10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2013

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT

For the transition period from             TO             

Commission file number 333-180736

ARMORED AUTOGROUP INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	27-3620112
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)

44 Old Ridgebury Road, Suite 300
Danbury, Connecticut	06810
(Address of principal executive officers)	(Zip Code)

(203) 205-2900

 (Registrant’s Telephone Number, Including Area Code)

Indicate by check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.05 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

The aggregate number of shares of the registrant’s common stock outstanding on November 1, 2013 was 1,000 shares of common stock $.01 par value.

Armored AutoGroup Inc.

INDEX

	PAGE
PART I — FINANCIAL INFORMATION
Item 1 Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012	6
Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2013 and 2012	7
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012	8
Notes to Condensed Consolidated Financial Statements	9
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3 Quantitative and Qualitative Disclosures About Market Risk	28
Item 4 Controls and Procedures	28
PART II — OTHER INFORMATION	29
Item 1 Legal Proceedings	29
Item 1A Risk Factors	29
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3 Defaults Upon Senior Securities	29
Item 4 Mine Safety Disclosures	29
Item 5 Other Information	29
Item 6 Exhibits	30

2

Cautionary Note Regarding Forward-Looking Statements

Some of the statements contained in this Quarterly Report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, including, in particular, statements about our plans, strategies, prospects and industry estimates. These statements identify prospective information and can generally be identified by the use of forward-looking terminology, including the terms ‘‘believes,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘expects,’’ ‘‘seeks,’’ ‘‘projects,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘may,’’ ‘‘will’’ or ‘‘should’’ or, in each case, their negative or other variations or comparable terminology. Examples of forward-looking statements include, but are not limited to, statements we make regarding: (i) our liquidity, including our belief that our existing cash, cash equivalents and anticipated revenues are sufficient to fund our existing operating expenses, capital expenditures and liquidity requirements for at least the next twelve months; (ii) our outlook and expectations including, without limitation, statements made regarding continued market expansion and penetration for our products and (iii) expected new product launch dates and market exclusivity periods. The foregoing is not an exclusive list of all forward-looking statements we make. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements included herein. They are neither statements of historical fact nor guarantees or assurances of future performance. The matters referred to in the forward-looking statements contained in this Quarterly Report may not in fact occur. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:

·Our historical financial information may not be indicative of our future financial performance.

·Our operating results and net earnings may not meet expectations.

·Our quarterly results of operations are subject to fluctuations due to the seasonality of our business and other events and, accordingly, period-to-period comparisons should not be relied upon as an indication of future performance.

·Our financial results could suffer if we are unable to implement and successfully manage our core strategic initiatives or if our core strategic initiatives do not achieve the intended results.

·Sales growth may be difficult to achieve.

·We face intense competition in our business, which could lead to reduced profitability if we cannot compete effectively.

·A significant portion of our net sales and net earnings is derived from a few key customers. The loss of any one or more of these customers could cause a material decline in our operating results.

·Changes in marketing distributor relationships that are not managed successfully could result in a disruption in one or more of the affected markets.

·Customer support of our marketing and advertising programs and new product launches is critical for our success.

·Providing price concessions or trade terms that are acceptable to our customers, or the failure to do so, could adversely affect our sales and profitability.

·Weather can influence consumer behavior, especially for our appearance products which sell best during warm, dry weather, and less if weather is cold and wet.

·We may not successfully develop and introduce new products and line extensions.

·Volatility and cost increases in raw materials, energy, shipping and transportation and other necessary supplies or services could harm our financial condition and results of operations.

·We are exposed to commodity fluctuation risk and may not be able to adequately hedge our exposure, if at all.

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·Reliance on a limited base of third party contract manufacturers, logistics, procurement and information systems service providers may result in disruption to our business.

·We may not be able to hire or retain the number of qualified personnel required for our business, which would harm the development and sales of our products and limit our ability to grow.

·If we lose the services of our key personnel, our business could be adversely affected.

·We may be adversely affected by the current economic environment or future volatility in global economies.

·Global economic conditions may negatively impact the Company’s financial condition and results of operations.

·Operations outside the United States expose us to uncertain conditions and other risks in international markets.

·Because we operate and sell our products in foreign countries, changes in currency exchange rates could adversely affect our operations and financial results.

·Harm to our reputation or the reputation of one or more of our leading brands could have an adverse effect on our business.

·Acquisitions, new venture investments and divestitures may not be successful.

·Our substantial indebtedness, including the terms of our credit agreement governing the Credit Facilities and the indenture that governs the Senior Notes, restricts our current and future operations and could adversely affect our ability to raise additional capital to fund our operations or to exploit business opportunities, limit our ability to respond to changes in the economy or our industry and prevent us from making debt service payments.

·Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more indebtedness. This could further exacerbate the risks to our financial condition.

·We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

·Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

·Goodwill, intangible and other long lived assets are subject to impairment risk.

·Failure to protect our intellectual property rights could impact our competitiveness, allow our competitors to develop and market products with features similar to our products and demand for our products could decline.

·If we are found to have infringed the intellectual property rights of others or cannot obtain necessary intellectual property rights from others, our competitiveness could be adversely impacted.

·In the ordinary course of business, we may be subject to product liability claims and lawsuits, including potential class actions, alleging that our products have resulted in or could result in unsafe condition or injury.

·We operate under an FTC consent order, which requires certain compliance policies and procedures. Should we violate our requirements thereunder, we may face significant fines and penalties.

·Compliance with environmental law and other government regulations could impose material costs.

·Litigation may adversely affect our business, financial condition and results of operations.

·Changes in tax laws could adversely affect the taxes we pay and our profitability.

·Our judgments regarding the accounting for tax positions and the resolution of tax disputes may impact the Company’s earnings and cash flow.

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·Changes in our effective tax rate may adversely affect our earnings and cash flow.

·A failure of a key information technology system could adversely impact our ability to conduct business.

·Our continued growth and expansion and increasing reliance on third party service providers could adversely affect our internal control over financial reporting, which could harm our business and financial results.

·Identification of a material weakness in internal controls over financial reporting may adversely affect our financial results.

·We may incur increased ongoing costs as a result of being obligated to file reports with the SEC and our management will be required to devote substantial time to new compliance initiatives.

·Compliance with changing regulations and standards for accounting, corporate governance and public disclosure may result in additional expenses and this could negatively impact the Company’s business, financial condition and results of operations.

·The estimates and assumptions on which our financial statements are based may prove to be inaccurate, which may adversely affect the Company’s financial condition and results of operations.

·We can be adversely affected by the implementation of new, or changes in GAAP.

·As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.

Any forward-looking statement made by us in this Quarterly Report speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

As used herein, “Company”, “AAG”, “we”, “us” or “our” and similar terms refer to Armored AutoGroup Inc. and its subsidiaries unless the context in which the term is used indicates otherwise.

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PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

Armored AutoGroup Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

	(unaudited)
	September 30, 2013			December 31, 2012
ASSETS
Current assets:
Cash	$	23,732		$	4,206
Accounts receivable, net	71,816			69,602
Inventories	37,083			42,444
Other current assets	8,865			12,891
Total current assets	141,496			129,143
Property, plant and equipment, net	29,432			31,473
Goodwill	361,736			362,216
Intangible assets, net	322,458			352,905
Deferred financing costs and other assets, net	4,098			5,020
Total assets	$	859,220		$	880,757
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	15,720		$	13,158
Accrued expenses and other current liabilities	31,700			28,571
Due to Clorox	3			137
Due to Parent	745			795
Current portion of long-term debt, less discount	125			279
Total current liabilities	48,293			42,940
Long-term debt, less discount and current portion	553,504			553,581
Other liability	2,500			2,500
Deferred income taxes	92,162			105,131
Total liabilities	696,459			704,152
Commitments and contingencies (Note 4)
Shareholder’s Equity:
Common stock ($0.01 par value, one thousand shares authorized, one thousand shares issued and outstanding at September 30, 2013 and December 31, 2012)	—			—
Additional paid-in capital	260,966			260,750
Accumulated deficit	(93,651		)	(85,585		)
Accumulated other comprehensive (loss) income	(4,554		)	1,440
Total shareholder’s equity	162,761			176,605
Total liabilities and shareholder’s equity	$	859,220		$	880,757

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Armored AutoGroup Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

(In thousands)

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Net sales	$	71,007		$	68,348		$	225,495		$	237,439
Cost of products sold	38,483			39,728			121,307			126,948
Gross profit	32,524			28,620			104,188			110,491
Operating expenses:
Selling and administrative expenses	9,854			10,828			29,202			34,935
Advertising costs	6,767			7,929			24,487			27,414
Research and development costs	626			661			1,839			1,700
Amortization of acquired intangible assets	9,175			9,175			27,526			27,526
Total operating expenses	26,422			28,593			83,054			91,575
Operating profit	6,102			27			21,134			18,916
Non-operating expenses:
Interest expense	12,049			12,406			35,976			36,829
Other (Income) expense, net	(68		)	123			447			166
Loss before benefit for income taxes	(5,879		)	(12,502		)	(15,289		)	(18,079		)
Benefit for income taxes	(3,604		)	(2,729		)	(7,222		)	(5,309		)
Net loss	$	(2,275	)	$	(9,773	)	$	(8,067	)	$	(12,770	)
Other comprehensive income (loss):
Foreign currency translation	2,336			3,985			(5,994		)	4,500
Comprehensive income (loss)	$	61		$	(5,788	)	$	(14,061	)	$	(8,270	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

Armored AutoGroup Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Nine months ended September 30,
	2013			2012
Cash flows from operating activities:
Net loss	$	(8,067	)	$	(12,770	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	35,713			35,089
Share-based compensation	216			199
Deferred income taxes	(12,996		)	(7,614		)
Cash effect of changes, net of effect of acquisition, in:
Accounts receivable, net	(623		)	(28,911		)
Inventories	6,287			(15,146		)
Prepaid taxes	3,329			(3,172		)
Other current assets	499			(2,025		)
Book overdraft	—			(1,987		)
Accounts payable and accrued liabilities	5,079			23,462
Due to Clorox	(134		)	11,913
Other	(771		)	238
Net cash provided by (used in) operating activities	28,532			(724		)
Cash flows from investing activities:
Capital expenditures	(2,894		)	(6,718		)
Acquisition, net	(3,755		)	—
Net cash used in investing activities	(6,649		)	(6,718		)
Cash flows from financing activities:
Borrowings under revolver	23,000			46,001
Payments on revolver	(23,000		)	(33,000		)
Principal payments on term loan	(2,250		)	(2,250		)
Payment on advance from Parent	(50		)	(350		)
Net cash (used in) provided by financing activities	(2,300		)	10,401
Effect of exchange rate changes on cash	(57		)	81
Net increase in cash	19,526			3,040
Cash at beginning of period	4,206			4,935
Cash at end of period	$	23,732		$	7,975
Supplemental cash flow disclosures:
Cash paid for interest	$	26,567		$	27,632
Cash paid for income taxes	$	3,226		$	7,791

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

Armored AutoGroup Inc.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — The Company and Summary of Significant Accounting Policies

The Company

Armored AutoGroup Inc. is a consumer products company consisting primarily of Armor All® and STP®, two of the most recognizable brands in the automotive aftermarket appearance products and performance chemicals categories, respectively. Armored AutoGroup delivers its products to distributors, resellers and end customers (collectively the customers) through its direct operations in the United States, Canada, Mexico, Australia, China and the United Kingdom and distributor relationships in approximately 50 countries. The Armor All and STP brands offer multiple automotive appearance and performance chemicals that can be found in most of the major developed countries around the world.

In September 2010, Viking Acquisition Inc., an entity owned by affiliates of Avista Capital Holdings, L.P. (“Avista”), entered into an agreement to acquire the AutoCare Products Business, Armor All, STP and certain other brands from The Clorox Company (“Clorox”) pursuant to the terms of a Purchase and Sale Agreement dated September 21, 2010 (the “Acquisition”).  The Acquisition closed on November 5, 2010 and included employees in the United States and other countries dedicated to the Company, related product patent and developed technology and certain other assets, including the manufacturing facilities located in Painesville, Ohio and Wales, U.K. Viking Acquisition Inc. was subsequently renamed as Armored AutoGroup Inc. (“AAG”).  Armored AutoGroup Parent Inc. (“AAG Parent” or “Parent”) indirectly owns all of AAG’s issued and outstanding capital stock through its direct subsidiary and AAG’s direct parent, Armored AutoGroup Intermediate Inc. (“Intermediate”).

Basis of Presentation

The unaudited interim condensed consolidated financial statements for the three and nine month periods ended September 30, 2013 and 2012 are unaudited but, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of the Company for the periods presented. The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ materially from the estimates and assumptions made. Further, the results for the interim period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013, or for any future period.

The Company’s business is moderately seasonal and can be impacted by weather. Sales are typically higher in the first half of the calendar year as the Company’s customers in the northern hemisphere purchase stock for the spring and summer seasons when weather is warmer than in the fall and winter months.  This pattern is largely reflective of our customers’ seasonal purchasing patterns, as well as the timing of our promotional activities. Weather can also influence consumer behavior, especially for appearance products. Our appearance products sell best during warm, dry weather, and less if weather is cold and wet.  For these reasons, among others, the Company’s results for any quarter are not necessarily indicative of future quarterly results and, accordingly, period-to-period comparisons should not be relied upon as an indication of future performance.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information in this report should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2012, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies. The consolidated balance sheet at December 31, 2012 has been derived from the Company’s audited financial statements at that date, but does not include all of the financial information or disclosures required by U.S. GAAP for complete financial statements.

Revenue Recognition

Sales are recognized when title to the product, ownership and risk of loss transfer to the customer, which can be on the date of shipment or the date of receipt by the customer and when all of the following have occurred: a firm sales arrangement exists, pricing is fixed and determinable, and collection is reasonably assured. Revenue includes shipping and handling costs, which generally are included in the list price to the customer. Taxes collected from customers and remitted to

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governmental authorities are not included in sales. A provision for payment discounts and product return allowances is recorded as a reduction of sales in the same period that the revenue is recognized.

The Company routinely commits to trade promotion programs with customers, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons offered through various programs to customers and consumers. Accruals for expected payouts under these programs are included as accrued marketing and promotion in the accrued expenses and other current liabilities line item in the Condensed Consolidated Balance Sheets and are recorded as a reduction of sales in the Condensed Statements of Comprehensive (Loss) Income.

Amounts received by the Company from the licensing of certain trademarks are recorded as deferred revenue in the Condensed Consolidated Balance Sheets and are recognized as revenue on a straight-line basis over the term of the licensing agreement when the underlying royalties are earned.

Cost of Products Sold

Cost of products sold is primarily comprised of direct materials and supplies consumed in the manufacturing of product, as well as manufacturing labor, depreciation expense, direct overhead expense necessary to acquire and convert the purchased materials and supplies into finished product, contract manufacturing costs, and provisions for inventory losses (including losses relating to excess and obsolete inventory). Cost of products sold also includes the cost to distribute products to customers, inbound freight costs, internal transfer costs, warehousing costs and other shipping and handling activity as well as costs associated with developing and designing new packaging.

Income Taxes

The Company uses the asset and liability method to account for income taxes. For purposes of the unaudited interim condensed consolidated financial statements, the Company calculates tax with reference to the anticipated effective tax rate for the annual financial period. Deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to the differences between the financial statement amounts and their respective tax bases. Management reviews the Company’s deferred tax assets to determine whether their value can be realized based upon available evidence. A valuation allowance is established when management believes that it is more likely than not that some portion or all of its deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the Company’s tax provision in the period of change. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by accounting guidance on the accounting for uncertainty in income taxes. Amounts for uncertain tax positions are adjusted when new information becomes available or when positions are effectively settled.

Foreign Currency Translation

Local currencies are the functional currencies for substantially all of the Company’s foreign operations. When the transactional currency is different than the functional currency, transaction gains and losses are included as a component of other (income) expense, net.  Assets and liabilities of foreign operations are translated into U.S. dollars using the exchange rates in effect at the respective balance sheet reporting date. Income and expenses are translated at the average exchange rate during the period. Gains and losses on foreign currency translation are reported as a component of accumulated other comprehensive (loss) income. Deferred taxes are not provided on cumulative translation adjustments where the Company expects earnings of a foreign subsidiary to be indefinitely reinvested.

Goodwill and Intangible Assets

The Company tests its goodwill and trademark and brand intangible assets with indefinite lives annually as of October 1st unless there are indications during an interim period that these assets may have become impaired.  Goodwill impairment occurs when the carrying amount of one of the Company’s reporting unit’s goodwill exceeds its implied fair value. The Company would then record an impairment charge being the difference between the carrying amount and the implied fair value of the reporting unit’s goodwill. For trademarks and brand intangible assets with indefinite lives, impairment occurs when the carrying amount of an asset is greater than its estimated fair value and an impairment charge is recorded for the difference between the carrying amount and the fair value. The Company’s estimates of fair value are based primarily on a discounted cash flow approach as supplemented by a market based approach. Significant judgment is necessary in the preparation of assumptions and estimates inherent in such valuation approaches, particularly with respect to the determination of future volumes, revenue and expense growth rates, changes in working capital use, foreign-exchange rates, inflation, the selection of an appropriate discount rate and the calculation of an average earnings before interest, tax,

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depreciation and amortization (“EBITDA”) multiple of a selected public-company peer group. In particular, the discount rates the Company utilizes in these analyses, as well as expectations for future cash flows, may be influenced by such factors as changes in interest rates, rates of inflation and changes in regional risk.  During the three months ended September 30, 2013, goodwill increased by $1.9 million related to the preliminary allocation of purchase price for an acquisition made in Europe.

