Spectrum Brands Holdings Inc

Previous wording

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.

Current wording

Unless the context indicates otherwise, the term the "Company," "we," "us," or "our" are used to refer to Spectrum Brands Holdings, Inc. and its subsidiaries collectively.

Previous wording

The following is a reconciliation of reported net sales to organic net sales for the three and six month period ended March 31, 2024 compared to net sales for the three and six month period ended April 2, 2023:

Current wording

The following is a reconciliation of reported net sales to organic net sales for the three and nine month period ended June 30, 2024 compared to net sales for the three and nine month period ended July 2, 2023:

Previous wording

•Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value and the incremental value in operating lease assets with below market rent, among others During the three and six month periods ended March 31, 2024 and April 2, 2023, the Company recognized non-cash expense due to the incremental value recognized as part of the Tristar Business acquisition on right of use operating leases with below market rent;

Current wording

•Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value, and the incremental value in operating lease assets with below market rent, among others. During the three and nine month periods ended June 30, 2024 and July 2, 2023, the Company recognized non-cash expense due to the incremental value recognized as part of the Tristar Business acquisition on right of use operating leases with below market rent;

Previous wording

•Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations, including impairments from property, plant and equipment, operating and finance leases, and goodwill and other intangible assets, when applicable. During the three and six month period ended March 31, 2024, the Company recognized impairments of its Rejuvenate® and a non-core HPC tradename indefinite lived intangible assets, along with an impairment charge on a right of use operating lease asset associated with an HPC facility that was exited prior to end of its term. See Note 7 - Goodwill and Intangibles in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details. During the three and six month period ended April 2, 2023, the Company recognized impairment of indefinite lived intangible assets for its Rejuvenate® and PowerXL® indefinite lived tradenames, along with an impairment on idle equipment associated with the early exit of a GPC warehouse lease and impairments on right of use operating lease assets associated with GPC and HPC facilities that were exited prior to the end of their term;

Current wording

•Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations, including impairments from property, plant and equipment, operating and finance leases, and goodwill and other intangible assets, when applicable. During the three month period ended June 30, 2024, the Company recognized impairment charges on a right of use operating lease asset associated with a HPC facility that was exited prior to the end of its term. See Note 6 - Property, Plant and Equipment in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further discussion. During the nine month period ended June 30, 2024, the Company recognized impairments of its Rejuvenate® and a non-core HPC tradename indefinite lived intangible assets, along with impairment charges on right of use operating lease assets associated with HPC distribution facilities that were exited prior to end of its term. See Note 7 - Goodwill and Intangiblesand Note 6 - Property Plant and Equipmentin Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further discussion. During the three and nine periods ended July 2, 2023, the Company recognized impairment of indefinite lived intangible assets for its Rejuvenate® and PowerXL® indefinite lived tradenames, along with an impairment on idle equipment associated with the early exit of a GPC warehouse lease and impairments on right of use operating lease assets associated with GPC and HPC facilities that were exited prior to the end of their term;

Previous wording

•Gain realized from proceeds received on the representation and warranties insurance policies associated with the Tristar Business acquisition. Refer to Note 15 - Commitment and Contingencies in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details.

Current wording

•Gain realized from proceeds received on the representation and warranties insurance policies associated with the Tristar Business acquisition realized during thenine month period ended June 30, 2024. Refer to Note 15 - Commitment and Contingencies, in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further details;

Previous wording

•Incremental reserves for non-recurring litigation or environmental remediation activity attributable to significant and unusual nonrecurring matters with no previous history or precedent. During the three and six month periods ended March 31, 2024, such costs were directly attributable to legal costs incurred for the proceeds received from the representation and warranties insurance policies associated with the Tristar Business acquisition. Refer to Note 15 - Commitment and Contingencies in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details;

Current wording

•Incremental reserves for non-recurring litigation or environmental remediation activity attributable to significant and unusual nonrecurring matters with no previous history or precedent. During the three and nine month periods ended June 30, 2024 and July 2, 2023, such costs were directly attributable to legal costs incurred for the proceeds received from the representation and warranties insurance policies associated with the Tristar Business acquisition. Refer to Note 15 - Commitment and Contingenciesin the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further details;

