Spectrum Brands Holdings, Inc. (NYSE: SPB), a global and diversified
consumer products company with market-leading brands, today reported
record fiscal 2013 third quarter results for the period ended June 30,
2013.
The Company reaffirmed its outlook for a fourth consecutive year of
record profitability for its legacy business, including expectations for
net sales and profit growth in the fourth quarter of fiscal 2013.
Spectrum Brands estimated higher fiscal 2013 total Company net sales of
$4,060 million to $4,100 million and adjusted EBITDA of $640 million to
$650 million versus the comparable prior year period.
Separately, the Company announced plans to refinance its $950 million of
9.5 percent senior secured notes due 2018, which is expected to result
in a lower cost of capital and reduced cash interest expense. The
Company also announced the approval by its Board of Directors for a new
$200 million common stock repurchase program, effective for 24 months.
The Company also said it had completed $100 million of term debt
reduction to date and reaffirmed its program to significantly reduce
debt and delever its balance sheet.
Third Quarter Fiscal 2013 Results Highlights:
-
Net sales of $1.09 billion, including the HHI acquisition,
increased 32.1 percent in third quarter of fiscal 2013 versus $824.8
million a year ago; including HHI in last year’s fiscal third quarter
on a pro forma basis, net sales increased 1.1 percent.
-
HHI delivered improved quarter-over-quarter results in second full
quarter since its acquisition on December 17, 2012.
-
Net income of $36.1 million and diluted income per share of $0.69
in third quarter of fiscal 2013 decreased versus net income of $58.7
million and diluted income per share of $1.13 in the third quarter of
fiscal 2012, primarily due to increased interest expense attributable
to the HHI acquisition, a $20 million swing to a tax expense from a
tax benefit, higher non-cash stock compensation expense and higher
restructuring and related charges.
-
Adjusted diluted earnings per share, a non-GAAP measure, of $0.90
in the third quarter of fiscal 2013 declined from $1.12 last year,
including HHI in the prior year period on a pro forma basis, due to an
increase in non-cash stock compensation expense driven by employee
stock-based award programs.
-
Adjusted EBITDA, a non-GAAP measure, of $188.5 million in third
quarter of fiscal 2013 increased 1.9 percent compared to $185.0
million a year ago, including HHI in the prior year period on a pro
forma basis; excluding the negative impact of foreign exchange,
adjusted EBITDA in the third quarter increased 3.0 percent.
-
Adjusted EBITDA margin, a non-GAAP measure, in third quarter of
fiscal 2013 of 17.3 percent was higher compared to 17.2 percent in the
prior year, including HHI in the prior year period on a pro forma
basis; adjusted EBITDA margin for legacy business of 16.8 percent
reached all-time record quarterly level.
-
Legacy Spectrum Brands, which excludes the HHI business, reported
adjusted EBITDA of $135.5 million in the third quarter of fiscal 2013,
which represented the 11th consecutive
quarter of year-over-year adjusted EBITDA growth; excluding the
negative impact of foreign exchange, legacy Spectrum Brands’ adjusted
EBITDA grew 3.9 percent versus $132.5 million in the year-ago quarter.
-
Company estimates increased net sales and adjusted EBITDA in the
fourth quarter as compared to last year, including HHI in the prior
year period on a pro forma basis; legacy business net sales and
adjusted EBITDA in fourth quarter also expected to increase.
-
Company estimates higher total Company fiscal 2013 net sales of
$4,060 million to $4,100 million and adjusted EBITDA of $640 million
to $650 million versus the comparable prior year period.
-
Fiscal 2013 net cash provided from operating activities after
purchases of property, plant and equipment (free cash flow) expected
to be at least $240 million, net of HHI acquisition costs.
-
Company on schedule to use its strong free cash flow, enhanced by
the HHI acquisition, to reduce debt by approximately $200 million and
delever its balance sheet in the fourth quarter of fiscal 2013,
consistent with the seasonality of its cash flows.
“We’re pleased to report record net sales and adjusted EBITDA for the
third quarter,” said Dave Lumley, Chief Executive Officer of Spectrum
Brands Holdings. “HHI, our new acquisition, posted another quarter of
double-digit net sales growth at 13 percent. Our third quarter adjusted
EBITDA of $188.5 million, including HHI, increased 2 percent, or 3
percent on a constant currency basis, with an adjusted EBITDA margin at
a solid 17.3 percent.
“Of particular note is our 11th consecutive quarter of
year-over-year adjusted EBITDA growth for legacy Spectrum Brands, a
record that dates to the first quarter of fiscal 2011,” Mr. Lumley said.
“Focused spending, strong control of variable costs, increased savings
from continuous improvement programs across all divisions globally, and
growth in Europe helped the legacy business offset negative foreign
currency impacts and difficult macro-economic conditions to deliver a
2.3 percent increase in adjusted EBITDA, and 3.9 percent on a constant
currency basis. Legacy Spectrum Brands’ adjusted EBITDA margin in the
third quarter also grew to a record quarterly level of 16.8 percent.
“It is important to note that this record quarterly profitability and
margin performance was achieved even as we continue to make important,
timely and major investments in Remington personal care consumables,
global e-commerce, battery performance and production, and HHI new
product development and marketing, all of which will help drive future
growth.
“We expect to finish this year on a strong note and are projecting
higher net sales and adjusted EBITDA for both the fourth quarter and for
fiscal 2013 versus comparable prior year periods,” Mr. Lumley said.
“Helping to drive the improved performance will be increased store
traffic and optimism for value-branded sales in the back-to-school
season time frame, new products launching across all divisions, key
distribution gains taking hold, select new retailer business, continuing
geographic expansion and an increasing level of cost reductions.
“We announced other very important news this morning,” Mr. Lumley said.
