MADISON, Wis., May 09, 2012 (BUSINESS WIRE) –
Spectrum Brands Holdings, Inc.
/quotes/zigman/1546953/quotes/nls/spb SPB
-1.66%
:
–
Net sales increased 8 percent to $746.3 million in second quarter
of fiscal 2012 versus $693.9 million a year ago
–
Operating income grew 17 percent to $55.2 million in second quarter
of fiscal 2012 versus $47.1 million a year ago
–
Adjusted EBITDA of $101.8 million represented a third consecutive
record second quarter, and was up 9 percent versus prior year
–
Diluted loss per share of $0.56 in fiscal 2012 second quarter
narrowed from diluted loss per share of $0.99 last year, while
adjusted diluted EPS of $0.34 increased 48 percent compared with $0.23
last year
–
Strong liquidity position at end of fiscal 2012 second quarter with
$52 million of cash and approximately $50 million drawn on the $300
million ABL Facility, consistent with normal business seasonality
–
Completed replacement of 12% PIK Notes with 6.75% Notes in second
quarter, which lowered cost of capital, reduced annual cash interest
expense by approximately $10 million, and increased strategic and
financial flexibility to create shareholder value
–
Company reaffirms expectations for fiscal 2012 net sales to grow at
or above the rate of GDP, says fiscal 2012 should generate net income
versus net loss in fiscal 2011, and forecasts adjusted EBITDA to grow
at a higher percentage rate than net sales
–
Company reaffirms fiscal 2012 goal of at least $200 million of net
cash provided from operating activities after purchases of property,
plant and equipment (free cash flow)
–
Company expects to use its strong free cash flow to continue to
reduce debt and delever its balance sheet in the second half of fiscal
2012, resulting in a year-end leverage ratio (total debt to adjusted
EBITDA) of approximately 3.4 times or less, consistent with previous
guidance
–
Company remains on track to deliver $35-$40 million in annual cost
synergies from Russell Hobbs transaction and $10-$15 million in
savings from Global Pet Supplies restructuring, both expected to be
fully realized by the end of fiscal 2012
Spectrum Brands Holdings, Inc.
/quotes/zigman/1546953/quotes/nls/spb SPB
-1.66%
, a global and diversified
consumer products company with market-leading brands, today reported net
sales, operating income and adjusted EBITDA increases of 8, 17 and 9
percent, respectively, in the second quarter of fiscal 2012 versus the
prior year. Diluted loss per share of $0.56 in the second quarter of
fiscal 2012 narrowed from the diluted loss per share of $0.99 reported
last year, while adjusted diluted earnings per share of $0.34, a
non-GAAP measure, increased 48 percent compared with adjusted diluted
earnings per share of $0.23 in fiscal 2011.
With adjusted EBITDA of $101.8 million, the Company recorded its third
consecutive record second quarter of adjusted EBITDA, and reaffirmed its
outlook for improved full-year financial results. EBITDA is a non-GAAP
measurement of profitability which the Company believes is a useful
indicator of the operating health of the business and its trends.
“With the improved second-quarter results reported today, we remain on
target to deliver another year of growth and shareholder value creation
in fiscal 2012,” said Dave Lumley, Chief Executive Officer of Spectrum
Brands Holdings. “Each of our three segments contributed to our solid
performance globally, which was driven by a combination of volume
growth, retail distribution gains, new products, select pricing
initiatives, continued stringent cost and expense control programs, and
successful execution on a number of cost reduction programs.
“Our accretive, bolt-on acquisitions of the Black Flag(R)/TAT(R) brands and
the FURminator(R) pet grooming business completed in late 2011 both
contributed to our higher second-quarter performance,” Mr. Lumley said.
“We are excited about the compelling synergies they bring and their
prospects for accelerating our sales and EBITDA growth for the rest of
this year and beyond.
“During the second quarter, we strengthened our balance sheet, lowered
our cost of capital and increased our strategic and financial
flexibility to create greater shareholder value with the replacement of
our 12% PIK notes with 6.75% senior unsecured notes,” Mr. Lumley said.
“This is a significant step forward in the further improvement and
refinement of our capital structure.
“Our Spectrum Value Model continues to work effectively and resonate
more and more with retailers and consumers worldwide in this prolonged
and challenging environment of sluggish retail activity, tighter retail
inventories, inflationary pressures, and rising commodity and Asian
supply chain costs,” he said. “We believe global consumers are embracing
our ‘same performance for less price’ value brand proposition and are
increasingly open to trial and brand conversion. As a result, we are
generally outperforming our competition and categories, as significant
distribution gains across all of our divisions are driving organic
growth and share increases.
“In short, our Spectrum Value Model is a game changer, delivering
genuine value to the consumer with products that work as well as, or
better than, our competitors for a lower cost,” Mr. Lumley said. “It
also provides higher margins and lower acquisition costs to our retail
customers, along with excellent category management. Importantly, most
of our products are non-discretionary, non-premium-priced, replacement
products that provide value, quality and performance to consumers in
their daily lives.
