What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2025-02-06 · 176 added, 83 removed, 231 unchanged (53% of the section changed)

18 unchanged sentences

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

The following is a reconciliation of reported net sales to organic net sales for the three month period ended December 29, 2024 compared to net sales for the three month period ended December 31, 2023:

The following is a reconciliation of reported net sales to organic net sales for the three and six month period ended March 30, 2025 compared to net sales for the three and six month period ended March 31, 2024:

Three Month Periods Ended

(in millions, except %) December 29, 2024

(in millions, except %) March 30, 2025

Effect of Changes in Currency

Organic Net Sales

December 31, 2023

March 31, 2024

$ 269.2 $ 2.4 $ 271.6 $ 289.9 $ (18.3) (6.3) %

2 unchanged sentences

$ 675.7 $ 10.1 $ 685.8 $ 718.5 (32.7) (4.6) %

Six Month Periods Ended

(in millions, except %)

March 30, 2025

Effect of Changes in Currency

Organic Net Sales

March 31, 2024

$ 529.2 $ 1.6 $ 530.8 $ 566.8 $ (36.0) (6.4) %

244.4 — 244.4 232.7 11.7 5.0 %

602.3 13.6 615.9 611.2 4.7 0.8 %

$ 1,375.9 $ 15.2 $ 1,391.1 $ 1,410.7 (19.6) (1.4) %

Adjusted EBITDA and Adjusted EBITDA Margin.

11 unchanged sentences

Adjusted EBITDA margin is adjusted EBITDA as a percentage of reported net sales.

The following is a reconciliation of Net Income From Continuing Operations to Adjusted EBITDA and Adjusted EBITDA margin for the three month periods ended December 29, 2024 and December 31, 2023.

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

The following is a reconciliation of Net Income From Continuing Operations to Adjusted EBITDA and Adjusted EBITDA margin for the three and six month periods ended March 30, 2025 and March 31, 2024.

Three Month Periods Ended Six Month Periods Ended

(in millions, except %) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Net income from continuing operations $ 1.8 $ 49.9 $ 26.4 $ 67.4

9 unchanged sentences

HHI separation costs 1

0.3 0.8 1.1 2.1

HPC separation initiatives 1

(0.3) 2.8 1.0 3.1

Global ERP transformation 1

2.3 3.9 4.8 6.9

HPC product recall 2

Representation and warranty insurance proceeds 3

— (65.0) — (65.0)

Litigation costs 4

0.8 0.2 1.6 1.5

0.4 — 0.5 0.5

Adjusted EBITDA $ 71.3 $ 112.3 $ 149.1 $ 196.6

7 unchanged sentences

See Note 14 - Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements for further detail.

3 Litigation costs primarily associated with the Tristar Business acquisition.

3 Gain from the receipt of insurance proceeds on representation and warranty policies during the prior year associated with the Tristar Business acquisition.

See Note 14 - Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements 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.

4 Litigation costs associated with the Tristar Business acquisition.

See Note 14 - Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements for further detail.

5 Other is attributable to other project costs associated with distribution center transitions and key executive severance and one-time compensatory costs.

For additional discussion and overview of the business, please refer to Item 1.

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Recent Developments

Tariffs and Global Macro-Economic Environment

The recent changes to U.S.

trade policy with the introduction of new U.S.

tariffs on imported goods, especially on Chinese imports, are expected to have a significant impact to our operations, increasing costs for sourced products, materials and components, and thus raising cost of goods sold and pressuring profit margins.

To mitigate this, the Company is adjusting prices to pass on some costs to customers, and is actively managing its supply chain and engaging suppliers to support cost sharing or expand supply chain diversification, which can further impact our ability to supply customers timely during periods of such transitions.

With the incremental tariffs on Chinese imports announced early April 2025, we have temporarily paused virtually all finished goods imports out of China,

The changing tariff policies impact all segments to varying degrees, most significantly with the HPC segment as most all products supporting the U.S.

business are imported from southeast Asia, with the majority coming from China.

The HPC business is actively pursuing sourcing alternatives and moving production out of China to diversify its supply chain and more effectively manage risk.

Over 60% of net sales in the HPC segment are driven through international markets and are not directly impacted by U.S.