Property, Plant & Equipment and Finite-Lived Intangible Assets

Property, plant and equipment and finite-lived intangible assets are stated at cost less accumulated depreciation and amortization. The Company calculates depreciation and amortization expenses by the straight-line method using estimated useful lives of the related assets. The Company reviews property, plant and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset or asset group may not be recoverable. The Company’s impairment review is based on an estimate of the undiscounted cash flows at the lowest level for which identifiable cash flows exist and impairment occurs when the book value of the asset group exceeds the estimated future undiscounted cash flows generated by the asset group. When impairment is indicated, a charge is recorded for the difference between the book value of the asset group and its fair value. Depending on the asset or asset group, estimated fair value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in a similar condition.

Recent Accounting Pronouncements

In July 2013 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward exists (ASU 2013-11). The ASU requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with an exception in certain circumstances where an unrecognized tax benefit, or portion thereof, is to be presented in the financial statements as a liability.  ASU 2013-11 is effective for the Company January 1, 2014 for fiscal year 2014 and interim periods therein. The guidance in ASU 2013-11 is to be applied prospectively to all unrecognized tax benefits that exist at January 1, 2014. Adoption of ASU 2013-11 is not expected to have a material impact on the Company.

In February 2013 the FASB issued Accounting Standards Update (ASU) No. 2013-04—Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (ASU 2013-04). The ASU requires reporting and disclosure about obligations resulting from joint and several liability arrangements within its scope for which the total amount of the obligation is fixed at the reporting date. For the Company, ASU 2013-04 is effective January 1, 2014 for fiscal year 2014 and interim periods therein. The guidance in ASU 2013-04 is to be applied retrospectively for those obligations resulting from joint and several liability arrangements within its scope that exist at January 1, 2014. Adoption of ASU 2013-04 is not expected to have a material impact on the Company.

The Company adopted the following pronouncements effective January 1, 2013:

In February 2013, the FASB issued ASU 2013-02—Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (ASU 2013-02).  Substantially all of the information that this update requires already is required to be disclosed elsewhere in financial statements under U.S. GAAP. However, the new requirement to present information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income will present, in one place, information about significant amounts reclassified and, in some cases, cross-references to related footnote disclosures.

During July 2012, the FASB issued ASU 2012-02 Intangibles—Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02) which was intended to reduce the cost and complexity of performing an impairment test for indefinite-lived intangible assets by simplifying how the Company tests those assets for impairment and to improve consistency in impairment testing guidance among long lived asset categories. Under ASU 2012-02, the Company has the option first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The Company also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. The Company will be able to resume performing the qualitative assessment in any subsequent period.

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In December 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”) to amend the requirement for an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. Adoption of 2011-11 did not have an impact on the Company.

Note 2 — Inventories

Inventories consisted of the following (in thousands):

	September 30, 2013			December 31, 2012
Finished goods	$	30,225		$	33,386
Raw materials and packaging	9,118			11,087
Allowances for obsolescence	(2,260		)	(2,029		)
	$	37,083		$	42,444

Note 3 - Fair Value Measurement of Assets and Liabilities

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value which is intended to increase consistency and comparability and related disclosures. An asset or liability’s classification is based on the lowest level of input that is significant to the fair value measurement and is disclosed in one of the following three categories: Level 1 — Quoted market prices in active markets for identical assets or liabilities; Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data; Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions.

The carrying and fair values of the Company’s financial assets and liabilities were as follows (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term loan	$	286,324	$	285,186	$	287,390	$	281,138
Senior notes	267,305		249,728		266,470		233,063

The fair value of the Term Loan and the Senior Notes was determined using broker quotes, which use discounted cash flows, an income approach, and the then-applicable forward LIBOR rates and, therefore, meets the definition of Level 2 fair value, as defined above.

Note 4 — Commitments and Contingencies

Litigation and Other Legal Matters

In connection with the Acquisition, Clorox retained liability associated with a potential contract claim and the Company agreed to indemnify and reimburse Clorox for 50% of the first $5,000,000 in settlement costs related to the contract claim. As of September 30, 2013 and December 31, 2012, the Company has accrued $2,500,000 in long-term liabilities related to this contingency.

The Company is subject to various lawsuits and claims relating to issues such as contract disputes, product liability, patents and trademarks, advertising, employee and other matters. Although the results of claims and litigation cannot be predicted with certainty, it is the opinion of management that the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, individually or in the aggregate, on the Company’s financial statements taken as a whole.

12

Note 5 — Income taxes

The Company’s effective tax benefit rate was as follows:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Effective tax benefit rate	61.3	%	21.8	%	47.2	%	29.4	%

The Company’s effective tax benefit rate for the three and nine month periods ended September 30, 2013 differ from the statutory tax rate primarily due to U.S. federal manufacturing benefits recognized and state taxes, which both increase the benefit rate. Further, the Company’s effective tax benefit rate has increased for the three and nine month periods ended September 30, 2013 as compared to the corresponding periods in 2012 primarily as a result of a discrete tax benefit of $1.4 million recorded during the three month period ending September 30, 2013 related to a decrease in the state effective rate at which the Company tax effects its deferred tax items, based on updated apportionment factors.

Note 6 — Segment Data

The Company manages its business through two geographic segments: North America and International.

·North America—consists of auto-care products marketed and sold in the United States and Canada. Products within this segment include auto-care products primarily under the Armor All® and STP® brands.

·International—consists of products sold outside North America, including Australia, Europe and other international locations. Products within this segment include auto-care products primarily under the Armor All® and STP® brands.

The Company does not allocate its amortization of intangible assets or interest expense between its North America and International segments but includes them in the tables below under Corporate in order to reconcile the North America and International segments’ performance to the Company’s Condensed Consolidated Statements of Comprehensive (Loss) Income. All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales.

The following summarizes the financial performance of the Company’s operating segments (in thousands):

	Three Months Ended September 30, 2013
	North America		International		Corporate			Consolidated
Net sales	$	50,886	$	20,121	$	—		$	71,007
Earnings (loss) before income taxes	11,421		3,924		(21,224		)	(5,879		)
Capital expenditures	1,049		95		—			1,144
Depreciation of property, plant and equipment and amortization of intangible assets	1,556		127		9,175			10,858
Share based compensation	68		6		—			74

	Three Months Ended September 30, 2012
	North America		International		Corporate			Consolidated
Net sales	$	50,295	$	18,053	$	—		$	68,348
Earnings (loss) before income taxes	6,664		2,415		(21,581		)	(12,502		)
Capital expenditures	1,109		446		—			1,556
Depreciation of property plant and equipment and amortization of intangible assets	1,578		101		9,175			11,876
Share based compensation	65		3		—			68

	Nine Months Ended September 30, 2013
	North America		International		Corporate			Consolidated
Net sales	$	169,505	$	55,990	$	—		$	225,495
Earnings (loss) before income taxes	41,724		6,489		(63,502		)	(15,289		)
Capital expenditures	2,652		242		—			2,894
Depreciation of property, plant and equipment and amortization of intangible assets	4,577		404		27,525			32,506
Share based compensation	198		18		—			216

13

	Nine Months Ended September 30, 2012
	North America		International		Corporate			Consolidated
Net sales	$	183,434	$	54,005	$	—		$	237,439
Earnings (loss) before income taxes	39,708		6,568		(64,355		)	(18,079		)
Capital expenditures	6,131		586		—			6,718
Depreciation of property plant and equipment and amortization of intangible assets	4,130		422		27,526			38,089
Share based compensation	191		8		—			199

Note 7 — Financial Information for the Company and Its Subsidiaries

The Company’s payment obligations under the Senior Notes are guaranteed, jointly and severally, by all of the Company’s wholly owned domestic subsidiaries that guarantee the obligations of the Company under the Credit Facility. These guarantees are full and unconditional, subject, in the case of the subsidiary guarantors, to customary release provisions. The Company conducts substantially all of its business through its subsidiaries. In servicing payments to be made on the Senior Notes and other indebtedness, and to satisfy other liquidity requirements, the Company will rely, in large part, on cash flows from these subsidiaries, mainly in the form of dividends, royalties and advances or payments on account of intercompany loan arrangements. The ability of these subsidiaries to make dividend payments to the Company will be affected by, among other factors, the obligations of these entities to their creditors, requirements of corporate and other law, and restrictions contained in agreements entered into by or relating to these entities.

The following supplemental condensed consolidating financial information sets forth balance sheets, statements of comprehensive (loss) income and statements of cash flows for the Company, the guarantor subsidiaries, the non-guarantor subsidiaries and elimination entries necessary to consolidate the Company and its subsidiaries. This information is presented in lieu of separate financial statements and other related disclosures pursuant to Regulation S-X Rule 3-10 of the Securities Exchange Act of 1934, as amended, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”

The operating and investing activities of the separate legal entities are fully interdependent and integrated. Accordingly, the results of the separate legal entities are not representative of what the operating results would be on a standalone basis.

14

Condensed Consolidating Balance Sheet

September 30, 2013

	Issuer		Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	17,221	$	—		$	6,511		$	—		$	23,732
Accounts receivable, net	72		51,998			19,746			—			71,816
Inventories	—		25,561			11,522			—			37,083
Other current assets	52,803		(46,132		)	2,194			—			8,865
Total current assets	70,096		31,427			39,973			—			141,496
Property, plant and equipment, net	8,333		18,148			2,951			—			29,432
Goodwill	—		310,576			51,160			—			361,736
Intangible assets, net	—		284,006			39,198			(746		)	322,458
Investment in subsidiaries	659,513		121,609			—			(781,122		)	—
Deferred financing costs and other assets, net	4,011		87			—			—			4,098
Total assets	$	741,953	$	765,853		$	133,282		$	(781,868	)	$	859,220
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	754	$	10,379		$	4,587		$	—		$	15,720
Accrued expenses and other current liabilities	15,698		9,146			6,856			—			31,700
Due to Clorox	—		23			(20		)	—			3
Due to Parent	745		—			—			—			745
Revolving credit loan	—		—			—			—			—
Current portion of long-term debt, less discount	125		—			—			—			125
Total current liabilities	17,322		19,548			11,423			—			48,293
Long-term debt, less discount and current portion	553,504		—			—			—			553,504
Other liability	2,500		—			—			—			2,500
Deferred income taxes	5,120		86,792			250			—			92,162
Total liabilities	578,446		106,340			11,673			—			696,459
Shareholder’s equity	163,507		659,513			121,609			(781,868		)	162,761
Total liabilities and shareholder’s equity	$	741,953	$	765,853		$	133,282		$	(781,868	)	$	859,220

15

Condensed Consolidating Balance Sheet

December 31, 2012

	Issuer		Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	1,477	$	—		$	2,729	$	—		$	4,206
Accounts receivable, net	105		49,635			19,862		—			69,602
Inventories	—		31,718			10,726		—			42,444
Other current assets	50,116		(38,357		)	1,132		—			12,891
Total current assets	51,698		42,996			34,449		—			129,143
Property, plant and equipment, net	8,682		19,397			3,394		—			31,473
Goodwill	—		310,577			51,639		—			362,216
Intangible assets, net	—		307,401			45,887		(383		)	352,905
Investment in subsidiaries	687,226		122,893			—		(810,119		)	—
Deferred financing costs and other assets, net	4,943		77			—		—			5,020
Total assets	$	752,549	$	803,341		$	135,369	$	(810,502	)	$	880,757
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	888	$	8,868		$	3,402	$	—		$	13,158
Accrued expenses and other current liabilities	12,397		7,215			8,959		—			28,571
Due to Clorox	—		22			115		—			137
Due to Parent	795		—			—		—			795
Current portion of long-term debt, less discount	279		—			—		—			279
Total current liabilities	14,359		16,105			12,476		—			42,940
Long-term debt, less discount and current portion	553,581		—			—		—			553,581
Other liability	2,500		—			—		—			2,500
Deferred income taxes	5,121		100,010			—		—			105,131
Total liabilities	575,561		116,115			12,476		—			704,152
Shareholder’s equity	176,988		687,226			122,893		(810,502		)	176,605
Total liabilities and shareholder’s equity	$	752,549	$	803,341		$	135,369	$	(810,502	)	$	880,757

16

Condensed Consolidating Statement of Comprehensive Loss

Three months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	57,639		$	19,164		$	(5,796	)	$	71,007
Cost of products sold	—			28,534			15,745			(5,796		)	38,483
Gross profit	—			29,105			3,419			—			32,524
Operating expenses:
Selling and administrative expenses	4,532			2,916			2,406			—			9,854
Advertising costs	—			5,396			1,371			—			6,767
Research and development costs	—			625			1			—			626
Amortization of acquired intangible assets	—			7,545			1,630			—			9,175
Total operating expenses	4,532			16,482			5,408			—			26,422
Operating (loss) profit	(4,532		)	12,623			(1,989		)	—			6,102
Non-operating expenses:
Interest expense	12,044			—			5			—			12,049
Other expense, net	3			1			(72		)	—			(68		)
(Loss) earnings before (benefit) provision for income taxes	(16,579		)	12,622			(1,922		)	—			(5,879		)
(Benefit) provision for income taxes	(5,360		)	1,255			501			—			(3,604		)
Equity earnings (loss) of subsidiaries, net of taxes	8,944			(2,423		)	—			(6,521		)	—
Net (loss) earnings	$	(2,275	)	$	8,944		$	(2,423	)	$	(6,521	)	$	(2,275	)
Other comprehensive loss:
Foreign currency translation	2,336			2,336			2,336			(4,672		)	2,336
Comprehensive loss	$	61		$	11,280		$	(87	)	$	(11,193	)	$	61

17

Condensed Consolidating Statement of Comprehensive (Loss) Income

Three months ended September 30, 2012

						Combined
				Combined		Non-
				Guarantor		Guarantor
	Issuer			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	56,507	$	19,168	$	(7,327	)	$	68,348
Cost of products sold	—			34,193		12,862		(7,327		)	39,728
Gross profit	—			22,314		6,306		—			28,620
Operating expenses:
Selling and administrative expenses	5,679			2,377		2,772		—			10,828
Advertising costs	—			6,216		1,713		—			7,929
Research and development costs	—			661		—		—			661
Amortization of acquired intangible assets	—			7,547		1,628		—			9,175
Total operating expenses	5,679			16,801		6,113		—			28,593
Operating (loss) profit	(5,679		)	5,513		193		—			27
Non-operating expenses:
Interest expense	12,406			—		—		—			12,406
Other expense, net	—			28		95		—			123
(Loss) earnings before income taxes	(18,085		)	5,485		98		—			(12,502		)
(Benefit) provision for income taxes	(7,918		)	5,189		—		—			(2,729		)
Equity earnings of subsidiaries, net of taxes	394			98		—		(492		)	—
Net (loss) earnings	$	(9,773	)	$	394	$	98	$	(492	)	$	(9,773	)
Other comprehensive (loss) income:
Foreign currency translation	3,985			3,985		3,985		(7,970		)	3,985
Comprehensive (loss) income	$	(5,788	)	$	4,379	$	4,083	$	(8,462	)	$	(5,788	)

18

Condensed Consolidating Statement of Comprehensive (Loss) Income

Nine months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	185,441		$	57,342		$	(17,288	)	$	225,495
Cost of products sold	—			97,799			40,796			(17,288		)	121,307
Gross profit	—			87,642			16,546			—			104,188
Operating expenses:
Selling and administrative expenses	13,020			8,662			7,520			—			29,202
Advertising costs	—			19,310			5,177			—			24,487
Research and development costs	—			1,828			11			—			1,839
Amortization of acquired intangible assets	—			22,636			4,890			—			27,526
Total operating expenses	13,020			52,436			17,598			—			83,054
Operating (loss) profit	(13,020		)	35,206			(1,052		)	—			21,134
Non-operating expenses (income):
Interest expense	35,968			—			8			—			35,976
Other expense, net	119			7			321			—			447
(Loss) earnings before (benefit) provision for income taxes	(49,107		)	35,199			(1,381		)	—			(15,289		)
(Benefit) provision for income taxes	(17,634		)	9,905			507			—			(7,222		)
Equity earnings (loss) of subsidiaries, net of taxes	23,406			(1,888		)	—			(21,518		)	—
Net (loss) earnings	$	(8,067	)	$	23,406		$	(1,888	)	$	(21,518	)	$	(8,067	)
Other comprehensive (loss) income:
Foreign currency translation	(5,994		)	(5,994		)	(5,994		)	11,988			(5,994		)
Comprehensive (loss) income	$	(14,061	)	$	17,412		$	(7,882	)	$	(9,530	)	$	(14,061	)

