Spectrum Brands(US:SPB)2019-02-07 21:15Financial Performance - Revenue for the three-month period ended December 30, 2018, was $874.6 million, a decrease of 4.8% compared to $919.6 million for the same period in 2017[17]. - Gross profit for the same period was $305.3 million, down from $318.4 million, reflecting a gross margin of approximately 34.9%[17]. - Net loss for the three-month period was $112.3 million, compared to a net income of $578.8 million in the prior year[17]. - Basic earnings per share from continuing operations was $(0.56), a significant decline from $1.24 in the same period last year[17]. - Comprehensive loss for the period was $123.3 million, compared to comprehensive income of $144.9 million in the prior year[19]. - The company reported a net cash position of $209.5 million at the end of the period, down from $153.2 million a year earlier[35]. - The company reported a net loss attributable to controlling interest for the three-month period ended December 30, 2018, was $103.2 million, compared to a net income of $166.5 million in the same period of 2017[154]. - Adjusted EBITDA for the three-month period ended December 30, 2018, was $115.3 million, compared to $132.7 million for the same period in 2017, reflecting a decline of 13.1%[171]. Assets and Liabilities - Total current assets decreased to $3,804.3 million from $3,974.3 million as of September 30, 2018[15]. - Total liabilities decreased to $6,145.6 million from $6,210.8 million as of September 30, 2018[15]. - Total assets decreased from $7,640.1 million as of September 30, 2018, to $7,385.5 million as of December 30, 2018[26]. - Current liabilities increased from $1,933.2 million to $3,002.7 million during the same period, primarily due to an increase in the current portion of long-term debt[26]. - The company's accumulated deficit grew from $235.5 million to $402.1 million between September 30, 2018, and December 30, 2018[26]. - Cash and cash equivalents decreased from $505.4 million to $200.6 million over the same period[26]. - The company reported total shareholder's equity decreased from $1,601.8 million to $1,438.2 million as of December 30, 2018[26]. - The company recognized a significant write-down of $107.2 million on net assets held for sale associated with the GAC divestiture during the three-month period ended December 30, 2018[75]. Cash Flow and Financing - The company experienced a net cash used by operating activities of $311.9 million in Q4 2018, significantly higher than the $60.8 million used in Q4 2017[24]. - Cash flows from operating activities resulted in a net cash outflow of $329.4 million, compared to an inflow of $183.1 million in the previous year[35]. - Proceeds from the issuance of debt amounted to $124.3 million during the three-month period ended December 30, 2018, while payments of debt totaled $(45.6) million, resulting in a net cash provided by financing activities of $46.0 million[155]. - The Company recognized a loss on extinguishment of debt of $9.0 million related to the repayment of its USD Term Loan on January 4, 2019[108]. Divestitures and Acquisitions - The company completed the sale of its Global Batteries and Lighting division and Global Auto Care division to Energizer in January 2019, classifying these operations as discontinued[37]. - The GBL divestiture closed on January 2, 2019, with an aggregate purchase price of $2.0 billion in cash[60]. - The GAC Acquisition Agreement with Energizer involves a total purchase price of $1.25 billion, including $937.5 million in cash and stock consideration valued at approximately $312.5 million[68]. - The company completed the sale of its Global Batteries & Lights business to Energizer for an aggregate purchase price of $2.0 billion in cash, which was finalized on January 2, 2019[160]. - The Global Auto Care business was also sold to Energizer for $1.25 billion in cash and stock consideration, completed on January 28, 2019[160]. Operational Efficiency and Restructuring - The company has undertaken various restructuring initiatives aimed at improving operational efficiency and reducing costs, which may affect financial results[163]. - Project Ignite, a multi-year restructuring initiative, incurred cumulative costs of $13.6 million as of December 30, 2018, with an additional $2.1 million forecasted for the foreseeable future[89]. - The HHI distribution center consolidation initiative incurred total cumulative costs of $83.0 million, completed as of December 30, 2018[90]. - Total restructuring and related charges for the three months ended December 30, 2018, were $9.1 million, compared to $17.1 million for the same period in 2017[91]. Segment Performance - The HHI segment reported net sales of $305.1 million, down from $325.9 million in the prior year, while the HPC segment saw sales decline to $317.2 million from $342.0 million[140]. - Total Segment Adjusted EBITDA for SBH decreased to $122.8 million for the three months ended December 30, 2018, down from $141.2 million for the same period in 2017, representing a decline of approximately 13.5%[142]. - The HHI segment reported an Adjusted EBITDA of $55.6 million, down from $60.0 million year-over-year, a decrease of about 7.3%[145]. - The HPC segment's Adjusted EBITDA fell to $35.0 million from $41.7 million, reflecting a decline of approximately 16.1%[145]. Tax and Regulatory Changes - The Tax Reform Act reduced the U.S. corporate income tax rate from 35% to 21%, impacting the company's tax rate to approximately 24.5% for the fiscal year ended September 30, 2018[166]. - The effective tax rate for SBH for the three-month period ended December 30, 2018, was 10.3%, significantly improved from (644.0%) in the same period of 2017[127]. Shareholder Returns - The company declared dividends per share of $0.42, maintaining a return to shareholders despite the net loss[17]. - The company repurchased 158,318 shares of common stock for $8.0 million at an average price of $56.02 per share during the three-month period ended December 30, 2018[134].