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Item 7. Management’s Discussion and Analysis

2022-11-22 compared with 2021-11-23 · 368 added, 320 removed, 314 unchanged (69% of the section changed)

6 unchanged sentences

Refer to Item 1 - Business and Note 1 – Description of Business in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for an overview of our business.

The COVID-19 pandemic and the resulting regulations and other disruptions to both demand and supply may have a substantial impact on the commercial operations of the Company or impairment of the Company’s net assets.

Such impacts may include, but are not limited to, volatility of demand for our products, disruptions and cost implications in manufacturing and supply arrangements, inability of third parties to meet obligations under existing arrangements, and significant changes to the political and economic environments in which we manufacture, sell, and distribute our products.

During the years ended September 30, 2020 and 2021, and as of the date of this report, we have been and continue to be classified as an essential business in the jurisdictions that have mandated closures of non-essential businesses, and therefore have been allowed to remain open and continue to operate to the extent possible under existing regulations with any limitation in production output being short-term in nature.

Despite the supply implications in the prior year, the Company has experienced continued customer demand.

While demand for our products generally has not been negatively impacted, our teams continue to monitor demand disruption and there can be no assurance as to the level of demand that will prevail following the year ended September 30, 2021.

A large portion of our customers continue to operate and sell our products, with some customers having experienced reduced operations due to closures or reduced store hours.

There have also been changes in consumer needs and spending during the COVID-19 pandemic, which have resulted in a limited number of change orders and reduced spending.

Currently, we have not identified, and will continue to monitor for, any substantive risk attributable to customer credit and have not experienced a significant impact from store closures or retail bankruptcies.

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.

The magnitude of the financial impact on our results is highly dependent on the duration of the COVID-19 pandemic and how quickly the U.S.

and global economies resume normal operations.

The COVID-19 pandemic has not, as of the date of this report, had a materially negative impact on the Company’s liquidity position.

The sweeping nature of COVID-19 pandemic makes it extremely difficult to predict the long-term ramifications on our financial condition and results of operations.

However, the likely overall economic impact of the COVID-19 pandemic to the U.S.

and global economies remains uncertain.

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.

We have also not observed any material impairments of our assets due to the COVID-19 pandemic.

We expect the ultimate significance of the impact on our financial condition, results of operations, and cash flows will be dictated by the length of time that such circumstances continue, which will ultimately depend on the unforeseeable duration and severity of the COVID-19 pandemic and any governmental and public actions taken in response.

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 or 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.

During the year ended September 30, 2021, the Company entered into the following acquisition activity:

• On May 28, 2021, the Company acquired all ownership interests in FLP for a purchase price of $301.5 million.

FLP is a leading 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 Consolidated Statements of Income and reported within the H&G reporting segment for the year ended September 30, 2021, effective the acquisition date of May 28, 2021.

• On October 26, 2020, the Company completed the acquisition of 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 Consolidated Statements of Income and reported within the GPC reporting segment for the year ended September 30, 2021, effective the acquisition date of October 26, 2020.

During the year ended September 30, 2020, the Company entered into the following acquisition activity:

• 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, for a purchase price of approximately $16.9 million.

The net assets and results of operations of Omega are included in the Company's Consolidated Statements of Income and reported within GPC reporting segment for the years ended September 30, 2020 and September 30, 2021, effective the acquisition date of March 10, 2020.

There was no acquisition activity during the year ended September 30, 2019.

See Note 4 - Acquisitions in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further discussion pertaining to the referenced acquisition activity.

The Company periodically evaluates strategic transactions that may result in the divestiture of a business or assets that may impact the comparability of consolidated or segment financial information.

Certain divestitures may be classified separately from continuing operations if they are considered a strategic shift to the consolidated group, which results in the operating results and any realized gain or loss from the divestiture to be presented as a component of income from discontinued operations for all comparable periods in the Consolidated Financial Statements.

Divestitures that do not qualify as discontinued operations result in he gain or loss from the divestiture being recognized as part of continuing operations.

Further, the comparability of consolidated or segment financial information may be impacted by incremental costs to facilitate the transaction and related separation activities of the divested business, including any subsequent restructuring of the consolidated group.

During the year ended September 30, 2021, the Company entered into the following divestiture activity:

• On September 8, 2021, the Company entered into the Purchase Agreement with ASSA to sell its HHI segment for cash proceeds of $4.3 billion, subject to customary purchase price adjustments.

The consummation of the transaction is subject to customary conditions, including the absence of a material adverse effect of HHI and certain antitrust conditions or other governmental restrictions, amongst others, and is anticipated to be consummated during the year ended September 30, 2022.

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.

During the year ended September 30, 2020, the Company entered into the following divestiture activity:

• On March 29, 2020, the Company completed the sale of its DCF production facility and distribution center in Coevorden, Netherlands with United Petfood Producers NV ("UPP") for cash proceeds of $29.0 million, resulting in a loss on assets held for sale of $26.8 million during the year ended September 30, 2020.

The loss was recognized as a component of continuing operations and operating income within the Company's GPC segment.

The Company continues to operate its commercial DCF business following the divestiture and is supplied by UPP through a manufacturing agreement and distribution agreement.

Additionally, the Company recognized an impairment on intangible assets of $7.6 million due to the incremental cash flow risk associated with the commercial DCF business following the divestiture.

During the year ended September 30, 2019, the Company entered into the following divestiture activity:

• On January 2, 2019, the Company completed the sale of its GBL business pursuant to the GBL acquisition agreement with Energizer for cash proceeds of $1,956.2 million, resulting in the recognition of a pre-tax gain on sale of $989.8 million during the year ended September 30, 2019.

The results of operations and gain on sale for disposal of the GBL business are recognized as a component of income from discontinued operations for all comparable periods.

Prior to the completion of the GBL divestiture, the Company changed its plan to sell its GBA segment, consisting of both the GBL and HPC businesses, and recognized the net assets of HPC as held for use and included component of continuing operations as a separate reporting segment for all comparable periods.

As a result, the Company recognized $29.0 million of incremental depreciation and amortization for cumulative depreciation and amortization on HPC long-lived assets not previously recognized while held for sale.

• On January 28, 2019, the Company completed the sale of its GAC business pursuant to the GAC acquisition agreement with Energizer for $1.2 billion, consisting of $938.7 million in cash proceeds and $242.1 million in stock consideration of common stock of Energizer, resulting in the loss on sale of business of $111.0 million.

The results of operations and write-down of net assets held for sale for the disposal of the GAC business were recognized as a component of discontinued operations.

Realized and unrealized gains and losses on the common stock investment in Energizer was recognized as Other Non-Operating Expense (Income), net on the Company’s Consolidated Statement of Income.

See Note 3 – Divestitures in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further discussion pertaining to the referenced divestiture activity.

Restructuring Activity

We continually seek to improve our operational efficiency, match our manufacturing capacity and product costs to market demand and better utilize our manufacturing resources.

For a discussion of our fiscal 2020 results, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the Company's Annual Report on Form 10-K for the year ended September 30, 2021 filed with the SEC on November 23, 2021.

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 a 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 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 Consolidated Financial Statements and reported within the HPC reporting segment as of and for the year ended September 30, 2022, effective as of the transaction date.

See Note 4 - Acquisitions in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further detail.

In addition to the transaction costs of $13.5 million to effect the close of the transaction, recognized during the year ended September 30, 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 facilitate in the consolidation of financial records, plus incremental retention costs for personnel supporting the transition and integration efforts.

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 Consolidated Financial Statements and reported within the H&G reporting segment as of and for the years ended September 30, 2022 and 2021, effective as of the transaction date.

See Note 4 - Acquisitions in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further detail.

In addition to the transaction costs of $5.3 million to effect the close of the transaction, recognized during the year ended September 30, 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 of distribution with an existing H&G distribution center, retention costs for personnel supporting transition and integration efforts, plus incremental trade spend realized from the alignment 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, UK 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 UK.

The net assets and results of operations of Armitage are included in the Consolidated Financial Statements and reported within the GPC reporting segment as of and for the years ended September 30, 2022 and 2021, effective as of the transaction date.

See Note 4 - Acquisitions in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report, for further detail.

In addition to the transaction costs of $5.1 million to effect the close of the transaction recognized during the year ended September 30, 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.

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 Consolidated Financial Statements and reported within GPC segment as of and for the years ended September 30, 2022 and 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 have been substantially complete.

Table of Conten t s

• HHI Divestiture - On September 8, 2021, the Company entered into an Asset and Stock Purchase Agreement ("ASPA") with ASSA ABLOY AB ("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.

On September 15, 2022, the DOJ filed a complaint seeking to enjoin the transaction and block the acquisition of the HHI division by ASSA.

The Company expects that the trial will occur in April 2023.

Both the Company and ASSA have stated their disagreement with the DOJ's concerns.

The Company and ASSA will jointly defend the transaction in the litigation.

ASSA has also announced that, to resolve all the alleged competitive concerns surrounding the acquisition of HHI, it has initiated a process to sell its Emtek and its smart residential business in the U.S.

The Company continues to recognize the HHI division as held for sale and as a component of our discontinued operations and are reported separately for all periods presented.

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.

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

The Company has incurred incremental costs attributable to the pending transaction, 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 transition services agreement ("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 a transition period of approximately 12-24 months following the close of the transaction.

• HPC Separation - The Company has entered into various initiatives 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 through a spin, merger or other strategic transaction and the retained GPC and H&G businesses of the Company.

Costs are primarily attributable to legal and professional fees incurred to assess strategic opportunities, evaluate transaction considerations for a potential separation, including 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 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 discussed above.

