Spectrum Brands Holdings Inc.

02/05/2026 | Press release | Distributed by Public on 02/05/2026 09:00

Quarterly Report for Quarter Ending December 28, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
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 (the "Quarterly Report") and our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 filed with the SEC on November 18, 2025 (the "2025 Annual Report"). The following discussion may contain forward-looking statements that reflect our plans, estimates, and beliefs and involve risks, uncertainties, and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed within "Forward-Looking Statements" included elsewhere in this Quarterly Report, and in Item 1A. Risk Factorsand "Forward-Looking Statements" included within our 2025 Annual Report. 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.
Non-GAAP Measurements
Our consolidated and segment results contain non-GAAP metrics such as organic net sales, adjusted EBITDA and adjusted EBITDA margin. While we believe organic net sales, adjusted EBITDA and adjusted EBITDA margin are useful supplemental information, such adjusted results are not intended to replace our financial results in accordance with generally accepted accounting principles 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 (where 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 current period 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 period.
The following is a reconciliation of reported net sales to organic net sales for the three month period ended December 28, 2025 compared to net sales for the three month period ended December 29, 2024:
Three Month Periods Ended
(in millions, except %) 		December 28, 2025
Net Sales Effect of Changes in Currency
Organic Net Sales
Net Sales
December 29, 2024
Variance
GPC $ 281.6 $ (6.4) $ 275.2 $ 260.0 $ 15.2 5.8 %
H&G 73.9 - 73.9 92.1 (18.2) (19.8) %
HPC 321.5 (12.1) 309.4 348.1 (38.7) (11.1) %
Total $ 677.0 $ (18.5) $ 658.5 $ 700.2 (41.7) (6.0) %
Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and adjusted EBITDA margin are non-GAAP metrics used by management, which we believe are useful to investors to measure the operational strength and performance of our business. These metrics provide investors additional information about our operating profitability excluding certain non-cash items, non-routine items we do not expect to continue at the same level in the future, as well as other items not core to our continuing operations. By providing these measures, together with a reconciliation of the most directly comparable GAAP measure, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. These metrics are also useful to investors in that securities analysts and other interested parties use such calculations as a measure of financial performance and debt service capabilities, and they are regularly used by management and our board of directors for internal purposes in evaluating our business performance, making budgeting decisions, and comparing our performance against other peer companies using similar measures 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 also excludes certain non-cash adjustments including share based compensation expense; impairment charges on property, plant and equipment, right of use lease assets, and goodwill and other intangible assets, as applicable; gain or loss from the early extinguishment of debt through the repurchase or early redemption of debt, as applicable; and purchase accounting adjustments recognized in income subsequent to an acquisition attributable to the step-up in value on assets acquired. Additionally, the Company will further recognize adjustments from adjusted EBITDA for other costs, gains and losses that are considered significant, non-recurring, or otherwise not supporting the continuing operations and revenue generating activity of the segment or Company, including but not limited to, exit and disposal activities, or incremental costs associated with strategic transactions, restructuring and optimization initiatives such as the acquisition or divestiture of a business, related integration or separation costs, or the development and implementation of strategies to optimize or restructure the Company and its operations. Adjusted EBITDA margin is adjusted EBITDA as a percentage of reported net sales.
The following is a reconciliation of Net Income From Continuing Operations to Adjusted EBITDA and Adjusted EBITDA margin for the three month periods ended December 28, 2025 and December 29, 2024, respectively.
(in millions, except %) December 28, 2025 December 29, 2024
Net income from continuing operations $ 29.4 $ 24.6
Income tax (benefit) expense
(8.9) 11.8
Interest expense 6.8 6.2
Depreciation 15.6 14.0
Amortization 10.2 10.5
Share based compensation 4.3 4.7
Non-cash impairment charges 0.5 -
Exit and disposal costs 1.1 0.5
Global ERP transformation1
2.4 2.5
Litigation costs2
0.9 0.8
Other3
0.3 2.2
Adjusted EBITDA $ 62.6 $ 77.8
Net sales $ 677.0 $ 700.2
Net income from continuing operations margin 4.3 % 3.5 %
Adjusted EBITDA margin 9.2 % 11.1 %
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1 Costs attributable to a multi-year transformation project to upgrade and implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis, including project management and professional services for planning, design, and business process review that do not qualify as software configuration and implementation costs recognized as capital expenditures or deferred costs under applicable accounting principles. The Company had recently extended the project to include its HPC segment and anticipates costs to be incurred through further deployments through calendar year 2026.
