Good morning. My name is Jetenia and I will be your conference operator today. At this time, I would like to welcome everyone to the Spectrum Brands' Fiscal 2019 Second 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, Wednesday, May 8. Thank you. I would now like to introduce Mr. David Prichard with Spectrum Brands. Mr. Prichard, you may begin your conference.

Thank you, operator, and welcome to Spectrum Brands Holdings Fiscal 2019 Second Quarter Earnings Conference Call and Webcast. I'm Dave Prichard, Vice President of Investor Relations for Spectrum Brands and your moderator for today's call. Now to help you follow along with our comments, we have placed a slide presentation on the Event Calendar and presentation pages in the Investor Relations section of our website at Spectrumbrands.com. This document will remain there following our call. So if we go to presentation and we start with slide 2, you'll 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 conduct the Q&A session. If we turn to Slide 3 and 4, you will note that our comments today 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. Due to that risk, Spectrum Brands encourages you to review the risk factors and cautionary statements outlined in our press release dated May 8, 2019, and our most recent SEC filings and Spectrum Brands Holdings' most recent 10-Q and 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. I will now turn the call over to our Chairman and CEO, David Maura.

Thank you, Dave and thanks everybody for joining us on the call today. In many ways this was a very good quarter for our company. In January, we generated just under $3 billion of cash proceeds from the sale of assets. We rapidly allocated a portion of these proceeds and paid down $2.40 billion of debt, while returning $250 million to our shareholders through share repurchases. And we will distribute approximately $86 million this year to shareholders in the form of dividends. As a result of these actions, our gross leverage which peaked at nearly 6x in December of 2018 just a short while ago, has been reduced at the end of the second quarter to a net leverage of approximately 3.9x. We expect to finish the current fiscal year with net leverage of approximately 3.5x. These actions have resulted in a much stronger Spectrum Brands with a much stronger balance sheet. And they're paving the way for a material free cash flow growth in 2020 and positioning our company to end 2019 in the strongest liquidity position we've been in recent history. Through these accomplishments, we are completing a period of significant transition and we are now entering a period of stability and renewed focus. Similar to our first quarter, these second quarter results were in line with internal expectations. We were pleased with both strong reported sales growth and more importantly we're very happy to deliver organic revenue growth 5%, with all four business units contributing. These results were led by strong growth in Home and Garden of 14%; HHI, our Hardware division grew at 4%, our Pet unit grew at 4% and our Home and Personal Care Appliance business grew 1% organically. Adjusted EBITDA was flat with last year right on our first half plan. We do…

Thanks, David and good morning everyone. Turning now to slide 10 and a review of Q2 results from continuing operations beginning with net sales; reported net sales increased 2.7% and organic net sales grew a solid 4.9% excluding unfavorable FX of $19.3 million. All four business units delivered organic growth based by a 14% improvement for home and garden. Reported gross profit was unchanged. Gross margin of 33.7% decreased 100 basis points primarily due to input cost inflation, an unfavorable product mix partially offset by pricing. Reported SG&A expense of $235 million was unchanged from last year coming in at 25.9% of sales this year compared to 26.6% a year ago. Reported operating margin of 4.6% improved 100 basis points due to lower acquisition, integration and restructuring charges. On a reported basis, a slightly higher diluted loss per share of a $1.06 versus a $1 last year was attributable to one-time interest charges related to the early extinguishment of debt and foreign exchange losses associated with multi-currency divestiture loans, partially offset by lower restructuring and acquisition and integration expenses and a larger income tax benefit. Adjusted earnings per share of $0.26 decreased 46.9% due to higher operating expense, driven by increased stock based compensation and a higher interest costs from assumed HRG debt. Turning to Slide 11. Q2 reported interest expense from continuing operations of $94.2 million increased $26.5 million driven by one-time interest charges from early extinguishment of debt, primarily the assumed HRG debt. Cash taxes of $14.5 million were comparable to last year. Depreciation, amortization and share based compensation from continuing operations of $53.9 million increased from $27 million last year primarily due to increased share based compensation and the impact of home and personal care depreciation and amortization this year as a result of our moving the…

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

[Operator Instructions] You first question comes from the line of Olivia Tong with Bank of America.

