Spectrum Brands Posts $13.1 Million Net Income in Q1
MADISON, Wis.-Thanks to strong controls on expenses, Spectrum Brands posted net income of $13.1 million in its fiscal first quarter.
The bottom-line performance in the quarter, which ended on Jan. 1, reversed a net loss of $19.8 million in last year's first quarter. The key to the improved bottom line lay in Spectrum's ability to reduce expenses. Selling, general and administrative expenses fell 10.2 percent in dollars and 185 basis points as a percentage of sales, to 21.5 percent. The company also cut interest expense by 23 percent.
These factors offset a 1.4 percent decline in net sales, to $848.8 million, and a 132 basis-point drop in gross margin, to 33.4 percent. Sales in personal-care products, including Spectrum's Remington brand, were off 0.9 percent. Sales in small electrics, the Russell Hobbs segment, were flat compared to last year's first quarter. However, net income for Global Batteries & Appliances segment, which includes these products, rose 5.2 percent.
Looking ahead, Spectrum said it expects net sales in this fiscal year to increase at or above the rate of gross domestic product. Dave Lumley, CEO, said, "Spectrum Brands is truly on the move," and that sales should accelerate in the second half of this year "based on distribution gains we have already secured."