Previous wording

•Incremental costs associated with the recognition of product recall costs incurred by the HPC segment in collaboration with the CPSC, initiated at the end of the year ended September 30 2022 and during the year ended September 30, 2023, resulting in the accrual and recognition of incremental costs for the recall, product returns from customers, write-off of inventory on hand, and other costs such as notification, shipping and handling, rework and destruction of affected products, and consumer refunds, as needed. Such costs are not recurring and directly attributable to the recall event, excluding all other costs associated with product warranty and returns. During the three month period ended March 31, 2024, the Company was required by the CPSC to reissue a previously issued recall to provide a cash refund to customers, resulting in the recognition of incremental costs and reserves. Note 17 - Commitments and Contingenciesin Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details;

Current wording

•Incremental costs associated with the recognition of product recall costs incurred by the HPC segment in collaboration with the CPSC, initiated at the end of the year ended September 30 2022 and during the year ended September 30, 2023, resulting in the accrual and recognition of incremental costs for the recall, product returns from customers, write-off of inventory on hand, and other costs such as notification, shipping and handling, rework and destruction of affected products, and consumer refunds, as needed. Such costs are not recurring and directly attributable to the recall event, excluding all other costs associated with product warranty and returns. See Note 15 - Commitments and Contingenciesin the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further details;

Previous wording

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

Current wording

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

Previous wording

•For the three and six month periods ended April 2, 2023, the impact from the early settlement of foreign currency cash flow hedges during the year ended September 30, 2022, resulting in assumed losses at the original stated maturities of foreign currency cash flow hedges in our EMEA region that were settled early due to changes in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region, resulting in excluded gains intended to mitigate costs during the year ending September 30, 2023; and

Current wording

•For the three and nine month periods ended July 2, 2023, the impact from the early settlement of foreign currency cash flow hedges during the year ended September 30, 2022, resulting in assumed losses at the original stated maturities of foreign currency cash flow hedges in our EMEA region that were settled early due to changes in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region, resulting in excluded gains intended to mitigate costs during the year ending September 30, 2023; and

Previous wording

•Other adjustments are attributable to: (1) key executive severance and other one-time compensatory costs; and (2) non-recurring unusual insurable losses, including any the receipt of insurance proceeds or recovery realized.

Current wording

•Other adjustments are attributable to: (1) key executive severance and other one-time compensatory costs; and (2) non-recurring unusual insurable losses, including the receipt of related insurance proceeds.

Previous wording

The Company is a diversified global branded consumer products company. We manage the businesses in three vertically integrated, product-focused segments: (i) Global Pet Care (“GPC”), (ii) Home and Garden (“H&G”), and (iii) Home and Personal Care (“HPC”). 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. The following is an overview of the consolidated business, by segment, summarizing product categories and brands:

Current wording

The Company is a diversified global branded consumer products company. We manage the businesses in three vertically integrated, product-focused segments: (i) Global Pet Care (“GPC”), (ii) Home and Garden (“H&G”), and (iii) Home and Personal Care (“HPC”). 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 16 – Segment Information included in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for more information pertaining to segments of continuing operations. The following is an overview of the consolidated business, by segment, summarizing product categories and brands:

Previous wording

•Russia Closing Initiative -During the year ended September 30, 2022, the Company initiated the close of its commercial operations in Russia, predominantly supporting the HPC segment. The Company recognized impairment costs on working capital assets such as inventory and receivables that were not considered recoverable due to the restriction and suspension of commercial activity in Russia and has substantially liquidated all assets. Remaining costs primarily consist of administrative cost to dissolve the entity.

Current wording

•Russia Closing Initiative -During the year ended September 30, 2022, the Company initiated the close of its commercial operations in Russia, predominantly supporting the HPC segment. The Company recognized impairment costs on working capital assets such as inventory and receivables that were not considered recoverable due to the restriction and suspension of commercial activity in Russia and has substantially liquidated all assets. Remaining costs primarily consist of administrative cost towards dissolution of the subsidiary.

Previous wording

In addition to the initiatives discussed above, the Company regularly engages in other initiatives that may incur incremental costs which may not result in a realized transaction or are less significant initiatives and therefore have been separately disclosed and recognized as other project costs. The following is a summary of incremental costs for the three and six month periods ended March 31, 2024 and April 2, 2023.

