SPECTRUM BRANDS HOLDINGS, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

Introduction

The following is management's discussion of the financial results, liquidity and
other key items related to our performance and should be read in conjunction
with the Condensed Consolidated Financial Statements and related notes included
in Item 1 of this Quarterly Report on Form 10-Q. Unless the context indicates
otherwise, the term the "Company," "we," "our," or "us" are used to refer to
Spectrum Brands Holdings, Inc. and its subsidiaries ("SBH") and SB/RH Holdings,
LLC and its subsidiaries ("SB/RH"), collectively.

Company overview

The Company is a diversified global branded consumer products company.  We
manage the businesses in three vertically integrated, product-focused segments:
(i) Home and Personal Care ("HPC"), (ii) Global Pet Care ("GPC"), and (iii) Home
and Garden ("H&G"). The Company manufactures, markets and/or distributes its
products globally in the North America ("NA"), Europe, Middle East & Africa
("EMEA"), Latin America ("LATAM") and Asia-Pacific ("APAC") regions through a
variety of trade channels, including retailers, wholesalers and distributors. We
enjoy strong name recognition in our regions under our various brands and
patented technologies across multiple product categories. Global and geographic
strategic initiatives and financial objectives 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 sales and marketing initiatives and financial results for all
product lines within that segment, on a global basis. The segments are supported
through center-led shared service operations and enabling functions consisting
of finance and accounting, information technology, legal, human resources,
supply chain, and commercial operations. See Note 18 - Segment Information for
more information pertaining to segments of continuing operations. The following
is an overview of the consolidated business, by segment, summarizing product
types and brands:

  Segment                               Products                                             Brands

HPC                Home Appliances: Small kitchen appliances including      

Appliances: Black & Decker®,

                   toaster ovens, coffeemakers, slow cookers,               

Russell Hobbs®, George Foreman®,

                   blenders, hand mixers, grills, food processors,          

PowerXL®, Emeril Legasse®, Copper Chef

                   juicers, toasters, irons, kettles, bread makers,         

®, Toastmaster®, Juiceman®,

                   cookware, and cookbooks.                                 

Farberware® and Breadman®

                   Personal Care: Hair dryers, flat irons and               

Personal Care: Remington®, and

                   straighteners, rotary and foil electric shavers,          LumaBella®
                   personal groomers, mustache and beard trimmers,
                   body groomers, nose and ear trimmers, women's
                   shavers, and haircut kits.
GPC                Companion Animal: Rawhide chews, dog and cat            

Pet: 8IN1® (8-in-1),

                   clean-up, training, health and grooming products,        

Dingo®, Nature’s Miracle®, Wild

                   small animal food and care products, rawhide-free        

Harvest™, Littermaid®, Jungle®, Excel®,

                   dog treats, and wet and dry pet food for dogs and        

FURminator®, IAMS® (Europe only),

                   cats.                                                    

Eukanuba® (Europe only), Healthy-Hide®,

                   Aquatics: Consumer and commercial aquarium kits,         

DreamBone®, SmartBones®, ProSense®,

                   stand-alone tanks; aquatics equipment such as            

Perfect Coat®, eCOTRITION®, Birdola®,

                   filtration systems, heaters and pumps; and aquatics      

Good Boy®, Meowee!®, Wildbird® and

                   consumables such as fish food, water management and      

Wafcol®

                   care.                                                    

Aquatic: Tetra®, Marineland®,

Whisper®, Instant Ocean®, GloFish®,

                                                                             OmegaOne® and OmegaSea®
H&G                Household: Household pest control solutions such as      

Household: Hot Shot®, Black Flag®,

                   spider and scorpion killers; ant and roach killers;      

Real-Kill®, Ultra-Kill®, The Ant Trap®

                   flying insect killers; insect foggers; wasp and          

(TAT) and Rid-A-Bug®.

                   hornet killers; and bedbug, flea and tick control        

Controls: Spectracide®, Garden Safe®,

                   products.                                                

Liquid Fence® and EcoLogic®.

                   Controls: Outdoor insect and weed control                

Repellents: Cutter® and Repel®.

                   solutions, and animal repellents such as aerosols,       

Cleaning: Rejuvenate®

                   granules, and ready-to-use sprays or hose-end
                   ready-to-sprays.
                   Repellents: Personal use pesticides and insect
                   repellent products, including aerosols, lotions,
                   pump sprays and wipes, yard sprays and citronella
                   candles.
                   Cleaning: Household surface cleaning, maintenance,
                   and restoration products, including bottled
                   liquids, mops, wipes and markers.