19

Condensed Consolidating Statement of Comprehensive (Loss) Income

Nine months ended September 30, 2012

						Combined
				Combined		Non-
				Guarantor		Guarantor
	Issuer			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	154		$	200,893	$	60,584		$	(24,192	)	$	237,439
Cost of products sold	—			109,187		41,953			(24,192		)	126,948
Gross profit	154			91,706		18,631			—			110,491
Operating expenses:
Selling and administrative expenses	17,378			9,950		7,607			—			34,935
Advertising costs	—			21,842		5,572			—			27,414
Research and development costs	—			1,700		—			—			1,700
Amortization of acquired intangible assets	—			22,637		4,889			—			27,526
Total operating expenses	17,378			56,129		18,068			—			91,575
Operating (loss) profit	(17,224		)	35,577		563			—			18,916
Non-operating expenses:
Interest expense	36,829			—		—			—			36,829
Other expense, net	—			30		136			—			166
(Loss) earnings before income taxes	(54,053		)	35,547		427			—			(18,079		)
(Benefit) provision for income taxes	(23,665		)	18,401		(45		)	—			(5,309		)
Equity earnings of subsidiaries, net of taxes	17,618			472		—			(18,090		)	—
Net (loss) earnings	$	(12,770	)	$	17,618	$	472		$	(18,090	)	$	(12,770	)
Other comprehensive income (loss):
Foreign currency translation	4,500			4,500		4,500			(9,000		)	4,500
Comprehensive (loss) income	$	(8,270	)	$	22,118	$	4,972		$	(27,090	)	$	(8,270	)

20

Condensed Consolidating Statement of Cash Flows

Nine months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) earnings	$	(8,067	)	$	23,406		$	(1,888	)	$	(21,518	)	$	(8,067	)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	4,556			25,553			5,604			—			35,713
Share-based compensation	216			—			—			—			216
Deferred income taxes	—			(13,225		)	229			—			(12,996		)
Equity earnings of subsidiaries, net of taxes	(23,406		)	1,888			—			21,518			—
Cash effect of changes in:
Accounts receivable, net	33			(2,363		)	1,707			—			(623		)
Inventories	—			6,157			130			—			6,287
Prepaid taxes	3,329			—			—			—			3,329
Other current assets	(6,062		)	7,771			(1,210		)	—			499
Accounts payable and accrued liabilities	3,168			3,442			(1,531		)	—			5,079
Due Clorox	—			—			(134		)	—			(134		)
Intercompany and other	45,277			(50,960		)	4,912			—			(771		)
Net cash provided by operating activities:	19,044			1,669			7,819			—			28,532
Cash flows from investing activities:
Capital expenditures	(1,000		)	(1,669		)	(225		)	—			(2,894		)
Acquisition, net	—			—			(3,755		)	—			(3,755		)
Net cash used in investing activities	(1,000		)	(1,669		)	(3,980		)	—			(6,649		)
Cash flows from financing activities:
Borrowings under revolver	23,000			—			—			—			23,000
Payments on revolver	(23,000		)	—			—			—			(23,000		)
Principal payments on term loan	(2,250		)	—			—			—			(2,250		)
Payment of advance from Parent	(50		)	—			—			—			(50		)
Net cash used in by financing activities	(2,300		)	—			—			—			(2,300		)
Effect of exchange rate changes on cash	—			—			(57		)	—			(57		)
Net increase in cash	15,744			—			3,782			—			19,526
Cash at beginning of period	1,477			—			2,729			—			4,206
Cash at end of period	$	17,221		$	—		$	6,511		$	—		$	23,732

21

Condensed Consolidating Statement of Cash Flows
Nine months ended September 30, 2012

							Combined
				Combined			Non-
				Guarantor			Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) earnings	$	(12,770	)	$	17,618		$	472		$	(18,090	)	$	(12,770	)
Adjustments:
Depreciation and amortization	4,521			29,502			1,066			—			35,089
Share-based compensation	199			—			—			—			199
Deferred income taxes	(2,533		)	(6,456		)	1,375			—			(7,614		)
Equity earnings of subsidiaries, net of taxes	(17,618		)	(472		)	—			18,090			—
Cash effect of changes in:
Accounts receivable	699			(22,124		)	(7,486		)	—			(28,911		)
Inventories	—			(10,583		)	(4,563		)	—			(15,146		)
Prepaid taxes	(26,990		)	23,713			105			—			(3,172		)
Other current assets	(417		)	(481		)	(1,127		)	—			(2,025		)
Book overdraft	(1,987		)	—			—			—			(1,987		)
Accounts payable and accrued liabilities	4,561			11,102			7,799			—			23,462
Due from Clorox	(129		)	11,260			782			—			11,913
Intercompany and other	49,254			(44,987		)	(3,627		)	(402		)	238
Net cash (used in) provided by operating activities	(3,210		)	8,092			(5,204		)	(402		)	(724		)
Cash flows from investing activities:
Capital expenditures	(3,110		)	(3,334		)	(274		)	—			(6,718		)
Net cash used in investing activities	(3,110		)	(3,334		)	(274		)	—			(6,718		)
Cash flows from financing activities:
Borrowings under revolver	46,001			—			—			—			46,001
Payments on revolver	(33,000		)	—			—			—			(33,000		)
Principal payments on term loan	(2,250		)	—			—			—			(2,250		)
Payments on advance from Parent	(350		)	—			—			—			(350		)
Net cash provided by financing activities	10,401			—			—			—			10,401
Effect of exchange rate on cash	603			(4,758		)	3,834			402			81
Net increase (decrease) in cash	4,684			—			(1,644		)	—			3,040
Cash at beginning of period	—			—			4,935			—			4,935
Cash at end of period	$	4,684		$	—		$	3,291		$	—		$	7,975

22

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with our financial statements and related notes. This discussion and analysis contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of various factors, including the factors we describe under “Cautionary note regarding forward-looking statements,” elsewhere in this Quarterly Report.

Overview

We are a consumer products company consisting primarily of Armor All and STP, two of the most recognizable brands in the automotive aftermarket appearance products and performance chemical products categories, respectively. Armor All’s current product line of protectants, wipes, tire and wheel care products, glass cleaners, leather care products, air fresheners and washes are designed to clean, shine, refresh and protect interior and exterior automobile surfaces. STP’s offering of oil and fuel additives, functional fluids and automotive appearance products has a broad customer base ranging from professional racers to car enthusiasts and “Do-it-Yourselfers.” Our brands offer over 200 individual automotive appearance and performance chemical products that can be found in most of the major developed countries around the world. We have a diversified geographic footprint with direct operations in the United States, Canada, Mexico, Australia, the United Kingdom and China and distributor relationships in approximately 50 countries.

Armor All is the most recognized automotive aftermarket appearance product brand in the United States with a comprehensive and competitively priced product line. Armor All’s advertising campaigns, such as the “Go ahead. Stare,” “Care for your car”,”Armor All Way” and the new “A car is a privilege. Respect it.” build on what we believe to be Armor All’s strong brand equity established over its 50 year history to maintain a high level of consumer awareness. We further believe that Armor All has distinguished itself as the leader in the automotive aftermarket appearance products category based upon its household name, high quality product formulations, convenient application methods and tradition of innovation.

The STP brand has been characterized by a commitment to technology, performance and motor sports partnerships for over 50 years. Regular use of STP additives as part of basic maintenance helps engines run better by boosting the cleaning performance of gas and saving gas by keeping fuel intake systems clean. We believe the STP brand’s fuel and oil additives, functional fluids and automotive appearance products benefit from a rich heritage in the car enthusiast and racing scenes.

Industry trends

The general economic environment has put downward pressure on the appearance and performance chemical products categories now for several years. Reduced disposable income levels for consumers resulted in a weak demand environment for our products.  We believe the factors that contributed to these trends are not representative of the long-term growth prospects for the industry. Meanwhile, we believe there are other trends that foster attractive long-term dynamics. For example, partially due to the general economic environment, according to R.L. Polk & Co., the average age of cars on U.S. roads has increased to greater than ten years. Older cars require more maintenance to keep them operating.

We believe innovation is another important contributor to category growth because new product introductions stimulate consumer interest in the category by fulfilling unmet consumer needs and bringing attention to the appearance and performance chemical products categories. Truly innovative products have a history of driving category growth in appearance and performance chemical products. We continue to introduce  new products and invest in advertising and promotion to elevate engagement of our customers and consumers with our brands.

Competition remains intense in the categories we serve. Established brands continue to invest significant resources in advertising campaigns and with trade partners on promotional activities. While we believe our brands and customer relationships are strong, there is no assurance we will be able to maintain or improve our current competitive position.

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Key performance indicators

Management reviews and analyzes several key performance indicators in order to manage our business and assess the quality of, and potential variability of, our earnings and cash flows. These key performance indicators include:

·Net sales—which is an indicator of our overall business growth;

·Gross profit—is a key factor in the relative strength of our brands as gross profits enable us to generate cash to maintain marketing support, and therefore improve brand health; and

·Operating expenses—outright and as a percentage of net sales which is an indicator of the efficiency of our business and our ability to manage our business to budget.

We believe we are solidifying our leading category share of the automotive aftermarket appearance products and performance chemicals categories with innovation and new products, investment in our established Armor All and STP brands, increased investments in racing sponsorships, and enhanced promotional events and advertising. While our net sales have benefited from these initiatives, there has broadly been a decline in the performance chemicals category of the base business volume and an overall weakening of consumer discretionary spending in the markets within which we compete due to economic uncertainty in generally unfavorable economic conditions. In the event that our top-line growth and bottom-line profitability do not develop as expected, we may have to delay certain business initiatives and adjust our strategy accordingly.

Results of Operations

Three and nine month periods ended September 30, 2013 compared to the corresponding periods in 2012

Financial data for the three and nine months ended September 30, 2013 and 2012 are as follows (in thousands, except percentages):

	Three months ended September 30,											Nine months ended September 30,
	2013			2012			Change			%		2013			2012			Change			%
Net sales	$	71,007		$	68,348		$	2,659		4		$	225,495		$	237,439		$	(11,944	)	(5	)
Cost of products sold	38,483			39,728			(1,245		)	(3	)	121,307			126,948			(5,641		)	(4	)
Gross profit	32,524			28,620			3904			14		104,188			110,491			(6,303		)	(6	)
Operating expenses:
Selling and administrative expenses	9,854			10,828			(974		)	(9	)	29,202			34,935			(5,733		)	(16	)
Advertising costs	6,767			7,929			(1,162		)	(15	)	24,487			27,414			(2,927		)	(11	)
Research and development costs	626			661			(35		)	(5	)	1,839			1,700			139			8
Amortization of acquired intangible assets	9,175			9,175			—			—		27,526			27,526			—			—
Total operating expenses	26,422			28,593			(2,171		)	(8	)	83,054			91,575			(8,521		)	(9	)
Operating profit	6,102			27			6,075			—		21,134			18,916			2,218			12
Non-operating expenses:
Interest expense	12,049			12,406			(357		)	(3	)	35,976			36,829			(853		)	(2	)
Other expense, net	(68		)	123			191			—		447			166			281			—
Loss before benefit for income taxes	(5,879		)	(12,502		)	6,623			(53	)	(15,289		)	(18,079		)	2,790			(15	)
Benefit for income taxes	(3,604		)	(2,729		)	(875		)	32		(7,222		)	(5,309		)	(1,913		)	36
Net loss	$	(2,275	)	$	(9,773	)	$	7,498		(77	)	$	(8,067	)	$	(12,770	)	$	4,703		(37	)

Net sales

Our business is moderately seasonal and can be impacted by weather. Our sales are typically higher in the first half of the calendar year as our customers in the northern hemisphere purchase stock for the spring and summer seasons when weather is warmer than in the fall and winter months.  This pattern is largely reflective of our customers’ seasonal purchasing patterns, as well as the timing of our promotional activities. Weather can also influence consumer behavior, especially for appearance products. Our products sell best during warm, dry weather, and less if weather is cold and wet.

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Net sales for our North America segment include products marketed and sold to customers in the United States and Canada.  Our International segment represents net sales to all other regions outside of the United States and Canada, primarily being Europe, Australia, Latin America and Asia.  The following table summarizes our net sales for the three and nine month periods ended September 30, 2013 and 2012 (in thousands, except percentages):

	Three Months Ended September 30,				Change from Corresponding Period in Prior Year					% of Net Sales
	2013		2012		$			%		2013	2012
Net sales
North America:
Armor All products	$	34,684	$	31,935	$	2,749		9		49	47
STP products	14,350		16,585		(2,235		)	(13	)	20	24
Other brands	1,852		1,775		77			4		3	3
Total North America	50,886		50,295		591			1		72	74
International	20,121		18,053		2,068			11		28	26
Consolidated net sales	$	71,007	$	68,348	$	2,659		4		100	100

	Nine Months Ended September 30,				Change from Corresponding Period in Prior Year					% of Net Sales
	2013		2012		$			%		2013	2012
Net sales
North America:
Armor All products	$	121,529	$	129,549	$	(8,020	)	(6	)	54	54
STP products	42,163		47,272		(5,109		)	(11	)	19	20
Other brands	5,813		6,613		(799		)	(12	)	2	3
Total North America	169,505		183,434		(13,928		)	(8	)	75	77
International	55,990		54,005		1,985			4		25	23
Consolidated net sales	$	225,495	$	237,439	$	(11,943	)	(5	)	100	100

In North America, the increase in net sales during the three months ended September 30, 2013 as compared to the same period in 2012 was driven by the Armor All brand which experienced increases across most products, most noteably in the wipes products.  The STP brand had lower sales during the same period driven by one less promotional event at a key customer.

The decrease in net sales for the nine months ended September 30, 3013 as compared to the same period in 2012 was driven by our Armor All brand which was impacted by the much colder and wetter weather conditions in much of the first half of 2013 in contrast to the much warmer and drier weather conditions in the comparable period of 2012.  Additionally, both brands were impacted by reductions in inventory levels by certain of our customers in the first half of 2013.

International net sales for both the three month and nine month periods ended September 30, 2013 were up  compared to the corresponding period in 2012.  This increase was driven by higher sales in Latin America, Asia and Europe/Middle East while Australia showed lower net sales mainly due to the impact of unfavorable foreign exchange.

Gross profit

Our gross profit for the three and nine months ended September 30, 2013 and 2012 are as follows (in thousands, except percentages):

	Three months ended September 30,									Nine months ended September 30,
	2013			2012			Change		%	2013			2012			Change			%
Gross profit	$	32,524		$	28,620		$	3,904	14	$	104,188		$	110,491		$	(6,303	)	(6	)
Stated as a percentage of net sales	45.8		%	41.9		%				46.2		%	46.5		%

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The  increase in gross profit dollars in the three months ended September 30, 2013 as compared to the same period in 2012 was driven by higher sales volume, lower trade spend and improvement in logistics costs.

For the nine month period, gross profit dollars were lower mainly due to the impact of reduced volume in the first half in 2013 as compared to 2012.  The gross profit as a percentage of net sales was down 0.3% for the nine month period ended September 30, 2013 as compared to the same period in 2012.  This lower rate was primarily due to the lower volume impact of the fixed elements of cost of goods sold in the first half of the year. These unfavorable factors were partially offset by the higher 2012 freight and warehousing costs associated with the transition to a stand-alone company.

Selling and administrative expense, advertising costs, and research and development costs

Our selling and administrative expenses, advertising costs, and research and development costs for the three and nine month periods ended September 30, 2013 and 2012 are as follows (in thousands, except percentages):

	Three months ended September 30,											Nine months ended September 30,
	2013			2012			Change			%		2013			2012			Change			%
Selling and administrative expenses	$	9,854		$	10,828		$	(974	)	(9	)	$	29,202		$	34,935		$	(5,733	)	(16	)
Advertising costs	6,767			7,929			(1,162		)	(15	)	24,487			27,414			(2,927		)	(11	)
Research and development costs	626			661			(35		)	(5	)	1,839			1,700			139			8
	$	17,247		$	19,418		$	(2,171	)	(11	)	$	55,528		$	64,049		$	(8,521	)	(13	)
Stated as a percentage of net sales	24.3		%	28.4		%						24.6		%	27.0		%

The decreases in our selling and administrative expenses in the three and nine month periods ended September 30, 2013 as compared to the corresponding periods in 2012 is primarily due to the elimination of excess costs of $2.8 million and $9.6 million, respectively, incurred in the corresponding periods of 2012 related to the transition to a stand-alone company.  The higher selling and administrative costs , net of these excess cost adjustments, is due to our business reaching its expected selling and administrative cost structure to support the growth initiatives.

The decrease in our advertising costs in the three and nine month periods ended September 30, 2013 as compared to the corresponding periods in 2012 was primarily due to alignment of  advertising spend in North America to correspond with our seasonal and promotional events and lower advertising production costs during the first half of 2013.

