Spectrum Brands Reports Third Quarter 2008 Financial Results

  
    
  
  
    
      Spectrum Brands, Inc. (the Company) (NYSE: SPC) announced today third 
      quarter net sales of $729.6 million and a net loss of $5.58 per share 
      for the quarter ended June 29, 2008. Excluding certain items which 
      management believes are not indicative of the Company’s 
      on-going normalized operations, the Company generated adjusted diluted 
      earnings per share of $0.06, a non-GAAP number. These excluded items, 
      net of tax, include:
    
    
      
        Goodwill and trade names impairment charges of $253.7 million, or 
        $4.76 per share, in accordance with SFAS 142 and SFAS 144, primarily 
        related to the Company’s Home & Garden and 
        Global Pet Supply businesses;
      
      
        Net tax adjustments of $19.1 million, or $0.36 per share, to exclude 
        the effect of certain adjustments made to the valuation allowance 
        against net deferred taxes and other tax related items;
      
      
        Restructuring and related charges of $14.3 million, or $0.27 per 
        share, primarily associated with the Company’s 
        strategy to exit Ningbo Baowang, a battery manufacturing facility in 
        China, and company-wide cost reduction initiatives;
      
      
        Professional fees of $2.9 million, or $0.05 per share, incurred in 
        connection with the proposed sale of the Company’s 
        Global Pet Supplies business;
      
      
        $0.25 per share as a result of using a diluted share count of 53.3 
        million average shares outstanding to calculate adjusted diluted 
        earnings per share versus using a basic share count of 50.9 million 
        average shares outstanding in order to calculate GAAP basic earnings 
        per share. GAAP requires the use of the basic share count in the event 
        of a net loss; and
      
      
        Other items netting to a benefit of $2.8 million, or $0.05 per share
      
    
    
      During the third quarter of fiscal 2007, the Company reported a net loss 
      per fully diluted share of $0.15. Excluding restructuring and related 
      charges of $0.36, an add back of $0.04 per share for depreciation and 
      amortization that would have been recorded if the Home & Garden Business 
      had been in continuing operations, and other non-cash adjustments 
      netting an add back of $0.05 per share, the third quarter 2007 adjusted 
      earnings per fully diluted share was $0.12.
    
    
      With strong top-line growth in all three business segments, the Company’s 
      third quarter net sales of $729.6 million represented a 10.5 percent 
      increase over the prior year, after excluding the Canadian division of 
      the Home & Garden Business, which the Company sold in November 2007. 
      Favorable foreign currency exchanges contributed $29.6 million.
    
    
      “I’m pleased with 
      our strong sales growth for the quarter, which I believe reflects the 
      strength of our new product offerings and marketing programs as well as 
      a consumer shift towards value brands during this tough economic time,” 
      said Kent Hussey, CEO of Spectrum Brands.
    
    
      The Company saw strong adjusted EBITDA growth, a non-GAAP measurement 
      which the Company believes is a useful indicator of the operating health 
      of the business and its trajectory, in both its Global Batteries & 
      Personal Care and its Global Pet Supplies segments. These results were 
      offset, however, by significant raw material input cost pressures in the 
      Company’s Home & Garden Business segment. 
      Consolidated adjusted EBITDA was $81.2 million as compared with $87.7 
      million in the third quarter of the prior year, a 7.4 percent decline 
      driven by the unprecedented cost increases in the Company’s 
      fertilizer operations within its Home & Garden Business segment.
    
    
      Gross profit and gross margin for the quarter were $261.4 million and 
      35.8 percent, respectively, versus $253.9 million and 38.5 percent for 
      the same period last year. Within cost of sales, the Company incurred 
      restructuring and related charges of approximately $13.9 million, 
      negatively impacting this quarter’s margin by 
      190 basis points, primarily related to the Company’s 
      strategy to exit the Ningbo battery manufacturing facility in China. 
      During the third quarter of fiscal 2007, cost of sales included $4.1 
      million of restructuring and related charges. The remainder of the 
      variance was primarily driven by extremely volatile commodity costs.
    
    
      The Company generated a third quarter operating loss from continuing 
      operations of $259.8 million versus operating income of $45.6 million in 
      the same period last year. The primary reasons for the decline were 
      $303.3 million in goodwill and trade names impairments.
    
    
      Third Quarter Segment Results
    
    
      The Global Batteries and Personal Care segment reported net sales of 
      $344.4 million compared with $307.0 million for the same period reported 
      last year, an increase of 12.2 percent. Favorable foreign exchange 
      benefited sales by $23.7 million with the remainder of the variance 
      resulting from gains in market share in batteries and strong growth in 
      sales of personal care products. Global battery sales, which benefited 
      from favorable foreign exchange, were up 12.4 percent compared with the 
      same period last year, primarily due to improved performance in North 
      America for both alkaline and specialty batteries. North American 
      battery sales were up 21.8 percent for the quarter from the same period 
      last year as the Company regained market share and returned to its 
      historical 11 percent share of dollars in the market. European battery 
      sales increased 10.4 percent from the same period last year benefiting 
      from favorable foreign exchange and sales increases in its branded 
      alkaline and specialty batteries. Latin American battery sales generated 
      year over year growth of 5.4 percent, benefiting from favorable foreign 
      exchange and sales increases in alkaline batteries. Global sales of 
      Remington branded products increased 16.3 percent during the quarter 
      from the same period last year with double digit sales growth in its 
      hair care products and single digit sales growth in shaving & grooming.
    
    
      The Global Batteries and Personal Care segment reported its 6th 
      straight quarter of adjusted EBITDA year-over-year improvement, coming 
      in at $37.9 million for the quarter. Segment profitability for this 
      segment was $33.2 million for the quarter, up an impressive 21.0 percent 
      over last year’s level. The profit 
      improvement was primarily due to the cost savings generated from the 
      2007 global realignment initiatives and cost savings generated from more 
      efficient operation of the Company’s 
      manufacturing facilities.
    
