Good morning. My name is Jennifer, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spectrum Brands Fiscal 2017 Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, Thursday, July 27. 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.

Good morning, and welcome to Spectrum Brands Holdings fiscal 2017 third 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 today's call. Now to help you follow our comments, we have placed a slide presentation on the Event Calendar page in the Investor Relations section of our website at www.spectrumbrands.com. This document will remain there following our call. So if we start with Slide 2 of the presentation, you can see that our call will be led by Andreas Rouvé, our Chief Executive Officer; and Doug Martin, our Chief Financial Officer. Andreas and Doug will deliver opening remarks, and then conduct the Q&A session. So if we turn now to Slides 3 and 4, our comments today include forward-looking statements, including our outlook for fiscal 2017 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 risks, Spectrum brands encourages you to review the risk factors and cautionary statements outlined in our press release dated July 27, 2017, 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 am now pleased to turn the call over to our Chief Executive Officer, Andreas Rouvé. Andreas Rouvé: Thanks, Dave, and thank you all for joining us. Turning to Slide 6. Our third quarter performance was not representative of the strong fundamental health of our…

Thanks, Andreas, and good morning, everyone. Turning to Slide 10, let's review Q3 results beginning with net sales. Third quarter reported net sales of $1.3 billion decreased 4.2% versus last year. Excluding the negative impact of $12 million of foreign currency and acquisition sales of $7.2 million, organic sales declined 3.9%. This decline also includes the negative impacts during the quarter of planned unprofitable business exits of approximately $10 million, HHI and GAC operating startup shipment delays of about $24 million, the U.S. rawhide dog chew recall in early June of an estimated $11 million, and retail inventory reduction programs of about $25 million. Reported gross margin of 36.3% decreased 270 basis points from 39% last year, primarily due to unfavorable mix, operating inefficiencies, the negative impact of rawhide recall and increased restructuring activities, along with a negative impact of foreign exchange. Reported SG&A expense of $285.3 million, or 21.9% of sales compared to $295.9 million last year, or 21.7%. Reported operating margin of 12.1% decreased 310 basis points versus 15.2% in the prior year. On a reported basis, Q3 diluted EPS of $1.31 decreased compared to $1.71 last year, primarily due to reduced volume, partially offset by lower interest expense. Adjusted EPS of $1.71 decreased 1.2% versus $1.73 last year, primarily as a result of lower volume, unfavorable productivity and a negative impact of foreign exchange, partially offset by reduced interest expense and lower average shares outstanding. The Q3 reported tax rate of 23.9% decreased from 29.4% last year, primarily due to federal tax credit claims for prior years that were recognized during the quarter. Turning to Slide 11. Our initiatives to improve working capital, not only absolute improvement year-over-year but also systemic improvement throughout the year to reduce working capital seasonality continued to show progress. For the first…

Thanks very much, Andreas and Doug. With that, operator, you may now begin the Q&A session, please.

[Operator Instructions] Our first question comes from the line of Jason Gere with KeyBanc Capital Markets.

I guess, the first big question is, I know you're talking about the full year sales and obviously, we've seen a lot of one-offs in the last couple of quarters that have impacted the organic sales. But you're talking about -- had a category growth above. So I was wondering, if maybe, if you can just give a little bit of context into what you're seeing is the category growth? And obviously, I'm trying to figure out, do you think that organic sales could actually be flat for the year because I know the fourth quarter does have some trading day benefits things like that? So just wondering, maybe if you could just talk a little bit about what category growth is so we have a little bit of context in terms of how we should be thinking about the next couple of quarters?

It's been -- this is Doug, Jason. It's been as you noted in this quarter, a little volatile from quarter-to-quarter. But appliances for example, has been down fairly consistently in the year and we performed better than that in a sluggish environment in Europe and in the U.S. The same is true in the personal care categories. The Home & Garden business, we expect that to be the category to be low singles this -- actually, this year we expect to probably be down a little bit, when you think about repellants. But outside of that the core categories will grow slightly and we'll do better. We've been doing better than the -- from a share perspective. So as you go across the portfolio, our expectation continues to be the same, and importantly, is an expectation overtime for the company. Andreas Rouvé: I think, Jason, just let me jump in also. We have to remember, we are facing an exceptional year 2016, where we had a very early spring and with the Zika virus concern, retailers pulled very early. For instance, the biggest retailer in the world, pulled their entire annual demand in our second quarter. And then they continued to bleed it off throughout the year. And now we are facing accordingly a much lower fourth quarter last year, which we are comping. Same applies, if you look, for instance at our Hardware & Home Improvement division. There we expect the market to grow roughly the category at 3.5%. Yes, so pretty healthy category growth, and we believe we can grow faster because we had continued to win new distribution and are growing very rapidly, also, for instance, with electronic locks. And therefore, as soon as those distribution move challenges have overcome, and we are clearing our backlog in the fourth quarter, we should be in a very good position.

