Good day, and thank you for standing by. Welcome to the Spectrum Brands Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Joanne Chomiak, Senior Vice President of Tax and Treasury. Please go ahead. Thank you, and welcome to Spectrum Brands Holdings Q2 2024 Earnings Conference Call and Webcast. I'm Joanne Chomiak, Senior Vice President of Tax and Treasury, and I will moderate today's call. 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 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, our Chairman and Chief Executive Officer, and Jeremy Smeltser, our Chief Financial Officer. After opening remarks, we will conduct the Q&A. Turning to slides three and four, our comments today include forward-looking statements, which 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 May 9, 2024, 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 statements. 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. Now, I'll turn the call over to David Maura. David? Hey, thank you, Joanne. Good morning, everybody. Welcome to our second quarter earnings update. I wanna thank everyone for joining us this morning. I'm gonna start the call today with an update on our operating performance and our strategic initiatives. Jeremy will then provide a more detailed financial and operational update, including a discussion on specific business unit results. During our last quarter's call, I shared with you that we've started a journey back to winning again. This quarter is further evidence that our operating performance, from supply chain, working capital, inventory management, from our factories to our DCs, and the resulting fill rates, they have materially improved over the past 18 months as we have upgraded talent across our company. Given this improved performance and the continued rhythm and cadence of our new S&OP process, we are confident in our decision to continue to invest now in our commercial operations, innovation, and sales and marketing capabilities to create and restore top-line growth and delight our consumers. Our team is leaning into the opportunities that a strong balance sheet and improving margins provides us the ability to invest back into our businesses. Our first quarter results were encouraging, but we remained cautious. Today, we are adding momentum to our journey by reporting another quarter that met our top-line expectations and delivered significant gross margin and adjusted EBITDA margin growth. The playbook for winning is to consistently do what we say we're gonna do and deliver on our commitments to all of our stakeholders. We are doing this by leaning into our competitive advantages to drive long-term top-line growth and by being judicious on the cost side. This quarter marks one more step along this journey. If I could have you turn to slide six in our financial performance. Net sales this quarter declined 1.5%. We are seeing stabilizing consumer demand in many categories, but there are still some areas of softness compared to last year. We are pleased that our Global Pet Care and Home and Personal Care businesses delivered sales in line with expectations, and we're encouraged by the early seasonal sales for our Home and Garden business. Retailer order patterns early in the season confirm our assessment that last year's retailer inventory management actions left our retail partners with healthier and relatively lower inventory levels to start this year's season. Early orders were also helped by favorable weather in key regions and improve our confidence that our sales will be more closely aligned to point of sale this year. We're encouraged by the early start of the lawn and garden season. But we are also mindful that three-quarters of our POS occurs in the second half of the year. Across all three business units now, our growth in e-commerce continues to outpace brick-and-mortar channels, growing at over 17% compared to last year and now representing over 20% of our net sales. Including investment income, our adjusted EBITDA was $112.3 million, up from $51 million a year ago, with strong improvement across all three business units. Our gross profit margin of 38.1% increased 870 basis points compared to last year. This quarter's results benefited from the sale of lower cost inventory compared to last year. The high cost inventory was substantially off our balance sheet by the end of the second quarter last year, so this is the last quarter we will see such a material comparable improvement. Our gross margins and bottom line are improving from the investments we've made in operational efficiencies, delivering cost savings and plant productivity improvements. We are being disciplined with our cost structures to ensure we remain lean with excess fixed costs we took out of the business in the past. Our balance sheet continues to be a competitive strength, supporting our company's growth. We are ending the quarter with a net debt position of approximately $155 million, down from almost $3 billion a year ago. Our strong balance sheet is a foundational advantage that fuels our investments back into our businesses with the goal of driving top-line growth. Now, if we can turn to Slide seven and review the strategic priorities of our company. While our operating teams are driving efficiencies, reducing costs, and preserving working capital, the average fill rates of our company are now back in the mid-90s% across all businesses, with inventory levels that are approximately 45% below our peak amounts. Inventory levels in the first two quarters have been relatively flat at around a $450 million investment, in spite of the seasonality of our home and garden business. This means we have $363 million less invested in inventory as compared to the high point in the third quarter of fiscal 2022, and $131 million less than the second quarter of fiscal 2023. These improvements all contribute to our improved gross margin structures and Adjusted EBITDA by reducing the costs that come with high inventory levels and low fill rates. We're also making capital investments in our manufacturing plants and systems to drive efficiencies, reduce cost, and refocus our spend on top-line driving activities. We're also investing behind our people to improve commercial capabilities and drive a culture of accountability. Our leadership and business teams are delivering on their commitments and investing back into the future growth of our company. A year ago, our second quarter Adjusted EBITDA margin was 7%. Excluding investment income, our adjusted EBITDA margin this quarter is 13.3%. In fact, the