded product offerings on global basis, including potential investment with our supply base and retail partners to manage inventory and transition new branded products to market.

• Russia Closing Initiative - The Company initiated an assessment of its in-country commercial operations in Russia, predominantly supporting the HPC segment, and other commercial activity directly impacted by the Russia-Ukraine conflict.

The Company has recognized impairment costs on inventory and receivables that are at risk of recoverability as the Company has discontinued importing products directly into Russia.

The initiative may be subject to further exit and disposal costs based upon future actions taken.

The following is a summary of impact to operating results attributable to restructuring initiatives and other optimization projects, incurred for the respective projects during three and nine month periods ended July 3, 2022 and July 4, 2021.

In addition to the projects and initiatives discussed above, the Company regularly incurs cost and engages in less significant restructuring and optimization initiatives that individually are not substantial and occur over a shorter time period (generally less than 12 months).

Three Month Periods Ended Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Fiscal 2022 restructuring $ 8.1 $ — $ 8.1 $ —

Global ERP transformation 3.4 0.9 9.4 1.6

GPC distribution center transition 8.4 7.7 28.3 7.7

Global productivity improvement program 1.2 4.8 5.2 15.7

HPC brand portfolio transitions 0.3 — 0.3 —

Russia closing initiative — — 3.6 —

Other project costs 4.0 0.5 10.0 2.1

Total $ 25.4 $ 13.9 $ 64.9 $ 27.1

Net sales $ 0.3 $ 3.7 $ 4.2 $ 3.7

Cost of goods sold 1.0 0.7 1.9 2.1

Selling expense 8.1 3.5 24.1 3.5

General & administrative expense 16.0 6.0 34.7 17.8

Refinancing Activity

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The Company also redeemed $250.0 million of the 6.125% Notes and $550.0 million of the 5.75% Notes, with a call premium of $23.4 million and non-cash write-off of unamortized debt issuance costs of $7.9 million recognized as interest expense.

Russia-Ukraine War

The impacts of the Russia-Ukraine war and the sanctions imposed by other nations in response to the conflict are evolving and may have an impact on the Company's consolidated operations and cash flow attributable to operations and distribution within the region.

Russia-Ukraine Conflict

The impacts of the Russia-Ukraine conflict and the sanctions imposed by other nations in response to the conflict are evolving and may have an impact on the Company's consolidated operations and cash flow attributable to operations and distribution within the region.

The Company does not maintain a significant level of operations within Ukraine and continues to evaluate its strategy with Russia and the existing operations within the territory.

The Company does not maintain material assets within Russia, and the Company's assets in Russia consist mostly of working capital associated with the in-country distribution operations.

In response to matters within the territory, we have adjusted our risks associated with the collectibility and realizable value for working capital within the region.

Depending on the strategic direction we take towards our existing operations in Russia, there may be incremental restructuring costs or potential impairments to remediate.

The COVID-19 pandemic and the resulting regulations continue to cause economic and social disruptions that contribute to ongoing uncertainties and may have an impact on the operations, cash flow and net assets of the Company.

In response to matters within the territory, we have adjusted our risks associated with the collectability and realizable value for working capital within the region.

Depending on the strategic direction we take towards our existing operations in Russia, there may be incremental costs or potential impairments to remediate.

The COVID-19 pandemic and the resulting regulations have caused economic and social disruptions that contribute to ongoing uncertainties and may have an impact on the operations, cash flow and net assets of the Company.

Such impacts may include, but are not limited to, volatility of demand for our products;

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The Company expects a significant continuing inflationary environment, marked with higher manufacturing, employment, and logistics costs as well as continued constraints with transportation and supply chain disruptions.

Additionally, there have also been changes in consumer needs and spending during the COVID-19 pandemic, and while demand for our products remain strong, our teams continue to monitor demand shifts and there can be no assurance as to the level of demand that will prevail throughout the fiscal year.

Additionally, there have also been changes in consumer needs and spending during the COVID-19 pandemic, and while we experienced an increase in demand for our products resulting from changes driven by the pandemic, our teams continue to monitor demand shifts and there can be no assurance as to the level of demand that will prevail throughout the fiscal year.

We believe the severity and duration of the COVID-19 pandemic to be uncertain and may contribute to retail volatility and consumer purchase behavior changes.

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We exclude net sales from acquired businesses in the current year for which there are no comparable sales in the prior year.

The following is a reconciliation of reported net sales to organic net sales for the three and six month periods ended April 3, 2022 compared to net sales for the three and six month periods ended April 4, 2021:

The following is a reconciliation of reported net sales to organic net sales for the three and nine month periods ended July 3, 2022 compared to net sales for the three and nine month periods ended July 4, 2021:

Three Month Periods Ended

(in millions, except %) April 3, 2022

(in millions, except %) July 3, 2022

Effect of Changes in Currency

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Effect of Acquisitions

April 4, 2021

$ 329.3 $ 17.8 $ 347.1 $ (65.8) $ 281.3 $ 274.4 $ 6.9 2.5 %

2 unchanged sentences

$ 818.0 $ 29.5 $ 847.5 $ (71.3) $ 776.2 $ 743.8 32.4 4.4 %

Six Month Periods Ended

Nine Month Periods Ended

(in millions, except %)

April 3, 2022

Effect of Changes in Currency

1 unchanged sentence

Effect of Acquisitions

April 4, 2021

$ 1,025.2 $ 34.2 $ 1,059.4 $ (101.6) $ 957.8 $ 950.8 $ 7.0 0.7 %

9 unchanged sentences

• Stock based compensation costs consist of costs associated with long-term incentive compensation arrangements that generally consist of non-cash, stock-based compensation.

During the six month period ended April 4, 2021, compensation costs included incentive bridge awards previously issued due to changes in the Company’s LTIP that allowed for cash based payment upon employee election but do not qualify for shared-based compensation, which were fully vested in November 2020.

During the nine month period ended July 4, 2021, compensation costs included incentive bridge awards previously issued due to changes in the Company’s LTIP that allowed for cash based payment upon employee election but do not qualify for shared-based compensation, which were fully vested in November 2020.

See Note 14 – Share Based Compensation in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;

• Restructuring and related charges consist of project costs associated with the restructuring initiatives across the Company's segments.

See Note 4 – Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;

• Transaction related charges are attributable to costs from qualifying strategic transaction or business opportunities, including an acquisition or divestiture, whether or not consummated, subsequent integration related project costs, divestiture support and incremental separation costs.

See Note 1 – Basis of Presentation & Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;

• Incremental costs towards the SAP S/4 HANA ERP transformation to implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis.

This is a multi-year project that includes various costs, including software configuration and implementation costs that would be recognized as capital expenditures or deferred costs in accordance with applicable accounting policies, with certain costs recognized as operating expense associated with project development and management costs, and professional services with business partners engaged towards planning, design and business process review that would not qualify as software implementation costs.

The Company has substantially completed the design phase of the project and is currently moving into the build phase:

• Incremental amounts attributable to strategic transactions and business development initiatives including, but not limited to, the acquisition or divestitures of a business, costs to effect and facilitate a transaction, including such cost to integrate or separate the respective business.

These amounts are excluded from our performance metrics as they are reflective of incremental investment by the Company towards business development activities, incremental costs attributable to such transactions and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments;

• Incremental amounts realized towards restructuring and optimization projects including, but not limited to, costs towards the development and implementation of strategies to optimize operations and improve efficiency, reduce costs, increase revenues, increase or maintain our current profit margins, including recognition of one-time exit or disposal costs.

