Good morning. My name is Marianna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spectrum Brands Fiscal 2018 Third 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. As a reminder, ladies and gentlemen, this conference is being recorded today, Thursday, July 26. 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.

Thank you, operator, and welcome to Spectrum Brands Holdings' Fiscal 2018 Third Quarter Earnings Conference Call and Webcast. I'm Dave Prichard, Vice President of Investor Relations for Spectrum Brands, and I'll be moderating this morning's call. Now to help you follow our comments, we have placed a slide presentation on the Event Calendar page in the IR section of our website at www.spectrumbrands.com. This document will remain there following our call. So if we start with slide 2 of the presentation, you'll see that our call will be led by David Maura, Chairman and CEO, and Doug Martin, CFO. David and Doug will deliver opening remarks and then they'll conduct the Q&A session. If we turn now to slides 3 and 4, our comments today do include forward-looking statements, including our outlook for fiscal 2018 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 the cautionary statements outlined in our press release dated July 26, 2018, 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.

Hey thanks, David, and thanks, everybody, for joining us today. I'd like to start actually by welcoming the new shareholders from HRG Group to Spectrum Brands. That transaction which is now complete enables them to participate directly and the significant upside opportunities that I believe our company has. When I last spoke to everyone three months ago, I took on a new role here and I told you that the second quarter results would in no way define our company. However, I did mention that it would refine us and we are starting a process of refinery. We're being refined. While we have months more progress to make, the third quarter results demonstrate that the leadership changes, a focus on restoring the ownership and accountability culture of our company, they're already beginning to read through into significantly more positive results. I'm also pleased to report to you that we are delivering on the positive momentum and the growth that we promised you we would have in the back half of this fiscal year. I would be completely remised not to thank all my team members and to extend my sincerest gratitude to every one of our employees worldwide who have responded with determination and extreme resiliency to put our company back on a positive trajectory as we move through this transformational year that I believe will ultimately result in a much less leveraged, much more focused company with four streamlined operating core units, with much greater growth potential and a much higher margin structure. Our third quarter results from continuing operations rebounded strongly from Q2. We did deliver increased sales and adjusted EBITDA versus the prior year and we achieved significant encouraging progress against the operating efficiencies that we've been experiencing in the greenfield facilities for both our Hardware &…

Thanks, David, and good morning, everyone. I plan to take you this morning through our Spectrum Brands operating results as normal, but I want to start by commenting on the form of the merger with the HRG Group and the impact on the presentation of our financials. The legal form of the merger resulted in a historic HRG legal entity being the surviving company, while Spectrum Brands name, operations, board and management team continue on to run the business. As a result of this however, our Q3 year-to-date comparable period results include both Spectrum and HRG activity rather than solely Spectrum Brands. So the Q's are going to look a little unfamiliar to you when they're filed, and that's really the difference. So for at least the remainder of the fiscal year, I will be speaking primarily to Spectrum Brands-only performance from an adjusted EBITDA and adjusted free cash flow perspective. Reported numbers will include both Spectrum and HRG. Additional details relating to the HRG activities apart from Spectrum Brands can be found in our 10-Q, and in addition a complete listing of separate historical financial information and filings for both Spectrum Brands and HRG Group can be found on our Investor Relations website. Now turning to slide 10, let's review Q3 results from continuing operations beginning with net sales. Third quarter reported net sales of $945.5 million increased 9.6% versus last year. Excluding the favorable impact of foreign currency of $4.9 million and acquisition sales of $4.5 million, organic net sales grew 7.3%. HHI and GAC delivered double-digit growth driven by solid market demand and tailwinds from reduced backlogs. Home & Garden also reported solid growth as favorable weather finally broke in the later part of the quarter. Reported gross margin of 37.5% increased 40 basis points from 37.1%…

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

Thank you. Your first question comes from the line of Faiza Alwy with Deutsche Bank. Your line is open.

Great. Thank you. Good morning.

Morning.

