Spectrum Brands Holdings, Inc. (NYSE:SPB) Q1 2020 Earnings Conference Call - Final Transcript

Jan 30, 2020 • 09:00 am ET


Spectrum Brands Holdings, Inc. (NYSE:SPB) Q1 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 Spectrum Brands Holdings Incorporated Earnings Conference Call.

[Operator Instructions]

After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Kevin Kim. Thank you, and please go ahead, sir.

Kevin Kim

Thank you, Chris. Welcome to Spectrum Brands Holdings' fiscal 2020 Q1 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 have placed a slide presentation on the event calendar page of 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 Maura, Chairman and Chief Executive Officer; Jeremy Smeltser, Chief Financial Officer; and Randy Lewis, our Chief Operating Officer. After their opening remarks, we will conduct the Q&A session.

Our comments today include forward-looking statements, including our outlook for fiscal 2020 and beyond. These statements 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 January 30, 2020, 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 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 Maura.

David M. Maura

Hey, good morning. Thanks, Kevin, and good morning, everybody. Thanks for joining us today for our first quarter conference call. As I stated on our last earnings call, fourth quarter of fiscal 2019, we expected to have a debit in our first quarter performance starting in 2020, and then to regain momentum in the balance of the year. In this quarter, we just reported organic sales were essentially flat with our adjusted EBITDA down 11.4%. The first quarter decline in adjusted EBITDA was in line with our expectations is tariffs exceeded the ramp-up of our productivity improvements. We expect to resume sales growth this quarter, and additionally our Global Productivity Improvement Plan is expected to catch up to our tariff headwinds.

On the topline, we did experience organic growth in our Home & Personal Care divisions and in PET, and while timing issues in our Home & Garden and HHI segments drove us flat overall. We continue to expect net sales, Adjusted EBITDA and free cash flow growth in 2020.

If I could have you turn to slide seven, we are executing on our strategic plan and delivering full-year revenue growth is a