    
      Global Pet Supplies net sales were $148.6 million, a 10.1 percent 
      increase compared with the prior year. Companion animal product net 
      sales grew 13.0 percent, while global aquatics net sales increased 8.7 
      percent from the prior year. North American companion animal sales were 
      up 9.3 percent from the same period last year, offset by a decline of 
      2.3 percent in aquatics, which indicates a stabilization in the North 
      American aquatics market following the anniversary of the removal of 
      live fish from certain stores of a major retailer. Total pet sales in 
      Europe and the Pacific Rim were up 28.9 percent and 25.6 percent, 
      respectively, as a result of favorable currency, dynamic expansion in 
      Eastern Europe and the roll out of companion animal products outside of 
      North America as well as continuing strength in aquatics in Europe and 
      Asia.
    
    
      Adjusted EBITDA for the Global Pet Supplies segment was $22.4 million 
      for the quarter compared to $20.1 million last year, up 11.4 percent. 
      Segment profitability for Global Pet Supplies for the quarter was $16.8 
      million compared to $14.4 million last year, up 16.7 percent over last 
      year due to positive pricing impacts partially offset by a slightly 
      negative foreign exchange impact.
    
    
      Spectrum’s Home & Garden Business segment’s 
      net sales were $236.6 million, up 8.6 percent over last year, with 
      growth in both units and dollars. The largest contributors to this 
      growth were fertilizers and growing media, sales of which were up 16.7 
      percent from the same period last year. Additionally, the Company 
      reported low single digit increases in sales of repellants and 
      pesticides.
    
    
      With unprecedented commodity cost increases in the Home & Garden 
      Business segment, adjusted EBITDA fell 29.8 percent to $29.4 million for 
      the third quarter compared with $41.9 million last year. Similarly, also 
      because of the significant increase in the cost of raw materials, 
      segment profitability for the Home & Garden Business segment was $25.9 
      million for the quarter compared to $42.3 million last year. The Company 
      has already begun implementing significant changes in this segment, 
      including, among other initiatives, pricing actions and SKU reduction, 
      in order to restore profitability in 2009.
    
    
      Corporate expenses were $12.4 million for the quarter, which included 
      $4.5 million in professional fees associated with the terminated 
      business segment sale process, as compared with $7.6 million in 
      corporate expenses during the third quarter of last year.
    
    
      Interest expense was $57.1 million compared to $59.4 million in the same 
      period last year.
    
    
      The Company recorded a tax benefit during the quarter of $34.3 million 
      versus a tax benefit of $6.9 million in the same period last year. The 
      benefit in the quarter is mainly the result of the reversal of the 
      valuation allowance the Company had recorded against certain foreign tax 
      assets. In addition, similar to the first two quarters of 2008, the 
      Company recorded an expense in the quarter to increase its valuation 
      allowance against its U.S. federal net deferred tax assets to reserve 
      for the possibility that the net deferred tax assets will not be 
      realized. As a result, fiscal 2008 operating losses in the U.S. no 
      longer create U.S. tax benefits. This accounting treatment is not 
      expected to have any impact on the Company’s 
      ability to utilize net operating losses if and when the Company 
      recognizes future taxable income within the U.S. The result of not 
      recording a tax benefit in the U.S. combined with recording a tax 
      provision on taxable income generated by foreign subsidiaries results in 
      an effective tax rate significantly higher than that experienced in 
      prior years. This increased tax rate has no cash impact on the Company.
    
    
      Webcast Information
    
    
      Spectrum Brands will hold a conference call at 5:00 p.m. EDT on August 7 
      to further discuss its third quarter results. The call will be 
      accessible via webcast through the Company’s 
      website, www.spectrumbrands.com, 
      and will be archived online until August 21.
    
    
      Non-GAAP Measurements
    
    
      Within this release, including the tables attached hereto, reference is 
      made to adjusted diluted earnings per share and adjusted earnings before 
      interest, taxes, depreciation and amortization (EBITDA). See attached 
      Table 3, “Reconciliation of Diluted Earnings 
      Per Share to Adjusted Diluted Earnings Per Share,” 
      for a complete reconciliation of diluted earnings per share on a GAAP 
      basis to adjusted diluted earnings per share, and Table 4, “GAAP 
      Income (Loss) from Continuing Operations to Adjusted EBITDA,” 
      for a reconciliation of GAAP Income (Loss) from Continuing Operations to 
      adjusted EBITDA for the third quarter of fiscal 2008 and the third 
      quarter of fiscal 2007 on a consolidated basis and for each of the 
      Company’s business segments. In addition, the 
      Company has posted reconciliations of GAAP Income (Loss) from Continuing 
      Operations to Adjusted EBITDA for each other quarter since the start of 
      the Company’s fiscal 2007 on its website at 
      www.spectrumbrands.com. Adjusted EBITDA is a metric used by management 
      and frequently used by the financial community which provides insight 
      into an organization’s operating trends and 
      facilitates comparisons between peer companies, since interest, taxes, 
      depreciation and amortization can differ greatly between organizations 
      as a result of differing capital structures and tax strategies. Adjusted 
      EBITDA can also be a useful measure of a company’s 
      ability to service debt and is one of the measures used for determining 
      the Company’s debt covenant compliance. 
      Adjusted EBITDA excludes certain items that are unusual in nature or not 
      comparable from period to period. In addition, Spectrum Brands’ 
      management uses adjusted diluted earnings per share as one means of 
      analyzing the Company’s current and future 
      financial performance and identifying trends in its financial condition 
      and results of operations. Management believes that adjusted diluted 
      earnings per share is a useful measure for providing further insight 
      into our operating performance because it eliminates the effects of 
      certain items that are not comparable from one period to the next. 
      Spectrum Brands provides this information to investors to assist in 
      comparisons of past, present and future operating results and to assist 
      in highlighting the results of on-going operations. While Spectrum 
      Brands management believes that adjusted diluted earnings per share and 
      adjusted EBITDA are useful supplemental information, such adjusted 
      results are not intended to replace the Company’s 
      GAAP financial results and should be read in conjunction with those GAAP 
      results.
    
    
      About Spectrum Brands, Inc.
    