2 Litigation costs are associated with the Company's cost to facilitate various ongoing litigation matters associated with the Tristar Business acquisition in Fiscal 2023, previously disclosed in our 2025 Annual Report. Such costs are anticipated to be incurred until such litigation matters have been resolved.
3 Other is attributable to other project costs associated with previous strategic separation initiatives and distribution center transitions, plus certain non-recurring key executive severance costs in the prior year.
Overview
For additional discussion and overview of the business, please refer to Item 1. Businessand Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operationsin our 2025 Annual Report.
Recent Developments
U.S. Tariffs and Global Macro-Economic Environment
The changes to U.S. trade policy including the introduction of incremental U.S. tariffs on imported goods in the prior year have had a significant impact to our operations, increasing costs for sourced products, materials and components, and thus raising cost of goods sold and pressuring profit margins. The changes to tariffs were introduced midway through our prior fiscal year, impacting our operating results primarily during the second half of the prior fiscal year. Our mitigation strategies included adjusting pricing and actively managing supply chain by engaging suppliers to support cost sharing or expanding supply chain diversification. The changing tariff policies impacted our reporting segments to varying degrees, most significantly with HPC, as most all of its products supporting the U.S. business are imported from southeast Asia. HPC has actively pursued sourcing alternatives and has been moving production to diversify its supply chain and more effectively manage risk. Over 60% of net sales in HPC are driven through international markets and were not directly impacted by U.S. tariffs. Comparatively, our other segments were less affected. GPC has certain aquatic equipment and chews & treats products that were sourced primarily from China, but have a higher degree of sourcing diversity with major suppliers elsewhere, which has allowed it to move production more swiftly to alternative supply. GPC also manufactures aquatics nutrition products at its facility in Germany and imports them into the U.S., but such tariff-related costs have been predominantly mitigated through pricing adjustments and cost management. The H&G segment products are predominantly manufactured and sold within the U.S. with only certain material costs and a small portfolio of products, such as baits, traps and mops, that are internationally sourced and affected by U.S. tariffs, with such costs having been mitigated through pricing adjustments and vendor cost management.
We have continued our focus on operational efficiencies by optimizing production processes, reducing waste, and leveraging technology to enhance productivity, with the aim of offsetting cost increases and protecting margins. With the trade policy and tariff changes realized in the prior fiscal year, we believe our mitigation strategies have been successful in protecting our profitability and minimizing the impact in comparability of our operating performance. Regardless, we continue to closely monitor the trade environment for impacts to our projections and forecasts. We have managed cash flow and secured our balance sheet to support the ongoing business through the evolving changes in U.S. trade policy and potential impacts to the global-macro economic environment. We are focused on supply chain diversification, operational efficiency, and strategic investments for sustaining growth and profitability amid trade uncertainties.
Strategic Transactions, Restructuring and Optimization Initiatives
We periodically evaluate and enter into strategic transactions that may result in the acquisition or divestiture of a business which impacts the comparability of the financial results of the consolidated group and or certain reporting segments. Additionally, we enter into internal restructuring and optimization initiatives to improve efficiencies and utilization to reduce costs, increase revenues and improve margins, which may have a significant impact on the comparability of financial results on the condensed consolidated financial statements. These changes and updates are inherently difficult and 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 inflation and increased interest rates, which are beyond our control. Moreover, the comparability of financial information may be impacted by incremental amounts attributable to such strategic transactions, restructuring and optimization initiatives. The following is a summary of costs attributable to strategic transactions and business development costs that are considered as potentially having a significant impact on the comparability of the financial results on the consolidated financial statements and segment financial information, for each of the projects during the three month periods ended December 28, 2025 and December 29, 2024, respectively:
Three month periods ended
(in millions) December 28, 2025 December 29, 2024
Global ERP transformation1
$ 2.4 $ 2.5
HHI separation costs2
- 0.8
HPC separation initiatives3
- 1.3
Other project costs4
0.3 0.2
Total $ 2.7 $ 4.8
Reported as:
Selling, general & administrative $ 2.7 $ 4.8
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1 Costs attributable to a multi-year transformation project to upgrade and implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis, including project management and professional services for planning, design, and business process review that do not qualify as software configuration and implementation costs recognized as capital expenditures or deferred costs under applicable accounting principles. The Company had recently extended the project to include its HPC segment and anticipates costs to be incurred through further deployments through calendar year 2026.
