HRG-6.30.2015-10-Q (Jun 30, Quarterly) Press Release Ex. 99.1
| | HRG Group, Inc. Reports Third Quarter Results Achieves Revenues of $1.55 Billion as Compared to $1.60 Billion in the Third Quarter of 2014 Currency-Consistent Revenues, Excluding Impact of Net Investment Gains, Increase 13.9% |
NEW YORK - August 6, 2015 -- HRG Group, Inc. (“HRG” or the “Company”; NYSE: HRG), a diversified holding company focused on owning and acquiring businesses that it believes can, in the long term, generate sustainable free cash flow or attractive returns on investment, today announced its consolidated results for the third quarter of Fiscal 2015 ended on June 30, 2015 (the “Fiscal 2015 Quarter”). The results include HRG's four segments:
| | • | Consumer Products, which consists of Spectrum Brands Holdings, Inc. (“Spectrum Brands”; NYSE: SPB); |
| | • | Insurance, which includes Fidelity & Guaranty Life (“FGL”; NYSE: FGL) and Front Street Re, Ltd. (“Front Street”); |
| | • | Energy, which consists of Compass Production Partners, LP (“Compass”), a subsidiary of HGI Energy Holdings, LLC (“HGI Energy”) engaged in the operation, acquisition and development of conventional oil and natural gas assets in the
U.S.; and |
| | • | Asset Management, which includes Salus Capital Partners, LLC (“Salus”), Energy & Infrastructure Capital (“EIC”) and CorAmerica Capital, LLC (“CorAmerica”). |
"This quarter, our consolidated performance was very solid, as our two largest segments - Consumer Products and Insurance - continued to grow from a combination of organic sources and from the integration of our recent acquisitions," said Omar Asali, President and Chief Executive Officer of HRG. "Our companies also continue to invest in innovative new products that are performing very well with our customers, and we continue to execute on our strategies in the core businesses.
"In Consumer Products, revenue grew 10.5%, with record results in key product categories and strong volume growth in Europe. We continue to expect record revenue and cash flow from Spectrum Brands in Fiscal 2015, and with Spectrum's track record of successful M&A integration, we believe the recent acquisition of Armored AutoGroup provides an attractive new business line and an important source of growth in the future.
"In Energy, Adjusted EBITDA remained positive despite the impact of the severe reductions in oil and gas prices. During the quarter, Compass reached an agreement to sell certain of its properties in Northern Louisiana, providing an infusion of capital to Compass' balance sheet and reducing our exposure to the sector. We remain committed to preserving value in this area by focusing on the leverage and liquidity at Compass.
"Finally, at FGL, we remain focused on the core business and the ongoing strategic review process. We are pleased with the results this quarter, as book value excluding AOCI appreciated to $1.38 billion and the trend in robust annuity sales continued, particularly from products introduced in the last year, which should provide a solid pipeline for future growth."
Third Quarter Fiscal 2015 Consolidated Highlights:
| | • | HRG recorded total Revenues of $1.6 billion for the Fiscal 2015 Quarter, a decrease of $45.9 million, or 2.9%, as compared to the third quarter of fiscal 2014 (the "Fiscal 2014 Quarter"), driven primarily by lower net investment gains in Insurance as compared to the Fiscal 2014 Quarter as well as the impact of unfavorable foreign exchange in Consumer Products. Revenue excluding the impact of both items increased 13.9% and was driven primarily by higher Consumer Products revenues. |
| | • | Consolidated Operating income of $74.5 million in the Fiscal 2015 Quarter declined $154.6 million as compared to the $229.1 million of Operating income reported in the Fiscal 2014 Quarter. The decrease was due primarily to the recognition of $112.4 million of impairments in the Energy and Asset Management segments, in the amounts of $102.8 million and $9.6 million, respectively, as described below in the Additional Items section. |
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