Good morning. My name is Kyle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spectrum Brands' Fiscal 2016 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. As a reminder, ladies and gentlemen, this conference is being recorded today, Thursday, April 28, 2016. Thank you. I would now like to introduce Mr. David Prichard, Vice President of Investor Relations. Mr. Prichard, you may begin the conference. David A. Prichard - Vice President, Investor Relations & Corporate Communications: Thank you, operator. And good morning and welcome to Spectrum Brands Holdings' fiscal 2016 second quarter earnings conference call and webcast. I'm Dave Prichard, Vice President of Investor Relations for Spectrum Brands, and I'll be your moderator for our call today. Now, to help you follow our comments, we have placed a slide presentation on the Event Calendar page in the Investor Relations section of our web site at www.spectrumbrands.com. This document will remain there following our call. Now, if we start with slide two of that presentation, you'll see that our call will be led by Andreas Rouvé, our Chief Executive Officer; and Doug Martin, Chief Financial Officer. Andreas and Doug will deliver opening remarks and then conduct the Q&A session. If we turn to slides three and four, our comments today include forward-looking statements including our outlook for fiscal 2016 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 April 28, 2016, and our most…

Your first question comes from the line of Bill Schmitz from Deutsche Bank. Your line is open. Andreas Rouvé - Chief Executive Officer: Good morning, Bill.

Hey. Is there a way to disaggregate the organic growth between sort of like same-store sales and distribution gains? And then, like maybe if you can give us some color by category and channels. It seems like there's still a pretty significant distribution opportunity, but can you just like put some meat on the bone, in terms of kind of where you are and where you think you could be category-by-category? And then, again, just to sort of like separate organic between distribution and same-store if you can. Andreas Rouvé - Chief Executive Officer: Well, that's a rather complex question, but let me give it a shot. Let's start with the strongest growth, which is the Home & Garden division. Here, we had a fantastic growth and there we did actually do that detailed analysis, and roughly 50% of the growth is coming really from additional distribution. That means gaining new listings at retailers we had not been listed before, and the remaining is simply the benefit for instance of Zika, but also the mild quarter. So, stronger POS which again led to stronger replenishment orders. Just also a short comment on the Zika, because we were anticipating that that question may also come up later on. The insect repellent category is for us roughly one quarter of the Home & Garden division. So therefore, even if insect repellents are growing, let me say, very strong, that the total impact is still only going to be rather limited for the total Spectrum Brands picture. Now, moving on to the second fast-growing category, Hardware and Home Improvement, here again, we continue to have very nice success both on the retail side of the business and also on the builders segment of the market where we continue to gain market share. On…

No. It does. I mean, so it sounds like, just like the old model, like the base business grows at plus or minus GDP, and then everything else on top of that is kind of distribution. Is that a good way to think about it? Andreas Rouvé - Chief Executive Officer: That's a very good point. And one point which I did not mention earlier during the appliance and that is really the best category. It is the additional distribution, but we're also looking at additional categories, that means looking at adjacent categories, be that for instance in the appliance business, where we are coming out on the market with slow cookers, a category which is growing nicely in the market where we have not been active in the past. So, therefore, also here we are broadening our product offering and therefore expect to pick up sales going forward.

Okay, great. And my peers are going to kill me if I have one more question. I mean that was a little long one. But, is there any reason to believe that the battery category isn't going to get more rational with the new Duracell ownership? So, have you seen any changes, either better or worse, as that transition happens? Andreas Rouvé - Chief Executive Officer: I am hoping for it, and I am begging for it, but it is always interesting, because you and your peers are also looking at Nielsen. It is always interesting to look at the promotional intensity of the competitors. And, as long as some of those sell 50% of their volume at promotional activities, I'm not sure if that's a rational behavior.

Okay. Great. That's helpful. Thanks for all the time, guys. Andreas Rouvé - Chief Executive Officer: Thanks, Bill. Douglas L. Martin - Chief Financial Officer & Executive Vice President: Thank you.