These amounts are excluded from our ongoing performance metrics as they are reflective of incremental investment by the Company towards significant initiatives controlled by management, incremental costs directly attributable to such initiatives, indirect impact or disruption to operating performance during implementation, and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments;

• Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions the Company's business units excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations.

1 unchanged sentence

See Note 2 – Divestitures in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further details;

• Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value and the incremental value in ROU operating lease assets with below market rent, among others;

• Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value and the incremental value in operating lease assets with below market rent, among others;

• Non-cash gain from the reduction in the contingent consideration liability recognized during the three and nine month periods ended July 3, 2022 associated with the Tristar Business acquisition.

See Note 3 - Acquisitions in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;

• Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations;

• Gains attributable to the Company's investment in Energizer common stock during the three and six month periods ended April 4, 2021.

• Gains attributable to the Company's investment in Energizer common stock during the nine month period ended July 4, 2021.

with such remaining shares sold in January 2021.

See Note 12 – Fair Value of Financial Instruments in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;

• Incremental reserves for non-recurring litigation or environmental remediation activity including the proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual nonrecurring claims with no previous history or precedent recognized during the six month period ended April 4, 2021 and the subsequent remeasurement during the six month period ended April 3, 2022;

• Incremental costs realized under a three-year tolling agreement entered into with the buyer in consideration with the divestiture of the Coevorden Operations on March 29, 2020, for the continued production of dog and cat food products purchased to support the GPC commercial operations and distribution in Europe;

• Incremental reserves for non-recurring litigation or environmental remediation activity including the proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual nonrecurring claims with no previous history or precedent recognized during the nine month period ended July 4, 2021 and the subsequent remeasurement during the nine month period ended July 3, 2022;

• Proforma adjustment for operating losses of the Company's in-country Russia operations that were directly attributable to the Company's closing initiatives in Russia and constraints applied to the in-country commercial operations resulting in a substantial decrease to in-country sales and incremental operating losses being realized;

• Realized gain from early settlement on certain cash flow hedges in our EMEA region prior to their stated maturity during the three and nine month periods ended July 3, 2022 due to change in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region.

See Note 11- Derivatives in Notes to the Condensed Consolidated Financial Statement, included elsewhere in this Quarterly Report for further details;

• Other adjustments are primarily attributable to:

(1) incremental trade spend reserves realized from the transition and integration of the Rejuvenate business into the H&G segment and the Company's systems and processes during the three and six month periods ended April 3, 2022, (2) incremental fines and penalties for delayed shipments attributable to the GPC distribution transition initiative during the three and six month periods ended April 3, 2022, and (3) costs associated with Salus as they are not considered a component of the continuing commercial products company.

(1) costs associated with Salus as they are not considered a component of the continuing commercial products company and (2) other key executive severance related costs.

Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of reported net sales for the respective period and segment.

The following is a reconciliation of net income to Adjusted EBITDA for the three month periods ended April 3, 2022 and April 4, 2021 for SBH.

The following is a reconciliation of net income to Adjusted EBITDA for the three month periods ended July 3, 2022 and July 4, 2021 for SBH.

SPECTRUM BRANDS HOLDINGS, INC.

(in millions) HPC GPC H&G Corporate Consolidated

Three Month Period Ended April 3, 2022

Net (loss) income from continuing operations $ (19.1) $ 19.0 $ 30.4 $ (55.4) $ (25.1)

Income tax benefit — — — (6.8) (6.8)

Three Month Period Ended July 3, 2022

Net income (loss) from continuing operations $ 12.6 $ 18.8 $ 36.3 $ (64.7) $ 3.0

Income tax expense — — — 2.0 2.0

Interest expense — — — 26.0 26.0

Depreciation and amortization 8.1 9.3 4.7 3.6 25.7

Depreciation 2.9 4.0 1.8 3.6 12.3

Amortization 4.7 5.6 2.8 — 13.1

EBITDA 20.2 28.4 40.9 (33.1) 56.4

Share and incentive based compensation — — — 6.6 6.6

Restructuring and related charges 3.7 8.2 — 4.5 16.4

Transaction related charges 14.4 1.2 1.9 2.7 20.2

Share based compensation — — — (0.7) (0.7)

Tristar acquisition and integration 5.6 — — — 5.6

Armitage integration — 0.1 — — 0.1

Omega integration — 0.1 — — 0.1

HHI divestiture — — — 0.6 0.6

HPC separation initiatives — — — 10.7 10.7

Coevorden operations separation — 1.9 — — 1.9

Fiscal 2022 restructuring 3.7 3.1 0.6 0.7 8.1

Global ERP transformation — — — 3.4 3.4

GPC distribution center transition — 8.4 — — 8.4

Global productivity improvement program 0.5 0.2 — 0.5 1.2

HPC brand portfolio transitions 0.3 — — — 0.3

Russia closing initiatives 1.4 (1.4) — — —

Other project costs 0.4 0.1 — 3.6 4.1

Unallocated shared costs — — — 7.0 7.0

Non-cash purchase accounting adjustments 4.3 — — — 4.3

Coevorden tolling related charges — 1.5 — — 1.5

Other — 1.4 0.7 0.1 2.2

Gain from contingent consideration liability (25.0) — — — (25.0)

Proforma in-country Russia operations 0.4 — — — 0.4

Gain on early settlement of cash flow hedges (8.2) — — — (8.2)

Salus and other — — 1.3 0.1 1.4

Adjusted EBITDA $ 3.6 $ 40.9 $ 42.8 $ (7.2) $ 80.1

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Adjusted EBITDA Margin 1.1 % 14.1 % 21.6 % $ — 9.8 %

Three Month Period Ended April 4, 2021

Net income (loss) from continuing operations $ 11.0 $ 38.7 $ 29.9 $ (84.2) $ (4.6)

Income tax benefit — — — (0.7) (0.7)

Three Month Period Ended July 4, 2021

Net (loss) income from continuing operations $ (2.7) $ 27.2 $ 41.7 $ (68.1) $ (1.9)

Income tax expense — — — 10.0 10.0

Interest expense — — — 20.4 20.4

Depreciation and amortization 11.8 9.6 4.9 3.9 30.2

Depreciation 3.4 4.1 1.7 3.6 12.8

Amortization 8.3 6.3 2.8 — 17.4

EBITDA 9.0 37.6 46.2 (34.1) 58.7

Share and incentive based compensation — — — 7.2 7.2

Restructuring and related charges 1.5 0.6 — 2.2 4.3

Transaction related charges 1.1 2.6 — 4.5 8.2

Share based compensation — — — 7.7 7.7

Rejuvenate acquisition and integration — — 5.8 — 5.8

Armitage integration — 1.0 — — 1.0

HPC separation initiatives — — — (0.5) (0.5)

Coevorden operations separation — 2.9 — — 2.9

Global ERP transformation — — — 0.9 0.9

GPC distribution center transition — 7.7 — — 7.7

Global productivity improvement program 2.1 — — 2.7 4.8

Other project costs 0.7 — 0.1 1.6 2.4

Unallocated shared costs — — — 6.7 6.7

Non-cash purchase accounting adjustments — — 1.3 — 1.3

Gain on Energizer investment — — — (0.9) (0.9)

Coevorden tolling related charges — 1.5 — — 1.5

Other — — — 0.2 0.2

Adjusted EBITDA $ 11.8 $ 49.2 $ 53.4 $ (15.0) $ 99.4

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Adjusted EBITDA margin 4.3 % 19.1 % 25.2 % — 13.4 %

The following is a reconciliation of net income to Adjusted EBITDA for the six month periods ended April 3, 2022 and April 4, 2021 for SBH.