global pet care business delivered a record adjusted EBITDA quarter, in part because of the very difficult decision we made a year ago to take a top-line hit from rationalizing lower-margin SKUs. We are now seeing the benefit of that decision in our operations, cash flow, and margin profile. Our stepped-up investments in our brands and new product roadmaps are now accelerating. We expect investments to increase throughout the rest of this year as the teams are activating their investment plans for brand marketing, advertising, and innovation. During our first quarter call, I told you we were accelerating the process to separate the HPC business via a sale, merger, or spin. This decision was driven in part by the improved performance of the underlying HPC business. HPC, in fact, had another very solid quarter, delivering or exceeding all of its key metrics. In fact, our personal care business grew high single digits, and the sales declines we've been seeing in the North American home appliance business are now tempering. We are winning new listings in brick-and-mortar, and we're seeing material quarterly increases in our e-commerce sales. HPC's margins are improving, and the team is investing now in innovation and brand marketing again to drive profitable top-line growth. We are also happy to announce today that we've just signed an agreement with Stanley Black & Decker, under which we will continue to license the Black & Decker brand in the same categories as before for an initial four-year term ending December 31, 2027, with two subsequent four-year renewal rights, providing us with access to the Black & Decker brand name through the end of calendar 2035. This is a significant milestone for us and for the HPC business because it provides certainty for the continued use of this important brand name now for an extended period of time. With this partnership secured, our teams are now excited to get back to building this brand for long-term growth. We would like to extend our thanks to Stanley Black & Decker for their continued partnership with us. HPC's improving business results and the new BLACK+DECKER license agreement have reinforced our view that the time is right to separate the HPC business. During the past three months, our internal teams have been focused on separation readiness, doing all the pre-work required for transactions of this nature, and we've been working with our bankers and advisors to develop separation options. We continue to dual track the separation for either an M&A opportunity or a spin-off transaction, and we intend to file an initial registration statement over the summer to begin the SEC registration process for a spin-off. I truly believe that a separation of HPC will allow both companies pro forma... Spectrum Brands is a pure-play pet and home and garden business, and a standalone appliance HPC business to flourish by focusing on the unique needs of each business. We will update you on our progress throughout the year. One additional positive note as it relates to HPC, I'm pleased to report that we have had a favorable outcome for a claim we filed under a representation and warranty insurance policy regarding the Tristar acquisition. During the quarter, we came to an agreement with the insurers to receive the full $65 million under our policy. We received the first $50 million in the second quarter, and the remaining $15 million was collected in April. Now, if I could turn your attention to slide eight and an update on our share repurchase programs. Since the close of the HHI transaction, we have now returned over $920 million to our shareholders through our various share repurchase programs, and we have reduced our share count by approximately 29% to now 29.1 million shares outstanding. We purchased those shares at a $102 million discount compared to yesterday's closing trading value. We have approximately $47 million remaining on a $200 million 10b5-1 share repurchase plan as of today. As we keep delivering on our commitments, grow our earnings, and continue to shrink our share count, we believe ultimately our share price will react positively. Turning to page 9. Based on our results in the first half of the year, the trends we currently see with retailer and consumer behavior, we are updating our earnings framework. We now expect full year net sales to be relatively flat to last year and Adjusted EBITDA to now grow low double digits. This framework assumes that this summer's weather is similar to what we experienced last year during the peak lawn and garden season, and that tempering sales declines in small kitchen appliances holds, and the growth that we see in personal care continues. We are encouraged by our first half results, but we remain cautious given geopolitical and macroeconomic headwinds. Consumer demand is still relatively soft, but we are seeing sequential improvements in our businesses. As we have continued our operational improvements over the past quarters, confidence in our performance is growing. Each quarter we deliver on our commitments reinforces our belief that we are on the journey to winning. Before I turn the call over to Jeremy, I would like to extend my thanks to each and every one of our global employees who are all on this journey together for their roles in contributing to our collective success. Now you'll hear more from Jeremy on the financials and additional business unit insights. Over to you, Jeremy. Thanks, David. Good morning, everybody. Let's turn your attention to slide 11 for a review of our Q2 results from continuing operations. Net sales decreased 1.5%. Excluding the impact of $1.2 million of favorable foreign exchange, organic net sales decreased 1.6%, primarily due to year-over-year sales declines in small kitchen appliances, softness in North American aquatics, and the impact of the SKU rationalization decisions we made in fiscal 2023 within our global pet care and home and personal care businesses, offset by higher sales of our controls products. The sales decline was generally in line with our expectations and earnings framework, with favorable weather trends providing a bit of a tailwind for our home and garden business. Gross profit increased $58.9 million, and gross margins of 38.1% increased 870 basis points, largely driven by lower cost inventory and inventory-related expenses, along with favorable mix and impacts from cost improvement actions, partially offset by lower volume. Operating expenses of $197.5 million decreased 32% due to the $65 million dollar settlement for claims under a representation