Harbinger Group Inc.
    Print Page | Close Window

SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 05/09/2016
Entire Document
 << Previous Page | Next Page >>

value, restructuring and related charges, acquisition and integration related charges, certain purchase accounting fair value adjustments and stock-based compensation. Adjusted EBITDA is a metric used by management and frequently used by the financial community and provides insight into an organization’s operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA can also be a useful measure of a company’s ability to service debt. Computations of EBITDA and Adjusted EBITDA may differ from computations of similarly titled measures of other companies due to differences in the inclusion or exclusion of items in our computations as compared to those of others.
While management believes that non-GAAP measurements are useful supplemental information, such adjusted results are not intended to replace the Company’s GAAP financial results. EBITDA and Adjusted EBITDA are measures that are not prescribed by U.S. GAAP. EBITDA and Adjusted EBITDA exclude changes in working capital, capital expenditures and other items that are set forth on a cash flow statement presentation of a company’s operating, investing and financing activities. As such, we encourage investors not to use these measures as substitutes for the determination of net income, net cash provided by operating activities or other similar GAAP measures.
Adjusted EBITDA — Consumer Products
The table below shows the adjustments made to the reported net income of the Consumer Products segment to calculate its Adjusted EBITDA (in millions):
 
 
Fiscal Quarter
 
Fiscal Six Months
Reconciliation to reported net income:
 
2016
 
2015
 
Increase / (Decrease)
 
2016
 
2015
 
Increase / (Decrease)
Reported net income - Consumer Products segment
 
$
75.3

 
$
27.9

 
$
47.4

 
$
149.0

 
$
77.9

 
$
71.1

Interest expense
 
57.5

 
49.2

 
8.3

 
115.9

 
93.6

 
22.3

Income tax expense
 
14.9

 
8.1

 
6.8

 
21.8

 
28.6

 
(6.8
)
Depreciation of properties
 
21.3

 
18.7

 
2.6

 
44.4

 
37.1

 
7.3

Amortization of intangibles
 
23.4

 
21.2

 
2.2

 
47.0

 
41.7

 
5.3

      EBITDA - Consumer Products segment
 
192.4

 
125.1

 
67.3

 
378.1

 
278.9

 
99.2

Stock-based compensation
 
21.5

 
13.8

 
7.7

 
31.6

 
19.4

 
12.2

Restructuring and related charges
 
1.6

 
4.4

 
(11.8
)
 
2.8

 
11.8

 
(11.8
)
Acquisition and integration related charges
 
13.3

 
11.9

 
(20.0
)
 
23.2

 
20.0

 
(20.0
)
Purchase accounting inventory adjustment
 

 
2.2

 
(2.2
)
 

 
3.0

 
(3.0
)
Other
 
0.8

 
1.7

 
(0.9
)
 
1.0

 
1.8

 
(0.8
)
      Adjusted EBITDA - Consumer Products segment
 
$
229.6

 
$
159.1

 
$
70.5

 
$
436.7

 
$
334.9

 
$
101.8

Our Consumer Products segment’s Adjusted EBITDA increased $70.5 million to $229.6 million as compared to $159.1 million in the Fiscal 2015 Quarter, primarily driven by a (i) $48.6 million increase attributable to AAG’s operations, acquired in the Fiscal 2015 third quarter; (ii) $12.7 million increase in Adjusted EBITDA in the home and garden control products line due to higher sales, improved product mix, and cost improvements; and (iii) $7.9 million increase resulting from increased profitability and operating expense control initiatives in the hardware and home improvement products line. Adjusted EBITDA margin represented 19.0% of sales as compared to 14.9% in the Fiscal 2015 Quarter.
Our Consumer Products segment’s Adjusted EBITDA increased $101.8 million to $436.7 million as compared to $334.9 million in the Fiscal 2015 Six Months primarily driven by (i) $67.8 million attributable to AAG’s operations; (ii) increased profitability in the global pet supplies products line as a result of the acquisitions of Salix and European IAMS and Eukanuba that accounted for $5.7 million and $4.6 million, respectively of the increase in Adjusted EBITDA; (iii) the improved profitability in the home and garden control products and hardware and home improvement products lines due to the factors discussed above. Adjusted EBITDA margin represented 18.0% of sales as compared to 15.7% in the Fiscal 2015 Six Months.

53

 << Previous Page | Next Page >>