12:30 | 03.01.2018
Spectrum Brands Holdings to Explore Strategic Options for its Global Batteries & Appliances Businesses

Spectrum Brands Holdings, Inc. (NYSE: SPB), a global consumer products
company offering a portfolio of leading brands providing superior value
to consumers and customers every day, announced today it will explore
strategic options for its Global Batteries & Appliances (GBA) businesses
with the intention to sell the units during 2018.

“For nearly 10 years, we have sought to allocate capital efficiently
through organic investment, as well as tuck-in and transformational
acquisitions, and we will continue to do this going forward,” said David
Maura, Executive Chairman of Spectrum Brands Holdings. “This action to
redeploy capital invested from our GBA assets repositions our Company
into a faster-growing and higher-margin Spectrum Brands with an
increased focus on our four remaining businesses of Hardware & Home
Improvement, Global Auto Care, Global Pet Supplies and Home & Garden.

“With greatly increased financial flexibility from these planned
divestitures, we intend to reduce debt, reinvest in our core businesses
both organically and through acquisitions, and repurchase shares,” Mr.
Maura continued. ”We believe this strategy is aligned with investors’
interests and will drive shareholder value to the next level. It also
reinforces our continuing confidence that Spectrum Brands’ best days are
still ahead.”

“The Global Batteries & Appliances businesses are both strong, well-run
divisions with excellent management and dedicated employees, and they
have consistently contributed to the long-term success of Spectrum
Brands,” said Andreas Rouvé, Chief Executive Officer of Spectrum Brands
Holdings. ”We have received multiple inquiries from prospective buyers
and are in active discussions with several. Given their attractiveness
and upside potential, we believe these businesses can have accelerated
success in the hands of new owners.”

For the fiscal year ended September 30, 2017, the Global Batteries &
Appliances segment generated net sales of $1,998 million, operating
income of $231 million and adjusted EBITDA of $317 million. Spectrum
Brands reported fiscal 2017 net sales of $5,007 million, operating
income of $561 million and adjusted EBITDA of $956 million. See Other
Supplemental Information for a reconciliation of adjusted EBITDA, a
non-GAAP metric, to operating income.

Effective with the Company’s fiscal 2018 first quarter financial results
ended December 31, 2017, the Global Batteries & Appliances segment will
be reclassified as held for sale and reported as discontinued operations.

