SEC Filings
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| 10-Q | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HRG GROUP, INC. filed this Form 10-Q on 05/09/2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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operating expenses were primarily due to a decrease in impairments and bad debt expense of $56.3 million and $47.5 million, for the Fiscal 2016 Quarter and Fiscal 2016 Six Months, respectively, mainly associated with the impairment of a loan to RadioShack that was recorded in the Fiscal 2015 Quarter and Fiscal 2015 Six Months. Excluding the impact of impairments and bad debt expense from both periods for the Fiscal 2016 Quarter and Fiscal 2016 Six Months, operating expenses decreased $5.3 million and $8.2 million, respectively, reflecting a reduction in operating expenses in the Asset Management segment. Corporate and Other Segment Presented below is a table that summarizes the results of operations of our Corporate and Other segment and compares the amount of the change between the fiscal periods (in millions):
Net consumer and other product sales. Net consumer and other product sales for the Fiscal 2015 Quarter and Fiscal 2015 Six Months represents sales from FOH which was deconsolidated in the third quarter of fiscal 2015 following FOH’s declaration of bankruptcy in May 2015. Cost of consumer products and other goods sold / Corporate and Other gross profit. Corporate and Other gross profit for the Fiscal 2015 Quarter and Fiscal 2015 Six Months represents FOH sales less consumer products cost of goods sold for the Fiscal 2015 Six Months. Selling, acquisition, operating and general expenses. Selling, acquisition, operating and general expenses decreased $21.1 million to $8.2 million for the Fiscal 2016 Quarter from $29.3 million for the Fiscal 2015 Quarter. The $21.1 million decrease in corporate expenses for the Fiscal 2016 Quarter when compared to the Fiscal 2015 Quarter was primarily due to $9.1 million of selling, operating and general expenses associated with FOH during the Fiscal 2015 Quarter, as well as lower bonus, stock based compensation expenses, acquisition and integration costs, and legal expenses for the Fiscal 2016 Quarter when compared to the Fiscal 2015 Quarter. Selling, acquisition, operating and general expenses decreased $76.7 million to $22.8 million for the Fiscal 2016 Six Months from $99.5 million for the Fiscal 2015 Six Months. The $76.7 million decrease in corporate expenses for the Fiscal 2016 Six Months when compared to the Fiscal 2015 Six Months was primarily due to $33.2 million of severance costs associated with the departure of the Company’s former Chief Executive Officer (“CEO”) and $18.4 million of selling, operating and general expenses associated with FOH during the Fiscal 2015 Six Months, as well as lower bonus, stock based compensation, acquisition and integration costs, and legal expenses for the Fiscal 2016 Six Months when compared to the Fiscal 2015 Six Months. Impairments of goodwill and intangibles. Impairments of goodwill and intangibles of $60.2 million were recognized in the Fiscal 2015 Six Months. The impairments were due to a change in view of the strategic direction of FOH following the departure of the Company’s former CEO during the first fiscal quarter of 2015, which triggered goodwill and intangibles impairment tests. The tests resulted in total impairments of $60.2 million to goodwill and intangible assets. Non-GAAP Measures We believe that certain financial measures that are not prescribed by generally accepted accounting principles (“GAAP”) may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) is a non-GAAP financial measure used in our Consumer Products and Energy segments and one of the measures used for determining Spectrum Brands and Compass’ debt covenant compliance. EBITDA represents net income adjusted to exclude interest expense, income taxes and depreciation, depletion and amortization. Adjusted EBITDA excludes certain items that are unusual in nature or not comparable from period to period and other non-recurring operating items, such as accretion of discount on asset retirement obligations, non-cash changes in the fair value of derivatives, non-cash write-downs of assets, gains or losses on disposal of assets, gains or losses on remeasurement of investments to fair 52 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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