With the temporary pause of Chinese imports, the U.S.

business in the HPC segment will be predominantly limited to its current and in-transit inventory in the near term, which will substantially diminish its ability to supply and our ability to meet customer demand until further supply chain alternatives are realized or there are reductions to the existing tariff structure.

The GPC business has certain aquatic equipment and chews & treats products that are sourced out of China, but have a higher degree of diversity within their product sourcing with major suppliers outside of China and will allow us to move production more swiftly to alternative supply for the majority of our GPC Chinese sourced products.

GPC finished goods imports from China have been temporarily paused and expect the impact from tariffs on sourced products elsewhere other than China will be mitigated primarily through pricing adjustments.

GPC also manufactures aquatics nutrition products at its facility in EMEA and imports such products into the U.S.

which are also subject to the enacted tariffs which the Company anticipates to mitigate the impact through pricing adjustments and cost management.

The H&G segment is predominantly manufactured and sold within the U.S.

but will also be impacted, to a lesser degree, with certain affected material costs and a small portfolio of products, such as baits, traps and mops, that are internationally sourced and being evaluated for alternative sourcing strategies.

Due to the limited impact on the H&G segment and seasonal supply for its products, the impact from tariffs will not substantially impact near term operating results, with anticipated impacts mitigated through pricing adjustments and vendor cost management.

The Company has intensified its focus on operational efficiencies by optimizing production processes, reducing waste, and leveraging technology to enhance productivity, aiming to offset cost increases and protect margins.

With the most recent implemented tariff changes, there is an expected impact on operating results and we are closely monitoring impacts to our projections and forecasts.

The Company has managed cash flow and secured its balance sheet to support the ongoing business through the evolving changes in U.S.

trade policy and potential impacts to the global-macro economic environment.

The Company is focused on supply chain diversification, operational efficiency, and strategic investments for sustaining growth and profitability amid ongoing trade uncertainties.

Strategic transactions, restructuring and optimization initiatives

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Moreover, the comparability of financial information may be impacted by incremental amounts attributable to such strategic transactions, restructuring and optimization initiatives.

The following is a summary of costs attributable to strategic transactions and business development costs that are considered as potentially having a significant impact on the comparability of the financial results on the consolidated financial statements and segment financial information, for the respective projects during the three month periods ended December 29, 2024 and December 31, 2023:

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

The following is a summary of costs attributable to strategic transactions and business development costs that are considered as potentially having a significant impact on the comparability of the financial results on the consolidated financial statements and segment financial information, for the respective projects during the three and six month periods ended March 30, 2025 and March 31, 2024:

Three month periods ended Six Month Periods Ended

(in millions) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

HHI separation costs 1

$ 0.3 $ 0.8 $ 1.1 $ 2.1

HPC separation initiatives 2

(0.3) 2.8 1.0 3.1

Global ERP transformation 3

2.3 3.9 4.8 6.9

Other project costs 4

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________________________________________

1 Costs attributable to the HHI divestiture effective June 2023 consisting of subsequent costs to facilitate separation and transition of systems and processes subject to transition services agreements (“TSAs”).

Costs are expected to be incurred through the transition period of up to 24 months following the close of the transaction as the Company exits TSAs.

1 Costs attributable to the HHI divestiture consisting of subsequent costs to facilitate separation and transition of systems and processes subject to transition services agreements (“TSAs”).

Costs are expected to be incurred through the transition period of up to 24 months following the close of the transaction in June 2023 as the Company exits TSAs.

2 Costs attributable to efforts to facilitate a strategic separation of the HPC segment either through a spin, merger or sale, consisting of legal and professional fees to facilitate transaction opportunities and diligence, consult on tax and compliance implications, legal entity restructurings, system and process segregation, carve-out financials and the confidential filing of a Form 10 registration statement in July 2024.

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3 Costs attributable to a multi-year transformation project to upgrade and implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis, including project management and professional services for planning, design, and business process review that do not qualify as software configuration and implementation costs recognized as capital expenditures or deferred costs under applicable accounting principles.

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

4 Other costs are attributable to distribution center transitions.

Costs are anticipated to be incurred through various deployments through calendar year 2025.