David, I wanted to ask two questions. One is just around HHI. So it sounds like a lot of the excess backlog has been cleared. So just given the volatility in sales perhaps you could give us a sense of what the underlying trends in HHI are like, sort of what are you seeing? There's been some concern around just housing generally, so I'd love to hear your thoughts on just end-market demand for that segment. And maybe if you could talk a little bit of – I know you've gained some distribution at Lowes and other retailers for private label. So just some more color around that. And then I have a second question, but I'll come back to that once we get through this. Thank you.

That sounded like four, or at least three. No, listen, I would say, and Doug can correct me if I get anything wrong. But we only – I'm pleased we got the backlog down by $20 million, but the underlying organic growth there was double-digit. Our end markets are exceedingly strong. Our incoming orders are strong. There's a tremendous amount of innovation there. We've got a SmartKey global toolbox that we launched. And it uses our SmartKey technology, but we're partnering with other toolbox, just other applications with this SmartKey technology and people love it. The POS is good. And look, I think we just went from a position where some previous decisions were made to bring stuff in, and I don't think we used a prudent enough timeline and I don't think proper underwriting of the logistics network was done. And we basically went from a standstill in the month of March with 350 trailers blocking not only inbound but outbound, and we don't have any aged trailers in that parking lot today. And listen, that's a yeoman's effort. I would say our On Time In Full from Kwikset and Pfister, our biggest lines of business are satisfactory. And again, I'm not, if my team's listening I think you did a great job, but for me I want to go to the next level. I think we still have issues, real issues with builders' hardware. We have some elongated metal, very unique pieces, SKU intensive stuff that was brought in from our Carolina DC and we're not where we need to be there. But we just put in some new automation, and I'll be back down there in that facility in a couple weeks to make sure that's working. Doug's going to come with me on that trip. But,…

Great. So my next question was around the sale of the Personal Care and Small Appliances business. So I noticed that you lowered the EBITDA from discontinued operations. I'm assuming most of that is essentially this business.

No.

No. Okay.

No, that's a wrong assumption. But go ahead.

Okay. Okay. So I'd love to hear more about that. Maybe if you could break out what the EBITDA for this particular business is, sort of what the hold-up is? I know there are questions around tariffs, previously you talked about carve-out financials. I believe you're sort of making progress on that front. So just more color around how you're thinking about the sale, is there a scenario where you might decide to not sell this business?

Yeah. And listen until something's sold, it's not sold and so you own it. And if we don't find the right buyer at the right price, we'll put it back on the balance sheet. I mean that's what happens. That's what M&A is. If I give you an update, the update is we got audited financials done on the business last week. We have numerous buyers that are still interested in it. And, quite frankly, want to pursue it. It's a good business. It generates a tremendous amount of free cash flow. But when you put assets held for sale and the Battery deal moved faster than we thought. And then we needed to get carved out financials audited, which we didn't have in the first round. It basically delayed it. And, yes, there's been some underlying deterioration in the business because of inflation costs and difficulty getting the margin structure right. Honestly, the tariffs, we're not Whirlpool. I see very, very little impact to our Appliance business from all the tariffs being bantered around in DC. And, frankly, recent results actually point to not only stabilization, but we might have a pretty good fourth quarter in our Appliance unit. So, look, I'm still bullish on selling the asset. You guys know my history. I'm basically an M&A guy. Multiples are exceedingly stretched away from Spectrum. I think our multiple's reasonable. I think the rest of the world is excessive. Any PE firm can go get seven times stapled levered financing out there. Interest rates are still exceedingly low. Private equity has got records amount of capital to put to work. Strategics need to find ways to grow. There are worldwide players in appliances that don't like their U.S. ops and they really need to have a bigger, more efficient supply chain, critical mass, go-to-market strategy. And we have phenomenal brands and dominant market share position. So, look, I just don't want to comment any more on this than we have. Let's get to a definitive deal and we'll tell you about it.

Great. Thank you so much.

Okay. Operator, next question.

