Spectrum Brands Holdings Reports Record Fiscal 2014 First Quarter Results

  Spectrum Brands Holdings Reports Record Fiscal 2014 First Quarter Results

   Company Reports Net Income of $54 Million and Grows Net Sales, GAAP EPS,
          Adjusted EPS, Adjusted EBITDA and Margins in First Quarter

 Reiterates Expectations for 5^th Consecutive Year of Record Performance from
Legacy Business in Fiscal 2014, Along with Higher Results from HHI Acquisition

Net Cash Provided from Operating Activities After Purchases of Property, Plant
 and Equipment (Free Cash Flow) Expected to Grow to At Least $350 Million in
Fiscal 2014 Versus $254 Million in Fiscal 2013 and $208 Million in Fiscal 2012

       Announces 20 Percent Increase in Quarterly Common Stock Dividend

Business Wire

MIDDLETON, Wis. -- January 29, 2014

Spectrum Brands Holdings, Inc. (NYSE: SPB), a global and diversified consumer
products company with market-leading brands, today reported record fiscal 2014
first quarter results for the period ended December 29, 2013, and reconfirmed
its outlook for a fifth consecutive year of record performance from the legacy
business, coupled with continuing growth from its Hardware and Home
Improvement (HHI) business.

The Company’s record first quarter was highlighted by solid results from its
HHI and Home and Garden divisions; strong European results; margin
improvements; net income, GAAP earnings per share, adjusted diluted earnings
per share and adjusted EBITDA growth; and a record fiscal first quarter level
of savings from continuous improvement programs across all divisions.

Spectrum Brands reiterated plans to reduce term debt by approximately $250
million in fiscal 2014 and expectations for free cash flow to increase to at
least $350 million, a significant improvement from a record $254 million in
fiscal 2013 and $208 million in fiscal 2012.

Separately today, Spectrum Brands said its Board of Directors approved a 20
percent increase in the quarterly common stock dividend to $0.30 per share
from $0.25, reaffirming the Company’s consistent and ongoing ability to
generate strong free cash flow and its commitment to deliver attractive
returns to its shareholders.

Fiscal 2014 First Quarter Results Highlights:

  *Net sales of $1.10 billion in the first quarter of fiscal 2014, including
    the acquired HHI business, increased 26.5 percent versus $870.3 million a
    year ago; including HHI in the full prior year period on a pro forma
    basis, net sales increased 3.6 percent and 3.8 percent excluding the
    negative impact of foreign exchange.
  *Net income of $54.3 million and diluted income per share of $1.03 in first
    quarter of fiscal 2014 improved from a net loss of $13.4 million and
    diluted loss per share of $0.26 in the prior year quarter.
  *Adjusted diluted earnings per share, a non-GAAP measure, of $1.09 in the
    first quarter of fiscal 2014 increased 39.7 percent compared to $0.78 last
    year, including HHI in the full prior year period on a pro forma basis.
  *Adjusted EBITDA, a non-GAAP measure, of $178.8 million in the first
    quarter of fiscal 2014 grew 36.8 percent versus $130.7 million in fiscal
    2013; including HHI as if acquired at the beginning of fiscal 2013,
    adjusted EBITDA increased 11.4 percent.
  *Adjusted EBITDA margin in the first quarter of fiscal 2014 increased to
    16.2 percent compared to 15.1 percent in the year-ago quarter, including
    HHI in the full prior year period on a pro forma basis.
  *Legacy Spectrum Brands adjusted EBITDA of $129.2 million in the first
    quarter of fiscal 2014 increased 1.7 percent versus the prior year,
    representing the 13^th consecutive quarter of year-over-year adjusted
    EBITDA growth; legacy business fiscal 2014 first quarter adjusted EBITDA
    margin grew to 15.7 percent compared to 15.2 percent last year.
  *Fiscal 2014 net cash provided from operating activities after purchases of
    property, plant and equipment (free cash flow, a non-GAAP measure)
    expected to be at least $350 million compared to $254 million in fiscal
    2013 and $208 million in fiscal 2012.
  *Company expects to use its strong free cash flow to reduce term debt by
    approximately $250 million and lower its balance sheet leverage in the
    second half of fiscal 2014, consistent with the seasonality of its cash
    flows.
  *Spectrum Brands issued $215 million and €225 million of term debt in the
    first quarter of fiscal 2014 to replace and reprice $513 million of
    existing term debt, which will reduce cash interest costs and, through the
    Euro portion placed in Germany, better align cash inflows with cash
    outflows related to principal, interest and taxes.
  *In early January 2014 the Company’s Home and Garden division acquired The
    Liquid Fence Company, the U.S. leader in the consumer animal repellents
    market in an immediately accretive transaction that provides a new and
    complementary position in a rapidly expanding segment of the $1.5 billion
    U.S. retail lawn and garden controls market.

