MIDDLETON, Wis. — Spectrum Brands Holdings, Inc. (NYSE: SPB), a global and diversified consumer products company with market-leading brands, on Thursday reported record performance for fiscal 2014 ended Sept. 30, with results that met or exceeded financial targets. All but one of the company’s businesses achieved increased adjusted EBITDA in fiscal 2014. Continuous improvement savings also reached a record annual amount. Fiscal 2014 free cash flow reached a record $359 million versus $254 million in fiscal 2013.
The company’s record fiscal 2014 results included growth in every quarter of the year, including a fourth quarter highlighted by increases in net sales, GAAP and adjusted earnings per share, and adjusted EBITDA.
Spectrum Brands said it expects to achieve a sixth consecutive year of record net sales and profitability in fiscal 2015.
“Fiscal 2014 was our fifth consecutive year of record performance,” said Dave Lumley, Chief Executive Officer of Spectrum Brands Holdings. “We delivered solid, consistent sales growth each quarter of about 3.5 percent. Adjusted EBITDA grew at twice the rate of sales, and gross and adjusted EBITDA margins expanded. Free cash flow grew to a record $359 million, or nearly $7 per share, from $254 million, or nearly $5 per share, in fiscal 2013."
Consolidated net sales of $4.43 billion in fiscal 2014 increased 8.4 percent compared to $4.09 billion in fiscal 2013. The increase was the result of the Hardware and Home Improvement Group (HHI) acquisition on Dec. 17, 2012 and higher revenues for the Home and Garden and Batteries businesses. Including HHI on a pro forma basis as if part of the company for all of fiscal 2013, net sales of $4.43 billion increased 3.5 percent compared to $4.28 billion last year.
Gross profit and gross profit margin for fiscal 2014 of $1.57 billion and 35.4 percent, respectively, improved compared to $1.39 billion and 34.0 percent in fiscal 2013. All but one division contributed to the gross profit margin improvement.
Consolidated net sales were $1.18 billion in the fourth quarter of fiscal 2014, an increase of 3.6 percent compared to $1.14 billion a year earlier. The improvement was the result of higher net sales in the company’s home and garden, HHI and battery businesses.
Gross profit and gross profit margin in the fourth quarter of fiscal 2014 were $411.0 million and 34.9 percent, respectively, compared to $396.5 million and 34.9 percent, respectively, last year.
The Global Batteries & Appliances segment reported fiscal 2014 fourth quarter net sales of $595.7 million, an increase of 3.2 percent versus $577.3 million in the year-ago quarter.
Global battery net sales of $268.7 million in the fourth quarter of fiscal 2014 improved 5.9 percent compared to $253.6 million in the fourth quarter of fiscal 2013. North American alkaline battery growth was driven by increases in a majority of all channels. In Europe, VARTA battery growth was attributable to retailer distribution gains and promotions. Latin American battery revenues also increased.
The Hardware & Home Improvement (HHI) segment reported net sales of $313.8 million in the fourth quarter of fiscal 2014, an increase of 6.8 percent compared to $293.8 million in the prior year’s quarter. The revenue growth was primarily attributable to improvements in the U.S. residential security category, as well as increases in both the retail and non-retail sectors of the U.S. plumbing category. Excluding the negative impact of foreign exchange, net sales increased 7.5 percent in the fourth quarter of fiscal 2014.
Spectrum Brands expects fiscal 2015 net sales, as reported, to increase in the low to mid-single digit range compared to fiscal 2014 net sales of $4.43 billion, including the positive impact of the acquisition of Tell Manufacturing on Oct. 1, 2014 and anticipated negative impacts from foreign exchange of 1.5 percent to 2 percent.