“As we have pointed out for a number of quarters, major and ongoing
commodity and Asian supply chain cost increases are a headwind,
especially in our appliances business,” he said. “However, we are
offsetting most of these cost pressures with our global new product
development and continuous improvement processes, restructuring and
integration cost synergy programs, retail distribution and share gains,
select pricing actions, and maintenance of stringent expense control
programs.
“As we look to an even stronger second half of the year, we continue to
expect higher net sales, a swing to net income from a net loss, and
improved adjusted EBITDA and free cash flow in fiscal 2012 from organic
growth, our recent acquisitions, and cost savings and expense control
initiatives,” said Mr. Lumley. “We remain excited about Spectrum Brands’
outlook for building an even stronger platform for sustained growth and
value creation.”
Fiscal 2012 Second Quarter Consolidated Financial Results
Spectrum Brands Holdings reported consolidated net sales of $746.3
million for the second quarter of fiscal 2012, an increase of 7.6
percent compared with $693.9 million in the prior year. The Company’s
three segments all reported higher revenues in the second quarter, which
included $14.3 million of net sales from the Black Flag(R)/TAT(R) brands and
FURminator(R) acquisitions completed on November 1, 2011 and December 22,
2011, respectively. Excluding net sales related to acquisitions, net
sales in the second quarter of fiscal 2012 increased 5.5 percent. The
net sales results were negatively impacted by $9.2 million of foreign
exchange.
As a result of increased net sales, the Company’s gross profit in the
second quarter of fiscal 2012 improved to $260.0 million versus $255.4
million in the comparable year-ago period. Gross profit margins
decreased to 34.8 percent in the second quarter from 36.8 percent a year
ago as a result of increases in commodity prices and Asian supply chain
costs, and changes in product mix. Driven by the net sales increase and
a continuation of strong expense controls, operating income in the
second quarter of fiscal 2012 grew 17.2 percent to $55.2 million
compared with $47.1 million last year. Operating income as a percentage
of net sales improved to 7.4 percent versus 6.8 percent in fiscal 2011.
The Company reported a smaller net loss of $28.7 million, or $0.56
diluted loss per share, for the second quarter of fiscal 2012 on average
shares and common stock equivalents outstanding of 51.5 million,
compared with a net loss of $50.2 million, or $0.99 per diluted loss per
share, in the year-ago quarter based upon average shares and common
stock equivalents outstanding of 50.8 million. Included in this year’s
second quarter net loss is additional interest expense of $27 million
principally representing cash tender, call and consent payments and the
write-off of unamortized debt issue costs in connection with the
Company’s replacement of its $245 million 12% senior subordinated toggle
notes (PIK Notes) with $300 million of 6.75% senior unsecured notes.
Adjusted for certain items in both year’s second quarters, which are
presented in Table 3 of this press release and which management believes
are not indicative of the Company’s ongoing normalized operations, the
Company reported adjusted diluted earnings per share of $0.34, a
non-GAAP measure, for the second quarter of fiscal 2012, an increase of
47.8 percent compared with $0.23 last year.
For the third consecutive year, the Company delivered record second
quarter consolidated adjusted EBITDA in fiscal 2012 of $101.8 million, a
9.5 percent increase versus consolidated adjusted EBITDA of $93.0
million in the prior year. The improved adjusted EBITDA was driven by
increases in the Company’s Home and Garden and Global Pet Supplies
segments, which included adjusted EBITDA of $4.7 million from the Black
Flag(R)/TAT(R) brands and FURminator acquisitions. Excluding the
acquisition-related adjusted EBITDA, the Company’s adjusted EBITDA in
the second quarter of fiscal 2012 increased 4.4 percent.
Fiscal 2012 First Half Consolidated Financial Results
The Company reported consolidated GAAP net sales of $1.60 billion for
the first six months of fiscal 2012, a 2.6 percent increase compared
with $1.56 billion for the same period in fiscal 2011. The increase was
the result of net sales increases for all three of the Company’s
segments, which included $15.6 million of net sales from the Black
Flag(R)/TAT(R) brands and FURminator(R) acquisitions mentioned earlier.
Excluding the acquisition-related revenues, net sales in the second
quarter of fiscal 2012 increased 1.6 percent. The net sales results were
negatively impacted by $15.3 million of foreign exchange.
Spectrum Brands’ lower gross profit of $544.1 million in the first half
of fiscal 2012 compared with $554.7 million a year ago was driven by
commodity price and Asian supply chain cost increases and changes in
product mix. Primarily as a result of continued strong expense controls
and cost improvement initiatives, operating income in the first half of
fiscal 2012 improved 19.3 percent to $138.9 million versus $116.4
million a year ago.