Current wording

In addition to the initiatives discussed above, the Company regularly engages in other initiatives that may incur incremental costs which may not result in a realized transaction or are less significant initiatives and therefore have been separately disclosed and recognized as other project costs. The following is a summary of incremental costs for the three and nine month periods ended June 30, 2024 and July 2, 2023.

Previous wording

•Following the close of the HHI divestiture on June 20, 2023, the Company repaid its outstanding term loan and all outstanding borrowings with the Revolver Facility under the Credit Agreement, and terminated the Incremental Revolving Credit Facility Tranche, along with the remaining aggregate principal of its 5.750% Senior Notes due 2025 in full at the redemptions price and repurchased a portion of its remaining outstanding Senior Notes. The Company repurchased outstanding bonds at a discount recognizing a gain of $4.7 million during the six month period ended March 31, 2024.

Current wording

•Following the close of the HHI divestiture on June 20, 2023, the Company repaid its outstanding term loan and all outstanding borrowings with the Revolver Facility under the Credit Agreement, and terminated the Incremental Revolving Credit Facility Tranche, along with the remaining aggregate principal of its 5.750% Senior Notes due 2025 in full at the redemptions price and repurchased a portion of its remaining outstanding Senior Notes.

Previous wording

•During the three month period ended December 31, 2023, the Company entered into the Second Amended and Restated Credit Agreement (the "Credit Agreement"), refinancing the Company's previous credit agreement, extending maturity to October 19, 2028 and reduced capacity of the Revolver Facility to $500.0 million.

Current wording

•On October 19, 2023 the Company entered into the Second Amended and Restated Credit Agreement (the "Credit Agreement"), refinancing the Company's previous credit agreement, extending maturity to October 19, 2028 and reduced capacity of the Revolver Facility to $500.0 million.

Previous wording

The Company has experienced an inflationary environment on a global basis in the wake of the COVID-19 pandemic, geopolitical instability and supply chain constraints such as labor shortages, increased freight and distribution costs from transportation and logistics, higher commodity costs, rising energy pricing, and foreign currency volatility. 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. In response to inflation, our segments have taken pricing actions to address rising costs and foreign currency fluctuations to mitigate impacts to our margins. We can provide no assurance that such mitigation will be available in the future.

Current wording

The Company has experienced an inflationary environment on a global basis in the wake of the COVID-19 pandemic, geopolitical instability and supply chain constraints such as labor shortages, increased freight and distribution costs from transportation and logistics, higher commodity costs, rising energy pricing, and foreign currency volatility. Together with labor shortages and higher demand for talent, the current economic environment has driven 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. In response to inflation, our segments have taken pricing actions to address rising costs and foreign currency fluctuations to mitigate impacts to our margins. We can provide no assurance that such mitigation will be available in the future.

Previous wording

The following is summarized consolidated results of operations for SBH for the three and six month periods ended March 31, 2024 and April 2, 2023.

Current wording

The following is summarized consolidated results of operations for the three and nine month periods ended June 30, 2024 and July 2, 2023.

Previous wording

Net Sales. The following is a summary of net sales by segment for the three and six month periods ended March 31, 2024 and April 2, 2023, and the principal components of changes in net sales for the respective periods.

Current wording

Net Sales. The following is a summary of net sales by segment for the three and nine month periods ended June 30, 2024 and July 2, 2023, and the principal components of changes in net sales for the respective periods.

Previous wording

Gross Profit. The following is a summary of the gross profit and gross profit margin for the three and six month periods ended March 31, 2024 and April 2, 2023, respectively, and the principal factors contributing to the change for the three and six month periods.

Current wording

Gross Profit. The following is a summary of the gross profit and gross profit margin for the three and nine month periods ended June 30, 2024 and July 2, 2023, respectively, and the principal factors contributing to the change for the three and nine month periods.