The Company has a trademark license agreement (the "License Agreement") with
Stanley Black & Decker ("SBD") pursuant to which we license the Black & Decker®
(B&D) brand in North America, Latin America (excluding Brazil) and the Caribbean
for four core categories of household appliances within the Company's HPC
segment: beverage products, food preparation products, garment care products and
cooking products; which was set to expire December 31, 2021. The Company renewed
the License Agreement through June 30, 2025, including a sell-off period from
April 1, 2025 to June 30, 2025 whereby the Company can continue to sell and
distribute but no longer produce products subject to the License Agreement.
Under the terms of the License Agreement, we agree to pay SBD royalties based on
a percentage of sales, with minimum annual royalty payments of $15.0 million,
with the exception of the minimum annual royalty will no longer be applied
effective January 1, 2024 through the expiration of the agreement on June 30,
2025. The License Agreement also requires us to comply with maximum annual
return rates for products. Subsequent to the completion of the License
Agreement, there are no non-competition provisions or restrictions provided
following its expiration. See Note 5 - Revenue Recognition for further detail on
revenue concentration from B&D branded products.

On February 18, 2022, the Company acquired the home appliances and cookware
products sold under the PowerXL®, Emeril Legasse®, and Copper Chef® brands from
Tristar Products, Inc. (the "Tristar Business"). As part of the acquisition, the
PowerXL® and Copper Chef® brands were acquired outright by the Company while the
Emeril Legasse® brand remains subject to a trademark license agreement with the
license holder (the "Emeril License"). Pursuant to the Emeril License, the
Company will continue to license the Emeril Lagasse® brands within the US,
Canada, Mexico, and the United Kingdom for certain designated product categories
of household appliances within the HPC segment, including small kitchen food
preparation products, indoor and outdoor grills and grill accessories, and
cookbooks. The Emeril License is set to expire effective December 31, 2022 with
options up to three one-year renewal periods following the initial expiration.
Under the terms of the agreement, we agreed to pay the license holder a
percentage of sales, with minimum annual royalty payments of $1.5 million,
increasing to $1.8 million in subsequent renewal periods. See Note 3 -
Acquisitions for further detail on the Tristar Business acquisition.

On September 8, 2021, the Company entered into a definitive Asset and Stock
Purchase Agreement with ASSA ABLOY AB ("ASSA") to sell its Hardware and Home
Improvement ("HHI") segment for cash proceeds of $4.3 billion, subject to
customary purchase price adjustments. HHI consists of residential locksets and
door hardware, including knobs, levers, deadbolts, handle sets, and electronic
and connected locks under the Kwikset®, Weiser®, Baldwin®, Tell Manufacturing®,
and EZSET® brands; kitchen and bath faucets and accessories under the Pfister®
brand; and builders' hardware consisting of hinges, metal shapes, security
hardware, rack and sliding door hardware, and gate hardware under the National
Hardware® and FANAL® brands. The Company's assets and liabilities associated
with the HHI disposal group have been classified as held for sale and the HHI
operations have been classified as discontinued operations for all periods
presented and notes to the consolidated financial statements have been updated
for all periods presented to exclude information pertaining to discontinued
operations and reflect only the continuing operations of the Company. Refer to
Note 2 - Divestitures for more information on the HHI divestiture
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including the assets and liabilities classified as held for sale and income from
discontinued operations. The Company is engaged with antitrust regulators in the
ongoing regulatory review of the transaction and the Company is currently
working to respond to such regulators' requests for additional information.
Although the timing and outcome of the regulatory process cannot be predicted,
the Company currently expects the merger review process to last for several
months. As such, though there can be no assurance when the transaction will
close, if at all, the Company does not expect the transaction to close before
September 2022.

SB/RH is a wholly owned subsidiary of SBH. Spectrum Brands, Inc. ("SBI"), a
wholly-owned subsidiary of SB/RH incurred certain debt guaranteed by SB/RH and
domestic subsidiaries of SBI. See Note 10 - Debt for more information pertaining
to debt. The reportable segments of SB/RH are consistent with the segments of
SBH.

Acquisitions

The Company periodically evaluates strategic transactions that may result in the
acquisition of a business or assets that qualify as recognition of a business
combination. Acquisitions may impact the comparability of the consolidated or
segment financial information with the inclusion of operating results for the
acquired business in periods subsequent to acquisition date, the inclusion of
acquired assets, both tangible and intangible (including goodwill), and the
related amortization and depreciation of acquired assets. Moreover, the
comparability of consolidated or segment financial information may be impacted
by incremental costs to facilitate the transaction and supporting integration
activities of the acquired operations with the consolidated group. The following
acquisition activity may have a significant impact on the comparability of the
financial results on the condensed consolidated financial statements.

