Spectrum Brands Holdings, Inc. (NYSE: SPB), a global consumer
products company offering an expanding portfolio of leading brands
providing superior value to consumers and customers every day,
today reported results for the third quarter of fiscal 2017 ended
July 2, 2017.
This press release includes non-GAAP metrics such as organic net
sales, adjusted diluted earnings per share (EPS), adjusted EBITDA,
adjusted EBITDA margin, organic adjusted EBITDA and adjusted free
cash flow. See Other Supplemental Information for reconciliation to
comparable GAAP metrics.
Fiscal 2017 Third Quarter Highlights:
- Net sales of $1.30 billion in the
third quarter of fiscal 2017 decreased 4.2 percent compared to
$1.36 billion last year. Excluding the negative impact of $12.0
million of foreign exchange and acquisition sales of $7.2 million,
organic net sales fell 3.9 percent from the prior year.
- Net income of $76.9 million and
diluted EPS of $1.31 in the third quarter of fiscal 2017 decreased
compared to net income of $101.9 million and diluted EPS of $1.71
in fiscal 2016 primarily due to lower volumes, partially offset by
reduced interest expense.
- Adjusted diluted EPS of $1.71 in the
third quarter of fiscal 2017 fell 1.2 percent compared to $1.73
last year primarily due to lower volumes and the negative impact of
foreign exchange, partially offset by reduced interest expense and
lower average shares outstanding.
- Operating income of $157.8 million
in the third quarter of fiscal 2017 decreased 23.7 percent compared
to $206.7 million in fiscal 2016 primarily as a result of lower
volumes and the negative impact of foreign exchange, incremental
costs of $24.9 million from the Pet division U.S. rawhide safety
recall, and additional restructuring costs of $15.7 million,
partially offset by lower operating expenses.
- Operating income margin of 12.1
percent in the third quarter of fiscal 2017 fell 310 basis points
compared to 15.2 percent in the prior year.
- Adjusted EBITDA of $263.9 million in
the third quarter of fiscal 2017 decreased 5.5 percent compared to
$279.2 million in fiscal 2016. Excluding the negative impact of
foreign exchange of $6.7 million and acquisition EBITDA of $2.6
million, organic adjusted EBITDA of $268.0 million decreased 4.0
percent versus the prior year.
- Adjusted EBITDA margin of 20.2
percent in the third quarter of fiscal 2017 was slightly lower
compared to 20.5 percent in fiscal 2016 primarily due to mix and
the negative impact of foreign exchange.
- Adjusted free cash flow is expected
to grow to approximately $575-$590 million versus $535 million in
fiscal 2016 and $454 million in fiscal 2015, based on expected net
cash provided from operating activities of $680-$695 million after
expected purchases of property, plant and equipment of $105-$115
million.
“Our third quarter performance is not representative of the
positive outlook we have for our growth prospects, strategic
direction and efficient global operating model,” said Andreas
Rouvé, Chief Executive Officer of Spectrum Brands Holdings. “A
confluence of factors, some macro and others Company-specific,
negatively impacted our results in the quarter.
“Systemic U.S. retailer inventory reduction programs and
unfavorable early season weather that reduced customer orders and
slowed POS predominantly in our seasonal Home & Garden and
Global Auto Care businesses impacted sales by approximately $25
million,” Mr. Rouvé said.
“At the same time, we experienced temporary, transitional supply
chain challenges with our HHI U.S. distribution center
consolidation in Kansas and the GAC U.S. operating consolidation in
Ohio that affected shipping levels in the short-term and impacted
sales by approximately $24 million,” he said. “However, both
projects remain on schedule and the issues are being quickly
addressed with delayed shipments shifted into our fourth quarter.
Despite the start-up challenges, these major consolidation projects
will bring a number of important productivity, efficiency and other
benefits, including reduced operating costs, lower working capital
and even better service to our customers.
“In addition, our voluntary safety recall on June 10 of certain
U.S. rawhide dog chews affected our Pet sales by approximately $11
million and, as expected, the planned exits of low-margin
unprofitable businesses of approximately $10 million also impacted
our third quarter revenues as we anniversary last year’s exits
throughout fiscal 2017,” Mr. Rouvé said.
“On the other hand, we are pleased to report that our e-commerce
business was again a bright spot across our entire portfolio with
strong, double-digit growth in the third quarter, and we continue
to invest more with our retail partners and expand our digital
marketing resources especially to drive our innovative and
higher-priced products,” he said.
“Despite our third quarter shortfall, we remain confident about
our growth prospects as we continue to invest into our innovation
pipeline and add resources to pursue our many white space
opportunities around the world,” Mr. Rouvé said. “We also completed
two accretive acquisitions in our Pet business which we are quickly
integrating.”
Fiscal 2017 Third Quarter Consolidated Financial
Results
Net sales of $1.30 billion in the third quarter of fiscal 2017
decreased 4.2 percent compared to $1.36 billion in fiscal 2016.
Excluding the negative impact of $12.0 million of foreign exchange
and acquisition sales of $7.2 million, organic net sales declined
3.9 percent.
Gross profit and gross profit margin in the third quarter of
fiscal 2017 were $473.4 million and 36.3 percent, respectively,
compared to $530.6 million and 39.0 percent, respectively, last
year. The gross profit margin percentage decrease was primarily due
to unfavorable mix, the negative impact of the Pet U.S. rawhide
safety recall, increased restructuring-related activities and
temporary operating start-up inefficiencies, along with the
negative impact of foreign exchange.
Operating expenses of $315.6 million in the third quarter of
fiscal 2017 fell 2.6 percent compared to $323.9 million in the
prior year primarily due to lower general and administrative
costs.
Operating income of $157.8 million in the third quarter of
fiscal 2017 decreased 23.7 percent versus $206.7 million last year
as a result of lower volumes, the negative impact of foreign
exchange, the unfavorable impact of the Pet U.S. rawhide safety
recall and increased restructuring-related activities. Operating
income margin of 12.1 percent in the third quarter of fiscal 2017
decreased 310 basis points versus 15.2 percent in 2016.
Net income was $76.9 million, or $1.31 diluted EPS, in the third
quarter of fiscal 2017 on average diluted shares and common stock
equivalents outstanding of 58.9 million. In the third quarter of
fiscal 2016, net income was $101.9 million, or $1.71 diluted EPS,
on average diluted shares and common stock equivalents outstanding
of 59.6 million. The decrease in net income and diluted EPS was
primarily due to reduced volumes, partially offset by lower
interest expense. The Company generated adjusted diluted EPS of
$1.71 in the third quarter of fiscal 2017, a decrease of 1.2
percent versus $1.73 in the prior year.
