Spectrum Brands Holdings, Inc.
) posted strong fourth-quarter fiscal 2013 results with adjusted
earnings rising 6.0% year over year to 88 cents per share and
surpassing the Zacks Consensus Estimate of 85 cents. The global
branded consumer discretionary products company's bottom-line
results mainly benefited from top-line growth.
Including certain one-time items for both the periods, the
company reported a loss of 70 cents per share for the fourth
quarter as compared with earnings of 10 cents in the year-ago
Consolidated net sales for the quarter came in at $1,137.7
million, up 36.6% from the year-ago comparable period of $832.6
million. The sales growth was primarily driven by the Hardware
& Home Improvement (HHI) acquisition in Dec 2012. Moreover,
Spectrum Brands' net sales beat the Zacks Consensus Estimate of
$1,131.0 million. Further, including HHI results for the
prior-year's fourth quarter on a pro-forma basis, net sales
The company's adjusted earnings before interests, taxes,
depreciation and amortizations (EBITDA) increased 3.3% year over
year to $184.7 million. Excluding the impact of HHI acquisition,
Spectrum Brands adjusted EBITDA increased approximately 3.6% year
over year to $130.3 million, while as a percentage of sales it
improved 30 basis points to 15.4%.
Sales at Spectrum Brands'
Global Batteries & Appliances
segment came in at $577.3 million compared with the year-ago
quarter figure of $580.0 million primarily due to the company's
planned elimination of low-margin promotions in North American
small electrical appliances. However, excluding the negative
impact from currency exchange rates, the segment's revenues rose
marginally from the previous year. The segment's adjusted EBITDA
came in at $77.3 million versus $77.1 million in the year-ago
quarter. However, excluding the currency translation effect,
adjusted EBITDA increased 9.1% in the quarter.
Global Pet Supplies
segment sales came in at $165.2 million, down from the year-ago
comparable quarter sales of $166.5 million. The fall occurred as
the sales growth of North American and European companion animals
were more than offset by weak sales of North American aquatics.
Adjusted EBITDA of the segment came at $35.8 million compared
with $35.7 million in the year-ago period.
Sales at the
Home & Garden
segment increased 17.8% year over year to $101.4 million
primarily due to favorable weather conditions as well as extended
selling season. The segment's adjusted EBITDA grew 26.0% to $21.8
million primarily driven by higher sales and effective cost
On a pro-forma basis, Spectrum Brands'
segment sales increased 14.4% to $293.8 million primarily driven
by robust performance at its U.S. residential security and
plumbing businesses. However, the segment's adjusted EBITDA of
$54.4 million was slightly higher than the year-ago figure due to
increased spending on new product development and marketing.
Other Financial Details
Spectrum Brands ended the fiscal 2013 with a cash and cash
equivalents of $207.3 million and a total debt of $3,218.9
million. During the fiscal the company generated a free cash flow
of $254.0 million in excess of its targeted goal of $240.0
During fiscal 2013, Spectrum Brands repaid over $200 million
of its long-term debt. It intends to reduce its debt further in
fiscal 2014 by $250 million or above.
Fiscal 2014 Outlook
Including HHI in the prior year period on a pro-forma basis,
Spectrum Brands expects net sales for fiscal 2014 to grow at or
above the rate of GDP compared with fiscal 2013 net sales.
Moreover, the company hopes to generate free cash flow of $350
million and projects capital expenditure in the range of
Other Stocks to Consider
Currently, Spectrum Brands carries a Zacks Rank #4 (Sell).
However, some better-ranked consumer discretionary products
Prestige Brands Holdings, Inc.
). All these carry a Zacks Rank #2 (Buy).
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