    
      Spectrum Brands is a global consumer products company and a leading 
      supplier of consumer batteries, lawn and garden care products, specialty 
      pet supplies, shaving and grooming products, household insect control 
      products, personal care products and portable lighting. Helping to meet 
      the needs of consumers worldwide, included in its portfolio of widely 
      trusted brands are Rayovac®, Varta®, 
      Remington®, Tetra®, 
      Marineland®, Nature’s 
      Miracle®, Dingo®, 
      8-In-1®, Spectracide®, 
      Schultz®, Cutter®, 
      Repel®, and HotShot®. 
      Spectrum Brands' products are sold by the world's top 25 retailers and 
      are available in more than one million stores in more than 120 countries 
      around the world. Headquartered in Atlanta, Georgia, Spectrum Brands 
      generated fiscal year 2007 net sales of $2.6 billion. The Company's 
      stock trades on the New York Stock Exchange under the symbol SPC.
    
    
      Certain matters discussed in this news release, with the exception of 
      historical matters, may be forward-looking statements within the meaning 
      of the Private Securities Litigation Reform Act of 1995. These 
      statements are subject to a number of risks and uncertainties that could 
      cause results to differ materially from those anticipated as of the date 
      of this release. Actual results may differ materially as a result 
      of (1) changes and developments in external competitive market factors, 
      such as introduction of new product features or technological 
      developments, development of new competitors or competitive brands or 
      competitive promotional activity or spending, (2) changes in consumer 
      demand for the various types of products Spectrum Brands offers, (3) 
      unfavorable developments in the global credit markets, (4) the impact of 
      overall economic conditions on consumer spending, (5) fluctuations in 
      commodities prices, the costs or availability of raw materials or terms 
      and conditions available from suppliers, (6) changes in the general 
      economic conditions in countries and regions where Spectrum Brands does 
      business, such as stock market prices, interest rates, currency exchange 
      rates, inflation and consumer spending, (7) the Company’s 
      ability to successfully implement manufacturing, distribution and other 
      cost efficiencies and to continue to benefit from its cost-cutting 
      initiatives, (8) unfavorable weather conditions and various other risks 
      and uncertainties, including those discussed herein and those set forth 
      in Spectrum Brands’ securities filings, 
      including the most recently filed Annual Report on Form 10-K or 
      Quarterly Report on Form 10-Q. Spectrum Brands also cautions the 
      reader that its estimates of trends, market share, retail consumption of 
      its products and reasons for changes in such consumption are based 
      solely on limited data available to Spectrum Brands and management’s 
      reasonable assumptions about market conditions, and consequently may be 
      inaccurate, or may not reflect significant segments of the retail market.
    
    
      The Company also cautions the reader that undue reliance should not 
      be placed on any forward-looking statements, which speak only as of the 
      date of this release. Spectrum Brands undertakes no duty or 
      responsibility to update any of these forward-looking statements to 
      reflect events or circumstances after the date of this report or to 
      reflect actual outcomes.
    
    
      Attached
    
    
      Table 1 - Condensed Consolidated Statements of Operations
    
    
      Table 2 - Supplemental Financial Data
    
    
      Table 3 - Reconciliation of GAAP to Adjusted Diluted Earnings Per Share
    
    
      Table 4 - Reconciliation of GAAP Income (Loss) from Continuing 
      Operations to Adjusted EBITDA (Quarterly)
    
    
      
        
          Table 1
        
      
      
        
          SPECTRUM BRANDS, INC.
        
      
      
        
          Condensed Consolidated Statements of Operations
        
      
      
        
          For the three and nine months ended June 29, 2008 and July 1, 2007
        
      
      
        
          (Unaudited)
        
      
      
        
          (In millions, except per share amounts)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          THREE MONTHS
        
        
        
        
          NINE MONTHS
        
      
      
        
        
        
        
        
          F2008
        
        
        
        
          F2007
        
        
        
        
          INC(DEC)
        
        
          F2008
        
        
        
        
          F2007
        
        
        
        
          INC(DEC)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
          %
        
        
        
        
        
        
        
        
        
        
          %
        
        
        
      
      
        
          Net sales
        
        
        
        
          $
        
        
          729.6
        
        
        
        
        
        
          $
        
        
          660.0
        
        
        
        
        
        
          10.5
        
        
          %
        
        
        
        
          $
        
        
          1,981.5
        
        
        
        
        
        
          $
        
        
          1,905.5
        
        
        
        
        
        
          4.0
        
        
          %
        
      
      
        
          Cost of goods sold
        
        
        
        
        
        
          454.3
        
        
        
        
        
        
        
        
          402.0
        
        
        
        
        
        
        
        
        
        
        
        
          1,253.6
        
        
        
        
        
        
        
        
          1,192.8
        
        
        
        
        
        
        
      
      
        
          Restructuring and related charges
        
        
        
        
           
        
        
          13.9
        
        
           
        
        
        
        
           
        
        
          4.1
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          14.2
        
        
           
        
        
        
        
           
        
        
          16.7
        
        
           
        
        
        
        
        
      
      
        
          Gross profit
        
        
        
        
        
        
          261.4
        
        
        
        
        
        
        
        
          253.9
        
        
        
        
        
        
          3.0
        
        
          %
        
        
        
        
        
        
          713.7
        
        
        
        
        
        
        
        
          696.0
        
        
        
        
        
        
          2.5
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Selling
        
        
        
        
        
        
          156.5
        
        
        
        
        
        
        
        
          140.3
        
        
        
        
        
        
        
        
        
        
        
        
          431.9
        
        
        
        
        
        
        
        
          428.7
        
        
        
        
        
        
        
      
      
        
          General and administrative
        
        
        
        
        
        
          48.4
        
        
        
        
        
        
        
        
          34.7
        
        
        
        
        
        
        
        
        
        
        
        
          146.9
        
        
        
        
        
        
        
        
          122.4
        
        
        
        
        
        
        
      
      
        
          Research and development
        
        
        
        
        
        
          7.0
        
        
        
        
        
        
        
        
          6.5
        
        
        
        
        
        
        
        
        
        
        
        
          19.0
        
        
        
        
        
        
        
        
          21.0
        
        
        
        
        
        
        
      
      
        
          Restructuring and related charges
        
        
        
        
        
        
          6.0
        
        
        
        
        
        
        
        
          26.8
        
        
        
        
        
        
        
        
        
        
        
        
          16.0
        
        
        
        
        
        
        
        
          41.7
        
        
        
        
        
        
        
      
      
        
          Goodwill and intangibles impairment
        
        
        
        
           
        
        
          303.3
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          316.5
        
        
           