Great, thanks. I want to actually start similarly to the way that I started last quarter, which is just about free cash flow; obviously we've got a lot of moving pieces here and I know that first half is usually used, but you are starting off of a lower base on a year-over-year basis, so can you just talk through the different puts and takes there to start? Thank you.

I will let Doug take that first one.

Hi, good morning, Olivia. Yes, the free cash flow - we are not guiding on this year principally not because we don't want the clarity and transparency, but because at the time of the sale of the two businesses in January. One in early January; one in late January what would traditionally have run through working capital will now run through gain or loss on sales. So, it's a - it's a confusing story and at the end of the year we'll lay out all of the pieces - all of the pieces for you. I can tell you that we're on track against our internal expectations on free cash flow and have obviously captured all of those proceeds already and they're reflected in our net debt numbers and a little bit of cash we have on the balance sheet at this point. So I gave you outside of that then the elements that you can use to - for your modeling and if I were - as I think about it, I like to model what I think the next year might look like based on information we have coming out of this year. So that's CapEx, that's depreciation as adjusted for the debt pay down that is a restructuring cash-- cash taxes, we still expect to be between $40 million and $50 million on an annual basis going forward. So, if that's - hopefully that's helpful, if not, please reach out to Dave or Kevin and they can continue to help.

The only thing also I would add, is we did pay off over 50% of the debt of the company; we do generally a lot of free cash in the back half of our year, so we're starting to collect the cash now, and so, our liquidity position will build as we finish out this year. And I think if you just look at the debt instruments we've retired thus far and we may do some more in the future. I think you can quickly come up with this $130 million, $150 million bucks of reduced interest expense going forward of which we'll start to see the benefit when we report the third quarter results, next time we talk to you.

Got it. Thanks, and then just on sales, clearly quite a bit better than we expected across the division pretty broad based, so - can you go over any timing shifts that we should be aware of? How you view your in-store inventory levels at this point? And then in terms of specific divisions, clearly appliances was better, can you talk about how sustainable this is? What changes you've made so far to the business to reinvigorate it? Thank you.

Yes, look I think across - hopefully you're getting a consistent story. I took this position just over a year ago and we obviously had an unfortunate quarter to report to you then. Since then we've tried to really get the company back to what I call vision & clarity focus and that means, we want to eliminate what I view is non-strategic spending, and we want to increase strategic spending, and so what I am trying to do is push - steer the ship toward higher levels of investment in new product development innovation and put more money into A&P and marketing and really start to drive the top-line. Again, look, we don't want to over promise anything for 2019. 2019, as you remember, I build it as a year of returning the company to stability and planting the seeds for growth in 2020, but clearly we are planting those seeds, and you know, look I would tell you on the bottom line, we could be reporting much better numbers, but we are continuing to invest in earnings dilutive activity in the short run which is higher spend on R&D and marketing.

Olivia, from a timing perspective, I would say that the Appliance business is - you saw some improvement, we are beginning to lap some of the negatives from last year and we've got a new management team in place and we'll have probably a better update in the - on the next call and the progress they're making, but they're they are highly focused on not just revenue, but profitable revenue. So, I wouldn't expect any surprises going forward coming out of there between now and then. And then from Home & Garden perspective, I would say that this year is the weather's been generally better and POS particularly in the big box channels has been pretty strong so far. We still have 70% of the season in front of us. So a lot to go yet, but relative to last year and to your timing question, I would say for Home & Garden a little better seasonality.

Your next question comes from the line of Bob Labick with CJS securities.

Good morning. Congratulations on some nice growth. Yes, let's keep it up. So I wanted to kind of talk a little bit about that and then shift to online strategy as well, maybe merge the two, but can you talk about how you view each of the segments in terms of over a medium or longer-term organic growth potential, and then, one of the key drivers you are pushing - and you mentioned in the prepared remarks a focus on e-commerce particularly in PET, so maybe talk a little bit about the online strategy as you shift there for growth as well?

