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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 10, 2007
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(Date of earliest event reported)
SPECTRUM BRANDS, INC.
--------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Wisconsin 001-13615 22-2423556
- ---------------------------- ----------------------- -------------------
(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
----------------------------------------------------
(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
This Amendment No. 1 on Form 8-K/A is being furnished solely to revise
certain typographical errors in the press release attached as Exhibit 99.1 to
Spectrum Brands, Inc.'s Current Report on Form 8-K filed with the Securities and
Exchange Commission (the "SEC") on May 10, 2007 (the "Original 8-K"). Subsequent
to furnishing the Original 8-K, the registrant recognized that the historical
values presented in Table 2 under the headings "Supplemental Cash Flow Data
- -Depreciation and amortization" and "--Capital Expenditures" for the three month
and six month periods ended April 2, 2006, respectively, were inadvertently
incorrect as a result of typographical errors. On May 11, 2007, Spectrum Brands,
Inc. issued a revised press release containing a revised Table 2 which reflects
the correct amounts under "Supplemental Cash Flow Data -Depreciation and
amortization" and "--Capital Expenditures" for (i) the three month period ended
April 2, 2006 of $17.6 million and $18.8 million, respectively, and (ii) the six
month period ended April 2, 2006, of $34.4 million and $30.3 million,
respectively.
Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On May 11, 2007, Spectrum Brands, Inc. issued a press release
including a revised version of Table 2 which was included in Spectrum Brands,
Inc's press release dated May 10, 2007 correcting certain historical values in
its estimated financial results for its second fiscal quarter ending April 1,
2007. A copy of the revised press release is furnished as Exhibit 99.1 to this
report.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) 99.1 Press Release dated May 11, 2007 issued by Spectrum Brands, Inc.
The information contained in this Current Report on form 8-K, including
the Exhibit attached hereto 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.
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: May 11, 2007 SPECTRUM BRANDS, INC.
By: /s/ Randall J. Steward
-----------------------------------
Name: Randall J. Steward
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Description
- ------- -----------
99.1 Press Release dated May 11, 2007 issued by Spectrum Brands, Inc.
Exhibit 99.1
SPECTRUM BRANDS REPORTS SECOND QUARTER 2007 FINANCIAL RESULTS
Spectrum Brands, Inc., (NYSE:SPC) a global consumer products
company with a diverse portfolio of world-class brands, announced
second quarter net sales of $439.7 million and a net loss of $4.77 per
share for the quarter ended April 1, 2007. Excluding certain items
which management believes are not indicative of the company's on-going
normalized operations, the company generated a diluted loss per share
of $0.18. These items Include:
-- pretax restructuring and related charges of $16.5 million, or
$0.17 per share net of tax, associated with the
rationalization of the company's Latin American and European
businesses, the ongoing integration of the Global Pet Supplies
business, and company-wide cost reduction initiatives
announced in January;
-- a non-cash pretax impairment charge of $214.0 million, or
$3.84 per share net of tax, related to goodwill carried on the
company's books (see further discussion below);
-- $36.2 million, or $0.42 per share, of charges associated with
a pre-payment premium incurred in connection with the
refinancing of the company's senior credit facility and the
write-off of deferred financing fees;
-- professional fees of $3.9 million, or $0.05 per share,
incurred in connection with the Home & Garden business sales
process; and
-- a loss from discontinued operations, net of tax, of $6.4
million, or $0.13 per share, related to the Home & Garden
business, which is being held for sale.
During the second quarter of fiscal 2006, the company reported
earnings per share of $0.01, which included earnings from discontinued
operations, net of tax, of $0.04 per share, restructuring and related
charges of $0.05 per share, and a gain on the sale of manufacturing
facilities of $0.10.
Spectrum Brands' second quarter net sales were $439.7 million,
compared with net sales of $414.7 million in the comparable period
last year, an increase of 5.6 percent. The Global Batteries and
Personal Care business segment generated year over year sales growth
of 7.4 percent, with sales improvement in all geographic regions.
Global battery sales increased 8.8 percent and sales of Remington
branded products increased 3.4 percent. The Global Pet Supplies
business segment also reported sales growth of 3.4 percent. Favorable
foreign exchange rates had a $12.9 million positive impact on net
sales during the quarter. Reported net sales exclude sales from the
company's Home & Garden division, which is accounted for as a
discontinued operation. The Home & Garden business generated $220.2
million in net sales during the quarter, a year over year increase of
4.7 percent.
