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:
|
June
18, 2008
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||
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(Date
of earliest event reported)
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|
SPECTRUM
BRANDS, INC.
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(Exact
Name of Registrant as Specified in Charter)
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Wisconsin
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001-13615
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22-2423556
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(State
or other Jurisdiction of Incorporation)
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(Commission
File No.)
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(IRS
Employer Identification No.)
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Six
Concourse Parkway, Suite 3300, Atlanta, Georgia 30328
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(Address
of principal executive offices, including zip code)
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(770)
829-6200
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(Registrant's
telephone number, including area code)
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N/A
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(Former
Name or Former Address, if Changed Since Last Report)
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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:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
7.01. REGULATION FD DISCLOSURE
On May 21, 2008, Spectrum Brands, Inc.
(the “Company”)
announced that it entered into a definitive purchase agreement with Salton Inc.,
a Delaware corporation, and its wholly owned subsidiary, Applica Pet Products
LLC, for the sale of the Company's Global Pet Business (the "Transaction"). The
Company disclosed that the closing of the Transaction is subject to the receipt
of the consent of the Company's lenders under its senior credit
facilities.
On
June 18, 2008, in connection with the solicitation of the consent of such
lenders, Goldman Sachs & Co. furnished certain information to the
lenders. Attached as Exhibit 99.1 hereto and incorporated by
reference herein is a presentation of certain of such information.
Forward-Looking
Statements
This Current Report on Form 8-K
contains forward-looking statements, which are based on the Company’s current
expectations and involve risks and uncertainties, including, but not limited to,
risks and uncertainties relating to the Company's ability to obtain the consent
of the lenders under its senior credit facilities and various other factors,
including those set forth in the Company's most recently filed Annual Report on
Form 10-K and Quarterly Report on Form 10-Q. The Company cautions the
reader that actual results could differ materially from the expectations
described in the forward-looking statements. The Company also
cautions the reader that undue reliance should not be placed on any of the
forward-looking statements, which speak only as of the date of this
report. The Company undertakes no 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.
Item
9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d)
Exhibits
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99.1
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Supplemental
Regulation FD Disclosure of Spectrum Brands, Inc., dated June 18,
2008
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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.
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Date: June
18, 2008
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SPECTRUM
BRANDS, INC.
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|||
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By:
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/s/ Anthony L. Genito | |||
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Name:
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Anthony
L. Genito
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|||
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Title:
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Executive
Vice President,
Chief
Financial Officer and
Chief
Accounting Officer
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EXHIBIT
INDEX
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Exhibit
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Description
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99.1
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Supplemental
Regulation FD Disclosure of Spectrum Brands, Inc., dated June 18,
2008
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Exhibit
99.1
SUPPLEMENTAL
REGULATION FD DISCLOSURE
In
this supplemental disclosure, “the Company” refers to Spectrum Brands, Inc. and
its subsidiaries, unless the context otherwise requires or it is otherwise
indicated, "LTM period" with respect to any date, refers to the last twelve
month period ended on such date and "EBITDA" refers to earnings before interest,
taxes, depreciation and amortization.