Your next question comes from Joe Altobello with Raymond James. Your line is open. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Hey, guys. Good morning. So throughout your presentation, David, you mentioned higher commodity costs and higher logistic costs a number of times in pretty much all of your businesses. I'm curious if you could quantify how much of a headwind do you think you're going to see this year and maybe next year? And what's the potential to price against that next year?

Yeah. I'm kind of getting away from the guidance game. Look, it's a pressure, but we have been taking prices in some of our divisions. They have been sticking, some more easily than others, obviously, where you have the number one position, where your brand equity is significantly powerful, the retailer is more likely to take it. When I see the results coming out of the much larger multi-nationals, clearly, they're having to go into those retail buyers and demand price increases. And so look, our situation has been one where I just needed to get us healthy from a supply chain standpoint. We've got to be able to service – get the customer service levels up to where we're on time, we're in full and then we're going to go ask for price. And those conversations we're having now and we're going to go get them. So we are going to restore our margins. We're not shy. We're in the business to make money. The more profitable we are as a company, that means the more money we can invest in innovation, R&D, new product development, which helps our retail partners grow, and quite frankly, makes us a better counterparty to do business with. So we're going to take a pretty aggressive stance and if my customers are listening, we're coming to ask for price increases. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Okay. That's very helpful. And I guess secondly, on the Pet business, and if you back out the backlog, the tolling exit and the recall, it looks like Pet sales were actually up this quarter. You mentioned earlier that you expected that business to turn last year, and it hasn't. So looking forward, it seems like that's been sort of the problem child here. Would you expect that business to be up in terms of sales and EBITDA next year?

You know what, you're calling me out, and you deserve to call me out. I really did think it would turn a year ago, and I would tell you, I'd have been right other than that Pet recall we had with the FDA. It was voluntary. It was on our – we did it ourselves. It was wildly expensive. It really hurt us with our customers. I personally have visited with the owners of some of these specialty pet retailers recently. We are putting new programs in front of them. Believe it or not, I've been living between Dayton and Edgerton, but I made it down to our Ecuador facility. I was just there with them in Ambato and we've got a fantastic new plant there that's comes from the old Salix acquisition and we're making amazing product. I'm telling you we are – it's human great. We're not only treating it with enzymes and all the right cleaning chemicals to make it the healthiest product on the market for your dog, where we've got a radiation in there. I mean, we are producing the highest quality, best looking, we've relaunched Dingo. We're relaunching Digest-eeze. We're going back after the private label we lost. So look, it's a longwinded way to say yes. I remain bullish. I think that we are absolutely going to experience growth going forward and let's talk next quarter and see if I'm right. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Okay. Will do. Thanks a lot.

Thanks, Joe.

Your next question comes from Bob Labick with CJS Securities. Your line is open.

I'm going to take a step and talk a little bit about the Home & Garden. You said obviously that facility helped out on Global Auto and things like that. Can you talk about the margins in Home & Garden, did that impacted or was that mix, raw materials? Just a little more color around those margins and the potential recovery there.

Yeah, no, listen, I really appreciate the question, and let me tell you, the reason I really appreciate it is because I believe everything begins and ends with culture. And nobody's asked me yet, but I'm going to go ahead and tell you. My biggest surprise since taking the new expanded role, I call myself Chief Encouragement Officer, by the way, not Chief Executive Officer. But this company got way more siloed and too bureaucratic. And in fact, I saw way too many regional, almost matrix-like reporting structures, Bob, and I'm tearing all those down. And to be brutally blunt and transparent, which is one of the things I'm preaching is the new culture here of unvarnished truth. As we get back to kind of clear lines of ownership, accountability, simplifying our reporting structures, I can't stress how important that change has been. And it's most evident if you really peel the onion back to the question you just asked. In the old world, given the capacity restraints in Dayton, one, those people wouldn't have raised their hand to say they had a problem. And we are really encouraging people – we have a new challenge, and it's called speak up. And I want to know at 6 AM where the problems are, because the faster I know where a problem is, the faster I can bring a solution to it, and we are a solutions-oriented mentality company now. We are not a bunch of whiners and complainers. But what happened here in this quarter, and the only reason we're able to do this, and that's why I gave specific thanks to Randy, to Steve, Rob Deridder. Listen, we would have not been able to service our customers, we would have not been able to produce the results we did…

Bob, just quick follow-up. This is Doug. The margin difference year-over-year in Home & Garden specifically is related to a little bit of heavier private label mix that we've talked about. We also because of the season started a little late, didn't sell in as much of our concentrate business, which is also a bit of a margin drag. But over time, the items that David just talked about are going to help us from a productivity and efficiency perspective across the entire liquids and aerosol network.

