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Spectrum Brands Holdings Inc  (NYSE:SPB)
Q1 2019 Earnings Conference Call
Feb. 07, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning. My name is Natalia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spectrum Brands Fiscal 2019 First Quarter Earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question-and-answer period. (Operator Instructions) As a reminder, ladies and gentlemen, this conference is being recorded today, Thursday, February 7.

Thank you. I would now like to introduce Mr. David Prichard, Vice President of Investor Relations for Spectrum Brands. Mr. Prichard, you may begin your conference.

David Prichard -- Vice President of Investor Relations

Thank you, operator, and welcome to Spectrum Brands Holdings fiscal 2019 first quarter earnings conference call and webcast. I'm Dave Prichard, Vice President of Investor Relations for Spectrum Brands and your moderator for our call today. Now, to help you follow our comments, we have placed a slide presentation on the Event Calendar page in the Investor Relations section of our website at spectrumbrands.com. This document will remain there following our call.

So if you start by turning to slide two of the presentation, you will see that our call will be led today by David Maura, our Chairman and Chief Executive Officer; and Doug Martin, our Chief Financial Officer. David and Doug will deliver opening remarks and then they will conduct the Q&A session.

If we turn to slide three, and also slide four, we want to note that our comments today do include forward-looking statements, including our outlook for fiscal 2019 and beyond. These statements are based upon management's current expectations, projections and assumptions and are by nature uncertain. Actual results may differ materially. Now, due to that risk, Spectrum Brands encourages you to review the risk factors and cautionary statements outlined in our press release dated February 7, 2019, and our most recent SEC filings and Spectrum Brands Holdings most recent 10-K. We assume no obligation to update any forward-looking statement.

Also, please note that 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-K filing, which are both available on our website in the Investor Relations section.

With that, I will now turn the call over to our Chairman and CEO, David Maura.

David M. Maura -- Chairman and Chief Executive Officer

Hey, thank you, Dave, and thanks, everybody, for joining us today for this call. Before jumping to our Q1 results, which I guess, I need to tell you to turn to slide six. I want to highlight some of our strategic achievements. We are exiting a period of significant transition and we are now entering a period of stability with meaningful operational opportunities.

In January, we made major progress in completing our transformation into a meaningfully less leveraged and much more focused consumer products company with materially increased financial strength and flexibility to drive our long-term growth ambitions.

We closed on the divestiture of both our Global Battery and our Lighting businesses, and we also sold our Global Auto Care business. These two asset sales brought us to combined gross cash proceeds of approximately $2.9 billion along with 5.3 million shares that Energizer issued to us, making us one of their largest shareholders.

We also were able to utilize capital and net operating losses to minimize cash taxes on these transactions.

Using the battery and auto care proceeds, we moved quickly in January to repay in full all of our cash flow revolver, which had about $114 million on it at the time. We prepaid in full all of our US term loans for totaling approximately $1.23 billion and we just recently last week redeemed all of our $890 million of our 7.75% notes. These were the former HRG bonds. These actions reduced our debt by over $2.2 billion and represent major progress to achieve our goal to significantly delever and strengthen our balance sheet, materially reduce our cash interest payments for the balance of this year and beyond and further improve the tenor of our obligations.

As a result of these steps early this year, we are on track to achieve our leverage target of approximately 3.5 times at the end of this fiscal year. As we have a delevered balance sheet, we may look to repurchase our shares under the repurchase agreement in the open market or otherwise from time to time.

If I could have everyone turn to slide seven. Now, turning specifically to the quarter, Q1 is traditionally the smallest quarter of our year and we delivered results that were generally in line with our expectations. We also continue to expect the second half of 2019 to be larger than the first half for both sales and EBITDA, driven by the seasonality of our Home & Garden and typically the stronger back half we experienced in HHI.

We're very pleased by the strong start this fiscal year in our Pet Care. Although Q1 growth was just 2% organic growth, it was led by a double-digit increase in the United States markets. As a turnaround of this business is now under way, we're continuing to focus our efforts to improve the Pet performance in Europe, primarily the dog and cat food assets.

HHI faced a difficult comp this quarter, it had a 13% net sales growth in the period last year and that was driven largely by hurricane-related -- hurricane recovery revenue in retail, it was also driven by two significant non-repeating promotional load-ins last year to significant customers and quite frankly, the impacts this year from a softer US housing market and we began to see the effects of that late this November. We've now must work closely with our retail customers to drive this business forward despite the recent headwinds in the new housing markets, which again we began to see in November. We still expect a strong performance from HHI this year, driven by strong innovation, such as the recent unveiling of a new line of Wi-Fi-enabled Halo smart locks at the Consumer Electronics Show just this past January.

As expected, our Home Appliance and Personal Care business started slowly. We're reintegrating this business and we stood the business back up this quarter. We're focused on improving the business fundamentals and we're lapping difficult first half comps. Additionally, we're increasing -- materially increasing investment spend to drive innovation throughout the year and into 2012. We are stabilizing Home and Personal care and we are expecting improved performance as we move through the year.

As a terrific example of the new thinking about the business, this morning, we're excited to announce a major new global five-year partnership between our Remington personal care brands and the Manchester United football team. This is an alliance that we believe will showcase the depth and the strength of our Remington line worldwide and begin the process of further strengthening the amazing brand equity inherent to this business unit.

Home & Garden had slightly lower sales and that was due to the absence of a strong prior-year revenue from the aftermath of Hurricane Maria that we had in Puerto Rico. Q1 is Home & Garden's seasonally smallest quarter, representing only about 10% of its full-year sales; we expect sales and EBITDA growth for Home & Garden this year, driven by new distribution wins and improved product mix.

Now, if we look at the full year fiscal 2019 outlook and you can turn to slide eight for that. We are today reiterating our fiscal 2019 adjusted EBITDA guidance of $560 million to $580 million versus a 2018 pro forma adjusted EBITDA of $581 million for the same four continuing businesses. This guidance includes the impact of a significant increase in targeted and impactful investments in advertising, material, new product development initiatives and marketing to improve both the vitality and the strength of our product offering to put Spectrum Brands back on a meaningful growth trajectory beginning in 2020.

2019 is a year of focus for Spectrum Brands. It's a year where we will materially step-up investment spending behind our major brands, and the continued alignment of our organizational structure and operating processes to streamline our activities and reduce waste. We are establishing clear lines of accountability and this is providing for quicker decision-making, behind a much stronger balance sheet with ample liquidity.