“We plan to refinance our $950 million of 9.5 percent senior secured
notes due 2018 and our Board of Directors has approved a new $200
million common stock repurchase program, effective for 24 months. We
also announced $100 million of term debt reduction to date and
reaffirmed our program to significantly reduce debt and delever our
balance sheet.
“We remain committed to creating greater shareholder value,” he
continued, “with a focus on growing our adjusted EBITDA, aggressively
paying down debt and deleveraging, and maximizing sustainable free cash
flow.”
Fiscal 2013 Third Quarter Consolidated Financial Results
Spectrum Brands Holdings reported consolidated net sales of $1.09
billion for the third quarter of fiscal 2013, an increase of 32.1
percent compared to $824.8 million for the same period in fiscal 2012.
The increase was the result of the HHI acquisition completed on December
17, 2012. The net sales results were negatively impacted by $3.2 million
of foreign exchange. Including the prior year’s third quarter results
for HHI, net sales of $1.09 billion in the third quarter of fiscal 2013
increased 1.1 percent compared to the year-ago quarter.
Excluding HHI, net sales for legacy Spectrum Brands of $804.6 million in
the third quarter of fiscal 2013 decreased 2.5 percent versus $824.8
million in the prior-year quarter. The sales decline was entirely
attributable to the planned and continuing exit of low-margin promotions
in North America small appliances which totaled approximately $10
million and a $10 million decline in Home and Garden segment revenues
due to timing as the very late arrival of warm, dry weather delayed the
start of the spring selling season, pushing revenues into July.
Gross profit and gross profit margin for Spectrum Brands for the third
quarter of fiscal 2013 of $382.7 million and 35.1 percent, respectively,
compared to $291.7 million and 35.4 percent last year.
Spectrum Brands reported GAAP net income of $36.1 million, or $0.69
diluted income per share, for the third quarter of fiscal 2013 on
average shares and common stock equivalents outstanding of 52.7 million.
In the third quarter of fiscal 2012, the Company reported net income of
$58.7 million, or $1.13 diluted income per share on average shares and
common stock equivalents outstanding of 51.8 million. Adjusted for
certain items in both years’ third 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
generated adjusted diluted earnings per share of $0.90, a non-GAAP
measure, for the third quarter of fiscal 2013 compared with $1.12 in
last year’s third quarter. The decrease was due to an increase in
non-cash stock compensation expense driven by employee stock-based award
programs.
Adjusted EBITDA, a non-GAAP measure, of $188.5 million in the third
quarter of fiscal 2013 increased 2.0 percent compared to $185.0 million
a year ago, including the acquired HHI business in the prior year period
on a pro forma basis. Adjusted EBITDA as a percentage of net sales was
17.3 percent compared to 17.2 percent in last year’s third quarter.
Legacy Spectrum Brands’ adjusted EBITDA of $135.5 million in the third
quarter of 2013 represented the 11th consecutive quarter of
year-over-year adjusted EBITDA growth, starting with the first quarter
of fiscal 2011. Excluding the negative impact of $2.1 million of foreign
exchange, legacy Spectrum Brands adjusted EBITDA in the third quarter of
2013 increased 3.9 percent versus $132.5 million in the prior year.
Adjusted EBITDA as a percentage of net sales for legacy Spectrum Brands
in the third quarter improved to a record quarterly level of 16.8
percent compared to 16.1 percent last year. Adjusted 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.
Fiscal 2013 Nine Months Consolidated Financial Results
Consolidated net sales of $2.95 billion for the nine months of fiscal
2013 increased 21.8 percent compared with $2.42 billion for the same
period in fiscal 2012. The increase was the result of the HHI
acquisition. Including HHI as if part of the Company in both years’ nine
months, pro forma net sales of $3.14 billion were essentially unchanged
compared with last year.
The Company reported a GAAP net loss of $18.5 million, or $0.36 diluted
loss per share, for the nine months of fiscal 2013 on average shares and
common stock equivalents outstanding of 52.0 million. In the nine months
of fiscal 2012, the Company reported net income of $43.1 million, or
$0.83 diluted income per share, on average shares and common stock
equivalents outstanding of 52.1 million. Adjusted for certain items in
both years’ nine 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, the Company generated adjusted
diluted earnings per share of $2.12, a non-GAAP measure, for the nine
months of fiscal 2013 compared with $2.44 in last year’s nine months.
The decrease was primarily due to an increase in non-cash stock
compensation expense driven by employee stock-based award programs.
Fiscal 2013 nine months consolidated adjusted EBITDA was $492.4 million
compared to consolidated adjusted EBITDA for the nine months of fiscal
2012 of $489.6 million, which includes the results of HHI as if acquired
by Spectrum Brands at the beginning of each nine month period.
Fiscal 2013 Third Quarter Segment Level Data
Global Batteries & Appliances
The Global Batteries & Appliances segment reported fiscal 2013 third
quarter net sales of $491.6 million, a decline of 1.8 percent versus
$500.7 million in the year-ago period. The net sales decline was
primarily attributable to decreased revenues in the small electrical
appliance products category from the planned and continued elimination
of low-margin promotions in North America, which totaled approximately
$10 million. Fiscal 2013 third quarter segment sales were negatively
impacted by $1.5 million of foreign exchange. Excluding the negative
foreign exchange impact, net sales for the segment declined 1.5 percent
quarter-over-quarter.
Global battery sales for the third quarter were $207.3 million, a 1.9
percent decrease compared to $211.3 million for the third quarter of
fiscal 2012. Excluding the negative foreign exchange impact of $0.7
million, global battery sales declined 1.5 percent in the third quarter.
In North America, Rayovac® market share increased quarter-over-quarter,
even as key retailers tightened inventory levels and reorder rates and
aggressive competitor discounting increased. Double-digit sales growth
was achieved in a key, non-Nielsen measured channel. Continued growth in
the European battery business was driven by new retailer
customers and expansion into new channels. The Latin America battery
business was adversely impacted by decreased exports to Venezuela.
Net sales for the global personal care product category of $115.5
million in the third quarter of fiscal 2013 were essentially unchanged
versus $116.3 million in the comparable period last year. Significantly
increased revenues in Europe nearly offset lower net sales in Latin
America and North America predominantly due to a one-time shaving and
grooming category shelf space reduction at a major retailer. Significant
investments continued in the quarter for the global personal care
segment’s consumables business to drive growth in fiscal 2014 and beyond.
The small appliances product category reported net sales in the third
quarter of fiscal 2013 of $168.7 million, a decrease of 2.6 percent
compared to $173.2 million in the third quarter of fiscal 2012. Higher
net sales in Europe and Latin America nearly offset expected lower
revenues in North America, which were attributable to the planned and
continued elimination of low margin promotions totaling nearly $10
million. The elimination of low margin promotions contributed
significantly to a nearly 350 basis point improvement in North American
small appliance gross margins quarter-over-quarter, which followed 330
basis point and 450 basis point improvements in gross margin percentage
from this strategic initiative in the first and second quarters of
fiscal 2013, respectively. Excluding the negative foreign exchange
impact of $0.6 million, net sales for the small appliances product
category decreased 2.2 percent.
With segment net income, as adjusted, of $32.2 million, the Global
Batteries & Appliances segment reported adjusted EBITDA of $58.7 million
for the third quarter of fiscal 2013 compared to adjusted EBITDA of
$61.2 million in the year-earlier quarter, when segment net income was
$40.9 million. Excluding an unfavorable foreign exchange impact of $1.8
million, segment adjusted EBITDA decreased 1.1 percent in this year’s
third quarter.
Global Pet Supplies
The Global Pet Supplies segment reported net sales of $156.4 million for
the third quarter of fiscal 2013 compared to $157.5 million last year.
Increased North America aquatics net sales were offset by lower European
aquatics revenues, while companion animal product net sales were
unchanged. Excluding an unfavorable foreign exchange impact of $1.7
million, net sales were essentially unchanged versus the prior year’s
quarter.
Segment net income, as adjusted, was $24.5 million for the third quarter
of fiscal 2013 versus $18.8 million a year ago. Third quarter adjusted
EBITDA of $33.7 million increased 15.0 percent compared to $29.3 million
in fiscal 2012 as a result of aggressive spending controls and
reductions, an increase in cost improvements and select pricing actions.
The adjusted EBITDA margin as a percentage of net sales improved to 21.5
percent in the third quarter versus 18.6 percent last year. Excluding a
negative foreign exchange impact of $0.9 million, segment adjusted
EBITDA increased 18.1 percent in this year’s third quarter.
Home and Garden
The Home and Garden segment reported third quarter net sales of $156.6
million, a decrease of 6.0 percent compared to record third quarter
revenues of $166.6 million in fiscal 2012. Higher lawn and garden
control sales due to a late start to spring were more than offset by
lower household insect control sales driven by the later arrival of
warmer weather. The Home and Garden segment’s major selling season
occurs in the spring and summer months, primarily April through August
or early September.
The segment recorded fiscal 2013 third quarter net income, as adjusted,
of $42.8 million versus $44.0 million in the prior year’s quarter.
Despite the lower revenues, the Home and Garden segment’s third quarter
adjusted EBITDA of $46.0 million declined only modestly compared to
$47.5 million a year ago. Importantly, however, adjusted EBITDA margin
as a percentage of net sales in the third quarter increased to 29.4
percent versus 28.5 percent last year.
Significantly higher month-over-month POS and retailer orders in July
for household insect control products and outdoor repellents signal a
strong fourth quarter finish to the fiscal year for the Home and Garden
segment.
Hardware & Home Improvement
In its second full quarter since its acquisition by Spectrum Brands on
December 17, 2012, the Hardware & Home Improvement (HHI) segment
recorded net sales of $285.2 million, an increase of 12.7 percent
compared to $253.0 million as if combined with Spectrum Brands in the
year-ago quarter. The revenue growth was driven by double-digit
improvements in HHI’s U.S. residential security and plumbing categories.
The segment recorded net income, as adjusted, of $40.1 million in the
third quarter of fiscal 2013. Adjusted EBITDA in the third quarter of
fiscal 2013 was $53.0 million compared to $52.5 million last year.
Liquidity and Debt Reduction
Spectrum Brands completed the third quarter of fiscal 2013 on June 30,
2013 with a solid liquidity position, including a cash balance of
approximately $99 million and approximately $70 million drawn on its ABL
facility.
As of the end of the third quarter of fiscal 2013, the Company had
approximately $3,230 million of debt outstanding at par, consisting of
its ABL facility of $70 million, a senior secured Term Loan of $757
million, $950 million of 9.5% senior secured notes, $520 million of
6.375% senior unsecured notes, $570 million of 6.625% senior unsecured
notes, $300 million of 6.75% senior unsecured notes and approximately
$63 million of capital leases and other obligations. In addition, the
Company had approximately $38 million of letters of credit outstanding.
The Company has made approximately $100 million of payments through July
on its term debt and expects to make additional term debt payments in
the fourth quarter with its strong free cash flow to reduce term debt by
at least $200 million for the year and delever its balance sheet,
resulting in leverage (total debt to adjusted EBITDA) of approximately
4.4 times or less at the end of fiscal 2013, prior to any impact of the
planned refinancing of its $950 million of 9.5 percent senior secured
notes.