Okay. Great. That's great color. And particularly the ability to shift among your similar facilities is a great asset to take advantage of going forward. So without pinning you to a specific number, it sounds like with a very strong recovery and the problems from last quarter, looking out a year or so, do you believe margins can be back to historic levels or higher across your segments? Or how are you thinking about it medium to long-term? And not trying to peg you down on raw materials this quarter or transportation that quarter.

Well you know I like you, but you are trying to peg me down. I'm not going to answer your question. But I'm going to give you two things. Look I want to get Spectrum back in the business of under-promising, over-delivering. I want to get Spectrum back in the business of let's do it and then talk about it. And so in that vein, I'm not going to give you specifics. Look, there's a lot more operating efficiencies to get. And give us – we need 6 to 12 months to go get it. And we'll make those additional changes in the fall. And the learning curve at Dayton can go up now given the just incredible legacy of the Home & Garden, native knowledge and their industrial intelligence is exciting to me. Look, it also depends on how much price we can take, right. And so let me go do that, and let's talk about it in the future. And that's all I'm going to say.

Sounds good. Thanks so much.

Your next question comes from Ian Zaffino with Oppenheimer. Your line is open. Ian Zaffino - Oppenheimer & Co., Inc.: So question would be, as you look to shut down the GAC fill plants, does guidance assume...

Whoa, whoa, whoa, whoa, we're not shutting down any plants, we're making them better. Ian Zaffino - Oppenheimer & Co., Inc.: Okay. So as you fix it and make it better, what might be the inventory builds? Maybe talk about how you might address some potential issues that might arise, just because I think you've done a very good job on everything so far, but the company has in the past had some issues. Is this something where we should be looking at there as far as an inventory build or efficiency ramps or any color like that you could give us on how we should be thinking about that would be helpful?

No, no, listen, I mean, let's just go through the history real quick. There were five different facilities. They were put into one in our Auto Care unit in Dayton, Ohio. What happened there was one, it's revisionist, and I don't want to be a Monday morning quarterback, and I don't care about the past, I care about the future, and I want to create a great future for Auto Care. So look, the problem with Dayton was you tried to do your production there, you tried to do your retail-ready packaging there, you tried to do distribution there, and you assumed you could do those old volumes, plus more volumes, plus more SKUs and take what's called change-outs. And so, if you're running an old line that you brought in from Garland, Texas and you're running a bunch of 24-ounce bottles through it, but then another customer wants an 18-ounce or a 12-ounce bottle, there's downtimes on the lines, okay. I personally – and it's not going to be me. I believe in inspiring, empowering, encouraging. Now, the other part of that is I believe in accountability big time, too, and the team knows that. But at the end of the day, GAC and Dayton are going to be optimized, and so there will be additional lines brought in there, added to, that will increase the efficiency of that. And long-term, we probably won't need to use some of these Home & Garden and Pet assets to supplement. But Randy Lewis and his team are going to make those decisions and I'll approve them. But there's a lot of optimization to go on there, Ian, and that facility is going to prove to be good. I just think we may have to rethink, do we really want to do distribution all out of there? Would it be better to look at a 3PL? Retail-ready packaging, we never did it, and we did a poor job of it. Maybe we use a third party, a co-packer. We're just re-underwriting that. And actually, I have a whole team of consultants that's been ripping through these plants with me personally. I've learned way too much about standard cost accounting recently. But I'm re-underwriting these facilities, and they're going to be world-class. I just wanted to re-baseline what your view of that was, because the way you asked the question, I just thought I needed to kind of put a new framework around it.