In closing, our team is singularly focused on creating shareholder value by strengthening and innovating behind our strong portfolio of leading consumer brands, delivering operational excellence in our manufacturing facilities and supply chain, and providing all of this with exceptional customer service. In short, we are becoming the faster, smarter, stronger Spectrum Brands of the future and we are being driven now by vision, clarity and focus.

With that, I will turn it over to Doug.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Thanks, David, and good morning, everyone. Turning to slide 10 and a review of Q1 results from continuing operations, and we'll begin with net sales. First quarter reported net sales of $874.6 million decreased 4.9% versus last year, excluding unfavorable foreign currency of $13.6 million, organic net sales fell 3.4%. Higher Pet sales were more than offset by lower Home & Personal Care and Hardware & Home Improvement revenue.

Reported gross margin of 34.9% increased 30 basis points from 34.6% last year primarily due to product mix.

Reported SG&A expense of $259.6 million, or 29.7% of sales, compared to $233.5 million, or 25.4% of sales last year, primarily due to the one-time recapture of $29 million of non-cash depreciation and amortization charges that were not recorded last year due to Home & Personal Care's discontinued operation status, as well as lower acquisition and integration and restructuring and related costs this year.

I'm going to just take a minute and talk about this depreciation and amortization adjustment this year because it not only affects this quarter, but also the remaining quarters in the year. This adjustment is a catch-up adjustment -- a non-cash catch-up adjustment required as we put the HPC business back into continuing operations, for depreciation and amortization that would have been recorded in Q2, Q3 and Q4 of 2018. All of that catch-up was recorded in Q1 of 2019. So going forward, it will also impact our year-over-year comparisons for 2019 Q2, Q3 and Q4, because last year will have zero. Depreciation and amortization this year will have roughly $10 million in each quarter.

Moving on then to reported operating margin, also impacted by this depreciation and amortization adjustment at 2.8% margin in the quarter versus 5.6% in the prior year.

On a reported basis, Q1 diluted loss per share from continuing operations of $0.56 decreased compared to diluted income per share of $1.24 last year, primarily due to the recapture of $29 million of non-cash depreciation and amortization, lower interest expense, a tax benefit last year attributable to US tax reform, and higher shares outstanding this year as a result of the HRG merger.

Spectrum only adjusted diluted loss per share from continuing operations of $0.20 decreased versus adjusted diluted EPS of $0.68 last year, primarily due to the Home & Personal Care depreciation and amortization adjustment, which contributed about $0.41 to the decline, as well as lower volume and an income tax benefit in last year's first quarter due to US tax reform.

Turning to slide 11, reported interest expense from continuing operations in the first quarter of $57 million decreased $18.4 million from $75.4 million last year due to the paydown of HRG-related debt.

Spectrum only cash interest payments of $56 million were $1.5 million lower than last year, driven by the timing of payments on our cash flow revolver.

Spectrum only cash taxes of $10 million were flat compared to last year, and in addition, we incurred about $12 million of taxes for activities related to our battery business carve-out.

Spectrum only depreciation, amortization and share-based compensation from continuing operations of $72 million increased from $43 million last year, primarily due to the recapture of depreciation and amortization for Home & Personal Care, as a result of their continuing operations classification in Q1 of this year.

Spectrum cash payments for acquisition and integration and restructuring and related charges for the first quarter of 2019, including discontinued operations were $6.1 million and $9.9 million, respectively, versus $5.3 million and $24.8 million, respectively, last year. The reduced costs were driven by the absence of last year's operating inefficiencies in our HHI Kansas DC facility, acquisition cash costs last year related to our battery and appliances divestiture processes, and HRG merger costs.

And now onto our business units from continuing operations beginning with slide 12 on Hardware & Home Improvement. HHI reported Q1 net sales of $305.1 million decreased 6.4%, driven predominantly by the absence of strong prior-year US hurricane revenues in the retail channel across residential security, plumbing and builders' hardware, two significant non-repeating promotional load-ins from customer wins last year in residential security and recent housing market softness. Excluding unfavorable FX of $1.6 million, organic net sales fell 5.9%.

Reported adjusted EBITDA of $55.6 million fell 7.3% with a reported margin decrease of 20 basis points due to lower volumes and unfavorable operating expense leverage.

New product introductions continued at a steady pace in Q1, reflecting HHI's strong vitality rate, and we still expect HHI to have a solid performance this year.

Now to Home & Personal Care, which is slide 13. HPC reported Q1 net sales of $317.2 million fell 7.3%, while organic revenues of $327.4 million decreased 4.3% excluding unfavorable FX of $10.2 million.

For Personal Care, strong growth in Latin America was more than offset by decreases in the US, primarily from the impact of prior-year losses, retailer distribution adjustments in mass and drug, e-commerce softness, and in Europe, primarily due to Brexit-related, soft consumer demand in the UK.

For small appliances, growth in Latin America, Canada and Asia-Pacific was more than offset by lower US results, primarily from e-commerce and in Europe also driven by Brexit-related, soft consumer demand in the UK.

HPC reported adjusted EBITDA of $35 million fell 16.1% with a 120 basis point reported margin decrease. The lower EBITDA was due to reduced volumes and unfavorable product mix.

Home & Personal Care expects an improved second half with new product introductions in the US and Europe and expanding distribution.

As David mentioned, Remington today also announced a five-year partnership with Manchester United that will provide significant brand exposure and given the Club's worldwide reach and following will be terrific for our brand. This is a good example of the step-up of investment we are making for -- we're -- step-up in spending we're planning across the Company this year and into the future.

Reported Q1 net sales of $317.2 million, fell 7.3%while organic revenues of $327.4 million,decreased 4.3%,excluding unfavorable FX of $10.2 million. For Personal Care, strong growth in Latin America was more than offset by decreases in the US, primarily from the impact of prior year losses, retailer distribution adjustments in -- drug,e-commerce softness and in Europe, primarily due to Brexit related soft consumer demand in the UK.

Moving to Global Pet, which is slide 14. Q1 reported net sales of $204.7 million grew 1.1%, primarily due to double-digit increase in US companion animal revenues, predominantly dog and cat chews and treats, partially offset by lower US aquatics and European companion animal sales. Excluding unfavorable FX of $1.8 million, organic sales increased a solid 2%.