“Our record first quarter results give us a strong start on delivering a fifth
consecutive year of record financial performance from our legacy business
along with strong growth from our HHI division,” said Dave Lumley, Chief
Executive Officer of Spectrum Brands Holdings. “We reported net income of $54
million and delivered adjusted EPS and adjusted EBITDA growth in the quarter
with excellent margin improvements. Our HHI and Home and Garden divisions had
especially solid results and, geographically, Europe once again was a bright
performer.

“We also achieved a record level of continuous improvement savings for a
fiscal first quarter,” Mr. Lumley said. “This reinforces our ongoing focus to
reduce our cost structure, more than offset higher product costs and continue
to invest in many new products, some of which are launching now with more to
follow in the months ahead.

“With our largely non-discretionary, non premium-priced replacement products,”
he said, “we will continue to pursue volume growth, new retailers, retail
distribution gains, new products, cross-selling opportunities, geographic
expansion, and select pricing actions while maintaining strict spending
controls and achieving investment paybacks from our expanding global cost
improvement initiatives.

“Given consumers’ growing preference for on-line shopping, we also are
increasing our investment and resources to partner with our retail customers’
e-commerce platforms to help them increase their overall sales,” he added.

“We believe value is winning in the marketplace with consumers worldwide and
that our Spectrum Value Model of ‘same or better performance/less price’ is
the optimum go-to-market strategy for our retail customers,” Mr. Lumley said.
“We are executing on our growth plans and are focused on delivering another
year of steady, measured financial improvement, including a strong increase in
free cash flow, in fiscal 2014. Our commitment remains to create greater
shareholder value, with a focus on growing our adjusted EBITDA, reducing debt
and deleveraging, and maximizing sustainable free cash flow.”

Fiscal 2014 First Quarter Consolidated Financial Results

Spectrum Brands Holdings reported consolidated record net sales of $1.10
billion in the first quarter of fiscal 2014, an increase of 26.5 percent
compared to $870.3 million a year earlier. The improvement was the result of
the HHI acquisition completed on December 17, 2012. Including HHI in the full
prior year period on a pro forma basis, net sales of $1.10 billion in the
first quarter of fiscal 2014 increased 3.6 percent compared to $1.06 billion
last year, and 3.8 percent excluding the negative impact of foreign exchange.

Excluding HHI, net sales for legacy Spectrum Brands of $822.2 million in the
first quarter of fiscal 2014 decreased 1.7 percent versus $836.3 million in
fiscal 2013, or 1.5 percent excluding the negative impact of foreign currency.
The sales decline was primarily attributable to lower revenues in the Global
Pet Supplies division due primarily to timing and retailer inventory
reductions, as well as the one-time, incremental sales impact, primarily
flashlights, of approximately $10 million in the prior year from Hurricane
Sandy.

Gross profit and gross profit margin in the first quarter of fiscal 2014 of
$381.2 million and 34.6 percent, respectively, compared to $288.2 million and
33.1 percent last year. Including HHI in the full prior year period on a pro
forma basis, gross profit margin of 34.6 percent in this year’s first quarter
increased from 34.2 percent a year ago. The gross profit margin for legacy
Spectrum Brands of 34.2 percent in the first quarter of fiscal 2014 compared
to 34.1 percent in fiscal 2013.

Spectrum Brands reported net income of $54.3 million, or $1.03 diluted income
per share, in the first quarter of fiscal 2014 on average shares and common
stock equivalents outstanding of 52.7 million. In fiscal 2013, the Company
reported a net loss of $13.4 million, or $0.26 diluted loss per share, on
average shares and common stock equivalents outstanding of 51.8 million.
Adjusted for certain items in both fiscal years, which are presented in Table
3 of this press release and which management believes are not indicative of
the Company’s ongoing normalized operations, the Company generated adjusted
diluted earnings per share, a non-GAAP measure, of $1.09 in the first quarter
of fiscal 2014, a 39.7 percent increase compared to $0.78 in the prior year,
including HHI in the full prior year period on a pro forma basis.