The following is a reconciliation of net income to Adjusted EBITDA for the nine month periods ended July 3, 2022 and July 4, 2021 for SBH.

SPECTRUM BRANDS HOLDINGS, INC.

(in millions) HPC GPC H&G Corporate Consolidated

Six Month Period Ended April 3, 2022

Nine Month Period Ended July 3, 2022

Net income (loss) from continuing operations $ 12.7 $ 49.1 $ 50.7 $ (164.8) $ (52.3)

1 unchanged sentence

Interest expense — — — 72.4 72.4

Depreciation and amortization 15.8 18.6 9.3 7.4 51.1

Depreciation 9.2 11.1 5.4 10.9 36.6

Amortization 14.2 17.1 8.6 — 39.9

EBITDA 36.1 77.3 64.7 (102.3) 75.8

Share and incentive based compensation — — — 12.2 12.2

Restructuring and related charges 4.3 19.6 — 9.9 33.8

Transaction related charges 14.4 3.6 6.3 10.8 35.1

Share based compensation — — — 11.4 11.4

Tristar acquisition and integration 20.0 — — — 20.0

Rejuvenate integration — — 7.0 — 7.0

Armitage integration — 1.4 — — 1.4

Omega integration — 1.5 — — 1.5

HHI divestiture — — — 6.1 6.1

HPC separation initiatives — — — 15.4 15.4

Coevorden operations separation — 7.3 — — 7.3

Fiscal 2022 restructuring 3.7 3.1 0.6 0.7 8.1

Global ERP transformation — — — 9.4 9.4

GPC distribution center transition — 28.3 — — 28.3

Global productivity improvement program 2.5 0.9 — 1.8 5.2

HPC brand portfolio transitions 0.3 — — — 0.3

Russia in-country closing initiatives 3.4 0.2 — — 3.6

Other project costs 0.6 0.2 — 9.9 10.7

Unallocated shared costs — — — 20.7 20.7

Non-cash purchase accounting adjustments 7.8 — — — 7.8

Legal and environmental remediation reserves — — (0.5) — (0.5)

Coevorden tolling related charges — 3.0 — — 3.0

Other — 3.9 0.7 0.2 4.8

Gain from contingent consideration liability (25.0) — — — (25.0)

Legal and environmental — — (0.5) — (0.5)

Proforma in-country Russia operations 0.4 — — — 0.4

Gain on early settlement of cash flow hedges (8.2) — — — (8.2)

Salus and other — — 1.3 0.4 1.7

Adjusted EBITDA $ 41.6 $ 120.2 $ 73.1 $ (26.5) $ 208.4

1 unchanged sentence

Adjusted EBITDA margin 4.1 % 13.5 % 15.5 % — 8.7 %

Six Month Period Ended April 4, 2021

Nine Month Period Ended July 4, 2021

Net income (loss) from continuing operations $ 46.4 $ 99.9 $ 71.1 $ (208.2) $ 9.2

Income tax benefit — — — (4.8) (4.8)

Income tax expense — — — 5.3 5.3

Interest expense — — — 96.4 96.4

Depreciation and amortization 20.6 19.3 9.9 7.4 57.2

Depreciation 10.5 11.6 6.2 10.9 39.2

Amortization 21.8 18.2 8.2 — 48.2

EBITDA 78.7 129.7 85.5 (95.6) 198.3

Share and incentive based compensation — — — 21.9 21.9

Restructuring and related charges 4.1 2.1 — 7.1 13.3

Transaction related charges 2.4 8.6 — 16.2 27.2

Rejuvenate acquisition and integration — — 5.8 — 5.8

Armitage acquisition and integration — 7.7 — — 7.7

HPC separation initiatives — — — 14.2 14.2

Coevorden operations separation — 7.7 — — 7.7

Global ERP transformation — — — 1.6 1.6

GPC distribution center transition — 7.7 — — 7.7

Global productivity improvement program 5.2 1.8 — 8.7 15.7

Other project costs 4.2 0.5 — 3.4 8.1

Unallocated shared costs — — — 20.2 20.2

1 unchanged sentence

Gain on Energizer investment — — — (6.9) (6.9)

Legal and environmental remediation reserves — — 6.0 — 6.0

Coevorden tolling related charges — 3.1 — — 3.1

Other — — — 0.1 0.1

Legal and environmental — — 6.0 — 6.0

Salus and other — — — 0.1 0.1

Adjusted EBITDA $ 88.1 $ 158.5 $ 98.6 $ (32.4) $ 312.8

1 unchanged sentence

Adjusted EBITDA margin 9.3 % 19.2 % 21.3 % — 14.0 %

The following is a reconciliation of net income to Adjusted EBITDA for the three month periods ended April 3, 2022 and April 4, 2021 for SB/RH.

The following is a reconciliation of net income to Adjusted EBITDA for the three month periods ended July 3, 2022 and July 4, 2021 for SB/RH.

SB/RH HOLDINGS, LLC

(in millions) HPC GPC H&G Corporate Consolidated

Three Month Period Ended April 3, 2022

Net (loss) income from continuing operations $ (19.1) $ 19.0 $ 30.4 $ (54.9) $ (24.6)

Income tax benefit — — — (6.6) (6.6)

Three Month Period Ended July 3, 2022

Net income (loss) from continuing operations $ 12.6 $ 18.8 $ 36.3 $ (64.0) $ 3.7

Income tax expense — — — 2.0 2.0

Interest expense — — — 26.1 26.1

Depreciation and amortization 8.1 9.3 4.7 3.6 25.7

Depreciation 2.9 4.0 1.8 3.6 12.3

Amortization 4.7 5.6 2.8 — 13.1

EBITDA 20.2 28.4 40.9 (32.3) 57.2

Share and incentive based compensation — — — (1.1) (1.1)

Restructuring and related charges 3.7 8.2 — 4.5 16.4

Transaction related charges 14.4 1.2 1.9 2.7 20.2

Tristar acquisition and integration 5.6 — — — 5.6

Armitage integration — 0.1 — — 0.1

Omega integration — 0.1 — — 0.1

HHI divestiture — — — 0.6 0.6

HPC separation initiatives — — — 10.7 10.7

Coevorden operations separation — 1.9 — — 1.9

Fiscal 2022 restructuring 3.7 3.1 0.6 0.7 8.1

Global ERP transformation — — — 3.4 3.4

GPC distribution center transition — 8.4 — — 8.4

Global productivity improvement program 0.5 0.2 — 0.5 1.2

HPC brand portfolio transitions 0.3 — — — 0.3

Russia closing initiatives 1.4 (1.4) — — —

Other project costs 0.4 0.1 — 3.6 4.1

Unallocated shared costs — — — 7.0 7.0

Non-cash purchase accounting adjustments 4.3 — — — 4.3

Coevorden tolling related charges — 1.5 — — 1.5

Gain from contingent consideration liability (25.0) — — — (25.0)

Proforma in-country Russia operations 0.4 — — — 0.4

Gain on early settlement of cash flow hedges (8.2) — — — (8.2)

Other — — 1.3 0.2 1.5

2 unchanged sentences

Adjusted EBITDA margin 1.1 % 14.1 % 21.6 % — 9.9 %

Three Month Period Ended April 4, 2021

Net income (loss) from continuing operations $ 11.0 $ 38.7 $ 29.9 $ (83.8) $ (4.2)