The Company reported a lower net loss of $15.6 million, or $0.30 per
diluted loss per share, for the first six months of fiscal 2012 on
average shares and common stock equivalents of 51.8 million, compared
with a net loss of $69.9 million, or $1.38 per diluted loss per share,
in last year’s first half based upon average shares and common stock
equivalents of 50.8 million. Adjusted for certain items in both year’s
first six months, which are presented in Table 3 of this press release
and which management believes are not indicative of the Company’s
ongoing normalized operations, Spectrum Brands generated adjusted
diluted earnings per share of $1.04, a non-GAAP number, for the first
half of fiscal 2012, an increase of 50.7 percent versus adjusted diluted
earnings per share of $0.69 in fiscal 2011′s first half.
Fiscal 2012 first half consolidated adjusted EBITDA was $226.9 million,
an increase of 5.2 percent versus consolidated adjusted EBITDA of $215.7
million for fiscal 2011′s first six months. The Company’s three segments
all reported higher fiscal 2012 first half adjusted EBITDA, led by the
Home and Garden segment. Excluding adjusted EBITDA of $4.9 million from
the Black Flag(R)/TAT(R) brands and FURminator acquisitions in the first six
months of fiscal 2012, consolidated adjusted EBITDA of $222.0 million in
the first half improved 2.9 percent versus the prior-year period.
Foreign exchange had a $1.6 million negative impact on fiscal 2012 first
half adjusted EBITDA.
Fiscal 2012 Second Quarter Segment Level Data
Global Batteries Appliances
The Global Batteries Appliances segment reported fiscal 2012
second-quarter net sales of $480.1 million, an increase of 4.5 percent
versus $459.4 million in the prior year. The improvement was
attributable to higher revenues in the segment’s three categories —
global batteries, global personal care products and small electrical
appliance products. Second quarter 2012 segment sales were negatively
impacted by $8.1 million of foreign exchange.
Global battery sales for the second quarter were $205.1 million, a 3.7
percent increase compared with $197.8 million a year ago. Foreign
exchange negatively impacted these results by $4.6 million. The global
hearing aid battery business achieved its highest net sales ever for a
second quarter. North American battery sales of $82.5 million in the
second quarter grew 2.2 percent versus $80.7 million last year. European
battery sales in the second quarter improved 7.6 percent to $79.0
million versus $73.4 million last year, driven by customer gains,
increased placement with retailers and regional expansion into Eastern
Europe. European battery sales were negatively impacted by $3.4 million
of foreign exchange. Finally, in Latin America, battery sales were $40.9
million for the second quarter, essentially unchanged versus $41.0
million last year. Foreign exchange negatively impacted Latin American
battery sales by $1.2 million.
As a result of higher revenues in North America, Europe and Latin
America, net sales for the global personal care product category
increased 7.0 percent to $115.6 million in the second quarter of fiscal
2012 versus $108.0 million last year. These gains were primarily from a
combination of new products, product line extensions and distribution
gains. Foreign exchange negatively impacted these results by $2.0
million.
The small electrical appliances product category of the Global Batteries
Appliances segment reported net sales in the second quarter of fiscal
2012 of $159.4 million, an increase of 3.8 percent compared with $153.6
million last year. The North America, Europe and Latin America regions
all achieved higher net sales in the quarter. Foreign exchange
negatively impacted the small electrical appliances product category net
sales by $1.5 million.
With segment net income of $35.6 million, the Global Batteries
Appliances segment reported adjusted EBITDA of $57.2 million for the
second quarter of fiscal 2012, essentially unchanged versus adjusted
EBITDA of $57.1 million in the year-earlier quarter, when segment net
income was $35.5 million.
Global Pet Supplies
The Global Pet Supplies segment reported net sales of $156.5 million for
the second quarter of fiscal 2012, an increase of 8.5 percent versus
$144.2 million in the comparable year-ago period. Included in the fiscal
2012 second-quarter net sales were revenues of $8.0 million from
FURminator(R), which was acquired on December 22, 2011. The net sales
improvement also was attributable to higher North American aquatics
revenues, primarily at a major retail customer. Foreign exchange
negatively impacted these results by $1.2 million.
Net income for the segment was $14.8 million for the second quarter of
fiscal 2012 versus $14.4 million in the prior year. Second-quarter
adjusted EBITDA of $26.1 million, including adjusted EBITDA of $2.3
million from the FURminator(R) acquisition, increased 10.6 percent
compared with $23.6 million a year ago.
Home and Garden Business
The Home and Garden segment recorded net sales of $109.7 million for the
second quarter of fiscal 2012, an increase of 21.5 percent compared with
$90.3 million last year. The higher revenues were attributable to
increased retail orders for both lawn and garden and household controls
product sales related to favorable early spring weather, 2012 retail
distribution gains and $6.3 million in revenues from the Black Flag(R) and
TAT(R) brands acquired on November 1, 2011. Second-quarter net sales
typically reflect approximately 20 to 25 percent of full-year net sales.