This
Supplemental Regulation FD Disclosure contains forward-looking statements, which
are based on the Company’s current expectations and involve risks and
uncertainties, including, but not limited to, risks and uncertainties relating
to the Company's ability to obtain consent of its senior
lenders. Actual results may differ materially as a result of (1) the
occurrence of any event, change or other circumstance that could give rise to
the termination of the definitive purchase agreement for the sale of the
Company's Global Pet Business; (2) the inability to complete the sale of the
Company's Global Pet Business due to the failure to receive required regulatory
or other approvals or to satisfy other conditions to the sale; (3) the risk that
the proposed sale of the Company's Global Pet Business disrupts current plans
and operations; (4) difficulty or unanticipated expense incurred in connection
with the sale of the Company's Global Pet Business; (5) 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; (6) changes
in consumer demand for the various types of products the Company offers; (7)
unfavorable developments in the global credit markets; (8) the impact of overall
economic conditions on consumer spending; (9) fluctuations in commodities
prices, the costs or availability of raw materials or terms and conditions
available from suppliers; (10) changes in general economic conditions in the
countries and regions where the Company does business, such as stock market
prices, interest rates, currency exchange rates, inflation and consumer
spending; (11) the Company’s ability to successfully implement manufacturing,
distribution and other cost efficiencies and to continue to benefit from its
cost-cutting initiatives; and (12) unfavorable weather conditions and various
other risks and uncertainties, including those discussed herein and those set
forth in the Company’s securities filings, including the most recently filed
Annual Report on Form 10-K or Quarterly Report on Form 10-Q. The
Company 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 the Company and management’s
reasonable assumptions about market conditions, and consequently may be
inaccurate, or may not reflect significant segments of the retail market. The
Company cautions the reader that actual results could differ materially from the
expectations described in the forward-looking statements. The Company
also cautions the reader that undue reliance should not be placed on any of the
forward-looking statements, which speak only as of the date of this
disclosure. The Company undertakes no responsibility to update any of
these forward-looking statements to reflect events or circumstances after the
date of this disclosure or to reflect actual outcomes.
Sale of Global Pet
Business
The
Company estimates that the proposed sale of the Company's Global Pet Business to
Salton Inc. and Applica Pet Products LLC would strategically reduce the
Company's leverage, with a total debt reduction of $861 million, including a
retirement of 42% of the term loan facilities at par and a reduction of total
leverage, net of cash, from 8.4x to 7.9x, and senior leverage from 5.0x to
4.2x.
Transaction Sources and Uses
The Company estimates sources and uses for the proposed
sale as follows:
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Sources
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Amount
(in millions)
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Uses
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Amount
(in millions)
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Cash
from purchaser
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$692.5
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Asset
Based Loan Revolver Facility
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$60.0
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Cash
from balance sheet
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2.3
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US
Dollar Term Loan
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431.5
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7
3/8% Notes
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124.5
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Euro
Term Loan
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151.0
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11
1/2% PIK Notes*
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94.1
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7
3/8% Notes
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124.5
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11
1/2% PIK Notes
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94.1
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|||
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Income
Taxes
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35.0
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|||
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Accrued
Interest to senior lenders
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2.3
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|||
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Fees
& Expenses
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15.0
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|||
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Total
Sources:
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$913.4
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Total
Uses:
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$913.4
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*
Net of accrued interest (assumes 7/31/08 close).
The
Company's fees and expenses include an estimate of the consent fee which the
Company expects to pay to lenders under its senior credit facilities in
connection with the solicitation of consents in connection with the proposed
sale.
The
Company calculates net sales for the fiscal year 2007 excluding results from its
Global Pet Business to be approximately $2.0 billion, which by product category
may be broken down as follows: 9% Electric Personal Care, 5% Portable Lighting,
44% Consumer Batteries, 20% Lawn and Garden, 14% Electric Shaving and Grooming
and 8% Household Insect Control.
Recent LTM Adjusted EBITDA
Gains
LTM Adjusted EBITDA, a non-GAAP
financial measure, for the second fiscal quarter of 2007 through the second
fiscal quarter of 2008 was as follows:
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·
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Q2
2007 was $236 million
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·
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Q3
2007 was $241 million
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·
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Q4
2007 was $278 million
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·
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Q1
2008 was $284 million
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·
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Q2
2008 was $296 million
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Please
see the reconciliation of Adjusted EBITDA to GAAP results set forth
below.
Global Batteries and
Personal Care Sales Diversification
For fiscal year 2007, the Company
calculated the net sales mix in its global batteries and
personal care segment in Europe and Latin America as follows:
European
Sales Diversification
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·
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Fiscal
Year 2007: Total Net Sales: $607 million, 34% Remington, 3% Flashlights
and 63% Batteries.
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Latin
America Sales Diversification
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·
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Fiscal
Year 2007: Total Net Sales: $270 million, 9% Remington, 9% Flashlights and
82% Batteries.
