What changed in this filing

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Item 1. Financial Statements

2025-02-06 compared with 2024-08-08 · 251 added, 634 removed, 362 unchanged (71% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Financial Position

As of June 30, 2024 and September 30, 2023

As of December 29, 2024 and September 30, 2024

(in millions)

June 30, 2024 September 30, 2023

December 29, 2024 September 30, 2024

Cash and cash equivalents $ 179.9 $ 368.9

Short term investments 149.1 1,103.3

Trade receivables, net 615.2 635.4

20 unchanged sentences

Deferred income taxes 167.1 170.8

Uncertain tax benefit obligation 174.6 171.5

Other long-term liabilities 28.5 32.8

14 unchanged sentences

Condensed Consolidated Statements of Income

For the three and nine month periods ended June 30, 2024 and July 2, 2023

Three Month Periods Ended Nine Month Periods Ended

For the three month periods ended December 29, 2024 and December 31, 2023

Three Month Periods Ended

(in millions, except per share)

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

December 29, 2024 December 31, 2023

Net sales $ 700.2 $ 692.2

2 unchanged sentences

Selling, general & administrative 213.1 219.9

Impairment of goodwill — 111.1 — 111.1

Impairment of intangible assets — 53.7 43.0 120.7

Representation and warranty insurance proceeds — — ( 65.0 ) —

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

Total operating expenses 255.1 388.2 672.6 901.7

Operating income (loss) 47.7 ( 124.7 ) 148.6 ( 221.8 )

Operating income 44.7 25.0

Interest expense 6.2 19.2

Interest income ( 2.6 ) ( 23.4 )

Loss (gain) from early extinguishment of debt 2.2 8.6 ( 2.6 ) 8.6

Gain from early extinguishment of debt — ( 4.7 )

Other non-operating expense, net 4.7 4.0

Income (loss) from continuing operations before income taxes 41.5 ( 158.3 ) 146.7 ( 320.2 )

Income tax expense (benefit) 22.4 13.9 60.3 ( 33.0 )

Net income (loss) from continuing operations 19.1 ( 172.2 ) 86.4 ( 287.2 )

Income from continuing operations before income taxes 36.4 29.9

Income tax expense 11.8 12.4

Net income from continuing operations 24.6 17.5

(Loss) income from discontinued operations, net of tax ( 0.8 ) 11.7

Net income 23.8 29.2

Net (loss) income from continuing operations attributable to non-controlling interest ( 0.1 ) 0.2 ( 0.2 ) 0.5

Income from discontinued operations attributable to non-controlling interest, net of tax — 0.2 — 0.3

Net income from continuing operations attributable to non-controlling interest 0.3 0.1

Net income attributable to controlling interest $ 23.5 $ 29.1

Amounts attributable to controlling interest

Net income (loss) from continuing operations attributable to controlling interest $ 19.2 $ ( 172.4 ) $ 86.6 $ ( 287.7 )

Net income from continuing operations attributable to controlling interest $ 24.3 $ 17.4

(Loss) income from discontinued operations attributable to controlling interest, net of tax ( 0.8 ) 11.7

14 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

For the three and nine month periods ended June 30, 2024 and July 2, 2023

For the three month periods ended December 29, 2024 and December 31, 2023

Three Month Periods Ended

Nine Month Periods Ended

(in millions)

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

December 29, 2024 December 31, 2023

Net income $ 23.8 $ 29.2

Other comprehensive (loss) income

Foreign currency translation adjustment

Foreign currency translation (loss) gain

Unrealized (loss) income from net investment hedge ( 3.5 ) 1.8 ( 13.2 ) ( 44.6 )

Foreign currency translation adjustment before tax ( 11.2 ) 11.6 3.9 52.8

Foreign currency translation (loss) gain ( 65.1 ) 36.7

Unrealized loss from net investment hedge — ( 21.3 )

Foreign currency translation (loss) gain before tax ( 65.1 ) 15.4

Deferred tax effect 2.3 5.6

Foreign currency translation adjustment, net ( 10.4 ) 11.2 7.5 64.9

Foreign currency translation (loss) gain, net ( 62.8 ) 21.0

Unrealized gain (loss) on derivative instruments

1 unchanged sentence

Net reclassification for loss to income from continuing operations 0.7 5.1

Net reclassification for loss to income from discontinued operations — 2.4 — 2.3

Unrealized gain (loss) on derivative instruments after reclassification 15.7 ( 5.5 )

2 unchanged sentences

Defined benefit pension gain (loss)

Defined benefit pension loss before reclassification — ( 1.2 ) ( 0.9 ) ( 3.3 )

Defined benefit pension gain (loss) before reclassification 1.8 ( 1.1 )

Net reclassification for loss to income from continuing operations 0.5 0.2

Net reclassification for gain to income from discontinued operations — ( 0.1 ) — ( 0.1 )

Defined benefit pension gain (loss) after reclassification 2.3 ( 0.9 )

1 unchanged sentence

Net defined benefit pension gain (loss) 1.7 ( 0.7 )

Deconsolidation of discontinued operations — 26.1 — 26.1

Net change to derive comprehensive (loss) income for the period ( 7.7 ) 34.8 10.5 65.6

Comprehensive (loss) income ( 25.6 ) 45.5

Comprehensive income from continuing operations attributable to non-controlling interest — — — 0.2

Comprehensive loss from discontinued operations attributable to non-controlling interest — ( 0.2 ) — —

Deconsolidation of discontinued operations attributable to non-controlling interest — 0.7 — 0.7

Comprehensive (loss) income from continuing operations attributable to non-controlling interest ( 0.3 ) 0.1

Comprehensive (loss) income attributable to controlling interest $ ( 25.3 ) $ 45.4

2 unchanged sentences

Condensed Consolidated Statements of Shareholders' Equity

For the nine month period ended June 30, 2024

Common Stock Additional

Capital Accumulated

Earnings Accumulated

Comprehensive

Loss Treasury

Shareholders'

Interest Total

For the three month period ended December 29, 2024

Common Stock Additional Paid-in Capital

Accumulated Earnings

Accumulated Other Comprehensive Loss

Treasury Stock

Total Shareholders' Equity

Non-controlling Interest

(in millions) Shares Amount

1 unchanged sentence

Net income from continuing operations — — — 24.3 — — 24.3 0.3 24.6

Income from discontinued operations, net of tax — — — 11.7 — — 11.7 — 11.7

Other comprehensive income, net of tax — — — — 16.2 — 16.2 0.1 16.3

Accelerated share repurchase ( 1.3 ) — 83.2 — — ( 83.2 ) — — —

Treasury stock repurchases ( 3.3 ) — — — — ( 243.0 ) ( 243.0 ) — ( 243.0 )

Excise tax on net share repurchases — — — — — ( 3.1 ) ( 3.1 ) — ( 3.1 )

Restricted stock issued and related tax withholdings 0.1 — ( 14.3 ) — — 8.9 ( 5.4 ) — ( 5.4 )

Share based compensation — — 3.9 — — — 3.9 — 3.9

Dividends declared — — — ( 14.5 ) — — ( 14.5 ) — ( 14.5 )

Balances as of December 31, 2023 30.8 0.5 1,993.6 2,110.6 ( 233.2 ) ( 1,570.7 ) 2,300.8 0.9 2,301.7

Net income (loss) from continuing operations — — — 50.1 — — 50.1 ( 0.2 ) 49.9

Income from discontinued operations, net of tax — — — 11.0 — — 11.0 — 11.0

Other comprehensive income (loss), net of tax — — — — 2.0 — 2.0 ( 0.1 ) 1.9

Treasury stock repurchases ( 1.2 ) — — — — ( 97.6 ) ( 97.6 ) — ( 97.6 )

Excise tax on net share repurchases — — — — — ( 1.0 ) ( 1.0 ) — ( 1.0 )

Share based compensation — — 4.5 — — — 4.5 — 4.5

Dividends declared — — — ( 12.9 ) — — ( 12.9 ) — ( 12.9 )

Balances as of March 31, 2024 29.6 0.5 $ 1,998.1 2,158.8 ( 231.2 ) ( 1,669.3 ) 2,256.9 0.6 2,257.5

Net income (loss) from continuing operations — — — 19.2 — — 19.2 ( 0.1 ) 19.1

Loss from discontinued operations, net of tax — — — ( 0.8 ) — — ( 0.8 ) — ( 0.8 )

Other comprehensive loss, net of tax — — — — ( 49.1 ) — ( 49.1 ) ( 0.3 ) ( 49.4 )

Premium on capped call transactions, net of tax — — ( 19.2 ) — — — ( 19.2 ) — ( 19.2 )

Treasury stock repurchases ( 0.8 ) — — — — ( 72.9 ) ( 72.9 ) — ( 72.9 )

3 unchanged sentences

Dividends declared — — — ( 13.6 ) — — ( 13.6 ) — ( 13.6 )

Balances at June 30, 2024 28.0 $ 0.5 $ 1,983.1 $ 2,152.6 $ ( 238.9 ) $ ( 1,812.7 ) $ 2,084.6 $ 0.5 $ 2,085.1

Dividend declared by subsidiary to NCI — — — — — — — ( 0.7 ) ( 0.7 )

Balances as of December 29, 2024 27.3 $ 0.5 $ 1,982.5 $ 2,178.9 $ ( 253.1 ) $ ( 1,880.3 ) $ 2,028.5 $ 0.1 $ 2,028.6

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Shareholders' Equity

For the nine month period ended July 2, 2023

Common Stock Additional

Capital Accumulated

Earnings Accumulated

Comprehensive

Loss Treasury

Shareholders'

Interest Total

For the three month period ended December 31, 2023

Common Stock Additional Paid-in Capital

Accumulated Earnings

Accumulated Other Comprehensive Loss

Treasury Stock

Total Shareholders' Equity

Non-controlling Interest

(in millions) Shares Amount

Balances at September 30, 2023 35.3 $ 0.5 $ 1,920.8 $ 2,096.0 $ ( 249.4 ) $ ( 1,250.3 ) $ 2,517.6 $ 0.7 $ 2,518.3

Net (loss) income from continuing operations — — — ( 40.3 ) — — ( 40.3 ) 0.3 ( 40.0 )

Income from discontinued operations, net of tax — — — 19.4 — — 19.4 0.1 19.5

Other comprehensive income, net of tax — — — — 14.2 — 14.2 0.3 14.5

Restricted stock issued and related tax withholdings 0.2 — ( 25.1 ) — — 14.6 ( 10.5 ) — ( 10.5 )

Share based compensation — — 4.1 — — — 4.1 — 4.1

Dividends declared — — — ( 17.3 ) — — ( 17.3 ) — ( 17.3 )

Balances as of January 1, 2023 41.0 $ 0.5 2,011.5 323.9 ( 288.9 ) ( 814.2 ) 1,232.8 6.6 1,239.4

Net (loss) income from continuing operations — — — ( 75.1 ) — — ( 75.1 ) 0.1 ( 75.0 )

Net income from continuing operations — — — 17.4 — — 17.4 0.1 17.5

Income from discontinued operations, net of tax — — — 11.7 — — 11.7 — 11.7

Other comprehensive income, net of tax — — — — 16.2 — 16.2 0.1 16.3

Share based compensation — — 4.7 — — — 4.7 — 4.7

Dividends declared — — — ( 17.6 ) — — ( 17.6 ) — ( 17.6 )

Balances as of April 2, 2023 41.0 0.5 2,016.2 252.6 ( 272.9 ) ( 814.2 ) 1,182.2 6.9 1,189.1

Net (loss) income from continuing operations — — — ( 172.4 ) — — ( 172.4 ) 0.2 ( 172.2 )

Income from discontinued operations, net of tax — — — 2,031.6 — — 2,031.6 0.2 2,031.8

Deconsolidation of discontinued operations — — — — 25.4 — 25.4 ( 5.9 ) 19.5

Other comprehensive income (loss), net of tax — — — — 8.9 — 8.9 ( 0.2 ) 8.7

Accelerated share repurchase ( 1.3 ) — 83.2 — — ( 83.2 ) — — —

Treasury stock repurchases ( 3.3 ) — — — — ( 243.0 ) ( 243.0 ) — ( 243.0 )

