Atlanta — Spectrum Brands, formerly named Rayovac, said it has been told that the U.S. Attorney’s Office for the Northern District of George is investigating recent company disclosures regarding financial results for its third fiscal quarter, ended July 3, as well as the company’s revised lower guidance issued on Sept. 7 for its fourth quarter and fiscal year, ended Sept. 30.
Spectrum, which supplies Rayovac-brand batteries, said it intends to cooperate fully with the investigation.
At the same time, an expanded class-action complaint has been filed against Spectrum on behalf of those who purchased the company’s stock between last Jan. 4 through Nov. 11.
Among the charges in the complaint are that Spectrum misrepresented that it was growing through acquisitions and diversifying revenues, while maintaining sales of existing products and leveraging existing brands, and that the company was achieving “record” sales during the class period, with double-digit increases in battery sales.
Announcement of the investigation followed by four days the company’s fourth-quarter loss posting, and the lowering of its 2006 outlook for a second time in a bit over two months.
In its fiscal fourth quarter, Spectrum said sales in North America dropped 22 percent year-on-year, with profit off by more than half. Retail battery sales declined about 6 percent in the fourth quarter.
The company blamed lower battery sales on transition results from a change in marketing campaigns and increased raw materials and fuel and transportation costs.
Spectrum had changed its name earlier this year when it grew its operation beyond batteries to include a number of company acquisitions.