and warranty insurance policy related to the Tristar acquisition, reduced project spend on restructuring, optimization, and strategic transaction activities, distribution cost favorability, lower factoring charges, and reduced intangible asset impairments compared to last year. These were partially offset by increased investment spend in advertising and marketing as we reinvest in our brands. Operating income of $75.9 million improved by $152.9 million, driven by the gross margin improvement and lower operating expenses I mentioned. GAAP net income and diluted earnings per share both increased, primarily driven by the higher operating income, higher investment income, lower interest expense, and lower share count. Adjusted EBITDA was $112.3 million, an increase of 120%, driven by improved gross margins and investment income of $17 million. Adjusted EBITDA, excluding investment income, was $95.3 million. Adjusted diluted EPS increased by $1.76 to $1.62, driven by higher adjusted EBITDA and the reduction in shares outstanding. During the second quarter, we returned $98 million to shareholders through our share repurchase program and reduced our outstanding shares by approximately 4%, or 1.2 million shares. Our current share count is approximately 29% lower than it was prior to the closure of the HHI transaction. Let's turn now to slide 12. Q2 interest expense from continuing operations of $16.9 million decreased $14.7 million due to our lower outstanding debt balance. Cash taxes during the quarter of $14.4 million were $8.7 million higher than last year. Depreciation and amortization of $25.4 million was $3 million higher than last year, and separately, share-based compensation was flat. Capital expenditures were $12.5 million in Q2, down from $15.9 million last year. Cash payments towards strategic transactions, restructuring-related projects, and other unusual nonrecurring adjustments were $6.6 million versus $22.9 million last year. Moving to the balance sheet, we had a quarter-end cash balance of $746 million, plus $500 million in short-term investments and $490 million available on our $500 million cash flow revolver. Total debt outstanding was approximately $1.4 billion, consisting of $1.3 billion of senior unsecured notes and $84 million of finance leases. We ended the quarter with $155 million of net debt. Now, let's get into the review of each business unit to provide details on the underlying performance drivers of our operational results. I'll start with Global Pet Care, which is slide 13. Reported net sales decreased 2.3%. Excluding favorable foreign currency, organic sales decreased 3%. Global companion animal sales were essentially flat to last year, while North American aquatics declined high single digits. This quarter's sales were adversely impacted by our decision in fiscal 2023 to exit several nonstrategic categories and lower profit SKUs. We have now anniversa the majority of the SKU exits. As a reminder, these activities reduced our North American active item count by nearly a third, and while the impact from a top-line perspective is a purposeful headwind, these actions are having a very positive impact on margins, inventory turns, and cash flow. North American aquatic sales continue to be impacted by lower foot traffic and sales within the pet specialty channel, where aquatics has a larger presence, as we see the North American consumer shift purchasing toward e-commerce and other channels. In fact, GPC's e-commerce sales grew almost 12% year-over-year, making this a quarter of high mark of e-commerce sales as a percentage of total sales for GPC. In addition, we are now seeing aquatics nutrition growing low single digits, which is a sign of stabilization in that category. We have also had a strong start to the pond season, which is contributing to the aquatics consumables recovery. On the innovation front, we are celebrating the 20th anniversary of GloFish this year and unveiled the new GloFish Starfire Red Angelfish at the Global Pet Expo in March. This is the largest fish we've ever offered and was specifically designed to broaden the GloFish platform's appeal to more hobbyists who generally keep larger fish tanks. Our new cat treats line launched earlier under the Meowee! and Good 'n' Tasty brands. They continue to gain traction. We secured several new listings that will begin to ship next quarter. In EMEA, we launched chews and treats extensions in both Good Boy and Eight-in-One, and built on the success of our earlier IAMS dry cat food launch with dry food for dogs in Q2, with optimized claims and all-new packaging. Adjusted EBITDA for GPC increased by 34.6%, or 590 basis points to $62.3 million, delivering a record-high adjusted EBITDA for the business in a quarter. Similar to the first quarter, this quarter's increase of $16 million was primarily driven by a favorable comparison to last year's sales of higher-cost inventory, favorable mix due to the exit of low-margin SKUs, and our continued focus on operational productivity investments. This was partially offset by lower volumes, increased investments in programming and advertising, and FX. This is the 5th consecutive quarter of year-over-year growth for GPC and 4th consecutive quarter where the GPC business delivered Adjusted EBITDA of over $50 million. With the business consistently delivering higher-margin results, we are increasing commercial investments in trade promotions, brand advertising, and new innovation launch support to accelerate growth and drive market share gains. We expect top-line growth in the second half of the year, but with lower Adjusted EBITDA margin levels as we focus on increasing brand and innovation investments to drive future growth. Although still challenged, the aquatics category is showing signs of recovery, particularly in consumables, which is very encouraging.... Let's move now to home and garden, which is on slide 14. Net sales increased 4.8% in the second quarter, driven by double-digit sales growth in the controls category. Favorable weather trends in key regions drove higher retail POS and retail orders. The retailer reorder patterns we saw in the quarter support our view that retailers started this season with healthier inventory levels compared to last year, particularly in the controls category. Our retail customers have also allocated off-shelf and promotional space to our category ahead of last year. Our Spectracide brand grew ahead of category in the quarter, with strong POS driven by consumer demand as we head into the peak quarter for the business. While