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Spectrum Brands Holdings (SPB)
Q2 2013 Earnings Call
April 30, 2013 4:30 pm ET
David A. Prichard - Vice President of Investor Relations and Corporate Communications
David R. Lumley - Chief Executive Officer, Director, President of Global Batteries and President of Home & Garden
Anthony L. Genito - Chief Financial Officer, Chief Accounting Officer, Executive Vice President and Member of Risk Management Steering Committee
William Schmitz - Deutsche Bank AG, Research Division
Daniel Oppenheim - Crédit Suisse AG, Research Division
Lee J. Giordano - Imperial Capital, LLC, Research Division
Hamed Khorsand - BWS Financial Inc.
Karru Martinson - Deutsche Bank AG, Research Division
Previous Statements by SPB
» Spectrum Brands Holdings Management Discusses Q1 2013 Results - Earnings Call Transcript
» Spectrum Brands Holdings Management Discusses Q4 2012 Results - Earnings Call Transcript
» Spectrum Brands Holdings Management Discusses Q3 2012 Results - Earnings Call Transcript
I would now like to introduce Mr. David Prichard, Vice President of Investor Relations. Mr. Prichard, you may begin your conference.
David A. Prichard
Good afternoon, and welcome to Spectrum Brands Holdings Fiscal 2013 Second Quarter and First Half Earnings Conference Call and Webcast. I'm Dave Prichard, Vice President of Investor Relations for Spectrum Brands and moderator for today's call.
Now to help you follow along with our comments this afternoon, as some of you may have seen already, we have placed a slide presentation -- and it's on the Event Calendar page in the Investor Relations section of our website, which is www.spectrumbrands.com. This document will remain there following our call, so you can access it in the days to come as well.
So if we start with Slide 2 of this presentation I just referenced, our call today will be led, again, by Dave Lumley, our Chief Executive Officer; and Tony Genito, our Chief Financial Officer, who will both provide opening comments and then conduct the Q&A session.
If we now turn to Slides 3 and 4, our comments today include forward-looking statements. They include our outlook for fiscal 2013 and beyond. These statements are based upon management's current expectations, projections and assumptions and are, by nature, uncertain. Now actual results may differ materially, so due to that risk, Spectrum Brands encourages you to review the risk factors and cautionary statements outlined in our press release dated April 30, 2013 and our most recent SEC filings and Spectrum Brands' most recent 10-K. We assume no obligation to update any forward-looking statement.
Also, please note that we're going to discuss certain non-GAAP financial measures in this call. Now reconciliations of these on a GAAP basis for these measures, they're included in this afternoon's press release and 8-K filing, which are also both available on our website in the Investor Relations section.
For the second quarter of fiscal 2013, the company reported a net loss of $41.2 million or $0.79 diluted loss per share on average shares and common stock equivalents outstanding of 52.1 million. This compared to a net loss of $28.7 million or $0.56 diluted loss per share in the year-ago quarter based upon average shares and common stock equivalents outstanding of 51.5 million.
By segment for the second quarter of fiscal 2013, the Global Batteries & Appliances segment reported net income as adjusted of $34.6 million versus $35.6 million a year ago. The Global Pet Supplies segment reported net income as adjusted of $16.4 million versus net income as adjusted of $14.8 million in fiscal 2012. The Home and Garden business segment reported net income as adjusted of $20.6 million versus net income of $21.2 million as adjusted last year. And finally, the Hardware & Home Improvement segment reported net income as adjusted of $600,000 in the second quarter of fiscal 2013.
With that as background, I am now very pleased to turn the call over to our Chief Executive Officer, Dave Lumley.
David R. Lumley
Thanks, Dave, and thank you, all, for joining us this afternoon.
Turning to Slide 6. We reported good results for Spectrum Brands, including the legacy business, in the second quarter, which seasonally is our smallest quarter of the year, and HHI, our new hardware group, added an improved performance in its first full quarter as part of our company.
Our markets remain challenged by a difficult macroeconomic environment, highlighted by sluggish retail activity, tightening retail inventory management and frankly, a stunned consumer. These consumers are juggling higher taxes, generally stagnant wages and higher everyday expenses.
Still, we believe our Spectrum Value Model and our largely nondiscretionary, non-premium price replacement products serves us well, providing consistent value to our retail partners and consumers worldwide.
With a solid first half behind us, we remain on track to deliver another year of record growth and improved results from our legacy business, along with the added growth from HHI.
On Slide 7. Our second quarter net sales showed an increase of 1%, including HHI at both quarterly periods. HHI and Global Pet reported revenue growth. Our legacy business sales were solid, impacted by the planned $10 million continuing exit of low-margin promotional business in North American Small Appliances; this is similar to past quarters. We also had an expected shortfall in Home and Garden revenues given the difficult comparison with last year due to the very early and warm 2012 spring.
Our net loss in the second quarter was driven by an inventory revaluation related to HHI and one-time acquisition and integration and restructuring costs.