Your next question comes from the line of Kevin Grundy from Jefferies. Your line is open.

Thanks. Good morning, guys. Andreas Rouvé - Chief Executive Officer: Good morning. Douglas L. Martin - Chief Financial Officer & Executive Vice President: Hi, Kevin.

First, I wanted to start on the top line guidance and just to make sure I'm thinking about this correctly. So, you maintained the expectation for a high-single digit increase all-in, but FX gets a little bit less favorable. Doug, maybe you can touch on that component, but that's because that seems to be counter to I think the market expectations and what the dollar has broadly done. But, set that aside for a moment. So, high-single digit increase all-in, but FX gets less – I'm sorry, gets a little bit less favorable. So, does that sort of imply that the organic sales expectation is now up by that amount by which you changed FX, about 130 basis points better. And, if so, is the expectation now about 4% to 5% organic relative to roughly 3% to 4% previously? Douglas L. Martin - Chief Financial Officer & Executive Vice President: Well, what I would say, Kevin, is you're right. We did adjust the top line FX expectations from the last quarter, given – we have a very broad basket of currencies. And if – the euro has been relatively stable since the last call, but the other currencies have – almost every other currency in the world has moved against us a little bit. So, that's the reason for that top line adjustment. And, you're right, we've had – we had a little bit of tailwind in some of our businesses this year. We've talked about Home & Garden, and we've talked about the strength of HHI as well. So, that is – that FX that is being compensated for across the rest of the businesses. Now, we haven't actually guided on an organic basis and you'll see how that plays out across our portfolio as the year unfolds.

Okay. But nothing changes that -- I guess with respect to the contribution expect from M&A, from the deals that you've done, is that fair? Douglas L. Martin - Chief Financial Officer & Executive Vice President: No, that's correct.

Okay. Douglas L. Martin - Chief Financial Officer & Executive Vice President: The deals we've done are annualizing into this year, pretty much right on our plan.

Okay. And then there will be questions on how much repellents contributed in the quarter, do you have a number for the organic ex the contribution from repellents and from Zika? Back of the napkin would suggest it could have been at least half a point, is that reasonable or do you have an exact number? Douglas L. Martin - Chief Financial Officer & Executive Vice President: Well, as Andreas mentioned, that part of our business is roughly 25% of the Home & Garden business and the growth has obviously been very nice. We're hesitant to go into a lot of detail on that because what's yet to be seen in the remainder of the season, which is -- most of which is ahead of us, is what the consumer hold through is and usage is of repellents in particular, and particularly related to concerns around Zika. So we really want -- we're very pleased with the sell-in. We're very pleased that there is plenty of our products at shelf for consumers to purchase and the U.S. has been strong, but we want to see that continue through the rest of the season.

Okay. just one -- sorry, go ahead. Andreas Rouvé - Chief Executive Officer: One small additional comment, the growth of the Home & Garden was -- less than half of that was driven by insect repellent. So, also the other two pillars are also developing very strong.

Okay. That's helpful. One last one from me, for Andreas, how much more sort of pruning or right-sizing of some of your businesses do you see in front of you? There has been some in Pet and some in Batteries, walking away from unprofitable parts of the portfolio. How much more do we still have to go? What should we expect there and what would be the implications on the top line and margin? So that's the first part of it. And then the second part more broadly, you guys have had an outstanding first half of the year. Andreas, what are you most focused on in the back half in terms of delivering as you look across your businesses? That will do it for me. Thank you. Andreas Rouvé - Chief Executive Officer: I think the question of exiting is a difficult one because as everyone knows, we are making better margins in the branded business than on private label business. However, if we have our own manufacturing capacity, we try to fill it up as much as possible, so that we have high factory loading and as a consequence low cost per unit. However, as we then grow the branded business, we are more rigid on price increases on the private label side and therefore, as a consequence, do partly substitute it. That means partly a growth of branded business is going to substitute lower-margin private label business, simply as we fill up our factories with branded growth. So, therefore I would say, this kind of exit will be a kind of moderate continuations, mainly as we continue to grow in our core business. But overall, I would say and I'm also looking at Doug, we have pretty much the biggest exits we have addressed and I think…

Very good. Thank you. Douglas L. Martin - Chief Financial Officer & Executive Vice President: Thanks, Kevin.