Income taxes

Our effective tax benefit rate for the three and nine month periods ended September 30, 2013 and 2012 are as follows:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Effective tax benefit rate	61.3	%	21.8	%	47.2	%	29.4	%

Our effective tax benefit rate for the three and nine month periods ended September 30, 2013 differ from the statutory tax rate primarily due to U.S. federal manufacturing benefits recognized and state taxes, which both increase the benefit rate. Further, the Company’s effective tax benefit rate has increased for the three and nine month periods ended September 30, 2013 as compared to the corresponding periods in 2012 primarily as a result of a discrete tax benefit of $1.4 million recorded during the three month period ending September 30, 2013 related to a decrease in the state effective rate at which the Company tax effects its deferred tax items based on updated apportionment factors.

Evaluation of goodwill, trademarks and brands

Despite a view that the fair value of our North America reporting unit had diminished in light of the year to date results as of June 30, 2013, there were no such indicators during the three months ended September 30, 2013.  Therefore, we

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concluded that it was not more likely than not that the fair values of the North America reporting unit and the trademark and brand intangible assets were below their respective carrying values and, as such, we did not perform interim impairment tests for the three months ended September 30, 2013. Should declines in sales volume or performance persist, further reductions in fair value could result and impairment may be indicated.  During the three months ended September 30, 2013, goodwill increased by $1.9 million related to the preliminary allocation of purchase price for an acquisition made in Europe.

Liquidity and capital resources

Our principal sources of liquidity are our cash of $23.7 million as of September 30, 2013, and our $50.0 million revolving credit loan, the entirety of which, is undrawn and fully available to us as of September 30, 2013. Our principal source of operating cash inflows is from sales of product to customers. Our principal cash outflows relate to the purchase and production of inventory and related costs, advertising, selling and administrative expenses, and capital expenditures. At September 30, 2013, $6.5 million of our cash is held by foreign subsidiaries to fund their working capital needs. To date, net cash generated in operations and borrowed funds under our Revolving Credit Facility have been sufficient to service our debts and other obligations and fund seasonal and other cash flow requirements. We believe that, as of September 30, 2013, cash on hand, cash expected to be generated from future operating activities and cash available under the Revolving Credit Facility will be sufficient to fund our operations, including contractual obligations and capital expenditures for the next 12 months. However, in the event that funds are not available from our operating activities or from the Revolving Credit Facility, we may have to delay certain business initiatives and adjust our strategy accordingly.  As of September 30, 2013, the Company was in compliance with all convenants related to the Credit Facility.

Cash flows

The following table summarizes our cash flows (in thousands):

	Nine Months Ended September 30,
	2013			2012
Net cash provided by (used in) operating activities	$	28,532		$	(724	)
Net cash used in investing activities	(6,649		)	(6,718		)
Net cash (used in) provided by financing activities	(2,300		)	10,401

Operating activities

Significant elements of our $28.5 million net cash provided by operating activities for the nine months ended September 30, 2013 include our net loss of $8.1 million and an increase in net operating assets of $13.6 million and non-cash charges of $23.0 million for depreciation and amortization of our long lived, tangible and intangible assets, deferred financing costs, debt discount amortization and deferred income taxes. Elements of the $0.7  million net cash used in operating activities for the nine months ended September 30, 2012 included our net loss of $12.8 million and a decrease in net operating assets of $15.8 million, offset by non-cash charges of $27.8 million for depreciation and amortization. The increase in our operating assets in 2013 included an increase of $0.6 million in accounts receivable and a increase of $5.1 million in accounts payable and accrued liabilities.

Investing activities

Our cash used in investing activities of $6.6 million for the nine month period ended September 30, 2013 was comprised of $2.9 million of capital expenditures and $3.8 million for an acquisition made in Europe in the quarter.  The nine month period ended September 30, 2012 consisted solely of capital expenditures.  Capital spending declined to 1.3% from 2.8% of net sales in the nine month period ended September 30, 2013 as compared to the corresponding period in 2012 and is largely attributable to our ERP System implementation having been substantially completed in 2012.

Financing activities

Net cash used in financing activities for the nine months ended September 30, 2013 included seasonal net borrowings of zero on our revolving credit loan and $2.3 million of principal payments on our term loan.  Net cash provided in financing activites for the nine months ended September 30, 2012 included seasonal net borrowings of $13.0 million on our revolving credit loan and $2.3 million of principal payments on our term loan.  We have decreased our net borrowing needs on the revolving credit loan as we have reduced our working capital from 2012 levels that were higher following our transition to a stand-alone company.

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Indebtedness

We have a significant amount of indebtedness stemming from the November 5, 2010 Acquisition, including a revolving credit loan and a term Loan under the Credit Facility and Senior Notes. As of September 30, 2013, we have aggregate gross amount of indebtedness of approximately $566.8 million, exclusive of issuance discounts, including a remaining $291.8 million owed on our Term Loan having quarterly principal payments of $750,000 and the remaining principal maturing in November 2016, and $275.0 million in aggregate principal amount of 9.25% Senior Notes due 2018. Our significant indebtedness could affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from making debt service payments. Further, the terms of our credit agreement governing the Credit Facilities and the indenture that governs the Senior Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on our current and future operations, particularly our ability to respond to changes or to take certain actions. Although such encumbrances have not proven unexpectedly burdensome to date, these restrictions may limit our ability to engage in certain financial and operational business activities that may be in our long-term best interest. As of September 30, 2013, the Company was in compliance with all covenants related to the Credit Facility.  For additional details related to our debts, please see Note 8 of the Notes to the Consolidated Financial Statements, “Debt”, contained in the Company’s Annual Report on Form 10-K filed with the SEC (file number 333-180736) incorporated herein by reference.

Commitments and contingencies

For details related to our contractual obligations and other commitments and contingencies, please see (i) Note 4 of the Notes to Condensed Consolidated Financial Statements, “Commitments and Contingencies” included in this Quarterly Report, and (ii) Note 11 of the Notes to the Consolidated Financial Statements for the fiscal year ended December 31, 2012, “Commitments and Contingencies”,  and Management’s Discussion and Analysis of Financial Condition and Results of Operations “Certain Information Concerning Contractual Obligations” included in the Company’s Annual Report on Form 10-K filed with the SEC (file number 333-180736) incorporated herein by reference.

Off-Balance Sheet Arrangements

We currently have no material off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For details about our market risk, please see Item 7A., “Quantitative and Qualitative Disclosures About Market Risk”, included in the Company’s Annual Report on Form 10-K filed with the SEC (file number 333-180736) incorporated herein by reference.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management team, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2013, including controls and procedures to timely alert management to material information relating to the Company and its subsidiaries required to be included in the reports the Company files or submits under the Exchange Act. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our third fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Limitations on the Effectiveness of Controls

Our disclosure controls and procedures provide our Chief Executive Officer and Chief Financial Officer reasonable assurances that our disclosure controls and procedures will achieve their objectives. However, our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting can or will prevent all human error. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are internal resource constraints, and the benefit of controls must be weighed relative to their corresponding costs. Because of the limitations in all control systems, no evaluation of controls can provide complete assurance that all control issues and instances of error, if any, within our Company are detected.

These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur due to human error or mistake. Additionally, controls, no matter how well designed, could be circumvented by the individual acts of specific persons within the organization. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are involved from time to time in various legal proceedings, regulatory investigations and claims incident to the normal conduct of business, which may include proceedings that are specific to us and others generally applicable to business practices within the industries in which we operate. A substantial legal liability or a significant regulatory action against us could have an adverse effect on our business, financial condition and on the results of operations in a particular quarter or year.  As of September 30, 2013, we had no material ongoing litigation, regulatory or other proceedings and had no knowledge of any investigations by governmental or regulatory authorities in which we are a target that could have a material adverse effect on our current business.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed under “Risk Factors” included within Company’s Annual Report on Form 10-K filed with the SEC (file number 333-180736) incorporated herein by reference. The risks described in the Annual Report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. There has been no material changes in our risk factors from those disclosed in the Annual Report referred to above.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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ITEM 6. EXHIBITS

The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q.

EXHIBIT NO.	DESCRIPTION
31.1†	Certificate by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2†	Certificate by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements from Armored AutoGroup’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013, filed with the Securities and Exchange Commission on November 6, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations and Comprehensive Income; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statements of Stockholders’ Equity and (iv) the Notes to Consolidated Financial Statements.

†Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:  November 6, 2013

ARMORED AUTOGROUP INC.

/s/ DAVID P. LUNDSTEDT

David P. Lundstedt

Chairman, President, and Chief Executive Officer

/s/ J. ANDREW BOLT

J. Andrew Bolt

Executive Vice President, Chief Financial Officer, and Principal Accounting Officer

31

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David P. Lundstedt, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (the “Report”);

2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this Report;

3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b)[Paragraph omitted in accordance with SEC transition instructions];

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the periods covered by this Report based on such evaluation; and

(d)Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ DAVID P. LUNDSTEDT

David P. Lundstedt

Chairman, President and Chief Executive Officer

November 6, 2013

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Andrew Bolt, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (the “Report”);

2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this Report;

3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b)[Paragraph omitted in accordance with SEC transition instructions];

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the periods covered by this Report based on such evaluation; and

(d)Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ J. ANDREW BOLT

J. Andrew Bolt

Executive Vice President, Chief Financial Officer and Principal Accounting Officer

November 6, 2013

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David P. Lundstedt, certify that:

1.the accompanying Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Armored AutoGroup Inc. at the dates and for the periods indicated.

A signed original of this written statement required by Section 906 has been provided to Armored AutoGroup Inc. and will be retained by Armored AutoGroup Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The undersigned expressly disclaims any obligation to update the foregoing certification except as required by law.

/s/ DAVID P. LUNDSTEDT

David P. Lundstedt

Chairman, President and Chief Executive Officer

November 6, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Andrew Bolt, certify that:

1.the accompanying Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Armored AutoGroup Inc. at the dates and for the periods indicated.

A signed original of this written statement required by Section 906 has been provided to Armored AutoGroup Inc. and will be retained by Armored AutoGroup Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The undersigned expressly disclaims any obligation to update the foregoing certification except as required by law.

/s/ J. Andrew Bolt

J. Andrew Bolt

Executive Vice President, Chief Financial Officer and Principal Accounting Officer

November 6, 2013

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Segment Data (Tables)

9 Months Ended

Sep. 30, 2013

Segment Data

Summary of the financial performance of the Company's operating segments

The following summarizes the financial performance of the Company’s operating segments (in thousands):

	Three Months Ended September 30, 2013
	North America		International		Corporate			Consolidated
Net sales	$	50,886	$	20,121	$	—		$	71,007
Earnings (loss) before income taxes	11,421		3,924		(21,224		)	(5,879		)
Capital expenditures	1,049		95		—			1,144
Depreciation of property, plant and equipment and amortization of intangible assets	1,556		127		9,175			10,858
Share based compensation	68		6		—			74

	Three Months Ended September 30, 2012
	North America		International		Corporate			Consolidated
Net sales	$	50,295	$	18,053	$	—		$	68,348
Earnings (loss) before income taxes	6,664		2,415		(21,581		)	(12,502		)
Capital expenditures	1,109		446		—			1,556
Depreciation of property plant and equipment and amortization of intangible assets	1,578		101		9,175			11,876
Share based compensation	65		3		—			68

	Nine Months Ended September 30, 2013
	North America		International		Corporate			Consolidated
Net sales	$	169,505	$	55,990	$	—		$	225,495
Earnings (loss) before income taxes	41,724		6,489		(63,502		)	(15,289		)
Capital expenditures	2,652		242		—			2,894
Depreciation of property, plant and equipment and amortization of intangible assets	4,577		404		27,525			32,506
Share based compensation	198		18		—			216

	Nine Months Ended September 30, 2012
	North America		International		Corporate			Consolidated
Net sales	$	183,434	$	54,005	$	—		$	237,439
Earnings (loss) before income taxes	39,708		6,568		(64,355		)	(18,079		)
Capital expenditures	6,131		586		—			6,718
Depreciation of property plant and equipment and amortization of intangible assets	4,130		422		27,526			38,089
Share based compensation	191		8		—			199

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Net sales	$ 71,007	$ 68,348	$ 225,495	$ 237,439
Cost of products sold	38,483	39,728	121,307	126,948
Gross profit	32,524	28,620	104,188	110,491
Operating expenses:
Selling and administrative expenses	9,854	10,828	29,202	34,935
Advertising costs	6,767	7,929	24,487	27,414
Research and development costs	626	661	1,839	1,700
Amortization of acquired intangible assets	9,175	9,175	27,526	27,526
Total operating expenses	26,422	28,593	83,054	91,575
Operating profit	6,102	27	21,134	18,916
Non-operating expenses:
Interest expense	12,049	12,406	35,976	36,829
Other (Income) expense, net	(68)	123	447	166
Loss before benefit for income taxes	(5,879)	(12,502)	(15,289)	(18,079)
Benefit for income taxes	(3,604)	(2,729)	(7,222)	(5,309)
Net loss	(2,275)	(9,773)	(8,067)	(12,770)
Other comprehensive income (loss):
Foreign currency translation	2,336	3,985	(5,994)	4,500
Comprehensive income (loss)	$ 61	$ (5,788)	$ (14,061)	$ (8,270)

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Income taxes

9 Months Ended

Sep. 30, 2013

Income taxes

Income taxes

Note 5 — Income taxes

The Company’s effective tax benefit rate was as follows:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Effective tax benefit rate	61.3	%	21.8	%	47.2	%	29.4	%

The Company’s effective tax benefit rate for the three and nine month periods ended September 30, 2013 differ from the statutory tax rate primarily due to U.S. federal manufacturing benefits recognized and state taxes, which both increase the benefit rate. Further, the Company’s effective tax benefit rate has increased for the three and nine month periods ended September 30, 2013 as compared to the corresponding periods in 2012 primarily as a result of a discrete tax benefit of $1.4 million recorded during the three month period ending September 30, 2013 related to a decrease in the state effective rate at which the Company tax effects its deferred tax items, based on updated apportionment factors.

XML

Segment Data (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 item	Sep. 30, 2012
Segment Data
Number of geographic segments			2
Segment Data
Net sales	$ 71,007	$ 68,348	$ 225,495	$ 237,439
Earnings (loss) before income taxes	(5,879)	(12,502)	(15,289)	(18,079)
Capital expenditures	1,144	1,556	2,894	6,718
Depreciation of property, plant and equipment and amortization of intangible assets	10,858	11,876	32,506	38,089
Share based compensation	74	68	216	199
Operating segment | North America
Segment Data
Net sales	50,886	50,295	169,505	183,434
Earnings (loss) before income taxes	11,421	6,664	41,724	39,708
Capital expenditures	1,049	1,109	2,652	6,131
Depreciation of property, plant and equipment and amortization of intangible assets	1,556	1,578	4,577	4,130
Share based compensation	68	65	198	191
Operating segment | International
Segment Data
Net sales	20,121	18,053	55,990	54,005
Earnings (loss) before income taxes	3,924	2,415	6,489	6,568
Capital expenditures	95	446	242	586
Depreciation of property, plant and equipment and amortization of intangible assets	127	101	404	422
Share based compensation	6	3	18	8
Corporate
Segment Data
Earnings (loss) before income taxes	(21,224)	(21,581)	(63,502)	(64,355)
Depreciation of property, plant and equipment and amortization of intangible assets	$ 9,175	$ 9,175	$ 27,525	$ 27,526

XML

Financial Information for the Company and Its Subsidiaries (Tables)

9 Months Ended

Sep. 30, 2013

Financial Information for the Company and Its Subsidiaries

Schedule of Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet

September 30, 2013

	Issuer		Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	17,221	$	—		$	6,511		$	—		$	23,732
Accounts receivable, net	72		51,998			19,746			—			71,816
Inventories	—		25,561			11,522			—			37,083
Other current assets	52,803		(46,132		)	2,194			—			8,865
Total current assets	70,096		31,427			39,973			—			141,496
Property, plant and equipment, net	8,333		18,148			2,951			—			29,432
Goodwill	—		310,576			51,160			—			361,736
Intangible assets, net	—		284,006			39,198			(746		)	322,458
Investment in subsidiaries	659,513		121,609			—			(781,122		)	—
Deferred financing costs and other assets, net	4,011		87			—			—			4,098
Total assets	$	741,953	$	765,853		$	133,282		$	(781,868	)	$	859,220
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	754	$	10,379		$	4,587		$	—		$	15,720
Accrued expenses and other current liabilities	15,698		9,146			6,856			—			31,700
Due to Clorox	—		23			(20		)	—			3
Due to Parent	745		—			—			—			745
Revolving credit loan	—		—			—			—			—
Current portion of long-term debt, less discount	125		—			—			—			125
Total current liabilities	17,322		19,548			11,423			—			48,293
Long-term debt, less discount and current portion	553,504		—			—			—			553,504
Other liability	2,500		—			—			—			2,500
Deferred income taxes	5,120		86,792			250			—			92,162
Total liabilities	578,446		106,340			11,673			—			696,459
Shareholder’s equity	163,507		659,513			121,609			(781,868		)	162,761
Total liabilities and shareholder’s equity	$	741,953	$	765,853		$	133,282		$	(781,868	)	$	859,220

