Item 1. Financial Statements
Item 1. Financial Statements (Unaudited)
SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Financial Position
As of December 28, 2025 and September 30, 2025
(unaudited)
(in millions)
December 28, 2025 September 30, 2025
Assets
Cash and cash equivalents $ 126.6 $ 123.6
Trade receivables, net 517.0 521.7
Other receivables 57.5 50.9
Inventories 450.8 446.1
Prepaid expenses and other current assets 48.9 41.9
Total current assets 1,200.8 1,184.2
Property, plant and equipment, net 247.9 255.0
Operating lease assets 112.6 73.5
Deferred charges and other 65.1 62.5
Goodwill 867.5 866.8
Intangible assets, net 929.0 937.6
Total assets $ 3,422.9 $ 3,379.6
Liabilities and Shareholders' Equity
Current portion of long-term debt $ 11.9 $ 11.7
Accounts payable 334.0 283.7
Accrued wages and salaries 29.6 50.2
Accrued interest 3.1 4.5
Income tax payable 27.7 21.2
Short-term operating lease liabilities 19.9 31.8
Other current liabilities 116.0 120.1
Total current liabilities 542.2 523.2
Long-term debt, net of current portion 554.3 556.2
Long-term operating lease liabilities 111.5 54.5
Deferred income taxes 129.8 136.6
Uncertain tax benefit obligation 167.1 180.3
Other long-term liabilities 18.7 19.1
Total liabilities 1,523.6 1,469.9
Commitments and contingencies (Note 12)
Shareholders' equity
Common stock 0.5 0.5
Additional paid-in capital 1,979.5 1,998.1
Accumulated earnings 2,236.4 2,219.3
Accumulated other comprehensive loss, net of tax ( 159.8 ) ( 171.9 )
Treasury stock
( 2,157.3 ) ( 2,136.3 )
Total shareholders' equity 1,899.3 1,909.7
Total liabilities and shareholders' equity $ 3,422.9 $ 3,379.6
See accompanying notes to the condensed consolidated financial statements
4
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Income
For the three month periods ended December 28, 2025 and December 29, 2024
(unaudited)
Three Month Periods Ended
(in millions, except per share)
December 28, 2025 December 29, 2024
Net sales $ 677.0 $ 700.2
Cost of goods sold 435.4 442.4
Gross profit 241.6 257.8
Selling, general & administrative 214.5 213.1
Operating income 27.1 44.7
Interest expense 6.8 6.2
Interest income ( 0.6 ) ( 2.6 )
Other non-operating expense, net 0.4 4.7
Income from continuing operations before income taxes 20.5 36.4
Income tax (benefit) expense ( 8.9 ) 11.8
Net income from continuing operations 29.4 24.6
Loss from discontinued operations, net of tax ( 1.0 ) ( 0.8 )
Net income 28.4 23.8
Net income from continuing operations attributable to non-controlling interest — 0.3
Net income attributable to controlling interest $ 28.4 $ 23.5
Amounts attributable to controlling interest
Net income from continuing operations attributable to controlling interest $ 29.4 $ 24.3
Loss from discontinued operations attributable to controlling interest, net of tax ( 1.0 ) ( 0.8 )
Net income attributable to controlling interest $ 28.4 $ 23.5
Earnings Per Share
Basic earnings per share from continuing operations $ 1.25 $ 0.87
Basic earnings per share from discontinued operations ( 0.04 ) ( 0.03 )
Basic earnings per share $ 1.21 $ 0.84
Diluted earnings per share from continuing operations $ 1.25 $ 0.87
Diluted earnings per share from discontinued operations ( 0.04 ) ( 0.03 )
Diluted earnings per share $ 1.21 $ 0.84
Dividend per share $ 0.47 $ 0.47
Weighted Average Shares Outstanding
Basic 23.4 27.9
Diluted 23.5 28.1
See accompanying notes to the condensed consolidated financial statements
5
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Comprehensive Income
For the three month periods ended December 28, 2025 and December 29, 2024
(unaudited)
Three Month Periods Ended
(in millions)
December 28, 2025 December 29, 2024
Net income $ 28.4 $ 23.8
Other comprehensive income
Foreign currency translation gain (loss)
Foreign currency translation gain (loss) 11.5 ( 65.1 )
Deferred tax effect — 2.3
Foreign currency translation gain (loss), net 11.5 ( 62.8 )
Unrealized gain on derivative instruments
Unrealized (loss) gain on derivative instruments before reclassification ( 1.9 ) 15.0
Net reclassification for loss to income from continuing operations 2.3 0.7
Unrealized gain on derivative instruments after reclassification 0.4 15.7
Deferred tax effect — ( 4.0 )
Net unrealized gain on derivative instruments 0.4 11.7
Defined benefit pension gain
Defined benefit pension gain before reclassification — 1.8
Net reclassification for loss to income from continuing operations 0.3 0.5