Excise tax on net share repurchases — — — — — ( 3.1 ) ( 3.1 ) — ( 3.1 )

2 unchanged sentences

Dividends declared — — — ( 14.5 ) — — ( 14.5 ) — ( 14.5 )

Balances at July 2, 2023 35.7 $ 0.5 $ 1,919.7 $ 2,094.3 $ ( 238.6 ) $ ( 1,217.2 ) $ 2,558.7 $ 1.2 $ 2,559.9

Balances as of December 31, 2023 30.8 $ 0.5 $ 1,993.6 $ 2,110.6 $ ( 233.2 ) $ ( 1,570.7 ) $ 2,300.8 $ 0.9 $ 2,301.7

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the nine month periods ended June 30, 2024 and July 2, 2023

Nine Month Periods Ended

(in millions) June 30, 2024 July 2, 2023

For the three month periods ended December 29, 2024 and December 31, 2023

Three Month Periods Ended

(in millions) December 29, 2024 December 31, 2023

Cash flows from operating activities

Net income $ 23.8 $ 29.2

Income from discontinued operations, net of tax 9.6 2,072.7

Net income (loss) from continuing operations 86.4 ( 287.2 )

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations:

(Loss) income from discontinued operations, net of tax ( 0.8 ) 11.7

Net income from continuing operations 24.6 17.5

Adjustments to reconcile net income from continuing operations to net cash provided (used) by operating activities from continuing operations:

Depreciation 14.0 14.4

1 unchanged sentence

Share based compensation 4.7 3.9

Impairment of goodwill — 111.1

Impairment of intangible assets — 4.0

Impairment of property, plant and equipment and operating lease assets 5.6 8.1

Gain on sale of property, plant and equipment — ( 2.7 )

(Gain) loss on early extinguishment of debt ( 2.7 ) 8.6

Non-cash purchase accounting adjustments 1.1 1.4

Gain on early extinguishment of debt — ( 4.7 )

Amortization of debt issuance costs and debt discount 0.9 1.2

Gain from remeasurement of contingent consideration liability — ( 1.5 )

Non-cash purchase accounting adjustments — 0.5

Deferred tax benefit ( 1.9 ) ( 0.8 )

Net changes in operating assets and liabilities ( 124.7 ) ( 29.0 )

Net cash provided by operating activities from continuing operations 178.4 72.5

Net cash (used) provided by operating activities from discontinued operations ( 96.5 ) 31.8

Net cash provided by operating activities 81.9 104.3

Net cash (used) provided by operating activities from continuing operations ( 71.9 ) 18.1

Net cash used by operating activities from discontinued operations ( 0.5 ) ( 22.4 )

Net cash used by operating activities ( 72.4 ) ( 4.3 )

Cash flows from investing activities

Purchases of property, plant and equipment ( 5.9 ) ( 8.4 )

Proceeds from disposal of property, plant and equipment — 3.0

Proceeds from sale of discontinued operations, net of cash — 4,334.7

Purchases of short term investments — ( 700.0 )

Proceeds from sale of short term investments — 842.0

Purchase price settlement from sale of the HHI business ( 26.9 ) —

Other investing activity 0.2 ( 0.1 )

Net cash provided by investing activities from continuing operations 885.0 4,293.3

Net cash used by investing activities from discontinued operations — ( 11.8 )

Net cash provided by investing activities 885.0 4,281.5

Net cash (used) provided by investing activities ( 5.9 ) 133.6

Cash flows from financing activities

Payment of debt and debt premium ( 2.6 ) ( 174.1 )

Proceeds from issuance of debt 350.0 —

Payment of debt issuance costs ( 0.1 ) ( 3.2 )

Premium on capped call transactions ( 25.2 ) —

Treasury stock purchases ( 482.7 ) —

Accelerated share repurchase — ( 500.0 )

Dividends paid to shareholders ( 13.2 ) ( 14.1 )

Treasury stock purchases ( 72.9 ) ( 243.0 )

Excise tax paid on net share repurchases ( 4.1 ) —

Share based award tax withholding payments, net of proceeds upon vesting ( 4.4 ) ( 5.4 )

Net cash used by financing activities from continuing operations ( 1,563.9 ) ( 1,706.3 )

Net cash used by financing activities from discontinued operations — ( 0.8 )

Net cash used by financing activities ( 97.3 ) ( 439.8 )

4 unchanged sentences

Supplemental disclosure of cash flow information

Cash paid for interest associated with continued operations $ 66.7 $ 89.2

Cash paid for interest associated with discontinued operations — 45.3

Cash paid for taxes associated with continued operations 22.3 21.6

Cash paid for interest associated with continuing operations $ 7.0 $ 21.8

Cash paid for taxes associated with continuing operations 8.0 3.4

Cash paid for taxes associated with discontinued operations 2.6 —

2 unchanged sentences

Non cash financing activities

Non-cash excise tax on net share repurchases 0.6 3.1

Issuance of shares through stock compensation plan 9.4 14.0

11 unchanged sentences

The exceptions are the first quarter, which begins on October 1, and the fourth quarter, which ends on September 30.

As a result, the fiscal period end date for the three and nine month periods included within this Quarterly Report for the Company are June 30, 2024 and July 2, 2023, respectively.

Newly Adopted Accounting Standards

In September 2022, the FASB issued ASU 2022-04, Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations to enhance transparency about the use of supplier finance programs.

Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a roll-forward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented.

The amendments in ASU 2022-04 are effective for all entities for fiscal years beginning after December 15, 2022, including interim periods within those financial years, except for the disclosure of roll-forward information, which is effective for fiscal years beginning after December 15, 2023.

We adopted the ASU during the year ended September 30, 2023, except for the disclosure of roll-forward information, which was adopted during the first quarter of fiscal 2024.

The following table summarizes the roll-forward of the supplier finance program for the nine month period ended June 30, 2024:

(in millions)

Outstanding payment obligations as of September 30, 2023

Invoices confirmed during the period 41.9

Confirmed invoices paid during the period ( 52.7 )

Outstanding payment obligations as of June 30, 2024

The outstanding payment obligations under the supplier finance program are included in Accounts Payable in the Company's Condensed Consolidated Statement of Financial Position.

As a result, the fiscal period end date for the three month periods included within this Quarterly Report for the Company are December 29, 2024 and December 31, 2023, respectively.

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others.

2 unchanged sentences

This ASU will be effective for our Form 10-K for the year ending September 30, 2025 and our Form 10-Q for the first quarter of the year ending September 30, 2026.

We are currently evaluating the impact this ASU may have on our consolidated financial statement disclosures.

The Company is currently evaluating the impact this ASU may have on the Company's consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

4 unchanged sentences

This ASU will be effective for our Form 10-K for the year ending September 30, 2026.

We are currently evaluating the impact this ASU may have on our consolidated financial statement disclosures.

The Company is currently evaluating the impact this ASU may have on the Company's consolidated financial statements.

In March 2024, the U.S.

6 unchanged sentences

The Company is currently assessing the impact that these rules may have on the Company's consolidated financial statements.

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 2 – DIVESTITURES

The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the Condensed Consolidated Statements of Income for the three and nine month periods ended June 30, 2024 and July 2, 2023:

Three Month Periods Ended Nine Month Periods Ended

(in millions) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Income from discontinued operations before income taxes – HHI $ — $ 32.5 $ 15.2 $ 136.9

Gain on sale of discontinued operations before income taxes – HHI — 2,824.9 — 2,824.9

(Loss) income from discontinued operations before income taxes – Other ( 0.1 ) ( 0.2 ) 10.2 ( 2.2 )

Interest expense on corporate debt allocated to discontinued operations — 15.4 — 49.4

(Loss) income from discontinued operations before income taxes ( 0.1 ) 2,841.8 25.4 2,910.2

Income tax expense from discontinued operations 13.0 810.0 15.8 837.5

(Loss) income from discontinued operations, net of tax ( 13.1 ) 2,031.8 9.6 2,072.7

Income from discontinued operations attributable to noncontrolling interest, net of tax — 0.2 — 0.3

(Loss) income from discontinued operations attributable to controlling interest, net of tax $ ( 13.1 ) $ 2,031.6 $ 9.6 $ 2,072.4

Interest from corporate debt allocated to discontinued operations in the prior year includes interest expense from Term Loans, which was paid down following the close of the HHI divestiture on June 20, 2023, and interest expense from corporate debt not directly attributable to or related to other operations based on the ratio of net assets of the disposal group held for sale to the consolidated net assets of the Company plus consolidated debt, excluding debt assumed in the transaction, required to be repaid, or directly attributable to other operations of the Company.

Hardware and Home Improvement ("HHI")

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

On June 20, 2023, the Company completed its divestiture of its HHI segment.

The Company and ASSA have made customary representations and warranties and have agreed to customary covenants relating to the acquisition.

The Company and ASSA have agreed to indemnify each other for losses arising from certain breaches of the Purchase Agreement and for certain other matters.

In particular, the Company has agreed to indemnify ASSA for certain liabilities relating to the assets retained by the Company, and ASSA has agreed to indemnify the Company for certain liabilities assumed by ASSA, in each case as described in the Purchase Agreement.

The Company and ASSA have agreed to enter into related agreements ancillary to the acquisition that became effective upon the consummation of the acquisition, including a customary transition services agreements ("TSA") and providing for both forward and reverse transition services.

The consummation of the acquisition was not subject to any financing condition.

During the nine month period ended June 30, 2024, the Company recognized $ 15.2 million in income from discontinued operations before income taxes - HHI related to a gain realized by a subsequently agreed-upon reduction on accrued transaction fees that was previously accrued and recognized as a component of the gain on sale for the HHI divestiture when the transaction closed in the prior year.

The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture for the three and nine month period ended July 2, 2023:

Three Month Period Ended

(in millions)

July 2, 2023 July 2, 2023

Net sales $ 296.4 $ 1,042.5

Cost of goods sold 203.6 701.6

Gross profit 92.8 340.9

Operating expenses 59.4 199.4

Operating income 33.4 141.5

Interest expense 0.7 2.4

Other non-operating expense, net 0.2 2.2

Income from discontinued operations before income taxes $ 32.5 $ 136.9

Interest expense consists of interest from debt directly attributable to HHI operations that primarily consist of interest from finance leases.

The following table presents significant non-cash items and capital expenditures of discontinued operations from the HHI divestiture for the three and nine month period ended July 2, 2023:

Three Month Period Ended

(in millions)

July 2, 2023 July 2, 2023

Share based compensation $ 0.4 $ 1.5

Purchases of property, plant and equipment 3.9 11.9

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 2 – DIVESTITURES (continued)

The Company and ASSA entered into customary TSAs that became effective upon the consummation of the transaction.

The TSAs support various shared back office administrative functions, including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement;

supporting both the transferred HHI operations and the continuing operations of the Company.

Charges associated with TSAs are recognized as bundled service costs under a fixed fee structure by the respective service or function and also include one time pass-through charges including warehousing, freight, among others.

TSA charges are settled periodically between the Company and ASSA on a net basis.

Charges to ASSA are recognized as a reduction of the respective operating expense incurred and charges from ASSA are recognized as an operating expense depending upon the function supported by ASSA.

The TSAs have an overall expected time period of 12 months following the close of the transaction with variability in expiration dependent upon the completed transition of the respective service or function, and may provide up to 12 additional months for a total duration of up to 24 months following the close of the transaction.

The Company recognized net income of $ 7.9 million and $ 23.7 million associated with TSA charges during the three and nine month periods ended June 30, 2024, respectively.

Additionally, the Company and ASSA will receive cash and make payments on behalf of the respective counterparty's operations as part of the shared administrative functions, resulting in cash flow being commingled with the operating cash flow of the Company.

The Company also maintains a net payable or receivable with ASSA for net working capital attributable to commingled cash flow during the transaction period.

As of June 30, 2024 and September 30, 2023, the Company had a net receivable of $ 27.0 million and $ 4.0 million, respectively, included in Other Receivables on the Company's Condensed Consolidated Statement of Financial Position consisting of amounts due from ASSA for commingled cash flow and net TSA charges, including amounts subject to repayment by the Company.