Reported adjusted EBITDA fell 14.7% to $29 million with a 260 basis point margin decline to 14.2%, driven by unfavorable product mix and higher distribution costs.

In fiscal 2019, Pet expects solid performance in its largest region, the US, as it continues turnaround work to improve profitability of its European operations, primarily the branded dog and cat food business.

Turning to Home & Garden, which is slide 15. Home & Garden Q1 reported net sales of $47.6 million decreased 3.4% as a result of the absence of strong prior-year household control and repellent revenues in Puerto Rico in the aftermath of Hurricane Maria. As a reminder, Home & Garden's first quarter is its seasonally smallest quarter, typically comprising about 10% of full-year revenue.

Reported adjusted EBITDA of $3.1 million decreased 42.6% and reported margin of 6.5% fell 450 basis points. The decline was the result of the timing of seasonal production, unfavorable product mix and higher input costs.

Home & Garden continues to expect sales and adjusted EBITDA growth in fiscal 2019 driven by new distribution wins, improved mix and strong continuous improvement savings.

Moving to the balance sheet on slide 16. We ended the first quarter of fiscal 2019 in a solid liquidity position, including $664 million available on our $800 million cash flow revolver, and a cash balance of $252 million with debt outstanding of $4.8 billion.

Then our liquidity and capital structure position experienced a step-change improvement in January, as the Company prepaid in full all of its US term loans totaling $1.23 billion, $114 million on this cash flow revolver and redeemed all $890 million of our 7.75% bonds using proceeds from our battery and auto care divestitures. As a result of this debt reduction of more than $2.2 billion, pro forma as of December 30, 2018, and using trailing fourth quarter EBITDA from continuing operations, our gross and net leverage were approximately 4.6 times and 3.1 times, respectively, down from 5.8 times and 5.2 times at the end of fiscal 2018. This reflects a 46% reduction in debt from our fiscal year-end.

Q1 capital expenditures from continuing operations were $13.5 million in the quarter versus $20.3 million last year.

Now, turning to slide 17 on our 2019 guidance. We expect reported net sales growth from continuing operation in 2019, driven by innovation, increased marketing investments, pricing actions, which include tariff-related increases now expected to go into effect on March 1, and market share gains.

We now expect FX to have a negative impact on sales of approximately 150 basis points based on current rates.

We reaffirm our guidance for adjusted EBITDA from continuing operations to be between $560 million and $580 million as we stabilize operations and increase revenue-generating investments in an inflationary environment, including the anticipated impact of tariffs and input cost increases, partially offset by pricing actions.

We have $1.3 billion of usable federal NOLs remaining post the asset sales and have used all of our capital losses.

For adjusted earnings, we now use a tax rate of 25%, which includes state taxes.

Thank you. And now back to Dave for questions.

David Prichard -- Vice President of Investor Relations

Thanks, David and Doug. Operator, with that, you may now begin the Q&A session, please.

Questions and Answers:

Operator

(Operator Instructions) And your first question comes from the line of Olivia Tong.

Olivia Tong -- Bank of America Merrill Lynch -- Analyst

Good morning. I wanted to start with free cash flow and your full-year expectations there, because your cadence has always been for a back-end loaded year, given the cadence of the season and the seasonality in your businesses, but this year's Q1 loss is significantly larger than years past. So can you talk through a couple of puts and takes there? Are there any exogenous events? Obviously, the loss from discops (ph) is a big chunk of that. So how much of Q1 in your view is tied to businesses that are now no longer part of your portfolio versus those that are in your go-forward businesses? Thanks.

David M. Maura -- Chairman and Chief Executive Officer

Yeah. Hey, Olivia, good morning. Hope you are well.

Olivia Tong -- Bank of America Merrill Lynch -- Analyst

Good morning. Thank you.

David M. Maura -- Chairman and Chief Executive Officer

Look, I think, this year we've got a lot of moving pieces, but I think we're really starting to settle things down. Clearly, we just paid off $2.2 billion of debt, a little bit more than that. And, I mean, you can do the math on that on a rolling 12-month basis, that frees up about $129 million of cash interest. So, obviously, that's increasing the free cash flow going forward by a material amount. We've kind of stayed away from giving free cash this year, because we've got so many moving parts and we're still not done with all of our capital allocation decision making, which will affect that.

But why don't I let, Doug, take the nitty-gritty of it and see if that helps you with the question some more.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Yeah. You're absolutely right, Olivia, there were a lot of pieces in the first quarter that are non-cash related. So the additional writedown of the GAC business to reflect the net proceeds we receive on that is a big one. The doubling up of the depreciation and amortization or the catch-up of the depreciation and amortization relating to the Home & Personal Care reclassification is in there. The fact that the two businesses that we sold in January were in our cash results for the first three or four months, depending upon the business and as you know, we use cash this part of the year across all of our businesses as we are investing in inventory for our season. So there are a lot of moving pieces that will make this year's cash flow numbers really not representative of the continuing operations of the business.

And so, some of the cash should received in proceeds we would ordinarily flowed through free cash flow this year, but they become working capital adjustments or working capital targets in those sales, so it's just a confusing story. And as David mentioned, when we make the capital structure choices and when the interest payments on our existing debt would have been paid, also impact free cash flow for the year.

So the short answer is, we're not going to update guidance on free cash flow this year, but we'll give you as many pieces as we can. We still have significant NOLs. We still expect to be a relatively modest tax payer -- cash tax payer going forward. We expect to invest in CapEx at about the 2% rate across the business going forward. We expect significant improvement in restructuring and A&I expenses this year. And then, again, David gave you the kind of the parameters to do the math and what we've decided so far on the capital structure. I know it's a long story, but that's also the reason we're not giving specific guidance.

Olivia Tong -- Bank of America Merrill Lynch -- Analyst

Got it. Maybe if I could turn just to sales. The sort of soft guide down from meaningful growth to just growth. I guess, if you could break that down? Is that simply a reflection of the lower Q1 base or did you also ratchet down your expectations for the remainder of the year? And can you talk about sort of part and parcel with that that order of magnitude of some of the investments that you said you're planning to make around advertising and R&D and the like?

