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Press Release: Spectrum Brands Holdings Reports -5-

· 02/05/2021 06:30
-- Stock based and other incentive compensation costs that consist of costs associated with long-term compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics; and generally consist of non-cash, stock-based compensation. During the three month periods ended January 3, 2021 and December 29, 2019, other incentive compensation includes certain incentive bridge awards issued due to changes in the Company's long-term compensation plans that allow for cash based payment upon employee election but do not qualify for shared-based compensation. All bridge awards fully vested in November 2020; -- Restructuring and related charges, which consist of project costs associated with the restructuring initiatives across the Company's segments; -- Transaction related charges that consist of (1) transaction costs from qualifying acquisition transactions during the period, or subsequent integration related project costs directly associated with an acquired business; and (2) divestiture related transaction costs that are recognized in continuing operations and post-divestiture separation costs consisting of incremental costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred as part of the divestitures and exiting of transition service arrangements (TSAs) and reverse TSAs; -- Gains and losses attributable to the Company's investment in Energizer common stock; -- Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations subsequent to an acquisition (when applicable); -- Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations (when applicable); -- Other adjustments primarily consisting of costs attributable to (1) proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual non-recurring claims with no previous history or precedent, (2) legal costs associated with Salus during the three month periods ended January 3, 2021 and December 29, 2019 as they are not considered a component of the continuing commercial products company; (3) foreign currency attributable to multicurrency loans for the three month period ended December 29, 2019, that were entered into with foreign subsidiaries in exchange for receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries' net assets as part of the GBL and GAC divestitures during the year ended September 30, 2019; (4) expenses and cost recovery for flood damage at Company facilities in Middleton, Wisconsin during the three month period ended December 29, 2019; and (5) incremental costs for separation of a key executive during the three month period ended December 29, 2019.January 3, 2021 ------------------------------------------------------------ Net Sales Three Month Excluding Periods Ended Effect of Effect of Organic Net Sales (in millions, Net Changes in Changes in Effect of Net December except %) Sales Currency Currency Acquisitions Sales 29, 2019 Variance -------------- -------- ---------- ---------- ---------------- -------- --------- ---------------- HHI $ 408.7 $ (1.4) $ 407.3 $ -- $ 407.3 $ 297.7 $109.6 36.8% HPC 378.5 (5.6) 372.9 -- 372.9 322.1 50.8 15.8% GPC 275.5 (4.3) 271.2 (20.3) 250.9 205.8 45.1 21.9% H&G 82.3 -- 82.3 -- 82.3 45.9 36.4 79.3% -------- --------- ---------- ---------- ---- -------- --------- Total $1,145.0 $ (11.3) $ 1,133.7 $ (20.3) $1,113.4 $ 871.5 $241.9 27.8% ======= ===== ========= ====== === ======= ========Three Month Periods Ended -------------------------------- (in millions, December 29, except %) January 3, 2021 2019 Variance -------------- --------------- --------------- --------------- HHI $ 408.7 $ 297.7 111.0 37.3% HPC 378.5 322.1 56.4 17.5% GPC 275.5 205.8 69.7 33.9% H&G 82.3 45.9 36.4 79.3% --------------- --------------- Net Sales $ 1,145.0 $ 871.5 273.5 31.4% === ========== === ==========Three Month Periods Ended --------------------------------------------- (in millions) January 3, 2021 December 29, 2019 ------------------------ ---------------------- --------------------- Armitage acquisition $ 4.8 $ -- Coevorden operations divestiture 2.8 0.2 GBL divestiture 1.8 2.3 Other 11.2 1.6 ---------------------- ------------------- Total transaction-related charges $ 20.6 $ 4.1 ==== ================ ======= ==========Three Month Periods Ended -------------------------------------------- (in millions) January 3, 2021 December 29, 2019 ------------------------- --------------------- --------------------- Global productivity improvement program $ 9.2 $ 26.6 Other restructuring activities -- 0.8 --------------------- ------------------- Total transaction-related charges $ 9.2 $ 27.4 ====== ============= === ==============

The following summarizes restructuring and related charges for the three month periods ended January 3, 2021 and December 29, 2019:

The following summarizes transaction related charges for the three month periods ended January 3, 2021 and December 29, 2019:

NET SALES AND ORGANIC NET SALES

The following is a summary of net sales by segment for the three month periods ended January 3, 2021 and December 29, 2019:

We define organic net sales as reported net sales excluding the effect of changes in foreign currency exchange rates and acquisitions. 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 rate and/or 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 reported 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 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 period. The following is a reconciliation of reported sales to organic sales for the three month period ended January 3, 2021 compared to reported net sales for the three month period ended December 29, 2019:

ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) is a non-GAAP metric used by management that we believe 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 each of the comparable periods 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 the following:

Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of reported net sales for the respective periods.

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February 05, 2021 06:30 ET (11:30 GMT)