The Company has also recognized net payables to ASSA for outstanding settlements associated with the Purchase Agreement, including tax indemnifications for outstanding settlements with tax authorities and uncertain tax benefit obligations, among others.

As of June 30, 2024, the Company recognized $ 2.6 million, included with Other Long-Term Liabilities, on the Company's Condensed Consolidated Statements of Financial Position.

As of September 30, 2023, the Company recognized $ 27.3 million, included within Accounts Payable, and $ 2.6 million, included within Other Long-Term Liabilities, on the Company’s Condensed Consolidated Statements of Financial Position.

During the nine month period ended June 30, 2024, the Company paid $ 26.9 million to complete the purchase price settlement in accordance with the Purchase Agreement.

Income from discontinued operations before income taxes – other for the three and nine month periods ended June 30, 2024 includes incremental changes to tax and legal indemnifications and other agreed-upon funding under the acquisition agreements for the sale and divestiture of the Global Batteries & Lighting ("GBL") and Global Auto Care ("GAC") divisions to Energizer Holdings, Inc.

("Energizer") during the year ended September 30, 2019.

During the nine month period ended June 30, 2024, the Company realized a gain attributable to a settlement on outstanding tax audits that were previously recognized as uncertain tax benefit obligations at the time of sale and indemnified in accordance with the acquisition agreement.

As of June 30, 2024, the Company recognized $ 1.1 million related to indemnification payables in accordance with the acquisition agreements, primarily attributable to uncertain tax benefit obligations and outstanding settlements with tax authorities that were transferred, included within Other Current Liabilities on the Company's Condensed Consolidated Statements of Financial Position.

As of September 30, 2023, the Company recognized $ 25.3 million, including $ 8.6 million within Other Current Liabilities and $ 16.7 million, within Other Long-Term Liabilities on the Company’s Condensed Consolidated Statements of Financial Position.

NOTE 3 – REVENUE RECOGNITION

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which provides updates to qualitative and quantitative disclosure requirements over the disaggregation of relevant expense captions within the income statement to provide more transparency and useful information on expenses including tabular presentation of prescribed expense categories such as the purchases of inventory, employee compensation, depreciation, intangible asset amortization, and inclusion of other specific expense, gains and losses required by existing GAAP with reconciliation of disaggregation to the face of the income statement.

The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

The amendment should be applied prospectively, however, retrospective application is also permitted.

This ASU will be effective for our fiscal year ending September 30, 2028.

The Company is currently evaluating the impact this ASU may have on the Company's consolidated financial statements.

NOTE 2 – REVENUE RECOGNITION AND RECEIVABLES

The Company generates all of its revenue from contracts with customers.

The following table disaggregates our revenue for the three and nine month periods ended June 30, 2024 and July 2, 2023, by the Company’s key revenue streams, segments and geographic region (based upon destination):

Three Month Period Ended June 30, 2024 Three Month Period Ended July 2, 2023

The following table disaggregates our revenue for the three month periods ended December 29, 2024 and December 31, 2023, by segment and geographic region (based upon destination) and revenue type:

Three Month Period Ended December 29, 2024 Three Month Period Ended December 31, 2023

(in millions)

Product Sales

$ 173.4 $ 207.5 $ 115.7 $ 496.6 $ 167.9 $ 184.1 $ 105.4 $ 457.4

93.7 — 108.6 202.3 88.0 — 104.2 192.2

3.9 2.6 44.5 51.0 4.7 1.5 47.4 53.6

7.5 — 15.7 23.2 7.5 — 17.4 24.9

2.4 0.9 1.6 4.9 2.8 1.0 2.0 5.8

Service and other 1.3 — 0.1 1.4 1.4 — 0.2 1.6

Total revenue $ 282.2 $ 211.0 $ 286.2 $ 779.4 $ 272.3 $ 186.6 $ 276.6 $ 735.5

Nine Month Period Ended June 30, 2024 Nine Month Period Ended July 2, 2023

(in millions) GPC H&G HPC Total GPC H&G

Product Sales

Geographic Region

NA $ 152.0 $ 90.5 $ 131.2 $ 373.7 $ 172.6 $ 70.4 $ 135.9 $ 378.9

2 unchanged sentences

APAC 6.9 — 19.1 26.0 6.2 — 18.9 25.1

Total revenue $ 260.0 $ 92.1 $ 348.1 $ 700.2 $ 276.9 $ 72.0 $ 343.3 $ 692.2

Product sales $ 257.1 $ 91.9 $ 346.3 $ 695.3 $ 272.9 $ 71.7 $ 341.4 $ 686.0

Licensing 2.1 0.2 1.7 4.0 2.5 0.3 1.7 4.5

1 unchanged sentence

Total revenue $ 260.0 $ 92.1 $ 348.1 $ 700.2 $ 276.9 $ 72.0 $ 343.3 $ 692.2

The Company has a broad range of customers, including many large retail customers.

During the three month periods ended June 30, 2024 and July 2, 2023, there were two large retail customers, each exceeding 10% of consolidated Net Sales and representing 37.7 % and 33.4 % of consolidated Net Sales, respectively in each period.

During the nine month periods ended June 30, 2024 and July 2, 2023, there were two large retail customers exceeding 10% of consolidated Net Sales and

SPECTRUM BRANDS HOLDINGS, INC.

1 unchanged sentence

(in millions, unaudited)

NOTE 3 – REVENUE RECOGNITION (continued)

representing 36.4 % and 34.3 % of consolidated Net Sales, respectively.

All segments sell products to the two large retail customers exceeding 10% of consolidated Net Sales.

A significant portion of our product sales from our HPC segment are subject to the continued use and access to the Black & Decker® ("B+D") brand through a trademark license agreement with Stanley Black and Decker ("SBD").

Net sales from B+D product sales consisted of $ 86.4 million , or 11.1 % of consolidated net sales, and $ 84.2 million, or 11.4 % of consolidated Net Sales, for the three month periods ended June 30, 2024 and July 2, 2023, respectively.

Net sales from B+D product sales consisted of $ 257.6 million, or 11.8 %, and $ 256.0 million, or 11.8 %, of consolidated Net Sales for the nine month periods ended June 30, 2024 and July 2, 2023, respectively.

All other significant brands and tradenames used in the Company’s commercial operations are directly owned and not subject to further restrictions.

In May 2024, the Company and its HPC segment entered into a new trademark license agreement (the "License Agreement") with SBD which terminates the previous arrangement, with an effective date of January 1, 2024.

Pursuant to the License Agreement, the Company will license the B+D brand in North America, Latin America (excluding Brazil) and the Caribbean for four categories of household appliance:

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

The License Agreement has an initial four-year term ending December 31, 2027, with two subsequent four-year renewal rights each based upon meeting certain sales targets at the end of each renewal period, extending the total contract term to December 31, 2035.

The License Agreement does not renew if these targets are not satisfied.

Under the terms of the License Agreement, the Company agrees to pay SBD royalties based on a percentage of sales, with a minimum annual royalty payment of $ 11.7 million for the first year in the initial term, with decreases in subsequent years in the initial term down to $ 10.2 million and is subject to adjustment with each renewal period.

The License Agreement also requires us to comply with maximum annual returns rates for products and promotional spending commitments.

In the normal course of business, the Company may allow customers to return products or take credit for product returns per the provisions in a sale agreement.

Estimated product returns are recorded as a reduction in revenues at the time of sale based upon historical product return experience, adjusted for known trends, to arrive at the amount of consideration expected to be received.

The allowance for product returns as of June 30, 2024 and September 30, 2023 was $ 13.9 million and $ 12.8 million, respectively.

The increase in the allowance for product returns are attributable to the additional returns estimated for the recently re-issued product recalls with the HPC segment in collaboration with the U.S.

Consumer Product Safety Commission ("CPSC"), further discussed in Note 15 - Commitments and Contingencies .

NOTE 4 – RECEIVABLES AND CONCENTRATION OF CREDIT RISK

The allowance for credit losses on the Company's trade receivables as of June 30, 2024 and September 30, 2023 was $ 8.1 million and $ 7.7 million, respectively.

The Company has a broad range of customers, including many large retail customers.

As of June 30, 2024, there were three large retail customers exceeding 10% of consolidated Net Trade Receivables and representing 56.7 % of the Company's consolidated Net Trade Receivables.

As of September 30, 2023, there were two large retail customers exceeding 10% of consolidated Net Trade Receivables and representing 39.8 % of the Company's consolidated Net Trade Receivables .

NOTE 2 – REVENUE RECOGNITION AND RECEIVABLES (continued)

The Company has identified significant customers consisting of two large retail customers, each regularly exceeding 10% of consolidated net sales.

All segments sell products to the significant customers and sales with the significant customers are considered significant to the respective segments.

The following table summarizes significant concentration risk associated with net sales for the three month periods ended December 29, 2024 and December 31, 2023.

(% of Net Sales)

December 29, 2024 December 31, 2023

Significant customers, exceeding 10% of net sales 38.0 % 38.2 %

Subject to B&D trademark license agreement 12.5 % 13.6 %

The following summarizes the concentration risk of the associated receivables from the two significant customers.

There were no additional concentrations of credit risk exceeding 10% of net trade receivables.

(% of Trade Receivables, Net)

December 29, 2024 September 30, 2024

Significant customers 45.6 % 42.6 %

The following summarizes the allowance for product returns with direct customers and estimated credit losses on trade receivables as of December 29, 2024 and September 30, 2024.

Costs and reserves associated with standard product warranties with consumers are not material to the condensed consolidated financial statements.

(in millions) Line Item December 29, 2024 September 30, 2024

Liability for product returns Other current liabilities $ 13.0 $ 14.4

Allowance for doubtful accounts Trade receivables, net 7.9 8.1

NOTE 3 – INVENTORIES

Inventories consist of the following:

Inventories consists of the following:

(in millions)

June 30, 2024 September 30, 2023

December 29, 2024 September 30, 2024

Raw materials

5 unchanged sentences

Property, plant and equipment consist of the following:

(in millions) June 30, 2024 September 30, 2023

(in millions) December 29, 2024 September 30, 2024

Land, buildings and improvements $ 87.1 $ 88.2

6 unchanged sentences

Property, plant and equipment, net $ 255.8 $ 266.6

Depreciation expense from property, plant, and equipment for the three month periods ended June 30, 2024 and July 2, 2023, was $ 14.1 million and $ 12.1 million, respectively;

and for the nine month periods ended June 30, 2024 and July 2, 2023 was $ 42.9 million and $ 36.2 million, respectively.

During the three and nine month periods ended June 30, 2024, the Company recognized impairment charges of $ 5.1 million and $ 5.6 million, respectively, associated with the exit and closing of distribution facilities in the HPC segment, included as Selling General and Administrative Expenses on the Condensed Consolidated Statements of Income.

Depreciation expense on property, plant and equipment for the three month periods ended December 29, 2024 and December 31, 2023 is as follows.

(in millions) December 29, 2024 December 31, 2023

Depreciation expense $ 14.0 $ 14.4

Deferred implementation costs for hosted cloud computing arrangements are as follows:

(in millions) December 29, 2024 September 30, 2024

Deferred cloud computing costs, net

Prepaid expenses and other current assets 5.5 4.3

Deferred charges and other 1.9 4.0

Amortization expense of deferred implementation costs for hosted cloud computing costs arrangements for the three month periods ended December 29, 2024 and December 31, 2023 is as follows:

(in millions) December 29, 2024 December 31, 2023

Amortization expense $ 1.5 $ 0.7

SPECTRUM BRANDS HOLDINGS, INC.

2 unchanged sentences

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS

Goodwill consists of the following:

Goodwill, by segment, consists of the following:

(in millions)

1 unchanged sentence

Foreign currency impact ( 8.4 ) — ( 8.4 )

As of June 30, 2024 $ 515.5 $ 342.6 $ 858.1

As of December 29, 2024 $ 513.9 $ 342.6 $ 856.5

The carrying value and accumulated amortization of intangible assets are as follows:

June 30, 2024 September 30, 2023

December 29, 2024 September 30, 2024

(in millions) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net

6 unchanged sentences

Total intangible assets $ 1,471.8 $ ( 508.9 ) $ 962.9 $ 1,494.6 $ ( 504.2 ) $ 990.4

During the nine month period ended June 30, 2024, the Company and H&G segment identified a triggering event for our Rejuvenate® tradename attributable to a loss of a key distribution expansion opportunity resulting in a significant shift in the projected distribution strategy that reduced the anticipated near-term sales opportunities and expectations, resulting in the recognition of a $ 39.0 million impairment on the indefinite lived intangible asset.