•On February 18, 2022, the Company acquired 100% of the Tristar Business for a
purchase price of $325.0 million, net of customary purchase price adjustments
and transaction costs. The Tristar Business includes a portfolio of home
appliances and cookware products sold under the PowerXL®, Emeril Legasse®, and
Copper Chef® brands. The net assets and operating results of the Tristar
Business are included in the Company's Condensed Consolidated Statements of
Income and reported within the HPC reporting segment for the three and six month
period ended April 3, 2022.

•On May 28, 2021, the Company acquired 100% of the membership interests in For
Life Products, LLC ("FLP") for a purchase price of $301.5 million. FLP is a
manufacturer of household cleaning, maintenance, and restoration products sold
under the Rejuvenate® brand. The net assets and operating results of FLP are
included in the Company's Condensed Consolidated Statements of Income and
reported within the H&G reporting segment for the three and six month periods
ended April 3, 2022.

•On October 26, 2020, the Company completed the acquisition of Armitage Pet Care
Ltd ("Armitage") for $187.7 million. Armitage is a premium pet treats and toys
business in Nottingham, United Kingdom including a portfolio of brands that
include Armitage's dog treats brand, Good Boy®, cat treats brand, Meowee!®, and
Wildbird® bird feed products, among others, that are predominantly sold within
the United Kingdom. The net assets and results of operations of Armitage are
included in the Company's Condensed Consolidated Statements of Income and
reported within the GPC reporting segment for the three and six month periods
ended April 3, 2022 and April 4, 2021, effective as of the acquisition date of
October 26, 2020.

See Note 3 – Acquisitions in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for more information.

Restructuring activity

We continually seek and develop operating strategies to improve our operational
efficiency, match our capacity and product costs to market demand and better
utilize our manufacturing and distribution resources in order to reduce costs,
increase revenues, increase or maintain our current profit margins. We have
undertaken various initiatives to reduce manufacturing and operating costs,
which may have a significant impact on the comparability of financial results on
the condensed consolidated financial statements. See Note 4 - Restructuring and
Related Charges in the Notes to the Condensed Consolidated Financial Statements,
included elsewhere in this Quarterly Report for more information.

These changes and updates are inherently difficult and are made even more
difficult by current global economic conditions. Our ability to achieve the
anticipated cost savings and other benefits from such operating strategies may
be affected by a number of other macro-economic factors such as COVID-19, or
inflation increased interest rates many of which are beyond or control.

Refinancing activity

Financing activity during and between comparable periods may have a significant
impact on the comparability of financial results on the condensed consolidated
financial statements.

•On February 3, 2022, the Company entered into the third amendment to the Credit
Agreement that provides for incremental capacity on the Revolver Facility of
$500 million that was used to support the acquisition of the Tristar Business
and the continuing operations and working capital requirements of the Company.
Borrowings under the incremental capacity are subject to a borrowing rate which
is subject to SOFR plus margin ranging from 1.75% to 2.75%, per annum or base
rate plus margin ranging from 0.75% to 1.75% per annum, with an increase by 25
basis points 270 days after the effective date of the third amendment and an
additional 25 basis points on each 90 day anniversary of such date.

•During the year ended September 30, 2021, the Company completed its offering of
$500.0 million aggregate principal amount of its 3.875% Notes and entered into a
new Term Loan Facility in the aggregate principal amount of $400.0 million on
March 3, 2021. The Company also redeemed $250.0 million of the 6.125% Notes and
$550.0 million of the 5.75% Notes, with a call premium of $23.4 million and
non-cash write-off of unamortized debt issuance costs of $7.9 million recognized
as interest expense.

Russia-Ukraine War

The impacts of the Russia-Ukraine war and the sanctions imposed by other nations
in response to the conflict are evolving and may have an impact on the Company's
consolidated operations and cash flow attributable to operations and
distribution within the region. The Company does not maintain a significant
level of operations within Ukraine and continues to evaluate its strategy with
Russia and the existing operations within the territory. The Company does not
maintain material assets within Russia, and the Company's assets in Russia
consist mostly of working capital associated with the in-country distribution
operations. In response to matters within the territory, we have adjusted our
risks associated with the collectibility and realizable value for working
capital within the region. Depending on the strategic direction we take towards
our existing operations in Russia, there may be incremental restructuring costs
or potential impairments to remediate.
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COVID-19[feminine]