Previous wording

Gross profit and margin increases are predominantly due to the cost improvements initiatives and the higher inflated inventoried costs that were realized during the prior periods with favorable mix. Despite reduced volumes, gross profit benefited from the improved mix realized by previous SKU rationalization initiatives and reduction in excess inventory sales. The impact from product recalls is due to the reissued product safety recall with the CPSC recognized during the three period ended March 31, 2024, further discussed in Note 15 - Commitments and Contingencies within Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Current wording

Gross profit and margin increases during the three and nine month periods are predominantly due to the lower cost inventory in the current periods with higher inflated inventoried costs that were realized during the prior periods and improved volume further contributing gross profit and margins. Price and mix did not substantively impact gross profit within the three and nine month periods, with some benefit realized within the nine month period from SKU rationalization initiatives earlier in the prior year and overall reduction in excess inventory sales. The impact from product recalls is due to a reissued product safety recall with the CPSC recognized during the nine period ended June 30, 2024, further discussed in Note 15 - Commitments and Contingencies within Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report. Gross profit was also further benefited by the reduced costs towards restructuring and optimization initiatives.

Previous wording

Selling, general and administrative. The following summarizes the selling, general & administrative costs for the three and six month periods ended March 31, 2024 and April 2, 2023, respectively, including amounts as a percentage of net sales for each respective period.

Current wording

Selling, general and administrative. The following summarizes the selling, general & administrative costs for the three and nine month periods ended June 30, 2024 and July 2, 2023, respectively, including amounts as a percentage of net sales for each respective period.

Previous wording

Increase in sales, marketing and advertising costs for the three and six month periods are due to the investment towards brand marketing and advertising initiatives across segments plus increased incentive compensation costs from higher than expected results. Distribution costs for the three and six month periods decreased due to the improved optimization and fulfillment at our distribution centers and lower outbound freight costs. General & administrative costs for the three and six month periods increased due to higher incentive compensation costs, partially offset by lowered overhead costs from restructuring initiatives in the prior year, plus decrease in bank fees related to reduced factoring on trade receivables. Increased research & development costs for the three and six month periods ended March 31, 2024 are from an additional investment in new product development and innovation across segments. Reduced strategic transaction, restructuring and optimization is primarily due to reduced restructuring initiative spending, completion of Tristar Business integration and other non-recurring HPC transformation initiatives in the prior year.

Current wording

The increase in sales, marketing and advertising costs for both the three and nine month periods are due to the Company's investment towards brand marketing and advertising initiatives across all segments plus increased incentive compensation costs from higher than expected operating performance results. Distribution costs for the three month period were consistent to the prior year, but decreased relative to sales due to improved optimization and fulfillment at our distribution centers. Distribution costs for the nine month period decreased due to the improved optimization and fulfillment and decreased outbound freight costs compared to the prior nine month period. General & administrative costs for the three and nine month periods increased due to increased incentive compensation costs, partially offset by lowered overhead costs from prior year restructuring initiatives and decrease in bank fees related to reduced factoring on trade receivables. Increased research & development costs for the three and nine month periods are from the additional investment in new product development and innovation across all segments. Strategic transaction, restructuring and optimization costs for the three month period is consistent to the prior year with the close of the HHI divestiture in June 2023 compared to HPC separation initiatives in the current period. Strategic transaction, restructuring and optimization costs decreased due to reduced restructuring initiative spending with the completion of Tristar Business integration and other non-recurring HPC transformation initiatives that were not recurring in the current period.

Previous wording

Impairment of Intangible Assets. Impairment of intangible assets during the three and six month period ended March 31, 2024 was attributable to a triggering event during the three month period ended March 31, 2024 resulting in an impairment of indefinite lived tradenames. See Note 7 - Goodwill and Intangible Assetsin Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail. Impairment of intangible assets during the three and six month period ended April 2, 2023 were attributable to the identification of a triggering event resulting in an impairment of the Rejuvenate® and PowerXL® indefinite lived tradenames in the prior period.

Current wording

Impairment of Goodwill and Intangible Assets. Impairment of goodwill and intangible assets during the three month period ended July 2, 2023 was attributable to the impairment of the HPC reporting unit goodwill and the impairment of indefinite lived intangible assets associated with the Rejuvenate®, PowerXL® and George Foreman® tradenames without comparative impairment charges recognized in the three month period ended June 30, 2024. Impairment of intangible assets during the nine month period ended June 30, 2024 was attributable to triggering events earlier in the year resulting in impairment charges for the Rejuvenate® tradename and a non-core strategic tradename with impairment charges from the HPC reporting unit goodwill and the indefinite lived intangible assets for the Rejuvenate®, PowerXL® and George Foreman® tradenames realized in the prior year during the nine month period July 2, 2023. See Note 7 - Goodwill and Intangible Assetsin Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Previous wording