Additionally, the Company and the HPC segment identified a triggering event attributable to a change in brand strategy for a non-core tradename, resulting in recognition of a $ 4.0 million impairment on the indefinite intangible assets.

Amortization expense from the intangible assets for the three month periods ended June 30, 2024 and July 2, 2023 was $ 11.1 million and $ 10.5 million, respectively, and for the nine month periods ended June 30, 2024 and July 2, 2023 was $ 33.4 million and $ 31.4 million, respectively.

Amortization expense on intangible assets for the three month periods ended December 29, 2024 and December 31, 2023 is as follows.

(in millions) December 29, 2024 December 31, 2023

Amortization expense $ 10.5 $ 11.1

Excluding the impact of any future acquisitions, dispositions or changes in foreign currency, the Company estimates annual amortization expense of intangible assets for the next five fiscal years will be as follows:

1 unchanged sentence

NOTE 6 – DEBT

Debt with external lenders consists of the following:

June 30, 2024 September 30, 2023

Debt with external lenders consist of the following:

December 29, 2024 September 30, 2024

(in millions) Amount Rate Amount Rate

3 unchanged sentences

4.9 5.0 % 4.9 5.0 %

5.00 % Notes, due October 1, 2029

4.9 5.0 % 297.2 5.0 %

5.50 % Notes, due July 15, 2030

7 unchanged sentences

Long-term debt, net of current portion $ 549.6 $ 551.4

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 8 - DEBT (continued)

Credit Agreement

On October 19, 2023, Spectrum Brands, Inc.

("SBI"), a wholly-owned subsidiary of Spectrum Brands, Holdings, Inc.

("SBH"), and SB/RH Holdings, LLC, a wholly-owned subsidiary of Spectrum Brands Holdings, Inc.

and parent to SBI, entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”), by and among the Company, SB/RH Holdings, LLC, Royal Bank of Canada, as the administrative agent, and the lenders party thereto.

The proceeds of the Credit Agreement will be used for working capital needs and other general corporate purposes.

The Credit Agreement refinanced the Company’s previous credit agreement and includes certain modified terms from the previous Credit Agreement, including extending the maturity to October 19, 2028, and the reduction of the Revolver Facility to $ 500.0 million (with a U.S.

dollar tranche and a multicurrency tranche).

The Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on SBI and its restricted subsidiaries' ability to incur indebtedness, create liens, make investments, pay dividends or make certain other distributions, and merge or consolidate or sell assets, in each case subject to certain expectations set forth in the Credit Agreement.

The aggregate commitment amount with respect to (a) the U.S.

dollar tranche of the Revolving Facility is $ 400 million and (b) the multi-currency tranche of the Revolving Facility is $ 100 million.

The commitment fee rate is equal to 0.20 % of the unused commitments under the Revolving Facility (which may be increased to a maximum rate equal to 0.40 % based on certain total net leverage ratios specified in the Credit Agreement).

All outstanding amounts under the U.S.

dollar tranche (if funded in U.S.

dollars) will bear interest, at the option of the Company, at a rate per annum equal to (x) Term SOFR, plus a margin ranging between 1.00 % to 2.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement) or (y) the Alternate Base Rate (as defined in the Credit Agreement), plus a margin ranging between 0.00 % to 1.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement).

The multi-currency tranche (if funded in Euros) will bear interest at a rate per annum equal to the EURIBOR Rate, plus a margin ranging between 1.00 % to 2.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement).

The multi-currency tranche (if funded in Canadian dollars) will bear interest, at the option of the Company, at a rate per annum equal to (x) Term CORRA (Canadian Overnight Repo Rate Average), plus a margin ranging between 1.00 % to 2.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement) or (y) the Canadian Prime Rate, plus a margin ranging between 0.00 % to 1.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement).

The multi-currency tranche (if funded in Pounds Sterling) will bear interest at a rate per annum equal to the SONIA, plus a margin ranging between 1.00 % to 2.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement).

During the nine month period ended June 30, 2024, the Company incurred $ 4.0 million in fees in connection with the closing of the Credit Agreement, with $ 3.2 million in fees capitalized and amortized as debt issuance costs over the term of the Credit Agreement.

As of June 30, 2024, the Company's Revolver Facility has a borrowing availability of $ 490.4 million, net of outstanding letters of credit of $ 9.6 million.

Exchangeable Senior Notes

On May 23, 2024, SBI completed its offering of $ 350.0 million principal amount of 3.375 % Exchangeable Senior Notes due 2029 (the “Exchangeable Notes”), which are unconditionally guaranteed jointly and severally, on a senior unsecured basis by SBH and, subject to certain exceptions, each of SBI's existing and future domestic subsidiaries that guarantee other debt securities issued by SBI or SBH in the form of senior unsecured notes or convertible or exchangeable notes..

The Notes are governed by the terms of the indenture, dated as of May 23, 2024, among the Company, the guarantors party thereto and U.S.

Bank Trust Company, National Association, as trustee.

The Exchangeable Notes will mature on June 1, 2029, unless earlier repurchased, redeemed or converted.

The Exchangeable Notes are senior unsecured obligations of the Company with interest payable semiannually June 1 and December 1 of each year, beginning on December 1, 2024.

Proceeds from the issuance were used to fund a $ 50.0 million share repurchase of SBH's common stock, to pay $ 25.2 million in premiums on the Capped Calls (as described below) and other general company needs.

Holders may convert their notes at their option at any time after the close of business on the business day immediately preceding March 1, 2029 under the following circumstances:

• During any calendar quarter (and only during such calendar quarter) beginning after September 30, 2024, if, the last reported sale price per share of SBH’s common stock exceeds 130 % of the applicable conversion price on each applicable trading day for at least 20 trading days in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

• During the five business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of the Exchangeable Notes for such trading day was less than 98 % of the product of the last reported sale price of SBH’s common stock and the applicable conversion rate on such trading day;

• The Company issues to common stockholders any rights, options, or warrants, entitling them to purchase shares of common stock at a price per share less than the average closing sale price of 10 consecutive trading days, or the Company’s election to make a distribution to common stockholders exceeding 10% of the previous day’s closing sale price;

• Upon the occurrence of specified corporate events, as set forth in the indenture governing the Exchangeable Notes;

• Prior to the related redemption date if the Company calls the Exchangeable Notes for redemption.

On or after March 1, 2029, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their Exchangeable Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances.

The conversion rate for the Exchangeable Notes is 8.2060 shares of common stock per $1,000 principal amount of notes (which is equal to an initial conversion price of approximately $ 121.86 per share of SBH’s common stock), subject to adjustment as set forth in the Indenture.

Upon conversion, the Company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, common stock or a combination of cash and common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the notes being converted.

If a make-whole adjustment event, as described in the Indenture, occurs and a holder elects to convert its Exchangeable Notes in connection with such make-whole adjustment event, such holder may be entitled to an increase in the conversion rate as described in the Indenture.

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 8 - DEBT (continued)

The Exchangeable Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after June 7, 2027 if the notes are freely tradeable and on or before the 41 st scheduled trading day immediately before the maturity date, if the last reported sale price per share of the SBH’s common stock exceeds 130 % of the conversion price then in effect for at least 20 of any 30 consecutive trading day period ending on, and including, the trading day immediately before the date the Company sends the related redemption notice at a redemption price equal to 100 % of the principal amount of the Exchangeable Notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date.

Upon the occurrence of certain fundamental changes involving the Company, holders of the Exchangeable Notes may require the Company to repurchase for cash all or part of their Exchangeable Notes at a repurchase price equal to 100 % of the principal amount of the Exchangeable Notes to be repurchased, plus accrued and unpaid interest.

The Company incurred $ 11.8 million in fees and expenses in connection with the issuance of the Exchangeable Notes which were capitalized as debt issuance costs and will be amortized over the term of the Exchangeable Notes.

Since the issuance of the Exchangeable Notes, the conditions allowing holders of the Exchangeable Notes to convert have not been met.

The Exchangeable Notes were therefore not convertible as of June 30, 2024, and were classified as long-term debt on the Company’s Condensed Consolidated Statement of Financial Position.

Capped Call Transactions

In connection with the issuance of the Exchangeable Notes, the Company entered into capped call transactions with certain financial institutions (“Capped Calls”).

The Capped Calls each have an initial strike price of approximately $ 121.86 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Exchangeable Notes.

The Capped Calls have initial cap prices of $ 159.36 per share, subject to certain adjustments.

The Capped Calls are expected to partially offset the potential dilution to the Company’s common stock upon any conversion of the Exchangeable Notes, with such offset subject to a cap based on the cap price.

The Capped Calls cover, subject to anti-dilution adjustments, approximately 0.7 million shares of SBH’s common stock.

The Capped Calls will expire upon the maturity of the Exchangeable Notes.

The Company used $ 25.2 million of the net proceeds from the offering of the Exchangeable Notes to pay premiums on the Capped Calls.

The Capped Calls are separate transactions entered into by us with the counterparties, and not part of the terms of the Exchangeable Notes and do not change the holders’ rights under the Exchanges Notes.

The capped call transactions do not meet the criteria for separate accounting as a derivative as they meet the criteria for equity classification, and the capped call transaction premiums are recorded as a reduction to Additional Paid-In Capital within Shareholders’ Equity, net of deferred income taxes.

Tendered Notes and Redemption of 2026 Notes

On May 20, 2024, the Company commenced a cash tender offer (the “Tender Offer”) by its wholly-owned subsidiary, SBI, of up to an aggregate principal amount of its outstanding 4.00 % Senior Notes due 2026 (the “2026 Notes”), the 5.00 % Senior Notes due 2029 (the “2029 Notes”) and the 5.50 % Senior Notes due 2030 (the “2030 Notes”), and a tender offer for the 3.875 % Notes Senior Notes due 2031 (the “2031 Notes”) (collectively, the “Tendered Notes”) that may be purchased for an combined aggregate purchase price of up to $ 925.0 million (including accrued and unpaid interest) with discretion to upsize the Tender Offer.

On June 3, 2024, the Company received the early tender results and amended the Tender Offer to increase the previously announced maximum tender offer from $ 925.0 million to $ 1,160.5 million (including accrued and unpaid interest).

On June 18, 2024, the Company completed the cash tender offer of the Tendered Notes, with cash paid for the 2026 Notes on June 17, 2024.

Additionally, on June 17, 2024, the Company notified the trustee of the 2026 Notes that it would redeem the remaining aggregate principal amount, which was subsequently paid on June 20, 2024, at a redemption price equal to 100.667 % of the principal amount, plus accrued and unpaid interest, resulting in the full redemption of the 2026 Notes.

The following summarizes the results of the cash tender of the Tendered Notes and full redemption of the 2026 Notes, excluding amounts paid for unpaid and accrued interest, including the write-off of unamortized debt issuance costs and the (gain) loss on early extinguishment realized during the three and nine month period ended June 30, 2024:

(in millions) Amounts Tendered Amounts Paid Premium (Discount) Realized Unamortized Debt Issuance Costs Loss (Gain) on Early Extinguishment

4.00 % Notes, due October 1, 2026

$ 462.0 $ 462.1 $ 0.1 $ 2.2 $ 2.3

5.00 % Notes, due October 1, 2029

284.2 284.2 — 2.9 2.9

5.50 % Notes, due July 15, 2030

142.5 142.5 — 2.0 2.0

3.875 % Notes, due March 15, 2031

285.7 277.7 ( 8.0 ) 3.0 ( 5.0 )

Total $ 1,174.4 $ 1,166.5 $ ( 7.9 ) $ 10.1 $ 2.2

In connection with the Tender Offer, the Company solicited consents (the “Consent Solicitation”) from the respective holders of the indentures governing the 2026 Notes, the 2029 Notes and the 2030 Notes (collectively, the “Consent Notes”) for certain proposed amendments with respect to each series of Consent Notes.

