Spectrum Brands Holdings, Inc.

Good morning, ladies and gentlemen, and welcome to the first quarter 2021 Spectrum Brands Holdings Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Kevin Kim. Thank you. Please go ahead.

Great. Thank you so much, Jerome. I'm Kevin Kim, Divisional Vice President of Investor Relations and moderator for today's call. To help you follow our comments, we've placed a slide presentation on the event calendar page in the investor relations section of our website at www.spectrumbrands.com. This document will remain there following our call. Starting with slide two of the presentation, our call will be led by David Mora, Chairman and CEO, Jeremy Smeltzer, Chief Financial Officer, and Randy Lewis, our Chief Operating Officer. After their opening remarks, we will conduct the Q&A. Turning to slides three and four, our comments today include forward-looking statements, which are based upon management's current expectations, projections, and assumptions, and are by nature uncertain. Actual results may differ materially. Due to that risk, Spectrum Brands encourages you to review the risk factors and cautionary statements outlined in our press release dated February 5th, 2021, and our most recent SEC filings. and Spectrum Brands Holdings' most recent annual report on Form 10-K and quarterly reports on Form 10-Q. We assume no obligation to update any forward-looking statements. Also, please note, we will discuss certain non-GAAP financial measures on this call. Reconciliations on a GAAP basis for these measures are included in today's press release and 8-K filing, which are both available on our website in the Investor Relations section. And now, let me turn the call over to David Moore.

Well, thank you, Kevin, and good morning, everyone. We appreciate you joining us this morning. Before I get started today, I want to take a moment to speak directly to our employees and our partners around the world. Thank you. I want to thank you for your commitment to our company. You have embraced both our global productivity improvement program and the spirit of our servant leadership culture. You have persevered through a global pandemic to deliver excellent financial performance for our stakeholders. Because of you, the new Spectrum Brands is emerging now as a more efficient, focused, productive, and consistent operating company. We are a company on the move again, and it's all because of your hard work that's now beginning to pay off. So again, I thank you. We can now turn to slide six, our financial results for the first quarter. reflected another quarter of exceptional top-line growth and operating leverage, with adjusted EBITDA doubling to $204 million. This growth was a combination of delivering on strong demand for our products as a home essentials company and restocking of retailer inventory levels. More importantly, our first quarter performance reflected yet another quarter for our long-term stakeholders. Additionally, during the quarter, we repurchased $42.3 million worth of Spectrum brand shares, and by the end of January, we sold our remaining Energizer shares, which further strengthens our balance sheet and adds to our liquidity position. Our first quarter sales growth of 31% reflected growth across all business units. with another quarter of strong POS and improved supply chain performance. As discussed on our prior earnings call, all of our businesses continued to benefit from supply chain recovery, particularly in our hardware and home improvement business, which was a big contributor to this quarter's results, with sales up 37%, or $111 million. We achieved double-digit growth across all business units and our e-commerce sales growth was over 54% this quarter. If I turn your attention to the bottom line, Q1 adjusted EBITDA doubled, which reflects productivity improvements across all business units from our global productivity improvement program and favorable mix, as well as our supply chain continuing to drive output and improve our service levels. As we outlined during our last earnings call, Our reinvestment continues to reignite the flywheel of new product launches and improve our top line organic growth rate. It is expanding our margins and it is driving greater profitability and cash flow generation throughout our company. If I could turn your attention now to slide seven. During the first quarter and now into the second quarter, like many CPG companies, We have started to experience transportation and commodity-related inflation significantly higher than our original expectations for the year. And at this point in time, we estimate the impact of this at approximately $70 to $80 million for our full year. But it's a rapidly changing environment, particularly for ocean freight. However, despite these headwinds, our strong start to the year and continued strong POS give us confidence in raising our earnings framework to reflect high single-digit net sales and adjusted EBITDA growth. And as we said at the start of the year, we still expect that growth to be front-half weighted. If I can move you to slide eight now. As I said last quarter, we believe we are better positioned today than we have ever been to drive demand as a home essential company, with customers needing and desiring our brands and products more than ever. Our first quarter performance reflects another quarter of wins, and we expect to continue winning in the future as the flywheel of investing in consumer insights, innovation, marketing propels our brands and products to new heights. we will continue to focus on execution of our winning playbook, leveraging our strong manufacturing and distribution footprints. On slide nine, going forward, our capital allocation priorities will continue to focus on one, allocating capital internally to our highest return opportunities, and this includes strengthening our brands through consumer insights, research development, new innovation, new product launches, and advertising and marketing, all to drive vitality and profitable organic growth. Two, we will continue to plan to return cash to our shareholders via both dividends and opportunistic share repurchases. And third, we will remain disciplined on the M&A front with tucked-in strategic acquisitions that are both synergistic and help drive significant value creation. This includes our focus on our target leverage ratio in the three to four times range. You're going to hear more now from Jeremy on the financials, and Randy will give you a more in-depth update on the additional business unit insights. So let me turn the call over to Jeremy at this time.