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Personal Grooming
Trends
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·
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Remington
Hair Care in the U.S. was the fastest growing brand in units and value in
the industry as of May 31, 2008
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·
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The
Company lowered its advertisement spending for fiscal year 2008 and
improved product margins for its Remington
products
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·
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The
Company experienced significant reductions in selling, general and
administrative expense spending as a result of its global realignment,
which included a streamlined sales force and leveraged global research and
development function
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·
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The
Remington share of the personal grooming market in the United States is
number one in units and value over the last 13 weeks through May 31,
2008
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Current environment of the
Company's Home and Garden Business
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·
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The
Company's 2008 season started late. Weather patterns in the
United States have been mixed with flooding and tornadoes in the midwest
and continuing drought in the
southeast
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·
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Downturn
in new construction and resale markets has had a direct impact on the
industry
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·
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The
Company believes that its Home and Garden business share has been flat or
increased in virtually all categories year to
date
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·
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The
Company's household insect control products are experiencing moderate
growth
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·
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Retailers
are continuing to manage inventories very tightly as in many other
categories
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·
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Raw
material input costs and freight have continued to increase this
year
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Pro Forma Capitalization as
of 3/30/08
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Original
Amount
(in
millions)
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Original
Multiple LTM
Adjusted
EBITDA
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Pro
forma Amount
(in
millions)
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Pro
forma
LTM
Adjusted EBITDA
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||||
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$225
million Asset Based Loan Revolver
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$151
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$91
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|||||
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First
Lien US Dollar Term Loan
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984
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552
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|||||
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First
Lien Euro Term Loan
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407
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256
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Capital
Leases
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15
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15
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Other
Secured Debt
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36
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36
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Total
Secured Debt
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$1,593
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5.0x
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$950
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4.2x
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|||
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Variable
Rate Senior Subordinated Toggle Notes due 2013
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$347
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$253
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|||||
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8.5%
Senior Subordinated Notes due 2013
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3
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3
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|||||
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7.375%
Senior Subordinated Notes due 2015
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700
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576
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|||||
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Total
Debt
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$2,643
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8.4x
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$1,782
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7.9x
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Please
see the reconciliation of Adjusted EBITDA to GAAP results set forth
below.
Pro Forma
Results
The LTM 3/30/08 net sales mix
excluding the Company's Global Pet Business is 23% personal care, 28% home and
garden and 49% batteries and lights. Total LTM 3/30/08 net sales is
$2.6 billion with the Company's Global Pet Business and $2.0 billion excluding
the Company's Global Pet Business. Total reported debt as of 3/30/08
for the Company was approximately $2.6 billion or approximately $1.8 billion pro
forma following the expected application of proceeds from the sale of the
Company's Global Pet Business.
The Company's capital expenditures for the fiscal years
2006 and 2007 and LTM 3/30/08 were approximately $60 million, $24 million and
$19 million, respectively. Excluding results from the Company's Global Pet
Business, the Company's capital expenditures for the fiscal years 2006 and 2007
and LTM 3/30/08 were approximately $47 million, $15 million and $9 million,
respectively.
In determining compliance with the Company's senior
credit facilities, the Company makes certain adjustments to Adjusted
EBITDA. The Company's Adjusted EBITDA as calculated for purposes of senior
covenant compliance for the fiscal years 2006 and 2007 and LTM 3/30/08 were
approximately $286 million, $285 million and $306 million, respectively.
Excluding results from the Company's Global Pet Business, the Company's Adjusted
EBITDA as calculated for purposes of senior covenant compliance for the fiscal
years 2006 and 2007 and LTM 3/30/08 were approximately $193 million, $193
million and $215 million, respectively. Please
see the reconciliation of Adjusted EBITDA and Adjusted EBIDTA as calculated for
purposes of senior covenant compliance to GAAP results set forth
below.
Total
debt to Adjusted EBITDA (as calculated for purposes of senior covenant
compliance), net of cash, for the Company for the fiscal years 2006 and 2007 and
as of 3/30/08 were 7.8x, 8.3x and 8.4x, respectively. Following the
expected application of proceeds from the sale of the Company's Global Pet
Business, total debt to Adjusted EBITDA (as calculated for purposes of senior
covenant compliance), net of cash, for the Company as of 3/30/08 decreases from
8.4x (5.0x for senior secured debt and 3.4x for other debt) to 7.9x (4.2x for
senior debt and 3.7x for other debt).