The Company did not solicit any consents from the holders of the 2031 Notes.

The proposed amendments required the requisite consents applicable to each series of Consent Notes and amended the indenture for each of the Consent Notes.

Following the receipt of the requisite consents with respect to each series of Consent Notes, the Company entered into (i) supplemental indenture, dated as of June 4, 2024 (the “2026 Supplemental Indenture”), by and among the Company, the guarantors party thereto (the “Guarantors”), U.S.

Bank Trust Company, National Association (as successor to U.S.

Bank National Association), as trustee (the “Trustee”), Elavon Financial Services DAC, UK Branch, as paying agent and Elavon Financial Services DAC, as registrar and transfer agent, relating to the 2026 Notes, (ii) supplemental indenture, dated as of June 4, 2024 (the “2029 Supplemental Indenture”), by and among the Company, the Guarantors and the Trustee, relating to the 2029 Notes and (iii) supplemental indenture, dated as of June 4, 2024 (the “2030 Supplemental Indenture” and, together with the 2026 Supplemental Indenture and 2029 Supplemental Indenture, the “Supplemental Indentures”), by and among the Company, the Guarantors and the Trustee, relating to the 2030 Notes, to effect the proposed amendments.

The Supplemental Indentures shorten the notice periods for the redemption of the Consent Notes and eliminate substantially all of the restrictive covenants and certain events of default under each indenture governing the Consent Notes, among other things.

As of December 29, 2024, there are no borrowings outstanding under the Company’s $ 500.0 million revolving credit facility (the “Revolver Facility”) under the Second Amended and Restated Credit Agreement, dated as of October 19, 2023, by and among the Company, SB/RH Holdings, LLC, Royal Bank of Canada, as the administrative agent, and the lenders party thereto, with a borrowing availability under the Revolver Facility of $ 490.8 million, net outstanding letters of credit of $ 9.2 million.

3.375 % Exchangeable Notes due June 1, 2029

Effective November 13, 2024, the Company increased its quarterly dividend rate to $ 0.47 per share.

As such, the exchange rate for the Company's 3.375 % Exchangeable Notes due June 1, 2029 was adjusted to 8.2105 shares of common stock per $1,000 principal amount of notes (which is equal to an initial conversion price of approximately $ 121.80 per share of the Company's common stock), subject to further adjustment as set forth in the indenture.

Concurrently, the strike price with the associated Capped Calls was updated to approximately $ 121.80 per share, subject to certain additional adjustments, corresponding to the change in exchange price of the Exchangeable Notes, and the cap price was updated to approximately $ 159.27 per share, subject to certain additional adjustments.

SPECTRUM BRANDS HOLDINGS, INC.

1 unchanged sentence

(in millions, unaudited)

NOTE 8 - DEBT (continued)

Additionally, Spectrum Brands Holdings, Inc.

has agreed to irrevocably and unconditionally guarantee the 2031 Notes pursuant to a guarantee agreement, dated as of June 20, 2024, in favor of the holders of the 2031 Notes, the Company and U.S.

Bank Trust Company, National Association (as successor to U.S.

Bank National Association), as trustee.

Debt Repurchase

During the nine month period ended June 30, 2024, the Company repurchased Senior Notes on the open market, at a discount, which are ultimately retired upon receipt.

The repurchase of the Company's debt obligations are treated as an extinguishment, with any realized discount recognized as a gain from debt repurchase on the Company's Condensed Consolidated Statements of Income, net any write-off of related deferred financing costs.

For the nine month period ended June 30, 2024, the Company repurchased $ 180.1 million of outstanding Senior Notes, consisting of $ 8.1 million of the 5.00 % Senior Notes due October 1, 2029, $ 132.8 million of the 5.50 % Senior Notes due July 15, 2030, and $ 39.2 million of the 3.875 % Senior Notes, due March 15, 2031.

As a result of repurchasing outstanding debt notes during the nine month period ended June 30, 2024, there was a gain of $ 4.7 million related to realized gain on the early extinguishment of the obligations recorded, net of the write-off from associated deferred issuance costs of $ 2.5 million.

NOTE 7 – DERIVATIVES

Derivative financial instruments are used by the Company principally in the management of its foreign currency exchange rates.

The Company does not hold or issue derivative financial instruments for trading purposes.

Derivative financial instruments are principally used in the management of foreign currency risk.

The Company does not hold or issue derivative financial instruments for speculative or trading purposes.

Cash Flow Hedges.

The Company periodically enters into forward foreign exchange contracts to hedge a portion of the risk from forecasted foreign currency denominated third party and intercompany sales or payments.

The Company periodically enters into forward foreign exchange contracts to hedge the cash flow risk from the forecasted purchase and sale of inventory denominated in foreign currencies, and designated as a cash flow hedge.

These obligations generally require the Company to exchange foreign currencies for Australian Dollars, Canadian Dollars, Euros, Japanese Yen, Mexican Pesos, Pound Sterling, or U.S.

These foreign exchange contracts are cash flow hedges of fluctuating foreign exchange related to inventory purchases or the sale of product.

Until the purchase or sale is recognized, the fair value of the related hedge is recorded in Accumulated Other Comprehensive Income ("AOCI") and as a derivative hedge asset or liability, as applicable.

At the time the sale or purchase is recognized, the fair value of the related hedge is reclassified as an adjustment to purchase price variance in Cost of Goods Sold or Net Sales on the Condensed Consolidated Statements of Income.

At June 30, 2024, the Company had a series of foreign exchange derivative contracts outstanding through March 2026.

The derivative net loss estimated to be reclassified from AOCI into earnings over the next 12 months is $ 1.4 million, net of tax.

At June 30, 2024 and September 30, 2023, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $ 339.5 million and $ 320.2 million, respectively.

The following table summarizes the impact of designated cash flow hedges and the pre-tax gain (loss) recognized in the Condensed Consolidated Statements of Income for the three and nine month periods ended June 30, 2024 and July 2, 2023, respectively:

Unrealized Gain (Loss) in OCI Before Reclassification Reclassified Gain (Loss) to Continuing Operations

For the three month periods ended (in millions)

June 30, 2024 July 2, 2023 Line Item June 30, 2024 July 2, 2023

Foreign exchange contracts $ 0.1 $ 0.2 Net sales $ 0.1 $ 0.1

Foreign exchange contracts 1.5 ( 7.7 ) Cost of goods sold ( 2.5 ) ( 3.7 )

Total $ 1.6 $ ( 7.5 ) $ ( 2.4 ) $ ( 3.6 )

Unrealized Gain (Loss) in OCI Before Reclassification Reclassified Gain (Loss) to Continuing Operations

For the nine month periods ended (in millions)

June 30, 2024 July 2, 2023 Line Item June 30, 2024 July 2, 2023

Foreign exchange contracts $ 0.2 $ 0.3 Net sales $ 0.2 $ 0.2

Foreign exchange contracts ( 7.9 ) ( 40.9 ) Cost of goods sold ( 12.5 ) ( 6.2 )

Total $ ( 7.7 ) $ ( 40.6 ) $ ( 12.3 ) $ ( 6.0 )

Derivative Contracts Not Designated as Hedges for Accounting Purposes

The Company periodically enters into foreign exchange forward contracts to economically hedge a portion of the risk from third party and intercompany payments resulting from existing obligations.

These obligations generally require the Company to exchange foreign currencies for, among others, Canadian Dollars, Colombian Peso, Euros, Czech Koruna, Japanese Yen, Mexican Peso, Pound Sterling, Singapore Dollar, Swiss Franc, Turkish Lira, or U.S.

These foreign exchange contracts are fair value hedges of a related liability or asset recorded in the accompanying Condensed Consolidated Statements of Financial Position.

The gain or loss on the derivative hedge contracts is recorded in earnings as an offset to the change in value of the related liability or asset at each period end.

At June 30, 2024, the Company had a series of forward exchange contracts outstanding through July 2024.

At June 30, 2024 and September 30, 2023, the Company had $ 289.6 million and $ 671.5 million, respectively, of notional value of such foreign exchange derivative contracts outstanding.

The following summarizes the gain (loss) realized from derivative instruments not designated as hedges for accounting purposes on the accompanying Condensed Consolidated Statements of Income for the three and nine month periods ended June 30, 2024 and July 2, 2023, pre-tax:

Three Month Periods Ended Nine Month Periods Ended

(in millions) Line Item June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Foreign exchange contracts Other non-operating expense, net $ ( 6.8 ) $ ( 7.8 ) $ ( 14.4 ) $ ( 30.2 )

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 9 – DERIVATIVES (continued)

Fair Value of Derivative Instruments

The fair value of the Company’s outstanding derivative contracts recorded in the Condensed Consolidated Statements of Financial Position is as follows:

(in millions) Line Item June 30, 2024 September 30, 2023

The fair value of the related hedge is recorded in Accumulated Other Comprehensive Income ("AOCI") and as a derivative asset or liability, as applicable, until the purchase or sale is recognized, or otherwise determined to be ineffective or discontinued, at which point the fair value of the related hedge is reclassified to earnings.

Derivative Instruments Not Designated as Hedge.

The Company periodically enters into forward contracts to economically hedge a portion of risk from intercompany balances denominated in foreign currencies.

These obligations generally require the Company to exchange foreign currencies for, among others, Canadian Dollars, Colombian Peso, Euros, Czech Koruna, Japanese Yen, Mexican Peso, Polish Zloty, Pound Sterling, Singapore Dollar, Swiss Franc, Turkish Lira, or U.S.

These foreign exchange contracts are fair value hedges of related intercompany balances with the gain or loss on the derivative instruments recorded in earnings offsetting the change in value of the related intercompany balance.

The following summarizes outstanding notional balances and maturities of derivative instruments as of December 29, 2024 and September 30, 2024.

December 29, 2024 September 30, 2024

(in millions) Notional Balance Maturities thru Notional Balance Maturities thru

Foreign exchange contracts - cash flow hedges $ 314.0 June 2026 $ 351.7 June 2026

Foreign exchange contracts - not designated as hedge $ 480.5 January 2025 $ 466.9 October 2024

The following summarizes the fair value and location of outstanding derivative instruments in the Condensed Consolidated Statements of Financial Position.

(in millions) Line Item December 29, 2024 September 30, 2024

Derivative Assets

Foreign exchange contracts – designated as hedge Other receivables $ 1.5 $ 1.4

Foreign exchange contracts – designated as hedge Deferred charges and other 0.2 0.1

Foreign exchange contracts – cash flow hedges Other receivables $ 4.3 $ 1.4

Foreign exchange contracts – cash flow hedges Deferred charges and other 0.8 0.1

Foreign exchange contracts – not designated as hedge Other receivables 0.4 0.3

1 unchanged sentence

Derivative Liabilities

Foreign exchange contracts – designated as hedge Accounts payable $ 3.3 $ 8.1

Foreign exchange contracts – designated as hedge Other long term liabilities 0.3 —

Foreign exchange contracts – cash flow hedges Accounts payable $ 0.7 $ 11.5

Foreign exchange contracts – cash flow hedges Other long term liabilities — 1.4

Foreign exchange contracts – not designated as hedge Accounts payable 2.8 2.4

Total Derivative Liabilities $ 3.5 $ 15.3

The Company is exposed to the risk of default by the counterparties with which it transacts and generally does not require collateral or other security to support financial instruments subject to credit risk.

The Company monitors counterparty credit risk on an individual basis by periodically assessing each counterparty’s credit rating exposure.

The maximum loss due to credit risk equals the fair value of the gross asset derivatives that are concentrated with certain domestic and foreign financial institution counterparties.

The Company considers these exposures when measuring its credit reserve on its derivative assets, which were not significant as of June 30, 2024.

The Company’s standard contracts do not contain credit risk related contingent features whereby the Company would be required to post additional cash collateral because of a credit event.

However, the Company is typically required to post collateral in the normal course of business to offset its liability positions.

As of June 30, 2024 and September 30, 2023, there was no cash collateral outstanding and no posted standby letters of credit related to such liability positions.