we were encouraged by the early season weather, increased promotional space, and strength of our brands, we continue to expect retailers to be cautious in building inventory for the season and to reorder in a more typical seasonal manner compared to 2023. Sales of household insect controls and repellents were lower this quarter than last year, which signals a slower buildup to a season that typically starts later in the summer. In cleaning, Rejuvenate sales declined low double digits. While sales of some subcategories have improved sequentially, total category consumer demand continues to be soft. Our earnings framework assumes the weather in 2024 is similar to 2023, but with retailer orders much more in line with POS than last year. The collaboration and partnership with our key customers has been very strong throughout the lawn and garden season pre-build. We are supporting our new products and innovations through increased media investments, which communicate our product's superior value to results-driven consumers. Our Spectracide One-Shot line, with the tagline, "You hold the power," kills and prevents weeds for up to five months. This is our longest-lasting Spectracide product and is gaining traction at retail. We are supporting this product launch with focused top and bottom funnel advertising, allowing us to quickly geo-target our media spend when we see regions with the right weather for high consumer demand. In the repellents category, our new Cutter Eclipse Zone mosquito repellent provides 40 hours of invisible mosquito protection for families. We are supporting this product with both online and digital media campaigns, with our tagline, "Protect your people." Adjusted EBITDA margins increased by 840 basis points, nearly doubling to $29.2 million from last year's $15.1 million. The adjusted EBITDA increase was primarily driven by higher sales, sales of lower-cost inventory, manufacturing efficiencies, cost improvement initiatives, and favorable mix, offset by increased brand investments. Labor and raw material costs continue at fiscal 2023 levels, but we have not experienced meaningful cost inflation this year. Finally, home and personal care, which is slide 15. Reported net sales decreased 4%. Excluding unfavorable foreign exchange, organic net sales decreased 3.7%. The organic net sales decrease was driven by low double-digit declines in global home appliances, offset by high single-digit global growth in personal care. We continue to see the largest sales declines in North American home appliances, but are encouraged as the rate of decline has slowed, and we see North American consumer demand stabilizing in this category. Our pricing and product mix is improving, and our promotional activity has delivered higher top and bottom-line contributions. Global e-commerce sales for HPC grew almost 25% in the quarter, year-over-year, driven by increased investments in this channel and a shift in consumer purchasing behaviors. Sales in the EMEA region grew low single digits, with growth in personal care from strong hair care sales offset by a decline in home appliance sales after last year's strong top-line performance. Sales in LATAM posted mid-double-digit growth in both personal care and home appliances, partly driven by pricing in inflationary markets. Commercially, our Remington Balder Pro Head Shaver is performing well on shelf and online as Remington reacts to trends among men to embrace bald hair styles. We are investing behind the Remington ONE product line, particularly in EMEA, to capitalize on the higher price point for Remington in that region and are seeing both retailer and consumer excitement for the product line. We also recently launched the innovative and all-new Russell Hobbs Calm Kettle, blending the expertise of our design and product development experts, supported by AI. The product launched in the UK, a market where Russell Hobbs is the number one kettle brand. Adjusted EBITDA was $17.8 million in the quarter, compared to a loss of $1.9 million last year. Adjusted EBITDA margin improved to 6.6%, driven primarily by lower cost inventory and inventory-related expenses, fewer low-margin promotional events, FX, pricing in certain inflationary markets, and the continued benefit of our cost improvement initiatives.... This was partially offset by lower volume and the increased brand-focused investments. Let's turn now to Slide 16 and our updated expectations for 2024. We are updating our expectation for net sales and now expect net sales to be relatively flat to fiscal 2023, driven by higher demand in our home and garden business, offset primarily by lower consumer demand in the small kitchen appliance category within HPC, with tempering sales declines in small kitchen appliances and continued growth in personal care. Adjusted EBITDA, excluding investment income, is expected to grow in the low double digits, driven primarily from lower cost inventory as compared to last year, offset by increased investments in our brands and our people. From a phasing perspective, we now expect each business to deliver sales growth in the second half of the year. In Global Pet Care, we expect growth now that we have anniversaried the majority of the SKU exits. In Home and Garden, we expect second half growth compared to last year, when retailers were reducing inventory levels during that time. We do, however, expect our large retail customers to defer taking on inventory until closer to consumer demand. Turning to Slide 17, depreciation and amortization is expected to be between $115 million and $125 million, including stock-based compensation of approximately $15 million-$20 million. Cash payments towards restructuring, optimization, and strategic transaction costs are expected to be approximately $50 million. Capital expenditures are expected to be in the range of $65 million-$75 million, and cash taxes are expected to be approximately $40 million. For adjusted EPS, we use a tax rate of 25%, including state taxes. To end my section, I want to echo David and thank all of our global employees for their hard work so far this year. Now, back to David. Hey, thank you, Jeremy. Thanks, everyone, for joining us today. I'd like to take a couple of minutes just to recap the key takeaways here on Slide 19. We are pleased with our results this quarter and in the first half of the year. We've got another quarter here of strong performance, showing that our playbook is working, and we're off to a good start, doing what we said we're gonna do, delivering our commitments, and hitting