David M. Maura -- Chairman and Chief Executive Officer

Look, I think the quarter actually came in, as we said in the opening remarks, largely in line with what we planned to be very blunt. The only thing we saw in the quarter was a little bit of weakness in HHI. So we expect a little bit more sales there. Look, I think when we spoke to you last time we had anticipated pricing a bunch of tariffs at the end of the calendar year, that obviously got postponed. And so, that was in the revenue guidance there.

Organically, I expect a very good year out of particularly Pet and Home & Garden, and we still think we have a pretty solid year in HHI. Obviously, it's going to take us a couple of quarters to get appliances stood back up and reinvest and get that healthy, but we -- as we go out to retailers and we're talking to them about the new investments we're making, both on innovation and also consumer insights and actually communicating the message, we just been very weak there, particularly in the US on the marketing side, as we rebuild that we're capturing a lot of new orders. In fact, I think even in the last call, I talked about some of the new wins we're getting. But if I get a new win today, a new listing today, I don't ship it for six months in that business. So, that's really where we see kind of the June and September quarter being much stronger in that particular unit.

But, look, I would say, if there's anything that changed from the last time we spoke till now, it's that -- yeah, we have a weaker housing market and we need to be on guard there, we need to have contingency planning, we've got to work much more closely with our retailers to make sure we bring that year-end as we originally planned because we definitely feel the effects of the Fed interest rate hikes and we definitely see the effects particularly in new home sales that have declined as a result of that.

Is that help for you?

Olivia Tong -- Bank of America Merrill Lynch -- Analyst

Yeah. I mean, I guess, could you talk about the benefit...

David M. Maura -- Chairman and Chief Executive Officer

Yeah. I don't want you to think that there's any less confidence in the full-year guide, other than there is a delay on the pricing for tariffs and we see some softness in housing.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Yeah. The only additional thing on a reported basis, Olivia, is that we've moved FX guidance from modest impact to a 150 bps based on the first quarter on where rates are today.

David M. Maura -- Chairman and Chief Executive Officer

I missed that. Thank you, Doug.

Olivia Tong -- Bank of America Merrill Lynch -- Analyst

Yeah. I guess, just following up on the housing and the impact on HHI. I mean, what kind of benefit do you think you guys had in the past because of the favorable housing market that now you expect to unwind?

David M. Maura -- Chairman and Chief Executive Officer

Yeah. Look, I think, in general, we enjoy a dominant position in what I call kind of replacement cycle model. So, we have the largest installed base in the United States with our Kwikset product. And we've got some marquee technology, which is a material advantage versus our competition. We're seeing real increase in the adoption of mechanical locks and real excitement around some of our new Bluetooth and Wi-Fi locks. So I think we'll continue to have gains on the innovation side, and we hope to continue to drive that business.

I would say that, we're not -- but we're not immune, right? So 75% of that business called is replacement cycle business. It holds up well. But we are -- the other piece of that is new home sales. And so, our kind of view and some of the reports we study and metrics we look at, we figured that every 25 bps that the Fed has raised rates, it's kind of destroying or making unaffordable, I guess, would be the better way to phrase it, probably 10% to 15% of buyers. And so, we actually agree with the recent stance of the Fed to pause, because housing is such a critical part of the economy and in fact, I think with the market turmoil plus the Fed increases in kind of late November and December, I think in general, if you talk to our competitors, talk to retailers, there were some real softness. Recently, we've seen an uptick. Again, I'm not using this call to say there's an all clear at all. I think housing headwinds are -- we need to plan for them for the balance of fiscal 2019, but we're still expecting pretty solid performance out of HHI.

David Prichard -- Vice President of Investor Relations

Okay. Operator, can we go to the next question, please?

Operator

Your next question is from the line of Bob Labick.

Robert Labick -- CJS securities -- Analyst

Good morning.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Hi, Bob.

David Prichard -- Vice President of Investor Relations

Hi, Bob.

Robert Labick -- CJS securities -- Analyst

Hi. So I wanted to shift operationally, obviously, over the last 18 months or so there has been quite a few problems, recalls, distribution center consolidation, et cetera. Where are you now in terms of operating performance, kind of what's left in the urgent pile and how long should that take? And then, when do you get to start shifting to ongoing improvements versus fixing problems?

David M. Maura -- Chairman and Chief Executive Officer

You know what, we're there. So, we just took the Board of Directors through education in Edgerton, Kansas. And our fill rates are 99. And I'd tell you, if I could have taken you through that facility with me in April when I first took on this new seat, it was rough sledding. And to take the Board through there and show them the clean efficient distribution center that is now, what we call CFC, I'm really proud of that. And it's funny because all of last year was about how to get the backlog down, how to fill demand. And so, now we're flipping that around and we're trying to tell our customers, hey, listen, we are very, very efficient, we're exceedingly good with innovation and we're exceedingly good now in terms of fulfillment and in-time and on-time delivery. And so, last year we were getting fines, December we had no fines. So we're -- I think we're there, and we need to flip it around, use it as strategic advantage now and get off our back-foot and -- the difficult part in that particular example is we do have headwinds in housing, so now you've got to use that new fulfillment capability and the excellent customer service and go get more wins and drive the volume.

But I think, look, obviously, we no longer own Global Auto Care. That we did a lot of improvement on it, and I think our friends at Energizer are going to are going to finish that work for us over the next couple of years and get that thing humming and where it needs to be. But no, I think the triage that was kind of April through December is behind us and we're now going on the offensive again. I appreciate the question. Thank you.

Robert Labick -- CJS securities -- Analyst

Yeah. No, great. It's good to hear. So, thank you. And then, kind of in terms of new products, maybe by segment or maybe overall. Where do you stand relative to other years? Are you at the right mix of new launches, or do you expect innovation to accelerate and what does it take to do that?

David M. Maura -- Chairman and Chief Executive Officer

No. I think we're OK. I think -- the businesses are different. I would say, the NPD pipeline in HHI has always been strong and remains robust. I think Home & Garden has done a pretty good job. Pet is now catching up, but we still got work to do in Pet. I think we have -- actually believe it or not, I think we have very healthy NPD team in appliances, and they've done a much better job honestly on the European continent of actually getting true consumer insight, getting the right product to the right customer and then communicating to the end consumer the benefits of that product. And that's why you see the big investment today behind Manchester United and kind of making Remington global and really putting that brand back on the map. But I think we could do a better job with consumer insights and then telling that story here in North America.