The COVID-19 pandemic and the resulting regulations continue to cause economic
and social disruptions that contribute to ongoing uncertainties and may have an
impact on the operations, cash flow and net assets of the Company. Such impacts
may include, but are not limited to, volatility of demand for our products;
disruptions and cost implications in manufacturing and supply arrangements;
inability of third parties to meet obligations under existing arrangements; and
significant changes to the political and economic environments in which we
manufacture, sell, and distribute our products. The Company expects a
significant continuing inflationary environment, marked with higher
manufacturing, employment, and logistics costs as well as continued constraints
with transportation and supply chain disruptions. Additionally, there have also
been changes in consumer needs and spending during the COVID-19 pandemic, and
while demand for our products remain strong, our teams continue to monitor
demand shifts and there can be no assurance as to the level of demand that will
prevail throughout the fiscal year. We believe the severity and duration of the
COVID-19 pandemic to be uncertain and may contribute to retail volatility and
consumer purchase behavior changes.

The COVID-19 pandemic has not had a materially negative impact on the Company's
liquidity position and we have not observed any material impairments. We
continue to actively monitor our global cash and liquidity, and if necessary,
could reinitiate mitigating efforts to manage non-critical spending and assess
operating spend to preserve cash and liquidity. We continue to generate
operating cash flows to meet our short-term liquidity needs, and we expect to
maintain access to the capital markets, although there can be no assurance of
our ability to do so. We expect the ultimate significance of the impact on our
financial condition, results of operations, and cash flows will be dictated by
the length of time that such circumstances continue, which will ultimately
depend on the unforeseeable duration and severity of the COVID-19 pandemic, the
emergence of variants and the effectiveness of vaccines against these variants,
and any governmental and public actions taken in response.

Inflation and Supply Chain Constraints

While certain aspects of our financial results have been favorably impacted by
increased demand attributable to the COVID-19 pandemic, in addition to favorable
consumer conditions including incremental financial assistance provided by
various government agencies, our business continues to experience challenges
towards product availability to meet customer demand. We have experienced
increased labor shortages in the wake of the COVID-19 pandemic resulting in
transportation and supply chain disruptions. Together with labor shortages and
higher demand for talent, the current economic environment is driving higher
wages. Our ability to meet labor needs, control wage and labor-related costs and
minimize labor disruptions will be key to our success of operating our business
and executing our business strategies. Furthermore, our business is experiencing
an inflationary environment, which has negatively impacted our gross margin
rates. We are unable to predict how long the current inflationary environment,
including increased energy costs, will continue. Additionally, we have
experienced further supply chain disruptions from unanticipated shutdowns in our
supply base and limitations within transportation and logistics impacting
availability and increasing freight costs within the overall global supply
chain. We expect the economic environment to remain uncertain as we navigate the
current geopolitical environment, the COVID-19 pandemic, labor challenges,
supply chain constraints and the current inflationary environment, including
increasing energy and commodity prices.


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Non-GAAP Measures

Our consolidated and segment results contain non-GAAP metrics such as organic
net sales, and adjusted EBITDA ("Earnings Before Interest, Taxes, Depreciation,
Amortization") and adjusted EBITDA margin. While we believe organic net sales
and adjusted EBITDA are useful supplemental information, such adjusted results
are not intended to replace our financial results in accordance with Accounting
Principles Generally Accepted in the United States ("GAAP") and should be read
in conjunction with those GAAP results.

Organic Net Sales. We define organic net sales as net sales excluding the effect
of changes in foreign currency exchange rates and impact from acquisitions (when
applicable). We believe this non-GAAP measure provides useful information to
investors because it reflects regional and operating segment performance from
our activities without the effect of changes in currency exchange rates and
acquisitions. We use organic net sales as one measure to monitor and evaluate
our regional and segment performance. Organic growth is calculated by comparing
organic net sales to net sales in the prior year. The effect of changes in
currency exchange rates is determined by translating the period's net sales
using the currency exchange rates that were in effect during the prior
comparative period. Net sales are attributed to the geographic regions based on
the country of destination. We exclude net sales from acquired businesses in the
current year for which there are no comparable sales in the prior year.