The segment recorded second-quarter net income of $21.2 million, a 49.3
percent increase compared with $14.2 million in the year-ago quarter. As
a result of the strong retail orders, distribution gains, the Black
Flag(R)/TAT(R) brands acquisition, manufacturing cost improvement
initiatives and operating expense management, the Home and Garden
segment increased its adjusted EBITDA by 41.6 percent to $25.2 million
in the second quarter of 2012 versus $17.8 million last year. The second
quarter of fiscal 2012 marked the 15th consecutive quarter of
year-over-year adjusted EBITDA improvement for the Home and Garden
segment.
Liquidity and Debt Reduction
The Company completed its fiscal 2012 second quarter on April 1, 2012
with a solid liquidity position, including a cash balance of
approximately $52 million and approximately $50 million drawn on its
$300 million ABL Facility, reflecting the normal timing of peak business
seasonality, driven by the Home and Garden segment.
As of the end of the second quarter of fiscal 2012, the Company had
approximately $1,823 million outstanding under its senior credit
facilities, consisting of a senior secured Term Loan of $523 million,
$950 million of 9.5% senior secured notes, $300 million of 6.75% senior
unsecured notes and $50 million under its $300 million ABL working
capital facility. In addition, the Company had approximately $28 million
of letters of credit outstanding.
In the second half of fiscal 2012, the Company expects to use its strong
free cash flow to continue to de-lever its balance sheet, resulting in a
forecasted year-end total leverage ratio (total debt to adjusted EBITDA)
of approximately 3.4 times or less, consistent with previous guidance.
6.75% Notes
During the second quarter of fiscal 2012, the Company replaced its $245
million of 12% senior subordinated toggle notes (PIK Notes) due 2019
with $300 million of 6.75% senior unsecured notes due 2020, which will
result in a lower cost of capital and further improvement to the
Company’s capital structure. In addition, the replacement will reduce
annual cash interest expense by approximately $10 million while
significantly improving the Company’s flexibility to create shareholder
value.
Expenses related to the replacement of the 12% PIK Notes totaled $27
million, which is included as part of interest expense, and consisted of
(i) $24 million of cash tender and consent payments, (ii) $1 million of
cash call and prepaid interest payments, and (iii) $2 million related to
the write off of unamortized debt issuance costs and premium.
Fiscal 2012 Outlook
The Company continues to expect fiscal 2012 net sales to increase at or
above the rate of GDP. The Company further expects to report net income
for fiscal 2012 versus a net loss in fiscal 2011, with fiscal 2012
adjusted EBITDA expected to grow at a higher percentage rate than net
sales. The Company also reaffirms its fiscal 2012 goal of at least $200
million of free cash flow. Capital expenditures are projected to
approximate $45 million in fiscal 2012.
Conference Call/Webcast Scheduled for 9:00 AM Eastern Time Today
The Company will host an earnings conference call and webcast at 9:00
a.m. Eastern Time today, May 9. To access the live conference call, U.S.
participants may call 877-556-5260 and international participants may
call 973-532-4903. The conference ID number is 69903754. A telephone
replay of the conference call will be available through Friday, May 25.
To access this replay, participants may call 855-859-2056 and use the
same conference ID number.
The live audio webcast and replay is available by visiting the Investor
Relations home page on the Company’s website at
www.spectrumbrands.com .
About Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings, Inc., a member of the Russell 2000 Index,
is a diversified, global consumer products company and a leading
supplier of batteries, shaving and grooming products, personal care
products, small household appliances, specialty pet supplies, lawn
garden and home pest control products, personal insect repellents and
portable lighting. Helping to meet the needs of consumers worldwide, our
Company offers a broad portfolio of market-leading, well-known and
widely trusted brands including Rayovac(R), Remington(R), Varta(R), George
Foreman(R), Farberware(R), Black Decker(R), Russell Hobbs(R), Toastmaster(R),
Tetra(R), Marineland(R), Nature’s Miracle(R), Dingo(R), 8-in-1(R), FURminator(R),
Littermaid(R), Spectracide(R), Cutter(R), Repel(R), Hot Shot(R) and Black Flag(R).
Spectrum Brands Holdings’ products are sold by the world’s top 25
retailers and are available in more than one million stores in
approximately 120 countries. With 6,000 employees in 43 countries,
Spectrum Brands Holdings reported fiscal 2011 net sales of approximately
$3.2 billion. For more information, visit
www.spectrumbrands.com .
Non-GAAP Measurements
Management believes that certain non-GAAP financial measures may be
useful in certain instances to provide additional meaningful comparisons
between current results and results in prior operating periods. Excluding
the impact of currency exchange rate fluctuations may provide additional
meaningful information about underlying business trends. In
addition, within this release, including the tables attached hereto,
reference is made to adjusted diluted earnings per share and adjusted
earnings before interest, taxes, depreciation and amortization (EBITDA).