Okay. And then, Doug, can you just comment about the -- how we think about the trading days just for the fourth quarter? So I guess the understanding was on the last quarter was that, we are going to get the timing of some of these one-off things coming through. And between third quarter and fourth quarter, a lot of it was weather related or what the retailers were doing. But I guess, there definitely it felt like fourth quarter was always going to be better than the third quarter, but I think, just with some of the issues that we saw in the third quarter, I'm just trying to think like how we should temper expectations for the fourth quarter? So maybe, if you could provide on the trading days, I might be able to give a little bit of context to how we think about the fourth quarter?

Sure. And we did lay this out on the first quarter call too. It's not the same as the fourth quarter last year, we had a bigger impact. This year, we'll have one extra day in the fourth quarter. We have one fewer day in the entire day, and we got the benefit of the others earlier in the year.

Okay. And then the second question and then I'll hop off. I guess, when you think about the -- a lot of the -- I guess, the talk in the industry right now is about the growth of private label, push of Amazon out there, Aldi coming to America. I guess, when you think about the Spectrum value proposition, which has been very successful in the past just because of the excellent quality, lower price point, success that you've had, can you talk, maybe about what categories, what you're seeing out there in terms of that could impact that strategy going forward? I know, last quarter Walmart was -- had some opening price point stuff that you saw, they should start to lap. So just wondering, maybe contextually, if you could talk about some of the other players out there that are kind of pushing into, I guess, the lower end of the Spectrum no pun intended? Andreas Rouvé: Yes. I think, if you take a look at private label, in all fairness all categories are affected by that. I mentioned earlier, Hardware & Home Improvement, all the big retailers, the home improvement centers are also completing their offering on the private label side. So I think, this is something a trend, which we have to accept is going to be a global long-term trend. However, we are having several strategies, which -- how we are taking actually advantage of it. First, we have a clear commitment for a multichannel strategy, which also includes that we are also supplying private label. Now if you take, for instance, a look in our European business, a very strong chunk of that business is coming from the supply of private label. So to a certain extent, we are benefiting from the change to private label. And we mentioned earlier that, for instance, in our Hardware & Home Improvement, we have a clear commitment to be the global lowest cost producer in dollars. And accordingly, we have big wins also on the private label section. The second element how we are taking advantage of it that we are pushing more innovative higher featured higher-priced products and those especially online. We grew, for instance, in the quarter our e-commerce business in the U.S. by 40%, and that is mainly with the higher featured, higher-priced products and therefore, we are generating very healthy margins, and that is also, for instance, what you saw in our favorable EBITDA margin mix in the appliance business, we are winning at the top end yet there are certain challenges at the low end, at the OPP end, but it's still at the end of the day, a positive impact on EBITDA.

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

Just to kind of follow-up on the end of that last answer. We've been discussing category resets in store traffic for quite some time. At the other side of that is certainly online. So I was hoping you could just go further into your online strategy? And how you connect with consumers? And how you measure that, the fulfillment process and just the opportunities ahead for Spectrum online? Andreas Rouvé: Well, we believe that online is a core channel for the consumer to shop. It will be different category-by-category. There are certain categories like, for instance, electric appliances be it home appliance or personal care, where we expect the share to be in the 25% range of the category. Therefore, a core sales channel and then there will be other categories, which are more impulse, lower value products where the shipping cost compared to the product value are not really tempting for the online distribution like, for instance, batteries. However, we are pursuing now the online channel as a major opportunity so we have dedicated sales teams focusing on all major online retailers, and this includes not only the biggest online retailer but also all the other be it home improvement retailers, the home improvement channel, we are working very closely with them to push our sales. And if you take a look, for instance, we have prime day deals. We have best seller listings, which are up significant for year-over-year, and we are also strengthening our internal resources. We have increased our headcount by more than 30% year-over-year in the digital area, to increase our content online, to make more promotions online. And also to offer partly SKUs, which are specific to online to avoid the channel conflict, which is partly a big challenge.