No assurance can be given that any transaction will result from the
exploration of the Company’s strategic options for its GBA businesses or
the timing thereof. The Company undertakes no duty or responsibility to
update any of these forward-looking statements to reflect events or
circumstances after the date of this press release or to reflect actual
outcomes. The Company does not intend to comment on or provide updates
regarding these matters unless and until it determines that further
disclosure is appropriate or required based on the then-current facts
and circumstances.
About Spectrum Brands Holdings, Inc.Spectrum Brands Holdings, a member of the Russell 1000 Index, is a
global and diversified consumer products company and a leading supplier
of consumer batteries, residential locksets, residential builders’
hardware, plumbing, shaving and grooming products, personal care
products, small household appliances, specialty pet supplies, lawn and
garden and home pest control products, personal insect repellents, and
auto care products. Helping to meet the needs of consumers worldwide,
our Company offers a broad portfolio of market-leading, well-known and
widely trusted brands including Rayovac®, VARTA®, Kwikset®, Weiser®,
Baldwin®, National Hardware®, Pfister®, Remington®, George Foreman®,
Black + Decker®, Tetra®, Marineland®, Nature’s Miracle®, Dingo®,
8-in-1®, FURminator®, IAMS® and Eukanuba® (Europe only), Healthy-Hide®,
Digest-eeze™, Littermaid®, Spectracide®, Cutter®, Repel®, Hot Shot®,
Black Flag®, Liquid Fence®, Armor All®, STP® and A/C PRO®. Spectrum
Brands’ products are sold in approximately 160 countries. Spectrum
Brands Holdings generated net sales of approximately $5.01 billion in
fiscal 2017. For more information, visit MeasurementsManagement believes that certain non-GAAP financial measures may be
useful in certain instances to provide additional meaningful comparisons
between current results and results in prior operating periods.Within
this release, including the supplemental information attached hereto,
reference is made to adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA).Adjusted EBITDA is a
metric used by management to evaluate segment performance and frequently
used by the financial community which provides insight into an
organization’s operating trends and facilitates comparisons between peer
companies, since interest, taxes, depreciation and amortization can
differ greatly between organizations as a result of differing capital
structures and tax strategies. Adjusted EBITDA also is one of the
measures used for determining the Company’s debt covenant.Adjusted
EBITDA excludes certain items that are unusual in nature or not
comparable from period to period.The Company provides this
information to investors to assist in comparisons of past, present and
future operating results and to assist in highlighting the results of
on-going operations.While the Company’s management believes that
non-GAAP measurements are useful supplemental information, such adjusted
results are not intended to replace the Company’s GAAP financial results
and should be read in conjunction with those GAAP results.Other
Supplemental Information has been provided to demonstrate reconciliation
of the non-GAAP measurement discussed above to the most relevant GAAP
financial measurement.Forward-Looking StatementsCertain matters discussed in this news release and other oral and
written statements by representatives of the Company regarding matters
such as the Company’s ability to meet its expectations for its fiscal
2018 year (including expectations regarding capital expenditures and its
ability to increase its net sales, free cash flow and adjusted EBITDA,
and the outcome of exploring strategic options) may be forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. We have tried, whenever possible, to identify these
statements by using words like “future,” “anticipate”, “intend,” “plan,”
“estimate,” “believe,” “expect,” “project,” “forecast,” “could,”
“would,” “should,” “will,” “may,” and similar expressions of future
intent or the negative of such terms. These statements are subject to a
number of risks and uncertainties that could cause results to differ
materially from those anticipated as of the date of this release. Actual
results may differ materially as a result of (1) the outcome of the
Company’s exploration of strategic options for its GBA assets, including
uncertainty regarding consummation of any such transaction or
transactions and the terms of such transaction or transactions, if any,
and, if consummated, the Company’s ability to realize the expected
benefits of such transaction or transactions, potential disruption to
our business or diverted management attention as a result of the
exploration or negotiation of such transaction or transactions; (2) the
impact of our indebtedness on our business, financial condition and
results of operations; (3) the impact of restrictions in our debt
instruments on our ability to operate our business, finance our capital
needs or pursue or expand business strategies; (4) any failure to comply
with financial covenants and other provisions and restrictions of our
debt instruments; (5) the impact of actions taken by significant
stockholders; (6) the Special Committee of the Board of Directors’
exploration and negotiation of a potential transaction with HRG Group,
Inc., if any, including uncertainty regarding consummation of such
transaction and the terms of such transaction, and, if consummated, the
Company’s ability to realize the expected benefits of such transaction,
potential disruption to our business or diverted management attention as
a result of the exploration or negotiation of such transaction; (7) the
impact of expenses resulting from the implementation of new business
strategies, divestitures or current and proposed restructuring
activities; (8) our inability to successfully integrate and operate new
acquisitions at the level of financial performance anticipated; (9) the