Condensed Consolidating Balance Sheet

December 31, 2012

	Issuer		Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	1,477	$	—		$	2,729	$	—		$	4,206
Accounts receivable, net	105		49,635			19,862		—			69,602
Inventories	—		31,718			10,726		—			42,444
Other current assets	50,116		(38,357		)	1,132		—			12,891
Total current assets	51,698		42,996			34,449		—			129,143
Property, plant and equipment, net	8,682		19,397			3,394		—			31,473
Goodwill	—		310,577			51,639		—			362,216
Intangible assets, net	—		307,401			45,887		(383		)	352,905
Investment in subsidiaries	687,226		122,893			—		(810,119		)	—
Deferred financing costs and other assets, net	4,943		77			—		—			5,020
Total assets	$	752,549	$	803,341		$	135,369	$	(810,502	)	$	880,757
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	888	$	8,868		$	3,402	$	—		$	13,158
Accrued expenses and other current liabilities	12,397		7,215			8,959		—			28,571
Due to Clorox	—		22			115		—			137
Due to Parent	795		—			—		—			795
Current portion of long-term debt, less discount	279		—			—		—			279
Total current liabilities	14,359		16,105			12,476		—			42,940
Long-term debt, less discount and current portion	553,581		—			—		—			553,581
Other liability	2,500		—			—		—			2,500
Deferred income taxes	5,121		100,010			—		—			105,131
Total liabilities	575,561		116,115			12,476		—			704,152
Shareholder’s equity	176,988		687,226			122,893		(810,502		)	176,605
Total liabilities and shareholder’s equity	$	752,549	$	803,341		$	135,369	$	(810,502	)	$	880,757

Schedule of Condensed Consolidating Statement of Comprehensive (Loss) Income

Condensed Consolidating Statement of Comprehensive Loss

Three months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	57,639		$	19,164		$	(5,796	)	$	71,007
Cost of products sold	—			28,534			15,745			(5,796		)	38,483
Gross profit	—			29,105			3,419			—			32,524
Operating expenses:
Selling and administrative expenses	4,532			2,916			2,406			—			9,854
Advertising costs	—			5,396			1,371			—			6,767
Research and development costs	—			625			1			—			626
Amortization of acquired intangible assets	—			7,545			1,630			—			9,175
Total operating expenses	4,532			16,482			5,408			—			26,422
Operating (loss) profit	(4,532		)	12,623			(1,989		)	—			6,102
Non-operating expenses:
Interest expense	12,044			—			5			—			12,049
Other expense, net	3			1			(72		)	—			(68		)
(Loss) earnings before (benefit) provision for income taxes	(16,579		)	12,622			(1,922		)	—			(5,879		)
(Benefit) provision for income taxes	(5,360		)	1,255			501			—			(3,604		)
Equity earnings (loss) of subsidiaries, net of taxes	8,944			(2,423		)	—			(6,521		)	—
Net (loss) earnings	$	(2,275	)	$	8,944		$	(2,423	)	$	(6,521	)	$	(2,275	)
Other comprehensive loss:
Foreign currency translation	2,336			2,336			2,336			(4,672		)	2,336
Comprehensive loss	$	61		$	11,280		$	(87	)	$	(11,193	)	$	61

Condensed Consolidating Statement of Comprehensive (Loss) Income

Three months ended September 30, 2012

						Combined
				Combined		Non-
				Guarantor		Guarantor
	Issuer			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	56,507	$	19,168	$	(7,327	)	$	68,348
Cost of products sold	—			34,193		12,862		(7,327		)	39,728
Gross profit	—			22,314		6,306		—			28,620
Operating expenses:
Selling and administrative expenses	5,679			2,377		2,772		—			10,828
Advertising costs	—			6,216		1,713		—			7,929
Research and development costs	—			661		—		—			661
Amortization of acquired intangible assets	—			7,547		1,628		—			9,175
Total operating expenses	5,679			16,801		6,113		—			28,593
Operating (loss) profit	(5,679		)	5,513		193		—			27
Non-operating expenses:
Interest expense	12,406			—		—		—			12,406
Other expense, net	—			28		95		—			123
(Loss) earnings before income taxes	(18,085		)	5,485		98		—			(12,502		)
(Benefit) provision for income taxes	(7,918		)	5,189		—		—			(2,729		)
Equity earnings of subsidiaries, net of taxes	394			98		—		(492		)	—
Net (loss) earnings	$	(9,773	)	$	394	$	98	$	(492	)	$	(9,773	)
Other comprehensive (loss) income:
Foreign currency translation	3,985			3,985		3,985		(7,970		)	3,985
Comprehensive (loss) income	$	(5,788	)	$	4,379	$	4,083	$	(8,462	)	$	(5,788	)

Condensed Consolidating Statement of Comprehensive (Loss) Income

Nine months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	185,441		$	57,342		$	(17,288	)	$	225,495
Cost of products sold	—			97,799			40,796			(17,288		)	121,307
Gross profit	—			87,642			16,546			—			104,188
Operating expenses:
Selling and administrative expenses	13,020			8,662			7,520			—			29,202
Advertising costs	—			19,310			5,177			—			24,487
Research and development costs	—			1,828			11			—			1,839
Amortization of acquired intangible assets	—			22,636			4,890			—			27,526
Total operating expenses	13,020			52,436			17,598			—			83,054
Operating (loss) profit	(13,020		)	35,206			(1,052		)	—			21,134
Non-operating expenses (income):
Interest expense	35,968			—			8			—			35,976
Other expense, net	119			7			321			—			447
(Loss) earnings before (benefit) provision for income taxes	(49,107		)	35,199			(1,381		)	—			(15,289		)
(Benefit) provision for income taxes	(17,634		)	9,905			507			—			(7,222		)
Equity earnings (loss) of subsidiaries, net of taxes	23,406			(1,888		)	—			(21,518		)	—
Net (loss) earnings	$	(8,067	)	$	23,406		$	(1,888	)	$	(21,518	)	$	(8,067	)
Other comprehensive (loss) income:
Foreign currency translation	(5,994		)	(5,994		)	(5,994		)	11,988			(5,994		)
Comprehensive (loss) income	$	(14,061	)	$	17,412		$	(7,882	)	$	(9,530	)	$	(14,061	)

Condensed ConsolidatingStatement of Comprehensive (Loss) Income

Nine months ended September 30, 2012

						Combined
				Combined		Non-
				Guarantor		Guarantor
	Issuer			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	154		$	200,893	$	60,584		$	(24,192	)	$	237,439
Cost of products sold	—			109,187		41,953			(24,192		)	126,948
Gross profit	154			91,706		18,631			—			110,491
Operating expenses:
Selling and administrative expenses	17,378			9,950		7,607			—			34,935
Advertising costs	—			21,842		5,572			—			27,414
Research and development costs	—			1,700		—			—			1,700
Amortization of acquired intangible assets	—			22,637		4,889			—			27,526
Total operating expenses	17,378			56,129		18,068			—			91,575
Operating (loss) profit	(17,224		)	35,577		563			—			18,916
Non-operating expenses:
Interest expense	36,829			—		—			—			36,829
Other expense, net	—			30		136			—			166
(Loss) earnings before income taxes	(54,053		)	35,547		427			—			(18,079		)
(Benefit) provision for income taxes	(23,665		)	18,401		(45		)	—			(5,309		)
Equity earnings of subsidiaries, net of taxes	17,618			472		—			(18,090		)	—
Net (loss) earnings	$	(12,770	)	$	17,618	$	472		$	(18,090	)	$	(12,770	)
Other comprehensive income (loss):
Foreign currency translation	4,500			4,500		4,500			(9,000		)	4,500
Comprehensive (loss) income	$	(8,270	)	$	22,118	$	4,972		$	(27,090	)	$	(8,270	)

Schedule of Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows

Nine months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) earnings	$	(8,067	)	$	23,406		$	(1,888	)	$	(21,518	)	$	(8,067	)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	4,556			25,553			5,604			—			35,713
Share-based compensation	216			—			—			—			216
Deferred income taxes	—			(13,225		)	229			—			(12,996		)
Equity earnings of subsidiaries, net of taxes	(23,406		)	1,888			—			21,518			—
Cash effect of changes in:
Accounts receivable, net	33			(2,363		)	1,707			—			(623		)
Inventories	—			6,157			130			—			6,287
Prepaid taxes	3,329			—			—			—			3,329
Other current assets	(6,062		)	7,771			(1,210		)	—			499
Accounts payable and accrued liabilities	3,168			3,442			(1,531		)	—			5,079
Due Clorox	—			—			(134		)	—			(134		)
Intercompany and other	45,277			(50,960		)	4,912			—			(771		)
Net cash provided by operating activities:	19,044			1,669			7,819			—			28,532
Cash flows from investing activities:
Capital expenditures	(1,000		)	(1,669		)	(225		)	—			(2,894		)
Acquisition, net	—			—			(3,755		)	—			(3,755		)
Net cash used in investing activities	(1,000		)	(1,669		)	(3,980		)	—			(6,649		)
Cash flows from financing activities:
Borrowings under revolver	23,000			—			—			—			23,000
Payments on revolver	(23,000		)	—			—			—			(23,000		)
Principal payments on term loan	(2,250		)	—			—			—			(2,250		)
Payment of advance from Parent	(50		)	—			—			—			(50		)
Net cash used in by financing activities	(2,300		)	—			—			—			(2,300		)
Effect of exchange rate changes on cash	—			—			(57		)	—			(57		)
Net increase in cash	15,744			—			3,782			—			19,526
Cash at beginning of period	1,477			—			2,729			—			4,206
Cash at end of period	$	17,221		$	—		$	6,511		$	—		$	23,732

Condensed Consolidating Statement of Cash Flows
Nine months ended September 30, 2012

							Combined
				Combined			Non-
				Guarantor			Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) earnings	$	(12,770	)	$	17,618		$	472		$	(18,090	)	$	(12,770	)
Adjustments:
Depreciation and amortization	4,521			29,502			1,066			—			35,089
Share-based compensation	199			—			—			—			199
Deferred income taxes	(2,533		)	(6,456		)	1,375			—			(7,614		)
Equity earnings of subsidiaries, net of taxes	(17,618		)	(472		)	—			18,090			—
Cash effect of changes in:
Accounts receivable	699			(22,124		)	(7,486		)	—			(28,911		)
Inventories	—			(10,583		)	(4,563		)	—			(15,146		)
Prepaid taxes	(26,990		)	23,713			105			—			(3,172		)
Other current assets	(417		)	(481		)	(1,127		)	—			(2,025		)
Book overdraft	(1,987		)	—			—			—			(1,987		)
Accounts payable and accrued liabilities	4,561			11,102			7,799			—			23,462
Due from Clorox	(129		)	11,260			782			—			11,913
Intercompany and other	49,254			(44,987		)	(3,627		)	(402		)	238
Net cash (used in) provided by operating activities	(3,210		)	8,092			(5,204		)	(402		)	(724		)
Cash flows from investing activities:
Capital expenditures	(3,110		)	(3,334		)	(274		)	—			(6,718		)
Net cash used in investing activities	(3,110		)	(3,334		)	(274		)	—			(6,718		)
Cash flows from financing activities:
Borrowings under revolver	46,001			—			—			—			46,001
Payments on revolver	(33,000		)	—			—			—			(33,000		)
Principal payments on term loan	(2,250		)	—			—			—			(2,250		)
Payments on advance from Parent	(350		)	—			—			—			(350		)
Net cash provided by financing activities	10,401			—			—			—			10,401
Effect of exchange rate on cash	603			(4,758		)	3,834			402			81
Net increase (decrease) in cash	4,684			—			(1,644		)	—			3,040
Cash at beginning of period	—			—			4,935			—			4,935
Cash at end of period	$	4,684		$	—		$	3,291		$	—		$	7,975

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Financial Information for the Company and Its Subsidiaries (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net (loss) earnings	$ (2,275)	$ (9,773)	$ (8,067)	$ (12,770)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			35,713	35,089
Share-based compensation	74	68	216	199
Deferred income taxes			(12,996)	(7,614)
Cash effect of changes in:
Accounts receivable, net			(623)	(28,911)
Inventories			6,287	(15,146)
Prepaid taxes			3,329	(3,172)
Other current assets			499	(2,025)
Book overdraft				(1,987)
Accounts payable and accrued liabilities			5,079	23,462
Due Clorox			(134)	11,913
Intercompany and other			(771)	238
Net cash provided by (used in) operating activities			28,532	(724)
Cash flows from investing activities:
Capital expenditures			(2,894)	(6,718)
Acquisition, net			(3,755)
Net cash used in investing activities			(6,649)	(6,718)
Cash flows from financing activities:
Borrowings under revolver			23,000	46,001
Payments on revolver			(23,000)	(33,000)
Principal payments on term loan			(2,250)	(2,250)
Payment on advance from Parent			(50)	(350)
Net cash (used in) provided by financing activities			(2,300)	10,401
Effect of exchange rate changes on cash			(57)	81
Net increase (decrease) in cash			19,526	3,040
Cash at beginning of period			4,206	4,935
Cash at end of period	23,732	7,975	23,732	7,975
Reportable legal entities | Issuer
Cash flows from operating activities:
Net (loss) earnings	(2,275)	(9,773)	(8,067)	(12,770)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			4,556	4,521
Share-based compensation			216	199
Deferred income taxes				(2,533)
Equity earnings of subsidiaries, net of taxes	(8,944)	(394)	(23,406)	(17,618)
Cash effect of changes in:
Accounts receivable, net			33	699
Prepaid taxes			3,329	(26,990)
Other current assets			(6,062)	(417)
Book overdraft				(1,987)
Accounts payable and accrued liabilities			3,168	4,561
Due Clorox				(129)
Intercompany and other			45,277	49,254
Net cash provided by (used in) operating activities			19,044	(3,210)
Cash flows from investing activities:
Capital expenditures			(1,000)	(3,110)
Net cash used in investing activities			(1,000)	(3,110)
Cash flows from financing activities:
Borrowings under revolver			23,000	46,001
Payments on revolver			(23,000)	(33,000)
Principal payments on term loan			(2,250)	(2,250)
Payment on advance from Parent			(50)	(350)
Net cash (used in) provided by financing activities			(2,300)	10,401
Effect of exchange rate changes on cash				603
Net increase (decrease) in cash			15,744	4,684
Cash at beginning of period			1,477
Cash at end of period	17,221	4,684	17,221	4,684
Reportable legal entities | Combined Guarantor Subsidiaries
Cash flows from operating activities:
Net (loss) earnings	8,944	394	23,406	17,618
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			25,553	29,502
Deferred income taxes			(13,225)	(6,456)
Equity earnings of subsidiaries, net of taxes	2,423	(98)	1,888	(472)
Cash effect of changes in:
Accounts receivable, net			(2,363)	(22,124)
Inventories			6,157	(10,583)
Prepaid taxes				23,713
Other current assets			7,771	(481)
Accounts payable and accrued liabilities			3,442	11,102
Due Clorox				11,260
Intercompany and other			(50,960)	(44,987)
Net cash provided by (used in) operating activities			1,669	8,092
Cash flows from investing activities:
Capital expenditures			(1,669)	(3,334)
Net cash used in investing activities			(1,669)	(3,334)
Cash flows from financing activities:
Effect of exchange rate changes on cash				(4,758)
Reportable legal entities | Combined Non-Guarantor Subsidiaries
Cash flows from operating activities:
Net (loss) earnings	(2,423)	98	(1,888)	472
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			5,604	1,066
Deferred income taxes			229	1,375
Cash effect of changes in:
Accounts receivable, net			1,707	(7,486)
Inventories			130	(4,563)
Prepaid taxes				105
Other current assets			(1,210)	(1,127)
Accounts payable and accrued liabilities			(1,531)	7,799
Due Clorox			(134)	782
Intercompany and other			4,912	(3,627)
Net cash provided by (used in) operating activities			7,819	(5,204)
Cash flows from investing activities:
Capital expenditures			(225)	(274)
Acquisition, net			(3,755)
Net cash used in investing activities			(3,980)	(274)
Cash flows from financing activities:
Effect of exchange rate changes on cash			(57)	3,834
Net increase (decrease) in cash			3,782	(1,644)
Cash at beginning of period			2,729	4,935
Cash at end of period	6,511	3,291	6,511	3,291
Eliminations
Cash flows from operating activities:
Net (loss) earnings	(6,521)	(492)	(21,518)	(18,090)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Equity earnings of subsidiaries, net of taxes	6,521	492	21,518	18,090
Cash effect of changes in:
Intercompany and other				(402)
Net cash provided by (used in) operating activities				(402)
Cash flows from financing activities:
Effect of exchange rate changes on cash				$ 402