Your next question comes from the line of Olivia Tong from Bank of America Merrill Lynch. Your line is open.

Great. Thank you. Just following up on that question to start. You've obviously had some very nice organic sales growth in the first half. So how do you think about consumption and obviously, your comfort level with where retail levels have – I'm sorry, where inventory levels at retailer are going right now? And then on the weather, you mentioned the impact of the weather on Auto Care, Home & Garden, a couple of those categories. So, as you talked about it, what are you factoring in? Are you assuming just similar level as last year or are you assuming better or worse in terms of the weather? And then I have another question after that. Andreas Rouvé - Chief Executive Officer: Sorry. Help me again, what was your first question? The second one on the weather, it's easy to answer. Yes, we are expecting similar weather pattern as last year. So, we are not extremely optimistic, but we are also not extremely pessimistic. So therefore, no exceptional assumption made there. Douglas L. Martin - Chief Financial Officer & Executive Vice President: And that one Olivia is very sensitive during the week, because if it rains during the week and it is nice on the weekends, Friday, Saturday, then things look good across both of our businesses. If rains Saturday and Sunday, obviously that's a bigger challenge for us. So it really is a week to week issue in our – issue and/or opportunity in our business. Andreas Rouvé - Chief Executive Officer: Yes. And then, I got your first question on the consumer consumption. I think this is really category by category different. So, obviously the most obvious is on insect repellent, very strong demand. POS is very strong, even if it's early part in the season. So, we see that strong. Also in the Hardware & Home Improvement division, the market demand is there, it's growing nicely in the 5%, 6% range, so very healthy. I mentioned earlier, in Appliances, last six months, it's a little bit a kind of setback, could be driven a little bit that there is really no fantastic new trend out in the category, be it on the fashion side, be it on the cooking side. But, overall, I would say no dramatic change and really the impact we have seen now in the second quarter on the Appliance is really more that retailers are reacting to the excess inventory, therefore, slowing down order intaking. But, we see that normalizing going forward because even if the market is declining 2%, that is not such a dramatic impact. And, we will continue to expand with our more, more, more strategy. And, therefore, we are quite confident that we can overcome that negative market trend.

That's very helpful. And then, you mentioned earlier in battery that about percentage of sales on promo still being around 50%. Clearly, there is only so much that one competitor can do. But where do you think the right level of sales on promo is, because it's obviously not zero, but where do you think the right number is? Andreas Rouvé - Chief Executive Officer: I have a little bit of handicap that I'm 26 years in the battery business. And the pity is no one, no consumer in the world is going to use more batteries because they're on a discounted price. You either need a new battery in your remote control, in your game, in your clock or whatever, or you don't need it. And therefore, every battery sold on a promotional price is foregone profit, be it for the retailer or the manufacturer. So therefore, every rational person would try to drive the promo share down to 0%. But then, again we have to realize we're living in a competitive world where promotions help to stand out at point of – shelf and that's why still – yeah, a lot of competitors are doing it quite aggressively.

Got it. Thank you so much.

Your next question comes from the line of Joe Altobello from Raymond James. Your line is open. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Good morning. Andreas Rouvé - Chief Executive Officer: Hi, Joe. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Just staying on North America battery for a second, you guys have said in the past that your ACV is about 50%, which seems pretty low. How far do you think that could go first of all? And secondly, could you quantify the shift in timing of the battery shipment that usually falls in March, but shifted to April this year? Andreas Rouvé - Chief Executive Officer: Well, the distribution is -- obviously we can't give you a specific number. The point and I think I had mentioned it earlier, our strategy in the past, after the bankruptcy period, had been on purpose to focus on the big retailers because that helps you to make follow the 80/20 rule, where you focus on your top accounts and you basically walk away from all the B and C customers. Our more, more, more strategy is now going to call on those. We do see there some nice progress because again, in those accounts, you had mainly only two competitors and now with a third competitor appearing, they are quite happy, those retailers, and we do see there some nice progress. How much growth opportunity, that is tough because of cost. Again those competitors will not watch passively our efforts and therefore, I would say it will be a moderate improvement year by year. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Okay. And then in terms of the quantification of the shift – the shipment? Douglas L. Martin - Chief Financial Officer & Executive Vice…

Your next question comes from the line of Zack Fadem from Wells Fargo. Your line is open.

