What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-05-09 compared with 2024-02-08 · 348 added, 128 removed, 349 unchanged (58% of the section changed)

8 unchanged sentences

Non-GAAP Measurements

Our consolidated and segment results contain non-GAAP metrics such as organic net sales, adjusted EBITDA (“Earnings Before Interest, Taxes, Depreciation, Amortization”) and adjusted EBITDA margin.

Our consolidated and segment results contain non-GAAP metrics such as organic net sales, adjusted EBITDA and adjusted EBITDA margin.

While we believe organic net sales and adjusted EBITDA are useful supplemental information, such adjusted results are not intended to replace our financial results in accordance with Accounting Principles Generally Accepted in the United States (“GAAP”) and should be read in conjunction with those GAAP results.

7 unchanged sentences

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

The following is a reconciliation of reported net sales to organic net sales for the three month period ended December 31, 2023 compared to net sales for the three month period ended January 1, 2023:

The following is a reconciliation of reported net sales to organic net sales for the three and six month period ended March 31, 2024 compared to net sales for the three and six month period ended April 2, 2023:

Three Month Periods Ended

(in millions, except %) December 31, 2023

(in millions, except %) March 31, 2024

Effect of Changes in Currency

January 1, 2023

April 2, 2023

$ 289.9 $ (2.2) $ 287.7 $ 296.7 $ (9.0) (3.0) %

2 unchanged sentences

$ 718.5 $ (1.2) $ 717.3 $ 729.2 (11.9) (1.6) %

Six Month Periods Ended

(in millions, except %)

March 31, 2024

Effect of Changes in Currency

April 2, 2023

$ 566.8 $ (7.2) $ 559.6 $ 574.3 $ (14.7) (2.6) %

232.7 — 232.7 224.6 8.1 3.6 %

611.2 (5.7) 605.5 643.6 (38.1) (5.9) %

$ 1,410.7 $ (12.9) $ 1,397.8 $ 1,442.5 (44.7) (3.1) %

Adjusted EBITDA and Adjusted EBITDA Margin.

6 unchanged sentences

See Note 12 – Share Based Compensation in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;

• Incremental amounts attributable to strategic transactions, restructuring and optimization 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, development and implementation of strategies to optimize operations, reduce costs, increase revenues, improve profit margins, including recognition of one-time exit or disposal costs.

• Incremental project costs associated with strategic transactions, restructuring and optimization 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, development and implementation of strategies to optimize operations, reduce costs, increase revenues, improve profit margins, including recognition of one-time exit or disposal costs.

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

• Non-cash gain from the reduction in the contingent consideration liability associated with the Tristar Business acquisition;

Refer to the Strategic transactions, restructuring and optimization initiatives discussion within the Overview section for further discussion on the projects and initiatives;

• 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 During the three and six month periods ended March 31, 2024 and April 2, 2023, the Company recognized non-cash expense due to the incremental value recognized as part of the Tristar Business acquisition on right of use operating leases with below market rent;

• Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations, including impairments from property, plant and equipment, operating and finance leases, and goodwill and other intangible assets, when applicable.

• Incremental costs recognized by the HPC segment attributable to the realization of product recalls initiated in the prior year.

See Note 15 - Commitments and Contingencies in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details;

During the three and six month period ended March 31, 2024, the Company recognized impairments of its Rejuvenate® and a non-core HPC tradename indefinite lived intangible assets, along with an impairment charge on a right of use operating lease asset associated with an HPC facility that was exited prior to end of its term.

See Note 7 - Goodwill and Intangibles in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details.

During the three and six month period ended April 2, 2023, the Company recognized impairment of indefinite lived intangible assets for its Rejuvenate® and PowerXL® indefinite lived tradenames, along with an impairment on idle equipment associated with the early exit of a GPC warehouse lease and impairments on right of use operating lease assets associated with GPC and HPC facilities that were exited prior to the end of their term;

• Gain realized from proceeds received on the representation and warranties insurance policies associated with the Tristar Business acquisition.

Refer to Note 15 - Commitment and Contingencies in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details.

• Incremental reserves for non-recurring litigation or environmental remediation activity attributable to significant and unusual nonrecurring matters with no previous history or precedent.

• Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions, through the close of the HHI divestiture on June 20, 2023;

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.

Subsequent to the close of the HHI divestiture, amounts attributable to unallocated shared costs would be mitigated through income from TSAs, subsequent strategic or restructuring initiatives, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations.

During the three and six month periods ended March 31, 2024, such costs were directly attributable to legal costs incurred for the proceeds received from the representation and warranties insurance policies associated with the Tristar Business acquisition.

Refer to Note 15 - Commitment and Contingencies in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details;

• Non-cash gain realized from the repurchase of debt obligations at a discount, net deferred financing costs, during the three and six month periods ended March 31, 2024.

See Note 8 - Debt in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details;

• Incremental costs associated with the recognition of product recall costs incurred by the HPC segment in collaboration with the CPSC, initiated at the end of the year ended September 30 2022 and during the year ended September 30, 2023, resulting in the accrual and recognition of incremental costs for the recall, product returns from customers, write-off of inventory on hand, and other costs such as notification, shipping and handling, rework and destruction of affected products, and consumer refunds, as needed.

Such costs are not recurring and directly attributable to the recall event, excluding all other costs associated with product warranty and returns.

During the three month period ended March 31, 2024, the Company was required by the CPSC to reissue a previously issued recall to provide a cash refund to customers, resulting in the recognition of incremental costs and reserves.

Note 17 - Commitments and Contingencies in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details;

• Unallocated shared costs reflect the costs associated with certain shared and center-led administrative functions such as information technology, human resources, finance and accounting, supply chain and commercial operations, supporting the HHI business during the period the Company owned and operated the business through the close of the HHI divestiture on June 20, 2023.

Such costs are excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations in accordance of US GAAP, but reflected as part of income from continuing operations for all periods presented, and requiring retroactive adjustment for all periods presented.

HHI was previously a segment of the consolidated group and was excluded from the consolidated Adjusted EBITDA since being recognized as discontinued operations.

As a result, for all periods in which HHI was owned and operated by the Company, including comparable periods requiring retroactive adjustment, the adjustment is recognized to reconcile net income from continuing operations to Adjusted EBITDA of the remaining segments of the consolidated group.

With the close of the HHI divestiture on June 20, 2023, there is no adjustment recognized as such shared costs are mitigated through income from TSAs during the transition period post-separation, with subsequent restructuring initiatives to rightsize extraneous costs.