Gross profit and gross margin for the quarter were $164.6 million
and 37.4 percent, respectively, versus $158.9 million and 38.3 percent
for the same period last year. Restructuring and related charges of
$6.7 million were included in the current quarter's cost of goods
sold; cost of goods sold in the comparable period last year included
$0.4 million in similar charges. Prior to taking those restructuring
and related charges into account, gross margin improved as the
positive impact of price increases and increased volume offset
increased raw material costs.
The company generated a second quarter operating loss of $209.9
million versus income of $18.1 million in the same quarter of fiscal
2006. The primary reasons for the decline were the $214.0 goodwill
impairment charge and significantly increased restructuring and
related charges of $16.5 million in fiscal 2007 compared with $4.2
million in the prior year. Other factors include increased
distribution expense of approximately $5.8 million and higher
commodity costs, including an increase of approximately $2.0 million
in zinc costs.
"This quarter marked the completion of a number of critical
accomplishments," said David Jones, chairman and chief executive
officer at Spectrum Brands. "First, I am pleased with the solid
revenue growth generated this quarter from all of our major product
lines, particularly the significant improvement in global battery
sales. In addition, we successfully refinanced the company's senior
debt facility to provide additional liquidity and flexibility, and
made significant progress in our ongoing cost reduction program, the
benefits of which will be seen in the financial results for the second
half of fiscal 2007 and beyond. We continue to focus on strengthening
our capital structure through future strategic asset sales."
Second Quarter Segment Results
The company's Global Batteries and Personal Care segment reported
net sales of $297.2 million, compared with $276.8 million reported
last year. Foreign exchange translation contributed $10.1 million.
Battery sales increased nine percent versus year ago results, with
improvement in all geographic regions. In North America, Rayovac
alkaline battery sales to consumers at retail increased eleven
percent, in large part due to the successful implementation of price
increases in January 2007. Latin American battery sales trends showed
growth of eleven percent, benefiting from pricing and product mix. In
Europe, while battery conditions remain challenging, the positive
impact of the strong Euro was more than enough to offset the impact of
negative product mix shifts. Remington branded products grew three
percent during the quarter, primarily as a result of distribution and
market share gains in Europe and Latin America. Segment profitability
for Global Batteries and Personal Care was $22.1 million, an
improvement over last year's $13.4 million, primarily driven by higher
sales.
Global Pet Supplies net sales were $142.5 million versus $137.8
million in the prior year. Companion animal product sales grew 12.5
percent, while global aquatics sales were flat as compared with last
year. Favorable foreign exchange translation contributed $2.8 million.
Segment profitability for the quarter was $16.4 million compared with
$19.0 million last year, primarily a function of transitional cost
inefficiencies associated with ongoing manufacturing consolidation.
Corporate expenses were $17.9 million as compared to $10.1 million
in the prior year period. Fiscal 2007 second quarter expense included
a $3.9 million write-off of deal costs associated with the company's
decision to sell the Home & Garden business, and $3.6 million
attributable to incentive compensation accruals. Fiscal 2006 expense
included no such accruals.
Interest expense increased to $69.2 million from $29.9 million in
the comparable prior year period, primarily due to a prepayment
premium of $11.6 million associated with the refinancing of the
company's senior credit facility and the write-off of debt issuance
costs of $24.6 million.
As previously disclosed, Spectrum Brands is holding its Home &
Garden business for sale, and will continue to report Home & Garden as
discontinued operations until such time as a transaction is
consummated. The impact of Home & Garden during the quarter was a loss
of $6.4 million as compared with income of $3.4 million in the prior
year. Operating income was $14.6 million versus $20.6 million last
year. Year over year sales growth of five percent was offset by an
increase in raw materials, manufacturing inefficiencies and increased
selling and merchandising expense. Also included in the quarterly
results were a $3.3 million increase in interest expense caused by
higher borrowing rates and a one-time income tax charge of $5 million.
Consumer purchases of Spectrum Brands' home and garden products at
retail grew 18 percent in the quarter as compared with the prior year
period.