Okay, great. And then just following up on that. Years and years ago, the marketing was win at the shelf for Spectrum and stuff, but can you just talk more about now how that's shifted? And how you decide? Where the marketing dollars are going? How much offline? How much online, et cetera, and just talk about the whole advertising spend in marketing? Andreas Rouvé: Sure. I think the advertising, if I start with that point, still the Spectrum's value model, which was our guiding principle during the post-bankruptcy period, was really focused on POS, don't do any advertising. And I think that was a model, which was pretty much fit -- a good fit for the battery category where you have low value, a little bit kind of difficult to differentiate products. And therefore, that was appropriate. However, as we go for more innovative products like, for instance, our Armor All, wash and wax wipes, where we are launching a complete new technology, which was not present at all, we have to tell the consumer. And accordingly, we have invested over $5 million in the launch and support of those categories, and that is showing very nice results. Those are the best selling products in the category. So therefore, yes, we are stepping up advertising significantly to support the launch of our innovative higher featured products. Now with regard to the investment into marketing between digital and brick-and-mortar, I think, it is not an either/or. It has to be both. You have to reach the consumer both in-store, because at the end of the day, that's still the vast majority where our products are sold in-store, but then at the same time, consumers are looking, informing online. And therefore, strong improved content is key. And I mentioned early that we grew more than 40% in the quarter in the e-commerce business in the U.S. I can tell you, in our battery business, we are growing by more than 100%. Therefore, very strong approach in all of our categories.

Your next question comes from the line of Majid Khan with Tourbillon Capital.

Andreas, I was a little confused about the answer to the first question, it seems like all your categories on average are growing or declining about 1.5%, and you guys have declined for the year now at almost over 2%. So in order to do better than the category, you have to put up a plus 4% comp in Q4, is that what you guys are guiding to? Andreas Rouvé: The point is, we don't give the forward guidance on sales. But if you just take a look at our backlog from the DC...

I think you just said -- you guys said, you'll beat the category and the -- in order to beat the category you have to do plus 4%? Andreas Rouvé: I just wanted to start the explanation. If you just take a look at our DC backlog of over $24 million, if you take a look at our -- that the retailers depleted that seasonal Home & Garden products last year in the fourth quarter. So if you take a look and compare our fourth quarter sales in F '16 versus F '15, you will see that we had last year a strong decline in the fourth quarter. And therefore, we are comping a low growth quarter in the fourth quarter. So therefore, we are feeling very confident about our growth opportunities in the fourth quarter.

Right. So just to be clear, you've lost $50 million of sales in this quarter that you expect to be pushed into next quarter that by itself is, again, plus 4%. And if I ex out all the one-time stuff that you guys called out, you got plus 1% organic growth in this quarter. So if that trend holds, you should be putting up plus 5% organic growth next quarter. Is that sounds -- seems to be what you guys are communicating?

What we're guiding is really clear. We're guiding on cash flow very, very specifically in a range, and we're expecting now to grow most of our categories most of the time going forward.

Okay. The math of which points to plus 5%, I'm not sure, why you guys are so shy about just walking through the math? All right. We'll move on. Could you guys talk a little bit about the cost saves from the Dayton consolidation?

Sure. We have not specifically given number on the cost savings from Dayton. And it's really a combination of a couple of things that we've done since we've bought the business. We first consolidated -- we had one DC program last year. They got everything into one place in Ohio. So our Garland, Texas, DC into Ohio and then we moved that plus manufacturing, plus R&D into Dayton this year. And that we broke ground about 13 months ago and our really up and running from production perspective, we have a one little line to bring in yet but things are running really well there. And the DC is functioning better and better every day, I would say, it's about 98% right now. So it's in a good shape. And while we haven't disclosed specifically what the cost savings are, it is a better than 3-year payback and also has a significant inventory reduction benefit associated with it. So it's a very attractive product despite the fact that, it's had a better than negative impact on our quarter. We would these projects like this every time they came up.