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

• Impact from the early settlement of foreign currency cash flow hedges, resulting in assumed losses at the original stated maturities of foreign currency cash flow hedges in our EMEA region that were settled early 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 excluded gains intended to mitigate costs during the year ending September 30, 2023;

• Other adjustments primarily attributable to:

• Non-cash gain from the remeasurement in the contingent consideration liability associated with the Tristar Business acquisition during the six month period ended April 2, 2023;

• For the three and six month periods ended April 2, 2023, the impact from the early settlement of foreign currency cash flow hedges during the year ended September 30, 2022, resulting in assumed losses at the original stated maturities of foreign currency cash flow hedges in our EMEA region that were settled early 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 excluded gains intended to mitigate costs during the year ending September 30, 2023;

• Other adjustments are attributable to:

(1) key executive severance and other one-time compensatory costs;

and (2) non-recurring unusual insurable losses.

and (2) non-recurring unusual insurable losses, including any the receipt of insurance proceeds or recovery realized.

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

The following is a reconciliation of net income to Adjusted EBITDA for SBH, by segment, for the three month period ended December 31, 2023.

(in millions) GPC H&G

The following is a reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA for SBH, by segment, for the three month period ended March 31, 2024.

(in millions, except %) GPC H&G

HPC Corporate Consolidated

8 unchanged sentences

HPC separation initiatives — — — 2.8 2.8

Fiscal 2023 restructuring 0.1 — 0.4 — 0.5

Fiscal 2023 and 2022 restructuring 0.1 — 0.3 — 0.4

Global ERP transformation — — — 3.9 3.9

1 unchanged sentence

Non-cash purchase accounting adjustments — — 0.5 — 0.5

Impairment of operating lease asset — — 0.5 — 0.5

Impairment of intangible assets — 39.0 — — 39.0

Representation and warranty insurance proceeds — — (65.0) — (65.0)

Legal and environmental — — 0.3 — 0.3

HPC product recall — — 6.7 — 6.7

Gain from debt repurchase — — — (4.7) (4.7)

Other 0.1 — — — 0.1

1 unchanged sentence

Net sales $ 289.9 $ 160.7 $ 267.9 $ — $ 718.5

Net income (loss) from continuing operations margin 18.3 % (9.1) % 25.9 % — % 6.9 %

Adjusted EBITDA margin 21.5 % 18.2 % 6.6 % — % 15.6 %

The following is a reconciliation of net income to Adjusted EBITDA for SBH, by segment, for the three month period ended January 1, 2023.

(in millions) GPC H&G

The following is a reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA for SBH, by segment, for the three month period ended April 2, 2023.

(in millions, except %) GPC H&G

HPC Corporate Consolidated

6 unchanged sentences

Share based compensation — — — 4.5 4.5

Tristar integration — — 5.7 — 5.7

HHI divestiture and separation costs — — — 1.4 1.4

HPC separation initiatives — — — 1.1 1.1

Fiscal 2022 restructuring — 0.2 — 0.4 0.6

Russia closing initiatives — — 2.9 — 2.9

Tristar integration — — 4.0 — 4.0

Fiscal 2023 and 2022 restructuring 2.1 — 2.4 0.1 4.6

Global ERP transformation — — — 3.3 3.3

Russia closing initiatives — — (0.1) — (0.1)

Other project costs 1.6 2.1 0.6 2.2 6.5

Non-cash purchase accounting adjustments — — 0.5 — 0.5

Impairment of equipment and operating lease assets 2.7 — 1.5 — 4.2

Impairment of intangible assets — 48.0 19.0 — 67.0

Unallocated shared costs — — — 6.3 6.3

Early settlement of foreign currency cash flow hedges — — 1.3 — 1.3

HPC product recall — — 1.6 — 1.6

Other 0.4 — — 0.2 0.6

Adjusted EBITDA $ 46.3 $ 15.1 $ (1.9) $ (8.5) $ 51.0

Net sales $ 296.7 $ 153.3 $ 279.2 $ — $ 729.2

Net income (loss) from continuing operations margin 10.2 % (26.0) % (13.5) % — % (10.3) %

Adjusted EBITDA margin 15.6 % 9.8 % (0.7) % — % 7.0 %

The following is a reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA for SBH, by segment, for the six month period ended March 31, 2024.

(in millions, except %) GPC H&G HPC Corporate Consolidated

Net income (loss) from continuing operations $ 96.6 $ (20.2) $ 85.2 $ (94.2) $ 67.4

Income tax expense — — — 37.9 37.9

Interest expense — — — 36.1 36.1

Depreciation 7.1 4.0 5.4 12.3 28.8

Amortization 11.2 5.7 5.3 — 22.2

EBITDA 114.9 (10.5) 95.9 (7.9) 192.4

Share based compensation — — — 8.4 8.4

HHI separation costs — — — 2.1 2.1

HPC separation initiatives — — — 3.1 3.1

Fiscal 2023 and 2022 restructuring 0.2 — 0.7 — 0.9

Global ERP transformation — — — 6.9 6.9

Other project costs (0.1) — — 0.2 0.1

Non-cash purchase accounting adjustments — — 0.9 — 0.9

Gain from remeasurement of contingent consideration liability — — (1.5) — (1.5)

Impairment of operating lease asset — — 0.5 — 0.5

Impairment of intangible assets — 39.0 4.0 — 43.0

Representation and warranty insurance proceeds — — (65.0) — (65.0)

Legal and environmental — — 1.5 — 1.5

Gain from debt repurchase — — — (4.7) (4.7)

HPC product recall — — 6.0 — 6.0

Other 0.1 — — 0.4 0.5

Adjusted EBITDA $ 115.1 $ 28.5 $ 44.5 $ 8.5 $ 196.6

Net sales $ 566.8 $ 232.7 $ 611.2 $ — $ 1,410.7

Net income (loss) from continuing operations margin 17.0 % (8.7) % 13.9 % — % 4.8 %

Adjusted EBITDA margin 20.3 % 12.2 % 7.3 % — % 13.9 %

The following is a reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA for SBH, by segment, for the six month period ended April 2, 2023.

