Spectrum Brands Holdings
Q3 2015 Earnings Results
On Wednesday August 5, 2015, Spectrum Brands Holdings closed at $103.27, which is $9.29 higher than when we bought it on March 3, 2015.
Spectrum Brands Holdings reported great earnings during their third quarter as they completed their acquisition of Armored AutoGroup Parent Inc. SPB also strengthened their balance sheet and improved their liquidity. During their third quarter they announced net sales of $1.25 billion, which increased 10.5 percent compared to $1.13 billion last year. Organic sales increased 3.7 percent, from the prior year, after the negative impact of $63.6 million in foreign exchange and acquisition sales of $140.4 million were excluded. Their adjusted EBITDA margin (non-GAAP measure) increased 18.9 percent from 17.9 percent last year. This was primarily due to improved mix, operating expense leverage and acquisitions.
“Our third quarter was highlighted by record Home and Garden performance, strong personal care and small appliances results, and strong European volume growth,” said Andreas Rouvé, CEO. While some products were successful others were unprofitable. SPB has maintained strong cost improvement savings and leverage expenses by exiting unsuccessful products in the Hardware and Home Improvement division and by reducing promotional program participation in the Global Batteries & Appliances division. This has also allowed them to overcome the negative foreign exchange impacts that they have been facing.
To off set the exiting of product groups, SPB has continued to enter new product groups at a steady rate, which benefited them this quarter. “We continued our focus on our ‘more, more, more’ organic growth strategy to enter more countries, serve more channels, and launch more categories by leveraging our strong retailer relationships.” “We want to fully leverage the capabilities of each of our global divisions by taking advantage of our strong regional sales presence to ensure Spectrum Brands is the preferred partner of our retail customers,” “We are off to a smooth and fast start on the integration of our new Global Auto Care division, and are building plans to accelerate its international revenue growth.” The three above statements made by the CEO, Andreas Rouvé, demonstrate that Spectrum Brands Holdings is always looking towards the future and expansion.
Spectrum Brands Holdings reaffirms their expectations for fiscal year 2015 to be the sixth consecutive year of record results. SPB still fits our thesis and looks to be a strong company with a promising future.