Defined benefit pension gain after reclassification 0.3 2.3
Deferred tax effect ( 0.1 ) ( 0.6 )
Net defined benefit pension gain 0.2 1.7
Comprehensive income (loss) 40.5 ( 25.6 )
Comprehensive loss from continuing operations attributable to non-controlling interest — ( 0.3 )
Comprehensive income (loss) attributable to controlling interest $ 40.5 $ ( 25.3 )
See accompanying notes to the condensed consolidated financial statements
6
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Shareholders' Equity
For the three month period ended December 28, 2025
(unaudited)
Common Stock Additional Paid-in Capital
Accumulated Earnings
Accumulated Other Comprehensive Loss
Treasury Stock
Total Shareholders' Equity
(in millions) Shares Amount
Balances at September 30, 2025 23.7 $ 0.5 $ 1,998.1 $ 2,219.3 $ ( 171.9 ) $ ( 2,136.3 ) $ 1,909.7
Net income from continuing operations — — — 29.4 — — 29.4
Loss from discontinued operations, net of tax — — — ( 1.0 ) — — ( 1.0 )
Other comprehensive income, net of tax — — — — 12.1 — 12.1
Treasury stock repurchases ( 0.6 ) — — — — ( 35.5 ) ( 35.5 )
Excise tax on net share repurchases — — — — — ( 0.2 ) ( 0.2 )
Restricted stock issued and related tax withholdings 0.2 — ( 22.9 ) — — 14.7 ( 8.2 )
Share based compensation — — 4.3 — — — 4.3
Dividends declared — — — ( 11.3 ) — — ( 11.3 )
Balances at December 28, 2025 23.3 $ 0.5 $ 1,979.5 $ 2,236.4 $ ( 159.8 ) $ ( 2,157.3 ) $ 1,899.3
See accompanying notes to the condensed consolidated financial statements
SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Shareholders' Equity
For the three month period ended December 29, 2024
(unaudited)
Common Stock Additional Paid-in Capital
Accumulated Earnings
Accumulated Other Comprehensive Loss
Treasury Stock
Total Shareholders' Equity
Non-controlling Interest
Total Equity
(in millions) Shares Amount
Balances at September 30, 2024 28.0 $ 0.5 $ 1,988.1 $ 2,169.0 $ ( 204.0 ) $ ( 1,812.7 ) $ 2,140.9 $ 0.8 $ 2,141.7
Net income from continuing operations — — — 24.3 — — 24.3 0.3 24.6
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 )
Treasury stock repurchases ( 0.8 ) — — — — ( 72.9 ) ( 72.9 ) — ( 72.9 )
Excise tax on net share repurchases — — — — — ( 0.6 ) ( 0.6 ) — ( 0.6 )
Restricted stock issued and related tax withholdings 0.1 — ( 10.3 ) — — 5.9 ( 4.4 ) — ( 4.4 )
Share based compensation — — 4.7 — — — 4.7 — 4.7
Dividends declared — — — ( 13.6 ) — — ( 13.6 ) — ( 13.6 )
Dividends paid by subsidiary to non-controlling interest — — — — — — — ( 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
7
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
For the three month periods ended December 28, 2025 and December 29, 2024
(unaudited)
Three Month Periods Ended
(in millions) December 28, 2025 December 29, 2024
Cash flows from operating activities
Net income $ 28.4 $ 23.8
Loss from discontinued operations, net of tax ( 1.0 ) ( 0.8 )
Net income from continuing operations 29.4 24.6
Adjustments to reconcile net income from continuing operations to net cash provided (used) by operating activities from continuing operations:
Depreciation 15.6 14.0
Amortization 10.2 10.5
Share based compensation 4.3 4.7
Impairment of property, plant and equipment and operating lease assets 0.5 —
Amortization of debt issuance costs 0.9 0.9
Deferred tax benefit ( 3.5 ) ( 1.9 )
Net changes in operating assets and liabilities 10.3 ( 124.7 )
Net cash provided (used) by operating activities from continuing operations 67.7 ( 71.9 )
Net cash used by operating activities from discontinued operations ( 0.3 ) ( 0.5 )
Net cash provided (used) by operating activities 67.4 ( 72.4 )
Cash flows from investing activities
Purchases of property, plant and equipment ( 8.1 ) ( 5.9 )
Cash flows from financing activities
Payment of debt and debt premium ( 3.0 ) ( 2.6 )
Payment of debt issuance costs — ( 0.1 )
Dividends paid to shareholders ( 10.9 ) ( 13.2 )
Treasury stock purchases ( 35.5 ) ( 72.9 )
Excise tax paid on net share repurchases — ( 4.1 )
Share based award tax withholding payments, net of proceeds upon vesting ( 8.2 ) ( 4.4 )
Net cash used by financing activities ( 57.6 ) ( 97.3 )
Effect of exchange rate changes on cash and cash equivalents 1.2 ( 12.9 )
Net change in cash, cash equivalents and restricted cash 2.9 ( 188.5 )
Cash, cash equivalents, and restricted cash, beginning of period 127.2 370.5
Cash, cash equivalents, and restricted cash, end of period $ 130.1 $ 182.0
Supplemental disclosure of cash flow information