(in millions, except %) GPC H&G HPC Corporate Consolidated

Net income (loss) from continuing operations $ 53.3 $ (47.0) $ (41.8) $ (79.5) $ (115.0)

Income tax benefit — — — (46.9) (46.9)

Interest expense — — — 65.0 65.0

Depreciation 7.5 3.7 6.1 6.8 24.1

Amortization 11.0 5.7 4.2 — 20.9

EBITDA 71.8 (37.6) (31.5) (54.6) (51.9)

Share based compensation — — — 7.7 7.7

HHI divestiture and separation costs — — — 2.9 2.9

HPC separation initiatives — — — 3.5 3.5

Tristar integration — — 9.7 — 9.7

Fiscal 2023 and 2022 restructuring 2.1 0.2 2.4 0.4 5.1

Global ERP transformation — — — 4.9 4.9

Russia closing initiatives — — 2.8 — 2.8

Other project costs 3.6 2.1 1.6 4.6 11.9

Non-cash purchase accounting adjustments — — 0.9 — 0.9

Impairment of equipment and operating lease assets 2.7 — 1.8 — 4.5

Impairment of intangible assets — 48.0 19.0 — 67.0

Unallocated shared costs — — — 12.5 12.5

Early settlement of foreign currency cash flow hedges — — 3.9 — 3.9

Gain from remeasurement of contingent consideration liability — — (1.5) — (1.5)

HPC product recall — — 1.9 — 1.9

2 unchanged sentences

Net sales $ 574.3 $ 224.6 $ 643.6 $ — $ 1,442.5

Net income (loss) from continuing operations margin 9.3 % (20.9) % (6.5) % — % (8.0) %

Adjusted EBITDA margin 14.5 % 5.7 % 1.8 % — % 6.3 %

The following is a reconciliation of net income to Adjusted EBITDA for SB/RH, by segment, for the three month period ended December 31, 2023.

(in millions) GPC H&G

The following is a reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA for SB/RH, by segment, for the three month period ended March 31, 2024.

(in millions, except %) GPC H&G

HPC Corporate Consolidated

8 unchanged sentences

HPC separation initiatives — — — 2.8 2.8

Fiscal 2023 restructuring 0.1 — 0.4 — 0.5

Fiscal 2023 and 2022 restructuring 0.1 — 0.3 — 0.4

Global ERP transformation — — — 3.9 3.9

1 unchanged sentence

Non-cash purchase accounting adjustments — — 0.5 — 0.5

Impairment of operating lease asset — — 0.5 — 0.5

Impairment of intangible assets — 39.0 — — 39.0

Representation and warranty insurance proceeds — — (65.0) — (65.0)

Legal and environmental — — 0.3 — 0.3

HPC product recall — — 6.7 — 6.7

Gain from debt repurchase — — — (4.7) (4.7)

Other 0.1 — — — 0.1

1 unchanged sentence

Net sales $ 289.9 $ 160.7 $ 267.9 $ — $ 718.5

Net income (loss) from continuing operations margin 18.3 % (9.1) % 25.9 % — % 7.0 %

Adjusted EBITDA margin 21.5 % 18.2 % 6.6 % — % 15.7 %

The following is a reconciliation of net income to Adjusted EBITDA for SB/RH, by segment, for the three month period ended January 1, 2023.

(in millions) GPC H&G

The following is a reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA for SB/RH, by segment, for the three month period ended April 2, 2023.

(in millions, except %) GPC H&G

HPC Corporate Consolidated

6 unchanged sentences

Share based compensation — — — 4.0 4.0

Tristar integration — — 5.7 — 5.7

HHI divestiture and separation costs — — — 1.4 1.4

HPC separation initiatives — — — 1.1 1.1

Fiscal 2022 restructuring — 0.2 — 0.4 0.6

Russia closing initiatives — — 2.9 — 2.9

Tristar integration — — 4.0 — 4.0

Fiscal 2023 and 2022 restructuring 2.1 — 2.4 0.1 4.6

Global ERP transformation — — — 3.3 3.3

Russia closing initiatives — — (0.1) — (0.1)

Other project costs 1.6 2.1 0.6 2.2 6.5

Non-cash purchase accounting adjustments — — 0.5 — 0.5

Impairment of equipment and operating lease assets 2.7 — 1.5 — 4.2

Impairment of intangible assets — 48.0 19.0 — 67.0

Unallocated shared costs — — — 6.3 6.3

Early settlement of foreign currency cash flow hedges — — 1.3 — 1.3

HPC product recall — — 1.6 — 1.6

Other 0.4 — — 0.2 0.6

Adjusted EBITDA $ 46.3 $ 15.1 $ (1.9) $ (8.3) $ 51.2

Net sales $ 296.7 $ 153.3 $ 279.2 $ — $ 729.2

Net income (loss) from continuing operations margin 10.2 % (26.0) % (13.5) % — % (10.3) %

Adjusted EBITDA margin 15.6 % 9.8 % (0.7) % — % 7.0 %

The following is a reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA for SB/RH, by segment, for the six month period ended March 31, 2024.

(in millions, except %) GPC H&G HPC Corporate Consolidated

Net income (loss) from continuing operations $ 96.6 $ (20.2) $ 85.2 $ (93.1) $ 68.5

Income tax expense — — — 37.8 37.8

Interest expense — — — 36.1 36.1

Depreciation 7.1 4.0 5.4 12.3 28.8

Amortization 11.2 5.7 5.3 — 22.2

EBITDA 114.9 (10.5) 95.9 (6.9) 193.4

Share based compensation — — — 7.8 7.8

HHI separation costs — — — 2.1 2.1

HPC separation initiatives — — — 3.1 3.1

Fiscal 2023 and 2022 restructuring 0.2 — 0.7 — 0.9

Global ERP transformation — — — 6.9 6.9

Other project costs (0.1) — — 0.2 0.1

Non-cash purchase accounting adjustments — — 0.9 — 0.9

Gain from remeasurement of contingent consideration liability — — (1.5) — (1.5)

Impairment of operating lease assets — — 0.5 — 0.5

Impairment of intangible assets — 39.0 4.0 — 43.0

Representation and warranty insurance proceeds — — (65.0) — (65.0)

Legal and environmental — — 1.5 — 1.5

Gain from debt repurchase — — — (4.7) (4.7)

HPC product recall — — 6.0 — 6.0

Other 0.1 — — 0.5 0.6

Adjusted EBITDA $ 115.1 $ 28.5 $ 44.5 $ 9.0 $ 197.1

Net sales $ 566.8 $ 232.7 $ 611.2 $ — $ 1,410.7

Net income (loss) from continuing operations margin 17.0 % (8.7) % 13.9 % — % 4.9 %

Adjusted EBITDA margin 20.3 % 12.2 % 7.3 % — % 14.0 %

The following is a reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA for SB/RH, by segment, for the six month period ended April 2, 2023.