4 Other project costs are attributable to distribution center transitions.

Exit and Disposal Activity

The Company periodically recognizes exit and disposal costs primarily consisting of severance and contract termination costs that may be attributable to a reorganization or restructuring of the Company, cost savings initiatives, or in consideration of a recent strategic transaction.

Such actions result in the recognition of costs to the Company that are considered incremental and not reflective of the continuing operating costs of the business and may impact the comparability of the consolidated business and its segments.

During the three months ended December 29, 2024 and December 31, 2023, exit and disposal costs were $0.5 million, primarily consisting of accrued termination costs and recognized within Selling, General & Administrative Expense within the Condensed Consolidated Statements of Income .

See Note 2 - Exit and Disposal Activities in the Notes to the Condensed Consolidated Financial Statements for further discussion.

Refinancing Activity

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• Concurrent with the issuance of the Exchangeable Notes, the Company completed a tender offer on the aggregate outstanding principal balance of the 4.00% Senior Notes due 2026 (the “2026 Notes”), the 5.00% Senior Notes due 2029, the 5.50% Senior Notes due 2030, and the 3.875% Senior Notes due 2031 (the “2031 Notes”) (collectively, the “Tendered Notes”) and redeemed the remaining outstanding principal balance of the 2026 Notes, resulting in the reduction of the principal debt balance of $1,174.4 million and recognition of a loss on early extinguishment of $2.2 million during the third quarter of the prior year.

• During the year ended September 30, 2024, the Company repurchased outstanding bonds in the open market at a discount resulting in the recognition of a gain on extinguishment of $4.7 million in the prior period ended December 31, 2023.

Consolidated Results of Operations

The following is summarized consolidated results of operations for the three month periods ended December 29, 2024 and December 31, 2023.

The following is summarized consolidated results of operations for the three and six month periods ended March 30, 2025 and March 31, 2024.

(in millions, except %)

December 29, 2024 December 31, 2023 Variance

Three Month Periods Ended Variance

Six Month Periods Ended Variance

March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Net sales $ 675.7 $ 718.5 $ (42.8) (6.0) % $ 1,375.9 $ 1,410.7 $ (34.8) (2.5) %

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Selling, general & administrative 218.2 223.5 (5.3) (2.4) % 431.3 439.4 (8.1) (1.8) %

Impairment of intangible assets 15.7 39.0 (23.3) (59.7) % 15.7 43.0 (27.3) (63.5) %

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

Interest expense 7.5 16.9 (9.4) (55.6) % 13.7 36.1 (22.4) (62.0) %

Interest income (2.6) (23.4) 20.8 n/m

Gain from early extinguishment of debt — (4.7) 4.7 n/m

Interest income (0.4) (17.5) 17.1 n/m (3.0) (40.9) 37.9 n/m

Gain from early extinguishment of debt — — — n/m — (4.7) 4.7 n/m

Other non-operating expense, net 1.0 1.1 (0.1) (9.1) % 5.7 5.2 (0.1) (9.1) %

1 unchanged sentence

Net income from continuing operations 1.8 49.9 (48.1) (96.4) % 26.4 67.4 (41.0) (60.8) %

(Loss) income from discontinued operations, net of tax (0.8) 11.7 (12.5) n/m

(Loss) income from discontinued operations, net of tax (0.6) 11.0 (11.6) n/m (1.4) 22.7 (24.1) n/m

Net income 1.2 60.9 (59.7) (98.0) % 25.0 90.1 (65.1) (72.3) %

n/m = not meaningful

The following is a summary of net sales by segment for the three month periods ended December 29, 2024 and December 31, 2023, and the principal components of changes in net sales between the respective periods.

(in millions, except %) December 29, 2024 December 31, 2023 Variance

The following is a summary of net sales by segment for the three and six month periods ended March 30, 2025 and March 31, 2024, and the principal components of changes in net sales between the respective periods.

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

Six Month Periods Ended Variance

March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

$ 269.2 $ 289.9 $ (20.7) (7.1) % $ 529.2 $ 566.8 $ (37.6) (6.6) %

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Organic $ (18.3) (6.3) % $ (8.4) (5.2) % $ (6.0) (2.2) % $ (32.7) (4.6) %

Refer to the S egment Financial Data section below for further discussion on net sales results.