Yes, in the last 12 months we've made some key hires in the digital space, not just digital marketing, but we've got some key talent on board right now that really understands algorithms, that understands how to - again I think in the early days, we were very much focused on how do we fix our search, how do we get good content and I think we have done a pretty good job there. I don't think we've done a really good job of getting a return on digital spend, and so, right now we're in the midst of kind of optimizing that digital spend, but we are doing it with people that actually speak the language of the Amazons of the world and our other e-com partners and we're partnering with them, and quite frankly, we're getting better returns on the capital we allocate there. So, I think, part of my new role is - we spent kind of ten years-- I was doing a lot of external capital allocation. Right now we want to get internal capital allocation to a much - to a much higher rate of return and we are doing that on the digital side. Clearly on your first question, I mean Appliances continues to migrate online pretty rapidly. We are definitely seeing a meaningful increase in e-com and on our PET business as well. Home & Garden is small, but the growth rates are strong; HHI is - that's a smaller component. Any time you get liquid in a bottle like on our Home & Garden side, you've got heavy products like hardware and locks. You typically doing less online, but we continue to step up investment there, particularly on the digital lock side. We were one of the first to market with our Kevo products, and I see just a very low penetration rate there, with massive white space and I see very strong end market growth. And we see adoption rate low at the moment, but the growth rate is exponential. And so I think, you've heard, Doug talk about it. I was recently in Lake Forest with our HHI team and I've just - we're revamping some of the merchandise, we've put out, we want to do not only a better job, explaining our smart key technology to our customer. But also trying to bring clarity at point-of-sale and increase the customers confidence at the point of purchase. Because, we think digital locks they're here to stay, they've got a great tailwind behind them and we want to continue to be the market leader there and quite frankly, we think that'll grow whether we're in expansionary times, recessionary times given the tailwind here in the adoption rate. We really want to maintain our leadership position. So you'll see a lot more of that and you'll probably see a lot of news release in this summer and new products that were coming out with to further that activity.

Okay, great, thank you for the color. And then just one other quick one. You mentioned obviously, a whole new team or mostly new team at HPC Executive level. Could you talk about the priorities you've given to them? Is it - I don't want to put words in your mouth, what were the priorities and the charge that you've given to them going forward?

Listen to be blunt; I just think we got off track in that division. We tried to do too many things, to too many people with too many SKUs. Look, we are very, very good at procuring product. We are a low cost provider. We marry that with some innovation and we have great brands. And we've really just got to get back to our core. We've got to get the right product to the right customers at the right prices and that's what we've done for a decade. And I think we just kind of - we kind of lost focus. So it's restoring that focus. Listen, there's some complexity in that business that we are going to drive out, there's more efficient ways to do the things and so, we're doing that. But listen, we are - there is no question on the profitability line this quarter, we probably could have doubled it for reporting purposes, but we would have been pulling back levers on marketing, on innovation. And that's kind of the new theme; I'm just not willing to sacrifice short-term numbers that would rob us of future growth. My mission from 10 years ago was to create a sustainable free cash flow enterprise, and you just have to plant this - no better time to plant seeds for growth in the current moment, it's just those sometimes are expensive seeds. And so they have a mandate to continue to invest behind innovation, you've got to bring new products that answer consumers' needs and convenience. And you've also got to let people know about why those things help their - help them have better experiences in the kitchen or on a personal - on a beauty side, you've got to let them know that through smart advertising. And so, those are different mandates that were not in the DNA of the prior team, it is in the DNA of this team, but they also have a dual mandate, which is to really streamlined supply chain, operating expenses, so that we can reinvest in more strategic activity. I would tell you that are kind of the main new vision, clarity and focus being brought to that business unit.

Your next question comes from the line of Faiza Alwy with Deutsche Bank.

Yes, hi, good morning. So my first question has to do with HHI. Can you talk about your outlook for that business now? I know when we last talked about it in February; there was some concern about housing and remodeling slowing. I think since then things have improved. So I just wanted your updated take on, how you're thinking about the market?

