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Spectrum Brands Holdings Reports Record Results For Fiscal 2012, Meets Or Exceeds Full-Year Financial Guidance

Stocks in this article: SPB

Fiscal 2012 Consolidated Financial Results

Spectrum Brands Holdings reported record consolidated net sales of $3.25 billion for fiscal 2012, a 2.1 percent increase compared to $3.19 billion for fiscal 2011. The improvement was driven by higher revenues in the Home and Garden and Global Pet Supplies segments, which included $53.5 million of net sales from the acquisitions of the Black Flag®/TAT® brands and FURminator® completed on November 1, 2011 and December 22, 2011, respectively. Excluding the negative foreign exchange impact of $73.1 million, fiscal 2012 net sales grew 4.3 percent versus fiscal 2011.

The Company reported gross profit for fiscal 2012 of $1.12 billion versus $1.13 billion last year. Fiscal 2012 gross profit margin decreased to 34.3 percent from 35.4 percent in fiscal 2011. The decrease in gross profit and gross profit margin was driven by $36 million of negative foreign currency impacts, a $17 million increase in commodity prices and costs from sourced goods, primarily from Asia, and a $12 million increase in costs due to changes in product mix. Partially offsetting the gross profit decline were increased organic sales which contributed $31 million of gross profit and fiscal 2012 acquisitions which contributed $23 million of gross profit.

Driven primarily by synergies from the Russell Hobbs acquisition, the non-recurrence of asset impairment charges, lower acquisition and integration charges, and savings from cost reduction initiatives, operating income for fiscal 2012 of $301.8 million increased 32.4 percent compared to $227.9 million a year ago. Operating income as a percentage of net sales improved more than 200 basis points to 9.3 percent versus the prior year’s 7.2 percent.

Spectrum Brands swung to net income of $48.6 million, or $0.91 per diluted share, for fiscal 2012 on average shares and common stock equivalents outstanding of 53.3 million, compared to a net loss of $75.2 million, or $1.47 diluted loss per share, for fiscal 2011 on average shares and common stock equivalents outstanding of 51.1 million. Adjusted for certain items in both years, which are presented in Table 3 of this press release and that management believes are not indicative of the Company’s ongoing normalized operations, Spectrum Brands reported adjusted diluted earnings per share of $2.28, a non-GAAP measure, for fiscal 2012, an increase of 24.6 percent compared to $1.83 last year. This represented the third consecutive year of increased adjusted earnings per share.

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