Fiscal 2013 Outlook
Including HHI from its December 17, 2012 acquisition date, Spectrum
Brands expects fiscal 2013 net sales of between $4,060 million and
$4,100 million and adjusted EBITDA of between $640 million and $650
million. Free cash flow, net of HHI acquisition costs, is expected to be
approximately $240 million. Fiscal 2013 capital expenditures are
projected to be approximately $70 million to $80 million.
Conference Call/Webcast Scheduled for 9:00 AM Eastern Time Today
Spectrum Brands will host an earnings conference call and webcast at
9:00 a.m. Eastern Time today, August 6. 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
17711254. A live webcast and related presentation slides will be
available by visiting the Event Calendar page in the Investor Relations
section of Spectrum Brands’ website at www.spectrumbrands.com.
A replay of the live webcast also will be accessible through the Event
Calendar page in the Investor Relations section of the Company’s
website. A telephone replay of the conference call will be available
through Tuesday, August 20. To access this replay, participants may call
855-859-2056 and use the same conference ID number.
About Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings, a member of the Russell 2000 Index, is a
global and diversified consumer products company and a leading supplier
of consumer batteries, residential locksets, residential builders’
hardware, faucets, shaving and grooming products, personal care
products, small household appliances, specialty pet supplies, lawn and
garden and home pest control products, and personal insect repellents.
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®, Kwikset®, Weiser®, Baldwin®, National Hardware®,
Pfister™, Remington®, VARTA®, George Foreman®, Black & Decker®,
Toastmaster®, Farberware®, Tetra®, Marineland®, Nature’s Miracle®,
Dingo®, 8-in-1®, FURminator®, Littermaid®, Spectracide®, Cutter®,
Repel®, Hot Shot® and Black Flag®. Spectrum Brands' products are sold by
the world's top 25 retailers and are available in more than one million
stores in approximately 140 countries. Spectrum Brands Holdings
generated net sales of approximately $3.25 billion in fiscal 2012. On a
pro forma basis following the Company’s December 2012 acquisition of the
Hardware & Home Improvement Group (HHI) from Stanley Black & Decker,
Spectrum Brands had net sales of more than $4 billion for fiscal 2012.
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 diluted 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 nine months ended
June 30, 2013 versus the three months and nine months ended July 1, 2012.
See attached Table 6, “Reconciliation of Forecasted Cash Flow from
Operating Activities to Forecasted Free Cash Flow,” for a reconciliation
of Net Cash provided from Operating Activities to Free Cash Flow for the
twelve months ending September 30, 2013. 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
2013 (including its ability to increase its net sales and adjusted
EBITDA) 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 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 finance,
complete the acquisition of, integrate, and to realize synergies from,
the combined businesses of Spectrum Brands and the Hardware & Home
Improvement Group of Stanley Black & Decker, and from our purchase of 56
percent of the equity of Shaser, Inc., and from other bolt-on
acquisitions, (3) risks related to changes and developments in external
competitive market factors, such as introduction of new product features
or technological developments, development of new competitors or
competitive brands or 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 each of Spectrum Brands Holdings, Inc. and
Spectrum Brands, Inc., including each of their most recently filed
Annual Reports 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 nine months ended June 30, 2013 and July 1, 2012
|
(Unaudited)
|
($ in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
|
|
|
NINE MONTHS
|
|
|
|
F2013
|
|
F2012
|
|
INC
|
|
|
F2013
|
|
F2012
|
|
INC
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
%
|
Net sales
|
|
|
$
|
1,089.8
|
|
$
|
824.8
|
|
|
32.1
|
%
|
|
|
$
|
2,947.8
|
|
|
$
|
2,419.9
|
|
21.8
|
%
|
Cost of goods sold
|
|
|
|
706.1
|
|
|
531.1
|
|
|
|
|
|
|
1,949.3
|
|
|
|
1,575.8
|
|
|
Restructuring and related charges
|
|
|
|
1.0
|
|
|
2.0
|
|
|
|
|
|
|
4.7
|
|
|
|
8.3
|
|
|
Gross profit
|
|
|
|
382.7
|
|
|
291.7
|
|
|
31.2
|
%
|
|
|
|
993.8
|
|
|
|
835.8
|
|
18.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
|
|
165.2
|
|
|
129.9
|
|
|
|
|
|
|
465.0
|
|
|
|
391.5
|
|
|
General and administrative
|
|
|
|
70.4
|
|
|
50.9
|
|
|
|
|
|
|
197.6
|
|
|
|
158.1
|
|
|
Research and development
|
|
|
|
11.5
|
|
|
8.5
|
|
|
|
|
|
|
31.5
|
|
|
|
23.8
|
|
|
Acquisition and integration related charges
|
|
|
|
7.7
|
|
|
5.3
|
|
|
|
|
|
|
40.5
|
|
|
|
20.6
|
|
|
Restructuring and related charges
|
|
|
|
12.2
|
|
|
1.9
|
|
|
|
|
|
|
23.0
|
|
|
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
267.0
|
|
|
196.5
|
|
|
|
|
|
|
757.6
|
|
|
|
601.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
115.7
|
|
|
95.2
|
|
|
|
|
|
|
236.2
|
|
|
|
234.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
61.5
|
|
|
39.7
|
|
|
|
|
|
|
191.8
|
|
|
|
150.1
|
|
|
Other expense, net
|
|
|
|
2.6
|
|
|
2.2
|
|
|
|
|
|
|
7.9
|
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
51.6
|
|
|
53.3
|
|
|
|
|
|
|
36.5
|
|
|
|
81.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
|
|
15.2
|
|
|
(5.4
|
)
|
|
|
|
|
|
54.9
|
|
|
|
38.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
36.4
|
|
|
58.7
|
|
|
|
|
|
|
(18.4
|
)
|
|
|
43.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to non-controlling interest
|
|
|
|
0.3
|
|
|
—
|
|
|
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to controlling interest
|
|
|
$
|
36.1
|
|
$
|
58.7
|
|
|
|
|
|
$
|
(18.5
|
)
|
|
$
|
43.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding (a)
|
|
|
|
52.1
|
|
|
51.3
|
|
|
|
|
|
|
52.0
|
|
|
|
51.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share attributable to controlling interest
|
|
|
$
|
0.69
|
|
$
|
1.14
|
|
|
|
|
|
$
|
(0.36
|
)
|
|
$
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares and common stock equivalents outstanding (a) (b)
|
|
|
|
52.7
|
|
|
51.8
|
|
|
|
|
|
|
52.0
|
|
|
|
52.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share attributable to controlling
interest
|
|
|
$
|
0.69
|
|
$
|
1.13
|
|
|
|
|
|
$
|
(0.36
|
)
|
|
$
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
|
$
|
0.25
|
|
$
|
—
|
|
|
|
|
|
$
|
0.50
|
|
|
$
|
—
|
|
|
(a) Per share figures calculated prior to rounding.
