UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
May 2, 2006
------------------------------------------
(Date of earliest event reported)
SPECTRUM BRANDS, INC.
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(Exact Name of Registrant as Specified in Charter)
Wisconsin 001-13615 22-2423556
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(State or other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
Six Concourse Parkway, Suite 3300, Atlanta, Georgia 30328
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(Address of principal executive offices, including zip code)
(770) 829-6200
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(Registrant's telephone number, including area code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
EXPLANATORY NOTE
The Registrant's Current Report on Form 8-K is being amended by this Amendment
No. 1 solely to (1) replace the words "pro forma" with the word "adjusted" in
order to clarify terminology, (2) delete all non-GAAP measures except "Diluted
Earnings Per Share, as Adjusted" and (3) delete Table 4 titled "Reconciliation
of GAAP to As Adjusted Financial Data For the three months ended April 3, 2005"
and Table 5 titled "Reconciliation of GAAP to Pro Forma EPS Guidance" appearing
in the Registrant's earnings release included in Exhibit 99.1 to the
Registrant's Current Report on Form 8-K furnished on May 2, 2006. No other
information or amounts are amended hereby.
A revised version of the Registrant's earnings release, as so changed, is
included as an exhibit hereto.
Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
The following information, including the Exhibit attached hereto, is being
furnished pursuant to this Item 2.02 and shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, except as shall be expressly set forth by specific
reference in such filing.
On May 2, 2006, Spectrum Brands, Inc. issued a press release discussing its
estimated financial results for its second fiscal quarter of 2006 ended April
2, 2006. A copy of the press release is furnished as Exhibit 99.1 to this
report.
(c) Exhibits
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit
Number Description of Exhibit
- -------- ----------------------
99.1 Press Release dated May 2, 2006 issued by Spectrum Brands, Inc.,
as amended.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August ___, 2006 SPECTRUM BRANDS, INC.
By:
---------------------------------
Name: Randall J. Steward
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
99.1 Press Release dated May 2, 2006 issued by Spectrum Brands, Inc.,
as amended.
Exhibit 99.1
EXPLANATORY NOTE
Set forth below is an amendment to the Spectrum Brands, Inc. press release dated
May 2, 2006. The sole purpose of the amendment is to (1) replace the words "pro
forma" with the word "adjusted" in order to clarify terminology, (2) delete all
non-GAAP measures except "Diluted Earnings Per Share, as Adjusted" and (3)
delete Table 4 titled "Reconciliation of GAAP to As Adjusted Financial Data For
the three months ended April 3, 2005" and Table 5 titled "Reconciliation of GAAP
to Pro Forma EPS Guidance." No other information or amounts are amended.
SPECTRUM BRANDS, INC. ANNOUNCES SECOND QUARTER
FINANCIAL RESULTS
ATLANTA, May 2, 2006 - (SPC: NYSE) Spectrum Brands, Inc., a global consumer
products company with a diverse portfolio of world-class brands, announced
diluted earnings per share of one cent for its fiscal second quarter ended April
2, 2006. Excluding certain adjustments which management believes are not
indicative of the Company's on-going normalized operations, diluted earnings per
share for its fiscal second quarter were three cents, in line with analysts'
mean estimates as reported by First Call. See Table 3, "Reconciliation of GAAP
to As Adjusted Diluted Earnings Per Share," for further detail.
For comparison purposes, the Company's reported diluted earnings per share for
the quarter ended April 3, 2005 was a loss of 4 cents. The company estimates
that the prior year's second quarter diluted earnings per share, excluding
certain adjustments which management believes are not indicative of the
Company's ongoing normalized operations, would have been 42 cents when adjusted
to include the impact of all 2005 and 2006 acquisitions and divestitures for
the full fiscal year.
"We are disappointed by the results from our North American and European
battery businesses this quarter, where a decrease in sales volume and high raw
material costs, particularly zinc, resulted in significant underperformance to
our expectations," said Spectrum Brands Chairman and CEO Dave Jones. "However,
we are encouraged by this quarter's good performance from our specialty pet and
Remington product portfolios. Our lawn and garden business is poised for a
solid performance in the upcoming selling season with consumer purchases at
retail up ten percent, although inventory management initiatives by some of our
largest retail customers had a negative impact on Q2 lawn and garden sales."