Impairment Charge
The company recorded a non-cash goodwill impairment charge of
$214.0 million during the quarter, writing off all of the fair value
of goodwill related to its North American batteries and personal care
businesses, which are included in the company's Global Batteries &
Personal Care segment. This charge resulted from an evaluation of
goodwill and indefinite-lived intangibles as required by SFAS 142,
"Goodwill and Other Intangible Assets", and was primarily triggered by
more conservative future growth assumptions and the decline in the
company's market capitalization during the quarter. There is no impact
to cash, cash flow or the company's expectations for future operations
as a result of this charge.
Webcast Information
Spectrum Brands will hold a conference call at 8:30 a.m. (ET), May
10, 2007, to further discuss its second quarter results. The call will
be accessible via webcast through the company's website,
www.spectrumbrands.com, and will be archived online until May 24,
2007.
Non-GAAP Measurements
Within this release, reference is made to adjusted diluted
earnings per share. See attached Table 3, "Reconciliation of GAAP to
Adjusted Diluted Earnings Per Share," for a complete reconciliation of
diluted earnings per share on a GAAP basis to 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 this information to investors to assist in meaningful
comparisons of past, present and future operating results and to
assist in highlighting the results of on-going operations. While
Spectrum Brands management believes that 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, portable lighting, lawn and garden
products, household insect control, shaving and grooming products,
personal care products and specialty pet supplies. Spectrum Brands'
products are sold by the world's top 25 retailers and are available in
more than one million stores in 120 countries around the world.
Headquartered in Atlanta, Georgia, Spectrum Brands generated net sales
of $2.5 billion in fiscal 2006 and has approximately 8,400 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.
The company also cautions the reader that undue reliance should
not be placed on any forward-looking statements, which speak only as
of the date of this release. Spectrum Brands undertakes no duty or
responsibility to update any of these forward-looking statements to
reflect events or circumstances after the date of this report or to
reflect actual outcomes.
Attached
Table 1 - Condensed Consolidated Statements of Operations
Table 2 - Supplemental Financial Data
Table 3 - Reconciliation of GAAP to Adjusted Diluted Earnings Per
Share
Table 1
SPECTRUM BRANDS, INC.
Condensed Consolidated Statements of Operations
For the three and six months ended April 1, 2007 and April 2, 2006
(Unaudited)
(In millions, except per share amounts)
THREE MONTHS
-----------------------------
F2007 F2006 (a) INC(DEC)
%
-------- ----------
Net sales $439.7 $414.7 6.0%
Cost of goods sold 268.4 255.4
Restructuring and related charges 6.7 0.4
-------- -------
Gross profit 164.6 158.9 3.6%
Selling 98.9 89.9
General and administrative 45.1 39.9
Research and development 6.7 7.2
Restructuring and related charges 9.8 3.8
Goodwill and intangibles impairment 214.0 -
-------- -------
Total operating expenses 374.5 140.8
Operating income (209.9) 18.1
Interest expense 69.2 (b) 29.9
Other expense (income), net 2.6 (6.6)
-------- -------
(Loss) Income from continuing
operations before income taxes (281.7) (5.2)
Income tax (benefit) expense (50.6) (3.8)
-------- -------
(Loss) Income from continuing
operations (231.1) (1.4)
(Loss) Income from discontinued
operations, net of tax (6.4)(c) 1.9 (d)
-------- -------
Net (loss) income $(237.5) $0.5
======== =======
Average shares outstanding (f) 49.8 49.5
(Loss) Income from continuing operations $(4.64) $(0.03)
Income (Loss ) from Discontinued
operations (0.13)(g) 0.04
-------- -------
Basic (loss) earnings per share $(4.77) $0.01