Hi, good morning, guys. David A. Prichard - Vice President, Investor Relations & Corporate Communications: Hi, Zack. Douglas L. Martin - Chief Financial Officer & Executive Vice President: Good morning, Zack. Andreas Rouvé - Chief Executive Officer: Morning.

Hi. Can you talk a little bit about just current capacity constraints in the Home & Garden business? With sales growth accelerating, is there currently unmet demand for that business? And can you talk about the game plan to fill the new capacity once it comes on this fall? Andreas Rouvé - Chief Executive Officer: Actually, the good news is no. We have been aware of our capacity limitations, so what we are doing are two things: A, we are pre-producing. So if you look at our inventory overall, I have to admit I'm not very happy where our inventory stands, but then again a big part of that is exactly the Home & Garden division where we are pre-producing to be ready and to have a high service level as we go into the peak season. The second part we have also lined up sufficient subcontractors which are going to help us to satisfy the demand, even if our own in-house capacities are not there. So we feel very comfortable that we will be able to meet the demand going into the peak season. Obviously, if we use a subcontractor, there's a cost related to it. But then again, as you have seen in the second quarter, the top-line growth easily then triggers and falls through to the bottom line as well. Now, the second point on the capacity expansion project -- that is moving very nicely ahead. We should be able to be online for the next year for the peak season, and the key benefit is really that we will be able to reduce our inventory. As a consequence, that means we will not need to pre-produce as much and hold a reserve inventory, but we can more produce according to the seasonal demand.

And with that business being 100% domestic, I'm curious: are there any plans to expand globally once you have the excess -- the new capacity? I mean, are there any particular hurdles to go global beyond capacity constraints that has kept this business from expanding previously? Andreas Rouvé - Chief Executive Officer: Yes. Actually – and this is (47:33) one of the categories globally, which has the highest demand in registration and approval processes. So, getting local, regional approvals is a very time consuming process and as a consequence that is taking us quite some time. But yes, we are working on it. And again, we are focusing on those markets where we have already a strong infrastructure, where we have a strong presence and where the demand especially for insect repellents is high. And I think, I don't need to go into further details.

Okay. And if I could just throw in one more question on cross-selling efforts in Auto Care, last quarter you hinted at some distribution gains at retail and also expansions in Europe and LatAm. I'm just curious how that's come to fruition, and when we might see it impact results more. Andreas Rouvé - Chief Executive Officer: You know, the cross-selling is going in both directions. If we try to push our legacy categories like batteries, like insect repellents in the auto channel, then obviously we have to be aware that this is seldom a main destination; it is more a kind of impulse purchase for those shoppers which go into that auto specialty channel. So, therefore this is for those retailers seldom a top priority and therefore, those listing degotiations (48:58) are typically only every two years or three years. So therefore we will need to wait for those windows of opportunity to come up, and then again, we need to have very strong compelling reasons for them to exchange a long-term partner against a new partner, which always is related with some risk to them. So therefore that process is ongoing, but we are building up that relationship, that trust level, and we believe that that is going to happen, not in year one, but probably year two, following we will see those benefits. Now, on the international side, that is going to be much easier because there we do not have, as in North America, such a concentrated specialty channel, but a much more fragmented channel. And therefore, there again it is a strength of our organization with our strong infrastructure that we are calling on many of those channels that we will be able to push both Auto Care products into our legacy channels and vice versa, also to take advantage of some of those channels like gas stations and so on to push also some of our legacy products. So that is coming along, but again, from the very beginning we said this is not going to be the year-one impact. That is going to be an impact on year two following, because you need to establish the trust relationship first with the retailers, you need to get your product portfolio, you need to get your marketing materials adapted to call on those accounts, and then it will start to show a fruit.

