Spectrum Brands Holdings, Inc. (NYSE: SPB; “Spectrum Brands” or
the “Company”), a leading global branded consumer products company
focused on driving innovation and providing exceptional customer
service, announced it will reaffirm fiscal 2020 guidance today at
the 2020 Consumer Analyst Group of New York (CAGNY) Conference.
Spectrum Brands continues to expect low single-digit reported
net sales growth in fiscal 2020, with foreign exchange rates
expected to have a slightly negative impact based upon current
rates. We continue to expect fiscal 2020 adjusted EBITDA to be
between $570 to $590 million, and adjusted free cash flow to be
between $240 million and $260 million.
Going forward, the Company plans to generally only discuss its
guidance metrics at its quarterly earnings calls. This is an update
to the Company’s disclosure policy, which we may evaluate and amend
from time to time.
FORECASTED ADJUSTED EBITDA
The following is a reconciliation of
forecasted net income to adjusted EBITDA for the year ending
September 30, 2020
(in millions)
F2020
Net income
$
53 - 93
Income tax expense
13 - 23
Interest expense
140 - 150
Depreciation and amortization
145 - 150
EBITDA
366 - 401
Share and incentive based compensation
55 - 60
Transaction related charges
12
Restructuring and related charges
65 - 75
Loss on assets held for sale
33
Write-off from impairment of intangible
assets
24
Adjusted EBITDA
$
570 - 590
FORECASTED ADJUSTED FREE CASH
FLOW
The following is a reconciliation of
forecasted net cash flow from operating activities to adjusted free
cash flow for the year ending September 30, 2020
(in millions)
F2020
Net cash flow from operating
activities
$
290 - 310
Purchases of property, plant and
equipment
(90) - (100)
Divestiture related separation costs and
taxes
40 - 50
Adjusted free cash flow
$
240 - 260
About Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings, a member of the Russell 1000 Index, is
a leading supplier of residential locksets, residential builders’
hardware, plumbing, shaving and grooming products, personal care
products, small household appliances, specialty pet supplies, lawn
and garden and home pest control products, and personal insect
repellents. Helping to meet the needs of consumers worldwide,
Spectrum Brands offers a broad portfolio of market-leading,
well-known and widely trusted brands including Kwikset®, Weiser®,
Baldwin®, National Hardware®, Pfister®, Remington®, George
Foreman®, Russell Hobbs®, Black+Decker®, Tetra®, Marineland®,
Nature’s Miracle®, Dingo®, 8-in-1®, FURminator®, IAMS® and
Eukanuba® (Europe only), Digest-eeze™, Healthy-Hide®, Littermaid®,
Spectracide®, Cutter®, Repel®, Hot Shot®, Black Flag® and Liquid
Fence®. For more information, please visit
www.spectrumbrands.com.
Non-GAAP Measurements
Management believes that certain non-GAAP financial measures may
be useful in providing additional meaningful comparisons between
current results and results in prior periods. Management believes
that organic net sales provide for a more complete understanding of
underlying business trends of regional and segment performance by
excluding the impact of currency exchange rate fluctuations and the
impact of acquisitions. In addition, within this release, including
the supplemental information attached hereto, reference is made to
adjusted diluted EPS, adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA), and adjusted EBITDA margin.
Adjusted EBITDA is a metric used by management to evaluate segment
performance and frequently used by the financial community which
provides insight into an organization’s operating trends and
facilitates comparisons between peer companies, since interest,
taxes, depreciation and amortization can differ greatly between
organizations as a result of differing capital structures and tax
strategies. Adjusted EBITDA also is one of the measures used for
determining compliance with the Company’s debt covenants. Adjusted
EBITDA excludes certain items that are unusual in nature or not
comparable from period to period. Adjusted EBITDA margin reflects
adjusted EBITDA as a percentage of net sales of the Company. The
Company’s management uses adjusted diluted EPS as one means of
analyzing the Company’s current and future financial performance
and identifying trends in its financial condition and results of
operations. Management believes that adjusted diluted EPS is a
useful measure for providing further insight into our operating
performance because it eliminates the effects of certain items that
are not comparable from one period to the next. An income tax
adjustment is included in adjusted diluted EPS to exclude the
impact of the valuation allowance against deferred taxes and other
tax-related items in order to reflect a normalized ongoing
effective tax rate. Adjusted free cash flow provides useful
information to investors regarding our ability to generate cash
from business operations that is available for acquisitions and
other investments, service of debt principal, dividends and share
repurchases and to meet working capital requirements. Our
definition of adjusted free cash flow takes into consideration
capital investments required to maintain operations of our
businesses and execute our strategy. The Company provides this
information to investors to assist in comparisons of past, present
and future operating results and to assist in highlighting the
results of on-going operations. While the Company’s management
believes that non-GAAP measurements are useful supplemental
information, such adjusted results are not intended to replace the
Company’s GAAP financial results and should be read in conjunction
with those GAAP results. Other Supplemental Information has been
provided to demonstrate reconciliation of non-GAAP measurements
discussed above to most relevant GAAP financial measurements.