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 3 - Divestitures included in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report 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 DCF products through a three-year manufacturing agreement with the buyer entered into concurrently 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 from the Coevorden facility to a new distribution center supporting GPC operations in EMEA.

Incremental 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 the years ended September 30, 2022 and 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.

(in millions) 2022 2021

Tristar Business acquisition and integration $ 24.3 $ 0.1

Rejuvenate acquisition and integration 6.8 10.8

Armitage acquisition and integration 1.4 10.9

Omega integration 4.6 1.3

HHI divestiture 6.3 9.6

HPC separation initiatives 19.1 14.2

Coevorden operations separation 8.8 11.6

Other project costs 1.0 5.4

Total $ 72.3 $ 63.9

Net sales $ 0.7 $ —

Cost of goods sold 9.4 6.9

General & administrative expense 57.9 57.0

Other non-operating expense, net 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, and maintain or increase 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 consolidated financial statements.

The most significant of these initiatives is the Global Productivity Improvement Program, which began during the year ended September 30, 2019 and is anticipated to continue through the fiscal year ending September 30, 2022.

See Note 5 - Restructuring and Related Charges in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further discussion pertaining to restructuring and related activity.

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 and increased interest rates, many of which are beyond our control.

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

• Fiscal 2022 Restructuring - During the year ended September 30, 2022, 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.

See Note 5 - Restructuring Charges in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further detail on related exit or disposal costs attributable to this initiative.

Costs attributable to the initiative are substantially complete as of September 30, 2022.

Table of Conten t s

• 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 either 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 has moved into the build phase.

Costs are anticipated to be incurred through various deployments expected through September 30, 2024.

• 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 5 - Restructuring Charges in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further detail on costs attributable to the program.

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 substantially complete as of 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 included 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 included 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 5 - Restructuring Charges in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further detail on costs attributable to the program.

Costs attributable to the initiative are substantially complete as of September 30, 2022.

• 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 investment with our supply base and retail partners to manage inventory and transition new branded products to market.

Costs are anticipated to be incurred through September 30, 2025.

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

The Company has recognized impairment costs of inventory and receivables that are at risk of recoverability as the Company has discontinued importing products directly into Russia, impairment of long-lived assets and expected lease termination costs.

The initiative also includes costs for severance and other exit and disposal costs to facilitate such activity.

See Note 5 - Restructuring Charges in the Notes to the Consolidated Financial Statements included elsewhere in this Annual report for further detail on exit and disposal costs attributable to the program.

Cost attributable to the initiative are expected to be incurred through September 30, 2023.

The following is a summary of impact to operating results attributable to restructuring initiatives and other optimization projects, incurred for the respective projects during the years ended September 30, 2022 and 2021.

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

(in millions) 2022 2021

Fiscal 2022 restructuring $ 9.8 $ —

Global ERP transformation 13.1 4.3

GPC distribution center transition 35.8 15.2

Global productivity improvement program 5.1 21.2

HPC brand portfolio transitions 1.3 —

Russia closing initiative 1.9 —

Other project costs 11.1 2.0

Total $ 78.1 $ 42.7

Net sales $ 5.0 $ 3.7

Cost of goods sold 1.0 1.3

Selling expense 31.3 11.5

General & administrative expense 40.8 26.2

Table of Conten t s

Refinancing Activity

The following recent financing activity has a significant impact on the comparability of financial results on the consolidated financial statements.

• During the year ended September 30, 2022, the Company entered into the third amendment to the Amended and Restated Credit Agreement (the "Credit Agreement") that provides for incremental capacity on the Revolver Facility of $500 million that was used to support the acquisition of the Tristar Business and the continuing operations and working capital requirements of the Company.

Borrowings under the incremental capacity are subject to a borrowing rate which is subject to SOFR plus margin ranging from 1.75% to 2.75%, per annum or base rate plus margin ranging from 0.75% to 1.75% per annum, with an increase by 25 basis points 270 days after the effective date of the third amendment and an additional 25 basis points on each 90 day anniversary of such date.

• During the year ended September 30, 2021, the Company completed its offering of $500.0 million aggregate principal amount of its 3.875% Notes and entered into a new Term Loan Facility in the aggregate principal amount of $400.0 million on March 3, 2021.

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.

• During the year ended September 30, 2020, the Company (1) entered into the Amended and Restated Credit Agreement (the "Credit Agreement"), which refinanced the Company's previously existing credit facility, extending the maturity, reducing the revolving facility under the Credit Agreement from $890 million to $600 million, and changing interest rate margins;

(2) issued $300 million of its 5.50% Senior Unsecured Notes;

and (3) completed the tender and call of its 6.625% Notes with an outstanding principal of $117.4 million initiated in the previous year, with a premium of $1.5 million and non-cash write-off of unamortized debt issue costs of $1.1 million recognized as interest expense.

• During the year ended September 30, 2019, the Company (1) repaid $452.6 million of its 6.625% Notes with an outstanding principal of $570.0 million, consisting of a repayment of $285.0 million on March 31, 2019 plus a repayment of $167.6 million on September 24, 2019 using proceeds from the GAC divestitures, with a premium of $9.2 million and non-cash write-off of unamortized debt issue cost of $5.0 million recognized as interest expense;

(2) issued $300.0 million of 5.00% Senior Unsecured Notes due September 2029;

(3) repaid $890.0 million of its 7.75% Senior Unsecured Notes in full on January 30, 2019 using proceeds received from the GBL and GAC divestitures with a premium of $17.2 million and non-cash write-off of unamortized debt issue costs and discounts of $24.0 million recognized as interest expense;

(4) repaid its USD Term Loan in full on January 4, 2019 using proceeds received from the divestiture of GBL with a non-cash write-off of unamortized debt issue costs of $6.6 million recognized as interest expense;

and (5) repaid its CAD Term Loan in full on October 31, 2018.

See Note 12 - Debt in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for additional detail regarding debt and refinancing activity.

During the year ended September 30, 2020, the non-recourse debt under Salus CLO were effectively discharged resulting in the recognition of a non-cash gain on extinguishment of debt of $76.2 million.

See Note 12 - Debt in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for more information.

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 has discontinued importing goods and initiated the closing of its HPC operations within Russia.

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

The Company has adjusted our risks associated with the collectability and realizable value for working capital within the region.

The Company continues to evaluate its strategy and existing operations within the surrounding territory as matters evolve.

Depending on the strategic directions taken within the region and results from closing our HPC 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;

disruptions and cost implications in manufacturing and supply arrangements;

inability of third parties to meet obligations under existing arrangements;

and significant changes to the political and economic environments in which we manufacture, sell, and distribute our products.

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 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 continue to prevail in future periods.

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.

The COVID-19 pandemic has not had a materially negative impact on the Company’s liquidity position and we have not observed any material impairments.

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

We expect the ultimate significance of the impact on our financial condition, results of operations, and cash flows will be dictated by the length of time that such circumstances continue, which will ultimately depend on the unforeseeable duration and severity of the COVID-19 pandemic, the emergence of variants and the effectiveness of vaccines against these variants, and any governmental and public actions taken in response.

Inflation and Supply Chain Constraint s

Our business continues to experience challenges towards product availability to meet customer demand.

We have experienced increased labor shortages in the wake of the COVID-19 pandemic resulting in transportation and supply chain disruptions.

Together with labor shortages and higher demand for talent, the current economic environment is driving higher wages.

Our ability to meet labor needs, control wage and labor-related costs and minimize labor disruptions will be key to our success of operating our business and executing our business strategies.

Furthermore, our business is operating in an inflationary environment, which has negatively impacted our gross margin rates.

We are unable to predict how long the current inflationary environment, including increased energy costs, will continue.

Additionally, we have experienced further supply chain disruptions from unanticipated shutdowns in our supply base and limitations within transportation and logistics impacting availability and increasing freight costs within the overall global supply chain.

We expect the economic environment to remain uncertain as we navigate the current geopolitical environment, the COVID-19 pandemic, labor challenges, supply chain constraints and the current inflationary environment, including increasing energy and commodity prices.

Table of Conten t s

Non-GAAP Measurements

3 unchanged sentences

We define organic net sales as net sales excluding the effect of changes in foreign currency exchange rates and/or impact from acquisitions (where applicable).

We believe this non-GAAP measure provides useful information to investors because it reflects regional and operating segment performance from our activities without the effect of changes in currency exchange rate and/or acquisitions.

We believe this non-GAAP measure provides useful information to investors because it reflects regional and segment performance from our activities without the effect of changes in currency exchange rate and/or acquisitions.

We use organic net sales as one measure to monitor and evaluate our regional and segment performance.

13 unchanged sentences

Total $ 3,132.5 $ 94.9 $ 3,227.4 $ (225.1) $ 3,002.3 $ 2,998.1 $ 4.2 0.1 %

The following is a reconciliation of net sales to organic net sales of SBH and SB/RH for the year ended September 30, 2020 compared to net sales for the year ended September 30, 2019:

September 30, 2020 Net Sales September 30, 2019 Variance

(in millions, except %) Net Sales

Effect of Changes in Currency

Net Sales Excluding Effect of Changes in Currency

Effect of Acquisitions

HPC $ 1,107.6 $ 18.9 $ 1,126.5 $ — $ 1,126.5 $ 1,068.1 $ 58.4 5.5 %

GPC 962.6 1.1 963.7 (7.5) 956.2 870.2 86.0 9.9 %

H&G 551.9 0.1 552.0 — 552.0 508.1 43.9 8.6 %

Total $ 2,622.1 $ 20.1 $ 2,642.2 $ (7.5) $ 2,634.7 $ 2,446.4 $ 188.3 7.7 %

Table of Conten t s

Adjusted EBITDA.