Cash paid for interest associated with continuing operations $ 7.1 $ 7.0
Cash paid for taxes associated with continuing operations 3.8 8.0
Cash paid for taxes associated with discontinued operations — 2.6
Non cash investing activities
Acquisition of property, plant and equipment through finance leases 0.5 0.4
Non cash financing activities
Non-cash excise tax on net share repurchases 0.2 0.6
Issuance of shares through stock compensation plan 20.1 9.4
See accompanying notes to the condensed consolidated financial statements
8
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Fiscal Period-End
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company and its majority owned subsidiaries in accordance with accounting principles for interim financial information generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position and results of operations. It is management’s opinion, however, that all material adjustments have been made which are necessary for a fair financial statement presentation. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
The Company’s fiscal year ends on September 30 and the Company reports its results using fiscal quarters whereby each three month quarterly reporting period is approximately thirteen weeks in length and ends on a Sunday. 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 month periods included within this Quarterly Report for the Company are December 28, 2025 and December 29, 2024, respectively.
Recently Issued Accounting Standards
In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively; however, retrospective application is also permitted. This ASU will be effective for our fiscal year ending September 30, 2026. The Company is currently evaluating the impact this ASU may have on our consolidated financial statement disclosures.
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 within the income statement 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 our consolidated financial statement disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient in estimating credit losses for current accounts receivables and current contract assets arising from transactions accounted for under Topic 606 that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in ASU 2025-05 are effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. This ASU will be effective for our fiscal year ending September 30, 2027. The Company is currently evaluating the impact this ASU may have on our consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which modernizes previously written guidance around internal-use software costs by eliminating accounting consideration of software project development stages and provide for cost capitalization when management has authorized and committed funding to the project and that the project is considered 'probable' of completion and the software used to perform the function as intended, along with prescriptive disclosure requirements associated with internal-use software costs to be consistent with Subtopic 360-10, Property, Plant and Equipment regardless of how those costs are presented in the financial statements. The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The amendment may be applied either retrospectively or prospectively or on a modified prospective basis prescribed by the ASU. This ASU will be effective for our fiscal year ending September 30, 2029. The Company is currently evaluating the impact this ASU may have on our consolidated financial statements.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815), Hedge Accounting Improvements , which aligns financial reporting with the economics of some of an entity’s risk management activities by updating similar risk assessment for cash flow hedges, hedging interest payments on choose-your-rate debt, cash flow hedges of nonfinancial forecasted transactions, net written options as hedging instruments, and foreign currency-denominated debt designated as a hedging instrument and a hedged item. The amendments in ASU 2025-09 are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods and applied on a prospective basis. 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 our consolidated financial statements.
9
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
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 month periods ended December 28, 2025 and December 29, 2024, by segment and geographic region (based upon destination) and revenue type.