the mile markers on our winning journey. We are taking this journey step by step to ensure that our confidence remains grounded in results. Our teams are focused on fewer, bigger, and better innovations. We are seeing impressive growth in our e-commerce sales and recognize the importance of that growth on all of our sales across all of our channels. Our strong balance sheet is providing us with a competitive advantage, which is fueling a growth mindset in our company. We are continuing to return cash to shareholders, now having bought back 29% of the company. During the second half of the year, we will be ramping up our investments in our commercial operations as we activate the sales and brand marketing plans our businesses have developed to accelerate long-term, sustainable top-line growth. I'm excited about the investments we're making and to see the results of this important step in our journey. We remain cautious about the full year, focusing on what we can control and preparing to be nimble through what we do not. We are heading into the biggest sales quarter for our home and garden business, and while early season weather trends have been favorable, a lot of this year is yet still ahead of us. Inventory at retail is healthier, but we are seeing foot traffic and demand softness within pet specialty and some dollar channel retailers. We are continuing to face the same geopolitical and macroeconomic headwinds as last quarter. So while we're encouraged by the start of the year, we remain cautious on our full year expectations. Our winning playbook has us staying judicious on costs, keeping our operational house in order with lean inventory and high fill rates, and making the investments needed to return us to revenue growth. I am excited about our continued momentum and our start to the year. Now we'll turn the call over to Joanne to take any of your questions. Thank you, David. Operator, we can go to the question queue now. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Peter Grom of UBS. Your line is open. Thank you, operator, and good morning, everyone. Hope you're doing well. Two questions for me. Hey, Jeremy. Just maybe first, you know, I was hoping to get some updated perspective on the long-term earnings framework for the business. I know, you know, a $400 million number was kind of discussed for a period of time. I think, David, in the summer, you mentioned that was somewhat premature. But just in the context of what you just delivered in the first half and what still appears to be a pretty tough environment, I would love to get some updated views on where you think the long-term earnings power of this business can be. And then second, you know, I guess I just had a question on the implied second-half guidance. I, you know, I hear you, step up, invest in brands and, and people, but if I just look at it, the implied versus a year ago. T he year-on-year gap would imply that even after accounting for this incremental spend, it doesn't seem you're embedding any underlying improvement in the business, despite what sounds like a much better top-line environment. So am I thinking about that right? If so, why would that be the case? Is it freight costs? Is it just conservatism? Just trying to understand, you know, the second half implied guide. Thanks. Let's start with the $400 million comment. I mean, look, you know, we made that, I think, 18 months ago or 24 months ago, that comment, and it's, you know, the company was, you know, 7x levered and going through a DOJ lawsuit, and operating results were not satisfactory to any of us. And so I was trying to illustrate, look, we, you know, this, this appliance business we hold is, you know, historically been able to do $100 million in EBITDA. As you know, that fell to almost $40 million, you know, last year, and we've already earned that. I mean, Tim, Tim Wright and the team have earned more EBITDA in the six months of fiscal 2024 than we did all of 2023 already. So, HPC getting much, much healthier, back on track, but, you know, we're not saying we're going to do that $100 million this year, but we are, we are creating a much healthier, stronger appliance business. But that was one component. We talked about, you know, getting the pet business back to $50 million in EBITDA a quarter, right? And that was a $200 million EBITDA framework. You know, so $100 from appliances, $200 from pet, and then home and garden in the past had been, you know, a $100 million-plus EBITDA business. That also fell to almost $60 million in EBITDA, and we've been building that business back, and they're on a, they're on a fantastic run at the moment. We need some good weather to hold up, and, you know, two-thirds of our POS is still out in front of us, so we don't want to get over our skis there, but that's the $400 million reference. Obviously, you know, continue to make strides in repairing the EBITDA earnings power in appliances, home and garden, but you can see with a $62 million EBITDA print this quarter in pet, you know, we're well on our way of building that business back. Look, we want to do this journey step by step, brick by brick, quarter by quarter. We want our guidance to be grounded in results, and we don't want to get out over our skis in any way, shape, or form. So, look, I think we've taken the guidance up a little bit this morning because we are earning a little bit more than we initially thought. But we also want to make sure that we take this improved margin structure and improved cash flow situation and invest heavily into commercial operations. I mean, I think what your big takeaway should be, what the headline should be, if you want to write an earnings or, you know, an earnings recap, we've really got our operational house in order. You know, 18 months ago, I don't think we were getting raw materials correctly, efficiently. You know, we've got better freight lines, better freight rates. The teams have worked judiciously to put together a real S&OP process. You know, not only are we getting raw material correctly, we're making raw material more, you know, we're turning that into finished goods more efficiently. Our DCs are functioning. We've gotten rid of excess storage capacities and all the expenses that come with another $300-$400 million of inventory has been eliminated. Inventory turns are rising. You know, fill rates in the mid-90s%, you know, they were as low as 60-something% a couple years ago. So we've really got our operational house in order, Peter. Now, we've got to go full bore on the commercial operations. We've got