"With a challenging second quarter behind us, we are now moving forward with a
renewed focus on organic sales growth, aggressive cost management and debt
reduction. Through the various restructuring activities we have previously
announced, we are committed to aggressively pursuing cost management
initiatives throughout our organization designed to achieve $150 million in
annual cost savings by the end of fiscal 2007. At the same time, we are
increasing our focus on sales growth, investing in our brands through new
product development and increased advertising."
Financial results for the quarter ended April 2, 2006 include results from
United Industries, acquired on February 7, 2005, Tetra Holding GmbH, acquired
on April 29, 2005, and Jungle Labs, acquired on September 1, 2005. Financial
results for periods prior to the acquisition dates exclude United, Tetra and
Jungle. On January 25, 2006 Spectrum Brands divested its Canadian fertilizer
technology and professional products businesses. As a result of this sale the
company has reported the second quarter results of these businesses as
discontinued operations in the condensed consolidated statements of operations
for both 2006 and 2005.
Second Quarter Results
- ----------------------
Spectrum Brands' second quarter net sales were $625.1 million, as compared to
$521.0 million for the same period last year. Revenue contribution from
acquisitions was $118.6 million. Unfavorable currency translation impacted
sales by a net $6.9 million. When compared to management's estimates of fiscal
year 2005 revenue adjusted to include all acquisitions and dispositions for the
full period, net sales declined by four percentage points.
Gross profit and gross margin for the quarter were $233.7 million and 37.4
percent, respectively, versus $185.6 million and 35.6 percent, respectively, for
the same period last year. Cost of goods sold during the quarter included $0.4
million in restructuring and related charges, and 2005 second quarter results
included a $27.7 million inventory valuation charge associated with the United
acquisition. The decline in gross margin percentage resulted primarily from
lower sales in the global battery business and increased raw material costs.
Management's estimate of gross profit in fiscal year 2005's second quarter, when
adjusted to include all acquisitions and dispositions, is $269.9, or 41.4
percent of net sales.
Operating income was $38.7 million, or 6.2 percent of sales, versus fiscal
2005's second quarter operating income of $33.1 million, or 6.4 percent of
sales. Operating expenses in 2006 included restructuring and related charges of
$6.1 million primarily related to the integration of United and rationalization
of the company's European sales and marketing organization. In 2005 operating
expenses included $0.2 million in restructuring and related charges resulting
from the United acquisition. Management's estimate of operating income in fiscal
year 2005's second quarter, when adjusted to include all acquisitions and
dispositions, is $70.1, or 10.7 percent of net sales.
Second quarter interest expense was $42.9 million as compared to $39.0 million
last year. Total debt at April 2, 2006 was $2.3 billion. The company generated
approximately $100 million in cash proceeds during the quarter from the
divestiture of the Canadian fertilizer technology and professional products
businesses and sale of other assets.
Second Quarter Segment Results
- ------------------------------
North American net sales were $315.8 million compared with $280.6 million
reported last year. When 2005 results are adjusted to include all acquisitions
and divestitures for the full year, net sales show a year over year decline of
three percent. Battery and lighting sales declined 20 percent as recovery of
alkaline battery sales under the company's new "Performance Guaranteed"
marketing program was slower than anticipated and retail inventory reductions
on the part of several large customers negatively impacted sales. Remington
branded product sales improved by 23%, as the company grew market share in all
categories, including men's and women's shaving and grooming and personal care.
Although consumer purchases of Spectrum Brands lawn and garden products at
retail showed positive growth of ten percent during the second quarter,
reported lawn and garden sales declined one percent versus year ago standalone
results for United Industries as a result of retail customers' inventory
reduction programs. North American segment profits were $39.4 million versus
$33.7 million reported last year.
European/ROW net sales were $117.2 million versus $144.3 million reported last
year, including $9.8 million of negative currency impact. An unfavorable
product mix shift from branded to private label battery sales and from higher
margin specialty retail distribution channels to lower margin food and mass
channels was the primary driver of a 17 percent local currency sales decline in
batteries and lighting. Sales of Remington products grew by 13 percent in local
currency, a result of strong penetration gains in continental Europe. Segment
profitability for the quarter was $6.6 million compared with $19.4 million last
year, primarily attributable to lower sales volume and higher raw material
costs.