Income tax benefit — — — (0.5) (0.5)

Three Month Period Ended July 4, 2021

Net (loss) income from continuing operations $ (2.7) $ 27.2 $ 41.7 $ (67.2) $ (1.0)

Income tax expense — — — 10.6 10.6

Interest expense — — — 20.5 20.5

Depreciation and amortization 11.8 9.6 4.9 3.9 30.2

Depreciation 3.4 4.1 1.7 3.6 12.8

Amortization 8.3 6.3 2.8 — 17.4

EBITDA 9.0 37.6 46.2 (32.5) 60.3

Share and incentive based compensation — — — 7.1 7.1

Restructuring and related charges 1.5 0.6 — 2.2 4.3

Transaction related charges 1.1 2.6 — 4.5 8.2

Rejuvenate acquisition and integration — — 5.8 — 5.8

Armitage integration — 1.0 — — 1.0

HPC separation initiatives — — — (0.5) (0.5)

Coevorden operations separation — 2.9 — — 2.9

Global ERP transformation — — — 0.9 0.9

GPC distribution center transition — 7.7 — — 7.7

Global productivity improvement program 2.1 — — 2.7 4.8

Other project costs 0.7 — 0.1 1.6 2.4

Unallocated shared costs — — — 6.7 6.7

Non-cash purchase accounting adjustments — — 1.3 — 1.3

Gain on Energizer investment — — — (0.9) (0.9)

Coevorden tolling related charges — 1.5 — — 1.5

Other — — — 0.1 0.1

Adjusted EBITDA $ 11.8 $ 49.2 $ 53.4 $ (14.0) $ 100.4

1 unchanged sentence

Adjusted EBITDA margin 4.3 % 19.1 % 25.2 % — 13.5 %

The following is a reconciliation of net income to Adjusted EBITDA for the six month periods ended April 3, 2022 and April 4, 2021 for SB/RH.

The following is a reconciliation of net income to Adjusted EBITDA for the nine month periods ended July 3, 2022 and July 4, 2021 for SB/RH.

SB/RH HOLDINGS, LLC

(in millions) HPC GPC H&G Corporate Consolidated

Six Month Period Ended April 3, 2022

Nine Month Period Ended July 3, 2022

Net income (loss) from continuing operations $ 12.7 $ 49.1 $ 50.7 $ (163.5) $ (51.0)

1 unchanged sentence

Interest expense — — — 72.7 72.7

Depreciation and amortization 15.8 18.6 9.3 7.4 51.1

Depreciation 9.2 11.1 5.4 10.9 36.6

Amortization 14.2 17.1 8.6 — 39.9

EBITDA 36.1 77.3 64.7 (100.3) 77.8

Share based compensation — — — 10.7 10.7

Restructuring and related charges 4.3 19.6 — 9.9 33.8

Transaction related charges 14.4 3.6 6.3 10.8 35.1

SAP S/4 HANA ERP Transformation — — — 3.2 3.2

Tristar acquisition and integration 20.0 — — — 20.0

Rejuvenate integration — — 7.0 — 7.0

Armitage integration — 1.4 — — 1.4

Omega integration — 1.5 — — 1.5

HHI divestiture — — — 6.1 6.1

HPC separation initiatives — — — 15.4 15.4

Coevorden operations separation — 7.3 — — 7.3

Fiscal 2022 restructuring 3.7 3.1 0.6 0.7 8.1

Global ERP transformation — — — 9.4 9.4

GPC distribution center transition — 28.3 — — 28.3

Global productivity improvement program 2.5 0.9 — 1.8 5.2

HPC brand portfolio transitions 0.3 — — — 0.3

Russia dissolution 3.4 0.2 — — 3.6

Other project costs 0.6 0.2 — 9.9 10.7

Unallocated shared costs — — — 20.7 20.7

Non-cash purchase accounting adjustments 7.8 — — — 7.8

Legal and environmental remediation reserves — — (0.5) — (0.5)

Coevorden tolling related charges — 3.0 — — 3.0

Gain from contingent consideration liability (25.0) — — — (25.0)

Legal and environmental — — (0.5) — (0.5)

Proforma in-country Russia operations 0.4 — — — 0.4

Gain on early settlement of cash flow hedges (8.2) — — — (8.2)

Other — — 1.3 0.1 1.4

2 unchanged sentences

Adjusted EBITDA margin 4.1 % 13.5 % 15.5 % — 8.8 %

Six Month Period Ended April 4, 2021

Nine Month Period Ended July 4, 2021

Net income (loss) from continuing operations $ 46.4 $ 99.9 $ 71.1 $ (206.4) $ 11.0

Income tax benefit — — — (4.4) (4.4)

Income tax expense — — — 6.1 6.1

Interest expense — — — 96.6 96.6

Depreciation and amortization 20.6 19.3 9.9 7.4 57.2

Depreciation 10.5 11.6 6.2 10.9 39.2

Amortization 21.8 18.2 8.2 — 48.2

EBITDA 78.7 129.7 85.5 (92.8) 201.1

Share and incentive based compensation — — — 20.7 20.7

Restructuring and related charges 4.1 2.1 — 7.1 13.3

Transaction related charges 2.4 8.6 — 16.2 27.2

Rejuvenate acquisition and integration — — 5.8 — 5.8

Armitage acquisition and integration — 7.7 — — 7.7

HPC separation initiatives — — — 14.2 14.2

Coevorden operations separation — 7.7 — — 7.7

Global ERP transformation — — — 1.6 1.6

GPC distribution center transition — 7.7 — — 7.7

Global productivity improvement program 5.2 1.8 — 8.7 15.7

Other project costs 4.2 0.5 — 3.4 8.1

Unallocated shared costs — — — 20.2 20.2

1 unchanged sentence

Gain on Energizer investment — — — (6.9) (6.9)

Legal and environmental remediation reserves — — 6.0 — 6.0

Coevorden tolling related charges — 3.1 — — 3.1

Legal and environmental — — 6.0 — 6.0

Other — — — 0.1 0.1

3 unchanged sentences

Consolidated Results of Operations

The following is summarized consolidated results of operations for SBH for the three and six month periods ended April 3, 2022 and April 4, 2021.

The following is summarized consolidated results of operations for SBH for the three and nine month periods ended July 3, 2022 and July 4, 2021.

(in millions, except %)

Three Month Periods Ended Variance

Six Month Periods Ended Variance

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Nine Month Periods Ended Variance

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net sales $ 818.0 $ 743.8 $ 74.2 10.0 % $ 2,383.0 $ 2,240.3 $ 142.7 6.4 %

3 unchanged sentences

Interest expense 26.0 20.4 5.6 27.5 % 72.4 96.4 (24.0) (24.9) %

Other non-operating income, net (0.9) (2.2) 1.3 (59.1) % (0.3) (11.1) 10.8 (97.3) %

Income tax benefit (6.8) (0.7) (6.1) 871.4 % (22.8) (4.8) (18.0) 375.0 %

Net (loss) income from continuing operations (25.1) (4.6) (20.5) 445.7 % (55.3) 11.1 (66.4) n/m

Other non-operating expense (income), net 7.7 1.4 6.3 450.0 % 7.4 (9.8) 17.2 n/m

Income tax expense (benefit) 2.0 10.0 (8.0) (80.0) % (20.8) 5.3 (26.1) n/m

Net income (loss) from continuing operations 3.0 (1.9) 4.9 n/m (52.3) 9.2 (61.5) n/m

Income from discontinued operations, net of tax 29.9 32.6 (2.7) (8.3) % 109.8 130.1 (20.3) (15.6) %

1 unchanged sentence

n/m = not meaningful

The following is a summary of net sales by segment for the three and six month periods ended April 3, 2022 and April 4, 2021 and the principal components of changes in net sales for the respective periods.