5 unchanged sentences

Adjusted EBITDA further excludes:

• Stock based and other incentive compensation costs that consist of costs associated with long-term compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics under the Company's Long-Term Incentive Plan ("LTIP");

and generally consist of non-cash, stock-based compensation.

During the years ended September 30, 2021, 2020, and 2019, other incentive compensation also includes incentive bridge awards issued due to changes in the Company's LTIP that allowed for cash based payment upon employee election but does not qualify for share-based compensation.

All bridge awards fully vested in November 2020.

See Note 19 - Share Based Compensation in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

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

See Note 5 - Restructuring and Related Charges in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

• Transaction related charges that consist of (1) transaction costs from acquisitions or subsequent project costs directly associated with integration of an acquired business with the consolidated group;

and (2) transaction costs from divestitures and subsequent project costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred, and exiting of transition service arrangements (TSAs) and reverse TSAs.

See Note 2 – Significant Accounting Policies and Practices in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

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

During the year ended September 30, 2021, compensation costs included incentive bridge awards previously issued due to changes in the Company's Long-Term Incentive Plan ('LTIP") that allowed for cash based payment upon employee election but do not quality for share based compensation, which were fully vested in November 2020.

See Note 18 - Share Based Compensation in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

• 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 supporting 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.

Amounts attributable to unallocated shared costs would be mitigated through subsequent strategic or restructuring initiatives, TSAs, elimination of extraneous costs or re-allocation or absorption by existing continuing operations following the completed sale of the discontinued operations.

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

• Gains and losses attributable to the Company’s investment in Energizer common stock.

Amounts attributable to unallocated shared costs would be mitigated through subsequent strategic or restructuring initiatives, TSAs, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations following the completed sale of the discontinued operations.

See Note 3 - Divestitures in the Notes to the Consolidated Financial Statements included elsewhere in this Annual 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 operating lease assets with below market rent, among others;

• Non-cash gain from the remeasurement of the contingent consideration liability recognized during the year ended September 30, 2022, associated with the Tristar Business acquisition.

See Note 4 - Acquisitions in the Notes to the Consolidated Financial Statements included elsewhere in this Annual 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 year ended September 30, 2021, the Company sold its remaining shares in Energizer common stock.

See Note 7 – Fair Value of Financial Instruments in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

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

• Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations after an acquisition;

• Incremental reserves for non-recurring litigation or environmental remediation activity including (1) 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 year ended September 30, 2021, (2) environmental remediation reserves realized during the year ended September 30, 2019 on legacy properties and former manufacturing sites assumed by the organization which had previously been exited by the Company, and (3) legal settlement costs associated with retained litigation from the Company's divested GAC operations realized during the year ended September 30, 2019.

See Note 21 – Commitments and Contingencies in Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further detail;

• 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 GPC commercial operations and distribution in Europe.

See Note 3 - Divestitures in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further detail;

• Gain on extinguishment of the Salus CLO debt due to the discharge of the obligation during the year ended September 30, 2020.

See Note 12 - Debt in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

• Foreign currency gains and losses attributable to multicurrency loans for the year ended September 30, 2020 and 2019, that were entered into with foreign subsidiaries in exchange for the receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestitures;

• Other adjustments primarily consisting of costs attributable to (1) incremental fines and penalties realized for delayed shipments following the transition of a third-party logistics service provider in GPC during the year ended September 30, 2021;

(2) costs associated with Salus operations during the years ended September 30, 2021, 2020 and 2019 as they are not considered a component of continuing commercial products company;

(3) expenses and cost recovery for flood damage at the Company's facilities in Middleton, Wisconsin recognized during the years ended September 30, 2020 and 2019;

(4) incremental costs for separation of a key executives during the years ended September 30, 2020 and 2019;

(5) costs associated with a safety recall in GPC during the year ended September 30, 2019;

(6) operating margin on H&G sales to GAC discontinued operations during the year ended September 30, 2019;

and (7) certain fines and penalties for delayed shipments following the completion of a GPC distribution center consolidation in EMEA during the year ended September 30, 2019.

The following is a reconciliation of net income to Adjusted EBITDA for the years ended September 30, 2021, 2020 and 2019 for SBH:

SPECTRUM BRANDS HOLDINGS, INC.

• 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 years ended September 30, 2022 and 2021.

See Note 20 – Commitments and Contingencies in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further detail;

• Early settlement on certain foreign currency cash flow hedges in our EMEA region prior to their stated maturity due to changes in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region, resulting in the recognition of realized gains during the third quarter ended July 3, 2022, plus the proforma effect of assumed losses following the early settlement date for the subsequent settlement periods through the original stated maturities.

See Note 14- Derivatives in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for further details;

• Incremental costs recognized by the HPC segment attributable to the realization of product recalls initiated by the Company during the year ended September 30, 2022.

See Note 20 - Commitments and Contingencies in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for further details;

• Other adjustments primarily attributable to (1) costs associated with Salus operations as they are not considered a components of the continuing commercial products company and (2) other key executive severance related costs (3) asset write-off for exit of certain GPC brands within China during year ended September 30, 2022, and (4) write-off of cost based investment previously held by the GPC segment during the year ended September 30, 2022.

Table of Conten t s

The following is a reconciliation of net income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin for SBH and its segments for the year ended September 30, 2022.

(in millions) HPC GPC H&G Corporate Consolidated

Year Ended September 30, 2021

Net income from continuing operations $ 46.1 $ 127.7 $ 83.7 $ (242.2) $ 15.3

Net income (loss) from continuing operations $ 25.4 $ 75.2 $ 57.2 $ (234.8) $ (77.0)

Income tax benefit — — — (13.3) (13.3)

Interest expense — — — 99.4 99.4

Depreciation and amortization 44.0 39.3 19.2 14.5 117.0

Depreciation 12.4 14.8 7.2 14.6 49.0

Amortization 16.3 22.6 11.4 — 50.3

EBITDA 54.1 112.6 75.8 (134.1) 108.4

Share and incentive based compensation — — — 10.2 10.2

Restructuring and related charges 9.1 15.2 0.4 15.6 40.3

Transaction related charges 3.4 16.5 10.8 25.6 56.3

Tristar Business acquisition and integration 24.3 — — — 24.3

Rejuvenate integration — — 6.8 — 6.8

Armitage integration — 1.4 — — 1.4

Omega production integration — 4.6 — — 4.6

HHI divestiture — — — 6.3 6.3

HPC separation initiatives — — — 19.1 19.1

Coevorden operations divestiture — 8.8 — — 8.8

Fiscal 2022 restructuring initiatives 4.9 3.6 0.7 0.6 9.8

Global ERP transformation — — — 13.1 13.1

GPC distribution center transition — 35.8 — — 35.8

Global productivity improvement program 2.4 0.8 — 1.9 5.1

Russia closing initiatives 1.9 — — — 1.9

HPC brand portfolio transitions 1.3 — — — 1.3

Other project costs 0.5 0.1 — 11.5 12.1

Unallocated shared costs — — — 27.6 27.6

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

Inventory acquisition step-up — 3.4 3.9 — 7.3

Legal and environmental remediation reserves — — 6.0 — 6.0

Coevorden tolling related charges — 6.2 — — 6.2

Other — 3.8 — 0.1 3.9

Non-cash purchase accounting adjustments 8.3 — — — 8.3

Gain from remeasurement of contingent consideration liability (28.5) — — — (28.5)

Legal and environmental — — 1.5 — 1.5

Early settlement of foreign currency cash flow hedges (5.1) — — — (5.1)

HPC product recall 5.5 — — — 5.5

Salus and other adjustments — 0.9 1.4 2.5 4.8

Adjusted EBITDA $ 69.6 $ 168.6 $ 86.2 $ (41.3) $ 283.1

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Adjusted EBITDA Margin 5.1 % 14.3 % 14.7 % — 9.0 %

Year Ended September 30, 2020

Table of Conten t s

The following is a reconciliation of net income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin for SBH and its segments for the year ended September 30, 2021.

