NEW YORK, Feb. 7, 2017
/PRNewswire/ -- HRG Group, Inc. ("HRG" or the "Company"; NYSE:
HRG), a holding company that conducts its operations principally
through its operating subsidiaries, today announced its
consolidated results for the first quarter of Fiscal 2017 ended on
December 31, 2016 (the "Fiscal 2017 Quarter"). The results
include HRG's two segments:
- Consumer Products, which consists of Spectrum Brands Holdings,
Inc. ("Spectrum Brands"; NYSE: SPB) and its subsidiaries; and
- Insurance, which consists of Front Street Re (Delaware) Ltd. and its subsidiaries ("Front
Street").
"In the first quarter of Fiscal 2017, HRG reported very strong
results, highlighted by solid operating income growth at HRG
overall driven by another strong performance from the Consumer
Products segment, which maintained its momentum from fiscal 2016
and is well positioned for another great year in fiscal 2017.
Subsequent to the quarter-end, Spectrum Brands also increased its
quarterly dividend by 10.5% to $0.42
per Spectrum Brands share and authorized a new
three-year, $500 million common stock repurchase
program," said Omar Asali, President
and Chief Executive Officer of HRG.
"With respect to the pending merger between Fidelity &
Guaranty Life and Anbang, we are continuing our discussions with
Anbang regarding an extension of the outside termination date
beyond February 8, 2017," continued
Asali. "We expect that Fidelity & Guaranty Life will make an
announcement on or about February 9,
2017 regarding the outcome of those discussions."
First Quarter Fiscal 2017 Consolidated Highlights:
- HRG recorded total revenues of $1.19
billion for the Fiscal 2017 Quarter, a decrease of
$19.8 million, or 1.6%, as compared
to the $1.21 billion recorded in the
first quarter of fiscal 2016 (the "Fiscal 2016 Quarter"). The
decrease was primarily due to lower net sales from our Consumer
Products segment mainly as a result of the effect of foreign
exchange rates; lower revenues generated by Salus Capital Partners,
LLC ("Salus") as a result of the continued run-off of the
asset-backed loan portfolio; and a decrease in fair value of the
funds withheld receivables with third parties in the Insurance
segment due to higher interest rates and wider credit spreads.
- Consolidated operating income of $117.7
million in the Fiscal 2017 Quarter increased $17.9 million as compared to $99.8 million reported in the Fiscal 2016
Quarter. The increase was primarily due to increased profitability
in our Consumer Products segment and lower impairments and loan
loss provision expense in our Corporate and Other segment.
- Results reflect a $3.5 million
decrease in interest expense relative to the Fiscal 2016 Quarter,
which was primarily due to the effect of refinancing activities at
Spectrum Brands.
- HRG recorded a tax expense of $25.4
million, or a 92.7% effective tax rate, in the Fiscal 2017
Quarter compared to a $5.6 million
tax benefit, or a (143.6)% effective tax rate, in the Fiscal 2016
Quarter. The increase in tax expense in the Fiscal 2017 Quarter was
principally due to higher taxes in our Consumer Products segment,
which benefited from the valuation allowance release in the Fiscal
2016 Quarter, coupled with the recognition on tax benefits of a
portion of current year losses recognized in our Corporate and
Other segment in the Fiscal 2016 Quarter.
- Net loss from continuing operations attributable to common
stockholders was $25.5 million, or
$0.13 per common share attributable
to controlling interest during the Fiscal 2017 Quarter, as compared
to a net loss from continuing operations attributable to common
stockholders of $21.8 million, or
$0.11 per common share attributable
to controlling interest during the Fiscal 2016 Quarter. The
increase in loss was primarily due to higher effective income tax
rate during the Fiscal 2017 Quarter, partially offset by increased
operating income.
- In the Fiscal 2017 Quarter, HRG received dividends of
$16.1 million from its subsidiaries,
comprised of $13.0 million from
Spectrum Brand and $3.1 million from
Fidelity & Guaranty Life ("FGL"; NYSE: FGL), which is reported
as discontinued operations.
Important Notes Regarding the Presentation of our
Results:
On August 23, 2016, HGI Energy
Holdings, LLC ("HGI Energy"), a wholly-owned subsidiary of the
Company, completed the sale of its equity interests in Compass
Production Partners, LP and its subsidiaries ("Compass") to a third
party. Following the completion of the sale, the Company no longer
owns, directly or indirectly, any oil and gas properties.