Six month periods ended (in millions, except %) GPC H&G HPC Total

Amount Percent Amount Percent Amount Percent Amount Percent

Volume $ (32.3) (5.7) % $ 7.5 3.2 % $ 4.5 0.7 % $ (20.3) (1.4) %

Price (3.7) (0.7) % 4.2 1.8 % 0.2 — % 0.7 — %

Foreign Currency (1.6) (0.3) % — — % (13.6) (2.2) % (15.2) (1.1) %

Total $ (37.6) (6.6) % $ 11.7 5.0 % $ (8.9) (1.5) % $ (34.8) (2.5) %

Organic $ (36.0) (6.4) % $ 11.7 5.0 % $ 4.7 0.8 % $ (19.6) (1.4) %

Refer to the Segment Financial Data section below for further discussion on net sales results.

Gross Profit.

The following is a summary of the gross profit and gross profit margin for the three month periods ended December 29, 2024 and December 31, 2023, respectively, and the principal factors contributing to the change between the respective periods.

(in millions, except %) December 29, 2024 December 31, 2023 Variance

The following is a summary of the gross profit and gross profit margin for the three and six month periods ended March 30, 2025 and March 31, 2024, respectively, and the principal factors contributing to the change between the respective periods.

Three Month Periods Ended Six Month Periods Ended

(in millions, except %) March 30, 2025 March 31, 2024 Variance March 30, 2025 March 31, 2024 Variance

Gross profit $ 253.4 $ 273.4 $ (20.0) (7.3) % $ 511.2 $ 518.4 $ (7.2) (1.4) %

Gross profit margin 36.8 % 35.4 % 140 bps

(in millions, except margin) Gross Profit Margin

Price $ 3.9 40 bps

Mix 1.8 20 bps

Volume 3.0 30 bps

Cost changes 0.7 10 bps

Product recalls (0.8) (10) bps

Foreign exchange rates 4.3 50 bps

Total $ 12.9 140 bps

Gross profit and margin increased due to the increase in sales volume, cost improvements and favorable transaction foreign currency partially offset by ocean freight inflation and higher tariffs due to the expiration of exemptions for certain product lines.

Gross profit margin 37.5 % 38.1 % (60) bps 37.2 % 36.7 % 50 bps

Three Month Period Ended Six Month Periods Ended

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

Price $ (4.4) (40) bps $ (0.5) — bps

Mix (9.1) (130) bps (7.3) (60) bps

Volume (12.4) (20) bps (9.4) (10) bps

Cost changes 3.0 40 bps 3.7 30 bps

Product recalls 5.6 80 bps 4.8 30 bps

Foreign exchange rates (2.7) 10 bps 1.5 60 bps

Total $ (20.0) (60) bps $ (7.2) 50 bps

Gross profit for the three month period decreased due to lower sales volumes with a margin decrease from unfavorable mix and higher trade promotions, with cost improvements and prior year recall costs offsetting the expiration of tariff exemptions for certain products and higher freight costs compared to the prior year.

Gross profit for the six month period decreased due to lower sales volumes with a margin increase from cost improvements and prior year recall costs with favorable foreign currency translation offset by unfavorable mix.

Selling, General & Administrative.

The following summarizes the selling, general & administrative costs for the three month periods ended December 29, 2024 and December 31, 2023, respectively, including amounts as a percentage of net sales for each respective period.

Three month periods ended (in millions, except %) December 29, 2024 % of Net Sales December 31, 2023 % of Net Sales Variance

The following summarizes the selling, general & administrative costs for the three and six month periods ended March 30, 2025 and March 31, 2024, respectively, including amounts as a percentage of net sales for each respective period.

Three month periods ended (in millions, except %) March 30, 2025 % of Net Sales March 31, 2024 % of Net Sales Variance

Sales, marketing & advertising $ 79.2 11.7 % $ 76.0 10.6 % $ 3.2 4.2 %

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Total selling, general & administrative $ 218.2 32.3 % $ 223.5 31.1 % (5.3) (2.4) %

Selling, general & administrative expenses decreased due to reduced overhead from cost savings initiatives offset by continued investment in marketing and advertising.