And actually, yesterday, we just made some management changes in that division, and we are really beefing up the marketing side of that in the United States. And honestly, our retail customers are starting to hear about what we're doing and being good stewards of that appliance business again, and it is translating into orders. But I -- to your point, I think the vitality there could be better. And we need to get that out and hopefully, we can talk more about that as we get into back half.

Doug, you want to add anything?

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

No. Well said.

Robert Labick -- CJS securities -- Analyst

Okay, great. And one just quick clarification, your 3.5 times leverage target, is that a gross or net debt target?

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

It's a target because you have some choices to make yet. So, we'll...

David M. Maura -- Chairman and Chief Executive Officer

I mean, listen, let's be very blunt, right. We've done a lot in a very short period of time, right. January 2, we got a $2 billion wire and we immediately moved to pay all the revolver down, we paid off all our term loan. At the end of January, we got some more cash and we took out all of our HRG debt, $890 million of debt there.

And if we just run the business without doing any capital allocation decisions, we'll probably end the year with $1 billion of cash and nothing on the revolver. So I think being $1.8 billion liquid is probably too liquid, even though I like liquidity. And so, we've got some more decisions to make here as we enter the spring and get into the summer. And that's why we're kind of -- we're just not willing to commit on the free cash flow and then a question you just asked. But let us continue to excess -- look at market conditions, look at our capital structure and continue to hopefully make good decisions here.

Robert Labick -- CJS securities -- Analyst

Okay. Thanks so much.

David Prichard -- Vice President of Investor Relations

Operator, next question, please.

Operator

Your next question is from the line of Nik Modi.

David M. Maura -- Chairman and Chief Executive Officer

Nik, good morning.

Nik Modi -- RBC Capital Markets -- Analyst

Hey, good morning. How's everyone doing?

David M. Maura -- Chairman and Chief Executive Officer

Man, we're doing better, we're making progress.

Nik Modi -- RBC Capital Markets -- Analyst

Excellent. Just a couple of questions, quick ones from me. So on the HPC side, you talked about kind of softness in the e-commerce channel and distribution losses. Just maybe some more clarity on that. Is that just a function of the fact that you are going to sell the business and so maybe there were some slippage there? That's the first question.

And, I guess, the broader question, Dave, when you think about the amount of change that's taken place at Spectrum Brands and the fact that you are kind of heading into peak season. How do we think about kind of disruption, turnover, talent retention, maybe you can just give us some thoughts on that?

David M. Maura -- Chairman and Chief Executive Officer

Look, so I have ADD, so I'm going to probably make you replace or reask your question. But, look, I'll take the talent piece and then remind me your first piece. I actually -- I feel super good about where we are. I think, look, last year you said was mind-numbing from, not only -- look, if you went back a year, I thought basically just getting the HRG deal done would be our greatest challenge. And then, all of a sudden in April, operationally, we came off the tracks. And so, I found myself, not just doing trying to do transform the Company but I was -- we were in the middle of a turnaround. So, you're 100% right. The amount of -- whether it was HRG appliances being on and off the market, batteries actually getting close, but took over a year to get there and then pivoting and selling auto. I mean, just a tremendous amount of strategic activity and then operationally, we had our hands more than full.

So I think that's why again the theme of 2019 is really kind of reinvest in the business, get this place stable and then invest materially, so we can get growth reignited for 2020. But the team is in really good shape. And as people see the balance sheet getting stronger as they realize that we're becoming a free cash flow -- very strong free cash flow generative company again, as they see the stability on the appliance side, I think people that -- energy levels, people want to win again and we're starting to get orders.

To go back to the first part of your question, which I actually remember, which is amazing is a lot of that appliance disruption, it wasn't just me putting the business on the market for sale, which clearly creates tremendous uncertainty and yes, we did experienced pretty high turnover. But additionally -- and I don't partly to blame, we tried to take price in an inflationary environment and we lost a lot of listings. And we are still suffering from that, and you still see that in the numbers today.

What we've done is, the team has done a great job of going back out to retail, showing the recommitment to the business. Showing the fact that we're bringing new products, we're bringing excitement and we are going to advertise behind it and we're winning those listings. And so, you'll -- hopefully, I'll be able to talk to you in June and September about a much stronger appliance business.

Nik Modi -- RBC Capital Markets -- Analyst

Excellent. Thank you so much for the clarity.

David M. Maura -- Chairman and Chief Executive Officer

Okay.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Thanks, Nik.

David Prichard -- Vice President of Investor Relations

Next question, operator.

Operator

And your next question is from the line of Faiza Alwy.

Faiza Alwy -- Deutsche Bank -- Analyst

Hello?

David M. Maura -- Chairman and Chief Executive Officer

Hi, Faiza.

Faiza Alwy -- Deutsche Bank -- Analyst

Yes. Hi, good morning.

David Prichard -- Vice President of Investor Relations

Good morning.

Faiza Alwy -- Deutsche Bank -- Analyst

So, I guess, I wanted to first just delve a little bit deeper on the housing softness that you alluded to.

David M. Maura -- Chairman and Chief Executive Officer

Sure.

Faiza Alwy -- Deutsche Bank -- Analyst

Have you seen any slowdown in the remodeling market? And what's your outlook for that market? I guess, is the first question.

David M. Maura -- Chairman and Chief Executive Officer

Remodeling always holds up better, there's pent-up demand, there's still short supply of existing homes. So that market we think remains healthy and in fact, we see growth, to be blunt. So it's really then -- it's the new housing side, where it's got me mostly concern. And look, again, I -- since we published these numbers and since we're talking to you about the December quarter, we've seen an uptick since then. But I -- let's just see, is it really because just the market disruption and the interest rate hike that caused kind of a blip that I think the whole industry saw kind of a pull back in November, December and are we going to stabilize from here and grow? I don't know. I don't have a crystal ball. What I do know is, I need to prepare for a continued softness and make contingency planning and make sure we work with our retailers to get more velocity at point of sale and that's what we're doing.

Faiza Alwy -- Deutsche Bank -- Analyst

Okay. So what is your -- so even though the housing market has been soft and your tone seems more cautious around the market, like you've kept your EBITDA guidance as is. So, is there an offset or are you assuming that the market sort of comes back? Or was it too conservative previously? And then within that, I guess, if you could just cover a little bit more around what your embedding for like pricing and the raw material environment for the rest of the year, that would be helpful?

