Spectrum Brands and Salton Inc. Terminate Sale Agreement

  
    
  
  
    
      Spectrum Brands, Inc. (NYSE: SPC) (the Company) announced today that it 
      and Salton Inc. and Salton’s wholly owned 
      subsidiary, Applica Pet Products LLC, have mutually agreed to terminate 
      the definitive agreement for the sale of the Company’s 
      global pet supply business.
    
    
      “Despite our desire and diligent efforts to 
      complete this transaction upon the negotiated terms, we have been unable 
      to obtain the consent of our senior lenders necessary to close on a 
      basis that would be in the best interests of our shareholders and the 
      Company,” said Kent Hussey, CEO of Spectrum 
      Brands. “We will therefore continue to operate 
      the global pet supply business and work to capture the strong market 
      potential we see there. Additionally, our Board and management team 
      remain committed to finding and executing appropriate alternatives for 
      reducing the indebtedness of the Company.”
    
    
      Hussey continued, “With $72.7 million of cash 
      on our Balance Sheet at quarter-end, June 29, 2008, and both sales and 
      adjusted EBITDA growth expected for the full year fiscal 2008 versus 
      full year fiscal 2007 results, we continue to believe that we have 
      sufficient liquidity to run our businesses.” 
      In addition, based on current forecasts, the Company projects its fiscal 
      2009 free cash flow from operations, which would be available to reduce 
      outstanding indebtedness, to range between $40 to $50 million. This 
      projection includes an estimate of Cash Flows from Operating Activities 
      for fiscal 2009 of $75 to $85 million less capital expenditures of $35 
      million.
    
    
      Termination of the definitive agreement is conditioned upon the company 
      paying to Salton Inc. $3 million as a reimbursement of expenses within 2 
      business days. Additionally, the standstill provisions of the 
      confidentiality and standstill agreement entered into on February 26, 
      2008 with Harbinger Capital Partners Master Fund I, Ltd. were terminated.
    
    
      Non-GAAP Financial Measures
    
    
      Within this release, reference is made to free cash flow. Free cash flow 
      is a metric used by the Company’s management 
      and frequently used by the financial community which provides insight 
      into an organization’s operating activities 
      and is a useful measure of performance and its ability to generate cash. 
      While the Company’s management believes that 
      free cash flow is useful supplemental information, such non-GAAP 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(R), Varta(R), Remington(R), Tetra(R), 
      Marineland(R), Nature's Miracle(R), Dingo(R), 8-In-1(R), Spectracide(R), 
      Schultz(R), Cutter(R), Repel(R), and HotShot(R). 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) the risk that the termination disrupts current plans and 
      operations; (2) difficulty or unanticipated expenses in connection with 
      the termination; (3) 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, (4) 
      changes in consumer demand for the various types of products the Company 
      offers, (5) unfavorable developments in the global credit markets, (6) 
      the impact of overall economic conditions on consumer spending, (7) 
      fluctuations in commodities prices, the costs or availability of raw 
      materials or terms and conditions available from suppliers, (8) changes 
      in the general economic conditions in countries and regions where the 
      Company does business, such as stock market prices, interest rates, 
      currency exchange rates, inflation and consumer spending, (9) the Company’s 
      ability to successfully implement manufacturing, distribution and other 
      cost efficiencies and to continue to benefit from its cost-cutting 
      initiatives, (10) unfavorable weather conditions and various other risks 
      and uncertainties, including those discussed herein and those set forth 
      in the Company’s securities filings, 
      including the most recently filed Annual Report on Form 10-K or 
      Quarterly Report on Form 10-Q. The Company 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 the Company 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. The Company 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.