The following is a summary of net sales by segment for the three and nine month periods ended July 3, 2022 and July 4, 2021 and the principal components of changes in net sales for the respective periods.

(in millions, except %)

Three Month Periods Ended Variance

Six Month Periods Ended Variance

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Nine Month Periods Ended Variance

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

$ 329.3 $ 274.4 $ 54.9 20.0 % $ 1,025.2 $ 950.8 $ 74.4 7.8 %

3 unchanged sentences

(in millions)

Three Month Periods Ended Six Month Periods Ended

Net Sales for the period ended April 4, 2021

Three Month Periods Ended Nine Month Periods Ended

Net Sales for the period ended July 4, 2021

$ 743.8 $ 2,240.3

Increase in GPC

Decrease in HPC

Increase (decrease) in H&G 14.5 (0.2)

Increase in HPC

Decrease in H&G (19.1) (19.5)

Acquisition sales

1 unchanged sentence

(29.5) (53.7)

Net Sales for the period ended April 3, 2022

Net Sales for the period ended July 3, 2022

$ 818.0 $ 2,383.0

Gross Profit.

Gross profit and gross profit margin for the three and six month periods decreased primarily due to accelerated freight and input cost inflation pacing ahead of pricing actions, lower volume compared to prior year reopening trends and stimulus spending, with constrained supply chain reducing product availability to meet customer demands, partially offset by productivity and product mix improvements.

Gross profit for the three month period increased primarily from acquisitions and positive pricing adjustments with a decrease in gross profit margin due to reduced volumes and absorption losses with increased supply chain costs from higher inventory and continued supply chain challenges.

Gross profit and gross profit margin for the nine month period decreased primarily due to accelerated freight and input cost inflation pacing ahead of pricing actions earlier in the period, lower volumes compared to prior year reopening trends and stimulus spending, as well as increased supply chain costs from higher inventory and constrained supply chain reducing product availability to meet customer demands.

Operating Expenses.

Operating expenses for the three month period increased due to an increase in selling, general and administrative expenses of $23.4 million from higher distribution and transportation costs, operating inefficiencies from labor inflation and turnover with continued investment in marketing and new product development, offset by lower incentive compensation costs, with an increase in restructuring and related charges of $12.2 million and an increase in transaction related costs of $12.0 million for further investments in strategic transactions and restructuring initiatives.

See Note 4 – Restructuring and Related Charges and Note 1 – Basis of Presentation and Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail on restructuring initiatives and transaction-related charges, respectively.

Operating expenses for the six month period increased due to an increase in selling and general and administrative expenses of $34.6 million attributable to higher distribution and transportation costs, operating inefficiencies from labor inflation and turnover, continued investment in marketing and new product development, offset by lower incentive compensation costs, with an increase in restructuring and related charges of $20.4 million and increase in transaction related costs of $7.9 million for further investments in strategic transactions and restructuring initiatives.

Operating expenses for the three month period increased due to an increase in selling expenses of $25.9 million from higher distribution and transportation costs, higher warehousing and inventory management costs, operating inefficiencies from labor inflation and turnover;

increase in general and administrative expenses of $5.4 million with increased investment in strategic transactions and restructuring related project costs offset by reduced incentive compensation;

offset by realized gain of $25.0 million from the contingent consideration liability associated with the Tristar Business acquisition.

See Note 3 - Acquisitions in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Operating expenses for the nine month period increased due to an increase in selling expenses of $85.3 million from higher distribution and transportation costs, increase in warehousing and inventory management costs, operating inefficiencies from labor inflation and turnover, and increased investment in marketing and new product development earlier in the period;

increase in general and administrative expenses of $8.8 million with increased investment in strategic transactions and restructuring related project costs, partially offset by lower incentive compensation costs;

offset by realized gain of $25.0 million from the contingent consideration liability associated with the Tristar Business acquisition.

See Note 3 - Acquisitions in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Interest Expense.

Interest expense for the three and six month periods decreased due to the refinancing activity in the prior year resulting in a make whole premium of $23.4 million and write-off of unamortized debt issuance costs of $7.9 million recognized the prior year.

Interest expense for the three month period increased due to a higher level of outstanding borrowings on the Revolver Facility used to fund the Tristar Business acquisition and working capital requirements with increased borrowing rates on variable rate debt.

Interest expense for the nine month period decreased due to the refinancing activity in the prior year resulting in a make whole premium of $23.4 million and write-off of unamortized debt issuance costs of $7.9 million recognized in the prior year, partially offset by the higher level of outstanding borrowings on the Revolver Facility and increased borrowing rates on variable rate debt.

See Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Other Non-Operating Income, Net.

Other non-operating income for the three and six month periods decreased due to realized gains on our investment in Energizer common stock in the prior year which the Company sold its remaining investment in January 2021.

Other Non-Operating Expense, Net.

Other non-operating expense for the three month period increased due to unfavorable foreign currency exchange predominantly with the decrease in Euro and Pound Sterling, Other non-operating expense for the nine month period increased due to unfavorable foreign currency exchange and realized gains on our investment in Energizer common stock in the prior year, which was sold in January 2021.

Income Taxes.

Our estimated annual effective tax rate was impacted for the three and six month periods by income earned outside the U.S.

Our estimated annual effective tax rate was impacted for the three and nine month periods by income earned outside the U.S.

that is subject to U.S.

tax, including the U.S.

tax on global intangible low taxed income, certain nondeductible expenses, foreign rates that differ from the US federal statutory rate, and state income taxes.

During the six month period ended April 3, 2022, the Company recorded a $3.2 million benefit due to the impact of an amended return filed during the year and the Company also recognized an additional $2.5 million benefit due to windfalls associated with the vesting of share compensation during the year.

tax on global intangible low taxed income, certain nondeductible expenses, foreign rates that differ from the U.S.

federal statutory rate, and state income taxes.

During the nine month period ended July 3, 2022, the Company recorded a $3.2 million benefit due to the impact of an amended return filed during the year and the Company also recognized an additional $2.5 million benefit due to windfalls associated with the vesting of share compensation during the year.

The Company also recognized $2.2 million of tax expense during the three and nine month periods ended July 3, 2022 for taxes associated with preparing the Company for a strategic separation of the HPC segment.

Income From Discontinued Operations.

Income or loss attributable to discontinued operations primarily reflect the income from the discontinued operations of the HHI segment and the incremental changes to tax and legal indemnifications associated with the Company's divestitures of its GBL and GAC divisions to Energizer during the year ended September 30, 2019.

Income from discontinued operations attributable to the HHI segment increased during the three month period ended April 3, 2022 due to pricing increases offsetting increasing inflationary costs and freight spend and lower depreciation and amortization while held for sale.

Income from discontinued operations attributable to the HHI segment decreased during the six month period ended April 3, 2022 due to lower sales volume following post-pandemic volumes in the prior year, increasing inflationary costs and higher freight spend outpacing pricing actions and lower depreciation and amortization while held for sale.

Income or loss attributable to discontinued operations primarily reflect the income from the discontinued operations of the HHI segment and the incremental changes to tax and legal indemnifications associated with the Company's previous divestitures of its GBL and GAC divisions.