David M. Maura -- Chairman and Chief Executive Officer

Look, we've taken pricing and that pricing was phased in and it mostly occurred unfortunately during the softness. And so, that pricing is in this quarter, where it got phased in a little bit in November. And so, some of it, we actually got a little bit of benefit in December. So -- but, no, and I think -- I got to make sure you're aware, three quarters of our business is pretty stable, it's replacement cycle, it's remodel, it's multifamily, it's pretty stable. Unless you had -- if we have a big housing recession, that's a different story. I can't have this tone with you on this call. But the bulk of our business is pretty steady Eddie, and what we saw the pullback in this in new housing, and I think you see the gross margin improved a little bit this quarter and we took some pricing. And so, that's why we're able to maintain the full-year outlook.

Again, I think where I sit today on the weekend to February, I feel good about HHI putting in a solid performance. And if you look seasonally, right, Q1 is a tiny quarter for HHI. HHI's big quarters are Q3, Q4.

Faiza Alwy -- Deutsche Bank -- Analyst

Okay. If I may just ask one more question. And that is, you've alluded to a number of capital allocation decisions on this call. Could you talk a little bit more about that? And I'm wondering if what's your thought processes around M&A? And maybe, Dave, if you could talk a little bit more about how you're spending your time? And how committed that you are in terms of remaining with -- as CEO of Spectrum?

David M. Maura -- Chairman and Chief Executive Officer

I was here last week, it was negative 30 degrees and my coffee froze before I hit the floor outside of the car. But other than that, things are good. Look, I've spent 10 years building the Company, as you know, and I think we did a pretty good job, allocating capital externally and obviously, lower interest rates helped with that and we bought good higher margin, higher barrier entry, higher free cash flow businesses. I think, clearly, I stopped buying businesses three, four years ago because I thought multiples got too high, and I think we could have done a much better job of allocating capital internally, which is why I've embarked on since April. Obviously, look, life isn't always linear, and my journey through 2018 was unexpected, but I love this Company, I'm committed to the Company, I'm very excited about the Company's future. I think we have tremendous operational opportunities to after here that we can talk more about after we achieve them, not before. And I'm all-in.

Faiza Alwy -- Deutsche Bank -- Analyst

Great. Thank you so much.

David Prichard -- Vice President of Investor Relations

Okay. Next question, operator.

Operator

Your next question is from the line of Jim Chartier.

David Prichard -- Vice President of Investor Relations

Hi, Jim.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Good morning, Jim.

James Chartier -- Monness, Crespi, Hardt & Co. -- Analyst

Good morning. Thanks for taking my question. First on HHI, just wanted to ask about the thought process in terms of walking away from the promotions this quarter. Did those promotions were they not executed at retail, did they get to another vendor? And then any additional promotions you might be thinking about walking away from in the future for HHI?

David M. Maura -- Chairman and Chief Executive Officer

I'm going to let Doug take it, because I've talked too much in this call.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Well, the promotions we have had last year were with a big -- one of them was with a big box store, non-traditional, David already called the Category 1 here. It's in the...

David M. Maura -- Chairman and Chief Executive Officer

Club channels.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Club channels. Thank you. And that was a non-repeating one for us. We do -- in this time period, we continue to pursue those opportunities in our brand sales well in that channel, in that in and out kind of way.

And the other one was related to the load-in for our Amazon Secure Connect program a year ago, and that is more of a steady business for us now rather than a initial heavy load-in then.

James Chartier -- Monness, Crespi, Hardt & Co. -- Analyst

Great. And then great to see the improvement in the US Pet business. I think on the last call you talked about the new FURminator line where you were investing behind with more advertising and then the relaunch of the rawhide business. So just wanted to get an update on how FURminator is doing with that relaunch and the additional advertising in rawhide as well? Thanks.

David M. Maura -- Chairman and Chief Executive Officer

Listen, the packaging there is phenomenal and a lot of it was just getting rid of counterfeits. It's a great product. It's the one product that actually works and does what it says it does. But we had a ton of knockoffs and I got to take my hat off after Randy Lewis and the team down in St. Louis. We've got so many encryptions and we registered with Amazon's Registry System. And so, we're really able to stop the counterfeiting of that. And the new packaging, if you haven't seen it, go look at retail, it's phenomenal packaging. It's great marketing. It's doing well. GloFish is doing great. DreamBone, SmartBones from PetMatrix is way above plan. And so, look, it took us a year longer than I thought because of the recall we had in the past, but US Pet is back, and it's back to stay and we're growing. So, yeah.

James Chartier -- Monness, Crespi, Hardt & Co. -- Analyst

Great. And then -- so it's...

David M. Maura -- Chairman and Chief Executive Officer

I also think -- look, I also think, I'd be remiss to say, I think retail, specialty retail is realizing, they need brands, they need innovation and we need to do a great job partnering with them. And I personally been in these meetings with the CEOs of these companies and their owners and we're back leading with brands and innovation, in creating news and excitement and driving traffic, not just to the websites but back into the stores.

James Chartier -- Monness, Crespi, Hardt & Co. -- Analyst

Great. And then any difference in terms of Europe and your US and Europe businesses that would prevent you from kind of getting the momentum you have in the US, can you just kind of export the success you've had in the US on certain product lines, or are there differences? I know, Europe has more of a Pet food business.

David M. Maura -- Chairman and Chief Executive Officer

No. To be blunt, it's harder because it's mostly aquatic, Tetra is based in Malay and Germany and it's a bigger aquatics market there. We've had success introducing our companion animal and, obviously, we've been -- all the investments we've made except GloFish have been around the dog and cat companion animal space, which has higher CAGR's. The issue there on the dog and cat is small. I'm sick of talking about it on conference calls, but it's less than $100 million revenue. It used to make us $7 million to $10 million EBITDA, it became a $7 million bleed, and I'm doing my best to make that neutral this year and try to clean that up.

James Chartier -- Monness, Crespi, Hardt & Co. -- Analyst

Great. Thanks. Best of luck.

David Prichard -- Vice President of Investor Relations

Okay. Next call, operator, please.

Operator

Your next question is from the line of Joe Altobello.

Joseph Altobello -- Raymond James -- Analyst

Thanks.

