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United States securities and exchange commission logo
April 22, 2024
Jeremy Smeltser
Chief Financial Officer
Spectrum Brands Holdings, Inc.
3001 Deming Way
Middleton, WI 53562
Re: Spectrum Brands
Holdings, Inc.
Form 10-K for
Fiscal Year Ended September 30, 2023
Response dated
March 29, 2024
File No. 001-04219
Dear Jeremy Smeltser:
We have reviewed your March 29, 2024 response to our comment
letter and have the
following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your response to this letter, we may have
additional comments. Unless
we note otherwise, any references to prior comments are to comments in
our March 15, 2024
letter.
Form 10-K for Fiscal Year Ended September 30, 2023
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Non-GAAP Measurements, page 34
1. Refer to your response
to prior comment 2 as it relates to the adjustments for the HPC
brand portfolio
transitions. We note from your response that the compensation costs for
retained personnel
appear to relate to your historical operations as they were incurred to
facilitate a transition
of an entire portfolio of branded products away from an expiring
licensed brand to a
newly acquired brand portfolio. As such, these costs do not appear to
be outside of the
company s normal operations and excluding them from your non-GAAP
measure would not be
consistent with the guidance in Question 100.01 of the Division of
Corporation Finance
Compliance & Disclosure Interpretations on Non-GAAP Financial
Measures. Please
provide us with a detailed description of these costs, including a clear
understanding of the
unprecedented facts and circumstances to which you refer in your
Jeremy Smeltser
FirstName LastNameJeremy Smeltser
Spectrum Brands Holdings, Inc.
Comapany
April NameSpectrum Brands Holdings, Inc.
22, 2024
April 222, 2024 Page 2
Page
FirstName LastName
response. Explain to us clearly why you believe the adjustments comply
with the stated
guidance.
2. Refer to your response to prior comment 2 as it relates to the
adjustments for other project
costs. Although you indicate in your response that your other projects
costs relate to
discrete events and projects, it appears that you have similar events
and projects in
multiple periods. As such, these costs do not appear to be outside of
the company s
normal operations and excluding them from your non-GAAP measure is not
consistent
with the guidance in Question 100.01 of the Division of Corporation
Finance Compliance
& Disclosure Interpretations on Non-GAAP Financial Measures. Please
provide us with a
detailed description of these costs and explain to us clearly why you
believe the
adjustments comply with the stated guidance.
3. Refer to your response to prior comment 2 as it relates to the
adjustments for unallocated
shared costs. You indicate that the adjustments reflect the indirect
costs incurred to
support the HHI segment at the time it was directly owned and operated
by the company
prior to its disposition, and that under U.S. GAAP, only direct costs
associated with the
disposed business can be accounted for as discontinued operations.
Please explain to us in
greater detail why these unallocated shared costs would not represent
normal, recurring,
cash operating expenses necessary to operate your business, and why
adjusting for such
costs in your non-GAAP measures would not be inconsistent with the
guidance in
Question 100.01 of the Division of Corporation Finance Compliance &
Disclosure
Interpretations on Non-GAAP Financial Measures.
4. Refer to your response to prior comment 2 as it relates to the
adjustments for legal and
environmental costs. Please describe to us in detail the events and
circumstances that led
to the legal and environmental costs reflected in the adjustments.
Specifically explain how
you concluded that these were significant and unusual non-recurring
matters that have no
previous historical context or precedent with your operations, revenue
generating
activities, business strategy, industry, and regulatory environment.
Explain to us in
sufficient detail why adjusting for these costs is consistent with the
guidance in Question
100.01 of the Division of Corporation Finance Compliance & Disclosure
Interpretations
on Non-GAAP Financial Measures.
5. Refer to your response to prior comment 2 as it relates to the
adjustments for HPC product
disposal. Given the nature of the company s business, please explain
to us why the
inventory cost and disposition costs to eliminate excess inventory
would not be considered
normal operating expenses, and why adjusting for these costs when
calculating your non-
GAAP measure is consistent with the guidance in Question 100.01 of the
Division of
Corporation Finance Compliance & Disclosure Interpretations on
Non-GAAP Financial
Measures.
6. Refer to your response to prior comment 2 as it relates to the
adjustments for HPC product
recall. Please describe to us in greater detail the products recalled,
the circumstances
leading to that recall, and quantify the category of costs (e.g., cash
reimbursements,
Jeremy Smeltser
Spectrum Brands Holdings, Inc.
April 22, 2024
Page 3
inventory replacement and disposition, third-party legal and
consultation costs, etc.)
recorded in each reported period. Elaborate on how the activities and
actions were event
driven and specific to responses required by the CPSC, and not
reflective of pervasive
matters that were previously existing. Given the nature of your
operations, tell us in
greater detail why these HPC product recall costs would not represent
normal operating
expenses of your business, and why adjusting for such costs in your
non-GAAP measures
would not be inconsistent with the guidance in Question 100.01 of the
Division of
Corporation Finance Compliance & Disclosure Interpretations on
Non-GAAP Financial
Measures.
Please contact Dale Welcome at 202-551-3865 or Martin James at
202-551-3671 if you
have questions regarding comments on the financial statements and related
matters.
FirstName LastNameJeremy Smeltser Sincerely,
Comapany NameSpectrum Brands Holdings, Inc.
Division of
Corporation Finance
April 22, 2024 Page 3 Office of
Manufacturing
FirstName LastName