- Total revenues increased 29% from the year ended September 30, 2011 (“Fiscal 2011”), primarily driven by growth in the Insurance segment, including the benefit of a full year of operations of FGL, which was acquired in April 2011.
- HGI received total dividends of approximately $71 million from its operating subsidiaries in Fiscal 2012. In September, Spectrum Brands paid a special one-time dividend of $1.00 per share, resulting in approximately $30 million to HGI; FGL paid cumulative dividends of $40 million, and Salus paid an inaugural dividend of $1 million in its first year of operation.
- Upon completion of a recently announced joint venture with EXCO Resources, HGI expects dividends from all subsidiaries to exceed $100 million annually and to surpass HGI's existing interest and dividend payments.
- For Fiscal 2012, the Consumer Products segment recorded record net sales of $3.25 billion, a 2% increase from Fiscal 2011; excluding negative foreign exchange impact, net sales grew 4% versus prior year.
- Consumer Products segment operating income grew 32% and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) increased 6% versus the prior year (or 10% excluding unfavorable foreign exchange impact) on higher sales, synergy benefits and cost reduction initiatives. Adjusted EBITDA margin on a full-year basis approximated 15% of sales.
- Insurance segment products sales for Fiscal 2012 were $1.9 billion, led by the successful introduction of Prosperity Elite SM which resulted in FGL solidifying a top ten market position in the competitive fixed index annuity marketplace.
- As of September 30, 2012, HGI’s Insurance segment had a net US GAAP book value of $1.2 billion (including accumulated other comprehensive income ("AOCI") of $434 million), almost double the book value of $667 million (including AOCI of $159 million) at the end of Fiscal 2011. Net unrealized gains on available for sale investments were $1.1 billion on a U.S. GAAP basis ($1.2 billion on a statutory basis). FGL's investment portfolio continues to be conservatively positioned, as it holds cash in excess of $1.0 billion, has shortened portfolio duration, and remains well matched against its liability profile.
- Salus, in its first year of operation, originated $260 million of asset-based loan commitments, for which $181 million of loans were outstanding as of September 30, 2012, and contributed approximately $1 million to HGI's consolidated earnings for Fiscal 2012.
- HGI stock price appreciation of 66% from $5.07 to $8.43 per share during Fiscal 2012 resulted in a $157 million liability increase related to the fair value of the preferred stock equity conversion feature, which represents a non-cash charge to HGI's net income.
- Net income attributable to common and participating preferred stockholders increased 35% to $30 million, or $0.15 per common share attributable to controlling interest, from $22 million, or $0.11 per common share attributable to controlling interest, in Fiscal 2011.
- The non-cash accretion rate on HGI’s preferred stock decreased from 2% for the third and fourth fiscal quarters to 0% commencing in the first quarter of fiscal 2013 due to a 163% increase in HGI’s net asset value since the issuance of its preferred stock in May 2011 as calculated in accordance with the terms of its Certificates of Designation.
- HGI ended the year with corporate cash and short-term investments of approximately $433 million (cash primarily held at HGI and HGI Funding LLC), which supports its business strategy and growth of existing businesses.
Harbinger Group Inc. Reports Fiscal 2012 Results
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