2 Costs attributable to the HHI divestiture consisting of costs to facilitate separation and transition of systems and processes subject to transition service agreements ("TSAs"), which closed effective June 2025 with no further subsequent costs incurred.
3 Costs attributable to efforts to facilitate a strategic separation of the HPC segment either through a spin, merger or sale, consisting of legal and professional fees to facilitate transaction opportunities and diligence efforts. The Company continues to assess strategic opportunities for a proposed HPC separation, as well as considerations within the macroeconomic environment that may affect the timing and ability to execute on such initiative.
4 Other project costs are attributable to distribution center transitions.
Exit and Disposal Activity
We periodically recognize exit and disposal costs primarily consisting of severance and contract termination costs that may be attributable to a reorganization or restructuring of the Company, cost savings initiatives, or in consideration of a recent strategic transaction. Such actions result in the recognition of costs to us that are considered incremental and not reflective of the continuing operating costs of the business and may impact the comparability of the consolidated company and its segments.
Consolidated Results of Operations
The following is a summary of consolidated results of operations for the three month periods ended December 28, 2025 and December 29, 2024, respectively.
(in millions, except %) December 28, 2025 December 29, 2024 Variance
Net sales $ 677.0 $ 700.2 $ (23.2) (3.3) %
Gross profit 241.6 257.8 (16.2) (6.3) %
Selling, general & administrative 214.5 213.1 1.4 0.7 %
Interest expense 6.8 6.2 0.6 9.7 %
Interest income (0.6) (2.6) 2.0 (76.9) %
Other non-operating expense, net 0.4 4.7 (4.3) (91.5) %
Income tax (benefit) expense (8.9) 11.8 (20.7) n/m
Net income from continuing operations 29.4 24.6 4.8 19.5 %
Loss from discontinued operations, net of tax (1.0) (0.8) (0.2) 25.0 %
Net income 28.4 23.8 4.6 19.3 %
n/m = not meaningful
Net Sales.The following is a summary of net sales by segment for the three month periods ended December 28, 2025 and December 29, 2024, respectively, and the principal components of changes in net sales between the respective periods.
(in millions, except %) December 28, 2025 December 29, 2024 Variance
GPC $ 281.6 $ 260.0 $ 21.6 8.3 %
H&G 73.9 92.1 (18.2) (19.8) %
HPC 321.5 348.1 (26.6) (7.6) %
Net Sales $ 677.0 $ 700.2 (23.2) (3.3) %
Three Month Period Ended (in millions, except %) GPC H&G HPC Total
Amount Percent Amount Percent Amount Percent Amount Percent
Volume $ 11.6 4.5 % $ (19.9) (21.6) % $ (49.4) (14.2) % $ (57.7) (8.2) %
Price 3.6 1.4 % 1.7 1.8 % 10.7 3.1 % 16.0 2.3 %
Foreign Currency 6.4 2.5 % - - % 12.1 3.5 % 18.5 2.6 %
Total $ 21.6 8.3 % $ (18.2) (19.8) % $ (26.6) (7.6) % $ (23.2) (3.3) %
Organic $ 15.2 5.8 % $ (18.2) (19.8) % $ (38.7) (11.1) % $ (41.7) (6.0) %
Refer to the Segment Financial Data section below for further discussion on net sales results.
Gross Profit.The following is a summary of the gross profit and gross profit margin for the three month periods ended December 28, 2025 and December 29, 2024, respectively, and the principal factors contributing to the change between the respective periods.
(in millions, except %) December 28, 2025 December 29, 2024 Variance
Gross profit $ 241.6 $ 257.8 $ (16.2) (6.3) %
Gross profit margin 35.7 % 36.8 % (110) bps
(in millions, except margin) Gross Profit Margin
Price $ 16.0 140 bps
Mix (1.6) (20) bps
Volume (21.0) 5 bps
Cost changes (18.2) (260) bps
Foreign exchange rates 8.6 25 bps
Total $ (16.2) (110) bps
Gross profit for the three month period decreased due to lower volumes and higher costs, with a margin decrease from higher comparable costs from tariffs and inflation partially mitigated through positive pricing adjustments, with higher trade spend and unfavorable mix, partially offset by favorable foreign currency.
Selling, General & Administrative.The following is a summary of the selling, general & administrative costs for the three month periods ended December 28, 2025 and December 29, 2024, respectively, including amounts as a percentage of net sales for each respective period.
Three Month Periods Ended (in millions, except %) December 28, 2025 % of Net Sales December 29, 2024 % of Net Sales Variance
Sales, marketing & advertising $ 78.0 11.5 % $ 79.4 11.3 % $ (1.4) (1.8) %
Distribution 60.8 9.0 % 60.1 8.6 % 0.7 1.2 %
General & administrative 66.9 9.9 % 62.6 8.9 % 4.3 6.9 %
Research & development 5.0 0.7 % 5.7 0.8 % (0.7) (12.3) %
Strategic transaction, restructuring and optimization 3.8 0.6 % 5.3 0.8 % (1.5) (28.3) %
Total selling, general & administrative $ 214.5 31.7 % $ 213.1 30.4 % 1.4 0.7 %
Selling, general and administrative expenses increased for the three month periods due to higher general and administrative costs. Sales, marketing and advertising costs were consistent between periods for the three month period and relative to sales volumes between periods. Distribution costs were consistent between periods for the three month periods and relative to sales volumes between periods. General & administrative costs increased for the three month periods due to higher overhead costs following the expiration of transition service agreements associated with the HHI divestiture in the prior year in June 2025. Research & development costs were consistent between periods. Strategic transaction, restructuring and optimization costs, inclusive of exit & disposal costs, decreased for the three month periods due to lower costs towards HPC separation initiatives and the expiration of transition service agreements associated with the HHI divestiture in the prior year.
Interest Expense.Interest expense increased during the three month period due to higher finance leases compared to the prior period.
Interest Income. Interest income decreased during the three month period due to lower cash balances held in term deposits compared to the prior period.
Other Non-Operating Expense, Net.Other non-operating expense is primarily due to changes in foreign currency compared to the prior period.
Income Taxes. Our estimated annual effective tax rate was impacted by income earned outside the U.S. that is subject to U.S. tax, including the U.S. tax on global intangible low taxed income, and certain nondeductible expenses. See Note 11 - Income Taxin the Notes to the Condensed Consolidated Financial Statements for further discussion on the effective tax rate for the three month periods.
Loss From Discontinued Operations. Loss from discontinued operations primarily reflect changes to indemnifications associated with divested businesses.
Segment Financial Data
Global Pet Care
(in millions, except %) December 28, 2025 December 29, 2024 Variance
Net sales $ 281.6 $ 260.0 $ 21.6 8.3 %
Adjusted EBITDA 49.0 51.5 (2.5) (4.9) %
Adjusted EBITDA margin 17.4 % 19.8 % (240) bps
Net sales for the three month period increased with an organic net sales increase of $15.2 million, or 5.8%, excluding a favorable foreign currency impact of $6.4 million. Increase in North America sales with the strategic shift of orders by retail customers out of the prior year in preparation of a system implementation, coupled with positive tariff-related pricing actions and strong category performance for Companion Animal products compared to the prior period. EMEA sales were positively impacted by favorable foreign currency as EMEA sales decreased excluding foreign currency impacts, primarily due to lower dog and cat food volumes from the transition and timing for new promotional brand launch, partially offset by further expansion of GoodBoy® in continental Europe and organic net sales growth from aquatics from Tetra® and softer prior year comparison. Adjusted EBITDA and adjusted EBITDA margin for the three month period decreased due to margin pressures from higher tariff costs, and inflation in excess of pricing adjustments and cost improvements, with higher trade spend further impacting margin, despite improved volumes.