Representation and Warranty Insurance Proceeds. During the three and six month periods ended March 31, 2024, the Company recognized a gain of $65.0 million from its representation and warranty insurance policy associated with the Tristar Business acquisition. See Note 15 - Commitments and Contingenciesin Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Current wording

Representation and Warranty Insurance Proceeds. During the nine month period ended June 30, 2024, the Company recognized a gain of $65.0 million from its representation and warranty insurance policy associated with the Tristar Business acquisition. See Note 15 - Commitments and Contingenciesin Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Previous wording

Interest Expense. Interest expense decreased due to reduced debt borrowings following the close of the HHI divestiture in the prior year with a decrease in the average borrowing rates during the respective periods.

Current wording

Interest Expense. Interest expense decreased during the three and nine month periods due to reduced debt borrowings following the close of the HHI divestiture in the prior year, plus the issuance of the Exchangeable Notes and tender offer and bond redemption during the three month period ended June 30, 2024, further reducing the outstanding principal balance and average borrowing rates during the three and nine month periods. See Note 8 - Debt in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Previous wording

Interest Income. Interest income increased due to interest on term deposits entered into using cash proceeds from the closing of the HHI divestiture in the prior year.

Current wording

Interest Income. Interest income increased due to interest on term deposits entered into using cash proceeds from the closing of the HHI divestiture in the prior year, with reduced term deposits following the previously discussed tender offer and bond redemption during the three month period ended June 30, 2024 .

Previous wording

Income From Discontinued Operations. Income or loss attributable to discontinued operations in the prior period primarily reflect the income from the discontinued operations of the HHI segment as the divestiture was completed in the prior year on June 20, 2023. Income attributable to discontinued operations in the current period primarily reflect changes to indemnifications associated with the divested businesses. See Note 2 -Divestitures in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Current wording

Income From Discontinued Operations. Income or loss attributable to discontinued operations in the prior period primarily reflect the income from the discontinued operations of the HHI segment as the divestiture was completed in the prior year on June 20, 2023. Income attributable to discontinued operations in the current period primarily reflect changes to indemnifications associated with the divested businesses and related tax provision adjustments. See Note 2 - Divestitures in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.

Previous wording

Noncontrolling Interest. The net income attributable to noncontrolling interest reflects the share of the net income of our subsidiaries, which are not wholly-owned, attributable to the accounting interest. Such amount varies in relation to such a subsidiary’s net income or loss for the period and the percentage interest not owned by SBH.

Current wording

Noncontrolling Interest. The net income attributable to noncontrolling interest reflects the share of the net income of our subsidiaries, which are not wholly-owned, attributable to the accounting interest. Such amount varies in relation to such a subsidiary’s net income or loss for the period and the percentage interest not owned by the Company.

Previous wording

Net sales decreased primarily from decreased volumes driven by lower demand in the aquatics product category, primarily from aquatics hard goods such as aquatic systems with lesser volume of new entrants into the category, whereas aquatic nutrition and consumables is showing signs of stabilizing. Volumes were also adversely impacted by the decision to exit non-strategic categories and lower margin SKUs in the prior year, positively impacting mix and profitability for the three and six month periods ended March 31, 2024. Lower foot traffic and sales within the pet specialty channel, primarily in NA, further contributed to the volume reduction offset by overall distribution growth in e-commerce channels globally. Organic net sales for the three month period ended March 31, 2024 decreased $9.0 million, or 3.0%, excluding a favorable foreign currency impact of $2.2 million. Organic net sales for the six month period decreased $14.7 million, or 2.6%, excluding a favorable foreign currency impact of $7.2 million.

Current wording

Net sales increased for the three month period from higher volumes through incremental distribution in e-commerce and the food and drug channels with some softness in mass retail. Volume growth was predominantly focused on consumables for both companion animal, including chews and treats and dog and cat food, and aquatics nutrition and consumables, partially offset by decreases in hard goods, such aquatic kits and environments. Volumes for the nine month period were adversely impacted by the decision to exit non-strategic categories and lower margin SKUs in the prior year, positively impacting mix and profitability for the nine month period. Organic net sales for the three month period ended June 30, 2024 increased $11.1 million, or 4.1%, excluding an unfavorable foreign currency impact of $1.2 million. Organic net sales for the nine month period decreased $3.5 million, or 0.4%, excluding a favorable foreign currency impact of $6.0 million.