======== =======
Average shares and common stock
equivalents outstanding (e) 49.8 51.0
(Loss) Income from continuing operations $(4.64) $(0.03)
Income (Loss ) from Discontinued
operations (0.13)(f) 0.04
-------- -------
Diluted (loss) earnings per share $(4.77) $0.01
======== =======
SIX MONTHS
------------------------------
F2007 F2006 (a) INC(DEC)
%
--------- ----------
Net sales $1,004.2 $980.9 2.4%
Cost of goods sold 618.1 596.4
Restructuring and related charges 12.6 1.7
--------- -------
Gross profit 373.5 382.8 -2.4%
Selling 224.9 198.2
General and administrative 82.1 79.6
Research and development 13.6 14.4
Restructuring and related charges 11.2 4.9
Goodwill and intangibles impairment 214.0 -
--------- -------
Total operating expenses 545.8 297.1
Operating income (172.3) 85.7
Interest expense 101.0 59.7
Other expense (income), net 3.6 (5.1)
--------- -------
(Loss) Income from continuing
operations before income taxes (276.9) 31.1
Income tax (benefit) expense (49.1) 9.5
--------- -------
(Loss) Income from continuing
operations (227.8) 21.6
(Loss) Income from discontinued
operations, net of tax (28.5)(c) (18.7)(e)
--------- -------
Net (loss) income $(256.3) $2.9
========= =======
Average shares outstanding (f) 49.8 49.5
(Loss) Income from continuing
operations $(4.57) $0.44
Income (Loss ) from Discontinued
operations (0.57) (0.38)
--------- -------
Basic (loss) earnings per share $(5.14) $0.06
========= =======
Average shares and common stock
equivalents outstanding (e) 49.8 50.8
(Loss) Income from continuing
operations $(4.57) $0.43
Income (Loss ) from Discontinued
operations (0.57) (0.37)
--------- -------
Diluted (loss) earnings per share $(5.14) $0.06
========= =======
(a) The Company's Home & Garden business, discontinued effective
October 1, 2006, is excluded from continuing operations for all
periods presented. Certain amounts have been reclassified in the
three and six months ended April 2, 2006 to conform to the current
year classification and present this business as discontinued
operations.
(b) For the three and six months ended April 1, 2007, includes the
write-off of deferred financing fees and a prepayment premium of
$15.7 million and $11.6 million, respectively, related to the
Company's previously existing credit facilities which were refinanced
on March 30, 2007. Also included in interest expense for the three
and six months ended April 1, 2007 is the write-off of deferred
financing fees of $8.9 million related to the exchange of the
Company's $350 million 8 1/2% senior subordinated notes due October
1, 2013.
(c) For the three and six months ended April 1, 2007, reflects the
after-tax net loss of the Company's Home & Garden business for which
the Company discontinued operations effective October 1, 2006.
(d) For the three months ended April 2, 2006, includes the $3.4
million after-tax net income of the Company's Home & Garden business
for which the Company discontinued operations effective October 1,
2006. In addition, for the three months ended April 2, 2006, includes
the $1.5 million after-tax net loss of the fertilizer technology and
Canadian professional fertilizer business of Nu-Gro for which the
Company discontinued operations effective October 1, 2005.
(e) For the six months ended April 2, 2006, includes the $13.4 million
after-tax net loss of the Company's Home & Garden business for which
the Company discontinued operations effective October 1, 2006. In
addition, for the six months ended April 2, 2006, includes the $5.3
million after-tax net loss of the fertilizer technology and Canadian
professional fertilizer business of Nu-Gro for which the Company
discontinued operations effective October 1, 2005.
(f) For the three and six months ended April 1, 2007, we have not
assumed the exercise of common stock equivalents as a impact would be
antidilutive.
(g) Per share figures calculated prior to rounding.
Table 2
SPECTRUM BRANDS, INC.