Income from discontinued operations attributable to the HHI segment decreased during the three month period ended July 3, 2022 due to lower volumes offset by pricing increases to address inflationary costs and freight spend and lower depreciation and amortization while held for sale.

Income from discontinued operations attributable to the HHI segment decreased during the nine month period ended July 3, 2022 due to lower sales volume following post-pandemic volumes in the prior year, increasing inflationary costs and higher freight spend outpacing pricing actions earlier in the period, partially offset by lower depreciation and amortization while held for sale.

Noncontrolling Interest.

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Such amount varies in relation to such subsidiary’s net income or loss for the period and the percentage interest not owned by SBH.

The following is summarized consolidated results of operations for SB/RH for the three and six month periods ended April 3, 2022 and April 4, 2021:

The following is summarized consolidated results of operations for SB/RH for the three and nine month periods ended July 3, 2022 and July 4, 2021:

(in millions, except %)

Three Month Periods Ended Variance

Six Month Periods Ended Variance

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Nine Month Periods Ended Variance

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net sales $ 818.0 $ 743.8 $ 74.2 10.0 % $ 2,383.0 $ 2,240.3 $ 142.7 6.4 %

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Interest expense 26.1 20.5 5.6 27.3 % 72.7 96.6 (23.9) (24.7) %

Other non-operating income, net (0.9) (2.2) 1.3 (59.1) % (0.4) (11.1) 10.7 (96.4) %

Income tax benefit (6.6) (0.5) (6.1) 1,220.0 % (22.4) (4.4) (18.0) 409.1 %

Net (loss) income from continuing operations (24.6) (4.2) (20.4) 485.7 % (54.7) 12.0 (66.7) n/m

Other non-operating expense (income), net 7.7 1.4 6.3 450.0 % 7.3 (9.8) 17.1 n/m

Income tax expense (benefit) 2.0 10.6 (8.6) (81.1) % (20.4) 6.1 (26.5) n/m

Net income (loss) from continuing operations 3.7 (1.0) 4.7 n/m (51.0) 11.0 (62.0) n/m

Income from discontinued operations, net of tax 29.8 32.7 (2.9) (8.9) % 109.7 130.3 (20.6) (15.8) %

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n/m = not meaningful

The changes in SB/RH for the three and six month periods are primarily attributable to the changes in SBH previously discussed.

The changes in SB/RH for the three and nine month periods are primarily attributable to the changes in SBH previously discussed.

Segment Financial Data

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(in millions, except %) Three Month Periods Ended

Six Month Periods Ended Variance

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Nine Month Periods Ended Variance

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

$ 329.3 $ 274.4 $ 54.9 20.0 % $ 1,025.2 $ 950.8 $ 74.4 7.8 %

Operating (loss) income (19.8) 11.5 (31.3) n/m 0.6 48.2 (47.6) (98.8) %

Operating (loss) income margin (6.3 %) 3.9 % n/m 0.1 % 7.1 % (700) bps

Operating income (loss) 14.4 (2.4) 16.8 n/m 14.9 45.8 (30.9) (67.5) %

Operating income (loss) margin 4.4 % (0.9 %) 530 bps 1.5 % 4.8 % (330) bps

Adjusted EBITDA

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n/m = not meaningful

Net sales for the three month period increased primarily as a result of the Tristar Business acquisition sales of $35.8 million, with a decrease in organic net sales of $6.2 million, or 2.1%, excluding unfavorable foreign exchange impact and acquisition sales, due to slower demand in small kitchen appliances and personal care appliances categories compared to prior year reopening trends, offset by expanded distribution and consumer demand in the LATAM region and growth in garment care products.

Net sales for the six month period increased from Tristar Business acquisition sales of $35.8 million, with organic net sales flat compared to the prior year, excluding unfavorable foreign currency impact and acquisition sales, due to product availability issues related to supply chain constraints and product category demands compared to prior year reopening trends, offset by expanded distribution in the LATAM region and growth in garment care products.

Operating income, adjusted EBITDA and margins for the three month period decreased driven by accelerated freight and input cost inflation ahead of incremental pricing actions and continued investments in marketing and new product development initiatives partially offset by productivity improvements with incremental transaction related costs attributable to the Tristar Business acquisition and related non-cash purchase accounting adjustments further impacting operating income and margin.

Operating income, adjusted EBITDA and margins for the six month period decreased driven by accelerated freight and input cost inflation ahead of incremental pricing actions and continued investments in marketing and new product development initiatives partially offset by productivity improvements with incremental transaction related costs attributable to the Tristar Business acquisition and related non-cash purchase accounting adjustments further impacting operating income and margin.

Net sales for the three month period increased primarily driven by Tristar Business acquisition sales of $65.8 million with significant unfavorable foreign currency impact of $17.8 million during the period with an increase in organic net sales of $6.9 million, or 2.5% attributable to positive pricing adjustments on inflationary costs, growth and expansion in LATAM markets, and growth in garment care and personal care product categories, offset by declines from high retail inventory levels and reduced replenishment orders from significant retailers, predominantly in the U.S.

Net sales for the nine month period increased from Tristar Business acquisition sales of $101.6 million, with significant unfavorable foreign currency impact of $34.2 million resulting in an increase in organic net sales of $7.0 million, or 0.7% due to positive pricing adjustments on inflationary costs, growth and expansion in LATAM and garment care product sales, offset by product availability issues from supply chain constraints, lower product category demands compared to prior year reopening trends, and high retail inventory levels and reduced replenishment orders from significant retailers, predominantly in the U.S.

Operating income and margin increased due to the recognition of a $25.0 million gain from the contingent consideration liability associated with the Tristar Business acquisition despite increase in related restructuring and integration costs, lower volume, unfavorable foreign currency and incremental distribution and inventory management costs due to supply chain challenges also contributing to the decrease in adjusted EBITDA and margins for the three month period.

Operating income, adjusted EBITDA and margins for the nine month period decreased driven by accelerated freight and input cost inflation ahead of incremental pricing actions, incremental distribution and inventory management costs due to supply chain challenges, investments in marketing and new product development initiatives earlier in the period, with incremental transaction, restructuring, and integration related costs attributable to the Tristar Business acquisition and related non-cash purchase accounting adjustments further impacting operating income and margin, partially offset by the recognition of a $25.0 million gain from the contingent consideration liability associated with the Tristar Business acquisition.

Global Pet Care

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Three Month Periods Ended Variance

Six Month Periods Ended Variance

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Nine Month Periods Ended Variance

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

$ 290.2 $ 257.3 $ 32.9 12.8 % $ 887.5 $ 826.3 $ 61.2 7.4 %

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14.1 % 19.1 % (500) bps 13.5 % 19.2 % (570) bps

Net sales for the three month period increased due to positive pricing with growth in companion animals offset by softness in aquatics compared to higher than usual category sales in the prior year from stimulus spending, further impacted by supply chain capacity constraints and late inventory receipts for supplier manufacturing shut-down earlier in the year impacting product availability to meet customer demands, plus larger than anticipated customer fines and penalties from delayed shipments.

Net sales for the three month period increased due to positive pricing adjustments on inflationary costs, improving product availability and fulfillment compared to prior year supply chain challenges, with continued demand in companion animals and aquatics consumables offset by softness in aquatics systems and equipment.

EMEA sales were negatively impacted by unfavorable foreign exchange rates, with sales remaining consistent, excluding unfavorable foreign exchange rates, despite pressure on consumers from high inflation and impact of the Russia-Ukraine conflict.

Organic net sales increased $44.6 million, or 17.3%, excluding unfavorable foreign currency exchange.