to invest in innovation. We've got to bring news and excitement to the customer. I've set up a lot of top-to-tops with our major retailers over the next couple of months. I'm bringing all the divisional presidents, the business unit presidents with me to these meetings. We got a near-debt-free balance sheet, and we're here to play aggressive. We want to build market share, we want to build brand equity, and we want to build revenue. That is the pivot, all the while keeping our operational house in order and being very judicious on the cost side. So I'll stop there and turn to Jeremy to fill in any blanks or correct any errors. Yeah, no, I think those are great points, David. And I would just say in your second question, Peter, I think that's a really important one for everybody listening today is, you know, the earnings framework and what we delivered in the first half versus what is implied in the second half shows top-line growth sequentially half to half, but EBITDA declined sequentially half to half. That might seem odd or overly conservative without knowing all the details. The reality is, going back to the beginning of the year, we said we wanted to spend $40-$45 million more in advertising and marketing activities for our brands this year, and that incremental spend is happening, but we only spent $12 million of that in the first half. We actually expect to spend $30-$35 million more in the second half. So I think if you do that, add that math to your bridge, that'll help you get to where we're, our earnings framework is landing for the second half. And that's really all about, you know, the first half increased investments were mostly focused in e-commerce, and you heard the outstanding results that have come from those investments. And they were also focused on building content for advertising that is launching now that we get to the second half, because, one, our home and garden season is actually starting here in May. You know, there's no real reason to advertise hard before you get to the Memorial Day weekend. And two, many of our product launches, you know, I talked about some in the global pet care business. The same is true in the appliance business, where we have, you know, new SKUs, particularly, in brick-and-mortar, that are, that are launching here mid-year, and we're going to start investing behind those. So that's really the driver. There's no, no point of view that we're taking or anything that we're experiencing that says there's anything less healthy about any of the three business units as we move from the first to the second half. It's simply those incremental investments, which are to drive some growth in the second half of this year, but more importantly, to drive organic growth next year in fiscal 2025.... Thank you. One moment for our next question. And our next question comes from Bob Labick of CJS Securities. Good morning. Thanks for taking our questions. Bob, how are you doing? Very well, thanks. Hope you guys are the same. Obviously, lots of positives in the quarter and around HPC in particular, so kind of wanted to go there with some of the, you know, incremental news. Can you give us a sense of the, you know, kind of balance sheet and capital structure outcomes with a potential separation of HPC? Obviously, if you sell it, you get cash, so that's easy to kind of figure out. But if you go down the JV route or spin route, would you be injecting capital into those potentially? Or how should we think about, you know, balance sheet capital structure post HPC? You got a lot of questions there, and, you know, M&A is inherently fluid, so I don't know if I can answer a whole lot of that. We don't intend to put much capital into the business, if any. You know, I think we, we've been really focused on, you know, materially improving the financial performance of that business. We've got an entirely new management team. We've recently made a tremendous, you know, a number of amazing hires in the North America marketplace where we were the weakest. And so we're just focused on really building that business back and getting it healthy. But, I mean, we do believe that, you know, as we've said for years, that our pet and our home and garden assets are higher multiple businesses. And so we do believe that by separating HPC out, giving it a standalone platform to go grow, we do not intend to spin it out and lever it up. We intend to, you know, spin it. If a spin-off is what occurs, we will spin it out with a very healthy balance sheet, and we will stand it up as a platform to be a consolidator for growth. If we can find an M&A partner in there, because there's tons of synergies and the ability to get scale, you know, that'd be great. But, that's, you know, it's a very fluid situation. I think the best thing we can do is continue to be better stewards of the business, continue to drive the revenue and EBITDA and the margin profile of that business. And we've been able to do that under the leadership of Tim Wright, and a number of new hires across the platform. So we're gonna keep doing that, and we'll see where we come out. But, you know, we do think that the stock continues to be, you know, undervalued, and it's partly undervalued because of HPC being embedded in the holding company, which is why we continue to buy back shares, shrink our float, and try to grow our earnings. We believe that's the best way to create value for everybody here. Okay, great. Yeah, and obviously, as the results continue to improve at HPC, it's gonna make the process easier, whichever way you go. So that's great. And then kind of just like referring back to the last question, but without putting dollars around it. Maybe give us a sense of the segment operating margins at, you know, pet and home and garden. They've been very volatile, obviously, the last few years with transportation, high cost inventory, raw material swings, all that, you know, fun stuff, and now, you know, the absence of the receivables factoring, which is a good guide to this year. Where should those settle out, you know, once you get that incremental spending that is gonna start in the second half? You know, from a medium-term perspective, how do you view the, the margin profile of pet and, and home and garden? Yeah, I mean... Thanks, Bob. I think on the pet side, look, I think we're really pleased with where the margin performance is the last, you know, three or four quarters. I think certainly this high water mark in Q2 was an outstanding result by the team, so we're happy about that. But I do think, you know, we