(in millions) HPC GPC H&G Corporate Consolidated

Net income (loss) from continuing operations $ 46.1 $ 127.7 $ 83.7 $ (242.2) $ 15.3

Income tax expense — — — 27.3 27.3

Interest expense — — — 93.7 93.7

Depreciation and amortization 35.2 44.4 20.4 14.7 114.7

EBITDA 78.1 89.3 111.6 (95.7) 183.3

Share and incentive based compensation — — — 36.1 36.1

Restructuring and related charges 4.6 20.8 0.5 45.7 71.6

Transaction related charges 8.8 10.8 — 3.5 23.1

Unallocated shared costs — — — 17.4 17.4

Loss on Energizer investment — — — 16.8 16.8

Loss on sale of Coevorden operations — 26.8 — — 26.8

Write-off from impairment of intangible assets — 24.2 — — 24.2

Foreign currency loss on multicurrency divestiture loans 0.6 — — 3.2 3.8

Salus CLO debt extinguishment — — — (76.2) (76.2)

Other 0.1 0.1 — (3.2) (3.0)

Adjusted EBITDA $ 92.2 $ 172.0 $ 112.1 $ (52.4) $ 323.9

Net Sales $ 1,107.6 $ 962.6 $ 551.9 $ — $ 2,622.1

Adjusted EBITDA Margin 8.3 % 17.9 % 20.3 % — 12.4 %

Year Ended September 30, 2019

Net (loss) income from continuing operations $ (127.8) $ 63.4 $ 84.9 $ (322.7) $ (302.2)

Income tax benefit — — — (26.4) (26.4)

Interest expense — — — 116.5 116.5

Depreciation and amortization 64.6 48.8 19.3 14.6 147.3

EBITDA (63.2) 112.2 104.2 (201.7) (48.5)

Share and incentive based compensation — — — 47.6 47.6

Restructuring and related charges 8.1 7.6 1.8 43.5 61.0

Transaction related charges 7.4 2.5 — 11.0 20.9

Unallocated shared cost — — — 15.7 15.7

Loss on Energizer investment — — — 12.1 12.1

Write-off from impairment of goodwill 116.0 — — — 116.0

Write-off from impairment of intangible assets 18.8 16.6 — — 35.4

Legal and environmental remediation reserves — — — 10.0 10.0

Foreign currency loss on multicurrency divestiture loans — — — 36.2 36.2

Other 0.1 3.7 (0.5) 3.6 6.9

Adjusted EBITDA $ 87.2 $ 142.6 $ 105.5 $ (22.0) $ 313.3

Net Sales $ 1,068.1 $ 870.2 $ 508.1 $ — $ 2,446.4

Adjusted EBITDA Margin 8.2 % 16.4 % 20.8 % — 12.8 %

The following is a reconciliation of net income to Adjusted EBITDA for the years ended September 30, 2021, 2020 and 2019 for SB/RH:

SB/RH HOLDINGS, LLC (in millions) HPC GPC H&G Corporate Consolidated

Year Ended September 30, 2021

Net income from continuing operations $ 46.1 $ 127.7 $ 83.7 $ (240.2) $ 17.3

Income tax benefit — — — (25.0) (25.0)

Interest expense — — — 116.8 116.8

Depreciation and amortization 44.0 39.3 19.2 14.5 117.0

Depreciation 13.8 15.4 8.1 14.6 51.9

Amortization 30.2 23.8 11.1 — 65.1

EBITDA 90.1 166.9 102.9 (137.5) 222.4

Share and incentive based compensation — — — 29.4 29.4

Restructuring and related charges 9.1 15.2 0.4 15.6 40.3

Transaction related charges 3.4 16.5 10.8 25.6 56.3

Tristar Business acquisition — — — 0.1 0.1

Rejuvenate acquisition and integration — — 10.8 — 10.8

Armitage acquisition and integration — 10.9 — — 10.9

Omega production integration — 1.3 — — 1.3

HHI divestiture — — — 9.6 9.6

HPC separation initiatives — — — 14.2 14.2

Coevorden operations divestiture — 11.6 — — 11.6

Global ERP transformation — — — 4.3 4.3

GPC distribution center transition — 15.2 — — 15.2

Global productivity improvement program 8.0 2.4 0.4 10.4 21.2

Other project costs 4.5 0.4 — 2.5 7.4

Unallocated shared costs — — — 26.9 26.9

Non-cash purchase accounting adjustments — 3.4 3.9 — 7.3

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

Inventory acquisition step-up — 3.4 3.9 — 7.3

Legal and environmental remediation reserves — — 6.0 — 6.0

Coevorden tolling related charges — 6.2 — — 6.2

Other — 3.8 — 0.1 3.9

Legal and environmental — — 6.0 — 6.0

Salus and other adjustments — — — 0.1 0.1

Adjusted EBITDA $ 102.6 $ 212.1 $ 124.0 $ (46.9) $ 391.8

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Adjusted EBITDA Margin 8.1 % 18.8 % 20.4 % — 13.1 %

Year Ended September 30, 2020

Table of Conten t s

The following is a reconciliation of net income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin for SB/RH and its segments for the year ended September 30, 2022.

(in millions) HPC GPC H&G Corporate Consolidated

Net income (loss) from continuing operations $ 25.4 $ 75.2 $ 57.2 $ (232.8) $ (75.0)

Income tax expense — — — 14.5 14.5

Income tax benefit — — — (12.9) (12.9)

Interest expense — — — 99.8 99.8

Depreciation and amortization 35.2 44.4 20.4 14.7 114.7

Depreciation 12.4 14.8 7.2 14.6 49.0

Amortization 16.3 22.6 11.4 — 50.3

EBITDA 54.1 112.6 75.8 (131.3) 111.2

Share and incentive based compensation — — — 9.1 9.1

Restructuring and related charges 4.6 20.8 0.5 45.7 71.6

Transaction related charges 8.8 10.8 — 3.5 23.1

Tristar Business acquisition and integration 24.3 — — — 24.3

Rejuvenate integration — — 6.8 — 6.8

Armitage integration — 1.4 — — 1.4

Omega production integration — 4.6 — — 4.6

HHI divestiture — — — 6.3 6.3

HPC separation initiatives — — — 19.1 19.1

Coevorden operations divestiture — 8.8 — — 8.8

Fiscal 2022 restructuring initiatives 4.9 3.6 0.7 0.6 9.8

Global ERP transformation — — — 13.1 13.1

GPC distribution center transition — 35.8 — — 35.8

Global productivity improvement program 2.4 0.8 — 1.9 5.1

Russia closing initiatives 1.9 — — — 1.9

HPC brand portfolio transitions 1.3 — — — 1.3

Other project costs 0.5 0.1 — 11.5 12.1

Unallocated shared costs — — — 27.6 27.6

Loss on Energizer investment — — — 16.8 16.8

Loss on sale of Coevorden operations — 26.8 — — 26.8

Write-off from impairment of intangible assets — 24.2 — — 24.2

Foreign currency loss on multicurrency divestiture loans 0.6 — — 3.2 3.8

Non-cash purchase accounting adjustments 8.3 — — — 8.3

Gain from remeasurement of contingent consideration liability (28.5) — — — (28.5)

Legal and environmental — — 1.5 — 1.5

Early settlement of foreign currency cash flow hedges (5.1) — — — (5.1)

HPC product recall 5.5 — — — 5.5

Other — 0.9 1.4 2.2 4.5

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Adjusted EBITDA Margin 5.1 % 14.3 % 14.7 % — 9.1 %

Year Ended September 30, 2019

Net (loss) income from continuing operations $ (127.8) $ 63.4 $ 84.9 $ (281.8) $ (261.3)

Table of Conten t s

The following is a reconciliation of net income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin for SB/RH and its segments for the year ended September 30, 2021.

(in millions) HPC GPC H&G Corporate Consolidated

Net income (loss) from continuing operations $ 46.1 $ 127.7 $ 83.7 $ (240.2) $ 17.3

Income tax benefit — — — (25.0) (25.0)

Interest expense — — — 116.8 116.8

Depreciation and amortization 64.6 48.8 19.3 14.6 147.3

Depreciation 13.8 15.4 8.1 14.6 51.9

Amortization 30.2 23.8 11.1 — 65.1

EBITDA 90.1 166.9 102.9 (133.8) 226.1

Share and incentive based compensation — — — 27.7 27.7

Restructuring and related charges 8.1 7.6 1.8 43.5 61.0

Transaction related charges 7.4 2.5 — 11.0 20.9

Unallocated shared cost — — — 15.7 15.7

Loss on Energizer investment — — — 12.1 12.1

Write-off from impairment of goodwill 116.0 — — — 116.0

Write-off from impairment of intangible assets 18.8 16.6 — — 35.4

Legal and environmental remediation reserves — — — 10.0 10.0

Foreign currency loss on multicurrency divestiture loans — — — 36.2 36.2

Tristar Business acquisition — — — 0.1 0.1

Rejuvenate acquisition and integration — — 10.8 — 10.8

Armitage acquisition and integration — 10.9 — — 10.9

Omega production integration — 1.3 — — 1.3

HHI divestiture — — — 9.6 9.6

HPC separation initiatives — — — 14.2 14.2

Coevorden operations divestiture — 11.6 — — 11.6

Global ERP transformation — — — 4.3 4.3

GPC distribution center transition — 15.2 — — 15.2

Global productivity improvement program 8.0 2.4 0.4 10.4 21.2

Other project costs 4.5 0.4 — 2.5 7.4

Unallocated shared costs — — — 26.9 26.9

Non-cash purchase accounting adjustments — 3.4 3.9 — 7.3

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

Legal and environmental — — 6.0 — 6.0

Other — — — 0.1 0.1

2 unchanged sentences

Adjusted EBITDA Margin 8.1 % 18.8 % 20.4 % — 13.1 %

Table of Conten t s

Consolidated Results of Operations

The following section provides an analysis of our operations for the years ended September 30, 2022 and 2021.