Adjusted EBITDA, a non-GAAP measure, of $178.8 million in the first quarter of
fiscal 2014 increased 11.4 percent compared to adjusted EBITDA of $160.5
million in fiscal 2013, including HHI in the full prior year period on a pro
forma basis. Adjusted EBITDA margin as a percentage of net sales increased to
16.2 percent compared to 15.1 percent in the year-ago quarter. Legacy Spectrum
Brands adjusted EBITDA of $129.2 million in the first quarter of fiscal 2014
increased 1.7 percent versus the prior year, representing the 13^th
consecutive quarter of year-over-year adjusted EBITDA growth, with the
adjusted EBITDA margin improving to 15.7 percent compared to 15.2 percent last
year. Adjusted EBITDA is a non-GAAP measurement of profitability which the
Company believes is a useful indicator of the operating health of the business
and its trends.

Fiscal 2014 First Quarter Segment Level Data

Global Batteries & Appliances

The Global Batteries & Appliances segment reported fiscal 2014 first quarter
net sales of $659.3 million versus $666.0 million in the year-ago quarter.
Higher personal care net sales were more than offset by lower battery and
small appliances net sales.

Global battery sales in the first quarter of fiscal 2014 were $264.5 million
compared to $271.0 million in the first quarter of fiscal 2013. The decline
was due primarily to the one-time, incremental sales impact of approximately
$10 million in predominantly flashlight sales in the North American business
in last year’s first quarter from Hurricane Sandy. The North American battery
business did, however, report higher overall alkaline battery revenues in the
first quarter of fiscal 2014. In Europe, VARTA® battery growth  was driven by
a combination of new customer listings, distribution gains at certain existing
customers, and promotions. Latin American battery revenues were essentially
unchanged on a foreign currency neutral basis.

Net sales for the global personal care product category of $178.1 million in
the first quarter of fiscal 2014 increased 1.8 percent versus $175.0 million
last year. Strong revenue growth in Europe and Latin America across all
categories more than offset lower net sales in North America, which resulted
primarily from category softness in men’s shaving and grooming.

The small appliances product category reported net sales in the first quarter
of fiscal 2014 of $216.8 million versus $220.1 million in the year-ago
quarter. A strong increase in European net sales was more than offset by a
decline in North American net sales as a result of competitor discounting at a
major retailer and, to a lesser degree, the timing of some holiday shipments
between the fiscal fourth and fiscal first quarters this year versus last
year. Excluding a negative foreign exchange impact of $2.2 million, net sales
for the small appliances product category declined 0.5 percent in the first
quarter of fiscal 2014.

With segment net income, as adjusted, of $93.1 million, the Global Batteries &
Appliances segment reported adjusted EBITDA of $114.2 million in the first
quarter of fiscal 2014, an increase of 3.1 percent compared to adjusted EBITDA
of $110.7 million in the year-earlier quarter, when segment net income was
$92.0 million.

Global Pet Supplies

The Global Pet Supplies segment reported net sales of $129.1 million in the
first quarter of fiscal 2014 compared to $139.8 million last year. Lower net
sales in both North American and European aquatics and companion animal
categories were predominantly driven by timing, a shorter Christmas selling
season and retailer inventory reductions.

Segment net income, as adjusted, was $12.5 million in the first quarter of
fiscal 2014 versus $10.1 million in the first quarter of fiscal 2013. First
quarter adjusted EBITDA decreased to $20.4 million compared to $23.1 million
in fiscal 2013 due to the lower sales and unfavorable product mix, partially
offset by strong cost reduction and expense control initiatives.

Home and Garden

The Home and Garden segment reported record first quarter net sales of $33.8
million, an increase of 10.8 percent compared to $30.5 million in the first
quarter of fiscal 2013. The increase was driven by higher net sales in the
lawn and garden controls product category as a result of strong retail
customer demand. The first quarter of the fiscal year is generally a period of
building inventory in advance of the Home and Garden segment’s major selling
season, which occurs in the spring and summer months. First quarter net sales
for the Home and Garden segment are typically less than 10 percent of
full-year revenues.

The segment reported a significantly smaller first quarter net loss, as
adjusted, of $1.2 million, a record low segment loss for a fiscal first
quarter, compared to a net loss of $4.5 million in the first quarter of fiscal
2013. The segment delivered its first positive adjusted EBITDA ever for a
fiscal first quarter. Adjusted EBITDA of $1.7 million increased from a loss of
$1.4 million a year ago due to higher volumes, improved product mix, cost
improvement initiatives and operating expense management.