have to get grounded in the fact that we need to grow this pet business like we were growing it, you know, pre-COVID and the first couple of years of COVID. It needs to grow. It's our biggest, our biggest business, and it's I think the driver of our growth platform. So investing back into that, into the brands to grow that business for the long term, I think is the right thing, and really just look to maintain margins at the blended level that we've experienced over the last couple quarters. So I would not expect, you know, the level that we experienced in Q2 as what we'll do in the second half, because we have to ramp up those investments, and we have to take share, we have to get back behind our new products and grow, including in aquatics. On Home and Garden, obviously, you know, you've been on the ride with us, Bob. It's been a roller coaster with Home and Garden over the last few years. Some outstanding years and a couple of very challenged years the last two years. What I would say is, fundamentally, we don't think anything has changed in the home and garden categories overall, where consumers are going to be, where our retail customers want to be in those categories. I think it's gonna normalize, you know, starting this year and into next year. Our expectations are that we actually still have margin improvement ahead of us in home and garden. You know, we would like to see it ultimately in the high teens, you know, maybe around 20%. Perhaps not at the peak that it was years and years ago when we were investing less in the brands, but I think there's still room to improve it. And ultimately, you know, holding margins in the high teens in that business while continuing to grow the top line will be a great outcome for our investors. So that's, that's where we're targeting. Super. That's helpful, very much. Thank you very much. Thanks, Bob. Have a good day. You too. Our next question comes from Chris Carey of Wells Fargo Securities. Your line is open. Hey, good morning, everyone. Good morning. Morning. One question about COGS. So cost of goods sold has been down, you know, about low to mid-teens over the last several quarters. This was the best gross margin I think you've done in seven or eight years, in a long time. Can you contextualize what's going on with the costs there? Is that the high-cost inventory is finally coming out of the system? Are there operational changes that are driving that that are a bit more structural going forward? Would you see any of this being sort of cyclical because of some improved commodity exposure that may be firming? Just potentially contextualizing this cost structure a little bit more in the gross margin relative to what you might think about going forward. Then I have a follow-up. Sure. Yeah, yeah, happy to, Chris. It's a good question. I think the single biggest driver is certainly the lower cost inventory as compared to last year in the first half of the year. There's no doubt about that. You know, as you recall, that was about $55 million in the first half of last year, roughly split between the quarters evenly. So I think, you know, $28 million or so of a benefit year-over-year to cost of goods sold. The other thing I would call out is that, you know, the improvements that we're having in the plants, productivity improvements, are much stronger than we've seen the last few years to David's earlier comments. You know, we have a new team, a lot of new talent in there, and things are going very well in our plants, and that's driving positive variances, from a manufacturing perspective. And then the other thing I would say is that Q2, in particular, probably marked the low watermark of our freight costs, because we really, from a P&L perspective, are not yet in Q2, having many of the Red Sea, incremental charges, surcharges hit the P&L. That will really start in Q3, and that actually goes back to the earlier question by Peter on first half to second half. That's another driver of, you know, a decline in gross margins, first half to second half, is the incremental. I think we call out $10 million-$12 million earlier in the year that we should likely see in Q3 and Q4 split relatively evenly. Okay, helpful. And David, from a share repurchase standpoint, you've obviously been very front-footed, as you had said you would be. From here, can you talk about any constraints you would have on incremental share repurchases, specifically with some of the cash potentially tied up in some of your the stipulations in your bond covenants? We've talked about this before, but just, you know, any context on where, you know, share repurchase and capital allocation, you know, might go over the next several quarters here. Thanks so much. Oh, hey, that's a great question. I want to thank you for asking it. Yeah, look, we're going to get through today's call. You know, we had board meetings earlier this week, and as soon as we get out of this room, we're going to go and look at that capital structure because it's got a lot of optimization left out of it. We do have an asset sale covenant where we need to, you know, look at addressing the remaining bonds. And I think it'll be a really great thing for our company to clarify and get our gross debt down to our net debt, which will be a very low number. But look, we continue to think that our stock is probably the cheapest thing we can buy. We don't see any assets that are attractive or at an attractive price to buy from an M&A standpoint. Quite frankly, we think we can continue to build a pretty robust pet and home and garden business, and we believe that the value of that business is worth, you know, a lot more than what we trade. So we're going to continue to try to grow the earnings of this company, shrink the float, and be really, really great operators from an efficiency standpoint while investing in commercial ops and see where we can go over the next couple of years. I think it'll be a fun ride. Yeah, and the one thing I would just add for everybody to think about as it relates to your question on constraint, right? Is we have put out a long-term net leverage target range of 2-2.5. And so I think that gives you a bogey to model of what is possible based on the current earnings of the company and the current debt structure, to think about how material incremental share repurchases might be in the coming, you know, 2-3 years. Okay. Thanks, guys. Thank you. Thank you. One moment for our next question. Our next question comes from Steve Powers of Deutsche Bank. Your line is open. Hey, guys. Good morning. Good