Ian, specifically from an inventory perspective, we will probably build a little bit in our Q1 this year as we reorient the facility. But that as you know, this is a pretty seasonal business, so next year, I think we'll be in great shape again on an inventory basis. Ian Zaffino - Oppenheimer & Co., Inc.: Okay, great. And, Doug, while I have you, can you just give us an update on the NOL balance and the share count pro forma for HRG, so currently?

Yeah. Sure. So the NOLs that we expected to get from HRG, we got. And the capital losses that we expected to get, we got. So those are about $1.2 billion and $400 million. As you know, we entered the year with a couple of years' worth of NOLs to use at the Spectrum Brands level as well. So no real change in what we said before. And about 55 million is the outstanding share count. Now you're going to see still something really funny in the 10-Q. 10-Q is going to show 33 million shares outstanding, because again the way the legal form of the transaction occurred, and then in the fourth quarter you'll see that number move up to what will be the normal run rate again for us. Ian Zaffino - Oppenheimer & Co., Inc.: All right. Great. Thank you very much.

Thank you.

Your next question comes from Jim Chartier with Monness, Crespi, Hardt. Your line is open. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: I got two questions for you. First, on the Home & Garden business, Scott's came out recently and said that they expected 2% to 3% headwind from retailers reducing inventory levels in that business. Are you seeing the same pressure there?

We're going to grow our Home & Garden business. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Okay.

Going forward and next year. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Okay. And then on Project Alpha, just curious what your thoughts are on the early returns from that initiative. And if you could get into some detail that would be great. Or is there an opportunity to maybe expand that going forward?

Yeah. I'll let Doug hit the specifics, but I'll tell you Project Alpha originated with me three years ago. It is no longer going to be a suggestion or a tiny little side project. It's going to become the way of life. So there is going to be absolute resourcing, investing and driving innovation, new product development and news and excitement across our portfolio of businesses. We are going to be faster, smarter, stronger, and we're going to be a lot more relevant to our consumers as we move forward. We are content providers. We are going to make great content, provide it at a great value and drive this business. And Project Alpha will not be part of fiscal 2019, it will be part of the culture of 2019.

Just specifically, Jim, on the continuing ops businesses. We took the opportunity with the – most of the – almost all of the Alpha spend this year to invest in the future. So we did very little pure advertising this year. Instead we've invested for example in the new line of Nature's Miracle cleaning, which takes us out of Pet, and into broader applications in the Home and we're very excited about that. That work's underway. We're getting near the beginnings of launch there, but we've really invested in formulations, packaging, distribution opportunities, sizes, all that kind of thing. And that's true in our locks business as well. We're investing in next generation electronics and smart home. So those are two really good examples of where we're investing in the future with those Alpha funds. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Great. Thanks and best of luck.

Thank you.

Your next question comes from Olivia Tong with Bank of America. Your line is open.

Good morning, Olivia. year

Hey. Good morning. Can you hear me?

Yes.

Yes.

Perfect. So I just wanted to ask you now that you closed the HRG deal what your expectation is for go-forward net interest expense. And then in terms of the priority of cash use, where does your new debt fall in?

Yeah, let me hit that. I think a lot of people were expecting us to call the bonds right away, and they sit up at a Super Holdco level, so they're not part of our bank and bond operating agreements at our Spectrum Brands level. They are high cost interest, however, and they do have a call feature that steps down early next year. You guys all know me, I'm more of a capital allocator and now I'm becoming an operator. But at the end of the day, I want to put up a couple of really solid quarters. I like to see some real rhythm and cadence to the business first. And so my view is I want to get a few quarters under our belt where we make some deposits back at the trust bank and we start to earn your confidence and trust back in us as people that do what we say. But then also, I just have a view of the world where, and I'm not a macro guy, but I do believe that besides us, and I'm being honest, I think a lot of valuations out there are overstretched. And so, my view of the world is when the world doesn't price liquidity high, I want to make sure I do price it appropriately. And so you see today we have $1 billion of liquidity. I want to build a fortress-like balance sheet and I'm not saying that because I have a crystal ball and I think the world's going to fall apart in 2019. But I am saying that I want to materially delever this company, and I've been pretty blunt about that, and we might go sub 3 times levered and we might run it there for a while. We may buy back some shares. But I want to keep the liquidity position of this company extremely high over the next six months, call it. So, look, I'm putting a premium on liquidity where the market isn't. And I want to make sure we have a decent operating track record. And then we'll go and we'll look at those HRG bonds. And we'll look to optimize the cap structure in its entirety, quite frankly. But I want to get there first. I want to earn our way into it.