Sales, marketing and advertising costs increased due to the Company's investment towards brand focused marketing and advertising initiatives across all segments to drive top line growth.

Distribution costs decreased due to cost reduction and optimization within distribution centers.

General & administrative costs decreased due to lowered overhead costs from cost improvement initiatives and a tradename impairment recognized in the prior year.

Research & development costs were consistent between periods.

Strategic transaction, restructuring and optimization costs, inclusive of exit & disposal costs, were consistent between periods.

Six month periods ended (in millions, except %) March 30, 2025 % of Net Sales March 31, 2024 % of Net Sales Variance

Sales, marketing & advertising $ 158.6 11.5 % $ 147.9 10.5 % $ 10.7 7.2 %

Distribution 121.8 8.9 % 127.7 9.1 % (5.9) (4.6) %

General & administrative 127.8 9.3 % 138.9 9.8 % (11.1) (8.0) %

Research & development 11.6 0.8 % 11.7 0.8 % (0.1) (0.9) %

Strategic transaction, restructuring and optimization 11.5 0.8 % 13.2 0.9 % (1.7) (12.9) %

Total selling, general & administrative $ 431.3 31.3 % $ 439.4 31.1 % (8.1) (1.8) %

Selling, general & administrative expenses decreased for the three and six month periods due to reduced overhead from cost savings initiatives offset by higher costs on marketing and advertising initiatives.

Sales, marketing and advertising costs increased for the three and six month periods due to the Company's investment towards brand focused marketing and advertising initiatives.

Distribution costs decreased for the three and six month periods due to cost reduction and optimization in our distribution operations and supply chain.

General & administrative costs decreased for the three and six month periods due to lower overhead costs from cost improvement initiatives.

Research & development costs were consistent between periods for the three and six month periods.

Strategic transaction, restructuring and optimization costs, inclusive of exit & disposal costs, decreased for the three and six month periods due to lower costs towards HPC separation initiatives offset by higher exit and disposal costs within the three month period.

See Note 2 - Exit and Disposal Activities in the Notes to the Condensed Consolidated Financial Statements for further discussion.

Impairment of Intangible Assets .

During three and six month period ended March 30, 2025, the Company recognized an impairment charge on its PowerXL® tradename in response to a triggering event identified during the three month period ended March 30, 2025.

See Note 6 - Goodwill and Intangible Assets in the Notes to the Condensed Consolidated Financial Statements for further discussion.

During the three and six month period ended March 31, 2024, the Company recognized an impairment on its Rejuvenate® tradename and a non-core strategic tradename in response to a triggering event.

Representation and Warranty Insurance Proceeds .

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

See Note 14 - Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements for further discussion.

There is no comparable activity during the three and six month period ended March 30, 2025.

Interest Expense.

Interest expense decreased during the three month periods due to reduced debt borrowings and lower average borrowing rates following previously discussed refinancing activity in the prior year.

Interest expense decreased during the three and six month periods due to reduced debt borrowings following previously discussed refinancing activity in the prior year.

Interest Income.

Interest income decreased due to lower balance in term deposits following previously discussed refinancing activity in the prior year.

Interest income decreased during the three and six due to lower balances in term deposits following the use of funds towards previously discussed refinancing activity in the prior year.

Gain From Early Extinguishment of Debt.

During the three month period ended December 31, 2023, the Company recognized net gain from extinguishment of debt associated with previously discussed debt repurchase activity.

There was no comparable activity during the three month period ended December 29, 2024.

During the six month period ended March 31, 2024, the Company recognized a net gain from extinguishment of debt associated with previously discussed refinancing activity.

There was no comparable activity during the three and six month periods ended March 30, 2025.

Other Non-Operating Expense, Net.

4 unchanged sentences

tax, including the U.S.

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

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

See Note 13 - Income Tax in the Notes to the Condensed Consolidated Financial Statements for further discussion on the effective tax rate for the three and six month periods.

Income From Discontinued Operations.

Income from discontinued operations primarily reflect changes to indemnifications associated with divested businesses.

Loss from discontinued operations during the three and six month periods ended March 31, 2024 were attributable to a tax related indemnification settlement and reduction in previously accrued transaction related costs associated previous divestitures.