The following is a reconciliation of reported net sales to organic net sales for
the three and six month periods ended April 3, 2022 compared to net sales for
the three and six month periods ended April 4, 2021:

                                                                           April 3, 2022

Three Month Periods                                                        Net Sales
Ended                                               Effect of           Excluding Effect                                                      Net Sales
(in millions, except                               Changes in            of Changes in              Effect of               Organic           April 4,
%)                             Net Sales            Currency                Currency               Acquisitions            Net Sales            2021   
                Variance
HPC                          $    316.1          $       11.4          $         327.5          $         (35.8)         $    291.7          $  297.9          $  (6.2)           (2.1) %
GPC                               295.1                   5.6                    300.7                        -               300.7             293.6              7.1             2.4  %
H&G                               196.6                     -                    196.6                    (13.3)              183.3             168.8             14.5             8.6  %
Total                        $    807.8          $       17.0          $         824.8          $         (49.1)         $    775.7          $  760.3             15.4             2.0  %


                                                                                     April 3, 2022
                                                                                      Net Sales
                                                               Effect of          Excluding Effect
Six Month Periods Ended                                       Changes in            of Changes in             Effect of              Organic              Net Sales
(in millions, except %)                   Net Sales            Currency               Currency               Acquisitions           Net Sales           April 4, 2021                   Variance
HPC                                      $   695.8          $       16.4          $        712.2          $         (35.8)         $   676.4          $        676.4          $    -                  -  %
GPC                                          597.3                   7.8                   605.1                     (8.8)             596.3                   569.1            27.2                4.8  %
H&G                                          271.9                     -                   271.9                    (21.1)             250.8                   251.0            (0.2)              (0.1) %
Total                                    $ 1,565.0          $       24.2          $      1,589.2          $         (65.7)         $ 1,523.5          $      1,496.5            27.0                1.8  %


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Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and Adjusted EBITDA
Margin are non-GAAP measures used by management, which we believe provide useful
information to investors because they reflect ongoing operating performance and
trends of our segments, excluding certain non-cash based expenses and/or
non-recurring items during each of the comparable periods. They also facilitate
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 is also used for
determining compliance with the Company's debt covenants. EBITDA is calculated
by excluding the Company's income tax expense, interest expense, depreciation
expense and amortization expense (from intangible assets) from net income.
Adjusted EBITDA further excludes:

•Stock based compensation costs consist of costs associated with long-term
incentive compensation arrangements that generally consist of non-cash,
stock-based compensation. During the six month period ended April 4, 2021,
compensation costs included incentive bridge awards previously issued due to
changes in the Company's LTIP that allowed for cash based payment upon employee
election but do not qualify for shared-based compensation, which were fully
vested in November 2020. See Note 14 - Share Based Compensation in the Notes to
the Condensed Consolidated Financial Statements, included elsewhere in this
Quarterly Report, for further details;

•Restructuring and related charges consist of project costs associated with the
restructuring initiatives across the Company's segments. See Note 4 -
Restructuring and Related Charges in the Notes to the Condensed Consolidated
Financial Statements, included elsewhere in this Quarterly Report, for further
details;

•Transaction related charges are attributable to costs from qualifying strategic
transaction or business opportunities, including an acquisition or divestiture,
whether or not consummated, subsequent integration related project costs,
divestiture support and incremental separation costs. See Note 1 - Basis of
Presentation & Significant Accounting Policies in the Notes to the Condensed
Consolidated Financial Statements, included elsewhere in this Quarterly Report,
for further details;

•Incremental costs towards the SAP S/4 HANA ERP transformation to implement our
enterprise-wide operating systems to SAP S/4 HANA on a global basis. This is a
multi-year project that includes various costs, including software configuration
and implementation costs that would be recognized as capital expenditures or
deferred costs in accordance with applicable accounting policies, with certain
costs recognized as operating expense associated with project development and
management costs, and professional services with business partners engaged
towards planning, design and business process review that would not qualify as
software implementation costs. The Company has substantially completed the
design phase of the project and is currently moving into the build phase:

•Unallocated shared costs associated with discontinued operations from certain
shared and center-led administrative functions the Company's business units
excluded from income from discontinued operations as they are not a direct cost
of the discontinued business but a result of indirect allocations, including but
not limited to, information technology, human resources, finance and accounting,
supply chain, and commercial operations. Amounts attributable to unallocated
shared costs would be mitigated through subsequent strategic or restructuring
initiatives, TSAs, elimination of extraneous costs, or re-allocations or
absorption of existing continuing operations following the completed sale of the
discontinued operations. See Note 2 - Divestitures in Notes to the Condensed
Consolidated Financial Statements, included elsewhere in this Quarterly Report
for further details;

•Non-cash purchase accounting adjustments recognized in earnings from continuing
operations subsequent to an acquisition, including, but not limited to, the
costs attributable to the step-up in inventory value and the incremental value
in ROU operating lease assets with below market rent, among others;

• Impairment or write-off of non-cash assets realized and recognized in profit or loss from continuing operations;