Net sales for the six month period increased due to positive pricing and Armitage acquisition sales of $8.8 million with increased demand in dog chews and treats, mitigated by temporary shut-down of key supplier manufacturing facilities and supply chain capacity constraints impacting product availability to meet customer demand.

Organic net sales increased $27.2 million, or 4.8% excluding unfavorable foreign exchange impact and acquisition sales.

Operating income, adjusted EBITDA, and margins for the three month period decreased due to higher freight and input cost inflation pacing ahead of pricing actions, operating cost inefficiencies from distribution and labor turnover, continued investment in marketing and new product initiatives, partially offset by productivity improvements, with incremental costs incurred to facilitate the transition of its U.S.

Net sales for the nine month period increased due to positive pricing adjustments on inflationary costs, improvement in product availability and fulfillment in the U.S.

distribution center with increased demand in dog chews and treats, mitigated by temporary shut-down of key supplier manufacturing facilities and supply chain capacity constraints impacting fulfillment earlier in the period.

Organic net sales increased $71.9 million, or 8.7% excluding unfavorable foreign exchange impact and Armitage acquisition sales of $8.8 million.

Operating income, adjusted EBITDA, and margins for the three month period decreased due to additional distribution and inventory management costs as the distribution footprint was expanded to support higher inventory to continue to drive customer fill rates, unfavorable foreign currency exchange, unfavorable product mix, with incremental costs incurred to facilitate the transition of its U.S.

distribution operations further impacting operating income and margin.

Operating income, adjusted EBITDA, and margins for the six month period decreased due to higher freight and input cost inflation ahead of pricing actions, operating cost inefficiencies from distribution transitions and labor turnover, unfavorable product mix, and continued investment in marketing and new product initiatives, partially offset by productivity improvements, with incremental costs to facilitate the transition of its U.S.

Operating income, adjusted EBITDA, and margins for the nine month period decreased due to higher freight and input cost inflation ahead of pricing actions, additional distribution and inventory management costs, operating cost inefficiencies from distribution transitions and labor turnover, unfavorable product mix, and investment in marketing and new product initiatives earlier in the period with incremental costs to facilitate the transition of its U.S.

distribution operations further impacting operating income and margin.

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Three Month Periods Ended Variance

Six Month Periods Ended Variance

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Nine Month Periods Ended Variance

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

$ 198.5 $ 212.1 $ (13.6) (6.4) % $ 470.3 $ 463.2 $ 7.1 1.5 %

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21.6 % 25.2 % (360) bps 15.5 % 21.3 % (580) bps

Net sales for the three month period increased from the impact of price adjustments plus acquisition sales of $13.3 million, partially offset by unfavorable weather across most of the U.S.

which reduced category POS during the quarter and caused slowed retail inventory build which delayed our shipments to customers.

Organic net sales increased $14.5 million, or 8.6%, excluding acquisition sales.

Net sales for the six month period increased from the impact of price adjustments plus acquisition sales of $21.1 million.

Organic net sales decreased $0.2 million, or 0.1% excluding acquisition sales, attributable to comparably higher off-season replenishment orders in the prior year to address lower year-end retail inventory levels coupled with the unfavorable spring weather and delayed shipments to customers.

Operating income and adjusted EBITDA for the three month period increased due to pricing adjustments with decreased margins attributable to higher freight and input cost inflation outpacing price increases and continued marketing and product development investment.

Operating income and adjusted EBITDA and margins decreased for the six month period ended due to freight and input cost inflation outpacing pricing actions, continued marketing and product development investment and unfavorable product mix.

Net sales for the three month period decreased primarily from unfavorable weather conditions across the U.S.

with a cold, wet start to the period and drought conditions during the period driving reduction in category POS, high retail inventory levels and reduced retailer replenishment, most significantly with our repellent product category, partially offset by positive price adjustments and Rejuvenate acquisition sales of $5.5 million.

Organic net sales decreased $19.1 million, or 9.0%, excluding acquisition sales.

Net sales for the nine month period increased primarily from acquisition sales of $26.6 million with a decrease in organic net sales of $19.5 million, or 4.2% excluding acquisition sales, attributable to unfavorable weather conditions, reduced category POS, and high retail inventory levels reducing retailer replenishment;

partially offset by positive pricing adjustments on inflationary costs.

Operating income and adjusted EBITDA and margins for the three month period decreased due to the reduced volumes, related absorption losses and unfavorable product mix.

Operating income and adjusted EBITDA and margins decreased for the nine month period ended due to freight and input cost inflation outpacing pricing actions during the period, higher marketing and product development investment earlier in the period and unfavorable product mix.

Liquidity and Capital Resources

The following is a summary of the SBH and SB/RH cash flows from continuing operations for the six month periods ended April 3, 2022 and April 4, 2021, respectively.

Six Month Periods Ended (in millions)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

The following is a summary of the SBH and SB/RH cash flows from continuing operations for the nine month periods ended July 3, 2022 and July 4, 2021, respectively.

Nine Month Periods Ended (in millions)

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Operating activities

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Cash Flows from Operating Activities

Cash flows used in SBH's continuing operations increased $105.1 million primarily due to a decrease in operating results with an increase in cash paid towards working capital for inventory and inflationary costs on raw materials and products, labor and freight, coupled with an increase in cash paid towards for taxes, strategic transactions and restructuring initiatives.

Cash flows used in SB/RH continuing operations increased $131.0 million primarily due to the items previously discussed above except for an incremental operating cash outflow to its parent company for federal net operating losses under the Company’s tax sharing agreement in the prior year.

Cash flows used in SBH's continuing operations increased $108.2 million primarily due to a decrease in operating results with an increase in cash paid towards inflationary costs on raw materials and products, labor and freight, increased supply chain costs from higher inventory, plus higher retail inventory driving down replenishment orders, coupled with an increase in cash paid towards strategic transactions and restructuring initiatives.

Cash flows used in SB/RH continuing operations increased $133.9 million primarily due to the items previously discussed above.

Cash Flows from Investing Activities

Cash flows used in investing activities for SBH continuing operations increased $265.0 million primarily due to the cash paid for the acquisition, net cash acquired, for the purchase of the Tristar Business of $314.3 million compared to the purchase of Armitage of $129.8 million in the prior year, the net proceeds from the sale of Energizer common stock of $73.1 million in the prior year, with an increase in capital expenditures of $7.7 million predominantly due to incremental investments in updating the Company's enterprise-wide operating system to SAP S/4 HANA.

Cash flows used in investing activities of SB/RH decreased primarily due to the items previously discussed.

Cash flows used in investing activities for SBH continuing operations decreased $65.6 million primarily due to the decreased use of cash paid for the acquisitions, net of cash acquired, for the purchase of the Tristar Business of $272.1 million compared to the purchases of Armitage and Rejuvenate for $429.5 million in the prior year, offset by the net proceeds from the sale of Energizer common stock of $73.1 million in the prior year, with an increase in capital expenditures of $19.1 million predominantly due to incremental investments in updating the Company's enterprise-wide operating systems.

Cash flows used in investing activities of SB/RH decreased due to the items previously discussed.

Cash Flows from Financing Activities

Cash flows provided by financing activities for continuing operations increased $647.0 million primarily due to increased borrowings on the Revolver Facility to support the Tristar Business acquisition and working capital requirements from continued supply disruptions, partially offset by increase in stock repurchase activity and higher share based stock award withholding payments from the vesting on LTIP grants.