David M. Maura -- Chairman and Chief Executive Officer

Hi, Joe.

Joseph Altobello -- Raymond James -- Analyst

Good morning. So this question, I think it's been asked a couple of times already, but I wanted to go at it one more time, I suppose. If you look at what's happened to the businesses since November, you mentioned, David, that you delayed tariff-related pricing, you seem a little bit more weakness in HHI on a softer housing market, FX got worse and still you kept your EBITDA guide unchanged. So I'm just curious, I know all of these probably aren't huge in and of themselves, but they all went against you. So, what got better to keep you confident in that $560 million and $580 million number?

David M. Maura -- Chairman and Chief Executive Officer

I'll let Doug take a swing, if he doesn't get it off the ball (ph).

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

So the impact, Joe, on tariffs is actually, I think, derisked the P&L a little bit, because we had -- our assumption was we were able to price for the tariffs and price for them as they went into effect. So we've had those pricing plans ready and we've left them on the shelf. And so, I think the further we get into the year, the less we have to price and the less pressure we have from consumers ultimately and through our retailer partners on that particular issue.

On FX, it had a greater top line relative to the greater top line impact from a translation perspectives, and bottom line for us. And then finally, I'd say that we put a range out there for a reason and we're still confident in the range.

Joseph Altobello -- Raymond James -- Analyst

Okay. And then secondly on pricing, obviously, everybody in these businesses are feeling the same effects, right, of higher commodity transportation tariffs. What has been the competitive response in those businesses where you did take pricing?

David M. Maura -- Chairman and Chief Executive Officer

I think in most of the cases, other people are trying to take prices too. I think we do have some examples where competitors are not following yet, and we got to monitor that. So, it's a -- listen, it's a dynamic business and there's lots of ways to do things, do you put more in in-store joint marketing efforts, et cetera. Do you -- it's mostly people are taking prices. I think you can see Clorox's number. So they attribute taking pricing to restoring their entire margin structure. And it's just where you have the strongest brands and dominant share, it's easier to take.

Joseph Altobello -- Raymond James -- Analyst

Okay. Great. Thank you, guys.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Thanks, Joe.

David Prichard -- Vice President of Investor Relations

Operator, next question, please.

Operator

Your next question is from the line of Ian Zaffino.

Ian Zaffino -- Oppenheimer -- Analyst

Okay, great. Thank you. Just touching on the strength in Pet, I guess, in the US. Can you just get into that a little bit more as far as -- is it the channel that improved? It is lapping destocking, new innovation. Maybe just touch a little bit on that and kind of what you're seeing there and why it's been improving so well? Thanks.

David M. Maura -- Chairman and Chief Executive Officer

Yeah. No. Listen, Ian, thank you. Look, again, I've been talking about this for over a year and finally it's happening. But, look, the team has reunderwriting the -- underwritten the business. I think that unit prior to Randy's team and JP taken over specifically was dependent on me to do the next acquisition. And to be blunt, now they're innovating, now they've got a new product development pipeline and now they're bringing news and excitement to the customer and to the retail customers and to the end consumers. And so, it's not just FURminator, it's not just Digest-eeze, and it's not just anniversarying the rawhide recall. It is really doing what we say we do, which is invest behind the brand, bring innovation, bring news and excitement, and yeah, increase the marketing spend and genuinely partner with our retail partners.

And so, there, I'm excited. I think they are finally starting to collect the cultures healthy, the NPD pipeline is getting better. So we got to just stay at it. We got to -- we're not -- lots more to do, lots more improvements to make.

Ian Zaffino -- Oppenheimer -- Analyst

Okay. And on the Energizer stake, is there like a holding period for that, or how do you think about that piece? Thanks.

David M. Maura -- Chairman and Chief Executive Officer

Listen, I think -- listen, those guys have been phenomenal partners. They are terrific operators and marketers. And I think they are going to be able to take Rayovac to the next level. I think both of those deals are the industrial logic is exceedingly strategic. I think the synergies are real, and we wanted to participate in the upside there. And I'm not saying that it's going to -- auto is going to just turnaround overnight, but they've got iconic brands, they've got great market share and Dayton was 80% of their way there when we handed it off and they're going to take it the rest. So, I look at it as a way where we can partner with them, but we can also participate in the upside. I mean, when we bought Auto, it was 130-ish EBITDA, we got it to 145 and then 150 by the time we were -- before we did the 5 to 1 consolidation, which really derailed the earnings power of the company, but I'm hoping they can chip away at that and get that back. I think we hold the stock for at least a year, we're happy to be long-term holders and participate in the upside there. I have the utmost respect for their team for Alan, for Mark and we're their biggest fans.

Ian Zaffino -- Oppenheimer -- Analyst

Okay. Thanks a lot.

David Prichard -- Vice President of Investor Relations

Okay. Operator, next question, please.

Operator

Your next question is from the line of Sam Reid.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Hi, Sam.

Sam Reid -- Wells Fargo Securities -- Analyst

Hey, guys. Thanks for taking my question. I wanted to drill down a bit more on Personal Care here, and I've actually got a two-part question. So, first, could you kind of give us a sense as to how big e-commerce as a proportion of your total Personal Care sales?

And then second, just Personal Care e-comm sales in the US specifically, how did that growth trend in fiscal 2018? And could you kind of give us a sense as to how it might have trended in 1Q versus that 2018 growth?

David M. Maura -- Chairman and Chief Executive Officer

Yeah. E-comm is representing around 17%, 18% of that business and continues to grow. I think -- look, I think we were kind of a first mover there, to be honest. And I think we did a very, very good job for three, four years ago, getting out there, getting the ratings, getting the growth. I think our competition kind of caught on to that. And it's kind of made it more expensive to play and we're not getting the yield we used to get. And so, that's another area that I'm going to be investing in to, not only grow our business, but make it tougher and our competitors.

And look, I think on the Personal Care side, to be blunt, that's where we suffered the most delistings in the period a year ago. So that's why we're having such a tough comps right now, we need to regain those listings in -- we have in a lot of areas.

Our actual Home Appliance business EBITDA actually grew this quarter by a couple of million bucks. So Home Appliances is already kind of getting stabilized, but we really got to fix Personal Care, when I say Personal Care, I mean, Personal Care US. Personal Care Europe has done a phenomenal job and that's why we did this partnership with MANU. It's global, so we do expect to benefit in the US. But Remington is number one over there and has tremendous growth trajectory.