Yes, I think you're right. Look, we definitely saw a pre-rapid and deceleration in demand, I would tell you, I think it was November 2018 when I first partially noticed it and it was very sluggish through December and so that had me quite concerned is a real headwind. Clearly, I think the pivot by the Fed, lower rates from the market and the tenure trading it 2.5% and pushing lower now given the - given macro events is lowering mortgage rates. And the housing market has just become accustomed to very low rates. And so you're right, we do see a pickup in new home sales, which we think affects about 25% of our total top-line in the HHI division. But we remain the dominant player in the remodel space. And again, I think right now it will be great, we see with the builders is, there is actually still a lot of pent-up demand. And you see the millennials wanting to get into housing. It's affordability and it's a supply issue. And so, quite frankly a lot of our builder partners are now looking to be - how do we create more product in that $200,000 to $500,000 zip code and that quite frankly would be extremely good for us, if we could see kind of the new home builds be in that range. Because they also tend to be the early adopters of our digital locks. So look it's - again, I don't - we don't want to get over our skis, we have a tough comp in Q3 for the HHI unit. We're just billing - we're billing 2019, as we're getting back on our feet, we're stabilizing all our business units, we want to take the right long-term approach to investing now for better growth in 2020. But I'm feeling a lot better about the outlook for HHI as I talk to you today than I did 3 months ago.

Okay, great. And then just a follow up on like HHI EBITDA. So I know it accelerated relative to last year, but last year was a very easy comp from a margin perspective. And if I look at it on a 2-year basis, it's still decelerated. So could you talk about some of the puts and takes? Is it a mix issue, is that cost inflation, is that more investments? So just a little bit more color around the EBITDA, if I compare it to 2 years ago.

I'm going to pass this one to Doug, if that's okay.

Primarily related to input cost inflation, little bit of - a little bit of tariffs, we've gotten some pricing across the board, across some of our categories there, but it's generally driven on the - on a cost side in the short run. And some of the initiatives that David talked about earlier in his prepared remarks include manufacturing and supply chain improvement opportunities and we see some in HHI.

Your next question comes from the line of Jim Chartier with Monness, Crespi, & Hardt.

Good morning. Thanks for taking my question. Hi guys. On the investment spend your first - can you give some more - a little bit of color on how much it was weighted to first half versus second half of this year? There was a more weighted to first half and should we see less impact on EBITDA margins in the back half?

It varies by division. So I can tell you, look with 70% of the lawn and garden season left, and we're off to a reasonable start, we're actually going to ramp up spending. So that would be a situation where we actually see marketing increase, but again it's increasing, it's supporting the appropriate amount of sales and profitability growth. Plus, we have distribution wins and we want to support those for our retailers, customers. I would say on the appliance side that was probably more weighted in the first half things like Manchester United are not inexpensive endeavors. Doug, I don't know you want to add some more color?

Now I think that's right. And I think the - later in the year appliances will ramp up a little bit as we headed into the holiday quarter, which is our first quarter next year, but some of that spend will be committed and happen ahead of time. And then on the HHI business they are relatively stable through the year, a little bit heavier in the back half, perhaps, again given their seasonality and pet is pretty steady state.

Great. And then you talked about the detailed study for improvement in efficiency opportunities. Do you plan to flow through most of that to the bottom line or you plan to continue to reinvest into your growth initiatives?

Yes. Look, I'm actually very excited about this. I want to wait and get some more tangible evidence in our hands, before we kind of talk to you more broadly about it and we intend to do that next quarter. I think you should think about it as, no stone is going to go unturned. We - if there is non-strategic spend or spend that is not value added or if there's redundancies or too much manual procedures and we can become more efficient. It's a pretty comprehensive study; I think a lot of it will come on the procurement side. But again, I want to balance it, I think we will draw a lot of it to the bottom line. But I want to make sure we take a decent proportion of it and reinvest in the business. I want us to get much more in line with top performing CPG companies in terms of marketing spend, innovation and new product development. We - I'm bent on steering the ship towards a much healthier vitality, underlying all four businesses. We must make investments in 2019 to deliver growth that shareholders deserve in 2020 and beyond.

Your next question comes from the line of Sam Reid with Wells Fargo.

Hey guys, thanks for taking my question. Look, it's exciting to see all the innovation coming online across your platform and across all the segments. Could you give us a sense those to what proportion of your sales this year are coming from new products versus existing products and maybe how that compares to prior years?

It's never enough. Doug you want to hit it?

Yes. I don't have specifics to provide to you, Sam, because they vary across the businesses. But our vitality rate in general is over a 3-year period is in generally in the high teens area and has been increasing in the last couple of years and will continue to increase a little bit this year.