The following is summarized consolidated results of operations for SBH for the years ended September 30, 2022 and 2021, respectively:

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2022 2021 Variance

2020 2019 Variance

Net sales $ 3,132.5 $ 2,998.1 $ 134.4 4.5 %

Gross profit 990.4 1,034.6 (44.2) (4.3 %)

Gross profit margin 34.5 % 33.5 % 100 bps 33.5 % 33.5 % — bps

Gross profit margin 31.6 % 34.5 % (290) bps

Operating expenses $ 967.2 $ 937.5 $ 29.7 3.2 %

Interest expense 99.4 116.5 (17.1) (14.7 %)

Other non-operating (income) expense, net (8.3) 16.2 (24.5) n/m 16.2 43.4 (27.2) (62.7) %

Income tax (benefit) expense (26.4) 27.3 (53.7) n/m 27.3 (52.0) 79.3 n/m

Net income (loss) from continuing operations 15.3 (52.4) 67.7 n/m (52.4) (302.2) 249.8 n/m

Other non-operating expense (income), net 14.1 (8.3) 22.4 n/m

Income tax benefit (13.3) (26.4) 13.1 (49.6 %)

Net (loss) income from continuing operations (77.0) 15.3 (92.3) n/m

Income from discontinued operations, net of tax 149.7 174.3 (24.6) (14.1 %)

4 unchanged sentences

2022 2021 Variance

2020 2019 Variance

$ 1,370.1 $ 1,260.1 $ 110.0 8.7 %

3 unchanged sentences

(in millions)

Net Sales for the year ended September 30, 2020 and 2019, respectively $ 2,622.1 $ 2,446.4

Net Sales for the year ended September 30, 2021 $ 2,998.1

Increase due to acquisition

Increase in HPC 121.4 58.4

Increase in GPC 72.5

Increase in H&G 33.0 43.9

Decrease in HPC (20.7)

Decrease in H&G (47.6)

Foreign currency impact, net (94.9)

Net Sales for the year ended September 30, 2021 and 2020, respectively $ 2,998.1 $ 2,622.1

Net Sales for the year ended September 30, 2022 $ 3,132.5

Gross Profit.

Gross profit for the year ended September 30, 2021 increased primarily due to higher sales volume with increased productivity, favorable mix with incremental product and input costs partially offset by pricing adjustments.

Gross profit for the year ended September 30, 2020 increased with no change in margin, primarily due to increased sales volume with incremental product and input costs including tariffs, offset by productivity, favorable product mix and pricing adjustments.

Gross profit and gross profit margin for the year ended September 30, 2022 decreased primarily due to accelerated freight and input cost inflation pacing ahead of pricing actions taken during the year, increased costs attributable to constrained supply chain and lower volumes compared to the prior year which benefited from reopening trends and stimulus spending.

Operating Expenses.

Operating expenses for the year ended September 30, 2021 increased due to higher selling expenses of $78.3 million attributable to higher freight and distribution costs and higher marketing and advertising spend, increased general and administrative costs of $26.3 million and increased transaction related charges of $33.2 million due to strategic acquisition and divestiture activities;

offset by a decrease in restructuring costs of $19.4 million with loss from sale of Coevorden facility of $26.8 million and impairment of related intangible assets of $24.2 million in the prior year.

Operating expenses for the year ended September 30, 2020 decreased due to the impairment of HPC goodwill of $116.0 million and impairment of intangible assets of $35.4 million in the previous year with offsets by the recognition of loss from sale of Coevorden facility of $26.8 million and impairment of related intangible assets $24.2 million.

See Note 2 - Significant Accounting Policies and Practices and Note 5 - Restructuring and Related Charges in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for additional detail on transaction and restructuring related charges.

Operating expenses for the year ended September 30, 2022 increased due to higher selling expenses of $79.1 million from higher distribution and transportation costs, increase in warehousing and inventory management costs, operating inefficiencies from labor inflation and turnover, and decrease in general and administrative costs of $17.8 million primarily from reduction in incentive related compensation costs and cost saving initiatives during the second half of the year, partially offset by increased expenses towards strategic transaction and other restructuring related initiatives during the year, plus realized gain of $28.5 million from the contingent consideration liability associated with the Tristar Business acquisition.

See Note 4 - Acquisitions in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for additional detail.

Interest Expense.

Interest expense for the year ended September 30, 2021 increased due to one-time refinancing charges offset by lower average borrowing rates.

Interest expense for the year ended September 30, 2020 decreased due to lower borrowings and average interest rates during the period.

See Note 12 - Debt in Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Interest expense for the year ended September 30, 2022, decreased due to one-time refinancing charges in the prior year, offset by a higher level of outstanding borrowings on the Revolver Facility used to fund the Tristar Business acquisitions and working capital requirements with increased borrowing rates on variable rate debt.

See Note 12 - Debt in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Other Non-Operating Expense, Net.

Other non-operating expense, net for the year ended September 30, 2021 decreased due to realized gains on the investment in Energizer common stock which was fully liquidated in January 2021.

Other non-operating expense, net for the year ended September 30, 2020 decreased primarily due to foreign currency losses in the previous year related to multicurrency loans with foreign subsidiaries associated with the GBL and GAC divestitures and realized and unrealized losses on the investment in Energizer common stock.

Other non-operating expense, net for the year ended September 30, 2022 increased due to unfavorable foreign currency exchange rates, primarily from the weakening of the British Pound and Euro, with realized gains in the prior year from our previously held investment in Energizer common stock, which was sold in January 2021.

See Note 7 - Fair Value of Financial Instruments in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for additional detail.

Income Taxes.

The effective tax rate was 237.8% for the year ended September 30, 2021 compared to 108.8% for the year ended September 30, 2020 and 14.7% for the year ended September 30, 2019.

Pretax income from continuing operations in the year ended September 30, 2021 was close to breakeven and therefore many items have a sizeable impact on the effective tax rate.

The effective tax rate was 14.8% for the year ended September 30, 2022 compared to 237.8% for the year ended September 30, 2021.

Our annual effective tax rate is significantly impacted by income earned outside the U.S.

3 unchanged sentences

federal statutory rate.

The year ended September 30, 2021 tax expense was significantly impacted by valuation allowance release, tax expense due to an increase to the United Kingdom's future tax rate, and tax benefits from retroactive law changes for global intangible low taxed income.

See Note 16 – Income Taxes in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for additional detail.

The tax expense for the year ended September 30, 2022 was significantly impacted by a valuation allowance increase and share based compensation.

Pretax income from continuing operations in the year ended September 30, 2021 was close to breakeven and therefore many items have a sizeable impact on the effective tax rate.

The tax expense for the year ended September 30, 2021 was also significantly impacted by valuation allowance release, tax expense due to an increase to the United Kingdom's future tax rate, and tax benefits from retroactive law changes for global intangible low taxed income.

See Note 16 – Income Taxes in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for additional detail.

Table of Conten t s

Income From Discontinued Operations.

Discontinued operations includes the results of operations, financial position and cash flows for the GBL and GAC divisions sold during the year ended September 30, 2019, effective January 2, 2019 and January 28, 2019, respectively, plus the operations, financial position and cash flows for HHI for all comparable periods, with the HHI disposal group being held for sale as of September 30, 2021.

Income from discontinued operations, net of tax increased during the year ended September 30, 2021 due to increased income from operations of HHI driven by strong consumer demand and new product innovation driving sales growth across retail, e-commerce and new build channels coupled with fulfillment of prior year retail inventory rebuild when the prior year was impacted by COVID-19 supply related disruptions;

partially offset by higher freight and input cost inflation and higher marketing investments.

Income from discontinued operations, net of tax, decreased during the year ended September 30, 2020 due to the net gain realized from the disposition of the GBL and GAC divestitures during the year ended September 30, 2019, offset by the decrease in income from operations of HHI.

Decrease in HHI operations was attributable to lower sales volumes driven by COVID-19 supply constraints coupled with higher input costs and tariffs, offset by improved productivity, pricing and mix, retrospective tariff exclusions and reduced restructuring spend;

and lower allocation of interest costs from corporate debt allocated to discontinued operations attributable to the paydown of debt following the disposition of the GBL and GAC divestitures.

See Note 3 – Divestitures in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for more information on the divestitures and the assets and liabilities classified as held for sale.

Noncontrolling Interest.

The net income attributable to noncontrolling interest reflects the share of the net income of our subsidiaries, which are not wholly-owned, attributable to the accounting interest.

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

Discontinued operations primarily reflects the income from the discontinued operations of the HHI business and the incremental changes to tax and legal indemnifications associated with the Company's previous divestitures of its Global Batteries and Lighting ("GBL") and Global Auto Care ("GAC") divisions.

Income from discontinued operations attributable to the HHI business decreased during the year ended September 30, 2022 due to lower sales volume following post-pandemic volumes in the prior year, increasing inflationary costs and higher freight spend outpacing pricing actions taken during the year, partially offset by lower depreciation and amortization while held for sale.

See Note 3 - Divestitures in Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for additional detail.

The following is summarized consolidated results of operations for SB/RH for the years ended September 30, 2022 and 2021:

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2022 2021 Variance

2020 2019 Variance

Net sales $ 3,132.5 $ 2,998.1 $ 134.4 4.5 %

Gross profit 990.4 1,034.6 (44.2) (4.3 %)

Gross profit margin 34.5 % 33.5 % 100 bps 33.5 % 33.5 % — bps

Gross profit margin 31.6 % 34.5 % (290) bps

Operating expenses $ 964.5 $ 933.8 $ 30.7 3.3 %

Interest expense 99.8 116.8 (17.0) (14.6 %)

Other non-operating (income) expense, net (8.3) 16.3 (24.6) n/m 16.3 43.6 (27.3) (62.6 %)

Income tax (benefit) expense (25.0) 14.5 (39.5) n/m 14.5 (36.1) 50.6 n/m

Net income (loss) from continuing operations 17.3 (108.4) 125.7 n/m (108.4) (261.3) 152.9 (58.5 %)

Other non-operating expense (income), net 14.0 (8.3) 22.3 n/m

Income tax benefit (12.9) (25.0) 12.1 (48.4 %)

Net (loss) income from continuing operations (75.0) 17.3 (92.3) n/m

Income from discontinued operations, net of tax 149.7 174.3 (24.6) (14.1 %)

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n/m = not meaningful

For the years ended September 30, 2021 and 2020, the change in net sales, gross profit, operating expenses and other non-operating expenses are primarily attributable to changes in SBH previously discussed.