Got it. I guess just to follow up. Looking at the free cash flow for next year, you're looking for about let's call it $500 million this year. But, obviously, you plan to eventually lose the contribution from the discontinued ops, of course, offset by the proceeds. But kind of curious your view in terms of how the free cash flow outlook – how that looks next year.

Look, again, I'm going to get away from guidance. It's probably going to irritate you a little bit. But I notice a short-termism with all this quarterly guide, I know you guys love it, but I don't love it. I believe in maximizing sustainable free cash. I believe that you have to make investments today to be strong three years to five years from now. And quite frankly, I think that's going to create a tremendous amount of shareholders for everybody that takes a longer than a 90-day view of our company. And so look, I think free cash flow is going to grow materially from here. But it doesn't grow in a straight line. And there may be some times where I need to invest more capital to get more efficiencies, to build out certain businesses, to get the innovation and the vitality that I want in the new product development side, so that we can create the amount of news and excitement that creates increased velocity of our SKUs on the shelves of our customers. And that's where we're going. So I know that's not the answer you want, but that's the kind of shareholder base I want to attract.

Got it. Thanks.

Your next question comes from Sam Reid with Wells Fargo. Your line is open.

Thanks, guys, for taking my question. Quick question here on the Pet segment. It sounds like you guys are well on your way in terms of expanding some of your volumes into the non-Pet channels. I guess I'm just curious though if you could comment on the response you're getting to that from say the pet specialty retailers themselves. And is that in any way impacting your shelf space that you're being allocated at those retailers?

That's a great question. And you know what, that was wildly negative three years ago. I mean we absolutely got our heads handed to us. And we've taken some of our brands like Nature's Miracle and we've gone to the mass channels, and it's growing like wildfire. In fact, I'm here in St. Louis. I just reviewed a new line in Nature's Miracle we're about to launch, and I can't wait for it to hit the shelves. So we have a lot of new stuff coming. It's going to be broadly distributed, but I'll tell you this; I have also been recently personally meeting with the pet specialty retailers and their ownership. And we have phenomenal programs to go back into them with, and I think we're going to grow again because I think their customers are desperate for them to put the specialty back in pet specialty. I think over the last three years they commoditized their offering, their store traffic dropped as a result, you simply can't source everything from Asia and not have differentiated product. I mean, the humanization of pets is real. Our consumers want the best for their dogs, cats, et cetera and they want premium product. And we have the best brands, the best content, and we're going back on the shelf, and yes, we're going to do some exclusive stuff back with the pet specialty retailers. But we think we can bring category management, we think we can build a lot of news and excitement with some in-store displays, with some GloFish, and again, I'm talking about the future now. They're not there today. But what you're talking about, that pain between mass and pet happened to us three years ago and it was a big part of why we've had the struggles over the last two years with that channel. We are rebuilding relationships with that channel and we're bringing win-win solutions to that channel. And I hope I can talk to you in the coming quarters about how that's back on a growth trajectory. But we're not there yet.

Got you. No, thanks so much. That's super helpful. And then maybe just pivoting really quickly over to Global Auto Care here. So I know we've talked a little bit on some of the progress you've made, but I also know obviously there's still some work left. I'm just kind of curious, beyond efficiency in the supply chain, and what are the other levers that you can pull here to really kind of get margins back up to the levels that we might've seen, say, last year for example? Thanks.