Previous wording

Segment net income, adjusted EBITDA and margins increased due to improvement in gross profit margins from lower cost inventory compared to prior year, favorable product and channel mix, plus reduced operating cost overhead due to savings from prior year initiatives and improved distribution costs from improved fulfillment and optimization, partially offset by increased investment in marketing and advertising.

Current wording

Segment net income and adjusted EBITDA for the three month period increased due to higher volume with improved margins from lower cost inventory compared to the prior period, and favorable mix, partially offset by increased investment in marketing and advertising and unfavorable foreign currency. Segment net income, adjusted EBITDA and margins for the nine month period increased due to lower cost inventory, positive product and channel mix, operating cost improvements due to savings from prior year initiatives, partially offset by increased investment in marketing and advertising and unfavorable foreign currency.

Previous wording

Segment net loss, adjusted EBITDA, and margins improved due to higher sales volume, improved gross profit margins from reduced material and input costs and manufacturing efficiencies carrying into the fiscal year, plus reduced operating cost overhead due to savings from prior year initiatives, partially offset by additional investments in marketing and advertising and product innovation.

Current wording

Segment net loss, adjusted EBITDA the three and nine month period improved due to higher sales volume, with improved gross profit margins from reduced material and input costs and manufacturing efficiencies carrying into the fiscal year, plus reduced operating cost overhead due to savings from prior year initiatives, partially offset by additional investments in marketing and advertising and product innovation. Segment net income for the nine month period ended June 30, 2024 was further impacted by a $39.0 million impairment charge on the Rejuvenate® indefinite lived intangible asset earlier in the year. Segment net loss for the three and nine month periods ended July 2, 2023 were further impacted by impairment charges of $8.0 million and $56.0 million, respectively, on the Rejuvenate® indefinite lived intangible asset.

Previous wording

Net sales decreased due to lower volumes in small kitchen appliances from reduced placements in NA from the prior year, with overall category decline and exit of lower performance and reduced margin SKUs in the prior year, partially offset by increases in LATAM. Volume decline from small kitchen appliances were partially mitigated through volume growth in personal care on a global basis and overall higher volume distribution through e-commerce channels, plus opportunistic sales when a competitor filed for bankruptcy further benefiting the six month period. Pricing improvements were primarily attributable to positive pricing in inflationary markets, reduced excess inventory sales and fewer low-margin promotions, further benefiting product mix and overall profitability. Organic net sales for the three month period decreased $10.3 million, or 3.7%, excluding a unfavorable foreign currency impact of $1.0 million. Organic net sales for the six month period decreased $38.1 million, or 5.9%. excluding favorable foreign currency impact of $5.7 million.

Current wording

Net sales increased for the three month period was due to increased volume in personal care and home and kitchen product categories with increase in distribution in through continued growth in e-commerce and new product listings in NA with mass retail customers. Net sales for the nine month decreased from lower volumes in kitchen appliances during the first half of the fiscal year from reduced placements in NA from the prior year, influenced by category decline and exit of lower performance and reduced margin SKUs in the prior year, partially offset by volume growth in personal care on a global basis and overall higher volume distribution through e-commerce channels, plus opportunistic sales when a competitor filed for bankruptcy further benefiting the nine month period. Organic net sales for the three month period increased $17.0 million, or 6.1%, excluding a unfavorable foreign currency impact of $7.4 million. Organic net sales for the nine month period decreased $21.1 million, or 2.3%. excluding unfavorable foreign currency impact of $1.7 million.

Previous wording

Segment net income, Adjusted EBITDA and margins increased due to improved gross profit margins due to lower cost inventory compared to the prior year, cost improvement initiatives, and improved profitability through SKU rationalization and reduced excess inventory sales, plus reduced operating cost overhead due to savings from prior year initiatives, partially offset by additional investments in marketing and advertising and product innovation. Segment net income was further benefited by the recognition of proceeds from representation and warranty insurance policies of $65.0 million, intangible impairment charges in the prior year, and lower costs on restructuring and integration initiatives.