Net Investment Hedge

SBI had € 425.0 million aggregate principal amount of 4.00 % Notes, due October 1, 2026 (the "2026 Notes"), designated as a non-derivative economic hedge, or net investment hedge, of the translation of the Company’s net investments in Euro denominated subsidiaries at the time of issuance.

The hedge effectiveness is measured on the beginning balance of the net investment and re-designated every three months.

Any gains and losses attributable to the translation of the Euro denominated debt designated as net investment hedge are recognized as a component of foreign currency translation adjustment within AOCI, and gains and losses attributable to the translation of the undesignated portion are recognized as foreign currency translation gains or losses within Other Non-Operating Expense (Income).

Net unrealized gains or losses from the net investment hedge are reclassified from AOCI into earnings upon a liquidation event or deconsolidation of Euro denominated subsidiaries.

Effective June 20, 2024, the net investment hedge is no longer outstanding due to the full redemption of the 2026 Notes.

See Note 8 – Debt for additional detail.

The cumulative unrealized gain of $ 11.9 million related to the net investment hedge will remain in AOCI until a liquidation event or deconsolidation of the underlying Euro denominated subsidiaries.

The following summarizes the unrealized gain (loss) from the net investment hedge recognized in Other Comprehensive Income for the three and nine month periods ended June 30, 2024 and July 2, 2023, pre-tax:

Three Month Periods Ended Nine Month Periods Ended

Unrealized (Loss) Gain in OCI (in millions) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Net investment hedge $ ( 3.5 ) $ 1.8 $ ( 13.2 ) $ ( 44.6 )

The fair value for derivative instruments excludes collateral or standby letter of credit associated with derivative instruments, of which there were none as of December 29, 2024 and September 30, 2024.

The Company is not a party to derivative agreements that require collateral to be posted prior to settlement.

The following summarizes the pre-tax gain (loss) from derivative instruments and location in the Condensed Consolidated Statements of Income for the three month periods ended December 29, 2024 and December 31, 2023, respectively.

(in millions) Line Item December 29, 2024 December 31, 2023

Foreign exchange contracts - cash flow hedges Net sales $ — $ 0.1

Foreign exchange contracts - cash flow hedges Cost of goods sold ( 0.7 ) ( 5.2 )

Foreign exchange contracts - not designated as hedge Other non-operating expense, net ( 3.3 ) 13.1

There was no gain or loss realized from cash flow hedges due to the ineffectiveness or discontinuation of the cash flow hedge because it was not considered probable that the original forecasted transaction would not occur.

See Note 11 - Accumulated Other Comprehensive Income for unrealized gains and losses initially recognized as other comprehensive income and the accumulated unrealized gain (loss) associated with cash flow hedges recognized in AOCI.

As of December 29, 2024, the net gain estimated to be reclassified from AOCI into earnings associated with cash flow hedges over the next 12 months is $ 2.6 million, net of tax.

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has not changed the valuation techniques used in measuring the fair value of any financial assets and liabilities during the year.

The carrying value and estimated fair value of financial instruments as of June 30, 2024 and September 30, 2023 according to the fair value hierarchy are as follows:

June 30, 2024 September 30, 2023

(in millions) Level 1 Level 2 Level 3 Fair Value Carrying

Amount Level 1 Level 2 Level 3 Fair Value Carrying

The carrying value and estimated fair value of financial instruments as of December 29, 2024 and September 30, 2024 according to the fair value hierarchy are as follows:

December 29, 2024 September 30, 2024

(in millions) Level 1 Level 2 Level 3 Fair Value Carrying Amount

Level 1 Level 2 Level 3 Fair Value Carrying Amount

Derivative Assets $ — $ 5.5 $ — $ 5.5 $ 5.5 $ — $ 1.8 $ — $ 1.8 $ 1.8

7 unchanged sentences

See Note 5 - Goodwill and Intangible Assets for additional detail.

The carrying values of cash and cash equivalents, short term investments, receivables, accounts payable and short term debt approximate fair value based on the short-term nature of these assets and liabilities.

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

The carrying values of cash and cash equivalents, receivables, accounts payable and short term debt approximate fair value based on the short-term nature of these assets and liabilities.

NOTE 9 – SHAREHOLDERS' EQUITY

Share Repurchases

The following summarizes the activity of common stock repurchases for the three and nine month periods ended June 30, 2024 and July 2, 2023.

June 30, 2024 July 2, 2023

The following summarizes the activity of common stock repurchases for the three month periods ended December 29, 2024 and December 31, 2023.

December 29, 2024 December 31, 2023

Three Month Periods Ended

(in millions except per share data)

Repurchased Average

Per Share Amount

Open Market Purchases 1.1 $ 86.22 $ 92.2 — $ — $ —

Private Purchases 0.5 93.74 50.0 — — —

ASR — — — 5.3 74.86 400.0

Total Purchases 1.6 $ 88.72 $ 142.2 5.3 $ 74.86 $ 400.0

June 30, 2024 July 2, 2023

Nine Month Periods Ended (in millions except per share data)

Repurchased Average

Per Share Amount Number of

Repurchased Average

Per Share Amount

Number of Shares Repurchased

Average Price Per Share

Number of Shares Repurchased

Average Price Per Share

Open Market Purchases 0.8 $ 90.95 $ 72.9 3.3 $ 73.51 $ 243.0

Private Purchases 0.5 93.74 50.0 — — —

ASR — — — 1.3 65.84 83.2

Total Purchases 0.8 $ 90.95 $ 72.9 4.6 $ 71.39 $ 326.2

During the nine month period ended June 30, 2024, the Company 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.

On May 20, 2024 this plan was terminated with a total of 1.9 million shares repurchased for $ 156.0 million.

On May 20, 2024, the Company announced a new $ 500 million common stock repurchase program authorized by its Board of Directors, replacing the Company's previously approved share repurchase program of $ 1.0 billion.

As part of the approved stock repurchase program, the Company purchased $ 50.0 million of Common Stock concurrent with the pricing of the offering of the Exchangeable Notes in privately negotiated transactions effected through one of the initial purchasers and/or its affiliates, at market price.

Purchases under the program may be made in the open market or in privately negotiated transactions from time to time at management’s discretion.

The repurchase program may be suspended or discontinued at any time.

On June 20, 2023, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution to repurchase an aggregate of $ 500.0 million of the Company’s common stock, par value $ 0.01 per share.

The Company funded the share repurchases under the ASR Agreement with cash on-hand following the closing of the sale of the Company’s HHI segment.

Pursuant to the agreement, the Company paid $ 500.0 million to the financial institution at inception of the agreement and took delivery of 5.3 million shares, which represented 80 % of the total shares the company expected to receive based on the market price at the time of the initial delivery.

The transaction was accounted for as an equity transaction.

The fair value of the initial shares received of $ 400.0 million were recorded as a treasury stock transaction, with the remainder of $ 100.0 million recorded as a reduction to additional paid-in capital.

Upon initial receipt of the shares, there was an immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share.

On November 21, 2023, the Company closed and settled the ASR resulting in an additional delivery of 1.3 million shares during the nine month period ended June 30, 2024, with a fair value of $ 83.2 million.

The total number of shares repurchased under the ASR program was 6.6 million at an average cost per share of $ 75.67 , based on the volume-weighted average share price of the Company’s common stock during the calculation period of the ASR program, less the applicable contractual discount.

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

During the three month period ended December 29, 2024, the Company entered into a $ 150.0 million rule 10b5-1 repurchase plan to facilitate daily market share repurchases through December 16, 2025, until the cap is reached or until the plan is terminated.

As of December 29, 2024, there has been $ 23.4 million repurchased pursuant to the 10b5-1 repurchase plan, included in open market purchases above.

NOTE 10 – SHARE BASED COMPENSATION

The following is a summary of share based compensation expense included in Selling, General & Administrative on the Company's Condensed Consolidated Statements of Income for the three and nine month periods ended June 30, 2024 and July 2, 2023:

Three Month Periods Ended Nine Month Periods Ended

(in millions) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

The following is a summary of share based compensation expense included in Selling, General & Administrative on the Company's Condensed Consolidated Statements of Income for the three month periods ended December 29, 2024 and December 31, 2023:

Three Month Periods Ended

(in millions) December 29, 2024 December 31, 2023

Share based compensation expense $ 4.7 $ 3.9

The Company recognizes share based compensation expense from the issuance of Restricted Stock Units (“RSUs”), primarily under its Long-Term Incentive Plan ("LTIP").

RSUs granted under the LTIP include time-based grants and performance-based grants.

The Company regularly issues annual RSU grants under its LTIP during the first quarter of the fiscal year.

Compensation cost is based on the fair value of the awards, as determined by the market price of the Company’s shares of common stock on the designated grant date and recognized on a straight-line basis over the requisite service period of the awards.

Time-based RSU awards provide for either three year cliff vesting or graded vesting depending upon the vesting conditions and forfeitures provided by the grant.

Performance-based RSU awards are dependent upon achieving specified financial metrics (adjusted EBITDA, return on adjusted equity, and/or adjusted free cash flow) by the end of the three year vesting period.

The Company assesses the probability of achievement of the performance conditions and recognizes expense for the awards based on the probable achievement of such metrics.

Additionally, the Company regularly issues individual RSU awards under its equity plan to its Board members and individual employees for recognition, incentive, or retention purposes, when needed, which are primarily conditional upon time-based service conditions, valued based on the fair value of the awards as determined by the market price of the Company's share of common stock on the designated grant price date and recognized as a component of share-based compensation on a straight-line basis over the requisite service period of the award.

RSUs are subject to forfeiture if employment terminates prior to vesting with forfeitures recognized as they occur.

RSUs have dividend equivalents credited to the recipient and are paid only to the extent the RSU vests and the related stock is issued.

Shares issued upon exercise of RSUs are sourced from treasury shares when available.

The following is a summary of RSU grants issued during the nine month period ended June 30, 2024:

(in millions, except per share data) Units Weighted

Fair Value Fair

The following is a summary of RSU grants issued during the three month period ended December 29, 2024, which are consistent to the vesting conditions for time-based RSU grants and performance-based RSU grants previously disclosed, without substantial discrepancy:

(in millions, except per share data) Units Weighted Average Grant Fair Value

Fair Value at Grant Date

Time-based grants

8 unchanged sentences

NOTE 11 – ACCUMULATED OTHER COMPREHENSIVE INCOME

The change in the components of AOCI for the nine month period ended June 30, 2024, was as follows:

The change in the components of AOCI for the three month period ended December 29, 2024, was as follows:

(in millions) Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total

1 unchanged sentence

$ ( 164.1 ) $ ( 2.2 ) $ ( 37.7 ) $ ( 204.0 )

Other comprehensive income (loss) before reclassification 15.4 ( 10.6 ) ( 1.1 ) 3.7

Net reclassification for loss to income from continuing operations — 5.1 0.2 5.3

Other comprehensive income (loss) before tax 15.4 ( 5.5 ) ( 0.9 ) 9.0

Deferred tax effect 5.6 1.5 0.2 7.3

Other comprehensive income (loss), net of tax 21.0 ( 4.0 ) ( 0.7 ) 16.3

other comprehensive income from continuing operations attributable to non-controlling interest 0.1 — — 0.1

Other comprehensive income (loss) attributable to controlling interest 20.9 ( 4.0 ) ( 0.7 ) 16.2

Balance at December 31, 2023 ( 195.2 ) ( 2.6 ) ( 35.4 ) ( 233.2 )

Other comprehensive (loss) income before reclassification ( 65.1 ) 15.0 1.8 ( 48.3 )

5 unchanged sentences

Other comprehensive (loss) income attributable to controlling interest ( 62.5 ) 11.7 1.7 ( 49.1 )

Balance at March 31, 2024 ( 198.4 ) 2.0 ( 34.8 ) ( 231.2 )

Other comprehensive (loss) income before reclassification ( 11.2 ) 1.6 — ( 9.6 )

Net reclassification for loss to income from continuing operations — 2.4 0.2 2.6

Other comprehensive (loss) income before tax ( 11.2 ) 4.0 0.2 ( 7.0 )

Deferred tax effect 0.8 ( 1.4 ) ( 0.1 ) ( 0.7 )