Adjusted EBITDA of $263.9 million in the third quarter of fiscal
2017 decreased 5.5 percent compared to $279.2 million in fiscal
2016. Personal care and small appliances reported increased
adjusted EBITDA. Excluding the negative impact of $6.7 million of
foreign exchange and acquisition EBITDA of $2.6 million, organic
adjusted EBITDA of $268.0 declined 4.0 percent versus the third
quarter of fiscal 2016. Reported adjusted EBITDA margin decreased
30 basis points to 20.2 percent compared to 20.5 percent last
year.
Fiscal 2017 Nine Months Consolidated Financial
Results
Net sales of $3.69 billion in the nine months of fiscal 2017
decreased 2.8 percent compared to $3.79 billion for the same period
in fiscal 2016. Excluding the negative impact of $40.6 million of
foreign exchange and acquisition sales of $7.2 million, organic net
sales in the nine months of fiscal 2017 fell 1.9 percent from the
prior year.
Operating income of $453.0 million in the nine months of fiscal
2017 decreased from $497.7 million last year, while operating
income margin fell 80 basis points to 12.3 percent versus 13.1
percent in 2016.
Net income was $201.0 million, or $3.40 diluted EPS, in the nine
months of fiscal 2017 on average shares and common stock
equivalents outstanding of 59.1 million. In the nine months of
fiscal 2016, net income was $268.2 million, or $4.51 diluted EPS,
on average shares and common stock equivalents outstanding of 59.5
million. The decrease in net income and EPS was primarily due to
increased restructuring-related costs and a higher effective tax
rate. The Company generated adjusted EPS of $4.11 in the nine
months of fiscal 2017, an increase of 5.7 percent compared to $3.89
last year primarily as a result of operating efficiencies and lower
interest costs, partially offset by the negative impact of foreign
exchange.
Fiscal 2017 nine months adjusted EBITDA of $698.2 million
declined compared to adjusted EBITDA in the nine months of fiscal
2016 of $715.9 million. Excluding the negative impact of $17.0
million of foreign exchange and acquisition EBITDA of $2.6 million,
organic adjusted EBITDA of $712.6 million declined 0.5 percent in
the nine months of fiscal 2017 versus the prior year. Reported
adjusted EBITDA margin of 18.9 percent in the nine months of fiscal
2017 was unchanged versus fiscal 2016.
Fiscal 2017 Third Quarter Segment Level Data
Global Batteries & Appliances
(GBA)
Three Month
Period Ended Nine Month Period Ended (in millions,
except %) July 2, 2017 July 3, 2016
Variance July 2, 2017 July 3, 2016
Variance Net Sales $ 441.1 $ 454.1 $ (13.0 ) (2.9 %) 1,464.0
$ 1,490.3 $ (26.3 ) (1.8 %) Operating Income 44.9 46.1 (1.2 ) (2.6
%) 172.0 174.9 (2.9 ) (1.7 %) Operating Income Margin 10.2 % 10.2 %
- bps 11.7 % 11.7 % - bps Adjusted EBITDA 64.6 64.3 0.3 0.5 % 233.5
228.1 5.4 2.4 % Adjusted EBITDA Margin 14.6 % 14.2 % 40 bps 15.9 %
15.3 % 60 bps
Third quarter net sales decreased primarily due to lower
personal care and small appliances revenues. Organic net sales fell
1.0 percent.
Global battery net sales decreased $2.4 million or 1.3 percent.
Solid growth in Europe, primarily in alkaline and hearing aid
batteries, and in Latin America was offset by lower revenues in the
U.S. Excluding negative foreign exchange impacts of $2.4 million,
organic net sales were unchanged.
Net sales for the global personal care product category
decreased $4.9 million or 4.2 percent. Growth in Latin America was
more than offset by lower U.S. and European revenues largely
attributable to implemented price increases in Europe, increased
competitor promotions and sluggish POS in the U.S. Excluding
negative foreign exchange impacts of $2.3 million, organic net
sales declined 2.2 percent.
Net sales in the global small appliances product category fell
$5.7 million or 3.8 percent. Higher U.S. revenues from growth in
e-commerce and mass channels was more than offset by lower sales in
Europe and Latin America from a combination of Brexit-related price
increases and exits from unprofitable businesses. Excluding
negative foreign exchange impacts of $3.7 million, organic net
sales decreased 1.3 percent.
The third quarter operating income decrease was due to lower
volumes, the negative impact of foreign exchange and slightly
higher depreciation and amortization, partially offset by cost
improvements. Slight increases in adjusted EBITDA and margin were
attributable to cost savings and price increases which more than
offset lower volumes and the negative impact of foreign exchange.
Excluding foreign exchange impacts of $5.5 million, organic
adjusted EBITDA of $70.1 million grew 9.0 percent.
Hardware & Home Improvement
(HHI)
Three Month Period
Ended Nine Month Period Ended (in millions, except
%) July 2, 2017 July 3, 2016 Variance
July 2, 2017 July 3, 2016 Variance Net Sales $
324.7 $ 328.5 $ (3.8 ) (1.2 %) $ 927.2 $ 912.9 $ 14.3 1.6 %
Operating Income 45.1 52.4 (7.3 ) (13.9 %) 137.4 134.1 3.3 2.5 %
Operating Income Margin 13.9 % 16.0 % (210 ) bps 14.8 % 14.7 % 10
bps Adjusted EBITDA 62.2 65.2 (3.0 ) (4.6 %) 178.0 172.5 5.5 3.2 %
Adjusted EBITDA Margin 19.2 % 19.8 % (60 ) bps 19.2 % 18.9 % 30 bps
Slightly lower third quarter net sales were due to temporary
operating start-up issues connected with the U.S. distribution
center consolidation project which negatively impacted sales by
approximately $20 million, along with the planned exit of
unprofitable businesses in Mexico which adversely impacted growth
by approximately 1.0 percent. Given open orders at the end of the
third quarter, solid sales growth resumption is expected in the
fourth quarter.
Decreases in third quarter operating income, adjusted EBITDA and
margins were primarily due to unfavorable product mix.
Global Pet Supplies (PET)
Three Month Period
Ended Nine Month Period Ended (in millions, except
%) July 2, 2017 July 3, 2016 Variance
July 2, 2017 July 3, 2016 Variance Net Sales $
189.9 $ 207.1 $ (17.2 ) (8.3 %) $ 576.0 $ 619.0 $ (43.0 ) (6.9 %)
Operating Income (5.2 ) 25.7 (30.9 ) (120.2 %) 34.4 60.5 (26.1 )
(43.1 %) Operating Income Margin (2.7 %) 12.4 % (1,510 ) bps 6.0 %
9.8 % (380 ) bps Adjusted EBITDA 36.1 37.7 (1.6 ) (4.2 %) 98.7 98.3
0.4 0.4 % Adjusted EBITDA Margin 19.0 % 18.2 % 80 bps 17.1 % 15.9 %
120 bps
The third quarter net sales decline was the result of lower
revenues in the U.S. and Europe. European dog and cat food sales
declined largely from the acceleration of the planned exit of a pet
food customer tolling agreement of $4.7 million. U.S. companion
animal sales were negatively impacted by approximately $11 million
from the rawhide dog chew product safety recall, as well as
sluggish store traffic in certain channels and the planned exits
last year of low-margin private label rawhide and chicken jerky
business. These planned exits adversely impacted sales by
approximately 2.7 percent. Excluding the unfavorable impact of
foreign exchange of $2.7 million and acquisition sales of $7.2
million, organic net sales decreased 10.5 percent in the third
quarter.
Decreased operating income and margin were primarily driven by
the impact of the recall and lower volumes. Adjusted EBITDA
declined as a result of reduced volumes, partially offset by cost
savings. Adjusted EBITDA margin improved due to favorable mix and
acquisition sales. Excluding negative foreign exchange impacts of
$1.0 million and acquisition EBITDA of $2.6 million, organic
adjusted EBITDA of $34.5 million fell 8.5 percent.
Home and Garden (H&G)
Three Month Period
Ended Nine Month Period Ended (in millions, except
%) July 2, 2017 July 3, 2016 Variance
July 2, 2017 July 3, 2016 Variance Net Sales $
192.4 $ 212.0 $ (19.6 ) (9.2 %) $ 374.2 $ 414.7 $ (40.5 ) (9.8 %)
Operating Income 55.3 63.1 (7.8 ) (12.4 %) 88.4 106.1 (17.7 ) (16.7
%) Operating Income Margin 28.7 % 29.8 % (110 ) bps 23.6 % 25.6 %
(200 ) bps Adjusted EBITDA 59.5 67.0 (7.5 ) (11.2 %) 100.8 118.3
(17.5 ) (14.8 %) Adjusted EBITDA Margin 30.9 % 31.6 % (70 ) bps
26.9 % 28.5 % (160 ) bps
Lower third quarter net sales were driven by mass and DIY
retailer inventory management programs that negatively impacted
sales by approximately $17 million and challenging weather that
limited POS and customer orders, as well as strong prior-year
repellent orders driven by Zika virus concerns.
Operating income, adjusted EBITDA and margins declined in the
third quarter predominantly due to lower volumes as well as
unfavorable product mix.
Global Auto Care (GAC)
Three Month Period
Ended Nine Month Period Ended (in millions, except
%) July 2, 2017 July 3, 2016 Variance
July 2, 2017 July 3, 2016 Variance Net Sales $
155.8 $ 159.8 $ (4.0 ) (2.5 %) $ 344.2 $ 353.1 $ (8.9 ) (2.5 %)
Operating Income 32.5 44.5 (12.0 ) (27.0 %) 80.1 93.1 (13.0 ) (14.0
%) Operating Income Margin 20.9 % 27.8 % (690 ) bps 23.3 % 26.4 %
(310 ) bps Adjusted EBITDA 50.7 54.2 (3.5 ) (6.5 %) 115.9 122.0
(6.1 ) (5.0 %) Adjusted EBITDA Margin 32.5 % 33.9 % (140 ) bps 33.7
% 34.6 % (90 ) bps
Lower third quarter net sales were attributable largely to mass
and auto retailer destocking of approximately $8 million, cooler
and wet weather conditions versus last year, and temporary start-up
issues at GAC’s new Dayton, Ohio operating facility that adversely
affected sales by approximately $4 million.
Reduced operating income, adjusted EBITDA and margins in the
third quarter were the result of lower volumes and higher marketing
investments.
Liquidity and Debt
Spectrum Brands completed its fiscal 2017 third quarter with a
solid liquidity position, including a cash balance of approximately
$110 million and more than $385 million available on its $700
million Cash Flow Revolver.
As of the end of the third quarter, the Company had
approximately $4,159 million of debt outstanding, consisting of
approximately $293 million outstanding on its Cash Flow Revolver, a
series of secured Term Loans in the aggregate amount of $1,304
million, $2,306 million of senior unsecured notes, and
approximately $256 million of capital leases and other
obligations.
During the third quarter, the Company repurchased 487,677 shares
of common stock for $62.9 million or $128.92 per share on
average.
Fiscal 2017 Outlook
Spectrum Brands expects fiscal 2017 reported net sales to grow
above category rates for most categories, along with an anticipated
negative impact from foreign exchange of approximately 70 to 90
basis points.
Fiscal 2017 adjusted free cash flow is projected to be
approximately $575-$590 million compared to $535 million in fiscal
2016. Capital expenditures are expected to be in the range of $105
million to $115 million, including rollover spending from fiscal
2016. These incremental investments will support footprint
optimization, vertical integration improvements, technology and
innovation and are expected to enhance the Company’s margin
structure and organic net sales growth rate.
Conference Call/Webcast Scheduled for 9:00 A.M. Eastern Time
Today
Spectrum Brands will host an earnings conference call and
webcast at 9:00 a.m. Eastern Time today, July 27. To access the
live conference call, U.S. participants may call 877-556-5260 and
international participants may call 973-532-4903. The conference ID
number is 46526457. A live webcast and related presentation slides
will be available by visiting the Event Calendar page in the
Investor Relations section of Spectrum Brands’ website at
www.spectrumbrands.com.
A replay of the live webcast also will be accessible through the
Event Calendar page in the Investor Relations section of the
Company’s website. A telephone replay of the conference call will
be available through Thursday, August 10. To access this replay,
participants may call 855-859-2056 and use the same conference ID
number.
About Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings, a member of the Russell 1000 Index, is
a global and diversified consumer products company and a leading
supplier of consumer batteries, residential locksets, residential
builders’ hardware, plumbing, shaving and grooming products,
personal care products, small household appliances, specialty pet
supplies, lawn and garden and home pest control products, personal
insect repellents, and auto care products. Helping to meet the
needs of consumers worldwide, our Company offers a broad portfolio
of market-leading, well-known and widely trusted brands including
Rayovac®, VARTA®, Kwikset®, Weiser®, Baldwin®, National Hardware®,
Pfister®, Remington®, George Foreman®, Black + Decker®, Tetra®,
Marineland®, Nature’s Miracle®, Dingo®, 8-in-1®, FURminator®, IAMS®
and Eukanuba® (Europe only), Healthy-Hide®, Digest-eeze™,
Littermaid®, Spectracide®, Cutter®, Repel®, Hot Shot®, Black Flag®,
Liquid Fence®, Armor All®, STP® and A/C PRO®. Spectrum Brands'
products are sold in approximately 160 countries. Spectrum Brands
Holdings generated net sales of approximately $5.04 billion in
fiscal 2016. For more information, visit
www.spectrumbrands.com.
Non-GAAP Measurements
Management believes that certain non-GAAP financial measures may
be useful in certain instances to provide additional meaningful
comparisons between current results and results in prior operating
periods. Management believes that organic net sales provide for a
more complete understanding of underlying business trends of
regional and segment performance by excluding the impact of
currency exchange rate fluctuations and the impact of acquisitions.
In addition, within this release, including the supplemental
information attached hereto, reference is made to adjusted diluted
EPS, adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA), and adjusted EBITDA margin. Adjusted EBITDA
is a metric used by management to evaluate segment performance and
frequently used by the financial community which provides insight
into an organization’s operating trends 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. Adjusted EBITDA
also is one of the measures used for determining the Company’s debt
covenant. Adjusted EBITDA excludes certain items that are unusual
in nature or not comparable from period to period. Adjusted EBITDA
margin reflects adjusted EBITDA as a percentage of net sales of the
Company. Organic adjusted EBITDA excludes the impact of currency
exchange rate fluctuations and acquisitions. The Company’s
management uses adjusted diluted EPS as one means of analyzing the
Company’s current and future financial performance and identifying
trends in its financial condition and results of operations.
Management believes that adjusted diluted EPS is a useful measure
for providing further insight into our operating performance
because it eliminates the effects of certain items that are not
comparable from one period to the next. An income tax adjustment is
included in adjusted diluted EPS to exclude the impact of the
valuation allowance against deferred taxes and other tax-related
items in order to reflect a normalized ongoing effective tax rate
of 35%. The Company’s management believes that adjusted free cash
flow is useful to both management and investors in their analysis
of the Company’s ability to service and repay its debt and meet its
working capital requirements. Adjusted free cash flow should not be
considered in isolation or as a substitute for pretax income, net
income, cash provided by (used in) operating activities or other
statement of income or cash flow statement data prepared in
accordance with GAAP or as a measure of profitability or liquidity.
In addition, the calculation of adjusted free cash flow does not
reflect cash used to service debt and therefore, does not reflect
funds available for investment or discretionary uses. The Company
provides this information to investors to assist in comparisons of
past, present and future operating results and to assist in
highlighting the results of on-going operations. While the
Company’s management believes that non-GAAP measurements are useful
supplemental information, such adjusted results are not intended to
replace the Company’s GAAP financial results and should be read in
conjunction with those GAAP results. Other Supplemental Information
has been provided to demonstrate reconciliation of non-GAAP
measurements discussed above to most relevant GAAP financial
measurements.
Forward-Looking Statements
Certain matters discussed in this news release and other oral
and written statements by representatives of the Company regarding
matters such as the Company’s ability to meet its expectations for
its fiscal 2017 (including expectations regarding capital
expenditures and its ability to increase its net sales, free cash
flow and adjusted EBITDA) may be forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. We have tried, whenever possible, to identify these
statements by using words like “future,” “anticipate”, “intend,”
“plan,” “estimate,” “believe,” “expect,” “project,” “forecast,”
“could,” “would,” “should,” “will,” “may,” and similar expressions
of future intent or the negative of such terms. These statements
are subject to a number of risks and uncertainties that could cause
results to differ materially from those anticipated as of the date
of this release. Actual results may differ materially as a result
of (1) the impact of our indebtedness on our business, financial
condition and results of operations; (2) the impact of restrictions
in our debt instruments on our ability to operate our business,
finance our capital needs or pursue or expand business strategies;
(3) any failure to comply with financial covenants and other
provisions and restrictions of our debt instruments; (4) the impact
of actions taken by significant stockholders; (5) the impact of
expenses resulting from the implementation of new business
strategies, divestitures or current and proposed restructuring
activities; (6) our inability to successfully integrate and operate
new acquisitions at the level of financial performance anticipated;
(7) the unanticipated loss of key members of senior management; (8)
the impact of fluctuations in commodity prices, costs or
availability of raw materials or terms and conditions available
from suppliers, including suppliers’ willingness to advance credit;
(9) interest rate and exchange rate fluctuations; (10) our ability
to utilize our net operating loss carry-forwards to offset tax
liabilities from future taxable income; (11) the loss of,
significant reduction in, or dependence upon, sales to any
significant retail customer(s); (12) competitive promotional
activity or spending by competitors, or price reductions by
competitors; (13) the introduction of new product features or
technological developments by competitors and/or the development of
new competitors or competitive brands; (14) the effects of general
economic conditions, including inflation, recession or fears of a
recession, depression or fears of a depression, labor costs and
stock market volatility or changes in trade, monetary or fiscal
policies in the countries where we do business; (15) changes in
consumer spending preferences and demand for our products; (16) our
ability to develop and successfully introduce new products, protect
our intellectual property and avoid infringing the intellectual
property of third parties; (17) our ability to successfully
implement, achieve and sustain manufacturing and distribution cost
efficiencies and improvements, and fully realize anticipated cost
savings; (18) the cost and effect of unanticipated legal, tax or
regulatory proceedings or new laws or regulations (including
environmental, public health and consumer protection regulations);
(19) public perception regarding the safety of products that we
manufacture and sell, including the potential for environmental
liabilities, product liability claims, litigation and other claims
related to products manufactured by us and third parties; (20) the
impact of pending or threatened litigation; (21) the impact of
cybersecurity breaches or our actual or perceived failure to
protect company and personal data; (22) changes in accounting
policies applicable to our business; (23) government regulations;
(24) the seasonal nature of sales of certain of our products; (25)
the effects of climate change and unusual weather activity; and
(26) the effects of political or economic conditions, terrorist
attacks, acts of war or other unrest in international markets,
including those discussed herein and those set forth in the
combined securities filing of Spectrum Brands Holdings, Inc. and
SB/RH Holdings, LLC, including their most recently filed Annual
Report on Form 10-K or Quarterly Report on Form 10-Q.
Spectrum Brands Holdings also cautions the reader that its
estimates of trends, market share, retail consumption of its
products and reasons for changes in such consumption are based
solely on limited data available to Spectrum Brands Holdings and
management’s reasonable assumptions about market conditions, and
consequently may be inaccurate, or may not reflect significant
segments of the retail market. Spectrum Brands Holdings also
cautions the reader that undue reliance should not be placed on any
forward-looking statements, which speak only as of the date of this
release. Spectrum Brands Holdings undertakes no duty or
responsibility to update any of these forward-looking statements to
reflect events or circumstances after the date of this report or to
reflect actual outcomes.
SPECTRUM BRANDS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (Unaudited)
Three Month Periods Ended
Nine Month Periods Ended (in millions, except per share
amounts) July 2, 2017 July 3, 2016 July 2,
2017 July 3, 2016 Net sales $ 1,303.9 $ 1,361.5 $
3,685.6 $ 3,790.0 Cost of goods sold 819.3 830.8 2,290.6 2,355.5
Restructuring and related charges 11.2 0.1
16.5 0.4 Gross profit 473.4 530.6 1,378.5 1,434.1 Selling
199.5 201.7 576.6 578.3 General and administrative 85.8 94.2 273.7
276.2 Research and development 14.5 14.6 44.0 42.9 Acquisition and
integration related charges 5.8 8.0 15.0 31.2 Restructuring and
related charges 10.0 5.4 16.2 7.8 Total
operating expenses 315.6 323.9 925.5
936.4 Operating income 157.8 206.7 453.0 497.7 Interest expense
52.4 59.9 158.8 175.8 Other non-operating expense, net 2.1
2.2 2.9 6.5 Income from operations before
income taxes 103.3 144.6 291.3 315.4 Income tax expense 24.7
42.5 88.8 46.8 Net income 78.6 102.1 202.5
268.6 Net income attributable to non-controlling interest
1.7 0.2 1.5 0.4 Net income attributable to
controlling interest $ 76.9 $ 101.9 $ 201.0 $ 268.2
Earnings Per
Share Basic earnings per share $ 1.31 $ 1.72 $ 3.41 $ 4.52
Diluted earnings per share $ 1.31 $ 1.71 $ 3.40 $ 4.51 Dividends
per share $ 0.42 $ 0.38 $ 1.22 $ 1.09
Weighted Average Shares
Outstanding Basic 58.7 59.4 58.9 59.3 Diluted 58.9 59.6 59.1
59.5
SPECTRUM BRANDS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOW (Unaudited)
Nine Month Periods Ended (in millions)
July 2, 2017 July 3, 2016 Cash flows from
operating activities Net income $ 202.5 $ 268.6 Adjustments to
reconcile net income to net cash provided by operating activities:
Amortization of intangible assets 70.9 70.5 Depreciation 72.2 66.2
Share based compensation 28.4 47.4 Amortization of debt issuance
costs 5.4 8.4 Inventory acquisition step-up 0.8 — Pet safety recall
inventory write-off 13.0 — Write-off of debt issuance costs 2.5 —
Non-cash debt accretion 0.6 1.6 Deferred tax benefit 52.2 (3.1 )
Net changes in operating assets and liabilities (286.1 )
(341.7 ) Net cash provided by operating activities 162.4
117.9
Cash flows from investing activities Purchases of
property, plant and equipment (78.1 ) (59.6 ) Business
acquisitions, net of cash acquired (304.7 ) — Proceeds from sales
of property, plant and equipment 4.3 0.8 Other investing activities
(1.2 ) (1.9 ) Net cash used by investing activities
(379.7 ) (60.7 )
Cash flows from financing activities
Proceeds from issuance of debt 557.5 203.9 Payment of debt (223.3 )
(270.2 ) Payment of debt issuance costs (5.9 ) (1.6 ) Payment of
cash dividends (72.1 ) (64.6 ) Treasury stock purchases (165.9 )
(40.2 ) Purchase of non-controlling interest (12.6 ) — Payment of
contingent consideration — (3.2 ) Share based tax withholding
payments, net of proceeds upon vesting (24.3 ) (10.5
) Net cash provided (used) by financing activities 53.4 (186.4 )
Effect of exchange rate changes on cash and cash equivalents
(1.5 ) (1.7 ) Net increase in cash and cash equivalents
(165.4 ) (130.9 ) Cash and cash equivalents, beginning of period
275.3 247.9 Cash and cash equivalents,
end of period $ 109.9 $ 117.0
SPECTRUM BRANDS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION (Unaudited)
(in millions) July 2, 2017 September
30, 2016 Assets Cash and cash equivalents $ 109.9 $
275.3 Trade receivables, net 616.1 482.6 Other receivables 42.2
55.6 Inventories 843.7 740.6 Prepaid expenses and other current
assets 94.1 78.8 Total current assets 1,706.0 1,632.9
Property, plant and equipment, net 675.1 542.1 Deferred charges and
other 65.3 43.2 Goodwill 2,621.3 2,478.4 Intangible assets, net
2,453.4 2,372.5 Total assets 7,521.1
7,069.1
Liabilities and Shareholders' Equity Current portion
of long-term debt 33.9 164.0 Accounts payable 557.6 580.1 Accrued
wages and salaries 68.9 122.9 Accrued interest 45.5 39.3 Other
current liabilities 199.2 189.3 Total current
liabilities 905.1 1,095.6 Long-term debt, net of current portion
4,066.7 3,456.2 Deferred income taxes 583.9 532.7 Other long-term
liabilities 150.2 140.6 Total liabilities 5,705.9
5,225.1 Shareholders' equity 1,806.4 1,800.1 Noncontrolling
interest 8.8 43.9 Total equity 1,815.2
1,844.0 Total liabilities and equity 7,521.1 7,069.1
SPECTRUM BRANDS HOLDINGS, INC. OTHER
SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED DILUTED EPS
Our press release contains financial information regarding
adjusted EPS, which we define as diluted EPS excluding the effect
of one-time, non-recurring activity and volatility associated with
our income tax expense. The Company believes that adjusted diluted
EPS provides further insight and comparability in operating
performance as it eliminates the effects of certain items that are
not comparable from one period to the next. Adjustments to diluted
EPS include (1) acquisition and integration costs that consist of
transaction costs from nonrecurring acquisition transactions during
the period or subsequent integration related project costs directly
associated with the acquired business further summarized below; (2)
restructuring and related costs, which consist of project costs
associated with restructuring initiatives across the segments
further summarized below; (3) one time purchase accounting
inventory adjustments recognized in earnings subsequent to an
acquisition; (4) non-cash asset impairments or write-offs realized;
(5) and other adjustments. During the three and nine month periods
ended July 2, 2017, other adjustments consist of estimated costs
for a non-recurring voluntary recall of rawhide product by the PET
segment and professional fees associated with non-acquisition based
strategic initiatives of the Company. During the three and nine
month periods ended July 3, 2016, other adjustments consisted of
costs associated with the onboarding a key executive and the
involuntary transfer of inventory. Income tax adjustment to diluted
EPS is to exclude the impact of adjusting the valuation allowance
against deferred taxes and other tax related items in order to
reflect a normalized ongoing effective tax rate of 35%, net of
adjustments made to diluted EPS. The following is a reconciliation
of reported diluted EPS to adjusted diluted EPS for the three and
nine month periods ended July 2, 2017 and July 3, 2016,
respectively:
Three Month Periods Ended
Nine Month Period Ended July 2, 2017 July 3,
2016 July 2, 2017 July 3, 2016 Diluted earnings
per share, as reported $ 1.31 $ 1.71 $ 3.40 $ 4.51 Adjustments:
Acquisition and integration related charges 0.10 0.13 0.25 0.53
Restructuring and related charges 0.36 0.09 0.55 0.14 Debt
refinancing costs 0.02 — 0.15 — Inventory acquisition step-up 0.01
— 0.01 — Pet safety recall 0.42 — 0.42 — Other adjustments 0.01 —
0.05 0.02 Income tax adjustment (0.52 ) (0.20 )
(0.72 ) (1.31 ) Total Adjustments 0.40
0.02 0.71 (0.62 ) Diluted
earnings per share, as adjusted $ 1.71 $ 1.73 $ 4.11
$ 3.89
The following summarizes the acquisition and integration related
charges incurred by the Company for the three and nine month
periods ended July 2, 2017 and July 3, 2016:
Three Month Periods Ended
Nine Month Period Ended (in millions) July 2,
2017 July 3, 2016 July 2, 2017 July 3,
2016 HHI Business $ 1.8 $ 4.4 $ 5.7 $ 12.0 PetMatrix 1.7 — 2.0
— GloFish 0.8 — 0.8 — Armored AutoGroup 0.6 2.6 3.0 13.2 Shaser 0.2
— 1.4 — Other 0.7 1.0 2.1 6.0 Total
acquisition and integration related charges $ 5.8 $ 8.0 $ 15.0 $
31.2
The following summarizes the restructuring and related charges
incurred by the Company for the three and nine month period ended
July 2, 2017 and July 3, 2016:
Three Month Periods Ended
Nine Month Period Ended (in millions) July 2,
2017 July 3, 2016 July 2, 2017 July 3,
2016 GAC business rationalization initiative $ 12.8 $ 3.6 $
19.8 $ 3.6 HHI distribution center consolidation 9.0 — 9.1 — PET
rightsizing initiative 2.2 — 2.8 — Other restructuring activities
(2.8 ) 1.9 1.0 4.6 Total restructuring
and related charges $ 21.2 $ 5.5 $ 32.7 $ 8.2
SPECTRUM BRANDS HOLDINGS, INC. OTHER
SUPPLEMENTAL INFORMATION (Unaudited)
SALES AND ORGANIC SALES
The following is a summary of net sales by segment for the three
and nine month periods ended July 2, 2017 and July 3, 2016,
respectively:
Three
Month Period Ended Nine Month Period Ended (in
millions, except %) July 2, 2017 July 3, 2016
Variance July 2, 2017 July 3, 2016
Variance Consumer batteries $ 184.8 $ 187.2 $ (2.4 ) (1.3 %)
$ 630.5 $ 618.0 $ 12.5 2.0 % Small appliances 145.4 151.1 (5.7 )
(3.8 %) 455.3 479.3 (24.0 ) (5.0 %) Personal care 110.9
115.8 (4.9 ) (4.2 %) 378.2 393.0 (14.8 ) (3.8
%) Global Batteries & Appliances 441.1 454.1 (13.0 ) (2.9 %)
1,464.0 1,490.3 (26.3 ) (1.8 %) Hardware & Home Improvement
324.7 328.5 (3.8 ) (1.2 %) 927.2 912.9 14.3 1.6 % Global Pet
Supplies 189.9 207.1 (17.2 ) (8.3 %) 576.0 619.0 (43.0 ) (6.9 %)
Home and Garden 192.4 212.0 (19.6 ) (9.2 %) 374.2 414.7 (40.5 )
(9.8 %) Global Auto Care 155.8 159.8 (4.0 ) (2.5 %)
344.2 353.1 (8.9 ) (2.5 %) Total $ 1,303.9 $ 1,361.5
(57.6 ) (4.2 %) $ 3,685.6 $ 3,790.0 (104.4 ) (2.8 %)
Our press release contains financial information regarding
organic net sales, which we define as net sales excluding the
effect of changes in foreign currency exchange rates and
acquisitions. We believe this non-GAAP measure provides useful
information to investors because it reflects regional and operating
segment performance from our activities without the effect of
changes in currency exchange rate and/or acquisitions. We use
organic net sales as one measure to monitor and evaluate our
regional and segment performance. Organic growth is calculated by
comparing organic net sales to reported net sales in the prior
year. 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 period. Net
sales are attributed to the geographic regions based on the country
of destination. We exclude net sales from acquired businesses in
the current year for which there are no comparable sales in the
prior period. The following is a reconciliation of reported sales
to organic sales for the three month period ended July 2, 2017
compared to reported net sales for the three month period ended
July 3, 2016, respectively:
July 2,
2017
Three month period ended (in
millions, except %)
Net Sales
Effect of Changes in
Currency
Net Sales Excluding Effect
of Changes in Currency
Effect of Acquisitions
Organic Net Sales
Net Sales July 3, 2016
Variance Consumer batteries $ 184.8 $ 2.4 $ 187.2 $ — $
187.2 $ 187.2 $ - 0.0 % Small appliances 145.4 3.7 149.1 — 149.1
151.1 (2.0 ) (1.3 %) Personal care 110.9 2.3
113.2 — 113.2 115.8 (2.6 ) (2.2 %)
Global Batteries & Appliances 441.1 8.4 449.5 — 449.5 454.1
(4.6 ) (1.0 %) Hardware & Home Improvement 324.7 0.3 325.0 —
325.0 328.5 (3.5 ) (1.1 %) Global Pet Supplies 189.9 2.7 192.6 (7.2
) 185.4 207.1 (21.7 ) (10.5 %) Home and Garden 192.4 — 192.4 —
192.4 212.0 (19.6 ) (9.2 %) Global Auto Care 155.8
0.6 156.4 — 156.4 159.8
(3.4 ) (2.1 %) Total $ 1,303.9 $ 12.0 $ 1,315.9 $ (7.2 ) $
1,308.7 $ 1,361.5 (52.8 ) (3.9 %)
July 2, 2017
Nine month period ended (in
millions, except %)
Net Sales
Effect of Changes in
Currency
Net Sales Excluding Effect
of Changes in Currency
Effect of Acquisitions
Organic Net Sales
Net Sales July 3, 2016
Variance Consumer batteries $ 630.5 $ 9.0 $ 639.5 $ — $
639.5 $ 618.0 $ 21.5 3.5 % Small appliances 455.3 14.6 469.9 —
469.9 479.3 (9.4 ) (2.0 %) Personal care 378.2 8.0
386.2 — 386.2 393.0 (6.8
) (1.7 %) Global Batteries & Appliances 1,464.0 31.6 1,495.6 —
1,495.6 1,490.3 5.3 0.4 % Hardware & Home Improvement 927.2
(0.8 ) 926.4 — 926.4 912.9 13.5 1.5 % Global Pet Supplies 576.0 9.0
585.0 (7.2 ) 577.8 619.0 (41.2 ) (6.7 %) Home and Garden 374.2 —
374.2 — 374.2 414.7 (40.5 ) (9.8 %) Global Auto Care 344.2
0.8 345.0 — 345.0
353.1 (8.1 ) (2.3 %) Total $ 3,685.6 $ 40.6 $ 3,726.2 $ (7.2
) $ 3,719.0 $ 3,790.0 (71.0 ) (1.9 %)
SPECTRUM BRANDS HOLDINGS, INC. OTHER
SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, AND ORGANIC ADJUSTED
EBITDA
Our press release contains financial information regarding
adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation,
Amortization), adjusted EBITDA Margin, and organic adjusted EBITDA,
which are non-GAAP earnings. Adjusted EBITDA is a metric used by
management and we believe this non-GAAP measure provides useful
information to investors because it reflects ongoing operating
performance and trends of our segments 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. Further, adjusted EBITDA is
a measure used for determining the Company’s debt covenant. EBITDA
is calculated by excluding the Company’s income tax expense,
interest expense, depreciation expense and amortization expense
(from intangible assets) from net income. Adjusted EBITDA further
excludes: (1) stock based compensation expense as it is a non-cash
based compensation cost; (2) acquisition and integration costs that
consist of transaction costs from acquisition transactions during
the period, or subsequent integration related project costs
directly associated with the acquired business as previously
summarized; (3) restructuring and related costs, which consist of
project costs associated with restructuring initiatives as
previously summarized; (4) non-cash purchase accounting inventory
adjustments recognized in earnings subsequent to an acquisition;
(5) non-cash asset impairments or write-offs realized; (6) and
other adjustments. During the three and nine month periods ended
July 2, 2017, other adjustments consist of estimated costs for a
non-recurring voluntary recall of rawhide product by the PET
segment and professional fees associated with non-acquisition based
strategic initiatives of the Company. During the three and nine
month periods ended July 3, 2016, other adjustments consist of
costs associated with onboarding a key executive and the
involuntary transfer of inventory. Adjusted EBITDA Margin is
calculated by taking the adjusted EBITDA margin as a percentage of
Net Sales. Organic adjusted EBITDA excludes the effect of changes
in foreign currency exchange rates and acquisitions. The following
is a reconciliation of reported net income to adjusted EBITDA for
the three month periods ended July 2, 2017 and July 3, 2016,
including the calculation of adjusted EBITDA Margin for each of the
respective periods, and organic adjusted EBITDA for the three month
period ended July 2, 2017:
Three month
period ended July 2, 2017 (in millions) GBA HHI
PET H&G GAC Corporate
Consolidated Net income (loss) $ 44.2 $ 44.4 $ (5.4 ) $ 55.3
$ 32.5 $ (92.4 ) $ 78.6 Income tax benefit — — — — — 24.7 24.7
Interest expense — — — — — 52.4 52.4 Depreciation and amortization
19.6 9.8 10.8 4.2
5.1 — 49.5 EBITDA
63.8 54.2 5.4 59.5 37.6 (15.3 ) 205.2 Stock based compensation
expense — — — — — 5.3 5.3 Acquisition and integration related
charges 0.6 1.8 3.0 — 0.3 0.1 5.8 Restructuring and related charges
0.2 6.2 2.0 — 12.8 — 21.2 Inventory acquisition step-up — — 0.8 — —
— 0.8 Pet safety recall — — 24.9 — — — 24.9 Other —
— — — —
0.7 0.7 Adjusted EBITDA $ 64.6 $
62.2 $ 36.1 $ 59.5 $ 50.7 $ (9.2 ) $
263.9 Net Sales 441.1 324.7
189.9 192.4 155.8
— 1,303.9 Adjusted EBITDA Margin 14.6 %
19.2 % 19.0 % 30.9 % 32.5 % —
20.2 %
Three month period ended July 3,
2016 (in millions) GBA HHI PET
H&G GAC Corporate Consolidated Net
income (loss) $ 44.8 $ 52.2 $ 25.5 $ 63.1 $ 44.1 $ (127.6 ) $ 102.1
Income tax expense — — — — — 42.5 42.5 Interest expense — — — — —
59.9 59.9 Depreciation and amortization 18.2
8.8 10.6 3.9 3.8
— 45.3 EBITDA 63.0 61.0 36.1 67.0 47.9
(25.2 ) 249.8 Stock based compensation expense — — — — — 15.9 15.9
Acquisition and integration related charges 0.6 4.0 0.6 — 2.7 0.1
8.0 Restructuring and related charges 0.7 0.2
1.0 — 3.6 —
5.5 Adjusted EBITDA $ 64.3 $ 65.2
$ 37.7 $ 67.0 $ 54.2 $ (9.2 ) $ 279.2
Net Sales 454.1 328.5
207.1 212.0 159.8 —
1,361.5 Adjusted EBITDA Margin 14.2 %
19.8 % 18.2 % 31.6 % 33.9 % —
20.5 %
Organic Adjusted EBITDA (in
millions, except %) GBA HHI PET
H&G GAC Corporate Consolidated
Adjusted EBITDA - three month period ended July 2, 2017 $ 64.6 $
62.2 $ 36.1 $ 59.5 $ 50.7 $ (9.2 ) $ 263.9 Effect of change in
foreign currency 5.5 0.6 1.0
— (0.7 ) 0.3 6.7
Net EBITDA Excluding Effect of Changes in Currency 70.1 62.8
37.1 59.5 50.0 (8.9 ) 270.6 Effect of acquisitions —
— (2.6 ) — —
— (2.6 ) Organic Adjusted EBITDA 70.1 62.8
34.5 59.5 50.0 (8.9 ) 268.0 Adjusted EBITDA - three month period
ended July 3, 2016 64.3 65.2
37.7 67.0 54.2 (9.2 )
279.2 Increase (Decrease) in Adjusted EBITDA $ 5.8 $
(2.4 ) $ (3.2 ) $ (7.5 ) $ (4.2 ) $ 0.3 $ (11.2 ) Increase
(Decrease) in Adjusted EBITDA (%) 9.0 % (3.7 %) (8.5 %) (11.2 %)
(7.7 %) 3.3 % (4.0 %)
SPECTRUM BRANDS HOLDINGS, INC. OTHER
SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, AND ORGANIC ADJUSTED
EBITDA (continued)
The following is a reconciliation of reported net income to
adjusted EBITDA for the nine month periods ended July 2, 2017 and
July 3, 2016, including the calculation of adjusted EBITDA Margin
for each of the respective periods, and organic adjusted EBITDA for
the nine month period ended July 2, 2017:
Nine months
ended July 2, 2017 (in millions) GBA HHI
PET H&G GAC Corporate
Consolidated Net income (loss) $ 171.4 $ 136.7 $ 34.1 $ 88.4
$ 80.1 $ (308.2 ) $ 202.5 Income tax expense — — — — — 88.8 88.8
Interest expense — — — — — 158.8 158.8 Depreciation and
amortization 57.2 28.0 31.6
12.4 13.9 —
143.1 EBITDA 228.6 164.7 65.7 100.8 94.0 (60.6 ) 593.2 Stock
based compensation expense — — — — — 28.4 28.4 Acquisition and
integration related charges 3.4 5.6 3.6 — 2.1 0.3 15.0
Restructuring and related charges 1.5 7.7 3.7 — 19.8 — 32.7
Inventory acquisition step-up — — 0.8 — — — 0.8 Pet safety recall —
— 24.9 — — — 24.9 Other — — —
— — 3.2 3.2
Adjusted EBITDA $ 233.5 $ 178.0 $ 98.7
$ 100.8 $ 115.9 $ (28.7 ) $ 698.2 Net Sales
1,464.0 927.2 576.0
374.2 344.2 —
3,685.6 Adjusted EBITDA Margin 15.9 % 19.2 %
17.1 % 26.9 % 33.7 % —
18.9 %
Nine months ended July 3, 2016 (in millions)
GBA HHI PET H&G GAC
Corporate Consolidated Net income (loss) $ 171.7 $
133.4 $ 59.8 $ 106.1 $ 92.0 $ (294.4 ) $ 268.6 Income tax expense —
— — — — 46.8 46.8 Interest expense — — — — — 175.8 175.8
Depreciation and amortization 53.0 26.8
32.0 11.3 13.6 —
136.7 EBITDA 224.7 160.2 91.8 117.4 105.6
(71.8 ) 627.9 Stock based compensation expense — — — — — 47.4 47.4
Acquisition and integration related charges 1.6 11.9 3.9 0.5 12.8
0.5 31.2 Restructuring and related charges 1.2 0.4 2.6 0.4 3.6 —
8.2 Other 0.6 — —
— — 0.6 1.2
Adjusted EBITDA $ 228.1 $ 172.5 $ 98.3 $ 118.3
$ 122.0 $ (23.3 ) $ 715.9 Net Sales
1,490.3 912.9 619.0 414.7
353.1 — 3,790.0
Adjusted EBITDA Margin 15.3 % 18.9 % 15.9 %
28.5 % 34.6 % — 18.9 %
Organic Adjusted EBITDA (in millions, except %) GBA
HHI PET H&G GAC Corporate
Consolidated Adjusted EBITDA - nine month period ended July
2, 2017 $ 233.5 $ 178.0 $ 98.7 $ 100.8 $ 115.9 $ (28.7 ) $ 698.2
Effect of change in foreign currency 18.2 (3.0
) 2.8 — (1.3 ) 0.3
17.0 Net EBITDA Excluding Effect of Changes in
Currency 251.7 175.0 101.5 100.8 114.6 (28.4 ) 715.2 Effect of
acquisitions — — (2.6 ) —
— — (2.6 ) Organic
Adjusted EBITDA 251.7 175.0 98.9 100.8 114.6 (28.4 ) 712.6 Adjusted
EBITDA - nine month period ended July 3, 2016 228.1
172.5 98.3 118.3
122.0 (23.3 ) 715.9 Increase (Decrease)
in Adjusted EBITDA $ 23.6 $ 2.5 $ 0.6 $ (17.5 ) $ (7.4 ) $ (5.1 ) $
(3.3 ) Increase (Decrease) in Adjusted EBITDA (%) 10.3 % 1.4 % 0.6
% (14.8 %) (6.1 %) 21.9 % (0.5 %)
SPECTRUM BRANDS HOLDINGS, INC. OTHER
SUPPLEMENTAL INFORMATION (Unaudited)
ADJUSTED FREE CASH FLOW
Our definition of adjusted free cash flow, which is a non-GAAP
financial measure, takes into consideration capital investments
required to maintain the operations of our businesses and execute
our strategy. We believe adjusted free cash flow provides useful
information to investors regarding our ability to generate cash
from business operations that is available for acquisitions and
other investments, service of debt principal, dividends and share
repurchases and meet its working capital requirements. Our
definition of adjusted free cash flow may be different from
definitions used by other companies. We also use adjusted free cash
flow, as defined, as one measure to monitor and evaluate
performance. The following is a reconciliation of forecast net cash
provided from operating activities to the Company’s forecasted cash
flow for the fiscal year ending September 30, 2017:
(in millions) Forecasted 2017
2016 2015 Net cash provided from operating activities
$ 680 - 695 $ 615 $ 444 Cash interest charges related to
refinancing — 15 75 Cash restructuring, acquisition &
integration costs — — 24 Purchases of property, plant and equipment
(105) - (115
)
(95 ) (89 ) Adjusted free cash flow $ 575 - 590
$ 535 $ 454
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170727005339/en/
Spectrum Brands Holdings, Inc.Investor/Media
Contact:Dave Prichard608-278-6141
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