Spectrum Brands (SPB) Tops Q3 EPS by 43c, Revenues Beat

Spectrum Brands (NYSE: SPB) reported Q3 EPS of $1.36, $0.43 better than the analyst estimate of $0.93. Revenue for the quarter came in at $984.3 million versus the consensus estimate of $946.13 million.

• Delivers Strong Third Quarter Results in Light of COVID-19 Challenges Thanks to Team Resiliency, Strong Culture and Operational Excellence
• Net Sales Decreased 3.7% and Organic Net Sales Decreased 2.9%
• GAAP Operating Income Increased 1.9%, Driven by Lower Restructuring Costs
• Adjusted EBITDA Decreased 4.9%, Driven by Temporary COVID-19 Related Supply Disruptions from Hardware & Home Improvement Despite Growth from All Other Segments
• Maintained Strong Financial Flexibility with Over $800 million of Total Liquidity

“Our results reflect strong demand that accelerated through the course of the quarter. Simply put, we have embraced our position as a home essentials company and instead of pulling back in the face of COVID-19 challenges, we are continuing our drive to add talent, create new innovative products and improve our operating model. In addition, in the last 60 days and ramping up in the current quarter, we have committed to significant increases in our advertising investments to meaningfully increase our long-term organic growth. The actions of our Spectrum Brands family reflect resilience and operational excellence in this ever-evolving environment. This included adopting safety protocols in this new COVID-19 environment, navigating temporary government mandated factory closures impacting Hardware and Home Improvement ("HHI"), and balancing strong underlying demand including large mix shifts. The temporary COVID-19 related supply disruptions from HHI negatively impacted results, but we believe the situation is largely resolved and supply is expected to be caught up by our fiscal first quarter,” said David Maura, Chairman and Chief Executive Officer of Spectrum Brands.

“Three of our four business units generated healthy sales growth rates and despite COVID-19 related challenges, our global team generated financial performance consistent with the prior year. Importantly, e-commerce continued to generate exceptional growth across all businesses, with sales up 44% compared to the prior year. Total demand remains strong with July net sales up across all business units.

"In addition to our operating accomplishments, on June 30th we completed a strategic refinancing of our balance sheet by entering into a new $600 million 5-year revolving credit facility. We also issued a new 10-year, $300 million senior unsecured bond, putting the Company in an improved, longer term capital structure with the next maturity coming in 2024.

"Our future is bright as a home essentials company and we believe we remain well-positioned financially and operationally to drive long-term, sustainable organic growth," said Mr. Maura.

For earnings history and earnings-related data on Spectrum Brands (SPB) click here.

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