morning, Steve. David, good morning. David, going back to, you know, the highlights you were making around just the operational improvements you've been able to make this quarter. You know, you gave some good detail around, you know, inventory management, fill rate improvement, et cetera. You also alluded to, you know, additional efficiency initiatives you have underway. So I'm just hoping that you can expand a little bit on that. I don't think you're declaring mission accomplished on operational improvements. So, you know, as we think about the incremental gains you stand to make in the balance of this year into next year, just how would you think about those flowing through? Just because it seems like a lot of it in the near term is going to get reinvested. So just... A little bit of peeling back the onion, if you will, to give us a sense of how much more opportunity you see, you know, to build on what you've already accomplished. Yeah, look, to be blunt, I'm not sure I want to quantify anything today. I think, look, all credit goes to people. We made a conscious decision 18 months ago to upgrade talent, invest in people, and adopt a rigorous S&OP process at this company. And, you know, Dave Gabriel, Bob Vollmert, Steve Cowell, it's just. And if I start naming people, there'll be people who get offended I don't name them. But we, we've built a pretty good ops team now, and we've got this company running efficiently. And I'd say, look, we've made pretty big strides. I agree with you, there's incremental gains to go get. But again, you know, as we've sold off a lot of revenue, right, through batteries and auto care and then recently hardware, we've got this advantageous balance sheet today, but we've also got, we've got to be conscious of critical mass, and we can't get much smaller. You know, that's why you see me constantly taking out costs, is because you end up with unabsorbed overhead. And so, you know, as we move forward, you know, restoring an organic growth rate, getting a real algorithm to where sales is growing, earnings is growing at twice the rate, returning to kind of, you know, throwing off lots of free cash flow, you know, that's really where we're going to steer the company here in the next 24 months, while continuing to make incremental gains operationally. But, you know, this journey is going to be built one step at a time, one quarter at a time. It's a long roadmap to on this journey to get back to winning, but we're starting to make some strides. I don't want to get into quantifying anything operationally, unless Jeremy wants to. No, I think, I think that all makes sense. I think the other thing we're always conscious of, Steve, is, you know, inflation is coming, right? We have inflation in our labor every year. Our suppliers have inflation in their labor every year. And, you know, that's something you're not going to avoid. And so we always have to have a productivity target out there that more than offsets that, so that we can deliver some improvement for our shareholders. So I agree with David and with the, I think what you were implying with your question, which is there's more runway out there. And I think, you know, as we go from year to year, we'll talk about exactly what we think we can achieve each year. Okay, very good. If I could, I know we're at the end of time, but if I could squeeze in one more question. You know, your call for sort of better revenue trends as we go forward stands out. You know, we've heard from a lot of companies talking about a more difficult consumer environment, slowing demand, et cetera. So I just... You know, I think you're coming from a somewhat unique place, and you've got seasonal dynamics, which I understand. But maybe just a little bit, what gives you the confidence? And then also, does the backdrop that we're seeing broadly, you know, influence and maybe shift a bit how you plan to spend incrementally over the balance of the year to stimulate demand in what I think generally is a more cautious environment? Yeah, I mean, look, I think this all starts with kind of where we baselined the business. If you look back in November last year, the market was not too happy with my outlook on this year. And, you know, that was based on the fact that, you know, interest rates had been at 0 for 12 years. And, you know, I kind of viewed there's two kind of giant macro experiments going on, right? You had 2008 to 2022 was a free money environment. And, you know, it wouldn't be logical on my part to assume that if mortgage rates go from 2.5-3% to 7+%, that that wouldn't have some sort of dampening impact. And then, you know, on the other side of that coin, you know, we had this thing called a pandemic, and $5 trillion got stuck in the mail. And you know, that, that's, that money's going to find its way out somewhere, and that's, you know, it's no shock. That's why we have an inflation problem in this country today, right? So, you know, you just got to be cautious with all these big movements, macro-wise. And so, look, we think the consumer is struggling today. We see credit card delinquencies up. We see auto loans, you know, having more delinquencies. And so I, you know, I think you have to be very cautious on this. At the same time, you know, we were not running a very efficient business or... And we've made massive improvements operationally, and now that gives you the platform, right? If you're running your business better, if you've got a better balance sheet, you know, and you're not being sued by the DOJ, you can actually focus and... You know, it's difficult to convey to you the type of distraction that selling HHI and the pressure of the government was on this company, but it was real. And so to be free of that and to have the balance sheet we have and to have our operational house in order, we can now go on the offensive. And that's a growth mindset that just wasn't here a few years ago. And so I think despite all these headwinds and despite our continued cautious outlook for the back half of the year, we believe we're going to get more listings, and we believe we're going to win in the marketplace. And so maybe that is a little bit more unique to us. But again, I think it has to be anchored in the view we took in November. Very good. Well, thank you. With that, we have reached the top of the hour, so we will conclude our conference call. Thank you to David and Jeremy, and on behalf of Spectrum Brands, thank you all for your participation. This concludes today's conference call. Thank you for participating, and you may now disconnect.