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SEGMENT INFORMATION | 9 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION Net sales relating to the segments for the three and nine month periods ended June 30, 2024 and July 2, 2023, are as follows:
|  | Three Month Periods Ended |  | Nine Month Periods Ended
(in millions) |  | June 30, 2024 |  | July 2, 2023 |  | June 30, 2024 |  | July 2, 2023
GPC |  | $ | 282.2 |  |  | $ | 272.3 |  |  | $ | 849.0 |  |  | $ | 846.5 |
H&G |  | 211.0 |  |  | 186.6 |  |  | 443.7 |  |  | 411.3 |
HPC |  | 286.2 |  |  | 276.6 |  |  | 897.5 |  |  | 920.3 |
Net sales |  | $ | 779.4 |  |  | $ | 735.5 |  |  | $ | 2,190.2 |  |  | $ | 2,178.1 |
The Chief Operating Decision Maker of the Company 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 •Share based compensation costs consist of costs associated with long-term incentive compensation arrangements that generally consist of non-cash, stock-based compensation. See Note 12 – Share Based Compensation for further details; •Incremental project costs associated with strategic transactions, restructuring and optimization initiatives including, but not limited to, the acquisition or divestitures of a business, costs to effect and facilitate a transaction, including such cost to integrate or separate the respective business, development and implementation of strategies to optimize operations, reduce costs, increase revenues, improve profit margins, including recognition of one-time exit or disposal costs. These amounts are excluded from our performance metrics as they are reflective of incremental investment by the Company towards strategic initiatives and business development activities. Incremental costs directly attributable to such initiatives are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments. Refer to the Strategic transactions, restructuring and optimization initiatives discussion within the Overview section, included elsewhere in this Quarterly Report, for further discussion; •Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value, and the incremental value in operating lease assets with below market rent, among others. During the three and nine month periods ended June 30, 2024 and July 2, 2023, the Company recognized non-cash expense due to the incremental value recognized as part of the Tristar Business acquisition on right of use operating leases with below market rent; •Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations, including impairments from property, plant and equipment, operating and finance leases, and goodwill and other intangible assets, when applicable. During the three month period ended June 30, 2024, the Company recognized impairment charges on a right of use operating lease asset associated with a HPC facility that was exited prior to the end of its term. See Note 6 - Property, Plant and Equipment, for further discussion. During the nine month period ended June 30, 2024, the Company recognized impairments of its Rejuvenate® and a non-core HPC tradename indefinite lived intangible assets, along with impairment charges on right of use operating lease assets associated with HPC distribution facilities that were exited prior to end of its term. See Note 7 - Goodwill and Intangibles and Note 6 - Property Plant and Equipment, for further discussion. During the three and nine periods ended July 2, 2023, the Company recognized impairment of indefinite lived intangible assets for its Rejuvenate® and PowerXL® indefinite lived tradenames, along with an impairment on idle equipment associated with the early exit of a GPC warehouse lease and impairments on right of use operating lease assets associated with GPC and HPC facilities that were exited prior to the end of their term; •Gain realized from proceeds received on the representation and warranties insurance policies associated with the Tristar Business acquisition realized during the nine month period ended June 30, 2024. Refer to Note 15 - Commitment and Contingencies for further details; •Incremental reserves for non-recurring litigation or environmental remediation activity attributable to significant and unusual nonrecurring matters with no previous history or precedent. During the three and nine month periods ended June 30, 2024 and July 2, 2023, such costs were directly attributable to legal costs incurred for the proceeds received from the representation and warranties insurance policies associated with the Tristar Business acquisition. Refer to Note 15 - Commitment and Contingencies for further details; •Gain or loss from the early extinguishment of debt realized through the repurchase or early redemption of outstanding debt obligations, net write-off of unamortized deferred debt issuance costs, during the three and nine month periods ended June 30, 2024 and July 2, 2023. See Note 8 - Debt for further details; •Incremental costs associated with the recognition of product recall costs incurred by the HPC segment in collaboration with the CPSC, initiated at the end of the year ended September 30 2022 and during the year ended September 30, 2023, resulting in the accrual and recognition of incremental costs for the recall, product returns from customers, write-off of inventory on hand, and other costs such as notification, shipping and handling, rework