Hardware & Home Improvement

The Hardware & Home Improvement (HHI) segment, which was acquired on December
17, 2012, recorded net sales of $278.4 million in the first quarter of fiscal
2014, an increase of 23.3 percent compared to $225.8 million on a pro forma
basis as if HHI was combined with Spectrum Brands for all of last year’s first
quarter. The revenue growth was primarily driven by double-digit improvements
in the U.S. residential security, builders’ hardware and plumbing categories.
The segment recorded net income, as adjusted, of $35.7 million in the first
quarter of fiscal 2014 compared to a net loss, as adjusted, of $3.5 million in
the first quarter of fiscal 2013. Adjusted EBITDA in the first quarter of
fiscal 2014 increased 48.1 percent to $49.6 million versus $33.5 million last
year.

Liquidity and Debt

Spectrum Brands completed its fiscal 2014 first quarter on December 29, 2013
with a solid liquidity position, including a cash balance of approximately
$132 million and $167 million available on its ABL facility. During the first
quarter of fiscal 2014, Spectrum Brands issued $215 million and €225 million
of term debt to replace and reprice $513 million of existing term debt. The
new term debt will reduce cash interest costs and, in addition, the Euro
portion was placed in Germany to better align the Company’s cash inflows with
cash outflows related to principal, interest and taxes.

As of the end of the first quarter of fiscal 2014, Spectrum Brands had
approximately $3,375 million of debt outstanding at par, consisting of its ABL
facility of $110 million, senior secured Term Loans totaling the U.S. dollar
equivalent of $1,752 million, $520 million of 6.375% senior unsecured notes,
$570 million of 6.625% senior unsecured notes, $300 million of 6.75% senior
unsecured notes and approximately $123 million of capital leases and other
obligations. In addition, the Company had approximately $41 million of letters
of credit outstanding.

Fiscal 2014 Outlook

Spectrum Brands expects fiscal 2014 net sales, as reported, to increase
approximately at the rate of GDP growth compared to fiscal 2013 net sales,
including HHI in the prior year on a pro forma basis. Fiscal 2014 free cash
flow is expected to be at least $350 million and capital expenditures are
projected to be approximately $70 million to $75 million. In the second half
of fiscal 2014, Spectrum Brands expects to use its strong free cash flow to
continue to reduce debt by approximately $250 million and delever its balance
sheet, consistent with past practice, resulting in leverage (total debt to
adjusted EBITDA) of approximately 4.2 times or less at the end of fiscal 2014.

Conference Call/Webcast Scheduled for 4:30 P.M. Eastern Time Today

Spectrum Brands will host an earnings conference call and webcast at 4:30 p.m.
Eastern Time today, January 29. To access the live conference call, U.S.
participants may call 877-556-5260 and international participants may call
973-532-4903. The conference ID number is 30529745. A live webcast and related
presentation slides will be available by visiting the Event Calendar page in
the Investor Relations section of Spectrum Brands’ website at
www.spectrumbrands.com.

A replay of the live webcast also will be accessible through the Event
Calendar page in the Investor Relations section of the Company’s website. A
telephone replay of the conference call will be available through Wednesday,
February 12. To access this replay, participants may call 855-859-2056 and use
the same conference ID number.

About Spectrum Brands Holdings, Inc.

Spectrum Brands Holdings, a member of the Russell 2000 Index, is a global and
diversified consumer products company and a leading supplier of consumer
batteries, residential locksets, residential builders’ hardware, faucets,
shaving and grooming products, personal care products, small household
appliances, specialty pet supplies, lawn and garden and home pest control
products, and personal insect repellents. Helping to meet the needs of
consumers worldwide, our Company offers a broad portfolio of market-leading,
well-known and widely trusted brands including Rayovac®, Kwikset®, Weiser®,
Baldwin®, National Hardware®, Pfister™, Remington®, VARTA®, George Foreman®,
Black & Decker®, Toastmaster®, Farberware®, Tetra®, Marineland®, Nature’s
Miracle®, Dingo®, 8-in-1®, FURminator®, Littermaid®, Spectracide®, Cutter®,
Repel®, Hot Shot® and Black Flag®. Spectrum Brands' products are sold by the
world's top 25 retailers and are available in more than one million stores in
approximately 140 countries. Spectrum Brands Holdings generated net sales of
approximately $4.1 billion in fiscal 2013. For more information, visit
www.spectrumbrands.com.