Accordingly, the historical results of Compass are presented as
discontinued operations, and the operations of HGI Energy are
included in the Corporate and Other segment.
The operations of Salus, Energy & Infrastructure Capital,
LLC ("EIC") and CorAmerica Capital, LLC ("CorAmerica"), each an
asset manager subsidiary of the Company, were historically
presented in the Asset Management segment. During the fourth
quarter of the fiscal year 2016, the Company sold all of its
interest in CorAmerica to a third party. In addition, the Company
has been winding down the operations of Salus, and during the
Fiscal 2016 Quarter, completed the wind down of EIC's operations.
Due to the diminished operations of these businesses, the Company
is presenting the operations of Salus, EIC and CorAmerica within
the Corporate and Other segment. All historical results have been
restated to reflect this change.
Income from discontinued operations, net of tax for the Fiscal
2017 Quarter was $258.8 million and
was entirely attributable to FGL. Loss from discontinued
operations, net of tax for the Fiscal 2016 Quarter was $2.5 million due to a $35.6 million loss attributable to FGL, partially
offset by $33.1 million income
related to the operations of Compass which was sold during the
fiscal 2016 year. The increase in income of $294.4 million attributable to FGL was driven by
a write-up of the carrying value of the assets of business held for
sale to fair value less cost to sell of $144.5 million in accordance with US GAAP; the
non-recurrence of $90.9 million
income tax expense recorded in the Fiscal 2016 Quarter; and an
increase in net income attributable to FGL's operations of
$56.7 million.
The $33.1 million in income from
discontinued operations, net of tax attributable to Compass in the
Fiscal 2016 Quarter was primarily due to a gain on sale of oil and
gas properties of $105.6 million,
partially offset by a ceiling test impairment of $54.4 million.
Please also see "Certain Other Items" below.
Detail on First Quarter Segment Results:
Consumer Products:
Note: Organic net sales,
as described below, is a non-U.S. GAAP measure defined as net sales
excluding the effect of changes in foreign currency exchange rates
and impact from acquisitions. Adjusted EBITDA-Consumer Products, as
described below, is a non-U.S. GAAP measure that excludes interest,
income tax expense, certain purchase accounting fair value
adjustments, restructuring and related charges, acquisition and
integration related charges, depreciation and amortization expenses
and stock-based compensation. See "Non-U.S. GAAP Measures" and the
reconciliation of Reported Net Sales to Organic Net Sales and
Adjusted EBITDA-Consumer Products to the Consumer Product segment's
net income or loss in the tables accompanying this release.
Consumer Products reported consolidated net sales of
$1,211.8 million for the Fiscal 2017
Quarter, a decrease of $7.0 million,
or 0.6%, as compared to the $1,218.8
million reported in the Fiscal 2016 Quarter. Excluding the
impact of $19 million in unfavorable
foreign exchange, sales increased $11.8
million, or 1.0%, as compared to the Fiscal 2016 Quarter.
Such results were impacted by planned exits of unprofitable
businesses and two fewer shipping days. The shipping days impact
will largely benefit the fourth quarter of the Consumer Products
segment.
Gross profit, representing net Consumer Products sales minus
Consumer Products cost of goods sold, increased $9.3 million, or 2.1%, to $450.0 million in the Fiscal 2017 Quarter. The
increase was driven by an ongoing shift toward higher margin
products. Gross profit margin, representing gross profit as a
percentage of Consumer Products net sales, was 37.1% in the Fiscal
2017 Quarter, an increase from 36.2% for the Fiscal 2016 Quarter.
The gross profit margin percentage increase was primarily due to
strong productivity and improved mix, partially offset by the
negative impact of foreign exchange.
Operating income increased $8.5
million, or 6.0%, to $151.0
million in the Fiscal 2017 Quarter, as compared to the
$142.5 million reported in the Fiscal
2016 Quarter. The increase is primarily due to higher overall gross
profit margins.
Our Consumer Products segment's adjusted earnings before
interest, taxes, depreciation and amortization ("Adjusted EBITDA -
Consumer Products") increased by $7.1
million, or 3.4%, to $214.2
million versus the Fiscal 2016 Quarter. The increase was
primarily driven by $5.5 million
improvements in the hardware and home improvement product line due
to increase in net sales, cost improvements and product mix.