Three Month Period Ended December 28, 2025 Three Month Period Ended December 29, 2024
(in millions) GPC H&G HPC Total GPC H&G HPC Total
Geographic Region
NA $ 168.7 $ 72.0 $ 109.8 $ 350.5 $ 152.0 $ 90.5 $ 131.2 $ 373.7
EMEA 102.6 — 144.6 247.2 99.0 — 157.8 256.8
LATAM 3.2 1.9 50.1 55.2 2.1 1.6 40.0 43.7
APAC 7.1 — 17.0 24.1 6.9 — 19.1 26.0
Total revenue $ 281.6 $ 73.9 $ 321.5 $ 677.0 $ 260.0 $ 92.1 $ 348.1 $ 700.2
Revenue type
Product sales $ 278.9 $ 73.6 $ 319.9 $ 672.4 $ 257.1 $ 91.9 $ 346.3 $ 695.3
Licensing 1.8 0.3 1.6 3.7 2.1 0.2 1.7 4.0
Service and other 0.9 — — 0.9 0.8 — 0.1 0.9
Total revenue $ 281.6 $ 73.9 $ 321.5 $ 677.0 $ 260.0 $ 92.1 $ 348.1 $ 700.2
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 those retail 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 28, 2025 and December 29, 2024.
(% of Net Sales) December 28, 2025 December 29, 2024
Significant customers, exceeding 10% of net sales 37.1 % 38.0 %
Subject to Black & Decker trademark license agreement 13.6 % 12.5 %
The following summarizes the concentration risk of the associated receivables from the two significant retail customers. There were no additional concentrations of credit risk exceeding 10% of net trade receivables.
(% of Trade Receivables, Net) December 28, 2025 September 30, 2025
Significant customers, exceeding 10% of net trade receivables 40.6 % 41.6 %
The following summarizes the allowance for product returns with direct customers and estimated credit losses on trade receivables as of December 28, 2025 and September 30, 2025. Costs and reserves associated with standard product warranties with consumers are not material to the condensed consolidated financial statements.
(in millions) Line Item December 28, 2025 September 30, 2025
Allowance for doubtful accounts Trade receivables, net $ 7.1 $ 6.3
Liability for product returns Other current liabilities 13.1 9.8
10
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 3 – INVENTORIES
Inventories consists of the following.
(in millions) December 28, 2025 September 30, 2025
Raw materials $ 49.4 $ 45.7
Work-in-process 5.3 5.2
Finished goods 396.1 395.2
Inventories $ 450.8 $ 446.1
NOTE 4 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following.
(in millions) December 28, 2025 September 30, 2025
Land, buildings and improvements $ 91.0 $ 91.3
Machinery, equipment and other 361.9 359.6
Computer software 147.4 146.3
Finance leases 138.3 138.0
Construction in progress 24.0 21.7
Property, plant and equipment 762.6 756.9
Accumulated depreciation ( 514.7 ) ( 501.9 )
Property, plant and equipment, net $ 247.9 $ 255.0
Depreciation expense on property, plant and equipment for the three month periods ended December 28, 2025 and December 29, 2024 is as follows.
(in millions) December 28, 2025 December 29, 2024
Depreciation expense $ 15.6 $ 14.0
Deferred implementation costs for hosted cloud computing arrangements are as follows.
(in millions) December 28, 2025 September 30, 2025
Deferred cloud computing costs, net $ 2.6 $ 3.7
Reported as:
Prepaid expenses and other current assets 2.2 3.3
Deferred charges and other 0.4 0.4
Amortization expense of deferred implementation costs for hosted cloud computing costs arrangements for the three month periods ended December 28, 2025 and December 29, 2024 is as follows.
(in millions) December 28, 2025 December 29, 2024
Amortization expense $ 1.4 $ 1.5
11
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 5 - GOODWILL AND INTANGIBLE ASSETS
Goodwill, by segment, consists of the following.
(in millions) GPC H&G Total
As of September 30, 2025 $ 524.2 $ 342.6 $ 866.8
Foreign currency impact 0.7 — 0.7
As of December 28, 2025 $ 524.9 $ 342.6 $ 867.5
The carrying value and accumulated amortization of intangible assets are as follows.
December 28, 2025 September 30, 2025
(in millions) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net
Amortizable intangible assets:
Customer relationships $ 613.9 $ ( 466.6 ) $ 147.3 $ 621.3 $ ( 465.9 ) $ 155.4
Technology assets 75.3 ( 47.3 ) 28.0 75.3 ( 46.1 ) 29.2
Tradenames 44.4 ( 13.7 ) 30.7 44.4 ( 12.9 ) 31.5
Total amortizable intangible assets 733.6 ( 527.6 ) 206.0 741.0 ( 524.9 ) 216.1
Indefinite-lived intangible assets – tradenames 723.0 — 723.0 721.5 — 721.5
Total intangible assets $ 1,456.6 $ ( 527.6 ) $ 929.0 $ 1,462.5 $ ( 524.9 ) $ 937.6
Amortization expense on intangible assets for the three month periods ended December 28, 2025 and December 29, 2024 is as follows.