See attached Table 3, “Reconciliation of GAAP to Adjusted Diluted
Earnings Per Share,” for a complete reconciliation of diluted earnings
(loss) per share on a GAAP basis to adjusted earnings (loss) per share
and see attached Table 4, “Reconciliation of GAAP Net Income (Loss) to
Adjusted EBITDA,” for a reconciliation of GAAP Net Income (Loss) to
adjusted EBITDA for the three months and six months ended April 1, 2012
versus the three months and six months ended April 3, 2011. See
attached Table 5, “Reconciliation of Forecasted Cash Flow from Operating
Activities to Forecasted Free Cash Flow,” for a reconciliation of Net
Cash provided from Operating Activities to Forecasted Free Cash Flow for
the twelve months ending September 30, 2012. Adjusted EBITDA is a metric
used by management and frequently used by the financial community which
provides insight into an organization’s operating trends and facilitates
comparisons between peer companies, since interest, taxes, depreciation
and amortization can differ greatly between organizations as a result of
differing capital structures and tax strategies. Adjusted EBITDA also
can be a useful measure of a company’s ability to service debt and is
one of the measures used for determining the Company’s debt covenant
compliance. Adjusted EBITDA excludes certain items that are
unusual in nature or not comparable from period to period. In
addition, the Company’s management uses adjusted diluted earnings per
share as one means of analyzing the Company’s current and future
financial performance and identifying trends in its financial condition
and results of operations. Management believes that adjusted
diluted earnings per share is a useful measure for providing further
insight into our operating performance because it eliminates the effects
of certain items that are not comparable from one period to the next.
The Company’s management believes that free cash flow is useful to
both management and investors in their analysis of the Company’s ability
to service and repay its debt and meet its working capital requirements.
Free cash flow should not be considered in isolation or as a
substitute for pretax income (loss), net income (loss), cash provided by
(used in) operating activities or other statement of operations or cash
flow statement data prepared in accordance with GAAP or as a measure of
profitability or liquidity. In addition, the calculation of free
cash flow does not reflect cash used to service debt and therefore, does
not reflect funds available for investment or discretionary uses. The
Company provides this information to investors to assist in comparisons
of past, present and future operating results and to assist in
highlighting the results of on-going operations. While the
Company’s management believes that non-GAAP measurements are useful
supplemental information, such adjusted results are not intended to
replace the Company’s GAAP financial results and should be read in
conjunction with those GAAP results.
Forward-Looking Statements
Certain matters discussed in this news release and other oral and
written statements by representatives of the Company regarding matters
such as the Company’s ability to meet its expectations for its fiscal
2012 (including its ability to increase its net sales, adjusted EBITDA
and free cash flow and reduce its cumulative debt), may be
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. We have tried, whenever possible, to
identify these statements by using words like “future,” “anticipate”,
“intend,” “plan,” “estimate,” “believe,” “expect,” “project,”
“forecast,” “could,” “would,” “should,” “will,” “may,” and similar
expressions of future intent or the negative of such terms. These
statements are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those anticipated as of
the date of this release. Actual results may differ materially as
a result of (1) Spectrum Brands Holdings’ ability to manage and
otherwise comply with its covenants with respect to its significant
outstanding indebtedness, (2) our ability to integrate, and to realize
synergies from, the combined businesses of Spectrum Brands and Russell
Hobbs, (3) risks of changes and developments in external competitive
market factors, such as introduction of new product features or
technological developments, the entry of new competitors or competitive
brands or increases in competitive promotional activity or spending, (4)
changes in consumer demand for the various types of products Spectrum
Brands Holdings offers, (5) unfavorable developments in the global
credit markets, (6) the impact of overall economic conditions on
consumer spending, (7) fluctuations in commodities prices, the costs or
availability of raw materials or terms and conditions available from
suppliers, (8) changes in the general economic conditions in countries
and regions where Spectrum Brands Holdings does business, such as stock
market prices, interest rates, currency exchange rates, inflation and
consumer spending, (9) Spectrum Brands Holdings’ ability to successfully
implement manufacturing, distribution and other cost efficiencies and to
continue to benefit from its cost-cutting initiatives, (10) Spectrum
Brands Holdings’ ability to identify, develop and retain key employees,
(11) unfavorable weather conditions and various other risks and
uncertainties, including those discussed herein and those set forth in
the securities filings of Spectrum Brands Holdings, Inc., including its
most recently filed Annual Report on Form 10-K or Quarterly Reports on
Form 10-Q.
Spectrum Brands Holdings also cautions the reader that its estimates
of trends, market share, retail consumption of its products and reasons
for changes in such consumption are based solely on limited data
available to Spectrum Brands Holdings and management’s reasonable
assumptions about market conditions, and consequently may be inaccurate,
or may not reflect significant segments of the retail market. Spectrum
Brands Holdings also cautions the reader that undue reliance should not
be placed on any forward-looking statements, which speak only as of the
date of this release. Spectrum Brands Holdings undertakes no duty
or responsibility to update any of these forward-looking statements to
reflect events or circumstances after the date of this report or to
reflect actual outcomes.