After the close of the Fiscal 2017 Quarter, on January 24, 2017, Spectrum Brands announced that
its Board of Directors declared a quarterly dividend of
$0.42 per share on Spectrum Brands'
common stock, which represents an increase of 10.5% compared to the
previous quarterly dividend of $0.38
per share. Over the past three years, the quarterly dividend that
Spectrum Brands has paid to its common stockholders has increased
40%.
Also on January 24, 2017, Spectrum
Brands announced that its Board of Directors authorized a new
three-year, $500 million program to repurchase shares of
Spectrum Brands common stock. The common stock repurchase
authorization was effective January 24,
2017 and replaces an existing three-year, $300
million common stock repurchase program scheduled to expire
in July 2018. The repurchase program may be suspended or
discontinued at any time at the discretion of Spectrum Brands.
Insurance:
For the Fiscal 2017 Quarter, the Insurance segment revenues
decreased $18.7 million to a loss of
$28.7 million from a loss of
$10.0 million for the Fiscal 2016
Quarter. The decrease in Insurance segment revenues was primarily
driven by a decrease in the fair value of the underlying fixed
maturity debt securities included in the funds withheld receivables
during the Fiscal 2017 Quarter due to market conditions with
increasing risk-free rates and widening credit spreads resulting in
generally lower valuations of fixed maturity debt securities
coupled with credit impairment losses due to intercompany
investments.
The operating loss of $15.4
million for the Fiscal 2017 Quarter reflected a decrease of
$15.4 million from the break-even
operating income reported for the Fiscal 2016 Quarter driven by
lower revenues as discussed above and partially offset by a
decrease in benefits and other policy changes reserves mainly due
to an increase in the insurance liability discount rate as compared
to the Fiscal 2016 Quarter.
Certain Other Items:
HRG Strategic Review Process
As previously disclosed, HRG has initiated a process to explore
strategic alternatives with a view to maximizing shareholder value.
Strategic alternatives may include, but are not limited to, a
merger, sale or other business combination involving the Company
and/or its assets. HRG has not set a definitive schedule to
complete its review of strategic alternatives and does not intend
to provide any further updates until such time as it determines in
its sole discretion, as required by law and/or it has entered into
definitive documentation with respect to any strategic transaction.
There can be no assurance that this process will result in a
transaction, or if a transaction is undertaken, as to its terms or
timing. In light of the strategic review process, HRG has elected
to discontinue hosting quarterly conference calls.
FGL and Anbang Merger
On November 8, 2015, FGL entered
into an Agreement and Plan of Merger (as amended, the "FGL Merger
Agreement", and the merger contemplated thereby, the "FGL Merger")
with Anbang Insurance Group Co., Ltd., and its subsidiaries, AB
Infinity Holding, Inc. and AB Merger Sub, Inc. On November 3, 2016, the FGL Merger Agreement was
amended to extend the outside termination date for the completion
of the Merger from November 7, 2016
to February 8, 2017. Accordingly,
either party may terminate the FGL Merger Agreement if the closing
of the FGL Merger does not occur on or prior to February 8, 2017. As of the date hereof, the
parties to the FGL Merger Agreement were in discussions regarding
an extension of the outside termination date beyond February 8, 2017. It is expected that FGL will
make an announcement on or about February 9,
2017 regarding the outcome of those discussions.
Corporate Financing Activity
On January 13, 2017, subsequent to
the end of the fiscal quarter, the Company, through its
wholly-owned subsidiaries, entered into a loan (the "2017 Loan"),
pursuant to which it may borrow up to an aggregate amount of
$150.0 million. The 2017 Loan bears
interest at an adjusted International Exchange London Interbank
Offered Rate ("LIBOR"), plus 2.35% per annum, payable quarterly.
The 2017 Loan matures on July 13,
2018, with an option for early termination by the borrower.
As of January 31, 2017, the Company
had drawn $50.0 million under the
2017 Loan.
Additional Information:
For more information on HRG's Consumer Products segment,
including information in addition to that included in our reports
and public announcements, interested parties should read Spectrum
Brands' announcements and public filings with the Securities and
Exchange Commission, including Spectrum Brands' most recent
earnings announcement, which may be accessed at
www.spectrumbrands.com.
For more information on FGL, which is reported herein as
discontinued operations, including information in addition to that
included in our reports and public announcements, interested
parties should read FGL's announcements and public filings with the
Securities and Exchange Commission, including FGL's most recent
earnings announcement, which may be accessed at www.fglife.com.
About HRG Group, Inc.
HRG Group, Inc. is a holding company that conducts its
operations through its operating subsidiaries. As of
December 31, 2016, the Company's principal operating
subsidiaries were: Spectrum Brands, a global branded consumer
products company; Fidelity & Guaranty Life, a life insurance
and annuity products company; and Front Street, a long-term
reinsurance company. HRG is headquartered in New York and traded on the New York Stock
Exchange under the symbol HRG. For more information on HRG, visit:
www.HRGgroup.com.
Forward Looking Statements
"Safe Harbor" Statement Under the Private Securities
Litigation Reform Act of 1995: This document contains, and
certain oral statements made by our representatives from time to
time may contain, forward-looking statements, including those
statements regarding the Company's review of strategic alternatives
and FGL's merger with Anbang, and any expected or anticipated
benefits from the Company's strategic review process and/or FGL's
merger with Anbang. Generally, forward-looking statements
include information concerning possible or assumed future
distributions from subsidiaries, other actions, events, results,
strategies and expectations and are identifiable by use of the
words "believes," "expects," "intends," "anticipates," "plans,"
"seeks," "estimates," "projects," "may," "will," "could," "might,"
or "continues" or similar expressions. Such forward-looking
statements are subject to risks and uncertainties that could cause
actual results, events and developments to differ materially from
those set forth in or implied by such statements. These statements
are based on the beliefs and assumptions of HRG's management and
the management of HRG's subsidiaries. Factors that could
cause actual results, events and developments to differ include,
without limitation: that the review of strategic alternatives at
HRG will result in a transaction, or if a transaction is
undertaken, as to its terms or timing; the ability of HRG's
subsidiaries to close previously announced transactions, including
statements regarding the closing of FGL's merger with Anbang
Insurance Group; the ability of HRG's subsidiaries to generate
sufficient net income and cash flows to make upstream cash
distributions; the decision of the boards of HRG's subsidiaries to
make upstream cash distributions, which is subject to numerous
factors such as restrictions contained in applicable financing
agreements, state and regulatory restrictions and other relevant
considerations as determined by the applicable board; HRG's
liquidity, which may be impacted by a variety of factors, including
the capital needs of HRG's subsidiaries; capital market conditions;
commodity market conditions; foreign exchange rates; HRG's and its
subsidiaries' ability to identify, pursue or complete any suitable
future acquisition or disposition opportunities, including
realizing such transaction's expected benefits and the timetable
for, completing applicable financial reporting requirements;
litigation; potential and contingent liabilities; management's
plans; changes in regulations; taxes; and the risks that may affect
the performance of the operating subsidiaries of HRG and those
factors listed under the caption "Risk Factors" in HRG's most
recent Annual Report on Form 10-K and subsequent Quarterly Reports
on Form 10-Q, filed with the Securities and Exchange
Commission. All forward-looking statements described herein
are qualified by these cautionary statements and there can be no
assurance that the actual results, events or developments
referenced herein will occur or be realized. Neither HRG nor
any of its affiliates undertake any obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operation
results, except as required by law.
Non-GAAP Measurements
Management believes that certain non-U.S. GAAP financial
measures may be useful in certain instances to provide additional
meaningful comparisons between current results and results in prior
operating periods. Reconciliations of such measures to the most
comparable U.S. GAAP measures are included herein.
Adjusted EBITDA — Consumer Products
Adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA - Consumer Products") is a non-GAAP
financial measure used by Spectrum Brands and one of the measures
used for determining Spectrum Brands' debt covenant compliance. We
believe that certain financial measures that are not prescribed by
generally accepted accounting principles ("GAAP") provides useful
information to investors because it reflects ongoing operating
performance and trends, excluding certain non-cash based expenses
and/or non-recurring items during each of the comparable periods
and facilitates comparisons between peer companies since interest,
taxes, depreciation and amortization can differ greatly between
organizations as a result of differing capital structures and tax
strategies.
EBITDA is calculated by excluding income tax expense, interest
expense, depreciation expense and amortization expense (from
intangible assets) from our Consumer Products segment's net income.
Adjusted EBITDA further excludes: (1) stock-based compensation
expense as it is a non-cash based compensation cost; (2)
acquisition and integration charges that consist of transaction
costs from acquisition transactions during the period or subsequent
integration related project costs directly associated with the
acquired business; (3) restructuring and related charges, which
consist of project costs associated with restructuring initiatives;
and (4) other adjustments. During the Fiscal 2017 Quarter, other
adjustments consisted of costs associated with the exiting of a key
executive, coupled with onboarding a key executive at Spectrum
Brands.
Organic Net Sales — Consumer Products
Our Consumer Products segment results contain financial
information regarding organic net sales, which is defined as net
sales excluding the effect of changes in foreign currency exchange
rates and/or impact from acquisitions (when applicable). We believe
this non-GAAP measure provides useful information to investors
because it reflects regional and operating performance from our
Consumer Products segment's activities without the effect of
changes in currency exchange rate and/or acquisitions. The Consumer
Products segment uses organic net sales as one measure to monitor
and evaluate their regional and segment performance. Organic growth
is calculated by comparing organic net sales to net sales in the
prior period. The effect of changes in currency exchange rates is
determined by translating the period's net sales using the currency
exchange rates that were in effect during the prior comparative
period. Net sales are attributed to the geographic regions based on
the country of destination. Spectrum Brands excludes net sales from
acquired businesses in the current period for which there are no
comparable sales in the prior period.
While management believes that non-GAAP measurements are useful
supplemental information, such adjusted results are not intended to
replace the Company's GAAP financial results or the GAAP financial
results of our Consumer Products segment. EBITDA and Adjusted
EBITDA are measures that are not prescribed by U.S. GAAP. EBITDA
and Adjusted EBITDA exclude changes in working capital, capital
expenditures and other items that are set forth on a cash flow
statement presentation of a company's operating, investing and
financing activities. As such, we encourage investors not to use
these measures as substitutes for the determination of net income,
net cash provided by operating activities or other similar GAAP
measures.
For further information contact:
HRG Group, Inc.
Investor Relations
Tel: 212.906.8555
Email: investorrelations@HRGgroup.com
(Tables Follow)
HRG GROUP, INC.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
millions)
|
|
|
December 31,
2016
|
|
September 30,
2016
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
348.8
|
|
|
$
|
497.3
|
|
Funds withheld
receivables
|
1,609.0
|
|
|
1,650.4
|
|
Receivables,
net
|
556.5
|
|
|
556.3
|
|
Inventories,
net
|
779.7
|
|
|
740.6
|
|
Deferred tax
assets
|
48.4
|
|
|
42.6
|
|
Property, plant and
equipment, net
|
569.1
|
|
|
543.4
|
|
Goodwill
|
2,464.5
|
|
|
2,478.4
|
|
Intangibles,
net
|
2,327.9
|
|
|
2,372.5
|
|
Other
assets
|
157.2
|
|
|
172.6
|
|
Assets of business
held for sale
|
26,801.6
|
|
|
26,738.7
|
|
Total
assets
|
$
|
35,662.7
|
|
|
$
|
35,792.8
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Insurance
reserves
|
$
|
1,721.9
|
|
|
$
|
1,751.3
|
|
Debt
|
5,459.0
|
|
|
5,430.9
|
|
Accounts payable and
other current liabilities
|
900.4
|
|
|
989.8
|
|
Employee benefit
obligations
|
111.7
|
|
|
125.4
|
|
Deferred tax
liabilities
|
573.1
|
|
|
546.0
|
|
Other
liabilities
|
26.7
|
|
|
32.0
|
|
Liabilities of
business held for sale
|
25,200.5
|
|
|
25,100.2
|
|
Total
liabilities
|
33,993.3
|
|
|
33,975.6
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
HRG Group,
Inc. shareholders' equity:
|
|
|
|
Common
stock
|
2.0
|
|
|
2.0
|
|
Additional paid-in
capital
|
1,388.0
|
|
|
1,447.1
|
|
Accumulated
deficit
|
(819.7)
|
|
|
(1,031.9)
|
|
Accumulated other
comprehensive (loss) income
|
(22.2)
|
|
|
220.9
|
|
Total HRG Group, Inc.