(in millions) December 28, 2025 December 29, 2024
Amortization expense $ 10.2 $ 10.5
Excluding the impact of any future acquisitions, dispositions or changes in foreign currency, the Company estimates amortization expense of intangible assets for the next five fiscal years will be as follows.
(in millions) Amortization
2026 remaining $ 30.9
2027 41.2
2028 39.4
2029 36.2
2030 15.7
12
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 6 – DEBT
Debt with external lenders consist of the following.
December 28, 2025 September 30, 2025
(in millions) Amount Rate Amount Rate
3.375 % Exchangeable Notes, due June 1, 2029
$ 350.0 3.4 % $ 350.0 3.4 %
5.00 % Notes, due October 1, 2029
4.9 5.0 % 4.9 5.0 %
5.50 % Notes, due July 15, 2030
13.2 5.5 % 13.2 5.5 %
3.875 % Notes, due March 15, 2031
128.0 3.9 % 128.0 3.9 %
Obligations under finance leases 82.8 5.6 % 85.3 5.6 %
Total debt 578.9 581.4
Debt issuance costs ( 12.7 ) ( 13.5 )
Less current portion ( 11.9 ) ( 11.7 )
Long-term debt, net of current portion $ 554.3 $ 556.2
Credit Agreement
As of December 28, 2025, there are no borrowings outstanding under the Company’s $ 500 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 $ 492.2 million, net outstanding letters of credit of $ 7.8 million.
3.375 % Exchangeable Notes due June 1, 2029 ("Exchangeable Notes")
Subsequent to the issuance of the Exchangeable Notes, the Company increased its quarterly dividend rate to $ 0.47 per share. As such, the exchange rate for the Exchangeable Notes due June 1, 2029 has been adjusted to 8.2375 shares of common stock per $1,000 principal amount of notes (which is equal to an initial conversion price of approximately $ 121.40 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 has been updated to approximately $ 121.40 per share, subject to certain additional adjustments, corresponding to the change in exchange price of the Exchangeable Notes, and the cap price has been updated to approximately $ 158.75 per share, subject to certain additional adjustments.
13
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 7 - DERIVATIVES
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 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, Colombian Pesos, Euros, Japanese Yen, Mexican Pesos, Pound Sterling, or U.S. Dollars. The fair value of effective hedges are 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 Australian Dollars, Canadian Dollars, Czech Koruna, Euros, Japanese Yen, Polish Zloty, Pound Sterling, or U.S. Dollars. 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 28, 2025 and September 30, 2025.
December 28, 2025 September 30, 2025
(in millions) Notional Balance Maturities thru Notional Balance Maturities thru
Foreign exchange contracts - cash flow hedges $ 325.4 June 2027 $ 333.5 March 2027
Foreign exchange contracts - not designated as hedge 125.1 January 2026 447.7 October 2025
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 28, 2025 September 30, 2025
Derivative Assets
Foreign exchange contracts – cash flow hedges Other receivables $ 0.6 $ 0.6
Foreign exchange contracts – cash flow hedges Deferred charges and other — 0.1
Foreign exchange contracts – not designated as hedge Other receivables 0.2 0.1
Total Derivative Assets $ 0.8 $ 0.8
Derivative Liabilities
Foreign exchange contracts – cash flow hedges Accounts payable $ 9.2 $ 8.8
Foreign exchange contracts – cash flow hedges Other long term liabilities 0.5 0.1
Foreign exchange contracts – not designated as hedge Accounts payable 0.3 0.7
Total Derivative Liabilities $ 10.0 $ 9.6
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 28, 2025 and September 30, 2025. 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 28, 2025 and December 29, 2024, respectively.
(in millions) Line Item December 28, 2025 December 29, 2024
Foreign exchange contracts - cash flow hedges (effective portion) Cost of goods sold $ ( 2.3 ) $ ( 0.7 )
Foreign exchange contracts - cash flow hedges (ineffective portion)
Cost of goods sold ( 2.0 ) —
Foreign exchange contracts - not designated as hedge Other non-operating expense, net ( 0.4 ) ( 3.3 )
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 10 - 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 28, 2025, the net loss estimated to be reclassified from AOCI into earnings associated with cash flow hedges over the next 12 months is $ 5.0 million, net of tax.
14
Table of Contents
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 December 28, 2025 and September 30, 2025 according to the fair value hierarchy are as follows.