Supplemental Financial Data
For the three and six months ended April 1, 2007 and April 2, 2006
(Unaudited)
($ In millions)
Supplemental Financial Data F2007 F2006
- -------------------------------- --------- ---------
Cash $118.2 $14.6
Trade receivables, net (b) $256.2 $391.2
Days Sales Outstanding (c) 51 49
Inventory, net (b) $348.8 $485.6
Inventory Turnover (d) 3.4 3.3
Total Debt $2,659.8 $2,282.7
THREE MONTHS SIX MONTHS
------------------- -----------------
Supplemental Cash Flow Data F2007 F2006 F2007 F2006
- -------------------------------- --------- --------- --------- -------
Depreciation and amortization,
excluding amortization of debt
issuance costs $18.8 $ 17.6 $36.6 $ 34.4
Capital expenditures $5.1 $ 18.8 $12.8 $ 30.3
THREE MONTHS SIX MONTHS
------------------- -----------------
Supplemental Segment Sales &
Profitability F2007 F2006 F2007 F2006
- -------------------------------- --------- --------- --------- -------
Net Sales
- --------------------------------
Global Batteries & Personal
Care $297.2 $ 276.8 $724.0 $710.3
Global Pet Supplies 142.5 137.8 280.2 270.6
--------- --------- --------- -------
Total net sales $439.7 $ 414.6 $1,004.2 $980.9
========= ========= ========= =======
Segment Profit
- --------------------------------
Global Batteries & Personal
Care $22.1 $13.4 $62.0 $75.8
Global Pet Supplies 16.4 19.0 34.7 36.8
--------- --------- --------- -------
Total segment profit 38.5 32.4 96.7 112.6
Corporate 17.9 10.1 31.2 20.3
Restructuring and related
charges 16.5 4.2 23.8 6.6
Goodwill and intangibles
impairment 214.0 - 214.0 -
Interest expense 69.2 29.9 101.0 59.7
Other expense, net 2.6 (6.6) 3.6 (5.1)
--------- --------- --------- -------
(Loss) Income from
continuing operations
before income taxes $(281.7) $(5.2) $(276.9) $31.1
========= ========= ========= =======
(a) As of January 1, 2007, the Company began managing its business in
three reportable segments: (i) Global Batteries & Personal Care,
which consists of the Company's world-wide battery, shaving and
grooming, personal care and portable lighting business (the "Legacy
Businesses"); (ii) Global Pet Supplies, which consists of the
acquired United Pet Group, Tetra and Jungle Labs businesses; and
(iii) Home & Garden, which consists of the discontinued Home and
Garden Business. In connection with this realignment of reportable
segments, costs associated with Global Operations, consisting of
research and development, manufacturing management, global
purchasing, quality operations and inbound supply chain, which were
previously reflected in Corporate expenses, have been embedded within
each of the operating segments. In addition, certain general and
administrative expenses necessary to reflect the operating segments
on a stand alone basis, which were previously reflected as Corporate
expenses, have been allocated to the operating segments.
Accordingly, Corporate expenses include only those general and
administrative expenses associated with corporate overhead and long-
term compensation plans. All prior periods presented above have been
restated to reflect the changes described above. For the three and
six month period ended 4/1/2007, general and administrative expenses
included $3.9 million of professional fees incurred in connection
with the sale of Company's Home & Garden business discontinued
effective October 1, 2006.
(b) Trade receivables, net and Inventory, net as of April 1, 2007
exclude amounts related to our discontinued Home & Garden business as
these amounts are classified as Assets held for sale, effective
October 1, 2006. Comparable balances as of April 2, 2006 include
amounts for our Home & Garden business.
(c) Reflects actual days sales outstanding at end of period.
(d) Reflects cost of sales (excluding restructuring and related
charges) during the last twelve months divided by inventory as of the
end
(e) Amounts may not foot due to rounding
Table 3
SPECTRUM BRANDS, INC.
Reconciliation of GAAP to Adjusted Diluted Earnings Per Share
For the three and six months ended April 1, 2007 and April 2, 2006
(Unaudited)
THREE MONTHS SIX MONTHS
----------------- -------------------
F2007 F2006 F2007 F2006
------- ------- ------- ------
Diluted (loss) earnings per
share, as reported $(4.77) $0.01 $(5.14) $0.06
Adjustments, net of tax:
Restructuring and related
charges 0.17 (a) 0.05 (b) 0.28 (c) 0.09 (d)
Goodwill impairment 3.84 (e) - 3.84 (e) -
Re-financing costs 0.42 (f) - 0.42 (f) -
Disposition costs 0.05 (g) - 0.05 (g) -
Discontinued operations 0.13 (h) (0.04)(i) 0.57 (h) 0.37 (i)
Other adjustments (0.02)(j) (0.10)(k) (0.07)(l)(0.08)(m)
------- ------- ------- ------
4.59 (0.08) 5.09 0.37
Basic (loss) earnings per
share, as adjusted $(0.18) $(0.07) $(0.05) $0.43
======= ======= ======= ======
Note: Per share figures calculated prior to rounding.
(a) For the three months ended April 1, 2007, reflects $8.7 million,
net of tax, of restructuring and related charges as follows: (i) $4.8
million for the integration of United and Tetra; (ii) $2.6 million
for a series of actions in Europe and Latin America to reduce
operating costs and rationalize operating structure; (iii) $1.3
million for the Global restructuring announced January 10, 2007.
