Spectrum N.A. Sales Dip 2% - Twice

Spectrum N.A. Sales Dip 2%

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Atlanta — A slight decline in North American battery sales during the fiscal second quarter was offset by strong sales of shaving and grooming products at Spectrum Brands, formerly Rayovac. However, sales for the three months, ended April 3, dropped to $112.6 million, down 2 percent from a year-earlier $114.5 million.

At the same time, North American segment profit during the second quarter climbed to $22.7 million, a 15 percent increase, compared with $19.7 million in the same quarter last year. The increase was due to the cost benefits from restructuring and related initiatives associated with Spectrum’s Remington acquisition.

Financial results in North America for the quarter exclude results from United Industries, acquired in early February of 2005, and Microlite, purchased in May of 2004.

North American sales for the six months, excluding United, decreased 6 percent to $328.4 million from a year-ago $348.3 million, due primarily to weakness in the shaving and grooming category during the first fiscal quarter.

North American segment profitability for the six months hit $63.9 million, a 19 percent rise over the $53.6 million reported last year, due primarily to the favorable impact of last year’s restructuring and related cost improvement initiatives, offset by lower sales.

Second-quarter consolidated sales rose to $534.5 million from a year-ago $278 million, jumping 9 percent when adjusted to include sales of United Brands. Consolidated operating income reached $35.7 million, compared with $22.5 million.

However, Spectrum reported a second-quarter net loss of $1.9 million, compared with year-earlier net income of $2.6 million. The favorable impact on the quarter’s net sales and operating income from the inclusion of United’s results was more than offset by a $27.7 million inventory valuation charge and $12 million in interest expense related to the write-off of debt issuance costs.

“We are off to an excellent start in our first-quarter reporting as Spectrum Brands,” said Dave Jones, chairman/CEO. “When compared to the same quarter last year, worldwide battery sales grew 11 percent,” he noted.

Consolidated second-quarter sales reached $1 billion, up from $732 million in the same period in 2004, while operating income jumped to $96.9 million from a year-on-year $72.2 million. Net income for the six months was $26 million, up from a year-earlier $24.8 million.

Spectrum officially assumed its new corporate name May 2, when it changed from Rayovac, reflecting the company’s global consumer products portfolio and global retail customer base.

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