In Latin America, net sales increased to $54.3 million as compared to $49.6
million in the second quarter last year. Sales growth was driven by favorable
currency of $3.4 million, combined with the successful introduction of
Remington branded products in this region and modest growth in battery sales.
Latin American segment profitability of $3.3 million compares to last year's
$3.6 million, attributable to rising commodity prices and higher selling and
marketing expenses.
In 2006, Spectrum Brands created the Global Pet segment, a new business segment
for reporting purposes, comprising United Pet Group, Tetra and Jungle Labs, all
of which were acquired during 2005. The Global Pet segment contributed net
sales of $137.8 million and segment profits of $21.6 million during the second
quarter. This compares to segment revenues of $132.8 million and segment
profits of $20.6 million in the second fiscal quarter of last year when
adjusted to include acquisitions for the full quarter. Excluding unfavorable
currency translation of $2.5 million, Global Pet revenues increased six percent
compared with last year's standalone adjusted results as the company continued
to generate strong growth in companion pet sales and saw a return to growth in
its aquatics business.
Corporate expenses were $25.7 million, or 4.1 percent of net sales, as compared
to $23.3 million, or 4.5 percent of net sales, in the prior year period.
Increased research and development expense and expansion of the Asian global
operations support infrastructure were partially offset by lower corporate
compensation expense.
Based on its second quarter results, Spectrum Brands has notified its lenders
that the company is not in compliance with certain debt covenants required
under its senior credit facility, and has entered into discussions with its
lenders to address possible remedies. The company anticipates no problems with
liquidity or on-going cash generation and will update investors when
discussions are completed.
Webcast Information
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Spectrum Brands management will discuss second quarter financial results in a
live webcast on Tuesday, May 2, at 8:30 a.m. EDT. Interested investors and
others can access this webcast through the company's website,
www.spectrumbrands.com.
Non-GAAP Measurements
- ---------------------
Within this release, reference is made to adjusted diluted earnings per share.
See attached Table 3, "Reconciliation of GAAP to As Adjusted Diluted Earnings
Per Share," for a complete reconciliation of diluted earnings per share on a
GAAP basis to adjusted net income and adjusted diluted earnings per share.
Spectrum Brands management and some investors use adjusted diluted earnings per
share as one means of analyzing the company's current and future financial
performance and identifying trends in its financial condition and results of
operations. Spectrum Brands provides adjusted diluted earnings per share to
investors to assist in meaningful comparisons of past, present and future
operating results and to assist in highlighting the results of on-going core
operations. While management believes adjusted diluted earnings per share
provides 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.
About Spectrum Brands, Inc.
- ---------------------------
Spectrum Brands is a global consumer products company and a leading supplier of
batteries, lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insecticides, personal care products and portable
lighting. Spectrum Brands' products are sold by the world's top 25 retailers
and are available in more than one million stores in more than 120 countries
around the world. Headquartered in Atlanta, Georgia, Spectrum Brands generates
approximately $2.6 billion in annual revenues and has approximately 9,800
employees worldwide. The company's stock trades on the New York Stock Exchange
under the symbol SPC.
Certain matters discussed in this news release, with the exception of
historical matters, may be forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are subject
to a number of risks and uncertainties that could cause results to differ
materially from those anticipated as of the date of this release. Actual
results may differ materially from these statements as a result of (1) changes
in external competitive market factors, such as introduction of new product
features or technological developments, development of new competitors or
competitive brands or competitive promotional activity or spending, (2) changes
in consumer demand for the various types of products Spectrum Brands offers,
(3) changes in the general economic conditions where Spectrum Brands does
business, such as stock market prices, interest rates, currency exchange rates,
inflation, consumer spending and raw material costs, (4) the company's ability
to successfully implement manufacturing, distribution and other cost
efficiencies, and various other factors, including those discussed herein and
those set forth in Spectrum Brands' securities filings, including the most
recently filed Annual Report on Form 10-K and Form 10-Q.
# # #
Attached
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Table 1 - Condensed Consolidated Statements of Operations
Table 2 - Supplemental Financial Data
Table 3 - Reconciliation of GAAP to As Adjusted Diluted Earnings Per Share
Investor Contact:
- -----------------
Nancy O'Donnell
VP Investor Relations, Spectrum Brands
770-829-6208
Media Contact:
- --------------
David Doolittle
Ketchum for Spectrum Brands
404-879-9266
Table 1
SPECTRUM BRANDS, INC.