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Financial Information for the Company and Its Subsidiaries (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net sales	$ 71,007	$ 68,348	$ 225,495	$ 237,439
Cost of products sold	38,483	39,728	121,307	126,948
Gross profit	32,524	28,620	104,188	110,491
Operating expenses:
Selling and administrative expenses	9,854	10,828	29,202	34,935
Advertising costs	6,767	7,929	24,487	27,414
Research and development costs	626	661	1,839	1,700
Amortization of acquired intangible assets	9,175	9,175	27,526	27,526
Total operating expenses	26,422	28,593	83,054	91,575
Operating (loss) profit	6,102	27	21,134	18,916
Non-operating expenses:
Interest expense	12,049	12,406	35,976	36,829
Other expense, net	(68)	123	447	166
Loss before benefit for income taxes	(5,879)	(12,502)	(15,289)	(18,079)
(Benefit) provision for income taxes	(3,604)	(2,729)	(7,222)	(5,309)
Net loss	(2,275)	(9,773)	(8,067)	(12,770)
Other comprehensive (loss) income:
Foreign currency translation	2,336	3,985	(5,994)	4,500
Comprehensive income (loss)	61	(5,788)	(14,061)	(8,270)
Reportable legal entities | Issuer
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net sales				154
Gross profit				154
Operating expenses:
Selling and administrative expenses	4,532	5,679	13,020	17,378
Total operating expenses	4,532	5,679	13,020	17,378
Operating (loss) profit	(4,532)	(5,679)	(13,020)	(17,224)
Non-operating expenses:
Interest expense	12,044	12,406	35,968	36,829
Other expense, net	3		119
Loss before benefit for income taxes	(16,579)	(18,085)	(49,107)	(54,053)
(Benefit) provision for income taxes	(5,360)	(7,918)	(17,634)	(23,665)
Equity earnings (loss) of subsidiaries, net of taxes	8,944	394	23,406	17,618
Net loss	(2,275)	(9,773)	(8,067)	(12,770)
Other comprehensive (loss) income:
Foreign currency translation	2,336	3,985	(5,994)	4,500
Comprehensive income (loss)	61	(5,788)	(14,061)	(8,270)
Reportable legal entities | Combined Guarantor Subsidiaries
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net sales	57,639	56,507	185,441	200,893
Cost of products sold	28,534	34,193	97,799	109,187
Gross profit	29,105	22,314	87,642	91,706
Operating expenses:
Selling and administrative expenses	2,916	2,377	8,662	9,950
Advertising costs	5,396	6,216	19,310	21,842
Research and development costs	625	661	1,828	1,700
Amortization of acquired intangible assets	7,545	7,547	22,636	22,637
Total operating expenses	16,482	16,801	52,436	56,129
Operating (loss) profit	12,623	5,513	35,206	35,577
Non-operating expenses:
Other expense, net	1	28	7	30
Loss before benefit for income taxes	12,622	5,485	35,199	35,547
(Benefit) provision for income taxes	1,255	5,189	9,905	18,401
Equity earnings (loss) of subsidiaries, net of taxes	(2,423)	98	(1,888)	472
Net loss	8,944	394	23,406	17,618
Other comprehensive (loss) income:
Foreign currency translation	2,336	3,985	(5,994)	4,500
Comprehensive income (loss)	11,280	4,379	17,412	22,118
Reportable legal entities | Combined Non-Guarantor Subsidiaries
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net sales	19,164	19,168	57,342	60,584
Cost of products sold	15,745	12,862	40,796	41,953
Gross profit	3,419	6,306	16,546	18,631
Operating expenses:
Selling and administrative expenses	2,406	2,772	7,520	7,607
Advertising costs	1,371	1,713	5,177	5,572
Research and development costs	1		11
Amortization of acquired intangible assets	1,630	1,628	4,890	4,889
Total operating expenses	5,408	6,113	17,598	18,068
Operating (loss) profit	(1,989)	193	(1,052)	563
Non-operating expenses:
Interest expense	5		8
Other expense, net	(72)	95	321	136
Loss before benefit for income taxes	(1,922)	98	(1,381)	427
(Benefit) provision for income taxes	501		507	(45)
Net loss	(2,423)	98	(1,888)	472
Other comprehensive (loss) income:
Foreign currency translation	2,336	3,985	(5,994)	4,500
Comprehensive income (loss)	(87)	4,083	(7,882)	4,972
Eliminations
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net sales	(5,796)	(7,327)	(17,288)	(24,192)
Cost of products sold	(5,796)	(7,327)	(17,288)	(24,192)
Non-operating expenses:
Equity earnings (loss) of subsidiaries, net of taxes	(6,521)	(492)	(21,518)	(18,090)
Net loss	(6,521)	(492)	(21,518)	(18,090)
Other comprehensive (loss) income:
Foreign currency translation	(4,672)	(7,970)	11,988	(9,000)
Comprehensive income (loss)	$ (11,193)	$ (8,462)	$ (9,530)	$ (27,090)

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Financial Information for the Company and Its Subsidiaries (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash	$ 23,732	$ 4,206	$ 7,975	$ 4,935
Accounts receivable, net	71,816	69,602
Inventories	37,083	42,444
Other current assets	8,865	12,891
Total current assets	141,496	129,143
Property, plant and equipment, net	29,432	31,473
Goodwill	361,736	362,216
Intangible assets, net	322,458	352,905
Deferred financing costs and other assets, net	4,098	5,020
Total assets	859,220	880,757
Current liabilities:
Accounts payable	15,720	13,158
Accrued expenses and other current liabilities	31,700	28,571
Current portion of long-term debt, less discount	125	279
Total current liabilities	48,293	42,940
Long-term debt, less discount and current portion	553,504	553,581
Other liability	2,500	2,500
Deferred income taxes	92,162	105,131
Total liabilities	696,459	704,152
Shareholder's equity	162,761	176,605
Total liabilities and shareholder's equity	859,220	880,757
Clorox
Current liabilities:
Due to Parent	3	137
Parent
Current liabilities:
Due to Parent	745	795
Reportable legal entities | Issuer
Current assets:
Cash	17,221	1,477	4,684
Accounts receivable, net	72	105
Other current assets	52,803	50,116
Total current assets	70,096	51,698
Property, plant and equipment, net	8,333	8,682
Investment in subsidiaries	659,513	687,226
Deferred financing costs and other assets, net	4,011	4,943
Total assets	741,953	752,549
Current liabilities:
Accounts payable	754	888
Accrued expenses and other current liabilities	15,698	12,397
Current portion of long-term debt, less discount	125	279
Total current liabilities	17,322	14,359
Long-term debt, less discount and current portion	553,504	553,581
Other liability	2,500	2,500
Deferred income taxes	5,120	5,121
Total liabilities	578,446	575,561
Shareholder's equity	163,507	176,988
Total liabilities and shareholder's equity	741,953	752,549
Reportable legal entities | Issuer | Parent
Current liabilities:
Due to Parent	745	795
Reportable legal entities | Combined Guarantor Subsidiaries
Current assets:
Accounts receivable, net	51,998	49,635
Inventories	25,561	31,718
Other current assets	(46,132)	(38,357)
Total current assets	31,427	42,996
Property, plant and equipment, net	18,148	19,397
Goodwill	310,576	310,577
Intangible assets, net	284,006	307,401
Investment in subsidiaries	121,609	122,893
Deferred financing costs and other assets, net	87	77
Total assets	765,853	803,341
Current liabilities:
Accounts payable	10,379	8,868
Accrued expenses and other current liabilities	9,146	7,215
Total current liabilities	19,548	16,105
Deferred income taxes	86,792	100,010
Total liabilities	106,340	116,115
Shareholder's equity	659,513	687,226
Total liabilities and shareholder's equity	765,853	803,341
Reportable legal entities | Combined Guarantor Subsidiaries | Clorox
Current liabilities:
Due to Parent	23	22
Reportable legal entities | Combined Non-Guarantor Subsidiaries
Current assets:
Cash	6,511	2,729	3,291	4,935
Accounts receivable, net	19,746	19,862
Inventories	11,522	10,726
Other current assets	2,194	1,132
Total current assets	39,973	34,449
Property, plant and equipment, net	2,951	3,394
Goodwill	51,160	51,639
Intangible assets, net	39,198	45,887
Total assets	133,282	135,369
Current liabilities:
Accounts payable	4,587	3,402
Accrued expenses and other current liabilities	6,856	8,959
Total current liabilities	11,423	12,476
Deferred income taxes	250
Total liabilities	11,673	12,476
Shareholder's equity	121,609	122,893
Total liabilities and shareholder's equity	133,282	135,369
Reportable legal entities | Combined Non-Guarantor Subsidiaries | Clorox
Current liabilities:
Due to Parent	(20)	115
Eliminations
Current assets:
Intangible assets, net	(746)	(383)
Investment in subsidiaries	(781,122)	(810,119)
Total assets	(781,868)	(810,502)
Current liabilities:
Shareholder's equity	(781,868)	(810,502)
Total liabilities and shareholder's equity	$ (781,868)	$ (810,502)

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The Company and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

The Company and Summary of Significant Accounting Policies

The Company and Summary of Significant Accounting Policies

Note 1 — The Company and Summary of Significant Accounting Policies

The Company

Armored AutoGroup Inc. is a consumer products company consisting primarily of Armor All® and STP®, two of the most recognizable brands in the automotive aftermarket appearance products and performance chemicals categories, respectively. Armored AutoGroup delivers its products to distributors, resellers and end customers (collectively the customers) through its direct operations in the United States, Canada, Mexico, Australia, China and the United Kingdom and distributor relationships in approximately 50 countries. The Armor All and STP brands offer multiple automotive appearance and performance chemicals that can be found in most of the major developed countries around the world.

In September 2010, Viking Acquisition Inc., an entity owned by affiliates of Avista Capital Holdings, L.P. (“Avista”), entered into an agreement to acquire the AutoCare Products Business, Armor All, STP and certain other brands from The Clorox Company (“Clorox”) pursuant to the terms of a Purchase and Sale Agreement dated September 21, 2010 (the “Acquisition”).  The Acquisition closed on November 5, 2010 and included employees in the United States and other countries dedicated to the Company, related product patent and developed technology and certain other assets, including the manufacturing facilities located in Painesville, Ohio and Wales, U.K. Viking Acquisition Inc. was subsequently renamed as Armored AutoGroup Inc. (“AAG”).  Armored AutoGroup Parent Inc. (“AAG Parent” or “Parent”) indirectly owns all of AAG’s issued and outstanding capital stock through its direct subsidiary and AAG’s direct parent, Armored AutoGroup Intermediate Inc. (“Intermediate”).

Basis of Presentation

The unaudited interim condensed consolidated financial statements for the three and nine month periods ended September 30, 2013 and 2012 are unaudited but, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of the Company for the periods presented. The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ materially from the estimates and assumptions made. Further, the results for the interim period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013, or for any future period.

The Company’s business is moderately seasonal and can be impacted by weather. Sales are typically higher in the first half of the calendar year as the Company’s customers in the northern hemisphere purchase stock for the spring and summer seasons when weather is warmer than in the fall and winter months.  This pattern is largely reflective of our customers’ seasonal purchasing patterns, as well as the timing of our promotional activities. Weather can also influence consumer behavior, especially for appearance products. Our appearance products sell best during warm, dry weather, and less if weather is cold and wet.  For these reasons, among others, the Company’s results for any quarter are not necessarily indicative of future quarterly results and, accordingly, period-to-period comparisons should not be relied upon as an indication of future performance.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information in this report should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2012, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies. The consolidated balance sheet at December 31, 2012 has been derived from the Company’s audited financial statements at that date, but does not include all of the financial information or disclosures required by U.S. GAAP for complete financial statements.

Revenue Recognition

Sales are recognized when title to the product, ownership and risk of loss transfer to the customer, which can be on the date of shipment or the date of receipt by the customer and when all of the following have occurred: a firm sales arrangement exists, pricing is fixed and determinable, and collection is reasonably assured. Revenue includes shipping and handling costs, which generally are included in the list price to the customer. Taxes collected from customers and remitted to governmental authorities are not included in sales. A provision for payment discounts and product return allowances is recorded as a reduction of sales in the same period that the revenue is recognized.

The Company routinely commits to trade promotion programs with customers, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons offered through various programs to customers and consumers. Accruals for expected payouts under these programs are included as accrued marketing and promotion in the accrued expenses and other current liabilities line item in the Condensed Consolidated Balance Sheets and are recorded as a reduction of sales in the Condensed Statements of Comprehensive (Loss) Income.

Amounts received by the Company from the licensing of certain trademarks are recorded as deferred revenue in the Condensed Consolidated Balance Sheets and are recognized as revenue on a straight-line basis over the term of the licensing agreement when the underlying royalties are earned.

Cost of Products Sold

Cost of products sold is primarily comprised of direct materials and supplies consumed in the manufacturing of product, as well as manufacturing labor, depreciation expense, direct overhead expense necessary to acquire and convert the purchased materials and supplies into finished product, contract manufacturing costs, and provisions for inventory losses (including losses relating to excess and obsolete inventory). Cost of products sold also includes the cost to distribute products to customers, inbound freight costs, internal transfer costs, warehousing costs and other shipping and handling activity as well as costs associated with developing and designing new packaging.

Income Taxes

The Company uses the asset and liability method to account for income taxes. For purposes of the unaudited interim condensed consolidated financial statements, the Company calculates tax with reference to the anticipated effective tax rate for the annual financial period. Deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to the differences between the financial statement amounts and their respective tax bases. Management reviews the Company’s deferred tax assets to determine whether their value can be realized based upon available evidence. A valuation allowance is established when management believes that it is more likely than not that some portion or all of its deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the Company’s tax provision in the period of change. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by accounting guidance on the accounting for uncertainty in income taxes. Amounts for uncertain tax positions are adjusted when new information becomes available or when positions are effectively settled.

Foreign Currency Translation

Local currencies are the functional currencies for substantially all of the Company’s foreign operations. When the transactional currency is different than the functional currency, transaction gains and losses are included as a component of other (income) expense, net.  Assets and liabilities of foreign operations are translated into U.S. dollars using the exchange rates in effect at the respective balance sheet reporting date. Income and expenses are translated at the average exchange rate during the period. Gains and losses on foreign currency translation are reported as a component of accumulated other comprehensive (loss) income. Deferred taxes are not provided on cumulative translation adjustments where the Company expects earnings of a foreign subsidiary to be indefinitely reinvested.

Goodwill and Intangible Assets

The Company tests its goodwill and trademark and brand intangible assets with indefinite lives annually as of October 1st unless there are indications during an interim period that these assets may have become impaired.  Goodwill impairment occurs when the carrying amount of one of the Company’s reporting unit’s goodwill exceeds its implied fair value. The Company would then record an impairment charge being the difference between the carrying amount and the implied fair value of the reporting unit’s goodwill. For trademarks and brand intangible assets with indefinite lives, impairment occurs when the carrying amount of an asset is greater than its estimated fair value and an impairment charge is recorded for the difference between the carrying amount and the fair value. The Company’s estimates of fair value are based primarily on a discounted cash flow approach as supplemented by a market based approach. Significant judgment is necessary in the preparation of assumptions and estimates inherent in such valuation approaches, particularly with respect to the determination of future volumes, revenue and expense growth rates, changes in working capital use, foreign-exchange rates, inflation, the selection of an appropriate discount rate and the calculation of an average earnings before interest, tax, depreciation and amortization (“EBITDA”) multiple of a selected public-company peer group. In particular, the discount rates the Company utilizes in these analyses, as well as expectations for future cash flows, may be influenced by such factors as changes in interest rates, rates of inflation and changes in regional risk.  During the three months ended September 30, 2013, goodwill increased by $1.9 million related to the preliminary allocation of purchase price for an acquisition made in Europe.

Property, Plant & Equipment and Finite-Lived Intangible Assets

Property, plant and equipment and finite-lived intangible assets are stated at cost less accumulated depreciation and amortization. The Company calculates depreciation and amortization expenses by the straight-line method using estimated useful lives of the related assets. The Company reviews property, plant and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset or asset group may not be recoverable. The Company’s impairment review is based on an estimate of the undiscounted cash flows at the lowest level for which identifiable cash flows exist and impairment occurs when the book value of the asset group exceeds the estimated future undiscounted cash flows generated by the asset group. When impairment is indicated, a charge is recorded for the difference between the book value of the asset group and its fair value. Depending on the asset or asset group, estimated fair value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in a similar condition.

Recent Accounting Pronouncements

In July 2013 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward exists (ASU 2013-11). The ASU requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with an exception in certain circumstances where an unrecognized tax benefit, or portion thereof, is to be presented in the financial statements as a liability.  ASU 2013-11 is effective for the Company January 1, 2014 for fiscal year 2014 and interim periods therein. The guidance in ASU 2013-11 is to be applied prospectively to all unrecognized tax benefits that exist at January 1, 2014. Adoption of ASU 2013-11 is not expected to have a material impact on the Company.

