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Harbinger Group Inc. Reports Second Quarter Fiscal 2014 Results

Stocks in this article: HRG

Harbinger Group Inc. (“HGI” or the “Company”; NYSE:HRG), a diversified holding company seeking to acquire and grow attractive businesses that can, in the long term, generate sustainable free cash flow, today announced its consolidated results for the second quarter of Fiscal 2014 ended on March 31, 2014 (the "Fiscal 2014 Quarter") as well as the results for the first six months of the year (the "Fiscal 2014 Six Months"). The results include HGI's four segments:

  • Consumer Products, which consists of Spectrum Brands Holdings, Inc. (“Spectrum Brands”; NYSE:SPB);
  • Insurance, which includes Fidelity & Guaranty Life (“FGL”; NYSE:FGL) and Front Street Re, Ltd. (“Front Street”);
  • Energy, which includes the Company's interest in an oil and gas joint venture with EXCO Resources, Inc. (the “EXCO/HGI JV”); and
  • Asset Management, formerly called Financial Services, which includes Salus Capital Partners, LLC (“Salus”) and Five Island Asset Management, LLC (“Five Island”).

Philip Falcone, HGI Chairman and Chief Executive Officer, said, “HGI achieved excellent results this quarter, with increased revenue in both the quarter and year-to-date across all of our operating segments except Insurance, where we came up against a very difficult comparison to 2013 because of the substantial gains we realized this time last year after they repositioned their investment portfolio. HGI’s operating income and cash flow remain healthy, and a non-cash impairment we recorded in Energy this quarter doesn’t alter our view of the long-term value realizable in this segment. This is because we aren’t looking to rent assets. Rather, our strategy remains to identify long-term cash flow positive businesses where we can build book value, and looking across our current holdings, we believe we are well-positioned for continued growth and value creation.”

Omar Asali, President of HGI, said, “At the mid-point of our fiscal year, we continue to be pleased with the performance in all of our operating segments, as each continues to successfully execute on its strategic and growth initiatives. One of the cornerstones of our investment philosophy is to have superior management teams in place to run each business, and the merits of this approach are evident across all of our segments this quarter: Consumer Products achieved its fourteenth consecutive quarter of year-over-year growth in its primary measure of profitability, while also delivering organic sales growth of 3.4% as compared to the year-over-year quarter; in our insurance segment, FGL recorded its highest quarterly production of annuity sales in five years; in Asset Management, Salus continues to expand its operations very successfully, having now originated and serviced more than three quarters of a billion dollars in asset-based loans to businesses who are seeking quality sources of liquidity, which is a threefold increase from just a year ago; and finally, the EXCO/HGI JV reported a substantial increase in revenues while continuing to generate solid cash flow.”

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