For the second quarter ended April 1, 2012, HGI continued to have a strong financial position to support its business strategy. At April 1, 2012, HGI held approximately $470 million in cash and short-term securities. HGI reported a consolidated net loss attributable to common and participating preferred stockholders of ($3.9 million) or ($0.02) per common share compared to a consolidated net loss attributable to common and participating preferred stockholders of ($62 million) or ($0.45) per common share in the same period of Fiscal 2011. Consolidated operating income of $96 million in the second quarter of Fiscal 2012 grew substantially compared to the operating income of $22 million in the same period of Fiscal 2011 as a result of higher sales and operating income at Consumer Products and the initial contribution from the Insurance segment.
The non-cash accretion rate on HGI’s preferred stock is determined based on the value of HGI’s net assets (the “Preferred Stock NAV”) as calculated in accordance with the terms of the certificates of designation of HGI’s preferred stock. 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 due to an increase in Preferred Stock NAV. The accretion rate is calculated as of September 30 and March 31 of each year, and is set for six months after the date of calculation. The Preferred Stock NAV as of March 31, 2012, calculated in accordance with the certificates of designation, was approximately $1.1 billion. This calculation will result in a quarterly non-cash accretion at an annualized rate of 2% for the remainder of Fiscal 2012, although it could increase to 4% or decrease to 0% in subsequent periods based upon changes in the Preferred Stock NAV.
For more information on HGI’s Consumer Products segment, interested parties should read Spectrum Brands' announcements and public filings, including Spectrum Brands’ second quarter earnings announcement, by visiting Spectrum Brands’ website: