Q3 Profit Falls For Spectrum Brands' Global Batteries and Appliances
MADISON, Wis.-Third-quarter segment profit for Spectrum Brands' Global Batteries & Appliances unit dropped 4.7 percent, to $44.9 million, with sales declining for the unit's small appliances and personal-care products.
Net sales for the segment totaled $491.6 million, down 1.8 percent, in the quarter which ended on June 30. This included a 2.6 percent falloff in sales of small electrics, which came about from the continued elimination of low-margin promotions. Sales of personal-care items, which include the Remington-branded electric grooming products, were essentially flat in the quarter, with significantly increased revenues in Europe but reduced net sales in North America and Latin America, which Spectrum attributed to a reduction in shelf space for shaving and grooming products at an unnamed major retailer.
Spectrum Brands as a whole posted net income of $36.1 million, down 38.5 percent from the third quarter of last year. Net sales jumped 32.1 percent to $1.1 billion. Spectrum attributed both figures to its acquisition of HHI, the builder of residential hardware, locksets and faucets, which provided a boost to net income but was a key factor in the increase of 35.9 percent in operating expenses in the quarter.
Dave Lumley, Spectrum's CEO, noted that the quarter brought record net sales and adjusted earnings before interest, taxes, depreciation and amortization. Lumley said Spectrum is making "major investments" in its Remington products, global e-commerce, battery performance and production, and new HHI products development and marketing.
Spectrum is projecting higher net sales and adjusted EBITDA for its fiscal fourth quarter and fiscal 2013 as a whole, according to Lumley. Increased store traffic, an expected strong back-to-school season, new product launches across all divisions, gains in distribution, new retailer business, continuing geographic expansion and further cost reductions will drive Spectrum's results, he said.