In February 2013 the FASB issued Accounting Standards Update (ASU) No. 2013-04—Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (ASU 2013-04). The ASU requires reporting and disclosure about obligations resulting from joint and several liability arrangements within its scope for which the total amount of the obligation is fixed at the reporting date. For the Company, ASU 2013-04 is effective January 1, 2014 for fiscal year 2014 and interim periods therein. The guidance in ASU 2013-04 is to be applied retrospectively for those obligations resulting from joint and several liability arrangements within its scope that exist at January 1, 2014. Adoption of ASU 2013-04 is not expected to have a material impact on the Company.

The Company adopted the following pronouncements effective January 1, 2013:

In February 2013, the FASB issued ASU 2013-02—Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (ASU 2013-02).  Substantially all of the information that this update requires already is required to be disclosed elsewhere in financial statements under U.S. GAAP. However, the new requirement to present information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income will present, in one place, information about significant amounts reclassified and, in some cases, cross-references to related footnote disclosures.

During July 2012, the FASB issued ASU 2012-02 Intangibles—Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02) which was intended to reduce the cost and complexity of performing an impairment test for indefinite-lived intangible assets by simplifying how the Company tests those assets for impairment and to improve consistency in impairment testing guidance among long lived asset categories. Under ASU 2012-02, the Company has the option first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The Company also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. The Company will be able to resume performing the qualitative assessment in any subsequent period.

In December 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”) to amend the requirement for an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. Adoption of 2011-11 did not have an impact on the Company.

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Fair Value Measurement of Assets and Liabilities

9 Months Ended

Sep. 30, 2013

Fair Value Measurement of Assets and Liabilities

Fair Value Measurement of Assets and Liabilities

Note 3 - Fair Value Measurement of Assets and Liabilities

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value which is intended to increase consistency and comparability and related disclosures. An asset or liability’s classification is based on the lowest level of input that is significant to the fair value measurement and is disclosed in one of the following three categories: Level 1 — Quoted market prices in active markets for identical assets or liabilities; Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data; Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions.

The carrying and fair values of the Company’s financial assets and liabilities were as follows (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term loan	$	286,324	$	285,186	$	287,390	$	281,138
Senior notes	267,305		249,728		266,470		233,063

The fair value of the Term Loan and the Senior Notes was determined using broker quotes, which use discounted cash flows, an income approach, and the then-applicable forward LIBOR rates and, therefore, meets the definition of Level 2 fair value, as defined above.

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Segment Data

9 Months Ended

Sep. 30, 2013

Segment Data

Segment Data

Note 6 — Segment Data

The Company manages its business through two geographic segments: North America and International.

· North America—consists of auto-care products marketed and sold in the United States and Canada. Products within this segment include auto-care products primarily under the Armor All® and STP® brands.

· International—consists of products sold outside North America, including Australia, Europe and other international locations. Products within this segment include auto-care products primarily under the Armor All® and STP® brands.

The Company does not allocate its amortization of intangible assets or interest expense between its North America and International segments but includes them in the tables below under Corporate in order to reconcile the North America and International segments’ performance to the Company’s Condensed Consolidated Statements of Comprehensive (Loss) Income. All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales.

The following summarizes the financial performance of the Company’s operating segments (in thousands):

	Three Months Ended September 30, 2013
	North America		International		Corporate			Consolidated
Net sales	$	50,886	$	20,121	$	—		$	71,007
Earnings (loss) before income taxes	11,421		3,924		(21,224		)	(5,879		)
Capital expenditures	1,049		95		—			1,144
Depreciation of property, plant and equipment and amortization of intangible assets	1,556		127		9,175			10,858
Share based compensation	68		6		—			74

	Three Months Ended September 30, 2012
	North America		International		Corporate			Consolidated
Net sales	$	50,295	$	18,053	$	—		$	68,348
Earnings (loss) before income taxes	6,664		2,415		(21,581		)	(12,502		)
Capital expenditures	1,109		446		—			1,556
Depreciation of property plant and equipment and amortization of intangible assets	1,578		101		9,175			11,876
Share based compensation	65		3		—			68

	Nine Months Ended September 30, 2013
	North America		International		Corporate			Consolidated
Net sales	$	169,505	$	55,990	$	—		$	225,495
Earnings (loss) before income taxes	41,724		6,489		(63,502		)	(15,289		)
Capital expenditures	2,652		242		—			2,894
Depreciation of property, plant and equipment and amortization of intangible assets	4,577		404		27,525			32,506
Share based compensation	198		18		—			216

	Nine Months Ended September 30, 2012
	North America		International		Corporate			Consolidated
Net sales	$	183,434	$	54,005	$	—		$	237,439
Earnings (loss) before income taxes	39,708		6,568		(64,355		)	(18,079		)
Capital expenditures	6,131		586		—			6,718
Depreciation of property plant and equipment and amortization of intangible assets	4,130		422		27,526			38,089
Share based compensation	191		8		—			199

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies.

Commitments and Contingencies

Note 4 — Commitments and Contingencies

Litigation and Other Legal Matters

In connection with the Acquisition, Clorox retained liability associated with a potential contract claim and the Company agreed to indemnify and reimburse Clorox for 50% of the first $5,000,000 in settlement costs related to the contract claim. As of September 30, 2013 and December 31, 2012, the Company has accrued $2,500,000 in long-term liabilities related to this contingency.

The Company is subject to various lawsuits and claims relating to issues such as contract disputes, product liability, patents and trademarks, advertising, employee and other matters. Although the results of claims and litigation cannot be predicted with certainty, it is the opinion of management that the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, individually or in the aggregate, on the Company’s financial statements taken as a whole.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
CONDENSED CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1	1
Common stock, shares issued	1	1
Common stock, shares outstanding	1	1

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Inventories (Tables)

9 Months Ended

Sep. 30, 2013

Inventories

Schedule of inventories

Inventories consisted of the following (in thousands):

	September 30, 2013			December 31, 2012
Finished goods	$	30,225		$	33,386
Raw materials and packaging	9,118			11,087
Allowances for obsolescence	(2,260		)	(2,029		)
	$	37,083		$	42,444

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net loss	$ (8,067)	$ (12,770)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	35,713	35,089
Share-based compensation	216	199
Deferred income taxes	(12,996)	(7,614)
Cash effect of changes, net of effect of acquisition, in:
Accounts receivable, net	(623)	(28,911)
Inventories	6,287	(15,146)
Prepaid taxes	3,329	(3,172)
Other current assets	499	(2,025)
Book overdraft		(1,987)
Accounts payable and accrued liabilities	5,079	23,462
Due to Clorox	(134)	11,913
Other	(771)	238
Net cash provided by (used in) operating activities	28,532	(724)
Cash flows from investing activities:
Capital expenditures	(2,894)	(6,718)
Acquisition, net	(3,755)
Net cash used in investing activities	(6,649)	(6,718)
Cash flows from financing activities:
Borrowings under revolver	23,000	46,001
Payments on revolver	(23,000)	(33,000)
Principal payments on term loan	(2,250)	(2,250)
Payment on advance from Parent	(50)	(350)
Net cash (used in) provided by financing activities	(2,300)	10,401
Effect of exchange rate changes on cash	(57)	81
Net increase in cash	19,526	3,040
Cash at beginning of period	4,206	4,935
Cash at end of period	23,732	7,975
Supplemental cash flow disclosures:
Cash paid for interest	26,567	27,632
Cash paid for income taxes	$ 3,226	$ 7,791

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash	$ 23,732	$ 4,206
Accounts receivable, net	71,816	69,602
Inventories	37,083	42,444
Other current assets	8,865	12,891
Total current assets	141,496	129,143
Property, plant and equipment, net	29,432	31,473
Goodwill	361,736	362,216
Intangible assets, net	322,458	352,905
Deferred financing costs and other assets, net	4,098	5,020
Total assets	859,220	880,757
Current liabilities:
Accounts payable	15,720	13,158
Accrued expenses and other current liabilities	31,700	28,571
Current portion of long-term debt, less discount	125	279
Total current liabilities	48,293	42,940
Long-term debt, less discount and current portion	553,504	553,581
Other liability	2,500	2,500
Deferred income taxes	92,162	105,131
Total liabilities	696,459	704,152
Commitments and contingencies (Note 4)
Shareholder's Equity:
Common stock ($0.01 par value, one thousand shares authorized, one thousand shares issued and outstanding at September 30, 2013 and December 31, 2012)
Additional paid-in capital	260,966	260,750
Accumulated deficit	(93,651)	(85,585)
Accumulated other comprehensive (loss) income	(4,554)	1,440
Total shareholder's equity	162,761	176,605
Total liabilities and shareholder's equity	859,220	880,757
Parent
Current liabilities:
Due to related parties	745	795
Clorox
Current liabilities:
Due to related parties	$ 3	$ 137

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Income taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income taxes
Effective tax benefit rate (as a percent)	61.30%	21.80%	47.20%	29.40%
Discrete tax benefit	$ 1.4

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The Company and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

The Company and Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The unaudited interim condensed consolidated financial statements for the three and nine month periods ended September 30, 2013 and 2012 are unaudited but, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of the Company for the periods presented. The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ materially from the estimates and assumptions made. Further, the results for the interim period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013, or for any future period.

The Company’s business is moderately seasonal and can be impacted by weather. Sales are typically higher in the first half of the calendar year as the Company’s customers in the northern hemisphere purchase stock for the spring and summer seasons when weather is warmer than in the fall and winter months.  This pattern is largely reflective of our customers’ seasonal purchasing patterns, as well as the timing of our promotional activities. Weather can also influence consumer behavior, especially for appearance products. Our appearance products sell best during warm, dry weather, and less if weather is cold and wet.  For these reasons, among others, the Company’s results for any quarter are not necessarily indicative of future quarterly results and, accordingly, period-to-period comparisons should not be relied upon as an indication of future performance.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information in this report should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2012, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies. The consolidated balance sheet at December 31, 2012 has been derived from the Company’s audited financial statements at that date, but does not include all of the financial information or disclosures required by U.S. GAAP for complete financial statements.

Revenue Recognition

Revenue Recognition

Sales are recognized when title to the product, ownership and risk of loss transfer to the customer, which can be on the date of shipment or the date of receipt by the customer and when all of the following have occurred: a firm sales arrangement exists, pricing is fixed and determinable, and collection is reasonably assured. Revenue includes shipping and handling costs, which generally are included in the list price to the customer. Taxes collected from customers and remitted to governmental authorities are not included in sales. A provision for payment discounts and product return allowances is recorded as a reduction of sales in the same period that the revenue is recognized.

The Company routinely commits to trade promotion programs with customers, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons offered through various programs to customers and consumers. Accruals for expected payouts under these programs are included as accrued marketing and promotion in the accrued expenses and other current liabilities line item in the Condensed Consolidated Balance Sheets and are recorded as a reduction of sales in the Condensed Statements of Comprehensive (Loss) Income.

Amounts received by the Company from the licensing of certain trademarks are recorded as deferred revenue in the Condensed Consolidated Balance Sheets and are recognized as revenue on a straight-line basis over the term of the licensing agreement when the underlying royalties are earned.

Cost of Products Sold

Cost of Products Sold

Cost of products sold is primarily comprised of direct materials and supplies consumed in the manufacturing of product, as well as manufacturing labor, depreciation expense, direct overhead expense necessary to acquire and convert the purchased materials and supplies into finished product, contract manufacturing costs, and provisions for inventory losses (including losses relating to excess and obsolete inventory). Cost of products sold also includes the cost to distribute products to customers, inbound freight costs, internal transfer costs, warehousing costs and other shipping and handling activity as well as costs associated with developing and designing new packaging.

Income Taxes

Income Taxes

The Company uses the asset and liability method to account for income taxes. For purposes of the unaudited interim condensed consolidated financial statements, the Company calculates tax with reference to the anticipated effective tax rate for the annual financial period. Deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to the differences between the financial statement amounts and their respective tax bases. Management reviews the Company’s deferred tax assets to determine whether their value can be realized based upon available evidence. A valuation allowance is established when management believes that it is more likely than not that some portion or all of its deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the Company’s tax provision in the period of change. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by accounting guidance on the accounting for uncertainty in income taxes. Amounts for uncertain tax positions are adjusted when new information becomes available or when positions are effectively settled.

Foreign Currency Translation

Foreign Currency Translation

Local currencies are the functional currencies for substantially all of the Company’s foreign operations. When the transactional currency is different than the functional currency, transaction gains and losses are included as a component of other (income) expense, net.  Assets and liabilities of foreign operations are translated into U.S. dollars using the exchange rates in effect at the respective balance sheet reporting date. Income and expenses are translated at the average exchange rate during the period. Gains and losses on foreign currency translation are reported as a component of accumulated other comprehensive (loss) income. Deferred taxes are not provided on cumulative translation adjustments where the Company expects earnings of a foreign subsidiary to be indefinitely reinvested.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

The Company tests its goodwill and trademark and brand intangible assets with indefinite lives annually as of October 1st unless there are indications during an interim period that these assets may have become impaired.  Goodwill impairment occurs when the carrying amount of one of the Company’s reporting unit’s goodwill exceeds its implied fair value. The Company would then record an impairment charge being the difference between the carrying amount and the implied fair value of the reporting unit’s goodwill. For trademarks and brand intangible assets with indefinite lives, impairment occurs when the carrying amount of an asset is greater than its estimated fair value and an impairment charge is recorded for the difference between the carrying amount and the fair value. The Company’s estimates of fair value are based primarily on a discounted cash flow approach as supplemented by a market based approach. Significant judgment is necessary in the preparation of assumptions and estimates inherent in such valuation approaches, particularly with respect to the determination of future volumes, revenue and expense growth rates, changes in working capital use, foreign-exchange rates, inflation, the selection of an appropriate discount rate and the calculation of an average earnings before interest, tax, depreciation and amortization (“EBITDA”) multiple of a selected public-company peer group. In particular, the discount rates the Company utilizes in these analyses, as well as expectations for future cash flows, may be influenced by such factors as changes in interest rates, rates of inflation and changes in regional risk.  During the three months ended September 30, 2013, goodwill increased by $1.9 million related to the preliminary allocation of purchase price for an acquisition made in Europe.

Property, Plant & Equipment and Finite-Lived Intangible Assets

Property, Plant & Equipment and Finite-Lived Intangible Assets

Property, plant and equipment and finite-lived intangible assets are stated at cost less accumulated depreciation and amortization. The Company calculates depreciation and amortization expenses by the straight-line method using estimated useful lives of the related assets. The Company reviews property, plant and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset or asset group may not be recoverable. The Company’s impairment review is based on an estimate of the undiscounted cash flows at the lowest level for which identifiable cash flows exist and impairment occurs when the book value of the asset group exceeds the estimated future undiscounted cash flows generated by the asset group. When impairment is indicated, a charge is recorded for the difference between the book value of the asset group and its fair value. Depending on the asset or asset group, estimated fair value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in a similar condition.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In July 2013 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward exists (ASU 2013-11). The ASU requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with an exception in certain circumstances where an unrecognized tax benefit, or portion thereof, is to be presented in the financial statements as a liability.  ASU 2013-11 is effective for the Company January 1, 2014 for fiscal year 2014 and interim periods therein. The guidance in ASU 2013-11 is to be applied prospectively to all unrecognized tax benefits that exist at January 1, 2014. Adoption of ASU 2013-11 is not expected to have a material impact on the Company.

In February 2013 the FASB issued Accounting Standards Update (ASU) No. 2013-04—Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (ASU 2013-04). The ASU requires reporting and disclosure about obligations resulting from joint and several liability arrangements within its scope for which the total amount of the obligation is fixed at the reporting date. For the Company, ASU 2013-04 is effective January 1, 2014 for fiscal year 2014 and interim periods therein. The guidance in ASU 2013-04 is to be applied retrospectively for those obligations resulting from joint and several liability arrangements within its scope that exist at January 1, 2014. Adoption of ASU 2013-04 is not expected to have a material impact on the Company.

The Company adopted the following pronouncements effective January 1, 2013:

In February 2013, the FASB issued ASU 2013-02—Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (ASU 2013-02).  Substantially all of the information that this update requires already is required to be disclosed elsewhere in financial statements under U.S. GAAP. However, the new requirement to present information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income will present, in one place, information about significant amounts reclassified and, in some cases, cross-references to related footnote disclosures.

During July 2012, the FASB issued ASU 2012-02 Intangibles—Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02) which was intended to reduce the cost and complexity of performing an impairment test for indefinite-lived intangible assets by simplifying how the Company tests those assets for impairment and to improve consistency in impairment testing guidance among long lived asset categories. Under ASU 2012-02, the Company has the option first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The Company also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. The Company will be able to resume performing the qualitative assessment in any subsequent period.

In December 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”) to amend the requirement for an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. Adoption of 2011-11 did not have an impact on the Company.