(in millions, except %) GPC H&G HPC Corporate Consolidated

Net income (loss) from continuing operations $ 53.3 $ (47.0) $ (41.8) $ (79.5) $ (115.0)

Income tax benefit — — — (46.3) (46.3)

Interest expense — — — 65.1 65.1

Depreciation 7.5 3.7 6.1 6.8 24.1

Amortization 11.0 5.7 4.2 — 20.9

EBITDA 71.8 (37.6) (31.5) (53.9) (51.2)

Share based compensation — — — 7.1 7.1

HHI divestiture and separation costs — — — 2.9 2.9

HPC separation initiatives — — — 3.5 3.5

Tristar integration — — 9.7 — 9.7

Fiscal 2023 and 2022 Restructuring 2.1 0.2 2.4 0.4 5.1

Global ERP transformation — — — 4.9 4.9

Russia closing initiatives — — 2.8 — 2.8

Other project costs 3.6 2.1 1.6 4.6 11.9

Non-cash purchase accounting adjustments — — 0.9 — 0.9

Impairment of equipment and operating lease assets 2.7 — 1.8 — 4.5

Impairment of intangible assets — 48.0 19.0 — 67.0

Unallocated shared costs — — — 12.5 12.5

Early settlement of foreign currency cash flow hedges — — 3.9 — 3.9

Gain from remeasurement of contingent consideration liability — — (1.5) — (1.5)

HPC product recall — — 1.9 — 1.9

2 unchanged sentences

Net sales $ 574.3 $ 224.6 $ 643.6 $ — $ 1,442.5

Net income (loss) from continuing operations margin 9.3 % (20.9) % (6.5) % — % (8.0) %

Adjusted EBITDA margin 14.5 % 5.7 % 1.8 % — % 6.3 %

51 unchanged sentences

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

The Company has incurred incremental project costs attributable to the divestiture, consisting of legal and professional fees to effect the realization and close of the transaction, separation and transition of systems and processes supporting the divested business and operations of enabling functions within a transition services agreement ("TSA"), plus incremental retention costs for personnel supporting such transition efforts.

Incremental costs are expected to be incurred for a transition period of approximately 12-24 months following the close of the transaction.

The Company has incurred incremental project costs attributable to the divestiture, consisting of legal and professional fees to effect the realization and close of the transaction, separation and transition of systems and processes supporting the divested business and operations of enabling functions within transition services agreements ("TSAs"), plus incremental retention costs for personnel supporting such transition efforts.

Incremental costs are expected to be incurred for a transition period of approximately 12-24 months following the close of the transaction as the Company exits various TSAs.

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

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

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

• Tristar Business Acquisition - During the year ended September 30, 2021, the Company acquired 100% of the Tristar Business that includes a portfolio of home appliances and cookware products sold under the PowerXL®, Emeril Lagasse®, and Copper Chef® brands.

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

• Tristar Integration - During the year ended September 30, 2022, the Company acquired 100% of the Tristar Business that includes a portfolio of home appliances and cookware products sold under the PowerXL®, Emeril Lagasse®, and Copper Chef® brands.

The Company incurred incremental costs to combine and integrate the acquired business with the HPC segment, primarily towards the integration of systems and processes, merger of commercial operations and supply chain, professional fees to consolidate financial records, plus incremental retention costs for personnel supporting the transition and integration efforts.

Substantially all costs have been incurred through September 30, 2023 and no further costs are anticipated in the subsequent periods.

• 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.

2 unchanged sentences

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

• Fiscal 2023 and 2022 Restructuring - During the years ended September 30, 2023 and 2022, the Company entered into initiatives in response to continuing pressures within the consumer products and retail markets and adjusted strategic initiatives within certain segments, resulting in the realization of of headcount reductions.

Substantially all costs associated with the initiatives have been recognized in prior periods and any subsequent amounts are attributable to changes in estimates, headcounts and timing of communication.

3 unchanged sentences

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

The following is a summary of incremental costs for the three month periods ended December 31, 2023 and January 1, 2023.

(in millions) December 31, 2023 January 1, 2023

The following is a summary of incremental costs for the three and six month periods ended March 31, 2024 and April 2, 2023.

Three Month Periods Ended Six Month Periods Ended

(in millions) March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

HHI divestiture and separation costs $ 0.8 $ 1.4 $ 2.1 $ 2.9

1 unchanged sentence

Tristar integration — 4.0 — 9.7

Fiscal 2023 and 2022 restructuring 0.4 4.6 0.9 5.1

Global ERP transformation 3.9 3.3 6.9 4.9

Fiscal 2023 restructuring 0.5 —

Fiscal 2022 restructuring — 0.6

Russia closing initiative — (0.1) — 2.8

1 unchanged sentence

Total $ 8.0 $ 20.8 $ 13.1 $ 40.8

Net sales $ — $ (0.1) $ — $ (1.0)

Cost of goods sold — 0.4 — 1.9

3 unchanged sentences

• Following the close of the HHI divestiture on June 20, 2023, the Company repaid its outstanding term loan and all outstanding borrowings with the Revolver Facility under the Credit Agreement, and terminated the Incremental Revolving Credit Facility Tranche, along with the remaining aggregate principal of its 5.750% Senior Notes due 2025 in full at the redemptions price and repurchased a portion of its remaining outstanding Senior Notes.

During the three month period ended December 31, 2023, the Company repurchased $179.0 million of its outstanding bonds at a discount, recognizing a gain of $4.7 million.

The Company repurchased outstanding bonds at a discount recognizing a gain of $4.7 million during the six month period ended March 31, 2024.

• During the three month period ended December 31, 2023, the Company entered into the Second Amended and Restated Credit Agreement (the "Credit Agreement"), refinancing the Company's previous credit agreement, extending maturity to October 19, 2028 and reduced capacity of the Revolver Facility to $500.0 million.

10 unchanged sentences

Consolidated Results of Operations

The following is summarized consolidated results of operations for SBH for the three month periods ended December 31, 2023 and January 1, 2023.

The following is summarized consolidated results of operations for SBH for the three and six month periods ended March 31, 2024 and April 2, 2023.

(in millions, except %)

December 31, 2023 January 1, 2023 Variance

Three Month Periods Ended Variance

Six Month Periods Ended Variance

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Net sales $ 718.5 $ 729.2 $ (10.7) (1.5) % $ 1,410.7 $ 1,442.5 $ (31.8) (2.2) %

Gross profit 273.4 214.5 58.9 27.5 % 518.4 416.4 102.0 24.5 %

Gross profit margin 35.4 % 28.3 % 710 bps

Operating expenses $ 219.9 $ 222.1 $ (2.2) (1.0) %

Selling, general & administrative 223.5 224.5 (1.0) (0.4) % 439.4 448.1 (8.7) (1.9) %

Impairment of intangible assets 39.0 67.0 (28.0) (41.8) % 43.0 67.0 (24.0) (35.8) %

Representation and warranty insurance proceeds (65.0) — (65.0) n/m (65.0) — (65.0) n/m

Gain from remeasurement of contingent consideration liability — — — n/m — (1.5) 1.5 n/m