Great. Thanks so much for taking my questions. Douglas L. Martin - Chief Financial Officer & Executive Vice President: Thanks, Kevin. Andreas Rouvé - Chief Executive Officer: Thank you.

Your next question comes from the line of Jason Gere from KeyBanc Capital. Your line is open.

Thanks. Thanks for squeezing me in. I guess most of the questions have been addressed at this point. Really just maybe talking about the cash flow and obviously the better quarter that came through, and it seems like a positive outlook for the back half. Outside of FX, is there anything out there why the cash flow wouldn't be raised at this point? And just the second part of that is, I know the focus is on debt repayment. I think you said a half turn by the end of the fiscal year. So maybe if you can just give a little color on the M&A environment? I think you've talked a little bit about, maybe if a right tuck-in is there, obviously nothing more strategic at this point. So, I was just wondering if you could give a little color from that aspect? Thanks. Douglas L. Martin - Chief Financial Officer & Executive Vice President: Sure, Jason. This is Doug. Thanks. On the cash flow side, we are tracking the plan this year, relatively speaking. From a working capital perspective, as Andreas mentioned earlier, we've got a little more invested in inventory in a couple of our businesses now in anticipation of seeing the year through in a really healthy way. And to the extent that that does, we expect to deliver near the top end of our cash flow range than the lower end. And if we don't, we get stuck to the lower end of that range. FX does have an impact on it as you've noticed. So, we're holding the range where it is. As you know, we're pretty confident in our ability to deliver cash flow and very, very focused on it. So, a lot of effort and a lot of attention in that area, inventory a little high at the moment. From an M&A perspective, you've laid out the color that tuck-ins could happen. Nothing major right now. Our primary focus is on deleveraging. Andreas Rouvé - Chief Executive Officer: And I think also, let me to that, we have learnt in the past, if we do too many acquisitions, we may be over burdening the organization with the integration. And therefore, we are also very happy that we can use this time not only to delever, but also to complete the integrations of our acquisitions and that's our key focus right now.

Okay. And then, if I could ask just one more question. So, you're talking about battery and personal care being stronger in Europe. And I know obviously, the more, more, more strategy is trying to kind of replicate your success in Europe to North America, and while we've heard about the distribution opportunities, I was just wondering if there's any context areas where you think you might have to work a little bit harder, that maybe it's not as -- that I guess the transformation over maybe not as easy, or are there learnings along the way that you kind of have to take a step back and say, hey, maybe we have look at this a little bit differently. So just wondering, contextually, if there are any areas in North America that maybe you have to change up a little bit with the more, more, more strategy? Thanks. Andreas Rouvé - Chief Executive Officer: Yes. I think and then I had tried to hint at it during my comments. I think the more, more, more requires investment. In the first step, it requires an investment into sales people, people calling on those channels. And again, if you go to the past and look at our expense ratio, batteries North America had always the lowest expense ratio of all our business globally. And that was very simple, because it only called on three or four customers. Yes, and therefore, what we're doing right now, we're recruiting, we're investing into our sales organization to call on those other channels. So, therefore, it will take some time: A, you have to gain the trust of the retailers; B, you have to establish those organizations. And also Doug referred to it for instance in the battery industry, we are also stepping up a little bit our communication, focus on the digital world, but basically we're stepping up our communication, A, with our make in the U.S. focus in batteries that we are very proud to be producing here in the U.S. our batteries; and then second, also getting a little bit kind of more communication out there that Rayovac batteries are as good as the other guys or even better.

Okay. Great. Thanks for the color. Andreas Rouvé - Chief Executive Officer: Thank you.

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

Thank you, good morning. Andreas Rouvé - Chief Executive Officer: Good morning, Bob.