Got you, now that's super helpful. And then if I could sneak one on HHI here. You guys mentioned in the prepared remarks, relatively low household penetration rates across that bolts and smart lock or electric deadbolts and smart lock products. Could you give us some numbers around there though and what penetration rates might be today versus where they could be over the next 3 to 5 years?

Penetration in the US is sub 10 percent-ish on the smart lock category. Our overall -

Use between 5% and 10%, that's as narrow as we go.

And then our overall electronics business which would include TouchPad and other non-smart, non-connected, so it's both connected and non-connected, it has also a little under 10% of around, around 10% of our total business.

Just listen you have a whole generation of customers that is used to just living on their phones. And now they're buying their first home, to be able to run that house on their phone, to access the house to lock the house, to let somebody deliver something, or to let a relative in or it's just the future and we want to be on front.

Your next question comes from the line of Joe Altobello with Raymond James.

Thanks. Hi guys, good morning. So I did have a few questions around the investments you guys are making this year. You talked about that for the last couple of quarters, including this morning. And if I look at selling expense for example on R&D expense. Both are flat year-to-date, so it seems like all of that investment is going to other areas of marketing. Is that the case and if so, can you help us quantify how much of a step-up in marketing you're expecting in your EBITDA guide for this year?

Joe, there are actually those couple of areas and that the piece that you don't see, which is reprioritization of gross to net spend. So we're focused on all of those revenue driving, spend activities. And I will tell you in the first or in the second quarter that we just came off. We did increase investment in Home & Personal Care and we did in the Home & Garden business and we are planning to - as planned, both of those are as planned. The other two businesses as planned to will, were about flat year-over-year and we'll see step-up in investment as we go throughout the year. But as it relates to those individual line items, they vary by business depending upon what we think is the best way to reach our consumer.

And you'll hear more of this theme, as we get into kind of Q3 and we talk to you about some additional shareholder enhancement vitality at initiatives that we're undertaking. Again, I think you could parallel at some of our earlier comments about getting a very detailed dashboard of non-productive spend and so there's a lot of dollars that are being recycled inside of these units. But to Doug's point, I mean we could have probably reported twice the profitability of the appliance unit this quarter, if we hadn't stock with our discipline to invest in innovation and marketing, in the phase of a challenge quarter profitability wise particularly in that unit. So we are sticking with a discipline.

Okay. So for the full year, is the step up $20 million to $30 million, would you call it this year?

That's not an unreasonable. The high end of that, it is not an unreasonable area.

And that's recurring right? That doesn't come -

Yes. That will go on forever - that would not only go on forever, but as David mentioned, as we get through these productivity and efficiency initiatives, some of those savings we'd like to reinvest in future growth. And obviously some of that investment will go in these areas.

Okay. And just one last one, if I could squeeze it in for David. I guess how are you thinking about uses of cash given that you paid down a ton of debt already, you bought back some stock in the second quarter. It sounds like you want to pay down more debt in the back half of this year. Could we see more stock re-purchases or you done for this year? And how you think about M&A as well? Thanks.

No. Listen, I appreciate that. I think the greatest single use of cash that has the greatest single return on it is buying back our share. However, I just lived through a 12-month period of time where, we went through tremendous disruption operationally and we transformed the company through divestitures and deleveraging. I am committed to delivering a stable Spectrum Brands this year that has vision, clarity, focus and ends 2019, it is as the smarter, stronger - faster, smarter, stronger Spectrum Brands in the future. We - I believe - I've talked about wanting to get to kind of just more consistency, just real rhythm and cadence in the underlying operations and we're making progress. I mean if you just look at every metric from kind of three quarters ago, two quarters ago and this quarter we are absolutely moving in the right direction. We still have plenty of wood to chop, I don't want to get out over my skis, but I think we - look, I'll tell you, we are starting to look at tuck-ins again. So I don't see anything big on the horizon, but if we can do tuck-in acquisitions that are very, very accretive that fit with our existing business units, and are highly accretive and synergistic, we'll look at that. But it's going to have to be very, very compelling, because buying our own shares at these prices, like I said, is probably the single best use of capital allocation we can make.

Your next question comes from the line of Karru Martinson with Jefferies.