Interest expense 16.9 31.6 (14.7) (46.5) % 36.1 65.0 (28.9) (44.5) %

Interest income (23.4) (0.1) (23.3) n/m

Gain from debt repurchase (4.7) — (4.7) n/m

Other non-operating expense (income), net 4.0 (1.4) 5.4 n/m

Income tax expense (benefit) 12.4 (12.1) 24.5 n/m

Net income (loss) from continuing operations 17.5 (40.0) 57.5 n/m

Interest income (17.5) (0.2) (17.3) n/m (40.9) (0.4) (40.5) n/m

Gain from debt repurchase — — — n/m (4.7) — (4.7) n/m

Other non-operating expense, net 1.1 1.4 (0.3) (21.4) % 5.2 0.1 5.1 n/m

Income tax expense (benefit) 25.5 (34.8) 60.3 n/m 37.9 (46.9) 84.8 n/m

Net income (loss) from continuing operations 49.9 (75.0) 124.9 n/m 67.4 (115.0) 182.4 n/m

Income from discontinued operations, net of tax 11.0 21.4 (10.4) (48.6) % 22.7 40.9 (18.2) (44.5) %

Net income (loss) 29.2 (20.5) 49.7 n/m

Net income (loss) 60.9 (53.6) 114.5 n/m 90.1 (74.1) 164.2 n/m

n/m = not meaningful

The following is a summary of net sales by segment for the three month periods ended December 31, 2023 and January 1, 2023, and the principal components of changes in net sales for the respective periods.

(in millions, except %) December 31, 2023 January 1, 2023 Variance

The following is a summary of net sales by segment for the three and six month periods ended March 31, 2024 and April 2, 2023, and the principal components of changes in net sales for the respective periods.

(in millions, except %) Three Month Periods Ended Variance

Six Month Periods Ended Variance

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

$ 289.9 $ 296.7 $ (6.8) (2.3) % $ 566.8 $ 574.3 $ (7.5) (1.3) %

3 unchanged sentences

(in millions)

Three Month Periods Ended

Net Sales for the period ended January 1, 2023

Three Month Periods Ended Six Month Periods Ended

Net Sales for the period ended April 2, 2023

$ 729.2 $ 1,442.5

Decrease in GPC

2 unchanged sentences

Foreign currency impact, net

Net Sales for the period ended December 31, 2023

Net Sales for the period ended March 31, 2024

$ 718.5 $ 1,410.7

Three Month Period Ended March 31, 2024 Volume Price Foreign Currency Total Organic

GPC (2.3) % (0.7) % 0.7 % (2.3) % (3.0) %

H&G 6.0 % (1.2) % — % 4.8 % 4.8 %

HPC (5.8) % 2.1 % (0.3) % (4.0) % (3.7) %

Total (1.8) % 0.2 % 0.1 % (1.5) % (1.6) %

Six Month Period Ended March 31, 2024 Volume Price Foreign Currency Total Organic

GPC (1.7) % (0.9) % 1.3 % (1.3) % (2.6) %

H&G 3.7 % (0.1) % — % 3.6 % 3.6 %

HPC (6.6) % 0.7 % 0.9 % (5.0) % (5.9) %

Total (3.0) % (0.1) % 0.9 % (2.2) % (3.1) %

Refer to the segment financial data section below for further discussion on net sales results.

Gross Profit.

Gross profit and margin increased due to cost improvements and inflated inventoried costs that were realized in the prior year, partially offset by lower volumes..

Operating Expenses.

Operating expenses decreased due to improved costs and utilization of distribution centers, reduced initiative spending on integration and restructuring, partially offset with incremental investment in brand marketing and advertising.

The following is a summary of the gross profit and gross profit margin for the three and six month periods ended March 31, 2024 and April 2, 2023, respectively, and the principal factors contributing to the change for the three and six month periods.

Three Month Periods Ended Six Month Periods Ended

(in millions, except %) March 31, 2024 April 2, 2023 Variance March 31, 2024 April 2, 2023 Variance

Gross Profit $ 273.4 $ 214.5 $ 58.9 27.5 % $ 518.4 $ 416.4 $ 102.0 24.5 %

Gross Profit Margin 38.1 % 29.4 % 870 bps 36.7 % 28.9 % 780 bps

Three Month Period Ended Six Month Period Ended

(in millions, except margin) Gross Profit Margin Gross Profit Margin

Price $ 1.8 30 bps $ 1.5 10 bps

Mix 7.5 110 bps 5.0 40 bps

Volume (2.1) (30) bps (6.9) (50) bps

Cost changes 54.3 800 bps 103.4 790 bps

Product recalls (3.8) (60) bps (3.1) (30) bps

Restructuring and optimization initiatives 0.3 10 bps 0.8 10 bps

Foreign exchange rates 0.9 10 bps 1.3 10 bps

Change in gross profit and gross profit margin $ 58.9 870 bps $ 102.0 780 bps

Gross profit and margin increases are predominantly due to the cost improvements initiatives and the higher inflated inventoried costs that were realized during the prior periods with favorable mix.

Despite reduced volumes, gross profit benefited from the improved mix realized by previous SKU rationalization initiatives and reduction in excess inventory sales.

The impact from product recalls is due to the reissued product safety recall with the CPSC recognized during the three period ended March 31, 2024, further discussed in Note 15 - Commitments and Contingencies within Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Selling, general and administrative.

The following summarizes the selling, general & administrative costs for the three and six month periods ended March 31, 2024 and April 2, 2023, respectively, including amounts as a percentage of net sales for each respective period.

Three Month Periods Ended (in millions, except %) March 31, 2024 % of Net Sales April 2, 2023 % of Net Sales Variance

Sales, marketing & advertising $ 76.0 10.6 % $ 61.3 8.4 % $ 14.7 24.0 %

Distribution 64.4 9.0 % 71.8 9.8 % (7.4) (10.3) %

General & administrative 68.8 9.6 % 67.0 9.2 % 1.8 2.7 %

Research & development 6.2 0.9 % 5.2 0.7 % 1.0 19.2 %

Strategic transaction, restructuring and optimization 8.1 1.1 % 19.2 2.6 % (11.1) (57.8) %

Total selling, general & administrative $ 223.5 31.1 % $ 224.5 30.8 % (1.0) (0.4) %

Six Month Periods Ended (in millions, except %) March 31, 2024 % of Net Sales April 2, 2023 % of Net Sales Variance

Sales, marketing & advertising $ 147.9 10.5 % $ 129.6 9.0 % $ 18.3 14.1 %

Distribution 127.7 9.1 % 134.9 9.4 % (7.2) (5.3) %

General & administrative 138.9 9.8 % 136.9 9.5 % 2.0 1.5 %

Research & development 11.7 0.8 % 11.4 0.8 % 0.3 2.6 %

Strategic transaction, restructuring and optimization 13.2 0.9 % 35.3 2.4 % (22.1) (62.6) %

Total selling, general & administrative $ 439.4 31.1 % $ 448.1 31.1 % (8.7) (1.9) %

Increase in sales, marketing and advertising costs for the three and six month periods are due to the investment towards brand marketing and advertising initiatives across segments plus increased incentive compensation costs from higher than expected results.

