Harbinger Group Inc. ("HGI"; NYSE: HRG) today announced its consolidated results for the Fiscal 2012 second quarter ended April 1, 2012.
- Consumer Products segment sales increased 8% year on year for the second quarter due to volume growth, retail distribution gains, new products and bolt-on acquisitions.
- Consumer Products operating income grew 17% and adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) grew 9% on higher sales, synergy benefits and cost reduction initiatives; replacement of debt lowers cost of capital.
- Strong Insurance segment product sales of $573 million and market share gains driven by recently-launched Prosperity Elite SM indexed annuities return Fidelity Guaranty & Life (“FGL”) to a top-ten fixed index annuities (“FIA”) player.
- Underlying value of Insurance segment reflected in net GAAP book value of $802 million (including accumulated other comprehensive income (“AOCI”) of $238 million) as of April 1, 2012.
- Net loss attributable to HGI common and participating preferred stockholders narrowed to ($3.9 million) or ($0.02) per common share compared to ($62.0 million) or ($0.45) per common share in second quarter of Fiscal 2011.
- Strong HGI cash and short-term investments position of approximately $470 million supports HGI’s business strategy and growth of existing businesses.
- The non-cash accretion rate on HGI’s preferred stock reduced from 4% for the second fiscal quarter to 2% commencing in the third fiscal quarter of 2012 due to an increase in HGI’s net asset value as calculated in accordance with the terms of the certificates of designation of HGI’s preferred stock.
Omar Asali, President of HGI said, "The robust revenue growth at HGI operating subsidiaries during the second quarter underscores the value-creation in our business model. Spectrum Brands delivered an 8% sales increase and 9% adjusted EBITDA growth in a quarter that is typically less strong due to the seasonality of its consumer business. Product sales at FGL were up a remarkable 241% year-over-year, as the company regained market share since our acquisition a year ago. We have also continued to grow our financial services vertical through our formation of Salus Capital Partners, our asset-backed lending business, which four months after creation is cash-flow positive and has closed five transactions; an impressive achievement for a start-up. With this level of growth and our strong management team, I am confident that HGI is well-positioned to capitalize on opportunities in the marketplace as they develop.”