Non-GAAP Measurements

Management believes that certain non-GAAP financial measures may be useful in
certain instances to provide additional meaningful comparisons between current
results and results in prior operating periods. Excluding the impact of
currency exchange rate fluctuations may provide additional meaningful
information about underlying business trends. In addition, within this
release, including the tables attached hereto, reference is made to adjusted
diluted earnings per share and adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA). See attached Table 3, “Reconciliation
of GAAP Diluted Income (Loss) Per Share to Adjusted Diluted Earnings Per
Share,” for a complete reconciliation of diluted earnings (loss) per share on
a GAAP basis to adjusted diluted earnings (loss) per share, and see attached
Table 4, “Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA,” for a
reconciliation of GAAP Net Income (Loss) to adjusted EBITDA for the three
months ended December 29, 2013 versus the three months ended December 30,
2012. See attached Table 6, “Reconciliation of Forecasted Cash Flow from
Operating Activities to Forecasted Free Cash Flow,” for a reconciliation of
Net Cash provided from Operating Activities to Free Cash Flow for the twelve
months ending September 30, 2014. Adjusted EBITDA is a metric used by
management and frequently used by the financial community which provides
insight into an organization’s operating trends and facilitates comparisons
between peer companies, since interest, taxes, depreciation and amortization
can differ greatly between organizations as a result of differing capital
structures and tax strategies. Adjusted EBITDA also can be a useful measure of
a company’s ability to service debt and is one of the measures used for
determining the Company’s debt covenant compliance. Adjusted EBITDA excludes
certain items that are unusual in nature or not comparable from period to
period. In addition, the Company’s management uses 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. Management believes that adjusted diluted earnings per share is a
useful measure for providing further insight into our operating performance
because it eliminates the effects of certain items that are not comparable
from one period to the next. The Company’s management believes that free cash
flow is useful to both management and investors in their analysis of the
Company’s ability to service and repay its debt and meet its working capital
requirements. Free cash flow should not be considered in isolation or as a
substitute for pretax income (loss), net income (loss), cash provided by (used
in) operating activities or other statement of operations or cash flow
statement data prepared in accordance with GAAP or as a measure of
profitability or liquidity. In addition, the calculation of free cash flow
does not reflect cash used to service debt and therefore, does not reflect
funds available for investment or discretionary uses. The Company provides
this information to investors to assist in comparisons of past, present and
future operating results and to assist in highlighting the results of on-going
operations. While the Company’s management believes that non-GAAP measurements
are 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.

Forward-Looking Statements

Certain matters discussed in this news release and other oral and written
statements by representatives of the Company regarding matters such as the
Company’s ability to meet its expectations for its fiscal 2014 (including its
ability to increase its net sales and adjusted EBITDA) may be forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. We have tried, whenever possible, to identify these statements by
using words like “future,” “anticipate”, “intend,” “plan,” “estimate,”
“believe,” “expect,” “project,” “forecast,” “could,” “would,” “should,”
“will,” “may,” and similar expressions of future intent or the negative of
such terms. 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 as a result of (1) Spectrum Brands Holdings’ ability to manage and
otherwise comply with its covenants with respect to its significant
outstanding indebtedness, (2) our ability to finance, complete the acquisition
of, integrate, and to realize synergies from, the combined businesses of
Spectrum Brands and the Hardware & Home Improvement Group of Stanley Black &
Decker, and from our purchase of 56 percent of the equity of Shaser, Inc., and
from other bolt-on acquisitions, (3) risks related to changes and developments
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, (4)
changes in consumer demand for the various types of products Spectrum Brands
Holdings offers, (5) unfavorable developments in the global credit markets,
(6) the impact of overall economic conditions on consumer spending, (7)
fluctuations in commodities prices, the costs or availability of raw materials
or terms and conditions available from suppliers, (8) changes in the general
economic conditions in countries and regions where Spectrum Brands Holdings
does business, such as stock market prices, interest rates, currency exchange
rates, inflation and consumer spending, (9) Spectrum Brands Holdings’ ability
to successfully implement manufacturing, distribution and other cost
efficiencies and to continue to benefit from its cost-cutting initiatives,
(10) Spectrum Brands Holdings’ ability to identify, develop and retain key
employees, (11) unfavorable weather conditions and various other risks and
uncertainties, including those discussed herein and those set forth in the
securities filings of each of Spectrum Brands Holdings, Inc. and Spectrum
Brands, Inc., including each of their most recently filed Annual Reports on
Form 10-K or Quarterly Reports on Form 10-Q.

Spectrum Brands Holdings also cautions the reader that its estimates of
trends, market share, retail consumption of its products and reasons for
changes in such consumption are based solely on limited data available to
Spectrum Brands Holdings and management’s reasonable assumptions about market
conditions, and consequently may be inaccurate, or may not reflect significant
segments of the retail market. Spectrum Brands Holdings 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
Holdings 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.


