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Spectrum Brands Reports
3rd Quarter 2008 Financial Results

Rayovac parent company reports loss of $5.58 per share on impairment and other charges

Spectrum Brands, Inc. Press Release (excerpted)

FlashlightNews.org - 8/12/2008


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Rayovac Batteries

Rayovac Batteries

ATLANTA, Ga. - Spectrum Brands, Inc. (the Company) (NYSE: SPC) announced today third quarter net sales of $729.6 million and a net loss of $5.58 per share for the quarter ended June 29, 2008. Excluding certain items which management believes are not indicative of the Company's on-going normalized operations, the Company generated adjusted diluted earnings per share of $0.06, a non-GAAP number. These excluded items, net of tax, include:

• Goodwill and trade names impairment charges of $253.7 million, or $4.76 per share, in accordance with SFAS 142 and SFAS 144, primarily related to the Company's Home & Garden and Global Pet Supply businesses;

• Net tax adjustments of $19.1 million, or $0.36 per share, to exclude the effect of certain adjustments made to the valuation allowance against net deferred taxes and other tax related items;

• Restructuring and related charges of $14.3 million, or $0.27 per share, primarily associated with the Company's strategy to exit Ningbo Baowang, a battery manufacturing facility in China, and company-wide cost reduction initiatives;

• Professional fees of $2.9 million, or $0.05 per share, incurred in connection with the proposed sale of the Company's Global Pet Supplies business;

• $0.25 per share as a result of using a diluted share count of 53.3 million average shares outstanding to calculate adjusted diluted earnings per share versus using a basic share count of 50.9 million average shares outstanding in order to calculate GAAP basic earnings per share. GAAP requires the use of the basic share count in the event of a net loss; and

• Other items netting to a benefit of $2.8 million, or $0.05 per share

During the third quarter of fiscal 2007, the Company reported a net loss per fully diluted share of $0.15. Excluding restructuring and related charges of $0.36, an add back of $0.04 per share for depreciation and amortization that would have been recorded if the Home & Garden Business had been in continuing operations, and other non-cash adjustments netting an add back of $0.05 per share, the third quarter 2007 adjusted earnings per fully diluted share was $0.12.

With strong top-line growth in all three business segments, the Company's third quarter net sales of $729.6 million represented a 10.5 percent increase over the prior year, after excluding the Canadian division of the Home & Garden Business, which the Company sold in November 2007. Favorable foreign currency exchanges contributed $29.6 million.

"I'm pleased with our strong sales growth for the quarter, which I believe reflects the strength of our new product offerings and marketing programs as well as a consumer shift towards value brands during this tough economic time," said Kent Hussey, CEO of Spectrum Brands.

The Global Batteries and Personal Care segment reported net sales of $344.4 million compared with $307.0 million for the same period reported last year, an increase of 12.2 percent. Favorable foreign exchange benefited sales by $23.7 million with the remainder of the variance resulting from gains in market share in batteries and strong growth in sales of personal care products. Global battery sales, which benefited from favorable foreign exchange, were up 12.4 percent compared with the same period last year, primarily due to improved performance in North America for both alkaline and specialty batteries. North American battery sales were up 21.8 percent for the quarter from the same period last year as the Company regained market share and returned to its historical 11 percent share of dollars in the market. European battery sales increased 10.4 percent from the same period last year benefiting from favorable foreign exchange and sales increases in its branded alkaline and specialty batteries. Latin American battery sales generated year over year growth of 5.4 percent, benefiting from favorable foreign exchange and sales increases in alkaline batteries. Global sales of Remington branded products increased 16.3 percent during the quarter from the same period last year with double digit sales growth in its hair care products and single digit sales growth in shaving & grooming.

The Global Batteries and Personal Care segment reported its 6th straight quarter of adjusted EBITDA year-over-year improvement, coming in at $37.9 million for the quarter. Segment profitability for this segment was $33.2 million for the quarter, up an impressive 21.0 percent over last year's level. The profit improvement was primarily due to the cost savings generated from the 2007 global realignment initiatives and cost savings generated from more efficient operation of the Company's manufacturing facilities.

About Spectrum Brands, Inc.

Spectrum Brands is a global consumer products company and a leading supplier of consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products and portable lighting. Helping to meet the needs of consumers worldwide, included in its portfolio of widely trusted brands are Rayovac®, Varta®, Remington®, Tetra®, Marineland®, Nature's Miracle®, Dingo®, 8-In-1®, Spectracide®, Schultz®, Cutter®, Repel®, and HotShot®. Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in more than 120 countries around the world. Headquartered in Atlanta, Georgia, Spectrum Brands generated fiscal year 2007 net sales of $2.6 billion. The Company's stock trades on the New York Stock Exchange under the symbol SPC.

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