During the three and six month periods ended March 30, 2025 there were no comparable substantive updates or changes.

Noncontrolling Interest.

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(in millions, except %)

December 29, 2024 December 31, 2023 Variance

Three Month Periods Ended Variance

Six Month Periods Ended Variance

March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

$ 269.2 $ 289.9 $ (20.7) (7.1) % $ 529.2 $ 566.8 $ (37.6) (6.6) %

2 unchanged sentences

Adjusted EBITDA margin

19.8 % 19.0 % 80 bps

Net sales decreased with an organic net sales decrease of $17.7 million, or 6.4%, excluding a favorable foreign currency impact of $0.8 million, from lower volumes, mainly in North America (“NA”) due to the pull forward of sales into the prior fiscal year in advance of the S4/Hana ERP implementation in October 2024 and overall slower retail sales during the period.

Slower retail sales in NA was impacted by category softness in the Aquatics product category and consumer trade downs negatively impacting in the Companion Animal product category at retail.

Overall sales decline was offset by an increase in Europe, Middle East and Africa (“EMEA”) sales with positive momentum in e-commerce for the Dog and Cat Food product category and further expansion of the Good Boy® brand with distribution outside of the United Kingdom and introduction of new products.

Adjusted EBITDA decreased due to volume decrease with inflationary pressures in ocean freight and continued brand-focused investments with a margin increase from favorable mix and operational productivity.

18.6 % 21.5 % (290) bps 19.2 % 20.3 % (110) bps

Net sales for the three month period decreased with an organic net sales decrease of $18.3 million, or 6.3%, excluding an unfavorable foreign currency impact of $2.4 million, from lower North America (“NA”) volumes due to category softness in both companion animal and aquatics product categories as the consumer environment grew increasingly cautious looking for value or lower cost options, especially with premium products of the companion animal portfolio, and slower replenishment within the e-commerce channel due to slower reorder patterns and fulfillment center capacity constraints with an e-commerce retailer that appear normalized by the end of the period.

Sales within Europe, Middle East and Africa (“EMEA”) and rest of world were relatively flat, excluding negative impacts from foreign currency with positive volume growth in the companion animal category from expanded distribution of Good Boy® in continental Europe offset by decrease in the aquatics category primarily driven by an unfavorable foreign currency impact.

Net sales for the six month period decreased with an organic net sales decrease of $36.0 million, or 6.4%, excluding an unfavorable foreign currency impact of $1.6 million, from lower NA volumes due to category softness and slower replenishment within the e-commerce channel offset by an increase in EMEA volumes with the expansion of the Good Boy® brand and new product introduction with positive Dog and Cat Food product category distribution in e-commerce.

Adjusted EBITDA for the three month period decreased with a margin decrease due to the decrease in sales volume, incremental programming and trade spend, unfavorable mix, inflationary cost pressure predominantly on ocean freight and higher brand-focused investments, offset by operational productivity.

Adjusted EBITDA for the six month period decreased with a margin decrease due to sales volume decrease, unfavorable mix with increased ocean freight and higher brand-focused investment, offset by operational productivity and cost improvements.

Home & Garden

(in millions, except %)

December 29, 2024 December 31, 2023 Variance

Three Month Periods Ended Variance

Six Month Periods Ended Variance

March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

$ 152.3 $ 160.7 $ (8.4) (5.2) % $ 244.4 $ 232.7 $ 11.7 5.0 %

Adjusted EBITDA

9.3 (0.7) 10.0 n/m

26.7 29.2 (2.5) (8.6) % 36.0 28.5 7.5 26.3 %

Adjusted EBITDA margin

10.1 % (1.0) % 1,110 bps

n/m = not meaningful

Net sales and organic net sales increased due to higher distribution from earlier seasonal inventory build up for some retailers with improved placement and retail display strategy in anticipation of the upcoming season, primarily within our Controls and Repellent product categories, plus an increase in Household pest control products from a relatively warmer fall season extending retailer and consumer demand.

Net sales were also benefited by the pull forward of sales into the current period due to a S4/Hana ERP implementation for H&G in January 2025 to ensure seasonal supply during the go-live.