•Gains attributable to the Company's investment in Energizer common stock during
the three and six month periods ended April 4, 2021. with such remaining shares
sold in January 2021. See Note 12 - Fair Value of Financial Instruments in the
Notes to the Condensed Consolidated Financial Statements, included elsewhere in
this Quarterly Report, for further details;

•Incremental reserves for non-recurring litigation or environmental remediation
activity including the proposed settlement on outstanding litigation matters at
our H&G division attributable to significant and unusual nonrecurring claims
with no previous history or precedent recognized during the six month period
ended April 4, 2021 and the subsequent remeasurement during the six month period
ended April 3, 2022;

•Incremental costs realized under a three-year tolling agreement entered into
with the buyer in consideration with the divestiture of the Coevorden Operations
on March 29, 2020, for the continued production of dog and cat food products
purchased to support the GPC commercial operations and distribution in Europe;
and

•Other adjustments are primarily attributable to: (1) incremental trade spend
reserves realized from the transition and integration of the Rejuvenate business
into the H&G segment and the Company's systems and processes during the three
and six month periods ended April 3, 2022, (2) incremental fines and penalties
for delayed shipments attributable to the GPC distribution transition initiative
during the three and six month periods ended April 3, 2022, and (3) costs
associated with Salus as they are not considered a component of the continuing
commercial products company.

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

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The following is a reconciliation of net earnings and adjusted EBITDA for the three-month periods ended April 3, 2022 and April 4, 2021 for SBH.

SPECTRUM BRANDS HOLDINGS, INC.                  HPC               GPC               H&G             Corporate          Consolidated
(in millions)
Three Month Period Ended April 3,
2022
Net (loss) income from continuing           $  (19.1)         $   19.0          $   30.4          $    (55.4)         $     (25.1)
operations
Income tax benefit                                 -                 -                 -                (6.8)                (6.8)
Interest expense                                   -                 -                 -                24.7                 24.7
Depreciation and amortization                    8.1               9.3               4.7                 3.6                 25.7
EBITDA                                         (11.0)             28.3              35.1               (33.9)                18.5
Share and incentive based                          -                 -                 -                 6.6                  6.6

compensation

Restructuring and related charges                3.7               8.2                 -                 4.5                 16.4
Transaction related charges                     14.4               1.2               1.9                 2.7                 20.2
Global ERP Transformation                          -                 -                 -                 3.2                  3.2
Unallocated shared costs                           -                 -                 -                 6.9                  6.9
Non-cash purchase accounting                     3.5                 -                 -                   -                  3.5

adjustments

Coevorden tolling related charges                  -               1.5                 -                   -                  1.5
Other                                              -               1.4               0.7                 0.1                  2.2
Adjusted EBITDA                             $   10.6          $   40.6          $   37.7          $     (9.9)         $      79.0
Net Sales                                   $  316.1          $  295.1          $  196.6          $        -          $     807.8
Adjusted EBITDA Margin                           3.4  %           13.8  %           19.2  %                -                  9.8  %
Three Month Period Ended April 4,
2021
Net income (loss) from continuing           $   11.0          $   38.7          $   29.9          $    (84.2)         $      (4.6)
operations
Income tax benefit                                 -                 -                 -                (0.7)                (0.7)
Interest expense                                   -                 -                 -                52.8                 52.8
Depreciation and amortization                   11.8               9.6               4.9                 3.9                 30.2
EBITDA                                          22.8              48.3              34.8               (28.2)                77.7
Share and incentive based                          -                 -                 -                 7.2                  7.2

compensation

Restructuring and related charges                1.5               0.6                 -                 2.2                  4.3
Transaction related charges                      1.1               2.6                 -                 4.5                  8.2
Unallocated shared costs                           -                 -                 -                 6.7                  6.7
Non-cash purchase accounting                       -               2.6                 -                   -                  2.6

adjustments

Gain on Energizer investment                       -                 -                 -                (0.9)                (0.9)

Coevorden tolling related charges                  -               1.5                 -                   -                  1.5
Other                                              -                 -                 -                 0.2                  0.2
Adjusted EBITDA                             $   25.4          $   55.6          $   34.8          $     (8.3)         $     107.5
Net Sales                                   $  297.9          $  293.6          $  168.8          $        -          $     760.3
Adjusted EBITDA Margin                           8.5  %           18.9  %           20.6  %                -                 14.1  %


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The following is a reconciliation of net earnings and adjusted EBITDA for the six-month periods ended April 3, 2022 and April 4, 2021 for SBH.

