Spectrum Brands Holdings, Inc.

Good day and thank you for standing by. Welcome to the Q3 2021 Spectrum Brands Holdings, Inc. 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. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Kevin Kim. Please go ahead.

Great. Thank you so much, Dawn. Welcome to Spectrum Brands Holdings Q3 2021 Earnings Conference Call and Webcast. To help you follow our comments, we've placed a slide presentation on the events 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 August 6th, 2021, and our most recent SEC filings and the 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 filing, which are both available on our website in the investor relations section. Now, I will turn the call over to David Mora.

Hey, thank you, Kevin, and good morning, everyone, and thanks, everyone, for joining us on today's call. As has become custom on these calls, I'd like to start by thanking our 12,000-plus employee partners around the globe. You have all overcome a lot over these past 18 months and I'm very proud of you. The management team and I appreciate each and every one of you. We should all be proud of our progress, which is further confirmation of the durability of our business and our winning playbook. Our teams have embraced both our global operating model and the spirit of our servant leadership culture. We've persevered through a global pandemic to deliver excellent and consistent financial performance for our stakeholders. And our fourth quarter financial results reflect another quarter of top and bottom line growth. And it reinforces that we are truly structured for growth and efficiency to serve our consumers, customers, and our stakeholders. On a year-to-date basis, our businesses have delivered 19% organic net sales growth and 36% EBITDA growth. The New Spectrum Brands is, in fact, a more efficient, focused, productive, and consistent operating company, and we are confident in our ability to manage through the near-term volatility, including the current inflationary headwinds and supply chain disruptions. We have and will manage through these challenges with the same discipline and collaboration that allowed Spectrum Brands to navigate the tariff headwinds in 2019 and the pandemic restrictions of 2020. We will emerge a more durable company with a more resilient supply chain. And we will continue to be driven by our values of trust, accountability, and collaboration to serve our mission, which is we make living better at home. Again, I want to thank you. Now, if I could have everyone turn to slide six, we again delivered top and bottom line growth in the quarter, and we continued to plant seeds for future growth with our investments in innovation, marketing, and advertising across each of our businesses. Our third quarter net sales grew 18.1%, driven by growth across all business units, with standout performance from HHI. This double digit top line performance also reflects 14% total company growth against our 2019 levels and reflects our actions over the last few years to reignite the flywheel of growth for our trusted brands. Now turning to the bottom line, third quarter net income from continuing operations was $34.9 million. And adjusted EBITDA was $167.4 million, mainly driven by HHI's organic growth. What I am actually most proud of this quarter is the discipline exhibited by all four business units, as our EBITDA this quarter included an additional $19 million in innovation, marketing, and advertising spend versus the period a year ago. The fact that our operators of our businesses continue to lean in and invest for long-term future growth, despite the current macro challenges, is evidence to me that the culture of this company has changed and we are truly focused on sustainable growth. I want to congratulate the team and thank them for continuing to invest in our businesses. Adjusted EPS grew 15.4%. despite headwinds from inflation and incremental investments in marketing and advertising, as our teams continued to focus on driving efficiencies from our global productivity improvement program and implementing pricing actions. We were also opportunistic this quarter with a share repurchase program, buying back over $10 million worth of Spectrum brand shares. Turning to slide seven. Headwinds from inflationary pressures stepped up in the quarter, as expected, driven by transportation and commodity costs. Both Jeremy and Randy will provide additional details during their prepared remarks. But despite these continued headwinds, we remain committed to delivering on our earnings framework with mid-teens net sales and adjusted EBITDA growth and adjusted free cash flow of $260 to $280 million. We will continue to focus on the disciplined execution of our winning playbook by investing in our people, continuing to drive a culture of servant leadership, empowering and resourcing our teams to win in the marketplace with news and excitement from new product introductions. If I could ask you to please turn to slide eight. Our balance sheet this quarter remains strong with net leverage of 3.6 times, and we have over $600 million in total liquidity. We also successfully closed on the Rejuvenate acquisition during the quarter for approximately $300 million, adding a fourth category to our ever-expanding home and garden business. Turning to 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, innovation, and advertising and promotion and marketing to drive the vitality of our business and drive profitable organic growth. Two, we plan to return cash to shareholders via dividends and opportunistic share repurchases. And third, we will continue with disciplined M&A with tuck-in strategic acquisitions that are synergistic and help drive value creation. I'm very pleased to report to all of our stakeholders that all of our recent acquisitions, including Omega C, Armitage, and Rejuvenate, are performing at or above our original deal expectations. We continue to target net leverage in the three to four times range. Now you'll hear more from Jeremy on the financials, and Randy will update you with additional business unit insights. I turn the call now over to you, Jeremy.