December 28, 2025 September 30, 2025
(in millions) Level 1 Level 2 Level 3 Fair Value Carrying Amount Level 1 Level 2 Level 3 Fair Value Carrying Amount
Derivative Assets $ — $ 0.8 $ — $ 0.8 $ 0.8 $ — $ 0.8 $ — $ 0.8 $ 0.8
Derivative Liabilities — 10.0 — 10.0 10.0 — 9.6 — 9.6 9.6
Debt — 538.6 — 538.6 566.2 — 532.7 — 532.7 567.9
The fair value measurements of the Company’s debt represent non-active market exchanged traded securities which are valued at quoted input prices that are directly observable or indirectly observable through corroboration with observable market data (Level 2). The Company's derivative instruments are valued on a recurring basis using internal models, which are based on market observable inputs, including both forward and spot prices for currencies, which are generally based on quoted or observed market prices (Level 2). See Note 6 – Debt for additional detail on outstanding debt. See Note 7 – Derivatives for additional detail on derivative assets and liabilities.
The carrying values of goodwill, intangible assets and other long-lived assets are tested annually or more frequently if an event occurs that indicates an impairment loss may have been incurred, using fair value measurements with unobservable inputs (Level 3). See Note 5 - Goodwill and Intangible Assets for additional detail.
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
The following summarizes the activity of common stock repurchases for the three month periods ended December 28, 2025 and December 29, 2024.
December 28, 2025 December 29, 2024
Three Month Periods Ended
(in millions except per share data)
Number of Shares Repurchased Average Price Per Share Amount Number of Shares Repurchased Average Price Per Share Amount
Open Market Purchases 0.6 $ 55.11 $ 35.5 0.8 $ 90.95 $ 72.9
In June 2025, the Company entered into a rule 10b5-1 repurchase plan for $ 50.0 million to facilitate daily market share repurchases through February 13, 2026, until the cap is reached or until the plan is terminated, which was subsequently amended in September 2025 to increase the cap to $ 100 million. Repurchases through the rule 10b5-1 repurchase plans are included in the open market purchases above. As of December 28, 2025, there has been $ 80.8 million repurchased pursuant to the new 10b5-1 repurchase plan.
15
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 10 - ACCUMULATED OTHER COMPREHENSIVE INCOME
The change in the components of AOCI for the three month period ended December 28, 2025, was as follows.
(in millions) Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total
Balance at September 30, 2025
$ ( 140.3 ) $ 0.6 $ ( 32.2 ) $ ( 171.9 )
Other comprehensive income (loss) before reclassification
11.5 ( 1.9 ) — 9.6
Net reclassification for loss to income from continuing operations — 2.3 0.3 2.6
Other comprehensive income before tax
11.5 0.4 0.3 12.2
Deferred tax effect — — ( 0.1 ) ( 0.1 )
Other comprehensive income, net of tax
11.5 0.4 0.2 12.1
Other comprehensive income attributable to controlling interest
11.5 0.4 0.2 12.1
Balance at December 28, 2025 $ ( 128.8 ) $ 1.0 $ ( 32.0 ) $ ( 159.8 )
The following presents reclassifications of the gain (loss) on the Condensed Consolidated Statements of Income from AOCI for the three month period ended December 28, 2025:
(in millions) Derivative Instruments Defined Benefit Pension Total
Cost of goods sold $ ( 2.3 ) $ — $ ( 2.3 )
Other non-operating expense, net — ( 0.3 ) ( 0.3 )
The change in the components of AOCI for the three month period ended December 29, 2024, was as follows.
Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total
Balance at September 30, 2024
$ ( 164.1 ) $ ( 2.2 ) $ ( 37.7 ) $ ( 204.0 )
Other comprehensive (loss) income before reclassification
( 65.1 ) 15.0 1.8 ( 48.3 )
Net reclassification for loss to income from continuing operations — 0.7 0.5 1.2
Other comprehensive (loss) income before tax
( 65.1 ) 15.7 2.3 ( 47.1 )
Deferred tax effect 2.3 ( 4.0 ) ( 0.6 ) ( 2.3 )
Other comprehensive (loss) income, net of tax
( 62.8 ) 11.7 1.7 ( 49.4 )
Less: other comprehensive loss from continuing operations attributable to non-controlling interest
( 0.3 ) — — ( 0.3 )
Other comprehensive (loss) income attributable to controlling interest
( 62.5 ) 11.7 1.7 ( 49.1 )
Balance at December 29, 2024 $ ( 226.6 ) $ 9.5 $ ( 36.0 ) $ ( 253.1 )
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 29, 2024.
