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Segment Information | 9 Months Ended
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Jun. 30, 2018
Segment Information [Abstract] |
Segment Information | NOTE 18 - SEGMENT INFORMATION ﻿ The HRG reportable business segments were historically organized in a manner that reflected HRG’s management views of those business activities prior to the Spectrum Merger. Accordingly, the Company is currently presenting the results from its business operations in two reportable segments: (i) Consumer Products and (ii) Corporate and Other. The HRG’s Corporate and Other segment includes ownership in Salus. The following schedule presents the HRG segment information for the three and nine month periods ended June 30, 2018 and 2017. ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Three month periods ended |  | Nine month periods ended
﻿(in millions) |  | June 30, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | June 30, 2017
﻿Revenues |  |  |  |  |  |  |  |  |  |  |  |
﻿Consumer products |  | $ | 945.5 |  | $ | 862.9 |  | $ | 2,358.1 |  | $ | 2,221.6
﻿Corporate and other |  |  | — |  |  | 0.1 |  |  | — |  |  | 1.1
﻿Total revenues |  | $ | 945.5 |  | $ | 863.0 |  | $ | 2,358.1 |  | $ | 2,222.7
﻿Operating income |  |  |  |  |  |  |  |  |  |  |  |
﻿Consumer products |  | $ | 133.3 |  | $ | 110.9 |  | $ | 210.4 |  | $ | 277.1
﻿Corporate and other |  |  | (7.0) |  |  | (10.2) |  |  | (29.6) |  |  | (39.9)
﻿Total operating income |  |  | 126.3 |  |  | 100.7 |  |  | 180.8 |  |  | 237.2
﻿Interest expense |  |  | 63.5 |  |  | 76.1 |  |  | 206.6 |  |  | 232.4
﻿Other (expense) income, net |  |  | (2.3) |  |  | 1.3 |  |  | (4.6) |  |  | 1.7
﻿Income (loss) from continuing operations before income taxes |  | $ | 65.1 |  | $ | 23.3 |  | $ | (21.2) |  | $ | 3.1
﻿ As a result of the Spectrum Merger effective July 13, 2018, subsequent to the fiscal period end date of June 30, 2018 and prior to the issuance of this Quarterly Report, management of the Company transitioned to Spectrum’s management. See Note 4 – Acquisitions for further details on the Spectrum Merger. Spectrum identifies its segments based upon the internal organization that is used by Spectrum management for making operating decisions and assessing performance as the source of its reportable segments. As of the date of the merger, the Company changed its operating and reporting segments to be consistent with the segment reporting of Spectrum. Spectrum manufactures, markets and/or distributes multiple product lines through various distribution networks, and in multiple geographic regions. Spectrum manages its continuing operations in vertically integrated, product-focused reporting segments: (i) Hardware & Home Improvement, which consists of the Spectrum’s worldwide hardware, security and plumbing business; (ii) Global Pet Supplies, which consists of the Spectrum’s worldwide pet supplies business; (iii) Home and Garden, which consists of the Spectrum’s home and garden and insect control business and (iv) Global Auto Care, which consists of the Spectrum’s automotive appearance and performance products. Global strategic initiatives and financial objectives for each reportable segment are determined at the corporate level. Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives, and has a general manager responsible for the sales and marketing initiatives and financial results for product lines within the segment. Net sales relating to the segments of Spectrum for the three and nine month periods ended June 30, 2018 and June 30, 2017 are as follows:
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Three month periods ended |  | Nine month periods ended
﻿(in millions) |  | June 30, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | June 30, 2017
﻿HHI |  | $ | 372.4 |  | $ | 324.7 |  | $ | 1,016.8 |  | $ | 927.2
﻿PET |  |  | 194.7 |  |  | 190.0 |  |  | 608.3 |  |  | 576.0
﻿H&G |  |  | 203.2 |  |  | 192.4 |  |  | 370.6 |  |  | 374.2
﻿GAC |  |  | 175.2 |  |  | 155.8 |  |  | 362.4 |  |  | 344.2
﻿Net sales |  | $ | 945.5 |  | $ | 862.9 |  | $ | 2,358.1 |  | $ | 2,221.6