and destruction of affected products, and consumer refunds, as needed. Such costs are not recurring and directly attributable to the recall event, excluding all other costs associated with product warranty and returns. See Note 15 - Commitments and Contingencies for further details; •Unallocated shared costs reflect the costs associated with certain shared and center-led administrative functions such as information technology, human resources, finance and accounting, supply chain and commercial operations, supporting the HHI business during the period the Company owned and operated the business through the close of the HHI divestiture on June 20, 2023. Such costs are excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations in accordance of US GAAP, but reflected as part of income from continuing operations for all periods presented, and requiring retroactive adjustment for all periods presented. HHI was previously a segment of the consolidated group and was excluded from the consolidated Adjusted EBITDA since being recognized as discontinued operations. As a result, for all periods in which HHI was owned and operated by the Company, including comparable periods requiring retroactive adjustment, the adjustment is recognized to reconcile net income from continuing operations to Adjusted EBITDA of the remaining segments of the consolidated group. With the close of the HHI divestiture on June 20, 2023, there is no adjustment recognized as such shared costs are mitigated through income from TSAs during the transition period post-separation, with subsequent restructuring initiatives to rightsize extraneous costs. See Note 2 – Divestitures for further details; •Non-cash gain from the remeasurement in the contingent consideration liability associated with the Tristar Business acquisition during the nine month period ended July 2, 2023; •For the three and nine month periods ended July 2, 2023, the impact from the early settlement of foreign currency cash flow hedges during the year ended September 30, 2022, resulting in assumed losses at the original stated maturities of foreign currency cash flow hedges in our EMEA region that were settled early due to changes in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region, resulting in excluded gains intended to mitigate costs during the year ending September 30, 2023; and •Other adjustments are attributable to: (1) key executive severance and other one-time compensatory costs; and (2) non-recurring unusual insurable losses, including the receipt of related insurance proceeds. Segment Adjusted EBITDA for the reportable segments for the three and nine month periods ended June 30, 2024 and July 2, 2023, are as follows:
|  | Three Month Periods Ended |  | Nine Month Periods Ended |  |
(in millions) |  | June 30, 2024 |  | July 2, 2023 |  | June 30, 2024 |  | July 2, 2023 |  |
GPC |  | $ | 56.7 |  |  | $ | 53.6 |  |  | $ | 171.8 |  |  | $ | 137.1 |  |  |
H&G |  | 43.3 |  |  | 38.6 |  |  | 71.8 |  |  | 51.4 |  |  |
HPC |  | 11.8 |  |  | 11.4 |  |  | 56.3 |  |  | 22.7 |  |  |
Total segment adjusted EBITDA |  | 111.8 |  |  | 103.6 |  |  | 299.9 |  |  | 211.2 |  |  |
Corporate |  | 5.5 |  |  | 5.1 |  |  | (3.1) |  |  | 21.9 |  |  |
Interest expense |  | 15.7 |  |  | 30.3 |  |  | 51.8 |  |  | 95.3 |  |  |
Depreciation |  | 14.1 |  |  | 12.1 |  |  | 42.9 |  |  | 36.2 |  |  |
Amortization |  | 11.1 |  |  | 10.5 |  |  | 33.4 |  |  | 31.4 |  |  |
Share based compensation |  | 4.5 |  |  | 4.8 |  |  | 12.9 |  |  | 12.5 |  |  |
HHI divestiture and separation costs |  | 0.9 |  |  | 4.0 |  |  | 3.0 |  |  | 6.9 |  |  |
HPC separation initiatives |  | 5.4 |  |  | 0.5 |  |  | 8.5 |  |  | 4.0 |  |  |
Tristar integration |  | — |  |  | 1.0 |  |  | — |  |  | 10.7 |  |  |
Fiscal 2023 and 2022 restructuring |  | 0.1 |  |  | 0.9 |  |  | 0.9 |  |  | 6.0 |  |  |
Global ERP transformation |  | 4.3 |  |  | 3.7 |  |  | 11.2 |  |  | 8.5 |  |  |
Russia closing initiative |  | (0.1) |  |  | 0.2 |  |  | — |  |  | 2.9 |  |  |
Other project costs |  | 0.3 |  |  | 1.9 |  |  | 0.5 |  |  | 13.7 |  |  |
Non-cash purchase accounting adjustments |  | 0.2 |  |  | 0.5 |  |  | 1.1 |  |  | 1.4 |  |  |
Impairment of equipment and operating lease assets |  | 5.1 |  |  | 3.6 |  |  | 5.6 |  |  | 8.1 |  |  |
Impairment of goodwill |  | — |  |  | 111.1 |  |  | — |  |  | 111.1 |  |  |
Impairment of intangible assets |  | — |  |  | 53.7 |  |  | 43.0 |  |  | 120.7 |  |  |
Representation and warranty insurance proceeds |  | — |  |  | — |  |  | (65.0) |  |  | — |  |  |
Legal and environmental |  | 0.8 |  |  | 1.5 |  |  | 2.2 |  |  | 1.5 |  |  |
Loss (gain) from early extinguishment of debt |  | 2.2 |  |  | 8.6 |  |  | (2.6) |  |  | 8.6 |  |  |
HPC product recall |  | 0.6 |  |  | 1.9 |  |  | 6.6 |  |  | 3.8 |  |  |
Unallocated shared costs |  | — |  |  | 5.3 |  |  | — |  |  | 18.1 |  |  |
Gain from remeasurement of contingent consideration liability |  | — |  |  | — |  |  | — |  |  | (1.5) |  |  |
Early settlement of foreign currency cash flow hedges |  | — |  |  | 0.7 |  |  | — |  |  | 4.6 |  |  |
Other |  | (0.4) |  |  | — |  |  | 0.3 |  |  | 5.0 |  |  |
Income (loss) from continuing operations before income taxes |  | $ | 41.5 |  |  | $ | (158.3) |  |  | $ | 146.7 |  |  | $ | (320.2) |  |  |

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