Spectrum Brands Reports Second Quarter 2008 Financial Results

Business Wire, May 6, 2008

As a result of the reclassification of our Home and Garden Business as continuing operations, in accordance with GAAP, we have revised our financial results for all prior periods in which we classified our Home and Garden Business as discontinued operations to present the Home and Garden Business as continuing operations. Our revised presentation excludes from continuing operations the results of our Canadian division of our Home and Garden business, which we sold in November 2007 and remains classified as discontinued operations for such periods. See attached Tables 4, 5 and 6 that reflect selected financial data for fiscal 2007 by quarter and the 1st and 2nd quarters of fiscal 2008 as described above (the "Home and Garden Reconciliation Spreadsheets").

Second Quarter Segment Results

The Global Batteries and Personal Care segment reported net sales of $307.6 million compared with $297.2 million reported last year, an increase of 3.5 percent, primarily as a result of favorable foreign exchange of $22 million. Global battery sales were down 1.4 percent compared with the prior year. The primary driver of this decline was lower North American battery sales, which declined 15.9 percent as compared with the prior year, due to the sluggish US economy, lower category consumption and inventory reductions among certain key retailers. European battery sales increased 3.3 percent from the prior year benefiting from favorable foreign exchange, offset by slower sales in Western Europe due to the Company's planned exit from unprofitable or marginally profitable private label businesses. Latin American battery sales generated year over year growth of 7.3 percent. Global sales of Remington branded products increased 18.1 percent during the quarter with positive sales growth in each major geographic region and double digit increases in hair care products. Increased distribution and market share gains in Europe and Latin America generated double digit sales growth in those areas. North America experienced single digit growth as a result of lower sales in batteries and men's electric shaving and grooming products.

Segment profitability for Global Batteries & Personal Care was $24.7 million for the quarter, up 11.8 percent over last year's $22.1 million. The profit improvement was primarily due to the cost savings generated from 2007's global realignment initiatives as well as a 40 basis point improvement in gross margin related to cost savings generated from more efficient operation of the Company's manufacturing facilities.

Global Pet Supplies net sales were $148.4 million, a 4.1 percent increase compared with the prior year. Companion animal product net sales grew 10.3 percent, while global aquatics net sales increased 1.5 percent from the prior year. North American aquatic sales declined 8 percent, continuing the trend experienced over the past year. Sales in Europe and the Pacific Rim were up 19.5 percent and 18.7 percent, respectively, as a result of new product rollouts, new marketing programs and favorable currency.