Look. Look, I think Armor All can expand outside the garage. Okay. I think we need to change the mindset of STP. Yes, we like Richard Petty. I personally am friends with Bubba Wallace. He's a great guy. We need to get STP into more categories. STP could be a general purpose lubricant, it could go into two-cycle engines, Armor All might expand to deck cleaners. We have got to break the mold of a mindset that's been around since Clorox owned it and previous. And so they call them town halls, I call them real talks, sitting down with our marketing, our innovation, our design teams, I said, look, I want to completely rethink. Nobody knows what STP stands for anymore. You meet a kid today, they think it's Stone Temple Pilots. They don't know it's Scientifically Treated Petroleum. So maybe we need to rebrand it. Maybe we need to have a new slogan, and breaking out of these old mindsets, making what's old new again, bringing new life, new product, expanding into new categories, that's the future of that business. That's going to drive sales and drive margins.

Awesome. No, thanks so much. Best of luck.

Thank you.

Thank you.

Okay. Operator, I think we have time for one more question before we close down the call please.

Your last question comes from the line of William Reuter with Bank of America. Your line is open.

(58:56)...the desire for liquidity. You have almost $1 billion of cash, and then you're going to have $2 billion of gross proceeds coming in from the sale of the Battery business. I wasn't sure whether that commentary was meant to imply that you were planning on keeping a cash balance that's extremely high or whether you still expected to use the majority of this for debt reduction.

Yeah, look, I think to Doug's comment, and again, this is on the margin, but I want to make sure GAC is the highest performing Auto Care operation on the planet, and that's not exaggeration, come March of next year. We're just not going to – we're just – we're moving forward. So that means I want to build some inventory, because I don't want a single customer service issue. I don't want to hear about it, right. So we're going to make sure we supply everybody on-time, in full at a 99% confidence level. I mean, it's just going to be, that's where it's going to be. Okay, so the benchmark is raised, and I have zero tolerance for anything less. So that'll require some capital, but that's small. That's maybe $10 million, $20 million. Your question is a much bigger scale question. Clearly, I'm not going to sit on $3 billion of cash with no yield and I've got my debt structure out there. We're going to de-lever. But I want to get into – I want to put some of these quarters behind us. I want to re-earn the trust of our investor base. I want to get the balance sheet very, very liquid, and when my debtholders see that, I think it's going to allow me to refinance at a very attractive rate. I think it's going to let me call some bonds cheaper than I can get them today, and I think it'll be very prudent for our company as we get into calendar 2019, but we will pay down a lot of debt. We will not sit on $3 billion of liquidity.

Okay. And then just one follow-up for me. It seems like you think that M&A valuation multiples are essentially too high in the market, and in the near term, at least it seems like you're going to be on the sidelines. As you think about the mix of businesses that you have today, do you see I guess a wish list of other businesses out there that if they were at the right multiples would fit in well with the portfolio?

So look, I agree that – I agree with your first part of your statement or question. I have two main focuses and I'm a simple person, drive operational improvement throughout our businesses. That is my number one goal right now and that's where all my effort's going. Two, massively de-lever our balance sheet with asset sale proceeds and free cash flow. And then look, we'll look at tuck-ins, but I don't think you're going to see me do anything aggressive. I view my own stock price is a better place to put my capital than somebody else's business at 14 times EBITDA. I'd also say real quick, a lot of the Bloomberg data, Reuters data is wrong. Some people value us – they've got the wrong numbers in there because of the HRG merger and we're screening at like 17 times EBITDA, and when in reality we're trading at 8 times and 9 times. And so, this is a stock picker's market and if you're out there you need to do your old fashioned homework and figure out what the company's worth.

That's very helpful. Thanks for the commentary.

Okay. Thank you and with that we have exceeded the top of the hour. So we will conclude our conference call now. I want to thank both David and Doug and on behalf of all of us here at Spectrum Brands, we want to thank you for participating in our fiscal 2018 Third Quarter Earnings Call. Have a good day. Thanks again.

This concludes today's conference call. You may now disconnect.