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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
April 6, 2006
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(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 of (Commission File No.) (IRS Employer
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))
Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
(a) 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 April 6, 2006, Spectrum Brands, Inc. issued a press release discussing its
estimated financial results for its second fiscal quarter of 2006 ended March
31, 2006. A copy of the press release is furnished as Exhibit 99.1 to this
report.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) 99.1 Press Release dated April 6, 2006 issued by Spectrum Brands, Inc.
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: April 6, 2006 SPECTRUM BRANDS, INC.
By:/s/ Randall J. Steward
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Name: Randall J. Steward
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Description
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99.1 Press Release dated April 6, 2006 issued by Spectrum Brands, Inc.
Exhibit 99.1
Spectrum Brands Updates Guidance for Second Quarter Results
ATLANTA--(BUSINESS WIRE)--April 6, 2006--Spectrum Brands (NYSE:
SPC) announced today that it expects second quarter 2006 fully diluted
earnings per share in the range of $0.03 to $0.06 and pro forma
diluted earnings per share in the range of $0.00 to $0.05,
substantially below the company's previous guidance. The shortfall is
largely attributable to ongoing challenges in the company's consumer
battery business, where sales in North American and Europe continue to
lag expectations.
Alkaline battery sales in North America declined from prior year
and fell short of expectations. Recovery of alkaline sales in North
America under the "Performance Guaranteed" marketing program has been
slower than anticipated. In addition, during the second quarter,
several of the company's largest retail customers implemented or
accelerated inventory adjustment initiatives designed to reduce their
retail inventory levels, which further impacted sales. The inventory
reduction programs also affected lawn and garden shipments, with a
total estimated impact on second quarter battery and lawn and garden
revenue of $25 to $30 million.
European alkaline and specialty battery sales were lower than
expected during the second quarter as the company's initiatives to
bolster battery sales growth have been unsuccessful in offsetting a
continuing unfavorable product mix shift from branded to private label
batteries and accelerating pricing pressure. Furthermore, non-mass
specialty stores, traditionally the company's strongest and most
profitable distribution channel, have lost share to food and mass
channels, further eroding Spectrum Brands' sales. The sales shortfall
in the quarter, and the resulting negative impact on manufacturing
cost variances, caused a reduction in operating contribution from
Spectrum Brands' European/Rest of World segment.
Commodity cost pressures, which have been a challenge throughout
fiscal 2006, continued during the second quarter. Spot prices of zinc,
a primary component in the manufacture of batteries, have doubled over
the last twelve months, and have increased more than ten percent in
the last month. Zinc prices have recently risen to new highs topping
$2800 per metric ton, and the company now believes this trend is
likely to continue.
Despite the above-mentioned retailer adjustments, consumer retail
purchases of most Spectrum Brands products other than consumer
batteries continued to show growth during the second quarter. Retail
purchases of the company's lawn and garden product offerings grew six
percent this quarter versus a year ago, and its Remington portfolio is
gaining market share across all categories in North America. The
company expects to report global pet segment top-line sales growth of
three to four percent for the quarter when compared to stand-alone
results last year.
"We entered fiscal 2006 with a plan to aggressively target
integration synergies while maintaining our focus on sales growth
across all product categories," said Dave Jones, Spectrum Brands'
chairman and chief executive officer. "We have made significant
progress in executing our integration initiatives this year, and we
expect to achieve our projected synergy savings. Our lawn and garden
and pet supply businesses continue to perform well. However, it is
clear that we must move more aggressively to enhance company
performance in light of recent trends in our North American and
European battery business."
Management is focused on a number of initiatives to streamline
operations and improve profitability. In Europe these initiatives
include the closure of the Ellwangen, Germany packaging center and the
relocation of operations to the Dischingen, Germany battery plant, the
transfer of private label battery production to the company's
manufacturing facility in China, and the previously announced resizing
and restructuring of sales, marketing and support functions. As a
result of these measures, headcount in Europe will be reduced by 350,
or approximately 24%. Total annualized savings are projected at $33
million when all actions are completed by the end of fiscal 2006.
The company's North American sales and marketing organization has
also been restructured, flattening the reporting structure and
rightsizing several support functions. These new actions are expected
to generate an incremental $7 million of annualized savings.
Spectrum Brands will be entering discussions with its lenders in
light of anticipated second quarter results, and will update investors
when those discussions are completed. The company anticipates no
problems with liquidity or ongoing cash generation.
An investor call will be held at 11:00 a.m. EDT to further discuss
today's announcement. A question and answer session will not be
offered as part of today's call. On April 11, at 3:30 p.m. EDT, Kent
Hussey, Spectrum Brands president and chief operating officer, will be
speaking to investors at the SunTrust Robinson Humphrey 35th Annual
Institutional Conference. A live webcast of both events will be made
available via www.spectrumbrands.com.
Pro forma diluted EPS referenced in this release exclude the
impact of certain items detailed in the attached table,
"Reconciliation of GAAP to Pro Forma EPS Guidance." Spectrum Brands
management and certain investors use pro forma results of operations
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 pro forma 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 core operations. While management believes these pro forma
results provide useful supplemental information, pro forma 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 and portable lighting, lawn and garden
care products, specialty pet supplies, shaving and grooming and
personal care products, and household insecticides. 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. 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 Form 10-Q and Annual Report on Form 10-K.
Table 1
Reconciliation of Projected FY2006 Second Quarter GAAP to Pro Forma
EPS Guidance
GAAP diluted EPS $0.03 - $0.06
Discontinued operations 0.03 0.03
Restructuring and related charges, net of tax 0.05 - 0.07
Gain on sale of surplus facilities (0.11) (0.11)
Pro forma diluted EPS $0.0 - 0.05
Weighted average shares outstanding 50.98 million
CONTACT: Spectrum Brands, Inc., Atlanta
Investor Contact:
Nancy O'Donnell, 770-829-6208
or
Ketchum for Spectrum Brands
Media Contact:
Dave Doolittle, 404-879-9266
david.doolittle@ketchum.com