        
        
        
        
           
        
        
          214.0
        
        
           
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total operating expenses
        
        
        
        
        
        
          521.2
        
        
        
        
        
        
        
        
          208.3
        
        
        
        
        
        
        
        
        
        
        
        
          930.3
        
        
        
        
        
        
        
        
          827.8
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating (loss) income
        
        
        
        
        
        
          (259.8
        
        
          )
        
        
        
        
        
        
          45.6
        
        
        
        
        
        
        
        
        
        
        
        
          (216.6
        
        
          )
        
        
        
        
        
        
          (131.8
        
        
          )
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Interest expense
        
        
        
        
        
        
          57.1
        
        
        
        
        
        
        
        
          59.4
        
        
        
        
        
        
        
        
        
        
        
        
          172.5
        
        
        
        
        
        
        
        
          191.5
        
        
        
        
        
        
        
      
      
        
          Other, net
        
        
        
        
           
        
        
          1.3
        
        
           
        
        
        
        
           
        
        
          1.3
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          0.1
        
        
           
        
        
        
        
           
        
        
          4.5
        
        
           
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss from continuing operations before income taxes
        
        
        
        
        
        
          (318.2
        
        
          )
        
        
        
        
        
        
          (15.1
        
        
          )
        
        
        
        
        
        
        
        
        
        
          (389.2
        
        
          )
        
        
        
        
        
        
          (327.8
        
        
          )
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income tax (benefit) expense
        
        
        
        
           
        
        
          (34.3
        
        
          )
        
        
        
        
           
        
        
          (6.9
        
        
          )
        
        
        
        
        
        
        
        
           
        
        
          48.5
        
        
           
        
        
        
        
           
        
        
          (64.0
        
        
          )
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss from continuing operations
        
        
        
        
        
        
          (283.9
        
        
          )
        
        
        
        
        
        
          (8.2
        
        
          )
        
        
        
        
        
        
        
        
        
        
          (437.7
        
        
          )
        
        
        
        
        
        
          (263.8
        
        
          )
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income (loss) from discontinued operations, net of tax (a)
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          0.7
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          (1.3
        
        
          )
        
        
        
        
           
        
        
          0.1
        
        
           
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net loss
        
        
        
        
          $
        
        
          (283.9
        
        
          )
        
        
        
        
          $
        
        
          (7.5
        
        
          )
        
        
        
        
        
        
        
        
          $
        
        
          (439.0
        
        
          )
        
        
        
        
          $
        
        
          (263.7
        
        
          )
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Average shares outstanding (b)
        
        
        
        
        
        
          50.9
        
        
        
        
        
        
        
        
          50.8
        
        
        
        
        
        
        
        
        
        
        
        
          50.9
        
        
        
        
        
        
        
        
          50.8
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Loss income from continuing operations
          
        
        
        
        
          $
        
        
          (5.58
        
        
          )
        
        
        
        
          $
        
        
          (0.16
        
        
          )
        
        
        
        
        
        
        
        
          $
        
        
          (8.60
        
        
          )
        
        
        
        
          $
        
        
          (5.19
        
        
          )
        
        
        
        
        
      
      
        
          Income (loss) from discontinued operations
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          0.01
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          (0.03
        
        
          )
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
      
      
        
          Basic loss per share
        
        
        
        
          $
        
        
          (5.58
        
        
          )
        
        
        
        
          $
        
        
          (0.15
        
        
          )
        
        
        
        
        
        
        
        
          $
        
        
          (8.62
        
        
          )
        
        
        
        
          $
        
        
          (5.19
        
        
          )
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Average shares and common stock equivalents outstanding (b) (c)
        
        
        
        
        
        
          50.9
        
        
        
        
        
        
        
        
          50.8
        
        
        
        
        
        
        
        
        
        
        
        
          50.9
        
        
        
        
        
        
        
        
          50.8
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss income from continuing operations
        
        
        
        
          $
        
        
          (5.58
        
        
          )
        
        
        
        
          $
        
        
          (0.16
        
        
          )
        
        
        
        
        
        
        
        
          $
        
        
          (8.60
        
        
          )
        
        
        
        
          $
        
        
          (5.19
        
        
          )
        
        
        
        
        
      
      
        
          Income (loss) from discontinued operations
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          0.01
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          (0.03
        
        
          )
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
      
      
        
          Diluted loss per share
        
        
        
        
          $
        
        
          (5.58
        
        
          )
        
        
        
        
          $
        
        
          (0.15
        
        
          )
        
        
        
        
        
        
        
        
          $
        
        
          (8.62
        
        
          )
        
        
        
        
          $
        
        
          (5.19
        
        
          )
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            (a) Reflects the income (loss) from discontinued operations, net 
            of tax, of the Canadian Home and Garden business, discontinued 
            effective October 1, 2006.  Included in the loss from discontinued 
            operations for the nine months ended June 29, 2008 is a loss on 
            disposal of $1.1 million, net of tax benefit.  The Company's 
            Canadian Home and Garden business has been excluded from 
            continuing operations for all periods presented.
          
          
             
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          (b) Per share figures calculated prior to rounding.
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          (c) For the three and nine months ended June 29, 2008 and July 1, 
          2007, we have not assumed the exercise of common stock equivalents 
          as the impact would be antidilutive.
        
      
    
    
      
        
          Table 2
        
      
      
        
          SPECTRUM BRANDS, INC.
        