During the six month period ended April 3, 2022, the Company realized $775.0 million of proceeds from the Revolver Facility with amortizing payments on other outstanding debt of $6.5 million.

Cash flows provided by financing activities for continuing operations increased $558.5 million primarily due to increased borrowings on the Revolver Facility to support the Tristar Business acquisition and working capital requirements, partially offset by an increase in stock repurchase activity earlier in the period and higher share based stock award withholding payments from the vesting of LTIP grants.

During the nine month period ended July 3, 2022, the Company realized $775.0 million of proceeds from the Revolver Facility with amortizing payments on other outstanding debt of $9.8 million.

Refer to Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information on debt borrowings.

During the six month period ended April 3, 2022, the Company repurchased $134.0 million of treasury stock at an average cost of $97.34, primarily through the Company's 10b5-1 repurchase plan which the Company completed during the six month period ended April 3, 2022.

There was no issuance of common stock, other than through the Company’s share-based compensation plans and which is recognized non-cash financing activities.

During the nine month period ended July 3, 2022, the Company repurchased $134.0 million of treasury stock at an average cost of $97.34, primarily through the Company's 10b5-1 repurchase plan which the Company completed earlier in the period.

There was no issuance of common stock, other than through the Company’s share-based compensation plans and which is recognized as a non-cash financing activity.

See Note 13 – Shareholders’ Equity and Note 14 - Share Based Compensation in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail.

During the six month periods ended April 3, 2022 and April 4, 2021, SBH made cash dividend payments of $34.4 million and $35.7 million, respectively, or $0.42 per share.

During the nine month periods ended July 3, 2022 and July 4, 2021, SBH made cash dividend payments of $51.5 million and $53.6 million, respectively, or $0.42 per share.

Cash flows from financing activity of SB/RH increased $582.3 million and is highly dependent upon the financing cash flow activities of SBH.

Liquidity Outlook

Our ability to generate significant cash flow from operating activities coupled with our expected ability to access the credit markets, enables us to execute our growth strategies and return value to our shareholders.

Our ability to make principal and interest payment on borrowings under our debt agreements and our ability to fund planned capital expenditures will depend on the ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions.

Based upon our current level of operations, existing cash balances and availability under our credit facility, we expect cash flows from operations to be sufficient to meet our operating and capital expenditure requirements for at least the next 12 months.

Our ability to generate cash flow from operating activities coupled with our expected ability to access the credit markets, enables us to execute our growth strategies and return value to our shareholders.

Our ability to make principal and interest payments on borrowings under our debt agreements and our ability to fund planned capital expenditures will depend on the ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions.

Despite the recent reduction in operating cash flow, we believe the negative operating cash flow recognized for the nine month period ended July 3, 2022 is not indicative of the ongoing near-term operations of the Company and based upon our current and anticipated level of operations, existing cash balances and availability under our credit facility, we expect cash flows from operations to be sufficient to meet our operating and capital expenditure requirements for at least the next 12 months.

Additionally, we believe the availability under our credit facility and access to capital markets are sufficient to achieve our longer-term strategic plans.

As of April 3, 2022, the Company had borrowing availability of $308.4 million, net of outstanding letters of credit, under our credit facility.

As of July 3, 2022, the Company had borrowing availability of $307.3 million, net of outstanding letters of credit, under our credit facility.

Liquidity and capital resources of SB/RH are highly dependent upon the cash flow activities of SBH.

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During the fourth quarter ended September 30, 2021, SBH entered into a $150.0 million rule 10b5-1 repurchase plan to facilitate daily market share repurchases through September 16, 2022, until the cap set forth in the plan was reached or until the plan was terminated.

The Company completed share repurchases of $150.0 million under the rule 10b5-1 repurchase plan during the three month period ended April 3, 2022.

The Company completed share repurchases of $150.0 million under the rule 10b5-1 repurchase plan earlier in the fiscal year.

See Note 13 – Shareholders’ Equity in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail.

Any further repurchase activity, if any, will dependent on prevailing market conditions, our liquidity requirements and other factors.

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None of the Company’s current borrowings are subject to default or acceleration as a result of a downgrading of credit ratings, although a downgrade of the Company’s credit ratings could increase fees and interest charges on future borrowings.

At April 3, 2022, we were in compliance with all covenants under the Credit Agreement and the indentures governing the 3.875% Notes, 5.00% Notes, 5.50% Notes, 5.75% Notes, and 4.00% Notes.

At July 3, 2022, we were in compliance with all covenants under the Credit Agreement and the indentures governing the 5.75% Notes, due July 15, 2025, the 4.00% Notes, due October 1, 2026, the 5.00% Notes, due October 1, 2029, the 5.50% Notes due July 15, 2030, and the 3.875% Notes, due March 15, 2031.

A portion of our cash balance is located outside the U.S.

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Amounts received from customers for factored receivables are recognized as a payable and remitted to the factor based upon terms of the factoring agreements.

The Company factored certain of its trade receivables during the three and nine month periods ending July 3, 2022.

Additionally, the Company facilitates a voluntary supply chain financing program to provide certain of its suppliers with the opportunity to sell receivables due from the Company (the Company's trade payables) to an unrelated third-party financial institution under the sole discretion of the supplier and the participating financial institution.

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Nonetheless, we continue to actively monitor our global cash balances and liquidity, and if necessary, could reinitiate mitigating efforts to manage non-critical spending and assess operating spend to preserve cash and liquidity.

Despite recent inflationary costs and rising freight costs, we continue to generate operating cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets, although there can be no assurance of our ability to do so.

Despite recent inflationary costs and rising freight costs, we continue to generate operating cash flows to meet our short-term liquidity needs, although inflationary pressures have cause pressure on cash flow generation in the three and nine month periods ending July 3, 2022.

We expect to maintain access to the capital markets, although there can be no assurance of our ability to do so.

However, the economic and social disruption attributable to the COVID-19 pandemic could lead to disruption and volatility in the global capital markets, which, depending on future developments, could impact our capital resources and liquidity in the future.

During the three month period ended April 3, 2022, there has been no material changes to our debt obligations, lease obligations, employee benefit obligations or other contractual obligations or commercial commitments previously discussed in our Annual Report on Form 10-K for the year ended September 30, 2021 other than the increased revolver capacity and borrowings under the Company's Credit Agreement, which have a maturity date of June 30, 2025 and are subject to repayment or re-borrowing by the Company without penalty.

During the three month period ended July 3, 2022, there has been no material changes to our debt obligations, lease obligations, employee benefit obligations or other contractual obligations or commercial commitments previously discussed in our Annual Report on Form 10-K for the year ended September 30, 2021 other than the increased revolver capacity and borrowings under the Company's Credit Agreement, which have a maturity date of June 30, 2025 and are subject to repayment or re-borrowing by the Company without penalty.

See Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail.

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Investments in non-guarantor subsidiaries and the earnings or losses from those non-guarantor subsidiaries have been excluded.

Six Month Period Ended Year Ended

(in millions) April 3, 2022 September 30, 2021

Nine Month Period Ended Year Ended

(in millions) July 3, 2022 September 30, 2021

Statements of Operations Data

12 unchanged sentences

Noncurrent Liabilities 3,817.1 2,881.7

The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of April 3, 2022 and September 30, 2021 are as follows:

(in millions) April 3, 2022 September 30, 2021

The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of July 3, 2022 and September 30, 2021 are as follows:

(in millions) July 3, 2022 September 30, 2021

Statements of Financial Position Data

4 unchanged sentences

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 2. Management’s Discussion and Analysis