﻿ The Chief Operating Decision Maker of Spectrum uses Adjusted EBITDA as the primary operating metric in evaluating the business and making operating decisions. EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA further excludes (1) share based compensation expense as it is a non-cash based compensation cost; (2) acquisition and integration costs that consist of transaction costs from acquisition transactions during the period, or subsequent integration related project costs directly associated with the acquired business; (3) restructuring and related costs, which consist of project costs associated with restructuring initiatives across the segments; (4) non-cash purchase accounting inventory adjustments recognized in earnings subsequent to an acquisition; (5) non-cash asset impairments or write-offs realized; (6) incremental costs associated with the safety recall in PET; (7) transaction costs associated with the Spectrum Merger (see Note 4 - Acquisitions for further details); (8) non-recurring HRG net operating costs considered to be redundant or duplicative as a result of the Spectrum Merger and not considered a component of the continuing commercial products company post-merger, including compensation and benefits, directors fees, professional fees, insurance, public company costs, amongst others, and including interest and other non-recurring income that will ultimately be eliminated following the transaction, (9) net operating results from Salus as they are not considered a component of the continuing commercial products company; and (10) other. During the three and nine month period ended June 30, 2018, other consisted of separation costs with a senior executive. Segment Adjusted EBITDA in relation to the SBH reportable segments for the three and nine month periods ended June 30, 2018 and 2017 are as follows: ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Three month periods ended |  | Nine month periods ended
﻿SBH (in millions) |  | June 30, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | June 30, 2017
﻿HHI |  | $ | 73.9 |  | $ | 62.2 |  | $ | 179.5 |  | $ | 178.0
﻿PET |  |  | 34.9 |  |  | 36.1 |  |  | 104.6 |  |  | 98.7
﻿H&G |  |  | 57.0 |  |  | 59.5 |  |  | 87.7 |  |  | 100.8
﻿GAC |  |  | 50.1 |  |  | 50.7 |  |  | 84.7 |  |  | 115.9
﻿Total Segment Adjusted EBITDA |  |  | 215.9 |  |  | 208.5 |  |  | 456.5 |  |  | 493.4
﻿Corporate expenses |  |  | 9.5 |  |  | 9.2 |  |  | 28.8 |  |  | 28.7
﻿Depreciation and amortization |  |  | 32.2 |  |  | 32.9 |  |  | 99.4 |  |  | 94.3
﻿Share-based compensation |  |  | 5.3 |  |  | 5.0 |  |  | 6.4 |  |  | 28.5
﻿Acquisition and integration related charges |  |  | 2.3 |  |  | 5.2 |  |  | 12.0 |  |  | 11.6
﻿Restructuring and related charges |  |  | 25.4 |  |  | 21.2 |  |  | 69.0 |  |  | 31.3
﻿Interest expense |  |  | 63.5 |  |  | 76.1 |  |  | 206.6 |  |  | 232.4
﻿Inventory acquisition step-up |  |  | — |  |  | 0.8 |  |  | 0.8 |  |  | 0.8
﻿Pet safety recall |  |  | 5.1 |  |  | 24.9 |  |  | 16.3 |  |  | 24.9
﻿HRG merger related transaction charges |  |  | 3.1 |  |  | 1.4 |  |  | 22.0 |  |  | 4.2
﻿Non-recurring HRG operating costs |  |  | 1.2 |  |  | 7.8 |  |  | 11.9 |  |  | 28.6
﻿Salus |  |  | (0.1) |  |  | 0.7 |  |  | 1.2 |  |  | 5.0
﻿Other |  |  | 3.3 |  |  | — |  |  | 3.3 |  |  | —
﻿Income (loss) from operations before income taxes |  | $ | 65.1 |  | $ | 23.3 |  | $ | (21.2) |  | $ | 3.1
NOTE 18 - SEGMENT INFORMATION (continued) ﻿ SBRH reportable segments are consistent to Spectrum reportable segments. Segment Adjusted EBITDA in relation to the SBRH reportable segments for the three and nine month periods ended July 1, 2018 and July 2, 2017 are as follows: ﻿ ﻿ ﻿ ﻿ ﻿ ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Three month periods ended |  | Nine month periods ended
﻿SBRH (in millions) |  | July 1, 2018 |  | July 2, 2017 |  | July 1, 2018 |  | July 2, 2017
﻿HHI |  | $ | 73.9 |  | $ | 62.2 |  | $ | 179.5 |  | $ | 178.0
﻿PET |  |  | 34.9 |  |  | 36.1 |  |  | 104.6 |  |  | 98.7
﻿H&G |  |  | 57.0 |  |  | 59.5 |  |  | 87.7 |  |  | 100.8
﻿GAC |  |  | 50.1 |  |  | 50.7 |  |  | 84.7 |  |  | 115.9
﻿Total Segment Adjusted EBITDA |  |  | 215.9 |  |  | 208.5 |  |  | 456.5 |  |  | 493.4
﻿Corporate expenses |  |  | 9.4 |  |  | 8.9 |  |  | 28.2 |  |  | 28.4
﻿Depreciation and amortization |  |  | 32.2 |  |  | 32.9 |  |  | 99.3 |  |  | 94.1
﻿Share-based compensation |  |  | 4.5 |  |  | 3.9 |  |  | 4.0 |  |  | 21.6
﻿Acquisition and integration related charges |  |  | 2.3 |  |  | 5.2 |  |  | 12.0 |  |  | 11.6
﻿Restructuring and related charges |  |  | 25.4 |  |  | 21.2 |  |  | 69.0 |  |  | 31.3
﻿Interest expense |  |  | 43.6 |  |  | 39.8 |  |  | 124.2 |  |  | 122.0
﻿Inventory acquisition step-up |  |  | — |  |  | 0.8 |  |  | 0.8 |  |  | 0.8
﻿Pet safety recall |  |  | 5.1 |  |  | 24.9 |  |  | 16.3 |  |  | 24.9
﻿Other |  |  | 3.3 |  |  | — |  |  | 3.3 |  |  |
﻿Income from continuing operations before income taxes |  | $ | 90.1 |  | $ | 70.9 |  | $ | 99.4 |  | $ | 158.7
﻿

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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