The change in interest expense is primarily attributable to the changes in SBH previously discussed except for the non-cash gain on extinguishment of Salus CLO debt.

For the years ended September 30, 2022 and 2021, the change in net sales, gross profit and gross profit margin, operating expenses, interest expense and other non-operating expenses (income) are primarily attributable to changes in SBH previously discussed.

Income from discontinued operations is attributable to SBH previously discussed.

The effective tax rate was 324.7% for the year ended September 30, 2021 compared to (15.4%) for the year ended September 30, 2020 and 12.1% for the year ended September 30, 2019.

The effective tax rate was 14.6% for the year ended September 30, 2022 compared to 324.7% for the year ended September 30, 2021.

The change in tax rate is primarily attributable to the changes in SBH previously discussed.

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2022 2021 Variance

2020 2019 Variance

Net sales $ 1,370.1 $ 1,260.1 $ 110.0 8.7 %

Operating income (loss) 46.4 42.9 3.5 8.2 % 42.9 (127.5) 170.4 n/m

Operating income margin 3.7 % 3.9 % (20) bps 3.9 % (11.9) % 1,580 bps

Operating income 30.2 46.4 (16.2) (34.9) %

Operating income margin 2.2 % 3.7 % (150) bps

Adjusted EBITDA $ 69.6 $ 102.6 $ (33.0) (32.2 %)

Adjusted EBITDA margin 8.1 % 8.3 % (20) bps 8.3 % 8.2 % 10 bps

n/m = not meaningful

Net sales for the year ended September 30, 2021 increased driven by strong growth in hair care products as part of the personal care appliance category and strong growth in cooking, food preparation and garment within the small home appliance category;

coupled with a strong holiday season earlier in the year, new product introductions, continued e-commerce growth, expanded distribution in LATAM markets, re-opening of traditional retail channels and pricing adjustments in response to higher material input costs partially mitigated by supply chain constraints limiting distribution.

Organic net sales increased $121.4 million, or 11.0%, excluding favorable foreign exchange impact.

Operating income and Adjusted EBITDA for the year ended September 30, 2021 increased with a decrease in margin due to increased sales from volume and pricing with favorable foreign currency offset by increased material and input cost inflation, freight costs and increased marketing investments;

with higher depreciation and amortization expense impacting operating income and margin.

Net sales for the year ended September 30, 2020 increased driven by growth in both small appliances and personal care including strong net sales growth in the U.S.

from e-commerce and mass channels with continued strength in convenience cooking including new product introductions from George Foreman grills, holiday season promotional volumes, coupled with demand increase partially offset by supply constraints and store closures in response to the COVID-19 pandemic.

Organic net sales increased $58.4 million or 5.5% excluding unfavorable foreign exchange impact.

Operating income and Adjusted EBITDA for the year ended September 30, 2020 increased with an increase in margin due to higher sales volumes with favorable product mix and productivity with benefit from retrospective tariff exclusions, offset by incremental input costs driven by tariffs, increased marketing and advertising spend, plus incremental foreign currency transaction loss.

Operating income and margin for the year ended September 30, 2019 was further impacted by the recognition of goodwill impairment of $116.0 million, write-off of indefinite lived intangible assets of $18.8 million, and incremental depreciation and amortization of $29.0 million in the prior year associated with HPC business being de-recognized from held for sale.

Adjusted EBITDA margin 5.1 % 8.1 % (300) bps

Net sales for the year ended September 30, 2022 increased due to acquisition sales from the Tristar Business of $189.7 million, with significant unfavorable foreign currency impact of $59.0 million, predominantly impacting EMEA sales due to the weakening of the British Pound and Euro, and resulting in a decrease in organic net sales of $20.7 million, or 1.6%.

The decrease is be attributable to lower category demand compared to prior year reopening trends and reduced replenishment orders in the second half of the year driven by high retail inventory levels, partially offset by positive pricing adjustments on inflationary costs, strong market growth in LATAM driven by higher consumer demand and expanded distribution and post-pandemic gains in garment care product categories.

Operating income, adjusted EBITDA and margins for the year ended September 30, 2022 decreased due to accelerated freight and input cost inflation ahead of incremental pricing actions taken during the year, incremental distribution and inventory management costs due to supply chain challenges, negative impact of foreign currency with the weakening of the British Pound and Euro, with incremental transaction 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 $28.5 million gain from the remeasurement of contingent consideration liability associated with the Tristar Business acquisition.

See Note 4 -Acquisitions for further detail on Tristar Business acquisition.

Table of Conten t s

Global Pet Care (GPC)

(in millions, except %)

2021 2020 Variance

2020 2019 Variance

(in millions, except %) 2022 2021 Variance

Net sales $ 1,175.3 $ 1,129.9 $ 45.4 4.0 %

Operating income 78.3 129.9 (51.6) (39.7 %)

Operating income margin 11.5 % 4.9 % 660 bps 4.9 % 7.5 % (260) bps

Operating income margin 6.7 % 11.5 % (480) bps

Adjusted EBITDA $ 168.6 $ 212.1 $ (43.5) (20.5 %)

Adjusted EBITDA margin 18.8 % 17.9 % 90 bps 17.9 % 16.4 % 150 bps

Net sales for the year ended September 30, 2021 increased due to acquisition sales of $99.5 million coupled with continued growth in aquatics and companion animal categories highlighted by dog chews and treats, with strong development across distribution channels led by expanded e-commerce, partially mitigated by lower than anticipated fulfillment levels attributable to distribution center transitions during the year.

Organic net sales increased $49.4 million, or 5.1% excluding favorable foreign exchange impact and acquisition sales.

Operating income and Adjusted EBITDA for the year ended September 30, 2021 increased with an increase in margins due to higher volume, favorable product mix, pricing and productivity, offset by higher material input costs, freight and distribution costs, and incremental costs and inefficiencies with distribution center transition, including higher than normal customer fines and penalties further impacting operating income and margin.

Net sales for the year ended September 30, 2020 increased due to continued growth in aquatics and companion animal products driven by broad based demand across all aquatic product types, including significant demand for hard goods through e-commerce and pet specialty channels, plus growth in companion animal categories driven by strong consumables demand in the dollar, mass and e-commerce channels and increased consumer demand experienced during the COVID-19 pandemic.

Organic net sales increased $86.0 million or 9.9% due to unfavorable foreign exchange impact and acquisition sales.

Operating income for the year ended September 30, 2020 decreased with a decline in margin due to the recognition of a loss on assets held for sale of $26.8 million associated with the Coevorden Operations divestiture, and a $24.2 million write-off from impairment of intangible assets;

incremental transaction costs associated with the Omega acquisition and Coevorden Operations divestiture, plus restructuring costs and accelerated depreciation as part of the Global Productivity Improvement Program, tariffs and additional investment in marketing and advertising, offset by increased sales volume, product cost improvements, and positive pricing.

Adjusted EBITDA increased with an increase in margin due to increased sales volume, productivity, and positive pricing, offset by tariffs and additional investment in marketing and advertising.

Adjusted EBITDA margin 14.3 % 18.8 % (450) bps

Net sales for the year ended September 30, 2022 increased with greater demand in dog chews and treats and aquatic consumables partially offset by lower sales on hard goods and aquatic equipment fueled by new hobbyist that entered the category during the pandemic.

Pricing adjustments implemented during the year to address inflationary costs positively impacted net sales with improved fulfillment following transitions at our U.S.

distribution center, partially mitigated by a temporary shut-down of key supplier manufacturing facilities and supply chain capacity constraints impacting fulfillment earlier in the fiscal year and the weakening of the British Pound and Euro negatively impacting EMEA sales.

Organic net sales increased $72.5 million, or 6.4% excluding significant unfavorable foreign exchange impact of $35.9 million and acquisition sales from Armitage of $8.8 million.

Operating income, adjusted EBITDA and margins for the year ended September 30, 2022 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 negative impact of foreign currency with the weakening of the British Pound and Euro, with incremental costs to facilitate the transition of its U.S.

distribution operations further impacting operating income and margin.

Home & Garden (H&G)

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2022 2021 Variance

2020 2019 Variance

$ 587.1 $ 608.1 $ (21.0) (3.5 %)

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57.3 83.7 (26.4) (31.5 %)

Operating income margin 13.8 % 16.5 % (270) bps 16.5 % 16.7 % (20) bps

Operating income margin 9.8 % 13.8 % (400) bps

Adjusted EBITDA

$ 86.2 $ 124.0 $ (37.8) (30.5 %)

Adjusted EBITDA margin 20.4 % 20.3 % 10 bps 20.3 % 20.8 % (50) bps

Net sales for the year ended September 30, 2021 increased across product categories driven by strong early season orders across channels and strong early season POS coupled with strong late season consumer demand and acquisition sales.

Organic net sales increased $33.0 million, or 6.0% excluding acquisition sales.

Operating income for the year ended September 30, 2021 decreased with a decline in margin due to increased material input costs, advertising and marketing investment, and higher distribution expenses, partially offset by higher sales volumes and positive pricing and productivity improvements;

with increased acquisition related costs and legal reserves.

Adjusted EBITDA increased with an increase in margin attributable to increased material input costs, advertising and marketing investment, and higher distribution expenses, partially offset by higher sales volumes and positive pricing and productivity improvements

Net sales for the year ended September 30, 2020 increased driven by growth across all three major product categories of controls, household insecticides and repellents;

and benefited from strong point of sale and replenishment as retailers supported the extended selling season.

