Spectrum Brands (SPB) investor relations material

Executive summary

• Net sales declined 10.2% year-over-year, with organic sales down 11.1%, driven by tariff-related supply chain disruptions, stop shipments during pricing negotiations, and soft demand across all segments.

• Adjusted EBITDA fell to $76.6M–$77M, down 27.9% year-over-year, with margin dropping to 10.9% due to lower volumes, mix, inflation, and tariffs, partially offset by cost reductions.

• Net income increased by $1.4M to $19.7M–$20.5M, driven by lower tax and interest expenses despite lower operating income.

• Over $50M in cost reductions and supply chain diversification were implemented to mitigate tariff impacts and protect long-term financial health.

• Share repurchases totaled 0.9M shares in Q3, with 17.1M shares (~42% of share count) repurchased since the HHI divestiture.

Financial highlights

• Q3 net sales: $699.6M–$700M, down from $779M year-over-year; organic sales down 11.1%.

• Adjusted EBITDA: $76.6M–$77M, down from $106M; margin dropped to 10.9% from 13.6%.

• Operating income: $31.3M, down from $47.7M; diluted EPS from continuing operations: $0.83, up from $0.66; adjusted EPS: $1.24, up from $1.13.

• Gross margin: 37.8%, down 110 bps year-over-year.

• Free cash flow for nine months: $8M; adjusted free cash flow: $12.6M; FY25 guidance reaffirmed at $160M.

Outlook and guidance

• FY25 earnings framework suspended due to ongoing tariff and trade uncertainties, but free cash flow guidance of $160M is reaffirmed.

• Q4 sales are expected to improve, with early signs of recovery and supply chain stabilization.

• Targeting $20M–$25M in incremental pricing and supplier concessions for FY26 to offset future tariff exposure.

• Focus remains on cash flow, liquidity, and working capital improvements.

• Long-term net leverage ratio goal remains at 2.0–2.5x.