Current wording

Segment net loss and margin decreased with an increase in Adjusted EBITDA and margin for the three month period from improved gross profit margin realization due to lower cost inventory compared to the prior year, cost improvement initiatives, partially offset by additional investments in marketing and advertising, unfavorable mix and pricing. Segment net income, Adjusted EBITDA, and margins increased for the nine month period increased due to lower cost investment, cost improvement initiatives, and improved profitability through SKU rationalization and reduced excess inventory sales, plus reduced operating cost overhead due to savings from prior year initiatives, partially offset by additional investments in marketing and advertising and product innovation. Segment net income (loss) for the the three and nine month periods ended June 30, 2024 were further benefited by lower restructuring and integration costs, impairment charges in the prior year for the reporting unit goodwill of $111.1 million, along with impairment of intangible assets of $45.0 million and $64.7 million, for the respective periods, and recognition of proceeds from representation and warranty insurance policies of $65.0 million during the nine month period ended June 30, 2024,

Previous wording

The following is a summary of the SBH and SB/RH cash flows from continuing operations for the six month periods ended March 31, 2024 and April 2, 2023, respectively.

Current wording

The following is a summary of cash flow from continuing operations for the nine month periods ended June 30, 2024 and July 2, 2023, respectively.

Previous wording

Cash flows provided by SBH's continuing operations decreased $67.9 million, primarily due to lower cash flow generated by working capital due to reduced receivables factoring, higher cash paid towards taxes offset by lower cash interest and the receipt of $50.0 million in representation and warranty insurance proceeds. See Note 15 - Commitments and Contingencies within Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further discussion on the representation and warranty proceeds. Cash flows provided by SB/RH continuing operations decreased $73.8 million primarily due to the items previously discussed above.

Current wording

Cash flows provided by continuing operations increased $105.9 million, due to improved cash flow generated by working capital with improved sales and gross profit realization, lower cost inventory, lower cost for strategic transaction, restructuring and optimization initiatives, lower cash interest and the receipt of $65.0 million in representation and warranty insurance proceeds. See Note 15 - Commitments and Contingencies within Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further discussion on the representation and warranty proceeds.

Previous wording

Cash flows provided by investing activities for SBH continuing operations increased $570.0 million, primarily from the investment activity of short-term investments offset by the recognition of a $26.9 million payment for the final purchase price settlement on the HHI divestiture, which closed in the prior year on June 20, 2023, in accordance with the Purchase Agreement. See Note 2 - Divestitures within Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly report for further discussion on the HHI divestiture. Cash flows provided by investing activities of SB/RH is due to the items previously discussed.

Current wording

Cash flows provided by investing activities for continuing operations decreased $3,408.3 million, primarily from the recognition of $4,334.7 million in proceeds from the completion of the HHI divestiture in the prior period on June 20, 2023, partially offset by the investment activity of short-term investments used to fund the tender offer and bond redemption in the current period, with the recognition of a $26.9 million payment in the current period for the final purchase price settlement on the HHI divestiture, in accordance with the Purchase Agreement. See Note 2 - Divestitures within Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly report for further discussion on the HHI divestiture.

Previous wording

Cash flows used by financing activities for continuing operations increased $484.9 million primarily due to the pay down of debt and treasury share repurchases. Refer to Note 8 – Debt and Note 11 - Shareholders' Equityin the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information. There was no issuance of common stock, other than through the Company’s share-based compensation plans and which is recognized as non-cash financing activity. During the six month periods ended March 31, 2024 and April 2, 2023, SBH made cash dividend payments of $26.8 million, or $0.42 per share, and $34.4 million, or $0.42 per share, respectively, which decreased due to the lower outstanding shares. Cash flows used by financing activity of SB/RH increased $479.0 million and is highly dependent upon the financing cash flow activities of SBH.

Current wording

Cash flows used by financing activities for continuing operations decreased $142.4 million due to the issuance of $350.0 million Exchangeable Notes offset by the premium paid towards the associated capped call transactions, higher level of payment on outstanding debt from the tender call and bond redemption, market repurchase of bonds and the continued high level of treasury share repurchasing. Refer to Note 8 – Debt and Note 11 - Shareholders' Equityin the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information. There was no issuance of common stock, other than through the Company’s share-based compensation plans and which is recognized as non-cash financing activity. During the nine month periods ended June 30, 2024 and July 2, 2023, the Company made cash dividend payments of $38.8 million, or $0.42 per share, and $51.6 million, or $0.42 per share, respectively, which decreased due to the lower outstanding shares attributable to the treasure share repurchase activity in the current period.

Previous wording

Our ability to generate cash flow from operating activities coupled with our expected ability to access the credit markets, enables us to execute our growth strategies and return value to our shareholders. Our ability to make principal and interest payments on borrowings under our debt agreements and our ability to fund planned capital expenditures will depend on the ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. We believe the operating cash flow based upon our current and anticipated level of operations, existing cash balances, and availability under our credit facility to be sufficient to meet our operating and capital expenditure requirements for at least the next 12 months. It is not unusual for our business to experience negative operating cash flow during the first quarter of the fiscal year due to the operating calendar with our customers and the seasonality of our working capital. Additionally, we believe the availability under our credit facility and access to capital markets are sufficient to achieve our longer-term strategic plans. As of March 31, 2024, the Company had borrowing availability of $490.3 million, net of outstanding letters of credit, under our credit facility. Liquidity and capital resources of SB/RH are highly dependent upon the cash flow activities of SBH.

Current wording

Our ability to generate cash flow from operating activities coupled with our expected ability to access the credit markets, enables us to execute our growth strategies and return value to our shareholders. Our ability to make principal and interest payments on borrowings under our debt agreements and our ability to fund planned capital expenditures will depend on the ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. We believe the operating cash flow based upon our current and anticipated level of operations, existing cash balances, and availability under our credit facility to be sufficient to meet our operating and capital expenditure requirements for at least the next 12 months. It is not unusual for our business to experience negative operating cash flow during the first quarter of the fiscal year due to the operating calendar with our customers and the seasonality of our working capital. Additionally, we believe the availability under our credit facility and access to capital markets are sufficient to achieve our longer-term strategic plans. As of June 30, 2024, the Company had borrowing availability of $490.4 million, net of outstanding letters of credit, under our credit facility.

Previous wording

As of March 31, 2024, the Company had a high level of cash reserves, as compared to the prior year, due to the cash proceeds from the HHI divestiture. The Company has temporarily invested a portion of its cash in short-term investments until such expenditures are considered required or necessary to the Company in executing its strategic plans and initiatives, including any further debt reduction and share buybacks. If the Company does not use the proceeds from the HHI divestiture to repay debt or reinvest in the business within certain time periods by the terms of the Company's outstanding indebtedness, the Company may be required to make an asset sale offer to the holders of its Senior Notes pursuant to the terms of the Company's outstanding indebtedness.

Current wording

The Company had a high level of cash reserves due to the cash proceeds from the HHI divestiture. The Company has temporarily invested a portion of its cash in short-term investments until such expenditures are considered required or necessary to the Company in executing its strategic plans and initiatives, including any further debt reduction and share buybacks.

Previous wording

During the three and six month period ended March 31, 2024, the Company completed additional repurchases of Senior Notes available for sale on the open market, at a discount. See Note 8 - Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail. The Company may continue to make repayments on its debt obligations in the future, which may include repayments, redemptions, repurchases, refinancing or exchanges of our outstanding Senior Notes, any of which will be dependent on various factors, including market conditions. Any such repurchases may be affected through a variety of means, including privately negotiated transactions, market transactions, tender offers, redemptions or as otherwise required or permitted by the instruments covering the Company's outstanding indebtedness.

Current wording

The Company has substantially decreased its outstanding debt with the early extinguishment of debt following the receipt of proceeds from the completion of the HHI divestiture in June 2023 through various redemptions and repurchase transactions. See Note 8 - Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail. The Company may make additional repayments on its remaining outstanding debt obligations in the future, which may include repayments, redemptions, repurchases, refinancing or exchanges of our outstanding Senior Notes, any of which will be dependent on various factors, including market conditions. Any such repurchases may be affected through a variety of means, including privately negotiated transactions, market transactions, tender offers, redemptions or as otherwise required or permitted by the instruments covering the Company's outstanding indebtedness.