Adjusted EBITDA and margin increased due to higher volume, cost improvements and favorable trade variances offset by an increase in brand-focused investments and some inflation.

17.5 % 18.2 % (70) bps 14.7 % 12.2 % 250 bps

Net sales and organic net sales for the three month period decreased due to decreased volume with earlier seasonal inventory build up with retailers in the prior quarter, primarily with Controls products, pull forward of sales into prior quarter in anticipation of the S4/Hana ERP implementation in January 2025, and decline in the Cleaning category from prior year distribution losses, partially offset by incremental volume from new distribution and placement of Repellent and Household pest control products.

Net sales and organic net sales for the six month period increased with the build up of seasonal inventory for expected seasonal demand with retailers, improved placement and retail display strategy, primarily within our Controls and Repellent product categories, plus an increase in sales of Household pest control products from a relatively warmer fall season extending retailer and consumer demand at the beginning of the fiscal year.

Adjusted EBITDA for the three month period decreased with a margin decrease due to lower sales volumes, increased investment in brand-building advertising, unfavorable mix and some inflationary cost pressures within the period, partially offset by cost improvements.

Adjusted EBITDA for the six month period increased with a margin increase from higher volumes and favorable trade variances and cost improvements offset by an increase in brand-focused advertising and some inflation.

Home and Personal Care

(in millions, except %) December 29, 2024 December 31, 2023 Variance

(in millions, except %) Three Month Periods Ended

Six Month Periods Ended Variance

March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

$ 254.2 $ 267.9 $ (13.7) (5.1) % $ 602.3 $ 611.2 $ (8.9) (1.5) %

2 unchanged sentences

Adjusted EBITDA margin

7.7 % 7.8 % (10) bps

Net sales increased with an organic net sales increase of $10.7 million, or 3.1%, excluding an unfavorable foreign currency impact of $5.9 million.

The increase is due to increased volume in the Personal Care product category with growth in e-commerce distribution globally and new listings at traditional retail in NA.

The Home Appliances product category in EMEA also benefited from expanded distribution through e-commerce and new product listings while NA sales were negatively impacted by slower distribution and competitive pressures in traditional retail.

Sales in Latin America were negatively impacted by distribution challenges within the region while gaining new distribution wins with product launches in the Personal Care product category.

Adjusted EBITDA has remained flat with higher sales volumes and the benefit of cost improvement initiatives and favorable foreign currency offset by continued brand-focused investments, inflation in ocean freight, and expiration of tariff exclusions on certain product lines.

2.9 % 6.6 % (370) bps 5.6 % 7.3 % (170) bps

Net sales for the three month period decreased with an organic net sales decrease of $6.0 million, or 2.2%, excluding an unfavorable foreign currency impact of $7.7 million primarily from NA sales volumes decreasing for both home appliance and personal care product categories due to lower category demand and retailer reorder patterns as consumer confidence levels impacted overall category sales.

EMEA sales remained flat excluding negative foreign currency, with positive volumes in personal care offset by negative volumes in home appliances with European consumer confidence becoming more cautious in the current geopolitical environment and reduced home appliance category placement opportunities with certain grocery retailers.

Net sales were benefited by continued growth in LATAM markets for both product categories with new product listings and market expansion.

Net sales for the six month period decreased with volume decrease in NA for both product categories offset by volume growth in EMEA through e-commerce and new product listings, plus LATAM growth through new product listings and distribution wins.

Adjusted EBITDA for the three month period decreased with a margin decrease from lower sales volumes, higher trade spend and programming, unfavorable mix with inflationary cost pressures in ocean freight and the expiration of tariff exclusions on certain products, offset by cost improvements and savings initiatives, lower brand-focused investments and foreign currency.

Adjusted EBITDA for the six month period decreased from lower sales volumes, higher trade spend and programming, unfavorable mix with higher costs towards brand-focused investment and inflationary cost pressures in ocean freight and expiration of tariff exclusions on certain products, offset by cost improvements and savings initiatives.

Liquidity and Capital Resources

The following is a summary of cash flow from continuing operations for the three month periods ended December 29, 2024 and December 31, 2023, respectively.