Home & Garden
(in millions, except %) December 28, 2025 December 29, 2024 Variance
Net sales $ 73.9 $ 92.1 $ (18.2) (19.8) %
Adjusted EBITDA 4.5 9.3 (4.8) (51.6) %
Adjusted EBITDA margin 6.1 % 10.1 % (400) bps
Net sales and organic net sales for the three month period decreased due to the earlier seasonal orders pulled forward by certain retail customers in the prior year plus the strategic pull forward of orders in the prior year period ahead of a system implementation, impacting all pest control product categories, plus improved e-commerce volumes during a historical lower volume period for the segment. Adjusted EBITDA and Adjusted EBITDA margin for the three month period decreased due to the lower volume, offset by productivity improvements and operating efficiencies, with some positive pricing adjustments to mitigate increased input costs from tariffs and inflation.
Home and Personal Care
(in millions, except %) December 28, 2025 December 29, 2024 Variance
Net sales $ 321.5 $ 348.1 $ (26.6) (7.6) %
Adjusted EBITDA 20.7 26.7 (6.0) (22.5) %
Adjusted EBITDA margin 6.4 % 7.7 % (130) bps
Net sales for the three month period decreased with an organic net sales decrease of $38.7 million, or 11.1%, excluding a favorable foreign currency impact of $12.1 million. Decrease in EMEA sales were attributable to softness in both Personal Care and Home Appliance product categories due to distribution timing and higher retail inventory following weaker than anticipated holiday sales reducing replenishment orders. North America sales decreased in both product categories were adversely impacted by overall consumer softness in light of increased product cost from tariffs and SKU rationalization actions in response to changes in trade policy to ensure overall profitability. LATAM sales increased with new product launches and improved volumes from successful holiday campaigns. Adjusted EBITDA and Adjusted EBITDA margins for the three month period decreased due to lower volumes, with higher tariff costs mostly mitigated through pricing adjustments and cost improvements, reduced investment spend, and favorable foreign currency.
Liquidity and Capital Resources
The following is a summary of cash flow from continuing operations for the three month periods ended December 28, 2025 and December 29, 2024, respectively.
(in millions) December 28, 2025 December 29, 2024
Operating activities $ 67.7 $ (71.9)
Investing activities (8.1) (5.9)
Financing activities (57.6) (97.3)
Cash Flows from Operating Activities
Cash flows provided by operating activities from continuing operations increased $139.6 million, due to lower investment in working capital with decreased volumes in H&G and HPC, improved collections on receivables, lower cash paid towards income taxes, and reduced spending on restructuring and separation initiatives.
Cash Flows from Investing Activities
Cash flows used in investing activities increased $2.2 million due to increased capital expenditures.
Cash Flows from Financing Activities
Cash flows used in financing activities decreased $39.7 million due to lower cash dividends and treasury share repurchase activity. During the three month periods ended December 28, 2025 and December 29, 2024, the Company made cash dividend payments of $0.47 per share, with total dividend payments decreasing due to fewer outstanding shares following treasury share repurchase activity.
Liquidity Outlook
Our ability to generate cash flows 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 our ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. Based upon our current and anticipated level of operations, existing cash balances, and availability under our credit facility, we expect cash flows from operations 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 retail 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 December 28, 2025, the Company had total cash and cash equivalents of $126.6 million and borrowing availability of $492.2 million under our credit facility with a total liquidity of $618.8 million.
We maintain a capital structure that we believe provides us with sufficient access to credit markets. When combined with strong levels of cash flow from operations, our capital structure has provided the flexibility necessary to pursue strategic growth opportunities and return value to our shareholders. The Company's access to capital markets and financing costs may depend on the Company's credit ratings. None of the Company's current borrowings are subject to default or acceleration as a result of a downgrading of credit ratings, although a downgrade of the Company's credit ratings could increase fees and interest charges on future borrowings. As of December 28, 2025, we were in compliance with all covenants under the Credit Agreement and the indentures governing the 3.375% Exchangeable Notes, due June 1, 2029 and the 3.875% Notes, due March 15, 2031.
Short-term financing needs primarily consist of working capital requirements, capital spending, periodic principal and interest payments on our long-term debt, and initiatives to support restructuring, integration or other strategic projects. Long-term financing needs depend largely on potential growth opportunities including acquisition activity, repayment or refinancing of our long-term obligations, and share repurchase activity, amongst others. Our long-term liquidity may be influenced by our ability to borrow additional funds, renegotiate existing debt, and raise equity under terms that are favorable to us. We also have long-term obligations associated with defined benefit plans with expected minimum required contributions that are not considered significant to the consolidated group.