      
      
        
          Supplemental Financial Data
        
      
      
        
          For the three and nine months ended June 29, 2008 and July 1, 2007
        
      
      
        
          (Unaudited)
        
      
      
        
          ($ in millions)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
          Supplemental Financial Data
        
        
        
        
          F2008
        
        
        
        
          F2007
        
        
        
        
        
        
        
        
        
      
      
        
          Cash
        
        
        
        
          $
        
        
          72.7
        
        
        
        
        
        
          $
        
        
          176.2
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Trade receivables, net
        
        
        
        
          $
        
        
          395.0
        
        
        
        
        
        
          $
        
        
          364.4
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Days Sales Outstanding (a)
        
        
        
        
        
        
          50
        
        
        
        
        
        
        
        
          50
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Inventory, net
        
        
        
        
          $
        
        
          428.3
        
        
        
        
        
        
          $
        
        
          439.9
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Inventory Turnover (b)
        
        
        
        
        
        
          3.9
        
        
        
        
        
        
        
        
          3.4
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Debt
        
        
        
        
          $
        
        
          2,634.7
        
        
        
        
        
        
          $
        
        
          2,654.6
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          THREE MONTHS
        
        
        
        
          NINE MONTHS
        
      
      
        
          Supplemental Cash Flow Data
        
        
        
        
          F2008
        
        
        
        
          F2007
        
        
        
        
          F2008
        
        
        
        
          F2007
        
      
      
        
          Depreciation and amortization, excluding amortization of debt 
          issuance costs
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          $
        
        
          17.4
        
        
        
        
        
        
          $
        
        
          24.1
        
        
        
        
        
        
          $
        
        
          69.1
        
        
        
        
        
        
          $
        
        
          60.7
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Capital expenditures
        
        
        
        
          $
        
        
          4.7
        
        
        
        
        
        
          $
        
        
          5.8
        
        
        
        
        
        
          $
        
        
          15.3
        
        
        
        
        
        
          $
        
        
          20.5
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          THREE MONTHS
        
        
        
        
          NINE MONTHS
        
      
      
        
          Supplemental Segment Sales & Profitability
        
        
        
        
          F2008
        
        
        
        
          F2007
        
        
        
        
          F2008
        
        
        
        
          F2007
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Sales
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Global Batteries & Personal Care
        
        
        
        
          $
        
        
          344.4
        
        
        
        
        
        
          $
        
        
          307.0
        
        
        
        
        
        
          $
        
        
          1,070.1
        
        
        
        
        
        
          $
        
        
          1,031.1
        
        
        
      
      
        
          Global Pet Supplies
        
        
        
        
        
        
          148.6
        
        
        
        
        
        
        
        
          135.0
        
        
        
        
        
        
        
        
          439.4
        
        
        
        
        
        
        
        
          415.2
        
        
        
      
      
        
          Home and Garden
        
        
        
        
           
        
        
          236.6
        
        
           
        
        
        
        
           
        
        
          218.0
        
        
           
        
        
        
        
           
        
        
          472.0
        
        
           
        
        
        
        
           
        
        
          459.2
        
        
           
        
      
      
        
          Total net sales
        
        
        
        
          $
        
        
          729.6
        
        
           
        
        
        
        
          $
        
        
          660.0
        
        
           
        
        
        
        
          $
        
        
          1,981.5
        
        
           
        
        
        
        
          $
        
        
          1,905.5
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Segment Profit
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Global Batteries & Personal Care
        
        
        
        
          $
        
        
          33.2
        
        
        
        
        
        
          $
        
        
          27.4
        
        
        
        
        
        
          $
        
        
          105.0
        
        
        
        
        
        
          $
        
        
          89.4
        
        
        
      
      
        
          Global Pet Supplies
        
        
        
        
        
        
          16.8
        
        
        
        
        
        
        
        
          14.4
        
        
        
        
        
        
        
        
          48.8
        
        
        
        
        
        
        
        
          49.1
        
        
        
      
      
        
          Home and Garden
        
        
        
        
           
        
        
          25.9
        
        
           
        
        
        
        
           
        
        
          42.3
        
        
           
        
        
        
        
           
        
        
          6.3
        
        
           
        
        
        
        
           
        
        
          40.8
        
        
           
        
      
      
        
          Total segment profit
        
        
        
        
        
        
          75.9
        
        
        
        
        
        
        
        
          84.1
        
        
        
        
        
        
        
        
          160.1
        
        
        
        
        
        
        
        
          179.3
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Corporate
        
        
        
        
        
        
          12.4
        
        
        
        
        
        
        
        
          7.6
        
        
        
        
        
        
        
        
          30.0
        
        
        
        
        
        
        
        
          38.7
        
        
        
      
      
        
          Restructuring and related charges
        
        
        
        
        
        
          19.9
        
        
        
        
        
        
        
        
          30.9
        
        
        
        
        
        
        
        
          30.2
        
        
        
        
        
        
        
        
          58.4
        
        
        
      
      
        
          Goodwill and intangibles impairment
        
        
        
        
        
        
          303.3
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          316.5
        
        
        
        
        
        
        
        
          214.0
        
        
        
      
      
        
          Interest expense
        
        
        
        
        
        
          57.1
        
        
        
        
        
        
        
        
          59.4
        
        
        
        
        
        
        
        
          172.5
        
        
        
        
        
        
        
        
          191.5
        
        
        
      
      
        
          Other (income) expense, net
        
        
        
        
           
        
        
          1.3
        
        
           
        
        
        
        
           
        
        
          1.3
        
        
           
        
        
        
        
           
        
        
          0.1
        
        
           
        
        
        
        
           
        
        
          4.5
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss from continuing operations before income taxes
        
        
        
        
          $
        
        
          (318.1
        
        
          )
        
        
        
        
          $
        
        
          (15.1
        
        
          )
        
        
        
        
          $
        
        
          (389.2
        
        
          )
        
        
        
        
          $
        
        
          (327.8
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          (a) Reflects actual days sales outstanding at end of period.
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          (b) Reflects cost of sales (excluding restructuring and related 
          charges) during the last twelve months divided by inventory as of 
          the end of the period.
        
      
    
    
      
        
          Table 3
        
      
      
        
          SPECTRUM BRANDS, INC.
        