Non-GAAP Financial
Measures
Within
this Supplemental Regulation FD Disclosure, reference is made to Adjusted
EBITDA. Adjusted EBITDA is a metric used by the Company’s 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 EBIDTA as calculated for purposes of senior
covenant compliance is one of the measures used for determining the Company’s debt covenant
compliance. Adjusted EBITDA can also be a useful measure of a company’s
ability to service debt. Adjusted EBITDA excludes certain items that
are unusual in nature or not comparable from period to period. While
the Company’s management believes that adjusted EBITDA is 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.
Reconciliation of GAAP to
Adjusted EBITDA
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SPECTRUM
BRANDS, INC.
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|
Adjusted
EBITDA Reconciliation
|
|
for
the three months ended July 2, 2006
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(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
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Income
(loss) from continuing operations, net of tax
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$ | 14.2 | $ | 33.3 | $ | (46.2 | ) | $ | 1.3 | |||||||
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Income
tax expense (benefit) - continuing operations
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- | - | 0.9 | 0.9 | ||||||||||||
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Interest
expense
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- | - | 45.3 | 45.3 | ||||||||||||
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Restructuring
and Related charges
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3.1 | 11.1 | - | 14.2 | ||||||||||||
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Depreciation
and Amortization
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5.4 | 17.1 | - | 22.5 | ||||||||||||
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Brazilian IPI
Credit
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- | (1.7 | ) | - | (1.7 | ) | ||||||||||
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Adjusted
EBITDA
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$ | 22.8 | $ | 59.7 | $ | - | $ | 82.5 | ||||||||
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Adjustments
(b)
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- | - | 1.9 | 1.9 | ||||||||||||
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Adjusted
EBITDA for senior leverage compliance
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$ | 22.8 | $ | 59.7 | $ | 1.9 | $ | 84.4 | ||||||||
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Note: Amounts
calculated prior to rounding
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||||||||||||||||
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(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
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(b)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
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||||||||||||||||
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SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the three months ended September 30, 2006
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
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Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
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Loss
from continuing operations, net of tax
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$ | (256.4 | ) | $ | (168.7 | ) | $ | (14.1 | ) | $ | (439.2 | ) | ||||
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Income
tax expense (benefit) - continuing operations
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- | - | (32.9 | ) | (32.9 | ) | ||||||||||
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Interest
expense
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- | - | 47.0 | 47.0 | ||||||||||||
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Restructuring
and Related charges
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3.6 | 25.2 | - | 28.8 | ||||||||||||
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Depreciation
and Amortization
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5.5 | 15.6 | - | 21.1 | ||||||||||||
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Goodwill and
intangibles impairment
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270.8 | 162.2 | - | 433.0 | ||||||||||||
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Brazilian IPI
Credit
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- | (1.7 | ) | - | (1.7 | ) | ||||||||||
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Adjusted
EBITDA
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$ | 23.5 | $ | 32.6 | $ | - | $ | 56.1 | ||||||||
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Adjustments
(b)
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- | - | 3.6 | 3.6 | ||||||||||||
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Adjusted
EBITDA for senior leverage compliance
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$ | 23.5 | $ | 32.6 | $ | 3.6 | $ | 59.7 | ||||||||
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Note: Amounts
calculated prior to rounding
|
||||||||||||||||
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(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the twelve months ended September 30, 2006
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
|
Loss
from continuing operations, net of tax
|
$ | (207.4 | ) | $ | (73.0 | ) | $ | (148.6 | ) | $ | (429.1 | ) | ||||
|
Income
tax expense (benefit) - continuing operations
|
- | - | (27.2 | ) | (27.2 | ) | ||||||||||
|
Interest
expense
|
- | - | 175.9 | 175.9 | ||||||||||||
|
Restructuring
and Related charges
|
8.6 | 47.5 | - | 56.1 | ||||||||||||
|
Depreciation
and Amortization
|
21.7 | 61.6 | - | 83.3 | ||||||||||||
|
Goodwill and
intangibles impairment
|
270.8 | 162.2 | - | 433.0 | ||||||||||||
|
Gain on
Asset Sales
|
- | (8.0 | ) | - | (8.0 | ) | ||||||||||
|
Brazilian IPI
Credit
|
- | (3.7 | ) | - | (3.7 | ) | ||||||||||
|
Restricted
Stock Amortization/Restructuring (b)
|
- | 0.6 | - | 0.6 | ||||||||||||
|
Inventory
Valuation Adjustment
|
0.2 | - | - | 0.2 | ||||||||||||
|
Prior
Year Lease adjustment
|
- | 1.6 | - | 1.6 | ||||||||||||
|
Adjusted
EBITDA
|
$ | 93.9 | $ | 188.8 | $ | - | $ | 282.7 | ||||||||
|
Adjustments
(c)
|
- | - | 3.7 | 3.7 | ||||||||||||
|
Adjusted
EBITDA for senior leverage compliance
|
$ | 93.9 | $ | 188.8 | $ | 3.7 | $ | 286.4 | ||||||||
|
Note: Amounts
calculated prior to rounding
|
||||||||||||||||
|
(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
adjustment reflects restricted stock amortization which is associated with
and included in restructuring and related charges. The adjustment
negates the impact of reflecting this expense
twice.