Table 1
SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Operations
For the three months ended December 29, 2013 and December 30, 2012
(Unaudited)
($ in millions, except per share amounts)
                                                                 
                                  THREE MONTHS
                                  F2014             F2013             INC
                                                                      %
Net sales                         $   1,100.6       $   870.3         26.5  %
Cost of goods sold                    717.7             581.0
Restructuring and related            1.7              1.1     
charges
Gross profit                          381.2             288.2         32.3  %
                                                                      
Selling                               164.2             128.8
General and administrative            73.0              56.7
Research and development              10.8              8.2
Acquisition and integration           5.5               20.8
related charges
Restructuring and related            2.8              5.5     
charges
                                                                      
Total operating expenses             256.3            220.0   
                                                                      
Operating income                      124.9             68.2
                                                                      
Interest expense                      57.0              69.9
Other expense, net                   0.8              1.6     
                                                                      
Income (loss) from
continuing operations before          67.1              (3.3    )
income taxes
                                                                      
Income tax expense                   12.7             10.6    
                                                                      
Net income (loss)                     54.4              (13.9   )
                                                                      
Less: Net income (loss)
attributable to                      0.1              (0.5    )
non-controlling interest
                                                                      
Net income (loss)
attributable to controlling       $   54.3          $   (13.4   )
interest
                                                                      
Average shares outstanding            52.4              51.8
(a)
                                                                      
Basic income (loss) per
share attributable to             $   1.04          $   (0.26   )
controlling interest
                                                                      
Average shares and common
stock equivalents                     52.7              51.8
outstanding (a) (b)
                                                                      
Diluted income (loss) per
share attributable to             $   1.03          $   (0.26   )
controlling interest
                                                                      
Cash dividends declared per       $   0.25          $   —
common share
                                                                      
(a) Per share figures calculated prior to rounding.

(b) For the three months ended December 30, 2012, we have not assumed the
exercise of common stock equivalents as the impact would be antidilutive.


Table 2
SPECTRUM BRANDS HOLDINGS, INC.
Supplemental Financial Data
As of and for the three months ended December 29, 2013 and December 30, 2012
(Unaudited)
($ in millions)
                                                    
Supplemental Financial          F2014                     F2013
Data
Cash and cash equivalents       $    131.8                $    70.9
                                                          
Trade receivables, net          $    524.0                $    481.2
Days Sales Outstanding (a)           43                        42
                                                          
Inventory                       $    683.3                $    679.2
Inventory Turnover (b)               4.0                       4.0
                                                          
Total debt                      $    3,366.3              $    3,222.3
                                                          
                                THREE MONTHS
Supplemental Cash Flow          F2014                     F2013
Data
                                                          
Depreciation and
amortization, excluding         $    44.7                 $    31.0
amortization of debt
issuance costs
                                                          
Capital expenditures            $    15.9                 $    9.3
                                                          
                                THREE MONTHS
Supplemental Segment Sales      F2014                     F2013
& Profitability
                                                          
Net Sales
Global Batteries &              $    659.3                $    666.0
Appliances
Global Pet Supplies                  129.1                     139.8
Home and Garden                      33.8                      30.5
Hardware & Home                     278.4                   34.0       
Improvement
Total net sales                 $    1,100.6              $    870.3
                                                          
Segment Profit (Loss)
Global Batteries &              $    97.2                 $    95.4
Appliances
Global Pet Supplies                  13.0                      15.9
Home and Garden                      (1.2       )              (4.3       )
Hardware & Home                     40.0                    (3.2       )
Improvement
Total segment profit                 149.0                     103.8
                                                          
Corporate                            14.1                      8.2
Acquisition and
integration related                  5.5                       20.8
charges
Restructuring and related            4.5                       6.6
charges
Interest expense                     57.0                      69.9
Other expense, net                  0.8                     1.6        
                                                          
Income (loss) from
continuing operations           $    67.1                $    (3.3       )
before income taxes
                                                          
(a) Reflects actual days sales outstanding at end of period.
                                                          
(b) Reflects cost of sales (excluding restructuring and related charges)
during the last twelve months divided by average inventory during the period.