(in millions) Derivative Instruments Defined Benefit Pension Total
Cost of goods sold $ ( 0.7 ) $ — $ ( 0.7 )
Other non-operating expense, net — ( 0.5 ) ( 0.5 )
16
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 11 - INCOME TAXES
The effective tax rate for the three month periods ended December 28, 2025 and December 29, 2024, was as follows:
December 28, 2025 December 29, 2024
Effective tax rate ( 43.7 ) % 32.5 %
The estimated annual effective tax rate applied to the three month period ended December 28, 2025, 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”), net of applicable deductions, and certain nondeductible expenses. The Company is not projecting U.S. taxable income for Fiscal 2026, 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 month period ended December 28, 2025, the Company effectively settled an uncertain tax position in the U.S. As a result, the Company recognized a non-cash reduction in income tax expense of $ 17.6 million during the period.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
The Company is a defendant in various litigation matters generally arising out of the ordinary course of business. Based on information currently available, the Company does not believe that any additional matters or proceedings presently pending will have a material adverse effect on its results of operations, financial condition, liquidity or cash flows.
Environmental Liability. The Company has realized commitments attributable to environmental remediation activities primarily associated with former manufacturing sites of the Company's HPC segment. In coordination with local and federal regulatory agencies, we have conducted testing on certain sites, which have resulted in the identification of contamination that has been attributed to historical activities at the properties, resulting in the realization of incremental costs to be assumed by the Company towards the remediation of these properties and the recognition of an environmental remediation liability. 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. The following is a summary of the environmental remediation liability as of December 28, 2025 and September 30, 2025:
(in millions) December 28, 2025 September 30, 2025
Environmental remediation liability $ 5.3 $ 5.4
Reported as:
Other current liabilities 1.9 1.9
Other long-term liabilities 3.4 3.5
Product Liability. 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. There have been no recent product issues that management believes would have a material impact on the Company's financial condition or operating results. As of December 28, 2025 and September 30, 2025, the Company recognized $ 2.1 million and $ 2.0 million, respectively, in product liability, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.
17
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 13 - SEGMENT INFORMATION
The Company is a diversified global branded consumer products company managed through three 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 business. The Company identifies its segments as those operations whose results the Chief Operating Decision Maker ("CODM"), recognized as the Company's Chief Executive Officer, regularly reviews for making operating decisions, allocating capital and resources amongst the operations, and assessing performance as the source of its reportable segments. 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.
The CODM 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 from continuing operations. Adjusted EBITDA also excludes certain non-cash adjustments including share based compensation, impairment charges on property, plant and equipment, operating and finance lease assets, and goodwill and other intangible assets; gain or loss from the early extinguishment of debt; and purchase accounting adjustments recognized in income subsequent to an acquisition attributable to the step in value on assets acquired. 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.
Segment net sales consists of revenue generated by contracts with external customers for the sale of products and services. The Company does not have any significant or material intrasegment revenues. See Note 2 - Revenue Recognition and Receivables for further breakdown of revenue by segment.
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. From time to time, the Company may revise the measurement of overhead allocations and presentation of significant expenses, as determined by the information regularly reviewed by its CODM.
The Company has not included the results from discontinued operations within the following segment reporting when the discontinued operations were previously reported as a segment in any prior period. Indirect costs from shared enabling functions supporting discontinued operations during the fiscal periods of the Company’s ownership of the divested segment, prior to the completion of the divestiture, are excluded from the reporting of income (loss) from discontinued operations and included within the income (loss) for continuing operations as they are not direct costs of the disposal group. The indirect costs are considered unallocated shared service costs and not allocated across the remaining segments of the Company during the respective periods.
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.