|
||||||||||||||||
|
(c)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the three months ended December 31, 2006
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
|
Income
(loss) from continuing operations, net of tax
|
$ | 13.4 | $ | 4.7 | $ | (35.7 | ) | $ | (17.6 | ) | ||||||
|
Income
tax expense (benefit) - continuing operations
|
- | - | (11.2 | ) | (11.2 | ) | ||||||||||
|
Interest
expense
|
- | - | 46.9 | 46.9 | ||||||||||||
|
Restructuring
and Related charges
|
4.5 | 5.0 | - | 9.5 | ||||||||||||
|
Depreciation
and Amortization
|
5.5 | 12.1 | - | 17.6 | ||||||||||||
|
Restricted
Stock Amortization/Restructuring (b)
|
- | 0.1 | - | 0.1 | ||||||||||||
|
Brazilian IPI
Credit
|
- | (2.3 | ) | - | (2.3 | ) | ||||||||||
|
Adjusted
EBITDA
|
$ | 23.4 | $ | 19.6 | $ | - | $ | 43.0 | ||||||||
|
Adjustments
(c)
|
- | - | 1.9 | 1.9 | ||||||||||||
|
Adjusted
EBITDA for senior leverage compliance
|
$ | 23.4 | $ | 19.6 | $ | 1.9 | $ | 44.9 | ||||||||
|
Note: Amounts
calculated prior to rounding
|
||||||||||||||||
|
(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
adjustment reflects restricted stock amortization which is associated with
and included in restructuring and related charges. The adjustment
negates the impact of reflecting this expense
twice.
|
||||||||||||||||
|
(c)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the three months ended April 1, 2007
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
|
Income
(loss) from continuing operations, net of tax
|
$ | 9.8 | $ | (208.5 | ) | $ | (39.3 | ) | $ | (238.1 | ) | |||||
|
Income
tax expense (benefit) - continuing operations
|
- | - | (45.9 | ) | (45.9 | ) | ||||||||||
|
Interest
expense
|
- | - | 85.2 | 85.2 | ||||||||||||
|
Restructuring
and Related charges
|
6.5 | 11.4 | - | 17.9 | ||||||||||||
|
Depreciation
and Amortization
|
5.4 | 13.4 | - | 18.8 | ||||||||||||
|
Goodwill
impairment
|
- | 214.0 | - | 214.0 | ||||||||||||
|
Transaction
costs - Home & Garden Business
|
- | 3.9 | - | 3.9 | ||||||||||||
|
Brazilian IPI
Credit
|
- | (1.9 | ) | - | (1.9 | ) | ||||||||||
|
Adjusted
EBITDA
|
$ | 21.7 | $ | 32.3 | $ | - | $ | 54.0 | ||||||||
|
Adjustments
(b)
|
- | - | 1.2 | 1.2 | ||||||||||||
|
Adjusted
EBITDA for senior leverage compliance
|
$ | 21.7 | $ | 32.3 | $ | 1.2 | $ | 55.2 | ||||||||
|
Note: Amounts
calculated prior to rounding
|
||||||||||||||||
|
(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the three months ended July 1, 2007
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
