Spectrum Brands Reports Lower Appliance Sales For Q1

Spectrum Brands Holdings, Inc. reported declines in its small appliance for the fiscal first quarter with the product category delivering net sales of $216.8 million compared with $220.1 million in the year-ago quarter. The company cited “competitor discounting at a major retailer and, to a lesser degree, the timing of some holiday shipments between the fiscal fourth and fiscal first quarters this year versus last year,” as the primary cause of the decline; a result that, “more than offset,” a  strong increase in European net sales. Excluding a negative foreign exchange impact of $2.2 million, net sales for the small appliances product category declined 0.5 percent in the first quarter of fiscal 2014.

Overall, the company reported net sales for its for the quarter of $1.10 billion, an increase of 26.5% versus $870.3 million for the year-earlier; including HHI in the full prior year period on a pro forma basis, net sales increased 3.6% and 3.8% excluding the negative impact of foreign exchange.

For the quarter the company reported net income of $54.3 million, improved from a net loss of $13.4 million in the prior year’s first quarter.

“Our record first quarter results give us a strong start on delivering a fifth consecutive year of record financial performance from our legacy business along with strong growth from our HHI division,” said Dave Lumley, CEO of Spectrum Brands Holdings. “We reported net income of $54 million and delivered adjusted EPS and adjusted EBITDA growth in the quarter with excellent margin improvements. Our HHI and Home and Garden divisions had especially solid results and, geographically, Europe once again was a bright performer.”

According to the company, adjusted EBITDA, a non-GAAP measure, of $178.8 million in the first quarter of fiscal 2014 grew 36.8% versus $130.7 million in fiscal 2013; including HHI as if acquired at the beginning of fiscal 2013, adjusted EBITDA increased 11.4%.

Adjusted EBITDA margin in the first quarter of fiscal 2014 increased to 16.2% compared to 15.1% in the year-ago quarter, including HHI in the full prior year period on a pro forma basis.

The company reported fiscal first quarter net sales of $659.3 million for its Global Batteries & Appliances segment, compared with $666.0 million in the year-ago quarter. The company indicated that higher personal care net sales were more than offset by lower battery and small appliances net sales.

Net sales for the global personal care product category of $178.1 million in the first quarter of fiscal 2014 increased 1.8% versus $175.0 million last year. The company indicated that strong revenue growth in Europe and Latin America across all categories more than offset lower net sales in North America, which resulted primarily from category softness in men’s shaving and grooming.


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