No. And you guys have a very good history of being successful with that. Just a quick question on the share buyback. As you guys bought back a bunch of stock in the quarter ahead of what you must have known was a bad print view? And there is still room on your authorization to buy back more, and I was just wondering if you intend to be active on that?

Well, to be really, really clear, we didn't know this was going to be a bad, frankly, because we had a plan in place after we exited last quarter and had the earnings call and entered this quarter. So our perspective was, as we entered the last quarter, there was a range of value where we felt our stock was undervalued considering our expectations of cash flow this year and going forward into the future, and we still believe that. At the moment, we've used what's been authorized under that particular plan. What we have available -- available capacity on the $500 million program the board approved in January. So it will just depend upon whether or not we have -- we believe we have an open period upon the new plan. Go ahead.

I was looking -- thank you, Doug. How has July been going? Andreas Rouvé: Very strong. Again, two reasons; A, we know, and again, earlier the question came up on our sales guidance versus the fourth quarter, weather is always unpredictable. So we had a very cool June, and as a consequence, POS in June was low. However, it has picked up now significantly in July, and we are seeing very strong POS in July. And given that the retailers had very low inventory, they have to pull now and they have to reorder. So therefore, we are seeing strong sales, especially, in our seasonal categories. And again, also, we're also making good progress in clearing the backlog in our HHI and also in our Auto Care division, where we had those DC moves because now the efficiency continues to ramp up every day, and we are getting better on that.

We've got a number of other people with questions, so could we take them and then if we have time.

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

I just wanted to go back that the whole concept of retail inventory reductions, and I understand this time around -- this was sort of the first Home & Garden season, in particular, where some of your bigger retailers have implemented some of those changes. So is 2017 or fiscal '17, the right way to think about that would be sort a step function this year and much less of an impact next year? Or this is something that we're going to have to deal with over the next few quarters and years on a significant basis? Andreas Rouvé: I think, it is really this year was a step change. And again, I mentioned earlier, '16 was also unusual from the quarterly phasing. So therefore, if you would compare '17 against '15 or even '14, you would see that the impact would be less dramatic. So it is really that they more -- let me say, came back to a kind of normal, they have improved their systems and all major retailers have also worked together with us to accelerate replenishment orders. And therefore, they can pull those products as needed. The biggest impact is really in our seasonal categories, and there you can just imagine, it's like a kind of bell curve where they go up with their inventory heading towards the peak season and towards the end of the season, they are depleting that inventory. And here in this case, they never ever granted up as much. However, accordingly, they don't need to deplete it as much as they had to do last year. So yes, we pretty much see this as a onetime, and it is especially dramatic if you compare against '16 not so much if you compare it against the long-term normal. However, having said that, all categories are effected. That means, we are seeing a kind of inventory reduction in all categories, it is just not as material. The big material impact was on those two seasonal categories, where you've really have more or less a kind of quarterly phasing because last year, they depleted their inventory in our fourth quarter and the first quarter of the next fiscal year. Therefore, we should see a very nice pickup in those two quarters.

Okay. That's helpful. And just two quick ones. The recall impact on the fiscal fourth quarter, it sounds like shipments won't resume until August. And then the combined annual sales for PetMatrix and GloFish? Andreas Rouvé: I think, on the recall, we will have probably one more month of sales miss in July because we are restocking the replenishment. We expect the sales impact to be in the $5 million range. So if you look at our negative impact of $11 million in year-to-date, it was about $5 million in mid-sales in the month of June and about slightly over $5 million in product returns. So therefore, that's about the impact, which we expect in the fourth quarter.

Okay. Andreas Rouvé: Yes, sorry, Doug is taking the second part.

The PetMatrix business shows in the 75-ish kind of range and growing very, very nicely with high margins, and GloFish is much smaller. We'll give you more information on that going forward. It's a different model, and so it's -- and it's under $10 million.

Your next question comes from the line of Ian Zaffino with Oppenheimer.

I just wanted to maybe drill down on GAC a little bit. I know that weather typically in Home & Garden sort of covered subsequently, I think, you mentioned that. Are those are similar trends that you're going to see also in GAC? Or is that just kind of lost sales? And then I have a follow up. Andreas Rouvé: The impact is probably not as strong as in the Home & Garden. So we do see it some recovery but probably not as much. Because the point is, if you didn't wash your car or clean your car in June, you're not cleaning it twice as much in July. So therefore, yes, we are seeing a nice pickup in POS. We are seeing a nice pickup in sales, but probably not a full recovery. So therefore, the impact is going to be a little bit less pronounced.

Okay. And then just in this fourth quarter, are there going to be additional charges for the consolidation in the HHI distribution and also GAC? Or are those charges all kind of done for the headwinds, call it?

For the combined, but principally, HHI since it started late, there'll be some continuing charges that you'll see in restructuring as we continue the completion of these consolidations. So we're still on the process of moving in East Coast and West Coast DC and on a stage basis. And so you'll see that continue.

Okay. And then just a quick final question would be, you talk about the order book being much higher than usual, what are the particular areas of strength? And is this just kind of restocking? Or what's driving that, just quickly? Andreas Rouvé: Yes. Basically, it is that we have orders on hand, which we could not ship in time. And therefore, basically, those orders are being shipped with slight delay.

That's principally related, again, to HHI and the ramp up of the distribution facility.

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

This is Chris Carey on for Olivia. You got picked up quite a bit in the third quarter for the pet deal and your share repurchases also picked up. Can you just update us on your near-term leverage targets? Then I have a follow up.

Yes. They haven't changed. As we continue to be comfortable in that 3.5% to 4% range, we're willing to go a little bit above that when good opportunities come along. And during the last quarter, we had really three acquisition opportunities that we pursued, PetMatrix and GloFish and then the minority interest of a business called Shaser, that we bought the rest of, which was -- which we expected to do. And that's a little over $300 million in total there. And as I mentioned earlier, we think the stock is undervalued given our expected cash flow performance. So we leaned into share repurchase. And while that takes us to the high end of that 3x to 4x or a little bit above it even this time of our year, we're very comfortable there.

Okay, alright. And then I guess, just more broadly, you're doing quite a bit of work on improving operations within the portfolio. Pet is with your management team, but it still seems like that business is really several quarters away from growth, top line growth, personal care appliances have remained somewhat challenging. And you've obviously been exiting some businesses in order to improve profitability. So, I guess, what do you think the timeline for additional initiatives is, like, how long do these initiatives last? And how does that factor into our ability to return to the market for more meaningful deals especially with leverage coming up this quarter? Andreas Rouvé: Let me first answer the first part of your question with regard to growth in pets. As we have mentioned, we are exiting a business in the European dog and cat food, that business will continue to be -- impact our sales until probably next year. So we are exiting the remaining part of the business over the course of fiscal '18. That's an expected impact of about $30 million impacting our global pet business exiting this tolling agreement in Europe in dog and cat food. Now if you look at the other parts of the pet business, we are actually doing very good. There are certain lower end, let me call it, more commodity products, which we have been sourcing partly out of China, where some of the retailers, they decided to go themselves to China and source it directly. So therefore, we are losing on that lower and on the OPP kind of, yes, traded products side, but we are growing in our core categories very nicely. We are stepping up the launch of innovation and, for instance, with Nature's Miracle, we are growing very rapidly, very successful, and also our international rollout in Latin America in the other parts of the world is showing nice progress. So we firmly believe that pet is long-term growth driver. Yes, we had this year some negative mix effect -- sorry, some positive mix effect walking away from low-margin business and growing in our core and then the dog and cat food. Now in the personal care, we mentioned it earlier, there is a shift also in the mass channel where again, those retailers are pushing at OPP, their house brands. And there, of course, we will be challenged in some of the opening price point product ranges. However, in the higher price point products, the more featured products, we continued to grow very nicely. And that's why we are launching more innovations both in the U.S., Europe and also in Asia-Pacific. So therefore, the trend also we see very positive, and you saw this quarter, for instance in the EBITDA margin, which has improved very nicely despite some challenges at the top line.

Your next question comes from the line of Carla Casella with JPMorgan.

And I'm sorry, if I missed this at the beginning. But did you comment on -- you mentioned the pet -- in the pet business, there is a channel that was particularly weak. Was that the pet specialty? Or is it -- okay. Andreas Rouvé: Yes. The U.S. pet specialty was at a certain trend to push house brands, direct sourcing from China. There are certain challenges. But, again, also in that channel we are successful with our more innovative, more premium products, which are growing nicely. But at the opening price point, certain products, they decided to source directly themselves from China.

Okay. And have you ever broken out how much your business today is private label, not in pet, but overall? Andreas Rouvé: No. And it is really category-by-category, very different. So really the biggest category of private label is in batteries, that's pretty much driven by Europe. We see that trend coming also to the U.S. It was mentioned earlier, the growth of the discount of here in the U.S. But in other categories, especially, if you talk about more featured product like in appliances, yes, it will happen at the OPP area but not in the higher featured, higher price point products. And that's pretty much applies to all categories.

Okay. And did you quantify the Zika sales that were pulled forward last year, did you say how much that pulled out of the following quarter?

No. We did not comment on that. And that's been a -- as Andreas mentioned, we -- for several retailers wanted as much repellents as they could get their hands on early in the year. And then what we saw was a lot of inventory of retail that sold down through the rest of our fiscal year, last year, and even in the first quarter this year. And there's some pantry loading in households that has been depleted right now, so -- or in our second quarter. So that's the aberration that we have over the 2-year period, and that's why we think it's useful to look at 2015 versus what we think will be a more normal 2017 as we finish the year.

Okay, great. And one other; on the -- have you -- can you give us a sense for how much of your sales there to online-only channel? Andreas Rouvé: That is really -- this is really category-by-category, very different. So if you go to the extreme into the small electric appliances, there we are in the, I would say, a high double-digit area. If you go to other categories like Global Auto Care or batteries, there we are in the low single-digit area. And Pet is in between security, plumbing, in between, because there, again, you have more featured products, higher-priced products, where shipment to your home is a convenience like with a heavy pet products. So therefore, it is really category-by-category, very different.

Operator, we have about three to four minutes left. So we can take a real quick Q&A before we close down the call for our 60 minutes.

And our final question in queue comes from the line of Majid Khan with Tourbillon Capital.

Just very quickly, obviously, you guys did a great job on the margin side despite the top line pressures this quarter. I was just wondering, given the things that are reversing and if I hear from the category, your margins going to mix up next quarter? Or down, do you think?

We're not going to guide it at that level, just like we don't on the sales line. We're going to -- we reiterate cash guidance. Your observations are noted and are directionally they make sense. The businesses that we had some onetime issues with in Q3 HHI, Home & Garden, RR -- NGACR among our higher-margin businesses. And we've also noted that the other categories expanded margin in the quarter, including pet and including appliances and personal care. Our objective though to be clear, we want to continue to invest in growth across the business. So to the extent that we didn't drive better margin, we have the opportunity to reinvest that in accelerated growth, we will make that choice. So we want to moderate EBITDA margin expansion within those parameters. And again, year-on-year overtime 20 to 50 basis points is kind of our range.

Got it. And then last question. I think, it's great that you guys setup the special committee. It's a great corporate governance. I was just wondering, when you guys did the Russell Hobbs transaction, which was an affiliated transaction, you had a minority vote. Is your intention to stick with that protocol for this transaction as well?

Well, we don't have -- we don't know exactly what the transaction will be. We have a framework now that we talked about it. And as you know, with any of these, we will follow the right protocols that will protect all of our shareholders, but there is -- we're very early in the process. And there's considerable due diligence and other work to do.

Got it. And I was just wondering, I know, you mentioned that early, but from the precedents that you've looked at, and like, for example, the DSW Retail Ventures where Goldman actually wrote a very good opinion of how some of these deals go. Do you guys have an opinion yet of what discount is appropriate in transactions like this whether NOLs are appropriate consideration, which, I think, in Goldman's case, they said no, et cetera?

Yes. What I'd say, and just we'd reiterate that we're early and there is so much due diligence work to do that it'd be premature to comment on any kind of valuation issues. And, of course, the special committee will be making those choices.

And with that, we have reached the top of the hour. So we will now conclude our conference call. I certainly want to thank both Andreas and Doug. And on behalf of all of us here at Spectrum Brands, we thank you for participating in our fiscal 2017 third quarter earnings call. Have a good day. Thank you.

Thank you for your participation. This does conclude today's conference call, and you may now disconnect.