Other comprehensive (loss) income, net of tax ( 10.4 ) 2.6 0.1 ( 7.7 )

other comprehensive loss from continuing operations attributable to non-controlling interest — — — —

Other comprehensive (loss) income attributable to controlling interest ( 10.4 ) 2.6 0.1 ( 7.7 )

Balance at June 30, 2024 $ ( 208.8 ) $ 4.6 $ ( 34.7 ) $ ( 238.9 )

The following table presents reclassifications of the gain (loss) on the Condensed Consolidated Statements of Income from AOCI for the periods indicated:

(in millions) Three Month Period Ended June 30, 2024 Nine Month Period Ended June 30, 2024

Derivative Instruments Defined Benefit Pension Total Derivative Instruments Defined Benefit Pension Total

Net Sales $ 0.1 $ — $ 0.1 $ 0.2 $ — $ 0.2

Balance at December 29, 2024 $ ( 226.6 ) $ 9.5 $ ( 36.0 ) $ ( 253.1 )

The following presents reclassifications of the gain (loss) on the Condensed Consolidated Statements of Income from AOCI for the three month period ended December 29, 2024:

(in millions) Derivative Instruments Defined Benefit Pension Total

Cost of goods sold $ ( 0.7 ) $ — $ ( 0.7 )

Other non-operating (income) expense, net — ( 0.2 ) ( 0.2 ) — ( 0.6 ) ( 0.6 )

SPECTRUM BRANDS HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 13 – ACCUMULATED OTHER COMPREHENSIVE INCOME (continued)

The change in the components of AOCI for the nine month period ended July 2, 2023, was as follows:

Other non-operating expense, net — ( 0.5 ) ( 0.5 )

The change in the components of AOCI for the three month period ended December 31, 2023, was as follows:

(in millions) Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total

2 unchanged sentences

Other comprehensive income (loss) before reclassification 15.4 ( 10.6 ) ( 1.1 ) 3.7

Net reclassification for (gain) loss to income from continuing operations — ( 2.5 ) 0.9 ( 1.6 )

Other comprehensive income (loss) before tax 26.6 ( 27.9 ) ( 1.4 ) ( 2.7 )

Deferred tax effect 8.8 7.2 1.2 17.2

Other comprehensive income (loss), net of tax 35.4 ( 20.7 ) ( 0.2 ) 14.5

other comprehensive income from continuing operations attributable to non-controlling interest 0.2 — — 0.2

other comprehensive income from discontinued operations attributable to non-controlling interest 0.1 — — 0.1

Other comprehensive income (loss) attributable to controlling interest 35.1 ( 20.7 ) ( 0.2 ) 14.2

Balance at January 1, 2023 ( 250.8 ) ( 3.9 ) ( 34.2 ) ( 288.9 )

Other comprehensive income (loss) before reclassification 14.6 ( 7.1 ) 0.1 7.6

Net reclassification for loss (gain) to income from continuing operations — 4.9 ( 0.7 ) 4.2

Net reclassification for gain to income from discontinued operations — ( 0.1 ) — ( 0.1 )

Other comprehensive income (loss) before tax 14.6 ( 2.3 ) ( 0.6 ) 11.7

Deferred tax effect 3.7 0.7 0.1 4.5

Other comprehensive income (loss), net of tax 18.3 ( 1.6 ) ( 0.5 ) 16.2

other comprehensive income from continuing operations attributable to non-controlling interest 0.1 — — 0.1

other comprehensive income from discontinued operations attributable to non-controlling interest 0.1 — — 0.1

Other comprehensive income (loss) attributable to controlling interest 18.1 ( 1.6 ) ( 0.5 ) 16.0

Balance at April 2, 2023 ( 232.7 ) ( 5.5 ) ( 34.7 ) ( 272.9 )

Other comprehensive income (loss) before reclassification 11.6 ( 9.0 ) ( 1.2 ) 1.4

Net reclassification for loss to income from continuing operations — 5.1 0.2 5.3

Net reclassification for loss (gain) to income from discontinued operations — 2.4 ( 0.1 ) 2.3

Other comprehensive income (loss) before tax 15.4 ( 5.5 ) ( 0.9 ) 9.0

1 unchanged sentence

Other comprehensive income (loss), net of tax 21.0 ( 4.0 ) ( 0.7 ) 16.3

Deconsolidation of discontinued operations 26.6 — ( 0.5 ) 26.1

Net change to determine comprehensive income for the period 37.8 ( 2.2 ) ( 0.8 ) 34.8

other comprehensive loss from continuing operations attributable to non-controlling interest — — — —

other comprehensive loss from discontinued operations attributable to non-controlling interest ( 0.2 ) — — ( 0.2 )

Deconsolidation of discontinued operations 0.7 — — $ 0.7

other comprehensive income from continuing operations attributable to non-controlling interest 0.1 — — 0.1

Other comprehensive income (loss) attributable to controlling interest 20.9 ( 4.0 ) ( 0.7 ) 16.2

Balance at July 2, 2023 $ ( 195.4 ) $ ( 7.7 ) $ ( 35.5 ) $ ( 238.6 )

The following table presents reclassifications of the gain (loss) on the Condensed Consolidated Statements of Income from AOCI for the periods indicated:

(in millions) Three Month Period Ended July 2, 2023 Nine Month Period Ended July 2, 2023

Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total

Balance at Balance at December 31, 2023 $ ( 195.2 ) $ ( 2.6 ) $ ( 35.4 ) $ ( 233.2 )

The following table presents reclassifications of the gain (loss) on the Condensed Consolidated Statements of Income from AOCI for the three month period ended December 31, 2023:

(in millions) Derivative Instruments Defined Benefit Pension Total

Net sales $ 0.1 $ — $ 0.1

Cost of goods sold ( 5.2 ) — ( 5.2 )

Other non-operating expense (income), net — — ( 1.0 ) ( 1.0 ) — — ( 1.2 ) ( 1.2 )

Income from discontinued operations, net of tax ( 26.6 ) ( 2.4 ) 0.6 ( 28.4 ) ( 26.6 ) ( 2.3 ) 0.6 ( 28.3 )

Other non-operating expense, net — ( 0.2 ) ( 0.2 )

SPECTRUM BRANDS HOLDINGS, INC.

2 unchanged sentences

NOTE 12 – INCOME TAXES

The effective tax rate for the three and nine month periods ended June 30, 2024 and July 2, 2023, was as follows:

Three Month Periods Ended Nine Month Periods Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

54.0 % ( 8.8 ) % 41.1 % 10.3 %

The estimated annual effective tax rate applied to the three and nine month periods ended June 30, 2024, differs from the US federal statutory rate of 21 % principally due to income earned outside the U.S.

The effective tax rate for the three month periods ended December 29, 2024 and December 31, 2023, was as follows:

Three Month Periods Ended

December 29, 2024 December 31, 2023

Effective tax rate 32.5 % 41.6 %

The estimated annual effective tax rate applied to the three month periods ended December 29, 2024, differs from the US federal statutory rate of 21% principally due to income earned outside the U.S.

that is subject to U.S.

tax, including the U.S.

tax on global intangible low taxed income (“GILTI”), state income taxes, and certain nondeductible expenses.

The Company is projecting a U.S.

net operating loss ("NOL") for Fiscal 2024, which does not allow it to take advantage of the foreign-derived intangible income deduction or foreign tax credits on its GILTI income.

The Company’s federal effective tax rate on GILTI was therefore 21 %.

During the three and nine month periods ended June 30, 2024, the Company recorded a discrete $ 4.1 million tax expense related to U.S.

return to provision differences, primarily from changes in estimates of the utilization of foreign tax credits subject to a valuation allowance.

tax on global intangible low taxed income (“GILTI”), net of applicable deductions, state income taxes, and certain nondeductible expenses.

The Organization for Economic Co-operations and Development has introduced a framework to implement a global minimum corporate income tax of 15% referred to as "Pillar Two." Certain countries have adopted legislation to implement Pillar Two, and other countries are in the process of introducing legislation to implement Pillar Two.

Many aspects of Pillar Two are effective for tax years beginning after January 1, 2024 with certain remaining aspects to be effective for tax years beginning January 1, 2025 or later.

Pillar Two legislation currently in effect for the Company's Fiscal 2025 has been incorporated into the projected annual effective tax rate, and is not anticipated to have a significant impact.

We continue to assess the impact of Pillar Two and monitor development in legislation, regulation, and interpretive guidance.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

We have not conducted invasive testing at all sites and locations and have identified an environmental remediation liability to the extent such remediation requirements have been identified and are considered estimable.

As of June 30, 2024, there was an environmental remediation liability of $ 4.6 million, with $ 0.9 million included in Other Current Liabilities and $ 3.7 million included in Other Long-Term Liabilities on the Condensed Consolidated Statements of Financial Position.

As of September 30, 2023, there was an environmental remediation liability of $ 5.4 million, with $ 1.5 million included in Other Current Liabilities and $ 3.9 million included in Other Long-Term Liabilities on the Condensed Consolidated Statements of Financial Position.

The Company believes that any additional liability in excess of the amounts provided that may result from resolution of these matters will not have a material adverse effect on the consolidated financial condition, results of operations, or cash flows of the Company.

The following is a summary of the environment remediation liability as of December 29, 2024 and September 30, 2024:

(in millions)

December 29, 2024 September 30, 2024

Environmental remediation liability

Other current liabilities

Other long-term liabilities

Product Liability.

The Company may be named as a defendant in lawsuits involving product liability claims.

The Company has recorded and maintains an estimated liability in the amount of management’s estimate for aggregate exposure for such liabilities based upon probable loss from loss reports, individual cases, and losses incurred but not reported.

As of June 30, 2024 and September 30, 2023, the Company recognized $ 2.3 million and $ 3.0 million, respectively, in product liability, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

Product Warranty .

The Company recognizes an estimated liability for standard warranties on certain products when we recognize revenue on the sale of the warranted products.

Estimated warranty costs incorporate replacement parts, products and delivery, and are recorded as a cost of goods sold at the time of product shipment based on historical and projected warranty claim rates, claims experience and any additional anticipated future costs on previously sold products.

The Company recognized $ 0.2 million and $ 0.3 million of warranty accruals as of June 30, 2024 and September 30, 2023, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

The Company may be named as a defendant in lawsuits involving product liability claims and maintains an estimated liability in the amount of management’s estimate for aggregate exposure for such liabilities based upon probable loss from loss reports, individual cases, and losses incurred but not reported.

As of December 29, 2024 and September 30, 2024, the Company recognized $ 1.8 million and $ 2.2 million, respectively, in product liability, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

Product Safety Recalls.

During the years ended September 30, 2022 and 2023, the Company and its HPC segment initiated voluntary product safety recalls in collaboration with the U.S.

Consumer Product Safety Commission (" CPSC") for specific products, suspending sales of the affected products and issuing a stop sale with its customers.

The Company has assessed the incremental costs attributable to the recall, including the anticipated returns of retail inventory from customers, write-off of affected inventory, and other costs to facilitate the recall such as notification, shipping and handling, consumer refunds, and rework and destruction of affected products, as needed, and evaluated the probability of redemption.

Certain products were remediated through the issuance of replacement parts and did not require a full recall of the affected product, with costs included to facilitate the remediation, rework and related shipping and handling.

During the nine month period ended June 30, 2024, the Company was required by the CPSC to reissue a recall that was previously remediated through the issuance of a replacement part in accordance with previously agreed-up remediation plans with the CPSC, expanding the requirements to issue a complete recall of the affected product.

As a result, the reissued recall resulted in the recognition of incremental costs and reserves to address inventory returns from customers, write-off of the affected inventory, consumer refunds and other costs to facilitate the reissued recall.

As a result, the Company recognized $ 5.6 million and $ 6.0 million as of June 30, 2024 and September 30, 2023, respectively, in Other Current Liabilities on the Condensed Consolidated Statement of Financial Position associated with the estimated costs for the recalls, including the incremental estimated product returns from customers associated with the recall.

Additionally, for certain products affected by the recalls, the Company has indemnification provisions that are contractually provided by third parties for the affected products and as a result the Company has also recognized $ 6.7 million and $ 7.1 million as of June 30, 2024 and September 30, 2023, respectively, in Other Receivables on the Condensed Consolidated Statement of Financial Position related to recovery from such indemnification provisions.

