In an effort to further strengthen its balance sheet,
Spectrum Brands Holdings, Inc.
) yesterday announced that it has lowered its term debt by $100
million. With this, the global branded consumer products company
has achieved its pre-announced target of reducing term loan by
$200 million in fiscal 2013.
Spectrum Brands remains focused on using its free cash flow to
lower its debt burden. In the third quarter of fiscal 2013, the
company made voluntary prepayments worth $100 million, in order
to achieve its long-term targeted leverage (total debt to
adjusted EBITDA) ratio of about 2.5x-3.5x.
At the end of third-quarter fiscal 2013, Spectrum Brand had an
outstanding term loan of $757 million. The company, during the
last reported quarter, revealed that it is expecting a leverage
ratio of approximately 4.4 times or less at the end of fiscal
Moreover, Spectrum Brands is focused on strengthening its
balance sheet through simplification of its capital structure.
The company also continues to enhance its financial flexibility
in order to boost shareholder value.
Earlier, on Aug 6, Spectrum Brands' board of directors
approved a new share repurchase program worth $200 million, which
will expectedly be complete within 2 years from the day of
Spectrum Brands' decision to buy back shares not only reflects
the company's strong and consistent cash generation but depicts
its commitment to enhance shareholder value as well. Moreover,
the company paid its first ever quarterly dividend of 25 cents
per share on Mar 12 this year and announced that it will
regularize it thereafter. Looking beyond fiscal 2013, the company
will consider increasing its dividend rate depending on the
amount of growth in its free cash flow.
Some of the consumer goods companies that have been rewarding
their shareholders through payment of regular dividend over the
Procter & Gamble Co.
The Clorox Co.
Further, Spectrum Brands is undertaking aggressive cost cuts
and seeking opportunities to expand its brand portfolio. It is
also utilizing its game-changing Spectrum Value Model well to
deliver value to customers at a lower price than that of its
peers. Currently, Spectrum Brands holds a Zacks Rank #3
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SPECTRUM BRANDS (SPB): Free Stock Analysis
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