The Company has continued to repurchase shares of common stock as further detailed in Note 9 - Shareholders' Equityin the Notes to the Condensed Consolidated Financial Statements. We may, from time to time, seek to repurchase additional shares of our common stock and any further repurchase activity will be dependent on prevailing market conditions, liquidity requirements and other factors.
A portion of our cash balance is located outside the U.S. given our international operations. We manage our worldwide cash requirements centrally by reviewing available cash balances across our worldwide group and the cost effectiveness with which this cash can be accessed. We generally repatriate cash from non-U.S. subsidiaries, provided the cost of the repatriation is not considered material. The counterparties that hold our deposits consist of major financial institutions.
The majority of our business is not considered seasonal with a year round selling cycle that is overall consistent during the fiscal year with the exception of our H&G segment. H&G sales typically peak during the first six months of the calendar year (the Company's second and third fiscal quarters) due to customer seasonal purchasing patterns and the timing of promotional activity. This seasonality requires the Company to ship large quantities of products ahead of peak consumer buying season that can impact cash flow demands to meet manufacturing and inventory requirements earlier in the fiscal year, as well as extended credit terms and/or promotional discounts throughout the peak season.
Other than the changes to debt obligations previously noted, there have been no material changes to our debt obligations, lease obligations, employee benefit obligations, or other contractual obligations or commercial commitments previously disclosed. We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting estimates as discussed in our 2025 Annual Report.
New Accounting Pronouncements
See Note 1 - Basis of Presentation and Significant Accounting Policiesin the Notes to the Condensed Consolidated Financial Statementsfor information about accounting pronouncements that are newly adopted and recent accounting pronouncements not yet adopted.
Guarantor Statements
Spectrum Brands, Inc. ("SBI") has issued the 3.375% Exchangeable Notes, due June 1, 2029, under the 2029 Indenture and the 3.875% Notes, due March 15, 2031, under the 2031 Indenture (collectively, the "Notes"). The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Spectrum Brands Holdings, Inc., as parent guarantor, and SBI's domestic subsidiaries. The Notes and the related guarantees rank equally in right of payment with all of SBI and the guarantors' existing and future senior indebtedness and rank senior in right of payment to all of SBI and the guarantors' future indebtedness that expressively provide for its subordination to the Notes and the related guarantees. Non-guarantor subsidiaries primarily consist of SBI's foreign subsidiaries. See Note 6 - Debtwithin the Notes to the Consolidated Financial Statementswithin the 2025 Annual Report.
The following financial information consists of summarized financial information of the Obligor, presented on a combined basis. The "Obligor" consists of the financial statements of SBI as the debt issuer, Spectrum Brands Holdings, Inc. as the parent guarantor, and the domestic subsidiaries of SBI as subsidiary guarantors. Intercompany balances and transactions between SBI and the guarantors have been eliminated. Investments in non-guarantor subsidiaries and the earnings or losses from those non-guarantor subsidiaries have been excluded.
Three Month Period Ended Year Ended
(in millions) December 28, 2025 September 30, 2025
Statements of Operations Data
Third party net sales $ 354.0 $ 1,665.4
Intercompany net sales to non-guarantor subsidiaries 12.5 53.1
Net sales 366.5 1,718.5
Gross profit 121.8 613.1
Operating loss (8.7) (6.9)
Intercompany dividend income
17.7 224.7
Net income from continuing operations 16.3 197.9
Net income 15.3 198.1
Net income attributable to controlling interest 15.3 198.1
Statements of Financial Position Data
Current assets $ 741.7 $ 781.5
Noncurrent assets 5,091.9 4,963.7
Current liabilities 444.3 732.9
Noncurrent liabilities 903.1 865.9
The Obligor's amounts due from, due to the non-guarantor subsidiaries as of December 28, 2025 and September 30, 2025 are as follows:
(in millions) December 28, 2025 September 30, 2025
Statements of Financial Position Data
Current receivables from non-guarantor subsidiaries $ 91.2 $ 119.8
Current note receivables from non-guarantor subsidiaries 17.7 20.8
Long-term note receivables from non-guarantor subsidiaries 283.3 -
Current payables to non-guarantor subsidiaries 96.5 81.2
Current debt with non-guarantor subsidiaries 63.5 376.5
Long-term debt with non-guarantor subsidiaries 1.8 1.8
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