|
|
(b) For the nine months ended June 30, 2013, 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
|
As of and for the three and nine months ended June 30, 2013 and
July 1, 2012
|
(Unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Data
|
|
|
F2013
|
|
F2012
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
99.0
|
|
$
|
62.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net
|
|
|
$
|
479.3
|
|
$
|
342.4
|
|
|
|
|
Days Sales Outstanding (a)
|
|
|
|
39
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
|
|
|
$
|
707.3
|
|
$
|
552.5
|
|
|
|
|
Inventory Turnover (b)
|
|
|
|
4.0
|
|
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
$
|
3,226.1
|
|
$
|
1,827.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
|
|
NINE MONTHS
|
Supplemental Cash Flow Data
|
|
|
F2013
|
|
F2012
|
|
F2013
|
|
F2012
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization, excluding amortization of debt
issuance costs
|
|
|
$
|
54.5
|
|
$
|
30.4
|
|
$
|
132.7
|
|
$
|
91.0
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
$
|
24.5
|
|
$
|
14.5
|
|
$
|
45.2
|
|
$
|
33.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
|
|
NINE MONTHS
|
Supplemental Segment Sales & Profitability
|
|
|
F2013
|
|
F2012
|
|
F2013
|
|
F2012
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
Global Batteries & Appliances
|
|
|
$
|
491.6
|
|
$
|
500.7
|
|
$
|
1,626.2
|
|
$
|
1,670.0
|
Global Pet Supplies
|
|
|
|
156.4
|
|
|
157.5
|
|
|
456.6
|
|
|
449.0
|
Home and Garden
|
|
|
|
156.6
|
|
|
166.6
|
|
|
289.1
|
|
|
300.9
|
Hardware & Home Improvement
|
|
|
|
285.2
|
|
|
—
|
|
|
575.9
|
|
|
—
|
Total net sales
|
|
|
$
|
1,089.8
|
|
$
|
824.8
|
|
$
|
2,947.8
|
|
$
|
2,419.9
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
|
|
Global Batteries & Appliances
|
|
|
$
|
44.9
|
|
$
|
47.1
|
|
$
|
181.7
|
|
$
|
185.7
|
Global Pet Supplies
|
|
|
|
26.5
|
|
|
22.5
|
|
|
62.8
|
|
|
57.8
|
Home and Garden
|
|
|
|
43.1
|
|
|
44.2
|
|
|
59.6
|
|
|
60.5
|
Hardware & Home Improvement
|
|
|
|
43.0
|
|
|
—
|
|
|
46.5
|
|
|
—
|
Total segment profit
|
|
|
|
157.5
|
|
|
113.8
|
|
|
350.6
|
|
|
304.0
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
20.9
|
|
|
9.4
|
|
|
46.2
|
|
|
33.3
|
Acquisition and integration related charges
|
|
|
|
7.7
|
|
|
5.3
|
|
|
40.5
|
|
|
20.6
|
Restructuring and related charges
|
|
|
|
13.2
|
|
|
3.9
|
|
|
27.7
|
|
|
15.9
|
Interest expense
|
|
|
|
61.5
|
|
|
39.7
|
|
|
191.8
|
|
|
150.1
|
Other expense, net
|
|
|
|
2.6
|
|
|
2.2
|
|
|
7.9
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
$
|
51.6
|
|
$
|
53.3
|
|
$
|
36.5
|
|
$
|
81.9
|
(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 average inventory
during the period.
|
|
Table 3
|
SPECTRUM BRANDS HOLDINGS, INC.