|
Income
(loss) from continuing operations, net of tax
|
$ | 8.7 | $ | 35.7 | $ | (52.5 | ) | $ | (8.2 | ) | ||||||
|
Income
tax expense (benefit) - continuing operations
|
- | - | (6.9 | ) | (6.9 | ) | ||||||||||
|
Interest
expense
|
- | - | 59.4 | 59.4 | ||||||||||||
|
Restructuring
and Related charges
|
5.7 | 25.2 | - | 30.9 | ||||||||||||
|
Depreciation
and Amortization
|
5.7 | 18.6 | - | 24.3 | ||||||||||||
|
Restricted
Stock Amortization/Restructuring (b)
|
- | (9.8 | ) | - | (9.8 | ) | ||||||||||
|
Brazilian IPI
Credit
|
- | (2.1 | ) | - | (2.1 | ) | ||||||||||
|
Adjusted
EBITDA
|
$ | 20.1 | $ | 67.6 | $ | - | $ | 87.7 | ||||||||
|
Adjustments
(c)
|
- | - | 1.5 | 1.5 | ||||||||||||
|
Adjusted
EBITDA for senior leverage compliance
|
$ | 20.1 | $ | 67.6 | $ | 1.5 | $ | 89.2 | ||||||||
|
Note: Amounts
calculated prior to rounding
|
||||||||||||||||
|
(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
adjustment reflects restricted stock amortization which is associated with
and included in restructuring and related charges. The adjustment
negates the impact of reflecting this expense
twice.
|
||||||||||||||||
|
(c)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the three months ended September 30, 2007
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
|
Income
(loss) from continuing operations, net of tax
|
$ | 14.8 | $ | (123.7 | ) | $ | (184.0 | ) | $ | (292.9 | ) | |||||
|
Income
tax expense (benefit) - continuing operations
|
- | - | 119.7 | 119.7 | ||||||||||||
|
Interest
expense
|
- | - | 64.3 | 64.3 | ||||||||||||
|
Goodwill and
intangibles impairment
|
1.0 | 147.4 | - | 148.4 | ||||||||||||
|
Restructuring
and Related charges
|
5.8 | 33.9 | - | 39.7 | ||||||||||||
|
Depreciation
and Amortization
|
5.7 | 11.0 | - | 16.7 | ||||||||||||
|
Restricted
Stock Amortization/Restructuring (b)
|
- | (0.2 | ) | - | (0.2 | ) | ||||||||||
|
Brazilian IPI
Credit
|
- | (2.4 | ) | - | (2.4 | ) | ||||||||||
|
Adjusted
EBITDA
|
$ | 27.3 | $ | 66.0 | $ | - | $ | 93.3 | ||||||||
|
Adjustments
(c)
|
- | - | 2.3 | 2.3 | ||||||||||||
|
Adjusted
EBITDA for senior leverage compliance
|
$ | 27.3 | $ | 66.0 | $ | 2.3 | $ | 95.6 | ||||||||
|
Note: Amounts
calculated prior to rounding
|
||||||||||||||||
|
(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
adjustment reflects restricted stock amortization which is associated with
and included in restructuring and related charges. The adjustment
negates the impact of reflecting this expense
twice.