Distribution costs for the three and six month periods decreased due to the improved optimization and fulfillment at our distribution centers and lower outbound freight costs.

General & administrative costs for the three and six month periods increased due to higher incentive compensation costs, partially offset by lowered overhead costs from restructuring initiatives in the prior year, plus decrease in bank fees related to reduced factoring on trade receivables.

Increased research & development costs for the three and six month periods ended March 31, 2024 are from an additional investment in new product development and innovation across segments.

Reduced strategic transaction, restructuring and optimization is primarily due to reduced restructuring initiative spending, completion of Tristar Business integration and other non-recurring HPC transformation initiatives in the prior year.

Impairment of Intangible Assets.

Impairment of intangible assets during the three and six month period ended March 31, 2024 was attributable to a triggering event during the three month period ended March 31, 2024 resulting in an impairment of indefinite lived tradenames.

See Note 7 - Goodwill and Intangible Assets in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Impairment of intangible assets during the three and six month period ended April 2, 2023 were attributable to the identification of a triggering event resulting in an impairment of the Rejuvenate® and PowerXL® indefinite lived tradenames in the prior period.

Representation and Warranty Insurance Proceeds.

During the three and six month periods ended March 31, 2024, the Company recognized a gain of $65.0 million from its representation and warranty insurance policy associated with the Tristar Business acquisition.

See Note 15 - Commitments and Contingencies in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Interest Expense.

Interest expense decreased due to reduced debt borrowings and average borrowing rates following the HHI divestiture in the prior year.

Interest expense decreased due to reduced debt borrowings following the close of the HHI divestiture in the prior year with a decrease in the average borrowing rates during the respective periods.

Interest Income.

Interest income increased primarily due to interest realized on cash proceeds received from the closing of the HHI divestiture in the prior year.

Interest income increased due to interest on term deposits entered into using cash proceeds from the closing of the HHI divestiture in the prior year.

Gain from debt repurchase.

The Company recognized income from the discount realized on the repurchase of debt.

During the three and six month periods ended March 31, 2024, the Company recognized income from the discount realized on the repurchase of debt with no direct comparable in the prior periods.

See Note 8 - Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Other Non-Operating Expense (Income), Net.

Other non-operating income increased due to changes in foreign currency compared to the prior year.

Other non-operating income is primarily due to changes in foreign currency compared to the prior year.

Income Taxes.

2 unchanged sentences

tax, including the U.S.

tax on global intangible low taxed income and certain nondeductible expenses.

tax on global intangible low taxed income, state income taxes, and certain nondeductible expenses.

Income From Discontinued Operations.

5 unchanged sentences

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

The following is summarized consolidated results of operations for SB/RH for the three month periods ended December 31, 2023 and January 1, 2023:

(in millions, except %) December 31, 2023 January 1, 2023 Variance

The following is summarized consolidated results of operations for SB/RH for the three and six month periods ended March 31, 2024 and April 2, 2023:

(in millions, except %) Three Month Periods Ended Variance

Six Month Periods Ended Variance

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Net sales $ 718.5 $ 729.2 $ (10.7) (1.5) % $ 1,410.7 $ 1,442.5 $ (31.8) (2.2) %

Gross profit 273.4 214.5 58.9 27.5 % 518.4 416.4 102.0 24.5 %

Gross profit margin 35.4 % 28.3 % 710 bps

Operating expenses $ 219.4 $ 222.0 $ (2.6) (1.2) %

Selling, general and administrative 222.9 223.8 (0.9) (0.4) % 438.4 447.4 (9.0) (2.0) %

Impairment of intangible assets 39.0 67.0 (28.0) (41.8) % 43.0 67.0 (24.0) (35.8) %

Representation and warranty insurance proceeds (65.0) — (65.0) n/m (65.0) — (65.0) n/m

Gain from remeasurement of contingent consideration liability — — — n/m — (1.5) 1.5 n/m

Interest expense 16.9 31.7 (14.8) (46.7) % 36.1 65.1 (29.0) (44.5) %

Interest income (23.4) (0.1) (23.3) n/m

Gain from debt repurchase (4.7) — (4.7) n/m

Other non-operating expense (income), net 4.0 (1.4) 5.4 n/m

Income tax expense (benefit) 12.2 (12.2) 24.4 n/m

Net income (loss) from continuing operations 18.2 (39.8) 58.0 n/m

Interest income (17.5) (0.2) (17.3) n/m (40.9) (0.4) (40.5) n/m

Gain from debt repurchase — — — n/m (4.7) — (4.7) n/m

Other non-operating expense, net 1.1 1.4 (0.3) (21.4) % 5.2 0.1 5.1 n/m

Income tax expense (benefit) 25.6 (34.0) 59.6 n/m 37.8 (46.3) 84.1 n/m

Net income (loss) from continuing operations 50.4 (75.2) 125.6 n/m 68.5 (115.0) 183.5 n/m

Income from discontinued operations, net of tax 11.0 21.9 (10.9) (49.8) % 22.7 41.4 (18.7) (45.2) %

Net income (loss) 29.9 (20.3) 50.2 n/m

Net income (loss) 61.4 (53.3) 114.7 n/m 91.2 (73.6) 164.8 n/m

n/m = not meaningful

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

The changes in SB/RH for the three and six month periods ended March 31, 2024 are primarily attributable to the changes in SBH previously discussed.

Segment Financial Data

2 unchanged sentences

Three Month Periods Ended Variance

December 31, 2023 January 1, 2023

Six Month Periods Ended Variance

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

$ 289.9 $ 296.7 $ (6.8) (2.3) % $ 566.8 $ 574.3 $ (7.5) (1.3) %

Operating income 43.9 22.7 21.2 93.4 %

Operating income margin 15.9 % 8.2 % 770 bps

Segment net income 53.0 30.2 22.8 75.5 % 96.6 53.3 43.3 81.2 %

Segment net income margin 18.3 % 10.2 % 810 bps 17.0 % 9.3 % 770 bps

Adjusted EBITDA

1 unchanged sentence

Adjusted EBITDA margin

19.0 % 13.4 % 560 bps

Net sales decreased primarily from softness in the global aquatics category, lower NA sales from the exit of non-strategic categories such as waste management and lower margin SKUs, and lower foot traffic and sales in the pet specialty channels, partially offset by an increase in dog and cat food and companion animal volume in EMEA and sales growth in e-commerce.

Organic net sales decreased $5.6 million, or 2.0%, excluding a favorable foreign currency impact of $5.0 million.

Operating income, adjusted EBITDA and margins increased due to lower cost inventory compared to prior year, favorable product and channel mix, and savings from prior year cost reduction initiatives, partially offset by lower volumes and increased advertising investments.