|
Reconciliation of GAAP Diluted Income (Loss) Per Share to
Adjusted Diluted Earnings Per Share
|
For the three and nine months ended June 30, 2013 and July 1, 2012
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
|
|
|
|
NINE MONTHS
|
|
|
|
|
|
F2013
|
|
F2012
|
|
|
|
F2013
|
|
F2012
|
|
|
Diluted loss per share, as reported
|
|
|
$
|
0.69
|
|
|
$
|
1.13
|
|
|
|
|
$
|
(0.36
|
)
|
|
$
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-acquisition earnings of HHI
|
|
|
|
—
|
|
|
|
0.33
|
|
(a)
|
|
|
|
0.06
|
|
(a)
|
|
0.62
|
|
(a)
|
Acquisition and integration related charges
|
|
|
|
0.10
|
|
(b)
|
|
0.07
|
|
(d)
|
|
|
|
0.50
|
|
(c)
|
|
0.26
|
|
(e)
|
Restructuring and related charges
|
|
|
|
0.16
|
|
(f)
|
|
0.05
|
|
(g)
|
|
|
|
0.34
|
|
(f)
|
|
0.20
|
|
(g)
|
Debt refinancing costs
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
0.36
|
|
(h)
|
|
0.34
|
|
(i)
|
Purchase accounting inventory adjustment
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
0.39
|
|
(j)
|
|
—
|
|
|
Venezuela devaluation
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
0.02
|
|
(k)
|
|
—
|
|
|
Income taxes
|
|
|
|
(0.05
|
)
|
(l)
|
|
(0.46
|
)
|
(m)
|
|
|
|
0.81
|
|
(l)
|
|
0.19
|
|
(m)
|
|
|
|
|
0.21
|
|
|
|
(0.01
|
)
|
|
|
|
|
2.48
|
|
|
|
1.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per share, as adjusted
|
|
|
$
|
0.90
|
|
|
$
|
1.12
|
|
|
|
|
$
|
2.12
|
|
|
$
|
2.44
|
|
|
(a) For the nine months ended June 30, 2013 and the three and nine
months ended July 1, 2012, reflects $3.2 million, $17.3 million
and $32.2 million, net of tax, of pre-acquisition earnings related
to the acquired HHI business. The Pre-acquisition earnings of HHI
do not include the TLM Taiwan business as stand alone financial
data is not available for the periods presented. The TLM Taiwan
business is not deemed material to the Company's operating results.
|
|
(b) For the three months ended June 30, 2013, reflects $5.0 million,
net of tax, of Acquisition and integration related charges, as
follows: (i) $4.1 million related to the acquisition of the HHI
Business, consisting primarily of legal and professional fees; (ii)
$0.2 million related to the acquisition of FURminator, consisting of
integration costs; (iii) $0.4 million related to the Merger with
Russell Hobbs, consisting of integration costs; and (iv) $0.3
million related to the acquisition of Shaser and other acquisition
activity, consisting of legal and professional fees.
|
|
(c) For the nine months ended June 30, 2013, reflects $26.4 million,
net of tax, of Acquisition and integration related charges, as
follows: (i) $20.2 million related to the acquisition of the HHI
Business, consisting primarily of legal and professional fees; (ii)
$2.9 million related to the acquisition of Shaser, consisting of
integration and legal and professional fees; (iii) $1.8 million
related to the Merger with Russell Hobbs, consisting of integration
costs; and (iv) $1.5 million related to the acquisition of
FURminator and other acquisition activity, consisting of integration
costs.
|
|
(d) For the three months ended July 1, 2012, reflects $3.4 million,
net of tax, of Acquisition and integration related charges as
follows: (i) $1.9 million related to the merger with Russell Hobbs
which consisted primarily of integration costs; (ii) $1.1 million
related to the acquisition of FURminator, consisting primarily of
legal and professional fees; and (iii) $0.4 million related to the
acquisition of Black Flag, consisting primarily of legal and
professional fees.
|
|
(e) For the nine months ended July 1, 2012, reflects $13.4 million,
net of tax, of Acquisition and integration related charges as
follows: (i) $7.6 million related to the merger with Russell Hobbs
which consisted primarily of integration costs; (ii) $4.1 million
related to the acquisition of FURminator, consisting primarily of
legal and professional fees; and (iii) $1.7 million related to the
acquisition of Black Flag and other acquisition activity, consisting
primarily of legal and professional fees.
|
|
(f) For the three and nine months ended June 30, 2013, reflects $8.6
million and $18.0 million, net of tax, respectively, of
Restructuring and related charges primarily related to the Global
Cost Reduction Initiatives announced in Fiscal 2009.
|
|
(g) For the three and nine months ended July 1, 2012, reflects $2.5
million and $10.3 million, net of tax, respectively, of
Restructuring and related charges primarily related to the Global
Cost Reduction Initiatives announced in Fiscal 2009.
|
|
(h) For the nine months ended June 30, 2013, reflects $18.7 million,
net of tax, related to financing fees and the write off of
unamortized debt issuance costs in connection with the replacement
of the Company's Term Loan and the issuance of the 6.375% Notes and
6.625% Notes in connection with the acquisition of the HHI Business.
|
|
(i) For the nine months ended July 1, 2012, reflects $17.9 million,
net of tax, related to financing fees 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.
|
|
(j) For the nine months ended June 30, 2013, reflects a $20.2
million, net of tax, non-cash increase to cost of goods sold related
to the sales of inventory that was subject to fair value adjustments
in conjunction with the acquisition of the HHI Business.
|
|
(k) For the nine months ended June 30, 2013, reflects an adjustment
of $1.3 million, net of tax, related to the devaluation of the
Venezuelan Bolivar Fuerte.
|
|
(l) For the three and nine months ended June 30, 2013, reflects
adjustments to income tax expense of $(2.9) million and $42.2
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.
|
|
(m) For the three and nine months ended July 1, 2012, reflects
adjustments to income tax expense of $(24.0) million and $10.1
million, respectively, to exclude the impact of the valuation
allowance against deferred taxes and other tax related items in
order to reflect a normalized ongoing effective tax rate.
|
|
Table 4
|
SPECTRUM BRANDS HOLDINGS, INC.
|
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
|
For the three months ended June 30, 2013
|
(Unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Batteries & Appliances
|
|
Global Pet Supplies
|
|
Home & Garden
|
|
Hardware & Home Improvement
|
|
Corporate / Unallocated Items (a)
|
|
Consolidated Spectrum Brands Holdings,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to controlling interest, as adjusted
(a)
|
|
|
$
|
32.4
|
|
|
$
|
24.5
|
|
$
|
42.8
|
|
$
|
39.6
|
|
$
|
(103.2
|
)
|
|
$
|
36.1
|
Net income attributable to non-controlling interest
|
|
|
|
(0.2
|
)
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
|
0.3
|
Net income (loss) as adjusted (a)
|
|
|
|
32.2
|
|
|
|
24.5
|
|
|
42.8
|
|
|
40.1
|
|
|
(103.2
|
)
|
|
|
36.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.2
|
|
|
|
15.2
|
Interest expense
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61.5
|
|
|
|
61.5
|
Acquisition and integration related charges
|
|
|
|
1.2
|
|
|
|
0.4
|
|
|
0.1
|
|
|
1.2
|
|
|
4.8
|
|
|
|
7.7
|
Restructuring and related charges
|
|
|
|
8.3
|
|
|
|
1.4
|
|
|
0.2
|
|
|
2.3
|
|
|
1.0
|
|
|
|
13.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT
|
|
|
|
41.7
|
|
|
|
26.3
|
|
|
43.1
|
|
|
43.6
|
|
|
(20.7
|
)
|
|
|
134.0
|
Depreciation and amortization (b)
|
|
|
|
17.0
|
|
|
|
7.4
|
|
|
2.9
|
|
|
9.4
|
|
|
17.8
|
|
|
|
54.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
58.7
|
|
|
$
|
33.7
|
|
$
|
46.0
|
|
$
|
53.0
|
|
$
|
(2.9
|
)
|
|
$
|
188.5
|
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 results of the operating segments and are
presented within Corporate/Unallocated Items.
|
|
(b) Included within depreciation and amortization is amortization of
unearned restricted stock compensation.
|
|
Table 4
|
SPECTRUM BRANDS HOLDINGS, INC.
|
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
|
For the nine months ended June 30, 2013
|
(Unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Batteries & Appliances
|
|
Global Pet Supplies
|
|
Home & Garden
|
|
Hardware & Home Improvement
|
|
Corporate / Unallocated Items (a)
|
|
Consolidated Spectrum Brands Holdings,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to controlling interest, as adjusted
(a)
|
|
|
$
|
159.1
|
|
|
$
|
51.1
|
|
$
|
59.0
|
|
$
|
36.7
|
|
$
|
(324.4
|
)
|
|
$
|
(18.5
|
)
|
Net loss attributable to non-controlling interest
|
|
|
|
(0.4
|
)
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
|
0.1
|
|
Net income (loss), as adjusted (a)
|
|
|
|
158.7
|
|
|
|
51.1
|
|
|
59.0
|
|
|
37.2
|
|
|
(324.4
|
)
|
|
|
(18.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-acquisition earnings of HHI (b)
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
30.3
|
|
|
—
|
|
|
|
30.3
|
|
Income tax expense
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54.9
|
|
|
|
54.9
|
|
Interest expense
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191.7
|
|
|
|
191.7
|
|
Acquisition and integration related charges
|
|
|
|
4.4
|
|
|
|
1.6
|
|
|
0.1
|
|
|
4.1
|
|
|
30.3
|
|
|
|
40.5
|
|
Restructuring and related charges
|
|
|
|
11.5
|
|
|
|
9.5
|
|
|
0.5
|
|
|
5.0
|
|
|
1.2
|
|
|
|
27.7
|
|
HHI Business inventory fair value adjustment
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
31.0
|
|
|
—
|
|
|
|
31.0
|
|
Venezuela devaluation
|
|
|
|
2.0
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT
|
|
|
|
176.6
|
|
|
|
62.2
|
|
|
59.6
|
|
|
107.6
|
|
|
(46.3
|
)
|
|
|
359.7
|
|
Depreciation and amortization (c)
|
|
|
|
49.7
|
|
|
|
22.0
|
|
|
8.7
|
|
|
19.7
|
|
|
32.6
|
|
|
|
132.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
226.3
|
|
|
$
|
84.2
|
|
$
|
68.3
|
|
$
|
127.3
|
|
$
|
(13.7
|
)
|
|
$
|
492.4
|
|
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 results of the operating segments and are
presented within Corporate/Unallocated Items.
|
|
(b) The Pre-acquisition earnings of HHI do not include the TLM
Taiwan business as stand alone financial data is not available for
the periods presented. The TLM Taiwan business is not deemed
material to the Company's operating results.
|
|
(c) Included within depreciation and amortization is amortization of
unearned restricted stock compensation.
|
|
Table 4
|
SPECTRUM BRANDS HOLDINGS, INC.
|
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
|
For the three months ended July 1, 2012
|
(Unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Batteries & Appliances
|
|
Global Pet Supplies
|
|
|
Home & Garden
|
|
Hardware & Home Improvement
|
|
Corporate / Unallocated Items (a)
|
|
Consolidated Spectrum Brands Holdings,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as adjusted (a)
|
|
|
$
|
40.9
|
|
$
|
18.8
|
|
|
$
|
44.0
|
|
$
|
—
|
|
$
|
(44.9
|
)
|
|
$
|
58.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-acquisition earnings of HHI (b)
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
52.5
|
|
|
—
|
|
|
|
52.5
|
|
Income tax benefit
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
|
|
(5.4
|
)
|
Interest expense
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
39.7
|
|
|
|
39.7
|
|
Acquisition and integration related charges
|
|
|
|
3.0
|
|
|
1.7
|
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
|
5.2
|
|
Restructuring and related charges
|
|
|
|
1.8
|
|
|
1.7
|
|
|
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT
|
|
|
|
45.7
|
|
|
22.2
|
|
|
|
44.2
|
|
|
52.5
|
|
|
(10
|
)
|
|
|
154.6
|
|
Depreciation and amortization (c)
|
|
|
|
15.5
|
|
|
7.1
|
|
|
|
3.3
|
|
|
—
|
|
|
4.5
|
|
|
|
30.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
61.2
|
|
$
|
29.3
|
|
|
$
|
47.5
|
|
$
|
52.5
|
|
$
|
(5.5
|
)
|
|
$
|
185.0
|
|
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 results of the operating segments and are
presented within Corporate/Unallocated Items.
|
|
(b) The Pre-acquisition earnings of HHI do not include the TLM
Taiwan business as stand alone financial data is not available for
the periods presented. The TLM Taiwan business is not deemed
material to the Company's operating results.
|
|
(c) Included within depreciation and amortization is amortization of
unearned restricted stock compensation.
|
|
Table 4
|
SPECTRUM BRANDS HOLDINGS, INC.
|
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
|
For the nine months ended July 1, 2012
|
(Unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Batteries & Appliances
|
|
Global Pet Supplies
|
|
Home & Garden
|
|
Hardware & Home Improvement
|
|
Corporate / Unallocated Items (a)
|
|
Consolidated Spectrum Brands Holdings,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as adjusted (a)
|
|
|
$ 166.4
|
|
$ 46.7
|
|
$ 58.7
|
|
$ —
|
|
$ (228.9)
|
|
$ 43.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-acquisition earnings of HHI (b)
|
|
|
—
|
|
—
|
|
—
|
|
130.1
|
|
—
|
|
130.1
|
Income tax expense
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
38.8
|
|
38.8
|
Interest expense
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
150.1
|
|
150.1
|
Acquisition and integration related charges
|
|
|
11.2
|
|
3.6
|
|
0.6
|
|
—
|
|
5.2
|
|
20.6
|
Restructuring and related charges
|
|
|
7.0
|
|
6.9
|
|
1.2
|
|
—
|
|
0.9
|
|
15.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT
|
|
|
184.6
|
|
57.2
|
|
60.5
|
|
130.1
|
|
(33.9)
|
|
398.6
|
Depreciation and amortization (c)
|
|
|
46.0
|
|
20.2
|
|
9.1
|
|
—
|
|
15.8
|
|
91.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
$ 230.6
|
|
$ 77.4
|
|
$ 69.6
|
|
$ 130.1
|
|
$ (18.1)
|
|
$ 489.6
|
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 results of the operating segments and are
presented within Corporate/Unallocated Items.
|
|
(b) The Pre-acquisition earnings of HHI do not include the TLM
Taiwan business as stand alone financial data is not available for
the periods presented. The TLM Taiwan business is not deemed
material to the Company's operating results.
|
|
(c) Included within depreciation and amortization is amortization of
unearned restricted stock compensation.
|
|
Table 5
|
SPECTRUM BRANDS HOLDINGS, INC.
|
Pro Forma Net Sales Comparison
|
For the three and nine months ended June 30, 2013 and July 1, 2012
|
(Unaudited)
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
|
|
|
NINE MONTHS
|
|
|
|
|
|
F2013
|
|
|
F2012
|
|
|
INC %
|
|
|
F2013
|
|
|
F2012
|
|
|
INC %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spectrum Brands Holdings, Inc. Net sales - as reported
|
|
|
|
|
$
|
1,089.8
|
|
|
$
|
824.8
|
|
|
32.1
|
%
|
|
|
$
|
2,947.8
|
|
|
$
|
2,419.9
|
|
|
21.8
|
%
|
HHI pre-acquisition Net sales (a)
|
|
|
|
|
|
—
|
|
|
|
253.0
|
|
|
|
|
|
|
191.8
|
|
|
|
716.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Net Sales
|
|
|
|
|
$
|
1,089.8
|
|
|
$
|
1,077.8
|
|
|
1.1
|
%
|
|
|
$
|
3,139.6
|
|
|
$
|
3,136.8
|
|
|
0.1
|
%
|
(a) Net sales have been adjusted to reflect the acquisition of HHI
as if it occurred at the beginning of each period presented. HHI
pre-acquisition Net sales do not include the TLM Taiwan business as
stand alone financial data is not available for the periods
presented. The TLM Taiwan business is not deemed material to the
Company's operating results.
|
|
Table 6
|
SPECTRUM BRANDS HOLDINGS, INC.
|
Reconciliation of Forecasted Cash Flow from Operating Activities
to Forecasted Free Cash Flow
|
For the twelve months ended September 30, 2013
|
(Unaudited)
|
($ in millions)
|
|
|
|
|
Forecasted:
|
|
|
|
|
|
|
|
Net Cash provided from Operating Activities
|
|
|
$ 310 - 320
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(70) - (80)
|
|
|
|
|
Free Cash Flow
|
|
|
$ 240
|
|
|
|
|
Table 7
|
SPECTRUM BRANDS HOLDINGS, INC.
|
Reconciliation of Forecasted Net Income to Forecasted Adjusted
EBITDA
|
For the twelve months ended September 30, 2013
|
(Unaudited)
|
($ in millions)
|
|
|
|
|
|
Forecasted:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$ 125 - 140
|
|
|
|
|
|
Income tax expense
|
|
|
|
41
|
Interest expense
|
|
|
|
230
|
Acquisition and integration related charges
|
|
|
|
12
|
Restructuring and related charges
|
|
|
|
19
|
HHI Business inventory fair value adjustment
|
|
|
|
31
|
Venezuela devaluation
|
|
|
|
2
|
|
|
|
|
|
Adjusted EBIT
|
|
|
|
$ 460 - 470
|
|
|
|
|
|
Depreciation and amortization (a)
|
|
|
|
180
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
$ 640 - 650
|
(a) Included within depreciation and amortization is amortization of
unearned restricted stock compensation.
|
Copyright Business Wire 2013