Spectrum Brands, Inc. F2Q10 (Qtr End 04/04/10) Earnings Call Transcript

Spectrum Brands, Inc. F2Q10 (Qtr End 04/04/10) Earnings Call Transcript
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Spectrum Brands, Inc. (SPB)

F2Q10 (Qtr End 04/04/10) Earnings Call

May 5, 2010 9:00 a.m. ET


Carey Phelps - DVP, Investor Relations

Dave Lumley - CEO

Tony Genito - CFO

John Heil - President, Global Pet Supplies


Mary Gilbert - Imperial Capital

Reza Vahabzadeh - Barclays Capital

Bill Chappell - SunTrust

Connie Maneaty - BMO Financial



At this time, I would like to welcome everyone to the Spectrum Brands second quarter fiscal 2010 earnings conference call. (Operator Instructions)

I would now like to introduce Ms. Carey Phelps, DVP of Investor Relations.

Carey Phelps

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Thank you. Good morning and welcome to our second quarter fiscal 2010 earnings call. With me today are Dave Lumley, our Chief Executive Officer; and Tony Genito, our Chief Financial Officer. John Heil, President of Global Pet Supplies is also here today and is available to answer questions.

Before we begin, let me remind you that our comments this morning include forward-looking statements, including our outlook for the full year of fiscal 2010 and beyond. These statements are based on management's current expectations, projections and assumptions and are by nature uncertain. Actual results may differ materially. Due to that risk, Spectrum Brands encourages you to review the risk factors and cautionary statements outlined in our press release dated May 5, 2010, and in our most recent Form 10-K. We assume no obligation to update any forward-looking statements.

Additionally, please note that we will discuss certain non-GAAP financial measures during our remarks, including adjusted diluted earnings per share, adjusted EBITDA and net sales excluding foreign exchange translations. Spectrum Brands management uses these metrics. because it believes that they: one, provide a means of analyzing the company's current and future performance and identifying trends; and two, provide further insight into our operating performance, because they eliminate certain items that are not comparable either from one period to the next or from one company to another. Additionally, I should point out that adjusted EBITDA can also be a useful measure of the company's ability to service debt and is one of the measures used for determining the company's debt covenant compliance.

While Spectrum Brands management believes that these non-GAAP financial measures I just mentioned are useful supplemental information, such adjusted results are not intended to replace the company's GAAP financial results and should be read in conjunction with those GAAP results.

I'd like to caution the audience that although net income is the GAAP measure from which adjusted EBIDTA is derived, projected adjusted EBIDTA results discussed during this call may differ significantly from net income results due to factors not included in the calculation of adjusted EBIDTA. For completed quarter, we provided reconciliations of adjusted EBIDTA to the comparable GAAP metric in Table 4 of our press release dated May 5, 2010, which has been furnished on our form 8-K filed with the SEC. A copy of the 8-K is available on our website, www.spectrumbrands.com, under the Investor Relations section. And we will provide reconciliation of net sales excluding foreign exchange during this call.

As a reminder, in connection with the company's emergence from Chapter 11 on August 28, 2009, we adopted fresh start reporting on August 30, 2009. At that time, the recorded amounts of the company's assets and liabilities were adjusted to reflect their fair value. As a result, the reported historical financial statements of the predecessor company are not comparable to those of the successor company. Those results encompass the results of operations on and after August 30, 2009.

During the course of our comments today, unless we say otherwise, current year results relate to the fiscal second quarter of 2010, while any references to prior-year results are for the fiscal second quarter of 2009.

As a final note, during today's call, we will make some comments regarding the proposed business combination involving Spectrum Brands and Russell Hobbs. We urge investors to read the registration statement on Form S-4 that includes the preliminary proxy statement of Spectrum Brands and that will also constitute a prospectus of Spectrum Brands Holdings when it becomes available, as it will contain important information about the transaction.

Investors may obtain a free copy of the joint proxy statement/prospectus when available as well as other documents filed by Spectrum Brands on the SEC's website at www.sec.gov or on Spectrum Brands' website at www.spectrumbrands.com. Spectrum Brands, Russell Hobbs and the respective directors, executive officers and certain other employees may be deemed under SEC rules to be participants in the solicitation of proxies in connection with proposed transactions.

Information regarding Spectrum Brands' directors and officers can be found on its Form 10-K filed with the SEC on December 29, 2009. Additional information regarding the participants and the proxy solicitation and a description of their direct and indirect interest in the transaction by securities, holdings or otherwise will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

Thank you for your attention to these details. At this point, I will turn the call over to Dave Lumley.

Dave Lumley

As you are likely aware, following the retirement of Kent Hussey and in recognition of the strong results our teams have delivered over the past several years, I was asked to accept the role of CEO of Spectrum Brands, which I have proudly accepted. During his tenure, Kent did a good job of turning this company around and getting us back on the right track. I want to thank Kent for his efforts and wish him the best in his future endeavors.

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