      
      
        
          Reconciliation of GAAP to Adjusted Diluted Earnings Per Share
        
      
      
        
          For the three and nine months ended June 29, 2008 and July 1, 2007
        
      
      
        
          (Unaudited)
        
      
      
        
           
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
          THREE MONTHS
        
        
        
        
          NINE MONTHS
        
        
        
      
      
        
        
        
        
        
        
        
          F2008
        
        
        
        
          F2007
        
        
        
        
          F2008
        
        
        
        
          F2007
        
        
        
      
      
        
          Diluted loss per share, as reported
        
        
          $
        
        
          (5.58
        
        
          )
        
        
        
        
          $
        
        
          (0.15
        
        
          )
        
        
        
        
          $
        
        
          (8.62
        
        
          )
        
        
        
        
          $
        
        
          (5.19
        
        
          )
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Adjustments, net of tax:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Restructuring and related charges
        
        
        
        
          0.27
        
        
        
        
          (a)
        
        
        
        
          0.36
        
        
        
        
          (b)
        
        
        
        
          0.41
        
        
        
        
          (c)
        
        
        
        
          0.77
        
        
        
        
          (d)
        
      
      
        
        
        
          Goodwill and Intangibles Impairment
        
        
        
        
          4.76
        
        
        
        
          (e)
        
        
        
        
          -
        
        
        
        
        
        
        
        
          5.14
        
        
        
        
          (f)
        
        
        
        
          3.76
        
        
        
        
          (g)
        
      
      
        
        
        
          Depreciation and Amortization - U.S Home and Garden
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (0.04
        
        
          )
        
        
          (h)
        
        
        
        
          0.17
        
        
        
        
          (h)
        
        
        
        
          (0.12
        
        
          )
        
        
          (h)
        
      
      
        
        
        
          Transaction Costs
        
        
        
        
        
        
          0.05
        
        
        
        
          (i)
        
        
        
        
          -
        
        
        
        
        
        
        
        
          0.08
        
        
        
        
          (j)
        
        
        
        
          0.04
        
        
        
        
          (k)
        
      
      
        
        
        
          Re-financing costs
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          0.41
        
        
        
        
          (l)
        
      
      
        
        
        
          Discontinued operations
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (0.01
        
        
          )
        
        
          
            (m)
          
        
        
          
             
          
        
        
        
        
          0.02
        
        
        
        
          
            (m)
          
        
        
          
             
          
        
        
        
        
          -
        
        
        
        
          
            (m)
          
        
        
          
             
          
        
      
      
        
        
        
          Income taxes
        
        
        
        
        
        
          0.36
        
        
        
        
          (n)
        
        
        
        
          -
        
        
        
        
        
        
        
        
          2.50
        
        
        
        
          (n)
        
        
        
        
          -
        
        
        
        
        
      
      
        
        
        
          Other adjustments
        
        
        
        
           
        
        
          0.20
        
        
           
        
        
          (o)
        
        
           
        
        
          (0.04
        
        
          )
        
        
          
            (p)
          
        
        
          
             
          
        
        
           
        
        
          (0.16
        
        
          )
        
        
          
            (p)
          
        
        
          
             
          
        
        
           
        
        
          (0.11
        
        
          )
        
        
          
            (p)
          
        
        
          
             
          
        
      
      
        
        
        
        
        
        
        
        
        
          5.64
        
        
        
        
        
        
        
        
          0.27
        
        
        
        
        
        
        
        
          8.17
        
        
        
        
        
        
        
        
          4.75
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Diluted earnings (loss) per share, as adjusted
        
        
          $
        
        
          0.06
        
        
           
        
        
        
        
          $
        
        
          0.12
        
        
           
        
        
        
        
          $
        
        
          (0.45
        
        
          )
        
        
        
        
          $
        
        
          (0.44
        
        
          )
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Note: Per share figures calculated prior to rounding.
          
          
             
          
          
            (a)  For the three months ended June 29, 2008, reflects $14.3 
            million, net of tax, of restructuring and related charges as 
            follows: $10.3 million for the Ningbo exit strategy, $0.3 million 
            for the integration of United and Tetra and $3.7 million for the 
            Global restructuring announced January 10, 2007.
          
          
             
          
          
            (b)  For the three months ended July 1, 2007, reflects $18.8 
            million, net of tax, of restructuring and related charges as 
            follows: (i) $4.0 million for the integration of United and Tetra; 
            (ii) $0.6 million for a series of actions in Europe and Latin 
            America to reduce operating costs and rationalize operating 
            structure; (iii) $14.2 million for the Global restructuring 
            announced January 10, 2007.
          
          
             
          
          
            (c)  For the nine months ended June 29, 2008, reflects $21.0 
            million, net of tax, of restructuring and related charges as 
            follows: $10.3 million for the Ninbo exit strategy, $2.2 million 
            for the integration of United and Tetra and $8.5 million for the 
            Global restructuring announced January 10, 2007.
          
          
             
          
          
            (d) For the nine months ended July 1, 2007, reflects $39.1 
            million, net of tax, of restructuring and related charges as 
            follows: (i) $10.6 million for the integration of United and 
            Tetra; (ii) $4.4 million for a series of actions in Europe and 
            Latin America to reduce operating costs and rationalize operating 
            structure; (iii) $24.1 million for the Global restructuring 
            announced January 10, 2007.
          
          
             
          
          
            (e) For the three months ended June 29, 2008, reflects an 
            impairment charge of $253.7 million, net of tax, of goodwill and 
            trade names as follows: $13.7 million of trade names and $68.9 
            million of goodwill of our Home & Garden business as a result of 
            an impairment evaluation in accordance with SFAS 142, "Goodwill 
            and Other Intangible Assets;" $154.9 million of goodwill of our 
            Global Pet Supplies business as a result of an impairment 
            evaluation in accordance with SFAS 144, "Accounting for the 
            Impairment or Disposal of Long-Lived Assets;" and $16.2 million of 
            goodwill of our Global Battery and Personal Care business as a 
            result of the Ningbo exit strategy in accordance with SFAS 144, 
            "Accounting for the Impairment or Disposal of Long-Lived Assets."
          
          
             
          
          
            (f) For the nine months ended June 29, 2008, reflects an 
            impairment charge of $262.0 million, net of tax, of goodwill and 
            trade names as follows: $22.0 million of trade names and $68.9 
            million of goodwill of our Home & Garden business as a result of 
            an impairment evaluation in accordance with SFAS 142, "Goodwill 
            and Other Intangible Assets;" $154.9 million of goodwill of our 
            Global Pet Supplies business as a result of an impairment 
            evaluation in accordance with SFAS 144, "Accounting for the 
            Impairment or Disposal of Long-Lived Assets;" and $16.2 million of 
            goodwill of our Global Battery and Personal Care business as a 
            result of the Ningbo exit strategy in accordance with SFAS 144, 
            "Accounting for the Impairment or Disposal of Long-Lived Assets."
          