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Income taxes (Tables)

9 Months Ended

Sep. 30, 2013

Income taxes

Schedule of Company's effective tax benefit rate

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Effective tax benefit rate	61.3	%	21.8	%	47.2	%	29.4	%

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Financial Information for the Company and Its Subsidiaries

9 Months Ended

Sep. 30, 2013

Financial Information for the Company and Its Subsidiaries

Financial Information for the Company and Its Subsidiaries

Note 7 — Financial Information for the Company and Its Subsidiaries

The Company’s payment obligations under the Senior Notes are guaranteed, jointly and severally, by all of the Company’s wholly owned domestic subsidiaries that guarantee the obligations of the Company under the Credit Facility. These guarantees are full and unconditional, subject, in the case of the subsidiary guarantors, to customary release provisions. The Company conducts substantially all of its business through its subsidiaries. In servicing payments to be made on the Senior Notes and other indebtedness, and to satisfy other liquidity requirements, the Company will rely, in large part, on cash flows from these subsidiaries, mainly in the form of dividends, royalties and advances or payments on account of intercompany loan arrangements. The ability of these subsidiaries to make dividend payments to the Company will be affected by, among other factors, the obligations of these entities to their creditors, requirements of corporate and other law, and restrictions contained in agreements entered into by or relating to these entities.

The following supplemental condensed consolidating financial information sets forth balance sheets, statements of comprehensive (loss) income and statements of cash flows for the Company, the guarantor subsidiaries, the non-guarantor subsidiaries and elimination entries necessary to consolidate the Company and its subsidiaries. This information is presented in lieu of separate financial statements and other related disclosures pursuant to Regulation S-X Rule 3-10 of the Securities Exchange Act of 1934, as amended, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”

The operating and investing activities of the separate legal entities are fully interdependent and integrated. Accordingly, the results of the separate legal entities are not representative of what the operating results would be on a standalone basis.

Condensed Consolidating Balance Sheet

September 30, 2013

	Issuer		Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	17,221	$	—		$	6,511		$	—		$	23,732
Accounts receivable, net	72		51,998			19,746			—			71,816
Inventories	—		25,561			11,522			—			37,083
Other current assets	52,803		(46,132		)	2,194			—			8,865
Total current assets	70,096		31,427			39,973			—			141,496
Property, plant and equipment, net	8,333		18,148			2,951			—			29,432
Goodwill	—		310,576			51,160			—			361,736
Intangible assets, net	—		284,006			39,198			(746		)	322,458
Investment in subsidiaries	659,513		121,609			—			(781,122		)	—
Deferred financing costs and other assets, net	4,011		87			—			—			4,098
Total assets	$	741,953	$	765,853		$	133,282		$	(781,868	)	$	859,220
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	754	$	10,379		$	4,587		$	—		$	15,720
Accrued expenses and other current liabilities	15,698		9,146			6,856			—			31,700
Due to Clorox	—		23			(20		)	—			3
Due to Parent	745		—			—			—			745
Revolving credit loan	—		—			—			—			—
Current portion of long-term debt, less discount	125		—			—			—			125
Total current liabilities	17,322		19,548			11,423			—			48,293
Long-term debt, less discount and current portion	553,504		—			—			—			553,504
Other liability	2,500		—			—			—			2,500
Deferred income taxes	5,120		86,792			250			—			92,162
Total liabilities	578,446		106,340			11,673			—			696,459
Shareholder’s equity	163,507		659,513			121,609			(781,868		)	162,761
Total liabilities and shareholder’s equity	$	741,953	$	765,853		$	133,282		$	(781,868	)	$	859,220

Condensed Consolidating Balance Sheet

December 31, 2012

	Issuer		Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	1,477	$	—		$	2,729	$	—		$	4,206
Accounts receivable, net	105		49,635			19,862		—			69,602
Inventories	—		31,718			10,726		—			42,444
Other current assets	50,116		(38,357		)	1,132		—			12,891
Total current assets	51,698		42,996			34,449		—			129,143
Property, plant and equipment, net	8,682		19,397			3,394		—			31,473
Goodwill	—		310,577			51,639		—			362,216
Intangible assets, net	—		307,401			45,887		(383		)	352,905
Investment in subsidiaries	687,226		122,893			—		(810,119		)	—
Deferred financing costs and other assets, net	4,943		77			—		—			5,020
Total assets	$	752,549	$	803,341		$	135,369	$	(810,502	)	$	880,757
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	888	$	8,868		$	3,402	$	—		$	13,158
Accrued expenses and other current liabilities	12,397		7,215			8,959		—			28,571
Due to Clorox	—		22			115		—			137
Due to Parent	795		—			—		—			795
Current portion of long-term debt, less discount	279		—			—		—			279
Total current liabilities	14,359		16,105			12,476		—			42,940
Long-term debt, less discount and current portion	553,581		—			—		—			553,581
Other liability	2,500		—			—		—			2,500
Deferred income taxes	5,121		100,010			—		—			105,131
Total liabilities	575,561		116,115			12,476		—			704,152
Shareholder’s equity	176,988		687,226			122,893		(810,502		)	176,605
Total liabilities and shareholder’s equity	$	752,549	$	803,341		$	135,369	$	(810,502	)	$	880,757

Condensed Consolidating Statement of Comprehensive Loss

Three months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	57,639		$	19,164		$	(5,796	)	$	71,007
Cost of products sold	—			28,534			15,745			(5,796		)	38,483
Gross profit	—			29,105			3,419			—			32,524
Operating expenses:
Selling and administrative expenses	4,532			2,916			2,406			—			9,854
Advertising costs	—			5,396			1,371			—			6,767
Research and development costs	—			625			1			—			626
Amortization of acquired intangible assets	—			7,545			1,630			—			9,175
Total operating expenses	4,532			16,482			5,408			—			26,422
Operating (loss) profit	(4,532		)	12,623			(1,989		)	—			6,102
Non-operating expenses:
Interest expense	12,044			—			5			—			12,049
Other expense, net	3			1			(72		)	—			(68		)
(Loss) earnings before (benefit) provision for income taxes	(16,579		)	12,622			(1,922		)	—			(5,879		)
(Benefit) provision for income taxes	(5,360		)	1,255			501			—			(3,604		)
Equity earnings (loss) of subsidiaries, net of taxes	8,944			(2,423		)	—			(6,521		)	—
Net (loss) earnings	$	(2,275	)	$	8,944		$	(2,423	)	$	(6,521	)	$	(2,275	)
Other comprehensive loss:
Foreign currency translation	2,336			2,336			2,336			(4,672		)	2,336
Comprehensive loss	$	61		$	11,280		$	(87	)	$	(11,193	)	$	61

Condensed Consolidating Statement of Comprehensive (Loss) Income

Three months ended September 30, 2012

						Combined
				Combined		Non-
				Guarantor		Guarantor
	Issuer			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	56,507	$	19,168	$	(7,327	)	$	68,348
Cost of products sold	—			34,193		12,862		(7,327		)	39,728
Gross profit	—			22,314		6,306		—			28,620
Operating expenses:
Selling and administrative expenses	5,679			2,377		2,772		—			10,828
Advertising costs	—			6,216		1,713		—			7,929
Research and development costs	—			661		—		—			661
Amortization of acquired intangible assets	—			7,547		1,628		—			9,175
Total operating expenses	5,679			16,801		6,113		—			28,593
Operating (loss) profit	(5,679		)	5,513		193		—			27
Non-operating expenses:
Interest expense	12,406			—		—		—			12,406
Other expense, net	—			28		95		—			123
(Loss) earnings before income taxes	(18,085		)	5,485		98		—			(12,502		)
(Benefit) provision for income taxes	(7,918		)	5,189		—		—			(2,729		)
Equity earnings of subsidiaries, net of taxes	394			98		—		(492		)	—
Net (loss) earnings	$	(9,773	)	$	394	$	98	$	(492	)	$	(9,773	)
Other comprehensive (loss) income:
Foreign currency translation	3,985			3,985		3,985		(7,970		)	3,985
Comprehensive (loss) income	$	(5,788	)	$	4,379	$	4,083	$	(8,462	)	$	(5,788	)

Condensed Consolidating Statement of Comprehensive (Loss) Income

Nine months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	185,441		$	57,342		$	(17,288	)	$	225,495
Cost of products sold	—			97,799			40,796			(17,288		)	121,307
Gross profit	—			87,642			16,546			—			104,188
Operating expenses:
Selling and administrative expenses	13,020			8,662			7,520			—			29,202
Advertising costs	—			19,310			5,177			—			24,487
Research and development costs	—			1,828			11			—			1,839
Amortization of acquired intangible assets	—			22,636			4,890			—			27,526
Total operating expenses	13,020			52,436			17,598			—			83,054
Operating (loss) profit	(13,020		)	35,206			(1,052		)	—			21,134
Non-operating expenses (income):
Interest expense	35,968			—			8			—			35,976
Other expense, net	119			7			321			—			447
(Loss) earnings before (benefit) provision for income taxes	(49,107		)	35,199			(1,381		)	—			(15,289		)
(Benefit) provision for income taxes	(17,634		)	9,905			507			—			(7,222		)
Equity earnings (loss) of subsidiaries, net of taxes	23,406			(1,888		)	—			(21,518		)	—
Net (loss) earnings	$	(8,067	)	$	23,406		$	(1,888	)	$	(21,518	)	$	(8,067	)
Other comprehensive (loss) income:
Foreign currency translation	(5,994		)	(5,994		)	(5,994		)	11,988			(5,994		)
Comprehensive (loss) income	$	(14,061	)	$	17,412		$	(7,882	)	$	(9,530	)	$	(14,061	)

Condensed ConsolidatingStatement of Comprehensive (Loss) Income

Nine months ended September 30, 2012

						Combined
				Combined		Non-
				Guarantor		Guarantor
	Issuer			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	154		$	200,893	$	60,584		$	(24,192	)	$	237,439
Cost of products sold	—			109,187		41,953			(24,192		)	126,948
Gross profit	154			91,706		18,631			—			110,491
Operating expenses:
Selling and administrative expenses	17,378			9,950		7,607			—			34,935
Advertising costs	—			21,842		5,572			—			27,414
Research and development costs	—			1,700		—			—			1,700
Amortization of acquired intangible assets	—			22,637		4,889			—			27,526
Total operating expenses	17,378			56,129		18,068			—			91,575
Operating (loss) profit	(17,224		)	35,577		563			—			18,916
Non-operating expenses:
Interest expense	36,829			—		—			—			36,829
Other expense, net	—			30		136			—			166
(Loss) earnings before income taxes	(54,053		)	35,547		427			—			(18,079		)
(Benefit) provision for income taxes	(23,665		)	18,401		(45		)	—			(5,309		)
Equity earnings of subsidiaries, net of taxes	17,618			472		—			(18,090		)	—
Net (loss) earnings	$	(12,770	)	$	17,618	$	472		$	(18,090	)	$	(12,770	)
Other comprehensive income (loss):
Foreign currency translation	4,500			4,500		4,500			(9,000		)	4,500
Comprehensive (loss) income	$	(8,270	)	$	22,118	$	4,972		$	(27,090	)	$	(8,270	)

Condensed Consolidating Statement of Cash Flows

Nine months ended September 30, 2013

	Issuer			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) earnings	$	(8,067	)	$	23,406		$	(1,888	)	$	(21,518	)	$	(8,067	)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	4,556			25,553			5,604			—			35,713
Share-based compensation	216			—			—			—			216
Deferred income taxes	—			(13,225		)	229			—			(12,996		)
Equity earnings of subsidiaries, net of taxes	(23,406		)	1,888			—			21,518			—
Cash effect of changes in:
Accounts receivable, net	33			(2,363		)	1,707			—			(623		)
Inventories	—			6,157			130			—			6,287
Prepaid taxes	3,329			—			—			—			3,329
Other current assets	(6,062		)	7,771			(1,210		)	—			499
Accounts payable and accrued liabilities	3,168			3,442			(1,531		)	—			5,079
Due Clorox	—			—			(134		)	—			(134		)
Intercompany and other	45,277			(50,960		)	4,912			—			(771		)
Net cash provided by operating activities:	19,044			1,669			7,819			—			28,532
Cash flows from investing activities:
Capital expenditures	(1,000		)	(1,669		)	(225		)	—			(2,894		)
Acquisition, net	—			—			(3,755		)	—			(3,755		)
Net cash used in investing activities	(1,000		)	(1,669		)	(3,980		)	—			(6,649		)
Cash flows from financing activities:
Borrowings under revolver	23,000			—			—			—			23,000
Payments on revolver	(23,000		)	—			—			—			(23,000		)
Principal payments on term loan	(2,250		)	—			—			—			(2,250		)
Payment of advance from Parent	(50		)	—			—			—			(50		)
Net cash used in by financing activities	(2,300		)	—			—			—			(2,300		)
Effect of exchange rate changes on cash	—			—			(57		)	—			(57		)
Net increase in cash	15,744			—			3,782			—			19,526
Cash at beginning of period	1,477			—			2,729			—			4,206
Cash at end of period	$	17,221		$	—		$	6,511		$	—		$	23,732

Condensed Consolidating Statement of Cash Flows
Nine months ended September 30, 2012

							Combined
				Combined			Non-
				Guarantor			Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) earnings	$	(12,770	)	$	17,618		$	472		$	(18,090	)	$	(12,770	)
Adjustments:
Depreciation and amortization	4,521			29,502			1,066			—			35,089
Share-based compensation	199			—			—			—			199
Deferred income taxes	(2,533		)	(6,456		)	1,375			—			(7,614		)
Equity earnings of subsidiaries, net of taxes	(17,618		)	(472		)	—			18,090			—
Cash effect of changes in:
Accounts receivable	699			(22,124		)	(7,486		)	—			(28,911		)
Inventories	—			(10,583		)	(4,563		)	—			(15,146		)
Prepaid taxes	(26,990		)	23,713			105			—			(3,172		)
Other current assets	(417		)	(481		)	(1,127		)	—			(2,025		)
Book overdraft	(1,987		)	—			—			—			(1,987		)
Accounts payable and accrued liabilities	4,561			11,102			7,799			—			23,462
Due from Clorox	(129		)	11,260			782			—			11,913
Intercompany and other	49,254			(44,987		)	(3,627		)	(402		)	238
Net cash (used in) provided by operating activities	(3,210		)	8,092			(5,204		)	(402		)	(724		)
Cash flows from investing activities:
Capital expenditures	(3,110		)	(3,334		)	(274		)	—			(6,718		)
Net cash used in investing activities	(3,110		)	(3,334		)	(274		)	—			(6,718		)
Cash flows from financing activities:
Borrowings under revolver	46,001			—			—			—			46,001
Payments on revolver	(33,000		)	—			—			—			(33,000		)
Principal payments on term loan	(2,250		)	—			—			—			(2,250		)
Payments on advance from Parent	(350		)	—			—			—			(350		)
Net cash provided by financing activities	10,401			—			—			—			10,401
Effect of exchange rate on cash	603			(4,758		)	3,834			402			81
Net increase (decrease) in cash	4,684			—			(1,644		)	—			3,040
Cash at beginning of period	—			—			4,935			—			4,935
Cash at end of period	$	4,684		$	—		$	3,291		$	—		$	7,975

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Inventories

9 Months Ended

Sep. 30, 2013

Inventories

Inventories

Note 2 — Inventories

Inventories consisted of the following (in thousands):

	September 30, 2013			December 31, 2012
Finished goods	$	30,225		$	33,386
Raw materials and packaging	9,118			11,087
Allowances for obsolescence	(2,260		)	(2,029		)
	$	37,083		$	42,444

XML

The Company and Summary of Significant Accounting Policies (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 item
The Company and Summary of Significant Accounting Policies
Number of most recognizable brands held		2
Number of countries in which the entity has distributor relationships		50
Goodwill and Intangible Assets
Increase in goodwill related to preliminary allocation of purchase price for an acquisition	$ 1.9

XML

Fair Value Measurement of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurement of Assets and Liabilities

Schedule of carrying and fair values of the Company's financial assets and liabilities

The carrying and fair values of the Company’s financial assets and liabilities were as follows (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term loan	$	286,324	$	285,186	$	287,390	$	281,138
Senior notes	267,305		249,728		266,470		233,063

XML

Commitments and Contingencies (Details) (Potential contract claim, Clorox, USD $)	Sep. 30, 2013	Dec. 31, 2012
Potential contract claim | Clorox
Litigation and Other Legal Matters
Percentage of first $5,000,000 in settlement costs agreed to be indemnified and reimbursed	50.00%
Settlement costs as basis for determining settlement costs related to the contract claim to be indemnified and reimbursed	$ 5,000,000
Accrued long-term liabilities related to loss contingency	$ 2,500,000	$ 2,500,000

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Inventories
Finished goods	$ 30,225	$ 33,386
Raw materials and packaging	9,118	11,087
Allowances for obsolescence	(2,260)	(2,029)
Inventory, net	$ 37,083	$ 42,444

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013
Document and Entity Information
Entity Registrant Name	Armored AutoGroup Inc.
Entity Central Index Key	0001537660
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,000
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

XML

Fair Value Measurement of Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Carrying Value
Fair Value Measurement of Assets and Liabilities
Term loan	$ 286,324	$ 287,390
Senior notes	267,305	266,470
Fair Value
Fair Value Measurement of Assets and Liabilities
Term loan	285,186	281,138
Senior notes	$ 249,728	$ 233,063