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TheStreet Open House

Spectrum Brands Holdings Reports Record Fiscal 2013 Results, Meets Or Exceeds Full Year Financial Guidance

Spectrum Brands Holdings, Inc. (NYSE: SPB), a global and diversified consumer products company with market-leading brands, today announced a record performance for fiscal 2013 ended September 30, 2013 with results that met or exceeded financial guidance. The Company’s record fiscal 2013 results were highlighted by a strong fourth quarter, including improved net sales, adjusted earnings per share and adjusted EBITDA. The Global Pet Supplies and Home and Garden segments delivered record years in fiscal 2013.

Spectrum Brands said it expects a fifth consecutive year of record profitability from its legacy business in fiscal 2014 along with continuing growth from the acquired HHI business. The Company plans to reduce debt by at least $250 million in fiscal 2014 and expects free cash flow to increase to at least $350 million, up significantly from a record $254 million in fiscal 2013 and $208 million in fiscal 2012.

Fiscal 2013 Results Highlights:

  • Net sales of $4.09 billion, including the acquired HHI business, increased 25.6 percent in fiscal 2013 versus $3.25 billion a year ago; including HHI on a pro forma basis for all of both fiscal 2013 and fiscal 2012, net sales increased 1.2 percent and 1.7 percent excluding the negative impact of foreign exchange.
  • Net sales of $1.14 billion in the fourth quarter of fiscal 2013 grew 4.4 percent versus a year ago, including HHI on a pro forma basis for the prior year period; legacy Spectrum Brands, which excludes HHI, reported a 1.4 percent increase in fiscal 2013 fourth quarter net sales, and 2.1 percent excluding the negative impact of foreign exchange.
  • Net loss of $55.2 million and diluted loss per share of $1.06 in fiscal 2013, due entirely to $122.2 million of costs and expenses related to the extinguishment of $950 million of senior secured notes in the fourth quarter, compared to net income of $48.6 million and diluted income per share of $0.91 in fiscal 2012.
  • Adjusted diluted earnings per share, a non-GAAP measure, of $2.98 in fiscal 2013 decreased from $3.21 last year, including HHI in the prior year period on a pro forma basis, due to a $14.7 million increase in non-cash stock compensation expense driven by employee stock-based award programs.
  • Adjusted diluted earnings per share in the fourth quarter of fiscal 2013 increased 6.0 percent to $0.88 versus $0.83 a year earlier, including HHI in the prior year period on a pro forma basis.
  • Adjusted EBITDA of $677.1 million in fiscal 2013 grew 1.3 percent compared to last year, including HHI as if acquired at the beginning of fiscal 2012, and 4.7 percent excluding the negative impact of foreign exchange; adjusted EBITDA in fiscal 2013 was $646.8 million, excluding the pre-acquisition earnings of HHI.
  • Legacy Spectrum Brands delivered record adjusted EBITDA for the 4 th consecutive year with growth of 2.1 percent to $495.5 million in fiscal 2013 versus fiscal 2012, and 6.1 percent excluding the negative impact of foreign exchange; legacy business fiscal 2013 adjusted EBITDA margin of 15.4 percent was a record annual level.
  • Adjusted EBITDA of $184.7 million in the fourth quarter of fiscal 2013 improved 3.3 percent compared to $178.8 million, including HHI in the prior year period on a pro forma basis.
  • Legacy business reported a 3.6 percent increase in adjusted EBITDA to $130.3 million in the fourth quarter of fiscal 2013, the 12 th consecutive quarter of year-over-year adjusted EBITDA growth; excluding the negative impact of foreign exchange, legacy Spectrum Brands’ adjusted EBITDA grew 10.2 percent versus $125.8 million last year.
  • Strong liquidity position at fiscal 2013 year-end with a cash balance of approximately $207 million and zero cash drawn on ABL facility.
  • Fiscal 2014 net cash provided from operating activities after purchases of property, plant and equipment (free cash flow) expected to be at least $350 million compared to $254 million and $208 million in fiscal 2013 and fiscal 2012, respectively.
  • Company expects to use its strong free cash flow to reduce debt by at least $250 million and reduce its balance sheet leverage in the second half of fiscal 2014, consistent with the seasonality of its cash flows.

“We’re pleased to report record performance for fiscal 2013, including a strong finish with solid growth in the fourth quarter,” said Dave Lumley, Chief Executive Officer of Spectrum Brands Holdings. “HHI has delivered better-than-expected results since its December 17, 2012 acquisition, and its integration into Spectrum Brands has been smooth and is essentially complete, months ahead of schedule. Our Global Pet and Home and Garden businesses reported record years, while Europe was a particularly bright spot in fiscal 2013.

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