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Press Release: Spectrum Brands Holdings Reports Fiscal 2021 First Quarter Results

· 02/05/2021 06:30
Home & Garden (H&G) Three Month Periods Ended ------------------------- (in millions, January 3, December 29, except %) 2021 2019 Variance -------------- ----------- ------------ -------------------- Net Sales $82.3 $ 45.9 $36.4 79.3% Operating Income (Loss) (0.5) (8.6) 8.1 94.2% Operating Income (Loss) Margin (0.6)% (18.7)% 1,810 bps Adjusted EBITDA $10.4 $(3.3) $13.7 n/m Adjusted EBITDA Margin 12.6% (7.2)% 1,980 bps n/m = not meaningfulGlobal Pet Care (GPC) Three Month Periods Ended ------------------------- (in millions, January 3, December 29, except %) 2021 2019 Variance -------------- ----------- ------------ -------------------- Net Sales $275.5 $205.8 $69.7 33.9% Operating Income (Loss) 34.1 (52.9) 87.0 n/m Operating Income (Loss) Margin 12.4% (25.7)% 3,810 bps Adjusted EBITDA $ 53.6 $ 31.5 $22.1 70.2% Adjusted EBITDA Margin 19.5% 15.3% 420 bps n/m = not meaningfulHome & Personal Care (HPC) Three Month Periods Ended ------------------------- (in millions, January 3, December 29, except %) 2021 2019 Variance -------------- ----------- ------------ -------------------- Net Sales $378.5 $322.1 $56.4 17.5% Operating Income 36.7 23.7 13.0 54.9% Operating Income Margin 9.7% 7.4% 230 bps Adjusted EBITDA $ 50.9 $ 36.4 $14.5 39.8% Adjusted EBITDA Margin 13.4% 11.3% 210 bpsFiscal 2021 First Quarter Highlights Three Month Periods Ended -------------------------------- (in millions, except per January 3, share and %) 2021 December 29, 2019 Variance -------------- ------------- ----------------- ----------------- Net sales $ 1,145.0 $ 871.5 $273.5 31.4% Gross profit 422.3 269.1 153.2 56.9% Operating income (loss) 123.5 (45.9) 169.4 n/m Net income (loss) from continuing operations 73.2 (37.7) 110.9 n/m Diluted earnings (loss) per share from continuing operations $ 1.68 $ (0.81) $ 2.49 n/m Non-GAAP Operating Metrics Adjusted EBITDA from continuing operations $ 204.1 $ 102.2 $101.9 99.7% Adjusted EPS from continuing operations $ 2.13 $ 0.20 $ 1.93 965.0% n/m = not meaningful -- Net sales increased 31.4%. Excluding the impact of $11.3 million of favorable foreign exchange rates and acquisition sales of $20.3 million, organic net sales increased 27.8%, with growth across all four business units and the benefit of six extra selling days compared to the prior year. -- Gross profit margin increased 600 basis points, driven by higher volumes in all business units, improved productivity from our Global Productivity Improvement Program (GPIP), favorable mix, as well as lower restructuring costs and depreciation expense compared to the prior year. -- Operating income growth was driven by improved volumes and profit margins and lower restructuring spending coupled with impairments from the divestiture of the previously underutilized facility in Coevorden in the prior year, despite higher marketing and advertising investments. -- Net income and diluted earnings per share increases were primarily driven by the operating income growth. -- Adjusted EBITDA increased 99.7% and adjusted EBITDA margins increased 610 basis points. Adjusted EBITDA and margins grew across all business units. -- Adjusted diluted EPS improved to $2.13 due to favorable volumes, improved productivity and positive product mix. -- During the quarter, the Company repurchased 0.6 million shares for $42.3 million. -- The Company sold 1.4 million shares of Energizer common stock for proceeds of $60.5 million and ended the quarter with approximately 0.3 million shares. The remaining Energizer shares were sold in January. Fiscal 2021 First Quarter Segment Level Data Hardware & Home Improvement (HHI) Three Month Periods Ended ------------------------- (in millions, January 3, December 29, except %) 2021 2019 Variance -------------- ----------- ------------ ---------------------- Net Sales $408.7 $297.7 $111.0 37.3% Operating Income 92.2 34.5 57.7 167.2% Operating Income Margin 22.6% 11.6% 1,100 bps Adjusted EBITDA $ 98.2 $ 42.8 $ 55.4 129.4% Adjusted EBITDA Margin 24.0% 14.4% 960 bps-- First Quarter Results Reflected Exceptional Sales Growth and Strong Operating Leverage -- Net Sales Increased 31.4% and Organic Net Sales Increased 27.8%, with Growth Across All Business Units -- GAAP Net Income From Continuing Operations Increased $110.9 Million to $73.2 Million -- Adjusted EBITDA Increased $101.9 Million or 99.7% to $204.1 Million -- Maintained Strong Financial Flexibility with Over $800 million of Total Liquidity -- Raising 2021 Earnings Framework to Reflect Expected Net Sales and Adjusted EBITDA Growth of High Single-Digits MIDDLETON, Wis.--(BUSINESS WIRE)--February 05, 2021--

Spectrum Brands Holdings Reports Fiscal 2021 First Quarter Results

Spectrum Brands Holdings, Inc. (NYSE: SPB; "Spectrum Brands" or the "Company"), a leading global branded consumer products and home essentials company focused on driving innovation and providing exceptional customer service, today reported results from continuing operations for the first quarter of fiscal 2021 ended January 3, 2021.

"Our financial results for Q1 reflected another quarter of exceptional top line growth and operating leverage, with net income from continuing operations up $111 million and adjusted EBITDA doubling to $204 million. This growth was a combination of delivering on strong demand for our products as a home essentials company and restocking of retailer inventory levels. More importantly, our Q1 performance reflected yet another quarter of operational excellence, as we prioritize consistent delivery of results for our long term stakeholders. Additionally during the quarter, we repurchased $42.3 million of Spectrum shares, and by the end of January, sold our remaining Energizer shares, which further strengthens our balance sheet and adds to our liquidity position," said David Maura, Chairman and Chief Executive Officer of Spectrum Brands.

"Our Q1 sales growth of 31% reflected growth across all business units, with another quarter of strong POS and improved supply chain performance. As discussed on our prior Earnings call, overall our businesses continued to benefit from supply chain recovery, particularly in our Hardware and Home Improvement business which was a big contributor to this quarter's results with sales up 37% or $111 million. We achieved double-digit sales growth across all business units, and e-commerce sales growth of over 54%. Demand for our products based on retailer orders, improved brand awareness from our advertising and promotional investments and macro data gives us confidence in raising our net sales outlook for the year to high single-digit growth," said Mr. Maura.

Net sales were driven by growth across all categories during the quarter. Security sales growth continued to be aided by fulfilling previously disclosed open orders. Growth across all categories was also driven by strong consumer demand and commercial activity. Organic net sales increased 36.8% excluding slightly favorable foreign exchange impacts.

Higher operating income, adjusted EBITDA and margins were primarily driven by positive volumes, productivity improvements and favorable mix, partially offset by COVID-19 related costs and higher marketing investments.

Net sales were driven by strong growth in both the small kitchen appliances and the personal care categories during the holiday season. The growth was broad based, coming from all regions, with particular strength in the Americas. E-commerce sales, both in pure play and retailer.com channels continued to grow at a high rate. Excluding favorable foreign exchange impacts of $5.6 million, organic net sales grew 15.8%.

Improved operating income, adjusted EBITDA, and margins were driven by higher volumes, productivity improvements, favorable pricing programs and mix favorability, partially offset by continued marketing investments.

Higher net sales were attributable to continued growth in our aquatics and companion animal categories, led by continued growth in e-commerce sales. Companion animal and aquatics demand was broad-based across sub-categories and channel partners. Excluding favorable foreign exchange impacts of $4.3 million and acquisition sales of $20.3 million, organic net sales grew 21.9%.

Higher operating income, adjusted EBITDA, and improved margins were driven by volume growth and productivity improvements, partially offset by higher advertisement and marketing investments. Operating income growth was also impacted by impairment charges from the Coevorden divestiture in the prior year, lower restructuring costs and depreciation expenses compared to the prior year, offset by acquisition costs this year from the addition of Armitage.

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February 05, 2021 06:30 ET (11:30 GMT)