SPECTRUM BRANDS HOLDINGS, INC.                        HPC               GPC               H&G            Corporate          Consolidated
(in millions)
Six Month Period Ended April 3, 2022
Net income (loss) from continuing
operations                                        $      -          $   30.6          $   14.6          $  (100.5)         $      (55.3)
Income tax benefit                                       -                 -                 -              (22.8)                (22.8)
Interest expense                                         -                 -                 -               46.4                  46.4
Depreciation and amortization                         15.8              18.6               9.3                7.4                  51.1
EBITDA                                                15.8              49.2              23.9              (69.5)                 19.4
Share and incentive based
compensation                                             -                 -                 -               12.2                  12.2
Restructuring and related charges                      4.3              19.6                 -                9.9                  33.8
Transaction related charges                           14.4               3.6               6.3               10.8                  35.1
Global ERP Transformation                                -                 -                 -                3.2                   3.2
Unallocated shared costs                                 -                 -                 -               13.8                  13.8
Non-cash purchase accounting
adjustments                                            3.5                 -                 -                  -                   3.5
Legal and environmental remediation
reserves                                                 -                 -              (0.5)                 -                  (0.5)
Coevorden tolling related charges                        -               3.0                 -                  -                   3.0
Other                                                    -               3.9               0.7                0.2                   4.8
Adjusted EBITDA                                   $   38.0          $   79.3          $   30.4          $   (19.4)         $      128.3
Net Sales                                         $  695.8          $  597.3          $  271.9          $       -          $    1,565.0
Adjusted EBITDA Margin                                 5.5  %           13.3  %           11.2  %               -                   8.2  %
Six Month Period Ended April 4, 2021
Net income (loss) from continuing                 $   49.2          $   72.7          $   29.4          $  (140.2)         $       11.1
operations
Income tax benefit                                       -                 -                 -               (4.8)                 (4.8)
Interest expense                                         -                 -                 -               76.0                  76.0
Depreciation and amortization                         20.6              19.3               9.9                7.4                  57.2
EBITDA                                                69.8              92.0              39.3              (61.6)                139.5
Share and incentive based                                -                 -                 -               14.2                  14.2
compensation
Restructuring and related charges                      4.1               2.1                 -                7.1                  13.3
Transaction related charges                            2.4               8.6                 -               16.2                  27.2
Unallocated shared costs                                 -                 -                 -               13.4                  13.4
Non-cash purchase accounting                             -               3.4                 -                  -                   3.4
adjustments
Gain on Energizer investment                             -                 -                 -               (6.9)                 (6.9)
Legal and environmental remediation                      -                 -               6.0                  -                   6.0

reservations

Coevorden tolling related charges                        -               3.1                 -                  -                   3.1
Other                                                    -                 -                 -                0.1                   0.1
Adjusted EBITDA                                   $   76.3          $  109.2          $   45.3          $   (17.5)         $      213.3
Net Sales                                         $  676.4          $  569.1          $  251.0          $       -          $    1,496.5
Adjusted EBITDA Margin                                11.3  %           19.2  %           18.0  %               -                  14.3  %


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Contents

The following is a reconciliation of net earnings and adjusted EBITDA for the three-month periods ended April 3, 2022 and April 4, 2021 for SB/RH.

SB/RH HOLDINGS, LLC                             HPC               GPC               H&G             Corporate          Consolidated
(in millions)
Three Month Period Ended April 3,
2022
Net (loss) income from continuing           $  (19.1)         $   19.0          $   30.4          $    (54.9)         $     (24.6)
operations
Income tax benefit                                 -                 -                 -                (6.6)                (6.6)
Interest expense                                   -                 -                 -                24.8                 24.8
Depreciation and amortization                    8.1               9.3               4.7                 3.6                 25.7
EBITDA                                         (11.0)             28.3              35.1               (33.1)                19.3
Share and incentive based                          -                 -                 -                 6.2                  6.2

compensation

Restructuring and related charges                3.7               8.2                 -                 4.5                 16.4
Transaction related charges                     14.4               1.2               1.9                 2.7                 20.2
Global ERP Transformation                          -                 -                 -                 3.2                  3.2
Unallocated shared costs                           -                 -                 -                 6.9                  6.9
Non-cash purchase accounting                     3.5                 -                 -                   -                  3.5