          
             
          
          
            (g) For the three and six months ended April 1, 2007, reflects an 
            impairment charge of $191.2 million, net of tax, for the write-off 
            of goodwill of our North America batteries and personal care 
            business (which  is included in our Global Batteries and Personal 
            care business segment) as a result of an impairment evaluation in 
            accordance with SFAS 142, "Goodwill and Other Intangible Assets."
          
          
             
          
          
            (h) Effective December 31, 2007, the Company discontinued the 
            active marketing of the Home and Garden business for sale and, 
            accordingly, reclassified the Home and Garden business, which had 
            been designated as a discontinued operation since October 1, 2006, 
            as an asset held and used in continuing operations.  Inasmuch as 
            depreciation and amortization expense is not recorded for assets 
            designated as discontinued operations, this adjustment reflects 
            the impact of depreciation and amortization expense as if the Home 
            and Garden business was designated as a continuing operation for 
            all periods presented.
          
          
             
          
          
            (i) For the three months ended June 29, 2008 general and 
            administrative expenses include $2.9 million, net of tax, 
            representing professional fees incurred in connection with the 
            proposed sale of the Company's Global Pet Supplies business.
          
          
             
          
          
            (j) For the nine months ended June 29, 2008 general and 
            administrative expenses include $3.9 million, net of tax, 
            representing professional fees incurred in connection with the 
            proposed sale of the Company's Global Pet Supplies and Home and 
            Garden businesses.
          
          
             
          
          
            (k) For the nine months ended July 1, 2007 general and 
            administrative expenses include $2.3 million, net of tax, 
            representing professional fees incurred in connection with the 
            proposed sale of the Company's Home & Garden business.
          
          
             
          
          
            (l) For the nine months ended July 1, 2007 reflects $21.1 million, 
            net of tax, of charges associated with a refinancing of the 
            Company's debt as follows: (i) $14.3 million write-off of deferred 
            financing fees associated with the then existing Senior term debt 
            and the $350 8½% Senior subordinated 
            notes; (ii) $6.8 million pre-payment penalty associated with the 
            then existing Senior term debt.
          
          
             
          
          
            (m) For the three months ended July 1, 2007, reflects income from 
            discontinued operations, net of tax of $0.7 million of the 
            Company's Canadian Home & Garden business, discontinued effective 
            October 1, 2006.  For the nine months ended June 29, 2008, 
            reflects the loss on discontinued operations, net of tax of $1.3 
            million of the Company's Canadian Home & Garden business sold on 
            November 1, 2007.  Such loss includes a loss on disposal of $1.2 
            million, net of tax benefit.  For the nine months ended July 1, 
            2007, reflects income from discontinued operations, net of tax of 
            $0.1 million of the Company's Canadian Home & Garden business, 
            discontinued effective October 1, 2006.
          
          
             
          
          
            (n) For the three and nine months ended June 29, 2008, reflects 
            $19.1 million and $127.4 million, respectively, adjustment to 
            income tax expense to exclude the impact of the valuation 
            allowance against deferred taxes and other tax related items in 
            order to reflect a normalized ongoing effective tax rate.
          
          
             
          
          
            (o) For the three months ended June 29, 2008, general and 
            administrative expenses include a net of tax benefit of $1.9 
            million related to expiring taxes and related penalties, 
            associated with the Company's provision for presumed credits 
            applied to the Brazilian excise tax on manufactured products, 
            which expired in the current period. For the three months ended 
            June 29, 2008, interest expense includes a net of tax benefit of 
            $0.9 million related to interest charges associated with the 
            Company's provision for presumed credits applied to the Brazilian 
            excise tax on manufactured products.   Lastly, Diluted earnings 
            per share, as reported for the three months ended June 29, 2008 is 
            calculated using average basic shares outstanding of 50.9 million 
            as the use of average diluted shares outstanding would be 
            antidilutive.  However, all adjustments to arrive at Diluted 
            earnings per share, as adjusted for the three months ended June 
            28, 2008 are calculated using average diluted shares outstanding 
            of 53.3 million.
          
          
             
          
          
            (p)   For the three and nine months ended July 1, 2007, general 
            and administrative expenses include a net of tax benefit of $1.7 
            million and $4.1 million, respectively, related to expiring taxes 
            and related penalties, associated with the Company's provision for 
            presumed credits applied to the Brazilian excise tax on 
            manufactured products, which expired in the current period. For 
            the three and nine months ended July 1, 2007, interest expense 
            includes a net of tax benefit of $0.6 million and $1.5 million, 
            respectively, related to interest charges associated with the 
            Company's provision for presumed credits applied to the Brazilian 
            excise tax on manufactured products. For the nine months ended 
            June 29, 2008, general and administrative expenses include a net 
            of tax benefit of $5.5 million related to expiring taxes and 
            related penalties, associated with the Company's provision for 
            presumed credits applied to the Brazilian excise tax on 
            manufactured products, which expired in the current period. For 
            the nine months ended June 29, 2008, interest expense includes a 
            net of tax benefit of $2.7 million related to interest charges 
            associated with the Company's provision for presumed credits 
            applied to the Brazilian excise tax on manufactured products.
          
        
      
    
    
      
        
          Table 4
        
      
      
        
          SPECTRUM BRANDS, INC.
        
      
      
        
          Reconciliation of GAAP Income (Loss) from Continuing Operations 
          to Adjusted EBITDA
        
      
      
        
          for the three months ended July 1, 2007
        
      
      
        
          (Unaudited)
        
      
      
        
          ($ millions)
        
      
      
        
        
        
        
        
           
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Global Batteries & Personal Care
        
        
        
        
          Global Pet Supplies
        
        
        
        
          Home & Garden
        
        
        
        
          Corporate
        
        
        
        
          Unallocated Items (a)
        
        
        
        
          Consolidated Spectrum Brands, Inc.
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income (loss) from continuing operations, net of tax
        
        
          $
        
        
          16.3
        
        
        
        
        
        
        
        
        
        
          $
        
        
          8.7
        
        
        
        
        
        
          $
        
        
          41.6
        
        
        
        
        
        
          $
        
        
          (22.2
        
        
          )
        
        
        
        
        
        
          $
        
        
          (52.5
        
        
          )
        
        
        
        
        
        
          $
        
        
          (8.2
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income tax expense (benefit) - continuing operations
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          (6.9
        