Condensed Consolidated Statements of Operations
For the three and six months ended April 2, 2006 and April 3, 2005
(Unaudited)
(In millions, except per share amounts)
THREE MONTHS SIX MONTHS
--------------------------------- --------------------------------------
F2006 F2005 (a) INC(DEC) F2006 F2005 (a) INC(DEC)
----- ----- % ----- ----- %
Net sales $ 625.1 $ 521.0 20.0% $ 1,245.1 $ 1,011.7 23.1%
Cost of goods sold 391.0 335.4 766.4 627.8
Restructuring and related charges 0.4 - 1.7 -
---------- ---------- ----------- ---------
Gross profit 233.7 185.6 25.9% 477.0 383.9 24.3%
Selling 134.5 106.2 265.5 206.6
General and administrative 46.8 39.0 94.2 69.7
Research and development 7.6 7.1 15.0 13.2
Restructuring and related charges 6.1 0.2 11.3 0.2
---------- ---------- ------------ ----------
Total operating expenses 195.0 152.5 386.0 289.7
Operating income 38.7 33.1 16.9% 91.0 94.2 -3.4%
Interest expense 42.9 39.0 84.3 55.9
Other income, net (7.4) (0.1) (5.9) (0.2)
---------- ---------- ------------ ----------
Income (loss) from continuing
operations before income taxes 3.2 (5.8) 12.6 38.5
Income tax expense (benefit) 1.1 (2.2) 4.4 14.2
---------- ---------- ------------ ----------
Income (loss) from continuing
operations 2.1 (3.6) 8.2 24.3
(Loss) income from discontinued
operations, net of tax (1.5)(b) 1.7 (b) (5.3)(b) 1.7 (b)
--------- -------- ------------ --------
Net income (loss) $ 0.6 $ (1.9) $ 2.9 $ 26.0
========= ======== ============ ========
Average shares outstanding (c) 49.5 43.2 49.5 38.7
Income (loss) from continuing operations $ 0.04 $ (0.08) $ 0.17 $ 0.63
Discontinued operations (0.03) 0.04 (0.11) 0.04
---------- ---------- ------------ ----------
Basic earnings (loss) per share $ 0.01 $ (0.04) $ 0.06 $ 0.67
========== ========== ============ ==========
Average shares and common stock
equivalents outstanding (c) 51.0 43.2 (d) 50.8 40.3
Income (loss) from continuing operations $ 0.04 $ (0.08) $ 0.16 $ 0.60
Discontinued operations (0.03) 0.04 (0.10) 0.04
---------- --------- ------------ -----------
Diluted earnings (loss) per share $ 0.01 $ (0.04) $ 0.06 $ 0.64
========== ========= ============ ===========
(a) As of September 30, 2005 and for the three and six months ended April 3, 2005, amounts have been reclassified to
present the discontinued operations of the fertilizer technology and Canadian professional fertilizer businesses of
Nu-Gro.
(b) For the three and six months ended April 2, 2006 and April 3, 2005, reflects the discontinued operations of the
fertilizer technology and Canadian professional fertilizer businesses of Nu-Gro for which the Company discontinued
operations as of September 30, 2005.
(c) Per share figures calculated prior to rounding in millions.
(d) For the three months ended April 3, 2005, the Company did not assume the exercise of common stock equivalents as the
impact would have been antidilutive.
Table 2
SPECTRUM BRANDS, INC.