adjustments

Coevorden tolling related charges                  -               1.5                 -                   -                  1.5
Other                                              -               1.4               0.7                   -                  2.1
Adjusted EBITDA                             $   10.6          $   40.6          $   37.7          $     (9.6)         $      79.3
Net Sales                                   $  316.1          $  295.1          $  196.6          $        -          $     807.8
Adjusted EBITDA Margin                           3.4  %           13.8  %           19.2  %                -                  9.8  %
Three Month Period Ended April 4,
2021
Net income (loss) from continuing           $   11.0          $   38.7          $   29.9          $    (83.8)         $      (4.2)
operations
Income tax benefit                                 -                 -                 -                (0.5)                (0.5)
Interest expense                                   -                 -                 -                52.9                 52.9
Depreciation and amortization                   11.8               9.6               4.9                 3.9                 30.2
EBITDA                                          22.8              48.3              34.8               (27.5)                78.4
Share and incentive based                          -                 -                 -                 6.8                  6.8

compensation

Restructuring and related charges                1.5               0.6                 -                 2.2                  4.3
Transaction related charges                      1.1               2.6                 -                 4.5                  8.2
Unallocated shared costs                           -                 -                 -                 6.7                  6.7
Non-cash purchase accounting                       -               2.6                 -                   -                  2.6

adjustments

Gain on Energizer investment                       -                 -                 -                (0.9)                (0.9)

Coevorden tolling related charges                  -               1.5                 -                   -                  1.5
Other                                              -                 -                 -                 0.1                  0.1
Adjusted EBITDA                             $   25.4          $   55.6          $   34.8          $     (8.1)         $     107.7
Net Sales                                   $  297.9          $  293.6          $  168.8          $        -          $     760.3
Adjusted EBITDA Margin                           8.5  %           18.9  %           20.6  %                -                 14.2  %


                                       38
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  Table of Contents
The following is a reconciliation of net income to Adjusted EBITDA for the six
month periods ended April 3, 2022 and April 4, 2021 for SB/RH.
SB/RH HOLDINGS, LLC                             HPC               GPC               H&G            Corporate          Consolidated
(in millions)
Six Month Period Ended April 3, 2022
Net income (loss) from continuing           $      -          $   30.6          $   14.6          $   (99.9)         $      (54.7)
operations
Income tax benefit                                 -                 -                 -              (22.4)                (22.4)
Interest expense                                   -                 -                 -               46.7                  46.7
Depreciation and amortization                   15.8              18.6               9.3                7.4                  51.1
EBITDA                                          15.8              49.2              23.9              (68.2)                 20.7
Share based compensation                           -                 -                 -               11.8                  11.8
Restructuring and related charges                4.3              19.6                 -                9.9                  33.8
Transaction related charges                     14.4               3.6               6.3               10.8                  35.1
SAP S/4 HANA ERP Transformation                    -                 -                 -                3.2                   3.2
Unallocated shared costs                           -                 -                 -               13.8                  13.8
Non-cash purchase accounting                     3.5                 -                 -                  -                   3.5

adjustments

Legal and environmental remediation                -                 -              (0.5)                 -                  (0.5)

reservations

Coevorden tolling related charges                  -               3.0                 -                  -                   3.0
Other                                              -               3.9               0.7               (0.2)                  4.4
Adjusted EBITDA                             $   38.0          $   79.3          $   30.4          $   (18.9)         $      128.8
Net Sales                                   $  695.8          $  597.3          $  271.9          $       -          $    1,565.0
Adjusted EBITDA Margin                           5.5  %           13.3  %           11.2  %               -                   8.2  %
Six Month Period Ended April 4, 2021
Net income (loss) from continuing           $   49.2          $   72.7          $   29.4          $  (139.3)         $       12.0
operations
Income tax benefit                                 -                 -                 -               (4.4)                 (4.4)
Interest expense                                   -                 -                 -               76.1                  76.1
Depreciation and amortization                   20.6              19.3               9.9                7.4                  57.2
EBITDA                                          69.8              92.0              39.3              (60.2)                140.9
Share and incentive based                          -                 -                 -               13.6                  13.6

compensation

Restructuring and related charges                4.1               2.1                 -                7.1                  13.3
Transaction related charges                      2.4               8.6                 -               16.2                  27.2
Unallocated shared costs                           -                 -                 -               13.4                  13.4
Non-cash purchase accounting                       -               3.4                 -                  -                   3.4

adjustments

Gain on Energizer investment                       -                 -                 -               (6.9)                 (6.9)
Legal and environmental remediation                -                 -               6.0                  -                   6.0

reservations

Coevorden tolling related charges                  -               3.1                 -                  -                   3.1
Other                                              -                 -                 -                0.1                   0.1
Adjusted EBITDA                             $   76.3          $  109.2          $   45.3          $   (16.7)         $      214.1
Net Sales                                   $  676.4          $  569.1          $  251.0          $       -          $    1,496.5
Adjusted EBITDA Margin                          11.3  %           19.2  %           18.0  %               -                  14.3  %



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