Representation and Warranty Insurance Proceeds.

On February 18, 2022, the Company acquired all of the membership interests in HPC Brands, LLC, which consist of the home appliances and cookware business of Tristar Products, Inc.

(the "Tristar Business") pursuant to a Membership Interest Purchase agreement dated February 3, 2022 (the "Acquisition Agreement").

During the year ended September 30, 2023, the Company submitted a claim under its representation and warranty insurance policies, seeking coverage for losses resulting from breaches of certain representations and warranties in the Acquisition Agreement.

During the nine month period ended June 30, 2024, the Company recognized a gain of $ 65.0 million on the Condensed Consolidated Statement of Income attributable to insurance proceeds received from its representation and warranty insurance policies.

The Company and its HPC segment had initiated voluntary product safety recalls in collaboration with the U.S.

Consumer Product Safety Commission (" CPSC") for specific products and has assessed the incremental costs attributable to the recall, including the anticipated returns of retail inventory from customers, write-off of affected inventory, and other costs to facilitate the recall such as notification, shipping and handling, consumer refunds, and rework and destruction of affected products, as needed, and evaluated the probability of redemption.

As of December 29, 2024 and September 30, 2024 , the Company recognized $ 5.9 million and $ 6.1 million , respectively, included in Other Current Liabilities on the Condensed Consolidated Statement of Financial Position associated with the estimated costs for the recalls, including the incremental product returns associated with the recall.

Additionally, for certain products affected by the recalls, the Company has indemnification provisions that are contractually provided by third parties for the affected products and recognized $ 8.1 million as of December 29, 2024 and September 30, 2024, in Other Receivables on the Condensed Consolidated Statement of Financial Position related to recovery from such indemnification provisions.

Tristar Business Acquisition Litigation .

Following the purchase of the Tristar Business in February 2022, the Company and its HPC segment were detrimentally impacted by aspects of the acquired business’ operations and products, which negatively impacted subsequent operating performance and partner relationships of the acquired brands and segment.

Since the acquisition, the acquired business realized, among other things, significant distribution challenges, increased levels of retail inventory, reduced sales, increased promotional spending and deductions, higher level of product returns, and overall increased amount of costs.

Additionally, the segment had realized losses attributable to recalls for products associated with the acquired brands, increased risks over the realizability of receivables and inventory, and recognized an impairment on assets including the acquired goodwill and the PowerXL® tradename intangible assets and disposed of certain inventory and products associated with the acquired brands.

The Company has been actively engaged in various litigation matters associated with the Tristar Business acquisition and continues to incur costs to facilitate such litigation matters.

As part of these various litigation matters, the HPC segment and the Company are seeking recovery for losses and other damage incurred in connection with the product recalls and separately for fraud committed by sellers of the Tristar Business and other persons in connection with the sale of the Tristar Business to the Company, and in each case other damages and losses incurred by the HPC segment, the Company and the acquired business.

While the Company continues to pursue such actions, there can be no guarantees and assurances that recoveries associated with the litigation matters can be realized and recovered.

As of December 29, 2024, the Company believes it has assessed appropriate risks and recognized applicable losses and reserves reflecting the net assets of the Company and its HPC segment.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 14 – SEGMENT INFORMATION

Net sales relating to the segments for the three and nine month periods ended June 30, 2024 and July 2, 2023, are as follows:

Three Month Periods Ended Nine Month Periods Ended

(in millions) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

The Company identifies its segments based upon the internal organization that is used by management for making operating decisions, allocating capital and resources amongst the operations, and assessing performance as the source of its reportable segments.

The Company manages its continuing operations in three vertically integrated, product-focused reporting segments:

(i) GPC, which consists of the Company’s global pet care business;

(ii) H&G, which consists of the Company’s home and garden, insect control and cleaning products business and (iii) HPC, which consists of the Company’s global small kitchen and personal care appliances businesses.

Global strategic initiatives and financial objectives for each reportable segment are determined at the corporate level.

Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president responsible for the sales and marketing initiatives and financial results for product lines within the segment.

Net sales relating to the segments for the three month periods ended December 29, 2024 and December 31, 2023, are as follows:

(in millions) December 29, 2024 December 31, 2023

GPC $ 260.0 $ 276.9

211.0 186.6 443.7 411.3

HPC 348.1 343.3

Net sales $ 700.2 $ 692.2

The Chief Operating Decision Maker of the Company uses Adjusted EBITDA as the primary operating metric in evaluating the business and making operating decisions.

The Chief Operating Decision Maker of the Company uses Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) as the primary operating metric in evaluating the business and making operating decisions.

EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income.

Adjusted EBITDA further excludes

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

See Note 12 – Share Based Compensation for further details;

• 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 are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments.

Refer to the Strategic transactions, restructuring and optimization initiatives discussion within the Overview section, included elsewhere in this Quarterly Report, for further discussion;

• 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 nine month periods ended June 30, 2024 and July 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.

During the three month period ended June 30, 2024, the Company recognized impairment charges on a right of use operating lease asset associated with a HPC facility that was exited prior to the end of its term.

See Note 6 - Property, Plant and Equipment, for further discussion.

During the nine month period ended June 30, 2024, the Company recognized impairments of its Rejuvenate® and a non-core HPC tradename indefinite lived intangible assets, along with impairment charges on right of use operating lease assets associated with HPC distribution facilities that were exited prior to end of its term.

See Note 7 - Goodwill and Intangibles and Note 6 - Property Plant and Equipment, for further discussion.

During the three and nine periods ended July 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 realized during the nine month period ended June 30, 2024 .

Refer to Note 15 - Commitment and Contingencies 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.

During the three and nine month periods ended June 30, 2024 and July 2, 2023, 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 for further details;

• Gain or loss from the early extinguishment of debt realized through the repurchase or early redemption of outstanding debt obligations, net write-off of unamortized deferred debt issuance costs, during the three and nine month periods ended June 30, 2024 and July 2, 2023.

See Note 8 - Debt 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.

See Note 15 - Commitments and Contingencies 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 for further details;

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

Adjusted EBITDA also excludes certain non-cash adjustments including share based compensation (see Note 10 - Share Based Compensation for further detail);

impairment charges on property, plant and equipment, operating and finance lease assets, and goodwill and other intangible assets (See Note 4 - Property, Plant and Equipment and Note 5 - Goodwill and Intangible Assets and for further detail, as applicable);

gain or loss from the early extinguishment of debt through the repurchase or early redemption of outstanding debt (See Note 6 - Debt for further detail, as applicable);

and purchase accounting adjustments recognized in income subsequent to an acquisition attributable to the step in value on assets acquired, including, but not limited to, inventory or operating lease assets.

Additionally, the Company will further recognize adjustments from Adjusted EBITDA for other costs, gains and losses that are considered significant, non-recurring, or otherwise not supporting the continuing operations and revenue generating activity of the segment or Company, including but not limited to, exit and disposal activities, or incremental costs associated with strategic transactions, restructuring and optimization initiatives such as the acquisition or divestiture of a business, related integration or separation costs, or the development and implementation of strategies to optimize or restructure the Company and its operations.

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

Costs attributable to such shared service operations are allocated to the segments based upon various metrics which are considered representative to the use and support provided by such enabling functions to each of the segments.

The Company also incurs costs attributable to corporate functions such as tax, treasury, internal audit, corporate finance, legal and corporate executive and board related governance costs which are considered corporate costs of the Company and not allocated to the segments.

Interest costs attributable to external borrowings, including finance leases, are not recognized or allocated to segments.

Interest income is generally not recognized or allocated to segments.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 14 - SEGMENT INFORMATION (continued)

• For the three and nine month periods ended July 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, including the receipt of related insurance proceeds.

Segment Adjusted EBITDA for the reportable segments for the three and nine month periods ended June 30, 2024 and July 2, 2023, are as follows:

Three Month Periods Ended Nine Month Periods Ended

Segment Adjusted EBITDA for the reportable segments for the three month periods ended December 29, 2024 and December 31, 2023, are as follows:

(in millions)

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

December 29, 2024 December 31, 2023

GPC $ 51.5 $ 52.7

4 unchanged sentences

Interest expense 6.2 19.2

Interest income ( 2.6 ) ( 23.4 )

Depreciation 14.0 14.4

1 unchanged sentence

Share based compensation 4.7 3.9

HHI divestiture and separation costs 0.9 4.0 3.0 6.9

Non-cash impairment charges — 4.0

Non-cash purchase accounting adjustments — 0.5

Gain from early extinguishment of debt — ( 4.7 )

Exit and disposal costs 0.5 0.5

HHI separation costs 1

HPC separation initiatives 1

Tristar integration — 1.0 — 10.7

Fiscal 2023 and 2022 restructuring 0.1 0.9 0.9 6.0

Global ERP transformation 1

Russia closing initiative ( 0.1 ) 0.2 — 2.9

Other project costs 0.3 1.9 0.5 13.7

Non-cash purchase accounting adjustments 0.2 0.5 1.1 1.4

Impairment of equipment and operating lease assets 5.1 3.6 5.6 8.1

Impairment of goodwill — 111.1 — 111.1

Impairment of intangible assets — 53.7 43.0 120.7

Representation and warranty insurance proceeds — — ( 65.0 ) —

Legal and environmental 0.8 1.5 2.2 1.5

Loss (gain) from early extinguishment of debt 2.2 8.6 ( 2.6 ) 8.6

HPC product recall 2

Unallocated shared costs — 5.3 — 18.1

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

Early settlement of foreign currency cash flow hedges — 0.7 — 4.6

Other ( 0.4 ) — 0.3 5.0

Income (loss) from continuing operations before income taxes $ 41.5 $ ( 158.3 ) $ 146.7 $ ( 320.2 )

Litigation costs 3

Income from continuing operations before income taxes $ 36.4 $ 29.9

________________________________________

1 Incremental costs associated with strategic transactions, restructuring and optimization initiatives, including, but not limited to, the acquisition or divestiture of a business, related integration or separation costs, or the development and implementation of strategies to optimize or restructure operations

2 Incremental net costs from product recalls in the HPC segment.

See Note 13 - Commitments and Contingencies for further detail.

3 Litigation costs primarily associated with the Tristar Business acquisition.

See Note 13 - Commitments and Contingencies for further detail.

4 Other is attributable to other strategic transaction, restructuring and optimization initiatives, and key executive severance and other one-time compensatory costs during the prior year.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 15 – EARNINGS PER SHARE

Diluted earnings per share is calculated using its weighted-average outstanding common shares including the dilutive effect of share-based awards, as determined under the treasury stock method, and the Exchangeable Notes, as determined under the net share settlement method.

Basic earnings per share is computed by dividing net income attributable to controlling interest by the weighted average number of common shares outstanding for the period.

Diluted earnings per share is calculated using its weighted-average outstanding common shares including the dilutive effect of share-based awards, based upon the treasury stock method, and the Exchangeable Notes, as determined under the net share settlement method.

Performance based restricted stock units are excluded if the performance targets upon which the issuance of the shares is contingent have not been achieved and the respective performance period has not been completed as of the end of the current period.

From the time of the issuance of the Exchangeable Notes, the average market price of the Company’s common shares has been less than the initial conversion price, and consequently no shares have been included in diluted earnings per share for the conversion value of the Exchangeable Notes.

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the three and nine month periods ended June 30, 2024 and July 2, 2023, are as follows:

Three Month Periods Ended Nine Month Periods Ended

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the three month periods ended December 29, 2024 and December 31, 2023, are as follows:

(in millions, except per share amounts)

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Net income (loss) from continuing operations attributable to controlling interest $ 19.2 $ ( 172.4 ) $ 86.6 $ ( 287.7 )

December 29, 2024 December 31, 2023

Net income from continuing operations attributable to controlling interest $ 24.3 $ 17.4

(Loss) income from discontinued operations attributable to controlling interest, net of tax ( 0.8 ) 11.7

10 unchanged sentences

Diluted earnings per share $ 0.84 $ 0.85

Weighted average number of anti-dilutive shares excluded from denominator — 0.2 — 0.1

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 1. Financial Statements