21.5 % 15.6 % 590 bps 20.3 % 14.5 % 580 bps

Net sales decreased primarily from decreased volumes driven by lower demand in the aquatics product category, primarily from aquatics hard goods such as aquatic systems with lesser volume of new entrants into the category, whereas aquatic nutrition and consumables is showing signs of stabilizing.

Volumes were also adversely impacted by the decision to exit non-strategic categories and lower margin SKUs in the prior year, positively impacting mix and profitability for the three and six month periods ended March 31, 2024.

Lower foot traffic and sales within the pet specialty channel, primarily in NA, further contributed to the volume reduction offset by overall distribution growth in e-commerce channels globally.

Organic net sales for the three month period ended March 31, 2024 decreased $9.0 million, or 3.0%, excluding a favorable foreign currency impact of $2.2 million.

Organic net sales for the six month period decreased $14.7 million, or 2.6%, excluding a favorable foreign currency impact of $7.2 million.

Segment net income, adjusted EBITDA and margins increased due to improvement in gross profit margins from lower cost inventory compared to prior year, favorable product and channel mix, plus reduced operating cost overhead due to savings from prior year initiatives and improved distribution costs from improved fulfillment and optimization, partially offset by increased investment in marketing and advertising.

Home & Garden

1 unchanged sentence

Three Month Periods Ended Variance

December 31, 2023 January 1, 2023

Six Month Periods Ended Variance

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

$ 160.7 $ 153.3 $ 7.4 4.8 % $ 232.7 $ 224.6 $ 8.1 3.6 %

Operating loss

Segment net loss

(14.6) (39.8) 25.2 (63.3) % (20.2) (47.0) 26.8 (57.0) %

Operating loss margin

(7.6) % (10.1) % 250 bps

Segment net loss margin

(9.1) % (26.0) % 1,690 bps (8.7) % (20.9) % 1,220 bps

Adjusted EBITDA

1 unchanged sentence

Adjusted EBITDA margin

(1.0) % (3.4) % 240 bps

Net sales increased due to higher sales from the Controls product category where late warmer fall weather extended the selling season and and retailer reorder patterns improved compared to the prior year, partially offset by softness in consumer demand for some product lines within the cleaning category.

Operating loss, adjusted EBITDA, and margins improved due to higher sales, manufacturing efficiencies carrying into the fiscal year, positive pricing, and operating cost reductions from cost improvement initiatives, partially offset by additional investments in product innovation and advertising.

18.2 % 9.8 % 840 bps 12.2 % 5.7 % 650 bps

Net sales increased due to higher volume primarily in the Controls product category with increased spring seasonal sales and distribution with key retailers during the three month period ended March 31, 2024, with favorable weather trends driving increase in retail traffic and accelerating seasonal inventory into stores by retailers compared to the prior year.

Late warmer fall weather extended the selling season in the prior year and further contributed to higher sales during the six month period.

The higher volume from Controls was partially offset by reduced volume in other product categories for Household Controls and Repellents as we expect retailers to be cautious in building inventory for the season and more in line with seasonal volume and expected traffic in stores for those respective product categories later in the summer and fall seasons.

Volume in our cleaning products also declined with lower demand on restorative products and lost distribution within the product line.

Segment net loss, adjusted EBITDA, and margins improved due to higher sales volume, improved gross profit margins from reduced material and input costs and manufacturing efficiencies carrying into the fiscal year, plus reduced operating cost overhead due to savings from prior year initiatives, partially offset by additional investments in marketing and advertising and product innovation.

Home and Personal Care

(in millions, except %) Three Month Periods Ended

December 31, 2023 January 1, 2023

Six Month Periods Ended Variance

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

$ 267.9 $ 279.2 $ (11.3) (4.0) % $ 611.2 $ 643.6 $ (32.4) (5.0) %

Operating income (loss)

16.5 (4.3) 20.8 n/m

Operating income (loss) margin

4.8 % (1.2 %) 600 bps

Segment net income (loss) 69.3 (37.7) 107.0 n/m 85.2 (41.8) 127.0 n/m

Segment net income (loss) margin 25.9 % (13.5) % 3,940 bps 13.9 % (6.5) % 2,040 bps

Adjusted EBITDA

$ 26.7 $ 13.2 $ 13.5 102.3 %

$ 17.8 $ (1.9) $ 19.7 n/m $ 44.5 $ 11.3 $ 33.2 293.8 %

Adjusted EBITDA margin

7.8 % 3.6 % 420 bps

6.6 % (0.7) % 730 bps 7.3 % 1.8 % 550 bps

n/m = not meaningful

Net sales decreased due to reduced placements in NA from the prior year, category decline in small kitchen appliances and exit of certain small kitchen appliance SKUs, mitigated through international sales growth across personal care and small kitchen appliances categories and higher volume through e-commerce, plus opportunistic sales when a competitor filed for bankruptcy.

Organic net sales for the three month period decreased $27.8 million, or 7.6%, excluding a favorable foreign currency impact of $6.7 million.

Operating income, Adjusted EBITDA and margins increased due to lower cost inventory compared to the prior year, cost improvement initiatives, realization of operating spend improvements initiated in the prior year, offset by lower volume and negative mix.

Operating income was further benefited by lower costs on restructuring and integration initiatives.

Net sales decreased due to lower volumes in small kitchen appliances from reduced placements in NA from the prior year, with overall category decline and exit of lower performance and reduced margin SKUs in the prior year, partially offset by increases in LATAM.

Volume decline from small kitchen appliances were partially mitigated through volume growth in personal care on a global basis and overall higher volume distribution through e-commerce channels, plus opportunistic sales when a competitor filed for bankruptcy further benefiting the six month period.

Pricing improvements were primarily attributable to positive pricing in inflationary markets, reduced excess inventory sales and fewer low-margin promotions, further benefiting product mix and overall profitability.

Organic net sales for the three month period decreased $10.3 million, or 3.7%, excluding a unfavorable foreign currency impact of $1.0 million.

Organic net sales for the six month period decreased $38.1 million, or 5.9%.

excluding favorable foreign currency impact of $5.7 million.

Segment net income, Adjusted EBITDA and margins increased due to improved gross profit margins due to lower cost inventory compared to the prior year, cost improvement initiatives, and improved profitability through SKU rationalization and reduced excess inventory sales, plus reduced operating cost overhead due to savings from prior year initiatives, partially offset by additional investments in marketing and advertising and product innovation.

Segment net income was further benefited by the recognition of proceeds from representation and warranty insurance policies of $65.0 million, intangible impairment charges in the prior year, and lower costs on restructuring and integration initiatives.

Liquidity and Capital Resources

The following is a summary of the SBH and SB/RH cash flows from continuing operations for the three month periods ended December 31, 2023 and January 1, 2023, respectively.

