Spectrum Brands Updates FY07 Financial ProjectionsSpectrum Brands, Inc. Press Release
FlashlightNews.org - 7/13/2007
Company lowers sales and earnings forecast, reports lower than expected European battery sales
Spectrum Brands, Inc.
ATLANTA, Ga. - Spectrum Brands, Inc. (NYSE: SPC) announced today it anticipates that full year 2007 sales and earnings before interest, tax, depreciation and amortization (EBITDA) will be lower than previously anticipated. Preliminary results for the recently completed fiscal third quarter and projections for the fiscal fourth quarter suggest that the company will generate full year 2007 net sales of approximately $2,634 million and EBITDA of between $260 and $264 million. This compares with earlier expectations of net sales of $2,648 million and EBITDA of $282 million. (See Table I for further details.)
The company lowered projections due to unfavorable weather conditions experienced during the fiscal third quarter, particularly the impact of drought conditions across much of the country, which had a negative impact on its Home & Garden business, as well as lower than expected European battery sales and a cautious outlook on the part of U.S. retailers regarding inventory levels, which caused a shortfall in projected results for Global Batteries and Personal Care.
Commenting on the company's performance and outlook, Spectrum Brands Chief Executive Officer Kent Hussey stated, "Our Home & Garden business is performing well as measured by market share and customer service levels, despite recent weather conditions. We remain confident in the fundamental strength of this business and our ability to execute a sale of this asset at a fair valuation. We continue to make progress on our corporate strategy and believe we are taking the right actions to improve profitability in all of our business segments, strengthen our capital structure through the strategic sale of one or more assets, and create sustainable value for our equity holders."
The company does not anticipate any liquidity issues or problems complying with its debt covenants as a result of its revised projections. As previously announced, Spectrum has received financing commitments from Goldman Sachs and Wachovia Bank to provide the company with a $225 million asset based loan facility, with a concomitant reduction of its senior credit facility term loan by the same amount. The company expects to close on this transaction during its fiscal fourth quarter.
Spectrum Brands will host a conference call with members of the investment community on August 7, 2007 at 8:30 a.m. EDT to discuss fiscal third quarter results. Access to the call will be available at www.spectrumbrands.com.
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 net sales of $2.5 billion in fiscal 2006 and has approximately 8,400 employees worldwide. The company's stock trades on the New York Stock Exchange under the symbol SPC.