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

The following is a summary of cash flow from continuing operations for the six month periods ended March 30, 2025 and March 31, 2024, respectively.

(in millions) March 30, 2025 March 31, 2024

Operating activities

4 unchanged sentences

Cash Flows from Operating Activities

Cash flows from operating activities by continuing operations decreased $90.0 million, due to increased cash flow used in working capital, primarily attributable to inventory build up in H&G and timing of operational cash receipts from HPC holiday season, and lower interest income, offset by improved operating results, lower spending on strategic transaction, restructuring and optimization initiatives and lower cash interest.

Cash flows from operating activities used by continuing operations decreased $129.3 million, due to increased cash flow used in working capital, primarily attributable to inventory build up in H&G, lower interest income and the recognition of $50 million of cash receipts in the prior year from representation and warranty insurance proceeds associated with the Tristar Business, offset by lower spending on strategic transaction, restructuring and optimization initiatives and lower cash interest.

Cash Flows from Investing Activities

Cash flows from investing activities for continuing operations decreased $139.5 million due to the decreased short term investment activity from the reduction of term deposits following previously discussed refinancing activity in the prior year.

Cash flows from investing activities for continuing operations decreased $559.3 million due to the decreased short term investment activity from the reduction of term deposits following previously discussed funding of refinancing activity in the prior year.

Cash Flows from Financing Activities

Cash flows from financing activities for continuing operations increased $342.5 million primarily from lower debt repayment and share repurchases activity.

During the three month periods ended December 29, 2024 and December 31, 2023, the Company made cash dividend payments of $13.2 million, or $0.47 per share, and $14.1 million, or $0.42 per share, respectively, which decreased due to the lower outstanding shares following treasury share repurchases.

Cash flows from financing activities used by continuing operations increased $358.8 million primarily from lower debt repayment and share repurchases activity.

During the six month periods ended March 30, 2025 and March 31, 2024, the Company made cash dividend payments of $25.3 million, or $0.47 per share, and $26.8 million, or $0.42 per share, respectively, which decreased due to the lower outstanding shares following treasury share repurchase activity.

Liquidity Outlook

4 unchanged sentences

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

As of December 29, 2024, the Company had a total cash and cash equivalents of $179.9 million and borrowing availability of $490.8 million, net of outstanding letters of credit of $9.2 million, under our credit facility with a total liquidity of $670.7 million.

As of March 30, 2025, the Company had a total cash and cash equivalents of $96.0 million and borrowing availability of $408.6 million, net of outstanding letters of credit of $8.4 million, under our credit facility with a total liquidity of $504.6 million.

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

2 unchanged sentences

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

As of December 29, 2024, we were in compliance with all covenants under the Credit Agreement and the indentures governing the 3.375% Notes, due June 1, 2029 and the 3.875% Notes, due March 15, 2031.

As of March 30, 2025, we were in compliance with all covenants under the Credit Agreement and the indentures governing the 3.375% Notes, due June 1, 2029 and the 3.875% Notes, due March 15, 2031.

Short-term financing needs primarily consist of working capital requirements, capital spending, periodic principal and interest payments on our long-term debt, and initiatives to support restructuring, integration or other strategic projects.

42 unchanged sentences

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

Three Month Period Ended Year Ended

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

Six Month Period Ended Year Ended

(in millions) March 30, 2025 September 30, 2024

Statements of Operations Data

12 unchanged sentences

Noncurrent Liabilities 997.7 930.9

The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of December 29, 2024 and September 30, 2024 are as follows:

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

The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of March 30, 2025 and September 30, 2024 are as follows:

(in millions) March 30, 2025 September 30, 2024

Statements of Financial Position Data

Current receivables from non-guarantor subsidiaries $ 121.4 $ 124.3

Long-term receivable from non-guarantor subsidiaries 29.0 30.7

Current payable to non-guarantor subsidiaries 20.8 59.7

Current note receivables from non-guarantor subsidiaries 18.9 227.1

Long-term note receivables from non-guarantor subsidiaries 21.4 30.7

Current payables to non-guarantor subsidiaries 9.2 58.6

Current debt with non-guarantor subsidiaries 361.2 435.3

Long-term debt with non-guarantor subsidiaries 17.9 20.2

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis