HGI's consolidated revenues for its second quarter of Fiscal 2012 were $1.11 billion, compared to $694 million for the same period in 2011. Consumer Products revenues of $746 million were up 8% from $694 million in the same period last year. The Insurance segment, acquired in April of last year, contributed $359 million to HGI’s revenues in the Fiscal 2012 second quarter.
Consumer Products operating income increased to $55 million in the second quarter from $47 million in the same period of Fiscal 2011 representing a year on year increase of 17% driven primarily by higher sales and efficiency gains. With adjusted EBITDA of $102 million, up 9% year-on-year, Consumer Products recorded its third consecutive record second quarter of adjusted EBITDA. The consumer batteries, small appliances, pet supplies, electric shaving and grooming products, electric personal care products, and home and garden control products all reported higher revenues in the second quarter, which included $14 million of net sales from the integration of the Black Flag®/TAT® brands and FURminator® acquisitions completed on November 1, 2011 and December 22, 2011, respectively. As a result of increased net sales, gross profit improved to $260 million versus $255 million in the comparable period last year. Gross profit margins decreased to 35% in the second quarter from 37% a year ago as a result of increased commodity prices, Asian supply chain costs, and changes in product mix. Operating income as a percentage of net sales improved to 7.4% for the quarter versus 6.8% for the same quarter in Fiscal 2011, driven by the net sales increase and a continuation of strong expense controls. Financial flexibility also increased in the second quarter with Consumer Products’ replacement of its 12% PIK notes with 6.75% senior unsecured notes. Adjusted EBITDA is a non-U.S. GAAP measure that excludes interest, income tax expense, restructuring and related charges, acquisition and integration related charges and depreciation and amortization expenses - see “Non-U.S. GAAP Measures” and Table 3 for a reconciliation of adjusted EBITDA to the Consumer Product segment’s operating income.