|
||||||||||||||||
|
(c)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the twelve months ended September 30, 2007
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
|
Income
(loss) from continuing operations, net of tax
|
$ | 46.8 | $ | (291.9 | ) | $ | (311.5 | ) | $ | (556.7 | ) | |||||
|
Income
tax expense (benefit) - continuing operations
|
- | - | 55.7 | 55.7 | ||||||||||||
|
Interest
expense
|
- | - | 255.8 | 255.8 | ||||||||||||
|
Restructuring
and Related charges
|
22.4 | 75.6 | - | 98.0 | ||||||||||||
|
Depreciation
and Amortization
|
22.3 | 55.1 | - | 77.4 | ||||||||||||
|
Restricted
Stock Amortization/Restructuring (b)
|
- | (9.9 | ) | - | (9.9 | ) | ||||||||||
|
Goodwill and
intanbibles impairment
|
1.0 | 361.4 | - | 362.4 | ||||||||||||
|
Transaction
costs - Home & Garden Business
|
- | 3.9 | - | 3.9 | ||||||||||||
|
Brazilian IPI
Credit
|
- | (8.7 | ) | - | (8.7 | ) | ||||||||||
|
Adjusted
EBITDA
|
$ | 92.5 | $ | 185.5 | $ | - | $ | 278.0 | ||||||||
|
Adjustments
(c)
|
- | - | 6.9 | 6.9 | ||||||||||||
|
Adjusted
EBITDA for senior leverage compliance
|
$ | 92.5 | $ | 185.5 | $ | 6.9 | $ | 284.9 | ||||||||
|
Note: Amounts
calculated prior to rounding
|
||||||||||||||||
|
(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
adjustment reflects restricted stock amortization which is associated with
and included in restructuring and related charges. The adjustment
negates the impact of reflecting this expense
twice.
|
||||||||||||||||
|
(c)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the three months ended December 30, 2007
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
|
Income
(loss) from continuing operations, net of tax
|
$ | 16.3 | $ | 15.2 | $ | (73.6 | ) | $ | (42.1 | ) | ||||||
|
Income
tax expense (benefit) - continuing operations
|
- | - | 16.5 | 16.5 | ||||||||||||
|
Interest
expense
|
- | - | 57.1 | 57.1 | ||||||||||||
|
Restructuring
and Related charges
|
0.3 | 4.7 | - | 5.0 | ||||||||||||
|
Depreciation
and Amortization
|
5.5 | 10.7 | - | 16.2 | ||||||||||||
|
Brazilian IPI
Credit
|
- | (3.6 | ) | - | (3.6 | ) | ||||||||||
|
Adjusted
EBITDA
|
$ | 22.1 | $ | 27.0 | $ | - | $ | 49.1 | ||||||||
|
Adjustments
(b)
|
- | - | 3.7 | 3.7 | ||||||||||||
|
Adjusted
EBITDA for senior leverage compliance
|
$ | 22.1 | $ | 27.0 | $ | 3.7 | $ | 52.8 | ||||||||
|
Note: Amounts
calculated prior to rounding
|
||||||||||||||||
|
(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Adjusted
EBITDA Reconciliation
|
|
for
the three months ended March 30, 2008
|
|
(Unaudited)
|
|
($
millions)
|
|
Global
Pet Supplies
|
Global
Batteries & Personal Care, Home & Garden Business and
Corporate
|
Unallocated
Items (a)
|
Consolidated
Spectrum Brands, Inc.
|
|||||||||||||
|
Income
(loss) from continuing operations, net of tax
|
$ | 14.4 | $ | (1.9 | ) | $ | (124.4 | ) | $ | (111.8 | ) | |||||
|
Income
tax expense (benefit) - continuing operations
|
- | - | 66.3 | 66.3 | ||||||||||||
|
Interest
expense
|
- | - | 58.3 | 58.3 | ||||||||||||
|
Goodwill and
intangibles impairment
|
- | 13.2 | - | 13.2 | ||||||||||||
|
Restructuring
and Related charges
|
0.8 | 4.6 | - | 5.4 | ||||||||||||
|
Depreciation
and Amortization
|
5.6 | 29.9 | - | 35.5 | ||||||||||||
|
Restricted
Stock Amortization/Restructuring (b)
|
- | - | (0.2 | ) | (0.2 | ) | ||||||||||
|
Brazilian IPI
Credit
|
- | (1.9 | ) | - | (1.9 | ) | ||||||||||
|
Transaction
costs - Home & Garden Business
|
- | 1.5 | - | 1.5 | ||||||||||||
|
Adjusted
EBITDA
|
$ | 20.8 | $ | 45.4 | $ | - | $ | 66.2 | ||||||||
|
Adjustments
(c)
|
- | - | 2.0 | 2.0 | ||||||||||||
|
Adjusted
EBITDA for senior leverage compliance
|
$ | 20.8 | $ | 45.4 | $ | 2.0 | $ | 68.2 | ||||||||
|
Note: Amounts
calculated prior to rounding
|
||||||||||||||||
|
(a)
It is the Company's policy to record Income tax expense (benefit), and
interest expense on a consolidated basis. Accordingly, such amounts are
not reflected in the operating results of the operating
segments.