18
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 13 - SEGMENT INFORMATION (continued)
Financial information for the Company's segments, including net sales, significant expenses and reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Taxes for the three month periods ended December 28, 2025, and December 29, 2024 are as follows:
December 28, 2025 December 29, 2024
(in millions) GPC H&G HPC Total GPC H&G HPC Total
Net sales $ 281.6 $ 73.9 $ 321.5 $ 677.0 $ 260.0 $ 92.1 $ 348.1 $ 700.2
Cost of goods sold 174.5 43.8 217.1 435.4 153.2 56.7 232.6 442.5
Selling, general & administrative 66.9 30.6 89.8 187.3 63.2 31.0 90.9 185.1
Other non-operating expense, net 0.2 — ( 0.1 ) 0.1 0.5 — 3.0 3.5
Addback: depreciation & amortization
9.0 5.0 6.0 20.0 8.4 4.9 5.1 18.4
Segment Adjusted EBITDA $ 49.0 $ 4.5 $ 20.7 74.2 $ 51.5 $ 9.3 $ 26.7 87.5
Interest expense 6.8 6.2
Depreciation 15.6 14.0
Amortization 10.2 10.5
Corporate costs 12.2 12.3
Interest income
( 0.6 ) ( 2.6 )
Share-based compensation 4.3 4.7
Non-cash impairment charges 0.5 —
Exit and disposal costs 1.1 0.5
Global ERP transformation 1
2.4 2.5
Litigation charges 2
0.9 0.8
Other 3
0.3 2.2
Income from continuing operations before income taxes $ 20.5 $ 36.4
________________________________________
1 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. The Company had recently extended the project to include its HPC segment and anticipates costs to be incurred through further deployments through calendar year 2026.
2 Litigation costs are associated with the Company's cost to facilitate various ongoing litigation matters associated with the Tristar Business acquisition in Fiscal 2023, as previously discussed in our 2025 Annual Report.
3 Other is attributable to other project costs associated with previous strategic separation initiatives, distribution center transitions and key executive severance costs.
19
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 13 - SEGMENT INFORMATION (continued)
Depreciation and amortization relating to the segments are as follows for the three month periods ended December 28, 2025 and December 29, 2024 :
(in millions) December 28, 2025 December 29, 2024
GPC $ 9.0 $ 8.4
H&G 5.0 4.9
HPC 6.0 5.1
Total segments 20.0 18.4
Corporate and shared operations 5.8 6.1
Total depreciation and amortization $ 25.8 $ 24.5
Segment assets consist of Inventories, net. The following is a summary of segment assets and a reconciliation of segment assets to total assets of the Company were as follows as of December 28, 2025 and September 30, 2025:
Segment assets (in millions) December 28, 2025 September 30, 2025
GPC $ 147.9 $ 161.4
H&G 138.4 92.2
HPC 164.5 192.5
Total segment assets 450.8 446.1
Other current assets 750.0 738.1
Non-current assets 2,222.1 2,195.4
Total assets $ 3,422.9 $ 3,379.6
Geographic Financial Information
Net sales by geographic regions (based upon destination) for the three month periods ended December 28, 2025 and December 29, 2024 are as follows:
Net sales to external parties - Geographic Disclosure (in millions) December 28, 2025 December 29, 2024
United States $ 338.9 $ 360.0
Europe/MEA 247.2 256.8
Latin America 55.2 43.7
Asia-Pacific 24.1 26.0
North America - Other 11.6 13.7
Net sales $ 677.0 $ 700.2
Long-lived asset information, consisting of Property Plant and Equipment, Net, and Operating Lease Assets, for the three month periods ended December 28, 2025 and September 30, 2025 by geographic area are as follows:
Long-lived assets - Geographic Disclosure (in millions) December 28, 2025 September 30, 2025
United States $ 306.4 $ 270.9
Europe/MEA 46.3 49.2
Latin America 2.1 2.1
North America - Other 4.3 4.7
Asia-Pacific 1.4 1.6
Total long-lived assets $ 360.5 $ 328.5
20
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 14 - EARNINGS PER SHARE
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. Shared based awards that would be excluded from the diluted earnings per share calculations as the effect of the inclusion would have been antidilutive were considered immaterial. 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 month periods ended December 28, 2025 and December 29, 2024, are as follows:
(in millions, except per share amounts) December 28, 2025 December 29, 2024
Numerator
Net income from continuing operations attributable to controlling interest $ 29.4 $ 24.3
Loss from discontinued operations attributable to controlling interest, net of tax ( 1.0 ) ( 0.8 )
Net income attributable to controlling interest $ 28.4 $ 23.5
Denominator
Weighted average shares outstanding – basic 23.4 27.9
Dilutive shares 0.1 0.2
Weighted average shares outstanding – diluted 23.5 28.1
Earnings per share
Basic earnings per share from continuing operations $ 1.25 $ 0.87
Basic earnings per share from discontinued operations ( 0.04 ) ( 0.03 )
Basic earnings per share $ 1.21 $ 0.84
Diluted earnings per share from continuing operations $ 1.25 $ 0.87
Diluted earnings per share from discontinued operations ( 0.04 ) ( 0.03 )
Diluted earnings per share $ 1.21 $ 0.84
21
Table of Contents
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.