Supplemental Financial Data
For the three and six months ended April 2, 2006 and April 3, 2005
(Unaudited)
($ In millions)
Supplemental Financial Data F2006 F2005
- --------------------------- ------------ ------------
Cash $ 14.6 $ 44.3
Trade receivables, net $ 391.2 $ 424.2
Days Sales Outstanding (a) 49 56
Inventory, net $ 485.6 $ 481.6
Inventory Turnover (b) 3.3 3.3
Total Debt $ 2,282.7 $ 1,940.6
THREE MONTHS SIX MONTHS
----------------------------- -----------------------------
Supplemental Cash Flow Data F2006 F2005 F2006 F2005
- --------------------------- ------------- ------------ ------------- -------------
Depreciation and amortization, excluding
amortization of debt issuance costs $ 18.5 $ 13.5 $ 36.2 $ 22.8
Capital expenditures $ 18.8 $ 13.6 $ 30.3 $ 20.7
THREE MONTHS SIX MONTHS
----------------------------- -----------------------------
Supplemental Segment Sales & Profitability F2006 F2005 F2006 F2005
- ------------------------------------------ ------------- ------------ ------------- -------------
Net Sales
- ---------
North America $ 315.8 $ 280.6 $ 560.4 $ 496.4
Europe/ROW 117.2 144.3 299.8 366.6
Latin America 54.3 49.6 114.3 102.3
Global Pet 137.8 46.5 270.6 46.4
--------- ---------- ---------- ---------
Total net sales $ 625.1 $ 521.0 $ 1,245.1 $ 1,011.7
========= ========== ========== =========
Segment Profit
- --------------
North America $ 39.4 $ 33.7 $ 64.3 $ 74.9
Europe/ROW 6.6 19.4 37.2 55.4
Latin America 3.3 3.6 10.0 9.3
Global Pet 21.6 (0.1) 41.8 (0.1)
--------- ---------- ---------- ----------
Total segment profit 70.9 56.6 153.3 139.5
Corporate 25.7 23.3 49.3 45.1
Restructuring and related charges 6.5 0.2 13.0 0.2
Interest expense 42.9 39.0 84.3 55.9
Other income, net (7.4) (0.1) (5.9) (0.2)
---------- ---------- ----------- ----------
Income (loss) from continuing operations
before income taxes $ 3.2 $ (5.8) $ 12.6 $ 38.5
========== =========== ========== ==========
(a) Reflects actual days sales outstanding at end of period.
(b) Reflects cost of sales (excluding restructuring and related charges) during the quarter divided by average
inventory for the quarter, multiplied by four.
Table 3
SPECTRUM BRANDS, INC.
Reconciliation of GAAP to As Adjusted Diluted Earnings Per Share
For the three and six months ended April 2, 2006 and April 3, 2005
(Unaudited)
(In millions, except per share amounts)
THREE MONTHS SIX MONTHS
------------------------- --------------------------
F2006 F2005 F2006 F2005
---------- ---------- ----------- ----------
Diluted Earnings (Loss) Per Share, as Reported $ 0.01 $ (0.04) $ 0.06 $ 0.64
Adjustments:
Restructuring and related charges, net of tax 0.08 (a) 0.00 (d) 0.17 (i) 0.00 (m)
Inventory valuation charges, net of tax - 0.39 (e) 0.00 (j) 0.43 (n)
Discontinued operations, net of tax 0.03 (b) (0.04)(f) 0.10 (k) (0.04)(o)
Other adjustments, net of tax (0.09)(c) 0.16 (g) (0.08)(l) 0.18 (p)
---------- ---------- ----------- ----------
Diluted Earnings Per Share, as Adjusted $ 0.03 $ 0.47 $ 0.25 $ 1.21
========== ========== =========== ==========
Diluted shares outstanding, as Reported (q) 51.0 43.2 (h) 50.8 40.3
Diluted shares outstanding, as Adjusted (q) 45.0 (h)
Note: Unless otherwise noted, amounts presented below (other than per share amounts) are pre-tax.
(a) For the three months ended April 2, 2006, includes aproximately $0.4 million ($0.00 per diluted share)
of restructuring and related charges included in cost of goods sold, incurred during the period. Also
includes $3.0 million ($0.04 per diluted share) and $3.1 million ($0.04 per diluted share) of
restructuring and related charges included in operating expenses, incurred during the period, in
connection with (i) the United integration and (ii) a series of actions in Europe to reduce operating
costs and rationalize operating structure, respectively.
(b) For the three months ended April 2, 2006, reflects a net of tax $1.5 million ($0.03 per diluted share)
adjustment to exclude the discontinued operations of the fertilizer technology and Canadian
professional fertilizer businesses of Nu-Gro, disposed of in January 2006.