Table 1
SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Operations
For the three and six months ended April 1, 2012 and April 3, 2011
(Unaudited)
($ in millions, except per share amounts)
THREE MONTHS SIX MONTHS
------------------------------------ ----------------------------------------
F2012 F2011 INC(DEC) F2012 F2011 INC(DEC)
------------ ------------ -------------- --------------
% %
Net sales $ 746.3 $ 693.9 7.6 % $ 1,595.1 $ 1,554.9 2.6 %
Cost of goods sold 484.6 436.4 1,044.7 997.6
Restructuring and related charges 1.7 2.1 6.3 2.6
----- ----- ------- -------
Gross profit 260.0 255.4 1.8 % 544.1 554.7 -1.9 %
Selling 129.9 130.3 261.7 270.6
General and administrative 56.5 58.5 107.2 119.2
Research and development 8.0 8.8 15.2 16.4
Acquisition and integration related charges 7.8 7.6 15.4 24.0
Restructuring and related charges 2.6 3.1 5.7 8.1
----- ----- ------- -------
Total operating expenses 204.8 208.3 405.2 438.3
Operating income 55.2 47.1 138.9 116.4
Interest expense 69.3 72.4 110.4 125.5
Other (income) expense, net (2.2) (0.3) - 0.6
----- -- ----- -- ------- -------
(Loss) income from continuing operations before income taxes (11.9) (25.0) 28.5 (9.7)
Income tax expense 16.8 25.2 44.1 60.2
----- ----- ------- -------
Net loss $ (28.7) $ (50.2) $ (15.6) $ (69.9)
== ===== == == ===== == == ======= == == ======= ==
Average shares outstanding (a) 51.5 50.8 51.8 50.8
Basic loss per share $ (0.56) $ (0.99) $ (0.30) $ (1.38)
Average shares and common stock equivalents outstanding (a) (b) 51.5 50.8 51.8 50.8
Diluted loss per share $ (0.56) $ (0.99) $ (0.30) $ (1.38)
(a) Per share figures calculated prior to rounding.
(b) For the three and six months ended April 1, 2012 and April 3,
2011, we have not assumed the exercise of common stock equivalents
as the impact would be antidilutive.
Table 2
SPECTRUM BRANDS HOLDINGS, INC.
Supplemental Financial Data
For the three and six months ended April 1, 2012 and April 3, 2011
(Unaudited)
($ in millions)
Supplemental Financial Data F2012 F2011
------------------------------------------------------------------- ------------------ ------------------
Cash $ 51.8 $ 73.1
Trade receivables, net $ 370.2 $ 362.7
Days Sales Outstanding (a) 40 43
Inventory, net $ 551.0 $ 561.0
Inventory Turnover (b) 4.0 3.7
Total debt $ 1,882.1 $ 1,825.1
THREE MONTHS SIX MONTHS
------------------------------------- --------------------------------
Supplemental Cash Flow Data F2012 F2011 F2012 F2011
------------------------------------------------------------------- ------------------ ------------------ ------------- ------------------
Depreciation and amortization, excluding amortization of debt
issuance costs $ 32.3 $ 33.9 $ 60.6 $ 66.2
Capital expenditures $ 9.7 $ 10.6 $ 18.6 $ 18.7
THREE MONTHS SIX MONTHS
------------------------------------- --------------------------------
Supplemental Segment Sales Profitability F2012 F2011 F2012 F2011
------------------------------------------------------------------- ------------------ ------------------ ------------- ------------------
Net Sales
-------------------------------------------------------------------
Global Batteries Appliances $ 480.1 $ 459.4 $ 1,169.3 $ 1,155.9
Global Pet Supplies 156.5 144.2 291.5 281.3
Home and Garden 109.7 90.3 134.3 117.7
------- ------- ------- -------
Total net sales $ 746.3 $ 693.9 $ 1,595.1 $ 1,554.9
==== ======= ==== ======= ==== ======= ==== =======
Segment Profit
-------------------------------------------------------------------
Global Batteries Appliances $ 40.4 $ 41.7 $ 138.6 $ 135.0
Global Pet Supplies 19.3 18.5 35.3 34.7
Home and Garden 22.2 14.9 16.3 8.1
------- ------- ------- -------
Total segment profit 81.9 75.1 190.2 177.8
Corporate 14.6 15.2 23.9 26.7
Acquisition and integration related charges 7.8 7.6 15.4 24.0
Restructuring and related charges 4.3 5.2 12.0 10.7
Interest expense 69.3 72.4 110.4 125.5
Other (income) expense, net (2.2) (0.3) - 0.6
------- ---- ------- ---- ------- -------
(Loss) income from continuing operations before income taxes $ (11.9) $ (25.0) $ 28.5 $ (9.7)
(a) Reflects actual days sales outstanding at end of period.
(b) Reflects cost of sales (excluding restructuring and related
charges) during the last twelve months divided by inventory as of
the end of the period.
