“Our largely non-discretionary, non premium-priced replacement products and brands continue to provide consistent value to our retail partners and consumers worldwide, especially in this continuing difficult global economy with sluggish retail activity,” Mr. Lumley continued. “We believe consumers are embracing our ‘same or better performance for less price’ value brand proposition and are open to trial and brand conversion.
“Again in fiscal 2013, we expect to largely offset significant commodity and Asian-sourced product cost increases through our continuous improvement programs, cost synergy programs, retail distribution gains, the exit from unprofitable or low-margin product lines as we did in the first quarter, select pricing actions, and retention of stringent cost control programs. Our target remains for each division to achieve a three to five percent savings in its annual costs of goods sold.
“In addition to exciting new products we are launching across our divisions this year, and distribution gains we have achieved despite competitive discounting activity, we are investing in fiscal 2013 in two higher-margin, faster-growing areas – e-commerce and our consumables business, specifically our Remington® personal care division,” Mr. Lumley said. “This was evident with our recent purchase of a majority stake in Shaser Bioscience to create a leading position in the more than $50 billion global market for home use dermatology and hair removal devices. In addition, with respect to capital expenditures, more than two-thirds of our fiscal 2013 capital spending represents investments in new production capacity, technology infrastructure, new product development and cost reduction projects.
“We are also very pleased to have HHI join the Spectrum Brands family as our fourth operating segment,” Mr. Lumley said. “We have communicated extensively about this accretive acquisition in the past few months. With its portfolio of renowned, market-leading brands, HHI will bring significant, additional growth and profitability to our Company in fiscal 2013 and beyond.