Spectrum Brands Holdings, Inc.

Good day and thank you for standing by. Welcome to the Q2 2021 Spectrum Grants Holding Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad If you require any further assistance, please press star zero. I would now like to hand the conference over to our speaker for today, Kevin Kim. Please go ahead.

Thank you, Francis. Welcome to Spectrum Brands Holdings Q2 2021 Earnings Conference Call and Webcast. I'm Kevin Kim, Divisional VP 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 Chief Executive Officer, Jeremy Smeltzer, Chief Financial Officer, and Randy Lewis, 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 May 7th, 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 statement. Also, please note we will discuss certain non-GAAP financial measures in 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. I will now turn the call over to David Moore.

Hey, thank you, Kevin. Good morning, everybody. Thank you for joining us for the call today. Before I get started, I want to take a moment and speak directly to our employees and our partners around the world. While our work is far from complete, our financial results reflect another quarter of strong top and bottom line growth. and further confirm that we are structuring for growth and efficiency to serve our consumers, customers, and stakeholders. I'm also very proud of the progress we've made these past three years. Our teams have embraced both our new global operating model and the spirit of our servant leadership culture. They've also persevered through a global pandemic to deliver excellent and consistent financial performance for our stakeholders. Because of you, our employees, the new Stuckton Brands has emerged a more efficient, focused, productive, and consistent operating company. We will continue to be driven by our values of trust, accountability, and collaboration to serve our mission as we make living better at home. Again, I thank you. Much appreciation. If I could have your attention now turn to slide 6. Our latest financial results for the second quarter reflect another excellent quarter of top-line growth and operating leverage. Our investments in marketing and advertising for our trusted brands were higher in each of our business units, and this continued to drive strong demand this quarter. Our second quarter revenue grew 22.6% as we achieved double-digit growth across all of our business units, and our e-commerce sales grew grew nearly 43%. Turning to the bottom line, second quarter adjusted EBITDA increased 28.8%, driven by higher volumes and improved efficiencies from our global productivity improvement program. Our operating leverage also improved, despite higher inflation and incremental investments that we're making in marketing and advertising. As we outlined during our prior earnings calls, our reinvestments continue to reignite the flywheel of new product launches, improving our top-line growth, expanding our margins, and driving greater profitability and cash flow generation. If I could have everyone turn now to slide 7. As has been well documented, transportation and commodity-related inflation continue to negatively impact our industry. Consistent with our highlights last quarter, we expect these headwinds to more heavily impact the second half of the year. Jeremy and Randy will provide additional detail during their prepared remarks, but despite these headwinds, our stellar first-half performance and our continued organic growth give us confidence in again raising our earnings framework to reflect mid-teens net sales and adjusted EBITDA growth, adjusted free cash flow of $260 to $280 million. We are well positioned going into the third quarter, and while we recognize tough comparisons as we last year's fourth quarter performance, we will continue to focus on disciplined execution of our winning playbook. leveraging our stable manufacturing and distribution footprint, and investing behind our strong brands. We remain laser-focused on capturing gross GPIP savings, and in fact, our teams are targeting incremental savings for 2022. Randy will highlight that in more detail later on. Our new operating model and deliberate investments behind our business units over the last few years have built a stronger and much more resilient company. and we continue to expect long-term growth. Now moving to slide eight. Our balance sheet this quarter improved sequentially, ending the quarter with net leverage of 3.2 times and maintaining over $860 million in total liquidity. Our actions earlier this quarter to refinance our debt are expected to reduce our annual interest expense by $18 million a year. As a reminder, we issued $900 million of total debt with a mix of term loan B and a new 10-year 3-7-8 senior notes, which will lower our cost of capital. As announced in April, we are very excited to add the recent acquisition of Rejuvenate to our portfolio. Rejuvenate is a leading developer and marketer of household cleaning products, maintenance, and restoration products with an incredible loyal following. We expect the transaction to close in the third quarter, and this fits perfectly with our company's strategy to make living better at home, and it adds a fourth category to our home and garden business unit. I want to extend a big welcome to the Rejuvenate team as they join our family here at Spectrum Brands. I'm confident in our ability to create tremendous value together. Turning to slide 9. Going forward, our capital allocation priorities continue to focus on, one, allocating capital internally to our highest return opportunities, and this includes strengthening our brands through consumer insights, research and development, innovation, and advertising and marketing to drive vitality and profitable organic growth. Two, we plan to return cash to our shareholders via dividends and opportunistic share repurchases. Third, disciplined M&A with tuck-in strategic acquisitions that are synergistic and help drive value creation. We will continue to target a net leverage ratio in the three to four times range. Now you'll hear more from Jeremy on the financials, and Randy will give you an update and additional business insights. Over to you, Jeremy.