Table 3
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of GAAP to Adjusted Diluted Earnings Per Share
For the three and six months ended April 1, 2012 and April 3, 2011
(Unaudited)
THREE MONTHS SIX MONTHS
-------------------------------- --------------------------------
F2012 F2011 F2012 F2011
-------------- -------------- -------------- --------------
Diluted loss per share, as reported $ (0.56) $ (0.99) $ (0.30) $ (1.38)
Adjustments, net of tax:
Acquisition and integration related charges 0.10 (a) 0.10 (b) 0.19 (a) 0.31 (b)
Restructuring and related charges 0.06 (c) 0.07 (d) 0.15 (c) 0.14 (d)
Debt Refinancing Costs 0.34 (e) 0.38 (f) 0.34 (e) 0.38 (f)
Income taxes 0.40 (g) 0.67 (h) 0.66 (g) 1.24 (h)
----- --- ----- ----- --- -----
0.90 1.22 1.34 2.07
Adjusted diluted earnings per share $ 0.34 $ 0.23 $ 1.04 $ 0.69
=== ===== === ===== === ===== === =====
(a) For the three months ended April 1, 2012, reflects $5.0 million,
net of tax, of Acquisition and integration related charges. The
merger with Russell Hobbs accounted for $3.2 million of the charges
while the acquisition of FURminator and Black flag accounted for
$1.8 million. For the six months ended April 1, 2012, reflects $10.0
million, net of tax, of Acquisition and integration related charges.
The merger with Russell Hobbs accounted for $5.6 million of the
charges while the acquisition of FURminator and Black flag accounted
for $4.4 million. These costs were primarily integration related
costs.
(b) For the three and six months ended April 3, 2011, reflects $4.9
million, net of tax, and $15.6 million, net of tax, respectively, of
Acquisition and integration related charges related to the merger
with Russell Hobbs. The costs consisted of integration costs and
legal and professional fees.
(c) For the three and six months ended April 1, 2012, reflects $2.8
million, net of tax, and $7.8 million, net of tax, respectively, of
Restructuring and related charges which is primarily a result of
charges related to the Global Cost Reduction Initiatives announced
in Fiscal 2009.
(d) For the three and six months ended April 3, 2011, reflects $3.3
million, net of tax, and $6.9 million, net of tax, respectively, of
Restructuring and related charges which is primarily a result of
charges related to the Global Cost Reduction Initiatives announced
in Fiscal 2009.
(e) For the three and six months ended April 1, 2012, reflects $17.9
million, net of tax, related to debt financing costs and the write
off of unamortized debt issuance costs in connection with the
replacement of the Company's 12% Notes during the fiscal quarter
ended April 1, 2012.
(f) For the three and six months ended April 3, 2011, reflects $19.1
million, net of tax, related to the write off of unamortized debt
financing costs and original issue discount in connection with the
refinancing of the Company's Term Loan during the quarter ended
April 3, 2011.
(g) For the three and six months ended April 1, 2012, reflects
adjustments to income tax expense of $21.0 million and $34.2
million, respectively, to exclude the impact of the valuation
allowance against deferred taxes and other tax related items in
order to reflect a normalized ongoing effective tax rate.
(h) For the three and six months ended April 3, 2011, reflects
adjustments to income tax expense of $33.9 million and $63.6
million, respectively, to exclude the impact of the valuation
allowance against deferred taxes and other tax related items in
order to reflect a normalized ongoing effective tax rate.
Table 4
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
for the three months ended April 1, 2012
(Unaudited)
($ in millions)
Global Batteries Global Pet Supplies Home Garden Corporate Unallocated Items (a) Consolidated
Appliances Spectrum Brands
Holdings,
Inc.
------------------ ------------------ ------------ ----------- ------------------- -------------
Net income (loss), as adjusted (a) $ 35.6 $ 14.8 $ 21.2 $ (14.0) $ (86.1) $ (28.7)
Income tax expense - - - - 16.8 16.8
Interest expense - - - - 69.3 69.3
Restructuring and related charges 1.2 2.3 0.6 0.1 - 4.3
Acquisition and integration related charges 5.0 1.9 0.4 0.5 - 7.8
--------- --------- ------ ----- ------- -----
Adjusted EBIT 41.8 19.0 22.2 (13.4) - 69.5
Depreciation and amortization 15.4 7.1 3.0 6.8 - 32.3
--------- --------- ------ ----- ------- -----
EBITDA $ 57.2 $ 26.1 $ 25.2 $ (6.6) $ - $ 101.8
========= ========= ========= ========= ====== ====== === ===== === ======= ======= ===== =====
Note: Amounts calculated prior to rounding
(a) It is the Company's policy to record Income tax expense and
Interest expense on a consolidated basis. Accordingly, such amounts
are not reflected in the operating results of the operating segments.
Table 4
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
for the six months ended April 1, 2012
(Unaudited)
($ in millions)
Global Batteries Global Pet Supplies Home Garden Corporate Unallocated Items (a) Consolidated
Appliances Spectrum Brands
Holdings,
Inc.