(c) For the three months ended April 2, 2006, general and administrative expenses include a $0.3 million
($0.00 per diluted share) benefit related to expiring penalties, associated with the Company's provision
for presumed credits applied to the Brazilian excise tax on manufactured products, which expired in the
current period. In addition, other income, net includes a $7.9 million ($0.10 per diluted share) gain on
sale of the Company's Bridgeport, CT and Madison, WI manufacturing facilities. Lastly, interest expense
includes $0.8 million ($0.01 per diluted share) related to interest charges associated with the
Company's provision for presumed credits applied to the Brazilian excise tax on manufactured products.
(d) For the three months ended April 3, 2005, includes $0.2 million ($0.00 per diluted share) of
restructuring and related charges included in operating expenses, incurred during the period.
(e) For the three months ended April 3, 2005, represents an inventory valuation adjustment of $27.7 million
($0.39 per diluted share) related to the fair value write-up of United inventory in accordance with the
requirements of SFAS 141, "Business Combinations."
(f) For the three months ended April 3, 2005, reflects a net of tax $1.7 million ($0.04 per diluted share)
adjustment to exclude the discontinued operations of the fertilizer technology and Canadian professional
fertilizer businesses of Nu-Gro, disposed of in January 2006.
(g) For the three months ended April 3, 2005, interest expense includes $12.0 million ($0.16 per diluted
share) related to the write-off of debt issuance costs in the second quarter of 2005 associated with
debt refinanced in connection with the United acquisition.
(h) For the three months ended April 3, 2005, the Company did not assume the exercise of common stock
equivalents as the impact would have been antidilutive on diluted earnings per share, as reported.
However, diluted earnings per share, as adjusted for the three months ended April 3, 2005 assumes
diluted shares outstanding of 45.0 million.
(i) For the six months ended April 2, 2006, includes $1.7 million ($0.02 per diluted share) of restructuring
and related charges included in cost of goods sold, incurred during the period. Also includes $7.7
million ($0.10 per diluted share) and $3.6 million ($0.05 per diluted share) of restructuring and
related charges included in operating expenses, incurred during the period, in connection with (i) the
United integration and (ii) a series of actions in Europe to reduce operating costs and rationalize
operating structure, respectively.
(j) For the six months ended April 2, 2006, includes an inventory valuation adjustment of $0.2 million
($0.00 per diluted share) related to the fair value write-up of Jungle Labs inventory in accordance with
the requirements of SFAS 141, "Business Combinations."
(k) For the six months ended April 2, 2006, reflects a net of tax $5.3 million ($0.10 per diluted share)
adjustment to exclude the discontinued operations of the fertilizer technology and Canadian professional
fertilizer businesses of Nu-Gro, disposed of in January 2006.
(l) For the six months ended April 2, 2006, general and administrative expenses include a $0.3 million
($0.00 per diluted share) benefit related to expiring penalties, associated with the Company's provision
for presumed credits applied to the Brazilian excise tax on manufactured products, which expired in the
current period. In addition, other income, net includes a $7.9 million ($0.10 per diluted share) gain on
sale of the Company's Bridgeport, CT and Madison, WI manufacturing facilities. Lastly, interest expense
includes $1.7 million ($0.02 per diluted share) related to interest charges associated with the
Company's provision for presumed credits applied to the Brazilian excise tax on manufactured products.
(m) For the six months ended April 3, 2005, includes $0.2 million ($0.00 per diluted share) of restructuring
and related charges included in operating expenses, incurred during the period.
(n) For the six months ended April 3, 2005, represents an inventory valuation adjustment of $27.7 million
($0.43 per diluted share) related to the fair value write-up of United inventory in accordance with the
requirements of SFAS 141, "Business Combinations."
(o) For the six months ended April 3, 2005, reflects a net of tax $1.7 million ($0.04 per diluted share)
adjustment to exclude the discontinued operations of the fertilizer technology and Canadian professional
fertilizer businesses of Nu-Gro, disposed of in January 2006.
(p) For the six months ended April 3, 2005, operating expenses include a $1.6 million ($0.03 per diluted
share) gain on sale of land and building, offset by a $1.1 million ($0.02 per diluted share) charge
related to the disposal of our Madison, WI manufacturing facility, closed in fiscal 2003. In addition,
interest expense includes $12.0 million ($0.19 per diluted share) related to the write-off of debt
issuance costs in the second quarter of 2005 associated with debt refinanced in connection with the
United acquisition.
(q) Per share figures calculated prior to rounding in millions.