Did I get your question?

Sam Reid -- Wells Fargo Securities -- Analyst

You did. You did. Thank you so much. And if I could sneak a follow-up question in here as well. It's good to hear, you're upbeat on Home & Garden. That said, I just kind of wanted to get a sense as to how your inventories here, look at retail in this segment, specifically and how you think the inventory cycle at retail will play out over the course of this year in those segments? Thanks.

David M. Maura -- Chairman and Chief Executive Officer

Doug, go ahead.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Yeah. We think we exited the last fiscal year in good shape in those. And you know that's a very seasonal business. So we're right now shipping -- beginning to ship to season and expect that with our new listing wins that we will have really nice representation in that shelf, where most of our -- or very lot of our customers, anyway, buy these products. And we added capacity in both liquids and aerosols over the last couple of years. So we have a better opportunity to manage our inventory positions as well and improve working capital there, as well as being able to respond quickly to demand changes. So things are looking good for our season.

David M. Maura -- Chairman and Chief Executive Officer

And then, listen, to follow on that, Home & Garden and I sat down with Randy back in the spring and in the summer and I said, look, we have tremendous brands. We don't have glyphosate in the product, and we've got a great story to tell. And so, this year, again, part of our investment in marketing and we're in support, we're putting millions of dollars for the first time behind Spectracide, and we're partnering with retailers and it's caused us to gain share and listings and we're in it to win it. And so, look, yeah, weather has to cooperate. But I'm very bullish on Home & Garden, we got a great team there, we got great products, we got great innovation, we got great pricing and we're going to bring more value to our retailers by partnering and on marketing initiatives there, and I think the payback is going to be very fast.

Sam Reid -- Wells Fargo Securities -- Analyst

Awesome. Thanks so much, guys. I appreciate it.

David Prichard -- Vice President of Investor Relations

Okay. Operator, we have time to squeeze in one final call before we end the call, please.

Operator

Your final question is from the line of Karru Martinson.

Karru Martinson -- Jefferies -- Analyst

Good morning, guys.

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Hi, Karru.

Karru Martinson -- Jefferies -- Analyst

Just on the old adage that you guys always offered value for less. I mean, I'm hearing a lot of partnering with retailers, advertising, brand support, stepping up behind them.

David M. Maura -- Chairman and Chief Executive Officer

It's a new Spectrum Brands.

Karru Martinson -- Jefferies -- Analyst

Yeah, absolutely. So how should we think about that spend as we go forward?

David M. Maura -- Chairman and Chief Executive Officer

No, look, this is a very good question. And, look, I'll just take -- I'll take one example and I won't go into too much detail. But I expect to -- one of the piece of the program is about a $2.5 million spend. I think it'll result in a $20 million, $30 million pickup of new revenue. And based on contribution margins, that'll pay back faster than a year. And obviously, we're trying to allocate tens of millions of dollars in that same fashion. We're not all the way there yet, we're only a quarter into the year and it's a marathon, not a sprint. But I've also put in a new -- I've got an entire new analytics group working with me on looking at the return on the spend and making sure we're accountable on it, where I don't think that was done in the past.

So, listen, value doesn't mean cheap. You can have great value with a Kwikset product, with -- tremendous value through our SmartKey technology, through Bluetooth, through Wi-Fi and it can be $100, $200 price point. I think the more and more and more thing, we just tried to be too many things with you people. I want to be an inch wide a mile deep, I want laser focus. And yeah, we're going to be investing in innovation, we are going to be investing behind the brands and we're going be communicating to our customers, and we didn't do that in the past but that's definitely what we're doing in the future. We are creating a faster, smarter, stronger company.

Karru Martinson -- Jefferies -- Analyst

Okay. And then just so we're clear, the 3.5 leverage target, that is a gross leverage target from the 4.6 gross today?

David M. Maura -- Chairman and Chief Executive Officer

No, because, look, I don't want to pigeonhole us, right. If you think about -- if I run the math over the next six to nine months and I've got $1 billion in a checking accountant undrawn revolver of $800 million, that's probably too much liquidity. And so, if you look at the liability side, yeah, we paid down $2.2 billion, and that's going to generate a lot of free cash flow going forward. But is there more to do? Right? And are there other capital allocation decisions to be made?

And so, we just -- listen, we've been moving at a breakneck pace. I think kind of we've got things stable. I feel good about the outlook. This is -- again, this is a year of stability and reinvestment in the business to position us to grow in 2020. But I want a very healthy and liquid balance sheet. I've said on multiple calls, I want to run the Company more conservatively from a P&L and a balance sheet standpoint, and we're going to take our time. But I think, give us the next 30, 60 days to look at market conditions. I mean, listen, it wasn't till what -- I mean, three, four weeks ago, I could have bought back bonds at a discount. Now I can't. You know me, my background, I want to maximize the return for shareholders again. So let's look at the environment around us, let's reassess where things are and we'll make some decisions and we'll communicate them when we do.

Karru Martinson -- Jefferies -- Analyst

Thank you very much guys for your time. Appreciate it.

David Prichard -- Vice President of Investor Relations

Thank you, Karru. And with that, we have reached the top of the hour. So, we will conclude our conference call. I certainly want to thank both David and Doug. And on behalf of all of us here at Spectrum Brands, thank you all for participating in our fiscal 2019 first quarter earnings call. Have a good day. Thank you.

Operator

This concludes today's earnings conference call. Thank you for your participation. You may now disconnect.

Duration: 63 minutes

Call participants:

David Prichard -- Vice President of Investor Relations

David M. Maura -- Chairman and Chief Executive Officer

Douglas L. Martin -- Executive Vice President and Chief Financial Officer

Olivia Tong -- Bank of America Merrill Lynch -- Analyst

Robert Labick -- CJS securities -- Analyst

Nik Modi -- RBC Capital Markets -- Analyst

Faiza Alwy -- Deutsche Bank -- Analyst

James Chartier -- Monness, Crespi, Hardt & Co. -- Analyst

Joseph Altobello -- Raymond James -- Analyst

Ian Zaffino -- Oppenheimer -- Analyst

Sam Reid -- Wells Fargo Securities -- Analyst

Karru Martinson -- Jefferies -- Analyst

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