So, wanted to ask. Obviously, you've addressed the guidance for this year. But beyond this year, can you talk a little bit about organic growth goals? I mean, historically, you've been 0% to 2% for the last several years. Presumably, I believe you're setting your sights higher than that with the more, more, more strategy. So, what are the future expectations and goals for organic growth? And what are the changes required to get from 0% to 2% historically to maybe 3% to 5%, or whatever the goals maybe? Andreas Rouvé - Chief Executive Officer: I think Bill has really summarized our thought process quite good. If we believe that GDP is a good average for the category growth we are in, because there will be certain categories which are growing faster, other categories which are growing slower. Therefore you know, if GDP is a kind of underlying market growth which we should be participating, and then again, with our more, more, more strategy; at the end of the day, it is our target to basically double that growth rate, yes. So, therefore we would definitely want to grow faster than GDP and the beauty is, we really see in all categories that growth opportunity, be that in the international expansion, be that in expanding into more channels globally, but also broadening our product offering and going after new categories. And like for instance, in the Auto Care acquisition, if you think about it, we are about protecting, coatings, materials, and so on. So, therefore we believe there may be very interesting adjacent categories, which longer term may offer incremental growth opportunity.

Okay. Thanks. Douglas L. Martin - Chief Financial Officer & Executive Vice President: Thank you. Andreas Rouvé - Chief Executive Officer: Thank you. David A. Prichard - Vice President, Investor Relations & Corporate Communications: Okay. Operator, I think, we've got one question left. So, why don't we take that and then we'll close down the call.

Your last question comes from the line of Kevin Ziets from Citi. Your line is open.

Hey, guys. Thanks for squeezing me in. The last question is on batteries, I guess, curious with the new strategy. If you think you're looking to change your price gaps in the industry at all, or at least the price gaps maybe between your sort of good, better and best offerings? Andreas Rouvé - Chief Executive Officer: Batteries is again a very difficult category because, A, it is a low-interest product. For most consumers, they understand very little about it. And therefore, they buy the product quite often as an impulse. However, even if you look at the details, there can be huge performance differences in batteries and certain batteries may work very well in a so-called low-drain device like a remote control or a clock on the wall. However, it may operate very poorly if you put them into a toy or if you put them into a kind of a digital equipment where you have high pulse electrical flows, and that's why we want to educate consumers better to underline what is the reason for those price differences, because if you look at some of the price differences in front of the shelf, and you go from the top-priced product to the bottom-priced product, you may easily find us a factor of 3 to 4. And therefore, it is very important, our opinion to educate the consumer, so that he knows when to buy which product and when not to buy a certain product, even if it may look attractive from the price point. And that's really our strategy to try to offer the consumer, for the different price points, the best offering.

Okay. Do you still, I guess, offer similar value versus your national competitors? Andreas Rouvé - Chief Executive Officer: As good or better.

Great. And I guess last question is just on your capital structure, one of your bonds becomes callable later this year, I was just curious, your thoughts around potentially refinancing that? Douglas L. Martin - Chief Financial Officer & Executive Vice President: You've seen us, Kevin, doing a lot of work on capital structure over the last 18 months now I guess, and you're aware that we're always evaluating where we are. So, as that one comes near, we will obviously be reviewing it and if it makes sense for us to do something, we will. But outside of that near-in one, our tenure is very long and very manageable. So, I feel really great about the capital structure right now, and we'll review that a little later in the year.

Makes sense. Thank you, guys. Andreas Rouvé - Chief Executive Officer: All right. Thank you. David A. Prichard - Vice President, Investor Relations & Corporate Communications: Thank you. Thank you, Kevin. And, thanks to everybody. With that, we've reached the top of the hour. And, we know there is a lot of other calls this morning. So, we'll go ahead and conclude our call at this time. I certainly want to thank Andreas and Doug. And on behalf of all of us here at Spectrum Brands, we want to thank you for participating in our fiscal 2016 second quarter earnings call. Have a good day. Take care.

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