|
||||||||||||||||
|
(b)
adjustment reflects restricted stock amortization which is associated with
and included in restructuring and related charges. The adjustment
negates the impact of reflecting this expense
twice.
|
||||||||||||||||
|
(c)
Reflects contractual adjustments per the Company's senior credit agreement
to adjust EBITDA for senior leverage ratio
calculation.
|
||||||||||||||||
|
(d) the
reconciliation of last twelve months (LTM) adjusted EBITDA for the Global
Pet Supplies operating segment as of the end of the 2nd quarter of Fiscal
2008 is as follows:
|
||||||||||||||||
|
Adjusted EBITDA
3rd Quarter of Fiscal 2007
|
$ | 20.1 | ||||||||||||||
|
Adjusted EBITDA
4th Quarter of Fiscal 2007
|
27.3 | |||||||||||||||
|
Adjusted EBITDA
1st Quarter of Fiscal 2008
|
22.1 | |||||||||||||||
|
Adjusted EBITDA
2nd Quarter of Fiscal 2008
|
20.8 | |||||||||||||||
|
LTM
Adjusted EBITDA as of the end of the 2nd quarter of Fiscal
2008
|
$ | 90.3 | ||||||||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Net
Sales by Product Line
|
|
for
the twelve months ended September 30, 2007
|
|
(Unaudited)
|
|
($
millions)
|
|
NA
|
EURROW
|
LA
|
GBPC
|
|||||||||||||
|
Consumer
batteries
|
275.3 | 382.5 | 223.5 | 881.3 | ||||||||||||
|
Electric
shaving and grooming
|
168.5 | 92.6 | 6.9 | 268.0 | ||||||||||||
|
Electric
personal care
|
58.2 | 111.8 | 17.1 | 187.1 | ||||||||||||
|
Portable
lighting
|
51.8 | 20.4 | 22.9 | 95.1 | ||||||||||||
|
Net
Sales
|
$ | 553.8 | $ | 607.3 | $ | 270.4 | $ | 1,431.5 | ||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Net
Sales by Product Line
|
|
for
the twelve months ended September 30, 2006
|
|
(Unaudited)
|
|
($
millions)
|
|
NA
|
EURROW
|
LA
|
GBPC
|
|||||||||||||
|
Consumer
batteries
|
283.3 | 378.4 | 199.2 | 860.9 | ||||||||||||
|
Electric
shaving and grooming
|
171.2 | 76.2 | 4.5 | 251.9 | ||||||||||||
|
Electric
personal care
|
51.3 | 86.7 | 12.5 | 150.5 | ||||||||||||
|
Portable
lighting
|
49.9 | 18.5 | 19.8 | 88.2 | ||||||||||||
|
Net
Sales
|
$ | 555.7 | $ | 559.8 | $ | 236.0 | $ | 1,351.5 | ||||||||
|
SPECTRUM
BRANDS, INC.
|
|
Net
Sales by Product Line
|
|
for
the twelve months ended September 30, 2005
|
|
(Unaudited)
|
|
($
millions)
|
|
NA
|
EURROW
|
LA
|
GBPC
|
|||||||||||||
|
Consumer
batteries
|
314.2 | 467.4 | 186.7 | 968.3 | ||||||||||||
|
Electric
shaving and grooming
|
199.6 | 72.8 | 0.9 | 273.3 | ||||||||||||
|
Electric
personal care
|
44.2 | 94.5 | 2.4 | 141.1 | ||||||||||||
|
Portable
lighting
|
52.8 | 22.9 | 18.1 | 93.8 | ||||||||||||
|
Net
Sales
|
$ | 610.8 | $ | 657.6 | $ | 208.1 | $ | 1,476.5 | ||||||||