                                                                         
Table 3
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of GAAP Diluted Income (Loss) Per Share to Adjusted
Diluted Earnings Per Share
For the three months ended December 29, 2013 and December 30, 2012
(Unaudited)
                                                   
                                     THREE MONTHS
                                     F2014                  F2013
Diluted income (loss) per share,     $   1.03               $  (0.26  )
as reported
                                                                           
Adjustments, net of tax:
Pre-acquisition earnings of the          —                     0.06        (a)
HHI Business
Acquisition and integration              0.07          (b)     0.26        (c)
related charges
Restructuring and related                0.05          (d)     0.08        (e)
charges
Debt refinancing costs                   0.14          (f)     0.36        (g)
Purchase accounting inventory            —                     0.06        (h)
adjustment
Income taxes                            (0.20   )     (i)    0.22       (i)
                                         0.06                  1.04
                                                           
Diluted income per share, as         $   1.09              $  0.78   
adjusted


(a) For the three months ended December 30, 2012, reflects $3.2 million, net
of tax, of pre-acquisition earnings related to the acquired HHI Business. The
Pre-acquisition earnings of the HHI Business do not include the TLM Business
as stand alone financial data is not available for the periods presented. The
TLM Business is not deemed material to the Company's operating results.

(b) For the three months ended December 29, 2013, reflects $3.6 million, net
of tax, of Acquisition and integration related charges, as follows: (i) $2.7
million related to the acquisition of the HHI Business, consisting primarily
of integration costs; and (ii) $0.9 million related to the acquisition of
Shaser and other acquisition activity, consisting primarily of legal and
professional fees.
                                        
(c) For the three months ended December 30, 2012, reflects $13.5 million, net
of tax, of Acquisition and integration related charges as follows: (i) $9.5
million related to the acquisition of the HHI Business, consisting primarily
of legal and professional fees; (ii) $2.7 million related to the acquisition
of Shaser, consisting integration and legal and professional fees; (iii) $0.9
million related to the merger with Russell Hobbs consisting of integration
costs; and (iv) $0.4 million related to the acquisition of FURminator,
consisting of integration costs.
                                        
(d) For the three months ended December 29, 2013, reflects $2.9 million, net
of tax, of Restructuring and related charges primarily related to the Global
Expense Rationalization Initiatives announced in Fiscal 2013 and HHI Business
initiatives implemented prior to the acquisition.
                                        
(e) For the three months ended December 30, 2012, reflects $4.3 million, net
of tax, of Restructuring and related charges primarily related to the Global
Cost Reduction Initiatives announced in Fiscal 2009.
                                        
(f) For the three months ended December 29, 2013, reflects $7.3 million, net
of tax, related to financing fees and the write off of unamortized debt
issuance costs and original issue discount in connection with the replacement
of the Company's Term Loan.
                                        
(g) For the three months ended December 30, 2012, reflects $18.7 million, net
of tax, related to financing fees and the write off of unamortized debt
issuance costs in connection with the replacement of the Company's Term Loan
and the issuance of the 6.375% Notes and 6.625% Notes in connection with the
acquisition of the HHI Business.
                                        
(h) For the three months ended December 29, 2013, reflects a $3.4 million, net
of tax, non-cash increase to cost of goods sold related to the sales of
inventory that was subject to fair value adjustments in conjunction with the
acquisition of the HHI Business.
                                        
(i) For the three months ended December 29, 2013 and December 30, 2012,
reflects adjustments to income tax expense of $(10.8) million and $11.8
million, respectively, to exclude the impact of the valuation allowance
against deferred taxes and other tax related items in order to reflect a
normalized ongoing effective tax rate.


Table 4
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
For the three months ended December 29, 2013
(Unaudited)
($ in millions)
                                                                          
                                                                                 Consolidated
                  Global                             Hardware &    Corporate /   Spectrum
                  Batteries    Global     Home &     Home          Unallocated   Brands
                  &            Pet
                  Appliances   Supplies   Garden     Improvement   Items (a)     Holdings,
                                                                                 Inc.
                                                                                 
Net income
(loss)
attributable to   $  93.2      $  12.5    $ (1.2 )   $    35.5     $  (85.7  )   $    54.3
controlling
interest, as
adjusted (a)
Net (loss)
income
attributable to     (0.1  )     —        —           0.2        —             0.1
non-controlling
interest
Net income
(loss) as            93.1         12.5      (1.2 )        35.7        (85.7  )        54.4
adjusted (a)
                                                                                 
Income tax           —            —         —             —           12.7            12.7
expense
Interest             —            —         —             —           57.0            57.0
expense
Acquisition and
integration          1.8          —         —             2.2         1.5             5.5
related charges
Restructuring
and related         2.3        0.3      —           1.2        0.7           4.5
charges
                                                                                 
Adjusted EBIT        97.2         12.8      (1.2 )        39.1        (13.8  )        134.1
Depreciation
and                 17.0       7.6      2.9         10.5       6.7           44.7
amortization
(b)
                                                                                 
Adjusted EBITDA   $  114.2    $  20.4    $ 1.7     $    49.6     $  (7.1   )   $    178.8
                                                                                 
Note: Amounts
calculated
prior to
rounding.
                                                                                 
(a) It is the Company's policy to record Income tax expense and Interest expense on a
consolidated basis. Accordingly, such amounts are not reflected in the results of the
operating segments and are presented within Corporate/Unallocated Items.
                                                                                 
(b) Included within depreciation and amortization is amortization of unearned restricted
stock compensation.