shareholders' equity
|
548.1
|
|
|
638.1
|
|
Noncontrolling interest
|
1,121.3
|
|
|
1,179.1
|
|
Total shareholders'
equity
|
1,669.4
|
|
|
1,817.2
|
|
Total liabilities and
equity
|
$
|
35,662.7
|
|
|
$
|
35,792.8
|
|
HRG GROUP, INC.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions,
except per share data)
|
|
|
|
Three months ended
December 31,
|
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
Net consumer and
other product sales
|
|
$
|
1,211.8
|
|
|
$
|
1,218.8
|
|
Net investment
income
|
|
10.7
|
|
|
20.3
|
|
Net investment
losses
|
|
(33.8)
|
|
|
(32.0)
|
|
Insurance and
investment product fees and other
|
|
0.9
|
|
|
2.3
|
|
Total
revenues
|
|
1,189.6
|
|
|
1,209.4
|
|
Operating costs
and expenses:
|
|
|
|
|
Cost of consumer
products and other goods sold
|
|
761.8
|
|
|
778.1
|
|
Benefits and other
changes in policy reserves
|
|
(11.6)
|
|
|
0.8
|
|
Selling, acquisition,
operating and general expenses
|
|
321.7
|
|
|
330.7
|
|
Total operating costs
and expenses
|
|
1,071.9
|
|
|
1,109.6
|
|
Operating
income
|
|
117.7
|
|
|
99.8
|
|
Interest
expense
|
|
(91.7)
|
|
|
(95.2)
|
|
Other income
(expense), net
|
|
1.4
|
|
|
(0.7)
|
|
Income from
continuing operations before income taxes
|
|
27.4
|
|
|
3.9
|
|
Income tax expense
(benefit)
|
|
25.4
|
|
|
(5.6)
|
|
Net income from
continuing operations
|
|
2.0
|
|
|
9.5
|
|
Income (loss) from
discontinued operations, net of tax
|
|
258.8
|
|
|
(2.5)
|
|
Net income
|
|
260.8
|
|
|
7.0
|
|
Less: Net income
attributable to noncontrolling interest
|
|
48.6
|
|
|
40.9
|
|
Net income (loss)
attributable to controlling interest
|
|
$
|
212.2
|
|
|
$
|
(33.9)
|
|
|
|
|
|
|
Amounts attributable
to controlling interest:
|
|
|
|
|
Net loss from
continuing operations
|
|
$
|
(25.5)
|
|
|
$
|
(21.8)
|
|
Net income (loss)
from discontinued operations
|
|
237.7
|
|
|
(12.1)
|
|
Net income (loss)
attributable to controlling interest
|
|
$
|
212.2
|
|
|
$
|
(33.9)
|
|
|
|
|
|
|
Net income (loss) per
common share attributable to controlling interest:
|
|
|
|
|
Basic loss from
continuing operations
|
|
$
|
(0.13)
|
|
|
$
|
(0.11)
|
|
Basic income (loss)
from discontinued operations
|
|
1.19
|
|
|
(0.06)
|
|
Basic
|
|
$
|
1.06
|
|
|
$
|
(0.17)
|
|
|
|
|
|
|
Diluted loss from
continuing operations
|
|
$
|
(0.13)
|
|
|
$
|
(0.11)
|
|
Diluted income (loss)
from discontinued operations
|
|
1.19
|
|
|
(0.06)
|
|
Diluted
|
|
$
|
1.06
|
|
|
$
|
(0.17)
|
|
HRG GROUP, INC.
AND SUBSIDIARIES
RESULTS OF
OPERATIONS BY SEGMENT
(In
millions)
|
|
|
|
Fiscal
Quarter
|
|
|
2017
|
|
2016
|
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
Consumer
Products
|
|
$
|
1,211.8
|
|
|
$
|
1,218.8
|
|
Insurance
|
|
(28.7)
|
|
|
(10.0)
|
|
Intersegment
adjustments and eliminations
|
|
6.2
|
|
|
(5.4)
|
|
Consolidated segment
revenues
|
|
1,189.3
|
|
|
1,203.4
|
|
Corporate and
Other
|
|
0.3
|
|
|
6.0
|
|
Total
revenues
|
|
$
|
1,189.6
|
|
|
$
|
1,209.4
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
Consumer
Products
|
|
$
|
151.0
|
|
|
$
|
142.5
|
|
Insurance
|
|
(15.4)
|
|
|
—
|
|
Intersegment
elimination
|
|
2.3
|
|
|
(19.0)
|
|
Total segment
operating income
|
|
137.9
|
|
|
123.5
|
|
Corporate and
Other
|
|
(20.2)
|
|
|
(23.7)
|
|
Consolidated
operating income
|
|
117.7
|
|
|
99.8
|
|
Interest
expense
|
|
(91.7)
|
|
|
(95.2)
|
|
Other income
(expense), net
|
|
1.4
|
|
|
(0.7)
|
|
Income from
continuing operations before income taxes
|
|
$
|
27.4
|
|
|
$
|
3.9
|
|
HRG GROUP, INC.
AND SUBSIDIARIES ADJUSTED EBITDA AND ORGANIC NET SALES
RECONCILIATIONS (In millions)
|
|
Adjusted EBITDA —
Consumer Products
|
|
The table below shows
the adjustments made to the reported net income of the Consumer
Products segment to calculate its Adjusted EBITDA
(unaudited):
|
|
|
|
|
Fiscal
Quarter
|
Reconciliation to
reported net income:
|
|
2017
|
|
2016
|
Reported net income -
Consumer Products segment
|
|
$
|
65.2
|
|
|
$
|
73.7
|
|
Interest
expense
|
|
55.8
|
|
|
58.4
|
|
Income tax
expense
|
|
31.1
|
|
|
6.9
|
|
Depreciation of
properties
|
|
22.4
|
|
|
23.0
|
|
Amortization of
intangibles
|
|
23.6
|
|
|
23.6
|
|
EBITDA - Consumer
Products segment
|
|
198.1
|
|
|
185.6
|
|
Stock-based
compensation
|
|
8.8
|
|
|
10.1
|
|
Acquisition and
integration related charges
|
|
4.1
|
|
|
9.9
|
|
Restructuring and
related charges
|
|
3.2
|
|
|
1.2
|
|
Other
|
|
—
|
|
|
0.3
|
|
Adjusted EBITDA -
Consumer Products segment
|
|
$
|
214.2
|
|
|
$
|
207.1
|
|
Organic Net Sales
— Consumer Products
|
|
The tables below
represent a reconciliation of reported net sales to organic net
sales, by product line for the Fiscal 2017 Quarter , compared to
net sales for the Fiscal 2016 Quarter (unaudited):
|
|
|
|
|
Net
Sales
|
|
Effect of
Changes in
Currency
|
|
Organic Net
Sales
|
|
Net Sales
Fiscal 2016
Quarter
|
|
$
Variance
|
|
%
Variance
|
Hardware and home
improvement products
|
|
$
|
288.8
|
|
|
$
|
0.2
|
|
|
$
|
289.0
|
|
|
$
|
282.7
|
|
|
$
|
6.3
|
|
|
2.2
|
%
|
Consumer
batteries
|
|
260.5
|
|
|
4.5
|
|
|
265.0
|
|
|
252.6
|
|
|
12.4
|
|
|
4.9
|
%
|
Global pet
supplies
|
|
194.2
|
|
|
2.8
|
|
|
197.0
|
|
|
203.4
|
|
|
(6.4)
|
|
|
(3.1)%
|
|
Small
appliances
|
|
186.4
|
|
|
7.5
|
|
|
193.9
|
|
|
189.9
|
|
|
4.0
|
|
|
2.1
|
%
|
Personal care
products
|
|
162.6
|
|
|
3.7
|
|
|
166.3
|
|
|
168.8
|
|
|
(2.5)
|
|
|
(1.5)%
|
|
Global auto
care
|
|
69.5
|
|
|
0.1
|
|
|
69.6
|
|
|
73.7
|
|
|
(4.1)
|
|
|
(5.6)%
|
|
Home and garden
control products
|
|
49.8
|
|
|
—
|
|
|
49.8
|
|
|
47.7
|
|
|
2.1
|
|
|
4.4
|
%
|
Total
|
|
$
|
1,211.8
|
|
|
$
|
18.8
|
|
|
$
|
1,230.6
|
|
|
$
|
1,218.8
|
|
|
$
|
11.8
|
|
|
1.0
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/hrg-group-inc-reports-first-quarter-results-300403689.html
SOURCE HRG Group, Inc.