Home and Garden
The Home and Garden segment reported third quarter net sales of $156.6 million, a decrease of 6.0 percent compared to record third quarter revenues of $166.6 million in fiscal 2012. Higher lawn and garden control sales due to a late start to spring were more than offset by lower household insect control sales driven by the later arrival of warmer weather. The Home and Garden segment’s major selling season occurs in the spring and summer months, primarily April through August or early September.
The segment recorded fiscal 2013 third quarter net income, as adjusted, of $42.8 million versus $44.0 million in the prior year’s quarter. Despite the lower revenues, the Home and Garden segment’s third quarter adjusted EBITDA of $46.0 million declined only modestly compared to $47.5 million a year ago. Importantly, however, adjusted EBITDA margin as a percentage of net sales in the third quarter increased to 29.4 percent versus 28.5 percent last year.
Significantly higher month-over-month POS and retailer orders in July for household insect control products and outdoor repellents signal a strong fourth quarter finish to the fiscal year for the Home and Garden segment.
Hardware & Home Improvement
In its second full quarter since its acquisition by Spectrum Brands on December 17, 2012, the Hardware & Home Improvement (HHI) segment recorded net sales of $285.2 million, an increase of 12.7 percent compared to $253.0 million as if combined with Spectrum Brands in the year-ago quarter. The revenue growth was driven by double-digit improvements in HHI’s U.S. residential security and plumbing categories. The segment recorded net income, as adjusted, of $40.1 million in the third quarter of fiscal 2013. Adjusted EBITDA in the third quarter of fiscal 2013 was $53.0 million compared to $52.5 million last year.
Liquidity and Debt Reduction
Spectrum Brands completed the third quarter of fiscal 2013 on June 30, 2013 with a solid liquidity position, including a cash balance of approximately $99 million and approximately $70 million drawn on its ABL facility.