Table 4
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
For the three months ended December 30, 2012
(Unaudited)
($ in millions)
                                                                          
                                                                                 Consolidated
                  Global                             Hardware &    Corporate /   Spectrum
                  Batteries    Global     Home &     Home          Unallocated   Brands
                  &            Pet
                  Appliances   Supplies   Garden     Improvement   Items (a)     Holdings,
                                                                                 Inc.
                                                                                 
Net income
(loss)
attributable to   $  92.5      $  10.1    $ (4.5 )   $   (3.5  )   $  (108.0 )   $  (13.4  )
controlling
interest, as
adjusted (a)
Net loss
attributable to   $  (0.5  )   $  —       $ —       $   —        $  —         $  (0.5   )
non-controlling
interest
Net income
(loss), as        $  92.0      $  10.1    $ (4.5 )   $   (3.5  )   $  (108.0 )   $  (13.9  )
adjusted (a)
                                                                                 
Pre-acquisition
earnings of the      —            —         —            30.3         —             30.3
HHI Business
(b)
Income tax           —            —         —            —            10.6          10.6
expense
Interest             —            —         —            —            69.9          69.9
expense
Acquisition and
integration          1.3          0.7       —            —            18.8          20.8
related charges
Restructuring
and related          1.3          5.0       0.2          —            0.1           6.6
charges
HHI Business
inventory fair      —          —        —          5.2        —           5.2    
value
adjustment
                                                                                 
Adjusted EBIT        94.6         15.8      (4.3 )       32.0         (8.6   )      129.5
Depreciation
and                 16.1       7.3      2.9        1.5        3.2         31.0   
amortization
(c)
                                                                                 
Adjusted EBITDA   $  110.7    $  23.1    $ (1.4 )   $   33.5     $  (5.4   )   $  160.5  
                                                                                 
Note: Amounts
calculated
prior to
rounding.
                                                                                 
(a) It is the Company's policy to record Income tax expense and Interest expense on a
consolidated basis. Accordingly, such amounts are not reflected in the results of the
operating segments and are presented within Corporate/Unallocated Items.
                                                                                 
(b) The Pre-acquisition earnings of the HHI Business do not include the TLM Business as stand
alone financial data is not available for the period presented. The TLM Business is not
deemed material to the Company's operating results.
                                                                                 
(c) Included within depreciation and amortization is amortization of unearned restricted
stock compensation.


Table 5
SPECTRUM BRANDS HOLDINGS, INC.
Pro Forma Net Sales Comparison
For the three months ended December 29, 2013 and December 30, 2012
(Unaudited)
(In millions)
                                                                 
                                            THREE MONTHS
                                            F2014         F2013         INC %
                                                                        
Spectrum Brands Holdings, Inc. Net          $ 1,100.6     $ 870.3       26.5 %
sales - as reported
HHI Business pre-acquisition Net sales        —             191.8
(a)
                                                         
Pro Forma Net Sales                         $ 1,100.6     $ 1,062.1     3.6 %


(a) Net sales have been adjusted to reflect the acquisition of the HHI
Business as if it occurred at the beginning of the period presented. HHI
Business pre-acquisition Net sales do not include the TLM Business as stand
alone financial data is not available for the period presented. The TLM
Business is not deemed material to the Company's operating results.


Table 6
SPECTRUM BRANDS HOLDINGS, INC.
Reconciliation of Forecasted Cash Flow from Operating Activities to Forecasted
Free Cash Flow
For the twelve months ended September 30, 2014
(Unaudited)
($ in millions)
                                        
Forecasted:
                                                  
Net Cash provided from Operating                  $         420 - 425
Activities
                                                  
Purchases of property, plant and                           (70) - (75)
equipment
                                                  
Free Cash Flow                                    $         350
                                                  

Contact:

Spectrum Brands Holdings, Inc.
Investor/Media Contact:
Dave Prichard, 608-278-6141
 
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