unanticipated loss of key members of senior management; (10) the impact
of fluctuations in commodity prices, costs or availability of raw
materials or terms and conditions available from suppliers, including
suppliers’ willingness to advance credit; (11) interest rate and
exchange rate fluctuations; (12) our ability to utilize our net
operating loss carry-forwards to offset tax liabilities from future
taxable income; (13) the loss of, significant reduction in, or
dependence upon, sales to any significant retail customer(s); (14)
competitive promotional activity or spending by competitors, or price
reductions by competitors; (15) the introduction of new product features
or technological developments by competitors and/or the development of
new competitors or competitive brands; (16) the effects of general
economic conditions, including inflation, recession or fears of a
recession, depression or fears of a depression, labor costs and stock
market volatility or changes in trade, monetary or fiscal policies in
the countries where we do business; (17) changes in consumer spending
preferences and demand for our products; (18) our ability to develop and
successfully introduce new products, protect our intellectual property
and avoid infringing the intellectual property of third parties; (19)
our ability to successfully implement, achieve and sustain manufacturing
and distribution cost efficiencies and improvements, and fully realize
anticipated cost savings; (20) the cost and effect of unanticipated
legal, tax or regulatory proceedings or new laws or regulations
(including environmental, public health and consumer protection
regulations); (21) public perception regarding the safety of products
that we manufacture and sell, including the potential for environmental
liabilities, product liability claims, litigation and other claims
related to products manufactured by us and third parties; (22) the
impact of pending or threatened litigation; (23) the impact of
cybersecurity breaches or our actual or perceived failure to protect
company and personal data; (24) changes in accounting policies
applicable to our business; (25) government regulations; (26) the
seasonal nature of sales of certain of our products; (27) the effects of
climate change and unusual weather activity; and (28) the effects of
political or economic conditions, terrorist attacks, acts of war or
other unrest in international markets, including those discussed herein
and those set forth in the combined securities filing of Spectrum Brands
Holdings, Inc. and SB/RH Holdings, LLC, including their most recently
filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q.Spectrum Brands Holdings also cautions the reader that its estimates
of trends, market share, retail consumption of its products and reasons
for changes in such consumption are based solely on limited data
available to Spectrum Brands Holdings and management’s reasonable
assumptions about market conditions, and consequently may be inaccurate,
or may not reflect significant segments of the retail market. Spectrum
Brands Holdings also cautions the reader that undue reliance should not
be placed on any forward-looking statements, which speak only as of the
date of this release. Spectrum Brands Holdings undertakes no duty or
responsibility to update any of these forward-looking statements to
reflect events or circumstances after the date of this report or to
INFORMATION (Unaudited)Adjusted EBITDA. Our press release contains financial information
regarding adjusted EBITDA (Earnings Before Interest, Taxes,
Depreciation, Amortization), which is a non-GAAP measurement. Adjusted
EBITDA is a metric used by management and we believe this non-GAAP
measure provides useful information to investors because it reflects
ongoing operating performance and trends of our segments excluding
certain non-cash based expenses and/or non-recurring items during the
period and facilitates comparisons between peer companies since
interest, taxes, depreciation and amortization can differ greatly
between organizations as a result of differing capital structures and
tax strategies. Further, adjusted EBITDA is a measure used for
determining the Company’s debt covenant. 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: (1) stock based
compensation expense as it is a non-cash based compensation cost; (2)
acquisition and integration costs that consist of transaction costs from
acquisition transactions during the period, or subsequent integration
related project costs directly associated with the acquired business as
previously summarized; (3) restructuring and related costs, which
consist of project costs associated with restructuring initiatives as
previously summarized; (4) non-cash asset impairments or write-offs
realized; (5) non-cash purchase accounting inventory adjustments
recognized in earnings subsequent to an acquisition; (6) and other
adjustments. During the twelve month period ended September 30, 2017,
other adjustments for GBA consist of an adjustment for the devaluation
of cash and cash equivalents. Other adjustments for Spectrum Brands
consist of recognized costs for a non-recurring voluntary recall of
rawhide product by the PET segment, professional fees associated with
non-acquisition based strategic initiatives of the Company and an
adjustment for the devaluation of cash and cash equivalents denominated
in Venezuelan currency in GBA. The following is a reconciliation of
operating income to adjusted EBITDA for the twelve month period ended
September 30, 2017:






For the Year Ended September 30, 2017


Spectrum Brands
Operating Income

$ 230.8

$ 561.4

Other non-operating expense, net



Depreciation and amortization






Share based compensation


Acquisition and integration related charges



Restructuring and related charges



Write-off from impairment of intangible assets


Purchase accounting inventory adjustment


Pet safety recall





Adjusted EBITDA

$ 316.5

$ 955.7

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