Operating income and Adjusted EBITDA for the year ended September 30, 2020 increased with a decline in margin due to increased sales volume offset by higher material and input costs including tariffs, plus higher marketing and advertising investment spending.

Adjusted EBITDA margin 14.7 % 20.4 % (570) bps

Net sales for the year ended September 30, 2022 decreased primarily from unfavorable weather conditions across the U.S.

with a cold, wet start to the season and excess heat and drought conditions late in the season driving down demand, most significantly impacting repellent products, and reducing POS and foot traffic at home center retailers which adversely impacted sales across all categories, increased retail inventory levels and reduced retailer replenishment orders.

Net sales were positively impacted by pricing adjustments implemented during the year to address inflationary costs and acquisition sales from Rejuvenate of $26.6 million.

Organic net sales decreased $47.6 million, or 7.8%, excluding acquisition sales.

Operating income, adjusted EBITDA and margins for the year ended September 30, 2022 decreased due to lower volumes, higher freight and input cost inflation outpacing pricing actions taken during the year and unfavorable product mix.

Liquidity and Capital Resources

This section provides a discussion of our financial condition and an analysis of our cash flows for the years ended September 30, 2022 and 2021.

This section also provides a discussion of our contractual operations and other commercial commitments as well as our ability to fund future commitments and operating activities through sources of capital as of September 30, 2022.

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Cash flows from operating activities

Cash flows from operating activities by SBH continuing operations for the year ended September 30, 2021 decreased $112.6 million.

primarily attributable to the increased use in cash spend towards working capital, particularly from inventory build-up, and cash paid towards strategic transaction activity with increased cash generated by operations from continuing operations and lower spending on restructuring activities

Cash flows from operating activities by SBH continuing operations for the year ended September 30, 2020 increased $244.4 million due to cash provided by continuing operations with cash contributed by working capital primarily attributable to timing of accounts payable, reduction in cash paid for interest and taxes, lower spending towards strategic transaction, offset by increase in cash used towards restructuring activities during the year.

Changes in cash flows from operating activities by SB/RH continuing operations are primarily due to the SBH items discussed above except for an incremental operating cash outflow to its parent company for payments to SBH for the use of federal net operating losses, as provided under the Company's tax sharing agreement.

Cash flows from operating activities by SBH continuing operations for the year ended September 30, 2022 decreased $320.7 million due to a decrease in operating results with an increase in cash towards inflationary costs on raw materials and products, labor and freight, and increased supply chain costs contributing to higher inventory levels, plus increase in cash paid towards strategic transactions and other restructuring related initiatives.

Cash flows used in SB/RH continuing operations decreased $345.2 million primarily due to the SBH items previously discussed.

Cash flows from investing activities

Cash flows used in investing activities by SBH continuing operations for the year ended September 30, 2021 increased $525.9 million primarily due to increase in cash used for acquisitions of $413.0 million from the acquisitions of Rejuvenate and Armitage and higher cash proceeds in the prior year from divestiture activity of $32.6 million attributable to the Coevorden Facility, and the sale of Energizer common stock of $74.0 million, The Company sold its remaining investment in Energizer common stock in January 2021.

Cash flow from investing activities for SB/RH continuing operations for the year ended September 30, 2021 are primarily due to the SBH items previously discussed.

Cash flows from investing activities by SBH continuing operations for the year ended September 30, 2020 decreased $2,695.7 million primarily due to higher proceeds in the prior year from divestitures of $2,826.9 million attributable to the divestitures of GBL and GAC, offset by the cash proceeds from the Coevorden Operations divestiture, increase in cash used for acquisition of $16.9 million from the acquisition of Omega, offset by proceeds from the sale of Energizer common stock of $147.1 million.

Capital expenditures increased $3.7 million primarily towards investment in higher return cost reduction projects and related restructuring initiatives.

Cash flows from investing activities for SB/RH continuing operations for the year ended September 30, 2020 are primarily due to the SBH items previously discussed.

Cash flows used in investing activities by SBH continuing operations for the year ended September 30, 2022 decreased $64.8 million primarily due to the decrease in cash used for acquisitions, net of cash acquired, for the purchase of the Tristar Business of $272.1 million compared to the purchase of Armitage and Rejuvenate for $429.9 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 $20.4 million predominantly due to incremental investment in updating the Company's enterprise-wide operating systems.

Cash flow used in investing activities for SB/RH continuing operations decreased due to the SBH items previously discussed.

Table of Conten t s

Cash flows from financing activities

Cash flows used in financing activities by SBH continuing operations decreased $288.2 million for the year ended September 30, 2021 primarily due to lower stock repurchase activity, payment of contingent consideration associated with the GBL divestiture of $197.0 million in the prior year;

partially offset by reduced cash inflow from debt financing of $157.9 million primarily due to premiums and loss on extinguishment from refinancing activity.

During the year ended September 30, 2021, the Company realized $899.0 million of proceeds from the new Term Loan Facility and issuance of the 3.875% Notes, net discount, with payment of $891.2 million of outstanding principal on the 6.125% Notes and the 5.75% Notes including make whole premiums of $23.4 million, plus paydown of assumed debt from the acquisition of Armitage.

Refer to Note 12 - Debt in Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

There has been no issuance of common stock, other than through the Company's share-based compensation plan, with reduced spending on common stock repurchases of $239.0 million from the accelerated share repurchase arrangement and open market purchases in the prior year.

See Note 18 - Shareholder's Equity in Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

Cash dividend payments decreased due to lower shares outstanding with a consistent dividend rate of $0.42 per shares.

Cash flows provided by financing activities by SBH continuing operations increased $697.6 million for the year ended September 30, 2022 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 year and higher share based stock award withholding payments from the vesting of LTIP grants.

During the year ended September 30, 2022, the Company realized $740.0 million of proceeds from the Revolver Facility with amortizing payment on other outstanding debt of $12.7 million.

Refer to Note 12 - Debt in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

During the year ended September 30, 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.

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

See Note 17 - Shareholder's Equity and Note 18 - Share Based Compensation in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

Cash dividend payments decreased due to lower shares outstanding with a consistent quarterly dividend rate of $0.42 per shares.

Cash flows from financing activities for SB/RH continuing operations for the year ended September 30, 2022 are highly dependent upon the financing cash flow activity of SBH.

Cash flows used in financing activities by SBH continuing operations decreased $2,226.5 million for the year ended September 30, 2020 primarily due to the debt repayment activity in the prior year following the GBL and GAC divestitures, offset by the payment of the Varta contingent payment to Energizer subsequent to the GBL divestiture and incremental treasury share repurchase activity.

During the year ended September 30, 2020, SBH recognized net proceeds of $300.0 million from the issuance of 5.50% Notes.

The proceeds from the issuance of the 5.50% Notes were used for repayment of the Revolver Facility obligation.

The Company made $134.3 million payment on debts for the outstanding balance of 6.625% Notes of $117.4 million with premium of early extinguishment of $1.3 million, and other debt payments of $15.6 million.

There has been no issuance of common stock, other than through the Company's share-based compensation plan, with increased spending on common stock repurchase activity of $364.8 million from the accelerated share repurchase arrangement and open market purchases during the year.

See Note 18 - Shareholder's Equity in Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

Cash dividend payments decreased due to lower shares outstanding with a consistent dividend rate of $0.42 per shares.

Cash flows from financing activities for SB/RH continuing operations are highly dependent upon the financing cash flow activity of SBH.

Liquidity Outlook

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Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, and other factors.

During the fourth quarter ended September 30, 2021, SBH entered into a $150 million rule 10b5-1 repurchase to facilitate daily market share repurchases through September 2022 or until the cap is reached or agreement is terminated, of which $16.0 million was executed as of September 30, 2021.

The Company completed share repurchases under its $150 million rule 10b5-1 repurchase plan during the year ended September 30, 2022.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRD") was enacted into law which imposes a 1% excise tax on stock repurchases made after December 31, 2022.

See Note 17 - Shareholder's Equity in Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

Our long-term liquidity may be influenced by our ability to borrow additional funds, renegotiate existing debt, and raise equity under terms that are favorable to us.

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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 September 30, 2021, 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 September 30, 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.

Subsequent to the year ended September 30, 2022, on November 17, 2022, the Company entered into an amendment to the Credit Agreement to temporarily increase the maximum consolidated total net leverage ratio permitted to be no greater than 7.0 to 1.0, before returning to 6.0 to 1.0 at the earliest of (i) September 29, 2023, or (ii) 10 business days after the closing of the HHI divestiture or receipt of the related termination fee.

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

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This seasonality requires the Company to ship large quantities of product ahead of peak consumer buying season that can impact cash flow demands to meet manufacturing and inventory requirements earlier in the fiscal year, as well as extended credit terms and/or promotional discounts throughout the peak season.

The Company enters into factoring agreements and customers' supply chain financing arrangements to provide for the sale of certain trade receivables to unrelated third-party financial institutions.

From time to time, the Company enters into factoring agreements and customers' supply chain financing arrangements to provide for the sale of certain trade receivables to unrelated third-party financial institutions.

The factored receivables are accounted for as a sale without recourse, and the balance of the receivables sold are removed from the Consolidated Balance Sheet at the time of the sales transaction, with the proceeds received recognized as an operating cash flow.

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

The Company has factored certain of its trade receivables as of and during the year ended September 30, 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.

There are no guarantees provided by the Company or its subsidiaries and we do not enter into any agreements with the suppliers regarding their participation.

The Company's responsibility is limited to payments on the original terms negotiated with its suppliers, regardless of whether the suppliers sell their receivables to the financial institution, and continue to be recognized as accounts payable on the Company's Consolidated Balance Sheet with cash flow activity recognized as an operating cash flow.