        
          )
        
        
        
        
        
        
        
        
          (6.9
        
        
          )
        
      
      
        
          Interest expense
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          59.4
        
        
        
        
        
        
        
        
        
        
          59.4
        
        
        
      
      
        
          Restructuring and Related charges
        
        
        
        
          7.6
        
        
        
        
        
        
        
        
        
        
        
        
          5.7
        
        
        
        
        
        
        
        
          0.3
        
        
        
        
        
        
        
        
          17.3
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          30.9
        
        
        
      
      
        
          Restricted Stock Amortization/Restructuring (b)
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (9.8
        
        
          )
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          (9.8
        
        
          )
        
      
      
        
          Brazilian IPI Credit
        
        
           
        
        
          (2.1
        
        
          )
        
        
        
        
        
        
        
        
           
        
        
          -
        
        
        
        
        
        
           
        
        
          -
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
           
        
        
          (2.1
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Adjusted EBIT
        
        
        
        
          21.8
        
        
        
        
        
        
        
        
        
        
        
        
          14.4
        
        
        
        
        
        
        
        
          41.9
        
        
        
        
        
        
        
        
          (14.7
        
        
          )
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          63.4
        
        
        
      
      
        
          Depreciation and Amortization
        
        
           
        
        
          8.4
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          5.7
        
        
        
        
        
        
           
        
        
          -
        
        
        
        
        
        
           
        
        
          10.2
        
        
           
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
           
        
        
          24.3
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Adjusted EBITDA
        
        
          $
        
        
          30.2
        
        
           
        
        
        
        
        
        
        
        
          $
        
        
          20.1
        
        
        
        
        
        
          $
        
        
          41.9
        
        
        
        
        
        
          $
        
        
          (4.5
        
        
          )
        
        
        
        
        
        
          $
        
        
          -
        
        
           
        
        
        
        
        
        
          $
        
        
          87.7
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Note: Amounts calculated prior to rounding
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          (a) It is the Company's policy to record Income tax expense 
          (benefit), and interest expense on a consolidated basis. 
          Accordingly, such amounts are not reflected in the operating results 
          of the operating segments.
        
      
      
        
          (b) adjustment reflects restricted stock amortization which is 
          associated with and included in restructuring and related charges. 
          The adjustment negates the impact of reflecting this expense twice.
        
      
    
    
      
        
          Table 4 (continued)
        
      
      
        
          SPECTRUM BRANDS, INC.
        
      
      
        
          Reconciliation of GAAP Income (Loss) from Continuing Operations 
          to Adjusted EBITDA
        
      
      
        
          for the three months ended June 29, 2008
        
      
      
        
          (Unaudited)
        
      
      
        
          ($ millions)
        
      
      
        
        
        
        
        
           
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Global Batteries & Personal Care
        
        
        
        
          Global Pet Supplies
        
        
        
        
          Home & Garden
        
        
        
        
          Corporate
        
        
        
        
          Unallocated Items (a)
        
        
        
        
          Consolidated Spectrum Brands, Inc.
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss from continuing operations, net of tax
        
        
          $
        
        
          (0.7
        
        
          )
        
        
        
        
        
        
        
        
          $
        
        
          (138.7
        
        
          )
        
        
        
        
        
        
          $
        
        
          (107.3
        
        
          )
        
        
        
        
        
        
          $
        
        
          (14.4
        
        
          )
        
        
        
        
        
        
          $
        
        
          (22.8
        
        
          )
        
        
        
        
        
        
          $
        
        
          (283.9
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income tax expense (benefit) - continuing operations
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          (34.3
        
        
          )
        
        
        
        
        
        
        
        
          (34.3
        
        
          )
        
      
      
        
          Interest expense
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          57.1
        
        
        
        
        
        
        
        
        
        
          57.1
        
        
        
      
      
        
          Goodwill and intangibles impairment
        
        
        
        
          16.2
        
        
        
        
        
        
        
        
        
        
        
        
          154.9
        
        
        
        
        
        
        
        
        
        
          132.2
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          303.3
        
        
        
      
      
        
          Restructuring and Related charges
        
        
        
        
          17.4
        
        
        
        
        
        
        
        
        
        
        
        
          0.4
        
        
        
        
        
        
        
        
        
        
          1.0
        
        
        
        
        
        
        
        
        
        
          1.1
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          19.9
        
        
        
      
      
        
          Restricted Stock Amortization/Restructuring (b)
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Brazilian IPI Credit
        
        
        
        
          (2.8
        
        
          )
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          (2.8
        
        
          )
        
      
      
        
          Transaction costs - Corporate
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
           
        
        
          4.5
        
        
           
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
           
        
        
          4.5
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Adjusted EBIT
        
        
        
        
          30.1
        
        
        
        
        
        
        
        
        
        
        
        
          16.6
        
        
        
        
        
        
        
        
        
        
          25.9
        
        
        
        
        
        
        
        
        
        
          (8.8
        
        
          )
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
          63.8
        
        
        
      
      
        
          Depreciation and Amortization
        
        
           
        
        
          7.8
        
        
           
        
        
        
        
        
        
        
        
           
        
        
          5.8
        
        
           
        
        
        
        
        
        
           
        
        
          3.5
        
        
           
        
        
        
        
        
        
           
        
        
          0.3
        
        
           
        
        
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
        
        
           
        
        
          17.4
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Adjusted EBITDA
        
        
          $
        
        
          37.9
        
        
           
        
        
        
        
        
        
        
        
          $
        
        
          22.4
        
        
           
        
        
        
        
        
        
          $
        
        
          29.4
        
        
           
        
        
        
        
        
        
          $
        
        
          (8.5
        
        
          )
        
        
        
        
        
        
          $
        
        
          -
        
        
           
        
        
        
        
        
        
          $
        
        
          81.2
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Note: Amounts calculated prior to rounding
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          (a) It is the Company's policy to record Income tax expense 
          (benefit), and interest expense on a consolidated basis. 
          Accordingly, such amounts are not reflected in the operating results 
          of the operating segments.
        
      
      
        
          (b) adjustment reflects restricted stock amortization which is 
          associated with and included in restructuring and related charges. 
          The adjustment negates the impact of reflecting this expense twice.