Forward-Looking Statements
This document contains, and certain oral and written statements
made by our representatives from time to time may contain,
forward-looking statements, including, without limitation,
statements made under “Fiscal 2020 Outlook for Continuing
Operations”, statements regarding our Global Productivity
Improvement Plan and other statements regarding the Company’s
ability to meet its expectations for its fiscal 2020. We have
tried, whenever possible, to identify these statements by using
words like “future,” “anticipate”, “intend,” “plan,” “estimate,”
“believe,” “belief,” “expect,” “project,” “forecast,” “could,”
“would,” “should,” “will,” “may,” and similar expressions of future
intent or the negative of such terms. These statements are subject
to a number of risks and uncertainties that could cause results to
differ materially from those anticipated as of the date of this
release. Actual results may differ materially as a result of (1)
the impact of our indebtedness on our business, financial condition
and results of operations; (2) the impact of restrictions in our
debt instruments on our ability to operate our business, finance
our capital needs or pursue or expand business strategies; (3) any
failure to comply with financial covenants and other provisions and
restrictions of our debt instruments; (4) the effects of general
economic conditions, including the impact of, and changes, to
tariffs and trade policies, inflation, recession or fears of a
recession, depression or fears of a depression, labor costs and
stock market volatility or monetary or fiscal policies in the
countries where we do business; (5) the impact of fluctuations in
commodity prices, costs or availability of raw materials or terms
and conditions available from suppliers, including suppliers’
willingness to advance credit; (6) interest rate and exchange rate
fluctuations; (7) the loss of significant reduction in, or
dependence upon, sales to any significant retail customer(s); (8)
competitive promotional activity or spending by competitors, or
price reductions by competitors; (9) the introduction of new
product features or technological developments by competitors
and/or the development of new competitors or competitive brands;
(10) the impact of actions taken by significant stockholders; (11)
changes in consumer spending preferences and demand for our
products; (12) our ability to develop and successfully introduce
new products, protect our intellectual property and avoid
infringing the intellectual property of third parties; (13) our
ability to successfully identify, implement, achieve and sustain
productivity improvements (including our Global Productivity
Improvement Plan), cost efficiencies (including at our
manufacturing and distribution operations), and cost savings; (14)
the seasonal nature of sales of certain of our products; (15) the
effects of climate change and unusual weather activity; (16) the
cost and effect of unanticipated legal, tax or regulatory
proceedings or new laws or regulations (including environmental,
public health and consumer protection regulations); (17) our
discretion to conduct, suspend or discontinue our share repurchase
program (including our discretion to conduct purchases, if any, in
a variety of manners such as open-market purchases or privately
negotiated transactions); (18) public perception regarding the
safety of products that we manufacture and sell, including the
potential for environmental liabilities, product liability claims,
litigation and other claims related to products manufactured by us
and third parties; (19) the impact of existing, pending or
threatened litigation, regulation or other requirements or
operating standards applicable to our business; (20) the impact of
cybersecurity breaches or our actual or perceived failure to
protect company and personal data; (21) changes in accounting
policies applicable to our business; (22) our ability to utilize
net operating loss carry-forwards to offset tax liabilities from
future taxable income; (23) the impact of expenses resulting from
the implementation of new business strategies, divestitures or
current and proposed restructuring activities; (24) our ability to
successfully implement further acquisitions or dispositions and the
impact of any such transactions on our financial performance; (25)
the unanticipated loss of key members of senior management and the
transition of new members of our management teams to their new
roles; (26) the effects of political or economic conditions,
terrorist attacks, acts of war, natural disasters, public health
concerns (including the impact of COVID-19) or other unrest in
international markets; and (27) the other risk factors set forth in
the securities filings of Spectrum Brands Holdings, Inc., including
the most recently filed Annual Report on Form 10-K and subsequent
Quarterly Report(s) on Form 10-Q.
Spectrum Brands also cautions the reader that its estimates of
trends, market share, retail consumption of its products and
reasons for changes in such consumption are based solely on limited
data available to Spectrum Brands and management’s reasonable
assumptions about market conditions, and consequently may be
inaccurate, or may not reflect significant segments of the retail
market. Spectrum Brands also cautions the reader that undue
reliance should not be placed on any forward-looking statements,
which speak only as of the date of this release. Spectrum Brands
undertakes no duty or responsibility to update any of these
forward-looking statements to reflect events or circumstances after
the date of this report or to reflect actual outcomes.
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version on businesswire.com: https://www.businesswire.com/news/home/20200219005321/en/
Investor/Media Contacts: Kevin Kim 608-278-6148
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