The Company's responsibility is limited to payments on the original terms negotiated with its suppliers, regardless of whether the suppliers sell their receivables to the financial institution, and continue to be recognized as accounts payable on the Company's Consolidated Statement of Financial Position with cash flow activity recognized as an operating cash flow.

Table of Conten t s

The COVID-19 pandemic has not, as of the date of this report, materially impacted our operations or demand for our products and has not had a materially negative impact on the Company’s liquidity position.

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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 capital spend and assess operating spend to preserve cash and liquidity, including the suspension of our share repurchase activity.

However, the continued spread of COVID-19 has led 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 year ended September 30, 2022, we experienced an increased demand on cash requirements and liquidity due to inflationary costs and economic trends realized during the year and have taken measures to reduce operating costs and non-critical capital spend, which we expect to continue into the following year.

Despite these increased demands, we continue to generate operating cash flows to meet our short-term liquidity needs, along with our other tools previously discussed to manage working capital requirements throughout the fiscal year.

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

However, the spread of COVID-19 has led to disruption and volatility in the global capital markets, which, depending on future developments, could impact our capital resources and liquidity in the future.

Debt obligations

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Our Term Loan Facility is subject to quarterly amortizing payments of $1.0 million.

Refer to Note 12-Debt in notes to Consolidated Financial Statements included elsewhere in this Annual Report for expiration dates and maturity schedules on outstanding debt obligations for the following 5 years and thereafter.

Refer to Note 12 - Debt in the notes to the Consolidated Financial Statements included elsewhere in this Annual Report for expiration dates and maturity schedules on outstanding debt obligations for the following 5 years and thereafter.

In addition to the outstanding principal on our debt, we anticipate annual interest payments of $175.2 million in the aggregate and includes interest under our:

(i) Term Loan and Revolver Facility of $20.9 million, subject to variable interest rates;

(ii) 5.75% Notes of $25.9 million;

(i) Term Loan of $21.7 million, subject to variable interest rates based upon annualized rate of 5.54%, (ii) Revolver Facility of $54.1 million, subject to variable interest rates, based upon an annualized rate of 6.59% and outstanding balance based on projected utilization of the Revolver Facility during the following 12 months;

(iii) 5.75% Notes of $25.9 million;

(iv) 4.00% Notes of $16.9 million;

(v) 5.50% Notes of $16.5 million;(v) 3.875% Notes of $19.4 million.

Interest on the notes is payable semi-annually in arrears and interest under the Term Loan and Revolver Facility is payable on various interest payment dates as provided in the Senior Credit Agreement.

(v) 5.00% Notes of $15.0 million;

(vi) 5.50% Notes of $16.5 million;

(vii) 3.875% Notes of $19.4 million;

and (viii) interest of approximately $5.8 million attributable to finance leases.

Interest on the notes is payable semi-annually in arrears and interest under the Term Loan and Revolver Facility is payable on various interest payment dates as provided in the Credit Agreement.

Lease obligations

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The remaining balance due is net of refundable tax credits and overpayments that must be applied to the mandatory tax installments, and due to the credits and overpayments, the Company does not expect to make an additional payment for mandatory repatriation until Fiscal 2025.

See Note 16 - Income Taxes of Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

See Note 16 - Income Taxes of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Our Consolidated Statements of Financial Position also includes reserves for uncertain tax positions;

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See Note 3 – Divestitures of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Table of Conten t s

Guarantor Statements - SB/RH

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Net loss from continuing operations (263.2)

Net income 28.6

Net income attributable to controlling interest 28.6

Net loss (174.7)

Net loss attributable to controlling interest (174.7)

Statement of Financial Position Data

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Long-term debt with non-guarantor subsidiaries

Table of Conten t s

Critical Accounting Policies and Estimates

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The application of these accounting policies requires judgment and use of assumptions as to future events and outcomes that are uncertain and, as a result, actual results could differ from these estimates.

Refer to Note 2 - Significant Accounting Policies and Practices of Notes to the Consolidated Financial Statements for all relevant accounting policies.

Refer to Note 2 - Significant Accounting Policies and Practices of Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for all relevant accounting policies.

Goodwill, Intangible Assets and Other Long-Lived Assets

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Intangible and tangible assets with determinable lives are amortized or depreciated on a straight line basis over estimated useful lives.

Refer to Note 2 - Significant Accounting Policies and Practices of Notes to the Consolidated Financial Statements for more information about useful lives.

Refer to Note 2 - Significant Accounting Policies and Practices of Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for more information about useful lives.

On an annual basis, during the fourth quarter of the fiscal year, or more frequently if triggering events occur, the Company tests for impairment of goodwill by either performing a qualitative assessment or quantitative test for some or all reporting units.

Our reporting units are consistent with our operating segments.

See Note 22 - Segment Information of Notes to the Consolidated Financial Statements for further discussion of operating and reporting segments.

See Note 21 - Segment Information of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further discussion of operating and reporting segments.

The Company evaluates qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

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We test the aggregate estimated fair value of our reporting units by comparison to our total market capitalization, including both equity and debt capital.

For the year ended September 30, 2021, we did not recognize an impairment of goodwill or deem any reporting units as ‘at risk’ of impairment.

For the year ended September 30, 2022, we did not recognize an impairment of goodwill.

In addition to goodwill, the Company has indefinite-lived intangible assets that consist of acquired tradenames.

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The fair value of indefinite-lived intangible assets is determined using an income approach, the relief-from-royalty methodology, which requires us to make estimates and assumptions about future revenues, royalty rates, and the discount rate, among others.

There was no impairment on indefinite life intangible assets for the year ended September 30, 2021.

As of September 30, 2021, there were no material intangible assets that could be deemed at risk of future impairment due to the limited excess fair value.

For the year ended September 30, 2022, we did not recognize an impairment of indefinite-lived intangible assets.

While we have not recognized an impairment of goodwill or intangible assets during the year ended September 30, 2022, we have identified a potential risk of impairment associated with the HPC reporting unit goodwill, with a carrying cost of $108.1 million as of September 30, 2022, and the Rejuvenate® tradename, with a carrying cost of $119.1 million as of September 30, 2022.

We do not anticipate that these assets will be subject to future impairment based upon our projections and forecasts used in evaluating the current market value but cannot guarantee that no future impairment will be realized.

The risk of future impairment for the HPC reporting unit is based upon the results realized during year ended September 30, 2022, macro-economic headwinds from inflationary costs and foreign currency fluctuations, retail and consumer spending activity, and risks associated with the Tristar Business integration and branding strategy transitions.

The risk of future impairment for the Rejuvenate® tradename is based upon the results realized during the year ended September 30, 2022, and dependency upon the timing and realization of market expansion milestones and synergies associated with the acquired business.

The Company also reviews other definite-lived intangible assets and tangible fixed assets for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Circumstances such as the discontinuation of a product or product line, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset is being used, a history of operating or cash flow losses or an adverse change in legal factors or in the business climate, among others, may trigger an impairment review.

Circumstances such as the discontinuation of a product or product line, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset or asset group is being used, a history of operating or cash flow losses or an adverse change in legal factors or in the business climate, among others, may trigger an impairment review.

If such indicators are present, the Company performs undiscounted cash flow analyses to determine if impairment exists.

The asset value would be deemed impaired if the undiscounted cash flows expected to be generated by the asset did not exceed the carrying value of the asset.

The asset value would be deemed impaired if the undiscounted cash flows expected to be generated by the asset or asset group did not exceed its carrying value.

If impairment is determined to exist, any related impairment loss is calculated based on fair value.

During the year ended September 30, 2021, there was no impairment of definite-lived intangible assets or tangible fixed assets.

For the year ended September 30, 2022, there was no impairment of definite-lived intangible assets or tangible fixed assets.

A considerable amount of judgment and assumptions are required in performing the impairment tests, principally in determining the fair value of each reporting unit and assets subject to impairment testing.

While the Company believes its judgments and assumptions are reasonable, different assumptions could change the estimated fair value and therefore, additional impairment charges could be required.

While the Company has not recognized an impairment for its goodwill, intangible assets or other long-lived assets, the assessment requires the consideration of a significant level of judgement and subjectivity, including the use of prospective financial information, which may be impacted by changes in the economic environment, future strategic business decisions, political, legal or regulatory conditions, competitive or market risk factors not readily identifiable or present, or other changes that may negatively impact prospective revenue generation or cash flow.

Such changes may not be determinable, but could adversely impact the fair value of the its reporting unit goodwill, intangible assets or other long-lived assets and increase the risk of impairment, particularly associated with those assets recently acquired through a business without generating excess value since the initial acquisition.

The Company believes its judgments and assumptions are reasonable, but different assumptions could change the estimated fair value, increasing the risk of impairment and potentially additional impairment charges could be required.

The Company is subject to financial statement risk in the event that business or economic conditions unexpectedly decline and impairment is realized.

See Note 11 - Goodwill and Intangible Assets of the Notes to the Consolidated Financial Statements elsewhere included in this Annual Report.

Table of Conten t s

The Company is subject to income taxes in the U.S.

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withholding and other taxes expected to be incurred on repatriation of foreign earnings.

See Note 16 - Income Taxes of Notes to the Consolidated Financial Statements elsewhere included in this Annual Report.

See Note 16 - Income Taxes of the Notes to the Consolidated Financial Statements elsewhere included in this Annual Report.

New Accounting Pronouncements

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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-K

Item 7. Management’s Discussion and Analysis