Good morning, guys. On yesterday's Energizer call, they talked about the VARTA dispositions of that they're being forced to make and the slightly lower proceeds coming from that, expected. Is there any liability for you all as part of that?

So we sold that - the entire battery division for $2 billion. We have reserves $200 million, should that we needed. And we will wait to see when they complete the sale. But no, we've booked and we've disclosed that $200 million possible true-up. And that's capped it - does a cap of $200 million. And so, hopefully, they do better, but we'll have to work - we'll have to wait to see how they progress that M&A discussion, and who is the buyer and at what price.

Okay. And with the material debt pay down here. How should we think about pro forma interest in on a go forward annualized basis?

If you - we will be filing the Q at the end of the day today. You'll see the debt table in there, it's very straightforward now it's - so you'll be able to calculate it on an annualized basis.

Okay. And just lastly, there's been some talk for other seeing some gains in the Home & Garden space for roundup equivalents. I was wondering if there was any sort of a lift for you guys in lawn and garden space.

Look, we have expanded distribution there. It's never enough for me, I want more, I think our products have better efficacy, I think our products are better for a lot of things. I have been warned about the comments I can make it even litigation against Monsanto and glyph sate. But Spectracide is an amazing product, it's a great product. We want to tell more people about its benefits and the fact that we think that it's a superior product offering at a great value price point. We want to continue to get that message out there. So that's why we are stepping up our investment marketing.

Okay, operator. It looks like we have one more questioner, so let's take that and then I think we'll close down the call.

Your final question comes from the line of Carla Casella with JP Morgan.

Hi, I wondered if you could give us an update on any expected impact of tariffs, if they are - if changes are made.

Yes. We would prefer both sides reach a consensus. They think that'd be the best interest of the globe and ourselves. I think that depending on how things progress this weekend, you know, look, we went through this fire drill last fall; we were prepared to pass the increase on January 1, we know it got extended to March and here we are. Obviously, this week has injected a lot of volatility; I don't know any more than you know, but I think the biggest problem for us would be, if demand elasticity, I mean, yes, if it were from a mechanical standpoint we receive Chinese product and we would have to write a check to the United States Treasury, but, we are going to have to pass that on, and, so ultimately the consumer is going to pay for it, where we have to have go through the fund that we don't enjoy doing with our retailers. But if we end up in a tariff situation we'll pass it on and we'll see where the final demand is. But I don't think we are alone in this, and then you know, thank god, the majority of our businesses are vertically integrated on this side of the globe.

Okay, great. And then you mentioned the Appliance, personal care appliance lost a little bit of share, when do we cycle that? Was that something that's just started this quarter?

No, it began last year in the first half of last year, and so will continue to lap it as the year unfolds, but thinks - comps should begin getting better in the US.

Okay, and then just on the - now that you've completed the divestitures and brought your leverage down and you expect to get to 3.5x. Is that a good long term, go forward level? And were that and all of your kind of cost savings and business investment initiatives? Do you think it's - are you starting to look at maybe adding to the portfolio with another leg of the stool?

Yes, I think in my earlier remarks I said look I really want to see consistency in the rhythm and cadence of the underlying earnings of the company. We are looking at small tuck-ins but these are not anything that would move the needle. I think our stock price is very attractive relative to the value of what people want for private assets. So it's got a high hurdle to get in here, and I think we want to deliver what we promised this year. We want to deliver the - keep the balance sheet down, but, I think as we get into some greater detail, we can talk to you - we are excited to talk to you more about it next quarter. If we can really start to drive the EBITDA line, going into 2020 et cetera then it's obviously free cash flow improves and we would generate a lot of free cash over the remaining life of that buyback program, and we'd like to take advantage of it. So it's just - we are looking at a lot of things and we'll continue to be opportunistic is the best I can -

And on leverage - on the leverage you think is the 3.5x go forward or would you be willing to take that up or does that need to come down more?

We like 3.5x given what happened last year and that's where I would to see us run on a long-term basis.

Okay. Operator, well thank to David and Doug. We have exhausted our questions and nearly reached the top of the hour. So, we'll go ahead and conclude our conference call. On behalf of Spectrum Brands, we want to thank all of you for participating this morning in our fiscal 2019 second quarter earnings call. Have a good day.

Thank you for participating in today's call. You may now disconnect.