------------------ ------------------ ------------ ----------- ------------------- -------------
Net income (loss), as adjusted (a) $ 125.6 $ 27.9 $ 14.8 $ (29.3) $ (154.5) $ (15.6)
Income tax expense - - - - 44.1 44.1
Interest expense - - - - 110.4 110.4
Restructuring and related charges 5.1 5.2 1.0 0.7 - 12.0
Acquisition and integration related charges 8.2 1.9 0.5 4.7 - 15.4
--------- --------- ------ ----- ------- -----
Adjusted EBIT 138.9 35.0 16.3 (23.9) - 166.3
Depreciation and Amortization 30.5 13.1 5.8 11.3 - 60.6
--------- --------- ------ ----- ------- -----
EBITDA $ 169.4 $ 48.1 $ 22.1 $ (12.6) $ - $ 226.9
========= ========= ========= ========= ====== ====== === ===== === ======= ======= ===== =====
Note: Amounts calculated prior to rounding
(a) It is the Company's policy to record Income tax expense and
Interest expense on a consolidated basis. Accordingly, such amounts
are not reflected in the operating results of the operating segments.
Table 4
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
for the three months ended April 3, 2011
(Unaudited)
($ in millions)
Global Batteries Global Pet Supplies Home Garden Corporate Unallocated Items (a) Consolidated
Appliances Spectrum Brands
Holdings,
Inc.
---------------- ------------------ ------------ ----------- ------------------- -------------
Net income (loss), as adjusted (a) $ 35.5 $ 14.4 $ 14.2 $ (16.8) $ (97.6) $ (50.2)
Income tax expense - - - - 25.2 25.2
Interest expense - - - - 72.4 72.4
Restructuring and related charges 0.7 3.1 0.7 0.6 - 5.2
Acquisition and integration related charges 5.3 0.3 - 2.0 - 7.6
Add back accelerated depreciation (b) (1.0) (1.0)
------ ---- ----- ---
Adjusted EBIT 40.6 17.8 14.9 (14.2) - 59.1
Depreciation and amortization 16.5 5.8 2.9 8.7 - 33.9
------ --------- ------ ----- ------- -----
EBITDA $ 57.1 $ 23.6 $ 17.8 $ (5.5) $ - $ 93.0
====== ====== ========= ========= ====== ====== === ===== === ======= ======= ===== =====
Note: Amounts calculated prior to rounding
(a) It is the Company's policy to record Income tax expense and
Interest expense on a consolidated basis. Accordingly, such amounts
are not reflected in the operating results of the operating segments.
(b) Adjustment reflects accelerated depreciation associated with
certain restructuring initiatives. Inasmuch as this amount is
included within Restructuring and related charges, this adjustment
negates the impact of reflecting the add back of depreciation.
Table 4
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
for the six months ended April 3, 2011
(Unaudited)
($ in millions)
Global Batteries Global Pet Supplies Home Garden Corporate Unallocated Items (a) Consolidated
Appliances Spectrum Brands
Holdings,
Inc.
---------------- ------------------ ------------ ----------- ------------------- -------------
Net income (loss), as adjusted (a) $ 115.0 $ 27.8 $ 6.8 $ (33.8) $ (185.8) $ (69.9)
Income tax expense - - - - 60.2 60.2
Interest expense - - - - 125.5 125.5
Restructuring and related charges 0.6 6.1 1.3 2.6 - 10.7
Acquisition and integration related charges 19.3 0.4 - 4.3 - 24.0
Add back accelerated depreciation (b) (1.0) - - - - (1.0)
------ ---- --------- ------ ----- ------- ----- ---
Adjusted EBIT 133.9 34.3 8.1 (26.8) - 149.5
Depreciation and amortization 33.9 11.8 6.3 14.3 - 66.2
------ --------- ------ ----- ------- -----
EBITDA $ 167.8 $ 46.1 $ 14.4 $ (12.5) $ - $ 215.7
====== ====== ========= ========= ====== ====== === ===== === ======= ======= ===== =====
Note: Amounts calculated prior to rounding
(a) It is the Company's policy to record Income tax expense and
Interest expense on a consolidated basis. Accordingly, such amounts
are not reflected in the operating results of the operating segments.
(b) Adjustment reflects accelerated depreciation associated with
certain restructuring initiatives. Inasmuch as this amount is
included within Restructuring and related charges, this adjustment
negates the impact of reflecting the add back of depreciation.
Table 5
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of Forecasted Cash Flow from Operating Activities
to Forecasted Free Cash Flow
for the twelve months ending September 30, 2012
(Unaudited)
($ millions)
Net Cash provided from Operating Activities $245
Purchases of property, plant and equipment (45)
-------------------
Free Cash Flow $200
===================
SOURCE: Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings, Inc.
Investor/Media Contact:
Dave Prichard, 608-278-6141
Copyright Business Wire 2012
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