Content provided in partnership with
Business Services Industry
Spectrum Brands Reports Second Quarter 2008 Financial Results
Business Wire, May 6, 2008
ATLANTA -- Spectrum Brands, Inc. (NYSE: SPC) (the Company) announced today second quarter net sales of $647.1 million and a net loss of $2.19 per share for the quarter ended March 30, 2008. Excluding certain items which management believes are not indicative of the Company's on-going normalized operations, the Company generated an adjusted net loss per share of $0.14 on a fully diluted basis, a non-GAAP number. These items, net of tax, include:
* A catch up in depreciation and amortization related to the re-classification of the Home & Garden segment into continuing operations of $10.7 million or $0.21 per share;
- Most Popular Articles in Business
- Research and Markets : Tesco Plc - SWOT Framework Analysis
- Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors
- eBay made easy: ready to start an eBay business? These 5 simple steps will ...
- Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...
- Wal-Mart's newest distribution center opened last month near the southwest ...
- More »
* A non-cash impairment charge of $8.3 million or $0.16 per share, for the write-off of certain trade names used in the Home & Garden business;
* restructuring and related charges of $3.5 million, or $0.07 per share, associated with company-wide cost reduction initiatives;
* net tax adjustments of $83.0 million, or $1.63 per share, to reflect an increase in the valuation allowance against net deferred tax assets; and
* other items netting to a benefit of $0.9 million or $.02 per share.
During the second quarter of fiscal 2007, the Company reported a net loss per fully diluted share of $4.77. Excluding a goodwill impairment charge of $3.84 per share, refinancing charges of $0.43 per share, restructuring and related charges of $0.25 per share, $0.05 per share of transaction costs incurred in connection with the proposed sale of the Company's Home and Garden business, 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 $0.06 per share, the second quarter 2007 adjusted loss per fully diluted share was $0.30.
Led by strong double digit growth in the Company's personal care and companion pet supply product lines and favorable foreign exchange, Spectrum Brands' net sales of $647.1 million represented a two percent increase from the prior year, after excluding the Canadian division of the Home and Garden business, which the Company sold in November 2007. Favorable foreign currency contributed $27 million, or 4 percent to net sales. Partially offsetting the positive trends were lower sales in consumer batteries and men's electric shaving and grooming in North America. Additionally, the Home & Garden division saw a later than normal start to its peak selling season this year, delaying some expected revenues into the third quarter.
The Company continued to see benefits from its 2007 global realignment initiatives. Adjusted EBITDA, a non-GAAP measurement which the Company believes is a useful indicator of the operating health of the business and its trajectory, was $66.2 million as compared with $54.0 million in the second quarter of the prior year, a 23 percent improvement. For the latest twelve months, adjusted EBITDA is $296.3 million and has increased 26 percent compared to one year ago.
"This marks the fourth consecutive quarter of double digit growth in adjusted EBITDA. This level of performance reflects the very strong focus and commitment our team has to drive profitable growth in this business," said Kent Hussey, Chief Executive Officer. "I'm pleased with the progress we're making. Despite a sluggish U.S. economy, continuing tight inventory controls at retailers and rising input costs, our teams have worked hard to make the necessary changes to improve the efficiency and profitability of this business."
Gross profit and gross margin for the quarter were $234.6 million and 36.3 percent, respectively, versus $223.8 million and 35.3 percent for the same period last year. Within cost of sales, the Company incurred restructuring and related charges of approximately $200 thousand this quarter related to headcount reductions taken as part of its 2007 global realignment and $6.7 million in the second quarter of 2007. Also, within cost of sales this quarter was $4.7 million in depreciation related to the Home & Garden segment that was not present last year.
The current quarter's operating expenses were $222.9 million as compared with $420.3 million in operating expenses in the same quarter last year. Included in this year's operating expenses were $15.8 million of additional depreciation and amortization, $13.2 million for a non-cash intangibles impairment related to trade names in the Home & Garden segment and $5.2 million in restructuring and related charges. In the second quarter of fiscal 2007, operating expenses included a non-cash charge of $214 million for a goodwill impairment and $11.2 million in restructuring and related charges.
Spectrum generated second quarter operating income and operating margin of $11.7 million and 1.8 percent, respectively, versus an operating loss of $196.5 million in the same period last year. The primary variance related to the non-cash impairment charges referenced above.
Find Research Guides for:
Most Popular Articles in Business
- Research and Markets : Tesco Plc - SWOT Framework Analysis
- Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors
- eBay made easy: ready to start an eBay business? These 5 simple steps will ...
- Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...
- Wal-Mart's newest distribution center opened last month near the southwest ...
- More »