(b) For the three months ended April 2, 2006, reflects $2.8 million,
net of tax, of restructuring and related charges as follows: (i) $0.8
million primarily for the integration of United and Tetra (ii) $2.2
million for a series of actions in Europe to reduce operating costs
and rationalize operating structure; and (iii) ($0.2) million
associated with the completion of activities associated with the
closure of our manufacturing facility in Breitenbach, France.
(c) For the six months ended April 1, 2007, reflects $13.8 million,
net of tax, of restructuring and related charges as follows: (i) $7.7
million for the integration of United and Tetra; (ii) $4.8 million
for a series of actions in Europe and Latin America to reduce
operating costs and rationalize operating structure; (iii) $1.3
million for the Global restructuring announced January 10, 2007.
(d) For the six months ended April 2, 2006, reflects $4.4 million, net
of tax, of restructuring related charges as follows: (i) $1.6 million
primarily for the integration of United and Tetra (ii) $2.8 million
for a series of actions in Europe to reduce operating costs and
rationalize operating structure.
(e) For the three and six months ended April 1, 2007, reflects an
impairment charge of $191.2 million, net of tax, for the write-off of
goodwill of our North America batteries and personal care business
(which as of January 1, 2007 is included in our Global Batteries and
Personal care business segment) as a result of an impairment
evaluation in accordance with SFAS 142, "Goodwill and Other
Intangible Assets."
(f) For the three and six months ended April 1, 2007 reflects $21.1
million, net of tax, of charges associated with a refinancing of the
Company's debt as follows: (i) $14.3 million write-off of deferred
financing fees associated with the Senior term debt and the $350 8
1/2% Senior subordinated notes; (ii) $6.8 million pre-payment penalty
associated with the Senior term debt.
(g) For the three and six months ended April 1, 2007 general and
administrative expenses include $2.3 million, net of tax,
representing professional fees incurred in connection with the sale
of Company's Home & Garden business discontinued effective October 1,
2006.
(h) Reflects the loss from discontinued operations, net of tax, of the
Company's Home & Garden business, discontinued effective October 1,
2006.
(i) Reflects the income(loss), net of tax, of the Home & Garden
business segment, discontinued effective October 1,2006. In addition,
the three and six month periods ended April 2, 2006 include the
fertilizer technology and Canadian professional fertilizer businesses
of Nu-Gro, disposed of in January 2006.
(j) For the three months ended April 1, 2007, general and
administrative expenses include $.8 million, net of tax benefit,
related to expiring taxes and related 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, interest expense includes $.3 million, net of
tax benefit, related to interest charges associated with the
Company's provision for presumed credits applied to the Brazilian
excise tax on manufactured products.
(k) For the three months ended April 2, 2006, general and
administrative expenses include $.2 million, net of tax benefit,
related to expiring taxes and related 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. Other income includes $5.1 million, net of tax, gain on sale
of the Company's Bridgeport, CT and Madison, WI manufacturing
facilities. In addition, interest expense includes $.1 million
related to interest charges associated with the Company's provision
for presumed credits applied to the Brazilian excise tax on
manufactured products.
(l) For the six months ended April 1, 2007, general and administrative
expenses include $2.4 million, net of tax benefit, related to
expiring taxes and related 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, interest expense includes $.9 million, net of tax benefit,
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 2, 2006, general and administrative
expenses include $.1 million, net of tax benefit, related to expiring
taxes and related 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. Other
income includes a $5.1 million net of tax, gain on sale of the
Company's Bridgeport, CT and Madison, WI manufacturing facilities. In
addition, interest expense includes $1.7 million related to interest
charges associated with the Company's provision for presumed credits
applied to the Brazilian excise tax on manufactured products, cost of
goods sold includes $.1 million reflecting an inventory valuation
adjustment related to the fair value write-up of Jungle Lab inventory
in accordance with the requirements of SFAS 141.
CONTACT: Spectrum Brands, Inc.
Investor Contact:
Nancy O'Donnell, 770-829-6208
VP Investor Relations
or
Sard Verbinnen & Co for Spectrum Brands
Media Contact:
Victoria Hofstad, 212-687-8080
or
Jamie Tully, 212-687-8080