Rayovac Parent Reports Financial Results
|Spectrum Brands, Inc. Press Release (excerpted)||FlashlightNews.org - 11/12/2007|
Company reports 13% sales increase for latest quarter, large loss on non-recurring charges
Rayovac Hybrid Batteries
ATLANTA, Ga. - Spectrum Brands, Inc. (NYSE: SPC) announced fourth quarter net sales of $548.2 million and a net loss of $6.60 per share for the quarter ended September 30, 2007. Excluding certain items which management believes are not indicative of the company's on-going normalized operations, the company generated diluted earnings per share of $0.23. These items include:
- a loss from discontinued operations, net of tax, of $178.8 million, or $3.55 per share, related to the company's Home & Garden business, which is being held for sale, including a $168.5 million non-cash charge related to the fair value of this asset;
- net tax adjustments of $126.7 million, or $2.51 per share, which include the following:
- a non-cash charge of $211.3 million, or $4.19 per share (of which $54.2 million, or $1.08 per share, is included in the loss from discontinued operations) reflecting an increase in the valuation allowance against certain net deferred tax assets; and
- other tax benefit adjustments of $30.4 million, or $0.60 per share, which principally relate to the revaluation of certain foreign deferred tax credits resulting from statutory tax rate changes;
- pretax restructuring and related charges of $36.6 million, or $.47 per share, associated with company-wide cost reduction initiatives;
- a non-cash impairment charge of $24.4 million, or $.35 per share, related to the value of certain tradenames; and
- other items netting to a pretax benefit of $1.9 million, or $.05 per share.
Spectrum Brands' sales for the quarter were $548.2 million, an increase of 13 percent, largely attributable to sales volume increases and the impact of favorable foreign exchange rates. Segment profit increased 54 percent to $76.4 million for the quarter due primarily to increased sales and the impact of the company's cost restructuring initiatives. On a constant currency basis, sales increased eight percent and segment profit increased 48 percent. Adjusted EBITDA, including EBITDA from Home & Garden, was $92 million as compared with $58 million in the prior year.
Chief Executive Officer Kent Hussey stated, "We are pleased with the overall improvement in sales, EBITDA and segment profitability during the quarter. We are particularly pleased that the improvement represented both sales and profitability growth in each of our business segments, including our Home & Garden business. Our fourth quarter performance improvement was driven by a combination of sales volume growth and the benefits from the restructuring actions we took over the last two years to better control our costs. We believe this positive momentum demonstrates that we are taking the appropriate steps to deliver sustainable operating profitability improvement and create long-term shareholder value. We believe these positive trends will continue in fiscal year 2008."
The Global Batteries and Personal Care segment reported net sales of $400.4 million, an improvement of 16 percent compared with $346.0 million reported last year. Foreign exchange translation contributed $19.4 million. Global battery sales showed year over year growth of nine percent. North American battery sales volumes were positively impacted by a move on the part of several retailer customers to ship in holiday related merchandise earlier than was the case in the prior year, contributing to sales growth of three percent. In Europe, battery sales improved eleven percent as a result of increased volume and the positive impact of the strong Euro. Latin American battery sales generated year over year growth of twelve percent. Sales of Remington branded products grew 36 percent worldwide during the quarter, attributable to retailer requirements for earlier shipments of holiday related merchandise and increased distribution and market share gains in Europe. Segment profitability for Global Batteries and Personal Care was $54.5 million versus last year's $31.6 million. In addition to increased sales, the profit improvement was driven by lower operating expenses resulting from cost cutting initiatives throughout the business.
Fiscal Year 2007 Results
For the year ended September 30, 2007, the company recorded a net loss of $596.7 million, or $11.72 per diluted share, compared to a net loss of $434.0 million, or $8.77 per diluted share, last year. Included in the current year's results are:
- a non-cash pretax impairment charge of $238.4 million, or $4.10 per share, related to the value of certain trade names and goodwill;
- a loss from discontinued operations, net of tax, of $184.6 million, or $3.63 per share, related to the company's Home & Garden business, which is held for sale, and which includes a $168.5 million non-cash charge related to the fair value of this asset in accordance with SFAS No. 144;
- net tax adjustments of $126.7 million, or $2.49 per share, which include the following:
- a non-cash charge of $211.3 million, or $4.15 per share, (of which $54.2 million, or $1.07 per share, is included in the loss from discontinued operations) reflecting an increase in the valuation allowance against certain net deferred tax assets; and
- other tax benefit adjustments of $30.4 million, or $.60 per share, which principally relate to the revaluation of certain foreign deferred credits resulting from statutory tax rate changes;
- pretax restructuring and related charges of $91.0 million, or $1.16 per share, primarily related to the global realignment and cost cutting programs initiated during fiscal 2007;
- $36.2 million, or $0.46 per share, of pretax charges associated with a pre-payment premium incurred in connection with the refinancing of the company's senior credit facility and the write-off of deferred financing fees;
- professional fees of $2.5 million, or $.05 per share, incurred in connection with the sale of the Company's Home & Garden business, discontinued effective October 1, 2006; and
- other non-cash benefits totaling $0.15 per share.
About Spectrum Brands, Inc.
Spectrum Brands is a global consumer products company and a leading supplier of batteries, portable lighting, lawn and garden products, household insect control, shaving and grooming products, personal care products and specialty pet supplies. Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in 120 countries around the world. Headquartered in Atlanta, Georgia, Spectrum Brands generated fiscal year 2007 net sales of $2.0 billion and has approximately 7,500 employees worldwide. The company's stock trades on the New York Stock Exchange under the symbol SPC.
For more information, visit the company's website at: www.spectrumbrands.com.