Three Month Periods Ended (in millions)

December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023

The following is a summary of the SBH and SB/RH cash flows from continuing operations for the six month periods ended March 31, 2024 and April 2, 2023, respectively.

Six Month Periods Ended (in millions)

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Operating activities

5 unchanged sentences

Cash Flows from Operating Activities

Cash flows provided by SBH's continuing operations increased $75.1 million, primarily due to the lower operating costs, interest income, reduced receivables factoring, and diminished spending on strategic and restructuring initiatives.

Cash flows provided by SB/RH continuing operations increased $69.4 million primarily due to the items previously discussed above.

Cash flows provided by SBH's continuing operations decreased $67.9 million, primarily due to lower cash flow generated by working capital due to reduced receivables factoring, higher cash paid towards taxes offset by lower cash interest and the receipt of $50.0 million in representation and warranty insurance proceeds.

See Note 15 - Commitments and Contingencies within Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further discussion on the representation and warranty proceeds.

Cash flows provided by SB/RH continuing operations decreased $73.8 million primarily due to the items previously discussed above.

Cash Flows from Investing Activities

Cash flows provided by investing activities for SBH continuing operations increased $143.6 million, primarily from the investment activity of short-term investments.

Cash flows provided by investing activities for SBH continuing operations increased $570.0 million, primarily from the investment activity of short-term investments offset by the recognition of a $26.9 million payment for the final purchase price settlement on the HHI divestiture, which closed in the prior year on June 20, 2023, in accordance with the Purchase Agreement.

See Note 2 - Divestitures within Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly report for further discussion on the HHI divestiture.

Cash flows provided by investing activities of SB/RH is due to the items previously discussed.

1 unchanged sentence

Cash flows used by financing activities for continuing operations increased $484.9 million primarily due to the pay down of debt and treasury share repurchases.

Refer to Note 8 – Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information on debt borrowings.

See Note 11 – Shareholders’ Equity in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information on share repurchase activity.

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

During the three month periods ended December 31, 2023 and January 1, 2023, SBH made cash dividend payments of $14.1 million, or $0.42 per share, and $17.1 million, or $0.42 per share, respectively.

Refer to Note 8 – Debt and Note 11 - Shareholders' Equity in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information.

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

During the six month periods ended March 31, 2024 and April 2, 2023, SBH made cash dividend payments of $26.8 million, or $0.42 per share, and $34.4 million, or $0.42 per share, respectively, which decreased due to the lower outstanding shares.

Cash flows used by financing activity of SB/RH increased $479.0 million and is highly dependent upon the financing cash flow activities of SBH.

5 unchanged sentences

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

As of December 31, 2023, the Company had borrowing availability of $486.9 million, net of outstanding letters of credit, under our credit facility.

As of March 31, 2024, the Company had borrowing availability of $490.3 million, net of outstanding letters of credit, under our credit facility.

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

3 unchanged sentences

We also have long-term obligations associated with defined benefit plans with expected minimum required contributions that are not considered significant to the consolidated group.

During the three month period ended December 31, 2023, the Company completed additional repurchases of Senior Notes available for sale on the open market, at a discount.

During the three and six month period ended March 31, 2024, the Company completed additional repurchases of Senior Notes available for sale on the open market, at a discount.

See Note 8 - Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail.

The Company may continue to make repayments on its debt obligations in the future, which may include repayments, redemptions, repurchases, refinancings or exchanges of our outstanding Senior Notes, any of which will be dependent on various factors, including market conditions.

The Company may continue to make repayments on its debt obligations in the future, which may include repayments, redemptions, repurchases, refinancing or exchanges of our outstanding Senior Notes, any of which will be dependent on various factors, including market conditions.

Any such repurchases may be affected through a variety of means, including privately negotiated transactions, market transactions, tender offers, redemptions or as otherwise required or permitted by the instruments covering the Company's outstanding indebtedness.

The Company has also continued to repurchase common shares through open market purchases during the three month period ended December 31, 2023.

The Company has also continued to repurchase common shares through open market purchases during the three and six month period ended March 31, 2024.

See Note 11 – Shareholders’ Equity in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail.

1 unchanged sentence

During the three month period ended December 31, 2023, we entered into a $200.0 million rule 10b5-1 repurchase plan to facilitate daily market share repurchases through November 15, 2024, until the cap is reached or until the plan is terminated.

As of December 31, 2023, there has been $11.1 million repurchased pursuant to the 10b5-1 repurchase plan.

As of December 31, 2023, the Company had a high level of cash reserves, as compared to the prior year, due to the cash proceeds from the HHI divestiture.

As of March 31, 2024, there has been $108.7 million repurchased pursuant to the 10b5-1 repurchase plan.

As of March 31, 2024, the Company had a high level of cash reserves, as compared to the prior year, due to the cash proceeds from the HHI divestiture.

The Company has temporarily invested a portion of its cash in short-term investments until such expenditures are considered required or necessary to the Company in executing its strategic plans and initiatives, including any further debt reduction and share buybacks.

If the Company does not use the proceeds from the HHI divestiture to repay debt or reinvest in the business within certain time periods by the terms of the Company's outstanding indebtedness, the Company may be required to make an asset sale offer to the holders of its Senior Notes pursuant to the terms of the Company's outstanding indebtedness.

We maintain a capital structure that we believe provides us with sufficient access to credit markets.

2 unchanged sentences

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 December 31, 2023, we were in compliance with all covenants under the Credit Agreement and the indentures governing the 4.00% Notes, due October 1, 2026;

At March 31, 2024, we were in compliance with all covenants under the Credit Agreement and the indentures governing the 4.00% Notes, due October 1, 2026;

the 5.00% Notes, due October 1, 2029;

32 unchanged sentences

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

Three Month Period Ended Year Ended

(in millions) December 31, 2023 September 30, 2023

Six Month Period Ended Year Ended

(in millions) March 31, 2024 September 30, 2023

Statements of Operations Data

3 unchanged sentences

Gross profit 300.5 542.1

Operating loss (16.5) (322.5)

Operating income (loss) 25.7 (322.5)

Net (loss) income from continuing operations (3.7) 0.1

Net (loss) income (12.2) 2,006.3

Net (loss) income attributable to controlling interest (12.2) 2,006.3

Net income 19.0 2,006.3

Net income attributable to controlling interest 19.0 2,006.3

Statements of Financial Position Data

3 unchanged sentences

Noncurrent Liabilities 1,771.6 1,868.2

The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of December 31, 2023 and September 30, 2023 are as follows:

(in millions) December 31, 2023 September 30, 2023

The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of March 31, 2024 and September 30, 2023 are as follows:

(in millions) March 31, 2024 September 30, 2023

Statements of Financial Position Data

4 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis